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Show POLITICS AND BUSINESS Roger Bnbson Discusses Effect of Business Conditions on Coming Election, Babson Park, Fla., March 2S, 1924 "How will the coming election affect business between now and next j November?" The question was putj to Roger Babson, business authority. V According to the Statistician any ' connection between general business and politics may be likened to that j of the tail and the dog. He insist3 In this case, however, that politcs is the tail and that the actual incidents in which a political tail has wagged 1 the business dog are extremely few ! and far between. j "Election years are supposed to! be poor business years," says Mrs. ! Babson, "but business history shows that election years are very much like other years, some good, some poor, and some about average. Most of the generalization about politics ! affecting business are not verified ' by the facts. Statistics indicate, J rather that general business conditions condi-tions have a marked jeffect upon the outcome of political issues. "If we go back to 1S84, for instance, in-stance, we find an election being held during a business panic. Failures Fail-ures were high in both number and liability, and unemployment was general. gen-eral. The public was dissatisfied with business conditions and a change seemed preferable to the con. tinuance of existing ciroumstances. Grover Cleveland, Democrat was elected to succeed President Arthur a Republican. 'Four years later in 18SS we find general, busfiness conditions about v0l.-age. .... Under these circumstances circum-stances fundamental business condition condi-tion did -not. affect the political' situation materially and President Harrison a Republican was elected. The Demoi-raiic majority in the House, however, was maintained. In business we had an even balance between prosperity and depression. In politics we found a similar bal-j ance between Republican and Demo-J crtic parties. I "The 'sound prosperity' of .1891; began to give way to an averag2( basis and by November of 1892 busi-j iesj men generally had a feeling of j uncertainty. Fundamentally busi-. ness -was normal but the change; from prosperity to normal business i had very much the same effect as! depression,. The decline foretold ' a change in administration and Gro-, ver Cleveland was elected on the ! Democratic ticket and went into office with a Democratic Congress. i "The panic of 1893 sent business., into a depression that lasted thruoutj Cleveland's "entire second term and ; the election of 1896 brought in President McKinley with a Republican Republi-can Congress. Unsatisfactory business busi-ness conditions and large unemployment unemploy-ment had again dictated 'change.' "General business improvement rather rapidly during the Spanish; American War and the period of ' ' prosperity following it. Business ' v. as active, confidence ran high and' employment was good. In N6-. vember of 1900, under the circum.j stances,; it was natural that the; Republican party be maintained . in j office. .McKinley wa3 'reelected and went In with a Republican Congress. J "A money panic developed in 1903 j but was not particularly serious. ' By 1994, the election year, business was Improving rapidly and confidence confi-dence .a3 again established. The sharp rise toward Improvement 1 would naturally indicate a maintenance mainten-ance of the party in power. The ' Republicans were re-elected. "in 1907 another money Janic developed and proved to be more serious than that of 1903. If the election had been held In the fall 1 of 1907 there is little doubt that ' the Democrats would have won. liy 1908, however, business had re- ' covered to a certain degree and was ' just about normal at election time. 1 The general ba.an'e of conditions 1 w..s oilected in the. election of that 1 year which brought in President 1 Taft on the Republican ticket but. ' returned a Democratic majority In 1 the Houne of Representatives. Four " ye:iri later In 1912 business condl- I Cons were very uncertain. I.aboi s troubles were developing and w:i-;cs -generally were in. Hus;ne:e. con- d'tlons favored a change. Woodrow t Wilson was tie ted In November o id took up his d.i'.i ..) the following j Yv.h v.ivh a Democratic Congress. V "Trie World War very naturally ccloied lb- campalri, of 1916 but j 1 bu .:..'! was enWyh.g war time provje pertly. WW were good and profits h wert, Increasing. From a buHli.ee point of view conditions were highly satisfactory and this situation argues for a continuance for the present administration. ad-ministration. The Democratic party par-ty was put into office for another rour years. "The post-war boom broke In January Jan-uary or 1920 and that year saw a ilecllne In commodity prices unpar. lilt-led In history. Business was on i toboggan and the blankest sort of Jepression had settled down by election elec-tion time. Under the circumstances t was most natural that the partv n power should be vo'ed out. and hat a new ad in in ir.t i at ion should be .ui.'d in. President Harding and a :;eoubllcan Congress came into olliee u a result. "It Is evijent rrom this study tha. vhenever general 1j.i:uii'mh eimditloiM ire declining or depicted, when :er u n.jin ploy men t 1'. a problem an'i ii'onoinlc conditions are (;re:it!y un-atl.ifaetoiy un-atl.ifaetoiy the voters lend to chain:'.' he administration r"K.'irdlesH of '. h'.ih par'y ha- been In power. Vhenever business l;i improving 01 3 In a period of pr.iBp.'ri I y. when :mploymnnt li itood and w:i.4'-m lire lih, the party In power will In ail, probabllily be maliitalned r.'gardl.'Ms ' of Its politics. i "With this situation In mind wc are facing the election of November 1024, and it is rather more pertln-' pertln-' ent to ask 'What effect will business have on the election' than It Is to ,ank 'How will ' the election affoct business'. The first two yenrs of J Mr. Harding's ad m in Intention aw business depression. Last year we averaged at about normal and this iyear so far business la sticking verv closo to our average line of growth. In fact the current reading of the Babsonchart shows business at just 3 per cent above normal. I "Fundamental economic conditions condi-tions will continue to govern business. busi-ness. " concluded Mr. Babson, "but If you are Interested In the outcome of this year's election I commend a-careful a-careful study of these fundamental eionoinic coiid it Ions between no'.'.' and ne;:t November. Any tendency Inward greater prosperity, wider employment em-ployment and increase of confidence will strengthen the Republican eh.'inc.'s for re-election while any alov. '.hk up or decline, any Increase. Ii, ii nem iiloy uieiit or ienoral unse;-ll. unse;-ll. menl liusineHswlMc, will tend to bring about a changu." B H |