Tuesday, April 7, 1931: Dow 169.72 -2.71 (1.6%)

Assorted historical stuff:

Canada's banking system offers interesting comparison with the recent epidemic of bank failures here. From 1900 to the present there have been only 4 chartered bank failures in Canada in which depositors were not eventually paid in full. Three of these were before the war, the fourth since; total deposits were $17.5M. In the US there have been 7,000 bank failures since 1914 involving liabilities of about $3B; in the last year alone, 1,345 with total deposits of $865M.

Editorial: Senate floor leader Watson's (R, Ind.) statement that the next Congress won't raise taxes, while probably accurate as political weather forecast, is based on unsound reasoning. Watson says business recovery would be delayed by heavier taxes, but business will be disturbed by heavy Federal spending, whether enabled by higher taxes or borrowing. While Pres. Hoover has also expressed hope a tax hike can be avoided, he added the caveat that this would require holding spending down, and said the people would have to cooperate to discourage new spending. This is unlikely as long as [income] taxes are confined to such a small slice (2M) of the population; a "spendthrift Congress" won't be reined in until "the number of citizens who directly pay something, no matter how little, as a result of its prodigality is increased enough to exercise some power at the polls."

Gov. Roosevelt vetoes bill allowing town supervisors to issue short-term notes to pay off bond interest, calling it "at variance with all sound methods of finance."

Testimony heard in ongoing suit brought by govt. to recover $11M in alleged excess wartime profits from Bethlehem Steel; R. Evans, Bethlehem Steel chief counsel, contends US Steel made 50% profit on wartime contracts vs. Bethlehem's 21%.

Editorial: In response to J. Raskob's call to Dem. Nat'l Committee members for suggestions on farm relief, "unasked advice is rarely appreciated, yet the subject is of such importance that this newspaper ventures to offer a suggestion." Agriculture should no longer be given "special favors ... to the detriment of other legitimate interests." The Farm Board should be stripped of power to speculate in commodities or to loan money; it should survive, but purely as a fact-finding body within the Agriculture Dept. to "show the farmers how to help themselves."

Wileman's Brazilian Review says country faces most serious economic crisis in its history, even greater than at declaration of Republic in 1889. During period after the Republic was formed, states were given financial autonomy; as result, Brazil buried herself in external and internal debt by 1930. Following revolution of Oct. 1930, provisional govt. has assumed much of the state debt and faces severe situation; further political disturbances will have disastrous effects on Brazil's credit.

Yet another Woodlock editorial on perils of public power. Oregon and Washington have approved public utility districts, supposedly to allow cities economic advantages of larger units. Perhaps concept of public power needs to be tried out on a large scale somewhere, but there should be accurate accounting of the result. The two states above have made tax revenue available to power districts; there's apparently no intention to make them pay as they go. "It is a very dangerous thing to open the tax budgets to experimentation in the utility business without ... taking extreme precautions against hit-or-miss operations." This can lead to "indiscriminate slashing of rates to begin with and a constantly increasing load on the taxes" along with destruction of private utilities.

Telephone users in Japan who don't like the number they were assigned can purchase a new one through dedicated brokers. The luckiest numbers such as 8 and 357 fetch astonishing sums, often from $500 to $3000 or more. Unluckiest numbers (42, signifying death, and 49) are assigned to police stations.

California prison inmates are allowed to take correspondence courses offered by the University of California. A large number take advantage; one day last Sept., a total of 657 San Quentin prisoners graduated from these courses.

"A tree carved with the words 'Kit Carson 1846' was recently discovered ...near Mud Lakes in the Eldorado National Forest of California. Six inches of new wood had grown around the original blaze." Another tree carved by the frontiersman in 1846 is still standing in what is known as Kit Carson Pass in that Forest.

Market commentary:

Market wrap: Stocks gained slightly in early trading but fell under renewed bear pressure, concentrating on US Steel. Majors declined through the day, with Steel hitting a new 1931 low at the close. However, trading was relatively dull following rise in call money, with heavy selling limited to isolated spots including Pullman due to dividend uncertainty, and the volatile Vanadium. Bond trading very dull; US govts. steady; foreign list disturbed by sharp break in Brazilian bonds, though Berlin issues were strong; corp. highest grade steady, particularly utilities, but "readjustments went on" in much of the list. Commodities soft; grains fell back after sharp rise Saturday; cotton down slightly. Copper still available at 9 3/4 cents in enough volume to meet current low demand; large producers holding at 10 cents.

Conservative observers bearish; recent market action has discouraged all public buying.

Most brokers now recommend customers wanting to buy should favor “thoroughly deflated” issues that have not been subject of bull pool operations, but have favorable prospects and financial strength. Increased bear confidence in past week attributed to return of three important operators “after a winter sojourn in the South and Cuba.” US Steel will report unfilled orders Friday; interest in the announcement is keen since the stock has recently seemed pivotal to both bears and bulls. Some NY traction bonds rallied on prospects a transit unification law may be passed this week.

Dow theory students have been encouraged by the rail average's ability to hold stubbornly above last year's lows so far in April; this has "gained many adherents for the theory that the December lows will stand unless some unexpected change for the worse occurs in the business situation." Current downtrend has lasted longer than the severe break late last November, and would have been expected to bring in "most of the liquidation immediately overhanging"; slowdown in selling since Thursday "strongly suggests that no further extensive liquidation lies immediately ahead."

Broad Street Gossip: Bulls have been confounded by recent market action; a few weeks ago most were optimistic and new yearly highs were outnumbering new lows by about 5 to 1; now, both of these have reversed. However, generally bearish sentiment isn't a bad sign, since “tradition teaches that when sentiment is overwhelmingly bearish, one can look for an improvement ... ” Consensus of both bull and bear is now that stocks won't start permanent improvement “until more definite signs are seen of business recovery.” Many industrials closed the year with record cash and security holdings; many brokers also report record cash levels. To the editor, in response to the Justice Dept.'s charge of sugar industry price fixing and excessive profits: “I am a holder of sugar stocks, and if the sugar companies have made lots of money I would like to know what they have done with it.”

Market value of all NYSE-listed stocks Apr. 1 was $53.336B, down $3.718B in March; borrowing by NYSE members against stock collateral $1.909B, up $69M; borrowing as percentage of value 3.58%, up 0.36%; average share price $41.08, down $2.88. Trading volume of 25 most active NYSE stocks in March was 26.289M shares, up 25% from Feb. and third straight sizable increase; 20 of the 25 declined in price. Leader in shares traded was United Corp. with 3.256M shares; in value traded Auburn, $145M.

H. Sinclair says petroleum prices will have to be increased or companies will be unable to stay in business.

H. Alloway relates interesting observation by William C. Whitney on effects of depression on tobacco sales: “The more laborers out of work, the more restless strikers there are, the more tobacco earnings there are”; men out of work or on strike consume much more tobacco.

W. Storey, Atchison, Topeka & Santa Fe RR pres., returns from 4-week inspection tour of lines, says crop conditions as good as he's ever seen them.

F. Dame, North Amer. Co. pres., says “depressing and backward-looking surveys” are missing many signs of improvement, including absence of usual seasonal dip in electricity demand in their system.

Nichols Copper chair. C. Nichols says doesn't believe mining industry will improve until fall.

Harvard Economic Society sees economic upturn soon; business has shown improvement in important directions, allowing fully for seasonal influences.

Economic news and individual company reports:

Jury selection for Bank of US trial completed; trial probably will open this morning.

Pres. Hoover's employment committee reports public and semi-public works contracts have passed $1B since Dec. 1; see stable or slightly improved conditions in industrial employment; continued need for relief in most areas.

Auto industry is being aided by new plan in which industry compensates dealers to junk cars that are antiquated or unsafe instead of reselling them.

Treasury financing to be announced by Sec. Mellon Thurs.; expected to offer over $300M in certificates. Govt. debt operations will be important factor in financial picture for several months at least; Treasury likely to attempt shift of debt to longer-term since recent borrowing due to deficit and veterans' bonus has increased already high short-term debt. Call money unexpectedly rose to 2 1/2%, highest since Jan. 2; attributed to withdrawal of $100M from demand loan market due to recent Treasury financing and cashing of Apr. 1 dividend and interest payments. March bond offerings rose sharply after lull caused by veterans' bonus agitation; total of $661.9M vs. $147.0M in Feb. and $583.0M in Mar. 1930; highest total since Oct. 1927. Municipals were 43.4% of total, rails 28.8%.

S.W. Straus & Co. report NY City building plans filed in Mar. were $51.2M, up 96% from Feb. and up 39% from Mar. 1930.

Sharp 20%-50% rise in leather prices in past month from very low levels should help tanners; fluctuation mirrored a severe decline and limited rebound in shoe production. However, current shoe production remains 30% below the 1923-1930 average.

Average retail price of gasoline has declined over 48% in past 10 years, but tax rate has increased over 2,600% and now adds 13%-52% to the price. Price range 10 years ago was 23.05 - 31.43 cents, or 23.33 - 31.53 including tax; range is now 11 - 22 cents or 15 - 26 cents including tax. California oil production fell 9,300 barrels/day to 521,400 in week ended Apr. 4 following drastic purchasing price cuts.

George R. James accepts reappointment to Fed. Reserve Board on request of Pres. Hoover.

French coal miners abandon plan to strike as protest against wage cuts.

Breuning govt. commission recommends Germany adopt five-day workweek to fight unemployment; number of German unemployed close to 5M. G. Platakoff, head of Russian chemical industries, arrives in Berlin to direct details of shipment of $75M of German machinery to Russia.

Banca Agricola Italiana, capitalized at 80M lire, to be liquidated, branches absorbed by other banks.

Canadian report: Rail freight loadings for year to Mar. 28 were 607,795 vs. 740,134. Construction contracts awarded in Mar. totaled $27.3M, up 5.3% from Feb. and up 12.6% from 1930. New bonds in first quarter were $191.5M vs. $162.6M. Govt. raises tariffs on imported gasoline to combat “dumping,” protect refiners. Newsprint industry suffering from low demand; companies conferring to avoid price cuts.

Colombian Senate considering contract for exploitation of Catatumbo oil region; contract specifies company must begin development within 2 years, construct $25M pipeline, hire 75% native workers, and pay govt. percentage royalty on oil; several Senators already on record opposing it.

MacDonald govt. in Britain said considering required quota of 15% British wheat to be used by bakers to absorb all milled wheat from British farms.

W.T. Grant March sales $5.334M, up 7.4% over last year; F.W. Woolworth $21.724M, down 3.3%; American Stores $10.771M, down 4.7%.

Wrigley seen possibly raising dividend due to strong financial position and growing earnings (stock is 73; annual dividend $4; earnings in 1930 of $6.14/share vs. $5.80; earnings have increased every year in the last decade except 1926; cash and securities per share $12.69).

B.F. Goodrich cuts wages in line with recent Goodyear cuts.

Companies reporting decent earnings: National Electric Power, Southwestern Gas & Elec., Paramount Publix, Alaska Juneau Gold Mining.

Movie:

Dirigible - Directed by Frank Capra, starring Jack Holt, Ralph Graves and Fay Wray. Depicts efforts of two navy pilots to reach the South Pole by air to enable famed explorer Louis Rondell to plant US flag there. First attempt by Jack Bradon (Holt) flying poorly built dirigible crashes in storm over the Atlantic; second attempt by Frisky Pierce (Graves) using airplane successfully reaches pole but crashes when Frisky attempts spectacular landing, killing the explorer. Two survivors make improbable attempt to walk 900 miles across Arctic ice back to base camp when Bradon comes to rescue in more modern, better-built dirigible [played by real life pride of the navy the USS Los Angeles]. Directed with imagination and force; air scenes are thrilling; long struggle over the snow is credible due to Capra's sympathetic treatment; male leads display fine acting while Fay Wray plays Frisky's long-suffering wife Helen with “more than her customary conviction.”

Jokes:

Business Man to his daughter's suitor: "I regret I cannot see my way to allow you to marry my daughter at present, but give me your name and address; then, if nothing better turns up in the near future, you may hear from us again."

"He - I have many reminders of my prowess in winter sports. She - What are they? He - Three cups and two medals. She - Lovely. I have trophies from winter sports also. He - What are they? She - Five engagement rings."

Monday, April 6, 1931: Dow 172.43. +2.54 (1.5%)

Assorted historical stuff:

Editorial: Pres. Hoover, in his recent visit to the Virgin Islands, made some gloomy remarks to the effect that they were "an effective poorhouse" that the US was unfortunate to have purchased from Denmark. The new governor of the Islands replied "no government can give a people prosperity." He discreetly refrained from stating what most already knew: that the US govt. in fact deliberately destroyed the Islands' prosperity by extending Prohibition there, ruining their main business of manufacturing world-famous Santa Cruz and bay rum. Citizens of the Virgin Islands are "slowly and needlessly dying as the result of the noble experiment ..."

Editorial by T. Woodlock repeating balance-of-payments argument that Germany's only possibility of making reparations payments is through “commercial hegemony” over world markets. “In forcing Germany to make reparations payments, the world has done the one thing best calculated to increase the actualization of the potentiality possessed by that nation. ... It is safe to say that economists a hundred years from now (if then there are such things) will have much to say on the strange lack of ... financial foresight which attended the handling of the reparations matter ...”

Editorial: The NY State Senate's has played a "cheap trick" on Gov. Roosevelt in amending the St. Lawrence power bill to name as members of the new Power Authority the commission that the Gov. himself appointed to investigate the issue a year ago. Not only is this a "gratuitous affront" in denying the Gov. his usual power of appointment, it is also a "covert insinuation" that he "might seek to 'pack' the new body" to promote his pet aims; the precaution is in fact unnecessary because of safeguards in the original bill.

Phone calls to and from the White House since Pres. Hoover took office totalled 711,780, more than double number in any similar period.

Thomas Edison to exhibit rubber made from goldenrod at 1933 Chicago World's Fair; exhibit will be in cooperation with Henry Ford.

In the past few years sunlight has come into vogue as an aid to health. Sunlamps have become standard equipment at gyms and barber shops, and are urged for home use; natural sunlight has been carefully studied. Air particules such as dust and soot have been found to block beneficial rays of the sun; on the other hand, the sun's intensity is magnified by water. Most recently it's been found that trees with light bark and shiny leaves also increase the sun's intensity. "Studies in the Chippewa National Forest show that groves of aspens or birches have an intensity of 140% of sunlight."

London burns 3M tons of coal daily in winter, both for home and industry; due to inefficiency only half is converted to heat while the other half is released into the atmosphere as "smoke, soot and other by-products." The British Sunlight League estimates 800 tons of foreign materials occur per square mile above London annually. "Large amounts of coal dust and even small particles of coal are frequently found in the lungs of those who die from respiratory diseases ..."

Union Pacific says it completed branch line between Boulder City, Nevada and Las Vegas Feb. 15, providing only rail access to the Hoover Dam, "world's greatest reclamation construction," which will create a man-made reservoir of 240 sq. miles. Adjacent 4,200 sq. miles in Nevada and Arizona, which has been set aside as a national monument, anticipated to become "a most interesting attraction to people throughout the world."

Market commentary:

Market wrap: Short stock session eventful considering many operators were off for holidays. Stocks briefly declined at the open; US Steel was pressured and hit a new 1931 low. However, this didn't lead to general liquidation and matters quickly reversed; leading shares staged good rebounds; motors were a strong spot, led by GM, and Auburn spectacularly punished the shorts, soaring 25 points. Bonds moderately active; US govts. firm; foreign irregular; corp. highest-grade firm but speculative and convertible highly irregular. Grains very strong; July wheat surged 2 7/8 cents to close at 62 5/8 on higher foreign demand; corn also up very sharply.

Week in review: Stocks worked substantially lower; rail shares hit a new 1931 low while utilities were relatively well supported. Business news was mixed, but “although shrouded in the obscurity characteristic of the initial stages of recovery, many indications were in evidence that commercial enterprise generally had already turned its face toward improvement.” Reports on cars, freight loadings, and electric output were positive, though steel production decline inserted a question mark. Bond market more active due to reinvestment of Apr. 1 payments; US govts. reacted slightly after announcement of large new issue, but remained at premium; foreign govts. active and mostly higher; Australian and German issues rallied; domestic corp. mixed; utilities and highest grade rails steady but lower grade, speculative and convertible declined. Month-end influences caused slight firming in call money but money markets otherwise quiet. NY member banks reported continued decline in loans, rise in non-govt. securities. Commodities very weak; grains declined sharply at times, with new season lows hit in corn and wheat, though they rallied sharply Saturday; cotton moved gradually down. Foreign exchange featured drop in silver and associated currencies, and talk of cut in German discount rate due to higher confidence and return of capital.

Conservative observers continue to recommend using rallies to reduce long positions, staying on sidelines until market demonstrates ability to hold uptrend.

Business news was mixed, with good automotive news and rally in grains but decline in steel production.

Due to market's inability to hold rallies in past 2 weeks, a growing number of traders now expect "the market has worked itself into a position where a selling climax is necessary." This normally comes with heavy forced liquidation, while there has only been a small amount of forced selling in the recent decline compared to late 1929 and parts of 1930. However, pattern of persistent, “dragging” decline may be due to the market's already extensively liquidated position after the past 18 months; brokers' loans are actually lower now than at the bottom in mid-Dec. Further declines should bring return of long-pull buying seen at year-end.

Dominick & Dominick point out recoveries after previous major depressions in 1873 and 1921 started before wages declined to the same extent as commodity prices; these have now declined 21% since mid-1929 while hourly wages are down only 3% but avg. weekly earnings are down 20% due to shorter hours.

Short selling has increased in past week, extending from bear professionals to some of the public switching from the long side; this is seen increasing chance of technical rally. Recent reaction may prove beneficial when first quarter earnings are reported, since it has technically strengthened market to withstand expected poor earnings comparisons and steel production decline. Copper situation considered discouraging; last price hike apparently wasn't justified by conditions.

Broad Street Gossip: Fiat Motors gives US shareholders little information about company operations, but must have been fairly prosperous last year judging by the 95 cent dividend just paid - a yield of about 8%. Callaway, Fish & Co. give list of suggested bonds and stocks; 25 suggested rail bonds have mean yield of 4.74%; 9 utility bonds 4.90%; 5 foreign bonds 5.87%; 11 preferred stocks 5.48%; 13 common stocks 4.57%.

Managed investment trusts [similar to mutual funds], after brief period of optimism and price appreciation in Feb., will apparently require more patience. Price swings in many trust shares are exaggerated compared to the general market due to leverage in the form of capital senior to the regular shares. Meanwhile, the Investment Trust Journal reports that "putting over a fixed trust [similar to ETF] is no longer as easy as it may appear."

Okla. Gov. Murray predicts conference in Washington will result in unified action by 10 oil-producing states, which will restore prices "to normal" within 30 days.

NY State bond issue of $34.975M to be sold tomorrow expected to fetch excellent price; Comptroller Tremaine, in a radio address last week, said: "One of the principal reasons why NY State's credit is so good is that it has always followed a very conservative borrowing policy. NY State does not borrow money for projects which do not at least outlive the bonds by which they are financed." State's net debt is about 1% of its taxable worth.

Pennsylvania RR VP County says co. will spend well over $100M of its $175M improvements program in 1931.

AFL survey of business finds opinion bottom of depression has been reached, and "in the fall we may look forward to the beginning of a more definite climb upward toward prosperity"; says union labor has kept promise to avoid wage agitation; believes wage cuts not called for and would delay recovery.

Economic news and individual company reports:

Gen. Hines announces week's veterans' bonus loans $375M, total of $820M "in sight," predicts $1B within 3-4 months, which would increase deficit $66M.

April car production schedules are a total of at least 25,000 higher than March, though the industry is being very cautious on forecasts and has tightened control of production to react quickly to changes in sales. March car and truck shipments by Chrysler and subsidiaries (Dodge, De Soto, Plymouth, Fargo) totaled 26,072 units, highest since last June and third straight monthly gain of about 50%; shipments were about 23% below March 1930, a big improvement over previous months. Auburn shipped 5,649 cars in March vs. 2,499 in Mar. 1930 and a record for any month; inventories low, anticipates production over 6,000 in April.

Steel seen facing critical period, with first-half production peak possibly already passed. Auto and rail industries have pulled back on ordering; rail pullback was particularly disturbing since they had maintained relatively liberal buying until about a week ago. Influence of lower production on price situation uncertain; some price cutting reportedly persists in spite of efforts of “leading interests.” Scrap market has weakened significantly. Youngstown district steel output will decline 3% to 45% this week; outlook remains confused, buyers cautious.

Remaining unsettled details of Eastern rail consolidation plan to be submitted shortly to panel of three arbitrators agreed on by the interested rails. Rail executives are reportedly getting tremendous pressure from their bankers to consummate the plan. US production of steel rails in 1930 was 1.873M tons vs. 2.722M.

Fisher's wholesale commodity index continued decline to 75.3, a new low.

New state and municipal financing in March was $275.1M vs. $11.7M in Feb. and $127.0M in Mar. 1930.

A total of 23.643M cars and buses were registered in the 48 states and DC during 1930, down 78,749 from 1929.

Texas Railroad Commission increases allowed oil production 45,700 barrels to 690,000 barrels/day; East Texas to start at 90,000, rising to 130,000.

After considerable delay, France enacts major public works program to spend 17B francs over next 5 years. France enacts law to partly compensate holders of rentes [bonds] for drastic decline in franc before 1928 stabilization.

New South Wales, Australia govt. defaults on $1.070M payment for soldier settlement advances, bringing total defaults to $5.815M. Callao, Peru City Council says will default on loan made by J. & W. Seligman Co. of NY in 1927 on grounds terms too onerous.

Credits to Russia of up to $150M being negotiated from Britain, Austria, Germany, and others, to compensate for fall in commodity prices and make it unnecessary for Moscow to export food. Frederick Morton Construction of London offers $100M in loans to Mexican state govts. for public works.

D. Schulte, head of Schulte store chain, says anticipates cigarette price hike to 15 cents/package in about 2 weeks.

Douglas Aircraft seen showing record sales for the full year based on strong Q1 and backlog.

Goodyear cuts wages of 13,000 workers 5%-20%; largest cuts for unskilled workers.

NCR expected to show a first-quarter loss from operations. Montgomery-Ward may show first-quarter loss after lower than expected sales in March. Chesapeake & Ohio RR expects to roughly cover dividends in first-quarter, will likely be one of few rails to do so.

Aluminum Co. of America 1930 net $1.92/share vs. $11.18.

Companies reporting decent earnings: Illinois Power & Light, Penn. Gas & Elec., General Stockyards, Best & Co. (chain store).

Theatre:

Private Lives, with Gertrude Lawrence and Noel Coward, reopens tonight after brief hiatus due to Lawrence's illness. Tony Sarg's Marionettes to present Alice in Wonderland and Rip Van Winkle at the Belmont. Harry Wagstaff Gribble will present series of plays in Montclair, NJ this summer including first US production of Titus Andronicus, and The Miller of New Jersey, farcical drama of the American Revolution.

Jokes:

Girl - Mama, if I grow up and get married, will I have a husband like father? Mother - I don't know, dear, very probably you will. Girl - And if I grow up and don't get married, will I be an old maid like Aunt Mary? Mother - Perhaps. Girl - It's a tough world for us women, ain't it?

Letter from Mark Twain to subscriber of a newspaper he edited in Missouri who found a spider in his paper and asked if it was good luck: "Old Subscriber: Finding a spider in your paper was neither good luck nor bad luck for you. The spider was merely looking over our paper to see which merchant is not advertising, so that he can go to that store, spin his web across the door, and lead a life of undisturbed peace ever afterward."

The Irregular Blather Apr. 5, 1931

No Journal was published Sunday, Apr. 5, 1931. No time to blather today due to work emergency - hope everyone enjoyed the holidays!

The Irregular Blather Apr. 4, 1931

No Journal was published Saturday, Apr. 4, 1931, following Good Friday. A few videos of the week:

Some great music this week. Here's a delightful 1934 short film starring Cab Calloway, mentioned Mar. 30: stage show that accompanied the movie "more than compensated," featuring Bill [Bojangles] Robinson, Cab Calloway and his Cotton Club Orchestra, a large chorus, and two excellent comedians; the "stirring presentation" more than justified its name "Hot From Harlem." Seems Cab and his band are travelling to New York in a Pullman car when he gets a telegram saying they need a new opening number by tomorrow morning ...

Play "Cab Calloway's Hi-De-Ho" on Youtube

And here he is about 45 years later, performing his trademark Minnie the Moocher song in The Blues Brothers (I don't care what all the critics said, I kind of liked that movie ...):

Play "Cab Calloway's Minnie the Moocher" on Youtube

Here's Turn on the Heat, a catchy 1929 song from Horace Heidt and His Californians, mentioned Apr. 2 as appearing at the Palace: big band show, "even more lively than usual. While this organization's somewhat childish collegiate manner" might prove annoying on repeated viewings, "there is no gainsaying the spirited, almost breath-taking character of their offerings ... a rapid routine of orchestral numbers, songs and dances which are original and diverting." Songs include the popular "Peanut Vendor"; "dance numbers include interesting burlesque conceptions of the Russian, Scotch, Apache and Classic Greek styles." Bill also included Lobo II, a trained German police dog, comedienne Rosetta Duncan, a Smith & Dale skit about quarreling real estate partners and Jack McLallen dancing on roller skates.

Play "Turn on the Heat" on Youtube

Youtube has a complete version of The Bad Sister, mentioned Apr. 1: Adapted from Booth Tarkington's novel "The Flirt." Pampered daughter of small-town family forges her father's name for the sake of a handsome swindler from the city, but repents later, returns, and marries least attractive of her former suitors; her plainer sister marries the man she would have had she not turned "bad." Story can hardly compete with tales of "gangsters and wealthy city-dwellers" more popular today, but well produced and will interest those who still prefer Tarkington's characters to those of Ernest Hemingway or Ben Hecht. Sidney Fox shows star potential in the lead role; in the supporting cast, Humphrey Bogart is excellent as the city swindler and Bette Davis is convincing as the plain sister.

Play "The Bad Sister" on Youtube

And, finally, a not-very-good trailer for The Finger Points, mentioned Apr. 3: Second film to open in a week based on murder of Jake Lingle, Chicago reporter [shot dead June 9, 1930 in a crowded pedestrian tunnel under a Chicago train station - murder shocked the nation and Lingle was hailed as a martyr, until it was discovered he was on Al Capone's payroll]. Starring Richard Barthelmess and Fay Wray; once again, Clark Gable plays the gang lord who orders the killing. This time the writers come closer to telling the truth about events leading to the killing. However, though "the individual scenes are handled with resourcefulness and competently acted ... the trouble with the film is the incredibility of the plot and treatment of character."

Watch “trailer for The Finger Points” on tcm.com

Friday, April 3, 1931: Dow 169.89 -0.93 (0.5%)

Assorted historical stuff:

Ford Motor is in a much stronger financial position during this "protracted depression" than the last one in 1921, when it ran into a cash shortage. 1930 earnings were about $55M, on world production of 1.5M cars and trucks, vs. $81.8M on 1.95M in 1929; cash resources are over $300M. Henry Ford seems serene in face of distressing conditions, and has been content to lose some market share this year rather than engage in intensive sales campaigns. Expansion plans are going forward as usual; plants are being built at "Bombay, Calcutta, Madras, and Multan" to assemble and distribute cars throughout India; further progress has been made on rubber plantations in Brazil; additional iron ore land has been acquired in Michigan, as well as natural gas prospects in Pennsylvania. Ford is also working on project to "agriculturalize industry" by finding new uses for farm products; scientists at the Dearborn lab are working on substitutes for many materials now used in auto production, and Ford recently bought several thousand acres in Michigan for use as an experimental farm, at which workers freed up by inventory taking in the summertime can be employed. The 20 million'th Ford car will come off the assembly line about April 14.

Editorial: The Justice Dept.'s recent campaign against trade associations including the Bolt, Nut, and Rivet Mfrs., the Asphalt, Roofing, and Shingle Institute, and, most recently, the Sugar Institute, is likely to hurt business confidence by making members of over 2,000 other trade associations unsure of their legal position. This is particularly true of the sugar complaint, which uses charged phrases such as "increasing profits," "coercion," "blacklisting," and "spies." The facts hardly support charges of excessive profit; the largest sugar refiner is earning less than in 1918-19, when the industry was under government control. If govt. is really interested in protecting consumers from high prices it might look into the duty on raw sugar imposed by a few Western Senators, which almost doubles price of refined sugar.

Editorial by T. Woodlock: No fewer than nine electric utility bills have been introduced in the NY State Legislature by Democratic leaders; these bills, together with the remarkable recent law that prohibited utilities from contributing to relief funds, clearly demonstrate "intense dislike and hostility toward" private electric power. Source of the emotion is plainly the industry's relative prosperity over the past decade. While abuses have occurred, there has been nothing like the checkered history of early rail development; in fact, there has been steady development of service and lowering of rates. Rather than excessive rates, the industry's chief offense is that it's earning 7 1/2% on invested capital of $12B, "and that is more than some of us ... can endure to see. ... 'But,' many may say, 'it is the same thing! Reduce profits and you will reduce rates.' It may be so, but all human experience is against it."

Campaign against Mediterranean fruit fly ends as Federal inspection in Florida is discontinued after no evidence of infestation found; campaign started in April 1929, when discovery of the pest appeared to threaten Florida citrus crops.

Port of NY Authority signs contract to insure Holland Tunnel and new Hudson River bridge at 178 St against damages; tunnel insured for $30M, bridge for $25M.

Scientific research into the formerly obscure metal aluminum, largely sponsored by Aluminum Co. of America which has half the world's production, has created hundreds of new uses. Initially popular in kitchen appliances, it is now used in "airplanes, ink, furniture, cables, paint, nails, tableware, pipes, auto parts, fireworks, welding powder," and for many building uses. US now refines 200M pounds yearly; it's estimated that aluminum forms 1/12th of the earth's crust.

Sir William Mills, inventor of bombs used by the Allies during the World War, is now experimenting with bulbs in a garden on the French Riviera. Over 75M Mills bombs were used during the war.

Number of German mark millionaires has declined from 10,000 before the war, inflation, and reparations "melted the country's wealth away," to 4,000 now.

American Locomotive has enclosed along with its Q1 dividend check a circular describing its new 780,000 pound, 108-foot locomotive that reads like a car brochure: “triumph of dynamic symmetry combining immense power, high speed, ... and grace of lines.” It boasts a “starting effort” of 85,060 pounds, which will no doubt appeal to the car enthusiast fond of “leading the charge after traffic lights change.”

Market commentary:

Market wrap: Stocks showed considerable activity in spite of influence of Passover and Easter holidays. Market sluggish in first two hours, with bears successfully attacking isolated stocks including Allied Chemical, Worthington, and Vanadium; utilities also weak. Selling intensified and broadened to leaders at mid-day, with Steel hitting a 1931 low below 138. However, bears were unable to force heavy liquidation, and a brisk rally broke out in the final hour as many traders covered short positions before the holiday. Bonds mixed; US govts. little changed in spite of announcement of large new issue Apr. 7 or 8; foreign mixed with European strong but S. American irregular; corp. high-grade in demand but rail, speculative and convertible issues heavy. Commodities soft; grains mostly somewhat lower; cotton off moderately. Silver declined 1/2 cent to 27 5/8; silver brokers puzzled, since statistical situation continues favorable; selling reported from China and India.

Conservative observers believe technical rally is overdue, may come Saturday; advise clients to take advantage by reducing long positions; continue to favor stop-loss orders. Believe market will be more selective when it does stage a lasting advance; advise sticking to companies that have good earnings and outlook.

Brokers report public attitude toward the market in the past few days has been one of "watchful waiting."

A repeat of the heavy forced liquidation that took place in late 1930 is considered unlikely; "stocks are in stronger hands, and many security owners have greater confidence regarding the long-term outlook," so are unlikely to "throw over their shares" as they did last fall, when banks were failing in many areas.

Berlin stocks continued higher in past week, though volume was low; discount rate cut of 1/2% to 4 1/2% expected soon.

Kreuger & Toll has been relatively well supported during recent declines; buying may reflect European interests betting on political improvement; reports of pool operations not confirmed. US Industrial Alcohol rallied after it cut dividend to $2 annually from $6 instead of suspending it as expected, and end of alcohol price was announced. Responsible brokers are steering clients away from International Nickel, since it appears to be under pool control. IT&T is subject of rumored foreign buying; a small pool is also believed operating in the stock.

Jackson Bros., Boesel & Co. note this is season when chain store sales increase; see interesting possibilities in Woolworth, Grand Union, and J.C. Penney.

Broad Street Gossip: The Street reports a large percentage of recent short selling has come from “three big bears” who were very successful last year. GE is said to be target of heavy short selling by several large operators, though “history teaches us that no one ever made money selling GE short for a long pull.” Recent market has been difficult to trade, with declines seven days in a row; traders averaging in or buying on signals such as decline in volume are out of pocket. Preferred stocks are leading the lists of new highs, though common stocks of the same companies are near the year's lows.

Rep. J. Parker (R, NY) says consummation of 4-party Eastern rail consolidation plan will be decided aid to recovery; predicts adoption would be followed by over $500M of spending on improvements; believes plan will be filed with ICC within 2 weeks.

Editorial: Now that the Farm Board has decided to stop supporting wheat after the current season, why continue supporting it now? This only adds to the huge surplus to be sold at a loss. At a time of Treasury deficits, it doesn't make sense to keep buying more wheat on which the loss will be about 40 cents/bushel.

Economic news and individual company reports:

GM balance sheet strengthened in 1930; inventories were cut $52.2M to $136.3M; cash and marketable securities rose $52.2M to $179.0M; working capital rose $29.7M to $281.0M. GE is keeping tight control of inventories; as of Dec. 31, they were $60.1M, down 24% from a year earlier, and lowest in 10 years. Ratio of inventory to sales was 16% vs. 19.5% a year earlier.

Interior Sec. Wilbur says oil importing cos. have shown "fine volunteer spirit" [in agreeing to curtail imports]; sees hope of solving present oversupply crisis in oil industry if oil producing state authorities and operators show same attitude.

US business failures in March were 2,604, a record for that month but only up 1.5% from Feb.; liabilities were $60.4M vs. $59.6M in Feb. Total failures for Q1 were 8,438, also a record for the period and up 15% from 1930; liabilities of $214.6M were up 27% from 1930.

Fed. Reserve reports money in circulation Apr. 1 up $74M to $4.621B, total Reserve Bank credit outstanding up $85M to $943M. Member banks in NY City report brokers' loans down $33M to $1.875B; loans on securities to non-brokers down $38M to $1.792B. Money market was quiet over the month-end despite brief firming in call money; easier outlook seen for next 10 days. Deposits of 21 largest NY City banks and trusts as of Mar. 25 were $9.049B, down from $10.075B on Dec. 31 but up from $8.231B a year earlier.

All member banks of the Los Angeles Clearing House Assoc. will cut rates on savings deposits 1/2% to 3 1/2%; similar reductions have been made or are expected in other areas, including Boston, San Francisco, and NY City. This is expected to strengthen the market for bonds that savings banks can legally buy, particularly municipals. Dow average yield of 20 long-term city and state bonds is now 3.87%.

Gold imports to NY in Q1 were $84.911M; only $100,000 was exported, for net gain of $84.811M; net gain in Q1 1930 was $111.985M.

Dow average of 8 iron and steel products was unchanged at $44.23, low for 1931.

Bank of England reserve position weakened sharply in past week, but this is believed due to temporary end of quarter factors.

Registered British unemployed Mar. 23 were 2.580M vs. 2.640M Mar. 16 and 1.639M a year ago.

World sugar conference in Paris adjourns until after Easter to allow Dutch delegates to reconsider demands; important details remain unsettled.

Annual meeting of the world's largest corporation, AT&T, costs about $25,000, of which $23,000 is for postage to mail the meeting notice and proxies.

Pennsylvania RR plans to buy and recondition four ships to operate weekly service between Philadelphia and Europe.

Final figures on March Chevrolet production show 79,603 cars and trucks, 4,000 above preliminary report, 18% above April, and most since May 1930.

Pullman (passenger rail cars) in Feb. announced its first monthy loss from operations in years.

Companies reporting decent earnings: United Gas Improvement, Peninsular Telephone, Assoc. Portland Cement Mfgs. Ltd.

Movie:

The Finger Points - Second film to open in a week based on murder of Jake Lingle, Chicago reporter [shot dead June 9, 1930 in a crowded pedestrian tunnel under a Chicago train station - murder shocked the nation and Lingle was hailed as a martyr, until it was discovered he was on Al Capone's payroll]. Starring Richard Barthelmess and Fay Wray; once again, Clark Gable plays the gang lord who orders the killing. This time the writers come closer to telling the truth about events leading to the killing. However, though "the individual scenes are handled with resourcefulness and competently acted ... the trouble with the film is the incredibility of the plot and treatment of character."

Jokes:

Clergyman - Brothers and sisters, I will preach to you this morning on the present style of women's wearing apparel, taking my text from the Book of Revelations.

"The Smiths are on the balcony and can hear what a young couple are saying in the garden below. Mrs. Smith - 'I think he wants to propose. We ought not to listen. Whistle to warn him.' Mr. Smith - 'Why should I? Nobody whistled to warn me.'"

Thursday, April 2, 1931: Dow 170.82 -1.54 (0.9%)

Assorted historical stuff:

Transcontinental Air Transport plane crash in Kansas kills 8; Knute Rockne among the dead.

Washington report: Deficit for the 1932 fiscal year (starting June 30), based on current conditions, is estimated at $946M. If it was reduced to $500M, a tax increase could responsibly be avoided by skipping the $400M sinking fund payment and borrowing the small remaining amount. This could happen through a combination of business recovery and spending cuts. The latter will be harder since money for 1932 is already appropriated, but $100M or more could be saved if Farm Board stops operations. Sen. Capper (R, Kan.) defends Farm Board against Sen. Reed's proposal to abolish it; says Board hasn't been "given a chance yet to show what it can do."

Editorial: Sen. Borah has proposed a surtax on high-income taxpayers to close the deficit. This may sound good superficially, but not on a closer look. The surtax would apply to only 371,754 taxpayers. The people may like being coddled by politicians, but it's safe to say their "sense of fair play has not sunk so low ... [they] would be willing to let 1/3% of the people bear the burden of the coming Treasury deficit." In 1929, the top 1/3% of the population paid $974M in income tax on $12B income; the next 1 1/3% paid $13.6M on $12.4B; and the other 98%, with income of $70B, paid no income tax. [Note: A version of this editorial has appeared many times since in the Journal. It was much more convincing back then, before Social Security and Medicare taxes.] Meanwhile, Prohibition is depriving the Federal govt. of perhaps $800M in tax revenue, and much more in state taxes; the bootlegger's profits come not from the top 1/3% but from millions of voters.

Republican W. Austin wins special election for Senator from Vermont, defeating Democrat S. Driscoll, who had favored Prohibition modification.

After some trepidation, general opinion has turned in favor of German govt's recent adoption of rule by decree, since this will enable program for economic rehabilitation to be followed with minimum interruption.

Recent earthquake near Managua, Nicaragua may end proposed canal project, since it would have suffered enormous damage in the quake.

Editorial: Gov. Roosevelt looks likely to sign the St. Lawrence River power bill based on the more reasonable scheme favored by a majority of the commission he appointed, which doesn't open the door to State distribution of power. In doing so, he gives up his earlier position and chooses "commercially sound procedure and safeguarding of the State's finances in preference to a presumably useful political issue." Decade-long delay in development has at least had the benefit of preventing another possible "$200M mendicant like the Barge Canal."

Editorial by T. Woodlock: ICC's referral of the old rail price controversy to the Justice Dept. indicates it sees a possible violation of the antitrust law. This may be so, but will be difficult to prove. Antitrust law "can prevent ... corporations engaged in a given industry from agreeing not to compete; it cannot force them to compete if they, in fact, choose not to ..." While lack of competition strongly suggests an agreement, this can't be assumed but must be proven.

"Two decades ago at the beginning of the automobile era" roads and highways were rivers of mud except when frozen hard in winter or turned to dust in summer. Since advent of the car with its need for hard roads, billions have been spent on paving but only 700,000 miles of the 3.024M mile highway system has been surfaced. It's estimated $2.5B will be spent in 1931 on improvement of highways and streets, mostly in well coordinated work looking toward a national system.

British inventor develops strong, resilient asbestos sheet that can be molded into fireproof car bodies at half the cost and weight of steel; three largest British carmakers are experimenting with the invention.

GE has developed a vacuum tube able to detect heat radiated by faraway stars. The tube can detect 1/100,000,000,000,000,000 of an ampere, which compares to the power of a 50-watt lightbulb as two drops of water to a year's flow over Niagara Falls.

Hollywood now has an extensive botanical collection of flowers and shrubs to ensure authentic backgrounds for films, and also steadily employs about 20 professionals making flowers from paper or waxed cloth to duplicate more exotic varieties based on photos.

Market commentary:

Market wrap: Stocks declined most of the session, with majors including US Steel and GE drifting downward and bad breaks in some trading favorites; automotive shares including GM were relatively strong, while rails were a weak spot. Decline picked up steam late in the session, though there was a minor recovery near the close. Bond trading mixed; US govts. down slightly on talk of new financing; foreign govts. active and strong; domestic corp. mixed with rails and tractions higher, utilities steady, but convertible issues irregular. Commodities very weak; grains break badly, wheat down substantially, corn plunges to new season low and low since 1922, other grains down sharply; cotton down substantially. Copper remained at 9 3/4 - 10 cents. Silver declined 5/8 cent to 28 1/8.

Market observers remain cautious although a technical rally appears overdue; see no sign of imminent reversal.

Business news was mixed, with rail freight loadings in week ended Mar. 21 gaining more than seasonally to a new 1931 high, but first decline in steel production this year. Stock traders may have also been rattled by the sharp break in grains.

Broad Street Gossip: One broker received a buy order for 100 shares of US Steel to be executed when the “shorts are through liquidating stocks they borrowed from others.” Advice to buy on breaks and sell on rallies is again not working very well in the past few weeks, as there have few rallies to sell on. Recent decline attributed partly to tax selling by traders who made good profits early in the year. Stocks that have acted best during the recent decline include American Can, Woolworth, and McKeesport Tin Plate. Gillette 1930 report showing earnings of $3.25/share was better than expected, and showed lack of foundation for many rumors circulating when the stock was making new lows.

Potter & Co. recommend Cuba Railroad first mortgage 5% bonds, now selling at about 66 to yield 8 1/2%, on grounds “interest has always been paid, although the road has passed through three revolutions, two interventions, one moratorium and three major economic depressions.”

Recent bear drive on GM used clever tactic of selling through a broker associated with Raskob and du Pont interests, creating illusion of liquidation by interests close to the management. Reports were also "industriously circulated" that GM's dividend was in danger, though this appears to be false. Recent bear operations in automotive stocks were helped by reports of declining demand for automotive sheet steel. However, Iron Age says auto prospects remain good and suggests the decline may be a result of extreme caution by carmakers anxious to avoid mistakes of 1930; some factories are reportedly readjusting production every week based on retail sales reports.

Recent shipment of gold from France to Germany, though small, considered highly significant in banking circles; this was first shipment from France since last July. France has accumulated gold steadily since stabilization of the franc in 1928; holdings have grown from 28.9B francs to 56.1B, leading to charges gold standard had broken down and stability of other currencies was threatened. This shipment demonstrates franc can weaken against other currencies and lead to prompt shipment of gold. It also demonstrates return of German confidence that was so badly shattered by last fall's elections.

L. Rosenwald, Sears VP, says business somewhat slow but sees every indication of steady readjustment to normal conditions.

T. Watson, IBM pres.: "Based on information gathered by our representatives in all parts of the US and abroad, there are unmistakable indications of business improvement which should shortly be reflected in a better demand for merchandise of all kinds."

Economic news and individual company reports:

Six of twelve jurors chosen for Bank of US trial; the trial may begin early next week.

Steel production uptrend reversed; week ended Monday was 55% vs. 57% prev. week, 56 1/2% two weeks ago, 75% in 1930, and 95% in 1929; US Steel rose to 56 1/2% from 55 1/2%. Uncertain whether this decrease is just a “breathing spell or whether it marks a definite relapse from the upturn” since start of year; decrease is small, but this is the time of year when production usually peaks. Most encouraging news was higher demand for construction material; improving weather is expected to further stimulate construction activity. Price picture looks less encouraging; prices have stabilized, but at lower levels, with some recent attempted increases not holding. Decline in automotive orders seen due to extreme caution by carmakers since uptrend in production still appears strong. Machine tool business continues uneven with no marked improvement in March in spite of good inquiries.

March auto production by makers other than Ford was 187,848 cars and trucks, up 26% from Feb. but down 24% from 1930; Q1 was 465,884, down 27%.

With about 3/4 of Treasury debt maturing within the next 2 years and 7 months, Treasury is anticipated to shift to long-term for new issues.

Call money rate returns to 1 1/2%.

US electric output for week ended Mar. 28 was 1,681 GWHr, down 1.5% from 1930, vs. a 2.3% decline prev. week and 3.4% two weeks ago.

State gasoline tax collections in 1930 reached a new high of $522.1M vs. $448.2M in 1929; California collected highest amount, $40.0M.

Texas Railroad Commission agrees to raise allowed East Texas oil production to 125,000 barrels/day over next 90 days due to large new well discoveries.

Foreign currencies rose due to holiday influence and report of lower-than-expected British deficit.

French govt. strengthened as budget for 1931-32 finally passed by both chambers of parliament; small surplus predicted.

Followup international wheat conference on disposal of world surplus likely to be called in London May 18.

The London Stock Exchange is completing one of its dullest fiscal years in history; governing authority is besieged with proposals to attract the public into the market. Many brokers want the ban on advertising lifted; demands also made for more adequate information for investors. Drastic changes likely in coming year.

NYSE seat sold for $300,000, off $10,000 from previous sale.

NJ legislature is considering bill providing for state officials to take over municipal finances in event of default.

Middle West Utilities' year-end balance sheet and lower capital spending plans indicate relatively little new financing will be needed this year. Market decline in 1930 put a crimp in the financing program for that year; for example, over 500,000 warrants it issued for purchase of common stock at $40 went unexercised and the company had to look elsewhere for the $20M it had expected from this source.

Share of US soap market in 1930: Procter & Gamble 40%; Colgate-Palmolive-Peet 24%; Lever Bros. 14%; remaining 22% over 250 mostly local independents.

Continental Can reports improvement in paint, varnish, and "general line" cans; this type of business seems to be returning to normal for the first time in over a year.

Cadillac-La Salle March shipments were 2,332 units, up 43% from Feb. and up 26% from Mar. 1930; Q1 shipments 5,188, up 20% from 1930. Hudson-Essex March sales were up 38% from Feb.; April sales expected to show similar increase over March.

Stewart-Warner (automotive accessories) is diversifying into new products to restore earnings power. Upcoming products include small home movie camera to retail for $50, and a advertising sign for store windows that can be written on by the user, with writing appearing like neon tubing.

Companies reporting decent earnings: IBM, Hershey Chocolate, Duquesne Light, American Machine & Foundry (machinery for producing 5-cent cigars).

Theatre:

Appearing at the Palace - Horace Heidt and His Californians - big band show, "even more lively than usual. While this organization's somewhat childish collegiate manner" might prove annoying on repeated viewings, "there is no gainsaying the spirited, almost breath-taking character of their offerings ... a rapid routine of orchestral numbers, songs and dances which are original and diverting." Songs include the popular "Peanut Vendor"; "dance numbers include interesting burlesque conceptions of the Russian, Scotch, Apache and Classic Greek styles." Bill also included Lobo II, a trained German police dog, comedienne Rosetta Duncan, a Smith & Dale skit about quarreling real estate partners and Jack McLallen dancing on roller skates.

Jokes:

'I took his temperature with that glass thing you gave me Doctor, and it's gone down.' 'Ah, that's right; that means he's getting better.' 'Oh, Doctor, are you sure? I was a bit worried when he swallowed it.'

Wednesday, April 1, 1931: Dow 172.36 -0.20 (0.1%)

Assorted historical stuff:

Pres. Hoover says tax increase can be avoided at next session of Congress, provided Congress doesn't impose spending increases on the Administration; calls on public to discourage accomodation of "demands of sectional and group interests." Statement was a surprise, and most important made by Pres. Hoover on taxes since last August, when he expressed strong hope the 1% tax cut could be extended; however, that cut was later abandoned. Statement is in line with positions of various Senators that with economizing by govt. and business recovery the 1932 deficit would become small enough to avoid a tax increase.

Rather bitter editorial by T.Woodlock concerning the Potomac Electric Power Co., previously cited by him as a model for more enlightened electric rate setting; company has a profit-sharing agreement with the District of Columbia giving it an incentive to lower costs. Now, however, in spite of a decline in household rates from 10 cents/kwh to 4.2 cents in the 6 years since the agreement went into effect, the Public Service Commission has decided the company is making excessive profits and is demanding renegotiation. Apparently "it is more important from the 'public interest' point of view that no one should make any 'profits' from serving the public than it is that the public should be well and cheaply served. ... One cannot help wondering why it is that human beings as individuals average so high a degree of intelligent fairness in their private relations ... while collectively they exhibit so little of that quality."

Washington report: Govt. officials are reportedly more optimistic on business, though still not sure whether current improvement is merely seasonal. One undoubtedly favorable item is Weather Bureau report that drought has been broken over most of the affected area. Negotiations next week bring hope of deal among oil-producing states to bring production under control while restricting imports. Fed. Reserve has been studying some of the same banking questions as the Glass committee; reports expected within the next few months. War Sec. Hurley says favors renomination of VP Curtis in 1932, refuting rumors Pres. Hoover might choose him as running mate. Sen. Watson visits White House, says agrees with Pres. Hoover that politics has adjourned and there would be no attempt to reorganize the Republican Nat'l Committee.

Editorial: Sharp decline in auto exports ($15.5M in Jan. vs. $16.4M in Dec. and $31.2M in Jan. 1930) is of grave concern given the importance of this industry. Well-informed people variously blame business depression, politics and foreign policy; whether agreeing with them or not, these opinions deserve consideration. Not only the automotive but also "the entire foreign trade situation demands unprejudiced investigation ..."

W. Mayo, chief Ford engineer predicts that by 1941 all major railroads will be operating airlines for passengers, leaving rails clear for freight trains.

IT&T demonstrates "micro wave" radio transmission between Dover, England and Calais, France. System uses transmitting and receiving antennas only one inch long, wave length as short as 18 cm, and only requires 1/2 watt of power. Ultra-short waves are less subject to fading; reception was up to best telephone standard.

Many of the 32,000 traffic deaths each year are due to flying glass. Some carmakers have already made safety glass standard on all models, while legislation requiring it is pending in many states. Willlys-Overland made safety glass optional equipment on Jan. 1; it was chosen by 82% of buyers in the high-priced line, 77% in the medium line, but only 35% of the low priced line.

Dr. H. Eckener, Graf Zeppelin commander, anticipates joint German-US operated transatlantic airship line in 1933; passenger fares will be $800-$1,000 and trip will take 2 to 2 1/2 days. Service will start with German ship now under construction, 812 feet long and filled with 7.1M cu ft of helium; capacity will be 50 passengers, crew of 35, and 10 - 18 tons of freight.

New Transcontinental & Western coast to coast air service Apr. 1 will reduce travel time to 33 hours from 36.

New electric flashbulb for photographers is a great improvement over dangerous flashlight powders previously used, providing a brilliant 1/100 sec. flash without noise, smell or smoke, and allowing photographs to be taken in new locations such as trains, planes, and underwater.

Highest drinking fountain in the world will be located in the Empire State building, over 1,100 feet above 5th Ave; Frigidaire is supplying the 1,600 water coolers needed to slake the thirsts of the building's 22,000 permanent workers and 10,000 transients.

NY State Legislature authorizes $10M for unemployment relief, acting under emergency messages from Gov. Roosevelt.

At a time when US legislators are actively discussing ending capital punishment, figures from Austria may give them pause. Death penalty was abolished immediately after the war. Vienna police report 111 premeditated murders in 1929, 97 in 1928, and 65 in 1927; this compares with 21 in the entire territory of the current Austrian Republic in 1913.

Market commentary:

Market wrap: Leading stocks staged moderate recovery early, shrugging off bad breaks in isolated issues including General Asphalt and US Industrial Alcohol; advance progressed into early afternoon, with sharp gains in trading favorites including Auburn and Alaska Juneau Gold Mining. Rally then ground to a halt, and bears resumed aggressive attacks around 2 o'clock; US Steel and GE broke below Monday's close and reaction spread through the list, intensifying in final hour. Bond trading more active; US govts. steady; foreign irregular with Australian again higher; corp. irregular but mostly higher in both investment and speculative sections. Commodities steady; grains firm, with corn up substantially; cotton off slightly. Copper sold by at least one small producer at 9 3/4 cents; large producers are holding at 10 cents; buying quiet. Silver at 28 3/4 cents; brokers see favorable outlook.

Market observers continue pessimistic; advise staying on sidelines until market indicates reversal, reducing long positions on rallies.

Market students disturbed by pattern last week of higher volume during reactions; many believe volume indicates the market's line of least resistance. Bears predict the current downtrend could produce a "selling climax" with sharp breaks on heavy volume as in 1930; however, many observers believe this unlikely due to much lower margin positions this time around.

Morning buying attributed both to traders expecting a technical rally and to longer-term investors who missed the opportunity to accumulate before the recent rally. However, many brokers who recommended buying for a rally advised taking profits quickly; G.M.P. Murphy said recent reversal has been so pronounced that a considerable period of better support is needed before taking longer-term positions.

Market talk will now shift to first-quarter earnings, which are expected to be poor. Some observers are already studying second-quarter prospects; they admit the past months's conditions and immediate outlook don't indicate any substantial increase in earnings.

Observers are speculating Chrysler's first-quarter earnings may prove a good surprise.

Chesebrough and Horn & Hardard failed to respond to good earnings reports.

A Wall Street man left New York a week ago for a two-year trip around the world. Before leaving, he bought $250,000 worth of 24 different stocks; he told a friend that by the time he returns to New York he expects to have more than doubled his money.

Broad Street Gossip: When the decline will end is a subject of much guesswork. Bulls can point to a crowded short position, margin loans “down to bedrock,” and big banks reporting that banking liquidation was completed last year. Bears can cite expected poor earnings and lower dividends. In the end, “your guess may be just as accurate as any.” Experienced traders say public buying is the best kind, but heavy public buying doesn't always put a stock up; US steel has been declining since the third quarter of 1929 although shareholders increased from 110,166 to 149,122 in that period. Estimated April interest and dividend payments of over $1B make the recent market decline seem “made to order” for those who invest these payments in securities.

Editorial: The public perception that rails want to destroy other forms of transportation and maintain a monopoly is misguided; they simply want to be freed to use all forms of service on the same terms as other interests. The tradition that rails are a natural monopoly and must be repressively regulated is outdated; rules prohibiting rails from making use of waterways and other forms of transport have become absurd and are contributing to wasteful competition and duplication.

Utilities in the Insull system report better business and agricultural conditions in some sections; expect some improvement in Q1 earnings vs. Q4 of 1930.

H. Clarke, Fox Film pres., says film industry has ceased to be volatile; points out revenue in past 18 months has held up better than almost any other business.

Sir H. McGowan, Imperial Chemical chair., says recent months have indicated fall in commodity prices has slowed; uptrend may appear within short time.

Economic news and individual company reports:

Jury selection begins for Bank of US trial; first juror chosen is Arthur Swann of 40 W 67 St., dealer in rare books. Motion for postponement of trail due to illness of bank counsel Kresel denied. Receiver sues Nat'l Bank of Kentucky directors for over $14M, charging "improvident, wasteful and illegal acts of management."

Fed. Reserve “easy money policy ... has apparently been successful in stopping the process of bank credit contraction.” Total loans and investments at member banks expanded more than seasonally from $22.776B on Jan. 7 to $23.046B on Mar. 25. Expansion was in investments, which rose $833M, of which $668M was govt. securities; benefits of this to business “have been indirect, and in all probability the stimulation has not yet been thoroughly felt.” However, easy money hasn't been able to stop loan liquidation; “all other” (commercial) loans declined $290M, vs. a $477M decline in 1930 and average $84M increase in 1927-29.

Rail freight loadings for week ended Mar. 21 were 741,942, up 7,680 from prev. week, down 15.2% from 1930 week, and down 22.9% from 1929.

Feb. net operating income for all class 1 rails about $27.3M, 54% below Feb. 1930 and lowest since 1921; revenue $337M, down 21.2% and lowest since 1918.

Standard Oil of Calif. and the Texas Co. match oil purchasing price cuts just posted by Union Oil. Feb. domestic demand for gasoline 26.133M barrels vs. 26.461M in 1930; exports 3.6M vs. 4.9M. Oil industry appears before FTC to protest decision that 18 of 21 rules in the industry marketing code illegally restrained trade. Soviet oil production shows rapid growth; 1930 exports from Black Sea ports were 28.6M barrels vs. 25.3M in 1929 and 10.9M in 1926.

Bank statements for past week showed continued uptrend in non-govt. security holdings, up $29M in the week.

Call money rate rose 1/2% to close at 2%.

Financing was heavy in March, with new securities estimated at $675M-$700M, highest since last July and up sharply from $201.1M in Feb. While some new issues are being negotiated, the April total is expected to decline substantially.

NYSE stock trading in the first quarter was 172.3M shares vs. 227.6M in 1930 and 294.2M in 1929. March volume was 65.7M, lowest March since 1927.

US Steel dividend is now subject of bear rumors that started when NY Central cut its dividend, since both companies have the same banking sponsorship. However, Steel is in a much better position to maintain dividends due to strong balance sheet and good earnings in recent years.

British deficit for just-ended fiscal year now estimated at $125M, about half that predicted by Chancellor Snowden a few weeks ago. PM MacDonald says will submit next budget April 27; work on the budget, on which survival of Labor govt. may depend, has been slowed by illness of Snowden.

Small French shipment of gold took place to Germany, seen as “one of the most significant developments in some time in the foreign exchange market.”

Miami Mayor C. Reeder reports city operating expenses have been reduced from a peak of $6.749M in 1926 to $2.654M for year ending June 30.

$290M plan for unifying Chicago traction [mass transit] cos. declared operative.

Chevrolet production schedule increased to 85,088 units from previously planned 81,088, and vs. Mar. production of 75,266; sales gaining in many territories.

AT&T first-quarter earnings are running at greater rate than the overall 1930 result.

Pennsylvania RR 1930 net $5.28/share vs. $8.82. Phelps-Dodge (mining) 1930 net $0.18/share vs. $4.80.

Wm. Wrigley plans to use all money it receives for chewing gum in 12 Southern states to buy cotton at 12 cents/pound or less through newly formed Wrigley's Cotton Investment Fund. Plan anticipates buying about 100M pounds of cotton by Dec. 1.

Companies reporting decent earnings: Lefcourt Realty, Morris Motor (British car maker).

Movie:

Bad Sister - Adapted from Booth Tarkington's novel "The Flirt." Pampered daughter of small-town family forges her father's name for the sake of a handsome swindler from the city, but repents later, returns, and marries least attractive of her former suitors; her plainer sister marries the man she would have had she not turned "bad." Story can hardly compete with tales of "gangsters and wealthy city-dwellers" more popular today, but well produced and will interest those who still prefer Tarkington's characters to those of Ernest Hemingway or Ben Hecht. Sidney Fox shows star potential in the lead role; in the supporting cast, Humphrey Bogart is excellent as the city swindler and Bette Davis is convincing as the plain sister.

Joke:

Admiral conducting an examination for the Navy - Who, in your opinion, are the three greatest sailors in British history? Student - I'm sorry, sir, I didn't catch your name when I entered the room, but the other two are Nelson and Drake.