Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-01-02
BY ROGER w. BABSON.

WELLESLEY HILLS, Mass. Jan
uary 2.-At the outset of 1925, business
was at a fairly high level. higher. in
! fact, than at the postwar peak in
| 1s19-but this elevation. of course,
| takes into account the gradual growth
| of the country during the past five
years. In the middle of 1925 business
hesitated, but for the last six months
has been on a marked upward swing.
Reviewing 1925 statistically, In the
early months of the year the Babson-
chart index of general business stood
about 100; business dropped to less
| than 80 In the middle of the year, and
then rose to over 100 as the year came
to q close.
This trend of general business in
| 1925 was consistent in the main with
accompanying tendencies in commodity
prices, the security markets. money
rates, building activity, business fail-
ures, freight car loadings, employment,
production, profits and other tunda'
mental rec or,!s which have examined.
1926 Outlook Bright.
Business is thus entering 1926 with
many favorable Indications. The signs
of overexpansion IN business are few
the onward swing is not Net excessive,
and it's present momentum gives prom
Use OF relatively good business through
the first half OF 1926. The outlook TOR
business in the IL st half OF 1876 seems
TO me. To depend largely upon whether
common sense viii continue TO prevail.
II We keen our heads and do not try
10 e.luand too fast OF too Tar. business
should remain good tor the entire yer.
ON the other hand. il Improvement Is
fpultIhly pushed into mutation. there
may u, a pruputtluhate r@lcti"n.
Comnndit, Price Prospects.
Con!tnod.ty prices are likely t. ave..
az. soneW h:It higher II the Hrst i1li
If 1875. Throughout 1"25 the prices
of industrial products moved almost
sjdewise. industrial raw materials
showing Il high of l67 III February
and a. low of 1Gl in May. with some
rebound at the end Of the yea
sidewise movement seems surprising
in comparison with the upward trend
of business, until you recall wat
snite Of the great increase in business
and the brisk activity To-Day, ne,
every business IS struggling against
severe competition.
This extreme intensity OF competl-
tion has continued to prevent price
of industrial products from rising y
full proportion to the expansion oil
general business. During 1@23 pro
ductive activity has been a control
ling element in the price situation; tins
condition should I've watched cdfeiui
" in 1926. I emphasize tins.
Steel, iron. coal and nearly every
other branch Of industry has
uilly forced production upward. II
has become increasingly apparent 10
me, during the year just ended 'ha'
most of our industries are equipped 10
produce more than can be readily con
I TnY ~
outlook is that industrial prices should
average somewhat higher for the
early part of 1926.
Price Changes Sensational.
Prices of agricultural products have
been characterized by sensational
changes during the past two years.
There was first remarkable rise
from a low In 1924 TO a peak in Feb
ruary, 1925, the increase measuring
about g. per cent. This was followed
by a second notable change, namely
sharp decline, measuring about "a per
cent. This drop had TO be attributed
10 heavier production Tor the en;!
world The cirry-over. however, was
limited and there is no burdeusoIne
supply OF grains overha nsinS world
markets.
The price decline seems TO discount
unfdVCrahle influences, and q further
marked reduction is not indicated
Analysis fails TO support another year
of sensational price eruptions such "a
occurred a year ago. Although the
usual huctuation in agricultural prod
ucts will take place, review Of all
the factors suggests that the avera ge
price Of agricultural products during
the balance ~ the crop season should
rule higher than the present level.
No severe labor disturbances are
| in immediate prospect. The year 1925