Connecticut western news., 1922-08-03
BABSON EXPECTS
 HIGHER PRICES Industrial Stocks Should Benefit-General Business 11% Below Normal

When interviewing Roger w.
 Babson regarding the railroad and
 coal strikes, MT. Babson did not seem surprised with recent develop
 ments. He believes that things are
 working out in a natural way and all
 interests are doing the best they can with a bad situation. What seems to interest MT. Babson most is the possible effect on prices in general following the strike settle ments. Discussing this possibility he says:
 "The strikes while in progress naturally put a general damper on business. They have a disheartening effect on producers, jobbers, and retailers. Wage workers have less to spend and manufacturers are less interested in pushing their business. All of this tends to hold up trade in general. Yet during this period of strikes, people are living, eating, and dressing just as if no strikes existed. Houses are deteriorating, young folks are getting married, children are being born, clothes are 
 general is being consumed. If de- terioration and consumption were suspended during the depression of labor strikes, then strikes might be good for the country at times. Un- fortunately, however, the deteriora- ton and consumption goes on even tho retail purchases decline.
 "This means that after strikes are settled there is a general rush to buy. The wage workers when re- turning to work again feel prosper ous. They and. their families rush to the stores and purchase goods. The group of industries which have been involved in the strike immedi- ately receive an avalanche of orders. They in turn feel prosperous and order new machinery and quantities of supplies. This sudden increase in business from both wage workers and employers is quickly felt by the jobbers who in turn pour in orders upon the manufacturers.
 "The immediate effect of this is to cause a temporary scarcity of goods which in many instances re- suits in the raising of prices. There fore, I should not be surprised to see an increase in the wholesale prices of many products this fall. In some sections of the country there will be a distinct shortage in some lines of goods. Merchants, are justified in stocking up now for fall and winter trade. Those who have contracts to fill should see that these contracts are we'll covered. When business is so dull, as it is at present, it is hard to believe that few months can see radical change in the situation. Such is possible, altho price increase may be more or less of a temporary nG- ture. I say temporary because after the next spurt in commodity prices, there will probably be another break which will make the general price level even lower than it is at present After this next upward the general trend of prices may be downward for some years to come.
 "Some of the basic commodities 1le already showing an upward ten dency. Sugar, for example, which h1s been such a drug on the market during the past two years, has al :eady jerIn to strea. then, and peo- ole are well justifel in again buying ,rcar by the barrel. Tinseed oil is ;rner. The demand 1as greatly inn o:oved and the outlook is very much brighter. I predict further advances f>r nnseed and should not be sur orised to see raw linseed oil sell for
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