Assorted historical stuff:
Editorial: Wheat futures have plunged from 99 cents/bushel to below 73 cents in less than two months. This is sheer panic: “Wheat is selling below its worth and there is nothing behind this drive but unreasoning and unreasoned fear.” There has been one story after another advanced to justify the decline, from depression to German elections to Russian short-sales; none of these hold up to examination. World wheat supply is larger, but this should be countered by use of wheat as feed due to shortage of corn. “Sometimes an elephant will take fright at a mouse and create a stampede in the herd. Market psychology seems about on the same order.”
One man's opinion on why wheat prices are down: “some people consider it a disgrace to be fat. It is a hipless, thin limbed age, and that means a big falling off in the consumption of wheat.”
French Foreign Min. Briand advocates aid to Germany; predicts 4M German unemployed this winter; “It is an inevitable law that misery and suffering push people toward extremes. ... Germany crushed is a danger for peace.”
Breuning cabinet in Germany proposes drastic budget cuts along lines advised by S. Gilbert, former Amer. Agent-General for Reparations; calls on the people to subordinate party politics to good of the nation. Plan approved by Pres. Von Hindenburg; Fascist leader Hitler attacks Von Hindenburg, demands his indictment if he establishes a dictatorship to force the reform package through. German stocks up following plan.
Japanese income tax returns show 11 individuals earning income of $500,000 or more; top income is Baron Hachoroemon Mitui with $1.403M.
M. Blondeau, dir. French tobacco monopoly, authorizes production of cigar specialized for feminine demand.
Market wrap: In spite of good rally in grain markets, stocks continued to plunge for the fifth consecutive day, making the longest streak since the collapse last fall. Many margin accounts forced to sell. Monday's decline had taken leading industrials to new yearly lows, and rails below the panic lows of last fall. This encouraged bears to launch further aggressive drives across the list. Two attempted rallies in the morning gave way to renewed pressure. Volume increased to highest level since June. Bad breaks in trading favorites; whole market showed weak tone, was irregular at close. Bond market unsettled, moderately lower.
National City Bank monthly business review: Thus far business in Sept. has shown some improvement, but not strongly enough to convince that the uptrend is here to stay. However, without minimizing the depression, which is caused by serious and fundamental maladjustments, we also shouldn't “magnify the difficulties out of all due proportion.” While it's true no two depressions are identical, they have been studied for many years and general characteristics are fairly well understood; business activity indexes in July and Aug. touched lows of 1921, “warranting the assumption that the decline must have nearly, if not entirely, run its course.”
Broad Street Gossip: “It is a very wealthy country, and remarkable in the fact that the consuming power is still large notwithstanding a severe contraction in business. In time the country will emerge ... stronger and healthier than ever, and that means [good stocks] will soar to levels above the peak prices of last year.”
G.M.P Murphy & Co. point out year-over-year comparisons should start looking better in the fourth quarter since this is when the business slump intensified in 1929. Point to a series of unlucky events as delaying recovery, including drought, tariffs, political unsettlement, and unusually hot weather in September.
Oil industry seen facing test of continuing to balance production with consumption in seasonally period now starting.
Dow closed at a new yearly low, and within 6.21 points of the Nov. 13 panic low of 198.69. There were 5 stocks at new yearly highs and 312 new lows.
Economic news and individual company reports:
Aug. exports were $293.9M vs. $381.4M in 1929; imports $218.4M vs. $369.5M.
NYSE transactions in Sept. totaled 53.544M shares vs. 100.135M in 1929 and 90.232M in 1928.
J.A. Sisto suspended from NYSE due to insolvency; stocks they sponsored fluctuated wildly, for example Cuneo Press went from 31 1/2, to 16, back to 23 1/4.
Rail freight loadings for week ended Sept. 20 were 952,512 cars, down 13,201 from previous week, down 18.4% from 1929, and down 16.7% from 1928.
Wholesale gasoline in Chicago market down to 6 - 6 1/2 cents/gallon from 6 1/8 - 6 1/2 cents previously.
World crude oil production for 1930 estimated 1.444B barrels, down 44M from 1929; US about 937M, down 69M.
Companies reporting decent earnings: American Machine & Foundry (machinery for producing 5-cent cigars).
“'What time do you get up in summer?' 'As soon as the first ray of sun comes in my window.' 'Isn't that rather early?' 'No. My room faces west.'”
+ The Boring Stuff: