Alma record. (Alma, Mich.) 1878-1928, 1922-12-07
IMP R0VEMENT
NOT GENE RAJ
BABSON SAYS ONLY HALF OF
BUSINESS WORLD Is YET
SHOWING IMPROVEMENT.


discussing the general industrial re-
vival.
"Depressions hit the country very
much like storms" says Mr.. Babson,
lard just as they affect different
localities Of the country in regular
sequence they also affect the differ
ent divisions of our business world in
different degrees and at different
times.
"The fact that a depression or
dinarily starts in the Northeast
works South and West, finishing its
course in California, is clearly evil
dent from statistical study Of the
situation If we look at the bust
ness world we find it dividing itself
into four big divisions and we find
that the business depression traces
its regular course thru this industrial
fabric.
First, there is the Raw Materials
Group, or iron and steel companies,
copper and oils, crop and live stock
producers. Second there is the Tran
sportation Group, the railroad and
steam ships. Third, there is the
Manufacturing Group with its auto
mobile factories, textile mills and
the other fabricators of finished pro-
ducts. Fourth, and finally there is
the Distribution Group headed by the
wholesale houses, mail order firms,
chain stores, and finishing with the
multitude Of retail establishments
"Now what happens to these Big
Four Groups when a business depres-
sion hits the country? The first to
suffer is the Manufacturing Group.
This is partly the result of financial
stringency. Take the recent depres-
sion, it appeared first among shoe
factories, textile mills, and other
factories. In a broad way these are
concentrated in the Northeast sec
ton Of the country, and it was exact
~ in this region that trouble first
appeared. This was entirely charac
teristic. 1t is what happened also in
earlier periods of business depression.
Farsighted executives foresaw long
in advance, that this would be the
first part Of the country TO weaken,
because it is the home of the Manu-
featuring Group.
'Then comes the next act in the
drama Of depression. As the logical
result of curtailed manufacturing, we
pet slump in the Raw Materials
Group. When q shoe factory shuts
down, orders for leather shrink.
When a textile mill closes, demand
for cotton and wooI Gies-cown. SO
the initial weakness in the North
east spreads to the West and the
South The West and the South are
the home of the Raw Materials
Group.
GAS traffic in finished goods and
raw materials subsidies, there is les
sened activity for the Transport
ton Group. The railroads fall into
line on the downward march.
"The tragedy with the last act,
ramely, the. downfall of the Distrib-
uting Group, numbering the great
mass of retailers scattered turnout
the entire country who are caught
with high cost goods. The economic
curtain falls on a lard sunk in al
most universal depression.
eve have just seen all this enacted
before our eyes. With this sequence
Of events still fresh in memory, a
business man is blind, indeed, who
cannot foresee the pageart Of return
ing prosperity. Manufacturing ac-
tivity has been resumed. The North
east is we'll advanced or recovery
The South and to some extent the
3 D.,
Materials Group begin to struggle to
their feet. Car surplus has changed
to car shortage, -rafleeting and
measuring the revival Of the Trans
portaton Group.
"But the final stage is still before
us. We have yet to witness full re-
sumption among the great rank ano
file of retailers who constitute the
final group Of the Big Four, The
Trading Group.
therefore, / estimate that i'm
provement is not yet general anC
that the best is yet TO come, wher
all the Big Groups shall partic
pate in prosperity. Those who appre
bend that the bull movement in Tn,
stock market is at an end, Nigh
well question whether recovery cal
in airy sense be comlete whit th
enormous Distributing Group still
to be heard from.
General business is holding it
recent improvement. The index o
the Babson chart shows general &C
tivity above go below normal-th
same as last week.
at is true, of course, that tn
stocks of the so-called trading cor
porations show a substantial ad
swxznszznznunzxu