═══════════════╤═══════════════════════════════════════════════════════ Bank Clearings │ Hog Receipts at Chicago, in Millions of Pounds. Outside New │ York. │ ───────────────┼──────┬──────┬──────┬──────┬──────┬──────┬──────┬────── „ │ 158 │ 169 │ 180 │ 191 │ 202 │ 213 │ 224 │ 235 ───────────────┼──────┼──────┼──────┼──────┼──────┼──────┼──────┼────── $12,800,000,000│$14.06│$13.46│$12.86│$12.26│$11.66│$11.06│$10.46│$ 9.86 13,300,000,000│ 14.56│ 13.96│ 13.36│ 12.76│ 12.16│ 11.56│ 10.96│ 10.36 13,800,000,000│ 15.06│ 14.46│ 13.86│ 13.26│ 12.66│ 12.06│ 11.46│ 10.86 14,300,000,000│ 15.56│ 14.96│ 14.36│ 13.76│ 13.16│ 12.56│ 11.96│ 11.36 14,800,000,000│ 16.06│ 15.46│ 14.86│ 14.26│ 13.66│ 13.06│ 12.46│ 11.86 15,300,000,000│ 16.56│ 15.96│ 15.36│ 14.76│ 14.16│ 13.56│ 12.96│ 12.36 15,800,000,000│ 17.06│ 16.46│ 15.86│ 15.26│ 14.66│ 14.06│ 13.46│ 12.86 16,300,000,000│ 17.56│ 16.96│ 16.36│ 15.76│ 15.16│ 14.56│ 13.96│ 13.36 ───────────────┴──────┴──────┴──────┴──────┴──────┴──────┴──────┴────── LIMITATIONS OF THE MATHEMATICAL METHOD Such a mathematical formula as: Hog prices equal .56 bank clearings—.56 hog receipts must always be applied with common sense. In November of 1914, for instance, hog receipts at Chicago were abnormally small on account of foot-and-mouth disease, and in December of the same year they were abnormally large for the same reason. Judging from receipts, we might have expected heavy hogs to sell for $8.83 in November and $6.44 in December. As a matter of fact, the actual price was $7.50 in November and $7.10 in December. It was commonly recognized by the trade that hog receipts at Chicago in November and December of 1914 were abnormal, and not representative of the potential supply in the country at large. Occasionally, as in November of 1907, falling prices act to curtail receipts. The small receipts in November, 1907, would have indicated a price of $6.75, whereas the actual price was $4.90. As a matter of fact, there was a large number of hogs that year, and the actual price reflected the potential supply rather than the temporary supply. It is possible to refine the method considerably. For instance, it may be worth while to proceed on the assumption that the relation between hog prices and hog receipts is best expressed by an equation representative of a hyperbola or skew curve instead of a straight line. The straight line equation, based on the years 1903 to 1915, inclusive, is: Hog prices equal −.8 −.56 hog receipts. The hyperbola equation for these years is: Hog prices equal −1.24 −.55 hog receipts +.0046 hog receipts squared. The skew or cubic curve equation is: Hog prices equal −1.18 −.24 hog receipts +.0027 hog receipts squared −.00079 hog receipts cubed.