The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-02-16

the Irade cycle.
There are indications that q
new phase is developing-a phase
of recovery from the slump in the
last nine months Of 1927. In
retrospect, IT now appears the
last period of quickened prosperity
ended In March. BY December.
business sentiment seemed to
reach the low point, and has,
subsequently, been improving. Con-
versation with executives OF lead
ing industrial corporations in.
dicates January showed more Inn
provement than has yet become
visible.
= The pickup is recognized by
manufacturing executives chiefly
in q disposition on the part Of
customers to anticipate needs
somewhat, instead Of waiting until
the last minute for deliveries.
/, Some astute industrialistg,
with plants scattered throughout
the country, who can sense
changes in trade winds long be.
fore they appear in published
statistics, have expressed the
belief that the improvement now
under way in some basic lines
il more than seasonal. The chief
visible signs of Improvement have
been in the automotiVe and iron
and steel industries. but other
basic manufacturing trades also
have seen indications that the
slump has been checked.
Credit Minor Influence
Nowadays, with scientific bank
ing and expert business manage
ment, changes in the business cy.
Gle must be measured by delicate
statistical instruments. The
country has apparently passed
the stage when recessions end in
dramatic crises accompanied BY
spectacular collapses Of the credit
structure. The present money
supply runs far beyond business
requirements, so the factor OF
credit has become q minor tnflu'
ence in the short term swings
Of business. Better management,
including inand.to-mouth buying,
leaves the ordinary concern bet
ter prepared for changes in the
situation. Accordingly, the trans
IllOH LFOM BOOu ~ AS9S ANN~ss
able times and vice versa is
frequently 80 smooth It escapes
public attention.
IL the evidences Of quickenlng
trade which are growing, prove
more than momentary squirt,
business Improvement will ease
up the problem Of unemployment.
However, no shift in the business
cycle will correct such unenploy.
naent az results from the revolu'
ton in business methods under
which machinery il being substi'
tuted for manpower. Ultimately
such changes should mean further
increases In the standard Of living
ana additional forms OF employ
ment. However, there Is some.
times q lag between the throwing
men out OF old jobs, because or
increased managerial and produc.
ton efficiency, and The launching
of new activities. A wise social
problem will take care OF such
casualties in the race for progress.
1 discussed this situation with
the head of one of America s
premier Industrial concerns, with
branches in many foeign coun'
tries. He said that in deciding
whether to displace old methods
with new automatic machinery
the corporation figured that the
machine cost 20 per cent a year.
including 10 per cent Tor depre'
citation, s per cent for interest on
the capital expended and 5 per
cent for repairs. II the company
felt it could only break even, he
said. it always decided to stand
pat. It would expect the machine
not only to pay It's way, but also
to show additional earnings Of 20
per cent, The 20 per cent rule
Of thumb animates many OF the
leading and most successful man
ayers Of the country.
Automatic Machinery
The effect of automatic ma
chinery has been greatly to IN.
crease the productive power OF the
industrial workers. while reliev.
ing him of difficult jobs of lift
ing. AS work has become physi.
cally easier, employers have found
it. not only possible but necessary
to pay higher wages. As the
head OF one huge industrial enter
prise expressed it, working with
a machine requires more intelli"
gence, and human beings are un.
willing to make the added mental
exertions unless spurred on with
new incsntives-and the best lure
yet discovered is higher wages"
An extraordinary change in bus
mess policy in recent years has
has been the abolition Of the
policy Of secrecy. American man.
ufacturers in increasing numbers
are throwing open their plants to
competitors for inspection, and
Neurological progress Is quickly
made available to the entire in
dustry. American producers have
been particularly hospitable to for
eign observers, who have come
over to learn the secrets Of Yam.
kee success. Detroit, the capital
of American mass production, has
been the focal point for foreign
engineers and industrialists, who
have come over on trade missions
to study American methods.