Detroit evening times. (Detroit, Mich) 1921-1958, 1941-04-21
Caution Advised
In Purchases
Of Stocks
BY LEWIS HANEY

Obviously, the stock market rs
waiting for news. Pending the
coming out Of this news. one
should be cautious. For example
il is the part Of wise caution nov
10 avoid additional purchases yi
stocks until more definite evidence
of stablilzation mas developed. Any
one skilled IN such matters may
even be justified in hedging such
parts OF his holdings as have
proved 70 be more speculative
than anticipated. This can be-
done by selling against the box ,
Until we know more about the
latest war developments and orr
relation thereto new commitment
viii be unusually hazardous.
Last week. the market almost
stood still. 1t did 80 most OF the
time. both as 10 volume OF trading
and as to prices. The only APP
prOach 20 trading activity came
on the Friday reaction. and then
The average of a hundred repre-
sentative stocks lost only half a
point.
During the week. the - most
active stocks showed nine declines.
one unchanged quotation, and two
advances. The most significant
cases were United States Steel
off Ia points. General Motors. of
212 points. and General Electric,
off Is points.
This is by no means bad show
ing. in view of the news and the
several unfavorable potentialitieS
which came into view during the
period. The week brought many
threats and great uncertainties.
Pessimism was so thick in Wall
Street that at times you could al
most cut il with a knife. But only
2,5OO,000 shares were sold all
week. and the average of 100
stocks lost less than a point.
Thus il is easily within the
bounds of possibility that the mar
ket NAV still stabilize around the
February 10 low level.
I would not venture TO predict
so good a showing. But | do
feel able TO say that the serious
ness of most of the domestic news
which weighed so heavily upon
the market. was exaggerated. /
would therefore not be surprised
if the market were to do a good
deal better than the psSSlmiSts
are anticipating.
Most emphatically. I do not
believe that this administration Is
going to freeze" prices, and hold
all prices down to an Improbable
level. They will soon find that
an attempt to do so will precipi-
tate a deflationary business re-
cession. 1 therefore take at face
value Mr.. Henderson's statement
about investigating steel costs and
allowing particular price rises
when justified.
In this connection. ] suggest
that we remember the NRA and
the TNEC. Where are they to-
day?
And even keep in mind the fact
that our leader wants TO see
Hitler defeated more than he
wants anything else in the world.
The only way he can get this OBJ
iective" is by unity and efficiency
in his own country. If such APP
parently Unqualified specimens as
Hopkins and Henderson do not
deliver" soon, they will so.
The cut in automobile produc-
ton certainly comes as no sur
prise. The surprise IS that IT did
not come sooner. More than that,
don't forget that the motor COM
panies are not closing down. They
have and will get huge contracts
for all sorts of war equipment,
These may or may not be as prof
liable as the production OF auto
mobiles would have been. The point
is that they will give an assured
income. and one probably large IN
proportion TO present stock prices.
AS to taxes. are we really 10
fear Cor should it be hope?) that
an administration which has not
hesitated to run on an unbalanced
budget and deficit financing all
these years. will now suddenly
swing to the ultra conservative
financial policy Of paying for the
defense program by taxation?
for one doubt that any such heavy
taxes as were talked of last week
will actually be imposed at this
time.
The easiest way now IS 70 let
prices and earnings rise. so that
wages and taxes may rise. Does
the leonard change his spots