July 12, 2009

Favorites of the week July 7-12, 1930

No Journal was published July 13, 1930. Once again, a collection of my favorite items of the week. These aren't a representative selection but just the ones that made me smile or take notice.

July 12:

[Note: I'm starting to see how the overcapacity problem might have developed.] In spite of current overcapacity in steel (production at 60% of capacity), the industry leaders including US Steel, Bethlehem, etc. are still investing in expansion. “It would be a poor country if the big industrial leaders threw up their hands and quit on every little depression”

July 11:

[Note: Strangely familiar department 1.] Investment trusts [similar to mutual funds] faced with some hard questions after being heavily invested before the market breaks both in October and June. Now developing “more thorough appreciation of the task of handling the large amounts of money entrusted to them” and realizing “the essentiality of constant study of conditions, general as well as particular.”

[Note: Strangely familiar department 2.] A subscriber suggests one cause of the current downturn may be a bubble in construction; level is 100%-150% above prewar vs. 50%-60% for general business.

[Note: If only t'were so department.] F.H. Medart points out that depression years of 1921 and 1930 both added up to unlucky 13; therefore, after 1930 there should be clear sailing until 2029.

Japan discussing ways to build a domestic auto industry - may help lighten impact of London Naval Treaty on shipyards. Current Japanese auto market is almost insignificant; domestic production is about 400 cars/year.

[Note: Theater was much more interesting then department.] Who Cares, a revue by the Satirists, Inc. Numbers include “The Hunting Ballet,” in which a troupe of 12 “grinning and prancing” men impersonate ballet girls; “While good-naturedly funny, it [acknowledges] the excellence of the original.” Also “Thisishota,” a parody of Lysistrata, and “So This Is Television.”

July 10:

P.K. Schuyler, pres. Federal Bridge Co., says automotive demand for roads and bridges has far exceeded capacity of government construction. "Traffic moves along the existing highways at a good speed for some five or 10 miles, then when the highway enters a congested area there is a considerable delay encountered, particularly on Sundays and holidays." Cars are now dependably capable of 60 to 80 miles per hour, "yet these speeds can be used only at infrequent intervals." Calls for more private construction, particularly of toll bridges.

[Note: Movies were much more interesting then department.] Cecille B. DeMille to make his first comedy with music, Madam Satan. Production features “a masked ball aboard a Zeppelin, and the breakup in mid-air of the giant airship, with the descent to earth of the passengers via parachutes.”

July 9:

[A brief note: The next item is one of my favorites. A common observation by people who like the blog is that lots of it could have been written today. Well, here's a review in the 1930 Journal ... of an 1830 book ... about events in 1720 ... and it still could have been written today! Addendum: Thanks to Eldon for finding this story online - the text is here; or download in a variety of reader formats here.] Washington Irving's book “The Great Mississipi Bubble” republished by Random House. "The story was written about a hundred years ago and the actual event occurred more than two hundred years ago, but the narrative ... will interest many who witnessed the recent debacle of stock prices." A couple of quotes from the book: The boom - "Every now and then the world is visited by one of those delusive seasons when the 'credit system,' as it is called, expands to full luxuriance; the broad way to certain and sudden wealth lies plain and open ... "; The bust - "a panic succeeds, and the whole superstructure built upon credit and reared by speculation crumbles to the ground, leaving scarce a wreck behind."

[Note: Sheer genius department.]
“In stocks of wood no longer should one bear incarceration,
but hand and foot are many put 'in stocks' for long duration.
At each 'new low' as the markets go locked up in stocks securely -
for a long time yet some folks will sweat bound hand and foot most surely. - Gordon Price”

July 8:

[Note: Amazingly high number considering US has about 250M registered cars and trucks now vs 27M then - US 2006 number was 42,642.] US car accident deaths in 1929 hit a new high of 33,060, including 81 on Independence Day.

[Note: Am I the only one who thought of C. Montgomery Burns when reading this?] John D. Rockefeller celebrates 91st birthday. Plans to breakfast, work for about an hour, then play nine holes of golf with a few neighbors. After lunch and rest, plans usual afternoon drive through Westchester hills. "I am in the best of health, surrounded by dear friends and have naught but good will toward all."

July 7:

[Note: How is it that modern machinery makes things take twice as long to build?] Col. W.A. Starrett, President of Starrett Corp. (construction), travels to England as delegate of President Hoover, presents film of construction of Bank of Manhattan building in less than a year [70 story, 927 foot skyscraper at 40 Wall St].

[Note: Hopefully not soon to be strangely familiar department.] At least 45 Florida towns and cities in default on bonds; committee recommends austerity, state sales tax on nonessentials.

[Note: This company is still around as Conwood; one of their brands is the oldest US trademark in use, having been registered on Oct. 25, 1870, the first day the USPTO granted trademarks.] American Snuff has one brand that's been a leader for 148 years.


  1. What a great blog!!! Thanks for your research. I would like to hear what you think.

    Correction or Blood on the Streets

  2. "Overcapacity"

    WSJ this week:
    German Steelmakers Cut Capacity

    GM Takes New Direction:Car Maker Leaves Bankruptcy; Will Slim Down, Court Consumers

    The Austrian Explanation: Causes of the Financial Crisis An elegant, easy to understand explanation of how overcapacity developed, written as an undergrad thesis!

    "[Note: How is it that modern machinery makes things take twice as long to build?]"

    -Perhaps because unions require shorter work weeks, and guilded workers are forbidden from doing any job that is not their specialty, and the Federal Register of Regulations is 100 times longer than then, which means 100 times more forms to be filled out before any work can commence! The "labor" involved in construction has expanded faster than the "labor savings" created by modern machinery.