The Irregular Blather Feb. 13, 1931

No Journal was published Friday, Feb. 13, 1931, following Lincoln's Birthday. Today, a short blather about stimulus.

On the subject of stimulus, I'm an agnostic. While I think the long-range benefits are doubtful in most cases, I do think the record is pretty clear that stimulus measures can succeed at least in juicing the numbers temporarily; see FDR's measures from 1933 on, Japan's history since 1990, China's measures in the past year, or even the modest $168B US stimulus package in early 2008, which was followed by positive GDP growth in Q2 2008 even though the Great Recession was gathering steam at the time.

So to me, the puzzling question in looking at the US economy now is the rather lukewarm response to a dose of stimulus that I think can only be compared in size to the stimulus program applied by Tony Montana at the end of Scarface (specifically, the part where he sticks his face directly into the mini-Matterhorn of cocaine on his desk). By rights, the US economy should now be on a bender worthy of Keith Richards in his prime; instead, it's been more like my grandmother sipping an extra glass of sherry before bedtime. Why is this? Let me propose an answer based on my Taxonomy of Stimuli. I'll divide stimuli into three categories:

A) The few, the proud, unquestionably worthwhile stimuli. This category includes stimuli that are truly good investments, in that they provide long-term economic returns. Of course, almost all US stimulus plans claim to be in this category, usually by including the word “investment” somewhere in the name of the plan, and in fact it isn't that hard to think of stimulus programs that would have decent long term returns. However, in practice it seems the odds are close to zero of getting something in this category through the sausage factory that is the US lawmaking process.

B) Your garden variety stimulus. This includes programs like handing out money to people to spend, or directly building stuff, or directing banks to loan money to businesses to build stuff - it covers most of the stimulus programs that have been enacted in the past. As I said above, I think these programs may be of doubtful long term value, but do tend to juice the near-term numbers pretty well.

C) Your Double Reverse Stimulus. These are the stimulus programs where much of the result is to actually dampen future demand. Or, in other words, this amounts to treating a narcolepsy patient with sleeping pills.

Perhaps the dampened response to stimulus in the US is a result of too many programs in category C. For example, recapitalizing banks without any restriction on risk taking ... so that traders at banks and hedge funds can again run up the price of commodities ... so that banks can clear a few billion in “profits” and “pay back” the government ... so that John Q. Public can send an extra few hundred billion abroad to pay for those commodities back in the real world. Or, giving John Q. Public a chunk of cash as incentive to buy things in favored areas like houses and cars ... which requires borrowing a much larger chunk of cash to complete the purchase ... which then reduces John Q. Public's ability to buy anything for the extended period it takes to pay that debt pack.

I hope I'm wrong about this, but lately I've been getting the feeling people will be shaking their heads about some of this stuff a hundred years from now ...

Thursday, February 12, 1931: Dow 181.88 +0.68 (0.4%)

Assorted historical stuff:

Court of Appeals opinion written by Justice Cardozo upholds constitutionality of law on responsibility of bank directors: "The power of legislature to make it a crime for banking officers to be so neglectful of their duties as to involve their banks in ruin is hardly to be doubted."

House Ways and Means Committee kills proposals for full veterans' bonus; however, committee is now considering several partial plans.

Washington report: Sen. Pittman's subcommittee on China trade recommends program for rehabilitation of silver, including international pool to advance silver to China for specific projects. Also notes problems of gold standard govts. in obtaining gold to meet budgets and pay debts. Action on silver stabilization considered unlikely at this session. Article by H. Woodhead in Shanghai Evening Post calls proposal for international silver loan to China “the crudest form of quackery.” Several Farm Board members including chairman Legge likely to quit; new members may be hard to find as Board faces “almost insuperable task.”

Martin J. Insull, Middle West Utilities pres., speaks on Halsey Stewart radio hour; says much harm is being done by agitation against the "sinister, threatening trinity of words - the Power Trust." Calls implication of illegal trust absolutely false; blames most of alarm and agitation on politicians, college professors and newspapers. Cites progress of industry in now providing best electric service at lowest rates in history. Editorial by T. Woodlock: This column has previously cited the Potomac Power Co. in Washington, DC as an example of successful utility regulation. The utility was allowed an agreed rate of return, and earnings above that rate of return were split between utility and consumers. Following this agreement, the basic residential rate that started at 10 cents/KWhr in 1924 has been reduced every year and will be 4.2 cents in 1931. Unfortunately, the District commission has now decided the utility is making too much profit and asking for modification of the agreement. This is a case of cutting off your nose to spite your face; the real objective seems not to get cheap and efficient service, but to eliminate private profit at all costs, probably winding up with public operation.

Agriculture Dept. says Russia could reasonably have a wheat crop this year equal to 1930 crop of 1.157B bushels, but notes Russia does have history of occasional bad crop failures.

Australian PM Scullin formally asks British govt. for reduction in interest rate on loans made to Australia during the war.

Austrian Agriculture Min.Thaler rumored to intend resigning and emigrating to Paraguay with 20 Tyrolean farmers due to despair over Austria's economic future.

NY State death rate in 1930 was 11.7 per 1,000 population, equalling record low of 1927; birth rate was 17.1, also a record low and down 30% from 1914.

Illinois House passes O'Grady bill repealing state Prohibition and search and seizure laws, carrying out terms of referendum in Nov. election.

Car values have improved dramatically since 1924; price per pound is down about 35%, while when added values like comfort and reliability are considered, the 1931 dollar probably buys twice as much car as in 1924.

North Amer. Aviation says testing an airplane that can be flown with a few hours instruction; claim ship can be landed by novice pilot with hands off controls.

Rep. LaGuardia (R, NY) asks Congress to appropriate $2.5M so US can compete with Britain and Italy in Schneider Cup (series of seaplane races).

Pan American fare cuts of 8%-42% across system seen as major change in policy to increase passenger business, which until now has been secondary to mail.

Market commentary:

Market wrap: Stock rally continued vigorously most of session, with trading heavy; major industrials rallied, trading favorites rose sharply, and strength spread to the utilities. However, increasing profit-taking came in the afternoon; good-size setbacks took place from the highs, but enough support came in to limit the reaction. Bond trading slower; US govts. firm but sold off mildly late; foreign irregular; corp. mostly steady. Commodities mixed; grains sell off sharply as reports of Russian revolution prove false; cotton up substantially. Copper rises another 1/4 cent to 10 cents. Silver again advances 3/4 cent to 27 5/8 cents.

Late market weakness attributed to statement by Under-Treasury Sec. Mills on possible bad news regarding veterans' bonus in next 48 hours. Grain weakness also called unsettling. Oil news discouraging, including larger than expected rise in gasoline stocks and prospect of large new Texas fields. Rail freight drop of 19.9% vs. prev. year also unfavorable.

Silver market tone improves as movement seen likely to restrict amounts offered by major sellers, including Indian govt. Jan. copper statistics considered more favorable, showing a drop in total stocks of 11,000 tons to a still large 574,000 tons.

Wall Street sentiment is more cheerful. Shorts were punished by the bulls again in some issues. Good news on particular stocks (Best & Co.) has been reflected immediately in trading. Traders are paying more attention to low-priced issues.

Some brokers are advising against jumping in at current prices, since they feel the rally has been too fast compared to the slight improvement in business; the sharp rally might attract public interest and bring in poor-quality buying.

Editorial: US grain exports have been declining drastically over the past few years; wheat exports declined from 168.3M bushels 1927 to 87.8M bushels in 1930; total value of grain exports declined from $444M in 1927 to $191.3M in 1930. While the world is actually consuming more wheat, we have been exporting less and piling up our surplus. "A little study on this subject might be fruitful of good results."

AT&T will probably reach 600,000 stockholders this year; investment trusts have been heavy buyers in the past few months.

W. Atterbury, Pennsylvania RR pres., says buses and trucks, if properly coordinated with rails, can be operated to the mutual advantage of all.

Broad Street Gossip: Goodbody & Co.: “Inertia induced by mob psychology is causing many people to stand on the sidelines in the hope that they can buy favorite stocks a few points lower. There is no more reason in being rabidly bearish now than there was in being enthusiastically bullish in the summer of 1929. We would not miss the present opportunity of investing a part of one's funds in low-priced common stocks. The old Standard Oil was unscrambled about 20 years ago; following the recent Standard of NY - Vacuum court decision, some on the Street believe certain Standard Oil companies will indulge in a little re-scrambling. Many traders who bought stocks for a “long pull” a week or two ago couldn't resist taking short pull profits on the rally.

Best & Co. say believe recent market strength has stirred speculative enthusiasm, with potential buyers waiting for a reaction to enter the market; believe this “will prevent any immediate important general reaction.”

Editorial: Market action since the low point of Dec. 16 (Dow 157.51) is encouraging; since then, we've seen "close to two months of interrupted but progressive recovery with the top and bottom points of rallies and reactions making an ascending line"; this has happened with good economic news relatively scarce. Recent course of the market undeniably "gives substantial grounds for optimisim concerning the business future." It's true that "similar inferences were erroneously drawn" in early 1930, which turned out to be an exaggerated bear market rally. "Nevertheless, the price movement has taken on exactly the character called for by the assumption that the debris of the 1929 collapse has been cleared away and the required conditions established for the gradual rebuilding of prosperity."

Economic news and individual company reports:

Weekly steel reviews report demand spotty, but in total enough to register another slight gain. Outlook is for slow progress until spring demand starts in March. Machine tool demand still increasing slightly, though picture is mixed in different districts.

Irving Trust, trustee in bankruptcy proceedings, files suit against all directors of Bankus Corp. (Bank of US affiliate) charging over $50M of assets lost through negligence. Complaint details loss of large sums by trading in bank stock and real estate speculation. Bank of US officials surrender and are taken into custody on Grand Jury indictments. S. Rosoff submits plan for Bank of US reorganization. Depositors committee asks liquidation legal work be done by Attorney Gen. office.

Under-Treasury Sec. Mills addresses Bond Club; says govt. bond values would be damaged by veterans' bonus; “you are going to hear a lot more in the next 48 hours, and I am sorry to say it may not be as favorable as you make have been led to suppose by newspaper reports.” With Treasury facing $500M deficit at end of this fiscal year (June 30), and $8M of callable bonds due in next 2 1/2 years, new bond issue would be very costly.

Govt. weekly weather report shows beneficial rains over much of US, but more moisture urgently needed to replenish subsoil.

1930, and 1931 so far, have had unusually warm and dry winters; this has affected many economic sectors including agriculture, businesses selling to farmers, sales of winter clothing and supplies, etc.

Pres. Hoover issues proclamation increasing duty on woven wire fencing composed of wire between 0.03 inches and 0.08 inches in diameter.

Joint efforts by British and French bankers to stop British drain of gold to France considered encouraging; Bank of England has kept open market rate at about 2 1/2% while Bank of France has pressured private bill rates below 2%; French banking funds have been attracted to London. German capital flight has ended and money rates are declining following recent encouraging developments. Spanish currency down sharply after news of general strike throughout Spain.

Boston unemployment is now 11% of working population, up 4% since April.

Smokers continue shift to cigarettes; in 1930, for the first time, a pack of cigarettes was smoked for each cigar. Snuff is only other form of tobacco showing gains.

Coca Cola's 1930 showing went against industry trend; 1930 sales gained 5.1% over 1929, eighth straight increase, while beverage sales as a whole declined about 15%. Good showing was attributed to extensive sales and advertising campaign. Co. now has 13 syrup factories: 7 in US, 4 in Canada, and 2 in Cuba; 800,000 bottle retailers, up 200,000 in 1930; 123,000 fountain retailers, up 18,000.

Los Angeles Evening Express reportedly purchased by W.R. Hearst, who already owns the L.A. Morning Examiner and Evening Herald.

Companies reporting decent earnings: Commonwealth Edison, Southern Calif. Edison, Western United Gas & Elec., Columbus Railway Power & Light, Hygrade Lamp, Lorillard (cigarettes), North Amer. Aviation.

Movie:

Scandal Sheet - Well acted but unrealistic newspaper melodrama. Mark Flint, fearless managing editor of a tabloid, has an ironclad policy of getting and publishing all the news. This is tested when the crucial point in a big story concerns his wife's relations with a prominent banker. However, he remains consistent, and makes a front-page story out of the event by shooting the banker and returning to his office to write the story himself. He then takes a taxi to police headquarters to surrender. A comic epilogue shows Flint as editor of the prison newspaper, threatening to fire the inmate reporters if they fail to bring in the news.

Joke:

“The police refused to let a radical make a speech from the gallery of the House of Representatives. The mistake which the radical gentleman seems to have made was to neglect getting a nomination on the Republican ticket.”

Wednesday, February 11, 1931: Dow 181.20 +3.48 (2.0%)

Assorted historical stuff:

Pres. Hoover's emergency employment committee says encouraging reports on employment have been received from various parts of the country.

R. Whitney, NYSE pres., says short selling didn't cause the 1929 panic; based on survey of NYSE members, short position was very small on Nov. 13, 1929. Believes that larger short position would have stabilized market. Defends short-selling as similar to a builder contracting to build a skyscraper, in effect going short steel, brick, mortar, and all other things that go into the building.

Washington report: Pres. Hoover signs and praises Sen. Wagner's (R, NY) bill for advance planning of public works to relieve unemployment during depression. Battle over oil import restriction is in state of high uncertainty, with four proposals still alive, ranging from total embargo to curtailing imports in same proportion as domestic production; Administration seen most amenable to latter option. Some tax hikes may be needed due to projected $375M deficit this fiscal year. One possibility would be raising income tax rates in higher brackets while cutting the capital gains tax. Prohibition has been discussed surprisingly little this session, possibly because neither party is yet sure of its stand in 1932.

During Dec., 23,053 aliens left the US while 16,378 entered, including 6,439 immigrants and 9,939 non-immigrants; immigrant total of 6,439 was lowest for any month since 1919. US alien population in 2d half 1930 increased 20,245, down sharply from increase of 104,050 in 2d half 1929.

Bolivia financial commission says country will default on Mar. 1 interest payment. Provisional military govt. has instituted policy of retrenchment to be followed strictly by incoming administration; commission has also recommended further govt. savings, but reform is slow process with immediate results not to be expected.

German Foreign Min. Curtius says Germany has no intention of destroying the Young reparations plan, not advisable to fix a date for revision in advance. Believes publication of German archives will disprove charge Germany was guilty of responsibility for the war.

Editorial by T. Woodlock warns of threat to NY City's port trade; Boston, Philadelphia, and Baltimore are demanding lower rail transport rates, upsetting a longstanding agreement on rates from the four North Atlantic ports to territory west of "Buffalo-Pittsburgh line" (current rate structure sets rates from NY and Boston equal, and the other two slightly lower).

Senate passes Johnson bill authorizing bridge across San Francisco Bay. New Jersey Legislature's Meadows Reclamation Committee recommends development of large port city on site of Hackensack Meadows, to support population of 5M. Wall Street subway station is installing silencers to quiet crashing of the turnstiles.

P. Litchfield, Goodyear-Zeppelin pres., tells House committee US is in position to take lead in development of overseas airship service due to helium monopoly; estimated crossing time would be 2 1/2 days. Goodyear is awaiting outcome of McNary-Parker bill providing for govt. mail contracts for airships.

US Navy to award contracts for V-8 and V-9 submarines; ships are to be about 275 feet long and 1,100 tons.

International Silver develops non-tarnishing silver eliminating need for polishing; to be known as “Palladiant.”

Pencil manufacturers worldwide use over 600 tons of pencil wood per month. Wood near factories is nearly exhausted, and the industry has detailed special investigators to look for suitable red cedar trees.

India has suffered more deaths due to hailstorms than any other country. Deadliest hailstorm on record occurred April 30, 1888 about 100 miles East of Delhi; over 250 were killed in the storm, mainly by hail. Berlin was invaded by huge swarms of honeybees last summer, probably due to a severe drought in central Germany. The swarms invaded bakeries, laundries, and hospitals; on one day, firemen were called out 55 times to respond.

"For the first time in aviation, women are being employed regularly as crew members." Boeing System has hired ten young women as stewardesses for the Chicago - San Francisco route. Chosen from 200 applicants, the ten are "all about the same height and weight"; their duties are "to serve lunches, supply reading and writing material, send telegrams ... furnish pillows ... discuss points of interest with passengers, etc."

Society of the Genesee held its 32nd annual dinner at the Hotel Commodore; George Eastman, chair. of Eastman Kodak was guest of honor. Mr. Eastman, 75, received congratulatory notes from Pres. Hoover, Calvin Coolidge, Benito Mussolini, and P.S. du Pont.

Market commentary:

Market wrap: Stock advance picked up further momentum across the list and through most of the session. Short-covering "assumed panicky proportions during the fourth hour ... the whole market fairly seethed with activity" and further gains took place, with trading favorites "surging upward in sensational style." Considerable profit taking came in the last hour, but good support came in to limit declines. Bond market strong, volume showed large increase; US govts. quiet, firm; foreign mixed with German strong but S. American irregular; corp. active and firm, with speculative and convertible issues particularly strong. Commodities strong; grains up sharply on unconfirmed rumors of Russian revolution; cotton also up sharply. Silver rallied 3/4 cent to 26 7/8 cents; copper price was firmer at 9 3/4 cents; further rise was indicated as custom smelters were reluctant to sell at that price.

US Steel strong on increase in unfilled orders; coppers up on price rise; buying came into high-grade rails in mid-session on optimistic statements from executives; some foreign markets were also up substantially, with Berlin closing at the highest levels in many months.

Dow Theory advocates were encouraged by industrials' confirmation of earlier rally in rails; considerable confidence felt that general market had embarked on a sustained advance. Study of previous bear movement since 1900 indicates average rally of 15% within 7 weeks of low.

Short interest is said to be condsiderably reduced, though sizeable short positions still exist in some issues including American Can, US Steel, GM, and Auburn. Brokers report outside (public) interest has increased; spirited outside buying has come into some stocks, and a number of dormant accounts have become active.

Editorial: It now appears the Farm Board's estimate that 236M bushels of wheat would be used as animal feed, helping to clean up the wheat surplus, was too optimistic. Rough calculation shows the wheat carryover to next season may be 250M bushels, much of it in Farm Board hands.

J. Ogsbury, Dayton Scale (IBM subsidiary) pres., favors veteran's bonus: "it is difficult to imagine a more opportune time than the present to provide these men with money"; business should be helped since money would be spent within a reasonable time. [Note: first businessman quoted in favor of the bonus.]

Meat packers said to have good profit outlook for this year based on lower inventories and decline in hog prices.

Broad Street Gossip: Recent rise looks substantial to those who bought at the lows a few weeks ago, but many traders who entered the market after the fall 1929 crash believing the worst was over are still sitting on big losses. Some bankers say more money was lost after the Oct. and Nov. breaks than in the breaks themselves. Reading 1930 earnings statements can be tricky since much of the fall in earnings is a bookkeeping matter due to inventory writedowns. Coca Cola, which recently announced record 1930 earnings, was introduced to Wall Street in 1929; the underwriting bankers, not overly enthusiastic, got rid of the stock as soon as possible at about 30. It's now selling about 160, with twice as much stock outstanding.

T. Macaulay, Sun Life Assurance of Canada pres., says personally believes stock market bottom was passed on Dec. 16. Based on experience of past 18 months, now believes company policy of holding investments permanently might need to be modified; "even for permanent investors ... there may come times of abnormal inflation ... [when] it will be wise to convert excess market values into cash profit. In other words there may be a time to sell as well as a time to buy ..."

Royal Bank of Canada monthly letter notes uptrend in savings deposits in Canada since July, says this is necessary to lay foundation for business recovery.

Middle West Utilities Dec. report on trade and agriculture in territories it serves finds conditions still very spotty.

Amer. Bankers' Assoc. sees definite gains in industrial activity starting to appear; reports better feeling in financial circles based on stock market rally.

Economic news and individual company reports:

Rail freight loadings for week ended Jan. 24 were 719,281 cars, up 3,591 from prev. week, down 19.9% from 1930 week, and down 24.0% from 1929.

NY County grand jury returned indictments against 8 Bank of US officials, including Bernard Marcus, pres., and Saul Singer, executive VP, based on alleged transaction in which Bank of US paid off an $8M dollar debt owed by two important affiliates with bank money.

Following a period of "banking hysteria" in the South at the end of 1930, a number of banks have been reopened; Arkansas has taken the lead, reopening 54 out of 111 banks that closed in the last two months of 1930. R. Dickinson, Asst. State Banking Commissioner, says Arkansas banking situation best in past 10 years.

US Steel unfilled orders end Jan. at 4.132M tons, up 188,755 in Jan., and comparing with 4.469M in 1930 and 4.109M in 1929. Increase was much better than expected, and came in spite of uptrend in operations.

Refineries ran at 59.9% in week ended Feb. 7; stocks of gasoline increased 800,000 barrels to 42.457M; oil production was 2.117M vs. 2.086M prev. week, but down 497,300 from a year ago.

Nat'l Lumber Mfrs. Assoc. reports stagnation in Jan. lumber business compared to Dec., buying restricted due to unstable prices and uncertain public demand.

Final figures from Ford show 1930 US new car registrations of 1.055M vs. 1.310M in 1929; GM 906,164 vs. 1.271M.

Jewel Tea increases regular dividend rate from $3/year to $4 based on earnings and outlook (stock closed up 3 to 53).

Pan American reduces passenger prices on entire system 8%-42%.

Companies reporting decent earnings: McKeesport Tin Plate, Nat'l Dairy Products, Harrods, Blaw-Knox (steel and construction products), Equitable Office Bldg., F. & W. Grand-Silver Stores, Hathaway Bakeries, Lehn & Fink (toothpaste, candy, Lysol), Westmoreland Coal.

At the galleries:

Museum of Modern Art exhibition features Odilon Redon and Henri de Toulouse Lautrec; “By comparison it is Lautrec who suffers. His biting sarcasticisms subject themselves to little consideration beside the softer strokes from the Redon brush,” though his “knowledge and understanding of Parisian life produce brilliant and enjoyable canvases.” The Rehn Galleries has a refreshing exhibit of Provincetown paintings by Ross Moffett, who “has kept himself free of the mannerisms usually associated with painters of this colony.”

Movie:

The Queen's Necklace (Le Collier de la Riene), a French production directed by Gaston Ravel. Cumbersome and drawn-out costume drama, saved from the mediocre only by a thrilling climax featuring the striking actress Marcelle Favrel-Chantal; "It is only as the beautiful courtesan is dragged screaming from her Bastille cell, her precious finery torn from her back by cruelly effective lashes at the public whipping post, that one catches the real color of the Dumas novel and realizes by the furtive presence of Marat and Robespierre in the background ... that the French Revolution is imminent."

Jokes:

"'What kind of a car has Tom?' 'Well, he'd feel tremendously flattered if you called it second hand.'"

"'Oh dear, Johnny, have you been fighting again?' 'No, miss, we moved yesterday, and I moved the cat.'"

Tuesday, February 10, 1931: Dow 177.72 +4.82 (2.8%)

Assorted historical stuff:

Washington report: In spite of compromise on Federal drought relief, possibility of legislative logjam and extra session remains due to other issues including veterans's bonus, Muscle Shoals, and rail consolidation. Tentative bonus compromise, not yet in writing, would involve increasing amount veterans can borrow and lowering rate; total cost might be about $750M. Gov. Albert Ritchie of Maryland seen as potential Democratic Pres. candidate in 1932, appealing to “those who are reacting against interference of the federal government in too many things.” House Appropriations Committee reported bill reducing Navy's appropriation by $32.9M to $344.3M due to London Naval Treaty's reduction of competitive naval building. Senate Republicans vote to hold night sessions starting Feb. 10 for as long as needed. Judge O. Pagan tells Senate committee Eugene Meyer not involved in 1926 Chicago Land Bank indictments, or in any other cases he investigated.

Survey by Dow Jones of industrial and financial leaders throughout the country finds unanimous opposition to veterans' bonus; statements against it flood in from leading businessmen in Philadelphia, Boston, Chicago, Detroit, Cleveland, Cincinnati, Pittsburgh, St. Louis, Los Angeles, and even San Francisco.

Editorial by T. Woodlock: European industries are now cutting wages in order to cut labor costs and increase exports. In the US, by contrast, there seems to be an unprecedented consensus against reducing wages. However, for those still employed, real wages in terms of buying power are now at an all-time high thanks to price declines [Note: doesn't mention widespread reduction in hours worked.] In some cases, factory production costs per unit exceed selling prices; this amounts to a “dole” for workers, and it's a hard question how long this can or should continue.

Cuban Pres. Machado renews suspension of constitutional guarantees for another three months due to "Communist activities."

Spanish govt. lifts censorship on newspapers and telegraphs and calls for general elections; currency down sharply.

British PM MacDonald says govt. not considering any proposal for debt readjustment conference; debt revision has been subject of talk by US bankers and unofficial sources in Paris and London; official circles have refused to comment on principle Britain wouldn't ask for “charity” under any circumstances.

R. Whitney, NYSE pres., calls for upholding of NYSE principles of business conduct and ethics; "the uplifting of these principles is what we shall stand for as long as I have anything to do with the New York Stock Exchange."

Editorial: A recent study by Bond, McEnany tabulated the probable prices for cotton next season based on production ranging from 10M to 15M bales; largest cash return to farmers would be from a 10M bale crop. Farmers are now in the position of the proverbial mule who has been led to water but must decide for himself whether to drink.

T. Henry, Amer. Auto. Assoc. pres., blames current attempts to pyramid taxes on car owners to intense propaganda by railroads; says motor vehicle owners are now paying 180% of actual cost of state highway systems.

Flying has become so safe that major insurance cos. no longer hesitate to write policies; one national co. sells a $5,000 policy for $2, good for 24 hours on Boeing Systems San Francisco - Chicago route.

Pan American to start new air service across entire North coast of South America Feb. 1.

Manufacturers of geographic globes report increasing demand for their products as a decorative feature in modern homes.

[Origins of everyday expressions dept:] An enterprising California man has developed a new use for tin cans - he uses them to pack worms together with water and food, for shipping to customers from his worm farm.

Market commentary:

Market wrap: Stocks opened the week very strongly, with volume highest of the year and the ticker running several minutes behind at times. Large scale buying poured into leaders including GM, US Steel, American Can, GE; trading favorites continued sharp gains, including Auburn, Worthington, J.I. Case. Some profit taking in afternoon was easily absorbed and leaders maintained a strong tone, ending close to the day's highs. Bonds stronger in quiet trading; US and foreign govts. steady to firm; corp. generally higher, speculative and convertibles rally substantially along with stocks. Commodities mixed; grains up sharply in spite of reports of rain in drought areas; cotton almost unchanged; cocoa again touches record low at 5.05 cents, but closed up slightly. Silver remained at record low.

Conservative observers encouraged by break above trading range, favor buying standard stocks on reactions.

Traders cheered by strength in grains, and improved prospects of avoiding extra Congressional session. Ability of industrials to climb above recent resistance strongly suggests near-term trend is up. Entertainment shares were a strong feature of the last hour, with "Warner Bros. appearing on the tape in long strings." Oils were strong on Apellate court approval of large merger between Standard of NY and Vacuum Oil; this was considered as big step in recognizing the changed conditions in the oil industry since the Supreme Court dissolved Standard Oil; decision may still be appealed to Supreme Court.

Considerable attention was drawn by reports that, contrary to earlier rumors of steel price cuts, the next change would be upward. An advance within the next month to six weeks would be considered an important development both for the steel business and the stock market.

Short interest is still substantial, though action of the market has worried some bears, causing them to start covering. Bears have recently been unsuccessful in attempts to force liquidation; if they were themselves forced to cover the market could stage a spectacular rally.

Recent market strength may be partly technical, due to high short interest and decline in security loans. However, strength in the past few days seems too impressive to be just technical. While fundamental news has been mixed, one important factor may be the spread between dividend yields on standard stocks and short-term money rates; this spread is now over 3%. In the past, this situation has often brought a stock rally several months before business improvement.

Examples of gold-standard countries such as US, Britain, France, Germany, vs. non-gold-standard Spain, Argentina, Brazil, Japan, give a “striking illustration of the manner in which a free gold market maintains stability in a country's currency.”

Broad Street Gossip: A scarcity of oil was predicted a few years ago; now the world seems to have too much, with estimates the US supply is enough for several hundred years. Shortages were also predicted for copper, tin, and iron ore; little is heard about these now. "It is a big and resourceful country, and the present generation has little to worry about as far as early exhaustion of natural resources is concerned." The Old Timer: "You can always depend upon it that you will find a larger short interest when stocks are scraping the bottom than when they are hitting new highs."

Dominick & Dominick note world coal production has barely increased since 1913 due to increasing competition from other sources of energy; 1929 coal output was 1.591B tons, up 10% from 1913, while in the same period consumption of fuel oil was up 635%, natural gas 230% and hydroelectric output 300%; these are now equivalent to 170M tons of coal, 90M, and 117M, respectively. Competition between coal producers in different areas has caused depression in some.

A. Dickinson, Indiana Limestone pres., sees end of building slump assured by need for new building; reports residential is showing strength after a long slow period.

E. Weir, Nat'l Steel chair., condemns wage cuts as delaying recovery; believes worst of depression now past; “modern thought ... is that the standard of wages determines the standard of living.”

Motor industry seen poised for sharp gain. In contrast to the 1921 depression, car manufacturers and finance cos. are in strong financial condition. Weak link is dealer, currently short of credit; as a result, showroom inventory is extremely low; this is thought to be slowing retail sales, setting up a sharp rebound later.

Economic news and individual company reports:

State Banking Dept. announces Bank of US depositors won't be paid for at least four months; those in need can use Clearing House offer to borrow up to 50% of their deposits. M. Steuer investigation continues probing bank's loans to affiliates.

Fed. Reserve member banks report for week ended Feb. 4 shows continued increases in investments, both US govt. securities and other, and declines in loans, both commercial and on securities. Since start of year, total loans are down $962M to $15.668M, while investments are up $1.511B to $7.014B.

43 representative rails reported 1930 gross revenues down 14.8% from preceding 4-year average; net operating income was down 24.3%. Smallest drop in net was 6.0% by New England rails; largest drop was Southern rails, 33.8%. Only one rail had increase in gross (Bangor & Aroostook); only 4 had increase in net.

Capper bill under consideration to limit imports of foreign oil may be blocked by agreement made by US and 27 other nations not to embargo imports.

Canadian govt. ordinary revenue in 10 mos. to Jan. 31 was $303.5M vs. $375.5M prev. year; expenditures $309.5M vs. $288.9M; net debt $2.205B vs. $2.160B on Jan. 31, 1930.

Suez Canal income in 1930 was 1.044B francs vs. 1.123B in 1929.

Bolivia notifies committee of NY bankers that interest payment due Mar. 1 must be postponed.

Argentine manufacturers petition govt. to prohibit imports of all Soviet products as measure against current dumping of all kinds of goods. Argentine govt. will attempt to free farmers from control of foreign grain export firms by marketing wheat directly to European millers.

Western Canadian interests ask establishment of central bank due to continued banking consolidation concentrating credit in fewer hands.

NY State Industrial Commissioner Frances Perkins reports decrease of 2.5% in NY factory employment in Jan., lowering index to 75.5 (100 = avg. of 1927-29); decrease was larger than usual seasonal drop.

Goodyear 1930 net was $9.9M after $5M inventory writeoff, vs. $18.6M in 1929; reports 1931 starting slowly but anticipate gradual improvement over year.

Pennsylvania RR balance sheet in good shape in spite of earnings slump; likely to go through 1931 without new financing.

Companies reporting decent earnings: General Amer. Tank Car, US Tobacco, Mathieson Alkali.

Movies:

City Lights - Welcome return to the screen by "Charlie Chaplin, king of motion picture comedians. ... Once again the beloved tramp may be seen expressing the heights of comedy and pathos in matchless pantomime ... The actors' genius is revealed in its most amazing magnitude in a tragic climax of surpassing beauty." While talkies are here to stay, it's doubtful whether the results would have been as good if Mr. Chaplin used dialogue; this might have interfered with the fantastic element of his comedy, which allows the audience an escape from earthly troubles. Film is again proof of the value of one man writing, directing, producing and cutting his own film, though such ability is rare.

Inspiration, starring Greta Garbo - "Belongs definitely to the class of movie scripts hastily thrown together to provide a 'star' with a vehicle until a suitable one can be conceived." The cost of "permitting the glamor of genius which surrounds an actress of Miss Garbo's magnitude to be dissipated, through exhibiting her in a mediocre vehicle ... seems to be relegated to secondary importance in Hollywood."

Joke:

"'If you go first, dear, you will wait for me on the other shore, won't you?' questioned the fond wife wistfully. 'I suppose so,' replied the husband, with a sigh. 'I never went anywhere yet without having to wait for you.'"

A Kansas cattleman who had mortgaged his livestock to the local bank was called in and told the note was due to be paid the next day. "Were you ever in the cattle business?" asked the cattleman. "No," answered the banker. "Well, you are now," said the cattleman, and walked out.

Monday, February 9, 1931: Dow 172.90 +3.02 (1.8%)

Assorted historical stuff:

Editorial by T. Woodlock: In the postmortems now in progress, some are finding fault with the Fed. Reserve bankers. They may be guilty of some errors, particularly increasing supply of credit as the "speculative debauch" was getting under way. However, their record isn't bad considering the extraordinary run of events in the 16 years since the Fed's establishment: financing of the World War, "the great 'deflation' of 1920-21, then the return of 'prosperity,' culminating in the wild speculative orgy of 1929 and the subsequent crash and depression." Some are now suggesting the Fed should direct credit to "useful" areas such as industry as opposed to speculation; this would be impossible in practice, for credit once created "is a natural fluid"; attempts to put conditions on credit would be "an experiment in bureaucracy of the most dangerous kind." Banks should decide on the proper use of credit; functions of the Fed and banks should be carefully separated.

Washington report: Apparent drought relief compromise raises hopes of better inter-party cooperation and avoiding extra session. More talk is heard of a lower-cost compromise on the veterans' bonus, but the situation is still unclear. Sen. Wagner is suggesting states might offer unemployment insurance with Federal aid, but some are concerned that in difficult times like the past few months, Congress would face strong pressure to increase contributions, and Washington would end up carrying the load. Proposed bill to restrict oil imports together with curtailing domestic production would give Federal govt. first direct authority over oil conservation, allowing it to reward states for developing conservation plans and enabling cooperation to adjust total supply of oil to demand. Sen. Glass says he intends proposing changes in both Fed. Reserve and national bank acts when hearings conclude. Subcommittee hearing on nomination of Eugene Meyer to Fed concludes; confirmation expected by Senate.

Editorial praising drought relief compromise, and recommending similar reasonableness on the veterans' bonus issue; allowing veterans to borrow against their bonus certificates on more liberal terms would take care of the needy without the folly of issuing billions in new govt. bonds.

Sec. of State Stimson announces Hoover administration has definitely abandoned Wilsonian policy of promoting republican government in Latin America, and has returned to Jeffersonian theory of recognizing any form of rule a nation may choose for itself. Editorial praising Stinson's statement; discards Roosevelt's version of the Monroe doctrine giving US “international police power” in this hemisphere; new version of the Monroe doctrine “is evolving which the peoples to the south of us are likely to accept and support.”

Izvestia announces Soviet grain collections to Dec. 31 were 21.7M metric tons, 52% over 1929.

French and British foreign offices fail to agree on pipeline transporting Iraqi oil to outlets in Lebanon and Palestine; French demande immediate construction of line, while British oppose it due to present oil overproduction and estimated $1B construction cost.

Work is proceeding on design and construction of a new reflecting telescope that, at 200 inches, will double the diameter of the current world's largest. Construction will cost several million dollars; a number of possible sites in Southern California are being surveyed. When built, the new telescope will make the moon appear to be only 25 miles away, and objects the size of the US Capitol building should be visible.

Airplane powered by a Packard diesel engine just completed a 12,000 mile tour consuming 1,082 gallons of fuel, for a total fuel cost of $108.20.

Capt. M. Campbell establishes new midget car speed record of 94.031 mph at Daytona.

Thousands of tons of rock recently broke away from the Goat Island side of Niagara Falls, leading to a stream of curious visitors during a normally dull season.

Market commentary:

Market wrap: Stocks were irregular early in the short session, then settled into a narrow range for the first hour, with activity concentrated in trading favorites. Buying spread to leaders in the last hour; rallying spread across the list and stocks closed strongly. Bonds generally strong; US govts. continue up; corp. dull, generally firm; European govts. strong while S. American were irregular. Commodities mixed; grains firm, with corn up sharply; cotton off slightly. Silver declined 3/8 cent to a new record low of 26 1/8 cents.

Week in review: Stocks continued in recent trading range, though Sat. gave signs of breaking out to the upside; advance to 175 on the Dow would be considered strongly bullish. Security loans continued decline. US govt. bonds rallied sharply through the week; rally extended to high-grade corp. though general list was dull; European bonds were strong but South American were unsettled. Credit continued easier, with bankers' acceptance rates hitting record lows. Sterling was strong, shutting off British gold drain to France; German stocks and currency rose after positive reaction to Breuning statements; silver declined to new record low, as did Chinese currencies; Peru announced debt moratorium. Steel improvement slowed. Grains mostly steady; cotton turned up.

Conservative observers continue to advise remaining on sidelines until market breaks out of trading range.

Saturday's rise in the Dow to within 0.14 of the Jan. 8 high of 173.04 raised hopes the market was ready to break out of its recent range into a sustained rally.

Recent resistance to bear drives has increased opinion stocks were thoroughly liquidated at end of 1930, and market is now in strong technical position.

Wall Street cheered by indications that any veterans' bonus measure will be relatively modest, perhaps in the $500M range. On the other hand, weekly trade reviews were mixed, reporting a lack of public buying power.

Well known bear Bernard E. Smith returns to Florida after several days in NY.

Reports of foreign buying of US stocks have been heard several times recently, the last being of buying from Amsterdam.

Failure of NY Central to cover dividend has raised concern; while dividend is likely to be maintained for now, longer-term outlook is uncertain if depression in rail earnings continues.

Steel interests deny reports of recent price cutting; recent investigation shows no important cases of customers able to obtain cuts; stability has been maintained; next move in prices anticipated to be upward. US Steel is to report end-of-Jan. unfilled orders tomorrow at noon.

Special Libraries Assoc. has prepared a pamphlet listing 214 important commercial and financial information services.

Broad Street Gossip: Traders cite some better news over the past few days: higher Jan. sales for some chain stores, continued gradual improvement in steel production, declining brokers' loans, rising stocks, strong year-end corporate balance sheets in spite of poor earnings, more favorable developments on veterans' bonus, and better chances of avoiding extra Congressional session. One trader is optimistic in spite of being down 70% from Oct. 1929: “If the country is going to the 'bow-wows' I am out of luck, but the country never has gone there yet, so it is a 100-to-1 shot that if I hold what I have I will make money.”

G.M.P. Murphy says residential construction cos. anticipate a sharp increase in activity this year; point out that normally 47% of all construction is residential, but in 1930 only 23% was; history indicates 1931 should see a large bounce-back in residential construction.

Pres. Hoover sees future prosperity for textile industry as a result of its improved fact-finding policy creating all-around efficiency.

Eugene Black, Atlanta Fed. Reserve gov., says business is swinging upward and ample credit is available for "legitimate agricultural requirements."

Darwin Kingsley, NY Life pres., looks back in company annual report on prosperous 1930 for life insurance industry.

S. Schwartz, Sutro & Co. senior partner, believes last stage of bear market has been reached; pessimism of today is as unwarranted as extreme optimism two years ago; sees positives both in economic situation (" unmistakable signs of gradual improvement") and in technical market position (resistance to bear drives over past few weeks).

Economic news and individual company reports:

Jan. auto production in US and Canada was 183,876 cars and trucks vs. 161,223 in Dec. and 283,606 in Jan. 1930. Ford worldwide production was 55,182 vs. 45,032 and 98,529.

Dividend record in 1930, surprisingly, showed many extra and increased dividends in early part of the year. Despite predictions of poor future earnings, dividend increases outnumbered cuts much of the year, with turning point not coming until mid-June.

Class 1 rails reported 1.394M workers with wages of $193.9M as of mid-Nov., vs. 1.455M with wages of $213.9M in mid-Oct., and 1.681M with wages of $240.8M in mid-Nov. 1929.

Bank of US auxiliary probe started regarding minor aspects of the bank's closing; to run independently of Steuer investigation. Plan of reorganization presented to State banking superintendent by I. Pershkin, counsel for depositors group; S. Rossoff, stockholder, is also preparing a plan.

Fisher's wholesale commodity index declines for 9th week in a row, to 76.4 for week of Feb. 6, vs. 80.7 for week of Dec. 5.

F.W. Dodge reports Jan. new construction awards in 37 states east of the Rockies $228.0M vs. $324.0M in 1930; 4 of 13 territories showed gains over 1930.

Steel production in Youngstown District to rise to 50% this week; rate is expected to fluctuate between 45%-55% for near future.

Tariff commission submits report to Congress showing foreign oil to be underselling domestic production by a wide margin; for period from 1927-29, oil from Oklahoma and Texas cost $1.98 delivered at refiners, while oil from Venezuela in 1929 cost 79 cents, though products of domestic oil refinement are more valuable.

Germany ran a trade surplus in 1930 for the first time since the war, exports exceeding imports by 1.6B marks. However, large amounts of foreign capital continue to be needed; heavy interest charges on commercial debts abroad made the balance of payments stay negative, and the drastic 3B mark decline in imports is unlikely to be maintained.

French govt. revenues in Dec. were 3.630B francs, down 5.5% from 1929; revenues in 9 months to Dec. were down 7%. Budget deficit for year to Mar. 31 estimated at 1.5B francs.

Commerce Dept. reports wool consumption was 377.8M pounds in 1930, vs. 516.1M in 1929 and 465.0M in 1928.

Coca Cola 1930 net was $13.5M, or $11.15/share, vs. $10.25 in 1929.

Companies reporting decent earnings: Coca-Cola, Jewel Tea, Imperial Tobacco, Lincoln Printing (largest financial printer), E. Kahn's Sons (meat packers).

Upcoming movies:

Howard Hughes is filming The Front Page at United Artists, adapted from the play by Ben Hecht and Charles MacArthur; Pat O'Brien will star. Mr. Hughes will next produce an original Ben Hecht story called Scarface, probably starring Louis Wolheim in the title role. Upcoming films from other producers include The Greeks Had a Word For It, and What Fun Frenchmen Have.

Joke:

"'You were swindled over this Rembrandt. The picture is not 50 years old.' 'I don't care about age, so long as it is a genuine Rembrandt.'"

Weekly Non-Blather Feb. 8, 1931

No Journal was published Sunday, Feb. 8, 1931. No time for blathering this week - just a quick note that I'm aware the blog feed has stopped working for some unknown reason, though the web site is still up. I haven't found anything obvious to account for the problem, and of course there's no way to get in touch with a human at Google ... Anyway, this seems to be a known issue without a known solution ... so I'll just have to hope Sergey and Larry are on the case. In the meantime, when you add this to my previous even weirder google episode, this might be food for thought before you use Google services for anything crucial to your financial or physical well-being ...

Saturday, February 7, 1931: Dow 169.88 +0.50 (0.3%)

Assorted historical stuff:

Glass committee seen likely to curb security "loans for others" made through banks for corporations and individuals. These loans have not been defended by a single witness in three weeks of hearings, and have drawn some harsh condemnation as the main factor taking speculative inflation to the heights it reached.

Bank of US bankruptcy hearing receives testimony that the executive committee never questioned a loan if the recipient was a bank affiliate, while loans to non-affiliates were investigated thoroughly. B. Marcus, pres., and S. Singer, executive VP, continue suit to disqualify M. Steuer as head of joint state/county investigation.

Washington report: Administration leaders deny reports circulating of a compromise on the veterans' bonus; issue has been discussed with some Republican members but no agreement reached; concern remains that any agreement would be "amended out of all reason." Senate and House leaders reach tentative compromise for $20M loan program to provide drought relief that may be used for food or other necessities. House has been chafing under its rule that no member can mention any Senator during debate; this has prevented members from replying to a recent "carnival of denunciation" in the Senate. However, House has gained prestige due to its more businesslike and temperate nature; "One Senate is enough."

Editorial: Owen Young's recommendation that all commercial banks be unified under Federal control would be desirable; as Mr. Young pointed out, the past few years have shown the superior strength of banks in the national system; over 80% of the 7,000 banks that failed in the past 10 years were state banks, not Fed. Reserve member banks. However, it may not be possible to impose this by law due to states' rights issues; it would probably be better to allow the process to happen naturally as the public becomes aware of the value of Fed. Reserve membership. Member banks should be allowed to establish branches in rural areas; there's much to be said for the Canadian branch banking system, which has a uniform countrywide law and has had far fewer bank failures.

Editorial: Report of the Senate special counsel against Eastern rail consolidation isn't that surprising considering Sen. Couzens' opposition. However, the arguments in the report are 10 years behind the times; most of the dozen or so objections in the report have been resolved in favor of consolidation; one possible exception is the effect on labor, but proponents of the plan have agreed that no men should be laid off because of the mergers.

British Chancellor Snowden denied rumors of a new unemployment relief loan: "My financial orthodoxy is still in a state of virginity." Lord Newton makes unexpected attack on Soviet Union in House of Lords; charges it's spending more on arms than any other power, probably $1B; “it is a perfectly stupefying figure.”

Construction of St. Lawrence waterway for ocean-going ships agreed on after visit of Canadian PM Bennett to Washington.

Railroads have finally arrived at a more reliable method of communication between front and rear cars of long freight trains than the current whistle - low powered radio transmitters are to be installed in each car, allowing signalling by a simple switch.

P. Litchfield, Goodyear-Zeppelin pres.says if McNary-Parker bill awarding airmail contracts to airships is passed, a trans-oceanic service between US and Europe will operate regularly by 1934; points out that 11 of 12 attempted trans-Atlantic dirigible flights have been successful, and no loss of life or injury was suffered.

NY State Sen. W. Lathrop protests continuation of one-man trolley car operation in Brooklyn, cites "tremendous wave of resentment against this penny-wise and pound-foolish false economy."

Moslem mine workers in Southern Bulgaria are on strike after owners refused to give them five half-hour breaks daily for prayers. The miners are from the Pomak tribe, which originally converted to Islam when Bulgaria was under Turkish control. Now, however, the tribe is stricter than the Turks themselves, refusing to accept the reforms of Kemal; men still wear the fez, women the veil, and they still use the old Arabic script.

Market commentary:

Market wrap: Stocks stronger; leading shares were up moderately, while trading favorites had some good advances as bull pools resumed activities. Bond market moderately active; US govts. continue rally; foreign steady, German strong; corp. generally steady. Weak tone in commodities; grains and cotton mostly close narrowly lower; corn up slightly; cocoa declined to new record low of 5.09 cents/pound. Silver declined 5/8 cent to new record low of 26 1/2 cents. Better demand seen for copper at 9 1/2 cents, raising hopes bottom has been reached.

Conservative observers were impressed by lack of liquidation after Thursday's break, but still inclined to wait for market to break out of its recent trading range.

Market strong spots included mail order shares, local tractions (mass transit cos., on improved unification prospects), US Pipe & Foundry, and trading favorites Auburn, Worthington, and Diamond Match [Kreuger-associated].

Market value of all NYSE-listed shares on Feb. 1 was $52.062B vs. $49.020B on Jan. 1.

Stocks in Berlin have had their first substantial rally in several months, and capital flight has eased. Earnings reports were not as bad as expected, and optimism has increased after reopening of the Reichstag, presentation of the budget, and Breuning statements on maintaining reparations and possible end to semi-dictatorship.

Investment trusts (similar to mutual funds and ETF's) have been buying in recent sessions; this has been a factor in stopping reactions over the past few weeks.

Rail freight loadings are considered an accurate measure of business activity. Some time ago, optimistic predictions had been heard that loadings in the first quarter would only about 5% below the 1930 level; however, so far this year the average decline has been about 16%. Rail earnings estimates are being revised down, accounting for some recent profit-taking in rail shares.

16 leading NY City banks are selling at an average of 18 times earnings, 1.5 times book value, and yield of 4%. Leading utilities are selling at 18-20 times earnings.

A copper mining man recently tried to interest the head of a copper co. in a big new prospect. "Not as long as I can buy them on the Stock Exchange for 25 cents on the dollar," replied the executive.

Broad Street Gossip: Some are encouraged by higher Jan. sales at several chain store cos. (Woolworth, Kresge, Kress, Grant). However, executives of the chains are reserving judgement; much of the improvement is in the Midwest, where auto and steel production is rising, but it's uncertain how long that improvement will last; a similar spurt last August dissolved into deeper depression. Many steel producers believe production will hit 65% before start of summer. Head of one of the largest banking groups believes buyers are now in a safer position than short sellers; liquidation is practically over, and stocks sold short to put the market down must be bought back. GM earnings of $3.25/share satisfactory for a very poor auto year; diversification into non-auto lines helped maintain earnings.

Sen. McKellar (D, Tenn.) charges Farm Board cotton operations a miserable failure; Board merely reorganized cotton cooperatives which previously had failed.

National tax conference convened by Amer. Farm Bureau; speakers agree total annual bill of $13B for Federal, state, and local taxes, growing $500M a year, demands serious attention; seeks to awaken public interest in “good government from the viewpoint of the pocketbook.”

Gen. W. Atterbury, Pennsylvania RR pres., believes business near bottom; improvement off bottom likely to be gradual as in the past, and may not be reflected in car loadings for some time.

Economic news and individual company reports:

Rates on NY bankers' acceptances cut 1/8% to record lows of 1 1/4% - 1 3/8% for 30-90 days; demand for short-term investments is very heavy as banks and institutions are building up liquid funds.

New bond offerings in Jan. were $602.4M vs. $125.7M in Dec. (low for 1930) and $624.8M in Jan. 1930; utilities accounted for 46.9%, rails for 17.4%. However, new bonds in the past week were down sharply to $21.3M as veterans' bonus unsettled the market.

US new car registrations in Dec. were 96,054, up 3.2% from Nov. but down 30.7% from Dec. 1929; full year was 2.626M, down 32.3%.

Jan. steel output averaged 91,971 tons (45.94% of capacity) per working day vs. 77,222 (38.57%) in Dec. and 140,596 (70.22%) in Jan. 1930.

Bradstreet's and Dun's weekly reviews report retail trade slow due to unseasonably warm weather in US interior, but note some gains in wholesale as spring merchandising season approaches; some irregularity seen due to impaired buying power in many sections.

A rather stunning chart appears on pg. 4 outlining the inter-relations of 23 public utility holding companies (see small image at right).

Worldwide crude oil production in 1930 was 1.408B barrels vs. 1.478B in 1929 and 1.322B in 1928; US production was 897M vs. 1.007B.

Manchester cotton market reports a fair amount of business despite labor troubles in Lancashire; a steady turnover is taking place with India despite Gandhi's desire for continued boycott of foreign cloth.

Gasoline in Youngstown district cut to 15 cents/gallon (including 4-cent state tax), lowest since 1911; unclear if action is temporary price war. Tank car gasoline expected to be raised 1 cent/gallon on the Atlantic Coast to 8 - 8.25 Cents.

Number of persons in US whose lives are insured for over $1M has grown from 58 in 1923 to 323 in 1930.

C.I.T. (largest independent financer of retail and wholesale installment sales) earnings held close to 1929 levels in spite of declining sales in almost all fields using installment selling; co. launched intensive campaign to diversify and increase number of customers.

Ford increases discounts to dealers from sliding scale of 17.5%-21% to a flat 22%; seen as move to strengthen dealers, particularly small ones.

Nat'l Cash Register 1930 net was about $3/share vs. $7.01 in 1929; co. has written inventory off conservatively and cut expenses steadily through the year.

Company reports since Jan. 1: 99 companies reported higher earnings vs. 1930 and 315 lower; 377 dividends unchanged, 24 increased, 78 cut.

Companies reporting decent earnings: Standard Brands, Amer. Gas & Elec., Hartford Elec. Light, Amer. Snuff, Consolidated Laundries.

Dance report:

Death of Anna Pavlova has revived interest in the ballet dancer. Paris idolized Pavlova from her first apperance in 1909 as a member of Diaghilev's company, until her last in 1928. Her death has provoked speculation on the future of dance. In the past decade, dancing has become one of the highest paid professions, "with honors and shekels going to the eccentric and the fleet of foot." Acrobatic dance teams have featured in European music halls and on Broadway, ballroom dancers have popularized nightclubs, and the black revue has circled the world and is now at the peak of popularity in Paris. By contrast, the ballet has declined, now restricted largely to opera houses. Years of intensive and competitive training are required, and the ballet career is relatively short; a dancer's pay is lower than that of "her cake-walking sister." The ranks of the ballet have thinned; "competition is now for the financial returns rather than for the bouquets of art."

Jokes:

"Smith - Did you ever write a tragedy? Dramatist - I did once, but I thought it was a comedy up to the night it was produced."

"'Had an addition to my family yesterday.' 'Congratulations. Boy or girl?' 'Neither. Wife's mother.'"