Show BEHIND THE SCENES IN AMERICAN BUSINESS r by john craddock new york june 27 BUSINESS the doll dollars arsand and cents future for business men merchants farmers and even house wives brightened considerably last week following a dragat ac ic upsurge in stock and bond prices the rise in security insecurity values strongly indicates that business recovery will begin by late summer brearly or early fall as predicted several weeks ago in this column stock prices usually rise several months before improvement appears in retail sales factory output and employment investors pour millions of dollars into securities almost overnight once their confidence in the future is restored simultaneously of course people the country over begin to buy more of the things they need to enjoy living homes autos clothes movie tickets college educations pianos golf clubs and vacations acquisitions such as these usually take time however whereas a man can buy in a hour as many stocks and bonds as he has money to invest that is one reason why a rise in stock prices usually precedes by several months any real upturn in general business still deeper behind the scenes the foregoing frank statement by a representative columnist for the big bankers and capitalists is quite refreshing ing and informative it is not often that they take the public ab nb 7 into their confidence to this extent and it may be that the writer inadvertently let the cat butof out of the bag bie business and predatory wealth would have the average citizen believe that business depressions recessions and otherwise designated hard bard times occur in cycles due to circumstances over which they have no control with considerable regularity and are unavoidable but in the light of the foregoing statement of present business trends and stock market fluctuations it should be plain to the layman that good and bad times are created according to the moods and best interests of the overlords of finance when they want a depression or a recession they lock up their cash in the vaults and refuse to invest in securities of any kind they dump enough of their holdings upon the market to bear prices frighten the smaller and more timid investors and the depression is on when their objectives have been reached and they decide that it is time to start the recovery they begin buying some of the perfectly good stocks bonds and securities chattels that were equally good all the time before and during the depression and presto up go the prices business begins to quicken and the depression starts to fade out there were two or three things that instigated the last recession first the passage of the bill imposing taxes on excess profits and corporate surpluses big business does not propose having its profits and surpluses molested by government or any other agency these appurtenances are sacred and must remain so there are other things about the new deal that big business does not like such as the wagner labor act so big business decided that it was time that the congress and the administration were taught who they were trifling with they therefore picked up their marbles and refused to play securities began to drop in price money was tight business began to slow down and the recession was on in the meantime congress was in session and a powerful drive was instituted to compel government to rescind its actions congressmen quivered and capitulated for there is nothing that knocks a congressman with his constituents as effectively as hard times usually a complete change of administration results so the big fellows just sat tight until they got rid of the most objectionable features of legislation and congress had adjourned so that there was nothing more to accomplish then suddenly the green light is flashed there is a rush of buying prices spurt upward and the end of the recession is heralded by their official spokesmen when we come to analyze it this american system that we prate so much about is some humdinger and we should all feel proud of it |