Assorted historical stuff:
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.
Russia announces 8 executed and 438 exiled to concentration camps for gold hoarding and counter-revolutionary activity.
International Paper says have received official assurance that convict or forced labor not used to produce imported Soviet lumber or pulp wood.
Editorial supporting yesterday's speech by K. Hogate, VP Dow, Jones, that recommended distribution of corporate surpluses to shareholders. If the surplus was paid out to its rightful owners (the shareholders), almost $4B would flow into the economy, relieving unemployment and stimulating business. Money can be piled “mountain high and yet, if ... not moved into consumption, nothing but stagnation will ensue. Goods and services ... cannot be moved into consumption unless there is individual purchasing power. ... A dollar in an individual income travels much faster and works harder than one held in a surplus account.”
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.
Commerce Dept. optimistic on soundness of German economy; notes resistance to severe depression, well-maintained export trade.
While Friday's rumors of German revolution turned out to be baseless, there are now increasing reports that results of the German election might cause reopening of the reparations issue and possibly of Allied war debts to the US.
Former French Premier A. Briand summons 27 European nations to confer on his project for European union; 8 nations propose reciprocal trade program.
Experimental secure wireless telephone tested; device transforms spoken words into unintelligible state and retransforms them on receipt.
Market wrap: Some early selling attributed to professionals and margin calls sent out after Friday's close. Selling was easily absorbed and good support came in to US Steel, spreading to other leading issues and moderately to the rest of the list. Volume slackened on the recovery and stocks backed and filled for some time; near the close, market tone improved again. Rubber stocks up on reported industry understanding. Bond market active and strong; US govt. firm; foreign govts. steady, including German; rails strong; convertibles firm.
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.
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.
Conservative observers see continued bear pressure this week until resistance is hit. Advise using rallies to sell long positions and strengthen margined accounts.
Henry Ford says economic crisis is worldwide, but still has great hopes for the future; particularly optimistic about market possibilities of Africa, China, and Japan.
E. Kulas, Pres. Otis Steel: “Underlying conditions affecting prices and demand in the steel trade have changed for the better and the outlook is steadily improving.”
E. Loomis, Pres. Lehigh Valley Rail., notes improvement in business conditions and general outlook, although sentiment is a little ahead of actual improvement.
Economic news and individual company reports:
Trade reviews showed moderate expansion in fall buying, though early September spurt in trade lost some momentum.
Irving Fisher's index of 200 wholesale commodities for weekend ended Sept. 19 was 83.6 vs. 83.4 previous week and 96.0 average for Sept. 1929.
GM reports retail sales by dealers in the past three months were 263,891 units, or 29,440 more units than GM shipped to dealers. This contrasts with 1929, where GM shipped 14,928 more cars to dealers than they sold; encouraging indication that stocks of unsold cars are being depleted rapidly.
August new car registrations in 21 states and were 55,968 vs. 74,290 in July and 106,081 in Aug. 1929.
Company reports since July 1: 242 companies reported higher earnings vs. 1929 and 494 lower; 1165 dividends unchanged, 55 increased, 112 cut.
“Impatient Man (outside telephone booth) - Can I help you to find the number you want?
Young Woman (sweetly) - Oh, I don't want a number. I'm looking for a pretty name for my baby.”
+ The Boring Stuff: