The House-Cleaning
THE HOUSE-CLEANING RECENT attempts to explain the ruin of the stock market and to predict the future course of investors leave us unconvinced. What factors, for instance, were present in October...
...It is a question which takes on more and more pertinence...
...Where are the investors now, for instance...
...But despite the encouraging examples of the Rockefellers, senior and junior, there has been no great rush for the bargain counter...
...But what spurs any speculative market on is the hope to benefit by a capital appreciation so rapid and substantial that dividends become mere pin-money...
...For a time, the American speculator transformed this country from a lender to a borrower, and a borrower at very high rates of interest...
...Stocks were now down to a point where they could yield an attractive interest...
...No one knows...
...What factors, for instance, were present in October that were not present in September...
...And so for the present we are again in position to become the creditor of progress everywhere...
...The country might be congratulated...
...How long we shall now remain a lending nation it is difficult to predict...
...Industry all over the world was curtailed in its expansion by the bull market...
...Here was cause for thanksgiving and not lament...
...no setback in industry...
...We think it is important to remember that this does not apply to the United States alone...
...Some of the greatest corporations have announced extra dividends ; even this has not inspired the investors to more than a feeble and temporary interest...
...No one knows...
...In the worst days of the crash, experts consoled us with this: that if the great golden age of the speculator was over, that of the investor had begun...
...THE HOUSE-CLEANING RECENT attempts to explain the ruin of the stock market and to predict the future course of investors leave us unconvinced...
...Speculators might be giving up their apartments, but investors would be moving in...
...Every possible means has been utilized to impress the country with the fact that there has been no depression in American trade...
...Thousands had lost their shirts, but other thousands would eventually be wearing shinier and silkier shirts than ever, and could change them more often...
...We bought securities which had flown to so rare an altitude that their yields were almost invisible...
...If anyone has as yet discovered, or invented, a satisfactorily specific explanation, it has not at least been circulated...
...When those hopes were running high, American balances abroad were being withdrawn, and American credit was not available for the proper development of industry...
...There has been sufficient proof recently that investment in this country is not governed by any rules whatever...
...It was a gamble, but it would pay handsomely if security values only continued on their upward curve...
...Who was responsible...
...No one knows...
...What actually started the avalanche...
...Of course the country was prosperous, and of course the increasing profits of industry did help to justify the rising values...
...The experts are puzzled...
...Meanwhile, as Stuart Chase points out in a recent issue of Books, some two or three billion dollars recently tied up in brokers' loans are now available for more constructive purposes...
...The market continues weak...
...The market would be in a healthier condition...
...The great house-cleaning has been accomplished at last, but no one seems eager to go back into the house...
Vol. 11 • December 1929 • No. 6
