Statistical Seer

BUSINESS & FINANCE

Leonard Porter Ayres describes himself as a "drab old man." Spare, greying, humorous, he is executive vice president of Cleveland Trust Co. and the author of that bank's famed Business Bulletin, a little four-page monthly that is read by at least 40,000 people and quoted by the Press for millions more. .In simple charts and simpler English he "tells things which the bank's directors and customers want to know."

As a seer, Colonel Ayres is by no means infallible. Though he viewed the 1929 stockmarket with a jaundiced eye, he was talking about the "last phase of the Depression" as early as the autumn of 1930. He can analyze other people's analyses with devastating results. Yet his own conclusions are often challenged, and his vision is sometimes curiously narrow. But given a popular economic delusion, he can demolish it in one swift paragraph. His prestige has grown uninterruptedly throughout Depression, while the stature of other economic prophets was shrinking rapidly. Today he is one of the most-quoted bank economists in the land.

Last week in the current issue of his monthly business review, Analyst Ayres undertook to destroy the common faith in common stocks as a hedge against inflation. With the aid of a chart showing the course of stock prices in terms of the cost of living, he reviewed the record in France, Germany and the U. S. during the War and post-War inflation. If stock prices had risen as fast as the cost of living, Mr. Ayres's bold, black zigzags would have fluctuated close to the basic chart line 100. The U. S. index, however, dropped as low as 50 during the peak of post-War prices. The French index showed almost the same thing. German common stocks did even worse, the index dropping nearly to 10. When the mark lost all real value it stood at only 35.

"Clearly the purchase of stocks did not afford a good hedge against price inflation in this country at that time, for the primary purpose in buying stocks in such a period is to seek protection against the advances in the cost of living," the statistical seer concluded gloomily. "One of the clearest of the lessons to be derived from the European experiences with inflation is that there are no good hedges against it."

Born 56 years ago in Niantic, Conn., Colonel Ayres was raised in Boston, got his start teaching school in Puerto Rico, where he took up statistics on the side. Later he worked for the Russell Sage Foundation in the dual capacity of director of education and director of statistics. During the War he became the Army's first statistical officer, rising to the rank of colonel. In 1918 he went to France with Woodrow Wilson as statistical officer of the Peace Commission. He has no hobbies, little social life, is seldom seen outside his bank except when making speeches. He says he has "done nothing interesting and is not interesting."

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