The Washington times., 1935-03-04

A&S@$* while at the
Lewis Haney same time an.
other sizeable group made new
lows. Such stocks as United
Fruit, United Carbon, American
Safety Razor American Chicle,
and Coco VIOLA, were higher thar
at any time in over a year. Such
stocks as Atlas Tack, st. Joseph
Lead, General Railway Signal, sew.
eral railways, and some utility
preferred stocks, were the lowest
they have been in that time.
To a small extent, this may be
due to the control over specufa.
ton exercised by the SEC for the
most part. However, I think that
is primarily the result of complete
uncertainty in economic matters
Under the present political inter
ference with economic life, it is
so impossible to figure what may
be done that will affect business,
profits, and money, that ever
Sklllful gambling is out of the
question, while the investor does
not know which way to turn.
So some people are getting out
OF all stocks, in a general spirit
of disgust and dismay. Others
are shifting from some group Of
stock which are at the moment
under political attack, to some
other group which seems to have
a chance. Others, under the pres.
sure of idle funds and low interest
rates, are seeking to get a return
on their money by purchasing
dividend paying equities.
One interesting case is that
of the wealthy person who buys
the old blue chips" at high
prices and low yields. probably
with the idea of 'nerel, tecping
his capital intact over the T.
period of years. He may figure
that event ally individual ini~
tiative and economic values will
prevail. Meanwhile, he is con-
tent to hold equities in some
leading corporation without any
yield. He merely counts Oh the
company carrying his capital
through. His tax burden may
be lightened.
The great uncertainties are ID
monetary, and 90 radical col.
lectiviSm. Initiation may take
money away from all those who
have it.
Therefore, most purchases are
being made in companies which
will not be hurt by initiation, and
which are least likely to be sub.
ject to social planning" Where
rates are subject to political con.
troll, where organized labor is a
strong factor. or where special
taxes and control are possible,
purchases ar1 being avoided.
Last week, Imitation" flared
up as market factor, bringing
a rise in the leading gold and
silver shares.
The chief occasion for this lies
in the English situation. Eng
lands i'll advised easy money"
policy bore fruit in commodity
speculation, which has collapsed.
Her stimulation of exports by
price cutting (through depreciat.
ing sterling ange), has
ceased to be effective. Political
unrest has grown. So funds have
been leaving England, and the
pound has dropped sharply. OF
course, as the pound dropped, the
price of gold in pounds rose.
The immediate effects are
likely to be a decline in the
prices of international com.
modities." There will be increased
confusion and uncertainty in
foreign exchanges and trade. We
are likely to increase our foolish
and wasteful buying of gold and
silver abroad for the purpose OF
depressing the dollar and sup.
porting the pound relatively to
the dollar. At the same time,
agitation for domestic price boost
ing and further dollar "devalu.
alton" is likely to arise here.
In short, a renewal of inter.
national currency warfare and
further progress of effective in
fIatiOn in this country are
seriously threatened. A highly
SeIective market is suggested
with growing interest in in
fIatiOn stocks.
COZ icfnd Sfnokc