Assorted historical stuff:
Editorial: Chancellor Breuning's plan for German economy calls for drastic cuts saving about 1B marks/year. If adopted, “one obstruction in the way of a geneal recovery of world business will be removed.” Adoption seems likely since Pres. Von Hindenburg backs it, and apparently has authority to declare a dictatorship to carry it out if parliament can't agree. While it would be preferable for moderate parties to put politics aside and agree on a govt., we can't find fault if a dictatorship is necessary - this would be similar to Lincoln's Civil War statement that he would save the country with the Constitution if possible, but without it if necessary.
Dr. Nicholas M. Butler: unemployment no passing ill but danger to social organization; desperation of millions of jobless may lead them to try “something new.”
Dr. K. Vaugoin forms Austrian minority cabinet to hold office until Nov. elections; first ministry in which Heimwehr (Fascists) are represented as separate party.
British bankers including Sir O. Niemeyer of Bank of England arrive in Australia to discuss solution to financial difficulties; Australia has about $180M of floating obligations coming due in London shortly with no clear way to settle them.
Amer. Beauty Congress told women spend almost $750M/year on cosmetics with no decline this year; 30% spend over $150/year.
Fabian Society celebrates 46 years of “street corner debating, soap box oratory, and parlor socialism.” Now 2,000 strong, members include George Bernard Shaw and 8 British cabinet ministers; Prime Minister is former member.
Market wrap: “Remorseless” drop in market that had run for six consecutive days was broken by strong rally, attributed to support finally coming in for main trading shares and to short covering. Market improved from the bell, opening at 206.16, up from 204.90 at Tuesday's close. Rally gained breadth as session wore on; US Steel and American Can led the rally; GE, Westinghouse, Allied Chemical, other majors also participated vigorously. Oils strong with Standard of NJ leading; trading favorites including Gillette, Worthington Pump, J. I. Case sharply higher. Volume moderately heavy but lower than Tuesday and fell off in afternoon; major stocks maintained gains and rose to day's highs in final hour. Bond market opened down but improved to close generally higher; foreign markedly stronger, convertibles up, corp. up narrowly; Dow 40 corp. bond avg. at new 1930 high of 97.70.
Rally considered influenced by technical factors; Dow had declined over 40 points since Sept. 10, and had declined 9 of the last 11 sessions. Increased volume of 4.497M shares also thought to indicate selling climax, since trading for two weeks ended September 23 averaged less than 2M shares.
On Tuesday, 54% of NYSE stocks traded below fall 1929 panic levels; taken as indicating liquidation has been more thorough than indicated by Dow averages (since leading stocks have held up better). Group that held up best was utilities, with 26 of 29 above 1929 low.
Some margin calls have gone out in the recent decline, but they've been relatively light compared to the fall panic when many traders were wiped out overnight.
Many bull pools reported to have accepted their losses and disbanded.
Call money is at 1 1/2% and going begging; stocks are at lows with no takers; commodities are at record lows with little demand.
Experts say some seasonal increase in business may have been delayed by unusually warm Sept. weather.
Many estimates for third quarter earnings lowered due to slower than expected Sept. business.
F. Lisman & Co. see bull market in “seasoned, dividend-paying” rail stocks due to low money rates: “The present generation in Wall Street has never seen the powerful lever which easy money exerts to raise the price of high grade stocks.” Sees prices discounting much adversity, says rails have adjusted to hard conditions.
Economic news and individual company reports:
Railcar loadings for week ended Sept. 20 were down 18.4% vs. 1929 and 16.7% vs. 1928; considered disappointing, largest percentage drop this year.
Fed. Reserve reports department store daily avg. sales in Aug. down 8% from 1929; first 7 months down 6%.
US Steel ingot production for week ended Sept 29 at about 65% vs. almost 66% prev. week; industry at 60%, down slightly from prev. week.
Federal circuit court in Oklahoma allows oil proration to continue until federal trial, expected soon. State Supreme Court decision on the issue expected Tuesday.
Companies reporting decent earnings: Fox Film, Amer. Water Works & Elec., Amer. Tank Car, Chicago Great Western Rwy., Jantzen Knitting Mills.
Western rails arrange conference with ICC requesting reconsideration of large cuts in grain freight rates; say cuts are unaffordable and deny them lawful return.
Estimates of grain crops as of Oct. 1 are somewhat improved over Sept. 1 due to rainfall relieving some drought areas; corn still about 20% below last year.
“The owner of a cheap watch brought it in to the jeweler's shop to see what could be done with it. 'The mistake I made, of course,' he admitted, 'was in dropping it.' 'Well, I don't suppose you could help that,' the jeweler remarked. 'The mistake you made was picking it up.'”
+ The Boring Stuff: