Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-12-05
IMPROVEMENT NOT YET
GENERAL, SAYS BABSON
Statistcian Says Only Half of Business World
Yet Affected

WELLESLEY HILLS, Dec. 4
Roger w. Babson today called at
tention to a very important fact in
discussing the general industrial re
vival.
"Depressions hit the country very
much like storms" says Mr.. Babson
"and Just as they affect different
localities of the country in regular
sequence they also affect the differ
ent divisions of our business world n
different degrees and at different
times.
THE fact that a depression o.
dinarily starts i'll the northeast,
works south and west, finishing its
course in California, is clearly evi,
dent from a statistical study of the
world we find it dividing itself into
four big divisions and we find tina,
the business depression traces its
regular course thru this industri4r
fabric.
First, there is the Raw Waterfall
group, or iron and steel companies
cODDerS and oils. crop and live stock
producers. Second there is the.
Transportation group, the railroads
and steamships. Third, there is the
Manufacturing group with its adto
mobile factories, textile mills and the
other fabricatiOns of finished prod
ucts. 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 depr res
sion hits the country? The first o
suffer is the manufacturing group.
This is partly the result of financial!
strin2envy. Take the recent depres
sion, it happened first among sh ,
factories. textile mills, and other fac
tories. In a broad way these are
concentrated in the northeast sec
ton of the country. and it was eX.
actly IN this region that trouble frs:
appeared. This was entirely char
acteristic 1t is what happened also
in earlier periods of business de-
III tSS itIl, II dtISIS IIGl executives lOl T.
saw Ions in advance that this would
be the first part of the country tC
Walen, because it is the home of TIC
manufacturing group.
Then comes the next act in the
drama of depression. AS the logical
result of curtailed manufacturing
we get a slump in the raw materials
group. When a shoe factory shuts
down, orders for leather shrink.
When a textile mill closes, demand
for cotton and wool dies down. SO
the initial weakness in the northeast
spreads to the west and the south.
The west and the south are the
home of the raw materials group.
LAS traffic in finished goods and
raw materials subsidies, there is les
sened activity for the transportation
group, The railroads fall into line
| q ,ne downward march.
THE tragedy closes with the last
act, namely the downfall of the dis
tributing group, numbering the great
mass of retailers scattered through.
! out the entire country who are
caught with high cost goods. The
economic curtain falls on land
sunk in almost universal depression.
I'VE have just seen all this enact
| ed before our eyes. With this Sc
| quenCC of events still fresh in mem
| Dry, a business man is blind. indeed,
| who cannot fOrcsec the pageant of
returning prosperity. Manufacture
| ing activity has been resumed The
northeast is well advanced on re-
cOvery. The south and to some eX-
| tent the west are looking better as
the raw materials group begin to
struggl2 to their feet. Car surplus
| has changed to car shOrtagc-re-
! fleeing and measuring the revival of
the transportation group.
But the final stage is still before
us. We have yet to witness full re-
sumption among the great rank and
| file of retailers who constitute the
| final group of the big four, the trad
! ing group.
Therefore, I estimate that i'm
provement is not yet general and
that the best is yet to come, when
all the big four groups shall partici-
lpate III prosperity. Those who ap-