November 24, 2009

Monday, November 24, 1930: Dow 188.04 -2.26 (1.2%)

Assorted historical stuff:

US has about 6% of world population and 6% of total land area, but currently has 76% of world's cars and trucks (34.9M), 58.4% of telephone and telegraph wire in use (122.3M miles), 67.6% of petroleum output (1.489B barrels/year), 48.8% of copper production, 58% of corn, 56.6% of cotton, and 35.9% of coal.

Sen. Reed (R., Penn.) seeks to suspend new immigration to US for 2 years starting July 1, 1931, to prevent unemployment.

F. Goodenough, Barclay's Bank chair., urges industrialists campaign for war debt revision; if not cancelled, should at least be adjusted based on commodity prices.

Editorial: W. Johnson has pointed out the huge growth in govt. payrolls to where they now include one of every 10; “Reducing the thing to an absurdity one might visualize the day when each and every one of us would be a govt. employee.” While Mr. Johnson's suggestion of reducing govt. payrolls by 25% may seem badly timed, he's undoubtedly referring to “holders of the so-called 'gravy' jobs”; these wouldn't need to “take to apple-selling. They could exist on their surplus fat.”

One man's proposal: Selling apples on the street may be a good idea to relieve unemployment, but switching to bananas might be even better: “Just think what this would lead to. Everywhere banana skins would be strewn. The [city] would have to hire extra help to clean things up. People would slip on peels, bruising themselves, tearing their clothing .... Lawsuits would follow; lawyers would have more cases. Tailors would have more ... jobs, physicians would become busy, ... Prosperity would come slipping in on a banana skin. ... But, seriously, how about a change of diet? I, for one, can't look an apple straight in the face any longer.”

US Lines plans to build two new 50,000 ton liners - to be fastest afloat and equipped with catapult-launched planes, enabling 3-day transatlantic mail service.

3,563 “Gold Star” mothers [who lost a child in the war] visited France in the past summer; Congress appropriated $5.7M to pay for costs of the pilgrimage.

Market commentary:

Market wrap: Stocks presented a mixed picture. Sugar shares rallied on news of producers conference, as did mail order cos. on improved sales. This strong response to good news, as in yesterday's rally in rails, was taken as encouraging evidence of market technical strength. However, main body of stocks was highly irregular; US Steel weak, but generally majors traded in narrow range and volume declined on recessions. Bonds moderately active, irregular; US govts. strong; foreign mixed, South American and German weak; corp. quiet, rails steady, convertibles mixed.

Week in review: Stocks continued uptrend, interrupted only by brief technical reactions; buying reported by powerful banking interests and by those reversing previous tax sales. Bond market featured strength in US govts; foreign govts. were irregular, mostly reactionary; corp. bonds were mixed. Spanish situation unsettled. Rumor of large French loan to Britain dismissed. Money markets remained very easy; banks increased investments and loans on securities. More optimism on steel industry. Cotton down moderately. Sharp break in wheat prevented by aggressive Farm Board action.

Mark C. Steinberg & Co. believe “investors will resume the practice of several years ago of buying 'values' among common stocks instead of 'names.'”

Internat'l Harvester commended for statement that current dividend was safe; leading observers say similar announcements by other cos. would be beneficial.

F. Godber, Royal Dutch Shell dir.: oil industry at crossroads, further production cuts needed to avoid continuation of current unprofitably low prices, “ruination of thousands of producers, destruction, and waste.”

S. Strawn, Montgomery Ward chair., says current of M. Ward's business improving, “we are beginning to feel a change in the public apathy towards buying.”

Jack Warner, VP Warner Bros., says industry faces year of prosperity in 1931, W.B. will produce record high of 70 films together with First Nat'l. Pictures.

Atlanta Fed. Reserve Bank Gov. Black reassures on “fundamental situation” of Southern banks; they have $10B in reserves, tangible wealth of South over $80B.

W. Persons, formerly of Harvard and Amer. Statistical Assoc. pres., gives “convincing array of evidence” that “business recovery is in prospect and should be in progress by spring.” Argues that level of economic activity 20%-25% below normal, as observed in previous depressions, is “bed-rock below which depression did not go.” Careful survey of conditions shows “the stage is fully set for a business recovery.”

Economic news and individual company reports:

BLS reports index of 550 wholesale prices in Oct. was 82.6 vs. 84.2 in Sept.; farm prices declined 4%. Retail food prices declined 0.9% from Sept. 15 - Oct. 15, and 10% from Oct. 15, 1929 - Oct. 15, 1930.

Irving Fisher's index of 200 commodities for week ended Nov. 21 was 80.8 vs. 82.2 previous week and vs. 92.2 a year ago.

Arkansas state banking dept. took control of 30 suspended banks. Over $5.5M of Tenn. state funds tied up in closed banks; Gov. Horton denies malfeasance.

Youngstown District steel operations down 6% to 46% this week. Steel cos. in district still expect increased auto steel demand.

Commerce Dept. dispatches from agents abroad report improved business stability in almost all commercially important countries. Foreign credit and collections greatly improved in past few months due to seasonal business and trade revival; bankruptcies down.

Negotiations for unification of NY City transit lines resume after brief hiatus when transit cos. reject city's final offer.

Musical comedy:

Sweet and Low - revue presented by Billy Rose. Some good music and acting, though “most of the comedy is of the low order.” “Fannie Brice is best in a Spanish-Jewish song 'I Knew Him Before He Was Spanish,' accompanied by dancing with castanets.” George Jessel appears as a foreign professor showing a series of stereoopticon slides of American advertising slogans. Paula Trueman acts amusingly in “Ten Minutes in Bed,” referring of course to “those last few moments in the morning before a girl dashes off to work.” High point for many will be Borrah Minevitch's harmonica band.


“Blonde Waitress - I have stewed kidneys, boiled tongue, fried liver and pig's feet. Brakie - Don't tell me your troubles, sister, give me a chicken pie.”

+ The Boring Stuff:

Editorial by T. Woodlock: Current “emergency” in railways is also a great opportunity for lasting remedies. These should include centralized control of rates, cheaper and better coach service, and organization of the huge number of rail security holders to better inform themselves and speak up for their interests.

Rail industry more optimistic; have decided to take more aggressive action for higher rates, and regulation of bus and truck lines; believe Q4 earnings will compare more favorably with 1929 due to expense cuts. Texas & Pacific RR employees form organization to oppose discrimination in favor of motor transport. E. Lee, Penn. RR VP, calls on business to help rails by “concertedly refraining from efforts to pull down specific rates,” and agreeing to rate rises that have “a sound basis.”

Editorial: Some are now campaigning to abolish the Farm Board. While it has been a bitter disappointment to those who thought it would “relieve” agriculture, ending it now would probably lead to even worse ideas such as the export debenture plan. We should keep in mind the farm proverb that a calf given plenty of rope will strangle itself, and allow the Board ample rope to demonstrate its failure clearly.

American Assoc. of State Highway Officials urges emergency Federal appropriation of $250M to be used immediately for constructing highways.

Canada reportedly likely to form agency similar to US Farm Board following sharp break in Canadian wheat last week.

Russian wheat crop reportedly largest since the war, may about equal the largest pre-war crop; exports of 75M-100M bushels expected.

Spain reportedly begins steps to stabilize currency. However, political situation remains disturbed; Republicans on one hand and Communists on the other pursuing overthrow of monarchy; unions “jealously guarding” influence; business community lacking confidence.

US and British bankers rumored to have had talks in London regarding gold and debt situations.

Final corrected Census figures give continental US population of 122,775,046; US and possessions 124,926,070. Calif. had largest percentage gain in population, 65.7%; Florida was next with 51.6%; only state to lose population was Montana.

Round trip New York - Washington DC airfare reduced 33% to $20.

Broad Street Gossip: “More brokers are advising customers to buy stock on reactions than are those advising customers to sell on rallies.”

Broad Street Gossip: “At the height of the boom last year many did not hesitate to buy stocks on margin. Now, with the same stocks off 50% to 80% or more, the same traders are so timid about things that they pay outright for everything they buy.”

Some traders may have been absent Saturday due to “lure of football games.”

Recent rail strength encouraging to Dow Theory adherents, who believe the Dow rail average must confirm the trend mapped out by the industrial one. Theory has been dangerous to ignore this year, when rails failed to confirm rallies in May, July, and August.

Investors exercising “considerable discrimination” in stock selection; preferring issues with long dividend records and prospects for benefitting from general business improvement. Brokers report clients seeking advice “more eagerly than in several years.”

Reactions in past week have brought in better investment demand than in some time, possibly attracted by satisfactory yields.

Demand by short sellers for stocks in the loan market was light.

Farm Board considered on firmer ground in latest stabilization operation than in past buying of wheat at over a dollar a bushel.

Commodities firm. Grains up sharply after Farm Board didn't enter market to sell recently purchased wheat. Cotton little changed.

Natural gas sales by 80% of industry in Sept. were 31.8B cu ft, down 7.3% from 1929; manufactured gas sales by 90% of industry were 26.9B cu ft, down 3.5%.

Prices for exported gasoline are down following Export Petroleum Assoc.'s withdrawal of price schedule on Nov. 7; prices are now 5 3/4 - 6 3/4 cents/gallon depending on grade and location, vs. 6 3/4 - 8 cents previously.

859 lumber mills reported orders for the week ended Nov. 15 were 5% under production of 225.0M feet.

Mexico modifies tariffs to help domestic industry and agriculture; duties raised on products competing with Mexican manufactures, lowered on machinery, raw materials.

Texas proration advisory committee lowers statewide oil production target to 681,538 barrels/day from 750,000 previously.

Copper producers said informally advocating copper tariff to Pres. Hoover.

Iowa Gov. Hammil asks Pres. Hoover to use flexible tariff provision to protect corn market against Argentine imports.

US exports of wheat from Jul. 1 - Nov. 15 were 75.5M bushels vs. 71.2M in 1929. Exports of cotton Aug. 1 - Nov. 21 were 2.952M bales vs. 3.030M.

Alaskan mines produced $16.1M of minerals in 1929, up $2M from 1928; value of fishing products was $50.8M, down $3.8M.

Eureka Vacuum Cleaner Co. reports sharp increase in sales following advertising campaign begun two months ago.

Galeries Lafayette net for year ended July 31 was 40M francs, down 10M from prev. year.

No comments:

Post a Comment