This is the sixth in a series of articles appearing each Monday in the Crimson, which deal with current political and economic questions in the light of stock market transactions. The Crimson has been fortunate in securing the services of an nature observer of market fluctuations, whose excellent opportunity for viewing affairs on the exchange first-hand recommends the series to readers.
Ford Throws Down the Gauntlet
Experts were glowing a few weeks ago when Henry Ford announced that he was increasing his production quotas, and the sentiment at that time was that this news augured well for the automobile industry as a whole. But old Dame Rumor couldn't let Ford's promising statement alone. A little bird has been informing the followers of the market that both Ford and Packard are planning to enter new candidates in the $1000 class, to compete with General Motors and Chrysler. This bit of information adds to the general gayety of the situation and at the same time throws a new light on announcement of the Dearborn don. It now appears that Ford may have thrown down a gauntlet which will result in an unhappy competitive situation in the automobile industry with ruinous results of earnings.
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Roosevelt the Redeemer
The Daring Young Man in Washington, who has been floating from right to left and voiceovers, with the greatest of ease, now seems to be clinging contentedly to the conservative rung. Indications all point to Roosevelt's occupancy of the headship of the conservative party, at no very distant date. We might even ask you to put this prediction of ours down in your own black and white for later verification. It's the old story of Elisha and Elljah, that is being re-enacted down in the nation's capital. Having sowed a few radical oats, Roosevelt will now accept the mantle of conservation for his own.
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The Touch of Midas
Market analysis have the uncomfortable feeling that, although the Gold Blee counties weathered their internal difficulties of the past week, the situation remains unchanged and that sooner or later the gold standard will be abandoned. At one time the storms of last week seemed about to rock the boat and there are signs of a typhoon in the offing. This question of the effect of abandonment on our markets has split the experts into two distinct schools of thought. One camp maintains that it will be the starting gun for an international inflation race and that commodities and stocks will rise abruptly. The other group holds that it will be a severe economic shock and result in declines because our favorable export trade is dependent on a cheap dollar, which will then be a thing of the past. Again you pay your money and take your pick.
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An Old American Custom
Hostillties were renewed along the utility front early in the week when the New York Power Authority fired an opening broadside, by declaring that rates are far too high. The heavy artillery swung into action as Washington started an investigation into the affairs of the Telephone Company. whistling bravely, President Gifford, head of the company, stated that he welcomed the probe, but the fact of the matter remains that others do not seem to see eye to eye with him. His stock slipped drearily some 11 points. At the same time the utility average registered a new all-time low, some points below the old bear market barrier. Some day, when the utility stocks have passed into nobler and purer hands, we may again become bullish on them, but just now the best thing to do is to sit tight.
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The Market Hesltates
We are conscious of a feeling of disappointment as the market failed to put on a notable performance after reaching the expected 100 level. For a week now there has been increased volume with only a fractional gain. Not a healthy condition from a bullish standpoint. We would suggest that the substantial profits which have accrued in the past three weeks be accepted and a strategic retreat be made to the sidelines, awaiting a chance to fill the market basket again nearer the 95 level.