Show Babson's Business and Financial Forecast FOI Given For Year Ahead By Roger W. W Babson I Next Net to the Russian situation President Eisenhower's condition will be of supreme importance What its influence upon Russia Russi will be nobody knows It probably probably probably pro pro- bably will not affect general genera business I believe that for some som sometime sometime S time our President has not been beer making important and policies much to his disappointment hi his recommendations h have a v e been largely ignored The major ef effect effect ef- ef feet of the Presidents President's condition will be Those close clos to the President for both friendship friendship friendship friend friend- ship and political reasons ar are L hoping for his recovery both both inh in h h health alth and in memory Others Other In charge of the Republican party par par- ty tr anxious about his possible e incapacitation or death would like to see him resign and drop dropo dropout o out t of the in order to te give Vice Vice-p Vice president Nixon a good buildup in the hope of reelecting reelecting reelecting re- re electing the Republican party again in 1960 For evident reasons the Democrats Dem- Dem Democrats Democrats Dem Dem- are hoping that Vice- Vice president Nixon will not have an opportunity to function as oilS s president before the coming el ele el- el e Therefore President Ei Eisenhower's Eisenhower's El- El condition could greatly great great- I ly ly- influence the influence the political situation situation situation situa situa- tion during the next few years This would cause uncertainty and retard large corporate expansion ex expansion ex- ex programs as well as consumer buying Russia Does Docs Not Want War WarI I I cannot believe that Russia wants W World rid War III in fact I I Iam am confident that R Ru Russia u s s i a awill awill will go t to some lengths t to avoid World War III In case of any retaliation by us Russia would suffer great loss losses s. s Moreover if Russia has any hope of conquering conquering conquering con con- our country she certainly wishes to preserve our cities industries and other valuable val val- assets Russia has land enough now it is our industries which Russia wants This also applies to England and Western Europe as w well as the United Stat States s. s Therefore my forecasts r for far r 1958 are aie as follow 1 The pres present nt cold war will willbe willbe be intensified during 1958 This will increase fear of war which could greatly affect retail sales S 2 2 Russian policy will be aimS aimed aimed aim aim- S ed at securing control of t the h e United ft States tes the countries of Western Europe and and the Middle infiltration East ast by by 3 3 The Th cold war costs the United United Un Un- States billions of dollars anS an an- an S This can be paid for forS only through rough increased taxes or S inflation n or by the adoption of the Hoover Commissions Commission's recommendations rec rec- S for radical econ- econ ff omy my my i S 4 4 Pro Profits I f i t s 5 will be further b a ed during 1958 as a re re- re suit sult lt o of higher costs cost and pressure pressure pres pres- S. S sure for lower prices I I 5 Competition at all levels will increase during 1958 l 6 Only more advertising ising by byboth both manufacturers and retailers ers will enable nab e them to keep up upS S their present gross volume during durS during during dur dur- ing 1958 S 7 Failures will Increase InS in S 1958 These will apply mostly to sn small ll concerns but some some one companies in the of the big ig Dow Jones Dow Jones Averages may colI col col- 0 lapse I t S 8 Predicting a lower total f me of business for 1958 I forecast compared with 1957 1 a n moderately lower trend on S average for wholesale commodity commodity commo comma prices E Ex Expect x p pee e C t a n gradual decrease in the of living during 1958 leaders will hesitate hesitate hesitate hes hes- labor 9 Wise 5 to fight for higher wages but but- butwill will try for shorter hours S pensions and other fringes 10 European countries w will I 11 1 rave have less to spend for American Americ n S goods and foreign trade will do- do dec decline de de- c dine cline in in 1958 compared with 1957 1 Money oney Outlook 11 Money will continue to be tight during 1958 for new borrowers bor borrowers borS bor bor- rowers who have not established S of credit a satisfactory line 12 Owing to declining deS demands de demands de- de S mands for funds interest rates S will decline in n 1958 f 13 Concerns with large num- num 1 S j A i ROller Roger W. W Babson bers s of employees will receive first consideration both by banks and by th the government nt 14 For fear of World War Wat III and due to declining business business busi busi- ness many plans for expansion of plants will pc Je e postponed 15 Money rates may be fixed fixed fix ed during 1958 by an economic dictator 16 Lower money rates will make it easier to sell term long bonds during 1958 17 The supply of taxable non-taxable state municipal turnpike and other Authority bonds will In Increase increase increase in- in crease during 1958 18 I forecast higher prices for many corporation bonds 19 Investors will continue during 1958 to switch from stocks to attractive bond issues fear of war war will rule all mar mar- 20 Bankers will fear that the government as a part of the will dictator dictator dic die cold war appoint a to direct the policies of all national banks the leading stock exchanges and investment dealers v Labor Outlook 21 There wilt will will willbe be a general fear that the government asa asa as asa a part of the cold war will fix wages in many industries and prevent further increases during 1958 22 The revelations brought about about about a- a bout by the investigation of the Teamsters Union may lead to important new labor laboI legislation 23 The Taft-Hartley Taft Law will not be repealed in 1958 and maybe may maybe maybe be made more severe Much however will depend upon PresIdent President Pre Pre- Eisenhower's physical and mental condition 24 Congressional attempt will willbe willbe willbe be made to eliminate the present present present pres pres- ent exemption of labor unions from mon anti monopoly anti poly laws 25 1958 will be a sad year for labor leaders I forecast that there will be bO an increase of un unemployment unemployment un- un unemployment employment during 1958 26 I 1 forecast that with t the h e possible exception of the auto industry there there- will be no national national national na na- na- na strikes during durin 1958 27 I forecast that automation will slowly increase during 1958 28 If wages wages wages' should be f fixed as a part of the war cold-war program program program pro pro- gram retail prices will also be 1 fixed S 29 All AU workers especially office of of- I Ilce flee fice workers will be more more efficient efficient efficient effi effi- in 1958 It will be more I difficult for the next group of college graduates to get good I positions positions' at high wages 30 For the past few years labor has been sitting silting in the drivers driver's seat Many industrialists industrialists industrial Industrial- and political leaders have f feared ared that the country is headd headed headed head head- ed d for a socialist t or labor gov gay A A. cheerful sign now Is 11 that such fears may temporarily temporarily temporarily at least be forgotten The American working man is himself him him- self elf becoming disgusted with too powerful labor leaders leader This Thi should be go good d news new to all al honest honest honest hon hon- est employers I. I Outlook For Real Estate 31 Land Land adjoining cities citie and towns towns' will increase in value during during during dur dur- ing 1958 This especially applies to small farms 32 Large commercial farms will vill continue to prosper during 1958 but the small farmer fanner will wil continue to suffer if dependent on farming 33 Under an economic dictator dictator dictator dicta dicta- tor farm farmers rs would receive no increased price pric supports If Continued on last las page pageS r. r S 4 Business Financial Forecast For 1958 1956 I Continued from page one farm prices are fixed they will willbe willbe be at lower levels 34 Large cities may continue to lose in population Large city real estate will sell for lor less for fear of Russian missiles 35 The growth of suburbs will continue although many houses now occupied by well-paid well executives executives executives exe exe- will be forced on t the h e market as their owners lose their present salaried high-salaried 36 Construction activity inmany inmany in inmany many communities will decline Older houses will come on the market 37 In many sections of the country there will be a greater demand for operative co-operative modern apartments than for single houses houses houses hou hou- ses although old r apartment houses will sell for less More young young people and old people will insist upon every modern convenience and upon locations not absolutely dependent on au au- au 36 W Well located e I 1 located woodlands will continue to increase in price This certainly applies to pine wood tracts especially in inthe inthe inthe the South 39 C Can a n a d I a n oil reserves should begin to recover in price unless there is rationing of gasoline gasoline gasoline gas gas- gasI I oline in the United States In late 1958 I 40 The most important factor in connection with re real l estate is the thO parking problem which is a curse of almost every city Suburban real estate and farms owe much to the automobile but the automobile industry is now reaching a stage where it could revolutionize present real estate prices We owe the automobile industry a debt of gratitude for our present prosperity It is a bellwether of general business for 1958 It is however like everything else subject to the business cycle and may be a cause of the next depression Another probable cause will wil be bethe bethe bethe the failure of one of the big corporations whose stock is among among among a- a mong the 30 Blue Chips of oC the Dow Jones Industrials 41 Speaking realistically the the hope of the United States and the world depends upon upon our spiritual relationships Only as we grow spiritually along with our material growth and military power can the world be kept in balance my final appeal is for the support of all churches of all denominations I and their ministers priests and rabbis who are carrying the torch of righteousness 0 n |