The Detroit times., 1911-02-23
DLAMEs AUTO FOR
HIGH FOOD 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,
I 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 20 my
figures there win be s400,000,000
spent on automobiles IN this country
this year and about $3.50, 100000 more
for accessories. Insofar as We give
up theaters, millinery, liquor, .obac-
co and other Injuries 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 IL not destroyed, that II
goes into labor, ETC., but II would go
into labor just the same IL IL were
put into the development of water
power on the building of roadbed.
The difference is that there Is nothing
but a pile OF junk to represent, the
money that was put into the autom0-
bile In few years, while the water
power and the roadbed remain per
manently productive. Such an invest
ment creates permanent wealth that
goes on producing indefinitely. 1t Is
not a question OF where the money
goes that pays for automobiles; IL is
a question of what you get for your
money.
The rapid development of the auto
mobile industry has had its effect on
the cost OF living. Economically
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
mate resort of labor Is to the land.
When all else fails, he goes to raising
food-Twheat, corn and cattle. Now, II
Is 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 Injuries. Ii
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 as 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 il here to stay
do not consider II a fad and there will
be more cars sold every year. Most
OF the economic harm has come from
the sudden and rapid development. IL
the country had had time to adjust
itself gradually to the conditions
there would have been no harm done
II believe that there is a great
future for the industry, here in De-
troit especially, but | believe that the
automobile manufacturers should not
try to force this growth. There was
some reimbursement last year, and the
New York bankers were the ones
that did the doctoring. 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 1t to be
applied from the outside, they will
save the industry from a period of
depression and drastic readjustment
that will cause several disturbances"
Mr.. Babson addressed few of the
local brokers in an informal meeting
in the office of K. B. Caldwell & Co.,
Wednesday noon, and left for the
east, Wednesday evening.