| Show Economist Explains lams What The Trouble Is With New Engl England's nd's Textile Mills Special DI Dispatch BABSON PARK Mass M ss Aug I Hoger 3 Hoger W Babson Eabon today re- re returned re returned turned from a x trip through New J England the principal mill centers with Ith especial reference to the outlook lie H visit visited d cotton mills woolen mills and shoe ho rae rae- factories fac factories tories His complete statement Is Isas isas Isas as follows While traveling through some of the manufacturing centers ot of New England I have ha been very ery force forcefully Cully struck by certain fun fun- fundamental fundamental fun fundamental conditions which exist throughout our country toda today probably the tho results result of ot which nr ar now probably being first felt hero here In New England Therefore I want to write writ this letl letter r to you pm- pm em emphasizing these conditions condition which I belle believe may prove prose very harm harm- harmful harmful ful CuI to our industrial and nd finan finan- financial financial cial life lite OWNERS OVERS GIn I I havo have heard that turing manufacturing conditions condition In New Now England were dull but I 1 had no Idea IdEO as asto asto asto to th the general pessimism until this recent trip Only a few rew mills I are arc running full time many mills shut down altogether and the tho maJority y operating but part time Mill owners are ar discouraged stockholders are arc sellin selling their se securities te- te Securities and many of the work work- workers workers ers are arc leaving for other parts ot of the tho country country- Of Ot course our I statistics statistic show that a similar situ situ- situation situ situation to a more amoco or less lesi limited extent exists In other sections of oC the country but I have havo not per per- personally personally per personally witnessed such marked changes as ns I 1 hive have In many of oC the tho New England manufacturing enters centers Having Basing been brought up In Massachusetts I Instinctively notice changes hero here more than elsewhere I am m still a bull on New England for the long pull but ono one cannot be honest and shut his eyes to the present situ situ- situation situation atlo I UNION U-MOX LABOR DOn BLAMED Various reasons are ar given for Cor these present dull conditions I almost universal universal- universally universally ly Iy claim that these troubles are duo to union labor They do not object to union wages wag but to the tho I output lax discipline and loss Ions of morale which a highly I unionized community seems to un- un unconsciously un unconsciously consciously develop The Th labor leaders naturally naturally det defy this as- as as and Insist that changed conditions and changed styles style arc aro responsible for the present mill situation These heso labor leaders I point to the tho tact fact that people now prefer preter clothes of ot rayon royon rather than of ot cotton or wool while the automobile has changed changer the th mar mar- mari market market market i ket for shoes Personally al- al although a al although though granting that nil alt the above reasons are factors In the situation I believe that the tho real difficulty with the New En England land mills to be with their manage manage- management management ment When the owner of ot tho ho mill lived In the community where here the mill was located and personally worried about its successes he had no labor troubles and was usually y prepare prepared 1 for changing conditions Both Doth labor troubles and a as to hanS chang changIng Ing conditions are primarily Ul the results of absentee ownership The Thereal Thereal Thereal real difficulty with the New In- In Ingland England En England gland cotton and woolen mills I 1 that one Is obliged to hod hold a 0 stockholders meeting In a local cemetery to get a quorum As a result the th present of oC these corporations ha have vo no stock stock- stockholders stockholders stockholder holders holder to hold them to account and hence these directors directors have o become careless and Indifferent to theIr trust When directors again recognize their responsibilities the Industries of New Now England will again boom In the th mean mean- meantime meantime meantime time corporations corporation should avoid having too many directors who are SYSTEM Rc il prosperity exists only oaly where production and consumption consumption consumption tion balance I Prosperity does doe not depend upon the th amount produced produced ed or the tho amount consumed so long as a everyone Is employed Ideal conditions exist when there Is a balance with neither a short shortage age nor a surplus of labor Econ Economics differ as to 10 which must come first tho the demand for goods or the supply of ot goods foods but to toha ha have ve a 0 constantly Increasing re- re reserve reserve re reserve serve production must exceed consumption Yet our entire ss- ss system tem tern of education has h s been created d to Increase consumption rather than to Increase production Al- Al Almost Al Almost most the whole effect of sending a aboy aboy aboy boy or girl to school Is to In- In InCrease increase In Increase crease his or her wants without creating within their hearts a desire to serve and produce A graduate graduato from high school de- de demands do d mands mands more moro than a n graduate graduato from grammar school while a graduate graduato from college has moro more expensive tastes than a graduate from Crom high school Considering the th tremendous increase In high school and cot cot- college col college lege graduates It Is only natural that Industries should now be feeling the tho effects of ot our new and Intensive educational pro pro- program pro program gram Of course under certain conditions we w might need to edu cato cate people with lIh the tho purpose of snaking making them consumers but this Is not tho the need today American Industries are aro not today da suffer suffer- ing because there thero Is no demand for tho the goods but rather because the price pric of the th goods goods- goods 13 It so high that people cannot afford to buy them Tho The time lima may soon como come when our educational program must be directed to Increase the tho desire to produce product and thus lower the cost of production the cost ot of building and the th cost of oC hap hal hap happiness or cr else we must have havo a moratorium for a few years on education and shut hut down our hIgh schools and colleges until our mills and factories again open MUS MUST LA CE RALA CE Another industrial factor Is i i In i- i the tho increasing material and power which has been put Into the hands of people duro dur- during durIng Ing the past pa t 30 years without Increasing correspondingly their spiritual and discretionary pow pow- powers ers A As supply and demand must balance to have havo a 0 stable com corn commodity commodity market so 80 much material and spiritual power mustI must I cor- cor cor correspondingly Increase It we wo are arc to have a 0 stable civilization A boat Is much more moro liable to capsize whoa when all of Its lis cargo Is on ono one side and amid this Is I the tho situation to today day In many Industries and many communities So few have base been taught laught to work that production costs are now so o that buying power has been chocked Tho The automobile has tremendously increaSed Inci mans man's nin power to travel without the owner getting a 0 corresponding knowledge ot of where when It Is worth while for tor him hini to go the th movie has tremendous tremendous- tremendously ly Increased Increase 1 his power to see without correspondingly increasIng Increasing ing his discretion as to what Is I worth while v-hll v to see tee The Th radio has tremendously Increased the ability to hear without corres corres- correspondingly correspondingly Increasing the ability of oC selection election Democracy las has tre- tre tremendously tremendously tre tremendously political increased mans man's man poli- poli political poli political power without correspond correspond- correspondingly Increasing his hl hi spiritual pow pow- power power er or The people of this country have been given power faster fasler than they have hare been given dis- dis discretion discretion dis discretion and this accounts very largely for tor the present conditions In many Industries Tho The automobile problem sill not be solved by speed laws the movie problem will not be solved by nor wilt will will-tiro radio problem ba bs solved by the depart depart- department department department ment of commerce any more moro than the tho liquor problem ha has been solved cd ed by prohibition These will however be b solved when the school committee and the trustees ot of our colleges recognize that their first duty Is to create desires motives and tastes which will snake make people healthy happy and pros prosperous rous To do 10 this our educators must study the agri agri- agri agricultural agricultural cultural Industrial and financial needs of the nation and direct their educational work to CuI fulfill fill this need changing their courses as conditions and needs change chanc The Tho need of oC the tho hour I Is to to our young oun people a 0 desire to be beof beof ot of service to produce and ond save Otherwise there Is I bound to be bea bea bea a a crash crosh INVESTORS OPPORTUNITY When this crash comes it will willbe willbe willbe be the tho Investors opportunity It may come suddenly like a panic or it may come slowly In the form formo ot of a gradual but constant decline ne In security values The latter has been the situation In the case of oC the New England mill stocks Borne ome da day most of oC these mill stocks are coming back again Some ot of o them have havo already reach reach- reached reached ed their low figure CIure Without doubt the mill stocks of ot N Nw w Enand offer a greater opportunity opportunity for profit to the Ion long pull speculator than do the motor of ot the th central west In- In In Investors however ho should be sure to buy the tho stocks of ot companies which lay up u a a surplus during good years ears and of ot companies which are arc being operated by their real owners not by a board Loard ot of dummy directors As As to present business con con- conditions conditions conditions the cool weather of ot the spring and early summer was s a retarding factor but recently the weather has been more seasonal and business has correspondingly prof prospered ered It i Is not cool weather nor hot weather per so to which businEss needs but rather busi busi- business busl- busl business ness needs normal and season season- seasonable seasonable able ablo weather This Is shown graphicallY by the which now nosY stands at S 8 per cent above normal with indications that it may hold around he here her o for some come weeks to come Copyright 1926 1326 Publishers Publisher Fin Fin- Fin Financial ancial Bureau Dureau |
