The Washington times., 1924-07-15
Ne v BUSINESS
INDICATORS
DESIGNED
Cleveland Banker Claims IN.
yention viii ReyoIutionlzs
Business Forecasts
BY WILLIAM j. HUSKE.
international News Services.

CLEVELAND. Ohio. July 1S.A
new business indicator, designed 70
measure and forecast the rise ana
fall Of the tides Of trade, with the
precision Of the finest Of the finest
mechanicaI mechanism, has been de-
signed and is now being used BY
Colonel Leonard p. Ayres, vice presi-
dent Of the Cleveland Trust Com
pany, It was announced here today.
The index. because u it's Sim
plicity and already tested efficiency
will have q revolutionary effect IN
the field OF business prophesy. its
inventor believes.
Predictions.
It's present indications show that
business IL still in the downward
swing Of the business cycle, but
that recovery should begin late this
TALL and normal trade conditions be
restored by July. 1925. It is further
revealed that the stock market a.
now in the midst Of g. technical
bull movement"
Long standing beliefs in finance
and business may be overturned by
differences drawn from the new
trade barometer. which is based
upon the record Of production o4
pig iron furnaces. One OF these be-
liefs, the bank states, pertains to
the controlling factor In the course
Of the rise and fall OF stocks.
1T now appears, q statement
issued by the bank says. that
stock prices as well as bond prices
are determined by current interest
rates and not by the discounting OF
future business prospects, long re-
garded as the determining factor OF
stock market movements. When
industry falls below normal, interest
rates decline and bond prices Rise
and 30 do stock prices.
Bull Market.
I'm recent months this principle
has operated with striking accuracy.
The clear indication Of the index Ii
that we are now in q technical bun
market for industrial stocks, as We
surely are for rail stocks and good
bonds. This does not mean that We
may not have new low dip for
industrial stocks, and especially for
those that are speculative In charac.
Ter.
There is nothing mysterious
about the main causes Of the
present decline in general business.
It has come because of the great
shortage In building construction.
railroad equipment automobiles and
machinery for public utilities that
had accumulated during the war
and post war years, has largely
been made up by the Industrial &c
ttvity OF 1922 and 1923. Since the
powerful stimulus caused by these
great demands has been removed,
business had slowed down.
Normal in 1925.
Politics. the bonus, taxation. the
weather and other conditions abroad
had little to do with the current de-
cline.
We have enormous and unbalanc.
ed industrial equipment, override
veloped mine resources, poor foreign
trade, hampered by tariff restric-
tons and serious inequalities be.
tween the prices OF Industrial goods
and those Of agricultural products.
Now that half of 1924 has pas
sed, 1t seems probable that tbs
year win be recorded in the main
as one Of slow business and re-
adjustment. with little prospect that
the lowest point OF the depression
win be reached before cold weather
and some likelihood that business
win get back to normal before wen
into 1926.
Contrary to common opinion
stocks Of many important lines of
manufactured commodities are now
large and still increasing"