Assorted historical stuff:
Times reports Gandhi willing to end civil disobedience campaign if British and Indian govts. adopt policy of dominion status for India and free political prisoners.
Editorial: Gandhi's reported peace terms are due to his recognition of the inevitable collapse of his campaign for complete independence. “He has accomplished nothing for India, but has caused considerable bloodshed, much suffering, and has disrupted trade with Britain which has had a direct influence upon our business.” England is pledged to help prepare India for self-governing dominion status, but India too must do its part; movements like Gandhi's set back this goal.
Port of Bombay imports of cotton in June down 44% vs. 1929; drop in cotton trade badly affecting British cotton mills.
Editorial: Labor Sec. Davis has favored higher wages for foreign workers to increase their purchasing power and prosperity. This is putting the cart before the horse. The more important way to help foreign workers is by free markets so their products can be sold here. This will enable European businessmen to raise pay.
Spanish Premier Berenguer says decline of peseta currency “entirely fictitious,” blamed on “speculation whose threads are obscure.” Finance Min. Arguelles resigns. Govt. trying to cut budget “ruthlessly” to stabilize currency, including by delay of payments to contractors on public works already constructed.
British Air Ministry promises regular air routes across Atlantic; also considers establishing seadromes 300 miles apart on one route.
Court of Appeals in Denver decides interstate transportation of stolen plane is federal offense; Dyer act was previously only applied to cars.
Market commentary:
Bulls encouraged by resistance to repeated bear efforts Saturday and Monday following explosive rise Friday; buying movement spread broadly across the market early. Major industrials strong including US Steel, GE, Westinghouse, as were major utilities and rails (Consol. Gas, New York Central). Steel news caused some irregularity, but good buying appeared on setbacks. Bond market firm; corp. and preferreds up; govts. steady; Dow 40 bond average at new yearly high of 96.61.
E. Johnson, former Pres. Victor Co. (merged with RCA), returns from trip to survey conditions in Europe; feels general US business recovery under way, will be comparatively rapid up to a certain point; thinks stock prices somewhere near bottom.
Conservative observers even more cautious than usual; believe recent rally due to oversold condition, and decline will resume when short-covering ends.
Some market students encouraged by repeated support above June lows, advise buying leading stocks if they again approach these levels.
J.H. Oliphant & Co. finds Dow action this summer technically interesting; 6 times since June, market has found strong support after declining to 215-218 level.
Bears reportedly less confident after last week's action, though short interest remains large. Public participation still seen small.
Increase in credit outstanding in first half was interpreted bullishly, but has stopped since mid-June. “This may mean that stimulus to business in the form of credit expansion induced by Federal Reserve policy has reached its effective limits ... ”
Economic news and individual company reports:
US rail freight loadings for week ended Aug. 9 were 904,157 cars, down 14,178 from previous week and 187,966 from 1929; worst decline yet vs. 1929.
Steel production industry-wide was at 54.5% last week vs. 56% previous week and 58% two weeks ago; US Steel at 62% vs. about 62.75% previous week and 64% two weeks ago. Decline was unexpected; some improvement had been rumored.
Oil curtailment still working: Gasoline in storage at refineries Aug. 16 was 41.252M barrels, down 1.477M in past week; refineries operated at 72.6%, up from 69.1%; crude oil production was 2.464M barrels/day, down 16,800 from previous week and 478,000 from 1929.
Public utility earnings generally higher year over year in each month, though declining month by month this year. June net earnings of 95 utilities were $83M vs. $79M in 1929, but lowest of year so far and down from high of $92M in Jan.
NY City budget for 1931 expected over $600M vs. $569.8M this year.
Companies reporting decent earnings: Exchange Buffet (restaurant).
Jokes:
“'My razor's awfully blunt, dear. I can scarcely shave with it.'
'Why, Charles, you don't mean to tell me your beard is tougher than the linoleum!'”
“A young officer at the front wrote home to his father:
'Dear Father: Kindly send me 50 pounds at once: I lost another leg in a stiff engagement and am in the hospital without means.'
The answer was: 'My Dear Son: As this is the fourth leg you have lost ...'”
+ The Boring Stuff:
France reportedly has labor shortage - only 2 workers available per 3 open positions, importing mine workers.
Pres. Hoover names drought relief committee; Agriculture Sec. Hyde is chair. General rains over past 2-3 days have turned corner for current conditions, but real burden of drough expected to be felt next winter; govt. seeks to be ready to offer aid to affected areas.
Henry Morgenthau, former ambassador to Turkey, will raise funds for Gov. Roosevelt's reelection campaign [son Henry became Treasury Sec.; grandson Robert, now 90, has been New York County District Attorney since 1975].
Treasury Sec. Mellon: “I believe that just as soon as much of the products on the market at present are disposed of the business depression will better itself. The curtailments in output without a question will correct the present condition within a short time.” [Note: Mellon later denied saying this.]
Commodities fluctuated, rallied late; cotton touches new low below 10.7 cents but rallies to close up near 11 cents; grains sharply lower in afternoon but rally to end slightly lower; refined sugar down to 4.40 cents.
Radio Corp. again subject of rumors of pool operations; prominent bull operators reported involved; volume on Monday was 10% of all NYSE turnover.
Out of 1,316 NYSE-listed stocks, 81 are selling below $4 a share.
Average price for bright leaf tobacco in Georgia markets drops to record low of 9.68 cents/pound vs. 18.67 cents in 1929.
Standard Oil NJ denies report they are negotiating to obtain Spanish oil monopoly in exchange for loan.
Lawsuit to block merger of Bethlehem Steel and Youngstown Sheet & Tube seen disrupting steel industry, since almost all large steel companies except US Steel and Jones & Laughlin are at least indirectly involved. Steel industry seen benefitting from any early settlement.
Federal expenditures for July and first 15 days of August were $403.1M, up $29.1M from 1929; total receipts were $197.4M, down $54.8M; customs receipts were down over $36M.
Agriculture Dept. estimates wheat production in 20 countries at 2.261B bushels vs. 2.178B in 1929. US estimate is 820.6M vs. 806.8M in 1929.
Commercial Credit Co. (auto and industrial financing) reports larger delinquencies in first half, but improved trend recently; as of June 30, percentage over 2 months past due were 0.47% of car notes and 1.42% of industrial receivables and open accounts. Company expanding industrial financing due to lower car sales.
Total car financing in June was $141.9M on 332,852 cars vs. $179.0M on 384,520 in 1929.
Some good news on July sales and earnings from Kansas City Southern (rail - July earnings up over 1929), US Rubber Co. (high tire sales in July/August).
Chrysler introduces roadster listed at $535, lowest price ever for a Chrysler car.
A couple of weak car stocks: Stutz, down below 2, high of 34 in 1929, all-time high of 724 ten years ago. H.H. Franklin, down to 6, high of 46 in 1929.
Melville Shoe (shoe retailer - brands include Thom McAn, John Ward) selling about 36, dividend $2, earned $3.99/share in all of 1929, and $2.33 in first half.
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