No Journal was published Sunday, Oct. 19, 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.
Shameless plug of the week: Those of you in the New York area, check out this amazing film on Kandinsky by Grahame Weinbren that I did some work on. It's playing at the Guggenheim until January as part of their mega-Kandinsky exhibition.
Special 1930 film treat this week: A jaw-dropping dance by “Rubber Legs” Al Norman from King of Jazz, an all-Technicolor film released April 1930. Warning - if squeamish, do not watch after eating - this guy does things with his legs that should not be possible. Also, after watching closely I'm pretty sure he invented the duck walk, the moonwalk, and several other as yet unnamed walks.
[Note: Strangely familiar dept.] White House sees indications of a business revival; Pres. Hoover met Thursday night with Bernard Baruch to discuss the general business situation; this is one of a series of meetings with others including A. Sloan, GM Pres., and R. Whitney, NYSE Pres.
[Note: Ay Chihuahua! dept.] H. Dougan, Great Northern Rwy. Pres., says Russian rails in need of modernization; doesn't see Russia becoming huge wheat exporter; believes current exporting is to pay for 5 year plan, and within a few years Russia will permit its people to eat more and more wheat until domestic consumption nears production.
[Note: Makes me want to travel back in time dept.] NY movie houses doing their best to keep patrons happy. Aside from movies, additional entertainment provided includes “artistically costumed” musicians, handwriting analysts, telegram service, voice recording, dances after the last performance, and “freak show complete with giant, ... sword swallower, and barker.”
[Note: Reality is never welcome dept. ] Editorial: Gov. Black of the Atlanta Fed. takes a defeatist attitude in saying that the US must accept a lower standard of living and that the “load of debt around our necks” is the root of the problem. Contrast this with President Hoover's optimism: “Any retreat from our American philosophy of constantly increasing standards of living becomes a retreat into perpetual unemployment and the acceptance of a cesspool of poverty for some large part of our people.” Can Gov. Black really say going into debt has been a net negative for the American people? “Has there been any greater blessing than the building and loan associations which have lent billions of dollars to millions who would never otherwise have had the means to build.” Homeownership has stimulated people's desire for the other comforts of life, resulting in activity and progress; the fact that some excesses have taken place doesn't negate our whole course. “Governor Black says that what is needed in American business today is not confidence but courage. But surely courage lies in going forward, not backward. The American emblem is an eagle not a crab.”
[Note: Strangely familiar dept.] Agriculture Dept. sees downward trend in business nearing end; positive indications noted in machine tool orders, in textile and shoe trades, and in residential construction; usual length of business recessions is 12 to 18 months, and current one has been in progress for about 15.
[Note: Crude oil. Is there anything it can't do? Dept.] Newest use for crude oil: “the most modern sky-writing apparatus uses crude oil which is ejected onto a heated steel plate ... it is simpler to use and makes a heavier cloud that is less likely be destroyed by wind.”
[Note: Interesting stat.] Population of County of London in 1929 census was 4.430M, down 54,000 in last 8 years; birthrate in 1929 was lowest ever recorded, totaling 70,089.
[Note: Very true, especially in the financial field. Wasn't it about six months ago that nobody was ever going to buy a risky asset again?] Broad Street Gossip: “A real bullish development is the ability of people to forget. The hardest thing to forget was the 1929 smash. More talk about the recent drop is now heard than about the November, 1929 decline.”
[Note: Strangely familiar dept.] Commerce Dept. foreign news report assembled from its foreign representatives: trend to economic improvement in many European and Far East countries.
[Note: Strangely better than familiar dept.] BLS reports Sept. employment in 13 industrial groups was up 1% over Aug., with payrolls up 1.4%; first increase this year.
[Note: Strangely familiar dept.] Commerce Dept. reports Sept. merchandise exports were $318M vs. $300M in Aug. and $437.7M in 1929; imports were $227M vs. $217M and $351.4M; second consecutive monthly gain for exports, and first increase in imports from Aug. to Sept. since 1926.
[Note: Strangely familiar dept.] F. Purnell, Youngstown Sheet & Tube Pres.: “There are plenty of evidences that the steel industry is looking up. We have passed through many months of depression but that is all behind us. ... Industries consuming steel are increasing activities.”
[Note: For you non-Depression buffs, the first big bank collapse is in about 8 weeks.] Concerns that recent stock declines have weakened banks with high levels of loans on securities called absurd by “responsible New York banking circles”; most country banks reportedly more concerned with employing surplus funds than with their liquidity. While it's true security loans are close to record level, liquid assets are so enormous that freezing even a large number of security loans wouldn't imperil banks positions; banks also have large capacity to borrow from Fed.
[Note: Sometimes the best historical info comes from the jokes.] “' I want to get my advertisement into the hands of every farmer in the county,' a patent medicine spieler in a small town told the crowd around his stand preparatory to selling them his medicine at 'a special advertising price.' 'I'll tell ye a good way to do that,' announced a farmer in the crowd. 'Jest have it printed on the backs of mortgage blanks.'”
[Note: Sheer Genius dept.] Dr. Y. Henderson, Prof. of Applied Physiology at Yale, says beer and ale with 4% alcohol content not intoxicating from scientific standpoint.
[Note: Makes me want to travel back in time dept.] Appearing at the Palace (vaudeville):
The Marx Brothers present “bits of nonsense” from their recent picture Animal Crackers; also featured are Cab Calloway's orchestra and magic by Cardini.
[Note: Strangely familiar dept.] Some major Q3 earnings somewhat down but still decent: AT&T $2.55/share vs. $2.77 in 1929; GE $.46 vs. $.59; Western Union $2.22 vs. $3.89.
[Note: Intrinsic value and earnings - that's crazy talk!] Outsiders recently looking to enter the market have been advised by brokers “to give more than the usual amount of study to intrinsic values and earning power.”
[Note: Hard work and thrift - that's crazy talk!] M. Traylor, First Nat'l. Bank of Chicago Pres., says prosperity won't return because of “a great increase in spending,” but because of “hard work, thrift, and wise investment”; says spending without saving was one of main causes of current depression.
[Note: Ay Chihuahua! dept.] Broad Street Gossip: Although most market letters now are cautious (as usual during declines), many stocks are clearly very cheap if bought for “a long pull.” For example, many companies are selling at market caps below the cash they've put into property and plant over the past 5-10 years. While a long-pull view may be needed since these companies' earnings are currently below normal, “the big fortunes of Rockefeller, Mellon, ... and others were made buying and holding stocks.”
[Note: Crude oil. Is there anything it can't do? Dept.] N. Smith of Bureau of Mines believes some of the fractions refined from crude oil may eventually be used as shortening and cooking oils.
No Journal Oct. 14 following Columbus Day.
[Note: Strangely familiar dept.] US Chamber of Commerce says expects more government regulation and participation in business to be proposed in upcoming session of Congress; “measures seen as forerunner of more sweeping political control of economic activities.”
[Note: Profound observations dept.] Editorial: Alice Meynell said: “Rhythm is the law of human hopes, fears, and loves; perpetual oscillation ... reflects itself in all things human.” Poets over the ages have agreed; while they generally haven't written about the stock market, nothing exemplifies this principle better or reflects hope and fear more directly. It's the essence of the market that when hopes are highest their frustration is at hand, while “when fears crowd in like the Mongol horde” and shake the stoutest hearts, the danger has already passed. For successful investing it would suffice to have an instrument measuring current intensity of emotions and, “the stronger they are, the more resolutely act against them.” Simple, but no easier than Ovid found it 1,900 years ago; perhaps we can start by recognizing “fears are now running riot.”
[Note: For you non-Depression buffs, this guy's highly leveraged utility holding company later collapsed, wiping out about 600,000 investors.] Samuel Insull, head of Insull utility group: Continuing large capital investments; taking long-term view; consider depression temporary; electricity still growing, gas sales flat, and transportation declining; “I have the greatest confidence that the conservatively financed utilities ... will weather the present business depression.”
[Note: Cause and effect? dept.] Leading toiletry co. has created new advertising novelty - books of matches cleverly made into miniature replicas of tubes of shaving or dental cream.
German fire insurance cos. report largest cause of fires is children playing with matches or imitating elders.