Evening star., 1924-10-12
BABSON SAYS MEN .
MAKE REAL VALUES
Late Head of United Fruit
Fine Example of Human
Factor in Investments.
BY ROGER w. BABsoN.

Itestoh. president OF the United
Fruit Company. has again brought
up the much discussed question of the
"man element in investment values.
Ihe business world has lost another
leader. |. for one. believe that the
investment world is poorer. in spite
OF the fact that book assets remain
the same
The business of the. United Fruit
company with all proba bility will
continue to go on successfully. We
should however. consider the possible
erect of the death of its president in
the light of previous financial history
Ihe company has suffered a severe
loss, loss impossible to estimate at
tnls time. Mr.. Preston not only knew
the fruit business thorough V but had
the confidence of both employees and
stockholders. He was a real captain
OF industry. a man of great vision,
power and Judgment. Although the
company may continue to increase
Its fruit business and its stock may
Yet sell at record high figures il wou'd d
De surprising, indeed if il does not u'ti-
nateiy suffer marketwise from Mr. Pres
tons death.
Personality Great Factor.
vessel is always a vessel, and a
crew is always a crew. but the profits
large extent upon the skill and abil-
iyt of the captain in charge. Wage
workers and stockholders are entitled
to their fair share of the profits of
every business, but in the last ANALYSIS
II must be admitted that these profits
are largely due to the character.
judgment. vision and energy of some
one Individual
In discussing the possible effect of
r. fTeStONS e.
ana investment experts have recall
the enect of similar previous losses.
Ihey nave cited the fact that the
Great Northern and Northern Pacific
reached their iGhest point under the
personal management of James J.
Hlll and that since his death a de-
cline In the prices of these stocks
mas been almost continuous. They
have reminisced concerning Herri-
man and what happened to the mar
ket price of Union Pacific and other
Hartman stocks after his death.
Values Depend on Men.
other instances in our business and
financial history substantiate the gen.
eral rule that Industrial securities
reached their peak previous to the
death or retirement of the founder r
of the company. These men still have
confidence in the United Fruit Com
pany, knowing that it is sound
business and is well entrenched both
rs TO the production and distribution
OF fruits. Most of them are optimis-
tic on the market as whole and
believe that United Fruit will con-
tihue to go up with the others but
the situation does bring to mind the
fundamental fact that the value of
securities lies not in the real estate
or buildings owned. nor in the tenn
porary earnings of the corporation,
but in the character, Judgment, Wis
Ion and energy of the men in control
Moreover, this fundamental principle
applies to all businesses, large and
small.
Facts Brought Out in Books.
This same idea has been brought
out recently by Edna Ferber in her
book, $50 Big In her Aug Hempel'
she draws a picture of the founder of
the packing industry as 1t exists to-
day in America. 1t shows how that
great industry reached it's peak be-
fore his death and that no son or
relative has since been able to put
into 1t the vision and energy that
this founder possessed. Quite by CO.
Incidence you can get a detailed pic
ture Of this same Aug Hempel" in
George Horace Lorimer's book, Let
tors of Self-made Merchant to His
Son." The present editor of the Sat
urday Evening Post was once his
private secretary.
We see this principle again as it
works itself out in community
American development is not depend
ent upon national resources, loca-
tion nor inherent wealth. Every city
worth while today owes it's growth
to some one or more men of char
acter, vision and courage who threw
their energy into the building up of
a town
Way to Keep Cities Growing.
The great danger threatening most
Of our cities today is that after the
community has secured a certain
momentum of growth it is apt to
think that it can run along without
further leadership. This is a great
mistake, and the best thing that
chamber OF commerce can do is to
clearly recognize this fact. The men
who are giving their lives to the
building up of your city should be
helped and encouraged
Business is still dull. / have Just
returned from a trip to. some of the
leading cities in the eastern section
OF the United States and of Canada
The bankers, manufacturers and mer-
chants with whom 1 talked seemed
puzzled. They say that there is no
surplus Of goods on the shelves of the
merchants, that the corporations are
not overexpanded financially, and
that Fundamentally things are in
pretty good shape The most COM
mon expression 1 heard was that
business seems to lack pep" or seems
to be drifting" The actual situation
is pictured on the Babson chart. which
continues to show general activity at
per cent below normal
wonder If 1t is possible that our
business men, owing to burdensome
taxation, government interference or
some other cause apparently beyond
their control, are losing interest in
their business? If this is true it pre-
sents an exceptionally serious prob
lem, a problem more vital than that
OF business depression or even a busi-
ness panic. If statistics teach any
thing, they teach that men make val 4,
ues-aRd that souls make men. i.
Certain political leaders are preach.
ing today that there should be a re-
division of things. Perhaps there
should be if such a redivision could
come about in a natural way; but in
attempting to, divide things up. we
must be very careful that we do not
sever the artery upon which business
depends for its very life. 1t is pos
sible that the uncertainty of the po-
litical situation is a contributing
cause. buttI am convinced that the
country's business men are sorely in
need of courage and confidence to-
day. They need this confidence much
worse than they need any more legis-
lation or new rules.
Would Study Industrial Leaders.
It may be- good drama for certain