How Much News in the News Letter?



MARCH, 1945



SOME years ago a mystery story told of a racing tout who bought an evening paper in the London fog from a hawker with a beard like Father Time’s, and to his astonishment found that it bore tomorrow’s dateline and a full list of tomorrow’s winners. Next day the gambler went all-out, and had his reward in sterling. But on the train back from Ascot he opened the wonderful paper again, and his eye fell upon a stop-press item announcing his own death from heart attack in a railway carriage — just as he felt the stab of mortal pain. The moral is an old one: no man can look upon the face of the future and live.

Yet to learn the news before it happens has always been man’s desire. This wish has sired a curious development in American journalism. It is the forecaster’s bulletin, in print or mimeograph or hectograph, mailed confidentially to subscribers. To read the news “in advance,” these clients pay amounts ranging from $18 to $36 a year. For more detailed advice, addressed to the subscriber’s special problem, annual fees may run up to $500 or more. The letter of Capitol Hill gossip and chatty generalities costs less than searching reports of the “Government and Your Business” or “How to Thrive Under the New Deal” type.

To Adam Smith and Ricardo, crises and depressions — like the Mississippi Bubble and South Sea fiasco — were less interesting than conditions in “the normal state.” The first real students of the heights and depths were critics hostile to the status quo, like Sismondi, who mused over the wreckage of the Napoleonic Wars, and Karl Marx, who hoped to prove that crises are the chronic spasms of capitalism on its deathbed. All sorts of theories emerged about the cause of business cycles —• sun spots, mass emotions of hope or panic bound up with rising birth or death rates, innovations, overproduction or oversaving, and a dozen more — while the wiser modern economists, like Wesley C. Mitchell, came to see the cycle as a complex of many forces.

Early in this century, some economists ventured predictions on the theory of a smooth succession of business cycles, at intervals of three, or five, or seven years. Others claimed there was no such thing as an orderly cycle — notably Irving Fisher, who for a while derided the notion that business fluctuations were more significant than ups and downs of “the weather cycle” or “the Monte Carlo cycle.” For a generation the forecasts of Professor Fisher and other bold academics made headline news.

To clients hopefully believing that not only economics, but daily business, was a science, with predictable results, certain services were first offered by men trained in journalism and statistics — like John Moody, James H. Brookmire, and Roger Babson. At the start they were mainly annalists of business, compiling manuals of industrial and corporation securities, plotting the past curve of the stock market, tracing the index of bank credit supply, and cautiously drawing conclusions about the symptoms of good times and lean. Brookmire’s Analyst, begun in 1911, was typical of those days. Taking as its motto “Science can forecast not waves but tides,” this leaflet tried to anticipate the future from the evidence of credit supply, stock prices, and general business activity.

Copyright 1945, by The Atlantic Monthly Company, Boston, Mass. All rights reserved.

Then came the Great War, and a post-Armistice world quivering with insecurity — filled with rumors of revolution, Red scares, a slump expected in 1919 (which agreeably failed to happen), and the bubble of a prosperity that suddenly burst in the autumn of 1920. Many citizens eager to lay hold on normalcy (once defined as nostalgia for things to be again as they never quite were) hoped a little foreknowledge might soothe that feeling of insecurity.


To MEET their need, a brighter, bolder sort of business prediction sprang up. The older services put forth “forecasters” with the crisp air of communiqués, and “barometer charts” that were less meteorological than clinical in their feverish tone.

Under the aegis of the oldest university in the United States, the Harvard Economic Society in June, 1919, began to issue Monthly and Weekly Letters. Its theory was simple, if dubious: rising stock prices and falling interest rates always herald an upturn; the reverse signs a depression. The Society’s good luck in announcing the recession of 1920—21 and the recovery of 1922 built considerable prestige, which later crumbled, to the embarrassment of the University and its Overseers. Only in the Delphic sense could one describe as foresight the Society’s words, for example, on November 16,1929: “It is clear, however, that nothing like the depression of 1920-21 is now in prospect.”

Meanwhile in January, 1921, Standard Statistics entered the forecasting field, and up to 1929 it achieved the highest score — 52 per cent — among business forecasters for accurate prediction, according to a study made by Professor Garfield V. Cox of the University of Chicago. Under the depression, however, its record also sagged.

Babson, developing his self-styled “law of action and reaction,” achieved a score of 45 per cent accuracy in Cox’s tally, showing better results in foretelling recessions than recoveries; while Brookmire, despite a major blunder in foretelling a depression for 1926 and having a general average of only 31 per cent accuracy, won some marked successes, including announcement of an impending “recession” in the midsummer of 1929. Distinctly poorer were the records made through the twenties by Moody’s Investors Service and by the Monthly Letter of Charles E. Mitchell’s National City Bank.

The age of confidence ran from the recovery of 1922 to the October crash of 1929. In the absence of a national lottery, citizens gravitated to a game of chance where, for a while, nobody seemed to lose — a game, moreover, that had a certain moral respectability denied to horse racing. Playing the stock market had also its “scientific” aspect, about which the forecasters presumably knew everything — while the average subscriber in his innocence regarded the pyramiding of profits as an Eleusinian mystery if not a black art.

Middle-aged men — traditionally the most prudent — who had come face to face with the limitations of their earning power, in terms of professional advancement or dollar-to-dollar accumulation, were sorely tempted, in the scramble for wealth, to override those limitations by speculating. The usual rules of judgment were suspended; many a businessman trustingly took the advice of an unknown investment broker, oracular tip sheets, or reassuring voices out of the ether like that of “The Old Counsellor” praising Insull securities.

Optimism, faith in the unsinkability of American business, was the basis even of the old-line services. Their vital theory was simpler thaw most people supposed: widespread confidence meant essential economic health. After polling their clients to determine whether they felt bullish, these advisers fed that optimism back to their subscribers as a recommendation to buy without stint or limit. Infinite hope thus became a trick done with multiple mirrors. Professor Cox’s findings show that the forecasters’ batting averages steadily grew worse between 1920 and 1929.

Failure of the forecasters to anticipate the Great Depression stemmed directly from the “confidence and optimism” found in business circles. The most famous prophet of woe was Roger Babson, whose waverings, like the graphs on one of his own Babsoncharts, illustrate the struggle between a man’s better judgment and that cheerful American mandate, “Don’t knock — boost!” In June of 1929 his outlook had been apprehensive — hence unpopular. But in July his Service countermanded fate, announcing that “for the rest of 1929 business activity should be above the normal line.”

Yet, like another Puritan in Babylon, Babson continued to be troubled by his law of reaction. For the third year in succession, he told the National Business Conference on September 5, 1929, that “sooner or later a crash is coming . . . sooner or later the stock market boom will collapse like the Florida boom.” The report of this speech, over the tickers of the New York Stock Exchange that afternoon, started a miniature avalanche of selling that wiped out several million dollars in the openmarket value of securities. The irony of this incident lay in the fact that in past years Wall Street had paid no particular attention to the sage of Babson Park. Its nerves were obviously bad.

But the market rallied, then headed straight into the debacle of October — whose sudden advent, under the continued bullishness of the Babson services, probably surprised the prophet as much as anybody. Yet his vague warnings were recalled, and his prest ige rocketed. Some, however, scolded him for his gloom — notably Irving Fisher, who agreed with Babson on little save the moral beauty of Prohibition. Humbler citizens began to feel somehow that if only Mr. Babson would give the word, the storm he had invoked would roll away.

Very soon, therefore, buckling under group pressure, Babson joined the boosters. Through 1930 he repeatedly hailed the beginning of better times, offering in the early summer “to stake my reputation that general business has seen its worst”; in February, 1931, with his happy phraseology Babson announced that “the best business beacons suggest that fundamental business conditions have struck bottom.” (This was the time when Brookmire more cautiously was working out the image of “the U-shaped bottom of the Depression,” which it might take the nation months if not years to traverse.) In those early days, when they were hanging Old Man Depression as once they hanged the Kaiser, a prophet of woe was regarded as a traitor to his tribe.


BUT as the depression, moving like a glacier, took its toll of discredited seers, it grew clear that the era of glib business forecasting was over. Beginning in 1934, the cold sobriety demanded by the Securities and Exchange Commission fell upon the utterances of Wall Street.

Now ascendant rose another star of prophecy, the news letter promising the low-down on current events, the news behind the news from which future developments might be gauged. Its origins stemmed, not from the age of confidence, but from the earlier aftermath of skepticism left by the Creel Committee, the claims of propaganda and counterpropaganda, censorship, and wartime tampering with news near its source. Soon began a spate of “now it can be told” books; presently two young Yale men, Briton Hadden and Henry Luce, started a phenomenally successful “news magazine” that offered the inside story of the news without obvious editorial comment; and Will Rogers could raise a laugh by drawling, “All I know is what I read in the papers.”

Percivai H. Whaley, former lawyer and newspaperman with the Curtis publications, is the pioneer of the modern news letter. Bolder and franker comment on national events, present or impending, was desired by those businessmen who got around, and who prided themselves on being hardheaded realists. In partnership with another Philadelphia lawyer-journalist, Henry M. Eaton, Whaley launched the Whaley-Eaton Service in 1918. It won swift success. From its circle of internationally-minded clients — diplomats, statesmen, bankers, industrialists — Whaley-Eaton solicited questions that often turned out to be well ahead of the pace set by newspaper thinking.

From a host of imitators, one formidable rival appeared in the person of Willard Monroe Kiplinger, Ohio journalist and financial writer, who in 1920 started his “Washington Letters” and soon won attention as the most breezy commentator of the tribe. For years he has maintained the largest circulation in this field, now conservatively estimated at 50,000 subscribers. The weekly Letter on white paper is supplemented by a green Agricultural Letter, an occasional brown Labor Letter, and a blue Tax Letter. They offer a grandstand seat at the passing show of Washington. Here are excitement, color, and rumor — the last sometimes flushed from the Potomac brakes only to be shot on the rise as a canard. The tone of urgency is heightened by underlining and by printing words in solid capitals. Omission of the definite article creates the air of a messenger’s breathlessness, posting with hot news from the Capital.

Once a year, usually in January, Kiplingcr holds open house to explain his methods, in a buff-colored “Shop-Talk Letter.” He tells subscribers about his permanent staff of eight men, who do the leg work. From some two hundred office calls which they make weekly, masses of material are reaped, then in editorial conference winnowed down to four pages. On Friday night the editor-in-chief in person writes the whole Letter, which is revised and mailed on Saturday, in time to greet every client at his desk on Monday morning. The assay of such professional visiting, Kiplinger finds, is higher than that of cocktail chat. No mystery clings to his methods, he assures subscribers, beyond the identity of those informants who supply fact and forecast — because their frank replies to frank questions rest on their anonymity.

With broad trends, philosophical reflections, and high-brow economic analyses Kiplinger has little truck. His professed aim is to survey the current scene “in hard-boiled businessman fashion,” telling his clients that they are “a class of men who can not he ‘kidded’ through the subterfuge of omission of unpleasant matters.” Constantly he stresses the importance of keeping a cool head while picking one’s way through the maze of rumor, and proffers his services as guide.

“Write or wire us if you need help,” he has often adjured his clients. “Query us on whispers, and we shall try to explain the FACTS. For business reasons it is important to maintain mental health,” he wrote in August, 1936, after exploding such horrendous stories as that Roosevelt was getting ready to call off the election and invoke martial law, that Landon meant Fascism, that a Jewish pogrom might break forth any day. (Those early years of the New Deal witnessed as much ill-founded sensationalism, among the prophets, as the Hoover regime had seen of mistaken optimism. On September 8, 1933, for instance, Babson told his Institute — as reported in the New York Times — that the current deadlock between capital and labor in America would soon be broken by the upsurge and “temporary dictatorship” of the middle class. “This dictatorship,” he added, “ will take the form of Fascism. Of course Fascism is only a temporary bridge in the natural growth of a nation.”)

Like all prognosticators, Kiplinger lays claim to strict impersonality. “Use these Letters for BUSINESS SLANT, not for partisan political slant,” he will declare, adding, when an event unpleasant to many of his clientele is imminent, “Appraisal is cold, without regard to hopes of either side.” Again and again, however, the political sights foreseen in his crystal ball have been somewhat clouded by washfulness, either his own or that of his subscribers, whose opinions he invites. In the summer of 1932 he kept placing Hoover well ahead of Roosevelt in electoral votes (“By the way, you pronounce it Rose-velt—two syllables”), but as the election drew on, he began to doubt his own figures. Early in the next election year Kiplinger began alluding to “the slipping-Roosevelt-of-1936” as against “the popular-Roosevelt-of-1933,” but in late October, 1936, he foretold the incumbent’s re-election even though “Roosevelt’s margin of 1932 is obviously cut way down this year.” Three days before the election he conceded Roosevelt only 277 electoral votes instead of the 523 he received.

Once more his clients, in Kiplinger’s phrase, had to sit and “wait Roosevelt out.” At the beginning of 1940, Kiplinger flatly announced: “Roosevelt will not be the next President.” On the eve of election day, November 2, 1940, Kiplinger confessed that no prediction was possible: “All that we can honestly say is that it looks like a toss-up.” Most recently, three days before the 1944 election, Kiplinger “coldly” picked Roosevelt to win.

Kiplinger owes much success to the creation of a friendly bond with his clients, an intimacy pitched midway between that of a club and a family. Occasionally the touch of whimsy gleamed. Christmas at Kiplinger’s was always a little Dickensian. Up to 1929 that annual Letter was written by William the Office Boy, full of folksy puns and ribbing of his employers. In his last appearance, on Christmas Eve, 1928, William confessed that despite the firm’s forecast for Hoover he had voted for Al Smith (being, like the janitor, a pious Democrat), and had made $112 on the stock market. By the next Christmas, poor William probably had lost his shirt; his Letter, at any rate, vanished forever, its place being taken on Christmas Eve, 1929, by a sober bulletin about Federal Farm Board policies.

Later years revived traditional Christmas greetings from Kiplinger to his circle, but no longer in the vein of the twenties, when our hearts were young and gay. The Tax Letter of December 19, 1936, following Roosevelt’s second election, is typical: “Despite taxes, Merry Christmas.” Even more leaden is the echo of season’s greetings on December 21, 1940, after the third election, rounding off a forecast of “national socialism” as the result of tightening Federal controls and the approach of war: “It’s not a pretty pattern. Anyway, for the present, a Merry Christmas,”


KIPLINGER’S anticipation of World War II began as early as 1935, when on the invasion of Ethiopia he foretold “general war in Europe, perhaps early in 1937, not later than 1940.” In the subsequent days of crisis, reasoning from past stereotypes betrayed Kiplinger into a good many errors. He ventured the guess, in the late summer of 1940, that the American Legion would throw great strength toward the isolationist bloc — basing his conjecture almost certainly upon the 1939 Legion Convention, with no allowance for the changing mood which, after the fall of France, raised by many degrees the interventionist warmth of the next Convention. Assumption that Stimson’s appointment as Secretary of War was merely a political bid for Republican votes led Kiplinger to announce on October 12, 1940: “Stimson WILL resign from War after elect ions. It’s now certain” — a forecast to which he stubbornly clung as elections came and went. Through implicit faith in old signposts, he also cast Leon Henderson as head of the Defense Advisory Commission, because “Roosevelt won’t trust industrialists with power over broad policies” — although the appointment finally went to the board chairman of U. S. Steel, Edward R. Stettinius, Jr.

Kiplinger apparently had no inkling of Hitler’s invasion of Russia in June, 1941, and then like many commentators — some with Russian experience — announced at the start that Germany would win an easy victory. On August 2, this event was expected within sixty days; by mid-August, only a month longer was assumed. All through that summer, however, Kiplinger reported a general Washington forecast that, we would be in a shooting war “by October,” while he complained steadily at the lack of Administration frankness on this score. In October his auguries for war with Japan steadily grew bolder, although he was prone to see that nation’s defeat in six months, at the longest. On November 29, Kiplinger declared that if Japan fought at all, war would come within thirty days. The next Letter, on December 6, avowed that Washington is “prepared for the worst.”

In the course of hostilities his Letters have done valuable service, advising those who want or have war contracts, disseminating information about Federal controls and regulations that local newspapers miss, and explaining tax laws in a popular style. Now and then, in mellow mood, he has addressed himself to long-range subjects such as rarely figured in earlier days. The last Letter of the year 1943 was a forecast of population trends in the United States, which was brought usefully back to heel by thoughts on the economic effect of war babies: registered upon makers of infants’ clothing now, ten years hence upon manufacturers of teenage goods, with the prospect of crowded grade schools in the 1950’s and high schools late in the decade, with a bumper crop of college students in 1960, and a brisk demand for household goods about 1965 as war babies become homemakers.


A MAJOR reason for many business forecasters’ poor showing, in the early thirties, arose from their failure to reckon with the impact of foreign affairs upon domestic business. The psychology of our Hawley-Smoot tariff days was not a little smug. This economic isolationism failed to see that financial crises in England and Germany — leading to the Hoover moratorium and later to Roosevelt’s abandonment of the gold standard — were closely enmeshed with our own destiny. In educating American businessmen to greater global consciousness, no service has played a larger role than Whaley-Eaton. Among its estimated eight to ten thousand subscribers, the majority trust its judgments, while a minority suspect it of Anglophilia.

In calling the turns of the present war, WhaleyEaton’s record is checkered. Astute forecasts are drawn apparently from high officials who talk more candidly to Whaley-Eaton’s socially-minded staff than to the press. On the other hand, a well-bred dignity of tone has sometimes lulled readers into complacency, while the newspapers in their raucous way were getting nearer the truth.

Seven years ago, Whaley-Eaton’s listening posts in London and Paris caught all the echoes of appeasement, and believed too many. In May, 1938, Hitler’s meeting with Mussolini in Rome led to the inference that “ the cause of peace is helped rather than hindered” — a hopeful French interpretation — and London was confidently quoted declaring that Hitler would never dismember Czechoslovakia against the wishes of England and France. On August 16, Whaley-Eaton cited informed opinion that Britain and France were too strong for Germany to handle, with or without Italy, and that “Hitler agrees with this opinion.” By the etid of this month, with the divided mind of a forecaster, Whaley-Eaton admitted that “war could break out tomorrow — or this afternoon,” but closed this Letter with comfortable words: “The best opinion is that European war can and will be prevented.”

On the eve of Munich, September 13, 1938, Whaley-Eaton mingled scare rumor with wishful assurance. “There are reports that Germany, not being too certain of British inaction, has earmarked 1,500 planes for a raid on London, This seems doubtful. These planes might reach London before the British could set up an adequate defense but ‘how many could get back to Germany’? The French air force, fully prepared, would block the way.” Yet in next week’s Letter appears this sage remark: “The weak point in the [Allies’] plan is that Russia and Germany might reach an accord in the coming months. . . . Such a combination, if it looked westward, might doom France and Britain.” This bulletin also predicted a Japanese military alliance with the Axis “in the near future,” while the next brushed aside popular talk about Nazi bluffing: “Hitler wants war.”

After Munich, Whaley-Eaton began to regard Chamberlain more coolly, ceasing to apply to his policies the earlier label “realistic.” Nevertheless, with its chief foreign office in London and its pipelines flowing from Allied, not Axis, chancelleries, Whaley-Eaton itself continued to fall somewhat short of realism. In January, 1939, Hitler’s announced resolve to match Britain’s submarine strength was taken as pledging a lull in which to build them, which therefore “can guarantee European peace for 1939.” Whaley-Eaton’s last Letter on this month was headlined “No War”; that of February 28 cited military judgment that. Germany, with a young army and a shortage of seasoned officers, “will not be ready for a major war for at least five years. . . . For several years Germany must remain at a disadvantage toward France, whose reservists number about five million men.” As storm clouds grew darker that spring, in flashes of candor Whaley-Eaton gave its clients truer glimpses of the state of Europe, even though such gleams came from the hesitant Allies, not from capitals where decisions about war were being made.

Still, the Whaley-Eaton record during those delirious days was better than most. In general, the infallibility of seers in this crisis sank, through sheer wishfulness, to a low comparable to that of 1929. As one instance out of many, we might take the Reader s Digest for September, 1939. It featured an article by former President Hoover, boldly asserting that France and England would not fall if attacked, “but if they do fall, the exhaustion of the dictators will be such that these countries will leave us alone for a quarter of a century at least.”

In prognosticating our war in the Pacific, WhaleyEaton wrote shrewdly on October 28, 1941: “War with Japan is now regarded in both London and Washington as practically inevitable. It is also believed that Tokyo will strike without warning — unless the Allies beat her to the draw.” The service’s chief miscalculation was made on the score of Japanese strength, and this despite Whaley-Eaton’s Tokyo connections. On October 7, 1941, they reported: “Competent American military observers have little respect for the Japanese armies,” and a month later stated that Japan had been so hamstrung by the embargo that if war broke out. she could be handled summarily. “It is possible that this could be done rather rapidly. Nor need it require the dispatch of American troops in quantity. . . . Singapore is no longer weak. . . . The Japanese population is war weary, and the best of its manhood is already in China.”

Unluckily enough, Whaley-Eaton’s bulletin on the historic date of December 7, 1941, veered toward minimizing the momentary situation in the Far East , seeing greater immediate significance in “critical negotiations” between Berlin and Vichy. “Japan’s sedate statesmen,” we are told, “agree with their naval high command that war with the United States would bo suicidal. But they cannot control their army. . . . Warlike statements by the Japanese Premier do not mean much. They are for home consumption and to encourage the Axis.”


THE major weakness of most Forecasters, as indicated here, lies in their too patent eagerness to adopt a bullish, complaisant, reassuring outlook; in other words, to act upon the axiom “The customer be pleased” — which, though successful in nearly every other business, is no ideal motto for forecasters. One notable exception, however, is a service which offers the unsweetened cup of prophecy, with a brisk air of stoicism that some of its subscribers have been prone to mistake for sadism. Several years ago the New Yorker described this outfit as “Cassandra, Inc.” It has achieved, however, the steadiest record for accuracy among current forecasters.

This is the Research Institute of America, whose master minds are Leo Cherne, young lawyer from the Bronx, Carl Hovgard, former Kansas Bible salesman, and Leon Henderson, late chief of OPA and the probable future economic director of Occupied Germany. This organization started in 1935, from a sudden hunch about the need for explaining the Social Security Act to bewildered businessmen. From a one-room office and a two-man staff, the Institute has expanded into a building named in its honor, a Manhattan roster of experts, and a large and active Washington staff. Fortnightly appears the Institute’s Business and Legislation Report, neatly bound in pale-blue covers with silver eyelets, an embossed seal, and marginal rubrics. Its idiom is also a little lush, but its sense assays remarkably well.

Most thorough and specific of all such services, in its business analyses—devoting three or four pages to a topic which others might dismiss in as many lines — this Report represents hard work by bright young economic and legal experts rather than the more readable gleanings of Capitol Hill gossip. Only occasionally does the Report deviate into such personal dicta as its well-quoted remark about the late Wendell Willkie, early in 1940, that “ideologically this one-time campus socialist comes closer to antipathy for concentration of big industry than the Hyde Park country squire.”

Clients of the Institute have to make their contribution to the common pool of business facts by answering a questionnaire about production, sales, profits, and the like every three months. Other services of course invite partnership with their readers. Kiplinger invites the opinion and prediction of his subscribers; similarly Whaley-Eaton examines the bubbles of perplexity that are beginning to rise.

Whether the Institute’s Report is truly objective has been a subject for debate. Certain liberals, generally out side the pale of subscribers, have condemned the Institute as pandering to reactionary business — in telling executives, for example, how they may cut all the legal corners around the Wagner Act. In reply, the Institute can claim that its recommendations at least are strictly legal, none having ever been invalidated by the courts. More often, numerous readers among the Institute’s twenty to thirty thousand subscribing firms suspect that it caters to the New Deal. So far as prediction goes, however, the Institute’s most spectacular record has been built upon guessing the mind of the Supreme Court, in both conservative and liberal moods. Shrewd knowledge of personalities and of their reaction both to legal issues and to the imponderables of public opinion, plus an admitted streak of luck, has led the Institute correctly to foretell for the past ten years every decision of the Court affecting the New Deal, sometimes against odds that seemed long.

Eight years ago, when lawyers of the National Association of Manufacturers, the United States Chamber of Commerce, and the Liberty League were confidently proclaiming that the Supreme Court nemesis of AAA and NRA — would shortly invalidate the Wagner-Connery Act, Cherne told his clients that the Court would uphold the Act and that they had better prepare to make the best of it. The five-to-four decision of April, 1937, delivered him from the growing wrath of his patrons. Similarly, early in the same year he predicted the victory ol the CIO, with its instrument of the sit-down strike, over General Motors. Almost a thousand subscribers quit over this “ridiculous” forecast, and the Institute probably would have been ruined if the fait accompli had not arrived in the nick of time.

Also unpopular with a vocal minority of businessmen was the Institute’s branding of Franco as a Fascist, during the Spanish Civil War. In the face of considerable clamor, Cherne and his associates declined to retract. In respect to wars and rumors of wars the Institute has been almost as successful as on the domestic front, though without WhaleyEaton’s wealth of detail. In June, 1939, Cherne published a book on adjusting private business to war, envisaging priorities, price ceilings, and wage controls in much the way they have happened. His success was less the result of second sight than of his intimacy with Leon Henderson and other planners who were not sorry to see the public braced for the inevitable. But, beyond a few pacifists who cried him down as a warmonger, not many noticed this book.

More read his sequel on mobilization day, published a year later, containing information supplied by his friend Louis Johnson, Assistant Secretary of War, and from Cherne’s contacts as lecturer at the Army Industrial College. This forehandedness helped to make the Institute a kind of unofficial spokesman for M Day two years before Pearl Harbor, and for V Day at least a year before the Allied invasion of Europe.

As for the war itself, as early as 1938 the Institute took as its keynote in foreign affairs “Watch the Far East!” In the spring of 1939 it foretold war provocation as coming from Asia rather than Europe, and incidentally predicted Roosevelt’s third term. (Anticipation of a fourth term, early in 1944, probably took less daring than a concurrent forecast that the Little Steel formula would stand unrevised through election day.) Present horoscopes announce a depression to follow victory in Europe, with cutbacks in production so severe as eventually to throw nineteen million men out of jobs, while promoting the retreat of organized labor, a greater centralization of business, and the ascendancy of pressure groups. “An upswing beginning about the middle of 1946” is a sop to the hopeful.

To hazard a forecast about forecasters, it seems certain that the golden age of investment counseling and stock-market prediction has gone forever, but that the conservative business services will continue to survive by mixing cautious prognostics of “trends” with their solid work of fact-finding and analysis, much as they did before the last Great War. In most respects, however, that pre-1914 world, which now seems like a summer of idyllic serenity, has vanished never to return. The anxious thirties, approaching the crest of a global war, will find their counterpart in the latter forties, seething and boiling in the backwash of that war. In such a world of flux, national and international politics have stolen the show, as well as the real power, from big business. Those prophets are now in demand who see, or think they can see, over the surge of current events into the next trough whither we are tending.