making bigger money than ever before, but others—as, for instance, in the textile trades, in copper, petroleum, coal, and even in some branches of the iron trade think themselves lucky to

break even. Certainly the farmer is not prosperous, and there is a check in the building trades so marked that it might be inferred that the boom is over, with both business and housing accommodation in excess of present requirements. Wages are still high and even inflated, with organized labor getting all the best of it. But only a part of our wage earners are unionized. certainly not more than one seventh, Some authorities put the figure at ten per cent. It all depends upon what you include in such a term as 'gainful employment.' The immigration laws have done much to maintain a somewhat artificial condition, with wages in places actually above war level in spite of a well-established decline in the cost of living. Liquidation in that department is difficult, but when it is brought about by extending unemployment it is apt to be drastic.

When speaking of cumulative effect here, not only these somewhat general considerations but specific happenings must also be reckoned. It is easy to overestimate the total loss of a spectacular disaster like the floods in the Mississippi basin. Much of the damage is superficial, but much of it also is in wealth which would have been created but will now be missing in the year's return of production. In an important part of the Cotton Belt, where the longest staple American cotton is grown, there will be practically no crop. If we are committed to the proposition that quantity production is the basis of our prosperity and that the overwhelming cotton crop of 1926 was in no real sense a calamity, a consideration arises which it is impossible to ignore. A great deal of our country banking is bad banking, by people unfitted for the banking business and allowed to undertake the custody of other people's money with altogether

too little capital of their own. Bankruptcies there perhaps form a part of the greater agricultural situation, but must mean something on the debit side. The general collapse of the speculative building boom with the development of real estate, except in a few well-financed and favored sections, is not to be ignored. The broad inference would be that the business of the country needs regularizing, and that we have been attaching more than enough value to generalizations not yet proved. We are to remember, also, that efficiency in mass production carries its own Nemesis. In the matter of dwindling profits, which are still directed to paying high wages, the law of diminishing returns is sufficiently apparent to the dispassionate observer.

A consideration which must be increasingly important in the coming months should on no account be ignored. This is that the general crop outlook is only moderate at the best and bad at the worst. There has been a definite turn of an adverse kind in winter wheat, while the outlook for spring wheat is not only below that of last year but below the average for a number of years. Corn is not doing well, and grain crops throughout the country, thanks to an inclement spring, are from three weeks to a month late. Practically the one exception is the fair promise for cotton in the Atlantic states. This is to some extent offset, unfortunately, by the large area where our longest staple is grown now put out of business by the Mississippi flood. Nations do not grow rich on small crops and high prices. We are long past the days when past the days when crop failures meant railroad receiverships; nevertheless no business man with a sound conception of economics will fail to see that prosperity comes from production, from newly created wealth. If a redundant cotton crop in 1926 was a source of embarrassment, it by no means follows that a short wheat crop in 1927, whatever the world price of wheat may be, is a cause for congratulation.

IT is just possible that some of the readers of the Atlantic Monthly may be patrons of the prize ring. If they have studied the professional fighter, as distinguished from the often more attractive amateur boxer, they will have noticed one or two things about him highly valuable for purposes of illustration. He hits much harder than the amateur, because he can thereby end the fight, and he understands how to 'cover up' to avoid getting seriously hurt himself. But if he is in the first class he has something equally valuable in his perfect poise. He is so balanced on his feet that he can move instantaneously in any direction. Experts attach as much importance to what he does with his feet as to what he does with his hands. Manifestly he directs each set of limbs with his head. It is in this matter of poise that Wall Street holds such consistent supremacy over the other business of the country. It is so balanced in its movements that it can shift quickly in any direction with a minimum waste of time and effort. This is indeed part of the machinery of the stock market, a part without which it would not serve its invaluable purpose.

It is to be observed that reports of business all over the country are decidedly mixed, with actual depression in places, a diminishing of profits elsewhere, and a tendency to slow up which is now even beginning to appear in the carloadings of the railroads. This is an important indicator, because these loadings have been running well over a million cars a week, and it is clear that if what is produced is moving there is an absence of congestion in inventories and a broad consumptive demand, affording an excellent guarantee for

general business. There are other fac tors, such as flood damage, a marked curtailment in building permits, a discouraging crop outlook, and some evidence of increasing unemployment, all of which may be said to have a cumulative effect. The popular mind calls for something specific to account for a change in the general direction of business. A single cause, suitable for exploitation on the front page of newspapers, may be credited with many times its real value when the stock market gives one of its warning declines. Taken by itself, that cause may be no more significant than the last straw which is said to break the camel's back.

But the stock market is perfectly poised, shifting its position rapidly to be able to meet any pressure brought upon it from any direction. When it is advancing, as it has been advanc ing for nearly four years, the gains are anything but equal. Some groups are much stronger than others and there is even depression, relatively at least, in rubber, copper, oil, or woolen shares. Groups are taken up in turn as they look attractive, but a strong major movement can well afford variation of this kind. When a serious recession sets in, however, stocks are much more apt to move together. This is not at all because there is not the same variation in values, or because specific reasons are lacking for special weakness or special resistance. Indeed it might almost be said that the better the stock. particularly in the sense of wide distribution and a broad market for it. the more severely it is apt to suffer. A moment's reflection will give the reason. When the overextended pool in a stock where no real foundation of