SECTIONAL TRANSACTIONS.—E*. 427 
Discussion on The Utility of Trade Barometers. (Chairman: Prof. A. L. 
Bowtey. Mr. J. A. Crastrer; Mr. H. Quicury; Sir Jostau 
Sramp, G.B.E.) 
Mr. J. A. CRABTREE. 
A business man’s view of trade forecasting services.—The problems of the business 
man—his need for concentrated economic information.—Whom do the forecasting 
services seek to serve ?—Price and Trade indices and their use in relation to the 
individual business.—Stock Market indices.—Hindrance of constant changes in 
structure and base of indices.—Why not have an agreed international base year 7— 
The limitations of current methods of weighting.—Some faults in charting methods 
and suggested improvements, and need for standardisation.—Failure of forecasting 
services during last three years.—Why the failure and what alterations seem to be 
necessary.—Difference in outlook of economist and business man.—The gap to be 
bridged between the general economic situation and the individual business.—What 
the forecasting services can do. 
Mr. H. QuicLey. 
Trade barometers depend for their effective functioning on a number of factors 
which cannot all be accurately defined. Chief among them are :— 
1. Relative stability of purely economic values as against political and social in 
the modern state. 
2. Accuracy of statistical registration and the continuity of adequate records over 
a period of time sufficient to allow some degree of historical perspective. 
3. Correct definition of the industrial and economic activities covered by the 
statistics used in the formation of the barometer, so that duplication will be avoided 
and excessive over-weighting of certain factors be eliminated. 
4. Accurate adjustment of the time and production factors. 
Those four conditions are, in themselves, almost impossible of realisation, with 
the result that, in its most complete form, the trade barometer is still a very defective 
method of assessing trade tendencies. 
The limitations of trade statistics used for study of movements over a considerable 
period are, primarily, mechanical. No satisfactory method has yet been evolved of 
linking up the elements which should comprise an adequate barometric curve. 
Production, trade, employment, finance, shipping and transport represent essential 
activities which hitherto have not been brought together within a satisfactory 
statistical framework, with the result that present trade barometers are based on a 
_ selective process which is dangerous in itself, through lack of adequate representation. 
The trade cycle is not a natural, scientifically determinable phenomenon. It is 
subject to psychological, political and even ethical influences which cannot be assessed. 
It lends itself, therefore, to no set principle or law which could cover all the factors 
and influences involved. There is the additional weakness, that large-scale industrial 
and commercia! activity, as understood now, is less than a century old, and one 
cannot, in default of scientific deduction, obtain principles through observation 
spread over a long period of time. The greatest weakness of all is to be found in 
the fact that the trade cycle cannot establish a clear distinction between the static 
and dynamic elements composing it, and statistical records are not yet full enough 
to allow the investigator to forecast, very much in advance, the main lines governing 
technical, scientific and social progress, which ultimately have an effect on trade 
activity. 
The value of the trade barometer is decidedly limited, in view of the factors already 
described, but it is quite real. Through the statistics collected in its compilation it 
gives an illustration of the state of production and of trade at a definite time, and 
renders it possible for the €xecutive to establish a basis of assessment in the study 
of non-statistical, ancillary or auxiliary economic movements. 
The trade barometer, when it is properly executed, permits of some form of 
budgetary control in industry on a short-term basis, and it may be used to establish 
control or to guide marketing and production policies within very narrow time limits. 
It illustrates upper and lower limits to manufacturing enterprise, largely because it 
is concerned with statistics governing volumes and values. It does not serve as a 
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