The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1924-12-21
Men And
Markets
RI y r. n
By P. F. B.

The rule-o-thumb economists are
shaking heads about the automobile
industry. First they class 1t as a lux
ury line, and as such it is supposed
to be unstable and to be seriously al
fected by slight changes in the business
weather. But 1t doesn't seem to fulfill
these expectations. In good times the
automobile business booms and in poor
times 1t holds up very well. Year in
and year out 1t has Jared much bet
ter than many of our industries con-
cerned with the necessities of life. And
now one of the leading producers of
motor vehicles announces that sales
for the last quarter Of 1924 will be
so per cent ahead of last year and that
profits for this same quarter will be
double those of any previous last quar-
ter. Upon the first signs Of business
Improvement the automobile industry Is
again jumping the gun and already
shows increased profits while many
of the so-called necessity lines are
Just beginning to feel increased activ-
ity. Apparently there is no justice.
There is a reason, however, and 1t
may be summed up in the single word
"bargain!" We are all alike when 1t
comes to spending our money. We have
certain fixed ideas on values and we
will spend 1000 quicker, IL we think
we are getting our moneys worth, than
81 IL we have the impression that
we are not getting good value. These
ideas of value come down to US from
our past experience and much OF the
sales resistance being encountered In
selling at this time is due to the fact
that we still cling to our pre-war con-
ception of what a certain suit of clothes
should be worth instead Of adjusting
our viewpoint to the new conditions.
Several celebrities have commented on
the fact that what the country needs
Is a good five cent cigar. The state
ment is not exactly correct. We nave
the good five cent cigar but 1t costs
Is cents. What we really want Is the
five cent cigar for five cents.
Going back to the beginning of our
present ideas of value we find our
selves in pre-war days. A good house
could be bought for $4,000, a good au-
tomobile cost almost as much. Today
the same sort Of house can be had Tor
$4,000 and a better automobile can
be purchased for $500. The house
may be worth every cent OF its pres
emit price, 1t may even be cheap at
the figure, but our old sense OF values
tells us that 1t Is still $4,000 house
and that 1t is much over priced. On
sense of values suggests that the new
automobile with its disc wheels and
balloon tires and other modern i'm
provements should be worth at least
So, 500, When the salesman assures us
that it costs but 1,495 fully equipped.
and that he will arrange terms II 1t
isn't convenient to pay cash, our busi-
ness judgment will not let US turn
him down. 1t is such tremendous
htIU
we do.
Several minor conditions are also
contributing to the immediate revival
in the motor industry. A surplus or
money not needed in business tends
to accumulate in bank accounts and
in spite Of our better judgments many
Of us have difficulty in keeping cash
on hand. II we were relatively hard
up and had no cash surplus the motor
salesman would have trouble in sell
ing US the new model. We would tell
him we couldn't spare the money. But,
when It Is right there in the bank and
he comes around with the greatest
bargain ever offered in motor car value
we buy it.
In spite of the fact automobiles are
luxuries Tor most of us and in spite
OF the fact that they require iaFse
initial expense and a continuous up
keep, the motor industry will prosper,
in season and out, SO long as 1t Is
able to deliver more cars for the dol
lar than our previous experience has
led us to expect. The American peo-
Pile cannot resist the genuine bargain!
The 1924 harvest is valued at $9,479,-
e022, 900 by the official estimate of the
department of agriculture. This Is $780,
10000 greater than last year and is ST.
663, 0O0, 900 ahead of the total value OF
1922. About two-thirds of this value Is