The Wilmington morning star. [volume] (Wilmington, N.C.) 1909-1990, 1945-08-14
Roger Babson Discusses
Election In England
BY ROGER W. BABSON

BY ROGER w. BABSON
X BABsON PARK, Mass. Aug. 10.
When Churchills defeat was an.
nounced by radio, the stock mar
ket started to crumble. When, no
ever, investors began to realize
that it would take years for Eng.
land to get its socialistic plans into
action and perhaps then would fail
to succeed. these same people be-
gan to buy back securities. The
market has since returned to nor
NAL. There are several reasons for
this.
l have long thought that infla-
ton is inevitable; in fact it is 60
ing on every day. Nothing can stop
it except a great spiritual awaken
ing which will cause us to put the
good of all before our own selfish
ness. l, however, now see no sign
of this. Hence, the United States
is headed for higher prices, high
err wages, higher rents and higher
stock values. The people of the
world are ION the march" de-
handing initiation.
l am more sure of this than ever
since the Labor Government OF
England won by such large ma
jority. This will enable them to
take over the Bank of England and
issue all the money they need for
their socialistic experiments. WI y
Their or not these will be success,
no one now knows. Russia is still
in the test tube, Notwithstanding
what her friends say. But for the
next few years, while the expert
ment is being tried, jobs should
be plentiful and money should flow
like water. Stocks should sell
higher-not only because OF their
intrinsic merit; but because wise
Englishmen will shift from their
English stocks to American stocks.
Compared with panic prices OF
ten years ago, the stock market
now seems high to many conser-
vative people. This is because the
stock average was only 80 in 1882
compared with 10 today. Yet, only
as far back as 1887, these same
stocks sold at about 1870; while in
1929 they sold for $50. With the
British Government and the Bank
of England backing initiation, some
stocks may well again sell at 1923
highs.
What should l buy?" you ask.
Well, the safest procedure is to oil
versify among a wide list, buying
the leading stocks in fifteen or
more industries, emitting the rails,
airplane manufacturing and ship
ping stocks. If you pinned me down
to three groups / should advise the
Merchandising Group, especially
the variety chains, the Insurance
Group, especially the casualty
stocks, and well-managed Real Es'
tate. These are the groups in Which,
l am investing my own money.
Fifty-five years ago there were
only about one or two billions vi
loose change" in pockets and cash
drawers. 1t took about fifty years
10 build this up to seven billions.
During the past five years loose
change has jumped from seven bill
lions to tWenty-eight billions! This
means it has quadrupled in five
years. During this same five years
bank deposits have doubled and are
now over 500, 900, 900, 900.
This nearly equals the assessed
values of every acre of land and
every building OF every kind in
the entire United States. When
one considers that there are no
more securities available for pur'
chase than there were five years
ago, it seems as if higher prices
for stocks and land are inevitable.
Sooner or later this loose change
is going to seek investment,
Churchill's defeat should hasten the
day.
Let us consider interest rates. 1t
was not long ago that government
bonds paid over 4 IL per cent;
savings bank accounts paid 3 IL
per cent; while we got 2 per cent
on our checking accounts. Today
these interest rates are down to