IS BUSINESS GOOD IN PRESIDENTIAL YEAR?
OF VITAL INTEREST TO THE MUSIC BUSINESS
A REMARKABLE BUSINESS REVELATION
IT MAY SOUND like sheer lunacy to suggest that political cam-
paigns are good for business and the markets, and that Presi-
dential years should be contemplated with more-than-average
confidence.
Yet an analysis of the past 27 national contests will sub-
stantiate the foregoing assertions to a remarkable degree.
The accompanying diagram gives the year in which each
of the battles were fought, the names of the winner and loser,
respectively. Then successively from left to right salient feat-
ures are given of the performance of business and prices in
three basic markets during the year as a whole, or at least
from, say, May to October.
Nature of Presidential Campaigns
Presidential election campaigns usually are periods of
hectic uncertainty, leading one to think that they normally
depress business and the stock market. But do they?
Even in 1860, when the slavery controversy became fever-
ish and the then regularly conservative Democratic Party
split and Lincoln was considered radical, the stock market
marched to a four-year high in October, 1860.
It appears that the heat of political battles does not neces-
sarily destroy business but often warms up the situation and
makes business better.
Business Outlook For 1940
Now what are we to make of all this? What are we to
expect during the spring, summer and fall of 1940 because of
the fact that this is another one of those years? What does the
27-campaign record say?
First, bond prices which one might presume to be most
immune really give the appearance of being the most sensi-
tive of the four series tabulated. But, even so, their record is
only what one would normally expect to find in any equal
number of "in-between" years, that is, a stand-off, the good
and the bad being almost evenly matched.
Second, it appears that in 19 out of the 27 years it was
unwise to be discouraged during the first months of the year
about the future of commodity prices. And it is extremely
doubtful that political activities had very much to do with the
weakness in wholesale prices during the other eight years.
Third, in 18 out of 27 years, a gloomy forecast for share
prices for the second half-year, or for the year as a whole, was
completely unjustified, as subsequent market trends revealed.
Rather, in two out of every three political years the stock
market gave a commendable account of itself, and worried
only those who had sold, or sold short, on the strength of a
superstition.
Finally, as for business itself, the record shows that in 21
out of the 27 campaign years, industry, trade, and commerce
held their own, improved, or were in a prosperous state.
In the past century or so, on only six occasions was it pru-
dent to trim sails during the first half of a Presidential year.
Only six times was it smart to be skeptical on June 1st regard-
ing the outlook for the next five months while the battle for
votes was thickest. That is a better performance than a random
selection of 27 spots would probably reveal.
Election years apparently owe no appologies for the kind
of business conditions which usually prevail. Right now we
have to go back to 1920 to find an instance where business
declined during the most active part of the campaign, June
to October, inclusive.
[Editor's Note; This chart will be valuable to be kept for reference purposes.]
CAMPAIGN YEARS IN WHICH BUSINESS WAS GOOD
CANDIDATES
YEAR
GENERAL BUSINESS
COMMODITY PRICES
1832
1836
1840
1844
1848
Jackson vs. Clay
Van Buren vs. 4 others
Harrison vs. Van Buren
Polk vs. Clay
Tyalor vs. Cass
better than average
very, very good
improved slightly
on even keel all year
steady
sharply higher
1852
1856
i860
I 864
1868
Pierce vs. Scott
Buchanan vs. two others
Lincoln vs. two others
Lincoln vs. McClellan
Grant vs. Seymour
rose slowly all year
better than 1855
better than 1859
good
rose slightly
in unbroken rise
rose, July-Oct
very good
show net gain for year
net rise, May-Dec
1872 Grant vs. Greeley
1876 Hayes vs. Tilden
1880 Garfield vs. Hancock
•884 Cleveland vs. Blaine
T888 Harrison vs. Cleveland
rose slightly, June-Oct
good
1912
1916
1920
1924
1928
Wilson vs. two others
Wilson vs. Hughes
Harding vs. Cox
Coolidge vs. Davis
Hoover vs. Smith
in uptrend all year
very active all year
higher
advanced rapidly
sharp rise in 2nd half
good
higher in 2nd half
steady
recovery began in July
best in five-six years
higher
advanced (net) in year
only slightly below '95
higher than in '99
showed net gain for year . . . . rose during 2nd half
improved, June to Dec
steady and higher
Sources: First 11 campaigns—Ayres' Indexes; other 16 campaigns—Barrons Indexes.
E
EIGHT
steady
at year's high in Oct. . .
up 23%, Jan.-Oct
in rising trend
at
long-time high in Sept
at four-year high in Oct.
17-year high in Oct.
at four-year high in Oct.
Cleveland vs. Harrison
McKinley vs. Bryan
McKinley vs. Bryan
Roosevelt vs. Parker
Taft vs. Bryan
PAG
sharply higher
at record high in Sept.
1892
1896
1900
1904
1908
1932 Roosevelt vs. Hoover
1936 Roosevelt vs. Landon
I94O
steady and higher
steady
very good
improved, April-Oct
STOCK PRICES
BOND PRICES
show strength
strong
rose, May-December
continued rise
rose, April-October
steady
moderately higher
stronger
in rising trend
up 50% net, July-Oct.
rose smartly, Mar.-Oct.
rose sharply, Feb.-Oct.
in good rise, Feb.-Sept.
up 12% Apr.-Oct. . . .
rose, May-Oct
in upward trend
rose, May-October
up 34%, Feb.-Oct. . . ,
sharp recovery, May-Oct
rose all year
By
Courtesy of BAR
up 50 %July-Oct
up 23%, Jan.,-elect, day
RON'S, The National Financial Weekly
PRESTO M U S I C T I M E S
Enhanced content © 2008-2009 and presented by MBSI - The Musical Box Society International (www.mbsi.org) and the International Arcade Museum (www.arcade-museum.com).
All Rights Reserved. Digitized from the archives of the MBSI with support from NAMM - The International Music Products Association (www.namm.org).
Additional enhancement, optimization, and distribution by the International Arcade Museum. An extensive collection of Presto can be found online at http://www.arcade-museum.com/library/