Newspaper Archive of
The Woodville Republican
Woodville, Mississippi
December 28, 1973     The Woodville Republican
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December 28, 1973

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Filday, December 28, 1973 BABSON REPORT (Continued from Page 1) l.any a year, with inflation raking any gain in the "current dollars" figure illusionary, t GROSS NATIONAL PRODUCT All in all, 1974's "real" G,NP (expresseti in constant dollars-- curently haed on 1958) may shade Jeff 1% from he 1973 level. quarterly figures are likely chart a downward path Car the first three quarters of the Year, and while we are hopeful of an upturn in the final three aonths this is by no means certain. It does look as though ve will experience a true re- cession (at least two successive quarte,rs of decline in the "real" 0Np). INDUSTRIAL PRODUCTION If we can escape a protrracted letroleum shortfall, idustrial lroductlon may not suffer too badly, but a decline seems in- for part of the year. ey areas have alreatiy felt the I stlcltien repereuss,ons ,from the] ael crisis. The downtrend in] ,0rae building will hurt manu-]mean retiuced inventory buying,- aCtUrers of building products with perhaps some backup of d home furnishings. Painfully goods. gh consumer prices and the EMPLOYMENT--PERSONAL tense need to conserve fuel l iNn and energy will produce areas _ , " .... , . of b' " .  aggregate personal income lrl. 2in strength and weaKnes_slfluring 1974 will not show the . me consumer cturames ilel[1, i Vi ....  *h .... * * ...... S lel  ......... ,_ _*- I ur ui v e ptb wu yul . oure rlme proaucs tooa, rec- .- ;. I It will be up, but bo:asted more aoation .vehicles, kis, snowj ! by ,tramfer payments (social sllffes, pleasu,re aireaI))cwIseeu,rlty ' unemgloyment com- a.., ..rpm me crunen oi s. !pensation, etc.) than by earned "' nigh-east fuel ,as Well as . ora consumers' need to estab-I meme" Sa'laries and wages and tsh spending priorities. Auto income of proprietor,s,hips and PrOduction is already suffering l partnerships will average lower rora lac, k of demand four "gas tthan in 1973 because of the driZZlers. ' There will be high slower business pace. Support w ly on certain items whichl will come. however, from ,wage ere once nonessential but are l hikes in multi-year umon pacts, t oW a "must," such as siding, new agreements, anti built-in  cost-of-living adjustments. Em- ulation, stot"m windows and ployment faces reductions in Oars, and supplemental stop- 1974, and the jobless rate could a!0 sPace-heatlng units. Aura Parts replacements s,hould en- average 6%, .but may run as ,o? k , much as 7% at the topmost . ' .gher demand, especia:lly point. As in the early years of Waste a car's idleness does not the. s decade, unemployment will mean longer life for Parts (tires. for instance, correlate wlt,h miles law materials and Orgy supplies permitting, re sho,uld be no letup in out- of materiel ,anti components generation and irons- equipment for oil and exploration, of, f shore and the crestover pattern al,ready have formed, the of tbe slide in business centered in 1974, Conse- ntly, the Federal .Reserve of production may well 5% below that of 1973, the unlquenes,s of the exist- climate suggests the drop be a bit more, possible FARM PRODUCTS e'conomy should derive support from the 'agrtcul- boom. With the low sup- levels of most artcltural in relation to ex- domestic and foretgn the push is on to ex- farm production. Acreage idled under the Soil Plan of price stabilization put back to work. Con- ng the 9rlces key farm are commanding, allocation rating the" is asking on fuel ,for farming purposes, the ,present lush farm in- demand for agricultural ,and imolements is brl,sk. With  little from Mother Nature in rtant crop areas, the ex- of acreage put, to seed a new record cron out- 1974. There should also Sora increase in livestock POUltry supplies over the twelve mont.hs. The pic- as a whole promises more food prices, pattie- 'after the 1074 gcwing well under way. SAYED IS..2' GOOD FOR BUSINESS consumers i] a v e a bulwark .against feces- for nearly three decades, rnay not be the stopper Spending ,Will be hurt consumer confi- arin. living costs, and of installment pay- Now, the ,high cost of eating and transportation wlth gasoline short- limit shopping Jaunts. mini-plazas and atl outlets win benefit situation. nce neigh- d0ends to be than that done super - we foresee a period consumers will ore of their dlsposa- into savings and debt Long term, is is lays %he grotmd- next cYcliCal u- but the IS netlve. The WoodvNle Re00ublican, Woodville, Mlsslssllo00l [' FROM FARMS TO FACTORIES The big change in Mississippi's economy in th last 20 years has been the shift from farms to factories, reports the R&D Center in the just-released "High- lights of Mississippi's Cha,ging Economy." The most visible indicator of this change is employment. In 1950, agriculture was 43% of the total employment, and it remained the largest employment sector until the early 1960% when man- uacturihg growth caught up wifh agriculture. By 1970, manufacturing employment was 26% of the total - the same percentage as that in the United States as a wh, ol e, while agriculture was only 7%. Copies of the brochure describing some of these changes are available at no charge from Public Information Office, R&D Center, P. O. Drawer 2470, Jackson, Mississippi 39205, telephone 98:6466. (R&D Center Release) permiLs issued give no hint of capacity and there is lit`tle e,.rlv improvement of this sect=or, simultaneous cut-throat price which utilizes so much man-]competition. For 1974, however, power and materials. Resump- Ithe outlook is less promising. In lion ,of vitality must await a general, we cannot count on the strong demand of the past year, nd ,costs will oontlnue to move upward. The situation will be worsened if fuel allocations prevent profitable use of oper- ating facilities. But, barring ex- tremes, net corporate profits should dlp about 14% overall, with the greatest year-to-year slippage in the first hal of 1074. But some firms, notably those with footi-related operations, may even stack u.p favorably vs. 11973 because of the afflictions they suffered at least part of last year. As to dividend disbursements, l if operational disruptions are , not overly severe, corporate ',dividends can inrease again in 1974. The reason for this is that I anti-inflation rules permitted loner spell .of anti-recesslon" credit policy than the past six weeks. By late apring of 1974 or sometime during the summer, residential building should bot- tom out. probably near the 1.1- million annual rate, and there- ,Citer the economy can derive n',uch-needed support from this sour.e. For 1974 ,as a whole, new residential starts should approx- imate 1.3 million units. Indus- trial an:l commercial construc- tion bolstered overall building activity for a good part of 1973. ,But high costs, supply shortages, and n;aw the lack of clarity as to consumer spending plans and .h.oDuing patterns are likely to cau,se some hesitancy for non- residential building during the coming year. be difficult to shrink because! CORPORATE PROFITS [only ,a tiny slice o,f 1972 and of the flood of new workas into AND DIVIDENDS 1973 profits to be paid out. the labor pool. I The amazing 1973 gains in I POLITICS -- DOMESTIC BUILDING AND I overall business profits afterl AND INTERNATIONAL CONSTRUCTION 'ltaxes were due to .basic and un- Pdlltics caused a good deal While the nation's housing'complicated business princi,ples of the uneasiness and uncer- needs are still enormous, tight and not to profiteering on the talnty whloh marked 1973. The ,and costly money has snuffed part of corporate enterprises, as l unending sequence of "shocks" out the boom after the high claimed by scme unthinklng.lin connection with the investi- gate of residential starts in 1972'critics., Fact is. we saw what igation's on Capitol Hill make and the first half of 1973. Gov-i plant [ any po- h,appens to profits when reasonable forecast of ernment figures on building and equipment operate at full lttical prospects for 1974 an exercise In futility. It is .to be hoped that the biennial conres- sional ,and gubernatoriai elec- tions upcoming neXt all will produce some semblance of rea- son to replace the chaotic circus. While "0hose :most eager to have the President impeached may have lessened their efforts, Just how much of a working rela- tionship between the Adminis- tration and Congress will be restored is questlon,abla la'st election years have usually brought forth .some productive efforts on Capitol Hill; these .will be most vitally needed in 1974. There should be no federal tax increases except on the So- cial Security impost in the year ahead. VChlle the staff of Babson's Reports is .hopeful that there will be no resumption of fight- ing in the Mltieast, negotiations leading o more stable condi- tions there will be arduous. Arabs will dbubtless use their oil strategy as an overhanging threat for years to come in dealing with the industrialized nations of the world, although they may moderate their atti- tude somewhat. The emergence of underdeveloped nations is newr smooth, and unrest will surface from tlme to time. We dO not. expect, 'however, actual military atlon between the great powers In 1974. INTERES RAT AND THE BOND MARKET Late in 1973 the monetary authorities at least temporarily relented their anti-inflation credit constriction in order to forestall a serious recession due to fuel slortages. Conlfronted 'with both inflation and reces- sion, the Federal Reserve may be forced to vary Its tactics, For now, the need to protect the economy prevails. So the peak in interest rates may have been seen for this go-round. W i t h an economy - propping monetary policy ,and ,business needing less borrowed capital as activity eases, short-term money rates will likely back away from recent peaks; but long-term rates, which ,had risen less th,an short-term in the past two years, will recede more slowly. This means healthier bond markets in 1974 than for the past two years. Investors re- quirin,g the best 9osslble yield on their investments should find, therefore, that bonds, pre- ferred stocks, and even some common stocks generally re- garded as "income issues" can now provide an ,attractive yleld, plus .some capital appreciation as interest rates decline. STOCK MARKET OUTLOOK Two significant 1973 scares for the stock market were (1) the early-year panic owr food prices and supplies, and (2) the still-current .worries over oil and gasoline shortages with the unhappy consequences for busi- ness .and employment. The for- mer p,,oved temporary and should not be overly distressing in 1974, but fuel-energy troubles will be ,harder to resolve. Hence, depending on the Mideast pic- ture, the stock mrket may face more uneasiness' that could carry well into Spring. By ,then, Insaell-Aab pece talks may have made sufficient progress for investors o star thinking in terms of better ;business some months away. And the stock numerous depressed Issues In go bar[aln hunting for wel!- established stocks and eon'ert- Ible sectrltles (of companies with proven eamIlgs capabili- ties) WhiCh are Selling at the lower end, histOriCally, of their prtce-earnlngS range. Industry groups looking par- ticulrly promising for i974 in- clude fuel and energy stocks, some of the life and property- casualty insurance issues, off- shore securities, and farm im- plement stocks. The farsighted investor will flnd potentially rewarding buys in medical equipment and supplies and consumer goods, Even the cur, cently out-of-favor S  .L, building, and ,apparel groups will offer plenty of good candi- dates ,where reserves are ample. Such buying should be selective in early 1974, ,but as the yeax progresses .and uncertainties are brought into clearer perspective, more aggressive buying might be in order. In short, ss g'/4 makes its ,debut, Babson's Re- ports -- instead of repeating the cautionary note sounded year ago -- suggests that this is the time for realism anti courage, 10rig-range vision, and a healthy measure of faith in this countr A anf ou A ejonom,. Kerosene and electric sItce heater multilly ,the potentlalnU for disaster this 'hollday season. UtmoSt care Is required if they [ are to be operated safely. Porta- ble fixtures should be placed where they won't be easily tipped over, well ,away from exlts .and combustible materials. Electric heaters shotlld bear the Undervcriters LabOratories (UL) seal and come equipped vlth a thermostat .and teat resistant cord. , n ,,, CATCHINGS Insurance Agency Phone 888491 market could assume a more[ P.O. Bo 3 hopeful stance. [ Woodvllle, Miss Now is a practical ,time for 1 investors to effect ortfolio re-I P/O MUtual Insurance Agen@ alignments to meet Indlvldual I Phone 324815 goals. Start switching to irn- I prove your position whether you! Jackson, MIss. are seeking growth or a com-[ binatton of .reasonable Income 00Jre - Automobile I and some inflation xotection. These changes can be tied In Life - Bonds with tax considemti0ns. With virtually every industry group, Oliver W. C.tehln, It. 00upport Senate Bill 1677 aa ff your life depended upon R just might! The 1974 Legislature can help save dozens of lives each year In Mississippi! There is a bill prefihd in the Senate which can force the repeated violator of traffic laws off the highways and streets. These dangerous, drunk and unqualified drivers make up only 5% of all drivers, yet they are responsible for more than half of the auto deaths and accidents. It's past time for laws to be enacted that will protect the lives of the other 95;. This bill is fair to all drivers with adequate provisions for warnings and appeals. But the driver who continues to break the law without regard for others would and should be forced off the highways. Many states have "habitual offender" laws and the auto accident death rate has dropped consistently in these states since the law went into effect. Don't you think it's time for Mississippians to have this kind of protection, too? The Mississippi Insurance Council urges the 1974 Legislature to make this one of the very first pieces of business in the upcoming session. And every voter is urged:to let his hpislator know we want this legislation passed this.year. No One has more influence on your legislator than you. Use tt to assure passage of Senate Bill 1677. Your life could depend upon ltl Mississippi Insurance Council INSURANCE COSTS DOWN