New Britain Herald Newspaper, January 20, 1923, Page 13

NEW BRITAIN DAILY derly way up from depression inte " prosperity, we weuld be atiempting # short out. We would be trylug te vvade the Wil end of our quela of depression. There would be a set- back which would last until that que- & was completed, AL the meament, there is no sign of such inflation, The indications are that the remaining fragment of the allotted depression will be wiped out in due course; and with a clean slate we shall be ready for the next period of prosperity, “Will eur next period of prosperity be big or small? The question is pe- culiarly diffieult, After a big period of over-expansion, a big action, it is practically eertain that there will be a big period of depregsion, a big re- aclen. Knowing the action, you ean forecast the reaetion—hut the rdle is hard to work bhoth ways. To illus- trate, If you streteh a spring a eertain amount you ean forecast approximate. ly what will he the rebound, DBut you can't, so easily foretell how far the spring will be stretehed the next time, Henee, periods of prosperity or aetion are far more diffioult to fore- cast than periods of depression or re. action “However, we know that there is a MYTHICAL BUSINESS CYCLE SHOULD NOT BE INVESTMENT GUIDE, BABSON Wellesley Hills, Masa, Jan. 2 1|tuates in three.year periods or any don't know which is more perilous: to | other fixed intervals The real prin- disregard the business cycle altogeth- | cipal of the business mevement is that er or to get a smattering of it with. | of action reaction. Namely, a out really understanding i, says|period of over-expansion tends to bhe Roger ‘'W. Babson, in a statement is. | followed Ly an equivalent peried of sued today, “Many executives think |depression, And when I say ‘equiva- they have got the business eycle by|lent' I am taking into account the two the tall and that their fortunes are|factors, duration and intensity, Mod. made, These superficlal thinkers|erate business activity prolonged for who have picked up ‘the business|several years is equivalent to extreme eycle as the latest cateh.-phrase, are|activity of shorter duration simply playing with edged tools and “To take the latest example, there are going to get badly eutt. was & period of over-expansion ecov- "It is astounding how the public|ering the years 1916.1919, This would has taken up the idea, From boot- [tend to be balanced by a compensal. black stands to international confer-|ing peried of depression, Hut this ences, the latest fad is the business|compensation might take a variety of eycle, If it were merely talk, little|forms, If there had been a prodi- harm would be dene, But many|gious and excessive crash in 1920, business men, bankers, investors, and |wsting only a year, this would have government officials, are making real | been sufficient compensation, t commitments on the basis of an im.|would have offset four years of over. aginary cycle, It is high time that|expansion, Or, if the deeline in 1930 somebody get up in meeting and do|had been trifiing but dragged out for some plain talking, and tell people|years to come, this also Would be suf- | cenoral tendency toward equality, In that we are all sitting around a pow- | ficlent compensation, What actually [oiher words, in the long run, periods der keg, if we continue to cherish|Lappened was a wharp decline, not the | of prosperity tend to bhe about equal, this delusion of a fixed gycle, worst imaginable, but still & ®evere |mhey vary greatly in duration, and “Btrictly speaking, thege s no such|drop. The period has already extend- | they vary greatly in intensity. TBut thing as a business cycle," continued [ed more than two years, Consldering |the intense periods are usually short, serious blunder |Loth the seve of the drop and the | ang the mild periods are usually long, to assume that there will be three|time that has ®lapsed, it is plain that | 4o thay the area or mass is remark- y«=# (or other fixed interval) of over-(we have nearly paid the bill in full. |aply constant. Though the form of expansion and then three years of de-| *By ftsclf, time is meaningloss. The |the next period of prosperity is still pression, followed. by another three|question whether depression has last- | yndetermined, we know in advance years of over-expansion and another|{ed a month or a decade, has no sl |with reasonable assurance that its three years of depression. To nine|nificance, whatsoever, By itself, In-|aren op mass will be approximately people out of ten this is what the|tensity means nothin The question |that of previous periods, Shortly business cycle seems to mean, a per-| whether deprossion been drastio | gerer I‘ has begun to develop there fodic procession of booms and bumps, | or trivial has no significance. How-|may he a clue to its probable form, cach lasting the same number of | ever, when these two are combined, |whether intense and brief, or moder- years. There Is absolutely nothing in |when you get the product of time and (ate and prolonged, this idea, and any executive who at-|intensity, you are on a sound basls.| “Resides this principle of action tempts to base his plans thereon will | This—and this only — Is the true | and reaction, there is another feature probably ruin the enterprise for which | measure of depression and the real in- of the business eyele that can safely he is responsible. The warning ap-|terpretation of t)’ business cycle, be applied in practical ways, Every plies also to bankers, investors, and “At the present jungture, What|huginess and every locality has its statesmen, would be the reswit of sudden and|own particular place in the cyele, The “My advice is to get it out of your|reckless inflation? This would mean | hond market, for example, is usually head immediately that business fluc- | that instead of progressing in an or-|gar in the lead, declining or advancing before other factors show a change of trend. The stock market also has a pronounced lead. Though not 504 the security markets, TN, | PUTNAM & CO. | Members Now York Stock Eschange Members Rartford Stock Exchange ¢ (Successors o Kichier & Oo) 1% Stanley F. Eddy, Manages 51 West Maln S, Tel. 2000 135 ) 175 I LY 1225 122% 152 1w | Am Weal ., - M% " Anaconda Cop . 4T% aTH Ateh Tp & 8 ¥,101 101 ALGuif & W1l 2 N | Baldwin Loeco .134% 144 Balth & Ohlo .. 1% i | Beth Seel B, ... 624 1% | Can Pacific , 42% Ches & Ohio ” | | 2y 824 Y | 2y LB Ty |Am Can | Am Cotton OII |Am Loco Am Bmit & Ref |Am Tel & Tel | Am Tobaceo .. 2y 1% 122 We Offer 75 American Hardware Corp. 50 Stanley Works. JUDD & CO. Members New York Stock Exchange MEMBERS HARTFORD EXCHANGR HARTFORD: Hartford-Conn. Trust Bidg., Tel, 3.6329 NEW BRITAIN: 23 West Main St Telephone 1818 Armour & Company, of Delaware 7% GUARANTEED PREFERRED STOCK Guaranteed as to principal, dividends .u'-muu fund by Armonr and Company of Ilnois, Authorized $100,000,000, To be presently issued $60,000,000, Par value $100, Dividends quarterly January 1st, cumulative from Janu- ary 1st, 1923, Preferred as to assets and dividends. Redeemable as @ whole or in part at 110 and acerued dividends on sixty days' notice, Listed on Chicago Stock Eachange. Application will be made to list the stock on the New York Stock Exchange, Chile Copper . Chino Copper Corn Prod Ref .12 Cruelble Steel , Cuba Cane Sug Endicott-John Eria .. e Erie 1st pfd ... Gen Motors Goodsick BF Gt North pfd. ., Inspiration Cop. Interboro Con Inter Con pfd .. Int Mer Marine, Int Mér Mar pf. Pacific 01 .. Int Nickel . Int Paper 2% Kelly Spring T'r 40% Kennecott Cop.. 35% Midvale Steel 28 ‘ Mis Pac Charles Lerner of Baltimore paid a|N Y Cen bet by washing his wife's lingerle in[N YN H & H the street. Neighbors cheered him on,| North Pac P Pure Ol 3 Y { pression was due and how fast it was {‘::nAll? r;..& T ::_ % being worked off, and knowing also Y his relative position in the eycle, the l";l:;rzqogr:;)“ v retailer could estimate very closely Reading P when his turn was coming. Rep I & ‘s “To .illustrate the real mcaning of Royal D, N Y the husiness cycle, one of the best|g o000 par analogies is to compare it with elec-| g0 " pacine . . tricity. Call prosperity electric pow- % Jarnings from the properties which this Company is to acquire from Armour & Co,, of Illinois, for the six-yeay period ending October 1, 1921, after deducting all prior charges of the new Company including taxes and depreciation, averaged over 2% times preferred stock divi- dend requirements. Notwithstanding the adverse conditions prevailing Auring the first half year, not earnings for the first eleven months of the calendar year 1922, on' the same basis, exceed these requirements. Net tangible assets of the Company, after deducting all indebtedness, k) 89 % amount to $125,359,000, and net current assets.alone arc $60,424,000, A few more days to open up that Xmas Club— Be Sure and Start Your Membership Here At This Bank for 1923. |prompt as |building is somewhat in the van as compared with other iines of business activity. Near the other extreme is retail trade, which is a laggard both on the up-swings and the down- swings. Comparing different sections of the country, the manufacturing centers tend to lead, and the regions of production of raw materials tend to lag. Comparing the physical quan- tity of business with its dollar value, quantity advances or declines before value. In a store, the number of sales' slips (physical quantity) tends to decline before the cash register readings (amount of sales in dollars.) In a construction industry, the num- ter of permits tends to decline before their value in dollars. *'But the thing of real importance is not merely to know this sequence— which is a fairly simple proposition— —bhut also to' know how fast the per- iod of depression or over-expansion is being run off. ¥or example, carly in 1920 the stock market turned down. The retailer who noticed this reversal and attempted to estimate when the lightning would strike his own business would have been at a loss to set the date. But presently when general business sank below par and began to sweep out an arca of depression, then the retailer was ahle er and suppose that you are entftled to 10,000 kilowatt hours. If you run your outfit at 10 kilowatts you Jast 1,000 hours, Tf at 1000 kilowatts, you last only 10 hours. Or you can compromise at 100 kilowatts and last 100 hours. The word ‘business cycle’ is really not the word to use. ‘Cycle’ implies time. It is arca or mass which 1s the important measurement, There s no real need of either over- expansion or depression. We could run along at a steady trend indefinite- ly, with cycles pragtically eliminated. The principle of action and reaction is absolutely sound, but the populag conception of the cycle is both un- sound and dangerous. “To be, concrete—business is now statistically at normal. By the so- called ‘business cycle’ we are at a bad center. The Babsonchart shows this very clearly, But this it no reason why we must stay there or why the ‘next movement will not be for the better or for the worse. It all de- pends upon how we act—act toward one another and act toward the rest of the world. When greed is enthron- ed we are headed for depression— when service is in the saddle we are headed for prosperity. If there was less talk about ‘business cycies' and more about ‘business ethies' it would South Rail L B0% Studebaker Ca..115 Texas Co 45% Texas & Pac .. 213 Tob Prod .. . 81% Trans Ol ...... 11% Union Pac ,.... U 8 Fool Prod. U 8 Indus Also.. 65% U § Rub Co ... 601 U 8 Steel ... #0614 Utah Cop 641, Willy Overland ™ Miad States Oil 11% Nat Lead ... 126% Aetna Life Ins. Co. ... Am Hardware Am Hosiery ...... . Bige-Hfd Cpt Co com 136 Billings & Spencer com 12 Billings & Spencer pfd Bristol Brass Colt's Arms . . i Conn Lt & 'Pow pfd .. Eagle Lock “afnir Bearing Co Hart & Cooley .... Hfd Elec Light Landers, . J. R. Montgomery com 90 The proceeds of this financing will be turned over to Armour & Com- Iliinois, and will be used to retire bond issues amounting to ) and for other corfporate purposes, Price $99 per sharve and accrued dividend, “when issued.” Thomson, Tfenn & Co. NEW BRITAIN New Britaln Natioual Bank Bldg. 10 Ccntral Row Telephone 2580 Telephone 2-4141 Members Members Hartford Stock Exchange New York Stock Exchange Donald R. Hart, Mge. 50 Shares'NORTH & JUDD 50 Shares LANDERS, FRARY & CLARK 50 Shares AMERICAN HARDWARE 50 Shares STANLEY WORKS COMMON ‘We Do Not Accept Margin Accounts, JOHN P. KEOGH Member Consolidated Stock Exchange of New York J. R. Montgomery pfd 108 NBGas...... .o 38 N B Machine .. N B Machine pfd Niles-Be-Pond com . North and Judd Peck, Stow & Wil Russell Mfg Co .. Hcovill Mfg Co . Southern N E Te! Standard Screw .. Stanley Works ... Stanley Works pfd Torrington Co com . Traut & Hine .... Travelers Ins. Co Union Mfg Co .. to forecast. Knowing how much de- 50c To the Burritt Savings Bank: Enclosed herewith find 50 cents, on ’noipt of which you“are to open, an account under my name, to the value of one (1) dollar, This coupon, worth 50 cents, represents the differcnce between my payment and the amount for which you will credit my savings ac- count. I agrec to waive the value of this coupon, if I fail to depesit an additional sum in the Burritt Savings Bank, or if 1® withdraw my original deposit within the next six months. v be better for all of us. Waterbury STOCKS N?'#m Danb: Middletown BONDS Springfield Direct Private Wire to New York and Bostos HERALD THRIFT COUPON G. F. GROFF, Mgr.—Room 509, N. B. Nat'l Bank Bldg.—~Tel. 1015 50c Jan, 17, 1923, The Hartford-Connecticut Trust Company Corner Main and Peur] Streets, Hartford, Conn, Capital $2,000,000.00. Surplus Funds $2,000,000.00 Safe Deposit Boxes, $5.00 and upwards, Scttlement of Estates. Foreign Exchange to all parts of the world. LETTERS CF CREDIT — GENERAL BANKING Bank by mail. It is safe and saves time. ) 8. Treasury—Balance, $410,091,770, NAME .. iviiennennnians Grapes and other fruits that have been difficult to ship may now be taken across the country after a satu- | ration in a combination of carbondi- oxid and other inert gases. The Burritt Savings Bank Is Out For A Record - Of New Accounts, During 1923 This program is not entirely selfish as we are getting many new accounts without special effort, having opened an average of two hundred and fifty per month for the past three months, but it is intended to induce the Thrifty population of this city to put their savings in this first class Mutual Savings Bank. This Bank has protection of about $300,000 to its deposits of $3,600,000 which is 8% of its deposits. This amount of surplus assets places the Burritt Savings Bank well to the forefront of Mutual Sagings Banks in Connecticut in percentage of surplus as- sets to deposits. It is paying 414% interest to depositors and strengthening itself through surplus earnings each year to the extent of from Thirty to Forty Thousand Dollars. If you want a good interest return on your Thrift Sav- ings, coupled wijh first class protection, open your Savings Account during Thrift Week, or any other week during 1923 with us. » Burritt Savings Bank Cor. Church al}d Main Streets. i Open Saturday Evenings