Joplin Globe from Joplin, Missouri • Page 14

JOFLIJS GLOBE, SUNDAY, DECEMBER 29, 1929. As Roger W. Babson Sees -1930 In Business and Financial Way By ROGER W. BABSON. Babson Park, Dec.

Well, 1929 has certainly been exciting enough for anybody. Profits and losses have been of them in large volume, and in "some cases by the same individuals, resident Hoover's conferences ith business leaders are over. Everybody has promised to do all that can be done to make 1930 a good year, and now we are squaring away to the start of an eventful twelve-month period in American business. I do not want to appear as a pessimist in the face of the enthusiastic promises of co-operation which Mr. Hoover has received, and which were given the widest possible publicity in the press all over the country.

I want to go on record as believing that President Hoover has taken the wisest possible course in meeting the impending depression in business that any statesman could have taken under the circumstances, and he has ehown himself to be the most capable man we could have had in the House at this time. Stock Market Not Only Cause. But we must keep in mind that the stock market break has given a dramatic and spectacular impetus to the downward trend in business, yet fundamentally this downward movement was not altogether caused by the stock market crash, nor did it follow that catastrophe. Business has been going down hill since last July, and it has been going down hill as a result of. the inevitable law of action and Reaction.

We have had an extended period of prosperity, with the Babsonchart showing a five- year area of practically unbroken good business. It is only logical that sooner or later some rest period from his fitful era of over- expansion would take place. Consequently, we must not assume that there is any magic method, however well intentioned, that can by.Twaving a wand turn 1930 into a year 'of rosy prosperity. ir construction proj- feqts, new public utility developments and other channels through which any labor surplus is to be absorbed during the coming year Will, of course, take up some of the Slack, Unfortunately, however, our economic machine is too cumber. some and clumsy to be easily and Quickly turned about by any palliative measures of this sort.

Under an ideal economic system we would, of course, have no peaks of prosperity or pits of that time is still beyond the hori- ton. Meanwhile, as long as we continue to push our prosperity upward to the point where it becomes Inflation, we must expect that the consequences will be inevitable and a great extent unpreventable. Remember, for most of the time for five years American business has been considerably above normal I have had a great deal of pressure brought to bear upon me during recent weeks to issue "optimistic" rather than "pessimistic" statements on the outlook. Now it is none of my business to be either optimistic or pessimistic. I would be false to my responsibilities to the American public as a statistician if I colored my economic conclusions with any tinge of unwarranted optimism on the one hand, or unnecessary pessimism on the other.

I can only offer you the facts and state, where possible, what they indicate. And, after all, those are the essential implements which we must use when we face the prospects for next year. Now let me touch upon a few of these salient factors. Stocks in Readjustment Period. After what we have seen in the 1929 stock market, it is foolish for anybody to say that the market equilibrium can again be immediately established.

Throughout all history, after such a boom and colossal collapse as we have witnessed, a period of readjustment and foundation building must ensue. This is what will occur in the first part of 1930, and it will take time to do this. Just as stocks tend in a period of Inflation to reach levels far beyond their real worth, it is equally true in" the reaction that follows they will seek points far below what is a fair price in terms of security, yields and earnings. I believe that while the market may have temporary fluctuations up and down, the averages will not hold their position on the rallies, but will drag at times to low levels in the first months of 1930. Of course, in individual cases stocks may have already seen their lowest points, but feel that stock buyers are going to have plenty of time to complete thfcjr purchases of stocks at bargain levels.

At this period there are several maxims which the jftock buyer should unquestionably follow: "(1) Don't try to put all your money in the market at once. Take your time and make careful studies. (2) Investigate earnings and yield. If the company is not situated to give good earnings in 1930 and 1931, let it alone. Past earnings mean to future prospects.

Again, if the dividend yield is too small, forget that issue nd pass on to some stock more Lucky Tiger for falling 'r proven A delightfully perfumed hair Amerlca'i largest idler at Barbero.Druggliti. LUCKY TIGER ALSO MAKERS OP WHYTE-FOX NO. 2 I Tht Nra Two-Way HEAD COLDS SKIN IRRITATIONS 14 native Ingredients of well-known therepeotto value. A trial will convince. promising.

Don't forget, also, that dividends can be cut! (3) Don't over concentrate on any issue, don't overload, and buy your stocks outright. It" would seem that the American public should have learned its lesson relative to buying stocks on borrowed money this past year. Healthy Money Situation. Now, what about money rates, on which so much depends this coming year? The most healthy monetary situation for a long time i now seems safely established. I Money rates over the next few months should average somewhere around present levels.

This signifies the most healthy monetary situation for many months, but it I does not mean exceedingly easy money. Gold is going out of this country to help foreign credit conditions, but this trend should not have a marked influence on money rates because of the sharp reduction in the demand for funds here. Moreover, with speculation stunned and with business needs shrinking, banks should be able to remedy the credit strain caused by excess stock speculation. Indications are that from now on, business will be able to obtain ample credit at. more favorable rates.

Money may temporarily stiffen during periods of stress, but the long-time trend is downward. One encouraging feature in the general financial "situation is the strong position of the federal reserve banks. For some time these have insisted that member banks liquidate their borrowings. Moreover, the system has lightened the pressure on money rates by increasing its holdings of bills and government securities. These operations tend to ease money.

Another development is recent conferences at Baden-Baden which center around a move for cheaper world credit. Lowering the Bank of England rate indicates the trend. Large interests are -trying to prepare financial markets for the flotation of the German reparation bonds. In order that this operation will be fully successful, money conditions must be favorable. For some time to come comparatively low money rates should prevail, and business and agricultural needs should be met more easily.

Good Bond Market in 1930. The easing of money rates and the blow dealt to speculative excesses have created a most favorable situation as regards bonds. It may seem ridiculous, in view of the propaganda of last year, to say a good word for the old-fashioned bond. For two years past the investing public of America has hardly been on speaking terms with our fixed interest securities, but I prophesy that we are in for a year which will be dear to the bond salesman's heart. Wise investors have already accumulated good lines of bonds at pretty attractive prices, and the bargains will soon be disappearing.

A chart of the bond line shows that bonds declined more or less steadily since early in 1928 until they got down to 1925 levels last fall. Since then they have, of course, rallied a little, and the lower money rates I have referred to should give a good bond market for 1930. Remember also, the growing equities behind many bcrds today. In passing, I call your attention to semi-investments, in the shape of convertible bonds. Convertible bonds and issues carrying stock purchase warrants offer very attractive opportunities just now.

In fact, they are a particularly desirable medium for those who have funds to place in semi-investment -ecurities but who may hesitate to buy stocks at the moment. There are now some exceptional bargains in this field. A reasonable degree of security is afforded, with very high yields, together with the possibility of appreciation. I urge investors, in the craze for stocks, not to let bond bargains escape them. Industrial Prices Trend Lower.

Speaking of money, easier money rates have always produced a tendency toward lower commodity prices. A declining trend in general commodity prices is, of course, inevitable during 1930. Competition is going to be keyed up higher and price-cutting will be on a larger scale as a consequence of lessened business activity. Buyers should generally go slow. Of course, we must consider industrial commodities and the crop commodities under two separate heads.

As to industrial lines, the downward trend should be most evident in luxury goods and non-essential lines. The outlook is for general business activity to slacken still more over the next few months. The extent of the drop in business and commodity prices will be somewhat greater because of the stock market crash, which cut purchasing power sharply. With producing capacities large, industry will try to keep busy, and some price cutting to stimulate buying is anticipated. This is why have not been able to believe, for instance, that copper metal could be held around eighteen cents.

Those in control have certainly done a good job at this, but you cannot buck fundamental trends. Agricultural and related products should be affected the least by the recent change in financial conditions. Prices of farm products declined in sympathy with the stock market collapse, especially the more speculative items, but gradually higher levels are probable over the next few months. Remember, however, that all trade probably will hold back more than is really necessary, pending a clearer picture of 1930. This should be the buyer's cue to order lightly and keep close tabs on business developments.

How much business falls off and how low prices will go will be indicated generally by what happens in the building, steel and automobile Industries. Public Works Will Feature. What about the building industry? Considering it one of the major industries of the country, we must face the fact that the total amount of construction in 1930 probably will be under the levels of the past few years. While cheaper money will gradually encourage speculative building, particularly residential, yet this favorable factor alone cannot at once offset the general lack of confidence that will exist as far as new building is concerned. Public works and utilities look the most favorable of all the building groups.

Mr. Hoover's program can be applied to a great advantage in this respect, and, after a few weeks, industry should feel the effects of this practical and worth while movement. Later, the favorable financing terms which will continue to exist should bring a certain amount of other new build- into those sections where it is most needed. Conditions in the motor industry are too well known to need any comment. Automobile production already is being sharply curtailed because of what has happened in the stock market.

Moreover, the industry is faced with overproduction. The second-hand car market is something which will need to be worked out. Orders for ct-rs have been cancelled and there will be a considerable number of repossessions. This means further resistance to the sale of new cara and some price cutting. This applies to the automobile, tire and accessories concerns, as well.

New business will tend toward smaller and lower priced machines. I look for fewer companies before the year is over, but this will really strengthen the industry. The outlook for steel is in part a corollary to the building and automobile lines. Inasmuch as it will take time to bring out any considerable demand from these two lines, the steel industry will have to draw more largely from its other sources of business. The railroads, of course, are in position to place good orders, and heavy construction projects will help as the year wears on.

The foreign business may offer a solution, but indications are that the balance of foreign trade may shift in the next few months, with imports tending to increase more than Exports for some time have been paid for in gold. Now the metal is being withdrawn to protect foreign credit and to strengthen foreign bankfng positions. In Farming Sections. As to sales, the farming sections, oh the whole, offer better opportunities than the industrial areas. The direct effect of the market crash is, of course, being felt in the urban areas and the brunt of the business readjustment is going to be borne by the industrial communities.

Furthermore, during any industrial depression it is always true that men leave the cities to return to the farms. This movement refocusses e6onomic activity and makes the agricultural sections the more favorable from a sales' standpoint. Moreover, during an industrial depression, while the prices of manufactured goods decline, agricultural prices can always be maintained at more favorable levels. This is because they are not influenced so much by competition. The sales of costly goods and of non-essentials are going to be cut during 1930.

A great deal of buying also will be transferred to medium and low priced goods. Staples should be the least influenced by any impaired buying power. We must all continue to eat and live, and the necessaries of life will get first call. Although I do not look for any immediate distress due to unemployment, yet there will be an increasing available labor surplus in practically all lines during 1930. President Hoover's efforts are aimed in part to meet this situation and to the degree that they are successful unemployment will be less severe.

But even where workers may not be dropped, lessened hours of labor may be necessary, as industrial activity slackens. This will mean a wage level that will find the pressure definitely on the downward side, although all will co-operate to keep the wage scale as far intact as possible, even though the total pay roll may be smaller. Certain Industries Should Improve. I have just spoken of the necessities of life. This is why the better managed food companies, miscellaneous chain stores and sirfiilar merchandising organizations should do well in 1930, and I am hopeful that such long depressed lines as textiles and sugar will turn for the better.

There also are some leading industries where activity should be good. From present indications, outstanding improvement is possible in the oil industry. I recognize the fact that the rate of increase in consumption may be checked, but the radical step taken in California to cut oil production should reduce total supplies on hand. It looks now as if general curtailment is under way. This should greatly strengthen the statistical position of the oil industry.

Electric light and power, and the gas companies, will continue to expand, although their growth may be temporarily at a lower rate. However, the long-term outlook for the power and gas business is very good. In many respects, then, we are, as a people, in the "morning after the night before." But America is the same country that, it has been. is a Prescription for Colds, Grippe, Flu, Dengue, Bilious Fever and Malaria. It la the most speedy remedy known.

We are learning some valuable lessons, and when we have them fully learned, there will be a better outlook than there has been for many months. Let us hope that our business leaders will not attempt to "make water run up hill," and let us all go back to work and redouble our diligence in making two blades of grass grow where only one grew before. This is what will help make business look better a year from now than it does today. Moreover, if this policy is pursued, there will be good investment opportunities during 1930 for those who will investigate carefully and do not drive ahead along the lines of the 1929 speculative craze. A final word to all: 1.

Every cobbler should return to his last. Spend less time fussing with the stocks of other companies and put more time on the balance sheets and income statements of your own business. 2. Watch your credits and push collections with discriminating vigor. Shape your advertising and selling to conform to changed conditions.

3. More gentlemen will prefer bonds in 1930 than was the case in 1929. Get your full quota of well chosen bonds before the market advances. 4. Remember that those who dissipate their funds on the rallies will find themselves empty-handed when the big stock bargains come.

5. In 1930: Make chances instead of take chances! (Copyright, 1929, Publishers Financial Bureau.) New Stage Scenery. Austrian scientists have produced a novel stage setting which will more freedom and reality in strange presentations. It is produced by a magic lantern slide which is so flashed on a white canvas that actors within two feet of it do not cast a shadow. SENTENCED FAMILY TO OETNEW TRIAL Parents and Three Sons Returned to Interest Aroused in Case.

Lamar, Dec. five members of the Irwin family, Mr. and Mrs. O. V.

Irwin and their three sons, Clinton, Gilbert and Joe, sentenced last January to serve five years in the penitentiary for chicken stealing, arrived here Tuesday in charge of Marshall Shulz of the state supreme court. They were placed in the Barton county jail to await disposal of their case, which has been remanded for a new trial. The case has aroused considerable interest throughout the state, owing to the fact that the Irwins were sentenced as a family. In reversing the sentence, the supreme court ruled that the state had no right to prove reputation "bad," but should have disposed of each member individually. Sympathy Evidenced.

Much sympathy has been evidenced for the family by state officials and persons throughout the country. Warden Leslie Rudolph of the penitentiary sent a personal letter to Sheriff Noble asking that the Irwins be shown consideration. J. H. West of Newberry, S.

wrote to Barton county officials protesting at the severity of the sentence and offering to pay for the stolen chickens. All members of the family were well dressed when they arrived in Lamar. The men were smoking cigars, seemingly untroubled by any misgivings regarding their fate. Barton county farmers resent the sympathy shown the family and point to the fact that no losses of poultry have been reported since their conviction. Prosecutor E.

L. Moore stated that persons who deplored the severity of the family's sentence did not realize the alleged wholesale extent to which their thievery had been carried. Ia a vicinity where poultry raising is a major industry, Moore said, the disappearance of from 100 to 200 chickens each night is a serious offense. NEOSHO MAN FIGURES IN "CHRISTMAS TRAGEDY" Among the "Christmas tragedies" should be listed the case of Richard Y. Jones Neosho, Newton county engineer and head of the American Legion for the Fifteenth congressional district.

Jones had a coupe which he had decided to trade in on a new car, and a deal already had been made before the county engineer came to Joplin Christmas night. While Jones was attending a dance at Memorial hall, someone stole the car. The day after Christmas he learned the car had been wrecked at Twenty-sixth street and Virginia avenue and stripped of most of its parts. The final blow came when Jones discovered the thieves also had taken two army blankets, a .41 caliber revolver, a flashlight, a sheepskin coat, a large assortment of tools and a pair of amber driving glasses out of the car. J.

M. Price Honored. Stella, Dec. surprise dinner was served in observance of the seventy-eighth birthday of J. M.

Price of Stella last Sunday. Those present included Mr. and Mrs. T. J.

Cox, Mr. and Mrs. Ernest Cox and two daughters, and Mr. and Mrs. Charles Cox and three children of Rocky Comfort, Mr.

and Mrs. fred Price of Anderson, Mr. and Mrs. Virgil Price of Cyclone, Mr. and C.

Allison and son of Goodman, Mr. and Mrs. H. S. Naremore and two daughters of Simcoe, Mr.

and Mrs. John Broaddus of Montana, Mr. and Mrs. W. C.

Owsley and son of Joplin, Mr. and Mrs. W. J. Owsley and four children of Goodman, Mr.

and Mrs. W. G. Williams of Stella, Mr. and Mrs.

John Brock of Rocky Comfort, Miss Anna Brock of Stella, Oren Marton, Mrs. P. H. Smith and Mr. and Mrs.

F. O. Smith of Joplin, Mr. and Mrs. Claud Cook and two children, Mr.

and Mrs. Dewey Edmonds, Jack Edmonds and Mr. and Mrs. O. H.

Grickland and son of Stella, Mr. and Mrs. N. T. Beeler and daughter and Jack Beeler of Baxter Springs and F.

Weseman of Chicago. To Keep 'Km Quiet. Mexico City, Dec. The government has been requested by a group of professors at the National University of Mexico to rule that the jugular vein of all dead persons be cut before burial. Examination of several bodies in the cemetery at Guadalajara showed that the dead were lying face downward, indicating that they had come to life and turned over in the coffins.

"Breathe Easy! We Ain't I Monkeys No More!" A scientist headman at Des Moines has declared we are fifty million years removed from the apes and are free from the ape taint. Maybe he's right, but sometimes when we look at some of our fellow men we begin to doubt. Anyhow, there should be no monkey business when cold weather comes around. Have those broken panes in your car or home replaced by us at once! Sun-Proof Paint, Brushes, Varnish jl 817-19 MAIN "Has Served You Since 1886" JOPLIN, MO. PHONES 787-788 Miami, 136 N.

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