Assorted historical stuff:
J. Westerfield of the NY Stock Exchange lectures civics clubs of Yonkers on the causes of the current business recession. Says the effort to attribute it to any single cause is superficial; criticizes sanguine statements of “new era” economists that “the vast amount of reliable statistical information had practically abolished the old-time evils of large inventories and overproduction.” Concludes that an illusion grew popular that “paper profits in ... quoted values for real estate, commodities, securities, and other forms of property increased fortunes and thereby spending power.”
Senator Glass is heading a subcommittee considering extensive changes to banking regulations. Among the changes considered are restricting speculative loans by banks to brokers and stock exchange members, removing the Secretary of the Treasury as a member of the Federal Reserve Board because of undue influence, making it easier for banks to expand nationwide, etc. Anticipated the committee will have meetings all of next year's session and submit recommendations December 1931.
Congressman Fiorello La Guardia (Republican, NY) objects strongly to revisions of the Wagner bill to relieve unemployment by planned public works. Urges passage of the bill in its original form and the establishment of a national employment agency.
Navy Department asks for bids for construction of aircraft carrier number 4, a 13,800 ton ship. Total cost not to exceed $19M; $4.05M appropriated to start construction.
The new Price Brothers skyscraper, tallest building in Quebec, now in full use - all 17 floors occupied.
French scientist to test device for converting warmth of Gulf Stream into electricity.
Census indicates New York City contains “300,000 unemployed and 100,000 drifters.”
New York State had 156 dead from industrial accidents in May, down from a 5-year average of 169.
Morning trading began with some margin liquidation following Saturday's sharp decline. Bears sensed opportunity to drive stock prices close to panic lows of last November, and launched aggressive attacks against major industrials, particularly US Steel. After two attacks failed to force Steel below its November panic low of 150, a rally began that spread to the rest of the market, including major industrials and utilities.
Some of the recent weakness in commodities may be due to operators who are holding positions in commodities and stocks together, particularly popular speculative commodities like wheat and cotton. When forced to raise funds to cover margin calls, they may be liquidating commodity positions.
Current speculative sentiment is bearish, but the conditions are there for a strong bull market in the future. While commodity price decline is serious, many are selling for record lows or below cost of production, which can't continue forever. Inventories are low. Wages have not gone down with deflation, leaving workers with more buying power. Businesses generally have good balance sheets and are operating efficiently; those that need to borrow can do so cheaply.
Warning against following rallies until the market demonstrates the ability to hold gains.
France denies any possible immediate reprisals for Smoot-Hawley tariff.
Economic news and individual company reports:
US income tax receipts for June 1-20 total $470.7M, down from $499.5M in 1929.
Ford plans major expansions in US, Paris, and Stockholm factories; planning to order Dutch boats to use as transports on the Mississippi and Amazon.
Paramount (movies) is selling at $55 a share, with a dividend of $4 for a 7% yield. Expected to earn $2.75-$3 in first half of 1930, and seasonally higher in second half.
“'Lost Sheep.' An English parson and his family unknowingly take up residence in a former house of prostitution, with farcical complications and a few awkward innuendos; well acted although scarcely worth the effort.”
+ The Boring Stuff: