Election Elation

BUSINESS & FINANCE

In the drizzly dawn of the morning after Election, weary brokers in a dozen Manhattan brokerage offices snapped off their radios, wastebasketed their sunflower buttons and stalked out for breakfast. They had opened their offices early in the hope that some alert customers, on the basis of election returns, would want to buy or sell on the London Stock Exchange when that market opened at 5 a.m. E. S. T. Their hope for London orders proved almost as barren as their hope for a Landon victory.

But if Manhattan did not want to trade in London, London most certainly wanted to trade in Manhattan. And London wanted to buy, the sooner the better. Touched off by orders from Europe, where Franklin D. Roosevelt's reputation with businessmen and bankers has always been far higher than at home, the stockmarket shot up in the heaviest trading since last February. Day after elections, the Dow-Jones industrial stock average climbed nearly 4 points, best day's gain since 1933. Public utility stocks, which had been widely touted as the best method of batting on Alf Landon, declined automatically. Next day, however, while trading on the New York stock exchange swelled to 3,600,000 shares, even the utilities perked up. Day after that the stockmarket paused for breath, having set a new high for Recovery in the third broadest day's trading in the history of the Exchange (973 issues out of 1,405).

These speculative fireworks were not, as some irreconcilables suggested, a studied Democratic attempt to heap insult on the injury of Alf Landon's defeat. Neither was it a rising vote in favor of the New Deal. It might have been explained by the hopes & fears of Inflation, since the election insured a continuation of the New Deal's cheap money policy. But on one day 14 issues of Government bonds made new highs since issuance--not precisely an inflationary portent. Still another explanation might have been the continuing flood of extra dividends flowing from efforts to escape the tax penalty on undistributed profits. Standard of New Jersey declared a 75-c- extra which amounted to $10,000,000, Standard of Indiana a $1 extra footing up to more than $15,000,000, Socony-Vacuum a 25-c- extra which means nearly $8,000,000. General Motors crashed through with a $1.50 "year-end" extra--$62,000,000.

Basically, however, the upward bound in stock prices last week resulted from the complete removal of uncertainty. The underlying processes of making and selling the nation's goods had passed through the autumn without faltering. The outlook was promising regardless of elections. Businessmen might not like the results but they at least knew now what they were in for. A closer contest, a stronger minority in Congress, might have left room for doubt. While a few soothsayers remained to croak, "Just wait till two years from now," the majority of Wall Street jumped straight aboard the Roosevelt landslide, ready to ride it while the riding was good.

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