Vote of Confidence

As the stockmarket has drifted lower & lower, Wall Streeters have hoped that margin requirements would be relaxed. But last week, in the annual report of the Federal Reserve Bank of New York, President Allan Sproul came out against lowering present 75% stock margins (75% of the purchase price must be cash).

Wall Streeters, who regard Sproul as one of them, were dismayed to find him backing up FRB Chairman Marriner S. Eccles, whose high-margin policy is cordially hated.

In high dudgeon, New York Stock Exchange President Emil Schram cried: "I am astonished, to say the least, that the Federal Reserve Bank of New York should associate itself with Marriner Eccles in his perfectly absurd effort to justify [his credit policy]."

But last week, the market demonstrated that it needed a raising of confidence more than a lowering of margins. Burdened by the talk of a steel strike and a possible recession, the stockmarket had fallen to a low for 1947. Then at week's end came a rumor that U.S. Steel and the C.I.O. Steelworkers had reached an agreement. Stocks shot up from one to three points. When the rumor became fact this week (see NATIONAL AFFAIRS) the average climbed an additional 1.06 points to 169.50.

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