Final outcome of Tuesday's Congressional elections won't be known for days or weeks, since a number of recounts will be demanded for close contests. It appears the two parties will differ by only 1-2 votes in the House, so vacancies, which average about 10 a year, may change the situation; decision which party organizes the House may be postponed until new Congress meets in Dec. 1931. Senate situation appears similar, with 48 Republicans, 47 Democrats, and 1 Farmer-Laborite. Regardless of exact outcome, Republican strength has been cut so neither party can have effective control in either chamber.
Only once in history has an “unfavorable verdict” for the President's party in an off-year election not been followed by a defeat in the next Presidential elections.
While Republicans shouldn't in fairness be held responsible for the depression, they may be suffering for campaigning as party of prosperity in 1928. Another cause of trouble is widespread feeling against “Washington optimism” expressed too often since last spring. The situation is still salvageable for the Republicans; the US is still “overwhelmingly Republican in a national sense,” and a more favorable business climate seems likely to develop. However, Republicans still have work to do - the party needs to select candidates and leadership of better character, and Hoover needs to recapture the confidence and imagination of the country.
Republican “insurgency” in Senate may be toned down as “some of the insurgents had unpleasantly close calls as results of the Democratic tide they helped to create.” Election results may “bring home the value of some semblance of party solidarity” and bring more cooperation between Senate Republicans and President.
Assorted historical stuff:
A survey of the 500 female students at Stanford got 225 responses. Summary: About 90% expect to marry, with 40% currently in love. College men and fraternity members preferred. 70% “do not enjoy kissing for its own sake”; 20% believe in “companionate marriage”; 80% believe in divorce; 30% “consider themselves experienced in love”; 20% “approve of the double standard of morals”; most important qualities in husband: personality, appearance, and wealth. Favorite cities: San Francisco, New York, Washington, Los Angeles; most admired women: Mrs. Hoover, Helen Wills, mother, Amelia Earhart; most admired men: Lindbergh, Hoover, Edison, David Starr Jordan, Admiral Byrd. Religion: almost half Christian, 15% no religious faith, 7% “exotic Oriental creeds”, 1% spiritualism.
British Labor govt. plan to revive farming and decrease unemployment calls for initial spending of $125M, large-scale establishment of experimental farming “along Socialist lines”; to be conducted through Agricultural Land Corp. “empowered to acquire land by agreement or by compulsory methods” or by reclamation; would grant jobless men and women small farms and cottages at nominal rent and provide loans as working capital.
Prominent German business leaders recommend wage cuts of 20%, reparations relief, and strict control of public spending to meet present crisis.
Number of movie theaters in China has more than doubled in the past few years; there are now 233 theaters with a total capacity of 137,000.
Dr. Dervieux of the Medico-Legal Institute of Paris asserts that in most advanced countries in Europe, 2 per 1,000 are buried alive, with percentage probably much higher in certain other countries. Group of 35 deputies, mostly physicians, proposes law requiring verification of death by physician before burial.
New York Railways plans to ask Board of Estimate to substitute buses for trolleys on all its Manhattan lines.
Market wrap: General market remained unsettled; majors including US Steel and American Can showed gains over Wednesday but broader recovery “held in check by sporadic outbursts of selling in various departments”; utilities particularly weak on election results, with new yearly lows for AT&T and Consolidated Gas. Bears continued attacking weak spots, particularly stocks selling at high earnings multiples; targets included Eastman, Nat'l. Cash Register, GM, du Pont. However, leading issues showed increasing resistance as the session wore on, and pressure lifted from the general list; US Steel and Loews showed particular strength; some short covering and moderate rallying in last hour. Bond market more active; corp. generally lower; US govts. firm; foreign govts. irregular.
A number of market observers who have advised waiting to buy stocks until a definite turn for the better, are now saying current opportunities are too attractive to be overlooked; It's argued that with patience and good judgment there is little chance of suffering losses on standard stocks. “It is evident that liquidation has been extensive enough to suggest that it is fairly well completed”; the Dow has declined over 200 points from its peak, while brokers' loans are at a record low.
H. Firestone predicts largest tire business in history in 1931 due to sharp decline in 1930 tire sales even as total car mileage increased.
Broad Street Gossip: A Chicago banker reports “talking with some of my friends, I have reached the conclusion that while stocks may be off 50% to 75% from peak prices, sentiment is off 99% from its 1929 peak.”
B. Anderson, Chase Nat'l. Bank economist, sees fundamentals much better than in 1921, including both “general world picture” and domestic commercial credit situation (particularly corporate inventory and debt levels). Points out that in 1921, unlike today, “many businesses could not do even the business that was in sight” because of urgent demands from creditors. Estimates consumption and retail buying has for about 4 months outrun wholesale buying and factory production. Sees “makings of an upturn in business” that can become “long period of prosperity” if fundamentals are right, but should in any case be “good while it lasts.”
Economic news and individual company reports:
Revised Sept. exports $307.6M vs. $437.7M in 1929, imports $226.3M vs. $351.4M; 9 months exports $2.903B vs. $3.844B, imports $2.401B vs. $3.360B.
US and Canada auto production in Oct. was 156,743 vs. 230,888 in Sept. and 394,510 in Oct. 1929. first 10 months 3.223M vs. 5.269M.
Electric output by US light and power industry for week ended Nov. 1 was 1,748 GWHr vs. 1,725 in prev. week and 1,830 in 1929.
Total class 1 rail operating income in Sept. was $104.078M, down 22.5% from 1929; revenues were $467.469M, down 17.6%; 9 months operating income was $659.4M, down 31.5% from 1929, while 9 months gross was $4.083B, down 14.6%.
French market continues nervous on Oustric bank failure; several small brokers and banks fail. French banks said withdrawing gold from foreign accounts.
Companies reporting decent earnings: So. Calif. Edison, International Cement, Bulova Watch, George W. Helme (snuff and ground tobacco).
East is West - Melodramatic Chinese-American love story starring Lewis Ayres as Billy Benson, Lupe Velez as Ming Toy, and Edward G. Robinson as Charlie Yong. Cast is generally mediocre with outstanding exception of Mr. Robinson. Following much discussion “to the effect that the souls of all people are the same no matter what color their skin,” story ends with discovery that girl was the daughter of white missionaries who died in China when she was a child.
“'How did you head off your son's marriage? Did you tell them you'd disinherit him?' 'No; I told the girl.'”
“'Do you mean to say,' asked the magistrate, 'that such a physical wreck as your husband gave you that black eye?' The woman smiled proudly. 'He wasn't a physical wreck your worship,' she said, 'till 'e gave me that black eye.'”
+ The Boring Stuff: