The outstanding feature of its activi- | which enables them to advance in ties in 1925 has been characterized as rating. The Navy has prepared "Studies of aviation as it affects the seventy-four different courses of study strategical and tactical operations of the fleet." which are furnished free to enlisted men by the Training Division of the Special Schools for Naval Officers. Bureau of Navigation. These courses -In accordance with the system that have been divided into three general has been in operation now for several classes: (1) "Rating courses" (inyears, officers are prepared for spe- struction necessary for a man to adcial and regular duty at schools of vance from a lower to a higher ratwidely varied character, such as the ing-e.g., from radioman third class Submarine School at New London, the to radioman second class); (2) "genNaval Torpedo Station at Newport, eral technical courses to increase naand the Naval Air Station at Pensa- val skill" (e.g., installing a discola. The last has attracted more tilling plant or a Curtis turbine); attention during the past year than (3) "academic courses to further the any of the others. According to Cap-general education of the individual" tain J. J. Raby, U. S. Navy, Com- (e.g., arithmetic, chemistry, United mandant of the Air Station [See Na- States history, Spanish). The Trainval Institute Proceedings, September, ing Division says in a statement 1925], the classes, made up of young made in 1925 that about 35,000 of line officers and marine officers who these courses were issued the precedvolunteer for the duty, vary in size ing year. "The conditions under from 40 to 70 members. "The course is nine months, the first month being devoted to ground school, the next five to seaplane training and ground school combined . . . and then three months to landplane training and advanced seaplane work." In one of the tests somewhat after the middle of the course, "The student is required to do two loops in succession, reverse turns, falling leaf, right and left spins, one hour of formation fly-gle contributor to naval education ing, and a precision landing test that consists of climbing to 6,000 feet, spiraling to 3,000 feet, cutting the switch to the magneto so that gravity is the only force acting on the plane, then making two complete turns in a spiral, and effecting a landing within 200 feet of a set mark." which they are used vary from large study classes with several hours of instruction each week to the single man on a small ship, who pursues his course under the direction of one of the officers of his ship." Evolutions of the Fleet.-The war game at Hawaii, followed by the cruise of the fleet to Australia and New Zealand during the spring and summer of 1925, was the greatest sin during the year. A statement of the results, being to a considerable degree confidential, will not be attempted here. But it required no vast technical knowledge of the naval profession to understand that the great school of the fleet is the school of experience. Educating the Enlisted Men.The Spirit of Naval Education.Every year the Navy must recruit The ideal of naval education was inof the average 20,000 men and train terpreted by Rear Admiral William the larger number for the especial V. Pratt, U. S. Navy, President of work required. There are trade the Naval War College, in an address, schools at the four great training sta- October 22, 1925, on the inauguration tions and at other places where 2,000 of Captain Ralph Earle, U. S. Navy men may be given courses varying (retired), as President of the Worcesfrom six to thirty-two weeks. Thus ter Polytechnic Institute: "To make those selected have the opportunity good disciplined Americans, fit for of qualifying as electricians, ma- any service, out of the young men chinists, blacksmiths, coppersmiths, who come to us from all walks of radiomen, pharmacists, bakers, musi- life-this is one of the Navy's forecians, etc. The great mass of the en- most works, a work to which we dedilisted personnel, however, must ob-cate our lives. We not only give them tain on board ship, the education through our various schools an edu cation which is highly technical, but your battles if the country ever needs send them out finished, disciplined them. This, I believe, is the best men, and above all good Americans, work that your Navy does for you Americans who stand ready to fight in time of peace." SELECT REFERENCES ON DEFENSE AND ARMAMENTS MAJOR, GENERAL STAFF, U. S. ARMY THE ARMY VETERANS U. S. Secretary of War. Annual Re-U. S. Treasury Department. ports of. Wash. Govt. Printing erans' Bureau Reports. Govt. Printing Office. Vet Wash., Office. ARMY AERONAUTICS Aeronautical Chamber of Commerce of the U. S., Aircraft Year Book. N. Y., annual. PREPAREDNESS, MILITARY ANGLE, S. D.-Airplane Engine En-Journal of the Army Ordnance As cyclopedia. Dayton, Otterbein Press, 1921. sociation, August, 1920, to date. Pre U. S. Infantry Association. FORTIFICATIONS SPAIGHT, J. M.-Air Power and War U. S. Fort Leavenworth, General Rights. London, Longmans, Green, 1924. Air Craft in War. N. Y., Longmans, Green, 1924. Service School. Field Fortifica- Society of American Military Engi- MILITARY RECRUITING League of Nations. Armaments Year PENSIONS U. S. Secretary of the Interior. Annual Report. Wash., Govt. Printing Office. U. S. Secretary of the Interior. Laws MILITARY EDUCATION S. War Department. Reports of Various Service Schools' Periodicals TRAINING OF OFFICERS U. S. Secretary of War. Annual Re- of U. S. governing granting of U. S. War Department. Reports of Various Army Schools. etc. U. S. War Department. Manual of Military Training. Rev. ed. by Moss and Land, 2 Vols., Banta Pub. Co., 1925. STATISTICS OF EXPENSES U. S. Secretary of War. Annual Reports. Wash., Govt. Printing Office. THE NAVY U. S. Secretary of the Navy. Annual Reports. Wash., Govt. Printing Office. JANE, F. T.-Jane's Fighting Ships. League of Nations. Armaments Year PULSIFER, P.-Navy Year Book, 18061921. Wash., Govt. Printing Office. RICHARDSON and HURD.-Brassey's Naval and Shipping Annual. London, Clowes. Files of United States Naval Institute Proceedings. U. S. Naval Institute, Annapolis. MAHAN, A. T.-Influence of Sea Power upon History. Boston, Little Brown, 1890. BYWATER, H. C.-The Great Pacific War. Boston, Houghton, Mifflin, 1925. NAVAL AERONAUTICS Aeronautical Chamber of Commerce, Aircraft Year Book. N. Y., 1925. BAIRSTOW, L.-Applied Aerodynamics. London, Longmans, Green, 1920. LEWITT, E. H.-The Rigid Airship. A Treatise on Design and Construction. London, Pitman and Sons, 1925. PART FOUR ECONOMICS AND BUSINESS DIVISION XIV ECONOMIC AND BUSINESS CONDITIONS GENERAL STATE OF BUSINESS BY SOLOMON S. HUEBNER PROFESSOR AT THE UNIVERSITY OF PENNSYLVANIA Introductory A Year of Good | before, been experienced within SO Business, Although Not of Boom short a time. The stock market is Proportions. With the exception of generally regarded as a discounter of a few leading industries, the general condition of business during 1925 may be described as satisfactory and even flourishing. Comparisons, when based upon statistical data relating to business, must always take into account the nation's normal growth from one decade to another. When this is done, the year 1925 clearly indicates a distinct advance over any year since the last high record of 1919-1920. In one important respect even the security market-the present year has probably shattered all records of recent times, both with respect to volume of transactions and market appreciation. Here sales, as measured by the number of shares traded in on the New York Stock Exchange, have exceeded those of 1924 by 70 per cent. and of 1919, the previous banner year, by 40 per cent. future business conditions. If that view be true, then the future would seem to hold much in store by way of business prosperity. Although not yet of boom proportions, the year 1925 considerably surpasses any previous year since 1920, and is clearly developing a powerful business momentum. Meanwhile the average price of railroad stocks has been elevated to a level which is 16 per cent. in excess of the 1924 average, and 35 per cent. over that of 1921. For industrial stocks the average price has increased by nearly 50 per cent. during the present year, and the October average exceeds the 1921 level by over 54 per cent. Such a spectacular rise in industrial stocks has seldom, if ever Résumé of Leading Indices of Trade. A brief résumé of such indices for the first nine or ten months of the year will serve to show the extent to which 1925 exceeds any year since the boom of 1920, and the following depression of 1921. Bank clearings (for 10 months) exceeded those of any similar period, and were 16 per cent. in excess of those recorded for 1924 and 24 per cent. over those of 1920. Railroad volume of traffic for 1925 is record-breaking, with the car loadings by far the largest during the later months of the year. Net earnings in the meantime increased nearly 10 per cent. during the first half of the year as compared with the same period of 1924, while during the month of August, the last for which detailed data is available, the increase has extended to 234 per cent. Pig iron production exceeds that of 1924 by 18 per cent., and is almost as great payments of industrial corporations as that recorded for 1920. Copper are well maintained, and in many production during the past ten instances, especially in the later months also exceeds that of 1924 by over 7 per cent. Building permits for the first nine months of the year exceed those of 1924 by 14 per cent., and total 21⁄2 times the volume of any year prior to 1922. Compared with 1924, 1923 and 1922 (10 months) foreign exports are larger by 8, 18, and 27 per cent. respectively, while imports exceed by 16, 8, and 36 per cent. Business failures, while approximately the same in numbers for the last three years, nevertheless show a substantial decrease in the volume of liabilities involved, the decline in this respect for the first ten months of 1925 being 30 per cent. as compared with 1924. In fact, for October of the present year, the rate of bankruptcy, both with respect to number and liabilities involved, was lower than in any corresponding month since 1920. Financing operations exceed those of 1924 (for 9 months) by 14 per cent. and those of 1923 and 1922 by 44 and 22 per cent., while new incorporations are larger than those of 1924 by 30 per cent., although still far behind the recordbreaking figures of 1919-20. Along many other leading lines of production the increasing momentum of 1925, as compared with the period since 1921, is clearly apparent. Production of automobiles and trucks during the first ten months of the present year shows an increase over 1924, for the same period, of approximately 13 per cent., while for gasoline the corresponding increase in production is 18 per cent., for bituminous coal 5 per cent., lumber 5 per cent., cement 11 per cent., boots and shoes 5 per cent., and cotton consumption 18 per cent. Recent trade bulletins also indicate that with respect to hides and leather, paper, wool and silk, the demand is well sustained with prices showing a tendency to increase. The rate of employment and wages is now (October, 1925) about the same as that prevailing at the close of 1920, and slightly exceeds the level of October, 1924. Dividend months of the year, there have been numerous dividend increases and stock allotments. For the first 11 months of 1925 (Babson figures) industrial dividend payments have exceeded those of the same period in 1924 by 5 per cent., and those of 1923 and 1922 by 10 and 13 per cent. The number of business indices apparently showing diminished volume of transactions or price tendency is extremely limited. Where such a showing is presented the result is quite natural or not necessarily subject to an unfavorable interpretation. Despite a substantially increased volume of business along nearly all lines, the general level of commodity prices has fortunately shown little advance during the past three years; and the average index price now stands about midway between the yearly average for the last pre-war year, 1914, and the highest point reached following the war, namely in 1920. Similarly, the bond market for gilt-edged investment securities, which reflects quite consistently the tendency in interest rates and commodity prices, has, as will be explained later, experienced little change during the past three years with respect either to the volume of transactions or the general level of price quotations. Statistics. The following discussion presents various tables which summarize the business conditions of 1925 in comparison with those of 1924 and earlier years, as shown by those leading barometers of trade* that are generally accepted as the truest index of business conditions. These tables have been grouped under the discussion of the various special subjects to which they relate. The *The author is indebted for the statistical data presented in many of the following tables to the periodic compilation prepared from authentic sources by the Babson Statistical Organization, and issued in Babson's Reports on Fundamental Conditions. collection of data much assistance was also obtained from the excellent compilations and reviews published periodically in the Commercial and Financial Chronicle. In the |