Search

The article considers the alleged rigidity of automobile prices and analyzes the factors affecting this phase of the industry's pricing policy. The author draws the experiences of General Motors Corporation (GMC). The author argues that price rigidity is a myth, as car prices for model years differ only slightly, with recent models offering better quality and features than earlier models at the same price. The article focuses on the experience of the auto industry in the recession years 1937-1938, when prices remained stable despite a shrinkage in demand. The article claims that automobile manufacturers determine price in advance of production and over the longer term, the trend of quality has been upward, and that of real price (quality considered) downward.

The article examines the risk inherent in determining price in the automobile industry, focusing on the experience at the General Motors Company (GMC). The article explains that car prices are set by the manufacturer or "administered" prior to product release and maintained throughout the year. The article discusses the complex factors that determine price, including financing, engineering, design, production, and marketing. The author holds that manufacturers must set prices between two levels, the lowest being the price of production, and the higher being the amount purchasers are willing to pay for the article. Specific discussion of the GMC process for determining price based on standard volume and standard price is presented.

The article discusses the regional evolution of the U.S. pig-iron, or cast-iron, industry from 1901-1926. Significant changes in the localization of the U.S. iron-producing industry include the importance of the districts in close proximity to the Great Lakes and the decreased importance of certain older districts located in the Eastern Seaboard region. The iron industry is migrating to the Western portion of the U.S. The furnaces in the districts which have shown a downward trend are older and isolated factories. Several charts and tables are presented in relation to annual average growth of pig-iron production, broken down by region.

The article discusses a 1925 study pertaining to the U.S. coal price indexes in relation to industrywide conditions. Increasing activity creates a greater demand for fuel and in accordance causes coal prices to rise. The production of coal generally increases to satisfy the demands of the railroad industry, power plants, and industrial users. Researchers studied coal prices and sales from 1908-1925. They were able to ascertain that because of the wide use of coal by the major industrial sectors in the U.S. coal prices were greatly influenced by fluctuating business conditions. Over an extended period of price fluctuation low-cost mines had considerable advantages over their high-price counterparts.

The article analyzes the relations of a commercial bank to the business cycle in the United States. The effects of cyclical changes in business conditions upon the loan and deposit operations of an individual commercial bank are described. Comparisons of the loan-deposit ratio of an individual bank with that for a group of banks are made, and figures related to average daily loans and deposits from 1902 to 1924 are presented. Trends in loan and deposit ratios for the years after World War I are analyzed.

The article explores the influence of the recurrent alternation of activity and depression exhibited in the business cycle on the operations of two manufacturing firms. Figures related to production, orders, inventory and shipments for a company producing hardwood flooring are presented. Similar information is provided for Allis-Chalmers Manufacturing Co., producers of a variety of machinery and equipment. Statistical methods of analyzing economic conditions and several possible errors in such methods are discussed.

The article examines the relation between public utilities and business cycles. Information regarding the gross revenue of the Public Service Electric Company derived from the sale of kilowatt hours for the purposes of power and lighting is analyzed to determine the extent that each is affected by general business conditions. Graphic representations of monthly kilowatt hours sales in the years after World War I are presented. Evident sales trends are compared with general business trends of the same period.

The article discusses the value to the executives of electric light and power companies of statistical methods and indices relative to business cycles. The article reports and analyzes the revenue fluctuations of the Public Service Electric Company, a subsidiary of the Public Service Corporation of New Jersey. The article presents essential steps in the statistical analysis within a given period of time in order to shed light on the impact of business cycles on the electric company's revenues. The article claims that these same methods may be used in different cities and industries. Several charts and indexes are presented and analyzed, addressing trends, seasonal variations, and business cycles. The article concludes that use of these indices make simple work of revenue forecasting.