New Britain Herald Newspaper, December 30, 1922, Page 13

P e e e YOU CAN MAKE MONEY DURING THE NEXT 12 MONTHS, SAYS BABSON IN HIS NEW YEAR'S PREDICTIONS (Quotod Locaily Only by The Horald), Wellusley Hillyy Mass,, Dee, 80, “What's going to happen in 102§7" ‘That question is uppermost/in the minds of 1,000,000 American business. men and investors who are facing the problem of making plans for the New Yeéar, Bigns are not clear and the usual barometers seem to contradiet one another, In the face of this general confu- slon we had best fall back on the facts and figures, After a thorough study. of the fundamental conditions that govern our market. Roger W, Babfon today Issued a statement which clears the alr apd furnishes a basis of fact for your plans, “We are now at a point In the busl- ness cycle,” says Mr, Babson, “where you can get almost as many different opinions as there are business men. Bome are very bullish for the coming year, and others cannot see much hope for business. The reason for such a situation s that we aro at present neither at the top of a hoom nor at the depth of a depression, If we were at either of these extremes there would be no question of what the next move would be. At is it, we are about half way between them. “During the past year United States business has steadlly advanced until the average for the whole coun- try is what we usually call ‘normal’ Lusiness. Having advanced thus far, shall we immediately continue into a great prosperity period or shall we g0 Into another period of depression and poor business as some predict? “If you will only remember the five years preceding 1921 and recall what an enormous orgy of expulsion existed vou can see for yourself that it will take some time to-get a proper foun- dation for really good business. We danced during those years, and now we must ‘pay the fiddler’ his complete bill. Business has really been like a convalescing patient. Everything will go well with the patient if he does not try to get out of bed too soon. If he tries to overdo he will have a relapse. We now have passed the most painful part of the readjustment. The crisis is over, but a process of cost reduction and rebalancing Is ne- cessary. Price Spread is Wide “Today a wide disparity exists be- tween prices of different commodities and particularly the spread between producers’ and consumers’ goods. This is a brake on trade. One-half of the people cannot earn enough to buy the goods that the other half has to sell. There are one hundred and six mil- lion people in the United States and £0 per cent of them get their living from producing or distributing raw materlals. It has thus far been im- possible to reduce the prices of fin- ished consumers’ goods to meet the cuts on these raw materials. The pur- chasing power of these people is out of its natural proportion. “It s not entirely a matter of re- ducing wages, although labor costs are a large factor, nor is it entirely readjustinent ean come In only one way-—drastic competition, All this will take further time, “Does this mean that there will be no opportunities in 19237 Not a bit! There will be just as many chances to make money as in any year you ever lived, It will be possible for you to make as much during the next 12 months as in any year of your busi- ness life, but it will not be along the lines which made money in 1919 and 1920, nor in any other boom year. The profits in 1923 will come by giv- ing attention to detalls, by stopping the little leaks, by saving here and there through new labor-saving in- ventions, and most of all, by devising new and more economical means of distributing goods. This was not at all the situation during the business boom. Then the man who stopped to prevent small leaks found himself Jorlty at present are ulmut 156% above thelr levels & year ago, A year from now we shall probably find them av- eraging at about the same level they stand today, In between, there may be a further rally from the low of 1922, and agrleultural products cer. tainly should do bhetter.” Earnings Will be Higher “Earnings,” continued Mr, Babson, “should average somewhat better than In the year just passed, A sur- vey of 100 leading Industrial com. panies, recently made by my organi- zation, showed that in 1019, 06% of these compafiles made a net profit, while only 4% showed a deficlt, In 1921, the number of firms which could show a profit was cut down to 489%. Over halt, or 620 of these in- dustrial concerns lost money on their year's business. 1922 has witnessed a change from red ink flgures into the proper solution of the present la- bor shortage, “The real solution 18 not the repeal of the present immigration law but rather the repeal of the Contract La. bor law, for as long a perlod as the 8% law remalns in foree, This would make It possible for employers to promise selected foreign workers om- ployment before leaving their own homes, The moment that the {mmi. gration law Is repealed the Contract Labor Law con again be applied, “There should be no great diffioulty In gotting ample supplies of bitumin. ous coal this winter. The car short. #ge 19 diminishing somewhat. Ample supplles of bituminous coal are being produced, suggesting lower prices, The mischief of this situation lies in the fact that it will again he to the advantage of both miners and opera. tors to close the mines for a time, The difficulties which brought on the strike last year have not been settled, There s serious danger of another strike in the soft coal fields. “Everybody 18 worrying about the LONG SWING BOND CYCLE caught by the momentous rise in prices and changes in general condi- tions. “Those days have passed. They were wild and merry while they last- ed. Now business has come back to earth. In most industries, an exces- sive producing capacity was created. During the boom, overhead costs were increased to keep up with an abnor- mal turnover. Today the amount of business has dropped back more near- ly to normal, but costs have not been proportionately reduced. Higher wages, higher rents, more expensive sales organization — in fact, nearly every item of expense is out of pro- portion with the amount of business done. “Instead of wild gyrations in the commodity markets, the average trend throughout the coming year a matter of inefficient management. No, the problem of high costs is not a problem of any one element; and should be more of a sidewise move- ment. Some commodities are high and others are very low, but the ma black ink figures, but the amount of net profits will not be large when the hooks are finally balanced. We are Just getting back onto the right side of the ledger. “The shortage of labor is one of the worst features of the 1923 out- look. The moment that business works up to average activity it be- comes impossible to get sufficient workers. This raises costs and in turn increases commodity prices and the cost of living. The immigration law is largely the cause of this short- age, This law restricts the number of immigrants in a single year to 3% o fthe total number of respective na- tionalities already in the United Gtates. Before the war we had an addition of a milllon immigrants a year. Now we are receiving less than 800,000 and at least 609% of these are women, children or other dependents. On the other hand, I doubt if the re- peal of this 39% immigration law is Up To and Including January 5th If you open an account, or deposit money on your old account, anytime up to Friday, Jan. 5th— your savings will draw interest at 42 per cent. per an- num, as of the lst. Start your Account Next Week. friends and customers. BURRITT SAVINGS BANK political situation. There is talk of radical legislation during the coming year. Most of this is merely the echo from campaign speeches. It may be a noisy year. Both the Conservatives and.the Radicals have a veto power, but neither is strong enough to push through any extreme measures of its own. The only kind of legslation that will really be enacted is that which will appeal to members of both groups. Already the Federal Reserve Board has issued a ruling, admitting a large amount of agricultural paper for rediscount in the Federal Reserve banks. The Muscle Shoals problem will probably be settled, cither by sale to Henry Ford or by development on the part of the government itself. The soldiers’ bonius will probably be enacted, although no agreement as to the terms or means of raising the money has yet been made. It is im- probable that there will be any in- We wish you all a Happy New Year. We have just finished the installation of 600 addi- tional Safe Deposit Boxes in our enlarged vault. It will provide just DOUBLE the capacity, and will lc a day will protect you—Come in and see take care of the steadily growing demand of our Where do you keep your Bonds, Stocks, Insurance Policies, Deeds and other Valuables? Athome where they are subject tofire and theft, all day and night or in one of our new Boxes? Safe—secure and where you know where to fin them. crease in the amount taxes, of business No Political Fear, “The political aspect has frightened many stockholders, but it Is entirely too early to be worrled, The thing to wateh is fundamental conditions, We are still in a readjustment period, This means that sooner or later we shall work toward hetter prosperity It is true that Industrial stocks are much higher than a year ago and are certainly not the bargains that they were, However, as I have already stated, certain lines of industry are just getting ready to go forward, The Industrial market will be ‘spotty’ but there are a great many issues that should do better in the coming year. “The rail group is, relatively, not 80 far advanced as the industrials, 1 do not believe ralls should be beught Indiseriminately, but the rail average will follow up the general market, I am much more attracted to the long- haul roads than to the shorter lines, The motor truek Is a feeder for the former but a competitor of the latter, Copper stocks have really not started yet, but the statistical position of the metal is far better than it has been for a long time. Coppers, certainly, are selling at bargain levels, Banks Are Strong. “Money conditions should continue good. There is no question that the banks are in a strong position. The Federal Reserve banks today have 40 reserves equal to about 76% of their note and deposit liabilitles, The reserve required is between 359 and 40%. Tt is true, that when foreign countries begin to get on their feet, it will be necessary to send much of this gold back. For the present, how- ever, this gold represents the basls on which a considerable expansion of credit can be built, It guarantees to us a relatively easy money rate, until heavy gold exports are resumed. Dur- ing the coming year, borrowers need have little fear of a lack of funds for all legitimate purposes, and this also applles to long-term money, that is, capital for permanent investment. (Continued on Following Page). PUTNAM & CO. Members New York ftock Exchange Members Rartford Stock Exchange (Successors to Richter & Co.) Stanley I, Lady, Muumw 31 West Main St, Tel, 2040 We Offer 50 American Hardware 30 Landers, Frary & Clark Members New York Stock Exchange MFEMBERS HARTFORD STOCK EXCHANGR HARTFORD: Hartford-Conn.’ Trust Bidg., Tel. 3-0329 NEW BRITAIN: 23 West Main St.. Telephone 1818 We Offer and Recommend Iurrmgtnn Co. Stock Thomson, Thenn & To. NEW BRITAIN WAL STREET STOCK (| = st = 252, Hartford 8tock Exchange New York Stock Eldl.’l. Donald R. Hart, Mgr. We. Offer: AMERICAN CHAIN CO. PREFERRED EXCHANGE REPORTS Quotations furnlshed bv Putnam & Company. ’[‘ H High Low Close Am Bt Sugar .. 37% 387% 37% To Yield Over % Am Can . 3% 13 8% WE DO NOT ACCEPT MARGIN ACCOUNTS Am Cotton v 18 17 18 Am Loco 128% 127% 121% Am Smelt & Ref 56% 556% 56% Am Sug Ref com 79% 79% 719% Am Bumatra Tob 28% 281 28% Am Tel & Tel ..123% 122% 123 JOHN P. KEOGH Am Tob .......150 150 154 Am Wool . 95% 95 953 w Meml?nr Consolidatead Stock Exchauge of New York An Copper . B0% 48% 50Y% 'aterbu Atch Top & S F 102% 102 = 102% Danburyr’ STOCKS Ba‘fn‘m AtGuit & WI. 21% 1% 21% |l pERON BONDS Ne ven Bald Loco ...... 139% 138 1385 iddletown Springfield Balt & Ohio ... 42% 41% 42% ety Both StL B .... 62% 611> 623 Direct Private Wire to New York and Boston Can Pacific ....144% 144% 144% G. F. GROFF, Mgr.—Room 509, N. B. Nat'l Bank Bldg.—Tel 1018 Cent Leath Co .. 32% 317% 32% Ches & Ohid .. T1% 71% 7T1% Chi Mil & St P 23% 2314 231 % Chi Rock Isl & P 32% 323 | Unlon Pacific ..138% 137% 138 Chile Copper .. 271 27% |United Frult ..155 164% 156 ghlm:}(,oppor iR 26% 26% {Tnételg lfier;qt 3 7:% 7:z 1:* on GRN-¢vioyy 121% 121% 00 rod . Corn Prod Ref . .mah 132 1325 | U S Indus Alco. 68% 68 68% Crucible Steel .. 71% 70 70 [U 8 Rubber 55% 563 Endicott-John .. 94% 841, 84% gmsh Scteel i 1::; 1::% Brie . ..., . 10% 104 10% opper Erie 1st pfd ... 15% 14% 15% | Willys Over ... 6% 6% 6% Gen Motors .... 147% 145 147% | Mid States Oil . 11% 11% 11% Goodrick BF ... 36 351 357% | Westinghouse .. 60% 59% 60% Gt North ptd .. 75% 74} 74% Insp Copper ... 36% 34% 35% \ (Putnam & Ooi;ld P, Inter Con ...... % 1 % et Inteb Con prds .\ - \1h I 5 |Actna Lite Ins. Co. 685 Int Mer Marfne . 9% 03 91 |Am Hardware .. 63 Int Mer Mar pfd 4415 43% 433 [Am Hoslery .. 50 AllisChaimers . 484 44% 4ok Bilings & :l:)tensgr e acific : 6 5% 4y Int-Nickel 13% 137% |Billings & Spencer pm 24 Int Paper ..... 62% 521 62% Bristol Brass .. . 18 Kel Spring Tire. 49 46% 49 |Colt's Arms .. . 24 25 " Kenn Copper .. 36% 361 367% Conn Lt & Pow pfd...112 116 Lehigh Valley . 70 693 69% lraglo Lock 75 Midvale Steel .. 28 283 | Fafnir Bearing Co . 87 Miss Pacific . 16% 16y |Hart & Cooley .... 82 N Y Central ... 9 941 9414 (Hfd Elec Light . 156 NINBAL 20 0k e nay et I or est.112 112 112 b North Pacific .. 76 41, 74% |1 R ‘Montgnmery pfd 105 Pure Oll 29% 7% 29% E = §}ff;hi.;é" suse 8B 3:%, A L01% 9 P m R TR fw NI B Mshlne B 600 st ol Pierce Arrow .. 13% 3 13% gg::};B;l:gngufit‘)lm Gt :: STl Peck, Stow & Wil 35 Reading o Russell Mfg Co . 90 Rep I & 8 . Scovill Mfg Co . 158 Royal D N Y !Southern N E Ty 130 ol O e Standard Screw ....... 300 ‘HD“”" Pacific Stanley Works .. . 60 61 Bouth. Hafl |stanley Works pfd ... 29 30 .fltudehfuk.er Co * | Torrington Co com . 46% 4Ty b il 2 |Traut & Hine . 18 20 Tex & Pacific . 21 204 208 I:};:le;:r;néom "22 71: Tobacco' Prod . $4 83% 84 SAyuneng Trans Oil ...... 14 13% 137% U. S. Treasury—Balance, $634,996,588, The Hartford-Connecticut Trust Company Corner Main and Pear] Streets, Hartford, Conn. Capital $2,000,000.00. Surplus Funds $2,000,000.00 Safe Deposnt Boxes, $5.00 and upwards, Settlement of Estates, Foreign Exchange to all parts of the world. LETTERS OF CREDIT — GENERAL BANKING Bank by mail. It is safe and saves time, United States Victory Bonds, due Dec. 15th, War Savings Stamps, due January Ist, and Christmas Club Checks Accepted Now For Deposit At This Bank, Where 4Y; % Interest is Being Paid Upon Deposits Savings Bank of New Britain Organized 1862 Resources Over $13,500,000