Glass Senate subcommittee to meet about Nov. 15 to investigate financial matters, particularly use of Federal Reserve funds to help finance speculative operations.
Marine Midland group of NY State banks will start “buy now” advertising campaign; G. Rand, Pres., says recovery being retarded by “false economy.”
London insurers raise rates to insure property in US against civil disturbances.
Brazilian rebels score unexpectedly quick victory with little bloodshed when federal troops in Rio de Janeiro join revolt; Pres. Luis resigns; provisional govt. expected until new elections; revolutionary leader A. Amaral says will honor foreign obligations; bonds strong, coffee down.
Chinese Pres. Chiang-Kai-Shek unexpectedly baptized as Methodist; seen as blow at Communists.
Standard Oil of NJ points out foreign oil areas are becoming more important; while US is still the premier oil producer, it is not completely dominant as before (foreign producers accounted for 36% of oil in 1910, 28% in 1923, 32.5% in 1929, and 35.5% in first half 1930). Calls for world cooperation in crude oil development, says “the country should draw judiciously upon its remaining reserves if the American oil man expects to stay in front of his fellows in the future.”
AT&T to begin phone service to Australia Oct. 27; calls from New York will be $45 for first 3 minutes and $15 each additional minute.
George Washington bicentennial commission plans for 1932 include having “every man, woman and child in this nation sing 'America' over a nationwide radio hookup,” with accompaniment by the combined US Army, Navy and Marine bands.
The Hellabrun Zoo in Munich now has two hybrids born of a lion and tiger; very few successful lion-tiger crosses are known to zoologists.
Market wrap: Bulls encouraged by further $139M decrease in brokers' loans, seen as evidence of stocks passing from weak to strong hands. Also encouraging was Thursday's session, when Van-Sweringen-connected rails plunged but industrials were up strongly; seen as indication “market as a whole was breaking away from the influence of specific weak spots” and had “largely corrected its position.” Market rallied across the list; rails staged a brisk rebound, while GM was up sharply on positive statements by J. Raskob; other major industrials also showed extensive gains; active short covering. Bond market active, rallies in many sections; Brazil and other South American issues higher; US govts. firm, close to yearly high; corp. generally higher; speculative and convertibles up moderately.
J. Raskob, GM finance committee dir. and Democratic Nat'l. Committee Chair., optimistic on auto industry: “There have been indications during the past six to eight weeks showing that the depressed conditions in the automobile industry have reached bottom and are slowly turning into more normal channels. ... Sharp revival in the motor industry may be expected to begin with the automobile shows in early January. It will stimulate all other lines of business activity. ... There can be no doubt that the motor industry will show substantial improvement in 1931. ... Optimism should now be the order of the day.”
B. Block of Benjamin Block & Co.: “On Thursday, for the first time in many months, I advised without reservation the purchase of sound stocks. ... A little over 14 months ago people looked at me in amazement when I advised the liquidation of all stocks. ... Since then the greatest deflation movement the stock market has ever witnessed has carried stocks to levels where unfavorable developments for many years to come have been more than discounted. It has been another case of sentiment running to extremes, with underlying fundamentals ignored.”
Amer. Iron and Steel Institute meets at the Commodore Hotel; prominent steel executives speak, including C. Schwab, E. Grace, etc. Price cutting seen as main problem facing the industry; over-expansion also cited. Industry praised for maintaining salaries and staff as far as possible. Long-term optimism expressed; C. Schwab calls for looking beyond “immediate but transient gloom,” says business in general has weathered the recession in a most assuring way. “Apply the heat treatment of an intelligent glowing optimism to the current warped point of view and most of the stresses and strains will disappear.”
One large broker says it's unusually difficult to make forecasts, with the market apparently ruled by technical factors and psychology.
Recent increase in bank loans on securities to non-brokers seen as indicating buying by stronger and more experienced investors.
Economic news and individual company reports:
Fed. Reserve Sept. report: factory output and employment increased, but by less than the usual seasonal amount; construction little changed; average wholesale prices little changed from Aug. but trending downward; commercial loans up; bank holdings of investments up but loans on securities declined rapidly in early Oct.
BLS reports new construction permits in Sept. in 291 cities were $147.7M, up 6.4% over August and reverse of usual seasonal decline.
Several companies report earnings down but sufficient to cover dividends, including Sears, Safeway, Youngstown Sheet & Tube, Kansas City Southern.
Federal investigation started into Charles V. Bob, promoter of a long string of mining stocks who recently went missing; two of his firms put into receivership.
Company reports since Oct. 1: 86 companies reported higher earnings vs. 1929 and 152 lower; 238 dividends unchanged, 26 increased, 35 cut.
Stock market joke:
“So far, shorts haven't had an opportunity to establish market losses against 1930 tax payments.”
“Artist - Do you think I have depicted the horrors of war strongly enough in my new picture? Critic - Yes, I have never seen such a horrible picture.”`
+ The Boring Stuff: