The Washington times., 1935-02-25

lie x Pacl1lc ~
Land Trust is AGsN1'
sue, and that Lewis Haney
was one-eighth.
The run-up on Monday, follow.
ing the Supreme Courts gold
clause decision, was one of the
most i'll advised splurges ever seen.
It was more than wiped out by
Saturday. AS pointed out in this
column, the significance of the
gold clause situation lies in what
it stands for, namely endless gov
eminent spending to carry out
wasteful and destructive schemes
of Socialistic planning" which
kill individual initiative and eco
nomic values.
Now that situation remains
virtually unchanged. The hand
of the inflationist was not
forced, as it might have been
by an adverse" decision. The
net result is that the country is
left to muddle along without any
standard for its money, while it
drifts toward the rocks of bank
ruptcy which are only slightly
concealed by the breakers of So
called credit initiation"
Only three alternative results
seem possible: /. RuinOuS in
fIatiOn, or Il. RuinOus taxation,
or 3. Prompt deflatiOn and
liquidation. All the supreme
court decided is that if the
President feels like it, he may
take the first or second alter
natives.
An "adverse" decision would
probably have driven him into
the first course. But now he
does not know what to do.
Probably he still hopes that
some miracle will lead business
men to use the credit (debt)
which he has loaded the banks
with. Yet he has allowed the
introduction of mOnstrOuS bills
which so menace business that
they can not use the stuff.
Business seems unlikely to
make any sustained expansion
until we either have a decisive
inflationary move. or a deflation-
ary clean-out. This is what the
market is still waiting for.
On the whole, the market acts
as if the reaction may carry some.
what further.
While the squirt last week was
largely a tWo-hour whirl among
floor traders, it does not seem that
the volume of trading during the
subsequent reaction has fully
atoned for the orgy. In short,
some liquidation remains to be
done.
I note that closing bids on Sat.
urday were mostly under the
market.
1t is also clear that activity was
almost entirely in stocks which de-
clined, and the total volume gain
ed on the Saturday sell-off.
Bonds and railway stocks were
both weak.
Finally, there is little in busi.
ness news to cause strength in the
market at the moment, with both
steel production and railway car
loadings receding, and commodity
prices mostly on the weak side.
Eventually, however, we are
going to get over the New Deal.
This is no Russia or Italy. Effec.
tive leadership, based on common
sense and common honesty, is
bound to emerge, and then busi.
ness can resume. Then equities
will become worthy of investment
Meanwhile, we are getting al
most no interest on our savings,
and they are placed in jeopardy
by threats Of initiation. So I
continue to favor "holding
through" in selected stocks. In
that way, you have a good
chance to get fairly good inter-
est rates, and eventually to
come out with your principal
intact. At least, the risks (if
based upon careful selectiOn)
seem less than leaving your
money idle.
I note that last week a number
of Stoclss closed not much below
their highs for the year to date
Without any attempt to give 6
complete list, some of these were
Pillsbury Flour, Spencer Kellogg
United Fruit, Anaconda Wire anc
Gable, International Printing Ink
Diamond Match, Borden, Armour
of Delaware preferred, Wilson pre-
ferred, Ingersoll Rand, Lake Shore
Minnesota, Greyhound Corpora
ton, Gold Dust, Archer-DanieIs
Midland, American Safety Razor
Woolworth, etc., gold mine share
in general held much of thei
gains. Shoe manufacturers wer
firm.
In short, I think that stocks O
medium sized, we'll managed CON
panieS which produce useful proc
uctS and have shown ability t
make earnings should be "hel
through" And while I see n
hurry, holdings may well be az
Quired or added to on recesSions.
This is on the assumption tina
our country is sound at bottom
and that we will eventually com
out Of it" on the basis of squar
deal.