Connecticut western news., 1922-04-20
ADVERTISE IN 1s22l
 SAYS ROGER w. BABSoN
Famous Statistician Outlines r.. First Opportunity Of
 Coming Period

coming period of prosperity as follows:
 "On this recent trip which took me into practically every large in- dustrial center in the United States, talked to business men, large and small, about their business, and wo discussed both the present situation and future plans. 7. #
 'Tt is very apparent that the exc cutives of America have been busy since January 1920 even if the busi- nesses themselves have not. "In fact, American business men have probably done more real think ing since the depression set in than they did in the whole period of pros- perity which preceded it. Almost every. man I talked with has a plan for a new building, new product, or the development of a new sales field. The project is on paper, the details have been worked out, and he is just waiting for conditions to get settled. All of these plans mean potential business for next year or the year after-actual orders will be placed just as soon as prices and markets reach stable 'evels.
 "This situation apparent as we reach the bottom of the present area of depression in 1922, offers the first real chance of the coming period of improvement. Future business is now on the production counter. You can buy it cheaper now than you will be able to buy it at any time during the next four or five years.
 Tt takes no little courage to 20 counter to the popular current and spend money for advertising wheu immediate returns are smaller than usual but am convinced that the man who has that foresight and courage will gain an advantage-a running start-that will carry him through the coming periods of im- provement and prosperity.
 1922 is the year to use the re- serve set aside during the fat years. Cut production costs as much as possible, but don't slimp your selling appropriation during 1922. Defer expansion of plant until next year but this year-increase your adver- Using.
 "Take the aggressive course! There will be considerable business this summer, more the coming fall and winter, more still next year. But the man who goes after it now is the man who will get it.
 ''In general business the slight seasonal reaction which I forecast three weeks ago for January is al- ready apparent The Babsonchart Index shows business running 179s below normal-four per cent lower than last week. ....
 Stocks Not An Investment
 Discussing the investment situation Roger W. Babson makes the follow ing statement. Dividend cuts have become an every day occurrence and promise to continue at their present rate for at least another year.
 "Last months payments on Ameri- can industrial stocks, common and preferred, were $S,100,000 less than in November 1919 and S5,300,000 less than in November last year. This represents loss of 23.7eo or nearly one fourth compared with 1919 and 16.6qo or one six less than last year. .....
 "There is nothing particularly alarming about such a development as it is but one of the characteristics of the period of the depression in every business cycle. s
 "The trouble lies in the. fact that the general investing public does not seem to have been aware of this fact. As go about the country I am appalled, by lists shown me-not only by the widow and untrained youth but by the man who is keen in his own busienss. Their lists of "invest- ments" are generally overloaded with stocks which at times pay divi- dends. They have counted on these as income and are very seriously embarrassed as a result of the cut in dividends. Their unfortunate posi- tion is due to their disregard of a very fundamental point,
 "Stocks have an essential place in our financial structure. Without the commitment of some funds to the risks of production, transporta- tion and merchandising--buying goods with the hope of selling for proft-business could not be done. The purchaser of common and pre-. ferred stocks is furnishing money for these purposes. His stock certificate establishes no obligation in his favor but simply certifies that he has a proportionate interest in the business .. He is a partner in the broader sense of the word, and subjects himself to the risks of proprietorship and takes the profits when there are any. One should not enter into this position without realizing that he is speculat- ing. z--
 Investment on the other hand Is
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