Assorted historical stuff:
British House of Commons passes financial bill after a record long debate of 21 hours and 48 minutes. Chancellor Snowden defied “a bombardment of taunts and insults throughout the night.” Winston Churchill, head of the Conservative opposition, criticized the Chancellor for his “dictatorial methods.”
Pullman Company (passenger rail cars) purchases in the last year: 1,165,000 towels, 444,000 pillow slips, 387,000 sheets, 63,000 porter's jackets, 5,786,000 paper bags for women's hats. Launders 278 million items annually.
W.A. Jones addresses electric industry convention in San Francisco. He notes that 70% of the population now have electric service compared to only 8% in 1907. However still sees room for growth because of appliances. For example 94% of customers own electric irons, but only 33% washing machines and only 9.4% refrigerators.
House Ways and Means Committee debates whether to lower the minimum package size for Cuban imported cigars to 300 from the 3000 specified in the recently passed tariff. Domestic cigar manufacturers testify doing this would be ruinous unless cigar imports were limited.
Front page above the fold editorial: “This is America. Piffling talkers would turn back the calendar to the nineties and destroy the economic progress of thirty years. Vicious rumors spread for selfish purposes; flippant predictions of a five-year slump in business; wholesale demands for the cutting of wages are unworthy of American intelligence. Credit is super-abundant. Business is no worse than three months ago. Twelve months of declining volume is behind us. Many adjustments have been all but completed. Engineering and marketing brains are as fertile as ever. Problems there have always been. To proclaim their insurmountability is childish.”
Bearish professionals operated aggressively, encouraged by the Dow's Tuesday drop below December resistance level. Volume heavy at 6.4 million shares, ticker fell more than an hour behind. Days lows were hit in the morning, some recovery in the afternoon with heavier volume. Many stop loss orders and margin calls triggered. Bad news included further weakness in copper (briefly dropped to 11 1/2 cents/pound), and reported curtailment in future steel production. One stock made a new yearly high; 424 made new lows.
“Stocks down, money down, wheat down, rubber down, copper down, silver down, silk down, gasoline down, steel prices down” - but don't forget, “what goes down must come up.”
Three Dow averages hold above '29 panic lows, as do major stocks including US Steel, GM, GE.
“Depression-proof” stocks (ones whose earnings hold up well in economic downturns) have so far gone down along with the rest of the market, including tobacco, dairy, chain store, amusement stocks.
Uncertainty about future earnings seems to be causing many investors to switch from stocks to corporate bonds.
Steel industry seems to be reducing production, in spite of good demand for steel pipe and structural steel. Caused by seasonal slackening in automotive and other lines; tariff is not thought to have had much effect. Immediate outlook is not good “as there is not a great amount of interest on the part of consumers in third-quarter needs.” Plan to maintain wages while cutting production capacity, and anticipate a fall upturn in demand. Efforts to maintain price stability have so far failed.
John F. Harris of Harris Upham & Co. compares the current selling hysteria to last summer's buying hysteria, and concludes “those who yield to it are controlled now by their fears as they were then by their hopes.”
AFL President William Green meets with President Hoover, says he believes the employment situation is beginning to improve.
Economic news and individual company reports:
Retail auto sales for first four months of 1930 were higher than any previous year but 1929; 20% down from 1929. However many car companies are suffering because Ford took a large chunk of market share.
Machine tool sales down 25% in May from April, at lowest level since November 1927. Business in June also very slow.
Heavy pressure on most commodity prices, including grains, cotton and metals. Almost all leading commodities at their 1930 lows. Organized efforts have been made to support some commodities by governments and private entities without success.
Thomas J. Watson, president of IBM, reports business is doing well and expects full 1930 results may be another record. Watson is currently sailing on the steamship Vulcania for a three-month trip to Europe, to help Walter T. Jones get settled in Paris as head of European operations. Foreign business is rapidly expanding and company now operates in more than 70 countries. First-quarter earnings $2.82 a share compared to $2.62 in 1929. Earnings later in the year are expected to be boosted by equipment for the U.S. Census.
Goldman Sachs hits a new record low of 21 3/8, well below the panic low of 32 from last fall.
“The Silent Enemy, a silent film with synchronized Indian music relating a story of the struggles of the Ojibway Indians against hunger.”