September 10, 2010

Thursday, September 10, 1931: Dow 128.43 -0.76 (0.6%)

Note: I only have time for a short version today, and probably for a few weeks to come, due to heavy workload

Assorted historical stuff:

Washington report: Administration officials seem less hopeful than they were three months ago that a tax increase can be avoided at the next session of Congress. Officials still say no decision will be reached for 2 or 3 months. While “no one ... wants to increase taxes before an election,” and “everyone recognizes that increased taxes ... may hamper a revival of business,” the Administration apparently considers it more important to maintain US credit, which may become of vital importance in a crisis [note: as was exemplified by Germany and Britain within the previous few months].

Editorial noting reports from Russia that grain farmers “must now go on short rations because their crop is unfortunately below original Five-Year Plan specifications. ... The Soviet govt. might consider whether it is not killing the goose that lays its golden eggs.”

Market commentary:

NYSE trading featured declines in a large number of leading shares; US Steel fell below 80 for the first time since 1921; some rallying took place from the lows, but it was “rather feeble.” Paris stock exchanges down sharply, continuing break that started last week; unfavorable factors include panicky conditions in other European markets including Zurich, Prague and Amsterdam, as well as British uncertainty and sharp breaks in int'l issues including Royal Dutch and Kreuger & Toll.

Public liquidation has apparently been increasing in the past few sessions, judging by increased business through commission brokers. Selling attributed to stop-loss orders and “frightened liquidation” even by customers who own their stocks outright.

Observers increasingly expect a strong effort to set up a test of the 121.70 June 2 bear market low on the industrials, since the recent decline has left “no clearly defined resistance level above the June 2 figure.

Twenty utility stocks listed on the NYSE and Curb Exchange [later Amex] are selling for an average of 15 times earnings [note: I believe this was higher than many stocks in the general list due to stability of earnings.]

E.F. Hutton notes that while some are bemoaning the drastic stock decline, a more optimistic way to look at it is that the stock-buying value of a dollar in Sept. 1929 has increased to about $2.85 in current purchasing power.

G. Gibbs, IT&T VP, predicts “slow but sure upward trend” in business after personal survey of conditions in 32 cities; says Pittsburgh and Detroit only cities outside NY where optimism hasn't started to reassert itself. Businessmen in other cities, while allowing business is running a little behind last year, believe conditions are sound, and cities are able to take care of depression victims without outside assistance.

Economic news and individual company reports:

After difficult negotiations, all creditor committees accept plan for 6-month extension of short-term credits to Germany.

Two large Geneva banks merged, reportedly after Federal intervention, after continued withdrawals from all Geneva banks “despite the official manifesto of national financial stability in Switzerland and the offer of a Federal loan to the Canton of Geneva.”

30% dividend is being mailed to Bank of US depositors; second dividend expected by early next year; final settlement estimated at 60%-70%.

Organization of a general bondholders' committee to represent “holders of defaulted bonds of numerous smaller Florida municipalities” is being considered.

NY Lt. Gov. Lehmann, testifying at unemployment relief hearing, says NY faces $10M-$50M deficit, will be unable to balance budget without tax increases.

Texas legislature meets in special session to consider cotton acreage curtailment law. Gov Sterling says leaves it to legislature to decide on best remedy. Pres. Hoover and Fed. Reserve officials reportedly discuss creating banking credits for export of cotton.

NY Central cut annual dividend rate to $4, the second cut this year.

Steel production for week ended Monday was 28 1/2% vs. 31% previous week, a little under 32% two weeks ago, 56% in 1930, and 86% in 1929. Production slightly affected by Labor Day holiday.

Companies reporting decent earnings: MacMarr Stores.


This Modern Age - Film starring Joan Crawford, at the Capitol. “Directed with a great deal of resource, ... but the story ... is as hoary with age as most scenarios about excessively modern youth seem to be these days.” Heroine experiences emotional crisis when she learns the magnificent Paris home in which she has been living with her mother, and “entertaining lavishly and drinking copiously with her gay young friends” doesn't belong to her mother but to a “Frenchman who is supporting her.” Happy ending ensues after some complications. “Miss Crawford's posing ... is becoming a bit too obvious ... but when she launches upon one of her big emotional scenes she can really act.”


"What a lovely sunset. The sun sinks lower and lower.” “That's all right. I have no shares in it.”

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