Early riser

“ Contrariwise, the first halves of areas above the X-Y line are really reactions from the economy, industry and righteousness developed during the hard times just preceding. The high points of the stock market have come in the early part of the prosperity areas and the low points have come about the beginning of the depression areas. ”

“ I concede, sir, that, in the ordinary mutations of business and commerce in all seasons, and daily, stock markets rise and fall; but behold this country as it stands as to honest material of just speculation on exchange! ”

“ However, if we consider a longer period, a whole cycle with its alternating phases of prosperity and depression, of boom and slump, that is if we consider reproduction at its highest and lowest volume, including the stage of suspension, we can set off boom against slump and work out an average, a mean volume of reproduction for the whole cycle. ”

“ There where the blocks were the highest and stood facing each other like giant building-blocks set on end, there was Wall Street, the centre of activity, where the stony growth seemed as though spurred on by the restless stir, the yet unregulated and uncomprehended instinct of accumulation. ”

“ These major stock movements are not an exact duplicate of any previous ones, and it is impossible to tell how long they will last or just what course they will take. Certain influences could change a period of improvement into a period of prosperity very quickly.
A period of prosperity is noted for high prices, high wages, and increasing production in all lines. Everybody is optimistic. Most people spend their money freely, and that makes times better. As prices go up and business increases, more money is required in business and interest rates go up. ”

“ As the autumn periods of harvesting and crop moving approach, there is a tendency toward a lower level of prices, followed after the passing of this period and the approach of winter by a rise of prices.
§ 6 IV.33 In the present chapter we have analyzed the phenomena characteristic of periods of transition. We have found that one such "boom" period leads to a reaction, and that the action and reaction complete a cycle of "prosperity" and "depression." ”

“ We have witnessed an extraordinary growth of universities, libraries, and higher schools,—the widespread increase of commerce, the prosperity of business, the rise in the price of food, and the great coal-strike of 1902. Perhaps never before in the world's history have there been crowded into five years such dramatic occurrences on the world-stage, nor such large opportunities for the individual man or woman. ”

“ The long period of stagnation and depression was broken by the great rubber share boom of the spring of 1910, when business reached proportions never before witnessed in the history of the Stock Exchange. ”

“ Men took to their business with renewed avidity, content to go their old ways, to make new snares and to enter them, all unconscious of any mighty purpose. Those at the faro tables of the market increased the stakes and opened new tables. New industrial companies sprung up overnight like mushrooms, watered and sunned by the easy optimism of the hour. ”

“ While drinking my coffee—never more than two cups—it was my custom to read and digest stock and bond quotations, for though I had no investments—the only time I had been able to take a flurry there was an unforeseen recession in the market—I thought a man who didnt keep up with trends and conditions unfitted for a place in the businessworld. ”

“ The past forty-five years in the United States embrace a new era of wealth—an era in which the accumulation of vast amounts of money, or its equivalent, in individual and corporate hands, has accompanied the most marvelous national growth and prosperity in all history. ”

“ The market tipsters, the financial editors of newspapers, the brokers’ letters and all stock market literature, with but few exceptions, were crowing loud and boastfully for still higher prices, and after the whole group of stocks had risen in unison for a time, some individual stock was singled out every day or so, pushed into the forefront and skyrocketed to dizzying heights. The brokers and all the customers were delirious with joy and excitement. ”

“ The lure of Wall Street was drawing him more powerfully every day. He longed to plunge into the excitement with his old time zest, and to enjoy the thrill that came when success ended a financial battle. ”

“ My optimism springs from solid evidence that America has turned the corner toward long term economic expansion. If all of us act responsibly we can enjoy a renaissance of growth, progress, and opportunities, free from the ruinous inflation and record interest rates of old. ”

“ But demand tends to fluctuate not only thus in detail, but, what is far more important, as a whole and bodily. Ever since the closing years of the eighteenth century, economists have noticed that our trade regularly oscillates in periodic cycles of good and bad times, these being usually reckoned at ten or eleven years. The tide of activity, then, pulses by a general ebb and flow, which dominates the whole economic life of the nation, and enables the history of its collective business to be mapped out into eras of progress and stagnation. ”

“ Everything is ready for a revival of activity, which will begin whenever some fortunate circumstance gives a sudden fillip to demand, or, in the absence of such an event, when the slow growth of the volume of business has filled order books and paved the way for a new rise of prices. Such is the stage of the business cycle with which the analysis began, and, having accounted for its own beginning, the analysis ends. ”

“ With autumn here, schools reopened, and people back at work, a question is on everyone's mind: Will the economic recovery last and the job market continue to improve? Well, I believe the answer is yes. I'm bullish on America. ”

“ In Wall Street, where men are accustomed to looking forward at all times, the question is ever in mind as to the next panic. The last one left its sting; we are interested now in knowing about184 the future. Have we learned how to avoid these difficulties? May we hope to diminish their force and mitigate their terrors? May we rely upon the superior organization of business and the greater quantity and quality of capital to soften the effect of the next shock? ”

“ Aiming at greater production, economy and efficiency, through their large means and modern improvements, than had been possible with small concerns, they marked a forward step in that progressive industrial, commercial and financial march which has created our vast national wealth and made this country the Wonder of the World. ”

“ All through the year we go on and on in the eddying whirl of business. Money comes and goes, circulates, attracts other money, vanishes; and the fortune of the firm, like a slippery, gleaming snake, always in motion, expands, contracts, diminishes, or increases, and it is impossible to know our condition until there comes a moment of rest. Not until the inventory shall we know the truth, and whether the year, which seems to have been prosperous, has really been so. ”

“ You may find it in any moist, low ground, but the gutters of Wall Street, or even the banks of the Stock Exchange, are not too dry for it. The real golden-rod is not much in evidence with us, for it comes only when summer is on the wane. ”

“ These four factors are not only the causes of the first plateau, but, as soon as any particular plateau is overcome and advance again begun, they are likely to arrest the advance and to cause another period of recession or of no advance. ”

“ We see it in the Old World, as well as the New World, but such rocket-like soarings, and such eccentric ups and downs as Wall Street has experienced from time to time, are peculiar to itself. It must, however, outgrow them, and the sooner it does so the better. ”

“ That this growth in wealth will go on during the twentieth century cannot be doubted, but that the proportionate rate of increase will equal that of the century now at its end may well be questioned, the inventive activity and application of nature’s forces within this century having reached a development which seems to preclude as great a future rate of progress. The nineteenth may, therefore, perhaps remain the banner century in material progress. ”

“ To the very few it was a year of golden experience, demonstrating anew that real success only comes from rigid adherence to sound business principles and abstention from illegitimate speculation. Those who remained steadfast to well-established methods of finance and business weathered the storms of the year with little injury; while those who defied economic laws and ventured on the untried highways to success were, later, chiefly engaged in repairing battered fortunes and gathering together their scattered senses. ”

“ For years they braved the wear and tear, the din and tumult of the world's market-place, and like brokers in stocks that change, find in the end no gain, or only gain that counts for loss, as leading more from God. ”

“ Extreme jingoes see in this huge growth only the beginning of something yet to come, and in their dreams imagine a day when America shall rule the markets of the world. But no one should be deceived by such ideas. ”

“ In a period of depression, the banks accumulate money, and there always is an abundance of money at the beginning of a bull market. During a period of prosperity the banks' reserves decrease and their loans increase. ”

“ Soon or late this expansion of orders reaches back to the enterprises from which the impetus to greater activity was first received, and then this whole complicated series of reactions begins afresh at a higher pitch of intensity. All this while, the revival of activity is instilling a feeling of optimism among business men, and this feeling both justifies itself and heightens the forces which engendered it by making every one readier to buy with freedom. ”

“ When the progress of accumulation has reduced profits either to the ultimate or to the practical minimum,—to the rate, less than which would either put a stop to the increase of capital, or send the whole of the new accumulations abroad ”

“ Statistics show that while a general price level is slowly changing like a tidal movement, the effect of the rhythmic business cycle appears now in hastening, now in retarding, the changes in the price level. ”

“ These intervals of advancing prices, when not succeeded by retrograde movements, most powerfully contribute to the progress of national wealth. And practically I should say, that when once a character of industry and economy has been established, temporary high profits are a more frequent and powerful source of accumulation, than either an increased spirit of saving, or any other cause that can be named. ”

“ The last century has shown a branch of one of the old parent stocks, divorced from many of their traditions and left to themselves, imbued with a spirit of progress that has advanced with such giant strides, that in a generation we have seen more strange things than had come upon the world before in centuries. ”

“ It began in a calm—a quiet, happy, pleasant calm—a calm that may be typified by a man seated on the lawn at Barton, and smoking in the shade, with sheep bleating at a distance.
It came out of a calm, we say—a delightful time of rising markets, when the bulls of the Stock Exchange were in clover, and the bears at fault. It began when most kinds of shares were at a premium; when all sorts of companies were paying big dividends, and 5l. shares were selling at 8l. and 10l.; when everything was “looking [Pg 144] up;” when men bought to invest, and even bought one day to sell the next at a profit. ”

“ The retrospective eye, surveying commercial and financial America in the sixties and contrasting it with America of to-day, sees clearly that progress has been made, and looks beyond toward progress to come. ”

“ And as time passed the grip of Wall Street on his soul grew stronger until it strangled all other aspirations. He could talk, think, dream of nothing but stocks. He could not read the newspapers without thinking how the market would “take” the news contained therein. ”

“ This week we mark the beginning of summer, another summer of national prosperity, continuing the longest economic expansion in our history. The big question now is what we intend to do with this economic prosperity. ”

“ Progress regained has renewed our confidence. We can see and feel that confidence in the vigorous increases in consumer purchases, in greater incentives to save, and in the advances to record levels in the stock market. ”

“ Whether, therefore, we shall find our capital again with increase, or not, is a question which can only be answered by the result; and it will at best depend upon chances of the market, which defy foresight. ”

“ I was led to notice the rate of interest because I was speaking of the possible increase in the accumulation of capital which might be produced if the motives of saving could be stimulated throughout the mass of the people. By the side of the facts to which I have referred, and which are sometimes interpreted as showing that the formation of capital at present outstrips the extension of enterprise, there are other facts which show enormous demand for capital on account of unprecedented extensions of enterprise. ”

“ Bear raids and slumps may come and go, unscrupulous speculators may cause depression in the share market through bad reports for their own gain, “but the gold is here,” and energy, pluck, and perseverance, will overcome all the difficulties there may be to obtain it, in this truly golden West. ”

“ This unusual condition is due, I believe, to the fact that the boom we are enjoying is built on a foundation that reaches clear to the bowels of the earth. There is nothing unnatural or artificial about it. Wall Street is simply one of the centres that reflects the general prosperity throughout the country. Farmers, merchants, mechanics, mill workers, and miners are all so intent in keeping pace with the progress in their own pursuits that they have no time to cast eyes our way. ”

“ You do not know what stocks are in these times, but if you had stood in a New Eng-land town then, you would have seen a strange thing made of wood, by the road near the church. This queer frame of wood would hold a man fast so that he could not move, and you may think a day in the stocks would be hard to bear, and would make one's bones ache. ”