Business: Current Situation: Aug. 23, 1926

In recent weeks the stock market has been cavorting like a grain-fed horse. Last week it grew weary.— That is, many stocks which were at their record highs last February and which toppled in March, recovered, then broke slightly. (The March break brought the whole Manhattan Stock Exchange listings down an average of 30 points.) This table shows the extent of some recoveries: SPRING RECENT

Low HIGH

General Motors 113 225¾

U. S. Cast Iron Pipe 150 249

U. S. Steel 117 156⅜

Hudson Motors 50 74½

Du Pont 193 314½

This midsummer rally, now history, came unexpectedly. It was a speculators' market led, according to astute Financial Journalist Bertie Charles Forbes, by William Crapo Durant and Jesse L. Livermore. Because the market was under this speculative influence, there has been doubt as to the extent to which it has reflected the business condition of the country. In general, the U. S. is in excellent condition. Many industries are at the most prosperous tide of their histories. A few are at the turn of their ebb.

¶. Bank clearing for 23 key cities last week stood 10.6% over those of the same week last year—were $8,640,233,000. Best gains were in Kansas City, Boston, Detroit, Cleveland, Pittsburgh, Cincinnati and St. Louis.

¶ Money in circulation the first of the month was $4,858,473,503, or $42.01 for every human in the U. S., which is more than circulated a year ago.

¶ Steel production is at an abnormal summer rate. U. S. Steel blast furnaces are operating at 71% of capacity, those of independents at 65%. U. S. Steel unfilled orders are 3,620,352. On the Stock Exchange U. S. Steel quotations danced to 156% last week, their record high. Some stock buying speculated on a dividend distribution, some on U. S. Steel's excellent business. At Duluth, iron ore shipments this season are calculated to reach fully 55,000,000 tons, 1,000,000 more than last year.

¶ Most motor car makers last week displayed with great confidence their 1927 models for the past week. Others will follow in quick succession, until the winter automobile shows bring them together for comparison. Retail sales have already picked up. In the first six months of the year, automotive sales—cars, trucks—aggregated the amazing total of $2,389,428,000.

¶ General Motors directors last week saw fit to make a 50% stock dividend. This reached almost 3,000,000 shares, makes the present capitalization about 9,000,000 (at current Stock Exchange prices, worth $1,800,000,000,* upon which 1¾% dividends will be paid beginning Sept. 11. The E. I. du Pont de Nemours Co. and its stockholders will gain most. They hold somewhat more than 25% of General Motors stock.

¶ Railroads of the northwest have "turned the corner," Chairman Howard Elliott of the Northern Pacific, said last week. They carry crops, ores and lumber. For the nation there have been ten weeks this year when more than a million cars were loaded. In only one week, that of Jan. 2 were there less than 900,000. This reflects lively interchange of commodities. Gross railroad earnings, January through June, were $3,028,560,000.