Friday, April 24, 1931: Dow 157.43 +1.06 (.7%)

Assorted historical stuff:

Editorial: Under-Sec. of State Castle's statement that the US would "undoubtedly take part" in the world disarmament conference in Geneva next year was reassuring, since it implies the US role will be more than just "passive representation by an unofficial observer"; apparently Washington plans to "lend its official aid to this intensely practical phase of the world's striving for assured peace." Even more significant is the attitude reflected in Castle's speech: "Some of you think ... that the idea of universal and permanent peace is a dream ... But to those of us in the thick of international affairs, it does not seem so impossible." It must be remembered this is the statement not of a "dreamer nor of a woolly-minded pacifist," but of one of the most experienced and professional diplomats in the State Dept., known as an effective, "hard-boiled" negotiator. If he's convinced of this, "shall laymen dismiss the idea as a delusion?" In the matter of reducing land armament, the US has little to offer but encouragement, but this may in fact enhance her influence as a disinterested party.

Possible precedent seen in plan to stabilize oil industry by interstate compact curtailing production with approval of Congress; this would be a way to avoid antitrust restrictions. While success is far from assured, if plan works it might be applied to other industries including coal and agriculture. However, Congress is likely to demand consumer protection against price rises, which may be more than the industries care to trade for antitrust immunity.

Editorial by T. Woodlock: “Fetish” of competition is keeping rail transport expensive. Rails currently earn a clearly inadequate return of about 3% on investment, and have already done most of the modernizations possible to cut expenses. The only remaining way to cut a large amount from the expense side is to get rid of the excessive and circuitous routes that are maintained because of the strange US fixation on competition in a heavily regulated industry. The public would be better off with a rail organization like the British one - perhaps 20 systems consolidated from existing rails according to geographic district. This would “undoubtedly save immense amounts of money” and allow for “lower rates - probably much lower” than possible under present conditions.

Democratic Nat'l Committee to start drive for $1M to eliminate deficit of $650,000 and enable committee to remain active up to next national campaign.

Fed. Reserve Gov. Meyer says discussions with Bank of England Gov. Norman during his US visit didn't lead to any “international understandings.”

British govt. suffers third defeat in two days in vote on agricultural land-use bill.

Lufthansa to install 10 new crude oil airplane motors developed by Prof. Hugo Junker in regular service after successful tests.

"Professional" rainmakers still find some suckers ready to believe rain can be invoked by incantations. However, chemical engineers have discovered a way of enticing sufficient moisture from the air to help dusty roads, if not farmers. Calcium chloride has the property of deliquescence - attracting moisture from the atmosphere due to its strong affinity for water. Two applications of the white powder to roads during summer months attract enough moisture to settle dust.

There's a new type of wood on the market - a thin sheet of choice, genuine cabinet wood mounted on fabric, flexible and practical as canvas. Available in pine, mahogany, walnut, etc., it can be installed over metal, plaster or tile. The manufacturers claim two coats of shellac and wax give it a finish to rival the finest cabinet woods, at one-tenth the cost. So now if you want wood paneling for your next redecorating project, you can just call the paper hanger.

Construction of a new Buenos Aires subway, second in the city, is an international affair. The 2,500 workers there represent 34 nationalities and speak 37 different languages. The project was financed, to the tune of $20-$30M, in NY City.

NY Gov. Roosevelt signs NY City Transit Unification Bill; Transit Commission likely to start hearings in May; final plan may differ sharply from tentative Untermeyer proposal; if Gov. signs the Thayer Amendment, unification may be through private corp.

NY City authorizes construction of four new 1,000 foot piers on the Hudson between West 48th St and 54 St, and a 925-foot one at West 56 St.; construction will take 2 1/2 years and cost $17M. Docks are to be used to provide berths for new transatlantic ocean liners now under construction.

Public school systems around the country are giving more attention to music and music appreciation. The NY City Board of Education recently installed pipe organs in seven public schools to assist in musical programs.

Market commentary:

Market wrap: Stock trading picked up substantially; day's volume of 3.8M shares was highest since Mar. 6. Trend was down most of the session, with new bear market lows hit in majors including US Steel and NY Central. Attempt at a rally about 11 o'clock fizzled, and selling broadened across the whole market around noon; trading turned "highly feverish" during mid-day, switching between highly active and very dull with "disconcerting abruptness." Another selling wave broke out in early afternoon, forcing US Steel below 125. Last hour saw sudden reversal following reports Fed. Reserve of NY might lower its rediscount rate from 2% after the close (proved to be unfounded); shorts urgently covered, leaders rallied sharply, and pressure lifted across the list. Bonds moderately active, prices continued to diverge according to grade; US govts. rose, reaching new highs for 1931; foreign list active, mostly steady although Australian issues continued fractionally lower; corp. highest-grade relatively strong but much of the list crumbled, with many record lows; amusement and lower-grade rail issues particularly weak. Commodities mixed; grains down substantially; cotton little changed. Copper had small amount of buying at 9 1/2 cents, with larger producers still asking 10 and largely out of the market. Coffee continued strong rally; uptrend over past five days has added $50M to value of world inventories. Silver rose 1/2 cent to 28 7/8.

Market observers increasingly advise against short-selling, anticipating technical rally; however, recommend using such a rally to reduce any long positions. Needless to say, buying is discouraged, and the sidelines recommended, until market clearly indicates a strong turn.

US Steel seen likely to maintain dividend in spite of not earning it over past two quarters; in 1929-30, it earned $14.64/share in excess of dividends (current annual dividend rate is $7). Westinghouse broke badly on announcement of $2.9M loss in Q1. Chrysler stock has been acting relatively well recently, reflecting reports of increasing sales each month this year and increasing market share. Reynolds Tobacco sales reportedly rising after extensive advertising campaign was recently started. Gold shares continue generating favorable comment at brokers; Alaska Juneau is holding near a several-year high.

Dow theory adherents are closely watching action of leading rails, which have been "foreshadowing the trend of the general list with extraordinary accuracy over the past year" and also predicted the ultimate bottom in the 1920-21 bear market. Rail fundamentals look somewhat more encouraging based on expected substantial improvement in March earnings, though outlook is clouded by dividend uncertainty.

Demand for high-grade preferred stocks continues to strengthen; they make up most of the recent new yearly highs lists, and many are at record highs.

Symington & Sinclair say world rubber output still well above demand; only bright spot is that almost no producers are profitable, so situation should correct itself.

C. Stone, chair. of Stone & Webster, says US business needs further coordination and systematization. However, expresses confidence in future and predicts upturn, once underway, will be extremely rapid and carry country to new high levels of prosperity.

G. Roberts, Nat'l City Bank VP, says wage rates must be readjusted lower, particularly in manufacturing industries, to return to equilibrium and real prosperity.

Economic news and individual company reports:

Fed. Reserve reports seasonally adjusted index of industrial production was up 2% in March to 88% of the 1923-25 average, vs. 104% in Mar. 1930. Industries showing larger than seasonal increases in employment and payrolls from mid-Feb. to mid-March included steel, automotive, textiles, and shoes. Money in circulation Apr. 22 was down $11M to $4.618B, total Reserve Bank credit outstanding up $16M to $911M. Member banks in NY City report brokers' loans down $5M to $1.844B; loans on securities to non-brokers down $46M to $1.713B.

Dow average of 8 iron and steel products was unchanged at $44.23, low for 1931. Steel scrap markets report very little buying and softer tone; this confirms opinion steel activity has peaked for the first half.

Pennsylvania crude oil purchasing price cut 15 cents/barrel to $2.

Fairchild Service forecasts cotton acreage at 40.722M acres, down 11.9% from last year.

City Ice & Fuel reports refrigerator rail car shipments are showing substantial increase, counter to downtrend in passenger and freight traffic.

Foreign currencies strong, particularly sterling, after Fed. action lowering buying rates on bills; further shipments of gold to NY from France seem unlikely.

Bank of England has been selling securities in open market operations to support bill rates; it's evident central banking authorities are trying to widen the spread in money rates between London and NY with the idea of cutting off French gold flow to the US and aiding sterling. However, at 124.35 francs/pound, sterling is still well below the point where gold would be exported from France to Britain (124.45).

Brazilian gold reserves reportedly exhausted; milreis currency hits record low.

German unemployment Apr. 15 was 4.526M, down sharply from 4.772M on Mar. 31 and 4.972M on Feb. 28.

Mostly French group of banks agrees on $45M 25-year loan to Czechoslovakia; to carry 5 1/2% rate and be issued at 95.

Chinese Finance Min. says central bank will issue banknotes secured by incoming gold customs payments; seen as first step toward establishing gold standard.

NY Gov. Roosevelt seen vetoing up to $6M in appropriations as indications point to decline of $30M in state income tax receipts.

Ford executives deny rumors a shutdown is planned, or that company has curtailed its steel orders; reliable sources say Ford management is pleased with April results, and an increase is likely in the May schedule. Chevrolet has reportedly stepped April production up substantially from scheduled 85,000 cars and trucks.

Swedish Match [Ivar Kreuger co.] reports 1930 net of $15.4M vs. $14.6M in 1929; to pay usual dividend; 1930 a favorable year, sales largest in co. history.

Nat'l Cash Register swings to Q1 loss of $373,183 vs. profit of $912,240 in 1930.

Q1 earnings/share: GM $0.61 vs. $0.98; Studebaker $0.35 vs. $0.62; Allis-Chalmers $0.38 vs. $0.93; Caterpillar Tractor $0.55 vs. $1.79; Standard Gas & Electric $6.04 vs. $6.59; Lambert $2.81 vs. $2.76; Lily-Tulip Cup $0.79 vs. $0.77.

Companies reporting decent earnings: Standard Gas & Electric, Calgary Power Ltd., Swedish Match [Ivar Kreuger co.], Consol. Chemical Industries, Perfect Circle (automotive piston rings), Lambert (toiletries and medicinals), North Amer. Aviation, National Distillers Products (medicinal whiskey), Lily-Tulip Cup.

Movies:

The Perfect Alibi - based on A.A. Milne's ingenious mystery play, at the Cameo. Unfortunately, spirit of the play is smothered by plodding direction and frequent cuts to "scenes of little importance," often in mid-conversation. Acting of C. Aubrey Smith as the victim and Warwick Ward as one of the murderers is top-notch, but Frank Lawton and Dorothy Boyd, as the young lovers who solve the mystery, are "allowed to speak their lines so rapidly that few of them are clearly audible."

God's Gift to Women - based on Jane Hinton's play, The Devil Was Sick, at the Beacon and Brooklyn Strand. Frank Fay plays Jacques, a modern day Don Juan in Paris. Jacques falls in love with American heiress, Diane, but must prove to her father that he is worthy of her. Fay's gift for farcial pantomime is "almost entirely smothered beneath a silly story and distressingly ancient situations." Cast is able, considering the vehicle, including Laura La Plante as the heiress and Joan Blondell and Louise Brooks as former sweethearts.

Theatre:

Young Sinners - by Elmer Harris, first in a proposed series of revivals for $1 or less. Dorothy Appleby stars as Constance Sinclair, "the precocious, exaggerated 17-year-old heroine of this distorted picture of modern youth"; Jackson Halliday takes the male lead as Gene Gibson, the under-age rake who is the "excuse for a series of lessons in physical culture and sex hygiene." [Note: at least the title appears to be accurate for once.]

Jokes:

"Motorist (changing tire) - Oh, Muscle Shoals. Passerby - Why Muscle Shoals? Motorist - It's the biggest dam I know of."

"Master - Did you throw out that bootmaker when he came with my bill? Servant - Yes, sir; but he's here again with a bill for me, so now perhaps you would throw him out, sir."

"Housewife (engaging new girl) - I hope you had no quarrel with your last mistress when you left her? The Girl - Oh, no. She was taking a bath and I just locked her in, took my belongings, and left."

Thursday, April 23, 1931: Dow 156.37 -2.46 (1.5%)

Assorted historical stuff:

Editorial: Pres. Hoover recently planted a tree on the White House grounds. He could have taken the opportunity to speak out on this important subject. Trees are "indispensable to our national well-being." Aside from their obvious importance for lumber and recreation, trees are an important regulator of water flow in streams and prevent soil erosion, which is now estimated to cost $200M annually, not including losses often inflicted by great floods. Timber supply is being used up 4 times faster than growth; we must plant new forests and preserve existing ones, through both govt. and individual action.

New South Wales Govt. Savings Bank closed to prevent failure; was a large Australian state savings bank doing no commercial business; 1.652M depositors with 70.7M pounds sterling in deposits. Bank officials assured depositors that it was solvent; govt. agreed to merge it with Commonwealth Bank of Australia. Bank troubles attributed to recent remarks by state Premier Lang on state default, causing plunge in state bonds that bank was a large holder of.

US and Germany recognize new Spanish Republic; pesetas declined.

Letter to the Editor from Sen. Couzens (R, Mich.) responding to editorial of the 16th: Did not in fact receive invitation to speak at Int'l Chamber of Commerce meeting; would have been delighted to do so, but perhaps just as well to write them.

Commerce Dept. reports on survey of retail business in 485 cities of 10,000 or more: of total business of $15.106B, 62.5% was transacted by single store independents, 19.44% by local chains, 16.90% by regional and national chains, and 1.16% by other.

NY Gov. Roosevelt signs Gates-Miller bill establishing legal 6 day, 8 hour/day work week with strictly limited overtime; stores allowed 10 extra hours/year during rush seasons.

NY City had 750,000 visitors in 1930 who came just to attend conventions and exhibitions. It's estimated they spent $80M, 40% at retail stores, 25% at hotels, and the rest in miscellaneous expenditures.

[Sheer Genius dept.] Newly invented non-skid note pad has a sheet of rubber attached to the back preventing the paper clipped to it from moving. Business men can now take notes with one hand while talking on the telephone with the other without having to chase the paper all over the desk.

To meet increasing demand from the Eastern US, fresh flowers from the San Francisco Bay area are now being shipped in refrigerator cars on passenger trains. Demand is greatest in Dec.; in 1931, 325 large cars were sent in that month, up 140 from 1930. During the last Christmas holidays, NY City florists bought $400,000 of flowers, Chicago $225,000, and Boston $95,000. Favorites include chrysanthemums, asters, roses, carnations, dahlias, violets and gardenias.

The Merchant Tailors' Association recomends that the host of a party wear a jacket of a bright color, e.g. scarlet or plum, allowing him to be recognizable to the guests. We would argue otherwise, as it often happens that the host would rather not be associated with the party once he sees how it is going. "He is apt to be happier in the dark obscurity of a plain black dinner jacket, watching the melee quietly from behind a palm." - New Yorker.

Market commentary:

Market wrap: Stocks continued to work lower; volume moderately higher; most of selling attributed to liquidation by discouraged "outsiders" [nonprofessional public as opposed to professional traders] rather than to bear pressure. US Steel weak early, hitting new post-1927 low; this appeared to affect sentiment ("as Steel goes, so goes the market" - old saying); weakness spread to rails and utilities; slight rally at mid-day quickly petered out and close was weak. Bond trading quiet; US govts. firm; foreign list unsettled by plunge in Australian issues on closing of govt. savings bank, but European issues only down slightly; corp. highest grade showed firm tone but lower-grade rail and industrial issues weak. Commodities weak; grains and cotton down substantially. Some copper sold at 9 1/2 cents but most producers holding at 9 3/4 - 10. Silver down 3/8 cents to 28 3/8. Zinc dropped to 31-year low of 3.50 cents/pound; coffee continued rally.

Conservative observers increasingly believe market conditions favor a technical rally, in particular higher volume and public liquidation during recent market declines. However, they advise against buying in anticipation of such a rally, and don't expect a sustained upturn; "business reports and immediate trade prospects do not indicate that a definite culmination of the bear movement is in the offing."

Dow industrial average closed at a new bear market low, 1.14 below the previous low reached Dec. 16. "Speculative nerves were frayed by the persistent, dragging character of the recent declines, and the apathy in evidence on the brief interrupting rallies."

Dow theory adherents believe recent action of rail and industrial averages in breaking through resistance levels clearly indicates “we have not emerged from the major bear market,” though it doesn't necessarily mean prices will go lower. The Dow industrials are now off 224.80 from the peak of 381.17 on Sept. 3, 1929; this decline of 59% makes this bear market “the most extensive since accurate records have been available.”

Bethlehem Steel pressured as dividend cut seen likely. GM and du Pont suffered outburst of heavy selling. Texas Gulf Sulphur hit new yearly low on dividend concerns. International Cement pressured on cement price war.

Prominent bear traders have been active, though some reportedly have been attacking leading stocks to cause reactions and then taking advantage of resulting public liquidation to surreptitiously cover shorts in other stocks.

The Dow average of 40 corporate bonds hit a 1931 low, about 1.24 points below the 1931 high, although fundamentals favor higher bond prices and high-grade utility issues have been stable at close to three-year highs; second-grade rails and industrial bonds have declined severely to carry the average down.

Bank and trust stocks have held up relatively well in the past few days considering the severe declines on the NYSE.

NYSE amends listing requirements for managed investment trusts [similar to mutual funds] to require more detailed and definite accounting methods.

Increase in rail loadings for week ended Apr. 11 from previous week was unexpected; another decline had been predicted. Drop in gasoline in storage for week ended April 18 also came as something of a surprise, though season of heaviest consumption has opened. Q2 car production is estimated at about 900,000, down over 28% from 1930; market students are calculating which rail lines will be affected. Merger of important Southwestern copper companies rumored; Phelps-Dodge to be nucleus of combination.

Westinghouse has sold off recently on reports Q1 deficit would be larger than previous estimates. Sears, Roebuck has been pressured on talk of declining profit margins; company would benefit from improvement in agricultural conditions.

C. Schwab, Bethlehem Steel pres., predicts "better times than ever" at annual luncheon of Pennsylvania Society.

W. Atterbury, Pennsylvania RR pres., listed some things that must be corrected before business is restored to sound basis: maldistribution of gold; war debts; worldwide tariff walls; installment buying , particularly as developed in the US; possible overly rapid reduction in national debt; tax system based on unsound principles, particularly the capital gains tax; effects of Federal antitrust and trade laws.

Economic news and individual company reports:

US Grain Futures Administration has started an investigation to determine source of reports that Farm Board would dump its whole wheat surplus in Europe.

Mississippi avoids default on bonds; solution involves selling $1.5M bonds that were already authorized, which were immediately bought by Mississippi and New Orleans banks. Editorial: Mississippi played with fire in flirting with possible default. The state's financial condition is relatively sound despite depression and drought, and danger of default has been averted by "public-spirited action of Mississippi and New Orleans bankers." However, "no state ... can afford to have its credit rating called into question, particularly" when it's about to embark on an expansive public works program requiring large bond issues.

Weekly govt. weather report: "Continued dry soil, with high winds, was very detrimental in the spring wheat area, although timely rains towards the close of the week were helpful in retarding soil blowing" seeding made good progress but some reseeding will be necessary. Winter wheat conditions generally favorable, though soil blowing caused some damage in Northern Great Plains and Montana. Corn planting progressing well; cotton uneven with some trouble in Texas.

Another $12.5M in gold to be shipped from France to NY, threatening start of major movement; to fight this, Fed. Reserve lowered buying rate on bills up to 45 days by 1/8% to 1 3/8%; this strengthened foreign currencies, particularly sterling. It's hoped this step will work to divert gold to countries more in need, including Britain and Germany; if it doesn't, a cut in the 2% rediscount rate is seen likely although that rate is already at a record low. Money flow into NY has been very heavy in past few days, and US gold holdings at end of April should total almost $4.75B, more than the rest of the world combined excepting France.

Weekly steel reviews a bit more optimistic in spite of production decline; while spring bulge now looks to have been mostly seasonal, demand seems sufficient to keep production stable for next few weeks. Automotive demand looks positive, though there's a disturbing report Ford is reducing buying and planning a summer shutdown. Some decline in small construction. Scrap prices showed further weakness.

Twenty leading steel producers earned 3.71% on capitalization in 1930, lowest in six years.

Final income tax figures for March show total of $329.6M vs. $555.7M in 1930. Total internal revenue in 9 months to Mar. 31 $1.930B vs. $2.277B.

March earnings for first 7 rails reporting showed dramatic improvement from Feb., down only 6.4% from 1930 vs. a 52.9% decline in Feb.

Middle West Utilities reports business conditions in its territory during March lagging; some improvement seen in New England industrial activity, but in other sections increase in business activity was “of seasonal or less than seasonal proportions.”

US electric output for week ended Apr. 18 was 1,633 GWHr, down 4.6% from 1930, vs. a 3.1% decline prev. week and 1.6% two weeks ago.

Att'y Gen Mitchell says Justice Dept. sees no antitrust violation in efforts of oil states to relieve troubles of oil industry by curtailing production.

Price war has broken out in the cement industry; prices are lowest in 15 years, and customers are putting off buying in anticipation of further cuts.; current prices are unprofitable for great majority of producers. Industry problems of increasing capacity and declining construction demand have been building for two years, but a sharp decline in demand this year has made things much worse; Mar. production was 36.9% of capacity vs. 51.5% in Mar. 1930. Long period of low prices seen.

March cigarette production was 9.802B vs. 9.165B in 1930.

Mexico faces deficit of 30M-50M pesos for current fiscal year; talk of suspending foreign debt payments "is being revived in certain quarters."

Steamship rate war averted as five lines which had announced their intention to leave the Far East Freight Conference withdrew resignations.

M. Norman, Bank of England gov., reportedly proposed int'l bank to finance long-term loans to Eastern Europe and S. America on recent visit to US. Project disapproved of in proposed form by US and France.

Westinghouse announces Q1 loss of $2.886M vs. profit of $4.547M ($1.70/share) in 1930. Libbey-Owens-Ford Glass reports company is operating at capacity on largest orders in its history on mounting demand for safety glass.

Companies reporting decent earnings: Chesapeake Corp. (paper), Canadian Dredge & Dock..

Theatre business:

The Joe Leblang Central Ticket Bureau [discount theatre tickets] is rolling out its new system for preventing ticket scalping. The system works as follows: upon purchasing a ticket the buyer receives a blue slip, in lieu of the ticket, which admits him to the theatre. Inside, a Bureau representative exchanges the slip for seat stubs. Since there is nothing on the blue slip to indicate the location of the seats any speculator (scalper) will have trouble reselling them. This system will extend to tickets purchased via phone or telegraph - messengers will only deliver blue slips. In future, this system will be used for all shows with tickets in high demand.

The casino at Enghien les Bains, about 8 miles north of Paris and one of the most famous in Europe before the war, will reopen this month after many years, thanks to a recent vote in the Chamber of Deputies repealing laws that prohibited public gambling within 60 miles of Paris. Many Parisians laud this measure as a "long step back into that pre-war period when the gaiety of Paris was a magnet which attracted to its multi-colored lights and lanterns all the butterflies of Europe"; advocates cited need to compete with other European capitals for the steady stream of wealthy clientele looking to court "Lady Luck". However, the measure was stubbornly fought by a puritanical minority as being antithetical to the "spiritual advance of the French people". In the final analysis it was probably allure of the casino tax revenues that decided the outcome; it's estimated this will amount to 30M francs annually, while property values in Enghien will double; the casino will be in the class of the high-limit one at Monte Carlo. Counterintuitively, this measure was favored by the theatre business, which believes the “exhilaration engendered by such gay places, and the spending element which they invite” will stimulate their trade rather than providing new competition; “winners are supposed to celebrate at the revues ... and losers to console themselves in an evening at the drama.”

Jokes:

"Daughter (entertaining swain in the small hours) - Has father gone to bed yet? Mother - No. He's in the cellar reading. Daughter - Whatever is he reading in the cellar? Mother - The electric light meter."

"So he gave us a demonstration of the used car, and we noted the following things: There was only one new part on it, and that was the speedometer. Everything on the car made a noise, with the exception of the horn. It averaged about fifty miles to the gallon, because most of that distance we had to be towed. The windshield wouldn't shatter, because there was no glass in it. It had three wheel brakes. It had a one-man top. Any more than that in the car got wet when it rained. It had balloon tires, at least they were off the ground most of the time. It had moulting upholstery, flapping side curtains and cross-eyed headlights. In fact, it was just the kind of car a wife would want her husband to have. That is, a wife who wanted to keep her husband home. - Life."
[Modern translation:
Man in auto parts store: I need a windshield wiper blade for a Yugo. Clerk: Sounds like a fair trade.
Why don't Yugos sustain much damage in a front-end collision? The tow truck absorbs the impact.]

Wednesday, April 22, 1931: Dow 158.83 -4.58 (2.8%)

Assorted historical stuff:

Thomas E. Dewey, Chief Asst. US Attorney, announces Amer. Bond & Mortgage is being investigated by Justice Dept. Company issued about $90M of mortgage bonds in past few years, most of which are now in default. Company owns and operates the Mayflower Hotel in Wash. and several NY hotels.

Pres. Hoover denounces "Nicaraguan insurgent general" Augusto Sandino for "cold-blooded murder of eight or nine American citizens," says confident he will soon be brought to justice. Some criticism of tardiness of US intervention. Editorial: Sec. of State Stimson's statement that the US would henceforth confine military protection of citizens's lives and property in Nicaragua to the coast towns has generated much "newspaper hubbub" calling it everything from scrapping of the Coolidge Nicaragua policy to a landmark of Monroe doctrine clarification. In reality, it's just a practical restatement of existing policy; past foreign armed interventions have usually been limited to the coasts for logistical reasons. US citizens there must "make a commonsense estimate of the conditions" and realize "their citizenship gives them no unlimited call upon the military." Regardless of whether it wished to, the Adminstration had to intervene in Nicaragua and in Honduras following the recent revolution, both out of obligation to protect its citizens, and to prevent other govts. from entering to protect their own citizens. Looking ahead, "a sufficient force of marines is to remain in Nicaragua long enough" to complete committment made in 1926 to assure free elections, establish an authentic govt., and train a National Guard strong enough to protect against "political banditry." The Administration recently said it would withdraw the Marines by June, and would like to stick to this timetable, though this now appears doubtful.

H. Bancroft, Wall St. Journal publisher, says unclear if business has definitely passed low point of depression, but “whether or not business has passed the extreme low point, it is very close to it.” Cites rapid US increase in savings and paying down of debt.

Pres. Hoover receives reports from editors of business papers covering seven major industries on "What Is Holding Back Industry." List by industry: Automotive - tariff and "hand-to-mouth buying." Construction - lack of standardization and banks' hesitancy in making loans. Food - waste in distribution and failure of big baking cos. to lower bread prices. Chemical - lack of price stability, taxes, inadequate statistics, and bad trade practices. S. Dennis, chair. of nat'l conf. of business paper editors, proposes committee of outstanding business leaders headed by Owen Young to help business plan national economic policy and restore prosperity. Attacks "individualistic trend based upon the philosophy of 'devil take the hindmost.'" Labor Sec. Doak warned editors it would be dangerous to reduce wages as percentage of nat'l income. Dr. J. Klein, Asst. Commerce Sec., pointed to some positive news including recent steadying in prices and European markets.

Editorial by T. Woodlock: It can't be denied that US stockholders in general display “something lik complete indifference” compared to their British and Canadian counterparts. There are few cases in our corporate history where stockholders took matters “into their own hands and achieved a complete revolution”; instead, the history is one of occasional “'riots' which in due time subside or are repressed.” Anything that would increase intelligent involvement of the stockholder would be good, “as it would be in the political field where the inertia and indifference of voters is just as marked.” One possibility is for investment trusts [similar to mutual funds] to combine forces and take a more active role.

Britain recognizes new Spanish Republic.

Harvard Prof. W. Ripley advocates creation of cabinet post of Sec. of Transportation as means of helping rail conditions; would take over current ICC functions and regulate truck and bus transport as well. "While the situation looks critical ... it is not hopeless ... the revival, when it comes, will bring a quick snap back."

The maker of an automatic fire alarm used a unique method to convince skeptical prospects that it would work. The alarm was based on quick melting of a special metal at temperatures above 140 degrees. Taking his prospects to dinner, the manufacturer served coffee along with spoons made of the metal. The spoons instantly melted and disappeared when the guests dipped them into the coffee; the alarms were sold.

While some Civil War ships have been scrapped and others have become monuments, some are still operating. Among these is the "Chickasaw," commanded by Farragut in battle at Mobile, Ala. After the war, the ship became a coal barge for some time; it then was used as a train ferry at St. Louis; finally, about five years ago it was made into a transfer boat named the "Gouldsboro" operating from New Orleans at the "mouth of the Mississippi." The old boat is still fairly fast, making the trip across the Mississippi in 11 minutes.

New Schrafft's restaurant to open today at ground level of Chrysler building; largest in the chain, with seating capacity of 800.

Contrary to predictions of the wets when Prohibition banned beer, the pretzel industry has grown every year since.

Market commentary:

Market wrap: Stocks opened under an overnight accumulation of sell orders from the public; later, bears resumed insistent pressure against the list, producing new lows in many stocks with a wide public following; most demoralizing was US Steel, which sank steadily through the session, to a new low since 1927. Active selling spread to rails about noon, with NY Central reaching its lowest since 1924, and Illinois Central sinking to a record low. Liquidation spread across the list with little support in evidence, and weakness prevailed at the close. Bond volume up but still below normal; US govts. slightly lower; foreign govts. somewhat irregular with rallying in Brazilian and Argentine issues; corp. highest-grade utilities steady but lower-grade weak, particularly rails, oils, and other industrials. Commodities irregular; grains finished narrowly mixed with wheat recovering after a sharp decline on erroneous press reports Farm Board planned to dump its entire surplus on the European market; cotton also down sharply after the Farm Board rumor but failed to recover. Copper buying quiet again; some sales at 9 1/2 cents; market action indicates price will stay below 10 cents until demand increases or small producers are brought under control. Zinc hits 30-year low of 3.625 cents/pound. Coffee up sharply after reports of continuing conference of leading Brazilian producing states.

Market observers pessimistic; it's felt "professionals are in control of the situation," and, while this remains so, tendency is to stay on sidelines and use any technical rebounds to lighten long positions.

Public liquidation was heavier than in some time. Selloff in US Steel intensified in the afternoon after news of production decline below 50%. Utilities weakened on higher volume in the last hour, and sharp drops occurred in leaders including AT&T and Consolidated Gas.

Jewel Tea has been under selling pressure lately in spite of reporting good 1930 earnings; co. had been subject of dividend rumors but declared regular distribution a few days ago [stock about 44, annual dividend rate $4, 1930 earnings $6.09/share]. Atlantic Coast Line RR broke badly after directors' meeting postponed action on dividend to await March results. Western Union reached new low since 1925.

With little positive business new expected in near future, any stock market recovery will probably be technical. Lack of volume on declines has been disturbing; many observers say the decline should end with heavier liquidation. Talk of heavy short selling may have caused some of the public to postpone some liquidation on theory market would rally when bear pressure was lifted.

It's uncertain if corporations are buying back stock, though some have been rumored to be buying small amounts. However, it's considered unlikely buybacks will be as large a factor as last year, when many corporations were buyers.

Important steel reports next week include earnings and dividend actions from US Steel and Bethlehem; it's clear earnings reports will make poor reading.

US seen likely to ease credit further if large export of gold from France threatens to follow recent $3.5M shipment; objective is to divert gold to where it's needed.

W. Woodin, Amer. Locomotive chair., says prospects for orders over rest of the year not very good as there are few inquiries outstanding, but "we are at least at the bottom of the business depression," and long-range results shouldn't be in doubt due to large number of obsolete locomotives.

A number of economists believe business is scraping bottom; they don't expect quick improvement, since summer is usually dull for business, but believe a further sharp decline is unlikely.

W. Atterbury, Pennsylvania RR pres., notes business decline has lasted almost two years; precedent certainly indicates we're scraping bottom and trend should turn upward before long. Wrong to single out rail difficulties in the depression; rails have been affected similarly to other industries, should recover similarly.

T. Woodlock says rails' overall return on property invesment in 1931 likely to be about 3%; situation may be regarded as emergency or as opportunity.

Last week's bank statements contained some encouraging signs: loans and investments reversed downtrend, increasing $206M to $23.051M, though bulk of the increase went into buying securities; demand deposits increased, possibly due to veterans' bonus money; purchases of non-govt. securities continued.

Harvard Economic Society says gains in seasonal spring recovery this year have been far less widespread than a year ago, but, since they started from a much lower base, should be longer lasting. "We anticipate that they will continue and spread and that an upturn of general business is in early prospect."

B. Hutchinson, Chrysler VP: "Automobile production and sales are steadily progressing toward what we regard as normal volume and may reach that point this summer." Expects more sustained production for remainder of the year than in previous years; inventories in very satisfactory shape.

Economic news and individual company reports:

C. Mitchell, Bank of US chairman, admitted under defense cross-examination that he attended the directors' meeting at which large loans to affiliates were approved; Mitchell previously contended he had little to do with those loans.

Farm Board chair. Stone denies reports Board will dispose of surplus in Europe; no change from previous policy of trying to sell 35M bushels of wheat abroad by July, and not supporting the 1931 crop. Believes wheat prices likely to increase based on low European storage and recent decline in Russian exports. Editorial: The Farm Board previously reassured the grain trade it wouldn't swamp European markets with its huge wheat surplus by pledging not to sell more than 35M bushels in the near future. Now, the Board reports foreign markets are so well supplied that it only sold 7M so far. Calculation of likely supply situation shows that selling the surplus now or anytime soon would ruin the market for our entire crop.

Rail freight loadings for week ended Apr. 11 were 737,934, up 9,423 from prev. holiday week, down 19.0% from 1930 week, and down 24.1% from 1929.

Steel production downtrend continued; week ended Monday was 49% vs. 50.5% prev. week, 52% two weeks ago, 77.5% in 1930, and 98% in 1929.

Texas Rail Commission to set East Texas allowable oil production at 130,000 barrels/day, increasing over time to 150,000; oil interests there agree to the limitation.W. Farish, Humble Oil pres., says East Texas field appears to be largest ever in US, covering 100,000 acres of highly productive area; oil of good quality; East Texas price likely to control prices of all competitive oils. Humble reduced purchasing prices on other Texas area oil by 5 - 20 cents/barrel but also reduced transport charges on its pipelines.

Refineries ran at 68.2% in week ended Apr. 18; stocks of gasoline declined 383,000 barrels to 46.384M. Crude oil production in week was 2.422M barrels/day, up 113,750 from prev. week but down 138,900 from a year ago.

S.W. Straus reports March construction permits in 568 leading cities were $153.9M, down 18% from 1930, refuting recent reports of increasing activity.

Cotton goods demand slowed up in March and April, almost coming to a halt in the past 2 weeks; this raised concern in the cotton trade as well as among those who had looked to textiles for a sign of general business revival.

Foreign exchange market strong; featured surge in Spanish pesetas after govt. cancelled recent $60M international stabilization credit unused, with the Fin. Min. stating domestic resources adequate to defend currency. Sterling continued strong against francs, though it's uncertain if gold shipments from France will result.

Some silver factors appear bullish. Worldwide monthly production in Q1 was new low of 15.227M ounces vs. 17.619M in 1930 and 19.017M in 1929; shipments to China were up sharply in March from earlier in 1931, though still well below 1930 levels.

Mississippi banks are conferring on temporarily taking on state bond payments as standoff between Gov. Bilbo and legislature continues.

Detroit index of industrial employment on Apr. 15 was 82.7, vs. 83 on Mar. 31, 82.5 on Mar. 15, and 109 on Apr. 15, 1930.

Foreign govt. and corp. financing in the US in Q1 was $171.2M, lowest in years and entirely made up of Canadian offerings.

Revenues of natural gas utilities in Feb. were $30.3M, down 13% from 1930; manufactured gas $32.8M, down 4.3%.

Soviet govt. announces $29M trade surplus in Q4 of 1930.

[Note: apparently corrects earlier item from 4/17.] NY State income taxes expected to decline $21M from total of $81M collected last year; inheritance taxes to increase $8M; state to end fiscal year with $40M surplus.

Q1 earnings/share: GE $0.38 vs. $0.50; General Foods $1.05 vs. $1.13; National Biscuit $0.70 vs. $0.70; IBM $2.82 vs. $2.82; Gillette (excluding "special reserve for obsolescence") $0.82 vs. $0.98; Chesapeake & Ohio Rwy. $0.65 vs. $0.91.

Companies reporting decent earnings: General Foods, National Biscuit, IBM, Northern States Power, Commonwealth Edison, Brooklyn-Manhattan Transit (BMT), Chicago Great Western RR (against industry trend), Briggs Mfg. (auto bodies), Parker Rust-Proof, Canada Dry Ginger Ale, Philadelphia Dairy Products, Sweets Co. of America.

At the galleries:

Brooklyn Museum will hold an exhibition of modern industrial and decorative art; among those represented will be Rockwell Kent, Frank Lloyd Wright, and Edward Steichen. Keppel Galleries is showing a comprehensive collection of Joseph Pennell's etchings. "His record of the earlier days of the American skyscraper is invaluable, although his line ... was hardly up to the requirements of fully interpreting the mounting Babylonian grandeur of Manhattan's lofty edifices." American-Anderson Galleries will be selling a collection of autograph letters, manuscripts, and first editions of Hawthorne, Melville, Twain, Burroughs, and Whitman; prize of the collection is an unpublished 4-page letter from Melville to his wife regarding "Moby Dick," considered one of the most important literary letters in existence. The galleries will also be selling G. McKearin's collection of early American glass, recognized as the finest in the world.

Movie:

Quick Millions - Yet another racketeering film, starring Spencer Tracy as Bugs Raymond, a truck driver who advances from control of one racket to another "until he becomes virtual dictator of gangdom"; trouble comes when he decides to steal the bride he loves right out of a church, leading his old sweetheart to conspire with his gang to have him "put on the spot." Excellent acting, but poor direction and camera work create confusion and dissipate the story's drama.

Jokes:

"Rose - Is he a good salesman? Dale - Good? Say, he could sell liquor permits at a prohibition convention."

"'She's seen 29 winters.' 'Oh, she's 40 at least.' 'Yes, but they go south every fall.'"

"'Jerry ain't much of a farmer, I'm afraid.' 'Naw, he keeps foolin' around with his crops so much he don't half tend to his fillin' station.'"

Tuesday, April 21, 1931: Dow 163.41 +1.04 (0.6%)

Optimistic statements special:

W. Gifford, AT&T pres., says company statisticians see current signs of improvement. Statement seen as significant because of wide scope of AT&T operations and care with which statistics are prepared; first such statement from Mr. Gifford since the depression began. Speaks out against undemocratic quick fixes: "In this depression, some folk of intelligence but little faith have been calling for immediate remedies, for strong leaders to make everything all right at once for everybody." These leaders would have "autocratic or tyrannical power. Uneducated people that can not attend to their own affairs must have such leaders. Educated peoples do not need them and will not tolerate them." The US won't fall for autocrats; instead, it progresses by the initiative of many. There are also those who want to return to the “good old times,” like the legendary Wufus birds that “fly backward to keep the wind out of their eyes, and are not interested in where they are going but only in where they have been.” And then there are those who threaten that if their course isn't followed “the bolshviks will get us.” However, the US doesn't look backward, and won't be directed by threats. Praises policy of maintaining wage rates to reduce impact on the most vulnerable.

J. Farrell, US Steel pres., speaking at annual meeting: “The gloom that pervades the atmosphere of the country hasn't settled on the roof of 71 Broadway” [Headquarters of US steel; now an apartment building]. Company has passed through two depressions more serious than this one; got through 1930 in reasonable fashion, earning $9.18/share while continuing huge construction program. March business substantially improved over Feb., and prices for many products have increased from Q1. Praises new company pension plan with mandatory retirement age of 70; at 68, Farrell will be one of the first senior executives affected.

Assorted historical stuff:

"Semi-official" Soviet Pravda newspaper says tractor plant at Stalingrad, one of largest in the world, has "practically broken down," producing fewer than 3,000 vs. annual capacity of 50,000. Soviet govt. to introduce new wage system known as "khozraschiot" on May 1 paying "according to individual skill and ability rather than on basis of communistic theory of equal division."

Two somewhat contradictory editorials: Increase in tariffs and economic nationalism is prompting concern by economists and statesman. There were 6 extensive tariff revisions by European countries in 1930, mostly upward, and all but two European govts. made some tariff changes. These may or may not have been reprisals against the US, but at the least, it seems that after our large increase other countries thought it necessary to preserve their markets for domestic producers. There's increasing recognition of the danger of this trend, but so far little ability to see another path. The US has long had a policy of protective tariffs, and it would be bad business to advocate sudden sweeping changes in that system. However, it's in the interest of business to recognize the current tariff hasn't met the promises of its supporters, and to make an impartial study of how to correct what's wrong. Discussion of Russian trade menace has "freed itself of certain hysterical tendencies manifested in high quarters last summer." This is positive, but on the other hand the Manufacturer's Export Assoc. goes too far in defending machinery sales to Russia by arguing their overall long-term effects would be positive for the US. This stance would require our miners, lumbermen, and oilfield workers to bear the sacrifice for other industries. The less restriction of trade "to mutual advantage the better. But there is such a thing as dumping, and so long as a country of such vast resources and population practices or threatens it, we shall have to be ready with defensive measures."

Poland and Belgium recognize new Spanish Republic. Spanish republican govt. plans cooperative system of peasant ownership of land expropriated from the aristocracy. Pesetas weak again.

Yet another opinion piece detailing failures of the Farm Board.

US immigration visas in March reduced from quota of 14,846 to 1,711 to avoid increasing unemployment; in fiscal year ended June 30, about 140,000 aliens who would have entered US under old quota will not receive visas.

Attendance during the 9-day Detroit air show was over 75,000. A total of 10,595 planes took off from the field during the show; about 5,585 people took sightseeing flights. Sales by 17 of 41 exhibitors were 636 aircraft valued at $1.653M.

The almighty conveyor, iconic symbol of mass production is regarded with awe in countries, like Russia, where industry is barely out of the "handicraft stage." Russians, great admirers of Ford, have coined the term "Fordisme" to signify the industrial efficiency that the conveyor exemplifies; even in the US, most believe carmakers pioneered industrial use of the conveyor. In reality, it was Parke Davis who first used the conveyor industrially, in Detroit, for mass production of pills.

Agriculture Dept.'s venture into sound film production, rather mysteriously, is starting with a film on Native American sound language. The mystery is explained when it's learned the audio will be a lecture by Major Gen. H. Scott explaining the action more fully. Film is to be a permanent record of the sign language.

An ordinary gas meter is made of 32 different materials, including steel from the US, sheepskin from Australia, sisal hemp from Mexico, silk from Japan or Italy, oils and varnishes from the tropics. Each meter contains 130 parts and requires 400 operations to make.

A long-running wage dispute in Bordeaux, France was recently settled. In 1919, a large cafe changed from a tip system to adding a flat 10% service charge; the wait staff was switched from being paid in tips to a small wage. One waiter asked for the 10% in addition to his wage; upon being denied he took his case to the council that deals with wage disputes, and won. The council thus "established the principle that if an employer charges a customer a service charge, the money should go to those who render the service."

Negotiations underway to establish New York daily newspaper devoted to the dry cause.

Market commentary:

Market wrap: Stocks opened weakly, failing to carry through on late rally Saturday; individual issues were pressured; US Steel hit another bear market low, dipping below 130, while Standard Oil of NJ went below 40 for the first time since 1928 and Auburn suffered another sensational plunge. Prices drifted in mid-day, then improved somewhat as US Steel rallied following positive remarks by pres. Farrell at annual meeting; improvement broadened across market in final hour, with good recoveries in GM, GE, and Auburn. Bond trading quiet; US govts. steady; European steady while S. American rallied, though Bolivian issues reacted after announcement of partial interest payment May 1; corp. high grade steady with some improvement in rails, while speculative issues were soft again. Commodities mixed; grains weak with wheat down sharply on report of beneficial rains, other grains down fractionally; cotton somewhat higher. Copper firmed slightly to 9 3/4 cents; buying more active. Crude rubber and zinc hit new lows.

Market observers remain unwilling to recommend buying, though many believe technical recoveries are likely when the market becomes oversold.

Public interest is growing in automotive shares, though conservative brokers recommend sticking to GM because the stock has held up well this year. However, rumors have been heard that "bears were planning to attack the stock to further unsettle general sentiment." Allied Chemical has been subject of bear attacks.

Trading continued to be mainly professional, and the afternoon recovery was attributed to short covering. In spite of market averages down near the bear market lows, brokers report few margin calls; one large broker sent out only 10 calls during the 3 week downtrend. Most selling has been by interests who bought in the past two months and were scared out by poor earnings news and dividend cuts. Opinion is spreading that recent short interest was not as large as thought, since many were selling against strong boxes [hedging stocks they already owned].

Bears encouraged by recent pattern of low volume on rallies; feel it's unlikely the downtrend will end until a relatively active 5M-6M share day of trading.

After recent widespread dividend cuts, even companies that have maintained dividends are finding in necessary to calm nervous shareholders. For example, National Lead pres. E. Cornish, who generally doesn't comment on dividends, issued a rather indirect statement that, if it became necessary to cut dividends, all of management's careful planning over the past 15 years will have been in vain.

Many industrialists believe stock weakness is influencing business conditions; over the past few months, several encouraging spurts in business have been followed by renewed bearish operations and a subsequent letdown in business; this may be happening again now. While influence of bear efforts on business is uncertain, it's known many business leader watch the market closely for signals.

Recent Labor Dept. report of 10% wage reductions in 50 manufacturing industries during March seen as hopeful sign. During depressions, wholesale commodity prices always decline first, followed by dividends, retail prices, and finally wages, at which point the end is usually in sight.

Col. A. Woods, chair. of Pres. Hoover's employment committee, says wage cuts by industry at this time would be "most unfortunate."

Economic news and individual company reports:

Household Finance (small loans) reports record Q1 earnings, in spite of bad times and adverse factor of veterans' bonus. As of Mar. 31, had $41M loans outstanding to 280,000 customers vs. $34M to 252,000 a year earlier. Bad debt charges were 1.02% in 1930 vs. 0.75% in 1929.

Judge P. Hatting of NY Supreme Court rules Bank of US stockholder C. Frank may proceed with suit to recover $100M from directors for losses due to mismanagement; this contradicts an earlier ruling by Justice Valente on another suit. Bank of US trial continues; defense attorneys question H. Lipschutz, officer of several of the bank's affiliates, on “various phases of” the disputed transaction by which an $8M bank loan to the affiliates was paid off.

Mississippi Gov. Bilbo says state won't default on May 1 bond payments, indicating he may relent and call special legislative session, or that Miss. bankers may tide the state over; banking circles are anxious to preserve the state's credit since it's about to start a 6,000 mile $150M-$200M highway paving program.

Foreign exchange market abuzz over unexpected $3.5M shipment of gold from France to US. While shipment in itself wasn't very useful, merely shifting gold from one center where it's in excess to another, it was seen as evidence the Bank of France was willing to allow export of gold based on market conditions. Bankers believe stage is set for heavy French exports of gold to other European countries. France had imported large amounts of gold over the past few years, bringing about a “form of inflation” and temporarily staving off the world depression; however, it has recently started “to be affected by the general world trend.”

France proposes plan to solve marketing and credit problems of European farmers through new $50M international farm credit co.; plan intends to make European agriculture self-supporting and keep European markets for it.

Poland accepts $44M loan from France for railroad construction.

Revolutionary govt. in Peru, following recommendations of Prof. E. Kemmerrer, decrees stabilization of sol (currency) at 28 cents vs. par value of 40 cents; also decrees reorganization of reserve bank.

B.I.S. seen opposing German bank's request to rediscount Soviet notes so Germany can increase exports there; official reason is that currency isn't stabilized.

Canadian report: Howard Smith Paper Mills Ltd. has acquired 965 sq miles of spruce pulpwood land from the Ontario govt., bringing their total holdings of woodlands to over 2,000 sq miles. Bell Telephone of Canada earnings are failing to cover dividends so far in 1931. Turner Valley oil field in Alberta "has passed its peak as an oil producer, in the opinion of best informed operators," though it still has long life as a gas producer. It's unlikely the field will pay back much more than development expenses. [Had another huge boom starting in 1936; last new well drilled in 2007.] Western coal mining interests demand protection from crude oil competition. One of largest coal mines located on Vancouver Island.

Western rails to sue ICC in Federal court in effort to annul large reduction in rated on grain transport that the ICC ordered effective June 1.

Drop in passengers carried by NY City traction cos. may upset calculations in proposed unification plan; revenues are likely to fall about 5% below plan estimate.

Major newsprint companies cut prices by $5/ton; estimated to cost industry $15M-$20M based on 1930 production; may encourage industry consolidation.

US investments in Honduras estimated at $40M, of which United Fruit Company accounts for $25M.

Companies reporting decent earnings: Household Finance, Beech-Nut Packing, Brillo Manufacturing, Telautograph (machines transmitting diagrams by wire), Butterick (sewing patterns).

Movies:

City Streets - Crime drama starring Gary Cooper, from a story by Dashiell Hammett. Cooper plays a rancher from the West who joins a city beer-running gang after becoming involved with Nan (Sylvia Sidney), daughter of a leading gangster. Suspenseful and full of surprises. Cooper has never acted better; supporting cast also convincing. Director Rouben Mamoulian tells story mainly with the camera, with one image dissolving quickly into another and spare dialogue.

Iron Man - Boxing picture starring Lew Ayres and Jean Harlow, directed by Tod Browning. Smoothly produced and well acted, but scenario lacks the punch to lift it out of the ordinary.

Jokes:

A small boy proudly returned home and told his parents he'd gotten a job at the blacksmith shop. They laughed, and said: 'You surely don't mean to tell us that a little fellow like you can shoe horses.' 'No,' said the boy, 'but I can shoo flies.'

"Bettie (just home from a holiday in Egypt) - And Auntie, it was so interesting; the tombs and pyramids and things were all covered with hieroglyphs. Aunt Louise - Oh dear, I hope you didn't get any on you, child."

"'I can't see why they have a man to steer from the rear of a fire department ladder truck,' said Mrs. Tellum. 'Well, it's a necessary thing , I suppose,' replied Mrs Backseat, 'but I agree with you that it's not a man's work.'"

Aristocrat - Speaking of old families, one of my ancestors was present at the signing of the Magna Charta. Little Ikey - And one of mine was present at the signing of the Ten Commandments.

Monday, April 20, 1931: Dow 162.37 +2.14 (1.3%)

Assorted historical stuff:

Some concern on stability of Spanish govt. prompted by King Alfonso's statement: "I renounce none of my rights ... I await the true expression of the collective opinion of the people, and, while waiting for the nation to speak, I deliberately suspend the exercise of royal prerogative and take myself from Spain." Some bankers see possibility of a coup d'etat on part of the King if Republican leaders are unable to hold their position. Heavy flight of capital reported.

"Definite report" received from Russia of delayed sowing of spring grain due to difficult weather conditions.

Conference of French political leaders considers countering Austro-German union by reaching mutually beneficial accord between agrarian Eastern European states and industrial Western European ones.

Editorial: Reports from China concerning silver are hopeful, along with recent gradual rally in price. Movement of silver back from Shanghai to interior is seen as evidence of greater security and growing strength of Nanking govt. The govt. has also set up a modern mint in Shanghai, and may be preparing to start coining silver; this would indicate it's strong enough to to suppress the ten old mints scattered around the country and operated as lucrative sidelines by various military chiefs.

7,500 miners strike against Lehigh Coal & Navigation to protest closing of Nesquehoning colliery.

Editorial by T. Woodlock: Sen. Nye intends to modify antitrust laws to “protect the small manufacturer ... and merchant.” This is a misunderstanding of the laws, whose purpose is to preserve competition and competitive prices, not guarantee success; competition “means ... a winner and a loser.” Our attitude toward antitrust law comes from the dominant theory early in the industrial revolution that “free and unlimited competition of individuals” assures “the greatest good of all”; this contrasts with the Socialist principle of complete cooperation. However, our much more complex modern economy requires cooperation to a large degree; “so far as the visible structure ... it is well on the way to the structure contemplated by orthodox Socialists. ... The modern problem is to reconcile” these principles; “somehow, the necessary planning must presrve the largest freedom possible for individual action ... so as to bring into play the largest possible percentage of the existing individual ability-potential.” [Note: Huh??]

Col. Arthur Woods, chair. of Pres. Hoover's Emergency Employment Committee, to resign next week and return to private life.

National Geographic Soc. reports US leads world with 49,000 miles of airways (including those to Central and S. America); France is second with 18,000. Newark Airport is world's busiest.

World's smallest airplane tested by O. Vecchiarelli at the Capo di Chino airdrome in Italy. Craft is a tri-plane; wingspan 10 feet; weight 396 pounds; 40 hp engine; speed about 100 mph; can fly 120 hours without refueling.

Only seven rail passengers were killed in train accidents in 1930, a record low and 29 under the 1929 figure.

Residents of Broad Street are heaving sighs of relief as its repaving is nearing completion. Within living memory, the street has been always been torn up and traffic obstructed for one construction project or another. The relief may be short lived, however, as Continental Bank & Trust is planning a new skyscraper at the southwest corner of Broad and Exchange, the Stock Exchange will reportedly construct another annex just to the north, and Radio Corp. may be putting up a huge skyscraper on its large plot at Broad and Beaver.

Plant producing fake Coca Cola beverage and labels raided in NY.

Cuba, "trying to hasten the time when American tourists may dispense with the wild gesticulations now necessary to make themselves understood," has imported 50 teachers from the US and made English compulsory in elementary schools.

In an experiment in esthetics, students at Lawrence College in Appleton, Wis. may now rent, for a nominal fee per semester, original paintings by Whistler, De Goya, Max Pollock, Bertha Jacques and many other noted artists in the college's collection. Program is made possible by a $2,000 gift from the Carnegie Corp.

Week in review:

Stocks down sharply, with US Steel and the Dow rail average hitting new bear market lows; decline attributed to poor earnings and seasonal downturn in steel production, though "nothing happened to change the belief of important banking and commercial interests that the bottom of the business depression has been seen." Insurance shares were active for the first time in weeks, and ended the week sharply lower, though decline in bank and trust shares was relatively moderate. Berlin stocks reacted after rallying in previous weeks, though there was some favorable business news, including large export increase in March, agreement on Russian export credits, and tax revenue up to expectations. London market had "one of the most stagnant weeks on record." Paris Bourse "under slow liquidation" on unsatisfactory industrial reports. Bond market featured firmness in highest-grade issues while others were highly volatile. US govts. gained substantially; new $275M issue of 1 7/8% Treasury certificates was oversubscribed almost 4 times. European govts. were notably steady, but the market "furnished considerable excitement" for holders of S. American bonds; Brazil issues declined severely, while Argentine rallied after breaking badly. Corp. highest-grade issues were firm, particularly utility and the best rails, but lower-grade and speculative were weak, with sharp breaks in many issues. Spanish peseta fluctuated wildly on fall of King Alfonso, uncertainty and skepticism regarding new govt. policies. Argentine peso broke after radical gains in elections appeared to imperil Uriburu govt. Weekly bank statements showed record low Fed. Reserve discounts outstanding of $132M. Money in circulation increased, probably due to veterans' bonus. Grain prices firmed after declining last week. Cotton was down substantially in first half of week, then steadied between 10 and 10 1/2 cents/pound.

Market commentary:

Market wrap: Leading stocks including US Steel were firm early. However, spoilsport bears "hammered away relentlessly," this time concentrating on trading favorites and driving them lower; Auburn plunged below 200 vs. 295 1/2 last Tuesday, while Industrial Rayon fell to less than half its 1931 high of 86. "Liquidation was dislodged" in many stocks, and selling spread across the list; US Steel hit another bear market low while J.I. Case and McKeesport were heavily pressured. Some rallying at the close attributed to short covering. Bond trading moderately active; US govts. firm; S American issues mostly lower, sharp break in Brazilian bonds, though Argentine improved; corp. highest grade utility and rail issues strong, lower-grade reactionary. Commodities firm; wheat up sharply, other grains firm; cotton up substantially. Butter hit another record low. Small copper sales made at 9 1/2 cents; large producers holding at 10 cents. Silver up 3/8 cent to 29 1/4.

Market observers generally pessimistic and advise against taking long side.

Opinion differs on immediate outlook for market; some have believed that the current decline will end in extreme dullness, but opinion seems to be turning to the idea that a selling climax will come before a change in trend. With the rail and industrial averages approaching the bear market lows, and recent pickup in activity as stocks were declining, bears are very confident and intend to “play their hand to the limit”; vigorous selling is likely to continue until support appears in volume. However, we're now in a range where investment buyers can confidently take advantage of depressed prices; as in the 1920-21 bear market, which this one has “closely paralleled,” this buying is likely to come before significant improvement in earnings.

Market break below trading range last week brought heavy selling by public "who follow the advice of chart students"; demand mostly restricted to short covering. Market was apparently not prepared for decline in steel operations and resulting pessimistic commentary, though the lull in production was predicted by some. Many small bull pools that formed several weeks ago are reportedly disbanding after "considerable difficulty in their operations."

Reports of upcoming cigarette price hike continue to circulate; latest gossip is that it will happen by midyear. United Fruit is recommended by some brokers based on increasing banana sales; stock is selling well below book value, though many other stocks are as well. Western Union's poor first quarter seen indicating increasing competition for cable and telegraph cos. from radio communication. Eastman earnings said stabilizing in spite of increased competition; co. has been developing new products which should increase future income.

March rail earnings are expected to improve over Feb., though some rails are reporting worsening traffic in April.

Editorial: The railroads have a clear need for "common action for the common good," as previously pointed out by T. Woodlock; one of their biggest problems is excessive competition by their own overzealous traffic departments. Situation is critical; net operating income fell 30% in 1930 and a further 46% in the first 2 months of 1931. Main obstacle to common action is "multiplicity of ownership." While public think of rails as highly centralized because US only has about 20 large systems, every section also has "little roads which can and do upset rates to get a little business." Rails need "intelligently planned and far-reaching consolidation."

Auto industry seen likely to have a flat production curve through summer, not reaching the peak of previous years but also not showing the usual declines in production in May; industry will be watching for effect of eliminating midsummer change in models. Inventories are very low and orders continue to come in steadily. Companies already planning production for May are holding it relatively steady. Q1 earnings will be mixed, but Q2 has gotten off to a good start.

Much of the public apparently bought stocks "on the installment plan" in 1929, and in most cases continued the payments, reducing their buying power. Some firms handling such buying report payments have progressed enough to release a large amount of buying power.

G. McLaughlin, Brooklyn Trust pres., suggests real estate loans by banks should be restricted to "small portfolio of marketable first mortgages" and short-term loans to well-capitalized second mortgage cos.; sees this as remedy for "sorest spot in the banking world today."

Commerce Dept. says tariff changes in 1930 are indication of increased economic nationalism; "sense of common distress" led some groups of countries to consider concerted action, but little result seen from this through end of 1930.

Darmstadter und Nationalbank, one of the largest German banks, praises cooperation of world's leading central banks in spite of political differences; hopes this gradually leads to more rational worldwide distribution of capital; Germany, since it's dependent on capital imports, must guarantee its complete safety.

Economic news and individual company reports:

After recent dust storms, the affected areas including Minnesota, the Dakotas, Iowa, and Nebraska, received some rain, greatly relieving the situation temporarily. However, conditions remain bad; subsoil is very dry and more rain will be needed to give crops a proper start.

Cash has poured into securities at an unprecedented pace during the depression; at least $17.5B of cash savings has been used to buy securities since Sept. 30, 1929; rate is over 50% higher than in the preceding few years. The US saved about $3B more during 1930 than in 1928, implying spending was at least $3B less; “clearly, the urge for self preservation overcomes the desire to spend ... this process has intensified the depression, but sooner or later it will end the depression.” While use of savings to pay off loans doesn't stimulate business, it's “not unlikely” this is nearing an end.

West Palm Beach, Fl. reports agreement on general principles with bondholders committee; defaulted bonds to be exchanged, par for par, for long-term bonds, interest payments to be reduced for a period of years; moratorium on principal payments. Mississippi faces financial crisis due to stand off between Gov. Bilbo and legislature. State is running short of cash, but Bilbo refuses to call special session to authorize bond issue unless legislature pledges to avoid all political investigations.

Maj. A. Spaulding reports Maine banking situation strong; no failures in past two years, few foreclosures or bankruptcies. Potato prices have held up relatively well compared to other agricultural commodities [a chief product of Maine].

Manufacturers at the National Aircraft Show in Detroit report marked increase in sales compared to last year. New low-priced "flivver" planes are drawing interest; Curtiss-Wright has sold about 175 of its two-seater "Junior," powered by a 30 hp motor, many of the them sight unseen. However, it's thought unlikely the number of commercial planes produced this year will exceed the 1930 total of 1,937 (total for 1929 was 5,357).

Youngstown district steel output to decline 1% to 43% this week.

Fisher's wholesale commodity index declined again to 74.6, vs. 75.2 prev. week and 90.7 a year ago. BLS reports index of retail food prices Mar. 15 126.4 vs. 127.0 on Feb. 15 and 150.1 a year earlier.

Nat'l Assoc. of Credit Men April survey reports seasonal improvement in sales and collections.

New NYSE stock issues in Mar. were $141.7M vs. $44.3M in Feb. and $702.3M in Mar. 1930.

World copper production in Mar. was 136,655 tons vs. 128,685 in Feb. and 129,390 in Jan.

Fed. Reserve says movement of money between rural and city banks is interfering with their policies due to higher reserve requirements at city banks. For example, during current period of liquidation and easy money, natural movements is from rural to city banks; this causes an increase in reserve requirements. Conversely, in 1927-29, when the Fed was trying to restrain credit, movement of money to rural banks reduced reserve requirements.

Russia is aggressively expanding exports of petroleum products to markets including China, Italy, Brazil, and India; "sales by Russia in these markets will be made at whatever price is obtainable." Russo-German trade credit agreement seen raising 1932 German exports to Russia 50% over 1931 level of about 500M marks; will give employment to several thousand in machinery and electrical factories.

French coal miners in Loire Valley end strike, accept small wage cut; settlement may allow reopening negotiations on coal cartel involving France, England, and Germany.

Allstate Insurance Co. subsidiary of Sears chartered in Illinois.

Barbizon hotel defaults on mortgage bonds; Chase Nat'l Bank has taken possession.

Companies reporting decent earnings: Loft (restaurants), Dome Mines (gold).

Theatre:

Precedent - dramatization by L. J. Golden of the Mooney-Billings case at the Provincetown Theatre on McDougall Street; "marks the reclamation of this Greenwich Village playhouse for the drama of social protest". Tom Mooney and Warren Billings, labor organizers, were convicted in 1916 of planting a bomb that killed 12 people in the Los Angeles Preparedness Day Parade. New evidence was found exonerating the men, but to date, the considerable effort on their behalf has only acheived the commutation of Mooney's death sentence to life imprisonment [In Nov. 1938, newly elected California Gov. Olsen ordered Mooney and Billings released from prison]. Play concentrates on Mooney, Tom Delaney in the play. First act shows his "framing", trial and conviction, second the story of newspaper editor Fremont's crusade to right the injustice [based on Fremont Older of the San Francisco Bulletin], third the hearing which leads to commutation of Mooney's death sentence; an epilogue is set in the present where new efforts toward freedom are underway. Fine acting and direction; writing is notable for "treating ... characters sympathetically without burlesquing" the villains or canonizing those fighting for justice.

Jokes:

"Willie - Did Edison make the first talking machine, pa? Pa - No son, God made the first one; but Edison made the first one that could be shut off."

"'Your medicine has helped me wonderfully,' wrote the grateful woman. 'A month ago I was so weak I could not spank the baby. Two bottles of your cure and I am now able to thrash the old man. Heaven bless you.'"

"During one of the many controversiess between President Lincoln and General McClellan the general arose in anger and asked: 'Sir, do you think me a fool?'

Lincoln calmly replied: 'No, but then I might be mistaken.' - Capper's Magazine."

"It seems that the brakeman and conductor could not agree as to the pronunciation of the town along their line called 'Eurelia.' when the train reached there, the passengers were startled to hear the conductor from the front end of the car call 'You're a liar; You're a liar' while the brakeman at the rear end shouted, 'You really are, You really are'."