The Detroit times., 1911-02-22
.BLAMEs AUTO FOR
HIGH FO0D PRICES
R. W. Babson, Financial Expert, Says
Development of Motor Industry Has
Taken Many From the Fields.

Roger w. Babson, financial expert
and economist, has decided views on
the economic value OF the automo-
bile.
Some years ago, when the automo-
bile first became an economic factor,
/ used to preach from the text put
not your faith In motor cars; they
toll not neither do they spin, and
that Just about sums up the economic
view of the situation" said Mr.. Bah
SON to The Times. According to my
figures there win be $400,000,0 900
spent on automobiles in this country
this year and about $350. 900. 900 more
for accessories. Insofar as we give
up theaters, millinery, liquor, tobac-
co and other luxuries to buy motor
cars there is no economic harm. but
when we take money out Of the bank,
money that ought to go into bonds or
investments that are productive, there
is an economic loss.
"The automobile men tell US that
the money is not destroyed, that 1t
goes into labor, etc, but 1t would go
into labor just the same IL 1t were
put into the development of q water
power or the building of roadbed.
The difference IL that there is nothing
but a pile Of junk to represent the
money that was put into the automo-
bile in a few years, while the water
power and the roadbed remain per-
productive. Such an invest
ment creates permanent wealth that
goes on producing indefinitely. 1t Is
not q question of where the money
goes that pays for automobiles; 1t is
q question Of what you get for your
THE rapid development of the auto
mobile industry has had its effect on
speaking, nobody is ever out Of work.
He may not be able to find work in
his regular trade, or he may have to
accept a lower wage, but he will al
ways find something to do. The uld-
mate resort of labor Is to the land.
When all else fails, he goes to raising
food--wheat, corn and cattle. Now, II
Ia estimated that there are 100000
men employed In the automobile in
dustry and about 100000 farmers.
The creation of the automobile indus
try has taken 100000 workers from
the farms, taken them away from the
production of necessities and set
them to work making luxuries. Il
does not take much figuring to see
how this has raised the cost Of food.
'Of course, there are other factors
In the cost Of living. such az the in
creased gold production, the tariff and
the trusts, but one Of the most i'm
portant is the number Of men that
the automobile industry has taken
from the production of necessities.
There is no question, though, that
the automobile is here to stay. +
do not consider ii fad and there will
be more cars sold every year. Most
Of the economic harm has come from
the sudden and rapid development. II
the country had had time to adjust
Itself gradually to the conditions
there would have been no harm done.
II believe that there is q great
future for the industry, here In De-
troit especially, but I believe that the
manufacturers should not
try to force this growth. There was
some readjustment last year, and the
New York bankers were the ones
that did the doctoring. l believe that
next year will be the critical year in
the trade. II the automobile manu-
facturers will apply the check them
selves instead of waiting for II to be
applied from the outside, they will
save the industry from period of
and drastic readjustment
that will cause several disturbances"
Mr.. Babson addressed a few Of the
local brokers in an informal meeting
In the office of K. B. Caldwell & Co.,
noon, and leaves for the
east. Wednesday evening.