Assorted historical stuff:
A Washington correspondent: Concerns about election results are almost always overdone. Still waiting to hear “what there is in the ... background and record of Franklin D. Roosevelt to lead to the belief that he is about to become a red radical, instead of the vigorous and magnetic person Washington knew as Assistant Secretary of the Navy ... The course for Democrats in 1932 is plainly outlined and it does not include a radical economic program but the opposite.”
Henry Morgenthau, former ambassador to Turkey, says another European war imminent, in which US will be forced to take part. Proposes 5-year postponement of war debt payments to US, with stipulation that any country acting as aggressor in a war would lose deferment.
Rep. H. Fish submits findings of Congress. committee investigating Communist activities; reports at least 400,000 sympathizers in US; recruiting actively in southern black communities, textile, mining, and shipping industries.
W. Johnson, W. Virginia State Treasurer, calls for “hard boiled system” for controlling govt. spending; “Our governments are over-manned. A few years ago it required one person out of every 22 to administer our governments - national, state, and local, but today it is one out of every 10.” Calls for 25% cut.
Brokers feed jobless - H. Hentz & Co. set up “rolling kitchen” on Monday near W 31 St. to feed unemployed; 3,000 fed breakfast Tuesday.
Even with aid of tugs, a 1,000-foot ship needs a half mile of free space to turn around. When the huge Imperator made its first visit to New York Harbor and was turning around to get into its berth, the amount of space needed was miscalculated; she ran into a wharf, bumped other ships, and caused $45,000 in total damage.
Huge triangular parachute, designed to save airplanes when motors go dead or propellors break, tested successfully at Wright Field.
Art exhibitions now at galleries include Henri Navarre, known for his glass work, shaped by hand while molten; Chagall, whose “medley of strange shapes and pictorial combinations do please the eye”; a group of dog studies by Morgan Dennis; and the Munson collection of historic portrait sculptures in wax, including one of John Calvin thought to be the only likeness in existence, a study of the dying Voltaire, and an Egyptian wax funerary head from about 700 BC.
Market commentary:
Market wrap: Bears exerted early pressure in attempt to extend decline, selling majors including US Steel and AT&T. However, powerful buying support came in, starting in US Steel, “representing reaccumulation by interests who liquidated in the early spring. ... Seeing this kind of buying in progress, the bears started a covering movement around noon”; prices generally recovered from early lows. Buying broadened in afternoon; major industrials worked higher; tire cos. strong on recent rally in rubber prices. Bond market mixed, volume below average; US govts. firm, foreign reactionary; corp. irregular, higher grade steadier.
F. Goodhue, Internat'l Acceptance Bank pres., criticizes bank practice of putting surplus cash in call loans on the stock exchange: “these so-called reserves in time of stress are apt to prove reserves only in name, not being based on self-liquidating transactions nor on securities eligible for rediscount” with Fed. Reserve. Practice of putting bulk of secondary reserves in call loans prevents Fed. Reserve from exercising its chief functions; banks continue it to avoid moderate loss of revenue.
Some fear that recent large number of bank closings will cause some liquidation of stocks held by the banks.
R. Stephenson, Amer. Bankers' Assoc. pres., says charges that credit extended for installment sales allows people to make committments beyond their ability to pay will persist until “agencies of consumer credit ... work out practices of administration which will prevent excesses in the extension of such credit.” Notes consumer credit has grown without setback up to now due to era of general prosperity, but “testing time is now here.”
Col. L. Ayres of Cleveland Trust Co. predicts 1931 to be year of progressive but slow improvement, conditions still below normal at end of year.
D. Friday, economist, says bottom of business depression reached in Oct. predicts 10%-12% recovery by spring.
Brokers report large increase in inquiries on any sharp multi-day rally; thousands of investors and traders seem to be waiting for “favorable moment” to buy stocks.
Economic news and individual company reports:
Co-receiver appointed for Caldwell & Co., collapsed investment banker; assistance needed due to scope of business, involving sizeable operations in 20 states. “Well-informed quarters” say National Bank of Kentucky failure due to Caldwell matter, not significant to national banking system.
Rail freight loadings for week ended Nov. 8 were 881,401 cars, down 53,239 from prev. week and down 167,567 or 15.9% from 1929 week.
Champlin, a small refiner, cuts midcontinent crude 10 - 20 cents/barrel; co. initiated last round of price cuts. Possible gasoline price war developing in Northwest.
Some price weakness reported in Southern scrap steel and iron markets.
Companies reporting decent earnings: Brooklyn-Manhattan Transit (BMT), Public Service of NJ, United Biscuit, Liquid Carbonic.
Stock market joke:
Question to the editor of Broad Street Gossip: The earth's age is set at 1.825B years and brokers' loans are at $2.235B. Soon, brokers' loans should be down to $1 a year for the age of the earth. Will the market then go up as the years increase? Reply - Ask Einstein.
Jokes:
“Maid - ... There are half a dozen men downstairs with vacuum cleaners. They say they have appointments to give demonstrations. Mistress - Yes, I sent for them. Put them in different rooms and tell them to get busy.”
“'Those girls look exactly alike. Are they twins?' 'Oh, no. They merely went to the same plastic surgeon.'”
+ The Boring Stuff:
Editorial: In the recent dispute between T. Lamont, who said the Smoot-Hawley tariff, while not a major cause of the depression, was inopportune, and Sen. Smoot, who defended the tariff, the facts are on Lamont's side. If “a nation wishes to sell, it must also buy.” Increased tariff in Canada, the largest buyer of US goods, will clearly hurt US exports.
Editorial by T. Woodlock: No need seen for proposed Federal Power Commission to regulate “interstate commerce” in electric power; field properly belongs to state regulators; bill would create “another huge piece of bureaucratic machinery, with all its attendant evils.”
Northeastern Governors to participate in Albany roundtable in Jan. to discuss unemployment situation; NY Emergency Employment Committee opens drive for $6M to place 20,000 men in jobs by Jan. 1. Alabama Emergency Employment Commission to meet Nov. 25.
Final 1930 Census report delivered; shows total population of 122,093,455.
Teapot Dome oil reserves now estimated at 24M barrels, down from first estimate of 135M.
Scheduled air lines carried 122,626 passengers in Q3, almost 3 times the number in Q1; Sept. passengers were slightly down from prev. month for the first time this year. Mail carried in Q3 was 1.919M pounds, of which 81,022 pounds were express. Average distance per trip in first 9 months was 245 miles.
Train vs. plane: average US freight train speed in July was 13.9 mph; average plane speed of Eastern Air Transport was 99 mph. Average load per freight car was 27.1 tons, about 100 times as large as average plane load.
Good demand by short sellers for stocks in the loan market. Short selling was reportedly resumed at the beginning of the week.
Stop loss orders reported more generally used than they have been in years. A number of brokers report heavy switching between stocks.
Action yesterday strengthened hopes that Monday's decline was a technical reaction to proceeding five-day rally. Market observers generally expected resumption of the rally, particularly since improvement came in face of unsettled grain markets and some reported weakness in copper prices.
Conservative observers remain encouraged, warn against following stocks up but advise buying on a scale on moderate reactions, discourage short selling.
Q4 earnings reports expected to be unfavorable for many cos.; however, based on experience, if business is improving early in 1931, the market should still go up.
Recent increases in “all other” loans attributed to buying of bankers' acceptances rather than increased commercial demand for credit. Bank investments last week were at a record high of $6.767B, up $1.166B from last year.
Number of stockholders in 49 textile cos. Mar. 31 was 36,289 vs. 35,333 in 1925.
A. Legge, Farm Board Chair, hits excessive cost of retail distribution, in agriculture and other fields, as one of the main problems facing the nation; defends federal financing of cooperative marketing agencies. Believes “corporation farming” not necessary to establish agriculture on a sound basis, would tend to “destroy one of the bulwarks of American national life ... the home life on the farm.”
Commodities weak. Grains sharply lower. Dec. wheat at Winnipeg sold almost 20 cents below Chicago price, which held at 73 cents due to Farm Board support. Liverpool prices were about 4 cents below Chicago vs. usual 15-25 cents above. Canadian govt. refused to commit to guaranteeing minimum price for Canadian wheat. Cotton down moderately. Major copper producers holding at 12 cents; some reports of offerings at 11 cents.
Gasoline stocks at refineries Nov. 15 were 37.263M barrels, up 251,000 in week; refineries operated at 64.2% vs. 63.8% prev. week; oil production was 2.305M barrels/day, up 7,300 from prev. week and down 315,450 from 1929.
Recent low of $2.235B in brokers' loans, while a record low for the official series kept since 1926, was not a record when compared to a previous, almost identical, series kept from 1917-1926; in that series, brokers' loans were below the current total in June 1925, and record low was $473.4M in Jan. 1918.
Combined production of 3 main feed grains (corn, oats, and barley) in 1930 estimated at 87.8M tons, down 12.4% from 1929.
Fall River, Mass. defaulting on some loans, state may be forced to put commission in charge of city finances.
American Machinist reports continued slow demand in machine tool market.
Substantial wage cuts proposed for British railway operatives and shopmen, and in coal industry.
Italy cuts govt. workers salaries 12% to close budget deficit.
Gold has flowed steadily into France for the past two years, with gold reserves increasing from 30B francs to 51.1B francs, or $2.044B. This is arousing concerns of serious inflation when the economy picks up again; as it is, the cost of living is up over the past year although wholesale prices are down.
British Oct. trade figures show better than usual seasonal improvement, though still well below 1929 levels; Sept. seen as bottom month for trade. Japanese exports for Oct. fall below Sept., imports rise.
US silver production in Oct. was 3.910M ounces vs. 3.780M in Sept. and 5.130M in 1929; world production in first 9 months was 161.9M vs. 163.7M.
German Ford sales in first 10 months were 11,000 cars vs. 8,000 in 1929.
Poland extends Kreuger match monopoly until 1965 in return for $32.4M loan at 6 1/2%.
Eastman Kodak puts workers on 5-day week to avoid layoffs; has more workers currently employed than a year ago.
Baltimore & Ohio and Northern Pacific rails are yielding over 9%, although earnings this year are expected close to or slightly above dividend requirements.
Gillette shareholders approve Autostrop merger.
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