June 4, 2009

Wednesday, June 4, 1930: Dow 271.18 -3.27 (1.2%)

Assorted historical stuff:

American movie industry passes a milestone – from now on, instead of exporting Hollywood films to world markets the industry will have producing units in other countries; instead of internationalizing the Hollywood film will make films indigenous to each country in which it operates. This plan appears to have been a reaction to the introduction of talkies, which threaten to end the easy foreign profits for American films (“In Paris, audiences rioted in protest against the foreign tongue which, from movie screens, was resounding throughout the land. In Berlin 'mammy' songs were muted”). At this point American movie companies are making up to 30% of revenues in the foreign markets, which is a great help in maintaining “the squanderous standard of production of Hollywood films”.

Representative Knutsen of Minnesota says big business is opposing the Smoot-Hawley tariff, because “they want to manufacture in the cheap markets and sell in our markets.”

Madison Square Garden reports a new record for boxing receipts for the 11 month season ended May 28 - $2.27M for 35 shows compared to $1.27M for 26 shows in 1928-29.

New record for Holland tunnel traffic over the holiday weekend of more than 45,000 cars a day.

Record 6000 prohibition enforcement arrests in April.

Market commentary:

Bankers anticipate easy credit - “a liberal supply of funds at low rates for some time”.

The market was “dull and listless,” active issues losing one to three points.

Trade has been down for about nine months – bullish since we're nine months closer to returning to normal.

Bull: 'Common stocks are a buy for the long pull.' Bear: 'Sure, the sooner you buy 'em the longer the pull.'”

Present dull period is giving Wall Street brokers time to improve their prowess at many games, including golf, bridge, checkers, chess, and ping pong.

Economic news and individual company reports:

Retail sales appear improved in April - showed an increase over 1929. Combined march and April sales are only down 2% over 1929. Since the end of 1929, sales of American cars have exceeded production.

U.S. Steel cuts ingot production to 75% of capacity from 79.5% last week and 100% last year, independents at 67.5% vs. 69% and 92% resp. Unfilled orders are also down.

Market turns down in late trading after U.S. Steel news.

Retail Radio equipment sales expected to be up from $590M in 1929 to $645M in 1930.

United Aircraft on uptrend – 1930 gross expected to exceed 1929, net income for Q1 1930 of $900,391 (0.39/share) and expected to trend up for remainder of the year. Government and foreign business expected to make up shortfall from commercial demand.

Alleghany railroads income April earnings up 6% over 1929, exception to general railroad trend.

Southern Railway April net income $1.0M vs. $2.1M in April 1929, four-month net income $1.8M, vs. $5.4M in 1929.

I. T. & T. reports business operations improved in 1929 and so far in 1930. Net income of $17.8M in 1929 compared with $14.6M in 1928.

New record low price for silver.

Fox film optimistic for 1930; budget is $30M, up $10M from previous year, of which $25M is for production of 48 feature films and $5M for new sound stages and equipment. Business for Q1 up 90% over previous Q.

American exports of industrial machinery for first 4 months of 1930 up 4% over 1929.

Coal mining and cotton manufacturing industries suffering from overcapacity and low prices; blamed on industry fragmentation.

Plays:

“Stepping Sisters” A boisterous farce-comedy about two burlesque queens who become social dowagers.

“Strictly Dishonorable” An Italian opera singer to the rescue of a southern plantation owner's daughter who finds herself deserted in a homey New York speakeasy: perfection in entertainment.

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