OCR Text |
Show MANIPULATION OF STOCKS. The effect of manipulation upon the price of securities as compared com-pared with the effect of trade conditions is almost nil, according to an analysis made in Chicago. The analysis is unique, covering the slump of 1871-77, 1881-84, 1830-93, 1895-90, 1899-1800, 1902-03 and 1906-7. The summing of the matter is this: "The amount of stocks outstanding in the United States consists con-sists of about $13,132,000,000 manufacturing, miscellaneous and industrial in-dustrial stocks; $8,000,000,000 railway stocks, and $2,000,000,000 bank stocks the total being about $23,000,000,000. The difficulty of forcing the average price of $23,000,000,000 of stocks far in either direction against the trend of fundamental conditions would be so great as to render it impossible. Out of fourteen important turning points in the stock market during the past decade (which our trade averages cover accurately by months), trade, as shown by these averages, aver-ages, and stock prices, reached the turning point almost simultaneously simultane-ously ten times; trade reached the turning point first twice, and stock prices reached the turning point first twice. "In brief, the course of trade and the course of stock prices in the past have always been practically identical in all the broad movements; move-ments; and a study of financial history, as well as of business or economic principles, clearly indicates that investors may safely rely entirely upon the course of trade as a guide to the market, and that speculators may safely assume that the broad trend of the market will be determined by the trend of trade conditions, regardless of manipulation. " |