The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1942-01-02
BY Roger Babson


New York, Jan. I'm my An
nual Forecast, which has just been
published in this paper, | was not
very optimistic on the outlook for
retail trade. AS We settle into our
war economy, retail establish
ments will be both helped and hur..
l have already stated that the ex.
pansion of the draft age will have
a dampening effect on retail trade
and consequently on some indus
tries. 1t is this theme which |
wish to enlarge upon in my column
today.
Initial Effects
Coming almost at the height OF
the Christmas holiday shopping
season, our entrance into a fighting
war, with air raid scares on both
coasts, set retail trade sharply
back on its heels. Department
stores sales in the Atlantic and
Pacific areas Immediately slumped
badly. Actual blackouts on the
Pacific Coast, the Atlantic seacoast
avoided, also contributed to the de-
cline. Fortunately, shoppers recov-
cred their sense of perspective rath-
err quickly. When year-end totals
are added, merchants in these areas
will probably be well satisfied
with Christmas results.
The vast middle sections OF the
country were not affected by this
initial hysteria. However, their
time will come. The East and West
COASTS are far better organized for
air raids and for home defense than
are the cities OF the Middle West
The unexpected usually happens.
Hitler's first token raids may take
place in such cities as Chicago, De
troit, st. Louis, or Minneapolis. 1t
is possible, but | don't say prob
able. for German air men to hole up
gradually in the mid-hinterlands of
Canada adjacent to Hudson's Bay
until the time comes to strike with
lightning suddenness on our Mid
West areas. In due time cities in
these areas must resort to black
outs with resultant bad effects on
retail trade.
Defense VS. Non.Defense cities
Wherever and whenever you find
rising payrolls and mohre employ
ment you naturally find more spend
ing and more money in circulation.
| This is true for defense areas. In
my forecasts for certain individual
cities, was more optimistic over
the outlook for retail trade for
1912 If they were tied into our arm
ament program than | could be for
cities which were not so fortunate
ly situated and which had to come
under a non-defense classification.
For the country as a whole, these
areas will Just about balance out
with, however. any difference on
the down side. Hence, on the whole
| do not expect retail trade
to be so good in 1912 as 1t was in
1871.
When I think OF the vast proper
ton of available spending money
which will be siphoned off by the
government at its source for the
purchase Of Defense Bonds and for
the payment of all kinds OF taxes,
n wonder how much will be kept
for retail trade. Hence. felt justi-
fed in my Annual Forecast in rec
ommending to retailers that they
must increase their advertising APP
propriations II they expect good
business in 1912. Selling in gen
eral had not been difficult in recent
months. Department stores and
other retail establishments have
been filled with plenty OF buyers.
Fear Of initiation and a belief on
the part OF many that goods might
be worth more than money has
boosted sales.
Competition and Blsekouts
More lately the idea OF a scarcity
OF consumer goods generally has
prevailed. Yes, people have been
buying freely. They have not had