Year in review (2) Jan. 2, 1931

No Journal was published Friday, Jan. 2, 1931 following New Year's Day. More year-in-review: assorted opinions and forecasts from business leaders and authorities (some repeated from 12/30 and 12/31).

Note: For your convenience, I've marked the ones that are at least moderately pessimistic with [***] - almost all of these still anticipate a recovery sometime in 1931.

Industrial executives:

G. Swope, GE pres., says expects electrical mfg. industry in 1931 should be somewhat better than 1930.

R. Duepree, Procter & Gamble pres.: From history of previous depressions, believes “we must be very close to, if not actually in, a turning point.” Production has exceeded consumption in 1930, and inventories are now low; other good factors for business include low interest rates, low material costs, and increased efficiency

A. Sloan, GM pres.,: 1931 should be met with different approach, "new ideas, new measures, new confidence and new hope ... if our attitude towards the new problems of the new year is constructive, rather than critical, we shall make greater progress in 1931 than we did in 1930."

W. Chrysler estimates 1931 auto production at 4M cars vs. 3.5M in 1930; estimates inventories 35%-40% below a year ago; increased consumption of gasoline shows people have been using up cars and postponing normal replacements; “year just ending has been one of intense preparation for a business revival” that will demand larger volume of production and reward those developing new ideas and better values.

J. Scoville, Chrysler statistician, sees recovery to normal auto production by about Sept., 1931.

W. Teagle, Standard Oil NJ pres.: Cooperation by oil industry will help deal with problems more effectively. Points to sizable reduction in production and inventories during the year; if not for self-regulation producers could have doubled 1929 production. However, sizable additional curtailment needed by refineries.

E. Thomas, US Steel VP: Past pattern of steel industry is two excellent years to one moderate year. Future outlook promising, financial situation stronger than in previous depressions. Temporary restriction in demand leads to accumulated future needs.

E. Weir, Nat'l Steel chair.: Sees 1931 steel production considerably above 1930, general business closer to normal.

S. Ker, Sharon Steel pres., sees steel plants much better employed by mid-first quarter, gradual uptrend in general business in 1931.

[ *** ] Pres. Pelley of New Haven RR: Sees early part of the year probably continuing at low levels, but gradually improving trend leading to definite upturn sometime during the year. Cites very easy money, commodity price stabilization, consumption catching up with production.

M. Friedsam, B. Altman pres.: The boom had accumulated “many evils of extravagance and carelessness” than needed to be eliminated; unfortunately the “cleansing process” of the past year was too drastic, leading to some greater evils. However, “business in general is now in a good position to begin reconstruction, and ... will now start things moving in the right direction.”

D. Knott, Knott Hotels chair.: Currently unable to get normal delivery on large orders, indicating inventories are too low; “the law of demand itself is about ready to put an end to this unnatural economic condition ... It is inevitable that times are going to be better, and that the change is right upon us.”

[ *** ] N. Carlton, Western Union pres., says 1931 may be “very disappointing business year” based on usually accurate barometer of Western Union business, currently 15% below 1929. “ The headache following the late financial spree is far from over ... many inefficient and over expanded businesses which grew like mushrooms in the boom times remain to be liquidated.” The very form of the US govt. is endangered if we put too much of the burden on those least able to withstand the effects of reduced income and unemployment.

Financial executives:

[ *** ] L. Pierson, Irving Trust chair.: business fundamentals sound, but sees slow and irregular recovery; depression may not reach bottom before spring and may persist through 1931.

B. Smith of Cleveland Trust presented new forecasting index to Amer. Statistical Org. annual meeting. Index has been tested over past 30 years and has forecasted conditions a year in advance about as accurately as statistical measures taken in real time; it now indicates an upturn in US business is to be expected shortly (index combines interest rates, bond flotations, gold movements, and rapidity of change in stock and bond prices).

L Harriman, M&T Trust of Buffalo pres., says most drastic readjustments already accomplished; many products are selling below average cost of production, a situation that can't continue indefinitely. Remarkable number of corporations have maintained profits in spite of depression and are financially strong.

L. Wakefield, First National Bank pres., sees country working itself out of depression; “I am sure we can look forward to steady business improvement ... The greatest danger ... is that we may be drawn to unsound economics schemes” or cure-alls.

Central Trust of Illinois Jan. digest: Sees improvement slight early in 1931, unmistakable by end of winter. Smaller inventories of finished goods should improve demand for goods next year and “should mean a volume gain for 1931 almost equal to the volume loss for 1930.” Agriculture has good outlook for 1931.

Union Trust of Cleveland: “Financial situation contains the promise of better times ahead, just as do manufacturing and distribution.” Easy credit should prove real aid to business recovery. Recent decline in high-grade bonds unjustified.

Business associations:

P. Weld, NY Cotton Exchange pres., notes past year's oversupply and drastic price decline, but strongly believes this will be corrected by lower production and increased consumption, leading to price recovery.

J. Smull, NY State Chamber of Commerce pres.: “Tribulations of 1930” will exert influence on the new year; nevertheless, believes “1931 will develop into a year of great constructive effort ... which eventually will bring a safer, happier, and more lasting prosperity than we have enjoyed before.”

W. Booth, Merchants' Assoc. of NY pres.: US is resilient: “give us an orderly stock market and a fair prospect of business and we instantly forget the terrors of the past.” Sees banking situation being rapidly cleared up, possibility of returning to 1927-1928 level of business even before world recovers.

Assorted economists and blatherers:

[ *** ] Sir Josiah Stamp sees recovery in US before Europe; recovery unlikely to start before April, will start weakly and not gain momentum until 1932. Sees some 18 valid causes for the depression; immediate cause was overspeculation on NYSE, next was overproduction of raw materials, but an underlying problem has been the limited quantity of gold compared to production volumes. Calls for continued easy money, govt. economy and balanced budgets, assault on gold problem, and avoiding new Stock Exchange boom.

Harvard Economic Society: Based on historical pattern, commodity prices are unlikely to improve until after general business upturn.

Hornblower & Weeks: “The closing price levels of 1930, taken by and large, offer investment opportunities which will probably be considered the bargain prices of the coming decade.” At previous short-lived bottoms in Nov. 1929, June 1930, and Nov. 1930, dividend yields on high-grade stocks were still relatively low; now, out of a total of 853 common stocks listed on the NYSE, only 42 yield less than 5%.

[ *** ] Abreast of the Market column: Past year's depression has been much worse than predicted a year ago. Commodity prices, industrial activity, and earnings all declined much more than expected. “The deflation has been most complete.” Companies able to weather the storm should be in good position to benefit immediately from any upturn. Most industrial leaders expect considerable improvement in 1931, though possibly not until the second half.

Officials:

Commerce Sec. Lamont: Elements of recession appears to have “spent most of their force” based on slowing of downtrend toward end of year. Industrial production is down about 20% off peak but only 13% from 1928; trade has fallen 25%-30% in value but only 15%-20% in volume; factory employment fell about 15% but this is much less than in previous depressions. Encouraged by resilience in consumer buying, with value of retail sales only down 7%-10% from 1929. Appear to be in phase similar to recovery from previous depressions where savings are rebuilt and goods are wearing out. “While it is impossible to forecast at what time unmistakable evidence of improvement in business will occur, it is clear that we have reached a point where cessation of further declines and beginning of recovery may reasonably be expected.”

[ *** ] Dr. J. Klein, Asst. Commerce Sec.: European unemployed may exceed 7.5M by Feb.; unless ranks of unemployed decline “we may expect recurrences of political instability.”

[ *** ] C. Snyder of Fed. Reserve NY: Contrary to “phantasies of a 'new era' of unending prosperity so widely prevalent but little more than a year ago,” it's clear that the business cycle is still with us “in all its force.” Nov. was lowest point in the depression, with about the same decline from normal levels as in previous crises including 1921, 1907, 1893, etc. However, while not most severe, depression is clearly most world-wide on record. Part of cause must be accumulation of 2/3 of world's monetary gold in US and France. Disagrees with belief overproduction was cause of price declines, since commodities with no unusual production increases have declined along with those that seemed over-expanded.

Thursday, January 1, 1931: Dow 164.58 +1.49 (0.9%)

[Note: Forecasts made by assorted authorities and business leaders for 1931 will be in the year-in-review post tomorrow.]

Assorted historical stuff:

Wall Street closes 1930 with "an expectancy of better times in the air." While not predicting immediate return to prosperity, general mood was the most optimistic since midyear slump dashed hopes of early business revival. General belief that "factors of long-range bullish import" are steadily increasing, while vast bulk of necessary deflation has been accomplished.

Editorial: Pres. Hoover's actions to bring about Eastern rail consolidation were "statesmanship of the highest order"; assuming the plan is carried out, it would be the "outstanding constructive achievement of 1930" and could easily be the "one thing needful to turn finance and business away from its recently too pessimistic mood." It would enable far-reaching improvements and services to innumerable communities. In sum, it would release resources and energies of more than 50,000 miles of railroad from "narrow private hostilities" and apply them to "manifold works of real progress." Preliminary ICC nose count indicates 6 members approve of plan, constituting a majority. Sen. Couzens continues criticism, calling Pres. Hoover's public support "most unethical" since ICC members owe their position to him.

Pres. Hoover seen opposing veterans' bonus payment; bonus supporters apparently want a showdown to make Mr. Hoover less popular with veterans. "Congress still has the idea that it is dangerous politically for the President to oppose legislation granting favors for special groups." However, this is doubtful; Pres. Coolidge opposed the veterans' bonus and some aid to farmers without suffering politically.

[Strangely wholesome.] Various exchanges celebrated the New Year in raucous style. NYSE held gala in final hour of trading with R.K.O. orchestra playing the latest tunes and pages demonstrating the latest dance steps; "Wait 'Til the Sun Shines, Nelly" was played at the closing gong. Curb Exchange held celebration after trading, with two orchestras and trading floor decorated with evergreens and tinsel. Cotton Exchange members dressed in grotesque clown costumes and paraded around the exchange floor playing music through a maze of confetti, colored tape, and balloons.

Berlin authorities are concerned about the lure of the big city; Berlin's population increased by 80,000 last year to almost 5M, even though prospects of finding a job or apartment in the city are slim. In most cases, public welfare organizations must help the stranded newcomers.

International Stadium Co. to erect stadium in Jersey City seating 110,000 at cost of $2.5M.

Number of stars that can be photographed with the 100-inch reflecting telescope on Mt Wilson, Calif. is probably well over a billion; however, astronomers believe our own Milky Way galaxy alone contains 30 or 40 billion stars.

[Hemp??] Materials going into the telephone include copper, lead, tin, zinc, iron, aluminum, gold, silver, platinum, wool, cotton, hemp, silk, carbon, rubber, asphalt, mica.

William Tilden II resigns as amateur tennis player to make series of movies at M.G.M.

Market commentary:

Market wrap: Stocks advanced early and maintained gradual uptrend for most of the day, spreading through the general list; some profit-taking came in late. Bond market active, generally strong; US govts. firm, slightly under year's highs; foreign irregular; corp. strong. Commodity trading quiet, prices mixed in narrow range.

Sharp rallies in some utilities and trading favorites including Auburn, J. I. Case, and Coca-Cola; strength in US Steel, Eastern rails, motor shares, coppers.

Conservative observers will study market action closely in the next week to ten days for trends; most favor the long side but are still on the sidelines.

Short interest is up sharply in the past week, based on demand in the loan market and heavy borrowing between brokers; both professionals and outsiders said active on the short side.

Odd-lot (small) buying of standard stocks for cash said continuing during recent declines.

Some tax selling may persist into the new year from investors who took enough losses to offset their 1930 income but still had losses to spare.

[Interesting - that whole long cycle-short cycle thing again.] Broad Street Gossip: One market observer notes most of the bears are now young, with veteran traders mostly long or on the sidelines. Young traders, having been through only one cycle, can see nothing encouraging ahead, whereas “the veteran trader has been through numerous depressions and bull markets and knows that the market has always come back to make new highs.”

Broad Street Gossip: In spite of all the depression talk, US Steel just reported its number of shareholders grew 6,403 to a new high of 141,907 in the last 3 months; this number has gained 30% through the whole depression period. “It is a very rich country that can make a showing like that.” This gain indicates passing of stock from weak to strong hands; this may later be reflected in the stock action.

Chicago Board of Trade VP P. Carey says CBOT will consider closing if Farm Board continues price support operations into next crop year; "traders are tired of the continued political attempts to hamper the board with ridiculous and unsound restrictions for purely political purposes." Farm Board chair. Legge calls Carey statement "petulant," says doesn't want CBOT closed but it may be necessary to eliminate short selling to prevent manipulation of grain markets. Canadian grain interests generally react unfavorably to Premier Bennett's plan for aiding farmers.

Editorial: After two futile and very costly years, Premier Bennett has announced Canada will now take no steps to fix the price of wheat. During those two years, the wheat price at Winnipeg went from $1.40 to 50 cents, while the carryover greatly increased. Mr. Bennett says Canada can't hope to fix domestic wheat prices since it can't consume all its production domestically. The same could be said for the US; Canada's bitter experience condemns the Farm Board plan as well.

Economic news and individual company reports:

Fed. Reserve notes unusual demand for currency in past month, partly caused by Bank of U.S. closing; first important bank to fail in this district in some years; followed by heavy withdrawals at some other banks, possibly aggravated by false rumors; Fed. Reserve mechanism adequate to meet demand, with little tightening in money markets; currency withdrawals returned to normal after a few days, only one other sizeable NY bank failed (Chelsea bank, not a Fed. Reserve member).

Bank of U.S. stockholders file suit charging officers and directors with negligence, and asking judgment for losses exceeding $50M. Suit names bank pres. B. Marcus, charges bank subsidiary made large profits manipulating the bank's stock.

Fed. Reserve reports seasonally adjusted index of department store sales hit new yearly low of 98 in Nov. vs. 102 in Oct. and 108 in Nov. 1929; first 11 months sales declined 7% vs. 1929.

Auto financing by 492 cos. in Oct. was $81.5M vs. $126.6M in 1929; of this, $45.8M was advanced on new cars vs. $80.4M in 1929, and $33.9M on used cars vs. $41.7M in 1929.

Employment in week of Nov. 15 by 1,830 Midwest mfg. firms was 348,546, down 2.8% from Oct. 15 week; payrolls were $8.424M, down 7.6%; payroll decrease was much larger than in 1929.

Call money eased again to 3%. Most observers undisturbed by flurry in call money, believe it's due to year-end factors and will return to normal in about a week.

Commerce Dept. revised Nov. trade figures: exports $285.4M vs. $442.3M; imports $203.7M vs. $338.6M.

“Fast freight” rail shipments from Chicago hit a new on-time record of 96.59% in Nov.

Revenues of 95 public utilities in Oct. were $205.1M vs. $197.5M in 1929; net earnings $84.1M vs. $83.0M.

Leaf tobacco exports in first 10 months were 459.6M pounds valued at $110.0M vs. 426.8M valued at $108.0M in 1929.

Brazil govt. says will buy coffee now in storage, undertake “propaganda” abroad to increase consumption. Next world coffee crop estimated at 32M bags; highest yearly consumption ever was 25M bags.

French rail revenues in year up to Sept. 23 were down only 0.5% from 1929; recent months have trended down.

Canadian Premier Bennett's plan to aid farmers will involve formation of a "colossal" private financial corporation to extend credit and avoid liquidation of 1930 crop; govt. will also assist needy farmers, but will not attempt to fix wheat price.

[Eventually became Citigroup after 71.4 subsequent mergers.] National City Bank to lend $15M to Mexico to stabilize currency.

Companies reporting decent earnings: Pacific Lighting, Engineers Public Service, British-American Tobacco, Gulf Coast Lines.

Theater:

Ruth Draper [did multi-character one-woman shows; fans included Henry James, Edith Wharton, George Bernard Shaw, Katharine Hepburn, John Gielgud, and many others; credited with influencing modern figures including Lily Tomlin, David Mamet, Emma Thompson, etc.] maintains her “dominating and unique” position in theater with current show at the Comedy Theatre that ranges from “subtle satire ... to deep pathos.” Characters include the wife, secretary, and lover of Mr. Clifford, a captain of industry; a “Dalmatian peasant” in a New York hospital; and a throng of art-lovers and tourists in a Florentine cathedral.

Joke:

“'Yes, I heard a noise and got up, and there, under the bed, I saw a man's leg.' 'Good heavens! The burglar's?' 'No; my husband's. He'd heard the noise too.'”

Wednesday, December 31, 1930: Dow 163.09 +2.93 (1.8%)

Assorted historical stuff:

Editorial: While the past year was painful, the pain won't necessarily end with the year. However, there's good reason to believe the country is in a better position than it was a year ago. The past year has rid the country of illusions, including the theory shortly after the crash that the US had invented the “harmless panic.” It has produced a new realism, where business projects must be sound to proceed. The year has also provided an “incalculable amount of ultimate benefit” in eliminating the many “weak spots” that an economic boom always produces. Institutions that “withstood the extraordinary strains of 1930” should be well positioned for the tests of 1931; common sense and experience suggests these will be less severe. Consumption has outpaced production for months; “effective demand for expanded mill and factory production cannot logically lag far behind.”

Pres. Hoover announces Eastern rail consolidation plan successfully negotiated; seen likely to get ICC approval; Congress may be more difficult - in particular Sen. Couzens is skeptical of claimed economies, may be supported by insurgent Republican element. However, Congress must pass new law to block proposal; by current law, ICC has authority over consolidations.

Editorial by T. Woodlock: Utilities have to this point developed in more harmony with the public than rails. However, lately two factors have impaired public relations: consolidation of widely scattered utility units into big corporations, and obscure and sometimes unsound financing of those corporations. Utilities must address these issues, taking more care to handle relations both with customers and investors so as to be open and above suspicion, and maintain good will.

Farm Board economist J. Favis says Board must learn by experience; “mistakes, even costly ones, may be made.”

Agriculture Dept. notes soil erosion on over 75% of cultivated land in US, some of it serious; in some major farming areas, over 90% of land is losing topsoil.

Agriculture Dept. to issue weekly news releases designed to help people of limited means make healthful selection of food.

Editorial: The Untermeyer plan for NY transit unification deals vigorously with an almost impossible situation. However, it's unrealistic to expect, as Mr. Untermeyer writes, that the management contract would place the the system beyond use for political purposes; “To which pious intention every district leader from the Upper Bronx to the furthest reaches of Queens or Staten Island will smilingly respond 'O.K.'”

[Later known as the Empty State Building.]Alfred E. Smith reports leasing and construction of Empire State building proceeding rapidly; building should be ready for occupancy well before May 1.

[Sheer Genius dept.]
Internal combustion engine demonstrated at Holly Motors combining usual carburation with air injection as in diesel engine; expected to enable small car to run 50 miles on gallon of gasoline.
M.D. Hart, British scientist, proposes silencing airplanes by arranging noises caused by engines and propellers to cancel each other.
Lt. H. Connor, transatlantic flyer, plans 3-day transatlantic mail service. Mail plane would overtake ship 600 miles from coast, land on it, then take off from ship when it was close enough to destination.

World's highest gas prices: Nairobi, 69.2 cents/gallon; La Paz, 64.8 cents; Ethiopia 36.5 cents.

Trained animals are paid more than almost all actors in Hollywood; daily rates listed by M.G.M. include alligators $12 to $25; ostriches $25; monkeys $25 to $35; horses, $25 to $50; bears $50; camels $75; tigers $100; leopards $100; elephants $150; trick mules $150.

[I'm not sure about the Canadians getting spared part.]For the past 8 years William Greenwood of Olympia, Wash. has been building the “Second Ark” based on his vision of a 1932 flood that will deluge the whole West coast south of Canada as retribution for the wickedness of the great cities on the coast.

Justice Holmes, 89 years of age, gives elegant description of the concept of a corporation in a recent decision: “If it is a fiction, it is a fiction by law with intent that it should be acted upon as if true.”

Market commentary:

Market wrap: Stock market featured vigorous rise in rail shares, particularly in the Eastern roads involved in consolidation; industrials and utilities also showed greatly improved tone; after some early hesitancy upswing spread to the general list by noon. Bonds mixed; US govts. firm; foreign weak; corp. mixed but with good rally in rail bonds. Commodities generally firm, but silver hit new low of 30 3/4 cents.

Broad Street Gossip: Market has been going down monotonously for so long, traders now come in expecting new lows each day. Traders using the strategy of buying on breaks and selling on rallies have lost a lot of money due to the lack of rallies on which to sell.

Broad Street Gossip: In spite of all the talk about hard times, Broadway theaters, Madison Square Garden, and local big movie theaters continue to be packed; on one recent evening it took an hour to get from 14th St. to 116th in a taxi.

Substantial buying seen by traders expecting a rally in the short term based on historical year-end precedent and impressive support of leading shares during recent tax selling.

Bull traders reported ready to resume work for higher prices “as soon as an incentive appears for such operations.”

Past year's depression has been much worse than predicted a year ago. Commodity prices, industrial activity, and earnings all declined much more than expected. “The deflation has been most complete.” Companies able to weather the storm should be in good position to benefit immediately from any upturn. Most industrial leaders expect considerable improvement in 1931, though possibly not until the second half.

Hornblower & Weeks: “The closing price levels of 1930, taken by and large, offer investment opportunities which will probably be considered the bargain prices of the coming decade.” At previous short-lived bottoms in Nov. 1929, June 1930, and Nov. 1930, dividend yields on high-grade stocks were still relatively low; now, out of a total of 853 common stocks listed on the NYSE, only 42 yield less than 5% [Pretty amazing!].

[Business leaders' forecasts dept.]
W. Chrysler estimates 1931 auto production at 4M cars vs. 3.5M in 1930; estimates inventories 35%-40% below a year ago; increased consumption of gasoline shows people have been using up cars and postponing normal replacements; “year just ending has been one of intense preparation for a business revival” that will demand larger volume of production and reward those developing new ideas and better values.
G. Swope, GE pres., says expects electrical mfg. industry in 1931 should be somewhat better than 1930.
N. Carlton, Western Union pres., says 1931 may be “very disappointing business year” based on usually accurate barometer of Western Union business, currently 15% below 1929. “ The headache following the late financial spree is far from over ... many inefficient and over expanded businesses which grew like mushrooms in the boom times remain to be liquidated.” The very form of the US govt. is endangered if we put too much of the burden on those least able to withstand the effects of reduced income and unemployment.
L. Wakefield, First National Bank pres., sees country working itself out of depression; “I am sure we can look forward to steady business improvement ... The greatest danger ... is that we may be drawn to unsound economics schemes” or cure-alls. P. Weld, NY Cotton Exchange pres., notes past year's oversupply and drastic price decline, but strongly believes this will be corrected by lower production and increased consumption, leading to price recovery.

Economic news and individual company reports:

Rail freight loadings for week ended Dec. 20 were 713,810 cars, down 30,633 from prev. week and down 128,965 or 15.3% from 1929 week. Nov. net operating income for all class 1 rails estimated at $63.8M, down 26.4% from 1929 and 43.8% from 1928.

Steel ingot production in week ended Monday was at 24% due to holiday shutdowns; this was better than the predicted 20%. There was a sharp comeback at the start of this week. Iron Age reports 1930 year of drastic adjustment for steel, total production of 40M tons down 27% from 1929. However, confidence has been steadily gaining through Dec., along with contracts for first quarter. American Machinist reports strong machine tool inquiries, prosperous new year predicted.

Census Bureau reports total value of all products manufactured in 1929 was $69.4B vs. $62.7B in 1927.

Germany's foreign debt estimated to exceed foreign investments by $4B; in 1913, the latter exceeded the former by $5B.

Canadian Premier Bennett says govt. will guarantee banks against Wheat Pool losses, provide direct assistance to farmers.

Ivy Lee, sugar conference negotiator, says all sugar producing nations must make severe sacrifices; 'Laissez-Faire' and survival of the fittest will bring ruin to large numbers with no benefits to anyone. Results will affect billions of invested capital and millions of workers and farmers, have far-reaching social and political consequences. Cites $750M US investment in Cuban sugar production, now valued at $35M.

Call money eased to 3 1/2%.

NYSE seat sold for $192,000, down $8,000 from previous sale and lowest price since 1927. The high price in 1930 was $480,000.

City Ice & Fuel reports ice industry had its best year in 1930, with tonnage sales up 3% vs. 1929 to over 64M tons.

Tire companies expected to cut prices to meet cuts by mail order houses; this would reverse last Nov. 1's price hike.

Companies reporting decent earnings: American Can, Northern Paper Mills.

Jokes:

“'Really, gentlemen,' said the election candidate, 'with all this uproar I can hardly hear myself speak.' 'Well, cheer up,' shouted a man, 'you aren't missing much.'”

“Old Lady (to Tommy) - Surely your mother could find pieces of material more like your trousers when she patches them. Tommy - That ain't a patch; that's me.”

“Wifey - There's an old clothes man at the door. Hubby - Tell him I've got all I need.”

Tuesday, December 30, 1930: Dow 160.16 -0.14 (0.1%)

Assorted historical stuff:

Washington report: Pres. Hoover has addressed the nation by radio 37 times this year, a record; Pres. Coolidge made the same number of broadcasts in seven years. Sen. R. Wagner (D, NY) says US must finally accept unemployment insurance despite opposition; has introduced bill in Congress. Editorial: It's not surprising that Sen. Norris [Republican insurgent] rejected an offer of party leadership; as a political malcontent, he would rather stay outside the system and throw inaccurate charges at it. Wickersham Commission said unlikely to recommend changes to Prohibition; will report to Pres. Hoover in second week of Jan. Sen. Vanderburg (R, Mich.) proposes allowing veterans in need to borrow more against compensation certificates; administration said sympathetic.

Recovery in 1931 hoped for by British Premier Ramsay MacDonald, AFL pres. W. Green, Bush Terminal Co. pres. I. Bush.

AFL pres. Green sees basis for business prosperity in high wages, organization of wage earners, shorter working hours, and coordinated control of industry. Hopeful on spring recovery; Dec. increase in unemployment much less than Nov., and less than usual Dec. increase.

Dr. J. Klein, Asst. Commerce Sec., says European unemployed may exceed 7.5M by Feb., unless ranks of unemployed decline “we may expect recurrences of political instability.” Editorial: Much of the European economic weakness is caused by misguided tariffs supposedly enacted to help domestic economies. For example, many countries have raised wheat tariffs to encourage domestic production, with a resulting huge wheat surplus. In the machine age, nations are inescapably dependent on each other; this type of economic warfare makes all losers.

China enacts new tariff schedule with some drastic increases. Denmark, Holland, Sweden, Norway, and Belgium/Luxembourg sign tariff agreement barring increases without notice.

[Ay Chihuahua! dept.] Agriculture Dept. says Russia blessed with abundant first-grade wheat land; may increase production to take care of domestic needs using collectivization and mechanization, and export as much as 200M bushels by 1933.

Broad Street Gossip: Soviet leader Stalin charges that US workers don't benefit because of capitalist control. If Mr. Stalin would take the time to go over shareholder lists of AT&T, US Steel, GE, etc. he would find the great majority are workers and small holders. This is because of wages sufficient to buy homes and cars, educate their children, and put money into savings and stocks.

[Strangely familiar.] Response of borrowers to Fed. easy money policy awaited; “The cook has done his job and the food is ready. ... It is up to the hungry to 'come and get it.'”

[Interesting.] 1930 hailed by Met. Life Co. as record health year for US and Canada; no widespread outbreaks of contagious disease, and even cancer mortality declined after a long series of increases.

General Foods says yearlong test marketing of Birdseye quick-freezing process in Springfield, Mass. successful; can deliver meat products to consumer at same prices charged for fresh meat, cuts selling costs.

Diners on the Boston & Maine RR vote 78%-22% to allow smoking in dining cars; women voted 74%-26% and men 80%-20%.

A fundamental defect seen in production of talkies is lack of unified control. One person does adaptation, another writes additional dialogue, then director does production, then an editor unfamiliar with the director's concept edits the film for final showing. Needed is more producer-directors able to oversee entire production as reached a high point in silent films under Charlie Chaplin, D.W. Griffith, and Eisenstein; Edmund Goulding is already having success doing this with talkies.

A famous Paris hotel has bought two four-passenger airplanes for use by its patrons. The largest will be used for travel to London, Berlin, or Madrid; the smaller is for travel to golfing or gambling resorts. Charges are 80 cents/mile for the large plane and 50 cents for the small one.

Market commentary:

Market wrap: Stocks fluctuated irregularly through the day, but leading shares were resilient considering weakness in bonds and grains and rise in call money. Bond market unusually active, strong early but weakens after rise in call money rate; govts. steady to firm; corp. mixed, with highest-grade issues rising but many new lows in weak issues. Commodities mixed; cotton up, but grains very weak.

Bethlehem Steel dropped after merger ruling. Investment trusts were weak. Technicolor stock has declined from 86 1/2 to below 6; “colored moving pictures have, thus far, been by no means as popular as had been predicted”; prospects not considered bright unless process is improved.

[There was about another 74% of downside from here.] Broad Street Gossip: Break in the market since Sept. 10 has been one of worst in history of the NYSE, with Dow declining 84.93 to 160.16. Repeated bottom calls have been made, only to have stocks go lower. No favoritism has been shown; good stocks have declined along with bad. Many time-honored market rules have failed to hold, particularly the one about “not selling a dull market”; hundreds of new lows have been made on low-volume days of 1.5M-2M shares.

Bond men optimistic on bond market recovery based on NY Fed rate cut, thoroughly liquidation.

Grains extraordinarily weak. In the Liverpool market, where records go back to 1594, wheat hit a low of 4 shillings (about 58 3/4 cents)/bushel; aside from a panic in 1894, this was the lowest price since 1654. Corn broke to the lowest price since July 1923, despite the smallest crop since 1901.

A number of important traders have stepped out of the market until the new year, including operators who have been bearish the past 6 months.

With dull markets expected until the new year Street speculation has turned to what might be in store then. Here signs are more hopeful; although no immediate business upturn is seen, signs were seen that “the great and deflationary movement in stock prices was nearing its conclusion.” These signs included enormous reduction in brokers' loans, easy money, high yields on many leading stocks, and the prevailing extreme pessimism among traders usually seen at bottoms. While well-informed circles aren't calling an absolute bottom, opinion is growing that sound stocks are at very attractive levels for investment buyers.

Sir Josiah Stamp sees recovery in US before Europe; recovery unlikely to start before April, will start weakly and not gain momentum until 1932. Sees some 18 valid causes for the depression; immediate cause was overspeculation on NYSE, next was overproduction of raw materials, but an underlying problem has been the limited quantity of gold compared to production volumes. Calls for continued easy money, govt. economy and balanced budgets, assault on gold problem, and avoiding new Stock Exchange boom [Interesting that this was still a concern].

Harvard Economic Society says based on historical pattern, commodity prices are unlikely to improve until after general business upturn.

J. Scoville, Chrysler statistician, sees recovery to normal auto production by about Sept., 1931. S. Ker, Sharon Steel pres., sees steel plants much better employed by mid-first quarter, gradual uptrend in general business in 1931.

Royal Bank of Canada reports relatively favorable conditions in Canada against background of worldwide depression; employment holding up fairly well, new industries coming in large numbers, agricultural diversification progressing.

Economic news and individual company reports:

Judge D. Jenkins issues unexpected decision on one of the most bitter and costly trials in industrial history; blocks the Bethlehem Steel - Youngstown Sheet & Tube merger opposed by Cyrus Eaton. Case took 6 months of continuous examination, involving “vast mass of evidence” and arguments on “many complex and often novel questions of fact and law.” [I wonder if lawyers also billed by the hour back then.] Merger would have created steel giant second only to US Steel.

Dominick & Dominick predict over $18.5B of life insurance sales in 1930, down 4% from the 1929 record and up over $1B from the 5-year average. “Life insurance policies ... constitute the largest reserve fund of savings, both total and per capita, of any country in the world”; used both for emergencies and ultimate family security. Total life insurance in force at end of year will be over $108.5B; payments made in 1930 will be $2.2B.

Call money advanced to 4%, due to withdrawals by out-of-town banks. However, this was seen as a typical year-end flurry, with easing expected quickly.

US new car registrations in Nov. were 93,066, down 38% from Oct. and 49.3% from Nov. 1929; first 11 months were 2.530M, down 32.4%.

Steel production in 1930 estimated at 29.6M tons, down 26.6% from 1929. Industry that used the most steel was building construction at 19%; second was automotive, 15.5%; third was rails, 15%. Automotive industry was largest user in 1928 and 1929.

In first 9 months, Europe received 46.3% of US exports, a new high, vs. 42.7% in 1929 and 44.7% in 1928.

Crop value that held up the best in 1930 was oats, down 15% to $454.0M; value of 62 other crops was $6.275B, down 28.4%.

NY Fed. reports metropolitan area department store sales in first 24 days of Dec. were about 4.5% below 1929; volume comparison is more favorable due to price declines.

Statement of closed Chelsea Bank said to indicate equity sufficient to cover depositors and leave $36/share for stock. Aldine Trust of Phila. ($9.3M deposits) closes after heavy withdrawals; offers $10,000 reward for conviction of those responsible for false rumors.

Joke:

“Mother - Is it true that you put an advertisement in the paper to obtain a husband? Daughter - Yes. Mother - I don't know what your father would say to such scandalous goings-on. Did you get any answer? Daughter - Only one - from father.”

Monday, December 29, 1930: Dow 160.30 -0.88 (0.5%)

Assorted historical stuff:

Rumors are afoot of conservative Republicans “carrying direct and open warfare into the insurgent camp” with the most drastic idea to have Pres. Hoover list certain Senators publicly as Administration enemies and oppose their reelection. While opponents of this move say it would split the party and defeat it in 1932, proponents reply the party must clean house regardless of consequences, and that prospects for 1932 aren't that bright anyway. Past Republican policy has been to allow relatively broad diversity of opinions, but some leaders believe it's led to a situation where many just use the Republican label to get elected, only to later “knife” the party organization on all questions.

[Strangely unfamiliar.] Rep. Garner's (House Dem. leader) proposal to pay soldiers the present value of their bonus certificate in cash seems unlikely to pass since it would force the govt., already facing a deficit, to borrow a further large sum.

[Communists: Red or herring?]
Officials who are usually skeptical of “general communistic alarms” believe there may be something to reports of Communists spreading rumors about bank stability. “On one occasion, according to reliable reports here, the occupants of entire buildings were called up from a telephone pay station to which the calls could not be traced [???] and given mysterious warnings about the safety of a certain bank.” On another, rumors were sent by telegram signed “Wall Street.”
Editorial dismissing Communist activities as a cause of the Bank of US failure; “it would be unfortunate if any sort of red herring were drawn across this particular trail”; those failures, like others this year were caused by “uneasiness of depositors concerning specific institutions”; public confidence must be based on bank management, “upon management and nowhere else must lie the responsibility for success or failure.”

Chamber of Commerce adopts electric power policy favoring private enterprise and regulation by states.

Bank of U.S. depositors petition NY State Att'y Gen. elect Bennett for full investigation; Bennett says will look into affairs of the bank immediately after taking office Jan. 1 to see if fraud took place.

Agriculture Sec. ends requirement to label foods containing corn sugar; this is expected to increase usage. First versions of corn sugar were “crude, dark sugar” less sweet than cane sugar, but improved refinement methods have lead to “clear, white granulated product.”

G. Beesmyer confesses to embezzling almost $8M from Guaranty Building & Loan of Los Angeles; sentenced to 10 to 100 years in San Quentin.

Govt. of Chile orders newspapers to cut crime coverage or be prosecuted themselves; attributes crime increase to “playing up” of crime in newspapers.

US telephone service to Finland established using intricate linkup of radio, submarine cables, and land wires over 9,000 mile span.

Apellate Court rules life insurance policy exemptions for death in “aeronautical expedition” don't apply to death in ordinary airplane flight.

US consumption of Christmas tree trimmings was over 800 tons, in addition to about 50M colored lights.

[The Waldorf would have taken three.] Donald Hefling, “hostler,” and Lela Gaskill, waitress, of Council Bluffs, Iowa decide to pay for their wedding by saving every nickel that comes into their possession; it takes them two years.

Market commentary:

Market wrap: Pressure on stocks continued in Saturday's short session; volume increased on declines and several popular issues hit new lows. Commodities narrowly mixed. Bond trading quiet, prices irregular on year-end selling; US govts. steady; foreign irregular; corp. mixed, mostly lower.

Week in review: Following vigorous recovery previous week, stocks lapsed into holiday dullness, ending mostly lower. Reduction of NY Fed discount rate to record low 2% from 2.5% considered most important development of the week. Bond prices higher on quiet trading. Steel operations lower on expected holiday shutdowns; improvement expected in new year. Gasoline inventories up sharply. Grains plunge. Cotton narrowly above year's lows. Rail traffic decline worsened; some optimism on consolidation.

Traction shares were strong on Untermeyer plan for unification of NY mass transit, though the plan requires some new laws and company concessions. Weak spots included department stores, communications, and steel shares. Corn Products strong following corn sugar ruling. Goldman Sachs Trading and Technicolor hit new lows.

[Strangely reversed.] An aggravating feature of the recent market has been substantial declines on low volume; for example, US Steel dropped 2 points Friday on sales of 30,100 shares. Bears say this indicates market is getting little support from the “large interests,” since a few thousand shares buying would have supported the stock.

Broad Street Gossip: The Fed. Reserve is making it easier for merchants and manufacturers to do business; “now all that is needed is an increase in business to enable [them] ... to take advantage of the Federal Reserve's bargain rates in money.”

[A very important skill, indeed .... ] Broad Street Gossip: “I believe the market is going much higher in 1931,” remarked a trader. “Now, all I have to do is try to reach that state of mind that will give me the courage of my convictions.”

Growing feeling that year-end department store business was weaker than expected.

H.L. Doherty & Co. says oil conservation efforts must be made more effective, “crystallize into concerted action.” However, E. Reeser, Amer. Petroleum Inst. pres., sees 1930 as year of “victory for constructive forces that have held to a common sense policy of proration of crude and curtailment of refined products”; crude oil inventories have decreased and the govt. has gotten behind proration.

Rise in call money rate to 2.5% believed temporary, due to preparations for year-end dividend and interest payments.

Few bull pools are now operating due to discouraging market action in past few months; some pools were organized in late summer but later forced to disband.

Stocks of 16 leading steel cos. are now selling at avg. of 5.7 times earnings for past three years.

Nat'l Industrial Conf. Board says business at lowest ebb, turning point may come early in 1931; recovery likely slow; “many competent authorities say that we cannot hope that 1931 business will exceed 1930 business by any large margin.”

Guaranty Trust of NY sees signs of promise in business situation, but no definite indication of early recovery. Commodities continue gradual decline; stocks and bonds have moved down; retail trade is up seasonally but industrial activity and employment has declined further. Process of financial liquidation has involved numerous bank failures, though as a group US banks are in a strong and liquid position. Business opinion generally sees recovery starting in first half of 1931, but slow and irregular at first; second half 1931 should show more progress and 1932 should witness substantial recovery.

Economic news and individual company reports:

Class 1 rails 1930 net operating income estimated at $898M, a 3.4% return on property investment, vs. $1.275B or 4.95% in 1929; revenues estimated at $5.365B, down 15.5%. Passenger traffic about 27B passenger miles, lowest in last 20 years and 42% below 1920 record high. Freight car loadings about 45.9M cars, down 13% from 1929 and 11% from 1928. Capital expenditures about $875M, up $21M from 1929 and $198M from 1928.

US Nov. motor vehicle output was 129,437 vs. 150,044 in Oct. and 217,573 in Nov. 1929.

Youngstown District steel operations up sharply from Christmas holiday week; at 37% this week vs. 23% last week and 40% two weeks ago. Signs of further improvement seen, though a sharp advance isn't predicted; a gain to 60%-65% by April would satisfy most executives.

1930 trends in investment trust companies: Fixed trusts (similar to ETF's) gain in popularity, larger organizations starting to sponsor them. Managed trusts (similar to mutual funds) out of favor; great majority are sitting on big losses in their holdings; very few were in position to do substantial buying at the year's lows; a number of consolidations took place, as well as a few bankruptcies; State Attorney's investment trust inquiry in the spring was generally reassuring.

British govt. is anxious to follow the US in cutting the Bank of England rate so that it can convert its huge 2B pound 5% War Loan to a lower rate of interest. This will be difficult now that British gold holdings have fallen below “Cunliffe minimum” of 150M pounds.

Companies reporting decent earnings: United Light & Power, Rath Packing.

Gillette's recent low was 18; if it maintains its $1 quarterly dividend, it would yield 22%.

A rare heartwarming stock market story:

A prosperous midtown clothing seller, having seen “Wall Street” in the headlines several times in the past year or two, decided to try his hand at trading. He deposited $25,000 at a broker, then told the customer's man “Sell me some of that, and that, and twice as much of that,” pointing to a list of blue chip favorites. The market then went down, down, and down some more. Finally, the crestfallen clothier returned to the broker to take his losses and quit the Street forever. To his surprise, the broker gently broke the news that he had a $55,000 profit - it turned out the customer's man had understood “sell me some of that” as an instruction to sell short.

Year in review (1) Dec. 28, 1930

No Journal was published Sunday, Dec. 28, 1930. Starting on some year-in-review type stuff:

Market highs and lows:

Dow industrial average high of 294.07 Apr. 17; low 157.51 Dec. 16. Rail average high of 157.94 Mar. 29; low 91.65 Dec. 16. Utility average high of 108.62 Apr. 12; low 55.14 Dec. 16.

Market value of NYSE-listed stocks high of $76.1B Apr. 1; low $53.3B Nov. 30.

Dow bond average high of 97.70 Oct. 1; low 92.83 Dec. 17.

Production highs and lows:

Daily oil production high of 2.722M barrels Feb. 22; low 2.127M barrels Dec. 27, lowest since July 1926.

Steel production in March was yearly high of 4.300M tons; low 2.234M Nov. 30.

Rail freight loadings high of 989,504 cars Aug. 30; low 702,085 Nov. 29 (vs. 1929 high 1,203,139, low 798,682).

Commodity prices:

Dow average of 8 iron and steel products high of $49.88/ton Jan. 2; low of $44.29 Dec. 26.

Copper started year at 18 cents; low of 9.5 cents Oct. 24, lowest this century.

Cotton high price of 17.45 cents Jan. 2; low of 9.53 cents Dec. 16, lowest since Aug. 1915. July wheat sold at 62 3/4 cents Dec. 26, lowest since July 1896. Dec. corn sold at 61 7/8 cents Dec. 23, lowest since July 1923.

Farm price index declines to 103% on Nov. 15, lowest since Dec. 1915.

Assorted events:

Banking pool organized in Oct. 1929 to support stocks liquidated Feb. 24.

W. Green, AFL pres., estimated number of unemployed in first quarter at 3.7M; Nov. estimate 5.3M.

Bank of International Settlements opens May 12.

Hawley-Smoot tariff signed into law June 17.

Treasury surplus at end of fiscal year June 30 was $184M, public debt down $746M to $16.185B.

Major failures: J.A. Sisto, NYSE firm, Sept. 30; Prince & Whitely, NYSE firm, Oct. 9; Caldwell & Co., Southern investment house, Nov. 14; Bank of U.S. Dec. 11.

Saturday, December 27, 1930: Dow 161.18 -4.02 (2.4%)

Assorted historical stuff:

Editorial: No Christmas message was more important than the Pope's regarding peace on Earth. We can assume the horrors of the World War are known to world leaders, and that they realize “that in the future, wars will not be quarrels between princes but death struggles of peoples, from which neither side can expect anything but loss.” Yet, people still talk of “the next war.” Exaggerating the differences between nations and thinking in terms of war can make it more likely; also dangerous is the nationalism that interferes with peaceful settlement of international disputes. The US could also increase its efforts toward peace by joining the World Court.

Washington report: Despite good intentions by leaders of both parties, current short session has been most “active and acrid” in years. Skirmish within Republican party is in the spotlight; insurgents threaten to start third party but not taken seriously. A “somewhat mysterious” Ray Benjamin of Calif. is now active as advisor to Pres. Hoover, leading to apparent change in strategy; speculation is active on his future role. Agitation continues for extra session of Congress.

Some are predicting a tax hike will be needed in a year due to a projected deficit next June 30, and doubtful prospects for next year. However, “the truth is that no one in the world can arrive at any accurate forecast of government fiscal probabilities much beyond the next six months. Even in that limited period the forecast may go entirely awry.” [Surprisingly realistic!]

Another editorial by T. Woodlock against “social” (govt.) control of business: While in theory it's possible for democratic selection to pick those most competent to lead, in practice it's very unlikely to do so without a strongly compelling motive (usually fear).

Banker's Trust of Phila. pres. S. Barker says depositors will be fully repaid, progress made toward reorganization but premature announcement might jeopardize plan. H. Shapiro, att'y for depositors, says bank appears sound, closing was due to false rumors. NY State Banking Dept. officials say they have traced a run on an unnamed bank last Saturday to Communistic sources; D.A. Crain is investigating. People's Bank & Trust of Miss. ($1.8M deposits) and 7 affiliated institutions closed; heavy withdrawals blamed. NY Clearing House cuts rates members can pay on short-term savings by 1/2%, to 1%.

Of 1,750 women at Kansas Univ., only 7 aspire to be homemakers. 879 want to be teachers, 84 journalists, 80 nurses, 60 business women, 16 doctors, and 15 lawyers.

Todd Shipyards gets $582,500 contract for 130-foot flame-proof fireboat for NY City able to throw 16,000 gallons/minute.

Increasing numbers of Christmas greetings are being sent by telegram or wireless message instead of old fashioned greeting card (about 3M this year).

Title of busiest man in US probably belongs to Alfred J. County. The Directory of Directors lists him as director of 134 corporations, and he is president or vice president of most; the corporations include rails, ferries, coal and iron mines, banks and trusts, real estate, insurance, stock yards, etc.

Market commentary:

Market wrap: Stock trading very light; most traders on sidelines or out of town until next week; prices higher before noon but “gently sagged” in the afternoon, with a number of new lows. Bond trading very dull, prices turned weaker after early strength; US govts. down slightly; foreign irregular; corp. mixed. Commodities weak; grains plunge, with July wheat (unsupported by Farm Board) hitting 62 3/4 cents, lowest since 1896.

Copper shares continued to be relatively strong on curtailment optimism; banks and trusts were particularly weak.

Stock weakness in afternoon attributed to break in wheat and belated tax loss selling.

No major news came over Christmas; market sentiment remains generally optimistic.

Historical market students point out market has gained in the final week of the year (Dec. 24-31) in every year but three since 1896.

Brokers report some increase in investment buying of standard dividend-paying stocks, and in buying by “inside interests.”

Gold exports seen likely following NY Fed rate cut if foreign central banks don't cut their rates.

Market observers don't see big move until “some sudden development encourages trader's operations on either side”; advise buyers to wait for new year.

Broad Street Gossip: Last year when new highs were being reached, optimists believed in a “new order of things” where stocks selling 15-20 times earnings were cheap; now, one hears stocks at 10 times earnings are expensive. Conditions will readjust without artificial aid; “If they don't, it will be the first time ... since the Stock Exchange opened for business.”

Broad Street Gossip: The head of a large broker reports he's talked to “scores of bankers, brokers, traders, and manufacturers over the last week or two ... and have concluded that 99% of the people are confident that 1931 will be a much better year from a business and stock market viewpoint than 1930.”

W. Teagle, Standard Oil NJ pres., says groundwork being laid for recovery from depression; “An enormous amount of liquidation has already been effected. The financial situation is daily becoming sounder.” Businesses are increasing efficiency and innovating; adjustment to lower prices is progressing and more buying will soon be needed. There's never been such a “determined and united” effort to combat unemployment. History of our commerce isn't one of steady growth but of alternating “eras of great strides forward” and recessions. “The present painful experience is one of those relapses from which we will undoubtedly emerge with greater strength and more prosperity than ever.”

Editorial: Before its latest rate cut (from 2.5% to 2%), the NY Fed had cut its rate 6 times since Oct. 1929. Each cut was hailed as a hopeful market factor, but they've had little effect so far. However, there are reasons to believe this latest cut may be “the turning point of the whole economic situation.” The psychological effect is likely to be far reaching; for one thing, it “affords assurance that the whole credit and banking structure in this country is sound.” It also indicates the Fed is likely to maintain very easy money in the coming months. “Unless all signs fail, the stage has now been reached ... when large supplies of available cheap credit must produce the traditional effect of stimulating new enterprise and ... expansion ... there is every reason to feel that a turning point cannot be far away.”

Economic news and individual company reports:

Bradstreet's weekly review reports retail trade continues in fair volume, about equal to 1929 in unit volume but 10%-30% less in price in various markets. Dun's reports no outstanding change in commercial trends; unsatisfactory conditions continue, but some encouraging portents seen.

[Surprisingly low.] Credit losses by 523 retail establishments in first half averaged 2.5% of total credit allowed; total sales in the period were $560.7M, up 6.7% from 1929.

Fed. Reserve reports money in circulation Dec. 24 up $177M to $5.014B, total Reserve Bank credit outstanding up $128M to $1.425B. Member banks in NY City report brokers' loans down $89M to $1.919B vs. $3.328B in 1929; loans on securities to non-brokers up $40M to $2.104B. Call money rose 1/2% to 2 1/2% due to “year-end requirements.”

Fed. Reserve report for Nov. shows further decreases in industrial production, factory employment, and wholesale prices, and less than seasonal rise in department store sales of commodities. US stock of gold up about $30M in 4 weeks ended Dec. 17.

Dow average of 8 iron and steel products declined to $44.29/ton, a new 1930 low. Scrap markets continue inactive.

Farm Board chair. Legge says favors temporary embargo on wheat imports if world price falls low enough to favor imports in spite of 42 cent/bushel tariff.

Sharp cut in Nov. cigarette production said due to overproduction earlier in year anticipating continued increase in consumption.

German business situation described as worst in 50 years; industrial production at 53.4% of capacity in Oct. vs. 60.3% in May and 71.2% in Oct. 1929; no early improvement seen. Leading French stocks declined in past week to lowest levels of year, and well below 1929 lows. Yugoslav govt. seeks $60M stabilization loan. Although the War roughly tripled its territory and population (to 14M), the absorption of parts of Austria-Hungary, Montenegro, and Bulgaria with weaker currencies caused drastic depreciation in value of the Yugoslav dinar from a gold franc to 4 gold centimes postwar.

Cuba cuts govt, budget by $12M to avoid bankruptcy; current budget is $69M for year from July 1, 1930 to June 30, 1931.

Company reports since Oct. 1: 274 companies reported higher earnings vs. 1929 and 477 lower; 996 dividends unchanged, 97 increased, 183 cut.

Companies reporting decent earnings: Hudson & Manhattan Rwy. (commuter rail), Hamilton Woolen, Meteor Motor Car.

Western Union and IT&T earnings have suffered due to depression, with each barely earning enough to cover dividends.

Montgomery Ward mgmt. said not planning to open new stores in 1931; will focus on making existing stores more profitable.

Barnsdall (oil, pipeline) stock 10 5/8; annual dividend $2, net for first 9 months $2.08/share vs. $2.53 in 1929.

Sayings from Philip Armour, founder of the meat packing co.:

[These are pretty good!]

“When the tongue lies, the eyes tell the truth.”

“In all your dealings, remember that today is your opportunity; tomorrow some other fellow's.”

“When you are through sizing up the other fellow, it's a good thing to step back and see how you yourself look. Then add 50% to your estimate of your neighbor for virtues you can't see, and deduct 50% from yourself for faults that you've missed - and you'll have a pretty accurate result.”

“You must learn not to overwork a dollar any more than you would a horse.Three percent is a small load for it to draw; six a safe one; when it pulls in 10, you've got to watch to see that it does not buck; when it makes 20 you own a blamed good critter or a mighty foolish one, and you want to make sure which; but if it draws 100, it's playing the races or something just as hard on horses or dollars.”

“In the packing business it takes a bull only thirty seconds to lose his hide; and if you'll believe me when I tell you that they can skin a bear just as quick ... you won't have a Board of Trade Indian using your pelt for a rug during the long winter months.”