Current Situation

The Stock Exchange remained the liveliest feature of business during the past week. Motor shares, "bulled" for weeks to unaccustomed heights, became at length top-heavy. Thus the "technical condition" of the stock market became very weak; news of the Boston Reserve Bank's rate advance was enough to topple the motor stocks over in a record day of 3,400,000 share sales. Because of this unprecedented volume, many ignorant people concluded that a panic had started. As a matter of fact, nothing of the sort developed. The smash in motors was simply a large-scale reaction in a strong "bull" market, as proved by subsequent events. In succeeding sessions of the stock exchange, prices steadied and in some cases shot upward to new high levels. The whole episode may be dismissed as signifying nothing in particular to U. S. business in general except, perhaps, that a note of caution has been sounded in the stock market regarding the future of the motor industry. Meanwhile the securities of other industries, for the time being crowded out of the limelight by the sensational motor shares, revealed new elements of strength.