Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-09-11
REAL ESTATE
SOME STOCKS BEL ONG FAR BELOW
PRESENT LEVEL. BABSON SAYS
Business Does Not Justify the Erratie
Activity Of the Market, Expert Believes.
Would Regulate Finance Firms. /.
BH ROGER w. BABSON.

BN ROGER w. RABSON.
RABSoN Park. Mass. September
11.--New building Is running alons
practically the same AZ year ago
and double FIVE years ago. II seams
almost impossible for this high rate
10 continue indefinitely. hut thus far
the pessim1sts have heen mistaken IN
their forces that 1926 would not he
good year. The same conclusions
Apply to an; omohile production, which
ts web above this same season of most
years and yet shows no signs OF
slackenirta
Check transactions also are holding
up well. trimming at ain averaS &c Of over
$50. 1900. 900 eco a month, which Is
slightly ahead ~ year ago. The in
crease IN check transs ctions has not
heen spectacular. as in the case OF new
building, but has. shown a fairly steady
increase for a considerable period of
wears. This Is especially SO In the ca Sc
OF check transactions nf the United
States. eliminating New York City. as
the New York hanks tend TO make
the total more or less erratic.
Business Failures.
Rusipess ia ilures reported ny the
amount OF money involved, show a
small increase: hui this is only natural
considering the larger number OF
firms in business. When these fail.
ures are put on a per capita basis. so
to speak. 1925 will show no increase
over 1925. and probably some decrease.
The facts are that the number Of fail
ures has run just about level for the
past four years, while the total, la
hlities involved have shown de-
crease
Labor conditions and failure sta
tistics run along together quite ma
turally Although there was decline
in unemployment in 1921 and early
1922. the situation since then has been
about normal. Labor has not yet got
back TO the peak of 1920, but condi-
lions are very good. With the ex.
ception OF the textile industry nd
one or two other industries, labor Is
very we'll employed. There Is no idle
unskilled labor and we have nothing
TO fear In connection with employ
ment SO long as the building industry
holds good.
Banking Statistics.
The banking situation. so far as
II relates TO the national banks and
trust companies is very sound. There
has been a. slight increase in loans
during the past few years. but 1t has
heen more than offset by an increase
in deposits Moreover. the reserve
Of the IL reserve banks is coming up
again very well. This reached its
peak January Is. 1924. and there was
= decline in reserves throughout 1924
and 1925. reaching its minimum In the
Fall of 1925. Since then there has
been steady increase. Brokers loans
in New York City are again increas
ing in wey which is not satisfac-
tory, but the fact that these are now
published Is Of itself very good safe
guard.
When studying the banking situa-
ton however. II should be -remem-
bered that the tremendous installment
business in connection with automo-
hiles. radio sets. clothing and scores OF
other things does not show up In the
banking statement. These loans are
carried BIZ special finance corporations
which are under neither Government
nor State supervision. What VIII ulti-
mately happen to these unsupervjsed
great finance corporations only the
future can tell. Personally l. shall
not feel at all easy regarding the fnan-
rial situation until either the install
mert business slackens up or these
finance corporations are under Gov
eminent supervision.
Foreign Trade.
F,xports constantly increa sed through
ont the war. reaching a peak in 1920,
with a severe drop in 1921, Since
then thew have been running along At
shout the 1927 figures. with some in.
crease each Fail. Statistics on ex-
ports are as whole very satisfactory
and are working in the right direc-
ton. Imports also have about the
same history. reaching a peak in
,,-itl n
Since 1927 we have slowly hut con
stantly increased our imports. Ordi
narily IL ia had IN have imports move
at more rapid rate than exports.
but not today. With the tremen-
dous amount OF sold which this coun-
try has. an unfay orable trade balance
would he healthy
Money rates reached their peak In
1920 and have since steadily declined.
Money rates always strengthen In the
Fall and doubtless Will this year. hut
the general impression is that this
country will enjoy fairly easy money
for some time TO come. So long as
money holds cheap. commodity prices
should not rise. and the tendency MAY
he for a slow but constant decline.
Practically speaking: there has not
heen much change in the level If com
modify prices during the past five
wears. The general index now reg
listers nearly so per cent over the pre-
war level. compared with q maximum
NJ about 1870 per cent in the Spring Of
1920.
Crop Conditions.
Crops are fair. In some sections of
the West there are partia! crop fail.
ures. but taking the agricultural sec.
ton as a whole, with fair price. the
farmers should receive for their crops
en average amount during 1928. The
farmers have more TO fear al the pres
ent time from bumper crops. which
will break the price, than they have
from cror failures. The farmers diff
1culty today is not the lack Of crops.
hut the increased expense Of doing
business. The farmer cannot At pres
.nt hope 10 get much higher prices
for his products. but he can endeavor
to cut his operating expenses and
eliminate the nliddlemar by improved
marketing conditions. Although many
Western farmers criticize the Coolidge
farm policy, some day they will find
that President Coolidge has heen
their best friend by keeping his feet
on the ground and by not permitting