The Washington times., 1934-11-19

lows for the s
wear. Chrysler Lewis Haney
and Studebaker each lost over
half a point. On the other hand,
Briggs and Douglas Aircraft
gained around two points each,
and National Distillers and Mont
gomery Ward were around one
point higher.
This record of the most actively
traded issues tells the story. The
''Utinties" were very weak, but op-
erations in speculative indus
trials" were maintained with con-
siderable confidence.
The New Deal Government IS
pushing ahead to furnish light
and power to the people, and to
make work for the unemployed.
This threatens an end to profits
in the utilities. The Government
will not count the costs, and its
competition will not allow private
enterprise to cover costs.
The chances are that the rich
Spoils of the telephone system
will be taken next, and the pay
ment of large unearned dividends
by American Telephone may be
regarded as q process of liquidat-
ing private enterprise in that
utility" field.
But the spending for public
Works" and the distribution Of
s'more abundant" utility ser.
vices below cost mean two
things: They mean ~ large
purchases of industrial products
with Government funds, and
~ growing public debt and
initiation.
So, while the utilities decline,
spectators are encouraged to bid
up the industrials. "Operations"
for the rise are obviously going
on in much the same way as of
old, and signs are not lacking that
a public following" is being en-
couraged to come in.
The go ahead signal has been
given in high places. A "coopera-
tive" drive is on to stimulate busi-
ness, and incidentally the stock
market.
The President is using the busi-
ness leaders to put the New Deal
over. The business leaders are
now cooperating" land operating
in Stocks) in the hope of saving
some part of the old lead.
Technically, the market is
now in some such position as in
mid January, 1888, or toward
the end of August this year. One
would ordinarily expect mode.
rate further reaction, and some
further irregular decline of a
couple of points is q possibility
which should be allowed for
here.
But this is not time when
ordinary and normal conditions
can be counted on. (Witness the
strength in industrials despite
drastic liquidation in such lead
ing stocks as telephone and gas) {.
So my guess, if that any fur
ther reaction will be small, and
that such stocks as building ma
terials, airplanes, accessories for
aviation and motor industries,
movies and distillers, will go
higher. Stores and foods should
come along.
One should constantly remem-
Der that all this is essentially
artificial and inflationary. The
attitude should be one of swimming
with the current, not of buying
for investment. But some sort of
further initiation we are going to
have, and those who can take
care of themselves by specula-
tion are being invited to do so.
The move" will not last forever,
but may well be good while it
lasts.
It is important to watch COM
modify prices now. If the present
attempt to bull the market is to
have much success, I think that
the commodity price indexes will
have to rise.
I would continue to avoid
the rails and utilities, no mat
ter what rebound may come
from temporarily OversOld con-
ditiOnS.
I would retain the good
''hedges" against initiation
(Such as best gold shares,
even though they may not at
this stage Of the game partici.
pate in the moves"
Sunray 9-MOnth