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Show BABSON PREDICTS SMM.LER BUSINESS t VOLUME IN 1950: BLAMES LABOR I innocent consumer chief sufferer y I - By ROGER W. BABSON 1 1 The total volume of business for 1950 will be less 1 v that of 1940 due primary to the unfortunate labor I mJflicts' Considering that innocent consumer will be I J, " .nief sufferer" and wilPe obliged to pay the bills, it I . ms too bad that labor triples should upset the applecart. . .,l - yr. r. -- - j 2. Even with the threats, there will be few wage increases in-creases during 1950. On the other hand, all 1 a b or negotiations negotia-tions take the minds of both the employees and the management man-agement off of their regular business. However How-ever these negotiations come out, they result in a loss from the standpoint of the country as a whole. 3. There will be fewer strikes in 1950 than in 1949, but there will not be fewer extended negotiations ne-gotiations which are very expensive ex-pensive in themselves. 4. The Taft-Hartley law will continue to stand thruout 1950 although many schemes for de-touring- this law will be devised. de-vised. 5. The great drive against the big companies will be for pensions pen-sions andor sick and other benefits. These will probably be helpful to the wage workers work-ers and may aid in ironing out the business cycle, but they will See BABSON, Page Four . 38. The cy real estate outlook out-look is uncertain. It should continue to hold firm thruout 1950 due to less available rental rent-al space caused by pulling down old structures to save taxes and to provide parking spaces. Owing to high costs and fear of World War III, there will be little inclination to build new city property. On the other hai:d, the continual movement out of our large cities in the interest of decentralization de-centralization may cause prices to soften. 39. There will continue to be a fair demand during 1950 for suburban real estate with a shading of prices for large pieces, but the residential construction con-struction boom should continue well into 1950. 40. The demand for large commercial farm acreage will be less during 1950, but small sustenance farms, especially those located close to established estab-lished communities, will hold up and, perhaps, increase in price. 41. There will be some decrease de-crease during 1950 in industrial and private building. The cost of such building will decline a little and the quality of workmanship work-manship will improve. There should be an increase during 1950 in publicly financed building. build-ing. 42. There will not be much change in business rentals during dur-ing 1950, but residential rents will average higher in 1950. Only as property owners are granted higher rentals' will there be more houses built for rental purposes. 43. Mortgage interest rates during 1950 will continue about the same as during 1949. 44. The growth in industrial pensions should help real estate es-tate sales in Florida, California, Cali-fornia, New Mexico and Arizona. of better grade in 1950 than hey were in 1949. 20. Markdown sales will continue con-tinue during 1950 as consumer spending slackens due to a de-. de-. cline n employment and other factors. , 21. The dol'ar value of all retail re-tail sales in 1950 will be moderately moder-ately downward, and the unit volume of retail sales will also be 'ess in 1950 than in 1949. 22. Less will be spent on new building and equipment by i stores and factories during 1950. , Foreign Trade 23. Our exports will be down during- 1950 and our imports will be up during 1950 comparing com-paring both with 1949. This will partly be accounted for by 'the devaluation of the English Pound and and other foreign I currencies. 24! Foreign credits will continue con-tinue to be granted during 1950 but some of these will be direct by American business firms and investors. If our government will get foreign governments to agree that such investments will be exempt from any NEW tax or other legislation by the foreign country in which the I investments are made, considerable consider-able progress would be noticeable notice-able along foreign trade channels. chan-nels. 25. American interests will have more competition from foreign producers of raw materials ma-terials and of manufactured goods during 1950 than they had during 1949. This will benefit ben-efit some American concerns, but be harmful to others. 26. Fear of war with Russia will continue during 1950. World War III will come sometime, some-time, but it will not start during dur-ing 1950. Those in large vulnerable vul-nerable cities should use these years of peace to get some small farm or country home to which they can go in case of war. Such places will be almost unobtainable un-obtainable when war actually comes. Deficit Financing 27: The supply of money will be increased during 1950, but the price of government bonds will not change much one way or the other during 1950. . 28. In addition to the anticipated antici-pated federal deficit the three billion dollars being distributed distrib-uted as insurance refunds to veterans will be mostly spent. , 29. Congress will not change the price of gold during 1950. Slock Market Most stocks will work up and down in about the same range during 1950 as during 1949. 31. Stocks of companies with assets mostly in- natural resources, re-sources, known as inflation stocks, should have the great, est demand. 32. There will be more -investment buying from income during 1950 ' and utilities and. companies making labor saving machinery may be more popular popu-lar than other industrials or railroads. 33. The wisest investors will keep a fair amount of their funds liquid thruout 19 5 0 pending the great break in stock prices which will come some day. Bonds 34. High grade taxable corporate cor-porate bonds bearing low coupon cou-pon rates should continue at about the same prices during 1950, but of course, they will sell for much lower prices when money rates increase. 35. 1950 will see a further fading off in certain tax-exempt bonds due to the new Housing Authority obligations to be issued during 1950. 36. The Federal Reserve will continue during 1950 the same general policy which it followed fol-lowed during '1949. 37. The importance of diversification diver-sification will be given more attention in 1950 and wise investors in-vestors will watch their bond maturities to see that they are either short or systematically staggered. Real Estate Hera's More About BABSON Continued from Page One be paid for by consumers. 6. It is hoped that all parties will begin to realize during 1950 that the real road to national progress is thru increasing pro-duction"and pro-duction"and efficiency. This is the bright light we see in the ' labor situation. Commodity Prices 7. Movements in commodity prices during 1950 will Vary with different groups of industries indus-tries and of products, but altogether alto-gether there will be a general lowering during 1950. 8. We, therefore, advise going easy on inventories. 1950 is a time to get out of debt and stay out of debt. Speculation in commodities should be discouraged discour-aged in 1950. 9. We believe that the cost of living index has turned down for the present. The average for 1950 will be less than for 1940. 10. Practically all retail prices will average less in 1950 than in 1949, notwithstanding the excess of money mentioned under 27, 28 and 29, below. Farm Outlook 11. The total farm income for 1950 should be less than that of 1949, which means lower prices on the average for wheat, corn, pork, poultry, eggs and certain da ry products. Farmers should diversify more in 1950, get out of debt and put their surplus money into savings, in preparation prepara-tion for the next crop failure. 12. The supply of certain canned vegetables and fruits (except citrus' should be great-( great-( during 1949. The prices of these products should fall off, bnrring some .weather, insect or blight catastrophe. 13. Poultry and dairy products prod-ucts will especially increase in volume during 1950 with prices, averaging less than 1949. 14. Farmers will continue to work to hold present subsidies. It is popular to criticise the vast 1 amount of crops which the government owns or is making loans on, but this surplus in storage may be' a great blessing when the next crop failure or war comes. Taxes 15. The federal budget will be increased during 1950 over that for 1949. 16. Overall federal taxes will not be increased during 1950 and there may even be some readjustments re-adjustments to encourage venture ven-ture capital. Moreover, some of the nuisance taxes may be eliminated or reduced. 17. The long term capital gains tax of 25 per cent will remain unchanged. 18. There will be many increases in-creases in local and state taxes and more reaching for relief by ''sales" taxes and other forms of raising needed funds. Reta.'l Trsde j 19. Goods on counters will be1 General Business 45. Many business concerns find their operations sliding down toward the break-even point. There will not be as much margin between costs and selling prices during 1950 as during 1949. Unemployment will gradually increase due to the installation of labor saving machinery and other causes. 46. Military preparedness will continue to bolster general business bus-iness and employment during 1950, but this is not a healthy develonment. 47. Excluding government-owned government-owned commodities, the physical phys-ical stock piles of manufacturers manufactur-ers will remain about the same during 1950 as during 1949. Politics 48. 1950 will be an election year. The Republican party will remain in the dog house. The administration will continue con-tinue to talk radically against Wall Street and the so-called "Selfish Interests," but at heart the Administration will be. fairly conservative. Its bark will be far vorse than its bite. 49. The Administration will continue to be sympathetic to organized labor unless someone like John L. Lewis goes too far. In that event, such a man will be made the whipping boy, but with the consent of other prominent prom-inent labor leaders. 50. The Congressional elec-'ions elec-'ions of 1950 w.ll not change lhe political status of congress to any great extent. |