Barometric Indices of the Condition of Trade

Abstract

So far as the merchant is concerned, comparative statistics relate to the weight, quality, age and .methodl of manufacture of the merchandise in which he deals, together with such figures as are published in the trade journals. From the investor's point of view, comparative statistics include all particulars concerning the bonded debt, the earnings, and the general physical and financial condition of properties. Such statistics are very necessary to bankers an(l investors for comparing similar securities of different companies, or different securities of the same company. If such data is always up to date, such comparative statistics are very valuable for enabling one to select safe securities, either for permanent investment or for buying and selling again. As the largest and most successful stock exchange brokers, bond houses and mercantile firms, are already well supplied with comparative statistics and are obtaining excellent results, we need not here discuss (letails concerning this class. It should be clearly understood, however, that such statistics are worthless for determining the general course of the entire market or for serving as barometric indices of the condition of trade. Comparative statistics determine only actual values, enabling one to select safe securities or good merchandise, or to select the better of two or more companies' securities, or grades of merchandise. With the general market contlitions remaining fixed, comparative statistics might be used for forecasting a rise or a lecline; but the general market is so seldom stable that comparative statistics cannot be depended upon to serve this purpose. They have been brought into disrepute at times because of the fact that (593)