Friday, March 13, 1931: Dow 180.14 -1.77 (1.0%)

Assorted historical stuff:

Sen. La Follette (R, Wis.) speaks to progressive conference; declares administration has lacked "either the will or the courage" to meet a crisis in which 25M people have suffered privation in the midst of plenty. Calls for remedial program that independents with balance of power in next Congress can support. Various remedies proposed in roundtable discussion, including shorter working hours and wider distribution of wealth. AFL Pres. Green says industry should generally be required to provide continuous employment for workers; opposes recognition of Soviet Russia.

Editorial: The progressive conference resembles "the confusion of tongues at the Tower of Babel," though there does seem to be some agreement for both less and more tariff (less for industry and more for agriculture), and that the Farm Board is a failure. If the conference is to be of use in expressing the public will, it must reconcile conflicts and "give form and coherence to the loose hodge podge of grievances that now surrounds the progressive movement."

Washington report: Progressive conference is a shrewd political tactic. Timed perfectly for maximum news exposure after Congress adjourned, its purpose is to excite public opinion, interfere with adoption of more conservative programs by both parties for 1932, and avoid breakup of the Democratic-Insurgent alliance; since this would leave them no place to go but a third party. Insurgents are facing alarming prospect of losing influence since Democrats may control the next Congress and therefore may no longer need them as allies. Several Congressional inquiries will be carried on during the nine-month recess, including the Wagner unemployment insurance inquiry, the Glass financial inquiry and some smaller investigations. Farm Board appears to be putting less emphasis on price stabilization and more on cooperative marketing. This is understandable in view of stabilization's failure, though Board officials still defend it as preventing far more serious financial disaster throughout the wheat belt.

Another editorial by T. Woodlock questioning govt. sponsorship of inland waterways.

J. Stevens, Panama Canal chief engineer, says building canal across Nicaragua unnecessary and could cost as much as $1B rather than estimated $750M.

Final link completed in railway spanning Southern part of Africa from Atlantic to Indian Oceans.

Population of England and Wales rose 194,033 in 1930; death rate was lowest on record.

J. Foltz of Westinghouse Electric recently demonstrated a 60 pound "electric ear" the size of a suitcase, designed to separate the different frequencies in complex noises. Possible applications include silencing noises by producing canceling sound waves, and detection of mechanical faults in airplanes.

New coast to coast air express service now being used to transport some urgent deliveries of food, including saddle of English mutton for Dr. A. Einstein during his recent visit to California, and fresh fruit and nuts delivered to San Francisco for a wedding.

NY Board of Trade unanimously asks for "complete immediate legislative investigation" of NY City affairs, with aim of "exonerating the innocent majority now hopelessly confused with the guilty minority."

Gov. Roosevelt signs unemployment bill allowing most corporations to contribute to charities; public utilities were barred on grounds they “might use the privilege to sway public sentiment to their advantage.”

NY Telephone directory has grown from a card listing 252 names half a century ago to 2.623M today; 600,000 new subscribers have been added in the last 5 years. This compares with about 370,000 telephones in all of Russia.

Digging of subway tube under East River between Manhattan and Brooklyn has started from the Brooklyn side.

A fashionable Fifth Avenue shop is rumored to have a permanently employed "Whipping Boy." His job is to appear before the manager when a customer has an insoluble complaint, be roundly abused for his stupid error, offer a lame excuse, get fired, go across the street for a cup of coffee, and return for his next dose.

Market commentary:

Market wrap: Bears more aggressive; rails came under heavy selling, and weakness spread to main body of stocks; US Steel came in for particular bear pressure, and late in the day was finally forced below last week's resistance level of 143 1/2, bringing more selling across the list. However, though market was irregular in final hour, wide-open break anticipated by bears failed to materialize. Bonds active, mostly reactionary; US govts. gained; foreign irregular; corp. mostly down, particular weakness in rails and speculative. Commodities mixed; grains mixed in narrow range; cotton rallied after early weakness to close up substantially. Copper prices stiffened slightly, with no offerings below 10 1/4 cents.

Conservative observers cautious, advise staying on sidelines until "definite resistance level has been established." Leading brokers report reduced public participation; customers tending to liquidate long positions and stay on sidelines.

Weak spots included American International on dividend omission, and Westinghouse on speculation of dividend cut. Rails continued to reflect dividend uncertainty, though some rallying developed at times. Utilities were strong early.

Bears encouraged by NY Central and other dividend cuts as reflecting pessimism of important interests on near-term business outlook.

Steel price outlook uncertain. Industry leaders reportedly had planned a price advance; what caused change in plans hasn't been learned. It's hoped leaders can establish current prices firmly and eliminate price "shading" (concessions).

Optimistic interpretation of rail dividend cuts is that it may be laying groundwork for gaining control of expenses; rails logically couldn't start cutting wages while still paying dividends at boom levels.

Considerable switching reported from rail shares, some of it going into leading utilities. Some optimism on mail order shares due to drought relieving weather in Indiana-Illinois region, and estimate of $26M in veterans bonus money to rural sections in those states. Krueger & Toll 1930 earnings expected to be close to 1929 level; some quarters contend management could report a much better showing, but is retaining undistributed earnings in subsidiaries to reduce taxes.

M. Traylor argues against fears of centralized control of US industry by sponsors of fixed investment trusts [similar to ETF's].

National Bond & Share, a managed trust [similar to mutual fund] run by Dominick & Dominick, did an amazing job of preserving value, only declining 5.65% in the two years ended Feb. 28. It's selling at 37, a discount of over 21% from net asset value.

Broad Street Gossip: Number of "blue chip" stocks (that traded over $200) rose from 16 in 1926, to peak of 94 in 1929, then fell to 37 in 1930. On Mar. 9, only 3 NYSE stocks traded over 200, though 6 more with ask prices over 200 didn't trade. Short interest has increased during the week, with some big professionals putting out large lines. Dividend news has been bad, but stocks of companies forced to cut dividends haven't been doing as badly as expected, because the actions mostly were anticipated. "A year from now, if business goes the way the majority think it will, many corporations will be restoring dividends." A well-known bank president's advice on investing: stick to good stocks; trade on values; study annual and quarterly reports; read a newspaper; look at earnings trend; figure out book value, cash position, inventory position, and other important items; look over list of directors and see if management is good; study industry prospects; stick to industries that are "well stabilized, ... sufficiently well organized to limit production to consumptive requirements."

Long-term wheat outlook poor; with US and Canada carryover of 500M bushels and likely surplus this year of 500M, there would be 1B available for export, while total world import requirements seldom exceed 800M. Corn, on the other hand, is likely to have an actual shortage of about 245M bushels through Nov. 1.

P. Crowley, NY Central pres., sees signs of improvement in some spots including auto and steel businesses; car loading increase in March over Feb. is hopeful.

C. Hayden of Hayden, Stone, at Boston Stock Exchange dinner, says: “we are on eve of one of the greatest periods of prosperity this nation has ever known.”

Economic news and individual company reports:

American International omits dividend. Bank of America cuts annual dividend rate to $3 from $4.50. Pennsylvania RR denies reports of dividend action, says board hasn't yet discussed the matter. Baltimore & Ohio subject of dividend cut speculation; yield is now over 9%.

Commerce Dept. reports no disturbing changes in retail credit in second half 1930 despite depression; proportion of business done on credit was about the same as in 1929; payments remained satisfactory, with bad debt losses on installment accounts 2.99% vs. 2.5% and on open credit accounts 0.6% vs. 0.5%.

Fed. Reserve reports money in circulation Mar. 11 down $21M to $4.554B, total Reserve Bank credit outstanding up $34M to $942M. Member banks in NY City report brokers' loans up $29M to $1.819B; loans on securities to non-brokers up $2M to $1.846B, first increase since start of year.

Arkansas business leaders report drought-breaking rains and improvement in banking conditions have put Arkansas "back on her feet." Red Cross reports sharp decrease in number of calls for relief since March 1.

Standard of Calif. cuts gasoline a further 1 cent/gallon; other Calif. majors meet cut. Standard of NJ cuts gasoline 1 cent/gallon to match Atlantic Refining cut. Canadian gasoline cut for second time in a month. Interior Sec. Wilbur reports all large oil importing interests have been willing to cooperate in reaching oil agreement; negotiations continue. Okla. Gov. Murray sends message to legislature approving oil production curtailment.

Scrap market uncertain; prices fairly steady though one market shows decline; buying quiet, and little likelihood of substantial advance seen.

French govt. announced deficit for current fiscal year will be 2B francs; suggested higher taxes have drawn widespread protests demanding spending cuts. Bank of France reported another record in gold holdings at 56.1B francs, up 13.3B from a year ago.

Brazil places embargo on all imports of manufacturing machinery for 3 years due to overproduction in textile industries.

Gov. Roosevelt says bill on St. Lawrence power development will be ready next week; proposal likely to follow commission majority in recommending public power plant with private distribution; however, may include additional safeguards.

The more controversial banking reform bills proposed by NY banking superintendent J. Broderick have been killed in committee. One State Assemblyman has proposed an investigation of the NY State Banking Dept. in connection with the Bank of US and other failures.

Upcoming NY State bond sale expected to go well due to high safety; NY State net debt is $287.1M, or about 1% of total assessed valuation.

Coral Gables, Fla. Bondholders Protective Committee asks for deposit of bonds so they can negotiate settlement plan with legislature; after 60-day session starting in April, legislature won't meet again until April 1933.

Largest NY City taxpayers are NY Central, $9.1M; NY Edison group $8.5M; NY Telephone $6.2M.

J. Young, convention bureau GM, reports NY City held 1,096 exhibitions in 1930, with about 750,000 out-of-town visitors spending $80M.

American Tobacco shows amazing sales performance over past few years; cigarettes sold increased from 31.3B in 1928, to 40.6B in 1929, to 45.5B in 1930, and now account for 38.1% of total US production; 1930 net was $8.56/share vs. $5.76 in 1929.

Stories on favorable prospects for Public Service of NJ and Engineers Public Service (public utilities).

Companies reporting decent earnings: Warren Foundry & Pipe, W.T. Grant (chain stores), Lambert (toiletries and medicinals), Industrial Rayon, Sweets Co. of America.

Musical:

Ten Cents a Dance - Dramatization of dance hall hostesses suggested by the popular song. Barbara, played by Barbara Stanwyck, marries a weak, criminally inclined young business man played by Monroe Owsley. This is the second film in a month in which the capable Oswley plays "an irascible, nervous, over-ambitious fellow who loses in the stock market, steals money to cover up his losses, and narrowly escapes punishment in the end through the kindly intervention of the woman he has wronged." Film ends happily when Barbara is proposed to by her former husband's wealthy employer; however, it rates considerably below the song in entertainment value.

Thursday, March 12, 1931: Dow 181.91 -1.72 (0.9%)

Assorted historical stuff:

Washington report: It now seems likely action on unemployment insurance may be taken by the next Congress; inquiry will be made by Sen. Wagner (D, NY) and two Republican Senators into existing systems, and a report made in Dec. It's fortunate the inquiry is in the hands of Sen. Wagner, who will be sympathetic but practical in approaching the problem. A system of insurance could be purely Federal, joint Fed.-state, purely state, or private; it's apparent from experience of Britain and "known temper of our Congress" that a purely Federal system would be in most danger of growing out of control, while a joint Fed.-state system might be safer. It would be preferable economically to have a purely private system, or one set up with states to enforce participation, but these options will likely become impossible when Congress acts. "Publicity machines" of the two parties becoming active again now that Congress has adjourned. Alfred E. Smith seen unlikely to run again in 1932, though he may go into the convention with a swing block of delegates. Pres. Hoover seen unlikely to decide on international silver conference called for by Senate for several months.

Editorial: Reports indicate alarming trends in the wheat situation. A year ago, the country had a record wheat carryover of 275M bushels; this year it looks likely to increase to something like 345M; "this will be one of the Farm Board chickens coming home to roost."

Editorial by T. Woodlock: Gov. Roosevelt's acceptance of the St. Lawrence Power Commission's proposed bill opens way for public development of water power along sounder lines than Muscle Shoals. State agency operating the plant won't have recourse to taxing power, so will have to operate economically. On the other hand, bargaining position with private utilities in arranging to sell power will be strong since legislature can still go back to the fully public option of building their own transmission lines. Keys for sound public operation are removal of taxing power and accurate accounting, making the enterprise "stand upon its own bottom."

The Wall Street area, in spite of containing some of the world's most expensive real estate, also serves food at Corn Belt prices; latest feature is a fresh egg sandwich that can be bought for 5 cents within sound of the Trinity churchbells.

Hudson River Night Line to resume freight service between NY and Albany, starting second century of operation.

Bureau of Internal Revenue says it can give no official set ruling on depreciation schedule for miniature golf courses.

Westminster Abbey, Canterbury Cathedral, and the cathedral at Rheims are now all heated by oil burners made in Bloomington, Indiana.

Bathtubs were first built about 2,000 BC, but didn't become popular in the US until mid-1800's. Some cities attempted to crack down on tubs; Philadelphia almost banned bathing between Nov. and March, while Virginia passed a $30 annual tax on bathtubs. Pres. Fillmore (1850-53) was first to install one at the White House.

Market commentary:

Market wrap: Rails under pressure following NY Central's dividend cut; however, rest of the list received the news relatively calmly; leading stocks received good support, with reactions staying in technical bounds and volume dropping on recessions. Bond trading quieter; US govts. slightly higher; foreign continue strong; corp. high grade relatively steady near recent highs, speculative irregular. Commodities mixed; grains somewhat higher; cotton down substantially. Copper larger producers holding at 10 1/2 cents, but smaller amounts sold at 10 - 10 1/4. Silver up again to 30 1/8 cents, gain of 2 cents in 3 days.

Conservative observers more cautious; advise using stop-loss orders and reducing long positions on rallies.

News of the day was unexpectedly bad; NY Central dividend cut took many by surprise, while failure to raise steel prices was also unpredicted. NY Central's dividend cut "doubtless would have caused a wide-open break" in the general list a year ago; subdued reaction indicates liquidated state of market.

Recent trading believed more professional; relatively narrow range has discouraged many outsiders from participating. Bull pools reportedly operating in Vanadium and Columbia Gramophone.

Chemical shares continued weak, with Allied Chemical hitting new 1931 low and selling in Matheison Alkali. Oil shares were mixed.

Moderate amount of recent selling attributed to those who must pay income tax installments next Monday.

With big Federal, NY City, and Port Authority bond issues successful, other municipal borrowers that have delayed offerings are likely to make them shortly.

Broad Street Gossip: Oil stocks have been making new lows, but some farsighted traders have been accumulating them on long-range prospects; gasoline consumption has been increasing every year, and the industry is well-managed. Rise in the market has helped business by adding billions to security holders' wealth, and improving sentiment. "The stock market helped business; now it is up to business to help the stock market." J. Bernet, Pere Marquette Rwy. pres., discusses rail situation: "A railroad handles everything that is offered. Its subsidized competitors choose the best territory, operate when it is not too difficult, and take the pick of the business. A railroad, as any other laborer, is worthy of its hire."

J. Pelley, NY, New Haven & Hartford RR pres., calls for regulation of all transportation for hire, to eliminate “unrestrained and unfair competition” by “irresponsible carriers.”

Advance in silver over the past week seen as development of outstanding importance, possibly indicating improvement in world economic conditions. Rise will increase buying power of India, China, and other consuming nations. Some bankers believe silver will remain strong for the near future.

Editorial: NY Central's dividend cut was reasonable, and probably predicts similar actions from other rails. This brings up the fact that accumulated corporate surpluses, though indicating financial strength, don't usually represent a reserve from which dividends can be paid in bad times. This is particularly true for rails, since surpluses are often in the form of fixed property. However, this does raise the question whether a closely regulated industry such as the rails should retain earnings as surplus in good years; "If the holders of railroad common stocks must cheerfully accept the consequences of business depression ... their claim to substantially all the divisible earnings of good years is correspondingly fortified."

Symington & Sinclair see rough year for rubber industry; consumption unlikely to exceed 690,000 tons, and may even fall below 1930 total of 676,500.

Govt. officials optimistic after recent bond market strength. Usual pattern of recovery from depression starts with strength in short-term paper, then bonds, then stocks. Bond rally that was interrupted by veterans' bonus commotion appears to be resuming.

Economic news and individual company reports:

NY Central cuts quarterly dividend from $2 to $1.50; most important rail to cut dividend so far. Four main Eastern rail lines preparing joint consolidation plan modifying their earlier one; likely to be submitted to the ICC by Apr. 1. Rail car loadings for 4 weeks of Feb. were 18.1% below 1930, vs. a 17.3% decline in last 4 weeks of Jan.; with expenses already cut to the bone, lower traffic indicates another poor earnings month.

Carnegie Steel announced unchanged price list for second quarter delivery, with bars, shapes and plates selling for $1.65/100 pounds. Most quarters had expected a price increase. Prices on some specialized products have been raised. Steel makers earned return of 5.6% on invested capital in 1930, though earnings were largely confined to the first half. Steel production in week ended Monday was 54% vs. 53% prev. week, 52% two weeks ago, 76% in 1930, and 94% in 1929; US Steel declined to 54% from 55%. Weekly steel reviews offer mixed picture; Iron Age reports more uniform uptrend in demand and production, expects impressive improvement in March; however, Steel and Amer. Metal Market report poorer sentiment on upcoming business. Machine tool trade continues to report good inquiries but slow buying.

J. Broderick says will sue Bank of US directors to make up bank's deficit. D.A. Crain preparing to try 5 of the 8 bank officers recently indicted.

Interesting story on consistent increase in savings bank deposits during depressions; NY State savings banks have shown more deposits than withdrawals every month since June 1930 except for a small deficit in Oct.; on the other hand, June-Oct. 1929 showed more withdrawals every month. While many are compelled to draw on savings due to financial hardship, increased savings by those who still have income more than compensates.

Three French banks fail following "financial embarrassment" of Aero Postale, heavily subsidized air mail line. Govt. somewhat shaken as some officials may be connected to the failed enterprises; Paris stocks down. No sign yet of unusual capital movements.

Bank for Int'l Settlements initiating campaign for reviving European investment markets by converting short-term debt to long-term, and encouraging movement of capital from centers where it's abundant to where it's scarce. Will subscribe to first bond issue of new Int'l Mortgage Bank.

Registered British unemployed Mar. 2 were 2.635M vs. 2.618M Feb. 23 and 1.547M a year ago.

Alabama Gov. Miller says financial situation in state is most serious since reconstruction. Schools are reportedly closing for lack of funds; Gov. Miller appeals to teachers to continue working, promises they will be paid through warrants, which are practically "a lien on all property" in the state. Cisco, Texas has failed to make interest payments on bonds; Texas legislature considers repealing law allowing bondholders to put cities into receivership.

F.W. Dodge reports residential building in 37 states East of Rockies during Jan. and Feb. off only 6% from 1930, vs. a decline of almost 50% in 1930, indicating deflation in residential building almost complete; this type of construction is looked to by economists as indicator of recovery from depression.

Beneficial rain and snow reported over much of wheat belt; wheat in generally good condition.

Novelty (5 and 10 cent) chain stores, generally considered depression-proof, report first sales setback; 4 major chains report total 1930 sales 3.56% below 1929 (chains are Woolworth, Kresge, McCrory, and Kress).

US electric output for week ended Mar. 7 was 1,734 GWHr, down 4.8% from 1930, vs. a 4.8% decline prev. week and 3.6% two weeks ago.

Feb. car production in US and Canada was 230,364 vs. 178,399 in Jan. and 345,955 in Feb. 1930. Improved retail demand reported.

Call money fell back to 1 1/2%, from 2%, as generally expected.

Spending by motorists touring the US in 1930 estimated at $3.2B, down 15% from 1929; spending was about half of world total.

Total Canadian bond offerings in first two months were $147.0M vs. $102.7M in 1930 and $73.1M in 1929.

1930 earnings reports: American Tobacco (maker of Lucky Strikes) $8.56/share vs. $5.76 in 1929; Westinghouse $4.45 vs. $10.15; Monsanto Chemical $1.73 vs. $4.25; American Ice $3.93 vs. $4.22, Phillips Petroleum $0.95 vs. $5.39.

Companies reporting decent earnings: American Tobacco, National Biscuit, International Match [Ivar Kreuger-affiliated], Midland Utilities, Wisconsin Power & Light, Aluminum Industries, Noranda Mines, Anglo-Norwegian Holdings (whaling), Cohn & Rosenberger (novelty jewelry).

Theatre:

Miracle at Verdun - Drama by the late Hans Chlumberg in which 13M World War dead are resurrected as an argument for peace. Three of 13 scenes in the play have been filmed using the play's cast, and will be presented using sound film during the play. Some revues have previously used sound films for comedy scenes, but this play will be first in the "legitimate" theater to use sound film as integral part of presentation.

Great political speeches dept.:

Speech by N. Stinner, 14 year old page in the Arkansas legislature, against proposed bill for a $10 license tax on all dogs: "There ain't no better friend of a boy than his dog. There ain't no justice in this proposition. It's those school teachers who are behind this bill. I got two dogs. One's a black shepherd and the other is a plain dog, but I can't afford $20 for them." The bill was defeated.

Wednesday, March 11, 1931: Dow 183.63 -1.75 (0.9%)

Assorted historical stuff:

Editorial: The Senate, by its "absurd rules" giving a single Senator the power to block any pending legislation for as long as his physical strength holds out, has "robbed itself of parliamentary virility." In most recent example, Sen. Thomas of Oklahoma took the floor on midnight of Tuesday last week to move for investigation of the oil industry, and held it until Congress adjourned, blocking action on several important measures without accomplishing anything.

Editorial: Senate's postponement of action on World Court means US "remains three long steps behind the leaders in the world's endeavor to render war unlikely." Adherence of the US to the World Court, under the 5 Senate reservations, is desired by decisive majorities of both the people and the Senate; "shabby exigencies of domestic politics" shouldn't be allowed to delay approval beyond next session.

Editorial from Sat. Evening Post: The Russian Five-Year Plan is a misnomer, since it's being moved ahead by our own capitalists. “If the Five-Year Plan succeeds, it will be with the help of American engineers, experts, machinery, and money ... it will be at the expense of the American farmer, laborer, and manufacturer.”

Soviet ship with cargo of lumber to test Sec. Mellon's embargo on prison-made goods; will have to prove only free labor was involved in production.

Dr. H. Moncado, Filipino Fed. of Amer. head, tells NY Times he has been assured by Sen. King and Rep. Knutson that majority of Congress favors Philippine independence; believes next Congress may take action.

Washington report: It now appears the only way to end Prohibition may be through repeal of 18th Amendment; quicker methods such as legal challenges or modification appear unlikely to succeed. Repeal process is likely to take several years. Effect of State Dept.'s decision to launch new study of Russia uncertain. Last official statement 8 years ago said Soviets must recognize debts of former govt. and discontinue propaganda within US before recognition.

Story by H. Alloway on death of banker Andre Lazard, head of Lazard Freres, remembering him as postwar advocate of liberality in dealing with defeated nations.

Radio Corp. of America reports sharply lower 1930 income due to decline in consumer buying power; however, co. in stronger financial position and launching intense development program. Radio manufacturing has been unified and balance sheet is in better shape. Television has been repeatedly demonstrated in the lab, but further development is needed before production. Ready to begin production of home sound movie theatre systems as soon as system of film distribution to homes is available; eventual market may be 20,000 "little theatres" in homes. Developed home recording phonograph. Successful experiments on transmission of facsimiles to ships at sea. Nat'l Broadcasting Co. subsidiary now profitable, as is RCA Photophone sound film system. Antitrust suits ongoing.

Canadian Nat'l. Research Council reports new process for making industrial alcohol from natural gas wasted in oil fields.

Incoming calls to the new Western Union skyscraper are handled by a "robot" that automatically detects a call on any one of 120 trunk lines and transfers it to an operator in the order received.

Rear Adm. Byrd reportedly planning another expedition to the Antarctic.

Goodyear Zeppelin to operate daily sightseeing dirigible from NY City to surrounding towns.

Average wage of women working in 5 and 10 stores is $12/week; average wage in 32 department stores is $26.17/week for men and $16.13 for women.

The NY Central supposedly offered Lincoln $10,000 a year to be their general counsel just before he was nominated for President; Lincoln replied "It would ruin my family to have that much income."

The 71st Congress spoke 40.5M words; cost of printing 36,000 copies of them in the Congressional Record was $758,693.

German Reformed Church in Byron, Ill. has been modernized by their youth. For 40 years of Sunday services, men have been made to sit on one side of the church and women on the other; now, they will be permitted to sit together.

Wall Street Athletic Assoc. to hold annual Basketball League championships Mar. 10-18 at the Brooklyn Elks Club; dancing to follow.

Market commentary:

Market wrap: Stocks moved ahead impressively for most of session, with utilities particularly strong; however, rally was checked by heavy selling in Allied Chemical over earnings outlook; some high-priced shares declined sharply; stop-loss orders were uncovered, adding to the selling; final tone was weak. Bond trading more active; US govts. quiet, steady; foreign active, generally higher; corp. high grade firm; speculative unsettled, continued weakness in amusements. Commodities weak; grains off moderately; cotton down substantially. Copper remains at 10 1/4 - 10 1/2 cents, with large producers holding at the higher price. Silver rose again to 29 3/4 cents.

Conservative observers pointed to late reaction in stocks as confirming their advice to use stop-loss orders; continue to recommend sidelines.

Bulls encouraged by expanding auto production, drought-relieving heavy snows in the Midwest, anticipated veterans' bonus spending, more optimistic international feeling, and "philosophic manner" in which market received worse than expected US steel unfilled orders report.

Bond offerings of $75M by NY Central RR and $50M by Pennsylvania RR well received, as was the $66M Port Authority of NY issue.

Leading stocks appeared to run into resistance when reaching new rally highs. Market has recently been unable to follow through on either rallies or declines, leaving a market where profits are to be had by the more nimble traders while others are "whipsawed." Some observers feel continuation of this range-bound market is an increasingly strong indication of consolidation before another advance. Many observers are still puzzled by conflicting indications on how far the currently moderate improvement in business will extend; a large number are remaining on the sidelines until definite evidence appears.

Broad Street Gossip: Country has "billions of idle money" as seen in record savings bank deposits and ease with which new bond issues are sold; "To bring things back to normal, the dollar must be put to work, and recent developments show that the dollar is getting a little more active." The Old-Timer observes: "Many traders have taken their heaviest losses, because of their successful efforts in dodging the margin man." Six representative brokerage firms report margin calls are at a record low. Year has started off fairly actively for stock trading; veteran traders predict numerous 5M-10M share days assuming business turns up.

Editorial: London Times criticism of US for recent lack of lending to rest of the world is "not without foundation," but situation should soon reverse. Factors behind lending slowdown include decline in securities markets and international political instability; "both are now in a fair way to recede more or less into the background."

German banking circles optimistic on improved prospect of long-term loans. Political situation has also improved; authorities say Hitler hasn't availed himself of political opportunity; while Nazi element continues to be a menace, influence of the party is waning. Stocks and currency have strengthened.

Improved prospects seen of Britain replenishing gold holdings.

G. Roberts, National City Bank VP, says highly complex modern economic system provides much higher standard of living but sometimes becomes imbalanced due to complexity. Disagrees with idea of limits to growth; “There is no limit to human wants ... or to the amount of wealth that may be created ... The only danger of overproduction is unbalanced production.”

Economic news and individual company reports:

Federal indictments for violation of national banking laws returned at Greenville, Tenn. against Rogers Caldwell of Caldwell & Co. [collapsed in Nov.] and Col. Luke Lea, Nashville publisher and political leader.

Bethlehem Steel executive bonuses become subject of another stockholder lawsuit, this one in NY Supreme Court by S. Hopkins. Suit claims directors and officers received $31.9M while only $43.3M was distributed to stockholders in dividends.

Ford and Chevrolet continue seesaw battle for supremacy. Ford regained lead in Sept. 1928, when Model A overtook Chevrolet 4-cylinder cars; Chevrolet retook lead in Dec. 1930; preliminary Feb. figures indicate Chevrolet will maintain lead but struggle looks likely to tighten in the near future. J. Mooney, GM VP, reports substantial improvement every month since Dec. in GM European sales.

US Steel unfilled orders ending Feb. were 3.965M tons vs. 4.132M Jan., 3.944M Dec., and 4.480M a year ago; decline was greater than expected. Steel authorities hope for increased production in March, but say this may be first-half peak unless demand improves. Smaller producers reportedly cutting prices again.

Rail freight loadings for week ended Feb. 28 were 682,000 down 31,958 from prev. week, down 24.1% from 1930 week, and down 30.2% from 1929; comparison misleading due to Washington's Birthday. Total class 1 rail operating income in Jan. was about $35M, lowest month since 1922; showing was disappointing since gross only declined 3.4% from Dec. while net declined 35.4%.

Banking reports show total loans and investments of Fed. Reserve member banks now $22.621B, only $155M below Jan. 7, vs. $531M decline last year in the same period; Fed. Reserve easy credit policy continues. Banks appear concerned with strengthening their positions; in period since Jan. 7, security loans are down $380M, and "all other" loans down $243M, while on the other hand govt. bonds are up $355M and other bonds up $113M. Rise of $17M last week in "all other" loans was first sign so far of seasonal increase in business credit.

Interesting review of security loans over past few years. Commonly cited ratio of brokers' loans to total stock value fluctuated between about 8% and 10% during the bull market, actually declining from 9.75% on April 1, 1929 to 8.79% near the peak on Sept. 1; it's now at 3.22%. However, the more comprehensive ratio of total known security loans to total value of stocks and bonds has been much more stable, remaining between 9% and 10% for most of the bull market, hitting a peak of 10.5% on Nov. 1, 1929, and only in the past two months falling below 8%.

Refineries ran at 60.8% in week ended Mar. 7; stocks of gasoline increased 997,000 barrels to 45.789M. Crude oil production in week ended Mar. 7 was 2.157M barrels/day, up 51,800 from prev. week but down 378,650 from a year ago. Many major oil cos. follow drastic oil purchasing price cuts by Standard of Indiana and Union Oil. Representatives of 7 oil producing states met in Texarkana to discuss ways of putting oil industry on sound basis; suggested modifying antitrust laws and restricting imports. Oil importing companies may agree to voluntary restriction of imports to avoid legislation. Los Angeles independent stations reportedly selling gasoline at five cents a gallon.

Commerce Dept. reports no general upturn in world trade, but a few encouraging Feb. reports from Japan, China, Australia, and Canada; however, French unemployment rose sharply.

Annual world consumption of machinery estimated at $5.5B, of which US accounted for $2.5B.

US aluminum production in 1930 was 229M pounds valued at $51.0M, vs. 225M valued at $51.9M in 1929; about 44% produced at plant in Messena, NY.

Feb. postal receipts in 50 cities were $26.4M, down 10.4% from 1930.

NY State Industrial Commissioner F. Perkins reports NY factory employment up 1.4% in Feb., slightly better than usual seasonal gain but 16% below Feb. 1930.

Florida state and local officials to meet with Jacksonville City Commission to discuss ways of dealing with Florida's $600M bonded debt (51% municipal). Resulting taxes, mostly on real estate, "have in a measure destroyed the value of real estate" and damaged building-related industries, the largest Florida employer.

Mack Truck cuts quarterly dividend from $1.00 to $0.75; says first-quarter earnings will be poor but sees "very evident signs ... of a substantial improvement."

Companies reporting decent earnings: Equitable Office Bldg., International Cement.

At the galleries:

Third Annual Antiques Exposition enjoys smashing success, with attendance estimated double last year. Gallery Zborowski of Paris makes NY debut with exhibit featuring group of unusually fine portraits by Modigliani. Mr. Zborowski was “at the crucial period of Modigliani's pathetic career, his most ardent champion ... even to the selling of his own personal effects to supply funds and food materials for his protege.”

Movie:

Unfaithful - "The screen's most proficient actress," Ruth Chatterton, is "handicapped by an unworthy scenario" involving marriage to a straying English lord, falling in love with a young artist, and a conveniently fatal car accident that allows a happy ending. Casting of Paul Lukas as the romantic lead is interesting, since he's previously played suave villains; "casting such types in romantic parts occasionally should add a welcome note of variety."

Joke:

"Teacher - If a number of cattle is called a herd, and a number of sheep is called a flock, what would a number of camels be called? Little Johnny - A carton."

Tuesday, March 10, 1931: Dow 185.38 +1.53 (0.8%)

Assorted historical stuff:

Washington report: Democrats seen likely to nominate wet candidate in 1932; strategy will be to hold the "solid South" and add large Eastern states, where wet stand would appeal; South is likely to accept wet position in spite of protests. Greater problems may arise with economic program; "wiser heads" in the party believe it would be unwise to put forth a candidate or platform "full of untried economic theories and new 'isms'" but "it remains to be seen whether their effort to swing the party clear of those things can succeed." Dry liberals are unlikely to also give in on economic issues; for example, J. Raskob's economic proposals have drawn protests, including editorial comment that the party "is to be turned over to Wall Street." Historically the more conservative Eastern states have rejected liberal economic measures, and this is likely to happen again in 1932 since "the country should be well out of depression" by then; this explains party leaders lack of enthusiasm for the admittedly popular Gov. Roosevelt. Progressive conference meeting this week seen unlikely to form third party, since "they would have to harmonize almost as many political ideas" as conference members. Sen. Watson (R, Ind.) predicts Republicans in 1932 will run on comprehensive economic program opposed to govt. ownership schemes, and will remain dry. Sees insurgents of both parties out of step, likely to form third party in 1932.

S. McGowan, Navy Paymaster General during the World War, advocates Constitutional amendment requiring popular referendum before Congress can declare war, except in case of threatened invasion.

Editorial: Whether the Gandhi-Irwin agreement will succeed in improving the lot of India's 350M population will be determined in the next two weeks. Approval by Parliament seems certain, while the National Congress' vote is in more doubt; in both cases, opposition is coming from quarters that only confirm the wisdom of the compromise. If approved, a second conference must be held to draft a Constitution. While Gandhi unquestionably gave up much of his previous program, in particular granting Britain "reservations" in respect to "defense, external affairs, the position of minorities," and financial obligations, these were not so much concessions as recognition of the practical impossibility of literal Indian independence, "a gift which India could no more accept than Great Britain could grant." Indian population estimated at 348M, up 30M in past decade; Madras pop. 51.6M, up 22%.

Members of Brazil's special revolutionary tribunal resign after disagreements with govt.; Pres. Vargas undecided on accepting resignations.

Several revolutionary factions in Peru agree military junta that siezed power Thursday will name D.S. Ocampo as President.

Gramophone Co. announces development of new television system based on known principles; pictures are projected onto 24 by 20 inch screen, and definition is so good even the finest details are visible, such as license plate numbers in street scenes. Officials stress production isn't planned now.

K. Hogate, Dow Jones & Co. GM, describes operation of their vast news organization. Financial news tickers operate constantly while markets are open; a worldwide organization of hundreds of correspondents feeds information to it over leased wires, often within seconds of events. Supplementing this is a corps of expert reporter-analysts, whose work appears in the Wall Street Journal and in bulletins delivered by messenger every 20 minutes through the day. Many of these analysts are more experienced in their industries than the executives they cover, and are often looked to for advice by those executives.

Rainfall in NY City watershed has partially relieved water shortage, though summer rationing is still possible.

NY Police Inspector McNeill says Harlem policy [numbers] "racket" has fallen 90% since Stock Exchange began issuing volume figures in round numbers.

One of London's most powerful transit officials is the "fresh air dictator." Each morning he sticks his head out the window, takes a deep breath, and decides whether all the streetcars that day will have their windows locked shut, halfway open, or fully open.

[Opposite of double indemnity dept.] Unusual insurance case took place in Germany recently. S. Meister, prominent business man, took out a $250,000 insurance policy and paid a higher premium to have a special clause inserted to pay off in event of suicide. A year later, his company went bankrupt. In desperation, Herr Meister came up with a brilliant idea: he went back to the insurance company and demanded $125,000 or he would kill himself and make them pay the full amount. The manager, who knew Meister to be a man of his word, thought it over for a day and then paid out.

Market commentary:

Market wrap: Stock market opened with oils under pressure; however, bear attempts to extend reaction to general list met stubborn resistance. Rallying spread slowly through the list; motor shares were in demand, with Chrysler and GM hitting 1931 highs; GE was also strong, while trading favorites scored sharp gains. Rally picked up steam in late afternoon, with utilities showing outstanding strength. Bond trading less active, prices mixed; US govts. dull, steady; foreign slightly irregular but S. American up sharply; corp. high-grade steady, speculative unsettled on sharp break in movie co. bonds. Commodities weak; grains off slightly; cotton down substantially. Copper now selling at 10 1/4 - 10 1/2 cents, with larger producers holding at the higher price. Silver continued up to 29 cents; Chinese and Indian currencies rose.

Market observers cautious; most advise against going short, but on the long side recommend buying only standard stocks on reactions, and using stop-loss orders. Conservative observers believe stocks may have recently been passing from strong hands that bought during liquidation late last year, to weaker speculative holders; advise caution.

Bulls encouraged by reports of improving business, particularly in New England and Southeast, relayed by Col. A. Woods, chairman of President's Employment Committee. Favorable reports received from New England textile, leather, and shoe industries. Hide market has strengthened, which historically has foreshadowed general business revival. Sharp rally in silver seen as hopeful for world trade, due to strong effect on buying power of India and China.

Stock movements in the next few days should indicate whether the setbacks since Feb. 24 have been a period of consolidation before further gains; it's encouraging that support seems to have developed for industrials about the 180 level; it would be favorable if rails can hold support at current levels, which are still in the range of a technical setback from the Feb. 24 highs.

Contrary to predictions that dividend cuts had been largely discounted, some recent dividend cut announcements have caused considerable liquidation; brokers now advise avoiding stocks whose dividends are in doubt.

Success of Treasury and NY City bond issues likely to lead to bond offerings by many corporations that have been waiting for favorable conditions. Some signs reported of increased activity in commercial paper market; seen as forerunner of industrial recovery;.

Broad Street Gossip: Natural gas industry now represents $4B of investment and growing. Within memory, Pennsylvania steel mills were forced to abandon natural gas because fields in the area “were playing out.” At that time, there were a few hundred miles of pipeline in use; now there are 94,162 miles. Estimates of the remaining life of copper mines have fluctuated drastically. “Yet, production ... has been growing year after year, and engineers have quit estimating.” About 30 years ago, scrap iron was hardly used; now, it contributes about as much as iron ore to manufacture of steel.

London Times financial editor argues US not doing its share of foreign lending; only 15% of capital raised in last 10 years loaned abroad vs. 48% by Britain.

Editorial: New Farm Board chair. Stone's declaration of unchanged policy, while it has the virtue of frankness, confirms the Board will continue its hugely expensive and misguided efforts. In addition to well-documented blunders in trying to fix prices, the Board now is trying to impose an untested system of cooperative marketing on the fallacious assumption this will reduce costs compared to the current private, competitive system.

Nebraska bankers say livestock farmers in good financial shape in spite of lower prices, since price of feed declined more drastically.

H. MacLean, US rep. of Int'l Chamber of Commerce, says Italy's condition fundamentally sound; depression has caused severe strain, but conditions compare favorably to other countries.

J. McLeod, Bank of Nova Scotia GM, says in 5 years up to 1929 US and Canada workers attained living standard unequaled by mass of citizens in any country.

Economic news and individual company reports:

Treasury Dept. report bank failures sharply lower since record 344 with deposits of $407.3M in Dec.; Jan. failures were 197 with deposits of $91.4M, and Feb. will show less than 80, with deposits less than $45M. Record bank failures in 1930 have caused trend of moving deposits to larger banks.

J. Broderick issues statement on Rosoff plan for Bank of US reorganization with aim of repaying depositors in full: has communicated with plan organizers, emphasized importance of depositors' safety; if requirement can be met, reorganization would be best outcome; in meantime, orderly liquidation will continue.

Over $170M of bond offerings will be made today, including long-awaited $70M NY Central RR, $66M Port of NY Authority, and $50M Pennsylvania RR.

Firms participating in most bond offerings 1927-1930: National City $4.9B; Harris, Forbes $4.7B; Guaranty $4.1B; Halsey, Stuart $3.5B; Lee, Higginson $3.3B.

Large increase in short-term loans from US to foreigners reported in 1930; net export of short-term capital was $433M vs. previous record of $226M in 1928.

Dec. operating income of 103 telephone cos. was $20.9M vs. $24.2M in 1929.

Cotton textile prices have shown slow but distinct firming since start of year, finally responding to yearlong curtailment program. Industry optimistic on continued improvement, though profit margins generally haven't benefitted yet due to rise in raw cotton.

Fed. Reserve's recommendations for banking reform probably won't be publicized until Glass committee reconvenes.

Bank for Internat'l Settlements says European conditions demand restarting market for long-term bonds, setting up facilities for conversion of short-term to long-term debt as well as transfer of capital from centers where it's abundant to those where it's scarce. Approves Spanish stabilization plans. German stocks gain on anticipation of increased German access to long-term credit. England seen in favor of starting new bank to sponsor long-term int'l credits; France lukewarm.

Sweden takes lead in loans to Germany, passing US with $124.5M.

Since prewar year of 1913, British imports rose 30.3% to 1.002B pounds, while exports rose only 2% to 536.1M pounds.

Canada report: S. Logan, Canadian Bank of Commerce GM, reports industrial operations in Canada expanding slowly and irregularly. Jan. power output averaged 47.9 GWHr daily, vs. 50.2 in Jan. 1930 and 48.6 in Jan. 1929. Mineral production in 1930 estimated at $278.5M, down 10.4% from 1929 record high.

Irish sweepstakes, organized by govt. for charitable purposes, proving enormous financial success with money flowing in at $750,000/week.

Texas Corp. wins far-reaching ruling allowing cos. that lease oil-producing property to curtail production even though it reduces owner's income.

Grand Union Feb. sales $2.635M, down 4.2% vs. 1930; Interstate Dept. Stores $1.347M, up 2.9%; Safeway $15.782M, down 7.2%.

Motor boats registered in US as of Jan. 1 were 248,448 vs. 241,040 prev. year and 130,826 in 1920.

Companies reporting decent earnings: Sierra-Pacific Electric, Nat'l Dairy Products, Mesta Machine (steel industry equipment), Grangeberg (iron ore, Kreuger & Toll holding).

Movies:

The war drama has been in fashion in both US and Europe cinemas for years, though not on Broadway. First US success was The Big Parade, leading studios to order “anything that has a war angle.” Now, however, the war film is waning in Europe. While film sponsors blame this on politics, and many films have in fact been subject of protests and banning in various countries, popular taste has also shifted. “European cinema, which once took itself so seriously, now wants to laugh. Antiquated Chaplin films are now being revived ... and the latest French talkies are going in for smart comedy and romance.”

Jokes:

'Come and have a round of golf.' 'I'm afraid I can't. You see, I'm in half-mourning.' 'Oh ... well, how about nine holes?'

Innkeeper - Game of billiards, gentlemen? Guest - I don't know. These balls are so dirty I can't tell the reds and whites apart. Innkeeper - Oh, that's easy. You soon get to know 'em by the shape.

Monday, March 9, 1931: Dow 183.85 +4.12 (2.3%)

Assorted historical stuff:

Washington report: Die-hard legislators seem to be having difficulty saying goodbye after Congress adjourned Wednesday; some have recognized a sudden deficit of Washington news and "have remained in the Capital ready to furnish statements to all comers," while others have filled their time extending their remarks in the Congressional Record; in particular, "Senator Heflin, of Alabama, occupies more than two pages with messages sent to him telling them what a valuable public servant he has been." Supreme Court to decide major case on constitutionality of anti-chainstore laws. As of Jan. 1, 10 states had enacted such laws and 21 more were considering them; much litigation concerning the laws is ongoing. The case before the Court is from Indiana, where one L. Jackson claimed that with 225 Standard Grocery Co. stores, he was paying a license tax at a rate 1,800 times that of single store owners. New Farm Board chair. James Stone seen likely to maintain policies similar to departed chair. Legge.

Editorial: Sen. Borah's call for US to recognize Russia is similar to the Senator's inviting a pyromaniac into his home and telling him where the matches are. Sen. B. Wheeler (D, Mont.) says US will benefit greatly if Soviet 5-year plan succeeds, despite alarmist reports; increase in buying power would benefit US industry.

Canadian govt. activates restrictions against Russian imports, targeted against raw materials produced by Canada's leading industries including coal, lumber, etc.

Gov. Roosevelt says he believes unemployment insurance will be adopted throughout the country in the coming generation. Editorial by T. Woodlock: Trouble with most of the major unemployment insurance systems tried so far is that reserves have proved inadequate; as a result, govts. of England and Germany have been compelled to advance enormous sums to continue payments. It's apparent we don't have nearly enough information to set premiums for this insurance. Another issue is distributing burden of the necessary premiums; by fairness it should be distributed widely as possible, for example by adding the premiums to cost of products.

Editorial: US oil industry would benefit immensely from agreement to restrict production, but antitrust law stands in the way. Until Congress meets again, the "long-suffering small oil producer" can't hope for substantial relief. C. Ames, Texas Corp. VP, advocates change in antitrust enforcement rather than law, by which questions of possible violation “may be determined before, instead of after the event, so that business men who desire to obey the law can tell in advance whether their proposed conduct is or is not a criminal offense”; Congress should give some govt. agency the authority to make these determinations.

The Japanese Red Cross has taken note of some grim life expectancy statistics; men in Japan live an average of 42.06 years and women 43.20, vs. a US life expectancy of 49.86 for men and 53.24 for women. The Red Cross has opened an exhibit in Tokyo featuring educational material on diet, exercise, and clothing.

British army cost for coming year estimated at $199.7M, down $2.9M; air force $90.5M, up $1.3M; French air force $90M, up $7M.

US idea of installment buying has caught on with a vengeance in Poland; "even a pair of shoes is now commonly bought with a series of promissory notes." Many of these notes default when coming due, and courts have become clogged with the resulting cases.

Trading on Amsterdam Stock Exchange floor temporarily halted by knife fight; participants taken to hospital; stock prices unaffected.

Market commentary:

Market wrap: Stocks "acquitted themselves creditably" in short session. Opening brought continued selling in many sections, with US Steel hitting a new low on the current reaction, and Auburn again down sharply. However, selling dried up once accumulated overnight orders were absorbed, and rallying spread through the list; leaders quickly rose above Friday's closing prices, and utilities resumed their uptrend. Bond trading moderately active; US govts. dull, slightly lower; foreign govts. active, generally higher; corp. high grade steady, convertibles weaker. Commodities mixed; grains firm; cotton off moderately. Small sales of copper reported below 10 1/2 cents.

Week in review: Stock rally ran into resistance, with rails particularly weak, causing some concern over similarities with the false 1930 rally. Reaction thus far hasn't run beyond technical bounds; movements in next week will be closely watched. However, fundamental situation still seen favorable for long-pull purchase of standard stocks. Bond market featured very successful Treasury and NY City sales and strength in high-grade issues generally. Foreign bonds in particular rallied very strongly across the list. Speculative and convertible issues showed some weakness along with stocks. Money market slightly firmer, but it's believed this was due to temporary factors. Business demand for credit appears weak, and banks intent on liquidating both security and commercial loans. Fed. Reserve maintains large holdings of govt. securities. Steel continued slow improvement. Grains fluctuated narrowly close to season lows. Cotton declined moderately at week end. Silver up sharply on optimism regarding India; Chinese exports also reportedly picking up. Berlin stocks strong on more confident political tone.

Conservative observers cautious; advise against trading favorites; "more discrimination should be used now than ever before by those who desire to purchase."

Bears are expected to launch "further vigorous drives" after their success of last week; strength of support that comes in will determine results; it's encouraging that the Jan.-Feb. rally was accomplished without overall increase in brokers' loans, implying it was largely due to outright buying rather than marginal speculators.

Since start of Feb., brokers' loans have increased slightly while loans to non-brokers have declined. This may be a warning signal since non-broker loans are generally thought to represent smarter money; also, this pattern occurred during the spring 1930 rally. However, in late 1921 - early 1922 this pattern was followed by a strong stock recovery.

Bear forces were helped last week by some grim earnings news. Declining rail traffic and earnings led to dividend cuts and questions about safety of dividends at some major rails including NY Central. Leading steel cos. including US Steel and Bethlehem operated around breakeven for Jan. and Feb. This kind of news may cause considerable "flopping around" until earnings improve, but "main trend of stock prices should be upward over the greater part of the year." Conditions of marked uncertainty are typical at this point in the business cycle; bad news should disturb stocks less in this liquidated market. While upturn in profits may be postponed, important interests are confident next change will be upward; they should therefore come in to accumulate stocks on any sizable decline.

Broad Street Gossip: After strong rally starting the year, market was due for technical correction regardless of business developments; large part of decline due to short selling. Utilities are back in favor after adjournment of Congress. Not so many years ago, people were startled when a Congress appropriated $1B; now, little comment is heard about our $10B Congress. Total US wealth estimated at $350B, about 1/7 of which is in 24 of the largest corporations.

Editorial: While labor leaders have every right to take satisfaction from the relatively few wage cuts now compared to previous depressions, has it occurred to them that there may be cause and effect between high wage scales in construction and two-year decline in that industry?

Very strong demand for Treasury bond issue took bankers and govt. officials by surprise; the $500M 10-year 3 3/8% issue was oversubscribed about four times, and it now appears that in spite of the veterans' bonus commotion the bonds could have commanded a better rate. Some bankers anticipate inflation as a result of the financing, since proceeds will be paid to veterans who are likely to spend it; "whether such inflation will be of permanent benefit remains to be seen." F. Ryan, Nat'l Cash Credit Assoc. VP, estimates veterans will borrow $700M this summer, but about half will go to pay off personal debts; estimates total personal floating debt in US at $12.4B (includes debts to retailers, loans on insurance, personal loans, etc).

Economic news and individual company reports:

Dominick & Dominick note some disturbing long-term trends in state and local taxation. While Federal taxes declined from $4.905B in 1921 to $3.364B in 1928, state and local taxes increased from $3.933B to $6.095B, increasing the total annual tax burden by $621M. Much of the state and local tax bill is due to construction and essential services, which have grown in reasonable proportion to population; however, other spending has increased much more rapidly than either population or income. In addition, spending has outpaced even increased taxes, leading to a large increase in debt; net local govt. debt went from $7.264B in 1922 to $12.579B in 1928.

Conference of NJ state officials and bankers proposes legislation allowing for bankruptcy committee as only solution for North Bergen's tangled finances.

Some evidence is accumulating of “quickening pulse of the automobile trade” in the Detroit area, including reports from dealers and from rails serving the auto industry. A considerable amount of veterans' bonus money is reportedly going into cars.

Commerce Dept. reports $11B worldwide building program was set in motion in 1931 to relieve unemployment, with US accounting for two-thirds or more.

Fisher's wholesale commodity index was 76.0 vs. 75.8 prev. week, first increase since Dec. 5 week.

Youngstown district steel production to rise 2% to 50% this week.

Oil industry is cutting expenses drastically, and executives believe further immediate readjustment is needed; first quarter earnings will be poor. Okla. Gov. Murray asks Standard of Indiana to revoke oil purchasing price cuts; says state Corp. Commission has revoked increase in allowed production indefinitely. Standard of Indiana blames Okla. producers for selling oil more cheaply to their competitors; says can't continue to pay higher prices for oil; calls for fair and united action by all producers. New East Texas production gaining rapidly; for week ended Mar. 5 was 57,000 barrels/day vs. 33,900 Feb. 28 and 25,300 Feb 21. Union Oil of Calif. announces drastic cut in crude purchasing prices averaging 50 cents/barrel to below $1; other major buyers expected to follow.

Venezuela oil production in 1930 was 134.8M barrels vs. 136.6M in 1929.

Rails set an efficiency record in 1930, using avg. of 121 pounds of fuel to haul 1,000 tons (including equipment) a mile; this was 4 pounds under the prev. record.

Walgreens Feb. sales $4.146M, down 1.5% vs. 1930; National Tea $6.068M, down 10.7%; J.C. Penney $9.540M, down 14.8%.

J.I. Case another farm machinery company to report a sharp increase in notes receivable, up almost $6M to $21.9M at year-end.

Companies reporting decent earnings: Middle West Utilities, Foster Wheeler (engineering/power), Ulen & Co. (engineering/construction), Hershey Chocolate, Selby Shoe.

Movie:

Dishonored - Third collaboration between Marlene Deitrich and Joseph von Sternberg falls short of The Blue Angel and Morocco, but is nevertheless suspenseful and strikingly photographed; Dietrich plays the alluring X27, a spy sentenced to death for allowing an enemy officer to escape. However, while Miss Dietrich is remarkably effective as a movie personality, it becomes clear she's "lacking in technical finish as an actress"; main weakness is apparent inability to end a sentence with anything other than a question mark.

Jokes:

Scotsman 1 - That's a poor blade you've got on your safety razor. Scotsman 2 - Well, it was good enough for my father and it's good enough for me.

Teacher - What is your father's occupation? Boy - He's a worm imitator. Teacher - What do you mean? Boy - He bores holes in furniture for an antique dealer.

"'What is a baby?' 'Usually a peach, sometimes a lemon, now and then a pear.'" [get it? pear ... pair ... ]