Assorted historical stuff:
A small group of industrial leaders met secretly with high US officials including Commerce Sec. Lamont; the meeting was probably initiated by Pres. Hoover. Agreement was reached on the wisdom of making long-term commitments to buy raw materials at current prices. Objective is to stabilize wholesale commodity prices and help revive business. Govt. sources say the industries concerned have already begun to act.
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.”
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.
New uses for agricultural waste under development, converting corn stalks into “maizewood” insulating board or textiles, and cotton bran into plastic resins.
A piece of a 12-million year old sequoia tree was found embedded in basalt 150 feet below the Yakima river in Washington.
In spite of favorable week-end trade reviews, bears renewed operations early Saturday. Past month's rally has had strong Friday action; bears may therefore have been encouraged by the late weakness on Friday. Leaders were down early in the short session, including US Steel, American Can, GE, Radio. Further disturbance caused by rumor of Baltimore & Ohio Railway suspending dividend. Market steadied in second hour with some recovery in individual stocks. American Cyanamid down to new lows on surprise dividend cut. Bond market quiet, irregular; govts. and investment grade firm, convertibles down.
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.
“While the recovery in business will undoubtedly be gradual, and characterized by confusing uncertainties, the fact remains that all indices that have pointed to revival in the past are now existent. As the stock market is usually some months ahead of trade, observers ... think there is a good chance that Wall Street will be the outstanding bright spot of the country during the winter months.”
T. Watson, Pres. IBM, returns from 3-month trip abroad, says IBM's European business doing well, sees European economy improving. Regarding tariffs, sees all countries considering protecting industries where necessary and on products that can be manufactured to “better advantage” than buying abroad.
Economic news and individual company reports:
Low money rates seen continuing for some time; call money seems headed back down, and govt. financing has been at lower rates. Expected seasonal rise in business demand for funds hasn't materialized, while supply of loanable funds remains high (total net deposits at member banks on Sept. 3 were $21.1B vs year's peak of $21.3B). Demand for currency is also moderate.
Employment Service of Labor Dept. reports employment situation throughout US little improved in August; textiles and automotive remained unsatisfactory; slight improvement in shipbuilding, shoes, and, towards end of Aug., in steel and iron.
Illinois Mfgr. Assoc. reports confident consensus on future industrial situation, distinct signs of improvement in many lines of business; sees gradual and steady improvement from now on. Several prominent Chicago executives issue optimistic statements, including M. Cresap (Hart, Schaffner & Marx Chair.), F. Sargent (Chicago & North Western Rwy. Pres.), W. Abbott (Illinois Bell Telephone Chair.).
Reports of 9 drug companies shows first half earnings 10.4% over 1929; this contrasts with 550 industrials showing earnings down 30.4%.
Companies reporting decent earnings: Middle West Utilities, Drug Inc.
“'Do you prefer beer or wine?' 'Well, that depends.' 'On what?' 'On who's paying.'”
+ The Boring Stuff: