The Washington times., 1928-01-21

But this does not Apply 10 Tie
stock market. How the current
high prices for many stocks nave
been maintained in face OF the
apprehension felt in high places IS
bevond my comprehension. Al
most every influential financier
talked with admits, confldenually'
that he looks for a sharp rail- IN
stocks which have been Favored
by spectators.
But in the daily battle on the
New York Stock Exchange the
bulls have not been compelled 10
give much ground thus far. One
hour. one day, prices decline; the
next hour. the next day, they re-
cover part or all of the loss. The
net change this month has peen
downwards but not at all sensa-
tionaIly so.
NV guess is that one OF these
DAYS, after an outburst OF ire
mendous trading, quotations VIII
fail to snap back.
Encouraging Reports
The railroads are placing en-
couraging orders for materials
and equipment. Motor manrfac-
turers are also increasing their
steel purchases. Utility companies
are launching very ambitious I'M
provements and extension pro.
grams. The American Telephone
Company is this year Spending
S3S, OOO, 900 on new long-distapce
plants alone, a record sum.
Philadelphia ranks close to Chi
cago in volume of bank clear
ings. And Boston follows closely.
New England isn't nearly as dead
as often represented. Ii my
humble opinion New England is
now laying foundations Tor q
progressive movement likely to
attract nationwide attention.
"a billion dollars increase in
brokers' loans during the last IL
months is q mere drop In tnG
bucket" observed one highly sue
cessful Wall Street man. 1t isn't
as much as the increase in the
securities of one corporation alone
during 1927. And when you tig-
ure the increase in the market
value Of all stocks add also the
billions of new securities that
have been issued, the increase in
loans, instead of being regarded
as extraordinary, should be re-
garded as extraordinarily small.
The corporation he had in
mind is General Motors Al statis-
tician has figured out that on
January 1, 1926, all of the
General Motors securities had
market value Of $3.50, 900 900: that
on January /. 1927. their value
was 81, 450. 900, 900; and that on
January I of this year their
quoted value was $2,569, 900. 00!,
a gain in one year of 500, 900 900,
and in two years of $1.S19,O0O,'
900.
Little Time Lost
My own information is that
Federal Reserve authorities take
quite different view of loan
expansion. But, after all, 1t is
difference of opinion which makes
a market.
Well, the Washington politi.
clans have lost little time in
trying to raise a noise.
Senator La Follette's attempt
to order the Federal Reserve
Board to cut down loans on Sc
curities is a specimen of the
''statesmanship" which, apparent
ly, the business world must ex-
pect. 1t would have been in.
teresting had the young Senator
been asked to suggest just how
the Reserve Board could slash
loans.
That roar of thunder which
has been ringing in your ears
doubtless has been the nation
wide clamor to have every cleo
trio light and power company
in the country probed by poll
ticians!
Seriously, do you know of the
slightest agitation for such
probe? What specific charges
could have been lodged to JUSTIFY
the sweeping action proposed by
q handful of Senators? Courts
rigidly rule against fishing e6pe-
ditions." Clearly that is what
a few politicians are eager 10
conduct. We hear a lot about
States rights. Just what State
utility commissions have petitioned
the Senate for protection against
iniquitous electric power com"
panies?
Fortunately, political ballyhoo-
ing doesn't brighten as 1t once
did. We are gradually emery
ing from being nation OF ECO
nomic illiterates."
At that. conditions throughout
the country are not so tnvuiaera"
bly, prosperous that political &C.
ton calculated to cause dis
turbance should be lightly re.
garded. Our present prosperity
isn't exactly foolproof.
The Way of the World
It's the way of the world.
After the spectacularly triumphaI
introduction of his new car. Mr..
Ford has run into a streak of
bad luck. The discovery was
made that the single system of
brakes on the Ford car ruled it
off the roads in various States.
The result was that the company
had TO take immediate steps to
remedy this defect. Even the
cars already sent out will have to
be supplied with an additional
brake.
Then the Federal Court in
Detroit has Just awarded S367174
damages against the Ford Motor
Company for unauthorized use
of a rust.proof patent"
Meanwhile mass production or
the new Ford is still quite A
way off. That Is one reason why
other makers of low-priced cars
are speeding up production. Ford,
they state, will not be an impor-
tant factor this spring or summer.
(Copyright, 1928, by B. G. Forbes)