December 22, 2009

Monday, December 22, 1930: Dow 169.42. +0.43 (0.3%)

Assorted historical stuff:

Washington report: Pres. Hoover credited with successfully cracking the whip on Congress, a turnaround from his previous reputation of giving way too easily. Farm Board's need of new $150M appropriation was severe; testimony showed Board was down to its last $2M. Washington seen more realistic on depression, “turning a cold eye on the various sponsors of panaceas.” White House denies reports Pres. Hoover plans to call extra session of Congress to take up World Court protocol. House Dem. leader Garner taking early steps to “organize” the next House; which party does this is likely to remain unsettled to the last moment.

[Some surprisingly high numbers.] R. Ashton, Amer. Railway Assoc. pres., estimates cost of waste, loss, injuries, and deaths due to motor traffic in 1930 as about $3B, or three-fourths of the entire Federal budget. Suggests education, action by states and cities, uniform laws. Number of US homes wired for electricity has doubled to 20M since 1923 reaching about 68% of US homes. Domestic electric use has continued to grow well although industrial use is down. Total electricity usage in first 9 months was up over 1929, but has shown small declines vs. 1929 in recent weeks.

Eastern rail presidents reported meeting on consolidation; Washington authorities said urging them to settle differences. ICC would of course have final say on any plan.

[Strangely unfamiliar.] French Minister of Justice announces proceedings against 181 bankers, of whom 35 were arrested.

Spanish Gen. D. Berenguer reportedly decides to end dictatorship, bring about parliamentary rule.

Argentina Fed. of Industry advises increased purchase of British goods in exchange for British purchase of Argentine agricultural products.

Woolworth London store selling light bulbs at suspiciously low 12 cent price; Sir H. Hirst, British GE pres., believes bulbs were dumped on market by Russia.

NY and NJ officials discuss construction of second tunnel to be built by Port of NY Authority between 38 St and Weehawken [Lincoln tunnel].

NY Gov. Roosevelt Agric. Advisory Committee recommends setting up state-controlled regional food markets as outlet for farmers and to reduce costs.

Col. Lindbergh's farmhouse in New Jersey, bought to get away from curious crowds, is being overrun by curiousity seekers “swarming over the place every Sunday ... picking up anything that is loose for souvenirs.”

A wealthy Wall Street man has hired 10 unemployed men and women to address and deliver his Christmas cards this year.

Goodyear-Zeppelin Corp. new airship dock at Akron, Ohio recently completed [world's largest structure without interior supports, dimensions are 1,175 feet long by 325 feet wide by 211 feet high]; opening guarded by two steel doors weighing 600 tons each.

[Finally studying something useful dept.] Standard Brands establishes research fellowship at Yale Univ. for study of chemical changes that occur in coffee as it ages.

Only one of 130 mail bags has been recovered intact from the wreck of the St. Sunniva steamer on the Shetland Islands last April. The mail was recently delivered to the recipients; all of it consisted of demand notices from the income tax collector.

Market commentary:

Market wrap: Stocks continued to show improved tone; trading was light but most activity was upward, with particular strength in autos, utilities, tractions, and some specialties recently under bear pressure. Bonds continue strong rally; US and foreign govts. generally steady, corp. very strong with widespread sharp rallies. Commodities mixed; cotton up, grains weak.

Week in review: Selling climax in stocks reached at start of week; sharp turnaround to rally mid-Wed.. Trading slowed at end of week. Sustained recovery expected into new year. Action in bonds similar to stocks, with sharp rally following drastic decline. Money market steady in spite of banking emergency caused by Bank of U.S. failure and runs on other banks; prompt Fed. Reserve action credited. Steel forward buying improved. Grain prices very weak, though near-term wheat months were supported by Farm Board. Cotton hit new low, then rallied irregularly. British gold drain continued. Far East silver currencies weak.

Conservative observers still advise picking up standard stocks on reactions, using stops to protect accounts.

Demand by short sellers in the stock loan market was slow.

Recent action has demonstrated danger in shorting stocks with small number of shares outstanding; Auburn, J.I. Case, and Worthington Pump have rallied sharply.

Broad Street Gossip: “For several months, one heard of nothing but 'distress selling.' Now, one hears about 'distress buying.'” [short covering]

Better stock market prospects seen into the new year. Sharp upturn in bonds and rail stocks (Dow 40-bond avg. up over a point, rail avg. up 8 points) over the past few days should greatly help sentiment. Respite seen from bad news until yearly earnings reports begin in Feb. Seasonal steel upturn expected.

An officer of Elec. Household Utilities Corp. sees business recovery soon based on optimistic reports from NY together with pessimistic ones from the West; based on theory that business changes travel across US from East to West, this indicates upcoming improvement.

So. Cal Edison pres. R. Ballard says business conditions in their territory about 90% of last 5 years average; while unable to predict 1931 outlook for US as a whole, sees no doubt California will have “early return to normal conditions.”

About $400M of fixed investment trusts (similar to ETF's) will be in US investors' hands at end of 1930, roughly triple the volume distributed before 1930.

Old investment trusts in England and Scotland were reportedly consistent buyers of standard dividend paying stocks during the last market decline.

Commerce Dept. reports German business poor, difficult winter expected; Japan and China improved; Latin and South America slow, with some modest improvements.

July wheat futures hit 66 5/8 cents, low since 1901, before recovering to 67 1/8, but earlier months remained 10 - 14 cents higher due to Farm Board support.

Economic news and individual company reports:

Treasury reports income tax receipts Dec. 1-18 were $367.3M vs. $410.4M; for July 1 - Dec. 18 $977.8M vs. $1.079B.

Editorial: Agriculture Dept. estimates for upcoming wheat planting presents sobering picture; winter wheat crop alone may provide enough for US supply, leaving spring crop as surplus. Argentine, Australian wheat crop estimates much above last year. Farm Board may have its hands full in continuing to support wheat prices.

Per capita wheat consumption has been declining in US and Europe but increasing in South America, Africa, and “East Indies.”

Irving Fisher's index of 200 commodities for week ended Dec. 19 was 79.4 vs. 79.8 previous week and vs. 92.8 a year ago.

Oil discovered in Eastern Colorado, Northern Wyoming.

Worldwide tin producers negotiating production cut along similar lines to sugar producers (Chadbourne plan).

Sentiment in silver market improved on Mexican plan for stabilization; prices remain near record low of 31 5/8 cents/ounce.

Butter and egg futures recovered slightly toward end of last week (after falling to record lows for the season midweek).

Sales of electric clocks in 1930 estimated at double to triple 1929 total of 350,000 units.

Companies reporting decent earnings: Cudahy Packing (meat), Chesapeake & Ohio Rwy. (against industry trend).

Some 1930 profit estimates: AT&T $10.50/share vs. $12.67 in 1929; Westinghouse above $2 vs. $2.78; Macy's - $5.45 vs. $6.70; Sears $3 vs. $6.62.

L. Rosenwald, Sears VP, says fall trade is below expectations; volume compares well with 1929, but “marked tendency to purchase cheaper merchandise.” Outlook for 1931 unclear, don't expect much encouragement in spring.


“Lady - can you give me a room and a bath? Clerk - I can give you a room, madam, but you will have to take your own bath.”


Birth of a Nation, revival playing at George M. Cohan Theatre with new synchronized score and battle sound effects. Film remains “one of the masterpieces of the cinema, despite its distortion of historical events and excessive romanticism,” although most of the new sound effects “remind one of the cracking of George Lewis' Indian nuts in Once in a Lifetime.”

Tom Sawyer, starring Jackie Coogan - “thoroughly delightful entertainment”; adult viewers “will find themselves being transported back to their childhood by many of the scenes” while children will share the characters “manifold joys and momentary sorrows.” A faithful adaptation of the novel. [Viewable on Youtube:]

Play "Tom Sawyer 1930" on Youtube

No comments:

Post a Comment