Saturday, February 7, 1931: Dow 169.88 +0.50 (0.3%)

Assorted historical stuff:

Glass committee seen likely to curb security "loans for others" made through banks for corporations and individuals. These loans have not been defended by a single witness in three weeks of hearings, and have drawn some harsh condemnation as the main factor taking speculative inflation to the heights it reached.

Bank of US bankruptcy hearing receives testimony that the executive committee never questioned a loan if the recipient was a bank affiliate, while loans to non-affiliates were investigated thoroughly. B. Marcus, pres., and S. Singer, executive VP, continue suit to disqualify M. Steuer as head of joint state/county investigation.

Washington report: Administration leaders deny reports circulating of a compromise on the veterans' bonus; issue has been discussed with some Republican members but no agreement reached; concern remains that any agreement would be "amended out of all reason." Senate and House leaders reach tentative compromise for $20M loan program to provide drought relief that may be used for food or other necessities. House has been chafing under its rule that no member can mention any Senator during debate; this has prevented members from replying to a recent "carnival of denunciation" in the Senate. However, House has gained prestige due to its more businesslike and temperate nature; "One Senate is enough."

Editorial: Owen Young's recommendation that all commercial banks be unified under Federal control would be desirable; as Mr. Young pointed out, the past few years have shown the superior strength of banks in the national system; over 80% of the 7,000 banks that failed in the past 10 years were state banks, not Fed. Reserve member banks. However, it may not be possible to impose this by law due to states' rights issues; it would probably be better to allow the process to happen naturally as the public becomes aware of the value of Fed. Reserve membership. Member banks should be allowed to establish branches in rural areas; there's much to be said for the Canadian branch banking system, which has a uniform countrywide law and has had far fewer bank failures.

Editorial: Report of the Senate special counsel against Eastern rail consolidation isn't that surprising considering Sen. Couzens' opposition. However, the arguments in the report are 10 years behind the times; most of the dozen or so objections in the report have been resolved in favor of consolidation; one possible exception is the effect on labor, but proponents of the plan have agreed that no men should be laid off because of the mergers.

British Chancellor Snowden denied rumors of a new unemployment relief loan: "My financial orthodoxy is still in a state of virginity." Lord Newton makes unexpected attack on Soviet Union in House of Lords; charges it's spending more on arms than any other power, probably $1B; “it is a perfectly stupefying figure.”

Construction of St. Lawrence waterway for ocean-going ships agreed on after visit of Canadian PM Bennett to Washington.

Railroads have finally arrived at a more reliable method of communication between front and rear cars of long freight trains than the current whistle - low powered radio transmitters are to be installed in each car, allowing signalling by a simple switch.

P. Litchfield, Goodyear-Zeppelin pres.says if McNary-Parker bill awarding airmail contracts to airships is passed, a trans-oceanic service between US and Europe will operate regularly by 1934; points out that 11 of 12 attempted trans-Atlantic dirigible flights have been successful, and no loss of life or injury was suffered.

NY State Sen. W. Lathrop protests continuation of one-man trolley car operation in Brooklyn, cites "tremendous wave of resentment against this penny-wise and pound-foolish false economy."

Moslem mine workers in Southern Bulgaria are on strike after owners refused to give them five half-hour breaks daily for prayers. The miners are from the Pomak tribe, which originally converted to Islam when Bulgaria was under Turkish control. Now, however, the tribe is stricter than the Turks themselves, refusing to accept the reforms of Kemal; men still wear the fez, women the veil, and they still use the old Arabic script.

Market commentary:

Market wrap: Stocks stronger; leading shares were up moderately, while trading favorites had some good advances as bull pools resumed activities. Bond market moderately active; US govts. continue rally; foreign steady, German strong; corp. generally steady. Weak tone in commodities; grains and cotton mostly close narrowly lower; corn up slightly; cocoa declined to new record low of 5.09 cents/pound. Silver declined 5/8 cent to new record low of 26 1/2 cents. Better demand seen for copper at 9 1/2 cents, raising hopes bottom has been reached.

Conservative observers were impressed by lack of liquidation after Thursday's break, but still inclined to wait for market to break out of its recent trading range.

Market strong spots included mail order shares, local tractions (mass transit cos., on improved unification prospects), US Pipe & Foundry, and trading favorites Auburn, Worthington, and Diamond Match [Kreuger-associated].

Market value of all NYSE-listed shares on Feb. 1 was $52.062B vs. $49.020B on Jan. 1.

Stocks in Berlin have had their first substantial rally in several months, and capital flight has eased. Earnings reports were not as bad as expected, and optimism has increased after reopening of the Reichstag, presentation of the budget, and Breuning statements on maintaining reparations and possible end to semi-dictatorship.

Investment trusts (similar to mutual funds and ETF's) have been buying in recent sessions; this has been a factor in stopping reactions over the past few weeks.

Rail freight loadings are considered an accurate measure of business activity. Some time ago, optimistic predictions had been heard that loadings in the first quarter would only about 5% below the 1930 level; however, so far this year the average decline has been about 16%. Rail earnings estimates are being revised down, accounting for some recent profit-taking in rail shares.

16 leading NY City banks are selling at an average of 18 times earnings, 1.5 times book value, and yield of 4%. Leading utilities are selling at 18-20 times earnings.

A copper mining man recently tried to interest the head of a copper co. in a big new prospect. "Not as long as I can buy them on the Stock Exchange for 25 cents on the dollar," replied the executive.

Broad Street Gossip: Some are encouraged by higher Jan. sales at several chain store cos. (Woolworth, Kresge, Kress, Grant). However, executives of the chains are reserving judgement; much of the improvement is in the Midwest, where auto and steel production is rising, but it's uncertain how long that improvement will last; a similar spurt last August dissolved into deeper depression. Many steel producers believe production will hit 65% before start of summer. Head of one of the largest banking groups believes buyers are now in a safer position than short sellers; liquidation is practically over, and stocks sold short to put the market down must be bought back. GM earnings of $3.25/share satisfactory for a very poor auto year; diversification into non-auto lines helped maintain earnings.

Sen. McKellar (D, Tenn.) charges Farm Board cotton operations a miserable failure; Board merely reorganized cotton cooperatives which previously had failed.

National tax conference convened by Amer. Farm Bureau; speakers agree total annual bill of $13B for Federal, state, and local taxes, growing $500M a year, demands serious attention; seeks to awaken public interest in “good government from the viewpoint of the pocketbook.”

Gen. W. Atterbury, Pennsylvania RR pres., believes business near bottom; improvement off bottom likely to be gradual as in the past, and may not be reflected in car loadings for some time.

Economic news and individual company reports:

Rates on NY bankers' acceptances cut 1/8% to record lows of 1 1/4% - 1 3/8% for 30-90 days; demand for short-term investments is very heavy as banks and institutions are building up liquid funds.

New bond offerings in Jan. were $602.4M vs. $125.7M in Dec. (low for 1930) and $624.8M in Jan. 1930; utilities accounted for 46.9%, rails for 17.4%. However, new bonds in the past week were down sharply to $21.3M as veterans' bonus unsettled the market.

US new car registrations in Dec. were 96,054, up 3.2% from Nov. but down 30.7% from Dec. 1929; full year was 2.626M, down 32.3%.

Jan. steel output averaged 91,971 tons (45.94% of capacity) per working day vs. 77,222 (38.57%) in Dec. and 140,596 (70.22%) in Jan. 1930.

Bradstreet's and Dun's weekly reviews report retail trade slow due to unseasonably warm weather in US interior, but note some gains in wholesale as spring merchandising season approaches; some irregularity seen due to impaired buying power in many sections.

A rather stunning chart appears on pg. 4 outlining the inter-relations of 23 public utility holding companies (see small image at right).

Worldwide crude oil production in 1930 was 1.408B barrels vs. 1.478B in 1929 and 1.322B in 1928; US production was 897M vs. 1.007B.

Manchester cotton market reports a fair amount of business despite labor troubles in Lancashire; a steady turnover is taking place with India despite Gandhi's desire for continued boycott of foreign cloth.

Gasoline in Youngstown district cut to 15 cents/gallon (including 4-cent state tax), lowest since 1911; unclear if action is temporary price war. Tank car gasoline expected to be raised 1 cent/gallon on the Atlantic Coast to 8 - 8.25 Cents.

Number of persons in US whose lives are insured for over $1M has grown from 58 in 1923 to 323 in 1930.

C.I.T. (largest independent financer of retail and wholesale installment sales) earnings held close to 1929 levels in spite of declining sales in almost all fields using installment selling; co. launched intensive campaign to diversify and increase number of customers.

Ford increases discounts to dealers from sliding scale of 17.5%-21% to a flat 22%; seen as move to strengthen dealers, particularly small ones.

Nat'l Cash Register 1930 net was about $3/share vs. $7.01 in 1929; co. has written inventory off conservatively and cut expenses steadily through the year.

Company reports since Jan. 1: 99 companies reported higher earnings vs. 1930 and 315 lower; 377 dividends unchanged, 24 increased, 78 cut.

Companies reporting decent earnings: Standard Brands, Amer. Gas & Elec., Hartford Elec. Light, Amer. Snuff, Consolidated Laundries.

Dance report:

Death of Anna Pavlova has revived interest in the ballet dancer. Paris idolized Pavlova from her first apperance in 1909 as a member of Diaghilev's company, until her last in 1928. Her death has provoked speculation on the future of dance. In the past decade, dancing has become one of the highest paid professions, "with honors and shekels going to the eccentric and the fleet of foot." Acrobatic dance teams have featured in European music halls and on Broadway, ballroom dancers have popularized nightclubs, and the black revue has circled the world and is now at the peak of popularity in Paris. By contrast, the ballet has declined, now restricted largely to opera houses. Years of intensive and competitive training are required, and the ballet career is relatively short; a dancer's pay is lower than that of "her cake-walking sister." The ranks of the ballet have thinned; "competition is now for the financial returns rather than for the bouquets of art."

Jokes:

"Smith - Did you ever write a tragedy? Dramatist - I did once, but I thought it was a comedy up to the night it was produced."

"'Had an addition to my family yesterday.' 'Congratulations. Boy or girl?' 'Neither. Wife's mother.'"

Friday, February 6, 1931: Dow 169.38 -1.75 (1.0%)

Assorted historical stuff:

Editorial by T. Woodlock: A reader suggests that eventually the Russian people will realize the promise of Communism is false and overthrow it; might it be better for the industrial world not to ostracize Russia now, so that when Communism ends it will be a well-developed country ready for “decent and profitable intercourse with other nations?” In reply, we must consider Spengler's “morphological” concept of history, in which every “Kultur” passes through stages similar to a human life. The Western world, including Europe and the US, has reached “the evening of life”; Russia, by contrast, is only a child. It's therefore impossible to predict what form Russia will develop into after this stage, though Fascism seems a possibility; in any case, their trajectory seems completely different from that of Western civilization.

Washington report: Glass committee hearings appear headed toward unification of the country's banking systems, with general agreement that current competition between states to liberalize laws has led to trouble. What form unification will take isn't clear yet. Senate hearing on confirmation of E. Meyer to Fed. Reserve was one of most diverting for years, resembling “a cross between and old-fashioned debating society and a dog chasing his tail”; eventual confirmation seems certain. Compromise on veterans' bonus seen as dangerous; if it gets before Congress in any form, the most extreme version is likely to pass. Congressional committee members say no agreements have been reached yet.

German Chancellor Breuning tells Reichstag war reparations one of main causes for worldwide depression. However, must strive to fulfill obligations pending solution, unwilling to allow demagogues to dictate speed with which solution is sought. Reichstag thrown into uproar when J. Goebbels, chief Hitler lieutenant, charges officials with wholesale corruption and high treason; says govt. policy of fulfilling treaties has plunged Germany into disaster as they predicted; “National Socialists want to seize power legally, but once in power we will not conform to the present laws.”

Chile Senate grants practically dictatorial powers to Pres. Ibanez. The Min. of Finance assured Congress powers would not be used to change structure of central bank or to give govt. guarantees to private investment in new Cosach nitrate organization.

Editorial: A recent speech by G. Roberts, US member of the Leagueof Nations gold committee, blamed much of the worldwide depression on maldistribution of gold; in the case of the US, concentration of gold was said to have supplied the basis for inflation of credit and wild speculation. This view of the role of gold is exaggerated. Shortage of monetary gold is years away and can be dealt with. The US didn't purposely concentrate gold, and didn't hoard it but used it as the basis for extending foreign credit. Maldistribution of gold is an effect, not a cause, of economic disorder; it will be corrected by freer trade and international financing.

Editorial: Owen Young's testimony yesterday "swept through the turgid atmosphere of Washington like an ocean breeze." Whether or not his solutions prove workable, his open mind, clarity, and freedom from personal animosities are an "exceedingly valuable" example for all public men.

Farm Board chair. Legge says danger of wheat imports [in spite of 42 cent tariff] has now passed; fears shortage of wheat if drought continues; says his statement that wheat stabilization would be impossible if farmers continue overproducing was intended as long-range assertion, not as statement Farm Board would refuse to stabilize the 1931 wheat crop. Agriculture Sec. Hyde urges reduction in acreage of all crops and reforestation of idle land.

NY State Senator S. Hofstader says at least 10,000 jobs in NY are held by 14-year-olds; introduces bill requiring children to remain in school to age 15. NY State Assemblyman F. Zimmerman (D, Queens) proposes restricting billboards to commercial districts to protect scenic beauties from "billboard monstrosities."

Eastman Kodak develops new type of movie film about three times as fast as previous film, called one of the greatest advances in film in 20 years [fast film requires less light for exposure]. Benefits include reducing intense light needed for filming, increased depth of field, and ability to shoot newsreels of indoor events.

US Navy tests new small plane designed to be folded up and carried in a submarine.

Prince Edward Island has a thriving business supplying grass seed for US golf courses, lawns, etc. In 1930 over 350,000 pounds were imported from P.E.I. to give US golfers a better chance to "get down in one" from more than 15 feet from the cup.

S. H. Kress to open first five-and-ten cent store in Hawaii.

Market commentary:

Market wrap: Bears increased activities in stocks, with renowned bear leader Bernard E. Smith heavily selling US Steel; weakness spread across standard stocks; some stop-loss orders were uncovered, causing liquidation in some issues; some recovery in last hour. Bond market quieter; US govts. continued rally on general opinion veterans' bonus will be resolved without huge new bond issue; foreign govts. firm; corp. high-grade steady, lower-grade and convertibles irregular. Commodities mixed; grains down moderately on reports of moisture in drought areas; cotton again up substantially. Copper buying moderate despite drop to 9 1/2 cents.

Conservative observers continue to advise staying on sidelines, since stock prices are still close to recent peaks.

Dow theory adherents see resistance encountered by industrials at about 171 as highly significant; this is second time industrials failed to penetrate Jan. high, indicating general market isn't ready for sustained advance. Trade reports have also given no indication of early business revival. A rise to 175 would be a strong positive indication, but failing that bears may try to test support of the Dec. lows.

Brokers report stocks of companies whose 1930 earnings held up well compared to 1929 have been attracting more inquiries from customers, though most aren't yet buying those stocks at current prices.

GE seen having good prospects in new fields it's entering, including washing and ironing machines; it's offering a liberal partial-payment plan. Consistent diversification of company activities is believed to position the co. well for any improvement in general conditions.

Broad Street Gossip: Veteran traders note that after a depression, recovery is always slow, with inevitable reactions. Late in 1928, many thought correctly that stocks were too high, but the market continued up for a year. Similarly, many have said for the past 6 months that stocks were too low; they may also have to wait a little longer before being proved right. “Let me say, as ... a trader with a good memory, that business will be far better ... and the stock market much higher, before a majority is convinced that we are headed for normal conditions.” One argument the bears can't use is stock "saturation," since almost no new issues have been offered since the market break in Oct. 1929. Reports circulating of important changes in the copper industry before year-end; shareholders said dissatisfied with poor state of industry since consumption is still relatively strong at 75%-80% of normal.

Managed investment trust (similar to mutual funds) year-end reports are showing depreciation (difference between cost of securities and current price) far worse than 1929; only a few report less than 25%. Rapid decline in second half made “prices melt beyong anything they had ever suspected as possible.” Some prominent banks are now launching fixed trusts (similar to ETF's).

G.M.P. Murphy note steady postwar growth of cigarette industry, comparable only to record of public utilities. See years ahead as promising; inventories are low both at sellers and consumers; per capita US consumption is relatively low; export markets are promising.

K. Templeton, CBOT member, says govt. intervention in grain has destroyed foreign markets through tariff retaliation.

H. Jones, Franklin Trust VP, says US Pres. should have business executive as advisor to coordinate economic efforts; would “carry the ball and ... hit the line of business depression while he ... captains our entire team.”

C. Bullock, Harvard Econ. Society pres.: “On the whole, we believe that the turning point is not far away.” Cites better world political conditions, low inventories, bank difficulties past peak, easy money, and precedent of previous major depressions lasting 17-20 months from peak to bottom. Sees positives in recent construction and manufacturing reports.

Economic news and individual company reports:

M. Steuer, conducting Bank of US hearing, questions I. Kresel, bank counsel, about some strange-looking loans to subsidiaries of affiliates.

Rep. Rainey charges Eugene Meyer intentionally ruined Joint Stock Land Bank system after taking it over in 1927.

Fed. Reserve reports money in circulation Feb. 4 up $32M to $4.576B, total Reserve Bank credit outstanding down $7M to $949M. Member banks in NY City report brokers' loans down $18M to $1.716B; loans on securities to non-brokers down $20M to $1.915B.

New stock and bond offerings by domestic and foreign corporations in Jan. were $673.4M vs. $159.9M in Dec. and $731.9M in Jan. 1930.

Texas Railroad Commission faces problem of controlling production in huge newly discovered East Texas oil area.

Steel production has shown some improvement since year-end, but below what had been anticipated by leading trade authorities; production has gained 11% in the period vs. 17% in 1930, and new buying has fallen off. On the other hand, Youngstown steel executives say the gradual upturn has fully met their expectations, and are more optimistic. Dow steel and iron average remains at $44.56/ton. Scrap markets quiet, with weaker tone.

World copper output in 1930 was 1.770M tons vs. 2.107M in 1929.

US exports of industrial machinery in 1930 were $227.1M vs. $257.1M in 1929 and $209.5M in 1928.

US exports of movies in 1930 were 274.4M feet valued at $8.1M vs. 282.2M valued at $7.6M in 1929. Largest market is Europe.

Bank of England weekly statement shows rise in gold holdings of 899,000 pounds, to 141.040M; this was first rise since Nov. 6, during which time a total loss of 21.4M pounds was suffered. In past 2 weeks, Bank has successfully raised London bill rates through open market operations and "moral suasion."

Canadian employment index Jan. 1 was 101.7 vs. 108.5 prev. month and 111.2 on Jan. 1, 1930; decline was less than usual seasonal amount, attributed to unemployment relief measures.

Bank of Chile pres. M. Burr says Chile weathering depression well; govt. ran surpluses in past 4 years including 1930; unemployment low.

Sweden cuts discount rate to 3%; attributed to excessive supply of funds entering country due to stable finances, as in Switzerland and Holland.

Berlin press favorable on French participation in 130M mark credit to Germany, though 6 1/2% rate is considered unduly high by many bankers.

In spite of vigorous German campaign to lower costs of living and production and drastic declines in world prices of food and raw materials, cost of living has only declined 7% in past 18 months; wholesale price index is down 14%. Govt. faces problem of high duties on farm products, and regulated prices in important sectors.

NY City's outstanding debt as of Dec. 31 was $2.128B vs. $1.969B prev. year.

Boston asks ICC for lower rates for rail freight transported there so port of Boston can get more New England exports that currently pass through port of NY.

Union Carbide 1930 net was about $3.10/share vs. $4.19 in 1929; chemical division holding up better than old line chemical makers thanks to development of new specialty lines subject to less competition. Remington Rand (office machines) earnings drastically declined in second half 1930 (Q4 net $0.02/share vs. $1.02), but business started trending up in Dec. and Jan., and co. is hopeful on 1931; with most of the world having only started to modernize office equipment, a large potential demand is seen once general business picks up.

Companies reporting decent earnings: Connecticut Power, Mapes Consolidated (makers of cushioned egg cases).

Movie:

Finn and Hattie - A "slow-moving, dull-witted film farce"; the usually amusing Leon Errol, Mitzi Green, and Zasu Pitts "seem to be straining for humor, without quite reaching it." Saving grace of the current showing at the NY Paramount is appearance of Maurice Chevalier on stage, singing both English and French songs, and "conveying the meaning of the latter numbers in very funny pantomime."

Joke:

"Caller - Is George in? Wife - Yes, he's in. Caller - Good, then p'raps I'll get the money he owes me. Wife - You're an optimist. If George had any money, he wouldn't be in."

' It's so hard to choose a career for my son. I want him to go into my business; my wife wants him to be a doctor; and he insists on being an airman and going on a world tour.' 'That's tough. How old is he?' 'He'll be four next January.'

Thursday, February 5, 1931: Dow 171.13 +1.42 (0.8%)

Assorted historical stuff:

Owen Young testifies before House Ways and Means Committee. Opposes veterans' bonus on grounds it would be economically risky; suggests compromise in which veterans would be allowed to borrow at low interest rates against their bonus certificates, on theory only those in need would do so. R. Stephenson, Amer. Bankers Assoc. pres., says bankers universally and unalterably opposed to bonus; believes stimulation would be temporary and delay business recovery.

Mr. Young also appears before Glass committee. Says widespread bank failures in relatively prosperous times not acceptable; recommends bringing all deposit-accepting commercial banks into single national system under federal law, by constitutional amendment if necessary; believes competition between states in liberalizing banking law has contributed to banking difficulties. Hits “loans for others” [on securities] as source of speculation, uncontrollable contingent liability for banks. Favors strict regulation of bank affiliates. Says he's not a 1932 Presidential candidate.

Pres. Hoover says won't compromise on opposition to $25M Federal food relief bill.

Twenty five leading companies employing total of several hundred thousand notify Welfare Council Coordinating Committee on Unemployment that they contemplate no reduction in current workforce.

Editorial: French announcement of $120M in loans is encouraging as sign it's starting to use its vast gold reserves; less positive is that the three countries chosen (Romania, Poland and Yugoslavia) are French military allies; this has evoked criticism in other countries. The US could lend powerful assistance to world trade by using its even larger reserves, though this must wait until the veterans' bonus is resolved; when it does so, it shouldn't follow the French example.

C. Wooley, Amer. Radiator chair., tells House Ways and Means committee construction business is being held back by lack of adequate funds for long-term mortgage bonds at low rates; says veterans' bonus would dry up market for these bonds. Estimates 1.5M of 4M workers in building trades out of work; believes revival just starting; number of homes for which contracts were awarded in Dec. was about the same as 1929, though 50% below 1926 - 1928.

Editorial noting decision of Standard Oil of NY to put administration of its pensions, disability and life insurance in hands of the Metropolitan Life Ins. Co. This is seen as giving authority to an "expert and responsible third party," thus avoiding "pitfalls into which to many pension plans conducted without scientific knowledge of insurance principles ... have run."

US Building & Loan League gives guideline of two years' salary as sound price to pay for a home.

China is considering various new names for its currency, now designated as "dollar Mex" since early exports of Mexican silver to China arrived in coin form that went directly into circulation. Possible names include Yuan, Kuo, Min, Tang, and Sun.

Japan is complaining that hordes of fur-bearing seals in the North Pacific have grown so numerous under shield of a 4-country protection treaty agreed in 1911, that they are causing major damage to Japanese fish populations; wants restriction on killing the seals relaxed.

Ford Motor denies abandonment of Brazil rubber plantation project; says work ahead of schedule, 3,500 acres of jungle cleared.

Sen. Wagner (R, NY) introduces bill to convert Governors Island into public aviation terminal.

New electric compass for piloting airplane successfully tested by GE at Schenectady. Combined with autopilot developed by Sperry Gyroscope, will relieve human pilot of all functions but landing and taking off.

Anton Flettner invents new motor truck combining two chassis, a forward one carrying driver and motor, and a second carrying freight.

Construction of world's largest non-rigid airship for US Navy to start in a few weeks; will be 200 feet long, 44 feet in diameter.

A modern Pullman (passenger) train car contains over 1 1/4 miles of electric wire, 1/2 mile of pipe, and a complete electric generating and storage plant.

Melville K. Packer retires after 48 years of service on the Pennsylvania Railroad; based on careful records, rode over 2M miles in the cab of a locomotive.

Market commentary:

Market wrap: Stocks mostly moved up on somewhat higher volume, but improvement was uneven in both standard stocks and trading favorites, with some issues including US Steel and NY Central failing to share in the advance. Bond trading volume not heavy, but prices were higher across the list, led by a strong rally in US govts. Commodities mixed; grains rallied early but ended moderately down; cotton up substantially. Copper offered by some producers at 9 1/2 cents, matching 1930 low and lowest since 1895; buying remains small. Silver market believed scraping bottom, at least for the time being.

Conservative observers still cautious, advise taking profits on rallies; many look for a technical setback since prices are near their highs of the year.

A number of active traders are concentrating in low-priced stocks, on theory they've been thoroughly liquidated already and will respond to new buying.

Short interest has reportedly been reduced moderately but consistently in recent sessions, particularly in trading favorites.

Talk has already started of probable first-quarter earnings; business in many lines hasn't improved as much as hoped for, particularly steel production.

US Steel still seen as market bellwether; action in past 2 weeks has been inconclusive, with stock moving in an unusually narrow range; a sizable short interest exists, but enough buying support has come in to check any sharp setbacks.

State and municipal bonds issued in Jan. were $47.6M vs. $92.2M in Jan. 1930, and lowest Jan. total since 1920; bidding was very strong.

Copper market observers say buying is very reluctant; when inquiries do appear, they're able to get a low price because of competition with second hand dealers.

Broad Street Gossip: An old tradition says never to sell a dull market; however, the current dull market hasn't given much profit on the buying side either. Upcoming quarterly earnings comparisons may look better than a year ago, since they will be against declining 1930 earnings. Production of some commodities has shown improvement, but no big rise in earnings can be looked for based on current prices of major products. Recent cement co. earnings have been much more favorable than other industries; with big construction work planned, cement companies may also do well this year.

Editorial by T. Woodlock praising as sound a proposal of ICC to replace extremely convoluted and lawsuit-prone railroad rate-setting method based on valuation with one based on giving rails adequate access to capital to maintain good service; also recommends repeal of convoluted recapture provision.

Goodbody & Co. say investment trust (similar to mutual funds and ETF's) buying has helped technical position of many stocks; due to high degree of concentration in certain stocks, 15%-25% of many popular stocks have been taken out of the market by the trusts.

Sir H. Cunliffe Owen, British Amer. Tobacco chair., cautious on economic outlook; believes depression hasn't yet run its course, not optimistic on business upturn this year. Sees US leading recovery when it comes. Company had exceptionally good 1930, but is now feeling effects of depression.

R. Stephenson, Amer. Bankers Assoc. pres., says low point of depression hit about Dec. 20, business on upgrade since; inventories low and buyers appear to be coming into market to replenish inventories; sees gradual recovery, becoming substantial in second half.

Economic news and individual company reports:

Steel production in week ended Monday was at 47% vs. 46% prev. week, 44.5% two weeks ago, 76% in 1930, and 85% in 1929. Weekly steel reviews disagreed on conditions, with Iron Age saying momentum was lost while Steel said tone was better than last week; both agreed changes were minor. Finished product prices were steady, but scrap prices weakened.

US electric output for week ended Jan. 31 was 1,687 GWHr, down 1.9% from prev. week, down 6.3% from 1930 and down 1.6% from 1929.

M. Steuer, at Bank of US inquiry, charges York Investing Corp., an affiliate, was set up expressly to loan money to bank officers. H. Pollock, bank director and counsel, says can't recall details leading up to borrowing of $8M from bank by three affiliates.

Midweek weather reports noted serious lack of subsoil and soil moisture in large areas of US and Canada, lack of normal snowfall in mountains and Great Plains.

US cigarette production in 1930 was 119.625B vs. 119.039B in 1929; snuff also increased while cigars and loose tobacco were down; internal revenue receipts from cigarette production were $358.947M vs. $357.206M.

Senate passes Davis bill requiring contractors to pay based on wage scale in local community.

ICC is expected to reject plans to link New England rails with large lines west of the Hudson on grounds this would reduce competition.

Brazilian Pres. G. Vargas outlines most thorough economic reform program in Brazil's history, including reforming central bank, stabilizing currency, developing national industries, and gradually solving overproduction of coffee.

Higher bill rates due to energetic Bank of England efforts are attracting foreign capital to London. Rumors the Bank may advance its rediscount rate from the current 3% [vs. 2% in NY] are generally discounted in informed quarters.

US flour production in 5 weeks ended Jan. 31 was 6.948M barrels vs. 7.161M a year ago.

Nat'l Retail Dry Goods Assoc. convention urges govt. to establish $1B sinking fund as reserve for lean years.

H. Walker, Amer. Steamship Owners Assoc. pres., says shipbuilding was only major US industry to substantially increase employment in 1930.

NYSE seat sold for $227,000, down $3,000 from previous sale.

Cadillac reports Jan. retail deliveries of 1,137 cars vs. 832 last year. W. Blees, Oakland Motor Car VP, reports sales running over 15% ahead of last year, indications of further increase before opening of spring selling season; car shortages reported by some dealers.

F.W. Woolworth reports markedly improves business trend in Jan.; sales were $19.240M, up 4.5% from 1930; sales at old stores were up 2.67% vs. a rise of 0.38% in Jan. 1930.

Caterpillar 1930 net was $4.63/share vs. $6.16 in 1929; showing considered satisfactory in depression year. NY Central 1930 net was about $7.20/share vs. $16.88. GM 1930 net was $3.25/share vs. $5.49.

Companies reporting decent earnings: Public Service of Northern Ill., McGraw-Hill, Gulf Coast Lines, George W. Helme (snuff).

Movie:

Seas Beneath - a Fox film, directed by John Ford. Story of US "mystery ship" sent out during the war to sink U-boats; members of crew leave ship in pretend panic when submarine approaches; when it draws close to ship, one of the ship's cabins falls apart, revealing a huge gun that sinks the U-boat. Artificial melodrama with acting almost as mechanical as the plot; George O'Brien as Commander Kinsgley strolls about exhibiting his muscles, while his crew looks about 15 years old and acts 12. Henry Victor is good as U-boat commander Von Steuben, also Marion Lessing as Von Steuben's sister, a German spy who Kingsley falls in love with.

Jokes:

"'My friend,' began the man with the bag full of religious tracts, persuasively, 'have you ever reflected on the shortness of life and the fact that death is inevitable?' 'Have I?' replied the businessman. 'Well, I should say so. I am an insurance agent.'"

A radical wrote to John D. Rockefeller, Sr. asking him to divide his huge fortune among the people. Mr. Rockefeller replied "Your suggestion is interesting, but hardly practical. However, to ease your mind on the subject, I am enclosing a check for $2.77, which would be your allotment if I acted on your proposition."

Wednesday, February 4, 1931: Dow 169.71 +1.00 (0.6%)

Assorted historical stuff:

Washington report: Pres. Hoover issues long statement on the $25M Federal food relief bill. Says Red Cross has assured him no one would be cold or hungry in drought area or among unemployed; believes Federal aid would be disastrous precedent; however, willing to accept it in unlikely case combined local govt. and charitable relief is inadequate. Sen. majority floor leader Watson visits Pres. Hoover; believed to have discussed compromise on the issue. Extra session of Congress seen increasingly likely; Wall Street not likely to welcome it. Democrats may be unhappy at the prospect; failure to reach compromise may hurt chances in 1932. Veterans' bonus now subject of intense controversy, with increasing pressure by veterans' groups, protests from business, banks, and important newspapers. Sen. Finance Committee hears testimony against bonus from Gen. Hines of the Veterans' Administration, and E. Duffield, Prudential Life Ins. pres.

Editorial: Veterans' bonus is the most harmful uncertainty facing business. Oblivious advocates "are likely to make 1931 a worse year for unemployment than 1930." Issue is not one of rich against poor, or protecting banks at the expense of suffering veterans; passage would inflict widespread damage on business of nearly every kind. Large new issue of bonds would displace offerings by local govts. and corporations; "this interference with the slow process of industrial recovery would more than offset and last longer than whatever upturn in trade might be realized from the spending of their windfall by the veterans."

Income tax facts: Return required for single persons with net income over $1,500, married over $3,500; personal exemptions are also $1,500 and $3,500, resp.

Editorial by T. Woodlock: Recent rhetoric by Gov. Pinchot and Sen. Capper against public utilities and other big interests recalls the muck raking that came into fashion about the turn of the century, with its talk of "The System," "The Interests," and "The Invisible Government." This is an emotional reaction to a fundamental change in the economy over the past two generations - the rise of management to a role of the highest importance in an interdependent world economy. The "social control" movement seeks to put management in the hands of "the people," i.e. the govt. Whatever its other merits, this would substantially lower living standards.

Farm Board chair. Legge says last years drought has not yet been broken; soil moisture remains below normal in much of country. Believes Congress "should put a stop to all the imports of farm products that are climbing in over the tariff." No comment on reports he will resign soon.

Editorial: Mexico has again received relief on payment of her defaulted debts; since the original debt agreement in 1922, there have been three interruptions to the scheduled payments. There may be grounds for this latest concession in the drastic recent decline in silver. However, this accommodation by the committee of international bankers "stands out in bold relief" considering Mexico's past treatment of US and European investors; "she has flouted their rights and confiscated their property, with little or no redress."

Australia has experimented with public ownership more than most nations; it has gone in for govt. operated mines, butcher shops, fish markets, bakeries, hotels, brick works, clothing factories, and other enterprises. Many have had to be abandoned as failures, and Australian debt now exceeds $5B, or an astonishing $850 per capita.

Cuban Senate grants Pres. Machado power to suspend constitutional guarantees for the third time in four months.

Agreement published by govt. in Jerusalem for transit of oil from Mosul oil fields in Iraq through Palestine to the Mediterranean.

Swiss Glacier Commission has started an experiment to measure speed of glacier movement, which is only a few inches a year. Results of the experiment not expected to be known for 8 generations.

Postmaster Gen. Brown disagrees with bill designed to give air mail contracts to dirigibles, predicts future trans-oceanic mail will be delivered by planes.

People on the Red River in Manitoba last summer reported strange behavior of fish, swimming to the top of the water, rolling on their backs, and performing other peculiar antics. Cause was discovered to be dumping of homebrew liquor confiscated during police raids.

NY State Assemblyman M. Alterman introduces bill making short selling of stock punishable by minimum of 6 months in jail.

Market commentary:

Market wrap: Stock trading remained very dull for first four hours; significant movement was confined to trading favorites, in which some bull pools resumed activities. Trading increased somewhat late in the session, with the general list moving up. Bond trading more active but still below normal, prices mixed; US govts. rally for first time in past week on bank buying; foreign bonds mixed with European firm but S. American mixed; corp. irregular, little change in averages. Commodities firm; grains strong on reports of continued drought in US; cotton up slightly. Silver again hits record low, down one cent to 27 1/8 cents/ounce.

Conservative observers continue to advise remaining on sidelines. Unusually small volume in recent sessions seen reflecting waiting attitude by both professionals and outsiders.

Amusements rallied on reports business had been better since start of year. Late-session upswing in stocks attributed to stronger tone in grain markets. Bear and bull groups said to be currently operating in Vanadium.

Market observers note encouraging business conditions so far this year, but as yet unsure if they are more than a seasonal spurt anticipating spring buying.

Broad Street Gossip: Due to the depression, fortunes of the 10 wealthiest men in the US now total less than $3B, or less than 1% of total estimated US wealth. Over the last week or so, companies reporting earnings up over 1929 have been going down, while those reporting lower earnings have been going up. From reading "the scores of weekly trade reviews," it seems business is better, if only slightly. "But one must remember that in previous periods of depression business never recovered with a rush. The upturn was gradual, normal conditions returning before many became aware of the fact."

Lima Locomotive stock is about $30; co. has no bonds or bank loans, and about $30/share in cash; working capital is about $40/share; earnings were $2.37/share in 1929 and $6.55 in 1930.

Col. A. Woods, chair. of Pres. Hoover's emergency employment committee, says believes country will recover from depression with high standard of living unimpaired. Says proposed $25M Federal unemployment relief would be against traditional American method of handling charity.

P. LeBoutillier, Best & Co. pres., says depression would be over by now if it had been allowed to run its course without "official meddling."

E. Walker, Transamerica chair., acknowledges length of depression so far has induced caution on recovery prospects, but feels the number of prominent business people who have recently said we've passed the worst stage "does entitle this widespread conviction ... to much more than casual consideration."

Economic news and individual company reports:

Internal revenue collections in Jan. were $72.8M vs. $82.7M in 1930.

Rail freight loadings for week ended Jan. 24 were 715,690 cars, down 10,248 from prev. week, down 17% from 1930 week, and down 22.7% from 1929.

Van Sweringen interests propose plan for solving New England's transportation problems; would allocate several New England rails to the Van Sweringen-controlled Chesapeake & Ohio - Nickel Plate system.

Fed. Reserve reports Jan. surplus of funds in the NY money market was larger and more continuous than at any time in a number of years.

Rates on bankers' acceptances reduced 1/8% on all maturities, reversing recent rise.

Glass committee hears suggestion for revolving fund to partially pay depositors of closed banks; would not be guaranty fund, but would pay out immediately the part found to be justified by audit, thus avoiding much of the disaster typically following a bank closing.

M. Steuer makes first implication of criminality in Bank of US hearings; asks bank chair. Mitchell about approximately $70M in “slow and doubtful” loans, in particular about whether $250,000 of it was used for graft. Mitchell denied knowledge.

E. Meyer completes testimony before Senate committee investigating his nomination as Fed. Reserve gov.

Net US gold imports in Jan. were $43.4M vs. $1.8M in Jan. 1930.

Dun's reports Jan. business failures were a record 3,316 vs. 2,525 in Dec. and 2,759 in Jan. 1930; liabilities were $94.6M vs. $83.7M and $61.2M.

Refineries ran at 62.1% in week ended Jan. 31; stocks of gasoline increased 162,000 barrels to 41.657M; oil production was 2.086M vs. 2.111M prev. week, but down 509,000 from a year ago.

European unemployment estimated at 9M; total of $4B, or 3%-10% of total state budgets, to be spent in unemployment relief by various govts. European businesses face difficult problem of lowering wages in ways acceptable to strong unions and “paternalistic” govts. British PM McDonald says unemployment insurance fund depleted, govt. will need to ask Parliament for extra borrowing power this month; fund now owes $350M.

4,000 department store executives attending convention of National Retail Dry Goods Assoc. urged to fight impending nationwide sales tax campaign.

US textile exports in 1930 were $639.9M vs. $979.2M in 1929; imports were $600.7M vs. $1.002B.

Plate and window glass makers will show sharply lower earnings in 1930; suffering from lower demand, overcapacity, and foreign competition.

Travel on NY City mass transit lines in Q3 1930 was 752.1M passengers, down 3.8% from 1929. Holland Tunnel traffic in 1930 was 12.067M vehicles vs. 10.978M in 1929.

Chicago Rock Island and St. Louis San Francisco railways likely to postpone action on dividends to March meeting; stocks decline.

Montgomery Ward and Sears Roebuck reported Jan. sales declines of 9.3% and 14.1% vs. 1930; however, volume of goods sold was larger; fall in sales was entirely due to price declines.

Companies reporting decent earnings: Commonwealth Edison, Tampa Electric, So. New England Tel., Parke Davis, Missouri Portland Cement, US Gypsum, McCall (magazines), International Safety Razor, United Piece Dye Works, Viking Pump, International Match [Ivar Kreuger-affiliated].

At the galleries:

Georgia O'Keefe is showing her newest canvases at An American Place. Exhibit of El Greco works at the Albright Art Gallery in Buffalo. Jules Bouy, well known interior designer, is exhibiting an ingenious solution to the problem of installing panelled rooms in modern houses and apartments: a modern portable panelled dining room that can be erected over the present walls of any room in three hours, vs. the months required for old-fashioned panelling. "In solidity of appearance, it is comparable with the finest of built-in panellings"; it's also easily removable when moving.

Joke:

"Defendant (in loud voice) - Justice! Justice! I demand justice. Judge (rapping for order) - The defendant will please remember he is in a courtroom."

Tuesday, February 3, 1931: Dow 168.71 +1.16 (0.7%)

Assorted historical stuff:

Editorial: Letters recently received from farmers and rural bankers recall the extreme pessimism and resentment of the 1890's, "when populism stalked the land." As one Minnesota banker put it, "When circumstances dropped that gold into the lap of Wall Street, they did not recognize it as a stewardship but as a means to make more gold." These letters make it clear that "troublemakers in the House and Senate represent the folks back home more faithfully than is commonly realized." But farm communities must put aside emotionalism and realize that "capitalists, manufacturers, merchants, ... wage workers alike are taking the consequences of business reaction ... there is, therefore, no justification for civil war, in the political arena or anywhere else."

C. Mitchell, Nat'l City Bank chair., warns Glass committee that $3.5B bond issue for veterans' bonus would cause many small bank failures due to decline in bond values. Says current Fed. Reserve rates shouldn't be raised before recovery is clear, though in 1928-29 Fed. was slow to use higher rediscount rates to counter inflation. Cites capital gains tax as cause of both bull market speculation and bear market liquidation. Reasons for 1929 collapse in business included maldistribution of gold and war debts. Favors bringing all banks into Fed. Reserve system; against attempts to earmark credit for business rather than speculation; against most new regulation of bank affiliates.

Editorial: While the stock market speculation in 1929 probably had several causes, Congress should consider whether one of them was the capital gains tax, which may have made investors and traders with large profits unwilling to liquidate, instead holding on to stocks [on margin] and straining banks in the process.

Labor Sec. Doak charges many contractors on govt. projects have imported cheap labor and cut wages, contrary to agreements with Pres. Hoover.

Peru to seek moratorium on $100M foreign debt payments; govt. to follow conclusions of Kemmerer mission now studying country's finances.

German Reichstag to reconvene; Berlin stocks strong; political sentiment seen positive, though consideration of budget may prove difficult; Chancellor Breuning “has demonstrated his ability to control an unruly Reichstag and his determination to adhere to a sound program.”

Editorial by T. Woodlock: British Commission on Transport has common-sense recommendations that apply to the US as well: Railroads should stick to the rails, not enter highway transport field; lower fares to attract more passengers; reduce unnecessary competition; trucks should be taxed to pay their way but no more.

Income tax facts: Tax return forms have been sent out, but failure to receive a form doesn't relieve a person of the obligation to file on or before Mar. 16. Persons with income mainly from salary and wages, with total less than $5,000, can file form 1040A; others file form 1040.

NY State Chamber of Commerce opposes current NY City transit unification bill in spite of past support for unification, because plan would put the transit system under political control.

NY City's Third Ave. Rwy. [street railway] reports recent introduction of one-man car operation has actually lowered accident rates vs. two-man cars. Management attributes this to training and physical exams for one-man car operators; also, air-brake response time was reduced to 1 second from 3 seconds.

Col. J. Ruppert, NY Yankees owner, buys 36-story building that housed main Bank of US office for $9M (NE corner of 44th and 5th).

Survey of 475 Columbia Univ. graduates reports average annual income of $20,151.

34 major domestic airlines, operating over 50,000 miles of airways in North and South America, carried 385,910 passengers in 1930, up 133% from 1929; miles flown were 28.834M, up 42%. Less than 7% of the 53,000 trips scheduled were not completed; bad weather accounted for 91% of incomplete trips. There were 3.9M passenger miles flown per fatality. There were 1,113 US airports in use on Jan. 1.

Market commentary:

Market wrap: Stock trading very dull and in professional hands; stocks fractionally lower most of the day but recovered in late afternoon, leaving many stocks with net gains; some trading favorites including Auburn and Vanadium rallied sharply. Bonds mostly lower on dull trading; US govts. down; Peru bonds down sharply, but other foreign govts. steady to firm; corp. mostly down. Commodities quiet; grains mixed in narrow range; cotton little changed. Copper offered secondhand at 9 5/8 cents. Silver down 1/2 cent to new record low of 28 1/8 cents; dealers at a loss to explain decline.

Conservative observers continue to advise staying on sidelines, permitting "the market to indicate its next important movement before adopting a position."

More reasons that investors are staying on the sidelines: Congress still in session, political unsettlement, decline in silver, expected poor 1930 earnings, expected poor first quarter earnings.

State and municipal bonds, ordinarily very stable in uncertain times, have joined other bonds in reacting sharply over the past week due to the veterans' bonus. High-grade utility bonds have shown best resistance to recent pressure.

Reduced short interest in past week probably has weakened the market technically.

Car makers are said to be cutting expenses so that a 4M-car year will show satisfactory earnings.

Frazier, Jelke report their list of 100 representative stocks rose $1.557B or 7.5% in Jan. Largest gains were in amusements, 19.2%, oils, 15.4%, and rails, 10.5%.

Stocks of companies that recently reported poor earnings have been relatively steady, indicating the bad news had largely been discounted. However, shares haven't shown any tendency to rally either, as investors may be hesitating due to expected poor earnings early this year.

Broad Street Gossip: C. Denney, Erie Railroad pres., sees increasing public recognition and support for railroads; points out that in 1930, railroads invested $1B in their plant equipment though it wasn't needed to handle existing business. Many traders are now studying balance sheets closely, finding that many corporations did better in 1930 then one might conclude from the income statement alone. Managements of leading corporations including US Steel, AT&T, GE, NY Central, etc., are the most efficient in the world and should know what they're doing; "they continue to build, knowing that in time consumptive requirements will exceed present capacity. If everyone could forget the past and concentrate on the future, prosperity would be with us again in short order."

Baker, Weeks & Harden say indexes of economic activity declined almost uninterruptedly from April 1930 to end of Nov., but have shown a zigzag pattern since; business appears to have hit bottom; while recovery may not be under way, there's every reason to believe it's just a matter of time, probably a short time.

Harvard Economic Society repeats prediction business decline will end in first half, probably in current quarter, and “ensuing recovery will not be long delayed.”

W. Dickerman, Amer. Locomotive pres., says 1931 has "opened in satisfactory manner and things look much brighter for 1931, although progress will be slow for the first few months."

T. Watson, IBM pres., predicts not only IBM, but every “business appliance” co. will have a better 1931 than 1930.

G. Verity, Amer. Rolling Mill chair., discusses the depression. Business history of past 100 years is replete with “peaks of progress and valleys of depression”; fortunately, periods of progress are 3 to 4 times as long as depressions. Businesses “make hay while the sun shines” during active periods, then retrench and get rid of excess costs in depressions. Both progress and depression may become more intense as technology progresses. 1924-1929 was one of strongest periods in past 30 years; business began declining in July 1929 but was given a “hypodermic” in the fall through govt. and business action; this stopped the decline temporarily but it then had to enter the usual period of readjustment. Today, “business has paid the full price of its overdoing and has cleaned house thoroughly.” Consumption now exceeds production, wear and tear is going on as usual, inventories are low, and money is available; buying is ready to resume when confidence returns.

Economic news and individual company reports:

Testimony heard at Bank of US hearings on purchase of bank stock units using money loaned to bank affiliates by the bank; C. Stanley Mitchell, chairman, testified he had told Bernard Marcus, pres., and Saul Singer, exec. committee chair., this was "the worst banking practice he had ever heard of."

Chase National Bank retains title of largest in world, with deposits of $2.074B on Dec. 31 vs. $1.852B on Sept. 24. Of 75 largest US banks, 52 showed gains in deposits for the year and 43 showed gains since Sept. 24. Second largest US bank is National City, with $1.460B deposits; third is Guaranty Trust, $1.342B.

NYSE total transactions in Jan.were 42.5M shares vs. 62.3M in 1930 and 110.6M in 1929.

Opposition to oil tariff presented to Senate by A. White, Assoc. Industries of Mass. pres., and by H. Walker, representing the Amer. Automobile Assoc.

Preliminary estimate of 1930 domestic gasoline consumption shows 5% increase over 1929, down from 13.2% gain in 1929.

Canadian imports in 1930 were $1.008B vs. $1.299B in 1929; exports $883.9M vs. $1.182B. Canadian steel production in 1930 was 1.012B tons, down 26.6% from record 1929 level; Dec. total was 56,101 tons, down 22% from Nov. and 33% from Dec. 1929.

Cuban Pres. Machado orders limitation of 1931 sugar output to 3.1M tons, a cut of 33% from 1930, as part of world sugar curtailment plan.

Standard Oil of Indiana cuts quarterly div. to 50 cents from 62.5 cents, though previous div. was earned; says current oil industry situation requires highly conservative policy; co. may be concerned with effect of oil tariff on Venezuelan oil production.

Woolworth made noteworthy showing in 1930; sales and earnings were within 4.5% and 2.6% of record 1929 levels; profit on sales was 12.01% vs. 11.77%.

Companies reporting decent earnings: Penn Water & Power, Pacific Lighting, Wm. Wrigley, Mead Johnson (baby food), Lindsay Light Co.

Theatre:

Camille – Revival of play by A. Dumas, fils., starring Eva Le Gallienne. Gives a new up-to-date interpretation of the title character; “Camille no longer coughs. Instead, Miss Le Gallienne has laid her emphasis upon the more modern qualities of disillusion, half-mocking tenderness, and restrained emotionalism.”

Jokes:

"Irate Ball Player - I wasn't out. Sarcastic Umpire - Oh, you weren't? Well, you just have a look at the newspaper tomorrow."

'Why are you in jail again?' 'Mistaken identity.' 'Who did they mistake you for?' 'They didn't mistake me for anybody. I mistook a prohibition agent for a good customer.'

A Scotsman, having bought a radio set for his home, came back to the shop the next day with a dour face. 'What's the matter,' asked the salesman, 'doesn't your radio work?' 'Aye, after a fashion,' replied the Scotsman, 'but the tubes don't give enough light to read by.'