The Current Situation

On the Stock Exchange, heavy volumes in trading continue, along with a continued although somewhat irregular advance in prices. As yet, no signs of security inflation have appeared except in a minor way. Brokers' loans are stationary, and purchasing is still largely for cash. Declarations of new dividends, especially among the weaker railroads, already go to show that the autumn's "bull market" has not been a merely speculative movement, but caused by fundamental economic reasons.

The real puzzle is with industrial securities. They have appreciated along with the rails, but more uncertainly and subject to larger reactions. Moreover, securities of different industries have behaved quite differently. Industrial news continues to become more encour- aging. Last week, the copper industry began to cheer up, as the iron and steel industry had already done. Yet prospects of any industrial boom are still far away, and the slowly rising market for most industrial securities seems to predict a powerful although quite grad- ual improvement in industry itself next spring.