Evening star., 1925-01-24
BABSON SEES GAIN
INCOPPER SALES
Expects Utility and Railroad
Companies to Be Heavy
Buyers During Year.
BY ROGER w. BABSoN.


Special Dispatch TO The star
WELLESLEY HILLS, Mass, jan
uary 24.-Higher prices have been
forecast for copper for over two years,
and while there has been some
Strengthening in quotations. the in
crease has been slight. Copper has
suffered long period of depression.
( The dullness has been due to many
& reasons; first, to the tremendous sur
plus that was produced during the
war. Unlike many articles of food
and other semi-perishable goods, this
copper was not destroyed. but was
4 available at the end of the war for
commercial uses. 1t has taken about
q six years to use up this surplus war
] production. The second reason for
the continued low prices has been the
Z opening of great low grade mines In
South America, Africa and other for
4 eign countries.
World Competition Grows.
We have always known that cop
per existed in parts of Africa, and
only the high price and keen demand
caused by a great war was needed to
give investors courage enough to de-
Velop these distant properties. I'm
fortunately for the rest of the copper
4 industry, however, these new devel-
HOpiheHlS became real producers only
after the war was over. Adding war
surplus to new cheap production, it is
quite remarkable that copper prices
Y did not go much lower than they did.
Today the situation is much i'm
proved. The surplus supplies have
I been used up. The market has be-
y 8come adjusted to these new low
grade producers in South America
\ and Africa, while the demand has
fy,Ytp 1I1. IL
eral business as reflected by the
8Babson chart is running at per cent
aabove normal Copper is in a better
position today than 1T has been for
Mseveral years. This Is evidenced not
only by the strengthening in the
price of the metal and the increased
employment in the industry, but by
] the fact that investors are again be-
coming keenly interested in copper
securities. The recent declaration of
dividends by leading producers has
naturally increased this interest
Larger Demand Seems Certain.
The copper industry is inseparably
bound up with the public utilities and
railroads. 1t is inconceivable that
#the public utilities can continue to
8prosper without the copper industry
8prospering with them. The public
utilities, especially the power and
Hight companies, are in better Condi-
Nt1on today than ever before in their
Mhistory. They not only are popular
with investors, but are entitled to
this prosperity, being on the eve OF
most brilliant and spectacular de-
kelopments. 1t is very easy for light
#zknd power companies to secure
money for new developments and i'm
#provements. a portion Of this new
s5bmoney is always spent for copper.
The railroads also have come back
in public favor. This year should
BEE more railroad securities sold than
mas any previous year for nearly
#hecade. AS soon as railroads can af-
Ford to do so, they are bound to spend
p certain amount of money on cleo
Serification. All this should benefit
khe copper industry. In addition to
hese two great factors the general
hemand for copper in connection with
Building and for other industrial pur-
poses is constantly increasing. The
U ow price for copper during the past
Few years has been of itself factor
metal Therefore there is a sound
ba sis for the improved situation.
Changing Conditions in Industry.
Z All this does not mean that the cop
per industry is going to boom again
as it has in times past. Owing to the
Fact that it has been difficult sudden
~ to materially increase or decrease
~ he production of copper the price
has been very erratic. When the de-
slnand has fallen or there has been
surplus the price has fallen to a point
Below production cost; and when
Business doomed there has been a
Shortage of the metal and prices soar
led. This caused CORRESPONDENCE
Broad movements in copper securi-
81 les and fortunes were made or lost
in them. OF course il is possible that
hese old conditions MAY return, but
II is very probable that they will not.
81 The low-cost producers in South
#America. Africa and elsewhere have
completely changed the industry. In
place of a speculative industry il has
how become a stable industry. It is
not as attractive for the speculator,
but it is far more attractive for the
&nvestor. Copper, both in its uses and
#ts production, is fast becoming a
staple. Producers may make only a
mall profit, but they should be rea-
n sonably sure of this profit year in and
rear out. This should take copper
but of the gambling class and the Sc
curities should be considered with the
steel securities or other copper Sc
SrufltleS representing paslc industries.
New Investors Needed.
u One thing more should be remem-
S3osred; investors in copper stocks dur
ing the past generation have been
best acquainted with the lake prop
erties. Many of these properties have
Jared badly in competition with the
newer low-cost producers These, hold
ers of copper stocks have seen their
* capital gradually fade away. AS a
y esult they are sick of copper. On the
principal that the burned child will
dread the fire, they will buy no more
hopper stocks, even the stocks of
n hese new wonderful l0W-CoSt mines
Il This means that a new group Of in
vestors in copper must be born and
Feared This is now going on, but it
will not be many years before a new
Sgroup of copper shareholders are
ready to ack the industry Wise are
@those investors, however, who pur-
#chase securities before that time
comes. The way to make money in
The stock market Is to buy securities
when no one else wants them and
#Ehen sell when they become popular