Kindly Lights

Gloomiest business comment of many a week was that of New York's Governor Franklin Delano Roosevelt after inspecting State insane asylums. "Unemployment and worry over economic circumstances," said he, "are helping to break down mental stability." He attributed the abnormal increase in asylum patients largely to "economic conditions."

Last week as a whole, however, showed many a kindly light amidst the encircling gloom. True it is that prosperous earnings reports are urgently needed at present, and hence should be somewhat discounted. And true it is that railroads last week continued to be stubbornly and drastically below par, the I. C. C. announcing that rail earnings for May were $69,173,000 (net operating income) as against $103,577,000 in May 1929. Commodities also were prostrate, with copper down to 11-c- a pound and wheat prices falling. Rayon production, for the first time in the industry's brief history, has shown a steady decline this year. Nevertheless the general impression last week was a happy one, whereat none rejoiced more than did members of the New York Stock Exchange, who, unable to make money off each other since last autumn, yearn for the return of the Public to a market revived by basically better business.

Kindly lights in last week's business news included the following:

P: U. S. shipyards are at their busiest since 1921. The four biggest yards (Bethlehem, Newport News, New York Shipbuilding, Sun Shipbuilding) recently had 19,812 men on their payrolls, a gain over July 1, 1929 of 21%. Tonnage under construction in U. S. yards for the last quarter was nearly 100% up from 1929. U. S. is now second to Great Britain in shipbuild-ing--a poor second, however, with 7.8% of total tonnage against 45.5% for Britain.

P: Cheerful was the half-year earnings report of American Telephone & Telegraph Co., whose trans-Atlantic service has just been extended to the Vatican. Gross earnings for A. T. & T. showed a $14,000,000 gain over 1929; net income was up $1,569,000. Hard-working Walter Sherman Gifford, A. T. & T. president, who plays golf "about four times a year," made a point in his report that well merits authoritative underlining: That, though industrial activity is down from the boom days of 1929, comparisons with 1928 are generally "not unfavorable." He also noted that 165,000 telephones had been added to the Bell system during the half-year, that A. T. & T. had spent more than during the first half of 1929.

P: General Electric reported gross sales of $197.220,000, up about $3,000,000 from 1929. A $4,000,000 increase in cost of sales, however, cut down net from $1.07 a share to $1.02.

P: American Chain Co. Inc. reported last week net profits for six months of nearly $1,200,000 as against $1,034,000 last year. Per-share earnings on the common went from $2.63 in 1929 to $3.30 this year.

P: Worthington Pump & Machinery Corp.'s net was expected to approximate the $1,099,000 of the first half of 1929. A recent $3,000,000 order for gas engine compressors on the new Texas Panhandle- Chicago pipe line has something to do with Worthington prosperity.

P: North American Aviation, Inc., holding company for the Keys aviation interests, showed $878,014 net for the half-year, up considerably from $770,391 earned in the last half of 1929.

P:. Most remarkable report of the week was that of Great Atlantic & Pacific Tea Co. of America whose 17,000 chain stores turned in gross sales of $548,059,000 for the first six months of 1930. This is up $41,222,000 from 1929, an 8.13% in crease.* June sales came to $82,882,000 and 407,085 in tons, as against June 1929 totals of $76,653,000 and 353,289 tons. The gain in tonnage, about twice as great as the gain in profits, is significant. A. & P. has opened few new stores, has swelled its profits by building up volume in already existing units.

P: Campbell Soup Co. sold 2,328,000,000 more cans of its famed tomato soup in the year ended June 30, 1930 than in the preceding year.

P: Last week both the oil and the auto mobile industries had encouraging news about overproduction. Gasoline stocks at refineries had dropped 1,242,000 bbl. to 47,792,000. Crude oil production was down 50,700 bbl. to 2,530,800. Automobile bile dealers recently had under 400,000 cars in stock, only one month's supply. Retail stocks were 23% off compared to June 1929.

William Wrigley, Jr., Co. reported the substantial six-months' net of $5,657,000, up $436,000 from 1929. Another big chewing gum purveyor, American Chicle Co. (Adams, Chiclets, Sen Sen Breath-lets), also showed increased earnings for first half: $1,081,000 net as against $1,039,000 last year.

P: Last week it was revealed that 4.1% more new life insurance had been purchased this June than last, that total new life insurance for the half year was 1.8% greater than the 1929 total.

*Some economists might take the increase in A. & P. sales as evidence not of prosperity, but of just the reverse. Reasoning in hard times: people buy at cheap stores rather than at more expensive stores. However, F. W. Woolworth & Co., quintessence of cheapness in retailing, reported a drop in sales for the half year of $4,491,000 to $131,318,000.

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