Election editorial and endorsement:
Treasury Sec. Mellon in his radio address disputed those blaming the administration for the depression and said it was due mainly to worldwide conditions over which they had no control. This is valid, “but is there much ... sound thinking to be found in the heat of a political campaign?” The administration should fairly be judged on the measures taken since the economic storm broke. On this they have a strong record; Pres. Hoover, as Mellon points out, has great experience and expertise in reconstruction work, large public works are being undertaken to increase employment, and Treasury's house is in order. To quote Mellon, “It is not time for divided authority. It is rather a time for strong and united action ... in this way we shall attain most quickly that full measure of economic recovery which is inevitable in a nation so self-reliant.” As Coolidge said this week, “this is no time for rash experiments in men or measures.” Also, consider Lincoln's advice on changing horses in midstream. This administration knows “the needs of industry and trade,” and is headed by men of recognized business judgment and ability; they should be entrusted with the task of putting business on its feet again. To hamper them now wouldn't be good business, to say the least.
Assorted historical stuff:
Federal public works program estimated to total about $1B by high administration official. Total govt. employees about 1.033M on Oct. 1 vs. 990,000 Jan. 1.
Three men in what “used to be called the dry goods business” have amassed fortunes of tens of millions of dollars: Alexander T. Stewart, Marshall Field and John Wanamaker; curiously, all three made much of their fortunes as Wall Street operators, partnering with men including Gould, Vanderbilt, and Drew. Wanamaker: “one of the surest ways to ... success was by being something of a rolling-log ... by living up to the creed that no real man ... stays glued to one counter.”
Bank of Manhattan Trust Co. sponsors series of lecture on finance for women at the NY Junior League; several prominent financial figures to lecture.
One New York suburb contains a family that has lived on the same piece of land for almost 200 years, originally farm land purchased by the first settlers from the Indians. Europe has some examples of families that have lived in the same place over 1,000 years, but 200 years is a rarity in greater New York.
Treasury officials say over half of imported antique furniture is fake.
Market wrap: Further substantial selling in main body of stocks brought Dow to a new bear market low, though rails and utilities held slightly above previous lows. Bethlehem's poor earnings report had been expected, but Pres. Grace's statement that no improvement was in sight “attracted widespread attention.” With both traders and investment buyers increasingly reluctant, selling took place “on a descending price scale.” Slight improvement at mid-day, but selling resumed broadly in the afternoon; general list came under severe pressure; leaders including US Steel, Westinghouse, and AT&T hit new lows on the decline; sharp breaks in Auburn, Sears, and J.I. Case. Bond market active, mostly firm; notable strength in South American govts., rails; utilities firm; industrials weaker.
Bearish operations have recently converged on stocks believed selling too high compared to 1930 earnings, including Eastman Kodak, Coca Cola, and Otis Elev.
Broad Street Gossip: “In reference to your claim that 9 out of 10 people who buy for investment don't sell right away ... I wish to say that 9 out of 10 people I know do not sell them for 20 years ... They would rather leave them in their estates than accept a loss.”
“One banker says the cry of too much oil, too much copper, ... too much this and that is founded on facts, but temporary facts ... in later years, the cry may be not enough oil, copper, coal and so on if producers do not strive to conserve.”
C. Denney, Erie Rail. Pres., sees constructive elements now at work leading to gradual and well sustained recovery before many months; says the Erie is maintaining spending on improvements and maintenance to aid unemployment.
Total NYSE volume in Oct. was 64.497M vs. 141.667M in 1929; largest day was 6.297M vs. 16.410M; Dow range was 183.35 - 214.18 vs. 230.07 - 352.86.
Dow made new post-panic low. There were no new yearly highs and 94 new lows.
Economic news and individual company reports:
Rail equipment experts more optimistic. About a month ago, survey of leading executives indicated little buying likely for 6 - 8 months, which would have severely affected many industries. Now, following “many inducements” to railroads including 100% financing, and “pressure ... brought to bear on roads by banking and high government officials who are anxious to stimulate business,” the picture is said to be more hopeful.
Interesting items in recent reports by Fed. Reserve member banks in NY: brokers' loans down sharply while loans on securities to non-brokers are increasing; seen as stronger buyers (those borrowing from banks instead of brokers) absorbing selling from weaker ones. Banks have been left with such high surplus funds that “they were forced to invest heavily in securities and bankers' acceptances”; last week's increase in “all other” loans was due to heavy buying of acceptances.
Bradstreet's and Dun's weekly reviews continue to see uneven picture, with some encouraging spots but no sign of marked improvement in near term.
Bank of England reportedly considering cutting discount rate, possibly in preparation for 5% war loan conversion.
Index of farm prices Oct. 15 was 106% of prewar level, down 5% from Sept. 15 and down 34% from Sept. 15, 1929, and lowest Oct. level since 1915.
Rates on 150 and 180 day banker's acceptances down 1/8% to 2 1/8% - 2 1/4%, indicating “reign of extremely easy money in NY is by no means near an end.”
Gasoline in storage Sept. 30 was 38.254M barrels vs. 33.181M in 1929, but down 3.370M in month; consumption was up 6.9% over 1929.
Companies reporting decent earnings: Canada Dry Ginger Ale, United Gas Improvement, Lincoln Printing.
Assorted Q3 earnings: GM $0.53/share vs. $1.17 in Q2 and $1.58 in Q3 1929; Auburn Auto $0.97 vs. $4.25 and $6.72; Nat'l Tea $0.30 vs. $0.21 and $0.53.
Company reports since Oct. 1: 116 companies reported higher earnings vs. 1929 and 256 lower; 297 dividends unchanged, 32 increased, 44 cut.
“The witness was certainly no chicken, and the young barrister thought it would be to his advantage to get her rattled. ' And now, madam,' he said, 'I must ask a personal question. How old are you?' 'Young man,' she replied, 'it isn't more than an hour since the judge there objected to hearsay evidence. And I don't remember being born; all I know of it is hearsay.'”
“Teacher (to new scholar) - How does it happen that your name is Allen and your mother's name is Brown? Little Lad (after a moment's thought) - Well, you see, it's this way; she married again and I didn't.”
+ The Boring Stuff: