s v AGRICULTURAL PRICES 



1909. The secular trend is a straight line, and the actual goes 

 above and below the secular trend in more or less wave-like fashion. 

 In Chart I, the straight line is the secular trend of heavy hog prices 

 at Chicago for 1903-1916, and the irregular line fluctuating above 

 and below is the actual price of heavy hogs. 



The next problem is to eliminate the normal seasonal varia- 

 tion. For example, hog prices have a normal tendency to go down 

 in the fall of the year, whereas bank clearings have an equally 

 normal tendency to go up. Obviously, seasonal trends must be 

 eliminated if Mich scries as hog prices and bank clearings are to 

 be compared. 



As an average of the fourteen years from 1903 to 1916, inclu- 

 MU-, heavy hog prices at Chicago averaged in January, $6.54; 

 February, $6.83; March, $7.22; April, $7.30; May, $7.10; June, 

 $7.10; July, $7.18; August, $7.14; September, $7.29; October 

 $7.08 ; November, $6.65 ; December, $6.55 ; average for the entire 

 year, $7. On this basis, January is 93 per cent of the yearly 

 average; February, 98 per cent; March, 103 per cent; April, 104 

 per cent; May, 101 per cent; June, 101 per cent; July, 103 per 

 cent; August, 102 per cent; September, 104 per cent; October, 

 101 per cent; November, 95 per cent, and December, 94 per cent. 

 The December average for 1902-1915 is $6.30, or 90 per cent. 

 Obviously, the seasonal variation as just stated in percentages is 

 affected to some extent by the secular trend, for the Decembers of 

 1902-1915 average 90 per cent, and those of 1903-1916 average 

 94 per cent. Taking the secular trend out of our seasonal, or 

 adding 2 points to the early months of the year and subtracting 2 

 points from the last months of the year, we get approximately: 

 January, 95; February, 99; March, 104; April, 105; May, 102; 

 June, 101 ; July, 103 ; August, 102 ; September, 103 ; October, 100 ; 

 November, 94, and December, 92.* 



Hog receipts at Chicago, in the same manner, have a modified 

 seasonal factor of January, 132 per cent ; February, 117 per cent; 

 March, 102 per cent; April, 85 per cent; May, 99 per cent; June, 

 99 per cent ; July, 87 per cent ; August, 87 per cent ; September, 74 

 per cent ; October, 86 per cent ; November, 103 per cent ; Decem- 

 ber, 129 per cent. 



For bank clearings outside of New York City, the modified 

 seasonal factors are: January, 109; February, 93; March, 104; 



The link relative method of finding the normal seasonal variation, as 

 by Warren M. Persons, in the January, 1919, Review of Economic 

 sties, is far more difficult than the method here used, and for our 

 purposes is not worth while. 



