Current Situation

A remarkable change in sentiment regarding business has taken place during the last six weeks. For a time everyone was pessimistic about everything. Next agriculture, chain stores, electrical equipments and utility enterprises took heart. Money declined. The foreign situation brightened. The political nominations were assuring. Even the industrials, which are not yet out of the woods, took heart. Now the average individual is becoming optimistic about everything.

These emotional swings in business sentiment must be rather carefully discounted by the conservative student of affairs. In business, as elsewhere, there is no perfect Heaven nor any utter Hell. The worst situation has some promise in it, while there is always something seriously the matter with every "period of prosperity," even from the beginning. The developments of the past two months are quite generally encouraging, yet common sense is still needed to counterbalance the fervid rhetoric of the revivalist school of business prophets.

Easy money is no doubt the crux of the present situation. It is alleviating the inevitable shock of a liquidation of real estate and rentals. It is carrying many industrial concerns which have been sick ever since 1920 and are even sicker today. It is facilitating railway and utility mergers, and European recovery. But unless it leads to inflation, American business remains distinctly spotty. The Kansas farmer this year is in luck, while the textile-mill operator of New England is distinctly out of luck. The time for the average business man to shut his eyes and dive in has not yet arrived.