August 8, 2009

Saturday, August 9, 1930: Dow 222.82 -9.87 (4.2%)

Assorted historical stuff:

Entertaining description of S. Langley aircraft attempt at flight by Joe Cannon [I assume a Republican]: “It starts off with a mighty whang ... it bobs about hysterically, it whets you into expecting a lot, seems right on the edge of soaring into the empyrean; it puffs and blares - and bunks. It ought to hobble over here to the capitol and sign up with the Democratic Party.”

NY Life Insurance Co. reports heart disease has increased from causing 13% of deaths in 1920 to 17% in 1929; based on US and Canada policyholder, considered a reliable cross-section of population. Death from all circulatory disease including heart, arteries, and kidneys, was 31%, top cause of death.

Census Bureau reports US population as of April 1 was 122.698M, up from 107.509M in 1920. All states but Montana have increase, highest increases are California 65.5% to 5.672M, Florida 51.4% to 1.467M. New York up 21.5% to 12.620M

Commercial Trust Co. of Kansas City says will not employ married women due to unemployment situation.

D. MacMurphy, VP Middle West Utilities Co., calls newspapers the main advertising medium, billboards, direct mail, radio secondary. Unlike other media, newspapers don't force ads on the reader; therefore, “in the newspaper, an advertisement runs no risk of offense.” Also believes humans are visual animals; “possibly our ancestors became eye-minded in leaping from tree to tree,” where good eye-brain coordination was necessary.

Despite short history of aviation, airplane models are already being collected; several companies have been formed to produce them.

George Bernard Shaw to permit sound filming of one of his plays, says “the poor old theatre is done for.”

RKO contracts with G. Spoor for production of 3 films using his 3-dimensional process.

Sanitary single-use lipsticks now available, coming in a small matchbook-like container.

Reports that leading cigarette companies will introduce “matchless” cigarettes, to be lit by striking on side of box.

Market commentary:

Stock prices plunged on heavy volume; attributed to bad news from US Steel (production down to 61%), Warner Bros (omitting dividend), and worries about effect of drought on rail earnings and farm incomes. Volume increased as day progressed. Bears agressively attacked US Steel, successfully breaking last week's resistance level. Large declines in major shares including American Can, Westinghouse, GE, AT&T, Consolidated Gas, and in trading favorites including Vanadium, J.I. Case. Rails, utilities, banks and trusts particularly weak. Bond trading volume up; convertibles, preferreds, speculatives weak; investment and govts. steady.

Current market conditions viewed as contest between bull and bear professionals, with little public following to either side. “Leading observers” trying to keep customers out until stocks break their trading range to either side.

J. Barnes, Chamber of Commerce chair, says worldwide depression will “end upon a manifestation of revived confidence” which will unlock idle capital.

British Electrical & Allied Mfg. Assoc. sees “danger point” in world economic crisis in summer of 1931. Blames crisis on inability of gold standard to adapt to reparations and American debt settlements.

Old Timer: “The sun has always shone again after the clouds have passed; business has always gotten better after it has been poor and, last but not least, the stock market has always gone up again after it has had a decline.”

Economic news and individual company reports:

US Steel ingot production at 61% of capacity this week vs. 64% last week.and 97% in 1929. Drop was unexpected; production was anticipated to increase slowly over the next few weeks and more strongly in fall. Orders not yet apparent from resumed auto production.

Rubber now selling below 10 cents/pound, new low record, and about half average cost of production.

American tourists in Canada and Europe in 1928 left $818.6M in money spent abroad.

Companies reporting decent earnings: Foster Wheeler (engineering/power), American Ice, Commercial Investment Trust (CIT), Wheatsworth (biscuit), Bon Ami, General Refractories (industrial brick - generally replaced when business is slack).


Complaint of the three-times married man: “I knew ... that it was one of my wedding anniversaries, and to save getting bawled out bought a present. Well, if I was still married to my first wife it would have been all right.”

+ The Boring Stuff:

Editorial: Fed. Reserve seems determined to maintain easy money policy until business recovers; this may result in large gold exports. While we have an excess of gold and so can afford this, it still might not be a good idea. “A policy of maintaining easy money by artificial means is all very well up to a certain point, but to pursue it when gold is going out of the country presents another problem. ... The Federal Reserve will do well not to rush pell mell into a course [they might later regret].”

American Bar Assoc. calls for reform of Sherman antitrust act to allow smaller producers to cooperate without fear of prosecution; says law as currently enforced “foredooms the small producer to destruction.” Suggests empowering Federal Trade Commission to examine proposed group actions “in the light of day,” and, if found consistent with public interest, to immunize the group from prosecution, though legality of actions would still be decided by courts.

Number of strikers protesting new social insurance tax in northern France increases to 135,000.

Some unrest reported among central-eastern Europe farmers; fears of “peasant revolt” in Rumania; attributed to high debt, acute agricultural depression.

Manchester cotton trade more optimistic in spite of continued slow business; India expected to be forced to buy soon to replenish low stocks of cloth.

Corn, wheat down sharply; govt. forecast possible break in Midwest drought next week. Cotton down sharply to season lows on higher than expected govt. crop forecast of 14.362M bales, down 566,000 from last year.

Drought continues with little relief in Western states, Louisiana, Texas, Arkansas, Missouri. Some rain in Iowa, Nebraska. President Hoover said devoting almost all time to drought situation, calling meeting of governors from drought-stricken states for next Thursday. Still gathering information, no definite steps announced yet.

Survey of building industry finds general opinion that any business revival would quickly be reflected in the industry, due to comparatively long lull in residential building, together with thorough deflation of rents. Some oversupply remains in apartment housing, but not in individual homes.

July bonds, notes, and stock offered by domestic corporations were $396.6M vs. $468.9M in June and $867.1M in July 1929; lowest total this year.

Japanese trade surplus for first 7 months was 211M yen, down 50M yen from 1929.

Panama Canal tolls estimated down $1M in 1930 from $27M in 1929.

Cleveland employment down 4.3% in June; index 99.4 in July vs. 103.9 in June and 124.2 in July 1929; lowest index since Dec. 1927.

July building plans filed in Manhattan were $33.5M, gain of $1.85M over 1929; first month this year showing gain.

July awards for construction in northern Illinois including Chicago were $20.2M vs. $36.7M in June and $39.0M in July 1929.

Firestone Tire celebrates 30th anniversary; now employs 15,000 workers, capacity of 80,000 tires/day.

Continental Can stock about 56, earned $5.02/share in 1929, yield about 4.5%, sales in first half better than 1929.

August 7, 2009

Friday, August 8, 1930: Dow 232.69 -1.69 (0.7%)

Assorted historical stuff:

Editorial: Germany, Britain, and the US are finding that “rationalization” (automation) “sets much labor free - free, that is, to hunt a job.” While some economists believe rationalization is in the long run good for labor, in the short run it creates overcapacity, reduced requirement for workers, and the need to keep volume production going because of high capital investment and overhead. However, this has been going on for a long time (Francis Walker described the problem 50 years ago), so history suggests the problem will work itself out.

National Retail Credit Assoc. maintains a card index of credit customers with over 60M “master cards,” filed in over 1,000 credit bureaus serving over 200,000 merchants. “Any one who buys even the smallest item on credit goes into the index.”

M. Woll, AFL VP, criticizes Ford's production of tractors in Ireland for import into US as unpatriotic.

Industry planning for regular trans-Atlantic Zeppelin service year-round; thought feasible, but $4M cost per ship probably would require government help. To be successful, service would probably need to be at least weekly, and be two days faster than steamship travel.

Queens Planning Commission hears from F. Lyon of Atlantic Suspended Monorail Corp. and G. Fish of Westinghouse, who testify that cost of constructing a suspended monorail would be far below cost of subway or elevated lines. Another meeting scheduled for early fall.

Welfare Council of NY estimates weekly expenses for young woman in NY City as $25/week ($8 rent, $10.50 food, $3.85 clothing, $1.25 carfare, $1.40 misc).

General Outdoor Advertising Co. ordered neon sign to advertise Hell's Angels movie; uses over a mile of neon tubing.

Margaret and Mary Gibbs lose decision to White Star Line; attempted to book single ticket on Majestic liner to Europe on grounds they are Siamese twins.

Market commentary:

Selloff continued most of yesterday's session; substantial declines in can shares (American and Continental), grain-carrying rails, US Steel; other major industrials also down. Professional buying developed as bottom of recent trading range approached; “experience operators were encouraged” by this support and “professional buying ... proceeded with increasing confidence” later in session, leading to improvement after noon. Investment grade bonds higher, particularly rails, govts. firm. Dow bond index at high for past two years.

Market resistance to declines below 230-240 trading range over the past 3 weeks taken as encouraging sign, pointing to “thoroughly liquidated” market.

“Low inventories, cheap money, much cash in the banks and savings institutions, and the optimistic spirit of the American people are all factors which must work to the advantage of the bulls as time goes on.”

Conservative observers note market has been in 11-point trading range since July 18, continue to advise staying on sidelines until market breaks out of range.

E.A. Shumaker, Pres. RCA-Victor, calls for optimism on business: “Overproduction has been absorbed and the ball of enlarged business opportunities will start rolling shortly.” Says plans to run their own plant “at capacity until it is proven that we are wrong.” Also predicts television soon, describes new combination radio-phonograph-microphone set allowing owners to record radio broadcasts or their own voices.

Economic news and individual company reports:

July US auto output 275,298 cars and trucks vs. 350,565 in June and 518,301 in July 1929; first 7 months 2.606M vs. 3.931 in 1929.

T. O'Connor, Chair of US Shipping Board, warns shippers to stop “destructive rate cutting” endangering industry, says if current “deplorable situation” doesn't improve, industry may be placed under regulation of the Interstate Commerce Act.

Miami joins 45 other Florida municipalities in default on bonds, including St. Petersburg, Ft. Lauderdale, West Palm Beach, Sarasota. Florida credit has declined so far that no municipal bonds have active markets. Problems include real estate bust starting in 1925, subsequent hurricanes, Mediterranean fruit fly invasion of 1929, and bank failures over past 2 years.

Companies reporting decent earnings: Pullman (passenger rail cars), American & Foreign Power, Interstate Dept. Stores, Western Auto Supply.

GM and Ford combined for 75.4% of new US auto registrations in first half.

Upcoming movie news:

“In line with its recently announced policy of encouraging the new generation of American writers, Warner Bros. has purchased The Devil Was Sick, described as 'a naughty farce,' by Jane Hinton. The play, which is Miss Hinton's first, will be produced first on the talking screen and later on the legitimate stage.”

+ The Boring Stuff:

Republican Natl. Committee member R.B. Greager announces President Hoover plans to run for reelection in 1932.

Editorial: Unlike the exaggerated farm “emergency” of last fall, drought has now caused a real emergency that the Farm Board and other government agencies are justified in using strong measures to counter. They should cut red tape, help move food into shortage areas, and livestock where they can be fed. Also justified are special credits and lower rail rates to help farmers harvest surviving crops, though we should keep an eye out for those taking “unfair advantage.” This emergency finally “gives the [Farm] Board something better to do than artificial price-fixing.”

Number of licensed aircraft June 30 was 9,773; there were 13,041 licensed pilots and 8,843 mechanics.

US Dept. of Agriculture to provide hourly weather reports by teletype on 8,000 miles of airway routes.

Eastern Air Transport to start daily New York-Richmond line, also serving Newark, Philadelphia, Camden, Baltimore, and Washington. To use Ford tri-motor planes powered by Wright Whirlwind engines, equipped with Gyro Horizon and automatic pilot by Sperry Gyroscope Co.

NY City Mayor Walker's transit advisors conferring on unification of Brooklyn-Manhattan Transit (BMT) co. with new city subway; to discuss value to be assigned BMT company “based on different theories of valuation.”

Grains continued up on high volume, though some selling resistance developed and closing prices were well below day highs. Cotton up. Corn now up about 50% in past month, wheat about 15% Some traders have apparently switched from stocks to commodities due to recent reports of drought damage.

Standard American Corp. predicts rise in market on technical grounds: “A restricted volume of trading, accompanied by a moderate but definite rising tendency, is usually the forerunner of a market advance;” further encouraged by reduced volume on declines; sees possibility of “buoyant tendency of considerable vitality” if general business improvement joins with the strong technical foundation.

Trade reports obtained by Wall Street houses are mixed; sentiment is reported optimistic because of production cuts and hand-to-mouth buying leading to low inventories, but some disappointment because “definite signs of recovery predicted for the end of July have not yet appeared.”

Brokers' loans down $14M in week to $3.214M.

US exports of industrial machinery for first half were $132.1M, up $6.3M over 1929.

Farm Board offers to arrange loans to farmers to buy feed from surplus held by Grain Stabilization Corp. Agriculture Sec. Hyde urges farmers to avoid panic dumping of livestock on the market. Railways pledge cooperation. Anticipated that much of the grain surplus can be disposed of.

Cuban sugar producers organize committee to study world sugar problem; say they are willing to cooperate with world sugar producers to stabilize prices.

Rubber, copper companies suffering from low prices; one large rubber co. rumored near bankruptcy; some higher cost copper producers suspending operations.

July rail locomotive shipments were 56 vs. 81 in June and 69 in July 1929.

Highest paid of building trades was bricklayer, avg. wage $1.65/hour; average of 17 trades was $1.185/hour.

F.W. Woolworth selling for about 16 times 1929 earnings, yield about 4%.

August 6, 2009

Thursday, August 7, 1930: Dow 234.38 -4.09 (1.7%)

Assorted historical stuff:

Much interest recently generated by case of a visiting Turk reputed to be 156 years old. The climate or food of Turkey may account for longevity of many of its citizens. The New York Life Ins. Co. has just investigated many claims of people to be 110 or older without finding any authentic cases; a few of their policyholders have reached 100, with the oldest being 102. Oldest policyholder of any US or European insurance co. was 106.

Severe drought conditions prevailed over much of the US at end of July, drought as long as eight months in many sections; both winter and spring were exceptionally dry in large parts of the country, with rainfall below 50% of normal in many places; July was dry and very hot, intensifying the drought.

Editorial: Strengthened laws will enable NY State Banking Dept. to more strictly oversee private banking; this may improve matters. Purpose of private banking regulation was to “safeguard the poor and ignorant classes from irresponsible adventurers,” so previous laws were focused in that direction, and excluded “the large private banking institutions of standing.” These laws, however, were too easy for “unscrupulous concerns” to evade, as reflected in some recent scandals. New law gives Banking Dept. more power, should be an improvement if well enforced.

Over past 30 years, US death rate from typhoid fever has been reduced from 34 per 100,000 to less than 5; tuberculosis from 200 to less than 78.

Over the past 40 years, New York Telephone has gone from 8,000 to 1.150M subscribers.

AFL Pres. Green visits White House, says agreements to support wages and working conditions reached in last Nov. unemployment conference have been kept.

Mexican Fin. Min. L. Montes de Oca welcomed by 400-500 people on his return to Mexico City following successful debt settlement negotiations.

Market commentary:

Market surprised by Iron Age report of cut in steel production to 54% from 56% last week, after expected seasonal increase from automotive demand and public optimism from US Steel. Selling wave started with Steel, spread to other current leaders including American Can, Westinghouse, Standard Oil NJ, Radio, Vanadium. Utilities, oils lower. Investment-grade bonds continue firm; have advanced for past two weeks, well into highs for year. Govt. bonds dull, steady.

W.C. Teagle, Pres. Standard Oil NJ, sailing on the Berengaria for vacation abroad, calls for more cooperation in oil industry to address overproduction.

Some optimism that new Canadian govt. tariff plans won't seriously damage trade; Conservatives expected to concentrate on aiding domestic production, and many US products don't compete with Canadian industry. Previous Canadian tariff law was enacted May 2; US-to-Canada exports were down about 26% in May vs. 1929, but much of the decline was due to the depression; 40% of Canadian income is agricultural, which has been badly affected by commodity price declines.

Editorial: Commodity price decline is most obvious obstacle to economic recovery. Opinion is now increasing that commodity prices are stabilizing; this is so far based more on feel than any statistical evidence. However, prices have declined about 15% on average since last summer, a bit more than postwar deflation; it's therefore reasonable liquidation has “been practically completed,” since the accumulation of unsold goods last fall was much less than in postwar period (1920).

One broker notes that at least there is no current overproduction of stocks; since last October, almost all financing has been through bonds.

Heard on the Street: “Many of the wheat shorts ... will feel the heat wave in more ways than one.”

Economic news and individual company reports:

German market hit peak in May 1927 after success of economic stabilization, has been mostly declining since; company earnings peaked in 1928. Average yield for listed dividend-paying stocks now about 7%, some leading shares have higher yields.

July building contracts in 37 states east of Rockies $367.5M, down 39% from June and 44% from July 1929.

Decline of 16.6% in freight car loadings for week ended July 26 was largest so far in 1930.

French govt. increases aid to shipbuilders, including $10M of direct aid and reducing loan rate to 2%; French shipyards operated at 26.7% of capacity last year.

Companies reporting decent earnings: General Mills, Economy Grocery, MacAndrews & Forbes (licorice, mainly used to flavor cigarettes), Holland Furnace, Public Service Corp NJ (utility).

MacAndrews & Forbes stock about 30, earned $3.13 last year, paid $2.85 in dividends.


“'Is this train ever on time?' growled the grouchy passenger.
'Oh,' replied the conductor, 'we never worry about it being on time. We're satisfied if it's on the track.'”

+ The Boring Stuff:

Nanking govt. in China turning to local bond market to borrow at rates of 9%-13%, probably due to foreign terms being too harsh. Policy is aided by severe decline in value of Chinese currency making it less profitable to send money abroad. Govt. seems aware of importance of maintaining credit, unlike defunct Peking govt., which borrowed “from any source, at home or abroad, at almost any terms.”

About 45,000 textile workers join French strikers demanding raise to compensate for compulsory 4% social insurance premium.

R. Brown, former Pres. Manhattan Electric Supply, 24 others subpoenaed by Federal grand jury to investigate pool that ran the stock from 20 to 55.

Union Pacific Railroad to build 30-mile extension from Las Vegas to site of Boulder [later Hoover] dam.

Third African-American owned bank in Chicago, Citizens Trust & Savings, closes due to run.

Radio Manufacturers Assoc. trade show last year in Atlantic City drew 20,000 “radio jobbers, dealers, and manufacturers.”

Commodities mostly up. Wheat up sharply, corn very sharply; very high volume, sizeable short-covering and public buying seen. Cotton up. Rubber off to new record low (10.20 cents, down about 11 cents from 1929). Public has apparently “finally realized” there has been heavy damage to crops due to heat and drought . Ultimate effect on livestock prices should be bullish, though there may be a run of “unfinished” livestock to market first, temporarily depressing prices.

Stocks failed to rally on higher commodity prices, particularly sharp rises in wheat and corn.

Conservative observers still cautious, advise taking profits on rallies and staying on sidelines until stocks break out of trading range.

June net operating income of 172 class 1 railroads was $68.9M vs. $105.8M in 1929.

July steel ingot production was 112,823 tons/day vs. 137,610 in June and 186,561 in July 1929.

June electric output was 7,748 GWHr vs. 7,768 GWHr in 1929; improvement from May 1% decline vs. 1929. However, output in week ended Aug. 2 was 2.7% below 1929 level. Output has been flat to down since start of year, but utility earnings have generally held up.

July new bond offerings were $508.8M, down from $525.4M in June but up from $242.1M in July 1929. Largest category was utilities, 44%.

Nat'l. Assoc. of Mutual Savings Banks reports number of depositors in savings banks increased 293,683 between July 1, 1929 and 1930. Encouraged that such an increase took place in face of market crash and increase in unemployment.

British registered unemployed 2.011M on July 28 vs. 1.973M on July 21 and 1.544M on July 29, 1929.

Canadian fur industry has traded over 100,000 silver fox pelts in past year, about 98% raised on ranches.

Agriculture Dept. reports 1930 lamb crop about 2M head or 8% above 1929, demand well below; causing trouble for western sheep growers, substantial cut in production expected over next 2-3 years.

GM first half Q2 net was $1.34/share vs. $0.98 in Q1 and $2.01 in Q2 1929.

F.W. Woolworth July sales $20.737M, down 7.9% from 1929; first 7 months sales $152.057M, down 3.9%.

White Motor Co. (cars) stock about 31, earned $1.31 in first half (down 25% from 1929), annual dividend rate of $2, working capital of about $35/share.

August 5, 2009

Wednesday, August 6, 1930: Dow 238.47 +0.31 (0.1%)

Assorted historical stuff:

Dornier DO-X flying boat, the world's largest plane [157' wingspan, 134' long, 33' high, 12 engines, over 100 passengers, roughly same size as Boeing 707, see newsreel on webpage right], has made first flight on Lake Constance.

NY Gov. Roosevelt adopts "dripping wet" (anti-Prohibition) plank for reelection campaign, following conference with 4-time former Gov. Al E. Smith [Dem. Pres. candidate in 1928, first major-party Roman Catholic candidate].

Editorial: Gov. Roosevelt's relatively friendly response to rate reduction offer by NY City electric companies is a welcome change from his “near-socialist attitude of last winter” when he clashed with the telephone company and the Republican legislature over requested higher rates.

Current Bell (AT&T) phone system connects 18M telephones by cable and wire, in US, Eastern Canada, British Columbia, and Cuba. By use of radio links, any Bell system phone can now connect to about 30M of world's 34.5M phones in 25 countries, including most of Europe and parts of South America and Africa, and to several ocean liners at sea. US-Europe are connected by 4 radio channels and so can have 4 simultaneous conversations. First transatlantic phone link was US-London on Jan 7, 1927; rate for 3-minute conversation was $75. 1927 averaged 7 calls/day; 1928 increased to 31/day due to more areas reached and price cut to $45. Calls are about 50/50 social and business. Plans by 1932 include transatlantic cable to increase reliability, and transpacific radio service to Hawaii and Asia.

Fidelity & Casualty of NY reports on 4,400 claims filed for accident insurance. Number of accident cases: 807 playing baseball, 562 swimming and bathing, 287 wrestling and "friendly scuffling," 269 bowling, 231 skating, 211 tennis, 194 fireworks, 177 hunting, 164 golf, 89 playing with children, 3 ping-pong.

George Spoor, film pioneer, announces perfection of stereoscopic (three-dimensional) film system after 14 years experimentation.

Cleveland engineer calculates number of configurations of telephone panel switch is 5,502 followed by 54 zeros. Number has no name in our numerical system.

Market commentary:

Stocks continued gains early; majors including US Steel, GE, American Can reached new rally highs on higher volume. Bears tried to start reaction around noon; volume dried up and most major stocks settled into a small range slightly below the day highs. Rails stronger on increased grain shipments. Corporate bonds and preferreds strong, particularly rails; foreign govts. higher except Germany; US govts. dull.

Market seen as having prepared conditions for good uptrend on both fundamental and technical grounds. A year has passed since start of the downturn, typical lengh of depressions historically. Seasonal factors are favorable. Also, recent dull range-bound trading is typical as "market builds up its technical strength."

Recent increases in reported "all other" (commercial) loans strengthen belief that seasonal low point in commercial credit demand has passed.

Recent trading favorites included Radio Corp. (almost 10% of total turnover on NYSE Monday) and Standard Oil NJ.

Third quarter earnings expected down from Q2; July business seen quite slow, some improvement expected Aug. and Sept. but from low base.

Market action seen as continuing mostly professional, public being advised to await new developments before becoming involved. Conservative observers continue to advise those who wish to adopt long positions to wait for reactions to buy, and to take profits on rallies.

Low recent volume seen presaging dull, range-bound trading for some time. "A number of operators have left for vacations, which will last until after Labor Day."

Economic news and individual company reports:

Consolidation in auto industry shown by decline in number of US carmakers from 179 in 1911 to 46 in 1929. Meanwhile, Bethlehem Steel has 53 subsidiaries.

European auto cartel to meet in Paris in October, plan action against American tariff.

Italian stock market continues chronic depression of past two years, current economic slowdown blamed.

Representatives of Southern tobacco-producing states to meet regarding current tobacco price crisis. Price for bright leaf tobacco down 45% from 1929.

Companies reporting decent earnings: Consolidated Film Industries, Federal Bake Shops, Central Public Service (utility).

Chrysler ships 21,779 cars to dealers in July, 80% of 1929 level; best relative showing of year, first half averaged 65% of 1929 level.


Common Clay, a Fox picture, starring Constance Bennett and Lew Ayres. A poor girl, Ellen Neal, is “arrested in a vice raid and lectured by the judge on the folly of attempting to gain happiness by irregular means.” She tries to go straight by becoming a maid in the wealthy Fullerton household; however, the butler and then the family son try to seduce her. The son, Hugh, eventually succeeds. Two years later she is with child and suing the family. At trial it's revealed that Ellen's birth mother committed suicide and the women Ellen thought was her mother secretly adopted her. The Fullerton's lawyer realizes he is Ellen's father and asks Hugh to marry her. Hugh's father is initially furiously opposed but eventually Hugh “sees the light and takes Ellen in his arms.”

+ The Boring Stuff:

Pres. Hoover pledges relief for drought-stricken farm areas, says conditions very serious in some places. Assistance measures still being determined.

Most common names in Berlin phone directory: Mueller, 55 columns; Schultz, 53 columns.

Navy expects Goodyear to complete first “super-dirigible” ZRS-4 for it in April 1931; based on results will decide whether to proceed with ZRS-5.

A.B. Walsh, VP Starrett Investing, says New York City building falling behind recent population increase of about 2%/year.

Queens Borough Planning Commission to discuss use of suspended monorail for expanding mass transit in Queens.

Commodities mixed - cotton down; wheat, corn up sharply.

Agriculture Sec. Hyde repeats Administration position that solution to wheat price declines must be restricting acreage planted; argues for futility of dumping grain surplus on foreign markets, or various proposed forms of subsidy including equalization fees and debentures plan.

German imports down sharply, particularly of staples; many importing firms failing; blamed on economic slowdown. Exporting countries affected include US, Canada, Argentina, Brazil, Chile.

Soviet Union and Italy reach trade agreement providing credit by Italian govt. up to 75% of orders.

US freight car loadings for week ended July 26 were 919,349 cars, down 16.6% from 1929 and 11.1% from 1928. Only 2 of 52 rails were up from 1929.

US oil production up 26,600 barrels/day to 2.515M in week ended Aug 2; gasoline in storage at refineries up 651,000 barrels to 44.1M.

Combined assets of building & loan associations in US at end of 1929 were $8.695B, up $679M for the year.

Exports of fruit from US have greatly increased in past 15 years; averaged $115.992M in 1925-29 vs. $28.025M in 1910-14.

Little prospect seen for rise in newsprint prices from current $55.20/ton. Only strongest companies can make profit at that price, but in spite of recent wave of consolidation, industry is suffering from increased capacity and recent decline in sales.

Number of companies incorporating in NY State in July was 1,866 vs. 2,015 in 1929; number in first 7 months was 14,544 vs. 16,472.

Rio Tinto mining company now in 58th year, currently operating in 25 countries. Current stock price is at 6-year low due to low metal prices.

Steel ingot production at 58% of capacity industry-wide in past week, up 0.5% from previous week. US Steel at just over 64% vs. just under 64% previously.

NY City in July consumed 977M gallons water/day, new record, vs. 911M in July 1929.

S.S. Kresge July sales down 6.8% from 1929, 7 month sales down 1.2%. McCrory Stores July sales down 5.4% from 1929, 7 month sales up 0.9%.

August 4, 2009

Tuesday, August 5, 1930: Dow 238.16 +3.66 (1.6%)

Assorted historical stuff:

D. MacMillan, Arctic explorer, disputes idea of Arctic as wasteland, says over 700 plant varieties known in the Arctic Circle, some within 9° of North Pole.

Economy of US South has grown from minor size in 1900 to now producing 16% of US manufactured goods, 32% of mineral, and 36% of agricultural products.

Over 95% of all Swedish electric power supplied by hydropower, also known as "white coal."

French Senator V. Dalbiez says Russia exported $33M of products to France in 1929 while only importing $10M; accuses Stalin of using surplus to help with "the object of preparing a world revolution and increasing propaganda funds for Communist groups in other countries."

Three-day meeting of European carmakers in Paris ends without agreement on quota system to restrict American imports.

Navy awards contract to Loening Aeronautics of New York for seaplane with folding wings to be used on submarines. Contract price is $49,500.

Dr. K. Clark of the Univ. of Alberta has been working on tar sands for past 10 years; recent experiments successfully produced 5 barrels of pure tar from 5 tons of sand. This summer experiments will continue with production of petroleum products from extracted tar.

Individual drugstores estimated to carry in stock 8,000 to 15,000 different articles.

Jack Warner, VP of Warner Bros., announces new policy. For past four years, studio has taken 8-12 week vacation period “in order that the creative workers might rehabilitate themselves and start the new year's work after a good rest.” Plan is no longer practical, and studio will now operate 52 weeks a year.

Market commentary:

Bulls encouraged by resumption of auto manufacturing and higher commodity prices; technical market position also considered promising, ready for gradual resumption of upward trend interrupted in late July. New rally highs reached by US Steel, GE, Westinghouse, Consol. Gas. Trading favorites including Vanadium and Radio particularly strong. Volume remained low, but prices generally improved through the session and closed at day highs. Utilities and oils strong; banks and trusts weak. Bonds dull but generally firm.

August bulletin of Nat'l. Assoc. of Credit Men optimistic; "We have managed to get through the storm with no conspicuous failures and no serious damage to our machinery of production and distribution." Now sees business skies clearing, sees gradual but sustainable recovery.

Chairman G. Woodruff of Nat'l Bank of the Republic in article "Green Lights Ahead" predicts second-half recovery in business. "The red lights, through which our people last year drove, have changed. The curbstone admonitions of the minions of the economic law near an end."

Technical market strength seen in resistance to repeated bear efforts since July 18; very low recent volume attributed to stocks in strong hands ("in the hands of interests not to be frightened by professional drives"). Recent rally having been digested, market considered in good technical shape for further advance.

Market action still seen driven mostly by professionals, not much public or outside buying seen. Conservative observers still believe sustained uptrend unlikely until market breaks through previous resistance levels on good volume.

Farm leader Taber predicts "major catastrophe" unless rain appears in drought area soon; calls on President Hoover for immediate help for affected areas.

Attorney General Mitchell orders investigation of low-price for Georgia tobacco after charges that speculators are manipulating the market.

Economic news and individual company reports:

All states have a gasoline tax; average is a little below 4 cents a gallon. Total expenditure by motorists for fuel, tires, parts, other needs about $3.75B/year.

150,000 auto workers, including 100,000 in Ford's Rouge plant at Dearborn, returned to work yesterday as production shutdowns ended.

Auto sales worldwide remain at depressed levels, including India, China, Canada; attributed to world economic depression and political situation.

Fed. Reserve member banks report $75M increase in week ended July 30 in “all other” (mostly commercial) loans to $8.529B.

Companies reporting decent earnings: American Machine & Foundry (cigar/cigarette making machinery), Crown Cork & Seal (bottle caps).

RCA-Victor exhibiting new radio models to retail for $110 to $285. More expensive models will come with recorder able to permanently record radio programs.


“Earl Carrol's 'Vanities.' A lavish and expert spectacle, containing good comedians and a spectacular chorus: marred by offensively infantile grossness in the sketches and awkward aspirations toward mere nakedness.”

+ The Boring Stuff:

Editorial: Treasury Department has allowed entry of $4.5M in Russian pulpwood, says will only embargo shipments based on "specific complaints backed by evidence." Since Russia isn't open to foreign observers, this could in practice make it impossible to exclude products make with forced labor. We shouldn't exclude Russian goods because we disagree with their political ideas, but a more trustworthy investigation of the forced labor question is needed.

Wheat and corn sharply higher on news of crop damage. Cotton finished up but didn't react to news of drought damage; rise was on short covering in final hour.

Interstate Commerce Commission decision lowering grain transport rates to help farmers seen hurting rail revenues, particularly in Southwest, Pacific Northwest.

Farm Board Chair Legge repeats call for wheat curtailment, also calls for using wheat surplus as cattle feed, solving feed shortage and wheat surplus at once.

Attorney General Ward praises some aspects of current investment trust [similar to mutual fund] management; found to engage in little risky speculation such as short sales or buying on margin. However, calls for universal publication of portfolios held by trusts.

West & Co.: "it would appear that the present time presents the most advantageous period since 1921 to purchase bonds" - note that in previous recoveries from depression, bond prices advanced for about a year after business and commodity prices stabilized. Recommend long term over short term bonds.

Harvard Economic Society sees favorable signs of business recovery in easy credit, slowing of commodity price decline, and increasing confidence.

B. Snow of Bartlett Frazier & Co. predicts heavy loss of corn crop due to drought will improve farm situation after long and futile government effort to do the same. Anticipates improvement will extend to other grains including wheat, rye, and barley, as they are substituted for corn in feed and other uses.

Number of US companies represented in Germany is now 1,500; number of branch plants is 79.

Rail companies in 1929 bought 19.2% of total US fuel oil, over 20% of timber, 17% of iron and steel products, and 23% of bituminous coal.

July construction contracts for NY Metro. area were $68.9M vs. $80.3M for June and $177.7M for July 1929.

Canadian construction in first 7 months was 17.3% below 1929 level.

Canadian index of employment was 118.9 on July 1 vs. 116.5 on June 1, 124.7 on July 1, 1928, and 117.7 on July 1, 1927.

Canadian tariffs not likely to be enacted by new govt. until winter session; Conservatives will concentrate on public works in current legislative session. Many complex tariff issues need to be resolved, some will depend on results of Imperial Economic Conference in London. US companies expected to counter tariff as car companies already do, by putting branch plants in Canada. Conservative victory attributed to business depression and Liberal policy of extending tariff advantages to British goods without first receiving reciprocal advantages; slogan of “Canada first. Empire next.” captured public mood (parties agreed on higher tariffs on US).

National park visitors up to July 12 this year were 1.314M vs. 1.163M in 1929. Rail traffic down, automotive up.

Business failures reported to Bradstreet's in July numbered 1,930, up 18.6% over 1929; liabilities were $72.2M, down 31% from 1929.

August 3, 2009

Monday, August 4, 1930: Dow 234.50 +0.93 (0.4%)

Assorted historical stuff:

President Hoover calls for White House conference and commission to study ways of improving credit situation for homebuilding and financing.

Army creates three-dimensional version of chess to teach air tactics. Bottom is conventional chessboard, representing ground forces; top board is transparent and holds pieces representing air forces.

German Labor Min. Stegerwald announces government contracts won't be awarded to companies which show "unsocial attitude in relations with employees."

Report of bearish speculators in Ericsson (Swedish telephone co.) being squeezed by “unnamed group” rumored to be associated with Ivar Kreuger of Kreuger & Toll; several of Kreuger's close associates subsequently elected to Ericsson's board.

[Advertisement: The Match King: Ivar Kreuger, The Financial Genius Behind a Century of Wall Street Scandals, by Frank Partnoy, available on Amazon, is an interesting new biography of Kreuger, AKA the Swedish Match King. The obvious analog to Kreuger today would be Madoff as far as size of investor losses, but as this book makes clear, Kreuger is actually a much more interesting character - I think it would be more accurate to put him about halfway between Madoff and Jack Welch].

Editorial: plans for possible European auto quotas "need not cause immediate alarm." US car exports were only about 5% of last year's production; France, Germany, and Italy took only 6% or 7% of exports. Other export markets could easily absorb cars that Europe refuses. Also, as a practical matter European factories are not up to producing that number of cars, and European countries would lose a substantial number of sales, service, and assembly jobs.

New theft-deterrant luggage grip invented containing an alarm triggered when the grip is “involuntarily released by the rightful owner.” Manufacturer offers $200 reward for arrest and conviction of anyone “molesting the person carrying such a grip.”

Captain C. Barnard sets new record for flying time between Malta and England; covers 2700 miles in 26 hours.

Otis Elevator gets contract for 31 elevators in Waldorf Astoria; include 9 regular passenger, 4 suite, 3 large ballroom, 14 service, and one with18'x6' 8,000 lb capacity coming up from the private New York Central rail siding underneath the hotel.

Market commentary:

Saturday market very dull but positive. Two-hour session volume of 366,000 shares lowest since May 8, 1926. After a slight decline in open, upturn developed toward end of first hour; majors including US Steel, American Can, GE, duPont approached best levels of current rally. "Creeping improvement" continued for rest of session, stocks mostly closed at day highs. Utilities weak; very little trading in rails and oils. Bond trading volume moderate, prices generally higher.

Weekend business reviews positive, report gains in retail distribution; also positive was W.P. Chrysler statement that auto business, general trade improving.

Dr. L. Edie, economist for Investment Research Corp. of Detroit, disagrees with consensus among economists, predicts only mild recovery in fall followed by renewed slump in winter and full recovery not until Spring 1931. Cautions against “wish thinking.” Predicts long-term uptrend in market although interrupted by “radical and sharp” fluctuations. Anticipates reduction in P/E's; stocks selling for 20 times earnings may be reduced to 16-17, “and possibly lower.”

With brokers' loans at such a low level (down $1B over past month and $100M below November bottom), it's difficult to see a return of the "convulsive liquidation" seen in June. Weak holdings have been reduced so much that recent bear efforts have resulted in the lowest volumes in years.

Wide fluctuations recently in Gillette and Vanadium, both targets of considerable short selling.

Economic news and individual company reports:

NY Fed monthly review: number of workers employed in representative factories in US was down 2.4% mid-May to mid-June, more than usual slight decline.

Mutual savings banks (hold over 30% of total savings in US banks) report first half gain of $273.8M in deposits to $9.146B, vs. decrease of $82.7M in second half 1929. Seen as evidence of sound position, considering savings banks were source of funds for many losing jobs or money in the market declines.

Total US govt. gross debt was $16.176B on July 31 vs. $16.832B in 1929.

Livestock prices declining sharply; lamb around $8.50 per 100 lb. vs. $14.50 a year ago; cattle also down sharply, selling at 50% of raising cost in some cases.

Companies aggressively spending on advertising include American Tobacco, R.J. Reynolds, Coca Cola, National Biscuit, Procter & Gamble, Wrigley.

Companies predicting decent-to-good yearly earnings: Columbia Pictures (+147%), Caterpillar (roughly steady), Clorox (-14%).

Market humor:

The Room Wit observes “that a number of bears who are short of Gillette enter the customers' rooms in the morning with gashes where their whiskers once grew.”

+ The Boring Stuff:

French Foreign Minister Briand's plan for European unification comes under criticism from press and ex-premier Poincare, fearing that revision of the Versailles treaty may be only result of the initiative.

European automakers meeting in Paris having difficulty agreeing on quotas for American cars; curtailments of sales seen "less imminent."

Editorial doubtful on Farm Board's plan for cuts in wheat acreage; probably would require 25% cut to be effective, and this is unlikely; also, Farm Board owes an explanation of what to do with the idle land; "It is not easily imaginable that the wheat farmer could better his condition in the long run by leaving so much of his plant idle."

Commodities mixed with small changes; cotton up, wheat down, corn up. Over past week, wheat down sharply, cotton flat, corn up sharply. Irving Fisher's index of 200 commodities for week ended Aug. 1 was 82.9 vs. 83.3 previous week and 93.3 in January.

Week's markets in review: recent zigzag trading between 230 and 240 level seen as "period of recuperation" or technical consolidation; sentiment more positive, encouraged by failure to break through support and to force liquidation on declines. Many observers now predicting resumed uptrend in coming weeks. Some positives seen in earnings reports by Bethlehem and US Steel, and by continued success of oil production curtailment.

Utilities generally not concerned over electricity rate cuts; they stand to benefit from lower commodity prices and higher usage.

Some indication of surplus funds looking for investment seen in rise in bonds and highly rated preferred shares.

Foreign markets in past week: London irregular, Berlin weak, Paris “becalmed.”

Crops seen reduced by bad weather, particularly corn.

More indicators of worsening employment situation: NY State factory payrolls down over 2% vs. usual slight increase. Average weekly earnings for employed workers down roughly in line with deflation. Farm wages down 13% year-over-year, supply of farm labor highest on record. Slight decline in June output of most important industries, July seems likely to show further substantial decline.

State and municipal borrowing in first 7 months was $859.7M vs. $786.9M in 1929.

June electric production by public utility plants was 7.748 GWHr vs. 8.014 GWHr in May and 7.768 GWHr in June 1929.

Youngstown district steel operations 58.5% this week vs. 58% last week, first gain in several months.

Darst Creek oil curtailment restored at compromise quota of 44,000 barrels/day.

Farm prices paid to producers declined to 111% of prewar level as of July 15, decline of 12 points from June 15, same level as July 1921.

Lumber production in week ended July 26 by 893 hard and softwood mills was 275.8M feet vs. 308.3M feet previous week.

Hosiery workers agree with manufacturers on 20% wage cut, arbitration for industry, and establishment of unemployment insurance fund.

Carpet looms operating in June at 35.8% of single shift capacity vs. 44.1% in May and 69.2% in June 1929; wide wool looms at 52.7% vs. 51.2% and 64.8%.

Grand Union (food stores) first half sales up 14.5%, net up 15.5% over 1929. Policy of geographic consolidation, low inventories, owning few non-liquid assets.

The Weekly Blather August 3, 1930

August 3, 1930 was a Sunday with no Journal, so again a little editorial commentary.

The Idea Mortality Curve.

I'm not sure how many share this opinion, but one of the things I find interesting in this record of past news is the occasional glimpse of future technologies. Some of these were developed fairly soon after 1930, some many years later, and some are still mainly fevered dreams of money-burning would-be developers. I'm too lazy to look the dates up on these (if you're interested you can use the search box on the right of the blog web page), but some of the items I recall appearing so far in the blog are:

- Television.

- Three-dimensional (stereoscopic) film.

- Tunnel under the English Channel (finally built 1988-94, financial disaster).

- Development of Alberta tar sands (first commercial development in 1960's, profitable as long as oil prices not too low).

- Processing of oil shale (not done on significant scale yet).

- Intelligent robots (depends on your definition, but most would agree the autonomous, intelligent robots envisioned then and now are still far away).

One interesting thing that jumps out is the wide variation in how long these things take to develop. And of course, today we see many similar reports on things like stem cells, nanotech, electric cars, and other future wonders or boondoggles of the world.

It may have occurred to you on reading some of these latter-day reports to wonder whether that breakthrough you just read about over your morning cereal is something that will be affecting your life or investments in the near future, or will be something your grandchildren will still be awaiting another 79 years from now. It would, of course, be nice to get a decent way of predicting that, but that may seem unlikely. After all, in most cases you don't know that much about the fields involved, and many of the factors affecting how long development takes are unpredictable even to experts in those fields; also, said experts often have a vested interest in making practical application of their research sound close, particularly if they need external money to continue it. (Thus, for example, articles describing even the most wildly impractical biological research usually open with a paragraph or two on possible important applications to human health, smoothly worded to deemphasize the disclaimers about how remote said applications might be).

I'd like to suggest to your attention a concept that I believe does help in estimating, for many different fields, how long it will take for a research development to have large scale practical application, and does so without requiring expert knowledge of the fields involved. I believe the concept was originated by the great Don Lancaster, and it's called the Idea Mortality Curve. Simply put, this concept says that in any field, there are a number of stages starting with Gleam in Eye (initial idea), and ending at large-scale commercialization, and at every stage but the first, a large proportion of the remaining ideas dies. Thus, the resulting graph of surviving ideas vs. stage winds up looking like an exponential decay curve. Note carefully that we're not talking about separating good ideas from bad here; all the ideas at the start of the curve are assumed to be good ones, but nevertheless each hurdle that must be passed to get from one stage to the next kills off a large proportion of the remaining ideas (or, as Lancaster puts it, the gotchas will git ya).

A consequence of this is that, to a good first approximation, you can say how far a piece of research in a particular field is from large scale commercial application simply by knowing what the Idea Mortality Curve looks like for that field, and what stage on the curve that piece of research is at. Once you have that, simply add at least a couple of years and a 50% probability of death for each additional stage to be reached. Of course, how fast an idea moves along the curve can be affected to some degree by how much effort and expense is being applied to move it along, and by luck or skill in finding solutions to hurdles along the way; but usually the biggest factor is the part in bold letters. Some particular examples of curves in different fields:

Drug discovery: Idea for compound to test (designed for a particular target or by screening); test for petri dish activity (single cells); test in animal models; small human trials for safety; larger trials for safety and effectiveness; long-term tracking for effectiveness vs. other drugs and to find less common and longer term side effects.

Car development: Initial idea; design and modelling; very expensive hand-production of small number of partially working prototypes (this stage can last for many years and generate many photo opportunities, ex. the hydrogen car); small scale production of a few hundred to a few thousand cars; large scale production of hundreds of thousands of cars.

New computer chip technology: Idea for new device design and/or material (ex. transistors using carbon nanotubes); test of individual devices; ability to make functional large-scale test chip with many devices (ex. large-scale memory chip); ability to make functional target chip (ex. CPU chip); ability to do so at reasonable cost (AKA good yields).

August 2, 2009

Favorites of the week July 28-August 2, 1930

No Journal was published Sunday, August 3, 1930. Once again, a collection of my favorite items of the week. These aren't a representative selection but just the ones that made me smile or take notice.

August 2:

[Note: Movies were much more interesting then dept.] Howard Hughes to release movie Hell's Angels after spending 3 years and $4M in production; third film by Hughes following Two Arabian Nights and The Racket; enlarged screen being installed for premiere. Terra Film of Berlin to release Love in the Ring, Max Schmeling's first talking film; dialogue mostly in German but some English, French, and Portuguese. Warner Bros. to release sound version of Moby Dick with John Barrymore.

[Advertisement: Howard Hughes' Hell's Angels is available on Amazon, as well as the fantabulous poster on the right - some acting and dialogue feel dated, but amazing aerial scenes, including my vote for the best Zeppelin scene ever, and a huge dogfight that still packs a wallop. Also includes a stupefying 19-year old Jean Harlow in her first major role, including the only surviving color footage of her in a short Technicolor party scene].

[Note: Strangely familiar dept.] Walter P. Chrysler sees improvement in auto industry, believes business generally on upturn; not overly optimistic about immediate future, but believes business in almost every line has hit bottom; also believes commodity prices at bottom. Pres. Grace of Bethlehem Steel confident bottom reached in steel demand and prices. Erie Rail Pres. C. Denney sees some signs of improvement.

August 1:

[Note: If only they had lived to see Donald Trump.] Editorial: Good terms obtained by Mexico in debt settlement "shows what a debtor can accomplish if his nerve and ability to procrastinate are sufficiently lasting." Also noted is Germany's success in cutting reparations to a fourth of original demands. However, Mexico is now in the penalty box; "Only after demonstrating her ability and disposition to meet obligations beyond question and quibble will it be worth her while to attempt further outside borrowing."

[Note: Does this mean we get Christina Aguilera in laces and ribbons?] Romance is replacing "realism and matter-of-factness" in both fashion and theater. "The post-war years of bobbed tresses and short skirts" were ones of "rude materialism." In theater, "the measured rhythms of poetic drama were muted in the hurdy-gurdy tunes of a quick-stepping generation." Now, theater managers travelling to Europe find fashion returning to "laces and ribbons and sweet old-fashioned flowers," and in theater a revival of "old-fashioned love stories or flaming medieval romances." Of course, romance never went out of style some places: "It is axiomatic among American showmen that, west of the Hudson, American audiences have always been frankly sentimental."

[Note: Danger of historical analogies dept.] Walker Brothers point out strong similarities of current business and market conditions with 1921. Market pattern of break last fall, followed by recovery and second break in spring, almost identical to 1921 in both timing and percentage. Other indicators including commodity prices, freight loadings, and dividend yields also similar. First indicator improving in 1921 was construction, two months before stocks hit lows [followed by 8-year bull market]. Therefore encouraging that construction turned up in June.

July 31:

Some interesting observations on concentration of wealth by L.M. Shaw, Treasury Sec. under Pres. T. Roosevelt: “Whether fortunes of a hundred millions or more are good or bad matters not. It is as idle to rage at them, as to rave over them. ... As I read history each civilization has been self-destroying, and he who does not discern the larvae of destruction in this fails to see the obvious. ... instead of Huns and Vandals, our destroyers will be those of our own people who have had no breakfast and do not expect dinner.”

[Note: I like the precision here.] Chicago police official tells congressional committee investigating Communist activities that US has a total of 51,685 members of Communist organizations and 79,325 in sympathetic groups. On the other side are 1,089,107 in organizations actively opposed to Soviet system.

[Note: Isn't this the average size person in Chicago now?] Primo Carnera [boxer, 6'6", 280 pounds] currently traveling in US, having difficulty finding suitably large beds. Several hotels have procured special beds for him.

[Note: I'm sure this will happen any day now ... ] Editor: "I saw your paragraphs about Mr. Grace's salary in this morning's issue. Perhaps the world would be safe for democracy if it could be shown that a 'bonus system' of salaries for big executives would mean little or no bonus in a year when little or no earnings accrued to the common or garden variety of stockholders."

July 30:

[Note: Strangely familiar dept.] President Hoover asks Attorney General for major investigation of bankruptcy laws, to recommend needed reform legislation.

[Note: Truer words were never spoken dept.] The Room Wit: "The one trouble of the trader who thinks his judgement infallible ... is that the margin man bothers him too much."

July 29:

[Note: A depression is a depression, but Coca-Cola is Coca-Cola.] Coca-Cola net for first half $7.182M vs. $6.492 in 1929.

"Judge - The two men were fighting with chairs. Didn't you try to establish peace? Witness - No, there was not a third chair."

July 28:

[Note: Strangely familiar dept. - Greenspan just noted that production levels are well under consumption. ] Some positive feeling from weekly business reviews expecting bottoming out and seasonal upturn, though this expectation so far “has been based on hopes rather than actual signs of increasing activity.” Many industries have consumption running ahead of production and low inventories; credit is also very easy. In particular, resumption of car production soon is seen as positive for steel and other industries.

[Note: I think this question remains unsettled today.] Dr. W. Goodwin of Columbia carries out 400-person study of happiness. Finds happiness unaffected by age, intelligence, or education. Men generally happier than women, married people happier than single, “although the survey did not show whether celibacy induced unhappiness or unhappiness resulted in celibacy.”

[Note: $10M - that's crazy talk!] Contrary opinion from a subscriber regarding W. Grace's $1.5M bonus from Bethlehem Steel: “I don't believe there is any man worth $1M a year. Rather, I believe a man of high office in a corporation should be content with a reasonable salary and rely upon his interests as a stockholder for further compensation. I do not mean to detract from the all-important factor of management, but there must be a line drawn somewhere - if not, why shouldn't the heads of some companies like US Steel and AT&T receive $10M a year?”