Assorted historical stuff:
First billion barrels of crude oil took 40 years to produce; second took 8, third 5, fourth 3.5 [current rate is about 80M/day, or a billion barrels every 12 days].
Creation of “railway czar” position “similar to those of the moving picture industry and baseball” suggested as a way of stabilizing railroad freight rates.
C. Kai-Ngau, Bank of China GM, says China trade situation damaged by chaos, overproduction of silver. “In 1929, China actually imported from abroad food-stuffs to extent of over $200M Chinese currency. For China, known throughout its history as an agricultural country, it really is absurd ... This is a life and death problem for our people.” Recommends adoption of gold standard.
New Curtiss plane expected to develop 800hp, fly at 250-300 mph, tested at Roosevelt Field [Long Island, also used by Lindbergh for 1927 transatlantic flight].
“New York State Economic Council states $10M is wasted annually in government in New York State.”
Roxy, theater manager in NY City, “every week saturates his movie house with with an elegant odor which is 'in keeping with the picture.'”
New generation of the Barrymore acting family takes to the stage; Lionel, Ethel, and John are the eighth; now Ethel's daughter, also named Ethel, is to play the part of Seraphine, daughter of title character Scarlet Sister Mary, to be played by the senior Ethel.
Bears more cautious starting the week, content to “play for small technical reactions” but not following up aggressively. 1-3 point declines early in majors including US Steel, American Can, AT&T, but pressure lifted about noon; good recoveries in leading stocks and general market firmer. Majors ended at day highs, some bullish demonstrations in individual stocks including United Aircraft. Oils, utilities, and rails quiet; banks and trusts weak. Bond market dull; rails strong, preferreds weaker, govts. steady.
“Seasoned common stocks” are now selling to yield about 1.5% above commercial paper rate (3%). In 33 year history of the Dow Jones averages, stocks without exception have been profitable long-term investments when average yield was 1% or more above the commercial paper rate.
R. Babson (economist, made good bearish call in fall 1929) calls drought damage overestimated, says Midwest farm and general business situation will improve markedly in final quarter. Also notes commodity production has declined about 30% vs. 10% decline in consumption; predicts shortages soon, restarting of production to supply demand. Doesn't yet recommend buying stocks, but feels “time is approaching when buying opportunities may appear.”
Still little public buying seen in stock market; activity mostly professional. Large and increasing short position, which should eventually be a buying factor.
Option market said more active, puts (bets on stock prices to decline) more difficult to buy than calls.
Harvey Firestone, Pres. Firestone Tire & Rubber, states America is on eve of greater prosperity than past 10 years. Expresses belief in Ford's statement there will soon be work for everybody. Says company has met depression by cutting overhead and lowering prices; plant now running night and day, 6 days a week.
Economic news and individual company reports:
Weather favorable over much of country, providing some relief of drought conditions.
Fed. Reserve member banks report “all other” (commercial) loans up $9M to $8.481B in week ended Aug. 13; loans on securities down $58M to $8.376M.
S.W. Straus report of building permits issued for July in 589 leading cities and towns finds volume of planned construction was $187.6M vs. $184.7M in June; reverse of usual seasonal decline, but down 36% from 1929.
Labor Dept. reports retail food prices down 2.5% in month ended July 15, and 9% in year.
Coca Cola seen taking advantage of low sugar prices by buying a year's supply in advance. Has enjoyed increased sales every year since 1922.
R.J. Reynolds selling about 49, earned $3.22/share in 1929, expected to earn more in 1930, yield 6.1% based on $3 annual div.
Several cigar stocks selling at yields over 9%, including General Cigar (9.3%), Congress Cigar (16%), Consolidated Cigar (13.8%).
Companies reporting decent earnings: Drug Inc., General American Tank Car, Fox Film, Fifth Avenue Bus Corp, International Salt.
“It wasn't so many years ago when: Automobilists wore linen dusters ... No one had appendicitis ... Milk was delivered in tin cans ... There were livery stables everywhere ... Girls sometimes wore cotton stockings and high-laced boots (you were not supposed to know it) ... People generally kept their tonsils ... It seemed necessary to control hatpins by legislation ... Everybody in the audience was scared when the express train came rushing head-on in the motion picture.”
+ The Boring Stuff: