New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-07-17
Stock Market Barometers

ou,stlon-I found the article on STOCK
/ market credit barometer by Gay on =
I penhale in irsue Of June IL and subseqneh'
/ r.rnsrts Of June 25 extremely interesting
l l would like TO know eracty hoHW, ~
/ Penhais complies his figures ana VIZ ~
/ preciats information on the touo".xns -,
| patio Of deposits 70 loans. Should the sum
/ OF the net demand. time and government
/ deposits DO divided BY the total OF ioans
and discounts7 2. Ratio OF toial reserreA
80 deno,its and Federal Reserve note la
| bii,sIa. combined. IL II correct 70 use the
/ egpr.s Issued By the Federal Reserve
Bosrdf 8. what are the iaotots TOT ~,
sonal Correction 4. What IL inc me,h y,
/ Of reducing dsviations from normal 20
| sfanderd units and combining In the maj
/ curvo7 what are tho different NUMBERS
/ OF per cent used 70 reduce eaen IA,lo 20
units Of equal weightI .. MhN , ooSm
mental statistics as business oarometers T.
H. Y, H.
Ansver-Mr. Penhale has prepared
the subjoinsd answer TO your inquiry
"Two or three columns Of space at
least would be required 10 supply tho
data which III. I. H. requests in the
above inquiry. Therefore ! am comm
ING the answer, first, 70 tho briefest
nossible outline Of the statistical meth
DDS employed, and, second, 70 listing
some Of tho better known works on
foreeasting. The answers 70 the ques-
tIons. on tho basis above outlined. are
seouentially al follows: 1. Ratio OF de-
nosits 10 loans Of all reporting member
banks of the Federal Reserve system.
Denosita: Sum Of net demand de-
posits., 'timo deposits and govern
ment deposits Loans; Sum OF items
total loans and discounts and other
bonds. stocks and securities From this
sun deduct tho total bills rediscount-
ed with Federal Reserve banks 2.
Ratio OF total reserves 70 deposits and
Federal Reserve note liabilities COM
bined. from the weekly statement Is
sued bv the Federal Reserve Board. B..
The factors for seasonal variation are
the mean OF the ratios Of the monthly
value TO the average Of the twelve
months for which the particular month
ia the center. Z. The unit Of standard
deviation Is the square root OF the
mean square Of the percentage devia-
tIons over the base period. Percentage
deviations are then divided by this
unit. The two curves are then COM
bined by averaging their respective
deviations. 8. Wesley c. Mitchell,
business Cycles The Studies Of the
Harvard Committee on Economic Re-
search J. +. Jordan, Business Fore
casting Henry l.. moore Economic
Cycles, Their Law and Cause; Intro
duction 70 Economic Statistics George
X. Davies; Cycles of Prosperity and
, Depression in the United States. Great
Britain and Germany A Study OF
Monthly Data from 1902 to isOs,' Al
vim Harvey Horsen. University Of Wis.
consin; Studies in Social Science and
History. No. g. One OF our products
Standard Daily Trade Service-pre-
, sents such studies from time TO time.
Since It Is obviously impossible 70 give
details of the methods employed and
! the results Of data, and inasmueh as we
, shall be glad TO oblige any Tribune
reader as far as VIC consistently can
have asked our chief statisticians 10
20 into the matter with any one you
, NAV want 20 send down 20 see him. IL
will DO necessary, however, to tele-
phone me first to make an appoint
, ment."