Imperial Valley press., 1944-09-08
Economist Cites
Postwar PeriIs
Continued from Page

Continued from Page II
tween November z. 1914 and March
Z, 1915. ii is fair to assume that we
will go on a full peace basis in
1916. After a short period of re-
adjustment (which will be shorter
as the time required to whip japan
is longer we should enjoy few
years of good business. The pent-
up demand for goods, the great
surplus of money and other con-
Siderations may even lead to a
sharp and short boom. There cer-
tainly will be great activity in the
building of small homes.
MUST PAY FOR ALL
Sooner or later, however, the en-
tire world, including our country,
must pay for what has happened
since 1899. I should not be sur
prised any time around 1850 to see
business go into tailspin with con-
siderable unemployment. Hence, it
is much more important for inves-
tors to base their purchases on fun
damentals than on the hopes of
new inventions. new processes and
other possible boomletS.
Investment dealers make their
money by selling or exchanging Sc
curities To get people to buy with
cash, or to sell securities now held
and re-invest in other securities.
requires bullish talk of some kind.
Strange to say, investment adver-
tisementS headed Avoid Losses"
pull very few inquiries; while ad-
vertisements headed Increase Prof
its" get big returns. Hence. both
investment dealers and brokers feel
that they must always be optimistic
ballyhooing the rails. plastics, elec-
tronics, television, etc.
To a certain extent. the above
also applies to some professional in
veStment advisors. Too many such
talk much about the opportunities
ahead without giving sufficient
consideration to the danger signals.
100000, ,000C90 of government debt
for fear of the F'BI or FRB or some
other governmental bureau. They
dare not give our bearish talk on
the rails, etc, because they like
the brokers-lost subscribers there
by. Hence, they also fall into the
common trap of talking of the pos
sibilities of big profits.
1t is a great mistake to compare
conditions today with those of the
days of World War I. Under the
conditions of twenty-five years ago
the ballyhoo which I am now criti-
cising might be justified; but in
vestors will find a different post
war world a few years hence than
20's." Then the masses had not
awakened. Today-whether we like
it or not-the people are on the
march. Following World War I the
government was not in business, but
today the situation is very different
For instance, the government now
owns 95 per cent of the synthetic
rubber industry, 80 per cent of the
magnesium industry and 85 per
cent of the airplane plants. The
government probably owns so per
cent of the Shipbuilding. machine
tool and aluminium plants of the
country; and 10 per cent of the steel
foundries. 30 per cent of the metal
working plants and 20 per cent of
the high-test gasoline refineries.
After the war, the states where
these plants are located will put up
terrific fight to keep them run
ming. Is not this a communistic
economy made to order for the New
Dealers?
This does not mean that you
should put your money in a sock
or bury it in the ground Invest
ments may well be safer than cash
in the years to come. Certainly.
postwar initiation is inevitable On
the other hand, because I am ad-
vising against reaching for quick
profits. there is no reason why you
should not buy Well-seasoned in
vestments. Capital can be conserved
today as well as in the past. Those
who have their holdings properly
diversified and who depend on
fundamentals, realizing that the
people are on the march," should
have little TO fear.