Evening star., 1942-01-01
Prices Pushed Back
Only TO Around
Levels Of 1888
Schrum Sees Entire
Nation Benefited
By Calm Market
By VICTOR EUBANK,

around the levels reached In th'
peacetime slump of 1888.
Surveying the year. Emil Schram
president of the New York Stocl
Exchange, said:
THE results show unmistakabl,
that the securities market displayed
an unusual degree of stability II
the face of shock. The pom
to emphasize is that never before
in the annals of American finance
has this quality of stability been O.
greater value to the country as 8
whole
The financial markets ''are the
pulse of the Nations economy" sale
the exchange president. Then he
observed:
This recent demonstration OF
steadiness appears to me to furnlsf
a strong indication of the cool anc
deliberate attitude with which oul
people have entered this conflict
Contrasts With 1929.
The trend of prices in the stock
market was internationally lower
through the year. and in sharp con-
trast to the rapidly mounting pro-
duction volumes in industry, making
manv 1929 records look small ano
to steep advances in commodity
markets.
The action of the stocks not only
indicated calmness in the face ol
shocking developments toward the
end of the year, but in the earlier
months reflected a clear conviction
in financial circles that the magnl-
tude of war today must necessarily
make it profitless.
Corporation profits increased sub
stantially over 1910, but nowhere
near the extent that business vol
umes did. and Wall Street took II
for granted that the increase In
profits taxes enacted in September
was but forerunner to further stiff
boosts.
A notable affect of the war crisis,
observed by Schram in his survey
of the year, was the submerging OF
the long running conflict between
Wall Street and washington over
economic policies. Schram's selec-
ton to head the exchange was one
of the outstanding Wall Street
events of the year. Taken from the
presidency of the Federal Recon-
struction Finance Corp, he was the
first non-Wall Streeter and first
public official to be chosen for the
position of chief executive Of the
exchange. Said he:
This country's entrance into the
war has been a great leveling inf1u-
ence. Prior to that fateful day o1
December 7, 1941, we had among u:
some reactionaries who were still
living in the past and hoping fol
an eventual return to the old days
With our country struggling today
to preserve not only economic prln-
ciples but the very foundations OF
free institutions, reactionary re-
sistance to change is automatically
dissipated. - Our conceptions
must perforce be realistic.
Points to Common Goal.
"All things considered, I believe
that in view of this new concerted
effort toward a common goal, Amer
lean business is actually in mucf
more favorable position today thar
1t was q few weeks ago.
The New York Stock Exchange
will be on the alert to adapt it!
machinery to a war economy, te
meet transition with transition"
Throughout the year, the Stoci
Exchange was dominated by wal
and defense. Prices slid of IN late
January and dropped sharply II
February, as uneasineSs over posi-
BILE spread of war into the Balkans
and the Far East intensified, ane
plans for vastly expanded Amer
lean arms effort developed. Boom
ing business in many lines fallee
to stimulate investment. Price
trends leveled off in March, bu
headed downward again in April, a.
the Nazis slashed into Yugoslavlt
and Greece. labor troubles marree
the domestic scene, initial PLAN
for curtailing automobile production
in the new model year were an
nounced and measures to contro
prices began to take shape, VIII
freezing of steel quotations.
The market steadied during May
and improved in June along witt
Government measures to curtal
strikes, The Nazi involvement II
war with Russia gave prices a iur
ther stimulant in the last week 0
the month. Considerable buying de
ve!oped in July, when 1t became ap
parent the Germans were having
tough time in the Steppes.
Followed by Decline.
The July rise brought prices bacl
close to the best levels of January
but a persistent decline developed
in August which carried through
most of the remainder of the veal
as the Hitler thrust into the U.
S. R. gained momentum, cloud
gathered in the Far East, and do
mestic war plans and controls in
tensifed. Prices soon dipped unde
previous lows for the year, and tn
furry of selling in early December
with the japanese attack on laval
reduced prices to levels little be
low the summer of 1910.
The Federal tax measure, to boos
levies by $3,5OO,O00,O0O, wss not en-
acted until September, but by tina
time it was apparent more and big
ger levies would be required mex
year. December saw an arms pro
gram, which had already grown t
sos 5,OO0, 900, 900, more than doubled
Substantial selling to adjust &C
counts for tax purposes also con
tributed to saggy markets IN TN
final month.
Transactions for the entire veal
however, came to only about 166
100000 shares, smallest since 1872
On only three trading sessions, Mon
day, Tuesday and Wednesday afte
the fateful Sunday of the bombin
of Pearl Harbor, did transaction
exceed 100000 shares.