Evening star., 1926-04-04
FURRY IN STOCKS
PUZZLES OFFICIALS
Government Leaders Deny
Outlook or New Policies
Were to Blame.
BY DAVID LAWRENCE.

AS usual when things go wrong in
the New York stock market, the num-
Der of inquiries as to conditions IN
Washington increases In other
words, financial interests have got
into the habit Of looking to the Ma
tional Capital to learn if anything ad-
verse is in the wind. For several days
officials have been asked for their
opinion on the future. and particularly
if they saw anything coming of a
fundamental character which might
affect the prosperity of the country.
The inYariable answer has been that
Washington sees nothing in prospect
which could materially affect the
economic condition of the country. So
far as the New York stoclN market is
concerned, officials here have long
ceased to try to understand the
reasons for the rise or fall of stocks.
In fact, they have begun to insist
that there is too much significance at
tached to action taken in Washington
as it relates to financial markets.
1t is admitted that the Government
has become more than ever a factor
in American business and foreign
trade, but on the other hand it is con-
tended that what the Government does
is fundamental and is visible to
everybody. The theory that the Gov
ernment has some hidden plan Which
might be sprung on an unSuSpecting
public and thus upset market values is
not given serious consideration here
any more.
Policies Slowly Developed.
The policies of each administration
so far as business is concerned, have
taken a long time in almost every
case to be evolved. This means am
pie opportunity for business to adjust
itself to change.
There have been in recent weeks
two or three things which have re.
flected a tendency on the part of the
Government to look closely into the
character of proposed mergers or to
investigate alleged instances of re-
Straint of trade. The Interstate Com.
merce Commission. the Federal Trade
Commission and the Department Of
Justice all have played their part in
examining these questions, but it can
not be said that any fundamental
change in policies is involved as the
Government has always insisted upon
inquiring into possible violations Of
law. The fact that Government
agencies are scrutiniZing closely va
rlous mergers is not to be taken as
meaning that all mergers are banned
Conditions Believed Good.
Fundamentally the situation is not
bit different than it has always been;
in other words, each case stands on it's
own bottom. 1t is not believed here
that the cautious attitude of the Wash
ington Government with respect to
business combinations, has had any
material effect on stock market opera
tiOnS as a whole, and while Washing.
ton does not profess to know much
about the fluctuations Of markets, the
authorities here informally express
the opinion that natural reactions are
inevitable in the cases of those com
panies whose stocks have been over
estimated in value.
BaSically, Government officials feel
that the economic condition of the
country is unusually good. The fact
that receipts from income taxes even
under the reduced rates were larger
than anybody estimated is offered as
conclusive evidence that the United
States is in much better condition
than has been generally supposed.
While prosperity will be more or less
a political issue this year. and it is
important for both political parties to
know the truth about economic condi-
tionS, the fact remains that the Ad-
ministration here shows no signs of
nervousness at all. Indeed, the con
servative members of the Administra-
ton are emphatic in their statements
that conditions are likely to grow even
better in the next few months because
of the stimulus that has been given
business as a result of the lower rates
of taxation.