Assorted historical stuff:
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.
Fascist leader Hitler testifies at treason trial of three young officers accused of spreading fascism in the Reichswehr (military). Stresses that he intends to gain power in Germany by legal means; however once in power would employ every means including illegal ones to scrap treaties imposed on Germany. Believes that after two or three more elections, “a National Socialist uprising must come.” Informs court he is a citizen of no country; native of Austria but never obtained German citizenship due to political activities. German authorities in New York continue to believe Social Democrats will form a successful coalition excluding radical parties.
Lord Rothermere, London Daily Mail and Evening News publisher, says German Fascism is bulwark against Communism, will lead to “rebirth of German nation.”
England is one of few countries where birth-control information is freely and legally given out. Sir W. Lane, eminent physician, favors greater effort to spread this information to the poor. Social workers believe effort so far is main cause of recent decline in England's birthrate.
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.”
Cotton mill owners vote to end night (9PM-6AM) work for women and children starting March 1, 1931.
Production of the RCA Radiotron tube uses 57 of the 91 elements known to man, most used of any product currently made. Many materials used in making radio tubes were scientific rarities until demands of radio engineers made them commercially available.
Market commentary:
Market wrap: Stocks subjected to further heavy selling; much of the lists hit new lows for the current reaction. Stocks making 1930 lows included Radio, Gillette, and J. I. Case. Other stocks under pressure included both trading favorites and majors including Vanadium, United Aircraft, US Steel, GE, Johns-Manville, Standard Oil NJ. Banks and trusts, oils down sharply. Traction (mass transit) shares up on unification reports. Selling continued through the day, interrupted only by minor rallies, and picked up steam in the final hour. Bond market strong and active; Dow 40 bond avg at new 1930 high of 97.64; govts. firm, convertibles down.
Unconfirmed rumors have been common recently; “Speculative liquidation usually is accompanied by rumors of drastic developments pending. The general fears arise from the fact that the market moves downward under a heavy supply without much explanation for the selling.”
Recent action of certain stocks “sponsored” by stock pools indicates the pools may be giving up and liquidating.
Investment trusts (similar to mutual funds) have found it hard to take advantage of the recent market decline due to being almost fully invested already. Public has become disenchanted since they had the “curious” idea that investment cos. could “read market movements in advance and profit … by the ups and downs”; they possibly may have gotten this idea from brokers selling the trusts. As a result, many investment trusts are selling at large discounts from their net asset value.
European stock markets are echoing the recent steady liquidation on the NYSE.
AFL Pres. Green sees unusually good Sept. improvement in employment over July and Aug. based on trade union reports from 24 cities.
P. Clapp, Natl. Electric Light Assoc. director, says conditions in electric power industry very favorable, excellent prospects for uptrend in power output.
J.M. Keynes: “Course of interest rates will be steadily downwards and prices of first-class bonds steadily upwards.”
Economic news and individual company reports:
Ford and GM have been doing better than rest of the car industry; sales for first 7 months are down 14.1% from 1929 vs. 48.5% decline for rest of industry.
Fed. Reserve reports money in circulation in week ended Sept. 24 down $23M to $4.436B. Fed. Reserve member banks in NY city report brokers' loans unchanged at $3.222B vs. $6.761B in 1929, “all other” (commercial) loans down $15M to $2.414B.
Dow 8 iron and steel products avg. Sept. 23 was $45.46 vs. $45.52 last week, new low for 1930. Steel scrap activity down last week, prices almost unchanged.
US Steel average employees in first-half were 220,591, down 1.9% from average for all of 1929; “management ... has made every effort to keep the organization intact during the business depression.”
Tax joke:
A Lebanon man offers his simple formula for income tax. Dependents: one blonde wife, a sedan car, three goldfish and two children. Multiply grandfather's age by 6 7/8, subtracting your telephone number. Add hat size and subtract license plate number. With these preliminaries done, rest is easy. Deducting $1,000 for keeping wife a blonde the whole year, divide the remainder by number of lodges belonged to, multiply by number of electric lights in house, and divide by collar size, giving gross income, which, after dividing by chest measurement and subtracting blood pressure, leaves net amount owed to government.
Theater:
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.”
+ The Boring Stuff:
Editorial: Wheat for September delivery went from 76 3/8 cents on Sept. 20 and 82 1/8 cents Sept. 24; main cause of this wild fluctuation was the scare publicity that Russia would flood the world wheat market. This hit the already jittery futures market like “a cry of fire in a crowded theater.” We should consider using the prohibition method of padlocking doors on those who spread such erroneous news. On sober examination the Russian wheat situation isn't that scary; while the crop this year is larger, with an estimated exportable surplus of 56M bushels, world import needs are 736M, and European stocks about 200M less than a year ago.
Market letters from leading brokers generally cautious, recommend waiting to see whether Wednesday support level above Aug. lows would hold. This would be significant technically, being “a triple bottom on a gradually ascending scale,” indicating a definite change of trend.
Many market observers discouraged by recent action, keeping customers on sidelines; a few predict a technical recovery but warn against trying to catch it.
“Those who advised the purchase of stocks because 'they are cheap' were right. Those who advised the sale of stocks because 'they were destined for lower levels' also were right. But the latter seem to have had a little the best of it so far.”
Continued stock weakness in the face of improvement in steel, merchandising, and other commercial activity has generated theory that the economy may change before the market does, as it did last fall.
Junior bond demand continues; US Steel 7% preferred hits record of 150, yielding 4.67%, with many other preferreds making new highs; avg. of 10 second-grade rail bonds hits new yearly high.
Editorial: Railroads should be allowed to compete with Panama Canal shipping by charging low rates for coast-to-coast freight, with higher rates to interior points, as long as the coast-to-coast rates are still profitable.
J. Stone reports results of Farm Board survey concluding that price trend for wheat over the next few years will be down.
Commodities mixed. Grains dropped sharply from early rally to close up slightly. Cotton down moderately to new lows. Copper holds at 10 1/4 - 10 1/2 cents.
First 21 rails report Aug. net operating income $23.533M, down 28.1% from 1929 and down 19.5% from 1928.
Rails making progress in cutting maintenance expenses to match lower revenue; percentage of revenue spent on maintenance has been declining each month since March, and in July fell below the 1929 level for the first time this year (32.17% vs. 32.76%).
J Price, Pres. Newsprint Institute of Canada, resigns; claims members unwilling to abide by the terms of membership agreement. Resignation, together with new alliance of Hearst and Canada Power & Paper seen presaging new price or on newsprint.
New York Stock Exchange seat sold for $275,000, down $25,000 from previous sale.
American visitors to Britain in first half were 58,683, up about 4% over 1929.
Company reports since July 1: 256 companies reported higher earnings vs. 1929 and 522 lower; 1221 dividends unchanged, 61 increased, 127 cut.
Two nervously awaited dividend meetings turned out better than expected; Anaconda Copper only cut from $3.50 annual rate to $2.50, US Indust. Alcohol maintained $6. Many other copper producers have cut or omitted dividends.
Autostrop patent suit against Gillette to be heard in US District Court in Dec.
McCalls (magazines, sewing patterns) stock about 39, yield 6.5%, 1929 earnings $3.76/share, first half net $2.26/share vs. $2.23 in 1929.
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