Assorted historical stuff:
Editorial: Adversity of the depression has its benefits, including a return of the virtue of thrift. “With unemployment and destitution in evidence” people are more inclined to provide for the future of themselves and their children; in boom times this is easily forgotten. This trend is seen in savings deposits - they gained $273.8M in the first half vs. a decline of $82.7M in second half of 1929; July has shown a further gain for the first time in six years (normally people withdraw money to pay for vacations, etc). Life insurance also shows the trend, with new policies in the first 7 months up 1.5% over 1929.
Pres. Hoover directs $125M of federal roadbuilding funds, with matching state funds, to be made available Sept. 1 instead of Jan. 1.
Former French Pres. Poincare warns Germany that France will not stand for any revision of Versailles treaty, saying German idea of revision is “immediate or progressive remaking of the map of Europe at the pleasure of the Reich.”
Canadian govt. bars most immigration except farmers; policy considered temporary due to unemployment.
Martinez De Hoz, Pres. Argentine Rural Society, says world overproduction in agriculture due to protective tariffs, will exist for years, perhaps decades.
NY City mass transit lines carried about 834.287M passengers in Q1, up 12.326M from 1929. Revenues were $40.314M, up $532,000.
NY City testing new subway cars with doors that just stop when something gets in the way instead of completely reopening.
Movie companies still deciding how to make foreign sound films; possibilities include dubbing foreign voices onto US actors, filming with foreign actors in US, or filming abroad. Paramount filming in Paris using foreign actors in 10 different languages. J. Lasky, Paramount production VP, says this isn't as expensive as it sounds; also notes not much demand yet for color or widescreen films; will test three-dimensional film process.
Dept. of Agriculture testing 58-year old sample of honey at regular intervals. “Like liquor, honey does not deteriorate with age but mellows, the mellowing being manifested in a gradual darkening of the sweet syrup.” Sample is white clover honey; but now resembles blackstrap molasses, “tastes not unlike buckwheat honey.”
Bears attacked early, hoping market had been weakened technically by extensive forced short-covering Friday; forced early declines in US Steel, American Can, Vanadium, Radio, and other trading favorites. Attempts to extend initial losses met strong buying; urgent short covering resumed in last hour, giving vigorous rebounds in US Steel, Vanadium, J.I. Case, and other trading favorites. Bond market quiet, govts. and high grade corp. firm, convertibles higher.
Financiers and economists “somewhat befuddled” by current business situation; economy has descended from “the heights of the greatest business prosperity the world has seen,” and it's difficult to “get their bearings in the new scheme of things.” Most are “watching and waiting rather than predicting.” Of course, things will eventually turn around, “and when the upturn does come it will be based on the most solid foundations in many years.” In the meantime, the market is marking time.
Level around 215 seen as double bottom, having brought out strong buying support both in late June and past week.
Short interest seen still large in spite of forced covering in past few sessions.
Earnings reports since July 1: higher earnings reported by 120 companies, lower by 307, dividends unchanged by 594, increased by 3, cut by 39.
Economic news and individual company reports:
Some rains in drought-affected areas, improving crop conditions, though further rains would help. Stocks of railroads in affected areas stronger.
External trade of foreign countries generally declines vs. 1929; Canada July trade down about 25%; Argentina exports first 7 months down 35.4%; France first half trade down about 10%, Italy July trade down about 30%,
BLS reports July wholesale prices down 3.4% from June and 14% from July 1929.
Bureau of Securities (prosecute securities fraud) took 124 actions against 444 individuals and companies in first 7 months, vs. 104 against 342 in all of 1929. Increase in prosecutions of “bucket-shop operators and other fraudulent stock manipulators.” Total customer losses $37M.
Companies reporting decent earnings: Jewel Tea, Virginia-Carolina Chemical, Republic Stamping & Enameling.
Howard Hughes presents Hell's Angels. “More spectacular scenes of fighting in the air probably have never been photographed, but the story around which these scenes are built is stupidly improbable. ... views of the huge Zeppelin plowing through the clouds toward London have been photographed with striking beauty. ... to escape the pursuing British planes, the captain of the airship ... commands about a dozen members of the crew to step off into the void - without parachutes - 'for Kaiser and for Fatherland.' Then ... the big Zeppelin is finally set aflame by a British plane ... [that] dives directly down upon it, crashing it in twain.”
+ The Boring Stuff: