The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1923-01-25

trate, if you stretch a spring GER
tain amount you can forecast approx
mately what shall be the rebound.
But you can't so easily foretell how
far the spring will be stretched the
next time. Hence, periods of pros
perity or action are far more diff
cult to forecast than periods of de-
preston or reaction.
However, we know that there is a
general tendency toward equality. In
other words, in the long run, periods
of prosperity tend to be about equal.
They vary greatly in duration, and
they vary greatly in intensity. But
the intense periods are usually short,
and the mill periods are usually long
so that the area or mass is remark
ably constant. Tho the form of the
next period Of prosperity is still UNI
determined, we know in advance with
reasonable assurance that its area or
mass will be approximately that of
previous periods. Shortly it has
begun to develop there may be clue
to its probable form, whether intense
and brief, or moderate and prolonged.
Besides this principle of action and
reaction, there is another feature of |
the business cycle that can safely be |
applied in practical ways. Every
business and every locality has it's !
own particular place in the cycle. The |
bond market, for example, is usually
far in the lead, declining or advanc-
ing before other, factors show any
change of trend. The stock market
also has a pronounced lead. Tho not
80 prompt as the security markets,
is somewhat in the van as
compared with other lines of bust
less activity. Near the other ex- |,
RENE is retail trade, which is q lag
'ard both on the up-swings and down.
wings. Comparing different sections
+ the country, the manufacturing
enters tend to lead, and the regions
I production Of raw materials tend
o lag. Comparing the physical GUAM
lty OF business with its dollar value.
uantity advances or declines before
alue. In a store, the number Of
ales' slips physical quantity tends
decline before the cash register
eadlngs (amount Of sales in dollars. | /
constructive industry, the num-
er OF permits tends to decline before 4
leir value in dollars. 4
But the thing Of real Importance 4
not merely to know this sequence
ilich is fairly simple proposition
1t also to know how fast the period :
depression or over-expansion il Z
eng run off. For example. early Z
1920 the stock market turned down :
I'd the retailer who noticed this re- .
srsal and attempted to estimate =
hen the lightning would strike his :
vn business would have been at = =
IS to set the date. But presently =
hen general business sank below mar !
10 began to sweep out an area of }.
preston, then the retailer was able \,
forecast. Knowing how much de- =
esslon was due and how fast s. :
as being worked off, and knowing :
so his relative position in the cycle. =
e retailer could estimate very close =
when his turn was coming. =
10 illustrate the real mening Of :
e business cycle, one Of the best
aiogles is to compare it with cleo =
lclty. Call prosperity electric :
wer ana suppose that you are en- =
led to 10000 kilowatt hours. r. =
U run your outfit at 10 kilowatts
'ou last 1000 hours. If at 1000 !.
owatts, you last only 10 hours. Or :