December 5, 2009

Friday, December 5, 1930: Dow 180.99 -3.12 (1.7%)

Assorted historical stuff:

[Strangely unfamiliar dept.] Editorial: Some are suggesting raiding the “sinking fund” (used to reduce the national debt by about $440M annually) to close the deficit this year and continue the 1% income tax reduction. “But every consideration of sound finance,” in both short and long term, is powerfully against “such mere convenience. ... Public sinking funds, once raided for the convenience of statesmen, are almost impossible to restore.”

[Interesting how estimates of the number of unemployed are all over the place.] W. Green, AFL pres., estimates unemployed, not including farm and office workers, now number 4.860M vs. 4.500M at end of Oct.

[For the sake of uncounted future investors, stop before it's too late!] Postmaster Gen. Brown grilled by Congress on airmail spending, pleads for continuation of subsidies for airlines for two years to help develop the passenger air industry. Also proposes starting a “de luxe” overnight air mail service between NY and Washington for 25 cents an ounce.

[Banks ... good will ... does not compute ... ] G. McGarrah, Bank for Int'l Settlements pres., asks US banks to make careful study of loans abroad to avoid loss of good will by sudden withdrawals of money.

French Premier Tardieu resigns after govt. loses 147-139 vote following heated debate in Senate; entire Left Wing of Senate united in bitter attack on Cabinet.

Editorial: Sugar conference will at best be a stopgap to prevent producer bankruptcies. Long-term problem is tariff barriers and subsidies creating increased production by less efficient producers including Puerto Rico and Philippines, and leading to “an economic death grip on Cuba.”

Wild horses have become such a nuisance in parts of Oregon, Montana, and Colorado, that authorities are considering bombing the big herds from airplanes. The herds are suspected of spreading diseases to domestic horses. Slow demand for horses has all but stopped catching of the wild ones.

[Birth of a legend dept.] General Foods introduced new lime flavor of Jell-O nationally in past year, to great success. Also doing well is Minute Tapioca.

A Parisian seller of radio equipment was so irritated by the recent disappearance of his wife, an employee, and $5,000 of his money, that he broadcast the story on the radio, along with a threat of legal action. The guilty couple heard the message and returned panic-stricken to Paris; the employee has been sentenced to 3 months imprisonment and ordered to pay the husband damages of one franc.

Eddie Cantor's financial advisor says he was just joking in his widely quoted remarks about getting cleaned out in the market crash.

Market commentary:

Market wrap: Stocks continued lower on sluggish trading; merchandising and utility shares weak. Bond market dull; US and foreign govts. generally steady; corp. generally weak with many sharp declines and new yearly lows. Commodities firm.

Market observers “somewhat less confident,” though they continue to advise accumulating on reactions, and to advise against going short.

Weakness in bond market in recent weeks has been disappointing. “One authority” believes it may be due to problems of “some of the smaller banks” around the country, “although it is well known that banking conditions generally are unusually strong.” [To repeat: the first major banking crisis of the Depression is in the process of erupting.]

[Why don't they use these cool words on CNBC? ] Observers encouraged by continued market dullness, indicating “recrudescence of the heavy selling accompanying the Sept.-Nov. break was not likely”; believe “necessitous liquidation” largely complete, strong foundation under the market in buying from banks, insurance cos., investment trusts, and individuals. Period of dullness considered similar to windup of previous bear market in 1921.

Yields of 5% on “seasoned stocks” such as AT&T and US Steel, together with year-end reinvestment demand considered favorable for market.

Many less-active Curb Exchange [later Amex; small cos.] stocks now have huge bid-ask spreads; for example, Franklin Mfg. Pfd. was 28 1/4 bid, 50 ask.

Prospects for steel price increase seen better than for other commodities; there's no large surplus to work off, and independent producers are cooperating.

Price stability seen as important in all lines of industry; price uncertainty causes hesitation in placing orders; “experience indicates that price concessions, instead of increasing buying by attracting consumers, actually cause orders to be withheld.”

H. de La Chapelle of E.F. Hutton reports on study of market movements since 1884; finds market cycles average 3 1/4 years both peak-to-peak and bottom-to-bottom over that time, giving roughly 3 complete market cycles every major 10-year cycle.

M. Wolff of Hammerschlag, Borg notes striking reversal in investment trust fashions; managed trusts (similar to actively managed mutual funds), after selling at large premiums when issued, are now selling at 20%-50% discounts from liquidation value; meanwhile fixed trusts (similar to ETF's) are now at 7%-12% premiums.

Economic news and individual company reports:

Customs receipts in fiscal year 1931 estimated at $500M vs. $587M in 1930, but recovery to $625M expected in 1932. Receipts surged 113% in the 10 days following passage of the tariff, then slumped to a maximum decline of 54%, then gradually recovered until the decline for Nov. 5-14 was only 15% vs. 1929.

Rail report: ICC recommends abolishing recapture of “excessive” profits from previous years; notes economic difficulties of rails but says “country still needs its railways and can support them”; recommends regulation of rail holding cos. Treasury Sec. Mellon urges reduction of interest rate on some rail obligations to US. Operating income for class 1 rails in first 10 months estimated at $772M vs. $1.116B in 1929 and $986.2M in 1928; Southwest and West rails had best showings.

Steel report: More steel cos. join price advance. Sen. Norris (R., Neb.) and Sen Walsh (D., Mass) denounce rise as possible price fixing, call for investigation. Dow average of eight finished iron and steel products remained at $44.42/ton, low for 1930. Scrap markets continued dull, prices weaker.

Stock market history: Short selling has been prohibited in the past, including in Britain in 1733 and New York in 1812. These prohibitions have generally been defied and eventually whittled away and repealed.

Total corp. bonds in default Nov. 1 were $621.9M vs. $458.5M on Nov. 1, 1929 and record high of $758.6M in 1920. Most common type in default was real estate corp. Industrial bonds in default Nov. 1 were $241.0M.

Nov. car production in US and Canada was 146,185 vs. 154,585 in Oct. and 226,997 in Nov. 1929; decline was less than usual seasonal pattern. Ford output declined about 26,000. US passenger car registrations in first 10 months were 2.437M vs. 3.559M in 1929. Ford registrations were 992,370 vs. 1.189M.

Electric output by US light and power industry for week ended Nov. 29 was 1,680 GWHr vs. 1,722 in prev. week and down 3.8% from 1929.

Fed. Reserve reports money in circulation Dec. 3 up $50M to $4.615B, total Reserve Bank credit outstanding up $80M to $1.108B. Member banks in NY City report brokers' loans down $11M to $2.111B vs. $3.392B in 1929; loans on securities to non-brokers down $9M to $2.045B .

Britain continues to suffer heavy gold drain to France. Need seen for remedy to stop French influx. Bank of France reportedly buying sterling to attempt support.

Nov. merchandising sales were disappointing, generally falling well below 1929 figures, though some of the decline was due to Nov. 1929 having an extra business day. Woolworth Nov. sales were $24.1M, down 7.9%; S.S. Kresge $12.5M, down 10.8%; Montgomery Ward $22.4M, down 24.9%.

Companies reporting decent earnings: General Foods, National Power & Light.


“She - I don't want to go riding with you. Your car is an old one. He - Say, listen, lady; you're no 1930 model yourself.”

December 4, 2009

Thursday, December 4, 1930: Dow 184.12 -2.71 (1.5%)

Assorted historical stuff:

[Strangely unfamiliar dept.] Pres. Hoover defends ending the 1% tax reduction, since it would cause another budget deficit in 1932: “I am confident that the sentiment of the people is in favor of a balanced budget. ... When we stop to consider that we are progressively amortizing our public debt, and that a balanced budget is being presented for 1932, even after drastic writing down of expected revenue, I believe it will be agreed that our government finances are in a sound condition.”

Congress seen acting quickly on Pres. Hoover's proposed measures for unemployment and drought relief; may also tackle immigration restriction and capital gains tax modification. Other major proposals will have to wait at least until the next session.

Senate seats James Davis, newly elected Republican of Penn., in spite of dispute over campaign spending; Senate as a whole apparently “no longer enamored with the idea of blackballing successful aspirants whose ... election may have entailed large expenditure unless there is a clear case of wrong doing.”

[This actually sounds like a pretty good idea.] Editorial by T. Woodlock with proposal from Public Utilities Fortnightly for utility rate regulation: utilities would be allowed to keep any profits made each year, but rates would be adjusted each year based on profits the previous year, to move closer to a “fair return” on investment. This would give incentive for lower costs over time; Potomac Electric Power Co. has been regulated this way since 1924, and rates have gone down from 7.5 cents/KWhr to 4.7 cents in that time.

Reichstag holds first session “amid intense excitement” and strong police guard. Communists protest police presence and shout “starvation minister” when Finance Min. Dietrich starts speaking. Little accomplished. Extremist parties may test strength in motion to set aside Breuning austerity program, but financial circles are optimistic; Berlin stocks were up.

Editorial: Disarmament Commission of the League of Nations has been a failure. The Versailles treaty promised that all the parties would reduce armaments; “Germany, disarmed, does not share the complacent indifference to these promises of her armed neighbors and the US. ... Twelve years after the peace was made and nearly eleven years after the League was born, disarmament has got no further than preliminaries to a conference about it.”

Mexican Congress gives Pres. Rubio extraordinary financial powers to deal with crisis.

H. Deterding, managing dir. of Royal-Dutch Shell [AKA the Napoleon of oil] responds to Moscow engineer's trial naming him as “criminal”; says trials intended to cloak imminent failure of Five Year Plan, shift blame from dictators in Kremlin; claims Soviet would fall in 3 weeks if deprived of credit and world markets.

Belgian businessmen suggest Belgium and Holland join economic and customs union being formed by Norway, Sweden, and Denmark.

Editorial: Decline in farm prices hurts the 22% of the population involved in farming, but helps the buying power of the rest of the population. While it wouldn't be good for the current low prices to be permanent, they should help start a recovery that benefits all, including farmers.

Copper industry believes antitrust laws should be modified to allow companies to cooperate in controlling production; cite bad consequences of drastic fluctuations in price, including more wasteful production, pressure on wages, and difficulties of users in guessing when to buy.

[Sheer Genius dept.] Pilots have been providing an unofficial lifesaving service - on clear nights, they can see fires from far away. “If the fire is unnoticed by persons on the ground, the pilot simply opens his engine wide” and dives at the burning building, “pulling up into a climb when he has come as close to the ground as possible with any degree of safety. He repeats this until the roar of his engine has aroused the neighborhood.”

United Aircraft begins first direct New York - Chicago air service, completing transcontinental New York - San Francisco route. To use new Ford tri-motor planes with 135 mph cruising speed. First plane carried 5 passengers and 500 pounds of mail.

[Add some zeroes dept.] New York State faces deficit of at least $3M in next budget according to report by Comptroller Tremaine to Gov. Roosevelt.

[Strangely unfamiliar dept.] The Rockefellers (John D. Sr. and Jr.) donate $1M to New York City's Emergency Employment Committee, bringing total to $4.133M. Between 13,000 and 14,000 men and women have already been given jobs.

Market commentary:

Market wrap: Stocks worked lower in dull trading on mixed business news. Bonds moderately active; US govts. dull, slightly lower; foreign govts. generally firm; corp. mostly higher. Commodities weak.

Observers remain conservatively optimistic; believe standard stocks can be bought on setbacks, though market likely to move in narrow range for some time.

[Ay Chihuahua! dept. Also note the decline in total security loans isn't nearly as dramatic as that in brokers loans.] Dull trading confirmed recent opinion on thoroughly liquidated position of market. Most comprehensive estimate of total loans on securities by Fed Reserve is currently $10.5B vs. $17B on Oct. 4, 1929. Figures on security loans suggest “most of the long road toward reestablishing the market on a sound basis has been traveled.”

[Note: Major banking crisis is in process of erupting.]Comptroller of the Currency J. Pole says general banking situation hasn't changed much in past year; metropolitan banks generally not a problem, but country banks having a difficult time in some cases.

Considerable importance seen in persistent recent support for pivotal issues; attributed to “important industrial and financial interests” that were out of the market for 7 or 8 months.

Market seen mostly in professional hands, with little outside interest; good-sized short interest remains outstanding.

Yesterday's rail freight report considered disappointing; 17.6% drop from 1929 was largest since Oct. 18, and drop from 1928 was 24.2%, largest this year.

C. Gordon, Bank of Montreal pres., says Canada less affected by depression than almost any other country; “In this virile country of Canada with its abounding resources there can be no permanent depression.” Sees benefit from turn to domestic markets, believes Canada will lead recovery when the turn comes.

Christmas shopping optimism: Christmas club savings this year will total a record $600M-$700M, to 9M depositors. Stores on Fifth Ave reportedly as crowded as a year ago.

Industries generally free from overproduction: steel, chemicals, food, tobacco, electric power, meat packing, shoes.

Agriculture Sec. Hyde sees remedies for farm depression as production adjustment, national land use policy, organizing cooperative groups of growers for collective action, cutting farmers' tax burden, and improving rural credit conditions.

Electric Power & Light stock has declined from a yearly high of 103 1/2 to 37 1/2, even as earnings increased from $2.79/share in 1929 to $2.94 this year.

Economic news and individual company reports:

Pres. Hoover sends Congress 1932 fiscal year budget of $3.933B, up $221M from prev. year; 1% income tax reduction won't be continued in 1931.

US electric production in Oct. was 8,161 GWHr, down 6.3% from 1929. Avg. daily production in Oct. was 2% over Sept. vs. usual 3.5% seasonal rise. However, earnings are running 1%-2% ahead of 1929 due to successful campaign to increase domestic and commercial use.

US Steel ingot production for week ended last Monday was at 45% vs. 45% prev. week and 68% in 1929; independents were at 35%, vs. 37% and 65%; industry total was 39%, vs. 40% and 66%. Carnegie Steel (subsidiary of US Steel), Bethlehem, and others raise prices of steel bars, shapes, and plates for Q1 delivery by $1/ton; price rise came sooner than expected. Scrap prices continue to weaken.

Payments by US Veterans Bureau for year ended June 30 were $452.2M, up $19.4M from prev. year. Of this total, payment to disabled World War veterans was $155M; as of June 30, these payments were being made to 279,539 veterans, up 17,401 from prev. year.

[Add some zeroes dept.] Soviet oil production in year ending Sept. 30 was about 120M barrels, up 27% from prev. year.

Number of shareholders in 113 miscellaneous industrial cos. (chemical, drug, food, leather, paper, rubber, tobacco) was 382,975 on Mar. 31, 1930 vs. 268,865 in 1929 and 178,524 in 1925. Most popular: General Foods, American Tobacco, du Pont, Armour, Drug Inc., Texas Gulf Sulphur.

Rail equipment cos. organizing one or more finance cos. to finance increased equipment purchase by railroads.

State with the largest highway paving program in 1930 was Iowa, with 1,040 miles.

Companies reporting decent earnings: Hershey Chocolate.

Political joke:

“'No,' I said to him, 'I can't let you have 50 cents, because I'm broke and was going to ask you for it myself. And I haven't got any old clothing. I'm wearing all I've got. And I'm in such a tough way that I don't see how I can help you at all.' 'Well,' said he, 'I was going to ask you to vote for me for the House.' 'I can't,' said I. 'I'm running myself.'”

December 3, 2009

Wednesday, December 3, 1930: Dow 186.82 +1.34 (0.7%)

News flash from State of the Union address:

Temporary 1% income tax reduction won't be continued. Says capital gains tax leads to security inflation and retards recovery; asks study of effects. Subject of Prohibition not mentioned at all. Modification of anti-trust laws should be investigated but against repeal of Sherman Act. Rails should be consolidated through new legislation to strengthen condition. Federal public works should get additional $100M-$150M for temporary expansion to already large $500M/year program. Asks for seed and feed loan program for drought stricken farmers. Children's health should be aided by small Federal program, as recommended a year ago. Seeks tightening of immigration law and deportation of criminal aliens and those illegally here.

More stuff from State of the Union:

[Note: Overall, not a bad speech in my opinion - more content than is usual today. Full text here.]

Fundamental strength of economy unimpaired; progress in peace, security, education, science, moral and spiritual awareness.

Origins of worldwide depression lie in overspeculation and in worldwide overproduction, leading to demoralizing price falls, decline of buying power, and unemployment. Political unrest also has prolonged and deepened downturn.

Extent of downturn is 15%-20% by various indexes. At this time, major forces of depression are now outside US. Nevertheless, encouraged economic activity is holding at 80%-85%, financial and industrial institutions have come through unimpaired. Important to remember these crises have been met many times before, and US is now stronger and richer than ever in its history. US is largely self-sustaining, can “overcome world influences and ... lead the march of prosperity.”

Depression can't be cured by legislation or executive pronouncement. Recovery can be helped by cooperation, govt. can encourage this. Cooperation has included agreement to maintain wage levels and labor peace; distribution of available work to maximum number of employees; acceleration of public works and construction by rails and utilities to degree above even the most prosperous years (total of $7B in 1930 vs. $6.3B in 1929). These measures have broken the precedent of previous depressions, when wages and public works declined.

Organization of local relief and employment committees has kept suffering to a minimum; unemployment is far below other large industrial countries. More extensive organization has been set up after it became clear problem would last through winter; response has been gratifying.

Federal govt. has contributed with greatest program of construction in our history, exceeding $500M annually vs. $253M in 1928; favors further expanding these activities temporarily by $100M-$150M. Some are proposing still more govt. projects, but many will be unsound economically or not ready for an immediate start. Doesn't make sense to increase taxes to fund projects, since this will lead to a drop in private employment.

Deficit of about $180M expected for this fiscal year due to revenue shortfall of $430M, increased spending of $225M; the 1% income tax reduction must be discontinued, and even doing this, the “most rigid economy” will be needed to avoid tax increases.

Foreign relations maintained a high degree of goodwill; a number of arbitration and conciliation treaties will be presented to the Senate, as well as the revised World Court protocols.

Assorted historical stuff:

Sen. Bingham introduces bill allowing doctors to prescribe malt liquors for medicinal purposes. Rep. MacLeod introduces amendment allowing manufacture and sale of liquor for use in the home and “places of abode.” [Does it count if you practically live in the bar?]

[Was humbug some kind of a cuss word then?]Canadian Premier Bennett hits British PM MacDonald's failure to denounce British official J.H. Thomas' description of Canadian tariff proposals as “humbug”; says this indicates MacDonald's endorsement of “unusual and injurious” statement, Canada now forced to “embrace other means to strengthen position.”

Editorial by T. Woodlock: If, as now seems inevitable, we must have a govt. operated power plant at Muscle Shoals, we must at least keep thorough track of the details and results of the experiment so that we can finally get a fair and impartial comparison with private power cos.

Editorial favoring Gov. Roosevelt's appeal for saving money on “archaic” small local govts. by “radical readjustment of local chaos into a centralized authority ...”

Dr. M. Hutchinson [curiously, invented both Klaxon horn and the first electric hearing aid] announces invention of instrument to eliminate deadly carbon monoxide fumes from city streets, increase airplane efficiency by a third, and save nation over $1B annually in fuel.

[Isn't that kind of like decaffeinated coffee - I mean, what's the point?] German scientists discover method of growing nicotine-free tobacco.

At the galleries: Ralph Chait Galleries - one of the most important collections of Chinese ceramic art to come on the market in some time. The Old Print Shop - a rare series of old American temperance prints from 1840-1875, when the movement was forming. The Art Center - reproductions of the stained glass windows in the cathedrals of Chartres, Cologne, Nuremberg, and Canterbury.

Market commentary:

Market wrap: Stocks gained moderately in the morning, were steady as the State of the Union address was digested, then continued up following a short dip on disappointment Prohibition wasn't mentioned. Bonds mostly improved on slow trading; foreign govts. strong, South American up sharply; US govts. slightly down; corp. steady, speculative and convertibles up. Commodities strong.

Steel cos. strong on rumors of product price advance; rails rallied on mention of consolidation in State of the Union address.

[Strangely familiar dept.] “Due to the lack of demand from brokers and business, banks have been forced to seek employment for their funds in investments.” Many have criticized this heavy buying of investment securities by banks in the past year as risky. Bank defenders point out there's been a large increase in deposits too, so the ratio of investments to deposits is still relatively small.

Rep. L. McFadden, chair. of House Committee on Banking and Currency, blames numerous recent bank failures on “high pressure” bond salesmen who unloaded unmarketable, low-grade bonds on country banks not equipped for investment research.

[It seems the big interests are said to be operating every time there's a couple of up days in a row, and mysteriously disappear when the market turns down again.] Some say the market is now too big to have individual leaders as in the days of J.P. Morgan, Sr., and there has been no recognized bull leader for a decade or more. However, “everyone knows that the so-called large interests have taken concerted action to check market disruptions many times,” most recently this past month. “Eight years ago, the 'big interests' combined to support the market”; this was the beginning of the major bull market that ended in fall 1929.

E. Decker, Northwest Bancorp. pres., blames real estate and stock booms and depression on loose banking; interest rates and margin requirements should have been raised earlier. “Loose credit is the cause of more failures than credit difficult to obtain.”

[Ay Chihuahua! dept.] Observers believe market may be entering a period of dullness characteristic of the end of previous bear markets, when liquidation has been completed. Now watching closely for market to show ability to break out into a sustained advance, which would strongly indicate bottom of the 1929-30 bear market had passed.

Economic news and individual company reports:

Income tax receipts in Nov. were $28.223M vs. $28.281M in 1929; 5 months through Nov. $610.5M vs. $668.8M. Customs receipts Nov. were $36.365M vs. $44.126M; 5 months $170.6M vs. $262.9M. Gross public debt Nov. 30 was $16.101M vs. $16.568M in 1929.

Q3 net profits of 261 industrials were down 51% from 1929, lowest Q3 since 1924; rail equipment and paper were only groups showing increase. Q3 net operating income of class 1 rails was down 29%, lowest since 1923. Public utility net was only down slightly.

Rail freight loadings for week ended Nov. 22 were 779,757 cars, down 49,494 from prev. week and down 169,959 or 17.6% from 1929 week.

Meat packers make final argument in DC Supreme Court in petition for right to distribute foods (by modification of the 1920 Consent Decree).

Companies reporting decent earnings: Borden (dairy products), Lorillard (cigarettes), Kelvinator (refrigerators), Hygrade Lamp (lamps and radio tubes).


Lightnin', starring Will Rogers. Pretty dull fare; dime novel heros, and villians have gone out of style, and most “are satiated with stories of treacherous efforts to rob simple country folk of the old homestead.” Film is slow-paced, “and the star, Will Rogers, is not entirely happy speaking the outmoded dialogue assigned to him.”


“Prospective Employer - Why did you leave your last post? Chauffeur - My guv'nor and his wife fell out, sir. Prospective Employer - But why leave for that? Chauffeur - Well, if you must know, sir, they fell out of the car.”

December 2, 2009

Tuesday, December 2, 1930: Dow 185.48 +2.09 (1.1%)

Note: For those of you in the New York area, the New York City Junto will be having a lecture and discussion Thursday evening featuring Amity Shlaes, author of The Forgotten Man: A New History of the Great Depression. I haven't read the whole book yet and have had a mixed opinion on what I've read so far, but there might be some interesting discussion. The NYC Junto is a free monthly discussion group sponsored by famed speculator (his term) V. Niederhoffer - the format is a short intro talk by the speaker, then a long period of pretty free Q&A. Click here for information.

Assorted historical stuff:

[Note: Audit an agency responsible for bailing out a large embattled sector of the economy? That's crazy talk!] Editorial: “Without the slightest wish to embarass the Farm Board, ... an accounting of its activities is due and owing to the taxpaying public.” Board has gone through $250M of appropriated $500M so far and failed badly at all its assigned objectives; “No public servant has carte blanche to use huge sums of money and give no accounting therefor.”

[Note: I thought this was an urban legend ... ] Metropolitan Life Ins. Co. reports death rate for first 10 months of 1930 was 8.3% lower than 1929.

[Note: Well, I guess even a maniacal dictator is right twice a day ... ] J. Stalin, Communist leader, says present world depression will get worse; one of periodic crises that mark progressive decay of capitalism; sees capitalist countries drifting surely toward war to crush weaker competitors and control markets; calls League of Nations impotent, predicts Versailles treaty can't endure.

Washington's current main interest in Communism is in reports from Moscow of melodramatic trials of anti-revolutionary plotters. “Curiosity is expressed as to the reason no American interest was named in the purported confessions of the Moscow plotters.”

Reichstag expected to approve Breuning financial program of 26 laws decreed using semi-dictatorial powers, due to reluctance to face new elections following large Fascist gains in municipal elections Sunday. Berlin stocks rally.

Interior Sec. Wilbur calls for conservation of nation's resources; criticizes waste of oil, gas by overdrilling; points out that in Kettleman Hills area of Calif. alone, 450M cubic feet of gas is wasted daily, making the total yearly waste of energy over twice the expected output of Hoover Dam. Conservation rules are currently subject of several ongoing litigations in process of appeal.

Much speculation on whether Congress will manage to pass needed legislation and avoid an extra session, as strongly desired by leaders of both parties. Little new legislation was proposed by Cabinet members - Labor Sec. Davis requested immigration restriction, while Postmaster Gen. Brown wanted higher rates. Some surprise at Pres. Hoover's determination to send World Court protocol to the Senate, which may provide an ideal excuse for “days and weeks” of debate.

[Note: Sheer Genius dept.] Champagne produced by Spanish chemist from Cuban sugar cane said to be “equal in every way to the French vintage.” Lord Inchcape, shipowner, predicts time when ships will be propelled and lighted by wireless transmission of power.

Shimizu tunnel completed through “mountain backbone of Japan”; at over 6 miles, is longest rail tunnel in Asia, will cut Tokyo-Niigata travel time by 4 hours.

Proceeds from Army-Navy football game to be played at Yankee Stadium Dec. 13 will be donated to Salvation Army Relief Fund; close to $1.3M expected.

New School to present unusual finance course by F. Vom Saal developing principle that “average investor can and should train himself to become his own investment counsel.”

Mother Jones, radical and one-time leader of United Mine Workers of America, dead at 100.

Amusing story of Hetty Green [died 1916 at 81, one of world's richest women, subject of many rumors of miserly eccentricity] blackmailing a newspaper publisher who had printed a story saying she was holed up in Hoboken to receive suitors for marriage. Mrs. Green showed up at the publisher's club the next day carrying some of the publisher's love letters stolen by his valet and threatening to read them aloud to all comers. They quickly came to an agreement, though Mrs. Green kept the letters, since “Down in Wall Street I have learned that it never hurts to hold a little collateral!”

Market commentary:

Market wrap: Stocks firm on very light trading, with traders awaiting Pres. Hoover's State of the Union address to Congress. Bond market also dull; US govts. firm, foreign govts. show rallying tendencies; domestic corp. mostly lower.

Conservative observers confident, believe recent reaction only of technical proportions; recommend buying standard stocks “on a scale” during setbacks.

'We just have to grin and bear it,' remarked one trader to another. 'I can bear it all right,' replied the other ... 'but grinning is out of the question.'”

Note: It's interesting to see how much of current commentary is similar to the next two items, i.e. looking for patterns in past recessions and expecting them to more or less mechanically repeat.

Car industry observers see striking similarities with last serious depression in 1920-21, though decline has been more severe this time. Based on this, see Nov. and Dec. as turning point; most authoritative estimates have production in 1931 Q1 about 15%-20% below 1930, but “even on this conservative basis” production would nearly double from current quarter; possible sharp recovery in spring if pattern holds. This year's production will be lowest since 1923; Oct. production is at 1916 levels, which “cannot long continue to supply a normal present market.”

Harvard Economic Society says business declined in Nov., and is likely to continue down in immediate future, but “experience during past depressions indicates that the decline is nearing its end, and that recovery will begin in the first half of next year and probably in the first quarter.”

Economic news and individual company reports:

Western rail executives make long list of requests to ICC for relief of current difficulties, including postponement of lower grain rates for at least a year, increase of some long haul rates, support of regulation on motor transport, and requiring waterway transport to be profitable. Claim that their operating profits fell short of “fair return” defined in law even in record year of 1929.

Fed. Reserve member banks weekly report for Nov. 26: loans on securities down $77M to $7.761B, “all other” loans down $86M to $8.766B. Investments held by banks are up $400M in the past 8 weeks and $1.4B since start of Oct. 1929.

Fed. Reserve reports department store sales up 9% in Oct. over Sept., more than the usual seasonal increase, but down 8% vs. Oct. 1929.

Oct. meat sales up 4% from Sept. but down 18% from 1929.

Agricultural exports in Q3 were $423.2M vs. $592.1M in 1929; imports were $401.8M vs. $688.0M.

1930 Automobile Salon opens at Commodore Hotel; 90 “motor cars de luxe” on exhibit, featuring “artistic designs, beautiful color schemes,” new safety and comfort features, and the “maximum in luxuriousness.”

Many states and cities will seek to increase gasoline taxes; estimated total gas taxes in 1930 are $515M vs. $431M in 1929.

Four banks close in Ill. and one in Conn.; largest was First Nat'l Bk. of Marion with $2M deposits, one of largest and oldest banks in coal mining area of Ill.

[Note: These match monopolies were no joke. According to John Train's account, some countries had squads of agent provocateurs roaming the streets asking people to light their cigarettes. Those who offered a non-monopoly match were subject to large fines. ] Ivar Kreuger to negotiate loan to Italian govt. in exchange for match monopoly.

England continuing to experience drain of gold to France, “slow but steady” capital flight. French experts suggest extension of credit to Bank of England by Bank of France; issuing British loans in the French market seen impossible due to “demoralization of the market.”

Canadian report: Index of employment Nov. 1 was 112.9 vs. 116.2 Oct. 1 and 124.6 Nov. 1, 1929. Oct. exports $84.3M vs. $121.4M in 1929; imports $76.2M vs. $116.3M. Trade boards “swamped” with inquiries from US and British industrial cos. on establishing Canadian plants after Sept. “emergency tariff.”

Companies reporting decent earnings: United Light & Power, Electric Power & Light, Lambert, US Pipe & Foundry (gas and water pipe, benefitting from easier municipal financing), De Beers, Bourjois (cosmetics).

Prohibition joke:

“A candidate for office ... was confronted by a woman, a strong advocate of prohibition. 'Now,' said the lady, 'it is vital that you express your views on prohibition; are you dry?' 'Madam,' replied the candidate, 'nobody knows how dry I am.'”


The Lottery Bride, operetta produced by Arthur Hammerstein, set in Norway. Designing villain interferes with young couple in love. The girl “seeks Nirvana in becoming a 'lottery bride,'” and by sheer coincidence is matched with her lover's brother. Lover happens to be there when she arrives. Villain arrives later as captain of a dirigible bound for the North Pole. Happy ending at the Pole, “on some of William Cameron Menzies' most exquisitely carved ice blocks.”

December 1, 2009

Monday, December 1, 1930: Dow 183.39 +2.48 (1.4%)

OK, this is the first day of the new more-opinionated format. I'll try to make the transition not too jarring.

Assorted historical stuff:

[Note: My general impression from reading a few months of this guy's writing is that he's extremely long-winded and obtuse. It was therefore surprising to read a cogent and well-written editorial by him with a constructive proposal for attacking a big piece of the debt problem at the time.] Editorial by T. Woodlock: Problem of European debts to the US is becoming a crushing burden. “The US did not lend gold to Europe; she lent an immense mass of commodities of all sorts and many services. And the 'money' debts” that Europe owes in return are now equivalent to a much larger amount of commodities and services. International debts must be treated differently from individual ones; a “first-class nation ... cannot be put into a receiver's hands and it cannot be liquidated.” Debts between nations generally are a threat to peace; when they are a very heavy burden on almost all major countries, the danger is intensified. The US should reduce the debts owed it proportionally to price declines; this would sacrifice “nothing which ... is fairly ours to claim, and nothing which in fact ... we are even likely to receive.”

[Note: Sad but probably true dept.] House Speaker Longworth says he's opposed to an extra session of Congress; believes business recovery in the past year has been retarded by long Congressional sessions, and an extra one would result in further delaying the recovery.

New Congressional session formally opens today, though main business of the session has been under way for 3 weeks under the House Appropriations Committee. There's unlikely to be time to take up much other than the appropriations bills in this session, though the Glass financial hearings will attract some interest. Once the session ends March 4, barring an extra one, “the country can pretty well forget Washington and politics” until Dec. 1931.

[Note: Strangely familiar dept.] About 25 years ago, there was much talk about the life of copper industry reserves, with Utah Copper given 30 years, Nevada Consolidated less than 20, etc. Strangely, even though no major new mines have been discovered in the US and most of these mines are now producing two to three times more copper than 25 years ago, you now hear little about this problem - in fact, the complaint now is that too much copper is available and production must be cut.

[Note: The carrier pigeon version of John Henry ... ] Five carrier pigeons recently won a race with a Norwegian air force plane travelling 105 mph between the cities of Oslo and Jesshim in Norway, a distance of 70 miles. Pigeons were released at the same time as the airplane took off.

[Note: Not sure if Prune Center or Silicon Valley has a nicer ring to it.] San Jose, Calif. is proudly known as “Prune Center”; the Santa Clara Valley, of which San Jose is the commercial center, has about 70,000 acres of prune bearing trees.

Market commentary:

This section will be shorter from now on. In my opinion, one of the most important lessons you can get from this blog is that the day to day blather about why the market did what it did (which takes up most of this section and which is most of what's on CNBC, MSNBC, etc. these days) is almost entirely random noise, though some of it is undeniably entertaining.

Market wrap: Stocks slightly firmer on very dull trading. Bonds mixed; corp. down with many new yearly lows; foreign and US govt. mostly steady.

Noteworthy market moves in past week: US stock rally checked. Most classes of bonds trended down, with notable exception of US govts. Berlin stocks down sharply early in week, hitting four-year lows, but recovered some of the losses toward end of week; no sign of capital flight. Grains traded in a narrow range, tending downward. Cotton drifted down close to season lows.

Market observers still “conservatively bullish” although bears are said more confident, and renewing selling operations.

Conditions now seen favoring further market decline; Dec. is usually an irregular month for stocks, Congress will reconvene, and industry is seasonally unlikely to improve before end of year. However, “no thought in important quarters that the selling movement will be resumed on anything like the scale” from Sept.-Nov.

[Note: Rule 1 of banking crisis - there is no banking crisis.] National City Bank notes epidemic of bank failures, and that “processes of deflation operate in a vicious circle” but is nevertheless optimistic: “obviously this sort of thing has to come to an end some time, and by the very nature of the circumstances the turn comes ... [when] everything looks the blackest.” Business decline has lasted about 15 months and is 35% below peak; this is as severe as any decline in past 50 years, warranting “a strong assumption that the decline is nearing its end.” Local banks were clearly overextended in many parts of the US, leading to some inevitable collapses, but overall banking system is “exceedingly strong” with banks having little indebtedness to the Fed. and over $7B of paper usable for rediscount there. [July 15, 2008: US banking system is “well capitalized.” - B. Bernanke.] No general breakdown of credit has happened or will happen.

[Note: The creeping stage - well, at least you can't accuse him of wild overenthusiasm.] W. Woodin, American Car & Foundry Chair., says believes we've hit bottom and business will gradually improve from now on: “It is a little bit like a child that first must creep before it walks. I really believe that we have reached the creeping stage toward rehabilitation of business.”

A. Sloan, GM chair.: “No one can deny that the economic machinery of the US and of the whole world is badly out of joint. The contributory causes are so numerous that no single factor can be emphasized.” Thinks readjustment would have taken place regardless of the stock market crash “because we exceeded the speed limit [in industry] by developing an obsession for high records.” Believes we can only recover at a normal rate.

Economic news and individual company reports:

[Note: US unemployment wasn't very well measured at this time, so data points like this are interesting. Perkins later became Roosevelt's Labor Sec. and first woman in a US Cabinet.] NY State Industrial Commissioner Frances Perkins reports on Nov. study of unemployment in Buffalo, NY - of 14,002 men and women, 19.9% were unemployed, of which 16.1% were able and willing to work; 16.6% were employed part time and 63.5% full time. Compared to Nov. 1929, proportion of men over 18 unable to find work was up over 2.5 times, as was proportion working part time.

Irving Fisher's index of 200 commodities for week ended Nov. 28 was 80.6 vs. 80.8 previous week and vs. 92.3 a year ago.

New car inventories in US and Canada were 304,690 on Nov. 1 vs. 562,800 on Nov. 1, 1929.

O. Young, GE chair., returns from Europe, refuses for now to comment on conferences with leading bankers on world's gold problem.

Some investment trusts (similar to mutual funds) are selling stocks they own and buying up their own shares due to the 20%-30% discount their shares are selling at. [Note: Apparently the idea of liquidating and returning the cash to shareholders was too horrifying to contemplate.] Gossip has it that some brokerage houses that sponsored investment trusts have found they didn't bring the “joy to their parents that had been expected” and are looking for a graceful exit.

Companies reporting decent earnings: Parke-Davis (drugs, has paid dividends for 51 years without interruption), Engineers Public Service.

Bond market joke:

“'Good morning, sir. I'm a bond salesman.' 'That's all right, my good fellow. Here's a quarter - go buy yourself a square meal.'”

Forgotten genuises dept.:

One of the great pleasures of doing this blog is coming across entertainers of the time who I've never heard of before, but who are absolutely fantastic. Here's a little of Borrah Minevitch's harmonica band, mentioned on Nov. 24 as part of the Sweet and Low revue:

Play "Borrah Minevitch & His Harmonica Rascals" on Youtube

Play "Borrah Minevitch - Daybreak Express" on Youtube

November 30, 2009

Favorites of the week Nov. 24-Nov. 29, 1930

No Journal was published Sunday, Nov. 30, 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.

Nov. 29:

[Note: Thank goodness executives no longer try and get regulatory relief by saying disaster threatens.] While rail executives painted a bleak industry picture in asking for legislative relief, it's worth noting “the carriers have no effective way of promoting their cause before legislative or regulatory bodies except to emphasize their disadvantages to the utmost”; their only way to get substantial relief is to show “disaster threatens.”

[Note: Two independent elevator cars in the same shaft - what could possibly go wrong?] Committee on revising NY building code proposes changes to make 100-story buildings more practical, including increasing limit on elevator speed from 700 feet/minute to 1,200 feet/minute, and operating two independent elevator cars in the same shaft.

[Note: Extremely strange casting dept.] Scarlet Sister Mary - Ethel Barrymore's long-deferred return to Broadway was an occasion, even more so because it was also the New York debut of her daughter, Ethel Barrymore Colt. “And the fact that the return of the one and the debut of the other were in black-face made it an occasion twice over.” However, the play's characters aren't well developed, and though they're sympathetically approached, “the time seems to have passed when black-face makeup and rhetorical inflection, however sympathetic, will make for a complete illusion” in a realistic drama, especially given the success of black actors playing black parts in the past few years. Plot: Sister Mary weds July, who then leaves her for “the serpentine Cinder, who knows the wicked ways of the city.” While this desertion is a severe blow, Mary recovers and, “in defiance of the church which has expelled her, she lives according to her own law for 20 years, bestowing her great affections on many men, having many children and radiating an earthy strength and personal agreeability in so many ... directions that her life is almost legendary.” Death of her firstborn child causes Mary to see new meaning in life and death, return to faith.

Nov. 28: No Journal published following Thanksgiving.

Nov. 27:

[Note: Perils of knowing what the “important interests” are doing dept.] Good scale support has come into the market in the past few days; buying has come “from important interests that had taken profits at or near the highs, apparently because they did not desire to have the market move ahead too rapidly.”

[Note: Strange entertainment I would like to have seen dept.] Angna Enters - creator of “many striking costume-pantomimes in dance form” offers her annual series of performances; her “forte is mimicry of an unusually satiric nature.” Numbers this year include a burlesque reminiscent of the Isadora Duncan school of dancing, and two Elizabethan dance creations - “Shaking of the Sheets” and “Daunce We Praunce We.”

Nov. 26:

[Note: Interesting way of putting it.] G. Frank, Univ. of Wisconsin pres., says current depression not an indictment of the “machine order” (“array of processes by which we make goods and produce wealth”) but of the “economic order” (“array of policies by which we use goods and distribute wealth”).

[Note: Tariffs and restrictions on immigration seem to have been in the air.] Pres. Hoover says agrees fully with Senator Reed's proposal to suspend immigration for 2 years after July 1 to relieve unemployment; points out that recently tightened visa procedures on his orders have already reduced immigration from 24,000 a month to about 6,000 in Oct.

[Note: Perils of knowing what the “important interests” are doing dept.] Market movements in standard stocks in past 2 weeks “have been under the domination of some of the most important and powerful industrial and financial interests. Their efforts have been directed toward stability, not only in the stock market, but also in various other directions.” While these interests don't desire any spectacular movements, they do believe a reasonable advance in stock prices is warranted.

[Note: Purely coincidental.] Pres. Hoover says no new Federal laws needed to cover “racketeering” activities of gangsters; can be adequately dealt with using existing state laws. Frankie Dunn, “racketeer and late leader of the North Jersey beer-runners” leaves estate of $413,558, mostly in stocks and bonds.

[Note: Thank goodness they took care of that dept.] New Chinese language “Pei-Hua” invented to consolidate hundreds of existing dialects; mixture of Mandarin and other Northern dialects. Language is compulsory in every public school; use is “expected to abolish the language trouble after a generation or two.”

[Note: Elastic biscuits are usually a bad sign.] Biscuit makers generally have reported good 1930 earnings; attributed to “inelastic demand,” brand recognition, efficient distribution, and lower raw material cost.

Nov. 25:

[Note: Interesting to note the sharp drop in Bank of US after the announcement - not sure if this was due to fear of bad merger terms or to rumors of trouble.] Merger announced among four large NY City banks: Public National, Bank of United States, Manuf. Trust, and Int'l Trust. New bank's chair. to be J. Herbert Case, currently chair. of NY Fed.; bank will be fourth-largest in NY with over $700M of deposits, 1M depositors and almost $1B of resources. Following announcement, Public and Manuf. were up sharply, but Bank of US “dropped perpendicularly” 6 1/2 points to all time low of 15 1/2 bid; other leading bank stocks closed only slightly changed. Merger considered very constructive, “calculated greatly to strengthen and stabilize the general banking situation at this center”; the new bank will apply to join the NY Clearing House Assoc. Merger terms “have been tentatively agreed upon,” but “are still subject to modification in one particular.”

[Note: Sheer Genius Dept.] New car features to be exhibited at the 26th Annual NY Automobile Salon Nov. 30 at the Hotel Commodore: a recessed side vanity “illuminated by a tiny lamp and giving all the conveniences of a boudoir table”; and, for the back seat driver, a rear instrument panel including speedometer, clock, altimeter, and radio set.

Nov. 24:

[Note: Rule 1 of banking crisis - there is no banking crisis dept.] Atlanta Fed. Reserve Bank Gov. Black reassures on “fundamental situation” of Southern banks; they have $10B in reserves, tangible wealth of South over $80B.

[Note: Perils of historial precedent dept.] W. Persons, formerly of Harvard and Amer. Statistical Assoc. pres., gives “convincing array of evidence” that “business recovery is in prospect and should be in progress by spring.” Argues that level of economic activity 20%-25% below normal, as observed in previous depressions, is “bed-rock below which depression did not go.” Careful survey of conditions shows “the stage is fully set for a business recovery.”

[Note: Strangely familiar Dept. Also interesting that apple selling by the unemployed was already widespread enough to be joked about.] Editorial: W. Johnson has pointed out the huge growth in govt. payrolls to where they now include one of every 10; “Reducing the thing to an absurdity one might visualize the day when each and every one of us would be a govt. employee.” While Mr. Johnson's suggestion of reducing govt. payrolls by 25% may seem badly timed, he's undoubtedly referring to “holders of the so-called 'gravy' jobs”; these wouldn't need to “take to apple-selling. They could exist on their surplus fat.”

[Note: Strange entertainment I would like to have seen dept.] Sweet and Low - revue presented by Billy Rose. Some good music and acting, though “most of the comedy is of the low order.” “Fannie Brice is best in a Spanish-Jewish song 'I Knew Him Before He Was Spanish,' accompanied by dancing with castanets.” George Jessel appears as a foreign professor showing a series of stereoopticon slides of American advertising slogans. Paula Trueman acts amusingly in “Ten Minutes in Bed,” referring of course to “those last few moments in the morning before a girl dashes off to work.” High point for many will be Borrah Minevitch's harmonica band.

November 29, 2009

Saturday, November 29, 1930: Dow 180.91 -2.20 (1.2%)

Assorted historical stuff:

John. D. Rockefeller, Jr. returns from two-month European tour; says although one can't disregard the grave problems facing the world today, or know what the remedy will be, “I believe that they can and will be solved ultimately. We, as a nation here in America, never had more to be thankful for than we have today.”

Failure of Albert Oustric ends history of “France's big post-war speculator.” Final extent of losses uncertain; forced liquidation by members of the Oustric “group” of cos. has caused general market decline, even in concerns having no business relations. “At bottom the situation is sound,” but failure has been a shock to public confidence. Oustric was said to have previously been rescued by the Bank of France in 1929, but apparently was refused aid this time.

French Premier Tardieu narrowly wins confidence vote during debate on bank failures; three officials who were clients of failed Oustric bank resign. Tardieu consents to Parliamentary investigation after assurances it “would not be judicial in nature.” A. Oustric and P. Bloch arrested and imprisoned on fraud charges.

Goodyear builds largest structure in the world without interior supports to house the two “super-zeppelins” (ZRS-4 and ZRS-5) being built for the Navy; dimensions are 1,175 feet long by 325 feet wide by 211 feet high.

Committee on revising NY building code proposes changes to make 100-story buildings more practical, including increasing limit on elevator speed from 700 feet/minute to 1,200 feet/minute, and operating two independent elevator cars in the same shaft.

Original telephone invented by Bell had 52 parts; today's has 201.

Northwest Airways has bargain fare of $35 round trip between Chicago and Twin Cities; plans to install radios in all its planes.

Charles Millar, “eccentric lawyer and sportsman” of Toronto, left a half million dollars to the Canadian woman to have the largest number of children by 1936. Currently leading is Florence Brown, 42, who claims to have borne 26 children in the past 22 years; second is Grace Bagnato, 37, who just gave birth to her 20th.

Market commentary:

Market wrap: Reactionary trend from pre-holiday trading became more pronounced; volume was down due to many traders taking a long weekend, but considerable selling took place and stocks moved down most of the session. Traders were generally bearish due to failure of stocks to hold recent gains, as well as lower steel production and rail freight traffic. Rails were particularly weak following rail executives' request for legislative relief. Major industrials were “in steady supply” while retail and mail order shares “lost their recent buoyancy.” Pressure lightened in final hour on short covering, with a slight recovery on lower volume. Bond market moderately active, generally lower; US govts. remain firm; foreign govts. weak; corp. weak with many hitting new yearly lows.

While rail executives painted a bleak industry picture in asking for legislative relief, it's worth noting “the carriers have no effective way of promoting their cause before legislative or regulatory bodies except to emphasize their disadvantages to the utmost”; their only way to get substantial relief is to show “disaster threatens.”

Many holders of rail, utility, and industrial bonds are reported switching into govt. issues due to continued reports of “drooping” corporate earnings.

T. Shotwell of H.L. Horton & Co.: “Better times are in sight”; business more cheerful, “has quit running away and is facing the situation with that determination to win which is the American characteristic.” Time has come to invest in stocks for capital increase as well as income. European troubles “mostly noise”; wars generally caused by food shortages; at start of Great War there was a world shortage of 20%, but now there's a “world surplus of food and of productive capacity.”

Broad Street Gossip: “'When looking for bargains, don't forget ... Wall Street,' remarked a broker. 'Two cheerless Christmases in Wall Street in succession would be rather a rare happening.'”

Economic news and individual company reports:

Assoc. of Railway Executives, representing all class 1 rails, reportedly will ask Congress for sweeping legislative relief including increasing license costs on buses and trucks, putting coastal ships under jurisdiction of the ICC, and making oil industry divest itself of pipelines.

Bradstreet's reports cooler weather has stimulated buying, offsetting to some extent effects of bank suspensions in South and Midwest in the past 3 weeks; fall buying is still below a year ago.

Total market value of the 1930 cotton crop will decline drastically; the 1928 crop value was $1.535B, 1929 was $1.426B, and 1930 will be about $926M.

Electric output by US light and power industry for week ended Nov. 22 was 1,722 GWHr vs. 1,718 in prev. week and down 6.2% from 1929.

Operating income of 103 telephone cos. in Sept. was $22.925M vs. $23.363M in 1929; first 9 months was $202.0M vs. $205.5M.

Company reports since Oct. 1: 225 companies reported higher earnings vs. 1929 and 376 lower; 584 dividends unchanged, 57 increased, 90 cut.


Scarlet Sister Mary - Ethel Barrymore's long-deferred return to Broadway was an occasion, even more so because it was also the New York debut of her daughter, Ethel Barrymore Colt. “And the fact that the return of the one and the debut of the other were in black-face made it an occasion twice over.” However, the play's characters aren't well developed, and though they're sympathetically approached, “the time seems to have passed when black-face makeup and rhetorical inflection, however sympathetic, will make for a complete illusion” in a realistic drama, especially given the success of black actors playing black parts in the past few years. Plot: Sister Mary weds July, who then leaves her for “the serpentine Cinder, who knows the wicked ways of the city.” While this desertion is a severe blow, Mary recovers and, “in defiance of the church which has expelled her, she lives according to her own law for 20 years, bestowing her great affections on many men, having many children and radiating an earthy strength and personal agreeability in so many ... directions that her life is almost legendary.” Death of her firstborn child causes Mary to see new meaning in life and death, return to faith.


“'How shall I account for the $10,000 our cashier skipped out with last week?' asked the head bookkeeper of the bank president. 'Oh, charge it to running expenses,' ordered the president.”

+ The Boring Stuff:

Congress seen unlikely to act on Rep. Strong's bill charging Fed. Reserve with stabilizing purchasing power of money. Fed. authorities don't agree prices can be completely controlled by expanding or deflating credit; while they operate with an eye on the price level, “being charges with its maintenance is a burden that the system probably would not care to shoulder.”

Editorial: The Federal Power Commission, in its final report, has given Congress a useful warning. The report comes out against Federal development of water power, and notes that even in areas with abundant water power resources, fuel-generated electricity is becoming competitive with hydro. The proposed govt. owned hydro plant at Muscle Shoals is argued for as a yardstick to measure the utility industry, but what if after the expected $30M-$50M cost it can only compete at a loss with private fuel-burning plants? It would then be “one more drain upon the national treasury,” while unsettling the private Southern power industry.

L. Taber, National Grange master (farmers' organization) says hasn't agreed to inaction on the farm debenture at the upcoming short Congressional session; Sen. Borah (R., Idaho) says will fight for the measure.

Agriculture Dept. sees better demand for Southern farm products next year, though credit outlook will be worse due to serious decline in 1930 income.

US per capita consumption of most dairy products hit records last year: milk 58 gallons annually; ice cream 3 gallons; cheese 4.62 pounds; butter 17.61 pounds.

Dr. H. Luther, Reichsbank pres., says Germany's ability to meet Young plan (reparations) agreements depends on export markets and ability to borrow foreign funds at cheap rates; however, says regardless of outcome of demand for reparations revision, Germany will meet obligations promptly and unequivocably.

British coal and rail unions may strike over proposed cuts in wages or hours worked.

Cuban newspapers will reportedly resume publication Nov. 28 with censorship lifted.

Australia to subsidize production of gold by $5/ounce for gold in excess of last year's total production.

Prof. Junkers of Germany wins second phase of patent suit against Henry Ford for patent infringement of airplane parts.

US Army planes flew about 32.5M miles in year ending June 30; 52 people were killed in accidents, about 55% of which were caused by human error.

When the old Standard Oil was broken up it had a market cap of about $400M; this year, the various Standard Oil cos. will pay $287M in dividends and have a total market cap of about $4B.

Conservative observers advise postponing buying until market again shows resistance to declines; at the same time, most brokers advise against going short.

This week's action considered ominous to technical market students; “a double supply top, after being established definitely, usually proves extremely difficult to negotiate on subsequent rallies.”

Professional traders said to have been bearish the past week on failure of market to follow rallies up.

Opinion of “important financial authorities” about 2 weeks ago that forced liquidation had ended for now, though met with skepticism at the time, has been largely confirmed since.

One broker is “greatly encouraged by the large number of open orders” on their books to buy stocks somewhat below market.

Oct. rail operating income report considered disappointing; percentage declines in gross and operating income vs. 1929 were larger than in Sept. However, year over year comparisons in Nov. are expected to be better based on recent loadings reports.

G. Atkins, VP Missouri-Kansas-Texas RR, says Nov. was best month for the M-K-T in Texas in past 14 months; “Texas will lead on the uptrend of business just as it led on the downtrend. ... Next year will be nothing big, but the country will recover itself.”

Commodities weak. Grains and cotton down substantially. Copper still offered at 10 1/2 cents by smelters, with large producers asking 12 cents; buying has picked up somewhat, and less copper is available at the low price. Future prices uncertain; recent production curtailment of 20,000 tons/month will be enough only if industrial business has bottomed.

Fed. Reserve reports money in circulation Nov. 26 up $83M to $4.565B, total Reserve Bank credit outstanding up $25M to $1.028B. Member banks in NY City report brokers' loans down $63M to $2.122B vs. $3.430B in 1929, new low since April 1925; loans on securities to non-brokers down $6M to $2.054B.

Dow average of eight finished iron and steel products was $44.42/ton, unchanged from prev. week and low for 1930; 1929 range was $49.88 - $51.25. Scrap market show no improvement, with most markets weaker.

Dun's reports readjustment due to lower farm prices and unemployment is still proceeding, but “transition to a sounder basic status ... has been proceeding steadily, and ... a more confident view of the prospects appears to be warranted.”

Class 1 rails in first 10 months placed 73,887 new freight cars in service vs. 68,073 in 1929, and 694 new locomotives vs. 612 in 1929.

First 58 rails report Oct. operating income up 7.6% from Sept. but down 26.9% from Oct. 1929; gross was up 3.2% from Sept. but down 20.5% from 1929.

Production of oil is now lowest since end of 1926; consumption has gained tremendously since then. Oil industry said meeting its problems in determined manner, though curtailment efforts must be maintained through winter for definite improvement.

Bond issuance in Nov. so far has been $203M, only slightly above the year's low in Aug. While demand for bonds has been down in the past two months, authorities are now more optimistic; see improved tone in the bond market, though this hasn't yet translated into higher prices.

Several more small banks close in Mo., Ill., Ky., and Miss.

New Orleans Cotton Exchange directors call for end to govt. (Farm Board) interference and competition against private business men in the cotton trade.

Employment by 2,319 reporting firms in Midwest in week of Oct. 15 was 515,003, down 2.3% from Sept. 15 week; wages were $13.968M, down 1.8%.

Fed. Reserve reports Oct. sales of dept. stores in NY district were 5.4% below 1929 vs. 8% decline in Sept.; chain stores were about 5% below 1929, similar to Sept.; Oct. sales reported by wholesale chains were about 22% below 1929, similar to Sept.

Cuban-American committee of sugar producers headed by T. Chadbourne to meet with world sugar producers in Amsterdam on restricting production. Dec. sugar futures were up 7 points to 1.32 cents; this, however, is still well below the 2 - 2.25 cents that would be required for profitable Cuban production.

Production of soap products in US in 1929 was 25 pounds per capita, for a total of 3.056B pounds, total value $303.4M.

Inventories of large tire makers are down far enough that full production should resume in Jan.

Kreuger & Toll-controlled Swedish Pulp Co. currently makes over 25% of Swedish output of sulphite pulp, and 19% of Swedish wood exports; owns over 4M acres of wood land and 12 hydroelectric plants.

New Era Motors Co. files for voluntary bankruptcy.