Stocks Up, Dividends Down

The New York stock market last week surged up to its highest level in the past 15 months. Radio, International Telephone and Western Union all went through 1942-43 highs. Other big gainers: Pepsi-Cola, many a blue chip like Du Pont and American Can.

This rise in stock prices had little enough to do with the amount investors are getting out of the war economy. During the week the Stock Exchange announced that dividend payments were down 12% from 1941, with payments by automobile companies down by 37%. This compared with a 12% rise in hourly earnings, and over 45% in cash farm income during the year.

Important cause of the stock-market rise was the growing certainty that in struggling for still higher wages and farm prices the Labor and Farm Blocs are making hash of the Government's price ceilings. As this occurs, common stocks (many of them still selling at only three or four times earnings) may not represent absolute safety, but they do represent an inflation hedge.

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