Show AUTO INDUSTRY'S EFFECT IS NOTED 1111 lI T II II I Emotions to Interpret I I Business Special D Dispatch patch I BABSON PARK PAUK til Fla a Jan 15 15 I Roger R W Dabson Dabon loda today discusses with wIth us the automobile industry I In which hl h so many people of oC every community are Interested He also I has something to Sit say about the I I outlook As AsIr A Mr Ir Dabson n with moat most economists t on I subJects subjects these se two his hi statement of today I Is very Interesting loc TWO GREATEST INDUSTRIES The two most Important Indus trios trie toda are the th automobile and the building Industries These two not only employ the roost most men but have hav the tb greatest ramifications tlona tion and Indirectly effect 1 the greatest number of o other bul bual bul n nesses Ees other Nothing other than some great war or earthquake earthquake- so 10 hurt generalS general business to- to today today to today day as a a severe break In either One automobile Industry or the Industry Moreover Ita If Ifa I a big biff break came In one on of ot these industries both would suffer surfer be he because II cause use they are very closely at- at allied al allied lied A chart of automobile pro pro- for Cor the past five years look looks almost the th same am as a chart chartoC of oC new cew building bu Whether Whither a man first builds A home horn and then buys an auto to get back and forth or whether hether he b buys buy an auto first and then builds a home In the suburbs to use It It do not Statistics however Vever do clearly dearly In in- in that both holh of thes these Industries Industries trIes move together This relation between the two Industries Is somethIng specially to 10 be remembered at the present time owing to 10 the recent decline In the price pric ot of motor shares Wall Wallstreet Wallstreet Wallstreet street Interprets this as meaning that a large larce number of o dealers found themselves at the tho end of 1925 1325 with a large number of ot enl sohl new cars and a tremendous number of or second hand cars can on hand Wall Wal street believes belle that thata thaia a stowing down of both bolh the th motor Industry nod and the buIlding bu Industry is s Inevitable for Cor 1926 H It If a great bleak bieak In these two IndustrIes should take place it would be a ablow blow to Detroit Detroit the center of oC o the lh automobile Industry and to New Ne York the center of oC building spec Let me here add how how- however ever that the danger dancer of oC o specula specula- speculation Lion tion in building bu is not so evIdent In most other cities as it is fa ir In liNew L New York FALLACY IN THEORY Market of arket letters letter of brokerage houses are ar sayIng that there soon should come a slump In the aulo aul auland and building bu Industries and it If so this will vilt cause a slump in general I buin ss I do not wish to go co on I record either for Cor or against this thi I as to automobiles s and I building It may be that both L Luv reached their peak and are inevitable In 1026 I Ido 1 I Ido do however hoe wish wih to make the th point that these industries do not nol del determine ermine general business con conditions conditions but that general business I I conditions determine tho the prosperity prosperity ty ot of these industries President I at the White House do not make mak makor or break business conditions but busIness busness conditions make mak or break p presidents at the White House No man Is so short as the theIlan Ilan who gets sets the cause and effect mixed up and substitutes one for Cor forthe the other Moreover the th failures of many business men are ar due to t taking the cause for the th effect and vIce versa There Thre need be no such thing liS KS overproduction o In either the th building or automobile Industries for Cor many years to come t who for tor the th past few Cew years ears have been ben stating that a tion point has haa been reached lu Ju these two ho industries have beEn because a technical sat sat- point 1 is Impossible Gen Ceo eral business is like a certaIn amount of ot water which will Carry I only a given amount of oC salt In solution but by Increasing the amount of oC liquid it Is always pos possible sl sible lo to take tak up more salt thel A certain volume of oC general business will absorb only a certain amount of oC new building auto production anti and manufacturIng in general I Without sn n Increase in general tu business H IL saturation point is 15 reached l no so that more building or autos cause a temporary overproduction but so long lone as general business Increases the sat eat eat- sat point rises proportionately proportionate- proportionate ly Henc Hence the Importance e of m many any of ot the great Industries On One th e other hAn hand l these primItive In In- In In at of ol themselves cannot pro pro- pro duc much tOuch In fact these primi primi- primitive tive li ve instincts Instinct were as a strong Krone cen con centuries tu nes ago aco when there were no m comforts Although dIre de- de dere Hire de-Hire si Ire re Is of oC primary necessity In sig d sisi g yet coupled with that Ic de tire dc-tire si re there must be other oCher materIal th ings In order to 10 bring brine about a r on These Thes material things In the case cas of the th automobile I b and aDd other allied industries are a re wages easy money and good bu b profits WATCH WAGES AND PROFITS There lire are three sources ot of purchasing p power The first source Is the income of or the agricultural I aud a nd Industrial districts Although i the t he farmer farmr is in business for tor him him- himself self s elf yet et we will group his u the general term lerm of wages wage 1 The he greater creater the wages waxe of the c the greater the th l ing purchasing og power and so long lone as the e arning of industrial and agri agricultural c cultural districts Increase so 80 long longI the motor industry and the I bul b Industry continue to to grow Thu T hu second source is Js the ability to t o borrow mone money When money I scarce scare and rates rAtu are high his his-h the thi p production of hom homps s automobiles a nd other things Is curtailed ac- ac ac c TIght money like un unemployment e employment cuts down purchasing pOwer p ower while easy money like g nod business Increases Ing i lot ng power The third source of purchasIng P power is business prof proC its lis i profits ts The Th business man is a lay lal lar-ish lar Ish l ab spender spener When he Is makl making g money mODEY he spends it easily and freely Creely When he be h is it not making money he be shuts down don sharply Many business men have not been makIng much of any profits dur duro during l ing IlIg og the past year ear The outlook Is I that they will make mak more prof proC profits its Hs i ts during 1926 INSTALLMENT BOGEY I The Th only fly In the ointment Is the tte Installment business which has been b e increasing so rapidly durIng the tho past n five fire ve years especially In inthe Inthe the automobile Industry We have ha on bankIng lug ing ins and employment but we w have on nc statistics which show the ex ox I tent extent of the Installment business We know that almost every home homeI has bas goods roods for tor which It has not I paid but to what extent this can can- cancer cancer cpr is eating Into Inlo general busl busi business ness no one really knows We e do know that it is a disease which some Mme day will require the pAtient to 0 have a severe severo oPt operation ration but whether or not the thc patient can go one goone year ear or five lve years ears before beCore the operation Is Js Imperative only the future can tell It IL Is true that fewer unsold goods are on the shelves Cs of merchants today loday than base ha been for tor many years but butare butare I are goods really sold until they Pore are paid for Cor Fundamentally does III it make any difference whether I the unpaid goods are on the I shelves of oC merchants or In the I homes of oC the purchasers UNDERSTAND In UNDERSTAND closIng lei let me PEOPLE urge readers tt tb I give elve more morp thought to the great Sta primitive instincts of oC man mau Sta Sta- Sta are useful and and my own brEad and butter depends on com compiling 1 piling an and l interpreting them hem But Dut everyone should realize that the I url l is ruled by feeling and anti not t I hy by figures One On business man efficiency may be b expert with card tiles flies manI ef- ef ef I systems and have an arI ar- array ar array I ray of oC collEge collece degrees decrees but may arl bea be ben bea n a failure because he h doesn't under understand stand the greAt treat human emotions hl make mak l the e worl world l go to around I may not have hare had bad even a hIgh school education but he lr makes a tremendous suc sue sue- cess because he lie understands men and women their hopes ambitions sympathies and disappointments disappoint disappoint- ments I an am often octen criticized for Cor to taiLing about religion and bust busl ness in the same breath but every year r I am more convinced that the emotions of ot which religIon primarily treat treats are the th basis of oC oCal olal al all growth bOI both material and spirItual Bank clearings railroad earnings and foreign trade trad may ma bu bl maybe maybl indicia of ot general business con con con- but they ha hano have no more mor to todo todo do with determining business con than a thermometer has to todo todo do with makIng the th heat of oC a ai i room Business conditions are good goodat at the th present time During 1924 the averaged a 6 per percent cent nt cc-nt below normal for tor the year rear H aver aver- averaged aged aEd 6 per cent above normal To- To Tady Today T day y the is 13 12 per cent t above normal Everything Indi cates that it will continue above normal during 1926 and it tr the In business does not cause smash 1926 1126 should be a better I than 1925 Let us all how however watch atch fundamental condl and remember that the world ruled by feelings and not by b Copyright 1926 Publishers Ft Fl Bureau DurAU 1 |