"All of the Evidence"

BONG! went the New York Stock Exchange 10 o'clock opening bell one day last week. What looked like the worst break of the year promptly began. By radio and ticker came the gloomy words of Prime Minister Neville Chamberlain before the House of Commons. To the market they brought a tide of liquidation. Prices cracked as much as three points, blocks as big as 6,000 shares were dumped. At 10:28, came the word that Hitler had agreed to a four-power conference. The tide turned. During the next hour buying orders for 700,000 shares jammed every brokerage house in Wall Street. The ticker dropped six minutes behind. An order for 15,000 shares of U.S. Rubber jumped the price from $40.75 to $45. General Motors was up $2.25, Chrysler $2.63. At day's end, the Dow-Jones industrial average was up almost six points from the morning's low of 127.85. At week's end the average had reached 143.13, highest since August 25.

Other reactions to peace were equally logical. Foreign bonds led a zooming bond market. Sterling jumped 13-c- in one day. Prices of the "war commodities"--wheat, sugar, cottonseed oil--plummeted; other commodities--rubber, silk, hides, cocoa, cotton--zoomed. Marine insurance rates on war risk for gold shipments were cut in half. Brokers resumed plans for new financing, which had sunk to the lowest September volume in three years. And with the overwhelming question of war at least postponed, U.S. businessmen returned to the question of business prospects.

Statistical answers were preponderantly optimistic. Engineering construction awards of $49,229,000 were 16% over the same week in 1937. Carloadings, risen 2.3% from the previous week, were still off about 20% from last year. Store sales, off 12% fortnight ago, were only down 6% from 1937 last week. The U.S. Chamber of Commerce declared: "All of the evidence points to some improvement in business. ... It is too early to know the strength present trends will develop. ..." The New York Times was less optimistic. Its business index fell and when commercial, industrial and agricultural loans by New York member banks of the Federal Reserve System shrank for the fifth week in succession, the Times committed itself to the prediction that this "pretty well smashed all hopes of a 'normal seasonal expansion' this autumn." Last week, however, bank debits to individual accounts continued to rise (now only 7% under a year ago), indicating that the nation was spending money faster than industry was expanding--a thoroughly healthy state of affairs.

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