Every evening, Wilmington daily commercial., 1921-10-22
Motor Auctions Next
Says Babson
Famous RcOno mist Forecasts
Eject on Motor Securities
(Au rights strictly reserved

The automobile industry s enter
ing new era The FIRST stage u,ao
when the demand Tor caru cwoena-l
the supply and we coufa nor buv atHh
mobiles except for caeh the rsasra
stage was when the e,nniv rraea.f
the demand and cars were sold nr
the instalment plan and on time rer.
orally: the third stage which ua are
now entering Is when thcre is an ar-
tive market for STANDARD makes ~
cars with q ibid and asked" price
reasonably near together The roa-
son that 7 sav automobiles are now
reaching this third stage h hacauas
Of the automobile auctions which are
beginning TO be held in the large
cities
Everyone remembers twenty years
ago when most cities had their daily
and weekly auction sales of horses
In some cities entire streets uver
given up 20 these auction ga1aa ~
which the people came from miles
around. These sales existed because
horses were standard commodity.
ana an except fancy horses and
thmoughbreds had their market prices.
The horse that would normally be
quoted al $3.50 would have ready
sale at 1925 and would usually hn
priced at not more than s27s. win
automobiles this situation. az rotfrue
has never existed. N a car had bean
run one Gay, there was daprocia-
lion Of about 90 per cent. the amount
Of the selling commission. vvhila IL
J. mad been run a few thousand miles.
the depreciation became much gruater
There would often be a difference a.
q thousand dollars between the bid
and the asked price on a car that
would De rated around $4,000. This
oe course, has tremendously added to
The selling costs and has been a great
drag on the industry.
With the Introduction of auctions
for new and secondhand cars. tina
price level win soon be rtahlHzed
wltR the result that excessive aellinu
costs and many other costly features
of the automobile industry. viii bs
eliminated. To the medium briced.
honestly built. light cars. these Nuc-
tons viii be gTeat boom althutrh
they may result in putting some other
makes OF cars out of business. TIA
other words, the automobile auctions
like the old horse auction--wiu be
the acid test distinguishing the good
cars from the poor cars. the COM
pauies which spend most OF their
money on selling from the companies
that spend most of their money on
materials.
What does this mean 70 nutorao-
bile securities2 1t should help tho se-
cUrities Of certain companies who arr
making standard, light cars, TO sell
at a reasonable price. II win hep
companies which have establish I
their reputation for workmanship, ac-
commOdating local service and judicial
advertising. A good name rs more 10
be- desired than great riches" and this
especially applies to the automobile
industry. The securities OF companies
having such a good name should dis
tiuctly benefit during this third stage
which the automobile industry Is en-
tering. On the other hand, these auc-
tions make it all the more important
that investors should show great dis
elimination in purchasing the securi-
ties Of automobile companies.
General business is still dragging
on the bottom. The Babsonchart Of
Business Conditions shows activity
Is per cent below normal.