July 25, 2009

Saturday, July 26, 1930: Dow 237.48 +1.97 (0.8%)

Assorted historical stuff:

Editorial: We've criticized Bethlehem Steel for not being open about executive compensation. Some have disputed this, pointing out that the bonus system was disclosed in the 1917 annual report, and that Chairman Schwab has referred to the "million dollar salary" of Pres. Grace. This understates his 1929 salary by about half a million; also, search of reports in the dozen years since turns up no mention of the bonuses. This disclosure seems insufficient.

Farm Board chairman A. Legge issues blunt statement; says stabilization operations not a sound method of dealing with constant surpluses, rejects plea for Board purchase of 100M bushels of wheat. Says problem can only be permanently solved by collective action of farmers to control production and marketing.

Paramount, Hollywood's largest studio, produced 70 feature films in 1929, employing more than 38,000 actors and actresses. Advent of talkies has eliminated many foreign actors due to their accents.

Largest and heaviest steel truss ever used in building construction is placed in Waldorf-Astoria; assembled unit is 312 tons, 90 feet long by 33 feet high, located above main ballroom, supporting part of hotel from 9th-46th floor; allows 10,000 sq foot ballroom to be free of supporting columns.

505-foot skyscraper of novel design to be built at 22 E 40th; “shadowless” design, no window-sills, exterior glass flush with walls.

J.A. Stransky Mfg. of Pukwana, SD prohibited by FTC from advertising their vaporizer device as enabling Ford cars to get 57 miles/gallon, start easier.

Annie Gamble of Atlantic City sued by broker for $3,279 loss incurred on margin account; Mrs. Gamble claims margin investment is a gambling debt, hence illegal.

Bird banding in the US dates to Audubon around 1803; since then millions have been banded through US Biological Survey. Banding requires federal permit.

Market commentary:

Bears skeptical of recent rally renewed efforts to force lower prices for most of the day. Volume became very low as prices declined; bear pressure lifted in late afternoon and prices rallied at close. Banks and trusts slightly lower, insurance slightly higher.

Goodbody & Co.: "We lean to the opinion that the business recovery may be more rapid than many now believe. But in any event, the ensuing months should be used to accumulate good common stocks."

Bradstreet's weekly review reports sentiment improved although business still dull; "The trade situation at present might well be likened to that of a ship in a calm in slack water and waiting for a new tidal or aerial impulse to carry it in a new direction."

Sentiment more positive; this in itself may improve economy, since "majority sentiment shapes the course of business as well as the course of the market."

Union Trust of Cleveland sees increased construction activity (mainly public works and utilities) as first important sign of recovery; says Pres. Hoover's efforts to stimulate construction immediately after last fall's crash apparently bearing fruit.

Conservative observers still advise waiting for market to show ability to move up through resistance levels. Also report not much increase in outside buying yet.

Some stocks with long-term dividend records: AT&T 48 yrs, Standard Oil NJ 42 yrs, Western Union 57 yrs, Penn. Rail. 75 yrs, GE 28 years.

Economic news and individual company reports:

Oil production cuts have temporarily "blown up" in Darst Creek field in Texas; now producing 75,000 barrels/day, up from 20,000 last week. Unless stopped soon, "oil men feel that it will neutralize much of the ground gained through curtailment of operations in other areas."

BLS reports June 1930 US cost of living down 2.8% from Dec. 1929; decline from June 1929 was 2.1%; from June 1920 was 23.0%. However, was up 67% from 1913. Decline in first half varied between 0.6% and 4.9% in different cities. Food down 6.4%, fuel and light 3.3%, rents 1.5%, clothing 1.0%.

J.P. Morgan acts as syndicate head for largest amount of bonds in Q2 at $268M; next is Halsey, Stuart at $126M and Chase Securities at $121M.

Mexico reaches agreement on settlement of government and National Railway debt.

Worldwide zinc producers cartel reaches argreement in principle, details still to be worked out.

Mark Twain story:

"Mark Twain went calling one day without his necktie. He had been visiting Harriet Beecher Stowe of 'Uncle Tom' fame, and he was not aware of his lack of haberdashery until Mrs. Clemens called attention to it on his return. A little later, Mrs. Stowe answered her door to find a messenger, who gave her a small package. Opening it, she found a black silk necktie, and a brief note: 'Here is a necktie. Take it out and look at it. I think I stayed half an hour this morning without this necktie. At the end of that time you will kindly return it, as it is the only one I have.'"

+ The Boring Stuff:

British House of Commons ratifies London Naval Treaty; Japanese approval seen.

Wheat, cotton up slightly, corn strong. Copper unchanged, zinc up. Heavy buying in copper at $0.11/pound, but seen as mostly speculative, not consumer demand. Prices on some steel products down. Government and investment-grade bonds firm, preferred shares irregular.

Bears have recently attacked as Dow approaches the 240 level, so far without much success. Volume drying up on declines considered favorable to bulls (no forced liquidation). Time also on bull side considering expected seasonal fall rise in business

Past week's foreign markets: London irregular, Paris steady, Berlin weak - reaches four-week low.

Foreign financing in US during Q2 was $466M, of which only $39M was refinancing; total was almost as large as two biggest quarters in 1929 combined.

Commerce Dept. reports June worldwide shipbuilding up over 1929, but down from Q1. US now second to Britain; has 238,163 tons under construction vs. 119,000 in 1929. First half US exports of farm machinery hit new high of $78.997M vs. $72.069M in 1929.

First 21 rails report June operating income $20.9M vs. $28.6M in 1929, revenues $120.8M vs. $141.9M.

Packard Motor Car Q2 net $0.19/share vs. $0.17 in Q1 and $0.50 in Q2 1929. Willys-Overland first half net was $151,704 including $1.402M of special items, vs. $4.155M in 1929.

Stewart-Warner (automotive gauges) Q2 net $0.67/share vs. $0.80 in Q1 and $2.02 in Q2 of 1929; raises quarterly div. from $0.25 to $0.50 after cutting from $0.87 in April.

New England Power Assoc. first half net $5.895M vs. $4.889M in 1929. Niagara Hudson Power first half net $8.313M vs. $8.354M in 1929.

Radio Corp. adds 7,000 employees to Camden plant, optimistic based on incoming orders. Number of dealers has increased from 10,000 to 30,000 in past couple of years. Crosley (low-priced radios) expands employees 50% in past month, scaling up to over 1,000 radios/day. Makes 7 sets ranging from $64.50 to $137.50, the last being a combined radio-phonograph. Q2 earnings will be poor but expects good second half.

American Ice expects July/August sales and profits ahead of 1929; first half net was $1.968M vs. $2.108M in 1929.

Walgreen first half net $0.86/share vs. $1.63 in 1929; sales $25.9M vs. $21.0M.

Kelvinator Q2 profit $1.19/share vs. $0.74 in Q1 and $1.22 in Q2 1929.

Corn Products first half net $2.28/share vs. $2.36 in 1929; Q2 net $1.21 vs. $1.18

Industrial Rayon Corp. Q2 net $2.70/share vs. $1.79 in Q1 and $1.65 in Q2 1929.

Autostrop Safety Razor first half net $722,808 vs. $370,655 in 1929.

General Railway Signal first half net $3.03/share vs. $2.69 in 1929.

Truscon Steel Q2 net was $0.82/share vs.$0.10 in Q1 and $1.59 in Q2 1929.

Curtis Publishing Q2 net $2.32/share vs $2.75 in Q1 and $2.51 in Q2 1929.

Melville Shoe first half net $2.33/share vs. $1.80 in 1929.

American Thread profit for year ended March 31 was $0.88/share vs. $1.22 in 1929.

Neptune Meter first half net $2.02/share vs. $1.58 in 1929.

Diesel-Wemmer-Gilbert (cigars) Q2 net was $0.70/share vs. $0.50 in Q1 and $0.78 in 1929.


  1. They had no idea..


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