The midland journal., 1946-09-27
News (6-
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By PAUL MALLON
Released by western Newspaper Union.

Released by Western Newspaper Union.
STOCK MARKET BREAK HINTS
END OF INFLATIONARY TREND
NEW YORK. - They said bad
news from abroad caused the stock
market to skid. AS they put it, the
international news was ga caution
ary speculative and investment ele-
ment." Yeah! 1t was caution
ary" to the extent of a maximum
II point decline that day. Actual
ly the news was not then much
worse than it had been for weeks,
although a radio commentator
whose views are rarely accepted on
anything except births, had an
nounced 48 hours earlier something
about us having war with Russia
by January or some thrilling date.
Other accounts of the break
claimed it was psychological but
they did not say what it was psy-
Geological of.
When l sought out an extraordi-
narily objective authority to get the
inside on the situation, asking:
''What in the world happened to the
stock market?" l obtained the pithy
explanation: ''It broke" Yet from
this and other sources I was able
to obtain some fresh understanding
of the "cautionary" state of the
financial mind, clearing up some
matters which have not been pub
licly understood, namely these fol-
lowing suggestions and conclusions:
Maybe the imitation is not 60
ing to be so inflationary after
all. Perhaps the stock market
is hewing downward to level
which can be established out Of
the unprecedented volatile econ
Omy i'm which we have been
soaring lately. Maybe we are
reaching for some stability.
Who can say?
SHARE PRICES Jagged
Now some financial elements
have been complaining that the in
hation so far has taken the stock
market up less than anything else.
These people claim wages and
prices have risen more than profits,
or at any rate more than the sell
ing price of stocks. You can get
nearly any kind of an answer you
are looking for, along this line-but
mostly yes. If you take tomato
and General Motors stock and Sc
lect your comparative period ad-
vantageously, you can show the to-
mato price has doubled and trebled,
while General Motors has not
gone anywhere comparable. In gen.
eral, there may be some truth in
the supposition that stocks have ex-
perienced less of a price initiation
than much goods. This is not an
unreasonable assumption because
the profits of General Motors GER
tainly have not swollen to the same
extent as foodstuffs and materials.
Yet when automobiles are
produced and sold to full capac-
ity, General Motors will do the
business - and probably at a
profit, and when you get enough
tomatoes the price should come
down. So in this instance, you
can see this nation is in unique
and temporary condition. Indeed
it is practically a miracle that
in the midst Of an abundance
of favorable economic factors,
with a shortage of goods, ma
tional income of $165, 5,000, ZOO, 900
(where we got along on $50, ,00O,-
100000 before prices and wages
went up), plentiful supply OF
money, public demand for
everything-then, at that time,
the stock market breaks. 1t
never happened before.
SOME STRANGE FACTOR?
My suspicious naturally were di-
rected toward the possibility that
some factor had entered the situa-
ton which was little known. This,
they say with authority, is impos-
sible. Perhaps some foreign gov
ernment is carrying on an attack
upon our system at its financial
core? Impossible. A bundle of our
stocks is held in Amsterdam, and
a smaller wad in England, but no
foreign nation has sufficient to start
a selling wave particularly not the
Soviets). Could there be anything
political in thus signalling finan-
cially the opening of a hard con-
gressional campaign for the admin
istration? The answer was: It's
too early, and who could do it at
any time? Actually it would be
nearly impossible to do, because Of
the broad and scattered ownership
of stocks in this country today. No
one has enough of them to do any
thing with them.
You have to get back, then, to the
conclusion that the stock market
has begun to suspect the imitation