News from April 1931: Recovery signs and crisis in Spain

Here are a few interesting tidbits from the Wall Street Journal from around this time in 1931. I missed this one, but it is pretty good historical info.

16 April 1931

• Head of Spanish provisional govt. N. Zamora pledged Spain will be given Constitutional govt. respecting religious and property rights of all. Peseta (currency) rallied vigorously in spite of continued rumors and skepticism on new govt.’s chances of success, with bankers expecting inflation.
• Sen. Couzens (R, Mich.), former Ford VP and GM, warns that unless business leaders quickly make concerted effort to solve unemployment and stabilize industry, Congress will step in and provide for old age and unemployment insurance.
• Recent surveys indicate little hope of smaller deficit in 1932 fiscal year (starting July 1), since economic recovery will be too gradual. It remains to be decided if govt. will cover deficit by borrowing or by raising taxes. If a tax hike is chosen, the politically expedient form would be a “soak the rich” surtax, though this would of course be harmful economically. A more desirable course would be to broaden the tax base, though this seems unlikely to attract support.
• Archbishop of Canterbury and J.P. Morgan, cruising the Mediterranean on the Corsair, visit Jerusalem; King David Hotel flies US flag in Morgan’s honor.
• Leading brokers report public has been waiting for a definite business upturn before buying, but report some "shrewd buying" by longer-term interests. Bankers queried on their outlook generally feel the market "may be about dragging bottom," but admit the "banking fraternity" doesn’t contemplate "important action … to stimulate interest on the buying side until it has been established definitely that general liquidation is out of the way for some time."
• Short interest is very large, "but it is evident that the shorts are confident of their position and have refused to be stampeded."
• Hotel Pierre pres. Charles Pierre reports NY City’s large hotel business, long considered an accurate barometer of general business trends, is clearly picking up.
• While current depression isn’t an exact parallel to that of 1921, history does show that when recovery begins corporate profits can recover with amazing speed; following the 1921 depression, corporate profits in 1922 rose an astounding 800% on a revenue increase of only 8% (though they were still below the 1920 total). Steel industry decline was more drastic in 1921 depression; production bottomed at 22% vs. 39% in 1930, while prices declined 50% vs. 12%
• J. Pelley, New Haven RR pres., says business remains at low level, but sees some encouraging signs, and "more definite feeling of optimism in the air."

Source

Thursday, April 16, 1931: Dow 164.66 -3.77 (2.2%) – News from 1930