Business At Normal Says Babson
Statistician Traces Patb of Recovery of Trade; Business
Is Again at Normal
By ROGER W. BABSON
General activity as reflected by
the Babsonchart is shown at ‘par’
for the first time in eight months.
The final November figures,
just in, bring the line up from a
point 8 per cent below normal
where business stood at election
tmie. The readings by months
trace the path of decline during
the early part of 1924 and picture
clearly the advance that has
taken place since the election.
January saw business at 2 per
cent above normal. The momen
tum from the last month of 1923
was still keeping activity at a
good volume. February continued
at the same level. In March, in
spite of the usual seasonal spurt,
we saw things drop to 1 per cent
above normal. Further slowing
up in April took us back to 4 per
cent below normal and from then
on business fell off rather badly.
May showed activity at 8 per cent
below normal, June registered at
'12 per cent below normal, and
July at 11 per cent below normal.
August finally reached the bot
tom, activity averaging at about
13 per ceiyt below normal. Sep
tember and October suffered from
the uncertainties attending the
election and were recorded as 10
per cent and 6 per cent below,
respectively. On the eve of the
election business stood at 8 per
cent below normal. Today it has
made up this loss and things stand
at an even balance.
you may wonder just what is
meant by “normal business” and
an explanation is certainly due.
We have heard of normalcy in
business and we have heard about
pre-war conditions. Other com
parisons have been made with
the boom year of 1919 and still
others with the depression year
of 1921. So many different
bases have been used and the
term “normal” has been applied
•; loosely to mean so many things
that our present use should be
carefully defined. In studying
business conditions and the
changes in the business weather
here at Babson Park, we show the
fluctuations on a - large chart
which combines all the twenty-six
leading barometers of business
into one picture. So far as
general activity is concerned the
path of business is defined by two
lines on this chart. The central
one, or so-called X-Y line, fol
lows the path of National growth
regardless of the immediate situa
tion. It pictures total transac
tions and reflects the real ex
pansion of business, commerce,
and finance. The second line
which runs alternately above and
below it shows the exact present
condition of trade. In their in
terpretation these two lines hight
be likened to a tree. The tree
grows a little each year as is
When the
Salary is
Cut Off
by some unfortunate
and unexpected ac
cident or sickness—
it is too late to
think of
Accident and
Health Insurance
"bsvaace Hat’s All”
41 S. Tennessee Aye.
Marine 3445 /
Westcott’s Restaurant
927 Atlantic Avenue
| flfcenu
$1.50
Cnristmas
Dinner
Appetizer Neapolitan
Oyster Cocktail
■'* Relishes
Staffed Celery-Olives
Mixed Pickles
SOUP
Home-made Chicken Noodle
Petti Marmite
FISH
Boiled Red Snapper, Egg Sauce
Potatoes Pommes Long Branch
MEATS
Roast Young Vermont Turkey
Chestnut Filling
Giblet Sauce Cranberry Jelly
Prime Ribs of Roast Beef au jus
VEGETABLES
Mashed Potatoes or
Sweet Potatoes, Georgia
Sweet-Garden Peas
Cauliflower Hollandaise, sauce
Pineapple Salad, French Dressing
DESSERTS
• Pumpkin and Hot Mince Pie
Coffee, Tea or Milk
Nuts and Raisins
shown by the rings you see in the
cross-section of its trunk. This
growth is slow and hardly spec
tacular enough to interest us
much. At certain seasons of the
year, however, the tree does
show activity on the surface that
changes the appearance of things.
In the spring, when the leaves
are budding, it seems to be grow
ing rapidly, but in the autumn,
when these 'same leaves shrivel
and fall, the tree looks as though
it were dying. It is somewhat,
the same with business and these
two lines that measure its two
kinds of progress. The X-Y line
traces the gradual growth regard
less of season while the line of
present activity reflects the sur
face development of the individ
ual season.
Our business and financial
worlds are beset by “seasons”
even as the tree is, except that
the changes from prosperity to
decline, from decline to depres
sion, from depression to improve
ment, and from improvement to
prosperity do not occur with any
regularity as to time. Business
seasons are of varying length and
of different intensities. These
changes have made money for
many people, and have carried
others to their graves. In fact, the
presence of extreme fluctuations
in conditions presents one of the
greatest. problems in our entire
commercial and economic worlds
today. Abnormal prosperity gives
us false ideas of values. Easy
profits due to rising prices and
speculation undermine our habits
of work and thrift. We become
interested in spending rather
than earning, then the great basis
Law of Action-Reaction steps in
and a depression results. Losses
wipe out business profits, the
bread lines form, and by suffering
and by want, we again learn the
fundamental lessons of industry
and thrift. As our overdraft on
the bank of prosperity is gradual
ly paid back by the Jiard process
of working more and spending
less, things gradually improve and
business comes back into balance.
Either extreme is dangerous
and we are really soundest when
activity coincides most closely
with the normal X-Y line of
National growth. By normal busi
ness then we mean that activity
is neither running ahead, nor
lagging behind the X-Y Line, but
is running at the fastest pace we
can continue to hold. Normal
busines is healthy business and
at present, business is in exactly
this normal healthy position.
President Coolidge has em
phasized the necessity for “staba
lization” in the present situation.
Secretaries Mellon and Hoover
are stressing economy and the
dangers of inflation. The govern
ment is awake to the tremendous
advantages of this normal situa
tion and the losses that will in
evitably accrue if the present
mprovement is allowed to develop
into a spree of speculation. Per
sonally, I have spent the last
twenty years in an effort to cut
down these jumps and bumps in
American business, to lessen these
extremes and to eliminate loss
and suffering by helping business
men to keep nearer to this line
of normal growth. It is improb
able that these fluctuations will
ever be completely eliminated but,
as more business men and more
wage workers recognize these
changes in the business weather,
their results are modified and the
penalties imposed by this econo
mic law become less. We are ap
proaching the period of tempta
tion when the urge to gamble, to
get without earning, is strong. If
we can only remember that we
get what we pay for and we pay
for what we get; if we can only
continue to work as hard as we
have worked during this year to
get back to normal, all will go
well and we shall not have to face
the unpleasant task of paying the
fiddler.
Sioux City, l°wa
Father and Mother
cause this is Cto®“ ^ pounds 0f James
big famhiy prese in Ned who travels
Salt Water Taffy- states sent it
,n ««“> “ "J".
from Atlantic C J gver tasted.
kind of candy tores 0f Sioux City they
In all the candy g & bit uke it. It is
have no Santa Claus for get
great and X than y delivering it
dresses. , „ t chrismus and
Please come ag any way to
srsss-r
v^S&3ifc
Sold Only at
1519 Boardwalk
Salt Water Taffy