Assorted historical stuff:
Editorial: Influential groups in Great Britain now moving toward tariffs, including unions and Conservative Stanley Baldwin (he has “come out for 'safeguarding,' a pussyfooting synonym for protection”). Free-traders can't even hope for a tariff cease-fire now; reduced to hoping for creation of several large trading blocs that may subdue extreme nationalism, and that may eventually merge into a world with fair trade relations.
UPI - prominent German industrialist says proposed British tariff wall might further damage German economy, already dealing with 3M unemployed, budget deficit of 485M marks, and annual reparation payments of 2B marks. Says tariff would cause European retaliation but trusts in British common sense to avoid.
US has the world's only known deposit of helium, meaning world's airship operators will need to come to us or use highly dangerous inflammable gas, “because of which smoking must be prohibited in or near the huge gas bags.”
IBM begins mailing out automatically calculated and printed dividend checks to shareholders.
P.W. Bridgman, Harvard physicist, creates machine capable of record-setting pressure of 600,000psi (40,827 atmosphere) - can hard-boil an egg in ice water.
Steel and brickwork completed for Hotel Edison at 228 W 47 St.; Herbert J. Krapp, architect.
Market commentary:
Recent rally continued in morning hours; new highs on current rally by US Steel, American Can, Consolidated Gas, AT&T, other majors. Rally petered out later in session on profit-taking. Market also came under pressure from commodity news: wheat plunged to new post-1914 low below 86 cents/bushel, cotton off sharply. Volume turned lower on the decline, many stocks trading in a narrow range. Construction stocks under particular pressure. Banks and trusts lower.
Conservative observers still cautious, although many now believe market has established resistance level likely to hold.
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”
Auto industry pessimists should realize that with 27M cars on the road, “replacements alone guarantee a fair rate of activity for the industry.”
Tobey & Kirk surveys large number of bankers and corporate officials throughout the country. Reports current business conditions below normal almost everywhere, but increasing confidence in the immediate future; widespread expectation of early fall upturn.
“Getting up against stop[-loss]-orders has made half the gray hairs on Wall Street.”
Many investment trusts [similar to mutual funds] selling well below total asset values. Biggest discount - Goldman Sachs Trading Corp. selling at about 50%.
Economic news and individual company reports:
Refineries said to be making progress in cutting production to reduce excessive gasoline stockpiles. Situation still unsettled in California - uncontrolled price cutting, with retail gas selling anywhere between 8 and 16 cents/gallon on the Pacific Coast. Oklahoma oil operators meeting to decide on additional 20% production cut to match refinery curtailment; Pennsylvania oil cut to $2.10/barrel from $2.25 due to local overproduction.
NY State Industrial Commissioner Frances Perkins reports number of employed factory workers in state down 2% in June from May, 14% from Oct. 1929. Decrease larger than usual seasonal pattern, large May-June layoffs in metal, textile, and clothing industries.
Class 1 railroads as of mid-April had a total of 1,572,566 employees, down 5.6% from 1929.
Manhattan building plans filed in first half totalled $80.8M for 362 buildings vs. $419.8M for 654 buildings in 1929.
Air mail sent in June averaged 27,226 pounds/day vs. 26,425 in 1929.
Woolworth and National Dairy earnings reported holding up well in spite of lower sales volume. [lower raw material prices?]
Joke:
“First New-Englander: So you had an operation on your nose? Second New-Englander: Yes, it was getting so I could hardly talk through it.”
+ The Boring Stuff:
G.M. Walker, economist, says silver decline is an effect, not a cause, of Chinese and Mexican economic problems; instability in those countries has required them to import large quantities of food, resulting in large-scale silver sales.
Investment grade bonds generally stronger, particularly foreign and rail; US government slightly lower.
Recent increased optimism may be due to “the rise in the market itself.” Much of the nations' wealth is in securities. 10 million or more shareholders may find it “hard to work up enthusiasm when what they own is shrinking day after day.”
Dun's Review: no significant change seen in business conditions, restricted demand and price declines still dominating; but hopes for upturn after the normal seasonally slow summer period.
Total listed shares value June 2 was $75B, with $4.75B brokers' loans (6.3%); total at start of July $63.9B, loans $3.7B (5.8%). Ratio July 1929 was 9.2%.
Board of Grain reports increased wheat exports last 2 weeks of June, but still expects a large carryover from this year's crop in US and Canada. This year's grain crops expected substantially larger in both countries in spite of efforts to reduce acreage planted.
US sugar consumption for first half estimated at 2.86M long tons, down 5% from 1929.
Locomotive shipments up in first half (419 vs. 319), but orders way down (269 vs. 521, very few in June). Operations later in the year expected sharply lower.
British imports in June were 83.4M pounds vs. 91M in May and 91.5M in June 1929; exports were 42.8M vs. 51.0M in May and 49.9M in June 1929.
Montgomery Ward extends easy payment installment plan to all purchases over $25 except groceries.
White Rock Mineral Springs (mineral water and soft drinks) first half profits $2.38/share vs. $2.08/share in 1929.
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