Friday, July 4, 1930: Dow 222.46 -2.79 (1.2%)

Assorted historical stuff:

Independence Day editorial criticizing post-World War isolationism as a distorted concept of independence; calls for a middle ground “somewhere between the extremes of complete isolation and unreserved internationalism.”

House and Senate pass resolution urging speedup of authorized public works to relieve unemployment. Treasury announces $87.5M contracts to be awarded before end of the year.

Researchers for the state of California find that girls are more intelligent than boys of the same age. About 10% more boys than girls are developmentally disabled; about 4% more girls than boys skip one or more grades; girls found able to study better than boys, and to be "more mature mentally."

Film advertising and publicity directors pledge to join filmmakers in observing the Hays code, including “respect for the clergy and the law, avoidance of ... the mention of specific details of crime, and the featuring of nudity or the use of liquor in American life.” Also, censoring is not to be mentioned in ad campaigns.

Ira E. Robinson chairman of Federal Radio Commission, accuses "radio trust" of seeking to monopolize the airwaves, posing "the greatest danger to the fundamentals of American Government." Calls upon broadcasters to recognize that licenses obligate them as public servants. Also condemns excessive commercials.

Market commentary:

Final session before three-day holiday weekend began very sluggish; leading stocks failed to respond to bullish news of a decrease in brokers loans (down $197M to $3.219B in week ended July 2). Bears then resumed operations in afternoon and activity picked up, with many leading industrial and utility shares shares closing substantially lower. Banks slightly lower.

Gillette Safety Razor plunged to lowest level since 1925 on concerns of increasing competition, good report from competitor AutoStrop Safety Razor. Other bear targets with large price declines included Air Reduction, May Department Stores, duPont, and Timken Roller.

Dr. T. Grayson, dean of Wharton, advocates unemployment insurance; says current tariff system is “suicidal as well as ridiculous.”

Current depression doesn't appear that serious: number of shareholders of major corporations continues to grow; gasoline demand is up; Treasury is running a surplus; mass transit and auto traffic continues high; dividend and interest payments will not be far off record 1929 levels. Prevailing opinion is that “stocks cannot be forced much below current levels.”

H.H. Allen, economist, says history indicates we're in for two or more decades of price decline. Calls on business to adjust. Says that declining commodity prices don't inevitably cause depression, and normal profits are as possible in periods of declining prices as in rising.

Economic news and individual company reports:

Total imports in May $284.6M vs. $400.1M in 1929; exports in May $312M versus $385M in 1929.

Fiat announces plan to increase output, while an Italian tariff of 100% on autos is proposed. Market not sure what to make of it; no shares traded on the Curb Exchange.. “There has been talk from time to time that a big American automobile company was seeking control of Fiat.”

American Chicle (chewing gum, brands including Chiclets, Dentyne, Black Jack, Beeman's) reports net earnings for first five months 1930 were $811,000, slightly higher than 1929. Expects record earnings for the full year. Stock currently sells for approximately 10 times 1929 earnings, dividend yield of 7.1%.

Chicago plumbers union following several months of negotiations receives wage increase of 7.5 cents/hour to $1.70/hour.

Chrysler announces 10% cut in salaries. Cut is being made to share the burden with hourly labor, which has already suffered a substantial reduction in working hours. Cut is being applied uniformly to all salaried employees from Mr. Chrysler on down.

Play:

“The Last Mile - Mutiny in a prison death-house treated in the mood of modern war literature.”

+ The Boring Stuff:

Editorial praising the current year's Federal surplus of $184M, but noting that some revenues such as income tax and customs duties may decline this year. Calls for restraint regarding any new large expenditures such as pension bills or Farm Board [helped to support agricultural prices].

Changes in food consumption habits since the end of the World War: more dairy, citrus fruit, vegetables, vegetable oils, sugar; about the same potatoes and eggs; less cereals, poultry, other fruit.

William Boyce Thompson will filed; estate valued at over $85M; founder of Newmont Mining and Boyce Thompson Institute for Plant Research. Vast collection of minerals, carved stones, and curios left to the American Museum of Natural History. Quote from Henry Alloway's obit for Thompson: "Genuineness of pathos has this week stirred assembly of High Finance eminents at the grave side of this man whose career's deeds, motifs, have brillianted tradition's veritably revivified field of the cloth of gold."

Commodity trading mostly dull, little price change; wheat lower after good crop news. Foreign currencies generally higher, thought to be delayed reaction to low US rates.

Census survey finds only 2% of the general population unemployed (defined as having no job at time of the Census in April, though able to work and looking for a job). Survey covers about one fourth of the population, or 29.3M people. Wide variation found between localities; highest was Nevada at 4.5%. Commerce Sec. Lamont says these figures appear to be representative of the country as a whole and indicate "much less unemployment then was generally estimated."

New bond offerings in first half 1930 were $3.29B vs. $1.91B in 1929; offerings in June $525.4M vs. $630.9M in May. June total was smallest for year except February, but far above any month in first half 1929. Utility, rail, and foreign borrowings all up considerably over 1929.

May US auto exports $31.6M vs. $37.4M in April and $45.3M in May 1929. First five months exports $173M vs. $299.4M in 1929.

Chicago construction contracts awarded in year up to June 28 were $65.2M vs. $220.1M in 1929.

New York construction contracts awarded in June $80.3M vs. $84.8M in 1929.

Department of Agriculture says that drastic reductions in wheat acreage must be made in order for production to be profitable over the next several years. Sees worldwide increase in production without corresponding increase in demand. Calls for organization of producers into "units for collective action."

Baldwin Locomotive reports sales first 6 months 1930 were $17.5M vs. $8.6M in 1929; unfilled orders July 1 were $14.8M vs. $14.1M in 1929; new business booked was $9.4M vs. $17.4M in 1929.

Paramount (movies) expects first half earnings of $2.85/share vs. $2.28/share in 1929.

Packard announces record June shipments of 4,300 cars vs. 4,150 in 1929. Follows $400 price cut on all standard models.

Swiss American Electric earnings for year ended April 30 were $4.66/share vs. $4.63 in 1929.

Island Creek Coal second-quarter earnings estimated slightly under $500,000 vs. $669,498 in 1929.

Ritter Dental Mfg. expects first half sales down 7% from 1929, earnings down 20%.