Perth Amboy evening news., 1923-12-28

war years, carrying us 10 q peak at
the beginning of 1920. Because of
the Inevitable operation OF the law
of Action and Rea9tion in business
we then suffered the most precipi-
tous decline in business history. 1921
and the first half of 1922 are black
in the business mans memory and
are red on his books. In the mid
die of 1922 improvement set in and
with the help OF propaganda 1t DER
shot itself in the spring of 1923.
Then we settled down to fairly good
business and may expect to continue
somewhat along this line during the
coming year.
IAN important thing to remember
however, is that a study of the law
of action and reaction suggests that
Area G below the average line on the
attached diagram, should eventually
equal the big boom Area + above
this line. More than half of this
readjustment period has already
elapsed. How fast the remainder
will develop remains to be seen.
ness into abnormal prosperity are
therefore working against the fun
damentals.
"a bd2AAAt92 . AllOOL VI LAAS
time below the average line during
the coming months? This really
doesn't matter. So long as we keep
within a few points. one way or the
other, from our ky line of average
growth, we can progress steadily and
make money without fear of the
extreme fiuctuation and mal-adjust-
ment Characteristic of high booms
and deem denrpssions
Whit the Barometers Show
"Those who are exceedingly opti-
mistic for the next twelve months
would call your attention to car
loadings which for 1928 ran ten per
cent over the highest year in history.
This, they say, indicates great manu-
featuring activity. Building permits
during the last year have run thirty
two per cent above 1922, which set
the previous high point Bank de-
posts are large, and money is plen-
tiful. The oil situation is improving
and the motor industry, they say,
looks good. To this, L answer YES
and the mail order and chain-store
business is improving and the crop
situation is good, excepting cotton
and there we have a thirty TO forty
tent staple!
against these optimistic signs we
find many of basic industries
suffering from excess factory capa-
city. Volume has held up, but
profits have dwindled and many
large manufacturers are trying to
readjust costs so that they can con-
tinue to operate without a great loss.
Foreign competition is becoming an
increasing menace. The tariff wall
helps, to be sure, but it is of tenn
porary nature and when the water
has risen behind the dam to a GER
tain point it begins to run over the
top.
Some are already feeling this for
eign competition. Others will prob
ably have to take 1t into account be-
fore the year is out. There is a
peculiar thing about the foreign
situation. IL matters get worse over
there we shall share in the stock
which will go around the world. on
the other hand, when things clear
up over there, win not that be the
signal for a rush Of exports to this
country Either way we look at 1t,
it is a problem.
distribution costs, in the mean
time, are increasing rapidly. In
creased production spelfs lower cost
10 make, but higher cost to sell. In
trying to keep all Of our factories
busy all the time, we have deveIoned
a very effective sales organization
but the fact of the matter is fbat
the number of things which the
public is asked to buy has increased
more rapidly than our national pur-
chasing power. The automobile
the radio, and a score of others OF
the newer necessities and ~lux1ries
nave come In to take a part Of the
money which heretofore was spent
tor other things. Competition for
the consumers dollar has grown ex-
ceedingly keen and has caused dis
%tribution costs to ihcrease
ably.
FINALLY, we are still SUFFERING
from a serious ma1-adjustment be-
tween the prices of various eroups
OF commodities. The price the farm
er gets for his product Is in most
cases low. The price that he Is asked
10 pay for the things he mugt pur-
chase, however, have seen no such
reduction 1t is obvious that we
can't have healthy trade when the
farmer can get $1,000 for his crop
but is asked to pay $4,000 for What
he wants to buy. VIZ
In this connection 1t is also nee
essary to remember that the farmer
is an original producer. The dollar
that works through our commerciai
machinery starts with him and VIC
cannot have any degree Of business
boom unless the farmer is in the.
market and is buying freely. Has il
occurred to you that the rea
Part of the activity or the past year
has been in the distribution of oui
goods? Traffic has been heavy. The
wheels are going around busy In
carrying the goods from place tc
Place, but raw materials, like wheat
and copper, have been practically q
drug on the market. There has not
been a fair living for the or!g.na
producers OF the great staples of our
country. Mind you. we do not need
high prices for a brisk increase II
trade. All we need is a fair adjust
ment between prices.
THE coming year, like 1923. will
be spotty. Some industries will dc
very well, others will prove a dis
appointment. Last year the build
Ing industry was n of the leaders
/ see no aso for much activity in
factory construction. On the Other
hand, residential building will con
tinve, although ! shall be surprised
IL 1t goes on at the 1923 rate. The
automobile industry was very active