Assorted historical stuff:
Canadian railway board reports on 1,791 rail crossing accidents caused by “inexplicable negligence.” Of these, 77 drivers drove under crossing gates while they were being lowered; one left his car and raised the gates after they had been lowered; 69 drove into the side of moving trains; 43 drove into trains that were standing still; 8 used the railway tracks as a highway; one stopped on the tracks and fell asleep; one stopped his wagon in path of approaching train to adjust load.
Argentina under military junta; Gen. Iriburu announces order reestablished, legal govt. to be set up as soon as possible, international obligations to be honored.
South American bond experts approve of new group in power in Argentina; believe “corruption, waste, and incompetence in government affairs should vanish promptly if,” as result of upcoming election, a member of the Uriburu group is placed in power.
AFL Pres. W. Green decries conditions in beet fields of Colorado, Nebraska; children 6 to 15 years old work 9-16 hours/day for yearly wage of $98.90-$197.80. Also criticizes plans for compulsory unemployment insurance as “dole” system, favors voluntary industry funds, shorter work day instead of layoffs.
Pres. Hoover urged to simplify procedure for farmers in drought areas to get 50% discount on shipping feed; getting permits required takes too much time.
Police in Peking form “elopement squad” to watch rail stations for young couples running away to be married, following series of elopments involving prominent families. Chinese young couples reported increasingly rebellious against practice of marriages arranged by parents.
M. McCavran, Pres. American Assoc. of Cosmeticians and Hair Artists, estimates there are about 40M women in US; total annual usage of make-ups and creams is 316M pounds, or about 7.9 pounds/woman annually, or about 348 pounds/woman between ages of 16 and 60.
Market commentary:
Many buy orders accumulated over weekend; rally went ahead vigorously Monday morning, with some of the largest blocks in weeks appearing on the tape. Major industrials including GM, GE, US Steel, American Can, Allied Chemical, Westinghouse, hit new rally highs; rails and utilities also strong. Profit taking became active about noon, halting the rally; however, volume again dried up on the afternoon setback. This increased expectation of continued strength, and good buying returned in final hour. Bond market quieter; rail and utility bonds strong, Dow bond avg. unchanged; Argentina bonds weak; US govts. inactive.
Dow considered to have given “highly bullish signal” by closing Saturday above the 241 resistance level where selling was repeatedly encountered in summer. This “reflected powerful buying based on growing optimism regarding autumn trade prospects.” Major investors reported to have participated in buying after being “persistently bearish since the early part of the year” and making “huge profits on the short side.”
Some of “the shrewdest market traders” now see “definite turning point” in stocks. Conclusion isn't based on “chart theories such as double or triple tops” but on fundamentals. Believe long side will be the safe one from now on, and “standard stocks can be bought with assurance of profit. The corporations, the country, and the people are very rich, richer than after any previous panic, ... industry and the market are in a strong position to stage a comeback.”
Recent reports in trade reviews of slightly improved retail demand considered encouraging; thought to be leading indicator of business improvement.
Many unfavorable third-quarter earnings reports expected in Oct., but market reaction will depend more on the trend of business that month and looking ahead.
Economic news and individual company reports:
Fed. Reserve member banks on Sept. 3 report “all other” (commercial) loans up $30M over previous week.
American Iron & Steel Institute reports Aug. steel ingot production moderately up over July; total production 3.095M tons vs. 2.933M tons in July and 4.939M tons in Aug. 1929; operations at 59.46% of capacity vs. 56.35% and 93.28%.
US Steel unfilled orders expected to show large decline in Aug. from July 31 figure of 4.022M tons; figures to be released noon tomorrow.
Company reports since July 1: 191 companies reported higher earnings vs. 1929 and 455 lower; 933 dividends unchanged, 43 increased, 73 cut.
Starrett Corp. (construction) says earnings expected to improve in rest of year; Empire State Building now up to 60'th floor; also working on several other large projects; lower building costs are leading to more inquiry and expected to create more construction activity.
Curtis Publishing announces will accept cigarette ads for Saturday Evening Post starting Oct.
Joke:
“Minister ... - Remember that stone walls do not a prison make, nor iron bars a cage.
Prisoner - Well, they've got me hypnotized, then, that's all.”
+ The Boring Stuff:
Senator A. Barkley reports a high British official predicts US trade with Europe will be reduced $1B annually when Europeans adjust tariffs, says will lead to higher unemployment, agitation for cancellation of European war debts, doubts Britain will be able to continue war debt payments.
Mexican Chamber of Deputies considering debt settlement reached by Montes de Oca; approval expected.
S.W. Straus dies; originated modern first mortgage real estate bond, pioneer in development of US skyscrapers; founder of Am. Society for Thrift, active in charity.
Planning completed for railway across Sahara desert at cost of $120M; only approval of French Parliament now needed.
Agriculture Sec. Hyde calls for worldwide cooperation in controlling surpluses of agricultural commodities.
Special session of Canadian Parliament to consider means of relieving unemployment, tariff measures, public works.
Canadian Pacific Rwy. Pres. E. Beatty says will begin immediately any building program planned for next year or two to relieve unemployment, sees signs country is “turning the corner of depression.”
Sentiment not discouraged by afternoon setback; considered natural after recent advance. Most observers advise buying standard stocks on any reactions.
Short position is still believed large; trading still controlled by professionals, only small increase in public participation so far.
Eugene Meyer's appointment as Fed. Reserve Bd. Gov. has “hearty approval of Wall Street. Few individuals know Wall Street and what business needs better.” Some opposition from agricultural states. Appointment seen continuing or increasing Washington influence on Fed.
Lawrence Sterne & Co. monthly investment review says strong fall bond market “appears to be inevitable from numerous indications” including low number of new offerings, low trading volume, recent bond market strength, and increasing savings and commercial deposits.
Chicago & North Western Rwy. Pres. F. Sargent says expects “gradual pick up in general business from now on,” now experiencing seasonal gain in traffic.
Commodities weak. Cotton down sharply on larger than expected govt. crop estimate. Wheat rallied early but closed down in spite of bullish news; other grains also down. Copper remained at 10 3/4 - 11 cents, but with “somewhat better” demand.
Agriculture Dept. Sept. 1 estimate of cotton crop is 14.340M bales vs. 14.362M estimate Aug. 1.
Volume of bond trading on NYSE in Aug. was $172.5M vs. $193.8M in July and $259.8M in Aug. 1929; lowest level since Aug. 1923.
Total production of soft coal in week ended Aug. 30 was 9.056M tons vs. 10.832M tons in 1929; first 8 months was 301.0M vs. 340.3M.
Earnings of rails in Southwest have held up best so far in depression; first 7 months net declined 17.1% from 1929 vs. 33% for all rails.
Ford production of cars and trucks in Aug. was 99,142 vs. 133,035 in July and 205,634 in Aug. 1929.
Union Carbide and R.H. Macy have rallied on news of improving business and optimism on earnings for rest of year.
Armstrong Cork develops new cork turf for surfacing miniature golf courses; ingredients are “ground linoleum scrap, green mineral pigment, and a filler substance.”
PG & E selling about 57, annual div. $2, 1929 earnings $3.52/share.
NY Stock Exchange seat sells for $350,000, down $50,000 from last sale.
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