Saturday, March 7, 1931: Dow 179.73 -4.96 (2.7%)

Assorted historical stuff:

While the active govt. and private efforts to relieve unemployment in the current emergency are the stuff of front page news, it's less well known that a nonpartisan committee of 15 eminent figures from various fields has been making a long-term study of the problem. The body, known as the Committee on Recent Economic Changes, was set up by the President during the last depression in 1921; members include William Green, John Raskob, Eugene Meyer, and Owen Young. The Committee's fact-finding organization, the Nat'l. Bureau of Economic Research is getting help from many other govt. and private sources to put together a statistical picture of a full economic cycle. The idea is not to develop a system of rigid economic control, but to painstakingly start to develop an understanding of economic actions and reactions, to be applied by all in their own fields. Editorial: It's reassuring that this undertaking "which so many fervidly demand" has already been underway since 1921 with a group of such unquestionable qualifications, and that it has shunned publicity, preconceived doctrines, and extravagant promises.

Washington report: J. Raskob, while new to politics, seems to have a clear vision of where the Democratic party should go. In particular, he sees Republicans suffering badly from lack of organization and radical elements running wild, and by contrast is aiming for a coherent and efficient Democratic organization less under control of extreme elements. While Sen. Smoot's statement that a tax increase won't be needed next year was encouraging, test of this must await mid-March when returns are filed. It was good fiscal policy not to raise taxes this year in spite of the $500M deficit, but to continue running deficits would be another matter. Pres. Hoover will leave Washington for his first extended vacation since taking office; many govt. officials are likely to follow, leading to “good old fashioned Washington summer” when all but routine business is postponed; country may find this a rather welcome prospect. Glass financial inquiry will meet privately to draw up a tentative bill before hearings are resumed in the fall.

Indian truce seen benefitting both cotton industry and world trade in general. However, full details of the agreement haven't been announced, and road to establishment of new home-rule govt. “is strewn with pitfalls.” In addition, the agreement calls for raising duty on imported cotton cloth 5%, and it appears peaceful persuasion against buying of British cotton may continue.

Revolutionary leaders in Southern Peru agree to accept new govt. set up by Lt. Col. Gustavo Jimenez after he led troops into Lima and overthrew provisional govt. of Chief Justice Ricardo Elias.

Despite hard times, Turkey has begun construction of largest bridge in Asia, 488 feet long spanning the Euphrates River at El-Aziz.

Report from Argentina charges that the Prince of Wales and Prince George, on their recent South American tour to support British manufacturers, smoked exclusively American cigarettes.

Editorial urging end of the "tenant farming" system as practiced in the "old South," largely with black croppers growing cotton on a few acres, some plowing with a single mule. It would be economically sounder to operate farms as a unit with wage-earning farm hands, and introduce machinery and more diverse products.

As long expected, Farm Board chair. Legge resigns; Pres. Hoover appoints J.Stone, tobacco member of Board as new chair.

Some shrewd ex-servicemen now on Wall Street have been spotted taking the loan on their veterans' bonus at 4 1/2% and investing it in good stocks paying 6%.

Great Lakes Aircraft receives contract for 32 “bombing planes” from US Navy, to cost about $1M.

Agriculture Dept.'s successful "4-H Club," started to make farm life more attractive and prevent youths from migrating to overcrowded cities, has lately been adopted in Cuba, including organization of rural clubs for boys and girls similar to those in the US.

NY State Legislature considering bill to aid NY City transit co. unification; bill seen likely to pass as Mayor Walker makes speech citing crisis facing city with 8th Ave. subway nearing completion and desirability of avoiding direct city operation of that line.

John D. Rockefeller, Jr. forms organization to build “Radio City” between 48-51 St. and 5-6 Ave. in Manhattan; work on 68 story tower to begin May.

Market commentary:

Market wrap: Stocks were firm early, with utilities pushing ahead. "Pronounced unsettlement" developed about 11AM, starting with sharp breaks in some trading favorites including Auburn; selling spread to major industrials, rails, and oils. Attempted rally in early afternoon gave way to another wave of selling in the last hour, with the downward move picking up momentum and even utilities giving way. Bond market active, prices strong; US govts. firm on light trading; foreign govts. bouyant, with sensational move in S. American; corp. high-grade strong, while speculative and convertibles reacted with stocks. Commodities soft; grains down slightly; cotton off substantially. Copper unchanged at 10 1/2 cents, with little buying. Silver continued upward to 28 1/2 cents.

Conservative observers disappointed at yesterday's action; now advise taking any opportunities to reduce long positions and not buying until “it has been demonstrated that a new trading range has been established.”

Unexpectedly strong success of large Treasury and NY City financings has buoyed bond market generally, and municipals in particular; Dow avg. of 20 municipals is down to a 3.92% yield vs. 4.01% two weeks ago, while the just issued NY City 4 1/4% bonds are down to a 4.05% yield.

Berlin stocks strong in past week, reaching mid-Nov. level.

Weakness in oil stocks attributed to reports of price cutting.

US Steel unfilled orders, to be released Tuesday, expected to show a decline based on relatively small buying in Feb.

Bank statements show no material improvement in business; little commercial demand for credit seen, whereas commercial loans should normally be increasing in preparation for spring business. Fed. Reserve banks continue holding abnormally high $600M in govt. securities, preventing general bank credit from declining unduly. Decline of $8M in brokers' loans was less than expected considering past weeks stock market reaction.

Broad Street Gossip: Business news is a little better, though no lines have shown big gains. Copper, steel, autos and textiles all report some improvement. Sentiment, however, is 100% better than a few weeks ago, and this is bound to help business if it continues. Steel industry is growing because of new applications, such as "stainless steel" that has a gloss so perfect it can be mistaken for polished sterling silver. One reason for the sensational decline in silver may be that industry's laxity in finding new improvements, such as the non-tarnishable silver recently perfected by International Silver. "Good ground exists" for belief some steel prices will be advanced shortly.

Economists encouraged by better political news from India and Europe (French-Italian agreement), though China remains a sore spot.

Baker, Weeks & Harden note bull-bear dispute on whether recent rally will last. Believe end of fear that was dominant in Dec. has improved spending on clothing, cars, furnishings, and other semi-luxuries; also see slight improvement in building. Too soon to tell if business improvement will become strong in late spring or “if we must wait until autumn for an approach to really good business.” Given public confidence and good market technicals, stock buying will probably come before strong business recovery.

AFL monthly business survey: no sign yet of general uptrend, but increasing activity in many industries; rise in unemployment apparently checked, but drastic wage cuts have occured; “seems likely ... we are at or near the bottom of the depression”; next few weeks to show if revival starts in spring or is delayed several months.

Economic news and individual company reports:

Bradstreet's weekly review reports continued slow but steady improvement in wholesale and retail trade; some of gain may be due to a month of unusually mild weather. Dun's reports continued “undercurrent of better feeling in various quarters,” though improvement is irregular and business failures unusually high.

NY banking superintendent Broderick denies reports he has approved Rosoff plan for reorganizing Bank of US; however, he's expected to give his opinion on the plan this week. M. Steuer says has communicated with lawyer for Mr. Kugel, former bank VP, who denied reports Mr. Kugel was raising $10M from bank directors to help in reorganization.

Glass committee receives report from Comptroller of Currency blaming Nat'l Bank of Kentucky failure on excessive loans to Rogers Caldwell and associates, with bank stock as collateral. Bank officer conduct was first criticized by the Comptroller in 1925.

Market value of all NYSE-listed stocks Mar. 1 was $57.1B vs. $52.1B Feb. 1, $70.8B in 1930, and $71.9B in 1929.

State financing board says Fall River, Mass. [recently defaulted on loans] must cut salaries of all officials from mayor on down, cut all frills from every municipal department, and collect overdue taxes for 1930 and preceding years.

Oil & Gas Journal reports in spite of general curtailment in oil industry, oil refining had a record year of expansion with 26 new refineries put into operation, bringing total to a record 388; in addition, many existing refineries were modernized and had their capacity expanded. Texas Gov. Sterling sends telegrams to Pres. Hoover and John. D. Rockefeller, Jr., warning that Standard of Indiana's drastic crude oil price cut may ruin mid-continent oil industry. As expected, cos. in several other areas followed the Standard of Indiana price cuts. Standard of Calif. cut gasoline prices 2 cents/gallon for third time in 10 days.

Italian govt. vigorously denies reports French-Italian naval agreement will be followed by $100M private French bank loan to Italy; says new external loans would be contrary to govt.'s plan for economic rehabilitation.

Spanish currency depreciation sharply reduced trade deficit, from 629M pesetas in 1929 to 148M in 1930; “while this method undoubtedly has a salutary effect upon the trade balance of a country, it is hardly to be recommended by sound economists”; trade gain is offset by wide fluctuations in currency value not regulated by ability to ship gold; efforts now being made to return Spain to gold standard.

Negotiations for Romanian loan successfully concluded in Paris; amount cut to $26M from $40M; French, Swiss, Swedish, Czechoslovak interests participate.

Mexico decrees embargo against all foreign wheat.

Detroit employment index on Feb. 28 was 81.2, vs. 78 on Feb. 15, 76.5 on Jan. 31, and 106.5 on Feb. 15, 1930.

Hog prices have declined steadily through winter killing season; avg. price at Chicago week of Feb. 28 was $6.89 vs. $6.92 prev. week and $10.76 a year ago.

Total Massachusets debt as of Dec. 1 was $62.124M, down $119,450 for the year.

Manhattan new building permits for first 2 months were $21.5M vs. $25.1M; improvements $7.5M vs. $4.8M.

Company reports since Jan. 1: 186 companies reported higher earnings vs. 1930 and 741 lower; 712 dividends unchanged, 40 increased, 143 cut.

Companies reporting decent earnings: Providence Gas, RKO (movies).

Theatre:

Give Me Yesterday - Bittersweet play by A.A. Milne on the price of success. R. Selby Mannock, MP and cabinet member, has waged a carefully planned 20-year campaign for political success, including marriage to a woman of importance useful for his political intrigues. A chance encounter with a boyhood friend who remarks "success has closed in" on Mannock is followed by a return to his hometown to make a speech, where he sees his childhood sweetheart sitting in the garden as he's always remembered her. Shaken, he decides success has meant sacrificing too much and decides to go away with her. Returning to London, he resigns his cabinet post. However, this is taken as a wily political ploy and the PM offers him the post of Chancellor of the Exchequer. At length he decides to accept the position of more power, but bitterly, and with longing toward his lost youth. Play contains some of Mr. Milne's inimitable whimsy, including a dream scene in which youth and maturity fight it out.

Joke:

Young Man at the Lunch Counter - I'd like a couple of hard-boiled eggs to take out. Waitress - You'll have to wait. Mamie and I don't get off until ten.

Poem submitted by writer - 'Why Am I Alive?' Response by editor - 'Because you sent the poem by mail, instead of delivering it in person.'

Friday, March 6, 1931: Dow 184.69 +3.73 (2.1%)

Assorted historical stuff:

"As the skirts go, so goes the market." Prof. B. Brownell of Northwestern Univ. observed to his students that "when skirts grow longer, an economic depression is approaching. And conversely, when skirts grow shorter, better times are coming." As example, cites "extremely short" skirts of early 1929, when boom was at its height, and "long-skirt vogue" that started in the fall, immediately followed by the crash. Prof. Brownell said he could explain this phenomenon, but chose not to "because he wanted students 'to do a little brainwork themselves.'"

Editorial: Business men may damn the 71st Congress with faint praise. It did nothing to help business recover and indeed set up two or three serious drags on that recovery, such as the veterans' bonus, but things could have been much worse. Now that it's gone, for the next 9 months "the country knows rather definitely the load it must carry on the upgrade to better times; it can and will adapt itself thereto." Detroit auto dealers report stimulated business due to veterans' bonus.

Terms of Indian truce include release of political prisoners and discontinuance of boycott as political weapon, though nonviolent picketing against foreign goods may continue. All-India Congress committee signs truce orders in spite of reported dissension from members who believed Gandhi had “sold out to the British.” Local banking circles believe agreement will increase business in interior of India, benefitting silver and cotton.

Washington report: Pres. Hoover rode down Pennsylvania Ave. to be inaugurated Mar. 4, 1929, under a steady downpour that turned out to be an omen. He rode down that route again on Mar. 4, 1931 to be present at the adjournment of Congress with the sun coming out; it remains to be seen if that was a better omen. Possible Democratic candidates in 1932 include three New Yorkers: Gov. Roosevelt, the popular choice but possibly too liberal for party leaders; Owen Young, the leaders' choice but avowedly not a candidate; and Alfred E. Smith, who retains a loyal following. J. Raskob speaks to Democratic Nat'l Committee; proposes Constitutional Amendment allowing states to produce and sell liquor within their own borders; warns against attacks on business, particularly utilities; proposes plan to aid mergers by allowing FTC to grant antitrust immunity. Interior Sec. Wilbur considering national oil industry conference. Pres. Hoover plans tour of 20 or more states sometime in June.

Sen. Smoot, Senate Finance Committee chair., says there will be no tax increase in spite of anticipated $500M deficit; sees signs of business improvement, which should lead to higher revenues.

Veterans' organizations urge universal drafting of men and industry in wartime “to take the profit out of war.”

Natural gas discovered in NY State counties of Steuben and Tioga, providing $1M in lease fees to local farmers.

NY Merchants Assoc., following conference with Mayor Walker, submits proposed new elevator code providing for increased safety, removal of speed limit on elevators, and operation of two separate elevators in the same shaft.

NY State dog license fees brought in $997,471 in 1930, covering 417,692 dogs.

Whaling groups discussing plan to curtail overproduction of whale oil; about 3M barrels will be produced this season vs. 2.5M in 1929-30.

Northeast suffers disastrous tides; “wall of water” causes millions in damages in New England; Nova Scotia tides reportedly highest in 60 years.

AT&T report: Within a short time, Bell system will be connected with all the world's countries except Russia. Teletypewriter equipment progressing, notable use is by police departments. Important advances made in television, but still so complicated and expensive that commercial possibilities are uncertain.

"Boys who went to sea half a century ago experienced the last adventures offered by the ocean ... science has transformed the sailor's career from one of uncertainty to one of mechanical routine, comparative safety, and monotonous system."

Market commentary:

Market wrap: Stocks weak in early trading, rails under particular pressure; however, utilities remained strong and effective support came into leading industrials; a good rally developed through mid-day and afternoon. Bond trading active; US govts. dull, steady; foreign strong; corp. high grade steady to firm, others irregular. Commodities mixed; grains generally steady, corn higher; cotton down moderately. Copper remains at 10 1/2 cents, buying low; little change expected in next week. Silver rises to 27 7/8 cents, highest since early Feb., on favorable Indian news.

Conservative observers see a further technical rally, advise using it to reduce long positions; profitable trading range seen for near future.

Oil shares were fairly steady in spite of the sharp price cut by Standard of Indiana. American Can was a standout among the industrials.

A large short interest is evident in demand for stocks in the loan market and private borrowing from brokers; some traders have been fighting the rally steadily. Supply of stocks may also be tight due to reluctance of some holders to loan stocks out. With Congress adjourned, an event many big traders were said to be waiting for, next market move is considered highly significant. Rally to new high ground would be “bullish signal of first importance.” A potential buying demand is thought underlying the market in outsiders who took profits during the Feb. rally on brokers' advice, and will be looking to repurchase.

Bears on utilities dismissed recent strength as "window dressing" before new financing by some important utilities; pointed out high earnings multiples enjoyed by many utilities. Bulls pointed out relative earnings stability shown by utilities in 1930. Wall Street studying steel industry conditions; would prefer industry take action to improve earnings by raising prices rather than cutting wages. Rail equipment buying has been negligible so far this year; outlook unlikely to improve while rail revenues remain poor.

Noble & Corwin say New York bank and trust stocks are good buys for the next year, although it would be nice “if buyers of bank stocks could get a little more information about their properties,” particularly regarding earnings and security affiliates.

Analysis of two International Match [Ivar Kreuger] bonds; some are skeptical that the company depends on good faith and stability of various countries, but “so far nothing has developed to raise any question” regarding soundness of foreign loans or match concessions.

Editorial by T. Woodlock: The now dead Parker Amendment to the Interstate Commerce Act would have cast a very broad net in cracking down on railroad holding companies. It would have made the error of giving the already powerful ICC vaguely defined additional powers, thus encouraging its bureaucratic tendencies and possibly encroaching on private rights. "It is to be hoped that this piece of attempted law-making will stay dead."

Farm Board chair. Legge sees some cuts in acreage of cotton and wheat planting, but not enough to correct supply situation.

Broad Street Gossip: Market has had "one of those 'healthy reactions' which always make some traders feel a little ill." At the close Thursday, the Dow was 23.24 above the 1931 low but 9.67 off the high. Opinion differs on whether the reaction has exhausted itself. Earnings and dividend reports haven't been good, but current business news has been a little better. G. M.-P. Murphy & Co. note some room for growth in European auto ownership; while US has one motor vehicle per 4.7 people, Britain and France have one per 31 and Germany one per 98. Oil production continues lower, but that doesn't seem to be helping the industry situation; gasoline in storage continues climbing.

T. Watson, IBM pres., says both foreign and domestic business improved over 1930, looks forward to another record year; “we feel the bottom of the depression has been passed and that we are on our way to a gradual recovery.”

Economic news and individual company reports:

A. Napier, Bank of US director, under examination by M. Steuer, refuse to admit he was a director “who did not direct,” but admitted he did practically nothing to ascertain what was going on in the bank, relying on information given him by executives. J. Durst, another director, testified several loans, that according to board records had been approved by the directors, had in fact not been reviewed at the board meetings. G. Egbert, deputy banking superintendent, testified bank officials were charged with flagrant dishonesty in a June 1929 bank examiner report, and superintendent Broderick was aware of this. Editorial: Testimony of J. Broderick, NY banking superintendent, on events leading to the Bank of US failure was illuminating. In hindsight, it would have been better to close the bank much earlier, but it was his duty to exhaust every other possibility first; it should also be remembered he was operating in “one of the most trying periods in banking history.” That said, he can be faulted for not cracking down harder, for example by insisting that some transactions that “were dishonest, even if inside the letter of the law, be at once undone.” Mr. Broderick has proposed changes in banking law to increase his office's power, but it doesn't seem they would have helped in this case. New laws should be enacted “as the need for them develops, but the value of legal machinery will always depend on the skill with which it is used.”

Representatives of leading banks continue opposition to large list of amendments to state banking law proposed by superintendent J. Broderick; say they approve of some of the amendments in principle but want them postponed at least a year for further study.

Total known security loans at end of Feb. were $7.778B, down $81M in month and down from peak of $13.205B on Sept. 3, 1929. This is roughly the same as the Aug. 1927 figure, and stock prices are also at about the same level. [This is the most complete estimate of all loans on securities.]

Fed. Reserve reports money in circulation Mar. 4 up $6M to $4.575B, total Reserve Bank credit outstanding up $4M to $908M. Member banks in NY City report brokers' loans down $8M to $1.790B; loans on securities to non-brokers down $26M to $1.844B; this figure has declined continuously since start of year.

Call money rose to 2% for the first time since Jan. 2; however, this was attributed to temporary mid-month factors.

Bank of America estimates a record high of over $2.5B will be spend on street and highway construction this year, vs. $2.2B in 1930.

Scrap markets continue irregular, with buying in Chicago but quiet markets elsewhere and price weakness in Detroit.

Representatives of shipping cos. denounce proposal to extend powers of ICC over steamships; believe commission is "railroad-minded" and would favor rails in setting competitive rates.

Australia's 1930-31 wheat crop estimated largest in history at 190M bushels, allowing exports of about 140M.

Canadian Nat'l Railways 1930 deficit estimated at $30M.

AT&T 1930 net $9.22/share vs. $12.57. Net gain of 122,500 in number of telephones, vs. 821,400 added in 1929. Plant expenditures $585M, about the same as the record 1929 level; however, 1931 is planned to be reduced to $450M.

NY Central's year off to poor start; expected to roughly break even in the first quarter, with management unable to cut expenses enough to make up for sharp traffic decline. Freight traffic on this road is a good business barometer, since it serves the automotive and steel industries. Amer. Rolling Mill (sheet steel) omits dividend; 1930 net 3 cents/share vs. $4.40. Woolworth Feb. sales were $19.4M, down 3.2% from 1930.

US Tobacco's unexpected dividend increase gives it a yield of 6 1/2%; co. has reported increased earnings every year for the last 16.

Companies reporting decent earnings: General Foods, Pillsbury Flour Mills, Southern Calif. Edison, Northern Indiana Public Service, Florence Stove, Homestake Mining, Alaska Juneau Gold Mining.

Movie:

Ten Nights in a Bar-Room - "Old [from 1854] dramatic diatribe against the ravages of rum possesses considerably more vitality in its new talking picture version than one might expect." Little Mary attempts to save her drunken father from "complete degeneration"; picture produced by a small independent company known as Road Show Productions. "After the numerous burlesque versions of this old play, it is interesting to witness a serious presentation."

Jokes:

Crashed Airman - I was trying to set a record. Farmer - Well, you did. You're the first man in these parts who climbed down a tree without climbing up first.

Small Boy - What is college bred, pop? Pop - they make college bread, my boy, from the flour of youth and the dough of old age.

Thursday, March 5, 1931: Dow 180.96 -2.80 (1.5%)

Assorted historical stuff:

The 71st Congress adjourned at noon Wednesday; the 72nd will convene in Dec., giving a 9-month respite from “legislative considerations.” Pres. Hoover obtained special ruling from Att'y Gen. Mitchell allowing him to abandon custom of signing all bills before adjournment; this was physically impossible due to a final rush of 400 bills sent to him in 36 hours. Congress failed to pass significant new regulation of utilities, rails, or bus transport; the only oil legislation passed was an order for a Tariff Commission inquiry.

This Congress was the most expensive peacetime one in history, appropriating about $10B in 3 sessions, excluding the veterans' bonus; much of the increased spending was due to the Farm Board. It first met in special session in April 1929 to carry out Hoover campaign promises on farm relief and tariffs. Major laws passed included Farm Relief Act creating the Farm Board, the Hawley-Smoot tariff, and the veterans' bonus. Important economic investigations included the ongoing Glass financial inquiry and the inquiry into rail holding cos. Outstanding clashes with Pres. Hoover included failure to confirm John J. Parker to Supreme Court and attempt to recall nominations of three Power Commission members.

Optimists expect Pres. Hoover may take advantage of 9 month freedom from Congressional interference to advance plans to stimulate business. Eastern rail consolidation may proceed through the ICC, without Congressional interference. Another likely area for action is stabilization of the oil industy by curtailing domestic production together with import restriction.

Mahatma Gandhi and Lord Irwin sign agreement ending civil disobedience movement after almost a year of turmoil for the 320M living in India. Indian commercial circles jubilant, anticipate brisk trade revival. News seen bullish for cotton and silver.

Terms of France-Italy naval agreement reportedly will limit construction to 22,000 tons/ year vs. over 40,000 previously planned; at end of 1936 France will have total tonnage of 670,000 and Italy 441,000.

Soviet govt. to present figures showing 8.250M peasant families now collectivized, 6M in 1930 alone. Difficulty looms in insufficient tractors.

Reports in London of impending revolution in Monaco to replace Prince Louis II with Prince Pierre, his son-in-law.

Editorial: With Muscle Shoals plan to "'dump' electricity on the market a la Stalin" dead for a year, Gov. Roosevelt now has a rare opportunity to set a model for development of water power through public authority. He should take the majority advice of his St. Lawrence power commission, and follow a plan in which govt. owns the generating plant but may distribute power through existing utilities. If we must have state ownership of hydro power, this would be a sound way to do it.

Combination of 6 construction companies makes low bid for Hoover Dam construction of $48.9M.

Three men who died last year in the US left over $1M in life insurance policies.

Increased purchasing power of the dollar is most evident in the "popular-priced restaurant field." Many large restaurant chains in NY City are now offering dollar dinners, and competing with each other on number of courses, extras, etc. One large chain is including a ten-cent after-dinner cigar.

Port of NY Authority announces new Hudson River [later George Washington] and Kill van Kull bridges may open later this year, ahead of scheduled 1932 dates.

NY Appelate Court hearing two cases brought by IRT seeking fare hikes from current 5 cents to 7 cents or 10 cents.

Dr. H. Eckener, Graf Zeppelin commander, here to visit Goodyear officials; says German Zeppelin Co. has definitely concluded helium is only practical gas for commercializing dirigibles; Zeppelin to make scientific flight over Polar sea, also travel to Brazil to attempt establishment of 3-day Germany-Brazil airmail service.

A. Einstein on last day of 3-month visit here; to sail at midnight for Germany.

Special New Haven RR train carrying Connecticut legislators to vote against law for eliminating car-rail crossings crashes into stalled car on the way to the vote.

Market commentary:

Market wrap: Stocks opened with rails under pressure; weakness later spread to leading industrials. Utilities declined with the market, but then staged a recovery starting around noon; however, weakness in the rails and industrials continued through the session. Bond market sees rally in US and foreign govts. after successful NY City sale; corp. continued irregular though high-grade were generally firm. Commodities strong; grains firm, corn up strongly; cotton up substantially. Copper still at 10 1/2 cents, domestic buying heavier.

Conservative observers still advise staying on sidelines, since market hasn't been able to carry through on rallies.

Discouraging news included a poor carloadings report from NY Central and a number of dividend cuts and omissions by rails and industrials. Possible dividend cuts were also rumored by NY Central and Baltimore & Ohio RR. On the other hand, some observers say such dividend cuts are common at end of depressions. Utility interests were pleased by adjournment of Congress without enacting any restrictive legislation, and by the Muscle Shoals veto.

Prospect of unfavorable rail earnings was ignored when stocks were rallying, but is now gaining attention; “Wall Street always accepts as influential the news which is in line with the trend of prices.” Last freight loadings report showing smaller (13.7%) decline vs. 1930 was misleading since the 1930 week contained Washington's Birthday.

Market observers have noted stiff resistance to reactions in the past 10 days; attributed to outside buying and short covering.

Broad Street Gossip: Reports that US Steel only earned a few cents/share in Jan. shouldn't have been a surprise with production and prices still at low levels; it's unlikely Steel will cover dividends until production is considerably higher. Market has been going through a considerable reaction, but this is natural after the rally since start of the year; whether the decline is a minor downward move in a major upward swing remains to be seen. Business has been improving gradually over the past few weeks, and confidence seems to be gaining. However, there have been no big gains and it may not be clear until end of the month if the upswing is merely seasonal. One positive factor is an improved banking situation; there have been few recent failures and scores of closed banks are reopening.

J. Dickerman, FTC utility expert, tells FTC inquiry New England electric industry is burdened with many obsolete plants, increasing costs vs. centralized sources.

R. Matthews, Union Oil of Calif. VP, tells annual stockholders' meeting present net price of gasoline is practically at cost of production.

Economic news and individual company reports:

Bank of US investigation hears testimony by J. McArdle, accountant for the bank. Under examination by M. Steuer, he agrees a transaction in which affiliates paid off an $8M loan to the bank provided no benefit and was done entirely to improve appearance of the bank's balance sheet for upcoming examination. After the hearing, M. Steuer told reporters plans for reopening the bank were “Utopian” and all assets should be liquidated immediately; he urged directors, and if necessary stockholders, to make up funds needed to pay depositors in full.

Merchants Assoc. of NY announces opposition to enactment of 19 banking reform bills introduced in NY legislature by bank superintendent J. Broderick, who defends bills as “for the best interest of all concerned” and asserts “banking is a quasi-public function and should be regarded as such.”

Fed. Reserve annual report: “For the banks of the country the period of 15 months ended in Dec. 1930 was one of readjustment and liquidation.” Important problems becoming clearer; but won't recommend solutions since Congressional committees are investigating. Bank suspensions in 1930 totalled 1,345 with deposit liabilities of $865M; highest previous total was $272M in 1926. Of total, 187 were member banks. 147 banks were reopened, with deposits of $61.6M. Year marked by lower commodity prices, money rates, and demand for credit, all typical of business depressions. Easy money policy led to year-end rates for bankers' acceptances 1 7/8%; commercial paper 2 7/8%; call money 2%. $310M was added to gold holdings in 1930, bringing them to $4.6B, close to a record.

Anxiously awaited $100M NY City long-term 4 1/4% bond sale very successful in spite of huge Federal sale Monday; issue sold for 101.977. Comptroller Berry's statement: “the splendid premium realized for the city is highly gratifying ... success will undoubtedly be another stimulating influence in the return of business confidence.”

Steel production continues gradual improvement; in week ended Monday rose over 53% vs. 52% prev. week, 50.5% two weeks ago, 79% in 1930, and 82% in 1929; US Steel rose to almost 55%, highest rate this year. Responsible steel interests believe earnings picture has deteriorated to the point that something must be done to restore profits in the near future; would prefer raising prices to cutting wages, although some unofficial price cutting has been reported in the past few weeks. Iron Age reports machine tool trade improving slowly and irregularly, with some markets reporting declines; inquiries fairly heavy but not necessarily translating to buying.

Standard of Indiana cuts crude oil purchase price 40 cents to 67 cents/barrel; cuts Midwest gasoline 2 cents/gallon. Standard of Ohio raises gasoline 1 cent/gallon.

US electric output for week ended Feb. 28 was 1,628 GWHr, down 4.8% from 1930, vs. a 3.6% decline prev. week and 4.7% two weeks ago.

Justice Dept. responds to Sen. Capper's report of threatening food monopoly; says already investigating bread and meat prices.

Cotton goods sales continued improvement this week; price advances have been numerous.

Dutch currency declining due to low money rates; may lead to gold exports from Holland.

France reported record 1930 trade deficit of 9.515B francs.

Navigation at head of Great Lakes may open April 1, earliest in 29 years.

ICC to hear 2 days of arguments by California Fruit Growers arguing for reduced rail rates on deciduous fruits other than apples.

American Chicle (chewing gum) stock about 45; earnings in 1930 were a record $4.42/share; earnings have increased every year since 1921; dividends paid in 1930 were $2 regular and $1 extra; no debt or preferred stock ahead of common. US Tobacco raises annual dividend to $4.40 from $4.

Companies reporting decent earnings: Electric Power & Light, Engineers Public Service, Wm. Wrigley, Bickford's (low priced restaurants).

Theatre:

Appearing at the Palace - Eddie Dowling brings back his "Youngsters of Yesterday" show, assembling vaudeville stars of 40 years ago. Performers include Josephine Sabel reviving the Spanish-American War number "There'll be a Hot Time in the Old Town Tonight," Lizzie Wilson singing her best known song "Schnitzelbaum," Dave Genaro dancing a cakewalk, and Tom Harris, who tap-danced for Lincoln.

Joke:

"'I've got a pretty distasteful job before me. ... Mrs. Newrich employed me to look up her family tree, and I've got to inform her that one of her relatives was electrocuted.' 'Why worry about that? ... Just write that the man in question 'occupied the chair of applied electricity at one of our public institutions.'"

Wednesday, March 4, 1931: Dow 183.76 -0.62 (0.3%)

Assorted historical stuff:

Gov. Theodore Roosevelt, Jr. of Puerto Rico makes urgent appeal to US citizens to save 200,000 Puerto Rican children from slow starvation; “they are intelligent, industrious and loyal American citizens, but have been the victims of poverty and disease.” Senate passes resolution directing that $5M in drought relief funds be loaned to destitute farmers without security. Gen. F. Hines, veterans administrator, says Veterans Bureau now handling 10,000 bonus loan applications daily, will ramp up to 50,000; says most of the needy cases have been taken care of.

As expected, but after some delay, Pres. Hoover vetoes Muscle Shoals bill; calls it govt. ownership measure; fears political instead of business management; past record of the project is “complete demonstration of the ineptness of the federal govt. to administer such enterprise.” Remedy for abuses in power industry is regulation, not govt. ownership. Sen. Dill (D, Wash.) counters that power cos. are able to circumvent Federal and state efforts at regulation. FTC continues investigation of public utilities, taking up the New England Power Assoc.

Washington report: House passes bill favored by Fed. Reserve making it Federal offense to circulate false rumors concerning the Fed. Reserve. Acrimonious Senate session lasts until 3AM Tuesday; decides to tax all oleomargarine, whether naturally or artificially colored. House passes bill giving govt. workers Saturday afternoons off. House approves tariff commission inquiry into oil prices; other oil-related inquiries pending. Pres. Hoover signs bill requiring contractors on govt. work to pay highest prevailing wage scale of local communities.

Editorial on conference being called by a group of Senators “all classified politically as insurgent or progressive,” inviting a select list of politicians “marked by a tendency to break through their party fences.” Taking Sen. Norris at his word that the aim of the conference is not to form a third party but “to evolve a program that would be beneficial to the entire people,” this would be welcome. It's about time the “opportunist and irresponsible political sniping” that has been practiced by the Congressional insurgents be replaced by a concrete and coherent program.

M. Gandhi and Sir G. Schuster advance in negotiations toward expected Indian peace agreement; people living along sea coast are to be allowed to gather, make, and sell salt instead of buying it from British monopoly interests.

Dr. H. Schacht, former Reichsbank pres., says only international cooperation can overcome "present economic and moral crisis." Presents plan including revision of all international war debts, Allied and German; revocation of Versailles Treaty clause on German guilt for war; and restitution of colonies taken from Germany. Says world commerce needs expansion, not decrease; calls for increased international credit. Dr. H. Luther, Reichsbank pres., contradicts Dr. Schacht, reaffirms German adherence to Young plan; German stocks, bonds rally.

France reportedly may back loan to Italy as result of recent naval agreement.

AFL and other interested organizations to press for stricter bans on products of convict labor.

A knock-down drag-out figures-blazing editorial showdown between T. Woodlock and Walter Parker attempting to settle once and for all the inland waterway transportation question.

NY Trust reports newspaper circulation has increased 36% since 1921, or twice the rate of growth in population. Combined circulation of all US morning and evening papers is now over 40M, and over 28M Sunday newspapers are sold.

Senate passes House bill making Star Spangled Banner official national anthem.

First Ave. Association files statement with NY Mayor Walker urging construction of 2nd Ave subway before the proposed 6th Ave subway is built.

60 story skyscraper erected by Walter Salmon at 42nd St. and 5th Ave. was opened.

St. Louis is home to one of the stranger depression communities - Tanktown, a group of 75 men living in brewery tanks discarded due to Prohibition. The mayor of the group, who acts as spokesman, lives in the largest tank.

London's Big Ben is one of the largest and most accurate clocks in the world. The controlling device is a tray fixed about halfway down the pendulum. When the clock is running slow, a halfpenny is placed in the tray, making the pendulum swing slightly quicker; the process is reversed when Big Ben is running fast.

Market commentary:

Market wrap: Stocks opened under pressure and moved uncertainly in the morning, but resistance developed on reactions; general list turned relatively steady in mid-day, though heavy selling took place in some individual stocks that suspended dividends; rally developed in afternoon, and bull pools resumed operations in trading favorites including Auburn, Case, and Worthington; some weakness developed near the close. Bond market dull; US govts. very quiet, slightly up; European strong, S. American mixed; corp. dull, irregular. Commodities firm; grains mostly higher; cotton up slightly. Copper unchanged at 10 1/2 cents; buying declined.

Conservative observers "inclined to permit the market to prove its ability to absorb profit-taking before again adopting the policy of buying stocks on reactions."

Market appears to be meeting resistance on each end of its current trading range.

Wall Street anxiously awaiting adjournment of Congress; industrial leaders are thought to have been inhibited due to fears of harmful legislation, particularly in the public utility field.

More cautious public attitude seen; some pools have not been able to attract a following recently, and when public has entered the market it has been for standard stocks, in line with prevailing advice from leading brokers. Several firms report customers taking profits in past few days.

Dow Theory adherents growing a bit concerned over recent "reactionary tendencies" in rails. To recap, on Feb. 24 both rails and industrials had recovered about 50% of the ground lost on the late 1930 break; further progress would have been highly bullish, indicating a more-than-just-technical recovery. Some resistance at that point was natural to consolidate gains, but action of the rails since Feb. 10, and particularly in the past week, may indicate a more serious roadblock. Rail weakness is particularly worrisome recalling their earlier weakness in April 1930, which foreshadowed a general market swoon.

Broad Street Gossip: List of "non-progressive" industries unable to make headway even in prosperous times, and therefore unable to treat investors well: coal, textile, sugar, leather, paper, railroad equipment, rubber, meat packing, fertilizer. These include some of the largest industries in the world; poor conditions mainly due to "overproduction or unwise competition." Paine, Webber reviewed rather grim 1930 year for the rails: revenues lowest since 1919; operating expenses cut to lowest since 1918; fewer passengers than any year since 1906; passenger receipts off 44.2% from peak year of 1920; net operating income lowest since 1922.

Editorial: Senate committee's report on "alarming tendency" toward monopoly in food is not very convincing or alarming. It seems to claim retail prices should decline in proportion to raw material, which is only a small percentage of costs. Also, it inconsistently blames high bread prices on too few large bakers but high meat prices on too many small retailers.

D. Del Rio of Central Hanover Bank praises Colombia's determined attack on economic problems; has drastically cut govt. spending; Colombian coffee still provides good profit margin due to superior quality.

Edsel Ford predicts all manufacturers will adopt shorter work week as means of meeting unemployment problem.

G. Swope, GE pres., cautious on predicting improvement, though believes “conditions will be no worse.”

Economic news and individual company reports:

Leading auto companies are increasing production schedules in March by 20% or more over Feb. due to increased retail demand. Executives cautious as to whether upturn in sales was due to seasonal trend, unusually good weather, or real revival; focusing on keeping production strictly in line with sales. Second quarter will be critical, but year so far has been better than expected.

J. Broderick, NY superintendent of banks, testified at Bank of US investigation regarding attempts to prevent failure and arrange merger with other banks. Attributes failure to ill-advised previous mergers and real estate policy. Atty' Gen. Bennett and D.A. Steuer say they're working on reorganization plan; believe bank directors should contribute funds toward reopening.

Rail freight loadings for week ended Feb. 21 were 713,938 cars, down 6,751 from prev. week, down 13.7% from 1930 week, and down 21.1% from 1929.

Refineries ran at 63.5% in week ended Feb. 28; stocks of gasoline increased 1.184M barrels to 44.792M. Crude oil production in week ended Feb. 28 was 2.103M barrels/day, down 55,673 from prev. week and 516,087 from a year ago. Standard Oil NJ cuts tank car gasoline 1/2 cent to 7 cents/gallon.

Treasury's plans for March 15 financing "radically changed" by veterans' bonus; original offering of $1B long-term bonds at 3 1/4% replaced by $500M at 3 3/8%, with remainder in short-term issues; plans for necessary reduction of short-term debt now uncertain. Fed. Reserve says Feb. money markets slightly firmer, but no indications of unusual business demand that would materially affect rates. US gold holdings gained $70.5M in first two months.

New Feb. bond offerings were $147.0M vs. $602.4M in Jan. and $344.9M in Feb. 1930; drastic decline attributed to veterans' bonus agitation.

Agriculture Dept. reports farm prices of agricultural products were 90% of prewar level Feb. 15, vs. 94% a month previous and 131% a year previous.

Railway Age reports 24 freight cars ordered from US makers vs. none in Jan. and 15,931 in Feb. 1930; no passenger cars in Jan. or Feb. vs. 134 in Feb. 1930.

French govt. commission inquiring into fraud in Oustric bank failure seeks to have immunity lifted from cabinet minister Peret, who has persistently refused to testify.

Large London brokerage Wheeler & Co. fails; attributed to decline in securities; impact limited so far.

C. Schwab, Bethlehem Steel chair., asks stockholder approval for executive bonus system [subject of shareholder lawsuits].

Survey of first-run movie theaters in 20 cities reports receipts for 19 weeks ended Feb. 7 up 6% vs. 1930 period.

Warner Bros. (movies) shows no progress toward recovering formerly large earnings power; net for quarter ended Nov. 30 was $0.39/share vs. $2.07 prev. year.

Starrett (construction) stock dropped below 10 after reporting earnings of $3.02/share; preferred stock yields 14%. Investors may be concerned about volume of upcoming business, and about construction cos. generally.

R.J. Reynolds launching 7-day $1M advertising campaign to introduce new moisture-proof Camel package; placing full-page ads in 1,713 daily newspapers. Kelvinator reports Feb. sales up 11% over 1930.

Companies reporting decent earnings: Axton-Fisher (mentholated cigarettes), Federal Knitting Mills.

At the galleries:

Third Int'l Antiques Exposition [mentioned a week ago] opened Friday night at the Grand Central Palace. Show is “by far the greatest ever held in this country, and rivals that of the British Antiques Exposition, held in London last year ... Every conceivable type of the arts is represented.” The Fifteen Gallery is showing paintings by Katherine Lovell of the California coast and Flatbush. “Besides the hosts of arriving Frenchmen to exhibit in our galleries, it is a pleasure to extend welcome to an Englishman, Bertram Nicholls, whose landscapes are on view at the Ferargil Galleries.” The Arden Gallery is showing a group of six women sculptors; though the show “is dimensionally a modest affair - their being no heroic marbles or bronzes or plastic effigies on hand - a surprisingly robust sense of form and individualistic conception is felt ...”

Jokes:

"'Well, old man, what are you doing these days?' 'I'm selling furniture.' 'Are you selling much?' 'Only my own, so far.'"

"Mistress - I don't like to have to keep complaining, Mary, but I do wish you'd realize that when master leaves his shoes outside the bedroom door, it means that he wants them cleaned. Maid - Oh, does it? And what does it mean when he leaves them outside the front door?"

Tuesday, March 3, 1931: Dow 184.38 -5.28 (2.8%)

Assorted historical stuff:

Editorial: Agreement by France and Italy on naval limitation for next 5 years bodes well for the future. “If the two most powerful continental nations are now to find amicable cooperation possible, the tendency of the past two years toward an alignment of European peoples into two hostile camps has certainly been checked and may have been finally ended.” Political uneasiness has long been a serious problem for the European and world economy; calmer relations would aid economies and allow less spending on “what is deceptively referred to as national security.” Reading between the lines, perhaps “Mussolini has relinquished his desire to fish in troubled Rhine waters” after “steadfast refusal of Hindenburg and Breuning to swallow his bait. Whatever the details ... better times for Europe, our best customer, are in the making.”

Dr. H. Schacht, former Reichsbank pres., says Germany unable to pay war reparations under present circumstances; nation's assets exhausted. Germany can make payments only if “allowed to earn”; other signatories of the Young plan should fulfill obligations. “Asked what he would do if he were dictator of Germany, Dr. Schacht replied 'I would cease reparations payments tomorrow.'”

European grain conference closes with "vague resolutions of goodwill."

Coalition of Patriotic Societies petitions Pres. Hoover for general embargo against Russia; says credit and technical aid is "helping build up the Frankenstein which is dedicated to our destruction."

Editorial by T. Woodlock: Gold standard may justly be called irrational, illogical, a relic of barbarism, clumsy, provocative of panics, inefficient, inconvenient, unscientific, antiquated, and unresponsive to present needs. However, the fact is "the world believes in gold ... until people cease to esteem gold as they now esteem it, gold will remain the only money that people will universally recognize and accept in any quantity."

Rep. Cooper (R, Wis.), oldest House member, dies at 80, leaving House with 217 Republicans, 216 Democrats, and 1 Farmer-Labor.

Washington report: Muscle Shoals opponents growing concerned on delay in Presidential veto; Pres. Hoover has issued statement interpreted as disapproving, but said engineering and business aspects are still under study. Opponents say the matter is a simple case of opposing a foothold for state socialism. Senator Glass and the State Dept. engaged in obscure dispute on the Dept.'s authority over Fed. Reserve's foreign contacts; significance uncertain. Prohibition battle expected at Democratic Nat'l Committee meeting Thurs. Congressmen are launching a final flurry of relief measures with no hope of passage, allowing them to gain some credit for battling down to the last minute when they get home.

L. Wakefield, First Nat'l Bank of Minneapolis pres., hits politicians who capitalize on discontent by attacking corporations; “They delight in the pretended role of a David attacking the Philistines and demand the applause due both the hero and the martyr”; corporations are vulnerable because they have no vote, but real victim is the stock, bond, and insurance policy holder.

Italy facing wine crisis as beer has largely replaced it in popular favor since the war.

Number of applicants to immigrate to the US from Scotland has declined from 33,000 a year ago to none now; reports of unemployment blamed.

Over 15M radio receivers were in use in US homes as of Jan. 1; retail sales of radio equipment in 1930 were $500.9M vs. $842.5M in 1929.

West & Co. in Philadelphia installs first automatic electric stock quote board outside NY to be operated directly from NY.

NY City water supply experts to confer on advisability of raising water rates, which hasn't been done since 1857; will also consider using river water for firefighting and street flushing.

Henry Morgenthau Jr., Conservation Commissioner , says Adirondack State Park to become largest state or national park in the US with enactment of Hewitt bill to add 1.6M acres, for total of 4.6M acres.

GE constructing 900,000 volt X-ray tube for experimental treatment of cancer; has taken several years to build, will start operation in April.

Ford salvaging plant at Dearborn has processed 50,000 old cars of all makes since starting operations a year ago. Over 21,500 tons of steel were salvaged, in addition to tires, glass, batteries, floorboards, upholstery, etc.

Market commentary:

Market wrap: Stocks opened strongly on accumulated buy orders, but became irregular about noon, starting in the rails; selling broadened to industrials in mid-day following poor US Steel Jan. earnings report; decline picked up steam and spread to leading utilities and the general list in the afternoon. Investment grade bond market generally firm on favorable reception for $1.4B Treasury financing; speculative and convertibles reacted mildly in sympathy with shares. Commodities weak; grains generally down; cotton off moderately. Copper price remained at 10 1/2 cents, buying mostly foreign.

Conservative observers continue recommending sidelines until "market has demonstrated its ability to absorb offerings and hold steady."

Bears were reportedly active; some selling also attributed to stop-loss orders whose limits were hit.

Trading favorites including Vanadium were under severe pressure in the afternoon break, though Auburn closed with a gain. Anaconda Copper now subject of contest, with important interests buying but bears active. Pools reportedly operating in Lima Locomotive and Superheater.

NY Central led early break in the rails with a continued sharp decline following last week's poor Jan. earnings announcement; Atchison also down sharply.

W. Storey, Athison RR pres., says costs have been cut close to minimum needed for maintenance; early 1931 results to depend on traffic trend.

Editorial: Cotton figures for 1930 show decline of 2.053M bales in world consumption of US cotton. Decline was partly due to depression, but consumption of Indian cotton increased 1.1M bales in spite of it. Only way for the US to reclaim its share of the cotton market is to lower costs and improve quality.

Broad Street Gossip: “Unless history stops repeating itself,” it won't be long before the depression will be spoken of as a past event, and it will be soon after that talk of prosperity is resumed. Some time later, when industries again produce more than people can consume, talk of a depression will be resumed. “That is the cycle which has been followed for the last half century.” Currently, industries that have progressed furthest in stabilizing production are most successful. This depression may have awakened “captains of industry” to the evils of overproduction and reckless competition; “consequently, a new system may be developed in industry within the next few years.” Corporate balance sheets are much stronger than in the depression ten years ago; many were borrowing large sums at 6%-7% then; now funds are available at 2% but debt is much lower. Bank and trust earnings expected to improve as money rates increase along with business recovery.

Conservative economists look to rise in grain markets as important factor for stocks; could occur through effective cartel agreements or crop failures.

Clark, Childs & Co. note wide disagreement between bears dismissing recent rally as technically driven and bulls seeing similar pattern to 1920-21 market, "in spite of the fact that the market never follows a previously laid out pattern for any length of time." High degree of skepticism is healthy technically. See many fundamental reasons for confidence in market though it may go through a period of consolidation following recent strong gains. However, don't believe serious break is likely; "We lean strongly to the opinion that current prices represent an investment opportunity such as is not apt to be presented again for some years to come."

H. Bancroft, Dow Jones publisher, says recent strength in markets indicates upturn in business likely before July. Thus far, business has definitely improved over Dec., but hasn't yet reached normal seasonal improvement. Business hasn't yet hit bottom but is close; wouldn't be surprised if markets had already passed bottom.

Sen. Smoot defends 1930 Tariff Act as needed to save US producers from being overwhelmed by cheap foreign goods at a time of surpluses in almost everything; “The current of international commerce indicates the good judgement of Congress.”

Economic news and individual company reports:

C. Thompson, Northwest Bancorp. VP, says its group banking system was formed to combat high number of bank failures in their territory in past 10 years, leading to lack of confidence and loss of business to other areas.

Steel industry showing some troubling signs; first two months haven't come up to hopes at start of year. Buying is now below production; operating peak for the first half may come this month. Few producers are covering dividends. US Steel earnings from operations in Jan. were only 10 cents/share. S. Hopkins, Bethlehem Steel shareholder, sues for access to stockholder list so he can "circularize" stockholders in opposition to executive bonus plan.

Capital outlay by class 1 rails in 1930 was $872.6M, up $18.9M from 1929 and largest amount since 1926.

Upcoming Treasury issue well-received in bond circles; rates of 1 1/2% - 3 3/8% indicate veterans' bonus hasn't caused much firming of rates, though general opinion is that if not for bonus agitation a much larger part of the offering could have been long-term, possibly at a rate closer to 3%.

GM production schedules in March point to 20% increase over Feb.; dealer sales for first quarter are likely to be about 300,000, or 20% below 1930 level, better than the 30% industrywide decline expected by most observers.

Report of Sen. Capper's (R, Kan.) committee finds alarming movement toward monopolistic control of nation's food, particularly bread and milk, by small group of powerful corporations. Recommends FTC and Justice Dept. look into rapid consolidation of the industry. See some evidence of restraint of trade, but not enough for a conclusive finding.

Farm Board agents engaged in supporting wheat are having increasing difficulty finding storage space for purchases.

European govts. and central banks said studying British scheme for international credit institution to help transfer capital where needed.

World gold output in Jan. was 1.757M ounces vs. 1.674M in Jan. 1930, and highest monthly total in past two years other than record 1.771M in Dec. Canada now threatening US for position of second-largest producer.

Canadian report: Survey of 7,431 firms shows total employment of 904,315 on Feb. 1 vs. 913,080 on Jan. 1. Business failures in 1930 were 2,402 with liabilities of $48.2M, vs. 2,167 with liabilities of $38.7M. Rail freight loadings for year up to Feb. 21 were 364,636 vs. 442,001 and 476,853.

NY Trust notes growth of US-Canada trade over past decade; Canada supplanted UK as main US trade partner, and US became Canada's largest creditor.

Poland has trade surplus in 1930 for first time since 1926; imports 2.246B Zl, exports 2.433B. Main trade partner is Germany.

1930 earnings reports: Union Pacific about $15.60/share vs. $20.36; Johns-Manville $3.66 vs. $8.09; Reynolds Metals $2.31 vs. $4.63; Bucyrus-Erie $1.63 vs. $3.17; Electric Storage Battery $6.22 vs. $8.77.

Montgomery Ward reports Feb. sales down 17.1% from 1930; Sears-Roebuck sales for 4 weeks ended Feb. 26 down 14.8%.

Companies reporting decent earnings: Standard Power & Light, American Stores, City Ice & Fuel, Adams-Millis (hosiery).

Movie:

Honor Among Lovers, with Claudette Colbert, Ginger Rogers, and Fredric March. "Semi-sophisticated, semi-melodramatic, semi-amusing" film of love and financial trickery, filmed in "those sumptuous modernistic settings seldom seen in contemporary life outside of the movies."

Lots of jokes today:

'I thought you said Bill was a man of regular habits.' 'He is.' 'But he was drunk last night.' 'Sure - that's one of his regular habits.'

'Why are you running so?' 'I want to prevent a duel between two married men.' 'Very praiseworthy. Who are the men?' 'My neighbor and I.'

"Young Wife - I learned to cook while my husband was abroad. Mother - Well, and what did he say when he returned? Young Wife - He went abroad again."

Reports from the Geographic Society meeting on elephants: Ireland - Fighting Elephants; France - Les Amours de Elephans; Germany - Science of Elephant Hunting; Poland - Elephants and the Polish Question; US - A Plea for Bigger and Better Elephants.