Business: Propheteer

In his autobiography, Actions & Reactions, Roger Ward Babson remarked that “some of the books on which I have worked for months have brought me little return, while others which I have dictated in a few hours have been profitable.” Out last week was the 40th volume by this most publicized of business prophets — If Inflation Comes,* a small but sinister tract which seems to fit into the category of profitable dictation. If Inflation Comes is a simplified exposition of inflation, its causes and the revolution which might follow, and the book is crammed with homely Babsonisms on what to do about the whole situation. “If you find it hard to listen to my ‘heavy’ discussion,” warns the 61-year-old prophet, “remember there may come a night when you will awake to listen to the sound of men running in the streets.”

“I dislike to talk about the possibilities of revolution,” says Mr. Babson, with ill-concealed relish. “There are, however, three very concrete dangers always staring us in the face . . . 1) radical monetary inflation, 2) becoming involved in foreign wars, and 3) extraordinary labor troubles. All of these are possibilities and any one of them could easily lead to a dictatorship. If both the radical and conservative forces of the country can agree as to the same dictator, there is no fear of revolution; instead simple fascism—for good or for evil—follows. If, however, the radical interests, who are likely to be in power, carry matters too far to the Left, a revolution might be started by the conservative interests.”

Mr. Babson suggests small sustenance farms as a good hedge for revolution as well as inflation, but not those located in the vicinity of big cities. Revolutions always start in cities, and the hungry populace is likely to stream out into the neighboring countryside. Moreover, “during the conflict between fascism and communism, which many believe to be inevitable, raiders would motor through the main highways and trouble the most prosperous homes.”

On the hedge-farm there should be a place for an old-fashioned kitchen range, “and always keep a bin full of coal in the cellar,” advises Mr. Babson. “A barrel of kerosene oil, with two or three kerosene lamps, is also a good hedge against inflation. I have purchased a brand new kerosene heater, which I am storing away as insurance against the time when the electric power employes will go on strike.”

Bankers, automobile salesmen, real-estate agents, and others who live by their wits fare badly in revolutions. Therefore, says Mr. Babson, acquire some salable skill or knowledge. One skill he suggests is the art of defensive warfare. “I certainly would become an expert with anti-aircraft guns, or know more about gas masks than anyone else in my community.” Advice to the young, “with or without property,”: join a union. “A labor-union card may be a real asset some day.”

In a more lyric vein, Mr. Babson concludes that the only safe hedges are things like health, culture, children, friendship, birds, flowers, the sea and the sky. And Mr. Babson advises against entering any period of inflation or revolution without a clear conscience. “Jesus may not have been much of a theologian,” admits this moderator of the Congregationalist Church. “He, however, was a real economist.”

Mr. Babson came honestly by his combination of Yankee piety and Yankee shrewdness. Born in Gloucester, Mass. where his father was a merchant, Roger Babson has probably made more money out of statistics than anyone in the U. S. One of the chapters in his autobiography is headed, “$1,200 Becomes Millions.” As a youth, he relates, he “always liked bright, jolly girls, full of the dickens.” But he kept his eye on the main chance, and after a disillusioning turn in investment banking, followed by a bad case of tuberculosis, he set himself up in Wellesley Hills, Mass. as a purveyor of business figures under the name Babson’s Statistical Organization, Inc. He and his wife were the sole stockholders, still are.

Today the Babson interests are widely diversified. Babson’s Reports, Inc. sells the statistical service through 16 branch offices in the U. S. and Canada. Publishers’ Financial Bureau distributes the founder’s views to 400 newspapers. A. P. W. Paper Co. (paper towels) is Babson-dominated, as is Gamewell Co., which makes fire and burglar alarms, signal systems, automatic sprinklers. Babson Institute is an endowed, non-profit-making business school with a 300-acre campus and ten buildings in Babson Park, Mass. where all Babson activities in Wellesley Hills are concentrated. The Institute now has 130 students including sons of President Benjamin Fairless of Carnegie-Illinois Steel, President Clarence Francis of General Foods Corp. and Vice President Thomas L. Smith of Standard Brands. Each student has space in the general office, where he is supplied with Ediphones and secretaries. At nearby Wellesley College the Institute’s students are called “Babson Babies.” Another Babson Institution is Webber College, which introduces rich young ladies to the business world, functions in Boston’s Charlesgate Hotel in the autumn, then moves to Babson Park, Fla. where graduations are held in May. Webber College is named for Mr. Babson’s granddaughter Camilla Grace Webber.

Mr. Babson also winters in Florida, where, in addition to his southern Babson Park, he owns a 12,000-acre ranch. There a fortnight ago he wound up his annual winter business conference, which is a small edition of the conference he holds at Babson Park, Mass. in the autumn. It was at the 1929 autumn conference that he uttered his last warning about the impending stockmarket crash. Even Mr. Babson admits that he started calling the tragic turn several years before anything happened.

*Frederick A. Stokes Co., $1.35.