Assorted historical stuff:
Editorial: Proposal of the rail unions for a 6 hour workday is dubious. Unemployment is a grave concern; “its existence is a serious blot upon our record as business people.” But what is to be accomplished by this proposal? If it's to force hiring more workers, then “to put two men on a piece of work which can be done by one is not 'finding employment' for anyone; it is in effect a form of dole.” If it's to get a pay increase for those already working through overtime, how can this be justified at a time when a lower cost of living is raising real wages?
Railway execs not receptive to union movement for 6 hour day with no cut in pay; Illinois Central and Atchison presidents call it impractical and unaffordable.
B. Anderson, Jr., Chase Nat'l Bank economist, says Italy dealing with depression relatively well; production down less than US and rest of Europe, no apparent need for foreign credit, and stock market decline more moderate than US and Britain.
Berlin Mayor reports $20M city budget deficit due to unemployment payments and lower revenue; unable to pay salaries next month without short-term loan.
British House of Commons committee on ministerial pay recommends raising PM MacDonald's salary $10,000 to $35,000 due to high upkeep at 10 Downing St.
Residents of Quito, Ecuador petition govt. to lease Galapagos to France, Germany, or Japan as alternative to selling to US due to financial crisis.
Pres. Hoover to appoint timber conservation board with similar purpose to the existing oil conservation board.
M-K-T Railroad boasts sterling safety record: no passenger deaths in past 12 years during which it transported over 50M passengers a total of about 4B miles.
Henry Ford returns from 10-week European trip; refuses to comment on trip, saying his remarks abroad had been misrepresented by the press.
Market wrap: Leading stocks started to rally early, and continued with only minor interruptions for most of the session. Bulls found this particularly encouraging since the main body of stocks resisted a bad break in rail stocks connected with the Van Sweringen brothers, including the Alleghany, Pere Marquette, and Chesapeake & Ohio. Majors including US Steel, American Can, and GE staged strong recoveries from recent lows; the general list also acted well. Continued pressure on the Van Sweringen stocks held the general recovery in check, but some gains were sustained into the close. Bond market irregular but mostly higher; South American higher, other foreign and US govts. steady; convertibles higher, corp. mixed but generally higher; Van Sweringen-related bonds down sharply.
Ability of the general list to resist breaks in special stocks was seen as evidence “forced liquidation was largely burned out.”
Several brokers report clients buying stocks for cash are now paying careful attention to fundamentals such as position of the company in its industry, prospects of the industry, management, earnings, and dividends. This contrasts with “fancies which appeared to rule when stocks were being carried to abnormally high levels.”
Signs seen that “the current downward movement has reached its final stages.” Business is “admittedly unfavorable,” but past precedent strongly suggests this has been largely discounted in stock prices. Recent action in commodity prices indicates a bottom. Cooler weather is seen improving business activity in many branches. It's increasingly clear support in the form of investment buying is coming into the market; majors have found effective support above recent lows, and thousands of new investors have been buying stock outright, cleaning up the floating supply “to an extent that makes further progress on the downside increasingly difficult.”
Broad Street Gossip: “If history repeats itself, you can expect to see the following ... Oct. 24, 1930: 'If I had only sold out in Sept. 1930! Just see where they are now.' Oct. 22, 1931: ' If I had only bought some stocks in Oct. 1930! Look where they are now.'”
E. Shumaker, RCA-Victor Pres., says depression is being prolonged by doubt and fear on part of business men; “If every industry in the US that is now closed down or working part time would resume normal operations, we would almost immediately have prosperity, despite the fact that this depression is worldwide.”
Economic news and individual company reports:
Market value of NYSE-listed stocks and bonds represented 29% of estimated total US wealth [of about $400B]; there are about 10M security holders in the US. As a result, many think “a sustained improvement in security values would do more toward restoring confidence than anything else.”
Fed. Reserve reports money in circulation Oct. 22 down $50M to $4.450B, total Reserve Bank credit outstanding down $52M to $992M. Member banks in NY City report brokers' loans down $139M to $2.613B vs. $6.634B in 1929 and low since Nov. 1926, “all other” (commercial) loans down $39M to $2.496B.
Electric output by US light and power industry for week ended Oct. 11 was 1,710 GWHr vs. 1,704 in prev. week and 1,772 in 1929.
H. Firestone, VP of Firestone Tire, estimates 55M tires sold in 1930 vs. 70M in 1929; sees heavy replacement business in 1931.
Fla. Supreme Court rules for bondholders, orders West Palm Beach and Hastings to pay interest due this year.
Companies reporting decent earnings: national biscuit, General Foods, Hershey, almost all major meat packers (Armour, Swift, Wilson), Bon Ami, Apex Electrical Mfg., S.R. Dresser (pipe fittings and couplings), General Printing Ink.
“A party of tourists were enjoying the wonders of the Grand Canyon. A native passing by was asked by the driver of the car: 'I say, neighbor, can you tell us what caused this terrible gorge?' The rider gazed fondly at the wonderful site and replied 'Well, they say a Scotsman once owned a ranch near here, and one day he lost a golf ball down a gopher hole ... '”
+ The Boring Stuff: