Friday, May 1, 1931: Dow 151.19. +7.58 (5.3%)

Assorted historical stuff:

Editorial: Businessmen should be responsible and stop joining "college economists" and "maverick politicians" in their talk of "failure of the capitalist system" and "challenge to the existing order." It's precisely because most businessmen do carry on with "energy and an abiding faith that what has availed in adversity before will avail again that the country is assuredly weathering the storm." This isn't a call for "manufactured optimism" or for ignoring ideas from those "who know what they are talking about and honestly seek the common good." However, the loudest challenges now are coming from "from those who only have a dangerous half-knowledge ... or those who have their own private reasons for beating the air."

Editorial by T. Woodlock: Inequality of wealth began along with civilization, along with resulting discontent that has varied in intensity. However, starting with the French Revolution and culminating in the War, this discontent became a “permanent social force” and political power passed to the majority “unprivileged class.” This is likely to lead to some redistribution of wealth, which raises hard questions. As a moral matter, it's clear that industries shouldn't exist unless they provide “at least a decent human life” for workers. Also clear is the right to own property, but not extending to owning “superfluities as against another's grave necessity.” As a practical matter, material rewards are useful in our society as incentives for the gifted in business and industry to excel, and as capital for investment. It might help to shift the discussion from “heated generalities” to considering specifically what is the largest income and wealth that an individual can safely be permitted. [Note: not sure if he's serious or if this is a rhetorical device arguing against limits on wealth.]

Letter from a country banker responding to “veiled criticism”: A customer sent in an application for his veterans' bonus loan 2 months ago and has been waiting patiently since. In the meantime, he has to make payments on a Federal farm loan, so we lent him $50 on his unsecured note to prevent foreclosure. This would no doubt be considered bad business by your newspaper, but please let the writer know what you would do. [Note: I'm pretty sure what Goldman Sachs would do ...]

Editorial: Compulsory retirement at 70 was subject of two recent news items - US Steel adopted it, while NY State exempted the Governor's appointees so that William G. Rice (74) could stay in office. Some form of compulsory retirement is probably needed, but making it universal at 65 or 70 deprives the state or private enterprise of many able and willing workers. Examples could be given where men over 80 continued to do valuable and unique work; Judge Gary headed US Steel itself until nearly 80, and Justice Holmes at 90 is certainly a valuable member of the Supreme Court. The question may be better handled by a retirement board that judges cases on an individual basis.

Pravda reports Soviet spring sowing "quite unsatisfactory." Plan called for early sowing to be done by May 1, but only 10.4% of plan accomplished in Ukraine and 23.8% in North Caucasus. Cotton sowing especially poor.

Dr. H. Luther, Reichsbank pres., says chief cause of worldwide depression is maldistribution of gold due to reparations and war debt payments; "political payments form a constantly disruptive element in normal international economic relations."

Romanian King Carol denies he's planning establishment of dictatorship.

Several South Chinese provinces proclaim independence from Nationalist govt. of Chiang-Kai-Shek; announce establishment of "provisional revolutionary govt. of South China."

NY City keeps a daily record of air pollution in the form of dust particles suspended in the air. Using scientific instruments it is possible to count the number of dust particles in a small air sample, and extrapolate to the number of tons of dirt suspended per cubic mile of air over the city. Last year June had the dirtiest air, (daily average of 5.75 tons of dirt/cubic mile), and Dec. the cleanest, (2.65 tons). Ordinarily 8 am is the dirtiest time of day and noon-2 pm the cleanest.

Beware Hawaiian waters. The Prudential Insurance Co. reports 500 drownings in the "paradise of swimmers" in the past 11 years, more than double the rate for the U.S. as a whole.

Aviation Corp. of the Americas changes name to Pan American Airways.

An enterprising restaurant chain recently tried a new direct mail campaign. Having procured a list of the names and home addresses of a number of Wall Street men, they sent out letters in "chaste white envelopes almost of wedding invitation elegance." After a personal salutation the letter somewhat startlingly continues: "Do you like your eggs poached or scrambled? Or, do you prefer cereal? ..." No word as to success of the campaign.

"Trained monkeys are now used by Chicago burglars to squeeze through transoms ... and open locked doors from the inside, thus demonstrating the uplifting power of evolution."

A retirement home for members of the Canadian Royal Northwest Mounted Police is being built in Calgary and will open this summer. The fund for the home was started by former "Mountie" George A. Allen now residing in London. Currently, Seattle is a popular place for retired veterans of this service.

Market commentary:

Market wrap: Stocks opened tentatively firmer, with bears staging a cautious retreat in the first hour. Bears attempted to regroup about 11, staging a vigorous drive on American Can and briefly pressuring AT&T; however, selling didn't spread and covering resumed in late morning. Bear retreat turned urgent after another rumor of a Fed. rediscount rate cut after the close; this was later refuted, but many bears were unwilling to keep their position over the Fed. Reserve meeting; short covering increased in volume and rally became vigorous in the afternoon, with "sharp recoil" in US Steel and leading shares rising rapidly. Bond trading more active, prices improved across the list; highest-grade issues were near 1931 highs, while lower-grade reversed recent weakness. Commodities mixed; grains up sharply, corn especially strong; cotton touched new post-1915 low but then recovered some ground. Some copper sold at 9 3/8 cents; zinc hit new low at 3.35 cents; crude rubber mixed after touching new lows. Silver down 1/2 cent to 28 on Chinese revolt.

Market observers recommended using the technical rally to reduce long positions; advised use of stop-loss orders to protect accounts, raising limits on rallies.

While most brokers make it a matter of policy not to recommend short selling, and therefore not to discuss when to cover, one broker recently was unable to resist quoting the observation from "Amos & Andy" that "even Rome didn't burn down in a day."

Rally believed to be technical (due to short covering), with "no evidence of important support" or "long-pull buying in volume." The more successful bear operators reportedly were selling again during the afternoon rally. Long-term investors have apparently been discouraged by recent market action. Those die-hards who are taking a long-term view are advising "great discrimination in making buying selections." Even when the market turns, they believe that many stocks won't share in the upturn.

Among the pet traditions being broken by this market is that stocks with an increasing number of shareholders will eventually go up. US Steel as of close of Q1 had 149,122 common stockholders, up over 35% in 18 months, and brokers' holdings are down to a record low 14.73% of shares; however, the stock is down over 146 points from its 1929 peak of 261 3/4.

Royal Dutch sold off on dividend rumors; NY Central is drawing talk of another dividend cut later this year; Commonwealth & Southern dividend cut has caused increased concern that depression may be affecting earnings at utilities, which have been relatively resilient up to now. Companies selling below net quick assets include Bayuk Cigars and the 90-year old Yale & Towne.

Wall Street interested by intimations at the Chamber of Commerce meeting that next Congress will tackle antitrust modification; both business and the Street attribute a large part of current economic ills to the "antiquated Sherman act."

Demand for high-grade bonds and preferred stocks, even at low yields, indicates investors are "seeking assurance of a steady income on their funds" due to increasing uncertainty of dividends on common stocks. Municipal bonds continue in strong demand, though spread between "gilt-edged" and lesser-known communities is wide; NY State bonds due in 10 years yield 3.35%, while lesser-known city bonds yield 4%-5%. National City defends Land Bank bonds as safer than public perception; point out over 80% of farm loans made by Federal Land Banks came after farm land had already been substantially deflated (1922 or later).

Observers believe silver market stabilizing, statistical situation better; production expected to decline about 35% in 1931.

L. Anderson, Second Int'l Securities pres., says investment trusts [similar to mutual funds] becoming established on permanent basis in US in spite of current indifference. As in England during the 90's, struggle for survival is resulting in “more conservative practices as regards reserves, investment supervision, realistic income statements, and sensible dividend policies.”

23 representative rails are selling for an average price of 67 7/8 as of Apr. 29, down from 78 3/8 at end of March; earnings for year ended March 31 averaged $6.01/share; 21 of 23 are paying dividends but only 12 earned the dividends in year ended March 31.

"Inquiring Investor" has a favorable capsule review of Kreuger & Toll [Ivar Kreuger's company, collapsed in March 1932]. Controls Swedish Match, which in turn controls International Match; basic match business works by simple process of loaning money to countries in return for match monopolies, thus receiving interest income on loan and steady operating income from protected match business. Also has interest in huge Grangeborg mining property, controls a number of large European banks, has extensive real estate holdings, and has a sizable telephone business through recent L.M. Ericsson acquisition. Earnings have been maintained through the Depression; future seems well assured, since industry is stable and management capable and aggressive.

Economic news and individual company reports:

E. Vogel of C.I.T. defends installment selling as not contributing to depression any more than other modern business methods such as automation, advertising, and the Federal Reserve system. Method is "aid in good times and in bad times"; safety has been demonstrated by record of past 18 months; 95% of obligations on Oct. 31, 1929 were paid off within a year.

The NY State Banking Dept., caught shorthanded due to the crush of bank examinations since the unsettlement of last fall. has been temporarily borrowing employees from local banks to help out. The banks have been kind enough to lend their employees out for free. Bank of US prosecution rests case; defense to begin. Committee formed for customers of failed West & Co. to enable accounts to be transferred to other brokers, avoiding “endless litigation and expense.”

NY Banking Superintendent Broderick warns savings banks to be prepared for possible heavy withdrawals by buying more short-term govt. bonds.

Fed. Reserve of NY annual report says policy in 1930 probably less influential than in 1929; the Reserve System in 1928-29 took a number of vigorous steps to restrain excessive bank credit; these were reversed in 1930. However, easy money policy that normally might have led to sustained strength in bond market and hastened recovery was thwarted by “series of untoward events” including drought, banking difficulties, political disturbances abroad, and worldwide depression.

Money in circulation Apr. 29 was up $13M to $4.625B, total Reserve Bank credit outstanding up $25M to $936M. Member banks in NY City report brokers' loans down $114M to $1.730B; loans on securities to non-brokers up $22M to $1.735B.

Veterans' bonus loans now amount to $971M and total will exceed $1.1B.

Dow average of 8 iron and steel products was unchanged at $44.23, low for 1931, though some products not in the average declined. Steel scrap markets continued to weaken, though price declines were small.

Shifting of management of Continental Shares from Eaton-Otis interests to Cleveland bankers seen increasing chances of amicable settlement of Youngstown-Bethlehem merger dispute (Continental has large holdings of Youngstown). Continental will probably shift from holding company that attempts to affect managements of companies it invests in to a more hands-off investment trust.

D. Willard, B.&O. RR pres., says New England rails should form own group rather than being absorbed in Eastern rail consolidation.

D. Kelly, Nat'l Retail Dry Goods Assoc. pres., reports about 14% of all merchandise purchased at US department stores is returned by customers, amounting to $1.5B annually; this greatly increases retail prices.

First loan for new international mortgage bank Compagnie Centrale des Prets Fonciers, sponsored by French interests, successfully floated (for $5.6M).

Bank of England continues to add to gold reserves; in the past week, total increased 488,000 pounds sterling to 147.228M; movement of gold from France expected to further add to reserves.

Foreign currencies strengthened again; long-awaited Paris-to-London gold movement still believed imminent.

French steel production in March was 722,000 tons vs. 693,000 in Feb. and 848,000 in March 1930.

F. Sackett, US ambassador to Germany, says its position has improved in recent months and conditions look more hopeful. A. Arnhold, German banker, says conditions throughout Germany have definitely turned upward; optimism gradually increasing, although recovery will undoubtedly be slow.

Bethlehem Steel reports Q1 earnings 6 cents/share vs. $0.17 in Q4 and $2.60 in Q1 1930; cuts quarterly dividend to $1.00 from $1.50; sees both company and general business continuing roughly at present levels for near future, without pronounced pickup or falloff.

Decision against Radio Corp. in patent antitrust case may affect govt. suit against merger of radio operations in early 1930 by Radio, GE, and Westinghouse.

Bellanca Aircraft announces orders for two of its newest product, the "Airbus."

J. Harman, Handy & Harman (silver dealers) chair., retires on his 87th birthday after serving the company for 64 years.

Companies reporting decent earnings: United Gas Improvement, Bell Telephone of Pennsylvania, Irving Air Chute, Consolidated Cigar.

Film:

Born To Love - RKO-Pathe, starring Constance Bennett, at the Mayfair. "Histrionics seldom surpassed on stage or screen. Sentiment drips from the scenario like honey from the comb." Doris Kendall (Bennett) is a nurse at a British hospital during the war. She falls in love with a US soldier, Barry Craig. When Craig is reported missing she marries Sir Wilfred Drake to protect Craig's unborn child. Reappearance of Craig at the end of the war reignites Doris' love. Drake divorces Doris but keeps the child. After 2 years of lonely struggle Doris is granted a visit with her son, but he dies suddenly on the eve of her visit. After a night of anguish roaming the streets of London Doris arrives home to find Craig. She is now free to marry and go with him to America. Perhaps unfair to criticize the film for melodrama and overacting, since its purpose "is undoubtedly fully realized, namely, to set the feminine tear-glands operating overtime"; few spectators are likely to be disappointed in the lack of food for deep intellectual thought.

Doctor's Wives - Fox, starring Warner Baxter and Joan Bennett [sister to Constance], at the Roxy. Theme of the picture appears to be that attractive surgeons are so beset by the advances of female patients that their wives lead depressing lives [Note: thank goodness they don't make silly shows about that anymore!]. Occasional moments of inspiration but excessively maudlin and silly dialogue and melodramatic ending make the result unconvincing. Production quality good, particularly a convincing operating room with balcony observatory in which hero must perform epoch-making operation near end of the film.

Jokes:

"'When I was twenty, I made up my mind to get rich.' 'But you never became rich.' 'No, I decided it was a lot easier to change my mind.'"

"'I want to buy an alarm clock which will awaken the maid without disturbing the other members of the household.' 'Sorry, madam but that kind is not yet on the market. The only alarm clocks are those which awaken every one in the household except the maid.'"

"Mother - Why are you reading that book on the education of children? Son - To see if you are bringing me up properly."

"'Now,' she asked, 'is there any man in the audience who would let his wife be slandered and say nothing? If so, stand up.' A meek little man rose to his feet. The lecturer glared at him. 'Do you mean to say you would let your wife be slandered and say nothing?' she cried. 'Oh, I'm sorry,' he apologized. 'I thought you said slaughtered.'"

Thursday, April 30, 1931: Dow 143.61 -4.34 (2.9%)

Assorted historical stuff:

Commerce Sec. Lamont delivers address to Chamber of Commerce that was reviewed carefully by Pres. Hoover. Favors high wages; "most prosperous periods of our industrial history have been coincident with high wages and shorter hours." Expresses confidence in gradual recovery; says business currently about 25%-30% below normal and unemployment about 10%. Other speakers proposed modification of antitrust laws, more industrial planning, and gave mixed reviews to unemployment insurance as possibly of benefit to some employers but no cure-all.

Editorial: Henry Ford's adherence to the high wage theory that "has made his name a heroic legend the world over" may be right for the Ford business, but is questionable as a wider policy. Most of the products of wage earners must in turn be bought by other wage earners; in the current depression, much of the population has lower income due to unemployment or reduction in hours worked, but still is being called on to absorb the production of high wage earners. This imbalance is harmful and should be fixed by more widespread wage cuts in industries where the lower costs would help marketing, such as construction. “It is inequality of buying power among large segments of the population that now holds business activity in check.”

Washington report: Col. Woods' resignation from Pres. Hoover's emergency employment committee comes after unconfirmed rumors of disagreement with some Adminstration policies; the new chairman, F. Croxton, is a longtime Hoover associate. Democrats may be wavering on taking definite anti-Prohibition stand. J. Raskob wanted to do so when the Dem. Nat'l Committee met 6 weeks ago, but was prevailed on to postpone action by other party leaders; now, his right hand man J. Shouse is saying economic issues will dominate the 1932 campaign. Vacancies on the Fed. Reserve board are subject of a conflict between farm organizations, who want one vacancy to be filled by a farm representative as previously, and Midwest financial interests wanting representation on the board. Rep. Wright Patman of Texas proposes impeaching Treasury Sec. Mellon.

Editorial: Business sentiment increasingly demands revision of the Sherman antitrust law. Whatever the need for the law when Pres. Harrison signed it in 1890, it's now a handicap to industry and should be revised, while still protecting people from monopolistic oppression. Framers of the law followed the example of the Constitution and made it very brief and broad. However, after 40 years, "the statute intended to prevent restraint of trade has in some respects become a restraint upon industry; intended to prevent cutthroat competition," in some cases it has compelled it, for example in the oil industry. "Why should a restraint that is beneficial to the public welfare be illegal? ... The fundamental purpose of the law is to protect consumer and producer, but when ... it compels a producer to commit suicide the purpose of the law is not attained."

Employees of Big Black Mountain coal mines (not unionized) are working under protection of armed deputies after a week of "sporadic disorders" and an outbreak yesterday in which hundreds of shots were fired. United Mine Workers have tried to organize the mine unsuccessfully.

Brazil imposes press censorship after “small revolt in Sao Paulo.” Bankers are “far from satisfied with the Brazilian financial situation”; gold reserves are exhausted, and, while the country is running a trade surplus, it's exceeded by debt service.

United Fruit reports conditions quiet in districts where it operates in Honduras and Nicaragua.

Reminiscence by H. Alloway on early career of Samuel Insull, young assistant to Thomas Edison (Insull is now 76 and Edison 84). "Sam was probably the most elastic secretary that Wall Street ever knew. In his early 'prentice days, Edison finance was the wonder puzzle. Inventor man didn't care a Hannah Cook for money - his whole five normal senses (and a few extra senses uniquely his own) were keyed to 'stepping up' discoveries, applications, ... manufacture sequences. Young Insull just had to be a buffer for one who couldn't remember business appointments."

Chlorophyll is known to be a substance in plants that enables them to turn carbon dioxide and water into sugars and starches. But just how does it work? This may not remain a mystery for too much longer. Scientists at the Agriculture Dept. have learned to extract chlorophyll in large quantities and are sending it to labs all over the country for other scientists to experiment with. It's hinted that knowledge of the process may allow producing plant products synthetically.

A petition is before the King of Hejas to rebuild the Damascus-Medina-Hadj Railroad which was destroyed in the World War. The road began in, traversed and ended in desert, and carried no freight; its sole purpose was to transport Moslems "making the Hadj", the religious pilgramage aspired to by all Moslems. Since the rail was destroyed, Moslems have had to make the Hadj on foot, a wearying journey. The railway itself was designed by a German, built by Italian, Polish, Hungarian and Turkish engineers using Italian, Greek, Turkish and Montenegrin labor, had its rails made in the US, France, and Belgium, and its engines in Germany.

Frank D. Whipp, Illinois superintendent of prisons, says state will soon equip prisons and reformatories with radios. These will be used for entertainment purposes and in prison management, allowing messages to be given to all prisoners simultaneously.

The Audubon Society of America, is trying to save the antelope herds of the high sage plains of Northern Nevada and Southern Oregon from extermination. Plan involves gaining control of 48 sq miles of land that forms the antelope's native range. The Boone and Crockett Club of New York is participating in the financing and the Interior Dept. has closed off lands in the area designated as best suited for antelope; area will also be sanctuary for other birds and animals.

Heartwarming story of recently deceased man from San Francisco whose will stated "I want everything to go to the Offens Hom of San Francisco" is somewhat tarnished by lawsuit from relative contesting will on grounds there is no such entity as the "Offens Hom."

Market commentary:

Market wrap: Stocks opened under severe pressure; US Steel opened down 2 7/8 after poor earnings report and continued to sell off rapidly, ending the day down 9 1/8 to 115 1/4. Other sections of the list weren't as bad, but the whole market was badly unsettled by the plunge in Steel; new bear market lows were hit by Westinghouse and Bethlehem; utilities were weak after Commonwealth & Southern dividend cut; many issues came under attack, and stop-loss orders increased the selling. Bond market recent trends continued; US govts. firm near year's highs; European issues steady to firm while S. American gained on late rally; best-grade corp. steady while heavy selling continued in lower-grade and speculative issues. Commodities mixed; grains narrowly higher; cotton down substantially. Lead, zinc, and crude rubber weak; coffee rallied sharply.

Dow industrial average closed at a new bear market low; there was one new yearly high (Noranda Min.) and 223 new lows.

Market observers recommend sidelines; advise against going short on expectation market may have technical rally toward end of week if liquidation is completed.

Brokers reported "plethora of frightened selling"; steady decline has disturbed those believing "some unfavorable development is hanging over the market." Public liquidation was particularly heavy in US Steel. Demand was heavy in the stock loan market (in which short-sellers borrow stock), with a record number of stocks at a premium (indication of heavy demand).

US Steel was subject of dividend fears after showing $14.0M deficit in Q1 including dividend payments. Bears argued Q2 earnings were likely to suffer from lower steel production in April; prices have also reportedly weakened. Westinghouse has been subject of severe bear pressure day by day; latest talk is that dividends may have to be eliminated by end of 1931. General Foods earnings said to benefit from slower decline in its product prices than in raw materials it uses. American Can held up relatively well until recently as shipments this year were only about 5% below 1930, but it has weakened on reports of lower sales in the past two weeks. Gillette said to be subject of accumulation by "New England interests who are said to be more confident of the long-term outlook for the company than they have been in a long while."

Sun Life Assurance of Canada, manager of one of world's largest investment funds, denied numerous recent rumors it was selling its common stock holdings.

After low earnings and dividend cuts by vast majority of steel companies in the first quarter, question of cuts in wage rates is likely to arise. However, hasty action is unlikely; independents insist action must first be taken by US Steel, and officials there are inclined to view cuts as a last resort; US Steel finance committee chair. M. Taylor is in Europe and not expected back until June.

T. Woodlock spoke at Chamber of Commerce meeting on principles for fair competition in transportation: public entitled to the most economical possible form of transportation and users should generally bear full cost, not public. US system doesn't fulfill these principles, discriminating against rails in several ways.

Freight loadings report for April 18 week was somewhat encouraging, showing a new yearly high of 760,002 cars, vs. previous high of 741,942 in the Mar. 21 week with gain largely due to miscellaneous freight; however indications are the next week will show a decline again.

Severe dividend doubts were apparent in the yields available in NYSE-listed shares. Of a total of 646 dividend-paying listed shares, 460 had yields of 6% or more, 260 had yields of 8% or more, 152 had yields of 10% or more, and 37 had yields of 15% or more.

Economic news and individual company reports:

Eye-opening stats on what states pay in taxes to the Federal govt. vs. what they get back from it: Idaho paid $868,000 and got $1.315M; North Dakota paid $556,000 and got $1.704M; Illinois paid $247M and got $4.3M; New York paid $928M and got $8.7M .

Bank of US depositors and other creditors will soon receive claim forms; these should enable them to receive an initial cash liquidating dividend, though this probably won't happen until September. About 125,000 of 400,000 depositors took advantage of the 50% loan offer from NY Clearing House banks. Justice Valente dismisses $50M lawsuit by Bank of US stockholders against NY Banking Superintendent Broderick for negligence. Five partners in Prince & Whitely (broker that failed in Oct.) questioned by Federal Grand Jury investigating the firm's failure. Receiver [bankruptcy] asked for Wheat Farming Co. of Hays, Kansas, largest farming corp. in the state.

Fed. Reserve governors continued spring meeting for third day; will meet with members of Reserve board to take up policy matters before adjournment.

Estimate of total class 1 rail operating income in March shows sharp improvement from Feb.; total of about $45.3M was up 66% from Feb. and only showed a decline of 25.3% from a year earlier, vs. a decline of 54.2% in Feb. from a year earlier. Rail freight cars ordered in first 4 months of 1931 were 4,958 vs. 28,570 in 1930; passenger cars 4 vs. 431; locomotives 25 vs. 251.

Counsel for the four rails involved in the Eastern rail consolidation plan met all day Tuesday; tentative draft prepared "with a view to ironing out further legal details" before presenting plan to the ICC; observers say plan is at critical point. While announcement was made in Dec. that agreement was reached except for "minor" details, this was done under tremendous pressure from the White House and some of the "minor" issues have turned out to be difficult to resolve.

Steel production for week ended Monday was 48 1/2% vs. 49% prev. week, 50.5% two weeks ago, 77% in 1930, and 101% in 1929. Weekly steel reviews reported developments “less uniformly negative” as downtrend slowed. Prices show weak tone, though actual declines mainly limited to scrap. Automotive buying lower; reports persist of decline in Ford steel demand.

US electric output for week ended Apr. 25 was 1,647 GWHr, down 3.1% from 1930, vs. a 4.6% decline prev. week and 3.1% two weeks ago.

World gold production continued at record pace in March; estimated at 1.757M ounces vs. 1.697M in 1930; Canadian 230,000 ounces vs. 170,000.

Texas Railroad Commission raised allowed production from East Texas to 160,000 barrels/day, 30,000 over original allowable. Some water has appeared in several wells, causing some to lower estimates for ultimate productivity of the field.

Foreign currencies reacted after a few days of gains; it's still believed the long-awaited Paris-to-London gold movement is imminent.

French Cabinet approves $40M loan to Yugoslavia to strengthen French counterproposal to Austro-German customs union.

Germany to reduce wheat import duties 50 cents/barrel from current $1.62 due to shortage of domestic supplies.

Argentine trade deficit in Q1 was only 1.420M gold pesos vs. 11.263M in 1930; total trade decreased 17%.

Pres. Ibanez of Chile accepts resignation of 5 ministers and organizes new cabinet to carry out economy program.

Mexico raised duties on almost all agricultural imports by over 100%.

Total fire insurance risks carried by all companies in US estimated at $201B, or 59% of total US wealth.

US car accident deaths in 81 cities in month ended April 18 were 669 vs. 625 a year earlier.

NY City comptroller says won't sell new long-term bonds until fall, relying on short-term borrowing until then; this had bullish effect on existing long-term issues; upcoming $52M four-year sale expected to draw very strong interest.

C. Nichols, former Allied Chemical chair., denied family had disposed of its interest in Allied in spite of his leaving the board of directors.

Goodrich joins Goodyear in reporting encouraging uptrend in tire sales in March and April, though profit may be hurt by lower prices.

Radio Corp., after unfavorable ruling by the Supreme Court in patent-related antitrust suit by DeForest Radio, faces important case before Federal Radio Commission that could lead to its loss of 1,400 radio licenses held by subsidiaries. Govt. counsel said breakup of the entire company would definitely not be sought.

Companies reporting decent earnings: Standard Brands, Trico Products (auto equipment), Plymouth Oil.

New books:

“Business Adrift” by W. Donham, Dean of the Harvard Grad. School of Business Admin. - Presents plan for saving capitalism though large-scale public works paying relatively low salaries, to be initiated by govt. when depression hits private industry. Recurrent severe depressions “must be prevented if capitalistic civilization is to endure.” Makes good reading, though “professors of the dismal science” may be too influenced by Russia in “their furious search for 'a plan.'” Speaking of Russia, several interesting volumes have come out with conflicting reports on success or failure of the five-year plan started two years ago; some go so far as to accuse the Russians of actually practicing state capitalism.

New York Theatre:

The Theatre Guild will produce Eugene O'Neill's trilogy, Mourning Becomes Electra, next season. The trilogy contains three full length plays with the same principal characters, requiring the same actors to play throughout. Aside from one act set in a clipper ship, all the action takes place in a New England seaport town at the close of the Civil War.

Paris Theatre:

The boulevard music halls are "opening those undressed warm weather shows which are designed for tourist trade." The Folies Bergere unveils the new revue L'Usine a Folies (folly factory) which is "just a little more undraped than" Paris on the Move, at the Casino de Paris, where Josephine Baker leads a "procession of more or less exotic and erotic episodes." However, the legitimate theatre is “conforming to the long-skirted ... mode ... if it is not altogether going back to crinolines”; trends include maternal and poetic dramas, as well as a “back to tragedy” movement and “reverently and beautifully staged” revivals of classic dramas including Misanthrope and Phedre. Continental theatre is undergoing a transition with a clear division between the music hall and the theatre. While music halls are thriving presenting revues “gay and gorgeous, squanderous in talent” and scenery and “vying to outdo each other in bizarre and daring spectacle,” theatre is increasingly austere. Plays are no longer larded with cloying sentimental songs; leading actresses are mature and poised rather than "'cuties' with treble voices. ... While the boulevard music hall is more nude and quick stepping even than Broadway, the real theatre of France is trailing classic drapery and moving regally across boards once trod by Rachel and Coquelin and Sarah Bernhardt." This may not please the summer visitor but Parisians are welcoming the change.

Jokes:

"Mrs. Brown (with newspaper) - John, it refers here to some gunmen taking a man for a ride. What kind of a ride? Brown - A slay ride, my dear."

"Mother - You know, Geoffrey, Norma is nearly seventeen years old, so today I had a frank discussion with her about the facts of life. Father - Ah! Did you learn anything new?"

Wednesday, April 29, 1931: Dow 147.95 -1.83 (1.2%)

Assorted historical stuff:

H. Bancroft, Wall St. Journal publisher, returns from 30-day, 10,000 mile US trip covering 27 of the 48 states. Wall Street "easily the bluest spot in the country." East and West Seaboards have fared relatively better in the depression than the middle region between Alleghanies and Rockies. New England brightest spot in the country. Drought on West Coast is serious; industry at low ebb due to conditions in oil and lumber; however, people "manifest plenty of courage" and unemployment not as serious as in the East or Midwest. Farm conditions east of Mississippi look fine, though in areas where drought was most severe last summer there has been "normal rainfall, but no excess, and if the coming summer should be a dry one, it would make things uncomfortable, although just at present there is nothing to worry about." Crop conditions "all right" in Missouri, Kansas, and Southwest, but "not so good" in Iowa, Nebraska, Minnesota, and Dakotas.

Editorial: British Chancellor Snowden's budget closes the deficit without major new taxes, but by using a number of "admittedly temporary expedients and the hope of reviving industry." For example, shifting income tax dates to collect a year and a quarter's worth of taxes in a year "is a trick which will work only once." However our ability to criticize him for not tackling fundamental problems is weakened by the prospect that we're likely to "take refuge in a similar opportunism." In fact, "Mr. Snowden's deficit of $115M ... is a shabby little affair compared with the magnificent gap of $800M across which Americans face the federal Treasury this year."

Rep. C. Ramseyer (R, Iowa) advocates gift tax and increased estate and inheritance taxes to make up Treasury deficit.

Editorial: The Farmers Nat'l Grain Corp. (subsidiary of the Farm Board to support cooperative grain marketing) annual report is regrettable; although it shows a profit, "officials studiously avoid reporting any details upon which a judgement can be formed" on success of cooperative marketing, particularly costs to handle grain and prices paid to farmers. "The people of the US have invested $500M in an experiment designed for the benefit of agriculture. That experiment rests upon cooperative marketing ... Those who provided the money have a right to know what kind of service is being given the farmers ... How can the public know whether its $500M experiment is a success or a failure?" Another opinion piece by the [fortuitously named] D.C. Harrower covers much the same ground.

Editorial by T. Woodlock disputing charges against electric utilities made by Pennsylvania Gov. Pinchot in his weekly radio address; one concerned cost of building lines and the other overall cost of providing power.

J. Mooney, GM VP and manager of exports, says Russia "is an excellent customer of the US now" and trade can be "remarkably expanded." Calls for abandoning "economic absurdity of being willing to ship goods ... with the presumption that they can be paid for in anything but goods or services we accept from them." Russia and Italy sign renewal of commercial treaty with new clauses expected to double trade during remainder of 1931; Italy to export 350M lire in next 8 mos. Metropolitan-Vickers Electrical of London contracts with Soviet government to provide technical assistance in manufacture of electrical equipment.

NY Gov. Roosevelt dismissed charges of "misfeasance" against NY Mayor Walker that had caused the City Affairs Committee to petition for his removal. Gov. Roosevelt signed Cornaire bill setting up state power authority for development of St. Lawrence River power.

The recently enacted Watres airmail law fixed a curious situation in which airmail contractors were paid more than postage, providing incentive for a contractor to repeatedly airmail himself the heaviest possible items back and forth from New York to San Francisco.

Largest oil-burning locomotive in the world, built by Canadian Pacific Rwy., will be ready for service in the Rockies soon. Combined weight of engine and tender is 785,000 pounds; overall length of the two is 99 feet 3 3/4 inches; this is an increase of 44,800 pounds and 1 foot 2 inches over the largest previous locomotive.

Market commentary:

Market wrap: Stocks were highly irregular most of the day; trading was quiet as many awaited the US Steel report after the close. Firmness in some spots, including US Steel itself on belief dividend would be maintained, was offset by new weak points, including Allied Chemical and Union Carbide; liquidation by public continued. However, leading shares firmed as the session progressed and a fairly broad recovery took place in the last hour. Bond market tone improved after Fed. Reserve cut in bill rates; US govts. firm at close to 1931 highs in spite of record Treasury financing; European steady but S. American slumped, sharp break in Chilean; corp. highest-grade strong, readjustment in lower-grade issues continued but selling was less urgent. Commodities mixed; wheat up slightly but other grains mostly lower; cotton little changed. Coffee down sharply. New record or long-time lows in lead, crude rubber, silk, butter and eggs.

Dow industrial average closed at a new bear market low; there were 4 new yearly highs and 208 new lows.

Although US Steel maintained its dividend, earnings report was much worse than expected; this is seen likely to depress the market today.

Loan market (in which short-sellers borrow stock) was active, with US Steel loaning at a record premium of 1/16 (indication of high demand); other issues in demand were Coca Cola, Eastman Kodak, and various rails. Brokers in the loan market reported increasing short sales by smaller traders and public. While reports recently circulated of covering by large bears, the loan market doesn't indicate this; total short interest is estimated at 3M-7M shares and there's a record number of stocks "loaning flat" (indicating high demand by borrowers). Bears seem to be confident in their position and not inclined to cut their positions. On the other hand, some contend the short interest, while large, isn't as large as thought, since some sellers have actually been liquidating stocks that they later delivered from “strong boxes.”

Based on precedent, a period of dullness without much headway in either direction is expected when current liquidation ends.

Some of the more suspect railroad bonds, though still paying interest, are selling to yield from 7% to as much as 27%. A considerable amount of selling has affected relatively high-grade rail bonds that are feared to be in danger of losing legal status as allowed investments for savings banks.

Observers believe GM may be able to cover first-half dividend requirement of $1.50/share after reporting $0.61/share earnings in Q1; some divisions including Chevrolet and Frigidaire have been doing well. Allied Chemical weakness attributed to withdrawal of Nichols family from prominent connection with company. American Chicle, going against prevailing trend, is drawing talk of a possible dividend increase; Q1 earnings were $0.97/share vs. dividend requirements of $0.50. American Cigar was strong on anticipated success of low-priced Cremo cigar, though another operating loss is seen this year due to record advertising.

Report of decline in building contracts for first half of April has drawn attention, since it contrasts with usual rise at that time.

R. Holmes, Texas Corp. pres., says in favor of interstate compact among oil states to limit production.

Economic news and individual company reports:

US Steel reported Q1 earnings of $0.05/share, vs. $0.70 in prev. quarter and $3.44 a year earlier. Regular quarterly dividend of $1.75 declared.

Failed broker Pynchon & Co. sued by Chicago brokers to prevent the use of assets delivered shortly before the failure. Federal Grand Jury indicts Charles V. Bob, bankrupt former runaway stock promoter, for mail fraud and conspiracy; charges carry maximum penalty of 52 years.

NJ Gov. Larson signs Reeves bill to protect municipal bond investors by giving a state commission wide powers over municipal finances in case of default. Bill was passed in response to North Bergen troubles, but seen as constructive step for investors in general. Florida Senate and House receive bill providing first step in relief plan for local govts.that defaulted on bonds; would permit refunding of bonds for up to 60 years.

Weekly bank statements showed continued decline in loans, increase in non-govt. securities. Arkansas state banks report total deposits Mar. 25 of $87.3M, up $2M from Dec. 31 but still $30M below last Sept., prior to series of bank failures in the state.

Rail freight loadings for week ended Apr. 18 were 760,002, up 22,068 from prev. week, down 14.8% from 1930 week, and down 24.4% from 1929.

Refineries ran at 68.1% in week ended Apr. 25; stocks of gasoline rose 67,000 barrels to 46.451M. Crude oil production in week was 2.423M barrels/day, up 600 from prev. week but down 167,500 from a year ago.

BLS reports fewer manufacturing wage cuts in month ended Mar. 15 than in prev. month (175 cos. in 38 industries vs. 228 in 43 industries).

Machine tool market trends mixed, with buying restricted to absolute needs.

European countries including Germany, Britain and France are attempting to lower wages and cost of living to match the collapse in wholesale prices. Germany took the lead in these efforts, while France has only recently realized the “necessity of cheaper production in order to maintain her export trade.” However, even in Germany, the 8% decline in cost of living over the past 15 months was far begind the 15% decline in wholesale prices.

Sharp gains in sterling vs. francs over past few days has made the long-awaited movement of gold from France to Britain appear imminent. It's also believed that this might be followed by a round of discount rate cuts in Britain, the US, and Germany.

Registered British unemployed Apr. 20 were 2.514M vs. 2.561M on Apr. 13.

Berlin Municipal Committee refuses to accept sale of city's electric utilities agreed to by city representatives, German, and foreign buyers including US group.

US supplies over 46% of German oil imports; these reached a record high of 23.5M barrels in 1930 vs. 18.9M in 1929.

Rumania suffering from overproduction and low prices in two most important industries, wheat and crude oil.

New South Wales passes law providing for payment of depositors in the closed Govt. Savings Bank of N.S.W. pending its absorption by the Commonwealth Bank. Australian Premier Scullin says govt. will make bond interest payments for N.S.W., which they will then owe the govt.

Farm Board wheat sales abroad since Feb. 26 estimated at 8M bushels out of proposed 35M to be sold by July 1.

Hog prices at Chicago for week ended Apr. 25 were $7.04/100 lb vs. $7.37 prev. week and $9.89 a year earlier; beef steers were $7.67 vs. $7.72 and $11.97.

NY City plans to sell 52M in 4-year loans, taking advantage of excellent condition of municipal market for high-grade issues.

Edsel Ford denies rumors of summer Ford shutdown; may take a vacation shutdown, but this isn't certain yet; sales improving.

Sales of Lucky Strikes continue to boom; March sales increased 530M vs. increase of 637M for all cigarettes combined.

Eaton-Otis interests were reelected to board of Youngstown Sheet & Tube in spite of their previous actions to block merger with Bethlehem, leading to speculation they may be ready to drop opposition to the merger and come to an amicable settlement.

Illinois Central cut annual dividend rate to $4 from $7 rate effective since 1917; new rate is lowest since 1877. Dividend reductions also made by Commonwealth & Southern (utility), Inland Steel, Jones & Laughlin Steel, and American Radiator.

Goodyear increased tire production to 56,500/day from 53,000, second increase this year; sales higher than expected; Apr. sales will exceed those in 1930.

Lima Locomotive stock is about 23; has no bonds or preferred outstanding; book value $63.79; cash and govt. securities per share $32.18; 1930 earnings $7.18/share. However, earnings this year look unfavorable as orders on hand at start of year were $1.046M vs. $13M a year earlier.

Companies reporting decent earnings: Price Brothers & Co. Ltd. (lumber, pulp and paper), National Standard (wire products).

At the galleries:

"Diminishing ranks of exhibitors point to ... unusually early close" of the art season. While "general quiet was punctuated here and there with outstanding high figure sales, ... the art season was disappointing." Kleinberger Galleries, "last stronghold of the old masters," has finally given in and gone modern with current show "Corot to Picasso," which also includes works by Matisse, Modigliani, Renoir, Bonnard, Dufy, Vuillard, Redon, Lautrec, Degas, and Cassatt; many of the pieces are outstanding examples of the artist's work. The American-Anderson Galleries are auctioning many interesting items from the library of the late William P. Clyde of NY City, including an important letter by Thomas Jefferson on constitutionality of the Louisiana Purchase, a presentation copy of the Lincoln-Douglas debates autographed by Lincoln, and a third edition of "The Canterbury Tales."

Vaudeville:

Appearing at the Palace: Henry Busse and his orchestra from the Hotel New Yorker - music is "pleasing contrast with a good deal of vaudeville jazz ... more tuneful than ostentatious"; Mr. Busse mixes conducting with trumpet solos and amusing dance steps. Helen Morgan sings a few sad songs, "in a manner that is growing a bit too affected to bear imitation ... breaks for breath-taking in the middle of lines are overused and musically unsound." Also appearing - Bert Lahr and Joe Laurie, Jr.

Political humor:

The Gridiron Club, made up of Washington newspapermen, held its annual Spring dinner with Pres. Hoover and many public figures present. One of the skits involved a policeman and a pushcart peddler talking about the strange disappearance of General Prosperity. "I don't know anything that's kept more people guessing since Coolidge said he didn't choose to run. ... Every now and then someone reports seeing him. He hadn't been gone a month till the White House said he was just around the corner, behind the Washington Monument. ... but something detained him. The next heard of him was when Roger Babson reported seeing him in a barrel of statistics in the Pacific Ocean. John Raskob felt sure he was hiding in a keg of homebrew in North Carolina. Senator Wheeler said he'd gone to Russia to work ten years on the five-year plan. Carter Glass said he was locked in a vault of the Federal Reserve Bank in New York. ... Anyhow there's ten men to tell you why he went to one that'll tell you how to bring him back." [Note: cleaned up hard-to-read accent transliteration.]

Jokes:

"Lady - Have you ever been offered work? Tramp - Only once, madam. Aside from that, I've met with nothing but kindness."

"Floridian (picking up a melon) - Is this the largest apple you can grow in your state? Californian - Stop fingering that grape."

"One reason Gandhi in a bath towel is so trusted by the Indian masses is because everybody can see he has nothing up his sleeve."

Tuesday, April 28, 1931: Dow 149.78 -2.20 (1.4%)

Assorted historical stuff:

Letter from an Oklahoman to his banker: "It is impossible for me to send you a check in response to your request. My present financial condition is due to the effects of federal laws, state laws, county laws, corporation laws, by-laws, brother-in-laws, mother-in-laws, and outlaws ... These laws compel me to pay a merchant's tax, capital stock tax, income tax, real estate tax, property tax, auto tax, gas tax, water tax, light tax, cigar tax, street tax, school tax, syntax, and carpet tax. The government has so governed my business that I do not know who owns it. I am suspected, expected, inspected, disrespected, examined, reexamined ... boycotted, ... held up, held down, and robbed until I am nearly ruined; so the only reason I am clinging to life is to see what the hell is coming next."

Ford Motor, thanks to absolute stand by Henry Ford, has refused to consider any wage rate cuts either in their own plants or in any of the roughly 3,500 manufacturers that regularly supply them. Ford wage scales continue at just over $1/hour vs. about 92 cents in 1929, highest in company history. Employment and days worked at the large Rouge and Highland Park plants have been gradually increasing in recent weeks. The Fords are also spending huge sums to sponsor scientific, educational, and charitable enterprises employing several thousand, including the Edison Institute of Technology investigating use of agricultural products as industrial materials, an experimental farm, and various historical projects.

Col. A. Woods, resigning chair. of President's Emergency Employment Committee, will leave for two-month trip to Europe soon. Says "there has been a perceptible improvement in conditions, not enough, however, for the discontinuance of the emergency committee." Much of the committee's personnel, on loan from outside organizations, will also be leaving, though they'll continue to assist in an advisory capacity. President's Emergency Committee on Expenditures reports on survey of major family relief agencies in 100 cities; need for relief lower; most improvement in North and South Central states, most need for continued relief in mid-Atlantic and West Coast. Sen. Moses (R, NH) tells Pres. Hoover convention votes and electoral votes needed for his nomination and reelection "are in the bag."

Sen. Glass is revising banking bill based on financial inquiry last winter; wants to regulate banking affiliates and curb use of Fed. Reserve credit for speculation.

Sen. Couzens recommends assorted tax measures, including reinstatement of 1924 surtaxes and reestablishment of gift tax, but no increase in normal taxes. Asks Chamber of Commerce to announce whether it favors cutting, increasing, or maintaining current wage scales.

Russia to curtail purchases from US due to need for long-term credits and belief US is "rapidly passing from neutrality to active hostility." Russia mobilizes all sea and river transport workers to meet one of outstanding difficulties of five-year plan - weakness in transport facilities, particularly in Northern rivers.

Settlement of Arab share of Palestine development loan ran into delay when Arab executive commission refused to talk to British High Commissioner unless govt. agreed talks wouldn't imply Arab acceptance of Zionist clauses in Palestine mandate.

Mexican Congress convened in extraordinary session to take up urgent pending problems.

Tokyo boosters now say their city is the third largest in the world, surpassed only by London and NY; official estimate of Greater Tokyo population is 5.193M; area is 223 sq miles vs. 299 for NY City's five boroughs, and 693 for Greater London.

Long, confusing historical tale by H. Alloway about deal for Liggett & Myers involving Bernard M. Baruch and James B. Duke (father of Doris and the Duke in Duke University). Anecdote about construction of Flatiron "skyscraper" on 23 St. about 30 years ago (Frank Munsey, of the magazine co., called the building "double insanity" before moving in to the top floor several months later).

New all-air 8 hour service from NY to Chicago to start May 1; fare will be $56. Group representing US, British, German and French interests investigating opening new air route from N. America to Europe via Greenland and Hudson's Bay. Postmaster Gen. Brown points to growth in air mail while other departments' revenues are declining; says airmail can potentially be profitable; makes plea for increased public use of passenger airlines, citing improved safety; says development of aviation is also essential part of preparedness for war.

The humble Irish potato exhibits some of the same postmortem regenerative powers seen in snapping turtles and snakes; a freshly picked potato, if kept in a humid atmosphere above 60 degrees, will grow a new skin to cover cuts or abrasions.

Market commentary:

Market wrap: Stocks showed some early relief from pressure; announcement of Continental Shares reorganization stopped heavy selling of their holdings including Goodyear and Republic Steel. However, "a fresh selling wave" broke out at end of first hour, before announcement of West & Co. suspension; heavy selling in leading shares intensified as prices worked lower; prices broke sharply around noon, with new bear market lows in US Steel, GE, and NY Central; utilities also pressured, though most held above Jan. lows. Support came in during final hour, with good-sized recoveries in leading shares. Bonds continued to show firmness in US govts. and highest-grade corporate issues, but heavy liquidation continued in rest of the corporate list, with convertibles particularly hard hit by slump in stock prices; bond market has also had to absorb heavy selling from brokers that have failed or are in distress; foreign list was weak, with both European and S. American issues declining. Commodities mixed; wheat up substantially on active trading but other grains narrowly mixed; cotton down sharply, with May selling below 10 cents for the first time this year. Copper buying remained quiet at 9 1/2 cents. Zinc declined to new 31-year low of 3.40 cents/pound.

Dow industrial average closed at a new bear market low; there were 2 new yearly highs and 284 new lows.

US Steel to report quarterly earnings and declare dividend after the close; traders believe a technical rally may be sparked by better-than-expected results.Coca-Cola subject of some optimism; seen benefitting from lower raw material prices. Woolworth has been holding up relatively well during recent reactions, leading to speculation it could become a leader in a market recovery.

Recent reports of widespread liquidation by long-term investors should be confirmed or disproven by upcoming second-quarter shareholder lists from the likes of US Steel and GM. One buyer of stocks during the past week reported that, of 12 certificates delivered, all showed the previous buyer had purchased the stock between Aug. and early Oct. 1929. Market students say important support still lacking; "with liquidation in progress, it is apparent that the big interests are not ready to enter the market." Recent buying has been from short covering and small-scale public accumulation.

Decline in scrap iron and steel prices in recent weeks has been discouraging, since many believe this forecasts conditions in finished steel. Optimists on copper base hopes on control of the industry by just two groups, associated with Anaconda and Kennecott. Rail car builders, "as usual at such times," are asking why railroads buy no equipment when it's relatively cheap, and rush into the market to buy at higher prices when traffic revives.

Editorial: As May approaches, interest in the cotton market centers on the crop outlook, which at present looks favorable. The price farmers get for their cotton is of national importance, affecting the welfare of the whole South. The outlook on this is uncertain; it's doubtful if acreage has been reduced much, and attempts at supporting prices "by political methods have been a disaster"; the dominant factor now will be the weather. D. McCuen, Amer. Cotton Shippers Assoc. pres., attacks Farm Board; loss of foreign markets appalling; cotton quality must be improved; farmer education must be extended; markets must be freed. "Let the government continue in the business and the farmer is doomed." C. Williams, Farm Board cotton member, says several factors point to increased world use of US cotton at expense of foreign cotton in the 1931-32 season.

Guaranty Trust survey says usual early spring peak has passed without definite signs of improvement; expansion in most industries no more than seasonal; April reports indicate usual spring recession; business will probably remain low for time being, with “distinct possibility of recovery at the end of the summer.”

Sir G. Parish says world on eve of greatest trade expansion it has ever seen; advocates removing all obstacles to trade to revive it.

J. Cohen of Baar, Cohen sees forces "working in the right direction for at least five years of trade expansion, business prosperity and rising security and commodity prices." Important step in recovery would be adjusting wages downward to increase profitability and employment; this would be "bullish on the country as a whole."

B. Hutchinson, Chrysler treasurer, hits "sunshine talk" and "wishful thinking" by US business leaders that "took us up too high and down too low in 1928-29." Advocates elimination of waste in govt. and industry, tariff policy that develops markets instead of antagonizing customers, and increasing security of banking system.

Economic news and individual company reports:

Shakeup in Continental Shares, a large investment trust co. with commanding stakes in several major corporations; Eaton-Otis interests were replaced as directors by heads of four Cleveland banks. Street was surprised at absence of a NY bank with which the co. had a $30M loan. New pres. G. Bishop says has reviewed Continental's balance sheet and found it sound; “no reason for ... shareholders to be apprehensive as to the entire solvency of the corporation.” NYSE firm of Otis & Co. transferred their commission business to E.A. Pierce & Co., keeping their investment business. NYSE and Curb Exchange firm of West & Co. suspended for insolvency; founded in 1901. Will "cooperate in every way with our customers and other creditors to work out the best possible results in their interests." Editorial: Relative equanimity with which market received unfavorable developments Monday is due to realization that “suspensions and readjustments of the past week represent the clearing away of old debris.” Almost 19 months have passed since the peak; market appears to be approaching period of hesitation and false starts typical after “a prolonged decline of major proportions.”

Col A. Little, Bank of US dir., testified minutes of some meetings showed him approving loans when he wasn't present. NY Att'y Gen. Bennett to investigate whether Pynchon & Co. violated any state laws prior to its failure.

Fed. Reserve lowered buying rates on bills for second time in six days, to record lows of 1 1/4% for bills up to 45 days and 1 3/8% for bills of 46-120 days. Action was taken after sterling and francs failed to hold most of improvement after earlier cut. Possible cut in rediscount rate seen if necessary to support sterling, prevent gold imports from France, and "turn away the enormous volume of funds glutting the NY market".

British Chancellor Snowden presented balanced budget with no major rise in income tax, but new tax on land values; claimed continued reduction in national debt. Reaction was generally favorable; sterling led strong day for European currencies.

A. Whitney, head of rail union: "agreement we drew up with railroads is still in force and we will keep it in force. We're not going to be even approached for a wage reduction. ICC revises allowable rail freight rates on tomatoes, string beans, green peas, carrots, beets, onions and turnips originating in Mississippi.

A number of important dividend announcements are due over the next few weeks, including US Steel (today), Illinois Central, GM, Bethlehem, and Union Pacific.

Veterans' bonus loan applications declined sharply in past week.

F. Godber, Royal Dutch-Shell managing dir., hits recent introduction of low-quality gasoline by some marketing companies to meet "bootleg" competition; says this will increase production that's already too high and require heavy unproductive investment. Says company is in accord with oil states' curtailment program.

Canadian report: March exports $55.0M vs. $89.6M in 1930; exports to US $26.9M vs. $43.3M. Bank of Montreal reports little change in trend of Canadian trade and employment other than seasonal spring increase. Since Turner Valley oil area appears to be waning, other areas in Alberta are being explored for oil.

German March exports were 662M marks vs. 591M in Feb.; imports 584M vs. 884M in Mar. 1930; unemployed on Apr. 15 were 4.628M vs. 4.980M on Mar. 15 (highest since the war), and 2.787M in Apr. 1930. Dr. E. Wagemann, dir. of German Federal Office of Statistics, estimates world unemployment at 20M.

Argentine corn crop estimate sharply reduced after farmers refuse to harvest over 2M acres of corn (about 15% of planting) due to low prices.

Corn Canning Institute recommends to all canners that 1931 acreage be cut 25%, citing decline in canned food consumption and forced selling of substantial inventories of canned goods below production cost.

NY City Transit Commission instructs S. Untermeyer to sue B.M.T. alleging improper accounting of $6.5M in declared losses; seen as indication of difficulties standing in way of transit unification.

Sears seen benefiting from expense cuts; in spite of lower sales, first-half earnings expected to equal 1930 level.

General Mills stock about 41; annual div. $3; earnings in year ended May 31, 1930 were $4.83/share vs. $4.57; earnings for following year expected to increase.

Companies reporting decent earnings: Pacific Lighting, Wm. Wrigley, General Printing Ink, McCall (magazines).

Movie:

Gun Smoke - Paramount film, starring Richard Arlen and Mary Brian. City gangsters invade the wide open spaces, assuming control of a Western town; "joining of the gangster theme with the traditional Western furnishes situations that possess both novelty and humor."

Theatre:

Much of European theatre has its roots in the street fair; Paris now features two of the most venerable. The Foire du Trone, also known as "the spice fair," started in the 15th Cent., is now filling the Place de la Nation with the smells of ginger bread, cookies, and "that rubber-like and enduring substance which the French affectionately call pain d'espice"; the fair is also crowded with merry-go-rounds, lotteries, performing dogs, and tiny electric cars; weaving in and out are street singers, sometimes carrying a guitar but "more often a wheezing and mournful accordion." On the other side of Paris, the Foire du Saint Germain is being prepared. This fair harkens back to the 11th Cent.; it was built around open-air theatres, and was the incubator of half the most celebrated theatres in France. The old theatrical productions are still faithfully reenacted, giving a "'flash-back' into medieval times."

Joke:

"Fair Damsel - Where do you think I'd be if I had a million dollars? Male Escort - On my honeymoon."

A well-driven golf ball leaves the head of the club at 135 miles an hour. This is only slightly faster than a golfer leaves the office. - Life