CHAPTER VI 
CHANGED RATIO OF PRICES TO EARNINGS 
ARE the conclusions of the preceding chapter, 
with respect to the increased rate of plowed-back 
earnings, stated with too great optimism? 
One friend, who is an authority on prices and earn- 
ings, fears that I have put myself “in the posi- 
tion of one who is trying to talk the stock market up 
from the current level—trying to prove that prices 
should go higher.” Another friend also feels 
that my presentation looks like “making out a case” 
for the one point of view; that it does not give due 
weight to counterbalancing considerations. Still 
another puts in a cautioning word that there is 
“some evidence that recent stock splits and so on, 
had been tending to reduce the proportion of earn- 
ings ‘plowed-in.'” All these friends are qualified 
experts. Their divergent and sometimes conflicting 
opinions have been carefully weighed. 
Whether I am oversanguine with respect to the 
retention of the present plateau of stock prices—and 
by this I do not necessarily mean a return to the peak 
of September, 1929—it is a fact that my original 
estimates of the proper height of this plateau have 
undergone some modification. A well-known expert 
d.