Assorted historical stuff:
Editorial: Some have called for extension of branch banking by pointing to the 5,000 bank failures in the past 10 years, many of which were small independent banks in rural areas. In fairness, many of these failures were due to “extraordinary economic changes ... not likely to be witnessed again for a long time,” including deflation in agricultural prices and collapse of real estate boom. “When a bank fails it is the bank officials that must bear the blame ... but in the end the local community, carried away by the speculative fever, is not without ... responsibility.” Change in banking system should come naturally, not by scrapping old system.
Navy Dept. considers closing all but two navy yards on Atlantic Coast and selling expensive properties acquired during world war; would save millions annually.
Canada has largest amount of hydroelectric construction underway in its history, including 9 large projects.
Federal grand jury in Brooklyn proposes plan for reducing pollution in New York harbor by using modern incinerators for sewage disposal, inspecting ships thoroughly, and removing all sunken vessels.
Loose-Wiles Co. cashing in on aviation craze by producing biscuits in shape of airships.
Market opened vigorously, with major industrials including US Steel, GE, Westinghouse, advancing to new rally highs. Irregularity developed toward noon as profit-taking came in; some nervousness also caused by another break in Vanadium on Peru revolution (main vanadium deposits located there). Volume was active early but dried up on the setback. Declines were moderate except for individual stocks including IT&T and Gillette. Banks and trusts strong, particularly City. Bond market strong on active trading; many new highs in high-grade utility and rail bonds; preferreds and convertibles rally; govts. firm.
There's a large amount of money on sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly intrenched.” Economists point out that banks and insurance companies “never before had so much money lying idle.”
Fed. Reserve seen continuing easy credit policy pursued since start of year. Some concern that increased reserve credit “will flow into speculative channels,” but this doesn't seem to have happened much yet.
Recent market strength seen in strong response to good news, resistance to weakness in isolated spots, and declining volume on setbacks.
A large broker reports signs of important bank buying of leading stocks, notably American Can.
Intl. Nickel Co. of Canada reports survey of leading US and Canadian industrialists finds growing optimism that worst of the depression has passed and gradual upturn will start in the fall.
Economic news and individual company reports:
F.W. Dodge reports construction undertaken in 37 states east of Rockies was $3.285B in year up to Aug. 23, vs. $4.035B in 1929. Labor Dept. reports building permits in first half for 85 cities were $736.6M, vs $1.570B in 1929.
Govt. reports weather helps crops in past week; recent rains over much of US benefit corn, though drought conditions remain in substantial areas.
Weekly steel reviews said cautious but somewhat more hopeful; ingot production slowly increasing; scrap prices showing strength although finished products prices still weak; good demand from tinplate, structural steel, oil and gas industries.
National Park Service reports visitors through week ended Aug. 9 were 1,942,541, up 121,095 over 1929. Most of increase was automotive.
Companies reporting decent earnings: Coca Cola, Columbia Gramophone, Warren Bros. (pavement).
Company reports since July 1: 167 companies reported increased earnings vs. 1929 and 401 decreased; 770 dividends unchanged, 12 new, 5 increased, 50 cut.
First 54 rails report July earnings $57.7M, down 32.3% from 1929 but up 19.2% from June.
Atchison, Topeka & Santa Fe Railway reports July income up over 1929 in spite of decline in revenue; achieved by cutbacks in expenses including capital improvement and maintenance; considered hopeful sign that other rails can do the same.
Rudolph Guenther-Russell Law, Inc. (advertising agency) reports distinct revival of interest in advertising by financial corporations, utilities, and industrials.
“A blonde flapper called at the hospital the day after the accident.
'I want to see the young man who was injured in the auto wreck last night.'
'Are you the girl who was with him?' asked the nurse.
'Yes,' was the reply, 'and I thought it was only right to come and give him the kiss he was trying for.'”
+ The Boring Stuff: