Plowed-Back Earnings 71 
the net earnings of 271 industrials were 27.04 per 
cent higher than for the corresponding nine months 
of 1928; of utilities, 17.48 per cent higher, and of 
railroads, 17 per cent higher. 
These earnings increased at a faster rate during 
1929 than the level of stock prices. This is a prime 
22C 
200 
75 
PUBLIC UTILITIES 
TELEPHONE COMPANIES 
1926 =100 
A 
0) 
5TOCK PRICFS- 
30 
Yi, 
1926 
Yel 
2H 
1920 
Cuarr 8.—Upward trend of Public Utility common shares during 
latter half of 1929 reflects discounting of anticipated future profits 
from mergers, 
. . 2 
reason for the increased price level of stocks in 1929 
over 1928, and helps justify the conclusion tha 
’ . 
stocks were not so much too high as comm y 
thought. 
A comparison of the third quarter of 1929, which 
included the first month of the stock market break 
leading to panic, showed for 224 industrials net earn- 
ings 15.77 per cent higher than for the third quarter