Assorted historical stuff:
Editorial citing Josiah Stamp, “sound economist and active man of affairs.” Blames the worldwide downturn on insufficient gold supply (dollar was gold-backed), and consequent deflation. Estimates since mid-1920 purchasing power of gold is up more than 60%. As a result, U.S. National debt while being reduced from over $26B in 1919 to under $17B currently has remained roughly constant in purchasing power. Credits Secretary Mellon with determined policy of running surpluses to reduce this debt, without which debt would be $41B in 1920 dollars. Rise in value of gold has increased burden on debtor nations. Calls for cooperation for more effective use of gold stocks and price stabilization.
“Drilling a mile or more into the earth for oil is an expensive undertaking ...” Oil well drilling costs in Oklahoma about $11/foot, making a 6500 foot well cost about $71,000. Many other expensive items required, including derricks, slush pits, and lots of natural gas and water. Most oil wells average eight barrels/day.
France attempts to eliminate some tipping and restaurant/hotel service charges and taxes to promote tourism.
White Star ocean liner Homeric equipped with ship-to-shore telephone service to North America.
Dr. Whitney of G.E. suggests using high-frequency radio tubes for home heating to produce a “fever heat” in the body. G.E. officials say “he has not conducted any experiments ... nor is the idea backed up by any fact.”
YAEASHT (Yet Another Editorial Against the Smoot-Hawley Tariff): Hawley dismissed the threat of retaliatory tariffs since they would be unprofitable, but “a tariff war is no more effectively banned by the fact that it is unprofitable than any other kind of war.” World currently must pay the U.S. Over $1B annually in interest on debts, and also absorb a like amount in trade surplus – showing signs of difficulty doing so – this is likely to be made worse by throwing up barriers to their selling goods here.
Market selloff continued on Saturday. Retail/wholesale reported to be picking up, but manufacturing slowing and unfavorable earnings reports expected for the second quarter. “Bearish professionals” attacking principal trading stocks, particularly U.S. Steel. Successfully drove prices below the resistance levels of the previous decline ending in early May.
Highest volume of trading in some time, many stop-loss orders triggered, ticker runs 20 minutes behind.
Much pessimism about business conditions, but bear markets have never started when trade was at low levels and money cheap. Large investors who sold stocks last summer have been increasingly buying, feeling that business is near its low and “an upturn is not many weeks away.”
Business is seasonally slow and upcoming earnings reports in July will be unfavorable. However markets improve before upturns begin, in anticipation; this is why “investment trusts and powerful banking groups” are now accumulating stocks.
Many businesses have cut costs without cutting wages. This should benefit earnings when business improves.
Economic news and individual company reports:
Armco (sheet steel) plants more active in past few weeks. Deny reports of insider selling, claim to be buying.
Record buying in copper for May – thought to be replenishment of inventory after price break from .18 to .125. Dividend cuts expected at copper companies due to reduced earning power, but recent business much improved.
Auto financing in March $121M vs. $85M in February and $141M in March 1929.
“Got a sweetheart yet, Tillie?” “Yes, and he's a regular gentleman.” “You don't say so.” “Yes, he took me to a restaurant last night and poured tea into a saucer to cool it; but he didn't blow it like common people do – he fanned it with his hat.”
Musical (review edited for racism):
Change Your Luck, a musical comedy at the George M. Cohan Theatre. A few numbers are well done, but generally an “uneven, forced, and inchoate splurge.” The second act includes a “three-round slugging match, with gloves, seconds, and referee, between two young women from the chorus.” The men's dancing is generally better done, but the women's assignment is “mainly wiggling, in an attempt at some sort of compromise between the characteristic rhythms of Broadway and Harlem.”