Action & Reaction

Up jumped stock prices to new highs for Recovery. Up jumped trading to more than 2,000,000 shares per day. Up jumped the price of New York Stock Exchange seats to $135,000, more than twice the Depression low. And thus, for two successive days last week following the release of President Roosevelt's letter to Publisher Roy Howard promising a "breathing spell" for Business (see p. 11), the stockmarket made front-page news.

A Presidential tip is as good for a rousing market rally today as it was in 1928 when Calvin Coolidge undertook to boost securities. Now, as then, stockmarketeers made the most of it. And they were greatly aided by an accompanying hail of other good news, including a pickup in steel buying, active retail trade, a big bulge in carloadings (see p. 56), re-entry of the House of Morgan into the securities business (see below) and pegging of Canadian wheat at 87 1/2-c- per bu. General Motors reported a striking sales gain in August over July. General Electric boosted its quarterly 15-c- dividend to 20-c-. Furthermore, the stockmarket had already resumed its upward surge two days before the President's letter was published.

Both brokers and businessmen, however, took the promise of a "breathing spell" with a deal of salt. Some even remarked that, what with the New Deal legislation already enacted, there was precious little room for business to breathe anyway. ''Business and financial judgment may of course be wrong," said the sober Wall Street Journal, "but unmistakably the impression in such quarters was that Mr. Roosevelt favored a breathing spell for industry, not because industry needed it, but because it had become indispensable to Mr. Roosevelt and his Party."

Yet it was precisely in that interpretation that businessmen found the warmest comfort. Political expediency was a more potent persuasive than the united voice of U. S. Business. And with a genuine revival looming brighter by the day, the President might yet choose to ride Recovery for all it was worth until November 1936.

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