Assorted historical stuff:
[Starring Jimmy Stewart as J. Wayne.] Philadelphia bank depositors assured by leading bankers and Clearing House assoc. that all funds needed by any bank would be made available immediately. This followed a run at Franklin Trust Monday night, during which J. Wayne, Clearing House pres., mounted a table and told the crowd of depositors the bank was as safe as any in Philadelphia. Most of the crowd then left; Mayor Mackey also reassured depositors in the morning. Chelsea Bank, a NY institution with $18.9M in deposits, closed (not member of Fed or NY Clearing House). T.E. Hambleton, pres. of Hambleton & Co. private bank of Baltimore, commits suicide at 44. H Baetjer, friend and counsel, says affairs of the bank in good condition; friends attributed suicide to domestic troubles and death of brother in plane crash a year ago. Private bank Pallotti, Andretta & Co. in Hartford, Conn. closed. City Bank of Miami Beach closed; affiliate of the National Bank that closed yesterday.
French Oustric affair, initially represented as affecting only a narrow circle of speculators with a relatively small monetary loss, has turned into a big political and financial event. Together with the failure of Banque Adam, with thousands of depositors, it seems to have caused a shock to the nerves of many in France. There has been a large scale withdrawal of money from big banks, and the big banks have in turn called balances from abroad; as a result, between mid-Sept and end of year about 6B francs in gold will have been imported. This is likely to cause domestic currency inflation and penalize French exports.
[Somehow I doubt the Madoff investors get 37% ... ] Final chapter in the Ponzi saga, at least as far as “investors” are concerned; they get a final dividend of 1/2%, bringing total recovery to 37 1/2% of claims, paid out in a series of dividends since Dec. 1921. Mr. Ponzi remains in jail.
Editorial: Congress continues to misbehave; most recent antics include Senate's washing of Republican dirty linen concerning the party's efforts to defeat Sen. Norris (R., Neb.), and Rep. McFadden's ridiculous accusations against Eugene Meyer in advising the Senate to reject him as Fed. Reserve Gov.
President's Emergency Committee for Employment asks farmers to help by undertaking all construction work practical at this time.
London printing firm of Waterlow & Sons tricked into printing unauthorized Portuguese bank notes by “a Dutchman named Marang.”
Former Rumanian premier Vintila Bratianu dead of apoplexy.
Denmark establishes modern fish canning factory manned by Eskimos, North of the Arctic Circle in Holstenberg, Greenland.
Human hair has the property of expanding and contracting along with changes in humidity, and is therefore used in making scientific instruments like the hydrograph, used in weather observatories all over the world to record humidity. Best hair for this purpose is from redheaded girls, since it absorbs more water.
Cleveland reaches agreement to host National Air Races for next 10 years.
Unemployed apple vendor's chant: “Hyah, folks, an apple fit for a Prime Minister; distinguous, chick, and dainty; hyah, hyah.”
Market wrap: Stocks moved narrowly in “pre-holiday” atmosphere; weak opening was followed by midday recovery; some late weakness after local bank closing. Industrial leaders, coppers, and rails showed strength. Bonds weaker on more active trading; US govts. slightly lower, foreign generally steady; corp. mostly lower with highest grade steadier. Commodities mixed, closing with relatively small changes.
Conservative observers advise remaining on sidelines until more accurate information on trade in the new year.
Market observers are watching yearly low levels; a breakthrough to new lows is believed to indicate further decline, while holding above previous lows indicates strength.
Brokers are increasingly allowing customers to carry margin on stocks under $10 due to the rising number of such stocks.
Movements in silver price are being watched closely; recent decline in commodities was led by the white metal.
Recent investment buying said counteracting negative influence of commodity prices, bank failures, and tax selling.
Article by H. Alloway praising self-regulation of NYSE; while Exchange constitution isn't ponderously detailed as law books, it deals with principles and can be swiftly and equitably enforced due to the absolute authority of Governors over members; indeed, penalties are often inflicted for acts violating no formal laws.
A. Sloan, GM pres., says world going through major economic readjustment; hopes we can, through better knowledge, determine underlying cause of business cycles. While not forecasting when things will turn, says no cause for discouragment, better order is sure to result, and eventually greater prosperity than ever before.
J. Klein, asst. Commerce Sec., returns from 2-month European survey; depression there severe; France feeling first effects. No signs of immediate recovery but noticeable change in attitude to US business, general realization US must lead recovery.
[Those patterns again ... ] E. Gruhl, North American Co. (electric utility) GM, sees similarity in pattern of all previous business depressions, inevitable sequel of vigorous recovery. “It is human nature to exaggerate, and to forget ... Every depression has seemed at the moment radically different and more severe than all previous ones. The 1930 depression has been no exception, yet it is of the same pattern as the others.”
C. Minor, Internat'l GE pres., says co. business in Europe very satisfactory, electrical industry resisting depression better than any other line of business.
AT&T has attracted considerable investment buying, with yield now over 5% and shareholders now numbering over 580,000.
Traction stocks were weak on reports of complications in unification negotiations.
Economic news and individual company reports:
Fed. Reserve takes first step in renewed easy money policy, lowering New York discount rate 1/2% to record low for US of 2% and lowest currently in the world; expected to take further steps to “make money easier and more plentiful than it has been at any time since the depression started.”
Income tax receipts for July 1 - Dec. 20 were $1.082B vs. $1.163B in 1929; receipts for Q4 may run above earlier estimates by $15M-$19M.
Rail freight loadings for week ended Dec. 13 were 744,443 cars, down 42,730 from prev. week and down 178,418 or 19.3% from 1929 week.
Gasoline stocks at refineries Dec. 20 were 39.016M barrels, up 1.336M in week; refineries operated at 65.3% vs. 64% prev. week; oil production was 2.202M barrels/day, down 30,650 from prev. week and down 431,600 from 1929.
Following ruling by Florida Supreme Court requiring city of Sanford to raise taxes to provide for debt service, city asks bondholders to negotiate modification to ease burden on community; bondholders say willing to discuss some modification, will continue with legal proceedings if unable to agree.
Northwest Bancorp. monthly review says holiday trade in 10 Northwestern states running well ahead of expectations 60 days ago.
Commerce Dept. reports foreign trade of 62 countries, representing over 92% of all world trade, totalled $27.282B in first 6 months vs. $31.774B in 1929.
Iron Age reports usual year-end shutdowns in steel plant operations may drive production below 25%, but Jan. specifications continue to improve, indicating upturn early in new year.
Farm Board reports producers of over 40 crops helped by Agricultural Marketing Act through 12,000 farmers' cooperative associations with 2M members.
German unemployment relief headquarters announces German unemployed on Dec. 15 were 3.977M.
Australian banks protest heavy demands by govt. on resources, say this may force drastic curtailment of service to other customers, losses to industry.
Bank of France Gov. Moret tells parliamentary commission investigating Oustric bank failure the central bank will probably suffer no loss due to the affair.
Companies reporting decent earnings: Brooklyn-Manhattan Transit (BMT).
Marshall Field & Co. stock about 28; 1929 earnings $5.02/share, 1930 estimate $4/share; yield 9%.
Aluminum Co. of America still selling at relatively high multiple of 20 times expected 1930 earnings based on long-pull optimism on aluminum industry.
“Dubious Person - I've been getting threatening letters through the mail. Isn't there a law against that? Postoffice Inspector - Of course there is. It's a very serious offense to send threatening letters. Have you any idea who's doing it? Dubious Person - Sure. The Woofus Furniture Co.”
Ballyhoo, a musical comedy starring W.C. Fields, who “manages to be incessantly funny without attempting to be sophisticated or going around the corner of the old barn for a joke.” Mr. Fields plays Q.Q. Quale, sponsor of a transcontinental foot race and in love with the sinuous Goldie La Marr. Mr. Fields juggles cigar boxes, plays pool and poker, and is several times on the verge of playing the bass violin, but someone always comes in (the bass violin finally gives birth to a lot of little violins). [Note: he really was a good juggler - this one is amazing, especially the cigar boxes:]