No Journal was published July 20, 1930. Once again, a collection of my favorite items of the week. These aren't a representative selection but just the ones that made me smile or take notice.
[Note: Strangely familiar times 10. How many times has this story appeared over the years? It reminds me of the item I see every five years about how the American mafia used to be bad five years ago but is now no longer a threat.] Increased public participation in the market is seen by the larger numbers of shareholders and smaller floating supply for major companies. This buying is for long-run investment; “It is a well informed public now, informed because the well managed corporations are liberal in dispensing information to their shareholders,” unlike the case 25 years ago when “many big industries believed secrecy was the better business policy.”
[Note: Strangely familiar #2.] Bradstreet's Journal and Dun's review report slightly more cheerful opinion in many lines of trade, though "not translated as yet into much apparent activity."
[Note: But they make it up in volume.] Wheat farmers in most of grain belt estimated to have production cost of $1.24/bushel, will get about $.68/bushel when sold.
[Note: Sheer Genius department.] Movie house operator in Tehran fined for faking talking film by using phonograph manually operated to match silent film's speed.
[Note: Wait ... you mean stimulating speculation to dangerous proportions is bad??] Federal Reserve faces tough problem in how long to continue easy money policy, since in time “this has always stimulated speculation to dangerous proportions.”
[Note: You might have done OK on that one.] Wrigley selling for about $75, earned $2.82 in first half, dividend of $4. Expected to benefit from removal of tariff on chicle.
France proposes "United States of Europe" federation. Britain cool to the idea, but it's probably workable without them. However, German participation would be essential. German response "conciliatory in tone," but raises some big obstacles, indicating desire for revision of the World War peace treaties, "including, presumably, alteration of certain of her new boundaries and removal of the treaty restriction upon her military establishment."
[Note: Arabia?? How are they going to afford all that gasoline?] World registration of automobiles was 35.1M at start of 1930, about 76% in the US (about two cars for every nine people in the US). This suggests a large market to be developed in the rest of the world since desire for cars is almost universal. "Even in Arabia, where the love for the horse is almost worship, the automobile is making its way and finding friends."
[Note: Strangely familiar #3.] American Museum of Natural History produces The Bottom of the World, a film about expedition to the Antarctic; "The penguins, to which a large part of the film are devoted, are excellent camera subjects, and provide a natural humor in their likeness to human beings."
[Note: Pretty amazing list of new industries.] About 4.7 million people owe their living to the auto industry, 3.96M directly employed. Industry has gone from being insignificant 25 years ago to now essential to prosperity. Other important industries developed in that period: telephone, radio, electricity, electric refrigerator, airplane [true, but we've produced twitter!].
Hopeful sign seen in low inventories carried by industry and retail; about as low as ever compared to volume of business. Retailers have been buying "hand to mouth" for months. This differs from the 1921 depression, when inventories were at record highs. This should add a large boost when the economy turns.
More bullish factors: Dow yield, allowing for probable dividend cuts, is 4.75% vs. 3.25% for commercial paper; a spread over 1% has been a reliable buying indicator. Also, generally low interest rates, and the passing of a year since business began to turn down.
Association Against Prohibition Amendment estimates last year's cost at $959.9M; about 90% is lost Federal revenue, remainder lost local revenue and costs of enforcement. Finnish Education Min. P. Virkkunen calls prohibition in Finland "chief source of intemperance, as well as failure on economic grounds."
[Note: Could explain high number of accident deaths.] Survey of 100 Detroit drivers held for violating traffic rules finds "42 were classified as of inferior intelligence, 12 as definitely feeble-minded, one as insane, and three as physically handicapped." Also, 46 were impaired by alcoholism, and only 13 were completely clean.
Good signs seen in rise in life insurance sales and bank deposits vs. 1929.
Industrial cities in Ruhr region of Germany suffering from slag heaps (artificial hills of industrial waste) that can smolder for decades. At Essen, slag heap of Krupp's works has been burning continuously since 1914.
Luther Burbank invents "prunasimmonia", cross between prune and persimmon. Delectable fruit with tomato-like skin and "rich, golden yellow meat."
Industries with good first-half earnings include cigarettes, sulfur, can, baking/biscuit, oil, and chain stores.