Midyear Situation

"We need more faith in ourselves. Largely because of some decline in trade we have set about finding fault with nearly everybody and everything. Yet our government, our physical properties and our industries have changed very little from a year or two ago, when people were fairly content."

With these words, Calvin Coolidge last week emerged from his long silence regarding Business Conditions. The statement began his new series of syndicated daily newspaper articles under the heading: "Calvin Coolidge Says:" (see p. 18). Bullish in the first, he waxed spiritual in the second, then practical in the third wherein he suggested that "a healthy commerce" would be created if all who can would pay their retail bills promptly, buy as much as they can.

Yet even these comforting words from the Bull Market President could not dissipate the realization that ''some decline in trade" is an understatement, that there are few signs of improvement.

Opinions. Hardy indeed is the prophet who will be definite in his predictions for the immediate future. Bertie Charles Forbes, who stoutly maintains things have gone far enough, last week said July income can be reinvested now "with every confidence." He predicted: "The turn of the year will mark the turning point."

Guaranty Trust Co. of New York in its survey wrote: "Recent developments do not brighten the outlook for a marked upturn in the early future. . . . With few exceptions current reports continue to point to further recession in industrial output and trade volume."

U. S. Representative Louis T. McFadden of Pennsylvania, vociferous chairman of the Banking & Currency Committee, made a dire prophecy of much lower price levels, even hinted at anarchy and revolution, insinuated that vast machinations by a J. P. Morgan-directed group are to blame for everything.

The Department of Agriculture, anxious to reduce wheat acreage, came out with a lengthy report of which the essence was: "While improvement is expected over the low level of prices in the past month, the present prospect is that world wheat prices during the next seven years will average appreciably lower than in the past seven years."

Earnings. While it was early for earnings statements to come forth in large volume, many predictions were made last week.

E. I. du Pont de Nemours & Co. made an official estimate of $15,418,000 for the second quarter, exclusive of General Motors dividends. This would compare to $17,347,000 for the same three months last year.

General Motors was estimated as having earned $100,000,000 in the first six months against $151,860,000 last year. This was more than enough to cover the liberal dividend on its common stock.

Packard, though reporting record sales, earned only half of the $14,675,000 it made during the first six months of 1929.

Railroad Earnings will of course be much lower than during 1929, the first 74 roads reporting for May showing a drop of 33.1% in income.

Rare example of a depression-proof industry was shown by reports that American Chicle Co., gum-makers, would do as well as last year.

Bank Clearings. Bradstreet's summary showed bank clearings for the six months were off 16.9% in New York City, 14.9% for the U. S., 15.9% for Canada.

Investors. A bullish item was a confirmation by U. S. Steel of the impression that odd-lot buying of good stocks continues strongly. At the end of June. Steel had 5,557 more stockholders than at the end of the first quarter. Its roll of 129,626 investors compares to 105,612 during the bull market a year ago.*

*No mention was made in Steel's report as to whether or not Calvin Coolidge has repurchased any of the 70 shares he sold in 1928.

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