Republican control of Congress now expected to be “pared to a shadow if not obliterated” in today's election. Democrats claim majority in House but don't expect to win control of Senate; Republicans anticipate “victory” but expect to lose some strength and fear loss of effective control in House as has occurred in Senate; independent observers don't expect Democrats to gain control.
Main cause of Republican trouble seen as depression; absent this, even with issue of Prohibition and troublesome claims of ineptness, only normal off year election losses would be expected. Results of the election will probably be used to forecast Democratic presidential victory in 1932; if it really “ain't goin' rain no mo,” this may be the case, but things may change if economic conditions improve “as they almost surely will”; Democrats must also tend to “lack of any one outstanding candidate on whom various factions of the party can agree” and to lack of other issues or constructive program to campaign on. Republicans have been in power so long they have grown “careless and fat”; also, “without desiring to pun, it may be said that too many nuts are loose within it.” Results of election may in fact put “a good fright” into the Republican party and make it “train down and do a little fighting with its broad back to the well-known wall.”
Editorial: An increasing number of votes for third-party candidates seems driven by protest. Those who vote this way should consider if they're doing more harm than good; “the decline of parliamentarism which has driven more than one of the nations of Europe to dictatorship was caused in the main by too-fine division of the electorate into many warring factions ... ”
Business fears as to election results seem exaggerated; the new Congress won't meet until Dec. 31, 1931 and will probably be too closely divided to do anything controversial; In fact, since the new Congress will meet shortly before a presidential election, it's an almost unbroken rule that it won't do much of anything.
Anti-Prohibition forces expected to gain from election, but drys expected to retain control; repeal or modification not expected for at least two years.
Assorted historical stuff:
J. Raskob advocates construction of “coast-to-coast super highways” and reduction of 5 1/2 day workweek to 5 days at same wages to restore prosperity. Various US communities will aid unemployment situation by immediately starting public works that normally wouldn't be undertaken for 2 to 3 years; many related bond issues will be voted on today. E.I. du Pont de Nemours announces will advance work on plant repairs and replacements. Hudson Motor adopts 5-day week.
Glass Senate subcommittee won't begin meeting until Dec. 1; will inquire into activities of Federal Reserve system and banking and finance generally; believed changed economic conditions necessitate study of banking laws to determine what modifications necessary.
W.R. Hearst calls for substitution of Canadian or Swedish system for national Prohibition in US.
The position of railways on smoking in dining cars has become complicated due to the recent increase in smoking by women; “It is more difficult for the head steward to say 'No smoking, please,' to a charming lady ... If she declines to listen to his objurgations, the head steward's position is practically untenable.” The Boston & Maine Railroad has now resolved to settle the question by a customer ballot.
Notable new developments in business machines: IBM - automatic billing machine, new time clock equipment, “safe electric” food slicer; N.C.R. - check writing and signing machine; Burroughs - cash registers in colors, savings bank entry machines; Royal - pastel and duo-tone typewriters, 44 inch carriage for statistical work; Addressograph - bill printing and addressing machine. Earnings generally down moderately from 1929 except for IBM.
Market wrap: Trading extremely light due to tomorrow's election day holiday; many traders “seizing the opportunity for a three-day vacation,” and others were reluctant to commit before election results were known. Leading shares opened slightly lower and staged a moderate recovery about 11 o'clock, then traded in a narrow range the rest of the session. Amid general dullness, some individual weak spots stood out including Simmons, Coca Cola, International Nickel, Chrysler, and Westinghouse late; however, attempts to spread weakness to the general list made no headway. Bond market also dull, little changed; foreign and US govts. and high grade rails showed firm tone.
Editorial by T. Woodlock: Vast majority of investment trust funds (similar to mutual funds) were invested after start of 1928, at “final stage in the greatest speculative orgy that this country - or any country ever experienced.” Ironically, conditions today are now ideal for starting an investment trust; we're in a period of “maximum depression” with many bargains to be had, but past mistakes seem to prevent grasping the opportunity.
T. Girdler, Republic Steel Pres.: “Operations for the industry are around 50% of capacity and there are many signs that this will be maintained or improved upon during the last two months of the year. I expect a national and sound recovery in prices and operations to get under way in the steel industry early next year.”
Neisner Bros. Pres. A. Neisner sees noticeable improvement in fall buying, expects co. business for Q4 as good or better than 1929.
Movie companies adjusting to novelty of sound films wearing off; box office again dependent on film quality; some companies now offering widescreen as new novelty; stage shows at high-end theaters being restored; more children's films planned.
Dr. D. Friday, economist, predicts recovery this winter but warns that “fat days coming will be far leaner than those of preceding cycle.”
Economic news and individual company reports:
Longest US dividend records: Penn. Railroad 75 years; New York Central 61 yrs; Western Union 57 yrs; AT&T 48 yrs; United Gas Improvement 45 years.
NYSE reports brokers' loans at end of Oct. were $2.556B, down $925.3M in month and lowest total ever recorded (figures have been recorded since Jan. 1926; value of NYSE-listed shares has since increased from $34.5B to $60.1B as of Oct. 1).
Standard Oil of NJ cuts retail gasoline 1 cent/gallon throughout its territory. Std. Oil of Indiana lowers prices on midcontinent crude oil by 12 cents/barrel.
US gasoline consumption in first half was 6.810B gallons vs. 6.292B in 1929; taxes collected $230.6M vs. $175.1M; avg. tax per gallon 3.39 cents vs. 3.07 cents.
C. Hanch, Nat'l Assoc. of Finance Cos. GM, reports average car loan in 1929 was paid off in a little over 9 months (standard terms are 1/3 down, a year to pay the balance). Urges more installment buying as stimulus to business today.
Companies reporting decent earnings: Pullman (passenger rail cars), Canadian Wire & Cable (benefited from power development), Distillers Corp. - Seagrams (Canadian whiskey, able to increase sales in spite of Canadian govt. efforts to end exports to US).
“'So you took that pippin home from the movie last night.' 'Yeh.' 'How far does she live from the theatre?' 'Oh, three soda fountains and a candy store.'”
+ The Boring Stuff: