Evening star., 1925-06-06
BY ROGER w. BABSON.
"
Special Dispatch TO The Star

Speclal Dlspatch 10 Ihe star.
WELLESLEY HILLS, Mass, June
6.-Many people wonder how it is
that American Sugar stocks can be
stocks are climbing upward. AT first
thought this seems to be a paradox.
Both companies are we'll established
and both are handling an article of
general consumption, and, If anything,
sugar is certainly more of a neces-
sity than tobacco. Both are the iarg-
est producers in their respective
fields; therefore. at first sight, there
seems no logical reason for sugar
stocks to be tumbling while tobacco
stocks are climbing upward. There
is, however, fundamental difference
between these two securities.
Different Methods Used.
Sugar is bought in bulk by the
pound without reference as to who
manufactures it while tobacco is
bought in cans and packages anA
bought by the brand-that is to say,
the sugar business is a non-brand
business and the tobacco business is
brand business, and from the keen
investors point of view there is as
much difference between the two as
between night and day. When any
one buys sugar he simply asks for
sugar" and pays no attention to the
brand. But when one asks for to-
bacco he calls for some specific brand.
Doubtless the sugar people see this
difference and hence are endeavoring
to establish trade names for cube and
powdered sugars.
Good Will Valuable.
: do not wish to get involved one
way or another in the merits of the
0n6r I, II l.
wrong to give an opinion on a spe-
ciiic case like this without a thorough
knowledge of all the circumstances
Ny hunch is that Dodge Brothers So
-curities will sell for less before the.
reach their natural level But 1 do
believe that their good will, to which
the Michigan authorities have taken
. exception, is a very valuable asset
Furthermore, l believe that the
bankers who are criticizing the
Dodge Brothers securities would far
rather, at the same price, have the
name and good will without any real
estate, buildings, machinery, or other
tangible assets. than to have all these
tangible assets without the name and
good will. Brands, trade marks and
good will are the most valuable kinds
e Of assets.
Values Easy to Lose.
The difficulty with them is that
their value can be more easily de-
stroyed than the value of tangible
property. The concern which has
the most valuable brands is like
man carrying pan of molten gold
over a rough mountain pass = with
the least tipping of the pan one way
or the other some of the gold is apt
TO run out, and If he should stumble
all would be lost. 1t is an old saying
that the higher up in the tree a
bird builds her nest the easier it is
for the nest to be robbed"
+ Hence, the most valuable brands
must be protected most carefully,
both from outside pirates and from
short-sighted men in the management
who are neglecting the quality or re-
dueing advertising appropriations
simply to secure immediate profits
cannot speak toe highly of the value
of trade marks, brands and other
forms of good will, but I must at the
same time say that they can be very
easily ruined.
Brands and trade marks, when prop
erly developed and protected, seem to
prosper irrespective of business condi-
tions, variations in customs, and even
changes in management.
Brands Outlive Founders.
Brands outlive the lives of their
founders, and when properly cared
for are like rivers that run on for
ever. Once l was called to Washing
ton in connection with a trust inveS-
tigation- The Government was en-
deavoring TO break up great monop-
oily depending, not upon trade agree