Assorted historical stuff:
Editorial: Offer by 7 Democratic leaders of cooperation for the common good and positive response by the Administration are hopeful signs. While some partisanship could be detected even in this exchange, there are still real reasons for hope. Newly elected Dem. Sen. Bankhead has rejected idea of allying his party with insurgent Republicans to organize the Congress “on the basis of a division of the spoils.” Likewise, Sen. Walsh of Montana has called for end to partisan attacks. Public has right to insist both Republicans and Democrats stick to the agreement in good faith.
Pres. Hoover to ask Congress for special emergency appropriation to expedite public works for unemployment relief.
Chair. Woods of Emergency Committee on Employment says will attempt to get more accurate figures on number and distribution of unemployed in US; charts prepared by the Committee based on Labor Dept. statistics show uniform decrease in unemployment in recent months, with increasing part time work.
Movie industry execs move to throw power of “talkies” behind “buy now” campaign using nationwide showing of trailers, newsreels, and other advertising.
F Sargent, Chicago & North Western Rwy. pres., attacks Agricultural Marketing Act as unconstitutional; “I strongly criticize the establishment of government agencies to compete with private business as constituting unlawful confiscation of property.”
British Conservative leader S. Baldwin predicts even with tariffs, England will have “thundering hard job” over next decade to return prosperity.
A banker returning from New Mexico, Arizona, and Mexico reports that messengers there carry bags of gold and silver without gun or bodyguard, whereas here in New York, transfer of a bag of coins requires armed escort.
Anne Nichols, author of “Abie's Irish Rose,” loses appeal in lawsuit for plagiarism against producers of “The Cohens and the Kellys.”
C. Fritsche, Detroit Aircraft pres., asks Pres. Hoover for help in getting $4.5M authorization to construct all-metal airship 550 feet long, 120 feet in diameter, with 100 gross ton lift capacity and 100 mph speed. Ship would use oil-burning engines and helium for lift.
Market wrap: Stocks briefly rallied during first hour (attributed to pledges of Democratic-Republican cooperation on economy), but a flood of selling quickly reappeared, spreading throughout the list. Several stocks which had previously resisted the selloff dropped sharply, including Amer. Tobacco, Nat'l Biscuit, and United Drug. US Steel hit new low since 1928; new bear market lows in Amer. Can, GE, Westinghouse, GM. Utilities, oils, and investment trusts also weak. Commodities also broke sharply. Bond market continued active; corp. generally lower, especially convertibles and rails; US govts. firm, foreign down mildly.
Many stocks are depression-proof based on increasing earnings, but in the recent decline no stocks have been bear-proof.
Broad Street Gossip: Many traders believe the recent fast and severe decline in stocks will be balanced by a sharp rally when the bottom is hit. However, picking the bottom of this downtrend can be tricky - one trader reports he's picked 6 bottoms and counting.
Experienced observers believe recent increase in short-selling by small traders is hopeful: “Just as a rapid expansion in brokers' loans heralds the culmination of a bull swing, general switching from long to short positions by inexperienced speculators is a familiar feature of the final stages of a prolonged decline.
Dow made new post-panic low. There was one new yearly high and 376 new lows.
Economic news and individual company reports:
Total value of all NYSE listed stocks Nov. 1 was $55.026B vs. $60.143B on Oct. 1; borrowings by NYSE members were down $925.3M in the month to $2.556B, declining from 5.79% of total value to 4.65%, vs. 8.51% on Nov. 1, 1929.
Fed. Reserve member banks weekly report for Nov. 5: loans on securities up $24M to $8.081B, “all other” loans up $8M to $8.715B.
Some encouraging steel news seen in increase of 57,425 tons in US Steel unfilled orders during Oct. to 3.482M, and in announcement by Carnegie Steel (US Steel subsidiary) that they would maintain a $1.60/hundred pound minimum price on steel bars, shapes, and plates - seen as first step toward stabilizing steel prices.
Sentiment in France said better, but “still nervous despite reassuring statements by the Premier, the Finance Minister, and the Governor of the Bank of France to which wide publicity was given.” Rumors persist about some banks, may result in mergers.
NY State Industrial Commissioner F. Perkins reports NY index of factory employment down 2% in Oct. vs. 84.6 in Sept; first Oct. decline since 1920.
Companies reporting decent earnings: Amer. Gas & Elec., Charles E. Hires (drinks, syrup, extracts).
Stock market joke:
The Room Wit speculates that if this decline keeps up, we may start quoting earnings-price multiples instead of price-earnings.
“'There is nothing so satisfactory as a clear conscience.' 'No,' answered Senator Sorghum; 'and the next best thing is a good lawyer.'”
“'I went West in '89,' said the New Yorker. 'How fur did ye git?' queried the miner. 'Buffalo,' said the New Yorker. 'I went East the same year,' replied the miner. 'Went as fur's Butte, Montana. Nearly ran into each other, didn't we?'”
“'Now that I'm going to marry Mary, there's one thing I'd like to get off my chest.' 'What?' 'A tattooed heart with Jessie's name in it.'”
Modern banks date back to Italy in 808; word comes from “banco,” or bench, which was set up in a market for sale and exchange of money. British merchants originally deposited funds in Royal Mint, until Charles I seized it and gave them IOU's, after which they started depositing at goldsmiths in Lombard St. Oldest bank now in existence is Bank of Barcelona, founded 1401; one of earliest banks in London was founded by Francis Child, a goldsmith, in 1663.
Origin of the term bear dates back at least to Exchange Alley in London as early as 1719, when phrase “sell the bearskin” was used, from proverb “to sell the bear's skin before one has caught the bear.”
+ The Boring Stuff: