Editorial: Proposal for NY State sales tax is absurd for several reasons. Advocates want it in order to provide relief for real estate taxes of $250M/year, but since total retail sales are about $6B, this would require a 4% rate; “a 4% retail tax is unthinkable.” Even a tax of 1% would “inevitably drive trade to the nearest border” state, or to mail-order houses. Retailers' expenses in collecting the tax would have to be added to price of goods. Finally, “to make every purchase of the necessaries of life a constant reminder of taxes” would have a psychological effect that “would obviously result in a dimunition of spending.”
“Extremely high cost of illness, medical and hospital care throughout the US” has led to formation in many Western cities of associations to reduce these costs. A hospital and medical staff is hired by the association to serve members exclusively; members then pay fees less than 50% of those charged by doctors in private practice. Service is not for poor or wealthy but for “that large middle class which is able and willing to pay reasonable fees.”
Att'y General Mitchell reveals US govt. energetically fighting racketeers and gangsters in larger cities, especially Chicago. 40 New York leaders to meet with DA Crain on program to combat “public enemies.” Nat'l Crime Commission to send secret survey to big-city merchants asking details of experiences with racketeers.
Sen. Norris (R., Neb.) says extra session of Congress will be needed if progressive program not acted on by upcoming session.
C. Warburton, Nat'l. Drought Relief Committee chair., says most severe test for drought relief is to come in winter months.
Col. W. Starrett says skyscrapers twice as high as current record quite possible from engineering viewpoint, but maximum economic height likely already reached.
205-foot dirigible mooring mast completed at top of Empire State Building; can withstand dirigible pull of 100,000 pounds.
US govt. has successfully created large reindeer industry in Alaska, starting from a herd of 16 imported from Siberia in 1891, there are now about 1M.
Market wrap: Stocks continued technical correction early; yesterday's late reaction was extended, with bearish pressure renewed and good-sized sales of leaders including US Steel, Westinghouse, and GE at the opening. However, selling was absorbed easily and dried up within first hour; bear efforts were “hastily abandoned”; considerable buying came into standard stocks, with many hitting new rally highs; buying broadened with many daily highs hit in late afternoon. Particularly strong features included rails on talk of rate increase proposal, Montgomery Ward, Sears, and various specialties. Bond market mixed; US govts. strong, with many at new yearly highs; foreign govts. irregular, South American particularly weak; corp. mixed, convertibles rally after early losses.
I. Patterson, of Incorporated Investors: “Prices of sound stocks are at very real bargain levels.” Not calling bottom; “The intelligent investor has learned from past experience the impossibility of picking the low point ... But we do say that the sound policy of buying the best near the bottom will prove highly profitable.”
Security loans by banks to non-brokers continued their recent steady increase, believed to indicate better-quality buyers (good credit and ample resources).
One broker's opinion - “Don't become discouraged by the pessimistic talk you hear. It is no different from the talk I have heard in six depressions I have gone through. ... Go against your own feelings. I am blue myself, but have been buying stocks. And believe me, when you buy stocks feeling as blue as indigo, it hurts.”
“Some are beginning to think it will be a more cheerful Christmas than was thought possible” two weeks ago when stocks were hitting new lows; hopeful signs include more cheerful auto industry, commodity price stabilization, and that “public seems to be regaining its courage slowly but surely.”
R. Grant, GM VP, says statistics show automotive industry quickest to recover; looks to 1931 to level out sales curve and 1932 to be very good.
F. Hobbs of Central Trust of Ill. sees recent evidence of uptrend in commodity prices; “A rising trend is now as certain as was a declining trend sure 11 years ago ... I have real sympathy for the man who has been sitting back awaiting a lower bottom, and who has not yet protected his needs in cotton or copper or rubber.”
Under-Treasury Sec. Mills says Fed. tax reduction of $1.541B over past 7 years was offset by local rises; urges curb on “alarming rate” of local spending.
Economic news and individual company reports:
Total value of NYSE-listed stocks Nov. 1 was $55.0B vs. $89.7B Sept. 1, 1929; total value of listed bonds $48.4B vs. $46.7B.
BLS reports building permits in 286 cities in Oct. were $125.2M, down 14.6% from Sept. and down 39% from Oct. 1929.
US life insurance sales in Oct. were down 13% from 1929; first 10 months down 2%.
Western rails reportedly preparing application to the ICC for broad-based increase in rates.
Pres. Hoover says against reducing “sinking fund” for retirement of national debt; would be unsound financing. Fund has reduced debt about $400M annually.
“Withdrawals, caused in some instances by unfounded rumors,” forced closing of 16 more small banks in South and Midwest, bringing past 5 day total to 114.
Company reports since Oct. 1: 201 companies reported higher earnings vs. 1929 and 336 lower; 506 dividends unchanged, 50 increased, 72 cut.
“Stage Hand - You received a tremendous ovation; they're still clapping. What did you say? Actor - I told them I would not go on with my act until they quieted down.”
“Mistress (to new maid) - And when you leave, I want plenty of warning. Maid (haughtily) - It's me custom, ma'am, just to give three toots on me auto horn.”
+ The Boring Stuff: