The Washington times., 1924-09-04
BUS|NESSSEERS
HAVE VARIETY
Of SYSTEMS
Seven Forecasting Services
Supported by 10000
Business Men
By MERRYLE 5. RUKEYsER.


NEW YORK, Sept. 4.-Business
forecasting still in a primitive, ex-
perimental state, has not attained
the dignity OF precise science.
At present there is a vogue for
1orecastlng service in the business
world. AT least 10000 hardheaded
business men pay no less than 500
year Tor one of seven types of
business forecasting service now in
active use.
Perhaps the most widely known
oI the forecasting services, though
NOT necessarily the best, is that of
tne baoson Statistical Organiza.
%on' OF Wellesley Hills, Mass.
Hoeer Babson, the inventor of the
system uses as q fundamental as.
sumption law borrowed from,
physics, that action and reaction
are equal. Hence, he concentrates
ms efforts on, determining the du.
ration and extent of period of
expansion and prosperity in bust.
ness In order to determine the char.
acterlstics of the period of depres-
sion which follows. He has de
Veloped a barometer based on this
assumption, plotting each area of
expansion and assuming that this
area Will equal that of the subse.
ouent depression after allowing for
normal margin of growth which
rs measured separately and which
Is known In academic articles aa
the secular trend"
Predicts SIumps.
The soothsayer of Wellesley HrIa
does not attempt to forecast the
length and intensity of a period of
expansion, but restricts himself to
nredlction OF slumps in business.
ne assumes that security values
reach their high and low points in
the tirst part of the areas of ex
panslon and construction.
Baoson. 1t seems, does not mako
ms prediction so much upon the
OASIS or the sequence of economic
events as upon the assumption that
reaction approximately equals ex.
panslon when exactly measured.
The BrOokmire Economic Service
published in New York city. has q
VIDE appeal among SPECTATORS
many or whom are impressed with
It's value. It's forecasting is based
on the premise that stock and com.
modify prices turn after a change
in the trend Of a number of bust
ness factors which 1t plots as a
composite line. On it's guard against
minor and irrelevant fluctuations,
1t provides that the turn Of the
graph must proceed a certain dis
lance before it is plotted as a major
change in the business cycle. Brook.
mire assumes that a change takes
place in the stock prices one month
after the change in the business
barometer. and in commodity prices.
SIX to seven months thereafter.
Therefore. should the system prove
correct. In practice it gives the
business man and security trader
sufficient time in which to pre-
pare for the changes forecast.
Harvard Service.
A third significant barometer oF
business of very great academic
importance and Of some practical
business value is that of the Har.
ward Economic Service which ad.
heres to the theory of the business
cycle and seeks to determine when
a change in the cycle will occur
through a study Of speculation. bust.
ness activity, and bank and money
conditions. In accordance with
changes in these factors, predictions
are made as to when we enter a
period of depression which is fol-
lowed by periods of revival, business
prosperity, financial strain, and
LIQUIDATION of securities, industrial
crisis. and finally liquidation of
commodities.
The Standard Statistics Company,
Inc. of New York. publishes the
Standard Daily Trade Service. in
which the supply of money is con.