Every evening, Wilmington daily commercial., 1921-12-31

In discussing the general business
outlook. Roger w. Babson, prominent
business authority outlines coming
conditions as follows:
Things look better than a year
ago. At this time last year we were
debating ut the most rapid rate the
country has ever known. Everything
was on the toboggan. Since then the
Babson Commodity Index has dropped
from s3.71 in June, 1920 to SILL, in
August, 1921 drop of 81 per cent?
and now stands at si.S3. Commercial
paper rates have dropped from s per
cent to 5h per cent. Business early In
the summer touched the lowest point
since 1915. For tho last few months
there has been n slight recovery. This
means that the "wringing out" process
has developed IN a substantial way.
1921 failures have totaied nearly $780,
600 .000---more than twice as much as
any previous year in the history OF
the United States! Moreover, they
are continuing at very high rate.
Inventories have been drastlcally cut.
Factories are closed or running only
half time.
After the business debauch We had
from 1916 TO 1920, the best thing that
could happen was just such a drastic
6eflation as we are experiencing. The
-sooner a solid foundation is establish
ed tho better OFF business will be. Do
not misunderstood this, however. SUI
perfcial Students are saying that we
shall Immediately vault into an era of
good business again, but statistics do
not corroboratc this view. After the
orgy of imitation above referred TO. it
takes time to correct the situation.
Thus far we have swung about half
way around the inevitable cycle of
events.
I'VE have passed through periods
iof declining stock prices and COM
modify prices, and to some extent de-
clining real estate prices. We are al
ready getting TIE first taste of low
money rates.
The Babson chart has recovered
! from a low of 80 per cent below nor
NAL TO its present position, IL per cent
below normal. The recovery has beer
rapid. IT probably will not continu,
at such n lively rate. After the recen
seasonal Improvement we shall prob
ably have n reaction, and then anothe
upturn. or course some lines whicl
have already been severely debated
such as textiles. leather products an,
packing, will improve, but others, in
cludins coal, steel and oil will decline
Sales the early months of tho yea
will be lower than 1921, but somo im
provement should bring next fall III
so that the net result will show 1872
TO be about the same as 1921. lex
cept we shall be further along towar
{ the brisk business which must even
; tually return.
Our hindrances now stand as fol
lows:
I'D Conditions in Europe are sti
chaotic. We are all grateful for tn
, improvement since the Disarmament
! Conference began. but in ordinar
times Europe has taken over half on
|. exports. AT present she is more in
tercsted IN selling 20 us than buying
"(2) Our agricultural areas are hay
, ing the worst depression in historJ
Particularly is this true OF the cor
, belt. where crops arc worth littlo @
nothing and where the things III
. farmer buys are still very high.
: "(S) There is stll disheartenin
Jack of balance in other lines, an
between wholesale and retail price
wages and profits.
"(B Nearly every industry is suffer
2 ing from excess capacity develope
during the war, and from burder
some overhead which must be el