WALL STREET AND LONDON
In sharp contrast with the buoyancy of London markets, Wall Street's recent performance looks sadly disappointing. Prices, it is true, are higher, on an average, than when war broke out, but after the first spectacular rise in the late autumn, they have been in steady retreat. This is how matters compare over the past five months :
American London American
Price Equivalent Price London End of Aug. Price Now Equivalent U.S. Steel 45f 53 561 70 Chrysler 78 90i 82 102 New York Central.. 521 I4i 16 19f Allied Chemical ... 159 584 172 213 Woolworth 45 52 40 49.
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Apart from U.S. Steel, which touched 8o dollars in Wall Street at the end of the first month of war, prices have not risen very much, and even the London equivalents, swollen by the sharp rise in the dollar in terms of sterling, do not show any sensational gains. What has happened to the market which so many had regarded as likely to rocket in time of war? There is no single answer. To begin with, Wall Street is undoubtedly distrustful of American business prosperity. Can the basis be really sound, everybody is ask- ing, when the steel operating ratio jumped from 55 per cent. to nearly too per cent. capacity in two months? Again, will the anti-Wall Street President stand for a third term and, if he does, will he not take the profit out of war? Finally, what sort of a war is Europe really going to have? If it is a short one, there can be no spectacular purchases of American goods ; if a long one, Britain and France will be driven at some stage to sell their American securities. So, in its present mood, Wall Street is thoroughly dispirited and sees little but the worst of both worlds.
I think this sort of thing will go on for some time, but I am also prepared for a substantial improvement in Wall Street prices later on. Provided " Big Business " does not think itself into a serious recession, industrial earnings should be good enough to bring a recovery in quotations. As for the (Continued on page 124\
(Continued from page 122)
fears of British selling under Treasury requisitioning, I think they are very premature. Requisitioning is not an urgent matter yet, and is not likely to be at least for many months,
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