The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1921-11-19
NOTED AUTHORITY AND sTATIsTI-
CLAN TELLS PLAIN FACTS OF
DEPRESSION CAUSES
NOT PSYCHOLOGICAL" BUT ECO
NOMIC HEADACHES - III
LOUNTERACT THE EFFECTS
by ROGER W. BABSoN

\ great many statements ar" being
made nowadays by prominent and sue
CeSsful men. saying that from no" on:
or in the near future business VIII
begin to boom Then our troubles VIII
be over 1t makes pleasant reading but
when you are trying To run a business
or invest money or plan for J"D' IL
"a we'll 10 do little studying for your
self question very much the sup
posed benefit Of these sunshine inter-
views. unless the tide Of business Is
ready to turn away.
II You have headache the sooner
you End out tho cause and correc; IT,
tho quicker you VIII get over your
headache You know vel, enough II Is
not ACKNOWLEDGMENT. II late nights ana
heavy suppcrs cause IT, you must get
more sleep and eat lighter snppers to
cure It. business depress."ns are moth
ing more nor less than economic head
ache. They are caused by eXccsScS.
They end when those excuses have
been stopped and their effects counter
acted
Hence. my advice is--when trying TO
judge how lonE II will b" before hus'-
mss Starts upward look FOR the FUN
damrHtal causes. When the causes or
1riresSiuu are removed. then We set
ready FOR good times.
We hnd Ave Years az prosperity
r4ia l92O During that time we Hd
more thAu the average volume OK busl-
ness. Prosperity, however, brought
nh,ut = great change IN tne whole ma
ton Inflated demand for goods ana
absence Of COMPETITION both at nom"
and IN Europe caused manufacturers 10
/ think more Of profits than o! service,
Quality drrNncd hut prices Increased.
Rig orders and promises "f big orders
caused them t. expand their plants 70 a
"rodu".nE ramcIiy far greater 'Aan tne
ronsHmcrs can support In nN'"nr' t'n'N
Labor insisied on moro wages with less
work. Snort supply # @a"..s "'ia ~
limited demand started speculation
among mon and hoo%t"d pCiccS st!! Tu"-
rhcr Merchants. naukcrF. hrokers-in
fact every rroup--turreh ite efforts 10
getting instead OF giving. The mania
was 10 gc; something for nothing.
Ready for tho Headache
. January. 1890. found us with big
volume ~ business on Fl rotten foun-
daiior. SO much money had boon spcn;
n nnn-productive ways that credit was
. .trr'n"d ~ tive breaking point The
whole business machine MS r"ore'
un L. . fever h"at---a perfect DresrTip-
HON FOR 4 hrqdarhc' The Inevitable col
Iapsc came n the nast Nc"- aud a
hair wr have boon suffering from tho
effects Of our ""rr". low lon. MA y
take TO get wclI" lis depends on how
last 80 correct our previous wrong
duinrs
From a fundamental standpoint hus!-
."ya ia a whole lot better now than In
III" ,nst imrt OF the prosperity period
We have made considerable Roadway
Federal Pank reserves hay" Increased
from t2C,, to ahou, = r.. Speculation In
commodities ms been cut to mini
mum wholesale prices on TN" average
;rr low enough. hu' Uur factories nave
EXPANDED their flNcd overhead charge?
SO much that they cannot make = lt"'n :
At theae prices until there IS further
REIMBURSEMENT; Rrta:i prices .,r" stu. t"
high. DltNough this dHHS not mean that
tho retailer Is making h'E profit He
p $50 mu>i take HIS IN" lo7 IN
wise buying and overhead expansion.
Labor morale has improved somewhat
hut too many workc~r arc sticking &c
the false idea that they can get more
moncv FOR Icsc work Foreign Condi'
;ions are SIN 4 sore spot. As | stated
Two weeks ago tremendous Issue hang:
on the nut'nm" uf IN" armament con
ference rr"pir are hHvtnn'ng I" SEE
that Won can't got Somrth:nE for moth
Ing and cvcrywh'-" thor" - tendency
,n yet back on tNc sound foundation o'
n nard days work ror reasonable pay.
Tho Chart
Inc host guide know In judEtnl
these conditions Is 70 set down tho AE
urrs " business activity in chart form
Reduced 70 A single index this gives 20,
the outline 10 the chart above pictured
The line marked Y represents tn
average growth Of hueinCss and dtvide'
the periods OF prosperity and depression
which are formed ahOv" and below IL By
the variation Of actual business from
normal.
You will not" that each period q
nrnsncrity IS followed by an equiralen
aerlrd Of depression. big boom Z"
NOS and aOG was followed by the pa nj
o" IonT and 1905 The period above tn
line IN l9O9-I2 was followed by the dc
preston Of l9l3-l5.
In the present cycle we still hav'
ahnu, two thirds 10 60. II is well q
remember. howcIe r, that as soon rs III
corner Is turned business will show
steady Improvement even though We arr
stu in tho arc; ~ depression.
BUSINESS this last week has improved
Of. &C and now stands at lTcc below nor
,gyNt In