Major presidential speech:
Pres. Hoover's address to American Bankers' Assoc.:
Past year has been a severe shock to economic system, disorganizing it and slowing consumption to 85%-90% of normal. This has caused “a great human problem ... unemployment, privation, and fear”; however, it's not a new experience but typical of recurrent crises in the past.
Main cause of most of these crises is an inflationary boom leading to destructive results, in this case in our stock markets and in worldwide overproduction of many commodities. Some fatalists believe these crises are inevitable, but the same was once said about typhoid or cholera. Govt., economic and business leaders have already accomplished much in past decade; as a result, “the period of stable prosperity between storms is longer, the period of the storm is shorter, and the relief work far more effective.”
Unprecedented cooperative measures so far by business, bankers, labor, and govt. have been effective at maintaining demand to some extent, but we should also think of prevention. The banking system can play an important role due to its large influence in directing credit, both by restraining unwise expansion and speculation during booms and by instilling confidence and making credit accessible during recovery. Rails and utilities could also act as “balance wheel” through public works and construction.
While depression is worldwide, US doesn't need to wait upon recovery in rest of the world but can lead the way as it did in 1922. Our resources, people, and scientific discovery are unimpaired. Depression is “but a temporary halt in the prosperity of a great people.”
Assorted historical stuff:
F. Kent, Bankers Trust NY director, deplores tendency of the masses to follow unscrupulous politicians in adopting economic remedies contrary to experience. “The record of laws passed to accomplish the impossible is amazing ... and yet so alluring is the word 'government' that many who demand less law usually end up by asking for more law to meet their intent ... It is more spectacular to 'get men' than to correct abuses and therefore the politician is out to get men.”
AFL to be asked to adopt policy of 5 hour day and 5 day week, with pay at 8 hour rate or higher, in Boston convention next week.
British Imperial Conference hopes to solve problems of empire free trade, India, and Palestine, knitting empire into an “economic and imperial whole.”
Mexican govt. instructs high vigilance against gold smuggling to US; cars said to be smuggling gold in gas tanks.
Transcontinental 24-hour air mail and passenger service between NY and California to be inaugurated as soon as night-flying facilities installed along route.
To make up for Hawaii's shortage of native birds, the Outdoor Circle, a Honolulu women's society, has been actively introducing birds from abroad.
Penstate Homestead Jessie, world-famous cow, dies after devoting 4 years to science; had window installed in stomach to enable observing digestive processes.
NY City Community Council recommends construction of world's largest airport on artificial island just south of Governors Island in New York Bay, and construction of subway from Manhattan to Staten Island and on to Brooklyn, with stations on Governors Island and the airport.
New Lincoln building on E. 42nd St. to have unique dining room named the Dungeon, “hewn out of the virgin rock 35 feet below street level” and decorated in medieval Viking style. Difficulty providing satisfactory ventilation was overcome by construction of air intakes near top of the building.
Market wrap: Following sharp technical rally on Wednesday, bears resumed “hammering tactics” on major stocks, succeeding in forcing major setbacks from Wed. highs. Volume was sluggish, possibly due to Jewish holidays, but selling was persistent and prices worked gradually down most of the day. Trading favorites including J. I. Case and Worthington Pump broke badly on light volume. Improved grain markets didn't affect stocks until late afternoon, when a rally lifted prices above the day's lows. Bond market active, prices mixed but trading in narrow range; foreign issues mostly lower.
Goodbody & Co.: “From the data on hand, it is our belief that the chain stores have definitely turned the corner”; see continued improvement from now on.
F. Sargent, Pres. Chicago & North Western Rwy., says rail profits being seriously reduced by constant rate reductions, and by what amounts to govt. competition.
Some prominent govt. officials reportedly considering arrangement of large-scale commodity buying, internationally coordinated between producing and consuming nations. Farm Bd. Chair Legge says time may have come for purchase of commodities as investment.
Economic news and individual company reports:
Fed. Reserve reports money in circulation Oct. 1 was $4.494B, up $58M from prev. week; NY City member banks reported loans on securities $3.796B, up $177M and “all other” (commercial) loans $2.448B, up $34M.
NYSE reports brokerage loans to members Sept. 30 were $3.481B, vs. $3.599B Aug. 29, and the record high of $8.549B on Sept. 30, 1929.
Income tax receipts for fiscal Q1 (July 1 - Sept. 30) were $554.4M vs. $609.4M in 1930, total ordinary receipts were $868.9M vs. $1.015B, and total ordinary expenditures were $715.6M vs. $722.7M. Gross public debt on Sept. 30 was $16.081B vs. $16.720B in 1929.
US electric output for week ended Sept. 27 was 1,704 GWHr, down 3.2% from 1929 but up 5% over 1928.
26th annual auto show to run in Chicago Nov. 8-15; number of exhibits is within 5% of last year's record.
Bradstreet's commodity index for Oct. 1 was down 1.2% from Sept. 1 and 18.9% from Oct. 1, 1929.
Steel price picture mixed; scrap prices showing some declines, but Dow avg. of 8 finished products up $0.14 to $45.60/ton, first increase since July 1929.
Panama Canal tolls for Sept. totaled $2.057M by 458 ships, lowest number of transits in a month since June 1927.
Diversification: American Radiator now producing metal caskets; MacAndrews & Forbes now producing Maftex insulating board from licorice root.
“Moll - And what did your poet do when you turned him down? Doll - Oh, the poor dear threw himself into the waste paper basket.”
+ The Boring Stuff: