Evening star., 1925-07-04
BABSON SEES PERIOD OF REAL
BUSINESS IMPROVEMENT AHEAD
Fe,Cer Failures NOted-BuiIding Tery ActiUe-FOr-
eign Trade Sho,Os Cains-Freight Traffic
Near to Best Records

Check transactions for May amount
ed to $40 ia 600, 900, II per cent ahead
of the figure for May. 1924. Returns
for three weeks in June indicate even
larger increase. Failures show con-
siderable improvement, for the liabili-
ties of firms falling in May were but
IL per cent of May a year ago, while
the number of firms failing has not
declined as much. but is now per
cent below last years rate.
Building is unusually active, as evi-
denced by contracts awarded and per-
mits. May 1925, operations in 20
leading cities were $207 ,295 900. while
in May, 1924, the value of permits
totaled but s1S5,436 900. Cement pro-
duction was 15,503, 900 barrels. an in
crease of 80 per cent
Recent foreign trade statistics show
Improvement, with exports in MAY
1870, 900, 900, 10 per cent larger than
last year, while imports gained per
cent to 1928, 1000. Car loadings are
running close to 1,000,000 a week. in
spite of lighter coal shipments. while
merchandise in less than carload lots
is considerably above all previous rec
ords. Freight car surpIuses continue
heavy, although there has been a
gradual decrease since April. On
June 1 there was a surplus of 324 900
cars. compared with 345, 900 cars on
April l.
Bank Deposits Grow.
The controller reports that bank
loans have increased $548. 900 900 and
deposits S1,291 ,000, 900 since last year.
Statistics on money rates show COM
mercial paper less than per cent,
about the same as a year ago. Retail
trade is showing a gain over last
year. April, the most recent month
reported, was the largest on record
Production in many lines is high
404,300 automobiles and trucks were
produced in May, compared with
421,800 in April and 100000 in May a
year ago; 0,492, 900 gallons of gaso-
line were produced in April, an in
crease of 106, 100000 gallons above
April, 1924.
An increase of IS per cent in new
corporations formed during May COM
pared with May year ago would
seem to indicate optimism regarding
the outlook. And one of the most en-.
couraging conditions is that the pur-
chasing power of the American farmer
has increased about 10 per cent over
last year.
Reason for Poor Profits.
In view of the above figures, it is
evident tnat statistics bear out the
statements previously made. Our only
difficulty today is that our manufac-
turing capacity is too large for pres
ent demands. AS the manufacturer
makes his real profit on the last rs
per cent capacity, profits are now not
very good. The same general prin-
ciple applies to the retailer.
The total consumption of goods is
excellent at the present time, and the
per capita purchases of all articles is
probably greater today than ever be-
fore. The difficulty comes from the
fact that the margin of profits is
smaller, and that these profits must
be divided among a great many more
retailers than heretofore
If we would just stop for a while
building factories and small stores.
this situation would quickly right it.
self and every one would be better
off In the meantime, the Babson
chart still continues around the nor
NAL line, and at the moment is l per
cent above normal.
Copyright. 1925)