It is evident that "business conditions " is a broad subject, but there are certain underlying principles which may be taken as an infallible guide, namely:

First: The crops - of main importance - the principal of which, grain and cotton, have a tremendous influence upon business prosperity.

Second: The iron and steel industries. It is well understood, and almost a tradition, that when these trades are prosperous, other departments of industry are fully occupied. The reverse is equally true.

Third: Watch the railroad earnings. They are a singularly good index of the times. Busy railways and good earnings mean work for the steel companies, car and locomotive builders, etc. Beware of the continued steady decline, from month to month, of these figures. The rise and fall in stock prices have always closely followed the rise and fall in railroad earnings.

Fourth: Study the bank clearings. They reflect business conditions wonderfully well. The clearings of the country at large are better to follow than those of a particular city which may be temporarily affected by a speculative craze.

Fifth: What are known as "swings" from prosperity to depression and the reverse. It is a well known fact that the business of every country passes through alternate periods of rising prices and prosperous times and then falling values and hard times. It behoves one always to estimate, as well as may be, at about what point in one of these cycles he happens to be.

"Monetary conditions" have reference to the supply of, and demand for, money; the effect of an increasing supply upon the rise in prices of commodities; and the fact that low money rates may encourage speculation. Money is the representative in value of all things traded in, and the scarcity of it does not tend to improve business conditions, yet, at the same time, very low money rates may argue poor business, as it shows a lack of demand. The comparative study of the daily quotations of interest paid for "call" and "time loans " is desirable.

As to "political conditions"; we are always dependent upon wise and sane government at Washington; we are sensitive to war clouds, even if not at first involving our own country. The successful speculator has world-wide conditions to dwell upon now-a-days, as the large nations are so closely associated in money and industrial matters that each is more or less dependent upon the continued well-being of the other. The searching, daily reading of domestic and foreign happenings is essential.

Stock market manipulation is fully explained under the subject "Manipulation," and is something to be carefully and seriously considered, and ever borne in mind by whosoever attempts to pick his way among the snares and pitfalls of Wall and State Streets.

There are some shrewd investors who avoid the placing of money in any enterprise of capitalization large enough to attract the attention of Wall Street, and thereby become, possibly, a puppet in the hands of some " clique." They think it better to invest in smaller companies, whose securities are offered and recommended by reputable bankers, or in local issues; in either case, the amount of the issues being too small to warrant manipulation.

It is a peculiar truth that the general public usually buys while prices are rising, instead of waiting for moderate reactions. It is better wisdom to buy after there has been a decline, and to sell after a sustained advance; but the public appears never to learn this rule.

Activity argues for rest; every excess is sure to be followed by its opposite. Depression follows inflation; and the latter precedes depression.

Nelson says in his " A B C of Stock Speculation ":

"The elder Rothschilds are said to have acted on the principle that it was well to buy a property of known value when others wanted to sell, and sell when others wanted to buy."

And also, "that if your stock has been purchased and it goes up, it is well to wait; but if it goes down, it is well to stop the loss quickly on the ground that the theory on which the purchase was made was wrong. The public, as a whole, exactly reverses this rule. The average operator, when he sees two or three.points profit, takes it; but, if the stock goes against him he holds on waiting for the price to recover, with, oftentimes, the result of seeing a (small) loss . . . run into a loss of ten points. He then becomes discouraged and sells out near the bottom."

A financial writer gives expression to the following:

"Value has little to do with temporary fluctuations in stock prices, but is the determining factor in the long run. Values, when applied to stocks, are determined, in the end, by the return to the investor, and nothing is more certain than that the investor establishes the price of stocks. The manipulator is all-powerful for a time. He can mark prices up or down. He can mislead investors, inducing them to buy when he wishes to sell, and to sell, when he wishes to buy; but manipulation in a stock cannot be permanent, so, in the end, the investor learns the approximate truth."

Wall Street always builds on the future, not on what has gone. It always wants a change in security values. Either way is acceptable to the professional trader if only he can get on the track of the right way in advance, and thus act before the public does.

And yet, thousands buy stocks who should not. Some buy because others do; some because the daily quotations show a tremendous apparent buying on the part of others of a stock at the moment attracting attention. They are ignorant of the fact that many of the reported sales are not genuine, but "wash sales" i.e., fictitious: trades made in the open market, and quoted by parties between whom there is a private agreement that they shall be void; all part of the fine art of manipulation. Some one has said that " ignorance and credulity are at the bottom of most losses in speculation' and he said well.1