New Britain herald., 1929-10-30
THE FUNDAMENTALS ARE
 SOUND

SOUND
 With right has President Hoover stated that the Fundamentals or business are sound. The Federal Re- serve Board had a meeting the other day. at a time when stocks on Ex- change were slipping with dizzying rapidity. The Board failed to discuss the circumstance, 80 far as anyone knows That in itself was regarded as significant.
 Omcials in Washington, agreeing with the President regarding the secure foundations of American in- dustry and trade regardless of what happens in the stock market, are nevertheless alarmed at the possi- biIity of a loss of prestige to the administration. It Is perhaps true that in the eyes of many the Hooyer-and the Coolidge-admin- istration before 1t was credited with having magical powers over the stock market. Both administrations radiated confidence and this no doubt was an underlying factor in the steady increase of stock values since 1914. But neither administra- ton warned against the ultimate re- suits of excessive speculation. When these results materialize the funda- mental conditions of business seem to have little effect upon the pecu- liar psychology that sways the minds of the spectators. They dump their stocks and take their losses, and marginal accounts by the hundreds of thousands are wiped out.
 Now what are the fundamentals7 Naturally, the normal demand and supply of trade. Because Anaconda dips ever so many points does not mean any firm using copper will use any less of 1t. Because U. s. Steel sags does not mean that anyone put ting up a building will put less steel into 1t. And so on down the list. The fundamentals means that there are certain essential necessities the use of which Is not remotely affected by the turn in security prices. These prices are affected by other factors.
 True, 1t is possible that thou sands of people who have been bit ten in the stock recession will have less money than they had before. But they will have less of surplus, not a lessened earning power. At the most they will purchase fewer luxuries and the luxury trade, chiefly cen- tered in the large cities. will feel the brunt of such a turn in luck. The average individual, however, will eat and wear just as much, will wear out his automobile just as quickly and will need just as much gasoline as before. The great majority who lose as securities descend lose paper profits. The marginal spectators may and often do lose more; but a marginal speculator usually is an in dividual who can afford to take risk, and Is intelligent enough to realize what he Is doing when he as sumes It. The small body of specu- lators on margin who went Into the stock arena virtually bindfolded, of course are pitiful examples of cir cum stances. They may not even yet know what 1t is all about, except that they realize luck failed.
 In closing, it IS fitting to remark that the Fundamentals of sound trade are just as good as they were before stocks began their epochal climb. They were not bad at that time; and even should the levels of average prices be reduced to the strata where they began-which evidently no one at this moment deems likely-the Fundamentals will be just as good as they were before the rise. Which Is by the way Of say ing they are just az aound now as they were In 1924 or will be in 1895 or any other year.