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UNIVERSITY
OF MICHIGAN
ESTABLISHED 1S39
APR 13
Business
195t
mmmm
UMUIY
Volume 173
Number 5002
New
■
EDITORIAL
York, N.Y., Thursday, April 12, 1951
Price 35 Cents
As
We
See
The Rats Leave
It
Controls—Warning To U.S
A clear
we
are
be had
understanding of the situation by which
confronted in both Asia and Europe can
only in light of a realization that we are
engaged in two kinds of
war.
We shall have
and abroad.
British economist finds
course,
grown
a
tool
was
instrument
or
with
are
the
to
end
an
Suggests Britain's purchase
One
and will "save" the world.
it is not difficult to understand
not
to
condone)
20%
the
would warrant almost
any sort
A number of other
such
of
men
are
out
one
is
main
One
emphasis that I think
course,
But the
to be
■
rate
that
is,
might have
4.37%
STANY
could
that
little
the
over
ybu feel better
Switzerland has
big job of supporting
of
labor
or
specific
John
that; the Bank of France is help¬
lately, too, to say nothing of
Latin, Arab and other central banks
whose manipulations have not been
subjected as yet to public discussion.
Jewkes
This
materials
raw
pricing
or
materials,
of
Continued
on
page
♦Transcript of
per
DINNER
the
are
ounce..
premium
41
talk by Professor Jewkes before Conference on
Mobilization, held under the auspices of the
Chicago University Law School, White Sulphur Springs, West Vir¬
ginia, April 6, 1951.
Economics
is
gold bars
"free"
the
Switzerland is not alone
ing
controls.
By that I mean
specific control and allocation of
distribution
34
that
peg the dollar-franc
Swiss francs to the
it not make
know
taken
I believe that
the people who
would have dif¬
beyond dispute.
page
—
on
CONE MILLS
of
coins
rose
53%.
to
PICTORIAL
SECTION
gold in Paris alone reaches
duPont, Homsey & Co.
Exchs.
31 MILK STREET, BOSTON 9, MASS.
Tel. HAncock 6-8200
Tele. BS 424
BROADWAY, NEW YORK 5, N. Y.
Tel. WOrth 2-0115
high
Continued
as
$4.5 mil¬
on
page
34
Annual
State and
600 Branches
Canada
across
Monthly Commercial Letter
SECURITIES
upon request
120
as
as $44.80, the
daily turnover in
lion.) The Bank of France sells gold in the free market
taken at the
NEXT WEEK—Pictures
Established 1927
INVESTMENT
Stock
high
the
R. H. Johnson & Co,
Boston
as
The
Municipal
Bought—Sold—Quoted
New York &
Palyi
a
of
Preferred & Commcn
Members
Dr. Melchior
way our "supporters" operate: Suppose
quoted in Paris at the equivalent of $42.00
(Actually, bars went
Security Traders Association of New York on April 13 at the WaldorfAstoria Hotel will be reproduced in a Special Section of the "Chronicle" of April 19.
Dinner
,
Swiss central bank claimed
at
Does
to
physical
strange, unprin¬
1936
obliged to
the dollar?
the
unalterably deter-
of
:
dollar, which oh Jan. 6 touched 4.27%.
\
of
among
in many other ways
ferent views, there would have been
found
a
much greater distrust
of
a
deterioration of the
The official report went on
at
England;
everywhere
means.
on
points
Controls
we
further
scarcely constitute an obligation any
longer since the pound devaluation.
found if this conference had gone on
"salvation"
Continued
Switzerland
in which you
difference
January 14, the Swiss National Bank announced
the previous week, it "was obliged to begin
in
that this was done under the
tripartite
agreement
between
the
United
States, Great Britain and
?
interest.
some
••
V
.
.
to say
to represent peculiarities
British system
There
two
or
balance of payments.
r«>
dollars to prevent
dollar-franc market rate.'*
income^ about
British Distrust of
V
against the outside world—may be present, but
cipled and ruthless
seem
the
might find
per¬
verted notion of what is needed to defend itself
least two basic facts appear
One of them is that these able, if
pick
v
buying
percentage as in this coun¬
Perhaps it would be useful for
to
which
a
that
war
same
me
of
national
^.4
I..
On
rearmament to about
our
the
our
\
in
motives—including
at
of
try.
event
an
(though, of
belief that
a
In such
librium to
•
particularly interested in,
of statistical material about the British
the level of
"movement," which at one time certainly con¬
tained many of the elements of a
religion, as still
at bottom governed
by a fanatical belief that it
can
foreign central banks which sell gold at premium and
proceeds into dollars. Lays decline in U. S. gold
reserve to excessive grants
abroad, along with raw ma¬
terials stockpiling. Says rumor of "dollar devaluation"
is factor in present situation, and urges making dollars
scarce by
cutting "global subsidies" and restoring equi¬
convert
disrepute.
pattern for U. S.
as
on
for
England's
Very briefly, our position is ih Great Britain that
trying in the next two or three years to raise
are
we
they hope to
what
also conceive of
array
effort.
That is to say,
may
tax
I think that you will not be
any
good Communist doctrine
end, may by now have come to
itself.
distrust of controls in his
and because her controlled economy is now in
conceivable, of
which
more
•<
decline in gold value of dollar, Dr. Palyi
points out it affords: a profitable arbitrage transaction
through general monetary and fiscal devices, and higher
self-restraint by labor. Concludes Britain is now re¬
luctant to apply overall controls in view of past failures
at first set forth in
means
be
is
Commenting
greater realization of administrative difficulties, more con*
fidence in ability to eliminate bask
inflationary influences
that what they term communism has
into something not very much more than
become rulers of the earth.
as
It
Organization,
country than exists here, which he ascribes to
try to read the minds
which direct the Kremlin.
Economic
a
distinct, and that the techniques of combat are
wholly different, the two conflicts are at many
points inter-related.
It would be fruitless to
of
Oxford University, England.
Nor may we
fail to realize that while the two battlefields
j
.,
Professor
Sinking Dollar
By MELCHIOE PALYI
f
appraising the conflicting current
views about policy if we
constantly keep in mind
the fact that while we
carry on the age-old strug¬
gle against Russian imperialism, we are at the
same time
battling a sort of intellectual virus in¬
fection both at home
The
By JOHN JEWKES*
better basis for
Copy
■
-
S
;
a
Tele. NY 1-315
64 Wall
Street, New York 5
BOSTON
Troy
THE NATIONAL CITY BANK
1,16
PHILADELPHIA
Albany
Buffalo
Harrisburg
Providence
OF NEW YORK
Scranton
Wilkes-Barre
Williamsport
Washington, D. C.
Allentown
Canadian Bank
4@ommem
(
Bond
Department
THE CHASE
NATIONAL BANK
Head Office: Toronto
Bond
Dept. Teletype: NY 1-708
New York
Seattle
Agency: 20 Exchange PI,
OF
THE
CITY OF
NEW YORK
Portland, Ore. San Francisco Los Angeles
We maintain active markets in
Dominion
CANADIAN
Bulolo Gold Dredging
Underwriters and
Central Vermont
BONDS & STOCKS
of Canada
Internal Bonds
Public Service Co.
Placer Development
Distributors of Municipal
Brown
and
COMMON
Company
»
(all Issues)
Prospectus from authorized dealers
Corporate Securities
VANCE, SANDERS & CO.
OTIS & CO.
Ill Devonshire Street
■i
t
(Incorporated)
Goodbody&Co.
"
Established
BOSTON
New York
Angeles
'
ESTABLISHED^891
1899
,
,
Doxcfiox Securities
Grporatioti
upon
request
IRA HAUPT & CO.
Members New York Stoch Exchange
and
MEMBERS NEW YORK STOCK EXCH.
CLEVELAND
Chicago
Los
Analysis
CANADIAN DEPARTMENT
or
40 Exchange Place,
New York
Chicago
Denver
Dallas
Cincinnati
Columbus
Toledo
Buffalo
115 BROADWAY
NEW YORK
New York 5, N.Y.
105 W. ADAMS ST.
CHICAGO
other Principal
111
WOrth 4-6000
Teletype NY 1-702-3
WHitehall 4-8161
Boston
Exchanges
>
Broadwayy^N. Y. 6
Teletype NY 1-2708
Telephone: Enterprise 1820
!
The Commercial and Financial Chronicle
,V
O'
•„
!0v2
*(1530) * ^
•
The
MARKETS IN
TRADING
Interstate Power
A continuous forum in
/52
Central Public Utility
Interstate Power 6%
Deb,
1920
Established
120 Broadway, New
York 5
Teletype NY 1-583
BArclay 7-5660
they to be regarded,
are
Corporation
Specialists in
Rights & Scrip
as an
York
York
Exchange
Exchange
Stock
New
Curb
BROADWAY, NEW YORK 5
2-7815
Tel. REctor
be
around
with
Commonwealth Natural Gas
Dan River Mills
Life Insurance Co. of Va.
4%
Gerald S. Colby
Lynchburg, Va.
LD
39
TWX LY 77
<
of agricultural equip¬
ment
to
farmers, with 86% of
sales through 1,800 plus dealers
in
the
United States.
The 200
Canadian dealers account for 7%
with the balance going
to foreign countries.
;
Products of Minneapolis-Moline
of output,
wide
a
executed.
Trading market maintained
Analysis available
on
request
1006 SECOND
AVENUE
SEATTLE
Teletype SE
ELiot 3040
the
and South¬
Avery manufac¬
South,
states.
tures, at its Louisville plant, two
sizes
of
farm
tractors
farm
its
implements.
In
line
a
attached
addition
to
sales outlets in the south,
own
company
products are sold" by
are prominently dis¬
in
Montgomery
Ward
played
Catalogues. Certainly the farmer
the No. 1 prime eco¬
represents
in the United States,
and his politically powerful Farm
Bloc will maintain that position.
His bank balance and credit posi¬
from Tarm
his income
prices pro¬
and
added to by
excellent,
are
by
law,
He
the
feels
subsidy.
hidden
both evident and
climbing
cost
of
eats at
of trans¬
portation, while the rest of US
depend upon his products, but at
retail prices.
living
review of
little,
but
as
he
wholesale prices less cost
Standard
No
other
the
'gets
group
tax
break
given the farmer, no other
business
group
is guaranteed a
second choice market, or extended
Oil
Company
low
guaranteed
cost credit with
unbalanced in¬
to
on
Request
w.e. burnet & co.
he
In
must.
view
of the
current
blue
print for defense mobiliza¬
tion, it is going to be very difficult
to keep help down on the farm in
competition with rising factory
payrolls and wages at a time when
to earnings
ratio of 7 times aver¬
age
and
4.4
times
$6.38,
of
earnings
five-year
average
five-year net,
flecting the
2nd
re¬
NEW
YORK
5,
N. Y.
increase
is
in
ment
BRANCH OFFICE:
131
E. 86TH ST.
NEW YORK 28, N.Y.
sales,
same
month
With
the
is
recognized
by
by the 15%
indicated
January farm equip¬
as compared
to the
a
year ago.
outlook
for
,
the
fense plans promising an
afthe
the
for
ap¬
through
such
arid
chases, while the second preferred
Morgans,
.
small
of-
A
common.
I
National Research Corp.5
Mexican Lt. & Pr. Co.
Sprague Electric Co.
Rocke¬
assuming the Mirineapoiis-Moline-
shares
l%rd
into
conversion
through
-4-|»
complete
profits
attention
Avery merger had taken place last
without
the
to
too
character
-
Boston Wharf Co.
Keyes Fibre Co.
In
reduced
being
N. Y. Telephone WOrth 4-5000 ^
^
du-
conversion of the second preferred
automatically
Teletype BS 259
:
willing to
contributing to these columns
in early January 1950, I outlined
a
number of prominent methods
of stock market operation as fol¬
low: (1) floor trading and quick
speculative, turnover largely for
is
:
opportunity.
financiers—the
Sloans,
148 State St., Boston 9, Mass.
Tel. CA. 7-0425
in
fellers, and a host of other able
and
aggressive leaders.
This is
democracy at its best.
pur¬
company
alike,
Ponts,
$5.50 preferred is gradually being
reduced
talists,
trialists
the
However,
common.
No country
savings from his weekly
or monthly income can become a
partner with
our
chief indus¬
preferred issues will continue
-
Bought—Sold—Quoted
*
Ralph F. Carr & Co., Inc.
31 Milk
Street, Boston 9
>
Tel. HUbbard 2-6442 Teletype BS 328
much
the
of
issue dealt
year
in; (2) purchasing of
special situations arising out of
reorganizations and windfall
would have reduced common
shares
earnings to approximately
$5.93,
figure
a
that
reflects
the
1950 showing of Avery. Had
poor
the merger
taken place two years
earlier the
difference
share
after
net
varied
in
changes; (3) selection of'issues on
the basis of piomised wide longterm expansion in sales, earnings,
leaned
would have
per
share.
Minneapolis-Moline has had its
difficulties in the past.
benefit
of
a
It does not
increase
in
the
long-term
current
the President of the
to
ima
that
was
a
later
quarterly
30c to
the
rate
"tight" with
indicated
was
from
40c.
Irrespective of Mr. MacFarlane's
vided
by
opinion
earnings,
that
it
dividends
are
to
pared
the
ratio
industry
paid
as
by.
ex-|
com¬
average
will force market valuation of the
shares
substantially higher.
com¬
am
at today's
inclined
less
Utility SVzs
American Marietta
Henry B. Warner &Co., Inc.
Members
Phila.-Balto.
Stock Exchange
123 South Broad St.,
KIngsley 5-2700
New
York City
Direct
wire
Phila. 9, Pa.
Bell System Teletype
PH 771
i
Phila. Telephone
Tel.: BOwling Green 9-4818
to
Ames
Emerich,
Chicago
against other
situations that
as
growth
available.
Celanese
Corporation, for
This company is in the
I fastest-growing end—acetate—of a
fast-growing industry, that of syn¬
share, and the low.
earnings
to
59—1
purchase
Take
my
Minneapolis-Moline in '51,will
ceed $1.60 per
investment
Corning Glass
example.
thetic
fibers.
duction
Year by
year
pro¬
of the industry has
been
pro-;
is
Central Public
by
having, out¬
as
diversified
was
of
dynamic
regular
upped
its
to
dividend payments. A:-very short
time
time
Gas Common
Central Electric & Gas
and
chosen
issue
future of this issue, but
that his
MacFarlane," inferring
Scot would be
a
come
then selling at around 30. I
have in no yvay changed my views
as
to
the
attractive - long-range
market
name
South Jersey
I
"growth"
or
mon,
in
question regarding
a
sion
portfolio
rate,
company,
that
Penna. Power & Light Common
but growth goes
go
The
that
at
stating-
third
Bear markets
markets
forever.
me
by
the
then qualified
Pennsylvania Railroad
Philadelphia Electric Common
standing growth prospects and
subject to consideration for inclu¬
dividend record. Just prior to the
last
to
approach.
bull
only 9c
the
selection
my
on
have
asset values. I
and
common
complete conver¬
sion of the preferred
price
uninter¬
choice
set aside
farm
equipment industry excellent in
1951, and its important role in de¬
of
Any American who is
and $1.50 convertible
leverage
on
an
the past history of the world, or
in the world today, has offered to
the small or to the large capi¬
Avery merger, con¬
provide
*
Request
selection
American investor.
million, and 185,205 shares of the
'iirsf,
*'•
Analyses
criticism
forded
ceptional dividend coverage
requirement
Collins
j.
Charles
sisting of long-term debt of $7.6
$5.50
*
This' is
'
Minneapolis-Moline,
Air Products
1 i-
p
a
ings in '50. The current capitaliza¬
of
Sanitary Products
the breadth of
dition is through the use
farmers
u
illustration
New York Curb Exchange
of labor-
d
of
and but 2xk times per share earn¬
tion
(Com. & Pfd.)
ana¬
but, rather,
$20 is available at only
times
3.4
by
not
share of $10.24. Minneapolis-
per
Moline at
the
cated.
net
1950
average
Maine Central R. R.
the
that
dom
ancestry, and in view of the ex-;
11 Wall Street
Best"
been
various
planted acreage is expanding. The
one means of offsetting this con¬
saving farm machinery. That this
Rudolph Wurlitzer
U. S. Thermo Control
lysts have sel¬
Hew Tor^ Stack Exchange
MEMBERS
Verney Corp.
Simplex Paper
the
which at the current
dividend raise, answered
with the ability
buy, and buy farm equipment
branch offices
our
Inquiries Invited
Security
fact
price sell for $45, a price
average
ventory. Certainly the farmer is a
customer
ny 1-1557
Mobile, Ala.
Direct wires to
under
Like
I
St., New York 4, N. Y.
HAnover 2-0700
New Orleans, La. - Birmingham, Ala.
heading
lected
answer
prime
Copies
Exchange
Curb
se¬
which to carry an
(NEW JERSEY)
the
companies
and
soaring
a
and
and
tractor-drawn
tected
prepared
Exchange
York
the
has
standing
tion
We have
York Stock
Members New
con¬
over
icle"
compares
that
nomic group
105
Members New
25 Broad
past year or two by the "Chron¬
proximately 883,845 shares of out¬
others,
John R. Lewis, Inc.
yield
products of the subject company,
of
LEAD-ZINC-GOLD-TUNGSTEN
current
to
of
weekly
presented
"The
exchange of stock
basis, provides a new territory to
an
on
eastern
Wells in
Texas
^ y
;
-
acquisition of B. F.
recent
Avery,
18 Producing Oil
Ector County,
of farm ma¬
range
chinery, net sales of which have
tripled since 1941; Its labor rela¬
tions are excellent, public ^rela¬
tions and advertising well planned,
and
been
share, triple
working capi¬
indus¬
of
5 %'
sales
try
The
Placer Development,
Limited
Minne¬
for be¬
accounts
and
in
interesting feature
and Oliver)
'
apolis-Moline
cover
STRADER,TAYLOR & CO., (nc!
Steiner, Rouse & Co!
nection with the articles that have
the
value is
book
per
An
favorably with the average
of four leading companies in the
business (Case, Deere, Harvester,
capital appreciation.
tween
Camp Manufacturing
Bought—Sold—Quoted
Co., Boston, Mass. (Page 2)
very
objec¬
an
with
business
current
$35.00
The
semi-invest¬
ment accounts
both income,
Bassett Furniture Industries
&
tal above $17.00.
rvised
sup e
in
that
that of '46, and net
for
1951
for
the
tained
result
Best"
Like
I
and
American Furniture
Gerald S.
—
Colby, Analyst, duPont, Homsey
($26.00)
exceeding -the
present
price of the stock has been re¬
at$19-$20
tive calling for
Trading Interest In
Moline
-
,
Members
New
nor
offer to sell the securities discussed.)
qualified as
"The Security
120
Alabama &
and
Selections
Louisiana Securities
Minneapolis
intended to he,
not
are
Their
rupted flow of materials, the pros¬ Celanese Corporation—Charles J.
pects for Minneapolis-Moline com¬
Collins, Chairman, Investment
Analyst, du Pont, Homsey & Company,
mon are doubly interesting. At $20
Counsel, Inc., President, Invest¬
Boston, Mass.
the shares provide an 8% yield
ment Letters, Inc., Detroit, Mich.
from the indicated $1.60. annual
Minneapolis-Moline
(Page 2)
rate which, based on the $8.03 per
Unlike
my
selection of "The
share reported for last year, was
Security I -Like Best" of last year,
covered 5 times. Earnings for the
which was an all time, any time
first '51 quarter at 55c per share
choice for any type of account,
CHARLES J. COLLINS
(do not reflect Avery acquisition)
speculativ e
compare with a loss of 70c in the
Chairman, Investment Counsel, Inc.
or investment,
same period of last year. Of earn¬
President, Investment Letters, Inc.
my current
Detroit 26, Michigan
ings
over
a
five-year
period
selection of
totalling $28.50 per share for an
MinneapolisCelanese Corporation
average
of
$5.74,
an
amount
Moline
com¬
must
ffipONNELL&rO.
a
Week's
Participants
Thursday, April 12, 1951
.
GERALD S. COLBY
mon
Since 1917
which, each week,
(The articles contained in this forum
Esc. Ctfs.
Hanseatic
This
Forum
different group of experts
in the investment and advisory field from all sections of the country
participate and give their reasons for favoring a particular security.
Southern Production Co.
New York
Security I Like Best
Co.
..
moving
Between
fiber
upward.
1920
To
1949
and
.consumption
illustrate:
textile
(natural
and
synthetic) in the country increased
68%.
But rayon, which accounted
for 0.3%
of the total at the begin¬
ning, had moved up to 18.2%
at
Continued
30
on
page
N. Q. B.
OVER-THE-COUNTER
INDUSTRIAL STOCK INDEX;
12-Year Performance of
35 Industrial Stocks
BOOKLET
ON
REQUEST
''
:
\r
National Quotation Bureau
Incorporated
46 Front Street
New York 4, N. Y.
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
(1531)
INDEX
The Labor Bite
Author
Make
to
B. S.
Articles and News
By IRA U. COBLEIGH
"How
of
Page
The Rats Leave the Sinking Dollar—Melchior
Palyi__
unusual slant
an
thought to the toll of toil
'*—John
stock selection by giving
the sales dollar in selected
on
on
industries.
Jewkes
-
*
----
I
*
\
v
«
hot dog, and digit-dotted statistics. I'm
television, and the national debt, just going to jot down for you be¬
unionism
labor
Uife.
Given
become
has
American
the
in
fixture
the
with
low
a
^
4
'
Cobieigh
"
.
,
w
•»
Little
a<
in the
arm
x n e
W
by
Our Present Economic Policy Is
:
—Aaron Director
1
the
labor
f °*c.e*
i.a
_,.
u.
.
.
,
traditionally cordial, gracious and
folksy invitations to join all over
the
country, by persistent and
perennial requests for more
.dough, and surrey-type annual
contracts—"with a fringe on the
union movement has
pervasive, and highly vis-
top"—the
had
a
ible, effect on the price of labor
not only in steel, coal, motors and
but in
fields
textiles,
vergent
widely
such
di-
bull-dozing,
as
baby-sitting and mink matching!
annual
The
since
of
round
World
creases
in-
wage
has*
II
War
you know,
been largely met
by upping the price of goods and
as
services.
If you
doubt this, then
moment of silence
together, mourning the untimely
passing of the nickel beer, 'phone
call and subway fare; the $1,000
motor car and
the $10 hospital
let's
spend
a
Labor and
room.
price have been
climbing up a very high hill,
arm-in-arm, and might have confinued so indefinitely, but for the
outbreak
Korean
later, the arrival
the
Potomac
somewhat
and,
the banks of
on
Johnson
Messrs.
of
DiSalle.
and
These
gentlemen
dedicated to keeping down the
altitude
labor
of
and
price.
They've made a little progress in
price stability, but nobody yet can
honestly claim to have stabilized
John
L
Lewis
and
in
brethren
labor
the
kinetic
his
nrirY
risls
cnnrk-
nf
that
need not advance the
that
hiVhPr sharp
a
price of goods, that a higher s
labor
could
Railroads (Class I)
ar
be
laboratory
theOTy>
But
freeze
ought
ought
jwhat
seriouslv
seriously
extent
could
costs
thaw
or
c
investors
Consider
consider
to
to
augcs
to
down
to
to
in
the
disturb
earnings
UP°n
of
flow
common
ful
bite out of
the
everv
bite
in
sales dollar
manvcasesIs
uJfinJhfjLraii .+hlf time.
getting bigger all the
i
Now I don t propose to
sandbag
Protest
Government
Tin
Import. Monopoly..'.
8
18
26
SEC
Stock
Market Index.......^
Praises Unpegging of Government Securities^...
Incorporated
Debentures
61
See
We
Bank
and
It
(Editorial)
Insurance
Business Man's
Stocks
37
26
Associated
Coming Event®-in the Investment
Field^;__^____i_^____j__l
Did
Mutual
And there were t!housands
NSTA
mor® p.ers<^Q9QlnY^n f,Lav-nnH
™ent in 1929 than today, ;and
^ere was far lower operating ei
llcie"chy-n° cd^
J" *; s'
,
granted by j^e Interstate
a
merce >; Commission,
year
while
designed
to
year
'
.
actuaflv
,
^1^3
tonnage
romD(?titors
fh
*
eroUDS
se^
rahroads
historically
Comafter
Public
fy./-),-.-.
5
Offerings
Securities
Railroad
"nd
Salesman's
af-
Securities
Now
adversely
.
31
—
Corner
Audio Devices, Inc.
22
(Manufacturers audiodiscs,
in Registration
42
Magnetic Recording Tape)
The
Security I Like
The
fv.p hareainina table
State
Best
2
of Trade and Industry
points to
v
;
Analysis
5
____
45%
1950. The
in
Request
on
.
Exchange
Washington and You
'••••
•'
'
on page
1.•
Hubbard
.
.
.
..
Published
..
Twice
1
Weekly
COMMERCIAL
CHRONICLE
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Air Products
Company
Reentered
second-class
as
matter Febru¬
Baker-Raulang
25,' 1942, at the post office at New
York, N. Y., under the Act of March 8.
1879.
" '
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'
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bite
Every
4
31
,—
(Walter Whyte Says)
Tomorrow's Markets
,
,
•
Who?
different story in the
Continued
r
Now—Guess
and
Then
a
telePhone booth! The Bel1 system
ratio Was 49 % in 1949' and ac"
2-4300
39
bacon from the bargaining table
Spencer Trask & Co.
-
Exchange PL, N. Y. 5
45
^
—
:
Securities
WILLIAM
Chicago
40
30
.
Securities
Utility
HERBERT D. SEIBERT, Editor &
-
HA-2-0270
47
in this series
0f Ringing home the
recorcj
i_apnn
May
Governments
Security
Prospective
in
railroad
unionism boasting a pretty consis^en^.
Wilfred
Singer, Bean
& MACKIE, Inc.
28
Teletype NY 1-1825 & NY 1-1826
a dynamlc unionism, a
fected
47
I
Report__l___
Reporter's
Industries
1 24
;
J
Notes
Our Reporter on
offset
statistically
most
Our
lower-priced
to
over
u
of
1
Observations—A.
Oil Co.
Great American
40
Funds
Franco-Wyoming
*
Business Activity
*
Copper & Steel Co.,
29
„
reSulted
slice
fat
of
Corp.
Mfg. Co.
Continental
33
__j._________.____
News About Banks and Bankers__
increa^
^
Guess?......
Indications
preferred stocks
Albany
Bates
.
'
pr^thnnsan J*
r,lnfQ0DQer9ei^Lr<a
You
From Washington Ahead of the News—Carlisle Bargeron____-
25
HAnover
Dev. Res.
8
Einzig—"Is Britain in Inflation Atmosphere?"
High Grade Public Utility and Industrial
25 Broad Street, New York
39
Dealer-Broker Investment Recommendations.
^
In some cases, c ear y
yes- Railroads for
In 1929-
*
Philadelphia and Los Angeles
33
Bookshelf
Canadian Securities
•
Stock
^.Cover
i
i
6
1-3370
Direct Wires
investment
satisfactory
a ■ less^
climate.
Teletype NY
Regular Features
As
interested in offerings of
York
Broadway, New York
BO 9-5133
land,
New
Reilly&Co.
35
The
Members
J.F.
31
FIC Banks Place
costly iban it looks,
Now exactly what kernels of
speculative wisdom can we g ean
fr0™ a11 tbis. Can we; ^9^-^at
higher ratios of labor, cost creat
,
'*
Pathe Industries
20
more
H
are
18
The
I don't think this particular list
of ratios has ever before been
presented. It's culled from 1949
results and fractions have been
omitted for your reading enjoyment. It's a revealing tabulation
and you'll be surprised -by some
9^
ratios. At least I was. Bear
in mind also that these are cash
outlays for salary and wage. They
don't include payments into pengi°9 or wel*are ^unfsj social security, or various debits for cornpensation, disability or unemployoient insurance. These latter items
rnight increase some industry costs
by another 5%.\ So the table is
basically understated. Labor is
you with a lot of gruesome charts,
We
Lear Inc.
Joseph_-__L_l_;_l.___ii__i^___
Immediate Export Outlook Is Good!—August
Maffry
tually went down four percentage
'
Should Protect Th^ir American Investments
—Franz Martin
7
^pn^inie^nnphfn^' " W^hear
—and
How Foreigners
Hytron Radio and TV
14
Lists Reducible Items of Federal Expenditures
c nf
realistic
Haile Mines
13
_j.
Price Control Is Justified—Michael V. DiSalle
49
Tobacco
have
T
lllllillll-ZII
Telephone
J.
some
Belle Isle
35
steel
painlessly extraded
from
corporate
profits.
?Well if prices get
and labor does not, we may yet
reallj^frozen,
12
Treasury Security Market—
—Aubrey G. Lanston
32
.
10
4
A New Chapter in
49
n,,hhpr Tirp<?
Taylor
WHitehall 4-6551
.
11
30.
fraternity!
Union dogma has ever argued
wage
net
.,
What About Our Loss of Russian Manganese?—L. M. Herman.
16
r^I EqulpmenYIIIIIIZI."
Cobieigh
K.
Dept.
STREET, NEW YORK
9
:
What About Stock Prices?—James F.
Hughes_
and Wages
Qil3^
'
about
—
WALL
99
Securities
7
Life Insurance Investments—Victor B. Gerard
t*"
'
Today's Stock Market From a Technical Viewpoint
—Owen
to
Destructive Patchwork
a
.
souls
dividends,
6
Telephone:
Golng to Salaries
^Indu^stry 7
no
thing !
5
cents out of
dgnei
or
•
Act
are
"All-Stars" Conference—A. Wilfred May
dividends
small quotes or no quotes—it makes
no
difference to us.
We'll buy any¬
Obsolete
net sales or gross revenues.
powerful shot
4
Inflation and Banking—A. L. M. Wiggins
against them, list their salary and
wage totals, as a percentage of
of
way
an
LITTLE DIVIDENDS
3
11
'
-»
•
Conclusions From
number of industries, and,
a
FATHER'S
Cover
:
!
The Labor Bite—Ira U.
The Integrity of the Dollar—Sumner H. Slichter.
Together
LiCHTEnsTtin
AND COMPANY
Cover
Killing in Wall Street and Keep It",
a
Britain's Experience With Controls—Warning to U. S.
Presenting
3
Record — Monthly,
(Foreign postage extra.)
account
of
the
fluctuations
exchange, remittances for
in
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eign subscriptions and advertisements must
be made in New York funds.
THEODORE YOUNG & CO.
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WHitehall 4-2250
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4
The Commercial and Financial Chronicle
(1532)
the
and
The
Integrity of the Dollar
By SUMNER II. SLICHTER*
,
the
government
least
the
during
analyzes various aspects of current inflation, to¬
gether with effectiveness of moves to check government expen¬
ditures, consumer buying, and business capital expansion. Sees
tendencies for government to become committed to policies
and practices that tend ultimately to undermine dollar's pur¬
chasing power. Looks for a future "creeping" rise in prices,
and contends that this situation has advantages as well as
disadvantages, so that prospect should not be vie wed with alarm.
the
into
two
will
be
the
from
main
from
and
divided
four
The
the
half
last
than $20 billion
as an
briefly
some
than
three
-
outlays
larger
the
business
of
end
of
5%
about
1949 and
between
the
of 1950,
the end
will not increase at all. In fact, it
con¬
More than half of the rise
government to
cerns.
become
spending was caused
shift from the reduction ox
inventories at the annual rate of
in
the
run
to
of
long
dollar,
the
I
an
increase
in inven¬
during the last quarter of
Less
growth
the
wish
than
in
last
of the
one-tenth
expenditures between
1949 and the
quarter of
last quarter of 1950 represented
analyze
a
rise in government spending.
briefly the
Inflation has been financed, up to
probable consequences of these
now, mainly by a rapid rise in the
policies.
turnover of money but partly by
n
a
large increase in short-term
The inflationary movement in
Prof. S. H. Slichter
,
1950.
power
of
to
the
United
cent
different
to
bank
States
months
during
re¬
had markedly
has
decrease.
may
Business expendi*-
tures, of course, will continue to
be important,
but shortages of
phases.
the
loans
to
business
concerns,
and
by substantial sales of gov¬
ernment securities to Federal Re¬
v
The most effective way in
which
the government can
limit the in¬
flationary
effects
of
business
spending is by restricting the use
of bank credit by business con¬
cerns. This is the aspect of con¬
trolling inflation that encounters
least
opposition from
pressure
groups
outside the government.
But opposition within the govern¬
ment has prevented effective con¬
trol of bank credit. It is not
say
neces-
that I discuss this well-worn
At
economy
ahead, the most important sources
"An address by Dr. Slichter before the
Spring meeting of the Academy of Polit¬
ical Science, New York City,
April 11,
J951.
inflation
of
will
the
be
defense
there is also a good chance that it
will not. At best, the program is
gamble, and the willingness of
the government to rely upon it
a
outlays of the Federal government
*
1 The turnover of demand
side New
rate
of
York increased
18.9
in
January,
deposits out¬
from
annual
an
1950, to 22.0 in
1951, and through the second
half of 1950 averaged 22.2 in comparison
January,
How to
Recognize the Major Trend
—of Stock Prices Under
Today's Uncertain Conditions
THE PRIMARY TREND
INDEXES—are
this organization which
believe represents
important
Based
on
we
contributions
logical
a
new
to
market
concept,
trend
they
are
development of
a
one
analysis
of the
most
made.
ever
completely factual and
mechanically derived.
COMPUTED
show
the
York Stock
trends.
The
soon
it
as
uptrends
EACH
percentage
the
Primary
Trend
on
underlying market trend is revealed
develops. At important
decrease
18.6
in
the
The
loans
of
all
creased
might
tops
before
half
second
commercial
of
outlays (which they are
not), these expenditures might be
cut by $5 billion a year. Such a
cut would be most helpful, but it
would not prevent a net rise of
about $20 billion a year in the out¬
lays of the Federal, state, and
local governments.
Since
in
cuts
spending
non-defense
offset only
can
ket.
et
market
averages
in¬
Hence, even a balanced budg¬
be inflationary.
Recently, several organizations
proposed that the Federal
have
be
balanced
in
large
by
increases
in
the
budget
measure
income
corporate
various forms
of
comes
may
in
sary
be
tax
sales
recent
important
turning points in the market,
we will be pleased to have you
special introductory $5.00 trial subscription to the com¬
plete Investors Research Service.
accept a
on
and
taxes.
Hospital
Supply
induce
to
neces¬
some
groups in the community to sub¬
mit to controls, but such an in¬
would be inflationary. Even
price controls prevent an ad¬
vance in the corporate income tax
from being passed on, the advance
crease
if
would
finance
encourage corporations to
their
expenditures
on
Common
that
the
at
as
strike
of
end
you
1950.
This
may
pretty optimistic,
partly upon
as
and it is. It is based
the belief, that
the rate
of "gross
Prospectus Available
lation of inventories is eliminated.
My estimate of the supply of con¬
goods
sumer
also
crises this
new
that
assumes
will not
summer
require acceleration Of production
somewhat daring assumption.
Possibly a small increase in the
—a
total
supply of consumer goods
achieved, but this seems
to be unlikely. Hence, the
problem of the gap between per¬
sonal incomes and the supply of
consumer goods must be attacked
either by limiting the increase in
personal incomes or by limiting
the
proportion of personal in¬
comes that is spent for consumer
goods.
to
be
me
How
the
can
rise
in
personal
by offering stockholders attrac¬
tive opportunities to reinvest their
which
may be deflationary in a buyers'
market, have mixed inflationary
and
deflationary effects
in
a
sellers'
market.
higher prices,
creases
do
They
produce
the price in¬
raise private in¬
but
not
comes.
To
the
extent
that
it
is
not
politically possible to finance de¬
expenditures by anti-infla¬
tionary taxation, such as increases
fense
in
the personal income tax, they
should be financed by anti-infla¬
tionary borrowing—that is, by the
sale of government securities to
individuals. Indeed, the sale of
government
securities
to
indi¬
limit consumption
people on whom
not willing to levy
many
much of
is
an
dends
in
stock
instead
of
cash,
or
dividends
in
dividends
the
business.
represent only
But
small
a
part of all personal incomes—less
than 5%. About two-thirds of per¬
sonal incomes consist of wage and
salary payments. These payments
increased by an annual rate of
over $22 billion during
1950 and
they will continue to rise rapidly
during 1951. Can anything be done
to
limit their growth?
A con¬
siderable expansion in
payrolls
will
result
from
employment
work
week.
and
the
increase
from
These
a
are
and,
ployment would rise by about 2.2
Continued
on
page
VALUES SELECTED FROM
THE UNLISTED MARKET
WilliamA. Full er & Co.
Members of
Midwest Stock Exchange
309 S. La Salle Street, Chicago 1
The
March
Bulletin
issue
of
discusses the
our
Over-the-Counter
possibilities for eight
Tele CG 146-7
common
stocks represent¬
the electronic, machine tool,
fire
and
insurance
public utility industries.
MIDWEST STOCK EXCHANGE
3.
Weekly Analysis Reports for the
individual
a
upon
complete technical analysis
groups and the General
>
Explanatory
Booklet,
Stix & Co.
available
I. ARTHUR WARNER & CO.
"Planning for
Incorporated
Profits in the Stock Market.*'
509 OLIVE
INVESTORS research company
Santa
Barbara, California
,L
Investment Securities
STREET
*k'lk
/'ViinoM
are
request
stocks, 43
Market.
Published
Copies of this bulletin
next 6 weeks—sent air¬
*
k
"
v
«, (
»
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120 broadway; new york 5, n. y.
St. Louis l.Mo,
Telephone WOrth 4-2300
BOSTON
of
longer
badly
in estimating the
prospective supply of consumer
goods, I have assumed that em¬
needed,
income tax. In short,
for years 1948,1949,1950knd 1951.
These reports show
the
goods available for per¬
sonal consumption ought to
be
about as large at the end of 1951
MEMBERS
Basic Strength Graphs
Wr»DePt. ce,
said
have
I
of
ment securities. Sales taxes,
8
Stock
of the Primary Trend Indexes from
2.
Newly
inflation.
flow
ing values in
1943 to date.
4.
goods represents the most
of the problem of
sumer
difficult aspect
incomes be limited? Corporations
can
help by deferring dividend
increases, by paying part of divi¬
selected, unlisted
443
tendency for personal in¬
supply of con¬
to outrun the
plant and equipment by inflation¬
ary methods, such as borrowing
from banks, paying off bank loans
more
slowly, or selling govern¬
Corporation
YOU WILL RECEIVE-—
of
by
An
corporate in¬
politically
order
Congress
American
Tel. DEarborn 2-5600
mail.
The
comes
can
increase in taxes
among
TRADING MARKET
turn
WOULD LIKE TO SEE what these Indexes show
Three-color Graphs
tionary borrowing.
a
may
1949.
banks
$44.8 billion on June 30,
1950, to $52.9 billion on Jan. 31, 1951.
The rise in the commercial, industrial,
and agricultural loans of weekly report¬
ing member banks was from $17.8 billion
on
Dec. 27, 1950, and $18.1 billion on
Jan. 31, 1951 to $19.2 billion on March
21, 1951. Holdings of U. S. Government
securities by the Federal Reserve Banks
increased from $17.7 billion on June 21,
1951
to
$20.3 billion on Dec. 27, 1950
and $21.9 billion on Feb. 28, 1951-
the number of stocks in
the
NOW and to examine their behavior BEFORE
1.
infla¬
be
defense
from
as
down—At important bottoms the number of stocks in uptrends
tends to increase before the market averages turn up.
IF YOU
with
Indexes,
the New
Exchange in uptrends and the percentage in down¬
tends to
lays
viduals would
WEEK,
of the leading stocks listed
ACTUAL
methods be
small private investment can be reduced
from an annual rate of $60.2 bil¬
part of the rise in defense ex¬
lion in the last quarter of 1950 to
main to a discussion- of what can penditures, limiting the inflation¬
about $49 billion (in terms of 1950
be done to limit the inflationary ary effect of defense outlays is
dollars) in the last quarter of
effect of government expenditures mainly a matter of assuring that
1951. This large cut in the rate of
and consumer buying, but I wish they are financed by non-infla¬
investment can be accomplished
to say a few words on the. problem tionary methods. To many people
this simply means paying as we without reducing the rate of ex¬
of limiting business spending.
of physical plant and
go. But some taxes are inflation¬ pansion
III
ary, especially in a sellers' mar¬ equipment provided the accumu¬
My comments on the problem of
inflation will be devoted in the
the present
serve
Banks.1
It
has
not
been subject. I wish to point out, how¬
is making a
financed thus far by a deficit in ever, that the only reliable way
transition from one phase of in¬
the Federal budget, and govern¬ to limit the expansion of bank
flation to another—from a phase
ment borrowing from banks. In credit is to make bank reserves
in which the increase in buying
fact, inflation has occurred in the scarce. There is a chance that the
came
principally from business
face
of a
cash surplus in the present program of voluntary re¬
concerns to a phase in which the
straint in lending by the banks
Federal budget.
'
increase in demand will come in
In
the
months
immediately 'will be tolerably successful, "but
time,
these
tionary taxes or inflationary bor¬
rowing, or whether they be antiinflationary taxes or anti-infla¬
;
billion
mine the pur¬
and
1949
tories at the annual rate of $11.2
under¬
chasing
a
$5.7 billion during the last quarter
tices that tend
in
business
by
com¬
mitted to poli¬
cies and prac¬
be done to offset the
offset by cuts in
non-defense spending. If the Ad¬
ministration and Congress were
eager to find ways of cutting non-
creased
of 1950, more
fifths represented
not government spend¬
extent the increase in defense out¬
goods available for
consumption, however, which in¬
and the last quarter
tenden-
for
can
The supply of
materials, inventory controls, and
equipment but especially for in¬ possibly restrictions on credit will
o f
inflation. ventories. Of the $47 billion rise prevent business spending from
in the annual rate of expenditures growing as rapidly as during the
Next, I wish
last quarter of 1950.
to
discuss between the last quarter of 1949
cies
What
above the rate at the end of 1950.
last
or
is
whether
IV
inflationary effect of expanding
annual rate defense expenditures-? To a limited
year
aspects of the immedate problem
recent
ing
1951.
of
in business buying,
wish to comment briefly on some
whether
ernment is still
willing to gamble
Thursday, April 12, 1951
.
creates the suspicion that the gov¬
rapidly, and by the end of
will be running more
grow
the
quarter of 1950 saw a rapid rise
partly for new
principal parts. First, i
1950
of
of
outlays
Personal incomes will continue to
government
consumers.
end
1951—-over
Dr. Slichter
My, remarks
$25 billion
„
University Professor, Harvard University
Lamont
.
inflationary depends, not
will rise by at with the future value of the dol¬ on whether the budget is bal¬
lar. Can the government be sur¬ anced, but on whether expendi¬
a year between
and the end oi prised if its securities fail to com¬ tures are financed by inflationary
mand proper respect?
or anti-inflationary tax methods—
times
the
rise
defense
The
indi¬
of
expenditures
viduals.
.
PHILADELPHIA
36
.Volume 173
Number 5002
.
.
,
The Commercial and. Financial Chronicle
•
ward.
f
Steel
The
Conclusions From
Production
Electric Output
u
Carloadings
Retail
State of Trade
Trade
Price
Auto
Industry
By A. WILFRED MAY
Index
Observer cites the points of conflict in leaders' proposals for
industrial
the country at large gave
evidence of a very slight contraction the past week, but in keeping
with the current trend aggregate output was noticeably higher
.
production
for
than the level for the similar week
a
year ago.
The employment picture continued to reflect a slight advance
in
the
latest
reporting week ended March 17 in initial claims
insurance, while continued claims for that
period declined more than enough to make up for it.
for
unemployment
WHITE
VIRGINIA,
of
nomics
It
reported
was
SULPHUR
SPRINGS,
April 8—This
three-day conference on "the Eco¬
WEST
Mobilization," partici¬
pated in by an
Tuesday of the current week, however,
is laying off "several thou¬
on
that the New York Central Railroad
sand" of its
made
110,000 employees in 11 eastern states.
according to the road, by
freight carried.
"we
are
unusual
was
ber
a
An official
in the week ended March 3.
cars
This step
sharp falling off in
Loadings dropped to 89,000 last week from 98,000
necessary,
of the
road
star"
of
combined declined to
total, the lowest in two months, was, nevertheless, higher
than the 127,653 units turned out in the like week of 1950, when
assemblies were held down by the Chrysler strike.
Pressure of defense demand
approximately 45%
the steel mills mounts steadily
on
of monthly production is slated
for
supporting programs in May, a survey by "Steel,"
weekly magazine of metalworking, shows. But that is not
The steelmakers now are setting up their rolling schedules
fense
and
June which call for still additional defense and
de¬
the
all.
for
tonnage
program
in compliance with the latest governmental regulations requiring
*
that larger minimum quotas for DO-rated orders be
the mills that month in most leading products.
reserved by
inquiry as to where all the steel is going provides
an answer.
May allocations for direct defense will take 18% of
that month's steel output or, based on the March production rate,
about 1,580,000 net tons.
Defense supporting programs will take
27%, or 2,370,000 tons. Total take for direct defense and support¬
ing programs, such as railroad cars, runs in excess of 45%, or
3,950,000 net tons.
This leaves 55% of probable May output,
or
4,850.000 net tons for channeling into regular civilian goods
consumption.
'•
Upping of steelmakers' set-asides against defense and related
requirements in June will result in further inroads on supplies
for the civilian
market, says this trade magazine. However, cut¬
backs in civilian goods manufacturing schedules due to shortages
of materials in
general, and also because of reported increases in
finished goods inventories may be sufficient to soften the further
prospective drain on general market supplies.
In addition to
established rated programs, the tonnage reserved by
some
will
increase
manufacturers
in
the
bars, minimum
35%.
to
to
30%.
15%
trend
set-asides
in
for
of
implement
the farm
the field
June
being
In
hot-rolled
upped
general,
in
the
increase
in
set-asides
inventories
February the
ending
extended
United
that month
their
15
carbon
points to
from
ranges
3
States Department of
at
a
new
ago.
high
Commerce
$65,100,000,000.
of
$52,100,000,000
a
An increase in February is "normal," the department
said, but it figured the upswing this
greater than seasonal.
Total
upward
post-Korean
This compared with $63,300,000,000 on Jan. 31 and
off.
Largest
carbon and alloy products.
on
revealed,
year
industry,
affected.
applies to
of which product is
reserve
the mills in
The quota for hot-rolled sheets also is increased five points
Business
■
requirements
cover
1,600
volume
in February was
year was
While inventories
of
about $1,100,000,000
rising, sales were
were
manufacturers, wholesalers
estimated at $41,900,000,000.
This
retailers
and
was
a
$1,200,-
000,000 drop from January after allowance for seasonal factors.
Personal
of
desirable
the
fitted
middle-of-the-roader,
into
He uniquely took
position against tax
at a time of "quarter
who, per Adam Smith, lean on ah
invisible hand to do all the work;
extreme
gov¬
rises
now
and
Cold
War," since imposts are al¬
three
these
categories:
(1)
those
ready practically
were
as severe as
during toial
those
(2)
they
mittent
war.
e r s i ty
of dent," Theodore Tannewald, Jr., want the continuing providence,
Chicago's'Law whose occupation is "counsel to where everything is decided for
A. Wilfred May
School, has to¬ the Special Assistant to the Presi¬ you because you yourself are too
day come to a dent of the United States," namely incompetent or too simple to do
expect to buy it right.
most interesting, if inconclusive, "do you fellows
close.
Its
virtue, not .unprece- national security at a discount?".
Testimony From Abroad
dentedly, springs from elements This habitual tendency to wave
At a conference such as this
other than the originality or con- the flag, to use war as a pretext
creteness of conclusions regarding for foisting off on the economy much valuable testimony, as well
as distinction,
is afforded by the
the "Cold War" economic policies the reforms they have always had
in mind and link them to the war participation of authorities from
to be adopted.
For example, Professor
effort, was resorted to by several abroad.
Conflicts
participants here.
This observa¬ John Jewkes of Oxford offered a
primary interest has been the tion in turn drew a dissent from valuable report on the success of
experience with her
nature of the conflicts that have Professor George Stigler (of Co¬ England's
been openly evined after the 19 lumbia), who stated the plausi¬ purchase tax; its advantages dur¬
Of
"Steel's"
June
concepts
v
The
and
ipants'
degrees of controls, in the words
of Dr. Jacob Viner, a masterful
believing in an inter¬
providence through -the
here
and
Typical of demagogic opposition invisible hand, but who, like Isaac
abroad, gath¬ was the rejoinder angrilly offered Newton, want the right to inter¬
when
the
invisible
hand
ered
together to the Hazlitt-Gainsbrugh team fere
by* the
Uni- by a young White House "resi¬ doesn't work; and (3) those who
estimated 163,874 vehicles the past week
an
184,469 in the previous week.
increase, and the sociali¬
economics
ingot production dipped 1.1 point to 102.4% of capacity;
this was a slight dip from the previous week's all-time high.
Automobile and truck output for the United States and Canada
from
spending
process.
academic
Steel
.
and debt
the
ernment
$10,000,000
changes there and
He termed the
not
are
in the tax statutes.
(20 to 30% of the national income)
zation
politics,
He added, that the New York Central
in the first quarter of this year,
chiefly due to the switchmen's strike.
loss
repre-
tween the Government's
from business,
paying heavy wage increases, but lack permission to make
net
a
"all-
Otis
capital gains tax (along with tax
exemption of municipal bonds) a
"loophole"; whereas the Britishers
see it merely as a tax on gambling
profits. The term "loophole," in¬
cidentally,
was
demolished
at
and the chief economist for a busi¬ length as an epithet by Professor
Ludwig von Mises; and as a de¬
ness group, Martin Gainsbrugh of
the National Industrial Conference vice of semantics to avoid detailed
examination of one's contention.
Board.
Mr. Gainsbrugh
spelled
The variations in the
out the correlation existing
partic¬
be¬
sentatives
stated,
offsetting rate increases."
had
num¬
of
hand
other
the
persistently
and vociferously championing the
cause
of labor, complained that
prices have been rising against
the worker, that the Stabilization
legislation is a ' lousy law" put
over by smart Republican politics,
and that labor won't "take it" if
there
handling present "quarter Cold War" economic situation, as
revealed in lengthy deliberations. Calls attention to the lessons
regarding controls to be gleaned' from Europeans' past experi¬
ence.
Notes realism imparted by industrialists, lawyers, and
politicians—in contrast to the intellectual exercise indulged in
by the professional economists.
J
Total
All-Stars" Conference
Production
Business Failures
On.
'
Brubacher of the CIO,
an
Commodity Price Index
Food
and
5
(1533)
income
in
February totaled $241,000,000,000 at
Continued
on
basic bility of the argument that all im¬ ing an inflation-emergency period
portant reforms are always slip¬ being that it is regressive, that it
ped over on the public under the is discriminatory, that it does not
imum and a minimum of controls, pressure of war. Supporting this destroy incentive as does the in¬
and (2) between those relying qn he t stated,
along with
Senator come tax, and that it is extremely
of
hours
page
35
discussion.
Two
monetary and fiscal measures, and
even
though
occasion they did
on
considerably shadowy.
become
Typical of one side of the con¬
point, (1) above;was the
position decisively expounded by
Dr. Aaron Director, Professor of
flict's
Economics
the
at
University
of
Chicago Law School, and a former
Department official;
Treasury
attitude
nority
the
soon
by
more
an
relegated to the mi¬
ruthless guests of
"liberal" stripe. On the
the emergency," and that a
extensively, cannot long remain
Off
ground
was
of
a
representing
"Rightist"
view
a
were
stamping
most violent conflict
economists'
the
evinced
between
•
Yarrow
are
of
the
forced to
controls
are
■
,•
'■
'
:
>
.
'
1
''
-
'
■
'J
Controversy
DiSalle
Price Stabilizer Michael DiSalle
of
course
found himself immersed
ing
danger
strike
-
of
threats,
social
disunity,
procurement
and
Continued
on
page
pleased to announce that
FRANK II. ROLLER, Jr.
is
associated with
now
Unlisted
us as
Manager.of oifr
Trading Department.
Central Location
Spacious Rooms
Atmosphere
•
Delicious Food
Intimate Cocktail
Excellent Service
Lounge
,
Nielsen, Gordon & Hall
Members New York Stock
■
'
-
'
i
„
Theodore B.
Plaza
Exchange
O <ir 0 C
For reservations
PHOENIX
i
minority
inde¬
discriminating
•
BUILDING
BELL TELETYPE
■
an
requirements
Homelike
,
TELEPHONE 3-7161
people
which they splurge after¬
Formerly Kenneth A. Ellis & Company
SECURITY
,P,
views
larger sums of
save
Weylin
•
Investment Securities
the
1
Henry Hazlitt,
pendent publicist,
•
6-
similarity
between
a
controland Germany's Hitlerian
authoritarianism.
the
public utility industry leader
a professional representative
labor.
William
Mullendore,
money
•
Ellis
his
economy
policy.
a
free nation.
meets the
;
before
newly
being contended by some that def¬
icits can be offset by monetary
nation .period
using such controls frequently and
of the
THE FORMATION OF
London
and
from
in
considerable
controversy.
practised thus far represent "a and
Whereas
Messrs.
Director
and
patchwork of improvisation and of
Mullendore maintained that open
expediency" which "if maintained, President of the Southern Cali¬
will impair our productive strength fornia
Edison 1 C o m p a n y,
ex-* inflation with free relative prices
are preferable to having a "camou¬
and gravely weaken our free in¬
pounded the position that price
flaging" price ceiling, Mr. DiSalle
stitutions," he frankly concluded
controls merely postpone the ef¬
and
his team with
equal vigor
that "direct price and wage con¬
trols should not be used during fects of inflation, that during the denied this because of the attend¬
Hotel
Announce
Austria
Hayek,
.
his
frankly-stated « premise that the
"emergency"
economic
policies
<
A.
F.
Professor
adopted residence at the
war, that being the only way to University of Chicago, reminded
defeat the enemy.
r w '
us
aptly of the permanence of
■.
In line with the open sesame of "emergency" controls; citing the
conflict was the revelation that fact that in all places where rent
imposed
during
there
was
not
even
complete controls. were
agreement regarding the desir¬ World War I they still are in ef¬
fect.
Also
he pointed
out the
ability of a balanced budget; it
We
Kenneth A. Ellis and Paul Yarrow
flexible.
O'Mahoney, that if one is a fer¬
preferring physical controls. vent believer in anti-trusts, as
These differences were revealed, they happen to be, the rules should
imum or a minimum of controls, not be changed at all during the
those
Also
an
-
points of dichotomy emerged: (1)
between the desirability of a max¬
120
BROADWAY, NEW YORK 5, N. Y.
Archibald, Manager
3-$l.Q0
j *
JO J .'*•
Telephone
PX-582
Madison Ave. at 54th St., New York 22
BArclay 7-7340
T eletype
NY 1-2739
14
6
The Commercial and Financial Chronicle
(1534j
effect
Inflation and
By A. L. M.
Banking
Chairman of Board, The Bank of
The
Hartsvilie, Hartsville, S. C.
people
and the propensity to spend it. Notes individual savings of dis¬
posable income is now under 10%, as against 20% during
ing inflation is in the large supply of liquid wealth of
excess
an
preventing inflation is to increase
the supply of goods.
The
cent
opening sentence of a re¬
editorial in a metropolitan
Our Increased Productive
daily
newspaper says:
"Rapid
has been
loans
f
of
p
t
s
Had
Have
this
false,
statement
represents the
i e w p o i n t
,
v
*
of many
writ¬
and
ers
econ¬
omists.
warning
a
is
the
.During
can
gone
that
con¬
and
disagreement
no
unchecked, will result ulti¬
mately in economic and political
cial and
bankruptcy.
call
;
The destructive
inflation
consequences
of
made
possible Htiler's
socialism
in
Germany
national
recently, paved the
for communism in Hungary,
and,
more
way
Romania
and
China.
coincidence
mere
European
countries
Curtain
Iron
Communist
is
the
outside
having
the
the
largest
Italy
and
the two countries that
suffered
the
most
violent
postwar inflation.
cal
From a politi¬
inflation is the
powerful instrument of
standpoint,
most
Communist
aggression, being a
two-edged sword.
It destroys the
capitalistic
same
and
that
system
and
at
the
time creates such hardship
suffering among the people
they revolt against the po¬
litical
order
under
which
effort
reducing
goods for civilian
Such
infla¬
from
human
from greed.
was
The
permitted to develop.
Kremlin,
program of
doubt, in
no
,
its
extending communism
throughout the world, counts far
Korean
the eventual
on
breakdown
was
in superabundance.
announcement
address
by
Palm
Mr.
Wiggins
Beach,
Fla.,
before
April
1951.
of
The
the
before
goods
the
are more
not
see
at some future date sends
to
avoid
they
the
anticipate
scarcity
or
pronouncements
of
involving
supplies.
the
effect
a
of
end
than ade¬
needs
and
we
only
no
further
prices of some
inithe
prices
some
of
be
in
There
inflationary
such
occur,
ever
$200
house
never
before—estimated
at
billion.
This power¬
spendable
funds
has
of
before existed in
in
omy
our
econ¬
proportions.
The
people also have the
such
American
.highest current income in history.
A spark that sets off public spend¬
ing quickly
proportions.
not
balloons
large
into
One problem of controlling in¬
f
flation
This
appears merely as a matter of record,
of these securities have Been placed directly
announcement
all
through the undersigned.
u±t
$8,000,000
^
*
*
as
'
•' *.
•
►-
liquidation of savings already
only did
Another
of
monetary sup¬
ply, that of the creation of new
money, is the field of most recent
interest
area
and
controversy
simple
on
the
economists
bankers,
of
and
It
officials.
economic
is
a
that-the
fact
creation of more money
at a time
inflationary imbalance between
existing money supply and the
supply of goods will generate fur¬
of
inflation.
Our
banking,
loans
such
fires.
inflation
the
to
tribute
cumulated.
for speculative pur¬
added excess
or were
poses,
fuel
purchasing
and
beyond current capacity to
Not
such loans fail to
increased
to
con¬
production,
but
they resulted in additional
buying pressure that inflated the
prices of goods already produced.
Banking in Difficult Position
Banking finds itself in
diffi¬
a
No one is more
interested in cooling off inflation
cult, position.
than
the
banker.
time,
his
lending
be of such character
inflation.
the
At
same
operations
to
as
can
multiply
The additional loans he
credit and monetary, system is the
makes
machinery by which additional
money supply is created.
from the sale of Federal securities
During the
of World War
years
II, the principal
product out
raw
of
which money was created was
the wartime deficit financing of
the
government*
1941,
through
Jan.
From
Dec.
1,
1945,
31,
money
supply, and the increased
supply
tion
for the conduct of their busi¬
and
which' they think the
in
crease
that
period
deficit.
principal
• money
created
was
in¬
during
by gov¬
the
from
part of the Federal
This increased volume of
deposits and
banking
more are
still in the
will remain
system and
until the Federal debt is reduced.
On
that
opinion
my
the
if
should stop
the
cover
is
$73.5
be little ques¬
borrowing
banks to
It
com¬
deposit
ernment
banks should make.
by
can
that
but
under
neces¬
bankers, in their zeal to head off
the
present
inflationary spiral,
owned
banks
There
is
consider
customers
increased
securities
billion.
inflation.
to
he
from customers for loans
pressure
sary
ment
adds
time,
same
which
ness
period, the Federal debt increased
over $200 billion, and the govern¬
acquired
money
At the
in¬
creased $60
of ' reserves
that find their way into the Fed¬
eral
Reserve
bank
add
to
the
billion—to $102 billion
from $42 billion. During the-same
demand deposits and currency
out
great
making
loans, the
any
would quickly become so
pressure
the political
on
front
that
Congress would promptly provide
and additional governmental
new
machinery to meet the demand for
continue to
should
Banks
loans.
perform their essential function
of making
loans—but all loans
should 'be
avoid,
as
carefully
much
as
to
screened
possible,
in¬
an
4
flationary impact.
other hand, the rapid
in, the money
supply
during the past nine months has
tions show that some banks have
not
over-loaned.
the
increase
been
budget
created
by a Federal
The government
deficit.
in
more
than it
money
out during the present
fiscal year.
This increase in the
supply
created largely
was
possible
by
that
reserves
were
statements
Financial
in
made
doubt,
loans
total
assets
and
it
necessary
to
securities
loans
have,
get
no
Bank¬
other
than five
more
times their capital
find
the
of
months
inflationary.
been
whose
ers
Some
recent
condi¬
of
funds,
risk
six
or
or
who
to sell Federal
funds to lend,
acquired by the banks from sales
of Federal Government securities
should
to the Federal Reserve banks and
ing must accept responsibility for
any action that banks take that
increases the money supply in an
by the funds that banks obtained
maturing
by taking cash for their
issues
of
Every
dollar
government
of
Federal ' Reserve
five
of
loans
of
securities
Federal
owned
securities.
sales
six
amount of securities
to
times
period.
inflationary
ers
listen, and
Bank¬
proceed with caution.
do.
Most
bank¬
\
;
.;
the
possible
makes
to
bank-
then
stop, look and
the
Good Cooperative Tokens
The
practical question is what
policy a bank should now follow
in making loans.
A good answer
has already been provided through
sold.
Banking Developments
in Second Half, 1950
joint and voluntary action on the
part of the Federal Reserve, the
actually happened to bank commercial bankers, the insur¬
ownership of Federal securities ance companies and the invest¬
The machinery is
during the last six months of ment bankers.
1950.
During that period, loans being set up by which voluntary
'Here
are
some
facts which show
what
Savings, Spending and Inflation
when
but the psychological
either available
quickly available, for spending
money,
some
economic
reductions
2.
they
is
of
than
making
to
financial
more
accounts, savings bonds and other
ex¬
reduction
pay
ac¬
loans
demand
not only result in a reduction of
voluntary
savings,
but
would
frighten many people into the
from bank loans which were made
the
side, we have
complicated picture.
The
American people have more liquid
wealth in the form of cash, bank
supply.
actions
such
and to the extent
increased
con¬
turnover,
power
money
On
exercise
in
able
tnat
paid
a
order
later
the
should
discretion
and
only
the
of
officials
a
form of
some
civilian
>
inventories in excess of a reason¬
The
under
choice.
in
increase
abnormal
increase in
to finance an
used
was
sumer
fice of civilian needs.
higher prices which
pected
Public
in
than
deposits
en¬
taken
or
articles
fact that
has
the market to acquire their share
such
very
savings
voluntary
has
multitudes of fevered buyers into
of
and
already over-inflated. On the
supply
side,
this country
was
never
better prepared than now
to share its production with the
forms
more
total
are
mere
govern¬
stockpiling a certain item
or proposes to divert a portion of
the supply of an item to military
purposes
less
free
mercial
no
supply
an excess
There is evidence that
In
ment is
civilian
♦An
that
pulsory
aver-:
commodities/ but price reductions.
„
States through
Annual Convention of the Florida Bankers
an
involve
shortage, housewives
bought up and hoarded
sugar,
among
other things, al¬
Armed Services and at less sacri¬
though the world supply of sugar
taken
.Association,
Such
will
for civilian
advances
their dear of
of private capitalism in the United
boom, inflation and
may
springs
development.
with differ4
will find that the supplies
of many
self-interest? and
wave
level
I am willing to risk an
that
we
quate
quickly
care
more
1951
r
Witness the
5 °Jo
people
nor
should
cause
to rush out and bid up
opinion
buying in August, 1950, following
the-v
or
tion
use.
than
more
vary
reduction
of goods.
certain
behavior
from
fear,
of
whole,
a net
of 1950, although this
end
prices to acquire
and
purposes
the
anyone
of productive
supplies
the
not
commodities.
ican
might
behavior.
Only now
beginning to divert a sub¬
proportion
to
military
On
,
reasonably expect"
supplies from the
human
we
stantial
no
two
parties,
France, are
"have
It
that
are
programs.
of
particular hardship on the Amer¬
finan¬
we
than
production
requirements
percentage will
economic, but much of it
the result of what
was
the
in
the
age
but if
Increased
in civilian
ent
of this inflation, have been
the
by
of
in. a
of
the end of 1951
18%—less
exceed
may
Some of the causes
spree.
required
.
reduction
production, prices have
the public has indulged
buying
be
production
provide over half of the .in¬
these
have been
our
tinuing and rapid inflation is not
only destructive to our economy*
to
crease
profits have multiplied
up,
a
that the propor¬
total
the
not
will
'
There
of
will
at
"
In
opinion, any form of com¬
savings would result in
my
ther
one-fil'th.
increase in
bankers.
at
goods
problem
created through
home
of durable consumer
the highest point ever
Armed Services by
past
Large
dollar.
result, is
The
tion
months, inflation has seized
hold on our economy and
has further reduced the value of
American
and
It is estimated
new
the
The
reached.
nine
a
supply.
deposit
To the extent that this
compulsory
savings out of current income.
government
produced
goods
years, under which the purchasing
value of the dollar has been cut
half.
utiliza¬
better
labor
inventory
country.
We have had an infla¬
tionary spiral for the past twelve
in
the
and
the
of
records.
cannot
about
being further in¬
through new productive
acquired by
' the American* people during the
past five years has exceeded all
we
foremost
to
.
is
new
billion of
total of-$8
made for some form of
part
banking and
credit structure, wages have been
increased without a corresponding
concern
A. L. M. Wiggins
flation
con¬
during
1950, a
money was created as a result of
the
lending activities of banks.
been
that destructive in¬
happen
in
this
into thinking
should,
and
are
year
of the
half
last
the
However,
effort.
defense
tinue to be the result of voluntary
action.
Suggestions
have
been
supply of consumer goods that has
amounts of new money
a
of
tion
World
since
increased
facilities
inflation
that
...
is
It
>
'•
to
as
...
that the American
are
and
II
creased
Inflationary
an
Spiral
.
*
Correct or
War
We should not delude ourselves
-
; Korean
price
in f la tion."
stantially
economy
cause
o
The facts
;
capacity to produce has been sub¬
,
We
a
our
\
major
<
of
any
ex¬
Capacity
than from
strategy of military effort.
bust
well
as
Thursday, April 12, 1951
.
forced savings was adopted would
II, and calls upon bankers to aid in promoting
greater thrift. Contends banks must supply business loans,
thus contributing to inflation, but should minimize effects by
screening carefully all loans. Says Federal Reserve, by depre¬
ciating value of government securities, disturbed confidence
in government bonds.
be
dollars and
either
between
World War
of bank
the
of
adequate
largement of industrial capacity, the greatest threat of continu¬
tension
concept
of dollars or an in¬
supply of goods.
This
suggests that one practical way of
by
economy,
banking ousmess.
Savings
r
goods gets out of balance,
Prominent Southern banker and industrialist finds, despite en¬
national
tne
one.
historical
tionship
'
'
the
than
of inflation is that the rela¬
couse
Railroad Company
Chairman, Atlantic Coast Line
pronouncements
greater
even
economic
WIGGINS*
such
of.
be
may
..
is to prevent, so far as
by commercial banks increased $8
possible, the conversion of accu¬
billion; demand deposits of com¬
mulated
savings into spending.
mercial banks increased $8 bil¬
We must avoid, in every way pos¬
lion; and ownership of Federal
sible, any developments, economic securities held
by the banking
or
psychological, that result in
system declined $1 billion—made
dis-saving or otherwise diverting
up by a decline of $3.5 billion in
savings that are quiescent into the commercial bank
holdings
and
inflationary spending stream.
net increase of $2.5 billion in the
We must go further. Individual
holdings of the Federal Reserve
action
the part of the lending
on
community will limit new loans
to purposes considered essential
to the defense effort and to neces¬
sary and
proper
civilian activities
posi¬
without loss of competitive
tion and without legal
joint action.
announced
liability for
The policies already
defining
for
desirable
'
'
savings
loans
or
undesirable
ones,
if
ap¬
Illuminating Company
Thirty-Year 2%% Debentures
the
Federal
debt
ing
The United
running at less
than 10 % of -disposable personal
income, as against over 20% dur¬
period of World War II.
Every additional dollar of current
months'
period
quisition by the Federal Reserve
income that
its national organization has wel¬
banks
comed
now
are
the
can
savings ' will
1981 Series
be
There
time when it
&
Co.
just. that
the spending
never
more
been
ent.
Here
is
economy
an
area
a
important
for
ings to be increased than at
bankers
April 10, 1951
has
was
to the national
Chas. w. scranton
into
release
much pressure from
stream.
diverted
in
sav¬
pres¬
which
banks.
particularly interested
deposits
three
during
and
that
the
new
as
have
more
than
much.
< Similar
continued
the first
should
cized
banks
for
were
ing
and
not
The
new
loans.
banking fraternity through
participation
in
such
a
have the other larger
agencies in the lending field. The
program, as
approach is a commonsense, prac¬
one and will, no doubt, pro¬
during* tical
quarter of 1951.
The
plied throughout the lending field,
will
minimize
the
inflationary
six impact of
ac¬
increased
times
changes
for
valuable contribution to the
see
of
duce
be criti¬
all of these
loans.
Many
loans
made in response to needs
additional
are
in
change
that out of
ownership of the
we
$2.5 billion, commercial
bank loans and commercial bank
and where they can and are mak¬
a
Thus,
making
,
financing productive facilities
inventories required in the
desirable
and
substantial
j
results.
It is
possible, however, that the
results from this program will not
be adequate
to restrain lending as
Continued
on
page
32
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
''
'
*
,
(1535)
from the
I
see
sales
lowering of exemptions,
occasion
no
for
sufficient expectations of inflation
as to lead people to increase the
general
a
tax, nor for particular excise
taxes
as
revenue,producers.
dividuals
are
good
as
rate
In-
judges
By AARON DIRECTOR*
Professor of Economics, Chicago University Law School
preventing
supply of
the stock,
rate of
no
of present
policies will impair our productive strength and seriously weaken our free institutions. Advocates cutting of gov¬
1
ernment
•To
build
expenditures, reliance
maintain
and
armed forces
years/
Expenditures
prompt end to
this necessity,
but we must
ment
thp
prepared
by
indefi¬
its
nite
continu¬
ance.
We must
that
As
that
the
thp
fairlv
maximum
economic
«jtrpnfxth
is
ecobeing
If> at any time,,it
hnrdpn
nf
will
that
pp.
of
our
and
'
.
policy
to
primarily designed to prevent private activity
Policies
Inflationary
on
/
particular taxes, I
further
can
be
used
to
the
absorb
<
.
....
.
.
j
As
to
reforms in
and the
increases,
possibility
in
.
the
of
rate
of
be minimized
money,:can
is, and for some time has
est rates
and
Wage
Controls
implies*
amounts
for
an
additional
that
should be obtained
increase
of
basic
from
and
rates
the
Direct
price and wage controls
be used
during the
If inflation is stopped
at its source by monetary, bud¬
should
not
emergency.
getary and tax measures, no gen¬
eral rise in prices will, in fact,
take
place. If it is not so stopped,
postponed.
then inflation is merely
There
in
are
such
clear
after
obvious
no
advantages
It. is "not
postponement.
that
the
the
will
it
be
easier
work
improvisation
of
impair
and
and
than during
emergency
the emergency.
The function of wage and price
control
to
as
a
persuade
psychological facto/
the community that *
something
is
being
done
can
readily be provided in other ways. *
There is the possibility of added 41
agitation to increase taxes, even J
if the
increases
not effective. ;
are
policy of preIf inflation is not stopped at its
J
ventihg an increase in the supply source, price control can keep par- i;
of money;
ticular prices down only at the
Moreover, should such increases expense of dis-organizing
develop on a ' significant scale/ tion and distribution. Prices and
|
their effect can be offset by mone- wages are the means employed in
of
they
should be of the
same kind as are appropriate in
ordinary times, namely, to in-
produc-|
a,
free
measures have
economy
for adapting the
productive system to changing
inflation.
Inflation
only if there is
an
ment securities.This policy should
be stbpped immediately, if neces-
develop
can
increase in the
supply of money, or if there
sary
are
point
emengcy,
is
there
that
during
Continued
by Congressional direction to
on
,
This announcement is not
gravely weaken our free in¬
ojjer oj securities for sale
an
stitutions.
Reduce Government Expenditure!
Now,
;
economic'
satisfactory
a
aim
the
at
following
reduced.
oe
solicitation oj
an
ojjer to buy securities,
April 12, 1951
/'•y
-'v;
; ■
-Vi
.
4
goals: '
1,000,000
Ordinary government expenditure '
should
or a
New Issue
policy for the present emergency ;
will
page
-
productive -strength
cannot
We
specify the nature of
reductions, but it is im-
usefully*
these
poriant
aie
portion
of
not
be
periods
tne
tnat
citizens
asked
to
-
Celanese
when
give
pro¬
a
Corporation of America
should '•
their' income
urn
periods when the weliare
activities
of
increased,
perioas
but
when
should
be ;
should
be
state
tne
ratner
who
those
Preferred Stock, Series A
'
receive
1
4V2% Cumulative Dividends, Par Value $100
benefits from the state snouid aiso
give up a portion of tnese bene¬
?
Welfare
activities
bear
some
Share
r-tes.
-
(Convertible prior to May 1,1961)
1
fits.
'
per
;
relation to the aggregate resources
avaiiaole
the
for consumption
distribution
of
The Preferred Stock, Series A is
to :
and
issued to Common
The
income.
each share of Common
aggre^a.e will clearly be reduced,
and tne direction of income is noc ^
likely
than
to
become
it is
unequal
more
Stock will be
being offered by the Corporation (a) for subscription on Warrants
Stockholders, at the rate of 6/35ths of
accepted
on
subscriptions at $150
Series A for each share of
now.
per
share), and (b), subject to such subscription
the basis of VA shares of Preferred Stock,
as set forth in the prospectus.
be offered by the underwriters as set forth in the prospectus.
on
7% Second Preferred Stock, all
Preferred Stock, Series A may
; Specifically,
government pro- '
grams conceived
under the de¬
share of such Preferred Stock for
Stock, at the Subscription Price stated below (1% Second Preferred
offer, in exchange for 1% Second Preferred Stock
.
a
*
ffi
■
pression
conditions, such as the
agricultural programs, are clearly
inappropriate.
! Inflation
should
be
m
prevented.
X V A.
$100
The consequential distributions of
per
share
the cost of mobilization
of
means
it
mildly.
Its
managing
output
are
to
advantages
output
the
minor
of
are by no
type, to put
desirable
a
military
programs
importance.
important
miinity,
other
by
the
countries.
habits
in
the
experience
infla-ion
It
is
as
develops bad
dangerous.
emergency
longer
duration,
come
Dillon, Read & Co. Inc.
of
monetary management,
rely on a moderate amount
The
-
com-,
of
and to
of
class
There
destroying
has been amply dem¬
as
onstrated
Copies oj the prospectus map be. obtained jrotn such oj the undersigned
(toho are among the underwriters named in the prospectus) as map
Ugallp ojjer these securities under applicable securities .laws.
diverting
is significant danger of
an
for
and
may
and
increasingly
it
Glore, Forgan & Co,
;
The First Boston Corporation
,
♦Transcript
nomics
before
difficult
Lazard Freres & Co.
Lehman Brothers
Smith, Barney & Co.
Kidder, Peabody & Co,
7
Stabilization, sponsored by the "
University of Chicago Law School, White
Sulphur Springs, West
Virginia, April
7, 1951.
>■
■jfi
i/ti'Td
'set
-JIIT
\yr.
iui'Oili!
'/p
Mil
I
>A>CA<
; 1.
t.i ' J
'
1,
■■:} •
Stone & Webster Securities Corporation
Dean Witter & Co.
White, Weld & Co.
a
statement
by Dr.
Conference on the Eco¬
-
Incorporated
of
of
Merrill Lynch, Pierce, Fenner & Beane
,
to
keep it moderate, particularly in
Director
;
Goldman, Sachs & Co. ♦Harriman Ripley & Co.
Rlyth & Co., Inc.
be
of
will be¬
:£/jV
Subscription Price To Warrant Holders
'
i1
the
rise occasion
may
ex¬
maintained, it will
If
our
to
inflation
of
source
emergency does
not satisfy
these requirements.
It is a patch¬
pediency.
Should
Not Be Used
announced
an
>
the system
of
use
.
Nature of Tax Reforms
taxation,
need
is
taxes
.
government securities.
on
Keeping down government inter¬
remove
by price control and threats of
-windfall
interest
.
nprmit
realization
economic
has
emergency period, and if they can
be properly located, then excise
thereby.
"
.
now
of open-market purchases and
As to sales; and the function of monejary -policy may therefore be
aboOt looked
upon
as
rationing;
Reserve
re¬
The Objection to this is mainly in and to treat persons in the same caused rather than curbed,inflaterms of incentives, and is conse-' income classes alike.
'
: 1
tion, because they have' been quirements. The. only qualifica¬
quently mainly an objection to
- Monetary
policies should be dominated by a policy of keeping tions that I would like to this gen¬
more
progression in the system, directed exclusively at preventing down interest rates on govern- eral
that
potentialities.
Existing
/
budget' pol-
a
system
to control the size
an
will
nf
snurre*
armampnt
•
With such
reserve
powers
ecowby *he main reliance should not elude all income, to apply the tary means,
inprpa<J be on the Personal income tax. same rates to all types of income,
Today, monetary
necessary
riktrihntp
Will
that
are
only say that I can see no reason
nn'lipv
hacip
nnr
to
Aaron Director
in-
definitely ; if
nnmir
reality
ample
and allocation during the whole increases are now being fostered
/
,
resources
diverted.
could
we
physical
tionary.
icy, the
™eet+ tbe cban§e<J requirements.
by the financial reality
monetary resources are. so..,
that
policy
continue
to
,
.
.
ment.activities from being infla-
awarding workers and,'enterprises who do make an effort to from being inflationary.
matched
eco¬
an
levied
u
odd
Federal
been inflationary.
offset
eovern-
be
diverted to rearmament
emerge ncy
with
taxes
*
The
the
nomic
the
be
the
and
necessary,
use.
function: of
stay at home
y
^
nothing
n
the
finance
of
will
to
if
in
by reducing
or
found that Lontroi policies inllationary on
there are improper windfalls not
"
Money
only m .terms of past events, but
Changes, in .the. use of money
in terms of. influencing supply cannot be predicted. I believe that
Inthis way,
taxes.
exnenriiture
homic
therefore
meet
current
should
entirely
or
inflationarvpffpct-
tjf
for
larSelv
financed
" 1
who
increase-
an
money,
borrowing
as
having
the
preventing govern-
ary
the
of
ud0 th?
^ be,mJfde'
-
-
Government expenditures
hP
a
get
profits type tax, the justia comparison
between- those
Should Balance '
Taxes
from
be
excess
taxes
Inflation
money.
the
adopt the prevention of inflation
as the overriding goal, despite its
effect on the level of the rate of
It is proper to think a proper
budget policy that is a policy of Price
all taxes, and some noninflation-
see
fication in terms of
"
•
I can
endeavor to
differential
the inflation which we
pur¬
for
to
an
spend more on luxuries,
and this use of terms is not a
slip,
•
appears
suits. We may
hope
As
necessities,
for
have had during the previous ten
requires labor, land,
machinery and materials that we
would prefer to use for the purpose of our
normal
1 of
view
other
income for tobacco
to
on
our
their
reason
them
broadening base of personal
income tax, monetary policies directed exclusively at prevent¬
ing inflation, and abolition of all price and wage controls.
't,'
they want to spend given frac-
and
Prominent Chicago University economist contends continuation
'
what is good for them in ordinary
times as in extraordinary times,
tions of
of
use
be prevented at its source by
can
of
of
If
/
,
System
v
Our Present Economic Policy
Is a Destructive Patchwork
-
7
41
8
Chronicle
The Commercial and Financial
(1536)
Without such
the United
States will continue, as heretofore,
to
be
required
to
import tin
American Power &
Aartkraft
Recommendations and Literature
understood that the firms mentioned will be
(i
send interested parties the
to
Kinnard
international controls,
Memorandum—
&
Otis, Inc., 45 Nassau Street, New
Also available are card memoranda on Victor
from
the
Products Corporation, and The Wilcox-Gay Corporation.
Atlas
It
Corporation—Card
Manufacturing
Gearhart,
York 5, N. Y.
pleased
Steels
367
following literature:
Limited—Analysis—James
Richardson
Devices, Inc.—Analysis—Peter Morgan & Co., 31 Nassau
Street, New York 5, N. Y.
Values
issue
Selected
from
the
Unlisted
Market—In
able
of
of
Central
How to
Oil
New
Street, New York 5, N. Y.
Air
-
-
&
Company—1950
National
&
a
report—Continental
from
Also available is
of
Bank
Chicago—Detailed
study—Kidder,
ment's
&
Analyzer—Tabulation
of comparative figures
73
Let's
Look
for
those
of
stocks
155
Sansome Street,
at
Stocks
and
expressly
wishing to familiarize themselves with the story
and
bonds—San
Francisco
Stock
to
price of tin without international
Vegetable Parchment Company—Study—Harriman
agreement.
Based
Gas
Electric
and
basis. This
Street, San Francisco 6, Calif.
&
is
fund—Gam-
Ltd.—Analysis—John R. Lewis, Inc., 1006
Seattle 4, Wash.
Missouri.
Riverside Cement Company
1951—New York Hanseatic
Pork
New
York
Paine,
Banks—Indicated earnings first
Webber,
Jackson
&
Curtis,
25
Street,
York
stocks
120
City Bank Stocks—Comparison
of
as
March
Railroad
New
7
an
up-to-date
;
Sharon
Standard
Bonds—Analysis of ten bonds that .appear to
offer
an
attractive
investment
opportunity—McGinnis &
Co., 61 Broadway, New York 6, N*. Y.
Excess Profits Taxes—Tabulation
uring comparative dividend stability of utility
& Co.,
148 State
Allis-Chalmers
Dillon &
Aluminum
•
•;
,
■
'
Weeks,
&
best
Street,
Oil
—
Securities
Insurance
cial
Americau
161
Optical
Devonshire
dealers
tin importers
expressed dis-
have
satisfaction with National Produc-
tion
Company—Analysis—May & Gannon, Inc.,
Authority
amended
*Prospectus
on
that
they
M-8,
as
feel
objections
that
it
is
un-
74
HA
Teletype
NY
1-376;
would
ner.
import
so
long
and
dis-
as
free
a
wires
In
a
pressed
dealers
378
to
Cleveland—Denver—Detroit—Philadelphia—Pittsburgh—St.
suppliers of tin and domestic con¬
of tin.
sumers
The protesting group, composed
of
The
&
be
costly
a
failure
for
to
of the
jare:,^
the
the
that
U.
S.
views
Deex-
tin importers and
,T
.
appropriately modified >and
administered, the firms which
engaged
in
the
business
of
&
to
Rotterdam
&
Co.
Inc.;
Inc.;
Internatio-
Metal
Traders
Co. of
New
for
many years.
which
they
The organizations
have
built
may
up
C.
Tennant
&
Sons
York; and Nathan Trotter &
Company, also believes that the
recommendations
above
would
have to be dismantled and in this
mitigate the hardships imposed by
and other respects, the regulation
Order
place
on
them
iati0n
for
the
M-8.
and
severe
allocation
of
pig
Joins A. W. Benkert Co.
«
(Special
to
The
Financial
Chronicle)
for the
importation of
CLEARWATER, Fla.—Morris E.
by the RFC as sole im- Jones has become connected with
porter go far beyond the needs A. W. Benkert & Co., Inc.
0f the Government in furthering "
tin
and
pjg
tin
the objectives and purposes of the
Defense
program
conditions
in
the
under
world
iUket, These extremes
(1) Unless amended Regulation;
M-8 is
Louis
letter
Co.;
Strauss
most of them have been engaged
Metal Co. Ltd.;
Brandeis,
GoldCo.
Inc.;
Caswell,
American
in
(2) The provisions in this regu-
Government to engage in the
in an exclusive man-
partment
,
Private
by Order M-8 and would
private firms to have at
inc.;
tin
it
377;
recommendations
opportunity of maintain¬
ing their organizations and their
distributing tin
will be obliged
will
Security Dealers Association
2-2400.
the
valuable connections with foreign
undue hardships-,
request
Trinity Place, New York 6, N. Y.
Telephone:
porting and
this country
the
tin business
Y.
in
reasonable,
mitigate the hardships im¬
Bache
monopolize
the
Members: N.
for
least the
Import Monopoly
reasonable for the Government to
market for tin prevails outside of
the U. S. Under the circumstances,
Troster, Singer & Co.
can
would
tribution of
Delhi Oil
they
within
The foregoing
Columbia Bank Building,
discontinue this business in which
12,
1951.
The
that the chief
for the dealers'
reason
is
Order
March
indicated
group
Kerr McGee
to
prescribed limits.
study—
and
States
schmidt
Republic Natural Gas
issued
and maintain stocks of tin
United
Company—Report
A group of leading
and
Street, Boston 10, Mass.
Piedmont Natural Gas
be
porters and dealers of tin to carry
organizations.
of New York—Spe¬
report—Loewi & Co., 225 East Mason Street, Milwau¬
2, Wis.
such
sell
that the National Produc¬
Authority
authorize
im¬
tion
Group of leading tin importers and dealers say it is unreason¬
monopolize import and distribu¬
tion of tin as long as free market for product exists outside
U. S. See destruction of private tin import and distribution
lina Electric and Gas; and U. S. Tobacco.
kee
shall
arrangements
(4)
Analysis—G. A. Saxton & Co.,
(New Jersey)—Review—W. E. Burnet
Company
Railroad; McGraw Electric; Reynolds Metal Co.; South Caro¬
Company
to
terms at which it
the procurement of such tin;
able for U. S. Government to
America—Brief
Equitable Assurance
agree
same
purchasers of tin instead of
to
the
suppliers, and that the
purchasers
receiving
allocation
\
Protest Government Tin
survey—Abraham & Co.,
120 Broadway, New York 5, N. Y. Also available are data
on American Power & Light; Chicago, Rock Island & Pacific
American
Produc¬
that Order M-8, Section 7,
permit
Manufacturing
of
National
posed
'
Company—Analysis—Eastman,
Co., 15 Broad Street, New York 5, N. Y.
Co.
RFC
authorizations
stocks
_
or
the
Coffin & Burr, Incorporated, 60 State Street, Boston 9, Mass.
,
same
authorizations be free to make the
2, N. J.
Lucas, Eisen & Waeckerle, Inc.,
Kansas City 6, Mo.
.
common
the
(3)
11 Wall Street, New York 5, N. Y.
Western
meas¬
a
"Allocation of Pig Tin," be modi¬
fied
to
provide that allocation
Inc., 70 Pine Street, New York 5, N. Y.
Developments.
vs.
Corporation—Analysis—Hornblower
Southern Union Gas Company
Railroad Income
Utility Dividends
Inc.—Analysis—Barclay Investment Co.,
Chicago 3, 111.
Sonotone—Circular—Richard E. Kohn & Co., 20 Clinton
Equities—Analysis—Vilas & Hickey, 49 Wall Street,
5, N. Y.
Also available is a leaflet of current
that the
tin at the
Street, New York 5, N. Y.
Newark
at
offers to sell tin to consumers;
Steel
40 Wall
.
.
,
,,
States
the regulation to sell tin
private importers and dealers
to
Street, Boston 9, Mass. Also available are analyses of -Verney
Corp., Simplex Paper, U. S. Thermo Control, Maine Central
Railroad, Sanitary Products and Air Products.
com¬
United
lesser cost;
and
Philadel¬
Rudolph Wurlitzer Co.—Analysis—Raymond & Co.,
showing
York
Railroad
Building,
the
cost, it will buy tin from
under
South La Salle Street,
39
parison between the 30 listed industrial stocks used in the
Dow-Jones Averages and the 35 over-the-counter industrial
stocks used in the National Quotation Bureau
Averages, both
as to yield and market performance over an
11-year period—
National Quotation Bureau, Inc., 46 Front Street, New York
4, New York.
Exchange
Stock
Incorporated,
into
(2)
J
•
competitive
a
that if the RFC
tion Authority authorize the RFC
M. Byllesby and Com¬
Myers, Inc.—Analysis—H.
a
Lerner &
Also available is
Gear Grinding Machine Co. and on Seneca
on
Robert Gair Company,
Broadway, New York 5, N. Y.
Over-the-Counter Index—Booklet
—
on
means
private importers at the
at
phia 2, Pa.
and analysis of 18
Bissell & Meeds,
1951—Laird,
1,
&
pany,
New
York 4, N. Y.
New
Card memorandum
Falls Machine Co.
Bobbins
quarter of 1951—
Broad
memorandum
a
Corporation, 120 Broadway, New
,:
i,', V1
5, N. Y.
—
Co., 10 Post Office Square, Boston 9, Mass.
of March 31,
as
Government
willing to buy tin for importa¬
certain
Placer Development,
Second Avenue,
the
to
importers
tion
Co., 40 Wall Street, New York 5, N. Y.
Gas News—Current developments in the industry—
Scherck, Richter Company, Landreth Building, St. Louis 2,
recommendations
(1) that the RFC express its
willingness to buy tin from pri¬
Company—1950 annual report—E. J.
vate
mack
Natural
Earnings—Preliminary figures
made
were
Company—Analysis—Cruttenden &
Pioneer Fund, Inc.—Leaflet on speculative mutual
New York 6, N. Y.
views,
officials for immediate action:
Rubber
&
following
Market
Stocks and Bonds—Analysis—Goodbody & Co., 115 Broad¬
aforesaid
the
on
the
Beckett, Treasurer, Pacific Gas and Electric Company, 245
San Francisco, Calif.
Market Action in 1951 of Good Grade & High Grade Preferred
New York Bank
destroy the free market in the
United States and to fix the U. S.
Corporation, 111 Broadway, New York 6, N. Y.
Co., 209 South La Salle Street, Chicago 4, 111.
Pacific
Exchange,
we believe it unwise
Government to undertake
Tire
37 Wall
written
with
Co.—Analysis—Bond, Richman & Co.,
Street, New York 5, N. Y.
Mansfield
Bonds—Booklet
buyer of tin
foreign
a
quotations,
Manufacturing—Memorandum—Aetna
&
as
contracts
for the
Mansfield Tire & Rubber
Wall Street, New
legally
countries at prices based to a cer¬
tain extent on New York market
326
Co.,
position
under
Memorandum—Eisele
Co.—Memorandum—Westheimer
Stamping
Kalamazoo
is
RFC
price fixing or as to subsidizing
importation of tin.
(4) In view of the Govern¬
Street, Cincinnati 2, Ohio.
Securities
question
We
day.
to
the
the
King, Libaire, Stout & Co., 50 Broadway, New York 4, N. Y.
an analysis of Farrel-Birmingham Company.
Industrial
day
whether
memorandum on
a
as
authorized to do this, either as to
Ripley & Co. Incorporated, 63 Wall Street, New York 5, N. Y.
Stock
companies—Geyer & Co., Inc., 63
York 5, N. Y.
.
annual
Rutgers Fire Insurance—Card
&
Walnut
New York.
•I
Haupt
Also available is
Inc.—Analysis—Cohu & Co., 1 Wall Street,
5, N. Y.
Globe-Wernicke
options—Thomas, Haab & Botts, 50 Broadway, New York 4,
way,
Co.—Analysis—Ira
Also available is
"Information Please!"—Brochure explaining about put-and-call
•
Oil
York
Globe
Market"—Dept. C-61, Investors Research Com¬
pany, Santa Barbara, Calif.
'
;
Service
Peabody & Co., 17 Wall Street, New York 5, N. Y.
the Stock
on
of this
it stands would re¬
quire the RFC to fix the price of
tin for importation and for sale
to consumers in the United States,
from time to time and perhaps
Products Inc.
First
Prices—Primary
weekly—Special $5.00 trial subscrip¬
tion ofler including three-color graphs of
primary indexes
from 1943 to date, basic strength
graphs for 1948, 1949, 1950
and 1951, weekly analysis reports for the next six weeks
(airmail) and newly published booklet, "Planning for Profits
issued.
was
The administration
(3)
Company, 10 Rockefeller Plaza, New York 20, N. Y.
Dean Phipps Stores,
Recognize the Major Trend of Stock
Insurance
lation
&
Continental: Can.
Continental
trend indexes computed
in
legislation under which this regu¬
Broadway, New York 6, N. Y.
of
under¬
our
such a policy is
contrary to the intentions of the
Manufactur¬
of America—Detailed study—Dattels
Public
is
that
regulation
Vermont
review
(6 revised issues)
William
Corporation
Co., 113
1950,
$50.00—special offer of three edi¬
tions of Graphic
Stocks, 1924 through 1935; 1936 through 1947
and up-to-date current
edition, all for $25.00—F. W. Stephens,
15
Electric
It
firms.
standing
Canada.
showing monthly highs, lows, earnings,
capitalizations, volume on virtually every active stock on the
New York Stock and Curb
Exchanges—single copy $10.00;
yearly
Emerson
on
established
long
private American
business
•'
;
of the
exclusion
Company, Ltd., 40 Ontario Street, South, Kitchener, Ont.,
Graphic Stocks—January issue contains large, clear
reproduc¬
tions of 1,001 charts complete with dividend records for the
year
memorandum
a
Celanese
"Over-the-Counter Bulletin"—J. Arthur Warner &
Co., Inc., 120 Broadway, New York 5, N. Y.
full
is
ing CO.
March
agency
such
on
carry
and experienced
Burroughs Adding Machine Co.—Analysis—Walston, Hoffman
& Goodwin, 35 Wall Street, New York 5, N. Y. Also avail¬
5, N. Y.
Eight
government
a
business under
existing market conditions to the
to
Audio
Candidates for Life Insurance Investment—Selected list of 40
issues that qualify for purchase by institutions—Francis I.
du Pont &
Co., 1 Wall Street, New York
for
impracti¬
and
unwise
is
it
cable
Main
Street, Winnipeg, Man., Canada, and Royal Bank
Building, Toronto, Ont., Canada.
-
foreign sources of supply in
world market. We feel
open
that
Sons,
&
basis.
world
a
on
Light—Progress report—Kalb, Voorhis &
Co., 25 Broad Street, New York 4, N. Y.
Dealer-Broker Investment
Thursday, April 12, 1951
; .>♦
or
existing
tin
mar-
regulation
Merrill
(Special
to
MIAMI,
effect,j providing tor allocation of
im-
tin and fixing of the price
of tin
Financial
Chronicle)
Fla.—John L.
,coqld4 be-justified only if an in- has~become
ternational
agreement
were
m
are
Lynch Adds
The
Warren
associated with Mer„
„
ri"
Lynch, Pierce, renner <sc
Beane, 169 East Flagler Street.
Volume 173
Number 5002
.
The Commercial and Financial Chronicle
.
(1537)
by statutory requirements and the
fundamental conservatism of most
Life Insurance Investments
investment officers.
the
By VICTOR B. GERARD*
ideal
life
Treasurer, Commonwealth Life Insurance Company,
Louisville, Ky.
Wall
Street
brokerage
office
minimum rate of interest
or
the
which is called
slightly less turbulent atmos¬
phere prevailin
ing
terest." If
the
i nvestme
t
n
the reserves,
able
department of
New York
a
bank
can
to
a
prevails
the
required in¬
these
required to service
the surplus is avail¬
contingencies
arise, such as an un¬
is
reserves
that
each
year
policy is in force the amount of
insurance
largely
increases,
at
first
because of principal ad¬
This
ditions
and
company.
is
en¬
a
of
of the fact that
the
Victor B.Gerard
special invest¬
life
ment needs of
the
life
of
because
accumulation of interest.
largely the
result
reserve
later
of
higher yield
industry.
To
of
of
With
the
nature
ment problem
us
of
the
lowing
that
These
data
picture
close
of
of
the
industry
period
the
depression;
tremendous
ness
the
the
after
has enjoyed a re¬
growth trend, the total
the policy reserves has always
understand these needs and to be
generally fol¬
are
result the assets
a
they
addi¬
the
of
Most
Years
grown
each year. Like
these
admitted
States
order
to
receive, or
beneficiaries receive,
tial
tomorrow
sum
have their
a
substan¬
or
many years
hence. In order to induce healthy
people
well
as
the
as
infirm
to
keep paying their premiums when
they grow old, the life insurance
business
has
developed
unique
method of collecting for its serv¬
a
ices. This is generally referred to
as the "level-premium
plan."
In
the
essence
requires
more
in the earlier
costs
to
hazard
a
insure
of
of
the
The
surplus is
insurance com¬
invested
by the
pany. Each year the
sum
accumu¬
beginning of the
year
is increased by the amount of in¬
terest that has been earned and
by the addition of another amount
representing that part of the cur¬
rent year's premium which is not
calculated
as
mortality
of
expenses
These
or
to
necessary
the
other
the
cover
obvious
accumulations
are
year.
called
Policy Reserves
policy reserves is fre¬
quently misunderstood by people
factor
dustry
It is actually
the
principal liability of the in¬
surance company. It is the amount
put aside by the company on be¬
of
individual
policyholders
will be utilized
as
part of
It
is
sured's death. It is
an
reasonable
surrender
policy. It is
an
today
affects
it will
amount that
correlation
value
amount
clear, therefore,
problem of
that
as
a
to
by
or
the
of
that
to
the
will
death
paid
termination
in the event the
life
an
ever-increasing accumulation of
funds; to find productive uses for
money in good years and bad. It
becomes
never
1.540
Total assets
%
Increase
during
in
decade
business
as
liquidate
when
it
select
the
to
of
have
to
investment
chooses
the
decide
whole
a
an
to
do
time
to
Therein
the
sell
great
institution' of
417
1.4
1,443
137
.4
479
The
1930 had
10.9
897
2.9
1,329
16.4
14,766
2.9
3,091
10.0
6.0
2,156
100.0
$30,802
:
-157.9
Research
market
It
lies
success
of
the
indicates
earnings of
the
instead of only
out
of
in
settlement
policy is allowed
an
obligation of
insurance company like the
accounts payable of a manufactur-
♦A
lecture by Mr. Gerard to
Advanced
Finance Class,
University of Kentucky,
Lexington, Kentucky, April 4, 1951,
decade
a
ago.
municipal
security is
bonds.
it
that
insurance invest¬
that
As taxes have
in
past decade, the
yield
has
become
attractive
to
other types
are a
which has
or
to
sell
those
than
of
insurance
decreased
11%.
companies
in
that
1940!
able to
were
the storm! What
was
How
an
but the rather
1,428
2.2
3.8
7.1
100.0
$63,699
100.0
unsatisfactory rec¬
senipr securities of this
industry during the great
ord of the
fine
4.2
depression has caused
tutions
years.
value
106.8
life
insurance
net
to
Yet
the
many insti¬
them in recent
avoid
not
on
a
few
represent
industry would
investment
*'
the
have been
fold
earnings that prevailed
*
many
be forced to
curities
at
competitive problems,
on
.
400,000 Shares
Tennessee Gas Transmission
Common Stock
(Par Value #5 per Share)
per
Share
Copies of the Prospectus may be obtained from any of the under¬
signed who are qualified to act as dealers in the respective States.
out
Stone 8C Webster Securities
White, Weld Si Co.
Corporation
advantage the
Blyth SL Co., Inc.
,
Glore, Forgan & Co.
The First Boston Corporation
Goldman, Sachs 8i Co.
Harriman Ripley 8C Co.
se¬
unpropitious time.
Kidder, Peabody 8C Co.
Incorporated
Lehman Brothers
Smith, Barney 8C Co.
Union Securities Corporation
The Theory of Life Insurance
Investments
W. C.
Because the life insurance busi¬
ness has no fundamental
liquidity
considerations
as a
observe
in
the scope of its
choice is greatly enhanced and is
practical matter, only
Langley 8i Co.
Merrill Lynch, Pierce, Fenner & Beane
Paine, Webber, Jackson 8C Curtis
in¬
money,
limited,
to
in
22
„
.
forced
other types of in¬
vesting
are
page
•
$24
April 10,1951.
sense
'
fortunate
dispose of their
an
a
railroads, despite their mani¬
New Issue
Price
of
com¬
relatively
attractive investments. In
3.07*
cor¬
life insurance business commands
so
tests
bonds of railroad
now
an offer to sell nor a solicitation of an offer to buy any of these securities. The offering
only by the Prospectus. This is published on behalf of only such of the undersigned
as are registered dealers in securities in the respective States.
■
■ ■
below
wait
per¬
bonds were the backlog of the
corporate segment of the portfolio,
How unfortu¬
who
about
substantially
below
person
of
category of
remained
This advertisement is neither
portfolio; that this loss increased
to a high point of 22% on Jan. 1,
1940; and subsequently diminished
the
spiraled
the
entire
that
This
excellent
an
can
the
The
largely the result of the
increase holdings of tax-
par on Jan.
1, 1928 equal to 2% of the entire
an
ingfconcern. The insurance com¬
pany is charged with
safe-keeping
just about one-half the
Continued
is made
only
assets,
centagewise. Before 1930. railroad
2,397
2,716
,
63.1
3.07*.
highest ratings of the
leading statistical services showed
loss
6.7
3.44
four
market
admitted
insurance
porate bonds in default
a
may
be
Other
Gov¬
comprise
the
panies
A
recent
and
comprehensive
study by the National Bureau of
Economic
is
percentage of
and
23.2
the years with
over
which
the
Gov¬
it
"All
total
portfolio
"2.1
29.2
14.9
net investment
realized
of
of
S.
.
5.03
been
that
Bonds"
4.0%
moment
U.
stationary in dollar amount in the
Rate of net investment,
NOTE:
observed
Railroad bonds
.7
2,807
1,129
earnings
in
securities,
ernment
assets
2.3
.5
to
should
life
15.0
1.9
except
so.
sell.
9,544
4.9
assets
_____
ernment
the
portion
held
tax-exempt
4.0
5.0
i$18,880
i
pen¬
investors, with the result that, the
industry reluctantly has lost its
interest in municipal bonds.
.16.6
5,061
2,060
_
for
over
now
upward
21.0
3,139,
10,547
548
assets
invest¬
sense,
industry operates is
little
advantage
is
gained from holding tax-exempt
2,052
■
but
a
for the
necessary
lapse.
The reserve is
1.9
8.1
and, in
substantial
such
5,526
Policy loans
insurance
Passing
the
assets
which
367
_
Miscellaneous
life
the
the
vestors who may, because of cir¬
cumstances beyond their contfbl,
policyholder
13.8
355
————
estate
only
sion programs.
ment, but the tax formula under
Total
$13,359
2,552
that
media has been gaining immensely
in popularity. This includes not
medium of life
% of
9.2
4,264
19.0
means
their
savings has
been changed. In this
atmosphere,
investing
through
institutional
exempt
type of
land.
1950*
merely
the direction of
"'Preliminary.
over
part
2,820
8.6
.
.
either
the
Real
in
Invest
definitely be consumed sometime:
released
15.4
1,618
_
be. It
failure to
the
thrifty than they
are more
to
decline is
or
99
Other
few years hence.
a
insurance business is to invest
nate
a
investment
decision
investment
to less
policy in the event of the in¬
cash
its
poor
Constantly
Accumulating Funds
the payment of the face amount of
bears
6.0
$5,857
2,502
$1,248,500,000 greater in 1950 if the 5.03 rate of
Must
the
the
A
be constituted
the
which
dilute
to
on
10% of the portfolio
only 5% of the portfolio as
reserve
commonly understood
in
Total
2,908
'
Pref. & guaranteed.-
Farm
used
when
work
Stocks:
growth enables the in¬
mistakes.
bond
half
of
were
people
more
utility bonds.
Ind. & misc. bonds.
United
life
__
stimulus to the growth of the life
insurance industry. It is not that
securities.
1940
1,135
Mortgages;
unfamiliar with the life insurance
business. It is definitely not'* a
in general business.
the
1.8
its investments.
The term
as
Public
$17,482,000,000; by the end of 1933 they had
increased to $20,896,000,000. This
is a
19.5% growth during four
of the greatest depression years
this country has ever experienced.
Among
other
advantages,
this
has achieved
"policy reserves."
the
of
reserve
companies
ance
secret
particular
assets
legal
pay
against
who
% of
Total
a large percentage of
population lives in cities and
depends vitally on the weekly
paycheck. It is only natural that
such an economy has
provided a
our
they could
Security Program.
family investment
$336
Common
than it
years
him
death.
lated at the
to
person
Railroad bonds
"Ol' Man
insur¬
level-premium
plan
Social
concentrated
was
farms,
relatives
(000,000 Omitted)
U. S. Gov't securities--
have
reserves,
they
"Keep
on
Rollin'
Along." At the close of 1929 the
of future dollars.
part
sums
of money at regular intervals in
on
decrepit. The farm
principal backbone
the
% of
River"
life insurance business is the sale
to
busi¬
Securities of bus. & ind.:
industry.
suaded
cus¬
Ended Dec. 31
1930
represent substantially the invest¬
of
per¬
or
of
out
became
then
was
striking points
All other gov't bonds__
ment
People are
with small
worked
parents
when
go
activity.
of life insurance companies, which
lowed it is necessary to appreciate
some of the fundamentals of the
Stripped of actuarial verbiage,
and perhaps precise accuracy, the
the life insurance
owned farms to which
increased—even in years of severe
depression. As
techniques that
common
principal
Admitted Assets U. S. Legal Reserve Life Insurance
Companies
insurance
a
the
growth
consideration
In view
the institution of
sympathetic with the
investment
is
into
farms,
had
or
extraordinary busi¬
One of the most
take
who
owned
pros¬
five
and
changed status of the
of
Now four out of five people are
employees;
ment trusts
this
ness.
In the earlier
days of our
country most people were selfemployed.
Most
people
either
decade
a
and today
war
tional years of
of
end
at
in¬
future—in¬
must
tomer
asset
of
Who
insurance
contemplating
man,
may
the
great
a
at
portray
life
bright
a
the
let
us,
figures
the
has
we
For this purpose the fol¬
illustrative
helpful:
the
definitely?
industry has, in fact, invested its
money.
of
of life insurance!
a new and untried
one? On the
basis of past performance who can
examine how the life insurance
prove
What
could
as
pre¬
invest¬
before
now
the
challenge the statement that
growth industry can be an old
and well established one as well
deny
the
of
a
In
markable
insurance
and
63.1%.
was
can
where, to
Analysis of Invested Assets
of
these
make:
growth
dustry
perity;
inve stment
to
necessity
serving principal.
them,
on
decision
sulting from an epidemic or war,
or capital losses on investments.
Now the interesting fact about
problems that
life
vitality
institution
The
portfolio manager
principal investment pol¬
one
has
depression
evidence
favorable mortality experience re¬
preciate fully
the placid ap-
in
"the
great
be
fundamenetal
various
for
which might
ap¬
proach
is
on
is earned
more
than
sums
the
convincing
established
an
of
there
tiveness
policyholders' funds and
earn
decade
draw the line between the attrac¬
companies during last three decades.
to
that
which
more
icy
stantly accumulating life insurance funds. Makes an analysis
of U. S. legal reserve life insurance
deavors
that
the
has
of the aggregate assets
these
growth
the
invested.
illustrations of problems
Only those of us who have ex¬
perienced the hurly-burly of a
is
in
the ultimate return of the dollars
accumulated, and the nature of the policy
of investing con¬
are
gives
reserves,
Theoretically,
policy of a
company
security
the
is
provides
the greatest yield consistent with
Mr. Gerard, after giving clear and simple picture of how life
insurance assets
of
note
industry. Assets
increased 157.9 % during the de¬
cade 1920 to 1930. Even
during the
investment
insurance
type
to
occurred
9
'ft ■/
10
mean' the declining volume which
has occurred beginning with the
Stock Maiket from
Today's
A Technical
Taylor, in justifying a bullish position both on short-term
long-term investment basis, describes cycle of price move¬
ments beginning with accumulation on declining market and
"break-out" or distribution on rising market Gives technical
Albert Frank
why market is going into substantially new high ground,
levels for each of the 50 issues comprising
the Dow-Jones Industrial and Railroad Averages.
and gives support
.
.
market
or
of aver¬
in
cycles.
But,
For this purpose
later date.
some
let
the Dow-Jones Industrial Average
who
Figure
us
and
^^thpd is a cleasrpindication of cie-
possible but
a
Point,
us
1949 lows to date.
at JK
Now from the
.we can
^*1*
expect,
cSSS.SlTf i?
bteei 1S
*T?'
stocks are compiet-
«
buy
the
averages,
we
opinion, the following: A ing Dases*
(4) A divergence is Occurring
beginning with J 932. There was sideways pattern' of correction
in that the Rails and Industrials
the first phase of an uptrend, which will rally and' declined in a
are not moving in gear with each
1932 to 1937; then a correction of broad, trading range which will
other. This has occurred over the
this phase which occurred from afford many profit opportunities
buy
in-
1937 to 1942.
since
r-
correction in
the movement of foregoing'analysis
consider
group
.*t
first
point, which to
the
follow
be the
can
one
market is go- not probable long-term top or it
^
T
lWari„.
ing into substantially new high may be the first downswing in h
ground either in nearby time after sideways movement of correction 'c
a
test of the recent highs or at of the entire bull move from the
^
ages, moves
*
The current decline
us
ing
Expect
basic cycle why the
of fact, by any
J v.
rallies and declines exceed¬
mean
What to
~
begin: First, to show
broad considerations of the
from
not
can¬
we
must
Next
i cl
v
1
u a
Owen K.
market, if you
own the right
bought at the
in
even
..
—
As;a^matter otfact the technical viewpoint because it
is Verv important to us now from
there are
downtrend,
a
indication
for
tech¬ York advertising
nicians, implying a change in the been announced.
V
area
enrrepfinn
nf
Kl T
1
M
move
Al 1
A O
1
■
A V>
trend.
recent
most
-r
A V.
T
A
A
Whether
Mr.
the
guide.
(5) The
zone
240-244
support area.
(wr
m*. fcifm*
talk
this
in
shall
I
attempt to
joined
<
the
Journal," where he covered rail¬
strong
'
•
(6) • No heavy volume develr
oped in the January-February-
"V."*":
road
;■
news
years.
for
approximately nine
*
.
*■
*
eauuaiy-reuiuuiy-
w?llhold inthfMaw* ^ction above current levels,
MaH.e..
:;
•
McNamara
editorial staff of the 'rWall Street
the
of
a
••
issues which afford oppor- constitutes the accumulation base Cated to occur in the zone 255 27ft"
tunities on the upside and vice from which the current uptrend
it is also mv oDinion that (he cur'
versa.
Therefore, any method of began, and from which subStendecline
market analysis that is based upon tially higher prices are implied. 240-242
If I should be in
any average must in itself leave The fifth phase of the brpad cycle in mv' estimate of " the hotline
a gap to be filled by the selection
occurred in the advance from the WlW
fndS?
of the proper, issues, bought right june lows of 1949 to the highs re- rials .then rLlfe™"tw the tone
and held for the full extent of the corded
in. 1951. This move
is 236-238 Will
consiitute an impormove.
v
/
neither completed, insofar as its tant urea of new* buying In either
has
or major, this di¬
agency's news department in June,
important technical 1946. Prior to his association With
AFGL, he was a member of the
:
Dow-Jones Industrials is
many
*
it
agency,
minor
is
vergence is an
indi
i*
f*T
important
- Thj; u-pside resistance of this
broad
Daniel F. McNamara
Pas* ^^ht or tern days and is an
both for short-term and long-term
advancing phase ior the second leg investment positions. It is my
a basic cycle—an uptrend from
opinion that the support for this
1942 to 1946. This phase was cor- sideways congestion area will bb
rected from 1946 to 1949, and thus in the zone 230-236, with the low
Taylor
we
had two completed moves— point either at 236 or below octwo legs — of a long-term basic curring, either later this year or
price, bull cycle. This area 1946 to 1949 next.
move¬
ment of the
profit.
new
a
.
my
of
any
you cari
.
in
.
stocks, and in
stock
had
we
_
d i
Agency
...
Now let
matter
average
general
Long-Term Cycle
rial .Average
or, as a
the
wrong.
Indus-
who
us
McNamara V.-P.of
reasons
of
of
•.
Mr.
ion
those
For
Viewpoint
and
begin with let me state
something everyone knows but
which occasionally needs repeat¬
ing. The market as represented
by the Dow-
Dow-Jones
Industrial and
Rail
rely
point in December through upon
the
''Point' and
Figure Averages. On each of these 50 is¬
February highs and up to date. Method" (and I recognize in this sues I have indicated current sup¬
The market never has topped out, audience a
great number of my port levels at which I "believe the
either for a major-cycle top or former
current decline will find good buy¬
students), it is important
for a minor intermediate top with
ing and will constitute a zone from
to realize:
'
i
*
declining volume. The market has
which a new advance will occur.
(1) That the present phase of
always recorded both interme¬
the market is substantially above
diate tops and important majora
basic trend-line drawn tangent
cycle tops with high volume but
to the lows recorded in June of
hot with low volume. Therefore,
1949 and in July of 1950, and as
we must conclude from this alone
our Point and
Figure work rethat if the February highs are to
be an important intermediate
Daniel F. McNamara has been
top.
oramajor top, we mtist oncfeagain
must co tinue elected a Vice-President of Albert
go up to test that high, and at that
Frank-Guenther Law, Inc., New
(2) Many important issues are
level record much greater vblumfe
now at support levels and are be¬
than has occurred over the past
ginning to oscillate. By that I
be three or four months.
Investment Advisor
To
Thursday,; April 12, 1951
the 50 issues which constitute the
Market's Current Position
,
*.
.
low
By OWEN K. TAYLOR*
Jones
Commercial and Financial Chronicle
The
(1538)
John W. Shea Joins Staff
The patterns of individual
!^ks.do n°t,show completed disWith dependable downSlde count implications.
.
(8) At this level there is a def-
Of R. H. Johnson & Co*
(Special t6 The Financial Chronicle) *
,
BOSTON, Mass.—John W. Shea
.
has become connected with R.
jl.
.
Johnsoh & Co., 70 State Street. He
imte lack of volume on the down-
**
correction
Thus
yet.
as
we
must
1 P
—•«*..
as ±or *"ose w^o buy the should like to direct your atten-
justify a bullish opinion both for conclude that the basic
broad right stocks at the right time.
tion to th"S accompanying list of
the nearby short-term speculator cycle has substantially more to go
A STUDY IN iHE AVERAGES
and
for the more conservative both in extent and in time,
Recent
30 Industrials:
RecentSupport
long-term investor. In addition I
- i
;
Price
Levels
High
shall give you technical reasons
The Minor Move
" '
Allied Chemical
65
61
59
supporting both Conclusions. Then
\:
Now that we have justified from
American Can
113
109
103-105
near the end of my talk I shall
'
the technical view the basic longAmerican Smelters
80
72,
65-67
'•
point out two issues which cur¬
term bullish implications, let us
American Tel. & Tel
158
154
152-153 :
rently are in very favorable posi¬
American Tobacco ^
go
to the minor cycle
which
J
68
64
63-64
tion and should double in value
.
'
■
ft
■
*
i
•
t
g.-
.
,
_
the longer term and afford a
of about 50% from current
over
started with the
June
1949,
of
Here
move
parts of
levels for the shorter term.
price progression of
the
follow
moves
simple pattern.
a
There is
every
rather
long
a
period of accumulation, followed
by a breakout from that accumu¬
lation.
This
breakout
when
it
the upside.is usually the
comes on
beginning of a sustained advance.
During that advance there are penods
of
correction
tion which later
consolida-
or
followed by
are*
breakouts and the price of the issue
advances to an area where
important distribution takes place.
After the distribution is
there is
completed
downside breakout and
a
the downtrend begins. The issue
then goes to lower levels and into
period of accumulation.
Then the cycle is repeated. There
are various points in
this cycle
a
new
which
afford
exceptional
oppqr-
tunities for
profit if the issue is,
purchased at the right time. This
Is true
no
of the
general market might be.
matter what the action
In myr opinion the general mar¬
ket and many issues are
this
in just such a position.
They will afford an exceptional
moment
opportunity for the
stock
of
a
companies
~
just
now
.
.
,
These
■
i
not
,
-
ppen risk, even should
77
77
75
88
87
Products
of
1950
and
shakeout
from
June
June
to
Korean
the
of
du Pont
Eastman
92
Kodak
.
52
General Electric
1950-V to the lows of July, 1950
which corrected the first leg of
General Foods
this phase. Then we had the ad¬
vance from the lows of July, 1950"
Goodyear
to the highs of
International Nickel
currently
Johns-Manville
we
February, 1951 and
are in a minor cor-
that advance,
rection of
That jfiinor" correction/
current
from
down-move
_
},
General Motors
International
__
either
the
broad
head
correction
first
be
in
a
possible top or it
could be the first downswing in a
broad, horizontal area of correcr
or
tion, which I shall discuss later.
In either event, the up-move and
its top is not complete.
Standard
^ as not sufficient to jus¬
tify art extended bear^ correction
—down-moye—nor do we have
Oil
—
technical
decline
The ad¬
from the lows of
—
52-53
49
45
43-44
—
102
94
90
87
55
54 '
—
.
40
._
..
p.
Woolworth
T?
-+u
us
last
lows to the recent February highs
?eginrifg4w"h thf. lo« Point ,re"
corded last December the market
has
demonstrated
which
a
characteristic
never in the history of mar-
1
Ajtchison
ket movements has constituted an
important major top. By that I
34
41
.
45
■
v
'
'
177
24
———
p
"
■
"
/
—i—.
t-J
v
159
68
19
25
19
.
46
-
13
New York Central
24
21
46-48
€152
-
—
—
_
—
—
Northern Pacific
_
20
'207
50
37
32
30-32
...
26
20
64
B4
51
109
101
.
to The
Financial
&
Stearns
:
_
.
.
Chronicle)
;
-
to
The
Financial
Chronicle)
Baltimore Avenue.
,
Two With Waddell & Reed
49-50
74
—_v.
Southern Pacific
.
18-20
"200-205
*
.*
Norfolk & Western
.
49-51
236
"
Bear,
KANSAS CITY, Mo.—Harrison
M, Higley has become connected
with
McDonald, Evans & Co.,
1009
58-^60
-
52
—.
r
(Special
-
19-21
48
26
-
with
With McDonald, Evans1
:
12-13
59
"
opening
GRAND
44-46
75
j-r-
is
Gerson
Wall
National Bank Building.
23
32-33
•
57
;
■
N. Y., Chic. & St. Louis.
.
*
17
•
14-16
-
33
-
t
RAPIDS, Mich.—Les¬
ter J. Brooks has joined the staff
of King & Company, Michigan
:
156
29
1
.
(Special
•
**-,'70
,
<
'
Joins King Co. Staff
,
"
r
f
#
53
<
j
CO.
*
16
38
:
—
Union Pacific
.
■
16
—
Chesapeake & Ohio
Southern RR.
*
82
Ohio—.
Boston & Maine I..-.-
.
formerly
.
44-45
:
■
•
•
•
Street, New
York City, to engage in the se¬
curities business, Mr. Gerson was
38-
:
-
M.
at
40-41
•
38
t
Atlantic Coast. Line
Pennsylvania RR;
:
..
.
,
20 Rails:
Louisville &- Nashville-
iv^
Now let
from
f
46
December's
year.
advance
v'
Morton
offices
99
35
;;
-
47
39
■
it:::::.,
Westinghouse Electric
&
'
'
....
•
■
..
Open Office in NY
.
'
—
consider the
Jufc
this
•
my opin-
48-49
70-71
54
"
—
1
Great Northern Ry,_._..
Illinois Central
.
49
72
105
W'—
i1
Steel—.
Canadian Pacific
minor,
—
—
.
Morton Gerson to
16
24-25
'
59
.
United Aircraft
than
a
17
27
58
(Calif.)
(N. J.)
Baltimore
vance
..
55-57
80
:
Gamble_____.
the evidences of enough distribu¬
tion- to justify
anything more
within the basic uptrend.
57
.
Co.
•
33
56
The work
ic,
& Co.
"29
j:
Texas Corp.
Union Carbide
S.
32-33
associated
With
Clayton L. Wood-
formerly
was
■
Procter &
U.
34
24
•:
18
Standard Oil
could
worth is also with R. H. Johnson
58
.
Steel
that
mpve
Mixter &
69-71
37
Sears, Roebuck
This
50-51
7i
:
40
___
Distillers
the: averages "had made a
low of 242.06 and bounced up from
level.
52
John William Shea
r
National
l?51
44-45
78
Harvester
National
when
45
54
Febru-
ai7
53
■
the
is
44
54
•
.
-T
Loew's Inc.
-a
ml_ _.
___
44
51
_
Erie
very
Iy#t8, New York City, April 3,1951.
r
.
56
_
the highs recorded in February of
♦A talk by Mr. Taylor at a luncheon of
the New York Society of Security Ana-
74-75
Corn
levels or at least to another test.pf
are
,
show
-
49-50
77
•
1949
issues, purchased at and the subsequent sell-off to date,
will
53
80
_
are
which
,
60
_
of
beginning to break out
time,
U
normal six-part move.
a
Bethlehem Steel
Chrysler
Delaware ^ Hudson^...
Delaware L&ckawanna
of their base levels of accumula-
this
four
June, 1949
should continue either to higher
purchase
marginal producers and which
tion.
had
we
in
We had the uptrend from June of
In the
stock
recorded
low
.
~
20
(Special to The Financial Chronicle)
have become affiliated with Wad¬
64
49-50
;
KANSAS CITY, Mo.—Jerald R.
Jones and Ralph L. Nafziger, Jr.
-
99-100
dell &
Reed, Inc., 1012 Baltimore
Avenue.
Volume
173
Number 5002
.
.
The Commercial and Financial Chronicle
.
(1539)
lAVl
II
■
I
Hi.
■
_
H
WH3t mmmmvmm
AI)l)11f
wwmmimm
*
i
A
Redpath and Miller,
see
no
outlook.
recent
to be fearful of
reason
short-term
I
intermediate
or
willing
am
prices
average
accept
to
marking
as
the
low
of
a
tech-
normal
nical
correc-
tion.
;
.
There
are
technical
rea-
sons, based on
breadth
and
climax
rela-
lion-ships
the
Dow-
indus-
Jones
trial
average,
justify
that
<•
to
a
reversal of the
^FebruaryMarch
James F. Hughes
tion.
There
ioned
f i
i
a n c
n
a
;
logical to project a 10 to 20%
intermediate
in the
decline
experience
Past
age.
For
aver-
indicates
pres-
previous
pe-
example, it
may be of
that in 1925 it
note
inwas
nistory of the D-J average there
had
never been a year that it had
not sold below 100. This was true
but
it
utterly worthless
was
as
1925 to 1929.
Despite the fact
that the highest price the average
had ever reached prior to the end
1924
119
was
every
below
in
it
year
100,
between
in
to
it
and
159,
high
a
that
ana
had
1925
115
advanced
1919
of
Present
serve
is
that
Banks, from May
the
Re¬
to
.
April
liquidated over this period by the
weekly reporting member banks,
to
meet
an
ex-
loans
bor-
tnen
381
in
knew
that
_
_
do
declines
such
not
occur
the D-J average was selling higher
than it ever had before, were jus-
-
large segment of profes-
a
-j
progress.
There
cline
0f
will
in
_
Federal
Reserve
*
Financed
light
_
Solo
Stocks
speculative
a
advance
prices during
unpopularity
market
stock
the
periods
of
form of
in
of
stock
relative
bonds,
until
into
trouble
ran
probably
Reserve
point
Bank
whether
use
it
of
is
de-
a
holdings
securities
but
on
be
in
established.
Pvn,
j
Pr Die
,
.
in
from
surplus income by
the Treasury to reduce such hold-
ket.
No
important
volume
of
credit is being used to support the
equity price structure.
As long
the
in
when related to
Dividend payments and long-term
they
.
tsearisnness
hacl
earner
One of the fascinating problems
pie
realized
about 1951 is why so many experi- much
enced
w
market
over
the
rearmament
program
con-
the
credit
that
m
.
explana-
two
are
professional
-1
D-J
average
for the first
time
One and continued
is that the market is trying to get ievei
until
expanding prosperity.
Professional
„
maxim
that
to
m
exceeded 250
Ociooer, 1928
hold
above this
fact
important
an
that
bond
the upward trend
appear
reflecting
prices,
showed
paper
of interest rates, 53/4%
to be m a major
.
;
jn
jg^
an
,
yield of
average
bond
prices,
general
that
the
the
D-J
average
average
at
250
in
1925
for
average
stocks
Common
new.
been
have pas^
m0nths
priced below reasonable eco- SUccumb
nomic
since
values
the
of
most
time
1938.
to
the
has
to the
these
low
many
prices
as
being.normal.
Market
.
The
Dangerously High at 250.
advance
Dow-Jones
in
the
industrial
popular
average
the
to
Federal
as
A
1
ou,xl
conditions,
the
pe-
this
decline
of
inevitably forecasts
the
de-
a
marily
on
economic
tional
professional stock
attitude
it
should
be
Reserve "Banks
professional
faith
in
the
bond-
stock sequence;
the
long
case
World
as
Certainly,
now.,
Communism
as
per-
decline' in industrial
again in 1928-1929 the
market
advanced
Federal
Reserve
substan-
System,
shows that it has been possible
for the stock market to stage some
most
exciting
while
bond
speculative
prices
de-*
clined. In 1928-1929 the great popcommon stocks contribdirectly to the decline in
ularity of
uted
bond prices as many investors sold
bonds in order to participate in
the final sensational phase of the
New Era market.
prosperity
reason
*
for
investors
market.
pointed out that the D-J
prior to 1951 sold above
Federal
mediate, trend..
Joins Draper, Sears
(Special
to
The
Financial
BOSTON,^ Mass.
,
United
States.
anv
-Tn Aueust
-
Kerdok
the
important
and
Boston
-
J0;n
,
has
.
ELMIRA, N. Y.
—
Mrs. Eucile C. Sumner have
+rof
167
jn
the
D-J
industrials
the
spring
This
of
was
reducing
ernment
its
a
holdings
securities
immediate
the
urogram
of
gov-
without
any
objective
They
emphasize
been
never
a
staff
of
sales
of Rockwell-Gould
Lake
Street.
the
Co., Inc., 159*
of
■
With Coffin & Burr
(Special
to
BOSTON,
Rogerson
The
,
Financial
Mass.
—
V
This is not
an
offering of these shares for sale, or an offer to buy, or a solicitation of an offer to buy,
The offering is made only by the Prospectus. \
any
.*
accurate
and
must
not
,
York
Society
"^"curity
3> 1951.
be? taken
-
*
150,000 Shares
Mountain States Power Company
Common Stock
(Par Value $7.25 per Share)
con-
a
the
Reserve
be
accepted
as
Noting that average stock prices
historically high, that bond
prices are under pressure, and that
are
Federal
Reserve
&
of such shares.
Price $11 per
share
Prospectus
may
legally be distributed.
year
This latter statement is entirely
Chkonicle)
Charles
is with Coffin
nrivate
54
average
below the 200 level.
,
prices must
policies
dengisedZrA about
to bring
appear
an inverttory readjustment and commodity
joined
representatives
in long-term government bonds to
bond
L.
yielded
also true
when
1946
Fodoral Reserve started
0f
the
starting in the latter part of
1935
-
Gerald
rate
to 6%, the
dividend yield for a
year had
been less than $%%.
Durjng the period of boom conaverage
less than 3¥2 %.
.
Moore, Mrs. Lillian A. Mocfe, and
.rediscount
p)_j
Stock
Rockwoll-Gnulrl
foreshadowing a decline in stock
year history of prices and finally in general busithat it did not sell ness activity.
■
whole
.
nut&wcu uuuia
dealers in securities and in which the
the
J.
I
.
Reserve authorities increased
;tg
York
■>.
.
activity in the
V
when the Fed-
1929
New
Exchanges.
Copies' of the Prospectus may be obtained from either of the under¬
writers only in States in which such underwriters are qualified to act as
in
John
Draper, Sears &'
Co., 53 State Street, members of
1929
that there
Chronicle)
—
is ,with
levels below par.
On the basis
only fractions of the no- of
old-fashioned
business cycle
toriously speculative years 1928, sequences, a decline in high-grade
1930.
worry
E.
Burr,
60
State
Street,
Declining bond prices under the credit control. Thus, at the three- Incorporated,
Banking System indi- most important highs in the stock members of the Boston Stock Excated a tightening credit situation market during the past 25 years
change,
-
250; for
for
ulation, not much reason for anybody to worry about the inter-
average
and
to
National
cam-
toward
•
the Na- and advisers should keep in mind
Two boom the fact that when investors are
by the Federal not worried about the major trend
have
added
to of the market, there is, under reg-
In 1919 and
to
opinion to
.
under-
era.
episodes
be much chance of
its
capitalistic
•
to
of
sequences
Banking
control
be
connection
advances
write
continues
about the major trend of the stock,
the virtually automatic market; * And professional traders
because the bond market declined,
of
Russia
sev-
<
.
cline in stock prices is based pri-
sists in its fanatic hostility to Capitalism there does not appear to
the
it
.
bond: several years there should be little
in
emphasized that the stock market
|n the past did not decline just
stock
eral months.
.
Stock
...
Reserve's
professional
pessimistic
If, under
threat
of a
serious decline in business can ba
deferred for a considerable
-1
opinion that the market is danger- policies
have
been
associated
ously high.
Many commentators rather dramatically with a decline
have
iX1
cash basis.
de-
prob-
had considerable influence, in
to .verting
its best level in 20 years has also
contributed
a
paign against credit inflation has
'
The
these
„„„„„
on
cnne that professional speculative
Underpricing of com- opinion has insisted
upon
has persisted for so ahie.
years that most people close
market have come to regard
Credit Control and the
stocks
mon
„„„„
largely
—
the
refused
intermediate
to
-
commodity prices, wages and in- was
relatively high whereas in
terest rates, good common stocks 1951
at 250 it is relatively low.
are
selling
at abnormally
low This fact
undoubtedly helps to exlevels. .Unfortunately .this is nothp]ain why the
ing
equities
vulnerable technical posi-
-
,
when
Experienced professionals, who finally got back to a
price of 250
know something about the back- fbe
dividend
yield
was
6!4%;
ground of the averages, realize high-grade
corporate bonds
rethey are historically high.
This turned 2.70% and the rate on
makes
for
caution
despite the commercial paper was 2%. It is
fact that in relation to earnings,
obvious from the above statistics
dividends,
a
tion, particularly in view of the
fact that trading in such issues is
/
acceptance
a
skep-
Octooer, 1929. Luring
historical these 12 months the dividend
yield
price range that has been mam- aVeraged less than 3V2%.
Over
tained for 20 years. A second ex- this same
period high-grade corplanation is the Federal Reserve s p0rate bonds provided a return of
campaign against credit inflation 4.80% and relatively risk less
which has helped dramatize the
prime
4-6
months
commercial
of
out
jn
der
plausible.
appear
of
number
a
difficult for lead-
investment-grade
campaign of the
tially despite a# declining trend in
1925, .than there was ifi bond prices. • Past experience, W
,n
trouble
There
months.
tions
-„»,.«
for
in
Not too many peothis and there was
more
have
been ticism
the stock
in the Stock 1929.
the past two to six
The
professionals
.
looking
t>een
years.
lower than
were
a
an
tinues in force, it is doubtful that
1925,
interest rates,
"
prnfp«iftri1i
,nm
prices
,
more
industrial
uncertain, prices
and 1937.
1937, 1946 and 1948 were
jng
get
Under the Federal Reserve Systern it has been possible to finance
liquidated in order to finance the
government
this
1
for 1929,
Struggle Between Market Regula¬
it is much
_
In these two previous episodes,
Fed-; 1929 and 1937
liiG' slock market
eral Reserve will be permitted to
was
relatively' very much higher.
sional traders and advisers is con- tified in thinking that the stock
bring about business' depressions
than ij. jg
jgg! and major de¬
fidently expecting it. There was market was at a record high. How- similar to those that followed the
clines in industrial activity were
ho large
chorus of professional ever, they were handicapped if restrictive operations of 1920, 1929
more
imminent than is likely to
pessimists when the average highs they did not also know that stock
that
when
yield of 6.45%.
from
commercial
and
for
be recorded within
in
be
as
who
divi-
a
important decline riod, as was the case from 1942 to*
activity. Under the 1946, the regulated market can
It
represents an extremely un- National
Banking
System
both finally achieve over k' period of
orthodox activity by the Federal stocks and
bonds declined during several
years,
satisfactory price
Reserve at a time when a credit periods of business
prosperity' be- increases that in the old free marcontrol campaign is supposed to caune loans on securities .were
ket could
sold
until September 1931.
1925
the D-J industrials showed
Under the National Bank-
rowers.
Situation
jngs must of necessity exert any
ranged direct pressure on the stock mar-
1929 and did not drop below 100
People in
order
demand
industrial
_
situation
present
a
guide to the market's performance
trom
in
panding
One important difference in the
In interpreting
possible
to
proclaim
with
emphatic finality that in the whole
m
Under these conditions it doesn't
seem
market.' brokers
ceeded the amount of investments
terest to
banks
^
fu-
on
growth:
relationships
1
substantially higher
prices for the D-J average.
with
14, 1950
4, 1951, increased their
mam
static;
allowance must
be
holdings of U. S. Treasury securmade for the factors of change and ities
by $5,623,000,000.
This ex-
or
justify
situation
Differences in
past mstory,
however,- it should
be recalled that things do not re-
old-fash-
are
that
reac-
ture probabilities.
commercial
tion and Duration of Military
ing System, declining bond prices
Program
reflected the existence .of a credit
Under
Government
regulation
ever,
there are aspects of the
stringency that first affected the of speculation it is undoubtedly
present situation which make it prices of
securities, both bonds more difficult for stocks within a
drastically different from previous and stocks, and
ultimately forced short period of time to capitalize
episodes of credit control by the an
important decline in general substantial increases in
earnings
Federal Reserve.
11—;
a-ubusiness activity.
and dividends. As a result of this
lightly.
Knowledge of the
past frequently is helpful in providing a realistic perspective on
and
the stock
comparison of the
riods of boom control by the Feda bearish conelusion appear inevitable.
How-
too
the present situation
forced
eral Reserve makes
Despite professionals' current bearishness on grounds of past
performance and Federal Reserve deflation efforts, Mr. Hugjies
cites counteracting factors making for higher prices both over
the intermediate and long-term trends.
I
casual
ent
Members New York Stock Exchange
:
decline in
tant
By JAMES F. HUGHES*
the
which
would seem t0 be t0 sel1 their own investment hold- dend
yield that averaged only a
justified in forecasting an import
ings and to call loans made to little more than half of the recent
VWVMfl
Market Analyst, Auchincloss,
decline, professional traders
price
11
Blyth & Co., Inc.
April 12,1951.
Dean Witter & Go.
12
The Commercial and Financial Chronicle
(1540)
exports
as
What About Out Loss
nese
months
Of Russian
Manganese?
before
arrivals
no
into
U.
S,
Soviet
its
of
of
manganese
ports
after
"Dubrovka"
steamer
loaded
Office of International Trade,
outbreak
the
Russian-German hostilities. There
were
ore
By L. M. HERMAN*
Chief, U. S. S. R. Section,
States
United
the
to
concerned, Russian manga¬
disappeared
some
nine
were
the
un¬
in
ganese
their
Soviet
dependent
own
possessions.
result, the United States,
overseas
As
a
Thursday, April 12, 1951
.
foreign
need to find
modity
with
much
larger share of world
manganese
imports than before
the war, namely 66% in 1947, as
trade
by
confronted
were
with its high postwar level of in¬
dustrial production, accounted for
a
.
.
in
urgent
strategic com¬
some
their
which
authorities
an
export, complex
retaliate
to
against
the stringent U. S. export controls
vis-a-vis
Eastern
Europe intro¬
duced
March
in
of
that
year.
Baltimore in compared with 29% in 1937.1 To Manganese ore easily qualified as
October, 1940. It was during the make matters worse, from the the chosen instrument, and a de¬
same
period, according to
the Soviet point of view, strong com¬ cision to reduce its export was
evidence Of German trade statis¬ petition from India, South Africa, evidently reached in December,
Noting bulk of U. S. consumption of manganese previously
came from Russia, and, since end of 1948, this supply has been
tics, that Russia was shipping a and Brazil had to be encountered 1948, characteristically several
steadily rising volume of ore to everywhere, including the cur¬ weeks after the contracts for 1949
curtailed, Mr. Herman explains reasons why Russia's embargo
Hitler's Reich in compliance with tailed European market, while in deliveries had already been signed
has failed to effect any diminution in supply of manganese ore
the provisions of their bilateral the United States ore from these with U. S, importers.
The only
avaiibaie for U. S. Steel industry. Contends Russia's embargo
trade agreement of Aug. 19, 1939. competitive sources was allegedly official
explanation
offered
on
For the first six months of 1941, being offered at prices "substan¬ that occasion by the Soviet export
on
manganese shipments was merely effort to inflict short-term
for example,
below
published
Germany reported tially
quota¬ agency, expressed in terse, gen¬
hardship on our steel industry, since no substantial substitute
an
import of 142,000 metric tons tions."2 Another unfavorable ele¬ eral, terms, was to the effect that
market for the ore is available to her.
of Russian manganese, a substan¬ ment in the situation, according increased domestic demand would
tial increase over the 65,000 tons to the same Soviet survey (Feb¬ make
it impossible
during the
The strong commercial ties that total United States imports
imported during the entire year ruary, 1947) was the steady ac¬ forthcoming year to deliver the
existed
until
recently
between reached a record high of 1,723,000
cumulation of manganese stocks previously contracted amounts of
of 1940 and 6,219 tons in 1939.
the American steel industry and long tons of manganese ore.
With
Russian
supplies
com¬ in the United States, reported at ore to the United States market.
manganese ore of Russian origin
The remarkably painless adjust¬
pletely out of the picture, the 1.8 million tons as of the end of The reduction actually carried out
date back to
ment of United States industry to
was
high
wartime
requirements
of 1946.
by more than 80%, namely
the 1880s, the
the withdrawal of a major sup¬ U.
The
S.
importance of the U. S. from 385,000 tons in 1948 to 73,000
industry for manganese,
decade
in
plier of manganese ore during a standing at roughly double jtheir market to the disposal of the tons the
following year,,
which
Russia
period of rapidly expanding steel prewar level, were met by greatly Soviet
manganese
I
surplus,
al¬
Concurrently, the Soviet foreign
began
largeproduction, and in the absence of expanded imports from such hemi¬ though implied rather than stated
trade ministry took steps to ex¬
scale
mining
special
legislative authority to sphere sources as Cuba and Brazil in the article cited above, was
punge from the record the analr
of
this vital,
finance
uneconomic
production and from India. Two other major amply confirmed in practice by
ysis of world market conditions
steel
condi¬
and
prices, clearly attests to a world producers, the Gold Coast the conspicuous effort which Rus¬
made in its own publication in
tioning
min¬
serious misreading on the part of and the Union of South
Agrica, sia's trading agencies made to
February, 1947, because of the
eral.
Except
Soviet economic strategists of the divided their
output between the keep this market well supplied. latter's
for two inter¬
emphasis on the impor¬
relevant factors involved in the United
States
and
the
United Imports of Russian manganese in¬
tance of the U. S. to the future
ruptions
in¬
over-all supply and. demand situ¬
to the United States in 1947 ex¬
Kingdom. (Table 3.)
of Soviet maganese exports.
duced by the
A
ation of a strategic commodity in
In March, 1945, when the Black ceeded the 1946 volume by 80,000 substitute
two
World
survey
of the world
which the United States and Rus¬
and
expanded by another
Sea was reopened for traffic, Rus¬ tons
manganese situation was accord¬
Wars, when
sia play prominent roles, respec¬
1948 to reach a
sian ore once more began to move 90,000 tons in
the Black Sea
ingly produced for the December,
tively, as consumer and supplier. toward United States
total of 385,000 long tons.
ports. With¬
was
under
1948, issue of "Vneshnyaya Tor¬
L. M. Herman
In the course of 1948, however,
in the remaining nine months of
Reasons for Russian Embargo
military
govlya,'' entitled hopefully "An¬
that year we imported as much
glo-American
Contradictions
in
blockade, the
It may be of interest, therefore,
1 "U. S.
Supplies of Strategic Manga¬
ore
as
in full year 1939, namely
the Manganese Market." Couched
flow of the Russian ore to United to review here some of the
nese
Show
Upward
Trend
in
perti¬
1949,"
135,000 long tons. Once resumed, Foreign Commerce Weekly, May 1, 1950. in familiar and mostly irrelevant
States
shores was a permanent nent facts
leading to the Soviet
2 "World Market for Manganese Ore" Marxist terminology, and
feature
of
the
commodity ex¬ decision to cut its export of man¬ the volume of manganese imports
con(in
Russian),
Vneshnyaya
Torgovlya,
change between the two countries. ganese to this country by 85%, from the Soviet Union rose stead¬ February, 1947.
Continued on page 25
ily during the next four years.
The United States, as the world's and to
assess, as far as possible,
largest producer of steel, was also Russia's prospects for finding new (Table 1.) Inevitably, with Rus¬
TABLE I
sia's return to the United States
Russia's best customer for man¬ outlets to
compensate for the loss
U. S. Imports (General) of Manganese Ore, 1944-1950,
market and the end of premium
„
U.
at
cargo
S. Department of Commerce
•
(
-
-
_
ganese, taking for example, 31.2%
of all such ore exported from that
country during the last five-year
period for which official Soviet
trade
statistics ? are
available
.
(1934-38).
I
;
^
substantial
the
of
market for
United
manganese
States
prices obtainable during the
ore.
Marketing Areas
<
Before World II,
of
surplus
the exportable
manganese
Total and From the U.S.S.R.
war,
(In
supplies from some of our most
dependable wartime sources fell
pro¬
ore
off
sharply. Cuba became a rela¬
tively unimportant source after
its'Active deposits were exhausted
in the process of supplying the
United States steel industry dur¬
ing the war. In the case of sev¬
eral other large suppliers, tempo¬
rary
transportation
difficulties
Total Volume
1944
the
end
of
1948,
how¬
ever, the official Moscow agency
concerned with the export of raw
m
aterials
(Soyuzpromexport)
hand, was a fairly tion of manganese ore during the
consistent major marketing area, immediate postwar years had be¬
taking, on the average, nearly come permanently expanded un¬
other
the
on
one-third
of
all
manganese
ex¬
der the stimulus of United States
principal ported from Russia during the
American importers, through last five years for which official
routine channels, a laconic mes¬ Soviet export data are available.
From the standpoint of foreign
sage to the effect that only token
Shipments
of
manganese
ore exchange
earnings,
manganese
would be available for delivery to ranked among the leading halfthe United States during the fol¬ dozen Soviet export commodi¬
lowing year. The systematic re¬ ties. It accounted for roughly 3%,
wartime demand.
duction in the arrival of manga¬
Moreover,
communicated
to
the
of
number
Conversely, the
consumer-nations had
1,305
135
10.3
216
13.8
1,377
1,124
295
21.4
385
34.3
1949
1,379
73
5.3
1950
1.723
59
3.4
x
1947
1948
TABLE
Exports of Manganese Ore
Totals and
%
the
From
tJnited
jiowever,
1934-38,
Principal Destinations
1,000 Metric Tons)
1035
1036
1037
1033
411
132
138
243
391
169
120
132
98
153
156
no
Belgium
Italy
76
123
24
60
83
57
37
45
30
41
United
65
5
15
7
14
2
61
Country of Destination:
United
States
France
_
1034
1929
_
_
Kingdom
35
—
—
—
Germany
48
200
236
2
61
Poland
40
22
42
41
55
16
and
Sweden
2
6
6
6
n.d.
n.d.
21
26
78
27
-12
15
21
Japan.
Western
In
Europe,
too, steel production remained for
some
years
below
at
least
levels.
prewar
two
western
Czechoslovakia
7
16
22
Norway
Netherlands
—
6
—
n.d.—No
—
12
6
—
15
n.d.
606
645
n.d.
1,001
446
6
737
1,037
data.
NOTE—Through
1938, totals
from
—
43
TOTAL
are
.
6
111
Japan
are
1936,
all
data
are
from Soviet
for 1937 and
figures (boldface)
sources;
of Soviet origin, while country distribution
statistics of listed countries.
national
^
of the course, at a higher ratio. In Rus¬
sia's trade with the United States,
supply
position,
for example, dollar earnings real¬
became evident by
standpoint
it
drawal of Russia from our mar¬
ket, which to Soviet authorities
fnust have appeared to hold strong
possibilities for economic
Jn the cold
war,
ized from
ore
TABLE III
had failed to
dise sold here in
available
for
the
normal
was
opera¬
tions of our steel mills.
1937.
the
outbreak
under
of
channels
of
German
occupation
during the early phase of the war.
I
*The' opinions expressed by Mr. Her¬
man in this article are entirely his own
ijand do not necessarily reflect those of the
gtffice of International Trade of the U. S.
Department of Commerce.
.
^
control
Black
tion
over
Sea.
in
the
India
U.S.S.R.
by
Country
Origin,
of
Africa
Brazil
255
78
484
26
166
127
627
90
135
243
43
1,294
216
179
241
222
1,395
1,186
1,276
443
—
1942
—
1943—
1944
—
1946.
___
1947
1948
1949
1950
—
2
4
131
3
238
1
106
131
—.
—.
'
—
—
514
1
387
261
244
17
120
248
191
139
t— "
114
-»
case
of
transporta¬
this
ore
has
always been both costly and in¬
convenient. It may be of interest
to note, incidentally, that as far
•Data
include
tlmports
1 Less
for
than
283
83
189
7
—
4
36
§50
§92
-
58
9
9
26
199
-T
152
152
26
417
4
74
178
135
244
252
111
262
82
41
1,562
1,377
332
216
314
143
252
142
134
27
376
295
172
164
222
51
39
51
7
1,124
1,379
1,723
188
385
119
128
194
30
10
55
15
316
55
7
424
87
8
*
metallurgical,
consumption;
500
—
17
68
—
Other
123
1,305
1,034
1945
322
v
Mexico
Chile
Cuba
30
——
t—
—
383
73
332
565
59
293
135
"
116
.
53
'
35
the west coast of the
Overland
1937-1949
Un. of South
Coast
384
1941
came
States,
70
II, Russian manganese, as
expected, disappeared from
the
United
912
tl939——_
Jrom all sources, increased appre¬
Shortly
thereafter,
the
water
ciably in 1949, rising to 1,379,000
route for Chiatura
ore
(to the
Jong tons, as compared
with
extent that it could be spared for
1,124,000 in 1948. During the fol¬
lowing year^ in/1950, when Russia export) w?ts blocked by German
^supplied only 59,000 tons of ore,
Total
1940
in
the
Gold
Year:
World
circulation
Into
(Gross Weight in Thousands of Long Tons)
fl938
In fact,
Instead of declining, total United foreign trade. The Nikopol mines
States receipts of manganese ore,
Imported
il937—
Wartime Interruption
With
Ore
manganese
about 15% of
for
the total value of Soviet merchan¬
pressure
♦Manganese
the sale of
accounted
pffect any diminution of the ag¬
War
gregate volume of manganese ore
»
II
From the U.S.S.R.,
States
|nid-1949 that this virtual with¬
JSW.'iHI
(In
>
contracted, owing to the slump in
industrial
activity
in
Germany
value, of total exports (ap¬
nese cargoes from Russia began
proximately-equal in importance European countries that were for¬
during the first months of 1949, to, say, tobacco as a U. S. export merly of some importance as out¬
Earnings
in western lets for the
£nd during the year as a whole product).
U.S.S.R., namely the
pnly 73,000 long tons of ore ar¬ currencies,
always
required
to
United Kingdom and France, had
rived in United States ports, as fulfill the essential portion of the
fcompared with 385,000 in 1948.
Soviet import program, were, of developed ample sources of man¬
by
of Total Volume
1,562
—
1946
<
Toward
Percent
From the U.S.S.R.
1,034
1945
Similarly, so long as Russia ex¬ duced by the U.S.S.R. found its
ported in response to existing market in the industrialized coun¬
market
demand,
a
substantial tries of Europe and, overseas, in
United
States
and
share of annual United States con¬ the
Japan.
sumption of
manganese
(some France, Germany, and Belgium,
90% of which has to come from among the European nations, ab¬
loomed up as an obstacle to main¬
foreign sources) came from Rus¬ sorbed a sizable proportion of the
sian mines. In 1948, for example, total, although, as may be seen taining a high level of exports to
the United States.
Russia supplied 34.3% of the total from
Table
II, this trade was
On
the
volume of manganese imported characterized
whole, however, the
by
considerable
into this country from abroad.
fluctuation.
The
United
States, volume of available world produc¬
•
Thousands of Long Tons)
Volume
Year:
battery, and chemical grade ores containing 35%
subsequent years, general imports.
,,
Work/manganese,
r-vi
.i r#
1
tons.
the Philippines, the Netherlands Indies, and the Belgian Congo.
HPrincipally the Philippines, Angola, and the Belgian Congo.
••Principally
the Philippines, Egypt, Angola, Belgian Congo, and French Morocco.
Sotzrce:
Bureau of the Census, U. S. Department of Commerce.
1
-
,,,
.
>
? Principally
,
10
"
2
1125*
**138
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
13
(1541)
Chapter in Treasury
Security Market
Aubrey
G.
Lanston
&
essential
bond-market expert,
commenting
recent
control of bond market is still essential,
some
be expected to
definite
but
Events
the
in
of
recent
weeks
mark
The
nonmarketable
but
salable
2%%
for
bond
the
which
exchange
was
ingen¬
instru¬
ment
with
which to facil¬
itate
com-
a
promise of
Treasury
and
Federal
Re¬
views.
serve
This
security,
however, adds
to
more
one
list
the
0
f
hybrid Treas¬
issues. We have too many of
ury
obvious
One
about
free
"a
have
have
wider
for Treas¬
point
is,
This
is
understand
jective
traditional
be
handsome
return
a
2%%
on
is so
Treasury
.•
You
that
.
can
are
we
market to date have arisen from a
of
a
security that to obtain it the in¬
vestor should be forced to
bond
a
wound
so
in
up
accept
unusual
Par
support has truly gone with
the wind.
In going it took the
wind out of many sails, since the
market was not prepared for its
abrupt departure.
have
The
move
wholly desirable,
was
se
yet
determine
to
the
is
manent
shock
but
how
to
per
we
per¬
investor
psychology. For the moment we
can
only be sure that it is too
early to pass judgment.
A
stride
real
a
the
on
has
been
made
at times
react
that Federal officials do
in a way that these
way
not
like
or
officials do not expect. In the last
two
weeks,
maintaining
Treasury
the guise of
orderly market for
under
an
restricted
bonds,
Reserve
seemingly
Federal
provisions.
will
the
gizing into destructive action the
blundering force of a tremendous
privately held public debt.
On
this
score,
the
find
we
testimony
Committee
the
Board
working
that
them
Federal
and
officials
have
set
relationship
will
Re¬
; up
a
regular
end
that
and
points of view of both sides
may
to
constant,
the
the
security
markets.
the
problem
".
how
.
.
nominal
bids
for
number
a
He evidenced some concern about
the problems involved in
bids blocked out customer buying
ing
and
Treasury securities beginning this
on
made
not
were
good by the Federal to the
extent
of
the
when
even
occasions
many
offered
amounts
these
not
were
large.
Techniques of this type breed dis¬
trust of a market, and the Federal
should
recognize
vestors
cannot
that
make
when
in¬
out of
sense
This
has
$39
June.
billion
When
believed
of
market in the ten weeks
the
closing
of
the
it may
Let
clues
the
what
to
as
Federal
to
find
the
some
attitude
real gain.
for
future
the
of
interest
those
•
primary interest is in the
bond
in
rates
facets
market,
general,
the
of
and
economy
These two stray bits of
Annual
Report
Federal
and
that
importantly bear on these
things. I probably should admit
right-now that I do not have the
answers
that
to many of the questions
have
you
points
some
in
of
mind.
view,
I
and
have
that's
about all.
inventories
with
us.
How far
a
free
market,
experiment. The object
of this experiment is
traditional
struments such
market
open
as
to ascertain
monetary in¬
Federal Reserve
operation^
be
can
used
effectively as an auxiliary
to fight inflation under
existing conditions without un¬
weapon
duly disrupting the willingness of
investors
to
buy
and
to
hold
Treasury securities. It is clear,,that
this
experiment
opens
up
dangers. Everyone knows, for
*
An address
Savings
the
on
evidence,
the
such
these in
as
our
can
tion
in
the
that
those
for
of
the
situa¬
of
middle
time
of
the
1930's.
capital
credit
and
still
"in
were
for
go
a
of
reserves
system
tutions
term
was
prac¬
the
red," the
the
banking
above $2 billion, in-
funds
of
non-bank
piling
were
digious
and
institu¬
institutional port¬
some
were
vestible
earnings
financial
quite low. The demand
were
folios
bank
other
tically nil,
at
up
rate, the yield
Treasury
insti¬
a
securities
pro¬
short-
on
such
as
bills
was
virually zero, and the
long-term rate was made by a
2%% bond partially exempt from
Federal
at
and
the attitude
was
nonbank
of
at
t^hat
investors
the
in
During
the
yield
mum
their
than
Treasury
funds
accept
securities.
-
in
cash
long-term
Why?
Be¬
they believed the
of
would
long-term
probable
bond prices
be/ downward,
interest
move
higher, and the
rates would
of
movement
market
then
sufficient
lower
to
in
the
existent
them
pay
free
would
to
be
await
prices and higher yields.
it
As
and
the
rules
of
from
earlier
two
respects.
the
bonds
of
area
maxi¬
game
were
periods
the guaran¬
for 2 V2 % Treas¬
severely
limited
fluctuation
in
This
liquidation
have
the
guaranteed
Sec¬
floor
of
the
to be such
bought
ideal temporary in¬
an
vestment
that
nearly everyone
in
preference/to
them
short-term
private
securities, both when
investments
available
deemed
and
be
to
were
when
unattractive
Situation Is
How
Now,
,
in
situation
what
bas.ed
Changing/;
does this
changing?
way
be
to
seem
have
turned
out
the
rank
and
degree
are we returning
swings in the returns
private credits and
Treasury securities?
•
to
wider
,
next step let us look
at the potential demand
for money from the private sectors
of the economy.
The demand for
capital and credit remains strong.
Regulations W and X will cut
down
of the
some
to
in
produce
interest
declining
a
the volume of such
rates, although
buying net was
almost
the private de¬
as
small
as
mand for credit.
Gradually, how¬
demand, and
Banks'
real,
ex¬
by Mr. Lanston before the
Association
of
Connecti¬
cut, New Haven, Conn., April 10, 1951.
me
quickly
the
jump
this
over
by saying
that
inventory loans, if ft
takes place, will do the same.
On
the other hand, V loans that have
approved
but
not
lion, and the defense
the
meringue
on
estimates
equipment
expan¬
sion for 1951 will total $24
billion,
a
new
high.
,
investable funds of nonbank lendrers
yields lower than they had ever
dreamed of accepting. The finan¬
cing framework for World War II
banks
was
and
I
a
coup
am
about
am
not
in
not
to
de grace.
predicting that
return
of mind
to
the
we
are
investor
of the
1930's, but I
wondering whether we might
see
sentiment
that direction
shift
somewhat
insofar
as
committed
are
months
ahead* and
may
be
both
for
less
less able to lend.
tion
the
of
versus
the
demand
solved
terms
in
long-
for
money
of
funds,
bound to be re¬
seems
rates .for
willing
The equa¬
availability
therefore,
some
commercial
of
private
higher
money
borrowers. uJn
Continued
on
page
announcement is not to
be construed
as an
offer to sell or as an offer to buy the securities
offering is made only by the Prospectus.
320,000 Shares
up
been
Warner-Hudnut, Inc.
Common Stock
Par Value $1 per share
can blow
of it away or scrape all of it
but
the
lemon
pie
is
That is the situation
to
the
in the
be
Price
basic
with
us
still
for
These
at
least
off,
in states in which
securities
the
York
Annual
Reserve
released
March 9,
".
.
legally be distributed.
year
or
Restraint Policy
wpuld like to quote
Federal
tem
and in which the Prospectus moty
forces
apt to
are
a
may be obtained from the undersigned only
the undersigned are qualified to act as dealers in
F. EBERSTADT & CO. INC.
Credit
I
share
Copies of the Prospectus
there.
more.
from
per
part
with respect
inflationary
economy.
$19.75
lemon-
meringue pie. You
.
Bank
under
of
of
Federal
had,
and
HEMPHILL, NOYES, GRAIIAM, PARSONS&GO.
WO.Gf;
New
date
Reserve
will
IIORNBLOWER & WEEKS
the
Sys¬
have,
PAINE, WEBBER, JACKSON & CURTIS
of
1951:
the
has
a passage
Report
no
<■.*1 vf
-Y'-h
April 11, 1951.
/,/
Against this is the fact that the
matter
a
is
The De¬
at
inventory picture is something
like
bil¬
program
just getting into swing.
partment of Commerce
that plant and
made,
of $1
excess
the mass of investors were
pulled into long-term investments
ever,
believe
I
a
reduction in
already total in
market
.
the
As
quickly
been
day were
Enough buyers-were con¬
in the longer-term« bond
herein mentioned. The
time
not
were
/
relative yields.
upon
....
they
pipelines to
Consumers
for
2%% Treasury bonds caused them
of
piled
the
yields
the
of private long-term credits.
ond,
in
First,
teed floor of par
ury
ten
or
2 M> %
a
changed
wrong.
trend;
short
obtaining,
Treasury securities,
on
file of investors of that
stantly
prefer
a
nine
past
have .had
left
area
of
a
are
available from
rather
trend
for
hope
They wanted to buy little
securities, and
except short-term
cause
will
return
no
In what
time?
many
can
over
long-term investments.
bank
investors
rates
fluctuate
later date, a higher return for
a
income taxes.
What
state
equa¬
you
even
organization,
reminded
accept
years, we
questions
over
when
period
down will a free
before prices' come to
pondered
were
At
to
-
we
interest
to
sufficiently wide range, there
far
go
long-term
expected
times
the longer
Experience of the '30's
New
Martin's
If
be
we
rest?
heading
are
several
Let
closing of the exchange on
the 2%s is rather like completing
the setting up of the equipment
whether
market
get from
we
history is this:
restrain¬
a
over
I
as
contemplated.
The
new
how
has surpassed expectations, partly
because the swing-over to defense
Dangers
a
we
that
end
one
other.
the
ing credit policy
by
step
production has been slower than
Experiment Opens Up New
for
of
for
buying sprees and for
being they should be
reasonably well bought up. Our
ability to produce peacetime goods
on
with the threat of
are
as
The lesson that
can.
it
simple
as
might be toward the
necessitous
from
free
following
Mr.
faced
take
it
interim dip which will arise
an
from
the
circumstances,
shall
of
This
a
he
2%s, he replied that it was his
hope that this could be the case.
tion
continue.
us
try first
Some believe that
is
a
books
strong inflationary forces at work.
Your
have
fre¬
quently during recent months, and testimony, just about set the
velopment of policies and methods.
detailed
whether
asked
could
we
refund¬
marketable
happened
economy and credit over the next
few
months
or
year.
We have
the
in
you
re¬
de¬
be considered
He
with
of! issues of restricted bonds. These
between
be
wealth of expe¬
a
get as
much for your money as'possible
in terms of restraining inflation
without creating a
psychology of
curities.
Treasury
in
follows:
credit
serve
Chairman
which the Treasury and the Fed¬
eral
have
been
struggling
as
the
that
Senate
a
new
of
Martin has had
York
appears
before
by the
clues in
some
Governors, Wil¬
liam McChesney Martin, Jr.
Mr.
what they see in the market they
It
as
This
how credit restraint can be
applied effectively without ener¬
resolve their doubts by selling se¬
management.
old
as
is,
achieving a sound and co¬
operative approach to debt and
toward
almost
is
^despair and disaster in,,,markets
quired recognized dealers to main¬ tha,t cannot be rebuilt quickly."
tain
such
,
the Federal Reserve System.
if
greater than average
percentage of the credit need? in
excess
right off the bat,
still bumping into a
keep
a
as
redis¬
see,
dilemma that
in
such,
the
tions.
rience
that
by
the
characterized
said
out
in
about the market and to recognize
be
ob¬
I
step and
not minus in this respect,
commercial
banks
thereby
tions
may
funds,
plicated.
are
re¬
an
carried
instruments
that
can
such
uncommitted
meet with
we
goal of
requirements,
reserve
offerings of this type
be strongly resisted
by all classes of investors. It hard¬
bit
a
It is difficult
.
how
could
additional
ly
the
be the explanation.
to
will run into a far
financial econ¬
omy than is good for the country.
A number of things could bring
us
to such a pass. Among them
would be an unskillful handling
of the market. Indeed, I will go
so
far as to say that some good
chunk of the problems that have
faced us in the Treasury security
investors
however,
voluntary restraint of credit,
part of the Federal to be realistic
will
they
As
it is to be hoped that
bond
Normally,
through
restraint
count rate, or open market opera¬
unwillingness
a
few
run,
period.
mean
them, and
of
in¬
some
can
or we
stubborn
for
we
regimented
more
less continu¬
or
market,
must have limits to these fluc¬
tuations,
that the Federal
stricting credit "to essential pur¬
poses."
Regulations W and X,
together with the program for the
prices of Treasury securities, but
we
made,
We
fluctuations
of
and
misleading.
is
freer
a
talk
the
market"
securities
to
and thereby
This is so
of
most
correctly
more
future
unclear.
cum¬
-Vu
strong demand for term Treasury securities are cohcapital exists in the cerned. A worthwhile
analysis of
prospective deficit and this subject is bound to be com¬
a
and
refunding, when non-bank
lending institutions- as a group
command.
free
become
economy.
that
and
face
market operations and every
other instrument at the Federal's
public debt in¬
cannot
the
wreck
•can
an
of
fall where they may
ury
ious
large
the
mass
struments
closed
just
that
bersome
have
books
Aubrey G. Lanston
ample,
credit
open
and
beginning of a new chapter
the Treasury security market.
is
restraint
this would
uncertainty as to who, aside from
Treasury, will buy Treasury securities
acquire higher-yielding private credits.
sold to
stop infla¬
statement of in¬
assume
credit
ous
expresses
Reserve
pie
will aim at
policy cannot ignore prevail¬
ing investment sentiment. Foresees further advance in private
lending rates, but
clear
a
could
we
Federal Reserve support
Federal
while, when
have
meringue
new
Points out
warns
as
tent. If my analogy to the lemon-
ex¬
Treasury 2%% bonds for outstanding 2^2%
issues, says a new Treasury "hybrid" has been thus produced
and new dangers have been opened up by the experiment.
change of
long
as
tion, but it must play its part."
Inc.
on
purposes,
best
of credit
use
large
This is
Government
its
exert
strains the productive capacity of
the country. Credit restraint alone
cannot
Co.,
to
expansion of the defense program
By AUBREY G. LANSTON*
President,
but
effort to restrict the
to
-
■
alternative
A New
vlrio
.
HiV
38
14
The Commercial and, Financial Chronicle
(1542)
Index
the role of direct
looked over
on
as
questions
erally
to
put
found
us,
that
most
gen¬
of
We
the
/'Have
you
st°Pped
beating
your
wife?"
va¬
on
feel that
we
entering
are
we
Mr.
DiSalle
with pride to the fact
a
achieve
period
where we can
some price stability.
lived
found
second
a
liked
have
would
continued
to
frank
"bureaucrat"
was
cede that
recent
our
weakness
to
con¬
if
not
good
a
many
people
mone-
those
by
on
controls.
then
up,
feel
We
it would
cal
the general
freeze action that was
taken Jan. 26, 1951, was a psycho¬
logical move directed to combat
to
*
difficulties, Mr, DiSalle refused
comment
farm
of
price
in other periods of
do
hot
scribe
-kind
Michael V. DiSalle
we
Sub¬
to
at
of
all.
We
had
have
experience A to draw
upon in World War II, and also
an
controls
in
an
I
7^77,.
,
Psychology Rather Than
creases
feel
factors
need
that
laying
of
Korea, the
basis for the
the
controls
we
have
that.
than
since
direct
1950,
history.
had
been
much
said
I
in
the
July
was
were
largely psychological, possibly
psychological than economic
in
fact.
People,
remembering
'controls during World War II, on
.June 26 immediately started buy¬
ing in anticipation of controls, in
anticipation of scarcities, in an¬
ticipation of higher prices.
.more
In
fact.
think
I
History
-
shows
applied
(
.
ward
to
a
controls
period
might
remarks,
proposition,
it
or August of 1946, in
month we had an in¬
.
Although
we had a period pos¬
sibly when the Korean situation
.was developing a little favorably
.that we might have looked for¬
,
opening
every question seems to be in¬
terlarded
around
that
general
more
of this "all-star"
features
question we will leave for
questions, because, as ing.
the specific
an
of
»
stock, at $19.75 per
share. The offering was oversub-?
scribed and the books closed.
;
common
<
.
■
shares
A Of the offering, 185,000
sold for the account
of the
were
♦
the remaining 135,-r
,000 shares for the account of the
.company and
7
stockholder t,
who will continue to own 58% of A
gather¬ the outstanding stock. Proceeds of 7
principal
company's
This was reflected in the the shares sold
view expressed by Professor Vir.er .account will be
that the popular demand for di¬ treasury funds
rect controls is such that we have 400,000 of bank
for the company's A
used together with
j
reduce its $5,^ 7
loans to $2,000,006.
This $2,000,000 balance will be re'- •(.
paid with the proceeds of a ne\y 7
jive-year term loan the terms of
which provide that the company 4
may borrow an additional $3,000/- j
000 at any time prior to Dec. 31*, 'y
to
give them to the public whether
they want them or no*,—adding
that a monthly income tax return
that one
Edward
might be the optimum way to fill
back in the 13th century some¬
crease of 7.9, and in a five-month
the strategic bill of making the
period in 1946, after the scrapping time, and the Continental Con¬
population feel uncomfortable.
of OPA controls, we had an in¬ gress tried it in 1776, and although
,1952., .y/ ;A:;\:v; AA.'7,. Wf'-l
Most of the psychology-slanted
I have never paid too much at¬
crease of 19 points in the cost of
Warner-Hudnut, Inc.
and
its
observations were furnished by
tention* to what success accom¬
living.
the non-professional economists in subsidiaries manufacture and sell |
I have
> From the beginning of the con¬ panied those programs,
{
attendance. Thus an industrialist, cosmetics, ethical $nd proprietary
trol period from the time that always wondered what happened
pharmaceutical
specialties
and f
NADC
was
founded
until
one ■jo
the price directors of those Meyer Keslenbaum, President of toiletries in the United States and A
Hart Schaffner and Marx/clothing
year after the General Max regu¬ days.
•
' ■ '. ■
On thp j
manufacturers (and Chairman of many foreign countries.
lation
was
Kocfissued, between '42
I certainly feel that they are
of information available to
J.
the CED's Research and Policy
and '43, we had an increase of 25
engaged in some peaceful pursuit
it, the company believes it is the
Committee), emphasized the "pe¬
points in the cost of living, or someplace, : a
peace
that they culiar" character of the
largest
diversified producer of
present
25%, with the index starting at earned as a result of the efforts
cosmetics sold through retail drug ■*
inflation resulting from the peo¬
100, in August of 1940.
: 7. that they had to expend on earth.
and department stores arid wholer
ple's emotionally-prompted scareAnd so we have had increases,
Our ; program
is one that is buying, and from its belated rec¬ salers and the second largest di¬
but certainly the factors were at
versified producer in the cosmetijp A
directed toward achieving checks
ognition and concern over past
work
after
June
of
1950
that
industry without regard to sales j
and balances that would normally
long-term depreciation of the dol¬
would, have led us into a serious
.outlets. ;
7/ ,■■•.7.7
r.,;:-1
be
present
in
the
American lar. From this he arrived at the
inflationary period if some action
The company, formed in 1920,
economy without the outside in¬ seemingly sound practical conclu¬
hadn't been taken.
7
A;
f
terferences caused by the defense sion that a combination of mone¬ is the successor to the businesses
V The final part of the statement effort
or
a
dangerous
inter¬ tary and fiscal measures, an ade¬ of William R. Warner and Co;,
that I would like to make is that,
which dates from 1856, and Rich7
national situation.
•
•
A A
; ;
quate savings program, and selfof course, a good
ard
many people,
Hudnut, which dates from
discipline—in lieu of a single
Without
1889.
Its cosmetics are marketed
'
paying any attention,
remedy—is indispensable.
' 7
will
say,
"Well, we have had
under the name of
Another businessman, F. R. Laz¬ principally
price controls, but nothing has
Richard Hudnut, Chen Yu> Ciro,
i
arus Jr., President of the Feder¬
happened."
;.;'7
t
ated Department Stores, warned Courtley and Du Barry. Its ethical
pharmaceutical
specialties
are
against the Government's over7 Recent Leveling Off
Nielsen, Gordon & Hall, 120 advertizing of inflation and pros¬ Gelusil, Anusol, Agoral,; Theralusf |sr} t true. We have Broadway, New York City, mem¬ pective controls, with its result Vita, Alka-Zane, Gelu-Cillin. Dia*iad 3 period in the past SIX Or ber of the New
in scare-buying and accentuation trine, Heparin/Pitkin- Menstruum
seveh weeks where there has been York Stock
and Stigminene,
The company's
of the evil that it is attempting
proprietary pharmaceutical spe¬
Exchange, an¬
to cure..
'
Economics
We
That
• From
increase
of about eight points in the index.
We have had periods where in¬
June 20,
situa¬
emergency
tion.
were
direct
?
.
.
s.
answers.
A F. Eberstadt & Co. Inc. oh
parity was the equivalent of forc¬
11 headed a nationwide
ing Ithe, fighters against inflation April
the psychological pressures that to keep one hand behind their .group of investment firms who of¬
were
driving us into dangerous back, and whether he believes this fered for public sale 320,000 shares
,
.would, not be
necessary.
The first
often
Common Stock
when asked whether
the " continuance
'justification for the role of
o
the
too
EberstatH Group
Offer Warner-Hudnut
Highlighting the current politi¬
7
that* possibly
have found that the events since
Korea more or less lay a basis of
r
that
the
of
people that just paid no attention inflation that was
certainty in the -would or should be changed by
to
anything and felt it was a works after June of 1950.
'AAA 7 President Truman.
time
when
they ought to get
In 'the
process
of
discussion
theirs, and they did the best that
Psychological Factors
this morning, of course, we are
they could.
That third class.,
Strong recognition of the psy¬
going to be directed more and
more than anybody else, sent us
chological
elements
bound
up
more to the question of what part
down the road to direct controls.
in the with, if not actually controlling,
However, as we review the situ¬ monetary policies play
eventual role of the government the economic situation, has sup¬
ation; we find that the price inr
in
the
question ofy emergency. plied one of the most interesting
creases
certainly
exceeded
c o n
.
on
to delibera¬
concentrate
intellectually-exercising
economists
fessional
tendency to¬ tions
"stabilization"
the
ward
have been the fault of ineffective
voluntary
standards, but were forced into
positions
through no fault
of
their own
where they had
to
make increases.
y
Then we had a third class of
tary controls,
.direct price
I
that
have
.
t
occurred
Of course,
We
standards.
question that
-if
we
had
.proper
a
4 %■-point
high peak which
Feb. 16, 1951.
And
generally found that people
class
the
to
pointed standing in the way of effective
that prices control.
have risen much less in the past
So—a conference such as this is
two. months than they did pre¬
particularly
worthwhile in re¬
viously. In an informal press con¬ minding 11s of the realistic, con¬
ference this genial and engaging
tributions made by the non-pro¬
difficulties.
shows
decline from its
-so
an
"All-Stars" Conference
v
riety, directly
.related
Conclusions From
declines in
customers in
Those Control Measures Psychologically
Effective
caught
pressing
from page 5
price structure, academicians for the
now will say that isn't the result may well be due to factors foreign
fell into three classes.
We found
to the spheire of his activities—
of controls, that it is the result of
those people
who leaned over
just natural things that are occur¬ „as inventory accumulation, the
backwards and did the best they
ring and will continue to occur. .end of scare buying, and the fill—
could
to
a b i d e
by voluntary On the other hand, if prices had ing-up of consumer backlogs.
questions
were
some
Thursday, April 12, 1951
of
or sev¬
.
have had
commodities
in the squeeze.
the
of
cnange
office asking for relief.
were the people who were
our
the
we
most
our
con¬
we
Continued
.
level.
food prices.
We have had some
declines in other fields.
The spot
market index of the 28 sensiuvk
justified invoca¬
tion of direct controls in emergency situation.
States those
people who lived up to voluntary standards were principally
caught in following squeeze. Maintains general freeze action
taken in January has been effective toward present stability
because of its overcoming previous psychological pressures.
First,
net
a
point in that six-
a
We
Price control chief asserts post-Korea events
trols,
been
pretty
en-week period.
Director of Price Stabilization
'
has
There
0.3 of
By MICHAEL V. DiSALLE*
been
has
wholesale
The
off.
leveling
a
Price Control Is Justified
..
where direct
have
been
to
that King
price
controls
us
.
,
not
necessary, where we might have
;been able to approach the problem
with selective controls of some
.
kind,
had the Chinese inter¬
we
vention
which i m m e d i a t el y
changed that picture and stimu¬
lated purchasing and anticipatory
■price increases.
,
v
,
.
On Dec. 19, we tried
voluntary
standards and, to our total
F. H. Koller Joins v
dismay,
some
people
standards
lived
up
are
now
and
to
those
of
some
.
'Transcript of remarks by Mr. DiSalle
before
Conference
on
The
Economics
of
"Mobilization, sponsored by the University
of Chicago Law
School, White Sulphur
Springs, West Virginia, April 7, 1951.
,
.
Nielsen, Gordon & Hall
,
cialties
that
nounce
Realism From
Frank H. Kol¬
ler, Jr. ib
with
A
the firm
ator
/0 Cumulative Convertible Preferred Stock,
$5.00
par
value.
,
'
7
■'
r
.
'
"•
,
of $1.00 par
value
common
A' 7'v
stock.
'
formerly
Manager
of
was
V
.
the
Offered for sale
at
T
$5
-
tr
per
■
share.
■.
industrial
ding de¬
partment for
-
a
fer, Miller & Co.
conducted
his
Orders will be executed
was
with Scha-
In the past he
investment
own
by
With MerriB Lynch
(Special
UNDERWRITERS AND DISTRIBUTORS OF
INVESTMENT SECURITIES
Broadway
New York 6
HAnover 2-5400
The
Financial
Chronicle)?
Lynch, Pierce, Fenner' &
Beane, Board of Trade Building.
He
&
was
asweet,
Sloan's
Balm,
Nonspl,
Lorate, Hobson's Preparations and
Stacomb.
Bennett, realisti¬
Debentures Placed
engage
use
previously with Rodman
Linn and Shields & Company.
He
should
not
merely
in intellectual exercise, but
profits
by
Cbas.W.ScrantcnCo.
fat-.,
the vote.
An
Representative Celler, another
non-economist, vividly pointed out 27/8.%
issue
of
$8,000,000 30-year
debentures, 1981 series, of
United- Illuminating
the political difficulties involved The
Co.
in withstanding .the demands for (Conn.) has been placed -directly
excessive
inflationary housing through Chas. W, Scranton & Co':,
it was announced on April 10.
credits. *
"
other
The net proceeds of the loan
"non-professionals,"
Arnold
and
Senator will be used to repay
outstanding
O'Mahoney, joined in pointing out
bank loans and to finance addi¬
the political 'factors, and the prac¬
tical desires of the peopie doing tions and improvements to prop¬
Two
vester has become affiliated with 'Thurman
Merrill
61
to
CHICAGO, 111.—Joseph P. Syl¬
.
President, Sen¬
and in defeating the efforts to
impose credit controls to the de¬ eign income and excess
gree where they hurc.
The Sen¬ taxes, of $2,540,COO.
ator-industrialist went on to point
out that - it is really up to the
individual to preserve, his own
freedom.
business in New York City.
1
i
Frank H. Koller, Jr.
Dreyfus & Co.
and prior thereto
•..
terbury's Compound, Vince, Bath-
City businessman
F.
include
terest and United States and for¬
Mr. Koller
.
Walter
toiletries
cally
trading de¬
partment.
Convertible into. 2 shares.
Lake
and
Sloan's Linimept, Veracolate, War
The company reported consoli¬
cited the poli.ical factors
standing in the way of the effec¬ dated net sales for 1950 of $37^7
tiveness of government agencies, 845,027 and net profits, after* iriAi^A/
its unlisted
6
Salt
and former NAM
Manager of
as
Politico-
Industrialist
now
associated
PYRAMID ELECTRIC COMPANY
a
.
what they wish
with their
money,
erty.
frit h-T**!-).
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
(1543)
ADVERTISEMENT
15
ADVERTISEMENT
ADVERTISEMENT
CANADIAN PACIFIC RAILWAY COMPANY
,/ Seventieth Annual Report of the Directors
,
to
the Shareholders
(Abridged)
in
crease
which
H
hour
I
G
H
LI
G
H
T
freight rates (later to be determined) as may
offset the increased operating expenses
be necessary to
r
will
follow
the
inauguration
week.
Increase
*
.
should establish
.1950
1949
senting the
or
Decrease
'
$
—
Working Expenses
$
363,252,094
$15,324,594
rate base.
your
340,556,331
___________
342,62(1,125 ;
r
2,063,794
is-that
Earnings
——_1—____
'
^
*
38,020,357
20,631,969
17,388,388
>
should fix
fair
a
applied
by
of return
of your
such *
on
Company that
investment
should
1
be
making this request the submission
the
'
.
a
rate
such 1 net
on
established,
able return.
'
•
]
It is the submission
rates
now
Company
rate base repre-
the rate of return
„
as'
Net
for
not less than 6V2%. In
J
_____
378,576,688
!
.
request that the Board
a
investment in^its railway property, and
net
that the Board
a
Gross Earnings
forty-
S
.
RESULTS:
the
,
The application includes also
YEAR'S
of
-
the
on
Board,
*
-
"requirements"
fail
to
<
yield
a
%
basis,
;*
]
reason-
J
,
'
,
,
,
Ratio, Net to Gross Earnings
10.0%
•
•
5.7%
The
4.3%
-
the
Board
investment
either
Other Income
-
$
23,236,264
$
23,636,653
$
Rental
Charges—11
13,389,610
.14,543,817
by
been
in
the
asked to
'
undertake
railway property of
staff
the
of
Board
Company, >.
your
by
or
of
audit
an
independent'
experts to be appointed by the
Board, the cost of which
400,389
i
Interest and
has
;
Company has untaken
your
1,154,207
'
.
The
to
Profit
and
*
..4"
;
'
•
Income
bear.
■?
and
Loss
accounts
of
your
'
Dividends—Preference Stock
'
3,388,648
3,872,768
.
Company show the following results for the
484,120
,
December
31, 1950:
/■*,
.
,.
—Ordinary Stock
20,100,000
16,750,000
»
,
v_
v
.
'
•
*
•
24,378,363
+\
,
''
'*
9,102,037
■
*p
*
-
.
*
.
.
.
-Gross
15,276,326
•
:
Income
v-
Account
•'
Earnings
v
.
•
•/
;
«
.
-
■
?
.
V
..
.
-
-i
.
^
YEAR-END POSITION:
:
/■'■'.4.4-4;
"
'
'
*
•
4
•>
Working Expenses
.
:4-" '.
'
'
4
$1,424,197,017
$1,381,246,250
.* 1
Earnings
"v
193*444,952
v
___!
■ *
i -'
Pixed
Charges
^ 79,373,000"
'
6,336,000
■
''
•
/'"v
_
_■
_
-__!
'J.
4
518,842,273
503,527,526
15,314,747
—Ij-.—.
——-
89,283,032
273,357
89,556,389
'
V,
'
,
,
*
.
' '
,
$ 61,256,621 >,
•
;,
•
'-'4. ■'
W
•
/t•
'
■*
'
•
'
•»
••
i
'
$ 47,867,011
!,'•
Preference Stock:
2%
;
■-
paid August
„
.
!,
1950—1,741,565
1951—
1,
'
1,647,083
':'-Vv
-
$
Dividends:
Tons of Revenue Freight Carried.
53,915,746
"
56,445,684
"
-
'*
;•
Carried
1
;
.
10,541,492
11,969,457
1.33c
2%
i
Revenue per Passenger Mile..—
2.81c
_•
-
October
2,
1950—_$
payable February 28, 1951—
,4
...
0.13c
2.72c
paid
4%
1,427,965
1.20c
:
;
-
•
•
^
•
.
.
Revenue per Ton Mile of Freight...
3,388,648
■■
Ordinary Stock:
2,529,938
; I
Passengers
V
'
TRAFFIC STATISTICS:
Revenue
23,236,204
Income.
2-% payable February
y
38,020,357
Dividends;'
.
..
Working Capital
"V
v.-
•
I-'Z+ZujHJ.7L-'Allall.L. ' 13,389,61>
■'
•
.
y
/J-
.
,
,
«>' '
1
_*
"41
3,272,925
.
Net
___*__i:_
!••
•
1_$
Income
'
85,709^000
'
»
$42,950,767
'.
_J.
Reserves
340,556,331
'
'
,
Net
Other
190,172,027
Debt
'
:;4
Investments
Funded
\
'
*
Property Investment
Other
i ■
r
^'
*
$378,576,688
;
•
•
*.
>r
t
•
•
\
/
■
.
3,350,000
.
Balance for Modernization and Other
Corporate Purposes
ended
year
*
'
r
4
-
•
6,700,000
v
.
13,400,000
'
v
1
-
20,100,000
-
,,;4V'?
0.09c
,
-
4'rV
23,488,648
—
..
Balance transferred to Profit and Loss Account
_$
24,378,363
:
V
Profit and
Loss
Account
!
,
1
■
•;
:
1
.
'
.'
*
the
Shareholders:
.The year 1950
Had
marked by
was
the final decision
on
the
not
application of Canadian railways launched in July 1948,
Board
would
20%
of
the
hearings
portation;
higher,
by
wages
that
of
increase
a
of
freight rates; by the completion
the
strike
and
dispute
in
Royal
of
Commission
Trans¬
on
non-operating employees
shorter
hours,
by compulsory
for
the. settlement
and
earnings
basis
Transport
established
laid
Commissioners
been sufficient
down
on
by
the
to
the
on
Notwithstanding that the volume
lower
was
than
in
1949,
operations, while much
were
the
serious
which
of the
war.
Net income
for
share,
in
those
of
handled
made it necessary for your
from
railway
other
the
war
years,
the
had
lack
of
balance
available
with
for
$26
year.
Canadian
on
operating
rose
of
Income
case
alter
December
Portion
of
31,
Account
1950
to
$44
on
and
Ordinary Stock
million,
million,
or
or
$1.93
'
,
was
steamship
sub¬
of
the
year
ended
•
$
.....
insurance
tonnage replacement
Excess
recoveries
increased
.
for
1
■
•
an
,
j;
|
J-
of
—
received
.
24,378,363
sales
-
229,741
of
1
■
properties
over
book values
2,791,713
expenses
Miscellaneous—Net Credit
555,666
—
'
eral
on
increase in
coal
and
$3.32 per
per
share,
quested, is
'•4-' 4
*
' t
'
-
'
\
December 31, 1950,
as
per
J
|
.
Balance
on
immediate gen¬
....
$224,636,260
...»
•■"
..
:
•
—•
1
•
coke
in
respect of which the increase
Also excepted
-•c
re¬
the rates
and
fixed by statute or are related to the rates
the
rates
on
international and
*
..
'
'
'
"
t
on
Gross
earnings
compared
so
■i
Railway Operations
.
are
fixed,
i
:
freight rates amounting to 5%, except
grain and grain products within Western Canada, which
are
£*••'■•
.
lOp per ton.
J
27,955,483
therefore filed with the Board
authority to make
*■
rep-
cost
__.
considerations
Sheet
for
"
1
<
rates
slightly less than in 1949.
dividends
for
;_
Profit and Loss Balance
application
f
•
-
♦
resenting compensation for
the
Company, in association with
,
15 "
.$196,680,777
"requirements"
However,
;
An
•
.
:.
Balance
20%
1
10,050,000
railways, to seek further relief.
t.
December 21
Ordinary Stock, declared from
1949, paid March 31, 1950———
.
*
was
surplus amounted
previous
between
developed progressively since the end
Other income
compared
some meas¬
the
June 16, the cost of wages and materials
traffic
higher freight rates which corrected, in
costs
and
below
of
earnings
greater than in any year since 1944. This resulted
from
ure,
net
in
so-called
stantially, and the resulting effect
—-$206,730,777
-
provide the level of rail
Board.
the
on
year
prices again risen,
aggregate increase of 20% in freight rates became effec¬
tive
arbitration.
of
have
of the
1949
v
material
and
the freight rates established
by the final decision of the
for
a
rates
wage
of 3%
the earnings
To
Final Dividend
31,
..r
.
.
Profit and Loss Balance December
with
increased
$15
million,
1949.
V
*
or
4.2%,
i
as
„
.J
-
t
t
related
traffic.
The
application also asks for such additional percentage in¬
Freight
lion
revenue
higher
in
than in
1950
1949.
was
This
approximately $14 milwas
entirely the result
4
J
I
.
16
The Commercial and Financial Chronicle
(1544)
of
increases
in freight
mately $23 million
handled
in
freight
mile
the
for
over
1949.
tons,
a
year
decrease
of
1.33c,
was
million
2.5
and
tons,
per
53.9
million
the
to
and
income from
Net
erties
increases
cultural and
the
August when the strike
tonnage
of
seasonal
grain
distorted by an
was
creased
and
which
in
movement
Western
unusually late harvest, and
Grain handlings
the
of
your
Company owns
than
larger
in
included
year
half interest,
a
Bond
1949.
interest,
Air
on
Lines
to
inclusive,
1948
also
was
less.
profit from Canadian
a
with
operations, compared
Railways,
loss in
a
half
is
which
of
result of
in mail rates negotiated with the
Post Office Department and effective as from December
$1.1 million. The cost of interest and rental charges
payable in sterling
substantially lower
was
of the devaluation which took place
The
freeing
1949 and the month of December
1948.
and its
of
Canadian
the
as
United States currency,
Working expenses, at $341 million, were $2 million less
than
in
were
due to the wage
1949.
Approximately $2.6 million of
increase of 7(f
expenses
year.
in
dollar
increased because of
the year.
■;v/
"
had only
Interest
1950,
October
a
minor effect
a
on
■ "■
structures and $3
$140.6
at
expenses,
$5.9 million—$2.9
million
million,
maintenance
in
decreased
of
way
Net
income,
Gross
million in maintenance of equipment.
million,
lion
available for dividends
this amount
the
of
$9 million
was
Maintenance
for
track
Fund.
material,
Of
in¬
an
plus
4%
amounted
on
to
the
on
Preference
Ordinary Stock and for
million.
$44
Fund
formula
again
were
used
in
computed
previous
the
on
basis
of
the
Dividends
$20.1 million, being at the rate of $1.50
declared
years.
the
on
earnings
Stock,
sur¬
aggregating
of $2.75 million over last year. Withdrawals from
crease
the
for out
of
per
share,
with
$4.8
million,
expenses,
3%.
or
installation
The
tives to oil, and improvements in
have
of
diesel
some
the conversion of certain coal-burning locomo¬
power,
aided
in
operating performance
dividend
were
pointed out that one-half of the total
Ordinary Stock for the
on
other
to
earnings decreased from
gross
in 1949 to 39.4%./
^
.r"
"
equipment for the
:
'•
•
•
showed
year
of $1.6 million compared with a net debit of
in
1949,
United
creased service to Tokyo, as
reflecting
States
Nations
United
the
effort, and this operation was
eventually increased to four trips
Balance
United States Subsidiaries
$1,781
increase of $67 million.
an
the
increased
a
The increase in property
'• "
.
net credit
Net income of
of which
$29.3 million
was
investment
was
$43 million,
retention
of
The $10.7 million
the
railway lines in 1950.
in
that
Fund.
Withdrawals
million
1950,
amounted to $1.5 million, an
the "Empress
and represented a return of 3.5%
in
the
rail
property
of
your
year
on
were
$38 million
on
therefrom
was
during
replaced
the
A dividend of
year
account of reconversion costs of
$1.00
per
share on the capital
The amount of the
"Princess of Nanaimo".
by your Company in
United States funds, was
at
the
end
Working capital at $89.6
the
year.
same
as
million
was
No interest
approximately
Other
of
income
amounted
$400,000 from
to
loan
of
$1.4 million made to the Company in
*
1932
$23.2 million, a decrease
1949.
by the Government of Canada under the Unem¬
ployment and Farm Relief Act became due and
was
re¬
that
and
earnings from
ocean
and
coastal
steamships,
at
Wisconsin
Finance
the
The amount.of serial equipment obligations
resort
last
earnings of hotels
lower
were
at
most
of
decreased
the
$738,000. Revenues
city hotels and
all
the
of
establishments, and operating costs increased
in
over
during the
year was
reorganization
proceedings
of
the
Railway Company on the review of
reorganization approved by the Interstate
Commission
in
1947
were
concluded during
$12 million, and $1.7 million of 3J/2%
the
Convertible Collateral Trust Bonds,
year.
On December 8 the Examiner issued his pro¬
maturing February
posed
15, 1951,
the
Central
plan of
Commerce
report,
which outlined
a
new
plan extensively
purchased and cancelled.
were
Convertible
a
and contingent in¬
modifying the previous one. The Commission distributed
earnings from communication services
$365,000.
after fixed
$688,000.
discharged
year.
Net
income
incurred by
Results were more satisfactory
paid during the year.
$3.1 million, increased $862,000.
Net
net
terest amounted to
Hearings
Net
1949.
Mort¬
South Shore and At¬
Company, as a deficit was
Company in
1950
in
received during 1950 on the First
was
Railroad
lantic
The
Other Income
$398,000.
Income Bonds of the Duluth,
gage
last year.
on
1950
dividend
1950, including the pre¬
received
mium
of Scotland" and construction costs of the
stock, the
previous year, was paid on April 1,
earnings for 1949.
of
out
in the
as
same
the net investment
Company
1949.
$400,000 as compared with
.
Railway net earnings for the
provision for fixed
after
which had been appropriated from
Steamship Replacement Fund in 1949
included $3
for
charges,
contingent
Marie
Minneapolis, St. Paul & Sault Ste.
Company
increase of
on
cars
Railroad
and
in rolling stock.
$1.3 million
Railway tax accruals increased $10.6 million, of which
$9.7 million was for income taxes.
of the
weekly.
Sheet
Total assets at the end of the year amounted to
million,
provide in¬
part of Canada's contribution
:
1
of
42.4%
requested your Air Lines to
ment of Canada
to
in Korea the Govern¬
the outbreak of hostilities
After
whole of 1950.
operation throughout the
in
prices and higher wage rates. Principally as a
tion expenses
inaugurated in July
Pacific services which were
were
sources.
keeping transportation costs lower than
result of increased freight rates the ratio of
transporta¬
■* Hire
attribu¬
was
table to railway operations and one-half to income from
would otherwise have been possible in view of increased
material
year
between
Prince George.
Vancouver and
The
decreased
needs of local traf¬
and Dawson Creek and
Ordinary Stock out of 1950 earnings.
Your Directors
at $149.2 million,
Lloydminster. New sched¬
put into effect to meet the
between Edmonton
1949
Transportation
intermediate stop at
an
ules were
inauguration of
and North Battleford
service between Edmonton
new
fic
Canada increased
Operations were expanded by the
$47.9
to
increase of $18.1 million. After payment of
an
dividends
paid
amounted
a
Maintenance expenditures to the amount of $10.25 mil¬
were
charges,
$113,000 in 1949.
from operations in
revenues
$203,000 for the
net profit of
a
compared with a net loss of
year,
fixed
after
Air Lines had
Your
9.9%.
and
Limited
Canadian Pacific Air Lines,
Net Income and Dividends
Maintenance
terminated by death.
the
hour.
per
pensioned and 570 pen¬
1,390 employees were
the year
issue of such bonds during
new
increase of 820. During
end of 1950 was 11,208, an
sions were
Act.
the pension payroll at
of employees on
number
The
the
Collateral Trust Bonds
on
contribution to the Pension Trust
employees covered
States Railroad Retirement
by the United
$11 million.
allowances paid
imposed in respect of
Fund and taxes
result
a
in September 1949.
subsequent rise in relation both to sterling and
charges for the
for the year amounted to
proportion of pension
b,y your Company, its
charges amounted to $13.4 million, a decrease
1, 1948. A substantial part of the increase in mail earn¬
ings for 1950 is attributable to the retroactive settlement
Pensions
Pension expense
Fixed Charges
of
Mail earnings were $2.2 million higher as a
Deben¬
of Consolidated
pledged as collateral.
ture Stock
by
borne
affected by frosts
Fixed
of $6.3
increase
during the year and an
$21.6 million in the amount
of
This included the
western lines de¬
your
1952, and up to and
resulted in a net increase
These transactions
million in funded debt
Company.
your
grain products decreased $9.6 million.
in respect of the year
right at
in¬
cluding April 1, 1959, to convert their bonds into shares
of Ordinary Capital Stock in the ratio of four shares of
the par value of $25 each to each $100 principal amount
holders have the
time commencing April 1,
decrease in the operating loss of the North¬
a
Alberta
ern
days' notice must be
At least 45
case.
given of any such call. The
any
Atlantic Railroad Company in respect
1945
years
Pacific
in each
100%; plus accrued
and thereafter at
annum,
per
Duluth,
payment from the
a
Offsetting these, in part, were
by 71 million bushels and earnings from grain
the increase of 25.8%
de¬
of one-tenth of one per
of the bonds.
last
1949, and
the quality of the crop was adversely
in August.
oc¬
commodity
every
animal products.
normal
Canada
in
Line, in which
substantially
was
South Shore and
being recorded, with the exception of agri¬
group were
The
most
was
million,
$3.6
at
sources,
$846,000. The deficit of the Canadian Austral¬
apparent, and in the latter
was
half of the year, except in
curred,
cent
including March 31,
to and
1968, at reducing percentages
affected. In the second quarter
were
change in this trend
a
traffic
early months of the year, and practically
traffic
interest, separately operated prop¬
miscellaneous
and
asian
all types of
each succeeding year up
in
interest
average
by 4 miles to 426 miles.
The decline in the volume of freight
marked in the
last
as
same
The Consolidated Mining
by
Smelting Company of Canada, Limited, was at.the
creased
haul decreased
approximately the
was
dividend paid
rate of $9.50 per share, the same rate as in 1949.
increase of 0.13c
an
amounted
carried
Tonnage
The
year.
of some $9 million but for
revenue
the increases in freight rates. The average revenue
ton
Dividend income
approxi¬
produced
The volume of traffic
lower, and there would have been a re¬
was
duction
rates which
more revenue.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
1951
Thursday, April 12,
.
Commercial
result of the
4, 1949, and
a
wire services
telegraph
revenues
higher rates which
larger volume
were
increased
went into effect
as
July
of traffic. Rents from leased
also greater.
increased
Bonds
dated
principal
$24
Year
3Vs%
were
ture Stock.
principal
amount
These Bonds
101.50%,
up
are
Collateral
Trust
issued and sold in the
amount of $20 million,
million
1952 at
Twenty
April 1, 1950
of
this report to the
interested parties, who were given 45
days in which to file any objections.
secured by pledge of
Consolidated
callable
on or
Rates
Deben¬
after May 15,
to and including March 31, 1954, and
In
a
judgment dated February 28, 1950, the Board
Transport Commissioners forf Canada
of/
authorized Cana-
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
(1545)
17
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
dian
of
railways to increase freight rates by 16%, in lieu
the
increase
of
8%
authorized
in
the
September 20, 1949. The 16% increase
March
on
23.
authorized
increase.
In
increase
an
The
20%
bringing rates
in Western
decision
a
of
dated
20%,
of
put into effect
was
May
judgment
11, the Board
superseding
the
became
effective
June
This increase is much less than the rise which
has taken
place in material and labour costs.
The
well
as
within
creased.
the rates
on
fixed
were
Canada,
sons, these rates
increased
are
rates
not
baggage and
units
consist
of
28
resulting
in
an
Carload
creased
effective
yielding
an
rates
to
by
been
the
Western
to
of
livestock
15
For the
units, which will
the Laggan
be
and Mountain
President.
Montreal, March 12, 1951.
CANADIAN PACIFIC RAILWAY COMPANY
ASSETS
LIABILITIES
were
that
was
Sheet, December 31, 1950
INVESTMENT:
CAPITAL
Steamships
hundred
per
Improvements
on Leased
of
approximately 8c
Property^
Stock
Preference
117,312,306
lative
Board
will
public
were
134,909,063
Steamships
PERPETUAL
4%
hearings.
Following
by
the
the
Properties
Less:
yield
Company about one-third
your
103,968,324
in¬
Post
Office
in
rates
was
Deferred
1948.
This
Department retroactive
increase
followed
negotiations
on
an
application for
of
55%
Canada. The increase in mail rates is the first since
1922,
although the
costs
of
Pay Rolls
providing the service
have
in¬
*£
$
ft-
^
6,572,319
Net
Traffic
9,401,052
-A
Audited Vouchers
—_
_'
*,<■
L
12,272,206
Balances
3,828,099
Payments
Lands
on
—
Accounts
Payable—
6,619,090
Declared—
15,047,083
1,057,744
—
Accrued
and
Unsold Lands and Other Prpperties
Fixed
Unmatured
7,731,393
_
10,846,779
Other
Charges
Dividends
Current
726,685
Liabilities
24,352,777
7,600,000
72,246,992
Fund
_
13,188,540
,__
Steamship Replacement Fund
DEFERRED
LIABILITIES
-
23,512,103
RESERVES
AND
UNADJUSTED
Maintenance Reserves
Agents'
and
$
Conductors'
Miscellaneous
Government
of
Balances
Investment Reserves
16,455,929
23,383,779
Canada
Securities
Cash
;
7,600,000
489,866,749
37,930,438
Receivable
Accounts
$
Depreciation Reserves
Insurance
39,818,360
4,068,165
Reserve
13,188,540
Contingent Reserves
4,118,819
44,214,875
_
Unadjusted Credits
6,241,495
.—
161,803,381
substantially since that time.
525,083,768
UNADJUSTED DEBITS:
PREMIUM
Insurance
Improvements in Service
Prepaid
classification
new
which
had
been
officially opened
it
make
yard
under
on
in
the
construction
Montreal
since
area,
1947,
substantially
Bonds—
number
of
-than
cars
could
Other Unadjusted Debits
LAND
STOCK
1,307,020
4,763,759
PROFIT
AND
68,066,442
LOSS
BALANCE
sisted
$1,780,936,184
$1,780,936,184
be
ERIC A.
motive
58
power
diesel-electric
the
on
delivered during
Schreiber
the year
units, which
Division
in
con¬
cars
put
were
Ontario.
1,870
new
freight
cars
and
114
in
There
passenger
placed in service during the year. A
passenger
on
car,
a
''Restaurant Sleeper",
two trains late in the year. The
modation,
and
has
been
favourably
new
was
car
meal service with bedroom and section
We
the
Income
introduced
combines light
sleeping
received
accom¬
by
with
train
type of
the
The
securities
ties
in
the
RAILWAY
examined
and
Profit
books
records
which
safe
In
PACIFIC
have
of
were
the
Comptroller
and
and
Loss
records
the
in
COMPANY:
above
General
Accounts
of
Balance
for
the
Sheet
year
of
the Canadian Pacific Railway Company as
ending
on
that
date
other
and
related
securities
owned
the custody
by
the
Company
at
December
31,
1950,
were
verified
Appropriations
your
confirmation, capital
appro¬
priations aggregating $28.7 million, in addition to those
by
an
of its Treasurer and by certificates received from such depositaries
our
opinion
properly drawn
up
operations for the
the
so
year
as
General
to
Balance
present
then ended,
Sheet,
fairly the
Income
and
financial position
according to the best of
our
Profit
of
and
the
Loss
Company
Accounts
at
have
1950,
compared
examination
as
and
the
other
December
31,
1950,
were
of
those
holding securi¬
related
and
information and the explanations given to
us
the
and
schedules
results
as
are
of
its
shown
by
the books of the Company.
PRICE
Capital
and
custody for the Company.
Montreal, March 9, 1951.
anticipation of
at December 31,
schedules,
the Company.
public.
In
and
SHAREHOLDERS,
CANADIAN
them
were
LESLIE,
Vice-President
of being closed down.
of
service
224,636,260
_
a
TO THE
New
34,458,562
SURPLUS
handled previously in the separate
yards, which are in
process
AND
2,967,989
July 6. The facilities of the yard
larger
CAPITAL
DEBENTURE
on
was
possible to handle speedily and efficiently
ON
488,750
Unamortized Discount
The
3,040,010
CREDITS:
190,172,027
ASSETS:
prolonged
increase
an
•
to
by the Railway Association of
85,709,000
LIABILITIES:
.
Material and Supplies
made in the Fall of 1948
creased
„_
Townsites
CURRENT
1,
CURRENT
47,435,355
__
to Settlers
Supreme Court
mail
38,114,500
DEBT
72,227,794
and Othe^,:
Maintenance Fund
amounting to 25.8%
granted by the
December
equipment obligations
Miscellaneous
Insurance
increase
333,552,729
to
Mortgages Collectible and Advances
has been refused
by the Board.
An
$
—■
Companies
behalf of its member lines, for leave to
appeal
from the judgment of the Board to the
,___$
___
collateral
Controlled
—
Advances to Controlled
tariffs. The request of the Canadian
Passenger Associa¬
on
Bonds
Miscellaneous Investments.,
creased revenues expected on the basis of the
suspended
tion,
and
Companies
the
the
as
295,438,229
FUNDED
estimated
of
STOCK
Pledged
OTHER INVESTMENTS:
Board
hearings,
authorized increased fares which it is
472,256,921
CONSOLIDATED
65,410,370
$1,424,197,017
suspended
137,256,921
Hotel, Communication and Miscel¬
Stocks
amounts,
335,000,000
non-cumu¬
„
DEBENTURE
per
by Canadian railways
——$
Stock—4^
-$
Companies
amounts,
Ocean and Coastal
increase
Ordinary
$1,002,596,954
Stocks and Bonds—Leased
Railway
generally in¬
varying
STOCK:
the
1949, which would have increased commutation fares
pending
Directors,
Interstate
Canada
17c
were
by
passenger tariffs filed
varying
officers
The diesel-
bonds and
by
by
employees.
by
laneous
in
sincere appre¬
rendered
rea¬
hundred pounds.
Proposed
services
in¬
applicable class rates,
increase
on
December
average
effective
i
agricultural implements
on
reverted
average
pounds.
cars.
Railway, Rolling Stock and Inland
traffic
the
W. A. MATHER,
road
on
and when increases in
as
July 24. The effect of this
such
on
and
pro¬
of
diesel-electric units, 3,575 freight
cars, 25
express cars and 272 work
PROPERTY
rates
Your Directors desire to
express their
1951.
General Balance
commodity rates
on
year
capital
by
not covered
were
authorized
are
moving from Eastern Canada
cancelled
for
rolling stock make
new
Commerce Commission.
Special
also
international traffic and the rates
on
import and export traffic
States
requested
$54.5 million for the
appropriations for
vision for 40
Calgary and Revelstoke, and 12
Officers and Employees
be
ciation
The
between
yard switchers;
cars.
will
of
Subdivisions
$21.4
grain and grain
on
have
judgments of the Board because, for technical
United
approval
authorized
grain and grain products
export, and
Western
The rates
certain
on
the
Your
were
year. These included
grain and grain products moving from
on
to Pacific Coast ports for
products
million for 3,000 box
electric
Western Canada to Fort William which
as
Meeting,
pirectors during the
your
placed in freight service
rates
statute,
last Annual
16,
to 45% above their pre-war level.
up
the
appropriations
increase
Canada)
by
at
16%
intra-Canadian traffic (other than grain
on
approved
'
WATERHOUSE &
CO.,
Chartered Accountants
The Commercial and
In many cases,
:
MARTIN JOSEPH
Joseph and Rodman, Attorneys
Counsellors-at-Law, New York City
distribute the income and
principal of the trust to one,
may
:
of a number of
beneficiaries. ; These
beneficiaries can be described as
a
group consisting,^ for example,
several
•
of the relatives
.
calling attention to Europeans transferring
to banks in neutral countries,
:
investments
American
their
of this move as means of protection
seizure. Holds placing assets in trust is '
;""
points out ineffectiveness
/
against blocking or
better
protection.
;//-V
;
^
;
is not
*there
much
any
in
Government can levy
and
v^uickly,
the
'
I transfers
Hsht
to
n
Martin Joseph
Franz
of such Amer-
,
.
.
-
..
aj
d
h-
shares
residuarv
estate in
to his brothers
and
New York
♦ banks,
but in the name Or for the
account of a Uruguay, Mexican or
»Tangier bank. The 'identity of
Hhe real European owner of the
.American
assets {then
appears
"only on the books of the banks
in Uruguay, Mexico and Tangier,
By such rather transparent cloak-
zations. In view of the many advantages offered by discretionary
trusts, such trusts have been es-
tablished not only by Americans
but also by foreigners. In a cortsiderable number of instances,
Panama corporations, Swiss faniily foundations, and Liechtenstein
trusts have acted as. settlors of
..
very flexible, making it easy
provisions to
by individuals but. also by organi- the requirements
—7
,
,,
777——rr-r—
.
■
■
n
-
..
0
.
-
l4
of each case. T
T"
—*:
...
.
.
Expenditures
Lisls leduw® items of Federal
:
.
■ »
- r. ••
April issus; of Na'.ional City Bank of New York's
Bank Letter" discussesv estimates made by Committee
Federal Tax PoLcy,
'.W
headed by Roswell Magill.
, . ...... _ Under the caption "Can Federal ditures. can and should be cut. It
Expendi^®s Be Cut?'' the April recommends a reduction of at least
isSJl^ oi:jtWE -"Monthly Bank Let- ^lO bilJion.-from the annual rate
published by the National of spending represented by tfye
City Ranir of tvp-u/ York, nnhiichpc"
Pitv Bank nf New vnrk- publishes $71.6 billiom budget fnr +r;cmi
for the fiscal
data givgn "in a recent report of year 1952, and indicates the gehthe Committee on Federal. Tax eral areas in which savings might
Policy, headed by Roswell Magill, be looked for, as well as a budgformer Undersecretary -of. the etary procedure for making them
Treasury. According to the article: effective.
. j,
"Individuals and business con"In its approach to the problem
cerns who have ^st made thedr of budget cutting, the committee
payments of the first quarterly in- adopts, instead of the customary
stalmentj of/Federal income taxes functional breakdown of expendiwlH be in a mood to appreciate a. tures, a new classification of
report on the question in the budget items, with the view of
,
(
^
U, a Government in order ,sisters alJ of whom were Nether- above caption by the Committee
to have blocked accounts de- ,
. citizens However he gave on Federal Tax Poljcy, made, pubblocked, and in1 view of the m- *
executor discretionary power lic last month. In this report enternational exchange of tax in- ms exe.cu!?r o^creuimaiy puwci
formation ;am 0 n g
+'
which have entered
..uciaries wouiu uui nave
^ and unrestricted benefit or use or fiscal authorities under the chaircustomeis now. run a seiious nsK
nrnnprtv Unon the manshipof Roswell Magill,former
in attempting to evade U; S.
"death of the testator the corporate - Undersecretary of the Treasury,
: to
in
investments
decedent
was aomiciiea in wew xo
foreign banks or other foreign
In view of the information which must be supplied
mstitutions.
tinued holding
,ican
:
of
con¬
■■j
ownership of assets held
the United States in the names
in
has
♦been the
™ Jpfinitp
the
f
these
of
'most
frn
the real
of
result
net
Idnd
*lciaP^3 J*p!L1n
t
f tg
in_
the revive a ceria
p
past, it has often been impossible-^oead ap
which
for the American Government to case of Ma e
oj
„
; '
;
find out the true facts regarding was a
NpwyYork Countv in
\ which can be
lli q u id a ted
teasily
.
interest and
high penalties in addition to
normal estate tax liability. In
investments
*
anv
due at the
uwiici
owner
make
to
tries
jLh torv"
pn t
they ieside could g
^
from
oiust be uistinguisneci^ f p. bpne.
.
Iph'thP
liability as bedeath of the real
has not u—
Mao nub been paid, the U. S.
estate
came
of these coun¬
ft
tax
such
oppor¬
tunity
'
Thursday, April 12, 1951
.
.
American trusts The law of trusts
.
flexible makine it easv
them. •
;,
..
.. ..
la
Trusts, cah be set up not only t° adjust the-trust
trustees have
douht the beneficial owner of the funds. If the
true
facts
become known, and
As
! Tangier.
certain person
»gh.as long as the trustees nave
not declded to make distribution
to them. Until then the bene-
tomer is without
and
Mexico
a
American sources pay a U. S.
withholding tax oh their gross income
from American
sources
'without being permitted to take
the deductions available to other
taxpayers. However, if they receive distributions from American
trusts, they t pay income tax not
on the gross income of the trust
but oply oh that part of the net
income which is distributed to
the individual benetidefinite property *
principal,
-
inheritance taxation.
began,
many
Europeans
have Usually, foreign banks hold such
transferred their
American in- assets in New York at the risk of
ivestments to banks in Uruguay, their customer so that the cusand
estate
Korea
in
hostilities
the
Since
of
of the employees or
owners of a certain business concern. If it is left to the discretion
of the trustees to decide which
member or members of the group
of beneficiaries shall from time
to time receive trust
income or
persons or
or
New York attorney,
all
or
designated
-
and
Senior Partner,
exercise
the
Their American Investments
By FRANZ
the trust instru-
provides that the trustees in
of their discretion
ment
Foreigners Should Protect
How
*
Financial Chronicle
(1546)
18
'focusing attention upon the character of these operations in a way
that promotes a better judgment^
; ; ..The foli0wing table from the
other studies
...
.
,,
.
,.
report gives the. reclassification pf
Hie budget for the fiscal years
tate tax by failing to reveal the executor exercisine'its discretion adds its testimony to
investor has in true ownership
of assets^ If
to the showin.Ahat
Federal Budget Expenditures Showing Areas of
no way given himself added proproperty, is, held^in the
Dutch beneficiaries Thereupon,
'/
Reducible Government Spending for 1952
;
itection. As a matter ot iaci, ms States in the name ol ar foreign
Government '
FISCAL
YEARS
1»49-1952
1 American assets remain subject holding company, ihis conceivable
r
;
: (In Millions of Dollars)
i to the jurisdiction, of the Amerithat the American Government
ori a war-time de- •
♦
1950 *
1951 i1
1952
:
1949
'L-,*' '* V.vt-'f
f
f rail Government while/ in. addi,. will for- tax;. purposes dray-the
Ro
«ether- :' '
Actual
r Estimate Estimate
£-'\ Actual
tion thereto, they have been
business^
tb
forvI $40,057 $40,156 $47,210 $71,594
.mitted voluntarily to the jurisdic- company, pierce its corporate veu, f
,
hplnn^inp to nersons '^i
i.
iion of a second government. In and consider the assets as be- ,
>
•
-
ing, the European
United
^Xl^thT pafmenU
Netfte^^ds O
v
'^ has^d
times,
uncertain
it
,
■'
e^race of the hpldtag ^ G^ne®nAlent tWey
|uh/
^our
.
:
AT
%
:!>'
j'
T tal
-(—
^ic^in^^Jora^
longing-to the individual who
c d
g
.
Reducible Areas—: ;
controls the company. An estate ^etnerlancto. Xbe^cou
• Gross disbursements for Loans—
tax could then also be levied on
validly o t
y
Expenditures for Civil Public Works,
all the American assets of the;land^t
Chd t d within the- Commodity Inventories, & Equipm't
appears
investments
in such a manner that whatever
Ms held in one country cannot also
be subjected to the laws of anwise to arrange one's
*
2,065
2,071
.■
I\t •• " •/
2,994
^
"
country.
is
It
|"will
can
not be
or
under its war
emergency powers
First of all,
'
only if
accounts are blocked not
I they
actually held in the name
are
| of a person who is subject to
/.blocking, but also if they are not
so held but a blocked person has
beneficial interest therein. Secit can be expected that if
the
hostilities in
Korea should
5
a
*
ondly
•
5
•
spread to other parts of the world,
the U. S. Government would have
reason to block accounts held in
?
the
of
names
Uruguay,
Mexican
^ and Tangier
banks. If a European
[individual were to have an account in the United States in his
the account might be
5 blocked at the outset. He would
probably,
however, have little
f name,
having
in
difficulty
the account
deblocked after he had established
a residence outside of
country. On the other
4,
the blocked
hand, there
Europeans who were
unsuccessful in obtaining the de-
t were
many
blocking of funds held for them in
New York in the names
banks
or
other foreign
if such
Even
•
bank
to his
that
the
War.
foreign
to
bank or foreign com-
that
assets held
also
other I Items—
of
that
,
.
- the United States in the name of
citizens
or
all of the trustees be
residents of the United
p
Total
572
623
—936
-1,314
-1,406
$5,444
$5,349
'
luct
5,722
563
578
673
$4,980
$5,114
175
)
—p*10
-
'——
cepted them as irreducible but be- various services now supported by
-*■ -
—
-
'
poration must
pa^aii^Ymerican. able for^ analysis." '
-
With respect to the reducible
income tax. In the case of trusts,
fiscal 1952.
"(4) Immediate application 'of
remaining reforms outlined bv the
tj™
• •
,
Bank .Letter, has made the Hoover commission and a general
States.
When
•
following recommendations: /
tightening up of Federal managebeneficiaries. If the income of
,f(l) A prompt withdrawal of ment to eliminate waste with a
°£ the Ul+d ?e ^ ^ difs'r^"ted income tax the Federal Government .. .. the saving of $1 billion in fis'cal 1952.
from c
fu- beneficiaries, the total to seve.ral
v
it appears de- paid by them is often smaller than
g
' an a IimlIat10n of
Adding another $2 billion *in
the trustees broad the tax would be if the income its future operations to servicing savings resulting from the sale of
the
economic
r
,.
ture is uncertain,
to
sirable to give
ment. It
can
trustees
can
5,897
5,817
5 444
States. Trustees can hold also only taxation. no such double income areas, the, committee, according to
not any there is The trust as a rule pays
cash and securities but
T 0t-f0r >>
in New York in
a
"
45
interest payments
jg0nc0stf payments *
Receipts a/c loans
_
sary
assume
erroneous
foreign bank are
removed from the ambit of U. S.
name
t—
Reducible Areas including
; ; *
International Aid—
$22,523 $22,077 $21,189 $24,885
Military Services (no details in - ■' UV- /:■ - '• ;;
, i
; Budget)
11,914 12,303 20,994 41,421
had been received by only one and collecting outstanding loans, loans, mortgages, and commodibeneficiary since the tax rates with an P^tlmatpd <?avW in fi<?ral ties thp rommittpp rorau, o ^
rise very steeply in the high in™
by distributing the come
tax brackets. Most for-r 19^2 of $1% billion.
defense
of
beneficiaries.
eigners who receive income from
"(2) A deep cut in the public billion."
L^
and flexible powers of manage-
is not possible.
is
the
would usually set up .a trust.
T*■—*
+
the
pany
It
7,008
...
The property may be located in-
while communication with
the foreign
*
..
American
retuse
2,446
4,218
' Total
income tax on only that part of its
income which is not distributed to
the
9,603
2,076
.
ficiaries .^should be considered ReserVe for Contingencies
What do Americans do if they, enemies' by the U. S. Govern- A—+.
—:•
+ 272
+330
wish to set aside a certain fund ment, in case of an international
for the benefit of their relatives conflict, the trustees could disWho reside in a European COUn- tribute the funds to SUCh bene*Noncost payments are mainly for the railroad retirement trust fund, for which
try in which currency controls ficiaries as are not enemies and reimbursement through special payroll taxes is included in revenues.
are in effect? An American would thereby prevent the vesting of
«The table lists> first> major works program and a suspension
wish to prevent such funds from trust property in the government, budget ^expenditures other than of all projects not contributing difalling under the control of a
It should furthermore be military andr interest., This total,, reqtly to some essential defense
foreign government. He would stressed that a trust can be set which the committee designates purpose, with a resultant saving
also attempt to arrange that the Up jn Such a manner that no es- the 'reducible areas,' comes, to in fiscal 1952 of $750 million. I
funds can be managed and utilized iaie and inheritance taxes would $24.9 billion.
"(3) Drastic curtailment of Fedeven if American blocking and become payable upon the death. . "Military services and interest eral aid, grants, subsidy and spevesting legislation should apply to
any
beneficiaries or of are listed separately—the former cial services programs, largely by
them. In such a case, an American the settlor. If assets are held in not because the committee ac- making the States responsible for
p.V
come.
other kind of property, including
patent rights and art treasures,
con-
ra0aVsonsmrefusemito" deblock sudh
aeoiocK
sucn
reasons
funds
tax usually paid by
non-resident alien individuals, Puwei*
••
foreign banks and other foreign. Even rif American blocking
companies. For, af 'the foreign { (freezing) orders should apply to
company is deemed to be a per- a discretionary trust, the trustees
sonal holding company within the would probably have no difficulty
meaning of American tax law, a in managing the trust funds and
personal holding company income, m distributing .the income and
tax ranging from 75% to 85%,may capital; to such beneficiaries as
be levied under certain circum- are not residing in a blocked
stances, on its undistributed in- country. If one or-several bene-
using the funds held
company
York,
:New
World
European were to
foreign
or
sents
a
showing
ments
in
Second
the
during
ST hafnarach ^rnatl Aid (no details In Budget) 5,554
"
_
_
'
10,574
1,896
4,392
in case of the death of ^Utor
beneficial owner • Further-,^ of
more» if the beneficial owner is "P^ ^
cTnnht.or
blocked by the United -Withholding
Tangier bank
States Government
1
s
1,744
company
a
or
,
3,7^1
3,016
the
/
wrong
iin the
:
■
10,702
v
nad acted w
Expenditures for Aids and, Special ,,
the di^eUon confe^ed ,
f°r programs df -states,. lo- - •
to
believe that
me persons ao
caJ gavernments and others (civil^
'property held in the uSted StS known to the U. S, Government,
pother,than International
' 10,074
riame of
Uruguay, Mexi- he may have to Pa^ a u- s- in"; mfpS
thP Roval Netherlands 0ther Current Operating Expenses..
1,836
Mother
2,077
2,577
-
at
any
time
assets to the
be provided that the
terminate
the trust
he COIamlttee reaches a nonreduction goal
$8/4
Volume 173
Number 5002
.
.
.
The Commercial and Financial Chronicle
(1547)
19
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#"Y4
REPAIRING
•"r,
•
"BAY 1"
W
a
by
a
rates
or
9.3%, reaching
charged for both
gas
a new
of gas
ship's anchor. "Bay 1," laid in 1912, is 'one, of six such
holders of record.
kilowatt-hours, and sales
placed in effect April 15, 1950. This
by 8.6% and 3.9%, respectively.
year,
except 1948. The gain
served at the
thirty
was
connected to
our
lines than in any
previous
our
operations.
year.
These expendi¬
final action
on
the
increasing
'
"
*
'
•
•
NET EARNINGS for the
THE ''SUPER INCH"
gas transmission line for the importation of gas from
and
placed in commercial operation at the end of the
year.
a
single
year.
was
the
largest financing
ever
carried
PACIFIC GAS
,
;«U
age
completed
common
stock
were
'
'
1
'
K
1
nfl r-
$2.62 per share, based
^
'
1
on aver¬
shares outstanding, compared with abnormally low earnings of $2.10
share in the previous year.
per
,
successfully
by the Company in
on
1
,*
$7,000,000
:
NEW SECURITIES
aggregating $158,904,000 par value were
marketed. This
revenues
application.
'
was
were
annually, effective February 18, 1951, pending completion of hearings and
tures will be further reduced in 1951.
Texas and New Mexico into Northern and Central California
annual basis
$18,275,000 annually, effective in 1951. In January
1951 the Commission established interim rates
peak of $192,480,000 established in the previous
on an
first increase in electric rates in
was our
filed with the California Public Utilities Commis¬
was
sion to increase gas rates
CONSTRUCTION EXPENDITURES aggregated
$168,634,000, compared
with the
San Francisco.
years.
AN APPLICATION
126,995, bringing to 2,386,210 the number
year-end in all branches of
power to
;
HIGHER ELECTRIC RATES totaling
$8,800,000
172,683,000,000 cubic feet, exceeding the corresponding figures in 1949
were
bringing
ownership of the Company. At the year-end the Company had 170,498 stock¬
and electric service contributed to this gain.
MORE NEW CUSTOMERS
AND
,
A copy of our 1950 Annual
•
power
THERE WAS A GAIN of 10,031 in the number of those
participating in the
peak of $237,437,000. Moderately higher
SALES OF ELECTRICITY totaled
11,042,000,000
CABLE!
being repaired following damage inflicted
PG&E power cables
GROSS OPERATING REVENUES exceeded those of the
previous year by
PG&ET TRANS-BAY
12,000 volt PG&E trans-bay cable bringing
to San Francisco is
$20,213,000,
President
ELECTRIC COMPANY
*
245
MARKET
SAN
FRANCISCO
*
Report to Stockholders will be supplied
upon request to
•"
E. J. Beckett, Treasurer
STREET
6, CALIFORNIA
.
20
The Commercial and Financial Chronicle
(1548)
.
.
Thursday, April 12, 1951
.
\
_
Immediate
Export Outlook Is Good!
York City
Vice-President Irving Trust Co., New
shipping services and the like—
foreign countries will
to their gold and dollar re¬
a
and
have
dollars
more
Estimates total U. S. expenditures
billion
in
1951,
dollar
which
at
they
like
to take my text
the report of the In¬
ternational Development Advisory
exports.
improvement, although so far
improvement.
Tne li¬
by foreign countries is no
$4 billion per annum,
than
based
Rockefe ller
Comm i 11 e e,
gards
which
trade to the
otherwise
the
as
was
appointed
the
know
be as favorable
President,
attitude
pursuant to
the
1950
factors
Pub¬
as a
these
information
what
on
Maffry
August
now
censing procedure in the Pniliphas
settled down and
"As
their
for defense, more and
Western
activities
be
can
expected
control.
under
brought
will
materials
to
and
will
tion of civilian
Scarce
from
manpower
the produc¬
from
shifted
be
be
essential
more
Factories
to
diverted
be
essential
uses.
economic
normal
their
of
less
mobilize
Europe
resources
more
and
States
United
the
way
this
United
the
in
States
another.
How do I get
figure?
First, it seems to me
that imports
scarcely be less
can
during 1951 than $11 billion, un¬
of
less,
of
sources
major
some
course,
cut off by
supply are
extension of the war in the Far
an
East.
Second, I guess foreigners
receive
will
services
This
to
the
from
of
sale
about $3.5
us
billion.
affected
to
figure
will
extent
by the expenditures
some
be
military items. on the part of our Armed Forces
and
the
Far
East.
controls will bef in Europe
tightened." Then the Board says:' Third, private gifts,and loans will
"The
Advisory Board recom¬ provide about $1.5 billion, and
Existing
to
export
that
mends
ercised
vigilant
shift
to
be ex¬
care
foreign
to
coun¬
tries their truly essential imports,
treating their needs on the same
ffirst things first' basis as our own
—no
tougher, no easier." It goes
on:
"Unless
flow
adequate
an
materials,
necessary
of
equipment,
parts is maintained, our
and spare
fourth, government gifts and loans
will provide, I guess, not less than
$3 billion.
So, if
will do a little mental
you
the
looks
will
1951
of
shortages
United
and
plans
for
spurring
dered futile. Even the current out¬
put of these materials, which
are
indispensable for defense produc¬
and,
of
course,
they
anticipate higher prices despite
controls;
the
imposition
of these reasons,
For all
be inclined to
buy
of their resources,
arithmetic with me, we have im¬
availabilities
lar
countries
easing
has
of
lor
parts of the world.
give you some examples:
that could come
food-production drive and
expanded
development
of
nificant
that
board
a
in
to
any
of
extremely sig¬
Public Board, not
a
businessmen
sense
a
board
ing the export trade,
reach
It
conclusions
seems
that
its
to
me
in
and
not
represent¬
able to
was
those
terms.
significant
also,
the
mendations
recom¬
of the Wash¬
which it con¬
sulted, both civilian and military.
ington
by all
agencies
'
I conclude from this—and I had
the
privilege of being
tant to
a
consul¬
the Board and of partici¬
pating in their deliberations both
in
Washington—I con¬
clude from this that the portents
here
and
regards export policy are fa¬
vorable.
I speak of policy, not
ias
■"
!>■
♦Stenographic record of address by Mr.
Maffry at the Get Together Luncheon of
the Export Managers Club of New York,
Inc., New York City, March 21, 1951,
during
ahead,
in
ment
the
extraordinarily
dollar
earnings
with
high rate
of
by Canada, will
rying
Another
is
case
Indonesia,
ample dollar availabilities
wnere
other factors
ought to create
fairly good market for American
All of those instances
products.
are
ledger
side
favorable
the
on
of
the
regards import restric¬
as
There
which
is
one
obliged
cases
put
to
the
of
side
not
other
some
are
other
would
I
change in
the United
Kingdom or in the sterling areas
generally, with the exception of
Pakistan which I have mentioned.
expect any
There
be other isolated in¬
may
stances, but no general easing of
import restrictions in the sterling
area.
Western
Europe
of
is,
all
the
trading areas of the
world, the only area which is now
principal
dollar-deficit
is
which
cash
not
out
it
will
and
There
exceptions,
no
tnat our markets in
means
Europe
United
of
the
Europe are
countries.
practically
of dollar
all
Western
dollar-deficit
which
the
from
Practically
of
the
of the world
buys
States.
is
today able to pay
current income for
of
countries
It
area.
trading area
only
are
much
continue to be re¬
limited by the lack
more
situation
to
Now, in 1951, as in other recent
years, this situation of dollar defi¬
cit in Europe will be eased by
substantial help from the United
States.
Under
existing legisla¬
which
for
when export
Instead
of
of
means
worrying about
the principal
payment,
difficulties this year, and increas¬
ingly as the year wears on, will
be about
supply and about the
controls
which
shortages
As
severe.
is
is,
is
would
not
Another
to
example which comes
is the example of the
mind
Union
South
of
there has been
Africa,
where
relaxation of
some
Beyond that, no one can say with
certainty
any
the
what
assistance will be.
scale
of
to
be
like
the
situation
particu¬
and
war
larly towards the end
is
to
fairly
The situation in 1951
all
at
during the last
the last
of
The United States
war.
as
more
interest
of
like
economy
far different economy than
in
1945 and
1946.
It is
a
was
it
a
vastly different economy than it
was at the beginning of the last
As
war.
with the
be¬
last
war,
production of
the
compared
ginning
of
industrial
United
the
States
has
the
doubled.
In
other words, we produce twice as
large
volume of goods and serv¬
a
ning
as
of
did at the begin¬
we
the
last
other
As
war.
indications of the
kind,
same
our
output of electric power has
siderably
the past
has
greatly
production
fense,
total than
I would guess
increased
over
The amount of
being diverted to de¬
other hand, is a
on the
smaller
much
con¬
more than doubled over
ten years, and the labor
the past ten years.
yond.
grow
supply for export,
what
reassuring.
is
multiply
and
regards supply, how¬
ever—that
which
will
appear
force
Europe
of
have
managers
will continue at the
rate of about $2-$2.5 billion per
annum
until the middle of 1951.
to
very
case
worries at all.
no
tion, the amount of our assistance
b6om
a
you
worry being replaced by an¬
other.
I never expect to see the
market for
Canada
the
would
It will be just a
American exports in 1951 and be¬
make
I
one
ices now
exchange.
factors in
outline
briefly.
about
concerned
export
like
ex¬
They will
cases.
emergency
you—I
■
of payment
means
special
certain
on
ledger.
import restrictions in
a
in
day
tions.
the
be
wor¬
they have in the recent
as
cept
during 1951.
stricted
combined
Canada,
mar¬
proportion
during the last
Now, these
broad
are
the
of
war.1
measures
certainly
of the aid to Western Europe
cannot
general and cannot be
makes
certainly change somewhat, but it
is increasingly clear that even if
the aid now goes forward under
as
guise of assistance to enable
Europe to participate in
the common defense effort, what
he an adequate supply
of goods
for export if government policies
a total of $19 billion.
The
questionable item in that list
is perhaps the item for govern¬
gifts and loans. This figure
scarcely be less than $2 bil¬
lion because that much is
already
provided for under existing legis¬
lation, and there
can be, I should
think, scarcely less than another
$1 billion provided under new
legislation exclusive of assistance
foreign countries in the form of
I think the
conservative one.
a
foreigners
Accordingly,
have, it
billion
1951,
buy
to
seems
me,
exports
our
will
about $19
coming to them
which they could
tunities in the Union this year.
Latin
In
in
America, particularly
South
America,
general
during
use
to
for other pur¬
or
they will use
$12 billion to buy American
about
there
easing
which
additional
for
markets
a
import
of
will
is
open
our
up
ex¬
I mention particularly the
ports.
cases
of
Peru
and
there
continue
will
substantial
to
of
amount
Europe.
Western
to be
a
assistance
The pattern
will
the
Western
Europe will want from the United
States and what Europe will get
Chile, Colombia,
and I would
also
include
Argentina on this
list, although with some qualifica¬
tions.
The Argentine market has
getting from us during the past
few years under ECA.
This means
that
Brazil,
Uruguay,
know, partly
refunding of com¬
as
you
Import
port
because of
lar-
In
through
the
and
Bank
Ex¬
partly
sharply improved dol¬
earnings
United
think
I
poses.
in
trade
with
the
the
things Europe has been
same
it
will
getting cereal
be
grains, now some coal again, fats
and
oils, cotton, tobacco, and a
wide range of other
Western Europe
current
articles which
needs from us as
supplier to maintain pro¬
consumption levels in
duction and
States.
the Far
East, the market in
has
been
considerably
Pakistan
from the United States are about
the
face
of
requirements for
the
rearmament.
'
exclusive
$1
billion
that
be
an
level.
As
level
a
this
means
of
the
total
billion
is
attained,
you
all
level in
our
ex¬
1944, when the export
swelled by
heavy lend-
lease shipments.
As
interest
indicate, I
ers
will
billion
have
billion
do
with
which
$19
they
to
the other
to
perhaps aca¬
I should
you,
suppose,
their disposal.
think
of
matter
a
demic
what foreign¬
the
other
$7
have at
I think they will
they will
billion
will
altogether.
use
about
the
I
$12
buy our exports.
Of
$7 billion, I expect about
under
arrange¬
Pakistan and
Kingdom
release
should
of
the
with
respect to
dollars
against
Pakistan sterling.
re¬
foreign
history with the single
United
and
good market for
a
exports
an exceedingly good
furthermore, will be at
was
continue to be
between
year
was
ception of
machinery,
ments
highest
trade
and
dollar
1947, which
year, and
icals
will
trade
export trade will be back to the
level
broadened, in particular for chem¬
extraordinarily high
matter of fact, if the
$12
of
This
month.
a
military
of
at the rate of about
or
export
at
Board, in the course of member
deliberations, was encouraged
in these views and in these
I will
mac
the
situations,
mean
that
equipment,
me
that
period
suggest
for
and
that
exports,
strategic-material production."
in
Canada, as you know, ,all
emergency import controls have
been
suspended.
This develop¬
arrears
damage to their economies
an
In
mercial
than all the good
about
restrictions
reason*
inese
is
import restrictions with particular
ports, $11 billion; services, $3.5
reference
to
imports from
the
billion; private gifts and loans,
dollar area.
As a result, there
$1.5
billion,
and
government
will be increased export oppor¬
gifts and loans, $3 billion.
That-
on:
these countries could result in
foreign
many
of the
neglect the essential needs
for
import
because
of
shortages,
brought
improved,
are
of
turn in the right direction
a
what
combined with the improved dol¬
military end-items.
seems
up to the limit
will be inclined
ably higher prices.
Now, this fear
figure is
countries
deprived
essential imports." And it goes
It
controls.
they will
only at consider¬
these
the
price
of
to
a
tighter export
so,
tion, can be expected to suffer if
the already strained economies of
from
from
the
anticipate,
They
correctly
restrictions
more
year.
increasing
supply
States.
fairly
of
banner
a
anticipate
generally
can
"To
pic¬
Foreign importers and other for¬
eign
purchasers
of
our
goods
ment
the production of strategic mate¬
rials in these areas will be ren¬
I
so
past about
picture which
export
make
for
All
the
are
the
in
tors
dollar
extremely
good.
I
other special fac¬
think there
most
ingless.
therefore,
availabilities,
ture
the
of
score
aim of mobilizing the strength of
the free world will fail. All plans
increasing food production and
manufacturing will become mean¬
dollars
Export Controls
And
ket, too, snould improve to some
a
On
one
or
that
and
holds
diminishing asset.
extent
Available
Be
to
buy ahead, and will be in¬
buy Amer¬
clined to stockpile goods in many
ican goods—I would estimate that
categories that they fear will not
foreign countries will receive dur¬ be available in the near future or
ing 1951 no less than $19 billion will be available
from
value
who
a
pines
we
will have available to
4
which
published, contains
some language which I would like
to read to you.
The Board says:
Board,
just
is
the most part
for
and
picture.
largely
also
be
to
of dollars which foreign countries
this
of
export
the
find
—
work. The re¬
port
in
I
extremely favorable.
As regards
dollar' availabilities—the
supply
my
Point
make
a
to
are
how
On
*
is
favorable
—
words
own
us
These
to
advise him
the
conceive
correct conclusion,
look then at the economic
opment Act of
Board
I
as
the Washington agen¬
of
this
If
Devel¬
let
lic
areas
cies to be.
Interna¬
'
tional
under-developed
to other export markets will
and
by
of export
maintenance
the
lose
constantly
anyone
holding
and
of
less
tirely favorable.
I sincerely hope that the atti¬
tude of American business as re¬
Board,
well founded it
that the dollar will
me,
export managers will not be
that the portents
say
to
taken
Incidentally, the current
accumulation of gold and
dollars
export policy, are en¬
regards
as
there is
1951
gold and dollars dur¬
have for the first quarter of 1951.
practice, and
the fears, very
seems
limited
and
would
in
operates lairly well.
Tne reserve
position of the Philippines has
Dollars Will
I
States
rate
reserves.
today from
United
the
by
ing 1950.
large available
for
about $3
of
somewhat lesser
a
that
accumulated
abroad will aggregate $19
furnishing basis
thus
obtain
to
extent
at
or
than
rate
"flight from the dollar," and foreign
use
can
the
to
for
Even in the Philippines
an
serves
Foreign trade expert reviews current international trade situation and foresees continued heavy demands for U. S. exports.
nations
paid
Government.
and I tnink
billion,
now a
of
purchase
add
By AUGUST MAFFRY*
Points out there is
will be used for the
services from us—
billion
$4
Japan is rather
I
it
mention
that
me
ments
the
special
a
because
return
it
case.
seems
to
of
large seg¬
of Japanese foreign trade
to
private hands is a most favor¬
able development from the point
of
view of
the
export trade and
will create many new opportuni¬
ties for markets there.
Japan is
also
enjoying
considerably in¬
rising dollar
income which can be freely dis¬
posed for the purchase of Amer¬
and
creased
ican
a
still
the Middle
of growing im-«
portance if you take a sufficiently
long-range view.
I should not
expect much change in the Middle
East
as
regards import restric¬
Finally,
East,
a
mention
I
market
tions, although the situation there
will be improved because of in¬
creased
dollar
availabilities.
Markets in that area will also be
somewhat better in 1951 than in
other recent
will
periods.
in
general
prefer
to
them
into their reserves
against another day.. There are
put
goods
and
goods
not
which
with
are
reference
procured
to
and
be
acute as they
during the recent
no
and
business
The
view
as
why
reason
are
much
,
they
shortages
were
at
There
there
times
is
should not
policies
are correct.
bottlenecks
in
fairly obvious.
can
to
but
war.
principal
one
they
see,
So
fall
far
pretty
into the field of the ferro-
alloying
metals
ferrous
;
metals.
and other nonThese
are
the
tight situations and, of
affect a lot of export lines
directly or indirectly
There are
really
course,
also
bottlenecks
some
as
regards
skilled labor.
Again,
the
the favorable side of
on
picture, there
are
good
pros¬
pects that, in the very near future
and perhaps within the next few
months
in
there
will
Washington
be
established
single
a
inde¬
claimant
pendent
exports.
agency for all
This would be an advo¬
cate
Washington
in
trade,
be
to
that exports
see
tained
for
that
and
export
under an ad¬
duty it would
an
agency
ministrator whose
are
main¬
friendly foreign
countries get the
United
order
goods from the
which they are
which they need in
States
and
to
to
maintain
their
own
economies.This, incidentally, is
of
one
tions
I am talking now, many signs—I would not want to
which are imported exaggerate them, but there are
into Japan through private chan¬ many
signs
nevertheless—of
a
nels
particular
application
no
the
of
major
recommenda¬
the
International Devel¬
rather than dollars, or
opment Advisory Board to which
gold, and hence, that they will in
I referred eariler.
general be inclined to spend their
The
current
available dollars rather than to
problems of the
have b'oods
goods.
about
have
entitled
Now, in all of what I have said
I have assumed that foreign coun¬
tries
which
flight from
use
that
the dollar, if I may
It has its origin
term.
export
tried
lar
trade
to
not, as I have
probleips of dol¬
are
show,
availability.,
they
are
or
I
do
will be in'
hot
think
^ny
acute
problems of supply. I think
they will be problems of machin¬
sense
ery, and
I refer particularly to the
Number 5002
Volume 173
.
.
.
The Commercial and Financial Chronicle
(1549)
administration of controls growing
of
out
and
scarcities
of
out
toe
rise in prices,
to
it therefore seems
the export fraternity
tnat
me
direct
should
efforts
its
unceas¬
ingly, over the next period, to tne
problem of the efficient, effective
and
practical administration of
export controls, price controls and
these
to be
going
are
think
I
controls.
related
other
real
your
connection the
I mention in this
which
problems
with
connection
arisen
have
in
priorities;
DO
were
pany,
Com¬
the board
to
It
announced
was
annual
meeting
of
the
at
30th
organiza¬
the
tion held at the Benson Hotel last
week,
that
the organization
now
has the largest number of security
dealers on its membership roll.
The increased importance of in¬
vestment security dealers in serv¬
the
ported
general
by
evidence
eral
Mr.
public was re¬
"All
Daugherty.
indicates
public is
the
that
more
gen¬
active in the
Defense Order priorities. securities market today than at
These problems are of two sorts. any time in the past decade," he
There is, first of all, the effect of said.
DO
domestic ratings on export
"This is especially noticeable in
availabilities.
This is a problem the increased attention
being given
that
is,
which
some
and
instances
some
domestic- ratings
into
export
made
it difficult
meet export
problem
of offsetting in¬
declining purchas¬
the
of
power
people
are
in
dollar.
economic
every
as
a
of
means
has
offsetting the
chased
individuals have
mutual
elected
the
following
President: Eugene Holland, Con¬
tinental Illinois National Bank
pur¬
investment
fund
Irving Joins
Bache Foreign Dept.
Treasurer:
William
T.
Bacon,
Jr., First National Bank.
They
Secretary: Gordon Bent, Bacon,,
Whipple & Co.
pressed
to be
by
more
the
highly im¬
opportunity
to
of
their
like the
money.
Allyn &
Th%y also
liam
Co.;
Blair
&
Co., 36 Wall Street, New York
City, members of the New York
Stock
Bowen
Blair, Wil¬
Richard Ver¬
&
high dividend rates being
Exchange,
as
Assistant Man¬
of the firm's foreign depart¬
ager
Co.;
million, Smith, Barney & Co.;
Harvey H. Orndorff, Kebbon, Mc-
paid by most funds."
Malcolm Irving has joined Bache
•
Directors: W. B. Hamilton, A. C.
benefit from professional manage¬
ment
Lynch, Pierce,
Malcolm
&
Trust Co.
shares than at any time previous.
seem
of Merrill
Fenner & Beane.
new
officers:
"In the past two years a
greater
of
The retiring President is Robert
Hunker
CHICAGO, 111.—The Street Club
effects of inflation.
number
L.
Elects New Officers
level
turning to investment securi¬
ties
Cormick & Co.; Francis
Farwell,
Farwell, Chapman & Co.; Robert
Sanders, Harris, Hall & Co.1
"Street Clob" of Chi.
More
ment.
Mr.
Irving
was
with Albert de Jong
formerly
r: /
& Co.
because in some situ¬
of you
ations
DO
the
confronted
has
know
I
to
flation and the
ing
elected
of directors.
ing
problems.
Pacific Northwest
Janney,
these
have
cut
availabilities
and
impossible to
or
demands.
This is
one
of the problems under DO
ratings
priorities.
The other, of
course, is the question of DO rat¬
ings for export. There are certain
special DO ratings for export, but
still no general ratings which are
and
DO
satisfactory
of
one
or
the
fronting
RAILWAY COMPANY
workable.
This is
problems con¬
major
the
export
trade
over
price
con¬
the next few months.
As
regards
export
SUMMARY
trols, I understand that the issu¬
ance
of
the
imminent
regulation
new
and
I
hear from
Business
is
heavier
some
that it will be pretty
However, I have not seen
quarters
good.
,
The export
year
industry has
a
have
Taxes totaled
said that 1951 ought to be
D
year.
very
it
am
really
a good
speaking in
conservative terms.
will
be
an
cent over
I think
extraordinary
share
year
only the machinery
in Washington can be made to
work efficiently and effectively,
and if only our manufacturers and
other
suppliers
are
sufficiently
enlightened
as
regards
export
policy.
cars were
$35,101,000.,
1949, and amounted
of Common
an
to
operating
expenses
Maintenance was
kept at less than 2 per cent of
increase of $13,231,000.
or
60 per
$1,652 for each employee, $6. for each
Stock, and 21
cents
for each
dollar of
operating
PROPERTY IMPROVEMENTS and EQUIPMENT
and
Expenditures for additions and improvements to fixed
totaled $10,410,000., and for new equipment
and
equipment betterments $12,865,000. A section
of the main line, 5.28 miles long, was relocated on a
lower grade and an old single track tunnel was
replaced
by a double track tunnel, at a total cost of $13,000,000.
/
In the past 5 years, capital expenditures for
improve¬
ments,
modernization and
equipment amounted to
Daugherty Pres. of
Investment Bond Club
Of Portland, Ore.
PORTLAND, Ore.—R. K. Daugh¬
erty, member of the Portland in¬
of
1950
over 1949 because of
of bituminous coal and merchandise
freight; while
modernization at the
beginning of 1951 involved
capital expenditures of approximately $21,369,000.
The
equipment program for 1951 includes 3,000 new
hopper coal cars, 1,000 box cars, 15 switching locomo¬
tives and 4
heavy road locomotives. /
property
firm
FOR
revenues.
for exports if
vestment
REPORT
earnings improved substantially
movement
adequate, and bad order freight
total ownership.
good
I
to look forward to.
and
OF ANNUAL
passenger traffic continued to decline.
The portion of
operating revenues consumed by
was reduced from 76.57
per cent to 69-29 per cent.
it and hence cannot give you any
details.
$114,097,000., all of which
,
The
made from the Com-
were
CONDENSED
Company, with others, is experimenting with
of
coal-burning
INCOME
STATEMENT
Comparison
Revenues
1950
Other Income:
and
with
$ 92,095,125
Inc.
62,890,231
Freight—Coal
Inc.
Other
4,769,810
8,241,274
Inc.
$167,996,440
1949
Per
Cent
$ 10,997,510
14
7,085,984
13
'
Dec.
Passenger. .
Mail, Express and Miscellaneous.
727,713
.
,
13
1,693,687
26
K.
$ 19,049,468
13
Inc.
4,811,854
62
2,073,369
Inc.
97,953
5
Inc.
$ 23,959,275
15
$ 24,367,019
Inc.
$
32,434,826
Inc.
'
Income—Equipment and Joint Facilities—Net.
Other Income—Net
R.
Inc.
12,573,511
$182,643,320
Rent
two
turbine
electric locomotives,
which, if successful, will constitute a major advance in
the
development of more efficient and economical coalburning motive power.
types
Uncompleted authorized improvements
•pany's treasury.
Daugherty,
.
...
Daugherty
Expenses
and
Other Income Charges:
Way and Structures—Repairs and Maintenance
Equipment—Repairs and Maintenance.
Interest
C. N. Tripp
on
Butchart & Cole, has been elected
President of the Investment Bond
\,'2
Inc."
557,753
1
Dec.
259,601
3
2,366,427
2
13,230,559
60
14,903
1
$116,410,282
Inc.
35,100,982
Inc.
$
$28,116,823
State, County
L. M. Handel
6
589,475
9,386,648
Railway Operating Expenses
Taxes-Federal...
1,478,800
50,221,789
Transportation—Operations
Other Expenses
Total
and Local
Funded Debt.
Total
6,984,159
1,823,577
$153,334,841
Dec.
Inc.
$ 15,582,083
11
Club of Portland.
Other officers elected were
Charles ID Tripp, Charles N.
Tripp
Co., Vice-President, and
M.
Leonard
Handel, Handel, Lundborg &
Co., Secretary-Treasurer.
Gurian,
Merrill
Lynch,
John J.
Pierce,
Fenner & Beane, and Frederic F.
$ 29,308,479
Net Income
Sinking Funds
\ na
Miscellaneous Appropriations
and
1,432,219
Inc.
8,377,192
40
605,676
$
Dec.
30
8,982,868
48
•ll
Ui;
jj
Balance
of
Income
,
21
$ 27,876,260
Inc.
$
'"1
Chronicle
The Commercial and Financial
Thursday, April 12, 1951
;
..
(1550)
22
Continued
from
primary importance have
guarantee
which the
Federal
Housing Administration
.•and
the
insurance
which
the
Veterans' Administration has pro¬
but
9
page
Life Insurance Investments
Securities Salesman's Corner
of
the
been
vided for such loans. At
a
By JOHN DUTTON
position today than ever
because the country, with
before
scientific
first
studies
of
adapta—
bility in fitting the right man to
the right job in sales work ever
attempted in this country. About
25 years ago
the Metrooolitan Life
Company had the probvery high turnover among
Insurance
lem of
its
a
In fact, this was true
of the life insurance companies in
general
They placed their difficulties before George O. Swartz
agents.
who
had
been
personnel
doing
work for the J. G. Brill
of Philadelphia,
His
was,
,b,uslness T
df,
the
Company
answer
basis of statistically accurate
probabilities, why not do the same
with
your
salesmen?"
In other
words, "Get the right man the first
category
and
related
A little knowledge is a
dangerous thing. It is a difficult
task, but let us try it."
So Mr. Swartz set up a card systern for the Metropolitan's sales
employees. On each card holes
were punched, indicating the characteristics of each agent. No two
cards were alike but it was a
simple matter to run them through
a tabulating machine and all those
that had a certain characteristic
could be studied as to his success
or lack of success.
Then those
with
two
characteristics
alike
were analyzed. Various groupings
and cross, groujnngs
,
The studies avoided the wastage
leaders in
who have
why
new
into the
which is always based upon genthe investment business eralities.
For example, it was
studied the problem of found that an extended period of
blood does not come unemployment preceding engage-
securities
and
why the
business
why the turnover is
.
.
high
so
.
.
,
.
why the life insurance busihas grown to such large pro-
ness
compared with the investment securities business, don't
go to a man like Mr. Swartz and
portions
find
life
as
the
what
it
Years
answers.
insurance
was
successful
that
made
ago
the
found
buisness
out
a
man
a
business
producer and
Every man who is
engaged in the retailing of securities today has a certain set of
characteristics.s Those
who
are
it has paid off.
successful
the
had
qualifications
for
making a go of it—the others
not.
Why not find out what
it is that makes a good securities
did
salesman?
^.
Mr. Swartz conducted
labora-.
a
tory for the study of men. He took
the 15,000 agents of the Metropolitan at that time, and he worked
out
set of about 30
a
tics.
characteris-
For instance, he studied age,
nationality,
height,
weight,
edu-
cation, the nature of. experience,
whether single or married, if married did the wife work too, num-
ber of children, etc.
When he first
took this job one of the sales exsaid to
ecutives
those
fellows
*
Why
to conclusions, maybe
maybe not.
Let us find
jump
will,
out.
Let
us
study
Let
our men.
such
have
as
their
other
today, possibly you can
see in it the way to a bigger and
better investment business in the
business
and new blood. Finding the right men for this business
manpower
is the first step in that direction,
*
With Robert D. Bowers
us
own.
characteristics
Let
us see
what
has happened in the past with men
^Lp^d ?wo
S
judged t0 be a generation ago. It
(Special to The Financial' Chronicle)
DENVER,
Mattson
bard
as
t0
Colo. >—
has
•
Roger- H;
'
t',
•
com-
a
Markets
•
cus-
.
Investments
\ -
are
ciated
~
LAKE
only 3% of total assets.
many problems
asso¬
are
There,
with
stock
investments.
Perhaps the. biggest is the
CITY
com¬
ques¬
tion of valuation. The importance
surrounding
problem
for .statement
valu¬
purposes
is
wirioiv understood
the
industry. A better perspective
Can' perhaps
realizes
outside
of
that
be
secured
if
one
the
capital, surplus
and special reserves of proprietary
funds
-
J. A. HOGLE & CO.
New
SO BROADWAY
Tel., WHit.hall 3-6700
York
1915
Slock
Principal
agreed to.
of
was
the
guar-
part by the
Government,
anteed in whole or in
States
united
resist
j
the
temptation
at this
point to enter a discussion on the
merits
of the Federal Govern^
ment's entry
into this field, yet I
observing that the
inflated value of real
estate today is in no small measure
the result
of an excessive
liberalization of building credit
aided and abetted by the activities
of the Federal Government in this
field over the past several years.
cannot
help
patently
stocks present an en-
Common
tirely different problem.
recent years a great
in
inevitably
will.be a relatively small sideshow. Recent legislation applicable to
companies operating in
New York State permits 3%
of
assets or one-third of surplus to
investments should be payable
Rstate
dollars. Common stocks
course>
Exchange
Exchanges
NEW YORK 4,
in
invested
be
common
certainly
stocks.
ob-
nothing
N.
Y.
Teletype NY 1-1656
office use is, of
for home
fairly constant. The flucnation is caused by the acquisition
0f reaj estate in depression periods
as a ,resuit 0f mortgage loan foreclosures, and
the reduction of
these holdings as business condiUons
improve.
Thus
the
dollar
jectionable in this legislation, yet
examined coldly it becomes ap-
owned by
jjfe insurance companies today is
less than it was in 1940, and the
parent that, even if the maximum
made in common
to
is
There
commitment is
stocks, there will not be any ap-
preciable
improvement
in
the
over-all yield on a portfolio. The
danger, as I see it, is that if 3%
of the assets is invested in common
stocks, 97% of the investment
devoted
will be
attention
to this
real
of
amount
estate
percentage amount has declined
22% of assets. It would be
even
less than this were it not
the
for
tne
Admiring the antlers
unattractive but
useful, feet may lead to trouble. ;
been
pjicnase-iease-oack
blossomed into
have
recent
jn
developments
sponsored by
0f the larger companies and
some
that
housing
have
which
deals
vogue
years,
category.
Policy Loans
and scorning the
Mortgages are divided into two
"other."
of
history
The
and
farm
categories:
principal
the
in-
industry's experience
farm
mortgages is ilium-
would
lesson.
indelible
an
to
untrue
be
It
farms
as
a
say
mortgage loans
of its un-
result
depression
experience;
the burned child is twice
shy, lending on farms is, shall I
but,
say;
as
more
scientific
today
great depression farm mortgages
comprised 10.9% of total assets;
today the percentage is only 2.1%.
Other
factors
have, of
course,
been at work., Financial assistance
the
reduced
Federal
the
Government
farmers'
need
has
for
private credit; and a long period
of
prosperity; aided by valoriza-
described
involuntary investment by
life insurance companies. No company wishes to stimulate its holdings of policy loans. The volume
in this category is principally, a
function of economic conditions,
In periods of bad times policyholders use the cash-surrender values
of their policies as collateral for
loans either with the issuing cornas
an
pany
or
a
bank. No loan is a
the in-
sounder investment, but
regrets to see a
policyholder borrow on his policy
because it so frequently leads to
the termination of his insurance
protection. But the insurance cornpany stands at all times ready and
willing to make such loans. The
ability to borrow the cash-surrender value on a policy is one of
the features making life insurance
so popular today,
surance company
.
«,
"
Government Securities
than
formerly. At the beginning of the
by
Policy loans might be
I have saved until now a discussion of that portion of the assets which is held in United States
Government securities. At the end
1930 only 1.8% of the assets
of the industry were in this class,
In 1940, after almost a decade of
deficit financing on the part of the
government, the total had risen to
19.0%, At the end of last year the
of
percentage was 21.0%, but this
represented a decline from a yearend high point of 46% reached at
equal to approximately 10% of
property.
the close of 1945.
total assets. If for any reason the
The
classification^ labelled
Stimulatedby patriotic motives
capital of a stock company is im¬
paired or the unassigned funds of "other" mortgages* predominantly and the dCarth'^otrother available
on
a mutual company are dissipated,' loans
residential,., commercial sources of investment during the
fhe company is considered insol¬ and industrial property—has en-, war, the industry acquired a subvent and the authorities take over.
joyed a renaissance of popular! ty.istantial position in United States
This is not a pleasant prospect for- From 16.4% of total assets in 194Q.VGovernment securities-at yields
to 23.2%
in 1950 is the records-which were: beiowi the interest
any management to contemplate-.
Smaller insurance companies have rate that was required to service
While stocks are. only 3 % of the
•assets,
they
are
equivalent to an even greater percentage of policy reserves. There Was every
their total assets in mortgages of intention to work out of this lowabout one-third of what might be
termed
the
"protective
funds." this character. The low yield on yielding paper during the postbonds has contributed to the rela- war period. Such a development
Until the question of valuation is
satisfactorily handled, it is doubt- tive attractiveness of mortgages: actually occurred. What perhaps
the
unassigned
mutual companies, are
companies,
ESTABLISHED
the
on
question of preferred stock valuation. Nothing definite has yet been
pleasant
Stocks, both preferred and
'
SALT
As
not
other
follow
should
industry
on
in
DENVER
the
*
and
if they were bonds. Opinas to
what policy the
varies
ion
interest in making
of the
Members
as
period
curities, is sub-standard.
by
ation
■,
just
50-year
a
over
tomary ratios of open-market se¬
v>-
mon,
Western
basis
5%
that the
life insurance business has lost its
pleasured
FOR BROKERS AND DEALERS
SPOKANE
proach writes down the carrying
of
high-quality preferred
stocks without sinking funds to a
value
down substantially because their, taught
become^ affiliated
Prompt Wire Service
■To
factory formula for valuing preferred stocks. The most recent ap-
warrant, as is the case when securities are held by one or a small with
inating. Prior to the great depresgroup of insurance companies, is
sion, farm mortgages were a suba feature that is deemed to be of
considerable value by many bor-- stantial portion of the portfolios
rowers.
Recently the insurance of most life companies. Many of
commissioners have been taking these loans were made without
an
increasing
interest
in
the proper and careful investigation
method of valuing these "direct
on the theory that it was impos-.
placements" for annual statement s'ble to lose on farm land, but the
purposes. It is felt that many are
great depression, which particbeing carried on' an amortized ularly affected agricultural prices
should
be- written
• basis
which
and hence the value of farm land,
Stocks
•
on
surance
Humboldt Street.,
■
ioans jn this category
attempt to develop a satis-
an
been in
I
LOS ANGELES
concejve of
nptitftr fnr pwtHpai pnpr(Jv acwp
with Robert D. Bowers & Co.,-1249
."
in
the yearr
45%
However well intentioned these
There has programs, it is hard to overlook
Vnow it todav as it was for our
deal the fact that many homeowners
grandfathers to envision an effee- of controversy about the merits today would hold their porperty
of common stock investment for at a substantially lesser cost and
live substitute for railroad trans- life insurance companies, and I expense had the activities of the
DOr+ation
p
' .
do not propose to precipitate mygovernment not operated to stim,
Industrial and Miscellaneous self into this discussion. Yet I be- ulate artificially the demand for
Bonds ' have shown a phenomenal lieve that much of the enthusiasm housing. It is, I believe, difficult
surge to popularity, particularly for common stocks that is now to find any group that is main the past decade. This is a mis- prevalent would disappear if terially better off today as a result
cellaneous category of assets, but yields on good quality bonds were of the government's intensive in¬
is predominantly made up of the to return to a satisfactory basis, terest in the housing field than it
securities of manufacturing, mer- Since the obligations of a life in- otherwise would have been,
chandising and finance companies, surance company are in dollars,
Real Estate is a category of asAs price levels have risen and it follows that the bulk of its sefs fbat tends to fluctuate. Real
,s
favorable—that only 19 out of 100
who had been idle a month or production has expanded, more
before engaging in the work and more industrial firms have
of sales representative actually required financing. The life insurmade good and continued until ance industry, particularly the
the end of the first year. A safe larger companies companies, has
rule then was to refuse to con- secured an unusually great share
sider such men. Yet if that were of the total available financing of
done, 19 good men would have this
character. Responsible for
been lost. Even closer analysis of this situation, in large measure,
men was instituted so as to find has been the growth of "afreet
those 19 who had the germ of sue- placements." This current fashion
cess in them and yet discard the in finance is partly due to what
other 81. This was done and in-'are generally considered rather
volved studies too technical for onerous requirements by the Sethis article.
curities and Exchange CommisIt is possible that out of the sion on the disclosure of informaseveral thousand securities firms tion 'when securities are offered
now retailing investments in thisL Publicly;
partly to a belief by^
country that a very valuable file many borrowers mat it is cheaper
of material is available for study to place their securities directly
along these lines. Yet we seem to with an insurance company than
go on just the same as we'did to make use of the facilities of
back in the twenties; hiring and the investment banking fraternity,
firing salesmen with no apparent In addition, the flexibility that is
method other than trial and error afforded by being able to negoto back up our judgment. When tiate changes in indenture proviyou
look at the Life Insurance sions of bonds when circumstances
study those who have obligations,'
and also put them in.with those
who
in 1930, they
now represent 16.6% of the'total,
pubRc utility bonds are now in
ahnut the wmp nnsitinn that railbonds
decades
agQ
The 0Uu00k for utilities is
n(nJ considered as favorable as the
pr0Spects of the railroads were
of the assets
g.6%
more
him, "How about future. But before that is accomhave
obliga- plished 'we will certainly need
don t
you
think that is
something which may. be a handicap
to them?"
His answer was,
it
ment of the agent was very un-
who
tions,
"Public Utility Bonds" are the
-current favorites Increasing from
great appetite for stocks.
Much work has been carried
any
•
approximately
end
ATChir S t
1
to come out of the hopper that
paid off in better sales, larger individual production, and lower
rate of employee turnover.
time."
I often have wondered
its increased population and demand for goods, has grown up
around them,
groups.
man
a
that
in
the pleasure of
who was one of
the pioneers in the field of job
analysis.
He made some of the
Recently I had
meeting
ful that the industry will display
better
of
.
or
tion programs
for many commodi-
enabled farmers to pay
off much of the debt against their
ties,
has
Volume 173
Number 5002
.
.
.
The Commercial and Financial Chronicle
(1551)
wasn't fully anticipated was that
the Federal Reserve System would
hope
that
Senator
400,000 shares of
and
Douglas
other outstanding financial states¬
succeed
men
their
in
current
Tennessee
ef¬
at
Gas
common s'.ock of
Transmission
Co.
tem
sale
for
of
the
transportation
natural
at
gas
and
Aacki.closs, Parte
wholesale,
price of $24 per share.
extending from the Rio Grande
influence that, | 'Proceeds from the financing will Valley in Texas to
existing termini
bonds as came to the market at politics
plays in the monetary be used to pay $9,000,000 of out¬ near
Kenova, W. Va., and Buffalo,
field. Only history can properly standing
short-term
notes
prices which would endanger the
Y.
pre¬ N.
Since
operations
com¬
incurred
in
connection menced in
pegged rate of txk%. While the evaluate what failure to accom¬ viously
1944
to
the
present
purchases by the Federal Reserve plish this objective will mean to with the company's present ex¬ time, the
average daily delivery
System enabled the insurance in-, the welfare of the country and pansion program. The company is capacity of the line has
beepi
dustry, the banks and other in¬ particularly to the large middle presently engaged in increasing progressively increased from
of
our
vestors to sell their securities at class
citizens, who are the delivery capacity of its system
200,000 MCF to'more than 1,033,satisfactory prices and thus stim¬ the mainstay of this democracy. from approximately 1,000,000MCF
000 MCF.
The company's prin¬
of natural gas a
ulated a reinvestment appetite for
day at Jan. 31,
stand
ready to buy, through its
Market
Committee,
such
Open
mortgages, bonds and other loans,
it
had
another
effect
the
on
far-reaching
and
It mone¬
supply
economy.
tized the debt. The
money
to
the
reduce
1951
Tennessee Gas
vided
enlarged base for credit
expansion. The quantum theory
an
began to work with a
vengeance; and the obvious symp¬
tom
of
inflation, rapidly rising
money
prices,
v^uent
oecame
aooii
Corp.
&
Webster
and
jointly,
group
White,
headed
which
April
on
day, at cipal
a
of
approxi¬
terly basis since 1947. The present
Co., annual rate is
$1.40 a share.
&
Tennessee Gas Transmission Co.
10 offered
and operates a pipe line
sys¬
owns
customers
the
are
of The Columbia Gas
To Admit S. M. Srith
Auchincloss, Parker & Red path,
members
Mr.
Smith, who has been with the
firm
for
will make
years,
office at 52 Wall Street.
systems
System, Inc.,
To Get Exch.
On
April
Stock
Jan.
$55,-
transfer
$13,-
bership
amounted
473,015 and net income
to
was
'
082,887.
many
his headquarters in the New York
company for the 12 months ended
1.951
Membership
19
the
New
of
of
the
■
Exchange
Herbert
D.
Walter A. Burke.
a^d
post-war period has been
of tne most remarkable in all
one
monetary history. At
economists
no
able
and
time have
students
of
finance urged more strenuously a
retreat from the primrose path of
inflation.
At
time
no
have
their
consolidated admonitions received
or
less attention. Only now when the
seriousness
of
tne
inflationary
peril has become evident to even
the
in
man
been
the
street
disposition
a
has
there
treat
to
1950
the
of the
causes
malady rather than
superficial manifestations.
the
~
It
Senator Paul Douglas of
was
Illinois
who
not
only saw the
peril, but had the courage to act
in
the
political sphere. He de¬
much
serves
modifying
of
the
the
inflexible
stocks.
interest
policy of the Treasury De¬
partment and leading tne tight for
restr>rgti0n
a
the
the
to
Federal
Douglas,
nis
uy
maginiment
Re¬
Senate
of
the
problems resulting
pegging
country
firm
desire
dence
in
Federal
in
his
great
a
to
service.
restore
money
to
proposed resolution
Senate,
perhaps
was
the
IN
lowed
to
level.in
good
seekermore
an
beginning
soundly
,
the
is
monetary field and
anced
backbone
the
inflationary
savers
Stopping
the
supply
Reserve
in
inevitable
curance.
ficial
and
to
savers
and
to
on
have
"forgotten
been
men"
the
in
a
'
been
more
de¬
pen¬
have
'
•
PEOPLE,
RENTS, DIVIDENDS '
AND
$15,157,287
,
replace¬
OTHER INCOME
$16,116,639
,•
-
MATERIALS, SUPPLIES,
->
lillliL.
'
FUEL- AND OTHER C°ST
$69,245,244
—
at
TAXES
$55,609,021
only
pre-Korean costs.
RETAINED IN
BUSINESS AND
DIVIDENDS
,$33,947,092
DEPRECIATION
years.
$19,311,611
Chairman of the Board
increased; yet the
President
BOARD
wages re¬
James G. Blaine
by
money, namely interest
rates, have declined.
The monetary
policy of the
tion should not be
These
a
;
na¬
...
decisions
should
problems has not been
J
recent"
.
'
Robert J. Bowman '
Henry J, Guild
i
OF
DIRECTORS
Robert J. Bulkley
Allan P. Kirby
Harry C. Thompson
from the C&O's 1950 Annual Report. Copies available
Cyrus S. Eaton
William H. Lipscomb
Walter J. Tuohy
upon
-
Howell B. Erminger, Jr.
Walter S. McLucas
Andrew Van Pelt
request. Please address Room 8908
Robert R. Young
■
',
„
be
all
people.
Unfor unately, • a
scientific and academic
approach
to these complex and all
impor¬
in
■
political foot¬
The
of
mitted
wr:
Herbert Fitzpatrick
Robert W. Purcell
made in a calm, detached and in¬
telligent atmosphere for the good
tant
'
EQUIPMENT
CARRYING
MAIL AND BAGGAGE
the
ceived
ball.
cost of $100 million less than current
major railroad to accomplish this modernization
living has skyrocketed
valueof
money , has
deteriorated. Wages and salaries
r
COKE
$ 102,969,133
receptive to the removal of local trains which have become
The cost of
and
COAL AND
genuinely*
recent
MERCHANDISE
$133,095,252
than 1949 by 1,594,900 or almost 30 per cent.
All of the C&O main-line
through trains have been equipped
with modern streamlined sleeping cars and coaches. C&O is the
sions and the proceeds of life in¬
surance. The
thrifty people of the
nation
HAULING
I
HAULING
increasingly unprofitable with the development of highways. As a
consequence, unprofitable passenger train mileage in 1950 was less
oc-*
that
inflation with this important part of its better¬
new
behind it. j
mainly from dieselization and
from elimination of unprofitable
secondary and branch line passenger
line mileage. In recent years state public service commissions have
This, too, will be bene¬
serving class which lives
$327,338,31]
TRANSPORTATION SAVINGS resulted
mone¬
concomitant
Gross Income
'i
almost
an
and
ment values.
purchases of government
interest rates is
$6
freight cars and 144 passenger cars, centralized traffic
(CTC) and locomotive servicing facilities. In addition, 39
equipment, and at
the
tizing the debt—is the important
factor that will help to reduce in¬
flationary pressures. Yet some
rise in
over
improvements included 128 diesel locomo¬
was up $56 million
beginning of 1936, but it is significant that the cost of the
equipment purchased in these fifteen years was $260 million. In
making these expenditures, C&O expanded and modernized its
halting Federal
securities which have been
made. These
C&O's equipment debt at the end of 1950
.
restored
increase
—
equipment totaled $43
since the
to their dollars.
money
new
1943, thus bringing the total reduction in securities senior to Com¬
mon stock to $21 million.
bonds, life insurance, savings ac¬
counts—may then have some of
power
for
capital expenditures
During the same period funded debt
(including Pere Marquette issues) was reduced by $6 million. In
addition, $15 million of Preference Stock-Series A was retired in
country—the people who
have put their
money in Series E
purchasing
EXPENDITURES
In the last fifteen years the C&O's total
have exceeded $440 million.
the
the lost
were
ment program
the
of
CAPITAL
emergency
favorable—
are
spiral may be broken. The
of
by
bal¬
present
share
locomotive units and 5622 freight cars were on order at the
year end.
These expenditures brought the total
post-World War II im¬
provement program to $260 million. Your Company enters this new
steps
a
a
1
1950
control
al¬
budget—and
Fedeiai
at
omens
the
followed
only $1.36
tive units, 778
natural
conceived
was
on
its Common stock—a year in which the coal mines
operated inter¬
million
open,.market.,.If this
further
in
were
share
million, while capital expenditures to road and structures of
agreement be¬
tween the Treasury and the Fed¬
eral. Reserye System by-which
government securities
a
v
in the
primary
a
earned
Company's oper¬
ating ratio—the relation of operating expenses to gross revenueswas 69.4 per
cent, compared with 80.1 per cent in 1949. It was the
lowest operating ratio since 1944.
'*./ **
* Y~
of the recent
cause
1950
and Common
Indicative of improved operations in 1950, the
exemplified
as
its Preferred
deducting Preferred dividends of $686,022, this
to 1950.
His
indepen¬
matters
Reserve,
Company in
on
mittently for a total of only 170 days, the most difficult year from an
operating standpoint in C&O's history.
The good earnings of 1950 were almost $4 million more than the
average C&O yearly earnings during the fifteen year period 1936
ex¬
interest rates and
monetizing tne debt, has rendered
the
Railway
In the strike-torn year of
1949, C&O earned
on
positions to his colleagues in the
from
Ohio
and
the Common stock. At December 31,1950,.
total cash and Government securities on hand was
$63,311,180.
senator
credit.
After
equal to $4.25
System of its birthright in
control ■ over
Chesapeake
$33,947,092 available for dividends
rate
serve
|he
,
credit" for
years.
...
/f>£J
-'J,1..
trf
per¬
Let
'
us
Chesapeake and Ohio Railway Company
TERMINAL TOWER
v
% s*"
mm m
CLEVELAND
I, OHIO
York
Exchange will consider the
painful.
This
Stock
on April 19 will admit
Seward M. Smith to partnership,
Total operating revenues of the
31,
of the New York
Exchange,
and Consolidated Natural Gas Co.
v
investment
-
cost
Dividends on the common stock
have been paid on a regular
quar¬
Securities
Weld
an
1,310,000 MCF
mately $140,000,000.
Trans. Slock Offered
Stone
to
estimated
an
vastly increased, which pro¬
was
of
fort
a
23
mem-'
Salzer
to
24
The Commercial and Financial Chronicle
(1552)
that
be
cellent
base,
Mutual Funds
has
regardless of a very ex¬
earnings
and
dividends
the atmosphere
generally
"To
the
your
request
upon
The Outlook
Current Financial Comment
from
investment dealer, or from
"For
stocks fell into
NATIONAL
SECURITIES
&
CORPORATION
RESEARCH
suffer
we
the
dollar is
A
is
longer
no
is to the good rather than
Depressing
psycho¬
its old-fashioned
are
stocks
"Common
risks
old
in the
does
noticeably change. However,
all agree that, in today's
Schreder, economist,
X.
of
Securities
Group
"Whether
that,
inflation
have
we
deflation,
or
30 industrial
of
earnings
on
prices
Dow-Jones
stocks, the
the
by
measured
as
"at
would
than 48%
stocks
these
Established 1894
to
is
a
then,
complete, impartial
information about any pub¬
licly offered Mutual Funds.
Our service
covers
shares
needs
and
both
private
Funds
special
institutional
investors.
Ad¬
Manager, Mutual
the
dress
the
meet
to
or
all types
Company
Investment
of
Department.
Founded 1865
Members New York Stock and
Curb
Exchanges
MUrray Hill
2-71 go
part of our economy not only
because of the apparent perma¬
nence
of the 'cold war,' but be¬
Through these companies
with
can,
you
and
diversification
own
You
America.
of
share
a
have
•
minimum of risk
a
maximum of benefit,
a
on
amount of money,
can
mini¬
with ex¬
a
companies
These
are
investing tkeir capital
IN
(Series B1-B2-B3-B4)
fail to put litera¬
concerning these investing
when they
companies where it is available
to
employees.
And they could
cure
the hoax about the 'privi¬
mation
on
ship.
50
Congress Street
present conditions of con¬
alarm.
Axe-Houghton
The
the
Financial
General
Survey of
Situation
changes
Government
proceeds
were
commercial
vested
in
two
six
to
totaling
Bonds,
The
000,000.
months'
of
Trustees
paper
$4,-
in¬
of
maturity.
Fund
Putnam
the
explained that the sale of the
holdings of government
during the first quarter
"does not reflect any lack of con¬
fidence
in the integrity
of our
Fund's
bonds
credit."
national
George Putnam, Chairman of
the Trustees, said that it does in¬
dicate a belief on the part of the
Trustees
that
the
"trend
is
toward
and
freer
a
level
nerative
of
remu¬
more
rates."
interest
that
this
radio
and
feel
a
in
vested
television
during the first quarter.
The
Fund reported that total
net assets reached a new record
stocks
high of $46,500,000 at the end of
the first quarter (March 31, 1951),
overproduction
of
cotton
and
compared with $44,888,000 at the
rayon
textiles , . . the
main
end of the year, and $37,666,000
trouble being that defense orders
a
year ago.
have not come along soon enough
and in sufficient volume to take THE EFFECT of the sale of the
reports that there has been some
people
and General Mo¬
440,735 owners.
Direct
shareholders in all our enterprises
lists
are
estimated at about 15 million..
privileged few?—no!
"With
'
"and dividends
going to continue
Schreder reported,
dollars
in
are
pre-World War
to remain high by
of packages to suit
And if there
variety
the individual need.
is
such
it,
the
a
being able to
money
and forget
thing
your
mutual
as
funds
Not
answer.
are
only
supplying
that, they
their own and pay¬
ing off in these inflationary times.
In
America,
investment is the
holding
privilege of everyone, and mutual
the opportunity."
funds furnish
JOHN
W:
know," he remarked,
"stock prices are still consider¬
ably behind the inflationary pa¬
rade, either in current dollars or
"Oklahoman
Oklahoma
&
City
we
Times"
and
textiles
several
trical
types
of
some
moderately slack
are dis¬
dustries may be
excess
of these in¬
inventories
Inventories of some of
products have recently in¬
folio
creased
warehouse
that
much
so
has been at a
premium. Ap-
other factor likely
should
"It
noted
be
that
during the 1935-39 period, stocks
sold at
approximately 15 times
their average earnings, which is
about
with
line
in
ure
duction
it, would
its port¬
in the avia¬
long as its secu¬
promise and are con¬
sidered suitable holdings for this
offer
growth fund.
Sale
Ltd.
ers
of assets
special
a
to Bullock Fund,
approved by stockhold¬
of Aeronautical Securities at
was
meeting
on
Continued
is
inventories
in
in
include
to
representation
rities
to force a re¬
space
stated
tion industry as
posed of.
these
Fund
Bullock
continue
equities
in
8%
manufacturers.
aircraft
of
airline common1
about
and
stocks
appliances.
"Business in
until
assets invested in
March 22,
on
page
33
situation,
market
present
states:
what
many
fair
a
meas¬
of the price at which a stock
goods.
"The
business
general
is
generally
manufacturers'
cause
unfilled or¬
ders have reached a new
ord.
rise
The
in February,
outlook
be¬
not unfavorable
in
high
unfilled
rec¬
orders
according to the De¬
should sell in relation to its earn¬
partment of Commerce, was again
ings.
much greater than the further
"All
during the subsequent pe¬
riod," Mr. Hale comments, "which
embraces
most
postwar period,
at
somewhat
lation
to
the
of
ratios
earnings
and
have sold
stocks
lower
war
and
in
at
re¬
crease
showed
ruary,
in¬
"prospectus from
your investment
reported in manufacturers'
inventories.
Machine
tool
orders
dealer
or
further advance in Feb¬
a
PHILADELPHIA 2, PA
although they were already
extremely
high.
The
for
outlook
the
present time, at least, price-earn¬
"As
are
at almost the
EATON & HOWARD
level in history.
lowest
we
have mentioned
past periods of high earnings,
speculative and investment de¬
mand
placed a high value on
earnings. In recent years and at
present, however, the reverse has
'been
One
true.
of
the
EATON & HOWARD
BALANCED FUND
STOCK FUND
before,
in
of
confidence
vestors
continue
controls,
on
the
OBTAINED
factors
situation,
depressants.
nub of the
YOUR
EATON
INVESTMENT
DEALER
OR
& HOWARD
INCORPORATED
BOSTON
high earnings will
owing to the threatening
and
FROM
part of in¬
that
taxes
FUNDS MAY
PROSPECTUSESOF THESE TITO
BE
contributing to this has been lack
economy
J
to
goods, including
bank
in 1940 dollars."
Edward
E.
Hale,
of
Vance, credit, which seems likely for a
while to be directed toward the
Sanders & Company, in an excel¬
lent and
clearly-stated analysis financing of defense contracts and
less toward financing consumers'
of the
international
BECK
Financial Editor
V..
tions."
ings ratio-wise
funds there is a
mutual
limited
be
ably
other consumers'
durable goods
current attempts to the contrary." such as television sets, household
"Corporate
earning s,"
Mr. furniture, and some kinds of elec¬
year.
249,339
Boston 9, .Massachusetts
the
Du Pont has 125,504
with 15,559 added in 1950.
General
Electric
is
shared by
last
are
Tlie Keystone Company
of Boston
in
added
been
have
owners,
invest
be obtained from
despite
the
Board's valiant
—
and people consider to be
half
of
them
are
More
than 15,000 new
owners
wide
may
people,
256,630
than
more
(Series K1-K2)
Protpectus
big one: U. S. Steel is
a
by
owned
PREFERRED STOCKS
(Series S1-S2-S3-S4)
by distributing infor¬
present stock owner¬
leged few'
A
COMMON STOCKS
trying
are
capital
enterprise'
to
Americans are overlooking a big
tors
BONDS
above
Reserve
Federal
"As
'sell
women.
INVESTMENT FUNDS
who
"Industrialists
to
"Take
Certificates of Participation in
and labor union factors
continually ad¬ II standards, because of semi¬
inflationary
condi¬
justing the portfolio to changing permanent
ture
Funds
acceptance
pert management
bet
Custodian
the
and farm
growing by leaps and bounds.
eystone
PORTFOLIO
price-parity
mentioned
investor's
the
to
answer
of
cause
farm
mutual funds, are
especially the
the
conditions.
*
surely be unfavorably in¬
of the
principle, the up the slack caused by the neces¬ assets of Aeronautical Securities
strength of labor unions and the sity for avoiding further inven¬ to Bullock Fund will be of nom¬
inal significance insofar as chang-<
acceptance
of periodic cost-of- tory accumulation.
"Competition for defense con¬ ing the portfolio of Bullock Fund
for the big investor, not for the living and productivity bonuses,
and the huge money supply which tracts moreover has been sharp, is concerned, it was announced.
average saver to whom the mar¬
Because
of
the
substantially
already firmly established in and it now looks as if profits on
ket now is looking for support. is
From a political defense work would be somewhat greater size of Bullock Fund, the
How
many people
know about our economy.
our investment
companies? How standpoint, this will very likely be smaller than expected," the re¬ acquisition of the assets of Aero¬
nautical Securities will mean that
many
know about our mutual allowed to increase over a period port notes.
time of merger -Bullock
of time to accommodate the con¬
"The general business readjust¬ at the
funds?
"These
investment companies, ditions brought about by the war, ment," it continued, "will prob¬ Fund will have about 1% of its
mum
Uptown Office 10 E. 45th St., N.Y. 17
be an inher¬
forces seem to
ary
"Inflation¬
that:
stated
Schreder
problem, and for that competent
judgment is needed. Again, di¬
versification by direct selection is
dream;
Kidder, Peabody & Co.
long-term, however,
most
important to
funds'
investors,
Mr.
is
this
mutual
the
his
of
is
in his weekly re¬
the
For
average
Diversification
market?
Write for
the
can
advantage
almost
fluenced."
"We
under
and
specialized knowl¬
take
of
Chairman
Barringer,
M.
D.
Delaware Fund,
stant tension and
ent
"How,
it
cause
capital goods industries down with
it, whereas if the slackness were
in the capital goods industries, the
consumers' goods industries would
minds—for, as usual,
be."
edge.
investor
goods industries, be¬
is unlikely to drag the
healthy
port to his board of directors, em¬
phasized his conviction that equi¬ development," he said.
It was also announced that ap¬
ties will continue by and large to
tent influences than what people
proximately
$500,000
was
in¬
think
the
effects are likely to be the best investment medium
play the market this way
full-time
job requiring a
deal of
great
factors
these
of
effect
people's
on
interest to
but
the
consumers'
the effects themselves are less po¬
long-term investor.
It is
short-term traders,
the
of
of all will be
important
combined
right. It would be hard, if not
impossible, to 'crash' this market.
To be sure, prices fluctuate, but
that need not be of much concern
to
New "York
One Wall Street
level."
"Most
"Today stocks are strongly held;
a
75% margin is all the law al¬
lows. Most stocks are owned out¬
CALVIN BULLOCK
in
slackness
the
have
to
ter
MAJOR
that
of stock
level
current
the
Index
the
appraisal,
market
have to decline by more
good
taxation.
directors.
or
the
by George Putnam Fund included
the sale of all holdings of U. S.
that
states
Hale
Mr.
business or bad
from present levels before stocks
business,
over
the
next
few
would be selling at a price-timesmonths, will depend far more on
their
worth
and
stability.
It
earnings ratio equal to the 1935the trend of developments toward
would be ridiculous to consider
39 average. Or, to put it another
war or peace; and on such impor¬
the failure of du Pont, General
way, if stocks sold on
the same
tant factors as this country's in¬
Motors, American Tel.
& TeC,
price-times-earnings
basis
as
and
hundreds
of
others.
'Gold ventory condition, wage and price they did for the 1935-39 period,
control methods, solution of the
bricks' and manipulation are his¬
they would have to increase from
farm parity situation, and fiscal
tory and the market is closely
present prices to about the 480
policy, both as to expenditure and
governed by law, and by its own
investment dealer
of
rent
ors
longer
development is mature and many
hundreds of firms have
proven
Prospectus from your
standpoint
should not be overlooked, in cur¬
Harold
Industrial
sense.
the
"From
during the first quarter reported
reported to the Board of Direct¬
no
than
case."
otherwise be the
would
vul¬
are less
decline
stocks
drastic
to
ex¬
fact
counterparts
are
of inflated earn¬
valuation
Thus,
ings.
nerable
of new
seems
buy for the long term.
so
securities.
value
—face
and
situation
have
prevented
prices from reflecting an in¬
flated
construction
cellent.
market, equities are an excellent
dollar; it
a
entity
prospective
logical' factors
stock
almost
Times have changed.
diminishing
a
summer,
international
not
condition that is not justified by
current facts.
this
short-lived
assuming
and
spotty
a
recession
a
of
some
continued high volume
general business outlook, it is bet¬
otherwise
largest mutual funds are ex¬
pecting
years
from
hangover of this disrepute today,
a
120 BROADWAY, NEW YORK 5, N. Y.
disrepute in
and
by,
gone
of
MANAGERS
THE
the
common
reasons
many
and
owner
Thursday, April 12, 1951
.
industrial
ram¬
buyer of common stocks, this, of
course,
Prospectus
to
pant optimism investment-wise.
By ROBERT R. RICH
r
conducive
been
not
a
..
fear
<
of
other war
The simple
matter would
seem
to
24 Federal Street
BOSTON
333
Montgomery Street
SAN FRANCISCO
[Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
,
Continued from page 12
without having to reckon with the
rather by a temptation to inflict
disturbing effect of competition. some short-term hardship on the
But here, where Russia has been American
economy via our steel
so
conspicuously successful in ex¬ industry. Having made this deci¬
panding its total trade, the scope sion, Soviet foreign trade author¬
What About Our Loss
of
Oi Russian Manganese?
cerned
with unearthing all man¬
signs of U. S. "peneration"
ner
of
of
the
British
trading
Commonwealth
the
area, on
British
hand, and
of prices, on
one
"spiraling"
the other
theless
hand, the article
never¬
reflects
from
1948
the
and
1949-50
do
not
kets
Italy,
Sweden,
United
lands
rather
States
made.
was
It
gen¬
eralized, for example, as follows:
"Dependence on imported man¬
is the vulnerable spot
imperialism." After
ganese ore
of
American
touching
fort
to
the
upon
imports of
expand
ganese
from
ore
sources
during
matter
of
U.S.S.R..
American
ef¬
Soviet
for
Europe
Russian
at
in
ore
present
mar¬
Western
Norway,
are
the
and
than
any
origin.
By all indications, the main
something of the
thinking at the time
the decision to cut exports to the
line of Soviet
identify
of
ore
important
steel-producing countries of West¬
ern Europe.
In
Eastern
Europe,
any
of
its
Russia
is
market for
a
exportable
production is not
afford
ities could have drawn
comfort
large outlet
a
from
the
^
'
manifestly failed to
affect the U. S. supply of man¬
small
ganese ore during 1949, or sub¬
some
fact
'
it
that
the
'
Nether¬
the
generally assured of
to
as
385,000 tons:
While
sequently, the Soviet action has
tangible effect of their action was
undoubtedly
produced
conse¬
imately six million tons a year.. at least not long delayed, although
quences within its own domestic
Altogether, therefore, the Euro-' the effect itself was quite the op¬
economy that will have to be faced
pean market can at best absorb posite
of
what
was
intended. in the near future
by Russian
some 200,000
tons of ore a year, Viewed from any vantage point,
economic planners. Ultimately, as
divided at present about evenly it
may be observed, the speed and it
happened on previous occa¬
between East and West
Europe, consistency with which the cumu¬ sions when demand for
manga¬
as
compared with about 500,000 lative volume of U. S. manganese
nese
slackened as a consequence
before the war.
imports was built up, month by of a natural contraction of the
In the light of the
above, the month, during 1949 were quite market, the Soviet Government
Russian decision to restrict at this impressive.
By the end of the will have little choice but to cut
particular juncture the shipment year, with the Russian contribu¬ back the production of
manga¬
tion
of manganese ore to as
amounting
to
only
73,000
large and
nese, ironically enough at a time
long tons, aggregate United States of general
receptive a market as the U. S.
high levels of economic
ore from
appears to have been motivated receipts of manganese
activity and employment in the
not by supply considerations but abroad exceeded
'
by a margin of world outside.
■
U.S.S.R., 55,000 tons in
45,000 tons in 1950. In¬
manganese
annual steel
such
255,000 long tons those of the pre¬
ceding year, when Russia provid¬
ed
for manganese, at
present approx¬
cidentally, Belgian trade returns
for
25
(1553)
products,
-
•
.
man¬
non-Soviet
1948,
real
obviously
to
concern
a
the
the
author, A. Sovalov,
following, officially
required, conclusion: "Despite the
hue and cry raised, the
practical
arrived at the
CONTINENTAL OIL COMPANY
results in the fulfillment of
plans
for the accumulation of
manga¬
nese reserves in the United States
were
extremely
As
portant
in
contact
commodity, im¬
Russia's
with
Reportsf<>r
insignificant."
sensitive
a
the
commercial
outside
OVR
world,
the manganese industry is treated
in Soviet economic literature with
a
75* YEAR
CONOCO
degree of secrecy far more ex¬
than that applied to most
V
treme
branches of the national economy.
For
example, there is available
neither
an
officially published
1950 target figure nor
any per¬
centage figures on the annual in¬
in
crease
production,
a
privilege
or continental oil company
by
area
a group
quarters
country.
1950
enough
basic
of
was
its
on
production
export to warrant
able
and
few support¬
a
a
year
oil
it
can
be recorded
most
sistently been expanded at
as one
long history.
sufficient
able
to
produce a consider¬
of ore for export.
margin
Even
the
at
rate
high
Soviet
rate
of
130,000
million
tons
(approx¬
for every
tons
of
pig iron), the
planned 1950 volume of pig iron
production (19,500,000 m.t.) could
not conceivably require any more
than about
million
3
thus indicating that
tion plans included
least
at
800,000
Information
tons
ore,
1950 produc¬
a
tons
on
of
margin of
for export.
also
reserves
clearly indicates that the two old
working
deposits, Chiatura and
Nikopol, are capable of support¬
ing a steadily expanding scale of
annual production.
Beyond that,
the
eastern
deposits, which until
have
been
considered
potential sources of sup¬
recently
only
as
ply, have become substantial
pro¬
ducers during the war, capable of
satisfying
the
sizable proportion of
a
requirements
manganese
of
the Ural and Siberian steel
presumably,
should
this
enable
the
plants;
development
western
posits to release additional
de¬
quan¬
tities for export.
Has
Russia
a
nese
Without
Manga¬
Market?
going
into
the
details
of current Russian manganese ex¬
ports to Europe, for present pur¬
poses it will suffice to call atten¬
tion
to
a
of that
three
few observable features
trade. In
Western Europe,
the principal steel-pro¬
nations, namely France,
United
Kingdom and Germany,
no longer serve as
important out¬
of
ducing
lets for Russian
receive
from
their
their
ore.
full
own
s
growth of the Company's crude oil
un¬
acreage
the end of 1950. New
crude oil
reserves
than offset withdrawals
more
areas
during the
year.
PRODUCTION —Continental's
crude
oil
production
from 93,550
1950
the
rels
to
of
provided through discoveries
and extensions of
proven
an
was
net
monthly high in
Company's history of 111,671 bar¬
daily in December. During the year
632 gross
wells, equivalent
to
442 net
wells,
were completed under Continen¬
drilling program. Expenditures for
finding oil and developing production,
including both capital and expense
items, amounted
to
...
.
$44.7 million
com¬
REFINING—Total
crude oil
expan-
ciable
to
volume
92,955
89,136
-
110,872
107,271
sion in sales of branded
a
products led to
during the year to modernize
enlarge Continental's Lake Charles,
decision
and
Louisiana,
refinery. The Company is
currently supplying grade 115/145 avi¬
ation gasoline, aviation
lubricating oils
and
Navy diesel fuels
addition
to
to
the military, in
supplying the usual civilian
products.
that government
extent
will
regulations
permit.
RESEARCH —Construction
in
1950 of Continental's
was
new
begun
central
research
laboratory building. The ex¬
panded research program following the
completion of the new laboratory facil¬
ities in the fall of 1951 will
practically
double Continental's research staff.
MARKETING —Continental's
refined
products reached
a
sales of
record high
during 1950 of 1.7 billion gallons. The
increase was particularly marked in the
sales of the
Oil which
new
was
Conoco
Super Motor
introduced in
February
runs
to
GENERAL
can
new
sourcefulness
to
serve
rently the Company is concerned with
increasing its representation in the Mid¬
Southwest, and Rocky Mountain
by adding
independent job¬
bers to its distribution team,
by rebuild¬
ing older stations which have favorable
more
be faced
challenge of again rising to
heights of productivity and re¬
ian and
1950 and which received wide accept¬
the motoring public. Cur¬
may
with the
ance
among
COMMENTS-The Ameri¬
petroleum industry
to
supply growing civil¬
military requirements as well as
provide the strategic crude oil
producing capacity
for the
defense of
industry's ability
to
our
country.
in the
supply of crude oil and
products has been due to the
vigor and growth generated within it
by keen competition. Given minimum
creases
refined
locations, and by construct¬
regulation and reasonable economic in¬
centives, it
new
stations to the
can meet
all assigned
For the
tasks.
an
Company's 1950 Annual Report to Stockholders
giving detailed information, write Continental Oil Company.
Only
10
Rockefeller Plaza, New York 20, New York.
appre¬
manganese
ore
The
provide large in¬
ing
posses¬
Africa.
re¬
so necessary
requirements
import
of
101,029
Daily
'
$4.00
95,669
Sales of Refined Products, Barrels
Belgium, in this group, has com¬
mitted
itself,
in
recent
trade
agreements
r*
$19,293,129
The first two
overseas
in Asia and
..
Daily i
west,
averaged 95,669 barrels daily, the
highest rate in the Company's
history. Continued
.
v
$5.00
areas
pared with $43.3 million in 1949-
stills
..
$7.48
$24,186,415
«
Refinery Runs, Barrels Daily
sions, while Western Germany is
amply provided with ore from
sources
$8.73
v
expanded
barrels daily in January
all-time
•
1949
$36,096,880
•
pro¬
Prospective
held by Continental
increased almost threefold during the
past three years and reached 5.3 million
acres at
1950
$42,406,666
Net Crude Oil Production, Barrels
placed once
development activities in an effort
promote both a short and long range
developed
OPER ATIO N S-1 9 5 0 -1949
;
—Per Share
tal's
European
,
and
reserves.
OF
.
Earnings—Total
\
—Major emphasis
again on exploratory
duction and
;
Dividends—Total•
EXPLORATION
to
'[
—Per Share
j"
w
was
•'
of the
successful in Continental's
'
'
r
'
Net
•
manganese consumption
imately
HIGHLIGHTS
'
•
industry and the Company,
production clearly shows that the
output of manganese ore has con-,
a
Though
of rapidly
changing trends for both the
generalizations.
The record of Soviet industrial
Rocky Mountain
of pioneer businessmen, Continental has been
a century.
and recent indirect information is
available
1950 marked its seventy-
1875 in the
serving the country for three-
accorded to most major commodi¬
ties in the industrial output of the
However,
the year
F fifth year of progress, Founded in
•Nf'
WERE BREAKING GROUND FOR ANOTHER 75
YEARS OF PROGRESS
26
The Commercial and Financial Chronicle
(1554)
belatedly, the prediction of Trade
Minister
Canadian Securities
the
favorable
liquidation of bond po¬
uninitiated
of the sitions taken in anticipation of an
dollar in recent years appreciation of the Canadian dol¬
often than not defied lar. Thus, although an apparently
Canadian
more
At times
reasonable anticipation.
the
have
prospect?
long-range
seemingly obvious, but er¬
interim
movements
have
been
ratic
tended
materialization.
their
of the
market in
the recent freeing
unofficial
the
dollar
confidence
undermine
to
concerning
Prior to
view
correct
taken
was
the
on
subject
naturally
was
market
with the broadening of the
by the establishment of
rate for
both
logical
expect
to
reliable
and
To
single
financial and
more
a
com¬
would
it
transactions
mercial
a
be
stable
great degree this has been
a
realized but there still exist some
y
<
'' ■1.
»
acted in Canada.
Thus the market
reflection of the
largely
a
broader market north of the bor¬
minions which
now
are
at a level
which should attract fresh invest¬
ment, especially in the short-term
This
issue.
persistent liquidation
responsible
largely
the
for
a
discrimination
official
of
result
supposedly
against
of
investor
tar"
who
and mor¬
the
oils
also
also
will
be
'
that
conditions
and
appreciable headway.
have
a
of
PHOENIX, Ariz.—The new firm
Ellis
&
Yarrow
has
been
formed in Phoenix by
exports
during
on
are
important scale than
more
a
usual
following .the removal of restric¬
when
This
accentuated
by
taken
liquida¬
the
bond positions
prior to the freeing of the
dollar.
Due
to the
decline
of the
be
the
tourists
year
should not
the
promises to break all
period
Canadian
immediately
rec¬
economic
de¬
Dominion bond market, these po¬ velopment, in which U. S. capital
will play its customarily promi¬
sitions which were held until the
nent part. Activity in the Western
expiration of the six months' tax
period,
oil
lands
will
be
intensified
this
being liquidated
summer as additional storage fa¬
at a loss instead of the confidently
expected profit. It will be recalled cilities, pipe lines and refineries
are
now
that at the time of the
ment of the
freeing of the dollar,
Canadian
the
quite
clear
announce¬
authorities
that
the
made it
speculative
movement into the Canadian dol¬
lar
by
no
means
met with
their
was
to be expected therefore
that there would be
the
no
official in-
teryention in the exchange market
which would in any way assist the
search
for
fields.
largely
industry, hitherto
neglected,
will
shortly
take
a
on
lease
new
life
of
fol¬
lowing the decision of the Alberta
Government
that
greater gas re¬
must be proven
before
ex¬
ports to this country will be per¬
mitted.
The
Labrador
other
iron-ore
U.
interests
S.
tensified
deposits
are
efforts
of
tute
only
a
and
projects
to
many
in which
involved, in¬
discover
new
few
of
the
projects
that will make the coming season
a
memorable
one
in
Canadian
economic annals. As
ter
trend
will
Provincial
be
summer
Municipal
of
a
the
Canadian
replaced
by
dollar
exceptional
strength, which will
per¬
Corporation
INVESTMENTS
IN CANADA
Our
long experience with Cana¬
dian industry will be of benefit
to you in
selecting suitable in¬
vestments through which to
par¬
ticipate in Canada's growth.
NY
assist you.
jMlilner,
1-1045
Kenneth A. Ellis
Paul Yarrow
busi¬
dealer
and
individual
an
specializing in Arizona
mu¬
nicipals and corporate stocks and
bonds
and
investment
trust
Offices
shares.
located in the
are
Security Building. .<
&
Co.'
The Toronto Stock Exchange
Boston 0, Mass.
investment
the
Bay St. Toronto, Canada
Brentford
Sudbury
High
—0.4
Low
184.7
Change
177.8
173.8
.
-
196.0
—0.3
204.0
..190.8
:
176.3
—0.4
182.9
171.1
;
213.7
214.3
—0.3
224.2
209.0
t
195.1
194.8
-{-0.2
216.6
194.8
/
195.4
175.6
———
.
111.9
—0.5
114.8
109.5
"
208.1
—0.8
214.4
203.9
'
172.8
—0.5
186.0
170.0
•».
which
chart
accompanied
for the
shows
release
172.0
Manu¬
Transportation,
and
1948 and
the
January,
the most active
stocks, volume or
value-wise, were chosen to give a
coverage of 65% of volume and
value of trading in the industry in
At least five issues
1949.
though
issues might have given a
fewer
65%
in order to afford
representative index. A.
coverage,
putation, the industry classifica¬
tion, and the stocks included in
the Index may be obtained upon
request addressed to the Division
lected.
York
Stock
Exchange
Trading and Exchanges, Secur¬
ities and Exchange Commission,
1939
while
the
securities
in
here
business
Since that time he has been
the
1945.
doing
general business specializing in
a
municipal bonds, under the firm
of Kenneth A. Ellis and Co.
name
Mr.
Yarrow,
Phoenix
in
from
who
has
come
to
Chicago,^"has been
investment
the
security busi¬
While
associated with
for the last 27 years.
ness
in Chicago he was
E. F. Hutton & Co. and its
cessor
prede¬
companies selling securities
banks and insur¬
individuals,
to
the
in
companies
ance
to
Middle
West.
Pyramid Eleclric Co.
According
stock
dex of
be
Co., Inc.,
&
convertible
cumulative
stock
preferred
Pyramid Electric Co. at
($5 per share), less a discount
par
of
to dealers who are mem¬
In addition,
convertible
preferred
stock
and
10,000 shares of $1 par value com¬
stock are being sold by the
mon
been
for
years
an
in¬
prices which would
recognized
official (as there
as
official indexes of most other
are
important segments of the econ¬
omy)
at least as the generally
or
accepted measure of stock prices
levels and trends. There are ex¬
tant
of
number
a
results
confusion
in
constitutes
a
to
as
what
standard for comput¬
in
changes
ing
prices.
which
Some
in
trends
stock
these are based
of
few stocks that their move¬
so
over-sensitive
are
issues that market move¬
many
also been
There
obscured.
are
for
need
a
the
which
while
the other hand, include
on
an.1
index in
would
stocks
has
be
grouped into the same industrial
classifications
used
by govern¬
agencies in presenting their
ment
series.
statistical
In
response
to these needs
the
Securities and Exchange Commis¬
stock
created
price
published
a
new
weekly
index which is now
in
the
Commission's
"Statistical Bulletin" and in "Eco¬
nomic Indicators,"
a
monthly pub¬
Pyramid Electric Co. at $6.75 per lication of the Joint Committee
unit.
The company is also offer¬ on the Economic Report of the
United States Senate and House of
preferred stock at par.
Representatives.
the
be
net
used
$166,450
retire long-term
For
added
to
the
working capital
funds of the company
to meet its
expanded operational needs.
The
the
New
corporation produces her¬
capacitors, under the trade
"Glasseal."
Plants
are
lo¬
cated in North Bergen and Paterson,
N. J.
were
all compa¬
stocks listed on
Stock
York
classified
Bureau
index
new
common
Exchange
to the
of the Budget's standard
according
industrial classification.
whose
dustry
metically sealed miniature tubular
name
this
nies with
groups
stocks
accounted
one
for
Those in¬
common
more
than
percent of the volume or value
stock
the
exchange in 1949 were selected
for representation in the index.
Twenty-nine industry groups met
of
common
this criterion.
thus se--
were
is-i
predecessor
listed
were
New;
the
on
on
61
other
Jan. 1,;
stocks <
listed at various times there-.
were
other issues;
try groups which had too few is-;
to meet the test of represen-i
sues
tation.
issues
61
the
As
became
listed, they were added to the in-]'
dex and the eight issues referred:
dropped. A list of:
in the index-
to above were
which
stocks
from
were
the
to the present and
1939
periods for which they were in-:
eluded is attached.
computation!
The method for the
of the
industry indexes is as fol-,'
lows:
Each
stock
component
is'
weighted by its number of shares
outstanding. The weekly closing]
price of the stock is multiplied
by!
its
weight to give the current mar-,
ket value
of the issue.
Market;
values
several
the
for
individual;
each industry group are
stocks in
.
added together to obtain a group.
as
each
a
Each
value.
market
for
is
week
percent of
base
a
value!
expressed/
base value. The ;
used
value
the
the
week-ends
average!
the
is
for
value
52
group
then
market
group
of
for
The.
1939.
composite index of the 29 indus-try groups is the sum of the in¬
dividual stock values for any week
expressed as
a
percent of the total }
base values of all industry groups.
•
Any change in the number of
outstanding shares which does not
bring about acorrespondin'g
price
in
change
such
(i.
changes
e.,
>
increases through conver-],
as
of
preferred stock,
and;
etc.
not the result of stock'
are
splits or stock dividends) will of>
the
affect
course
of
value
current;
total
issue.
the
of
number
shares
the
When
outstanding
changes, it is therefore necessary
to
make
an
base value
reflect
1
Among
issues
panies
which
and
after their
adjustment
the;
to
that the index will:
price
increases
or
several ;
and stocks of other com¬
were
reorganized between '
the
utility
1939
so
only
trading on
For each industry,
added to those indus->
were
which
proceeds,
to
their
(or
sues)
sion
ing 6,000 shares of 6% convertible
Of
stocks
indexes
price
compiled
heterogeneously
sion, has
10,000 shares of 6%
release of the
an evident
a
has
need for several
ments
offering 40,000 shares of 6%
to
there
SEC,
so
Publicly Offered
Fitzgerald
issues
265
Two hundred four of these-
which
Computation of SEC Index
others,
Cantor,
more
total of
after1. For 1939 the index includesf
Washington 25, D. C.
ments
are
A
of
on
Stk.
present.
in-:
were
eluded in each group even
a
security business,
Windsor
Brampton
3/24/51
the 204 stocks plus 8
moved to Phoenix and entered
paper
Hamilton
:
1951
111.3
Ellis, formerly of Chicago
where he spent sixteen years in
of Canada
330
follows:
as
206.4
Mr.
indebtedness and the balance will
The Investment Dealers* Association
Fifty Congress Street
date, is
detailed
description of the method of com¬
will
can
Members:
WORTH 4-2400
Manufacture;
Goods
weekly closing prices-
for 1951 to
177.0
Manufacturing
1949
be
Two Wall Street
and lowest
3/31/51
Composite
incorporated
New York 5, N. Y.
Durable
into
and Non-durable Goods Manufac-t
Percent
years 1940 through
the weekly indexes from
bers of the NASD.
We
Economic Re¬
the
on
the
of 10%
A. E. Ames & Co.
monthly publication of the Joint
Utility groups, and for the Com¬
posite of all five major groups,
the average weekly indexes for
result there
haps make good, albeit somewhat
CANADIAN STOCKS
groupings, as follows:-,
(further
divided?
major
Manufacturing
which other Govern¬
in
facturing,
uranium, consti¬
is little doubt that the weak win¬
Government
are
industrial classifications
same
those
as
The
increasingly valuable
base metals and
CANADIAN BONDS
new
The natural gas
serves
approbation.
It
spur
of
measure
issues
classic]
industry groups under*
fied into 29
five
stock
common
the Index
ture); Transportation; Utility; and.
Trade, Finance & Service; and
ment statistics are presented.
IU Mining. For each of these cate-}
will be published each Monday in gories, and for the Composite, the
connection
with
the
regular index of closing market prices for?
weekly report on trading by ex¬ the week ended March 31, 1951,]
with
the
preceding;
change members. It also will ap¬ compared
week-end
and
with the highest
pear in "Economic Indicators," a
the
the
ness,
to
prove
ahead
for
Bulletin."
2-35
Utility
summer
north
over
ords
to fill the
sensitive, yet represen¬
stock market
prices and trends as well as for a
price index of stocks grouped into
tative,
Commission's monthly
"Statistical
The
prepared,
initially
was
in the
comprising
The Index is designed
a
it
which
and
York
New
Stock Exchange.
need for
port of the United States Senate
Representatives, for
and House of
Trade, Finance & Serv._
Mining
move
exception to the rule, More¬
an
the
on
Non-durable
in favor
migrate to the south.
ans
The recent weakness has been fur¬
ther
S.
prices of 265 common
listed
Transportation
are
whereas in the winter the Canadi¬
tions at the beginning of the year.
tion of speculative
U.
market
closing
weekly
the
Durable
ible item constituted by the tour¬
imports which
Exchange
and
on
upon
stocks
Kenneth A.
imports higher in the
time the market ist traffic also
operates
is largely influenced by Canadian
of
Canada
seasonal
new
based
Ellis and Paul Yarrow and will do
winter, but in the summer all ex¬
move
freely and imports,
York ohly when financial opera¬ ports
tions are exceptionally predom¬ mainly of fuel, normally decline.
Furthermore the important invis¬
inant
■.... -V At the present
stock issues, classified into
under five major groupings.
common
New Firm in Phoenix
The initiative is held in New
der.
265
groups
April 2 announced
"SEC Stock Market Index"
Committee
As a result of
markedly reversed.
lower
the
Securities
The
Commissiona
industry
.
considerations
weather
recovery.
Ellis and Yarrow Form
Apart from these highly intri¬
cate
the
notwithstanding
cost-aid relief failed to make
any
af¬
detrimentally
advance,
and Western
in
joined
golds
new
market
dollar
Canadian
the
to
"bricks
the
base metals
and
The
the
in
prominent
were
variety as well as all those
are obliged to have recourse
bearing on the course of the Ca¬
underlying
uncertainties.
Al¬
nadian
dollar, undoubtedly the
though the Canadian dollar has
most important factor is the sea¬
been officially freed it is in effect
sonal influence. In the absence of
still a controlled currency.
Fur¬
thermore the New York market is any major development, during
the long winter period the trend
handicapped by the fact that com¬
of the Canadian dollar is invari¬
mercial operations which neces¬
ably weak and during the active
sarily constitute the backbone of
summer
months the tendency is
the market must still be trans¬
here is
29
dollar, these opera¬
decline of the Canadian dollar to
instead
5Y2%, a new low point for the
profit. In taking a long-range
year.
Stocks on the other hand
viewpoint it is perhaps to be de¬
staged a moderate rally. The in¬
plored that foreign investment in
dustrials led by the paper issues
Canada has often suffered as a
of
New index comprises
long
tions have produced a loss
fected.
market.
not
During the week activity in the
largely re¬
stricted to sales of internal Do¬
was
of the
course
speculative
to wide unpredictable fluctuations operations.
In the process of at¬
in view of the limited scope of the
tempting to discourage undesir¬
then permissible operations.
But able speculative transactions, the
York
New
would
dollar
S.
vis-a-vis
dollar
bond market again was
alike the immediate course
has
U.
Thursday, April 12, 1951
.
The SEC Slock Market Index
discount
the
that
persist.
By WILLIAM J. McKAY i
To the initiated and
Howe
Canadian
the
on
..
1949.
61
stocks
were
These issues
reorganization.
O
were
added
•
Volume 173
decreases
Number 5002
and
not
.
.
The Commercial and Financial Chronicle
.
changes
in
capitalization.
To
-
accomplish this,
is
vaiue
the
computed
by
tnis
base
new
that
so
is
value
current
new
which
that
value,
in
have
would
had
been
tnere
when
divided
the
sultant index will be the
tained
base
new
a
re¬
as
same
ob¬
been
change
no
shares outstanding.
For
example, let us assume that
offers
company
a
tional shares
at
particular
total
that
a
on
if
these
been
offered, the
the
outstanding
of
*
stock
and
not
value
addi¬
price of $60
day
had
shares
500,000
common
of its
market
the
shares of all stocks in the
indus¬
Dean Witter
Opens
New Chicago Branch
Warburton, Kulner &
members
of
the
New
Joins Davies &
Maples & Goldschmidt
Mann to Be Formed
CHICAGO, 111.—Dean Witter &
Co.,
(1555)
SOUTH
NORWALK,
York
Conn.
SAN
trading
the middle-west
burton has been active
in¬
with
Davies
New York
San
and
Fran¬
was
on
previously with Blyth & Co.,
Inc.
Byron Blachley Opens
SAN
ron
C.
FRANCISCO,
Calif.—By¬
Blachley is engaging in
an
the
with
be
The
additional shares
$830,000,000.
that
base
the
this
to
up
current
new
000,000.
Let
value
time
If
Additional
us
of
securities business from offices at
35 Vicente Street.
would
suppose
the
group
$500,-
there, had
shares
value
been
has
sold,
been
the
General Aniline & Film
no
index
would have been
RESULTS
$800,000,000
Corporation
OF OPERATIONS
=160.0.
$500,000,000
What must the
base value be
new
For year
...
to
give
the
index of 160.0?
an
formula
value
above, the
From
base
new
equals
Net Sales
$500,000,000
$830,000,000=3518,750,000,
Then the
Income
new
Costs &
=160.0,
Cost of
index
before
the
is
as
for
all
above
formula
used
and
changes in shares outstanding
also for capital distributions.
Of
course,
Report of progress
splits
the
shares
the
of
case
change
in
new
Binghamton, N. Y. has
at
mammoth
the
a
before
the
base
new
If
to
stock
is
borrowed
same
Provision for
Net
equals
through rights
value
before
Where there is
or
stock of
'7."
Ozalid paper
production techniques.
Our best year
an¬
• • •
Sates
•
(as occurred in
utility issues), the value
than
..
V'
1950
a year
.set a
new
time
number
when
of
the
of
it
is
change
..
*
3.99
2,527,393
*•'
•'
•
■■' "*'■
v
'
•
'
•
.'
of achievement—
high, exceeded $95 million, which is
as
more
the previous peak in 1948.
over
.production
operating efficiency
was at a
high level... and the 1950
measured by output in relation to
of
in
the
Gkasselli, N. J
for
stock
a
considerably improved
was
outstanding
result
$
man
hours
made at
are
shares
the
four million dollars
Operations
Changes in weights and adjust¬
ments of base values
.-,9.55
2,908,612 * $
$
cost & expenses
,G'
:
ex-distribution price to determine
the old current value.
the
$
depreciation charged to
of the distribution is added to the
1
$ 7,000,520 $ 2,926,810
year
company
several
77,566,174
Ozalid, at Johnson City, N.Y.... new
change.
capital distribu¬
a
tion of either cash
other
the
2,129,000
88,328,655
,\w.-\i''•
•-1 y 7
by the old number of
outstanding to obtain the
current
6,830,000
'
multiplied
shares
404,584
taxes
earnings for
Provision for
the price* of the
it not sold ex-rights is
608,813
(146,915)
Per Share Common A stock
sold
22,806,162
590,062
(income)—net
or
as
stockholders,
stock had
24,926,000
*,
.
Total
so
51,617,615
expenses
capital
of
change
value
on
Other deductions
the old base value.
/
56,129,518
;
plant for color film.
stock
number
outstanding is the
value
that
the
Interest
stock dividends, the value
or
after
in
Ansco,
...
177,344
80,492,984
Expenses:
products sold
Selling, administrative arid general
change2.
The
199,531
95,329,185
Total
S830.000.000
same
Securities—Net.,
index equals
$518,750,000
the
on
1949
$80,315,640
$95,129,654
•
X
ending Dec. 31..;
^1950
$800,000,000
has
new
facilities
Heliogen and Vat dye production.
over
Earnings... net income
1949.
before taxes
was
the highest of
any
dividend,
tion
split, capital distribu¬
sale through rights.
For
or
year except
practical reasons, adjustments for
changes
in
outstanding
shares
brought about by other
for the
1944.. .net after taxes,
war year
Common A increased from
per
share of
$3.99 in 1949 to $9.55 in 1950.
means are
made in the first week of the fol¬
lowing month except that
justment is
made
if
the
ad¬
no
Spending 5Kc of
revised
Experience
has
shown
that
Rensselaer, N. Y....a multi-million
ad¬
justments
dollar
for
less
than
50,000
have no effect upon the
shares
new
plant for intermediates.
composite index and only a negli¬
upon the group index.
the
adjustment
same
value
result
if
issued
and
base
value
1939
the
additional
theoretical value
to
the original
1939 base value.
example above, a total of $30,000,is being added to the
group.
At the
the
were
worth
750000
is
$30,000,000—160%,
in
then
1939.
equal
The
to
or
Central Research Labs.,at
Pa.
$18,-
adjusted
.
...new
high
pressure
Easton,
laboratory.
base
of
Arthur H. Webb Joins
—
Dame
Street,'iWest,
as
210
active
was formerly a director and'
Manager of the bond trading de¬
partment for Savard, Hodgson &
Co.. Inc.
a
finer quality X-ray
speed and definition of
broadened the development
agents,pharmaceu ticals... introduced
have
The
Notre
^General Dyestuff Corp.NYC sales
trader. Mrii
Webb
for dyeing nylon and acetate
acetylene derivatives for plastics, surface
certain
Que., Canada
joined Credit
Ltd.,
a
of
laboratory for further exploration
acetylene products at Easton... and
plant buildings
for greater
at
r**.j
,
• • ■
appears
extraordinary characteristics—a
production of quality dyestuffs,
intermediates, and detergents.
General Aniline will continue
new
avenues
of
new
facilities
new
and industrial
production
...
GA
..
forty-eight
new
products.
modern in the world, at
Binghamton... a high
improve old
products for industry and agriculture...
strive to better
serve
the
nation in 1951 and the years
public and the
ahead.
JACK
plant, most
new
products and widen applications of the 4,000
opened during 1950
color film
explore
developments in engineering, technology,
drugs, detoxifier of others including
include Ansco's
to
chemistry, undertake
plasma substitute, extender of
•
agent.
new
Grasselli and Rensselaer
iodine, superior germicide and virucide.
Arthur H. Webb has
Interprovincial,
developed
pressure
improved the film base and physical
better blood
Interprovincial
MONTREAL,
.
...
PVP, polyvinylpyrrolidone, which
$518,750,000.
to
Credit
on
produce deep, fast shades for dyers
Ozalid paper.,.
of its addition, all other shares in
industry group are valued at 160%
of their original base value. On this
basis,
the new shares which are
being included
time
value
process
film... increased the
the
000
new
films, and developed
added
In
sales dollar
properties and performance of all Ansco
to
this
(lyes and intermediates
.
gives
theoretical
a
assigned
were
shares
as
of
new
fibres to
gible effect
2 This
every
research, GA in 1950 introduced forty-eight
weight would differ by less than
50,000 shares from the old weight.
a
Exchange membership of the late
try group would have been $800,000,000.
&
members
Charles Goldschmidt.
as
dividual floor broker.
area.
is
Building,
cisco Stock Exchanges. Mr. Beaver
rapidly expanding New York City. Partners will be
April 19 will admit Edwin Safir to
commodity trading activities. William J.
Warburton, member of partnership. Mr. Cafir, who has
Frank A. Jost, Jr., Chicago com¬
modity man and board of trade the Exchange, "Newton H. Kutner been with the firm for some time
member, has been appointed Resi¬ and
William B. Mann. Mr. War¬ will acquire the New York Stock
dent Manager of the new office
serve
Russ
of the
firm
of
Warburton, Jutner & Maples & Goldschmidt, 85 Wash¬
Exchange, announced the
Mann will be formed soon with
ington Street, members of the
a Chicago office in the
offices at 575 Madison
Board of Trade Building to aug¬
Avenue, New York Stock
which will
Beaver
Mejia,
—
Stock
Exchange,
FRANCISCO, Calif. —Al¬
bert J.
opening of
ment the firm's
Mejia
(Special to The Financial Chronicle)
To Admit E. Safir
The New York Stock
Exchange
27
,
28
The Commercial and Financial Chronicle
(1556)
of
Louisiana
and
Southern
Cali¬
fornia. Later he joined the Colum¬
bia Trust Company in New York
News About Banks
of
REVISED
became
institution. He
elected Senior
was
Vice-President in 1936, President,
in
1939, and Chairman of the
CAPITALIZATIONS
Board in 1945.
Burgess, Chair¬
of the Executive Committee
W.
Randolph
man
stockholders
on
void
New York United Service Organi¬
zation
Campaign for $1,380,000, it
by Alexander I.
Henderson, Manhattan lawyer and
General Campaign Chairman. Mr.
Burgess, who has been with the
National City Bank since 1938,
announced
is
was
previously Vice-President of
the
New
Federal
York
Bank. He is
Reserve
former President of
a
if
close
business
of
Association.
Bankers
President's
the
on
the
of
and
American
He
served
Committee
on
Foreign Aid (the Harriman Com¬
mittee). He was Chairman of the
War
Finance
3rd
and
served
New
for
Committee
4th
War
the
and
Loans,
Chairman of the Greater
as
York
Fund
Campaign
in
1943.
Headquarters of the New
York USO
Campaign is at 50
Broad Street, New York 4. CoChairmen of the campaign with
Mr. Henderson are Thomas D'Arcy
Advertising
Executive,
M.
Loeb, Jr., Metal¬
Brophy,
Carl
and
lurgist.
-
-
:
f.i
■
*
BANKERS TRUST
COMPANY, NEW YORK
Mar. 31, *51
Dec. 31,'50
j
Total
$
1,850,523,728
resources
Deposits
1,837.554,151
1,652,546,238 1,642,085,318
Cash & due from
banks
S.
U.
520,994,986
Govt,
530,358,576
se¬
curity holdings
413,472,574
412,006,133
Loans and disc'ts
793,766,950
774,683,405
39,125,927
38,960,676
Undiv.
profits—
*
v
Richard
elected
tan
C.
Holly day has been
Trustee of The Manhat¬
a
Savings
Bank
according to
of
New
York
announcement by
an
Willard K. Denton, President. Mr.
banks
holdings
and
Randebrock
Director
&
46,102,838
57,209,719
67,507,725
69,722,504
14,105,284
14,085,284
Public
%
THE
National
Bank
shares to stockholders. According
to the announcement by E. Chester
Gersten,
President
of
the
bank,
made after a meeting of Public Na¬
tional's directors, the bank plans
to
increase
shares
the
number
of
its
outstanding
by
151,250,
756,250, with par
unchanged at $17.50 per
from 605,000 to
value
share. Stockholders will be asked
to act
on
the proposal at a special
meeting
posal is
on April 19, and the pro¬
subject to approval by
Comptroller of the Currency.
Upon
approval,
the
additional
are expected to be offered
$40 a share to all stockholders
pro rata on the basis of one new
at
share for each four shares held at
the close of business
on
April 20.
The bank intends to enter into
an
*
Deposits
Boston
Corporation,
has appraised the
willingness to head
bank
a group
opened
of New
April 9
on
office in its
branch
new
Rockefeller
of
end
Plaza.
Undivided
north
The
at
office
branch
company's
J.
the
over
move
was
weekend without
Cash
Rockefeller
Center
area.
A
*
of
banks
U.
dent in
of
official
series
a
of
and
company.
1,243,767
10,654,930
The
midtown
office
*
heretofore
*
BANK
&
TRUST
S.
t.
resources——
8
%
*
438,789,53G
•
475,474,046
398,058,947
433,228,132
722,499,424
611,027,408
17,201,622
16,799,990
bills
discounted
Undiv.
__
proiits—
*
Mar.
31, '51
Dec. 31, '50
$
resources-
Deposits
—
$
1,635,814,772
1,769,855,115
1,478,597,204 1,616,865,824
Cash & due from
banks
U.
S.
456,886,588
Govt,
and
530,225,048
530,776,635
605,050,557
se¬
bills
discounted
551,403,446
—
>
OF NEW YORK
Mar. 31/51
Total
resources-..
122,525,126 124,392,436
104,721,337 104,638,094
Deposits
Cash
and due
Dec. 31,'50
from
banks
41,871,061
37,664,892
U, S. Govt, security
holdings
and
vided
32,256,917
5,033,038
4,912,999
undi¬
profits*
Walter
of
the
G.
divided profits
He
was
Y.
was
and
years
was
Chairman
Commercial
Trust
York, died
63
Kimball, who
N.
the
on
Com¬
March
of age. Mr.
born at Canton,
graduated
from
St.
of
years
112,639,867
*
.
*
ft
National
Franklin
World
War
ft
Fuhr,
W.
President of
elected
National
Bank
Citizens
the
Trust
&
been
has
Apgar
the
Peoples
Navy.
Bank in
named
Assistant
1925.
Through
associated with the Pennsyl¬
came
in
'
*
.#
Lafayette
PHILADELPHIA, PA.
Total
revenues-
711,574,605
Deposits
Cash & due from
banks
U.
S.
241,581,437
Govt,
Loans
250, 905,753
260:220,584
13,058,342
216 474,266
12 659,866
se¬
curity holdings
bills
and
discounted
Undiv.
274 339,840
189,996,382
—
—
profits—
Elmer F.
ft
*
*
Schafer, Assistant Vice-
of
Co.
Trust
and
Bank
Pittsburgh died
Schafer, who
was
in
of
Company
March 25. Mr.
on
45 years of age,
the
noted in these columns March
been
"Post-Gazette"
Executive
Bank
Farmers
which
also quote:
bank,
Vice-President
of
the
the Newark "Evening
says
News" of March 30, which states
that Harvey Quimby has been ad¬
Cashier
from
and
Trust
Vice-President
to
Trust Officer.
and
The Cashier's post
assigned to William J. MacCallUm, former Assistant Cashier,
was
ft
ft
Theelection
Sawin
ft
K.
the
the
of
tors
Pittsburgh
Chapter,
He
American Institute of Banking.
of
General Vice-Chairman
also
was
convention
its
committee.
graduate
A
School
of the Graduate
Banking at Rutgers
of
F.
National Bank in 1924.
Company
of
*
ft
addition
An
ft
of
$125,000 to the
capital of the First National Bank
April 20,
by William of Middleton, Ohio, through the
President.
Mr. sale of new stock, has raised the
associated with capital from $500,000 to $625,000,
effective
announced
been
Mitchell,
Sawin
Benjamin
Trust
of and
past President
was
we
member of the board of direc¬
Executive Vice-President
as
Provident
R.
of
He
a
from
University, he began his banking
career
at the
old Monongahela
the "News."
has
been
since* 1944
bank
and
for
the
as of March
of Vice-President in charge of the
commercial
6.
*
past four years has held the post
ft
ft
The capital of the First National
department. Bank of Omaha, Neb., was in¬
creased, effective March 13, from
banking
Other promotions included in the
announcement
same
tate
man
John J.
were
Planning Officer, and J. Nor¬
Miller from Trust Operations
Officer
Vice-Presi¬
Assistant
to
dent in the trust
department. Mr.
Sawin began his banking career
of Evanston,
pany
served for six
the
111.
years
on
National
Chief
Vice-
$2,000,000 to $2,500,000 by a stock
dividend of $500,000.
ft
An
ft
*
addition
of
$150,000 to the
capital of the Santa Fe National
Bank, at Santa Fe, New Mexico,
has enlarged it from $250,000 to
$400,000. Of the increase, $100,000
He later represented
a
stock
dividend,
the staff while
$50,000 resulted from the
Bank
Ex¬
joined the Union Trust Com¬
Rochester, N. Y., as VicePresident. He resigned that post
pany,
to become Vice-President of The
National City Bank of Cleveland,
Ohio. During the war Mr. Sawin
served
Chief
and
as
of
sale of
new
was
District.
Ordnance
*
composed
Brooklyn, N.
Y.,
who have been with the bank 10
more,
celebrated
the
anniversary at their
annual dinner
on
Friday evening,
Buckley
Mr. Miller has been
with
ciated
Provident
the
asso¬
since
1931.
it
Donaldson,
weeks.
Mr.
Philadelphia,
after
He
an
Vice-
a
died
illness
58 years
was
had
Donaldson
of
on
six
of age.
Vice-
been
President in charge of government
bonds
and
savings bonds
Dr. Joseph A. Burgun,
Federal
Reserve
original directors who
than
years.
10
States
vision.
Bank
San
of
new
capital became
ft
ft
Anchorage, Alaska, has increased
its
Capital from $200,000 to $300,-
Bank
at
The
more
He became
asso¬
$i00,000.
capital became effective
In November,
last, the
bank, which had been known
the Bank of
as
Alaska, converted to
National
the
System
under
present title, as indicated in
columns Nov.
,
its
these
16, page 1905.
*•
the
for
new
March 21.
ft
ft
A branch of the National Bank
of India Limited of
on
at
the
to
The National Bank of Alaska, in
worked in the bank relations di¬
held
stock
by the United
effective March 9.
with it 25 years, was
was
National
$800,000. The
was
guest speaker
ft
new
Diego, Cal., has increased the cap¬
ciated with the bank in 1919 and
which
ft
of
amount of $135,500
formed the bank and has remained
at the dinner
sale
000 by a stock dividend of
ft
President of the Federal Reserve
5
of
ft
The
«:
Leonard E.
Club,
Mr.
joined the Provident staff in 1946,
and was appointed Trust Officer
in 1947.
The increased
stock.
capital became effective March 6.
financial adviser to the ital of the bank from $664,500 to
Ordnance, U. S. Army,
attached to the Cleveland
April
of the
'51
$784,181,578
22, page 1255. Mr. Apgar lias been
tional
one
Dec. 31, '50
$837, 430,025
765 583,170
Mar. 31,
Building office for the past 18
years according to the Pittsburgh
of
April 6th.
BANK,
NATIONAL
PHILADELPHIA
THE
Courter, who died on Feb. 11,
Bank
bank's 25th
ft
ft
ft
H.
ft
or
in
Vice-President
and
1938,
1945.
had
Group V.
Bank
in
Treasurer
merger
vania Company in 1930. He was
made an Assistant Vice-President
he
Assistant
Fuhr is past President of the Sav¬
The
I
He joined the
1921, and was
S.
U.
Caldwell, N. J., suceeding Melvin
115,159,630
«
ings Bank Officers Association of
*
Milbourne
with
the
Bank
prior
service
in
career
President of the Mellon National
Reserve District, following which
President and trustee of the Kings
"•/
Mr.
age.
his
started
'
years
Kimball,
Board of
Bank
ft
41,879,927
37,638,675
31,301,428
Loans & bills disct.
Surplus
joined the bank in March of 1948,
having come from the National
City Bank of New York. He served
four years with the United States
Army, having received the Bronze
Star. Mr. Edelbach is at present
attending classes at the Nassau
County Chapter of the American
Institute of Banking.
of employees of the Lafayette Na¬
„„
the
aminer in the New York Federal
County Savings Bank of Brooklyn,
Street, East of 5th Avenue N. Y.,
completed 50 years of serv¬
of the Seamen's Bank for Savings,
ice on April 2, Charles D. Behof New York was opened on April
rens,
President, has announced.
9 in the bank's own building at
Starting his career in 1901 as a
Fifth Ave. and 45th St. Its quar¬
junior clerk, Mr. Fuhr was elect¬
ters to be known as the bank's
ed a trustee in 1948. For the past
Fifth Avenue Office.
five years he has been in charge
*.v
*
*
of the Williamsburgh office.
Mr.
GRACE NATIONAL BANK
joined
547,060,337
45th
on
who
bank
in
1933.
He
entered
the
Army
in 1943, and rose from Private to
Captain in the Air Force. He is
Chairman of the Service Charges
Committee of the Queens County
of
Surplus and un¬
i
He was 54
with the State Bank & Trust Com¬
—
curity holdings
•Loans
President,
Buckley from Trust Officer to Es¬
#
CENTRAL HANOVER BANK & TRUST CO.,
NEW YORK
Total
has
as
$
se¬
curity holdings
and
Bayside,
been ap¬
named
Albert
N.
EdelAssistant Manager.
Mr.
bach
Landal
has
Dec. 31, '50
1,741,236,736 1,714,391,242
1,565,611,812 1,552,289,582
—
Govt,
Loans
Dayton,
Philadelphia,
CO.,
YORK
Cash & due from
U.
National
at
April 2,
on
of the
Colonial Trust Company, he be¬
of
Mar. 31, '51
banks
Bayside
Philadelphia, died
a
brief illness,
after
Wilson
1,395,376
10,707,166
■
Pennsylvania
to
says
—
Deposits
Vice-
Milbourne,
The
pointed Manager of the bank's
Turnpike office, at 186-03 Union
Turnpike, Flushing, N. Y. This
announcement
was
made by J.
81,616,668
profits—
Lewis
*
41,131,215
81,361,889
NEW
Total
Assistant
York,
Borough,
V,
of
Company for Banking and Trusts
bills
CHEMICAL
illustrations,
#
40,265,104
*
spe¬
is being sent by the Irving to cus¬
tomers and other friends of the
113,331,634
se¬
discounted
Undiv,
Queens
Howard
President
of
ft
Landau,
New
of
Officer
$147,467,492
———
Govt,
ft
Cashier of The
Bank
vanced
Dec. 31,'50
include:
staff
cartoon
31.
cur¬
S.
Loans
charge and other members
the
CO.,
$146,579,461
112,145,057
—
curity holdings
in New York
seven
TRUST
YORK
Cash & due from
Frank M. Atterholt is Vice-Presi¬
pany of New
contemplated that the
FARMERS
resources-
Deposits
Concourse,
Irving's
ft
Mar. 31,'51
Total
giving
bank, underground,
from
all
the
buildings in the
Center. The new branch office,
one
ft
NEW
the
at
It is
BANK
the
as
231,482,787 147,633,533
168,798,438 152,219,063
244,442,905 259,588,908
Undivided profits—
12,635,454
12,295,032
i
Center
to
$
———
building is a
direct entrance from the Rocke¬
access
Dec. 31/50
Loans & bills disct.
of the
feller
NEW YORK
745,470,795 661,460,442
657,548,025 582,011,062
—
CITY
R.
Howard
security
holdings
inter¬
Carl
8,611,726
and due from
banks
including officers, clerks,
armed
guards, auditors, porters
and others. The new, air condi¬
tioned three-story and concourse
level building, has been especially
designed to furnish ample facili¬
ties to handle the growing volume
of business now being done in the
cial feature
INC.,
———
bank's
the
of
members
CO.
&
ft
*
resources—
U. S. Govt,
6, and continuing until early Sun¬
day morning, it required more
100
*
MORGAN
Deposits
ruption in service to customers.
Starting on Friday afternoon April
than
8,993,028
*
$
made
The
purchase any unsubscribed shares
price.
profits—
Mar. 31/51
that office transferred to the new
quarters.
P.
Total
personnel of
and all business and
National
less than the subscription
from
24
been closed
West 48th Street has
vestment bankers to be formed to
pot
due
——
new
building
a
at 25 West 51st Street at the
its
of in¬
$
466,343,961 492,859,737
—
-
which
of
Dec. 31,'50
——134,203,108 141,939,132
U. S. Govt, security
holdings
66,282,348 123,270,950
Loans & bills disct. 258,206,756 234,313,765
*
Irving Trust Company
York
underwriting agreement with The
First
AND
YORK
banks
The
shares
BANK
NEW
513,311,132 534,747,521
resources——
Cash and
ft
*
and
Company
of New
York
plans to increase its capital funds
by approxima tely $6,000,000
through sale of 151,250 additional
NATIONAL
COMPANY,
$
Total
of
Thursday, April 12, 1951
.
Bankers Association. Mr. Edelbach
ft
Mar. 31/51
Vice-President; J. Franklin Jones
and George R. Leslie, Jr., Assist¬
ant Secretaries. A 16-page book¬
let, which announces the move in
Trust
PUBLIC
TRUST
George J. DeNike, Vice-President;
Kenneth
M.
McGhee, Assistant
if
—
*
approximate¬
W.
F.
Company, Inc.
si:
The
of
66,026,213
bills dlsct.
Loans &
City,
offers
complete
banking
is
Chairman
of
the
service and safe deposit facilities
Board
of
Culver, Hollyday
&
for
businesses
and
individuals.
Company, Inc. He was formerly,
President
61,465,069
8. Govt, security
Capital and surplus
Hollyday
a Trustee of the bank but
resigned
during the last war while serving
as a Captain in the Navy.
He is
$
Cash and due from
U.
staff,
ft
Dec. 31/50
resources—242,537,765 256,695,373
Deposits
206,820,690 221,024,643
050,000, compared with $32,993,000
at present. Such total does not in¬
clude the unallocated reserves of
are
CO.,
Manager
members of the Club,
also
31,'51
$
$9,000,000, total capital
funds will be approximately $39,-
which
ly $3,350,000.
&
Total
imately
the bank,
<
,
YORK
Mar.
proposed sale of stock will in¬
crease capital stock from $10,587,500
to
$13,234,375 and surplus
from
$13,412,500 to $16,815,625.
With.undivided profits of approx¬
the New York State Bankers As¬
sociation
NEW
May 9. The
on
*
HARRIMAN
the
before
exercised
not
*
BROTHERS
will become
23, and such rights
Chairman of the City
Bank
Farmers
Trust Company,
will act as Chairman of the Com¬
mercial Banks Division of the
and
BROWN
April
before
or
of The National City Bank of New
York,
(t
shares will be mailed to
ditional
Walsh,
Lafayette Avenue office, became
Vice-Presi¬
named Vice-President of that
was
Bankers
and
ETC.
NEW OFFICERS,
he
dent; when the Commercial Na¬
tional was organized in 1928 he
CONSOLIDATIONS
NEW BRANCHES
which
J.
ton
..
London, Eng.,
opened at Fort Portal, Uganda,
March 16.
Following his graduation
rent, regular annual dividend rate
Lawrence University in 1908. Be¬
the
of *$£.00
fore
Col. Walter
Jeffreys Carlin, Presi¬
Ireland, he returned to the United
George W.
bank, presented Lafay¬
States and became affilitated with
of the trading
the
Frazee, Olifiers & Co., New York
tained
per share will
on
the
be main¬
increased
shares.
entering
the
banking
field
Towers
with the St. Lawrence
County Na¬
dent of the
Subscription warrants evidencing
tional Bank of
ette Club
the rights to subscribe for the ad¬
ball had worked in the oil fields
Canton, Mr. Kim¬
Assistant
Hotel
in
Brooklyn.
pins to Charles Kitlitz,
Vice-President, and Fen-
from the
University of ^Belfast in
Monongahela
in Pittsburgh.
National, Bank
,
George W. Hoffmann
Hoffmann, Manager
department f°r H.
City, has passed
away.
[Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
(1557)
that end by means of credit restrictions and
budgetary surpluses,
the latter hope to cut down
purchasing power by means of a
in Inflation Atmosphere
By PAUL
capital levy.
not
EINZIG
well
as
on problem of inflation in Britain, Dr. Einzig points
complicated situation in which various inflationary
which is effect. Whatever remedies may
■
many
present and it is impossible to ascertain which is
are
»
deflationary factors prevail. Says too
as
is
cause
fought successfully as long
rising world trend of raw materials prices.
CLEARWATER, Fla.
goods
or
York
materials is reversed.
raw
Two With Bache & Co.
(Special
there
as
to
The
CHICAGO,
Financial
With
Chronicle)
111. —Alan
P.
have
Bache
&
the
have
office
at
605 Court Street under the direc¬
ANGELES,
seller
to
branch
of Harrison
Hopper.
Wagenseller & Durst
LOS
G.
added
Exchange,
new
a
(Special to The Financial Chronicle)
Mc-
Greevy and Robert P. Templeton
been
Stock
opened
rising trend
prices of
Good-
—
body & Co., members of the New
staff
of
Co., 135 South La Salle
Hodges
&
is
Durst,
Isaac Gerstley
Calif.—James
with
now
Inc.,
Isaac
Wagen¬
626
in
South
Gerstley,
Spring Street, members of the Los
adelphia, passed
Angeles
Street.
at
Stock Exchange.
Senior
Partner
Gerstley, Sunstein & Co., Phil¬
the
at his home
away
of 70.
age;
ANNUAL REPORT—1950
"
.
,
materials
raw
Goodbody Co. Branch
to, it would
tion
is in a state of inflation.
Yet the inadequate
Understanding of the meaning of the term
might easily lead to the adoption of entirely
"
resorted
and
LONDON, Eng.—Inflation has become a favorite topic of con¬
in Britain. Everybody agrees that there already exists
«a fair degree of inflation, and that it is likely to become accen¬
tuated. But very few people know what they really mean when
they say that there is inflation in Britain. To
most
people "inflation" is just synonymous
with
"a rising trend of prices."
There are
very few even among experts who have taken
the trouble of defining or analyzing what they
mean
when they say that Britain's economy -
measures.
materially affect the price of imported
of world
versation
mistaken
be
symtoms
be applied, holds infla-
tion in Britain cannot be
■
should
made with the aid of such materials.
Quite obviously the problem
would have to be tackled at the other end.
Inflation in Britain
could not be fought successfully unless and until the
Commenting
to current
Whichever device
29
The
anti-inflationary measures must be
chosen according to the causes and nature of
the inflation.
It is important to know, there¬
fore, whether inflation in Britain is due to an
in
expansion
Paul
the
volume of »currency and
expansion of purchasing power,
or to excessive capital
investment, or to overexporting, or to a rise in prices abroad. One
important factor which is the major cause of
h
Dr.
THE NEW YORK CENTRAL RAILROAD COMPANY
credit,
Einzig
or
to
-
an
inflation
in many continental countries, a budgetary deficit, can
out, in advance, because Britain had for years a budget¬
ary surplus, and her present surplus is very considerable.
There
remain, however, a sufficiently large number and variety of poten¬
be ruled
tial factors to make the situation very
The Year in Review
complicated.
<
The difficulty for the economist who must try to diagnose the
cause of the trouble is that there are too many symptoms present,
The year
and that it is almost
*•
sixth
impossible to ascertain which is the cause and
which the effect. Beyond doubt the volume of currency and credit
has expanded very considerably in recent years. But the rising
trend of prices and wages, and the expansion of production, has
increased legitimate requirements for money and credit, so that
it is arguable that the expansion of their volume was the effect
and not the
that the
When
one
re¬
in Ger¬
many during and after the first World War in justification of the
astronomic figures of the Reichsbank's note issue, one is inclined
to examine the argument with greater care.
calls, however,
.
of inflation due to other causes.
cause
same
very
argument was used
making
Only
is, of course, no question of credit currency inflation in
Owing to the widespread use of banking account^, infla¬
tion does not assume such a form.
Nor has the volume of bank
credit
'
three
claimed
from
future
continents
powers^" The Monroe Doctrine
tried
to
prohibit
America's
navigation
northwest
of
had
were
by
pro¬
longer
no
European
any
issued after Russia
was
been
to create additional
purchasing power. On the other hand, in a negative sense, the
expansion of currency and credit may be held largely responsible
for the inflation.
For if the volume of currency and credit had
been maintained rigidly at its level of 1945 then this would have
acted as a brake to the expansion of purchasing power, and it
might have moderated the rise in prices. It is impossible to say,
however, whether in the absence of an increase of production,
brought about with the aid of the additional credit, prices would
not have risen even more. One thing is certain. But for the credit
expansion the state of over-full employment which has existed
since the war could not have been maintained, and wages could
fishing
along
The
expansion of currency and credit may have played
a part among inflationary factors in a negative sense, the expan¬
sion of purchasing power decidedly played a part in a. positive
sense. .This expansion manifested itself in higher wages and sal¬
aries, larger profits both through increased current earnings and
capital gains, greatly increased social service benefits, etc. But in
addition to the increase of the national income, its redistribution
also
produced
inflationary effect.
an
For
an
active purchasing
created by the increase of lower incomes is not offset by a
corresponding reduction through high taxation of larger incomes.
power
As
general rule the higher the income the larger percentage of
a
it is
saved, and the lower the income the larger percentage of it is
creating additional active purchasing power, and has there¬
wards
fore contributed towards the
Over-ambitious
purchasing
sumers'
goods,
other hand,
produced
has
an
main
cause
capital investment, by
to
On
the
be
or
was
i
factors may have been during the
of inflation has been the rising trend of the prices of
railroad
is
"
mi
should cause
a
rising trend in the general price
level, the cost of living and the wages level.
of
this
factor
would have
required
very
large
national security demanded
*>t' J
of
production.
Indisci&iinate
vocated
dose
an
in-
i
_
reduction of
purchasing
power
is widely ad¬
by the orthodox school of economic experts, and also by
Left-wing Socialists.
While, however, the former want to achieve
Buffalo
New York
to
traf¬
our
emergency,
efficiency. Thus dieselized
mileage
34.2
rose to
per cent,
equipment
necessarily
raised
City.
relatively piodest.
jvas
of
800
The
debt. This
new
of $25,078,253
0.3
or
our
Central
incurred
$29,968,-
almost offset by retirement
was
of older Central debt, including
State
York
of
in
older
cent,
per
grade
debt
of
lessor
amounts
eliminations,
crossing
companies.
That
was
Hudson
authorized
Railroad
structing
r
Mohawk
and
Hudson
DeWitt
long,
and
Schenectady,
of
chuffed
dignitaries. The
predecessor
which
of
System
in
16
the
York
Mohawk
and
of
con¬
purpose
It
miles
with
Mohawk
three
and
hundreds
today's
was
—
Y.,
the
became
New
the
or
betwixt
way
born
was
locomotive,
the hilly
N.
u-■
State
April
brave
a
11,000-mile
11 ^4
between Albany
bulging
Hudson
of
coaches
demands
federal
railroads
York
Central
operation.
were
and
increases
government
serving
Settlement
of
sharp
jumps
which
Confronted
the
increases
freight
do
we
125 years
stand
now,
progress-filled
long
Twentieth
another
year
1951.
the
in
with
since
railway
only
The
of
per
1950
advances.
$2.84
we
cent
have made and
on
earnings,
record
Nov.
24.
a
completed,
progress.
of
prices
railroad
without
increases.
authorized
role
The
the
of
in
fare
or
seek
further
Commerce
about
favorable action is
national
rate
to.
Interstate
raises
supplies
.
railroads, after
general
obliged,
higher
occurred
and
operations.
costs,
regions.
also
materials
new
were
interim
there
of
mean
4
Com¬
cent
per
essential
to
our
defense.
was
an
which
inadequate
while
reflecting
were
a
return
the
return
the
movements
highway
taxes,
in
which
many
we
do
seem
assured
hauling
competitors
states for proportionate-use
would
tailing the huge subsidies
on
have
which
been
have
the
many
effect
of
of
freight-
our
fattening, 4
to
cur¬
our
net
of
All things
tinue
highest
share, paid last Dec. 27
uncertainties, but
detriment.
our
investment.
board of directors
many
1950,
Our net income,
revenues,
depreciated
your
in
are
relatively high business volume. Also encouraging
a
are
share, nearly doubled that
of total
income
1945, enabled
dividend of $1.00
per
We
it represented
cent
operating
2.1
war-torn
a
per
nation's
number of railroad
charge
Meanwhile,
to
1949,
a
in
obviously will
increased
line
rate
There
of
range,
of measurable
Even
the
Present, future prospects good 1
Century?
are
substantial
tho
indelibly, has
begin the second half of the
we
vexing
making
for
lead
since the Central's founding. Where
as
but
leaders
case
of
made
are
Time, moving inexorably and writing
advanced
cases
essential
are
holding
these.
for
costs
wage
colonels
as
in the east. Further
advances
union
One
control
seize
to
by
changes.
Army authority since then, with
mission
Sizable
made
rules
railroads last Aug. 27. They have remained under U. S.
original
—
early-day
New
Various
wage
presidents
later the historic, wood-
years
•'
Higher costs require higher rates
':
the
of
rivers."
:
of private capital.
Clinton
feet
'
■
double rail road
or
August day five
burning
when
creation
17, 1826, with $300,000
One
-
Company "for
single
a
'
■
.
legislature
To counteract the
a
deflation, leading to widespread stoppage of production just at
the time when the interests of
crease
from
'-v..
.* '
the situation
only 2.3
of
J*-
I----
travel
born
of
inevitable that the rise in the prices
meet
*
A
so,
influence
+■'.
to
England the previous fall.
or
was
to
national
1949.
in
new
$2,147,500
in
1949.
It
old, but.you needed
year
.
and
train
$18,315,170,
of imported goods
the
in
greater
cent
Although the
first
of
sharp rise in the prices of raw materials since the beginning
even
per
New
This was due in part to the devaluation of ster¬
to the
28.7
due
ling in 1949, in part to the boom in the United States, but mainly
of the Korean conflict.
„
packet
Albany, and down the Hudson
at
imported goods.
one
f
passenger
Short range and
doubt about it that in 1950-51 the
no
achieve
George Stephenson's Locomotion No. 1 had pulled its
creating
its!share in the British inflation.
can
Canal
'•
inflationary effect is grossly exaggerated.
phases, there
from
vital
the argument that excessive experts during 1950 have
Whatever the main factor
earlier
of
program
and to
and electrified locomotive
order additional diesel-
needed
cars
fic-carrying responsibilities
North
inflation.
and reducing the volume of the output of con¬
power
and
coast.
Britain has contributed to¬
The equalitarian trend in
consumed.
Erie
days by
ten
the
While the
and
receive
to
debt, the 1950 increase of $2,743,047,
deliberately expanded in order
have been kept down.
equipment barely affects debt
We continued
electric locomotives
Monroe
colonization
New
tvere
soil.
James
American
the
for
the
before,
years
that
"subjects
There
K
their living
the nation's
was
Americans
ten
every
,
Britain.
<
1826. John Quincy Adams
was
president, and nine of
the
since
to
considered, I look for the Central
demonstrate
substantial
holders
in
progress
1951
and
shown
in
in
to
subsequent
con¬
years
1950.
declare
to
to
G. Metzman
March
14,
1951
President
i
30
The Commercial and Financial Chronicle
(1558)
V
Continued
from
page
2
100th
the
The
his
control
chemical
over
to dispose of other restricted bonds at
credit is
this
tended
to
Because
been
recently
chemicals and
of
proposed
P.
Morris,
Manager
William
with
Department,
Stock
nancing, the
outstanding
September 1967/72 have been under mild accumulation by
of the out-of-town banks.
Our
Reporter
Continued
Governments
on
The
•
fi¬
the longest tap issue had a
of time.
Subscriptions of
pressure.
stock, .in 1951, would be
Celanese
ing and also
ket
a
pat-,
than
the
vanced
in
the
"orderly
market"
market," and while there will be
the financ¬
mar¬
depressed
more
present
action
might
general stock
somewhat
V,.
-
relatively
ad¬
one.
Midwest Exch. Members
v.
a
continuation
of
sooner or
later, those
'
Brokaw &
Joseph
V
Serakoff,
Friedman,
Co., St. Louis, Mo., and
Klein, Faroll & Co.,
Chicago, 111.
to
come
that
the
exchange to act
floor
the
of
floor brokers.
as
will
be
undertaken,
Once this has been
plished the trend of money markets will be
more
hay.
Short-term issues
are
going to hold greater attraction in the
was
the
case
in the past.
MIAMI,
boda,
Jr.,
Graves
&
The
Financial
Chronicle)
Fla.—Edward
probably be in spite of continued uncertainty and wider price
changes in the near-term sector of the list. Nevertheless, the
is now with Gordon
Co., Shoreland Build¬
ing.
-
obligations that give them the least amount of risk.
Notes and intermediate-term
So-
M.
'
attraction to those that
these
Bosworth, Sullivan
(Special to The Financial Chronicle)
DENVER, Colo. — Nicholas F.
Truglio has become connected with
Bosworth, Sullivan & Co., 660
Seventeenth
Street.
He
was
for¬
merly affiliated with Stone, Moore
& Corhpany.
an
securities.
can
"orderly
available
to rearrange
maturity schedules.
be available to those that
cause
in
a
a
discount
are
position to add to
The longer end of the list will
can assume
the "flexible market" is not
are
at
a
greater amount of risk, be¬
going to be too much concerned
about wider price changes in these
obligations.
The income attrac¬
tion, considering the longer maturity, is still in favor of the shorts
and
intermediates, especially in the eligible obligations.
issues
will
continue
to
witness
increasing
amounts
of
and
in
due
Brahmins.
vestment
while
is very
find
to
course
Here
Boston
plant
inr-
large, the labor
wonder
of
the
"gold
is
ratio
just
about
the, best
you
anywhere—a lowly -3%.
pipe lines' have
standard"
pitchmen,
the
fixed
price of gold is just too low for
widely profitable mining opera¬
Zoomed
ings, hopped up by the leverage
Here
is
slick
a
industry
example
.
where
risen
The tap
switches
because there will still be movements from the early to the late
labor
of
costs
elsewhere)
(as
yet
price has remained static ($35 an
-ounce). Just let the official gold
price get a good nudge, as it did
in
1934, and this 59% labor ratio
will dive like
In
a
loon.
them
of
1950 I believe the top favor¬
in
popularity. Just grant
fair
a
capital
and
from
return
invested
on
eommOrrf St«ckt earn-
50%
to
70%
in
debt
and/or
preferred, point to a fas¬
cinating growth situation. Look at
Texas
Eastern,
Gas 1
nessee
Panhandle,
and
Transcontinental
and
ites for investment trust purchase
Gas
Pipe
stop worrying about
labor
item
>
Ten¬
Transmission,
lousing
up
Line
heavy
a
dividend
prospects.
that, in these preferences, we per¬
The
worst
thing about steel,
motor, rubber tire and rail equip¬
ment corporations is not the pres¬
ceive
ent
oils, pipelines and utilities,
were
in that order. It is
the
coincidence
no
force of this
Oil com¬
applied
labor-ratio
argument.
panies average 16 cents of the net
sales dollar for labor, and that's
for integrated companies. Those
confining
themselves
more
to
have
drilling,
So
that
even
creases
as
it's
if
were
low
as
possible
substantial
to
a
10%
argue
wage
in¬
sanctioned in the oil
industry, the effect on operating
profits would be relatively mild.
Couple
that
fact
with
dynamic
growth in the demand for petro¬
products (estimated to be
leum
increasing 6% a year in New York
State alone) and you find strong
logic for placing oil shares at the
top of any current list. And if you
really want to snub payrolls, take
a
ratio, but vulnerability to the
next
contract
terrific
a
royalty enterprise,
operating company, and
'pipes in $7,000,000 a year with
only 12 people, including three
trustees, getting checks on pay
days! That's not a labor bite—it's
scarcely a tooth mark!
Electric
utilities, too, are in a
position laborwise. Op¬
erations
in
shown
from
recent
have
no
significant
variation
20% ratio. If the payroll
-
years
Perfectly
have
recently
sitting ducks for labor ne¬
gotiators. If a company can show
earnings in the hundreds of
many
net
millions, it has a real tough time
at the bargaining table pleading
inability to meet higher wage
scales.
I;
the
For
rest,
situations
like
meat packing, sugar refining and
tobacco, look attractive laborwise,
but
other
problems
such
in¬
as
ventories, high marketing costs, or
tight competition tend to over¬
shadow toil cost factors
rents
prove
an
sheltered
demands.
earnings
been racked up in these divisions;
and such lush figures are just so
to
good look at Texas Pacific Land They're
Trust! This is
obligations will not be without
are
Oklahoma
is
Chicago, Philadelphia, New York,
can
Regardless
*
afford to have part of their funds in
The issues that
that
newcomer
Texas,
No
this.
not
already being eyed by institutions that
or
Joins
This
will
market" means that many institutions will now have to seek those
Joins Gordon Graves
to
accom¬
normal, and this
liquidity factor will still be greater in the shorts, and
(Special
will
is where the shrewd and
competent operator will be able to make
future for certain institutions than
Both Messrs. Serakoff and Klein
will
others
bringing
for
have
which have already
measures
eventually halt the uptrend of loans.
along with
tranquillity.
romantic
shaggiest Yukon sourdough could
•give you a plausible explanation
ratio.
Exchange has elected to member¬
adopted,
-
line—
and
an
credit restrictive action.
However,
pipe
Arkansas natural gas to stoves in
,
the
been
Leonard
r
.■
borrowing trend, despite the un¬
pegging of government bond prices and voluntary credit limiting
measures, there may have to be greater flexibility and wider price
movements in the government market, as well as compulsory
CHICAGO, 111.—The Executive
of
'
the
at
tion.
.■
quite likely to be very
that will have to be given the market, under the "restrictive type
of freedom," will still be dictated by the extent of the inflationary
pressure, especially as measured by the trend of loans.
If there
is to be
look
measure
that
The very worst category shown
above
is
gold mining; but the
*
better
or,
Then
about,)
worry
investor
might
>:•'
:
Committee of the Midwest Stock
ship:
that
still, the "flexible
more risk involved, the rewards
satisfactory. The amount of protection
are
deferred awaiting
2V2S
There will be many issues that
will be out of line from both the standpoints of yield and price
and this will result in more shifting and swapping as the cautious¬
ness of operators begins to give
way to a feeling of some boldness
and confidence.
It is believed there will be greater freedom for
partial com¬
strong growth issue
in
the* longest
to
pleasing
earnings stability.
a
portion, while high by na¬
ture, is definitely not a threat to
2%s,-
position to take advantage of them.
While
commitments
new
losses
for
increases, has heightened the
earnings vista here. The telephone
-r..
The transition period in the government market is going to
offer some profitable opportunities for. those that will be in a
ently over-extended market, full
be
*'
~v
makes
labor
too
Profit Opportunities Ahead
undervalued at 31, overvalued at
79. This compares with a current
a
amount of
\^
rate
have been
thrown at the Central Banks and thus added to the inflationary "
shares might
justified, except in
sizable
very
temporarily by this
development. ; On a year-to-year
basis, only, our studies indicate
be
It is still
smaller! The wide extension inventory
grew
the rest of the
upon
than $13,45d;000,4)00 for the
more
; J
;r;
"■
of dial systems and other mechan¬
announced by Treasury Secretary Snyder-rwere considered very
favorable in government circles. ..This takes out of circulation a,
be held down
can
'«•«*.
"•
\
3
page
ical devices reducing the demand
for
labor, coupled with recent
as
other capital has been over recent
a
sympathetic.effect
early for a
pattern to develop, but there seems to be no desire on the part of
operators to hasten the process, because there seems to be a feel¬
ing that a real test of the market will come only with the passing
se¬
.
v.-
took: the
list, which also declined moderately.
years, should more than offset the
dilution.
At the same time, the
price of 50.
mitments in
market
from
—■
V'V'
The Labor Bite
ending of the exchange
offer and the so-called "protective phase" without too much excite¬
ment and without any important casualties. Prices edged down on
light volume, because both traders and investors were inclined
to stay on the sidelines to see what would develop in the "orderly
or flexible" market. The Vies, the bellwethers of the market, broke
the 99 level, but with no great amount of pressure. This action of
government
,
:,x
.
By JOHN T. CHIPPENDALE, JR.
to
from such financing, how¬
used as productively"^
that the
Never¬
.
will have
convertible
pre¬
common
some
selling of the
some
no
—I
if
price of the
There has also been
1956/58s in order to make way for the longest bank issue.
(■>>;•<
eventual dilution of presently out¬
ever,
'
■—
ferred stock which will make for
cured
'
great amount of buying enthusiasm appearing '
for the September 1967/72s. Likewise there is no
selling pressure.'
plastics.
standing common:"New funds
July VAs to be taken
a
theless there is
company
a
than $8 billion of the
more
,
which many believe is too important to be
ignored: The bank 2V2s
of
Scott; Robert J. Lewis, and Archie M. Richards.
ex¬
April
*
being paid to the discount issues due in 1954
and 1955, with the latter obligations
seemingly having a bit more
appeal than the 1954 maturity. Although there is quite a bit of
York office of
Estabrook and Co., present 100th anniversary bronze scroll to
resident partners
(left to right): Orin T. Leach; G. Norman
present rate
has
?J
a
of.
represent 100 years of wood pulp
of output,
although Celanese endeavors to
purchase about 50% of its pulp
requirements in the open market.
than
More attention is
sion plans, appears as still in a
period of dynamic growth. Tim¬
ber-cutting rights in perpetuity in
Activity
more
that still leaves
care
A.
1946; and,
at
"
•
passing amount of support for the opin-}
that the June maturity of the partially-exempt 2%s will be taken
care of without
refunding. The commercial banks are the prin-'
cipal owners of this bond and retirement of them would decrease
deposits. This would be a welcome deflationary move. However,
Moore, Cashier, representing employees of New
on the basis of
has run up since
1946
by another 150% to $40.4
million.
The
company,
on
the
basis of recent and present expan¬
needs
and '
inflationary loan trend should not be
Refunding Prospects
1950 report,
believed
that the
bonds, aside from the pargood many of which have higher coupons, will
be retired at the call date, the consensus seems to be that
they will
be eliminated irrespective of coupon rate at the earliest
opportunity. There is a very important psychological force involved here
or 150%, in 1937; moved
by another 260% to $16.1 mil¬
are
to obtain, except for defense purposes,
easy
discussion about whether the callable
million,
Columbia
so
mean
tially-exempts,
example
of
growth,
expanded
$3.0 million in 1929 to $4.5
British
not
should
There is
proc¬
from
the
the
are
pressing in the; not distant future.
as
is outdoing nature.
lion in
Then there
loss.
a
voluntary credit restrictive measures that are being worked out by
the large institutions and there is a real effort being made, accord¬
ing to reports, to have this work effectively. It seems as though
Celanese Corporation has shared
fully in the expansion of its in¬
dustry. Net income, to take an
up
desire to sell them in order to get funds that could be used for
Then ther6 is also no desire, at the moment at least
no
Man, in other words, through
esses,
non-
restraining influence upon most of the i
of Treasury obligations. These concerns are
of other government obligations, but there is
a
other loans.
resiliency, and low water absorp¬
tion.
are
owners
still large owners
of
usage
rayon
successful conversion of the last two tap issues into the
marketable 2%% has had
institutional
an in¬
1,020%.
Furthermore, since natural fibers,
on
a
poundage basis, are still
being consumed at over double
the rate of the synthetic fiber,
there is yet room for large ex¬
pansion in use of the latter as its
price is gradually lowered and as
new
qualities are added to its
existing uniformity and standard¬
ization, dimensional stability, feel
and
eye
appeal, strength, elas¬
ticity, durability; high resistance
to
soiling,
mold
and
bacteria
growth, and light; high tenacity,
in
'
for income orftear-term
This represented
end.
,►
Thursday, April 12, 1951
.
maturities and vice-versa, depending upon whether the needs
eligibility:* •vr•
Birthday of New York Stock Exch. Firm
The Security
I Like Best
crease
~
i
*
..
or
investor
sort
of
deter¬
as
preference.
exceptions
to
the rule.
Naturally
anything
no
:
one
else,
determine the
factor,
labor
by
itself
can,
attractiveness
of
a
company or an industry for in¬
vestment purposes. But where you
find
labor
taking each year a
larger, and larger bite out of the
apple, and where neither higher
sales
prices
and
volumes,
nor
greater productivity, are making
the
total has risen, then either operat¬
apple
grow
any
bigger,
brother, you'd better stand from
ing economies,
a
under
or
have tended to counteract it; and
that's
ex-dividend
the
manent
or
rate
increases,
steady gross income, with no
you'll be
basis!
owning stock
—
on
a
per¬
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
Richard M. Crooks
Chairman of NYSE
Richard
of
Board
Governors
the
of
Stock Exchange.
Yorx
Atlantic Coast Line
the
New
The
1
Mr.
-
If You Can't Turn to Page 33
been
of
Chairman
for
Guess Who?
has
Crooks
M.
"
Crooks,
man,
-
is
Chair¬
.
-which had
the
has
and
of
nessed
P:
announced last week that he will
retire from the board on May
21,"
expires and when ,
he will have completed his fourtnsuccessive term as Chairman,;
-
when his terms
The
membership
of
look
Crooks, 45 years old,
was
elected to the Board of Governors
He entered the securities
as a
clerk for the
former odd-lot firm
of Jacquelin
business in 1928
&
m
The
Nominating
nett
headed by
is
.
Committee,
mm**
■■
m
from being
expenditures
unre¬
a period of high tax rates,
Also, heavy expenditures now will
pave the way for sharp curtailment of outlays when, and if,
,
there should be
witThis
of
Far
such
true in
an
term
any
real decline in
traffic
and
revenues.
This, in
turn, should work toward greater
stability, at high levels, of longterm earnings,
Joins Walston, Hoffman
con¬
in many ^stances February earn-
■■■
**
hTbL™'MnXu,Si
these^ous draino^theraflstrik^s
Guaranty Trust Co. lauds recent accord between Federal Reserve
and Treasury as significant step toward monetary stability.
Robert Ben¬
five new
Berman, proposed
■
Praises Unpegging of Government Securities
DeCoppet.
which
number
a
the part
dound to the long-term benefit of
stockholders. This is particularly
(Special
May 14.
in 1946.
were
on
to
The
Financial
Chronicle)
tributory factors to the substantial
LOS ANGELES,
Calif.—Jeandeclines of many rail stocks from
their
1950-1951
tops.
For
one net* c- Ld T<>uf has become conthing, the uninterrupted rise that nected with Walston, Hoffman &
started just after Korea had been Goodwin, 550 South Spring Street,
very sharp.
Merely on technical
grounds a reaction could not be
With Davies & Mejia
postponed indefinitely. Secondly,
(Special to The Financial Chronicle) *
change will vote on the selections
of the Nominating Committee on
Mr.
On
term.
longer
shape.
favorable,
balance of 1951.
the
over
There
Ex¬
the
-
sical
continuing fundamental optimism,
as
opposed to trading uncertainties, is based on the highly favorable earnings and dividend out¬
who
Boylan
too
near
and
efforts
.
is that higher prices will be
nessed
for carrier
shares,-
succeed
Robert
the
This represents continuing
in the of the management to keep the
early to property in the best possible phy-
basis, however, the overwhelming
opinion among railroad"; analysts
Crooks will
Richard M. Crooks
over
intermediate
If
Mr.
elected,
points.
and concerted
,
Exchange
since 1941.
was practically 10 points
higher than a year earlier and for
the two months it was up 8.4
-the most
g]pots
It is
February
with full confidence that the
sinking spell has run its full
course, and it is quite possible that
further irregularity will be wit-
been
member
a
the
among
The maintenance ratio in
outlays.
say
&
Kinnon
Mc
been
earlier decline.
change firm of
Thomson
showed
week
^conspicuous .weak
Ex¬
Stock
last
signs of -recovering from its
recent attack of jitters.
The recovery move, at least at its inception, was sparked by the rails
part¬
a
in
ner
market
some
presently
Vice
31
THEN and NOW...
Nominated for
nominated
(1559)
had
been
generally recognized.
The shock of February reports has
qAM
SAN
FRANrTorn
FRANCISCO,
Calif.
—
^■u"S£»ne
st»art
with Davies & Mejia,
]JUSS Building, members of the
5Lew, Zor
??n Francisco
a
^
Btock Exchanges. He was previ—
threat," ments, which should be appre- ously whh Conrad, Bruce & Co.
nors and
renominated four Gov¬
tary stability and toward restoring editorial notes in its conclusion. ciably better, will begin to appear
ernors.'
.'
.--.J
:
the independence of the Federal "Credit restraint is an important
iate next week. Finally, the feelHooker & Fay Add
Nominations as new Governors
Reserve System is implicit in the anti-inflationary influence, but it
ing had begun to spread that the
(Special to' The Financial Chronicle)
were:
•'* ■>. recent accord between the United is not the most
important.
The foreign situation was improving
Edward F. Becker, McDonnell States
Treasury and the Federal crucial
question
in
connection and that brought pressure'on all twv r
& Co.; Henry Upham Harris, Har¬
Reserve, "The Guaranty Survey" with inflation is still the fiscal so-called "war babies." This op- flzf Hanker £
v
Q4n
ris, Upham & Co.; John L. Loeb, states in its April issue.
"The one.
The need for a balanced timism over the trend of foreign
p.
wt
nf thl'
Carl M.
Loeb, Rhoades & Co.; Guaranty Survey" is the monthly Federal budget through reduction affairs has been evaporating.
fLLiJ™Iwk*
Edward Hopkinson, Jr., Drexel &
publication of the Guaranty Trust in nonessential expenditures and
One of the stocks that has been rrdncisc? ■»wck J^xcnange.
Co. (Philadelphia); and Edward Company of New York.
Its edi- taxes falling primarily on con- attracting the attention of. those
Rotan, of Rotan, Mosle & More- torial is titled, "Unpegging the sumer income is in no way dimin- who are confident thfot the rise in
Joins Staats Staff
land (Houston, Texas). *
v
Government Securities Market."
ished.
It is as necessary as ever rail security prices will be 1 re(Special to The Financial Chronicle)
now
members for the Board of Gover-.
.,
A
significant step toward
mone-
against
off
worn
and
March
state—
inflationary
the
.
"
.
.
Jfo
"The controversy that preceded
Governors renominated werer
John A.
&
man
W.
E.
Coleman, Adler, Cole¬
William
Co.;
Hutton
&
Co.;
E. Hutton,
T. Jerrold
Bryce, Clark, Dodge & Co.; Albert
the
to
as
accord was often referred
new
dispute
a
interest
over
rates, but actually the issues went
far deeper,"
declares "The Guar-
to
stop
inflationary lending by
agencies, to bring the
wage-price spiral under control,
and to end the special exemption
of farm and food prices from genFederal
"The Federal eral price regulation."
& Curtis.
Mr. Everts makes his Reserve System is charged by law
with the responsibility of exeroffice in Boston.
UIIt.n M;jJUKvnr,t RoL
its
principal
regulatory
^UMUri1 "iiuuiwruuK ocii.
Total membership of the board cising
functions with a view to accomSPRINGFIELD, Mass.—Coburn
is 33.
v '
P.
Everts, Paine, Webber, Jackson
anty
Survey."
■
Gratuity
were:
.
as
Trustees of the
modating
....
,
,
commerce
Rutherford,
Joseph
at
Walker & Sons and John K. Stark¬
weather, of Starkweather & Co.
Charles
B.
of
Harding,
Smith,
Barney & Co., was nominated as
a new Trustee of the Fund.
of
and
r
•
other
conditions
which
over
has
Commit¬
Nominating
proposed a new Nominat¬
ing Committee:
H.
Thomas
Benton,
&
Benton
Nicholas; Abner Bregman; Charles
L. Bergmann, R. W. Pressprich &
Co.; Bertram F. Fagenson, Unger-
Jansen Hunt,
Co.; Charles C.
Lee, George D. B. Bonbright &
Co.; John J. Phelan, Nash & Co.;
Robert F. Whitmer, Jr., Mitchel,
&
Co.;
Weld
Whitmer, Watts & Co.; Walter W.
Wilson, Morgan Stanley & Co.
John Marshall Opens
B.
in¬
vestment
business from offices at
Main
term
standards,
observed
and
market
could
SAN
FRANCISCO,
Calif.
—
"The
the
Street.
With Merrill Lynch
(Special
to The Financial Chronicle)
f
Oreg.—Lewis R.
now
with Merrill
is
Pierce, Fenner
Building.
& Beane,
situation
Iv,
+
in the securities business,
With Hamilton Mngmt.
undue
(Special
at
Taken
face
value
Atlantic
to
The
Chronicle)
Financial
DENVER, Colo.—Harold H. Mc-
Management Corporation, Boston
wpiw & nn
C' E'
3 Partner
still
contains
Walston, Hoffman Adds
(Special
to
SAN
The
Financial
Chronicle)
FRANCISCO,
Aubin
and
Calif.
Leonard
A.
Voluntary
action
can
go
Walston, Hoffman & Goodwin, 265
Montgomery Street, members of
Charles H. Hatch Now
by
financial
far in supple¬
menting and supporting central¬
ized
regulation, continues "The
which
w n i c n
wnicn
outlines
outlines
outlines
banking industry's program
credit
voluntary credit restraint
restraint.
the
ine
ine
for
voluntarv
"Neither centralized
nor
volun-
tary credit restraint, however, can
be expected to provide more than
valuable
auxiliary weapon
was off
XT
"rom^O TewhYn
,
each
of the first two months of the year.
along nice¬
more
than
offset
a
share reported for the first two
important
these bare figures, however,
months" of
than
is the
1950.
to
The
Financial
Chronicle)
ANGELES, Calif.—Walter
B. Slavik has been added to the
staff
of
Harbison
&
Henderson,
One
in
even
is that
all rail
important factor
February, when
operations were affected by the
disturbances, the company
able to cut its transportation
labor
BEVERLY, HILL S,Calif.-
TneorDorated
J138 l3^co?ie as"
Jackson-Anderson,
214
North
Canon
incorporaxea, zij i\orin L.anon
Mr. Hatch was
formerly
with Hogan, Price & Co. and
Fox,
Castera & Co. In the past he conducted his own investment busi-
in Los Angeles.
_
Angeles Stock Exchange,
Specialists in*
RAILROAD
was
important ratio was reduced by
three points, to 36.1%: The impli¬
Drive.
T
for the decline. .Here
cause
ratio.
with
.
the picture becomes much brighter,
With Jackson-Anderson
ness
(Special
LOS
More
(Special to The Financial Chronicle)
Carles
sociated
Hamilton
With Harbison Henderson
by
higher costs, and common share
earnings dipped to $2.59 in the
with
now
Building.
ly and for the period gross rev¬
enues expanded
more than 24%.
was
is
are now associated with current year compared with $3.35 210 West Seventh Street, members
full
•
....
,
This
uncertainties," according to tbe isrew York and San Francisco
the bank monthly, stock
Exchanges. Mr. Aubin was
'
,
Traffic has been going
view >of
institutions
a
rrnrro.
gage
Cracken
time and trial can reveal previously with Davies & Mejia.
significance of the Fed- Mi\ Hughes was with William D.
eral Reserve's greater freedom of james
Company,
action, as far as effective antiinflationary pressure is con¬
PORTLAND,
Thompson
passed away
"Only
the
WP
Coast Line's earnings comparisons
npe..b"yplng suPP°rt of the Federal Hughes
some
wrv
in„.thL°Peni"LT,0n'!!°l!^1 hxw
without Emile T.
exist
not
Reserve.
Survey,"
Wilcox
Young Co. Formed
(Special to the financial chronicle)
strain.
edi¬
their mildness was a
surprise to many who had appar¬
ently come to feel that an orderly
torial,
ourvev '
survey,
Lynch,
H. A.
at the age of 65. He had been as-
-
WAUCHULA,
Fla. — John
is engaging in an
Butler
overmen?lecurf ^ had bee"
Stated
cerned."
Marshall
J.
William
1C
without
future
distant
William J. Butler
ties have been moderate by long-
E.
&
...
.
the
direct
no
Unrterl States C
United
Government securi-
713
Slocumb & Co.
\
)'•.
sociated witt F, S. Moseley & Co.
Reserve
Federal
members of the Exchange.
1951
mnvpnvpr
...
clatea wim me JNew °mce'
approximate balance between in¬
flationary and deflationary forces
—subject, of course, to fiscal and
control."
leider
ing at only 4'7 times .last yea('s
Brush
earnings and these earnings should
be bettered in the current year.
dividend, moreover, is very well
protected and conceivably could
be increased again in the not too
_
the promotion
stability,
or
an
mean
monetary
Gratuity Fund pays death
benefits to families of deceased
The
White,
these shares are still selling nearly 10 points below the 1951 peak.
At recent levels the stock is sell-
business
rl
,
.
interpreted to
John
tee also
sumed within a reasonable time,
SAN FRANCISCO, Calif.—John
if the turn has not already come, a. Thomson has joined the staff of
is Atlantic Coast Line common. William R. Staats Co. Ill Sutter
Even with last week's recovery street.
He
was
formerly with
& Middlebrook, Inc., have opened On the basis of the recently in- Henry A. Young has formed
and with regard to the general a new branch office at 145 State creased dividend rate of $5 per Henry A. Young & Co. with ofFund of the Exchange
credit situation.
This is generally street
J
Harlan Pease is asso- a?n.u,m the return is 6.85%.
This fices in the Russ Building, to en•JUCCU O.
Xlctlldll
redhC
IS>
ct&DUJ,',,
Renominated
The
Ian
For the two months this all-
of this
cation
achievement
SECURITIES
Selected Situations at all Times
is obif
vious when it is realized that each
.
*
•
H
f-
ih
haeed
nn
point br°p in tne ratio, Dasea on
the
S1 62
ig50
a
gross
sh
°re
'
ls equivalent to
the gtock bef0re
'
r
'
Where
the
was
the
*
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o
New York 4, N.
Y.
Telephone BOwling Green 9-6400
company's
in
into
25 Broad Street
* ederai income taxes.
jumped
JBfTj&fazini
costs
maintenance
Members Nat'l Assn. Securities Dealers, Inc.
r
S2
The Commercial and Financial Chronicle
(1560)
.
.
Thursday, April 12, 1951
.
v?
Continued
from
the Federal Reserve is
6
page
interested
primarily in anti-inflationary ef¬
forts
and
the
Treasury is not.
Inflation and
The
Banking
short-term
trols.
We
have
now
controls in the fields of loans on
The
matter.
Federal
the
by
Reserve.
These controls may and should be
tightened
loosened up as their
or
effectiveness may
require.
The more conventional controls
psy¬
as
securities
govern¬
different
a
For
the
long-term
represent savings of
and
investments by
most
securities
individuals
institutions
such
rates
ings banks, pension trusts, etc.
the
of
Federal
banks
member
and
of the Open Market
the
Reserve
requirements
reserve
the
of
policies
Committee in
purchase and sale of Federal
securities.
Raising rediscount
rates is largely ineffective, except
psychologically, at a time when
there
is
minimum of bank
a
discounting.
tional
Increased
re-
conven¬
reduce the
the
insurance companies, sav¬
as
nies, the rate of return is
highly
important factor because most life
insurance companies have a lia¬
bility that requires an average net
income
the exent
thereby reducing their capacity to
make loans, but only if the banks
must
offset
loans
and
replenish those
selling
by
serves
to,
reserves
unable to
are
There
little
in
value
re¬
Federal
their
securities.
to
seems
increasing
be
reserve
requirements for the purpose of
reducing bank lending if the door
is open for banks to acquire the
from the liqui¬
necessary reserves
dation
securities.
Federal
of
has
proposal
A
made to in¬
requirements
been
reserve
crease
substantially with*the banks hav¬
ing
option
an
either
crease
ting
aside
securities.
that
^
to
in
the
cover
cash
in¬
by
or
set¬
.certain
government
The argument is made
by locking up an additional
amount in reserves either in cash
Federal
or
securities
there will be less
banks
to
to
of
their
Federal
more
reserves
additional
support
loan's
deposits.
The third device for
of
2.50%
than
other securities
or
that rate
return,
of
the
yielding
less,
or
they
return
lower
by
yielding
investments
a
higher rate, in order to meet their
liabilities.
life
Most
last
companies
insurance
had
year
net
a
investment return of about 3.02%.
There
has
been
liquidation
2Vz%
in
bonds in order to
invest
at
the
government
funds to
secure
higher
a
The
rate.
Department has recog¬
Treasury
nized
considerable
a
this situation and is giving
of'bonds maturing in
owners
67/72
option
an
bonds
into
to
rate,
but
with
such
convert
29-year,
a
non-
marketable issue carrying a
limited
2%%
sion
present market value of
98.
tors
longer maturity
of
Considering the fac¬
marketability,
bonds
these
2%%
the
less
rate
on
approximately
is
interest
the
and
on
of the
curve
2V2S
of
loans
is
through the
operations of
Open Market Committee of
67/72.
The
is to give
long-term investor a better
of return for a longer matur¬
the
rate
converted
Reserve
stitutions
securities.
will
buy
It is claimed
result
would
banks
that
be
to
find
Federal
that the
it
penalize
the
necessary to
sell Federal securities with a loss
the securities sold.
on
this would prove to be
in some cases.
No
a
doubt,
deterrent
However, for the
banking system as a whole, there
is
present
no
sell
Federal
for
banks
securities to
for
reserves
need
the
that commercial banks
to
acquire
obvious
hold
sev¬
falling due
for payment
Or
during the
callable
year
1951.
No matter what the price
may be
on Federal securities, the
average
bank
would
have
no
to sell such securities
but
compulsion
during 1951,
penalty in
some
21/2s of
that
changes in the interest
23/4S
new
This shows that the
In
are
turn
to
maturity
than
they
re¬
We must
that the government debt of $256
billion must be owned
by some¬
All considerations of money
one.
markets,
debt management and
policies start from the
financial
basic
fact
an
that
the
government
outstanding debt of $256
billion which
it owes
somebody must
that
any
be
which
and
To the
own.
ex¬
sells, there
The objective
owner
buyer.
a
of debt management should be to
find
permanent
a
much
the
of
home
debt
for
as
possible.
as
inflationary standpoint,
an
is
desirable
more
securities
be
lodged
that
these
with
non-
for
of
borrowers
the
creation
.
the
thus
and
of
the
increase
is
sufficiently great
substantial penalty.
What rate this would have to be
for
a
effective
knOws.
results,
no
one
Minor increases will not
prhyent
speculative
borrowing,
but/will merely increase the cost
of jponey
munity
to the business com¬
for loans required for
needed business operations as well
as
for
defense purposes.
The
merit of minor increases in the
way
these
securities
to
find
their
it
quarters
some
has
been
that the Treasury
has not been inter¬
curtailing inflation. This
The
Secretary of
the Treasury has repeatedly stated
Department
ested in
is
true.
not
his
about
concern
inflationary
developments and his support for
such
action
by government and
private enterprise as will stabilize
our
economy.
Promptly after the Korean de¬
velopment, Secretary Snyder
appeared
before the Ways and
Means Committee of Congress on
1950,
2,
Aug.
and
prompt passage of
bill.
urged
the
interim tax
an
The purpose of the tax
bill
stated by
the Secretary was not
only to improve the fiscal position
as
of the
government, but to "aid in
restraining
inflationary
generated
forces
increased
by
expenditures."
He
defense
the
warned
The Interest Rate
Controversy
Much
made
has
been
recent
so-called
tween
the
of
controversy
Federal
Reserve
the
be¬
and
Treasury with
respect to interest
rate
The
policy.
emphasis on
this so-called
disagreement has
been out of proportion to its
sig¬
nificance.
The arguments have
resulted
in
creating
a
general
impression that a small rise in
interest rates would
stop infla¬
tion.
The inference has been that
the
several
are
debt
that
there
ing
sustained
the
action
tionary
an
environment
discourage, rather than
the growth of infla¬
pressures."
Congress
promptly responded to this appeal
by increasing corporate income
income
personal
and
part of
taxes.
As
general anti-inflationary
this was the first and
most important step.
a
campaign,
In
address
an
York
Board
York
City
before
New
Trade
of
the
in
New
Jan. 18, 1951, Secre¬
Snyder said: "One of the
most
on
serious
threats
the
to
strength of our defense economy
is undoubtedly inflation.
And it
threat that could develop into
a
disaster.
in
To
...
check
keep inflation
is the first need
defense undertaking."
in
our
After dis¬
well
as
the
as
of
use
specific
controls
forces
control.
under
That
is
a
great
that
declines.
ment
to
In
concern.
is
It
dollar.
that
duty of
a
power
govern¬
bonds
objective
government
issues
can
be
securities
extent
depreciation
market values may
to
redeem
debt,
savings
bond
defeat
of
confidence in government securi¬
ties becomes a matter of great
During and since World
War II, our huge national debt has
been
absorbed
in
our
economy
and
managed with such skill that
have overlooked the fact that
it is
giant in size and if aroused
a
The size of
tions
the
Federal Reserve
System
in depreciating the value of Federal securities in the market has
disturbed
the
investor
future
ernment
one
to
success
of Treasury opera¬
objectives during
past
the
those
three
years
and stated
that it holds particular signifi¬
cance
at the present time when
it is
vitally important to the wellbeing of the economy that the
inflationary potential of commer¬
cial
bank
assets
be
kept
at
a
minimum.
More
interest
managed
rate
have.
drop
government
but
to
meet
its
obliga¬
doubt,
faith in the management of
no
that debt.
In an address before
the American Finance Conference
in
Chicago
Nov.
17, 1950, the
Secretary of the Treasury said:
"With the public debt the size that
on
■/
gov-^
shocks
when
severe
was
medium-
on
of
This
in-
allowed
and
long-/:
term securities 17/32 to 29/32 of as
point.
Owners
sustained
of
million in
result
one
week
Federal
than
more
actions
of
of
market
a
de¬
$750.1
recently
of
the
as
a
Federal
System.
The
The powers of the Treasury De¬
partment and the Federal Reserve,
when exercised cooperatively, are
too
adequate to manage the debt with
complete
control
of
market
that
prices, rates of interest and
achieved
turities.
within
Prices
times
there
be
may
limits
narrow
ma¬
changed
that
so
at
great for experimentation
depressing the market in the hope
desirable
one
will
result
be
when
weighed against
the possibility of far greater dam-f'
age that might develop. Such ac- 1
the
Even
flexible
that
interest
for
Federal
advocates
rates
the
controls
all
The
danger
has
been
and
reduction
substantial
a
and
System to
of
interest"
as
an
and
Gov. Marriner
to
cause
Board, in a
Iowa Bankers
Association on Oct. 27, 1948, at a
time when the country faced a
before the
inflationary situation than at
present, discussing the effect of a
withdrawal
Reserve
support
of Federal
the longgovernment rate, said: "In¬
for
terest rates,
Prices
of
would
need to .drop
government
securities,
to the point
where buying would about equal
selling,
without
significant
port by the System.
"No
one
sup¬
1.
knows how much the
is
government
ernment
creased
securities
by the
to
se-':
investors
has
recent
been
in¬
of
action
the Federal Reserve in
depressing
security markets.
It
be helpful in the sale of
government
would
bonds
policy
if
the
greater
Federal
Reserve
directed
were
stability
in
the
toward
govern¬
ment bond market.
Inflation Can Be Stopped
Returning to
my theme that in¬
No. 1 financial and
flation is
our
economic
problem and that
every
effort should be devoted to cool- 1
ing it off, I am satisfied that
inflation can be stopped if neces¬
sary actions are taken across the
board.
Most of these actions are;
not
popular
against the
affected.
must
be
taken
resistance
of
those
and
The steps required are:
(1) To discontinue the creation
of
new
through bank loans
from
the
transfer
of
money
resulting
Federal
Reserve
securities to
banks.
If
the
the
fail to restrain their
result of
Federal
bankers
lending
as
a
voluntary action to the
extent necessary
to;0reduce the
creation of new
money* such fail¬
ure
will
inevitably
quirements
for
lead
more
measures—possibly
balance would
mandatory control.
a
be
can
time
non-bank
prices of government bonds would
drop before such
that
so
Eccles of the
possible
of
as to divert
inflationary spend¬
ing into savings.
The difficulty
of attracting such funds into
gov¬
by
S.
important antw
present
sales
^
that';
agreement
efforts
the
at
increase
Reserve
speech
less
inflationary
made
lending institutions.
Federal
full
most
and, in particular, to individuals,
anti-infla¬
may
measure,
damage
is
the
of
is
prices
for
government
securities by the Federal Reserve,
even for the purpose of increasing
rates
There
one
in
market
interest
government securities.
curities
markets.
rates and the money
that
and
Treasury
Reserve
of
recognize
be undesirable
it would
the
what
a
ket.
'
in
while
is/ tion,
designed
to
keep
breathing market; but owners from selling their securi¬
so long as the national debt is of
ties, could result in a reverse psy¬
its present relative size, there can¬ chological reaction on the part of
not be any real free money mar¬ many of the 80 million holders of
termed
be
may
?
in
size, the ownership and the
relative proportions of the Federal
debt to all outstanding debt are
we
under such a policy,
of our national economy than the would need to go high enough to
consideration of inflation alone is discourage long-term borrowers,
the overall question of the integ¬ to restrain
selling of government
rity of the Federal debt. By in¬ securities, to bring idle funds into
tegrity, I mean not merely the the market for government se¬
ability and willingness of the curities, and to increase savings.
tions, of which there is
value
day the market
Reserve
term
important to the welfare
market
particularly
was
confidence
securities.
and
.
for
opinion that the action
of
preciation
a
this
Decries Federal Reserve Policy
debt, when coupled with the
size of the Federal budget, re¬
quires a managed money market
the
structure, both of which
thus
and
owners
the purposes of
anti-inflationary program."
be allowed to
disturbance
securities
of
ownership of the
any
these
policy to assist the Treasmeeting its obligation to:;
in
It is my
With the wide
concern.
Either of
require that the Re¬
System give up its tight
money
run.
we
low enough.
go
serve
could
public
marketable
could
and
Such depreciation is confidencedisturbing because no one can say
what
into
and
Treasury in the market for-new
ex¬
disturbing
eral
securities in the hands of investor confidence and making it
non-bank investors
and more difficult for the Treasury to
reducing the proportion of Fed¬ refund maturing securities than
eral securities held by commercial the doubtful benefit of discourag¬
banks
and
Federal
Reserve ing loans on the part of borrowers
to the
>
I
funds
such
of
greater
attention
fa-
mar-
more
investment
these developments would put the
ury
to
the
possible step
the buying power of
every
reached without depreciating the
value
G
with
bonds if the prices of marketable
held by the public below 100 cents
on the dollar, it should be done.
tionary
He then called
who
However, to the
preserve
the
tent
inflationary
purchasing
take
to
largest possible proportion of Fed¬
banks."
<
in;$
cash
ket, might see an opportunity to
profit by shifting out of E, F and
and
the maturity of the
obligation is certainly a matter of
debt management program which
is
directed toward
placing the
.
to
ment
remove
budget deficits,
taken,
miliar
dangerous
of
caus¬
dollar between the time of invest¬
cussing the necessity for adequate
for the government and
avoidance
effect of
Other savings
securities
maintaining
-
over
It could
are
holders,
full
toward
savings
are
bond
by actions that disturb confidence,
action
of
there
their present bonds.
it could create havoc.
take
.
holders, not understand*
many
the
to
which
of
Congress and the country: "Now is
time
balance
on
have the opposite
ing
the American
not
we would not expect
action would increase
such
sales
$50 billion outstanding.
interest
The
power of
policy,
a
"Certainly
the
be
must
than
debt.
the
on
public
factors
other
purchasing
periods,
made to appear
into Federal Reserve banks.
loans.
This, of course, is true, provided
to result in
In
sense.
.
has
terest
demand
per
not make
for curbing prices
and
rises, he stated: "There is a
weapon of great importance avail¬
keep in mind the fact able to us for
keeping inflationary
bank owners who will hold them
to maturity and least desirable
reduce
by increasing
its
dollar of business does
wage
On the other hand, it is
argued
that a rise in the short-term in¬
dampen
business
profit
are
for their needs.
it
will
less
revenues
in the marketability of the secur¬
ity, provided the rate is adequate
From
rates
an
managing
the
cases,
more
ties by banks for the purpose of
reserves.
the
such institutions
interested in the rate of
ties will have little, if any, effect
in 1951 on the sale of such securi¬
acquiring
into
67/72
security fits their needs.
must
rate of Federal short-term securi¬
In¬
new
tent
It is my opin¬
notes.
most
securities mature.
can
of sale of the
case
marketable
rather freely.
merely wait and collect
the principal and interest as the
ion
The claim that
institution will be persuaded to do
needing the higher rate
is
return
are
converting their
of
reason
eral billions of dollars of Federal
securities
rate
interest rates.
ity, but at a sacrifice of market¬
tary
the ability and with the likelihood of
Federal Reserve System to reduce
the prices at which the Federal
should be recognized that in
such
entire economy.
bonds,
It
of
sequences
<
only upon some of our financial !
institutions and upon our financial
structure generally, but upon the ,
omy."
it
warding bank income with higher
No one knows, more*
just what would be the con¬
over,
that
considered
purpose
the
,
banks
If
be reached.
degree to the stability and
well-being of the nation's econ¬
results cannot be obtained by re¬
encourage,
a
debt
a
management
to penalize banks in
discourage them from
lending, it would appear that such
which will
having
increase.
to
to
market¬
around
Bank
desired
afforded through conver¬
into a five-year 1 Vz % note
ability
relatively small.
■■
:/
influencing;
bank
>
and
V;
'
,
the T volume
banks,
opportunity for
in
cash
securities to create
V'
higher
after expenses.
To
that they hold govern¬
annum,
ment
reserves
excess
securities and other
from
investments
per
a
inflationary lending
on
continue
order
of life insurance compa¬
case
supply
banks,
of
In
is
However, the
pressures.
rates
loans
few
of
held by com¬
are
banks.
these
part,
on
is
of bank lending are the rediscount
banks,
tionary
est
Comparatively
mercial
means
mum
securities
such
This
effects of the recent rise in inter¬
a
far
so
long-term rate
ment
estate mortgage loans—all admin¬
istered
a
in
have been
stocks, consumer lending and real
infla¬
securities.
practical monetary and economic
value
Long-Term Interest Rates
selective
curtail
to
and
protect the investment of the
millions of our citizens in Federal
reduction in bor¬
rowing and bank lending.
stringent measures—pos¬
sibly additional governmental con¬
more
chological
be
active
to
program
which
is
planned and implemented in such
a way as
to contribute in maxi¬
for
be
may
their
vigorous efforts
contributes to
as
should
Reserve
for
obligation of the highest order
an
it
is largely
rate
needed in the
present fight against inflation. In
that event, the next step would be
much
Federal
commended
is now, the government has
ours
some
to
re¬
stringent
form
of
Such control
JVolume 173
Number 5002
The Commercial and Financial Chronicle
...
might be exercised by substan¬
tially increasing reserve require¬
they help contain it if they
are
inflation and is willing to accept
adequate
ad¬
ments
ministered.
whatever sacrifice is necessary to
hold the line that Congress will
part
of
banks
all
or
of
and
the
permitting
increased
(7)
re¬
and
When
vinced
in
there will be
certain
types
securities.
of
do
I
government
not
with
agree
the
desirability of proposals to
require 100% reserves against all
increases
Federal
in
deposits
tax
be
that
nor
imposed
on
a
new
loans.
j(2)
Non-bank investors in gov¬
ernment securities should be en¬
couraged not to liquidate
holdings,
but
investments
curities.
for
to
in
government
The
this
present
increase their
first
objective
se¬
requirement
is
that
being
public
the
quirements to be carried by the
banks in the form of investments
properly
are
effective
taken
to
a
is
back up
con¬
action
is
cannot
inflation,
change in public
stop
only
lack
or
of
public
confidence
in
of
to
government
to
one
the
take
secure
system
actions
effort
of
higher
a
lead
a
sary
disastrous
of
results
porting
continued
of
and
$7.8432.
opportunity
to
are
neces¬
to preserve the buying power
the
American
will
Bullock
higher rate if held to maturity,
penalties if sold prior to
maturity, will fill their needs.
If
this
fails
program
liquidation of
by
non-bank
to
curtail
Federal
the
securities
institutional
in¬
vestors, it has been suggested that
further
a
step might be taken by
government
of
way
control
and
Geyer
&
Co., 63 Wall Street,
City, specialists in in¬
stocks,
have
recently
their
surance
showing
gains.
published
their
Analyzer"
"Insurance
covering
Stock
r
or
panies for the year 1950.
This
most
tabulation
detailed
is
and
of
one
the
the
comprehensive
statistical reports prepared on in¬
companies.
breakdown
sible
necessary
divert
to
income
current
from the spending stream and into
savings.
U. S. Government Sav¬
ings Bonds
best
investment
dollar
in
still the safest and
are
of
the
form
earth.
on
capital
of
saved,
S.
U.
a
A
whether
Savings
Bond, a bank savings account, a
savings and loan account, a mu¬
nicipal bond or a life insurance
dollar, will be worth far
the
ahead
years
spent
for
now
(4)
duced
and
to
with
minimum.
a
to
Defense
be
screened
that full value
assure
received
Non
for
defense
-
some
the money
spent.
expenditures
for
should
purposes
discon¬
be
tinued and others cut to the bone.
This will happen only if the pub¬
lic demand for economy becomes
than
greater
the
appropriations
demands
from
for
pressure
groups.
(5)
Federal
taxes
should
be
increased promptly, not only to di¬
vert more money
from the spend¬
ing stream to the government, but
provide fiscal. strength
for
to
Treasury operations and to create
a
budgetary surplus in fiscal 1952.
The
Federal
have
some
fiscal
Government
the
among
surplus
these
United
issues
nificant figures presented are
at
during
estate
assets such
of
the
the
of
their
partic¬
a
includes
dividends
the
annual
of
.years
payments.
consecutive
In this con¬
the tabulation shows
that
the
companies in the list
have each paid dividends for at
least 50 years.
North River In¬
ments
Co.
maintained
has
for 112
pay¬
The Trust Agreement includes a
interesting
compari¬
in the "Analyzer" is the one
son
estimated
other
hand
fined
mu¬
common
stocks.
largest
holders
of
the
not
plan,
trust
certificates
Custodian Funds.
of
is
are
63 Wall
AT
April
3,
in
The Trustee is
a general power to
the investment of the
trust, but is required to follow the
•
established
program
permit investment
minor portion of the fund's
a
assets
companies
highest
which
.
!
"
"
'
;
•
' V.
percentage
assets
invested
were
American
Continental
Aetna (Fire)
adequate to produce the
Boston Insurance Co,__^
revenue
Insurance Co..™
Insurance
in
of
the
their
common
Alliance
Insurance
Co.
total
stocks
vestment firms
tribution
42.4%,
of
active
Continental Insurance Co
amendment
The
"When
that
it
the
is
and
In¬
of
the
discretionary
in effect.
be
Did You GUESS?
Here's the
of the two
on
As
is
a
can
be
seen,
valuable
information
acquisition
writing
$1.68
the "Analyzer"
summary
on
all
the
of useful
of
modest
will be greatly
Proportionately, living
means
expanded.
principal
incurred
expenses
on
two
John J.
Incurred
on
Unearned
Operating
Under¬
writing
Net
Federal Inc. Taxes
Saved by
Profit
Investment
Before
Premiums
Profit
Income
$2.60
$4.28
$4.04
Taxes
3.80
10.18
6.41
0.58
1.84
2.42
2.06
2.15
3.85
(B)
Norman C. Schmidt,
A.
Goodelle, L o
COMPARISON
Operating
1.60
11.12
13.04
1.94
3.67
0.31
0.87
4.82
6.11
120 BROADWAY, NEW YORK 5,
7.51
Telephone: BArclay 7-3500
7.20
0.06
1.84
5.30
2.36
0.87
6.86
0.14
5.63
1.65
1.99
5.23
7.22
0.57
5.96
1.18
3.92
2.79
6.71
2.17
0.43
4.11
—0.28
0.59
0.31
2,62
3.93
0.46
0.13
2.34
4.86
1.83
6.69
3.16
9.85
2.41
0.77
6.67
6.76
0.47
1.36
1.83
2.76
4.59
0.67
0.54
3.38
4.07
Hanover Fire Ins. Co
1.38
1.93
3.31
2.68
5.99
0.83
0.81
4.35
5.15
Hartford
6.29
3.15
9.44
6.21
15.65
4.21
1.32
10.12
15.65
0.96
0.91
1.87
2.79
4.66
1.11
0.28
3.27
5.57
Insurance Co. of North Am.—.
3.32
2.76
6.08
8.38
14.46
3.32
1.16
9.98
of
National
Fire
1.36
3.19
4.55
4.82
9.37
2.57
1.17
5.63
12.21
National
Union
1.24
1.73
2.97
3.17
6.14
1.20
6.07
4.27
Curb Exchange
13.80
far
Stock Exchange
York
Members
10.38
2.74
Members New York
7.89
0.69
Laird, Bissell & Meeds
7.83
1.80
5.69
to
adjusted where needed
effective results.
secure
and
controls should
wage
ministered
additional
unit
services
the
for
earner
to
additional
consumed
should
be
have
the
his
ad¬
price
is
It
an
cost
income
by
that
inflation.
no
of
unit
a
a
income
of
living
than it is to receive
will
these
basic
of
causes
do
of
not
Home
New
Ins.
Co
Ins.__
Fire
Insurance
Ins.
Co.
Fire
Ins._
get
Teletype—NY
N. Y.
1-1248-49
(L. A. Gibbs, Manager Trading Dept.)
Specialists in Bank Stocks
5.64
,
4.64
Insurance
2.55
3.21
5.76
3.39
9.15
2.02
1.34
5.79
2.42
3.51
5.38
8.89
1.32
1.01
6.56
10.15
—6.74
Washington
.
NATIONAL BANK
of INDIA. LIMITED
Bankers to the Government in
Kenya Colony and Uganda
Head
4.23
—2.51
2.53
2.09
7.53
5.75
13.28
4.36
0.01
0.02
2.27
0.02
5.44
0.88
10.13
11.14
0.83
0.55
2.98
8.19
fO.Ol
4.18
Office:
26,
London,
Colony,
Kericho,
and
*
Subscribed
Bishopsgate,
E. C.
Burma, Ceylon, Kenya
Branches in India,
5.64
1.09
Hampshire Fire Ins. Co.
Phoenix
St. Paul F. & M. Ins
inflation,
Great American
Providence
to tightening;
loosening them.
controls
Insurance
be
Policies
;
Bell
New
J
Glens Falls
an
directed
instead
While
to
be
permit
performed.
stabilized
at
in
or
rise
to
valuable
more
belts
as
so
goods
of
Price
Fireman's Ins. (Newark)
request
0.29
7.57
controls
on
0.19
10.09
credit
sent
3.87
•
3.57
Selective
of
15)4!)
4.90
(6)
be
$9.17
6.52
should be
w
March 31,1951
Will
1!>50
2.67
Co.__
c/o
e
City
$5.33
2.08
Ins.
ANALYSIS
&
18 N. Y.
After Taxes
0.27
Fund
.1
Syracuse 2, N. Y.
Bldg.,
$0.94
$2:05
6.00
4.58
*
'
Clarence
Theatre
Acq. Costs
Incurred
16.59
0.73
2.62
'
.
James
Delaney,
Delaney & Company, Rand Tower,
Minneapolis 2, Minn.
John
Earnings
Actually Tax Deduct.
$8.32
0.13
Norman C. Schmidt
Delaney
Bank Stocks
0.34
Fireman's
angels appearing
in the final columns.
years
4.44
rather than oppose them.
version
31.
page
(A)
6.38
2.49
of Phila
1951
modern
2.40
x^ssoc.
proper
shareholders, the
leeway will again
mutual fund has solved the
Fire
present inflationary conditions
and
to
prob¬
Company of North Amer¬ lem of investment management of
a small trust, their use
ica 38.8%.
by people
46.3%
Federal Insurance
der
additions
these
generally realized
advent
Fidelity-Phenix Fire Ins
un¬
that
discretionary
manner
may not exceed
5% of
total assets at market, must
be
authorized by a majority of the
directors, and if held for three
months the
companies must be
added to the fund's approved list.
Securities'
should
support tax increases
provides
this
in
purchases
the dis-
in
Group
to balance the pros¬
pective 1952 Federal budget.
We
necessary
companies
approved
shares.
45.3%,
0.09
_f
its
THE USE
—0.15
Agricultural Insurance Co.__
American
of
on
surance
Profit
surplus will not be large enough
to have a strong anti-inflationary
impact.
Present taxes are not
not
list.
-1950 Breakdown-
'
securities
are
Money," trade publication for in¬
showed
Acqstn. Exp. Adjust,
1.
in
which
by the investor.
of
tional Union Fire with 15%.
Under¬
'
'
amend
charter to
OF "living trusts" as a
stocks were American
method of transmitting assets to
22.1%, American Insur¬
one's heirs will no longer be con¬
ance
15.7%, Fire Association of
fined to the wealthy, states the
Philadelphia 14.9%,' Fireman's In¬
current issue of "Management of
surance (Newark) 16.8% and Na¬
the
•
ANNUAL
Meeting on.
stockholders of Selected
American Shares voted to
will
ending June 30, 1951,
and possibly some budgetary sur¬
plus, but
the amount of such
Street, New York 5.
THE
the
granted
investment
the
and
ligation from Distributors Group,
con¬
unearned premiums, adjusted un¬
dividends and stock insurance companies.
In the following tabulation, fig¬ derwriting profit, net investment
split-ups and for equity in the
prepaid expenses of the various ures on the earnings of last year income and the operating profit.
companies and controlled subsid¬ for 26 of the major fire com¬ Federal income tax liability is
iaries.
By means of this com- panies have been selected from shown in two parts, that actually
parsion, one can easily see the the computation by Geyer & Co. incurred and the taxes saved by
the tax deductibility of acquisi¬
growth in asset values of the var¬ The breakdown of
earnings shows
tion
costs.
ious companies over the past five
Operating
earnings
the statutory underwriting profit,
after taxes are shown for the past
and 10 years.
In the 10-year pe¬
of the
Money"
Keystone
manage
stocks,
in
to
the
Under
investment
had
or
trust.
study
of
"Management of
available without ob¬
notification
Banking and
Philadelphia) as to the
William B. Putney,
Group
Securi¬
this
of
After
Trusts,
the
of
study of
to
issue
vania Company for
adjusted for stock
riod there have been many
counsel
a
Alliance
values
asset
share at the end of 1950, 1945
and 1940. The figures have been
per
the subject by
in which the investor specifically
directs the Trustee (The Pennsyl¬
real
as
the
15.2%
Among
preferred
Fidelity-Phenix
years.
Another
showing
the
on
Governments, no state
nicipals, 0.3% preferred
payment,
the
percentage of investment income
paid out, approximate dividend
of
designated
Letter of Investment Instructions
13.7%.
and
insurance written by
25
benefit
for
program
beneficiaries."
of its assets invested in U.
S.
ular company are. -
nection
their
the
stocks
common
of
and
into
and
63.5%
dividend
lifetimes
their
investment policy to be followed
by it throughout the duration of
mobile,
Reference is made to
plan and to provide for the
continuation
year-end.
Governments to¬
States
the principal under¬
writing lines is helpful in deter¬
mining what the important types
on
of
only 5.6%, preferred stocks
Miscellaneous
among
Data
method
Keystone invest¬
established by them
a
ment program
estate, receivables and cash make
up the balance.
American Auto¬
indicated
proposes
settlement
the
estate.
of
the
premiums written during the
years
1950,
1945 and
1940.
A
breakdown of the premium
in¬
come
fund
4.2%
sig¬
the
year
cash
municipal bonds with approx¬
imately 56% of its assets invested
in
Plan"
Trust
flexible
and
incorporating
of
and
net
surance
is
larger
companies.
For ex¬
Paul Fire & Marine
St.
Exchange
"The
taled
example,
dates
re¬
notoriously
are
should
and
care
goods.
expenditures,
State, should be
expenditures
wasteful
dollar
a
consumer
Government
Federal
in
more
than
For
several
has concentrated its funds in state
In addition to
of the
shown.
are
considerably
various
during
ly
venient
doubled
with
distribution
ample,
desir¬
ing
have
values
the heirs to have income
payments continue uninterrupted¬
the
in the investment policies of
enes
and
the
to
costs
probate
current
Funds has
to
that sav¬
alone are
considerable and that it is a great
in
ties, Inc.
Copies
with respect to
which
under
assets, as
shown b,y a comparison
in the
tabulation, points up the differ-
and statements of 75 casualty com¬
in¬
at present. ■:
(3) We must do everything pos¬
lieu
advantageous
more
article points out
The
to provide investors "with a con¬
which
asset
The
operations
earnings re¬
sults for the past year, information
ment of reserves in the form of
on other important phases of
oper¬
government securities.
I do not
ations, conditions and underwrit¬
believe that this action
is
in
are
than to the wealthy."
ings
III,
Living
Keystone
companies
New York
possible require¬
a
Securities
Commission
JOHNSON
This Week—Insurance Stocks
a
vestments with
cash
of
registration statement with
a
the
By H. E.
surance
regulation, of their loans and
able
filed
2V2%, Federal securi¬
and with
plus
shares
Custodian
Keystone
Bank and Insurance Stocks
ties with longer maturities and at
a
stockholders
46,257
"Living Trust Plan"
investors requiring a higher rate of
return than
Fund,
1,056
dollar.
of long-term
case
and
These
issued
be
assets
of fractional shares.
The public must
the
$1,050,000
trusts
them
boon
at
Keystone Fund Files
necessary to prevent the further
deterioration in the value of the
In
at
was
Aeronautical
stockholders.
stability in
also be convinced that the govern¬
ment will take whatever steps are
dollar.
share
per
On this date, Aeronauti¬
about
of
at
was
cal Securities had total net
the market for long-term govern¬
ment securities.
deter¬
for
values
March 22, 1951, when
on
as
is
date
asset
Fund
through the control
programs that
net
$23.3938
actions and by sup¬
own
Effective
of
form
it
me,
an
way
of their
only when the public realizes the
To
1951.
mining
the close
Bullock
enterprise
democratic
ha\*i
the
better wage or a bigger profit as
an offset to further inflation.
It is
our
that. In this effort, the
as
bankers
every¬
price,
and
simple
save
free
our
government.
inflation and the
necessary to stop
almost universal
lose
we
we
24
page
Mutual Funds
We
from inflation and bust,
economy
the
determination
and
Either
one:
from
an easy¬
going, luxury-spending approach.
We now have one
choice, and
psychology from spending to sav¬
ing.
The chief difficulty is the
purpose
to stop it.
a program
stop inflation by
Continued
33
(1561)
>
Kenya,
and Aden
Zanzibar
Capital
£4,000,000
"
Security Ins. Co. of N. H
Springfield F. & M. Ins
0.55
1.30
1.85
2.51
2.49
1.58
4.07
3.30
7.37
1.56
0.63
5.18
6.12
U. S. Fire Ins. Co
3.15
1.85"
5.00
4.11
9.11
2.03
0.78
6.30
Westchester Fire Ins. Co
107
0.59
1.66
1.46
3.12
0.67
0.25
2.20
2.74
Paid-up
Reserve
Capital
Fund
£2,000,000
___£2,500,000
8.09
fCredit.
.
-
,
The
Bank conducts every description of
bcnking and exchange business ,
;, ■
Trusteeships and Executorships
also undertaken
■
The Commercial and Financial
(1562) 1
34
Chronicle
great deal upon the degree in which the people
can be brought to - enthusiastic support
in that
of the.
Communist regime there. Much the same as to be said
of other regions of Asia where hundreds of millions of
human beings dwell.
The importance of the European
a
Continued from first page
country
We See It
As
forward relentlessly toward their goal of a
Communist world with Moscow as its dominating center.
The second is that while they may, if need be, proceed by
force of arms to reach their goal, they would prefer to
operate through intrigue and the exploitation of dissatis¬
faction and unrest within other nations, the main objective
mined to press
considerations.
such countries
We
•
■
;
...
,;
,
transferred
the other,
other words, he buys gold in New
York at the fixed price of $35.00
$42.00, if
alleged support
of the dollar goes at the expense
of our gold reserve and to the
profit of the foreign central bank,
and sells
not
concern
no
Neither
a
to the rest of the world.
can we
look with
matter
«
equanimity
upon
ance
the wide,
we
well
as
Advantages
cause
than if
worse
some
long time to
other
means
but
as
these
are
no
stances in which
tions
dition of
blance
holding
worse
c2nte5nplate then*. The technique
of
thing
defeat
is
of combating this kind
certainly quite different from
that
required to
an
enemy on the field of battle. Indeed, one some¬
times wonders if successful
resistance is likely to be
achieved by
people who themselves are convinced of So
much of the doctrines
they fight. r
I
The Battle Against Russian Imperialism
1
"^,uKour *aiure,
«
?e
ri
t_
1(~eas
*n the psychological war with the
e
y (which," incidentally, are not new
old, and often discarded in the past) affords
advantage to the forces of Russian -imperial-
at all but very
a substantial
,
*?m* ^h^ Value of China to Russia, and the degree of
danger of China to the remainder of the
world, depends
export,
purchases
with
cheaply
raw
gold
Decisive
is
'
'
iv
third
a
1
-
considert
Throughout the world, th'c^
talk about dollar devaluation
per-fif
reached at the end
"1
It
sists.
after
right
began
it means an in- pound devaluation, but dried
though
foreigners, whether individuals
or governments, could hold dollar
balances indefinitely as they did
before. As a matter of fact, foreign
funds in the U. S. increased last
year
by almost $1,900 million
(this in spite of a sudden $175
million outflow in December),
Without that, our loss of gold
would have been doubled! Incidentally, total foreign investments
for
while.
a
riot
Korea
only
then f'
up /
re-
t
vived
it; it gave a tremendous
impetus to the expectation that "
the U. S. Treasury will not be *
able to maintain the $35 price per /
ounce.
That is why speculative^"
and
investment capital leaving;'
Europe streams in all directions,
from Toronto to Montevideo and '.
to
Capetown, rather than to the
U. S. That is the number
!
one rea-
why the U. S. dollar is being
sold short not only against
gold,,]•
but
also
against the Canadian !
dollar,
the
Swiss ♦ franc,
the,!.,
Uruguayan and the Mexican peso V
—temporarily
even
against, the !:
son
.
shadow
function ignored
a
of■ gold
price
up
dollar.
the
and
to
by earmarking them? Americans
gold, still less exp0I^
disregarding smugglers,
^or can a Britisher or a French-
The
authorities.
.
banks of
the
•
j[Yf"
ceniraiuf,
and
treasuries
countries^!
recipient
the funds—much of which is .*>
use
derived from
public and -pri-roV
present dollars and ask for
equivalent in hard metal. vate charitable contributions—toi ?},
protect their own monetary re-? *
Qniy
t/ie
central
hanks
and
serves against a possible devalua- ri.
treasuries of foreign nations have
Hon of the dollar* With the. one u-».
that privilege.
But why should
hand they take the money which' • i
they now prefer gold to holding
we
provide, end bet with the 3;, (
dolla
contrary to their usual
other hand on the downfall of the y!
practice?
man
our
their
'
;j
dollar. By doing so, they promote
*j.ts. depreciation: the whole financial world watches the gold outimmortal,
Well> the prime fact is that the
dollar shortage that the European
do, experts have
(So
Afriea ""and
spective
cannot possess
declared
the
with
djed
and
Korean
incident,
flow
and
draws
its
.
conclusions.
:
the
.
ing
I
gold-dollar
J.
.
This
sort
of
again.
The
arbi-
trage is one reason why we are
losing gold, but by no means is
it the only one. Britain, for example, the greatest taker for our
gold, does not participate in that
game (so far as we know). But let
us start at the beginning.
European
Pay-
due to the exhaustion
0f its credits Out of Marshall Plan
breaking
funds
up
to
.Thusj
is in the process of
ments- Union
■
v
Germany;
the German
only
not
based
on our
Every
fi-
/
subsidies
against
speculate
currency,
it.
whose
governments
nances are
onr.5
but actually undermine >•
weekly report from3^
comparative freedom of foreign
trade pronto
has given way 10 Washington announcing a freshT,v;
all-round restrictions. (The British loss of gold—and we lose it to the !5
and
French
are
hoarding the tune of $30 to $130 million per ;
week—is a fresh signal for hot •.
dollars
which
Germany
draws
down instead of using them to buy money to run out of,- or around, ,
In the nine months between the German
goods.) But the outer the dollar. The process is of the •
global devaluation wave of Sep- world as a whole is accumulating self-inflaming sort, leading toward .
chaotic monetary conditions.
tember, 1949, and the explosion dollars as our trade turned deficiin Korea, $360 million of gold left tary.
.v.,;';.our shores. That was just an apThe sterling area is the chief
'
Of course, we could stop paying
petizer. Since,
by the end of gainer of the dollar flood, having
March, we have lost $2,700 mil- almost
trebled
its - reserves; in gold and freeze or block the
balances of the foreign authori¬
lion more. There is no misfortune Canada,
Latin
America
and
in reducing our fantastic
gold France next. They owe it to our ties, as they have treated us time
and
again. The Bretton Woods
reserves
to the present level of boondoggling
and to their raw
difficult for the Orient
many of the teachings of socialism and com¬
that our forefathers would have
shuddered to
material^'/
which com-31
mands a premium, while we buy
them dearly with dollars which; *
sell at a. discount. She profits byr;
our fixed-gold-price policy.)
she
The conclusion is,, cannot: but,; be
producers,
except and a
surplus arose. It is
that a currency which is gaining
U. S., who sell
J .
^
d means general; Denmark
in volume but losing in gold
40% of their annual gold output js jn an acute balance of
back-^
payment
m the premium market notwithing is headed for trouble. -Wise i !
crisis, HOliand on the verge of
standing the protestations of the it and the Finnish mark is totter- men keep out of a currency which
International Fund.)
is headed for trohble.
...
er'
rather
numerous in¬
good Americans steeped in the tra¬
the
gold
Canada
and certainly
employed for de¬
to
munism
the
other
political freedom and individual initiative have
victims of notions which bear so much resem¬
become
mere
Money-Managing
perform
down
$21.8 billion if it were-not for the
fact
difficulty in recognizing
even
a
is
by the Federal Reserve: they con*tribute
effectively
to
keeping
accept from the West.
Now, of course, against such wdrfare of ideas naval
power, air command, big guns, tanks and other forms of
physical power are ineffective. An observer on Olympus
have
Fund
global
by Messr. Keynes, Wmte and Co.
And the foreign central institu-
to
would
International
the
of
Pov^®r' as which it waa concocted
velopment of the country, but it is hardly strange that
such, considerations
the
the.
°f
come,
were
rule
price
Monetary Fund, is another story;
proselyters of Moscow have a number
of substantial advantages. The world is in an intellectual
ferment, and has been for decades past. In some sections
of the globe, of course, dissatisfaction has a firm basis.
Not only is most of Asia
poverty-ridden, but it has for
centuries suffered from a picaresque colonialism. We must
face the fact that these conditions make
things much
easier for Moscow. In Asia
they place all Western powers,
or
nearly all, in an awkward position when the confidenceof natives is sought. Of course, the fact is that the Krem¬
lin is not a whit more anxious about the welfare of the
individual Chinese, or
any of the others in Asia, than
were the exploiters of
past decades; it may prove that
a
■
practice is
illegal
beit violates the single gold-
^ incidentallyr-Bouth
-
the lot of the great rank and file will be
otherwise.
ml Jdeprecate
the
In all this the
| than better at least for
repeat the perform-
number of times.
any
That
in name,
Substantial
the
go,
incentive abroad to!
buy for gold
rather than fori5 5
dollars, given the discount on the!k
latter. (That is what Russia does:' ;
greater
that
virtually
all of 1950 $10,500 million-known to
others indulge in the same prac- the statisticians,
British pound and, unbelievable,
tice which they consider perfectly
\ hi.
as it may sound, the
legitimate. Indeed, why should
Argentinian.^.''
who,
then,
converts
dollar
these dollars land.N
they notTollow the very legiti- Daiances into gold, either by tak- peso. Most of
mate profit motive
which roost ing them out of this country or eventually in the hands of the fe-.^/
political independence
would be a world in which
mankind would suffer many, many hardships not now
general and from which recovery would be long and diffi¬
cult. Several, not to say most, European countries (the
so-called "free" along with the others) have already moved
a
very considerable distance along this road, and we, our¬
selves, in some respects at least, have been, and still are,
moving in the same direction. It is a serious business quite
without reference to possible domination by the Kremlin.
as
may
The
The French central bank claims
each of the countries retained its
in fact
However, a deficit in the trade
balance does not necessitate gold
(officially!)
^
fear still growing tendency of peoples
in this country, in Great Britain and in many other lands
to accept and even to applaud many notions and policies
akin to communism. A world consisting of nations largely
socialistic or communistic in basic matters, even though
and, at times,
home at
it at
higher.
which
the spread of such
"independent" totalitarianism could scarcely be
of
in
net
espionage operations) the general drift is of serious con¬
It is too soon to reach anything in the nature of a fi¬
nal judgment of the likelihood of the development of com¬
munism in various countries which refused to accept
even
proceeds
account
the $42.00 buy
gold on this side, adding a 20 %
to his own gold reserve. In
headway throughout the world during
(Tito-ism), but
commodities
basic
of
Dollar
roughly 1.2 ounces of gold. Our crease in foreign-owned dollar
generous supporter either boosts balances. The dollar being what
his dollar account or collects the it is—the international currency-
cern.
master
its
to
where
York
New
the past two decades, and whatever the ultimate effect
of recent developments (such as exposures of dastardly
as
in
only.
gold
tion.
it must be admitted that communism and its cousins have
Moscow
.
page
at $42.00 the ounce. The
on
-
The Rats Leave the Sinking
/t
are
made tremendous
from first
Germany.
two-front war—and we must
a
gold. Arab princes
royalties in
Manifestly, the less
goods we have for sale and the
higher the world market prices payment
like to take their oil
',3^
Communism Has Made Headway
hand and the remainder of the world
are
Continued
Whatever may be the relative strength of the military
establishments of the Kremlin and its satellites on the
one
France and Italy—and even
as
really fighting
forget it.
not
being to develop a substantial out-and-out Communist fol¬
lowing and a larger section of people who are not more
than half-heartedly opposed to Moscow and its machina¬
tions. When this has been accomplished, conquest is more
than half effected.
depends upon much the same
All this is true in far greater degree of
satellites of the Kremlin
Thursday, April 12,1951
...
that
the
outflow
the earmarks of
•
a
run
has
all
wfuch
of
^con-
tinues unabated.
Why should, the
one currency in the wofld that is
backed by the greatest power, the
most
potent
economy
and
the
largest gold reserve, be under
fire?
The apparent answer is in terms
of trade balance. While last year
We
had
an
export surplus
of
better
have
than
$2,400
million,
we
material prices which are
five
1940.
tirnes
what
they
Devaluations
and
nearly
in
were
extreme
import retrictions against American
help,
products
too.
Dollars
sold by capitalists in exchange for
other currencies (flight capital)
pour-oil-on the fire. But all that
still does not explain why London
converted
last
year
over
statutes
permit
such
tory measures in
the
But
dollar
soft currency,
in
terms
of 1
an
discrimina¬
"emergency."
would
become
a
deeply depreciated
gold as well as of
other moneys, and would lose its
role as the standard medium in
relations.
international
a
currency
is
Freezing
tantamount
to
$1,000 extra-legal devaluation; at
ent,
nothing
could
serve
its
pres¬
more \q:
million (!) into gold by putting
effectively
to
promote
capital
that much on earmarked account
flight out of the dollar and! in¬
in Washington, and apparently
flationary
expectations
h:<I
within.
unilateral goes on converting.,
And
one
measure
of
currency
grants and charities $4,600 milThere are three possible motives
blockade would lead to another.
lion, so that we ended up with a for this conduct. One has been
Indeed, the entire monetary struc¬
de
facto surplus of imports Of indicated above: the British may
ture of the world would crumble,
$2,200 million. That much we had wish* to follow the Continental
founded as it is on the dollar's
to pay the outer world for things pattern of selling gold at the free
"hardness."
and services bought in excess pf market premium so as to earn
There is one way, and one only,
those for which we received pay- additional dollars,
giveq
away
in
This situation promises to : M6re~ important is
a second
stay with us, given our prevailing motive: they themselves can buy
domestic
trend
toward
higher certain raw materials cheaper in
prices and scarcities—and more gold "than in dollars; arid "under
ment.
boondoggling.
developed"
areas
often
prefer
to preserve
the residual of finan¬
sanity in this present setup.
It consists in eliminating the im¬
cial
mediate
There
are
cause
of
too many
the
v
trouble.
dollars^lloat-,
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
<
(1563)
i."
ing
around.
That
officials—who
subscribe
and
to
is
why British
otherwise
the
laws
do
of
Continued from page 5
not
Demand—try to get out from
under
the
dollar.
The
Business Failures Advance
Commercial and
Supply
The State oi Trade and
is
answer
not: to appeal to their
friendship;
Uncle Sam is the only member of
annual
rate,
unchanged
from
the society of nations who is im¬
above
mature enough not to understand
that national self-interest is the
January.
It
Industry
"leitmotiv"''
of
national
A
can anything be
accomplished
the impotent Monetary Fund.
The answer is: to reduce the ex¬
giobal
until
in
balance
our
of
equilibrium.
would have
in
too,
to
the
bone
The
,
of
.
the
National
hold
Dallas
its
-
Thursday
Friday, May 24th and 25th.
Thursday, aside from an
outstanding
business
program,
there will be
:
Steel
cocktail
a
unusual
party
and
for
it
ranch
and
it
will
be
under
barbecue expert,
Friday, there will be a golf
tournament and a special lunch¬
eon for the ladies at the
Cipango
Club. On Friday night there will
be the usual banquet with
dancing
On
and
:
entertainment.
•
<
i
A successful
offering of
debentures
mediate
of
Credit
Banks
'
March 15 by M. G.
York fiscal agent
The
the
made
operating
placed at
of
amount
102.4%
steel
de¬
:
,
the
LOS
H.
The
Financial
has
become
old
and
was
with
The
Hollywood
&
Fabian Co. Adds
Electric
.
9500
of
Santa
Fabian
&
the
on
like date
a
year
level
in
figure is still
$5.96, and 24.6% above the
ago.
1
<
in Korea.
peace
deliveries of wheat to the highest"
crop
six weeks.
Corn
rose
yellow cereal
a
early
an
new
slightly in sympathy with wheat.
Demand for the
not
was
tendency to
aggressive with large industries showing
down their inventories. Export trade in corn
Trading in oats was quite active with prices,
pare
fairly active.
mostly steady to slightly higher.
Prices in domestic spot cotton markets continued to
hold at
or
near
ceiling levels.
Inquiries were numerous but desired
was
qualities
not offered freely.
Mill buying was slower and
export fell off from recent weeks.
Trading in the ten
spot markets declined last week to a total of
84,200 bales, from
114,000 bales the previous week, and compared with 78,400 in
the like week a year ago.
'..r.vv
Cotton futures, except the
nearby May delivery, moved irreg¬
ularly and closed the week on the down side. Contributing to
the easiness in futures were reports of favorable weather
condi¬
sales
were
for
,
,
,
,
tions
'
in most parts of the cotton
belt, favorable war news from
Korea and reports of a further
slackening in demand for civilian
goods in cotton textile markets.'* "'
"
":
The mid-March parity price of cotton, as announced
by the
Department of Agriculture, showed a higher than expected rise
of 49 points to 33.60 cents a pound, from 33.11 cents a month
previous.
or
a
April
Jan.
of
1,
9,
1951,
based
to
compared
a
the
on
rate
of
decrease of 0.1 point*
ago.
A
month
the
ago
A
year
of
amount
electrical
energy
Institute.
Previous Week
The
was
100.1%
it stood
nation's shoppers bought
slightly less during the period
Wednesday of last week than in the week before; total
of purchases, while slightly above the level for
the post-Easter week last
year, was below that for the comparable
ended
on
dollar
volume
week
Dun
rate
ago
Trade Volume Registers Mild Decline Under
a
&
year ago, a result of this year's early holiday, states
Bradstreet, Inc., in its current review of trade. Discount
were prominent, as many merchants sought to reduce
promotions
heavy inventories.
Food
and
'
buying declined
97.8%
wives
expressed further resistance
sales for food
what.
distributed
/.
•
J
<
was
for the corresponding period two
years
above
the
The
4.9%
Company,
preceding week.
week's
above
29,812 cars,
Monica Boulevard.
•
represented
rises.
of
a
house¬
Over-all
year
ago.
the
of
least
reauested
were
items
were
television
sets
large appliances.
and
!
various lines
,
Total retail dollar volume in the period ended on
Wednesday
week was estimated to be from 1% above to 3% below
of last
the
level of
by these percentages:
a
year
Regional estimates varied from
ago.
a
year
•
New
increase of 35,031 cars, or
1950, and an increase of
4.1% above the comparable period of 1949.
the
or
total
„*
price
with those
even
as
in somewhat diminished demand by
shoppers last week; aggregate dollar volume of purchases was
slightly below that for the comparable week last year. Among
Carloadings Show Further Gains
['<■■]■
some
'•
■
House-furnishings
ago.
Loadings of revenue freight for the week ended March 31,
1951, totaled 755,435 cars, according to the Association of Amer¬
ican Railroads,
representing an increase of 6,631 cars or 0.9%
_
to
Many shoppers bought increased quantities of fresh fruits and
vegetables, while the call for some cuts of meat declined some¬
31,500,000 kwh. below that of the pre¬
vious week, 838,013,000 kwh., or 14.2% above the total
output for
the week ended April 8,
1950, and 1,375,883,000 kwh. in excess of
the output reported
about
were
<
slightly in the week,
very
dollar
at
ago
.
HILLS, Calif.—Eu¬
H. Marley has been added to
staff
beginning
capacity
The current total
BEVERLY
gene
the
Flagg and
(Special to The Financial Chronicle)
the
of
Output Extends the Declines of the Past
Lamborn, Hutchins & Co.
^
week
by the electric
light and power industry for the week ended April 7, 1951,
was
estimated at 6,735,344,000 kwh.,
according to the Edison
associated
in
Post
this
Two Weeks
Chronicle)
merly with J. A. Hogle & Co, In
the past he conducted his own in¬
business
announced
capacity and amounted to 1,864,300 tons.
Electric
with Francis I. duPont & Co., 722
South Spring Street. He was for¬
vestment
Steel Institute
production yielded 2,001,000 tons.
.
ANGELES, Calif.—William
Mann
week
ago,
week
a
Francis I, duPont & Co.
to
and
operating rate is equivalent to 2,045,000 tons of
and castings for the entire industry, compared to
ingots
of the
(Special
Iron
increased
week
a
2,047,000
William H. Mann Joins
*
23
drop of 2.2% from the
-
This week's
amounted
.
>
102.3% of
for
industry's
As of the close of business
April
outstanding
$653,445,000.
'
\
revenues
capacity
maturing April 2, 1951,
and $48,405,000 was "new
money."
1951, the total
■
that the operating rate of steel companies
having 93%
steelmaking capacity for the entire industry will be
bentures
to
producers .representing-about
index of
a
The current
foods in
The rise carried
level.
steel
Feb. 20.
on
above the pre-Korea
lessened prospects of
of
the
The American
par..
bentures
1949
26
covers
$7.08, and represented
sales
Of the proceeds,
$27,795,000 was
used to retire a like amount of der
2,
stocks
were
slightly over $9 billion, against $7.1
previous year, up 27.4%.
Net income in relation to
was 7.9%, an increase of
9.7% over the 1949 figure of 7.2%.
"Net income percent of investment rose from
9.5% to 12.4%, an
increase of 30.5%:
billion
banks.
April 2, 1951 and
1952. The issue was
2,
good
of the 26 companies were $720.9 million, com¬
pared to $511.5 million in 1949, a gain of 40.9%.
Net sales and
dated
Jan.
they have
a
hand
Net earnings
consisted of $76,200,000 of 2.00% consolidated de¬
due
above the
analysis
r92% of the nation's ingot capacity.
financing
bentures
as
working
about
103.5%
The
,
Newcomb, New
for
while
are
items, while others have accumulated tonnage that does
fit their
requirements, but hope that they can trade it for
soared
Inter¬
was
products
unbalanced
are
including profits, sales, taxes and dividends.
The
industry's
earnings from 1950 operations states this oaner. vpre 40.9%.
higher than the previous year.
But the Federal Government
gained most of all through Federal income taxes for 1950 which
issue
an
Federal
consumers
manufacturers
below
Leading grains were generally firm with wheat and rye
rising rather sharply, influenced largely by unfavorable weather
reports from some of the main
producing areas. Buying of grain
futures was also stimulated by the
higher than expected midMarch parity prices for most
grains as announced by the Depart¬
ment of Agriculture on
Friday of the preceding week and the
completed by now, this trade authority adds.
The "Iron Age" has just
completed its "1950 Financial Anal¬
ysis of the Steel Industry," which shows a host of new records
FIG Banks Place Debs.
of
certain
on
should be
■
•
•?'.
•
.
many
Some
at
high of 7.31 recorded
251.49
pell-mell manufacturing operations may have been for the
pur¬
pose of converting inventories into finished
products in order to
comply with inventory regulations. But this type of correction
the
direction of g
r
of
shortage.
occurred
34%
a
moderate drop in the Dun & Bradstreet
daily wholesale
commodity price index last week.
The index closed at 324.76"
April 3, as compared with 325.63 a week
previous, and with
for the purpose for which it was
bought.
\
A closer check on
inventories is expected after CMP is func¬
tioning and the administrative staff is better organized.
Some
an
party with barbe¬
things that go with
special set is being designed
it. A
the
which
were
on
something else they need, this trade paper asserts.
In other in¬
stances, gray market for foreign tonnage has not proven suitable
and all the
cue
inventories
of
mouth
not
Company will present a
style show. Thursday night there
be
in
steel
other
Marcus
will
losing their effectiveness, despite the fact that
steel set aside for such
priority have been re¬
Some
230
and
in Latest Week
Irregular movements in principal commodity markets resulted
'
fast
are
and
1949
Wholesale Commodity Price Index Declines
Moderately
Age,"
This recalls the procurement
struggles dur¬
ing the early part of World War II, when too-abundant
priorities
lost their value.
"
/
V
to
and women at which Neiman-
men
"Iron
users
result
luncheon for both
a
the
its saturation point.
annual
on
On
s.
states
companies have DO tonnage on
products, booked through the end of this year.
Even so,
complain it is becoming more difficult to place DO
orders.
Thus, the present system of DO priority has about reached
steel
and
:
may
certain
—
will
Authority,
203
the sum total of the price
per pound
general use, and its chief function is to show the
general trend of food prices at the wholesale level. -
that
Plan
the
year-ago level of $5.74.
The index represents
priority system
Production
percentages of
peatedly increased.
DALLAS, Tex.
The Texas
Group of the Investment Bankers
in
1951
of 31
week
below
Jan.
when it stood
Capacity
is
metalworking authority.
DO's
Texas I8A Group to
Hold Annual Meeting
meeting
steel
week
from
said to
come
national
Association
for
in the
195
wholesale food price index fell 6 cents
to stand at $7.15 on April
3,
$7.21 the week before. This was the lowest since
Further
20.0%
becoming so intense this
something must give soon. The Controlled
Materials
just in time to prevent a breakdown of the
combating domestic inflation,
than anything price controls
_
battle
to
Food Price Index Continues
Downward Trend
Marking the third successive decline, the Dun & Bradstreet
However, it added,
was
little
a
comparable weeks of 1950 and
the prewar total of 295 in
1939.
consumer
buying, the Bureau of Agricultural
pointed out, may take some of the
upward push out
during the next two or three months.
Steel Output Scheduled to
Decline 0.1 Point of
in Current Week
surgery
could accomplish.
ago,
were
in the
during the summer,
salutary effects
more
year
casualties
however, 12%
according to the
accompanied by a smaller output of consumer
goods,
be likely to generate new
pressure on prices.
payments, is
Such
a
a
development would probably be short-lived.
expansion in government
spending for defense
by
subsidies
like month
such
cutting the hys¬
terical stockpiling and,
especially,
the
the
tapering-off in
of prices
by
dollars
for
Economics
policies.
Nor
cess
rate
Sharply
rose
week, Dun & Bradstreet, '
Although at the highest level since May, last year,
Inc., reports.
was,
Department of Commerce.
the
industrial failures
ended April 5 from 136 in the
preceding
35
an
corresponding week in
England, East, and Northwest 0 to —4; South +1 to —3;
+2 to —2; Southwest +3 to —1; and Pacific Coast
-f-5.
Midwest
4"1 to
>
Wholesale buying continued to dip slightly in the week;
heavily stocked inventories in many lines deterred dealers and
distributors generally from adding to present supplies.
The total
dollar volume of wholesale orders was moderately above the level
for
the similar period in 1950. There was a seasonal rise
of buyers attending various wholesale markets.
in the
number
Auto
5
(Special
to
The
BEVERLY
Financial
ward
J.
Chronicle)
Waddell
shire
HILLS*
Jordan
Pattapiece
and
are now
&
.
Combined motor vehicle production in the United States and
to "Ward's Automotive
Dalton
Reports,"
totaled 163,874 units, compared with the previous week's total of
184,469 (revised) units and 133,172 unit$„a,year ago.
A.
affiliated with
As
Reed, Inc., 8943 Wil-
Boulevard.
rials
The
Financial
,
Chronicle)
y,
LOS ANGELES, Calif.—Edward
W.
Heid
with
647
has
First
South
become
connected
California
Company,
Spring Street. He
previously with Fewel & Co.
the
was
cars and
;-i7,555
car
new
and
production
registered
a
decline
of the previous week..,.
output for the current week
made
up
31,097. trucks built in the United States and
2,515 trucks built in Canada.
of 122,707
a
total
of
cars and
For
the
United
States
alone, total output
was
153,804
units
sales
Reserve
on
country-wide
a
Board's
index
for
basis,
the
as
week
taken
ended
March
31, 1951, declined 14% from the like period of last year.
in the previous week and
6% for the four weeks ended March 31, 1951.
For the year to
date department store sales registered an advance of 17%.
Retail
trade
improvement
week
was
store
Federal
the
This compared with an increase of 9%
National Production Authority mate¬
truck
level
Total
m
to
result of the
a
restrictions,
from
Wit*: First California
(Special
Department
from
Materials Restrictions
..
*
Output Hampered in Latest Week by NPA
Waddell & Reed Adds
*
of
in
over
1950
a
New
York
last
decrease
of about
6%
showed
week
the past two weeks.
some
slight
Compared with the like
was
noted.
According to the Federal Reserve Board's index, department
store sales in New York City for the weekly period ot March 31,
1951, declined 14% from the like period of last year. In the pre¬
ceding week an increase of 9% was registered above the similar
against last week's revised total of 174,990 units, and in the like
week of last year 127,653.
Canadian output in the week totaled
10,070 units, compared with 10,479 units a week ago and 5,519
week
units for the like week of 1950.
last
of
1950.
For
the
was
recorded
four
weeks
ended
March
31,
1951, an
and for
increase
of
the
to date, volume advanced 16% from the like period of
year
year.
5%
over
that
of
a
year
ago,
36
The Commercial and Financial
(1564)
Continued
from
page
is
4
Chronicle
to
expect of 1941 and the end of 1945, personal holdings of currency and
cut by about
and perhaps by demand deposits increased from
$1-5.7 billion to $45.7 billion. The
unreasonable
not
that dissaving can be
billion
$4
The
a
year
$5 billion.
Integrity of the Dollar
Increasing the use of per¬
(3)
sonal
savings in. financing the
sumer incomes that are spent for
purchase of real estate.
During
consumer
goods. There are two the
last year about $2 billion of
ways of doing this: (1) raising the
investment in real estate was fi¬
personal income tax; and (2) in¬
nanced by the expansion of com¬
creasing the rate of personal sav- mercial bank credit and
roughly
ing.
;
..
.,
a
billion by the sale of govern¬
An increase of $16 billion or ment securities
by insurance com¬
$17 billion a year in the yield of panies
to the Federal Reserve
the personal income tax would Banks—in other words
by an ex¬
million and the work week wohld
increase by 3%. The result would
be a rise of nearly $12 billion a
general expectation that the postmovement of
war
prices would be
downward is reflected in
62
of
a
survey
non-governmental
econo-
mists made by one of the agencies
of the Farm Credit Administra-
.
.
.
Thursday, April 12, 1951
ment of price control machinery
is a fairly good advertisement pf
the danger of a rise in prices.
Likewise, every time the govern^
ment issues an order cutting down
the future use of this or that material in civilian production, it, is
a probable shortage
presumably encouraging peo-j
advertising
and
The dominant opin-
pie to buy in advance. In view of
the long and thorough discussion
these economists was
price level during the
quinquennial 1946 to 1950 would
of the problems of inflation arid
in view of {he rise in prices tp^t
has occurred in the last nipe
average about 6% above 1945, and
large part of eliminate the gap that will have pansion of Federal Reserve bank that by the quinquennial 1956 to
the employees are organized into arisen between personal incomes credit. Both of these methods of 1960,
the price level would be
powerful trade unions, as in the after taxes and the supply of con¬ financing the purchase of real slightly below the level 1946-1950.
United States, the ability of the sumer goods by the end of 1951. estate are
Present opinions about the longinflationary.
If they
community to limit the advance It is, of course, unrealistic from are effectively discouraged, per¬ term movement of prices may be
in wage rates depends upon what the
political standpoint to talk sonal saving as a method of fi¬ just as wrong as were the opinions
wage controls the unions, are will¬ about such a rise in the income nancing housing will be encour¬ of five or ten years
ago. In fact,
The
President
has
asked
ing to accept. If unions do not tax.
aged.
There will be less resi¬ it is not too late for at least some
accept a wage policy, they will Congress to provide $4 billion a dential building in 1951 than in of these
early opinions to turn out
make bargains that violate it and year more in higher personal in¬
1950, but a much higher propor¬ to be correct — though I do not
wants, not what the seller thinks
the customer ought to want. A
few years ago a large restaurant
there cannot be muqh
of scare buying
tfispt
would be precipitated by purchaser
ing power bonds.
Persuading millions of persons
to start saving or to increase their
saving cannot be done by bally**
hoo, or by advertisements over,
the radio or in the magazines or
in street cars or subways—it can
be done only by personal solicitaU
tion, the same kind of salesman-*
ship that gets people to buy life
insurance. Consequently, as so on
as the government provides itself
with a meritorious line of securi-»
ties that can honestly be repre-*
sented as meeting the needs of
non-institutional buyers, it should
organize for a nationwide face-toface selling campaign. A good
volunteer sales force able to make
a word-of-mouth approach to tens
chain undertook to
in payrolls.
year
But
payrolls will
also
be
in¬
creased
by advances in wage rates.
strong sellers' market, the
rise in wage rates is likely to be
rapid, unless steps are taken to
In
_
control
it. Where
,
^
a
tion in 1945.
ion
among
that
the
a
Will
strike or threaten to strike
unless these bargains are treated
as exceptions or unless the
wage
taxes. It it doubtful whether
come
Congress will be willing to go
quite this far. Even if it did, only
policy is modified to allow them. about one-fourth or less of the
a strong sellers'
market, strikes inflationary gap would have been
against the wage policy cannot be eliminated.
defeated unless the public, includ¬
Whether another $4 billion in¬
ing most of the wage earners, are crease in the personal income tax
In
tion of it should
of
be financed out
personal savings.
(4) Offering individuals attrac¬
tive securities in which to invest.
Equity
issues
investment
are
for
not
a
suitable
small
savers,
whom an increase in sav¬
ing is badly needed. In the past,
be
bad- for
overwhelmingly against
incentives small savers have invested
strikes would
mainly
and demand that the government Would
depend upon how it was in
savings bank deposits, houses
use strong measures
to maintain raised. The personal income tax for
owner-occupancy, and ownerproduction.
v.
;s..re¬ can probably go quite high be¬
operated businesses.
In the fu¬
it
public Opinion at present does fore
discourages men
from
ture, small savers will undoubt¬
not demand that unions
accept a working harder. Indeed, up to a edly n6ed to invest in conserva¬
wage policy that involves real re¬ certain point, higher taxes on in¬
tively run investment trusts a
from
straints upon the use of their bar¬ come
personal
services considerable
part of the funds
probably encourage effort.
The that
gaining power, and the unions
they would otherwise have
themselves are not ready to ac¬ personal income tax can also go
put into savings banks. If invest¬
cept even the mild restraints im¬ quite high before it makes most ment trusts are to encourage sav¬
posed in the orders of the Direct¬ people less willing to invest in
ing among small investors during
or
or
causes
the
of
self-em¬
Economic
Stabilization. homes
the next year without bidding up
Since his order limiting
ployed to be less willing to in¬ stock
wage in¬
prices, there needs to be a
in
their
own
creases
was
issued on Feb. 27, vest
enterprises.
good volume of new equity issues.
unions
in
wool,
cotton,
meat But willingness to invest in secu¬ That is why the payment of div¬
packing shipbuilding, railroading, rities is probably weakened by idends
partly in the form
of
and other industries have negoti¬ high income tax rates, particu¬
stock
is
particularly important
ated wage increases which con¬ larly when the law permits very
this year.
"
< 1
■;>. •
In
siderably exceed the permitted inadequate offsets for losses.
Much of the responsibility for
amounts.
The
unions evidently order to avoid discouraging mil¬
expect the government either to lions of persons from increasing reducing the size of the gap be¬
tween
personal
incomes
after
modify its. wage regulations ?or to their; * savings and buying secu¬
treat the increases negotiated by rities, it would be better to in¬ taxes and the output of consumer
unions as exceptions to the regu¬ crease the yield of the income tax goods must fair upon the govern¬
lations. If the government modi¬ by
reducing exemptions rather ment. The volume of borrowing
by the government should be de¬
fies its general wage regulations than by raising marginal rates.
termined, not by the size of the
to
permit the recent increases,
budget deficit, but by the size of
there will be little general re¬
VIII
the
inflationary
gap.
If
new
straint imposed on wages.
If it
Since only a small fraction of
crises this summer require the ac¬
permits the recently negotiated
the inflationary gap can be elim¬
celeration of defense production,
increases to be treated as excep¬
inated by taxation, reducing the
my estimates of the size of the
tions, there will be two wage
gap must be accomplished mainly
gap will be too small.
Thus far
policies—one for non-union work¬ by a rise in
personal
saving. the government has done virtu¬
ers and another for union work¬
among
,
think
this
will
happen.
But
whether present-day opinions are
right or wrong, they are very different
from
the
opinions of ten
five years ago,
opinions that make mar-
years ago, or even
and it is
kets.
Merchants long ago discovered that the way to sell goods is
to
give
the
he
what
customer
several
are
of
ways
in¬
residue
the kind
of millions of prospective buyers
of food top management thought
the customers ought to eat—not
the kind that the customers wished
is just as essential as a high-qudl-*
ity line of securities,
to
^
^
Let me conclude these remarks
with some brief observations
serve
eat.
The customers got what
they wanted, but they got it by
going elsewhere.
Since
the
there
differences
are
preferences
in
of
prospective
Treasury should offer
a
variety of savings bonds—a
wider variety than it now offers.
savers
the
There
seems
demand for
bond
a
should
this demand.
exempt,
less,
a
be a widespread
tax-exdmpt bond. A
to
offered
be
If interest
rate of 3.5%
might be
to
risk
a
loss
in
them
the
tax
little
as
suf-
for
the
purchasing
their principal.
considerable
meet
prospective buy-
compensate
of
power of
or a
regarded
ficient by many
ers
to
were
demand
There is
among
■
There
months,
prospective investors for "inflahedges" — investments that
tion
will not lose in purchasing power
if
prices rise. In fact, the demand
protection against inflation
extends beyond savings—there is
a
widespread demand that wage
payments be protected against infor
(
Vx-
^e.?onJ~^un °"tt°ok
of the dcdlar. In recent years the
Federal Government has adopted
polices and practices that tend m
?on^ niiv to reduce the-pur**
chasing power of the dollar. .As a
resulh a
eJie£_k??
gr°wn up that the dollar is bound
lr} ^e *on*» run
drop m P^r-*
chasing power. Associated with
S1Sk+ f
fv? Je?irS
/ raP*
fhght from the dollar and a runaway inflation,
I believe that the policies arid
practices of the Federal Government greatly increase the probability that prices vvill rise and
that the value of the dollar will
slowly decline. I do not believe
that the policies and practices
which 'reduce the purchasing
power of the dollar will be abandoned—though some of them mhy
be modified. The decline in the
value of the dollar will create
grave
injustices. Much can be
done by individual initiative or
by public policies to limit some of
these injustices. But some of the
injustices caused by rising prices
cannot be mitigated. The injustices
caused by rising prices, however,
are probably no greater _than the
,
ally nothing to stimulate an in¬
ers,
because
most
unions
will
creasing personal saving: (1) of¬ crease in
personal saving (1) de¬ flation. The
quickly insist that they be given
Treasury should offer
fering individuals convenient op¬
the benefit of any exceptions that
spite the obvious fact that most a bond
designed to meet this
portunities to reinvest dividends; of the reduction in the size of the
are made in the
wage policy.
widespread demand for a hedge
(2) reducing the amount of dis¬
gap
between
personal
incomes
I
do
not
know
how
against inflation—that is, a bond
rapidly saving; (3) increasing the use of
and the supply of consumer goods
wage rates will advance during
payable in a fixed amount of purpersonal savings in financing the must
be achieved by more sav¬
the next year.
In February, the purchase of real estate; and
chasing power.
(4) ing and
(2) despite the additional
cost-of-living
was
7.7%
above
Such bonds have been criticized
individuals -attractive fact that the
offering
present securities of
June, 1950, but about half of all securities in which to invest.
on
several grounds—all of them
the
government are not attrac¬
wage earners had not yet received
(1) Offering individuals con¬ tive to non-institutional buyers. ill-founded. For example, it has
general increases since June. It is
been said that purchasing power injustices caused by stable prices,
venient opportunities to reinvest In other
words, the government
obvious that even among non¬
bonds would represent "built-in The slow depreciation in the value
dividends.
I have already dis¬ has
scarcely started to deal with
union wage earners there will be
cussed
this
possibility and no the very crux of the problem of inflation." This is erroneous. The of the dollar is not likely, m my
many wage increases in the next
ratio between the liabilities ere- judgment, to precipitate a rapid
further comment is necessary.
inflation.
If the
government is
few months. When one takes ac¬
ated for the government by pur- flight from the dollar and to pro(2) Reducing the amount of to do a good job of stimulating
count of the strong upward pres¬
In 1949, the net vol¬ saving, there must be a merchan¬ chasing power bonds and the na- duce a runaway inflation. The
sure of unions on
wages, and the dissaving.
tional income would be precisely s?0w depreciation of the dollar is
inability of the government to ume of personal saving was about dising point of view in the Treas¬
the same as the ratio between lia- likely to raise the average level
rally public opinion against wage $9 billion. This was the result of ury. This means that the Treas¬
bilities and income that woyld ex- of employment and, therefore, the
increases, one reaches the con¬ $23 billion positive saving and $14 ury must design and offer secu¬
ist if the government sold con- output of the economy and the
clusion that the rise in straight- billion of dissaving.
If dissaving rities that fit present needs and
ventional bonds and did a perfect standard of living of the people,
time rates is, likely to be at least (spending more than one's in¬ preferences of prospective buyers
that
would
be
as
purchased job of price control—that is. pre- Let me explain briefly the reasons
large as it was early in the come) can be substantially re¬ and
It is f°r these several beliefs.,
Second World War between Oc¬ duced, the net amount of saving eagerly. The Treasury is still at¬ vented any rise in prices.
objected
that
purchasing
Three principal public policies
tober, 1942, and October, 1943, can be greatly increased. Much tempting to sell the same type of also
the
when the increase was 7%. Such of
dissaving occurs among E bond that was offered about 10 power bonds would, add to infla- tend to reduce the purchasing
an
increase
would
add
over
$9
billion to payrolls.
This rise; to¬
gether with that produced by the
rise in
employment and the longer
work week, will make the total
growth in the compensation of
employees by the end of 1950
and
the
billion
as
end
an
of
1951
annual
about
rate
$21
before
low-income recipients and reflects
the fact that these people have
small incomes and often
dinary
or
other
dissaving also
well-to-do
erate
buy
occurs
an
who
with
borrowed
rates.
34%
of
Sihlee .the'jprospects for limit¬
ing the,;ri$e in personal incomes
not
bright, the control of the
demand for'Consumer goods must
are
be
accomplished mainly by re¬
ducing the proportion' of con¬
feel
automobile,
other
durable
all
the
among
spending
among
with
persons
incomes
taxes and about $16 billion or $17
billion
after
taxes
at
present
VII
extraor¬
due to illness
misfortune.
But much
expenses
able
or
consumer
goods
In
money.
dissaving
with
1949,
occurred
of
the
the
and
52%
among
the
three-fifths of the spending units
with the highest incomes.
This
by
of
dissaving
strict
credit
controls
and real
can
on
estate
of supporting the prices of farm
products; (2) the policy of enlong as people expected prices to couraging collective bargaining;
rise still further, the purchasing and (3) the policy of government
power bonds would be among the intervention for the purpose of
last of their assets that they would halting recessions. The policy Of
In the meantime, how¬
conditions
have
greatly
changed, so that attempting to
sell
a
be limited
consumer
credit.
It
1941
model
government
savings bond in 1951 is much like
attempting to sell an out-of-date
model automobile or,, refrigerator.
The
principal change
that has
occurred between 1941 and 1951 is
in
expectations concerning the fu¬
ture movement of prices. Through¬
out
was
the .Second World War
a
highest would
incomes
kind
tion if they were cashed and the
ever,
to
house,
a
two-fifths
units
the
mod¬
years ago.
.
there
general belief that the
war
be followed
by a slump and
that the trend of postwar prices
would be downward.
not
only
were
As a result,
people willing to
buy government securities on a
large scale, but they were also
willing to hoard. Between the end
power
of the dollar: (1) the policy
proceeds spent for goods during a
period of rising prices. But so
part with. It has been argued that
the mere issuance of purchasing
supporting
the
prices
of farm
small propower bonds would constitute a portion of all prices. It does, howdangerous admission on the part ever, affect an important part of
of the government that the gov- prices, particularly prices which
ernment may be unable to prevent affect wage demands.
The suparise in prices and that this ad- port
prices are high,
usually
mission
would
precipitate. >'3n elbout 90% of so-called "parity."
avalanche of buying in anticipation Parity js so defined that^Ost
of higher prices.
In this age -pf i-j&rm products sell ielow* "parity
newspapers and radios, however,- even imthe midst of a business
the danger that prices may rise is hpom.
Iii June, 1950, when ?r$ie
hardly
news.
products reaches only
And the establish- country
was'
a
very prosperous,
all
^Volume 173
Number 5002
.
.
.
The Commercial and Financial Chronicle
(1565)
six of the so-called "basic crops"
gaining
selling below parity and only ployers.
were
six
out
other
17
of
crops
were
of unions and em¬
that the coun¬
power
I
am
sure
try would not tolerate such
Parity is not diculous
a
ri¬
that
the
period
of
greatest need
insurance
for
than
20
is usually not more
25 years.
Most men
or
Unemployment have greatest need for insurance
and a lower when their children are small and
nical progress. Consequently, the standard of living, and it would when the family home has not
more
a
price is reduced below hardly be worth while to accept a been paid for. Undoubtedly a high
parity by technical progress, the lotwer standard of living for every¬ proportion of men of 45 years of
selling above parity.
defined
so
the
more
allow
to
as
tech¬
for
government is likely to
in
one
policy.
less
means
output
order
to
avoid
creeping
value of the dollar.
a
Dur¬ drpp in the
the gov¬ To? some extent the tendency of
spent no less than unions to raise wages faster than
$7.4 billion keeping the prices of the increase in output per manhour might be limited by more
fafrn products high.
The
policy of protecting the rapid technological progress.
right of employees to organize and One consequence oi more
of encouraging collective bargain¬ rapid
technological progress,
ing! has resulted in a rapid in¬ however, is to weaken the resis¬
spend keeping the price up.
ing the last four
ernment
years,
has
age
or
more
The
injustice imposed by rising
prices
is
most
beneficiaries
Between
the
'
in
number
of
trade
tance of
than
three
higher
wages.
million in 1933 to about 13 million
visage
the
crease
the
unionists—from
less
employers to demands for
Some people en¬
ultimate
development
With 13 million of a national wage policy formu¬
men organized
into trade unions, lated by unions and employers.
money wages are likely to rise They argue that the unions will
or
today.
more
faster
than
three
if
unions
million
money
Will
rise
rise
only
And
members.
wages
also
had
faster,
faster,
if
prices
because
prices must be in line with costs.
With
the
right-to
organize
pro¬
tected, the day is not distant when
union membership in the United
States will exceed 20 million.
I;, Some
economists, I realize,
tend that unions have little
effect
the
on
wages.2
money
Their
however, impresses
con¬
or
no
of
reasoning,
me as
uncon¬
der
If !
it often
the
the
of
one
are
and
issues
of
some
by
won
is
unions.
wages,
as
is, the strike means that
is attempting to push
union
up
faster than the market
wages
would
cause
many
cases
strikes,
them to rise.
where
And in
there
settlements
not
are
achieved
are
after much difficulty and as a re¬
sult
of
strong
pressure
both
on
sides to make concessions.
where settlement is
cases
In
the
difficult,
the
negotiated wage is likely to
be above the free market rate.
level.
If
the
which
must
rise
drop
accompanies
bargaining. Some
day
national
a
policy may be developed to
a framework for collec¬
wage
der
be
sufficient
in prices
to
prices
recession
offset
the
which accompanied
is
for
be
many
unions
and
are
interested
in
American
years.
particularistic
very
competitive and
the
not much
are
problems of la¬
efforts
business
cycles
run
rise in prices.
that
in
the
recessions
control
to
long
bring
to
future
about
a
It is true
efforts
halt
to
likely to be intens¬
are
be
placed
much
is
less
interested
1947,
as
in
re¬
plan
plans.
of
rise
in
boom
are
in which
periods
ways
prices during
be
can
appreciably
retarded
limiting
ciating dollar will raise difficult
prices
about
must
be
expected
to
rise
of
quences
2%
about
say
about
the
will
20
The
power
the
This is
rate at which
year?
per
has
lost
lose
one-third
purchasing
years and
than half at the
to
in
purchasingsince 1929. At this rate the
present
other
drop
decline
in
power
little
a
of 40
end
in
of
the
its
an¬
more
years.
purchasing
of the dollar would amount
gradual and partial expro¬
priation of the beneficiaries of life
a
readily during booms as
insurance, the holders of rights to
past, but not to drop as
pensions, and the owners of mort¬
much during periods of contrac¬
gages,
bonds, and savings bank
tion.
As a result, the long-term
deposits. The injustice would be
upward movement of prices will
serious and yet it would not be
be enhanced.
disastrous, and much could be
as
the
in
Little
these
be
can
policies
done
and
to
control
practices
that
tend to raise the price level. Some
reforms
the
can
perhaps be made in
definition
the
of
government
huge
"parity"
will
that
so
not
spend
done to mitigate it.
a
stable
run
price
In fact, since
in
level
the
be
probably
can
long-
achieved
only at the cost of recessions suf¬
ficiently
to wipe out all
prices during the inter¬
booms, the injustices ac¬
severe
the rise of
the support of farm
sums on
vening
prices in the midst of booms. The companying a slowly rising price
policy of encouraging employees level are probably no greater than
to organize is here to stay, and
those accompanying a stable price
little
can
gaining
some
be done to limit the bar¬
power
level
of trade unions. At
of
employment, it is
true, the unions would not be able
to
raise money wages faster than
managers
and
output
man-hour, and
per
engineers
credit
policy fairly
vival
from
the
soon
raised
a
tight
after
re¬
recession
increase
in
might halt
employment and
prolong the amount of unemploy¬
ment that would equate the barsi See, for example, W.
A.
Morton,
Unions, Full
Employment And
Inflation," American
Economic
Review,
"THatle
March
1950,
Vol.
XI,
l>p.
13-39;
Robertson, Money (revised edition),
D,
p.
H.
222.
in
level.
the
main
more
type
of
the
can
be
done
mitigate
injustices imposed by
depreciating dollar?
eficiaries
can
to
of
life
a
slowly
For the ben¬
little
insurance,
be done because the value of
policies cannot be adjusted to the
declining value of the dollar. If
the
expectation
prices
produces,
of
slowly
as
days
long
price
would re¬
run
less stable, a single
or
investment,
such
the
as
savings bank account, would sat¬
isfy the two basic needs of the
investor—a
source
sickness
of
reliable
of cash
imme¬
(in the event
other
or
safe
it
misfortune)
storehouse
considerable
it
rising
should,
would
not
be
value
of
assurance
lost.
Under
single type of in¬
a
needs
still
saver
savings account or some
savings bonds to assure him cash
in
a
event of
economic recession
or
misfortune—though this need can
be diminished by unemployment
insurance and
sickness
and
acci¬
dent insurance. But under a rising
price level, a savings account or a
siavings bond is not a satisfactory
storehouse of value
loss
assures
of
because
each
principal in terms
of
purchasing power. Eventually,
the rate of interest on
savings
accounts
and
savings
of
course,
bonds
rise sufficiently to
compensate investors for the loss
may
the
in
purchasing power of their
principal. A considerable rise in
interest rates will be required and
it will take some years. In the
meantime
vestor
A
what
the
small
satisfactory
insurance
prices
may
by
fall.
rising
beneficiaries of life in¬
is mitigated by the fact
on
surance
imposed
in
ownership of
the prospect of
will
outlet for some
will be the
home. Certainly
a
depreciating dol¬
increase the at¬
a
greatly
tractiveness
of
home
ownership.
More than half of American fami¬
lies
now
"own"
their
homes
—
though about half of these homes
not
completely paid for. A few
small savers may be led by the
prospect of rising prices to buy
are
shares
of
corporations. American
corporations
need
to
increase
greatly the number of their stock¬
holders, but common stocks are
not suitable
for
savers.
most
shares
investments for most
of
vestment
Far
small
more
investors
conservatively
trusts.
As
it
suitable
are
the
run
in¬
becomes
sequently,
omy
with
be
upward,
will
not
on
suggested,
savings ac¬
and bonds may rise suffi¬
ciently to compensate for the ex¬
pected depreciation of the dollar.
Furthermore, the government may
stable price level and
a
a
Business
Man's
creeping
a
increase
soon become a galloping
Many economists believe that
general expectation of rising
prices will soon prevent the ad¬
Bookshelf
one?
the
from being slow—that more
Dollar, War Finance and Your
people will attempt to
convert their money into
goods,
that, as they do, they will ac¬
celerate the rise in prices, and that
Pocket, The—A forecast of Boom
vance
and
more
this accelerated increase in prices
will cause even more people to
shift
from
to goods.
money
and
Subsequent Crash with an
explanation of the Coming Crisis
in
the
increase
verted
There
in
into
are
a creeping
prices is easily con¬
a
galloping increase.
several
for this
reasons
conclusion. In the first place, the
Bond
Market
Major
L. L. B. Angas,
570 Lexington Avenue, New York
22, N. Y.—paper—$5.00.
L.
L.
I do not believe that
B. Angas
Foreign
States,
Policy
The
—
—
of
United
the
Felix
—
Morley
—
American
Enterprise Association,
Inc., 4 East 41st Street, New York
17, N; Y.—paper—50c.
-
expectation of
a slow general rise
prices does not create the ex¬
in
any particular com¬
modity will advance. Consequent¬
the
advance
In
goods.
the
buying
of
all
second
place, the
possibility of improvements in the
quality of goods will limit the ad¬
buying of many goods —
especially durable goods. In the
third place, the buying of goods
in advance of higher prices will
be limited by incomes and the ne¬
cessity of going into debt in order
to spend more than one's income.
vance
the
In
fourth
place, buying of
goods in anticipation of higher
prices will be limited by the in¬
convenience and cost of hoarding
may
replace
lead many people to
more
quickly—
articles
say, to turn in their cars
end of four years instead of
at the
five—
but it will not lead them to hoard
How
to
Trend
of
Recognize
Stock
the
Prices
Major
Primary
weekly—
special $5 trial subscription offer
including three-color graphs of
primary indexes from
1943
to
date, basic strength graphs for
1948, 1949, 1950 and 1951, weekly
analysis reports for the next six
weeks (airmail) and newly pub¬
—
trend indexes computed
lished booklet, "Planning for Prof¬
its in the Stock Market"—Dept.
C-61,
Investors ' Research
pany,
Santa Barbara, Calif.
Investing at
nomics
of
a
Com¬
Profit—The Eco¬
Investment—Jacob
O.
Kamm—American Book Company,
55
Fifth
Avenue, New
Y.—cloth—$6.00.
N.
Life
The
of
John Maynard
R. F.
—
York
Brace and
Harrod
—
3,
Keynes,
Harcourt,
Company, 383 Madison
Avenue, New
cloth—$7.50.
York
N.
17,
Y.—
cars.
Meet the Industrial Engineer—
Finally, the expectation of
rising prices will gradually bring Brochure—Engineering Manpower
about a change in the relation¬
Committee, Dept. of Industrial
ships between, returns on various Engineering, New York University
types of assets, with returns from College of Engineering, University
so-called "inflation hedges" fall¬ Heights, New York
53, N. Y.—Free
ing and returns from savings ac¬ to businessmen on request.
counts and bonds rising, until the
>
Mobilizing Production for Na¬
advantage of shifting from dollars
real estate,
to
equities, and com¬
pretty much
elim¬
is
modities
For these
inated.
several
I do not believe that
a
reasons
widespread
expectation of slowly rising prices
bring about a galloping ad¬
vance in the price level.
tional
The
Practical
analysis of the nature of an
with slowly rising prices
indicates
that
such
advantages
as
an
well
—L.
E.
State
that
and
has
Survivors'
a
Insurance
scheme,
all, the conclusion is that
the
is
not
to
be
some
viewed
with
Arnold—
Progressive
Investing
Without
policies.
two
discussions—Baker's
ment
Invest¬
Timing, Port Huron, Mich.
Speculative
Merits of
Common
Stock Warrants—Sidney Fried—$2
—Dept. C. R. H. M. Associates, 220
Fifth Avenue, New York
or
—
send
for
free
1, N. Y.
descriptive
folder.
Standard
Oil
Company
Jersey)—A
Review—W.
net
11
&
Co.,
York 5, N.
Wage
Wall
E.
(New
Bur¬
Street,
New
Y.—paper.
Stabilization
Problems—
Supervisory Development Tech¬
niques — American Management
Association, 330 West 42nd Street,
New York 18, N. Y.—paper—$1.25.
alarm.
calls for adjustments
new
S.
mula for long-term operation—$5
for four months, or $1 for next
by changes in investment
policies to mitigate the injustices
caused by rising prices.
The prospect
and
University, Columbus
10, Ohio—cloth—$2.50.
Forecasting—Trend-following for¬
and
All in
Smart
disad¬
with an
stable price
level over the long run. The in¬
justices suffered by part of the
population from rising prices are
substantial, but they are probably
no greater than the injustices that
would be inflicted by cyclical un¬
employment in a society that was
attempting to achieve long-run
stability of prices. Much can be
done by greater use of sickness
and casualty insurance, by modi¬
fications in the Federal Old Age
in
economy
Graphic
economy
as
comparison
vantages
for
Rules
Presentation of Business Statistics
Ohio
v"
Man¬
Association,
330
West
42nd Street, New York 18, N. Y.—
paper—$1.25.
—
economy
has
Defense—American
agement
will
and
have
Con¬
econ¬
an
slowly rising price
level, the latter is to be preferred.
general
expectation. that the
long-run movement of prices will
Eventually,
I
between,
as
with
one
a
prospect that the dollar will
slowly drop in purchasing power
as
following recession.
as¬
apparent that the trend of
prices is upward, the investment
trust will grow, relative to the
savings bank and the government
savings bonds, as an outlet for the
money of millions of small savers.
more
each
prices will
xil
counts
of
however, to
rise
in¬
many cases
be¬
run
in
offset by the price drops
are
the
long
increases
creeping one? If there is
a
going to do?
savings in
lar
is
price
boom
in
goods. The expectation of higher
Pet
injustice
long be
the
prices
The small
the rate of interest
cost
that
sume
basic needs.
higher rates of interest, the divi¬
dends on policies may rise and the
The
does not rise in the
cause
XI
Is it not wrong,
vestment does not meet .these .two
small
What
the
with
of the dollar—•
average
dollar
power
slow
a
power
(and, of course, re¬
payment of debts) seem to be the
best places for his funds.
•
limit
In
assumed that the
men
put
conse¬
trusts
investors.
small
a
the
ment
for
rising prices,
be
time
ly, uncertainty with respect to the
prices of particular goods will
which his principal could be
X
the
For
problems—particularly
that
purchasing
slowly depre¬
into
later stages of expansion would
probably affect prices more than
outlets.
investment
short-term
would
private
upon
and
credit in the
quite satisfactory variety of in¬
pectation that
tighter control of bank credit and
What
should
now
Federal pen¬
less
and
upward,
expan¬
For example,
consumer
pen¬
without
the
sion of employment.
dollar
lifetime
on
be
the
The prospect of a
diate
the record of
1948, and the first half of
plainly shows. Consequently,
1950
the
difficulty. Un¬
to
out
upon
sion
theless, there
the
much
turns
small
dollar
straining booms,
in
the
of
power
greater reliance than
ified rather than relaxed." Never¬
limit
it
will
also
limit
the
drop in
prices. The government, however,
decline
quite incomplete. Consequently,
the
long-run
movement
of
prices
bargaining, but that will not
the
severity of depressions,
the
a
being, however, home ownership
and
conservatively-run
invest¬
in the value of the dollar
creases
tive
the previous boom. But if the gov¬
ernment
intervenes
actively
to
the
for
private plans, however,
if
price
in
a
Old
earnings. This means that the ad¬
justment of the pension to de¬
level in the long run is to remain
unchanged^ the
elapse.
may
selves will see the desirability of
imposing restrictions on collective
'
price
pen¬
sions have to be based
.
the
time
a
be offset by higher prices.
Hence
they believe that the unions them¬
employment. It must be conceded,
Finally, the policy of aggressive however, that the net effect of
intervention
to
halt
recessions policies
designed
to
keep
the
tends to reduce a long-run drop average amount of unemployment
in the value of the dollar, Booms close to full employment is infla¬
are usually accompanied
by a rise tionary.
in
the
draw
years
Federal
purchasing
level
strikes
are
man
without too
when
There
a
Age
and
Survivors' Insurance plan can be
for
these strikes
50
or
adjusted
doubtedly be taken to reduce the
wages.
begins to
the
tendency
money
when
During that period the purchasing
power
of the pension can drop
drastically. The pensions paid un¬
achieve at least part of their ob¬
*
he
sion, 40
jective
raising
time
his pension and
on
a
vestment
insurance.
that their members gain noth¬
ing from wage increases that must
see
vincing. It is hard to believe that bor as a whole. It will require a
Unions, which undoubtedly possess long time for them to develop a
considerable
power
to
inflict national point of view.
losses on employers, totally fail to
Some
effective steps can un¬
of
of
industry and payments be¬
when
provide
level
general
enters
savings bonds payable in
prospective pensioners
than that suffered by
on
greater
gin
over-insured.
are
offer
fixed amount of puchasing power.
Then the small saver will have
37
But
an
Gross, Rogers Adds
(Special
to
The
Financial
LOS ANGELES
Chronicle)
Calif.—Jack B.
with slowly rising prices
will have less unemployment and,
therefore,
more
output
and
a
of Gross,
higher standard of living than an
economy with a price level that
Angeles Stock Exchange.
economy
Rogers has been added to the staff
Rogers & Co., 458 South
Spring Street, members of the Los
38
The Commercial and Financial Chronicle
(1566)
be lower before
article
Markets
Whyte
views
do
expressed
A New
this
in
not
other
week's
market
aged to jolt itself awake for a
couple of days, Thursday and
Friday, thereby adding a
couple of points to the famil¬
iar average.
The net result
was a
gain of about 2M> points
the
in
potential
area of
returns
to
be
So
the
LOS ANGELES,
Calif.—Start¬
ing April 9th Floyd A. Allen of
Floyd A. Allen & Company, 650
moves
managers
debt
amount
and
to
boxing,
we
leeway
to
of
shadow-
should expect greater
on the downside
security
which
to
than
-This
customed.
prices
have
we
than
ac¬
reduce
will
been
the
attractiveness of long-term Treas¬
ury
Chart
have
readers will
in
immediately see
performance the for¬
of what is awesomely
this
mation
described
But to be
will also
as
cumstances?
the safe side they
point to the selling
on
wish to sell
Floyd A. Allen
avid follower
an
of charts this will
in
state of
a
leave you
KECA-TV
to
6:45
subjects for animated conver¬
and your
sations between you
buck
it except
on
And if
spect.
can't
You
statistician.
a
make
in retro¬
trade in
you
retrospect, you're probably
far ahead that
a
so
reading this is
complete waste of time*>
*
;
*
interesting
like
to
t
*
So what to do?
an
bonds
Channel
7
a
add to what I wrote last week
and the week before.
A
rally
juncture is nice to
see
the
1
national
what
picture
stocks will
now.
at the
12th annual dinner for
ployees
last
Friday
at
stockholders'
tion of H. A. Riecke
em¬
and
Kugler's
Board, John E.
President, Darrah E.
Parker
Financial
as
these
the
Midwest
Stock
previously
York
a
be
The
and
a
with Slayton
Market Street.
gration will be witnessed. To
to
The
SPECIAL
•
Securities
Orders Executed
on
Pacific Coast Exchanges
Members
New
New
York
Exchange
York Curb Exchange (Associate)
San
Francisco
Stock
Chicago Board of
14 Wall Street
COrtlandt 7-4150
Exchange
Trade
San Francisco—Santa
Barbara
Fresno—Santa Rosa
be
reduced, this
as
it moves
may
each
point
than
the
demand
Under
securities, balances
against
a
reduced
demand
credit from
private
Except for
the
out
for
sources.
Federal
or
the
Treasury, I cannot figure out who
will buy the
Treasury securities
OPTIONS
that
are
increase
•
rates.
even
sold against an incentive
in
private
borrowing
Prices
96,
are
themselves
low
98, 97, or
unlikely to translate
as
into
punitive cost of
a
as
sufficiently
money as
to deter
the
Jun
4
rowers.
Oct
Aug
16
287.50
lending in¬
stitutions drop out at successively
1
287.50
lower bond prices the rates asked
Admiral Radio @26
J'un
Anaconda
@40%
13
200.00
by the remaining lending institu¬
187.50
tions
U.S. P. &
18
287.50
quickly.
16
325.00
Woolen
...
May 25
Fdry@40% Jun
@34%
Amer. Seating @40
Follansbee
@22
Schenley
@35%
..
....
Subject to prior sale
May
July
July
May
or
Explanatory pamphlet
325.00
11
262.50
212.50
25
212.50
price change
on
request
THOMAS, HAAB & BOTTS
Members Put & Calls Brokers & Dealers
Association, Inc.
50
Broadway, N. Y. 4, Tel. B0
9-8470
large
mass
In
may
fact,
of
private
bor¬
as
advance
even
more
Is the experiment of attempting
.
11
commercial
deterred
to
curb
credit
open market
carried
the
this
Federal
demand
through
operations apt to be
far,
in
or
will
we
find
there
pitching
again in support of Treasury se¬
curity prices at levels not far
from
the
sition
likely
the
fear
about
Will they
security
war
to
respect
losses
private
.
to
be
from
credit?
the
answer
lend,
but
I
that
suspect
creasingly
high
will be tne
more
loan
present, only slightly
lower, or possibly slightly higher?
This question must be answered
be
dominant lactor.
securities
levels, and would
The
psychological
maturity, On the average, because
this
the character of tne bank-
is
eligible debt.
held,
are
Where longer bonds
where
the impact of
might be greatest, the
bond losses
chances
are
do
have
not
policies.
such
that
institutions
aggressive
Wnere
tne
lending
portfolio
is
long-term*
by altering the preferences:
0f buyers as between short- and
long-term securities.
:
*
At
this
headed
are
if
income
increased
gross
rapidly than is the
more
with
case
into
other
lenders.
interest
With
income
from
2%%
a
for
rate
Treasury
of them wonder
some
level is reached whether
a
will
and
not
hope
for
anJ
possibly
successive
higher levels. C
? <
to
Investors' Attitude Against
Return to 2%% Rate
Higher interest rates bring
higher lending rates to the banks,
reflected
state of. flux.:
a
long-term
bonds, and
advances
is
for
marketable
other
this
psycholog-
is
been less hurt by
and
the
people think the 2y2% rate,
made by the outstanding:
marketable bonds, is only temporarily broken. Others believe we
it
as
ciation,
security deprefind more ag¬
gressive lending policies.
moment
Some
investors
may.
determine
rates
short, and where the banker has
we
the
the
and
future
:
in
snort
other rates
element,
for
ical element is in
quite
on-
factors,
v
sl
would
lower
investment
of
outlook
to
carry
two
lty
are
rat©
the post¬
bring long-term interest rates
Commercial-bank Treasury secur-
portfolios
this
into
changed to
arithmetic
portiolios
that
held
forces
Treasury
the
as.
"natural"
that
along..
in-
the
low
as
strong dispo¬
a
Later this
era.
is
be "no."
Commercial
banks may become less willing to
was
believe
It
to
that
me
to
not
income
an
2%%, there
could
What
banks?
by
extending
seems
with
as
During the early period of ad¬
the
<
Thus, the state of mind
investors
the
on
operates adversely
rate, and the in-
now
2%%
in
crease
»
among
the
of
cost
to
money
loans,
coupled .with
high
and
higher Federal income taxes (in-
private borrowers may cause the
arithmetic of investment, as it
eluding in
applies to Treasury securities, to
become doubly adverse. Treasury
securities will appear increasingly
of
cases
increasing number
an
profits tax of
excess
an
77%), commercial banks will be
erase security depreciation
with very little if any decrease in
tneir
net
profits.
The more I
able to
think
it the less
of
able I
to
am
how private credit expansion
see
be
curbed
except as private
lending rates are increased
punitive levels such that the
to
se-
unattractive
on the basis of, lirst,
rates of return offered, and, second, their newly acquired market
risk.
;
'
btill
another
sustain
Chairman of the Federal Reserve
is
There
lot
a
appeal
by whicn individual savhave been institutionalized
oegree
last
15
years
whether
wonder
or
this
more.
will
we get the true in the future.,
Undoubtedly V Savings bonds are
I
be
as
case
in
thought of how
most for our money.
the
of
long-term rate of
a
for the
in his
v:
to
helped
factor /also
may
undergo
change. I have in mind the high
ings
Board.
factor
This
curity markets would fall outside
of the definition given by the new
interest
rate /mechanism
can
reduce the amount of credit
that
will be extended, but in so doing
desirable peacetime produc-
point.
If
of
Series
adjustment
special offering
and
bonds
G
last
be
slowed, and/or government lend-
net redemptions of all classes of
ing will take the place of private
these bonds.
May
lending.
tude
individual^ toward
tion
of
will be cancelled,
the
defense
the
As
picture
part
some
program
may
unfolds,
how-
ever,
it seems rather apparent
that swings in the rates of return
offered
by private credits may
large enough to cause in-
become
vestors
to
to
return
policy
a
wherein
autumn,
F
a
makes
one
for the sale of the
find that from July 1,
1950, through March 31, 1951, the
Treasury paid out $1.4 billion in
some
the
of
other
to
we
savings
money
bis
attiiude
is
another
atti-
similar
be
(
■
There
the
savings
toward
bonds?
may
not
;
'
thought
that
Will
be worth mentioning.
individuals
increased
the
meet
they may deem it worth
while to withhold funds from the
down
of return offered seem lower than
other words, are we
"average."
a
payments
required
in-
on
stalment credit and home buying
long-term markets when the rates -by drawing on past savings?
In
The
existence
of
a
relatively high short-term Treas-
Aug 23 425.00
@104%
@38%
Chetap & 0.. @33%
Richfeild Oil
@52
Teletype NY 1-928
Monterey—Oakland—Sacramento
total demand
Std. Oil N. J.
New York 5, N. Y.
Private Wires to Principal Offices
credit
the
Amer.
Am. Steel Fds.
Stock
though
ury
Joe K.
Chrysler
@77% Jun 14 $287.50
Republic Steel @44% Sept 18 487.50
Pure Oil
@49
Sept 26 287.50
.
Schwabacher & Co.
to
extend
private
against the sale of Treas¬
and the proceeds of sales of Treas¬
Financial
Per 100 Shares
open
managements would
circumstances, the interest
costs
on
private credits could
move up rather
quickly and keep
moving until the availability of
funds, measured by cash on hand
ern nv* ^°1#
Chronicle)
PUT
remain
of
such
ment Co., Inc., Johnston Building.
Pacific Coast
the
that has existed heretofore.
simplify it, I think stocks will Matheson is with Southern Investv-Av':-
institutions
doors
commensurately attractive rate
at
R.
W. Dowden
—
The
demand,
around to only 4,000 open doors,
may
be proportionately greater
& Co., Inc., 515
CHARLOTTE, N. C.
in sight.
reduced
_
?
(Special
Furthermore,
no.
of return.
Chronicle)
Bankston and Harold
are
cases
of
discussed
lenders.
money
restricted bonds at 99, 98, or
even lower
prices, provided they
obtain, in extending private credit,
Exchanges.
He
with Waddell &
Financial
only
can
have
In most
ury
Two With Slayton Co.
to
"No
say
willing
for
gradual disinte-
be
Even
(Special
is
answer
credit
Reed.
°
institutions
may
these
SHREVEPORT, La.—Alton
and
slam
uncommitted investable funds
no
Chronicle)
New
shut
readily available?
Street,
the
of
less
or
to lend here." That leaves
only 4,000 doors still open.
Do
has joined the staff of Cruttenden
& Co., 209 South La Salle
members
receptive to
private credit
were
of
more
doors
because
The
situation
money
CHICAGO, 111.—Fred E. Butcher
was
extension
their
With Cruttenden Co.
to
institutions, large
10,000
institutions
Vice-President, Carl F. Lutz as
Secretary,
Albert
J,
Davis
as
Treasurer, and Richard J. Hanley, Jr., as Assistant Treasurer.
(Special
bearish
a
through the sale of Treasury se¬
curities.
At
a
price of 99 or
lower, perhaps some 6,000 of these
as
Ribble
the
on
bullish factor in the
a
small, who
the
Chairman
the
of
lenders is
some
had
we
the re-elec¬
as
attitude
For example, let us sup¬
that when the support price
for Victory bonds was 100 22/32
meeting.
He also announced
this
market.
directors of the company
re-elected
at
the
annual
were
believe
have
we
nonbank
pose
that all
meantime, however,
I feel that
101,
partly that they dislike
of selling bonds below
rather than
Parker, President of H. A. Riecke
& Co., Inc., 1528 Walnut Street,
members of the Philadelphia-Bal¬
timore Stock Exchange, announced
is,
probably be higher
six months from
In the
it
they sold
100 22/32 and
partly that they are not
to
the idea
of
below-par
part of
PHILADELPHIA, Pa.—John E.
national and inter¬
our
idea
when
and
I
.hardly worth following.
With
at
It is
par
6:40
from
p.m.
102,
100.
over
H. A. Riecke Elects
an
little to
a
Treasury bonds below
losses
used
I'd
with
up
fortunately, I have
but
investments
Well, that's
question.
come
that
know
prices.
equally interesting reply. Un¬
at this
on
suspended confu¬
which is probably just
well, providing you don't;
permit that confusion to
spread * to
your
bankroll.
Double bottoms, double tops,
resistance lines, etc., are apt
We
incurred
Avenue, will give
series of talks
sion,
as
are
100 to extend private credit. This
is not solely because a loss would
be
sustained.
Many
investors
South Grand
you're
that
number of nonbank lenders do not
in their recent rise.
If
for funds
even
essentially long-term in character.
What may happen in these cir-<
that stocks have reached
zone
to investors who
them as a temporary
used
refunge,
double bottom.
a
securities
far
average
it
Treasury rate to be acceptable
be
can
Commercial Banks
of
exist
Treasury
that
credit
more
Attitude
the
increased,
was
justment to
and
made
were
Treasury bonds,:
that
is this!
increase in the average investment
return
that
caused
the
2Vz%:
vestors
appraised.
Moreover, if the recent
result
the basic rate in the market,
before the market outlook
Position
almost
it.
large shifts
tx.e
investment return of nonbank in¬
Tieasury
Secuiity Market
be enlarged beyond anything that
has
occurred
since
the
1930s.
in the industrials and the rails
duplicated
in
available from private credits may
On Television
man¬
Chapter
words, the
fluctuation
Floyd A. Allen Goes
By WALTER WHYTE=
Thursday, April 12, 1951
.
war,
with
necessarily at any
time coincide with those of the
Chronicle. They are presented as
those of the author only.]
Says—
Last
the
13
page
.
from these 2%-%
[The
s
from
higher.
Tomorrow's
Walter
Continued
they're much
.
such
rate would help to promote
a change, and the market for
long
-
ury
securities
term
Treasury
would be deprived of
a
is
change in the flow of these funds
to
the
various
-
classes
of
institu-
tions?
substan¬
A
tial number of former buyers.
There
likely to see
change in the use to which savings are
put
and
therefore a
Prospective Refunding Program
of telling in
advance what the "average" rates
Up to this point I have ignored
Federal
Reserve
operations
or
of return may be.
We might get
Treasury
analyzing the manin which the 2 % % long-term
designed
an
no
way
idea from
ner
rate
came
This
about.
one
that had existed in
ket
during
rate
the
was
mar-
period of relatively
.
policies
to
break away
that
might
prevent
be
real
any
from the 2%%
patattempted to outline
the possibilities from the assump-*
tern.
I have
At first, into accept it,
tion that the Federal Reserve
will endeavor to restrict effec"rtively the extension of private
since it meant acquiring substantial amounts of Treasury bonds
answer the question as to whether
a
low credit demand.
vestors
at
were
loath
unlivable
but
the
united front of the monetary
au-
an
thorities
return,
changed
their
point
of
view.
As
this would unduly interfere with
Treasury financings or bring about
an
undue dislocation of public
debt holdings.
We should now
give consideration to the fact that
.
time
of
ments
altered
came
credit, and without attempting to
a
private
so
went
these
on,
the require-
investors
that the 2V2
more
°?o rate be-
livable one.
investor
were
media
! the Treasury
fcecame
available in large quantities after
faces
a
substantial
refunding
When- June.
program beginning
The problems inherent
this suggest that the Federal
strive to bring about
a
in
in
may
more
or-
hn■■■
1
■
•
'•
3;
;.r
r
i
derly
■
■
„
run
credit
policy
report of
New \ork Bank.
As
matter
a
checked
tne
of Treasury
I
of Treasury
purcnases
securities during re-
From Jan.
'
•
3
Federal
through Feb.; 28,
bought net
Reserve
billion
$1.3
interest,
Reserve
cent -montns. <•'
the
of
volume
Juand 'Federal
rib
pur-
Treasury securities and
completely aioul of
oi
the
and
Treasury
acquired about $300 million fpr a
total of $1.6 billion;
"
:i
Feb.
From
the
period
the
covers
28
through April 4,
which
approximately
announcement
the
of
(1567)
;4
"
;
,
curities at
In
By OWEN ELY
ibin
of
excess
bought.net
billion and the
$1
it Treasury about $500. million for
P? total of $1.5 billion.
J
./
.
Company (an independent utility which came
of the North American
System), serves electricity to three
large interconnected areas in northern, central and southern
Illinois, with a population of 720,000 in some 271
municipalities
and other areas.
Cities served include
Belleville, Bloomington,
Centralia, etc. The company also does an extensive wholesale busi¬
out
.
Security Traders Association oi
changes may take New. York Annual Dinner at the
place in the investment practices Waldorf-Astoria Hotel.
of many institutions. An increas17
1Qtu
,
tog number may no longer buy Apnl
1951 <L#«usv,Ue' Ky>)
basic
with municipalities, utilities
and rural co-ops. Revenues are
about .79% electric and 20%
gas, with 1% from steam heating and
water.
ness
,
.
..
,
,
monetization
term
securities
debt
of
in
that
exchange
for
clude
members
01
"\ent Dealers Association of Can-
the
June
and
July maturities..
llThe. answers, without exception,
t: were they wanted nothing as
long
fi as two years, much less anything
longer, regardless of rate.
This
Cr was interesting because it seemed
U to point in the direction of the
J
"tr
state of
outlined..
.
I do
general such
>>
whether
*
f,
Ks
not know yet
how
view may be nor
change for the
a
will
it
:
on
The next thought we
had
con-
Since
5'i most
people presently assert a
preference for short-term securi-
ties, we wondered whether in a
relatively free market, this rate
^ might not decline.
A great
deal
will depend on the Federal's attitude.
If they wish to decrease the
amount of callable and maturing
securities.
Unless
regiment
we
our economy to a highly undesirable extent, the holders of
will
securities
have
its
quirements.
the rate would not decline,
It would advance.
f
■
i
;
prospective
Treasury
The
Secretary
the
of
Treasury'recently
.
announced that
Treasury to show
budgetary surplus of $3 billion
rv.'
he expected the
(-•>
a
;
by
I it
June
instead
30
of
a
deficit,
to
Abilities in the first half of
rl.
cash
deficit.
-
All
this
of
means
In the last half-of the year,
dence to the market. Even when
this is done, however, I don't see
regardless
of
Federal
problem
balance
against
higher
expendia
higher
tures and
recalling the unexpectnedly heavy cash redemptions of
I recent refundings, we rather sus-
•
'
5/pect
>'the
is
that
returns
*'
distant.
of
now
must face the
The record, particularly
Mr.
Martin's
•
With
broad
expe-
(Special
Goodbody & Cc$.
to
The
Financial
Chronicle)
securities
by the market.
coincide
to
were
strictive
-
*
term
bills,
-
credit
rate,
with
If this
a
policy, the short-
be
by Treasury
closer; to 1%%
than to IV2 %.
The Interest
In
Rate
is
for
Outlook
further
advances
o.
ST.
to
The
have
Twin City Security Traders As-
Securities
Traders
'
..
Association
^CconS^n
ronado
opens
of the
power
In
answer
(Hollywood
Beach, Fla.)
at the
a
Chronicle)
(Special
to
to
The
Financial
as
Pierce,
Fenner
&
back, they will have
to
the
guess
Joins Mann & Gould
Chronicle)
(Special
The
to
SALEM,
& Goodwin, is now af-
Financial
1951
the
over
a
a
low-cost
25 years.
dividend
outlook for
taxes
the
and
company
Mass.
—
William
Street,
(Special
N.
members
(Special
to
The
DETROIT,
Foxworth is
and
Financial
of
Mich.
now
—
(Special
Donald
L.
with Charles E.
Company,
Penobscot
The
DETROIT,
Financial
Penobscot
Detroit
Exchanges.
and
of
R.
New York
The
Financial
—
Chronicle)
Wallace
added
to
,
C.
the
L. Day & Co.,
Ill
Street, members of the
and Boston Stock Ex¬
He
was
Trusteed Funds,
previously with
Inc.'
-<
Chronicle)
Mich.—Amherst
Building,
staff
changes.
Turner is with Titus-Miller &
Beane, Building, members of the Detroit the
Stock Exchange.
to
to
BOSTON, Mass.
McElroy has been
Devonshire
Exchange.
Titus-Miller Adds
Chronicle)
R. L. Day Co. Adds
r_
Chronicle)
Creesy is with Mann & Gould, 70
With Charles E. Bailey
Charles A. Adams is with Merrill
Bailey
568 Central Avenue.
longer needs the plant in
no
Cost is amortized
question
Drive, North.
Financial
or
Illinois Power had been selling recently on the Stock
Exchange
around 3414. -The dividend is
$2.20, making the yield about 6.4%.
Washington
Lynch,
to
program.
We can't
thinks it better to play safe."
Holly¬
the Boston Stock
The
to
to 40%
go
is
struction
Investment Bankers Association
Co., 618 South Spring Street.
to
definite
wants
stockholders, Mr. Van Wyck said, "With our expansion
program and the need for raising funds I cannot see the advisabil¬
ity of raising the payment. The company has advanced its con¬
filiated with Shearson, Hammill &
PETERSBURG, Fla,
no
he
common
Gunther, Jr. have been
(Special
It
plant, 95% debt financed.
Col-
LOS ANGELES, Calif.—Howard
the staff of A. M. Kidder & Co.,
With Merrill Lynch Co.
and
need to
may
Hoffman
w
35%
no
a
mon stock is allowed.
If the AEC
few years and the companies
get it
PETRESBURG, Fla.—King- M. Reid, formerly with Walston,
Beach
sees
thought that at least a moderate amount of
become available for Illinois Power over and
requirements of the AEC, when the plant is completed.
In fixing rates, it is understood that
a return of 8%
on the com¬
at
annual
1952, but there is
around
above the
sley E. DeRosay, Jr. and Casper
400
of
now
Shearson, Hammill Adds
Chronicle)
added
the end
ratio is
best
indicated size.
cheap
umbus D£W ou*ing.
pjov# 25-30, 1951
sold before
proached by the AEC last November, the utility group developed a
plan for a 1,000,000 kwh. plant, which was later reduced to the
(Dallas, Tex.)
Club
$25 million
652,000 kwh. plant in Illinois. This is perhaps
instances of prompt cooperation between private
utilities and public agencies. In ten days after
they had been ap¬
one
Hotel.
Bond
be
The equity
joined to build
aS
Tradprs
funds to take
new
year and
higher, which he thinks would penalize stockholders.
Regarding the big atomic energy power project, "Electric
Energy, Inc.," five private utilities (including Illinois Power) have
Michigan summer
•
„
will need about $35 million
financing ($12 million this
maintain it around that level—but
Sept. 30, 1951 (Coronado Beach,
Calif)
^
•
.
to
timing.
1
Financial
The company
of the 1951-2
planned—may be increased.
They have obtained $2 million from the banks, and
increase this loan. Mr. Van Wyck has no definite financing
program in mind at this time, and he will be governed somewhat
by conditions in the security markets; some common stock will
1951 (Minneapolis,
Cn
A. M. Kidder Adds
(Special
ST.
summation, I believe that the
outlook
Barnpv
Smith,
now
may
care
wood Beach Hotel.
with
12,500,000
only projects
Pa.
pri0r
re-
made
as
inight
y
^Include
next year).
Annual Convention
was
33,000,000
17,000,000
*1954
(Philadelphia, Pa.)
fice of A. M. Kidder & Co. and
thereto
$23,000,000
1952_____
*1953
of Philadelphia Summer Outing
and Dinner at the Manufacturer!
Golf and Country Club, Oreland
Dallas
G. iStewart has become associated
with Goodbody & Co. He was
formerly with the Clearwater of-
of
bills;
both would require increased
takings of short-term marketable
Treasury
1951
Investment Traders Association
Oct. 12, 1951
CLEARWATER, Fla. —Edward
cash
offerings
Either
or
with $2.84 for 1950, despite the increase in Federal
The company has a fair-sized
rndrgin for Increase in earn¬
ings before they will encounter an excess-profits tax.
Cost of the future construction
program is estimated as follows:
dutl"| at the Plum Hollow Coun-
savings
on
over
taxes.
of
market.
This may
increased
"
v
new
a
corresponding gain. The first two months
excellent, with net income running about onelast year, but this was
partially due to the cold weather
at
which•
resetting
a
Offered
and
| notes
'of
far
form
the
the
?
in
Treasury will raise
not too
take
;
period
the
showed almost
compared
attempting to avoid sociation Annual Outing ("Operathe purchase of Treasury securi- tion Fishbite") at Gull Lake,
ties and of reversing within a June
26, 1951 (Detroit, Mich.)
short time the psychology of the
ending June 30 without new
but in so doing it would
more
or
less
squeak
through.
Treasury carrying
1951
Kentucky Utilities, the
designing the network.
larger than in 1946 and net in¬
Were 50%
(the worst since 1917) which stimulated house-heating sales of
gas.
President Van Wyck, in a recent talk before the New York
Society of Security Analysts, forecast earnings of $3.40 in 1951,
Reserve
cash,
of the
June 15,
plus
Being mindful of the desirability
third
27th
Convention
re¬
com¬
of 1951 have been
.
The Federal
year
-
Canada
of
the state of the security June 22-24,
'
:,
Minn.)
or
arkets.
markets.
get through the present fiscal
can
come
revenues
that the Federal has only a short Jasper Park Lodge,
time in which to restore confi-
suggests >that the Treasury
tures
The 1950
■
tion
own
with Central Illinois Public Service and
three companies
having cooperated in
of accepting or rejecting June 11-14, 1951 (Jasper Park,
Canada)
refunding
offerings.
The
Treasury also faces a substantial
Investment Dealers Associa¬
A will pay only 40%.
To make a rience in security dealings, greatly
long story short our analysis of strengthen the chances for suc.
Treasury receipts and expendi- cess
i!
York
of its
paid for purchased power in 1950,
Oglesby-Bloomington line went into operation in mid-March,
1951; the Bloomington to Champaign line will be ready in a month
and the
Kewanee-Galesburg line will go into operation this year.
This network was designed to tie in
closely on power interchange
Day at the Sleepy
Country
Club,
ScarboN. Y.
they
corporations are required
60% of their 1950 tax lia-
pay
rough,
New
was
The
Field
1951.
because
;; ,v
Hollow
of
of the past year, does not promote of Detroit and
wholehearted confidence in the
outcome, but the new Treasury- try Club.
Federal w or ki n g relationship,
This surplus comes about in part
!
;
annual
Club
able to generate about 85-90%
now
$3,757,000
$8,311,000 in 1948 and the amount should show a fur¬
in 1951. In addition to the new
generating system,
the company has strengthened its backbone transmission
system.
the
need of the
cash
Bond
stabilizing factor.
ther decline
choice
policy
Bearing importantly on this is
> the
preceded
a
pared with
Country Club
by dinner and
the,-,
\
that we will have solved the prob?-?.ravailability of Federal Reserve lem that arises from the necessity
.} credit, they might withhold buy- to finance a sizable amount of deH
plant
and
equipment
ing of such securities, and in this fense
event
be
Valley, in
Prior to Sept. 1, 1947 the
company generated less than 10% of
electric requirements. Due to a
large construction program,
however, it is
a
these
better between now and June..
*■')/ cerped the short-term rate.
?
exist
opinions
River
heavy in¬
dustrial load should be
specified course of action it is cocktail -party for out—of—town
difficult to get agreement ;as to guests
May 24).
i-c
when the right moment has arrived. ; It
seems
unfortunate, May 30, 1951 (Dallas, Tex.)
however, that we have moved
Dallas
Bond
Club
annua)
quite
so
precipitously
at
this Memorial
Day outing.
juncture, j- The
Treasury
will
mind regarding Treasury shortly need to refund a record June 8, 1951 (New York, N. Y.)
security investments that I have
-
differing
ever
Illinois
Decatur is referred
.
connection with
the
to as the "Soybean
Capital of the World." Coal,V
cement, oil, steel and iron products, railroad
cars, etc., are leading
products.in the area. Many colleges and State institutions of vari¬
ous kinds are located in the area.
Electric revenues in 1950 were
37% residential, 5% rural, 30%
commercial, 20% industrial and
8% miscellaneous.
Obviously, the small proportion of
a
f
m
in
Louis, and in other of the larger communities
Milling of farm products is an outstanding activity, and
served.
-
gation offered
located
are
and around East St.
Invest-
private credits may be substan- ^ dinner at the 'King Edward
tially reduced, but the availabil- *iotei.
''
; For
the year through April 4, ity of funds, through short-term
May 18, 1951 (Baltimore Md )
♦; Federal Reserve
purchases totaled Treasury securities, may increase.
Baltimorp Spn]Htv Traders As
$2.3 billion,- Treasury purchases
I am completely an
^
at
v; about $800 million and total purwith the Federal's desire to aid
at
chases $3.1 billion.
;
•
in halting inflation.
All of us the Country Club of Maryland.
'j ,
Now, having in mind the pre- have known, however, that if the May 24-25, 1951
(Dallas, Tex.)
sumed desirability of dressing up Federal d ep id e
d^ to n^ndonv,: Te
G
Investment Bank.
the market.for
Wrposes^ of the
Association Annual Meeting,
refunding operation, that is, of the par level and without full
b
giving it a more orderly appear- warning v to
Treasury
security May 25, 1951 (Cincinnati, Ohio)
?
ance, I asked some of our cus- investors, this would have an imMunicipal Bond Dealers Group
..n tomers whether .they would
like portant impact on investor psy- 0f Cincinnati annual
spring party
tffeto see a 2-, 3-, 4- or 5-year obli- chology,- I will grant that when- at the Maketewah
li
a
diversified industries
<10r°mo> panada)
,
Toronto
The basic
economy is agricultural and the service areas in¬
large proportion of the best farm lands in the State, pro¬
ducing corn, soybeans, wheat, livestock, dairy products, etc.
Many
Bond Club of Louisville Dinner
Treasury bonds with short-term
funds or with funds that are es- Meeting at the 235 Club.
sentially long-term in character,.™
q
iqt;i
/Tomntrt
rnnaria)
comes from a divestment of long-
Reserve
Illinois Power Company
Illinois Power
background is being built against
which
Utility Securities
Field
/x
The
Federal
Investment
Higher-yielding private credits if
these
are
not
acquired by the April 12, 1951 (Philadelphia, Pa.)
Treasury or the Federal.
MorePhiladelphia Securities Associaover, it is not clear as to hovy .tion. luncheon.
V,
readily and at what prices such
purchases will be made.
Thus a AWl 13, 1951 (New York City)
the
/
Public
EVENTS
to me, however, who will buy the
Treasury securities that will be
sold by otners in exchange for
2%s and the closing of. the books,
;:
COMING
It is not clear
loss.
a
39
'<
»
in private lending rates and that
tnis. will be accentuated as some
nonbank lenders decline to extend
creait by sales ,of Treasury se¬
the
between
contained in the annual
)Jtne
1
The Commercial and Financial Chronicle
.
./•■.
■'
■
,
statement, on
tne
,s
fo
■
..
.
.
fiiight require further
epages
,
•
relationship
iw wuuia
<*
,
Number 5002
y/eius. of - snort-term
Treasury
securities up to tive-year term,
This
,i
'
■
I; Volume 173
H.
Co.,
members
Midwest
of
Stock
Harris, Upham Adds
(Special
to
The
Financial
Chronicle)
DENVER, Colo.—Harrie H. Hart
has become affiliated with Harris,
Upham & Co., 740 17th Street.
.
The Commercial and Financial Chronicle
The following
Indications of Current
Indicated steel operations
Equivalent to—
ingots and castings
month ended
or
on
Previous
Month
Week
Ago
2,045,000
that date,
in
or,
gallons each)
-
—*
PETROLEUM
AMERICAN
Total
1,864,300
2,001,000
2,047,000
uomestic
Jons
'■
(bbls. of 42
production
eacht
"6,380.000
6,596,000
5,470,000
20,398.000
20,028,000
20,489,000
18,432,000
2,828,000
2,619,000
3,043,000
31
9,305,000
9,147,000
8,951,000
9,717,000
2,301,000
6,501,000
9,720,000
9,630,000
RECORD:
CONSTRUCTION
Total
31
31
141,239,000
13,285,000
13,032,000
138,209,000
12,794,000
135,586,000
12,425,000
31
43,170,000
43,626,000
47,560,000
37,282,000
37,327,000
38,068,000
41,041,000
Ibbls.)
755,435
748,804
785,867
243,647,000
Bituminous
(U. S. BUREAU OF MINES):
and lignite (tons)
702,406
742,544
of
INC.—Month
CONSUMER
All
670,064
February
PRICE
INDEX
FAMILIES
items
FOR
IN
$236,778,000
142,501,000
$414,878,000
246,377,000
$258,885,000
Feb.
163,899,000
84,277,000
168,501,000
82,285.000
94,986,000
63,891,000
57,393,000
and
SALES INDEX—FEDERAL
STORE
——
30,386,000
86,216,000
37,593,000
21,993,000
), 133,000
10,120,000
11,145,000
and
—
-
516,000
693,000
Fats
"138,500
148,500
204.4
—
——,—
RESERVE SYS¬
304
258
Mar. 31
Apr.
INDUSTRIAL)
—
301
288
136
195
153
202.0
4.131c
4.131c
$52.69
$52.69
Straits
$43.00
$28.83
97.2
...
tin
Lead
4
24.200c
24.200c
24.200c
4
24.425c
24.425c
24.425c
18.425c
4
150.000c
134.000c
181.750c
74.750c
.Apr.
4
17.000c
17.000c
17.000c
10.500c
.Apr.
-U
at
4
16.800c
16.800c
■
17.580c
.Apr. '4
,
,
MOODY'S BOND PRICES DAILY AVERAGES:
v-y
•
-J,7.5Q0c~
17.500c
:
,v
.».*»
i.
99.50
100.39'
114.46
r_:
116.41
Louis
(per
(pence
and
ounce)
„
York,
Gold
99%
St.
min.___
flask of
(per
115.82
117.80
121.25
114 85
117.00
119.82
lAntimony
113.70
115.82
Antimony
107.44
107.62
109.24
109.06
Antimony
——
refined
pound)
(per
109.42
109.24
112,00
111.81
112.37
114.08
117.40
Platinum,
115.24
115.43
117.20
120.22
tCadmium
(per
(per
(per
Cobalt,
97%
3.05
3.04
2.93
2.83
2.87
2.86
2.76
2.59
Magnesium,
.Apr. 10
Railroad Group ——.—
Public Utilities GroupIndustrials Group
_
2.91
2.80
2.66
3.09
3.10
2.97
45.280c
3.30
3.21
3.22
3.20
3.21
3.00
""Nickel
3.07
45.280c
27.882c
42.000c
42.000c
24.602c
42.500c
42.500c
25.102c
Nominal
:
Nominal
Nominal
$66,000
$90,000
$2.55000
$2.55000
$2.00000
$2.67500
$2.67500
$2.07500
$2.15000
—
ounce;
$90,000
._
—
(per
— —
$2.80000
ingot
——,
$2.10000
19.000c
19.000C
-
24.500c
24.500c
50.500c
pound)
(per
$2.80000
$2.10000
-
ingot (per pound)
plus,
•50.500C
15,201,000
11,294,000
17.433,000
12,237,000
18,215.000
—
$1.80000
17.000c
20.500c
-
40.000c
2.86
3.31
.Apr. 10
•
2.91
.Apr. 10
:
$35,000
$71,000
—
Aluminum, 99%
.Apr. 10
Aa
$35,000
$215,273
pound)—
2.29
74.694c
181,716c
$35,000
$217,333
pound 1
.Apr. 10
Baa
144.808c
—
pound)-——
JCadmium
corporate
—
bulk, Laredo
in cases, LaredoAntimony (per pound), Chinese Spot—,
.Apr. 10
Average
9.94c
75.6S4C
—
(E. & M. J.)
112.19
2.47
17.500c
182.716c
pounds)
76
(per pound),
2.53
63.957d
$2.79750
17.500c
(per pound)
Apr. 10
2.54
73.098c
78.500d
$2.80000
145.808c
111.25
.Apr. 10
10.763c
■
78.500d
Louis
U. S. price)
(per ounce
Quicksilver
AVERAGES:
90.160C
10.963c
y
$2.80000
_
Straits
York
:Apr. 10
Government Bonds
8.
16.800c
Sterling Exchange—
wound)—East
'oer
§Cadmium
U.
18.425c
17.000c
90.160c
—
ounce)
per
.Apr. 10
MOODY'S BOND YIELD DAILY
18.200c
16.800c
(Check)
111.44
.Apr. 10
24.200c
24.425c
17.000c
_*
^
115.63
.
Railroad Group
Public Utilities Group
Industrials Group
24.200c
24.425c
;
114.85
——
11151,517
QUOTATIONS)—
n*
.Apr. 10
Baa
1! 113,534,927
55,127
(per pound)—
§§New
102.80
112.37
H 1135,82^
3.723,054
Sterling Exchange—
New
•
99.34
J.
111175,583
1111199,307
36,175
3,369,750
M.
&
81,712
199,818
35,722
York
New
St.
and
Silver
Zinc
112.19
(E.
-Apr. 10
.
155:1
59,726
-Apr. 10
Aaa
Aa
185.2
162.1
80,395
(in fine ounces)
Sterling Exchange
10.500c
.Apr. 10
corporate
207.4
167,367
(in short tons)
Silver, London
10.300c
16.800c
"
f »
-Apr. 10
Government Bonds
8.
145,5
—
tons)
Silver, New Yorx
'
U.
MINES)
tons)
(per pound)—
Silver
Tin
Average
OF
refinery
Electrolytic export refinery—
18.200c
.Apr.
at
at
at—
(St. Louis)
Apr.
short
short
Common,
.Apr.
(East St. Louis)
Zinc
(in
Common,
York)
(New
(BUREAU
96.9
192.5
152.0
209.7
-
97.2
202.3
152.8
Copper (per pound)—
Electrolytic domestic
(E, & M. J. QUOTATIONS):
(New York)
Lead
140.1
States:
(in
PRICES
Lead
.
129.7
143.3
Average for month of March:
$46.38
$43.00
4.131c
3
3
Electrolytic copperDomestic refinery at
Export refinery at
184.9
133.2
143.9
(in fine ounces)
Zinc
3.837c
$52 69
$43.00
3
Apr.
198.5
of January:
production of recoverable metals in the
Silver
203
PRICES:
Apr.
133.6
178.0
163.2
furnishings
Copper
'
Apr.
303.3
171.5
185.6
204.5
OUTPUT
Gold
5
Pig iron (per gross ton)
Scrap steel (per gross ton)
340.6
186.0
———■:
House
5,897,831
6,794,517
6,767,344
,735,844
DUN & BRAD-
Finished steel (per lb.)
199.3
176.5
—
—
'.
fuels
Ice
METAL
140.B
214.1
134.0
Other
METAL
METAL PRICES
183.6
191.5
Month
7
APr-
IRON AGE COMPOSITE
169:1
220.2
342.7
;
;
:
———*.u"'
United
AND
(COMMERCIAL
202.6
194.9
'
electricity and refrigerator
Gas and electricity
89,100
STREET, INC.
265,5
224.3
oils—
and
Clothing
Lead
FAILURES
185.4
271.2
1
vegetables—
Eeverages
1,031,000
133,800
(in OOo kwh.)
181.5
221.9
187.1
—.
Sugar and sweets—
12,197,000
539,000
EDISON ELECTRIC INSTITUTE:
output
167.9
183.8
-
—.
products
Mine
Electric
7,736
15:
T—
bakery products
Fruits
164,795,000
87,824,000
65,831,000
Mar. 31
TEM—1935-39 AVERAGE—100
•8,515
226.0
„
Miscellaneous
DEPARTMENT
10,662,000
CITIES—
of
as
All foods
$252,619,000
Mar. 31
(tons).-
204,429,000
20,229,000
MODERATE
LARGE
:
—
Cereals
„Mar. 31
coal
244,930,000
v
(bbls.)__
Fuel,
Pennsylvania anthracite
Beehive coke (tons)
15,102,000
10,959,000
export
———
stocks
Rent
COAL OUTPUT
13,746,000
BUSINESS INCORPORATIONS (NEW) IN THE
UNITED STATES—DUN & BRADSTREET,
720,404
703,308
Apr.
Apr.
Apr.
Federal
14,958,000
179.8
Apr.
construction
State and municipal
16,438,000
6,590
—
Dairy
Apr.
construction
S.
U.
Private construction
21,000
15,472,000
—
38,532,000
31
31
;
■
Public
15,095,000
5,000
12,793,000
(bbls.)
imports
Decrease—all
ENGINEERING NEWS-
—
152,590,000
17,236,000
7,922,000
142,186,000
oil
Meats.
CIVIL ENGINEERING
167,706,000
177,276,000
17,305,000
:
Refined products imports (bbls.)—
Indicated consumption domestic and
116.381,000
Mar. 31
Mar. 31
freight loaded (number of cars).——;—
—;
Revenue freight received from connections (number of cars)
194,517,000
183,110,000
—
Crude
1935-1949=100—Adjusted
Revenue
Ago
200,424,000
-
-
4,872,950
INCOME
'
Year
Month
gal-
42
(bbls.)
6,016,350
RAILROADS:
ASSOCIATION OF AMERICAN
of that date:
Previous
9,000
of
(bbls.
—
6,037,500
31
31
31
Mar.
Gasoline output (bbls.)——
—
Mar.
Kerosene output (bbls.)
,—
Mar.
Gas, oil, and distillate fuel oil output (bbls.)—
.-Mar.
Residual fuel oil output (bbls.)
Mar.
Stocks at refineries, at bulk terminals, in transit and in pipe linesFinished and unfinished gasoline (bbls.) at
Mar.
Kerosene
(bbls.)
at
Mar.
Gas, oil, and distillate fuel oil (bbls.) at
Mar.
Residual fuel oil (bbls.) at
Mar.
are as
INSTITUTE—Month
6,041,400
Mar. 31
■
f
'
Month
I
97.8
Natural gasoline output (bbls.)_
Benzol output (bbls.)—
(bbls.)
to stills —daily average
Crude runs
of quotations,
cases
Domestic crude oil output
average
.
either for the
are
of January:
r
AMERICAN PETROLEUM INSTITUTE:
Crude oil and condensate output — dally
'
,
Latest
Ago
100.1
102.4
102.3
.Apr. 15
.
'
'
Year
.Apr. 15
(net tons)
production and other figures for the
cover
Dates shown in first column
month available.
Week
(percent of capacity)—
8teel
or
Latest
STEEL INSTITUTE:
AMERICAN IRON AND
statistical tabulations
)
latest week
week
Business Activity
"
Thursday, April 12, 1951
...
(1568)
40
u
.Apr. 10
3.05
3.04
2.95
2.89'
2.88
2.79
(BUREAU OF MINES)—
Month of February:
Production
2.78
.Apr. 10
PORTLAND CEMENT
2.64
Shipment
Stocks
(barrels)
——
__—
mills
from
(barrels)
.
month—barrels)
Capacity used
518.8
522.1
524.2
257,563
188,865
345,004
223,429
Mar. 31
236,532
247,911
245,830
203,668
MOODY'S COMMODITY INDEX
Apr. 10
■NATIONAL PAPERBOARD ASSOCIATION:
Orders received (tons)
:
Production (tons)
RAILROAD
13,115,000
9,824,000
Mar. 31
at
98
105
105
EARNINGS
704,936
687,931
758,562
OF
—
CLASS
Total operating expenses
Operating ratio-per cent
371,805
-
-
Apr.
-
154.3
6
154.4
154.1
railway
income
after
121.2
REAL
LOT
DEALERS
AND
SPECIALISTS
ON
EXCHANGE
THE
N.
Y.
<
short
sales
other
Dollar value
sales-
charges
U.
IN
tt3,000,000
56,000,000
$391,574
$375,716
$308,052
662,756
1,173,540
$50,552,440
$37,903,344
921,896
$39,296,060
20,737
33,794
29,026
35,434
317
.465
273
28,753
814,516
996,888
Mar. 24
•
,
17,660
966,344
10,144
CORPORATION
(000's omitted):
151,254
804,372
$23,049,104
$40,109,761
$33,621,857
155,870
280,410
244,690
'.—
228,280
————
342,150
U. S.
—
178,195
$1,024,000
GOVT. STATUTOR.Y DEBT LIMITATION
,
.
As of March 31 (000's omitted):
face amount that may be outstanding
«■
$275,000,000
$275,000,000
$275,000,000
254,997,006
255,940,679
j
255,723,520
20,637
17,515
23,663
$255,017,643
$255,958,195
$255,747,18^3
692,885
696,692
734,461
outstanding
$254,324,758
Balance face amount of obligations, issu¬
able under above authority——20,675,241
$255,261,502
$255,012,722
19,738,497
19,987,277
at
any
time
—
————-
public debt——:
Guaranteed obligations not owned by
■Treasury
— r———;
Total
Mar. 24
_
i^ar< 24
155^870
2~80~,410
244~,690
342450
.Mar. 24
;
—
279,640
424,470
290,040
275,030
_
gross
the
purchases by dealers—
U.
Total
gross
public debt and
guaranteed
obligations
outstanding public debt obli¬
Deduct—Other
S. DEPT. OF LABOR—
gations not subject to debt limitation
All commodities
:
Livestock
"IIIIIII
—
:
Meats —4-.-
lighting
materials
;
Metals and metal .products
Building
~
.
and allied products
♦Revised figure.
201.8
fNot available,
152.5
183.5
203.8
202.3
188.3
187.5
168.0
269.0
273.6
266.9
193.8
Apr. 3
186.1
187.3
188.9
155.2
274.4
275.4
273.8
212.1
172.1
172.3
171.8
146.3
182.8
136.8
Apr. 3
.
Apr. 3
.
~
Grand
158.6
188.5
.
184.5
185.1
139.0
139.0
138.6
131;4
189.8
189.3
190.7
168.5
Apr. 3
227.5
•227.5
226.9
194.9
Apr. 3
358.9
358.9
357.6
t
145.3
145.5
148.7
.Apr. 3
,
"
—1~—~~II
materials
Lumber
Chemicals
183.9
Apr. 3,
Apr. 3
Apr. 3
—
"*"""
All commodities other than .farm and foods
Textile products
—J.
—
and
183.3
.Apr. 3
Farm products
Grains
...
$1,320,895
Total
_
«
188,234
234,466
35,140
1926=100:
Fuel
214,863
64,593
163,713
Outstanding—
;
WHOLESALE PRICES NEW SERIES
,
92,715
$1,331,083
.
Number of shares—
■
94,584
277,178
78,141
201,511
Miscellaneous lending institutions——
965,956
$36,845,440
Mar. 24
152,586
280,323
——
10,932
.Mar. 24
—
33,329
984,004
12,087
552,046
Mar. 24
.
20,420
564,133
Mar. 24
—
85.67%
SAVINGS
S. —FEDERAL
INSURANCE
294
.-Mar. 24
——
501,117,846
76.03%
NONFARM
-
—
Round-lot sales by dealers—
Number of shares—Total sales—
Round-lot
77.690.911
——
Individuals
—.
sales
18,958,787
$55,582,342
14,772,248
178,000,000
Savings and loan associations
Insurance: companies
—■—*
Bank and. trust,^companies—————_—
Mutual savings banks
30,362
$27,596,790
Mar. 24
._
Number of shares—Total sales
Customers' short sales
Other sales
31,129
873,386
.-Mar. 24
sales
other
Short
40,423
Mar. 24
Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales
Customers'
23,117
Mar. 24
Customers'
$109,414,627
——
Mar. 24
-
Customers'
$584,927/686
645,246,272
—
before charges
(est,)
FINANCING
—Month of January
Number of shares
i
OF
LOAN
AND
STOCK
COMMISSION:
Odd-lot sales by dealers (customers'purchases)—
Number of orders
Dollar value
ESTATE
AREAS
STOCK TRANSACTIONS FOR THE ODD-LOT ACCOUNT OF ODDEXCHANGE—SECURITIES
$848,728,726
610,060,029
85.23%
—
operating Income
Net
OIL, PAINT AND DRUG REPORTER PRICE INDEX- -1926-36
—
RRS.)
;
Net
AVER AGE=100
$715,758,861
ROADS
I
AMERICAN
Month of February:
Total operating revenues————
•
92
Mar. 31
Percentage of activityUnfilled orders (tons)
79%
76%
—
(ASSOCIATION
——
-
22,129,000
360.$
Mar. 31
of
end
23,583.000
67%
$71,478,680
(at
—Apr. 3
.
Apr. 3
,
.._Apr. 3
^Includes 490,000 barrels of foreign
rude runs.
ZINC
of February:
Production
.
(short tons)——
Shipments
(short tons)
Stocks at end of month
'
17,122
17,537
20,360
—-'V
17,080
19,219
11,110
11,068
16,695
'
Colburne,
t
10,124
figure.
fBased on the producers'* (quotation.
tBased 011 the average' of
and platers' quotations.
§ Based on platers' quotations.
11Domestic, five
less than carload lot packed in cases, f.d.b. New York,
""F.O.B. Port
N. S., U. S. duty included.
§§fin contained,
ffMonthly average 1950.
the producers'
tons or more but
-ttDefiCit,.
"Ji
—
(short tons)—^
•Revised
J1
.
(BUREAU OF MINES) —Month
OXIDE
117.4
.
total
■
??•
;
T;
yolume 173
Number 5002
Continued
from first
.
.
The Commercial and Financial Chronicle
.
channels without a very great enlargement of the physical controls,
page
..
Experience With
Controls—Warning to U. S.
A
..
•
been
found
distrust of these physical
between
L^t "ays "and fha^been
that
it
because
fn
J rnthpr
rfift'prfnpo^
d ference
is
th
am
that
that
remnrkahie
Sit
t.
wn„u
uld
*
rpf
nf
I
i
I fancy
x
The
conscious
tratiwf
tn
onerate
ties which
It-
numbers
good
vou
must
?
j
be
had
administrators
that
®
those
n..i
argue
j,.:
i_
neonle
P_
doing no useful work before,
which is difficult, or you must
admit
that
this
will
th^pffort
weaken
is put ifao
tend
industry, and
the
on
isted
during
like
that
we
the
to rebuild the
which
ex-
good
war
out
men
trieTand awav^rom
indus-
of
other useful
work
Th.
fbJt
Sinn
T
r.Qc.n
C110«00i.
Prplt
in
ah
®
is
before
found
the
what I think has become clear
+u-
*
m
d
.
1
•
+u
i11^?
u
*
•
+
u
The
is
hiffh
as
to
seems
as
be
i(W
anf1
-
breaking of contracts,
T
«t^nLiv
f
*
consumers
erators
put
motor
or
cars,
you
can
much higher tax upon those
commodities than you would put
a
T
of
consequence
yearS 1S> flrst of al*» that lf the then
have in
you
goods which use up the special
a way embodied
one
erunaway tially in metsf™J °f the anU"trUSt 3Ct in h*
s°rtmosin^horfsu^in thelfrW 3 "ft
°£
, short supply in the early pocket.
'
outstanding
,
..
,
The
.PPnt
,,
the most
and
that
nf
nf
is
rn.ircp
nsa>. t e"
of course, stages of rearmament. In fact, of
j k
th
possibmty that con_
or genera! incomes c^rse,
TsTTrv £roIle''s wiUi" £aa£ d« what the
automatically a larger
A
a.
? market would do in setting the
the
inr-nmn
reason,
.
section of the taxpayers
higher
topical matter, I gather, since I
pass
into
ffrorW
taY
nov
recent case of that, of course is the higher income tax grades,
this
to
came
COUntrV—is
taxa-
a
to this country-is a taxa-
the attempt on the part of the
pay
a very much larger proportion of tlon
British Government to buv abroad
their increased income in taxation,
our
and therefore
back all
tial
country brings in substanfunds,
easy
to collect in
the
the
forms
British Government to buy abroad their increased income in taxation,
food at
world
lower than existing
prices
prices.
The
consequence
been> of course, that though
the
time to
are passing
the
government
gambling.
on
in
That
which
it
m
has
matically take money out of the
The same sort of difficulty is pockets of the people in the form
to be encountered because through 0f taxation and hand it back to
through some mistake in the rel- the government.
ative prices of milk and meat we
Well, what the consequence of
have got finally out of balance m that will be I don't know. Clearly
the production of those two com- it does mean that there is a greater
temptation
the
on
part
of
any
Th? third advantage, as I see
lt'
f purchaf tax is that it
probably has a less serious effect
on incentive, and that is a point
very
success
Chancellor
of
of
credit
that
for
both
in
understanding the problem and in
being
the
thev
enough to apply
courageous
which
measures
these
the
to
were
painful
as
had
taxpayers
important
very
conse-
quences.
reason
unionists,
from that I think the
that the British trade
was
particularly
and
British
trade
showed
in
union
those
statesmanlike
two
quality,
the
leaders,
years
sense
a
of
a;
ot
of
prepared to accept
voluntarily this virtual standstill
enabled the
wages which
in
econ-
I say, certainly last September, to be brought irrto some-
omy
as
thing of
a
balance.
that
have
we
that
we
the rest of the economy to work
There
us
a
the
problem to a much greater extent
the general fiscal and
through
monetary
be
the
devices
case
Material*
"strategic"
a
not sure from our
experience in Great Britain that
Now>
j
am
there is any
such thing as a stratacnf
inatprial
mst. as
T
am
ouite
gjc material, just as I am quite
for instance that there is no
sure
■
thing
such
on a
the
as
than seems to
the vast ma-
among
jority of the people in this
coun-
try.
*
Rut
wp
*
A Tax Suggestion
I would like to
say
locomotive.
essential
thing about an
is that it is a systhat at any one moment any
article may become strategic,
economic system
tem
The third
to
me
we
reason
are
why it
reluctant
controls to too wide
course,
the
that
many
in
general
ways
a
to
our
The
controlled
economy
has
dis-
^
-fi**"»/»__
^
requirements
^
uiiwiiviiw
ZL wVZlZ
be
foun(j
for
balancing
the
amoun^s tbat buyers are ready te
b
^ sellers are ready to offer,
Allocations
'
and
■
Rationing
Wasteful
The
can
^
methods
that
long period
are
other
only
be used over
^
1
^
U1
K
.
a
^
*££%
S®es
into the pockets of people,
have
to
buy, yet there is a psyin
influence
encourag-
advantage
fourth
The
of
our
impractical administratively, and
dangerous politically...
But
such
above
all
a
nation
using
controls frequently and ex¬
tensively cannot very long remaia
a free nation.
Dillon, Read Group
Offers Gelanese Stock
is that it is exDillon, Read & Co. Inc. heads
tremely;flexible.
I have'always a nation-wide
group of 201 in¬
had my doubts as to whether vestment
banking firms which is
est you. If you are looking for it was really necessary to
underwriting the offering by Celforms of taxation, the best have a full budget only once anese Corp. of America of 1,000,-
thing. ^0U C£Ln.
Is to \ook at the
successful
the taxpayers, and I grieve
perhaps to say that Great Britain
one'of
ic
r»no
thncn
those.
'
practicable.
£e"purc'haSe
^ay^be
budget
But the essence of
tax is'that iY can be
j.
._j
changed almost at
raise
a
f
t"
one
is
additional
a
day's notice.
pur
llt
o
be looked at carefully if
to
I think that in certain
year.
_i
We have in Great Britain
anxious
9
tax
the"screw or^alf-yearly"
putting
upon
is
purchase
taxa-
tion, and that is my presupposition, witli a minimum of hardship.
chas°Vx.e If ^ ifcarted
in
normal peacetimes, it inta^-s
on
wTth'the
consumer's choice. It puts
the
fato
of
hands
machin!ry
the
state
the
for dictating what peo-
000 shares of new 4J/2%
converti-
ble preferred stock, $100 par.
^
nn
issued
the
^m^^tocThoWerstt
to common StOCKliOiaeiS
rate
0f
6/35th of a share for
each share of common stock held
on April 11. The subscription
price, $100 per share is payabta
111 caf or..m
second Preferred stock which the
will accept at $150 per
that no one can bnow beforehand
buy.
share.
wbat the
We
commodity
certain administrative difficulties connected
taxes do in fact give us almost as
with the value of stocks in shops,
strategic articles will be,
econ-
by picking at certain points
is bound to fail.
.
At the moment, for example,. I
am
prepared
to
that
argue
the
have heavy
and
beer,
much
as
thinking
taxes
and
our
our
income
which
you
of
call
imposed
was
tobacco
I
tax.
particularly
chase tax, what
tax,
on
am
a
pur-
a
sales
during
strategic material in Great Britain
the
is meat, not iron
sul-
I think operated surprisingly sue-
phur, but sufficient food to maintain the energy of the people in
the tasks that they have set themselves.
cessfully both during the war and
since.
The purchase tax is a descriminating tax. It involves a differen-
or
steel
or
wqr
We have got other cases of the tial rate
same
sort which lead to that same
evitably
control
nre-
are
+Via
in rf
company
apply
system has failed.
changed
to
pie will buv and what they won't
lesson.
is, of
recognition
of
^
if prices
vtAitfr*vvYi
performing the func¬
adapting the productiva
Of course, we have very heavy
taxes on commodities in general,
one
seems
scale
tion
jike,
materials, the direction of labor,
and the rationing of consumer
goods. These, I submit, are wasteful economically. They are largely
effprts'
ing people to work to get goods,
and
which
on
the whole
'
rw™i
Cvcfom
w*c
Control System Has Failed
vented from
system
_W. 8
carefully in a period when we are
asking people to put forth greater
something
....
strategic chase lax whjch l think
one
omy
meas-
nrippQ
picking on strategic points, of about a special kind of tax which
having special sorts of controls for we have in Great Britain, some
strategic materials, and leaving of the details of which may inter-
freely'
■Pvrvyv*
,
1 do not
A,_
pos_
wages
administrative allocations of raw
etiological
Conference, about the possibility
simplify the control of the
handle
can
f^t^w t£f wT5
p
higher
good deal ot
the feeling
to apply the right
courageously
gives
belief
a
courageous
been
enough
ures
system.
been
and< }n consequence, to attempt to
think that having
I
has
talk today, for instance, im this
^ha?!n ia'ttan mrmera?rtnfnlncgnn- wheel
what inflation meant, and in conThe
sequence were
tne
of
*
Theie
I<5
But apart
rK^^inropun^
the
Exchequer at that time, Sir Stafford Cripps, must take a great
deal
whole
Hr^pppH
form
shall
vnnr^plf
finHind
xxrithnut
lul effort to eliminate inflationary
influences from the system.
Hence
sibilitv
.
and
as a
clearly have to look at
v
tsn&js
nriPpq
M
is imposed at just the points where
Briti,sl1 Government thought level.
tbfy coald fix Prices, the foreign
That is to say, in some ways it flrst
' People aJ"e Prepared
s^llers baJe different ideas about might be possible to finance the to. pay
taxes, and, secondly,
'
w
e conseQuence that British rearmament by allowing wber®
does least harm to the
the supplies of food tended to prices to rise, which would auto- ec^° ^aaaa^y33ta "
too.
.
11801 ,P•
d thj
been imposed, and, of course, it ac" thev wilTbe &iT thevTre con^
consequences of the higher price
vear
the
Assistant
Attorney General is present with
safeguard against
T
think
stances.
on
the
tn
I
from rising sufficiently to
wages
conform with the changed circula¬
the general range of things.
while I do not wish to fall into
high taxation, as I see it, is this— That discrimination can be exer- ^he class of reformer, the point
if you bave very bi£h rates of fis<rd botb as regards raw ma- at jeast shows that there is no
taxation such as are now found in tenals in short supply and in re- occasion for increasing the amount
other
,
3
work out devices which
can
purposes
inSntinnirv
1 think there is a growing Chancellor of the Exchequer, harlt probab}y has.
?. serl?u®
than
think i« !nnrfri hPi
ht knowledge, certainly among the assed in finding his way between ^cts up01n inpCeo^Jce_ wai1c^ IvlP
1 tvA
l^t ^ntpmhir H better-informed section of the his need for maintaining incen- fax, P31^'
takes the tao previouT
community, that it is very diffi- lives and his reluctance to impose ^ tZTZZ It part
te-"
the wnolc
they
«£*J?erien^fa the'Tasf?en f"!13"' 3nd " they g° al?ng ^ ZZ hta^tax- ^oonYose °£ SUC'h reStr3in,tS' eVf,"
experiences 01 tne last ten
progressiveness in taxation, can Put higher taxes upon those in a r00m where the
Slhivo altl
'!Aamodifies,
on
wUhhiawym^so^fhfae?\im0nsur1
of the
The second qualification has to
state.
do with the existence of restraints
So, for example, if you want to on a large scale and of a private
discourage the purchase of refrig- character which keep prices and
PliminatP
find
.
insure the
it is necessary to
en
^hen it isof contracts. insure the
necessary to
making
extremely
an
resources
tion has been reached.
in
elsewhere
Policy Is Destructive
dis-
i<=
-00? wh™uP want °to X£t areVss citrate than the devices
from the
in of wage and price control.
general opinion, I suspect in
political parties that that posi-
ap
that
or
taxation
u^W^ceUustai ywftaxatiot SVstem ina^neHod of Jearm
a
that
world.
are
of
think
scale
the
to
oranythfag
scale, then we will be
drawing
which
e'en e^a what has
th
very conscious, I
fact that if we try
controls
we
tnan
it
caset3
that
™
industry
industry
the
criminative. For example, in some
now seem
we
Present Economic
have
™ScurUPSetS ^ dlslocatlons ,«• thai.if prices
community to
control, then either
were
Secondly
of
reached tbe point at which general to the
wrongly' the? a11 j,S ,o£ ™ost inflation. The
from the rest of the
of
The first is that
substantial
moving
task
,
vou
and if
rare
contemplfa^
the
.
quail- Ih^I^^^pricea arTtoected in
individual prices are directed mate
with
men
uo
uses
expected is
^~"
generally sneaking
are
of
necessary
oomnlicated
rather
communftv
anv
a
01
not
were
otherwise
highly progressive taxation.
ours
results which
^
adminis-
if
controls
numberTof
large
of
which
a
of
of
nmain
Britain
the kind
labor
svstem
in
ureal
Great
111
in
of
and
economy
some
the nationalization schemes further taxation could probably
CJ
J L
^
f
only be imp°sed at a cost of re+r-ta+ advantatoes efficient not con~ ducing incentives. There seems to
a£d do way of
stitute
more
+
which
as
I understand
these: First of all, of
I think we are much more
shortage
..
a
are
course,
.
.
organizing
Obstacles
reasons,
them,
^
1 tfnnaHvatinneirheme«! t0 have
*
Administrative
which
.
V
.
th
wishful thiiS I
niireiv
eneafTPH
j
unless
your
seems to me a
regressive taxes in
some
systems
7
Continued from page
There
virtue in
the
controls
cninWinroc' L thl pIL!
like this.
,
interesting difference
•
n
course, that our level of taxation
experiments, and, finally, fa general is verv much higher
serious difficulties over our thanyoum. That",! think,"hasTad
food supplies cumulating in the tw0 results, or at least two im-
lonial
there would
much greater
a
*
i
u
j.i_
,
I think
on.
so
have
second
which leads to
_
and
,T.
rate of tax per unit. I think that
is a possible advantage at a time
British Taxation Higher
Britain's
41
(1569)
Control
you
thing and infind through the conone
stant movement of
the
economic
system seeking to adjust itself to
on 3 very wide range
commodities
very
substantial
The
as
am
I
and
merits
see
of
it—and
putting the
changing circumstances, that you strongly than I
are
dragged into a wider and believe
it—are
wider range of control.
So that
on
it
revenue,
a
in
brings
of
a
y
know
j
there
are
preferred stock m exchange
for 7% preferred stock on the
taxes then I
basis of IV2 shares of the new
ence
in Great Britain in the use preferred stock for each share of
0f the purchase tax is something 7% preferred stock,
that ought to be looked at quite
Both the subscription offer and
carefully.
the exchange offer will expire on
jyiy only other point, while I April 25 at 3 p.m. (EST),
if
but
am
you
speaking, is perhaps an entire-
jy frivolous one, but I do suggest
that if you are
g00d
a
case
a
moment
I
rather more
think I myself
precisely
those
new
looking for new
suggest the experi-
are
thinking of another
tax, the best kind of tax is
bigh rate of interest.
y
.7-'
Joins
(Special
F. O. Breitengross Now
A. C. Allyn Staff
to
The
Financial
MILWAUKEE,
Chronicle)
Wis.—Glenn
C.
the
staff of A. C. Allyn & Co., First
Wisconsin National Bank Bldg.
Petersen
purchase tax,
for
Subject to the subscription ojfer, the company is offering the
has
been
added
to
With the Marshall Co.
(Special
to
The
Financial
Chronicle)
MILWAUKEE, Wis. — Fremont
qualities which have already been
referred to in one of the papers O. Breitengross has become assobefore us as the defects of the ciated with the
Marshall Com-
Now
a
Corporation
Stanley Pelz & Co., 40
Exchange
Place, Lew \ork City, *s now
repute than it now finds itself in. that there will be a determined atdoing business as^ a corporati n.
That is due, of course, to matters tempt in the budget to do as much'sales tax.^
n-.'-L.j/ -yky;
pany, 765 North Water Street. He Officers are Stanley rez, p
"
on
which I needn't enlarge—the as is possible by higher taxes and
' First'of all, the purchase tax is Was formerly with Paine, Webber, dent; Rab^y
z-ipp, vie -p'
*
series
of
stupendous
economic other financial devices to guide regressive, that is to1 say, people, Jackson & Curtis and in the past dent; and Edwin Jacoos, s c
aryblunders, the losses on our co- the system along the necessary poor and rich alike, pay the same was with Paul H. Davis & Co.
treasurer.
never
fallen
into
greater
that first point
my
own
guess
is
42
The Commercial and Financial Chronicle
(1570)
Alhambra
Mines
Gold
Hollywood, Calif.
Price—At
par ($1 per share). Underwriter—None.
Proceeds—For
further development of mine and for working capital.
Nov.
Corp.,
80,000 shares of common stock.
filed
1
Alhambra-Shumway Mines, Inc.
March 7 (letter of notification) 300,000 shares of common
stock (par 10 cents), to be offered to stockholders only.
Price—5 cents per share.
Underwriter—None. Proceeds
—To pay corporate expenses and obligations.
Office—
681 Market St., San Francisco 5, Calif.
American
Feb.
SINCE
for
vertible
preferred stock
class of preference
•
^
.
(5/14)..
Gas Co.
Consolidated Natural
•,
—
Halsey, Stuart & Co.; White,
Weld & Co. and Paine, Webber, Jackson & Curtis (joint- ;\
ly); Dillon, Read & Co. Inc.; Blyth & Co., Inc.; The First
Boston Corp.; Morgan Stanley & Co. Proceeds—To pur- ;
chase securities of operating companies, which will use
the funds for their construction program.
Bids—To be,r
received at office of company, 30 Rockefeller Plaza, New j.
York 20, N. Y., up to 11:30 a.m. (EDST) on May 14.
.
jbidding.
preferred
stock; offer extended from March 26 to April 30. Georgeson
&
Co. soliciting exchanges.
Statement effective
Feb. 21.
Dairy Products Corp., N. Y.
Bids—
property.
to
improvements
and
ISSUE
April 4 filed $50,000,000 of sinking fund debentures due
1976.
Underwriters
To be determined by "competitive
basis of one share of each
on
stock for each share of $6
additions
J
ADDITIONS
PREVIOUS
Expected to be opened at noon (EDT) on May 1.
convertible
preference stock (no par) and 144,151 shares of $3 cumu¬
lative second preference stock (no par), together with
voting trust certificates representing the same, offered
in exchange for 144,151 shares of $6 cumulative con¬
Burlington Mills Corp.
5 filed 300,000 shares of convertible preference
filed
16
Registration
Brown Co., Berlin, N. H.
' "/
Jan. 25 filed 144,151 shares of $5 cumulative
Thursday, April 12, 1951
.
INDICATES
•
Now in
Securities
..
Probable bidders
300,000 shares of preferred stock (par $4)
and 390,000 shares of common stock (par 10 cents) to be
March
offered in units of
share of preferred and 1.3 shares
Price—$5 per unit. Underwriters—
Emanuel, Deetjen & Co. and Barrett Herrick & Co., Inc.,
stock
(par $100). Price—To be supplied by amendment.
Underwriter—Kidder,
Peabody
&
Co.,
New York.
Proceeds—For additions and improvements to plant and
offered in exchange for 200,000
both of New York.
equipment. Offering date postponed.
of
of
one
stock.
common
indebtedness
and
Proceeds—To
for
working
pected before end of April.
acquire plant, to pay
capital.
Offering—Ex¬
American Gas & Electric Co.
Feb. 28 filed 339,674 shares of common stock (par $10),
offered to common stockholders of record March 30,
1951, on basis of
gether with an
oversubscription privilege; rights to
expire April 17. Price—$52.25 per share. Underwriters
—None. Proceeds—To be invested in equity securities of
operating sugsidiaries as part of the System's plan for
financing its large construction program. Statement ef¬
fective March 19.
American Television
~
&
Radio
Co.
(4/16)
March 30
(letter of notification) 200,000 shares of com¬
stock (par 50 cents).
Price—$1.50 per share. Un¬
mon
derwriter—George F. Breen of New York. .Proceeds—
For working capital.
Office—300 E. Fourth Street, St.
Paul 1, Minn.
Arden Farms
Co., Phoenix, Ariz.
March 22 (letter of notification) 10,000 shares of pre¬
ferred stock
(par $25) and 10,000 shares of common
stock (par $5) to be offered in units of one share of«
each class of stock. Price—$30 per unit. Underwriter—
None.
Proceeds
For working capital.
Office — 415
North Ninth Avenue, Phoenix, Ariz.
Offering — Not
made publicly.
—
?
Artloom Carpet Co., Inc.
.
(4/25)
March 27 filed 78,556 shares of common stock (no
to be offered to common stockholders of record
par),
April
25 on basis of one share for each four shares held, with
oversubscription privileges.
Price—$10 per, share. Un¬
derwriter—None.
Porceeds—For working capital.
Atlantic Oil
Nov. 13
„
Corp., Tulsa, Okla.
(letter of notification )w 48,046 shares of capital
stock.
Price—At par ($5 per share). Underwriter—Con¬
tinental Corp., Tulsa, Okla.
Proceeds—To purchase oil
Calcasieu
March
Paper Co.,
Inc., Elizabeth, La.
23,333 shares of com¬
■
writers—Lee
Centennial
Oil
Central
Louisiana Electric
—Ninth
Gulf
Atlas
Powder
Co.
April 5
stock
•
(par
and
Atomic
Market
Streets, Wilmington, Del.
Instrument
Co., Cambridge,
Beaute' Vues
mon
(no par).
Price—$5
Proceeds—For
San
Fernando
per
corporate
share.
Underwriter
purposes.
Office—
Road, North Burbank, Calif.
shares
stock.
shares held; rights to expire April 15.
share.
Underwriter—F. S. Yantis &
111.
each
three
Price—$12.50
per
Co., Inc., Chicago,
Proceeds—To
acquire stock of Zenite Metal Corp.
Statement effective April 3.
BSlf'S1 .Si,ver Mines Co., Salt Lake
March 2
™
City, Utah
(letter of notification) 1,633,124 shares of com¬
being offered for subscription by stockholders
of record March 15,
1951, at rate of one share for each
two shares held (with an
oversubscription privilege);
rights to expire on or about April 28.
Price—At par
(10 cents per share). Underwriter—None. Proceeds—
mon
For
stock
development of
ore.
Office—218
Lake City 1, Utah.
Felt
Bldg.,
5'
,,
record
March
13.
This
May 1. The remaining 35,497 com¬
for possible future issuance
reserved
Statement effective March 12.
Chanslor
chase debentures of Statler Dallas
Co., Inc., which com-^
will construct Dallas hotel. Business—A non-profit
corporation under sponsorship of Dallas Chamber of
Commerc^ to secure construction of hotel.
'
^
,pany
1,500,000 unitsu>r voting trust certificates *
representing one share of one and two ceht par com- •/
mon stock
in 24 companies.
Price—$2 per unit. tJn- r
derwriter—None.
Proceeds—For drilling and explora- .
March 29 filed
working-capital.
Culver Corp., Chicago, III. (4/28)
filed 132,182 shares of common stock
4,818 shares are to be offered to stockholder! s
— To
stockholders
■»,
of which
127,364 shares to oublic. Price
and
Proceeds—For investments.
Cumberland Mining, Milling &
April 5
of
(letter
Salt
six
selling stockholders.
Street, San Francisco, Calif.
Office—
Chester
March
ceeds
Telephone Co., Chester, S. C.
(letter of notification) 360 shares of common
Price—$100 per share. Underwriter—None. Pro¬
For
plant Improvements.
Office — 109 Wylie
15
—
Chester, S.
Street,
Deere
&
the
offices
;
.,
•
.
••
•
Deere
Wiman, deceased).
Detroit
March
Chicago
Cleveland
Co.
;
common stock being
stockholders of record March 30,1951,
shares
850,000
common
basis of
on
Edison
filed
1
of
Price—At par ($20 per share).
writers
Proceeds
share.
Statement effective March 26.
Underwriter—Willis E. Burnside & Co., Inc., New
Proceeds—To take up option and develop prop¬
erties.
•
Dixie Fire &
6
Inc., Downsville, N. Y.
(letter of notification) 700 shares of common
expire
writer—None.
-
./
For*
construction
Under-
*
program. -
-."-'K
Casualty Co.* Greer, S. C.
•
(par $10), to be offered to stockholders of record >
March 14, 1951 (residents of South Carolina only), on#
basis of one share for each five shares held; rights to
theatre
.
—
stock
stock. Price—At par ($50 per share). Underwriter—None.
Proceeds — To
purchase and reconstruct building for
purposes.
y
(letter of notification) 6,000 shares of capital'-
March 26
Colchester Theatre,
April
None.
—
*
\
share for each 10 shares held; rights to
one
expire April 26.
York.
/*
-
-
■
Petroleums, Ltd., Toronto, Canada
March 14 filed 900,000 shares of common stock (par $1)
to be offered "as a speculation."
Price — 50 cents per
(4/18)
.
on
Under-
Price — $20 per share.
Proceeds for working capital.
May 5, 1951.
-,
Duggan's Distillers Products Corp.
1
(letter of notification) 340,000 shares of com-),
stock (par 10c).
Price—75 cents per share. Under-#
Oct.. 27
mon
be
supplied
by
amendment.
(par $5).
Underwriter—
Jersey City, N. J. Proceeds—To pay?
purchase price for building ($20,000) and for J
writer—Olds & Co.,
working capital.
through 1953.
1
—-
all
v
offering.
offered to
C.
Chevron
Cigar Corp., New York
March 9 filed 50,000 shares of cumulative preferred stock,
series of 1951 (no par). Price—To be supplied by amend¬
ment. Underwriter—Eastman, Dillon & Co., New York.
Proceeds
To prepay short-term bank loans and for
working capital. Offering date postponed.
to
v
.
(4/24)
Co.
Underwriter—Harriman Ripley & Co., ,
Proceeds—To two selling stockholders :
(Charles Deere Wiman,* President, and Mr. Wiman and i
John F. Wharton, as executors under the will of Dwight \
to
balance of
Consolidated Edison Co. of New York, Inc. (5/1)
30 filed $40,000,000 of first and refunding mort¬
March
bonds, series ;G/ due. May 1, 1981. Underwriter—To
be determined by competitive bidding. Probajble Bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.; The
First Boston Corp. Proceeds—To repay Bank loans^and
gage
v
„
,
.
-
,
Co.
;
March 22 filed 126,255
shares of common stock (no par)#
Consolidated
Private Wires
_
Inc., New York.
Proceeds—To
Polk
•"
uled for the three years
San Francisco
^
-
Processing Corp. *
notification) 100 shares of common'}
stock and
1,000 shares of 6% accumulative preferred ;
stock. Price—$100 per share. Underwriter—None. Pro-#
ceeds—To acquire mining claims and equipment. Office^
—Gunnison, Colo.
:
i
v
v
'
"
•
Dillon, Read & Co. Inc., New York. Proceeds—To defray
part of the $55,000,000 cost of further construction sched¬
Philadelphia
Underwriter
$5 and to public-at- about $6.77 per share.
—None.
Price—To
Pittsburgh
(par $5),1
Oct. 23
April 5 filed 120,000 shares of common stock (no par).#
Price—To be based tupon the market immediately prior -
Columbus & Southern Ohio Electric Co.
Boston
/
Cudahy Packing Co.
'
*
March 23 filed $10,000,000 sinking fund debentures due^
April 1, 1966. Price — To be supplied by amendment, *
Underwriter—Halsey, Stuart & Co. Inc. Proceeds—To reduce bank loans by $9,000,000, and the balance added ,
to working capital.
Offering—Date postponed.
"
,.. \
March 30 filed 200,000 shares of common-stock
New York
Trust
Cuban-Venezuelan Oil Voting
.
-
&
r
Lyon-Palace Corp., San Francisco
Feb. 6 (letter of notification) 11,111 shares of capital
stock (par $5). Price—At market (estimated at $9 per
share).
Underwriter—Hooker & Fay, San Francisco,
stock.
for
of
by the company to holders of common stock
outstanding. Underwriter—None. Purpose—To ac¬
quire not less than 429,600 shares (80%) of Gulf common
of record
share
are
as
then
Black, Sivalls & Bryson, Inc., Kansas City, Mo.
March 15 filed 120,000 shares of common stock
(par $1),
to be offered for subscription
by common stockholders
one
held
sale
and
730
April 2 at rate of
share
-
Calif.
Corp., North Burbank, Calif. K
(letter of notification) 33,200 shares of com¬
stock
—None.
3333
filed
common
mon
April 19 (letter of notification) 47,700 shared of common
stock (par $1). Price—$3.87Vz per share. Underwriter—
Coffin, Betz & Co., Philadelphia, Pa. Proceeds — For
working capital. Offering—Expected April 20.
28
25
offer will expire on
Mass.
(4/20)
March
Jan.
Cosmopolitan Hotel Co. of Dallas, Tex.
,
tion expenses and
Denver, Colo.
Co.,
April 4 (letter of notification) 75,000 shares of common
stock.
Price—At par
($1 per share).
Underwriter—
None. Proceeds—To develop and deal in oil properties.
Office—4131 East 16th Avenue, Denver, Colo.
V
Geneva,
Co.,
Dec. 13 filed $1,500,000 of 2% debentures due 1965. Price
—At face value. Underwriter—None. Proceeds—To pur-
Proceeds—For general corporate pur-
Corp. of America
March 22 filed $100,000,000 of sinking fund debentures
due April 1, 1976.
Price—Plus other details, are to be
supplied by amendment. Underwriter — Dillon, Read &
Co. Inc., New York.
Proceeds — To refund $75,908,750
funded debt, for capital and additions to plants and facil¬
ities and for general corporate purposes.
Postponed
indefinitely. >
•
Electric
March 2. (letter of notification) $300,000
fund debentures due Dec. 1, 1975 (to be
poses.
Celanese
*
III.
of 6% sinking
issued ip Xiriits ^
of $100, $500 and $1,000 each). Price—91% of principal ■*,
amount.
Underwriter—Boettcher
& Co., Chicago, 111. J
Proceeds—To retire indebtedness and for working capi¬
tal. Office—715 Hamilton St., Geneva, 111.
Biscuit
Higginson Corp. and P. W. Brooks & Co.,
Inc., New York.
and
Chicago,
Inc.,
working capital and general corporate purposes.
Continental
(letter of notification) 6,000 shares of common
$20) to be offered to employees.
Price—
$32.50 per share. Proceeds—For working capital. Office
•
properties.
For
Co.^4/18-19)
March 30 filed 434,604 shares of common stock (par $1),'
of which 384,604 shares are to be offered for subscrip¬
tion by common stockholders of record about April 19
(for a 21-day standby) at rate of one share for eachtwo
shares held
(with a right of oversubscription).
The remaining 50,000 shares are to be sold to certain
employees. Price—To be supplied by amendment. Under¬
Carr-Consolidated
Harris,
&
Fairman
Gearhart, Kinnard & Otis, Inc., New York; Proceeds—,/
-V
Co., Inc. ^
250,297 shares of common stock (par $10)
and 21,480 shares of 4.5% preferred stock (par $100), of
which the preferred stock and 214,800 shares are being
offered in exchange for shares of common stock of Gulf
Public Service Co., Inc., on basis of 4/10ths of a share
of common and l/25th of a share of preferred for each
and gas
writers—Sills,
stock (par $10). Price—$15 per share. Underwriter
—None. Proceeds—To retire indebtedness and to finance
.
:
Brazil, Ind.
March 5 (letter of notification) 150,000 shares of com- .*
mon (voting) stock (par $1). Price—$2 per share. Under-, ■
mon
expansion.
*
Car-Nar-Var Corp.,
Continental
(letter of notification)
21
Statement effective March 2.
expire April 30.
Address—Box 12, Baker, Ore.
plant.
v
shares of common stock
(Consolidated now ownS \
Manufacturing." Co.
Bates
Inc., New York
Co.,
shares of capital stock (par 10 cents),
51,400 shares, or approximately 13% of the 391,500 outstanding Bates shares) on basis of 11 shares of Consoli¬
dated for 10 shares of Bafes stock.
Exchange offer to
Calby Chemical Corp., Baker, Ore.
March 19 (letter of notification) 300,000 shares of com¬
mon stock.
Price — $1 per share. Underwriter — None.
Proceeds—To construct and operate a liquid and dry ice
share for each 15 shares held, to¬
one
Consolidated Textile
Dec. 27 filed 220,000
Duke
offered
to
be
on
basis of
6,
1951,
expire
None.
Power
to
stockholders
for subscription)
share for each 10 shares held as of April'
one
with
common
an
oversubscription
privilege;
rights to
1. Price—$75 per share. Underwriter—
Proceeds—For construction program.
Statement
on
May
effective April 6.
.
Duke Power Co.
March 22 filed
*
(4/17)
•
)
$35,000,000 first and refunding mortgage
1981. Underwriter—To be determined '
by competitive bidding. Probable bidders: Halsey, Stuart'
bonds due April 1,
Volume 173
i
■
v
,
& Co.
'
'
.
Number 5002
'
'
'
'
.
.
The Commercial and Financial Chronicle
.
'
"
1
'
■
;
:,
Inc.; Morgan Stanley & Co.; Stone & Webster Se¬
Corp.; The First Boston Corp. Proceeds — For
derwriter—None.
curities
construction program.
(EST)
Bids—To be opened at 11:30 a.m.
April 17 in New York, N. Y.
on
fective April 6.
•
,
Dumont Aircraft
Fitting Co.
(letter of notification) 1,500 shares of capital
stock, of which 500 shares are to be offered for hydraulic
and fluid aircraft fittings. Price—At par ($100 per share).
Proceeds—For inventory and working capital.
•
v
and
C.
(CST)
a.m.
Co., 11:30
a.m.
Central National Corp.,
Peabody Coal Co
Noon
(CST)
Bonds
;;
Enterprises, Inc., Bluefield, W
Va., and G. H. Hecht of Washington 5, D. C. Proceeds
Illinois Central RR., noon
(CST)
Common
Hilton
Corp., Philadelphia, Pa.
Deere & Co
Common
Gulf States Utilities
writer—Corporation itself. Proceeds—For working capi¬
tal and expansion program. Office—1520 Locust Street,
Philadelphia, Pa.
-
11:30 a.m.
(4/27)
tive
stock
preferred
to
stockholders
basis of
be offered
of
24,
Corp
common
Co., to expand natural
Office—107—13th
General
Street,
gas
March 5
Co., 11:30
in
11:30 a.m.
Shoe firm.
«./
Dec.
28
filed
capital
None,, but
common
stock
it
of
The
Nisley
Co.
is
shares
of
class
B
stock
common
(par $1).
Price — To be filed by amendment. Under¬
writer—Glore, Forgan & Co., New York. Proceeds—
For working capital and general corporate
purposes.
Offering—Deferred indefinitely.
<
Globe &
Rutgers Fire Insurance Co.
(4/25)
March 30 filed 30,000 shares of prior preferred stock
(par $15). Price—To be supplied by amendment. Under¬
writers—Union Securities Corp.; Geyer & Co., and Shel¬
by Cullom Davis & Co. Proceeds—Together with other
funds, to retire presently outstanding preferred stocks.
Globe &
Rutgers Fire Insurance Co.
March 30 filed
ferred stock
for each
24
privileges.
(4/25)
10,000 shares of convertible second
(par $15)
to be
holders for subscription
common
on
offered to
basis of
one
common
pre¬
stock¬
preferred share
shares held, with oversubscription
Tri-Continental
Corp., owner of 53.4% of
stock,.. has agreed to subscribe to its pro rata
share and to purchase any shares not subscribed for
by
common
other
ment.
stockholders.
Underwriter
Price—To
—
Pfd. & Com.
19
filed
letter
a
of
notification
-.Debentures
5,
rights.
(letter of notification)
and
$5,000
each).
$250,000 of 3-year 5$
15,*1954 (in denominations of
Price—At par and interest.
Proceeds—To expand and increase
of
1951
Georgia Power Co
Bonds
Office—601—39th
Idaho
Maryland Mines Corp.
(letter of notification) 6,500 shares of com¬
(par $1). Price—At market (estimated at $2
per share). Underwriter—E. F. Hutton & Co., San Fran¬
cisco, Calif. Proceeds—To Siegfried Bechhold, the sell¬
March
27
stock
ing stockholder.
Gas Co.
June
:^
.
Inter-County Telephone & Telegraph Co.
March 12 (letter of notification) 3,000 shares of 5% cu¬
mulative preferred stock, series B.
Price—At par ($25
per share).
Underwriter—Florida Securities Corp., St.
Petersburg, Fla., and H. W. Freeman & Co., Ft. Myers,
Fla.—Proceeds—For general corporate purposes.
July 17, 1951
Inter-Mountain Telephone Co.
Mississippi Power Co
Preferred
March 16 filed 142,500 shares of common stock
being offered for subscription by
on
Alabama Power Co.—
Bonds
basis of
one
common
(par $10)
stockholders
share for each two shares held
on
March
26, 1951; rights to expire on April 26, 1951. Of the total,
64,164 shares will be purchased by twp principal stock¬
holders, to wit: Southern Bell Telephone Co. and Chesa¬
Telephone Co. of Virginia.
Price—
Underwriter—Courts & Co., Atlanta, Ga,
peake & Potomac
other
funds, to
retire presently outstanding
preferred
stocks.
*
Distilleries Co.
159,142
Feb.
$10 per share.
Proceeds—To reduce indebtedness.
Statement effective
.
Offering—Expected in April.
Glenmore
(EDT)
(EDT)_
Columbus, Ga.
expected that Smith,
Barney & Co., New York, will make a secondary offer¬
ing of aforementioned shares on behalf of the Smith
—
1951
May 14, 1951
shares
Corp., Nashville, Tenn.
exchange for
a.m.
September 11, 1951
(letter of notification) 7,500 shares of
Underwriter
their holdings of
Dealer-Manager—
production and business.
Street, Brooklyn, N. Y.
mon
a
stock (par $1) to be issued to The G. Edwin Smith Shoe
\Co.
Common
distribution system.
.,
Shoe
Bonds
Consolidated Natural
Controls
General
for
Mining Co., Wallace, Ida.
on
Underwriter—None.
volume
Bonds
May 2,
Ohio Edison
by
Co., Glendale, Calif. (4/19)
March 29 filed 50,000 shares of common stock (par $5).
Price—To be supplied by amendment.
Underwriters—
Smith, Barney & Co., New York, and Wagenseller &
Durst, Inc., Los Angeles, Calif. Proceeds—For additional
working capital.
.'/ ;
■
■;;/
exchange
Proceeds—For development of mineral
28
$1,000
(EDT)
(State of)
Telegift, Inc
held; rights expire today (April 12). Price—At par ($50
per share).
Underwriter—None.
Proceeds—From sale
of stock, together with proceeds from private sale of
$750,000 mortgage bonds to Northwestern Mutual Life
Insurance
in
share-for-share basis.
unsecured bonds due Feb.
1951
Israel
interests.
on
Feb.
Common
Noon
1951
III.
Honeybugs, Inc., Brooklyn, N. Y.
.
■
subscription
for
March
record
preferred share for each 25
one
a
company
—None.
Common
May 1,
Light Co. of Columbus (Ga.)
(letter of notification) $250,000 of 6% cumula¬
common
Chicago,
covering 2,299,000 shares of class A stock,
of which 1,875,000 shares will be issued to acquire min¬
eral rights near Mullan, Ida.; 300,000 shares to promoters
for services and to be resold for cash; and 124,000 shares
for cash. Price—At par (10 cents per share). Underwriter
Debentures
Consolidated Edison Co. of New York, Inc.
Underwriter—Founders Mutual Depositor Corp., Denver,
/ VS.;,/1
Gas
Corp.
on
Home Town
The
,
Culver
Colo.
March 9
•
Common
Preferred
April 28, 1951
plant. Business
frozen concentrate
beneficial
and
Bonds
Foote Mineral Co
Fund, Denver, Colo.
April 4 filed 3,500 systematic payment plan certificates,
200 full paid accumulative plan certificates and 200 full
certificates
Corp.,
Holeproof Hosiery Co., Milwaukee, Wis.
(letter of notification) 20,000 shares of common
stock (par $5). Price—$14 per share. Underwriter—None.
Proceeds—For working capital. Office—404 West Fowler
St., Milwaukee, Wis.
April 27, 1951
Mutual
plan
Financing indefinitely delayed.
coverage.
Dec. 7
April 26, 1951
Proceeds—To construct and equip
income
Philadelphia
Carl M. Loeb, Rhoades & Co., New York.
Bonds
Common
Wheeling Steel Corp
filed 476 shares of class A membership stock
(par $100); 801 shares of class B preferred stock (par
$100); 8,000 shares of class C stock (par $100); 2,000
shares of class C stock (par $50); an<T 4,000 shares of
class C stock (par $25). Price—At par. Underwriter—
paid
Co.,
with the SEC
March 2
Founders
(EST)
(EST)
..
•
such stock
Notes
April 25, 1951
Fosgate Citrus Concentrate Cooperative, Forest
City, Fla.
/<;/
a.m.
Insurance
Fire
Hotels
dorf-Astoria
Common
^
Co., Inc..
Globe & Rutgers Fire Insurance Co
—
form.
(EST):
Artloom Carpet
1951, for subscription at rate of one share for each ten
shares held.
Price
To be
supplied by amendment.
Underwriter—Estabrook & Co., New York. Proceeds—
For expansion program.
a
a.m.
Public Service Co. of Oklahoma
,
citrus fruit juices to
Co., 11
Monongahela Power Co., 11
Pacific Lighting Co
March 30 filed 23,206 shares of common stock (par $2.50)
to be offered to common stockholders of record April 27,
process
aggregate purchase price
an
March 30 filed 153,252 shares of common stock (par $5)
to be offered to holders of common stock of Hotel Wal¬
April 24, 1951
Lynn Gas & Electric Co
—To
liability
Common
i
stock
None.
Bids—Expected to be
April 24 for an aggregate
2
and
Atomic Instrument Co
(letter of notification) 200,000 shares of capital
(par 1 cent). Price—50 cents per share. Under-/
Co.
on
To increase capital and surplus in order to offer addi¬
tional lines of insurance, including automobile casualty
April 20, 1951
Feb. 26
Mineral
(EST)
(letter of notification) 64,000 shares of capital
stock (par $5). Price—$4.50 per share.
Underwriter—
Jenks, Kirkland & Grubbs, Philadelphia, Pa. Proceeds—
Equip. Tr. Ctfs.
Montana-Dakota Utilities Co.__
1,998,000 shares of com¬
mon stock (par 10). Price—150 per
share. Underwriter—
Tellier & Co., New York.
Proceeds—For additional
equipment and working capital.
Foote
a.m.
Hamilton
Oct.
Common
Brooklyn, N. Y. (4/16)
April 9 (letter of notification)
<"
general corporate purposes.
April 19, 1951
General Controls Co
provide working capital.
,
determined
common stock
(par $1). Price—$5 per share. Under¬
writers—Company itself in New York, and Jackson &
Co., Boston, Mass. Proceeds—For partial financing of
anticipated military contracts and for acquisition of new
manufacturing facilities. Office—80 Wall Street, New
Fork 5, N. Y.
Common
Columbus & Southern Ohio Electric Co.—Common
Underwriters—Pioneer
Securities
(4/24)
common
Gyrodyne Co. of America, Inc.
Denver & Rio Grande Western RR.
Computer Corp., Brooklyn, N. Y. '
(letter of notification) 90,000 shares of class B
non-voting common stock (par $1). Price—$3 per share
First
Underwriter—F. L.
$3,500,000.
Debentures & Pfd.
April 18, 1951
New York,
Electronic Devices,.Inc.,
of
__Bonds
Carr Consolidated Biscuit Co
2
r-To
share.
March 14 (letter of notification) 34,320 shares of class A
Electronic
Feb.
and
be
number of whole shares for
(EST)
Eastern
Corp., Bangor, Me.
April 5 (letter of notification) 2,500 shares of common
stock
(par
$10).
Price—At
market
(approximately
$19.75 per share). Underwriter — None. Proceeds — To
•
Bonds
Common
April 17, 1951
Duke Power
per
stock (no par).
by competitive bid¬
ding. Probable bidders: Merrill Lynch, Pierce, Fenner
& Beane and Lehman Brothers
(jointly); Stone & Webs¬
ter Securities Corp.
Proceeds—For new construction
received at 11
W.
Price—$5
Underwriters—To
_____Debentures
Wisconsin Power & Light Co.
11:30
par).
Gulf States Utilities Co.
March 21 filed 200,000 shares of
Common
Wyoming-Gulf Sulphur Co
for
and
Putnam & Co., Boston, Mass. Proceeds—To retire bank
loans and for capital additions.
Notes & Com.
Plywood, Inc.
Duncan, President and
Vice-President, respectively, who are the two selling
stockholders.
Statement effective April 6.
•
Common
Keep Zipper Corp
Co., Houston, Tex.
March 20 filed 150,000 shares of class A convertible com¬
mon stock
(par $2.50). Price—Expected at $9 per share.
Underwriters—Underwood, Nehaus & Co., Houston, Tex.,
and Dewar, Robertson & Pancoast, San Antonio, Tex.
H. M.
Common
Electronic Devices, Inc
Duncan Coffee
Proceeds—To
stock (no
American Television & Radio Co
Grayson-Robinson Stores, Inc.__
debt
pay
Greenwich Gas Co.
March 23 (letter of notification) 60,000 shares of common
April 16, 1951
March 28
Proceeds—To
working capital.
NEW ISSUE CALENDAR
Statement ef¬
'
-
43
(1571)
•
None.
be
supplied
Proceeds
—
by amend¬
Together with
Golconda
Mines
Ltd., Montreal, Canada
April 9 filed 750,000 shares of common stock.
Price—
At par ($1 per share).
Underwriter—George F. Breen,
New York.
Proceeds—For drilling expenses, repayment
of advances and
•
working capital.
Gold
Ensign Mining Co., Salt Lake City, Utah
March 29 (letter of hotification) 300,000 shares of com¬
mon stock.
Price—At* par (10 cents per share). Under¬
writer—None. Proceeds—To continue mining operations
and retimbering of main tunnel at Mountain City, Nev.
Office—1350 South 7th St., Salt Lake City, Utah.
Granite City Steel Co.
14 filed 284,114 shares
March
of
common
stock
(par
$12.50) being offered for subscription by common stock¬
holders of record April 3 on basis of one share for each
3 Vz
shares
held; rights to expire on April 17.
Price
$22.12 Vz per share. Underwriters—The First Boston Corp.
and Merrill Lynch, Pierce, Fenner & Beane, both of New
York.,
Proceeds —For expansion program.
Statement
effective
.
"
."/
/J
'■
Green
Feb.
27
Bay Drop Forge Co., Green Bay, Wis.
(letter of notification) $200,000 of first mort¬
5% serial bonds due annually Feb. 1, 1952 to Feb. 1,
1961, inclusive. Price—At par and accrued interest. Un¬
gage
International Life Insurance
Co., Austin, Tex.
special stock debentures to be
sold in units of $500 each by regular licensed insurance
March 30 filed $1,200,000
agents of the company. Price—At par.
crease capital and surplus.
Israel
March
19
(State of)
filed
Proceeds—To in¬
,:
(5/1)
$500,000,000
of
"Independence
Issue"
in two types, viz: 15-year
dollar coupon
bonds due May 1, 1966; and 12-year dollar savings bonds
to be dated the first day of the month in which issued
and to have a maturity value of 150% of par. Price—At
100% of principal amount. Underwriter—American Fi¬
nancial & Development Corp. for Israel. Proceeds—For
economic development of the State of Israel.
Office—
bonds,
Authorized
York, N. Y.
agent is located at 11 East 70th St.,
Statement effective March 28.
*
Israel Steel
New
Corp.
stock.
(letter of notification) 15,000 shares of common
Price—At par ($10 per share).
Underwriter—
None.
April 3.
Grayson-Robinson Stores, Inc. (4/16-21)
March 29 filed 100,000 shares of common stock (par $1).
Price—To be supplied by amendment., Underwriter—
Emanuel, Deetjen & Co., New York. Proceeds—To re¬
duce bank loan.
April 3.
Proceeds—For corporate
Jan.
2
purposes and the pur¬
for resale. Office—Care of
Broadway, New York, N. Y.
chase of merchandise (steel)
Efrein
&
Metrick,
320
Jerry Fairbanks, Inc., Hollywood, Calif.
Feb. 16 (letter of notification) 193,000 shares of common
stock (par $1).
Price—$1.50 per share. Underwriter—
D. Gleich Co., New York. Proceeds—For production of
motion pictures for theatrical and television purposes
and for working capital.
Continued
on
page
44
44
The Commercial and Financial Chronicle
(1572)
Continued
from
page
43
March
14.
;
.
Corp.,
shares
Public
General
to
Utilities
the parent, will be used for new construction.
one bid, from Union Securities Corp. and
Bids—Only
Salomon Bros. & Hutzler
(jointly), was received March
27, which was returned unopened. Offering—Postponed
indefinitely. Statement effective March 14.
•
Zipper Corp., New York (4/16)
(letter of notification) $250,000 of 15-year in¬
April 9
notes, due May 1, 1966, and 30,000 shares of com¬
(par 10) to be offered in units of a $100 note
12 shares of stock. Price—$119.92 per unit. Under¬
and
stock
writer—None.
and
Proceeds—To repay
loans, for equipment
working capital.
Kerr-McGee Oil
Industries, Inc.
March 22 (letter of notification) 10,000 shares of common
stock (par $1) to be sold to Lehman Brothers, New York,
for investment. Price—$19 per share. Proceeds—To T. M.
Geraldine H.
and
Kerr, two selling stockholders.
Key West (Fla.) Propane Gas Corp.
April 2 (letter of notification) $25,000 of first mortgage
bonds, series A. Price—At par (in*denomination of $1,000
each).
Underwriter
Bioren
—
&
Co., Philadelphia, Pa.
Proceeds—For corporate purposes.
(par $100). Price—At
man,
Maynard & Co., New
Underwriter—None.
Proceeds—For
construction.
new
Offering has been deferred.
Kingsburg
(Calif.) Cotton Oil Co.
March 8 (letter of notification) 42,187 shares of common
stock
(par $1), being offered to common stockholders
of record March
10
basis
on
of
share
one
for
10
each
shares
held; rights to expire on April 20. Price—$4.25
per share.
Underwriter—None. Proceeds—To construct
cctton gin. Address—P. O. Box 277, Kingsburg, Calif.
Kingsburg Cotton Oil Co., Kingsburg, Calif.
March
1
stock
(letter of notification) 6,000 shares of capital
$1). Price—$5.25 per share. Underwriter—
(par
Fewel
&
Co., Los Angeles,
Calif. Proceeds—To Fewel
Bros., Inc., the selling stockholder.
Life Insurance Co. of Virginia,
(letter of notification) 2,000
stock (par $20) to be distributed to 85
Richmond,' Va. v;
shares of capital
managers and 200
associate managers employed in district offices.
per
share.
market. Underwriter—StillYork. Proceeds—To selling
Marquette Casualty Co., New Orleans, La.
April 2 (letter of notification) 15,000 shares of capital
stock (par $10).
Price—$15 per share. Underwriter—
None. Proceeds—To increase capital and surplus. Office
Bldg., Baronne at Gravier
—Strand
Underwriter—None.
Price—
Proceeds—To
re¬
Sts., New Orleans,
of California
notification) 5,000 shares of first pre¬
ferred stock, 5% series.
Price—At par ($20 per share).
Underwriter—Guardian Securities Corp. of San Fran¬
Mercantile Acceptance Corp.
Dec.
4
(letter of
Office—333
corporate purposes.
Proceeds—For
Calif.
Montgomery Street, San Francisco,
(letter of notification)
12
Mexican Gulf Sulphur Co.
Feb.
(letter of notification)
16
stock
$7
42,800 shares of common
10 cents). Price—At the market (estimated
share. Proceeds—To further develop com¬
(par
per
pany's properties and for general
working capital.
Minneapolis Gas Co.
March 30 filed 119,452 shares of common stock (par $1)
to be offered for subscription by stockholders in ratio of
share for each ten
new
Price — To be
shares^ held.
supplied by amendment. Underwriter — Kalman & Co.,
Inc., St. Paul, Minn. Proceeds—For cost of additions to
property.
: ■
'
/,/./
';,
•
.
.
Corp. of America, Inc.
Feb. 19 (letter of notification) 1,000 shares of common
stock (par $1). Price — $6.75 per share. Underwriter —
Riter & Co., Chicago, 111. Proceeds—To Willis W. Os¬
borne, the selling stockholder.
Lithium
Corp. of America, Inc.
(letter of notification) 12,500 shares of common
stock (par $1). Price—At market
(approximately $6.87 V2
Feb. 28
share). Underwriters—Peltason, Tenenbaum Co., St.
Louis Mo.; and Riter & Co., Chicago, 111. Proceeds—To
Karl M. Leute of
Minneapolis, Minn., the selling stock-
bolder.
Steel
Co., Dallas, Tex.
March 8 filed 640,000 shares of common stock
April 1, 1981. Underwriters—To be determined by com¬
petitive bidding. Probable bidders:
Halsey, Stuart &
Co. Inc.; Equitable Securities Corp.; W. C. Langley &
Co. and The First Boston Corp. (jointly); Union Se¬
Corp. and Salomon Bros. & Hutzler (jointly);
Lehman
Brothers; Kidder, Peabody & Co.; Merrill
curities
Lynch, Pierce, Fenner & Beane; Glore, Forgan & Co.;
Harriman Ripley & Co., Inc.
Proceeds—From sale of
bonds together with proceeds ($4,000,100) from proposed
sale of 615,400 common shares to West Penn Electric Co.,
parent, will be used for property additions and improve¬
by Monogahela and its subsidiaries.
Bids—Ex¬
pected to.be. opened at.JU a.m. (EST) on April 24.
(4/19)
Utilities Co.
Montana-Dakota
shares of common stock (par $5)
offered for subscription to common stockholders
March 30 filed 230,000
to
be
of
record
April 19
basis of one share for each 4%
on
reduce
Proceeds—To
York.
bank
loans
and
for
con¬
struction program.
Morton
Oil Co., Casper,
Wyo.
(letter of notification) 100,000 shares of common
stock (par 10 cents). Price—60 cents per share. Under¬
writer— Lasser Bros., New York. Proceeds—To Gordon
R. Kay, the selling stockholder.
Feb. 21
Mountain
States
Power Co.
March 7 filed $5,500,000 of first mortgage bonds due
April 1, 1981. Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; Kidder, Peabody & Co.; Merrill
Lynch, Pierce, Fenner & Beane.
Proceeds—To repay
loans and for new construction.
Bids—Only one
bid was received on April 10 for 100.25 for a 3%%
(par $1)
being offered first to common stockholders of record
April 4 on basis of 3.2 shares for each 10 shares held;
rights to expire on April 14. Price—$8.55 per share to
stockholders
effective March 29.
Rupe
&
Son,
$9.50
Dallas,
to
public.
Texas;
Underwriters—Dallas
Estabrook &
Proceeds—
4V2% first
coupon
To
reimburse
company
mortgage bonds.
for
Statement
redemption
effective
of
April 4.
Long Island Lighting Co.
April 6 filed 524,949 shares of new
common
stockholders
for each six shares
lege.
Unsubscribed
held, with
shares
stock to
be
in
the
an
oversubscription privi¬
first
to
ratio
be
of
one
offered
share
to
em¬
Price—To be decided later. Underwriter—None.
Biyth & Co., Inc., has been engaged as Dealer-Manager
ployees.
to obtain subscriptions. Proceeds—For
additions and im¬
provements to property. Offering-—Expected
early part
of May. Registration—Expected in a few
days.
Lorain
Telephone Co., Lorain, Ohio
March 13 (letter of notification) 6,705 shares of common
stock
(no par), to be offered to common stockholders
at the
rate of
one
share for each 10 shares held.
Price—
$-0 per share. Underwriter—None. Proceeds—For work¬
Office—203 West Ninth St.,
ing capital.
Lorain, Ohio.
Lynn Gas & Electric Co.
(4/24)
$4,100,000 20-year notes, series A, due
April 1, 1971. Underwriters—To be determined
by com¬
petitive bidding
^
bidders: Halsey, Stuart &
Co. Inc., The First Boston
Corp.; Kidder, Peabody & Co
March
27
Proceeds
due
June
M.
March
J.
filed
—
To repay
$3,800,000 2%% promissory notes
1, 1951, and the balance for
and
new
construction.
M.
and M.
Consolidated, San
Francisco, Calif.
19 (letter of
notification) 399,923 shares of capi¬
tal stock
(par $1) to be offered
to
Mountain
stockholders for
sub¬
Statement
$2,000,000 of bonds.
States Telephone & Telegraph Co.
March 9 filed 215,709 shares of capital stock being offered
Bakersfield, Calif.
7
geles, Calif, as to 500 shares.
selling stockholder.
Proceeds—To A. W. Scott,
a
North American Acceptance
At
held; rights to expire
on
April 30.
Underwriter — None.
advances to American Telephone &
Co., the parent, which owns 900,801 shares,
83.52% of outstanding stock, and for general corporate
—
par
($100 per share).
Proceeds—To repay
Telegraph
or
purposes.-
Nash
—$10
stock
Offering—Postponed temporarily.
March
common
Price—At not exceeding $20 per share.
Proceeds
For working capital.
Office—1750 Hennepin Ave., Minneapolis, Minn.
ner
& Beane and
Underwriters—None.
•
National
Plumbing Pipe Corp., Columbus, Ohio
$250,000 of 15-year 5%
income debentures due April 1, 1966. Price—At par (in
April 4
(letter of notification)
denominations of $500 each).
Underwriter—None.
ceeds—Tp purchase^, or lease plant.
Front St.,
•
Colurob'us^O.
Pro¬
Office—305 North
,ww;
Nevada
,
Stewart ^Mining Co., Spokane, >■ Wash.
(letter of notification) 300,000 shares'Of ?cbmmon stock.
Price—At market (estimated at 12 cents-per
share). Underwriter—None/Proceeds—To develop mine.
March 29
Office—604 Empire
State Bldg., Spokane, Wash
Electric Co.
Gas &
Oklahoma
215,380 shares of common stock (par $10)
being offered to common stockholders of record April 5,
1951 at rate of one share for each 10 shares held, with
an
privilege; rights are to expire oh
Standard Gas & Electric Co. is entitled to
oversubscription
April
24.
purchase 121,009 shares and plans to purchase any of
the remaining 94,371 shares not subscribed for by other
stockholders.
Price—$19.75 per share.
Underwriter—
Statement
Proceeds—For construction program.
None.
effective
April 4.
■
■
Pacific Lighting
*'
■
■:
/■
\
„//.»:
(4/24)
Corp.
April 3 filed 369,643 shares of common stock (no par).
Price—To be supplied by amendment.
Underwriter—
Blyth & Co., Inc. Proceeds—For additions and improve¬
ments to property.
V
Honolulu, Hawaii
»
of common stock to be
offered for subscription by common stockholders of rec*
Pacific
March
ord
30
Refiners,
filed
Ltd.,
750,000
shares
April 6, 1951, at rate of one share for each share
($1 per share). Underwriter—None.
held.
Price—At par
Un¬
subscribed shares to be sold at public auction in Hono¬
retire
Proceeds—To
short
term
promissory notes
and for construction program.
,
Co., Cushing, Okla.
t
Jan. 8 (letter of notification) $50,000 of first mortgage
serial 6% bonds due 1961-1971.
Price—At 100%. Un¬
Pact Gas
derwriter—R.
J.
struction.
Edwards,
retire
Proceeds—To
certain
Inc., Oklahoma City, Okla.
capital stock and for con¬
Office—212 East Broadway, Cushing, Okla.
Milling Co., Las Vegas,
Pan American
Nev.
Price—At
par ($1 per share).
Underwriter—None. Proceeds—To
purchase machinery ahd equipment, to construct a mill
Jan. 24 filed 200,000
In Mexico and for
shares of common stock.
general corporate purposes.
Park-Ad Co.,
Chicago, III.
Feb. 19 (letter of notification) 1,500 shares of preferred
stock and 1,500 shares of common stock. Price—The pre¬
ferred at $100 per share and the common at $1 per
share. Underwriter—None. Proceeds—For working capi¬
tal. Office—333 No. Michigan Ave., Chicago, 111.
Peabody Coal Co. (4/17)
26 filed $6,000,000 sinking fund debentures due
March
April 1, 1966.
Price —To be supplied by amendment.
Underwriter—Halsey, Stuart & Co. Inc., Chicago, 111.
Proceeds—For new construction.
(4/17)
Peabody Coal Co.
26
filed
160,000
shares of 5%%
prior preferred
Price—To be supplied by amendment.
Underwriter—A. C. Allyn & Co., Inc., Chicago, 111. Pro¬
(par $25).
?
ceeds—For construction program.
Pepsi-Cola
Bottling Co. of Washington,
D. C.,
Inc.
go
share of Mortar.
Proceeds—For construction program.
at 11:30 a.m. (EDST) on May 2.
be received
March 5 filed
Mortar &
one
stock (par
Kidder, Peabody & Co. (jointly); Mor¬
Stanley & Co.
Feb. 20
Supply Co. stock in ratio of three shares of
of preferred
share for
privilege;
rights to expire on May 18. Price—To be named by the
company.
Underwriters—To be determined by competi¬
tive bidding. Probable bidders for preferred stock: Mor¬
gan Stanley & Co.; Lehman Brothers and Bear, Stearns
& Co. (jointly); W. C. Langley & Co.; Glore, Forgan &
Co., and White, Weld & Co. (jointly); The First Boston
Corp.
Probable bidders for common stock: Lehman
Brothers and Bear, Stearns & Co. (jointly); First Boston
Corp.; Lazard Freres & Co.; Union Securities Corp., and
Wertheim & Co. (jointly); Glore, Forgan & Co., and
White, Weld & Co. (jointly); Merrill Lynch, Pierce, Fen¬
Gypsum Co., Buffalo, N. Y.
March 14 filed 68,652 shares of common stock (par $1)
to be offered in exchange for 22,884 shares of National
Statement effective April 3.
shares
1951, on the basis of one
held, with an oversubscription
each ten shares
—
National
(5/2)
150,000
stockholders May 2,
stock
(par $10).
filed
$100) and 436,224 shares of common stock (par $8). The
latter issue will be offered for subscription by common
March
National for
Edison Co.
30
Finch
Underwriter—None.
Underwriter—Michael Investment Co.,
I. Proceeds—For working capital.
share.
per
Providence, R.
Inc.,
Statement effective March 28.
Co., Minneapolis, Minn.
Jan. 11 (letter of notification) 12,137 shares of
Corp.
(letter of notification) 15,000 shares of 60-cent
convertible preferred stock (par $5). Price
March 20
cumulative
to stockholders of record March 30 in ratio of one share
Price
common
April 17
on
for each five shares
•
offered
by Halsey, Stuart & Co. Inc. (this was rejected).
May offer
Co., Boston,
Mass.; and Straus & Blosser, Chicago, 111.
Co.,
(letter of notification) 1,000 shares of capital
stock (par $1). Price—500 shares at $3.50 each and 500
at $4 each. Underwriter—E. F. Hutton & Co., Los An-»
Feb.
lulu.
bank
and
March 26.
Bids—To
Monongahela Power Co. (4/24)
March 23 filed $10,000,000 of first mortgage bonds due
Inc., and Merrill Lynch, Pierce, Fenner & Beane, New
Star
increase
To
gan
;;
.
St., Richmond, Va.
Lone
Price—$37 per share. Under¬
Corp., New York. Proceeds
capital and surplus.
Statement effective
April 10, 1951.
on
writer—The First Boston
Ohio
25,000 shares of class A
voting common stock (par $1). Price—$5 per share.
Underwriter—James T. DeWitt & Co., Washington, D. C.
Proceeds—For organizational expenses and working cap¬
ital. Office—Wolfe and Jackson Sts., Fredericksburg, Va.
Feb.
share held; rights to expire on. May 3.
Price — To be
supplied by amendment.
Underwriters—Blyth & Co.,
per
expire
Inc.
Metal Products Mfg. Co.
imburse company for amount expended by it in acquiring
said shares for such distribution.
Office—914 Capital
Lithium
$10) be¬
La.
ments
April 5
$49.50
shares of common
•
one
Kingfisher Water Co., Kingfisher, Okla.
27 (letter of notification) 250 shares of 5% cumu¬
lative preferred stock. Price—At par ($100 per share).
Dec.
•
(letter of notification) 4,800
12
stock
at
•
shares of capital stock (par
ing offered to stockholders of record March 26, 1951, at
of one share for each four shares held; rights will
stockholder.
come
mon
RR.
Maine Central
Feb.
cisco.
Kee
1951
rate
Norris Oil
Jersey Central Power & Light Co.
Feb. 21 filed 40,000 shares of cumulative preferred stock
(par $100). Proceeds—From sale of preferred, together
with proceeds to be received from the sale of 350,000
common
-
March 5 filed 75,000
.
4
additional
Tower, San Francisco, Calif.
capital. Office—1715 Mills
Thursday, April 12,
Hampshire Fire Insurance Co.
New
share. / Underwriter—
per
Proceeds—For working
None.
Jersey Central Power & Light Co.
Feb. 21 filed $1,500,000 first mortgage bonds due in 1981.
Proceeds—For expansion program. Bids—Only one bid
was
received by company on March 27, from Halsey,
Stuart & Co. Inc., which was returned unopened. Offer¬
ing—Postponed i n d e f i n i t el y.
Statement effective
cents
Price—75
scription.
*.■
-
.
.
.
stock
v
(letter of notification) 50,000 shares of common
(par 10 cents). Price—40 cents per share. Under¬
& Co., Washington, D. C. Proceeds—To
writer—Ferris
to Samuel Schwartzrnan, the selling stockholder.
/
Inc., Detroit, Mich. (4/16-21)
March 15 filed $1,500,000 of 6% sinking fund debentures,
Plywood,
series A, due
chase
—To
April 1, 1963 (with 7-year warrants to pur¬
150,000 shares of common stock attached). Price
supplied by amendment. Underwriters—H. M.
be
Byllesby & Co., Inc.,. Chicago, 111., and P. W. Brooks &
Co., Inc., New York.
Proceeds—To redeem 5% deben¬
to erect plant and install equipment.
tures
Public
Service Co.
of Oklahoma
March 12 filed $10,000,000 of first
(4/24)
mortgage bonds, series
C, due April 1, 1981. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co.
Inc.; Glore, Forgan & Co.; White, Weld & Co. and
,
Volume 173
Number 5002
.
.
The Commercial and Financial Chronicle
.
Shields & Co.
(jointly); The First Boston Corp.; Kuhn,
Securities Corp. (jointly); Salo¬
Bros. & Hutzler; Harriman Ripley & Co., Inc. Pro¬
Loeb & Co. and Union
mon
ceeds—For
construction.
new
April 24 at 11:30
•
San
Gabriel
a.m.
Bids—To
be
opened
on
(EST).
Strategic Materials Corp., Buffalo, N. Y.
April 3 (letter of notification) 100,000 shares of common
stock (par $1). Price—$3 per share. Underwriter—Ham¬
ilton & Lunt, Buffalo, N. Y. Proceeds — For
working
capital for general corporate purposes. Office — 1330
Marine Trust
Land
Calif.
April 4 (lettor of notification) 49,715 shares of capital
stock (par 35 cents) to be offered in exchange for the
fee title to 35.21 acres of property on basis of one share
for each 1/49,715th interest in said property held by
stockholders
of San Gabriel River
Improvement Co.
Stock is assessable up to $5 per share.
Office—2118
Huntington Drive, San Marino 9, Calif.
Bldg., Buffalo 3, N. Y.
San Marino,
Co.,
(1573)
Super Electric Products Corp.
2 (letter of notification) $300,000
non-cumulative
convertible
Wisconsin Power & Light Co."(4/16)
March 23 filed
$4,000,000 of first mortgage bonds, series
E, due April 1, 1981. Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co.
Inc.; The First Boston Corp.; Salomon Bros. &
Glore, Forgan & Co.; Smith, Barney & Co.;
White, Weld & Co. and Kidder, Peabody & Co. (jointly);
Hutzler;
April
6%
45
of
10-year
insecured
debentures.
Price—At par
(in denominations of $100 each). Under¬
writer—Hugh J. Devlin, New York. Proceeds—To retire
debt and for working capital.
Office — 46 Oliver St.,
Newark, N. J.
Union
Securities
Proceeds
opened
For
—
11:30
Corp.;
Equitable
Securities
Corp;
construction.program. Bids — To be
(CST) on April 16 in Room 2154,
Drive, Chicago 6, 111. Statement effective
a.m.
20 No. Wacker
April 6.
*
Sattler's,
Superdraulic Corp., Detroit, Mich.
23 (letter of notification)
100,000 shares
Inc., Buffalo, N. Y.
March 22 filed 200,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Underwriter—
Hornblower &
Weeks, New York. Proceeds—To Charles
Hahn, Jr., President, who is the selling stockholder.
Offering—Indefinitely postponed.
Seaboard
Container
Corp.
March 1 (letter of notification) 12,000 shares of class A
common stock (par $1).
Price—$5.50 per share. Under¬
writer—Barrett Herrick & Co., New York.
Proceeds—
—To Frederic R. Mann, President, who is the selling
Feb.
fered
Seal-Peel,
March 19
Inc., Van Dyke, Mich.
(par
writer—None.
$1).
Price—$1.25
Proceeds—For
retire indebtedness.
per
working
share.
capital
stock
—None.
and
to
writer—None.
Proceeds—For
working capital.
Acceptance Corp., Omaha, Neb.
April 2 (letter of notification) 10,000 shares of 5% cumu¬
lative preferred stock (par $25). Price—$26.25 per share.
Underwriters—Cruttenden & Co., Chicago, 111., and The
First Trust Co. of Lincoln, Neb.
Proceeds—For working
.capital.
Freezers, Inc., Salisbury, Md.
April 5 (letter of notification) 250 shares of 5% preferred
stock (par $100) and 2,000 shares of common stock (par
$5) to be sold in units of five shares of preferred stock
Underwriter
stock.
common
None.
—
Proceeds
Price—$1,000
—
For
per
unit.
March
White,
March
record
28, 1951, at rate of one share for
held; rights to expire April 18, 1951.
shares
Price—$15 per share. Underwriter—None. Proceeds—
For working capital. Office—611 West 129th Street, New
York 27, N. Y.
Smart &
Weld
loans
&
Texas
&
Co.,
New
Final
Ltd.,
Co.,
Los Angeles,
share.
per
Calif.
Underwriter—
Farmers
selling stockholders.
Office
Pro¬
4510 Colorado
—
South Carolina Insurance
Co., Columbia, S. C.
(letter of notification) 5,000 shares of common
stock (par $10) being offered to stockholders of record
(with
an
basis of
one
share for each
oversubscription
April 15.
Price—$20
Proceeds—To
Address—P.
South
Box
State
privilege);
share.
per
provide
O.
and
repay
Offering—
■
additional
rights
expire
on
Underwriter—None.
capital
and
surplus.
1199, Columbia, S. C.
Uranium
Mines
Ltd.
being offered to
basis of
expire
on
one
common
new
;■ - ^.V.I.¬
share for each
per
capital and general corporate
fective April 3.
eight held; rights to
22
stock.
Proceeds—To develop
mechanical field.
Office—31
Statement
R.
S.
Southern
Industries
Corp., Mobile, Ala.
(letter of notification) 2,000 shares of common
stock. Price—At par $100 per share. Underwriter—None.
Feb.
15
Proceeds—For
aries,
additional
working
capital
particularly Ewin Engineering
Bldg., Mobile, Ala.
for
Corp.
subsidi¬
Office
—
Waterman
12
Corp.
(letter of notification)
State Bond & Mortgage Co., New Ulm, Minn.
5 filed $1,500,000 of accumulative savings certifi¬
Feb.
ries 1217-A at $85.68 per
certificates, se¬
$100 principal amount. Under¬
writer—None. Business—Investment. Statement effective
March 29.
•
Steak'n
Boston
Shake,
Inc.,
Bloomington,
III.
will
cost
common
March
require
new
financing.
14,025
shares
common
stock
Co.
$65,300,000 through 1954. He added
financing is planned until 1955.
that
no
stock
21
Water
Service
Co.
stockholders
approved proposals to increase
the authorized preferred stock to 971,743 shares from
471,743 shares and the authorized common stock from
500,000 shares to 1,000,000 Shares. Probable underwriter—*
Co., San Francisco, Calif.
engineering in the electro¬
Carletorri St., Cambridge,
Dean Witter &
Price—
CalvanConsolidated Oil & Gas Co.,
(Canada)
it
3
At par ($1 per share).
Ltd./
stated
registration may be made
shares of capital stock. Price—About $5
1,000,000
has
was
of
share.
Underwriter—None, but company
negotiated with Titus-Miller & Co., Detroit, Mich.,
which "is seeking other dealers to cooperate with it in
Vulcan
area
develop uranium deposits in the
•
common
stock
(par
50
who is the selling stockholder.
March 23
(Ohio)
Telephone Co.
(letter of notification) 3,000 shares of $5 divi¬
Price—$100
per
reimburse
share. Under¬
company's
the
Welex Jet Services,
Inc., Ft. Worth, Tex.
March 13 (letter of notification) 2,000 shares of common
stock (no par).
Price — At the market (estimated at
Underwriter—Barron McCulloch, Ft.
Worth, Texas. Proceeds — To Willis H. Thompson, the
selling stockholder.
•
Wheeling Steel Corp. (4/26)
11 filed $14,238,900 of 14-year debentures due
May 1, 1965 (convertible for a 10-year period), to be
April
offered to
on
common
stockholders of record about April 26
basis of $100 of debentures for each 10 shares of
mon
stock held.
Underwriter—Kuhn, Loeb & Co., New York.
For improvement program.
March
23
filed
com¬
Price—To be supplied by amendment.
Power &
10,000
Proceeds—
Light Co.
shares
of
cumulative
preferred
stock (par $100), being offered for subscription by pre¬
ferred stockholders of record April 2, subject to allot¬
ment
in
case
of
oversubscription; rights expire on
April 23. Price—At par. Underwriters—Smith, Barney &
Co. and Robert W. Baird & Co., Inc.
Proceeds—For
property additions and improvements. Statement effec¬
tive April 6.
Wisconsin
Power &
Light Co.
March 23 filed 96,069 shares of common stock
(par $10),
being offered for subscription by common stockholders
of record April 2, 1951, on basis of hhe share for each
20 shares held, with rights to expif^'bn April 23. Un¬
subscribed shares to, be* offered"! tb > employees? M Price—
$16.30 per share; > Underwriters^—SmithBarney
and
—1700 West
April 6.
& Co.
Co., Inc.
Proceeds—For prop¬
erty additions and improvements.
Statement effective
Robert
W.
Baird &
Co.
outside
that
cash
require¬
for construction and other purposes
about
Cincinnati
April 7 it
this
dend preferred stock (no par) to be offered for subscrip¬
tion by present stockholders in ratio of 0.27695 of a
Proceeds—To
Power
estimated
will
$10,000,000.. No definite plans for permanent
financing have yet been formulated, and in the interim
company plans to obtain necessary funds through shortterm bank borrowings.
be
•
Warren
Maine
company
ments for 1951
cents).
Price — At market
(about $3 per share). Underwriter—Straus & Blosser,
Chicago, 111. Proceeds—To John A. Roberts, Chairman
of the Board,
Central
April 3
Iron
Works, Wilkes-Barre, Pa.
(letter of notification) not to exceed 30,000 shares
Jan. 30
per
Underwriters—Hemphill, Noyes, Graham, Par¬
sons
& Co., New York, and Gardiner, Watson & Co.,
Toronto, Canada.
...• i
in Algoma, Ontario, Canada.
stock (par 50 cents). Price—$5.50 per share. Underwriter
—None. Proceeds—To three selling stockholders. Office
its $90,000,000 expansion
will
Castings Corp.
Edison
California
April 4 (letter of notification) 18,180 shares of common
Washington St., Bloomington, 111.
program
30, J. V. Toner, President, announced that com¬
pany plans to issue $32,000,000 of securities to aid .in
financing its construction program, which, it estimated,
April
cates, series 1207-A at $95.76 per $100 principal amount
and $15,000,000 of accumulative savings
Corp.
Jan.
•
Wisconsin
approximately 13,750
shares of common stock (par $1). Price—At the market
(approximately $7 per share). Underwriters—Lee Higginson Corp., Carreau & Co. and Reich & Co., New York.
Proceeds—To four selling stockholders. No general pub¬
lic offering planned.
Viscose
General Steel
Van Lake Uranium Co., Van Dyke, Mich.
March 23 filed 500,000 shares of common stock.
Standard-Thomson
March
No underwriting likely to be
Baldwin Securities Corp.
April 4 company announced it will sell
of Midvale Co. stock and
89,900 shares of
ef¬
$24.50 per share).
Frank
offering of
stockholders during the year to
with necessary equity funds for
company announced
improvement
Mass.
per
Airways, Inc., Birmingham, Ala.
6 (letter of notification) 1,000 shares of common
(par $3).
Price—$3.50 per share.
Underwriter—
Dickson & Co., Charlotte, N. C.
Proceeds—To
W. Hulse, the selling stockholder.
ex¬
additional
an
•
(letter of notification) 57,500 shares of com¬
Price—At par ($5 per share). Underwriter—
None.
•
stock
and
share. Underwriters—
purposes.
make
its
subsidiaries
American
of
construction costs.
April
provide
to
their expansion programs.
•
Inc.
April 17. Price—$31
writer—None.
Southern
shares
Gas Co.
Woolfolk, Chairman, said it is
company will
common
Smith, Barney & Co. and Shields & Co., New York, and
McDonald & Co., Cleveland, O. Proceeds—For working
560,000 shares of capital stock. Price—A1
share). Underwriter-Optionee—Robert IrwiD
Martin of Toronto. Proceeds—For commissions, explora¬
tion and development expenses, and working capital.
($1
pected
(par $5)
stockholders of record April 3
share for each share held.
(Canada)
Natural
March 30, William G.
March 14 filed 131,190 shares of common stock
shares held
10
Nov. 30 filed
par
Co.; Blyth & Co., Inc.; Harriman Ripley & Co., Inc.;
Co. and Salomon Bros. & Hutzler
(jointly);
Drexel & Co.; Union Securities Corp. and Equitable Se¬
curities Corp. (jointly); Kidder, Peabody & Co.; The
First Boston Corp.; Lehman Brothers. Proceeds—For ex¬
pansion program.
Bids—Tentatively expected to be
opened on Sept. 11. Registration—About Aug. 10.
Shields &
March 29
Proceeds—To rehabilitate rural telephone exchanges and
Thompson Products,
first
mortgage bonds. Under¬
writers—To be determined by competitive bidding. Prob¬
Halsey, Stuart & Co. Inc.; Morgan Stanley
v.
*
system.
(9/11)
company contemplates issuance
involved.
;
(letter of notification) 13,000 shares of capital
stock. Price—At par ($5 per share). Underwriter—None.
of
Feb. 28
on
Proceeds—To
Telephone Co., Inc.,
Belton, Tex.
Securities Co., San Francisco, Calif.
Blvd., Los Angeles 53, Calif.
15
York.
Corp.
expansion of pipeline.
postponed. ;
/
Montreal River
Price—$7.25
(no par).
March
Securities
for
the deal." Proceeds—To
>
Webster
$10,000,000
American
shares of cumulative preferred
Price—To be supplied by amendment.
stock
ceeds— To
Telegift Service,
Office—40 East 49th Street,
/
March 22 (letter of notification) 12,561 shares of common
Pacific Coast
the
100,000
and
Temporarily
mon
(letter of notification) 16,599 shares of com¬
stock (no par) to be offered to common stockhold¬
ten
filed
Underwriter—Stone
March
12
of
7
of
able bidders:
Ultra-Mechanisms, Inc., Cambridge, Mass.
Sinclair & Valentine Co., New York
each
"Gifts-
a
sale
and
&
com¬
Underwriter
operate
Alabama Power Co.
Feb. 6, it was stated that
equipment and
working capital.
ers
and
as
17, N. Y.
stock (par $100).
on
Shoreland
and 40 shares of
working
Detroit, Mich.
share.
per
establish
per
March 26
Securities
mon
Price—$2
operating capital.
York
Office—
Searchlight, Nev.
March
Proceeds—For
Prospective Offerings
6%
Tennessee Gas Transmission Co.
bank
Searchlight Consolidated Mining & Milling Co.
'April 5 (letter of notification) 3,000,000 shares of com¬
mon stock.
Price—At par (10 cents per share).
Under¬
/
(par $1).
Proceeds—To
for
Under¬
Office—11400 East Nine Mile Road,
($1
par
Telegift, Inc., New York (5/1)
20 (letter of notification) 60,000 shares of
mon
•
•
Underwriter—None.
Office—14256 Wyoming Ave.,
com¬
Van Dyke, Mich., or 103 Park Avenue, New York, N. Y.
Placed privately with a few individuals.
•
Price—At
March
New
(letter of notification) 225,000 shares of
stock
stockholders.
common
share).
capital.
and
mon
to
by-Wire" service to be known
stockholder.
of
non-cumulative convertible preferred stock (convertible
into common stock par $1, share-for
share) now of¬
was
.year
early
or
$30,000,000
Gas
of
Stuart & Co.
&
Electric
Co.
'
reported company expects to market late
new
in 1952 between $25,000,000 and
bonds.
Probable bidders:
Halsey,
Inc.; Morgan Stanley & Co.; Kuhn, Loeb &
Co. and Salomon Bros. & Hutzler
(jointly); Blyth & Co.,
and The First Boston Corp. (jointly); Union Se¬
curities Corp.; Glore, Forgan & Co. and White, Weld &
Co. (jointly); Lehman Brothers; Harriman Ripley & Co.,
Inc.; Merrill Lynch, Pierce, Fenner & Beane.
Proceeds
Inc.,
will
•
be
used
for construction program.
Cleveland
Electric Illuminating Co.
April 4 it was reported company may in the fourth
quarter of 1951 issue new preferred stock or first mort¬
gage
its
bonds, or obtain short-term bank credit to finance
and improvement program.
Preferred
construction
stock
sale, if negotiated, may be handled by Dillon,
Co., Inc. Probable bidders for any bond financ¬
ing are: Halse.y, Stuart & Co. Inc.; Dillon, Read & Co.
Inc.; Blyth & Co., Inc.; White, Weld & Co.; The First
Boston Corp.; Glore, Forgan & Co. and W. C. Langley
& Co. (jointly).
Read &
New York, Inc.
applied to New York P. S. Commit
sion for authority to issue and sell $25,000,000 of first
and refunding mortgage bonds, series H, due May 1,
1981 (in addition to $40,000,000 series G bonds filed with
the SEC on March 30). Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stu¬
art & Co. Inc.; Morgan Stanley & Co.; The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane and White,
Weld
&
Co. (jointly).
Proceeds — To redeem a like
amount of Westchester Lighting Co. 3Vz% general mort¬
gage bonds due 1967. Offering—Postponed.
Consolidated
Edison Co. of
March 23 company
Denver
&
Rio
Grande Western
RR.
(4/18)
April 18 for
the purchase from the company $40,000,000 first mort¬
gage bonds to be dated May 1, 1951, and to mature on
May 1, 1981. They must be made to the company, in care
of Messrs. Sidley, Austin, Burgess & Smith, special counBids will be received up to noon
,
;
(CST)
on
Continued
on
page
46
46
The Commercial and Financial Chronicle
(1574)
Continued from page
45
sel, 11 So. La Salle St., Chicago 3, 111. Underwriters—To
competitive bidding. Probable bidders!
be determined by
Stanley & Co.; Kuhn,
Halsey, Stuart & Co. Inc.; Morgan
Stearns & Co. (jointly). Proceeds
—Together with treasury funds, to redeem on June 1,
1951, $35,062,200 outstanding first mortgage
3%-4%
bonds, series A, and $8,666,900 of Denver & Salt Lake
income mortgage 3%-4% -bonds, both due Jan. 1, 1993.
Holders of these two issues may exchange them, par for
Loeb & Co. and Bear,
for the proposed new series B bonds.
par,
•
Florida Power Corp.
March 29 the authorized common
stock (par $7.50) was
1,600,000 shares to 2,500,000 shares
and the authorized preferred stock (par $100) from 120,000 to 250,000 shares. Underwriters for preferred stock
to be determined by competitive bidding. Probable bid¬
from
increased
include Kidder, Peabody & Co. and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Salomon Bros
& Hutzler; Harriman Ripley & Co., Inc.; Equitable Secur¬
ities Corp.; Union Securities Corp.
Probable under¬
writers for common stock. Kidder, Peabody & Co. and
ders
may
Merrill Lynch, Pierce, Fenner
March 29 it
& Beane.
was
stated company expected to
sell $8,000,-
Under¬
competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Kidder, Peabody
& Co., and Merrill Lynch, Pierce,
Fenner & Beane
(jointly); Smith, Barney & Co.; The First Boston Corp.;
W. C. Langley & Co. and Glore, Forgan & Co. (jointly).
Proceeds—For expansion program.
Offering—Expected
000
to
in June
•
$4,200,000 through the sale of debentures or first mort¬
gage bonds in the spring of 1951 (this is in addition to
recent
or
July.
133,812 shares of common stock (par $5) at $15 pei
(the latter to common stockholders). The bond
financing early last year was placed privately through
Central Republic Co. (Inc.), Chicago, 111. The proceeds
are
to be used for the company's expansion program.
•
Power & Light Co.
April 4 it was announced stockholders will vote May 5
on proposals to increase the authorized
preferred st /k
from 200,000 shares to 400,000 shares and the authorized
of
amount
unsecured
indebtedness
from
$9,000,000
to
Probable bidders for bonds: Halsey, Stuart
& Co. Inc.; Blyth & Co., Inc.; White, Weld & Co.; The
First Boston Corp.;
Glore, Forgan & Co.; Equitable
Securities Corp.; Harriman Ripley & Co., Inc.
$14,000,000.
■.
March 29 it
"new
Republic Steel Corp.
April 2 company announced it has started on a $75,000,000 expansion program in Cleveland, O. Other plans for
expansion, together with the company's participation in
ore mine developments will result in additional expen¬
ditures of over $150,000,000.
~
Rochester Gas
includes
plan
the
the first time.
issuance
sale
and
expected to be opened on June 5.'
V.
■
.
•
Harrisburg Gas Co.
April 9 company filed an
application with SEC for
authority to issue and sell $1,000,000 of 3.15% first
mortgage bonds due 1976. This issue may be placed
privately.
■' '
common
(the latter for subscription by
basis of
Portland
authorized
common
shares.
000
Cement Co.
stockholders
the
20
voted
increase
to
the
stock (no par) from 250,000 to 500,-
Although
no
immediate
issuance
of
the
unissued shares is planned, the company may
additional capital in connection with its expansion
277,583
need
Bids will be received up to noon
Merritt-Chapman & Scott Corp.
•
Sharon
March
•
(CST)
on
April 19 at
Probable bidders:
Halsey, Stuart & Co. Inc.;
Harriman Ripley &
Co., fine, and Lehman Brothers
(jointly); Salomon Bros. & Hutzler; The First Boston
Corp. ': V
O',*. ;■
.> /'
29
The management says "no issuance of
now contemplated."
•
$12.50).
any
addi¬
tional shares is
Baldwin Securities Corp.
company
the next two
stock
common
the 1951-1952 total.
will
years.
have
to
It
be
The First Boston Corp. and Merrill
Lynch, Pierce, Fenner & Beane. ,
1
Indianapolis Power & Light Co.
stockholders
April 17
will vote on increasing authorized preferred stock
(par
$100) from 150,000 «. to 250,000 shares and authorized
common stock "(no
par) from 1,500,000 to 2,000,000 shares.
No imminent financing planned. Probable underwriters
Lehman
on
Brothers;
Goldman,
Sachs & Co. and The First Boston Corp.
tration—Scheduled
for
June
15.
March
issue
30
it
and
was
announced
that
company
proposes
to
sell
$3,000,000 of first mortgage bonds due
April 1, 1976, and $2,000,000 of first mortgage serial
bonds, due $100,000 each April 1 from 1952 to 1971, inclu¬
sive.
Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc., and Merrill Lynch, Pierce, Fenner &
Beane (jointly); Kidder, Peabody & Co.
Proceeds—To
pay bank loans and for new construction.
,
York, Chicago & St. Louis RR.
March 23 the company's report revealed it is
anticipated
it will be necessary to provide about
$4,000,000
new
to finance its 1951 construction program.
m
l-T-E Circuit Breaker Co.
March 30 it was announced stockholders on
May 5 will
vote on increasing the authorized indebtedness of the
company to $3,500,000 from $1,500,000, and the author¬
ized but unissued preferred stock from
15,000 shares to
President, announced
expects to raise $15,000,000 of
000,000
new
company
through the
securities, including from $5,000,000 to $8,preferred stock, and the remainder common
money
new
stock and bonds.
Probable bidders for preferred stock:
Glore, Forgan & Co. and W. C. Langley & Co. (jointly);
Smith, Barney & Co.; The First Boston Corp.; White,
& Co., Shields & Co. and Central Republic Co.
Weld
a new
issue of cumula¬
Blyth & Co., Inc.; Smith, Barney & Co.
was
.
announced stockholders
on
April 25 will
,
'
March 6 it
was reported company plans to issue and sell
$45,000,000 of new bonds late this year (see pre¬
vious columns for preferred and common stocks now in
about
registration). Underwriters—May be determined by com¬
petitive bidding. Probable bidders: Halsey, btuart & Co.
Inc.; Stone & Webster Securities Corp. and White, Weld
& Co. (jointly).
.
Texas
Feb.
27
Eastern
Transmission
Corp.
authorized to construct .facilities
which will increase'the daily capacity of its system by
465,700,000 cubic feet to approximately
1,206,500,000
cubic feet.
This project, it is estimated will cost $96,305,118, and includes approximately 791 miles of pipeline
extending from a connection with United Gas Corp.'s
system near Kosciusko, Miss., through Alabama, Ten¬
nessee, Kentucky, and Ohio to a connection with Texas
Eastern's existing system near Connellsville, Pa.
The
company's financing program includes the sale of $78,000,000 first mortgage bonds (to be placed privately), the
replacing of a $10,000,000 bank loan with a new bank
loan of $20,000,000, and the sale of $45,000,000 of pre¬
ferred stock, $20,000,000 of which already has been sold.
Traditional underwriter for preferred stock: Dillon, Read
& Co. Inc., New York.
company
was
.
Textron
Incorporated
stated stockholders will on May 23 vote
increasing authorized common stock to 3,000,000 from
2,000,000 shares. Traditional underwriter: Blair, Rollins
was
on
•
New York State Electric & Gas
April 4 it
Co.
reported company is considering issue
$10,000,000 to $12,500,000 of first mortgage
bonds or a common stock issue.
If bonds, they may
be placed privately.
Traditional underwriter: The First
and
sale
Boston
was
&
of
Corp., New Yiork.
Proceeds would be used for
additions and improvements to property.
Oklahoma Gas
*
;
Dec. 20 D. S. Kennedy, President, said company is con¬
sidering refunding outstanding $6,500,000 5*4% cumu¬
lative preferred stock (par $100) with an equal amount
United
Feb. 27 it
action, to finance construc¬
Probable underwriters: Lehman Brothers;'
Smith, Barney & Co.; Harriman Ripley & Co. Inc.
•
Panhandle Eastern
April 4 it
was
Pipe Line Co.
reported that the company
may
issue and
sell additional securities to provide funds for its expan¬
sion program.
Traditional underwriter: Kidder, Pea¬
body & Co.
understood that part of this stock is
investment
•
being purchased for
major portion will be publicly of¬
filing of a registration statement, i
and the
fered after the
Peoples Gas Light & Coke Co.
<
April 6 it was reported that company may sell $20,000,000
of new bonds this Spring to provide funds for expansion
was
'
Corp.
announced company
plans to issue $145,the proceeds, to¬
funds, to its subsidiary, United
total of $150,000,000 to be used for
with
other
Gas Pipe Line Co. a
the latter's construction
loan
program.
Probable bidders for
bonds: Halsey, Stuart & Co. Inc.; Dillon, Read & Co.
Inc.;
Equitable Securities Corp.; Harriman Ripley & Co. Inc.
and Goldman, Sachs & Co. (jointly); The First Boston
Corp.
-
United Gas Pipe Line Co.,
Shreveport, La.v.
Feb. 27 FPC authorized company to carry out an
expan¬
sion program, which will include construction of
approx¬
imately 1,000 miles of pipeline, at a total estimated cost
of $111,861,749.
Company will finance construction by
borrowing $150,000,000 from its parent, United Gas Corp.
(which see above).
•
Producing & Refining Co.
April 3 it was announced arrangements have been made
to sell 202,500 shares of Panhandle stock held by Atlas
Corp. to a group headed by White, Weld & Co. It is
Gas
000,000 debt securities and will
ket conditions warrant such
tion program.
Co., New York.
gether
& Electric Co.
Panhandle
$100.
Kansas City Power & Light Co.
sale of
March 29 stockholders authorized
of preferred stock with a lower dividend rate and may
issue additional common stock (par $10) provided mar¬
Iowa Public Service Co.
Feb. 7, Harry B. Munsell,
^
.
.
Brothers; Union Securities Corp. and Equitable Securi¬
ties Corp. (jointly); Merrill Lynch, Pierce, Fenner &
Beane.
Proceeds—For
construction
program.
Bids—
Tentatively expected to be received on July 17. Regis¬
Probable underwriters
for equity financing:
par
-
,
Tennessee Gas Transmission Co.
that
30,000 shares,
be in
increasing the authorized common stock to 2,500,from 1,500,000 shares.
Company expects to
sell between 250,000 and 500,000 additional shares "at the
first favorable opportunity" through a public offering
through underwriters. The proceeds are to be used for
new plant and equipment and for working capital.
Tra¬
stated
money
soon
shares
March 30 it
issue:
indicated that it would
Sylvania Electric Products, Inc.
able bidders:
construction in
stock
.
(Inc.) (jointly).
•
new
common
(par
$18,000,000 of senior securities. Prob¬
able bidders:
Halsey, Stuart & Co. Inc.; Blyth & Co.,
Inc.; White, Weld & Co.; Lehman Brothers; Merrill
Lynch, Pierce, Fenner & Beane and Harris, Hall & Co.
the cost of
for
may issue $1,800,000
$10) to finance its new
expansion.
*
company
stock
underwriter—Paine, Webber, Jackson & Curtis.
Offering expected about mid-May.
*
above.
Glore, Forgan & Co. and Sterne, Agee & Leach (jointly);
New
announced
stated
was
*
with
market
•
was
r
,
ditional
Midvale Co.
•
See
Power Co.
it
^
Co.
Southern California Gas Co.
tive preferred stock which may be offered in exchange
for the present $36,056,700 of $6 preferred stock. Prob¬
26
Proceeds—For
,
Tube
it
April 4, Allen Van W.yck, President, reports that com¬
pany plans to raise $35,000,000 of "new money" ($12,000,000 in 1951 and\$23,000,000 in 1952) to cover part of
March
on a
stock issue
common
by The First Boston Corp.
April 4, the
000
-Montana-Dakota Utilities Co.
Chicago 5, 111., for the purchase from it of $6,800,000
equipment trust certificates, series EE, to be dated
April 1, 1951, and to mature in 20 equal semi-annual in¬
some
stockholders
shares held). Bonds
construction.
March 31 it
which, it is estimated, will cost $500,000.
program,
seven
be placed privately, with the
may
underwritten
new
common
share for each
one new
the
stock.
Medusa
March
(4/19)
the office of the company, Room 30, 135 East 11th Place,
cover
Electric Co.
oi
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly); Lehman
sold to
&
March 21 company applied to the New York P. S. Com¬
mission for authority to issue $5,000,000 of first mortgage
bonds and 150,000 additional shares of common stock
buttweld mill
Financing
plans +o sell addir
time to time for
money."
continuous
into northeastern Ohio for
gas
tentatively
was
announced company
was
tional convertible preferred stock from
natural
& Co.; Lehman Brothers; Harriman Ripley &
Inc.'; Shields & Co. and Salomon Bros. & Hutzler
(jointly); Blyth & Co., Inc. and Kidder, Peabody & Co.
(jointly); The First Boston Corp.; Kuhn, Loeb & Co.;
Union Securities Corp. and Equitable Securities Corp
(jointly). Proceeds—For construction program. Bids—
Co.
Illinois
Probable bid¬
vote on
Drexel
•
like amount of 3% bonds due 1956.
Halsey, Stuart & Co. Inc.; Glore, Forgan & Co. and
White, Weld & Co. (jointly); The First Boston Corp.
capital
Mississippi Power Co. (7/17)
- <
Feb. 6, it was reported that this company contemplates
the issuance and sale of $4,000,000 of preferred stock
(par $100). Underwriters—To be determined by competi¬
tive bidding. Probable bidders: W. C.-Langley & Co.,
stalments.
a
ders:
additional
April 2 stockholders increased authorized common stock
from 500,000 shares (no par) to 1,000,000 shares (par
Georgia Power Co. (6/5)
8 it was reported company may issue and sell
$20,000,000 of new first mortgage bonds. Underwriters—
To be determined by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Morgan Stanley & Co.;
Illinois Central RR.
fund
Pipe Line Co., Cleveland, Ohio
Feb. 15 FPC authorized this company to acquire, con¬
struct and operate pipeline facilities which will carry
Jan.
,
planned to sell
..
Shore
Lake
•
Castings Corp.
See Baldwin Securities Corp. above.
/"
If market conditions are favorable, it is also
»n additional $15,000,000 of bonds to re¬
program.
Kansas
■:
Steel
General
sale of 10,950 shares of $5 cumulative preferred
(no par) at $105 per share plus accrued dividends
share
$10,000,000 of new bonds this summer.
writers—To be determined by
Thursday, April 12, 1951
Pitney-Bowes, Inc.
Inc.
15, it was announced that company plans to raise
$1,075,000 in bonds to Stranahan, Harris & Co., Inc.,
Toledo, O., $225,000 in preferred stock and $150,000 in
Power Corp.
Florida
Kansas-Nebraska Natural Gas Co.,
Feb.
and
stated that the com¬
pany plans to spend $65,000,000 on plant expansion in
the current fiscal year ending May 31, 1951, and expects
to spend somewhat more in the following fiscal year.
He added, however, that no decision has been reached
on any possible financing in this connection.
Traditional
underwriter: Smith, Barney & Co., New York.
April 5, Leland I. Doan, President,
.
Inc.
stock
Chemical Co.
Dow
(jointly); Harriman Ripley & Co., Inc.; Salomon Bros. &
and Merrill Lynch, Pierce, Fenner & Beane
(jointly); Union Securities Corp. and Stern Bros. & Co.
(jointly). Probable bidders for common stock: Lehman
Brothers; Glore, Forgan & Co.; Harriman Ripley & Co.,
Hutzler
..
United
April 4 it
Stores
Corp.
stated stockholders will vote April 24 on
authorized $4.20 non-cumulative preferred
stock to 1,200,000 from 1,031,856 shares and the common
stock to 1,808,144 from 1,640,000 shares.
was
increasing
Utah
March
8
Power &
it
was
Light Co.
announced
company
during
1951
pror
to issue and sell 200,000 shares of common stock
and estimated $10,000,000 of first mortgage bonds. Under¬
writers—To be determined by competitive bidding. Prob¬
poses
able bidders:
(1) For bonds: Halsey, Stuart & Co. Inc.;
,
i
Volume 173
Number 5002
.
.
.
The Commercial and Fin
ial Chronicle
47r
(1575)
Kidder,
Peabody
Stearns
2
&
Co.
Lehman Brothers, and
Co.;
&
Bear,
sale
(jointly); White, Weld & Co.; Salomon
of
used
$4,000,000 of 20-year sinking fund notes, to be
toward
Washington Gas Light Co.
expansion program.
March 8 it
*
Bros.
&
Hutzler; First Boston Corp., and Blyth & Co.,
Inc.
(jointly); Union Securities Corp., and Smith, Bar-
ney
& Co. (jointly); and (2) for stock: Blyth & Co. Inc.;
*
W. C.
ly);
Lehman
V Kidder,
Corp., and Smith, Barney & Co. (joint¬
Bros.
&
&
Peabody
LFenner & Beane
Bear,
Co.,
Stearns
and
(jointly).
&
Merrill
Proceeds
Co.
Lynch,
Webster Securities
Pierce,
struction
To repay bank
—
Corp., New York. Proceeds—For
Offering
program.
Co.,
Inc.; Smith, Barney & Co. and White, Weld & Co. (joint¬
ly); W. C. Langley & Co. and The First Boston
Corp.
con¬
(jointly).
June.
sell
was
March
announced company
100,000 shares of
new
plans to issue and
19
stockholders
stock from
convertible second preferred
stock
Underwriter—F. Eberstadt & Co., Inc.,
(par $50).
New York.
stock
Proceeds—Together with funds from private
Treasury
the
for
controversy
and
since
between
Unsettlement has had
decidedly
sobering effect on the new debt
issue business with a number of
offerings having 'en¬
rough-going in recent
weeks. This
not
was
exactly
sur¬
prising
when
consideration
is
given to the change in yield basis
that
The
feeling
is
growing
in
sharp ad¬
justment of values and yields to
5
;
r
^
i.
A
in¬
vestment circles that the
conform with the
new monetary
pattern has been about completed.
The current behavior of top-grade
corporate liens, it is argued, tends
to bear out this observation.
has
turn
about.
come
market has
yields
points.
on
undergone a scalingprices that has raised
an average
Triple
about
2.64%
a
of 25 to 30 basis
issues
A
2.87%
early
in
make
totals
are
basis
now
3.05%.
basis
points
higher
with Commonwealth
1977
having
2.67% basis to
in
yield,
Edison
risen
Co.'s
from
current yield
a
,
April 16.
Price—$1,15
share.
per
com¬
Underwriter—Beer &
Y.'s 3s of
around
Edison
1972
2.90%,
rule around
at
actual
the
amount
course
in
a
price,
of
for sale
and
dealers'
dealers
some
DIVIDEND NOTICES
THE COLUMBIA
Co.
GAS
SYSTEM, INC.
of
The Board of Directors has declared this day
Franklin Stores
now
the
following regular quarterly dividend:
CORPORATION
COMMON
the year.
Common Stock
No. 66, 20<f per share
DIVIDEND
payable
on
May 15, 1951,
holders of record
to
'
The
while
Biding Their Time
A's average
2.94% cur¬
During the last few days there
The disturbance marketwise has
rently against about 2.70% earlier
has
been
growing
evidence
of
upset the planned schedules of
with
single
classifications
cautious interest on the
now
more than
one
part of
prospective cor¬
investors who, for weeks, have averaging around 3.03% which is porate borrower but
investment
up from around a
been standing aside waiting for
2.82% basis.
bankers are confident that such
signs of renewed stability.
;
plans will be reshaped later to
;
High-Grade Yields
'
The seasoned market has
meet the adjustment.
been
What has happened in some
of
thoroughly shaken down since the the top-rated
Largest single issue affected is
utility issues is in¬
Board of Directors of Frank¬
Stores Corporation have this
lin
date
declared
regular quarterly
a
at
close of business April 20,
1951.
Dale Parker
April 5, 1951
Secretary
dividend of twenty cents (20c)
per
share on all outstanding common
stock
payable
on
stockholders
to
April 27th, 1951,
of
record
April
■
^
♦
-
turn
of
period
the
of
year
the
through
Federal
the
Reserve-
dicative
of
the
general
;things.,, American
trend
Telephone
of
"&
i '
Celanese Corporation of America's
19th, 1951.
MARCUS
new de^
bentures. This has been postponed
GOULD-NATIONAL
Tennessee
Transmission
Co.
will
plan
to
additional
sell
common.
-
cisco, President, National Security Traders
Association, Inc.
Tickets
are
$14
per
The
NOTICE
Paul, Minnesota
February 7, 1951
board of
Directors today de¬
clared a dividend of
a
share
Common
on
Stock, payable May 1
to shareholders of
record
nicipal "blue list" these days, be¬
lieving that it does not say half
of what it really should.
April 20, 1951.
In short the conviction is
strong
a. h. daggett
President
among seasoned observers that the
list, which normally reflects
cumulated
unsold
ac¬
issues
on
>
dealers' shelves, does not
momen-
person.
.
MEETING NOTICES
Reservation
Committee:
Thomas
NORFOLK
NOTICE OP
SECURITY TRADERS ASSOCIATION
OF
NEW
YORK
Security Traders Association of New York
Bowling League standing as of April 6 is as follows:
elect
meister
18
Frankel
Julie Bean
11
11
has his te&m keyed
term
of
W.
COX, Secretary.
13
12
15
12 ^15
11
16
11
16
10
17
9
18
up
and
QOND CONSECUTIVE DIVIDEND
Dye Corporation
OF
The Board of Directors declared
1951,
(
share, payable June 1,
Stockholders
vote
not
of record
as
of
the
close
MarchU5>: 1951,f Will be entitled
at this
of
to
meeting. The transfer books will
The Board of Directors
Treasurer
April 9,1951
KING, Secretary
has
declared
dividend
cents
Financing the Consumer through
na¬
tion-wide subsidiaries — principally:
Public Loan Corporation
Loan Service Corporation
Ohio Finance
Company
General Public Loan
be closed.
W. C.
COMMON DIVIDEND
to stockholders of record
D. L. BARNES, JR.
Meeting of the Stockholders of
& Dye Corporation will be
hold at the principal office of the
Corporation,
No. 61 Broadway, Manhattan Borough, New
York City, at 1 P.M., on Monday, April 23,
1951, for the purpose of electing directors for
the ensuing year and fer tile transaction of
such other busirtesS as may
properly come be¬
fore the meeting.
v
business
WOOD
CELLULOSE
cents
May 15,1951.
Chemical
HIGHLY
PURIFIED.
regular quarterly dividend on
per
Broadway, New York 6, N. Y.
PRODUCER
ON COMMON STOCK
The Annual
12
14
OF ILLINOIS
three
To the Stockholders:
Allied
race.
They won three games.
(Singer, Bean & Mackie) had high game of 202.
L.
Allied Chemical &
61
H.
Mewing (Capt.), Klein, Cohen, Manney, Ghegan
(Capt.), Manson, King, Vocooli, G. Montanyne—
Serlen (Capt.), Gersten,
Gold, Krumholz, Young__
Leone (Capt.),
Krasowich, Nieman, Pollack, GavinBean (Capt.),
Kaiser, Growney, Gronick, Rappa
H. Meyer (Capt.),
Smith, Farrell, A. Frankel, LaPato—
Krisam (Capt.),
Bradley, Montanyne, Weissman, Gannon
they lead the second half
a
NOTICE OF ANNUAL MEETING
16
Burian
(Dunne & Co.)
for
the Common Stock of 40
10
15
Kumm
Directors
INVESTMENT COMPANY I
a
9
17
16
(Capt.), Lytle, Reid, Kruge, Swenson
j,
(Capt.), Casper, Valentine, M. Meyer,
three
.
Stockholders of record at the close of business
April 20, 1951, will be entitled .to vote at such
meeting.
*
By order of the Board of Directors.
Won Lost
(Capt.), Weseman, Tisch, Strauss, Jacobs
Greenberg (Capt.), Sullivan, Stein, Wechsler, Siegel____
Donadio
(Capt.), DeMaye, O'Connor, Whiting, Work-
William
to
years.
(STANY) '
Kumm
1951
MEETING
The Annual Meeting of Stockholders of Nor¬
and
Western
Railway Company
will
be
held, pursuant to the By-laws, at the principal
office of the Company in Roanoke,
Virginia, op
Thursday, May 10, 1951, at 10 o'clock A. M.,
.
TEAM
Goodman
ANNUAL
folk
*<
The
RAILWAY
April 4,
OF STOCKHOLDERS
Reservations Committee: Bernard
Weissman, Siegel &
Co., Joseph M. Kellev. J. Arthur Warner &
Co., Inc., Wilbur
Krisam, Geyer & Co., Inc., and Salvatore J.
Rappa, F. S; Moseley. *
*
WESTERN
COMPANY
Roanoke, Virginia,
Hotel
Co.
AND
.
Greenberg,
C. E.
Unterberg & Co., John C. Blockley, Harris, Upham &
Co., Joseph
C. Cabbie, Abraham &
Co., and David J. Callaway, Jr., First of
Michigan Corp.
Hunter
St.
'*
arrangements
Dinner
&
DIVIDEND
^
The Street is casting rather du¬
bious glances at the so-called mu¬
Mullin, Tucker, Anthony & Co., is Chairman
committee, assisted by James V. Torpie,
Torpie & Slatzman, Vice-Chairman.
:
/
V
the
Batteries
Seventy-five Cents (75c)
Municipal Blue List
Daniel Gordon
of
Industrial
forego of¬
400,000 shares of
INC.
Manufacturers of Automotive
Gas
fering of $10,000,000 of new cumu¬
lative preferred
pending a better
market, but is carrying through
its
BATTERIES,
and
Meanwhile
SECURITY TRADERS
ASSOCIATION OF NEW YORK
The 15th Annual Dinner of the
Security Traders Association
of New
York, Inc. will be held Friday evening
(April 13) at the
Waldorf-Astoria Hotel, New York
City, at which Leslie Barbier,
G. A. Saxton & Co.
Inc., President, will preside.
Approximately
1,400 members and guests will be
present.
Richard B. McEntire and Paul
R. Rowen, members of the
Securities and Exchange
Commission, are expected to attend the
dinner. Also prominent
among the guests expected at the
gather¬
ing are John J. Mann and Edward T.
McCormick, Chairman and
President, respectively, of the New York Curb
Exchange; Frank
J. Coyle and Charles
Klem, Vice-Presidents, New York Stock Ex¬
change; and John F. Egan, First California
Company, San Fran-
April 9th, 1951.
projected $100,000,000 of
doned. But the company plans to
proceed with the sale of $100,000,000 of new preferred stock.
Notes
RUBENSTEIN,
Secretary Treasurer
Dated
indefinitely if not entirely aban¬
NSTA
so
a
currently yield
from 2.70%
turn
are
nonetheless,
should be figured in the total.
of
up
*
'
Of
at
may be inclined to look upon part
of their holdings as "investments"
2.85% basis against
a
only about 60% of
cover
for the time being. But the Street
knows that the bonds
DIVIDEND NOTICES
while Boston Edison's issues
2.60%
the
hands.
2.94%.
Consolidated
N.
(4/16)
reported sale of 260,000 shares of
shown from week to week
recently,
Pacific Telephone & Telegraph's
3^4s of 1974 now average about
against
January,
around
averages
of
pre¬
stock to residents of Texas
only is contemplated on
mon
con¬
was
straight term loans tarily give an accurate picture of
example were selling on a that situation.
2.80% yield basis early in Janu¬
Some venture the guess that the
ary.
Now the indicated return
3s
com¬
a
Co., Dallas, Texas.
Double
<
additional
if it should be
and
as
available
March 26 it
Telegraph's
25
Registration" in
Wyoming-Gulf Sulphur Co.
common
for
the
high-grade
in
to
"when,
around
survey reveals that since
of the year the
down
authorized
sidered advisable."
reported agreement
agencies.
high-grade
order
issuance
those
countered
increased
600,000 shares (499,016 shares outstanding) to
1,000,000 shares in
'
in
ceding column.)
Wagner Electric Corp.
Victor Chemical Works
March 30 it
(See also registration of 122,400 shares of
stock under "Securities
mon
"loans and to provide additional construction funds.
*
issue ap¬
obtain bank loans (or
or
ders for bonds: Halsey, Stuart & Co.
Inc.; Blyth &
Tentatively planned for
—
announced that company
may
some combination
thereof) during 1951 and apply the
proceeds toward its construction program. Probable bid¬
—
(jointly);
was
proximately $9,000,000 of bonds
March 6 directors announced tentative
plans for the sale
of approximately 450,000 shares of
additional common
stock to common stockholders at
rate of one new share
for each 10 shares held.
Price—To be determined by
market and other conditions.
Underwriter
Stone &
Langley & Co., and Glore, Forgan & Co. (jointly);
Union Securities
-
Virginia Electric & Power Co.
a
quarterly
of
seventy-five
(75(f) per share on the
Common
Stock, payable
May 15, 1951 to stockhold¬
ers
of record at the close of
business April 27, 1951.
>
R. L. LINGELBACH
Corporation
Secretary
Dated, March 15, 1951.
April 3,1951
-
43
The Commercial and Financial Chronicle
(1576)
..
Thursday, April 12, 1951
.
v-
tions,
BUSINESS BUZZ
from the Nation's
/§ fl/~f
WASHINGTON, D. C.—One of
and
fussin'
feudin'
the
many
month
a
the
$1.5-billion
defense
housing bill, if it finally becomes
law, will not expand FHA's lend¬
between
ing capacity outside of designated
its
height, all ready to go to
is bound up in the appointment of
again as Chairman of JEC
subcommittee to hold forth with
Rep. Wright Patman (D., Texas)
more
to head a Joint Economic subcom¬ some
public
hearings to
monetary field in
in-
payments
the Reserve and the Treasury was
at
of
insure, and from monthly
on
principal of out¬
standing loans.
JL Cr
Even
the sharpest curves pitched in the
total
ments to
d\TI f
jljL § HI
Capital
FHA's
able, FHA by May 1 will be re¬
duced to insuring loans only as
it "recaptures" present outstand¬
ings. This "recapture" could come
about by cancellation of commit¬
on..
Behind-the-Scene Interpretations
boosts
sured home mortgage credit allow¬
defense
areas.
work
(This column is intended to
re¬
flect the "behind the scene" inter¬
mittee to study the whole subject
bring out the virtue of the "Fed's"
pretation from the nation's Capitalt
of
case.
and may or may not coincide with
credit
and
control
debt
man¬
agement.
Rep.
Instead,
has
Patman
been
con¬
a
in
the "Chronicle's"
Senate leadership
the
told
effect
Mr.
Douglas to
stant critic of the Federal Reserve
peddle his apples, and at that time
System. It would probably be no
exaggeration to call him a "foe"
of the Reserve, and his criticisms
in public committee hearings over
the years have been vehement.
refused
/ For one
thing, Mr. Patman
con¬
siders the whole Reserve System
to
in
recreate
introduced
Senator
subcom¬
States Power Stock
So the Illinois
mittee of the 81st.
resolution
a
Blyth & Co. Inc. and Dean Wit¬
proposing to assert in law the
paramount position of the Federal
nine
Some
Reserve.
other
ter
& Co. are publicly reoffering
today (April 12) 150,000 shares of
Sena¬
Power
Proceeds
it.
man's opinion, is a governmental
In
'
•vv:'
of
February
subcommittee
nomic Committee
another
1950
the
of
i
Joint
Eco¬
forth with
came
named
first
the
also
member of the House
a
ever
thought grown
Chairman
become
up
of
a
This
1949-50.
committee
was
headed by Senator Paul H. Doug¬
las
(D., 111.), then and now a
(Special
"That
•*
*■
JEC sub¬
of the
the
next
more
*
*
printer
never
of
that
considerations
*
monetary management
predominate
interest
of
of
ment
as
in
the public
should
its head, is that certain influential
considerations
over
rates
subcommittee with Mr. Patman
elements in the Senate leadership
the
manage¬
debt*
about the March 6 agree¬
are sore
ment between the Federal Reserve
his views and the Treasury, with its indica¬
recommendation, tion of higher short-term rates and
and a further recommendation of its contingent possibility that de¬
the subcommittee that there be spite announcements that it won't
Patman
Mr.
known
on
created
made
that
National
happen, eventually
the
by the
$1,245,000
of
additions and
gets anything straight!"
six
months
total
will
ticularly in the period
than $39 billion.
committee
be
able
If
such
in
this
we
in,
are
about being independent with re¬
case
will
spect to your judgment
cause
the
of
not
to
we
all
are
framework
the
have
be¬
per se
working within
of
the
Employment
all
We
objectives
Act
of
Senator
as
The
Financial
Chronicle)
Bankers
—
*
Ralph
Flanders
Sole
(R., Vt.), Rep. Jesse P.
(R., Mich.) or Senator
Douglas himself, also members of
the subcommittee, are present and
account for themselves, then the
Wolcott
with
Officers
are
D.
I.
secretary-treasurer.
Also
firm
associated
are
with
the
new
William E. Davis, Julian
Fortney, Jr., Robert E. Nelson,
Sr. and William Bannister Speaks.
the
Mr.
U. S.
British
the
in
and
Fortney
was
previously with
W. L. Lyons & Co.
prospective
seizure of the Anglo-Iranian prop¬
Joins McDaniel Lewis
erties in Perisa, is to guarantee a
continued flow of Iranian oil, it
the 1Vi%
business.
Boyle, president; G. R. Snyder,
vice-president; and B. G. Norris,
E.
the
about
ties
#
n
objective of
parleying
Iranians
Building to engage in the securi¬
1946.
concept of stabil¬
a
hog the show, as did
Douglas when he was chairman. ity," Mr. Martin said.
men
to
LEXINGTON, Ky.
Securities Corp. has been formed
with offices in the Central Bank
On the other hand, it may work
champion of the Federal Reserve
So one certain interpretation of
that
contrary to the customary
viewpoint.
The Douglas report the action recreating the monetary
practice, the chairman of the sub¬
recommended
of
Bankers Securities Corp.
was
enough to
its name, a joint committee
House and Senate.
sale
improvements to property.
report, after several weeks of
hearings in the fall and winter of committee, although the JEC is by
a
the
from
company
to retire
bank loans and for
time,
that
recently awarded at
bidding.
Reoffering
share.
per
stock will be used
common
than
Senator
the head. It is
incidentally,
rather
Patman,
Douglas,
Co.
competitive
price is $11
the Treasury, the banks
Now there comes along a new
create
deposit money, and the
creation of money, in Mr. Pat- monetary subcommittee with Rep.
activity.
stock of Mountain States
common
tors
went
along as co-sponsors,
just a scheme for bilking the
but this poor little resolution had
taxpayer out of the interest paid
no
place to go, all committee
on
government ■ bonds held ~ by
homes being somewhat hostile to
member banks.
Through lending
as
money to
'
Bankers Offer Mountain
82nd
the
the monetary
Congress,
views.)
own
t
go
(Special to The Financial Chronicle)
top Patman hearings may work out to
Council
to
The fact that be
coordinate
domestic
just a nice running debate is stated.
GREENSBORO, N. C.—Calvin
credit matters in a manner anal¬ Douglas was cold-shouldered and
This amounts in the neighbor¬ D. Alexander is with McDaniel
among members of Congress, with
ogous to
that in which interna¬ Patman tapped, underscores this no conclusion
being arrived there¬ hood of 450,000 barrels of pe¬ Lewis & Co., Jefferson Building,
a
Monetary
rate will be busted.
tional
monetary
ordinated
policies
through
Advisory Council.
the
are
co¬
motivation.
on.
#
National
'
If
The Texas Congressman's
the
*
Federal
troleum
#
*
Reserve
should
It
get the idea that the Treasury and the
was
❖
*
about
products
100,000
day, plus
of crude.
per
barrels
generall overlooked, but
A
•4C
reac¬
was ex¬
the
Administration
Chairman of the Federal
have
tion
proposals do not make the Federal
Reserve System
sufficiently re¬
sponsible to the Executive De¬
It
be
doubted, however, and McCabe had come to adopt
Treasury was the gent the objectives of the Employment
may
that
the
who pinched the Federal Reserve
partment of the Federal Govern¬ lady in the elevator.
ment.
In
regulating
creating money and of fact the
supply of money named Feb.
As
26
to
a
of
1946
over
the
to
The
Financial
the
of
some
statutory
Anglo-Iranian
works
as
did
years ago
messes
up
PORTLAND,
Gordon
Chronicle)
and the U. S. at
have
a
a
For
Large Appreciation Potential
WE
present, it is said,
margin of refining
100,000 barrels of
any
little
Iranian
CLASS B (common) STOCK
r
A
leading
in
It is reported to be the belief on
Atlantic that the
this side of the
only solution which would be ac¬
cepted is the adoption of the 50ment's economic program.
lance venture of
certain influ¬ erad Reserve policy.
50 profit split above royalties, and
"He believes therefore that
steps ential elements in Congress in a
After responding that he would with better pay and community
should be taken to increase the
position to make their views felt.
fight such pressure, Mr. Martin benefits for the Iranian workers.
responsibility of the Federal Re¬
It is noted that like the parent
it
*
*
serve
System to the Executive JEC,* the Patman subcommittee added, "But the point I want to
make there is that I think you
Unless Congress once more and
Department. Though he advises has no power to initiate
legisla¬
as
proposed in this report the tion.
No matter what he might should be extremely careful, par¬ on top of many similar such ac¬
SUGGEST
RIVERSIDE CEMENT CO.
capac¬
a
deficit.
r
associated
with F. L. Putnam & Co., Inc.
deficit. This
ity which could meet only
over
Payson
—
in Mexico, then to
that extent there is
credit, the Federal Reserve trotting out the Emergency Bank¬ ministration "party line" of "sta¬
is
performing
a
governmental ing Act of 1933 to clamp a lid on bility" at a constantly rising stand¬
function; yet even issues Federal total loans and at the same time ard of living.
Reserve notes which become ob¬ to put the operation of the Fed¬
Senator
Everett Dirksen
(R.,
eral
Reserve
ligations of the United States.
system under the
111.) had been pressing Gov., Wil¬
"Moreover, it is now possible Treasury via the orders of the liam McC. Martin as to what he
for the Federal Reserve to follow President, has quietly folded its
would do in the event of intense
policies that would conflict with, tent and stolen away.
pressure from
the Truman Ad¬
and perhaps
This was probable a strictly free ministration in conflict with Feddefeat, the Govern¬
become
nationalization
matter
and
has
Maine
with Schirmer, Atherton &
Co., 10
Congress Square. He was formerly
objectives of the Federal Reserve would immediately
throw
that
committee, Act. The Employment Act of 1946 much added burden upon the
recommend in fact has given rise to the Ad¬ Western
Hemisphere oil. Europe
Wilson
the
Act
(Special
and to power
the transports tak¬
pulled Reserve Board paid homage to the ing away the refined products.
pressed in the third person in the this as a sabotage of the agree¬ Employment Act of
The refined products are chiefly
1946, in the
form of a footnote to the
Douglas ment, then there is danger that the course of the hearings on his bunker fuel and kerosene
for
fussin' and the feudin' will start
report, and read as follows:
nomination. The Federal Reserve India and Europe. If nationaliza¬
"
"Mr. Patman believes that these all over again.
Board
under
Governors
Eccles
^
tion to the Douglas report
new
Schirmer Atherton Adds
The 100,000 barrels is used locally,
producer
fast-growing
of
cement
Southern
California.
Analysis of this Company
a
and
review of the Cement Indus¬
'
establishment
of
lieve that it wll make the
Federal
Reserve
sufficiently
responsible
to the Executive."
What
better
.
the JEC is, is one of the
public
forums
where
-
high and the low, the learned and
is taken
ment.
,
One
of
of
this
Douglas
line
the
*
significant
situation
is
that
people
in
likely to
the
or
the
take
public
that
bond
market
seriously
cracks
official
are
Selling about
$12.25
LERNER & CO.
Investment
10 Post Office
Securities
Square, Boston 9, Mass.
Tel. HUbbard 2-1990
at
"■ *
$
/1
A
I'
ESagj
Allied Electric
FIRM TRADING MARKETS
foreign: securities
some
made
by
of
this
Congressman,
diminishing considerably the pros¬
aspects pect
Senator cool
that
off
the
and
Products
Prospectus
on
request
Marks & C2JNC
FOREIGN SECURITIES SPECIALISTS
or
bond
settle
market
down
can
before
the head of the June
15, when the Treasury starts
earlier this year the
a round of
refinancing that, for
was
when
*
aBpgjSa
^
over
lock, stock and barrel by the po¬
litical or Executive arm of govern¬
*
request.
the
So there it is laid on the line: the
unlearned, come forth and
However, you do it, be sure that
sound off.
In the process many
Federal Reserve
;
on
a
monetary and recommend,
Mr.
Patman
will
credit council to be headed
by the have as tough a time getting either'
Chairman of the Council of Eco¬
Banking committee to take up his
nomicAdvisers,' he does not be¬ proposal, as did Senator Douglas.
"t
try available
50 BROAD STREET
.
NEW YORK 4, N. Y.
TEL HANOVER 2-0050...TELETYPE: NY 1-971
Hill, Thompson & Co., Inc.
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70 WALL STREET, N. Y.
Tel. WHitehall
4-4540
S
@FedFRASER