Assorted historical stuff:
Editorial: Gov. Black of the Atlanta Fed. takes a defeatist attitude in saying that the US must accept a lower standard of living and that the “load of debt around our necks” is the root of the problem. Contrast this with President Hoover's optimism: “Any retreat from our American philosophy of constantly increasing standards of living becomes a retreat into perpetual unemployment and the acceptance of a cesspool of poverty for some large part of our people.” Can Gov. Black really say going into debt has been a net negative for the American people? “Has there been any greater blessing than the building and loan associations which have lent billions of dollars to millions who would never otherwise have had the means to build.” Homeownership has stimulated people's desire for the other comforts of life, resulting in activity and progress; the fact that some excesses have taken place doesn't negate our whole course. “Governor Black says that what is needed in American business today is not confidence but courage. But surely courage lies in going forward, not backward. The American emblem is an eagle not a crab.”
Two Farm Board members say will concentrate on controlled production and cooperative marketing by producers as “sole salvation for American farm industry.”
Meeting of central bankers in Basel adjourns without joint policy on world crisis. Most said to believe general outlook is dark, end of depression not yet in sight.
Population of County of London in 1929 census was 4.430M, down 54,000 in last 8 years; birthrate in 1929 was lowest ever recorded, totaling 70,089.
Italy to send formation of 12 planes across the Atlantic to Brazil in December; planes will be Savoia-Marchetti flying boats with Isotta-Fraschini motors.
It has recently been found that only 20% of people in the US “avail themselves of any form of dental service.” Of those who do, most visit the dentist only to extract or fill a tooth. “This condition is deplorable, when it is recognized that teeth play a very important part in one's general health. Defective teeth have been the ultimate cause of numerous deep-seated ailments.” Doctors and dentists urge everyone to visit a dentist once or twice a year for a thorough examination.
Newest use for crude oil: “the most modern sky-writing apparatus uses crude oil which is ejected onto a heated steel plate ... it is simpler to use and makes a heavier cloud that is less likely be destroyed by wind.”
Market commentary:
Market wrap: Selling began in isolated stocks including GM, Colorado Fuel & Iron, and GE, then spread to other industrial leaders including US Steel, American Can, and Westinghouse. Banks and trust weak. Trading of leading stocks remained orderly, with good support on dips. Encouraging feature for bulls was market drop in volume on declines; this fit with prediction of dull, range bound period of trading marking a bottom. Bond market staged good recovery, with “buoyant tone” in many parts of the list; foreign govts. improved with many sharply higher; US govts. more active and higher; corp. higher, including lower grade and convertible.
Bonds have generally advanced over the past year from a low hit in Sept. 1929, with a strong rally in the 3 months up to Sept.
Agriculture Dept. sees downward trend in business nearing end; positive indications noted in machine tool orders, in textile and shoe trades, and in residential construction; usual length of business recessions is 12 to 18 months, and current one has been in progress for about 15.
Recent record buying of Std. Amer. Trust Shares (investment trust, similar to mutual fund) noted by J. Newey, Exec. VP; says foresight to buy “a cross-section investment of good common stocks” when prices are falling indicates “a rapidly increasing degree of financial intelligence ... on the part of American investors.”
Nat'l. Industrial Conf. Bd. sees future Russian oil production and expansion as important factor in oil situation.
Economic news and individual company reports:
US Employment Service reports seasonal increases in employment in some sections of the country during Sept., but surplus of labor apparent in many places.
Fed. Reserve reports money in circulation Oct. 15 up $10M to $4.497B, total Reserve Bank credit outstanding up $32M to $1.044B. Fed. Reserve member banks in NY city report brokers' loans down $152M to $2.752B vs. $6.801B in 1929, “all other” (commercial) loans up $69M to $2.535B.
Public utilities (gas, electric, heat, mass transit, water) had sales and operating earnings up vs. 1929 both for Aug. and for the first 8 months.
Electric output by US light and power industry for week ended Oct. 11 was 1,704 GWHr vs. 1,695 in prev. week and 1,782 in 1929.
World rubber industry facing crisis with even most efficient producers selling at loss; opinion divided on how to proceed.
Raw sugar prices have advanced 0.39 cents in the past two weeks to 1.39 cents/pound on brighter prospects for Cuban participation in stabilization plan.
Commerce Dept. estimates number of radios in use in the US as of July 1 at 13.479M; states with the most are NY with 1.752M, and Calif. with 1.470M.
Companies reporting decent earnings: Foster Wheeler (engineering/power), Bickford's (low priced restaurants), D. Emil Klein (cigars).
Musical theater:
Girl Crazy, a comedy with music by George Gershwin, starring Willie Howard, Ethel Merman, and Ginger Rogers; also appearing are specialty dancers including “Olive Brady, with her cart-wheel tap dance.” Set in “America's western and wide open spaces ... a rough villain in the vicinity has a habit of shooting each incumbent of the sheriff's office, one by one, hoping in time to be elected to the post by elimination. ... So Glieber Goldfarb [taxi driver, played by Howard] is selected to run for sheriff.” A highlight is Miss Merman's “barroom ballad about Samson and Delilah, instead of Frankie and Johnny, ... The number is executed in vigorous crescendo, rising to strident heights to the sound of blaring trumpets. Miss Merman has a voice, and for this type of singing she may well have no superior.”
Joke:
“An old farmer was complaining bitterly to the minister of the terribly bad weather for the crops, when the latter reminded him that he had much to be grateful for all the same. 'And remember,' said the good man, 'Providence cares for all. Even the birds of the air are fed every day.' 'Aye,' replied the farmer, darkly. 'Off my corn.'”
+ The Boring Stuff:
British Chancellor of the Exchequer Snowden says depression not as bad as pessimists believe; reports Britain has maintained a larger proportion of production than the US or Germany; estimates unemployment cost to government at 100M pounds annually.
Group of NY City executives organizes program for winter employment relief; seeks to contribute at least $150,000 weekly to provide work for unemployed heads of families in Manhattan and the Bronx; asks for government authorities to carry out program of new public works to increase employment, companies to maintain employment as much as possible.
J. Macy, Jr. creates fellowship to provide collaborator for Dr. A. Einstein in scientific research; foundation set up with initial endowment of $5M.
Dr. H. Dow, Pres. of Dow Chemical, dead at 64.
NYSE notes since 1924 international transfer of securities has been much larger than that of gold or bank credit (all of these are used to balance international trade).
Washington authorities minimize possibility raised in League of Nations reports that supply of new gold for monetary purposes may be inadequate by 1933; say current reserves are adequate and measures could be taken to prevent any future shortage.
14 investment trusts (similar to mutual funds) with investments in a wide variety of fields are now selling at an average discount over 33% from their net asset value; the largest discount is 69.6%. This reverses the situation last year when many managed investment trusts sold at a premium above their net value; at the time this premium was said to represent “the value of superior management contrasted with individual judgment.” In the past 10 days investment trusts have bought a substantial amount of stock estimated at $50M-$60M, said to be mostly for the “long pull.”
Broad Street Gossip: After the worst market decline in a long time, few look for a sustained recovery and many traders will be satisfied if the market fluctuates in a narrow range over the next several weeks. A big rise wouldn't be indicated by business conditions, while many consider prices too low to warrant another big break.
Some weakness yesterday attributed to extensive short covering in the previous few sessions; while stock loans continued to be difficult, this was now attributed to reluctance of large Exchange houses to make stocks available to bears rather than to an overcrowded short position.
Conservative observers still keeping customers out of market; recommend selling long holdings on rallies on theory market is not likely to move ahead in a straight line, and stocks can therefore be rebought during subsequent reactions.
Odd lot buying by small investors said to have increased sharply around the country during last week's declines.
Commodities weak. Grains down; wheat and corn particularly weak. Cotton down. Copper buying remains small, price unchanged but future trend seen uncertain. Zinc down to new multiyear low at 3.95 cents/pound.
Dow average of eight finished iron and steel products unchanged from previous week at $44.76/ton, low for 1930. Scrap continues down in major markets.
New life insurance in Sept. was 1.2% below 1929; Aug. was 8.7% below 1929; first 9 months were 0.2% above 1929.
In 1929, almost 7M pounds of fresh cut flowers raised in the San Francisco Bay region were sent by refrigerated rail cars to Eastern markets.
Vacuum Oil and Standard Oil of Indiana are selling to yield about 6% recently, the highest yields available for several years on better-grade oil stocks.
Recent pressure on GE reflects concern about price earnings multiple of about 27; management said very confident on earnings for next several years. Pressure on GM said to be based on premium compared with other automotive stocks and concern about safety of dividend (current yield is over 8%, and company is expected to earn its dividend in 1930).
Gillette recovered vigorously after announcement of Autostrop merger, up more than 10 points from recent low of 35.
G. Verity, American Rolling Mill Chair., says company has maintained dividends and wages through recent period of lessened business in belief stability in every phase of industrial life is the thing most needed to ensure continuous employment and prosperity. “Many outstanding leaders in commerce, finance and industry are of the opinion that the worst of the drastic depression ... is now over, and that a gradual improvement may reasonably be expected. An increase in our bookings during the past few weeks lends support to that view of the situation.”
In a crazy coincidence, I just ran across that dentist statistic one hour ago in the Robert Heinlein book "Beyond This Horizon." I thought it was an unreliable narrator's warped view of history. Had no idea it could actually be true!
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