New Britain herald., 1930-09-22
BUSINESS AND WALL STREET

men and industrialists being quite firmly convinced that the turning point in the slump has about come and that from now on a more or less steady improvement is expect ed; indeed, the improvement is all ready felt in many lines. But in Wall street the pessimism which results in bear raids and a refusal of stocks to advance appreciabIy still rules the roost.
 Wall street has for decades prid- ed itself upon being thoroughly post ed on business conditions and pre- tends to be a species of business barometer. Indeed there are many observers outside of Wall street who have regarded the Stock Exchange as such a barometer.
 Supply and demand is supposed to cause the prices of stocks to go up or down. There are two kinds of demands, however: The demands of bona fide investors who usually purchase stocks outright, and the demands of spectators who do not purchase for investment but in order to realize a profit on the quick up turn. The latter are vastly in the majority.
 Being in the majority, the specu- lators naturally have a tremendous influence Tn determing the price ot stock through their action. Let enough spectators concentrate on certain stocks and it will go up in price regardless of their merits or lack of merits. It has happened hundreds of times in stock exchange history that quite doubtful stocks have scared under such influences. On the reverse side we have the picture that when spectators fail to become interested in stocks, leav- | ing them entirely for the legitimate | investors, the prices show a ten dcncy not to fluctuate much.
 Just now Wall street remains filled with spectators; but they are the professionals. They of them selves have little influence in the values of stocks. It is when they bring in the general public, an army of speculators thousands of times larger than the professionals, that stocks can be made to swing mer- rily upward.
 What made stocks soar during the boom? The millions of spectators in every city, town and hamlet throughout the country, They sup nlied an enormous demand that piled "value," regardless of wheth- CT dividend returns justified It. Everybody was buying stocks on margin in order to sell to somebody else at higher price. Nobody paid any attention to reports or corporation earnings; such effort was q waste of time under the cir cumstances.
 Now the remaining professlonaI speculators in Wall street are utll- izing most of their time in digest ing earnings reports and attempt ing 10 conclude from these whether business is getting better. As the earnings reports reflect business during past months, Wall stree' sneculators gain very little comfort from the reports. They are like mer at the end of a railroad train, see ing the scenery in the rear, not IT | front.
 Others, like the engineer Tn the | cab seeing what's ahead, are more reliable judges of the future.
 Signs showing that there is under way a turn for better include the record that foreign exports lh- creased the past month, car loao- ings have increased, the movemen' of crops has begun, money IS plent- iful at low interest rates, the bono market is active-whiCh many eX- perts say is a sure sign of better stock market to follow-and tue bears have been forced to rely or news from foreign sources to bea' down the prices of stocks so long as nervous spectators are willing