The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1934-11-13

points under the July high. ct
must be remembered that it is
only a select list of industrials
which has made new highs, and
that any broad average of a hun.
dred or more stocks is still within
the old trading rangeO
But unquestionably a change
has come over the market since
the elections. After a brief hes
itation, prices moved up on in
creased volume. 1t soon became
evident that while the financial
community does not believe in
the New Deal, it's leaders have at
last decided that it is necessary
to adjust themselves to the ex-
pertinent, and to try to make the
best Of it.
Apparently the prevailing idea
now is to swim with the tide.
The game will have to be played
under New Deal rules; but some
sort of a game must be played,
and if "Wall Street" can't make
gold money, they will do the best
they can with credit or silver
currency.
What it amounts to is that the
business leaders have been forced
to cooperate" They are now
going to man the pumps, to force
bank credit into circulation. The
people have decided that they
want more money and credit
dealt out by government, and
business men and bankers are
now going to "Sit in"
They apparently see nothing
but q choice of evils, and prefer
to run business on artificial
credit rather than give business
mp to the Huey Longs and Up
ton SincIairs.
So government spending and
lending are going to increase,
and the housing drive" and "di-
rect loans are going to be
pushed. Sound banking prin-
ciples are in the discard, and
known credit abuses are being
accepted. Thus such optimism
concerning business as there is,
is essentially based on initiation.
With business and banking
leaders Cooperating" the only
thing that could now stop infla-
ton would be a flare-up of
Socia1iStic radicalism which would
threaten to cause such govern
ment control, or labor policies, or
Soak-the-rich taxes, that the new
born spirit of cooperation would
freeze to death. But it is evident
that the leaders feel that they
have the Presidents assurance
that he can and will prevent such
a flare'up.
At the moment, the markets
action suggests little reaction,
the performance on Friday and
Saturday resembling that of
August "a and Is. The increase
in volume and number of issues
traded, while prices halted on
Saturday, should be noted. There
has also been some tendency for
asked prices to lag, which suggests
distribution. Moreover, business
activity is none too stimulating.
But the most active stocks have
continued to rise. Large operators
now seem inclined to do some
thing on the bull side, and the
public appears to be showing a
little more interest. The market
has shown definite resistance to
declining tendencies. So I am in
clined to think still higher prices
may be seen before long.
The most logical groups of
stocks to hold or acquire seem to
me to be the better building mate
rails, foods, stores and gold
mines.
But remember that the great
majority of men should stick to
stocks which have a proved
ability to show earnings, and
which are reasonably priced
with reference to earnings per
share. Unless you are prepared
to act quickly to avoid Specu-
lative losses, don't try to get in
on current active "mOves." Buy
earnings, and earnings will take
care of you, initiation or no in
flatiOn.