Detroit evening times. (Detroit, Mich) 1921-1958, 1941-07-21
Scores
Fractional Gain
During Week
By LEWIS HANEY

Professor OF Economics, N. Y. University
NEW YORK, July n. - The
stock market held its ground well
last week. Indeed, IL was able 10
stage some counter-attacks az the
end, and the composite averages
regained enough ground to close
with slight fractional gains.
Commodity markets, under the
lead of such farm products as
cotton and hogs, averaged little
higher.
Bonds of the less speculative
sort, however, continued TO feel
the deadening effects of initiation.
and were relatively backward.
At the close of the week, there
was moderate strength in oil,
store, food and copper stocks. It
was sufficient TO show that the
market is still there and to keep
alive hopes that the merits of
private enterprise in a democratic
country will eventually be recog-
nized and find expression in higher
prices for equities in such enter
prise.
On the whole, oils and foods
appear TO have done best during
the week. The prospects for such
oil producers as are independent
of tankers for the delivery of their
products, seem especially good.
The railway stocks did better,
and considerable attention was
given by traders 10 the question,
will the rails break through their
preceding high level in a decisive
way? The prospects of such a per-
Torrance seem fair. Car loadings
are the highest for the season since
1880. The carriers have the bene-
fit of past large expenditures for
maintenance and equipment.
The movement for consolidation
is receiving some encouragement,
and would help some lines. Already
the rail stock price average has
actually risen a trifle above the
previous high of 29.75 Dow
Jones). but before traders will be
much influenced the average will
have to close" above 80.
In general. one must be inn
rpoacnd NTH tho faxr4raklA
ings prospects and dividends that
now prevail, particularly when
allowance is made for the rela-
lively high yields stocks give at
present prices. The chief reason
why I am inclined to comment on
the rails is the emphasis which
this gives to the breadth of the
current war prosperity. Railway
traffic, which promises to break
all records in the Fall quarter,
reflects all sorts of industrial
activity. For example. ore traffic
is record breaking. which indicates
the general demand for steel In
industry as we'll as high earnings
for ore carriers.
IT should be kept in mind. too,
that the large demand for mate
rails means a resort to high-cost
sources of supply, and that this
tends TO bring high profits to the
more efficient producers. This il
emphasized by the news of the
week, in that renewed efforts to
bring in small manufacturing sub
contractors are reported. and talk
of substituting high-cost copper
producers persists.
Maybe this is why the White
House came out in favor of a
more drastic excess profits tax
system. 1t Is quite possible. how
ever, that this move Is merely
politics" and Is made to curry
favor with radical elements while
knowing that Congress will stick
by its more moderate tax basis.
In any event, there are going to
be plenty of cases of good divi-
dends available; for no tax system
is going to hit all classes. Carefully
selected purchases of stocks hav-
ing good net earnings prospects