Evening star., 1928-12-30
BY IRVING FISHER,

Professor OF Economics, Yale university.
TIME recent "crash" in the stock
market has not yet brought the
stock price level down to the
level of past years. On Decem-
ber the weighted daily index
of Stock Exchange prices of so IN
dustrial common stocks calculated oy
the Standard Statistics Co. showed a
loss of Is per cent from the nigh OF
the year on November 80. But the
average price of these SO stocks still
was Is per cent above their high point
for 1927 and more than two-thirds
higher than the high" of 1926.
Notwithstanding the crash" stock
prices and shares traded are still gam
boiling upon the mountain peaks which
look down upon the high stock market
plateaus of 1925 and 1927. The reasons
for my conviction that common stocks
will remain for some time at this higher
Mtitude are set forth below.
But this does not mean that there
will be no more lulls and recesSionS. On
the contrary. the present lull seems
likely to continue and deepen for a
month or so. The persent major bull
market has persisted, with minor or
moderately severe recessions, since 1928.
The so-called Spring rise" of stocks
advance of 13 per cent, as recorded by
my Weekly Investors Index, weighted
by shares outstanding The break dur
ing June brought loss of more than
half of this advance. The market did
not fully recover until August, after
which it continued to rise until the
index for November was nearly % per
cent, and for the week ending Novem-
ber 80, 35 per cent, higher than the
index for February. That was after the
election of Mr.. Hoover-celebrated by
100000 and 6,000,00 share-days, with
daily advances from 5 to so points in
many stocks. November recorded the
tremendous total of more than 100,-
OO0, 900 shares traded on the New York
Stock Exchange, and values of more
than 200 representative stocks advanced
by $3.750 100000 During the year my
index of the so stocks most actively
bought and sold in each week rose from
2335 for the week ended December 8,
1927 (and on the base of 1926 as 1907,
to 6562 for the week ended November
80. 1923. That represents a profit of
181 per cent in the buying and selling
each week of the weekly shifting list
of the so most active stocks during the
year.
December Recession.
The December recession, more pro-
nounced than the fall in June, followed
the announcement of more than $780,
0O00 900 increase in brokers' borrowings
during November, Secretary Melons
pesSimistic remark that the outside pub
! lie believed and acted as if the price
of securities would indefinitely ad
| vance," and the increase of the call
money rate to IL per cent on one of the
days of heaviest trading. Ten per cent
on call loans had been repeatedly ex-
| acted during half, a year, and loans on
time had several times risen to Z and
| 7la per cent.
At the governors conference in New
| Orleans during November. Gov. Bibh
| Graves of Alabama denounced the
| 'evils of mad gambling in stocks and
I cotton" Gambling, he said, had be-
come the most serious menace tc
American civilization and progress.
Weightier authorities had likened the
boom in Wall Street to the dizziest
period of the boom in Florida real
| estate, when most of the exchanges
were being made by individuals. whe