News from July 17 and 18, 1930. Plenty to learn from here. Plus ça change…
- Editorial: Constantly increasing taxation is a burden on "every form of enterprise". It diverts money from productive uses to government functions which "though mostly indispensable, do not always require the scale of expenditure to which our public servants have become accustomed." Total taxation (including local) has risen from under $3B in 1913 to about $9B now; recently rising about $500M/year. This aggravates the current depression.
- Fiat and GM negotiating for alliance, manufacture of GM cars in Italy.
- Market maintained uptrend, defying expectations of a technical pullback. After brief hesitation at open, strong buying began and uptrend persisted through day; most highs in the last hour.
- Federal Reserve faces tough problem in how long to continue easy money policy, since in time “this has always stimulated speculation to dangerous proportions.”
- Lammot du Pont, pres. E.I. du Pont de Nemours, sees fundamental conditions still sound and foundation for upturn secure in low commodity prices and interest rates. A.G. Baumbogger, first VP Montgomery Ward, sees general industrial business on the rise and all indications are that low point of the depression has passed.
- France proposes "United States of Europe" federation. Britain cool to the idea, but it’s probably workable without them. However, German participation would be essential. German response "conciliatory in tone," but raises some big obstacles, indicating desire for revision of the World War peace treaties, "including, presumably, alteration of certain of her new boundaries and removal of the treaty restriction upon her military establishment."
- Some traders believe uptrend established, are buying leading shares on dips. Others still cautious until "return of public buying on a larger and confident scale."
- Editor: "We can feel for a certainty that business is scraping along the bottom along with most commodity prices, which should begin to firm up due to the marginal producers finding the going difficult and finally being eliminated … The great American public is not so badly off as some people would like to have us believe."
- Some hopeful news (green shoots!) seen from steel (some recovery in order levels, seasonal upturn anticipated), rail freight (percentage decline was smaller vs. 1929, though both were holiday weeks), and oil (drop in gasoline stocks).
- Bank earnings generally lower than last year, but better than expected. Capital positions seen generally good.
Excerpts from News from 1930
