No Journal was published Sunday, Sept. 28, 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.
“'Did you read about those folks who were paralyzed from drinking Jamaica?' inquired Colonel Bozeman of the storekeeper recently. 'Yes. Terrible, wasn't it?' 'Terrible, indeed,' replied the Colonel. 'I suppose,' he added wearily, 'that I'll have to reform and go to drinking vanilla'.”
[Note: OK, this one is so obscure it probably requires a commentary. This is a joke about the practice of using alcoholic flavor extracts as cheap drinks during Prohibition, in particular about a tragic episode involving Jamaican ginger extract adulterated to meet Prohibition requirements that caused many cases of paralysis. This episode is where the slang expressions “jake leg” and “he's jakin' it” originated. For more on this, see Dan Baum's fascinating New Yorker article. ]
[Note: Ay Chihuahua! dept.] Banks seen in strongest shape since Fed. Reserve system began functioning in 1917; extending near-record level of credit, and borrowing lowest amount from Fed. Reserve since 1917 (currently about $1B vs. $1.4B a year ago). Reasons for low Fed borrowings include low level of currency in circulation, low credit demand, both due to depression. US gold holdings have been increasing due to favorable trade balance. Some observers are, however, warning that banks are placing too many assets in securities and security loans; these total $14.666B, up $1.6B in past year, while commercial loans are at $8.462B, down $928M.
[Note: Strangely familiar dept., though I think “shadow banking system” sounds more appropriately sinister.] While total banking credit including loans and investments hasn't declined much off the peak, there has been a large decline in credit extended by an “invisible banking system”; brokers loans extended by “others” (not banks) are down $2.5B in past year, and this credit reached business indirectly.
[Note: Theater was much more interesting then dept.] A scene from Fine and Dandy, a musical starring Joe Cook: “A life-size steam shovel is in the center of the stage. Behind it on a platform is Joe with a saxophone. When he begins to play the saxophone ... a chimpanzee in a palm tree hits a man on the head with a cocoanut, an Indian shoots the steam shovel operator with an arrow, and the steam shovel operator drops the theatrical equivalent of a ton of ashes and crockery on the head of ... Dave Chasen, who completes the concordance ... with a sweet tinkle of his triangle.”
[Note: Ay Chihuahua! dept.] Sec. Of State H. Stimson addresses NY State Republicans, says Hoover administration is most effective of any president in recent years, having fulfilled 34 of 35 campaign pledges. Says Hoover not responsible for depression, which has worldwide and and deep rooted causes; calls Hoover administration's actions in response “prompt, scientific, and courageous,” and serving to “greatly palliate what might otherwise have been a most disastrous situation.” Praises flexible tariff provision as eliminating politics and lobbying in tariff making. Also commends London Naval Treaty and Farm Board.
[Note: Strangely familiar dept.] T. Woodlock on rail regulation: “We cannot have a successful hybrid between private enterprise and governmental operation – it must be one thing or the other.”
[Note: This guy's good! dept. Not commenting on Keynesian economics, but hard to deny he was a good investor.] J.M. Keynes: “Course of interest rates will be steadily downwards and prices of first-class bonds steadily upwards.”
[Note: Well, as long as the program just offers some moderate and temporary incentives, what could possibly go wrong?] Pres. Hoover calls for program to stimulate homeownership; says finances of homebuilding are inadequate, easier to borrow 85% on a car than a home, and home loan generally is at higher interest rate; also needed is safeguarding of home areas from “commercial invasion and destruction.” Doesn't want federal govt. to build homes directly, but believes adequate home-building program would be very valuable.
[Note: Strangely familiar dept.] Dr. F. Parker of Wharton School addresses Amer. Assoc. of Personal Finance Cos., says they have a chance for public service in the current trying times: “To reply that ... lack of current earnings power on the part of a prospective borrower immediately makes him a bad risk for personal finance companies is not a satisfactory rejoinder, for a credit policy worthy of the name should provide credit when credit is needed by the borrower not when it is deemed most profitable and expedient to be extended by the lender.”
Appearing at the Palace (vaudeville):
[Note: Yes, it was that Buddy Ebsen, and this seems to have been his big break.] Marion Sunshine does impressions of Broadway people ranging from “temperament of Lenore Ulric to the boop-boop-a-dooping of Helen Kane,” also does a good Maurice Chevalier. Also appearing are some of “Broadway's stars of the future” including Southern dancing pair Vilma and Buddy Ebsen.
[Note: OK, I couldn't find the 1930 version, but here's a remake from 1942 with a great cast including Marlene Dietrich and John Wayne.] The Spoilers, with Gary Cooper - story of corrupt officials in Nome, Alaska gold mining country; sentimental melodrama, but excellent acting and good production “represents a return to the best elements of the silent pictures... climax ... is the most vigorous and thoroughly realistic [fistfight] the talkies have yet shown.”
[Note: Speaking of which, I wonder why they never made a movie about this – it's a good story.] Today is the 61st anniversary of Black Friday, on which Jay Gould and Jim Fisk engineered a corner of the gold market that the government had to break by releasing $4M of gold from its stockpiles. That number makes an interesting contrast with the $26B decline in security values in the fall of 1929.
[Note: I warned him about the name.] James Boring Travel Service files for bankruptcy.
[Note: Strangely familiar dept.] Commerce Sec. Lamont reports some encouraging business news including gain in exports in August that was broad-based and higher than usual seasonal pattern; gains in retail trade together with low inventories; and increased buying ahead of raw materials by industry.
[Note: Strangely familiar dept.] Chicago Society of Commerce reports wholesale and retail buying improved in past week, with moderately priced goods doing better. Inventories low, with active restocking by merchants country-wide. General opinion that business will continue to improve up to and including holidays.
[Note: Nothing makes people spring into action faster than sinister short-sellers during a market crash.] Agriculture Sec. Hyde charges Russia with short-selling wheat to drive prices down, prompting blizzard of activity. CBOT Pres. Bunnell asks for evidence; CBOT member Bennett ridicules idea that Russia would do this since they have wheat to sell; Iowa Sen Brookhart looks into closing the CBOT; Farm Board member McKelvie says believes the CBOT could stop short-selling by Russia; Russian Rep. Belitsky denies large-scale short-selling.
[Note: Hopefully not soon to be strangely familiar dept.] Market has continued to confound the majority; less than two weeks ago vast majority of brokers were bullish on both technical and fundamental grounds following advance past 241 resistance level, but between Sept. 10-19 Dow has declined from 245.09 to 229.02.
[Note: Market blatherers had better vocabularies then dept.] Week in review: “Recrudescence of gloom” blamed on disappointment over pace of recovery, anticipated poor Q3 earnings, German rumors, and renewed bear pressure. Still uncertain if correction is merely technical. Credit remains easy. Some improved steel buying. Wheat hits new post-1914 lows.
[Note: A marketing approach to securities – that's crazy talk!] P. Cherington, of J. Walter Thompson, addresses Financial Advertisers Association meeting: “The banker has only recently come to realize that he has marketing problems as pressing as those of the manufacturer or distributor of merchandise.” Calls for application of marketing approach to selling of securities.
Experimental secure wireless telephone tested; device transforms spoken words into unintelligible state and retransforms them on receipt.
[Note: This could be the first mention of the cellphone, except the cellphone doesn't do the retransforming part.]