Friday, June 26, 1931: Dow 150.36 -1.24 (0.8%)

Assorted historical stuff:

Editorial: Plan of the Nanking govt. in China to build 22,000 miles of highways is a modest start compared with what must be done, but the important thing is that the start be made. China is in great need of improved transportation; much of current transport is by porters. Railroads are also essential, but apparently the most pressing need is for highways. "Great is the importance of a modernized China with ... the people earning wages sufficient to establish the standard of living somewhat comparable to modern ideas. A population 2 1/2 or perhaps 3 times that of the US, with a fairly good purchasing power, would set at rest the present complaint of surplus production ..."

Rather indecisive editorial by T. Woodlock. However much people may disagree with Mr. Keynes on his proposed methods for raising commodity prices, no one can doubt the need to raise them; this would do more than anything to relieve the world depression. Reviews history of "secular" commodity price trends. A common cause of these has been great wars, which usually cause inflation and are followed by deflation; another factor is fluctuations in gold supply. An increase in gold supply leading up to the World War, combined with the war itself, led to explosive rise in prices; these two factors reversed after the war and caused a large decline to a temporary resting place; in past two years, prices have resumed their fall, with as yet no sure sign of a bottom. If we hadn't so recently experienced depreciated currencies, there would be more demand for currency inflation; this may yet happen. However, some self-corrective factors may be operating; commodity prices are mostly below cost of production, which suggests stabilization is reasonably likely, and supply of gold is apparently increasing in response to its greater value. While deflation damages debtors and the credit structure as a whole, "all human experience" indicates "the structure as a whole will stand the strain."

W. Tyler Page, clerk of the House of Representatives, has calculated that the recent Congress appropriated money at the staggering rate of $1,400 an hour for every hour it was in session. [Note: seems way too low.]

Willard H. Dow, Dow Chemical pres., predicts good future for Dow metal, a lighter-than-aluminum magnesium alloy made from seawater.

The photo-electric cell, or electric eye has previously been used to make an automatic fireman; the eye sweeps across an area, and, when it "sees" a blaze, releases a stream of extinguishing fluid. The same principle is now used to save water in drinking fountains, by turning the water on when someone bends over the fountain.

IT&T to introduce telephone conversation recorder.

Record for producing a finished suit from sheared wool is smashed again [see yesterday]; operatives of John Crowther & Sons, a British firm, convert wool sheared from 12 Kent sheep into a finished suit in 2 hours, 9 minutes, 46 seconds.

Franklin P. Ferguson, lawyer, broker and Harvard graduate, indicted on charges of criminally receiving securities obtained by seven gunmen in $1.2M hold up of Lincoln National Bank in Lincoln, Nebraska.

Market commentary:

Market wrap: Stocks opened strongly as $100M credit to Germany was greeted enthusiastically; leading shares moved up on huge volume, and the ticker fell a few minutes behind. Anaconda's dividend declaration brought a fresh burst of strength around noon. However, considerable selling broke out in late trading, leading to some sharp reactions off the day's highs; weakness attributed to profit-taking, renewed bear activity, and reports the French cabinet might be forced to resign due to Parliamentary opposition to the Hoover plan. Bond market active; prices generally higher, with sharp rallies in some parts of the list. US govts. dull and a shade lower, while foreign govts. advanced; Australian issues were up sharply. In the domestic corporate list, rails and oils extended their rallies and high-grade utilities were firm. Commodities mixed; wheat down subtantially on heavy new crop deliveries, other grains steadier; cotton up moderately after receding from early highs. Copper prices rose 1/4 cent to 8 3/4 on continued heavy foreign demand; lead rose again. Silver rose 1/4 cent to 28 7/8.

Conservative observers say market met resistance about where expected; still advise buying standard stocks on further good setbacks, using stop-loss orders.

"Bullish interests generally felt that the market should be afforded a breathing spell after its recent violent exertions." The Dow industrials closed Wed. having rallied 30 points in three weeks, recovering 42% of the ground lost in the previous decline; this was about as much ground as was recovered in the previous two-month rally from Dec. 17 - Feb. 24. Due to the sharpness of the rally, market observers felt a technical reaction could develop at any time, but most felt "setbacks of this character would amount to only minor interruptions of the upward movement." Hornblower & Weeks note "great awakening of speculative interest, which has lain dormant for a year or more"; "while it looks like rash judgement to buy stocks in these active markets, the general level of prices is still so low" that long-term investors should hold on to their purchases; it will probably be mid-July before a serious reaction develops, "and that is apt to be from so much higher levels that purchases at this week's lows should not be disturbed."

In spite of short-covering that has at times been urgent, short interest is believed to have increased in the past two days as skeptical traders sold on rallies.

Leading industrials admit business hasn't notably increased and many don't anticipate expansion until after the summer, but say the debt holiday and rising market have "brought more cheer among consumers." Copper demand has shown more influence from the debt moratorium plan than any other raw material; continued good demand is expected from abroad due to low inventories. Steel production has already reached the 35% rate predicted as the summer low, and seems likely to decline further in coming weeks. Quite a few traders are fighting the advance in oil shares, citing continued high output in East Texas. However, some oil interests are confident production there will fall in the near future.

Barron's reports dealers in fixed trusts [similar to ETF's] have experienced a marked fall-off in sales since early May; decline attributed to unfavorable publicity from NYSE publication of proposed rules in May, to the stock market reaction in that month, and to severe competition.

Editorial arguing that proposals to remedy the depression by shortening working hours and raising wages would be self-defeating. While the long-term trend is in this direction, forcing it now through legislation or union action without an increase in productivity and without similar action by other countries would leave US producers at a competitive disadvantage. "Industrial reaction means precisely that the long-term trend has been interrupted by temporary adverse factors, which must be removed by temporary expedients [note: I think this means wage cuts], before the natural course of development can be resumed."

Letter to the editor proposes that building associations across the US should allow small mortgage borrowers to suspend payments of principal for duration of the depression, while continuing to pay mortgage interest and expenses; this would "be a godsend" to the borrowers, while allowing building associations to keep paying shareholders. However, this relief should only apply those with "honest intention to take care of their obligation when conditions were normal," not to "speculators who might take an undue advantage ..."

Prof. Irving Fisher says world response to Hoover plan may mark turning point in depression; favors complete cancellation of war debts.

Dr. J. Klein, Asst. Commerce Sec., says “brakes on the business machine” have been worthwhile in avoiding the “ruin that came in the wake of every one of the earlier crises, violent industrial disorders, widespread financial chaos.” These “brakes” include the Fed. Reserve system, vastly improved statistics, and much more effective organization of industry and trade. Capital reserves are “in far better shape than after any such catastrophe in previous years.” Current deflation is less damaging since it's gradual and controlled; “the descent into the present dark chasm was far more orderly ... than in any of the previous cases.” Depression likely hit bottom in Dec. or Jan.; declines to predict timing of upturn, but sees no basis for prediction of no improvement for many months.

Economic news and individual company reports:

French govt. position on Hoover plan somewhat uncertain; Treasury Sec. Mellon arrived in France to seek to convince govt. to abandon their reservations “before proceeding with his vacation in southern France.” Both Mellon and the German foreign office were reportedly optimistic on prospects of achieving a compromise.

$100M 21-day credit for Reichsbank arranged by BIS and central banks of France, England, and the US; credit was necessary to bolster Reichsbank reserve ratio, which is down to 40.4% vs. the legal minimum of 40%. However, marks weakened again, and the Reichsbank had to sell foreign exchange Thursday after three days of quiet, indicating withdrawal of foreign credits continues and confidence hasn't been reestablished. Bank of England seen possibly reducing rate, now at 2 1/2%, in July; gold holdings rose another 2.027M pounds sterling to 164.013M in the past week.

Anaconda declared its regular dividend; this was unexpected due to depressed earnings in the copper industry, and, as for the Pennsylvania dividend yesterday, "was taken as ... evidence of the desire of industry ... to follow the lead of the President, and strengthen his hand." US Industrial Alcohol suspended its dividend.

Fed. Reserve bought $20M of govt. bonds in the past week; this may indicate officials believe recent developments will increase demand for credit, and are acting to make it available. This is an apparent change in policy; since Aug. 13, 1930, Fed. Reserve holdings of govt. bonds had remained around $600M in spite of pressure from economists to buy more [see the occasional letters from T. Macauley]; Reserve officials felt banks would simply allow additional reserve deposits to pile up rather than lending them out. Total Reserve credit showed an even sharper increase, rising by $53M after having remained close to $900M since mid-Feb. Money in circulation June 24 was down $23M to $4.733B, total Reserve Bank credit outstanding up $53M to $960M. Member banks in NY City report brokers' loans down $13M to $1.406B; loans on securities to non-brokers down $1M to $1.726B.

Fed. Reserve monthly business review finds industrial production in May held at about the April level, which was 9% above the low in Dec., "when in the opinion of many reliable statisticians the bottom of the present depression was reached," but 14% below May 1930. Employment fell by the usual seasonal amount.

Some difference of opinion seems to be developing between the ICC and rails on the rate increase request. The rails have refused to specify exemptions to the 15% increase in reply to the ICC request. The ICC, "although fully cognizant of the seriousness of the rail situation, ... appears to entertain the view that a 15% increase is out of the question." Rail rate increase seen stimulating steel trade by forcing advance in steel prices and stimulating forward buying. May operating income of first 18 class 1 rails reporting was down 33.7% from 1930, vs. a 26.0% year-over-year decline for the same roads in April.

Dow average of 8 iron and steel products held at $43.58, post-1922 low. Scrap markets weaker.

Major rubber cos. are dubious of the possibility of a tire price increase, in spite of rumors circulating in trade circles for the past few days.

Canadian Bureau of Statistics reports crop prospects suffered further setback in past week due to unfavorable weather; "intense heat and damaging winds completely dimmed the hope of an average crop."

German Chancellor Breuning revokes part of recent decree eliminating minors from unemployment dole; also exempts Reichstag members and Prussian police from new income taxes. US capital invested in Germany totals about $2.5B, including $275M invested in German industry and $1.225B in German govt. bonds.

Number of farms in NY State on Apr. 1, 1930 were 159,809, a decrease of 43,586 from 1920.

International Shoe production is averaging 186,000 pairs/day, highest in over a year; further rise expected. Underwood-Fisher reports sales of portable typewriters so far in 1931 running sharply ahead of 1930 due to new models. Consol. Gas of NY reports automatic gas refrigerator sales in the first 5 months of 1931 up 40.8% vs. 1930. Dow Chemical earnings for year ended May 31 were $3.44/share vs. $4.08 prev. year.

Companies reporting decent earnings: Public Service Electric & Gas, Grocery Store Products.

Theatre:

Paid Companions - "Characterized by the producer as 'a broad-minded comedy drama' ... the result of a groping sense of humor gone naughty. Quantities of under-graduate language are forced out of the mouths of the principals ... Miss Cecil Spooner, in particular, is made a regular cussing machine. ... The story is a pent-house version of the old problem-plot - to confess or not to confess one's past to one's affianced." Lila Vaughn is a young girl who has come to New York to develop her voice. She falls into the clutches of Bruce Reynolds, "big game hunter and bad-man-about-town ... played with drunken villainousness that reaches the point of unintentional comedy." Lila's childhood sweetheart from Maine comes to her rescue; Lila kills Reynolds to save her sweetheart during a fight.

Movie:

The Skin Game - from a play by John Galsworthy, adapted and directed by Alfred Hitchcock. Adapted from a good play and reasonably well acted; unfortunately the sound recording is "atrocious" and the "photography ... mediocre." A country loving British family tries to prevent a Mr. Hornblower from erecting an industrial plant near their beautiful property and turning out of their home an old couple of workers. In the end they are able to win only by resorting to blackmail, leaving them "saddened by the thought that the end they sought to achieve has been bereft of much of its value by the despicable means used in reaching it."

Poem by B. Griffin:

"L'ETAT, C'EST MOI" (Benito's Revision of Louis)

"I'm minister this and minister that, in steering my state I am versatile. ...
Your politics chooses from rival camps? with candidates, platforms and voting free?
For politics such I've a substitute, That's simple and much improved - Its me!
Some other things, too, are much better here, On which my people never hesitate,
All our trains on time and our faith sublime, Not the state for man, but man for the state.
The kids who will soon be of army age, There's never a doubt who has them in fee;
No sharing at all with the Pope or King, They belong to the state - which, you see, is me!"

Thursday, June 25, 1931: Dow 151.60 +7.71 (5.4%)

Assorted historical stuff:

John Maynard Keynes, British economist, finds cause of depression "not in the high level of investment which was proceeding up to the spring of 1929, but in the subsequent cessation of this investment. I see no hope of a recovery except in a revival of the high level of investment." Goes way out on a limb: "There is, I think, a possibility that when this crisis is looked back upon, it will be seen to mark one of the major turning points. For it is a possibility that the duration of the slump may be much more prolonged than most people are expecting and that much will be changed, both in our ideas and our methods, before we emerge." Taking the opposing view is the prolific T. Woodlock: Following somewhat gloomy analysis of rail revenues and expenses in 1930, concludes more optimistically that current situation is unlikely to last since "the country at large has reached a stage where industry and commerce temporarily have shrunk to what virtually is an irreducible minimum"; production "barely is providing for wastage by use and by actual current consumption, if it is doing even that. ... It is clear that shelves of goods are now rapidly being cleared and reorders can not long be delayed." This is therefore like reaching the top of a steep grade; what rails need from the ICC is "a 'pusher engine' to take the train over the hill."

NYSE pres. R. Whitney reviews events of past year. Action of stock market an effect of the depression, not a cause. After the 1919-22 depression, much study was devoted to statistical and economic research, particularly toward understanding of the business cycle. [Note: Strangely familiar dept.:] “Unfortunately the long period of great prosperity from 1925 to 1929 persuaded many ... that the business cycle had been definitely abolished, and that it had become possible steadily to increase general prosperity indefinitely, without the danger of serious depressions.” Current depression marks “only too complete” a return to the cycle. In all probablity no single formula will be found for maintaining prosperity. “To select any single element in the business cycle, magnify it into a dominant causal principle, and attempt by its manipulation automatically to prevent depressions, is a tendency as fallacious as it is human.”

France places some reservations on acceptance of Hoover plan, including proposal that reparations payments being made to the BIS and reloaned to Germany. Sec. of State Stimson says plan remains as proposed; Administration optimistic on its ultimate acceptance. Strong indications seen of further temporary financial aid to Germany; details uncertain but announcement expected shortly. Italy accepts Hoover plan, with proviso that Germany give up proposed customs union with Austria. Australia hails Hoover plan; would get net benefit of 3.090M pounds. PM Scullin says plan in his opinion was first big step in solution of depression. Sen. Harrison (D, Miss.) offered wholehearted cooperation in putting plan through but opposed any tax increase; believes any increased deficit caused by plan can be taken care of by issuing bonds.

Russia will soon have nine of the largest hydroelectric generators in the world. GE is building the generators on the Dnieper River; each is rated at 94,000 hp, which is 16,600 larger than the previous record holders at Niagara Falls.

Oil pipeline from Mosul to Tripoli and Haifa will require about 500,000 tons of pipe; length about 1,200 miles; total cost about $50M; to be completed by 1935.

An Edmonton lumberman and his son have reportedly perfected a process for making fine quality insulation material from the "muskeg vegetation" that spreads over huge areas in middle western Canada and that has posed an almost insurmountable obstacle to road and rail construction in many places.

For the first time in the history of US jurisprudence, a talking film was introduced as evidence in court. The dramatic development took place at a recent trial in Philadelphia; a man had "confessed before a voice and picture recording apparatus."

British reaction to US food innovations, including the hot roast beef sandwich, has been skeptical. "Since the beginning of history, Britishers have been eating cold roast beef for dinner five times a week. But it had never occurred to anyone in the British Isles that a piece of hot roast beef could be placed between two slices of bread."

British clothing manufacturers make a suit in 3 hours 20 minutes including shearing and transportation of wool, smashing US record of 6 hours 4 minutes.

A miniature railroad system is operating in the Detroit zoo, skirting the entire park for 2 1/2 miles and for a 5-cent charge, sparing the feet of animal lovers who had "trudged weary miles visiting everything from the ... polar bears to the battling baboons." The railroad may be unique in not facing automotive competition.

Rates on all Graf Zeppelin trips reduced about 50%; summer schedule includes a 4-day trip to Norway, Iceland, and the Polar Zone, a flight to Brazil, and numerous shorter trips.

Market commentary:

Market wrap: Stocks experienced "further violent advances," apparently inspired by French cabinet's conditional acceptance of the Hoover plan. Trading started actively, with prices showing "buoyant tone"; rally picked up speed quickly through the morning, and whole market moved ahead on huge turnover, with 2.1M shares traded in first 2 hours; shorts again "badly punished." Rally appeared to gain further impetus around 1 o'clock after report of favorable Radio Corp. decision; Radio itself ran up on huge volume, and the general list also advanced further, with US Steel providing "invigorating leadership." Bonds active, with "pronounced strength in nearly all departments" and sensational advances in some groups; US govts. rallied sharply; German issues in "big demand", leading advance in European bonds; S. American extended this week's rally; domestic industrials rallied, with oils particularly strong; convertibles rallied in sympathy with stocks; second-grade rails gained sharply while highest-grade reached best prices in a decade; best-grade utilities firm around yearly highs. Commodities firm; grains and cotton higher. Foreign copper buying remained very heavy, and price advanced to 8 1/2 cents; domestic buying slower; zinc and lead rose; lead is up from 3.75 cents to 4.25 in the past few days.

European security markets rallied. Foreign currencies were quiet, though major European rates sagged. Spanish pesetas fell sharply.

Market action has impressed many, though conservative observers continue to favor stop-loss orders, with limits raised as the market advances.

Tobacco issues staged a "sensational uprush" on rise in wholesale prices; copper shares responded vigorously to price increase; rubber shares pushed ahead on prospect for tire price hike; rails gained extensively in spite of Pennsylvania RR dividend cut; bull operations resumed in trading favorites including Case, Auburn, Vanadium, and Worthington Pump. NYSE volume totaled 5.1M shares Wednesday, highest since Feb.

Brokers report renewed public interest as reflected in larger attendance; customers who "had not been watching the market for a long time" have reappeared in brokers' offices over the past few days, although "many of them have not regained sufficient courage to purchase stocks."

Recent rally has been largely due to improved psychology, as business news has remained poor. However, sentiment had become so depressed that the most urgent need "was to have the world abandon its defeatist attitude. With hopes for the future revived through Hoover's masterful stroke, the impetus has been supplied for general cooperation in the search for solution of immediately pressing problems." Popular opinion is that the Hoover plan will be followed by other steps helpful to the railroads and to farmers. Leading economists believe the plan will be followed by other steps for world relief, including credit assistance to S. American countries.

Successful adjustment of conditions abroad would benefit US industry; industrial leaders are watching developments closely, though "many of them have not generated as much enthusiasm" as witnessed among traders in the past few days. Recent sharp gains in commodity prices are very encouraging, since "no factor has been more weighty in curtailing world business than the persistent decline in commodity prices over the last two years."

Recent developments recall "the age-old maxim that 'it is always darkest just before dawn.' When the speculative atmosphere is filled with impenetrable gloom, and no relief seems in sight, something invariably happens to brighten the picture." Currently, interests who had expected to accumulate stocks slowly in a dull, sagging market are faced with a completely changed situation; people prevented from buying by the suddenness of the rally will now be "anxious to buy at moderate concessions from the recent highs," and this should provide powerful support for the market on setbacks. Some big bear operators are known to have maintained their short positions, and are likely to test the market soon; good resistance to this test should go a long way toward drawing the public to the long side.

Editorial: The Farm Board has objected to the rail rate increase at a time when cotton prices have declined so much. "This seems very much like straining at a gnat after swallowing a camel"; cotton has lost over half its value since the Board started financially "assisting" it. The objection is also unsound; "freight rates are not on a sliding scale ... instead, they are compensation for the service performed." In setting rates, the ICC "must have some regard for what service costs the carriers."

Standard Oil of NJ, in its company publication The Lamp, points to price declines as severe economic problem; many commodities and manufactured articles are being sold below replacement cost; "this situation, if long continued, means a drying up of these activities"; prices must recover to point that encourages industry to continue operations. However, cut in labor costs would be a last resort. Another article claims Russia is seeking to build up foreign credits by disregarding costs, using expropriated properties developed by foreign capital, and depriving its population; estimates per capita annual Russian oil consumption at 1/100 barrel.

Economic news and individual company reports:

Four leading US cigarette makers raise wholesale prices 45 cents/thousand to $6.85, second advance in two years following 40-cent hike in Oct. 1929; increase expected to lead to large gains in net income. Cigarette production for first 5 months was 47.924B, a record high, vs. 47.675B in 1930. Five-cent cigar production rose 2.4% in May vs. 1930, bucking a 10.8% decline in total cigar output; five-cent cigars made up 67.3% of the May total.

Fed. Reserve figures show commodity prices prices in a number of major countries were close to stability in the first 4 months of 1931, though they continued to fall fairly rapidly in the US. This raised hopes commodities may be nearing bottom, especially since US commodity price indexes have steadied lately.

Editorial: The oil industry has argued that curtailment of their production was unfair and ineffective absent a tariff or embargo on foreign oil. However, on Apr. 1 a voluntary agreement became effective among the larger importers to reduce oil imports; since then, imports have declined by 52,500 barrels/day, or 21%, while domestic production rose 254,800 barrels. This seems to "support the contention heretofore made in this column, namely, that the affliction of the American oil industry is far less the absence of a tariff on oil than it is reckless and apparently ungovernable production at home." Chicago wholesale gasoline market "fairly steady" at 2 1/4 - 2 5/8 cents/gallon.

Weekly steel reviews showed some optimism in spite of production decline. Hoover debt moratorium and rise in commodity prices were seen as favorable, and increasing pipeline and construction demand improved sentiment. On the other hand, steel operations are practically at the low of last Dec. excluding the Christmas-New Year week. Finished steel prices showed little change in trend, while scrap weakened.

Drop of 28,437 cars in most recent freight loadings report was worse than expected; declines vs. 1930 and 1929 of 20.9% and 31.5% were the worst this year. Total of 732,453 cars was lowest for the corresponding week in records dating back to 1918. Low level of traffic seen affecting rail equipment makers.

Federal Radio Commission decides in favor of Radio Corp., allowing it to keep 1,400 radio licenses in spite of court finding of antitrust violation.

Drought conditions in Canadian Northwest now called critical; "good rains are urgently needed and are being hoped for, in almost prayer-like fashion, by farmer and business man alike." US govt. weekly weather report finds generally fair to good crop progress, though rains are needed in much of the cotton belt. Spring wheat conditions greatly helped by beneficial rains from North Dakota eastward; Pacific Northwest conditions were also helped by favorable weather.

Russia cuts salaries of civil servants another 10%-20%, following previous cut of 15% a month ago, due to tense budgetary situation.

Spanish agriculturalists call on Pres. Zamora to protest against govt. ban on farm machinery in some areas to relieve unemployment; say ban has raised cost of harvesting 5%.

Newfoundland Premier Squires says no satisfactory bids received for $8M long-term bond issue; will await more opportune time to offer it.

US electric output for week ended June 20 was 1,579 GWHr, down 4.6% from 1930, vs. a 4.9% decline prev. week and 2.9% two weeks ago.

Detroit index of employment June 15 was 74.8 June 15 vs. 80.4 on May 31 and 104.5 on June 15, 1930; however, the index beat expectations of 70.

US air lines flew a record number of miles in April; 36 reporting transport cos. flew 3.413M miles, an increase of 1.180M over Apr. 1930. Air mail carried was 795,539 pounds vs. 706,375; express 59,165 pounds vs. 26,814. Passengers transported were 32,079 vs. 37,950, but the decline was due to a decrease in two lines operating over short distances.

NY State Bankers Assoc. endorses rail rate increase and Hoover debt moratorium; also recommends Federal law against circulating malicious reports on banks.

Mortgage rates charged by NY savings banks have declined from 5 1/2% - 6% a year or two ago. Currently, on loans made up to the 60% limit of value, banks are getting 5 1/2%, on 50% of value 5%, and on a small loan of 20%-30% of value, as little as 4 1/2%. [Note: still not sure about term].

NY City transit unification conferences continue at the Transit Commission offices.

Pennsylvania RR cuts annual dividend rate to $3 from $4; Westinghouse maintains $4 annual dividend rate; both dividend payouts not covered by earnings.

Companies reporting decent earnings: Chicago Great Western RR, Bohn Aluminum, Lily-Tulip Cup.

Theatre:

The Wooden Soldier - comedy by and starring Alexander Carr. "Will not do very much to alleviate the present condition of comedy in New York." David Kaufman is the "itinerant, mendicant brother of the prosperous Moses Kaufman." Moses plans to improve his fortunes by arranging the marriage of a pretty niece to a Baron; David attempts to intercede on behalf of Arthur, orphan and law student, with whom the niece is in love; "the intercession is accomplished with an approach to the custard pie style of farce that was once so popular in the movies." David is always drunk and disheveled, but "has little of the romantic color usually associated with eccentric wastrels of this type." Theme is of the "' Laugh, Clown, Laugh' - though the heart be breaking" school, but Mr. Carr has added little new.

Vaudeville:

Most interesting new feature of the Palace program this week is "charming and vivacious Mexican moving picture actress" Lupe Velez, whose largely spontaneous act combines "unpretentious songs and dances and devastating impersonations of Hollywood actresses," including Marlene Dietrich, Gloria Swanson, and Dolores Del Rio.

Jokes:

'You remind me of one of those airplanes.' 'Because I'm such a high flyer?' 'No, because you're no good on earth.'

Solicitous Friend - And have you found a law firm that is satisfactory? Widow - Don't talk to me about lawyers. Why, I've had so much trouble over the property, I sometimes wish my husband hadn't died.'

Wednesday, June 24, 1931: Dow 143.89 -1.93 (1.3%)

Assorted historical stuff:

US officials cheered by worldwide rally in financial and commodity markets following Hoover proposal for a one year suspension of reparations and war debt payments. Pres. Hoover is now canvassing Congress regarding the proposal, in lieu of calling a special session of Congress to register its sentiment; no official action is necessary before Dec. 15, after the next regular session convenes. "Pres. Hoover's action, so far as could be recalled, is unique in national affairs. It corresponds closely to the action of a corporation executive [who], when obliged to work fast, takes an informal poll of his directors or stockholders and then obtains official ratification ... at the next annual meeting." If it works, this technique may find frequent use during long recesses of Congress to let the President act without calling an special session. Latest reports indicate proposal will be accepted by all affected nations and become effective shortly; French govt. seen accepting plan, though possibly with internal political complications. Rumors of further international action to help the German situation received no official confirmation.

Editorial: World-wide reponse to the Hoover proposal has been impressive, but some risks threaten it; chief among these is apparent inclination of some nations including France and Italy to attach various conditions to their approval. Some of the stipulations may be worthy in themselves, but to attach them formally to the proposal threatens to delay or scuttle it, in a situation where "time is of the essence." A good example was set here by Pres. Hoover himself in renouncing any connection of the plan with disarmament proposals. The "financial and political breakdown of Germany ... must be prevented, and that within a very few months. Everything else can wait."

Noted economic forecaster George Bernard Shaw says believes the US will be exceedingly lucky to get any payments from Europe, and in fact will be lucky if she doesn't have to rescue Europe from financial oblivion. William Randolph Hearst comes out against Hoover proposal; says US taxpayers shouldn't be asked to pay any further price of "European war frenzy"; furthermore, "says that ... revision of war debts is purely a plan of international bankers who will benefit through commissions"; supports Coolidge for next US Pres. Letter to Pres. Hoover from German Pres. von Hindenburg was apparently not the reason for Hoover's sudden decision to publish debt proposal Saturday evening, since letter was not delivered until Monday morning.

Editorial by T. Woodlock responding to letter questioning whether US forgiveness of war debts would mean the US would pay much of the cost of a "war started between other nations and for which we were in no way responsible," and whether this in fact "might tend to encourage future wars, perhaps also at our expense." Woodlock sets the letter-writer straight. First, “it is about as certain as can be anything human that ... it will be many a long day before this country ... lends money to any other country ... for war or any other purpose.” If the war has taught us anything, it's that govt. debts “are, in fact, uncollectible the moment the debtor govt. is no longer willing to pay.” Second, the US has in fact lost much of the money in question in any case, since there's no realistic chance of collecting it. Third, attempts to collect it are likely to breed future wars. Finally, one certainty “is that any future wars on a large scale, whether we are concerned directly or not will be 'at our expense' anyhow, for all such wars as the last are at everyone's expense, and it is hard to tell, judging by the ultimate consequences, who 'won' and who 'lost.'”

Editorial: Pres. Hoover's apparent recent stand against all capital gains taxes on grounds they intensify both booms and busts may be logical, but is probably too radical a change for the US tax system. Current concept of capital gains as income is so deeply ingrained in our income tax system that its elimination would require "pretty complete rewriting and reinterpretation of this complex law."

Canadian Pacific liner Empress of Britain completes transatlantic crossing from Cherbourg to Father Point in record time of 4 days, 12 hours, 30 min.

Highest-paid official in Nassau County last year was the dog catcher, who made $17,760 averaging a catch of 341 stray dogs per week. His motto: "I just mind my own business and work hard."

New NY City elevator regulations become effective next month; allowable speed increased to 1,200 feet/minute from 700; regulations will permit double-deck cars and two cars within one shaft [Note: what could go wrong? dept.]

Market commentary:

Market wrap: Stocks experienced persistent profit taking and bear pressure in the morning and through mid-day. However, selling was absorbed in a narrow range and "stout resistance" developed to efforts to extend early setbacks; relative steadiness in leading rails and industrials was punctuated by continued bullish demonstrations in special groups including coppers, oils, and amusements. A brief rally around 1 o'clock was wiped out by heavy selling on disappointing steel production and freight loading reports; however, setbacks in leading shares were easily held to technical proportions. Bond trading slowed somewhat, prices irregular in some sections but mostly higher; S. American issues rallied while German and other European were steady; German bonds as of the June 22 close had advanced sharply from the year's lows, with gains ranging as high as 14 1/2 points; US govts were slightly lower again; speculative and convertible industrial issues "showed more vigor than for a long time"; highest-grade rails firm but second-grade narrowly irregular. Commodities weak; grains down substantially and cotton down moderately, though both recovered some ground from the day's lows. Copper buying was very heavy from both domestic and foreign consumers; price at 8 1/4 cents but expected to rise to 8 1/2 today. Silver down 5/8 cent to 28 1/4.

Conservative observers believe market acted relatively well in the circumstances; advise buying standard stocks on good-size reactions on theory market will feel positive "effects of latest constructive developments for some time yet."

Foreign markets generally lower on substantial profit taking. Foreign currencies were irregular as market awaited further developments on inter-govt. debt relief; marks were firm, and capital flight from Germany has practically stopped. Reichsbank position is improved, but still precarious; it was reported to have secured a $300M credit from the Fed. Reserve but this was unconfirmed; support from the BIS was also reported.

The short interest was "rather severely punished" by the recent sharp rebound; many had left the financial district for weekend holidays and so were unable to cover their positions until Monday; "at times, covering was urgent and heavy," some of it from foreign locations.

Oil industry observers encouraged by California advances in crude oil and gasoline prices; believe if East Texas situation was "properly adjusted" prices could be advanced from current record low levels in other sections.

A number of large consuming companies are said to have been buying commodities to replenish depleted inventories.

While some profit-taking was to be expected after the sharp rally in the past two sessions, "experienced analysts were generally of the opinion that the danger of an extensive reaction at this time was not great." Poor business news can hardly come as a surprise at this point, and therefore has likely been largely discounted. Technical indications strongly suggest that, even if stock prices eventually revisit the June lows, they should work higher for some time first, though undoubtedly at a slower pace. Advance through the 145-155 range would be considered highly significant.

Canadian Dept. of Trade and Commerce sees outlook for higher wheat prices due to low European wheat supplies, lower acreage in many countries, and poor North American crop prospects.

Recent "satisfactory manner in which ... pressing problems were adjusted" has led Wall Street to the inference that "the situation both here and abroad is under better control by the banking interests than most observers realize. Acute conditions in Berlin, Vienna, and elsewhere were handled rather quickly, although for a time considerable anxiety existed regarding the possibility of most disturbing developments at those centers."

J. Pelley, NY New Haven & Hartford RR pres., says "no indication of improved business conditions to be found at the present moment."

Viscount Bearsted, Shell Transport & Trading Ltd. chair., says "cannot hold out rosy prospects for the current year." However, oil industry concerns a vital requirement of civilization, therefore must continue to exist, and will be one of first industries to revive when world conditions improve.

“Well-informed opinion” in Washington holds that the farm mortgage situation is due to improve, thanks to low money rates, commodity prices nearing bottom, and farm costs likely to fall. However, a possible adverse factor is farm taxes, which remain relatively high.

Economic news and individual company reports:

Bank of US officials sentenced: B. Marcus (pres.) and S. Singer (exec. VP) receive 3 to 6 years; H. Singer "an indeterminate sentence in the penitentiary."

NY State Comptroller Tremaine denounced gossip about banks and securities; "particularly wants to protect banks from the gossip that drifts through Albany from politicians, representatives of investment houses and sometimes even banks themselves." [Note: from banks themselves - inconceivable!]

Weekly bank statements continued to reflect drastic security loan liquidation. However, "all other" (commercial) loans rose $12M after declining only moderately for several weeks; this may indicate business loans are about to expand in normal seasonal fashion. Continued decline in non-govt. security holdings "is difficult to explain by any other reasoning than that banks as a group desire to maintain an extremely liquid position." Society for Savings, one of the largest mutual savings banks in New England, cut mortgage rate 1/2% to 5 1/2% [note: not sure what the term was].

Rail freight loadings for week ended June 13 were 732,453, down 28,437 from prev. week, down 20.9% from 1930 week, and down 31.5% from 1929. ICC allowed rails to cut rates on cotton from Mississippi valley to New Orleans to meet truck competition.

Steel production for week ended Monday was 35% vs. 38% prev. week, 39% two weeks ago, 66% in 1930, and 95% in 1929. Amer. Metal Markets says just as breaks in the stock market led to noticeable decreases in steel buying, "there is excellent reason for believing that the debt moratorium with the rise in the stock market will have a distinctly favorable influence on the buying of steel" due to improved business sentiment. "This may not result in heavier operations within the next few weeks but should serve to reduce the usual seasonal decline." American Machinist says tool markets remain inactive.

Refineries ran at 66.8% in week ended June 20; stocks of gasoline fell 1.428M barrels to 41.982M, lowest since Jan. Crude oil production in week was 2.482M barrels/day, up 19,250 from prev. week and down 116,500 from a year ago. Two large groups of East Texas oil producers disagree on methods to correct overproduction. Oklahoma Federal Court to hear application of Champlin Refining for permanent injunction against state enforcement of curtailment. Standard Oil of NJ cuts price of gasoline in "tank car lots" in NY by 1/4 cent to 5 1/2 cents. A. Clinger of the Warren County Assoc. of Oil Producers says Pennsylvania oil producers "faced with the absolute necessity of lowering the present production."

President's Emergency Employment Committee reports total contracts for public works since last Dec. 1 were $1.769B.

German govt. raised taxes 3 times in 1930, but is now enacting a “veritable book” of further tax increases and spending cuts to cover a 1.8B mark deficit, including higher taxes on income, sugar, and gasoline, and cuts in unemployment insurance, govt. salaries and pensions; almost all industry will be put on a 40-hour week.

British govt. to introduce bill to borrow $125M more for unemployment insurance fund, bringing total debt of the fund to $575M.

European tobacco use in 1930 was about equal to 1929, but down 0.5% excluding Britain, which was up 2.5%; prices were generally maintained.

NY Chamber of Commerce comes out in favor of 15% rail rate increase. Almost all states west of the Mississipi seen opposing rail rate increase.

Tentative settlement reached in Pittsburgh Terminal Coal Co. strike, providing for wage increases, full recognition of United Mine Workers Union, and "right of the miners to elect a check-weighman."

Bureau of Agric. Economics reports percentage of total farm cash income from different products during 1925-29: cotton 14.59%, milk 14.52%, hogs 12.91%, cattle and calves 10.05%, eggs and chickens 8.13%, wheat 7.89%.

Breakdown of NY City transit unification conferences threatens as result of disagreement on price city is to pay for BMT and IRT; difference is about $8.6M.

T. Watson, IBM pres., reports IBM's European sales in April and May were up about 22% vs. 1930.

Companies reporting decent earnings: Woolworth Ltd. (British affiliate), Brooklyn-Manhattan Transit, Hamilton Woolen Co.

Movies:

Confessions of a Co-Ed - a Paramount film, "based on an anonymous diary." Story is a letdown from the sensational title, being "a very mild confessional, concerning indiscretions no more extraordinary than a 'free love' relationship and the 'co-ed's' subsequent marriage to another man to protect the child to be born." Happy ending ensues when, 2 years later, the girl's first and only real love returns from South America, learns of his child, and the "false marriage" is dissolved so the girl and her college sweetheart can start over. Fortunately, acting and direction are superior. Norman Foster is likable as the young man who marries the girl but later nobly gives her up when "he learns of his friend's prior claim." [Note: nobly giving up the girl seems to be a common theme in movies of the time ...]

Versuchen Sie Meine Schwester - Another infectiously funny German musical comedy; this one concerns Anny Spatz, maid to a theatre star, and her machinations to tread the boards herself and meet Vienna's matinee idol Julian Holt.

Joke:

Farmer - If I were as lazy as you, I'd go and hang myself in the barn. Hobo - No, you wouldn't. If you were as lazy as me, you wouldn't have any barn.

Tuesday, June 23, 1931: Dow 145.82 +6.86 (4.9%)

Extra! Extra! Read all about it! Dept.:

Pres. Hoover proposed a one-year moratorium effective July 1 on a quarter-billion dollars of war debt payments owed the US, conditional on similar postponement of reparations payments owed the important allied powers. Announcement of the proposal was followed by a sensational rally adding billions to values in securities markets worldwide, and by sharp rises in commodity prices and buying. Pres. Hoover reportedly came up with the proposal June 5, and has been holding daily bipartisan conferences on the subject since, also asking Treasury Sec. Mellon to investigate the situation on his trip to Europe. No international conference on the proposal is contemplated since it will automatically become effective when accepted by all parties concerned. Sec. of State Stimson says prompt action is necessary by other nations to make proposal effective. Proposal will cause loss of $246M in govt. revenue, but may result in increased business activity, making up the loss.

Reaction in the US was almost uniformly favorable, with praise heard from Democrats; only possible political opposition seen coming from Progressives; approval by Congress expected. Strong praise came from banking chairmen including T. Lamont (J.P. Morgan), C. Mitchell (Nat'l City Bank), A. Wiggin (Chase Nat'l), and P. Warburg (Int'l Acceptance Bank); plan called constructive, wise and courageous; Warburg says it may mark turning point and pave way for general business revival. M. Taylor, chair. of US Steel finance committee, calls plan “the first great constructive move we have made for the world's economic recovery.”

German Chancellor Breuning appeared "tired but smiling"; expressed gratitude for Hoover's proposal, but sought to damp "wild jubilation" in Germany, cautioning the proposal provides no immediate relief to German taxpayers and the unemployed. Dr. H. Schacht, former Reichsbank pres., hailed proposal, recognized Breuning's success in obtaining relief, and called on him to harness all German patriotic forces to take advantage of their new opportunity. "Different tone" taken by Joseph Goebbels, chief adjutant of Adolf Hitler, who attacked Hoover proposal as "inadequate."

Hoover proposal received enthusiastically in most of the world, "except in France and some of the smaller European nations under French influence"; official French statement lacking, but govt. seen likely to propose modifications, including international conference. US opposes conference since it could lead to delays of weeks or months, while German govt. is in immediate peril. French attitude likely due to fact she receives more in reparations than she pays out in debt payments, so would have to make financial sacrifice to accept plan. US officials disappointed but not surprised by lack of French enthusiasm; however, believe France will not be able to stand alone to block the project; also note "France would be hit hard by the substitution of a Communist or Fascist regime for the present one in Germany." Three major British parties cordially welcomed the proposal and were ready to cooperate. Italy approved the proposal although it would involve a sacrifice of 180M lire. Russia expressed some doubt through semi-official newspapers that the proposal was more than an "empty gesture" driven by fear of German revolution.

Further steps may be pending, in particular a huge credit of $250M-$500M to Germany, held to be necessary due to the Reichsbank's weakened position; unprecedented withdrawal of credits in the past two weeks has forced the reserve ratio down close to the legal minimum of 40%. It's not believed a credit of that size is actually needed, but bankers believe "the very knowledge of the existence of such a huge credit" would restore confidence [Note: Bazooka in your pocket theory ...] An unconfirmed report said Treasury Sec. Mellon proposed an international conference to be held in Washington in Sept. on war debts [Note: I assume for planning past the year-long moratorium].

Assorted historical stuff:

Number of customers served by electric utilities was 24.701M at end of 1930 vs. 12.710M at end of 1922; average cost of current was 5.93 cents/KWHr, down 14% since 1926 and 31% since 1913. Over 90,000 farms were electrified last year, largest number in history.

Editorial by T. Woodlock in response to letter from anonymous reader making a variety of heated charges against the railroads. Woodlock, more in sorrow than in anger, refutes charges in dignified manner; says letter and others like it indicate sore need for public education on facts of the rail situation.

Ten engineers of Arthur G. McKee & Co. to sail for Russia where firm is designing and supervising construction of Magnetogorsk iron and steel plant; will be one of largest steelworks in world when completed.

[Note: Sheer Genius Dept.] German railways are experimenting with faster train systems, though current financial conditions prevent their installation in the near future. Most interesting is an all-aluminum streamlined passenger car, weighing 18 tons against 70 for a normal express rail car. It resembles a Zeppelin and is driven by propellor; using a 500 hp aircraft engine, the system has attained a speed of 115mph but requires a dead-straight track; fuel consumption was 60 liters of gasoline/100 km. The system is ultimately intended to run on overhead cables instead of rails. More practically, new trains using all-steel cars and giant locomotives have reached 85 mph and can handle level tracks with curves, though they require strengthening the roadbed.

At one time different alloys of steel were sold by brand name; then, practice largely changed to selling them by chemical content as revealed by analysis. It now turns out the old system may be more accurate, since steel with the same chemical content may perform differently due to different treatment when made [Note: this is partly due to differences in microstructure of the metal, which is an active area of research today].

One farsighted Montreal brokerage has prepared for the next market boom by installing fully equipped kitchens in their new offices to be used in emergencies; they recall that during the 1929 market staffs were at times required to work night and day, with little sleep or food.

An innovative solution to the age-old problem of golf vs. church has been developed by Rev. Arthur Wheelock of Highland Congregational Church, West Plains, NY. Promptly at 8 o'clock every Sunday morning, he holds a special service for golfers, already dressed in their play clothes. The service last 35 minutes, and the golfers can then go to their games with a clear conscience. The morning service for normal people starts at 11, as usual.

Another picturesque tradition bites the dust. Niuafoou, one of the Fiji Islands, receives its mail every four weeks from a passing steamer. Until recently, a mailman swam out to bring in a waterproof mailbag. Recently, he was attacked by a shark "and came out second-best in the encounter." The new mailman uses a canoe.

Market commentary:

Market wrap: Buying orders poured into Wall Street from around the world on "world-wide enthusiasm" generated by Pres. Hoover's proposal; an astonishing 18 issues on the NYSE opened trading on blocks of 5,000 or more, and over 1M shares traded in the first half-hour, extending Saturday's gains in sensational style. This caused some selling pressure by skeptics believing the pace of recovery was too rapid, but offerings were absorbed impressively and, after moderate setbacks, the rally resumed around 11 o'clock. Bears hoping to cover on reactions received little subsequent opportunity, as the rest of the session alternated brief pauses with fresh waves of buying and progressively higher prices. Final NYSE volume was 4.6M, highest since Feb. Bond market active, with prices higher in almost all sections; German issues led rally in foreign list; domestic corp. higher in nearly all grades; "strangely enough, US govt. obligations were mildly reactionary." Commodities extremely strong; grains up sharply, though wheat didn't hold all of a sharp early runup; cotton rose explosively, with July up 69 cents to $9.58. Copper buying much heavier, particularly for export, and price rose from 8 cents to 8 1/4 in mid-afternoon; lead rose 1/4 cent to 4. Silver rose 2 cents to 28 7/8.

Conservative observers believe advance has been too rapid; advise taking profits to reaccumulate on reactions; still warn against taking short side.

US Steel rose over 6 points on top of its 6-point advance Saturday; rails rallied robustly; copper shares were subject of "bullish demonstrations"; trading favorites including J.I. Case and Auburn soared sensationally. "On the whole, the gains in the general list from Friday's close were the most violent seen since the sharp technical recoil of Nov., 1929." Public and odd-lot buying showed a large increase. Foreign demand for securities in NY was heavy; the Paris office of one large NY broker alone bought 85,000 shares; heavy demand also came from Germany; substantial buying from S. America was encouraging after several years of little activity from there.

Stock markets around the world rallied; stocks in Berlin soared, with most quotations opening up 10%-30%; markets also rallied strongly in London, Paris, Brussels, Rome, Amsterdam, Bombay, and Tokyo. Foreign currencies reversed recent trends; marks gained sharply, sterling and francs rallied, while Swiss francs and guilders fell; capital appears to be flowing back into Germany in large volume.

Turn of events abroad seen possibly affecting action taken at important dividend meetings in near future. IT&T heavily bought in past two days on theory it will benefit from international improvement. Oil interests closely watching conditions on West Coast; success of Standard Oil of Calif. price increase would make it "one of the most important steps taken in the oil industry in a long while."

Discussion on local banking at NY State Bankers Assoc. convention finds “too many communities impose excessively heavy burdens on their local banks.” M. Holmes, Assoc. pres., opposes investigation of State Banking Dept. as opening way for partisan politics.

Market observers differed on whether the substantial rallies from the June 2 lows were a definite change in trend or another bear market rally. Skeptics pointed to the close similarity of market movements this year with those in 1921, when the market broke to new lows in June but didn't hit absolute bottom until August, and therefore argued the market was likely to fall close to the early June lows again this summer. Optimists argued "the sudden turn for the better in the international situation has sounded the death knell of the bear market"; also noted the decline this year from the Feb. high was much more drastic than in 1921, making the 1929-31 bear, on a percentage basis, already "by far the most sweeping on record." Whether or not the early June lows are retested later, Dow theory now definitely indicates at least a temporary uptrend, as the industrials have confirmed the earlier movement to a new rally high by the rails; this is expected to bring excellent support into standard stocks by interests who have "been awaiting a signal of this sort." Also likely to generate support for stocks is an apparent change in psychology; dramatic rally since Friday's close indicates "rampant pessimism" had created "drastically oversold" position, requiring only a small spark to ignite the rally. "The recent spirit of hopelessness has been dissipated, and it would require some profoundly depressing developments to cause a recurrence of the gloom prevailing several weeks ago."

Harvard Economic Society: “improvement in business volumes, the first step in business recovery, is already under way”; setback in May not continuing; see strong similarity to 1920-21 depression and recovery.

Letter from T. Macauley, Sun Life of Canada pres., giving more detailed explanation of his argument that the US now effectively holds the key to worldwide recovery; describes world and US monetary system and again advocates large Fed. Reserve purchase of bonds to expand bank credit and raise commodity prices.

Economic news and individual company reports:

"New European union commission" of Aristide Briand has started on a "month of intensive work for getting Europe out of its economic depression." Four subcommissions will meet to prepare practical suggestions; these will be submitted to the European commission for final approval on Sept. 3 and to the League council at the same time, after which they will immediately be put into force.

Collapse of the Creditanstalt wrote “a new chapter in the melancholy history of post-war banking in Austria.” Bank dates back to 1865; largest bank in Europe east of Germany; was identified with the Rothschild family throughout its history. Had unrivalled network of foreign relationships, with credits from every leading country; controlled banks in many European cities; shares held worldwide. Conducted 3/4 of banking business in Austria; problems were caused by “depreciation of its investments not bad management or speculation”; was stuck with large holdings of industrial cos. due to historical circumstances. Has been kept open by govt. support; future uncertain, but at best will survive as a local bank.

Newfoundland Premier Squires announced arrangement made with syndicate of Canadian banks to take care of bond payments due over next two weeks, pending long term financing.

Florida Gov. Carlton reports only 45% of taxes collected up to June 1 vs. 66% at same time last year; state obligations of $1.154M must be met at once. Utah and Idaho introduced state income taxes.

Lord Kylsant, managing dir. of the Royal Mail Steam Packet Co. and “one of the biggest shipping men in England,” ordered committed to trial on charges of fraud in annual reports of the company.

Representatives of Eastern rails continue to meet regarding consolidation; expect to present plan to ICC within a week. Meeting of representatives from life insurance cos. and savings banks held at Met. Life office; will organize emergency committee with aim improving rail situation in order to preserve value of their rail security investments. Cos. represented hold about $4.5B of the $20B in rail securities outstanding. Merchant's Assoc. of NY endorses "reasonable" advance in rail freight rates.

Editorial replying to letter questioning NYSE request for information on short sales - letter asks why "is it the business of the Stock Exchange to know who is selling short, and what quantity"; argues that "when things were booming along in 1929, the Stock Exchange did not ask for a list of the stocks being bought ..." In reply, it's noted that all information requested is strictly confidential, and is only the business of the NYSE to the extent it's necessary to maintain a "free and open market" by preventing "unfair use" of NYSE facilities; this could include creating a "fictitious appearance of distress liquidation," but could also include faking "aggressive accumulation"; the NYSE has requested information and acted on operations on the long side, particularly when it appeared a "corner" was developing.

Several major oil cos. say they must stop buying from outside producers in the East Texas district since their own wells are producing all they can use. Last week, 90 wells were completed in the district, adding 371,362 barrels to the potential daily output of the district.

Northwest Bancorp. reports improved crop conditions in main Northwest producing areas.

US retail sales estimated at $53B in 1930, or almost 2/3 of estimated national income; there are 1.549M retail stores, making avg. sales per store about $32,300.

NY savings banks including Bowery, Dry Dock, Emigrant Industrial and Union Dime, cut interest rate paid to 3 1/2% from 4%.

S. Untermeyer resigns as special counsel to city in transit affairs, but will continue to fight efforts to raise prices paid for BMT and IRT in city transit unification.

NYSE seat sold for $225,000, up $25,000 from last sale.

Iraq Petroleum Co. has placed orders for $13.650M of materials to build Y-shaped pipeline from Mosul oil fields to Tripoli and Haifa.

Companies reporting decent earnings: Consolidated Laundries, Perfect Circle (automotive piston rings).

Jokes [warning: some racy ones today]:

"'I see by the paper that a minister lists among our modern vices: cigarette smoking, drinking, petting, and chewing gum.' 'I never could see any sense in chewing gum ...'"

"Wise Winifred says she carries her money in her stocking because her father told her to put it where it would draw interest."