Friday, March 27, 1931: Dow 181.70 -2.50 (1.4%)

Assorted historical stuff:

Editorial: Gov. Roosevelt makes a good case for immediate action to protect thrift accounts in commercial banks. To review, commercial banks were allowed to enter the savings account field, but for consumer protection were strictly forbidden to use the word "savings"; they substituted "thrift" but effectively offered savings accounts. Recent commercial bank failures have shown "glaring defects" of the system, sticking savings depositors with unsalable assets. NY Legislature has shown a tendency to favor commercial banks, recently blocking similar protective proposals and also maintaining heavier taxes on savings banks. "If the savings banks have no longer a useful place in the community perhaps the Legislature can find a more direct method to destroy them."

NJ Traffic Commission reports US deaths from motor vehicle accidents in past 18 months were 50,900, compared to war casualty list in 18 months US was engaged in World War of 50,150.

World wheat conference has assembled in Rome to study methods for meeting the world wheat crisis; 46 countries in attendance; US represented by an observer. Conference is preparatory to a second conference, date of which will be fixed during the current conference.

Cabinet level employment stabilization board is being organized as specified in Wagner unemployment bill; consisting of Secs. of Treasury, Agriculture, and Labor, will report to Pres. upon approach of business depression, ask Congress for additional appropriations to increase public works.

Washington report: Govt. will take all available steps to avoid raising tax next year. Farm Board's decision to end stabilization should offer a large saving; another big item could be closing postal deficit, which would require Congress to raise rates; a number of small savings could also be made. However, the future deficit picture will depend on extent of economic recovery. If deficit at end of year substantially exceeds $410M sinking fund payments, a temporary tax hike is likely.

J. Aird, Canadian Bank of Commerce pres., says world has enough gold overall but suffers from maldistribution due to “rampant nationalism” and unwillingness to loan abroad; suggests pooling of world gold supply, changes in monetary policy by US and France, and aid for exploration and prospecting.

German ambassador assures Sec. of State Stimson proposed Austro-German union is purely economic, not political.

Editorial: Demand for some modification of antitrust laws is increasing. One proposal supported by both the Nat'l Assoc. of Mfrs. and the Amer. Bar. Assoc. would allow submission of proposed industry measures to the FTC; approval would still leave measures open to legal challenge but would exempt participants from severe penal provisions. This would be worthwhile, but in the meantime, business must get along for a least a year with law as is; recent Supreme Court decisions have made law less restrictive than commonly supposed, giving opportunity for business "to obtain a higher degree of rationalization" that shouldn't be neglected.

Editorial by T. Woodlock noting British govts. somewhat different attitude toward rail competition; Royal Transport Commission advised rails to stay out of highway transport, pool traffic between competitive points, and confine efforts to developing their own territory; “It is easy to imagine what would happen if the ICC ... were to make a similar recommendation.”

Illinois legislature passes bill to repeal state Prohibition enforcement and search and seizure acts.

IT&T demonstrates revolutionary new facsimile transmitting machine able to send 120 printed pages per hour.

Richest man in Spain is “plunger” Juan March; a few years ago, when Spanish dictator de Rivera gave March a tobacco monopoly, he frankly mentioned that the award had been criticized because of March's past smuggling endeavors, but said March had gone through a process of purification through his sacrifices for Spain.

Artists have felt the depression sorely; demand for pictures and portraits is down. Many have had to turn to commercial art, though even that is being reduced by use of photographs. One bright spot is trend for fashionable apartments to have pictures or outdoor designs painted on walls; this work pays up to $100/day.

Recently the German Society for Protection of Children was startled to learn of numerous children being offered for sale at $750 to $1,000. Officers of the Society found cause was a rumor that a film company wanted child actors; they had great difficulty convincing the "speculators in childhood" that this traffic in humans was illegal and that in any case no film company would pay more than a nominal salary for even the most exceptional child actor.

Market commentary:

Market wrap: Stocks advanced early but ran into resistance; weakness developed in coppers following Anaconda dividend cut; reaction widened, as leading industrials were attacked by bears and declines spread across the list. Support developed in the last hour, slowing the decline; tone was steady at the close. Bond trading listless, prices heavy; US govts. slightly lower; foreign govts. unsettled by sharp break in Australian issues, S. American also very weak; corp. generally lower, utility issues steady. Commodities mixed; grains fluctuated with wheat ending mostly higher and corn lower; cotton slightly lower. Copper remained at 10 cents, foreign buying active but domestic quiet.

Conservative observers lost what little cheer they had due to inability of market to sustain rally; most advise sidelines until market indicates definite movement.

Several other factors unsettled the market, including: rise in call money; pressure on oil shares due to production increase and East Texas situation; alcohol price cut from 35 cents/gallon to 24 cents; reported price cutting in packaged foods; and US Industrial Alcohol weakness due to dividend nervousness.

Market observers note leadership has been confined to trading favorites, while usual leader US Steel hasn't been doing much; a rally by US Steel would probably have a strong influence on public buying. Brokers report short interest has declined due to covering in recent sessions, particularly in trading favorites subject to pool operations. A new bull pool is reportedly active in Vanadium, involving some who were formerly bears on the stock about 30 points lower.

Broad Street Gossip: Some prominent NYSE brokers are now taking a more bullish position on oil shares, though news from that industry is anything but encouraging. However, this doesn't mean they're wrong: “conditions could hardly be any worse than they are, so the turning point may be close at hand.” Two views on dividends: “Payment of regular dividends by a big, well managed company in the face of deficits is almost sure proof that the management is not afraid of the future.” On the other hand, “Relative to dividends, it is not so much a question of what certain corporations can pay now, but what they can pay a year from now.” The Old Timer notes the market's “digestive organs” are much stronger then last year as seen in response to bad news; a head of one brokerage notes “liquidation is over”; stocks go down in response to bear pressure, but as liquidation fails to appear, they go back up.

Frazier, Jelke point out that stocks making new yearly highs continues to outnumber new lows; "so long as the averages remain in a meaningless trading area, we are inclined to pay more attention to the number of new highs and new lows ..."

Calvin Bullock comments on managed investment trusts [similar to mutual funds]: British trusts have been miuch better managed than US; best yardstick for measuring trusts is comparison of liquidation value with market averages over a long time; managed trusts, while out of favor now, will eventually recover.

Transamerica [investment trust co.] announces J. Bacigalupi succeeds A. Giannini as pres.; Mr. Giannini says he has wanted to retire for some time, but “in the interest of the corporation I have remained as president through the most acute period of the business depression, from which I feel we are now clearly emerging.”

P. Litchfield, Goodyear pres., says regrets unable to report noteworthy improvement in tire industry. Company seen unlikely to earn dividend in first quarter.

Future foreign financing seen likely to be by direct investment through “large American interests,” due to current difficulty of selling foreign bonds to US investors.

W. Gifford, AT&T pres., defends past overly optimistic govt. bulletins on business, says they prevented panic: “If there were not more optimism in the bulletins than the facts warranted, it would, I think, be the first time that a compilation from business sources for publication was free from this bias.” Average American believes business conditions are partly psychological and so shades statements optimistically; “moreover, he knows that to make a gloomy prophecy in public will earn for him the dislike of the business world.”

Economic news and individual company reports:

Anaconda cuts annual dividend rate to $1.50 from $2.50. NCR omits dividend on class A stock.

First 39 rails reported Feb. net operating income down 46% from 1930.

Fed. Reserve reports money in circulation Mar. 25 down $15M to $4.547B, total Reserve Bank credit outstanding down $49M to $858M. Member banks in NY City report brokers' loans down $5M to $1.908B; loans on securities to non-brokers down $16M to $1.830B.

Call money rate increased to 2%, though bankers indicated this was due to temporary factors and should ease in a few days.

Dow average of 8 iron and steel products declined to $44.23/ton vs. $44.50 prev. week due to decline in sheet steel; new low for 1931; 1930 range was $44.29 - $49.88.

Wall Street was encouraged by news from Manchester, NH that a big textile firm had to advertise for workers for the first time in several years; textile mills and a number of the largest shoe plants there were operating at full capacity.

Texas Railroad Commission meeting on oil proration; expected to limit new East Texas area to 50,000-70,000 barrels/day; former Gov. Moody says curtailment would be accepted in the area in return for restrictions on imports.

500 striking workers and sympathizers riot at Sidney Blumenthal textile plant in Shelton, Conn.; crowd subdued with tear gas and clubs after attacking five guards brought in to protect outside workers.

Total value of US mineral products in 1930 was about $4.8B, down 18% from 1929; metallic products $985M, down 33%. Both price and volume declined for almost all products.

Chile per capita exports in 1929 were $63 vs. $42.70 for the US; imports were $44 vs. $35.90. Chile seen likely to raise tariffs by large percentages, including 20%-250% on cars, 250% on tires, 100%-500% on machinery, 70% on sugar, etc.

Foreign currencies reversed yesterday's decline; sterling continued gain vs. franc; silver-based currencies stronger.

Australian state of New South Wales reportedly plans to maintain bond interest payments in US but default them in London until Britain renegotiates debt; all Australian bonds down sharply.

Bank of England was able to replenish gold in the open market in past 2 weeks, increasing holdings 2.789M sterling to 144.5M. However, reserves are still below the desired “Cunliffe minimum” of 150M, and the Bank still is withdrawing credit to maintain higher bill rates in London. British Building Trade Council decides to continue current work agreement for a semester, in victory for workers. British rail workers accept arbitration committee decision.

French steel production in Feb. was 693,000 tons vs. 746,000 in Jan. and 772,000 in Feb. 1929.

Tourist spending in Canada was $280M in 1930, down $28M from 1929.

G. Swope, GE pres., denies reports company plans to go on 5-day workweek and reduce wages and salaries 10%. While GE 1930 sales were only down 10% from the 1929 record high, backlog entering 1931 was only $56.1M, and new bookings in Q4 1930 only $74.2M; both of these were the lowest in over 5 years.

Amer. Tobacco reported record 1930 earnings of $8.56/share vs. $5.76, and have predicted another record for first-half 1931 earnings; stock hasn't done much in response, currently about 116 vs. 1931 range of 104 - 120 1/2. Amer. Ice stock about 30, annual dividend $3, net in 1930 $3.93/share vs. $4.22 in 1929.

Compania Swift Internacional (S. American beef exports to Europe) reported record earnings for 1930; earnings stabilized after a trade agreement was put into effect in 1927 dividing the market betweek packers.

Companies reporting decent earnings: Bangor & Aroostook RR (against industry trend), Metropolitan Paving Brick, Bohn Aluminum.

Movie:

Dance, Fools, Dance - Thrilling melodramatic vehicle for Joan Crawford, playing girl who becomes newspaper reporter after her family loses its wealth in the market crash. Loosely based on murder of Jake Lingle, Chicago reporter, by gangsters; builds to breath-taking climax. Other outstanding performance in the picture is "work of Clark Gable, a relatively new personality on the screen," playing Jake Luva, gang chief who orders reporter's murder to suppress story of the massacre of six rival gangsters.

Joke:

'How was the prohibition lecture?' 'Great, except the lecturer tried to blow the foam off his glass of water.'

Employer - Yesterday you took the afternoon off, on the plea that you were ill. Yet, I saw you at the races and you didn't look at all ill to me. Worker - Ah, you should have seen me after the fourth race.

Thursday, March 26, 1931: Dow 184.20 -1.80 (1.0%)

Assorted historical stuff:

Editorial: Nicholas Murray Butler recently noted the lack of leadership in political life, blaming it on our electoral system and concluding the best leaders were now to be found in science and industry. On the other hand, John Dewey recently bemoaned the "bankruptcy of 'industrial' leadership"; if both of these are correct, "we simply have no leadership anywhere." One explanation may lie in the observation of Alfred North Whitehead that "mankind is now in one of its rare moods of shifting its outlook," replacing the "mere compulsion of tradition" with a new vision of the world, with "elements of reverence and order" but based on "unflinching rationality." If this is what's going on, leadership may well be in upheaval for the moment; but perhaps "leaders of tomorrow are even now preparing to emerge from the crowd."

Turkish Pres. M. Kemal issues manifesto announcing govt. reorganization along Fascist lines.

Dr. C. Duisberg, Federation of German Industries pres., says reparations payments ruinous to both creditor and debtor nations, US could give world a new period of prosperity by writing down war debts. However, warns against hasty measures to cut debt; recommends campaign to convince US of need for readjustment.

M. Gandhi's truce with Britain faces test today as All-India Nationalist Congress votes on the agreement. Gandhi has faced some opposition from disgruntled nationalists; an angry mob gathered on his arrival in Karachi and had to be held back by police, and the "diminutive leader" was attacked with a flagpole by a former follower Wednesday. However, the Congress is expected to approve the truce, as loyalty to Gandhi should prevail. Troops were dispatched to Cawnpore to quell riots between Moslem and Hindu nationalists.

French Foreign Min. Briand says Austro-German agreement may be referred to League of Nations council. French foreign office announced Britain and France asked delay in union to allow council to consider the situation at session in May.

At European Union Commission meeting, Italy demanded admission for Russia to all future economic sessions; other delegates opposed. British Foreign Sec. Henderson said Britain would endorse economic federation but oppose any political union.

Washington report: “Vocal element among the farmers, talking through their powerful lobbying organizations,” will probably push for further relief measures at the next Congress in Dec. However, outcome is uncertain; farm conditions may improve before then, and the tax-paying public, facing a second large deficit, may be aroused by the huge amount already spent by the Farm Board. Finally, it's not clear what additional measures could be agreed on by farm groups and passed into law; the debenture [export bounty] has drawn warnings from foreign govts., while the equalization fee is opposed by the President and a sizeable chunk of Congress.

Editorial by T. Woodlock disputing charges made by Judson King that temporary govt. takeover of rails during the World War was necessitated by rail owners' “selfish effort to gain greater profits,” and that their return to private ownership after the war involved a large “raid on the treasury.”

Bell Labs television set now being demonstrated uses long known principle that eye retains image object flashed before it for about 1/8 second. The system transmits 90,000 tiny partial images/second, with 5,000 making up a complete image, so that 18 complete images are sent per second.

At a recent get together of Henry Ford, Harvey Firestone, and Thomas Edison, Ford was able to do six chin-ups in a row, but his old friend Firestone couldn't pull himself up once even with Ford spotting him. Edison begged off, probably a wise choice since he's 83 while Ford is 67 and Firestone 62.

US Steel has grown tremendously since being founded 30 years ago. It's therefore interesting to find statements by two of the founders at the time, Andrew Carnegie and Henry Frick, advising investors to stock with bonds rather than taking chances on common or preferred stocks.

Richest man in Lithuania is industrialist Richard Tillmanns, but more famous is the second-richest, Zionist enthusiast and beer king Isser Ber Wolff.

The 40.5M words emitted by the recently adjourned 71st Congress would be enough for almost 540 novels of average length.

Plan introduced in NY Assembly for new $1.2B underground passenger rail terminal in Manhattan between 4th-5th Ave. and 16th-23rd St.; to serve all rails terminating in metro. area.

Working on the new NY City building code, investigators recently discovered an 1833 law still in force, requiring a man to be placed in the cupola of the watch house at Delancey and Attorney Sts. each night, his job to look for fires and, upon spotting one, to ring an alarm bell and hang a lantern out the window pointing toward the fire to direct citizens and firemen.

Market commentary:

Market wrap: Rails continued yesterday's rally in the early dealings. Market turned irregular after Westinghouse announced dividend cut at noon; Westinghouse sold off sharply, while industrials pulled back; however, support came in after a brief period and the market turned up again, led by impressive advance in American Can; also strong were McKeesport Tin Plate, Union Carbide, and trading favorites including Vanadium and Worthington Pump. Bond market dull; govt. and highest grade corp. mostly steady but other issues showed declining tone; Australian bonds very weak. Commodities firmed; grains substantially higher; cotton only slightly lower in spite of heavy volume. Copper remained at 10 cents; foreign buying heavy in past 2 days after price was lowered to parity with domestic.

Conservative observers more cheerful, but still advise buying only on technical reactions and accepting profits on rallies.

Editorial: Huge wheat surplus the Farm Board holds presents a problem now that they've abandoned stabilization; selling it would cause prices to collapse. Sen. McNary suggests the Board could keep the surplus for as long as 3 years; this may be the best choice now but is still likely to cause a huge loss. Storage for 3 years would cost 54 cents/bushel; adding original cost of about $1 and delivery charges of 20 cents, the cost in 3 years at the Liverpool market would be $1.74 vs. a current price of 62 cents there. What the price will be in 3 years is "something that not even the seventh son of a seventh son and born with a caul could foresee," but only a huge crop calamity would generate a profit for the Board. This should reflect on any additional "wild-eyed plans" for farm relief.

Grain trading circles decidedly more optimistic since announcement Farm Board would follow hands-off policy in 1931; trading is more active; operators who formerly saw nothing but depression "are now talking general prosperity," and in many cases backing their talk up by buying commodities or securities. CBOT directors vote to restore wheat trading to the largest of the four grain pits.

Heavy issues of new bonds are expected in April and May.

Goodbody & Co. note chain food stores have maintained volume in 1930, though profits were crimped by declining prices; chains have gained many customers from high priced independent stores due to the depression.

Market observers, while cautious, believe technical situation is considerably better than 1930; many investors are carrying little or no margin, and professional bears admit their efforts have not been successful at provoking much liquidation. Some observers expect a dull summer for business, and believe this may depress the stock market; fall should give more definite indication of lasting business recovery. While Wall Street bulls believe wage cuts would delay recovery, some industrial leaders say they may be needed in some cases due to commodity declines.

Slowdown in steel production recovery concerned observers; may indicate peak in March at close to current levels, rather than in April or May as most expected.

Broad Street Gossip: Demand for gold mining stocks including Homestead and Noranda is highest in many years; “in Canada, the gold fever is at its height” with millions of US dollars being invested in Canadian gold prospects. The Old Timer believes bears have overstayed their market just as bulls did in 1929; he's never known bears to make big profits two years in a row. “The man who goes on the theory that the country never can recover from a business depression always is wrong. And on each recovery, new high records are made ...” The margin man at one large NYSE broker reports serious depression in his line; he didn't send a single margin call out last week in spite of a somewhat down market.

Dr. D. Friday, economist, predicts 25% rise in manufacturing by end of year over 1930 level, another 15% in 1932, and end of depression in 1933; believes increased production at lower prices will stimulate buying. “With the downward adjustments in costs, the economic balance of the business machine has been restored and it can run at full speed on the new and lower price level.”

Economic news and individual company reports:

Westinghouse cut annual dividend rate to $4 from $5. B. & O. cut annual dividend rate to $5 from $7.

Fed. Reserve reports Feb. industrial production increased slightly more than seasonally; index of production in most important industries was 85 vs. 82 in previous two months, and 107 for Feb. 1930. Factory employment increased slightly less than seasonally, and payrolls more than seasonally.

Farm Board chair. Stone says that wheat growers' actions this year will be important factor in determining how Board disposes of surplus. Defends last fall's stabilization operations as needed to protect market and banks from sudden drop to 50 cents. Another announcement says Board will start selling wheat Apr. 1 at 82 1/2 cents, raising the price 1/2 cent every 10 days.

Treasury to take first step to meet veterans' bonus cash requirements by issuing $100M of 90-day bills.

Steel production uptrend faltered; week ended Monday was 57% vs. 56 1/2% prev. week, 54% two weeks ago, 73% in 1930, and 94 1/2% in 1929. Weekly steel reviews report more mixed picture than in previous few weeks; steel mills are reporting both production increases and decreases, and finished product and scrap prices are likewise reporting mixed trends; sheet steel in particular (used by automotive industry) is showing weakness; consumers seem unconcerned with reserving future requirements. Machine tool demand uneven, but inquiries good.

US electric output for week ended Mar. 21 was 1,663 GWHr, down 2.3% from 1930, vs. a 3.4% decline prev. week and 4.8% two weeks ago.

Rail freight loadings have been improving somewhat vs. 1930; for first 2 weeks of Mar., decline was 16.9% vs. 1930, while the decline for Feb. was 19.1%; loadings for the Mar. 14 week were highest in 1931. Final plan for Eastern rail consolidation reportedly will be presented to the ICC soon. A number of rate revision cases are hanging over the industry as a result of recent ICC order; most result from the 1925 Hoch-Smith resolution directing ICC to investigate rates with view to granting farm products the lowest possible rates.

East Texas oil producers and land owners say will fight any curtailment orders in court.

Rubber declines to record low in London market after important Dutch producers quit restriction plan.

Large shipments of Soviet oil and gasoline to Sao Paolo, Brazil have resulted in dramatic price cutting; Russian gasoline sells for equivalent of 25 cents/liter, while US and British sells for 32 cents. Argentine Foreign Min. warns country will be unable to export wheat in a few years due to Russian competition; suggests govt. organization for selling wheat similar to that in Russia.

E. Theodore, Australian treasurer, calls for abolition of required gold reserve and shipment of gold for debt payments; says Australia through with gold standard. Australian bonds plunged; banking circles, who have steadfastly opposed the Labor govts. program of inflation, believe the proposal may lead to change of govt. Most other foreign currencies also declined, with marks particularly weak.

GE has invested extensively in foreign electrical equipment makers through its International GE subsidiary, which as of end of 1930 has $204.8M in investments and is represented in every country in the world except the US and Canada (where Canadian GE operates).

NY State savings banks agitated over apparent delay of bill to equalize their taxation with that applied to commercial banks.

Gen. Amer. Tank Car may raise dividend after fifth consecutive year of record income in 1930; extensive food transport operations should help 1931 earnings.

US chewing gum exports in 1930 were over 500M “sticks or slabs” valued at $1.438M, and sent to “practically every part of the globe.”

Companies reporting decent earnings: Federal Light & Traction, Omnibus Corp.

Musical:

Appearing at the Palace - Debut of Dorothy Stone, singing and dancing star, is fresh and charming. Return of Vincent Lopez and his St. Regis orchestra; their new number is a modernistic jazz composition entitled Steel, "which tells a musical story of the importance of this metal in modern life." Burns & Allen contribute hilarity to the bill, along with "musical comedy baritone" J. Harold Murray.

Wednesday, March 25, 1931: Dow 186.00 +1.68 (0.9%)

Assorted historical stuff:

Editorial: Sen. Borah has recently opined "We should be legislating," calling for a special session of Congress based on report of over 6M unemployed. However, this figure wasn't that much of a surprise, and other recent news such as the increasing Treasury deficit would probably be studiously avoided if Congress was still in session. Much of the extra-session pressure is coming from bodies such as the People's Lobby, which says: "American business stands self-convicted and our traditional system of government large-scale doles to nearly every property and producing interest must give way to the needs of consumers." Groups like these "would put their hands into the public till, to distribute its contents according to the ideas of social justice held by those who indict all American business." A special session under such auspices would do nothing but harm. Delegation of Socialist and Liberal groups urges extra session of Congress to relieve unemployment through $500M dole fund; seeks audience with Sen. Watson and House Speaker Longworth.

Washington report: House and Senate leaders have been implying that tax hikes can be avoided due to improved business and by ending the sinking fund [paying down the national debt]. This is doubtful; this year's deficit will be about $700M, or $300M without the sinking fund, and dramatic increases in tax revenue are unlikely. "Like an individual, the government borrows more easily and more cheaply when it borrows moderately." When borrowing rises, so will interest rates; govt. has already been forced into too much short-term borrowing. Farm Board's statement was light on practical information about how it will carry out decision to stop stabilization and deal with huge surplus it holds. Considering political storm it has aroused, the statement may be "little more than an expression of hope."

Editorial: Gov. Pinchot's fervent assault on the electric power industry continues with his latest bill, the "Magna Charta of Pinchotism" calling for an elected power commission in Pennsylvania. This would invite utilities into the political arena and cause "tenfold more rate litigation. ... Even Gov. Pinchot's admirers must be puzzled to know whether it is effective regulation or a political issue that he wants." Editorial by T. Woodlock: An essential point for ensuring a fair test of govt. electric development, in the St. Lawrence case in NY and in general, is that the public power authority, while having some govt. functions and powers, shouldn't have access to the govt. taxing power, for example by having its bonds guaranteed by the state. This will allow a market verdict on soundness of the project. “Will that satisfy the advocates of public ownership? It will not - and we all know why.”

Moscow reports Soviet five-year plan target for petroleum production exceeded in third year; this year's total to be 27.5M tons, 6.7M above earlier estimate; production estimate for 1933 raised from 21M to 46M.

Austrian govt., in response to protests over customs union with Germany, invites all European nations to join. Union is to take partial effect Jan. 1932; ratification is required by both parliaments.

Richest man in France appears to be F. Coty, displacing Baron Rothschild; extent of fortune unclear, but it's estimated he made $50M from perfume manufacturing, and he has other interests including ownership of two of the best selling French newspapers.

Nat'l Air Transport and Boeing Air Transport to begin 31 hour direct all-air passenger service between NY and San Francisco on April 1.

A highlight of the huge Ford River Rouge plant is the system for rustproofing parts and distributing them to freight cars for shipment to the 36 assembly plants. A huge conveyor chain 1,800 feet long carries parts through an enormous chemical bath; the chain then runs parallel to the open doors of a long line of freight cars, each of which contains one or more men with lists of parts to be grabbed off the chain and loaded. Workmen call the chain the "clothesline."

The Nautilus, a submarine being prepared by Sir Hubert Wilkins to travel under the North Pole, will carry a GE refrigerator.

Metropolitan Life Ins. reminds customers there are more nonfatal accidents in the home than anywhere else, and the most common place for home accidents is the bathtub. Notes interesting US bathing trend - every night is now bath night, with only 1/7 of accidents occurring on Saturday and the rest evenly distributed.

Mexican doll menace - USDA inspectors find "brown spot disease" fungus on doll made of corn husks and silk.

Knute Rockne to join Studebaker as sales promotion manager; job won't interfere with coaching at Notre Dame but will require ending his work as stockbroker.

J.P. Morgan's yacht Corsair left Monte Carlo for Naples with Mr. Morgan and the Archbishop of Canterbury aboard.

New Irving Trust building at One Wall St. features 20 by 66 foot allegorical painting on ceiling of entrance hall depicting power of wealth to create beauty.

Market commentary:

Market wrap: Stocks opened weakly, with leaders declining early. However, selling dried up quickly and rallying tendencies cropped up about noon, led by major rails but quickly spreading to the general list; leading industrials scored good recoveries; shorts in Westinghouse and B. & O. were "thrown into urgent retreat" while Auburn advanced sensationally. Rally gained strength through the afternoon and market closed strongly. Bonds active, prices heavy; US govts. dull, slightly lower; foreign and corp. highly irregular, mostly lower. Commodities steadied; grain trading more active after Farm Board announcement, prices narrowly lower; cotton little changed. Copper now generally at 10 cents/pound; foreign buying more active. Silver up 3/4 cent to 30.

Conservative observers still cautious, believe market will stay in recently established range.

Bond weakness attributed to banking community disturbance over possible state law requiring commercial banks to segregate savings accounts.

Bears and bulls continue active contest; bears still fighting advances while bull pools reportedly intend to continue operations through first 10 days of April. Bears can look to two periods in the next month that may be tough on the market - dividend meetings by many major companies, and first-quarter earnings reports. Both of these will likely be generally unfavorable.

Bulls encouraged by market's ability to absorb bad news without "losing its equilibrium." The long-feared Farm Board announcement Monday passed without much disturbance in stocks. While upcoming earnings reports will likely be poor, much of the worst dividend news has already become public.

Shopping reports over the next two weeks will be followed with interest; better demand for seasonal good is expected, particularly since Easter falls early this year. Lower-priced chains, including Kresge, W.T. Grant, and particularly Woolworth, are expected to do best due to ongoing consumer caution.

Sugar shares strong. Producing countries to meet with T. Chadbourne in Paris on forming permanent stabilization commission. Major US refiners raise prices.

Aluminum Co. of America continued sharp rally, rising 15 to new 1931 high of 219.

Broad Street Gossip: Textile industry has been doing poorly for a decade or more; textile shares used to be popular since industry was country's largest in employment and in value of production. Poor showing attributed to "overproduction, foolish competition, and lack of stabilization." Recent improvement is encouraging; returning the industry to prosperity would greatly benefit the country as a whole. One thing to bear in mind when reading poor annual reports of industrials is that in many cases most of the earnings drop was due to inventory writedowns, not to earnings from operations.

Britain is understood to be reluctant on international silver stabilization conference; believes any agreement to curtail Indian exports would benefit producing countries at India's expense. Montagu Norman, Bank of England Gov., may discuss the issue on his upcoming visit.

I. Bush, Bush Terminal Co. pres., returns from six weeks European trip; reports economic conditions showed little improvement, but saw marked change in public confidence, strong undercurrent of optimism all over Europe.

P. Weld, NY Cotton Exchange pres., says reduced cotton planting and increased use will push up prices by Oct.

Economic news and individual company reports:

Gov. Roosevelt sends special message to Legislature advocating requiring commercial banks to segregate savings accounts; also sends appeal from Superintendent Broderick for $150,000 to appoint 30 additional bank examiners. Roosevelt's message drew onslaught from legislators accusing him of blaming legislative laxity for bank failures. Two Bank of US stockholders sue Broderick for $50,000 damages charging neglect of duties as banking superintendent.

Federal Farm Loan Board says a relatively small fraction of loans now on the books of Federal and Joint land banks were made when farm land value was highest.

Dividend announcements by Westinghouse and B. & O. expected today.

New NYSE stock listings in Feb. were $44.3M vs. $148.6M in Jan. and $725.7M in Feb. 1930, lowest total since Dow-Jones monthly record was begun; Feb. bond listings were $172.5M vs. $40.0M and $153.6M.

Rail freight loadings for week ended Mar. 14 were 734,262, up 10,728 from prev. week, down 16.6% from 1930 week, and down 23.4% from 1929.

Refineries ran at 64.3% in week ended Mar. 21; stocks of gasoline increased 937,000 barrels to 46.758M. Crude oil production in week ended Mar. 21 was 2.268M barrels/day, up 77,500 from prev. week but down 267,850 from a year ago. Majors cut gasoline price on Atlantic seaboard.

Structural steel orders for first 11 weeks of 1931, including the 125,000 ton "Radio City" order, were 440,000 tons vs. 340,000 in 1930; about 700,000 tons of new inquiry developed in the period, vs. 300,000 in 1930 and 500,000 in 1929, so about 260,000 tons of potential business was added. Trend of highway construction is to the overhead and underpass types to handle city congestion; these are heavy consumers of steel.

Nat'l. Industrial Conf. Board estimates US total wealth in 1929 of $361.8B was 32.8% over that of 1914 in constant dollars; this "represents tangible, physical assets only, excluding credits and securities." National income of $84B was 59.2% over 1914 in constant dollars; this "is the aggregate value of all commodities produced and services rendered to which a price is commonly attached." Top state in per capita wealth was Nevada, $6,318; bottom was Miss., $1,242.

Nat'l Assoc. of Real Estate Boards is waging attack on disproportionate local real estate taxation, advocating state income taxes as more equitable.

Peru likely to default on bond payment due Apr. 1, joining Bolivia as second S. American country to default in 1931.

Bank of England able to continue buying gold; has replenished holdings by about 2.2M sterling in past week.

Registered British unemployed Mar. 16 were 2.640M vs. 2.692M Mar. 9 and 1.622M a year ago.

Bank of Montreal reports Canadian external trade in Feb. was $95.9M, down 36% from 1930; unemployment still high but improving.

NY State and local tax bill in 1929 was $1.089B, of which $252.9M was for state use, and $634.2M for cities.

Four Boston banks cut rates on savings deposits 1/2% to 3 1/2% due to reduced yields on securities in which deposits may be invested; this follows the current trend in other financial centers.

US Steel in 1930 paid out $391.3M in wages and salaries, and $85.6M in dividends.

Chrysler March sales reportedly running about 50% over Feb.; shipments likely to reach 24,000 vs. 16,000 in Feb. and 10,000 in Jan.; shipments in Mar. and Feb. 1930 were 33,778 and 23,105. It's likely dividends are now being earned by a comfortable margin. Further improvement expected in April and May.

Middle West Utilities benefitted from wide diversity in territories served; revenue and earnings continued to grow in 1930, though at slower rate. “Other income” from financial operations and ventures into outside fields has become increasingly important, and in 1930 reached $11.4M, vs. $20M of “normal” income. [Note: Blew up in 1932.]

Paramount is launching aggressive talking picture production schedule, with 8 features now filming, 5 starting next week, and 3 being edited.

Companies reporting decent earnings: Houston Natural Gas.

At the galleries:

NY Art Dealers exhibition of over 100 old master paintings valued at $3M has generated tremendous interest among collectors. Dr. Valentiner, in the catalog introduction, notes that a European museum possessing this collection would be a must-visit, but they represent just a selection of those available; in fact, if all the treasures "in the possession of art dealers in the different European centers be brought together, one may question whether the aggregate would attain the proportions of the rich store housed within the few blocks around Fifth Avenue and Fifty-Seventh Street."

Movie:

Man of the World - Starring William Powell, a "great boon to the talkies," because he isn't suited to playing stereotypical hero roles; his portrayals are non-sentimental and realistic, with genuine human frailties. Latest Powell character is the suave blackmailer who earns his living "by his wits." While story has the customary love interest, played by Carole Lombard, writer Herman Mankiewicz is to be praised for "sacrificing the more comforting happy ending for the sake of credulity and common sense."

Jokes:

"Mistress - I shall want you to help at my dance on the fifteenth. New Maid - Yes, ma'am, I will arrange to have dancing lessons at once."

A stockholder's complaint regarding repeated dividend cuts: "Your dividend policy is like that of the man who cut off his dog's tail a little at a time to make the operation as painless as possible."

Tuesday, March 24, 1931: Dow 184.32 -0.92 (0.5%)

Assorted historical stuff:

Farm Board announced it will end support of wheat prices at end of May. Wheat plunged after announcement; futures for new crop months dropped below 60 cents, to lowest levels since 1895. Editorial: Farm Board's action is like carrying sick man across a river and dropping him midstream. Contrary to the Board's claims of benefits from their operations, farmers of other grains got no help at all and any benefit that wheat farmers received will be be obliterated by after effects of the policy, as they must "swim ashore by their own efforts." Sen. Nye (R, N. Dakota) says action may result in “serious calamity.” C. Gray, farm organization lobbyist, says expects next Congress to take action, possibly by adopting debenture [export bounty] plan.

Germany and Austria agree to create unified trade market; all duties between them to be abolished, and customs receipts pooled and divided; bordering countries invited to join as first step toward European customs union as proposed by Briand. France, Italy and Czechoslovakia warn proposed union violates existing treaties; British foreign office appears agreeable. Editorial: French charges of treaty violations are nonsensical. While we can't expect the French to be pleased at having the Germans "take a leaf from M. Briand's European confederation book and reprint it in Gothic characters," Briand himself has preached economic solidarity for so long that he can't reasonably object to this regional beginning. Whether this agreement was made in hope of political union "is beside the point. What really counts is that Europe is completing the peace."

Washington report: Capital gains tax, in addition to being inflationary for stock prices when prices are rising [since it inhibits sales] and depressing in recessionary periods, exerts the same effect on govt. revenues, reducing them at the worst possible times. However, action on revision is likely at least two years away, and if it is repealed some other levy will probably be substituted, such as one on transactions. Without minimizing effect of 6M unemployed, economic observers believe drought may be a larger factor in the depression. Drought hit after a series of poor years; many of those affected had no reserves to draw on, and there was little chance for occasional employment that a city worker could find. While unemployment reduced buying power, drought in many cases completely eliminated it. “First John J. Raskob wanted a coherent [Democratic] party organization. Now he wants a party platform written so clearly and concisely that it can mean only what it seems to mean. All of which goes to show that Mr. Raskob never has absorbed very much political tradition.”

House Speaker Longworth says believes govt. can cope with lower revenues without raising tax rates; predicts gain in business this year; amount allocated to public debt retirement could be reduced.

Another editorial by T. Woodlock on gold, responding to letters questioning the gold standard. It might be desirable and more reasonable to have other things as the ultimate basis for currency; it may even be true that most people take currency for granted without thinking about what's behind it, but when the world does think about it, "it clings to gold ... because it believes in it and wants it as it wants nothing else." People can't be made to accept something else by law; this was Bryan's error in attempting to make money of silver. "No legislative fiat ever yet has of itself made 'money' nor, in all likelihood, ever will it do so." One correspondent writes the gold standard is a "sad commentary on our ... civilization," reflecting our fear and distrust of each other. However, when you consider that each $1 in gold coin supplies the base for $8.50 of currency and credit, the "percentage of 'distrust'" is no worse than about 12%; "fair enough, all things considered!"

AFL pres. W. Green says organized labor will oppose attempts at wage cuts, and will take opportunities to compel employers to restore any cuts made. AFL to form committee to work for modification of Prohibition.

Treasury Sec. Andrew Mellon and brother Richard awarded medal by Amer. Inst. Of Chemists for distinguished service to science and profession of chemistry.

Some depression closings are welcome. One of the oldest and most famous London institutions, Pentonville Prison, is now closing for lack of "new accounts"; this makes the 22nd important British prison to close since the war. Future prison prospects look dim; only 10 murders were commited in London last year.

Oklahoma House passes bill prohibiting depiction of people smoking in most forms of advertising except newspapers.

Mr. and Mrs. Thornton of the Gunning River Poultry Farm, NJ, claim their hens have laid 15% more eggs since they put electric lights and radio in the henhouse.

NYSE firms note the value of clubs and organizations for gaining business; "many a large order has been obtained during the 'nineteenth' hole period at the golf clubs" or "during the 'chatty' hours at the big metropolitan clubs between 5 p.m. and 7 p.m."

Market commentary:

Market wrap: Stocks came under extensive bear pressure following Farm Board announcement, causing dips in leading issues, while stocks with suspect dividends continued down. However, the reaction was checked about noon, as trading slowed. Some rallying developed in the afternoon, and leaders had good-sized recoveries, while trading favorites including Auburn and Houston Oil ran up sharply. Advance faltered in last hour, and some irregularity developed, but leading issues generally held up well. Bonds mixed; US govts. higher; foreign dull, irregular; corp. highest-grade firm but speculative irregularly lower. Commodities very weak; grains down sharply after Farm Board announcement; cotton also suffered large decline. More copper available at 10 cents, though large producers continue to hold at 10 1/4.

Conservative observers cautious, believe inability of market to follow through on last week's recovery indicates new trading range has been established.

Aluminum Co. of America up sharply to new 1931 high after report of record 1930 production; A&P also hit 1931 high on good earnings expectations. Montgomery Ward seen having chance of breaking even or slightly better in first quarter, provided early-March Easter trade was good.

Some observers saw long-term benefits from the Farm Board decision, in a more “natural” price for wheat, and possible reduction in spring wheat planting. Public participation in the market is reportedly down substantially in recent sessions. A real and lasting upturn in general business will certainly be reflected in freight car loadings, though some students contend loadings won't improve for some time after the turn in business.

Broad Street Gossip: Bethlehem Steel shareholder protests at executive bonuses seem a bit ungrateful considering that Charles Schwab left US Steel to head Bethlehem when they were in grave difficulty, putting his $25M fortune at risk, a risk that was also borne by his executives. Their success eventually enriched thousands of shareholders, and the enterprise now employs close to 100,000 in normal times. Wall Street not excessively concerned with fluctuations in brokers' loans; a moderate increase could be a healthy sign considering the market went down for more than a year on declining loans. Advice of many brokers to buy on dips and sell on rallies has done well this year, just as selling on rallies and buying on dips did well last year. A Broadway trader notes the bears, when they can't think of anything else to sell, sell Westinghouse.

Morrison & Townsend note "exceptionally profitable investment opportunities" to be found during "uncertain periods at the end of depressions"; point out that "every depression in the past has laid a solid foundation for new high levels of prosperity." Advise farsighted investment policy considering not only current returns but long-term earnings potential; recommend selected chemicals, electrical equipments, utilities, specialties including American Can, Procter & Gamble.

Commerce Sec. Lamont predicts unemployment situation will improve by mid-summer, says our European trade is "holding its own."

Harvard Economic Society says “general turn for the better is probably at hand”; sees statistical evidence of improvement, particularly in “important early moving series”; believe “business decline, if not already ended, will end in the present half year, and be succeeded by general business improvement.”

Monthly report of Conference of Statisticians in Industry, surveying over 8,000 industrial firms, finds slow improvement in Feb.; increases in production were generally more than seasonal, while consumption picture was mixed and shipments increased an almost seasonal amount.

Bank of Nova Scotia sees stage set for recovery by large supply of loanable funds in Canadian chartered banks, “awaiting the revival of commerce and industry.”

Economic news and individual company reports:

Tax picture continues to worsen; March tax collections may run $100M below estimate (about $350M vs. $450M estimated and $559M in 1930); if June runs this far below estimate, fiscal year deficit may wind up at $700M, or $200M above estimate; short-term borrowing will have to be increased.

One of Superintendent Broderick's proposed banking measures has attracted widespread support: requiring commercial banks to segregate thrift (savings) deposits. Under current law, in case of a run on the bank demand depositors are paid off first, leaving thrift accounts to be paid with the bank's “less liquid” assets. Robert Moses [became hugely controversial NY urban planner], investigator of the 1929 City Trust failure, says banks that oppose stricter regulation will in the end lose public respect and hurt themselves, “as well as inviting drastic and hostile legislation on the part of radicals.”

M. Steuer, Bank of US investigator, submits new plan for reorganization of bank as alternative to Rosoff plan; details not made public. State Banking Dept. has been selling a few Bank of US bond holdings as opportunities arose; study of remaining holdings indicates sales prices will be substantially below values on books.

Farm Board Chair. Stone says their announcement was made now so farmers could take it into account when planning spring wheat crop; believes US wheat prices may now work down to world levels, which would be about 50 cents for July wheat. Board may have 250M bushels on hand by July 1 at average cost of 92 cents; supporting the 1931 crop might have required doubling holdings, for which Board had neither the money nor the storage. Board says it will handle surplus so as to minimize burden on prices; it's expected to hold on to it. Chair Stone says Board has not decided on policy for upcoming cotton crop; it's expected to abandon stabilization of that as well.

Texas Railroad Commission to meet Mar. 24, expected to extend curtailment to new East Texas fields; oil shares firmer. Negotiations among oil importing cos. and Federal govt. on curtailing imports continue; no agreement yet reached.

Commerce Dept. reports US installment selling, criticized by some economists, has weathered depression well. Annual installment credit is about $4B; average bad debt loss on installment accounts was 2.9% in second half of 1930 vs. 2.5% in 1929.

Nat'l. Industrial Conf. Board estimates US total wealth in 1929 of $361.8B and income of $84B; per capita wealth $2,977 and income $692.

Number of US lives insured has increased from under 500,000 in 1880, to 3M in 1900, to 35M in 1931, with total risks of $103B.

Worldwide oceangoing merchant marine fleets increased in 1930 by 220 ships totalling 1.733M gross tons; Britain maintained commanding lead with 18.2M gross tons, while US followed with 9.3M.

Canadian report: Dominion Statistics Bureau reports very poor 1930 year for rails; revenues $450.4M, down 14.9%; net revenues $72.9M, down 27.1%; payroll $256.4M, down 7.8%; passenger traffic lowest since 1909. Feb. building permits in 61 cities were $5.9M, down 21.1% from Jan. and down 33.5% from a year earlier. Total amount owed by Western Canada wheat pool last Sept. was over $68M.

Bank of England able to purchase more gold.

Norwegian Whaling Co. decides to suspend all hunting in coming season because of serious industry overproduction.

Nebraska House passes bill to prevent chain or corporate ownership of farms; State Senate passes law on unfair trade practices aimed at grocery chains.

Over 20% of Ford employees invest in a company-sponsored $20M investment fund that guarantees at least a 6% return. Henry Ford says if more businesses offered their workers this type of opportunity, “there would be far less appeal in the false Bonanza schemes that are exploited.”

Companies reporting decent earnings: Kaybee Stores, New River Co. (coal mining), H.F. Wilcox Oil & Gas, Montreal Tramways, Hudson & Manhattan Railroad (commuter rail).

Movie:

Charlie Chan Carries On, starring Warner Oland - follows "obvious and mechanical" technique traditional in mystery plays of pointing "finger of suspicion ... alternately at every character involved," but competently produced and moderately entertaining.

Jokes:

'I want to do something that will encourage the conversational abilities of my guests.' 'That's easy; have a musical performance.'

Candidate for naturalization - My nickname is Vazil Ferencsik. Examiner - But your full name will have to go into the official records. Candidate - All right. My real name is Vazil Raska Feraravoceinemoozuigearmociccoui. I'll spell it for you. Examiner - Your nickname will be satisfactory.

Monday, March 23, 1931: Dow 185.24 -2.48 (1.3%)

Assorted historical stuff:

Washington report: Large future deficits loom based on current $500M gap and trend of falling revenues. Continuing unbalanced budgets would “pile up fiscal troubles for the future.” Most logical solution would be a temporary surcharge on higher incomes; this would be easiest to implement politically and practically, and would reflect that drop in govt. revenues is largely due to temporary factors. Sen. Borah has already endorsed this plan. Veterans' bonus advocates are accurately explaining that the bonus hasn't been a big factor in raising the current deficit. However, it has disordered the carefully laid long-range Treasury financing plans. Pres. Hoover is “practically reorganizing” the Fed. Reserve Board; of six spots, he's likely to appoint four within a short time. Political observers very interested in Gov. Roosevelt's action on Prohibition measures now before him.

Editorial: Examination of 1929 tax returns fails to support Sen. Borah's contention of "robbery of the public" by "coterie of capitalists." Total profits of $2.240B were declared on security and real estate sales. Those with income under $5,000 declared net profits of $184M including losses of $43M, those with income of $5,000-$25,000 declared $676M including losses of $252M, and those with income over $1M declared $43M including losses of $48M (not including assets held over two years). It's a safe bet that when 1930 returns are tabulated, investment losses will be concentrated in the higher income brackets; small investors largely left the market in 1929, while wealthier ones tried to retain their holdings or recoup losses though a disastrous 1930.

Commerce Sec. Lamont reports on survey of unemployment in 19 selected cities taken in Jan.; of total population of 20.639M, 1.931M or 9.4% were unemployed; this compares with 3.8% in the same cities in April 1930; total estimate for US was 6.050M. This count includes people out of a job, able to work, and looking; another 1.8% had jobs but were on layoff without pay (excluding sick and voluntarily idle). However, Sec. Lamont points out survey was taken at in Jan., at peak of seasonal unemployment and most severe point of depression; notes some improvement since.

Editorial: It's been almost 3 months since executives of the 4 main Eastern rails made "impressive declarations" to Pres. Hoover and the country that they had ended 6 years of "guerilla warfare" and come to an agreement on consolidation. However, the ICC still hasn't received application for any concrete steps toward unification; what were described at New Year's as minor details may be holding things up. It will soon be clear if this inaction is due to "a return to a familiar and pernicious jockeying for position"; in that case, the rail executives will have played fast and loose with the President and the transportation system.

Washington observers give Russian five year plan better chances due to increasing success at obtaining markets for exports.

Austria and Germany announce preliminary agreement foreseeing "far-reaching economic union."

25 freight cars worth of honeydew melons are being transported from Chile to NY by fast ships with refrigerated space, allowing that nation to cash in on the reversal of seasons in the Southern hemisphere.

The frankfurter celebrates its 125th anniversary this year; it was invented in 1805 Vienna by Johann Lahner, who learned the butcher trade in Frankfurt.

Dr. Charles Mayo, famed surgeon of Rochester, Minn., says improvements in medical science are being offset by modern "too fast living," which "places a much greater strain on our mentality"; speed of life is so great, many fall by the wayside; declares proportion of insanity twice as high as before motor cars arrived.

Irving Trust Co., after 18 years in the Woolworth Building, moves headquarters into its new 50-story building at One Wall Street, corner of Broadway. Building is the fourth erected on that site, with the first dating back to New Amsterdam. The original Irving Bank's name came from Washington Irving, who is said to have begun his famous "Knickerbocker's History" in his law office, also on that site.

Special Master E. Campbell recommends Supreme Court stop NY City from continuing current method of garbage disposal; New Jersey had sued the City charging pollution of its summer resort beaches.

Henry Clay Graton, founder of Graton & Knight leather goods dealers, dead at 100.

Market commentary:

Market wrap: Leading stocks irregular in the weekend session, in spite of some favorable business news; further bad breaks took place in stocks with suspect dividends, including Liquid Carbonic and US Industrial Alcohol; however, setbacks in major shares remained within technical bounds. Bonds active, mixed; US govts. dull, steady; foreign somewhat irregular; corp. irregular, high-grade mostly firm, utilities strong. Commodities mixed; grains mixed in narrow range; cotton up substantially. Silver down 3/8 cents to 29 1/4.

Week in review: Stocks broke upward out of their trading range, encouraging observers; more outside buying seen; strength followed good news from several sectors including steel, autos, and construction. Bond market featured broadening strength in foreign issues, extending to bonds of states and cities across the globe; US govts. rose early in week but reacted later on talk of increasing deficits; domestic corp. generally steady but saw rally in convertibles and switching from lower-grade rails to utilities. Money market saw unexpected drop in call money rate to record low 1%; money rates normally rise after the tax date (Mar. 15). Banking figures for week fluctuated due to tax influences. Foreign currencies firm; marks strong on improving German political, economic situation; Britain able to buy gold in open market for first time in a year. Grains showed small changes; corn firm but wheat slightly down. Cotton strong early but lost most of gains. Silver rose sharply most of the week.

Market observers somewhat more cautious, warn against overenthusiasm; advise waiting for market to prove itself, using stop orders to protect accounts.

Dow industrials showed a 3-day winning streak Friday for the first time since start of Feb.; utilities are at new high for the year. Action of rails has been more discouraging, but signs of oversold position have recently appeared. Observers feel technical reaction is possible in utilities, but confident strong support will be forthcoming on setbacks; see attempt in near future to carry industrials over Feb. 24 high of 194.36.

Automotive stocks have been pushing ahead under leadership of GM; better news has been coming from car production centers, and J.J. Raskob has reappeared as a large buyer of GM shares, as he was during the memorable Coolidge boom. However, conservative interests say auto trade bears close watching in next two months since conditions can change quickly. GM probably won't cover its dividend in the first quarter, but is expected to in the first half overall. Studebaker is another motor stock that's come into greater speculative favor recently.

Observers are awaiting market reaction to Feb. rail earnings, which are certain to make poor reading. Danger to the bears in an overcrowded short position was demonstrated last week when Aluminum Co. of Amer. moved 40 points in one session (to about 200).

Broad Street Gossip: Proposed addition to NYSE will cost $10M and be 400 feet high, indicating the Exchange's continued optimism for the future. Goodbody & Co. say long-term investors should have 75% of funds in stocks see "irregular rising market over the next month." While one broker reports his proportion of active accounts went from 25% on Jan. 1 to 75% recently, another reports that public buying has increased, but still hasn't reached large proportions. Allied Chemical 1930 earnings report was a pleasant surprise, down only 16.8% from 1929 and covering dividends by a good margin. One broker who loans to the bear crowd reports short interest in rails is highest this year; NY Central and B. & O. are popular targets.

Editorial by T. Woodlock analyzing Kennett Dam hyroelectric project in Calif.; finds project only marginally profiable even using state financing.

F. Vanderlip, financier and former Nat'l City Bank pres., calls present depression "most stupid ever known because it is the result of artificial rather than natural causes." Believes technological improvement in industry is outstanding economic development in history of the world; sees nation on verge of economic development that will bring prosperity similar to that which accompanied development of automotive industry.

B. Anderson, Chase Nat'l Bank economist, calls for unilateral US lowering of tariffs to stimulate trade; attributes higher US wages not to tariffs but to immigration restriction during and after the War; dismisses suggestion US could maintain tariff but buy foreign bonds to cover export surplus, since this would require also covering “ever growing interest charge on the ever growing volume of foreign debt.”

J. Price of Peoples-Pittsburgh Trust calls for $1M/year bank publicity campaign: “Do not allow political demagogues to make a football of our most precious possession - the prestige and esteem which banking has always enjoyed.”

Economic news and individual company reports:

GM reportedly placed orders for its requirements of copper, cotton, rubber, tin, and zinc for rest of 1931 production season, against usual policy of only ordering a month ahead; seen as strong testimony to "belief of important interests that commodity prices were scraping bottom." Fisher's wholesale commodity index remained at 76.0 for the third consecutive week. Illinois Steel raises prices on products $2/ton over the price recently announced by Carnegie Steel, reestablishing the normal spread between Chicago and Pittsburgh prices. BLS reports wholesale price index of 550 commodities declined from 77.0 in Jan. to 75.5 in Feb.

Fed. Reserve reports nothing to handicap business recovery from banking standpoint; funds are abundant; member banks at end of Feb. were in strong position, showing relatively low level of total loans and investments, large volume of balances with correspondent banks, and small indebtedness to the reserve banks. Bank failures were much lower in Feb., indicating bank failure crisis has passed. Banks have been buying bonds, supporting prices through most of 1930-31.

F.W. Dodge reports total construction contracts in 37 states East of Rockies for first 2 weeks of March were $186.7M vs. $178.2M in 1930.

Commerce Dept. reports continued improvement in some lines of business for week ending Mar. 14; foreign business reports slightly encouraging.

Feb. life insurance sales were $30M/business day, down 19% vs. 1930; life insurance had suffered less from depression than other industries, but is now showing some effect; decline partly attributed to drought that prevailed in large areas of the country.

Dollars are trading at a premium to 7 of 10 major European currencies in spite of very easy money rates prevailing in NY.

Leading Bogota newspaper urges issue of paper money by Colombian govt. to offset losses of gold reserves. Brazilian Pres. G. Vargas says govt. is considering ways of funding public debt to reduce drain on nations gold stock; British financier Sir O. Niemeyer is advising.

Brazilian coffee conference delayed from Mar. 31 to May 15; govt. expected to announce purchase and segregation of 18.5M bag surplus, opening of free market.

G. Sloan, Cotton-Textile Institute pres., announces remarkably heavy demand for fine-goods cotton cloth in past 10 weeks; volume of unfilled orders double 6 months ago, inventories have been cut in half and are now at a minimum. While prices are firming production is still unprofitable, but this is expected to improve.

ICC reports average number of rail employees in 1930 was 1.511M vs. 1.687M in 1929; payroll $2.590B vs. $2.941B.

Ford looks likely to retake production lead from Chevrolet this month, with about 80,000 cars produced for the US vs. 78,000 for Chevrolet; Ford's April total is expected to reach 105,000. Some concern seen that auto sales have slowed since countrywide snowstorms Mar. 7-8, though inventories remain low.

International-Great Northern was only one of country's 52 major rails to show an increase in car loadings for Feb. vs. 1930, due to East Texas oil development.

Westinghouse Electric reports business so far this year well below 1930, but Feb. and March bookings slightly improved over Jan. Dividend cut seen likely.

Companies reporting decent earnings: Central & Southwest Utilities, Wesson Oil.

Movies:

The Front Page - Not as successful as the play, which was concentrated in the press room; scenes away from the center of action dilute impact. The play's profanity has naturally been deleted, but is hinted at by "extremely annoying" device of filming characters saying an expletive that we don't hear.

Tabu - Final film by the recently deceased F.W. Murnau, "one of the most artistic directors in motion pictures." Non-dialogue film of ill-fated South Sea lovers caught in conflict between love and superstition.

Joke:

"Tramp - Lady, won't you help a poor man that lost his family in the Florida flood and all his money in the Wall Street crash? Lady - Why, you are the same man that lost his family in the Galveston flood and was shell-shocked during the war. Tramp - Ain't it so, lady? I'm the unluckiest guy in the world."