Imperial Valley press., 1938-12-30
Roger Babson Predicts Business viii
Rise to 2qLeveIin Next Year

tCOnllluSu from rage II
again be touched. AS a result of the
sharp ups-and- downs of the past
decade. they have come to believe
that hard times are now normal
times in America. l disagree. I
think that these people have lost
their horizon! l do not believe that
1929 necessarily represents the PIN
nacIe of American business.
1t is true that some factors are
less favorable than in 1929 Among
them are taxes, bureaucracy. and
lack of faith. We have. however
the following favorable items to-
day:
l. Our population has grown =
100000 since 1929.
,. Thousands of new products
have been invented.
3. Production efficiency has soar
ed so per cent in ten years.
4 A huge deferred demand for
goods has piled up.
5. Credit reserves are the great
est in history.
g.. Production costs are lower than
last year.
T. Wholesale and retail inventor
les are relatively low.
8. Confidence is returning as
business batting lessons.
9. Billions will be spent on arma-
ments and pump printing
TO- Building is on the threshold
of a real boom.
Gradual Gains in Early Months
For these and other reasons, l
believe that the forces of recovery
are still predominant. Right now
business stands at SO on my Bab-
sonchart compared with "a a year
ago, 1889 will open, therefore, with
activity Is per cent above the early
days of 1899. Indications are that,
as we work along through the first
half of the year, business will
register a slow but healthy gain
over the January levels. The entire
first half of the New Year should
show 25 per cent increase over
the glOOmieSt months of early 1888.
The second half of the year will
be better than the early months
and will run Is per cent above the
last half of 1888. The entire years
gain should average around 20 per
cent.
No Disturbing Legislation
The absence of disturbing new
legislation may well spark this ad-
vance. Since 1888, the cues for my
annual forecasts have been found
on Pennsylvania avenue. This year,
we face a new Set-up. The marked
increase in the Republican delega-
ton on Capitol Hill, plus the un-
purged Democrats, can lick any
further New Deal reforms. On the
other hand, the President still re-
tains enough 100 percenters' to
block any serious revision of exist
ing laws,
As a result of my recent poll
of reader opinion on the Patman
Chain Store bill, I predict its de-
feat. The defense program will &C
ahead full blast after a strong de-
bate in congress. but I doubt il
any special taxes will be levied
to support it.
Because of the heavy defense
program, the spending faucets al
Washington will be wide open. Al
though the average citizen wants
economy, his wishes are not needed
by congress or state legislatures.
think that public extravaganza is
one of our three biggest long-term
problems. History proves that, once
spending starts, it is almost i'm
possible to stop. Our experience sc
far bears this out. A balanced
budget is not in sight. BY the end
of the next fiscal year-On June
80, 1940-our national debt may
reach S42 200, ,00O, 900, compared with
SIG, 900, 100000 in 1880.
More Jobs and Strikes
Better business next year natur-
ally means more jobs. There are
about 100000 jobless today against
100000 last Christmas. This total
ought to drop at least 100000 dur
ing 1899. New building railroad
equipment, factory machinery, and
the tool industries, plus the SER
vice businesses, should provide q
good portion of these jobs. As bus.