Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1946-07-12
High Wages
TOCOntinue.
Babson Says
BY ROGER w. BABSON,
Downright 1876, Publishers
Financial Bureau. Inc.

Babson Park, Mass, July ia
cook has been written by me and
published by Harper & Brothers en-
titled, Looking Ahead Fifty Years"
In this book. ! discuss various sub
Jects, such IS the future of invest
ments. the development of new in
dustries, the changes in farming, the
outlook for small businesses and the
possibility of labor rule.
Numerous readers have written to
me saying. Il will be dead and gone
IN fifty years. Tell me what you cX-
pect during the next five years" OF
course. this is more risky thing To
do. /, too, will be dead before the
end OF fifty years, while | hope to
De around for the next five years.
But here is how I now feel about
The immediate future.
Expect Low Interest Rates.
| expect continued low interest
ates. Hence, since money doubles in
fifteen years at five per cent. should
YOU not seek five per cent interest
With reasonable safety rather than
pcculatc even on the long swings"
If the stock market? OF course, YOU
can't pick five per cent investments
off blucbcrry bushes. You must take
time TO hunt them up and find
hem. Certainly, you should not be
.atisficd with bonds that pay less
han four per cent interest unless
hey are either taX-eXempt or con-
crtible.
Jays of Mass Unemployment Over.
| expect continued employment
nong the masses or else govern
nent aid for them when unemploy-
ID. The upper middle-class people
and the well-to-do will continue to
have their ups-and- downs; execu-
tiveS will again have their salaries
reduced and their dividends cut
with corresponding declines in stock
prices: but the days of mass uncm-
ploymcnt are over for many years.
The American people are not going
to let labor leaders rule them; but
the days when employers can be ar
bitrary are also over. Hence. if the
Republicans hope to return to office
they must realize that we are living
N new world. whether they like
i or not.
No political party can survive an
pther era Of low wages. If private
industry cannot continue present
wages, the government will do so or
else provide wage subsidies. Hence.
in view of the above. are not the
merchandise stocks, the food prod
ucerS and similar concerns the safest
investments? Remember, high wages
are to continue
Real Estate Prime Investment.
| expect continued demand for
properly-located real estate, especial
ly for homes. Next to food and
clothing, reaSonably-priced homes
should continue as a prime invest
ment Hence, | believe that your
first investment should be in a home
and enough fertile land for kit
chen garden. Houses depreciate.
but well-located land should appre-
ciate.
Try to avoid large cities. especial
ly on the coast. Unless great spirit
ual awakening occurs. the chances
are that World War III will come.
when some of our large cities will
be totally destroyed.
/ expect that money invested in
inventories. gocd stocks and homes
will continue safe when many mu-
niclpal bonds may be in default.
This situation now exists in Mexico,
which is our nearest neighbor, and
in most OF the tin-American
countries. England is destined to fol-
low suit as well as other countries.
We have already seen many mu-
nicipal bonds of southern cities de-
fault and sell for 80 cents on the
dollar, while the sales of the chain
stores in these same cities held up.
Hence. are government and NUM-
cipal bonds truly prime invest
nient? May not certain merchandise
rig and other stocks be safer in an
emergency?
Diversification is OF great impor-
lance, but such should be applied
geographically as we'll as industrial
ly. Above all, should not our invest
ments in coastal cities, subject to
bombing, be very limited? This does
not mean there will be another war
in five years, but IL does mean that
within five years people will be-
come war-conscious and begin to re-
adjust and allocate their securities
and real estate holdings. This read
justment process could greatly af-
feet prices. Settle in small interior
city and buy securities with assets
In such cities.