Evening star., 1923-12-29
BY ROGER w. BABsON.

special Dispatch to The Star. ~
WELLESLEY HILLS, Mass. Decem-
ber "a year ago business was still
improving rapidly. Nearly everybody
tVrned to, the new calendar optimis-
ttcaliy. The boom which started in
tBes early fall of 1922 was well under
way and carried on to March of 1923.
Then it collapsed! Business fell Off
during the summer. and this past fall
tailed to come up to the expectations
oftthose who locked for a continua-
tion of the upswing. As a result. the
business world is facing 1924 with a
confused mind. 1t is safe to say that
the majority of business men today
are hoping for boom year, but if
they are strictly honest with them
selves they must admit that they are
not very confident of seeing these
hopes realized. ia.
Many prominent men in industry
have prophesied great prosperity. At
the same time the numerous blocs
represented in the new Congress are
evidence that certain sections of the
country, at least. are not satisfied with
things as they are. Many business
men, If asked if they are making
money, will shake their heads in a
disturbed way. Europe is still sick
and we cannot expect to proceed re-
gardless of conditions across the At
lantic.
Calls Elections Harmless.
Then there is the psychology of the
presidential year. Does it mean bet
ter business or worse business? Some
people contend that things are always
unsettled previous to a national cleo
ton. Others point to the fact that the
administration will do all that 1t pos
sibly can to help between now and
next November.
1t has been proven statistically. to
my satisfaction at least. that cleo
ticns have very little effect on busi-
ness one way or another, provided
both sides nominate good candidates.
The evidence shows rather that busi-
~ness has a decided effect upon the
elections. Whenever we have chosen
a President during period of bust
ness suppression we have usually
changed parties. If the election has
fallen during period of business
prosperity we have usually kept the
previous administration in office. This
time neither condition really exists.
We are in period between these two
extremes.
Three Kinds of Business.
1t seems to me that the things to
watch are in an entirely different d.
rection. sr.--
Business activity may be divided
into three zones or BELTS. % An
upper zone, such as we were in dur
ing the war and postwar periods.
when everybody is optimistic, excited
and extravaganza. (2) A lower zone,
when the reverse is true. when many
are discouraged, and when read
justment such as we had in 1921 and
1922 is taking place. CD A middle
zone, when conditions vary from only
fair to what, is called quite satisfac-
tory business. This third zone is
what we have been traversing for
the latter part of 1928 and is the, one
in which we are today. 1t is these
periods between abnormal prosperity
and depression, when things are
neither very bad nor extremely ac
tive, that are healthiest for the busi-
ness world.
Excessive prosperity, like very hot
weather, saps our vitality, -inHates
our currency. and drives prices out
of all proportions to true values.
Such a period encourages speculation
rather than honest effort and upsets
our sense of value and the true pro-
portion of things. Again, the newt
able and ensuing period of depression
is heart-breaking. Tt discourages
men and wrecks businesses that have
been a lifetime in the building. It's
costs are written not only in dol
lars but in hunger, in want. and in
human suffering. In business. as in
weather, moderate conditions are.
healthiest.
Continual BOOms Impossible
Unfortunately, however, a large
proportion of American business men
are happy only during period of
boom. They are like the Individual
who can be comfortable only when
1T is so degrees in the shade. Most.
of the time they are unhappy. 1t
stands to reason that these business