The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-09-30
Trends
Gen. Dawes Reaches
New Heights in
ForecaSting.
by VINCENT LYONS
Times Financial Editor

by VINCENT LYONS
Times Financial Editor
OUCH ironical nomenclature as
~ "soothsayer' and "clairvoyant'
filed the air in December. 1884,
when Gen. Charles Gates Dawes,
former Vice President Of the
United States. boldly predicted be-
fore the Chicago Association Of
Commerce that national prosperity
would be under way in June or July.
Today Gen. Dawes may well la,
claim to having called the turn
on the trade recovery almost to TIE
day.
since June an accumulation OF
favorable performances by the
miscellaneous business barometer,
which can spell prosperity or de-
preston. makes the general SOUND
like an oracle: no matter how I'M
savory he may regard the como
tation of such a word. In keeping
with this hastily erected reputation
OF Gen. Dawes a packed mouse was
in attendance last Thursday IN
Chicago when he delivered an ad-
dress before a joint meeting CT the
Chicago Association of Commerce
and the Illinois Manufacturers AS
ISOLATION.
Gen. Dawes earlier prediction OF
an impending revival was not
haphazard guess concocted Of equal
parts of hope and publicity. He
explained in his speech last week
that the question uppermost in
his mind was When will this
present depression end?" Ignor-
ing the mass of contradictory
theories espoused by economists.
the former Vice President superim-
posed on a chart the depressions Of
1873. 1893 and 1929 as if they all
had started at the same time and
used the market course Of heavy
durable goods as the index.
S a result Of what I found
~ Gen. Dawes said, giving the
simple reasons therefor, based on
human nature, I predicted in my
last address the sudden sustained
rise in the demand for heavy dur
able goods in June or July OF TINS
present year. which started IN. steel
ingots. contra -seasonally, on July
8. 1885, and still continues.
Gen. Dawes declares that the
charts indicate that the last three
major depressions, regarded as
commencing with stock market
panics. registered the approach OF
the final year of business recovery
in a sustained rise in stock prices.
In each case. he adds, approx
,matelv 90 days after the COM
mencement of this sustained rise
in stock prices five years and nine
months after the initial stock
crash they registered the start of
the sustained rapid advance in the
price of pig iron which was the
beginning of the recovery in the
two former depressions, and in this
depression.
The correspondence in time in
the intervals between the sudden
credit and stock collapse, marking
the BEGINNING of these three char
tered major depressionS and the
beginning of the recovery year in
each of them, can not be acciden-
tai, according to the general.
4 Even if the natural reason for it
was not simple and plain, he holds,
the fact itself would imply d fun
damental and a common cause.
IMPRESSIONS, Gen. Dawes OBJ
II served. have their "a IN not
in human reasoning but IN human
emotion. He intimated that the
sustained stock market and dur
able goods industry rise could be
attributed to mass purchases over
a broad. indiScriminate front which
gave the increased purchases the
continuity necessary to emergence
from depression. Selective buying
on a speculative basis. he ex-
planned. is not a market factor
when the composite average of all
stocks indicates that the public is
buying on the basis of confidence
rather than Judgment.
Those people who scoffed at Gen.
Dawes earlier prOgnoStlcatlon
based their deriSion on the fact
that the political fraternity is no.
toriouSly adept in eXaggeration.
They forget. however. that he is
we'll qualified to speak on business
and finance. having spent many
years in public and private life in
positions which made It necessary
for him to have a vast knowledge
Of these subjects.
From 1897 to 1901 he was con-
troller of the currency. The next
year he organized the Central
Trust CO. of Illinois and. served as
president until 1921, when he was
named chairman. post held I'M
til 1925. Since 1882 Gen. Dawes
has been chairman of the City
National Bank and Trust Co. Of
Chicago. successor to the Central
Republic Bank and Trust. He Is
the author of the famed Dawes
plan: was first director of the
United States Budget. and preSi-
dent of the Reconstruction Finance
Corp. AS far back as 1892 he wrote
a book entitled The Banking SyS-
tenn of the United States.
On Commission ROIU
=. .-..-. 49, .,.hs..+ o., ~bo,oo Az