June 9, 2009

Tuesday, June 10, 1930: Dow 250.76 -7.06 (2.7%)

Assorted historical stuff:

Senate Lobby Investigating Committee accused of straying from original purpose and unconstitutionally seizing private papers and records. Regarding lobbyists, “They are parasites, fakers, and whatever other hard names of that ilk anybody can happen to think of.” But the committee has too much power to damage targets of their investigation with no restraint.

Chinese G.E. subsidiary is presented a list of demands by the employee's union, including reinstatement of old pay scale of $1.20-$1.40/day from current $0.90-$1.00, an eight hour day, right of the unions to represent all workers, observance of all national holidays with double pay, etc.

German budget is seen running 500M mark deficit after being in balance when passed a few weeks ago; taxes running below estimates while estimated unemployed have risen from 1.2M to 1.6M.

Most common chest size for soldiers has gone down from 37” in the Spanish American war to 36” - attributed to a higher percentage of younger recruits.

New building opened for Chicago Board of Trade (commodity exchange – second largest market next to NY Stock Exchange). Building at Jackson Blvd. and Lasalle St. is 612 feet high, main trading floor is 112x165 feet. Board has had ten previous homes since founding in 1848, including a wigwam after the great Chicago fire.

Market commentary:

Stocks continued the recent string of declining days, yesterday being the worst yet. Some stocks down five points or more, many new yearly lows. No particular news to account for the decline.

Professional bear traders seem in control; one disconcolate bull suggests fingerprinting all the bears.

Decline was unexpected by most, who were bullish until recently.

Steel industry will be OK since they are “well stabilized.” The big producers are still earning enough to cover dividends even with production at a yearly low. Cut-throat competition no longer prevails.

All floor members of the Stock Exchange reported bearish, “'But,' added one veteran member, 'all of us never were known to be all right at the same time.'”

Economic news and individual company reports:

Of 34 representative railroads, only 3 report increased revenues and income for first 4 months of 1930; the remaining 31 report declines in revenue between 4.4% and 18.4%.

Auto production for Q1 1930 down 31% from 1929 but only 6% below 5-year average. Sales at retail down 17% but higher than any year but 1929.

Westinghouse Electric new business booked in the current quarter down slightly from 1929, net income will be down due to transfer of radio operations, but should be about the same as first quarter.

Wm. Wrigley net profits for first six months of 1930 will be ahead of 1929. Q1 income for 1930 was $2.64M vs. $2.52M in 1929.

Florsheim Shoe reports earnings of $1.133M for 6 months ending April 30, compared to $1.119M in 1930.

Curtiss-Wright (airplane builder) expects roughly the same numbers for Q2 as Q1, expects improvement in Q3 but doesn't expect positive earnings until 1931 due to general overproduction in 1929. Doesn't expect to need new financing. Believe they sold over a third of all new planes in the country for the first 4 months of 1930.

Shareholders of Pacific Biscuit Co. approve sale to National Biscuit Co.

Montgomery-Ward denies rumors that it has had to close some stores, says sales last month were good.

Sugar prices reaching new lows in spite of increasing consumption; overproduction blamed.

Rubber at new record low, blamed on sympathy selling with stock market. Rubber tapping holiday in May.

Wheat futures rally in their first session traded in the new Board of Trade building in Chicago.

California oil production averaged 597,000 barrels/day in first week of June, down 189,000 from 1929 – reflects cooperative efforts to curtail production and stabilize prices.


“Abe was at a dance and lost a wallet containing $600. He got up on a chair and announced: 'Gentlemen, I lost my pocketbook with $600 in it. To the man what finds it, I will give $50.' Voice from the Rear – I'll give $75.”

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