Imperial Valley press., 1923-01-22

and reaction, there Is another fea.
ture Of the business cycle that can
safely be applied in practical ways.
Every business and every locality
has its own particular place in the
cycle. The bond market, for ex-
ample, is usually far in the lead, de.
clining or advancing before other
factors show change of trend
The stock market also has pro-
nounced lead. Though not so prompt
as the security markets, building is
somewhat in the van as compared
with other lines of business activity.
Near the other extreme Is retail
trade, which is a laggard both on
the up-swings and the down-swings.
Comparing different sections of the
country, the manufacturing eenters
tend to lead, and the regions of pro-
duetion Of raw materials tend to
lag. Comparing the physical quaint.
ty Of business with its dollar value,
quantity advances or declines before
value. In q store, the number of
sales slips physical quantity)
tends to decline before the cash reg
lister readings (amount Of sales in
dollaTs.) In q construction industry,
the number of permits tends to de-
cline before their value in dollars
: t'But the thing of real importance
is not merely to know this sequence
which is q. fairly. simple PROPOSE
tion-but also to know how fast the
period Of depression or over-expan7
sion, is being run off. For. example,
early IN 1920 the stock market turn.
ca down. The retailer who noticed
this reversal and attempted to esti-
mate when the lightning - would
strike. his own business would have
been at a loss to set the date. But
presently when general business
sank below. par and began TO sweep
out an area Of depression, then the
retailer was able to forecast. Know
ing how much depression was due
and how fast it was being worked
cff, and knowing also his relative
position in the cycle, the retailer
could estimate very closely when his
turn was coming.
/ Electricity Example
"To illustrate the real meaning of
the business cyc.e, one of the best
naogics IS 10 compare { w IL c!,3
tric ". all pr1soc iv e'en.r
power and suppose that you are on
titled to 10000 kilowatt hours. If
you run your outfit at 10 kilowatts
you last 1000 hours. If at 1000 Kill
0watts, you last only 10 hours. Or
You can compromise at 100 kilowatts
and last 100 hours. The word bus.
mess cycle is really not the word
to use. Cycle implies time. 1t il
area or mass which is the important
measurement. There is no real need
Of either over,eXpausion or depres.
sion. We could run along at a
steady trend indefinitely, with
cycles practically eliminated. The
principle Of action and reaction is
absolutely sound, but the popular
conception of the cycle is both nm
~ nd and dangerous.
"To be concrete--busiess is now
statistically at normal. BY the so.
called business cycle we are at a
bad center. The Babsonehart shows
this very clearly. But this is no
reason why We must stay there OF
why the next movement will not be
for the better or for the worse. 1t
all depends upon how we act,--act
toward one another and act toward
the rest of the world. When Greed
is enthroned we are headed for de-
pression-when Service is in the
saddle we are headed for Prosperity.
Ii there was less talk about bus
mess cycles and more about 'busi-
ness ethics it would be better for
a'l Of MS