No Journal was published Sunday, Sept. 21, 1930. Once again, a collection of my favorite items of the week. These aren't a representative selection but just the ones that made me smile or take notice.
Sept. 20:
[Note: Hey! This guy is actually making sense! dept.] Editorial: The Berlin Institute for Studying Trade Fluctuations predicts from historical analysis that commodity prices will continue declining until 1940. This may or may not happen. In any case, all other things being equal, a period of commodity deflation benefits most people provided it's not so rapid as to produce serious economic dislocation. However, we now have the serious complication of huge war debts (about $12B) loaned by us to allies when prices were much higher. We should consider adjusting these debts based on commodity prices, since if we do get long-term deflation the current debt level won't be sustainable.
[Note: Total ripoff of The Sixth Sense dept.] Outward Bound - Leslie Howard makes “auspicious film debut” as drunk passenger in eerie tale of “ocean liner which is the modern equivalent of Charon's boat.”
[Note: I believe Greenspan is working on a new helicopter design for Bernanke... the rotor stands still while the aircraft turns.] Thomas Edison visits Newark Airport, hints he is working on new approach to developing helicopter.
[Note: It's the town that Billy Sunday couldn't shut doowwn ...] Statue of Venus de Milo in public square of Rev. Billy Sunday's hometown was subject of a shocked protest by a visitor from Chicago who planted poison ivy at the base. Townspeople called the fire department to wash the ivy away; said they couldn't understand why anyone from Chicago should be shocked at anything.
[Note: Hey! This guy is actually making sense! dept.] A. Reynolds, Cont'l. Ill. Bank & Trust Chair., criticizes Fed. Reserve easy-money policy as ineffective in reviving business, says it may cause banks to buy bonds that have “not always turned out fortunately” in the past; “it is a serious question as to whether a commercial bank should be a large purchaser of such bonds.”
Sept. 19:
[Note: Strangely unfamiliar dept.] Editorial: Brazil is facing severe economic crisis. Almost 80% of export trade is coffee. However after many years of being almost the world's sole source, other countries have started raising competitive grades of coffee. The resulting oversupply has slashed coffee prices by more than half, resulting in huge losses for growers, labor discontent because of lowered wages, outflow of gold to pay for loans, and a huge surplus still to be disposed of. “Brazil must realize that it is now at the crossroads”; it must diversify into some other source of income.
[Note: Poorer available quality ... thank God he didn't live to see Miller Lite!] Dr. Frey, Dir. German Dept. of Health, reports on German alcohol consumption. Says current level is far below prewar years but has increased since 1916; alcohol-related diseases are much milder than at the turn of the century. Believes US mortality from alcohol is as large as German due to poorer available quality. Also believes number of brutal crimes in a country is directly proportional to rise or fall in alcohol consumption.
[Note: Perils of relying on historical performance dept.] Trusteed Share News reviews history of severe market reactions in past 30 years, including those in 1903, '07, '17, '21, and '29. Points out that every market low was higher than the previous one, and therefore that buying after the market reaction “would have rewarded the investor in the highest degree.”
Sept. 18:
[Note: Strangely familiar dept.] Wild gorillas are becoming so rare that a sanctuary has been declared in southwest Uganda.
[Note: Strangely familiar dept. ... but thank God he didn't live to see Lehman Brothers!] Arthur Lehman of Lehman Brothers: “improvement in business is slow but is nevertheless gaining; recent trends indicate no lines of business are getting worse, while a few are getting better.”
Sept. 17:
[Note: Interesting ... I'd bet the most important nanotech application in 30 years will be one we aren't even thinking about now.] O. Caldwell, Electronics editor, says “vacuum or electron tube” will be third great electric revolution following Edison's incandescent lamp and Westinghouse's introduction of alternating current. Greatest benefit to utility industry will be transmission of direct current over existing high tension lines, allowing 3 - 6 times as much power. Use of tubes also greatly reduces size of equipment; “a vacuum tube switch the size of a gallon bottle” can replace a 2 - 3 ton oil switch the size of a room.
[Note: Strangely familiar dept.] Many are now watching unemployment closely, including BLS Aug. report of 1.6% decline in industrial employment and 2.6% in wages. Reversal in this trend would be considered very encouraging.
[Note: Strangely familiar dept.] Recent banking trend has been to higher deposits, higher investments and flat to lower loans (commercial and on securities).
Sept. 16:
[Note: Strangely familiar dept.] Today is 10th anniversary of deadly bombing at Wall and Broad Streets; bomb exploded 12:01PM, closing Stock Exchange and almost all financial operations.
[Note: Pretty amazing number considering how much smaller the US population was then.] American Motorists Assoc. estimates car accident deaths for 1930 at 36,000, vs. 33,060 in 1929.
Sept. 15:
[Note: Good luck with that dept.] Standard Oil of California calls for cooperation of industry and public in conservation of oil resources aiming at “a stabilized ... price over a long period of years rather than low prices during the periods of excessive production with high prices when the time of shortage arrives.” Cites President Coolidge letter from 1924 to Oil Conservation Board: “overproduction in itself encourages cheapness ... wastefulness and disregard of essential values.”
[Note: For you non-Depression buffs, this was a few months before the banking system started to collapse after Bank of the United States failed. I guess bankers saw the iceberg coming about as well back then as they did in 2008 ... ] American Bankers Assoc. to meet in Cleveland Sept. 29. Topics of first three general sessions are “Problems We Bankers Must Meet” (expected to cover branch and group banking developments), controversial topics in bank taxation, and “The World Today.” President Hoover to address fourth session.
[Note: Strangely familiar dept.] The great debate: Bears argue that past month's rally has already discounted the mild improvement in business, and that decline in steel production in past week indicates weakness. Bulls counter that steel decline was due to Labor Day, that August steel and car loading figures show more than seasonal improvement, and that recent retail figures and company outlooks have been improved. On the technical side, bulls believe the recent rally has “definitely broken” the downtrend since last Sept., indicating future support should come in well above the June bottom of 212.
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