The Washington times., 1936-12-12
BABS0N FINDS
PROSPERITY
GROWING

VNV" INV
A rosy picture Of general bust
ness in 1887 was painted today by
Roger w. BabSon, economist and
statiStician, in an address before
his washington clients.
Virtually all fields of enterprise
will reap the harvest Of the in
creased business. Babson asserted,
although the wage level is ex-
pected to be affected slowly as
long as the unemployment con-
tinueS.
Must Learn Lesson
BabSon did not predict how long
the business increase would con-
tinue, pointing out that factors
controlling this are too numberous
and susceptible to change to per-
NIT any definite prognoStication.
He commented:
"If we have learned anything
from this depression through
which we have just gone, II we
have learned the proper lessons,
It Is possible that prosperity
will be with us for years to
come. However, If we have not
learned our lessons and people
60 right back into the use Of
dishonest business methods, cut
tin corners and forgetting con.
sequences, the prosperity Is like
ly to be only q flash in the pan.
II urge you all to interest
yourselves in the righteous
things help such organizations
IS the Boy Scouts, the churches
and aid in youth guidance move
mentS in order that we may en-
joy the fruits Of good business
practices"
BabSon told that If the ma
tional administration can keep
business at an even level, instead
Of letting it run away with pros
perity, it was his belief the pros
porous era into which we are now
entering will last longer.
1887 Prospects
Among his predictions for 1887
are:
General business will be bet
ter. The industries which came
back first, will, however, be the
first to taper off.
''Retail sales should continue
to hold up. In order, however,
for retail sales to continue to
increase, new products must be
developed.
Commodity prices will con-
tinue to strengthen, going up
for a few months and then
Sagging for q while. This process
win continue for some time to
come.
There will be increases in
skilled labor rates and some in
creaseS in the general wage
level. There, however, cannot
be any marked increase in gen.
eral wages so long as 50 much
unemployment exists. Wages
are determined, not by the cost
Of living, but by the number OF
unemployed who stand ready to
take vacant positions,
There should be q marked
increase in new building and in
the output Of the heavy indus
tries. The latter has been held
back thus far by politics, which
are now pretty much settled for
the next two to four years.
LOW INTEREST RATES
Interest rates will continue
low for a while longer and, in
fact, until the Government re-
funds the present debt for 20
years at ~ per cent. The gen.
eral bond market today, how.
ever, looks pretty high to me.
'If the utilities get q favorable
decision from the Supreme
Court, Utility stocks should jump.
Utility holders, however, should
not be too elated with such .
decision. It will be followed by
further legislation, which will
accomplish the same thing in
another manner.
"The railroads should do better
in 1897 than in 1886, but they
are still confronted with q great
many handicaps. I prefer air.
line, mOt0rCOach and equipment
securities.
"InfIation is already under
way and will continue through.
out 1887. It will probably, how.
ever, take the form Of Govern
ment bond initiation, rather than
printing-press initiation. In fact,
the whole world may start .
fight, using currency instead Of
bullets. During 1887 initiation
should definitely cause an In
crease in real estate prices"