Changed Ratio of Prices to Earnings 93

Selective Character of Market

The decreasing ratio of stock prices to earnings
during 1929 emphasizes what has already been said
about the selective character of the stock market. It
suffices to answer perhaps careless talk uttered prior
to the panic and during its progress, that the market
as a whole had been forced up chiefly by reckless
indiscriminate speculation. President Simmons of
the New York Stock Exchange drew attention, in
his address before the Indiana Bankers’ Association
on September 11, 1929, to what he called the intelligently
 selective nature of current stock price movements.
 Mr. Simmons commented in terms on the
“marked discrimination shown by investors in select.
ing certain issues and disregarding others” as a salu.
tary consequence of the participation by the public
in investment trusts and in experienced financial
investment services.
As the market marched to its peak about half of
the groups listed receded in price, while half went
up. Tobacco and tobacco products stocks went down.
So did the Standard Statistics Company groups of
theaters, motion pictures and amusements; textiles;
sugar producing and refining; silk and silk goods;
chain stores; retail trade; rayon; meat packing;
leather and fertilizers, tires and rubber goods, automobile
 parts and accessories, automobiles and trucks,
and apparel stocks.
The rise, also, was selective. This was manifest
in agricultural implements, airplanes, building equipment,
 chemicals, copper and brass, electrical equip-