Evening journal. [volume] (Wilmington, Del.) 1888-1932, 1922-11-11
SEES RETURN
Of PROSPERITY
fcont,nued from Page One


questioned whether there was such a
thing as perodicity in business. and
whether It could be scientifically as
certained. Professor Bullock, he
said, would answer the question.
Business conditions do vary. be-
gan Professor Bullock. and every
decade has its reoccurring good. bad
and Indifferent years. The main
problem. therefore. was to accurate
ly chart these changes. He then
told of the formation Of an index
( evolved from a careful survey OF
I business conditions in the years from
( 1903 to 1918. which showed II was
/ possible TO gauge business conol-
tons in advance.
Then the World War turned the
index upside down and inside out
( he added
In 1919 the index was revived ana
greatly to the surprise ofthose VINO
were watching It, its curves and lines
began TO assume the same general
aspect as during the period covered
before the war. THE method would
have worked 100 per cent. before
the war, which turned it upside
down. and it worked 100 per cent.
after the war" he declared.
Professor Bullock next described
the methods employed in formulat-
ing the index This started with the
familiar fact that any phenomenon
Is due TO a variety Of contributory
factors. When these factors are
Isolated and measured as 20 rela-
tive strength and intensity, the ex-
act underlying causes can be ascer-
tanned.
Taking pig iron production as an
example, Professor Bullock illus
trated on a large blackboard the
method of recording observations
by means OF variable lines. Against
these variable lines he showed the
seasonal movements. Then, by sub
tracing the seasonal from the vari-
able. the exact situation was more
nearly obtained. Next he showed
how the growth" element was
eliminated.
When all usual statistics covering
a period of years were examined It
appeared, said Professor Bullock.
that the charts exhibited certain
similar cyclical moveln rents. These
formed a basis for figuring tenden-
cies and made possible something
like exact predictions. Mathematics
and history had been found TO agree
and the Harvard economic service
was established to compute business
conditions scientifically.
Further observation showed diff
ferences in the times at which trade
occurred. Comparisons
OF these, however. showed certain
temporal relations" Here intruded
the speculative element, volume OF
business and, finally. banking or
money conditions. These factors he
abbreviated as business, specula-
ton and money"
Professor Bullock told how the
Economic Service in the Fail Of
1919. had predicted a slump in bust
ness in the spring Of 1920, and was
Laughed att for so doing. The pre-
AENEAA VLUk6u GVA EEAs
Similarly, he showed how the eoono-
mist knew, in the spring of 1921.
that business was "convalescing"
and would later be on the complete
road to recovery.
Business started definitely inward
1t the beginning Of this year. he
continued, in spite OF strik IS and
European troubles About ten days
ago the Service Board, basing its
estimate entirely on statistics and
gnoring all other information and
,essinnistlo reports. agreed that
prosperity had returned, and whole
sale prices would advance until the
opening months OF 1928.
.4This forecast" said Professor
Bullock. was one on which some
II our friends have said we were
going to be shipwrecked; neverthe-
ess, we are so confident Of its cor
.ectness that we are not losing any
deep over IT,"
Besides the business cycle, the
business man needs 70 know about
he 'Iong run trend" BY this Pro-
essor Bullock referred to periods
uch as from 1893 to 1895, when
,rioes continually lowered. England
low is undergoing such a declining
rend, that she IS labor!ns
.gainst a serious natural tendency.
n 1896 prices definitely began an
inward trend, and fooled many of
ne most astute men IN business"
Who felt certain there would be an
ther bump"
In conclusion. Professor Bullock
Illustrated the Long run trend" in
anhng and investments. Declines
n prices increase value of interest
eturns and conversely. he declared.
Looking forward as a business
IAN or manufacturer, Professor Bull
ock traced the business trend from
914 upward to 1915. then occurred
drop back TO the middle OF 1921.
ince when the general movement
az been steadily upward.
When the present cyclical move
nent ends and prices do go down
gain. probably in 1924 or 1928. II
vii not necessarily mean that the
United States Is headed back to 1913
eclared the speaker. When that
lme is reached an estimate must
e based upon the worlds trade at
lrge. If such a decline should oc-
ur conditions will depend not alone
n gold production, but on volume
f currency due to defation of
alues. The best guess" however
e added, was that such defiation
ould not go forward much further
ecause taxpayers would refuse TO
AIRY the tax burdens, even though
he financiers of Europe might so
esire defiation. He expressed doubt