Alma record. (Alma, Mich.) 1878-1928, 1922-12-28
DISCUSSES THE
PRICES, WAGES,
SALES Of 1928
Roger BabsOn Takes Up the Out
look for 1928 for Readers
of the Record.
Says Stocks and
Bonds VIII Go Up

That question is uppermost in the
minds of 100000 American bust
nessmen and investors who are fac
irg the problem of making plans for
the New Year.
Signs are not clear and the usual
barcmeters seem to contradict one
anc. her.
In the face of this general confus-
ion we had best fall back on the facts
and figures. After thoro study Of
the fundamental conditions that gov
ern our market, Roger w. Babson to-
day issued a statement which clears
the air and furnishes basis Of fact
for your plans.
1--WE are now q, a point in the bust
ness cycle" say, M. Babscn, where
you can get almost as many different
opinions as there aIc business men.
Some are very bullish for the coming
year. and others canro see much
hope for business. The reason for
suteh a situation is that we are at
present neither at the top of boom
nor 1T the denth Of depression. If
We were at oitker cf these extremes
taerc would be no question Of what
the next move would be. As it IS,
we are about half way between them.
During the past year United
States business has steadily advanc-
ed until the average for the whole
country is what w Usually call "ncr-
NAL business. Having advanced
has far, shall we Immediately con-
TRUE into or ut prosperity pciiod
or shall we 90 in,o another period Of
depression and pocr business as some
p, adict?
III yoa will only remember the
five years preceding 1921 and recall
what an enormous orgy Of expansion
existed, you can sec Tor yourself that
1t will toke some time 30 get proper
foundation for really good business.
We danced during those years, and
now we must pay the fiddler" his
complete bill Business has really
been like a conyalescing patient.
Everything viii go well with the pa
tent if he does not try to get out of
bed too soon If he tries to overdo
he will have a relapse. we now have
pas. I'd the most painful part of the
readiustmcnt. The crisis is over, but
n process # cost reduction and re-
balancing is necessary"
Price Sproad is Wide
To-day wide disparity exists be-
wcen prices Of different commodities,
and particularly the spread between
producers' and consumers goods.
This is a break on trade. One half
of the people cannot earn enough to
buy. tha goods that the other half
has to sell. There are one hundred
and six million people in the u. S.
and fifty per cent o. them get their
living from producing CT distribut-
ing raw materials. 1t has thus far
been impossible to reduce the prices
of finished consumers goods to meet
TIE cuts on these raw materials. The
purchacing power Of these people is
out of its natural proportion.
1T IS rot entirely matter of re-
ducing wages, ialtho labor costs are
large factor, nor l. It entirely q
ma .er Of inefficient management.
No, the problem Of high costs is not a
problem Of any one clement; and re-
adjustment can come in orly one
way-drastic competition All this
will take further time.
Does this mean that there will be
10 opportunities in 1928? Not a Bit
There viii be jua as many chances
10 make money as in any year you
ever lived. II will be possible for you
to make as much during the next
twelve months as in my year Of your
business life, but it will rot be along
the lines which made money in 1919
and 1920, nor in airy other boom year.
TIE profits in 1923 will come by Civ
inc attention to details, by stopping
TIE littlc leaks by saving here and
thee thru new labor-saving inven-
ticns, and mos: OF all, by devising
new AMI more economical means Of
distributing goods. This was not at
all the situation during the business
boom. Then the man who stopped
to prevent small leaks found himself
caught by the tremendous rise in
prices and changes in general condi-
tens.
Those days have passed. They
were wild and merry while they last
Cd. Now business has come back to
cacth. In most industries, an excess
sivo producing capacity was created
During the boom, overhead costs
w.ro increased to Keep up with an
abnormal turnover. Today the amount
Of business has dropped back more
nearly to normal but costs have not
been proportionately reduced. Higher
wages, higher rents, more expensive
sa'ss organization in fact, nearly
every item of expense is cut of por-
portion with the amount of business
done.
"Instead Of wild gyrations in the
commodity markets, the average