Howard Hughes to release movie Hell's Angels after spending 3 years and $4M in production; third film by Hughes following Two Arabian Nights and The Racket; enlarged screen being installed for premiere. Terra Film of Berlin to release Love in the Ring, Max Schmeling's first talking film; dialogue mostly in German but some English, French, and Portuguese. Warner Bros. to release sound version of Moby Dick with John Barrymore.
[Advertisement: Howard Hughes' Hell's Angels is available on Amazon, as well as the fantabulous poster on the right - some acting and dialogue feel dated, but amazing aerial scenes, including my vote for the best Zeppelin scene ever, and a huge dogfight that still packs a wallop. Also includes a stupefying 19-year old Jean Harlow in her first major role, including the only surviving color footage of her in a short Technicolor party scene].
Assorted historical stuff:
China in crisis: Central government recognized by Western powers has in past month lost control of two of four provinces remaining to it; Nanking govt now in precarious position between Communists in South and generals in North. Rumors of Russian involvement appear doubtful. Likely outcome of current anarchy is division of China outside Manchuria between generals in North and victor among Nanking gov't and Southern rebels; "In Manchuria the son of Chang Tso-Lin will doubtless continue his now peaceful sway under the benevolent eye of Japan."
Manchester cotton market continues dull, little hope of improvement seen. Indian boycott seems more intense.
Binga State Bank [first state-chartered African-American owned bank in Chicago] closes due to "frozen assets and insufficient funds."
Mortality rates in Illinois have increased 10% in past 10 years in people over 40, even as life expectancy has increased about a full year, to 59 years due to improved child health; "too fast living is cutting it short at the other end."
Chrysler Building 71st floor observation deck opens to the public on Monday.
Several car dealers from leading brands reported dealing with sales slumps by replacing used car lots with miniature golf courses.
Bears again attacked in morning, this time concentrating on utilities due to electricity rate cuts. Declines remained moderate with bears unsuccessful in bringing out more liquidation; volume dropped sharply, turnover for first five hours was 1.090M shares, lowest since Nov. 1, 1926. Afternoon activity while dull favored up-moves; strength in GE, American Can, US Steel, Vanadium.
Walter P. Chrysler sees improvement in auto industry, believes business generally on upturn; not overly optimistic about immediate future, but believes business in almost every line has hit bottom; also believes commodity prices at bottom. Pres. Grace of Bethlehem Steel confident bottom reached in steel demand and prices. Erie Rail Pres. C. Denney sees some signs of improvement.
Editorial: Some have blamed excessive installment selling for the business downturn; this isn't the case as seen by very low default rates. Four large auto finance companies reported less than 0.33% overdue more than 30 days as of June 30, vs. 0.20% in 1929. The system might be more severely tested when economically troubled buyers have exhausted savings; "possibly these reports will be less cheerful reading six months hence," but credit doesn't seem to have been excessive.
Pres. Grace of Bethlehem Steel, joined Pres. Farrell of US Steel and other prominent industrialists opposing wage cuts in current conditions.
Market considered stronger technically after repulsing bears; considered well positioned for another try at recent 240 resistance level; passing through this level on good volume would be considered very positive. Conservative observers cautious based on similar movements in May, followed by June break.
Cuts in electricity rates have sparked fears of a “revised rate-making orgy throughout the country.” However, rate cuts have happened regularly in the past; while they may temporarily reduce earnings, they have generally stimulated enough new use to more than make it up in the long run.
Economic news and individual company reports:
European automakers meet secretly in Paris to discuss plan for quota on American cars; would cause large loss to American industry.
US gasoline consumption in June was 1.197M barrels/day, increase of 20,000 over May and 79,000 over June 1929.
Banks reported $49M increase in "all other" (mostly commercial) loans to $2.464B, increase of $108M from June 11 low point.
Almost all auto companies expected to resume production by Aug 4. Large Ford supplier to recall 1,000 men on Monday.
New York Edison proposes electricity rate cut from 7 cents/KWHr to 5 cents. Boston and Philadelphia announce electricity rate cuts.
Companies reporting decent earnings: American Light & Traction, McGraw-Hill Publishing, Royal Typewriter.
Westinghouse stock about 146, yield 3.4%, earned $3.13/share in first half vs $4.92 in 1929. General Mills stock about 45, yield 6.7%, earned $4.83/share in year ended May 31 vs. $4.57 previous year.
+ The Boring Stuff: