Show GABSON'S CARSONS A AUTHENTIC ST STATEMENT A TEl as w IS Special to THE EXPRESS I BABSON DISCUSSES THE FUTURE OF THE STOCK MARKET BABSON PARK MASS MASS- I Investors are always studying with the greatest care those economIc factors that seem to I shape the trend of the stock market This is all very well but now and then I like to point out to my readers that unexpected events are often the most powerful Influence I The way our stock market system is set up In our demo demo- democratic cratic society permits the I wildest ups and downs in in- in investment investment vestment prices when unforeseeable seeable events come like a bolt out of the blue Lessons of History I can always learn a great deal simply by reviewing the effects of unexpected events on business and the stock mar mar- market ket over the past one hundred years or so Starting at the time of the Civil War busi busl- busl ness was relatively stable and promised to climb in a heal heal- healthy thy way following the end of the war Then came President Lincoln's assassination one of the most unexpected events in our history and stocks tumbled sharply The crash was followed by a year of de de- de depression Thereafter busi ness boomed until the corner cornel on the gold market brought a sudden plunge known to fin fin- financial financial ancial men of toe the time as Black Friday Stocks made a good come come- comeback comeback back and investors were feel feel- feeling ing generally optimistic about the future when two apparently apparently events oc- oc occurred occurred The ChIcago Fire in late 1871 and the great Boston Fire in November 1872 These set the stage for another fin fin- financial ancial panic The market was making a recovery from this n 0 1 lag ing house of Jay Cooke and Company sUddenly tailed The shocking announcement reo re- resulted i suited in the first closedown of the leading Stock Exchanges Exchanges for several weeks seedIng the deep depression that began be- be began gan in 1873 and went on for a number of years Still Moro More Unexpected Happenings A n new w flood of investment selling was brought about by bythe bythe the sudden shooting of President President dent Garfield on July 2 1881 Out of this panic came the un un- unsettling settling failure of the great I banking house of Grant and andWard andWard Ward and of the two most andI im im- im important I bulls of the per per- period iod Henry Villard and James JamesR I R Keene As usual another I depression came along after I these unexpected events and andI I lasted a few years Prosperity I prevailed generally in 1892 then came a shattering blow blowin blowin in May 1893 The failure of the National Cordage Comp Comp- Company any This firm was then one of the nations nation's ten largest and was considered a real Blue Chip The next year like a flash of lightning came the nations nation's I first serious walkout the Pull Pull- mart man Strike Pessimism spread across the country Increased I still further by a rash of crop failures and mortgage fore fore- foreclosures closures By 1897 conditions were agaIn so bright that fore fore- forecasts forecasts casts of permanent prosperity were once more being made Stock splits large security of- of offerings offerings and mergers v were ere the I order of the day Then in 1903 came another unexpected ed happening A Supreme Court decision followed a charge of undigested securities involving investigation of leading life insurance and andI transit corporations which I were then extremely popular All these events were truly unexpected But then came another totally unforeseen oc- oc occurrence occurrence currence This time it was the San Francisco earthquake The Influence of Wars I IThe Interference with business by the federal government kept market prices soft In the early but went well after our entrance into World War I until 1920 when stocks lost ground due ue to very high interest rates After this situation was corrected the market went skyrocketing un un- un until til it hit what were then the time all highs of 1929 I do donot donot not have to elaborate on the depression of the Star Star- Starting Starting ting in 1938 business began a recovery that continued throughout World War II but the stock market did not do much until 1942 Then came a along along long upward climb with only temporary interruptions The reason I give readers an occasional historical reo re- re review view of this sort is so they will never forget that no mat ter how sure one may feel about future trends an unexpected event can throw the situation completely out of whack Seasoned investors keep this fact in mind at all times |