Friday, May 15, 1931: Dow 146.64 -2.99 (2.0%)

Assorted historical stuff:

Austrian shares of Creditanstalt were suspended from trading in Vienna after falling to 30 from 42.5. A bank run continued Weds. with “thousands of depositors receiving cash in an orderly manner.” The govt. has proposed issuing a 100M schilling 3-year internal loan to pay for the bank's reorganization; two major political parties supported govt. aid. The B.I.S. is investigating results of the bank's difficulties for international finance, but isn't expected to grant it immediate loans.

Editorial: Defeat of Aristide Briand's candidacy for President of France has fortunate effect of leaving him in charge of French foreign affairs, where he can be more effective in his work to heal the wounds of war. However, French Parliament's refusal to grant him this honor will be seen as a slight; the German press charged it reflected disapproval of his liberal attitude toward France's former foes. In any case, the French results will focus attention on the current League of Nations meeting; the US will be particularly interested whether Pres. Hoover's recent remarks on the need for disarmament to revive world trade made any impression abroad.

G. Noske, German Defense Min., says tariff revision and modification of reparations will check growing crisis in Germany and prevent extremists of left and right from strengthening their positions.

Olympic Committee decides to hold 1936 games in Germany.

Govt. officials say they're aware of some wage cuts and that more are likely to follow if industrial conditions continue depressed. However, they know of no organized move among bankers or manufacturers to lower wages as implied by a recent AFL statement calling on workers to resist wage cuts. Believe industries and plants that can do so without endangering their position will maintain wage levels for the present; others may be driven to wage cuts. Current labor controversies not numerous; total of about 50,000-75,000 workers involved, slightly above recent average but only a fraction of those in previous depressions. Extensive labor strife would aggravate the depression. Pres. Hoover maintains attitude against moves that would lower living standards. Editorial: Rather than blanket opposition to any wage cuts, the AFL should realize the important question is the total buying power of all unemployed labor. This may be increased by cutting wages where this would lower prices and help market more of the goods produced. While labor should justly oppose attempts to cut wages "merely to increase the employer's profits" in businesses that are not endangered, it should consider accepting reasonable wage cuts if shown evidence they would "facilitate marketing of more ... goods ... and expansion of employment."

Brig. Gen. Benedict Crowell endorses Baruch plan to freeze wages and commodity prices in event of war. War Policies Commission is holding hearings to determine if legislation is needed to equalize burdens of war should the US again become involved in hostilities.

Russian wheat sowing has reportedly speeded up, making up to some extent for the poor showing through Apr. 25; sowings up to May 5 are reportedly 10.4M hectares vs. 12.3M a year earlier. Outlook for Russian wheat exports this year is uncertain; last year featured ideal conditions, while this year is less favorable so far; acreage sown by peasants (50%-60% of total) is further behind than that on collective farms. However, even moderate crop may allow some exports.

British Chancellor Snowden reportedly too ill to fight for Labor govt. finance bill; PM MacDonald considering successor.

Spanish Republican govt. decides to seize all private property in Spain of former King Alfonso.

Henry Ford praises decree of Brazilian Pres. Vargas exempting imports for the rubber industry from duties [Note: Ford was at the time making a disastrous and bizarre effort to develop a rubber plantation near the Amazon.]

5,000 coal miners in the Scott's Run field of W. Virginia expected to be idled due to general strike called by the United Mine Workers to protest wage cut.

Editorial by T. Woodlock: In spite of the fact that private electric utilities only account for 5% of Oregon's hydroelectric power, that state appears intent on slaying the power trust "dragon," and has passed some extreme legislation, including installing a single Power Commissioner and making him a prosecutor able to make orders against utilities without a hearing. By contrast, Wisconsin Gov. LaFollette is starting to sound almost reasonable; at least going by his recent proposals, he seems to have come around to the view that public and private utilities should be on equal footing and subject to the same strict regulation and taxation, allowing a fair contest. One suggestion for the Gov. is that all utilities be required to make reports in exactly the same way, and have them certified by public accountants; there should be no reasonable objection to that requirement.

Radio Corp. has drawn some speculative interest on rumors an announcement regarding television will be made shortly, and that demonstrations are planned; this is expected to bring public buying into the stock.

Rear Adm. W. Moffatt says worldwide airship service prevented by national prejudices and faintheartedness; some $25M of idle airship equipment worldwide could be used; missing links would be supply of helium by the US and airship terminal in the Eastern US.

NY City transit unification negotiations have progressed to the point where city officials including Mayor Walker and Comptroller Berry have been called to give their views at a conference to be held shortly. Major issues include overall proposed price of $489M, and issuance of $162M in city debt.

Southern Pacific Rwy. recently opened the largest and heaviest bridge west of the Mississippi - the $12M Martinez-Benicia bridge, a double track crossing the Suisum Bay near San Francisco that replaces ferries operating since 1879. It contains 22,000 tons of steel, is 5,603 feet long, and has a 328 foot lift span [part of the bridge lifted for river traffic], largest in the world.

Honey has been discovered by govt. scientists to be an extremely potent killer of all bacteria it absorbs. It kills bacteria by drying, withdrawing the moisture needed to maintain all living things.

For many winters now William A. Bentley of Jericho, Vermont has been taking micro-photographs of snow crystals; his collection is up to almost 5,000 designs, no two exactly alike. Art students and designers seeking unusual designs have found the collection a useful resource. The American Meteorological Society is now planning to publish the photographs in book form. [Note: AKA William "Snowflake" Bentley; first person to capture a single snow crystal in a photograph, in 1885; technique involved adapting a microscope to a bellows camera and years of trial and error; see Snowflakes in Photographs at Amazon.]

Market commentary:

Market wrap: Stocks suffered "depressing session" led by the rails, with various roads hitting new bear market and many-year lows including Pennsylvania, Rock Island, and Southern Pacific; NY Central hit post-1922 low as poor earnings report raised doubts on whether even the recently-reduced $6 dividend rate could be maintained. US Steel also worked lower into new bear market territory, but other industrials drew support; however, the afternoon brought further bad breaks in the rails, and selling spread to leading issues and across the market. Bond market irregular; highest-grade continued steady to firm while some of the weaker issues that had been pressured in the past week showed more resistance; foreign list irregular, but featured brisk rally in Argentine issues despite conflicting reports on political situation there. Commodities weak; grains down sharply; cotton down substantially. Copper buying quiet at 9 - 9 1/4 cents. Zinc up slightly from record low.

Relatively few market observers are optimistic at the moment; recent belief that investment liquidation had been at least temporarily exhausted has been shaken by renewed weakness in the rails. Market gives little indication of a turn for the better; customers advised to stay on sidelines until picture is clearer; short position also considered increasingly risky.

Recent irregular market attributed to dominance of professional trading, largely by longtime bears, though some bears have now turned long on particular stocks. "One important banker" believes we may be scraping bottom, based on apparent steadying over the past week or two in production, commodity prices and the stock market. "The next few months will tell the tale." One optimistic factor is the abundance of cheap money; this has already been reflected in bonds to some extent, and it's logical to anticipate this may spread to high-grade stocks. However, "a more cheerful feeling in the financial district" may be necessary before this happens; "it must be admitted" there's currently no economic news to make one optimistic on the immediate future.

Copper seen facing trying period, with possible test of price this summer; April statistics featured "disconcerting" sharp decline in domestic shipments, continued decline in foreign shipments, and rise in inventories; further production curtailment may be necessary.

Wrigley is attracting some buying from traders based on attractive yield (5.5%) and reports earnings are holding up well (price about 73; 1930 earnings $6.14/share vs. $5.80; earnings in 1931 expected to at least equal 1930). Gillette is reportedly the subject of an active bull pool operation.

An interesting anomaly is apparent in the common shares of managed investment trusts [similar to mutual funds]. Common shares that have no asset value behind them [after accounting for senior shares ahead of the common] are often selling at prices similar to those that have asset value substantially above the share price. Managed trusts have reportedly been largely inactive this year, with some managers saying they haven't made a single transaction; some have little choice since the securities they hold aren't easily marketable; in the main, “trusts are sitting tight waiting for a reversion of the market trend.”

P. Litchfield, Goodyear pres., responds to recent AFL criticisms of wage cuts; says cuts were smaller than decline in cost of living.

Records of our prominent banks lend some support to the "Horatio Alger romance" of the small-town boy makes good in the big city; almost every important NY City bank has at least one officer on the executive list born outside the city, many in small towns; New England is a fertile source.

L. Wiley, NY Times business mgr., cites hard work, courage to face facts squarely, good humor, and truthful information as tonics to stimulate the US businessman from his current lethargy and sweep away depression. Points to recent speeches by R. Whitney and M. Traylor, as well as Int'l Chamber of Commerce meeting, as giving helpful and illuminating information. Lauds courage of NY real estate community in completing Empire State building in face of depression.

Economic news and individual company reports:

Mexican currency situation reaches state of crisis; silver pesos set new low of 28% discount vs. gold; most leading banks reluctant to sell gold pesos or dollars for silver pesos, creating near panic in business circles, especially among dealers with earnings in silver and expenses in dollars or gold.

Bank of England cut rate from 3% to 2 1/2%, lowest since 1909. Sterling exchange showed little reaction as reduction had been expected; further weakness not anticipated since London rates on bills are still 1 1/4% above NY. Francs were strong, indicating Bank of France won't match rate cut this week. Bank of England weekly statement showed 1.521M sterling increase in gold to 150.003M, bringing it above "Cunliffe minimum" for first time since Dec. 18; however, timing of the rate cut surprised some observers who believed Bank officials wanted to add another 7M to gold reserves before seasonal fall demands. Bankers saw move as constructive for business in general, though it was pointed out it would be at least 4 - 5 months before the bond market feels the full effects.

Money in circulation May 13 was down $36M to $4.627B, total Reserve Bank credit outstanding down $49M to $918M. Member banks in NY City report brokers' loans down $28M to $1.671B; loans on securities to non-brokers up $7M to $1.759B.

Beneficial Industrial Loan Corp. estimates total volume of loans by licensed personal finance cos. is running at rate close to $700M this year, up 17%-20% from 1930; company business is running at $75M-$80M rate vs. $66M in 1930 and $60.3M in 1929. Average outstanding balance on loan is $114. About half of states have enacted uniform small loan law governing this type of business.

Dow average of 8 iron and steel products remained at $43.97, a post-1922 low. Scrap steel prices fell sharply in past week, reaching lowest levels in 17 years.

F.W. Dodge report new construction contracts in April were $336.9M, down 30% vs. 1930. R.G. Dun & Co. report US construction permits in April were $116.0M, down 4.8% vs. 1930; this showed improvement from declines vs. 1930 of 12.8% in March, 15.3% in Feb., and 24.6% in Jan.

Grain Stabilization Corp. denies reports they are considering chartering boats to store surplus grain. Bureau of Agric. Economics reports value of farmland was 106% of prewar level on Mar. 1, 1931, vs. 115% a year earlier. T. Lee, Armour pres., says govt. reports indicate slightly higher supply of livestock in 1931; “In some cases these levels are unprofitable to the farmer at present ... costs, but ultimate prosperity lies in the stability of prices rather than in the level of prices.”

"In these times of economic stress, France is finding her low birth rate a blessing in disguise." There are almost 2M foreigners working "under permits" in France, filling the void created by low population growth; France can now reduce unemployment by ensuring foreigners leave at the end of their contracts and limiting new arrivals. From Jan. 1 - Apr. 17, there were 29,317 worker departures but only 14,692 arrivals.

Austrian Parliament authorized loan flotation of $21M, of which $14M will be used for Creditanstalt rescue.

Australian Senate votes against bill providing for shipment to London of gold to meet Treasury bills due at end of June.

Czechoslovak Finance Ministry drafts bill for $75M foreign loan flotation, pledging tobacco monopoly as security.

King of Yugoslavia signs law stabilizing value of dinar at 26.5 mg of gold.

Apr. US postal receipts in 50 cities were $29.3M vs. $30.178M in Mar. and $32.644M in 1930.

Commerce Dept. reports exports of radio sets in Q1 were $2.927M vs. $1.937M in 1930.

Standard Oil of NJ 1930 net was $1.65/share vs. $4.75; this falls short of $2 dividend requirements. Standard Oil of Indiana cut retail gasoline price in Detroit to 8.1 cents/gallon from 8.9 cents.

NY Mayor Walker testified for NY in "free lighterage" case [see May 13]; accused NJ of seeking advantage at expense of NY; says NJ doesn't even have the facilities to absorb business that would be lost to NY.

Boeing System (subsidiary of United Aircraft) cuts airfares on service along the West Coast by 20%.

Companies reporting decent earnings: Mesta Machine (steel industry equipment), White Rock Mineral Springs, Claude Neon Lights, Telautograph (machines transmitting diagrams by wire).

Theatre:

Perfectly Scandalous - comedy by Hutcheson Boyd, at the Hudson. "Perfectly scandalous" indeed; shows no interest in theatre as medium of expression or in human beings, but instead offers "a counterfeit sophistication of the uglier sort." Concerns "l'amour, art and social philosophy in the Park Avenue apartment of the crusty, generous vestryman Sidney North." Disarray engulfs the household when North's young wife "takes his innocent and still younger nephew out for a 'time.' There is also an objectionable interloper, described for dramatic reasons as Spanish, who is eventually put in his place."

Jokes:

"Why did you leave your last place?" asked the lady. "I just could not stand the way the master and the missus used to quarrel. It went on all the time. When it was not me and him, it was me and her."

"Wife - But how is it that you are home so early from the theatre? Yokel (returning from first visit to theatre) - I came out after the first act. Wife - Why did you do that? Didn't you like it? Yokel - Yes, it was lovely, but I couldn't wait. The program said there was an interval of two years between the first and the second acts."

Thursday, May 14, 1931: Dow 149.63 -0.61 (0.4%)

Assorted historical stuff:

Berlin stocks rallied sharply Wednesday, following the severe drop Tuesday when news broke of the Kreditanstalt problems. Initial shock over the news appears to have given way to “satisfaction ... over the prompt manner in which the new situation was met and the frankness displayed ... in revealing its true position.” Berlin bankers were pleased with the recovery, “and opinion is expressed both here [NY] and in Berlin that the worst of the situation has been passed.”

Gen. Douglas MacArthur, army chief of staff, says War Dept. favors registration of wealth in wartime, not only to facilitate imposition of taxes to pay as far as practical for the war being fought but also to "assist in distributing equitably the economic burdens of war."

Interesting editorial by T. Woodlock quoting Lincoln Steffens [famous muckraker in earlier time], who apparently had some late regrets. “The trouble with us reformers is that we won.” Cites many victories including antitrust laws, Prohibition, referendum and recall, regulation of utilities, and direct election of Senators. However, “with all these victories, we did not change, affect or improve any single essential. In fact, we fought over almost everything but the essentials. Instead of trying to find out why men behave in certain ways we tried to make them behave our way.” With our heavy-handed approach “we made condemnations which bred hatred and bigotry. Believing in life means believing in each other. That's an essential we overlooked.”

Editorial: There's too much extremism and intolerance for other viewpoints in current discussions on debts, tariffs, wage cuts, etc. "Politicians, unfortunately, ... must necessarily appear always to be dying in the last ditch on behalf of eternal right," most of all when they're actually serving some special interest. Businessmen should be more moderate, pragmatic, and willing to compromise.

Sen. R. Smoot says impossible for US to call international silver conference at this time since it would lead to reopening of war debt question; announcement was believed to represent Administration position. J. Darling, former Midland Bank pres. and advocate of restoring silver value, opposes int'l conference on grounds they never get anywhere; believes problem should be discussed at Empire Economic Conf. in Aug., and British Empire can solve the problem; proposes to restore gold:silver ratio to 20:1 from current 65:1. A. Meighan, former Canadian PM, recommends increasing Canadian silver coinage to help relieve silver price decline.

Editorial: "All sorts of 'authorities'" have condemned installment selling as contributing to the trade reaction, but there's surprisingly little real information on it. A good beginning was recently made by VP Haberman of C.I.T. Corp.; his information suggests the blame may be exaggerated. While some sectors had a high proportion of credit sales (cars 60%), the overall figure is much lower. Availability of credit may "offer temptations to extravagance" but also may cause customers "to bring their cash expenditures under some sort of studied control." Most significantly, soundness of most 1928-29 installment sales is shown by the fact that vast majority of buyers paid off their notes in spite of the depression. Installment sales are likely to persist; proportion of total sales in 1930 was about the same as 1929.

Haiti Chamber of Deputies ends "decidedly anti-American session" by forming committee to study legality of Haitian-American convention. It appears certain the legislature will declare the convention null, which would embarrass the govt.

Prince of Wales continues criticism of British businesses selling to S. America, urges cheapening and brightening of goods and adoption of US advertising methods.

Paul Doumer elected French President by Parliament after Foreign Min. Aristide Briand, his main rival, withdraws; at 74, he is oldest ever to hold the office.

Pope Pius to issue encyclical on labor to supplement Pope Leo XIII's famous “Rerum Novarum” urging formation of labor unions to secure rights.

Passenger arrivals and departures from Newark Airport in April were 8,297, a new record.

T. Joyce, head of Berliner-Joyce Aircraft, says US air force inferior to that of other countries.

An Australian gold rush has started after a gold nugget nicknamed 'Golden Eagle' was recently found in Larkinville. Weighing 1,136 ounces and worth about 6,000 pounds sterling, it's the largest mass of alluvial gold found in Western Australia, over twice the previous record holder 'Bobby Dazzler' found in 1899; it was found 18 inches below the surface.

In India elephant transport is gradually being replaced by the faster car, but elephants retain their position as an important player in the pageantry of great estates. 10 to 30 elephants are used at major events such as a potentate's birthday. They are elaborately outfitted and painted; "trunks, ears and tails are covered with red, yellow and green flowers, and their foreheads are daubed with gilt to match the decorative coats of the howdahs and the trappings of the carriages."

J. Sharkey, Boston milkman, wins $25,000 first prize for best letter on advantages of new Camel cigarettes' cellophane wrapper. Letter not reproduced.

Fashion Note - "... the 1930 earnings of a certain concern devoted to the manufacture of button holes decresed, while better profits results were reported by a supplier of hooks and eyes."

A favorite among this month's bird arrivals is the bobolink, who started his 4,000-mile flight from Southern Brazil in March. He has been called a bird with a dual personality - welcome minstrel of Northern meadows when nesting in May, but dread scourge of the Southern rice fields when travelling.

Market commentary:

Market wrap: Stock session was irregular. Bears applied pressure early, encouraged by new bear market low in Dow rail average on Tuesday; majors including Steel and Can gave ground, and rails broke further, led by NY Central. However, the slump failed to induce fresh liquidation and selling dried up during the first hour. This evidence of an oversold position caused professional bears to back off, with some apparently switching to the bull side. American Can led a rally on announcement earning were holding up well; Western Union and Woolworth were also strong. However, improvement in the general list was wiped out by a flood of selling just before the close that pushed US Steel to a new bear market low and unsettled the whole market. Bond market continued to diverge, with US govts. and highest-grade corp. rising, in many cases to record highs, while lower-grade issues were "highly irregular"; foreign govts. were heavy, with sharp reactions in some parts of the list, although Austrian bonds were firm. Commodities weak; corn down sharply after recent sizeable rally, other grains narrowly lower; cotton down substantially. Copper asking price lowered to 9 1/4 cents by producers; foreign buying more active, but domestic sales difficult to make even at 9 cents. Cocoa rose after report of doubtful crop. "Fat steer" prices fell to 20-year lows of $7-$8/100 pounds.

Conservative observers continue to recommend sidelines, noting failure of market to sustain upturns due to bear opposition.

Dow theory students noted decline in Dow rail average to new bear market low this week and anticipate another test of support in the industrials. The rail average has predicted general market movements accurately during the bear market, though optimists point out that the current decline was on very low volume, as is typical when bear markets peter out. Also, utilities have held above bear market lows; if industrials now find support, this could indicate change of trend.

Trading in the past week or 10 days has at times been largely professional, similarly to Jan.; in that case a rally followed in Feb., but this was based on hope of a good spring, which doesn't apply now. "Many observers admit they are puzzled, and decline to predict the immediate future." Several brokers report some selective buying in the past week or so, as normal after a sharp market setback. Precedent would now indicate a dull period, with next move dictated by business conditions; most brokers are dissuading customers from buying, saying there will be plenty of time to jump in when market indicates ability to rally for more than a day or two. Optimists encouraged by lack of "necessitous liquidation," indicating "weak positions have been eliminated at least temporarily."

Westinghouse is target of large short interest, though optimists point out its net working capital together with its holdings of Radio Corp. are worth about $62 a share, or roughly the current stock price. Grand Union is subject of favorable scuttlebutt.

Front-page survey of industrial bonds which sport very secure coverage of interest charges, ranging from 6.3 times to 193.3; yields range from 2.9% to 7.6%.

Letter to the editor questioning practice of some fixed investment trusts of paying dividends out of cash reserves when payments from securities held fall short.

Freight car loadings report for the May 2 week drew mixed reviews; while it showed a 16,019 increase over the previous week, the 17.7% decline vs. 1930 was the worst since April 11. NY Central's report for the May 9 week showed an even larger decline vs. 1930.

Best guess of automotive observers is now for production peak in May of about 370,000 cars, and at least 325,000 in June. GM April sales report [see yesterday] demonstrates good basis for the recent optimism on the company; April gains over March in deliveries to dealers (29.4%) and sales (34%) were highest in at least 10 years; inventories declined; on basis of trend in April and so far in May, it's likely Q2 sales will exceed those in 1930.

"Well-informed interests" discount rumors of general increase in Calif. gasoline prices.

French financial circles expect announcement soon of Portugal stabilizing currency on gold basis.

Missouri Bankers' Assoc. committee advocates wage cuts unless general price level is “made to rise again”; opposes increase in banknote circulation; proposes new int'l body to deal with monetary stabilization.

Sen. D. Reed spoke at Amer. Bankers Assoc. meeting; said several signs indicate worst of US business depression passed; criticized various groups for seeking financial aid from the Federal govt., particularly war veterans and wheat farmers. W. Wilson, Assoc. pres., urged delegates to work for "defeat of the Communist experiment," saying it poses danger to US standard of living through unfair competition in various industries, citing recent example of coal.

Dr. O. Sprague, Bank of England economic advisor, says no sign yet of US recovery, sees "indications that the depression is becoming more acute, if not chronic."

Economic news and individual company reports:

NY Fed. Reserve Bank cut buying rate on bills again, for the fourth time in 3 weeks; rates are now at record lows of 1% to 1 1/4% for periods up to 120 days. Action seen as indicating Fed. Reserve determination to "press the credit structure until definite results are achieved toward the outflow of funds from NY to foreign centers and the general stimulation of the bond markets"; efforts haven't been appreciably successful yet in stimulating foreign exchange or most of the bond market. Foreign currencies continued irregularly lower. Sterling slumped against francs; weakness attributed to belief Bank of England may cut rate from current 3%. Pesetas were firm in spite of the troubles in Spain.

Steel production for week ended Monday was 46% vs. 47% prev. week, 48 1/2% two weeks ago, 75% in 1930, and 97% in 1929. Weekly steel reviews reported further resistance to decline in operations due to favorable automotive and construction demand; this indicates continued output at close to current levels for some time. However, price structure has shown "further cracks," including weakness in scrap, sheets, alloy steel, and cast iron pipe; this doesn't bode well for industry profits. 1,000 workers went out on strike against Empire Steel, protesting a 5% wage cut said to have followed other recent cuts of 15%-20%.

American Can's sales so far this year reportedly only slightly behind 1930, net almost equal to 1930 record high; outlook improved in recent weeks; consumption of canned goods stimulated by very low prices prevailing in retail stores; record gain in canned pea consumption.

R.C.A. faces probably most pressing and important of its many legal difficulties in a Federal Radio Commission hearing on June 15, which could in theory lead to loss of 1,409 radio licenses due to court decision that it violated antitrust law; however, R.C.A. may be spared since decision was in civil suit, not criminal one.

US electric output for week ended May 9 was 1,600 GWHr, down 2.4% from 1930, vs. a 3.0% decline prev. week and 3.1% two weeks ago.

FTC resumes investigation of public utilities, scrutinizing affairs of the North American Co.

Newsprint production in US and Canada in April was 308,288 tons vs. 287,595 in Mar. and 338,015 in April 1930; first 4 months' total lowest since 1925.

Portland cement production in April was 11.245M barrels, down 16.8% from prev. year; shipments were 11.184M, down 16.2%.

Postal deficit as of June 30 estimated at $140M vs. $98M a year earlier; Postmaster Gen. recommends increasing first-class mail rate 1/2 cent to 2 1/2 cents.

Sales of US military and commercial aircraft and engines in Q1 were $9.019M, up 0.4% from 1930; production was $7.923M, down 10.4%.

Berlin City Council approves sale of electric utility to international banking group; new Berlin Power & Light Corp. will be capitalized with 300M mark debt, 160M class A stock, and 80M class B stock.

Canadian farmers' May 1 planned spring wheat planting was 22.2M acres, down 8% from 1930.

Acting Gov. Lehman testified for NY in "free lighterage" case [see May 13]; cites huge NY expenditures for development that also benefitted NJ, including Holland Tunnel and Hudson River bridge; says present NJ attempt for transport rate advantage is breach of 1921 "gentleman's agreement." Mayor Walker to testify today.

Brick consumption in NY metro. area is up sharply in recent weeks; price rise expected.

A new type of life insurance policy has been brought out with the graduating class of a large Eastern university as its first customers. A $1,000 policy taken out by willing students has the provision that all dividends paid during the first 10 years of the policy go to the class memorial fund.

Standard Oil of NY cuts wholesale gasoline prices 1/2 cents/gallon to 6 - 6 1/2 cents.

Woolworth announces plan to reorganize British subsidiary as public company, to be distributed to shareholders as stock dividend.

Berkshire Fine Spinning Associates says will curtail production more sharply unless definite upturn develops before summer [Note: yes, it's that Berkshire.]

Theatre:

After winning the Pulitzer, Susan Glaspell's Alison's House has moved from its quiet spot on Fourteenth Street to the Ritz on Broadway, at the center of the theatrical world. The move has been made simply, without services of a rewrite man or change in costumes or scenery; Eva LeGallienne will continue to star for some time. The play draws on the continuing interest in Emily Dickinson, "the posthumously 'discovered' New England poet of last century"; it takes place on the last day of the 19th century, on the Mississippi. Alison Stanhope (based on Dickinson) has been dead for several years, and her family must go through her papers and books in preparation for a move; this reveals the influence Alison's life and career had on her family. Acting was generally fine; audience favorite was Alma Kruger as Miss Agatha, the poet's “doddering sister” who took care of Alison in life and later “guarded the secret of her chaste love for a man already married.”

Film:

Young Sinners - adapted from the play by Elmer Harris, at the Roxy. For the most part a "static" copy of the play. Characters include Tom McGuire, Irish mountain guide who makes men out of rich young playboys, Gene Gibson, playboy of the moment, and Constance Sinclair, Gibson's girlfriend. Good acting can't save the film; theme of "flaming youth" is forced, and scene where Constance is rebuffed by a reformed Gene, who insists on waiting until they're married, is unconvincing.

Jokes:

"Teacher - If the National Gallery were on fire which five pictures would you attempt to rescue? Pupil - The five nearest the door."

"How did you get that black eye, Mrs. Higgins?" "Well, sir, me 'usband came out of prison on 'is birthday." "Yes?" "And I wished 'im many 'appy returns."

"Head of Business College - In teaching shorthand and typewriting, we are strong for accuracy. Inquirer - How are you on speed? H.O.B.C. - Well, of last year's class, six married their employers within six months."

Wednesday, May 13, 1931: Dow 150.24 -1.32 (0.9%)

Assorted historical stuff:

[Note: The Kreditanstalt failure is often cited as one of the Depression's major turning points. These points seem to have been somewhat less cut and dried if you were actually living through them.] Osterreichische Kreditanstalt, largest bank in Eastern Europe, admits losses of 140M schillings and is bailed out by combined 160M schilling ($23M) infusion from Austrian govt. (100M), Austrian Nat’l Bank (30M), and “a Rothschild” (30M); bank has total assets of 2B schillings. “Prompt intervention of the Austrian govt.” saved the bank; foreign shareholders will lose about 25% of par value of their shares, but “foreign credits are not in any danger as the bank is liquid.” Austrian govt. controls the bank and therefore much of Austrian industry. Austrian currency dropped but bonds were steady. Berlin stocks were down sharply due to intimate relations with Vienna, with losses averaging 4%-8%. However, “in Berlin financial circles the opinion is expressed that the worst of the crisis has been passed and banking cooperation between Berlin and Vienna is expected.” Stocks in Paris and other major European exchanges also broke sharply. London bankers were shocked at the news, since it was thought “the position had been cleared up when the Boden Kreditanstalt was taken over some time ago.” Nevertheless, considering strength of board of directors, frank revelation of current losses, and prompt action taken, “confidence in London was not shaken and no credits were withdrawn.”

London Daily Herald predicts “financial sensation of tremendous importance” in near future, when public prosecutor will act against world-famous businessman concerning publication of documents about a group of large companies.

Editorial: Real crux of current economic problems is continuation of war psychology in Europe. The world wants long-term credit, but it can’t get it from the two countries in a position to supply it. US investors don't believe it's safe to make long-term loans because of danger of a renewal of fighting. French investors won't make them cause they believe “security of France against attack by her ancient enemy is still unassured.” The French response has been in two directions; the first - military preparedness - is only partly effective, and the second - the continued attempt to keep Germany “economically and militarily helpless” - makes things worse. The situation represents “democracy's first contact with what is perhaps its greatest single problem, that of making peace after a war.” Tariffs and debts are secondary to this problem, and can be dealt with when the war problem is solved. It’s been said that world history can be told in six words: "Peace, Prosperity, Pride, War, Poverty, Peace"; let's hope history runs true to form and the current poverty “may be the harbinger of peace.”

E. Thompson, Lord Mayor of Liverpool, reports Pres. Hoover in recent conversation expressed belief present financial situation is “mental.” Pres. Hoover proposes abandoning 20-30 army posts for savings and greater efficiency; 13 have been abandoned in the past 2 years.

Miss Ida Tarbell, biographer of US Steel head Elbert “Judge” Gary, predicts unemployment and not Prohibition will be main issue of 1932 Presidential campaign.

Another hard-hitting expose by T. Woodlock alleging that the [govt.-owned] Toronto Hydro-Electric System is overcharging for electricity used by operators of the streetcar system that it’s supposed to supply at cost. Charges favoring of home users and other large customers at expense of the streetcar system.

Beauty parlor workers’ union of greater NY calls strike of 1,500 members asking $16 minimum weekly wage, 50-hour week.

Railroad safety has improved to such an extent that insurance companies now estimate odds a passenger will safely complete a 40 mile journey at 11M to one.

Reports from the Antarctic tell of a new electrical harpoon that shocks whales to death, use yielded 11,000 barrels of whale oil to the Anglo-Norwegian whaling fleet in the first week of operations.

Mt. Vernon residents annoyed by thousands of starlings nesting in trees have solved the problem by stringing electric lights in the tree tops.

Institute for Mortuary Research responds to April 27 story implying undertakers were optimistic due to 8% rise in mortality in Q1; says mortality generally rises and falls together with prosperity, so undertakers were optimistic because rise in mortality indicated prosperity for country as a whole, not just themselves. However, “optimism, such as it was, may have been premature” since mortality in April is back to level with 1930.

War of 1812 recently returned to the limelight after discovery on Walpole Island, Canada of remains believed to be of Tecumseh, great Shawnee chief who led his fighters against US troops. Identification was made through fracture of left leg that Tecumseh was known to have suffered in a youthful buffalo hunt.

Market commentary:

Market wrap: Stocks were unsettled in the morning by heavy pressure on rails following poor NY Central earnings report; latter broke to post-1923 low, and other leading rails fell sharply; selling spread to various industrial issues, though these were supported when they approached recent lows. Trading turned sluggish in midday as market settled into narrow range; mild improvement took place toward the close. Strength in highest-grade bonds continued following successful NY City sale, but lower-grade weakened; US govts. strong with most at new highs; highest-grade corp. strong but other parts of the list diverged, with sharp declines in some sections including lower-grade rails; foreign list mixed with sharp break in Argentine govts. and weakness in Brazilian and German issues. Commodities mixed; grains up substantially under leadership of corn; cotton down moderately. Some sales of copper continued at 9 cents; producers holding at 9 1/2 cents; quiet buying outlook seen over next week. Lead and zinc unchanged at longtime lows. Cocoa down to another record low.

Bull pools are reportedly becoming more cautious after several recent operations proved unprofitable; it's been difficult to attract a following even among traders, and pools have had trouble finding buyers after completing their accumulation of shares. Some oil shares came under pressure due to dividend doubts; Texas Corp. reached record low. However, most recent industry statistics show slight improvement due to East Texas production curtailment.

American Can has been a popular recent bear target, based on rumors of lower earnings and and high inventories at canners; can industry interests admit some unfavorable factors but say it’s too early to tell about prospects for the year; co. only publishes results annually. Loew’s is favored by amusement interests who point out their conservatism in buying new theaters, and say “many of the unsatisfactory situations” reported for other amusement cos. don’t apply to Loew’s. Bethlehem Steel has been better supported than US Steel over the past few weeks, holding 5 to 9 points above its 1931 low.

Market seen likely to become more selective during dull periods, “due to the tendency among prospective buyers to study the affairs of the various companies before taking long positions.” [Note: That’s crazy talk!] When the market has a technical rally, “doubtful issues” are likely to rise sharply because of short positions, but are also likely to reverse as soon as covering is completed. Optimists see greater selectivity as a positive sign; as bear market draws to a close, the issues with more solid dividends and earnings prospects will turn up first. A compilation of 140 stocks reveals that only 2 held above their previous bear market low during the late-1930 break, while 87 have held above their bear market lows in the most recent decline, indicating greater resistance to general selling pressure.

Many interests expect continued improvement in the bond market due to lower short term money rates; a number of brokers have been compiling lists of bonds for customers, indicating increased public interest.

Fed. Reserve seen using “all of their available weapons to keep money as cheap as possible for a long period - at present levels ... or at even lower charges if necessary” to accomplish objective of reviving longer-term capital markets and sending gold abroad; period of at least 4-5 months is anticipated. Recent heavy withdrawals of funds from NY by out-of-town banks encouraged hopes of flow of funds into security markets; while this will begin with high-grade bonds it should then move into high-grade stocks with safe yields; the average dividend yield on the Dow industrials now is 4 3/4% above that on 90-day time money vs. only 1% at the bottom of the 1919-21 bear market.

Despite initial positive reaction from fixed investment trusts [similar to ETFs] on new NYSE rules, implementation will be complex and may take months.

Inquiring Investor question concerns National Distillers (medicinal whiskey); reader wants to know if large Q1 earnings are due to exceptional circumstance. Reply is that outlook is satisfactory for continued good earnings in Q2, particularly since recent Prohibition rulings allow dentists and chiropractors to issue prescriptions.

Prince of Wales urges British industrialists to pool ideas to maintain S. American trade position; sees depression worse than at start of his S. American trip.

Weekly banks statements showed discouraging drops in “all other” loans and holdings of non-govt. securities; “all other” loans are lowest at this time of year since 1923; “liquidation of loans and investments still seems to be the order of the day.” Decline in demand deposits is normal seasonally.

S. Logan, Canadian Bank of Commerce GM, sees mixed picture but overall, “some degree of stability ... evidenced by reports from various sources ... and by ... the govt’s latest employment report” showing first-quarter decline not as sharp as in 1930. Future will depend largely on summer and fall agricultural conditions.

Economic news and individual company reports:

Automotive production so far in May is continuing at a slightly higher pace than April; it now seems likely total May output will exceed April, when US and Canada output was 348,909 cars and trucks. So far, nothing indicates a downturn in output; production at parts makers continues as high or higher than April, and dealer inventories of Chevrolets are down in spite of large April production increase. Hopes are increasing that current pace will be maintained into June.

Rail freight loadings for week ended May 2 were 775,291 up 16,019 from prev. week, down 17.7% from 1930 week, and down 26.2% from 1929. NY Central reported net loss of $144,913 for Q1 vs. income of $8.5M in 1930, the first time the consolidated system failed to cover fixed charges in a first quarter. Revenues were $99.3M vs. $123.2M; management cut expenses as far as possible, reducing operating costs by $18.1M, but were unable to keep pace with revenue decline; results in April indicate continued poor earnings. Southern Pacific seen likely to cut dividends after discouraging results so far this year.

NY City 4-year $52M bond issue a smashing success; awarded to Nat'l City syndicate at interest basis of 2.997%, lowest in city history, vs. 3.866% for similar issue in 1928; resold in 10 minutes at yield of 2.87%. Call money returned from 1% to 1 1/2% due to technical factors as NY Clearing House banks left their demand deposit rates at 1%.

S.W. Straus reports April construction permits in 561 leading cities were $172.3M, down 16% from 1930 but up 7% from Mar. vs. usual decline of 2.7%.

Refineries ran at 65.1% in week ended May 9; stocks of gasoline rose 197,000 barrels to 45.810M. Crude oil production in week was 2.469M barrels/day, down 6,400 from prev. week and down 126,450 from a year ago.

American Machinist reports machine tool trade remains dull, sales now mainly to govts. However, prices steady and scattered indications of higher activity.

Pres. Hoover reports out of $67M appropriated for various types of farm relief loans, $47M has been loaned to 318,000 individuals; it’s believed loaning operations are almost complete. Of $45M for seed loans $39M has been loaned; out of $10M for “agricultural rehabilitation” $5.140M; out of $10M for Agricultural Credit Corp. $471,000. Farm Board chair. Stone seen opposing proposed plans for 1931 wheat surplus involving having farmers hold 25%-30% of crops on their farm, or delivering it to govt. agency for sale in export markets.

Another breakdown of US tax data for 1929 [see also Apr. 16]. 4.035M individual tax returns, of which 2.465M owed tax; total individual net income $24.5B; 75.98% of returns reported income under $5,000, total income about $8.3B; 21.49% reported $5,000-$25,000, total $8.1B; 2.53% reported over $25,000, total $8.1B. 495,757 corporate tax returns, of which 53% were profitable, total net $10.3B, and 47% unprofitable, total loss $2.7B.

Russia raises prices 50% on food, liquor, and almost all basic commodities. Commissar of Finance Grinko has already stated there will be no additional circulation of currency in 1931; steps seen as indication authorities have awakened to inflation and are taking action for stabilization.

British Board of Trade reports April imports 70.0M pounds vs. 70.7M in Mar. and 83.9M in Apr. 1930; exports 32.5M vs. 34.0M and 46.9M. Registered British unemployed May 4 were 2.530M vs. 2.520M on Apr. 27 and 1.712M on May 5, 1930.

French govt. imposes system of export licenses on nitrogen fertilizers and other chemicals to protect French industry developed since the war.

Francs continued to strengthen, while sterling weakened; report of Bank of France selling foreign currency unsubstantiated.

Refined copper inventories in N. and S. America at end of April were 367,921 tons vs. 354,205 in Mar., first increase in six months; production of refined copper was 100,501 vs. 102,058 in Mar. and 124,531 in Apr. 1930; shipments 86,785 vs. 111,482 and 79,213.

Editorial on lawsuit by NJ interests asking ICC for abolition of “free lighterage” in port of NY (by which rail freight arriving at port of NY is delivered to any waterfront destination in the “lighterage zone” without extra charge). In asking for extra charges for delivery to NY City as opposed to NJ, these interests are upsetting a longtime principle of rate unity and threatening to damage the whole area in return for a relatively small gain for NJ industry. Former Gov. Alfred E. Smith testifies for NY in the ICC lighterage hearing.

NY State factory employment declined 0.9% in April after rising 1.5% in Mar. and 1.4% in Feb.; payrolls dropped 2.7%; decline largely seasonal.

Westinghouse says all salaried employees earning over $200/month will take a month's unpaid vacation this year; A. Robertson, chair., said action was taken as retrenchment measure fairer than forced vacation for laborers.

Companies reporting decent earnings: Sweets Co. of America.

At the galleries:

This is the time of year when dealers and collectors prepare for their annual journey to Europe in search of “finds, bargains, and knowledge.” This year has seen “a curtailment in buying power not equaled in many seasons past”; nevertheless, “even to hint at the possibility of the foregoing this annual pilgrimage for the large majority of men prominent in the fields of art, would be sacrilege.”

The Brownell-Lambertson Galleries are showing a dining room, after their successful recent presentation of a modern living room. Furniture designed by Hammond Kroll uses a great variety of woods; dining table is English cypress with pewter base supported by four pink glass rods; chairs are ayous wood with blue suede upholstery; cabinets are of Macassar ebony, boxwood, and French walnut; other room appointments include white porcelain figures, a chiffon glass bowl, a hand wrought silver bowl, a rose marble nude, an Orrefors crystal bowl with a frieze of nudes, a clock of Baccarat crystal, tall vases of Swedish glass, a batik, a 3/4-length nude, and a group of miniatures. Most modern note in the room is struck by two glazed Chinese pottery horses, though oddly enough they date from the Tang Dynasty (618-907 AD).

Vaudeville:

Appearing at the Palace: Harriet Hoctor offers “an entirely new dancing act, ... original in conception and graceful and precise in execution.” Finest number is performed to Schubert's Dei Krahe - “Miss Hoctor floats across the stage, against a lighted background, clad in a flowing black gown and moving her arms in slow imitation of the wings of the raven. This creation transcends the usual scope of the ballet, elevating this dance form to a plane of great artistic expression.” Another number called “Rumango” combines “certain elements of Spanish dancing with the ballet technique.” Also featured is the “usual dazzling array of terrifying slapstick” by Clayton, Jackson and Durante.

Movie:

Hell Bound - Another gangster character study along the lines of Little Caesar; although not up to its high standard, is still exciting and interesting. Gang leader Nick Cotrelli falls in love with musical comedy actress whom his men pick up in a case of mistaken identity. Love triangle forms when doctor the gang kidnaps to take care of the actress also becomes enamored. Bittersweet resolution comes as Nick is “taken for a ride” by his enemies; “one imagines, after the first sadness of Nick's death has passed, she will be happy with the doctor.”

Joke:

Diner Customer - It looks like the flood out there. Waitress - Like what? Customer - Like the flood. You've read of the flood, and how the ark landed on Mount Ararat, haven't you? Waitress - No, sir. I haven't seen a newspaper for three days.

Tuesday, May 12, 1931: Dow 151.56 +0.25 (0.2%)

Assorted historical stuff:

Sec. of State Stinson says committed to having marines leave Nicaragua by fall 1932; by that time, instruction of Nicaraguan National Guard should be completed. Says US citizens and investments abroad will be given all help to which they’re “entitled under the law of nations” but cites principle of Elihu Root not to use US military “for the collection of debts.” Contends that “unjustified accusations” regarding presence of US forces in Haiti, and now in Nicaragua, “have damaged our good name our credit, and our trade far beyong the apprehension of our own people.”

Washington report: Foreign bankers in town for the Int'l Chamber of Commerce meeting expressed some surprise at pessimism of their US counterparts; “general feeling was that the American bankers was somewhat emotional and too unused to difficult situations to meet them with as much stability as the more experienced European bankers bring to bear in ... adverse situations.” [Note: news of Kreditanstalt failure coming up very shortly.] The Chamber meeting seemed to have changed few opinions on the sore subjects of tariffs and debt policies; even those Americans who favor tariff revision envision far less sweeping changes.

Editorial: The relatively cheerful Fed. Reserve report on April retail sales [see yesterday - down only 2% vs. 1930 when all seasonal factors adjusted for] makes an interesting contrast with a production decline of about 20% for the first 4 months. This retail report is only is a part of the picture, but indicates retail consumption remains relatively satisfactory. Production curtailment has now lasted over 19 months, longer than in any major business reaction of the past 50 years; in fact, it’s not much over the average of about 2 years to return to normal production in past depressions. “It would be idle to assume that economic history ever repeats its previous patterns with any specific degree of fidelity.” Nevertheless, it's useful to observe how long it’s “previously taken the needs of a growing population to overrun restricted production and to note that, on the surface indications at least, we must now be closely approaching a state of under-production.” Declining exports man need to be accounted for, but are relatively minor compared with the demands of a domestic market of 120M.

A delegation of 22 mothers and children of unemployed men visited the White House seeking an audience with Pres. Hoover to ask for an immediate special session of Congress to relieve unemployment. Delegation didn’t see Hoover, but was referred to his secretary, W. Newton. Pres. Hoover’s emergency employment committee announces contracts awarded for public and semi-public construction since last Dec. 1 have reached $1.404B.

German Chancellor Breuning answers opposition criticism that the govt. should demand revision of reparations payments, says recognizes in principle the necessity of lowering reparations burden, but must first create “a basis whereupon it can carry out successfully those difficult negotiations.”

Hard-hitting expose by T. Woodlock charging Inland Waterways Corp. with giving secret discounts to shippers to take business from railways. [Extremely accurate excerpt: “The rate situation is somewhat complex, from the layman's point of view.”]

Cable reports from Argentina say situation is quiet.

Martial law reportedly proclaimed in Madrid; Spanish pesetas down sharply.

Nine officials of the Soviet Nijni-Novgorod Automobile plant go on trial in the Moscow People's Court for suppressing recommendations of American specialists.

Traveler’s Insurance reports US auto accidents killed 6,500 in the first quarter, up 9% over last year.

French national tourist office reports spending by tourists in 1930 was about 30% below peak year of 1928; the office is seeking govt. aid “for establishments which cater particularly to the high-class trade.” The number of visitors has continued upward, but spending is down due to the depression. Of 313,000 US citizens who crossed the Atlantic in 1930, about 200,000 visited France, supplying 10% of their tourists.

[Note: Sheer Genius Dept.] Franz Krueckenberg again demonstrates his “Zeppelin on wheels” concept in Hanover Germany; craft attains speed of 150 mph over 20 mile railway track; makers claim normal speed of 110 mph, 4 miles per gallon of gasoline.

Dr. H. Stetson, director of the Perkins Observatory of Ohio, reports results of thousands of tests prove radio reception is significantly poorer on moonlit nights; attributed to “apparent depression in the Kenelly-Heaviside layer of electrons in the upper atmosphere when the moon is overhead, suggesting the moon is an electrostatically charged body.”

Kunsky-Traendle Broadcasting Co. seeks Federal Radio Commission okay to erect television transmitter in Detroit; if approved, will start work immediately.

75 women bank executives will attend the spring conference of the Mid-Atlantic Division of the Assoc. of Bank Women, to be held in the auditorium of the NY Federal Reserve Bank on May 15.

Nassau - Broad Street subway link to begin operations May 30.

Market commentary:

Market wrap: Stocks started the week with a contest of professionals. One of the largest bear operators was back on the Street, although he had “returned from the bear outing at Hot Springs without ... one of his ablest cohorts.” Early dealings saw renewed pressure on major industrials including US Steel and American Can; other weak spots included Northern Pacific and J.I. Case. However, selling slackened as the first hour progressed and the market tone improved in late morning. Around noon, bears switched to a determined assault on Union Carbide, but rallying tendencies persisted, particularly in stocks of businesses doing relatively well, including GM, Auburn, Woolworth, Kroger, Gillette, and Wrigley. GE suffered a late break, but the general list was not too disturbed. Highest-grade bonds made continued progress; US govts. and major public utility issues strong, with many new highs; rail issues steady to firm; European steady to firm but S. American unsettled by rumors Argentine govt. might be overthrown. Commodities soft; grains narrowly mixed; cotton down substantially. Copper buying remains small as April statistics are awaited; buyers unwilling to go over 9 cents while major producers hold at 9 1/2. New lows hit in cocoa, silk, and lead. Rubber up sharply.

Conservative observers remain puzzled, keeping clients on sidelines; some interests now favor going long in stocks that have been doing well.

Brokers report customers have not been entering the market on rallies. This is a natural result of the public's experience earlier in the year; public buyers were attracted into the market several times in the hope of a good upswing, but then forced to sell out at a loss.

An “exceptionally quiet” summer is expected for business, giving little hope of economic news to stimulate the stock market. However, optimists point out that with universally recognized poor prospects, any upcoming bad news is likely to be received more placidly, as “the speculative community ... is becoming inured to shocks.” This may provide a good background for long-pull accumulation of high-grade stocks. The list of stocks “loaning flat” has been growing due to heavy demand from short-sellers; one wit observed that with call money down to 1%, we’re not too far from call money loaning flat. The Street is again hearing rumors of a wholesale price hike in cigarettes; this report has been revived on several occasions this year.

GE has been better supported lately; earnings may prove better than expected as steadily growing refrigerator sales and some gains in other products may make up for declines in other lines. McKeesport Tin Plate has sold off after a bull pool that rushed it up to 103 earlier in the year disbanded; earnings prospects are now believed lower due to smaller can consumption. Western Auto Supply is selling at about 20 in spite of maintaining its dividend at a $3 annual rate; co. earned $3.81/share in 1930 and $2.72 in 1929; sales in the first 4 months were off 11.2% from 1930, though April was ahead of 1930.

Fixed investment trusts [similar to ETFs] are continually offering new versions with assorted modifications to “satisfy the most recent whims of investors.”

F. Lisman warns rails may be underestimating gravity of the current depression, holding on to belief that earnings will recover and “Wall Street and the public are suffering from temporary hysteria. ... They do not seem to visualize now, any more than they did a year ago, that the present business depression may last for some years; that it may be a major depression similar to” those in 1875-79 and 1893-98, and if so that they may face difficulties in paying interest and refinancing.

Royal Bank of Canada monthly letter: Sees news from many parts of the world indicating “the forces which tend to correct depression are beginning to have an effect.” B.I.S. starting to help world trade; also positive are discussions on trade agreements and “carefully thought-out plans for reestablishing confidence.” Canadian govt. measures have eased depression compared to other countries by directly aiding Western farmers, increasing public works, and taking measures such as protective tariffs to increase industrial production; protective measures have led to increased interest in establishing manufacturing plants in Canada.

Economic news and individual company reports:

Int’l Chamber of Commerce meeting adopts resolutions favoring disarmament and removal of all possible obstacles to international trade. Says observance of international obligations (debts) is fundamental, though they may be reexamined under some conditions. Opposes customs unions such as proposed Austro-German one unless other countries consent. Condemns govt. interference in futures markets. Calls for conferences on agriculture and silver.

GM sales by US dealers in April were 135,663 cars vs. 142,004 in Apr. 1930; however, 34% gain from Mar. was much higher than the 15% gain in 1930.

Assoc. of Cotton Textile Merchants report on April sales showed a sharp and worse than expected setback, and dashed hopes of a month or two ago that the cotton textile industry was leading the way out of depression as it had in the past. April production was 226M yards vs. 272M in March, but sales total was only 138M, or 61% of production, vs. 295M, or 109% in March.

Weekly bank statements showed declines in all categories of loans and security holdings, and in demand and govt. deposits; time deposits were up slightly. Call money renewed at 1% for first time since 1908. Bond market keenly watching NY City $52M four-year bond sale at noon; strong demand expected.

Fall River, Mass. situation said improved 2 1/2 months after being put under control of state financing board following default [see Mar. 7].

C. Donnelly, Northern Pacific Rwy. pres., says rails in his area (Northwest) believe a freight rate increase undesirable at this time; calls for separate rate investigations in different sections of the country.

Tide Water Oil cuts purchasing price for Texas oil.

Bonbright & Co. report capital invested in US public utilities during 1930 was $1.275B, bringing total capital investment to almost $28B.

Foreign currency markets featured reversal in sterling-franc trend as sterling weakened while francs rose; this effectively blocks any immediate possibility of the long-awaited gold movement from France to England; Bank of France denied selling sterling and attributed franc strength to lower money rates in NY and London.

German financial circles anxious over proposed 250M mark treasury note issue to cover deficit due to unsatisfactory tax returns; it’s questioned whether banks can float the issue successfully.

French deficits topping 1.5B francs aren’t causing immediate alarm due to large Treasury reserves. Tax increases are believed unlikely. The govt. may be able to save large sums since some loans made during the war and postwar period on which it’s paying 5%-6% are now subject to conversion, and the govt. might pay 4%-4 1/2% on new issues. However, conversion may be tricky; amounts are large (over 100B francs in 1931-34), and Treasury would have to use cash reserves for bondholders unwilling to convert. Bondholders who bought in the war period have already suffered through a drastic devaluation; someone who bought a 5% bond in 1915 is now receiving 1 gold franc in interest instead of 5.

Australian deficit in first 10 months $96M; imports in past nine months fell $275M while exports fell $30M.

Western Canada has had beneficial local rains in many districts but is still in need of a “good soaking ... land was so abnormally dry that moisture penetrated the surface only an inch or two.” Some reports of soil drifting, but little seeding damage. Some reduction in acreage reported due to farmers’ financial difficulties.

British govt.-appointed Weir Committee strongly recommends electrification of British railroads; project estimated to take 15-20 years at cost of 386M pounds, but provide a return on investment of 7%-13% depending on location.

Belgian coal mines threaten to shut down unless govt. requires domestic consumption by certain industries.

Soft (bituminous) coal inventories on Apr. 1 were 29.5M tons, down 7.7M from end of Dec. and lowest since 1922.

R. Whitney reelected to second term as head of NYSE.

Companies reporting decent earnings: California Oregon Power, Hammond Clock.

Theatre:

Pulitzer Prize award to Susan Glaspell’s Alison’s House seen as “less for perfect achievement than for good intentions.” In making the award to a play from Fourteenth Street, the committee calls attention to the “pointedly bad” intentions of much of the commercial Broadway theatre this season. “The standard producers have not allowed themselves to be affected ... But conditions have seemed to allow unusual opportunity to the public purveyors of cheap smut ... lacking even a saucy smirk.” It might be expected that a general shortage of money would lead to more stringent quality requirements, but the opposite has been true; “many plays have been unaccountably inept ... probably unmatched for their peculiar union of senility of wit with lechery not otherwise disguised”; the musical comedy and revue stage has likewise resorted to “a literally infantile level of crudity” with the excuse that this is what the public wants.

The Band Wagon opens in Philadelphia tonight, a new revue by George S. Kaufman and Howard Dietz, starring Fred and Adele Astaire, Frank Morgan, Helen Broderick and Tilly Losch.

Brain teaser:

Read the following sentence: Federal fuses are the result of years of scientific study, combined with the experience of years. Now, count the f’s in that sentence - only once, no going back and recounting. An average intelligence will count 3 f’s; 4 is above average, 5 highly intelligent, and if you spotted all 6 you’re a genius and shouldn’t be wasting your time on this foolishness.

Jokes:

New Salesman, swinging jauntily into the office - Well, I got two orders today. Sales Manager - Fine, fine! New Salesman - Yep. One order to get out, and the other to stay out.

Wife - How could you think of bringing that Mr. Biggins home to dinner when you know I’m spring cleaning? Husband - He's the only man I know who can help move the sideboard.

“So Joe was the life of the party?” “Yeah. He was the only one who could talk louder than the radio.”