August 5, 2009

Wednesday, August 6, 1930: Dow 238.47 +0.31 (0.1%)

Assorted historical stuff:

Dornier DO-X flying boat, the world's largest plane [157' wingspan, 134' long, 33' high, 12 engines, over 100 passengers, roughly same size as Boeing 707, see newsreel on webpage right], has made first flight on Lake Constance.

NY Gov. Roosevelt adopts "dripping wet" (anti-Prohibition) plank for reelection campaign, following conference with 4-time former Gov. Al E. Smith [Dem. Pres. candidate in 1928, first major-party Roman Catholic candidate].

Editorial: Gov. Roosevelt's relatively friendly response to rate reduction offer by NY City electric companies is a welcome change from his “near-socialist attitude of last winter” when he clashed with the telephone company and the Republican legislature over requested higher rates.

Current Bell (AT&T) phone system connects 18M telephones by cable and wire, in US, Eastern Canada, British Columbia, and Cuba. By use of radio links, any Bell system phone can now connect to about 30M of world's 34.5M phones in 25 countries, including most of Europe and parts of South America and Africa, and to several ocean liners at sea. US-Europe are connected by 4 radio channels and so can have 4 simultaneous conversations. First transatlantic phone link was US-London on Jan 7, 1927; rate for 3-minute conversation was $75. 1927 averaged 7 calls/day; 1928 increased to 31/day due to more areas reached and price cut to $45. Calls are about 50/50 social and business. Plans by 1932 include transatlantic cable to increase reliability, and transpacific radio service to Hawaii and Asia.

Fidelity & Casualty of NY reports on 4,400 claims filed for accident insurance. Number of accident cases: 807 playing baseball, 562 swimming and bathing, 287 wrestling and "friendly scuffling," 269 bowling, 231 skating, 211 tennis, 194 fireworks, 177 hunting, 164 golf, 89 playing with children, 3 ping-pong.

George Spoor, film pioneer, announces perfection of stereoscopic (three-dimensional) film system after 14 years experimentation.

Cleveland engineer calculates number of configurations of telephone panel switch is 5,502 followed by 54 zeros. Number has no name in our numerical system.

Market commentary:

Stocks continued gains early; majors including US Steel, GE, American Can reached new rally highs on higher volume. Bears tried to start reaction around noon; volume dried up and most major stocks settled into a small range slightly below the day highs. Rails stronger on increased grain shipments. Corporate bonds and preferreds strong, particularly rails; foreign govts. higher except Germany; US govts. dull.

Market seen as having prepared conditions for good uptrend on both fundamental and technical grounds. A year has passed since start of the downturn, typical lengh of depressions historically. Seasonal factors are favorable. Also, recent dull range-bound trading is typical as "market builds up its technical strength."

Recent increases in reported "all other" (commercial) loans strengthen belief that seasonal low point in commercial credit demand has passed.

Recent trading favorites included Radio Corp. (almost 10% of total turnover on NYSE Monday) and Standard Oil NJ.

Third quarter earnings expected down from Q2; July business seen quite slow, some improvement expected Aug. and Sept. but from low base.

Market action seen as continuing mostly professional, public being advised to await new developments before becoming involved. Conservative observers continue to advise those who wish to adopt long positions to wait for reactions to buy, and to take profits on rallies.

Low recent volume seen presaging dull, range-bound trading for some time. "A number of operators have left for vacations, which will last until after Labor Day."

Economic news and individual company reports:

Consolidation in auto industry shown by decline in number of US carmakers from 179 in 1911 to 46 in 1929. Meanwhile, Bethlehem Steel has 53 subsidiaries.

European auto cartel to meet in Paris in October, plan action against American tariff.

Italian stock market continues chronic depression of past two years, current economic slowdown blamed.

Representatives of Southern tobacco-producing states to meet regarding current tobacco price crisis. Price for bright leaf tobacco down 45% from 1929.

Companies reporting decent earnings: Consolidated Film Industries, Federal Bake Shops, Central Public Service (utility).

Chrysler ships 21,779 cars to dealers in July, 80% of 1929 level; best relative showing of year, first half averaged 65% of 1929 level.


Common Clay, a Fox picture, starring Constance Bennett and Lew Ayres. A poor girl, Ellen Neal, is “arrested in a vice raid and lectured by the judge on the folly of attempting to gain happiness by irregular means.” She tries to go straight by becoming a maid in the wealthy Fullerton household; however, the butler and then the family son try to seduce her. The son, Hugh, eventually succeeds. Two years later she is with child and suing the family. At trial it's revealed that Ellen's birth mother committed suicide and the women Ellen thought was her mother secretly adopted her. The Fullerton's lawyer realizes he is Ellen's father and asks Hugh to marry her. Hugh's father is initially furiously opposed but eventually Hugh “sees the light and takes Ellen in his arms.”

+ The Boring Stuff:

Pres. Hoover pledges relief for drought-stricken farm areas, says conditions very serious in some places. Assistance measures still being determined.

Most common names in Berlin phone directory: Mueller, 55 columns; Schultz, 53 columns.

Navy expects Goodyear to complete first “super-dirigible” ZRS-4 for it in April 1931; based on results will decide whether to proceed with ZRS-5.

A.B. Walsh, VP Starrett Investing, says New York City building falling behind recent population increase of about 2%/year.

Queens Borough Planning Commission to discuss use of suspended monorail for expanding mass transit in Queens.

Commodities mixed - cotton down; wheat, corn up sharply.

Agriculture Sec. Hyde repeats Administration position that solution to wheat price declines must be restricting acreage planted; argues for futility of dumping grain surplus on foreign markets, or various proposed forms of subsidy including equalization fees and debentures plan.

German imports down sharply, particularly of staples; many importing firms failing; blamed on economic slowdown. Exporting countries affected include US, Canada, Argentina, Brazil, Chile.

Soviet Union and Italy reach trade agreement providing credit by Italian govt. up to 75% of orders.

US freight car loadings for week ended July 26 were 919,349 cars, down 16.6% from 1929 and 11.1% from 1928. Only 2 of 52 rails were up from 1929.

US oil production up 26,600 barrels/day to 2.515M in week ended Aug 2; gasoline in storage at refineries up 651,000 barrels to 44.1M.

Combined assets of building & loan associations in US at end of 1929 were $8.695B, up $679M for the year.

Exports of fruit from US have greatly increased in past 15 years; averaged $115.992M in 1925-29 vs. $28.025M in 1910-14.

Little prospect seen for rise in newsprint prices from current $55.20/ton. Only strongest companies can make profit at that price, but in spite of recent wave of consolidation, industry is suffering from increased capacity and recent decline in sales.

Number of companies incorporating in NY State in July was 1,866 vs. 2,015 in 1929; number in first 7 months was 14,544 vs. 16,472.

Rio Tinto mining company now in 58th year, currently operating in 25 countries. Current stock price is at 6-year low due to low metal prices.

Steel ingot production at 58% of capacity industry-wide in past week, up 0.5% from previous week. US Steel at just over 64% vs. just under 64% previously.

NY City in July consumed 977M gallons water/day, new record, vs. 911M in July 1929.

S.S. Kresge July sales down 6.8% from 1929, 7 month sales down 1.2%. McCrory Stores July sales down 5.4% from 1929, 7 month sales up 0.9%.

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