Assorted historical stuff:
[Vive la France dept.] Prohibition movement runs into some difficulty in France. The Anti-Alcoholic League of France recently tried to get schoolchildren to sign a pledge of total abstinence. This was protested by 1.5M [!] wine grape growers. The French Minister of Education weighed in: “Any attempt to inculcate hostility to the glorious wines of France is more than deplorable ... I am about to take steps, either to ban the school manuals into which such heretical doctrine has been allowed to creep, or to have the publishers amend them so as to restore to wine drinking its true character in the eyes of the schoolchildren.”
[Always check the fine print dept.] International Labor Office at Geneva finds Soviet labor virtually forced; while workers can quit jobs with 7 days notice, they then become deserters.
House is insisting on rejecting Senator Couzens' amendment to the $116M emergency construction bill; this would require hiring localized labor at the highest prevailing wage. [Senator Couzens is most frequently quoted these days for his 1932 grilling of Mr. Sachs, as in Goldman, regarding their sale of Goldman Sachs Trading Corp. to the public at 104 a share (52 post-split), after which it unfortunately declined to a buck and change.]
Canadian pool to support stocks confirmed; formed by leading financial interests in cooperation with banks to prevent panicky conditions; believe Canadian stocks below intrinsic value; “strong interests have undertaken to buy stocks in almost unlimited amount on any marked recession.”
Editorial: Commodity exchanges should be self-regulated; the exchanges are more capable of managing themselves than any political agency, and in absence of abuses they should be left to it. Farm Board chair. Legge says the exchanges are run to benefit traders instead of producers and consumers, but in fact their success depends on giving producers and consumers the best and cheapest service; this service won't be improved by govt. meddling. “Let private business regulate itself and let the government cease from unnecessary meddling with it.”
Editorial: Sen. Borah, after opposing such “foreign entanglements” as the world Court, is now in favor of govt. financing of trade with Russia. Why is the Treasury being asked to finance Russian trade in particular? Because the risk is considered too great for private financing, and because it would be a path to recognition of the Soviet govt. regardless of the merits. There's no good case for this financing, nor have other countries had good experience with it.
Negotiations opened for tariff truce between Norway, Sweden, Denmark, Belgium, Luxembourg, and Holland.
British Labor govt. approves spending about $660M on construction projects in year to Sept. 30, to employ 500,000 men.
L. Gallopin, Mexican opponent of Lamont - de Oca debt plan, arrives in NY claiming he was kidnapped and spirited out of Mexico.
Italian Premier Mussolini blames Italy's financial condition on US stock market decline.
Group of congressmen headed by W. Hull (R, Ill.) protests ruling of F.D.A. requiring labeling of products using corn syrup.
New Orleans transport operators and public authorities investing millions to prepare for increasing trade volume after completion of Federal waterway projects.
First Nat'l Bank of Las Vegas to be opened Jan. 1 by San Francisco and Honolulu interests with capital of $100,000. Las Vegas will be junction point of new Union Pacific branch line to Hoover Dam.
F.T.C. reports increasing proportion of electric power exported across state lines; ratio in 1929 was 15.18% of power produced.
Henry Alonso House dead at 90 [prolific inventor, built first US steam-powered automobile in 1866, also invented machines for sewing buttonholes, knitting, paper plates, etc.]
Cotton used to make new type of airplane propeller, constructed of layers of canvas “impregnated with chemicals and built up by a secret process into a material as hard as steel which will not corrode and is moisture proof.” This propeller was used by the airplane Southern Cross on recent flight West across the Atlantic.
Market commentary:
Market wrap: Stocks irregular in morning, with market showing signs of “consolidating its position”; strong improvement started at noon, led by Eastern rails on consolidation prospects; rally broadened to industrial leaders and various specialties. Bond market again very strong; US govts. firm; foreign govts. rally on light trading; corp. up sharply on active trading. Commodities narrowly mixed.
Conservative observers encouraged by market action as indicating extension of rally; still don't advise “indiscriminate buying” but favor gradual buying of standard stocks on any good reaction, reserving some money for additional purchases if another sharp reaction takes place.
Action of Fed. Reserve to prevent possible new bank runs seen in $181M increase in currency in circulation over past week. Fed also acted to keep money market easy by buying $75B of govt. securities and $8M of bankers' acceptances.
Broad Street Gossip: The value of US crops has fallen about 28% from last year, but the fall in the Dow industrial average was about 60% from the peak. Difference is that the farmers got substantial aid from the govt. while the stock market didn't.
Broad Street Gossip: “The recent rally did more to dissipate the almost impenetrable gloom that had been hanging over Wall Street and the country than any developments in a long time. ... Last Wednesday morning ... pessimistic rumors were so numerous one couldn't keep a record of them ... When the rally ended at the close of business, traders had forgotten 99% of the bear's rumors, and went home happy.”
[Perils of knowing history dept.]The Old Timer: “When you feel gloomy and discouraged ... just remember that you felt the same way back in 1921, 1914, 1907 and other years of depression. You may rest assured that what you possess today will be worth much more a year from now. A man without patience, and with no faith in the country's ability to recuperate from depression, never accumulated a huge fortune.”
Insurance companies are reported investing a larger proportion of funds into dividend paying common stocks.
NY City banks security loans to non-brokers increase of $23M in week ended Dec. 17 seen as indicating “strong buying” by experienced investors; increase would have been $40M-$50M if figures from Bank of U.S. were included.
Municipal bond market improved toward end of week after bad start when issues by Philadelphia and Houston failed to sell.
Economic news and individual company reports:
Fed. Reserve Dec. bulletin points to strong position of member banks, with very low level of indebtedness to the reserve banks; credit expected to remain easy through the holidays [I assume this was written before the Bank of US failure.] Many plans under consideration for reorganizing Bank of U.S. and paying off depositors, but none has advanced far enough for official announcement by NY State banking superintendent. Only about 5% of depositors have applied for the offered 50% loans against their deposits.
First 17 states report new Nov. passenger car registrations down 47% from Oct. and 49.5% from Nov. 1929.
Bradstreet's and Dun's weekly reviews report give mixed picture; holiday buying and cold weather have stimulated buying volume close to 1929 levels, but value of trade is well below 1929. Cheaper lines of goods and staples are selling better, while luxuries and novelties are slow.
Prospects seen brighter for Eastern rail consolidation (by agreement among Eastern railroads). Administration believes final agreement would be very constructive for general business conditions. Harvard Prof. W. Ripley believes consolidation could allow more economic operation while preserving competition.
1930 paper production estimated at 9.962M tons, down about 9% from 1929.
Structural steel use in first 10 months was only down 1% over 1929, though orders were down 19.5%. Usage for 1931 is expected to increase based on inquries and upcoming projects.
Sears midwinter catalog passes on wholesale price drops; almost every item is substantially reduced. Average declines from 1929 midwinter catalog are 5.9% on furniture, 9.2% on electrical appliances, 16% on wool goods, 21.4% on copper products.
Canadian govt. reportedly comes to aid of banks, guaranteeing them against losses on 1930 advances to the Wheat Pools.
Russian Oil Products builds tanker terminal in Dublin.
Company reports since Oct. 1: 255 companies reported higher earnings vs. 1929 and 442 lower; 903 dividends unchanged, 90 increased, 164 cut.
Companies reporting decent earnings: Arundel Corp. (sand and gravel), Consolidated Laundries, Waldorf System (restaurants).
Upcoming movies:
The Bachelor Father with Marion Davies; Joan Crawford in Dance, Fools, Dance; Ramon Novarro in Song of India; Greta Garbo vehicle Grand Hotel; Winston Churchill's The Crisis; Tolstoy's Resurrection, with John Boles and Lupe Velez.
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