Full text of Commercial and Financial Chronicle : April 16, 1959, Vol. 189, No. 5838, Section 1

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

PUBLIC

UTILITY INDUSTRY FEATURED

IN THIS ISSUE in 2 Sections

-

U

19S

''s^^Mr/o/y

Reg. V.«. Pat. Office

Number 5838

Volume 189

New York

'

v.-(

We
It

Nuclear Power

■

"Despite the ballyhoo that accompanied recent
announcement
ment

And

Development

Country's atomic

energy

By ELMER L. LINDSETH*

States at

except

a

executive administrator is

tives

recession,
"The

picture. Certainly, well-staged propaganda
will not solve the problem or

bring relief to the 4,360,000 unemployed workers
and their families.

problem of people,

a

and children rather than

a mere

statistic."

There

is

a

challenge

at hand.

Federal Government

towards

the

later

nomic

the

outlook

must

all work for

progress.

and

programs, doctrinaire ar¬
guments about public versus private

Responsible for What They Excoriate

to

years

of course, staged by men who
major share of the responsibility

well

may

jeopardize

Elmer Lindseth

our

come.

Therefore,

speaking

for

Continued

the
on

26

45

address by

appear

of

Edison

the

of the Investment

Association

Bankers

America

of

State and

UNDERWRITERS

Municipal

;

^

STATE

and

and

MUNICIPAL

Lester, Ryons & Co.
623 So.

Hope Street, Los Angeles 17,

DISTRIBUTORS

Securities

vTELKmoNE:

-

,

'

,

l

ENT

Members Pacific Coast Exchange

SECURITIES

Offices in Claremont, Corona del Mar,'

THE FIRST NATIONAL CITY BANK

BANK
//

30 BROAD ST., N.

Burnham and
MCM.EHS NEW VOUK

15 iROAD STREET,

Pasadena, Pomona, Redlands, Riverside,
San Diego, Santa

OF NEW YORK

Company

NEW YORK 5, N. Y.

•

014-1400

California

Teletype: NY 1-708

Bond Dept.

Ana, Santa Monica

Inquiries Invited

«TOCK CXCHAN«E9

AND AMERICAN

New York

on

■

Southern

Securities

—

-f

i

-i-

.

,

■

•

Net Active Markets

Distributor *

Dealer

'

>

To Dealers,

T. L.Watson &Co.
Meiftbers
New York Stock

1', V

rnhfignffltf

nnji;1'!,

'.""y'/jja

TIRST




Exchange

25

Block

Inquiries Invited

CANADIAN

Stock Exchange

BROAD

STREET

NEW YORK 4, N. Y.

DEPARTMENT

DIRECT

WIRES TO

•

PERTH AMBOY

DoxraoTf Securities

MONTREAL AND TORONTO

grPORAXIOTI

Goodbody & Co.
MEMBERS NEW YORK STOCK EXCHANGE

BRIDGEPORT

BONDS & STOCKS

Principal Properties

Teletype NY 1-2270

<^<KlthlO€4t COMPANY
DALLAS

CANADIAN;

United

'//
'y.

/.

Banks and Brokers

1832

ESTABLISHED

'

Maintained

•

American

j

Bonds and Notes
.

.....

f

115 BROADWAY
MEW YORK

40

Exchange Place, NewYork5,N. Y.

1 NORTH LA SALLE ST

CHICAGO

Teletype NY 1-702-3

.

...

;

BOND

'

f

DEPARTMENT

the

Chase Manhattan
BANK

Correspondent—Pershing & Co.

TELETYPE NY 1-2M2

CA(U> CO.U.NHAM

Underwriter

' "

;

Eacino, Glendale, Hollywood, Long Beack,

CORN EXCHANGE

iT
DEPARTMENT

33

,

i

Associate Member American Stock Exchange

HAnover 2-15700

CHEMICAL

page

Members New York Stock Exchange

of

I NVESTM

IHJNB

California

.

>

on

Public Housing Agency !

'

:

are

State, Municipal

in SECTION TWO of today's issue.

and

Housing,*

utilities

by Mr. Lindseth before the 27th Annual Convention
Electric Institute, New Orleans, La., April 7, IMS.

I1. S. Government,
Public

ex¬

ISSUE—Candid photos during: the course of the three-day 24tli An¬

IN THIS

nual Convention of the Texas Group

in

r

electric

Continued
•An address

Mr. McCone before the 27th Annual Convention
of Edison Electric Institute, New Orleans, La., April 7, 1959.
♦An

f

participants are in operation; 10 utility-sponsored proj¬
ects are under construction or in various design stages;

Atomic
page

which

in

ects

Some day this may become an issue—it need
issue in the atomic power business now or for

The show was,

of electric power.

pansion.
Within government, there
began to take shape long range na¬
tional objectives for nuclear power
development and certain steps in a
technical program to achieve these
objectives. Also emerging was some
clarification of the respective roles
of government and industry in the
future course of nuclear power de¬
velopment.
Today, three nuclear power proj¬

Tam

opmental
power

source

dustry
substantial progress and further

objective. This is a development job;
and now, when we are struggling to
formulate rapid and sensible devel¬
John A. McCone

ap¬

technological front, our in¬
program continued to show

common

a

•

On the

of

At this point

i

ex-;

past year, the industry and the nation
vigorous, expanding program of nuclear
power development, aimed at mak¬
ing nuclear energy a practical, eco¬

I will explain why.

on

We

us.

by

encouraged

not be an

PICTURES

goal

road ahead of

present, or at least their leaders, to
that the plight of the unemployed
in this country was a direct consequence
of
faulty national economic policies, including, of
course, any and all efforts to balance the Federal
budget. A few members of the Democratic party
in Congress added their voice to the denuncia¬
tion of the President and his party.

DEALERS

a

'

well.

as

the

During
continued

competitive
nuclear power as rapidly as pos¬
sible. We have a hard and expensive

make it appear

page

our

am

the

sentatives

on

of

during 1958 and indicates extent and

power

for putting the shoulder to
wheel
and
making
progress

I

the aim of the union repre¬

Continued

speak

and further

i

velopment in reviewing some of the clarification M has
taken place as to the respective roles of government and;
industry in nuclear power progress. The Cleveland ntiBty
head emphasizes there is no need for governmental fur¬
therance of public power, atomic or conventional—par¬
ticularly if we are to achieve feasible nuclear pewtr to
next 10 years, and provides extensive data on the to- V
dustry's nuclear power investments and projects.

program. This challenge must be
by all of the power industry,
both public and private, and by the

the occasion of the AFL-CIO Washington
unemployment demonstration which, it is under¬
stood, Mr. Meany did not want in the first place.
The verbal barrages which Mr.
Meany thus
opened really got under way the next day, at

a

I

4}
" /

proximate time the AEC will predominate in reactor de¬

met

upon

was

now

atomic

nation's atomic power

George Meany, one of the big
union bosses, in effect, opened the firing

have to bear

presents an

men,

With these words,

which time it

agreement;

.

building of plants without government assistance.

"Unemployment is

labor

which there is broad

to

J

;

pansion by private utilities toward achieving ecoBMncal

Mr. McCone lists five objec¬

progress to date; and discusses such future
problems as (he feasibility of building prototypes instead
of large plants and the imperative need to be highly
selective as to particular plant concepts industry and
government should support. The AEC head pledges every
encouragement to industry and sees as the final goal the

announcements

women

an

Mr. Lindseth reports vigorous progress

inventory of

drop in unemployment was mostly sea¬
no appreciable improvement in the

sonal. There is

overall

Atomic Power
■

con¬

and

Illuminating: Co.

on

-

will be competitive in the United
earlier date than some think. Quite aware

of the need for this power,

in the depths of the

were

v/e

Electric

..

March since the end of World War II.

when

Look at the Future

The Cleveland

President,

vinced atomic power

ago

a

Chairman, E.E.I. Committee

ployment in March was higher than in any other

year

«

Status of Atomic Power

Chairman, United States Atomic Energy Commission

figures, the hard fact remains that unem¬

Copy

.

By JOHN A. McCONE*

(by the government) of unemploy¬

a

,

*

Government's Role in

As

-

:

•

EDITORIAL

Price 50 Cents

7, IjL Y., Thursday, April 16, 1959

WHitehall 4-8161

2

The Commercial and Financial Chronicle

(1726)

The

Brokers, Dealers only

For Banks,

Over 35

participate and give their

experience

years

Large Trading Department

they

Research

Treat

Amos

&

Telechrome

System
serve you

when

you

New York Hanseatic
Established

Dept.,

Associate

American

Exchange

Teletype NY 1-40

BOSTON

PHILADELPHIA
Wires

CHICAGO

•

SAN FRANCISCO

to Principal

March

E 1

19,

to

e

Cities

!

of

industry

in the lead off

article by the.)
President of a
,

& CO.

INC.

Members

N.

7.

Security Dealers Ass'n

Render
in

a

brokerage service

Unlisted

all

Securities

Charles

for Banks and Dealers

T.

Greene

•

captioned
—"The Sky Does Not Limit the
Future
of Electronics."
This, I
take it, is not merely a manner of
speaking; but a recognition of the
present developing phase of the
industry in the exploration of the
limitless
vastness of interplane¬
stocks,

tary space.

was

-

Man, for thousands of years, in
his search for "The Why and the
Wherefore" of existence has

been

pushing the frontiers of space fur¬
40

Exchange Place, New York 5
Phone: WHitehall 3-7830

Teletype No. NY 1-2702

ther and further outward from his

original earth-bound position, but
in many areas of thought has not

yet adjusted himself to the farreaching possibilities in nuclear
science, currently being intens¬
ively explored.

Trading Interest In

This

leads

to

first general

my

observation that most of

us

fail to

relate the present

American Furniture

Bassett Furniture Industries

depreciation in
the buying power of our earthbound currency and certain his¬
toric

Life Insurance Co. of Va.

Commonwealth Natural Gas

ratios, as the measure of the
a security, to the greatly
enlarged sphere of man's specula¬
value of

tion and achievement in the realm

of Scientific Research.

STRADER and COMPANY, Inc.
LYNCHBURG, VA.
LD 39

—5-2527—

TWX LY 77

Wire

York

Private

to

New

City

was

the

BEECHAM GROUP
LTD. A.D.R.*

considered to be high

if
the
general ratio of selling
price to earnings rose to or above
17. I recall, of course, that certain
technical
stocks,
like
General
Electric, whose slogan is aptly

construction

of the

av¬

without throwing us into a
panic because of the apparent in¬

erage

flation.

ing power of our dollar now is
only 42 cents instead of 100 cents,

constitutes
relation

ELLIOTT

our

ideas

present

a

color in television.
ever

critic

a

vision

refers

to

*Review of

current

developments

as

some

to what

compatible

of

market
price to net
A suggested multiplier
could be 21/2 which would indicate

available

on

request

Today,- when¬

portant

that

remarks

few

those

black

and

who

reception.

55

Exchange

Liberty St., New York 5

Tel.: BE 3-8880

Teletype NY 1-4686

Private Wire System to Canada




new

talization

is

The capi¬
is di¬

of television in color is still in its

the

of

entitled

to

a

record of the years

way,

increase

an

in earnings

market value of Telechoihe to the

offices

JAMES

A.

in

1954

rose

to

Palo

Great Northern

movement

This

triguing
time

with,

a

relatively

low

value.

Conceded that many
financial statements now show, in

values

market

"black

from

primacy in television, the Com¬
pany has broadened the field of

earning

the

who

does net
to

give adequate recognition
the fact that, while "Research

Is

Our

Important Product"

to

allude again to
the General
Electric slogan, it is a product
pri¬
marily not for sale; but it, too. is
retained in the business.

while
that

it
our

,

is

generally

Federal

and

elec¬
of

TV

receivers

capable

of presenting pictures in
color," the sales of the
company
as
most
recently re¬

"living

overtaken

at the rate of

business, yet

of

number

have

to

power

field

broad

ported for the abortive

in the

According
available to

to
us,

those

re¬

1954.
report

year

the latest
sales aire running

$1,600,000 to $1,800,-

000 for the year to end

this

com¬

ing June 30. But due to increased
operating costs, per share earnings
may not

ported
$1.06

that,

be in

for
per

the

sales,

excess

the

past

class

A

net

likely to be

not

Affiliate

of

Tokyo, Japan
Brokers

111

&

Investment

Bankers

Broadway, N.Y. 6 COrtlandn-WM

Opportunities Unlimited
IN JAPAN
Write

for

our Monthly Stock;
Digest, and our other reports
that give you a pretty clear '
picture of the Japanese
economy as a whole.

Nomura Securities Co.;
61 Broadway, New York 6, N.JC*
Telephone: BOwling Green 9-0189
is

not

offer

an

or

solicitatloft fa

particular securitiea

DETREX

in

the

of those

fiscal
stock;

carried

re¬

year—

but

at

down

is

less than 10%

a
rather
achievement.

of

extra-ordinary
:

~

1

>

stock

find.

to

CHEMICAL
INDUSTRIES
BOUGHT

—

SOLD

For

example,

the

common

shares

are

trading

now

around

50

on

M0RELAND & CO.

the New York
Stock

Ex¬

Members

Stock

Midwest

Stock

Detroit

change,
from

down
1956

a

high of IO8V2.
Yet

earning

which
James

A.

DETROIT 26, MICH.
Office

—

this

should

rise

im¬

pressively during the early 1960s
as increased
efficiency is reflected
in higher net income.
Moreover, Great Northern's vast
timber holdings provide an ideal
inflation hedge. Unlike oil, ores,
etc., timber is the only natural re¬
source that automatically
replaces
itself.

To

quote

company slogan:
of
cutting, we

than

wood

still,

we

have

started

years

All

told, Great Northern
2,131.000 acres of timber or
10%

of the

Since

entire

there

owns

land

2.05

acres

!' I

State

of

writer

least
„

Where

.

$100.

for 46 Years

,

of

are

worth—the

—at
'.v

owns

Quotation Services

more

only 1,039,000 common shares outstand¬
ing, the owner of one share in
effect

Over-the-Counter

more

with."

Moreover; this timber increases
value withl every passing year.

than

saving*

unofficial

an

"After 60

in

Maine.

Bay City, Mich.

WdS/>

— is
sharply

year

rebound

and

year

—

was

depressed last
A.

to

DE 75

WOodw-ard 2-3855

temporarily

Graham

scheduled

Exchange

Exchange

1051 Penobscot Building

Branch

power

and

"color" reception in earnest.
While still retaining its position

have

Company

York, Inc.

Yamaichi Securities Co., Ltd.

orders for any

becoming
increas¬
ingly difficult

are

.

ported

of New

Company offers an in¬
investment value at a

when

But this

reception is started toward

few

Yamaichi

Securities

Alto, Calif.

tele¬

virtually died aborning.
It reveals, however, the outstand¬
ing role that Telechome Manu¬
facturing is still able to play once
the

write

Paper Co.

$1,116,338.42

from $221,370.43 in 1953.

white"

or

GRAHAM

and,
in
reflection thereof, sales of Televi¬
sion

Call

President, Palo Alto Research

imminent,

was

STOCKS
For current information

This

reasonable.

wide¬

a

substitution of color

viewers

Fifthly,

branch

JAPANESE

dends

1953 and 1954.

then believed that

was

With

recognized

our

cumulative

non

the development of television "in
living color" is revealed in the

the

Most

to

company

fiscal year before any divi¬
are
paid on the class B

any

infancy.
The outstanding rote that Tele¬
chrome
Manufacturing plays in

include

concern

wires

million and

dividend of 30 cents per share in

to

The

inference, then, is that the spread

tronics.

this measure, in dollars and
cents,

Stock

a

capital.

Direct

vided between class A stock which

are

limited

are

white

flow retained

York

who

enough to
have
sets
capable of receiving the program
in color have a decided "edge"

supplemental note, or computa¬
of capital and
surplus, the
actual appropriations from cash

New

half of

a

fortunate

Fourthly, we come to "Book
Value."
Many an investor "fights
shy" of venturing his money in a

tion

Members:

additional million to

Mobile, Ala.

for

further; significant expansion,
and will require during the com¬
ing year or so the raising of an

La.-Birmingham, Ala

a

those

its interests and

a

Alfred L. Vanden Broeck&Co.

Plans have been formulated
a

tele-' 40 level appears

of

book

New Orleans,

Impending

strikingly im¬
"spectacular" he usually

average
price-times-earnings
ratio of 20 to better-than-40-odd.

Bought—Sold—Quoted

NY 1-1557

'•

est

in the field of

an

LTD.

York Stock Mxchangt

HAnover 2-0700

Major Step Forward

name

earnings?

AUTOMATION

A

movement

adjustment in

Steiner, Rouse&Co
19 Rector St., New York 9, N. Y.

implies, the com-! as indicated at about a 10 to 1
pany's initial interest was associ¬ ratio. If my premises are sound, a
ated
with
the
development
of suggested further advance in the
its

As

vision

sell at twice the ratio

and

branches of science.

It

is it not reasonable to make

A.D.R.

:

stock, and class B stock, the ma¬
jority of which is owned by man¬
What About Telechrome >'
v
agement.
The
latter
have
the
Manufacturing?
privilege of converting
(subse¬
The Company was organized in
quent to April 15, 1957) into class
1950 under the name of Telechrome! A stock, share for share.
Inc.
Originally, it was designed
Assuming that there will be
chiefly as a research and develop¬ 198,800 shares of class A outstand¬
ment organization in the field of I ing or eligible to be outstanding
electronics, offering its engineer¬ by the time the new capital be¬
ing services as consultants and comes ^available,
and
assuming
specialists in the field of color'; that said new capital will be as
television.
As
a
result of
this productive of profit as that now
work, the Company has developed • represented by the net worth, we
more
than 300 separate items in can" calculate
net, per class A
the electronic field.
Many of; stock, ranging from $2 to $2.70
these had or have special uses and 1 per. share.
J
have been manufactured only in : ■ The stock was
originally under¬
small volume; but as the company written in
;
March, 1956, at $3 per
grew, it has been able to expand
share and is currently quoted in
its manufacturing and sales activ¬
the Over-the-Counter' Market at
ities, and now has a list of a hun-,! approximately 30-31.
Thus, at
dred or more products used in in-;
present market value, the stock
dustry, communications and allied # seems to be forecasting, in a mod¬

spread

Electric, Research is Our
Important Product"—could

has

instance,

for

General

Thirdly, assuming that the buy¬

SIEMENS & HALSKE

Calif.

Members New

notions of

our

that the electric utility indus¬

Most

Brokers and Dealers

out

duration of a bull
and
contrariwise
of a
downswing in the
speculative
markets.
It is of significance to

appropriate in this particular—"At
Tor Banks,

Alto,

Members American Stock Exchangg

probable

over

Secondly, to give a couple of
concrete instances, I call to mind
that "in the old days" the stock
market

stretch

to

plans for
capital;
needs running into the 1970's.v If
we start with a date in
1946, and
use
our
suggested multiplier, we
come up with 1970-1972 as a pos- v,
Sible termination of the present
bull swing in the market.

The

specializing in

Palo

V v.T

^

new

ctronics

electronic

Research,
(Page 2)

in the
case of electronic stocks, are actu¬
ally points in their favor.
Finally, it seems reasonable to
me

Bought—Sold—Quoted

Great Northern Paper Co.—James
'A. Graham,-President, Palo Alto

that lack of dividend payment or

try,

Mutual Fund"

S. WEINBERG,
GROSSMAN

to

capital gains over
dividends, many fail to appreciate

me

the,

future

preferable

accord

laws

tax

Louisiana Securities

.

con-

Industry.

t,\ie

•

Manufacturing Corp.
T. Greene, Research
Dept., Amos Treat & Co., New
York City;. (Page 2)

to

swing,

Under date of

space

120 Broadway, New York 5
WOrth 4-2300

obati/ons.

siderable

Member

Stock

Alabama &

nominal dividend payments,

general

devoted

1920

Participants and

Telechrome

be, nor
sell the securities discussed.)

state

Manufacturing Corp.

1 9 5 9,
t h e
"Chronic 1 e"

Corporation

particular security,;

a

intended

not

are

treatment

setting forth in detail
why 1 like the stock of Telechrome
Manufacturing Corp.
I
should like to indulge in a few
s e r v

Private

offer to

Before

Try "HANSEATIC

-

as an

Co., Inc., N. Y. City

Nationwide Private Wire

Ready to

be regarded,

to

CHARLES T. GREENE

geared for service
•

for favoring

Thursday, April 16, 1959

.

Their Selections

—Charles

are
•

reasons

(The articles contained in this forum

in Over-the-Counter

.

This Week's

Forum

A continuous forum in which, each week, a different group of experts
in the investment and advisory field from all sections of the country

Try "HANSEATIC"
•

Security I Like Best

.

National Quotation Bureau
Incorporated

timber-

Established 1913

estimates

else

can

46 Front Street
CHICAGO

Continued

on

Page 52

NewYoi*4,!U.
SAN

FRANUJBpO

Number 5838

189

Volume

The Commercial and Financial Chronicle

(1727)

I N D E X

Bases for Successful Future

Articles and News

Electric

Utility Financing

By DR. HERBERT B. DORAU*
'*

of

Professor

Dorau

Dr.

The Market

/

applies the perception of
of

examination

credit

the

economist

an

soundness

of,

into

an

-

An

people take for granted, the economist finds that the industry's ability to command capital on favorable terms for its
tremendous future capital needs has been jeopardized. Concerned about

the recovery

a

He

latory policy.

Illusions Cost Too Much

The

in the latter has not fared

.

•

;

-

well

he thinks.

as

Taking note

v

prices, Dr. Dorau avers, now is ;
industry to raise equity capital against the >
day when it may be needed if not now.

y

That the electric utility indus-

simple

one;/corporate
credit," should be sufficiently concerned

its

about",

times

j
T

capacity to

dustry.

command

capital
make

the

question

on

casion

■

that

an

oc-

it is

this

ness

revenue

benefit

h Y

t

e

t

h

healthiest
often

BRHIIp wMHDB

e

are

p.

Herbert

most

Dorau

!

} : concerned about their health and
the best students
perience

most

seem

in

my

sources even

concerned'. about

why the superior are superior and
probably why intelligent appresuperior,

to

:mig | as well i,n .s
n?Ynoting that as,

we are,
or Ought to be,
intelligently concerned as to:

_good

j

7.

,!

.

as

as

the

.

Kets.

•

:

"

7

(2) Whether

we

associated
can

or

will be

the

(4),

Or, perhaps
whether,
in
view of indicated changes in
(a)
'
4he pattern of capital costs and
-J(b) the composition and structure
Jot the market for ultility securi¬
ties, some basic changes in utility
are

So, possibly the subject, we have
is" not

as

♦An address by Mr. Dorau before the
Z7th Annual Convention of the Edison
Electric Institute, New Orleans, La., April

7'"-'»

•••:..

■

;

-

.

metropolitan
broadcasting

20

23

_•

—

24

J.F.Reilly&Co.,Inc.
by Edison Electric Institute.______

Members Salt Lake

25

1
28

Dlgby 4-4970

Power Plant Proposals Invited Under Joint

Teletype! JCY1160

Program____-___________

40

Electric Current Used Abroad_-__i_^

011

City Stock Exch.

Exchange PL, Jersey City

Direct

40

wires

Salt

to

Lake

Denver it

City

/ ,.vf

-

41

Blank

011

Check for TVA__^___:____^_______

46

Epsco
A

Fiscal

States

Re-awakening?

Girding to

Emotional

Tax

(Boxed)

Interstate

Botany Mills

13
Business

25

Pacific Uranium

-7

37

Elements Render Business Fluctuations

Cormac

Photocopy

7

,'lnveitable, Rukeyser Maintains________.

Cormac Chemical*

49

Spahr Terms Rise of U. S. Bonds in Banking System
Fiscal Irresponsibility

with

the

active

reflected

assets

by

use

of*

reserves

will

Leading Producer Cites Electronics Revolution in France

We See It

Bank

..

and

(Editorial)

Insurance

Business Man's

Stocks____--___——

Boqkshelf___,;-I—

8

.•

San Francisco

10

Philadelphia:

Funds

1

Reporter

Wilfred

Our. Reporter's

Chicage

62

18

May

4

Governments

on

Dallas

Cleveland

—

Commonwealth Oil

63
-

-

Refining Co.

10

Report--

Public Utility Securities

.1

43

Conv. 6s, 1972
*

Railroad Securities
Securities

Now in

52

—

Alaska Oil & Mineral;

54

Registration.T

•

Prospective
-

Securities

Security

Salesman's

The

Market

The

Security I Like

.

Offerings

60

Corner-,

40

and You—By Wallace Streete

0

King Oil of Delaware'

16

Be&t__z__|._

,2

The State of Trade and Industry

!

Harman-Kardon, Inc.

4

on

Continued

«f 1959.

Los Angeles

53.

Our

respected

*

Direct Wires to

20

Indications of Current Business Activity

most elementary

generally
-

INC.

40 Exchange Place, M Y.

From Washington Ahead of the News—Carlisle Bargeron

_

°f ^Vestor debt Capital, the
is

MACKIE,

Teletype NY 1-1825 A 1-4844

8

Einzig: "British Budget Helps Business"

•

taking the risks of leverage in'
capital employment. *'When such

/-»

&

HA 2-9000 *

64

Dealer-Broker Investment Recommendations

equity capital should be
allowed to keep what it earns by

principle

Request

16

Coming Events in the Investment Field

that the

USe

pn

Singer. Bean
Cover

^____:

Observations—A.

seem

Rights

Prospectus

V 51

New- About Banks aad Bankers.,.

;

*

Regular Features
As

'

Mutual

It would

:

52

,

>.

deprecia-

become an -in-

&

as

•-

leverage income results from the

;

1_

:/

racing assn.
•":7!7

■

,

Risks of Leverage

"

-"

•

Gaty____

S.-Euratom

Warns

the

Annual Convention, 1958.

not

.

asked ,to-discuss

Strong America—J. E. Corette

a

presented by^Commissioner Kfue-. '
^,ei °'. "?e at the NARUC 7nfw
Commission
70th

ments of the future difficult.

'been

_

ciation for Rate Making Purposes"

•«—»**

Corporate financial policy
clearly required.
\
*

_

to the Panel Discussion.- of "The
Treatment of Accelerated D.epre--Y

make the

obtainment of the capital require-

"

v

_ _

Alabama Power Co. Wins Award of Edison Electric

are

may

R.

New Data

-

^

reputation

Cresap, Jr.___

Purchasing Agents Report Rising Capital Expenditure Plans-- 37

develop-. crease "leverage above .the.line"";:
industry and and make for greater income volits
investor relations
which
in utility. For an excellent paper on
spite' of all the excellence of fi- this basic principle I would! refer
hancial

U.*

:

:

ments External to the

7

7

charlestown

13

Future'v'";•
1!
!_ 1
J_
:
14

Canadian Capital Spending Plans for 1959__~_

tion

(3) Whether there

Electric Utilities—Ira U. Cobleigh.l

Robert S.

—

Nuclear

creasing disadvantage to.the;,
equity investment; will further
raise the "all expense ratio,"/in- ' ;

to the reputation
enjoyed and meet.the great
expectations which investors have
"built up;'" 4 '77
;
r
'
f

r

■ *>

■

alaska oil

,-,,

now

■

j

basic atomics

the Electrical

Institute

able to live up

.

■

o

investor^ thinks we
whether we an fact deserve
a^a.tl0n
capital mar-

,!

"^1
^ve

•'

i*.

3

Breakthrough Reported in Direct Conversion of Nuclear
Energy Into Electricity

ciation reserves and the assets
generated
by such reservations ,
j,lcrease the economic burden of r.
the
management ^ responsibility:
an(j the assumption of all the risks

,

A*)j Whether, yve .are.jn fact

;

i

«,u

^

in
111

New Officers Elected

differ

bidustry has been

permachem corp.

r

though under book--

what,early; in qui. discuss

whether

/-.x

mav

!

-

the

.

;

-

who

Look at the

a

Lindseth__^^_,_____._^.-___^___Cover

Electric Utility Pricing Policies for Tomorrow
VK

And now since this aspect of the
basis of income and credit of the;

remaining

:
In this instance of an economic
•7 "look
and
see", we might ask

1

For

—Lewi-

-

keeping regulation as practiced in,many jurisdictions,such assets are,,
not allowed to earn a return and.
thus contribute by so much less,
to the revenue of the enterprise.-. j,

ex-

their examinations. Maybe that is

tiension, is essential

those

of

STREET, NEW YORK

Designing Electric Utility Systems for the Future

would digress to
explain that for these as well as
other purposes, the assets* generatrd by depreciation
reservations^
Of revenues are just as much capi-7
tal employed to produce service as ^
assets reflecting funds from other

anomalous.

I

earned.

L.

Electric Power for

with my ratios I

at

seem

to>be
somewfiat

i

naughty?

necessary

in

WALL

Amerlcau Way in Tomorrow's World
—Hon. Barry.'Goldwater_L„t:------i----——~ 15

It only means '

utility industry and that
to raise and employ
Mkm5.4.00 t-f capital to do $1.00 of busi-

V

first

!

—Mark W.

electric

Km..-;;<Jc

would

!

t

the

character

■i

:7t

you,

'
.

Ely:Dz4r^1 o

Current Growth
^New Dimension

highly capitalistic in- *"■
And ''capitalistic" is not,'
assure

99

for Electric Utilities Remains Favorable

.'-—Owen

capital factor of production is relatively important in the

the

of

Outlook

V

a

twelve letter word.

>■-

subject of
formal discussion

I

may

7

to

request.

upon

-t

Bases for Successful Future Electric
Utility Financing
—Herbert Dorau
:

/

far from obvious,

to

available
18

ABOUT THE ELECTRIC UTILITY INDUSTRY

-

The future availability of capital is obviously important at all

•

-

Reprint from Flight Magazine
//'describing Stol Paraplane

■■

Government's Role in Nuclear Power Development
—Hon. John A. McCone___-_.'_iJ_
„_Cover

:

it might appear and the-

as

answers

number

:

Future—Elmer

the time for the

xca's

C

;

.'j'-Status of Private Atomic Power and

*

of the current level of stock

try, which has come to be "Amer-

:

12

Challenge of Soviet Power-pAllen N. Dulles,______ 22

•

common

as

n

Telephone: WHitehall 4-6551

stocks of Moody's 125
industrials and 24 public utilities to show that the investor
compares

aircraft corp.

'

7

r^-Vice-Admiral H. G. Rjckover, U/S. N.__Li_l___„,__

realistic financial accounting and regu-

more

J

\

this, Dr. Dorau outlines certain requisites for
and maintenance of the utility industry's credit

which includes

Analytical Review of the Retail Trade Field
V'; — Lawrence R. Kahn.

Dm comfany mmmmmmmmmmmm

LANIER

9

Outlook for Banking and Credit iii the
Second Half of 1959
—S. Clark Beise_
^

and stockholder's 7

rnmmm

6

__

equity in, the electric utility industry.-Contrary to what most 3

•

-.7';

Consumer Attitudes and Instalment
Credit—George Katona_7

Transportation, New York University

ilCHTtnSTEIIl

Page

,,'5

Outlook—Philip J. FitzGerald

An Investment
Manager Looks at the Economic Outlook
—Perry S. Bower 7__

Economics, Chairman of Department of Public i

Utilities and

.

I

3

on

page

29

Washington

You

and

64

^

Jerrold Electronics Corp.
"

T.'

For many years we

Copyright 1959 by William B. Dana

WeeWj

have specialized in

PREFERRED STOCKS

»a
1

-

7

FINANCIAL CHRONICLE

-

Reentered

as

second-class matter Febru¬

25, 1942. at the post office at New
York, N. Y., under the Act of March 8,1879.

ary

i

.

'7

U-.S- Patent Office

WILLIAM
25

B.

Park

DANA

-

COMPANY. Publisher*

!

Spencer Trask & Co.
25

BROAD

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.

The Commercial arid Financial Chronicle
4

.

.

Thursday, April 16, 1959

.

(1728)

investment

the

Observations

.

stock market having

With the

finally become stalled in the Blue
Chip area, reconsideration of the
investment
companies' portfolio

policy is in
order.

,

.

'This is

particularly

the

stocks,

name

opportu¬

the

nity for new
conclusion s

regarding
their

perform¬

and the quesWilfred

tion of the

May

of

wisdom

ognizing the practical limits of
government regulation as an ab¬
solute guaranty of good practice
in any financial area, it is our
considered opinion that a gen¬

and

erally good job has been done
by the Federal authorities in com¬
eliminated in the case of bination with the NASD and the
the funds, whose justification is
industry. Whatever abuses remain
based on full-time portfolio man¬
stem
mainly from the areas of
agement effort.
hard-to-control
retail salesman¬

empirically

averages

In an exclusive interview with "The Iron Age?' national
metalworking weekly, Mr. Finnegan reports that pending media¬
tion assignments are now 62% higher than in 1958.

ship and the uncducatable public

diversification

the

substantiates

for

dozen 10-cent oranges
dollar.

even

an

this

But

most past periods the
principle.
Perhaps
the
funds analogy seems invalid to this ob¬
performance record of the com¬ should
server.
The differential created
diversify even more than
mon
stock funds, calculated ac¬
in fund purchases discriminates
they do.
cording to the changes irr their
an
entire
category of
If one
argues
for Blue Chip against
assets' value compared with the
buyers measured by their lack ofDuring

concentration

tin-managed

the

in

fluctuations

"un-thinking" averages, has
)>een somewhat poorer than "par

and

and

time feels that

an

at

the

same

individual does

wealth

and is inconsistent with

—

the basic
purposes
of the SEC
permanently sleep
which is committed to protect the
in
those
issues, he is logically
for tlie course?' In the year 1958,
small investor.
:
forced to the conclusion of ad¬
however, the comparable funds
vocating a return to the fixed
slightly out-performed the lead¬ trust
specializing in those issues.
ing averages.
Popular in Britain and here in the
Any one feeling that this im¬ nineteen
twenties,
they
main¬
plies a slur on the funds' justifica¬ tained permanently, and without
tion for existence, should realize
On April 23rd, J. Byran Grubbs
management discretion, holding of
that in actual practice the ordi¬
and Julius II. Sedlmayr will be¬
specified issues.
nary investor acting for himself
While
such
Blue
Chip fixed come Vice-Presidents of Merrill
also usually will not do as well as
trust
technique
would
offer a Lynch, Pierce, Fenner & Smith
the "blind" averages.
realistic compromise, it would be Incorporated, 70 Pine Street, New
not

cannot

or

Merrill

What

are

the

for

reasons

the

with

inconsistent

>

the

basic

ob¬

jectives of the entire investment

firm's Houston

results than the

more

active time-

in the

many

of the funds

dict

have been penalized by 20-to-25%
concentration in the oil industry.

the

Saccardi

will

Diversification
avoided

trends, ha^e been staging

cializing in

a

special

bear market of their own.

his

a

use

by the
of

one
a

can

also

of

the

funds

spe¬

single industry. Such
unit might be

in

combination

with

an

al¬

As we have noted, the compara¬
tive record thus opens up anew

ready diversified list; perhaps by
way of adding a stake in a new
industry (as ''electronics").

the controversial place for diver¬
sification.
The
strongest
argu¬

Proposed Regulatory Changes

for

putting

basket

one

investor
watch

a

eggs

your

finds it

difficult

too

to

lot of baskets (that is, to

of

March

known

31

has

Saunders,

as

Cameron

;;

•

•

ager

bargaining."

the

most

bear," but predicts
come out of con¬

;

*

both sides of the table represent some
skilled and mature bargainers in the business," he
on

a

their

■

enters

the second

quarter with the outlook bright

first period

Attributing the noteworthy gains in the hard goods

industries

public opinion, in the general concern over the coming crisis.
The economist doubts much effect on management-labor rela¬
tions from either President Eisenhower's urging of "statesman¬

are

S.

ship" in the forthcoming negotiations or Labor Secretary Mitchell's
cautioning that "the public is sitting at the bargaining table" this
to oppose a wage settlement that would cause inflationary
price increases.
T
.n.vi;
•
"Our free economy," the analyst points out, "has become for

ment.

year

UN Ambassador

changes in the statutes governing
*As

spelled
out
in "How to
Make
Money Make More Money" (chapter 18)
by Henry Gellerman, Crowell, N. Y., 1957.

to

mutually satisfactory agreement will

"a

largely to hedging against anticipated strikes and price rises, Mr.
Moran notes that both management and labor groups are wooing

Lodge

To Address Bond Club

fluence,"

Nations, will address The
Club

of

New

York

at

Moran warns:

and

announcement

in Freedom."

vestment

Declaring that ours is rapidly becoming a "high-cost country,"
our
economic and technological advantages lessening, Mr.

with

a

by Harold H.
Cook, Bond Club President.
Mr.
Lodge will talk on "America's In¬

sell

majority of Americans the very engine of individual af¬
and "the essence of our free economy is the market,
which imposes definite limits."
the vast

luncheon meeting today, April 16
at the Bankers Club, according to

-

hour.

Commenting on the government's position in the forthcoming
steel negotiations, Mr. Finnegan told "The Iron Age": "The gov¬
ernment isn't prepared to issue any ultimatums. Our rolerif it is
necessary to have one, will be that of impartial mediator/'

St.,

become

Cameron

principals.
,
Crysdale is now1 man¬
of the firm's trading depart¬

Peter

an

-

8 to 10^> per

of quite satisfactory sales and profits, says
Executive Vice-President. National Association
of Credit Management, in the Association's
Monthly Business
Letter. He sees a brisk tempo for the Fall.

Limited. E. M. Saunders and A. H.

r.

'

Nevertheless, he predicts that direct wage increases this year
year's median wage increase of around

will not be far from last

Business

Limited, 55 Yonge

effective

Bond

.; V

sequently, the bargaining pattern is reflected in supplementary
unemployment benefits, pensions, health and welfare, severance
pay, shorter work week and other protective fringes."

after

TORONTO, Canada—The busi¬
formerly carried on by E. M.

Saunders

United

-

.

Edwin B. Moran,

Henry Cabot Lodge, United
States
Representative
to the

■

are

predicts they will "probably continue to play an important role at
the bargaining table."
\
/
Mr. Finnegan was appointed to the sensitive position as
Director, Federal Mediation and Conciliation Service, by Fresident
Eisenhower in 1955. In private life he was a New York attorney

ness

The SEC's pending proposals for

in

generally is that the

unions

in

question of whether skilled workers are "the forgotten
men in labor negotiations," Mr. Finnegan points out that pressure
Jrom the skilled worker is resulting in special bargaining units,
y
"This has tended to make bargaining much more complex, and
if these demands continue, the skilled worker will emerge in a
new light," he says.
v.'
"
y
He points out that automation and productivity are "closely
related to many of the issues that crop up in negotiations" and

New Firm Name

be

investor through

non-diversil'ied

used

The Diversification Question

ment

,

these periods-of-substantial unemployment,
faced with heavy demands for security," he says." "Con¬

"Especially

Saunders, Cameron

them to
the self-managed
portion of his portfolio.

petroleum stocks, follow¬

:

Commenting on a changing pattern in union demands, Mr.
Finnegan remarks that "in today's bargaining, money is only in¬
directly the principal issue."..
y k y ,V • - ; v;y cCl
•; ?
;

specializing in labor and trial work.

run pay off. The ad¬
stocks can always

name

ing unfavorable supply conditions
and nasty foreign expropriation

cashier

■

Oil the

C.

become

f
■■
peculiar problems and the least
a real donneybrook," the
y/..y
y

*

"These people are well aware of the complexities of
industry and the economy as a whole."

the firm.

add

long

to

date, Carmin

'
own

likely trouble area might blossom into
mediation chief declares.
"
"* ; -

of

office in the Gulf

same

•

says.

Building, of which he is Manager.
On

<.

:

.

of these has its

"Steel negotiators

City, members of the New

lies

in constant

"

:

"Each

;

He concedes that "both sides are loaded for

Lynch lo

ob¬

company movement. To this
server the funds' best course

ers.) And lately

York

*

year.

scientious

York Stock Exchange. Mr. Grubbs
will make bis headquarters in the

diversification, despite
occasional superior
appreciation
ments has shown that those whose by the Blue Chips.
In meeting
policy> calls for a minimum the practical criteria of yield and
amount of timing got better re- asset values, diversification should

For the

He points out that there are 150 major collective bargaining
agreements covering 4.5 million workers up for negotiation, this

that

Elect Officers

negative comparative results?
Partly, they manifest the general
difficulty of market timing, even
by the top experts. (As a matter
of fact, a study of fund manage¬

Business Failures

pretty rough bargaining period."

buyer.

often buy a

Auto Production

Industry

Conciliation Service, says that 1959 is "rapidly shaping up into a

tively

•

Price Index

Joseph F. Finnegan, Director of the Federal Mediation and

spreading is uniquely and effec¬

voluminous

diversification.

Trade

Commodity Price Index
Food

,

record,

ance

large number of issues)/'
disadvantage
of risk-

Retail

State of Trade

of

embracing of expertly discovered
The frequent distribution price
values, rather than efforts at tim¬
under
which the
ing the fluctuations within the arrangement
hame stocks, is a basic reason for price of the load (selling commis¬
the funds' existence. Adding to the sion) is reduced in proportion to
disadvantage of concentration is the increased size of the order,
one
feature
which
the negligible income yield on the constitutes
objectionable.
This cuthame stocks — now averaging seems
price afforded to the big
about 3.2%, which expenses would rate
further reduce to a mere 2.7% to buyer is condoned by the SEC as
well as the industry by analogy
the fund shareholder.
with general merchandising prac- 1
The
surpassing of the DowJones
Industrials by the more tice, in which the housewife can

of their
portfolio
op¬
pact

on

a

this

But

with

of im¬

erations

watch

Affirmatively, diversification
its spreading of risk,
and

by

prompted
reason

POLICIES

AT THE FUND'S PORTFOLIO

Production

Electric Output
Carloa dings

the industry's past
record and future prospects. Rec¬

By A. WILFRED MAY

Steel

The

and

consideration

public

timely

discussion

NEW LOOK

and^

companies

advisers, previously cited in this
column, together with the record
bull
market render particularly

"Increasingly, our goods are being priced out of both foreign
domestic markets.
As our prices rise, our markets become

targets for imports. It isn't consoling that imports of foreign
goods have almost doubled in the last three years,"
while "we experienced in the last year a $3 billion decline in ex¬

open

manufactured

ports and a substantial

outflow of gold."

opportunities and lower living standards ap the pros¬
pect he sees as other countries with much lower wages improve
Fewer

a
■

-

■'
_

•

Quinn & Co. to

large

Continued

ALBUQUERQUE, N. Mex.—On

Street,
New

0

I ESTABLISHED

N.

W.,

York

members of the
Exchange, will
Quinn, Lawrence D.

Stock

admit Frank

•

CORPORATE BONDS

Kidder, Peabody Branch

.

f

SAN

Lyinth, Pierce, Fenner & Smith
INCORPORATED




"

"

^

MATEO,' Calif.

Peabody
branch
worth

NEW YORK 5, N. Y.

Offices in 112 Cities

LOCAL STOCKS

partnership in the firm.

Marketing Department

70 PINE STREET

l894fc

STATE AND MUNICIPAL BONDS

Tiedebohl and Verne C. Beale to

Merrill

page

May 1st, Quinn & Co., 200 Second

DLOCIfr
Call.

on

Admit New Partners

—

&"

Kidder,
opened
a

—

Co.
has
office at 420 South Ells¬

Avenue

under

the

direc¬

tion of | James T. Love.

formerly

conducted

vestment

Co.,

in

Mr. Love
his own in¬

business, James Love &
San Mateo.' " ^ -• v

4

The

Robinson-Humphrey Company,Inc.

RHODES-HAVERTY BLDG.

ATLANTA

WALNUT 0316

LONG

1, GEORGIA

DISTANCE 421

50

Volume

The Commercial and Financial Chronicle

Number 5838

189

(1)

-

The Market Outlook
a&sessing the variety of factors entering into the 1959

mar¬

FitzGerald calls attention to high price of even
the best of stocks.
Before pointing out seven categories of
investment opportunities that appear rewarding at present,
the Wall Street partner indicates how far D-J industrials
would have to go in order to provide the safe yields about

The

4j/2% and

y

more

1958

boom

found in bonds at present.

Until

-

-

; *

some-

<

thing happens •"
cto -- alter-; this.;.;
r elationship,

:

-the
:

number Of in-

vestors

a r e

.

business
tered

,

hence

-•

commit-

Philip J. FitzGerald

rewarding.

Carbide

55

averaged

their

times

New

to
Era

(2)

The

reversal

Defense

of

its

records

\

;

,

stocks since—

y

of

these three

three
a

com¬

typical of the records

are

is -hard

it

and

Our tax policies have critically
.limited the potential supply of

to

think

chips

of

Department's
economy

any

better industrial record over the

*

The 52% corporate income
more expensive

Although
times

its

took

the

it

1929

SURANCE AND REFERRAL SERVICE

.'.V.::•"

-

Y

Demand

Vy;

'.I' ■ _y,

At

other

levels which

The basis for the extraordinary

times
are

ESCROW

to

When business turned up in the

it ushered in one
of the fastest recoveries ever wit¬
This

nessed.

expansion of

tional

pension funds
The

funds.

Index, at ninfe
ings.

institu¬

appetite for stocks is also
in\ accelerated buying

reflected

These

six

spring the

pace

Consolidated Balance Sheet—►December 31, 1958-

■•"'

y.

of

trusts, profit

and

endowment

funds
cess

of

now

have

Pension

:

stocks

sell

to

in which labor

ON

resources

in ex¬

times their

Other bonds

research leaders

for negotiation next

up

are

corporate
3% or

or

which

less, the Dow Jones Industrial In¬
permits purchase of dex provided a dividend yield of
Adminstered funds hold 6% and our Research Index a
stock which cost over $5 billion yield of 4%.
Current dividends
and can be expected to invest at
being paid provide yields of over
least $1.5 billion of new money 10%
on
the
1948
purchase
in 1959. Stock purchases are prac¬
prices of both indices, their pur¬
tically assured since policy calls chases having been very reward¬
for the
placing of around one- ing to investors over the past 12
third of new funds in equities and years.
since they buy these equities on
Rate of Growth
a
dollar
averaging basis, high
To judge how big a premium
prices are not a deterrent.
investors can afford to pay, it is
Mutual
funds have
resources
necessary to arrive at some idea
above $13 billion and in January,
of the probable economic growth
had net receipts of close to $150
which can be expected.
Since
million of new money.
Today's the decade between the business
purchasers of mutual fund shares
peaks of 1948 and 1957 is the most
want to own stocks. They turn to
prosperous on record, it can serve
mutual funds only to have the
to indicate the speed with which
benefit of professional selection.
the
economy
and
the earning
Therefore, mutual funds can be power of great companies can be
expected to continue their pur¬
expected to grow under most fav¬
chases as long as new funds pour
orable conditions. In that decade:
basis

which

equities.

into their treasuries.
The demand for equities

(1) Industrial production rose
will
by 38%;
; probably continue as long as in¬
(2) Gross National Product rose
vestors continue their unbounded
from just under $260 billion to
faith in research and the earning
over $440 billion; and
powers of expanding companies to
(3) The dollar lost 19c of .its
(a) outpace rising operating costs;
buying power.
and
(b)

buying

expand faster, than
of the dollar

power

the

-

de¬

clines.

Too High
With

so

many factors acting to

push;. stocM.^still_Jhigher,




many

To

achieve

growth

such

a

rate

of

had to be
stimulated by extraordinary
spending for Korea, the Cold War
and our vast International Aid
our

programs.

;

The

market

shift

sudden

only

1958

summer.

Stocks, at quoted value— r./

in

reflected

Advance

advance

business

the

shift

the

has

the

"

''yv;■

U.

Government

S.

State and municipal
*

by

the

y

'yv

-

,

'

'

19,773,894
5,019,232

——,

—

V;

.

-

—-

*

.!■

"

.

".TV

RECEIVABLES, less
OTHER

'V-v

,•

.'VV:?^n«v24,793,126

.

.

b

■'

marketable

Total

securities' -'

for doubtAil accounts

reserves

62,833,819

"——

—

($304,945)—

2,150,652

INVESTMENTS:

Chicago Title and Trust Building Corporation, common stock ($4,250,000) and note receivable ($1,250,000)—
—
Sundry loans and investments, less reserve for losses ($112,000)—_

.

5,500,000
l,O06;968
6^06,968

FIXED

ASSETS, at cpst:

Land

—

;

-

529,685

—

-

Buildings and building improvements
7-.--—
1,458,096
Furniture, fixtures and equipment of subsidiary companies
;—- 1 333,497
Less —- reserves
for depreciation and
amortization
—--—•,
(536,584)
.

'

■

1,785,594

1959
PREPAID EXPENSES
on first quarter results,
probable that in 1959—

Based

(1) Industrial production will
top 1957 by around 10%;
(2) The Gross National Product
will rise to over $465 billion; and
(3) The dollar may suffer a
further slight loss in its buying
•

power.
The

RECORDS

TITLE

Total

Jones

AND

24,702

—

INDEXES

Assets

3,160,452

$82,061,206

-

LIABILITIES, RESERVES AND CAPITAL
LIABILITIES:
Cash

deposits

Accounts

indemnity against specific title insurance risks

as

payable

Federal income

Other

and

accrued

tax

1

—

—

1

payable

$4,301,524

taxes,

taxes

Accounts

Dow

—

—

:---iJi-)--

—

—

—

——

——-----—

Research

sells

Index

at

$177. This is about 44 times esti¬
mated earnings of those six great
companies and their dividends

provide

a

yield of only about .9%.

Today, quality bonds provide
safe
yields of 4V2% and more.
Based upon the rate of gain scored
between

1948

and

would

it

1957

168,233

347,128
2,719,631

Trust and

escrow

cash balances secured by

24,065,642

pledged securities-;

j

RESERVES:
possible losses and related
1

For

expenses

services
For

contingent deferred

Unrealized

of

appreciation

on

for title, escrow and trust

.Lj..

compensation

fluctuation

market

For

—

—

4,213,18/

506,912

—

7,970,535

securities

stocks

4,540,359

———

17,230^993
MINORITY

INTERESTS

IN SUBSIDIARIES

511,521

——

—

CAPITAL:

Capital stock,
issued

par

628,178

value $20

share, authorized 650,000 shares,

per

—

Undivided

(1) The Dow Jones Industrial?
seven years for dividends to in¬
crease
sufficiently to provide a
4%% yield on the current aver¬

—

profits
Treasury stock

.

1

12,563,560
13,646,087

shares

Surplus
Less

take—

age

J •

Industrials

$613, sells for ap¬
proximately 16 times 1959 esti¬
mated earning power of $38 and
its
present
dividend
payments
provide a yield of about 3.3%.
Our

2,204,270

,

which sells at

—

(2,000 shares), at

cost

(146,500)

—.—

33^231,895
Total

Liabilities, Reserves

and

$62^>81,206

Capital

purchase price; and according

to

'

"

-

•

'

Our Research Index about
15 years even though they are
expected to expand at a rate that
(2)

is three times faster.

economy

During this period—

$81

billion, all
1,050 most active
issues registered advances.
of

22

-7,664,566

y.yy/

obligations
bonds

.2,895,875

—-—-

—

Bonds, at amortized cost, pledged to secure trust and escrow cash
balances—, ■/.
:s;V
y'-'''-0'

(1) Sellers prior to and during

change rising

——

—_—

——

y.^yyyy

not

but

-27*480,252

v*;

Common stocks

since

r873,802

"

Preferred stocks

The

it is

Although quality
provided yields

)

11,669,761
14,936,889

—.
——

will be

contracts

at •fact that—

earn¬

—.—

—.———'

————

-

but

bonds

,

_____——$5,599,019

i

BANKS

Bonds, at amortized cost—; U. 8. Government ■ obligations—.—
State and municipal bonds
—;—

to
protect. fabricators
danger of strikes in the
and other major industries

steel

make

Chemical.

of $36 billion, over $20 billion
are administered
on a

.

MARKETABLE SECURITIES:

IBM, Minnesota Mining & Manu¬
facturing, Minneapolis-Honeywell,
sharing funds Alcoa, Addressograph and Dow

funds.*

IN

HAND AND

CASH

ated by the reaccumulation of in¬

;

ASSETS

'

business is being further acceler¬

by life insurance companies, pri¬
vate

United States.
transactions. 'COMPLETE TRUST

property throughout-the

estate

TRUST COMPANY AND SUBSIDIARY TITLE COMPANIES

it

for equities lies- in the them inherently cheap. The year the business correction sold with
savings which our postwar 1948 was such a period; Investors the
intention
of
repurchasing
-prosperity has developed.
The worried so about a depression equities; while
;
1
^
stock market boom of the 1950's that did not happenJhat the mar¬
(2) Buyers bought for the long
differs from past booms in that ket appraised—
pull, creating a veritable invest¬
the bulk of buying is well in¬
(1) The 30 great leaders which ment vacuum on the upside.
formed and paid for in cash. This make up the Dow Jones Industrial
The result has been that the
is in
shaFp contrast to the. in-and- Average at only eight times their 1958 market scored the great¬
out margin trading of the 1920's. earnings; and
est
and broadest
gain on rec¬
The biggest buyers are institu¬
(2)
Six outstanding research ord, with total value of all stocks
tions led by the tremendous post¬ leaders included in our Research
listed on the New York Stock Ex¬
mutual

on

real

..

CHICAGO TITLE AND

spend of 1958,

demand

war

whole.

billion.

-vast

and

and safeguard

speed

19

-

bound

as a

SERVICES.

ventories

Too Low

rate far faster than "the nation

a

.

Chicago Title and Trust Company provides-: these services: TITLE INSURANCE
policies issued by this company and subsidiaries in IS states. .TITLE REIN¬

only

a

v.;'-

of its

one

v

from the

Jones

upon

,

Government; and (b) the fact that
States spent over $22 billion as
compared to revenues of only $14

Industrial

Dow

entered

$5 billion favorable cycles when consumers'

over

,

legal Average 26 years to get back to
its New Era high.
This record
expense; and
*
V
/: -'; \i
(2) The 25% capital gains tax shows clearly that even the best
stocks can be priced too high to
presently costs investors between
one-fifth and one-sixth of today's be rewarding to investors even if
market prices if they sell shares they were blessed with patience
of most of the best known com¬ and longevity. '
;y
> *
I;
panies bought prior to 1950.

stock than to finance

new

with bonds since interest is

have

to

power,

sold at
earning

whose markets are expanding at

(4) Meat packing which appears

-.

of new orders that had been held

companies which have had

past generation or better pros¬
pects for the generation ahead.

makes it far

to sell

■

t

■

..

inven¬

an

drastic

up; and

of most other New Er«u blue

:

r

-

back was contained as

policy by placing

The

to be very

-

Supply

(1)

at

'■ -;V■ * *y ■■:
panies

ments have not proven

tax

cen¬

,"'y
;
(3)
Governmental deficits
capital changes, present dividend ; which added buying power to the
payments provide a yield of only spending stream including (a) the
3% on the 1929 purchase price. $13 billion deficit of the Federal

-

that

1

which

inventory crisis
brought on by the Defense De¬
partment's
extraordinary
r e trenchment policy.
That the set¬
an

perience of the 193.0's, it is inter¬
esting to note that, corrected for

years

their

correction

around

record earning power. Forgetting
the depression and the dismal ex¬

•

;apt to find"out
-some

Union

sell

growing-

a

interrupted by the 1957-1958

was

.

.

and

market-

appears to be
i headed higher,

.but

nearly tenfold.

rose

troughs due to overproduction in the only real hedge, ^against long
the 1955-1956 period and which range inflation, but- which * have
should see earning power build¬ been out of favor in the past sev¬
provide rewarding dividend
eral years because of the pressure
ing up steadily over the next two
A review of the subsequent ree-p was maintained.
Contributing to
of temporary Qverprbdnction, in¬
ord shows that at their 1929 highs this phenomenon was—
V
;
t years, including auto and acces¬
cluding oils; papers and timbers;
purchase of even the finest com¬
(1) The Federal Reserve's easy sories; home appliances; and con¬ and nonferrous
metals; and
•
panies has proved unrewarding. money
policy
which
relieved struction
equipment;
At their 1929 highs, Radio, Alcoa, credit
(7)
Pacific Coast; .companies
pressure;
;

toon

few units.

Index' in¬

profits from $1.63 to
by 112%
while their

.

able number of years for them to

dollars'

many

Research

its

or

and

tory correction rather than a de¬
pression was due to the fact that
yields. ultimate consumption - of goods

inflation—too

.chasing

:

The 1957 Setback

-

is

more

This record period of prosperity

1959 stock market stocks already appear to be dis¬
essentially a perfect ex¬ counting the future to such an ex¬
ample of the classical theory of tent that it will take a consider¬

v

The

creased

$3.46
prices

ket outlook, Mr.

.

by 50% while their prices

(2)

Dean Witter & Co., San Francisco, Calif.

like
banking, purchasing power is high and the
merchandising, which" cost of cattle and hogs are trend¬
appears to enjoy prospects of rec¬ ing down;
ord earning powers both this year
(5) Industries which are heav¬
and next,but which are not sell¬ ily committed to research.
Since
ing at unusual investment pre¬ metallurgy promises to be the. re¬
search feature .of- the,'1960's, the
miums;
'
(2) Industries which will be leading metallufgicals can be ex¬
particularly benefitted by the 50% pected to grow far faster than the
boost in our teen-age population economy.
In the popular area of
between 1958 and 1965, including missiles and electronics, investors
prepared foods; soft drinks, con¬ can make better buys.in the larger
fections and tobacco; textiles; and established companies dike ' North
school books and school equip¬ American and Lockheed than in
the more romanticyspecialties;
ment;
.:v
(3) Industries which are emerg¬
(6) Industries possessed of large
ing from their individual cyclical raw material resources -which- are

Industries

(!)

profits from $24 to $36 utilities

than tripled; and

By PHILIP J. FITZGERALD

In

The Dow Jones Industrials

increased
or

5

(1729)

111 West

the areas where re
investment
opportun
appear to exist at present are.i

ities

Joliet

•

•

Peoria

•

Belleville

SUBSIDIARY TITLE COMPANIES

Investment Opportunities

Among
warding

Washington Street, Chicago 2

Wheaton

•

Waukegan

Kane

County

Crown

Title

Point,

Company, Geneva,

Ind.

McHenry

Title Insurance

111.

County

Lake County Title Company, Inc.,
Title Company, Woodstock, UL

Corporation of St. Louis, St. Louis, Me.

6

The Commercial and,

(1730)

vated

An Investment

Manager Looks

At the Economic Outlook
By PERRY S. BOWER*

Manitoba, Canada ,'V;

^

will

It

;

be-

that ?

reca 1 led

v

ever

siflfee it became apparent ..that
coverv

Speaking from an investment manager's point of view, Mr.
Bower explains why he discerns in the next 18 months a
measure of tension and
apprehension that has not prevailed
since the early 1930's. He notes the upward push affecting
the short- and long-term interest rates, and anticipates nar¬
rowing
both

the

obvious

now

that the business recession termi¬

about

the

the

end

end of

third

,

quarter, there,
takable
"of

the

half.

Gross

signs

upward

■trend which

portents

behind

now

has,

;

of

us,

we

are

H the Fedpr«ent
restrictive
practices, then these
events are likely to sec additional
banking connections.

eral Reserve continues its

well

business,

as

also

A

tight

strong indica¬
tions that this tendency is likely
to continue if not tighten further.

just

little '

of the

war.

*

end

money

with

By

mentioned,

tional

strains

could
the

on

put

-

inventories

were

the

main

that

be observed

can

l-ment

is

even

•

con¬

rather

this

in

•From

-

market,.particularly
. .

..

-

•

Into this

there must,

Debt

par

r

level"" of ^orporate^earnings
the

0Ver

year,

well

as

thing for, the general
inflation

brought to

an

yet

not

has

Some-

been

Nevertheless1,

end.

those forecasters

as

conviction

who, five years

Gleefully forecast 600 by 1960
equally enthusiastic in preV
dieting 1000 for the Dow-Jones
avera»es by 1965
ago

are'

M-iniooSi^if ^ !ur«V <»T"
** 5eiYv
'1 al3° true that other aspects of
•

'

of unemployment.

v;

-,

I i union

f

;
with

;

Fbijmyseiffall I can say is that
do not thirik the days of the
the economy may be adversely American; economy are -over. -.The
affected, but cornorate borrowors "xu„
Av,t^«<

terest.

at the

than

naa?ing niaustry or inc mu-i^

;;nitlPallties.
s

,.,

Threshold
:r»;

■;?.

We are
the 1960s

v

,,

of

;

the

the

unlimited,

to lack confi-

which have sustained

'/r rconvictions

v

horizons

we' werc

?debce in Ourselves and the great

'

'

1960s

on-the threshold of

now

an(j

'fFurtHer; if

:

>

in

the

which holds so-much speculation ?cbuld

run

,

and

past, there is no sure
-that -iqiagicaL perio ' >haven to which, as investors, we
us

iirterest/in ^e^;contemplation

the

funds

and

protect adequately
to our car6.

entrusted

inherited
beckons

hope as
to, be large.
This stems to make their biggest impact upon; has ever been accorded the human
begin to think about (if they are partly from the heavy reliance, in our economies in their demands heart. Surely, our investment pollast year's Treasury financing, onr .J'or higher education, housing, aunot already doing so)
i'icies should continue to be predienlarging
maturities of one year or less, arid tomobiles a ad,
generally,
con-ir cated upon a generous participa-^
their
capacities. Likewise, they
the need to finance a seasonal def- sumer capital goods bf all kinds.
will begin looking (if they are not
v^on, in the:! inevitability; of ; ah
icit for the last half of the current,
Barring a n o t h e r: war; there expanding future,
already looking)
towards ways
year of the
order oi $6 to $7 seems to be little reason to dis- 1
and means of raising
necessary
billion.
*"
count such enthusiasm, although
additional capital funds. In addi¬
tion, the situation may be aggraFrom the pattern of the-financ^^^2?^1}®^^; mbs^ iricbrrigible> opti-;

mo-

For, as productive capacity be-r
gins to be used up, producers wilt

housing

and, while
opened strongly
'this year, it is expected that risinginterest rates and tighter money
may slow- it down somewhat in

Regional

!

ticularly On government securities,
is likely to be more dramatic than
on the interest structure in other
sectors of .'the economy, with the
gap between government rates and
all others tending to narrow, anc*
both, perhaps, continuing to rise.
It is this distinct possibility which
gives rise to the feeling that the
volume of new housing starts may

In fact, the who1"
a
higher, rates of in¬
However, as the year pro¬ respect to future
can
be gresses, it is not unlikely that our nancing is not w
ascribed to a combination of in¬ excess
productive capacity will be implications. Many of you, I am;
creases
in
consumer
purchases, more fully used and unemploy¬ sure, plot the probable financing
the end of inventory liquidation, ment shrink.
At that point, the requirements of the Federal Govstrong governmental spending, and danger of the inflationary aspects eminent in a more precise manheavy housing construction vol¬ of our economy will become more ner than do I. If you have'•any
ume.
V'
apparent. Current Federal Reserve quarrel with my projections for
The
outlook for *' 1959 ' is
that policy, with its effect on the in¬ the balance of the current year,
rate
most major sectors of the econ¬ terest
structure,
must, be of roughly $10 to $11-: billion of
omy
will- continue moving up¬ taken as, in fact, already antici¬
wards. The one possible exception pating this.

factors in the
recession, - the recovery

forecasting: the probable trend
. f tha stock

may

'L,";'
adai- C- The effect on interest rates,

troduced the

All of these should portend lower,

1957-58

tributing

.

measure

if,

■

struc1

price

ture of the bond market.

Ominous
°ra,n#us

certing

th

fo

dangerovl^

devices to correct

basicaHy upwards, certainly
next twelve months.

saem

almost cer-

,is

pplicy, which at the moment

the use of most

aI%ficial

an

^

gle between inflationary and anti-

*

*

While the decline in investment

^

polL.,,

however, be indisquieting aspect of
Sept ember,
further federal deficits, combined
It may also be
observed that
the -'rate
of
the recent recession has tended to with the obviously increasing reP. S. BoWfer
the Gross Naincrease productivity per worker. luctance of bond buyers'to jump
into a financial sea as disturbed
; tional Product
Further, there is some measure of
was
at an all-time high and by
unused
capacity
in
the major and as unfathomable as this one
•the end of 1958 it reached $10 bilareas
of our national production. appears to be at the moment. '
;lion above the peak of mid-1957.
There is also a somewhat discon¬
by business and the liquidation of

^Vig

^

In the next 12 months, the strug-

velopment of circumstances I have

scene

Dangerous Point of Inflation

The

the end of last

rather ton succumb to the siren
call of intlation.

continuation

with

1

the

and

nffiPPr

to be the

eral Reserve

since

our coun-

asjionditions tain to increase Federal Reserve

continue to improve which seems

forcibly aware that our economies
are already well into a period of

interruption

insurance officer in both

banks inflationary forces

selling of governments by
as

in fact,
continued
so

will begin

whether further rises

so-

National

these figures
are important to the institutional
investor.
While we may observe
that the first stages of the recov¬
ery from the 1958 low likely are

return to

a

latter

The

unmis¬

were

Now th^t

the middle cf last fall.

Product, which reached $455 bil¬
lion
at
the
end
of
1958, may
achieve a rate of $480 billion by
the end of 1959.

of the first

By the

of 1958.

the proouct of

economy

increasing a burden.,-; ^

and then suffer from interruptions.

now

retrospect, i t is

nated

the

hanks

„

He
observes that this expansion period is much less liquid than
previous postwar periods; hopes rising interest rates will not
choke off developments important to economic stability—such
as housing; and assumes the upward basic secular trend will

.quarter

that commercial

«o

to choke off elements of economic
government boftds to rheet the inr
-On4he ,other thand lies the al- development -important to stabilcreasing accommodation sought by .ternative—the relatively easy, but ity in the overall economy, sucn
their regular business borrowers,
disastrous, path of inflation. I am as housing.
This has been the picture since sure I voice the hope of every life
1 ;,'/*/■ a sccu|ar Trend

between government rates and all others as they
which he expects would at first adversely affect

.

rates arid the accompanying polit- probable. While this fact may ofi^l repercussions and demands fer. ;a£ measure of satisfaction te
tke Federal Reserve must investment officers, it must also
bot bo permitted to force upon give rise to^ some. concern as to

,

nieture

.

of interest rates seems highly im-

perhaps,- much higher interest

Reserve
as

_

,

re-

Fed-

SrSaffSS

housing and municipals rather than corporate borrowers.

In

the

wav

has followed a polit^ I calls it, Of "leaning
against the wind " This policy has
resulted in a tight excess reserve
erai

icy,

gap

rise

under

was

sources

are;-

~

%

v

.

1959

Thursday, April 16,

.

.

therefore, probably charged
with a measure of tension and apHow much tighter is it likely to rehension that has not prevailed
be
if
these additional demands since the early 1930's.
begin to materialize in the months,
;
ahead?

Vice-President and Treasurer, Great-West Life,

"

*

now

icies involving inventory -accmmulations. Money is already
tight,

.

.

In essence, unless;the .banking
system.acquiresi additional ,; rein the form of*further, re¬
serves from the Fed.,- it would.
seem logical to assume thaUaecreasing liquidity will tend, to
create additional pressures on the
I Hopes We Support Sound
interest rate structure in the enIrir®
.
.•
suing months.
■*
>
-On the one hand lies the path, <A decline from the current

the return, which we 1. From the investment manager's
expect, to business pol- point of view, the-next 18 months

by

must

Financial Chronicle

sector

.

,

.

.

..

.

.

w^xx

oo

going

,

talk by Mr. Bower before the
Meeting of the American Life

a

■

Convention,
1

Houston,

Texas,

April

2,

Wagner, Stott Co.

1959./

Thit. advertisement

buy

any

is

neither

an

olier to sell

nor

a

solicitation

01 oilers

10

o' these securities. The offering is made only by the
Prospectus.

ing announced in the latter part
of March, it seems clear, that,the
Treasury is still determined to try
to lengthen the debt and wilrtake
advantage of every opportunity it

hardly be regarded

can
as

NEW ISSUE

APRIL 15, 1959

bullish for the market

dium
ment

and

longer-term

bonds.

on

govern-

Consequently

mist will concede the possibility
bf recurring corrective periods.
Every analysis and forecast sug--

^

satm4

niendous.

.of

'
,
.
In the short
T

Inter-Mountain Telephone
Company
.

Common

Stock-Voting ($10 Par Value)

.

prepared to countenance

supply.

Copies ot the Prospectus may be-obtained irom such ot the
undersigned

.'

.

are

as

registered dbalers In this State.

Courts & Co.

Equitable Securities Corporation
Francis I. du Pon* & Co.
Clement A. Evans &

...
Mason-Hagan, Inc.
The Robinson-Humphrey Co., Inc.
.

..

Company, Inc.

Johnson, Lemon &




Anderson & Strudwick
Co.

in

fairly

the

the^money

The capacity of the non-

ments.

that

even

difficult

groups

kept

futUre.

bank sector of the economy to ab- >

"

■

rru

short-dated Treasury issues,
which has been so marked.in.the

a

b.

^

of

to

more,

its

(Special to The Financial Chronicle)

less,

in

u-

u

±

x

-j

started

.

^

{■

C.—Thomas WDickens; is now with. Southern
Investment w.,-^.,.^
Co., Inc., Barbre-As' iUYv^uv-uv
in ^ew Finance Co. Building,

the

KINSTON,

N.

-

.

prlnf.^ ls held, may.

.'Continue, therefore, with
months, has probably.
.Certainly this will ;mmor interruptions into the 1960s.
prove true if the business recovNotes Less Liouiditv
ery carries forward into a period
xnoics Less Liquiaity

nasi several months, has nrnhahU
past several

With Southern Investment

believe

will need

^

MaShSl Booker to limitS

members of the New York Stock
Exchange.

up

-

much

members

partnership in the firm; All are

and social develop-

is

It

these

•

Co., 20 Broad

City',

York Stock Exchange,'

May 1st, will admit W. Wilsdii

: tod^

speed

now,

accelerating

rather than

sorb

run

Price $13.50 Per Share

increase

a

°»

municipal cafi'tol expenditui^s

with

t>e_even more un- technological

+i^Xje

marked

-

may

iv

Holden. Joseph P. Shea, and John
wrirn - tri Wn^raT bartn^rshin

insatiable

«»^SSdJd
a»^^pal

riave hardly,

,.A.

settled unless the Federal Reserye
is

Rights, evidenced by Subscription Warrants to subscribe lor
these shares have been issued
liy the Company to its Common
Stockho ders. which
Rightc expired Apn 10, 1959 at 3:00 P.M.,
E-S.T, Terms of the Underwriting Agreer
Agreement are more fully set
forth in the Prospectus.

,

end, conditions

tre"

could be

Noi- is .the

,iwii

Niw York
of the New

pres-

toVave rnTpwaiTbiarUW ^

399,000 Shares

ww>fl,11^

^Sts th^fore, increasing pr^-

sures_ on long-term

-

To Admit Partners
Wagner, Stott &

.

.

.

....

.

1ftM

Erwin Adds to. Staff

.

course.

(Special to The Financial Chronicle).
.

DURHAM,

N.

C.—Leighton E.

Of active inventory accumulation
by corporations. Buying of treasuries is likely to give way to liquidation which, when added to the
Treasury's cash needs, may well
impose a real strain on the.: banks,

I have already suggested that Johnson has been added to the
the conditions. Tinder which the staff of Erwin & Co., Inc., Trust
economy embarked upon this Building,
latest upward surge are substant
tially different. to those of • other
Joins J. Sturgis May
expansive periods of recent post(Special to The Financial Chronicle).
Under conditions such as these, war yeai*§.
fn simple terms, the
HIGH POfNT, n: C.—Cornelius
any basic movement of interest whole finaricial structure is much
rates at the short end may be. ex- less liquid. This is obvious in the K. Rand has joined- the, staff of
pected also to be in an upward' current level bf interest rates and J. Sturgis May & Co,, Security

direction.

/

v

"

the structure of bank portfolios.

National Bank Building.

Volume

189

Number

5838

.

The Commercial and Financial Chronicle

.

.

(1731)

New Issue

$60,161,000

:

\;

:

Commonwealth of Massachusetts
3V2% Bonds

•

v.
'

■»

Dated

'

..••v

r"

r

'

February 1, 1959

*

'

■'

•;

•

•

••

:vy^

.

V.

.k

v

•

'

••

x

;•

■'

-v:.

:

Due

»•■•••

-

•

-

February 1,

•

as

shown

Principal and semi-annual interest (February 1 and August 1) payable at Bankers Trust Company, New York, N. Y., at The First National Bank of
Boston,
Boston, Mass.

at The First National Bank of

or

Chicago, Chicago, 111. Coupon bonds in the denomination of $1,000.,

exchangeable for fully registered bonds in multiples of $1,000. but

Interest

not

interchangeable.

Exempt from Federal and Massachusetts Income Taxes under present laivs

Legal Investment, in

our

opinion, for Savings Banks and Trust Funds in New York, Massachusetts and
for Savings Banks in Connecticut

certain other States and

These bonds, to be issued for Capital
Outlay, Veterans' Services Loan, Highway Improvement, Drainage and Flood Control, Sewerage
and Water purposes, in the
opinion of the

Attorney General will constitute direct general obligations of the Commonwealth

of Massachusetts for the
payment
such purpose

of which the full faith and credit of the Commonwealth will be pledged and for
the Commonwealth will have power to levy unlimited taxes on all the taxable property therein.

:

1

/

/:

;

AMOUNTS, MATURITIES AND PRICES
(Accrued interest

to

he added)

To Yield
Amount

Due

$2,649,000

1960

2,649,000

1961

2.20

2,649,000

1962

2.40

2,649,000

2,524,000

J 2,524,000

1965

'To Yield

Amount

Due

$2;499,000

1973

3.30%

2,499,000

1974

2,499,000

1975

1963; 2.60
1964

To Yield

-

V
.

Price

2.80

;

:

>

Due

To Yield

1985

100

$129,000

1997

3.65%

3.30

739,000

1986

100

129,000

1998

3.65

•

3.35

739,000

1987

129,000

1999

3.65

1976:

3.35

739,000

1988

3.55

29,000

2000

3.65

1977

3.40

688,000

1989

3.55

29,000

2001

3.65

2,499,000

2.70

Amount

$739,000

2,499,000

^

Due

2,499,000

2.00%;

Amount

1978

3.40

214,000

1990

3.55

v

29,000

2002

3.65

1979;

3.40

214,000

1991:,

3.60

j;

29,000

2003

214,000

1992

3.60

29,000

2004

3.65

1993

3.60

29,000

2005

3.65

or

2,524,000

2.90

2,500,000

2,524,000

;1967

3.00

7 740,000

1980

3.45

2,524,000

.

:1966*

1968

.'739,000

1981

3.45

214,000

;

'f.:

3.05

2,524,000

,1969

-

3.10

.2,499,000

»1970

v

3.15

2,499,000

1971

'

;

3.20

;

These bonds will be

1982;

3.45

; 214,000

100

214,000

1995

739,000

1984

100

129,000

1996

Bankers Trust

The Chase Manhattan Bank

Company

...

Chemical Corn Exchange Bank

of New York

Continental Illinois National Bank and Trust
of

Drexel & Co.

Chicago

.•

us

are

%

The First National Bank
of Chicago

;

BIyth & Co., Inc.
:'r

^

■.

■.

Bache & Co.

Baxter &

Hornblower& Weeks

?

;

•

J

,

,

*

.-

'

'

.

.

■

y

1

.

\

A. C.

Allyn and Company

Coffin & Burr

'

..

•

'

.

'

f

Rand & Co.

George P. Fogg & Co.
.

r

Schoellkopf, Hutton & Pomeroy, Inc.
,

Reynolds & Co.

Commerce Trust Company

incorporated

Kansas City, Mo.

Fitzpatrick, Sullivan & Co.

E. F. Hutton & Company

R. H. Moulton & Company

J. A. Hogle & Co.

Branch Banking & Trust Co.
Wilson, N. C.

Spencer Trask & Co.

'

Newark

McCormick & Co.

1

A. M. Kidder & Co., Inc.

'

Third National Bank

Wachovia Bank and Trust Company
Winston-Salem

Lyons & Shafto

Fidelity Union Trust Company

'

1

First Southwest Company

'■ "•

Robert Winthrop & Co.

Clayton Securities Corporation

information which

we

J. R. Williston & Beane

:

Incorporated

Statements herein, while not guaranteed, are based upon

,

R.S. Dickson & Company

Tucker, Anthony & R. L. Day

Townsend, Dabney and Tyson

Tripp & Co., Inc.

.

Kean, Taylor & Co.

Incorporated

William Blair & Company

,

Chace, Whiteside & Winslow, Inc.

•

,

.

? Weeden & Co.
*

...

-

Incorporated

Wood, Gundy & Co., Inc.

Ira Haupt&Co.

Laurence M. Marks & Co.!

•

Wm. E. Pollock & Co., Inc.

.

Courts & Co.
'

F. S. Smithers & Co.

'

»

f

The Marine Trust Company

Baker, Watts & Co.

-

Estabrook & Co.

1

Gty, Mo.

King, Quirk & Co.

*

R. D. White & Company

„




Adams, McEntee & Co., Inc.

Geo. B. Gibbons & Company
Incorporated

in Nashville

April 15, 1959.

of Boston

Shields & Company

Equitable Securities Corporation

Dick & Merle-Smith

Incorporated

Stroud & Company j
Incorporated

of Boston

Co., Inc.

The First National Bank

F. S. Moseley & Co.

j Braun, Bosworth & Co.
<j

0f Western New Y®rk

*

_

Arthur L. Wright &

*

Blair & Co.

Incorporated

Barr Brothers & Co.

,

Bacon, Stevenson & Co.

Bartow Leeds & Co.

Blunt Ellis & Simmons
'

Kidder, Peabody & Co.

Incorporated

Carl M. Loeb, Rhoades & Co.

J. C. Bradford & Co.

City National Bank & Trust Co.

;

Incorporated

Newark

Dean Witter & Co.

Hallgarten & Co.

,• -

Incorporated

Eldredge & Co.

Rockland-Atlas National Bank

Bear, Stearns & Co.

>

W.E.Hutton&Co.

Robert W. Baird & Co.

,.

(

;

L. F. Rothschild & Co.

of St. Louis

Kansas

The Ohio Company

Bacon, Whipple & Co.

National State Bank

Harris Trust and Savings Bank

Glore, Forgan & Co.

.

Dominick&Dominick

Incorporated

Laird, Bissell & Meeds

R. W. Pressprich & Co.

.

Incorporated

Gregory & Sons

Weigold & Co.

Goldman, Sachs & Co.

Eastman Dillon, Union Securities & Co.

The Boatmen's National Bank

'"V

Phelps, Fenn & Co.

'

<;

r

'

Harkness & Hill

Incorporated

Incorporated

-

'

t

"

•

Laidlaw & Co.. W.H. Morton & Co.

Hirsch & Co.

Shearson, Hammill & Co.

Wood, Struthers & Co.
Chas. E.

,

;

discount.

a

t

Hemphill, Noyes & Co.

Clark, Dodge & Co.
,

I

Roosevelt & Cross

•

Salomon Bros. & Hutzler

of Oregon

Francis I. duPont & Co. —- A. G. Becker & Co.

First of Michigan Corporation

Hayden, Stone & Co.

3.65

Incorporated

Company

l.

3.65

Halsey, Stuart & Co. Inc.

-

The First National Bank

k.

-Incorporated

Alex. Brown & Sons

2008
2009

bonds purchased at

accrue on

The First Boston Corporation

,

t

29,000

^

C. J. Devine & Co.

- -

Ladenburg, Thalmann & Co.

Paine, Webber, Jackson & Curtis

G. H. Walker & Co.

Ingen & Co. Inc.

3.65

.

'

...

B. J. Van

Smith, Barney & Co.

The Philadelphia National Bank
*

,

'

.

White, Weld & Co.

Incorporated

Lehman Brothers

Incorporated

•;

Seattle-First National Bank

3.65

2007

3.65

•

Harriman Ripley & Co.

.

Company ""' The Northern Trust Company

^

2006

29,000

v

and subject toaooroval of legality by the Attorney General of the Commonwealth of Massachusetts.

^

Stone & Webster Securities Corporation

29,000

3.60

at not less than their par value, and a taxable gain
may
required Under existing regulations to amortize any premium paid thereon.

ofNewYork

,

.

Merrill Lynch, Pierce, Fenner & Smith

Mercantile Trust Company

:

The First National City Bank

.

Guaranty Trust Company

r

.

3.60
■

initially issued by the Commonwealth of Massachusetts

and if issued and received by

as

.

v
Investors

When,

3.55%

1994

1983

Price ;

J 29,000

>

3.25.

2,499,000 3 1972

739,000
739,000

.;
•

-

or

believe to be reliable.

"

Loker, Sparrow & Co.

White & Company

The Commercial and Financial Chronicle".

8

.

Thursday, April 16, 1959

.

(1732)

American

Telephone

Telegraph Company—Report—Reyn¬

&

120 Broadway, New York 5, N. Y. Also avail¬
reports on Industrial Acceptance Corp. and Dorr

& Co.,

olds
able

are

COMING

Oliver Inc.

Arundel Corporation—Report—The

EVENTS

Milwaukee Company, 207
Also available is a

Street, Milwaukee 2, Wis.

East Michigan

Broeck &

Bndd

tive

Wall

U. Cobleigh—David

York, N. Y.—$2.50.

Exchange which have paid quarterly cash
dividends from 20 to 95 years—New York Stock Exchange,
11 Wall

Street, New York 5, N. Y.
Japanese Construction & Engineering—Analysis with particu¬
lar reference to Taisei Construction Co., Ohbayashi-Gumi
Nippon

Nomura Securities
Co., Ltd., 61 Broadway, New York 6, N. Y. Also in the same
monthly report are discussions of the 10 Japanese stocks
Warehouse Industry

considered
.

favorites for

Survey

—

1959

—

and data on

Daiichi Bussan,

Mitsubishi Shoji end Marubeni-Iida.

Leading New York City Banks—Comparison as of March 31—
A. M. Kidder & Co., Inc., 1 Wall Street, New York 5, N. Y.
York City Bank Stocks—Comparison and analysis for
New York

5, N. Y. Also available is a study of the economy
at the first quarter's end.
Opportunities Abroad—Bulletin on British American Tobacco
Co., Canadian Pacific Railway Co., Electrical & Musical In¬

Over-the-Counter Index—Folder showing an up-to-date com¬

parison between the listed industrial stocks used in the Dow-

Averages and the 35 over-the-counter industrial stocks

Averages, both as to
period —
New York

and market performance over a 20-year
National Quotation Bureau, Inc., 46 Front Street,
N.

Y

Treasure Chest in (he Growing West.—Brochure giving details
on industrial opportunities in the area served—Utah Power
&

Norris Thermador Corporation.
McDonnell Aircraft Corporation

Light Co., W. A. Huckins, Dept. 15, Salt Lake City, Utah.
#

e

Co., 40 Wall

Street, New York 5, N. Y.
American Greetings

homa Gas and Electric

Corp.—Analysis—Cohen, Simonson & Co.,

homa

25 Broad

Street, New York 4, N. Y.
—
Survey — Abraham & Co., 120
Broadway, New York 5, N. Y. Also in the same circular are
surveys of Canadian Pacific Railway and Champion Spark

Olin

American Hardware Corp.

Wall

—

Bulletin

—

&

A. G. Edwards &

Company, 321 North Harvey, Okla¬

May 15-17, 1959 (Los Angeles,
Calif.)

Security Traders Association of
the

(Omaha, Neb.)

May 19-20, 1959
-

at

party

Investment

Nebraska

Bankers

Association annual field day.

May 25-26,1959 (Milwaukee, Wis.)
Association of Stock Exchange
Firms Board of Governors meet¬

ing at the Pfister Hotel.
(San Francisco,

June 5-7, 1959

Calif.)
San Francisco Security Traders
Association, at the Santa Rosa

v
.

.

Motel,

Flamingo
Calif.

.

Santa

Rosa,
.

8-11, 1959 (Alberta, Canada)
Investment Dealers' Association

June
•

/

of Canada annual convention at

•

.>

Banff Springs Hotel.

June

11, 1959

Chemical

(Boston, Mass.).

Boston Securities Traders Asso•

ciation

summer

outing

12, 1959

June

the
\

at

;

Salem Country Club.

(New York City)

Bond Club of New
York Summer outing at West¬

Municipal

chester Country
June

Club.

12, 19591 (Philadelphia, Pa.)

of

Philadelphia Summer outing
Club.

at the Overbrook Country

June 18, 1959

Corporation—Analysis—Sprayregen

(Minneapolis-St.

Paul, Minn.)

\

Cities

Bond

Club

38th

and outing at
White Bear Yacht Club, White
annual

Lake, Minn, (preceded by

Bear
a

picnic

cocktail party June 17 at the

Nicollet

Hotel, Minneapolis).

Broadway, New York 4, N. Y.
Ryan Aeronautical Co.—Report—Dean Witter & Co., 45 Mont¬
gomery

St. Regis

Telegraph

Company—Report—David
J. Greene and Company, 72 Wall Street, New York
5, N. Y.

Street, San Francisco 6, Calif.

—

Street, New York 5, N. Y.

GET RICH

'

,

Southwestern Electric Service Company

—

Annual report —
Build¬

Electric Service Company, Mercantile

BUYING

ing, Dallas, Texas.

Company—Report—Schweickart & Co., 29
New York 6, N. Y.

Square D

financial institutions

way,

Union

Trust

Life

Insurance

Co.—Analysis—Loewi &

Broad¬
Co. In¬

corporated, 225 East Mason Street, Milwaukee 2, Wis.

■

HOW TO

Corporation—Data—M. J. Reiter Company, 60 Wall

Southwestern

Recent New Issues—

summer

Biltmore, Palm Springs.

50

Halle-& Stieglitz, 52

For

Angeles

Los

Twin

Organization, 120 Broadway, New York 5, N. Y.
Pan American World Airways, Inc.—Analysis—Purcell & Co.,

Street, New York 5, N. Y.
Telephone

—

Co., 26 Broadway, New York 4, N. Y. '
American Sulphur Company—Bulletin—De Witt Conklin

&

American Pipe & Construction Company—Analysis—Hill Rich¬
ards & Co., 621 South Spring Street, Los Angeles 14, Calif.

American

Report

City 1, Okla.

Mathieson

Pan

Plug Company.

American Steel Foundries

at

Investment Traders Association

—

Sons, 409 North Eighth Street, St. Louis 1, Mo. Also avail¬
able is a report on Dictaphone Corp.
Oklahoma Gas and Electric Company—Annual report—Okla¬

c

Abbott Laboratories—Analysis—Glore, Forgan &

outing

Maryland.

Trust Investment—Reprint

Co., 453 South Spring Street, Los Angeles 13, Calif.
Public Service Co.—Memorandum—A. C. Allyn & Co.,
122 South La Salle Street, Chicago 3, 111.
Kerr-McGee Oil Industries, Inc.—xlnalysis—Shearson, Hammill
& Co., 14 Wall Street, New York 5, N. Y. •
Lanier Aircraft Corp.—Reprint from Flight Magazine describ¬
ing Stol Paraplane—B. S. Liechtenstein & Company, 99 Wall
Street, New York 5, N. Y.
Long Point Gas & Oil Limited—Report—Doherty Roadhouse &
Co., 335 Bay Street, Toronto, Ont., Canada.
Macco Corporation—Analysis—Leason & Co., Inc., 39 South
La Salle Street, Chicago 3, 111. Also available is a report on

Co., Massey Ferguson, Ltd. and Shell Transport &
Trading Co.—Bache & Co., 36 Wall Street, New York 5, N. Y.

4.

a

24th

sociation

Iowa

dustries

yield

as

Building, Houston 2, Texas.
:
Howe Sound—Memorandum—Woodcock, Hess, Moyer & Co.
Inc., 123 South Broad Street, Philadelphia 9, Pa.
Interstate Bakeries Corp.—Memorandum—Bateman, Eichler &

first quarter of 1959—Laird, Bissell & Meeds, 120 Broadway,

Jones

May

(Baltimore, Md.)
Trader^ As¬
annual
Spring
Country, Club of

Baltimore Security

v

ton Club

New

used in the National Quotation Bureau

May 15, 1959

:

York 7,

New York.

Japanese

try Club.

of an article—
New York Hanseatic Corporation, 120 Broadway, New York
5, New York.
Filtrol Corp.—Data—flu Pont, Homsey & Company, 31 Milk
Street, Boston 9, Mass. Also in the same circular are data
on Yale & Towne, Joy Manufacturing and Kelsey Ilayes.
Garrett Corp.—Analysis—Newburger, Loeb & Co., 15 Broad
Street, New York 5, N. Y.
Gulf Oil Corporation—Annual report—Gulf Oil Corporation,
Room 1300, P. O. Box 1166, Pittsburgh 30, Pa.
Houston Corp.—Memorandum—Dempsey-Tegeler & Co., Hous¬

Yamaichi Securities

Company of New York, Inc., Ill Broadway, New

Atlantic Coast Line Railroad.

Fannie

Chiyoda-Ku, Tokyo, Japan.

Japanese Stocks—Current Information

try Club and Belle Mead Coun¬

Lynch,

on

Co. Ltd., 8,

Hodo—The Daiwa Securities

l

Union Trust Building, Pittsburgh 19, Pa. Also
a memorandum on Diebold, Inc.
Cooper Jarrett—Analysis—Weingarten & Company, 551 Fifth
Avenue, New York 17, N. Y.
Eastern Shopping Centers, Food Fair Properties and Wrigley
Properties — Comparative report — Darius Incorporated, 90
Broad Street, New York 4, N. Y.
;
Evans Products Company—Analysis—Hayden, Stone & Co., 25
Broad Street, New York 4, N. Y. Also available are reviews
of Pepsi-Cola, Radio Corporation of America, Standard Rail¬
way
Equipment Manufacturing Co.,
American Tobacco,
Scaled Power Corporation, Niagara Mohawk and Acme Steel.
Evans Products Company — Report — Thomson & McKinnon,
2 Broadway, New York 4, N. Y. Also available is a report

New York Stock

and

Dealers of Nashville
party at Hillwood Coun-

Annual

available is

Help—Booklet on services offered—
Ebasco Services Incorporated, Dept. V, 2 Rector Street, New
York 6, N. Y.
Investment Facts—Tabulation of 334 common stocks listed on

Ltd.

Security

New York 6, N. Y.
Continental Commercial Corp.—Memorandum—Moore, Leonard

Story of Outside

2-Chome Otemachi,

May 14-15,1959, (Nashville, Tenn.)

Corporation—Analysis—Ira Haupt & Co.,

Foods

Waldorf-Astoria.

the

at

v

Ill Broadway,

Railroads—Study of the outlook—Edwards

McKay, Inc., 119 West 40th Street, New

Annual report —
Montgomery

—

Water & Telephone Company, 300

Consolidated

in¬

Hanly, 100 North Franklin Street, Hempstead, N. Y.

Inside

Dealers
party at

May 1, 1959 (New York City)
Security Traders Association of
New York 23rd annual dinner

Street, San Francisco 4, Calif.

&

How to Get Rich Buying Stocks—Dr. Ira

Water & Telephone Company

California

Street, New York 5, N. Y.
&

annual spring

Group

5, N. Y.
Co.—Memorandum—Blair & Co., Incorporated, 20 Broad

California

Monthly Investment letter — Burnham and
Company, 15 Broad Sp^et, New York 5, N. Y. Also avail¬
able is current Foreign Letter.

Green Light for the

Municipal

Louis

the Sunset Country Club.

Street, New York 5, N. Y.

—

teresting for growth—Carl M. Loeb, Rhoades & Co., 42

St.

—

New York

Estate Bond & Stock Averages—Compara¬
figures—Amott, Baker & Co., Incorporated, 156 Broad¬
way, New York 38, N. Y.

Amoti, Baker Real

Electric Utilities—List of issues which the firm considers

(St.

1959

1,

Louis, Mo.)

Analysis — A. G. Becker & Co.
Incorporated, 60 Broadway, New York 4, N. Y.
Botany Mills, Inc.—Analysis—H. Hentz & Co., 72 Wall Street,

Burnham View

29-30-May

April

Co., 55 Liberty Street, New York 5, N. Y.

Bergstrom Paper Company

Field

Investment

In

study of Wisconsin Municipal Bonds with tax-free yield and
a report on Siemens & Halske A. G.
Beecham Group Ltd., A. D. R.—Review—Alfred L. Vanden

c

STOCKS
-

Just

published! By IRA U. C08BLEI6H, Col¬

umnist, Commercial and Financial Chronicle

'

Washington Steel Corp.

*FXR, INC.

—

Memorandum

—

Singer, Deane &

Scribner, Union Trust Building, Pittsburgh 19, Pa.

Your exciting guide to
the 60 profit-laden stocks
for the surging 60's.

THOMAS & BETTS
ARVIDA CORP.

FIRM

ELECTRO-VOICE

Oavid McKay

BORMAN FOODS

MARKETS

COMMERCIAL & FINANCIAL

CHRONICLES

LAMBORN & CO., Inc.
99

on

Co., 119 W. 40th St, N. Y. 18, N. Y.

FOR SALE
In Excellent Condition—All

*

Prospectus
request

Canvas Bound

WALL

Members Neiv York
Security Dealers Association

74

Trinity Place, New York 6, N. Y.

HAnover 2-2400




Teletype NY 1-376; 377; 378

STREET

NEW YORK 5, N. Y.

From
1837 —to —1945

Troster, Singer & Co.

J

ONLY $2.50 at your bookstore, 4>r postpaid from

Available
Write
Edwin L.

or

immediately in N. Y. C.
Phone

—

REctor 2-9570

SUGAR
Raw

—

Refined

—

Liquid

Exports—Imports—Futures

Beck, c/o Chronicle, 25 Park PI., N. Y. 7
DIgby 4-2727

Number 5838

189

Volume

.

.

(1733)

The Commercial and Financial Chronicle

.

went

up, and even earlier when
income was expected to go un¬
people hastened to acquire goods
which make for a better living
standard.
What they*'expect. to
make in the future, rather than

Instalment Credit
~

GEORGE KATONA*

By PROFESSOR
"

\ "

Director, Survey Research Center ■
University of Michigan, Ann Arbor, Mich. "

Program

Country's foremost expert

buying plans states

on consumer

that instalment credit is not

the economic motor responsible

contraction of purchases. Dr. Katona's paper,
credit in our
economy, also surveys: (1) some economic beliefs held by
people; (2) question as to whether consumer wants have be¬
come satiated;
and (3) whether government should regulate

for expansion or

covering the function performed by instalment

blame the 1958 decline

claim there

was

Dr.' Katona

credit.

instalment

consumer

the extent of

on

avers

insufficiency of purchasing

an

debt

consumer

They say. that the American peo¬
ple have over-bought: and
are
over-burdened.
Being saturated,
they will be interested in saving
rather than spending, and the eco¬
nomic climate during the next ten
years will differ from that of the

cannot

you

nor

,

past ten years.

Re¬

power.

argument.

;

Let us study this

■>'

plentiful credit, he says, but also
on
optimistic expectations regarding personal financial pros¬
pects; course of the economy, and assortment and pricing of
goods. He sees some improvement in optimism but finds the
present attitude towards prices to be unfavorable.
depends not only

covery

In

order

of

function

today's

on

the

understand

to

credit

in

broad

v

.

per¬

I

shall begin by

asking the
following
question:
What

the

are

major

factors

which

have

characterized
American

the

dur¬

economy

These

were

prosper-

ous

years,

George Katona

that

fact

national., income

pessimism—there has been im¬
over
the
last
few
even though the scars of

months

the recession of 1958

was

fairly stable from the fall of 1957

We raise

-

healed.

far from

are

In the other

of families

sights only when
and optimistic.
When we are pessimistic, insecure,
or doubtful about the future,
we
lower our sights. Saturation is an
our

income

confident

are

we

attitude.

Failure

make for

the

case

over

the

American families,
haying bought a new house and a
variety of durable goods, felt the
need for still better housing and

frequency of buying plans,

pled

cially for automobiles, was very
low, people in general expressed
similar desires and needs as in

past 15 years.

course,

more

and better durable

Studies

carried

goods.

out in the spring

At

a

transportation, more comfort in
housekeeping and for a variety of

lated by the government;
the
time, most people

time when the
espe¬

;•

;

•

'

;

'

Credit Is Not the Economic
'

-

Motor

In

order

—which

'•

''

to have full

has

in consumer

recovery

not

yet taken place
durable goods — and

in order to resume the growth

of

need easy access
to plentiful credit; but it alone
does not suffice.
We need opti¬
our

economy, we

most of

exercise
self-regulation by calculating the
monthly charges they can afford
in

relation

they

see

their

to

prospects as

them.

Harriman Ripley New

in¬

recession; and the previous
large-scale purchases, made pos-.
sible
by instalment credit,
are
likewise not responsible for the
downturn.

and are

a

stalment credit need not be regu¬

for the

1958, during the worst months
of the
recession, indicated that
there was no depletion of con¬
wants.

But

expectations

in the future

Instalment credit rep¬
necdssary method for
satisfying needs, but it is not the
motor responsible for expansion
or
contraction of purchases.
In¬

stalment credit cannot be blamed

of

sumer

and worries
and prospects,
sharp deterioration in

a

pros¬

not

optimistic.
resents

doubts

short-term

decline in

purchases when people have

are

confidence

about employment
made for

a

debt

a

with

suffered

1958—and when

lates

frustration

and

in

good. Instalment
is not too high and stimu¬

pects

feeling of saturation,
and pessimism for a postponement
of satisfying our needs.

previous prosperous years. (This
things of life. Striving for higher was true even regarding automo¬
living standards is expressed in biles; especially desires for a sec¬
desires for better housing, better ond car were widespread.)

ing the past 15
years?

has been

Finally, confidence in personal
financial progress and trust that
there will be no depression have
made for concern with the good

a

spective.

This

f inflation did take
place during the past 15 years.
But
people do not view their
higher incomes as the result of, or
a compensation for, higher prices.
Most people think that their ris¬
ing incomes represent what is due
them. They consider inflation an
unfavorable development because
it detracts from the enjoyment of
the fruits of their labor.

to

buying

of several years

span

Of

provement

1957,
and declined
Finally, the well known

Simple biological needs — hun¬
In
1957
-and
1958, optimistic
ger, thirst—are saturated by being views and
feelings gave way to a
gratified.
But
regarding
social notion of uncertainty and caution.
needs, a different situation may People became convinced that
prevail. The more we achieve, the times were not good for buying
more we want.
Levels of aspira¬
automobiles and durable goods.
tion
rise
with
accomplishment. Resentment of
must go
high prices, cou¬

up.*-

society, it is
study instalment

American

necessary

a

in

instalment

or

and

in 1958.

respect—at¬
to the fall of 1958 contradicts the titudes toward prices—the situa¬
what they, make today,, is used as notion that the recession of 1958 tion is far from favorable; many
the
basis
for * calculating
how could be attributed to insufficient people have been - disappointed
large
monthly
payments
they purchasing power.. How can we that the recession and the consid¬
could afford to make. * ' • % 1
then account for the sharp decline erable unemployment were asso¬
in consumer demand for. durable, ciated with a rising prtoe trend.
'
Are Consumers Wants Saturated?
goods, and how can we under¬
Instalment debt is too high and
But this process cannot go on, stand it in view of the theory of burdensome when incomes fall—
this is how some experts argue. levels of aspiration?
v
* we should remember that millions

'

...

1955, did not increase further in
1956

9

San Francisco Branch
-

SAN

riman

FRANCISCO, Calif.—Har¬
Ripley & Co. Incorporated,

underwriters

and

distributors

of

investment

securities, have an¬
nounced the opening of an office
at 1428 Russ Building, under the
management of Charles W. Cobb,
Vice-President.

>

~

Associated with Mr. Cobb in the

management of the new office are
Philip G. Turner and Paul W.
Cowan.

Headquarters of Harriman Rip¬
regarding per¬
ley & Co. Incorporated are located
r
Credit
cherished
leisure-time
activities
sonal financial prospects and the
at 63 Wall Street, New York, and
which cost a great deal of money.
Nor can the 1958 decline in pur¬ course of the economy, as well as
try to summarize the underlying Young
Americans- decided
to chases of customer durables be a positive evaluation of buying branch offices, in addition to San
attitudes of the American people, many
early, to have several chil¬ explained by" arguing that the conditions resulting from the be¬ Francisco, are in Boston, Phila¬
rather than
present any of the dren in the early years of mar¬ American people had been over¬ lief that the right assortment of
delphia, Chicago,' Cleveland, De¬
well known statistics about the riage, to bring up their children
burdened by debt. The debt-in- goods is available at the "right"
troit and Reading, Pa.
increase in GNP, production, or
in
nice
neighborhoods,
and
to come ratio, which rose greatly in prices. In one respect—optimism
.retail sales. Detailed personal in¬ have a variety of expensive du¬
terviews with representative sam¬ rable goods at the same time.
ples of the .American population,
Doing the Impossible
carried out by the Survey Research
though
occasionally iutedruotcd by reces¬
sions. In describing them, I shall
even

several

Center

times

certain

disclosed

during

decade

the

each year,
features
climate

major

characterized

which

the

following

World War II.

Fear of Depression

No

a

longer
threatens us. They are convinced
that the great depression of the
30's and years of stagnation with
high levels of unemployment can¬
not recur again. "We have learned
how to avoid a depression," they
depression

severe

no

They do not think that it was
or the large expendi¬
tures on rearmament in the post¬

say.

the

war,

which brought about
high production and good times.
On the contrary, the majority of
people associate international con¬
flict with danger and high taxes,
and believe that it is detrimental

war

Jto

years,

good

them

a

mean_

to

of living.

depressions can be avoided

How

is

times, which
rising standard

far from

clear to most

people,

they have faith in the govern¬
ment's ability to do so and also
have confidence in business pol¬
but

icies.

Most

people

believe

that

today competitive American busi¬
ness
is interested in high levels
of

in mass dis¬
improved consumer

production

tribution

of

and

Second, overwhelmingly people
and optimis¬

have been confident

regarding their personal fi¬
nancial prospects.
During World

tic

War II most

families accumulated

liquid assets, and after the
became accustomed to
steady increases in incomes. The
belief' became prevalent that in¬
come could not go down and over
some

•An

on

-

mistic expectations

•

-

Two

major

First, how
and

lions

was

arise.

questions

it possible for mil¬

millions

of

families

to

$22,000,000

have

accomplished all this? Sec¬
ondly, having accomplished much
—that is, having bought houses,

Philco

TV sets, refrigerators, wash¬

ing machines, etc.—did the Amer¬

Corporation

ican families become saturated?
As to the first

question: It seems

4lA% Convertible Subordinated

that not only do

expenditures de¬
pend on income, but income also
depends on consumer needs. Need¬
ing and wanting expensive things,
people
have worked
hard
for
higher incomes. Millions of hus¬
bands have held second jobs, and

Debentures

?■
Dated

Due

April 15, 1959

April 15, 1984

$33*/3 a share on or before April
share, subject to adjustment in certain events.

Convertible into Common Stock of the Company at
and thereafter

at

$40

a

15, 1969
J

,

millions of wives havb returned to
work after their children grew up.
Most

importantly, however, in¬
has helped. Buy¬
instalment has become in¬
creasingly popular. Some older

stalment buying

ing

Price

on

100%

(plus accrued interest)

people still have misgivings about
being in debt or are concerned
with the cost of borrowing.
But
t

most

maintain
paid for

people
things should be
while using them.
younger

that

Instalment

securities. The

buying is particular¬
certain stages of

ly frequent in
the life cycle.

This announcement constitutes

Among

the

neither

an

offer

to

sell

nor a

offer to buy these
be obtained from
legally offer these

solicitation of

offer is made only by the Prospectus, copies of

which

an

may

undersigned only in such States as the undersigned may
securities in compliance with the securities laws of such Statesr

,

-

younger,

middle-income families with chil¬

dren,

70

have

had

to

80%

were

instalment

found
in

debt

to

Smith, Barney 8i Co.

the

1954-57.
In addition, in¬
stalment buying is associated with
an upward trend in income.
Year
after year we find that more of
years

goods.

war

•

cars,

that

believe

people

First,

Can't Blame 1958 Decline

they

address

National

by Dr. Katona

Instalment

Credit

before the
Conference,

sponsored by the American Bankers As¬
sociation, Chicago, 111., March 10, 1959.




the

families

increase and

who

had

more

income

an

of the families

who expected an income

increase

had instalment debt than families

with stable
income

income

or

expectations.

economists

theorized

so

in the 50's!

Goldman, Sachs 8C Co.
Merrill

When

Kidder, Peabody 8C Co.

Lehman Brothers

Stone 8C Webster Securities Corporation

White, Weld & Co.

there

income

Eastman Dillon, Union Securities 8C Co.

Incorporated

In the 30's,
that

Drexel 8C Co.

Lynch, Pierce, Fenner 8C Smith

unchanged

ought to be a fairly long time lag
in
the
adjustment of consumer
expenditures to income increases.
Not

Blyth & Co., Inc.

April 16, 1959

-

10

The Commercial and Financial Chronicle

(1734)

farmer

having

is

time

harder

a

.

.

Thursday, April 16, 1959

.

.

of

From

Believe it or not, but

the cost of

operating the government's farm
program next year, that is the fis¬
cal year beginning July 1, will be

billion,

yet the
esti¬
mated net in¬

all

of

come

at

little
than

be

bil¬

That can

lion.

by

means

no

called

p reposition.
We would be

off

better

if

we

got rid of

©11

our

farms

©nd bought all
©ur

foodstuffs

in his message to Congress

port prices be authorized by which
Benson could lower supports to

a

sound

very

points, out that the
is
1,500,000,000
bushels while the
government owns all but 254,000,000 bushels. This, he says, is ridic¬
ulous and proves that something
is radically wrong with the farm
program. In fact, President Eisen¬
supply of wheat today

agriculture,
sad
flatly
the
present program was not work¬
ing.
However, he suggested no
particular remedy, beyond asking
that a new formula for fixing sup¬

more

$13

Of

on

a

60% of parity. This is one reason
why Congress has shown a com¬
plete apathy towards his recom¬
mendations and as of this writing
Carlisle Bargeron
has no intention of trying to form¬
ulate
any
new
farm legislation.
"'v?
V-O:.
and fibers from The Democrats, who are in con¬
trol

©broad.

both

of

of

Houses

Congress,

apparently are inclined to let the
this; sorry situation,
Republicans stew in their own
Congress has shown no disposition
juice.
thus far to do anything about it.
Benson has already taken 23,Secretary Benson has asked for a
few million more to take more 000,000 acres out of cultivation
Despite

land out of production by putting
it in the soil conservation reserve,
©nd authority

to reduce the price

as much as 60%.
Secretary made a valiant
fight of over two years to get sup¬

Supports to
The

under

the

conservation

Utility Securities
By OWEN ELY

The Senator

visible

a

bill

S. G. Eisenstadt V.-P.

BARGERON

hower

farmers is es¬
timated

awaken

least

will
at
dormant subject.

Capehart's

of the News

£y CARLISLE

Public

,

Washington

Ahead

$6*4

it, he wants to get all out of-1
his land that is possible.
*

reserve

by which farmers are
paid all the way from $8 an acre
to $20 for taking their acreage out
of production.
Capehart would
raise
this
amount
to 73,000,000
acres.
There are some 390,000,000
program

Moroney, Beissner

HOUSTON, Tex.
Eisenstadt, a
30

Outlook for Electric Utilities Remains Favorable

the

in

vears

field,

ing

joined

electric

utilities

Percentage Increases

'

1957-8
Number
Kwh

as

2.0%

9.5

6.7

8.2

*2.0

2.6

y

6.6

7.4

5|.3

the utilities able to
larger increase in net in¬

40-year-

show

a

Houston

come

in 1958 despite a smaller in¬

sons

firm, said Mr.
b

Sam Eisenstadt

ackground

lized

be

tion, security analysis and
financing by corporations.

School

He

has

of

B.S.

(2)

Uni¬

a

ceived

in

Co

hewas

companies

gain

and

in

re¬

there

industrial

(despite the dip in kwh.

sales) due to-protective rate fea-

the

Beissner

jpTrtner

a

Chicago, where he
of

'slight

a

of

increases

tures. (3)• Salaries and wages ingeneral
creased only 4.9% vs. 7.3% in 1957,
Strauss, Blosser & McDowell in possibly due to smaller wage in-

Prior to joining Moroney

of

rate

revenues

Street" in Chicago since that time,
ft

number

A

was

"La. Salle

on

(1) Fuel costs

3% less than in 1957,

were

about one-third as much or 2.4%.

Commerce,'

been

follows:

rea¬

creased irr proportion to sales, net
income would have increased only

new

Northwestern

from

versity,
1927.

received

Eisenstadt

Mr.

as

Some of the

largely because of better hydro
conditions; if fuel costs had in-

uti-

primarily in sales, syndica-

degree

are

in 1958

Eisenstadt's

would

in sales?

crease

in charge creases. (4) While interest charges
and
research were up 16% due to higher money

was

statistical

port prices down from a rigid 90%
departments. His duties included rates much of this was offset by
of parity to a flexible scale. With tillable acres in the country.
the planning and preparation of .an;increase in the bookkeeping
this formula, he has succeeded in
Since the government first in¬ investment
portfolios AM' the credit "Interest Charged to Conbringing all prices down but he tervened in the affairs of the farm supervision of client accounts;'in- struction"; without the $40 milhasn't proved his point that this in 1933 the government has spent
eluding those of individuals, banks, lion * estimated • ; increase in this
would be beneficial. The surplus $30,000,000,000 trying to stabilize
and
other
institutions. f He ? also credit, along with the fuel cost
is still growing.
farm
prices,
$15,000,000,000
of had responsibility for investigate- adjustment mentioned above, net
Senator Capehart, Republican of which has been spent in the past
ing, buying and processing under- inc'ome would have shown a slight
Indiana, has taken the bit by the six years.
«•": \
writings and private placements,
decline instead of a 7.4% gain.
teeth and the indications are that
It has made a
^shambles out of
V.yV
?
'
Thus the excellent showing
hair will fly the latter part of this a tremendous structure whose ef¬
made last year depended mainly
week.

He intends to introduce

bill which would freeze

plus, allowing only
to be released

as

a

the sur¬

the whole world.

much of it

so

that bartered and

under Public
haw 480, and that which is given

given

ficiency has attracted the envy of
A

Benson and his critics

was

search into industrial

uses

of farm

er

farmers

are

they

prosperous

change,

the New
on

York

May

Stock

will

1st,

jn

firm.

Mr.

charge

of

de

Saint-Phalle

the firm's

is

foreign

partment.
•

are

'

*

5

/.

Powell & Co. Adds
(Special to The Financial Chronicle)

sell S. Carter is

much fertility and in good timejs
the farmer is inclined to preserve

&

©ut of the farm business.

it.

N.

Company,

Inc.,

good

—

the

year

gain of perhaps 10%

a

based

seems

on

a

solid foundation of improv-

In the week

ended April 4, U. S. electric output
showed

gain of 11.4%

a

over

last

with weekly gains
ranging between 9% and 10% in
de- March. Companies with heavy industrial business were the principal gainers, though some others
also had surprising increases in
the April 4 week:
year compared

in

C.—Rus¬

Public

American

with Powell

120

this

ing industrial sales.

Street.,

When prices are low, and the

now

factors

But

income

Arizona

FAYETTEVILLE,

government could drop
©11 price supports and get clean
\

net

m0re

Ex-

admit

Claude de Saint-Phalle and Hugh
P. Guiler to partnership in
the

would in a few years liable to take it easy, not putting
bring production and demand into so much fertilizer into their land
balance.
At that time, he fore¬ because after all land has only so
the

outlook for

Deetjen & Co., 120
Broadway, New York City, mem-

products,

sees

adjustments.

Emanuel,

bers of

favorable

weather and favorable accounting

Admit New Partners

wheth¬

higher price supports didn't in¬
crease
production.
Benson
has
that
©way to needy cases in this coun¬ contended
they
did.
His
try.
Then, he would in effect, critics hold to the contrary.
A
raise the parity price to 90% and study shows that Benson is
wrong,
take 50,000,000 more acres out of the critics right.
With low parity
cultivation and put in conserva¬ prices next year's production of
tion storage.
This, he believes, corn is expected to be the largest
©long with his bill to greatly in¬ on record.
crease
the appropriation for re¬
The
record
shows
that
when
away overseas

Emanuel, Deefjen to

long time argument between

two

on

Service

Electric

27%

Power-

18

Central & South West

19

Cleveland

Anderson

25

Electric

Consumers

the

Power

23

least

the

from
population

years

100

,

,,

,

Pacific

households. ' The

then

may

the

t

(

Public

tion. Air-conditioning and "climate
control?

will be used throughout
industry.- Ultrasonics, generated
by "electricity, will have taken
-

.

Electric

making

quick comeback—
^
the new-cars will be "plugged in"
to any outlet over night to re¬
charge batteries. In future homes
now

income

net

^fdn^La^ndn00jSt wlU be °Pened
said, and
is

PY pusnouuon, it
household chores will
by

up

electronics

average

residence

three times
at

as

present,

be

speeded
that

so

—

the

nearly
electricity as
if heated
and

may use

much

and

cooled by electricity—eight or ten
times as much.
One of the

biggest present load

builders is electric heating, which
serves as a seasonal offset to sum¬

air-conditioning. Some com¬
panies
such
as
Commonwealth
mer

-

Edison

have

put into effect

new

low rates to stimulate heating by
_

electricity,

v and- that
company's
heating installations increased last
year from 138 to 839 with an additional 561 in process. American
Electric Power at the end of 1958
had 14,266 electrically heated
homes, an increase of 37% over
1957. Florida Power Corp. remained the leader as to customers
using heat pumps for combined
heating
and
cooling, reporting

2,283 such units

on its lines.
operating efficiency
continue.
Philadelphia
Electric
expects some of its new generat¬

in

Gains

93/100 and in 1925

two

pounds

21

for- the

month

...,

,

few com-

A

study

of

as

compa-

available

fore-

(which are no longer
released as freely as in former
years because of SEC restrictions)
indicate a probable average inof 8-10% in share

despite
two

the

earnings,
probability that the

favorable

net will

than

industry is still stepping up aver¬
efficiency. In the transmission
field gains are being made by reducing line losses and by use-.of
extra-high-tension lines. Not only

age

£*«££but uthihef arfirem'

same

year 1959

factors

counted for last

more

required. Mainly
by using bigger units with higher
temperatures
and pressures
the
were

are power pools being extended

casts by individual companies for

crease

to

be

largest for 1959, the
anticipated for industrial

.the

coal

percentage

the

nies.

of

~

.

a

thelLt^rtg wu!

gains in

$1,000,000 5 % Convertible Junior Subordinated Notes due 1974

a

was

33

—

'ap^?rs UkelvXThal

•

.

over some jobs. Electric cais are

21

Service-——

*

February published by

$3,000,000 5Vi % Subordinated Notes due 1974

nearly three times

use

present amount of electricity,

due to mechanization and automa¬

30

S

P.

Electric

&

West-Penn

'

new

worker

average

24

Indiana

Gas

Southwestern

Company

increased

use only 64/100 pound
produce one kwh., al¬
though the U. S. average in 1957

24

....

•

have

million, with 24 million

of

of

•

years.
In 20
it is estimated that

may

ing units to

Utilities

figures for revenues
and earnings in 1959 to date are
not yet available, but the reports

*,.•'*

means

few

now

30

States

L.

Industry

v

increase iq,. the birth

next

25

&

Northern

v.

increasing

in the postwar period

P.

Ohio Edison '

Walter E. Heller &

population

mushrooming population for at

a

Edison

Gulf

placed privately through the undersigned with institutions purchasing them for investment:
They are not for sale mid this advertisement appears as a matter of record only.

in

regularly

The rapid
rate

Detroit

uere

fa¬

are

other

increase

the

by

Florida

These securities

utilities

most

over

of the product.

were

old

stment

barring such adverse devel-r

both

use

the

n v e

_

needed the worst. How¬

are

and

^Decrease.

Why

*

growth
industries because they have "two
wings to fly on"—they benefit by

sen¬

ior Officers of

i

*

that

is

usually more difficult to ob-i
during
depressions — when

are

tain

vored

4.4

4.8

________

Income

Net

i.U

opments, electric

2.0

Revenues

and
M.

•

_

ever,

Total

r

connection

frequently subject to political
prcssures' so that rate "creases
they

2.4%

8.1

Industrial

n

e

Customers

Commercial

Robert E.

H

of

1__

195(1-7

Sales—

Residential

Vic e-P resi¬

Beissner.

this

are

are some comPartsons

and B pnvately

dent.

Moroney

in

Fo1

bank-

the Southwest

Building,

mind

regulatory agencies are notoriA
ously fickle in their reasoning and

Moroney,

of

Bank

sur-

U

Beissner &

Co.,

did

prisingly well last year considerin/Y
fflnncoinn
in
ing the recession in the first half,

5?'

investment

has

The

which

ac-

year's gain in U. S.

probably not be

so

bene-

hilll* ?% °TZ
"
-1?^

^

4ninf

11QP

Th

IZ'LZ .JtZl
.

,

.

f

9

use of computers

aiJ?ie ^ugmeering problems,
•

dispatching

for

maximum

^lciency» customer billing, ^tc.

subject to the limiting fac,^5 weather, bad regulat101\and bad business (and barring
;?rs
a

devastating

outlook

for

the

World

War), the
industry remains

rosy.

this vpar.

The

F. Eberstadt

&

Co.

Dean Witter

&

Co.

long-term

industries)

business




by

the

(in less degree than more

Sliujcc c

cyclical

April 15,1959.

outlook

industry continues bright, al¬
though, of course it will remain

conditions

possibility
sion
in

or

the

a

that

world

1960s.

A

a

to

and

"real"

war

changing
to

the

depres¬

may develop
point to keep in

Theodore Tsolainos
To Admit E.S.Wilson
Theodore

Tsolainos &
Co., 44
Wall Street, New York City, mem¬
bers of the New York Stock Ex¬

change,

on

Edward

S.

May

1st,

Wilson

to

will

admit

partnership.

Volume

Number 5838

189

.

The Commercial and Financial Chronicle

%

.

(1735)

In

Outlook for Banking and Credit
In the Second Half of 1959
By S. CLARK BEISE*

.

•

^

!

tially

for

sources > of

the principal components of demand for bank

v

during the second half of 1959, Mr. Beise expects:
(1) moderately restrictive Federal Reserve policy will lessen
—but not stop—availability of credit; (2) a modest increase
in interest rates; (3) major pressure on credit to come from

;

A

A Moreover, the banker suspects there will be

a

*'

is

■"'A", <

moderate rise in

the

this

upon

1959.

(

As

point

continue
flow

supply

mands for- credit

:'

gresses.-.'?

The'1 upturn'

It

-''in the nation's

i;1e

.

o

m

continued

»at

the

of* business
as * the

also

year

and

a

continued and
sustained .rise
in

ac-/,

tivity

in
for

prospect

S.

C.

Reserve

ai-' bp\vever, a number
t pi<'question marks which must be
cTesolved#efore we can expect the
economy to .attam the- high level

-./

,ymich -^t;-is capable. A-t,

the

must

A vr

the

At

to

see

it

that

without

/.

Effects

ury

the

time,

same

Federal

the

Alin employed

:
pool

"

of

na.n?

unemploy-

the

.eries in

«

the postwar

recov-

of

:

recovery

its

exceed

or

and does

til

production
earlier peak.
-

However

of
thit;

the

regain
level un-

"ne»ea1ivrp"

farter

nnnpar«

As

IdCl0IS»
ireasury aeoi manage
ment operations will put consid-

i P

ward pressures arising from

th^ econ°mj •
It

••

1

is

el%aS 0r
bapresure
raKUKn

both

characteristic

of

the

re-

meir

credit

#

demand

ventory

lor

their

borrows

to

The

for

con-

in¬

consumer

small improvement

a

services;

m consumer

liquidity in recent months, should
further

enhance

consumer's

abil¬

rise

standing

than

year

and

local

income.

progresses.

eral

a large part of
local government

sum

credit

ence

the

and

level

result

in

very

additional

credit

the pace of the
recovery, the Fed¬
eral Reserve is likely to
pursue

moderately restrictive monetary
policy during the last half of 1959.

a

This

does

Housing
V

There

and

remains

eration

the

of

most

the

for

credit

ing

and

sumer

5the
The

related

.

in

on

expansion of business
activity may have to be financed

internally, and by a
sive use of existing
As

ances.

both

the

the

credit

tors continue to
in

increase

nnfion

Hnrim?

of this

money

rise,

some

the

to
of

upturn.

the

for

lost

represents

in-

characteristic.

net

a

spending

and

tionary
cerns

It

addition

recovery-induced

also

.

this

rise

the

certain

sion
in

months

that

will

the

carry

to come, I am
banking profes¬
out its functions

Credit

ever,

Picture

not

are

much of

credit

needs

of

likely to experi¬

an

increase due

continued * lag

in

plant

to

and

responsible manner. How¬
I feel that we in banking—■
a

a

still

—the

^roader responsibility

responsibility

promote

our

monetary

integrity.

wd

do

must

to

Nation's
more

ventory

seasonal pick-up in
buying.,

in¬

the

stand

and

Consumer demand for credit to

finance

1955-56 boom.

So far in

the

was

'

purchase of durables

the

*

monetary
our

for

such

rent recovery, expenditures of this
type have been at a more modest

-

environment

„

.

.

this

rise, while

activity

a

continuing high

residential

of

will

be

construction

accompanied

by

I

confident

meet this

that

challenge.

Complete Trading Facilities

Public Utility Securities

BONDS

as

housing.

Usually they also

duce their rate of
•

on

accumulated

re-

One

savings

so

as

to

Gov- *
to be

highways and schools—in addition
;to heavier defense and administrative outlays.
It is this general situation which

—

•An

by

Mr

Beise

before

393rd

the

reason

STOCKS

COMMON

Blyth 8. Co.. Inc.

for this is the gen-

lower level of plant and
equipment outlays. These outlays
may rise very moderately during
the

remainder of the year — but
should be adequately covered by

rising profits and depreciation allowances.
Another

,

reason

capital needs

that

that

business

short-term

debt

is
as

much
year

not

funding
it did during

meeting of the National Industrial
Conference
Board, Los Angeles, Calif.,

^ ^ easy-money period Of early

April 2, 1959.

1958,

" *




.

Boston

,

•

»

•

San Francisco

Philadelphia

•

•

long-term

not rise

may

»

New York

Detroit

during the remainder of the
is

..

address

•

erally

pressed into deficit-financed capital expenditures
programs — for

,

STOCKS

evident."

saying or draw

increase .their consumption.
ernment at all levels tends

•!'

PREFERRED

To turn to the private business
divergent demands for credit

are

rr Consumers, encouraged by the v On the one hand, the long-term
prospect of rising income, increase credit needs of business are likely
their
borrowing* to finance acqui- to remain below the record-high
sition of durable goods as well .levels of the last two years.

•

•

Pasadena

Minneapolis
•

San

as

understanding.
am

con-

.

„

•

prosperity.

area,

'level.

.

.

.

fiscal

economy's growth

the

Divergent Private Business
Credit Needs

a

must seek every opportu¬
nity— and we should make our
opportunities — to promote

erate

durables

need

the Federal authorities.

,v.

cur-

discuss

own

"level

con¬

the

private
the inflaso

this,

We

should experience at least a mod¬

mortgage
is

and

are

J

Large scale plant expansion
% principal characteristic of

and

do

than

in

and adds to
potential which

actively

fiscal

To

now

to

modest

expected.

However,

Federal

of

sec¬

interest rates may be

essential to

-3,

of

with

the

bal¬

demands

Primary Markets

yea" °

inten¬

more

public and private

inforced,

two

parts

area

expenditures

continued

,

consid¬

our

outlook

other

the

Consequently, part ,"of the

pace.

likely to increase
substantially with a recovery-re¬

.the private economy. One is hous¬
market.

Up

credit needs

Market

important

that

mean

equipment spending—reflecting a .this subject
^mong ourselves, val.fairly high degree of idle capacity. : uable as that may be.
likely
The public, also, must under¬
A In contrast, business short-term
demand

accommodation.

Mortgage

not

supply and availability of
credit will not grow, but that
they
will probably do so at a reduced
money

local

;

•

*

a

have

budgetary

bank

demand

follows:

as

long-term

business

the

will

expected strong
during the last

.the

up,

appear

Sums

/

pro¬

and the continuance of

for

for

during the last half of 1959

would

the market
securities—•

state

realized

A

have

vided

an

upturn

prices

Government.

As

In

To

This

'

banks

given

be

to

recovery

stable

hall'.

The

for

should

seasonal

spending,
commit¬
expenditures continue

faster

in instalment credit out¬

the year,

regard to state
and

rise

of
at

guard against inflationary
AW pressures which might arise from

W "

demand

path

growth

"

will

improved
over; last year. A. strong rise in
personal incomes, together with

government

re-

spending
was compensatory or "stabilizing" during the recession has

products,

finance

accumulation
and
borrows
to
finance
plant
equipment expansion;

-

th

)f

the credit

on

demands, which

•They do this to extend their operations in anticipation of a ris■'•Business

outcome

the

has been particularly complicated
by problems of financing the Fed¬

in

however, to

the final
'v--

during the
This is a

of the monetary au¬
guiding the economy

in

The Federal sector is one 0£ the
critical
areas
providing an im-

phase of the cycle that -pet us
expanding sectors of the economy much

j£lcrease

'

sm]rrp

2?S montffs

covery

-

along

com¬

earned

task

consequence of ail of these
Treasurv
debt
m'anaee-

a

factor-

tn

the6 S6 ""d PUWiC SeCt°rS °f

'

The

Treasury normally runs a deficit
during, the latter half of the year
due to the seasonal . nature of

its

past

standpoint
accounting,

income

4

-

■

and

local

being

year.

t3X6S

from

national

not

previous
is well

magnitude of the task

during of more than $30 billion in
debt between now and year end
—apart from regular roll-overs
°f; Treasury bills. In addition, the

suggests

era

that; employment ordinarily re•"sponds slowly in the earlj- stage
.

areas—-

more

this

of

very

mortgage

stalment credit is much

problems at

ated from the fact that the TreasUl'.y will he faced with the ma-

business

and

consumer

"buying, the record of past

:

half

important factor in the total
picture.

attractive¬

of

permit

yields

what

lion

A Commercial

;.

which lies ahead can be appreci-

.merit currently is ^acting'as a drag

,-on

the

the credit structure

renewed

would

be.

suggests the probability of some
additional debt extensions as the

-

and

manpower

••^equipment
v

types

government guaranteed programs.
is still too early,

government

accommodated. A

are

With

to

debt manaSers and money managers this
year already has been formidable

of

this

competitive

other

also are likely to con¬
rise—and, indeed, will
major source of pressure

to

thorities

tell

Demand

'

ments

AxeSnf'alm,denting eSlct is'Tr!?SU7Deb'
>the remaining large reservoir
The task of both-the
While

the
of

It

will,,rise

/

•

government

allowing
develop,

to

excesses

f

;

^serve musl see to it that the
huge requirements of the Treas-

.

■A

be

last

petitive

mo¬

(State and Local Bank Credit

difficulty during
' '

recovery,

speculative

.

,

and

the. year.

be

private sector of the economy has
sufficient
liquidity to complete

Positive and Negative Economic"
'

this

to

''A The problem is two-fold/
A: •
Acting
directly
through < the
commercial
banks, the
Federal

Beis*

V of the year.

^f

with

continue

the remainder of the year.

the remainder

.

will

Reserve

faced

economic

is

sector

financing.
'
Congress currently is consider¬
ing changes in the housing law

progresses—

nondurables

state

tinue

magnitude

eral

11

over-a

and

as

lic

.

.

*'

;

"non-cyclical"

.suraer;

well

should

on

ness

half

last

restocking gathers

—and,A

•''• A'

••

budgetary problems
virtually all levels of govern¬
ment, the credit needs of the pub¬

adequate
housing
time, gov¬

same

lower

a

Reflecting

the

sectors— 'ity to incur additional debt. ' In
—
of the current expenditures.'• These'
two- addition, a high rate of new home
which Vhas •. generated .which ;• together represent
'(spine fear of inflation and which thirds of the national product—, construction will have a favorable
has posed a very difficult prob¬ .exhibited,
a
steady
rise
even
impact-upon instalment debt ex¬
lem for the monetary authorities. .during the sharpest postwar re¬ tensions for furniture
and appli¬
cession, and a continued rise is ances.'.
Two-Fold Monetary Problem '
'
expected during the remainder of :I' On balance, about a $2.5-$3 bil¬
:
The prospect is that the Fed¬

aVr-goo d

pace,

;•

structure—as

•

the

by

personal saving.

at

an

into

recovery

-

{/• summer

has

;

-the

y'

began

last

t

*

n

o

c

which

r

AA

-v.

this

is

At

accompanied

of

which

during

mands

the

rate

satisfac¬

mavket

provide

credit

be

to

prospect.

a

same time, this demand
housing and durables is likely

for

as

and

mentum, the short-term credit de¬

the year, pro¬

as

At the

—

housing programs
.pegged financing may suffer

from

.

A 'for banking.

year

ernment-backed

ffactors -'influeiicing^ characterizes?^our economy, at the .business firms are likely to turn
of and demand forv present time — rising ^levels of increasingly and directly to banks.
Impetus to the recovery is also
provided by the sustained rise in
spending in what we might call

Thie :; basic

the

current

capital
to

of

market.

;■

the

credit.

tory balance between overall sup¬
ply and
demand
forces
in
the

re-

long-term

touch

activity

billion for

whole—is the

Generally speaking,

v

expected

of

goods credit and a vigorous demand for mort-V
fv-Pgage credit^ and that this will be accompanied by lower rate'of
A'J"'.
ir:!l ^>}f';^;x«-'^'personal 'saving.:
A-:"' A\
aav.-^v
V'the

inventory
principal

in

construction

about $19
a

vigorous demand for mortgage

a

continuing high level of resi¬

dential

the

to

Inventory - sales
ratios
haveu improved
considerably as
the result of a
sharp reduction in
stocks during 1958, which was fol¬
lowed by a more recent
healthy
increase in sales.
Consequently,
substantial
inventory rebuilding
Arrei.nforced by. seasonal factors—

durable

consumer

related

instalment credit.

consumer

A

briefly:

v

rising public sectors credit needs; and (4) substantial pick
up in short—but not long—term credit needs of business.'

is

strength

•I'";

covery.

'

credit

>

this

sharp turn-around in
policy —- one
of
the

To'

In examining

and

business

very substan¬
the year progresses.1 The

as

reason

-

Association, San Francisco, Calif.

'

^

short-term
of

(are likely to rise

TresideiMt, Bank of America, National Trust and Savings

v

contrast,
the
requirements

credit

11

•

Chicago

Pittsburgh

•
*

Diego

Spokane
•

•

Los Angeles

Cleveland

•
•

San Jose

Oakland
•

Fresno

•

Seattle

Louisville

•

Eureka

•
•

•

Portland

•

Indianapolis

•

Sacramento

Palo Alto

•

Oxnard

we

will

12

does

is

An

The Retail Trade Field

'This is
in

Vice-President, Investment Research

United

the

have

Becker & Co., New York City

the

(if that is

de¬

longer

no

a

dirty word) have been character¬
ized

by

outstanding

one

factor.

This factor

has

largely

helped

to

temper the

of the

degree

decline

and

without

has

age

of

whole,

on

up

less reliable and dominant than in
the

past, when the consumers'
spending was entirely measured
by the amount of money he had in
his pocket.

ing since the early

We consequently come to the
second, and far more intangible
factor.
Namely, consumer con¬
fidence. In other words, not only

tremendous

is

of retail trade.
or

Canada

the

of

has been in since he
his hind feet) this
condition has proven to be a bit

of divisions in the retail field. Mr. Kahn favors
investments in better department stores, mail order firms, hard¬
line chains and grocery chains. The writer makes clear the dis¬
criminatory appraisal required; compares encouraging per¬
formance of consumer purchasing to behavior of industrial
production; and explains obvious factors determining the level

recessions,

we

and

States

out

come

reared

for majority

Our past few

Since

scarcity (a condition mankind, on

analyst holds 1959 looks quite favorable

Wall Street research

fairly easily measur¬

a

1940s and of
importance to retail

While this enhances certain

trade.

retail

retail

trade

measured

now

question

of

doubt

a

been

in

by

purchasing power, but it is deter¬
mined
by the much-more-diffi-

trade securities, it is only
longer term nature to us here, cult-to-measure stimulus of con¬
and I will attempt to deal more fidence and thereby willingness to
specifically
with
the
different utilize the purchasing power at
parts of the retail trade field. Let his command. At this point let me
us first see what has happened in
say categorically that one thing we
the retail picture over the past have learned during the past few
decade.
decades, and that is that the con¬
sumer, as a whole, does not vio¬
In 1954 when industrial produc¬
late his savings to buy goods and
tion dipped 10% from its 1953 services, except in
desperation, or
of

peak-to its 1954 low, retail trade

bringing
of

speed

actually

the

about

recovery.

In

annual

its

to

stock¬

Southern

New

report;

holders

The

England

Telephone Company

Company

Lawrence

notwithstanding

tne

shifts in the business picture. Part
of this

tain

in

changes

our

More

Affluent

"The

book

important, from

view is the fact that

Society."

our

we

point of

have had

shift

in

economic

broadening

which

influence

of

patterns to

middle

the

a

in

high

brackets.

The
a

tremendous widening of the num¬

people who

able to

are

pur¬

in¬

dicated that it will raise additional

This

has

been

to

varied

are

consume

available,

more

in

this

certain of the

upon

bbvious factors which deter¬

the

sale

of

"The proportion of debt in
capital structure is now above

part,
our

the one-third ratio which
sider

prudent, and

we con¬

on

can

of the

one

of

our

come,

we,

for

necessary
make and test the

small

recently announced
$4 million contract

Army

automatic

rifles

of

aye

of

on

annual

an

in¬

basis,

are

monthly, and disposable

will

vestors

can

follow

In essences

there

on

their

are

own.

the

factors

two funda¬

consumer

which

in his

influence

spending. The

purchasing

it for cost of

dollar

can

see

in contrast

power

purchasing
look

we

unit

a

I adjust

living, thus deriving

purchasing

When

on

basis.

power

at

power.

these figures

why retail trade

well maintained

it

as

was

dur¬

was

ing the past few business declines.
In

1953-^4 decline,

the

dipped only

come

years,

AS

I

so

in order to get it

ever,

The State of New York

twenty-one

quarterly,

personal income figure, how¬

my

buy what he wants? In other

peak, on

A Sl'EClJLATIOM

real

then
In

an annual

recent

real

its

basis, in May,

COMMON STOCK

in

only

was incorporated under the laws of the
York for
the purpose
of manufacturing and marketing
packaged goods. The first product of the company is an in¬
dividually foil-wrapped pure chocolate vitamin cube that will be sold to
a
mass
market, basically through super markets, chain drug stores,
large department stores, etc.

New

^

Offering]Price $2.50

per

of

Share

cost

or

obligation.

out

that

160

Broadway

NAME

i

I

* '

Co.,

BEekman 3-7650

low

March, real income
billion

higher

was

also

than

which

last

still $23.6

was

the

at

1953, which

from

point

the high

was

the

peak

last

slide

started.
If

the

chasing

basis

tangible factors of
power

can

even

be

to

inc.

well followed.

'(

little

ously

has been
a

facility
established, representing

substantial

capital investment in
it will take about one year
new
highly Specialized machines
tool-up for the manufacture of
and equipment.
The new equip¬
the new gun, which will eventu¬

to

ment

ally be standard equipment for all
U.
S.
Infantry troops and will

sub-machine

calibre

.45

Electroforce,
Fairfield

has

gun.

Incorporated

tanks.'

of

the

1

de¬

announced

velopment
of
a
self-contained
high-efficiency
filtration
and
pump unit. Designed to meet the
need for maintaining cleanliness

:

.

'

Wm. Grigsby to Study

(

For

Ministry

of the dielectric coolant for Elec¬

CHICAGO, 111.—William A.
Grigsby, a veteran trader and
units
are
proving
dealers' service representative of
many metal working fields where John Nuveen & Co., 135 South La
a
practical, low-cost means of
Salle St., "has
separating solids from liquids is
been accepted
required. The Electroforce electro¬
by Bishop
static
chucking .system
is
de¬
Gerald. Fran¬
scribed by the company as the
cis
Burrill of
first and only electric chuck for
the Episcopal
troforce Electrostatic

stainless

aluminum

steel,

and

First

❖

-l *.

■'

National

Diocese, of

1

^ y"
*

The

Chucks, the
valuable
in

Chicago

.;

'.7/.
of

t h

Manchester and Hartford National
Bank

and

Trust

announced

plans

two

banks.

Company
the

terms

proposal,

Hartford

to $46 a share for

a

Priest-

e

tendered

item

effective

next

National

August,

ac¬

cording

price equal

the 20,000 out¬

dent.

to

Chester
Grigsby

Wm. A.

W.

Laing,

Presi¬

In September, Mr. Grigsby

shares. The agreement
begin the regular three-year
approved by the directors course of study at Seabury-West¬
banks
subject to final ern
Theological Seminary
in
approval by First National stock Evanston, 111.
holders and the
He is widely known to Midwest¬
Comptroller of
Currency. On the basis of pub¬ ern and Southern brokers, dealers
lished figures as of Dec. 31, 1958, and institutional investors in tax-

standing

will

has been
of

both

combined assets

of the two

banks

free

public bonds
(municipal
bonds) through an active 25-year

will be $469,865,000.

Sprayed
Inc.

is

a

Reinforced

investment banking career which
began at Nuveen's trading desk in

new

Plastics,

Cheshire firm

strength

of

tanks,

vessels
and
other industrial equipment, sub¬
ject to corrosion rot, and rust. The
coatings, which are sprayed on
with
specially
designed
equip¬
ment, can be applied over metal,
wood, concrete or* other materials.
«

Research

£

$

solid

fuels, propellants for limited-range military
rockets and missiles, will be con¬
ducted by United States Rubber
on

Chicago in 1934.

spe¬

cializing' in the
application
of
SERPI fiberglass coatings for in¬
dustrial equipment. SERPI coat¬
ings, it is reported, are used to
protect and restore the structural

Two With Dean Witter
(Special to The Financial Chronicle)

LOS
-

beth

ANGELES,
J.

nected
632

Calif.—Eliza-

Niemackl

Schuhmacher
with

South

and

have
Dean

Don

become

Witter

I

April 8, 1959




R.

con¬

&

Co.,

Spring Street.

Irving Lundborg Adds
(Special to The Financial Chronicle)

SAN

FRANCISCO,

Andrew

J.

Swedlund

added to the staff of

borg &

Co., 310

members

Pacific

of

Coast

the

Calif.—

has

been

Irving Lund¬

Sansome Street,
New

Stock

York

and

Exchanges.

pur¬

watched,

relatively well

Here

we

con¬

have the

of confidence

mentioned.

fluctuated

^
STATE

his

resignation,

of

agreed to purchase all assets
and assume all liabilities of the
Manchester bank at

a

for

.hood, and has

have

combine the

to

Under

as

candidate

Bank

CHAS. W. SCRANTONA CO.

I

Members New York Stock

Exchange

previ¬

Personal

con¬

New Haven

j

far

more-

widely.

New York—REctor

2-9377

Hartford—JAekeon

7-2sS9

.

ZONE

in¬

horsepower mill¬
ing machines; punch presses; a
rolling mill for rolling - special
metals such as tinamel,. zirconium,
beryllium and stainless steels; roll
leveler; shear and special cleaning

replace the Ml, the M2 carbine,
the Browning Automatic Rifle and
the

that Fenn has installed

cludes large 30

sumption expenditures have

ADDRESS
CITY

on

existing

sumption expenditures be equally

New York, N. Y.

,

TELEPHONE

was

previous

It may

predicted, why can't personal

&

low

power

the

1957.

the

at

followed, and

R. G. Worth

the

be interesting in passing to point

point

obtained from the
underwriter, without

below

June,

in May,

Copies of the Offering Circular, along with samples of the com¬
pany's individually foil-wrapped pure chocolate vitamin cube may

recession,

trend.

March, 1958, and

4.8%

peak

consumer

upward

purchasing

reached

Popular Scientific Products Corp.

its

resumed

the

in

Popular Scientific Products Corp.

be

sub-contract

new

in¬

from

1.5%

1953, to its low in May, 1954 and

95,000 Shares

of

Manufacturing: Com¬

has

I

Furthermore,:

these

have tended to

move

ratio

to

personal

fluctuations
in

an

savings

Continued

on

inverse

which

page

46

a

,

ical and surface treatment

result in the hire of
employees. How¬

300

to

Fenn

V

:/.

-

X

ever,

the

TIIESK SECURITIES ARE OFFERED

State

\

primary reactor builders. A sepa¬
rate machining, fabricating, chem¬

said

award

contract

the

eventually
200

Division

Winchester

the

that

my

personal

on

:v77,;

of nuclear reactor components
a *

magnesium.

as

■

to

on

ucts Division for the manufacture

Mathieson Chemical

Corporation, New Ilaven. Officials

use

offered only to bonafidr. residents of The State of
arte of twenty-one years
and are not to be
void, under any circumstances, to persons
the

of

and

7..

;

fuels

of Newington has announced
the formation of a Nuclear Prod¬

Divi¬

M14

of Olin

sion

do make a refinement in

the

residents of

20%

product

scale.

equipment
new

pany

a

Winchester-Western

35,000
the

to

only

in¬

we

over

impact of

some

national

the

basis, it does

solid fuel components and will

The

The

the award of

income

potential

or

as

other than

absorb

Figures

available

with

or

mass

I, therefore, prefer to use

power.

to

offered

a

rep¬

of

•

'itc-j

completion at the
of
its
Naugatuck

,

yardstick of potential purchasing

is: Does he have the wherewithal

over

on

income

disposable personal income

York City, March 31, 1959.

York

gauges

personal

directly reduces purchasing

power.

*An address by Mr. Kahn as part of
the Helen Slade Memorial Lectures at the
New School
for
Social
Research, New

New

overall

which

hence

basic

Actually, while this
the

gross

real

arc

is

power

not take into effect the
taxes

;

see

follow
best, if broadest

purchasing

first, but not necessarily foremost,

securities

these

how we, or
them.
Possibly

us

'

laboratory

hew

a

contain

therefore,
plan some form of equity financ¬
ing later in 1959."

both.

investors

mental

Thr.se

forth

set

'

.v.

division at Naugatuck.
laboratory will have approxi¬
mately 1,000 square feet of floor
space. It will be used primarily
for
company-sponsored research

stock

sus¬

bunk!

v.

The

through

later this year. The report said in

which

a

major sociological shift develop-

you,

much

so

•

Chemical

funds

mine the level of retail trade, and

chase all different types of goods

services.

consumer

1 would, however, like to

paper.

more

ber of

is

briefly dwell

income

major elfect of this is naturally

and

than

factors

Toexamine; them

detail' would

narrowing of the number

a

the

the

these

' complex;;

class

of families in both the low income
>and

Actually,

buy.

space

with

Having

conditions, let

individual

considers

one

confidence is

and

resents

this at all unreasonable

is

Nor
when

words, the

that savings would

income.

Important Influencing
Factors

and
•a

decline in

25%

a

tqmobile sales.
Two

been

aptly set forth by Dr. Galbraith in
his

au

despite

econ¬

of these have

Some

omy.

1958

be attributed to cer¬

may

basic

in

in 1957 and fractionally

6%

rose

at

levels

a

retail trade

peak to valley, total

R. Kahn

idea

In other

in

nearing
main
plant

now

tain retail business

drop of 14% was registered from

the

purchasing

old

Thursday, April 16, 1959

.

r:

during declin¬
ing periods of purchasing power

when

decline

1957-1958

In

continued
retail

higher

than in the preceding year.

the
In

this

essence,
has been

fractionally

ran

la»t resort.

a

.

*•

■

basic

.

wherewithal

the

able and followed item.

By LAWRENCE R. KAIINk

A. G,

have

he

words, does he have the money to
buy things he desires or needs
and, to me, these, are relatively
interchangeable.'

Analytical Review of

pressions

Financial Chronicle

The Commercial and

(1736)

Teletype NH 194

Volume

189

Number 5838

.,

(1737)

The Commercial and Financial Chronicle

.

ties,

excluding

Total

service

the

city; proper.

is

area

larger than

the entire state of
'

*

By

DR.

COBLEIGII

U.

IRA

-

-

Enterprise Economist and Author of "How to Get Rich Buying Stocks."
*

Transmission onto

paper
some

specific ideas about two quite different

,

♦

i

.

,1

r

that

bad

too

,

Insull

and

Hopson muddied the utility waters
investors

for

their

i d

years

pyra-

s

and
issues
out
in
,

equity
""

operating
i

p-

j

sumption

definitely

is

on

the

.

in-

10

lion

in

1948

t0

a

lighting
ceihngs and walls, electronic

but

8%

in the

ovens, combination TV, Hi-Fi and
stereo sets
all these aie pushing

For,
20s, the

30s, or in fact

decade in

rent.

1939, for example, used 900 kwh
a
year; for 1958 the figure was
about 3,600 kwh;
and 20 years
hence it should exceed 10,000 kwh.

stock

hold ings

in

operating elec¬

;

tric
h

utilities

_T

been

a v e:

1,s.

i n v estments,
respl endent

Ira

U.

i

virtual-

a

n(^v au". c ?
1 A10 ^
activated), there's

esurgence. in

bile

24.6%

weahh Edison in

for

gain of
in

New

Power

about

Ltd.

$4.65

each

on

was

business

which

of

in

earned

from

The dividend is

$2 per share. De¬
preciation and retained earnings
are
expected to provide 65% of

are

Co.,

York City. Officers
President;

Street, New

1958.

&

Sloss

in a securities
offices at 63 Wall

Donald B. Marron,
B.

Robert

Vice-President;

Edens,

William

and

Secretary

Sloss,

J.

a

growth
•

utilitiesT in

V~ f

^

indicated div-

a

Mr. Sloss was

also connected.

was

with

Van Alstyne,

Noel & Co.

A Fiscal Re"Now,

we

have

these heavier

who are

expenditures, saying that
on

the part of the Fed¬

mean

and, in effect would

expenditures

eral Government would

ment was made recently of plans
new,

many among us

for heavier and heavier

expansion.
doctrine

economic

cause,

to give shareholders rights to subone

North

v

Common-

me

There are 12,806,125 common
shares °f Jph?P ?T Electric
if
on
New York
^ilangco
^

the electric, automo- scrj^e; to

(with its battery current re-

esting

America.

Chicago),

moon

...

.

(electrically

Cobleiffb

York- and

a

Edison

idend. This provides a current
build- yiejd 0f about 4.15%. Announce-

'

.

Nearly eveiy new

magni ficent

with

household curThe average household in

(against

Covn

for

for

demands

up

century,

,

Opening in N. Y. C.

30.6% increase in elec-

customers

common

in

territory served and (4)
earnings on plant investment of
about 7%; (5) unusually high re¬
tention and plowback of net earn¬
Marron,
Edens,
ings, for a utility. < There are l,-> Inc., is engaging
050,000 common shares of Calgary

newer

(rjc

this

Jillion

$236

Marron, Edens, Sloss

the

crease.

left field.

*

com-

Gross rose from $130 mil-

pany.

from

any

added

the

of

revenues

garage doors, luminescent

way

have

years

in

the $35 million plant expansion
A high percentage of our jg57
Common
dividends
per
and Treasurer.
homes, especially the cost- shara
rose
in
almost
parallel program planned during the next
com- lier ones, have complete air con- fashion lrom
Mr. Marron was Secretary and
$1 20 to $2.00 in the four years.
At 99 Calgary Power
ditioning.
Electric heat pumps, same period.
Also,
during the common sells about 21 times earn¬ Treasurer of George, O'Neill &
push button operated windows same time interval> Philadelphia
ings. It is one of the most inter¬ Co., Inc., with which Mr. Edens
and doors, electiic-eye activated
achieved

with

ago,

holding

labyrinthine

pany
m

30

past

than $100 million to annual

more

Power Limited.
T+>

This territory

has perhaps a broader diversity of

The

operating companies, Philadelphia Electric Co. and Calgary

Its

- a

than 3^2 millions.

industrial activity than any other
section of the U. S.

of topical comment about electric util¬

ities, together with

V

embraces

Delaware, and
population: of more

stock; (3) rapid expansion of pop¬
ulation
and
industrial
activity

13

cannot think of any

share for each

I
or

held

now

^Thik nrivile^will
This privilege will

any

statement that is so false as

giving

>20

this

one.

L

1

\

second

the'operating companies, that gave
-utilities?: in the dismal 30s a bad

handlini' equipment-is

0"

becoming
performed; increasingly 'by
name:; (.Insull utility Investments trohic systems. So. far as the eye
common sold at 160
in October,- can see,;the future, upcurve in deaq%

1932'rfta at one-eighth in:June;.
;•

'

elec*^low

common

are?'acclaimed

stocks today.

never

as

before. As

group they enjoyed, last year,
their best market performance in
15 years, rising during 1958 about

.'To

keep

the entire economic
,"

,,

t

>a

up

v

with this dynamic

dynamo
demand
the
investorowned electric utility industry has
a

huge annual outlay for expan-

sion.

1958

For

construction

ex-

penditures were around $3.8 bilof improved per share nets, but lion.
They will be close to that
more
particularly because of a this, year—possibly $150 million
lugher price earnings ratio ap- less—and will make necessary the
praisal in the market. The repre- sale of over $2 billion in new se-

years,

cient

times

15

year

lems

rv

can't

a

of

utilities.

They simply
enough of net earn-

and the modernized effiplant (more than 60% of

capacity built since World
War
II)
all these
things give
stockholders a long term serenity

power

in

attainable

not

more

volatile

equities.

Our second kcandidate thp fastfor distnH-w
nrnhahlv

•

around

e^ growinrmaior efectrie

utility
jn Canada* Calgary
Power, Ltd.
Obviously growth in utilities is mgs to finance expansion; and
distinguished enterprise is
far from uniform.
Areas in New they must regularly enter the se- the major generator and distribuEngland, the Dakotas and certain curities markets for new funds. ^Qr of electricity in the Province
sections of the middle west have And this year they'll be financing of Alberta
supplying about 65%
proved less' dynamic for utility with the price of money—the inf
electric reauirements
It

:

ago.

retain

-

expansion than the southeast, the terest rate-at its highest level in
gulf south and the southwest.
In the past 25 years. In view of this,
growth rate in recent years, we many companies
are preferring
should accord top national honors equity financing, taking advantto Florida Power and Light,
(it age of current high (historically)
increased its earnings 94% in the prices
of electric commons.

*
'

four

Twenty-six ma.ior utilities will
benefit from rate increases in
Co., 1959.

period ended Dec. 31,
followed
by Tucson Gas,

year

'

1957)

Electric,
Florida

Light

and Power
Corporation

Power

the

of

We couldn't begin to cover the

and

probably Texas Utilities Corp. Impellecl by their growth rates stocks
companies just mentioned

list

of interesting

utility equities

competing for investor preference
in today's market, so we decided

sell
at
among
the
highest to pick out two issues of obvious
price/earnings ratios in the indus- merit for swift review.
The first
try—all above 25 times.
Their is
Philadelphia
Electric -Co., a
unusual growth rates are expected
company
which has paid divito continue, aided and abetted by dends on its common without inrapid rises in area population, and terruption
since
1902; and in.

industrial
-

latory

activity,

nancial

needs

urgent

and

for

of

by regu-

and

sensitive

bodies

to

the

fi-

companies with

expensive

expansion

demands
generating and

of

transmisssion facilities.But

tions

even

of

in less

our

creased

sec-

country, power con-

spending of such money than ,?
the; FMeral^ Government.
;

then I for

Eisenhower

Pres.

one

submit

we are

get¬

ting in an awful fix. This is exactly what we do nqt want to
do: appear under some kind of
doctrine, making decisions of
what the populace of our coun¬

desire and
These decisions to the ma¬
jor extent, to the most major extent you can possi¬
bly conceive of, should be in the hands of the
people and in the localities where they live."—
President Dwight D. Eisenhower. ■„
4
try want, what they

what

they should have.

Excellent!

let's apply this doctrine con¬

But

fiscal affairs once more.
style when the New Deal
It is time to revise them.

sistently throughout all

our

Such ideas went out of

took

over.

only serves the city of Calbut sells power at wholesale
to severai municipalities; to large

n0t

ga^y

industrial
dated
c

users

Mining,

etc

.

and

such

as

Consoli-

Canadian Cement
provides the juice

pumping requirements of sev-

f

eral thousand oil wells.

Public

generating
capacity
is
485,850 horse power of which
about 62% is hydro electric. 100,000 in additional hydro capacity
wjn
be
completed
in 1960. To
assure
a
supply of fuel Calgary
Power bought, in 1956, the AlTotal

berta

Southern

Coal

Utility Securities

Underwriter

Company,

(for
only $450,000). This
Property contains an estimated
50 million tons of coal recoverable

•

Distributor

Ltd.

Dealer

its dividend seven times by low cost strip mining.
The things that have especial-

Philadelphia Electric Co. serves
the City of Philadelphia and adjoining counties in Pennsylvania

tricity;

Maryland with elec-

and supplies

surrounding

gas

in four

Pennsylvania

coun-

ly attracted analysts to Calgary
Power are: (1) remarkable growth
rate—net earnings increased over
90% in the five year period 1954-

58;

27%

(2) low equity ratio — about
— creating leverage for the

The
PRIVATE

WIRES

FIRST BOSTON

TO

CORPORATION
Forgan & Co.
Chicago

Gfore,

15 BROAD STREET,

G.A.Saxton&Co., Inc.

Bernet
& Hickman, Inc.

Schneider,

Inc.

Philadelphia

Securities

52 Wall St., New York 5, N.
WHitehall

Louis

Weedon &
Angeles

4-4970

Cleveland

of the

United States Government and its Acencies

Bonds, Preferred and Common Stocks of

Industrial, Public Utility and Railroad Corporations
Bank Stocks

•

Casualty, Fire and Life Insurance Company

Securities

of

the

International Bank

Canadian Securities

Trading Markets in 'Public Utility, Natural Gas and Industrial Securities

^

^

Stocks

Bankers' Acceptances

Co.

Los




Chicago

San Francisco

State, Municipal, Revenue and Housing Securities

Y.

Reinholdt & Gardner

Crowed,

*'•

Teletype NY 1-1605-1606-1607

Hendricks & Eastwood,

St.

NEW YORK 5, N. Y.

Pittsburgh

Boston.
Philadelphia

Dallas

:

>

does

in the past 10 years.

and northern

burgeoning

the

total canitalfeatiori 'at the

$88 7million'in preferred;^
The 57 year dividend record of
Philadelphia 'Electric,v.the3many
dividend increases and subscription
rights
given
through the

Snta^Vecwily 19 times net, as iur'.tic's t0of the pub!ic- Fact Kis
,eoqUti&i0dn^Wi1! that's one fHlC continuing probsell
at
almost
against

rf^fcet

...

.....

30% in value, partly, on the basis

•

«ie

for, electric current is one foment) and. la: preceded by $466
of tlm.mpst..statistically predictr million in. long term'debt and

,,
-^ Bul^ jenough of this history so able trends on
costly 'to thousands of sharehold— horizon.
t V,

174,000,000 people of
America don't know more about
"If the

classifying

counting,

•

for

Reconstruction and Development

External Dollar Securities

-

14

The Commercial and Financial Chronicle

(1733)

That big problem is infla¬

future.

New Dimensions in

tion,
The

MARK

our

V.':'

^

in store for th£ entire

viding, he

warns, we

its consequences

that

' 4

■

-

«

.

.

.

are

up

in the

have

higher

continuation of
a

year

by 1970.

In

opinion,

my

have

been

never

serious—and

opportunities have

our

never

great.

so

Our greatest
in

—in

na¬

In the

>
•

There's not much,

in

of my own company,

increases has ;pieant- a
in our profit margins,
to keep the price of our

told

that, to

serve

order

is

optimistic improveemnt in
load factor, you will still
to
build
an
entirely new

in

10
it

by

You've

the

that
Mark

W.

Cresap, Jr.

all

the

facilities,

proved

and

the

projected figures

the

—

new

of

development.
that

their

own.

evidence

be true.

than

it

this

has

had

advanced

in

the

of

In

We all know what these
mean
in terms of electric

forecasters
standard

a

require at least
in

the

hour
in

tial

use

of

of

use

ati

compared

each

consumed

average of

more

3,366

The commercial
make similar
strides.
An address
27th

Annual

Electric

we

are

to

do

it

all

still

had

will

protection
we

for

rising, costs and
that

come

than tripled since 1939.

on

as

increase,

we

hold

to

a

price

the

total

our

little

have

in¬

catch

pay

we

meed.

lies

than half

;as)

through improved
expanding markets,
better management techniques
and better technology.
•

productivity,

In electrical

equipment and

have been most

we

ap¬
suc¬

in

holding the price line
products which; contain
the greatest amount of mechaniza¬
those

tion.

It becomes

ficult

technological

to

content

possible.

and

ahead,

Unfortunately, there

sideration

do

increasingly dif¬

so

the

of

policy
the

the

as

finished

labor

product

we

war.

-

we

can

wage-price

have

Is

as

a

con-

on

since*

,

prices.

*

the other hand, industry^

hold

the

line

on

and

wages

More precisely, this

of

earn

and

still

us—by producing
Which is it to be?

sues

being

are

more.

The

examined

is-

in

;

a

great national debate and will be
settled
cmi

Still

in the next-few months:

fuither

mflatioi

Convention

of

the

Edison

There

Institute, New Orleans, La. 'April

ti, 1959.

increases.

Roadblock of Inflation

is

one

could darken

big problem

the

outlook

for

•

generators,

-

v

.

.

Turbine

powe r

•

induced

transformers,

that

circuit

our

not

switchgear, power
breakers, for instance,' do

lend

themselves

to

assembly
production.
They ' require
thousands of hours of design and
production time, most of them re¬
quiring high skills. Moreover, as

line

\
*

the

Servicing

machine

becomes

more

wage

dislocation Thio ugh-;

requires
a

tool,

as

system

for

times

Since 1878

today

as

labor.

more

control

tary

many

it

The millwill be able to buy

services

fewer

armaments

lars, and

so we

with

10

of

a

ASIEL & Co.

or

12

,

Members
Members

New

-

York

American

Stock
Stock

+■

Exchange

systems.

Telephone HAnover 2-5000




New York 5, N. Y.
Teletype NY

1-1110 ft NY 1-1111

.

other

than
such

electrical

items

products
47%

in

since

more

than

price
1939
the

Agencies of the

Federal

been prone for*

several years to purchase foreign--ma(je

electrical

equipment,

in

a '

short,sighted ;• over-emphasis " ori
initial cost, at the sacrifice of the
a-

1

*

a

Continued on

A

page 44

of
is

our

current list of electric

esting for growth
write

or

call

prospects,

—

Carl M.

Loeb, Rhoades & Co,

Members'New York Stock Exchange, American Stock Exchange
and

ap¬

principal Commodity Exchanges

as

buildings,
wire, and
Handy Whitman Index shows that
increase

market.

less

land,
right-of-way,
towers,
cable.
Similarly, the

the

effect of American labor
rates completely out of line with
world rates is unfortunately being
increasingly felt in the domestic

buy

capital budget accounts show

paratus—for

dol-

■;t ■

The

Your

I that you are spending 72 cents of
each investment dollar for prod¬
ucts

20 Broad Street

considerably

I than have the other items you
in expanding your
own

Exchange

risen

con-

utility stocks considered inter¬

years

in spite of this, prices
"so-called" heavy appara¬

have

the

in

price index.
*
Labor has already priced itself
out of a large segment of the ex-ft
port market for heavy electrical
equipment.
There
is,; however,
0ne
agency
in Washington, the,
Export-Import Bank, which. hg$-i
consistently followed the- policy ,;
of making loans to foreign purVchasers for United States goods'and services. If the Export-Import;

margin

For

machine

takes

even

the

tus

rise

percentage

Electric Utilities

ago.

But

a

these

exactly

increase

of

42

Private

WALL

W

STREET

ire'System

to

'•

output per

com¬

eight,
engineering hours

took

their

will lose

'

>

To engineer

for

instance,

^lll

out the entire economy

plex, more sophisticated, it re-J
quires ever-increasing amounts of
labor
per
unit, just as today's
military
bomber
or
submarine

Brokers and Dealers

inci eases

than

gOVernment have

by unearned
serious

labor

as

both labor and the industry.

"

same

thing

would disappear, involving a con-f:
siderable loss which would affect:

more—all

earn

those

Bank activity should be discon-.-,
tinued or curtailed, a sizable per-rj
centage
of
current
exports
of*
American
generating
apparatus;

means,

limiting the trend of annual wage
increases to' the trend of productivity increases. As a people, we
can.: begin
to pay ^ourselves what
we

support

such

SUmer

recession, and then try to recover
cost by raising its prices still

Or,

no

man-hour,'
the per-*
centage rise in the hourly, com*
pensation of workers has exceeded

its

can

there

more

to

*'

to whether the econ-

as

able-; to

in each of those 10 years,

to grant unearned wage increases,
it did even throughout the 1958

■''•v;

national

demanding
and benefit

During the past 10 years hourly
compensation
of,
manufacturing
employees has risen significantly

as

higher.

are

pricing itself out of work?

continue4

can

-

raises.

spiral,.

followed

Industry

\s

omy

prepare

have

nions

u

The

course.

raises, without regard to gains in
productivity, and with no con-

(he

hand,

very

across-the-board wage

like

decision

are power-*

iul forces driving us headlong into
labor

we

important

V

■

%

v

.

Driving Forces

mean

by Mr. Cresap .before the

.

go

^jjjs

But now,

•

tax?:

the servicing cost of the
debt, up still higher will
prices, and, in the end, still

go

for the military

breath

our

what

crucially

line of prod¬

more

increase in costs. We

our

have done that

on

opment

cloud, and

to

-

will

a

1 When

higher will go unemployment.

.

us

income.

.,

fall short, as they always

public

.

over

on

direct

inflation. And up-still highe?

more

Balancing

ploy men t that hangs

wage

industry

problems

that

cessful

advance

that

with

the

able

fore.

make

labor-saving

more

highest

more

paratus,

that

under

same

ucts to

more

past

.

one

economically, more reliably, and
more automatically than ever be¬

load

as

,

when

do, the money will be;
raised by credit—that is, by still

to come almost in-

nerves,

the

creases

greater distances.; And

prepared

„

time

a

revenue

taxes

to

seem

tact through a year-long recession.
With
good
sense
and
steady

the

been

dis¬

this

year

the

Despite

Technology will not
be
our
major problem — as long as we
support the research and devel¬

per

year.

than

power over

steady

On

have

tribution apparatus, to deliver this

increase

went

charging along with rising costs.
My own company's labor costs

through

will

effort

with

prepared,

living

170%

6,850 kilowatt-hours

also

are

,

Pom v

;

tinue

much

advances in transmission and

electricity for

human

We

that

but

,

that

manufacturing. Your residen¬
customers, 10 years from now,

will

man's

revenues

make.

with

ered
quite
an
accomplishment.
Today, 500,000 kilowatts is not.

power.

examples

seen

they could not afford the

been faced

building

us

tell

of

a

figures

;

*

For the past 20 years, both of us
—utility and manufacturer—have

generating
approaching
one
million
kilowatts of capacity.
Ten years
ago, 150,000 kilowatts was consid¬

present national output.

wage

level, and so could not maintain
competitive rates in its industry.

100

demand should warrant it, we are

of

companies

match

industry,- we are pre¬
pared to do things'that were un¬
believable just 10 years ago. If the
capable

has

you

machinery,

our

units

of

capital cost of

further

approach almost $700 bil¬
lion—in terms of current
prices.
That is half again
greater than our

1969, our total
production of goods and services

When

.

at

of

heavier

are already taking about one-third of the aver-

age

have done
in keeping
prices under

Crucial

at

sources

still

everyone,

you

.

,

Poised

followed

lifted

are

because

years,.

children

should

such

new

place

and hidden taxes

among your own commer- ' nerves, we can continue our na¬
and
industrial customers — tional
growth, master the unem-

*!al

But

By

Industry

rates

are

out

and

offer

of this

won't

previous

dislocation

unemployment.

Each

In the past 20 years, our

technology

cars

who,, in
the decade ahead will be.
reaching
the age when
they form families
of

our

have

appliances, the new houses
schools, the huge increase in
number

price,

Design

1939

outstanding-, job

an

panies suffer—and so do the peo¬
ple who work for those companies.

might appear
biggest problem will be

technological
we

increased production of
and

course,

On the surface it

10 years.

next

only.

since

by the pressure
In
my
opinion, our ;economy
of national unions to what only, stands now at a
very delicately
the most efficient companies can balanced
point in
history.
We
pay, then the less efficient com¬
have managed, by good sense and

that there will be plenty of road¬
blocks along the way.

even

in

enal

of

economic

rates

that
such a blight future will not fall
into our laps.
We know that the
future has got to be earned, and

phenom-

more

seen

We

phe¬

be

can

opbrating.
all know,

now

has

past
years,
but

increase in

ing problem in the utility industry.
Nevertheless, through hard
work, good management, and imT

attractive to customers
and keep as many employees on
the job as possible.

system the size of the one you are

econ-

the

of given
paying $68

are

vast

your

That

nomenal

27%

a

—

improvements

products

of

been

You

more

serious cut

have

growth

to

you

machine

a

out

for

the electrical

as

ductivity

at

work

sumers

others in the industry,; savings of $137 for each transthe result of wage increases that, former.
have not been matched by pro¬ v Inflation has also been a
pressas

-

are

most

com¬

our

possible

But that is first cost

case

well

it

their; output from
of "; physical size.

pay
can,

Un-

seek

has, made

obtain almost twice

;

ness.

ing expansion
o m y.

their

-

growth

the

for-

machines
than

protection.

and

higher than conwilling to restore to
them
in
buying their products,
State and city governments will
be brought closer to the edge of
bankruptcy—some are very close
already — as their tax revenues
buy fewer
goods and services,
Management of the public debt
will * become
a
nightmare.
The
taxing bodies will be forced to

„

tional

efficient

more

security

—

opportunity
lies

sometimes

today's

your costs and your
this
The effects of this inflationary control.
load, the electric utility in¬
vSince the war, based on
been dustry will be required, in the spiral must be obvious to anyone our
calculations,;:productivity in
with eyes to see and a heart to the
utility industry has increased
year 1969, to generate $1.5 trillion
feel.
When
prices are pushed at a rate far greater than for the
kilowatt-hours
nearly two and
one-half times last year's produc¬ higher than consumers are will¬ private cconomy-as a whole.
ing to pay, the inevitable result
tion.: This means that, given the

We

problems

our
so

„

is

made

1939

raising
Emplojmrs

simply had
to
costs, if they

higher prices-

wage

.

it

be

must

today for a 25-kva distribution transformer than you paid in

been

else they can do in that situation
—not if they want to stay in busi¬

rise that exceeds productivity by 1%
without price increases would wipe out corporate profits
a

have

we

efficiency.

productive

sizes the importance of denying wage increases that exceed
productivity gains and calls upon the industry to accelerate pro¬

ductivity's upward trend. Mr. Cresap states our economy is
so delicately
poised that it no longer can afford to pass off
higher wages in form of higher prices. He charges that, in the
1952-57 period, the industry's margin declined about one-third
as a result of
cost-price squeeze's effect on profits and that the

point

that

—

far

are

of

Thursday, April 16, 1959

.

employment will increase, as it
always has and always will under
a market economy in which
employers are forced - to - pay for

our

than

faster

The industrialist empha¬

way.

gotten

and

distributing the prototypes of 20, 10, or even five
production faster; years ago. The technique of inner
than we have been earning them. cooling, for
example, introduced
We
have
been
raising
wages into, turbine generators in
1954,

the tremendous opportunities
electrical industry and the economy pro¬
overcome the roadblock of inflation and
sums

the

again—since

complex,

be

apparatus

-

been

of

fruits

President, Westinghousc Electric Corporation, Pittsburgh, Pa.

Electrical manufacturer

have

We

CRESAP, JR.*

W.

in

inflation

the

may

of it is quite clear.

cause

electrical

Also,

for

cure

economy

but the

heavy

equipment.

conse¬

v

quences.

The Electrical Future
By

inevitable

its

and

.

.

NEW

YORK

5,

N.

Y.

Branch Offices, Correspondents and their

connections in 100 cities throughout

the United States and Canada

§

/

Volume

Number

189

5838

.

.

.

The Commercial and Financial Chronicle

responsible

The American

Way

zens?

for public

i'VlI

will become
than hydroelectric

power

lit

j

•

ment

power was;

utility industry to free top

*

v

,

„

men so they may take an
politics; and notes electric power field offers
;
a clear-cut test as to the role of government in the economy..
and of labor*. professed desire for prirote
Sen.i ator urges the industry to be less timid m making their views
known to Congress; denies he is a labor-baiter; and comments

urges

;

_

;

i

what should be done to

on

trend toward

reverse

public power.
"
■.

*
■

•

I want to discuss what I consider
to*-be
w
oe

this
ims

nation's
nation s

funtia—

most
most

iul]oa

mental problem and to relate that
to the difficulties facing the pierto the difficulties facin

trie

industry.

History

whole

the

less

produced

than

as

right

nroRTeS

an¬

to

swer

fined

cur¬

rent

political
problems.
Just

ple
ago

of weeks
there was

the

"I

think

great democracy.

it

was

longer cared

no

Today we

fn

feel

may

constantly moving
v

...

is a

.

so

there

proves

truft

*.

complex subject

—something very difficult for the

people generally to understand,
Few recognize or regard it as a
manufactured commodity. It does

Gf

active

in

from

pOWer

Look

at

if

conventional

-

,

electrir

nlants

in

Srotprfivp6 r^on^ nf17our ^onstitli6
+w f^'
ctniv"
kJroLe ovTrLii

r,J'

.

,

one

is

it

a*®a> tout the atom

V?
1

v

S

'

,

is

''■««

"public

a

il had from the threat of govern-

power

ment encroachment. For that reason
it is even more important

.

today

Your opponents are one for all
and all for one. They are for

that

front
power

present a united
opposing government
developments.
you

in

pai.

ngnts 01

governments

by have thrown

tne

in

lnaivia-

times

gone

stronger
safeguards than ours against dic¬
tatorship, only to see the barriers
first* lowered, then destroyed as
the people permitted more and
more power to be concentrated in
a
tyrant or in an all-embracing
central government. And even we,
I fear, have forgotten the centuup

even

Pft„r

As

'

Sees, Public Atom Power
-

d/y'The^nrclXlcsso^to

be

from the total experience

of mankind is the

businessman who has spent
last six years as. a United
more

than

a

passing interest in your affairs, I

Gompeuuon
ffoat some electric bav.^, sometimes felt theie is a

iS?nrt«iPating

whole. Others have

a

f^

TT^tKi>-!al^ <?'
Government has
pothing
to^ give except that which
ithas first taken away.
;

'America's

way

in

tomorrow's

WOrid will depend greatly on the
outcome

of

the

contest

currently
waging between those who believe
lit "belly polities'' — the materiausts—and those who beheve that
needs

man s

go

deeper than

t^rial things alone.
ponds

the

on

belief- in

ma-

So much de-

strength

principle and

of

our

willingness to fight for the things we
bfclieVe in. I personally have great
our

even

as

government itself

gpDws and expands to cope with
p^oblems properly in its domain,

tant

clue

to

our

an

future

impor¬

.

.

bUying electricity than they do in
buying say, a pair of shoes, or

an'

au^mobile.

encroachment^
.

^8

the American consumer
with excellent low cost service.

.

super-highway

Mi

approach to
sound investments
M

n&

need

history

for

me

of Federal

to

review

the

encroachment

?An address by Sen. Goldwater before
son

Electric

Institute, New Orleans,

April 7, 1959.




La.,

RicoXvill

every, square

This is one of America's truly'
great industries. I have had the!
pieasure 0f knowing some of the'
feaders and i have, found them to'
be.;

I

have.

From my observations, electric;
utility companies usually take the
lead in community development,
y0Ur officials are either heading,
up or assisting in drives for local"
charities and community v betterment. I know of your efforts to
create new industry.
You have

There

,

our future

future

m

M

'

,

at

times

would

area.

These highways

are

already

Atlantic to the Caribbean.

more

than 2880 miles of all-

'

'

make

.1.

when

and

an

access

swift and

easy

from the seaports

and air terminals of Puerto Rico to towns
.

..

-

and industrial sites in the interior.

highway system is one
progressive features that invite
thfrsound investment opportunities

'This well-planned
<

V.Vi

of many

attention to

in Puerto Rico. They

include the tax-exempt

general, obligations of the Commonwealth and
its municipalities, arid the tax-free revenue

electric re-

have

fiscal year, 99 more in 1959-60,

additional 300 in 1960-63. These highways

m.

for years ahead and

souls

linear

weather paved roads in Puerto Rico. A total
of 86 miles of new highways is being added this

ready to provide it.

timid

mile of its

and from the

.

You have
provided us with adequate capacity during every national emer-

the

a

..

should

found
the
industry to -' have a '
standard of ethics unexcelled by;
any other and equalled by few.
■-

are

have nearly

lace the entire Commonwealth from east to west

outstanding examples of what-

businessmen

soon

mile of modern, hard-surface road for

bonds of its Authorities. Your bank or

security dealer can give you full

GOVERNMENT

information.

DEVELOPMENT
RICO

BANK

FOR PUERTO

Fiscal Agent

more

for the Commonwealth of Puerto Rico*

"

pulled

back.
P. 0. Box
But

how

much

credit

does

,

the

American

t"? 27th Annual Convention of the Edi¬

Puerto

„

Praises the Industry •

be

job—your responsibility—and you
need never hold back or apologize

if it is 3,000
are going to be

even

miles away, you

,

These
characteristics, unfortu¬
nately, make the function of sup¬
plying electricity- easy prey for
those
who
believe
government v
should do more things for people.
They argue that ^electric service
can
be provided cheaply only by?

course.

Ill covering this subject, there is

to

your

tention.

An advantage you have is your
You operate in every
state in the Union except. Ne¬

coverage.

I know of

braska.

dustry with this

no

same

other in-*
advantage.

You have responsible representa¬

One 6f your opposition groups
has organized what it calls "Min¬
ute Men" to work for its legisla¬
tive

bbjectives,

piany of

designed to put

you

which

are

out of busi¬

It would appear to me that

already

Men.

The

using them?

have your Minute
question is, are yoti
*
f
'
;
,,

Talking with your Congressmen
and Senators is a very important
function.
neve]:

We

are

busy people, SQ

assume, that

informed
are

on

tne

we

are

fully

subjects in which

interested.

If

we

are

busy and tied up, talk to our admihistrative assistants. They will
get the word to us.
But do not

a

iThe electric industry and what Sei^cy. You have .helped the local
happens to it at the hand of gov- and national economy by courageously investing and building for
eBbment will
provide

or

It requires full-time at¬

lawyer.

^ become active only when some in utdity legisl^ive efforts.
a man buys or government
operation starts
You cannot expepct the emdwelling, electricity is a breathing down their necks.
If ployees you send to Washington, be-hesitant about coming to see
necessity' artd taker! for granted! you do not make an all-out effort or those you have permanently us:
Most of you do not come
stood.
.
"
Moreover, when

f^ith that the dignity and rights anticipated
o| each human being will be pre- quirements
served

field

as
his primary
I do not believe
leave this to an already

you can

you

industry as

this

a

mrtots

folly of believ-

lny 8°ve.™,?ent' iiven

handle

responsibility?

you

Sure

am

« Vfehttag TnT'confflcr thlt ^"^oume'Ij
VoU®
learied

fop-flight executives to head
operating, engineering,
and
other
divisions.
Since politics now is one of the
most important, if not the most
your

financing,

ness.

Urges More Political Interest

compiacencyAve^mignt navea,e .-li?
® ^
People 10 Therefore> people seem to have every time a company is faced stationed there, to work without
.7+K
-,fif+ Ci
-Jq
a different economic attitude in with government competition or benefit of your help. This is your

protect tne

do something about. You

tives in almost every Congres¬
so hard towards that end. sional district who
are; or should
Therefore, no single company enbe, well acquainted with .local of¬
joys the. security it once thought ficials and
opinion leaders.

States Senator with

you operate is not clearly under-

talking here of matters

are

inS

r
in

unndedness of purpose,

V I

We\

ou can

Iave
hi

overworked executive

government into the steam power
business. Your opponents know
this; that is why they are work¬

"power

St^ou ^iust strive for sinSe
^t, you must strive foi single

Even

lose their shirts.

important activity that confronts

certainly,

no

„

questionably

economics ....
thereV

to

you, is there any reason why you
should not select a top official to

Todav

the

rents

ing 01

,

oniv

efforts

the

Washington

would

TyA

area

comfort-

a

Fori-

eral Government has constructed
>ste

enterprise
lend itself

,fnm

technology; and

means

wav—the

in

made

up

this

ties.
Its

short-

power.

not package and sell like soap or government power in any section
carry a brand name. .It has its of the United States and help
own particular method of delivery each other whether their area is
which is unlike other commodi- .saffected or not.

are highly complex . and,
fore, difficult to explain.

supporting

It is not because it

cheaper

have a job to do here.
obstacle you face is

mv

.

Chicago.

kEked arEuEd tit tion authorizing Federal construe^rre^Vur valued «<* <* conventional steam plants

in,ou y°uWhy?
Mectncity

or

government power ad-

that your opponents speak with
■It is argued, and many people
one voice on a11 issues, whereas think it is logical, that the Federal
you do not. Maybe it is impos- Government should take the lead
sible for y°u to achieve the same M} constructing atomic power
unity of action and thought. Per- plants. So the atom may replace.

Goldwater

for the collapse

reasons

is

have

to be

Another

tc!

Lna

government
B.

Hon.

mostly because
to fight
for
anything.
In the end the
Greeks wanted security#nore than
they, wanted freedom.
They
wanted not to give to the state
(mt to receive from the state. They
just wanted to be comfortable."
v

Greece

nt

now

about

cerned

bTve^dffidt to^ss'leXla-

appears you

it

Post / *
/
that wonderful classical
scholar of ancient Greece, Edith
tr
1+
xx
•
vw
u
-a
Hamilton. Here is what she said
once

I TS

of

be it Maine

are

fuels.

diminish.

*

-

ington
quoting

of that

thin**

was

presenter fokseeable

a

age

aeserve,

would

ZTZh S the nature of private
-J I™i
is such that it does not
e ^PableiOf 4om,.a good fjob f0 regimentation and,
force people of this countiy, yet

Wash¬

about the

era

Zi

cou¬

a

^izmi

thniiph.

the

future

new

interview

a n

in

the

n

Jn PvL erLtnr

in

^

deserve

justly

you

troubles

'f SrSSSd

and search for

the

any area,

you received

instlv

Vou

creaiT:,

the

the electric comnanies have made

analyze

we

cr~i;t

steadily, —-

even

of

furnish

™°ide1 by

My point IS this. If

llie

it. produces .almost

This trend continue*

expansion

S®a a*om' That+ puts ' the. threat
government power plant in

power from
Federal or public power bodies?

Why This Continuing Trend?

past—

should help us

and

of

of

-those who get their

;

of

15%. and the ratio mounts

a

hydroelectric development; but that

nnhifn knnw +w nUn

directly and

modest.

being
silence
you. I would only say this: If Con¬
gress doesn't grant some tax re¬
lief for your advertising and leg¬
islative effort, I hope this won't
deter you from participating up to
the hilt in such programs.
There
is no place in this fight for ti¬
midity. Those who are timid will

petition

when they buy electricity from

-

sen era—' r

1%

when

Without question, you are con¬

pay

in^the -United

and lessons of
the

;

a snort genera

consumed
Now

the techno-

power for more than 50% of. the locates

tion ago the Federal Government

States.

experience

A: short

storv

time

company'

the

was

J-So'^°S)merS understand E^the aW^^nrt bSS
that they
heavy Federal taxes

One single fact tells

*Pe wnoiesswry.
power

the

—

in this field.

made

There

defending the position of y;our
and, your industry in
Washington. In this respect pub¬
lic power is not the least
bit
in

vehicle used for government com¬

the public know that elec-

farms

our

prop«riy;|fti

;

might be.

the

trie companies serve over 40%

active interest in

-

sottie public group of citi""no^there is no temng when~{t
other
that

that has

ml*
Does

corn-

company.

Price of electricity at 1939 time has passed. You

a more sue-

.

off piece by piece,

by

Although a
company may not seem in danger

logical advances which have kept

..

L

picked
pany

know
it
has been industry and not govern-

United States Senator (Rep., Ariz.)

cessful entry

bringing a new
service area,

your

<>;

Does

By HON. BARRY GOLDWATER *

Senator Goldwater fears atom power

for

industry into

does it get the credit or does that

In' Tomorrow's World

15

(1739)

public give you as an 1
industry for those splendid ac¬
complishments?
When

your

company

is

largely.#

:

m

*

4591, San Juan, Puerto Rico

37 Wall Street, New York 5, N.Y.

around often enough.
Some come
only when they want something.

Continued

on

page

44

The Commercial and Financial Chronicle

of
i

THE MARKET... AND YOU
By WALLACE

STREETE

$50

share, and the cash

a

and

governments held pri¬
marily for the ship replace¬
ment program alone add up to
more than
the market price.
It has a low times-earnings

ratio, approximately sevenhigh and add times until it began moving,
Except for some drugs, elec¬
tronics, special issues and oc¬ "confirmation" to the previ¬ and on its conservative $1
casional interest in some of ous new peaks of industrials dividend
payout offers a n
the blue chips, the stock mar¬ and utilities.
about-average yield of around
line for

ket did a lot of coasting this
week, profit-taking rather

1959

a

A'/Vft

.ft '

ft

A'-:.

c.

Oils found little to celebrate

Something of a question
quick to move in ^ on the except in a few special occa¬
sprinters and overall turnover sions like Tidewater which mark is the low-priced Lehigh
holding to a rather moderate was a prominent exception on Valley Industries. The stock is
the lists of new highs as it was definitely a speculative item,
clip.
'j>
*,
*
!
•
* :%
confirmed
that
there
are
but it did go into something of
All the words of warning merger talks with Skelly Oil a play when it was announced
against unbridled speculation although it is still too early that it was withdrawing from
r

and the con¬ to ascertain if a definite merg¬
possibility that any er would turn out to be feasi¬
For the internationals
new advance will bring new ble.
restrictions from the Federal there was the disturbing ele¬
Reserve Board, kept much of ment of the possibility that
the market restrained. And it Iraq would seek to upset the
also appeared to heighten in¬ more-or-less traditional 50-59
terest in the quality section, profit split. This would upset
notably high-priced Interna¬ companies in which Royal
tional Business Machines Dutch, British Petroleum,
which raced ahead a dozen or Socony and Standard Oil of
more points at a clip to make New Jersey are involved.
it a regular on the lists of new
❖
ft
ft
highs. A pending 3-for-2 stock
Utilities were also a bit
split helped heighten interest hesitant, some
large blocks
in this blue chip.
showing up both in. listed
of

a

week ago,

tinuing

the coal business. The obvious

implication is that it will have
some

income from the proper¬

leased

ties

to

coal

another

operator. Furthermore, it has

couple of subsidiaries,
Steadley Co. and Signal-Stat
Corp., acquired last year and
the year before, with income.
a *

but it failed to

the

the coal

cover

deficit.

Then

company

moved

to pave the way for
possible, but not certain, liqui¬
dation and the prospect of

cash in the form of dividends
in this

operation. But it was
all very much up in the air
trading and as off-board offer¬
and what the future holds for
ings making utility followers
The rash of stock splits and
the company is by no means
wary for the moment of siz¬
stock dividends that would
able realignment of important assured.
seem
at the moment to be
portfolios.
Revival of "Monkey-Ward"
heading for an all-time record
The
better-than
Motors Rally
this year was drawing undue
average
interest even in cases where
yield was the more than&V2 %>
In the motor section
the
in Montgomery Ward which,
the promise already should
more
buoyant isstie has been after
have been well discounted. On
years of stagnation, is
Ford, which edged to the
now
the other hand,
spreading its corporate
the sharp
highest standing it has shown
pickups in earnings weren't since it was listed in 1956. wings with new stores and
much in the way of a market
General Motors featured on improvement and expansion
of existing ones. When the
factor, the good news seem¬ volume
occasionally while
ingly having been anticipated, Chrysler which is the candi¬ catalog store expansion pro¬
except in a few stray cases date for the best rebound gram began in 1955, for in¬
like du Pont. Here company
stance, there were only 278
from
a
definitely" troubled such units and
now operating
predictions of a jump in prof¬
year, oddly was inclined to
are 527. The
its of up to 70% over the first
expansion natu¬
lag.
ft
ft
ft
rally restricts the profit pic¬
quarter last year was even
Interest Centered in

better than

had

Splits

been

antici¬

pated.
ft

There
Ford

*

*

are

has

been

better results

Steels

fairly buoyant
but far from showing any ex¬
cessive strength as some of
the steel analysts with an,
eye
on
the large inventory re¬
building in anticipation of a
strike started talking of a
drop of 30 to 40% in the oper¬
ating rate if a labor tieup is
were

avoided. The first quarter re¬

sults, however,
to show-

were

flood from

expected

sharp earnings

some

gains but

were

still not in full

the

larger

com¬

panies.
ft

ft

ft

An indication of just how

sharply

the

steel

company

fortunes have rebounded
offered

in

the

was

Jones

&

Laughlin report which
showed

a

so

that

showing the
far this year.

American

ture for

Rails About to "Confirm"
were

higher and

able to

at

work

bit since the

the

economy

only

a

bit

more

than $27 mil¬

•

•

-

'

v-

car

chain, however, offers longerrange promise for a company
that in much of the post¬
Interesting Shipping Item
war II period was losing sales
A rather
strange newcomer
to
popularity has been Lykes ground rather steadily. It is
Bros. Steamship. The stock also one of the more mundane
became available publicly of the stocks through the
about a year
ago and has yet gyrations seen in the general
market so far this year, its
to round out a full
year of
listed trading. It moved nar¬ range still a shade less than
rowly, holding in a 24-19 five full points. And it is still
range last year, and was even available below the peak price
more restrained this
year in a .posted in 195(Twhen the stock
was last
split.
range of 29-21 until it broke

field this Fall.

[The
article

ft

ft

ft

The company is a
family
operation, its activities in the
Gulf area and, as some of the
analysts like to put it, a case

time

views
do

not

coincide

expressed in this
necessarily at any
with

those

of the
presented

"ChronicleThey are
those of the author only.]

as




As

Form Investors Service
(Special to The Financial Chronicle)
—

,

generally looked for by most of tne trade in bank
stocks, the first quarter turned in earnings figures that closely
compared with those of the 1958 first period. Bank stock prices
have not of late kept pace with those of eguity markets generally,
probably because in recent months there has been a tendency on
the part of the Justice Department to frown on some of the re¬
cently announced large mergers, with a contributing cause being
the failure of the New York State Legislature to pass the care¬
fully drawn up bill just prior to their adjournment.
In the case of the Morgan-Guaranty tie-up, to cite one case,
Morgan, which had had such a sharp run-up to around 410-415 has
since been quoted in the 375-385 area. Now, Morgan at 410 would
give a'yield of only about 2.44%, and the investor in bank shares
is entitled to something better, even conceding the fact tjiat it is
regarded as a "premium stock."
%
Another indication could be the interposition of the Justice
Department in the proposed merger of First Western Bank & Trust
of San Francisco with California Bank. If the Department is intent
was

•

.

on

preventing mergers between large banks on the score of lesscompetition, much of whatever speculative interest that the

ened

-

banks have had would be removed.
In

the

the basis announced was
Guaranty for one Morgan. As Guaranty at this point
is selling at approximately 93, Morgan should be worth 409, so
there is a decided disparity that is hard to justify apart from
decided doubt about the merger going into effect.
This might, conceivably, tend to act as a damper on bank stock 4
prices, and, along with some dividend increases, put these stocks
on a moderately better return basis.
This department is of the opinion that any easing of bank
stock prices will not be of much consequence, however. Interest ;
rates are holding up, as has the general economy, and while loan
totals have not changed much, government obligations in recent
quarters have shown decided improvfcment.
■
Another favorable aspect is in connection with securities
profits. These, for 1958, were quite sizable for many of the major
banks, and in numerous instances were greater offsets to the losses
resulting from the recent recession. These realized securities prof¬
its are a good source of income to the banks, as they are in most
cases long-term, and hence are taxed at a maximum rate of only ;
Morgan-Guaranty proposal

.

4.4 shares of

25%.

-

v,

.

Let

look at the first quarter

earnings of the leading New
given per share operating results for the
quarter, along with operating figures for the 12 months through
March 31, in both cases, compared with the comparable 1958
us

York banks.

Here

are

showings.
Book Value

-Earnings12 Months

1st Quarter
1959

1958

1958

SI.42

Bankers

9.2

160.38

198.00

23.5

4.22

43.94

48.47

10.3

4.33

40.03

46.85

17.0

16.56 129.22 168.64

30.5

4.62

17.18

1.21

4.85

4.99

58.47

62.47

1.31

5.39

4.91

66.77

70.32

5.3

0.90

3.75

3.51

37.66

43.40

15.3

0.65

2.73

2.61

24.84

26.56

6.9

1.07

4.12

4.13

37.55

44.48

18.5

6.28 23.41

24.16 203.91

254.89

25.1

1.52

1.51

6.07

4.25

63.76

71.26

11.7

1.39

J__„

3.81

6.10
—

4.31

1.13

0.62

Morgan

New York Trust—

1.04

0.91

(f)

16.69

1.01

Irving

19.54

1.44

Manufacturers

4.04

4.26

-

U. S. Trust.

$1.51 $5.75 $5V56 $61.641$67.32

1.07

(b, e)

Hanover

P.

%

Chg.

1959

4.57

(d)
(g)

Corn

Empire
First City—
Guaranty

J.

1951

1.24

Chase Manhattan

Chemical

Comparison

Mar. SI

Mar. 31

1959

1.05

Bank of New York

1.47

5.66

5.59

64.52

67.18

Includes First

4.1

6.8

National

f

City Trust Co.
earnings used.
\
50% stock dividend September, 1958; on 240,000 shares in
270,000 shares in 1959.
Earlier data reflect 4% stock dividend January, 1959.
Earlier data reflect S%
stock dividend January, 1959.

g

Figures

b Indicated
d Adjusted
e

In

for

do

the

not

include Clinton

book

Trust

Co.

prior

to

merger

in

January,

195#;

1959.

value

tabulation, whereas J. P. Morgan & Co.
shows one of the larger growths and Guaranty one of the smaller
increases, it is to be noted that Morgan's dividend is low: relative
to operating earnings; Guaranty disburses a large proportion of
operating earnings. If the two banks merge—a development that
now begins to have .a shading of doubt-—it is generally expected
that the dividend will be relatively higher than Morgan's present
$10y00, and may be as high as Guaranty's $4.00, including the 80
cent extra.
*
;
Empire, too, has for some years also consistently kept its divi¬
dend low, relative to earnings.
There have been several -stock
dividends by Empire in the past few years; and as the shares have
been maintained on the same $3.00 annual basis, the stock divi¬
dends have, in essence, constituted increases for the stockholder
who has held right through.
r.
-.

,

NATIONAL AND GREVDLAYS
BANK LIMITED

COMPARISON & ANALYSIS
FIRST QUARTER 1959

New York

Bank Stocks
Bulletin

on

Amalgamating National Bank of ttuBatdi.
and GrindJays Bank Ltd,

Head Office:

City

26 BISHOPSGATE, LONDON, E.02
London Branches:

54 PARLIAMENT
13 ST. JAMES'S

Request

Trustee

Laird, Bissell & Meeds
Members New York Stock Exchange

something of a company worth more
WALTHAM, Mass.
Irving S.
of a crossroads with
only a dead than alive. Against its Rosenberg is engaging in a secu¬
couple of points more im¬ market price in the low 30's, rities business from, offices at
475 Trapelo Road under the firm
provement putting them in it has a book value in excess name
of Investors Service Co.
were

By ARTHUR B. WALLACE

This Week—Bank Stocks

com¬

pany will spend around $40
million this y ear — against

■.

in

Bank and Insurance Stocks

a

spurt from $1.6 mil¬ through on the top side this

year.

a

Motors, which is |
lion last year—and has prosolidly in the black, wasn't
grams calling for eventual
overly popular marketwise,
the edge pretty much taken outlay of an additional $50
million.
off the issue by the threatened
/' >■'..
i. w;ft
'
ft •; ; 'ft
*
■ •
heavy competition of the Big
The revitalization of this
Three

lion profit in the first
quarter week.
last year to $15.7 million this

Rails

indications

Thursday, April 16, 1959

<

.

.

Rd.t

Nairobi;

120 BROADWAY, NEW YORK 5, N Y.

Telephone: BArclay 7-3500
Bell Teletype NY 1-1248-49

<L. A. Gibbs, Manager Trading Dept.)

Specialists in Bank Stocka

Ins.

St.; Travel Dept.:
come

Tax

Members American Stock Exchange

*TR£ET, S.W.I
SQUARE, S.W.I

Depts.: 13 St. James's Sq.; Govt.

Depts.:

Dept.:

54

Parliament

13 St. James's Sq.;

54

Parliament

13 St. James's

In¬

St.

&

Sq.

Bankers to the Government In: Aden, kenta,
OOANDA,

ZANZIBAR^*

SQMALILAMD PROTRCIORARi

Branches tn:
MMA, PAKISTAN, CEYLON, BURMA, KENYA.

TANGANYIKA, ZANZIBAR, UGANDA.
ADEN, SOMALHJtND PRCMBCTURATS,
NORTHERN AND SOUTHERN RHODKKA.

Volume

189

Number 5838




.

.

.

(1741)

The Commercial and Financial Chronicle

1

Xntaml

CorP°r*ti0tt

Gulf Oil's 58th year was

marked by record activities in all major

departments. World-wide oil production was up 13%, refinery runs
2% and refined product sales 8%.
Net income was $329 million, the second highest jn the Company's

history. Gulf's'working capital showed ; a substantial improvement
the previous year notwithstanding the lower earnings and the
continuation of heavy capital expenditures.
The financial and operating highlights from the Gulf 1958 report

over

presented here.

are

CONSOLIDATED
Net Income

FINANCIAL

DATA

»»••»•»••••«••••»»»«»•

>

Net Income Per Share (based

on

1957

$

««•*#..

329,533,000

$

Cash Dividends Paid.
Cash Dividends Paid Per Share.

77,716,000

Total Assets

Working Capital

$

.

.

Net Crude

$10.94
$ 2.50
5%

DATA—DAILY

565,498,000

$3,240,570,000
$

450,051,000

$2,730,085,000

$

.

401,245,000

$

546,453,000

261,165,000

$

252,265,000

$

AVERAGE

(Includes Gulf's equity in companies less than 100%

Gross Crude Oil,

73,823,000

$2,769,377,000

Operating Revenues.

Depreciation, Depletion, etc

OPERATIONS

$

4%

$3,430,019,000

Capital Expenditures

354,284,000

$ 2.50

.

Stock Dividends Paic(

Net Sales and Other

$

$10.17

shares at end of 1958)

BARRELS
owned)

Condensate, & Natural Gas Liquids Produced

Oil, Condensate, & Natural Gas Liquids Produced

1957

1958

1,396,782
1,298,869

.

1,253,775
1,151,438

Crude Oil Processed at Refineries

698,133

Refined Products Sold.

806,699

682,215
747,198

Natural Gas

110,169

106,301

(A limited

Liquids Sold

number of copies

of Gulf's report is available to customers. Write to Room 1300,

P. O. Box 1166, Pittsburgh 30, Pa.)

17

18

The Commercial and Financial Chronicle

(1742)

cept in

Dlnsions Cost Too Much
By VICE-ADMIRAL

ment.

S. Atomic Energy Commission, and

Development, U.

Assistant Chief of the Bureau of Ships for Nuclear

he believes is

our

as

Admiral Rickover

should not be intolerant of those who criticize

When athletes enter

a

new

as

native endowment and

training can
make

.

them,

their bodies

but
light. Each has

quate

illusions

a „

*

What
that

The

in illu¬

sions

about

in

has

into

Broadway

32-story structure with the
largest floor space in lower Man¬
new

hattan.

Division of

The Corporate Trust
the

of

and

bank

National

First

will occupy
the entirp third floor, most of the
second floor and vault space in
the
basement.
Formerly it oc¬
Trust Company

City

forget

is

democracy
that is quite

minority

rules

that

there

of

its

to

censure

conduct.

Criticism, if al¬
lowed, would in time undermine
the power of the minority. The
ruling minority, therefore, appro¬
priates for itself the majesty of
the sovereign states and brands all
criticism as lese-majeste. Its per¬
sonal desire to escape censure is
thus camouflaged by making the
voicing of popular discontent an
unpatriotic act. At times some-

be defined as a
contact with

lost

thing of this kind is attempted
in democracies by groups claiming

Managing

way.

C.

Thomas

be

branch will
Vice-Presi¬

the

Brew,

process.

have been con¬
cluded
betweenr First
National
City Bank and International Tele¬
phone and Telegraph Corporation
to
proceed with the installation
of an automatic system to process
bank checks, perform deposit ac¬
counting, and related reporting
and analysis functions, it was an¬
nounced jointly by the bank and
Arrangements

ITT.

/
1

The

into operation
early in 1961 in the new Uptown
Headquarters
of First National
City at 399 Park Aye., the system
to

go

will

permit rapid electronic and
mechanical
processing
of
all
and

checks

regardless

documents

ant

evade.

At present, Mr. Keenan is as¬
signed to the Branch Loan Con¬
trol
Department at
the bank's

The

contest

is

a

fact

of

face inteUigentiy and courageously
so that we may make
the right
decisions

and

take

the

proper

actions.

Our

The first prerequisite is that we
look at ourselves and at our op*ponents with the eye of an ath-

lete who wants only to know the
truth so that he may profit from

it.

This is assuredly not a time
when we can afford to give ourselves

over

to

complacent

satis-

-TST

and power. What we need is critieal self-analysis so that we may

peace

One does not have to be

ticularly perceptive,

par-

Amonnnnc
Americans

*««
- lived
m

rural

communities and the United States
was
isolated from world events.

How that
the

we

selves

race

occupy the center of

once

inertia of matter is

that

of

no

greater than

human mind—with
both, the natural condition is rest;
to

ent is

a

in

an age of
lightning change
in the fortunes of nations; when

either

move

and

heat.

produces

With

friction

this

general
dislike for change is reinforced by
us,

scientific discovery
could alter long established power

national trait that is becoming
liability—our habit of subjecting
critics to opprobrium because they
violate our unwritten convention

relationships;

wrong

*J?a* everyone ought to stick to

step could upset the present equi-

affair^ofOthers0" "bUtt mt° thG

one

major

w

h

en

one

•Copyright 1959, H. G. Rickover. An
Address by Admiral Rickover before the
Yale Club of New York City, N. Y. C.
March 16, 1959, and published with the
author's permission.




a

This convention
sonable

interest.
But one of the
objectives of press u r e
is to prevent this from
happening.
Seldom do these
groups
realize
that
ultimately
everyone suffers if the national
groups

when

was

our

not

depended

upon

unrea¬

was

everyone

himself alone, ex-

of

on

the

interest

^hreak

.

violence
•

not

MaSiscn

as

hoJr'

clearlv

and

faction''

met

The most

special

from

interest

rare

riods when people were privi¬
leged to govern themselves. Most

time,

has been subject
to government by the few who
claim to possess superior knowlman

Continude

-i*

❖

on

First

with

page

46

of

business

of

charter

of the close

as

March

The

31.

con¬

effected under the

was

title

and

of

Y.,
$25,000
N.

of

stock

common

and

Bank

Whitesville,

merged, effective
solidation

$360,000;

National

Wliitesville,

Citizens

The

of

National Bank of Wellsville.
*

*

-t

NEW

Mar. 31/59

resources

and

1,991,230,223
1,651,691,843 1,774,870,208

S.

due

banks

from
U.

Govt,

curity
Loans

516,649,115

437,475,234

se¬

hcld'gs

385,285,956

493,207,496

discts.

842,568,179

profits

26,602,812

837,201,036
29,094,372

&

Undivid.

title

ler

of

by

an

has been
Assistant Comptrol¬

Y.,

Harold
Mason

Exchange

Corn

Chemical
N.

it

announced

was

H. Helm, Chairman.
joined the bank in
#

The

*

*

Hanover

nounced
of

A.

N. Y.,

Bank,

the election

John

as

Coleman,

an¬

John

E.

*

V

of

Bowery

of

Trustees

of

'■

t'f

G. Wilkie's

James

announced

■

promotion to
Cashier

and

was

by Harvey C. Emery,

Chairman of the Board and

Chief

Executive Officer of First Trenton

National

Bank,

Mr.

Wilkie

as a

Trenton,

N.

J.

clerk in

joined the bank staff

Aug., 1926. During in^
years he has served
departments and capacir

tervening 33
in many

ties.

He became

position

he

teller in which

a

both

served

in

the

Main Office and the branches. He
was

elevated to become Assistant

Manager of the Chambersburg Of¬
fice.

In due

ferred

to

sume

course

the

the

he

Main

was

trans¬

Office to

of

duties

.

as¬

Credit

Manager during which period, in
September, 1948, he was promoted
to become an Assistant Cashier,
He

had charge of the Credit De¬
partment for several years and
it

in

was

promoted

this

capacity he was
Vice-President
in

to

December,

after assuming
lending of¬

1952,

additional duties as a
ficer.
*

A

*

if

pre-fabricated
assembled

was

which
component

banw,

from

for

a house, has made its
a rather sudden ap?
in Newark, N. J., and is
doing business there.

parts

appearance,

The
a new

pre-fabricated building is
office, the Seaport Office in
Newark,

of

April 13 appointed Herbert SchefAssistant Vice-President;
William T. Staubach, Jr., Assistant
Treasurer
and
William Pierson,

as

National

bank.

a

The

bank

acquired

has

in

other

21

offices

its

147-year history
are important
looking structures in the neoclassic style that has always been
i
favored by banks.
and

most

them

of

Citizens

National

juri

Bank

Windber, Pa., increased its com¬
mon
capital stock from $100,0§0
to $150,000 by a stock dividend,
and

from

the

sale

$150,000 to $200,000. by
new
stock, effective
April 1 (number of shares out¬
standing—8,000 shares, par value
$25).
•
of:

*

Farmers and

*

*

Bank

|
of

Amberst,
Amberst, Va., has changed its title
to

Bank

The

of Amberst.
*

3

.

Provident

Savings Bank
and Trust Company, Cincinnati,
Ohio, has changed its title to The
Provident Bank.
%

The
was

the

State Bank of Newark, N. J., and
is the first of its kind to be used

The

Savings Bank, N. Y., on

Deputy Controller.
Mr. Schefmeyer

of

stock

City Trust Company, ef¬

v

Board

Danbury,

common

Trustees

Heyke and Eugene J. McNeely.
The

Trust

&

Danbury,

fective at the opening of business
March 30.
'
'

William S. Mason, Jr.

appointed

Bank

$350,000, was merged with and
into City Trust Company, Bridge¬
port, Conn., under the charter and

1,864,902,940

_

Deposits
Cash

YORK

Dec. 31/58
$

$
Total

National

Company of
Conn.,
with

Port

-i:

COMPANY,

meyer,

have been the. pe¬

stock

common

groups

national

-

of

Bank

pearance,

office.

Street

TRUST

IRVING

Theo

long history of mankind,

short and

Wall

44

was

above special interests.
In the

Flani-

1958.
saw

Aiid

putting

D.

.

-control- the

who tear the nation apart by their
determined effort to prevent the

people

John

of

Assistant Secretary

an

'

Mr.

dem^raev thfs country .ever
teacher
democracy this
of democracy his most biting cen¬
ttus
had, reserved
for

as

also announced by Mr.

was

gaii.

Bank

of

sure

appointment

coun-

££f^^g^^at^f^bS

of the

country

sparsely populated and

.

flt nii

+n ^

?or themlllles
*

stj-run

fixed on fte

eyes are

The

the

particular

group

is

and for all.

the

above

main

ntf,dleSSly "apbeing
our-_
the
that

in

been settled

world affairs such
traits and attitudes may have
turned into disabilities. The pres-

stage

interest

exceptionally well-informed, or unusually
intelligent, to discover, after some
research into this matter, that certain of our national beliefs do not
accord with reality. By clinging
uncritically to these illusory beor

forced upon us by the totalitarian
detect any weaknesses we may bloc. , We persist in our illusions
have and rectify them-any traits because as everyone else, we disor
attitudes which might have like having to rethink matters
been appropriate in the past when which we believe to have already
*nn
most

lously for their tfdlifi! mS
favorite illusions.
Illusions obfuscate national issues;
they prevent the people from see¬
ing the issues clearly. Were the
issues fully understood, action
might be taken to put the national

Too Lazy to Rethink

The
Keen an

con-

organiz^hm^wbo^ehtuns^r urn/

of the world,
though they are harmful enough
to ourselves and to our friends
who depend on us for wise and
strong leadership.

Finds Isolationism Passe

the lonely critic

cases,

illusions at least do not

own

endanger the

-

National

Wellsville, Wellsville, N. Y., with
The

*

international life which wfe must

Citizens

Vice-President

v.*;

•

Scheduled

Manager in 1956. He is as¬
signed to, the bank's Credit De¬
partment at 55 Broad Street.
Mr. Pollack joined the bank in
1947 and was appointed an Assist¬
ant Manager; in 1956.
He is as¬
signed to the bank's Bowery Of¬
fice, 122 Bowery.
.
•

'

to

York,

New

effective April 1.

City

has polarized in two gialt difficulties of managing a modern The process is weakened if we arc
constantly compet- technological society and imagine tolerant of those who question our
ing with each other. In the fore- it can be bought or begged from beliefs; if we retain toward the
ceeable future there is little pros¬ abroad and imposed ready-made critic an attitude that may have
pect for permanent lessening of upon an ancient and archaic way had its place in pioneer societies
tension between the two; hence of life. When this fails, as it nearly but that is no longer
appropriate
the race promises to continue for always will, a disappointed and
This attitude makes it particufrustrated people may find solace
years, with now one side, now the
larly difficult to dislodge- illusions
other ahead. This is an unhappy in the illusion that it is being
in which various pressure groups
prospect for us who wish only to grievously wronged by other na¬ have
acquired what one might detive in peace and tend to our na- tioris and, thus deluded, embark
.scribe as a "vested, interest." .In,
tional concerns, but one we cannot on disastrous foreign adventures,
such
power

Central

of

■■

cludes six officers.

of type, shape, or size.
Informa¬
to speak for the nation—a false
tion on the status of any account
claim on the face of it for it is
may be provided in seconds.
we, the people—all the people-

combinations

its title

changed

Y.,

Company

dent, assisted by a staff which in¬

:T< VR'I.V"
#•/;')': *
*
who are the sovereign nation. In
{ The appointments ©f Thomas M.
mental exertion." All natipn^hayeJ consequence^ all social ciyticisrri $fi
their own or
illusions. Some catpyot bring tn§m- dertboCracxes is
their competitors' competence.
w essetice
s$lf- Hague and Richard M. Pollack as
Assistant Secretaries of Manufac¬
The world today has become h selves to faceihe Tact of,their >Or criticism. )
Criticism and contro- turers Trust Company, N. Y., are
gigantic stadium where races., for litical and military weakness, nd versy do/not endanger democracy;
announced by Horace C. Flanigan,
supremacy in economic, cultiwal,' delude themselves about their real they are inherent in the right of
Chairman of the Board.
scientific, political, and miliary power; thus deluded they may a free people to discuss national
Mr. Hague joined the bank in
competence are run every any. then be tempted into aggression. issues; hence they are an essential
1940 and was appointed an Assist¬
Since the end of World War ml, Other nations underestimate the part of the democratic
H. G. Rickover

N.

cuse,

Lincoln National Bank and Trust

larger quarters

new,

22 William Street and 770 Broad¬

a

position

cism for this amounts

reality. Illusions persist because f
they are rehdy-made substitutes
for thought and, as James Bryce.
remarked, "to' the vast majority
of mankind nothing is more agreeable than to escape the need for

dulge

critic
a

Critics

without the consent of the people
cannot tolerate
any
social criti¬

measured

oppo¬

national

Toward

sometimes

we

the

occupies

survival.

us

branch

Trust Company of Syracuse, Syra¬

City Bank of

at 2 Broadway. The main banking
floor will be at street level in a

le¬

are

the

to

The First National

New York moved its 26

cupied premises at 2 Wall Street,

and

his

is¬

that in

say
citizens

Attitude

Our

belief

nents'; few in¬

hardly
all

harmful

consider

weakness

against

national

interest.

and

them

in

ac¬

private

concerned with such
issues. They have both the right
and the duty to criticize what they

They

much.

too

cost

that

many

different from the place he would
hold
in
authoritarian
countries.

An illusion .may

strength

own

democracies

this moment in history,

could cost

his

assessed

need

I

Bankers

and

CAPITALIZATIONS

on

gitimately

by the distaste we feel for our op¬
ponents' way of life. Illusions are
a form of excess weight that ham¬
At

today,

considered

involved

now

sues.

pers

ade¬

once

are

action and diminishes fitness:
when
every ounce of strength is needed,

their

lean,
dress

we

tivities

,low our judgment to be clodded

rigorous

live

manner

BRANCHES
OFFICERS, ETC.

REVISED

con¬

of technology and hu¬
crowding and have little to
with political theory.
In the

do

cease

never

CONSOLIDATIONS
NEW

NEW

con¬

are

man

librium and plunge the world into
nuclear war.
In these parlous
times we cannot afford to indulge
in illusions about ourselves or al-

they

race,

prepared to the best of their
ability; as near to physical per-

come

fection

and

materials;
critical analysis.

ideas and create

These

sequences

to explain why our devotion to economic

think up

hence

and

government

more

trols and services.

He

beliefs.

and

more

our

growth may
prove to £e an actual liability; posits a Malthusian specter
of nonrenewable resource consumption as an exponent of pop¬
ulation growth; and finds we may have become smug and
complacent due to detrimental-delusion that our affluence is
due to our superiority rather than good fortune. Convinced of
our great untapped potentialities, the Admiral urges we con¬
serve our material
and human resources by less waste and
planned obsolescence, and more education; cease monetarily
favoring those who use ideas and material over those who
goes on

News About Banks

live

us

urban

activities

human

exposes

our

today most of

environments;1
our
society depends increasingly
on a well-ordered meshing of all

Propulsion

fundamental weakness; i.e.,

But

crowded

in

what
illu¬
sions about our standard of living which he attributes to be
more a product of luck than of brains.
The Navy's nuclear
pioneer, perhaps mindful of his own experience, pleads we
With clairvoyant detachment,

were

by govern¬
action; the citizen was then
hardly conscious of his govern¬

Reactors, Division of Reactor

Thursday, April 16, 1959

.

community

ment

H. G. RICKOVER, U. S. N.*

Assistant Director for Naval

which

emergencies

handled by voluntary
assistance rather than

.

.

promoted

from Deputy Controller, Mr. Stau¬
bach from Assistant Secretary and

Bank

4:

Farmers

Company,

#

and

;

Merchants

Christiansbvrg,

Ohio, has changed its title to The
Farmers and Merchants Bank.

Mr. Pierson from Chief Clerk.

*.
Lincoln

*

National

The

*
Bank

and

People's

Canal

Bank

Winchester,

Company,
Ohio,

has

Number 5838

189

Volume

.

The Commercial and, Financial Chronicle

.

.

(1743)
title to

changed its
Bank.
,i\-

-

Peoples

The
*

*

*

Spring Conferences

its

changed

has

Ohio,

Ashville,

title to The Ashville Bank.

National

The

The

Bank

Bank

of

Dover,

Ohio, with common stock
of $400,000; and The Oxford Bank,
Newcomerstown, Ohio, with com¬
Dover,

stock of $60,000 merged, ef¬

mon

fective
i

of close of business Mar.

as

The consolidation

28.

effected

was

under the charter and title of The
National
Bank
of
Dover, with

capital stock of $472,000, divided
into

shares

47,200

-

of

common

stock of the par value of $10 each.
*

*

The

r

La

%

stock

of

Salle National Bank, Chicago,

111., increased its

Women

Association

the

which

series

will

be

Atlantic

and

ference

to

.

of

attended

New

be

,

England

held

at

Con¬

301 Montgomery Street.

Pocono
;

Manor Inn, Pocono, Pa.
*

May 8-9,
Northern

Mid-West, Lake and

Conference, at NetherCincinnati.

,

?

Anniversary
Dinner for Hospital

Leonard

Merrill Lynch Adds
conferences,
'
by the *
(Special to The Financial Chronicle)
Group's President, Charlotte A.
SAN FRANCISCO, Calif.—Car¬
Engel, National Savings and Trust ole Dunbar has been
added to the
Company of Washington:
: ? staff of Merrill
Lynch, Pierce,
May 1-3, Middle Atlantic, North Fenner >&
Smith,
Incorporated,
following

Joins Wm. R. Staats
(Special to The Financial Chronicle)

V-.SAN JOSE; Calif.—Leonard
Wade, Jr. is
Staats &

May 10-12, meeting of 1959 Na¬ Building.

now

and

Zahn,

Co., is

with William' R;

A.

Vice-President

of

turers Trust

Hospital

will be L.

v

of

for

free

care

and

re¬

tuberculosis, asthma and

chest

diseases

and

heart

surgery.

Einer Paulsen Adds

at

The

E.

(Special to The Financial Chronicle)

Rosenbaum,
the

Manufac¬

Company, is

Vice-

a

Chairman, and Samuel Wechsler,
broker, is helping promote the
dinner as a hospital trustee.

dent

Co., First National Bank
' '

Jewish

Leon

New- York.

M.

other

non-sectarian medi¬

a

center

search in

Anniversary Dinner of

National

Denver.

Brukenfeld

cal

associate Chairman

an

of the 60th

the

of

Thie dinner will be held May 13
at the Waldorf-Astoria Hotel in

/

institution,

Promote

Wash.

of

announced

has

land Hilton, Hotel,

capital

common

National

.

ffi

ijt

;

Convention
Committee,
Schroeder, Milwaukee, Wis.
/May 15-17, Northwestern Con¬
ference^ Olympic Hotel, Seattle,
Hotel

*

The Ashville Banking Company,

i

tional

Nat'l Bank Women

.

•

19

guest

of

SAN

curities

Sears,

Roebuck

Co.

James

E.

.

"

i

•

-

Joins Jack

*

Dusapin

(Special to The Financial Chronicle)

honor

and

—

Company, 1616 Washing¬

ton Avenue.

Oliver, Vice-Presi¬

The event will benefit the'Denver

JOSE,-Calif.

Wade has been added to the staff
of Einer Paulsen Investment Se¬

BOULDER, Colo.
Johnson

is

now

—

Richard W.

affiliated

' with

Jack P. Dusapin, 506 Juniper Ave.

capital

common

stock from

$3,000,000 to $3,37a,000
by the sale of new stock, effec¬
tive April 2 • (number- of shares
outstanding — 135,000 shares, par
value $25).
r. ^
?;».

THE

NATIONAL

BANK

OF DETROIT,

"

MICHIGAN

Mar. 31/59

Dec. 31,'58

1,859,538,146

1,946,927,305

/

--Total

resources-

.Deposits
/Cash
/

v

1,681,978,201 1,766,260,560

and4

U.

due

banks!-

from

373,702,610

1392,538,461

hold'gs

600,345.866

660,681,069

& discts.i
"profits

662,467,850

673,127,960

19,869,684

29,007,682

S.

Govt,

curity

'..t^ans

se-

trhdivid.

?!

National

First

Calif.,

Rafael,

Bank

in

increased

its

Sail
com¬

capital sock from $1,250,000
$1,500,000 by the sale of new

mon

to

stock, effective April 2
of

.

shares

;shares,

outstanding

par

V.i Two

(number

value $10).

■/>./'!/

Vice-Presidents

fornia Bank,

Arthur

T.

150,000

—

Cali¬
Calif.,

of

Los Angeles,

Brett

Alex

and

H.

Smith, have retired completing a
total of 81 years service with the
bank, Frank L. King, President,
has

announced.
Brett

h. Mr.

•

7.;

predecessor
fprjiia Bank v46 r yeaf$ ago as a
messenger., He is credited with
opening the bank's first Holly¬
Office

wood

cessive

of

elected

Was

in

1920.

After

promotions he

Cashier
'

/'/;ivr.

joined the staff of a
institution to Cali-

bank

the

suc¬

named

was

in

and

1938

Vice-President. Mr.

a

Brett's responsibilities have been
largely centered in. the bank's op¬
erations and he is regarded as an

expert in that area.
■ Mr.
Smith has j been

with

..

the

bank Tor 35 shears. After various
branch office assignments he was

appointed Cashier of; the bank in
1942

in

and/elected

Vice-President

has

For the past 10 years he
been-in charge of the bank's

Van

Nuys Office and Supervisor

of

1946.

California

all

Bank

offices

in

the San Fernando Valley.

*"•>/. *

*

.

At their meeting on April 7 the
of directors of Crocker-

boards
Anglo

National Bank,

cisco,

Calif.,

National
pany

and

Bank

of

and

Santa

formally

San

the

Fran¬

-seasoned, ready to serve

County

Trust.

Barbara,

Com¬

Calif.,

plans for a
merger
of the two institutions,
and
called special
meetings of
their respective shareholders for
May 26 to consider ratification of
the plan, it was announced jointly
approved

i

America's second

At Gen Tel, service

and Joe

D.

Example: by installing

supervisory authorities.
consummation
of
the
merger, County National's office
Carrillo

and

Streets

Example: by developing

in

officers

and

would

'staff

become

members

of

a

;

i

^

record-setting pace, we are
one

another.

.

'/

-

.

.

.

1

\

\

»

:

1

products and introducing new equip*

growing "family" nothing but the

best. We know how vital the telephone is in modern American life.

nearby

National

new

Gen Tel is determined to give its

Montecito Vil¬
lage,
would
become
CrockerAnglo's County Main and Mon¬
tecito
offices, respectively.
All
.officers and staff members of the

County

phones at

ment, we are enabling more people to communicate more easily.

downtown Santa Barbara, and its
in

new

enabling more people to communicate with

'[1 Upon

office

"specialty of the house."

>

preliminary approval/-of the
tyierger plan has been granted by.,

State

a

phones the finest communication possible.

Pax-

jton, Chairman of County National,

at

is

We're putting out in every way to give the users of our 3V2 million

/by Paul E. Hoover, President of
Crocker-Anglo,

largest telephone

Our

job is to make it

even more

convenient and economical.

General Telephone Corporation, 260 Madison Avenue, N. Y. 16, N. Y*

GENE)

Crocker-Anglo and would partici¬

pate fully in Crocker-Anglo's pen¬
sion
plan and other employee
tional

Ancio's

Directors of County Na¬
would
become
Crocker-

TELEPHON

benefits.

Santa

Barbara

advisory

board.




S ELECTRONICS

The Commercial and Financial Chronicle

Thursday, April 16, 1959

.

.

.

(1744)

20

is

Electric Power lor a Strong America
Company, Butte, Montana

for defense and economic progress but forebodingly
financed com¬

power

The

watts

all-time

in

a

at-

by an alien philosophy which
tacks us both

foreign

from

and

lands

our own coun¬

try.
To

protect

this

nation

from

foreign
and

mers—just about what it did in
1958. Average annual residential

ideologies, we
have

econ¬
?

for

defense,

orett*

our

.

productivity, every part

power.

abundant and
supply of electric

j;:

-

.

contrast

dust/

on

ment

.

in

time

hieh

the

communists,

socialists and

American

dependent on the electric busiItiess continuing in the hands of
investor-owned, taxpaying com-

panies.^^ P^Ces upon eveiyone
n

employee and as a
Our problem is not

an

only to
save

save our industry, but
the American system of

government, with its great bene¬
fits to the people.
Electric Utilities During the 1958

1
No
gram

in_

equip_

million
an

the

of

introduce

investor-owned

increased in 1958 by the addition
of
14,100,000 kilowatts of new
capacity. This exceeded the previous all-time high in 1955.

to

vestment

million

56.2

billion of new in-

the

investment

1958

bjiiion

of

Revenues

should increase from $8 5 billion
1958
to about $20 billion in

/0.

in

a
135% in1958 levels. The proc£ expansion which I have

representing

1968,

erease over
gram

,,

Total Capability of Utility Fa- outlined will make available an
cilities: The capability of the total abundant supply of electric power
electric utility facilities of the to help keep America strong,
nation,

electric

both

governmentally-

owned and investor-owned, at the
end of 1958 was 149,000,000 kilo^_
watts.

The

1958 peak

by retiring President Co-

We had

a

was

117,-

T

,

The figures I have shown for
the 1953r68 ,decade give an inchcation of the enormous

margin of 26 6%

over

the^peak of fflhi fmpokance

Institute, New Or¬

of this margin to national defense

leans, La., April 6, 1959.

fact that

our

job which

industry faces for the future

icit.

As

redu
a c

c

that

re¬

a

tions,

repayments of
postwar credits,

in¬

and

ployment
Di

the

Paul

Einzig

and

will

iture, revenue
in g

company

department
of 'every
in th^ electric industry

continue

will

have

to

a

out

would

be

now

,

confirmed ,in
the

current finan¬

present

possibility

the

government
likely to be

more

office.

Admittedly

measures

,

of

of

1958; even if the public were

cit

reflationary
effect.
To the extent to which
the deficit will' hot be covered

and would

produce

by the issue of
taken UP by

staining

to

create

a

government loans

bound to
production. It is there¬

mand, which in turn is
stimulate
fore

to

safe

that

assume-

Budget will tend to
the business recovery

the

accentuate

the

ures,

a

avoiding

a

By

service

necessary

with the growth of

RAILROAD

\

AND

have

We

MUNICIPAL

We

can

to

risk

the

for

sake

to

be

seen

in

-

the

A

question

Budget's Change

is

which

Budgetary

not be

causing

measures.Vshould

exaggerated.

Socialist's Lack

of Logic

is whether in pre¬
In
this
respect; the Socialist
conditions at home and
abroad Britain can afford
such opposition is guilty of gross in¬
of a kind that de¬
a
dose of reflation, and whether consistency
the advantages gained by it will serves to be immortalized in text¬
on
logic.
It accuses the
not be offset by the disadvantages books
of a revival of inflation and by government
of having deliber¬
deferred long-overdue re¬
the resulting deterioration of the ately
flationary measures for the sake
balance of payments.
of timing them to take place in
Economic
purists may
argue
election year. In the same breath,
that in existing conditions refla¬
tion entails grave risks. But poli¬ however, it accuses the govern¬

some

anxiety

vailing

*

ticians who

had

considerations

allow

for

arising

of

ment

had to take the deci¬

to

having confined practi¬

political cally the entire benefit of the
from ' the Budgetary concessions to the up-

Underwriters

—

Distributors

/

past.

PUBLIC UTILITY,

do it in the future.

Comparison With Russia

SECURITIES

Statements

Dealers

pace

the

have

been

made

SECURITIES

tricity exceeds that of the United
States and, by inference, that the
electric industry has been lagging.
Let us look at some specific facts.
Per

I 1 v

t

*

'

* i

*

f

.*

4- f

■*

'

'

MEMBERS NEW

:

»

STOCK

EXCHANGE

«

,

I

,,

,

■ •

'

EXCHANGE

(ASSOCIATE)

STREET, NEW YORK 5, N. Y.

TELEPHONE HANOVER 2-9500




;

YORK

AMERICAN STOCK

48 WALL

•

TELETYPE N. Y. 1-344

Capita Generation

1940-57:

The data compare, on a per

basis, the
electricity
and

Russia

annual
in the
for

capita

United

States

1940-57

In 1957, per capita production of
electricity in this country was
about 4,166 kilowatt-hours, some
four
times
Russia's per capital

production of 1,044 kilowatt-hours.
on

page

39

Langley & Co.

Members New York

pe¬

riod.

Continued

W. C.

of

production

the

RAILROAD

INDUSTRIAL and MUNICIPAL

that Russia's development of elec¬

Laurence M. Marks & Co.

"

whether

reflation will in
fact produce the political results
it is expected to produce.
Much
depends on the timing of the
general: election, on the progress
made by economy recovery be¬
tween now and the general elec¬
tion and on the progress of the
inflationary " effects-, to be pror

which is
already in progress.
We shall duccd by the Budget. The extent
witness an improvement of busi¬ to which there is likely to be^a
ness conditions in
Britain during lasting increase in the" govern¬
ment's popularity as a result of
the next few months.

America.
it

done

of

Budgetary

monu¬

keep

ab¬

much graver risk.

remains

It

this

inflation.

reflationary meas¬
present
government

from

assumed

a

the public it is bound
net increase of de¬

future

of

tent

to

rate
in 1.958 about half of the defi¬
would not be offset by savings

available facilities and render the

INDUSTRIAL, PUBLIC UTILITY,

the

carry

inflationary
expected to fall short
expenditure by over £700 mil¬ trouble^ . But the advent of a
would
lion. This is about twice the esti¬ Socialist / Government
mated amount of savings during greatly increase the probable ex¬
cial year is

future

mental

job if our industry is to
carry out these predictions and is
to do what is necessary to make

-vote

sheer

of

tion may now be held amidst con¬
ditions of more of less full em¬

of

invest¬
ment expend¬
public

u r

electorate

grati¬
tude for paying two pence less
for a pint of .beer and for the
reduction of the income tax by
9d. in the pound.
What is much
more
important is that the elec¬

celerated

crease s

the

Conservative

tax

of

sult

sion

P-°Every

criticism.

general election is due

a

anticipations, the Budget for in the not too distant future. If
is distinctly reflationary. for the sake of sound economics
It aims at stimulating consump¬ the
government
had
abstained
tion and pro¬
from unbalancing the Budget the
chances of a Conservative victory
duction with
at
the
aid
of a
thegeneral. election
would
have been much less favorable.
considerably
There is no question of expecting
increased def¬

Weighs Merits of
1968:

in

Revenues

pro-

the 27th Annual Convention

Edison

from

to 70 W^ion customers,

and

700,000 kilowatts.

of the Electric

25%,

increase

fnr fhpv

addjng $40

sion and its remarkable contribu~*An address

nuclear-fired stations. Generafion sh?uld more than double by
increasing from 0.64 trillion kilowatt-hours to 1.3 trillion kilowatthours- Customers will probably

1958

utilities were responsible for 82
a

290,^0,000 kilowatts. The

incdude a substantial amount of

all-

new

Tabmty

-rn"

o

capacity that will be added will
be modern and efiicient and will

one-

Capacity Added: The power potential of the industry was sharply

industry
in
the United
during the 1957-8 reces-

rette "before

creasing
watts to

political effects and

oppositionary

1959-60

as

whole,

represented

thc

,,

recovery

with

expected to nearly double by in-

Amprino

fle,ZJtrnle

,.

„

accordance

continue to save at the same

$100

12.5%

.....

„

Capability, Gene ation, Cus-

Socialist

in

tomers- Generating capability is

an'd

t

as

will be a conof the free enterprise
we know it today.

strength of the investor-owned
Gross Plant in 1968: Gross plant
Utilities during a period of stress, will increase by 115% as a result

entitled "Electric Power for

the

{

for

fhp npnniP

Strong America" without first
reviewing the stability and growth
power

tinuation

.

Eng.—In

LONDON,

d

(1) That there will be no major

facilities *
b
aU American industry.
Facts
such as these are imp0rtant to

a

States

tlons-

war; and
(2) That there

.??£.^s tolab dle investor-owned

Recession
could

one

'

was

anS

:

expenditures

is

as

experienced judgment. These prefictions reflect two basic assump-

SyS[Cm

contradiction

sham

in

exoenditures

'or

eighth

this, the future of the
system of government

good citizen.

kilowatt-hours, another

sterling crisis this

a

the business

encouraging trade union demands for higher

reduction

is

17A%

new

1958

first goal

Because of

of

tbe

lo

1957

ties has always been the

to

...A.

American industry as a
The
b m

OVGr

both

all pri18%.

of

This

1957

of

Government ownership ox utiliof

those

while

^

am

upon

failing

never

to profits
investor-owned
healthy 7.5%

During 19o8, investor-owned util-

those

complex economy, are de-

pendent

kilowatt-

year

lties actually increased their eonstruction expenditures 2.3% over

_

.

national

695 billion

Investment in New Facilities:

_

I r

resources

exceed 3,500

hours. Generation should be about

vate corporations decreased

Our nation's

our

a

^

sound

of

showed

increase,

a

strong! and
omy.

should

use

cause

it accentuating

to whether it will have favorable

as

uncovers

During the year, the industry
should also add a million custo¬

"came

the

taxes,

utilities

tical

sees

and reviving inflation. Moreover, the columnist is skep¬

wages,

300,000

kilowatts.

Although the index

Profits: When it

alter

armies

must

about

by

forecast based on projecting
of industrial production in 1958 past experiences, on knowledge
averaged 6.3%
below the 1957 of present-day
facts, on some
level,
generation
of
electricity knowledge
of future requireincreased %%
ments, and on seasoned and
Production:

within

from

high

in progress,

now

This will exceed the 1958

added.

but not enough to

He also

autumn.

14,400,000 kilo¬
capacity will be

new

tion to the economy of America all-time high,
during that difficult period.
I have a few data comparing
1958-68 Decade
the performance of our industry
In our industry it is not enough
with
all
American
industry in to look only at what may happen
1958:
t
next year.
We have made a ten-

troubled
world. Our freedoms, our beliefs,
our
institutions, are threatened
living

of

an

threat to

a

of payments

do better in
We esti¬

will

industry

mate that a total of

•

are

election defeat for Conservatives, is not
sterling. Dr. Einzig does expect his coun¬
try's reflationary budget to cause deterioration in the balance
considered

1959 than it did in 1958.

The Montana Power head buttresses his pledge of
power resources with statistical evidence concerning generat¬
ing capacity in existence and plans for further expansion, and
he proudly cites industry's stabilizing, effect on our recent re¬
cession. Referring to U.S.S.R.'s generating capacity, he points
out our lead has steadily increased in recent years and will
widen still further in the years immediately ahead. The indus¬
trialist describes the growth of "political elephantiasis" and
he submits a seven-point program of individual, company, and
industry activities to halt encroaching socialism.
petition,

We

ings but, barring

1959 Looks Good

of consequences of Federally-owned or

warns

Recently announced British budget is viewed with mixed feel¬

industry they

our

By PAUL EINZIG

;

all in¬

Salaries: In

cent, while in
rose
4'/2%. ■

spokesman pledges ample, timely

utility industry's

Electric

British Badge! Helps Business

power."

dustry in 1958, wages and salaries
fell off about one-half of one per¬

President, Edison Electric Institute

President, The Montana Power

electric

and

Wages

By J. E. CORETTE*

America

indeed.

great

very

respect to

115

Broadway

Telephone: BArclay 7-8800
Boston

Stock Exchange

New York 6, N. Y.
Teletype: NY 1-4176
Syracuse

Number 5838

189

Volume

.

.

.

income groups.
Yet these
income groups represent a
negligible precentage of the elec¬
torate,
and "in any* case they
would vote Tory even in the ab¬
sence
of any special beneficial

per

Socialist

the

Trust

Company,
tention about the unilateral char¬
Chase Manhattan Bank, The First
acter of Budget concessions were
National City Bank of New York,
justified it would mean that with
The First National Bank of Chi¬
this Budget the government has
cago, Lehman Brothers, The First
signed its death warrant.
Boston Corporation, Halsey, Stu¬
As a matter of fact, the gov¬
art & Co. Inc. and Phelps, Fehn
ernment did not dare to go far
& Co. are joint managers of the
enough in its attempt to reverse
the trend towards equalitarianism group that is offering publicly,
that has been going on for 20 April 14, an issue of $60,161,000
Commonwealth of Massachusetts
years.
In spite of the present re¬
3 %%
bonds at prices to yield
ductions, direct taxation in Britain
remains higher than in any other

from

country. The middle classes are
likely to vote for the govern¬
ment, not because they have rea¬

ties. The group

ment

for those

for the

due

1996-2009

1960

to

maturi¬

submitted the only

bid for the issue:

Saving Bank; Continental Illinois

Rated
bonds

National

Aa

are

Moody's,

by

Bank

general obliga¬
Commonwealth for

Com¬

100.4682 for the

tions

of

the

C.

J.

Devine

&

the

wealth will be pledged and for body & Co.; Drexel & Co.; Mer¬
which
the
Commonwealth will rill «Lynch,
Pierce,
Fenner
&
have
power '• to
levy unlimited Smith Inc.; White, Weld & Co.;
taxes

They

on

are

property. The Philadelphia National Bank;
being issued for various R. W. Pressprich & Co.; L. F.
all

The

taxable

Company Inc.;

Equitable Securi-*

ties

J.

those associated with
Blair & Co. Inc.; The First Na¬
the managers in the offering are:
tional Bank of Boston; Mercantile
Trust Company; Seattle-First Na¬
tional
Bank; Ladenburg, ; Thal-

Chemical Corn Exchange Bank;

Trust
Company of New York; mann & Co.; Bear, Stearns & Co.;
Blyth & Co., Inc.; Harriman Rip¬ Carl M. Loeb, Rhoades & Co.;
ley & Co. Inc.; Kuhn, Loeb & F. S. Moseley & Co.; Shields &
Co.; Smith, Barney & Co.; Salo¬ Company; Stone & Webster Secu¬
mon
Bros. & Hutzler; Goldman, rities Corp.; Paine, Webber, Jack¬
Sachs & Co.; Harris Trust and son & Curtis.
7

Inc.;

B.

G.

H.

Noyes &

Ingen &

Van

Walker

Hornblower & Weeks;

Co.;

&

Ffemphill,

Co., and Dean "Witter 8c

Co.

With A. C. Allyn

Among

J. P. Morgan & Co. Inc.; Guaranty

Corp.;

Co.

Rothschild & Co.

purposes.

of

Bank

National

First

Oregon; The Boatmen's National

The Northern Bank of St,
Louis; A. C; Allyn and

pany of Chicago;
Trust Company.

the

direct

Trust

and

21

Co.

(Special to The Financial Chronicle)

KANSAS

CITY, Mo.—Franklin

H. Brinkley

has become associated

with

A.

C. Allyn

and Company,

Incorporated, 101 West 11th Street.
Mr.

Brinkley was formerly with

Barret, Fitch, North &
and

Co., Inc.

Zahner and Company,

they

receive from it, but
they know
that
they

because

would

receive

factory
of

3.65%

to be satisfied with the treat¬

son

2%

net interest cost

Co.; Eastman
payment of which the full Dillon, Union Securities & Co.;
faith and credit of the Common¬ Glore, Forgan & Co.; Kidder, PeaThe

con¬

Bankers

a

of 3.46437%.

Massachusetts Bonds ;
Offered to Investors

.

If

2Vz% coupon,

$60,161,000 Issue of

upper

treatment.

(1745)

The Commercial and Financial Chronicle

a

Socialist

a

much less satis¬

treatment

the

at

hands;

Government.

'

The

main
reason 7, why
* .the
Budget is likely, to produce infla¬
tionary effects is that it is likely
stiffen

to
.

unions

attitude* of- trade

the

towards

wage

-

demands.

During, recent -months such

•

de¬

mands Were hot" pressed unduly,;
though considering ?; that- prices
"•were stable and production static,
•

evbn such wage

increases

conqecjed .were

as were

;unjustified.

,

In?

Socialist charges

the

response, to

against ; the','government that in
the Budget it has discriminated
in

fayoh of

the - higher incomebound to. be pres¬
union leaders, By
file to step, up wage«

groups, there is

bn .trade

sure

the rank and
demands

and

pursue them with:
vigor. ' In. any^.daSe
Budgetary reflation has un¬
doubtedly improved business:
prospects «the unions, may feel!
that they are now in a better bar-;
gaining-position to press for wage
the

utmost

since

-

claims.

'

Sees No

...

'c'l-

77

-

:

-

■'•••"7:

;

Sterling Crisis This^
Autumn77;»

.7;;;n

7r;.

•

By
increasing
domestic
con-.-,
sumption and by leading to higher 7
.

Budgetary
reflation
is
likely to have an adverse effect-

wages,

the balance of payments.

on

-

This 7-

does not mean,

however, that an— 7
payment crisis
likely to arise this Autumn. •
Sterling is very steady, and there :
is now enough gold to enable the^authorities to face some degree:
other

balance

of

is

.

of deterioration

in the balance of

7

payments without undue anxiety.
In any case such deterioration is";
,

not

likely to be accompanied by

r

the

speculative

7

sterling
previous
are

to

occasions. 7

dollar

for

spare

have

and

bound to be
on

a

this

little

sterling.

on

time

There

is

revival of pressure

sterling before

but

many* 7
Speculators-7011

likely to concentrate

now

the

against

pressure

experienced

the

there's

election,

become

would

in

case of a Conservative
victory.
Barring
a
Conservative
defeat
sterling is reasonably safe in spite
of the Budgetary reflation.

With J. S. Strauss

155

J.

S.

Strauss

So it was, also,

that oil would become our chief source of

Co.,

Providing this

Montgomery Street. Mr. Don¬

dero was

with Edwin Drake's first oil well at

Titusville, Pennsylvania, in 1859. Who

asso¬

&

power

...

formerly in the trading

More

than

twice

the

size

of

Texas, Alaska was purchased

network of facilities. It is

Has since

George R.

Vincent is

Calif.—

now

398

South Beverly

Drive,

asso-

& Co.,

bers

of

Coast Stock Exchanges.

was

formerly

&

New

York

with

purchase price in

gold output alone. The 49th
,

state, is also rich in oil, min¬

and

unseen

He

tremendous job

...

most of

progressive oil companies recognize in their plan¬

has spent more

erals, lumber, fish, and furs.

Only in this

for

i^W0RK^N,NFREED°M
i^.WORWNGror

progress

.yujod-.'rnvv

than $350 million building for the future.

way can

progress-more

products.

if

a

ning. In the past two years, for example, Cities Service

Co.




plus countless oil-derived

by the public.

Pa¬

McCormick

dreamed

power!

Moreover, it is a job which will continue to grow, a
fact

'

mem¬

cific

the

yielded nearly 100

times its

(Special to Tee Financial Chronicle)

ciated with Daniel Reeves

it

for less^han two cents an acre.

Now With Daniel Reeves
HILLS,

ever

products of comfort and convenience-requires a vast

department of J. Barth & Co.

BEVERLY

of Alaska for

$7,200,000 would return many times its price.

FRANCISCO, Calif.—Wil¬
with

,4

i

1

.

y

Icebox," others "Seward's

of State William Seward's purchase

(Special to The Financial Chronicle)

liam F. Dondero has become

dubbed it "Seward's

Folly." Critics simply, could not foresee that Secretary

William F. Dondero

ciated

to Cities Service

than meets the eye!
Some

SAN

more

(reversed

'.A

America be given what she needs

jobs,

more

and better petroleum

!

,

;

:

22

The Commercial and Financial Chronicle

(1746)

nation

Soviet Power

The Challenge oi
ALLEN

By

are

history.

a

.

of total

far higher proportion

than

do to achieve

we

a

Institute.

It

was

Lenin

who

of

mass

its collation and dissemina¬

in

electrifica-

us

tion.

o

The

n.'

Soviet

7.
• 'J •; 7,7
challenge of Soviet power
■

The

first

very >

today

presents

eco¬

triple threat:
economic;

a

first, military; second,
third, subversive.

nomic plan in

and

the early 1920s

now

ie.s tnan

..w.

policy

be

Union

Moscow

diplomacy.

somewhat larger. It is our recon¬
and deflation of Soviet

struction

data.

\ >77

.

then' C7 ..Our

Since

through 1958, Soviet

years,

officially announced rate which is

somewhat

during the

of the majoi;,;ele^'Suez crisis, we had the first Soviet
into their militaryrmissile-rattling as a new tactic ol

Soviet

has

the

industry has grown at the annual
rate of 9J/2%.
This is not the

their

are some

The

down

seven

power

1956

can

assertive. In

more

slowed

dustrialization

in

industrial growth has

own

been at the annual rate of 3.6%
of; 2'£7 million) there .i have b e en
the Taiwan :
universal Straits and Berlin crises, and to v for the seven years through 1957,
If one included 1958, the compari¬
military training is Vbein^^pp-a y the aggressive CommunistI
son with the rate of Soviet growth
tinued. The Soviet Army today has;penetration
of Iraq; Hence, we
been fully re-equipped with a post must assume that they will coh- would be even less, favorable,
4
I; do not conclude from, this
ip - probe brief te^test ^Aiild/
analysis that the secret of Soviet
tanks and artillery. Wc have rea- they
may
even
support
other
success lies in; greater efficiency!
On the contrary, in;: comparison
with the leading free enterprise
economies of the West, the Com¬
mind as we view the military fu1
munist state-controlled system Is
Strong Defense Posture;.
^ure
Firstly, with a much lower
relatively inefficient.
; i ;; r
The have the most modern types industrial base than we,
they are
iThe secret of Soviet progress is
of aircraft for defense: night and
producing a military effort which
day fighters, a very large medium is roughly equivalent to our own:j simple. It lies' in' the fact that the
Kremlin r; leaders /direct
a
far
bomber force and some long-range and
secondly, they have condiproportion of total re¬
bombers. They have built lesk of tibned their people to accept very7 higher
these long-range bombers than we real, sacrifices and a low' standard sources to national.' policy pur¬
had expected several years ' ago, of living to permit the massive poses than does the United States,
I define national /policy purposes
and have diverted a major effort
military buildup to continue. If
to include, among other things,
to the perfection of ball i s t i c the Soviet should decide to alter
an

army

and the tradition of

,

de¬

t i

is

own.

maintains

impending danger and as the
of intelligence pours in day
by day, over electric channels, it
fined Communism "as the Soviet is electronic machinery which be¬
comes a valued partner in helping
system
plus
•

foreign

men

unwillingness to honor agreements.

My topic is particularly ap¬
propriate for the Edison, Electric

which

Here

our

subversive record and its

they

establishment.

the nation's intelligence chief warns we

.

grow,.

their nuclear
will feel that

world.
of in¬

economy

moderately in the past few years,
it still continues to be more rapid
than our own.
During the past

•

•

WT

and

our

trialized

the Soviet military capa-

as

Thursday, April 16, 1959

.

While their headlong pace

Testing United States
bilities

ments which go

economic chal¬

GNP. Because of this turn of events,
could lose unless we
are willing to devote the necessary
share of our power, skill
and resources to our preservation.
The author compares
growth rates; shows Soviet bid to underdeveloped areas is
most crucial to free world's survival; and reviews Kremlin's
lenge with one-half

rin

But

roughly equivalent to cur
They accomplish this with a

of

to national purposes

now, an

'

v

■

military

GNP

their ability to direct

resources

military and,

annual

own.

USSR's economic,
military and closely intertwined subversive challenge.
Mr.
Dulles fixes secret of Soviet success in

current

different category

very

is 'able allies of Moscow, even ineluding the Chinese Communists,

parallel in peacetime
77.', '''

.

their

a

than the unwilling and undepend-

effort is

analysis of the nature and magnitude of

this

them in

con-

We estimate that the total value
of

comforting and comfortless assessments in

many

Their

military ,i support

without any

Director, Central Intelligence Agency

There

to

sources

DULLES*

W.

world.

the

in

tinuous diversion of economic re-

.

.

..

„

^

.

had

of

one

as

This challenge is a

its

principal
objectives the
development
of

the

modern

a

I n e f f e c t,

and the emergence

the Soviets
Alien

propose

W.

to

Marxism. What they may, in fact,

their back¬

ward political institution into key
with their more modernized tech¬

have

given us the slightest
hope
that
they
are
abandoning their overall objective.
sometimes

We

ourselves

political system.

are

Lenin's

event, the Soviet Union
sought to follow up
emphasis on electric

power and has become a leader
many

in

electronic fields. It has de¬

into

like

to

thinking

delude

that

another

with

is

They

entered

have

modernized submarines and

we

world has

struggle of which the
seen so many.
The fact

like

number of less modern craft. They
bad made

submarines,
we

and

on

j wiu tlun

all

must

"

as¬

however, that they have the
capability to produce such submarines and will probably unveil
in

the

near

leader

radio

in

its

role

of

effort

^nded^the
Ger-

is

the missile field,

international with its headquarters
Moscow are not nationalistic:

man

V-l and V-2, and with them many

their

German

From

changing
the whole system of information

lishment

collecting

secure

in

Electricity
which is

power

are

vital

many

operates

on

watch

attack. It helps to

the

fields.
radar

against sneak
make possible

the ready transmission of warning
♦An address

27th

Annual

Electric

April 8,

by Mr. Dulles before the
Convention of the Edison

Institute,

New

Orleans,

La.,

home

deploy

a

which

economy

their

strong national
will provide a

base from

which

destructive

to

foreign

sile

would

strument

become

in

the

their

power

best

0£

struggle

with

their great rival, the United
States. As the size and weight of

nuclear
weapons
decreased, with the improvement of
the art, they became more and
are devoting about twice as much
more
persuaded of this. Hence,
of their gross national product to
they have concentrated on these
military ends as we do. The USSR weapons, have tested some and

Tp achieve this objective, they

military effort
is

as

a

proportion of

greater than that of any

and

vowl

head

conviction

that

he,

Communism

oi
too

be

sive

the

iarce

of

S proceedings ot the recent
21st
1?rlure|s ^1CJ
what
^ might call the Soviet economic5^^- ^ y
J
>
/

U.

the

consumer

f

,

Khrushchevexplained

it

v.

,7

had available for

barely
one-third
the
goods and services available
Americans. Furthermore, most

to

'

t

was our

purchase

, .:

~

.

industry

■:

total

Soviet economic offen-

iooms

J;.

citizens

Soviet

achieved
means.

can

-

,.

in

far

so

Although the Soviets in recent
years have been continually upping the production of consumer
goods,
their
consuming
public
fares badly in comparison with
ours.
Last
year,
for
example,

Communis

incidentally

investment

S.

best year.

cqiwinced that the final victory

jjeire

in

these words, to .-summarize the 10

hours of. his^pening. and closing
remarks:
The
economic
might of the
Soviet Union is based on the pri-

in-

powerful

activities.

GNP

1959.

and

iSrowdand

U.

during 1957 which

Mr

of

hiainly, by non-military

that

—

of electrical

,

as

possesses a'military deterrent. F

Soviet acquired mUch of the

to

the

massive

the

the 7 Soviet

of

his

on

in

heavy

Soviet investment in.industry as
planned for 1959 is about the saipe

government, does not rest soleb

is that the aims of the Communist

in

>

party,
-

technicians.

confidence

new

Khrushchev,

ballistic missile situation..

hardware

the

of

The Economic Offensive

The

future.

When World.War II

some

of ,he

sume,

some

to

novv

highlights of the'economic aspect
Soviet challenge.
'

justified m
are ahead oi

are

concluding that we
them in this field. We

t•';.

a
large section of their produc¬
tion, 30%, while we in the United
States are content with 17-20%.;

time would be far greater,

boasts about nuclear

no

national¬

istic power

a

a

as

investment in

industry..'•

to give their
break in the con-

so

With their lower living stand¬
sumer field with anything like the
share in their gross national prod-. ards and much lower production
of consumer goods, they are in ef¬
uct which we, as a people enjoy,
the prospects of real peace in our- fect, plowing back into investment

that with which
World War II.
over 200 long-range

times

many

Germany

defense and

policy
people

own

objectives are not limited
They
firmly
believe
and
elo¬ base, over the past 10 years, they
quently preach, that Communism have been continuously developpromote its subversive policy on a
is the system which will eventu¬ ing their missile capability, startworld-wide
basis.
It
uses
elec¬
ally rule the world and each move ing with short-range and intermetricity to jam the airways and to
diate -range missiles. These they
build an electronic iron curtain they make is directed to this end.
have tested by the hundreds, and
around
the minds of their own Communism, like electricity, seeks
have been in production of certain
to be an all-pervasive and revolu¬
people.
models for some time;
tionary force.
A Triple Threat
They also early foresaw that in
To promote their objectives they
their particular geographical posi
eir
geographical posiIn my own business of Intelli¬ have determined
cost what it
tion, the long-range ballistic mis¬
gence, the various manifestations may—to develop a military estab¬
intensively

veloped

*

faced

Their submarine strength today

w

has certainly
;

They

their

<-;•

powered

to

reason

missiles.

techniques the evidence

never

trocute the whole archaic Marxist

any

Sovietized,

dictate.

circumstances

as

nical and industrial skills or elec¬

In

a

their

change

They

do is either to shock

of

communized world order.

Dulles

electrify

s

and Pei-

regimes in Moscow

ping, we must expect that their
single purpose will be the liquida¬
tion of our form of free society

electric power

system.

j

global one.

As long as the principles of in¬
ternational Communism motivate

S. output of
goods is for

durable

replace¬

ment, while that of the USSR is
for first-time users.

the

Soviet

In summary,

is geared
largely to economic growth and
for 7 military .purposes;
ours
is
geared largely to increasing con¬
sumer satisfactions and building a
higher standard bf living.
Emphasis

economy

on

Heavy

Industry

ority growth of heavy industry;.,
Here are some examples: while
this should insure the Soviet victhe Soviets last year were
product
■ tory
in peaceful economic com-.,
ing only one autoftiobile for. every
petition with the capitalist coun50 we produced, they, were turn¬
'fries; development of the Soviet,
economic might will give Corn- ing out four machine tools to otir
one.
'
'.".y/iv ;• •'
;y 17
munism the decisive edge in the
This contrast in emphasis car¬
international balance of power."
ries

through in many other fields.
Our capital expenditure for trans¬

In the short space of 30 years,
the Soviet Union has grown from
a relatively backward position into
being the second largest, indus-

assert that

they now have ICBMs
in serial production.
They hope in this way eventually to be able to hold the U. S.
,

portation and

"J

/

,

communications is

Continued

on page

under the threat of nuclear attack

by ICBMs while they consolidate
their position in the fragile parts

Firm

of the non-Cornmunistic

Trading Markets in.

Established 1928

world.
.

•

We Offer

a

Before

(a) Operating Utilities
0») Natural Gas Companies

leaving
the
military
phase of the Soviet threat, 1 want
to dispel any possible misinterpre¬
tations. First, I do not believe that
the
Soviet
now
have
military
superiority over us; and second, I
do not believe that they desire
deliberately to provoke hostilities
with

the

U.

S.

or

the

COMPREHENSIVE INVESTMENT
AND

m
'

ALL

them even if

deterrent force. They
probably believe that the risks to

prise attack
ceptable.

they resorted to
would

be

*•

.

aware of our

& Distribution

CLASSES OF BONDS

AND STOCKS

Western

world at this time. They are well

Transmission, Production

;

DEALER SERVICE

,

PUBLIC UTILiTY

including

RAILROAD — INDUSTRIA L

FOREIGN ISSUES

sur¬

unac¬

We

Particularly Adapted to Service Firms

are

With Retail Distribution

Taking into account our overall
military strength and our stra¬
tegic position vis-a-vis the Soviet'
Union, I consider that our military
posture is stronger arid our abil¬
ity to inflict damage is today
greater, than that of the Soviet
,

Troster, Singer & Co.
Members New York

74

Security Dealers Association

Trinity Place, New York 6, N. Y.

BAnover 2-2400




Union.

Teletype NY 376; 377; 378

P: F
120

our

allies put

Solicited

FOX & CO, INC

BROADWAY, NEW YORK 5, N. Y.

*

Furthermore, we have allies.
The strength, the dependability,
and the dedication of

Your Inquiries

Telephone'"'

REctor 2-7760

7

~

-

NY

Teletypes

1-944 & NY

1-945

38

Number 5838

189

Volume

.

.

.

The Commercial and Financial Chronicle

(1747)

Designing Electric Utility
Systems for the Future
LEWIS

By

R.

a

of

ure

GATY*

facilities

but I

The

use

at

,

and

that

our

the

available" will

discussion

a

problem

of

only

few

a

of

in the field of

areas

equipment, methods of overcoming transmission A

major

ing

-w.

m

He also advises

time and effort be devoted to improving

more

community relations to

parallel electrical

system's

interconnection.

lem

areas

have

prob¬
placed in

been

facturers

A,

and

and development. AA>; .AAA,'; A-'-

The electric

had

an

World War II.
there

war

shows

utility industry has
exciting history since

eminent

many

who foresaw

period of

5

the

seems to be a good basis
believing another increase in
the rate of growth is already under

I

;-

dygrowth

among

are a

number of

com¬

reasons
forthis belief,
them those that have been

already publicized,'such as popu¬
A/v lation growth, new family forma¬
tions, greater use per domestic
AA' customer, and the air conditioning
and
high - intensity lighting
of

i

the

There

pelling

,

of

Instead,

'

for

sur-

and stagnation
before a new

namic

of

\

commercial establishments.

ing of all time.

ceiling
use

ever

An

Lewis R

Gaty'1

ity to find

ity
and

but

my

labor Aon the average.
the cost of one man-hour

growth

of

curve

was equivalent to the cost
approximately 35 kilowatt-

hours whereas in 1955 it
*An

27th

address

Annual

by

Mr.

Electric
Institute,
April 8. 1959. ,.

New

At ru ,y A
A-;>AA
'A
I

A',

{■;>,

■

Gaty

Convention

A

*

of

before
the

the

Orleans,

La.,
'

—

f -A

was

more

than 250 kilowatt-hours. The kilo¬

Edison

watt-hour is becoming a more ver¬
satile and valuable servant as new

ways

no

reduced the overall cost of gener¬
ation as the development program
of the

for electric

in

assignment
some
of

facing

us

in
•

and

meeting

of

our

obli¬

retical

a

way

that

Outstanding

higher

at

steam

pres¬

although

is
becomes

it

increasingly difficult

A

such

in

Continued improvement

expected,

limit

proached.

as the theo¬
efficiency is ap¬

of

There

still

are

mies to be realized

econo¬

Experience has shown that th$
scheduling of capacity and
energy between interconnected
systems makes possible savings ill
daily operation that would not bo
realized in any other way. ,Thia
has resulted in the growth and
expansion, of interconnections
throughout the country until there
are few areas remaining that have
no
interconnected systems. ;The
savings that result from economy
interchange between two systems

proper

due to the ability to carry the
on the most efficient equip¬
ment. Even though the net flow
are

load

at the end of the year may
there can be interchange

of

much

as

change.

A

There
that

are' still

tion.

One

sharing

of

both fixed

obvious

expense result from

ings

well

as

from

as

reserve

by; some of the

as

What

the

are

advantages

pooling; capacity and
two

or more

energy

of

serve

for

all

Continued

systems? These bene¬




challenge. But it's

keep

pace

a

challenge

in the past

we

area

welcome.

with the growing electricaj needs of

service area, we have spent

three

years

for

new

85 million dollars

equipment and

improved service. We expect to spend 50 million
more

by the end of 1961. Long-term

investors in Columbus and Southern Ohio Electric

Company will find

—

as our

customers have

electricity is, indeed, the feature with

COLUMBUS AND SOUTHERN
ELECTRIC
215 North Front Street

—

a

future.

OHIO

COMPANY
♦

.

partners

with

one

by

Serving Ohio's fastest growing, most progressive

that

sav¬

with adequate tie line
capacity make
possible
capital
savings since each system can in¬
stall larger turbo-generator units
than it could justify as an isolated
system. A reasonable amount of

growing's good!

dollars

diversity

substantial savings

systems

growing

our

the

is

diversity. Integrated

A

To

benefit

diversity.
Savings in
charges and operating

reserve capacity is the largest unit
through this means as plus 4% of the load. An intercon¬
through interconnection nection of two or more
systems
with adjacent systems.
A
will, often, result in adequate re¬
'

our

a

;

.

systems
for inter-'

possibilities
adjacent systems
combined with integrated opera¬

/

is

.

some

have

A

where the

out¬

connection with

;,

We're

energy

put of the two systems with sav¬
ings in excess of one-half mill
per kilowatt-hour on this inter¬

4/-'«
d

be zero,

7% of the total

as

systems,

Well

with increasing service reliability,
and at reasonable rates. This must
in

resulted

pressures

efficiency.

operating
sures.

the

My definition of obligation is
simply stated—the responsibility
to supply the prodigious appetitefor ever greater quantities'of en¬
ergy '?' when
and where wanted,

done

and

greater

V

be

utilities

and

progress has been made through
the installation of larger size units

this aspect,
is to review
the problem
some

manufacturer

going to higher steam tempera¬

tures

on

you

-;

of labor
the

of

new

use

man-hour of

There need be

teresting to expand

tools to

1932

A

,

Ample* Capacity

of

multiply his productiv¬
and provide for his comfort
well-being. It would be in¬

gations.

In

ex¬

amination
"

.

use

energy to

areas

industrial
trend

the

on

purchased with

since.

a

the growth of energy
but man's ingenuity and abil¬

with

How¬

one

one

Towns

Capacity must be provided
through; detailed advance plan¬
was used to drive shafts and belts.
ning many years in advance of
Then/ nearly 80 years ago, man;
"harnessed electricity generated by; requirements. This planning must
include the amount of the load
fossil fuel or by falling water. As'
of the
this new genie grew and thrived, growth and the location
most rapid growth, the location
it was used to relieve mankind ofand size of new generating
capac-,
many dreary tasks, at first slowly,
then at an accele^ffirq* pace. New ity and the transmission required
to integrate it into the system. In
tasks were found daily in home/
order to realize the greatest econ¬
office,^ and factory that could be
omy in both installed cost and op¬
done better by electricity. erating cost, the capacity of indi¬
1,5 Now we are * entering a new vidual units of generation has
era, the most fantastic and excit¬
been steadily increasing. This has

of the most compelling
is. the kilowatt-hours that can'be
ever,

available.

cessible/; Eventually

There

A

a

way.

period

.change

became

power produced from fossil fuels
into use. First, steam power

in 1946, then additional
changes with an increasing rate of
growth. (See chart.)A: i

casters

o re

definite

~

The first letter 01
;word gives CARE, which is
good summary of the develop¬
economy.

each

came

slope

At the close of the

were

a

and

slowly,

located and cities grew and; ments ahead.
flourished Where power was ac¬

A

A';

very

were

operating utility companies, and' for research »;'r

//:-A-A-

w

manu-

water

reliability,

Then,

from windmills and falling

power

,

growth.

Further, he underscores the need for team work between

f

to do his work.

the advantages of interconnecting adjacent A:
systems, are some of the topics discussed by Mr." Gaty. The
Philadelphia!! executive predicts manufacturers wjll be hard :• im¬
pressed in meeting orders in 1963-1965—causing bottlenecks /A
sin capacityadditions exceeding 15 million kilowatts—and A
offers several suggestions to alleviate the costly cyclic pattern.

and

expenses,:

Many utility systems are
with
coordinated

dispatching, and have already en¬
joyed the major benefits of such

These

four classifications, although each
For centuries unnumbered, manv is related to the others.
They are
had to depend on animal muscles
capacity, acceptability,

cyclical pattern of ordering and fabricat¬

bility.

interconnected

and utilization.

"

The costliness of the

in the form of substantial

are

capital investment savings, oper¬
ating savings and improved relia¬

tion

faster rate.

even

an

fits

generation, transmission, distribu¬

will

load

in

and

/
time

permit

every ten years,
convinced this is too con¬

servative
grow

Many

ments.^

This

chal¬
a fig¬

doubling

am

unobtrusive

are

keeping with community require¬

greater bargain in terms of the

lenging picture.

Philadelphia, Pa.

-

developing,

are

time is becoming

same

cost of industrial manpower.
is indeed an exhilarating and

Vice-President, Philadelphia Electric Company

^

devices

and

uses

and at the

23

Columbus, Ohio

on

page

42

The Commercial and Financial Chronicle

24

.

.

Thursday, April 16, 1959

.

(1748)
charts shows where ation incrementally over the same larger, more efficient units have
utility industry, as period of years, it took $5.04 of lowered the Fuel Use Per Kilo¬
represented by the Class A and B investment for a dollar of revenue. watt-hour. This fact his been pri¬
It is well knownvthat a business, marily responsible for the Costs
investor - owned electric compa¬
to be successful, must make the of Fuel Per Kilowatt-hour holding
nies, stands today at the end of
A series of

electric

the

Electric Utility Pricing
Policies for Tomonow

11

utilization

fullest

of inflation.

years

dollar.

QUIG*

By ROBERT S.
Manager,

Services Incorporated

Rate Department, Ebasco

The trend of return on

problems facing it is the fashioning of new pricing pj>liMr. Quig forecasts a five-and-a-half-fold increase in

tant

cies.

four times the present

net elec¬

the year

watt

down to 5.58% by the end of
1958. ;
to make it very clear
that the use of the net plant con¬
want

I

145 million kilowatts. Keeping this in

cept

this chart in no "Way im¬

on

plies that this is the sole base for
determination of return. The guid¬

industry's

regulatory
commissions are well set forth in
the legislation of the many states.
I will touch upon this later.
The
important thing is that
there has been a decline of about

public-versus-private ownership, and the

ing principles as to rate

internally but one-third of its needs. The Ebasco executive
calls for new regulatory and depreciation policies, offers a
longer

ture be

nation's
omy

econ-

as

cast

by

|^pssart
W

fore¬
the

National

The fundamental purpose

ex¬

family forma¬
makesi
that

for

Robert

S.

Quig

electric

be the key to public opinion on
utility service may well produce
the whole issue of public-versussales at the end of the next 20
private ownership of electric util¬
years approaching three trillion
ities. It is the customer's bpinion
kilowatt-hours, which is 5V2 times
of the cost of electricity, and not
today's -sales.
Installed capacity
the cost itself, that is the impor¬
required at the end of this same
tant element.
period will probably be over four
In developing the price struc¬
times the present 145 million kilo¬
watts.
Assuming that privately- ture for tomorrow, it is clearly
owned electric companies will evident that there must be a re¬
continue to represent the present examination of past policies and,
ratio of ownership in the future, more particularly, an examination
of
the
underlying economic
over $150 billion of construction
expenditure must be made by changes that are taking place dur¬
ing this inflationary era. For the
them to attain these objectives.
most part, the rate structure used
It is obvious that an expansion
of this magnitude will involve by electric companies today was
substantial new money financing, developed to serve under the con¬
ditions
of
the
pre - inflationary
for even now the

and expense on

The growth picture that is por¬

trayed here is forcing utility man¬
agements to ask themselves these
three questions:

the one hand, and
competitive conditions of value of

service

on

the other.

is

a

of "fixed

business

ning charges."

*An

which the fixed

policy
address

by

Mr. Quig

Convention

Electric
Institute,
April 8, 1959.

New

of

before the
the

Edison

Orleans,

La.,

Fundamen¬

tally, the electric utility business

(1) Will the utility price strucAnnual

increase of

over

18%..

achieved

has

in

building

power

plants containing larger size, more
units

efficient

well

are

known?

The increase in cost per kilowatt

is lower than the price-level in¬
crease,

of

same

Costs, over the
It is an achievement
most non-regulated busi¬

period.

would

nesses

bring a rewarding
' ■> V vV': •
-

return.

with

invested,

capital has been
additional fixed

.

charges. Two facts

now stand out.
future
technological
ad¬
may not produce a decline
at the same rate as in the past. As
to Fuel Price, today's natural gas
contracts
understandably
carry
upward escalation. Fuel-oil prices
generally keep in line with other
competitive fuels. At the moment,
future coal prices may be in a
relatively better position than the
other two major fuels.
On the
whole, however, it is probable that
fuel prices will keep pace with
other inflationary trends.

First,

vances

measured by the Index

as

additional

after

Trend

Construction

which in

the

of Operating Expenses

on

a

and

run¬

Considerations of

determine

the

charges

extent

to

are spread

unit basis over the

charges.

>

Y The increased investment in dis-'
tribution systems has brought withit

increased

Distribution
has

tomer

operating

expenses.

Expense
gone from

Per Cus¬
$11.30 in

1948 to $14.97 in 1957, an
of 32.5%.

and

increase

Customers' Accounting;

Collection

Expense has gone

from $4.27 to $5.75 per customer,
an
increase
of
34.7%. Already?
much

effort

has

been

expended

iri mechanization and in electronic

development. If this had not taken

of common stock

cost

ratio of common
equity is in large part attributable
to the fact that utility equities
have followed the general infla¬

running

Effect

Inflation

of

earnings-price

the market,

up-trend of

tionary

and to the fact that utility inves¬
tors

expect higher earnings will be

attained

through the orderly op¬
of the

eration

on

Electric

maximum satisfaction in the utili¬

Utilities
In

Chart

ized in

one

inflation

on

II

we

zation of the appliance investment

have

summar¬

picture the effects of
electric utilities.

conclusions to be drawn

are:

The
:

i

perative that careful scrutiny be
given to capital expenditures and

and

their

as
as

alternative

ment

of

sources

of

invest¬

reasonably

revenue

talking

are

(2) The gap between plant and
operating revenues will have to
be closed, requiring greater sales
effort along with the aid of any
needed rate changes.

Prior

to

sales

on

promotion

ex¬

In 1948 sales promotion
expense of electric companies was
only 1.6 cents of each dollar of

pense.

revenue.

In

cents

potential.

about.

War II, the industry was
spending about 3% of its gross

World

revenue

(1) The costs of new plant in
this inflationary era make it im¬

regulatory process.
If the inflationary trend continues
utility equities cannot be kept
attractive on an earnings basis

we

each

If

of

1957

corrected

it

still

was

dollar

few*

of

1.6

revenue.

inflation

since

1948, the industry is spending con¬
siderably less for sales promotion
effort

today when plant invest¬
competitive forces are
at highest levels. The Gold Medal¬
ment

and

(3) Return must, in the long run,
lion Home Program contemplates
an improvement in trend.
an
appliance investment on the
It is not in the nation's best in¬
part of the customer of $3,000terest to have one of its dynamic
$4,000. Now, this is not much more
basic industries
operating on a
investment, if any, than the home¬
marginal earnings basis.
owner
currently is making in a
In the operating areas of pro¬
equities of unregulated businesses.
well-equipped home utilizing all
duction and distribution, and sales
of
the
various
utility services.
With the demand for new plant
promotion, there are expense de¬ Nevertheless, concentration on allat rising price levels and a con¬
velopments that will bear consid¬ electric home
stant need lor new capital, it is
service, which holds
eration in future price policies.
the possibility of being a good
crystal-clear that greater revenue
A chart which is the product of earner for the utility, will require
must be developed to support the
the Edison Electric Institute tells an all-out sales effort if it is to
overall capitalization.
a
very revealing story.
It dem¬ succeed. In addition to the Gold
\ye will now indicate the trend onstrates how the
improved heat
of steam and hydro plant costs on
Continued on page 36
rates per kilowatt-hour from the
an index basis, on a per-kilowatt
and a per-customer basis and per
dollar of operating revenue. Many
companies are recognizing the sub¬
evidence

stantial shifts that have occurred

Pioneer Natural Gas Co.
.

,

-a.

: ft

.

,

.

*

'

*

•

I

in

Republic Natural Gas Co.

incidence

the

of

costs

in

all

three major categories—those that
are
kilowatt - demand - related,
those

that

are

Underwriters

Primary Markets

kilowatt-hour-re¬

lated and those that are customer-

related.

Dealers

Bank and Insurance Stocks
Christiana Securities

Electric Constructions Costs, as

Southern Union Gas Co.

measured

Index

combined

steam

and

construction, continue to
upward trend. Over the
II years (1948-59) these costs have
increased 70%, slowing now and
then only in adherence to the basic
show

Western Natural Gas Co.

an

laws of

supply and demand, then
and moving along the
upward path of inflation.
picking

Trading Department

»

WERTHEIM & CO.
Members New




York

Stock

Exchange'

''"-^40

There

has

YORK

been

a

Laird, Bissell & Meeds
Members New York and American

dollar of

revenue.

Telephone BArclay 7-3500
DU PONT

BUILDING

WILMINGTON, DEL.

At the end of

$3.44 of electric plant

investment to produce one dollar
of revenue.
By the end of 1958
it took $4.27.

120 BROADWAY, NEW

substantial

change in the electric utility com¬
panies' economic posture as meas¬
ured by the amount of dollar in¬
vestment necessary to produce a

Looking at the situ¬

Corporates & Municipals

Unlisted Securities

up

1948 it took

NEW

Distributors

by the Handy Whitman

for

hydro

Unlisted

?

is not measured simply

comparable
risks, then the position of utility
common equities will be seriously
damaged. The ultimate test of a
stock price is earnings to common.
Real earnings to common in sub¬
industry gener¬
stantial proportions will be nec¬
ates internally only one-third of period.
The pricing structure of a util¬ essary in the years to come if
its new money requirements.
ity must recognize the basic eco¬ utility equities are to sell on their
Function of Rate Making
nomic
conditions
of
investment own against heavy competition of

27th

an

fairly steady in spite of rising fuel
prices. The improved generating
efficiencies
are
obtainable
only

capital industry has achieved in serving
customer loads and to the neces¬ place, the volume of work would
by relat¬
have been handled only at much
ing present market prices to past sity of adding substantial distri¬
highermnit costs.
bution
system
and
investment,
earnings.
As the NARUC 1958
provide adequate service to its Report of the Committee on Cor¬ primarily due to the requirements
Sales Promotion Expense
customers and at a fair profit to
of seasonal loads. It is in the dis¬
porate Finance pointed out, such
The
the millions of investors who sup¬
tribution system investment that
growing
loads and
ex¬
a ratio is "inadequate as a meas¬
ply the capital. Public relations ure of the cost of common stock we seek a greater utilization of panded use of tomorrow will need
a
the invested dollar.
reappraisal of utility sales ef¬
surveys have quite clearly indi¬
equity."
forts if customers are to achieve
cated that electric rates may well
The downward trend in the

ulation/and

demands

of all

public utility rate making is to
produce the revenue requirements
that will enable the company to

pected in pop-

the

$193,

The economies that the industry

,

the sizable in-

evident

to

-

Product, to¬
gether with

tion,

has

•

level of Gross

crease

ever-increasing inflation.

of

capacity,

(2) Will the regulatory con¬
cepts be broad enough to assure •J"; Chart I shows the trend of costs
Distribution Plant, including
of electric utility capital as meas¬
adequate service to customers and
General Plant, has increased from
ured by new issues of bonds and
satisfactory return to investors?
$203 per customer to $330 per
preferred stocks sold in the 11customer, an increase of over 62%.
(3) How should the utility be
year period. I have used the earn-;
organized at the rate and eco¬
The sizable increase in invest¬
ings-price ratio of 24 utility com¬
nomic research level to success¬
ment per customer in this cate¬
mon stocks (Moody's) to indicate;
fully carry out tomorrow's pricing the
general trend of equity capi-r gory is attributable to the - tre¬
policies?
tal.
It must be recognized that mendous area coverage which the

The

growth.

increase in the

adequate for the economic

in the face

of rate base

standard

any

Capital Costs

utility industry faces
of continuing record

future

in the rate of return on

9%

conditions of tomorrow? :

the electric
a

no

job.

a one-man

Every economic indicator avail¬
able today points to the fact that

is

installed

of

from $319 per kilowatt in
1948 to $344 at the end of 1957.
Production Plant including Trans¬
mission has increased from $163
gone

base that

available to utility

are

tremendous need to obtain outside financing since it generates

six-point rate making guide, and warns rate-construction

—

in Service, as measured per kilo¬

mind, he then reviews the earnings problem and the difficulties
caused by inflation, the crucial role electric rates play in the
issue of

effort,

gone

1978, compared to today's, involving increased invest¬
of over $150 billion in order to bring installed capacity

sales by
ment

expanded
and—in the case of
utilities
regulatory cooperation
and understanding can do much

sales

tric utility plant, plus an adjust¬
ment for working capital, shows a to improve this condition.
The cost of Total Electric Plant
return in 1948 of 6.11% which has

is told that one of the most impor¬

Electric utility management

of Return

Trend

of the invested

Proper pricing,

-

Stock Exchanges

YORK 5, N. Y.

Bell Teletype NY 1-124849

.

PHILA. NAT L BANK BLDG.

44 WHITNEY AVE.

PHILADELPHIA, PA.

NEW HAVEN, CONN.

ID WALDMANNSTRASSE

lfiO W. BROADWAY

ZURICH, SWITZERLAND

SALEM, N. J.

225 S. STATE

ST.

DOVER, DEL.

Number 5838

189

Volume

Stales

.

.

.

The

Girding to Tax

CoTMnzrcial and Financial Chronicle

Findings

by

-

the

Ewetedby

'Clearing House show 28 states

already
earned

shield

a

as

taxation and

longer

6-8,

selected

Allen

uncon¬

S.

State

rapidly to tax the locally earned
income of corporations operating
interstate

as

✓

fice

in

interstate

states

The

in

S.

this

new

States

business

tric

threaten

liabilities

also

R

on

a

a

member of the EEI board of

number of Institute committees,

served

as

President of the New

England Gas Asso¬
England. He is

a

served

a

member of the National Industrial Con¬

Chairman of the

as

Committee

President,

Fitzwater,

Indianapolis

Planning Association. He\
Recovery-

Connecticut Flood

following the floods of 1955.

He served

as

a

Director of the Connecticut Bank and

Company, the Emhart Manufacturing Company, the
Hartford Accident and
Indemnity Company, the Hart-^
ford Fire Insurance Company, the Hartford Steam Boiler
Inspection and Insurance Company,, and Scovill Manufac¬
turing Company.
\
/

&

Power

A.

Gibson, President, Hartford Electric Light Co.

Ginna, Chairman, Rochester Gas & Electric Co.

L.

E.

Electric Illu¬

Cleveland

President,

Lindseth,

J. W.

H.

McAfee, President, Union Electric Company.

M.

Miller, Chairman & President,

Columbus &

Southern Ohio Co.
E. M.

J.

H. P.

of the implications
Supreme Court decisions,
realize that thousands

and

T

Naughton, President, Utah Power & Light Co.

L. Rice, Jr.,

O.

will

President, West Penn Electric Co.

Taylor, President, Wisconsin Public Service Co.

companies

doing

Titus, President, Metropolitan Edison Co.

D. J.

Mr.

munity from taxation by any state
which chooses to levy a tax on
income

earned within

its

INCORPORATED

Tuepker, President, Oklahoma Public Service Co.

multistate

a

Investment Bankers Since 1912

King's Background
the Institute since

Vice-President of

last June, Mr.

borders
well

King will succeed J. E. Corette, President and General

intrastate commerce, CCH said.

Manager of The Montana Power Company, as head of the

interstate

—on

Many

corporations

careful

state

commerce

watch
activities

"local"

their

on

to

In

most

kept

out-of-

insure

intrastate

avoided.

as

have

that

business

use

Mr.
Power

the Commerce Clause of the U. S.
Constitution

as

taxation.

shield

a

Today,

Clause offers

merce

against

the Com¬

no

such

be

that

meter

a

number

a

multistate corporations will be

of

their

net

on a

was

the

varying apportionment formu¬

las in state income tax

laws may

payer

New

and

D.

the

Exchange

offices
are

York

&
15

partners

as

en¬

a year

Midwest Stock

In 1945 he became

supervision

of

Fargo division manager with gen¬

company's

the

activities

in

North

Dakota.

American Stock Exchange
•

'j

firm
Co.

of

April

Broad

will form

He

was

elected Executive Vice-President in 1951 and

King has served

Advisorv
V

David

Committee

on

and

in 1954.

122 South

LaSalle Street
•

the Edison Electric Institute's

its

Atomic

44 Wall

Street

•

Power

BOSTON

Committee,
'

Both

in Porges' & Co.




a

member of its

board of directors.

He is also

a

member of the board of directors of the Northwest Ban-

H.

1st, with

Street.

and is

corporation, the Northwestern National. Bank, the Com¬

munity Chest, the Minnesota Orchestral Association, and
the

(Associate)

■

NEW YORK

Mr.

Exchange,

Exchange

CHICAGO

station.

eral

Exchange

in the credit department of

30 Federal
Stock

Paul Rittmaster

at

MEMBERS

testing laboratory and the Riverdale steam generating

To Form Rittmaster Co.

Rittmaster

by

elected President of the company

the

was

the

of state income taxation, the CCH

David H. Rittmaster. member of

NSP

company's Minneapolis office and by assignments in

taxation, the tax¬
will have to show that the

report said.

he

degree in electrical engineering.

a

the

result in double

formulas place an unconstitutional
burden upon interstate
commerce,
in order to avoid the full effect

vacations

steam main construction job in Fargo, N. D.

followed

income.

However, the Court recognized
that, while in practical operation

summer

Technology, where

New York Stock

This

of

during

of

His first full-time assignment with

re¬

gineer

100%

Institute

graduated in 1922 with

of

than

States

He began working for NSP

repairman while still in high school, and con¬

Massachusetts

quired to pay taxes to several
states, amounting to a percentage
more

President of Northern

been

has

tinued to work for the company
from

One result of the Court's action

well

as

King

Company since 1954.

pro¬

tection, CCH added.
may

investor-owned electric

companies.

this

technique has enabled them to

stale

nation's

of the

was

instances,

trade association

Minneapolis Foundation.

He is also

a

member of the

•

Director of the National Association of Manu¬

Trust

business have been stripped of im¬

as

Yankee

aware

the

they
of

of

Director

a

minating Co.

Question of Impact

ingly

T.

R. E.

As businessmen become increas¬
of

elected

Evans, President, Kansas Gas & Electric Co.

business

already:
Connecticut, Massachusetts, Mon¬
tana, New Jersey, New York, Ten¬
nessee, and Vermont.

was

,

O.

interstate businesses op¬

intrastate

named Assistant

Knapp

Light Co.

erating in seven other states where
corporate income taxes are levied
on

Knapp

Cisler, President, The Detroit Edison Company.

G. W.

Maryland.

tax

and

ference Board and the National

pany.

Georgia, Idaho, Iowa,
Kansas, Kentucky, Louisiana,
Minnesota, Mississippi,
Missouri, New Mexico, North Car¬
olina, North Dakota, Oklahoma,
Oregon, Pennsylvania, Rhode Is¬
land, South Carolina, Utah, Vir¬
ginia, Wisconsin.

Vice-President

facturers and
Sherman R.

Corette, President, The Montana Power Com¬

E.

J.

Also,

a

Knapp has been

presently

Acker, President, Central Hudson Gas & Elec¬

W. L.

are:

Alabama., Alaska, Arizona, Ar¬
kansas, California, Colorado, Dela¬

In 1949 Mr.

ciation and the Electric Council of New

Company.

ware,

Expanded

has

newly elected mem-!

June, 1962, are:
E. R.

already in position to tax

interstate

is

Mr.

revenue

the CCH report said.

source,

he became Assistant
was

Executive Vice-President.

directors and served

beginning'
June, 1959, and expiring

King

Other

bring their taxing systems
with

of-1

tors, with terms

holding regular legislative
this year could take ac¬

line

to the President in 1948.

1959-

Institute's Board of Direc¬
Allen

sessions
tion to

from June 1,

1941

Company, which is owned by a group of
11 New England utilities
joined together to construct the
area's first atomic electric
power plant.

bers of the Edison Electric

exclusively

commerce.

run

In

Vice-President and he

including the General Division Executive Committee. He

already have the
necessary statutory provisions to
tax the locally earned income of
operating

to the Sales

He

Newly Elected Directors

which

companies

the New Milford District.

Atomic Electric

v. 1

;

Legislation just enacted in Idaho
and Utah brings to 28 the number
states

year

May 31, 1960.

.'J

of

The terms of

President.
~

ing to Commerce Clearing House,
national
reporting authority on
tax and business law.

forthcoming

President of thel
Connecticut Light and
Power Company, as Vice-

recently approved by

the U. S. Supreme Court, accord-

the

Knapp,

moving

are

for

He served as an
Engineer in the operating and sales
departments until 1937, "when he was made
Manager^of

and Sherman R.

Minn.,

double taxation.

governments

Knapp has been President and a Director of The
Light and Power Company since 1952. He
joined the company in 1928 upon graduation from Cor¬
nell
University.

King, President of the Northern*States Power
Company, Minneapolis,

stitutional burden must be made
to escape

President

its

as

%

'

Mr.

twenty-seventh annual convention of the Edison
Institute, meeting in New Orleans during April

Electric

against state

finding of

a

The

commerce.

Commerce clause is said to
serve

as

exclu-

firms

of

interstate

in

King

Illuminating Companies, and the

Connecticut

industry elects Allen S.
President and Sherman R. Knapp as Vice-President
commencing this June 1.

tax

25

Mr. Knapp's Background

Annual Convention of electric power

additional
locally

seven

to,

income

sively
-

and

can,

threaten

states

of Edison

Engineers Club of Minneapolis.

Edison Electric Institute

Commerce

.

(1749)

Association

New Officeis

Interstate Business
•

"

Street

The Commercial and Financial Chronicle

26

.

.

Thursday, April 16, 1959

.

(1750)
Shippingthe technical problems. The been said concerning
government, in our national in¬ port's high cost, this plant has
served an indispensable purpose.
terest, must see that this is done.
The electrical industry, both pub¬ Out of it is coming vast amounts

plants of the water type and we
have
such
proposals before the
Congress at this moment.

come

first page

Continued from

Government's Role in Nncleai
Power Development
'

..

.

..

Energy Commission, I
effort and cooperation

.

...

_

invite the
of

every

one.

Peaceful

Application Since 1954

time.

some

The
this

for

continue

will

situation

this

question is often asked,
Are we slipping?
is, no!

answer

why

My
Kilowatts at high

is.

the cost are not important to us. We
have the lowest cost power of any
Congress of the United States de¬
nation in the world.
clared "Atomic Energy is capable principal
Moreover, we have abundant sup¬
of application for peaceful as well
plies of conventional fuel. What is
as military
purposes." Hence, it
In

1954, just five years ago,

is to advance
United States policy important then
efforts should be directed "know-how" — to be there first

established
that our

as

development ol with the cheapest and most de¬
atomic energy for the general wel¬ pendable atomic power. This calls
for steady, rapid development. It
fare and to raise the standards of
does not call for large quantities
towards the

living.

the Congress

The President and

countries,

Other

less fortunate

of

solid,

1

Quite
graphite

information

dependable

otherwise

not

obtainable.

~

cooled reactor

Commission

operated reasonably

thoughtful work of the staff of the

which

are

other

But

stream.

on

indications

to

fully for

Public Power District in Nebraska
to be

better

It

results
Energy

produced.

they

Commission

the

findings of
the Ad Hoc Committee I appointed
and

with
remarkable'
dependability.
Additionally, successive cores in¬
dicate dramatic improvement in

Hanford and Savannah agreement on the following state¬
producing millions ment of objectives and these rep¬
in addition resent national policy:

in

of

Joint

Committee

with respect to
activities."
by law vast responsi¬
bility for our national atomic pro¬
informed

rently

all of the Commission's
Both have

gram.
As

one

relatively

in

new

picture, I can detect no basic
ferences in the fundamental
proach

ox

Committee

Commission

the

rather than a na¬
would have
been

tional liability,

tional

asset,

created

result of the high cost

as a

of the power

produced.

To reduce the cost of nu¬
power to competitive levels
in high energy cost
ar^as of this

pleted,

(1)

clear

country within 10 years.
(2) To assist friendly
now
having high energy
achieve

Basically, we must create atomic
the power according to our needs and
from plants which will produce
dif¬
this power competitively. This ac¬
ap¬
and complished, nuclear power will
take its place naturally in meeting
our

competitive

about five

nations
cost

to

levels

in

test reactor.

studies

I

about

this

believe

we

difficult

know

and

more

times

at

forbidding science than do men of
Other nations. In saying this I ad¬
mit that at least

and

possibly

more

one

two,

other country
are

Vienna

we

are.

from

long, hard study of
this problem that atomic power
will be competitive and therefore
useful in the United States at
earlier date than

producing

kilowatts of electricity from

the atom than

September. I am'-con¬

in

vinced

Moreover,

I

am

need

some

think.

further persuaded

for

such that

this
we

an

years.

maintain the
United
States position of leadership in the
technology of nuclear power for
To

reason

/

experimental

power

is

power

for ALL
*

4

WISCONSIN UTILITY ISSUES

<©©,

o

me

give

you

a

few

a

power

MEMBERS

OFFICES

AND

(I
U

2

EXCHANGES

THROUGHOUT

will be less
types.
An
additional
experimental reactor,
larger and more flexible than the
existing
one,
must
be
built
promptly to advance this process.
The Commission has proposed this
to Congress as a part of our cur¬
hazardous

plants

than

"Breeding,"
reactor

other

pleted

in

and

two

should

years

be

or

a

little

These projects, in my opinion,
represent
real progress in the
water
concepts.
Much will be
learned
from
their
operation.
even

indicates

designed

plants
new

fore,
ceed

technical

ma¬

fas¬

construction

will

be

in

un¬

Idaho

and

completed, together

with

its

full-integrated pyrometallurgi-

c a

additional

1

facilities,

reprocessing

about

There¬

advances.

a

The

year.

rapidly.

advancing

It

is

Of

—

Distribution

—

Trading

WISCONSIN

nm

Sound Public Utility Securities

new

core

of

much

Co.

Philadelphia-Baltimore Stock Exchange; American Stock Exchange

1529 Walnut Street—PHILADELPHIA 2, PA.
Bell System

LOcust 8-0900

WE

Teletype1

PH 30

MAINTAIN

higher

density. They hope to

&

Boenning

AND

pro¬

New York

MARKETS

POSITIONS
STOCKS

Telephone

COrtlandt 7-1200

.

TRADING

HAVE

COMMON

.

IN

OF:

the design

capacity of the original
plant which itself is unaltered.
What is accomplished here can be
incorporated in the design of all
boiling water reactor plants of the

,

future.

The

downward

effect

on

am

told

that

Electric

Vallecitos.

the

Company's

Central Electric & Gas

Northwestern Pub. Service

Central Illinois El. & Gas

Otter Tail Power Co.

Central Indiana Gas

Pacific Power & Light

Gas Service

Portland General Electric

Company

Indiana Gas & Water

Southwestern

Iowa Public Service

Texas Illinois Nat. Gas

States

Telephone
Pipeline
Transcontinental Gas Pipe Line
Wisconsin Power & Light

Iowa Southern Utilities
Lake Superior Dist. Power

ex¬

perimental plant in California, has

Shippingport, apressurized
water plant, and the largest of its
kind, has been operating now for
16 months. Despite all that has

William A. Full er & Co.
Members

209

SOUTH

LA

of

Midwest Stock

SALLE- STREET

is

about

Many Years We Have Specialized In The

Underwriting

in

90 megawatt

Enrico Fermi Plant of this type

it is our intention to pro¬
promptly
with - additional

For

a

fissionable fuel

more

der

demonstrate

to

in

perimental breeder reactor is

technology

now, known
a
need
for

producing

cinating prospect. When this can
be done economically and safely,
a new and important milestone in
atomic
power
will have
been
reached. Our program in this area
is encouraging.
The second ex¬

com¬

more.

But

V

4

or

terial than is consumed, is a

the Elk River Plant are all under

construction

Members;

exceeded
its design power level
and is capable of further increases.

NEW YORK STOCK EXCHANGE

REPRESENTATIVES




MILWAUKEE

OTHER PRINCIPAL

it circulates through the

the

duce 100 megawatts or five times'

I

SECURITIES

ST.,

as

reactor,

rent program.

experimental boiling water
Argonne, a simple plant
designed to produce 20 megawattsof heat has vastly exceeded its
design capability. The reactor has ■
since demonstrated a capability to
operate at 60 megawatts. Now the
Argonne laboratories are install-v

General
MASON

active

plant at Indian Point. Pacific Gas
and Electric Company's Humboldt
Bay Plant, the Northern States
Plant with nuclear superheat, and

ex¬

the cost of power will be dramatic.

INCORPORATED

EAST

and coolant does not become radio¬

1961 by the

reactor at

ing

225

cost

scientists and engineers expected.

of

source

Unlisted

INVESTMENT

commer¬

Ohio. If success¬
ful, organic cooled plants will be
relatively simple and, therefore,
cheap to build and operate. Also,
because
the
organic
moderator

Company's

The

a

small

a

plant in Piqua,

pressurized

255

should

.

amples.

ILsiiwii

of

megawatt

giant

Gives Examples of Progress

'

construction

Edison

actor plants are now in operation.
They have performed well. They
contribute valuable, firs t-h and

Let

1

we

re¬

must promptly over-

mmmMmmmmm. mm m m

Market Place

that

for my hope and ,my

optimism.
Seven

Consolidated

This will be built if

indicate

cial organic-moderated and cooled

construction

under

de¬

the feasibility of this process. Al¬
though results to date are admit¬
tedly meager, we believe this re¬
actor type is worth further de¬
velopment. We, therefore, are pro¬
ceeding at once with design and

$500 million.

plants

Further

The organic-moderated reactor
experiment in Idaho has proven

million
will

and

It will be followed in

duce the cost of nuclear power.

basic

1

about

operating
information.
By
and
large they perform better than the

that the

in

concept.

for the most part, on schedule.
Dresden, a 180 megawatt boiling
water reactor, will be completed
this year. Yankee, a 130 megawatt
pressurized water plant will be
completed on schedule next year.

-

cause

achieved

further pursue the sodium cooled

are,

(3)
To
support a continuing
long-rangb program to further re¬

(4)

produce

excess

The

implementing
the needs of your customers.
national objectives. I am particu¬
civilian use.
larly pleased with the relationship
(5) To develop breeder type re¬
Competitive Tomorrow, Not Now
as it exists today. I am impressed
actors to make full use of the nu¬
Is
with the thoughtful consideration
competitive nuclear power
clear energy latent in both urani¬
and seemingly unlimited time that possible? My answer is yes—nu¬
um and thorium.
18 busy Senators and Congress¬ clear power will one day support
Before discussing the future let
our
ever
men are willing to give to over¬
expanding industrial
us
take inventory of our present
seeing this great source of energy growth.
situation.
for the
general welfare of ail
I, for one, was not swept along
people.
Despite frustrations and disap¬
by the unwarranted enthusiasm of
You are interested in power and the early 1950s.
Likewise, I am pointments, much has been accom¬
my purpose is to discuss nuclear not persuaded by the gloom and plished. Results point the way to
despair so frequently expressed accelerated progress. We are ex¬
power.
It is my opinion that we lead today, a viewpoint you will recall periencing better plant perform¬
ance than anticipated. This is the
the world in this technology be¬ pervaded Geneva last August and
in

be

can

other

which

electrical

shall keep the
fully and cur¬

than

several

en¬

expressed in its report of couragement. .We have operated 11
August. It results from the naval propulsion reactors, some in
others in sub¬
studies of the Edison Electric In¬ land prototypes,
stitute and the excellent reports marines. Every one has performed

kilowatts

Commission

high and the steam conditions

are

velopment of this concept requires
a
larger,
more
elaborate,
and
more
flexible
sodium
graphite

are

of Kilowatts of power

"The

rei-

ible and economical.

En¬

River could be

plutonium. However, these kil¬
by our
standards. In my opinion, a na¬

This

ergy as

Atomic

plants at

owatts would be expensive

completed in 1961.

actor concept is of special interest
because the outlet temperatures

last

on

Commission and the
Joint Committee is copper-riveted

of the Act that,

the

are

concepts unless
superheating is proven to be feas¬

Committee

Joint

atomic assets. The relationship be¬

by the wording

From

year.

a

Susana
success¬

proceeding with the de¬
sign and construction of a 75 meg¬
awatt
plant for the Consumers
we

there

give

over

Santa

at

information gained in this reactor

—

to

experiment built by

the

Commis¬
currency:
and, by coupling the our own power needs and to our
Sixteen plants incorporating
sion. The former shapes the na¬
production of p 1 u t o n i u m and world position; and finally after eight, different reactor concepts
tion's atomic policy through legis¬
power into a single plant, produce weighing the hard, tough scientific have
been
authorized
for
con¬
lation and acts as "watchdog" for
weapon
materials to meet their and engineering problems which struction by the government or by
the Congress to see that this policy
needs.
must be solved.
industry, in addition to those now
is
properly implemented. The
This policy makes good sense
in
operation. These new plants,
latter is the executive agency. To¬
Lists Five Objectives
for them, but not for us. Had we
some of them large, most of them
gether the two cooperate in pro¬
Briefly,
there
is
now
broad relatively small, will, when com¬
made a similar decision, our great
tecting our nation's precious
the

u m-

s o

has

with the Atomic Energy

tween

the

d i

moderated

-

Shippingport also is demonstrat¬

the core life span, thereby cor¬
than we, have allowed themselves
be dedicated to the
luxury of high-cost atomic early last Fall.
respondingly reducing fuel costs.
man's betterment — not to his
These are all encouraging fac¬
Each of these groups set forth
power produced in first generation
annihilation.
This responsibility
are 'not
theoretical.
plants. By doing so they may objectives—each in its own words tors. They
was placed with
the Joint Com¬ better their power costs, save im¬
after carefully considering the They are solid results and dispel
mittee for
Atomic Energy and
some of the gloom of Geneva.
ports of fuel, stop drains on their importance of nuclear power to

Of energy should

"concept,

different

a

ing unexpected growth. It is oper¬
ating at 60 megawatts electrical,
but designed with the hope that it
might some day produce 100. The
second core presently being fabri¬
ing proportion of the growing de¬
cated for the original plant is esti¬
mand for electrical energy.
There is now broad agreement mated to produce 150 megawatts.
I think it is a. good bet that the
on the basic objectives of the na¬
tion's atomic power program. This third core may. even exceed that.
These are the hopeful results of
agreement
results from many
studies.
It
results
from
the the early operation of the plants

from work of the Atomic

of kilowatts.

decreed that this great new source

private, in the interest of
meeting their ever-growing de¬
mands, must also work with un¬
relenting effort towards the per¬
fection of these processes. When
this task has been accomplished,
the atom will provide an increas¬
lic and

Exchange

CHICAGO

Number 5838

189

Volume

.

The Commercial and Financial Chronicle

,

.

50% complete now and should be

on

ready for operation in 1961.

offer

the

tool,

they

of

means

dependent
or

United

the

on

States

Britain for enriched fuel.

Do¬

mestically, natural uranium less¬
ens the potential
competition be¬
tween the nuclear

for

the

and

power

programs

weapons

available

tl-235.

Also, heavy water offers
economic
advantages
stemming
from

greater economy in the

use

of neutrons.

Therefore, we place
great importance on our heavy
water program.
We are building
two test reactors, one at Savannah
River, one at Hanford. We have
contracted for development lead¬
ing to a heavy-water gas-cooled
fclant in Florida and for the con¬
struction of a heavy-water cooled
and
moderated' plant
in South
Carolina.

Furthermore,

important

Concurrently,
Congress

sented

I present

have

status

been

our

know: there

I

program.

of

disappointments.

The

Joint Committee and the Commis¬
sion

have

had

their

disappointmany
of
these disappointments have been
6aused by non-recurring events.

'fnents

Some

also.

I

out

grew

thusiasm

believe

of

the

of

1954.

over-en¬

Some

serious

have grown out of the fact
that costs have exceeded original

ones

estimates

by

an

average

of

50%
An¬

and in some instances 100%.

other frustration

has been caused

by delays—delays by industry in
arranging its plans and financing,
delays' by
the
Commission
in
evaluating proposals and in se¬

curing authorization,
i

However,

we know more
business now than we

this

in the past.

with

checked
enced in
ernment

der the
of

Estimates

a

knew

can now be

actual cost

experi¬

dozen locations.

Gov¬

procedures, difficult
new

1954,

about

are

un¬

understood

all parties concerned.

Finally,

proposed

Commission.

.

and

This reactor is

courageous

step for

a

higher

density

im¬

methods

cores,

as

containment,

of

tion

until

novel

these

beendemonstrated

ideas

in

had

ance,

•

For

the

this

reason,

immediate

-

argue
construction
we

of

ticular

technical

advances

on

a

Let

us

look into the future.

*

countless possible thermal re¬

are

in

evolve

the

and

it

which

concepts

minds

the

engineers.

seem

scientists

of

At

features at

there islion

of

ment

this

research and

effort.
be

to

We

the

have

not

cheaper,

new

we

technical

a

On

found

two-and-one-balf

to

two

develop¬

The

case.

money;

the

other

calls for another experimental re¬
actor

haps

and

will
.

cost

carry

ican end out
mar

This

is

water.
more

about

of

one

of

a

that

says, "It
all-Amer¬

an

of gram¬

group

school kids." But

factors

Com¬

Graham

control

we

feel the

the

hence, the yardstick of realism caii
now be placed against
the large

-

of

number of reactor

under

are

concepts which

study.

.:

.

.

;

Beyond the non-breeding ther¬
mal plants are breeders. 1 have

already discussed
fast

breeder.

one of

There

them, the
other

are

thermal

breeders, in which the
fuel passes through the reactor in
a liquid
state or in a slurry. In

this busi¬
$350 mil¬

advanced

addition

to

we can

ers,

cheap power.
the
figure
for
boiling
Jt probably will cost even
expect

being potential breed*

these concepts have the addi^

tional

advantage that their cost of
fuel fabrication is small. We have

experienced

for

pressurized water, but
this figure is hard to
develop acT
curately because the development

difficulty with

more

these reactors than we had antici¬

pated.

For

that

reason,

we

are

commingled with our naval re¬
actor program. I believe it will be

going

still

development. We feel this type of

is

expensive to fully de¬
velop some other concepts.

This, then,
for

rrakes

it

plant,

necessary

as

to
determine
objectively
carefully the potentialities of
concept. A process must clearlv
us

or

demonstrate

that

useful

a

perhaps

fected

hardware

on

emphasizing research and

producer, is

power

and
a

little slow

a

and are

more

this

a

commercial

decade

away,

When it is per¬

more.

will

be

a

great

it

will

a

step

continuing interest in the following

Continued

produce

hand, the estimate

on

page

:h
i

|-

Wefhave

f

=Public

Utility Stocks—

m
•

.

Co.

Established 1893

Distributors

and

pense,

m

Public Service of New Mexico

•

of Public

Utility

we

and Other Securities

will find ways of

giving help

without slowing down or

delaying

'W
51
•

'

I

Department

Members

New York Stock Exchange
Midwest Stock Exchange

:

-

i

plants of the size I
speaking of do not ap-;

know that

have been

peal to most of you for the simple'
reason
that they are costly and

■

American Stock Exchange

their

power

Pacific Coast Stock Exchange

five.

For that reason

is far from competi-.
are

we

ad-'

vocating capital assistance to off-;
set • the
difference between
the

120 So. La Salle St.

60

Broadway

initial

Chicago 3

cost

estimcfted

New York 4

plant.
Telephone: FRanklin 2-6100
Teletype:

CG 1089

.

Telephone:
,

WHitehall 3-2800

Teletype: NY 1-3433

San Francisco and Other Cities




...

The

vocated

of

cost

a

the
of

plant and the
conventional

a

Commission
capital

has ad¬
which

grant

could make up a large part or all
of this difference. Others have ad-,

capital grant plans which
from 75% to 90% of the

vocated

range

II

4

1

Southern Nevada Power

1

ji

United Utilities

I

j|
Members New York Stock

■0

Exchange

72

^

•

Albuquerque

"

Cleveland

Boston

Dallas

Fullkrton

Indianapolis

Montgomery
Pittsburgh

Nashville

V

San Francisco

Syracuse

•'

St.Paul
Santa Ana

Toronto
Washington

Potsdam

§|

j
j

Harrisburg

Joplin

Wiiittier

Mobile

Philadelphia

San Antonio

Seattle

Utica

Phoenix

Rome,N. Y.

Rock Island

Santa Fe

Houston

Kansas City,

-

Salt Lake City

Tulsa

j
f|
|§

Durham

Detroit

Minneapolis

New Orleans

Portland, Ore.

St.Louts.

Jackson
Ma lone

j

Fayetteville, N. C.

•

Fayetteville, Ark.

Los Angeles

Beloit

Cincinnati1

Chicago

Dks Moines

Grand Rapids " Greenwood

Huntington

Laurel

Baltimore

Burlington

Denver

Farmington, N. M.

following cities:

Ashf.ville

'

™

Municipal Teletype: NY 1-1691.

We have direct wires to the
Albany

jV. &

!

Telephone WHitehall 3-7600
Corporate Teletype: NY 1-865

Beverly IIills

progress.

your own

Unlisted Trading

£.

\k

Public Service of North Carob'na

the developments made by

Thus, we will give in¬
dustry every encouragement to
proceed on its own, rapidly and
economically. Where we can help,we
Will, And when we do help,
industry.

INCORPORATED
*

Underwriters

&

dustry ,will not- build develop¬
mental plants in the future, as
they haye in the past. And I can
assure you that there is no desire
to duplicate, at the taxpayers' ex¬

.1

Arkansas Western Gas

,

•

28

Pi

a

A.G.Becker

of

cost

nuclear power are now clear and,

I have said

point where

As my fellow

John

years.

then another, or per¬
without great economic disturb¬
small demonstration gen¬
ance.
erating plant. . We believe that
;
: A new
We, therefore, feel a series of
each
reactor
area, of great importance,
concept
must \ go
They
is the gas-cooled reactor.
Great through an evolution of develop¬ protoypes should be built.
must be carefully selected, they
Britain has built its nuclear pro¬ ment.
Experience has proven to
us
that no easy shortcuts are to must be looked upon as the es¬
gram around this concept.
How¬
sential building-blocks which go
be found.
The great pressurized
ever, at the low temperatures to
into a completed structure.
Each
which
-they
are
limited - today, water plants at Yankee and Con¬
{here has been little incentive for' solidated Edison were preceded prototype must play its part in
technological ad¬
the United States to build gas- by a number of naval reactors all demonstrating
They must prove that
cooled reactors—they are costly,; pressurized water but varying in vances.
their steam conditions are com¬ size and construction detail/and these advances, when incorporated
in large plants together with the
paratively poor, and their power also by Shippingport, itself a pro¬
advances proven by other portocosts high.
totype. Therefore, one might say
types, will result in a large plant
there was a wealth of practical
More recently, there is evidence
which will be both reasonable to
{hat gas-cooled reactors can op¬ experience and knowledge in the
hands of the scientists
and eny build and capable of producing
erate at considerably higher tem¬
economic power.
peratures thus improving
their gineers as they developed the de¬
This will make for some hard
relative economics. Therefore, we signs and built these two major
choices.. The decision to construct
propose to build them.
We have plants.
or hot'to construct a particular
asked
The same is true of the Dresden
Congress to authorize
building a highly flexible graph- boiling water plant, for this plant prototype will surely influence
the program. If Federal funds are
Vite-moderated, helium-cooled re-: has benefited from the four ex¬
| actor.
This plant will be built perimental BORAX plants, as well involved, this decision must rest
with the Atomic Energy Commis¬
i)
sion.
This is not to say that in¬
to

to

choice.

difficult to select

is

";

succession

shortcut in

reasonably

been-completed.
Finally, proto¬
types require far less uranium
fuel.
For these reasons, changes
and Improvements can be made

mental reactor, in

>

,

support.

processes to a

for
^ large plant is four years
after financial arrangements have

experi¬

no

It

ness.

:

in this Way,

ising concept should be given sup¬
port. It was also felt that a con¬
cept could be proven by a small
experimental reactor and a certain
amount

easy

•

ment-should

risk,, to be sure, and
sharpen up the tech¬
nology. Third, they can be built
in
less time.
Proposals in oul;
hands indicate that plants of this
size can be designed and built in

time

one

are

afford

better

can

of

amount

Second, since they

to

i'elt that almost any prom¬

was

substantial

a

<

costly

concepts

missioner

to: just how many types of
plants industry and the Govern¬

% The advantages-of building pro¬
/ The
problem
immediately at
hand
is to produce competitive totypes rather than large ; plants
atomic power at the earliest date. during the developmental stages
are
manifold.
First, they can be
This, in out* opinion, will be done
built relatively cheaply.
There¬
first in plants in which the urani¬
fore, they save you or the Fed¬
um
fuel is consumed just as coal
eral Government, or the taxpayer;
is consumed in a boiler. ' There
actor

ulti¬

ticular concept raises the question
as

or

which offer special
significant incentive to our
national interests. This is. not.mi

and
p r o to t y p e
plants necessary to perfect a par¬

projects

.i

goal.

long,

efforts to four

our

and

experimental

every

from 30 to 80 megawatts,

The

;

smallest plants which can
built and still prove the parr

be

final

—our

the

believe

to

should limit
five

Industry can and will build
these plants with no
government
assistance—that is our objective

for

will

we

of pursuing only

concept as Great Britain has
However, I do think we

this is done—^

once

demonstrate ;the

we

that

infer

to

course

done.

means of this assist¬

by

promising concepts. I dc

mean

one

tems.

Need for Prototypes

scale -which will permit extrapo¬
that
both of
lation to plants of large size. The
will be, we .will
proportions of the prototype will
have taken a giant step in this
depend to a large ektent on the
very important area.
'. V 'TV;.
technology
being
demonstrated.
For the most part they will range
//
Looks Into the Future V -

reason"

these

not

adopt the

mate possibilities of atomic
power
When demonstrated, then. —then
industry,; both public and
these ideas must appear, in large
private, will build the very large
plants if the full potential of the commercial
plants for incorpora¬
developments are to be realized.
tion in your respective power
s3rs-

//

successful, and I have

the most

...

.

moving forward into the
expensive developmental
We must do so only with

in

steps.

plants.

be

good risk, w

■

that, once,

prototypes.1 These prototypes will

a

'

■

•

We feel that

•

smaller

considered by us and by the Sponas

tive

'
\1 ■;
'
■: I
Final Goal for Private Plants

<'

to

support. We must be highly selec¬

ergy
Commission, will advance
the
particular concept involved.

the

venturing into temperatures here¬
tofore
unattained.
However; it
has been carefully studied and is

by

an
agreed set of objectives
guide us. We can now move
along much faster.

would

cost

lower

more

ited to essential prototypes
which,
in the opinion of the Atomic En¬

simplified systems of circula¬

are

we

have

things which are neces¬
advance the program.
It
is also important to recognize that
the proposed
capital grant is lim¬

man

at

or

27

more safely,
warrant our

quickly,

power more

those

sary to

But it
in¬
incorporate into

courageous

power

proved

bold

.we

very
recent

and

a

This matter can be re¬
The important point is to

solved.

started

large plant some of
developments
such

a

Energy Commission, for
its part, is to provide $14y2 mil¬
lion for research and development
assistance.

be

who

deed

The

.

difference.
do

plant and fuel costs.

would

answering some
questions, has a habit of asking a
great many more.
This, then,

laws and regulations
now

this

at

If similar reactors were

both

con¬

high temperature

reactor

Boiling
and

at
Argonne
plant.,

today, they would obviously in¬
corporate improvements lowering

Atomic

If

the

the

Experimental

Reactor

the Vallecitos

v.

by
the
Philadelphia Electric
Com¬
pany and the General Dynamics
Corporation. This plant will, be
privately financed. It will be sup¬
ported by a group of some 52
power companies, and I imagine
all of those companies are repre¬

cooperative
arrange¬
wifh Canada in this field. :
for

of the

gas-cooled

sor«

much

So

authorize

to

struction

have

we

Water

asking

are

we

the

as

useful in the entire field of /'•'

gas-cooled reactor technology/

;

ments

ex¬

an

im¬

using
natural
uranium for fuel.
Foreign coun¬
tries
would" prefer not to
be

best

as

are

reactors

because

portant

site

perimental reactor and a power
producer. This will be a valuable

water

Heavy

,

Gbmrnission

a

(1751)

l

Spartanburg

§|

Victoria, Tex.

Wichita

i
■<<$

,,il

28

The Commercial and Financial Chronicle

(1752)

Continued from page

27

Power
lieve that breeders
render

your

must

organization will

come

from

actual experience with the build¬

Skeptical of Thermonuclear
Fusion Power

Finally, as the third stage in this

is

ever,

question in the minds fossil fuel costs increasing each
of the scientists that these prob¬ year as they surely will, must be
there is no

The

Dr.

called plasma thermocouple,

process,

direct

his

reactor

of

into elec¬
scientific
breakthrough
—
was
reported
Tuesday, April 7, by The Univer¬
sity of Michigan and Los Alamos
(N. M.) Scientific Laboratory.
power

energy

major

a

—

into

the

be

gram.

of

source

grids.

power

the

clear

Only

plant

so

so
nu¬

fare

focus,
I

with

help

knowledge,

coal

these
you

oil

or

readily available

all. of

power

when

to be today. Then, I

de¬

the

as

are

not

they seem

believe, with

factors

properly

in

only conclude, as

can

have, that atomic

power

devel¬

for opment deserves, and must have,

technical and engineering
are

to

must

technical

sources

then ask how your stockholder is

systems be dem¬

and

You

onstrated.

your

doing

by

compatibility of the

mands of utility

your

on your

re¬

vast. And finally, you

continued

your

vigorous

ticipation.

sible tremendous reduction in fuel

deadweight loads now necessary
to propel a rocket into space;
Enable satellites to have a small

a

but

comparatively

long lasting

source

with which to telemeter data back
to

Have great significance in
marine propulsion.

par¬
Under

the

containing

carbide

source

plasma

or

the

Nevada Natural Gas

At

Pipe Line Co.

a

•

DISTRIBUTORS

TRADING

•

MIDWEST

an

white

a

which it

be

can

production of electric power from
fission.

FACILITIES

This

STOCK

EXCHANBE

such

mos,

boilers,

means

condensers

gas

as

go

Fermi

and

tur¬

dyna¬

to make up the

Reactor

Mon¬

near

Mich.,
or
the
combined
government-industry
reactor
at
Shipping Port, Pa., will not be
necessary in the future.

roe,
AMERICAN

STOCK

(ASSOCIATE)

EXCHANGE

SAN FRANCISCO

300

LOS ANGELES

647 South

Montgomery Street
Teletype SF 885

Spring Street

Teletype LA 533

Professor Pidd said it would be
sometime before
actor

PRIVATE

WIRES

TO

NEW

YORK

AND

DIVISION

OFFICES

utilizing
be

could

the

of

core

bulb

for

of

a

commercial

the

new

re¬

process

constructed

placed

was

research reactor.

a

all

few

a

the

minutes,

device

expectations.

volts

and

far

the life

because

there

30

Acting

and

thrust

rockets

needed

to

extended

Professor

reactor

operation in two

a

be

could

like

40

is

a

another example

Revel Miller Adds

V.

LOS

S.

ANGELES, Calif.—Dennis
and William D. Foote,

Dawson

—the thermocouple was

Jr. have been added to the staff of

at design

Revel

operated
efficiency for almost 12

hours before it

shut down and

was

dismantled for analysis.
When

this

polated

single cell

is

mous,

are

enor¬

scientists

Pidd

declared, "This
could be the device that changes
reactor

strument

We welcome

from

to

(Special to Jhk Financial Chronicle)

PASADENA, Calif. — John H.
Riegel,
Joseph
F.
Schultz
and

a

scientific

ated

Professor

the

White, Weld
20 BROAD STREET

&

Co.

government

Pidd

U-M

as

was
a

leave

on

consultant

to

Philadelphia




Boston

Los Angeles

San Francisco

Co.,

1001

East

Three With Bond & Share
(Special to The Financial Chronicle)

,

stance T.

Roberts have joined the

Marengo Str*eet.
Other

The

Scientists Involved

three-year

project

was

Atlas Adds to Staff

sponsored by the Atomic Energy
Commission at Los Alamos. Work¬

ing

with

Professor

itiators of the effort

Grover

Pidd

as

(Special to The Financial Chronicle)

both

of

and

in¬

LOS

George

R.

Salmi,

were

Ernest

W.

B.

ANGELES, Calif.—Albert
Gulbin, Asher Jagoda, Gerald

received

whom

their

Philosophy degrees from
University, and John R. Reitz,

Pond

Inc.,

Wilshire

6505

GROWING

Company

tiroes
California Water & Telephone Company

provides service to 141,800 telephones in

one

thermocouple

is

Southern California and is classed

contact, then cool¬
metal and heating the

The

Los

Alamos

couple is the result of

11th

thermo¬

a

Water service is

The

hundred

times

the

of earlier thermocouples.

experimental

and

Copies of

request

in

diameter and three-fourths of

containing

an

estimated

the Monterey

Peninsula, part of Los Angeles County

Report

available

on

on

and

portions of San Diego County.

size

iuiroVTbou?eo~urth
long

our

1958 Annual

empty frozen fruit

an

the

plasma

resembles\ in

shape

provided to

population of 200,000

elements produced, direct current
several

as

largest of the 4,000 Independent

Telephone Companies in the nation.

laboratory
observation, made last July, that
substituting ionized cesium gas
(plasma) for one of the metallic

inch

Fletcher

Profile of a

ent metals into

at

and

power

electricity by bringing two differ¬
ing

Morrison

have become affiliated with Atlas

a

a

an

uranium

>

PASADENA, Cal.—Philip Horo¬
witz, Donald B. Moore, and Con¬
staff of Bond & Share Co., 16 No.

project last semester.

support,

thermocouple

:..«aShkaco

&

(jenown means of producing

power
NEW YORK 5, N. Y.

Lile

Street.

in¬

reactor."

from

with

Green

a

he
explained, but the overall eco¬
nomic significance lies in the fact

other.

inquiries from public utility companies.

of

commercial reactor could

Basically,

the most complete

€30

Lile Co. Adds to Staff

practical source of
useful power, a goal that has been
sought since the invention of the

the

Co.,

members

Loren Simms have become affili-,

said.

the

Street,

extra¬

t<j) an entire reactor, the
developments
the Laooratory

&

South
the
Pacific Coast Stock Exchange.

implications of a successful plasma
thermocouple
to
future
atomic
energy

Miller

Spring

years.

yet compete with coal

well

among

basic

of how

t (Special to The Financial Chronicle 1

cur¬

amperes

that the known power reserves of

are

Dermison,

Significance

uranium exceed many, many
that of coal and oil.

community.

M.

research "in unexpected ways can
often turn to practical advantage."

Securities,

without

trading facilities

David

an

Boulevard.

Such

in the financial

:

Chairman of the U-M Department
of Physics, said the achievement

the

not

utility underwriting, distribution

be

'

produce power for
period of time.

Doctor of

research

a

Overall

and

could

technique also should ease
the
present
problem
of
data
transmission from satellites which,
because of their size, have power
units of very limited capacity. An
ounce or so of cesium gas provides
all
the
conversion
equipment

M.

in

White Weld's public

Hence,

space.

The

that

Securities

into

payload of rockets
increased measurably.

customarily is a three to
five year lag between science and
engineering. He added, however,

Public Utility

■

:

exceeded

short circuit

a

between

rent

Professor

use.

but the nuclear reactor in the

bines,

•

EXCHANGE

temperature

collector from

Enrico
STOCK

causes

such

technique, called a plasma
thermocouple, eliminates virtually

INCORPORATED

COAST

fission
have

to

The

Corporation

First California Company

PACIFIC

gas

large
electric current is produced and
is then transmitted by the gas to

all

UNDERWRITERS

by a
made

When the reactor is

this

put into

MEM8ERS:

uranium

a

electrified

uranium

hot.

Southern Nevada Power Co.

Southwest Gas

nuclear

a

surrounded

atomic

on,

in

thermocouple

Modestly calculated to produce
enough power to light an electric

3.8

energy release that it turns

California-Pacific Utilities Company

j

,

from cesium.

turned

laboratory-developed

V

U-M

the

superpowered flashlight battery—
with an open circuit voltage of

electric

process,

is obtained from

reactor

UTILITIES

.sub¬

Explains Process

'

The

time

earth; and

power

GROWING

powerful and
of electricity

West reactor at Los Alamos.

plasma

in

professor indicated
interplanetary space travel could
profit from the development in
that a few pounds of apparatus
could
replace many times that
weight of fuel now needed,, to

energy

You must build plants and

place them in operation

can

that

and

overcome

The

reactor, the neutron flux activities

uranium
fission
heating in the
compared with nuclear costs pro¬
center of the can, while the flow
jected for a similar period. During
Robert W. Pidd, professor of of reactor coolant around the out¬
will
be
available
to
mankind. this plant life span atomic power
physics
at
The
University
of side of the can drops the tempera¬
When this will happen is hard to cost will come down when fuel
Michigan, who played a prominent ture of the cesium plasma. The es¬
processing tech¬ role in this achievement said the sential requirements of a thermo¬
say. Dr. Teller, for example, now fabricating and
does not expect power for the niques are moved from the job
process would:
1
couple thus are met, and elec¬
consumer from thermonuclear fu¬ shop to the production
line.
Cut
by perhaps one-half the tricity is produced.
sion during the lifetime of many Atomic power then does not look
Professor Pidd said the "enor¬
present cost of building power
of us here today.
so "noncompetitive." Add to this
reactors;
mously simple" device was re¬
I want the continued help of
Pave the way for interplanetary search tested for the first time last
evaluation the intangibles of
this gfeat industry in furthering
space travel because of the pos¬
Friday, April 4, at the Omega
this nation's atomic power pro¬ training and of experience and
lems will

this, unlimited

U-M

arts degree from?
University in 1946,
science, and Ph. D.
1947 and. 1951, re¬

of

State

spectively.

of

core

bachelor

from

by cesium gas, when the assembly
lowered

of

doctor

and

former -Detroiter

a

and master of

carbide. This is suspended in the
center of the cell and surrounded

is

science

Salmi,

Wayne

a

conversion

of

(16773 Biltmore Ave.) now makes
his home in Los Alamos. He won

a research reactor in two
commercial reactor may take, how¬
three to five years because of the lag between science
and engineering.

Construction of

first

nuclear

tric

master

philosophy degrees from the U-M
in
1947
and
1950, respectively.
His home is Silver Springs. Md.

expected to be in operation in

years.

idea of atomic power because on a

unwarranted. The scientific and pro forma first-year basis it looks
engineering problems are l'ar more uneconomic. Conventional power
difficult than once thought. But costs projected for 25 years with

from fission. The

power

ing and operation of a nuclear
plant. Too often the executive or
the
economist
who
admittedly

development, we see power from must work with cost figures
thermonuclear fusion.-1 think all whittled down to a mill, or even
agree here that the optimism once a fraction of a mill, rejects the

expressed over this possibility was

science degree from the Univer¬
sity of Washington. He gained his

unexpected basic research development is said to pave the
way for drastically cheaper conversion of nuclear reactor
energy directly into electricity.
This new technique is ex¬
pected to eliminate turbines, boilers, gas condensers and
dynamos, such as at Shipping Port, Pa., and Enrico Fermi
Reactor near Monroe, Mich., in the production of electric

recognize that the only solid
knowledge of value to you and to

be¬
in general will
non-breeders obsolete.

forward. However, we do not

Dr. Grover, group leader of the
project, received his bachelor of

An

Development

Thursday, April 16, 1959

professor of physics at Case Insti¬
tute of Technology, Cleveland.
"

Breakthrough in Direct Conversion
Of Nuclear Energy into Electricity

Government's Role in Nnclear

.-.

.

-

*

# m

0

lilt ©mid Water & Telephone Company
300 MONTGOMERY STREET

•

SAN FRANCISCO

4, CALIFORNIA

^

-

Volume

Number 5838

189

Continued

from

page

.

■

political obstructionism.
political-economic en¬
vironment of the times severely
limits what an industry as a whole
can
accomplish.
Give but one
thought to what* transportation
genius could do for this country

Electric
but

regulation
the

comes

to

senior

of

and

use

even

more

highest priority capi¬
tal, that which is reflected by
depreciation reserves? in only a
few jurisdictions is the equity and
economy of giving the risk re¬
ward to those who take the risk

When the depreciation
prepayment reserve equals the
equilibrium 50%, the stock capital
takes all of the risk for less than
half the risk compensation. In¬
respected.

burdened will be discov¬

come so

ered to be

more

hazardous income

and should not command the mar¬
ket confidence of

which

claim

can

flow of income

a

it

what

earns.

cost

something but
they cost.
More

are

worth what

Capital Needed

The fact that

utility must ex¬
pand to meet its legal obligation
will

in

the

a

term become

near

as never

They are (1) the impending ex¬
plosive growth in population and
(2) the accelerated response of
more intensive
use of electricity
as the rise in the standard of liv¬

bne

ducted for rate base purposes rep¬

From

capital

resent the most costly

.utility obtains.
To

return

*

to

theme,

since capital is

such an important
factor in the industry- the getting
of the capital is a most important
business function and the assured

ability to- get it when needed is
the great intangible asset of a go¬
ing utility enterprise. That asset
deserves respect and careful pro¬
tection by both enterprise man¬
agement and regulatory authority.
Credit

"what

has

it."

need

able

defined

been

got

you

But

a

as

when you don't
utility has to be

to

get capital at any time.
of the continuing
necessity to be able to command
capital on favorable terms is not
commonly appreciated by nonutility businessmen and too often
also not by regulatory authorities.

The full impact

assured-capacity to
capital when needed is the
great
econcu-nic reserve against
contingencies on a par with re¬
serve
generating capacity in the
technological
area.
The
unin¬
formed or unappreciative need to
be told how a utility must expand
The

reserve

get

meet

to
1

which it

ket

exclusive

an

fact is
I

the demand

of the

mar-

fit to occupy as
service agency, in

sees

political climate, or if
just one change were
made, the removal of dual regu¬

lation, regulation by both public
authority and competition. Elim¬
inate one form of regulation, and
would quickly have a renais¬
sance
of
transport economy in

we

place of what

gressively

is

essential

an

business

requisite

A

capital

subsistence

obviously

will

and

a

are

as

much the economic assur¬

ance

of the

population,
interest com¬

be- desired

bases

two

and

economical

or

for

these

unprecedented

an

expansion of electrical capacity
consumption may again make

and

the

the

of

obtainment

needed

-

capacity to

is

serve as

pro¬

least

bed of

a

with

is

it

roses.

necessary

general political

transport

No longer at
to meet the

muck-raking of

nineteen-thirties

the

and

its

dis¬

turbance of investor confidence.
Threat

of

Public

Power

While at the moment the prob¬
of the general political en¬

lems

vironment
than for

less

seem

time

some

or

disturbing
localized at

socialization

has now long been
technologically obsolete; based on
water power it appears to have
almost

jected

its

run

but

course

pro¬

through a national politi¬
controlled
network,
all
undone and effective

cally

could yet be

The

importance of the impend¬
ing bulge in growth for our pur¬
poses is the demand for capital
and the new financing which it
will

generate. In one sense the
total responsibility will be but the
sum

of the individual

responsibil¬

ities of each and every enterprise

pressed to expand and to find the
money. In another sense there is
a
collective
responsibility since
what

separate enterprises

able

to

do

is

conditioned

may

by

be

the

general regard, reputation and
standing of the
industry as a
whole.

In

an even

service,

transcendent

his¬

significance of "the grid"
English electric¬
ity socialization is pot a happy
but possibly a warning recollec¬
tion.

Barring a return visit of na¬
tional socialism in the U. S., the
large over-all environment would
seem
to
justify investor confi¬

timism

command

doesn't

eternal

of

carries

that

man

that

six

or

us

On What Terms?

through.
The

ford

is

fact

6%

a

of

course

return

turn of six fifty-cent
investment
dollars

that

however

also

is

of

(2) In what form?
(3)
From
where

is

only a 3% return and
thus is from the 6% level a 50%

vulnerable to in¬

as

a

bond

public

borrowing have been asserted to

policy discriminating against util¬
ity equities in this important re¬
spect.

will

set

cart before the horse in
order once and for all. Man
is a two-legged animal but not all
two-legged animals are men.
A
fair return gives command over
capital but additional capital can
be obtained even though the re¬

logical

proper

Most fore¬

records.

net

prove that a fair return was, being
earned. Let's put that awful il¬

capital

need for additional

The

casts will

probably fall short.. Re¬
sponsive as this industry is in the

first

place to population growth,

the demand will further be

lot of fuzzy

a

purveyed
of the abil¬
ity to get capital. The highest
court and many lower level re¬
peaters have held the capacity to
command capital as a standard of
a
fair rate of return or a fair
return. Even the ability to borrow
and evidence of actual successful

discover that he is in fact in most
if he invested in

been

n o n sens e

about the significance

great expansion ahead. Frank¬
ly, what would happen if the in¬
vestor in utility equities should

as

has

There

economic

the

flation

multi¬

plied by the rise in the standard
of living, more customers with
more
uses
and particularly the
heavy uses. Increased capacity at

turn earned is less

higher prices, replacement at
higher prices without the benefit
of economic depreciation provi¬

than fair and

capital

ment,
and

maturities

some

withdrawals

the

bankers'

if less than the present aver¬

dollar

age

cost of

capital

or

an

debt
cost of

of the past cost of

average

and the present
equity whatever that mug-wump
statistic may mean. The simple
historical

fact

well

as

the

as

readily deducible fact is that capi¬
tal, and additional capital,, in the
amounts required can be obtained

in bonds

of reserves for

higher taxes after the deferral
period, will all add to a magnifi¬
cent record-breaking total of re¬
quired financing, all of which
must be really magnificent music
to

even

and continued pressure for
labor-saving capital equip¬

sion,
more

from

and

whom?

liquidation of the investor's sav¬
ings. The renewed threat of in¬
can prove to be the major
obstacle to successful financing of

jurisdictions

condi¬

On what terms and

tions?

on an

hundred-cent

100

industry

(x)

re¬

a

dollars

question is not will

be able to get the
capital to finance its yet greatest
period of growth but rather,
the

an invest¬
dollars. The

on

ment of 100 fifty-cent

fact

The serious

from the

,

money

time

any

realistically
stances

ears.

even

market at almost

under almost

and

any

conceivable -circum¬
though the enterprise

is earning less than a fair rate of
return. The railroad

Mere magnitudes, record-break¬
ing large sums, need not as such
however,, gravely concern this in¬
dustry.
There is no reason to
doubt at all that the capital will

made

substantial

industry has

additional

in¬

vestments and obtained additional

Continued

on

page

dence in considerable depth. Ever

with

us

however is the threat of

further inflation

with regulatory
to

bookkeeping

electric

ters

and

social interest there

industry as a whole to turn
top performance in the face

an

an

The

torical

reliable

and confidence against the
general reputation of such a class
of enterprise. It is also difficult

of
V
'■

achieved.

in the history of

sense

also develops therefore an over-all

a

socialization

and

larger

adequate

social responsibility for peace and
for defense;
At this level of the

in

is

which, combined
policies dedicated
bigotries instead

A

Qrowing ViMie Utility

of economic realities in such mat¬

electric service, has become a top

for

that

eternal and maybe
congenital op¬

to spring

it

and that there is in fact a

concern.
~

seem

forthcoming and
will be able to
what
it needs. If it
can't, who will?

that this industry

investment.

added

flation

«

comparison

By
try is

capital, the industry's number one

faith

borrowing - capacity
buffer margin of earnings

reserve

capital

not

for
meet

such needs and standards. Stand¬

by

add

wage

fair or foul.

bare

will

social, public and, political respon¬
sibility. It is difficult for a single
enterprise in an industry to rise
to a unique command of investor

that has to be able to take it as it
comes,

we

only gets

now

worse.

least, yet the seeds of nationali¬
zation and socialization, in sub¬
pounds so that our far-sighted
stance if not in form, are still with
philosophers ■ are anticipating
a
us.
Come into my network, gov¬
crowded world, a crowded nation
ern mentally-owned and intercon¬
and even a shortage of space as
nected, says the political spider to
such.
the fly and that would as always
Either development alone would be the end'of the
enterprising fly.
test the electric industry's capac¬ Socialization
periodically emerges
ity to command capital. With an as a disturbing threat to the in¬
impact more coincident than may vestor confidence. At a local level

favorable

are

not, whether the money market
is tight or easy, whether the addi¬
tional busfhess appears attractive¬
ly profitable or not. Good utility
credit is no fair-weather craft; it

1970

to

1958

another 30 million and

legally obligated to expand

whether conditions
or

growing at the rate of
every
11 : seconds.

are

person

like

'

main

our

any

We

but given

revised

ular, gains momentum.

preciation reservations when de¬

were

for instance

ing, and electric living in partic¬

the level of reasonable
assurance, assets generated by de¬

the

the position of the electric indus¬

before.

Beyond

.

of

significance. Two factors
are converging to impose a need
for more capital for the electric
greater

industry,

fifty-cent dollars of return do af¬

a

it stand-by physical capacity. Both

when

or

in short order if it

Utility Financing

it won't recur and

Thus

29

be available and

impair the new
Hope does

work and

3

Bases for Successful Future

under

(1753)

The Commercial and Financial Chronicle

.

.

adverse institutional frame•

as

rate

a

base, depreciation
return, docs threaten

rate of

California-Pacific Utilities Company operates electric,

further liquidation of investments
in the electric industry and con¬
are

Nevada, Idaho, Wyoming, Utah and Arizona. Since

special and peculiar victims of in¬
flation.
It was probably general
investor

unawareness

of

the

1950, the population of these seven states has been

esr

growing

pecially unfair impact of inflation
utility equities and the "creep¬
ing" rather than "explosive" char¬

as a

on

acter of

investor

our

water and telephone services, one or more of which

is provided in 82 communities in California, Oregon,

other industries
not by law made the

favors

versely
which

gas,

more

than twice

as

fast

as

the United States

whole, according to Census Bureau estimates.

inflation that retained

confidence.

It

was

that

and

probably the hope and belief
that the loss was absorbed by the
unfortunate past investor and that

•

Q C* C

V

A 25 YEAR RISING CURVE

r: r" K-. -'.

REVENUES

Gross
in

revenues

of California Water Service Company

1958 amounted to

$15,584,000,

a

3.5% increase

Vil'JONS Of

DOi.if-

■VAmmxmmwsmmm

over

the previous year.

J!
100

ife&KRfffo

cm
am

400

This marked the 25th consecutive

year

of

gross rev-

NET

iNCome

mmmmmmmmmmiwmmmmmwm
100

enue

increases, reflecting in 1958 the addition of 4,610

customers to

the Company's 28 water systems.

new

1940

1949

1950

Between 1948 and 1958,

1951

1952

1953

1954

1955

1956

1950

1957

number of customers increased from _:

37,237 to 68,333; total revenues from $4,397,878 to $10,491,992;
and net income

CALIFORNIA WATER SERVICE COMPANY




374 West Santa Clara Street

San Jose, California

creases

of 84

per cent

and 125 per cent

,

/

from $392211 to $882J?45; representing in¬

in customers, 139

per cent

in revenues,

in earnings.

..

...

California-Pacific Utilities Company
4 0 5

MONTGOMERY

STREET

•

SAN

FRANCISCO

4.

C A L i F 0 c l<

30

30

Continued

from

page

29

1946

Bases for Successful Future
Electric

fair rate of return.

a

recognize that credit is the

capacity to command capital but
credit and good credit are rather
different and possibly quite dif¬
credit

Good

ferent.

the

means

command capital on
favorable terms but favorable is a
relative term. A regulated utility

capacity

to

enterprise has good credit when
it can obtain the capital, needed in
the form and

impair

not

do

the terms which

on

the

integrity and

security of the previously invested

capital.
Bases of Credit
The basis of

credit
set

by

the

is

J

credit, that is good
standards

have

we

prospective flow of
incpme sufficient in quantity and
reliably regular to pay the going
wages of capital as of the time.
up,

of

One

a

burdens

the

reputation, financial

of

as

good
otherwise,
a

is

the compulsion to live up to
such a reputation and to perform
in line with expectations. Investor

experience and

3.

through regulation. It is
legal basis of future public
utility income that we find our
greatest reason for concern.

much effort

4.

to

as

achieve such

legal basis of income is
moreover a relatively volatile and

4

the

common

use

earn

a

2

4

extent

feasible

by virtue of the
technical efficiency and economy
of the

service rendered.

There

•

say

here

strength
electric

that would

of

add

the

position of the
industry in its technical

dimensions. Technical

superiority,

however, is not sufficient by it¬
self. The service, its manner of
production
and
rendition
must
also be

Here

on

the

also

electric

solid economic basis.

a

foundations of the

utility

industry

ob¬

are

viously
a

very solid, disclosing only
few cracks here and there which

are

far

significant only

probably

they

as

so

The
tremendous
economic
expansion
of the
service achieved by
the
electric utility industry at prices
which
are
generally far below
get

may

worse.

what the market would be willing
to

the

which

nomic

able

is

and

pay,

dicates
tection

wide

causes

to

pay,

margin of

exists

against

of credit

in¬
pro¬
eco¬

impairmerit

and thus the capacity to command

capital.
There
probably
is
no
significant element in the con¬
temporary
the

standard

American

fords

such

of

people

living of
which af¬

tremendous

a

2 4

nical

economic

language,

means

bargain prices.

income also necessarily de¬
pends and which, unfortunately, is
not as solidly assured as is the
ity

technical

or
the economic basis.
We refer, of course,
obviously to
the legal basis for the

utility

to

which

capital

must

yet if the

compensation.
how technically

Thus,

no

efficient,

his

matter
or

how

economically sound the basis of
utility income, it will yet be no
better

is

adequate or assured than
permitted
under
the
return
or

formula

imposed

by

public




au¬

17.84

2 4

23.11

22.38

16.39

17.82

22.35

14.54

14.16

15.21'

16.53

20.73

11.77

11.46

12.31

13.38

9.89

10.62

11.54

9.91

10.77

22.93 t

18.64

21.87

17.75
n. 47

22.01
20.41

16.78

16.53

16.40

13.33

14.48

14,26

14.15

11.50

13.51

13.30

13.20

10.73

13.71

13.50

13.40

10.90

9.66

9.61

9.4A

7.67

7.33

7.28

5.92

7.03

10.93

6.97

,

147.32

Line

2

4

2 4

7.70

5.67
6.32

7.78

4.90

132.09

Line

170.38

11.35 X

13.91 Z

16.45

Z

15.37 Z

19.18 Z

18.30 X

17.62 Z

13.90*

10.36 Z

(0
Weighted average

14.63 X

15.78 t

13.52 Z

13.05 7.

14.04 Z

17.00 Z

13.96 Z

15.21 Z

11.60 Z

7.88 Z

Average

12.44 Z

Z

12.61 *

3)

lor each year (line
price to. fourth quarter ol

5. Ratio ol dtvldende
Market

to

(Una 1) :

of purchaee

year

Line

3 I
3

i

3

Line

7.06

50.70

Line

i'

5.34

-V,

9.49

13.13 Z

13.15

8.88

9.07

9.88

11.86

12.52

12.03

9.05

12.54

9.24

9.04

8.87

9.06

9.87

11.84

12,50

12.52

12.0L

8.38

11.62

11.14

8.56

7.07

6.55

47.03

7.41 7.

6,56

9.89 7.
9.23

6.68 Z

6.55

5.60 Z

46.96

i

6.40 7.

i 44.79

Line

9.02

9.51 Z

9.51 Z

7.

Line

3

i

3

I

Line

3

1

i

i

10.99

6.66

6.80

7.41

8.89

9.39

9.40

5.74

5.87

6.39

7.67

8.10

8.11

7.78

5.47

5.96

7.16

7.56

7.57

7.26

6.05

7.27

7.67

7.69

7.37

5.12

5.40

5.41

5.19

3.95

4.17

4.17

4.00

77.81

Line

9.15

4.26

72.60

8.40

5.36

62.63

Line

8.22

11.60

5.56

3

i

6.79

6.93

5.#5

76.64
108.81

3

i

141.14

may

3

1

147.32

Line

3

1

132.09

as

yet be of little import.. Ev^n
the Supreme Court of the Unit¬
States is the final faculty of

Line

Line

3

4

170.38

ed

economics,
regulatory
law and
procedure determine utility in¬
come.
Public
utility
capital is

-

6.

with¬

57.7 7.

Retained earnlnge

etock

(

1)

at

(11)

(

and

yaar

(11)

-

34.08

$ 31.67

$ 42.40

32.45

$100 ol book equity
cod (line 6. 1)
lor year (line 8. 11)
'' 1

average

36.38

40.54

15.71

( 1)

at

(11)

$

30,82

average

$

15.61

$

.$11.45

$ 50.39

44.76

48.76

$

15.57

*

19.32

16.39

\

$

18.18

at

$ 13.39

13.74

13.80

CuMulatlve

retained

done their job, the
managers
have
done

gineers have
business

theirs, maybe it's time now that
the lawyers
did theirs and ob¬
tained for this industry what is in
fact realistically and meaningfully
a fair wage for the capital so efl'iciently and productively em¬
ployed. Possibly, however, before
we can
expect this miracle from
the legal talent it may be neces¬

Source:

the

tears of rate

the

ically

the

on

ployed

this

has

board

wage

case

why

reason

sheer

toil

not

7.70

7.40

7.29

8.15

8.47

8.19

9.70

8.72

7.98

7.62

7.65

8.44

8.35

7.87

8121,62

$119.58

$132.89

$144.08

$143.69

$133.08

$170.92

5206.53

$203.45

$170.77

213.85

209.32

176.40

129.27

144.71

total

-

ol

number

Z

Industrials, Unas 1, 2,

outstanding

'

(hares

.;/ •'

Weighted by number of years

n.a,

21.5 X

33.3 Z

27.4 t

3 and 8. 1

Not

37.4 Z

em¬

efficiently and econom¬
the past ten years.

so

over

;

' ■'

\

the

higher

even

not earned

turn

levels
the

by

are

price

1955^ 1956, 1957 and 1958 respectively).

on

level

at

rates
the

has

of

re¬

Rate

Before

property and plant.

cost of the

April

INVESTOR

EXPERIENCE

of

capital and
to

common

the

of

the income, available

bit of

by the past lower interest
capital. We can do a
figuring on that point. The

1. Market

2.

in

Institute

1952

1953

1254

1255

$46.02

$49.26

$48.71

(on

earning*

a

2.44

2.62

2.78

1.85

1.90

1.92

2.08

7.34 Z

8.15 Z

7.59 Z

8.15 Z

8.87

9.85

9.17

9.85

10.45

8.81

9.78

9.10

9.78

10.37*"'

7.85

8.71

8.11

8.71

9.25

7.98

8.57

9.09

7.32

7.86

8.34

7.05

7.48

1949

1950

$26.61

$26.80

$30.07

$30.57

2.16

2.22

2.36

2.62

1.58

1.62

1.68

6.72 Z

6.91
8.34
8.28

2.19

dividends***

fourth
a

quarter of

market

Indicated

(on
1.47

for each ycar(llne 2)

2

Line

2

Line

2

26.80

2

-

30.07

2

4

30.57

2

•

33.35

Line

2

4

37.15

Line 2

1

-

8.57

12.59

12.81

13.64

11.96

12.50

12.72

13.54

1

9.78

10.68

11.14

11.34

12.07

•

9.62

10 .-50

10.96

11.15

11.87

8.82

9.,63

10.04

10.22

10.88

7.91

8.64

9.02

9.18

9.77

7.48

8.17

8.52

8.68

9.24

c

6.98

7.28

7.41

7.89

•

7.07

4

2 4

lor

dividends

market

to

prices.La

each year

Z /.

7.84 Z

7.42 Z

8.21

9.01 Z

8.22 Z

9.66

4

3 4

4

3

5.76

Z

4

3

4

•

7.87

X.

3

4

'

9.21

9.51

8.E1

9.14

9.44

7.52

7.85

8.15

8.41

6.28

6.80

6,97

7.39

7.72

8.01

8.28

5.76

6.24

6.39

6.78

7.08

7.35

7.59

5.60

5.73

6.08

6.35

6.59

6.81

5.42

5.75

6.01

6.23

6.44

4.91

5.13

5.32

5.50

4.79

4.97

5.14

5.03

5.19

6.15

X

7.16
6.39

7.22

7.14

6.22

46.02

-

Z

8.87

8.43

7.06

7.09

6.32

39.30

3

7.34

8.49

7.95

6.90

49.26

6.05

30.57

Line

3 4

5.70

48.70

3 4

i

48.71

3 4

Line

63.21

5.72 Z

5,43 Z

73.1 Z

67.1 X

(line 2

.72

line 3)

emulative

( 1)

at

average

year

-

$

.58

year

average

at year
average

6.89

7.00

X

7.29 Z

7.48 Z

74.8 Z

72.4 Z

70.4 Z

.

70.4 Z

t

6.88 X

7.63 X

Z

7.74 *

.60

$

$

.66

1.30

1.90

$ 22.11
22.12

22.21

9.76

$ 10.04

73.3 Z
$

.54
3.89

24.97

$ 27.20

23.64

$ 22.31

21.94

$

3.35

2.58

$ 22.14

.77

*

26.08

71.8 Z

»9

.70
5.29

4.59

6.10

$

.96

8.04

7.05

9.00

38.00

69.7*
$

1.10

$ 40.02

10.10

__

5 21.74

lor year

$100 of book equity
and (line 8. 1)
for yeer (lint 8. 11)

(line 3)

$

77.9 t

7W 1

71.2 Z

equity per share

end

(line 2)

73,0 X

**'

*

earnlnge

stock book

6.80

Z

s

Weighted average

lor year

6 .70

6.53 X

6.61 Z

6.28 X

6.40 Z

6.36 Z

5.85 7.

pay-out ratio

i line 2)

( 1)

,'

*.00
A,57 Z

<<=>

Indicated dividend

'

'

5.20

5.03

Average

(11)

Z

7.03

8.0C

7.76

6.95

6.27

37.15

3

Line

( 1)

7.62

6.63 Z

7.82

6.92

6.31

/

33.35

3 4

Line

(11)

Z

6.47 Z

5.97

Z

5.23

6.09

5.59

3

5.91

Z

5.04 Z

Z

30.07

Line

Dividends

x'

4.84

4.92

6.04

Line

at

11.10

4.59

4.57 Z

5.94

Line

I)

X

4.63

26.80

Line

(

Z

10.62

5.17

26.61

Line

Earnings

9.59

10.62 Z

(line 3)

$32.14

3

Line

Common

9,65 Z

Z

5.29

3 4

Line

Line

Z

9.86 X

9.52 Z
10.36

9.02 Z

8.84 Z

8,57 Z

Z

fourth quarter of j

Line

Retained

J

7.45

(line 1):

of purchase

(line 3

'

77.45
5.74

6.81

(e)

year

.

63.21

Weighted average

ot

"7.00
7.00

Average

5. Ratio

)

'7.37

6.92

6.88

.

48.70

Line

6.80

6.52 V

48.71

2

:

X

12.06

10.97

49.26

2

Line

11.29

Z

11.05
■<

46.02

Line

10.61

10.42 X

9.99 Z

9.15 Z

8.65 Z

39.30

Line 2 4
Line 2 4

',

,

Z

6.39

26.61

Line

>

4.81 Z

$32.14
-

Line

Line

.

3.21

In

(line 1):

Line

).

year

;

$48.70

prices.in fourth quarter of

of purchase

yeer

Indicated

ahare basis)

par

A. Ratio of earnings
to

as

133.35:

share

per

basis)

1958

12^

$39.30

1948

of

quarter

year

»

Annual

3. Annual

1959

$37.15

1951

1947

8.12

fourth

In

price

Indicated

8,

$

$

$

31.04

...

28.75
27.98

$

10.07

$

10.04

9.85

»

$

$

10.58

10.49

$

$

$

8.96

$

9.11

6.70

$

$

.

8.79

$

34.94

$

32.24

6.37

9.3®

9.36

9.36

11.08

10.63

8.97

33.43

29.90

per

34.18

$

9.19

$

$

6.47

9.12

36.47

>

$

$

39.01

8.82

6.21

9.39

$

9.19

8.52
8.74

$100 of book equity

per

$

end (line 8. 1)
for year

6.76

$

7.14

S

$

7.33

7.53

$

7.41

'

$

6.99

$

6.68

7.20

price (line 1) per $100 of book equity
( 1) at year end (line 8. 1)

7.56

7.83

7.29

$120.19

$121.21

$134.78

$122.43

$122.61

$129.22

121.16

135.39

129.31

127.88

6.12

6.96

6.61

6.47

6.28

$126.61

$137.66

$140.98

$128.18

$121.69

131.44

132.77

6.61

142.74

141.12

133.56

124.84

6.86

121.29

(line 8. 11)

7.32

$

Market

(11)

ae

average

$147.84

for year (line 8. 11)

,

(line 7, 11)

percent ol book equity at

year

end (line 8,

__

1)

5.9 X

8.6

11.6

Z

Z

13.4 Z

14.3 Z

16.0

18.2

17.0 Z

Z

X

20.2 Z

21.2 Z

22.5

Z

Sources:

Moody's Investors Service

-

Public Utilities, lines 1, 2. 3 and 8. 1 as computed and reported by source.

.

interest

rate

formal funded debt of the class

A & B

.

Edison Electric

the

stock capital is subsi¬

average * contractual
on

„

New York University

1958.

-

532.14

(a)

Cusuletlve retained earnings

cost

the Future

FhJ).

MOODY'S TWENTY-FOUR FURL1C UTILITIES

OF

1946

1946

Even in the

present

WITH COMMON STOCKS

.

capital structure the return is not
reflective

accoaspany

Doreu

the Convention of

V

_j

obviously subsidized by

lower past dollar

B.

frolessor of Economics,

•

'

average

the enterprise.

to

Requisites for Successful Financing In
Herbert

(11)

the

even

allowed

investment

"

■■

.

from year of purchase to the yeer of the determination (1954,

available.

"

incremental

55.4 Z

outstanding at year end, adjusted for stock splits and stock dividends.

Prepared

(11)

The

53.1 Z

49.7 Z

and reported oy source.

as computed

fair

a

45.6 Z

43.9 Z

40.3 Z

for all

I.;; -'

i

and

it has

179.50

137.18

148.86

■148.89

139.92

125.06

shares.of each company, proportionate to the mmber of shares outstanding for that company at year end to
one hundred and twanty-flvc companies, after adjustment of number of shares for stock splits end

purchases of that number p£

Assuming

«tock dividends.

across

earned

capital

7.61

8.43

earnings and dividends are weighted by the number ol shares

prices,

(O

litigation, is the
industry

13.72

13.28

9.21

12.8

Market

(b)

to create an environment of
understanding and public sym¬

tribulations,

14.71

(line 7, 11)

earnings

Moody'a Investors Service

(a)

*•'

sary

pathy to economic realism in reg¬
ulation, to results that are eco¬
nomically fair rather than merely
the arithmetic products of book¬
keeping conventions. Maybe, also,
it
is
not
even
by
implication
chargeable to the lawyers; possi¬
bly chicken-hearted management,
seeking to avoid the trials and

15.92

13.82

$

$137.79

this

to serve all who
at reasonable rates. The en¬

$ 14.29

7.83

;

expand and

15.38

$

7.96

1)

(line 8.

end

year

74.88

70.38

of book equity at

percent

45,52

77.35

$

66.00

13.16

$

72.41

$

68.34

60.62

13.26

$

$ 63.66

55.87

7.37

$

6.39

year

ae

12.

57.59

$

2.70

42.82

38.44

33.97

29.03

$

4.38

8.12

(Una 8. 11)

lor yeer

a

to

*

67.7 %

? 57.4 Z

$

4.47

$

4.94

7.73

$

(line 1) per $100 of book equity
end (line 8. 1)
(11) average lor yeer (line 8. 11)
1)

25.29

54.15

$

$

3.74

52.27

$

15.11

18.88

16.28

$

3.45

$

21.84

14.63

$

17.93

11. Market price

(

3.01

$100 of book equity

per

end (line 8. I)

yeer

47.13

$

18.83

per

(line 3)

Dlvldende

5

y. v

for year

(line 2)

1) at year

being

industry's capacity to com¬
mand that capital which it will
need to meet its public obligation

56.8 Z

53,0 X

55.4 Z

55.3 Z

13.90

10.10 X

10,40 Z

f

,7.68 *

8.39 Z

8.73 Z

Z

10.17 Z

8.74 Z

58.1 X

$

3.12

$

4.11

11.60

book equity pee shafe

average

9. Earning#

10.

8.32

line J)

-

$

3.28

3.95

cumulative

Coomori

$

2.81

4.37

for year (line 2

(11)
8.

return to recognize the

we

full meaning and import of

51.4 Z

43.8 Z

55.8 x

-7

8.72

7.70 Z

7.47 Z

7.58 Z

Z

(c)

ratio

(Una J 4 line.2)..
7.

medium term and in any case once
"devoted" it cannot legally

8.10

8.73 Z

7.02 Z

6.66 Z

5.47 I

'

( 1)

capital, it can't economi¬
withdraw in any short or

3.84
4.28

3.32

dividend pay-out

Indicated

4.00
4.46

Weighted average

,

•

3.99

4.40 %

captive

cally

X

17.78

21.84

20.26

Z

22.04

7.45

16.67

10.Oh

3

dized

for

16.42

15.27

9.23

Line

cost of debt

look

17.21

15.29

15.67

10.15

Line

supplier of

the

16.03 Z

15.69

17.97

13.49

technology and superior economy

prospective

income

16.45 Z

17.99

14.03
13.02

economic

quickly erode,

achieved

There is, however, a third basis
on which the flow of electric util¬

18.87 Z

14.05

,

141.14

by the market's ''best bargain" to
be
reflected
in a compensatory
financial flow of return, superior

con¬

siders' surplus, that, in less tech¬

14.74 Z

14.97

108.81

Line

legal standards do not allow the
efficiencies of a superb technology
and the economic margins offered

come

could
to the

5.65

income production does

basis for

.

is nothing that we

5.89

23.47 Z

Z

15.70 Z

76.64

Line

unpredictable determinant of re¬
Technologies do not so radi¬

18.71

Z

11.88 Z

14.95

of

fair return if and to the

5.88

77.81

4

legally be allowed to earn as com¬
pared with what you could earn.
v
(2) The basis in the economy of Thus the regulatory environment,
the
use
of
centrally
produced its conventions and proceduralism,
electricity and
will be the final determinants of
to

8.35

(line 2)
of

72.60

for its distribution.

(3) The basis in law of the right

10.27

4.17

62.63

-

regulated industry, namely, that
is not how efficient you are or
(1) The basis in the technical how economic
you are that de¬
efficiency and superiority of cen¬ termines the
adequacy of a flow
tral station production of
elec¬ of income but how much you willand

4.25

50.70

-

2

Line 2

turn.

Thus

common means

4.34

47.03

it

tricity

3.32

$170.38

10.35

11.33

4

Line

a

Electric utility income has three
obvious bases:

3.08

7.88 Z

Line 2

1-lne

significant

reputation.

2.51

$132.09

8.38

7.18

1.97

7.71

$77.81

7.37

46.96

Line 2

The

so

$72.60

8.45

t $ 44.78

2

1-lne

Line 2

not

$62.63

6.60

(line I):

of purchase

Line 2

the

$50.70

7.03

$147.32

$141.14

$108.81

price in fourth quarter

Market

year

Line 2

and

$47.03

5.32

$76.64

Indicated In

aa

lor each year

Ratio of earnings

of Return

change,

$46.96

3,53

1958

1957

1955

1954

1952

1952

,

ahare' baala) -

par

to

in the

cally

19£1

1950

$44.79

ahare

a per

ol Indicated year (on

fourth quarter

investor expecta¬

therefore,

are,

(on

dividend/**

Annual

a

draw. It has no economic bargain¬
ing power as have rapid capital
standards both of which must be turnover
enterprises.
Past
in¬
met by the flow of future income. vested
utility capital is wholly de¬
The mighty so often fall harder
pendent on the meaning that the
than the lowly because so much
adjective "fair" is given in the
more
is
expected of them. To phrase "fair return" and what is
project and defend a good finan¬ "fair" is what public authority
cial reputation requires almost as thinks is fair.
tions

earnlnge***

Annual

1958

-

1949

1948

1947

Thursday, April 16, 1959

.

.

.

MOODY'S 125 UCUSTR1ALS

baa la)

thority

Rate

of

In fourth quarter

indicated year

j

Utility Financing

capital. It has refinanced substan¬
tial sums yet I can't recall when

priced

1. Market

2.

it last earned

EXPERIENCE WITH COttSON STOCKS OF

INVESTOR

1946

We

Financial Chronicle

The Commercial and

(1754)

industry in 1957

1958,

not

was

earnings and dividends are weighted by the nuaber ol

ahatee outstanding at year end, adjusted for stock splits snd stock dividends,

(a)

Market prices,

(b)

Assuming purchases of that ntmber of shares of each company, proportionate to the nuaber of shares outstanding for that company at year end
total number of outstanding shares for all twenty-four companies, after adjustment of number of shares for stock splits and stock dividends.

(c)

Weighted by number of years from year of purchase to the yeer of the

n.a,

Not

available.

(

3.1%;

available, but prob¬

Prepared to accompany

Requisites
,

lor Successful Financing In the Future

Herbert B. Dorau Ph.D.

„

Prolesaor

ably 3.2%.

If the current

of

effec¬
Before

tive cost of high

quality debt

cap-

to

determination (1954, 1955, 1956, 1957 and 1958 respectively),

the Convention of

April 8,

Ecooomlcs, New York

the

1959

Edison

Electric

University

Institute

Number 5838

189

Volume

.

Commercial and

.

.

Chronicle
The

(1755)
\

of 4.4%

ital

value.

substituted for

were

the

As

forth

set

in

the

data,

market

price (per constant
share) per $100 of book equity
never
again reached the $147.84
of 1946. In fact the price for 1947
of $120.19 was nearly the same as
$121.69 for 1958. In fact the aver¬
age price per constant size share

3.2%, the income available to the
common equity would be reduced
about 18% before income tax ef¬
fects.
We could go further and

give effect to the difference be¬
tween the past contractual rates
on preferred stock capital and the
near
5% rate reflecting current
cost.
Altogether it is seen that
even as rates
and the return on

in

1957

eight preceding years as
substantially below 1946.
Dividends

dollar cost of additional
capital in property and plant are
subsidized by
the past "lowernumber-of-larger-dollar" cost so
also is the return earned by en¬

the high

equity

per $100,00 of book
$6.12 in 1957 and this

were

gest that

enterprise obtain com¬
mon
stock
capital
when
the
getting is good and build up a
borrowing
capacity reserve by

reducing debt ratios at such times.
Today would seem to be the ap¬
pointed time. Whether the ap¬
for the pointed time will last long enough
well as for you—all "to ready that stock

than

lower

was

fashioned financial standards sug¬

the lowest for the period un¬
der review.

was

offering" I don't know. For my
money the turn is long overdo. If

lower in 1957

and

year

anticipate the

all

$10.04,

this

of

for

course

years 1948-1950 since which
period they have been declining
except for a slight one-year re¬
versal of trend in 1955 at $9.19.
J

common
stock income
regulation to recognize
that past cost of contractual cap¬

for

-

ital

has

rate

of

cept

as

no

it

current

place

proper

in

fair

determination

return

cumulative

retained

earn¬

share amounted to $10.10

per

in

1958, $9.00 by the end of 1957.
The increase in book equity from
1946-1957 was $18.28.
Thus the
$9.00 of cumulative retained earn¬
ings was substantially half of the
growth in the size of the share.

prospective cost of such

or

The

*

ings

ex¬

be evidence of the

may

substantially higher at
$10.58 and $10.49 : during

the

produces

and

($8.52) than in any
of the period! In fact they

were

financial

capital.
Prime Corporate Credit
:We are, I am sure, yet however

of

Most

ready

to defend the proposition
that the electric utility industry is
the

balance

the

be

can

im¬

puted to sales of additional stock
at proceeds per share above book

prige corporate credit in the

today.
But values.
How
an
investor might have
whether the industry could actu¬
ally meet the standard of good fared over the 12-year period may
credit, as we have identified it, be seen from the data where it is
one
composite or
may be another matter.
Has the assumed that
industry been able to obtain the average share was purchased each
American

economy

capital needed without dilution or
impairment of or prejudice to the
past invested capital? Has it.in
fact done so over the past 10 or

fourth quarter average
prices.
Thus the 1943 purchase
was
at a
6.81%
earnings price

12

the earnings in

years?

to meet that standard in the pe¬

that dollars equal dollars, that the
thing called a 1938 dollar is the
,

the thing we trade in as
or whether it is as¬

1959 dollar

sumed

the

that

dollar is the
urement

received

in

invested

average

'

unit

same

the

as

dollar

of meas¬
of

1958 were 11.29%.

danger in stock offerings to
stockholders since the price per
share has

significance

no

except

to those who will sell rights and
those who buy them. It needs to
be

understood

that

sustained

a

"explicit" dividend rate

means an

capital the cost is high compared
with debt capital even at natural
interest rate levels.
In view of

its

priority and the compulsion on
management to treat preferred
dividends

as
practically a fixed
charge the cost seems high com¬

"implicit" in fact dividend yield
increase when rights to subscribe

pared with the basis

have

vestors

value.

a

How

much

of

a

dividend increase of this character

take

on

which in¬

at least now

are

a

stock

common

Can

soon.

you

same or

similar for

electric

utility common stock
earnings? Security price rises are
by nature contagious.
Utility
stocks have responded sufficiently
as to reflect very low earnings

so

and dividend price ratios by com¬

parison with the past and by com¬
parison with more stable money

1958-1959 will be class of security. It seems to mo
the
time
when in the present and probable future
common stock money should have
setting to be more attractive as a
been obtained even beyond im¬ medium of investment than as a
(7) The years
remembered
as

medium of

mediate needs.
As to debt capital it would seem
the part of conservative prudence
to

plan

a

reduction

in

the

debt

is the

financing except as it
of avoiding penetra¬

means

tion of the 50% debt ceiling and
for that it seems a rather
costly

expedient compared to the avail¬
re¬
quirements at higher rates come ability of common stock capital.
preferred stock
Our position, I hope, has be¬
into effect, the times interest cov¬
instances these stock
ratios are
come somewhat clarified. We are
erages of the past will be main¬
now
so
low that the enterprise
not merely satisfied to be able to
tained. Except as we again inflate
could sell stock and buy govern¬
obtain all the capital we may
the
money
supply debt capital
ment bonds, sort of an operationneed but we are also concerned
costs will probably remain at the
in-stock-piling equity capital natural interest rate levels to as to the terms and conditions
against the day when it may be
under which this capital is ob¬
rates

reflected

ratio

that

so

as

the

interest

by bond and
yields. In some

as

which we returned as the "money
now.
jag" of the big inflation wore off.
Utility debt capital today costs
a full
2% in yield more than in
Preferred Stock Problem
May 1946. I suspect that for sim¬
As to preferred stock the prob¬
ilarly circumstanced and protected
equity capital, stock investors also lem is as it always has been, a
now
expect 2% more but you mug-wump situation. If it were
would
not
suspect it irom the in the form of debt the debt ratio
ratios of dividends and earnings
to stock prices.
Obviously great
expectations have also been built
up in utility common stock inves¬
needed if not

tained.
to

Thus,

obtain

deal

the

of

money

fairly with

want
being able to
but want to

not only

we

confident

be

the

investor

'i'

suffer

impairment due to present
Continued

on

page

through

V

' ■'

'

Dividend

income

similar

A

'

' ■■■)

'

a

■

Experience

woman

scorned.

that

tion

to

seems

It is such
restrain

cau¬
some

experience in terms

responsibility and investor

expec¬

enterprises from common stock
financing that should have already
taken place.
acquisition in the fourth quarter
of 1946 on a 4.57% dividend yield
^With some of these more tech¬
basis has become 7.37% in 1958.
nical aspects of the problem of

tations in nominal dollars

and to

One share unit

sume

It is, and I as¬
understand, quite

1959.

all

we

possible to have met all the stand¬
ards

of

enjoy

nominal

the

dollar

highest

command

financial

capacity

additional

to

investment

is

dividends

of

produces
6.88%

An

acquired each year

return

average

an

in

forth.

set

the

1958;

of

average,

seen the weighted by number of years ob¬
is
7.74%.
Again what
equity
investment tained,
substantially liquidated. There is more, one might say, can you ask
for Or expect but it may be worth
an old saying that "what you don't
know doesn't hurt you" and so noting that the dividends per $100
possibly with many utility stock of equity are lower at 6.12% in

investors whose dollar investment

1957

has

any

been

dollars

in

well

main¬

tained but in economic substance

sadly impaired.

of the period and were
high as 7.41% in 1950. The
gain is all in the increased size

as

the

of

Investor's Experience
As

and

a

quick test and

culations

based

experience

as

on

a

the

few

cal¬

investor's

reflected by Moody's

well-known selection of 24 utility
common
stocks
for
the
period
1946-1958.

The

sented in the

results

share

are

pre¬

accompanying statis¬

from

the

several

which brought that

causes

brief "look

a

see" I have made

(last year available) than in
vear

about,

particularly retained earnings and
sale

the

prices

additional

of

existing

then

above

shares

at

book

values.
other look and see may

be
purchaser
has
received
in total $25.83
in
dividends and $31.07 appreciation
One

informative.

1946

The

total of $56.90

through 1958;
vestment is a weighted composite through 1957, $39.86, or $4.38 per
share corrected for stock splits year average to 1959 and $3.32
and stock dividends.
This
It may be per year average To 1958.

tabulations.

tical

noted

the

the

has

1946

unit

increased

in¬

of

tabulations

market

average

share
in

from

The

that

price per
from $32.14

to

$63.21 in the fourth
quarter of 1958. The end of Feb¬
1959

price was
$67.40. This looks good on the face
of it but suddenly we recall that
ruary

a

average

share is not

share is

a

share and that

more

no

a

constant

a

and

or

a

looks like
but

a

10%

this took

as

discountability of time

the

ing at prices above the book value
base.

As

the
book equity
has also
almost doubled from
$21.74 in
1946. to $40.02 in
1957.
(Book
equity figures per average share
for

1958

also be
per share

may

seen,

not. yet

available.)
might hope that the share
would increase in price at least
are

We
br

—

as

it increased in book




of

analysis of the
which the
investor
have had with Moody's 125

similar

two-page

experience
would

to

tained earnings and stock financ¬

to

waiting. A discounted worth would
be substantially less.
I have also included herein a

industrial stocks.

re¬

13 years

realize and there is such a factor

is

There have been

better average

and

12

reliable unit of measurement than
the dollar.

or

make

I leave it to you

the

comparison and see
how much greener the grass was
or appears to be on the other side
ofg the fence.

capital

(1)

The

electric

I; would

therefore

and

be

somewhat

*; ' "

~

equity ratio

of

categorical.

dollars and yet to have

stockholder's

the

getting
brief-

,

r

should

utilities

many

be

im¬

proved; the industry as a whole
might well establish a backlog of
reserve
borrowing capacity.
(2) The price at which stock is
offered,
and
pro-rata-taken by
existing stockholders is immate¬
rial; it is the future earnings per
dollar invested and not

share

to

prices

offered

Stock

that

at

tions to market

as

related

material.

is

rela¬

favorable

prices and favored

sustained dividend rate per
only
gives
the
investor
sofnething more in the form of an
implicit (a real) dividend increase.
(3) Stockholders who sell their
rights are selling part of their
holding and, if at prices high by
comparison with their purchase
'price, they make a real gain.
by

for

Equity Financing

(4)

dividend

tained

and

dividends

Stock

rates

deferral

of

dividend

on

a

are

dividends,
dividend

a

sus¬

question is1 what kind
of money capital is the industry
going to obtain? The categorical

but

a

of all the dividends now. The de¬
vice short circuits the obtainment
of

capital and

avoid

may

defer or even

taxes.

some

(5) Stock offerings to the pub¬
lic, new investors, could hardly
justified at prices less than

be

what

can

be obtained in this mar¬

ket but such
ited

on

the

could

market

easily

false expectations and un¬

holder's at significant concessions
below

the

market

well be
equity ratios

may

made to increase the

and to increase reserve borrowing

point, namely the kind of capital
it will choose to get.
Real old-

capacity.
Debt capital costs are
high and the terms of the commitj-

can

be

brief and to

that's

so

rich

Rich

stores

modern
and

materials and chemicals

raw

of

practically

every

raw

material needed by

industry abound in the vast Utah, Idaho, Colorado

Wyoming area served by Utah Power & Light Co. and
Telluride

subsidiaries; The Western Colorado Power Co. and
Power

Company.
WRITE FOR BROCHURE: "A
Treasure

Chest

in

the Growing

West"

containing detailed informa¬
regarding industrial opportun¬

UTAH

tion

POWER

Dept. 15, Utah Power & Light Co.,

ities

£ LIGHT

financing if at some

of the extreme ratios now exhib¬

set up.

in

in place

the

answers

area

future

(6) Stock offerings to old stock¬

The next

the

share

favorable future reactions.
Time

—

a

CO.

so

that future credit may in fact not

year's

each

carried

is

base

Obviously the answer, as would
statistically developed, will
differ as to whether it is assumed

as

conventions and limits. Viewed in
terms of after-tax-effect-cost of

no

purchase tors' minds as to the future earn¬
to 1958. ings
which
justify
such
high
The average of earnings on the prices. This we view with alarm.
13 acquisitions in 1958 was 9.86%. Barring a widespread conversion
The
weighted
average
11.10%. of regulatory practice and belief
This looks good, on the face of it, to economic principles and a re¬
but it is necessary to recall that nouncing of the false gods of nom¬
these
are
in
part earnings on inal dollar bookkeeping, it just
earnings never received. The in¬ won't happen. Therefore, we fear
vestor was compounding himself. an investor disillusioned as we do

Similarly

be

a

On the "share" cost in 1946

ratio.

riod ahead?

same

at

year

Will it in fact be able

would violate well-established

is

are meaningful for the
possible future net income'. There

record-breaking over-valuation
o f the
shares, a very substantial
increase in the earnings of indus¬
trial enterprise must be at hand
a

contractual cost of debt and pre¬
ferred stock capital. The moral of

management is to determine what

ment made

willing to
position.
the particular enterprise can af¬ Institutions Which have the
golden
ford
may
well determine, how touch of transmuting a taxable
much additional stock should be income into a
substantially taxoffered at how much of a con¬ free income
may well however
come
intelligently cession in price.
even
more
to desire this

the industrial stock market is not

Earnings per constant share of
$100.00 in book equity were also

terprise capital, the common stock
equity, subsidized by past lower

31

'

Address:

W.

A.

Huckins,

Sajlt Lake City, Utah

V3c
a

LlJelL

32

M

The Commercial and Financial Chronicle

117561

Continued from page

of

principle

31

namely,

regulation,

that it is rates that are

subjfect to

of

omies

on

the

the

on

we

cer¬

Electric Utility Financing
the

what

and

view in retro¬

spect as short-dealing. This, we
have seen, is in part to be taken
care of by the manner in which

which is being

tainly

better done. Cer¬
business environment is

a

not
provided
under
regulatory
policy where all of the gains of

initiative

and

enterprise

are

in

capital is obtained and the tech¬ advance committed to the con¬
niques employed.
Whether the sumer. We seem always to pay
industry can in fact live up to the respect in words to the principle
great expectations which inves¬ that good management and sutors have

developed will, however, j perior

enterprise

chance

depend, as we noted before, upon
the regulatory environment and
the manner in which public au¬

where

thority controls the future flow of

this

income.

and

Regulatory
In

my

honest and socially ethical

more

dealing

with

economic

investors

stock

of the
utility

nature

the

sacrifice

which

and

made

earn

the

should

something

their

in

sentiment

economic

noble

principle

unchallengeable

conscious effect.

environment

business

A

opinion it is high time
that regulatory policy in the U. S.
matured and came realistically to
face economic facts.
The policy
of hiding behind the bookkeeping
curtain, -woven out of a systematic
pattern of nominal dollar debits
and credits, should give way to
a

have a
addi¬
performance but
utility regulation has

to

for

jever been given

Unrealistic

Policy

tional

would

clearly not be overcast with the
ruling impression that because a
utility is making a gain, because recalcitrants
i its earnings have increased, there¬
fore its rates are too high.
The

prospect of
miracles

mind

man

known has

sity

management

the

and
extent

which

business

diet

environment

and

to

business

a

healthy
and make it strong enough to face
its

on

keep

credit

own

it

and

its

the challenges of
radical change.
A

own

resources

change,

even

healthy

business environment holds forth

chance of gain but not a guar¬

a

anty by implication or otherwise.
The

inducement

offered

by

a

chance of gain is something more
than mere management response
to
a
commission-administered,
frequently revised, or revisable,

and in effect, -cost of service con¬
tract.
A
business
environment
must

hold forth

some

extra compensation

done

for

chance

of

job well
particularly, a
job

and,

a

so

Every good thing

can be over¬
certainly the reliance
tained for all.
on
bookkeeping records whose
The true social economy of an
meaning one must really under¬
enterprise environment for regu¬ stand in order to take lightly and
lated industries is not peculiarly the statistical
computations and
sought in behalf of the investor. calculations
derived
from
the
In fact his net-take is a very small
gyrations of stock markets and
percentage of the total social divi¬ the results of a governmentally

and

done

which the spirit and effect
enterprise qm produce. In our
society as a whole, in fact no one,
certainly not the investor, would
dend

managed

of

into this category. The social eco¬
nomic

money

purpose

offset and

to

market

all

of regulation

cancel

fall
was

the effect of

much from

the monopoly because it was an un¬
recognition and application of the avoidable by-product of the per¬
as

competitive

current

would

ginal cost standard

mar¬

be

an

try's public responsibility to
larger numbers in an

recognition

the economic standards of what a

larger

industry is
only thrive

KALAMAZOO, Mich. — Lee
Higginson Corporation has opened
an

T* 1

*

*

•

•

This revolutionary

gas-filled transformer is

tntly the largest of its type.

,

Electric, it
tion

was

where

it

development

Developed by General

recently installed in
is

of

pres-

a

PP&L substa¬

providing operating data toward
even

larger

transformers

of this

economical type.

Adaptation of
thinking

always been
Under such

/

'

a
a

United

States.

plant in the colder portions of the

A

Similarly, PP&L is
electronic

second

is

among

the leaders in adapting

equipment in

many

already in building.

phases of its business.

And promotional effort has been broadened from ap¬

pliance promotion to broad business development.
new

techniques, equipment and

in other words,' PROGRESS

...

door" type power

responsibility in the PP&L

policy, PP&L

was a

has

program.

pioneer in "out-

PENNSYLVANIA




...

POWER

We believe that only through PROGRESS can
we

effectively meet

attract and

our

customers' increasing needs,

retain competent people and maintain

investor confidence.

&

LIGHT

economic

utilization

mum

while

sources

at

social

of

the

the

of

management

Western Sees. Office
OKLAHOMA

re¬

of Lester E. Johnson.

time

same

of the contem¬
regulatory process is

procedure
the

to

ideas

conflict

class

of the

and

All-State Properties
FLORAL

State

would

most

Avenue

establish

and

basis

of the flow

income would be

a

of future

change in the

For a highly capitalistic indus¬
try, under legal compulsion to ex¬
pand with the coming "population
explosion" and with what we hope
will

also

our

standard

a

continued
of

rise

economic

in

well-

the

maintenance of good
enterprise
social importance.

being,
credit
and

be

is

of paramount

The
prime requisite of good
utility credit is a prospective flow
of

income

sufficient

in

the

first

place to attract the equity capital
under
a
conservative
capital
and

sufficient

in

the

second place to allow investors a
chance to realize that prospective
rate

of

return

which

in

duced them to supply the

Y.~ All-

N.

has

Inc.

to

engage

in

been

securities

a

business.

New Rotan,

Mosle Office

VICTORIA, Tex.—Rotan, Mosle
& Co. has

opened

a

branch office

at 111 South Liberty Street under
the direction of Halbert A,

Abshier,

Jr.

so¬

The flow of utility

secure

PARK,

Properties,

formed with offices at 30 Verbena

eco¬

not

income, which is the ever essen¬
of utility credit and its
command over capital, is there¬
fore
at
best precarious and
in
spite of the amazing technical ef¬
ficiency and solid economic ac¬
ceptance
of the service.
What

structure

COMPANY

under

Robert H. Reagan.

CITY, Okla. —
how. Western Securities, Inc. has
operating to achieve opened a branch office at 109
equilibrium and maxi¬ North Walker under the direction

conception
of
regulation
from
class conflict policeman to social
economic statesmanship.

'

office in the Hanselinan Build¬

ing

well they are

third

fifty years!"

and will
environ¬

the function of prices,

form

utility credit and make solid th^

in

an

New Lee Higginson Branch

respects been over - emphasized.
At least, I would say, that public
utility rates as prices should be¬
gin to be viewed from the stand¬
point of the social economy as a
whole, which means they should
be tested as to how well they per¬

tial basis

design

in

hospitable to business enter¬
To this end there is re¬
quired early regulatory recogni¬
tion of the end for a rate-of-pos-

of these

cial economy.

in transformer

business

well

prise.

for alternative goods. Both
approaches have in some

power

nomic

change

a

ment

pidity by the consumer since they
are a reduction of his purchasing

oriented

the most radical

ever

price should be and what a price
should
do merely because they
which
will
induce
utility prices. Utility rates as sible-return
prices may of course be viewed business enterprise at its best and
with cupidity from the standpoint investor assumption of the haz¬
of enterprise because they are a ards of ever-more progress rather
than
a
source of the revenue needed to
mechanistically derived
continued solvency. They may be, cost of capital basis for a mere
and in fact are, viewed with cu¬ subsistence wage of capital.

porary

■.

serve

is
the
regulatory
of the fact that this

way,

are

tailed

■

the

to

ever

The basic approach and the de¬

t'-/\

essential

successful financing of this indus¬

enterprise principle in public util¬ fectly sound idea of having one
giving the consumers the lowest
ity regulations as would the cus¬ utility
enterprise
occupying
a rates
under which in fact, the
tomer himself. All that would be single market.
We wanted the most vital factor in our whole
needed is a return to the original
operational and investment econ¬ system of spontaneous economic
interdependence,
initiative
and
enterprise, can earn a truly com¬
pensatory return.
The economic
ends of society as a whole are
finally and financially more im¬
portant than the subsidiary inter¬
ests of buyer and seller.

ri

front.

enlightened
substitute
for
the
aboriginal past cost standard as a

higher utilization factor and pro¬
duces more want-satisfying' elec¬
rates are prices even like other
tricity
at
lower average
costs
ought to be just as much a good prices. They are not exempt from

sible cost at which the advantages
of great economies can
be ob¬

in fact benefit

The

actually utilizes the

much and useful evidence of the reason¬
It is furthermore high time that more in social economy for the ableness of rates as any statisti¬
fhe electric industry become rec¬ small potential reward held out cally
contrived cost of capital.
as
obtainable if earned. In fact Formula
regulation has gone
ognized as a business-managed
Of course it was
business undertaking. The treat¬ if we really believe in the econ¬ much too far.
ment of this great business as if omy of a private enterprise system easy, it made life simpler. With a
as we protest we do, at least to formula
at
hand
that
difficult
it were in fact a kind of an in¬
the Russians, we must in fact be¬ thing called
judgment could be
corporated "performance of gov¬
lieve that the holding forth cf a set aside
ernmental function" needs to end.
and, unfortunately, has
If this is in fact a business it needs chance of gain is the lowest pos¬ been.
a

expecta¬

of

time

some

Particularly

and a stand¬
ard of social economy, for utility

very strong propen¬
overvalue any indi¬

fact) beget

Rates

guide to regulation

cated chance of gain. The holdingout of a chance of true business

gain would in

reality of the expected return.

Economic Utility

a

chance of gain works social resources at its command in
enterprising hu¬ the form of property and plant,
which we have long the extent to which it achieves a

a

able

incompe¬

to

the

to

even

The

tents.

a

on

Realization

must

•
regulation and not returns.Nothing tainly did not want to subject
to
the
temptation
of of reward may yet so deteriorate:
would do more for the customer ourselves
monopoly pricing.
Logic would as to impair even the best of
in that it would curb his shortterm cupidity in favor of the much suggest that we subtract only the credit.
monopoly earnings from the re¬
Any widespread failure of util- »
larger long-term advantage.
turn and leave the balance of the ity equity investors eventually to
Detriment to Free Economy
the
return - expectationreturn earned to enterprise even realize
as it is and can be claimed by en¬
rate, which in fact induced them
Return
regulation as such is
to supply the
risk capital, will
basically uneconomic and inimical terprise in the competitive indus¬
trial
areas.
Such
an
approach work havoc with the present highto the operation of initiative and
ould never have resulted in a level credit of the electric utility
enterprise in a free economy. For¬
tandard which claimed all the industry and prejudice the indus¬
mal and formula limitation of the
capacity to raise the un¬
of differential
su- try's
return which can be earned is not advantages
eriority, initiative and enterprise, paralleled volume of capital that
to
the
best
social
advantage
will be needed and continue to be
viewed as the end of regulation. which enterprise capital and man¬
needed to finance an unprecedent- >
It would be a great advance if agement produced, for the cus¬
tomer.
There is in fact no eco¬ ed and long continuing expansion.
the return earned were merely
The technological basis of elec¬
nomic sanction for the cost stand¬
viewed as one of several available
ard as such in utility regulation. tric utility income is solidly es¬
evidences as to the reasonableness
At best that standard would be, tablished; the economic basis is
and social economy of rates and
not as a determinant.
The prin¬ by reference to all economic prin¬ firmly part of the very web and
woof
of
our
present industrial
ciple of course should work both ciples, present marginal cost with
system.
The area of recurring
ways.
The opportunity for \real opportunity for the superior pro¬
ducer to share in his achievement, concern is the legal basis as re¬
gains should be balanced by regu¬
to be rewarded for the superior flected by regulatory climate and
latory procedures which would in
public policy. This is the vulner¬
fact
"spank"
the
laggards, the economy of tyis productivity.

Bases for Successful Future
shortsightedness

Thursday, April 16, 1959

.

follow or
will to believe and the hope

tions
the

future investor may

.

capital.

one

other

monopoly

and

hand

.

fact

in¬

needed

A. F. Haslam

•

"•

Opens

:EL DORADO, Ark.—A. F. Has- '
is

lam

conducting

business from

securities

a

offices at 511

West

Main Street.

First Monticello

Corp.

"mONTICELLO,

N.
Y. —First
Monticello Corporation has been
formed with offices at 217 Broad-

:

to engage in a securities bus-

•

way

iness.

Hamilton Investors Plan
JAMAICA, N. Y.—Hamilton In¬
vestors Plan, Inc. has been formed

with offices at 80-23 164th Street,
to engage

in

a

securities business.

Chester Harris Co. Opens
Chester Harris & Co. has been
formed

offices

with

at

Wall

64

Street, New York City, to engage
in a securities business. Partners
are

Ira

Martin

Harris

Chester

and

;

D. Harris.

Forms Harwood Securities
Edith Harwood is

conducting

a

securities business from offices at
151

East

38th

Street,

New

York

City, under the firm name of Har¬
wood Securities Co.

-

—

-

-

;
,

Number 5838

189

Volume

Continued from

first

The Commercial and Financial Chronicle

...

page

(1757)

staffs

<

its

of

laboratories

own

al¬

tric

l' i

Status of Atomic Power

their

tention

•

and

of

Look at the Future

a

the

planning

projects

,

capital costs.

maintenance

costs

industry to nuclear progress.

Details

on
the projects under¬
in the industry and a sum¬
mary of dollar expenditures are
shown in the accompanying data.
A large number of utilities are

way

also participating in 11 other nu¬
clear research, development and

study projects, involving substan¬
tial expenditures.
Some of these
will 'undoubtedly

tional

lead

to

addi¬

construction

reactor

proj¬

ects.

Within

the

six

last

both

months,

the

eight

or

AEC

and

the

Joint Committee Staff of the Con¬
gress

of

atomic

As of year-end 1958, total util¬
company expenditures in these

the
previously - mentioned
projects amounted to $130 million
with 131 utilities participating. A
listing of the participating com¬
panies in each of the 26 projects is
and

shown herein.
a

proposal

the objectives.
tives

(1)

Both sets of objec¬
similar, and briefly are:

are

achieve

to

economic

nuclear

in

years

the

assist

to

demonstrate
power
in 10

and

United States;
nations

friendly

(2)
now

high
energy
costs
to
achieve competitive levels before
having

time; (3) to maintain U. S.
world leadership in the peaceful

applications of atomic energy.
Both proposed programs called
for strong leadership and techni¬
cal
direction
by the
AEC.
To
bring this about, the Joint Com¬
mittee

staff

program

envisioned

assumption

of

re¬

was

sponsibility for construction of re¬
made to the AEC by the Philadel¬
actor experiments and prototypes
phia Electric Company and the with
participation in this phase
newly-formed High Temperature
by industry only in exceptional
Reactor
Development Associates cases. Private ownership of nu¬
to design, construct and operate a
clear
facilities
was
anticipated
30,000-40,000 Kw (electrical) high
mainly
for
second
generation,
temperature, helium-cooled, commerical
size
nuclear
power
graphite
moderated
nuclear plants.
power plant at Peach Bottom, Pa.
During the year, the AEC had
The project has been accepted by
demonstrated
their intention to
AEC as a basis for negotiations.
exercise stronger leadership and
General Public Utilities

ration

also

Corpo¬ technical direction by announcing
that

announced

it

and

make

AEC

construction
deter¬

would

objectives.

sizes,

ify
to
industry
the
desirable
prototype reactor projects which
would v qualify
for .government
assistance.
would be

in

costs

plant

assistance

Financial
offered to
of

excess

if

costs,

capital

cover

conventional

authority

such

were

approved by Congress. How¬

such financial assistance

was

the

to

a 5,000 Kw (elec¬
developmental water type

(PAR).
During

The

Committee

Joint

past five

for Indian Point.

to

1 A

panel of representatives of
major
industry projects
provided
convention with progress
reports.
^

projects and the speakers were:
R.

Consolidated
YANKEE:

Yankee

It. G.

F.

But,

four

the
The
INDIAN

Brower, Vice-President,
Co. of New York;

J.

Coe,

Atomic Electric

Vice-President,
Co.; DRESDEN:

A
Development, Commonwealth Edison Co.;
and
ENRICO
FERMI, H. A. Wagner,
Manager of System
Development, Detrait

Le

Clair, Manager of Research

Edison

we

pointed out that broad

scale industry participation in ex¬

not

for technical prog¬

necessary

In those

ress.

where gener¬

cases

facilities are installed,
nation's foreign policy objectives power generated, of course, should
be utilized at the site.
will require substantial participa¬
Hence, in carrying out any pro¬
tion, both financial and otherwise
by the Federal Government. Such gram deemed necessary to. meet
assistance is both desirable and established objectives, the respec¬
necessary,
inasmuch as it is in tive roles of government and in¬
support of an objective important dustry should be so conceived and

panded

to

programs

meet

the

ating

...

entire

the

to

nation

for the benefit

of

plant.

for

rather

than

administered

to maximize par¬

as

the ownership of
plant costs up to the bus bar, nor The principle of Federal financial facilities
industry.
Projects
to reduce the capital cost to in¬
aid to promote international ob¬ proposed by the AEC involving:
dustry below the equivalent cost jectives has abundant precedent either
prototype
or
subsequent
conventional

a

behalf

statement

of

the

presented

on

nuclear

Electric

Edison

Institute, we endorsed the major
objectives of the long range na¬
clear
ever,

for

proposed

program
power

development.

nu¬

How¬

recommended

we

received adequate

an

consideration to

date, that is, to bring the devel¬
opment of atomic power as soon
as possible and as nearly as pos¬
within

commercial
ventional

the

framework

development

energy

con¬

resources.

in
by

should

reactors

submitted

be

to

industry to be constructed, owned

development, it is

power

industry position that during

It is

transition

period to

development.

operated by industry, with
government
financial

and

sufficient

assistance

provided to bring

this

about.

e

transitional

competi¬

However,

vocate that that role

with

one

ad¬

we

should

be

such

sponsibility transferred

a

re¬

to indus¬

The AEC's role in reactor devel¬

opment over the
in

be

the

near

of

areas

term should
investigating

promising reactor concepts, spon¬
soring research and development,
and
constructing and operating
reactor experiments and prototype
power companies,
manufacturers
reactors.
AEC ownership should
of equipment and
other related
not extend beyond the stage of
industries working together, with¬
such
reactor
experiments or
out
the requirements of special
restrictions, special forms of as¬ prototypes at Commission installa¬
tions.
It is basically undesirable
sistance, and the extent of direc¬
for government to own reactors
tion by government which pres¬
on utility systems,
public or pri¬
ently exist during the transition
period to economic nuclear power. vate, such as was provided for on
public and cooperative power sys¬
It is obvious to our industry that
tems in the so-called second round
while the program currently un¬
invitation of the Power Demon¬
derway in the United States is stration Reactor
Program.
progressing at a rate which is both
In a free enterprise economy,
substantial and adequate on the
of principle, there
basis of domestic considerations, as a matter
position that healthy ultimate
of atomic energy will
only
take
place
with
electric

our

utilization

is

no

proper

furtherance

atomic

or

place for government
of

public

conventional,

assistance

nancial

or

the

power,

with

other

because

AEC

industry
nificant

petitive
selected

try as soon as practicable.

of

of

ticipation

Likewise, projects initiated by
be given equal;
tive nuclear power, the AEC will industry should
consideration for government as-,
have an
important part to play
sistance with projects proposed by
in virtually all aspects of reactor
the

additional objective which has not

sible

power

ernment

our

tional

nuclear

With regard to the role of gov¬
in technical aspects
of

Development
the

in

development.

Emphasizes Commercial

In

aid

such

of any one group.

against
reliable

of

,

To date,

nies

interest

the

itself be a sig¬
test of any reactor's com¬
promise.
Any. reactor*
by industry will be tested
industry's
standard
of
and economic operation.
should

electric

power

in

invested

have

compa¬

nuclear

staff

both

AEC proposed and unsolic-'
proposals, thus reducing tho >
required expenditure of govern-,

ited

ment funds.
The Future

What is the outlook for the year

in nuclear power

ahead

the Joint Committee

a

bill author¬

program

which calls for

construction

by the govern¬
relatively
small

izing
the

develop¬

The AEC has submitted to

ment?

a

ment

of

four

scale reactors.

experi¬

One is an

mental

organic cooled power re¬
actor to be built at a Commission
installation.

The

second,

an

ex-

fi¬ perimental low temperature procContinued on page 34
aid.

BALTIMORE GAS AND ELECTRIC COMPANY
Serving one of America's great industrial

Co.




have paid off in
remarkable progress." He went on
say

years

that "we have had a good
both in terms of techni¬

centers

KILOWATTS OF CONNECTED LOAD

180,000

pro¬

ADDITIONAL INDUSTRIAL

160,000

AND COMMERCIAL

140,000

CONTRACTED FOR

■'

'

ELECTRIC BUSINESS

1958, when business throughout the

In

G

United

States

was

depressed levels,

at

volume

of

tracted

for

by

mercial

IN EACH YEAR

120,000

new

our

gas

business

con¬

industrial and com¬
greater than the

new

electric

business

W

was

industrial

and

commercial

second only to the record

Mid-Maryland, the 2300-square mile
Electric

by Baltimore Gas and
comprises a rapidly

Company,

industrial, commercial, resi¬
dential, and port area, with Baltimore the
hub. Future growth—population and busi¬
ness expansion—is expected to continue
expanding

H

I

total of 1956.

territory served

T

III!
11111
lllll

Mill

record-breaking total of 1957, and the

O

m

customers was

the

at

a

rate

appreciably above the national

cal

1949 '50

1,100,000

'51

'ft '53 '54 '55 '56 '57 '58 ' j

CUBIC FEET PER HOUR
-OF

CONNECTED LOAD

1,000.000
ADDITIONAL INDUSTRIAL

900,000
AND COMMERCIAL

800,000

GAS BUSINESS

CONTRACTED FOR
IN EACH YEAR.

average.

and in terms of par¬
ticipation and cooperation of in¬
dustry."
progress

The AEC continued to advocate

positive and vigorous leadership
in all phases of, the program.
In
the
research
and
development
phase,
make

the
full

Commission
use

of

the

would

technical

Dividends

paid on the Common Stock

Ill
III

continuously since 1910.

Always earned—never reduced.

r

projects amounts substan-;
tially in excess of the equivalent ;
costs of conventional plants for:

power

program,

Edison
R.

and

year

operation in 1960 in the case of
the first three plants
and 1961

POINT:

can
only
expediency.

it

done

matter of

think

research and gram included a list of experi¬
development work continued on mental, prototype and large scale
the
recently inaugurated
Caro- reactors to be studied, developed
linas Virginia and East Central
and possibly built.. The AEC on
Nuclear-Florida West Coast proj¬ the other hand
emphasized the
ects, now under contract with the building of reactor experiments
AEC. Detailed design work com¬
and prototypes rather than large
menced during the year on the scale
plants as the quickest, least
Pacific Gas and Electric Company
costly course toward achieving the
plant located at Humboldt Bay, program objectives. It also placed
Calif., as well as on the nuclear
greater emphasis on the impor¬
superheater plant of the Northern tance of breeder type reactors.
;
States Power Company to be built
It was against this background
at Sioux Falls, S. Dak.
that the
Congressional hearings
Major construction work on the on the development, state and
large
scale
Dresden
plant
at growth of atomic energy convened
Joliet, 111., the Enrico Fermi plant in February of this year. Chair¬
at
Monroe, Mich., the Yankee man McCone of the AEC, in pre¬
plant at Rowe, Mass., and the senting the Commission's program
Indian Point, N. Y., plant con¬ for nuclear power development,
tinued
toward
completion
and reported that "efforts during the
the

a

achieve the

help

of the nuclear

it dorsed capital subsidy as an ad¬
construct ditional form of financial assist¬
their proposed large scale homo¬
ance.
geneous
reactor without the
The technical phases of the two
development and operation of a proposed programs differed some¬
prototype plant. This resulted in what
as
to
the
recommended
the
cancellation
of the
project sizes and types of reactor projects.

actor,
they
did' not
technically feasible to

is

this
as

avail¬

nation's for¬ research and development stand¬
eign policy objectives in nuclear point. In many cases, the inclusion
power development.
of electric generating facilities is

policy whereby they would
specify to private industry the
types of reactors to be built with
reactor at the Saxton, Pa., gener¬
government assistance.
Thereto¬
ating station of its subsidiary, fore the
initiative
had
rested foreign policy objectives may re¬
quire additional efforts. However,
Pennsylvania Electric Company.
largely with industry to propose
In
December,
1958,
Pennsyl¬ reactor projects for inclusion in such additional efforts are a col¬
vania Power and Light Company the Power Demonstration Reactor lective responsibility of all seg¬
ments of the economy. The elec¬
and Westinghouse Electric Corpo¬
Progam and, thereby, qualify for
ration advised the AEC that after
government aid. In order to en¬
three years of research and de¬
courage participation by industry
velopment work on the single- in
the
building
of
promising
region slurry homogeneous re¬ prototype reactors, the AEC en¬
would construct

trical)

When
occur

Moreover,
power
reactors at
possible AEC installations should be op¬
experience, or¬ erated only so long as they are
financial support deemed to be valuable from a
make

in

resources

ganization

meet

The AEC would spec¬

continue to

able to the fullest extent

their

'

1

schedules for con¬
their program

to

efforts and program steps to reach

government

During the year,

designs
struction

power

that

ity

prototype
the

established proposed objec¬

tives

national

segments

could

will

not to exceed 50%

Washington

fre¬

are

which

contributions.

ever,

Recent Developments in

operation

quently not recognized in evaluat¬
ing the overall contribution by
our

.

These addi¬

tional post-construction
and

..

the

all

on

mine desirable reactor types,

stage.

.

excess

call

industry

program,

Valuable
are
operating experience
Utility was obtained by the electric utili¬
ties participating in the three op¬
company expenditures on these 15
power
reactor
projects
projects will amount to more than erating
Calif., at
$540 million, exclusive of excess located at Vallecitos,
Santa Susana, Calif., and at Shipoperation and maintenance costs
over equivalent costs
of conven¬ pingport, Pa.
/.
tional power.
Such excess costs
This, in essence, is the status
may, over a period of years, ap¬ and progress on the industry pro¬
proach a substantial portion of gram in nucelar power today.i
in

additional

two

and

to

substantial
In

And

companies recognize
responsibility in these efforts

power

though they also stated their in¬
,

33

1949 '50 '51

'52 '53 'S4 '55 '56 '57

|

•

34

The Commercial and Financial Chronicle

(1758)

jrom page 33

Continued

ELECTRIC UTILITY COMPANY PARTICIPATION

at

a

long

ing

would also be
Commission site. The

reactor,

heat

ess

built

range

objectives

mu¬

(2) Pacific

tion of small scale

a

with

ment

£0,C00(a)

Boiling Water-Prototype
for Dresden unit

General

7,5C0

In
Oreretlon

Dec, 1957

Light Co
General

Co

572,CC0(c)

Oct,

1957

Electric Co

Atomic Enercy

Atomics

Commission
..

Utility'

$25,08l,COG;b)

Duquecne

Electric

Co

to

Crrar.lzation

Reactor

Atomic Energy

5,cco

Sodium Graphite

Gas & Electric Co

(3) Southern California Edieon

International

l,573,CCO[c)

Jul, 1957

.

(Santa Susana)

and prototype

fa) Initial

Notes:

ultimate of ICO,000 Kw gross expected.

net capacity,

(b) Includee $20.08 million for the conventional portion of the plant and the

the importance has
been lost sight of in government
However,

in addition to research that any nuclear program which
assistance, to may be adopted must make maxi¬
provide financial assistance to¬ mum use of the cost cutting in¬
ward capital costs not to exceed centives and initiative of industry
50% of the capital cost of the as well as ownership of facilities
by industry, if the program is to
plant.
The fourth, a proposed small succeed in achieving the objec¬
power reactor, as an alternative tives at minimum cost and within
nation's
normal
business
to Commission construction at an the
AEC site, may be built by the framework.

•

Operator of

Commission

(Yallecitos)

reactors.

cooperative arrange¬
the AEC.
The AEC

of

Reactor

(Shippingport)

proposed reactor is a boiling
prototype, which, as an peated suggestions of broadening
alternative to construction by the the forms of government financial
Commission, will be offered to assistance to our industry as well
private,
public
or
cooperative as growing emphasis on construc¬
power organizations for construc¬
tion and ownership by the organ¬

rient-Kve

Pressurized Water

(1) Duquesne Light Co

tually acceptable to the AEC, and
the
Congress.
There were re¬

third

Estimated Cost
Owner

Capacity of
Type cf Reactor

Utility Co & Plant

water

ization in

IN NUCLEAR POWER DEVELOPMENT

Electrical

Name of Participating

Look at the Future

a

Thursday. April 16, 1959

.

HANTS HI OPERATION

Status of Atomic Power
And

.

.

site,

$5 million toward cost cf reactor.

and

(c) Per turbo-generator portion.

;

'

:

'

>

proposes,

development

and

under

Commission

birth

organization.
The
proposed would be

licly-owned
arrangement

obscured

become

pub¬

or

and

nuclear

because

the

of

w

crecy

Provision

publicly

or

is

made

in

type of business system, notwith¬
standing the claims of advocates

owned

the

of public power and government
monopoly who
would have
America believe this.

pro¬

posed legislation both for research
and
development assistance for
the

The

HTRDA-Philadelphia
Elec¬
gas-cooled reactor project as

tric
well

funds for the construction

as

there is widespread

sooner

in

mentals

the

of

recognition

the

basic

case,

(5)

Commonwealth Edison Co

to

Operation

Utility Org

By

Joliet

$51,000,000

1960

100,000,000

1961

Hear

Illinois

Inc

Consolidated Edison Co of N Y

(6)

Pressurized Water

ternal nuclear

(Pathfinder)

Sioux

..

•'"4.

'

22,8C0,0C0

1962

20,CC0,000

Falls, 3 D

1982

.

super¬

heater

Pacific Gas & Electric Co

Advanced Boiling

(Humboldt Pay)

(8)

*

66/oco

boiling water with in¬

Power Associates

:
I

Controlled recirculation

-

Central Utilities Atomic

(7)

Indian Point, N£

275,0C0*

Thorium Converter

Northern States Power Co

50,000(b)

Eureka,

Calif

-

Water

PRDC-Detroit Edison

Fast Breeder

Co

100,000

Monroe, Mich

78,000,000

I98O

13^,000

Rove,' Maes

57,000,000

i960

Parr,V So Car

28,000,000

1962

(Enrico Fermi)

(9)

Yankee Atomic Electric Co

Pressurized Water-

(lankee)

Stainless

Steel

Clad

fuel elements

(10)

Carolinas

Pressurized Water

Virginia Nuclear

Power Associates

sooner

the
government-owned
and the nation will reach the objec¬
operated gas-cooled reactor based tives it has set for itself.
a
design study authorized by
EDITOR'S NOTE: Members of
the Congress and completed last

Cost

Location

"80,000

Boiling Water

-

Est

Kw Electric

Type of Reactor

(Indian Point)

funda¬

the

.

(Dresden)

This

cooperative
organization.

-

Capacity of Plant

(a)

Nuclear Power Group,

development of
in a cloud of se¬

and government monopoly.
beginning, however, should
Elk River, Mich., REA plant, and not dictate its ultimate develop¬
the Nebraska Consumers Public ment. For there is nothing special
Power
Project are being built, about nuclear power that requires
whereby the AEC would own the its future development outside the
reactor
and
sell
steam
to
the framework of our free enterprise
similar to those under which the

Piqua, Ohio, Municipal plant, the

.

In

and Plant

early

power

CONSTRUCTION, DESIGN, Oil CONTRACT NEGOTIATIONS

UNIER

PLANTS

Name of Organization.

basic fundamentals have

These

arrange¬

an

ment with a cooperative

ELECTRIC UTILITY COMPANY PARTICIPATION IN NUCLEAR PCWEP, DEVELOPMENT

tube,

pressure

(Parr Shoals)

*

17,000

-

heavy

water moderated

of

(U)

the Edison Electric Institute Com¬

by Kaiser Engineers.
mittee on Atomic Power
provide research and de¬
follows:
velopment assistance in support of

year
To

leagues

and

some

the

on

serious

some

of

col¬

our

Committee

reservations

W.

have

tee will

the

W.

their

sites, also an
prototype in the
50,000-100,000 Kw electric size..
on

C;

With respect

has

that

be given to
for private
two

or

to established re¬
Chairman Anderson

types,

said

consideration

may

reactors

in

the

of

/

M.

E.

A.

cooperation

(b) Guaranteed.

ELECTRIC

Vice-President,

Dixon,

President,
Utilities, Inc.

Fleger,

past

as one

Ginna,

S.

King,

of

can

be
our

industry

and further expan¬
The panel report on the four

of

the

Chairman

of

such as the Philadelphia Electric-

gas-cooled

W.

President,

pected
year

of

to

be

ahead.

may

undertaken

be

ex¬

in

the

s

The year saw further resolution
some of the difficult and com¬

plex problems involved in draft¬




-•■r

PARTICIPATION IN NUCLEAR POWER DEVELOPMENT
IN

PLANNING

STAGES

,

In

of Organization

Type of Reactor

New England Electric System

Not yet selected

over

(15)

Pacific Gas & Electric Co

Hot yet

Est Cost to
Location

selected

200,000

New

.

Operation

Utility Org

By

' '/"•

200,000

aid

England

»80's

California

ESTIMATE OF EXPENDITURES BY ELECTRIC UTILITY COMPANIES FOR NUCLEAR POWER' DEVELOPMENT

McAfee,

Northern

(a)

1955 find

Co.

B. McManus,

1956

earlier

President,

Union

1956

1957

1959

.1980

$105,913,ceo

$ 89,076,100

9^*0,000

U,Ol*7,GGO

Expenditures for

(b)

$io,993,oco

$25,361,000

$33,3^,000

1,592,000

2,620,000

50/112,cco

.

Chairman of the
Other Expenditures

President, New Eng¬

G.

Rincliffe, President, Phila¬
delphia Electric Co.

Philip Sporn, President, American

(c)

2,01*1,000*

*

•

:

**,816,000'

-

Total by Years

13,03^,000

26,953,000

35,968,000

5^,928,000

110,653,000

Cujaulative

13,03^,000

39,987,000

-75,955/000

130,883,000

2l*l,736,0CC

J.

B.

Thomas,

Not®E! (a) Based

en Information obtained from the major nuclear power groups and previous

President,

Texas

Electric Service Co.

(b) Estimate
under
of

or

Projects

and

Participating Companies

3^1,859,0:0

male by-

utility organizations for the following plants in operation,
including accompanying research and development work, but exclusive

contract,

operating costs.

.

.

Dresden

Humboldt

Shippingport
of

100,123,000
.

cf expenditures by electric

construction

Santa Susana

Details

surveys

Edison Electric Institute.

Electric Power Co.

re¬

actor
is
tangible
evidence
of
further expansion of the program.
Additional industry projects now

consideration

COMPANY

the

large scale projects dramatically
points
up
progress
in projects
underway.
New
undertakings,

under

UTILITY

(1*0

Board, The Southern Co.

summa¬

advanced

,

Kw Electric

Plants

R.

progress

HTRDA

fixed price contract.

the

Electric Co.

opment continued to show vigor¬
sion.

on a

Capacity of Plant
Name

Chairman

Power

I. L. Moore,

program in nuclear power devel¬
ous

shown in,Appendix I.

other

in which

year

are

60,0C0 Kw expected.

PROJECTS

land Electric System.

The

respective groups

Middle

Chairman

Gadsby,

States

a

Conclusion

rized

company members of

Co.

the

or

(a) Utility

Notes;

Board, Rochester Gas & Electric

C.

with

1961 (est)

8,250,000

Fa

Board, Utah Power & Light Co.

R.

and

by

Saxton,

Florida

Board, Duquesne Light Co.

construction

municipal organization
public body.

A.

G.

J.

in

H.

P.

Also, he
said the Committee may wish to
consider an additional plant of
20,000-60,000
Kw
electric
for
ownership

5,000

type

.

President,

Delafield,

South

one

75,000 to

Clapp,

1963

York, Inc.
E.

150,000 Kw electric size.

AEC

B.

,

authorizing assistance
construction

J.

$2l*,500,000(e)

(Saxton)

Consolidated Edison Co. of New

organic-cooled

actor

Water

.

•-/•

i

Power Corp.

Commit¬

want to consider author¬

AEC

General Public Utilities

Corp System

Bottom, Pa

Cooled,

(c) Construction of plant is

Reviewing the program,

izing additional projects, including
one
or
two experimental proto¬
type reactors for construction by

Inc

1963

Area

Peach

30,000-1*0,coo

Graphite Moderated

Cisler, President, The De¬

troit Edison Co.

adequacy of the
program,
projects and policies recom¬
he stated that the Joint

(13)

Coast

High Temperature,

-

Helium

to

as

the

mended."

L.

Philadelphia Electric Co

3^,898,006

Florida West

50,000

Cooled,

Development Associates,

proposals
from
the E. L. Lindseth (Chairman), Presi¬
utility industry, there is proposed
dent, The Cleveland Electric
the sum of $5 million.
In intro¬
Illuminating Co.
ducing the AEC proposed bill in
J. K. Busby, President, Pennsyl¬
the U. S. Senate, Joint Commit¬
vania Power & Light Co.
tee
Chairman
Anderson
stated
"we

Gas

Heavy Water Moderated

High Temperature Reactor

as

are

unsolicited

that

(12)

East Central Nuclear Group

Floridu West Coast Nuclear Gp

on

Indian Point

Enrico

Vallecitcs

Pathfinder

(c)' Includes

Yankee

Bay

Fermi

Parr

Shoals

Facing Page

See facing page for
tion

of

the

a

various

descrip¬
private

nuclear power projects and the

companies participating therein.

research,

expenditures by individual companies and groups cf companies for nuclear power study,
and development.
These figures do net include expenditures associated with any cf the

projects

On

listed in

(b) above.

Includes in this category

are

the fallowing groups;

Atomic Power Development Associates

Pacific Northwest Power

Atomic Power Engineering
Group

Pennsylvania Fewer & Light Co Project

East

Central Nuclear Group
Florida West Coast Nuclear

Co

Group

(up to time cf cancellation)
Pioneer

Service

Group
High Temperature Reactor Development Associates

Rocky Mountain-Pacific Nuclear Research Group

Nucle&r Power Group

Southwest Atomic
Texas

Atomic

&

Engineering Group

Energy Associates.

Energy Research Associates

Volume

189

Number

Electric

5838

Electric

Utility Company Participation in Nuclear
Power
(Status

Development

Plants iii

Utility Company Participation in Nuclear Power Development

Names of Electric Utility

East

Companies Participating in Nuclear Powfcr

(Status

of March 15, 1959)

as

Snippingport Atomic Power Station, which is jointly owned by the Atomic Energy
the Duquesne Light Company,
was constructed
as a part of the AEC .Reactor
Program.
Westingh'cuse Electric Corporation designed and built the nuclear part of

Commission

Montana

the

Projects in Operation

under construction

station

with

the

Duquesne Light
Pacific

AEC.

1957.

On

Gas

Southern

of Shippingport was initiated in September 1954 and completed the latter part
Dec. 23, 1957 a full 60,000 Kw. of electric energy—the station's expected initial

Construction
of

Projects

Co.

&

New

(Shippingport)

Electric

California

(Vallecitos)

Co.

Edison

sign

Edison

Nuclear

Commonwealth

Edison

Illinois

Illinois

Power

Kansas

City

Power

Pacific

Gas

&

Union

Northern

Co.

&

Light

Consumers

Edison

Co.

N.

of

Central

Atomic

Electric

Interstate
Iowa

Power

Iowa

Southern

&

Gas

Madison

Light Co.
Co.

&

Electric

States

,

.

Northwestern

St.

I960

of

Pacific Gas

& Electric Co.
Edison

Reactor

Power

Alabama

is

Point

nuclear

plant

power

is

•

Power Company,

Northern States

is scheduled

Edison

Co.

Iowa-Illinois

Gas

Electric

Gas

Rochester

Edison

Toledo

Yankee

Public

Dallas
El

Power &

Paso

Houston

Power Co.

Foundation

Co.

Utilities

Co.

Lighting & Power Co.
Power

Electric

Southwestern

Corp.

Public Service Co.

Electric

Texas

Texas

Service

Power .&

Light Co.

Utilities

Co.

Co.
,

Co.

West

•

Texas

*The

Co.

Service

Light Co.

Electric

Southwestern

study arrangement that San

Electric

Co.

of

Indiana, Inc.

Service

Co.

of

Oklahoma

the

Co.

has

with

General

Diego Gas &

Atomic

General

Southwestern

Corp.

Oklahoma

Public .Service Co.

Gulf States

.

Co.

Public
Co.

of

Energy Research
Power. & Light Co.

Community

Electric

West Texas Utilities

Power

Electric

Co.

and

Co.

Division

Co.

AEC

is

a

member,

obtains

approval..

to

April

in

start

Vermont

expenditure

about $28

to

-

•

.

Corp.

Light & Power Co.
Electric Light Co.

Montaup

Electric

Co.
Edison

is expected to cost a total of approximately $33.1

New

Bedford

Gas

$10.3

New

England

Power Co.

Service

Public

of a

Western

Power

Hampshire

Good, Low-Cod EkebwO E&wiC£/

Co.

Electric

Co.

Duke

South

Carolina

Associates

,

,

y; *."■

/ r
;

Mow than 700 ComntmtfiM

6Q Coantim

Wg:

Power Cc.

&

Nuclear Group

Central

toin

V

Electric & Gas Co. '\

Electric

Virginia

Light. Co.
m.

New

&

Power

West Coast Nuclear Group

Florida

Induum

uv

Appalachian Power Co.
Cleveland

&

Illuminating Co.
Ohio Electric

Electric

Columbus

Southern

Co.

Power & Light Co.

Dayton

&

Indiana

Electric Co.

Michigan

.

Power & Light Cc.
& Electric Cc.

Indianapolis

Gas

Louisville

Monongahela

'Total estimated costs to the AEC would be about
r
;
'

of

Nuclear Power
Light Co.

Virginia

Carolina

East

&

Co.

Massachusetts

Carolinas

1960.

million.

Service

Hartford

-

Ohio

Power

Co.

Power

Edison

Ohio

Co.
Co.

Pennsylvania Power Co.
Potomac

Eiison

Southern

Indiana

Penn

West

Co.

Gas

Electric
Co.

Power

Alabama

Service

Public

Arizona

Eiectric Co.

City

Electric Co.

&

Baltimore

Gas

California

Electric

Central

Co.

& Light Cc.

Power

Arkansas

Atlantic

Co.

Reactor Devel. Associates, Inc.

High Temperature

4

Electric Co.

Corp.

Electric Co.

Tampa

Philadelphia

■'*'

&

Co.

Power

Power

Florida

of

million..

Co.

Public

Connecticut

Virginia

August

Light Co.

Power

Maine

Central

Nuclear Power Associates, Inc., formed in 1956, made a proposal
1957 under the third round of the Power Demonstration Reactor
Program <fcr* 'be 'development' and construction of a heavy water moderated and cccled pressure
tube * reactor" nuclear
power
plant.
The proposal was accepted as the basis for contractual
arrangement* by the AEC iff" May 1958.
The proposed plant, having a design capacity of about
17,000 Kw. (net electrical), is scheduled for' completion in mid-1962. A site of Parr, South Caro¬
lina, has "been -selected for' its location.- The Associates,, under-'the proposed agreement, would pay
estimated oaoital costs of about $22 million.
The, cost of operating the plant will bring the total
it)

Co.

Co.

Electric

Central

turbo-generator

Carojinas

Power Co.

Electric

Edison

Cambridge

Power Co.

Illinois Electric & Gas Co.

.

Light Co.
Central Illinois Public Service Co.
Central Louisiana Electric Co., Inc.

December of 1957 a proposal-was-made-to the AEC by East Central Nuclear Group^
Florida West Coast Nuclear Group (ECNG-FWCNG): for the, development and construction of
advanced heavy water moderated gas-ccoled pressure tube reactor nuclear power plant under the
third round of the Power Demonstration Reactor Program.
Construction of the proposed 50,000

Central

Illinois

Central

Power & Light Co.

Florida West Coast area, would be scheduled for
"accepted as the basis for contractual arrangements by
the AEC In. February 1958, subject to enactment of the necessary authorization and appropriation
legislation/ On being so advised, ECNG-FWCNG determined to initiate the research and develop¬
ment immediately,, with the understanding, that it was doing so at its own risk pending considera¬
tion of the legislation and negotiation of a contract with
AEC. The necessary legislation was
adopted in August 1958.
Negotiations covering the contract between ECNG-FWCNG and AEC are
in
the final stages.
The research and development program has gone forward steadily since
February 1958- and approximately $670,000 had been spent as of Feb. 15, 1959.

Cincinnati

V

Kw.

(11) in

(electric)

reactor,

be located
The proposal

to

completion by mid-1963.

in

the

(12) In November 1955 a proposal was made in response to an invitation from the AEC by
Philadelphia Electric Company in cooperation with the newly organized non-profit High Temperature
Reactor Development Associates, Inc. to design, construct and operate a prototype high temperature
helium-ccoied, graphite moderated nuclear power plant. The proposal call's for operation of a
30,003-40,009 Kw. (electric) nuclear plant on the Philadelphia Electric Company system in 1963.
Construction of the plant is on a fixed price contract basis for $24.5 million.
The proposal
provides for the AEC to contribute up to a maximum of $14.5 million in aid of research and
development. At present the proposal is under consideration by the AEC.
(13) The

General

Public

Utilities

Corporation System has proposed the installation of a small
5 Mwe developmental water-tyDe reactor- at the Saxton, Pa. generating station of its subsidiary,
Pennsylvania Electric Company.
The reactor will be connected to existing generating equipment
and will fee used for conducting a researh and development p'rogram with
primary emphasis on
achievement of cost reduction and increased efficiency in the use of nuclear fuel.
One of the
primary objectives of the program will be to obtain information for the design cf a nuclear
superheater.
The

GPU System, Westinghouse Electric
Corporation, and Gilbert Associates, Inc. Westmghouse will supply the reactor and associated
equipment to the GPU System for a fixed price of $6,250,000. The GPU System will supply the
plant site, make the existing turbine available and bear the net operating and maintenance and
insurance costs, estimated at approximately $2,000,009.
Westinghouse will be responsible for the
nuclear fuel requirements cf the project for the fust period of five years of operation, including
project

fabrication

and

will

be

a

processing

cooperative

effort

involving

tne

costs.

Power

(14) The New England

plant sometime

pev/er

growth of
reactor

the next

(15) Pacific Gas
for

a

large-scale
in

the

Planning

Stages

Electric System reports that it is its intention to build a large nuclear
the mid '60s.
The exact size of the plant will depend upon the load
years.
The unit, however, will
be made by the end of 1961.

be over 200 Mw.

The selection of the

reactor

few

is

and

reports that it is continuing to study manufacturers'
that efforts will continue to be given to the project

reached.

months.

At




proposals
until

a

The utility is hopeful that a decision on the matter can be
present negotiations are underway for a suitable plant site.

i

Co.

Light Co.

&

Co.

Power Co.

Gulf

Utilities Co.

Gulf States

Electric

Hawaiian

Power

Illinois

Co.

Service Co.

Public

Iowa

Co., Ltd.

Power Co.

Idaho

City Power & Light Co.
Power & Light Co.

Kansas
Kansas

Kentucky Utilities Co.
Louisiana Power & Light Co.
Mississippi Power Co.
Mississippi Power & Light Co.
Missouri

Public
Power

Growing

Service Co.

Montana

Co.

New Orleans Public

York

New

Niagara

State

Mohawk
Gas

Pacific

Service, Inc.

Electric & Gas

Corp.

Power Corp.

Electric Co.

&

Pacific

Power

& Light Co.

Pennsylvania Power & Light Co.
Philadelphia Electric Co.
Portland General Electric Co.
Public Service Co. of Colorado
Public Service Co. of New Mexico
Public Service Co. of Oklahoma
Public Service Electric & Gas Co.
Puget Sound Power & Light Co.
Rochester Gas & Electric Corp.

Light & Power Co.
San Diego Gas & Electric Co.
Sierra Pacific Power Co.
Southern California Edison Co.

Joseph

Southwestern
United

& Electric Co.

satisfactory conclusion
made

in

several

type will probably

in

Edison

Detroit

•""

Illuminating

Electric

Delaware

St.

Projects

Gas & Electric Co.

Cleveland

was

Electric

Pov/er

Co.

Illuminating Co.

Utah

Power &

West

Texas

Light Co.
Washington Water Power Co.
General

Public

Utilities

Utilities

Co.

Corp.

System

INCREASE

1958
Customers Served

Operating Revenues
Utility Plant (original cost)
Kilowatt-hour Sales

System Capability
PUBLIC
The

1949

367,357

284,459

82,898

$81,417,702

$40,298,779

$41,118,923

$446,525,032

$148,424,231

$298,100,801

4,366,197,737 KWH

2,172,243,000 KWH

2,193,954,737 KWH

1,130,000 KW

SERVICE COMPANY OF

381,674 KW

748,326 KW

INDIANA, INC., Plainfield, Indiana

Company's 1958 Annual Report V/ill

of

if
&
Congressional*

Dynamics Corp. will be discontinued
HTRDA project, of which San Diego Gas

Co.

Atomic

Boston

completed and the 125 ft; vapor container sphere is under erection.
Work is well underway in
the manufacturers' plants on fabrication of the nuclear reactor vessel and components and on the
conventional generating equipment.
The plant is expected to be in operation in 1960. The project,
being undertaken as part cf the Power Demonstration Reactor Program, is expected to cost about
$50 million. Total requirements to be financed arc calculated at $57 million, including cost of
the initial core.
In addition, the AEC is contributing the equivalent of $5 million in the form of
research and development work toward the cost of this project.

CVNPA

Indiana

Co.

Electric

Light & Telephone Co.

Central

Co.

Electric

Co.

Electric Co.

'

Co.

&

Service

&

Service

1

Light Co.

Gas

Gas

Atomic

Public Service

Electric

Electric

Wisconsin

Rowe, Mass., using stainless steel clad uranium oxide fuel elements. The building
has been erected, the concrete shielding for the reactor has been

reacto" at

$14.6

Texas

Vv
Co.

Service

Electric

,

Cc.

Light Co.

Power & Light Co.

Public

Western

Group

Louisiana

Power

Power &

Southwestern

Gas

Power &

Northern

Power

&

Public

Kentucky Utilities Cc.
Lake Superior District Power Co.

Electric Co.

Island Lighting Co.
Power Co.
Philadelphia Electric Co.
Mississippi

--

The

&

Corp.

Power Co.

Public

Co.

Power & Light

Oklahoma

Power & Light Co.

Iowa-Illinois

Long

Potomac

Electric

Interstate

Co.

Kansas Gas & Electric Co.

Missouri

Co.

&

Central

Co.

Light Co.
Power

District Electric Co.

Louisiana

Electric Corp.
Co.

Central

Co.

Power

Power

Power

Electric

Illinois

&

V New Orleans Public Service, Inc.

& Gas

Power- Engineering

Central

Light Co.

Detioit

(8) Trie- Enrico Fermi plant is sponsored
by the Power Reactor Development Company and The
Edison Company.
Atomic Power Development Associates, Inc. is performing research and
development and fumnishing the reactor design for the project.
Major construction began in
August cf 1956 and is proceeding on schedule toward completion in late 1960.
Cost of this plant
to the utility organization concerned is expected to be over $73 million.
The AEC is contributing
the equivalent of $4.45 million toward this project, being constructed as part of the AEC First
Round Power Demonstration
Reactor Program, in the form of research and development work.
(9) The Yankee Atomic "Electric Company is building a
134,000 Kw. (electric) pressurized

AEC

&

Geoigia
Gulf

Detroit

(10)

Electric Co.

Ohio

Co.

Power

Delaware

60,000 Kw. advanced boiling water reactor at Eureka, Calif. This project, scheduled for criticality
July 1, 196?, is tc be financed entiiely with, investor funds, including research and development.
Bechtel Corporation will design and construct the plant on a regular commercial contract basis.
General Electric Company will supply the nuclear and electrical equipment.
The total cost of the
project is "estimated to be $20,000,000.
Detailed design was started in September 1958 and field

the

Wisconsin
Atomic

Energy Associates

Power

Louisiana Electric Co.

Kansas

Gas &

Edison

Wisconsin

Coip.

Atomic

Mississippi

Electric

Electric

& Electric Co.

Diego Gas

Gulf States Utilities

•

;

Electric Co.

Service

Toledo

Electric

&

Electric Co.

Power

Consumers

on

to

Co.

Co.

& Southern

Columbus

being

including research and development work. The AEC will contribute the equivalent of
million toward the cost of this project in the form cf research and development work.
(7) The Fa*fic Gas & Electric Company is-undertaking the development and construction

the

Potomac

Public

Gas

Gas &

Cincinnati

project of Commonwealth Edisor,

a

million

house

(Humboldt Bay)

Co.

Development

Power

Hudson

Central

research, development and construction of this project under the third round of the Power Demon¬
stration Reactor Program.
The plant will be located on the Big Sioux River near Sioux Falls,
South Dakota.
It is scheduled .to be in operation in 1962.
The plant, which will be owned and

construction

Philadelphia

Mexico

Co.

Power Co.

Empire

Light Co.

State

Light

Central

Island Lighting Co.

York

New

-

Indian

operated by

Detroit

Corp.

Co.

Electric

&

Arkansas-Missouri

Indianapolis Power & Light Co.
Jersey Central Power & Light Co.

Rochester

financed and constructed by Consolidated
Edison Company of New York, Inc.
Foundation work and erection of the containment sphere is
essentially complete and other major construction work is well under way. The plant is expected
to be completed by 1961.
(6) The Pathfinder project is a joint undertaking of the Northern States Power Company arid
Central Utilities Atomic Power Associates-.
In 1957 a contract was signed with the AEC for the
(5) The

Corp.

.

.

uuciear power station

Service

The

Company with the
cooperation of i\!uclear Power Group, Inc.
Major construction on the 180,000 Kw. (electric) dual
cycle boiling water reactor, located 50 miles fiorn Chicago, III., was started in Juue*1957. This
plant, privately financed, is being built by General Electric Company, with Bechtel Corporation as
subcontractor, for a contract price cf $45,000,000. In addition, overheads and site cosis will be
something over $6,000,000.
The contract calls for completion by Dec. 7, 1960.
Construction is
proceeding ahead of schedule and the project is expected to be ready for operation by the
Dresden

Public

Power Co.

Power

Power

Arkansas

Niagara Mohawk Power Corp.
Pennsylvania Electric Co.

Power Co.

&

San

Inc.

Co.

Utilities

New

Co.

Light

Wisconsin

Plants Under Construction, Design or Contract Negotiations
(4) The

Public Service Co.

Power

Joseph

Y.,

Co.

Colorado

Co. of

Washington Water

Metropolitan Edison Co.
Mississippi Power Co.
New Jersey Power & Light Co.

Co.

Power Co.

.

Otter Tail

Public

Long

Co.

Public Service

N.

Service

Utah

Co.

Co.

Hartford

\

of

of

Co.

Public

.

Co.

Light

Electric

General

Service

Southwest

Edison

Gulf

Co.

Utilities

Co.

Light

&

Power

Co.

-

Co.
&

Georgia

Co.

Valley

Mississippi
Northern

Gas

&

Power

Edison

Power

General

Associates

Power

Pacific

Group

Co.

Power

Public

Power Co.

Detroit

Inc.

Y.,

Illuminating

Power

Delaware

Co.

&

Nuclear Research
Service

Electric

Portland

Co.

Electric Corp.
Electric Co.

Light Co.

&

Power

Public

California

&

Light &

Consolidated

Co.

Co.

Electric

Gas

Electric

Connecticut

Electric

&

Gas

Cleveland

Co.

Utilities

Gas

Hudson

Cincinnati

States Power Co.

Central

entirely investor-financed nuclear power reactor project to be completed in the world. The
& Electric Company furnished the turbo-generator facilities and the General Electric
Company the reactor.
I-:■■'*■
:
'
V.I--'. V- V'V'
(3) The sodium reactor experiment is a. part of the AEC's reactor development program;
It
was
designed, constructed and is being operated for the AEC by Atomics International.
The
Sou.hern California Edison Company installed ar.d is operating the steam electric plant at a ccst
to date of Si,573,OCO -and is purchasing the heat energy developed by the reactor for 45 cents
per million LTU.
'
ihe plant was initially placed in operation in July 1957.
Of major importance in this project
is the company's endeavor to develop a liquid
metal to water steam generator, vital to the
successful generation cf electrical energy from all types of sodium cooled reactors.
Although the outlet sodium temperature of the reactor system has not been brought up to
the full design, temperature as yet, the operation of the steam generator and entire steam elec¬
tric plant has been stable and good.
v
The plant has now been in operation over 2,000 hours and, in addition to withstanding and
giving a gooo operating performance under 30 planned and accidental scrams, it has capably
met all other experimental requirements of the reactor.

Corp.

Light Co.

Electric

Consolidated

Central

Water Power Co.
Utilities Council

Mt.-Pacific

Arizona

Co.

Power

Baltimore

Service

Power

Central

Pacific -Gas

Co-.

Electric

Rocky

Development Associates

Power

Alabama

Group

Power

American

Development

&

Groups
Atomic

General

Sound

Puget

Contract Negotiations

or

Commonwealth

first

to

Portland

Group

Co.
Electric Co.

Light

&

Power

Puget Sound

<

(see item 4)

Power Co.
Co.

Power

Washington

Co.

Susana)

(Santa

Co.

Electric

&

Study, Research

project would reduce the government's share of the cost by about $30,000>000.
Through 1958,
Duquesne has spent $25.0 million for construction of this station.
(2) The Vallecitos nuclear reactor plant in California, a joint project of the General Electric
Company and the Pacific Gas & Electric Company, was started in 1956.
It was completed and
began feeding elctricity into the Pacific Gas & Electric Company lines the latter part of 1957.
This pilot plant for the large-scale Dresden nuclear power plant now under construction is the

water

Stages

Electric System

England

Pacific Gas

Projects Under Construction, De¬

capacity—was generated and fed into the Duquesne Light Company system.
The plant was continued in preliminary operations until July 1, 1958 when the AEC and the
company concluded that sufficient tests had
been conducted to demonstrate that the operating
characteristics of the station were satisfactory for safe extended operation.
Subsequently, the plant
has been operated for long periods at full design power, demonstrating its .use and reliability as
a
generating unit.
Additionally, the plant has been used for the conduct of a test program
prescribed by the AEC.
Early^hi 1959 a training program on the operation of Shippingport will
begin for representatives of domeSTTCand foreign operations.
i he
D.quesne Light Company provided the site, the conventional part of the station, and
contributed $5,030,000 toward the cost of the nuclear part.
The company is operating the entire
piant, including the reactor, and is purchasing the steam from the AEC at a price substantially
higher than the cost of steam produced at the company's conventional plants.
When the AEC
selected Duquesne Light's bid,
it estimated that Duquesne's participation in the Shippingport

middle

Planning

in

and

Development

States

Northwest

Pacific

(1) The

Pov/cr

Power Group

Pacific

Operation

Operations Group
& Light Co.
Pcwer Co.

Nuclear

Northern
Nuclear

35

11)

(see, item

Group

Nuclear

Central

Minnesota

Minnesota

Study, Research, Development Operating and Construction Projects

of March 15, 1959)

as

(1759)

The Commercial and Financial Chronicle

...

Gladly Be Sent Upon Request

£$

The Commercial and Financial Chronicle

(1760)

Continued from page

uct whenever that is the

24

Electric

revenues

Utility Pricing

in proper

Policies for Tomorrow
Medallion

Home

there

Program,

been

unable

stated the

to

well:

balance; other¬ effectively enforce their statutory
rights.

not

monthly budget-paymentplans, the same as the

Some

for the maintenance and

expansion
of
their
systems
through equity and debt financing
would
become most difficult,
if

should be prepared to offer to cus¬
tomers

utilities have

the

impossible

.

."

.

•

contend

that

the

"The

value

utility

not

industry will "do all right" under
original cost regulation because
so much plant will have been in¬
stalled in a period of rising prices.
About one-half of

our

tact

is

made

customer.

The

with
old

the

ultimate

saying is

still

true that "shoe leather has to

be

out and doorbells have to be

worn

rung" if the industry is to make
the

sales

maximum

necessary

to

achieve

utilization

of

the

in¬

vested dollar. Someone has to ask

Cor the order.
The

major

load utilization
operations, both
on
a
continuing b a s i s, are no
longer a luxury to be enjoyed
only by large companies. Today
the question is not whether to en¬
gage in such work but, rather,
how to conduct research activity

(6) Research

and

analyses

usefulness

maximum

for

in

sup¬

fair value rate

of

static

a

"just and

present price levels,

"Just

and

conclusions

within

the

proximity

to how far kilowatt and customer

controlling.

economic conditions. In

The Montana Supreme
a

recent

decision, puts it

Court, in
very suc¬

to

cinctly:

number

a

these situations companies had
take their cases to the higher

of

state courts. It is at this level that

affect other

businesses, and, in ad¬
"The Hope case is not binding we have had some reaffirmation
charges, which go on regardless of
dition, the utility business has the
of the fact that an objective look
the use of the
service, should be added risk of the complexities and upon the Public Service Commis¬
sion of Montana. Its action must can be taken at the economic as
spread over the energy charges.
political implications of regula¬
square with the Montana statutes well as legal facts of the utility

(3) The past economies obtained tion.
and the decisions of this Court."
through the use of larger, more
I believe that much can be done
(March 19, 1957, 18 PUR 3d 292)
units which, in spite of to
improve the utility companies'
Other courts have upheld this
constantly rising fuel prices, have
regulatory relations. We should
resulted in the ability to hold the
seek to broaden regulatory con¬ principle.
cost of fuel per kilowatt-hour at
We have taken a "new look" at
tacts and inquiries beyond the ac¬
existing levels, will need to be re¬
what the legislative rights are in
counting control level. We should
inforced with the added
various
protec¬ better inform regulators as to the the
states.
Among the
tion of provisions for
fuel-price investment and policy
problems states, including the District of
ad justments. It is
generally agreed that confront companies if cus¬ Columbia, the laws in only one of
that technological
improvements tomers are to have
those states (Maine) today specif¬
adequate serv¬
remaining in the future may not ice
ically prohibit adequate demon¬
under our profit system.
he able to always offset the in¬
stration of the fair value principle.
In the recent U. S.
Supreme
creasing price of fuel.
A study of existing legislation
Court decision
in
the
Memphis
(4) Sales promotion expendi¬
that
directives
as
to
case, the Court
took a realistic indicates
tures

business.

efficient

may

we

are

to

have to be increased if
obtain

the

maximum

customer utilization of and satis¬
faction with the volume of
service
lie will be
receiving. Informed and
satisfied customers are a bulwark
to investment protection.

(5) The annual operating costs
for all-electric
utility service in
the all-electric home will
require
considerable customer education.
To achieve this standard
of

tric

elec¬

look at the regulatory problems
confronting natural gas companies.

value
".

.

range

shall

.

the

from

way

evidence

of

." through
principles set forth by Mr. present value
Justice Harlan, who delivered the
may consider evidence of
present value
." to such state¬
opinion of the Court, are equally
The

.

.

"

.

.

.

.

applicable
electric
come

".

to

the

utility

operations of
companies
that

before regulators for review:

.

.

Business

reality demands

that natural gas companies should
not be

precluded by law from in¬

ments

CHART I

".

.

shall consider every
fact which in its judgment
may or
does

as

have

value.

.

.

..

any

bearing

such

on

cost

of

Inflation

of what I call the "forward

base approach." This is
It

is

some

a

rate-

wilMng-

to look beyond the test year.
an effort on the part of the

commission

to

accord

the

utility

element of fair value deter¬

mination

knows

which

the

.

.

the

economic

commission

realities

of

present-day inflationary condi¬

answer

precise

determination, does not make the
problem unsolvable.
."
.

Depreciation Policy

Looking to the future, deprecia¬
accruals will require a re¬

tion

examination

of method

and

re¬

a

appraisal of policy. As price levels
continue upward, the electric in¬
dustry is faced with some rather
simple facts with respect to the

adequacy of these accruals. When
utility service is rendered: to cus¬
tomers, property employed in that
service
is
being used up. The
charges now included in the utility
price structure are recovering only

the

number

invested.

of

dollars

originally

inflation

As

continues

and the costs of plant construction

increase,the

dollars

recovered

through

present pricing methods
constantly smaller and smaller

are

dollars

in

terms

services that

of

capacity and

be

bought. The
people, the automobile peo¬
ple, in fact, all those with heavy
long-term investments, are sub¬
ject to this same relentless effect
can

steel

of inflation.

regulated

keep

However, these

industries

non-

able

are

to

with the changing eco¬
nomic conditions by the ability to
change prices quickly. These in¬
dustries provide for themselves in
their price structures an adequate
margin with which to keep their
pace

property

commissions

are
begin¬
ning to recognize present-day in¬
flationary conditions by utilization

ness

changes.

.

whole.

Since

the

eco¬

nomic facts facing the utilities are
different than those facing non-

no

regulated business, utility pricing
and regulatory policy could well
contemplate the same protection
of

a

wider

It is

earnings margin.

no

«

to say that the

answer

accounting,
tax
and
regulatory
problems that would be created by
current cost depreciation are "dif¬
ficult or impossible of solution."

tions warrant.

Obviously, if utilities were to in¬
crease
depreciation accruals and

Undeniably, forward rate base
does
give
immediately
needed

still be regulated under the orig¬
inal cost depreciated concept, the

revenues.

current

tions

it

for

must

It utilizes the dollars of

or

projected

this
be

plant addi¬

purpose.

recognized

result

However,

the

that

value

such

would

be

further

even

reduction in rate base. This is all
reason
why the fair
principle should be adhered

more

depreciated

as

the

a

determination does not develop

to.

a

."

It is clear that in those jurisdic¬
tions which have such laws but
where the commissions still use

living, utility companies creasing the prices of their
prod¬ original




all

consider

Recognition
Some

•

difficult, however, and the
generally subject to

it be said

can

reasonably compilable.
Furthermore, looking down the

'

not

are

our

(structure, including initial charges
It has been aptly stated that the
and minimums, together with a
private utility industry is exposed
reappraisal of pricing policies as to all of the economic forces that

of

that original cost and present fair
value

'

The fact that the problem
valuation for rate making is
.

of

to
be
plying management with more adherence to the use of histori¬
study as a guide precise information as an aid to cally recorded costs as the sole cri¬ road, this will only stay true if we
to rate making for the
future, may the determinations of company terion of value for rate-base pur¬ have no further price inflation.
he summed up thus:
poses. Nor does it mean setting a The conclusion is inescapable —
policies and actions.
(1) Investment to serve the cus¬
rate of return a fraction of a point that spending money at
continuing
tomer is
Regulation
above "bare bones" cost of money. inflationary price levels does not
increasing on a kilowatt
and a customer basis. When we
If the forecasts that we have
inject fair value into the rate base
It has been
stated quite fre¬
take into account the factors of heard at this
meeting are to be quently that the fair value con¬ for all the dollars previously com¬
depreciation, insurance and taxes met and companies are to receive cept "died" with the
mitted at lower price levels.
Hope decision
which must go with the direct fair
profits, it will be necessary to of the U. S. Supreme Court in
Somewhere in the original cost
capital costs, it is evident that the take a new look at regulatory 1944.
Nothing could be further depreciated rate-regulation proc¬
rate structure will have to
recog¬ policies. The changes to come will from the truth. The
Hope decision ess, a large portion of prior invest¬
nize
higher charges on higher have to be evolutionary, perhaps came in the Federal
regulatory ment has been "plowed under"
fixed investment and, at the same sometimes
on
an
experimental area at a time when the general when it comes to producing "real"
time, be further simplified and basis.
Regulators
may
well be price level was not only steady earnings.
made more promotional to
permit asked to accept proposals resting for a long time but far below the
As
inflationary
developments
the sale of service in volume.
on
good business judgment and
inflationary levels that we have continue to push prices on up¬
(2)
The
general increase
in economic principles which may
today. We must not overlook the ward, a number of decisions this
operating expenses per customer not be susceptible of precise cost fact that
today, at state levels, the past year have partially come to
necessitates a re-examination of
accounting proof, at least by con¬ provisions of state laws arc still
grips with the facts of present-day
front-end
charges
of
the
rate ventional methods.
drawn from

of those

enterprise, built

wholly

reasonable."

."

.

.

new

base if the utility's rates are to be

reasonable," uncler inflationary
conditions, does not mean slavish

.

of change, and must con¬
stantly readapt itself to the effect

electric plant construction
con¬ 1950,
future, it costs, on an index base, have in¬
is axiomatic that regulation must creased over 50%. From this trend
give weight to a utility company's it is evident that only in the case
a

of justice or fundamental

"The fixing of just and reason¬
rates
must
function
in
a

tinue into the indefinite

demonstration of

fair

of expediency,

ones

world

day and which will probably

on

of

all

able

of Fair
the kilowatt-hour use of 37
day electric plant dollar invest¬
Value Rate Base
customer has available for every
million existing homes.
ment was installed prior to 1950.
Experience tells us that no mat¬ other participation that he makes
In taking a realistic look at the By then, prices had already risen
ter what the level of rate is, sales in
the
American
standard
of
inflationary conditions of the eco¬ substantially from levels existing
results are obtained only as con¬ living.
nomic world in which we live to¬ at the end of World War II. Since

ing

against

arguments

are

ones

fair treatment:

present-

Greater Utilization

for-serviee

Thursday, April 16, 1959

famous Fort Dodge r,ate case,
case for fair value very

now

action

wise procurement of the vast sums
necessary

remains the sales task of improv¬

sole measure of the rate base, such
continues simply
because

econom¬

ically necessary means of keeping
the
intake
and
outgo
of their

.;

.

single dollar of fair value for
plant dollars that have been

private electric utility
give recognition to fair value
depreciation was Iowa-Illinois Gas

all

committed

to

the

enterprise

at

lower than current price levels.
The Iowa Supreme Court, in the

CHART H

The first

to

Electric

&
the

'

Company,

dictum

the

of

Following

Iowa

State

Supreme Court in the Fort Dodge
decision, it began booking fair

^l^iation in June of 1958.
an

economically sound step

o^ rate

making and acyy -y. -iy
^ interest to note that one
^country's large municipal

m

is

oris

iation

currently

on

ramento

in

its

ates:

accruing

fair value basis,

a

Municipal Utility
Report for

Annual
-

•

-

*

•

•

".

|^tn 1957 the District adopted
with^Me full approval of its in¬
dependent auditors

cipl«t;qf

the prindepreciation

...

providing

base<|ypn the fair value

of

its

property. In periods of substantial
inflation

deflation, because of
changes in the purchasing power
of the dollar, depreciation based
oil

the

cost

or

is

not

a

fair

measure

property consumed

in

of

opera¬

tions. This principle of accounting,
sometimes referred
to
as
'price
level
a

depreciation,' recognizes that

utility should collect in

an

amount to

cover

revenues

the fair value

of its property consumed in
tions if the real
.

operaf
capital dedicated

Number 5838

Volume 189

to

business

tne,

to

is

-

The Commercial and Financial Chronicle

.

.

be .main¬

v""V "

tained." u

Canadian

'

ernmental

When full and

adequate consid¬
is given to some of the

bodies shows

Hiat

dent

determination

the

of

pricing policies for tomorrow is
of the most important matters

one

that will confront

utility

company

managements.
:
;
Primary
responsibility,
o f
course, rests in the hands of the
chief
executive.
But
practical
operation demands that this re¬
sponsibility should, in our opinion,
be delegated to a staff organiza¬
tion
responsible to the chief
policy-making executive.
The responsibilities to be dele¬
gated are:
^4-;.;,;

it

no

The

following table in the Bank of Montreal's Business Review
clearly indicates this year's expected changes
capital investment in 1959 versus 1958. The
survey is based on the reported spending plans of 16,000 f inns and
governmental bodies. Noteworthy is the cutback in construction
outlays with purchases of machinery and equipment only fraction¬
ally lower, and the shift from "business" outlays to capital spend¬
ing by public bodies:
of March 25,
1959,
in the make-up of

CAPITAL EXPENDITURE IN CANADA

Outlays
in

Primary Industries (a)-,-

Clans

in

for

1959/58

Manufacturing
Utilities (b)

To develop the rate struc¬

ture that will produce, on a con¬

structure

in

such

a

To
and

more

conduct

research

on

analyze operations so
precise information will

for policy decisions
generalized opinions.
(5) To keep the management
group, of which rate and economic

rather

should

be

pari, well informed

integral

an

rate regu¬
latory and economic matters at the

New Construction..,New Mach. and
(a)
,fv

Includes:

ment; and
Includes:

(c)

Includes:

_

Equipment

agrienlture;

-

and

The

utility

on

business,

operation

contacts,

in

and

becoming

is

the chief executive

forestry;

fishing;

transportation;

as

its

vast

wholesale and

other commercial

schools

retail

mining

petroleum

and

0.3

—

and

communications;

Briggs

CHICAGO,

111. — The Invest¬
ment Analysts Society of Chicago
will have as guest speaker at their
luncheon today at the Midland
Hotel
It.
P.
Briggs,
Executive
Vice-President of

Consumers

Power Company,

Mr. Briggs will

speak

the current operations

on

future

outlook

for his

com¬

industry. Before
joining
Consumers
Power
Mr.
Briggs was Professor of Account¬
ing and Vice-President of the
University of Michigan.
and

Lee

the

Higginson Office

PROVIDENCE, R. I.—Lee Hig¬
ginson Corporation has opened an
office at 10 Dorrance Street under

direction

Nathaniel

of

R.

Tingley and Frank D. Livingston.

churches; and other social

LISBON, Ohio—L. A. Caunter
& Co. has opened a branch office
at 124 West Lincoln Way under
the

management of James J. Mur¬
phy.
•

Scott

Planning Branch

Scott
Planning Company has
opened a branch office at 509
Fifth
Avenue, New York City,
.

under the direction of Bernard L.

Sorkin.

BROOKLYN, N. Y. —Irving
engaging in a securities

Amsel is

•<

.

Days

Days

.1 Year

Days

29

24

49

20

7

6

16

24

8

26

,,39.

21

48

20

8

3

12

27

43

3

15

12
3

42*

M

23;,/

4

ber, textiles, methanol and

(Special to The Financial Chronicle)

Minn. —Rich¬

SPRINGFIELD, Mass.—Bernice

ard J. Grant has been added to the

M. Delaney has become affiliated
with S. Romanoff & Co. She was

MINNEAPOLIS,
of

Keenan

&

Clarey,

Inc.,

formerly
Co., Inc.

with

H.

L.

Robbins

or

less

Joins

(Special to The Financial Chronicle)

Surprisingly, 44%
they were going to spend

the second

Copley Staff

(Special to The Financial Chronicle)
Calif. — Richard
W. Bourne is with Paine, Webber,
DENVER, Colo. — Roger R.
mere this year, 30% the same, and
Jackson & Curtis, Orpheum The¬ Fleck has joined the staff of
Cop¬
26% less. This certainly is an in¬ atre
Building.
ley and Company. 818 Seventeenth
dication of confidence in the longStreet.
range future.

With E. E. Henkle

Again led by ferrous and
ferrous

trend

•v

non-

metals, prices continue to

upward.

Concern by

Joins Harris

(Special to The Financial Chronicle)

Commodity Prices

pur¬

LINCOLN, Neb.

—

Marvin D.

Nelson has become connected with
E. E. Henkle Investment

Co., Fed¬

eral Securities Building.

Upham

MINNEAPOLIS, Minn. — Jevne
D. Baskin has joined the staff of
Harris, Upham & Co., Northwest
Bank Building.

will continue during
quarter. But, with or

without

steel

much

a

concern

current

strike,

there

is

about the effect the

will have on
quarter.
of new orders
again is reassuring, with 48% of
the members reporting increases,
44% listing no change, and but
3% showing decreases. Production
figures have improved again over
February, with 47%
achieving
more output, 46% unchanged and
7% having decreases.
Commodity prices are again re¬
ported as moving upwardT This
has led many of our members to
express concern about the present
inflationary
tendencies
and
to
buying

spree

business in the third

The

summary

weaken

that
our

this

will

further

position against the
products on our

influx of foreign

markets.

Strike

threats, increased pro¬
higher prices have
cause Purchasing
Executives to increase their in¬

duction,

FLORIDA:

and

KEY TO BETTER

CLIMATE!

all combined to

ventories.

Coupled with this is a

willingness to extend again a little
into

farther
tracts

for

While

'*

a

Our

on

■

con¬

is

and

Today, the' nation's playground is /wygroimd for
growing parade of new businesses. Climate is the
clue—a living climate that makes for happy people
and a business climate that makes for healthy
a

profits.

"V

rich reservoir of manpower,

friendly governments,
superb transportation facilities ; . .
and dependable electric power guaranteed by the
greatest expansion of generating capacity in the
history of FI'&L.

lower

costs,

'

slightly

month ago, there re¬
substantial pool of avail¬

man

enced

future

'

employment

better than

able

the

production and MRO

materials:

&

SAN DIEGO,

Agents' Committee adds that there
is
general agreement that im¬
provement

some

With S. Romanoff

Clarey Add

(Special to The Financial Chronicle)

1958.

said that

a

of both experi¬
inexperienced people.

power

Florida is
state

in

growing faster than any other large
It offers bulging markets, a

the country.

In every sense, a
for your

Florida future makes seh"s<£~.

business, too!

FLORIDA POWER & LIGHT COMPANY
MIAMI, FLORIDA

special question for March

business from offices at 1989 East asked if 1959 capital expenditures
19th Street
- —r
for our members' companies were


http://fraser.stlouisfed.org/
!
Federal Reserve Bank of St. Louis

—Per Cent Rcportlnjr00
(i Mos. to
90

ao
•

hand, capital goods industries are
urgently seeking orders. The Na¬
tional Association of Purchasing

mains

Irving Amsel Opens

materials.

Paine, Webber Adds

going to be more, the same,
in

ex¬

last

Keenan &

change in commodity prices.
than

an

production

month, certain electrical equipment.
steel and copper items are re¬
On the
down side are: Lead,
steel scrap and sugar.
ported in short supply.
On the up side are: Brass, cop¬
In short supply are: Steel sheets^
steel piling and helium.
per, steel, silver, platinum, lumto

staff

to

reported last month, the per¬

tension of coverage on

Pillsbury Building.

comment

L. A. Caunter Branch

As

centages continue to show

29

Specific Commodity Changes

Concern is expressed about pos¬
buying in third quarter and current upward

continues

roils.

12

_

sible let-down in

business

to pay

21

Supplies
Capital Expenditures

and

busy basic metal producers.

Over-all

additions

6

Production Materials

develop-

MRO

hospitals;

laid-o£2

of

February:

services.

universities;

recall

Buying Policy

Mouth

Supplies
Capital Expenditures

trade; finance, insurance and real estate;

improve, according to the com¬
posite opinion of purchasing agents
who comprise the N. A. P. A. Busi¬
zational set-up for the job ahead.
ness
Survey
Committee, whose
Much progress has been made in
Chairman is Chester F. Ogden,
many companies. Much more re¬
Vice-President, The Detroit Edi¬
mains to be done if the electric
son
Company, Detroit, Michigan.
utilities are to handle prudently
However, the saw-toothed business
and price adequately the tremen¬
pattern still prevails, with basic
dous service demands of custom¬
metal producers about to set rec¬
ers, and at the same time make a
ords and finding it difficult to
fair profit for investors.
meet all demands.
On the other

To Hear R. P.

for their additions.

MRO

1.5

—

the

newcomer

inven¬

Production Materials

institutions.

welfare

officer to

Chicago Investm't Analysts

unchanged

reasons

in

workers—making it difficult fox

The number

March;

1.1

—

Recent survey shows generally improved business continues—
characterized by order-hungry capital goods industries and

and

as many of
gentlemen have done in the
past. The time is ripe for a con¬
structive appraisal of your organi¬

the

ered

9.4

4-

Purchasing Agents Report Rising
Capital Expenditure Plans

to its
public

be his "own rate man"

the

2,462

warehousing;

you

pany

are

4-12.2

the construction industry.
power;

Includes:
and

complex. No longer is it feasible

and

3.0

Similar

<d)

local, state and national levels.

for

5,866
2,455

4-15.3

than

research

own

5,955

with

tory is 41%. Beyond the strike
threats, purchasing executives say
that better production, price ad¬
vances
and
seasonal
depletions

3.6

—13.6

—

those

Comprising:

available

be

8,321

of

municipal waterworks.

(4)
loads
that

8,417

ductions this month.

0.4

+

so

Hand to

TotaL—

<b)

rate. interest.

1,728
550
1,456

5,784
2,933

Departments

693
1,781
490
1,239

8,717

Institutions (d)
Government

that

manner

1,001
1,043
1,844
799

454|
1,110

Housing

the

regulatory standards control¬
ling the utility will be adequately
met and good business relations
with customers will be maintained.
(3) To represent the company
before regulatory commissions and
similar groups on all matters of

2,308
690
1,430

Commercial Services (c)_^

tinuing basis, the growing revenue
requirements of the company.
(2)
To
administer
the
rate

997
1,082
2,135

inventjqry increases),

reporting in Febru¬
and only 16% showing re¬

ary,

Change

195!)

J958

.1,246
1,479

chart

with 34%

Outlays

15)57

over
possible; strikes in
Employment;
steel, copper and rubber will
There are 29% of our reporters
probably sustain demand and re¬ who
indicate more employment in.
sulting price patterns at Currently
March, essentially the same as
high levels through the second last month.
While
construction
quarter. This is supported by the work is
reported opening up in
fact that 39% of those reporting
many areas and there is greater
list higher prices, compared with
employment in basic metals and
31% a month ago. Only 2% of our
automobiles, this is offset in totals
members mention lower prices.
by the continuing emphasis on
cost
reductions
and
increasing
Inventories
automation.
Those
listing
less
Further
shortening* of strike employment total 10%, against
deadlines has increased the num¬ 15% in
February. Members' com¬
ber of those showing higher in¬
ments
reflect
that
further
in¬
ventory positions. Duplicating last
creased employment, will be cov¬
month's trend, 43% of our mem¬

bers

(Millions of Dollars)

-

(1)

~

significant over-all change but
does reveal definite compositional changes.
1

items-we have covered, it is evi¬

3?

chasers

Capital Spending Plans for 1959

Survey by the Bank of Montreal of the capital expenditures
planned for 1959 by some 16,000 Canadian firms and gov-

Organizing fdr' the' Pricing '* "
-Job Ahead /'r

-

eration

(1761)

Thit advertisement it part

of our continuing program

..

.

"Helping Build Florida*

38

The Commercial and Financial Chronicle

(1762)

Continued

from

nationalism

22

page

dustrialization will

Challenge of Soviet Powei

Soviet

is

this

Yet

expenditure.

largely accounted for by our mas¬
sive highway building program
which has been running 15 to 20
times the USSR spending, whereas
rail¬

in

investment

annual

their

added,

output."

"by that

perhaps

'Thus,"

time

(1970), or
the Soviet
first place

even

sooner,
advance to

Union will

he

alert

in the world both in absolute vol¬
of

production and in per cap¬
production."

ume

ita

rolling stock and fixed assets
substantially exceeds ours.
At the moment, they do not feel

First of all, to reach such im¬
probable conclusions, the Kremlin
leaders overstate the present com¬

much incentive in the road build¬

position.
They claim
USSR industrial output to be 50%

road

•

ing field. They have no interest
in
having
their
people
travel
around

on

Also

massive scale.

a

would

this

put

pressure

Kremlin to give the

the

on

people

more

parative

of that of the U. S.

not

Commercial

investment, which
includes stores, shopping centers,
drive-in movies and office build¬

ings, has been absorbing
a

than

more

40%

of

our

own.

Secondly, Khrushchev forecasts

$6
and

over

the U. S.,

in

year

only $2 billion in the USSR.
Our
housing
investment

What of the future?

In Khrush¬

growth
If this is

a year.

United States will be
committing
economicThis prediction I regard

true, the
virtually
suicide.

projection would place

saner

Soviet

1965

industrial

production

at" about 55% of our own. By 1970,
assuming the same relative rates
of growth, USSR industrial out¬
put, as a whole, would be about

chev's words,

60%

intends

Further,
when
Khrushchev
promises his people the world's
highest standard of living by 1970,
this
is patently
nonsense.
It is
as though the shrimp had learned
to whistle, to use one of his color¬

"The Soviet Union
outstrip the United
States economically ... To sur¬
pass
the level of production in
to

the United States

means

to exceed

the highest indexes of capitalism."

Objectives of Seven-Year Flan
Khrushchev's

ambitious

ful

.

100 million net tons.

is

put

at

set

Cement out¬

level" somewhat

a

higher
than
industry
forecasts
place United States production in
1965.

Crude oil and natural

will constitute

gas

more

than

one-

half

of the total energy supply,
relatively high cost coal will
be far less important than now.
By 1965, the USSR plans to pro¬

and

First

leaders
with

duce

about

480

billion

electricity. As a study
comparing U. S. and USSR elec¬
tric

production

power

by

prepared
industrial research

leading

a

group pointed out, this means that
the absolute gap between the U. S.

USSR

and

in

the

quantities

of

electricity generated will increase
somewhat in
next

seven

This
a

favor

our

over

the

years.

interesting study received

considerable amount of deserved

publicity. We
clusion.
about

agree with its con¬

However,

electric
the

across

what

is true
is not true

power

board,

as

some

mentators concluded.
For example, compare

coal,

and

petroleum,

If recent trends and present

policies continue, Soviet
military spending could increase
by over 50% in the next seven
years without increasing the rela¬
tive

burden

primary

natural

gas

power,
ex¬
standard fuel units,

production
will

be

lute

gap

been

45%

in

1958.

close to

in

of

closing since

narrow over

U.

it

abso¬

energy

1950.

S.

1965

60%.. The

primary

present pace,

the

By

At

has
the

it will continue to

the next

seven

years.

Similarly, the absolute gap in
steel production has been shrink¬
ing over the past five years. The
maximum

gap

apparently

was

in

steel

reached

capacity
in

1958.

The
comforting illusion spread
by the "disciples of the absolute
gap" should not serve as a false
tranquilizer.

At the
tant
not
,

same

time, it is impor¬

to

exaggerate
prospects in the economic

race.

In

propaganda surrounding ithe
launching of the Seven Year Plan,
Khrushchev made a number of

Secondy,
standards of

made

im¬

in

the

living of the Russian

people, even with continued em¬
phasis on heavy industry and ar¬
It

maments.

death

is

of Stalin

attention

ous

only

since

the

in 1953 that seri¬

has

been

given to
The

improving living standards.

moderate slow-down in the head¬

long

growth

which

of

then

heavy

industry

has

ensued

been

caused, in large part, by the di¬
version

of

housing,

more

to

to

resources

agriculture,

and

to

goods.

consumer

increase

to

the next

nothing more
wishful thinking.
Specifi¬
cally he stated that, "after the
completion of the Seven
Year
Plan, we will probably need about

about

based
on
expected

are

one-third

over

that

aid

which

our

own

citizens

are

enjoying, but it will look
good to people who for long have
been compelled to accept very low

standards.

Syria

—

uncommitted

underdeveloped
Free World.

put

of

and

nations

of

and Indonesia.

basic

raw

products will be the kind that are
needed for industrialization in the
less developed countries.
of

this

contest—

of

nations'
About

technicians
nomic

the

an

are

Others

local

are

re¬

a

billion people, in 21
nations, have
become independent of colonial

tries.

other

y-

.

"...

the

While

these

below

in

are

purpose

our

the

has*

the

affairs of

strength

t

agree m.e n

and

to

eager

are

s

of

non-aggression,"

countries

of

the world.

training
economic

Those

is concentrated
critical countries and of

set

whole

a

up

regime
to
continue
its
domination of the Russian people
whose friendship we. seek.
defense

Our

with

Peiping have
of front

series

Soviet

economic

here is the Bhilai steel

built by
over

the Russians.

million

festivals
This

UAR

the Soviet

as

as

at

some

throughout

90;

haVe

the

stage great

intervals.

frequent

they

summer

Vienna.

past lour years received
$900
million
in
aid
and
credits.
This
investment
today

quite

Trade

of

International organizations

of youth and students

the

seem

the

include

claims

members

world.

over

does not

is

of

to meet in

are

This is the first time

dared

meet

outside

they

of

the

Iron Curtain.

They have the Women's Inter¬
national

it did last year.

international

to

willing

Democratic

Federation,

blunders
words

which

cotfld

Subversion

Lawyers; Commu¬
journalists and medical or¬

ganizations.
Then cutting across
professional and social lines, and
designed to appeal to intellectuals,

on

July 14 last year, Iraq's economic

past few
provided

the Communists have created

na¬

the

USSR

has

the

Western technicians

travellers

in

high
posts is growing.
The

Soviet

These

very days Communist ac¬
tions in Iraq and Tibet have paiv.

the magic word of

est

number

this

massive ap¬
Soviet has the larg¬

up

of

trained

agents for

firms

recruited

world-wide

from

scores

of

areas

glove into

Middle

campaign
of
the third

and

subversion, which is

International
not

Communism

high

the

East

neglect

recent

has

basic

its operating proce¬
dure since the days of the Comin¬
and

the

Com inform.

world.
and

Much

spearhead of the movement.

of

Southeast

this

disclosures
purpose

existing

is

systems

democratic

The

is the

ancj
international

against

the

The

institution

"Communes"

China

leaders

refuse to endorse

df

sy3*

Mainland

the free world and

Soviet

has
eveto

apologetically;

it.,.;

"1

.

Despite the problems,surround¬
ing
the
Berlin
issue,
Western
Europe is stronger than it ever

the

to

as

based.

they

us.

War

II.

The
outcome
of
the
struggle
against international Communism
depends in great measure upon
the

steadfastness

States

and

its

of

sponsibility
freedom

in

the

United

willingness to

cept sacrifices in

ac¬

meeting its re¬
help
maintain

to

world ."

the

In lav. Business
(Special to The Financial Okronicle)

.

DECATUR, ILL.—Mrs. Rowena
business

from

office?

Standard Building.

Their

destroy

of

government

free

in

the

!

.

and

suppress

Named Director.

all
and
dis¬

Behind their Iron Curtain

ruthlessly

World-

Communist

rupt the economic and political
organizations on which these are
■

since

Asia,' G.
Grgy is engaging in a securities

hemisphere
of

been

other

particularly Black Africa, are*
on their target list. They do

not

changed

tern

of

countries to go out as missionaries
of Communism into the troubled

policy of economic
a

the

Moslems

aroused

Buddhists

Communism.

Eastris becoming alerted to the
true significance of Communism.

paratus, the

con¬

government

penetration fits like

what

help us
intentions.

gaining adherents

on

espionage and secret political ac¬
cancelled. Increasingly, Moscow is tion that any country has ever
assembled.
In
pressuring the Iraq government to
Moscow, Prague
accept dependence on Communist and Peiping and other Communist
support and the number of fellow centers, they are training agents
Western

done
to

has

economic

many

do

true

Much of Free Asia and the Middle

peace

in 47 countries,

The

with

have

committees

so-called

development by trading
Iraq Development "peace."
Board has dropped its two West¬
To back

tracts

oqr

tains

$250 million in mil¬

over

to

World Peace Council which main¬

negligible. In the

months,

have

we

v

not

their

unmask

shocked

Democratic

nist

been

than

dedicate

to

of

resources,

They are not supermen.
Re*
cently they have made a series of

of

tions had

share

and

preservation.

Unions, the International Associa-

program.

involvement with Communist

Communism.

greater

skill

destruction

our

been
own

far

a

power,

bloc's

d'etat

to

they succeed and Ave fail, it
only be because of our com¬
placency and because they have

on

coup

of the free

If

ticularly

'

profitable

a

the

pene¬

vastly superior

so-called

to

meet

will

the

Economic

economic

power

still

tern

Prior

free

to

....

the World Federation of Teachers

aid

world

of

The over-all

prime example
of the opportunistic nature of the

Iraq provides

the other

of

the

"

showplace
mill, being
The

These

which

com?

ers

Federation

Unions,

India, which has received oyer
325 million
of bloc
grants and
credits, is a primary recipient.
The

world,

World

A

-

the

of

Com¬

in

finally in the un-f
King of their subversive tech¬
niques,/
y. ;

oevoted

and

not

and

their

satellites

of

methods

their

ments of life in the free countries

European

those

->"ntries

figures do not include

munist China.

lies

promise but in understanding and
firmness, in a strong and ready
deterrent military power, in the
marshalling of our economic as¬

Soviet aid and trade with the East

these

give
him
his position

prestige and the ability of thg

organizations to penetrate all seg¬

course

deluded.

we

strengthens

Communist
Commu¬

through

nists in Moscow and

buy
with

that under the control of the lead¬

party organizations, the

mili¬

can

sadly

are

Soviet

world

-

we

compromise

concession

merely
and

feel

who

by

world-wide

its

to

that

Com¬

Rules Out Compromise

y
*

tration,

addition

evidence

no

achieving them.

on.

penetration

programs,

and

understanding of the real
of the Sino-Soviet pro?

world; have the slightest
of abandoning their goal, or
changing the general tactics of

propitiate the
United States, its then wartime
ally. Its functions have, however,
been carried on continuously un¬
In

the

leaders

idea

of

tional Comintern to

not worth the paper

are

written

Communist

present leaders of the

sets

own

of

the

There is

gram.

' Each

-

as

the

heading of sub-?

munist

peaoe

still

total

program

few

a

figures

the

massive

clearer
-

they
During World War
II, Moscow abolished the interna¬

ing behind the Iron Curtain'.
well

like

all

These

are

received such train¬

now

They,

"friendship

£1,200
students,
technicians, and military special¬
ists have

Soviet.

with

On

for

.

In conclusion I wish to
empha¬
size again the pressing need for a

resumed relations with

we

conclude

such

the internal

countries.

of this

About

countries,

intense

,

time. Moscow

agreements

terfere in

program lor
training stu¬
dents from underdeveloped coun¬

In all of these newly emer¬




From time to

oped

gent

is

-

ground

'

.

con¬

eventual world¬
of the Communist

plotting in Mexico show

unprecedented epoch
more than

there

their

was

ex¬

sought
to
advance
their
by local wars by proxy —
Korea, Vietnam, Malaya are typi¬
cal examples.
%•/// y

the

Communist Fronts

well devel¬

a

rule.

up

in

to

must not overlook

we

that

der, other forms.

The bloc also has

with

years to- catch

The single theme of these

fertile

are

Khrushchev

estab¬
lishments and teaching bloc mili¬
tary doctrine
to
indigenous
personnel.
'.-.yy- y--

^nd outstrip the United States in

more

Communist

.

military

Communist party of the USSR, of
which Khrushchev is the
leader,

five

S.

movement.

of
these
engaged in eco¬

subversive.

change. Within little

three-quarters of

U.

wide triumph

Free

challenge: military, economic and
This is

Party.

the

Communist leaders

fidence

70%

activities.

organizing

in

main element of the triple Soviet

10 years, over

of

conditions

cause

move¬

ment

the survival of the Free World.

of

Communist

Litvinov Pact, in 1933, not to in¬

of

emerging

have

the

made

their

Upsurge of Nationalism

with

been

Communist challenge in un¬
derdeveloped areas—is crucial to

the

tives

and

Over 4,000 bloc technicians have
sent to assist the develop-

association

Meeting of the
Congress, there were
present representatives of some 60
Communist parties throughout the
world, including two representa¬

received the bulk of the economic-

advisors.

that of the United
Most prominently, these

version
fact

connections

At the 21st

aid.

also being dismissed and

materials

secret

economic

Also under the

country
of
the
Communist party

its

international

coun¬

are

exceeding,

outcome

These same

newly

world, has appeal¬

these agitators.*

Communist

core

Soviet Party

tries, plus India. Argentina, Cey¬
lon, Burma and Cambodia, have

ern

industrial products will
be approaching, and in a few cases

The

Egypt

—

the

some

States.

UAR

and

By 1965 Soviet out¬

some

every

Every

ment.

Yemen, Iraq, Afghanistan

credits.

the

the form

in

been

the

itary and

with

hard

tirely overt

from the satellites and China.

has

in
colonial

countries

These in turn

China.

the

maintains

Three-filths of the total delivered

will

aid

able

moved

to

the

of the

world,

former

The fragile parliamentary
systems
of new
and
emerging

tically

from the USSR and the bal¬

date

the

ploit.

organizations which exist in prac¬

In
the four/year period ending 1958
the total of grants and credits to¬
taled
2.5
billion, of which 1.6

Finally, the Soviet Seven Year
Plan, even if not fully achieved,
provide the wherewithal to
push the expansion of trade and

arsenal

world.

tries by the bloc in this year.

arms

al¬

Communist

extended to underdeveloped coun¬

to

is

ing 'slogans to export and vulner-*

underdeveloped with Moscow, or in case of certain
into high gear of the Communist parties in the
during 1958;
The equivalent of Far East, with Peiping.
over $1 billion in new credits was
These parties also have an en¬

ance

destruction

Communist

and

areas

nations

in

programs

countries

The

dealing with

of

direct

Communist bloc trade and

The

of

of attack is based,
all, on the Communist
parties of the Soviet Union and

our concern
on
Berlin, they are
moving into Iraq with arms eco¬
nomic
aid, and subversion, and
giving added attention to Africa.

years.

now

Its

first

they are attempting to focus all

This level,
if achieved, will still be far below
seven

only by expansion, and

that the best hope of such expan¬
sion lies in Asia and Africa. While

to

standards,

present Soviet plans,

were

'than

be insured

task

tion.

continues to be the subversion of

oppor¬

freedom

more

Hungary and now Tibet.

easier than that Of construc¬

ways

most vulnerable.

tary aid

additional

be

can

The

techniques

than those of Stalin. This mission

are

aid, loan and

Suicide"

some

provement

statements about Soviet economic

which

their economy.

subtle

to achieve

—witness

promoted by Khrushchev
more

Thursday, April 16, 1959

.

tempts

Stalin

ize the future of Communism can

this

Soviet

the

power

on

"Economic

Living

hydro-electric

pressed in
amounted to

arms

com¬

energy production trends in the
two countries. Soviet production
of

resources

intensify the

Soviet

kilowatt

of

with additional

which to

mission,

and

of
course, with those countries which

of

all,
rapid
economicgrowth will provide the Kremlin

»

hours

are

Communist

of

propaganda.
Such
propaganda,
however, should not blind us to
the sobering implications of their
expected economic progress.

race.

The energy base is to be revo¬

lutionized.

exaggerations

tool

with

Lenin

entire free world, starting,

World.

Soviet

standard

a

States.

comments.

These

seven

plan establishes the formid¬
able task of increasing industrial
production about 80% by 1965.
8
Steel production, according to
the plan, is to be pushed close to
year

in the United

of that

but

by

the

came

unrealistic.
A

is

'

industrial

future

our

will be only 2%

as

roughly twice that of the Soviet
even though living space per cap¬
ita in the U. S. is already four
times that of the USSR.

that

now

tunity which this great transfor¬
mation provides them.
They real¬

an¬

own

alyses of Soviet industrial output
last year concluded that it was

automobiles.

billion

Our

and

bring them.
the

to

world-wide

a

formulated

The leaders or world Communism
are

industrial

than double the comparable

more

better

a

of life which they believe in¬

way

The

achieve

to

has

It

coupled with the de¬

termination

,

.

alT at¬

Richard

de

La

Chapelle,

;

-

Lee

Higginson Corporation, New York
City,
Board

has
of

Finance

been

elected

Directors

of

Corporation.

to

the

Household

Number 5838

189

Volume

Continued jrom page

.

(1763)

The Commercial and, Financial Chronicle

,

.

serious

20

competitor

major

in¬

of

vestor-owned utilities.
I

strongly recommend that our
industry make every possible ef¬

appropriate business expense,
This decision has always been a
prerogative of management.
are

fort to limit the activities of REAs
to their

commercial business

fact, Russia's current per .capita
production is now about the level
of our per capita production in

In

_

:

handled J by

nr

„

the

Considei

by such proposals as the
revenue bond bill,

denced

magnitude of tax

nv°nnpm!nlloutstanding examples of
Government-

nies

which

owned or financed power projects

an(j

iost

p o \v e r.

—

so-called TVA

1

,

more

more

than

the

it
has
from
Federallyowned
or
financed
power,
Throughout the nation there are
which

,,

vicious,

more

competition

have

lost

properties

compa-

customers

to

govern-

JfPr,esf™; ab™ment-owned or financed projects,
^vestment m electric lacn- Throughout the nation there are
ported a total generating capacity Administration bill of the last ^-^tne users oitne electric examples of the difficult competiof 48 million kilowatts.
At that Congress, the socialized medicine P°wer_prouucea oy mese projects tion for new customers and new
time, the installed capacity in this bill,the Federal housing bill and taxes paid bv the customers of service areas which exists between investor-owned companies
the Columbia Valley Development
Corporation bill, the Great Plains

Capacity
1957-65:
1957, Russia re-

Generating

As of the end of

amounted to 146 million,
nr about. 98 million kilowatts more
or about 98 million kilowatts more
than Russia.
'
1
'

others.

many

country

term

have

to

electric

the growth - ond development of
-the;

government m bi^iness t an

history ol gove

goals

meet

;

add

*'

By that time, we expect

that year.
to

kilowatts

million

108

of

of this Nation's

.

.

97 V <w

.vhiU;

giv¬

104 million kilowatts,

-r

ing the United States an installa¬
tion
of 250 million kilowatts

men

One

reason

for

is^ the' preference

growth

bv" which

public

clause

VgencTes

have

a

priority'over all private utilities

142 million kilowatts.

power,

purchase of all of the power
from every Federal project. This
discrimination over private utilities exists even though the private

only

utility

in the

it is evi¬

In view of these facts,

dent

electric

to

respect

in

that,

the United States is not
holding its own but is in¬
creasing its superiority over Russia and will continue its: yvorld
leadership
'

.

.

America

m

f,,

To

tliose things which
make America great, we must always be considering what is going
The REAs
on in this country, what the trends
Let's
consider for
a
moment
are and where they lead. Because,
ordinarily, once you have lost a thet situation of the REAs. They
right or a privilege, it is too late were created to supply power to
to do anything about it.
rural areas where service was not

•

government-owned

nanced

preserve

in

only 2.4%
in taxes.

Impressive evidence is being
brought together in our behalf to
show the impact of government
power on our

of

companies

interests of our security holders,
our

..

areas

this

industry at the same time
they
loudly
propagandize

The industry is fighting and will

deduct

to

P"rP°ses advertising costs when continue to fight both before the
Federal Power Commission and

.

~

r

:

7

—,

:

~

—

c

—.

Straus cases that advertising expenses made by liquor dealers to

resist prohibition legislation

for both rate and tax purposes.

Fortunately,

were

many

state

com-

^V^i^le^se

industrial

or

«"«¥<* our industry

Sca

Continued

CENTRAL ELECTRIC I GAS COMPANY
and Subsidiaries

SUMMARY OF CONSOLIDATED EARNINGS
12 Months Ended Feb. 28

1959

Operating Revenues:

en¬

Ad

Situation*

.

judgment, nothing in re¬
is more serious than

years

Gas

the effort of the Internal Revenue

today

^umnussiuii

ruww.

16,329,270

941,347

Operating Expenses and Taxes.

935,213

$43,262,156

Total

.

$39,529,725

36.851,021

Operating Income

$ 6,351,135

Other Income
Net

$22,265,242

17,521,212

t

Net

1958

$24,739,5971:

Telephone
Electric

ECAP

on page

134,517

T

33,738,529
$ 5,791,196
119,049

Interest and Other Income Deductions..

1,878,377

$ 5,910,245
1,593,549

Net Income before Minority Interest....

$ 4,607,275

$ 4,316,696

1,951,212

1,910,577

$ 2,656,063

$ 2,406,119

255^571

244,809

$ 2,400,492

$ 2,161,310

$1.70

$1.59

$1.65

$1.58

Earnings

$ 6,485,652

Minority Interest
Net Income for Central Electric

& Gas

Q

local taxes at a small percentage
This all started by communica¬
.
of the taxes paid by investor is, owne(j companies. Over 97% of tions from Senator Kefauver and
-among
other things the laigest
farms
America are now be- Clyde Ellis to those two agencies,
electric
power
producer m the ing SUPPiied with electricity and which resulted in a tentative conwnicn resulted in a tentative concountry
the largest insurer, the th| rEAs have expanded into the elusion by the staffs of IRS and
•largest
lender and the largest .]lh.irhfln mmmprrifll and indus- FPC that all of the ECAP ads in
.holder of grazing land, the largest trial husiness and into the generaIRS case and about 45% of
.holder
of
timberland
and
the +inn anrf transmission business In those in the FPC case relate to a
largest owner of grain, the largest the past
the
"Political Controversy" and are
.shipowner and the largest truck cial and industrial business of all propaganda and therefore not de,fleet operator. For a Nation which REAs has doubled. Now three out ductible.

Company

!of the Bureau of the Budget:
,,mu

^

j

Government

Federal

^he

'

is

and

Citadel

the

the

World's

0f every
are

NationwidP

Nationmde

Balance

Budget Bureau report
the Federal
Government

found

This is an outstanding example
what comes from centralized
government. In plain language,
of

thp

REA

has

com-

IK* com

^

the agencieSi
REA

Federa,

twQ

engaging in approximately 20,000

Stock

for Common

Electric & Gas

of Central

Company

Earnings per Common Share on —
Average number of shares ontstanding
Number of shares
of

outstanding at end

period

'

CENTRAL ELECTRIC & GAS COMPANY
SUMMARY OF CORPORATE EARNINGS

by

Pletea lts oriSmpA J^D» «as aoan administrative decree, are deciddoned the concept of its creation jng what ads are necessary in a
and has become probably the most competitive field and what ads

A recent

;

four new RE A customers

nonfarm.

Stock Dividends

Preferred

-

principal exponent of private enterprise and individual initiative,
.this is an amazing Ust."

$17,521,212

Gas

of western Minnesota, eastern

935213

$18^559

$17264,483

16,725^356

15,645,100

Income
Other Income (including dividends from
'subsidiaries)

$ 1,737,203

$ 1,619283

911,262

771297

Net Earnings

North Dakota

$ 2£4M65

$ 2290280

Operating Expenses and Taxes
Net Operating

Dakota.

'

Over
state

the

and

is 50 years

smalt'

Otter Tail Power Company

year

old. It

was

hydro-electric

it

mission line
in

over

to

station

near

Fergus

year

the

twenty-five-mile trans¬

single wholesale customer

beginning

of

That

Today, Otter Tail
in

a

Otter

serves

70,000

Tail.

are

Better

Tail's

50

employees have

Net Income

mile service

535215
$ 1,855,165

a

personal stake in

Stock Dividends

2S&571

244209

$ 1,824,995

$ 1,610256

$1.29

$1.18

$125

$1.18

Preferred

the company, too.

Earnings
,

With fifty

years

of experience, Otter Tail

ready to meet the challenge

ever-increasing demand for
in the years

of

an

electric service

per

Common Share

on —

Average nnmber of shares ontstanding
Number of shares outstanding at end
of

period

Nnmber of Shares of Common Stock of
Central Electric & Gas Company ont¬

ahead.

standing at

OtterTxiil
COMPANY

Note:

(t)

"r

—

1,458,546
1,368.557

February 28, 1958

POWER

agricultural region

567.899

$ 2,080,566

Interest and Other Income Deductions..

February 28, 1959

nearly 100,000

square

centered in the rich




Otter

event

record of public service.

customers
area

Dakota.

North

W&hpeton,

marked

a

a

foreign countries

one

in April, 1909, that a

Fails, Minnesota, first generated electricity
sent

several

in all but

Balance for Common Stock

stands

and

in

investor-ownersTdf

than 900

Yes, this

--

8,500 stockholders

$16,329270

941,347

Electric

Total

and northeastern South

we

exPense for tax purposes and rate

our

Y

r cueiitJL

the

at least be hope-

versed at the instance of those
who would silence the voice of
that

special

In my

and

can

government power with tax-free
dollars.

Ultimately, such discrimination
will drive private enterprise out
of any field the government enters. By its very nature, government possesses immensely valu-

cent

We

ful that the agencies concerned
finally determine that decisions
which you make as managers of
your properties should not be re¬

the same taxes as government- clearly is distinguishable because
our questioned
advertising did not
°wned or financed projects.

The

customers

serve.

higher than they not proper income tax deductions, missions and the Press of Amer-

would be if tee ~niespaid

deavor.

advertising

our

not only has been necessary but
that it also has been in the best

gov-

'

electric

commercial

operations and to

demonstrate that

in^ and free sPeec^ m America, right to carry on this type of agprojThe Supreme Court has re- gressive and competitive adver¬
their rev- cently held in the Cammarano and tising and to deduct the expense

hand,

words, the rates of in-

are about 28 %

able

at issue.

financed

or

available -from , investor-owned Service for tax purposes and the
has what has been called political companies.
In order to do this, Federal Power Commission iui
for
elephantiasis, as is clearly indi- ^EAswere given subsidies in the rate purposes to eliminate certain
cated
in
the following
official -form of 2^Fe^al^°^y ^al* advertising
expenses
from the
-statement made by the late Row- construction costs
no Federal^or classificatiprL 0f ordinary and
land Hughes, at that time Director state
^ necessary business expenses.
America

in

fi-

projects.

-

Government

or

quite

are

industry not to be alas
an operating
_
o

For

lowed

privileges such as
freedom from taxes, access to the
Res
and
military
installations,
This preference is an encourage- public purse and availability of
low-cost capital.
Thus, govern¬
ment to the creation and development has an overwhelming and
ment of government-owned, unfair
comeptitive
advantage
government-financed and taxover
its citizens in any field of
subsidized power systems.

i

■

■

.

Trends

is serving preference cusREAs, municipali-

tomers such as

electric power sup-

m

Ply-

other

pay

vestor-owned

amazing

this

and

_

revenues

tuiai

the

On

In other

The Preference Clause

industrial generating
stations. In other words, between
1957 and 1965, we will have increased our superiority over Rus-sia from 98 million kilowatts to
including

invest-

facilities

taxes collected from

0f

enues

25%,

,1957

.

ects

20%

1950.

users

electric properties and operations.
When related to revenues, in-

ernment-owned

14%

1940___.

•

.

.

,

taxes.

7%

1932

The

companies, which consti-

i.

tion

industry.

of the facilities of investor-owned

71%

- power
famous for

become

failure

,

Financed Power

.

electric

the

There is no better example of

„

electric

for

plans

which

consistent

'

~

::

__

*

.

.

Growth of Government-Owned or

Recently the Russians have an¬
another of their long-

nounced

.

legislation and
different regula-

influence

to

because
tions

industry in the competition

Financed

investor-owned Projects Pay Little Or No Taxes

This trend is continuing as evi-

con-

the gap ever

since 1940.

an

industry is faced with

difficult

—

.business.-

V;:

has been

The United States

tinuously widening

enterprises,

each of which could have been Government-Owned

^

1938.

original purpose.

No

aggressive,

seek

39

Includes $490,000 collected after May 9, 1958, by Southeastern
Telephone Company, a subsidiary, under increased rates, sub¬
ject to refund if the Supreme Court of Florida after hearing
to be held April 30, 1959, should decide that such collections
were
not legally authorized.
If telephone operating revenues
were
reduced accordingly, then after giving effect *» rer'ain
correlative adjustments of depreciation charges and income
and gross receipts taxes, the resulting figures for Balance lor
Common Stock of Central Electric & Gas Company and E^n*~
ings
end

per

of

Common Share
would be,

period

number of shares outstanding tot
respectively, $2,330,492 and $1.60.

on

40

40

The Commercial and Financial Chronicle

(1764)

Continued

#

■

#v

position on this advertising

its

matter.

A

This

A

outlined the condition of

facing

gers

industry, but of all
American industry. Our industry
is
not
doing
anywhere
near
enough to succeed on any one of
these
points.
We
are
losing

it

American industry and all Ameri-

people.

can

My year

caused
than

ever

jrnent of

gressive,

to

a

of what must
to stop the

program

if

done

be

ground every year to a vocal, agdangerous m lno r l ty
whose ultimate goal is destrucUon
investor-owned business.

President of EEI has
spend more hours
before on the developas

me

we

are

lead

tirnate

which
socialism, to ul-

ultimate

to

loss

of our freedoms,
productivity and

wonderful

*

.

j

..

America today

our

outstanding

our

and

the

is

prosperity for all.

-

standard of living.

points

Nuclear Power Plant

is:

It

to

-A

in

»„etnm0re

L^e

the

customers

our

Commission
that

our industry the most capable
people in every field oi endeavor.
College surveys in both the sci-

business

not

is

Energy

popular

a

April

announced

15

private and government enin the six countries com-

inctus-

Euratom
The

nuclear power

objective

of

program,

the

program

are

economy.

_

The

,

industry has

'the

finest

nossible

fiineerin"

law

'

No

pensation
best

is

aries*

nav

The

we

can't

we

any

whatever

are

com-

as

to

focused

improving

on

the

gram and on lowering the cost
of
fabricating
and
processing

of

types

issued

was

fuel

in

used

such

the

to

the

other

was

industries

is

nnu

In

profits are strictly regula ted, the customer is the one who
benefits most from efficient

.agementl

;

at maximum speed

man-

]\iay

(3) Public Information Program:
We must

be

active and

vertising

for

more

courageous

and

public

Surveys
people
don't

aggressive,

to

ad-

information

programs.

clearly

that

know

show

they

about

are

problems;

that

(4)

Economic

other

lively

good

Education:

citizens

we

rea-

op-

„

i

must

ol

government

a

and

business, the
productivity, the high wages, and
all the benefits that result from
it.

(5)

Political Interest: We must
individuals
join other good

as

aggrSsfve
and

(6)

Shu-'

our

politics

and

in

choice.

Dec.

our

gram.

31,

1963:

completion

of

date

for

Euratom

+u

,

have

completion
until
0f

Dec

the

dates
31

possible
In

date

right

of

1965

1

the

two

in

a

will

defer

projects

ew

LtaSed

be

in

the

accept

comparable

hone

some

of

schedule

hebw

projects at

ahie
an

tn

ear^

tIle tw°

"We

must

aggressively and

courageously oppose government
ownership m every field of busi-




istei'ed

by
Connecticut

Sidney

foundation

-

Dan

are

Se^t-

tn

,

a

+i^

€1^.

invest

approxi-

development

program.

The

cost

and

he

en¬

I

had

of

tax-

we

are

group

the

His

best

very

standing.
I
this background so that
see the implications for

many

to

his

interest.

of

are

the future.

the
under

University
a

grant

years

It will not be

obtain much

Now for the third
It has

ness.

an

his

of

Chairman,

Executive

piece of busi¬

this investor is adding to his tax-

vinced
sires

that

He is

interest

con¬

will

rates

higher eventually.

move

He

de¬

Financial

Writers

a

an important offering
tax-exempts was expected with
large local interest in the bonds

established

usual,

before

the

sale.

As

sent him a preliminary
(Prices, rates, and yields
unmarked) and I mentioned the
I

circular

since

the

he

bonds

had

never

shorter

than

men¬
ten-

a

maturity, when I gave hirn

year

scale

went

I

started

upward.

think

the

with

said

he

bonds

1969

talked

We

and

moments

lie

not

were

,

I

bonds

inform

to

started

had

been

institutional

him

well

the

received

investors

too, did not seem

that

by-

and

this,
to impress him.

By accident, I paused during our

InterCo

to

<kMy

me,

due

when

when

be

example,
use

a

then list by days

page,

month

and

payment

For

of January,

checks

interest

clipped.

are

divide

were

group

1961

6s

coupons

and I

to

but

won't

have

old

Graduate School of Business,

fine, I
tion

as

yours

we

didn't
we

them
Do

I

alphabetically

the

page by page.
her bonds, only

for

same

list the bonds, paying agent, when
interest coupons are due, amount

payable

every
six months,
price, and price paid.

This

large

book

should

call
•

be

not

too

that she can conveniently
carry it in a bag or purse.
2J/4
by
3
inches
is
about
right.
so

Some

of

clients

fact,

important

your

will

about it

women

this.

appreciate
of them may

some

even

In
talk

their friends.

among

New Data

Electric

on

Current Used Abroad
Kinds

in

the

countries

150

given in
by

electric

of

principal

the

and

used

current

cities

of almost

territories

are

booklet just issued

a new

Bureau

of

Foreign

Com¬

U. S. Department of Com¬

merce,
merce.

Entitled

Abroad,"

"Electric

as

American

electrical

and

manufacturers

equipment

exporters

information

quiring

Current

the booklet was pre¬
a handy
reference for
re¬

electric
current available in foreign coun¬
tries.
Travellers planning to take
electrical
will

on

appliances

find

it

abroad

useful

a

determining their usability
cities to be

also

guide
in

for

the

visited.

Types, phases, cycles and volt¬
are listed for cities grouped

ages

in alphabetical ar¬
Though covering pri¬
marily current for residential use,
by

countries

rangement.

available data
industrial

on

commercial and

service

also

in¬

are

cluded

•„

The

77-page

booklet

be
obtained from the Superintendent
of

may

Documents, U. S. Government

Printing
D.

C.,

Office, Washington 25,
from any Department of

or

Commerce Field Office at 25 cents
a

copy.

New Sade Branch
CHARLOTTESVILLE, Va.

—

mind

the

under the management

truly

Michael A. Voccoli

about if the

.Michael

replied,

a

can

flash,

men¬

still

get

A.

Voccoli, associated
Hart, New York

with

Savard

&

City

passed

away

"That's April 3.

thought to

believe I

of Robert

kind of like J. Boyd.

flash, with

never even

that

into

book

bonds yesterday- Sade & Co. has
opened a branch
yield 2 V2 %. Theyr office at 1022-A West Main Street

to worry

a

the

of stock, dividend paid,
dates when due, cost, and ai range
name

say-

bought

slips lower.

Quick

of

rest

separate pages for each stock and

it and, besides, we have some ex-~
cellent short-term bonds that we

market

the

Do

this

good

very

in

Finance, Stanford University
Gerald M. Loeb.

and

few-

a

did

attractive,
interest rates were going up, the
yields were not enough, etc
etc.

LKoeb

and

the

fabric,
divi-t

or

interest

and

months.

month

should

offering I gave him the scale

and,

which

of

by

the

pared

Last week

of

of

Association;

dates

dates

marketability. These require¬

ments have been identified in past
conferences with the client.

from

Committee

a

and list all their

easy

of Connecticut, Honorary Chair- telephone conversation and
^aik
Frank
H.
Bartholomew, luckily gave him a chance to
Press

dend

for

income,

loose-leaf

small,
leather

a

with
cover

busi¬

been determined that

exempt bond portfolio.

aPP°inted the judges are: Governor Abraham A. Ribicoff, State

United

obtain

book,

their

upon

make them happy if you

can

hard

superior performance,
service and a meeting of our per¬
sonalities and thinking can gradu¬
ally be established.

S; Loeb Memorial
Inc., which was

°Jhe' me™b?rs ofn thf
Awards Advisory Board

you

accounts

some

investors who de¬

women

largely

will

unless

ness

admin-

Herbert E" D°Uga11 Profess01'
will be borne
equally by the two
Commissions. This effort will be

lots

Gradually
more
friendly.

substantial

can

task

small

two

oi' the Board of Directors. Radio premium; in fact,

+

am

last week

which

of

you

Mich,

firuction and operation program, Corporation of America: Robert
States and Euratom G. Shortal. President. New York
\

in

tioned

being

have

you

pend

due

time 1

of certain excellent situa¬

me

some

deadline

Until

him

present

tcunded by Gerald M Loeb, part-

President,

(7) Oppose Government Ownership::

and

If

among

list

and

National

ad^anfe"1of'"the^nf"'l® national; Frank M' Folsomrn

History

present

connections

Stanley Hope, Presi-

are:

Suggestion for Certain Accounts

same

have

lIn addltion to Dean Ackerman,

X

or

may

Then

tions

ner 111 E' F' Hutton & Company,

«.ich

also

for each month in the year.

told

the

of

tion

nlxt

oi

needs,

ideas

the

inrn

technical

recoen

the

event

ferral's

to

the

becoming

Bristol-Myers -\ Company;

The swards

for

wants,

His

vertising.

editor, Look magazine,

-

significant

developments
years

Target

States and Euratom

reserved

Chairman

ministration:

'

plants.

The United

195c,

go!d eXzenseto°Sw
mid adopt the sameTpro-

example

Target
projects bv

April, 1960: Target date for beginning of construction

the

Others Must Become Inter-

1959:

of

USAEC

have.

Don't take

know what

you

change from Friday until Monday
morning. ' >
Vv/
s ■;

separate

Association
of bonds to him
prior to theitime
Manufacturers;
Vernon
Alden, they went to
public sale and he
associate clean, Harvard University showed an interest. The day of
Graduate School of Business Ad- the

proposals,

31,

the

^

Federal

party of

•

ac-

major economic
education program so that all the
American people will realize and
will protect with their last ounce
of devotion the American
system
carry on

Dec.

Bristol,

dent>

that

customer

should

just
bought

sounded

gaged in developing business with
very substantial
account.
The
name
was
obtained through ad¬

^

entries

of

few

a

a

Times; and Charles C. Abbott,
dean'
University
of
Virginia
Graduate School of Business Ad ministration.
Judges selected for magazine

from

are requested to give notice
Euratom
Commission by

selection
and

4.

With

the

mission

when

informed, they are
sonable and fair-minded and
pose these things.
\

days

fellow tell you

Case
At

David Daniel, publisher, Hartford

are:

(45

Sept. 1, 1959: Deadline for sub-

tax
discrimination,
government in business, inflation
other

1959-

other

Infor¬
mation that I receive is passed
along when I find that it pertains
to some of his holdings, either bymail or telephone.
This man is
a very successful investor.
He has

board,

this date.

preference,
and

28

posals

in

our

INVESTMENT.

sold

Lee

announcement of the invitation).
Those who intend to submit pro-

\

.

AN

exempt bonds.

TJ-

Important date in the timetable
set up to push the joint program

industry

our

IN

Proposals for the research

and

where

It

for
that

does

customer

my

granted

your

of

fallacious and without

customer.

that,
with¬

things, too.

have been solicited.
>
Nuclear
power
projects now
well
advanced
in
planning
in
Euratom countries will not be ex-

„

for

about

re¬

lieve any manufacturers or sup-

by

order

an

how

WHAT HE WANTED.

or

an important point in
salesmanship that it needs reemphasizing—talk less, say more,
lisien
better.
Ask questions, let

per-

wil1 be burit, owned and operated awards were chosen with equal
by enterprises in the member representation from the fields of
foundation.
Highly competent s^ates °* Euratom
(Belgium, business, education and publishemployees increase productivity, France, Germany, Italy, Luxem- jng.
reduce expenses, reduce the cost
o°urS and the Netherlands).
They are for newspaper entries:
as

always

talk

giving the customer a chance
explain to them what HE DE¬

SIRES

The plants will use reactors on School of Business Administration,
wblck research and development and Chairman of the Loeb Awards
kai,re been carriec! to an advanced Advisory Board,
staSe in the United States and
Judges for the second annual

attract
theory
regulated
high sal-

old
a

pay

bet-

to

necessary

people.

because

utility

accounting

industry is in

to

security,

a

out

States and- the Community.
Judging
panels for the-1959
Proposals submitted in response Loeb Awards for financial and
to fhe invitation will be jointly business journalism have been
reviewed and projects selected by completed, it has been announced
{he Euratom Commission and the by Laurence J. Ackerman, dean
Atomic Energy Commission. Gj the University of Connecticut

en-

advertisin'" ShcUv
and o'olitical re-

ter Dosition to

the

in

continue

and they ramble on and on

_

invitation

c+ot«c

relations

lafions.

that

neonle

onerations

sates

public

need for

a greater

the

even

and

me

ONE COMPELLING reason. Many
salesmen

that°Jve?y' coS
atViK Judges/Named for '59
d^oStaekmtodtta! operation^behveen'11 the 'u'nSed LOOfc JOUmaliSDI Awaill
tViT
^
no

does

People usually make
their minds to buy because of

up

entire

meet the growing needs of West- pliers of commitments previously
ern Europe
■■ •;
:
made.

important to the

.

times

many

sound

fine

THE

SOMETHING.

SAY

set lor participation in the joint
program. Acceptance of any such
projects, however, will not re-

a

T

you?"

TRUISM
LET

THE

SHOULD

eluded from consideration if they

our

vitaily

TT

the

of

to

UPON

YOU

meet the conditions and criteria

a

,

is

example

shining
world.

them,

and oversell.

the

actors.

employer,

I

A merman

America

gave

of

most experienced salesman forget
this.
It is so easy to overtalk—

and development program already

Euratom have been insubmit proposals to build
anc( operate nuclear power plants
uncier
the
joint United States-

r!?er>fi^r is to install within the Commua^n convinced that in
nity in the next four to six years
.ptmal'v,
,h"approximately 1,000,000 kilowatts
inclusions
fa^L- that
inof electrical generating capacity
diistrv isTcood emo'lovef thaf it
in an eIfort to achieve economic
ofler-fine onnnrtnn?ties in'
field
production of nuclear power to
Which

How

have

now

we

makes

vj^ec(

ifi

business

a

pr[sing

administra-

tion colleges show that oui

try

which

gncj

just

some

CUSTOMER

I have outlined

sell¬

was

bank

though we know
true, we sometimes

This week's COLUMN IS

THAT

of this issue I

some

ing, due in 1966 on a 3R»% basis.
They are also 6s and in fact a

be

to

BASED

Proposals Invited

terprises

in

and

them

you

even

and,

forget.

(Euratom) and the formance of reactor systems acStates Atomic
Energy cepted for the power plant pro-

United

best

I ersonnel: We must employ

entific

follow

we

This is such

Atomic

European

The

n.ir

nn«sible service
1
''
1
'

(2)

ing

We^ must coSinue Comhilssidh

serviceareas'
to

as

things that

some

must remember in the art of sell¬

Under Joint U. S.-Euratom Program

all of the facilities
supply all present

building

necessary

is to

choice

such

are

this feature of

the remarkable job we are doing
of

ruinous

inflation, of government ownership, of taxes ever rising until all
initiative, self-reliant enterprise
and prosperity are destroyed."
other

■

Worthwhile Repeating

republics of the ages,
the route of deficit financing, of

pr0gram

By JOHN DUTTON

There

seven ma¬

must continue

Service: We

(1)

of

suggest.

to

the

follow

will

*' v.

,

■

——■——*

I have a program

jor

Securities Salesman's Corner

route 0f free

prosperity

.,

world s
freedom

of

example

lose our

and to preserve the freedom and

conclusion

trends of the past 25 years,

We can
doing

people will lose their
freedom and their prosperity.
If
I may paraphrase the words of
President Eisenhower in a recent
speech, I will say:
"We

Thursday, April 16, 1959

.

now

American

success of our

the grave danand facing all

industry and

our

program is essential, not
0nly for the future existence and

Success

to

Program

simple.

and ultimately we will

■

ness and unnecessary government
controls and activities.

•

I have

is

do as much as we are

Electric Power for a Strong America
in

choice

Our

from page 39

.

.

active

Traders

suddenly

Mr. Voccpli

member

of

was

the

a

on

very

Security

Association of New York.

\

Number 5838

189

Volume

.

(1765)

.The Commercial and Financial Chronicle

.

of

Edward Werle Renominated by
New York Stock
Werle

C.

Edward

has

serve

second

a

of the Board of Governors of the
Mr. Werle previously was Board

term as Chairman
Stock Exchange.

one-year

York

New

American

Stock

in

Exchange

1944,

an

ing to the installation of generat¬
ing facilities in the navigation
dam to be built by the govern¬
ment at Lock
13 on the Black

office he held until 1950.

later, and Chairman in 1947,

Vice-Chairman

two

Total membership of the Board is 33, including the Exchange
President, G. Keith Funston, and three Governors appointed spe¬
cifically to represent the public. Elections will be held on May 11.

Exchange

renominated to

been

the

years

Renominated

Trustees

be

to

Warrior River.

Gratuity Fund, from
made to the families of deceased members

which payments are
of the EjftJiange, were William Shippen Davis
& Co.; John M. Young of Morgan Stanley &

to

;

■

The

*.

,.

1959 Nominating

every section of the na¬
tion, analysis of accomplishments
of the nominated companies by a

senting

serve

'

review

Committee also proposed the following

the 1960 Committee:

on

•••/•

\

by

..."

<

Campbell, Jr. of Marks & Campbell; Brittin C. Eustis

Engineering, Michigan State Uni¬

Co.; Robert J. Jacobson of Benjamin Jacob-

versity; C. W. Kellogg, Past Presi¬
dent of the Edison Electric Insti¬

& Sons; Robert C. Johnson of
B. Lemkau of Morgan Stanley &

Kidder, Peabody & Co.; Hudson
Co.; Allan H. McAlphin, Jr. of
Wood, Walker & Co.; Harold C. Mayer of Bear, Stearns & Co.;
Alexander R. Piper of Paine, Webber, Jackson & Curtis; and

son

James J. Watson of Hornblower & Weeks.

addition

In

included:
Werle

C.

Edward

Feter

Walter

nan

Frank

N.

committee, and a decision
committee of judges. Judges
Dr. J. D. Ryder, Dean of

a

were

James

of Spencer Trask &

.

Mr.

to

*

.

V-/< •;

The Edison Award is

annually

en

.

; Vv.

.

' "

tute; and Mr, Corette.

tion
1

trie

to

electric

an

J

-

being giv¬
com—1

"for distinguished contribu¬
the development of elec-1

pany

Holden, the 1959 Nominating Committee

;"V-:

panel repre¬

of nominations by a

of Blair S. Williams
Co., for three-year

/'

selected

was

for the Award through a sequence

terms; and William K. Beckers of Spencer Trask & Co., for one
year.

Power

Alabama

the

of

41

to

for the con¬
public and the
benefit of the industry."

John D. Baker, Jr. of Reynolds & Co.; Benjamin E. Billings

light and

venience

of Thomson &

Bertram F. Fagenson of B. F. Fagenson
of Pershing & Co.; Bernard E. Smith,
& Co.; Raymond D. Stitzer of White,
Stout of Dominick & Dominick; and
Maurice F. Summers of E. F. Hutton & Co.
•
McKinnon;
Co.; Louis B. Froelich
of LaMorte, Maloney
Weld & Co.; A. Varick

power

the

of

&

Consisting of

Jr.

a

gold medal for

the winning company,
for
the
company's

and $1,00®
employees^

benefit fund,

the Award has ac¬
quired national prominence in the?
public mind as well as in the

Alabama Power Wins EEI Award

electric

utility

Alabama

The

the

received

company

wins

service

honor, the" new Edison gardiiig this project, for obtaining
Award, for "exceptional business necessary Congressional legislastatesmanship" in developing the tion and the approval of Federal
\qater resources of the Coosa and bodies required to carry it out,
Warrior River system.
thereby providing the State of
Alabama with valuable power,
The Award
was
presented to; navigation and recreational facilThomas W. Martin, Chairman of ities, together with flood control
the Board of Alabama Power Co., an(j conservation of the water rehighest

Joseph A. Martin, Jr. Clifford P. McKinnej F. L. Newburger, Jr.

Chairman

of

the

American

in both posts.

serve

Stock

Exchange—the

only

man

to

v

-

.

Robert L. Stott

J

The Nominating Committee, headed by W. Wilson

.

of

Corlies

&

Booker, nominated six

terms:

year

new

Governors

Holden

for

three-

,

Peter Ball, senior part in
Ball, Burge & Kraus (Cleveland)
and a former Governor of the National Association
of Securi¬
ties Dealers.
Walter
1937 and

a

N. Frank, a member of the Exchange since
partner in Marcus & Co. (New York City).

March

Award

Firms.

of

was

Edison

The

Convention.

nual

time

Joseph A. Martin, Jr., a member of the Exchange since July,
1945, and a partner in Gaines & Co. (New York City) since Au¬
gust, 1945. He is a Governor of the Association of Stock Exchange

fo*

given

the

first

this

the

year, taking the place
Charles A. Coffin Award

which

had

nually

at

been

presented

McKinney, managing partner in G. H. Walker &

EEI

previous

.Co. (St. Louis).

He has been active in the Stock Exchange
munity since 1942.

com¬

Frank L.

Newburger, Jr., a senior partner in Newburger &
(Philadelphia), and a Governor of the Philadelphia-Balti¬

Stock Exchange.
He was President of that Exchange from
March, 1954 to March, 1957.

more

Robert L.

Stott, Exchange member since December, 1929, and
(New York City).
Mr. Stott was

of

progressive

Exchange from May 1941 to May 1943 and
Exchange Governor for 12 years.
Four Governors

establishment

were

renominated to

serve

Hammill & Co.; and Charles L. Morse, Jr. of

y*fiiesi a. uomn Awarai
wvr

mrougn iyo/.

.

Offer 37/8% Bonds

the

an-

conven-

.

„

dams and

house and
and

a

reconstructed power-

an

increase in the size

capacity of

an

existing dam.

_

.

The offering is being maa(l
through the banks' fiscal agent,
John T. Knox, 130 William Street,

^

nationXe dealer"

Orithe
0f°a
and
cited by the judges "For excep- Power is constructing the Lewis uanu-er ffroUD
tional business
statesmanship in Smith Dam. It also has a license
s
y'
conceiving a comprehensive pro- to install a power plant at the
The proceeds from the sale at
gram for the complete develop- government dam formerly known the bonds will be used to redeem
ment, by use of private investor as Lock 17 and more recently $191 million of bonds maturing
capital of the water resources of named Bankhead Lock and Dam. May 1, 1959, and for lending operthe Coosa and Warrior River sys- It has a preliminary permit relat- ations.
AlabamaPower

Company

was

OKLAHOMA GAS AND ELECTRIC COMPANY

Co., all of New York City.
Mr.

partner in Johnson & Wood. He has been a
since 1950, a Governor since 1953 and
served ass Vice-Chairman in 1956 and 1957.
A native New York¬
er, Mr. Werle began his career as a page boy with the New York
Stock Exchange in 1919.
In 1924 he joined Johnson & Wood, and
in 1940 became a partner in the firm.
He was elected Governor

Werle, is

member of

a

.

.

.

continued steady progress in 1958,

the Exchange

square

throughout its 30,000

mile service area, the hub of the great

Southwest.

...

.

•

-

1953

% Increase

$54,299,000

$34,908,000

56%

Net Income———

$11,186,000

$ 5,997,000

86%

$1.45

$0.95

53%

2,802,000

1,825,000

54%

Generating Capacity—Kw—

908,000

438,000

107%

System Demand—Kw

713,100

408,400

75%

Earn, per

•• 1

,

1958

Revenues

TWENTY YEARS OF PROGRESS
1958

1948

share

Common—L

1938

$121,818,953

$71,911,281

109,591,000

65,000,000

% Debt af net utility plant...

39.4%

64.5%

70.4%

% Debt of total capitalization

41.5%

57.2%
21,533,455

22,007,800

•

53.7%

41,391,656

Kwh Sales (000)

48,944,000

Utility plant at orifinal cojit.. $323,776,823
Long-term debt......

;

Preferred stock
Convertible preference

stock..

J

11,483,360

Common stock and surplus....

101,895,477

27,057,268

20,250,117

Total capitalization

264,361,493

113,590,723

91,201,917

92,116,213

43,117,637

17,256,629

13,893,971

6,029,153

1,873.220

Operating

revenues

Net income

Write for

our

1958 Annual Report for statistical

and information

relating to

our

data

broad service area.

/

President

OKLAHOMA GAS AND ELECTRIC
321

NORTHERN INDIANA PUBLIC SERVICE COMPANY




.

Federal Land Banks

three-year terms:

Hemphill, Noyes &

of Thm

J®ized thr<ouigh pres<entatjOiJ
^hiJ

an

George F. Hackl, Jr. of Laird, Bissell & Meeds; H. Van Brunt
McKeever of Goodbody & Co.; Walter Maynard of Shearson,

develop¬

Edison Award, outstanding
^enlevement mthe industry waj

partner in Wagner, Stott & Co.
Chairman of the

signifi¬

its

State, all accomThe
12
Federal Land Banks
illc
X,CVAC1CIJL
plished without major controversy veslerdav CAnril 15 Y offered nuband all contributing importantly
licly $201 million of 3%% bonds*
to the public welfare and the eco- dated Mav 1
1959 and due Anril
nomic growth of the whole State."
20, 1960. The bonds are offered
The 421,700-kilowatt Coosa Riv- at 99%%
:
>• er
project consists of four new
' ■
:
>
SOUrces

tions.

Clifford P.

Co.

by J. E. Corette, President of the
Edison Electric Institute, at the
close of the Institute's 27th An-

and

Until the

Company

electric

for

ment.

terns in Alabama, for its effective
industry's public information program re-

Power

industry

in recognizing conscientious

cance

colleague's plaudits in the
industry at 27th annual meeting of Edison Electric Institute
for comprehensive program of water resources* development.

Southern

North Harvey,

COMPANY

Oklahoma City 1, Oklahoma

DONALD S. KENNEDY,

President

:

42

(1766)

The Commercial and Financial

Continued from page

23

result

of

overload

facilities.

On

pattern

ordering

Designing Electric Utility
Systems for the Future

and

will

kilowatts

less unit installed on the combined

As

the

systems.

increases

in

efficiency

'

Many systems are becoming so

steam

large and complex that automatic
load control is necessary for their
efficient operation. Economies re¬
sult

through closer adherence to
cost loading of turbo¬

increment

generators, but in addition the
capability of the automatic dis¬

patching and computing device is
greatly in excess
of a single

units

will

future

be

less

unfolds,
of

new

marked

boiler

and

that

efficient

machines

•

will

move

rapidly from base load operation
the peaking portion of the

systems under manual control may
require more than one dispatching
office,
with consequent delays.
Automatic dispatching equipment
can handle the most complex sys¬
response

time much

faster than under manual control.

companies/ have

tinued to be carried due
to

an

interconnection

entirely
when

a

operator

initiate the starting op¬

Another

interesting tool avail¬

on

the

large

savings

are

higher

their

insulation

con-

Tt '.is

increasingly evident

that

time and effort .must be de-

more

voted To

community

parallel with

relations

in

the expansion of our

:

systems.

'

direct

direct

costly

delays

the

in

have

components.

Is

so

to

relations•

our

community

with

population

as

the

density

increases!/!/^
-y/v;
\<s.-• ,jk
Along 1 he highways a method'
must; " be

economical

of attractive

givefi

found

to

provide

proved appearance.

im-f

Many of the-

highway systems now being built
planned have both physical and!
legislative barriers to a continuaor

ad-

be

a ' major - tion of present methods
of utility f'
applications, service installations. / A
multiple!
development " work circuit' pole line with services!
has been done
in Europe;"The across the new
super highways, as ;
practicality has been proved by a well as to near-side

of

number

it

and

may

special

the

of

is

operating installations

now

provement and

residences,!

will

question of !im-

a

be

lines,

cost reduction.

good

less

one

tolerable.

Two

pole;

side

each

on

are not a!
Rear property lines
solution under some;

answer.

.

Major transmission substations provide a
adjacent to metropolitan atea;s are • conditions but are not a panacea./
increasingly difficult
to ■located/There >> has
been a considerable '4
Land is scarce because of active amount of work done to develop

The

■

firm order

a

that

in

Most

machine size and steam conditions

for

is

it

number

a

factor

and

critical

1,000
equipment for

inversion

that

vantages

service

savings
on
turbo¬
improvement in
may be realized
and ultimate delivery dates im¬
proved by placing advance orders
for

use

kv*to

only for large blocks of power" over
long distances. However, it does

schedules

must be specified and

an

practical to
600

at

and

expensive

Possible

shop

will' provide

now

terminal

conversion

date because of late deliveries.

generators

It is

current

kv/ The

further advantage is the avoidance
of

current

answer.

future

delivery.
The
provide for price
the date of completion

could

and

steps required. Complete automa¬

at the load duration

why

and

items.

tion

can

provide

the

necessary

possible.

Ten percent of our capacity is re¬
quired to operate less than 2% of
the time. If new capacity can be in¬

loads

formers. At the

so

speed and intelligence required to
safeguard this equipment.,

date reveals

customer

sciousness of service abnormalities.
^
/
/;•;
Improved Community Relations

purchaser and to facilitate
early ordering of material. Orders
could be placed for long delivery

becoming

transmission

system,
feeding
directly into selected areas. A look

flicker. Both of these will require

greater attention with the

the

are

complex that it is
to be recognized is decentralized extremely difficult for the opera¬
."peak shaving" through the use of tor to obtain all essential informa¬
packaged type, unattended diesel tion in an emergency, analyze the
generator sets, or
gas
turbine situation and take the corrective
driven generators located

-

vide the necessary information to

under

able to us, which is just beginning

is
presently
no
underground system
high capacity long

automatic dispatching equipment.
Present large generating stations

the

load

interconnection

the

that

necessary design and engineering
work could be completed to pro¬

until

the

the

component

so

generator was carrying
the
control
of
the

long and costly outage would have
had

along

reactance

r

controlled

a satisfactory system using eithercombination underground - overlocations there, is a need fo-r com*- head, or all underground facilities,
siderable set-backs from property but/The economic 'penalties- are1
lines, extensive landscaping," ahd high; A number of solutions may
control of noise level of- trans- ultimately be worked out, depend-

eration, after which all operations
would be handled automatically

resulted

not been available,

a

curve,
where the cost of placed in storage. Estimates made
ogtaining high efficiency is not by them and the boiler manufac¬
justifiable. An analysis made for turers show that the nprmal an¬
the Philadelphia
Electric
Com¬ nual price increase, which will be
pany system shows a possibility of avoided, will pay the storage costs.
large savings in annual cost for In addition, there is an estimated
an extensive
use
of this type of 10% saving in the erection cost as
equipment as a supplement to a result of having all parts avail¬
providing base load capacity. One able at the time of erection. A

contract

con¬

resistance

capacitors

combination of these two will provide, a considerable improvement
in
both
voltage regulation and

for

cable

be

can

The

be reduced and, by

can

The> maintenance of our
V'.' i existing faciliiies and the installa-'l.
As an alternate to this there is
tion of new
facilities-require that
possibility that- high^voltage more car e f ui
consideration be

ordered

boilers built and delivered, to be

placed

where load has

lines, sthe

distance transmission.
This

flicker.
of

use;

v

utility

unusual

i

available

themselves for consideration. Two ,600 kv.

Necessary equipment and tech¬
nique are now available for com¬
plete automatic dispatching, of these diesel generator installa¬
including operation under pre¬ tions has been purchased and in¬
determined emergency conditions. stalled on an experimental basis
Such
equipment
will
provide to get actual operating experience.
accurate records of all interchange
One
operation
that
requires
transactions, and will accelerate intensive research and
develop¬
final accounting.
ment is the complete automatic
One item that cannot be evalu¬ control of
large unit boiler-turbo¬
ated on a basis of tangible savings, generator
systems, including all
but many be invaluable, is the
operations and checks necessary
extra reliability that results under on start-up and shut-down. The
emergency conditions. There are ultimate would be to have the
cases

the

may

there

mission

load

a

component

■

into

with

voltage

possible

be

^

problem
they have been in the past.
schedules. This will be a serious is
being actively investigated how
Systems will be
composed
of bottleneck with annual
capacity under joint sponsorship
of: the
many machines with little differ¬ additions
exceeding fifteen million industry and the mahufaeturers.
ence in their efficiencies.
There¬ kilowatts.
;/
vVi
i'' It may be that an insulatioh ;will
What can be done to alleviate be developed that is satisfactory
fore, unless peak-shaving capacity
is provided periodically, relatively this? Various possibilities
present for cables operating at'-46Q kv br

manual dispatch office. The larger

tem

it

areas

satisfactory

construction

present

railroad

lines needed for future bulk trans-

for service in

of the years 1963 and 1964.
There is a shortage of competent
skilled labor for field installation
under

along
among

be necessary to
go
to underground construction,
yet
for the
extra-high voltage
up

Thursday. April 16, 1959

.

are

considered. - In
locations in heavily built-

certain

each

even

than

the

fifteen

the

of

to

methods

.

.

lines

rights-of-way

hard

be

capacity

turbo-generator

transmission

cyclic

fabrication,

should be installed

available.

of

equipment

provide

to

million

basis

major

manufacturers

pressed

manufacturing

the

on

Chronicle

Avoiding Costly Cyclic Pattern

based
of

on

component

programs <?f residential and commercial
construction.
In ' some

fabrication;. -The

more

One such item is the rotor

forging, which could be ordered,
tested, fully machined, then put in
offset

the

completion

careful

of

cost

analysis

•-

storage

of

and

early

by

savings and
improvements in shop

conditions, but
needs and

the

■

}'.eWre new high intensity street

'

years

mission and distribution line wire
size
was
frequently doterminied:

items

such

the

of
growth of the industry the Trans-:

could result in major

substantial

to

lines, additionalvcapacity* -interests of, all.
./V
T,:
higher " voltage -Requiring • /New; and,/improved highways

Luring

schedule. A

on

time, greater Thg on the local
provide "for' they must meet

same

required

wider phase spacing/;^/

storage. Resultant savings should
assure

is

area

piy,to'it

become

^\ ™

factors

to

hllild

mechanical

assumed

strength'to
loading conditions

im-

TuminalrA

omijnmpnt

posed by temperature, wind,-and
generating labor schedules, and in over-all ice. This
provided substantial adstation part of the problem, there
ever
is finally developed should
delivery periods. A method of ditional unused electrical
capacity. b
stalled at low capital cost to sup¬ is a difficult situation
eith
in annearancd *
facing the overcoming
thepresent
wide In: recent years
thi, excess capac-'
ply this portion of the load, the industry which will not
only in¬ swings in orders and deliveries
lty
has
provided
a
welcome
fuel cost is of little importance crease
provide a high intensitv clareless
capital costs, but may result will be a major factor in our effort
margin for load growth:; Much of
because of
the
short operating in
a
dislocation
of
scheduled to provide additional
: *
capacity at it has been used to supply
time. In addition, benefits are ob¬
,our
Q
ofdhenroblem^ in conneccapacity additions needed within minimum cost. The economics of
growing
loads
and
tained through savings of trans¬ the next
five years. This is the load factor improvement is
just as necessary to rep
mission
acg many of the
losses,
bulk
power cyclic
variation
in
orders
for important to the manufacturer as
commercial
and
domestic ■. conconductors for load reasons,
transmission and generating
A sumer is the
heavy
equipment,
transformers, to the utility.
inadeqUacy of wirl eview
should be made of the
station
investment and
in
im¬ boilers
and
jng on ,be secondaries and ineomturbo-generators
New sites for generating stations existing design criteria
to.
proved area reliability.
which results in inefficient utili¬
deter-;ing services and on the customer's
and
major substations will be¬ mine how much the mechanical
;< Comprehensive studies of our zation of
property. A possible solution is
manufacturing facilities, come an
increasingly difficult in strength should be increased to an
system
have
shown
that
an
but even more serious, a large
increase in the secondary voltthe next decade, particularly for lmprove service
installed first cost differential of variation in work
reliability.. An age This is
forces. This is a
being tried inJ some
those
companies
serving
large increase m the minimum, design test
$50 per kilowatt is required to costly
areas
and information from
problem,
costly
to
the metropolitan areas.
Increasing strength will provide additional these
show sufficient savings to make
manufacturer in idle shop time
installations should help to"
public resistance is now evident in insurance against line damage and
peak-shaving attractive, with and dislocated
decide this question.
engineering and some locations, a factor which will lailure due to
Lighting and
anticipated
price
wind.and sleet. At small appliances may be supplied
levels,
load shop labor schedules, and costly
undoubtedly become more serious the same time, it will provide an at
factors and rates of load
the pleseni voltage level with
growth. to the customer in delays
as time goes on. Greater
This differential may be attainable
develop¬ additional margin for future load
and construction
major
Before

leaving

the

attractive

£

n|ht at'ni^ht ^

glar

UJi^w

,

with

schedule

peak-shaving equipment




now

rangements that

are an

rear¬

inevitable

ment

of

the

capacity

of

growth at

kilowatt
more

capacity

to

are

a

Minimum

present

sites must be accepted as essential,
and stations having multi-million

standards

established

low

for

appliances and

increment-cost,

new

should

v;

such

conditioning and electric
heating supplied at a higher volt-

construction

age.»

become.; and for all facilities replaced for

common.

loads

air

as ;

be

>

^

«,

.

.-j/,;/.

.

y

capacity reinforcement. The entire
distribution system and

transmis-

Overcoming Transmission
Expense

T'VT/,

;

Outgoing
transmission '.Tine
capacity becomes a key to such
development. Hand-in-hand''goes
the problem of
right-of-way Tor

.

major

outage,

area

n-P PfAiiKln
of trouble

non

can

of restoration

overhead transmission lines,. They

tion

of

actively- resisted in built-up
sections, and land is.:s becoming

reduced

are

scarce

in cost

or

therefore

and

.

prohibitive

non-existent. The

acre--

required by a number of high
voltage aerial lines radiating from
a
major
generating
station', or
age

substations

gives

pause

half.

customer
to

This

the

Vin
be r»lif in
cut in

cost

and

amount

.healthy; The future is thought ^Lt
Vltllf
flip
'li!
half, the *in terms-of the
past,--with some-1
'iL-'.

,

_r

the

clur^^'Times^Tonvjdtiohtbat-this growth'"
outages ^an;^|^^n^^htinue,^ but instead must i"

substantially;^ess|th^flatten /^6ut;: Let"

us

about

banish

this'

through thought from our
planning
GeoFirst,; outside ;• help metric/growth and
developifient
brought in for emergency restora-, rshow up in
many/natural TaWS"
tion will be unfamiliar with the Just
two examples are the sensiterritory and construction stand- tivity of. our
eyes to light and our
two

comes

factors.

ards and therefore will work at

for- much slower rate than your

a

to
sound, which are both an r
exponential fungtionv'The market '
ears

own

thought. A right-of-way 100 feet
wide requires 13 acres per mile.

employees. ^ Secondly,
the ,efficiency of the dispatching organi-

for energy

As land values continue
and new routes become

zation and the supervision will be

sales

to climb

unavail-; more
nearly normal under the
able it will be necessary to revise reduced amount of
trouble instead
our

thinking

such

on

rights-of-

way.

Multiple

use

transmission

pipe

lines,
tower lines,

of right-of-way by

lines
use

and

and

of

oil

or

gas

multi-circuit

construction

of

is .expanding in .many
directions and our promotion ahd
must*be

geared to this exThere is no intention to

pansioh;
give

t h

e

impression

of

a

large and

strange work force.,
Some

tained

benefits

;

"

load

1
:

development.

;

t hat

drastically reduced because of growth will be
automatic, but to
long hours under high stress and show that the market
has
burden

>

unlim-

.

of

the added

■
>

will

.

also

in lower voltage

be

ob-

drop and

ited

potential' for

Problems i. of
financing and construction of physical facilities face
us.

Each of the fields of sales, fi-

»

Number 5838

189

Volume

.

The Commercial and Financial Chronicle

.

.

'

■
.

nancing,. engineering

and opera¬
and well
with man-

(1767)

Sv

*

informed

■

employees

Our

agement andi leadership of the
highest caliber. Ahead of our in¬

,

Reporter

By JOHN T. CHIPPENDALE, JR.

*

be

cannot

that

by

solved

.using yesterdays
research,, jn or^e

l^thods More
pione^ynfa and
prOsr^sn^e^tmkmg,
ejy

Yieids in the near-term money long Treasury bill playing a feamarket; continue to rise and this tured role in this one. It is evident,
iefjects the belief that the Treas- however, that the government is

long-Treasury bill in the May re-, issues indefinitely to corporations
funding and new cash offering. It' by the method of having the com-

dovolonment

«»*<

•has:4e?nva

'

hce'...ceded

•:

•-

tong

88

the mercxal banks and dealers act as

as

bud8et.is not in balance and there underwriters because,

partnership

.multiple

not going to be able to sell these

will be making full use of the

ury

:

Research

immediate prospects of this. improvement

-;il"e «<>

mn-

>

John

The

and

kets

atv veiyr

•

ivSli'

i • utility ^'ciimpantes and
:,,b " manufacturers'/i Our industry has1
hV

information:

made' -available 'full

-

^intervals.' building of inventories

regular

but

also

give either one of for some expansion of facilities.
markets enough time to This means that eventually the

all

dH>es^ the.issues that are offered, deposit banks will be

the main

uncertain buyers of government securities
will prevails ; ^whether they be offered for rethat'- the .knovvdedgbLbf^Ohe'iisf.-/
competitive position of the funding or new money purposes;
shared by-all;- An active teamwork;
goveri^entfbbnd market has been
»
f N
York and

ori-progress and on' difficulties exV'perienced with new developments'. ai?dr.eau^iou,s;^une
V

so

i

*

v

.

1959

Rent

at

Ed¬

a

100%

faster

United States.

Weisl,

dation,
Robert Lehman

partner, Simp¬
son, Thacher
BUU» uiatucl

Banks^o h[cre^e
;:..-LI»icago. ^nks to .Increase
^The;

the

rate

than

the

Through the Fouiv~

multi-milliori

entire

dollar fortune of the Hertz

jactiVe^ol

andstrengthened.^Treasuries'

must be fostered

-w

eri-i'r/1:

and-.the maufacturing. industry

•*: v

''

2SJ^

ber banks^of the federal Reserve mittee. Other officers include
Systeiu-?The eiteqt of this move, if Harry N. Wyatt, partner D'An-

allowed to remain in the final cona,<-Pflaum, • Wyatt & Riskind
vanced developments even more
v A Price Depressant
version of- the banking legislation, 0f Chicago, who will become As/ aggressively.- The electric; utility- ;V ^e:^m^^efeiisive tond in tbe wouMred^e ^r^rye^uiresistant Chairman of the Execuindustry must expand its activities government' market appears to be ^.nts oi the New York*City and tive Committee and Secretary of
Mn the .field of'.research*.''
^Greater^caused "by the growing attention' Chicago banks. ^Under existing the Foundation; George E. Allen,
AhmrH
anrl
AlvnrH
nf
l attention to applied research can that *s being given to the May POnnitlOIlS t.nIS WOllm ffPP Phoilt nohtnor
conditions this would free about partner Alvord and Alvord of
'produce re s u 11 s many, times operation of the Treasury which $400,000,000 ' of ^reserves for the Washington, D. C., who will serve
greater than the effort and ex- ' will embody hot only the refund--New York City banks. At present, as Vice-President; and Allan B.
pense involved. Scientific knowling of matUririg issues but also the J the veserve irequirement for the Hunter, partner Lehman Broth■edge is expanding at ah uixprece- raising: of xie'W money. There will New J0rk City and Chicago banks ers, who will serve as Treasurer.
dented rate and constant vigilance be
c5ming due next month $2,750,- !s
of demand deposits. Banks It is the policy of the Foundation
couraged ito

Ffequent Treasury Issues *: •

expand ? these- = ad-T

r;

engSeeriS

gftudents

^

...

Co. and Hertz

Car System.

A

It was cre¬
mated in response to reports that
; Russia
was
producing engineers

the

year

was

L.

will be
1960, to

qualified. "'j

and

of the Yellow Cab

; Named Pres¬

win

interested

family
will be devoted to the training Of
philosophy has grown up betiv^eeh
under a bit: more pressure
and Bartiett o£ New York' and qualified and needy
T the equipment manufacturers qhd^tnee there is . evidence that cerCoUnsel for the United States Prewho will pledge
make
; • the utility industry with the: ob-' ^^h .investors are taking losses in
Senate i Banking and Cur- paredness Committee headed by their skills available for the coun~
1
developing better. and tttese 5 securities and putting the rency Committee unexpectedly Senator Lyndon Johnson, of Texas.
defenSeinthe event of ^
r
*; more reliable equipment and of'Proceeds'in-itax-exempt:obliga- voted last week 4o abolish the John D. Hertz, founder of the national ernergencv
amoimt
(-steadily moving forward Technic-^ tiqns.; %e .tax-free yield is more-central reserve-city classification educational trust, will serve as
Schol
;cally and economically. This spirit', uttractive" than
is available^ for reserve,requirements of mem- chairman of the Executive Com- need
Awards may be
;

:

•

AngeleS,

caiif.

current

have

gineering Scholarship Foundation
was
established
in
September,
1957
by John D. Hertz, founder

meetinj;

for

Ten

15.

The Fannie and John Hertz En¬

second an_

ident

to

successful, the program
in the Spring of

cholarship
Foundation, at

Los
'

limited

opened

S

of directors in
V

of

already been applied for.
Sub¬
scriptions this year will be made
available only to friends of the
members
of the Foundation.
If

Hertz

nual

upon

number

awards

Engineering

with the the

business, these

in

of

the program will
a trial basis, and
new
sponsored

1959

placed

the

^tprrhairwon^? Vh^

Fannie

used

During
be

Lehman, senior partner

ing firm of Lehman Brothers, has
Board

All such funds
only for scholarship

scholarship.
be

grants.

of the New York investment bank¬

<

ri'

1•;?_£:>-Supporting

will

Foundation Chairman

Governments

on

Robert

dustry are many challenging problems

each

Robt. Lehman Named

tion, requires ^ capable
"

43

tS

Thl
Jship^awards'varies witE
ulld fS

S

gustenanS

wheVe calledtor
wen as f0p tuition and the usual
school expense

*

'

.

nflAvifirtr.

•_

needed to utilize

is

promptly and .-effectively.
The key to the future of our dy-

industry lies

effective

We

must

,.research-iby

support

and

Then

ness

the

will

Treasury

be

under the proposed legislation.

Ho_

«+•

io

ahead.

problems

encourage

111 ot.her lal^e cfltl,ees, h»ve
t0 ele.ct the Pre8ldenLa,»d ST
requirements of 1614% and this man for one year Those desigfl8ure would apply to the New nated may succeed to the same
York City and Chicago banks office after a lapse of two years.

000 000 of certificates of indebted-

toosh.SgSo-fce mSaCtoe
tech-

of science and
science

use

for. the

noiogy

in -the

refunding is taken care of, for between;$2,000,0.00,000 and $3,000,ooo,000 of new money in order to

.

'

.

Joms

the

manufacturers, meet* the cash needs for the curbut' must also providd.
lead^fthip;.^n\ fj^al year which ends'on
; m research ; and development un
fjuno ..30.'--"
•

»

'

.

be

intensified

force

our

determine

to

funds

does

timc for the

whrch
.

health.

economic

In conclusion, I view

)^th

;j

lems

we

.

the future

optimism,: The^;prob-^
are not fundamental
growth pattern.

Positive steps to meet our obliga4{a„

tion

T

capacity,

adequate

assure

reliability

and
will; provide.

1

-■

orv,n,n

ample

acceptability,

and

increased

••

in

-

higher

.

economy

.

healthy; base

SPRINGFIELD.
Preston

has

>,

MILWAUKEE. Wis.—William J.

Walter, senior at Marquette Uni¬
versity
from
Wakefield,
Mich.,

(Special

of

Wallace

connected

E.

Corp.; Leonard S. Florsheim, Chi¬
cago
industrialist; Arthur Han-

SSFfiTwf
rtz-

a

and

Herman

man;

H.

Trpns,.irv

lreas^iry

will

offpr

Livermore

expense

N.

PINES,

C.-

$1,000 per year for four
$i,uuu per year i
college years, or to make a onecollege years, or to make
time
contribution
of $4,000 for

EUGENE, Ore.—Robert P. CarIon Is now with Pacific Northwest
Company, 11 West 11th Street.

670 South-

^ '

in their

administrative

All

in connection with such
special awards will be absorbed
by the Foundation.
Subscribers
will be asked to contribute an average of
erage of

time contribution of S4.(

o

Branch

•£•

r,

Yields

There

...

Available

Other Securities

is

little

doubt

a

in

ury

submarine under the North Pole

money

market circles but what the Treas¬

a

machete in Hawaii

will make offerings whenever

possible, if only in token amounts,
of securities that will extend the

-presented annually to the finance

average maturity of the government debt. This tends to limit the

the

won-

"Griffin

"

student who excels in courses re"lated

to. investment

announced.

fwas

it appreciation possibilities of the
to government bond market since it
is evident that there will be no
shortage of the debt lengthening
obligations. On the other hand, the

banking,

Amounting

•

$100.00, the award was established
last
year
by
The
Milwaukee
"Company.
:

firm

The

^

has

established

"Griffin Award"

identical annual
the

-at

The

an

University

Wisconsin,

of

for

demand

such

issues

has

been sizable for a long time, since

the

usual buyers

of these

issues

have been stock minded for a long

-'
In
addition, both universities
received plaques from the invest-

period because they are concerned
more
with hedging against the
ravages of inflation.
Also, the upward trend of taxes.
which is affecting the revenues of

selected

♦

*

1
•

as

firm

ment

the

has

yet.

1 "

be

to

•

-

;'

*

inscribed

of the

names

-

not

.

with

winners.

institutional investors, is not
offset
by making
purchases of
many

Now First Monticello
—Tr_T __t

T

^

,•

-xr

MGNTICELLO:, N. Y.
of

name

Rhulen

i

uC"

-

x

changed to

The firm
Co.,

Planning

^roa?^?y,x. *!?
First

nnvotmn

t

Monticello
* *'

■"

poration.

t

*

5,een

Cor-

*■

*

■

.

G.

commitments in

Hines

.staff

of

been

Baron,

Lawrence
Canon

has

HILLS,

those

institu-

tions that are not concerned with
protection can get a better
yield from corporate bonds than
they can from long-term govern¬
-

added

to

Kolb

Drive.

over

pistol in Tanganyika

Brazil

The world-wide
attracts

new

Stimulates
\

prestige of Connecticut products and workmen
industry to the state, encourages diversification and

expansion.

-

THE HARTFORD ELECTRIC LIGHT COMPANY
the busy metropolitan areas of Stamford, New London,
Hartford and Torrington, Annual Report on request.

serves

Corporation
To

the

and

Incorporated, 253 North




helicopter

,

ment issues.

Calif.—Max

Black,

a

tax-exempt obli-

Likewise,

gations.

(Special to The Financlal Chronicle)

BEVERLY

a

government bonds, but by making

.

Baron, Black Adds
;

I

not

been

winner

1959

The

coming

Treasury

is

Buying Coming
End

an

operation

expected

to

of

be

the

in

short-term issues mainly, with the

176 Cumberland Avenue

xr

of

the

_aL.

Law-

m.

V

With facitlC INorthwest ?

^e_

-

A

Better

Leh-

rence Radiation Laboratory, University of California; Edwin L.
Weisl; and Harry N. Wyatt.

names.

uptrend in these quotations.
?'*?■

partners

Robert

Foundation's facilities in granting

curities that will put a ceiling on
the

Kahn,

H?ovct'

Floyd B. Odium, Chairmati

betterment in these obliga¬
f.

"

Ed gar'

Brothers;

-

Award"

has

J

"• "fer"'

.

if there should be any
price

are:

corporations and others in- of the Board, Atlas Cprp.J .Joseph
terested id Riding in the defense H. Rosenberg, retired West Coast
of the United States could use the banker; Edward Teller, Director

own

Kivette is with DietenKivette is with Dieten-

west Broad Street.

no

Directors of the Foundation

George E. Allen; Victor Emanuel,
President of Avco Manufacturing

engineering scholarships

IncV

Co.

&

E.
hofer and Heartfield,

govern-

Is

—

to The Financial Ciikonicle)

SOUTHERN

Willis
Willis

improve-

no

Mo.

become

securities, and
appreciable

these

0f

shortage

In

Wins "Griffin" Award-

there is

the'demand

westwood Boulevard

sons,

r

'

L.

announced the estab-

ship Program through which per-

With Dietenhofer Co.

much

digesting of the issues

jlsueg- STthere

on

which to;build unlimited growth.

very

used for these purposes.

Accordingiy

face,

w.caknesses in our

'

aro

allow

not

Directors

Llay

^special to the finanpial ciytoNicLF,)

Th.e fact - that the Treasury has with Taussig
Day
techniques and devices
to be continually coming into the Holland
Building
I exploring; .new^ or advanced con^; mai,ketVf0p either refunding pur8" ;cepts pot yet ready for commer-* pbsea, or for the raising of new
must

administra-

Found™on

lishment of a Sponsored Scholar- Lehman

n

1 aussig,

•

cial utilization. Economic research

vear an

t\/t

n

^

develop-. 000,000 of special bills and $1,817,-

new

ments

■namic

1

•

i

Earlier this

tive office of the
was
established in Los Angeles at 1314

Wethersfield, Connecticut

44

(1768)

The Commercial and Financial Chronicle

Continued jrom page

things been happening so fast in public needs and wants what we
industry of ours. It is work¬ have to sell—and the public to¬
ing with new products and proc¬ day has a huge pent-up purchas¬
esses, new machines and methods, ing power and the highest per¬
and
most
important, with new sonal income in its history. And
ideas and concepts and principles. we have the programs to stimu¬
In atomic power, we are all work¬ late more
widespread use of elec¬

14

creases

exceeding the rise in

pro¬

ductivity.
What
rate

of

can we

tradition

regard

do to increase the

productivity increase?

First, we

bine-generator, and its largest,
a foreign manufacturer.

from

can

of

our

assure

that the
in this

industry

maintained.

is

The

ag¬

gressive pursuit of this tradition,
by the electric utilities and the

Prices and Productivity

.

hearing a good deal
electrical manufacturers, has pro¬
these days to the effect that pro¬
vided the American economy a
ductivity increases are
causing
shining example of close custom¬
unemployment. This might be a
er-supplier cooperation making a
valid argument if the American
We

are

at

consumed

consumer

a

striking

fixed

contribution

to

an

im¬

proved standard of living and to
the fight against inflation.
This

The fact is

rate, but he doesn't.

that improved productivity means

long-term cooperation, aimed at
.
lowered prices
constantly more efficient genera¬
consumption
transmission and distribu¬
end increased consumption means tion,
tion of electrical power, is some¬
;f n crease d employment. It is "
thing of which we can feel jus¬
growth through productivity that
- * '
* '
has made eight million new jobs tifiably proud. •.'.
I pledge Westinghouse to con¬
"In the past 10 years and has put
tinued efforts, not only to main¬
tnore than 63. million of our peo-

lowered prices

.

.

.

tain this

■

us

to double the amount of goods

produce and

consume every

25

*

years,
enable

and only productivity

can
that

'

tradition* but also to

it. •' As i evidence

hance

of

to continue

to

do

from

page

with

Its

power

to : say

..

;

The American

.

before

tees of Congress.

15

Why

do

;

,

they?

commit¬

.

.

Obviously

i

fits, into';, the

general

this
pat¬

tern of .seeking, political favor
by

Way

seeming, to give- people something
for
nothing. -'.Too*; often ) people
seeking power are willing to cast
.

,

In Tomorrow's World

pledge, jn spite of the cost-price So long as your visits are inform¬
squeeze of recent years, and in: ative and helpful, you cannot visit
spite of the temporary lull in our our offices in Washington too
business

personal

ments,

stand

en¬
this

utilities, we are
In the future.
It is productivity currently spending, for apparatus
research and development, sub¬
that makes us
equal with the
vastly greater manpower of the stantially more than: we have in
■jnations that threaten us. When and the company's history.
Also, we
have
invested
If this nation ever acts to curb will
during the
Its productivity gains for any rea¬ five-year
period
1957
to
1962
son whatsoever, we are finished more in facilities for utility equip¬
ment development and manufac¬
©s a world power.
We are also hearing, a good deql ture than in any other period in
our history, to improve our tech¬
these days about industry being
uble to afford to pay Wage in¬ nology and to make sure you can
creases in excess of productivity get deliveries when you need the
;without raising prices, financing equipment.
There is another effort we can
the added costs out of profits. Un¬
fortunately, that is what has been make jointly as a contribution to
£%fng on—at least in the electrical accelerating the rate of produc¬
American
equipment industry., In the five- tivity in this country.
year period 1952-1957,- the mar¬ industry is the mutual customer
of both the producers of electric
gins
in
our
industry
declined
us

power.

"90% of union members with

publications, and

Continued

.

pie at work at record-high wages.
;lt is productivity that has enabled
we

85 or

their

.

increased

mean

government

interest really should be with the
electric companies. • You furnish

require¬
nothing of
the
power they use on their jobs to
trical power.
ing in a whole new art.
These programs— increase
their
productivity. - I
Today there is almost no limit Live Better Electrically, Power- understand the unions
represent¬
to
what
our
technology
can Up, The Adequate
Wiring Pro¬ ing your employees have publicly
achieve, whether we apply that gram, the Gold Medallion Home, opposed any expansion of govern¬
technology to industrial machin¬ the Total Electric Home, among ment power —
Federal, state, or
ery or to
household appliances, others—will not only benefit our local.
They - have found
their
to electrical apparatus, or to the industry;
they will
enhance members fare much better under
control system for a guided mis¬ America's standard of
living, and company ownership and operation
sile. This is true, above all, when increase the dignity of the Amer¬ than
they do under government.
we
apply technology to electric ican worker.
One would think with this her
But in the final analysis, the
power—that product of our indus¬
ing the case, other unions not di¬
try which a philosopher has called outcome of these efforts, and all
rectly connected with the electric
"the most beautiful, the most ver¬ of the others we are
making to¬ power
industry would take the
satile, the most powerful and the gether, is dependent on a solu¬ same
position. But they have not.
most docile force that man has tion of the overriding domestic
They oppose the things that might
ever had under his control."
economic problem of our time— benefit
workers in your industry
Beyond that, industry needs and inflation, and the evils that ac¬ and
support all types of govern¬
wants what we have to sell. The company it.
ment power. They do this in their

The Electiical Future
financially far greater considera¬
tions
of life,
performance and
service.
Recently, this problem
was compounded by the decision
Of the TVA to buy its first tur¬

Thursday, April 16, 1959

.

moting

this

New Dimensions in

.

.

often.
To

vein,
issues
out

investigating
affairs.
have

continue
you
or

in

are not
stave off

votes,

disaster with¬

you do not have
now.
Although the climate
opinion with regard to your
industry in Washington has im¬
proved compared to earlier years,
it has not improved enough to
prevent your industry from losing

them
of

remarkably

Some

turned

you

successful

have been
on
the

—have

been

of

up

from

union

borrowed,

Criminals
in labor

thugs

the

as

we

members

to

used

to

for
have

minority)'^

/
bait
new

RrJ\yas;tisedhi ancient times

and it*: is being)used today. Votes

wih);feleCti'ons^ ;if

leaders
• public
up their own
political;power-and',that is their
objective? (If; you .have to be sac¬
rificed in the, scramble, that's it.cari'-inffrierice

defeat

union

-

election. of

.

officials, theyl'.build

public
office.
high office

held

Criminals,

other racketeers

that

.

Tbi's "give-away• theory "is
for ".vote's; (There is
nothing
in it):

been

or

matters not

.

.

be returned,
Union money

elect

their due.' .It

majority have to pay for it
through, taxation to r give to a

labor

has

GG^erhi^nCimwer ?is ••'paraded
giving something' to the people

the

scandalous.

beaten
Money extracted

organizations.

and

things

as

members and

organized

never

candidates

management

are
—

stolen outright.

has been

-

intimidated,

arid murdered.

or

Committee—

labor

this practical Laboring people
non-members of
going to win

and

ground. I must say

McClellan

ate—the

have

These are) among the reasons
Washington.
And this, used organized labor to force their
in spite of the fact that your in¬ will on employers and on em¬ why it is so important for us to
re-define and re-state our values.
dustry has only a minority of ployees who wanted no part of
staunch
Unfortunately, some em¬ We can do this and we must if we
supporters in the Con¬ them.
ployers have connived with un¬ are to survive.: ' ( )?)'gress.
Where have, we, fallen, down?
It will take votes to stop the scrupulous labor leaders to sacri¬
fice the welfare of the working Why is it that conservatism—be¬
trend. I am not suggesting that
lief in the ultimate importance of
people.
:
: v
cibout one-third as a consequence power and the producers of elec¬ you run for
political office or sup¬
the individual human
of financing a cost-price squeeze tric power equipment.
These
being—or
things should
be
cor¬
We can port candidates of one particular
free enterprise:—call it what
out of profits.
you
The simple fact is make common cause in an inten¬ political party.
But I do suggest rected by Federal law and yet as
will, finds itself on thin ice today?
sified program to increase indus¬
that,
in
our
economy,
every
you maintain a continuing interest widely as these sickening atroci¬
It is not that-our
man's
principles have
income is another man's trial productivity through power¬ in the
philosophy of those who ties have been publicized over the
cost. Every increase in wage
past three years, remedial legis¬ failed," but rather that we have
costs, ing up. We have a magnificent seek office.
failed to translate them and make
unless and until matched by an opportunity to
lation has yet to be enacted.
promote jointly,
You
Most legislators who continual¬
them meaningful in terms of to¬
Increase in productive
efficiency, even more intensively than we ly support ideas and legislation wonder why? The answer is very
As certainly as
is an increase in the cost of
have
to date, a
higher rate of that lead us nearer the welfare simple. The leaders of organized day's problems.
pro¬
we sit here
duction.
today, if we don't find
These costs must be re¬ mechanization
of
the
nation's
labor have become so politically
state would be highly indignant if
the. answer to .this; we won't be
covered in increased prices.
powerful they are able to stop or
If manufacturing facilities
through accused of
undermining our.free
here tomorrow and- there. won't
to tone down proposed legislation
industry were to pay a wage in¬ greater use of electric power;"In
enterprise system. But their votes
be. any. private electrie
crease each year 1% in
companies.
to where it will not do the job. this effort, too, I pledge the pow¬
excess of
are the more detrimental because
The
core) of
this problem, it
Improvement in productivity, and er industry the full cooperation of
Do not infer from what I have
the result
chisels
away
at our
seems to me, is to
Without any price
decide, and to
increase, the Westinghouse, not only in our system of government a little at said that I think all leaders of
help people decide, where to draw
last
dollar of
corporate profits sales activities, but also in en¬ a time while
Quite the line on what the
pretending to sup¬ organized labor are bad.
would disappear
government
somqtime around larged research and development port it.
the contrary.
The rotten apples should do and should
the early spring of 1970.
not-do. The
And if programs dedicated to the crea¬
we
have dug out of. the barrel
So
far
answer
is not to have the gov¬
we
have
not
even
that happened,
the problems I tion of new concepts of electrical
touched on labor and I am sure comprise a very small percentage ernment do nothing, but to have
-have discussed would have com¬ automation.
of
those
connected
with
labor. the
government do the right thing.
you would not expect me to speak
pletely disappeared, because we
^ith respect to the other fac¬ to you without mentioning the But the disturbing thing to me is
One thing we have failed to
would be enveloped
by an eco¬ tor in the equation of inflation:
that even upright leaders oppose
point out
subject.
nomical and political system in
Certainly it ties in with
convincingly is that
we
must hold the line on wage
corrective
legislation
because
some
of your problems that we
government programs are always
which such problems are not
per¬ costs; we must resist increases in
they are afraid it might infringe directed at the
have been discussing.
mitted to exist,
group and tend
and, further, in excess of productivity.
on their
I must
power.
to submerge the individual.
which neither private
Yet
business nor confess that this job involves some
Denies Charge of Labor-Baiting
Let any organization once ac¬ when we lose
free labor unions are
sight of the indi¬
permitted problems that our efforts to im¬
vidual
Some labor leaders and some of quire power, it will fight to keep
we
•to exist.
destroy all the im¬
prove productivity do not.
One
it—that goes for either businesss portant values we cherish.
my
colleagues
consider
me
a
These problems we have—these of these is the
development of a labor-baiter. I am not.
We only have to look around
I defy the or labor. There was a time in this
problems of spiraling costs — of public
awareness
of
the
vital
contention
that/any man in the country when business became too us to see how far we have gone
wage rates outrunning productiv¬ threat to the
security of our econ¬ labor movement or in
powerful politically. It abused that in this respect—growth of con¬
Congress
ity gains—of wage increases cost¬ omy posed by inflationary wage
has any more concern for Ameri¬ power to the extent that the peo¬ formity, the decline of individual
ing us out of competition with increases. As corporate citizens
ca's
working men and women, ple in righteous wrath clipped its incentive, the search for security
foreign producers
these prob¬ we will do our part to this end.
at all costs
both union and non-union, than I wings. Now labor has reached the
these things are
lems are larger than our indus¬ But the nation's electric
power have.
My
concern
is
for
the point where its powers must be everywhere.
try.
They are national problems, companies, with their intimate
The philosophy of some
worker.
I fear some of my critics controlled, otherwise we will soon
hut our industry—the
leading
future of community relations,
and with —those who
be under a labor government, ir¬ labor officials is the
parade as the cham¬
perfect ex¬
our
industry—is intimately con¬ their close and frequent contact
respective of what political party ample of what happens when the
pions of labor — are more con¬
cerned with how our
nation meets with the public, are in a unique
cerned with the personal power brand it may use for the purpose. individual is lost sight of in the
«nd solves them.
position to help create a climate
of the labor boss and the influ¬
The State of Michigan has been search for security for the
group.
of public opinion essential to cor¬
ence he may have on their
Offers Suggestion
polit¬ taken over by labor through its Labor has directed its attention
rection of this massive
problem. ical fortunes than
they are in the control over the Democratic Party at getting the most benefits, the
Since I have posed the
prob¬ Inflation cannot be licked unless welfare of the
worker.
in that State.
But labor is not most security for its group, and
lems in the first
place, may 1 close we dedicate ourselves to this pur¬
I am not against the labor lead¬ satisfied with
Michigan. It spent within its own framework has
by suggesting, briefly and in all pose.
er so long as he is the
duly elected millions of dollars last year to in¬ deprived the individual of liberty,
tiumility, a course of action we
Closing Summation
representative of labor and con¬ fluence elections in other states, freedom, and individuality. Where
Knight take?
In
closing, let me say that while fines his activities to those things including my State of
laws permit, the
laboring man is
Speaking as a representative of we face
Arizona,
great problems, with the that concern the ones he
the electrical
repre¬ and over-all it enjoyed an alarm¬ deprived of his right to work un¬
industry, I suggest rich talent available to
less he joins a union.
Where we part company is ing degree of success.
us, with sents.
In many
"that we tackle the
problem by the spirit of
cooperation we have when the labor boss uses his
unions he has no control over his
posi¬
dealing forcefully with the two
Notes Divisive Union Stand
established, we face even great¬ tion to defraud those he repre¬
union dues and is often de¬
basic factors of
^

whole

in

.

.

,

,

"

—

—

the

inflationary

equation: acceleration of the
ward

trend

•continued

of

up¬

er

opportunities.

Not

since

the

resistance

to

wage




in¬

have

so

sents

days

of

and

to

promote

his

Now where does all of this fit

own

George political ambitions.
and Thomas Edison
As you know, I am a member
many new and exciting of a Select Committee of the Sen¬

productivity, and Westinghouse

in

with

lems?
have

electric

Organized
no

snecifio

prob¬

company

labor

interest

should
in

Dro-

prived
own

of

the

officers.

recourse

through

to

fear

right
He

law

of

is

to

elect

his

deprived of
justice

and

brutality

from

Number 5838

189

Volume

.

.

he .is

Often

leaders.

union

.

Continued

de¬

for

desires.

exist in
urgent for us, there¬

It becomes

it

sort of thing that Messrs.
Meany, Reuther and the others would have them do now.
Business generally has recovered much of the larger part
of the headway it lost during the recent recession but
many of the men formerly employed in industry are now
unable to find work to their liking at wages that their
union says they must get. The reason? Obviously business
has found ways and means of getting the work done with
fewer men.-It has spent millions, yes hundreds of millions
for expensive and complicated machinery and other de¬
vices in order to produce what the people want at less cost.
great deal too much of the

the indi¬

vidual, we will not make progress.
a friend of

Government cannot be

people if it ignores the indi¬

vidual.

do

then

Where

the

draw

we

doing
things for all the people and the
individual doing things for him¬
government

line

between

self?

It seems to me this Admin¬

developed at least
standard to guide us; namely,
has

istration

people

-

something

do

can

for

far-sighted businessmen would in any
event have taken advantage of advances in technology to
reduce costs in every way they could, but modern equip¬
ment costs a great deal of money. It becomes effective in
reducing costs in a good many cases chiefly for the reason
that the cost of doing the same things in any other way is
even more expensive as a result of excessive wages, and
the hundred and one restrictions imposed by organized
labor which does not have to trouble itself about the anti¬
Of

themselves then there is no need
for

government to do

^Clear-Cut Test'/::r;.^-:p;;
Now the electric power! field' is

-:

one

in which, this

clear-cut area

line

can

well

for

be drawn.) You know as
I do that there is no need

as

the

full

government to assume a
utility respon¬
.

and complete

sibility. Here, without question,
people themselves
are
able to

where

interests
merge with national policy and
this
is
where your - most vital
problem of -communication lies.
And this is why it is important
that you continue to exist within
the framework of free enterprise,
not because you are free enter¬
your

see

servative

..

'

for the con¬
We know,/with
certainty that what
pseudo

ultimate" result

philosophy. / The
this

of

needs

course

it

so/obvious

is

elaboration.

no

We conservatives

on

the other

the

only opportunity
go forward.
Our beliefs are
founded on proven results—val¬
hand offer

to

ues

the

past.

have

which
the

on

never

Conservatism

belief

that

in

failed

based

is

only

to

the

extent the individual's whole per¬

sonality is developed to its ulti¬

society

ad¬

mate

potential

vance

in the best interests of all

can

the people. The reason I am op¬
timistic is because I know tbat
what
us

stand

we

never

for is sound. Let

weaken in this belief.

New

/They Had Help

Slay ton Office, 4

LOUIS, Mo.—-The opening
Chattanooga, Tenn. office of

ago saw to it that they need not trouble
moment about competition or the lack

time, he disclosed

the appointment of James H. Guffey as District Manager, and Su¬
pervisor of the new office which
is located at 727 James Building.

unions

or

among

higher wages for less and less work—to the serious dis¬
advantage of the consumer—had not Franklin Roosevelt
and his followers so successfully popularized false notions

Meany and Mr. Reuther, to accuse any one

Wollam

are

It is further

a

fact that the steps that these

self-ap¬

pointed spokesmen for the unemployed would have the
government at Washington take for the avowed purpose
of putting these men back to work could not fail in the
long run to create a situation worse than it is at present.
The fact is that we have in precisely this way built up a
state of affairs in the industry of this country which ap¬
pears
more

at one and the same time to stimulate demand for
of the same medicine and to render it quite certain
not

sorts of

good but ultimate harm will come from the

population, pour borrowed funds into all

strange programs, and finance it

all at low inter¬
credit

by the simple process of manipulating the
system. In that direction disaster lies.

est rates

we

now

with Midland Investors Company,
52

East Gay

Street.




pose,

(Special to The Financial Chronicle)

of

of manufacturing and mar¬

keting consumer (packaged goods)

With Powell, Johnson;

the

/

PASADENA,

Calif.—Edwin

call

we got a better understanding of this thing
unemployment and of its causes and remedies. The

beginning of wisdom would be a realization that industry
does not exist to give employment to anybody. It exists
to

give

a

profit to those who invest their funds and some

of their energy and initiative to create it. They expect
are
due that profit not because they employ men

and
and

N.

with

proceeds from the sale Powell, Johnson & Powell,
are
intended to be Security Building.

Inc*
>

.

The net
of

.

(Special to The Financial Chronicle)

connected

•

is

Petersen

now

stock

,nd
•

the

•

no*

tvmity

ihcrc

"

oa-ys;
...

r

ano

interest V°u. ^ trade.
\° ,t,0 toast oi >
inducing

jSiU *T"tt

of anything in

this situation.

,

«.

C.

issue

95,000 :
OAKLAND, Calif. — Hugo A.
shares of common stock of Popu¬
Carissimo and Frank W. Enos are
lar Scientific Products Corp. at
now with
Mason Brothers, . First
$2.50 per share as a speculation.
Western Building, members of the
1 Popular Scientific Products Pacific Coast Stock Exchange. Mr.
Corp. was incorporated in New Enos was formerly with Frank
York on Jan. 28, i959 for the pur¬ Knowlton & Co.
././ :
•
;*
an

ployed today can with justice lay some of the blame for
their plight at the doors of the politicians. But it hardly
lies in the mouths of these union leaders, such as Mr.

It is time

COLUMBUS, Ohio —Floyd G.
Barnett, William E. Harper, Lyle
D.
Irvine, Edgar J. Owen and
Emerson

York

about insuring prosperity by adding- to the "purchasing
power" of the wage earner. Nor could they still be at it so
effectively had not the present Administration fallen so
nearly in line with the teachings and the programs of the
New Deal and the Fair Deal. In that sense, the unem¬

With Midland Investors

f

Two With Mason Brother©

the wage earners. Neither could they
time again to force higher and

Time for Better Understanding

(Special to The Financial Chronicle)

Co., Inc., of New
publicly offering

have succeeded time land

elements in the
same

New

individually

an

themselves for a
of it among the

Douglas and Congressman Bowles (to mention but two of
the many now in Washington) would like nothing better
than to have the Administration, subsidize many other

At the
-

are

to bona fide residents of the State
of

of

'r.

President.

;

City,

sale

yLavll 3 Oliare min cube and other products.

R; G. Worth &
York

and

these labor leaders could not have been so

course

Slayton & Co., Inc., has been announced
by - Hilton H. Slayton,

a

OIUCIl 3l

lure

foil-wrapped pure chocolate vita-

-

union

therapy. It is, of course, well known that these labor
leaders with the blessings of such "liberals" as Senator

ST.
of

09 EA

Q|aaL

effective in creating conditions which have contributed so
materially to present-day unemployment had they not
had the support of the politicians in Washington who long

that
:

used for the promotion, manufac-

substantial part of

v.

'liberals, who : argue continually
for. greater government responsi¬
bility, have nothing to offer ex¬
cept more and more government.
This is the only road they can
take if they remain true to their

*

Qf»ioittifil» PrAflllflc

dcienimc rroaucis

greater and greater

Of

>>hope

believe in, is good. The

we

tractable and more reasonable in
there is no room at all for doubt

not find work is not of

we want to be. The nostrums now
prescribed for un¬
employment would do less than nothing to promote a
properly functioning industry.

profitable and would have been installed had the

vigor to the policies and the activities of such
leaders as Mr. Meany and Mr. Reuther,

cause.

unshakable

course, say

its

given you
cause for pessimism,
don't think
for one minute that I am pessi¬
mistic. In what. I>have been out¬
lining 1

of

mechanization in recent years owes a

have

I

at times

can

as

ket, basically through the medium
of supermarkets, chain drugstores,
etc.
■
/•
'/•■.. ;

can,

that the tremendous movement toward

;•-

If

who

products to be sold to a mass mar¬

one

wage earner been more
his wage demands, but

first, which offer him the great¬
est opportunity for material and
Intellectual growth
and,; conse¬
quently/ the /most freedom and
progress.
Government cannot do
"',

women

indication of an ideal state of affairs. There is
usually no unemployment at all in the backward coun¬
tries we are being asked daily to assist. Full employment4
is an unmitigated blessing only when all who wish to
work are engaged in the production of goods and services
actually desired by consumers in the amounts being pro¬
duced—and at the prices asked. A properly functioning'
industry would as a matter of course keep us all as busy

with great precision

been

prise, but because you are not
government.
'
As long as you are not govern¬
ment
you
still stand for those
values which place the individual

:-this.

and

men

itself any

just how much of the so-called automation and the like
that has been so widely adopted by industry would have

r

-

?

is

This

course,

trust laws. No

supply -the nation's electric power
needs.

not

are

of

mum

they would like to have carry the blame for
free from responsibility, to be sure, but
fault lies in the fact that they have been doing a

all

their

Obviously we cannot lose sight
of the material needs of people,
but until we rediscover

It

unemployment now exists or is likely to
the months immediately ahead. The officials and

whatever

others that

individual.

if

but because they produce goods or services that
people want at prices people: can and are willing to '
pay. Full employment or a state in which there is a mini¬

women

page

We See

As

fore, to swing the focus of atten¬
tion back to the individual as an

one

from first

45.

the

his right to /fe&d.ihis
when ordered
out on
no - matter
how
hard
pressed'he might be financially
and irrespective of his individual
of

prived
family
strike,

the

(1769)

The Commercial and Financial Chronicle

IE*1
oblig^°n

inna.

once-

^

ooofl00
°'

01 *"
..

.

Public

&v'ce_

..

u

^
^eVv

46

(1770)

The Commercial and Financial Chronicle

Warns

Interstate

Department
Stores
gain of only 4.5% and
Gimbel Bros, only 24.2%. On prof¬
its, the showing is even more en¬
lightening. Using the same base

"Blank Check" for TVA

on

showed

Guaranty Trust Co. sees dangerous precedent if Congress
should authorize public power agency to finance capital needs
via revenue bond issuance.
Contends TVA operates under
conditions that make a mockery of so-called "yardstick idea."
"blank
check"
precedent may be established if
Congress authorizes the Tennessee
Valley Authority to finance its
new
requirements
for
outside
capital by issuing revenue bonds
to
the public, according to the
Guaranty Trust Company of New
dangerous

A

iYork.

not

is

difficult

to

picture

Federal activity after another

one

ments

$1.2

to

ment

in

would

subordi¬

be

period
with

to

40

120

years

provision

whatever is
for repayment of or return
government's

additional

and

lated

curred,"

Guaranty

pointed

oc¬

out,

"the Federal budget and the pub¬
debt would become increas¬

lic

ingly meaningless

as

of

measures

TVA's

The

on

the

power

idea."

similar

to

has

aver¬

taxes, the bank said, and because
it pays to state and local govern¬

confidence.

ments "in lieu of taxes" substan¬

figures

tives."

the

If

for private producers, largely

tially less than
would pay.

pending

authorize

legislation

to

TVA

issue

"Altogether

to

•.

the

■

.

pending legis¬

up

to $750 million in bonds should
be enacted, Guaranty said, "TVA

lation would have little effect on
these special privileges," Guaranty
said. 'The 'yardstick' excuse for

would find itself in possession of

public

Congressional

a

and

blank

sell

check

would

power

unrealistic

still

The

as ever.

be

as

taxpayers

which would free it from most of

of other areas would still be
pay¬

the

ing more than their lair share of
taxes, because the consumers of
public power would still be pay¬
ing less than theirs."

controls

and

government

safeguards

the

customarily and

properly exercises

its agen¬

over

cies."
'

'

V'

J-': 'v

.'y

Continued jrom page

the

•

12

addition,

tremely

poor

that

quite

of

ones

bullish.

the

$23.6 billion

high

a

of siderable

annual basis in

on an

the third quarter of 1958 to
1955.

Here

levels

a

ment and trends of

ing tend to have
this has had

an

been

of

employ¬
hiring and fir¬
impact. While

eliminated.

Diverse Opportunities
What does

this

that

means

investing

shares should be
that

to

mean

us?

in

It

statement that the outlook
trade is good, or bad,

a

tual level of employment has re¬
mained very high and hence retail

bluntly,

volume has been well maintained.

What Is Retail Trade?

tend to

retail

cover a

multitude of vari¬
of

are

basic

impor¬

In the first

widely disparate types of
occur

all

in

opera¬

this field.

varieties

of

We

activities

from

the sales of automobiles to
the sale of aspirin, and all kinds
of stores from the huge
depart¬
stores

to

Nor

grocer.

the

have

equally well by a
example, whereas
1946

total

had
best
be
Nor do I think that this

has

tions that

in

stores

avoided.

broad that it masks the rather

ment

stores, while the variety and

apparel

other generalities,

tance to the investor.

have

the grocery chains have
proven,
on
the
whole, to
be
highly attractive investment situ¬
ations, as have the better depart¬
ment

place the term "Retail Trade" is
so

retail

any

which

ances

neighborhood
they all done
long shot. For
apparel

accounted

for

stores

8.7%

of

retail

year

a

may make an
impressive showing.

year

even

ago

more

changed.
undoubtedly

Other changes will
in the future

While it is obvious that the

ex¬

cellent gains of the first half will
not

be continued percentagewise

an

equally poor show¬
ing going from 2.68% of total re¬
sales

in

1942

to

about 1.5%
in 1957. On the other hand, food
stores have held relatively

rising

stable,
Deparhfalling badly

year.

ment

nicely last
stores, after

from

the

the

end

of

until

war

1955, have held steady since then,
and

in

gained

the
a

Actually,
gain is
up on

past

year

probably

bit of the total retail pie.
on a per

even

store

basis, the

greater than

the over-all basis

as




shows
a

g re a t

knowledge, wisdom, and self-sac¬
rifice

be

must

demanded,

of

a

they will jus¬
privileges and rise to
the challenge.
.l'"
tify

their

.

Today democracy is being put to
the

test—perhaps' the

decisive

test.

anism in

An

old

final

and

authoritari¬

showing can
Again, I

expected.

stores,

rriqily toyder

:?

now such stores as the
hard¬
line automotive
supply stores may
be coming into their own.

Even within the favored or for¬
tunate groups there are
widely di¬
verse

showings.

understand.

dependent

This

is

easy

to

Retailing is above all

upon the

quality of the

defend

our

only

and riot

Western
our own

useful

explore
sions.

No

more

and

be. done in

can

a-partial

essay

statement.

It. is

important to list alh
it

as

is

CHICAGO, 111.

—

Corporation,

take

stock

con¬

ties

of

our -

Manager

I

believe

to

a

Our

Street

with

Most

head¬

be

raise

this

Illusion

standard

about

the

invested

ard

one-

progress,

like

to

state

—automatically,

as

potentially
illusion./ :

most

organization.
In

his

new

position,

;

Mr.

Brown

The

the nature of

will

least

one

fied

in

tion

proper

of

shares

from

Broad

standard

Street
of

Robert

Group

H.

Brown

Mutual

the

of

life.

ture.

Broad

It

;
is

'

•'

-

•

Immediately> prior' to
Street

>

-

<

joining

;

Sales' Corporation,

Mr.

level

same

in

the

same

and

of

area,

purchasing

all

consumers.

Oppenheim

lyn)

have

doors

—

Straus,

available
Collins

whereas,

to

their

Abraham

&

and

Mays have
showings.
Let me
merely demonstrate this
on a larger scale.
Using the aver¬

made

excellent

age sales of

1947-1949

a

base of

1957

Feder¬

as

100,

we

ated

Department Stores sales

88.7%

see

above

that

the

in

salesman with

George B.
Co., Inc., of Norfolk, Va.

the

(Brook¬

closed

retail

Powell &

To Form

Loesers, Namms,

since

Martins

power

a

were

base—whereas,

;

Schiff, Teller

Schiff, Teller &

bers of

Brown,

the Nerw York

mem¬

Stock

Ex¬

proper

with

this
their

ordgr

to

for a
decide vol¬

or at
quali¬
respects. The

to. be

freedom

is

be

that

drawn

and decency, whereas it
is easy for
totalitarian rulers to
demand sacrifices of their
people
since the rulers themselves
do not
share in these sacrifices.
This is

a/high

also^

provided
insure

taken,

productivity• is utilized.
Of course; without such produc¬
tivity no nation can today be
powerful, for power depends upon
ability to produce large amounts
of complicated military hardware.
But
there
the" relationship
be¬
tween
productivity
and
power
ends. When industrial production
is largely devoted
to consumer
goods and services," even a very
productive country may find itself
outpaced
militarily * by another
over-all

rulers

untarily that they will forego some
of the fruits of their
own produc¬
tivity in order to safeguard the
right of future citizens to live in

only
in

political and military supremacy.
depends on how the nation's

whose

totalitarian

involvement

'•» democratic people

in

guarantees an
pleasant and agree¬
is

of

country comes without conscious
effort. Then again, it
requires selfsacrifice :of a-high

living
may

of

group
sense

non-sequitur,

action

personal advantage
strength, enlightened

self-interest must choose the lat¬
ter. On the other hand, for a
small

were—as

draw

between

and national

industrial

the

of living for themselves. Ex¬
periods of national emer¬

cept in

flict

I

dangerous

needs to

premise

exceedingly
able

a

that

we

important
conclusion

the

it

r';.

inference

have charge of
the distribu¬
of

our

a

public sector/ of
how much retained
high material stand¬

ft is hard lor all the .people
that their personal fate is
inextricably involved with that of
their country and that in
any con¬

emphatically

dent

the

gency,
to feel

that this years Gross Na¬
tional Product exceeds last year's
mind that this- year's dol¬

depreciated in value!

in

to support

show

and Wisconsin. '

by

: In
democracies the people,"de7
cide—through their Vo.tihg power

the economy;

regard the belief that our
high standard of living guarantees
political and military supremacy

that

an

—how' .much of the national
prod¬
uct shall be collected in
faxes and

'

year

question..

every

Martin, Presi¬
of

Such

misconceptions

Dangerous

raise

should

by

We must

one.

former,

that I

Fox-

free

this -belief.

be as productive in items
that enhance the
people's comfort
and. well-being., It is the

power, or international position of
the United States if* we can but

lars have

an¬

off

never

is; widely believed;, that. .we * Jhave

La

Street, it

better

are

or

as a

revise

now

after year appears.to have become
our nation's
highest .objective. It

might
Dis¬

people into be¬

they

others,

productive

as-

iHusions

about our, high standard of living.!

answered

Robert H;

that

AVe used to think thai
a,totali¬
tarian economy could never be as

and

hot

delude

can

•

rapidly changing world.
I shall limit myself to a discussion
of illusions that arise from what

231

nounced

pos¬

for small personal gain.

—never

Milton

personal

a

obediently

a

a

at

been

as

„

quarters
Salle

this group; to look, upon

country

recognize, the need to economy can be more productive
in items that enhance
political and
periodically and. if
military; power; it will- jprohably
to
readjust
beliefs,

to

course, some more than others.
This is not true of the retail

influenced

their

that sacrifice is
necessary to defend the fatherland
against imminent attack. Thus de¬
luded they will work

It all

obviously

life-long job of ruling over their
voiceless compatriots. It is natur
ral for

than

should like to
beliefs that— in my

some

Indiana, Minnesota, South Dakota

all

by the small group who
have arrogated to themselves the

lieving

opinion—have become costly illu¬

management.
When
the
steel
business is good, all of the steel
companies benefit, although, of

pic¬
give you a little local
example—10 years ago in an area

is made

ganda

a

I

purpose,

To

Brown has been appointed
trict
Manager of Broad

has

gives

war

totalitarian countries
since they need not persuade their
people to forego comfort for pre-*
paredness. The decision to do so

to keep the civilian1 standard of
living at a low level; for propa¬

life

of

way

freedom but

In the hope that it. will serve

expressed

For Broad St. Sales

South

y^yVyyy.'i

to

tance" Ordinarily, modern meth¬
ods of* propaganda are- sufficient

that of all free peoplesin the world.

Funds through investment dealers
in Northern Illinois, Northern

To

edge

a

rifices.
In
the
contest :between
totalitarianism and democracy, we

chains.

Sales

armaments.

The nature of modern
an

enor¬

complexity

democratic pbpple can gov-- as it contributes to this strength
will the desire of their
ern
wisely, act
promptly,, and
people for
voluntarily accept, necessary sac¬ goods and services take on impor¬

that

hard-line chains,
interest

grocery

the

clothing nqw claims session to be carefully developed
that it aloqc can .handle the, prob¬ so as to enhance :its value, Given
lems
of
this
technological and their1 avowed aim of -world con-*
scientific age. The. uncomm itted, quest, the development of
military
world watches the cbntest. Upon and political strength will neces"
sarily take precedence over all
us,: as the strongest
democracy,
other developments.
rests the responsibility'"of
proving,
Only insofar

habits, and attitudes to the reali¬

be

of

productivity

is

a

lor

another

of saying that

way

democracy the

state

exists

the

people, whereas in a to¬
talitarian country the
people exist
-for the, state.
This, fundamental
.

difference
all

must

be

factored into

our

attempts to compare' the
technological
and
productivity
-

levels

of

democratic".and

tarian societies.
J

-

!J

Cites

>

* ./

A

'

y

,

totali¬
*

•

^

^

Technological

Paradox

J
«

,What counts then is not
produc¬
tivity per se but how n nation's

productivity is
it may seem
of *

state

used.-

Strange

as

to us, at the present

technological

smaller

develop¬

but concentrated in "he ment, our high civilian
Standard
military sector.
It is now no of living may prove an actual lia¬
longer possible to quickly convert bility in the contest with the to¬
Street, New York City. Partners
manpower and
industrial plants talitarian powers.
And for the
will be Irving
Schiff, Jack P. Tel¬ from civilian to military produc¬ following reasons:
ler, and Lester D. Brown, mem¬ tion when war threatens or has
First, by combining a high tech¬
already broken out. Not only will nological
ber
level
of
in
the
the
scien¬
Exchange,

change, will be formed
23rd

with

offices

at

as

of April

25

Broad

-

general

partners,

and

Herbert

limited partner.

a

in

new

necessary,

occur

and

mously increased

self-imposed

wheri

emergency,

tentative

Brown
was
a
trade, by 1956 they
partner
of
dropped down to 6.1% and of a few blocks on Fulton Street Brown, Bechard & Co., a Norfolk,
slumped further in 1957, although in Brooklyn, there were six major Va., securities firm
specializing in
they may have picked up frac¬ department and specialty stores. the retail distribution of mutual
tionally in 1958. Variety stores They were all well established, funds. Previously, Mr. Brown was

tail

real

revolution

a

military technology that has

are

subject

above

had

have made

who

and when March is taken into the

retail

discriminate, and

during both the past two reces¬
sions, and even currently, the ac¬

about

by

picture,

7%

some

Brown District

of

generalities

last

marginal

does not pertain equally to all the
divisions.
Or
to
put
it more

The

millions'

short speech than to probe around
the circumference of: : this
large

ran

Companies, and

that despite rising unemployment

trade, like

ex¬

cyclical effect is
Department store

with continued

low

of

effect, the fact

some

the

sales thus far this
year are
9%
ahead of last year while total re¬
tail trade for the first two months

department

number

have

stores

$16.8 billion in the third quarter
of

current

with

in the
from

power

new

would suggest that representation
be limited to the better situated

Analytical Review oi

fluctuated

of

suppressed

This is

purpose.

of

consequence

,

Purchasing

In

show

"specially for the

by

during the final and all important

'

The Retail Tiade
have

of

process

reached

compared

generally

An

now

months of the year, nonetheless at
this point, a good

yv

•

in

proving outlook for business has
thoroughly
restored
consumer

<

•'

ranging

number of hours worked and im¬

Federal

private company

a

< - <

you

high
levels, notwithstanding the level
of
unemployment, while the rising

people's credit would be pledged
and
the
people's money
spent
with less and less supervision by
the people's elected representa¬

•

be

already

age

from

variances

the retail field.

the true scope and financial posi¬
tion of the government, and the

because of freedom

Even

accepted

democratic people,

In summing
up,
one
can
say
that 1959 looks quite favorable for
the majority of the divisions in

TVA's

less than half the

are

allegiance
still

was

being corrected.

originally sup¬

'yardstrick'

rates

is

minorities—even now democracy's
friends are not certain that in
any

appears

posed to be, Guaranty said, noting
that "it has always operated under
conditions that make a mockery of
the

earning 31.6% less and
less.

gain of only 35.9% for the A. &
P., although this latter situation

legislation would
accomplish little toward making
TVA the1 "yardstick" for power
was

democracy

many countries and has the secret

a

accumu¬

pending

that it

edge of how to govern.
that

Stores 10.8%

from gains of 200.9%
for Food
Fair and 214.7% for Penn Fruit to

billion dol¬
facilities

a

was

have

past years.

over

rates
this

nearly half

in

made

invest¬

derived from net income

executive

lars

Illusions Cost Too Much

1957

sales, First National Stores
up only 54%.
Earningwise,

compared

as

in

Thursday, April 16, 1959

.

18

The
grocery
chain picture is
equally dissimilar although here
they all show sizable gains. None¬
theless, whereas Food Fair was
321% above the base period in

under present law.

years

ment of

"The Guaranty Survey."
"To the
extent that

Stores

Allied

nated to payments to bondholders.
TVA could extend the repayment

being allowed to escape from Con¬
gressional and budgetary controls

achieving the financial and
autonomy for which
bureaucracy always strives," the
bank said in the April issue of its
business
and
economic
review,

pay¬

government on its
appropriation invest¬

TVA

Federated

earning 84.5% more than in
the
base
period and Associated
Dry
Goods
34.7%
more,
City

the

billion

that

see

was

Moreover, the bank noted,

No

"It

we

Continued jrom page

a

.

.

A.

Dann,

there not be time enough to do tific and
military sector with an
this, but today's armaments must almost preindustrial standard
of
be produced
in plants designed living for the mass of their
people

Volume

189

Number 5838

modern

totalitarian

.

The Commercial and Financial Chronicle

.

.

countries

in

very
real problem and dealing
with it effectively. A return to
public mass transportation would
nation, indeed lower the standard of liv-

wartime get the best of both types
of civilization—the tecluiical ad-

vantages of an industrial
with regard to ability to wage
war, and the hardihood^and resilience
of a
preindustrial society

ing

if need
_

break

this lowering of

greater

that might
people

to modern

accustomed

amenities.

simple and frugal life, give

a

a

at

To illustrate, let me rebook on Soviet Strategy

war

to

economy

meet

emer-

aDoear

in

ruclear Aae
the Nuclear Age

the problem in their usual ruthless but efficient way. We cannot
ronv
copy them
them. wP must dovisp m,r
We must devise our

L.

Garthoff.

own

fer

to

a

bv Raymond
by Raymond
reports that, albut a few months

He

though Russia in
during 1941 lost control; of 40%
of her population;
60%; of her
coal, iron, steel and aluminum
production: 40% of
tion; 95% of key military industries: 4 million soldiers and nearly

begun

solutions. The

urgency of our

problem

is highlighted
by the
totalitarian solution of the problem for it gives them presently
an advantage.
Russia's industrial

using

resources

up

nations.

capital.
jrew 0f

the

us

are

nature>

this

we

standard of life conserves their
world finite in size and limited in resources capital.'
refources. And so we delude ourOur high standard of living
makes such heavy inroads into our

giujon

world

markete

™aie§lu:s on worm marKets tenals that, because of it, we
an^^nrofp^to
In^tbpm'nrniS xeria^®
Dfcaus® or ll»
rpp

exhaustion

res0urces

fable

Temporary

is

surpluses

tho

centralization

vulnerability of this
and are trying to

^Per^E "Each Rusrfan complek
the help

of

to be self-sustaining,
the

she

With .workers living close to

us.
It is merely. togiants,' and
farms further out
point out that Russia was able to This elminates, or at least reduces,
bear
destruction
comparable to the cost of transporting the workthat of a nuclear war and rally ers, to', and from their
places of
again. We must not underestimate work. If need be, they can cover
the military advantage that totali- 'the distance on foot.
tarian countries possess because
;
even
more
decentralized

received from

thev
they

combine
commne

advanced levels
ahvanced.levels

of
ot

more

7-

-

foe

.system of industechnology * in the public sector trial^farm-residential communifrugality in the private sec-' ties is

with

tor of their economy.
It is true that

7777.

people used to

an

iargest store of capital will be

ex-

affluent life have individual poson which
they can draw

sessions
when

war cuts

off

reduces the

or

supply of civilian goods. But they
havQ ,also.tbecorne so used to com-

to

go

along this line. China's 650 miliion people are being organized
into "people's communes" in
whieh

vajjs

absolue

and

Communism

everyone

pre-

works at

or

his

farm task—

_

would .seem prudent to play it
; and
count the low civilian vwhiclranv human society has ever
of living in totalitarian
to the

safe.

standard

which,
some

plus factor for them
must counterbalance in

as a

we

;

way.

SIclX0

IS

ODVIOUS-

to

will

HiciCIl

be

UI

little in

need

small

tllCb

the

way

enough
of me¬

transportation, but large
enough to be agriculturally and
A second reason why our high industrially self-sustaining,
standard of living may prove alia-,,
So much effort and sa iarge a
bihty is that the intricate system,,
rt
f
country's natural reof interiockmg economic retoron^urces must
into
modern
ships that maintains our affluent +rancr,nrfntinn
thaf

the
^

easilv be disrunted bv

breaking of

muftrat!

but

few

a

links

thiJ^point

take the
item in the

family

car, a key
American standard of living.
o

.

Be-

,

transportation systems tnat tne

mass.

transporta-

tbei^

bousing of wo.rkeFs cl(^e
an

readily see that their communities
are

less

the

vulnerable

American

surroUnded by

developed.

Obviously,
transportation by private car costs
a

great deal more in oil and serv¬
than mass transportation, es¬

adeqguategalmoyst
are

ice

pecially

transportation

which utilizes fuel far

by
more

rail
eco¬

nomically than automotive trans¬
portation. If the oil supply were
shut off or limited by the enemy
„

in

wartime,

some

its

in

wartime

metropolis
sub-

bedroom

American

com-

blcoZ^n"the moment they

built.

Resource Consumption Faster
Than Growth

of today s technological civiliza-

without adequate means to trans-

tion. Ours is the first civilization
in this history of mankind which

find

port workers from home to plant
or

rests upon utilization of resources

office.
Americans

Most

now

live

in

pnrih

anH

tbprp_

havp

machine-made troods

Sacl

mac™ne made goods.
Draws

less invented a modern American
A The. Curves that Never

^iry

I

astonished

am^constantly

that

DvlicmcfiA^

rncAlirnne

will

then




exercises

control

now

own

Continued

materials position has

raw

of many
-

^an<^s* ^ fantastic increase In
*evels °f living in the United
States has been at the expense not
onlV of our own resources, but of
on

page

48

be

sent

back

to

earth.

the suggestion that we can
feed an infinite number of human

beings on seaweed—which per¬
sonally I find a most distasteful

prolpect-this
ProsPeci

"solution"

to

re-

ie
exhaustion disregards
man's biological needs and limitasources

alone,

THE

or excuse me, on

They used nonre-

PULLING
POWER
Or

seaweed alone.

He needs enough
around him to retain a sense
of individuality and freedom; he

space

needs contact with

will deteriorate

as

if these necessities

should

Even
man

is to

are

we

that

TEXAS

that

be reduced to but two

to

supply

the

army

space

renewable

raw

materials and

IS

SEE P
DEVELOPED

HAVF

un-

INTO A BOOMING

DIVERSIFIED

■

of

suits would make
Such tremendous inroads into our
resources capital that the whole
thing strikes me as a highly fanproper

EAST

denied him.
decide

functions, tending his machines
and consuming their products, the
solution" overlooks the
"space
fact

.

CENTRAL

nature, and he
a human being

nature's store of these treasures, fully comprehend that the rate at
Seventeenth century England, for which this capital is used up is an
example, consumed but 360 tons exponent of population growth

by those interested in the
prevent our facing this

the rights of — people
— - the

empire- over

Like

Certain national attitudes,

status quo,

the

««

which she

morteaee

sake of the

r\rjnlri'nnr

Ktr

newable resources either not at derstand that these resources are
all or in such minute quantities like uninvested capital — capital
that hardly a dent was made in which draws no interest. We must

abetted

we

?»**>*

the resourcescapitalof the

rest °* the world. Robert C, COok
in the symposium Perspectives.on
Conservation remarks: "we dppear to have grievously impaired

by packing
10,000 people a day off into space,
there to dig for minerals which

transportation becomes
a
vital necessity it must be provided, if need be at public ex-

pense.

me

seraously proposed that the United

muscle power.

conclusion

we

fossil fuel

to

not

the

when

or

.what extremes intelligent people
wiU g0 to avoid facing the limitations of mankind. I have seen it

vast, empty world. Previous civi- we eschew science fiction and aclizations were based on consump- cept the fact that we live on a
tion
of renewable resources— finite earth; unless we are fully
crops,
trees, wind, water, and aware of our dependence on non-

mass

that

mineral

curve,
descending even
rapidly. We believe that in
science we possess a genie in the
bottle who will keep these two
curves from ever crossing!

dependence on private transportation
by
automobile
could
prove a liability.
So far we have
drawn

fact

a

sources

this

when

winnowed

more

trouble believing, for in all his require about 100 pounds of fuel
past experience man was a puny per pound of pay load!
Lilliputian whose impact on naWe cannot realistically appraise
ture was insignificant and who our position relative to that of
felt lost in what seemed to him a our totalitarian opponents unless

be borne but in wartime

nhiacp-

One
is
our
population
possess all the fuels and minerals
curve mcUnting upward in geometric
progression — presently needed for their industries. Our

solution; it merely aggravates the morning and evening
rush.
Transportation by private
car becomes increasingly costly in
time and money.
In peacetime
can

the

Realists that we imagine ourselve.s to b<~> we bave neverthe- pleasures of today
Russia
and
the

•

our

to

SS? resources

Suecter

spreading across the countryside, dations^nddoes this faster the provide to make sure these latterWhen population density reaches mofe
^
day. bllgnmp T1} saf!ly la?d °n
a given point, there is simply not
rnaterial standard of living of all their space tarkets and be able to
enough room within the modern
s PeoP
return to earth, should they wish
megalopolis to accommodate both ; Everything nonliving is finite to do so, but we can get an inkman
and, his private car.
Flight' unless it is recreated by the power ling when we remember that
from urban centers into the sub- of the sun's rays. This we have merely to get them into orbit will
no

metals

-M5US!Ufc!lSl
exceed the total used throughout
^worldin all the centuries pre«dtog.» own resourceswe consu^
Not only are capital, we
inS our

up te^hefact thatvvh^weiise

Malthusian

a

fiful venture. I don't believe we
kn0^ as *et '?ust what we, "?ust

huge metropolitan belts which are

urbs is

nerfect rieht

+h* frbrnimio

im

The third reason why our high space-borne emigrants with
standard of living may become a enough food, oxygen, water, and
liability is inherent in the nature fuel and to clothe them in the

themselves

munities; would

of

on

ai?ip anrPhaurbst with the worker linked to
adequately

a

&P? °Aw0S..?iY?? Ru^5 ^ «ons. He does not, after all, live
China
advantage.
One can
bread

fau7e..7.than
car'

have

fore collected them faster than we After us the deluge. But let us Pf
were able to lransform them into not delude ourselves. Let us face int?
IS designed

resources

communes

chanical

can

ollf

the

2 Z SSL
States at one stroke solve its
sunk- is obviousadvantage to the Problem of Population growth and
But ae
state
Each of these
exhaustion

Excessively High Interdependence

society

we

Si^il^lS

"

maintaining morale and, efficiency :even
family kitchens are being
if wartime shortages lower : their
replaced by communal mess halls,
s
living standards too' drastically. It TMs^anthiU ^te^miSrsurSv
TA
-

countries

2,1

"tha" w^VaT'beenTer^

being

fort.Ihat^ they may have^trouble aSgigned industrial
,

Of

established in doubling in 40
years, tripling in
are planning
65, quadrupling in 80 years; the
much further than Russia other is our nonrenewable re¬
npw

whose rulers

China

and

of which the quantity used in the
United States since the outbreak

aecentranzea, Cross.

contained

.

fuels
i

from 5,000 pounds of ores. According to the Paley Report, "there is

t

are

even

S^^fM^are5^

l!nt

rapidly growing population.
mid-century we consumed an¬
nually 18 tons per person in ma¬
terials; including 14,000 pounds of
our

At

1 diminfshe^naSonal
bblrhancp thu<f^arW th^m fn
Americans

a

SSStff^S.'.'SSiSS.

not
not beaten but <ur~
beaten
sur-

importance

ma~
b®~

of resources to sustain a continu¬

ously rising standard of living for

scarcely

.

theMtack

i.the

Living Off the World
From an exporter Of copper,
lead, zinc, petroleum* iron, oil, and
lumber we have become an im-

ZstVcomm^aXXtoa

^aln'produc;

!raftth,hfw°as
craft, she was

been worsening 'in the last few
decades,

porter of these materials. Though
two world wars have made great
inroads, the main reason for this
change from exporter to importer
lies with nations whose austere has been our lavish consumption

revolu-

squirm to avoid admitting that

that

4\

Eificantly, the nation that uses its
capital faster than its opponent
man's depend- wiU *n ^me be in a less favorable
We
twist and Position; the long-run advantage

of

tionary change in
on

For when national rates
of capital consumption differ sig-

wjUing to accept

consequences

ence

study the

we

^Wect^^portetion;ln the
light, o|.. the
population^ shift to
Sun?rief
to havf solved

civilian

great

country

strength.

strength

the

on

that of have

efficiency. Yet
single prestige

It is advisable that

Self-sufficient communities, used
to

a

on

of steel annually! It is only in and the increase in living standthis latest second of man's hour ards. Under these circumstances,
on earth that a small percentage the rate of capital consumption is
of the world's people have ceased obviously an important factor in
living entirely off income and the relative position of competing

gencies.

morecivilized

a

more

factor would give the

be, and to sur-

vive- under hardships

but

real comfort and

with regard to ability of the civilians to fall back upon their own
resources

somewhat

side of prestige than

(1771)

ECONOMY

1

AGRICULTURE

Producing quality beef and dairy cattle,
fruit, vegetables, .poultry
products.
LUMBER

Fine furniture, saw

mills,

flooring

mills, boxes, basket
mills, pressed wood.

MANUFACTURING

From cotton:textile

furniture,

goods, upholstered
garments. Toy factories.
OIL AND GAS

A

big part of new economy .. explo¬
ration, drilling, processing, production.

MgDICAL CENTERS

Modern, complete medical, health and
resort centers grace Central-East Texas.

and
quarterly reports giving
Copies of the annual

further information on the

Company's operation and
the territory served are
available on request.

PROCESSING

Packing and canning, poultry, milk, meat
and vegetable processing centers.
WAREHOUSING-DISTRIBUTION

Planned facilities offer better distribu¬

tion, better warehousing. Good roads.

SOmWHSTBUI
BKIUC
mm
COMPANY
President
Bldg., Dallas, Texas

John T. Shewmake,
Executive Offices: Mercantile Bank

48

The Commercial and Financial Chronicle

(1772)

world as
The gargantuan scale of this

well.

the rest of the

world's resources was
set forth by the Twentieth Cen¬
tury Fund in 1955." According to
the Fund, with but 6%
of the
world's population, the United
States consumes today as much of

sources,
modern

Our

drain of the

materials as all others

raw

many

combined.

This

capita

deplete

we

that

means

per

irreplaceable

natural resorces eight times faster

rest of the world.

than the

Of course, we pay

this

but

sources

for these

re¬

small

be

may

consolation for the more thought¬

a

and

market,

mass

technology.
wealth

in

is

resources

a

fortuitous circumstance for which

present-day
little

Americans

credit.

No

other

take
emigrants
can

from

Europe, setting forth across
the seas, found so large and rich
and
virtually empty a land as
those coming to the United States;
nor one so favorably situated geo¬
graphically and climatically. In
taking the country from the In¬
dians

concluded

we

the most ad¬

vantageous real estate deal in the

history of mankind.

ful citizens of backward countries

Our

mass

market comes through

who watch this drain on their na-

population

tinal resources. It cannot be halted

torical accident that 17th and 18th

it brings is
needed to keep the wolf from the
door. But logic and reason have

century

the

and

growth

his¬

the

relations between Eng¬
land, France, and Spain were such
as to
preclude the carving up of
little impact on strong emotions. this continent in the manner that
The native reaction is apt to be Africa was carved up in the 19th
that here go the resources that century. When we won independ¬
because

money

the future have sup¬
ported a higher technological civi¬
lization in their own country; they

this was already a huge
country. The ease with which we
expanded across the continent was

go to enrich still more what is
already the richest country on

countries

in

might

world where the

earth.

In

a

jority

of

the

nourished

are under¬
ill-housed, where

them

most

of

sions

than

ma¬

people

and

fewer posses¬

own

European

are

than

Illusions Cost Too Much
those of

innoculations

and

47

Continued from page

the average American

ence,

a

result

of

the

colonies

awards
I

when

am

most

war

closed

down

many

Detects

Smugness

and

One

might

has

that

say

very

our

in realizing man's age-old
to escape poverty and

success

ambition

industrial

at

grown

our

It

own.

whether

a

Our
search

productivity
than

rate faster

remains

Western

be

contributions

and

basic

to

invention

have

concentrated

have

we

efforts

cur

re¬

been

on

ap¬

plying modern technology to the
production of more and better
goods. We have done this so suc¬
cessfully that poverty has ceased

to

pro¬

catch up with
bac-kbreaking toil works to our ours once the European coal, iron,
disadvantage because it arouses atom, and common market com¬
envy. This is true but it is not the
munity is fully established.
whole picture. Our material wealth
Is also resented because

carried it to

to have

we

seem

excess.

But

of

most

all, perhaps, because we
have been using our high material
standard to support a claim that

ductivity will

Not

a

and turn to other unsolved prob¬
lems.
There are many of these.

seen

European

Favors

Unique Achievement

Government

Cultural

not

Modern

service

to

the ma¬
to buy its
the strange

tion

products.

able

We

have

A good

using

case

Fostered

Education ;

cculd be made for

surplus productive ca¬
leisure to develop a
mass culture on a level as high as
any previously attained by privi¬
leged minorities. It seems doubt¬
our

pacity

and

of

much space and vast resources.

talents

munication

the

in
to

of

art

creating

the voice of prudence so

stilling

that

with

which

we

use

capital

sources

up

our

re¬

throw

and

Thus have

genius.

last

carried the

we

noble aim of' plenty for everyone
to such excess that men become
the servants of their machines.
Meanwhile

two

vitally

are neglected; tasks that,
opinion are far more im¬
portant than producing new gad¬
gets,
new
models
of
existing
gadgets, better - packaged goods,

and

and still

more

more

These tasks

are

material

conserva¬

tion of the material foundation of

civilization

our

and

that

their

due superior
In

just desert
human beings.

this

take

counter

to

circum¬

the

but

personal lives

our

would

favored

own

ware

development

few of

attitude.

everything

It

stands for. The ancestors of
all

Americans

they

It

is

that poverty
inferiority, nor

sign' of

no

wealth

nearly

here because

certain

were

was

came

of

one

human

excellence.

strange that in judging

tions

we

us

runs

America

tend

now

to

feel

na¬

that

superiority is proved by owner¬
ship of more cars, telephones, or
TV sets than

We

are

found elsewhere.

lip service to American
ideals, but what has us virtually
pay

mesmerized

is

of

material

all

the

possess.

the sheer quantity

objects we
It is difficult for us not

to be smug about this and to
urge
the poor countries of the world to
do as we do so that they too will

become
we

as

rich

and

advanced

as

are!

Not

causes

when
of

one

our

seeks

affluence

Luck

one

the

is

bombs

developed here, it is
largely by European-

were

but

living—ample natural




re¬

Condemns Planned

do

the

able

locomotives, refrigerator ears, and

into

the

automobile

—

all

came

from

carne

from

there—more

vaccines

Obsolescence

Our machines keep grinding up
the nation's capital of irreplace¬

portation. Steam and diesel-driven

by our alleged superi¬ Europe. Among means of com¬
ority than by our extraordinary- munication,
wireles, radar, and
good fortune. Three factors are sonar were invented abroad. Most
mainly responsible for our stand¬ of our great medical discoveries
of

to

measure

which

that

well

so

often

are

we

now

that

cut

joice

to

we

new

prematurely.

What

statistics do not show is

forests

these

that

our

still declining qualita¬

are

tively—half
dore

prove

forests

our

actually have a
growth over what
annually. Let us not re¬

surplus of
we

cited

manage

century after Theo¬

a

Roosevelt

Clifford

and

chot launched the Great

Pin-

Campaign

to

Save ; Our -Forests.
The real
test of scientific forest manage¬
ment is the softwood saw timber
account.
red.

This remains well in the

Moreover, it is still true that

what we harvest is predominantly
high quality saw timber, cut from
our .few; tdma'ihing; virgin
standi,
while, much of what we grow is
the scrubby stuff that reseeds it¬

cutover land and has little

on

commercial value.
Nor
very

do

statistics

least., partly-

than

show

the

suffered

by
fires, insects and the like—

forest
at

the

large.; losses

-

-

result

a

forest

perfect

less

of

management.

True,

some- forests are well man¬
aged today but many are in poor
condition. We have a long way to

human

our

involves

less

The first

resources.

-'Statistics which leave out the

go.

wasteful

element

utilization

create the wealthiest society in
history, we shall have no trouble
solving these two other tasks as
well. Quite different human qual¬

since.

ities

must

are

needed

and

must be

en¬

couraged.

It is

today as it
teenth century.
All

misled.

statistics
for

Ideas

Over

Application of Ideas

Today

we

still

cause

overvalue

we

and their

long and arduous course
of higher studies are able to help

of

and

caution

Outgo

timber

on

day than 50

tricky

are

with

used

in the thir¬

was

statistics

be

be

we

Rewards

beautiful and valu¬

as

able

and

lest

input

better to¬

are

partly be¬
use
only half as
capita as we did

years ago

now

wood per
This

reduction

is

a

result

shift from wood to fossil fuels

a

and

synthetics,

newable

to

materials.

trend

is

that

from

nonrenewable

It

re¬
raw

is part of a general

that

is

symptomatic
of
technological
societies.
Similarly we have shifted from
natural to synthetic rubber; from
modern

silk

"miracle" fab¬

cotton to

and

rics.

These shifts to nonrenewable

materials

contribute

exhaustion of these

to

the

rapid

resources

and

—

ctnick less

ard

slaves

to

everything by size rather than by
quality, it is easy to convince us
by quoting statistics. A good case
in
point are forestry
statistics

must be regretted from a longugly, horrible, uninteresting work,
us find
substitutes for exhausted range point of view, much as they
What would you consider the culture and contemplation become
Modern technology resources. We support those who may add to present comfort and
single
most
important
modern impossible."
technical development? It is utili¬ supplies each of us with hundreds flood the market with unsalable pleasure.
Our tendency to disregard qual¬
zation
of
electric
power.
Our —even thousands—of mechanical goods and neglect the institutions
present way of life would grind to slaves to whom we are shifting which train future scientists and ity when we make comparisons
more and more of the world's dir¬
a halt if
engineers who may discover how has helped to perpetuate another
electricity ceased to flow.
We
have no
the illusion that only
other energy
debilitating,
and
routinely to prevent future shortages of illusion
that ty,
could take over all the functions boring work.
This gives us the goods.
The manipulator of our this country educates all its chil¬
performed today by electricity. means.and the time for a vast intricate machines is usually bet¬ dren beyond grade schools. Until
of
our
nonmaterial ter paid than the inventor who recently, the deterioration of the
Europeans developed it. What are upgrading
of
the other principal forms of ener¬ standard
living.
Instead we built the machines. It is significant quality of American public edu¬
that we were one of the last great cation has been hidden by statis¬
gy we use?—steam, internal com¬ keep on collecting — squirrel-like
—more and more
bustion, atomic energy. The first
goods. And so nations to join the International tics showing huge numbers of
two were invented and developed we miss the marvelous opportuni¬
Copyright Union because for a youngsters in their late teens still
by Europeans; in nucleonics they ties modern technology could give long time we saw nothing wrong going to school and more of them
did
nearly
all
the
theoretical us, perhaps because of ancient in a practical businessman mak¬ obtaining diplomas and degrees
work. What are our most impor¬ fears rooted in centuries of human ing a profit by pirating the intel¬ every year. Had we given thought
tant modern weapons? The list is want and insecurity.
It is as if lectual output of others. We have to the quality of the schooling
long but let me remind you that we were the Sorcerer's Apprentice always favored those who know they received and to the kind of
how
who forgot the word which would
to
make
the tank, the jet fighter, and the
money
by using scholastic performance repre¬
ideas and material over those who sented
guided missile originated in Eu¬ stop the magic broom.
by
these diplomas and
think up the ideas or create new
rope:
the atomic and hydrogen
degrees, we should long since

educated scientists. Or take trans¬

for

are

age.

true,

Superior—Just Good

Yet

Unless there

tend

we

of quality prevent our
recognizing how far we still lag
forestry
standards
that
of raw materials and the invention behind
have long prevailed in Europe.
of substitutes for vanishing
re¬
There is a forest in Leiria, Por¬
sources; the second better educa¬
that
was
tion for our children.
planted seven
We must tugal,
not delude ourselves into believing hundred years ago and has been
cut, and carefully replanted ever
that
because we wgre
able to
of

technology is thought
ful that this can be accomplished
by
many
Americans
to
be
a
unique American achievement. on a commercial basis alone, even
This illustion is nourished by our if private help is added. We may
mass
media, advertising having have to follow the example of

tant human talent in this scientific

1

Synthetics

and

Data

producers of material goods and
intelligent,
undervalue the preservers of
better educated, and
all-around made of bragging a fine art. To other Western democracies where the materials base of mod¬
more
competent than other peo¬ look at the
splendid color layouts public support of cultural activi¬ em technology and the devel¬
ple. As a nation we thus take an and the
jubilant reports of new ties, notably universities, theatres, opers of our children's minds.
attitude that is quite similar to
discoveries,
inventions,
gadgets, art galleries and music, has long Respect and wealth go to men
one that used to prevail in class
been accepted as the only means
and nostrums, one would
who make their living using up
never
societies where the handsome, the
guess
how
much
we
owe
to of supporting high level cultural our limited resources capital; we
rich, and the wellborn looked
activities.
even
favor them by tariffs and
Europe in basic research — that
complacently upon the misery of fountainhead of
Oscar
Wilde
once
technology — or
remarked; special tax benefits.
But meager
the masses, firmly convinced that
how impressive is Europe's scien¬ "Civilization requires slaves. The rewards
go to men who by reason
the misery was well-deserved and
tific creativity—the most impor¬ Greeks were
of their intellectual endowments
quite right there.
stances

Forest

Because

self

impor¬

my

things.

we

Queries

tant tasks
in

perpetuating the illu¬
shall always have

that

we

mortgage our children's and
country's future to buy more

our

sion

artificial

discontent in others and to

will

com¬

then.

more

profit¬
contrary

the

have

able

much

are

less

resources

them

interest of

the

Americans

our

to

situation where gifted men devote
all their time and their consider¬

tories, 133 major scientific papers year's models on the scrap heap.
atomic fission were published To do both as rapidly as possible
come
to
be
considered
a
only half a dozen of these has
by Americans.
major
objective of our native

relatively small because

Russia's

Complacency

industry

Thursday, April 16, 1959

.

getting poorer in resources. But
various groups who find that con¬
servation measures make utiliza¬

chine by persuading us

on

discards, the spectacle of
our
affluence is more likely to
to be the lot of the mass of our
win
us
enmity than friendship. first country large enough to make people; It survives among persons
Our loss, of course, is Russia and maximum use of
technology. The who have had exceptionally bad
China's gain. Their own standard
luck or who are mentally, emo¬
European countries were too small
of living is not so high as to cause to benefit
fully by their own tech¬ tionally, or physically handicapped
to such an extent that they can¬
envy, yet high enough relative to nical
inventiveness.
Not
until
conditions in most backward na¬ Russia
not meet the problems that normal
began to apply technology
tions that it can be made to seem to the
exploitation of her own people are able to handle. Having
effective
proof of communism's vast land were we faced with accomplished this we ought to
cease
our
intense
alleged efficiency.
r
preoccupation
competition on something close to
equal terms. For some years now with production of material things
family

lar

ten billion dol¬

a

—

the

produces
our rich society — modern
tech¬
nology—is of European origin. To
be brought to maximum use, tech¬
nology needs a resources-rich area
with a mass market. We were the

industry;

new

familiar—phys¬

European universities and labora¬

ab¬

The third factor which

with

field

a

ics and nuclear power—nearly

of

sorbed.

the

In

we.

as

made goods we have had to create

than we need.
By investing arti¬
all cles designed to be of practical
the
important theoretical work use with a spurious prestige val¬
has been done by Europeans. In ue, these talented people induce
theoretical
physics, Europe has us to discard what is still iierproduced some 15 to 20 men of fectly satisfactory and buy new
high originality in the last hun¬ models—planned obsolescence is
the term for this bit of modern
dred years against one American;
of 12 important discoveries that witchcraft.
contributed to our understanding
Today thrift has became not
of the atom and nuclear fission, only
old-fashioned,hut antisocial;
11 were made by Europeans, one disinterest in material possessions
by an American.
Between 1934 is made to seem a kind of treason
when Fermi published his epoch- to the American way of life be¬
making report on fission and 1940 cause it puts a brake on the speed

which

we

weakness

whose

American; more antibiotics,
too—such as the sulphas and peni¬
cillin. Reading the list of Nobel
prize
winners in
physics
and
chemistry is a sobering experi¬
ence.
During the first hall-cen¬
tury that these awards were made,
England received in proportion to
population 2% times; Germany,
3
times; Holland, 4 times; and
Switzerland,
5
times as many

.

.

resources

and

turning them

materials.

have

Conservation, too, is something
that rarely excites our interest.

the

shall

We

not

really buckle down

flood of goods which over¬
whelms us. We no longer produce

gently what is left to

to supply what we

face

a

consume

what

the

in

order

machine

need;
to

we

clear

now

away

produces — a
topsy-turvy state of affairs.
To
dispose of the flood of machine-

to

conserve

efficiently and intelli¬
us

until

we

the fact that even this huge
country is not limitless. Conserva¬

that

This

to

ture

are

running out of

prove
space

that
and

of

nents'
have

we

been

been time

not

to

has

paper.

abundance

facts

deluding

ourselves

have "the best schools in

one-sided

tionists have been marshalling an
of

stopped
we

world."'

own

strength
dwelt

on

best

our

give

only

unfair

an

There
a

and

and

has

and
not

balanced pic¬
our

oppo¬

weakness.

I

illusions
theirs. It has always seemed

to

me

to

on

our

correct

our

own

Volume

Number 5838

189

rather

weaknesses

complacently
versaries.
I

am

■/

.

The Commercial and

our

Publicist asserts business is

ever

larger numbers of material things
a liability in the
race that the

of

standard

American

living

is

would be ful¬

the

is

for

admiration

our

op¬

desire

to

and

truth;: in
searching for chinks in our' own
armor,

work

criticized

have

I

adver¬

our

has

been

with

shorter
in the

the

another

and

week

week's work.

a

Merryle S. Rukeyser

As

added

He

take full advantage of the op¬

portunities offered
land of

ic

by this great
democrat¬

us

and by our

ours

institutions

enable

that

to

us

develop what is best in us. Let
us make full use
of our greatest
asset —the

which

can

free

mind

human

work wonders if

—

it is

permitted to embark on voyages
of discovery beyond the frontiers
of knowledge.

restrained

is

somewhat

nize

Prices, in the final analysis, must
be in balance with costs, and costs
inflated by high taxes, on

the

and

of

vers

engineers

process

the cost-raising maneu¬
politicians and pressure

outstrip

.

was

Form Diversified Mutual

formed

with

Avenue

to

business.

offices

Pine

110

at

in

engage

Officers

securities

a

Eugene

are

R.

Cuthberton, President; Robert M.
Blakey, Vice-President; and John
W. Pares, Secretary.

Norman Sherwin Opens
(Special to The Financial Chronicle)

SAN FRANCISCO,

Sherwin

V.

man

Market

conducting

is

Street.

nomic

♦

a

Mikki

M.

Ferer

is

ting improved, labor-saving tools
of production and for improved
methods. If technology were static
in face of the pressures for mark¬
human

a

Opens

engaging in

name

York
of M.

Ferer Securities.

With Leward Lister
BOSTON, Mass. — Andrew J.
McCarthy is now connected with
eral

&

Co., 80 Fed¬

Frank Drucker
Frank

Drucker, associated with
and
Company,
New

Burnham

City, passed

away

April 11.

Alvin C. True
Alvin

C.

True, associated with
Deetjen
& Co., New
City, has passed away.

Emanuel,
York

upward

would tend to be self

pressures

defeating.
Debate

between

President

Eisenhower and his critics on the

impact of heavy Federal spending
national economic growth, the

on

issues centers on the claim that

by

priming expendi¬
rate of economic
growth can be stepped up from
the historic 3% per annum to 5%.
Federal

pump

the

LODI, Calif.—Elwood R. Beckhas joined the staff of Beck-

man

& Company,

man

321 North Cali¬

the

discussion
discussion
to

vants

as

could

dance

is

by
how
on

as

realistic

as

medieval sa¬
many
angles
the

end

of

a




Dampening of Growth Potential

"Nobody in private enterprise
puts a ceiling on growth. In the

competitive system, each strives
as
big a slice of the market
as
he can get.
Historically, this
has averaged
out at an annual

for

of

inflationary

payments.
political

3%.

Mr. Hazel

H.

Norman Roberts Adds

I.

previously
&

.Tosey

was

asso¬

of Oklahoma

Co.,

City.

.

(Special to The Financial Chronicle)

SAN

DIEGO, Calif.

Tomlinson
have

—

P.

James

and

been* added to the

Norman C. Roberts

John S.

Joins Tabor & Co.

Ellis

staff

(Special to The Financial Chronicle)

of

Company, 625

DECATUR, 111.—George H. Hub¬
is now with Tabor & Co.,
139 West Main Street, members of
the Midwest Stock Exchange.
bard

Broadway.

Pillsbury With Reynolds
(Special to The Financial Chronicle)

MINNEAPOLIS, Minn.—Robert
K. Pillsbury has become associated
with Reynolds & Co., 629 Second
Avenue, South. In the past he was
with First National Bank of Min¬

With Jamieson Co.
(Special to The Financial Chronicle)

S.

MINNEAPOLIS, Minn.—Elwood
Rustad is now connected with

Jamieson

&

Soo

tional

First Na¬
Building.

Company,

Line

■

^a«9»»"aaUl
ms

recog¬

of

smsmmeWtmmz

proce¬

a

Need

maladjust¬

and

specialized

economic

trends in Western Europe

help

parellel

tendency among academic lead¬

ers, especially in
turn away from

Great Britain, to
soft money

the

in any

theories of John Maynard Keynes.
The

beginnings

of

a

similar

change, with a bit of a time lag,
are
also discernible among eco¬
nomic savants in American uni¬

being greatly strengthened

directions?

in its

capabilities vis-a-vis

Communism by the new intellec¬
tual fashion of making clear that
inflation is inconsistent with sus¬

social

tained

of these

The free world is thus

survival

and

economic

The modern

approach to solving

Ebasco gets to

the job

specialized help. That way
divert your own key personnel from

while your

call in
you don't

overburden

regular staff. And yotl save a
maximum of payroll dollars. Backed

"On

labor
become towers of na¬

domestic

the

leaders can

scene,

strength if they relate de¬
for improved
returns to
union
card
holders
to
visible

tional

solving similar
problems for other organizations,

by long experience in

normal flow of

routine'

operations continues.
Ebasco

your

Opportunity for Labor Leaders

work promptly, gets

done right and economically

special business problems is to

regular duties. You don't

growth.

your

business

specialists are at

call anywhere and anytime

need them, for
small in any

you1

assignments large of i

line of business.

mands

improvement in productivity.
Statesmanship will entail suffi¬
cient
fairness to
distribute the

output per mantool hour equitably among, work¬
ers, customers, and investors.
Otherwise the incentives for sus¬
tained
expansion
become
im¬

fruits of greater

through

For

a

complete outline of the services

Ebasco offers,

write for our booklet,
Outside Help."
Incorporated,

"The Inside Story of

Address:Ebasco Services

Dept. V, Two Rector

St., New York 6, N.Y
x<mti iimiiiummmmmmmmmmmkX

NEW YORK
DALLAS

•

subtle
can

economic
be

intelligent

made

policy
better

negotiation

•

CHICAGO

PORTLAND, ORE.

SAN FRANCISCO

paired.
"These

of

in

Southern"

are a snare

"These

decisions

increment

Colorado,

of

states

ciated with the investment firm of

ments in the international balance

Under

a

Funds

This

7% in order to correct

private enterprise system,
growth depends on the confidence

overall

Street

Group of Mu¬

Illinois, Southern Indiana, Iowa,
Missouri, Nebraska and Wyoming.

fornia Street.

tures the average

This

L. Hazel

Robert

of

the

of

The Conservative party

versities.

needle.

Street.

York

the

"In connection with the current

at 50 West 45th Street, New

Leward M. Lister

energy,

shares

(Special to The Financial Chronicle)

in
Minis¬
ter Macmillan had the courage to
raise the bank discount rate of

rates create

ing up the money cost of an hour

securities business from offices

City, under the firm

mark-up of money wage
a demand for offset¬

annual

distri-

Great Britain under Prime

Pressures for

tracts add to costs.

Great

Mikki M. Ferer

such as armament

inventories before new wage con¬

'

>

factors,

building, on the one hand, and an
effort to increase steel and other

Calif.—Nor¬ of

securities business from offices at
582

unduly stimulated by non-eco¬

is

(Special to The Financial Chronicle)

LONG BEACH, Calif.—Diversi¬
fied Mutual Funds, Ltd. has been

/

from

dures.

the demand side, business

"On

the

and
generation has
been enlightened by the miracle
in West Germany which has been
accomplished through loyalty to
sound economic principles. Under
de Gaulle, France too is turning
away

groups.

will

charge

Delusion

benefits

illusory

inflation

delusion.

a

hand, and high labor costs, on
the other. Progress is made when

the

that

currency

one

inventors

a

"The current trend is to

dull the enthusiasm of customers.

are

have

tual

Optimum results

Currency Impairment

to

tends

which

system,

pricing

the

by

.

District

Hazel

to

pulsating variations in
because, in the present period of human sentiments of optimism
"An outstanding public need is
intense rivalry between democracy and
caution.
But opportunities to recognize that economic prog¬
and totalitarianism, they prevent for
sustainable
growth
are ress must be measured in terms
neapolis.
our making the fullest use of all
heightened by improvement in of providing workers with more
our potentialities. But, in closing I
economic tools. These should in¬ and better things in exchange for
should like to affirm my convic¬ clude a sound monetary system, a a week's
work, not in manipulat¬
tion that our potentialities are so a
sensible governmental taxing ing the dollar in a manner that
great that, if we would but divest and spending
cuts down, instead of increasing,
program,
and a
ourselves of illusions, seek out the more scientific approach to the true purchasing power. President
truth no matter how displeasing cost sheet of enterprisers.
Eisenhower's
current
battle for
it may at times be, and set our
sound money way pr«ve histori¬
Restraints oil Recovery
goals high, there is literally noth¬
cally as significant as his earlier
wartime invasion of Normandy.
ing we could not accomplish. Let
"This current period of recovery
us

a

Manager, M_r.

Joins Beckman Staff

ficials.

of

cause

that

of

dent

organization.

and better

more

by

Martin, Presi¬

Broad

this
people i.

American

an¬

Fox-

Milton

ANGELES, Calif.—Aurelio

D'Antonio

been

nounced

of

Rukeyser

illusions

our

has

among

bution

depend on heightening incentives
is
to become more productive.
saries do.
an economist, business consultant,
There
are
different
ways
to and writer of a nationally syndi¬
"D-day will come in May when
column
entitled' "Every¬ the negotiations for a new labor
express devotion to one's country. cated
For some:people, love expresses body's Money."
contract in the steel industry gets
itself solely in fulsome admiration
"A non-stop boom," said Mr. under way," Mr. Rukeyser pointed
of every aspect of the American
out.
"In setting the new wage
Rukeyser, who is author of "Fi¬
way
of life; for others critical nancial Security in a Changing pattern, those at the bargaining
analysis is part of all true devo¬ World" and six other books on table can do more to check infla¬
tion. :.;V,V::
'
tion than Washington public of¬
economics, "is not feasible be¬

slavishly what

copy

Hawai¬

Co., 507
previ¬
ously with Atlas Securities, Inc.

goods to
the human toiler in exchange for

Mr.

quarters in St.
Louis, Mo., it

the staff of J. A. Hogle &

of

beginning

leisure

creased
form of

forums

West.

Corporation,

West Sixth Street.

economic gains in two major ways
—one in the form
of greatly in¬

the Middle

in

I do not advocate that we

the

on

largest

men's

LOS

Street
head¬

Broad
with

of

Manager

Sales

(Special to The Financial Chronicle)

have elected to take the fruits of

oldest

the

of

the

seek

engi¬

process

the

•'"Since

century,

March 17, one

ponents that induces me to bring
out their strong points, but simply
the

inventors,

of

League
Omaha,

trict

Robert L.

—

Hogle Adds to Staff

R.

;

appointed a Dis¬

been

and merchandisers.

Ad-Sell

the

illusion is detrimental.

an

not

of

neers

Merryle
Stanley Ru¬
keyser before

justified these opinions
exist; that persistence
in holding on to what has now
It

ideas

by

once

potential. Authentic
cannot be manipulated,

but is the resultant of the creative

expressed

has

employing groups the cost of
work stoppages."

growth

growth

view

This
was

LOUIS, Mo.

have similarly

distribute

to

ST.
Hazel

government spending im¬

filled.

sensible man will go
opinions held by the
of his fellow citizens

Board.

Hazel, District Mgr.
For Broad St. Sales

all

them.

finance

Aeronautics

sugar growers

undertaken

the currency and discour¬
ages long-term bond investment,
there would be a dampening of

to

become

Civil
ian

and the
If

enterprisers

who

trying to develop

are

defensive

solidarity against
strikes
through
emulating
the
mutual help scheme originated by
six airlines and approved by the

pairs

longer

no

business

savers

riotous

unless he believes that the reasons

that

of

became pure
and divested
then per¬

haps the wistful hope of economic
stability

To question the validity of
a
philosophy of continuous ma¬
terial growth is not popular.
Of

majority

beings
machines

thinking

themselves of emotion,

goods.

no

human

If

pends
on
the
continuation
of
today's frenetic production and
consumption of manufactured

counter

Employers

Declares impairment of the currency would
dampen the country's growth potential, maintaining real
growth cannot be manipulated, but results from creative ideas
of inventors, engineers and merchandisers.

fiercely defended by a formidable
array of groups and organizations
whose economic well-being de¬

course,

increase in the number of strikes.

unduly stimulated by non-economic

buildups.

tory

that the sanctity of the

realize

I

Rukeyser Maintains

factors, including armament building and strike-fearing inven¬

totalitarians have forced upon us.

industrial

through

Yet the sophisticated are

predicting that with economic re¬
covery this year there will be an

some

is

than

warfare.

pro¬

consumption of

duction and

Fluctuations Inevitable,

single-

with

49

*

Emotional Elements Render Business

-

preoccupation

(1773)

Financial Chronicle

rather

look

to

than

.

those of our ad¬

on

convinced that

minded

.

•

WASHINGTON, 0.6,

60

The Commercial and Financial Chronicle

(1774)

Continued from

Coast Exch. Members

page

The

4

salary
Two

member firms

new

Pacific

Stock

Coast

of the

Exchange

through membership in the Los
Angeles Division were announced
by Thomas P. Phelan, Los Angeles
President.

Division
The

membership

of

Jacob

M.

Alkow of Alkow & Co. became ef¬
fective through the transfer of the

of Milton Toboco of

membership

Toboco & Co., Inc.

Alkow & Co.,
office in New

production

equipment and methods and expand their markets.
Steel imports have been rising for several years, while exports
have declined; auto manufacturers find imports mounting as their
overseas sales drop in like proportion.
Another trend: Many of
our corporations are building or buying plants overseas to compete
in Europe's new six-nation common market.

Exchange, recently
acquired the business of Toboco

"Rising wages and prices are beginning to outrun the com¬
pensating power of American efficiency," Mr. Moran concludes.
The cause? "A substantial part is Government-induced infla¬
tion. Some folks talk as though inflation is merely a future threat,

& Co. and Mr. Alkow is President

but

Inc.,

with

head

York

and

York

Stock

of

member

the

New

The

membership of Frank W.
Jones, Chairman of Diversified
Mutual Funds, Ltd., represents an
additional

new

member firm.

Di¬

versified Mutual Funds, Ltd., was

organized

with

headquarters

in

Los Angeles to develop a sales or¬

ganization for the distribution of
Funds and other securities.

Bache & Co. Schedules

having inflation for some time.
spring the wage increases that exceed pro¬
ductivity gains and the consequent price rises now beginning to
challenge our competitive marketing ability. The inflation we
have

permitted through the past years of deficit spending by the
hitting us in world markets."
The way to handle inflation is to "stop inflating," declares
the business analyst. "What is beginning to happen to our inter¬
national trade is one more sharp warning that the time to stop is
long past and we had better wait no longer.
"Our Congress, the labor leaders, and our public ought to
consider that warning before they let either the protectionists or
Government is now

the inflationists drive

Management Seminar

*

A

management

attended
and

by

key

have been

we

"From inflation

of the firm.

seminar,

to be
executives

partners,

personnel

of

the

New

York

headquarters of the invest¬

ment

firm

Bache

of

&

Co.,

will

be held at the Westchester Coun¬

try Club, Rye, N. Y., Thursday
through
Sunday,
April
23 - 26,
Harold L. Bache, managing part¬
ner, has announced.
The first in
a
series, this initial gathering is
expected to result in subsequent
regularly scheduled meetings dur¬
ing the year with partners and
executives of Bache's out-of-town

branches in attendance.

The

295,000

Labor

out of home and foreign markets."

us

Statistical

Department's

housing units

Bureau

that

the first three months of

were put under
1959 exceeded any

The 120,000 units started
high for that month.

tory.

in March

report

that

the

construction during
prior quarter in his¬

also

represent

new

a

Secretary of Labor James P. Mitchell, in ^ statement on the
first-quarter record, said the figures "mean our economy is
punching confidently ahead."
"They mean more jobs for more people building more
houses," Mr. Mitchell said.
"New housing starts also mean new
appliances, new furniture, and of course, increased demand for
building materials.
"For many trades from lumberman to plumber, this is good
news."

.

Nationwide Bank Clearings Up 16.8% Above 1958 Week
clearings this week will show an increase compared with
a
year ago.
Preliminary figures compiled by the "Chronicle"
based upon telegraphic advices from the chief cities of the country,

Disque D. Deane, a partner in
Eastman Dillon, Union Securities
& Co., and W. J. Keary, New
York
financial
consultant
and
former

partner in Union Securi¬
ties Corporation, have been elect¬
ed

directors, of McLean Indus¬
Inc.,
according
to
an

4'

Week Ended

tries,

announcement

President

New

by M. P. McLean,
company.
Mr.

McLean also announced the elec¬
tion of E. A. Hirs as Executive

Vice-President

of

Steamship Corp.,
sidiary.
H

:

-

195K

•

%

-f 20.7
—
0.7

982,000,000

971,000,000

+

691,712,391

Boston

Waterman

577,305,128

Synthetic lubricant sales will rise significantly in the next few
as commercial airlines switch from piston-type aircraft to
turboprop and turbojet planes, reports "Chemical Week," the
McGraw-Hill publication.
Experts estimate civilian world-wide requirements for syn¬

ones for steel users hop¬
ing to build a safe inventory against the possibility of a steel
strike, according to "The Iron Age," national metalworking
weekly.
'-

Joins Taylor & Co.
BEVERLY

HILLS, Calif.—Pat¬

rick J. Logan has joined the staff
of
Taylor
and
Company,
439

North Bedford Drive.

Two With Paine, Webber

thetic lubricants will
1962.

This is based

ANGELES, Calif.—Cecil

Age" said that from here on in it will be a race against
time for both the mills- and their customers.
The mills already
are falling behind in • their
delivery promises for some products.
This means that at least a part of June will be used to clean
delivery of tonnages ordered "for May shipment.

are

deadline
on

Middleton
are

and

Forrest

connected

now

P.

Moran

with

Paine,
Curtis, 626

Webber, Jackson &
South Spring Street.

Spear Leeds Partner
Spear, Leeds & Kellogg, 111
Broadway, New York City, mem¬
bers of the New York Stock Ex¬

change,
Val

J.

on

April

Connellan

2nd
to

admitted

partnership

It is

becoming.apparent, said "Iron Age,", that there's,
The business recov¬
has been stronger than expected, and more steel is being used
than anticipated.
This has offset to some extent the drive to
build up stocks.
* V-v' *-

McDonnell Adds

to Staff

(Special to The Financial Chronicle)

FRANCISCO, Calif.—Rob¬

ert H. Gorham is with McDonnell

& Co.

Incorporated, Russ Building.

Output of Steel During March

ery

"Iron
line

Paul T. Sullivan

^

Sullivan, head of Paul

T.. Sullivan & Co., Scarsdale, N. Y.
passed away March 26 at the age
of
Mr.

62

following a brief illness.
Sullivan had been in the in¬
business for 40!
years,

vestment

establishing his

production set a monthly record during March, when
steelmaking furnaces poured 11,567,000 net tons of ingots and steel
castings, according to the preliminary report of American Iron

own

firm in 1947.

Steel

Volz,

institutional
dealer

sales

companies have even started to
Scattered orders in ;new

models.

According to the American Iron and Steel Institute's index of
steelmaking, the March, 1959 production was 162.6 in terms of the
basic index of average production
during
This compared with 149.5
during February,

March,

the period

1947-1949.

1959 and 87.9 during

1958.

service

with

certain

bar

sizes.

Allocation of steel to service center customers is becoming
increasingly

something that hasn't happened

is

This

common.

to steel warehouses since the steel

"Iron
factor

shortage of 1955.

Age" said-defense priorities

in the steel market.

are

becoming

A few defense contractors

of

more

a

insist¬

are

ing that their priorities ,be honored by the mills.
Some mills
report the priorities have been used to get better delivery on light

plate for government installations.

Bars, too, have been put under
priority, particularly for .West Coast construction work.
Priorities may have a more critical effect in the months ahead,
notably in stainless and high alloys for aircraft and missile work.
Strike

buying

hedge

products.

already

firming

is

*

for

demand

up
-

.

.

these

.

Steel Production Shows Further Increase
The American Iron

and,Steel Institute announced .that the'.,

operating rate of steel companies will average *164.8% of steel
capacity for the week beginning April 13r'equivalent to 2,648,000
tons of ingot and steel castings • (based On average weekly pro¬
duction for 1947-49) as* compared with- an actual rate Of»^ 164.4%"
of capacity and 2,641,000 tons a week ago:++; v';:+"+v,Actual
utilization

output for April 6. week
of

tons.

of the

equal to 93.3%

A

month ago

the operating rate

*Index of

the

ago
or

80%.

production is based

1947-1949."

>■'. '

*163.8% and production
weekly production was

was

actual

on

weekly production
V "

average

•.*"

Sharp Increase in Steel Imports Cited

.

steel producers, paying relatively low wages com¬
pared with those in the United States, are claiming an increasing share of this country's market for many steel products, ac¬
cording to American Iron and Steel Institute.
latest

source

steelworkers'

available- data' from

imports

of steel
estimated

average

<\ '1'

Country

Average

L

;

"

76.8
69.4

.775

Kingdom __/>i-______ 1

•

+ /•

73.4

•

.805

-V

Japan

Per Cent

$ .678
.892

.

'

+ Australia
United

a

Below U.S.A.

Hourly Earnings

West Germany
Luxemburg
Belgium —-

United

nations—each

six -"foreign

to this country last year—show
hourly earnings as follows:

'.1957

72.4

,.406

\i

.

States, 1957-_^__2--l_-U-2 £■ :

.

86.1

.989*.

66.1

*

2.917*

"'American Iron and'Steel Institute.

and

manager of the
out - of - State

department

of

Rau-

scher, Pierce & Co., Inc., San
Ahtonio, passed way April 5 at
the age of 51.




Among the steel mill products from foreign
made inroads into domestic markets during 1958
.

Concrete

Reinforcing

product available

ports)

18%

came

uct

average of 92.3% of capacity during March, 1959,
compared
with 84.8% in February, 1959. The
per cent of capacity figure for

number

of

steel

million

tons

of

this

nearly 39,000 since the end of 1957. The totals exclude the
dupli¬
cation of holders of more than one class
of stock of a single com¬
pany, but do not exclude the holders of stocks of more than
one
company.
"
The industry has
approximately 43%
.

more

stockholders than

total

imports of this
supply in the

;

per

.

,

and

Tubing—Imports in this product category during
totaled 200,000 net tons and have accounted for a larger

percentage of available supplies in
-

stockholders rose to a
and crossed the one-million-mark for

half of the

...

Pipe

company

high level last year
time, according to American Iron and Steel Institute.
At the end of 1958, the figure was
1,026,825, an increase of

employees.

2.5

the following:

cent of the,available tonnage of this prod¬
imported, against over 20%. in 1957.
/.

was

✓

Mark

than

more
,

Nails—Thirty

1958
-

Industry Stockholders Pass Million

total

product accounted for

utilized

first quarter of 1959 was 83.7.

The

the

Barbed Wire—For the second successive year,

at

Steel

Bars—Of

which

countries

are

(domestic shipments, plus imports, minus ex¬
from foreign nations, against 7% in 1957. i;

United States.

were

■

Foreign

....

steelmaking facilities

•

the Jan.

2,631,000 tons.
A year
placed at 1,285,000 tons,

for

was

■

1, 1959. annual capacity of 147,633,670 net
Estimated percentage for the week of April 13 is 93.5%.

The index figure for the first
quarter of this year was 147.6,
compared with 91.0 during the first quarter of last year.
;
Based on the Jan. 1, 1959
capacity rating of 147,633,670 net
tons of raw steel annually, the
an

-

cars are

centers
(warehouses) also are running into
In the Midw&st, -service centers actually are out of
sizes and gauges of sheet, and are beginning to have some

some

Only two previous months have had output exceeding 11 mil¬
They were: October, 1956 (11,048.513 tons) and January,
1957 (11,008,762 tons).

the first

Edward T. Volz

Edward T.

year's

auto

1960

problems.

The total for the first quarter of 1959 was
30,487,323 net tons,
largest amount produced since the first quarter of 1957 when the
figure was 31,585,042 tons. In the first quarter of 1958 the output

only 18,790,857 tons.

the

starting to hit the mills. Auto firms
are just placing the orders, not making releases.
But the moves
indicate they want to be sure to get on the books.
Most expect
to issue the releases for May- or June delivery.

and Steel Institute.

The record March production was more than 5.3
million tons
above the output of March, 1958, and more than 1.9
million tons
above the production of February, 1959.

said

for their

sizes for next

for

record
:

Age"

steel

up

major

,

Paul T.

now

to the steel boon* than strike hedging.

more

million gallons a year by

Steel

was

if steel labor and steel management are unable to agree
collective fca'rgaining contract/

new

a

lion tons.

in the firm.

SAN

one

up

The metalworking weekly added5 that practically all products
sewed up tight until the end of June, which may be a strike

-

The

Record
R.

to about

the announced orders of 876

turboprop and
turbojet transports by world airlines for delivery from 1959 to
1963. Last year, about 200,000 gallons were used
by commercial
airlines, mainly in turboprop operations.

(Special to The Financial Chronicle)

LOS

soar

on

-

.

"Iron

years

(Special to The Financial Chronicle)

Approaching for Steel Users'*:;'-

The next two months will be critical

+19.8

1.1

Synthetic Lubricant Sales Seen Rising

McLean Sub¬

a

1959

$12,252,896,025 $10,148,642,699
1,134,238,658
1,142,254,227

Chicago
Philadelphia

the

of

April 11—.

York

marketing of iron
i'v:

Critical Months

indicate that for the week ended Saturday, April 11, clearings for
all cities of the United States for which it is possible to obtain

weekly clearings will be 16.3% above those of the corresponding
week last year.
Our preliminary totals stand at $23,408,843,309,
against $20,037,332,838 for the same week in 1958. Our compara¬
tive summary at the principal money centers was as follows:

employed in the production and

were

'"and steel.

trouble

Bank

Named Directors

employment total in all activities was 719,492 wage and
at the end of 1958., Of this total, about 547,902

workers

persons

The State of Trade and industry

Thursday, April 16, 1959

.

.

.

Plain) Wire—During

total

of

more

of available

1958,

this

than 130,000 net tons,

every

year

country

since 1955.

imported

accounting for well

a

record

over

supplies, against less than 3% in the previous

5%

year.

.The imports of the above products
during 1958 are readily
related to the six nations listed above as paying lower wages to

their

steelworkers than

West

are

paid in the United States,

Germany was the
tubing imports during 1958.
constituted
The

United

a

leading source of steel pipe and
Belgium "and Luxemburg together
major source of wire and concrete reinforcing bars.
Kingdom was a high-ranking source of pipe and

•

Volume

189

wire.
as

Number

5838

.

.

.

The Commercial and Financial Chronicle

Japan led as a source of nails.
Australia ranked second
of pipe and tubing imports.
;

source

a

(1775)

Business Failures Rise in Week Ended April 9
week

High Demand for Steel to Be Sustained
tons

Strike or not, metalworking will use 6 million to
of finished steel a month during the third

6.5

change of

a

million

quarter. That's
consumption, and it's unlikely that we'll
''Steel" magazine reported April 13.

pace,

Big users like the automotive,
appliance, furniture, and farm equipment industries are at peak

but

summer,

vacation

shutdowns

in

other

gains.

metalworking will probably do much better in the third
quarter than originally expected, whether or not there is a steel
strike. With two exceptions (employment and some
capital goods)
the economy has regained prerecession
peaks.

no

*

.

There

year ago

*■-«

/

•

.

a

was

a

on

which

was

commodity price level hit

April 8 when it reached 280.51.

a new

but

creased to 279.59

in

Light marketings and good export and domestic demand
brought corn prices to new highs in several markets. May wheat,
offered by the Commodity Credit Corp for export at low prices,
helped depress whe&t prices. Rye prices finished lower for the
second week after holding firm most of the week.
For the third
consecutive week oats moved up in price, with trading hampered
by lack of offerings. Soybeans were held back by Farmers as
prices continued to rise.
*

1958.

During the" first quarter, the value of
a record $10.9 billion.
" J

construction

new
.

Despite the high level of steel operations, "Steel's" composite
scrap price fell 83 cents to $36.17 a ton, the lowest since July, 1958.

Truck Output Sets Three-Year Record
United
1959

States

passenger

peak in the week

to its highest level in more

remained

its

near

April;.10,;while truck output shot
than three years, according to War'd'is

Automotive Reports.
The

production

car

ended

;

...

/

program
same

week

a

topped

last week

(16,863) by 55.5%.
It also was the greatest truck-making effort since the week
ending
Feb. 4, 1956 (26,690).
•
.
.

>

year ago

Ward's viewed the increasing truck activity
strength in the nation's general economy

as

sign of

a

grow¬

forecast

and

that

truck makers will produce 111,000 units in April, highest month¬
ly volume since November; 1955.
Output in March was 109,801
units.

/;'■%V:'-

Assembly
week's

133,878

"■'

i

•.

lines scheduled 133,027 cars, just
units and 56.5% greater than the

short

of

84,997

last

turned

out ia the

corresponding week last year. Best 1959 count to date
was recorded Jan. 12-17
(135,953).'r ; '
■{
So far this year, truck volume 'is running 35.7% ahead of
1958,. 349,279 units .to 257,474,. through tn§ first 10 days in April
of each year.
Car output is 32% higher this year, 1,816,266 units f
to 1,375,584.
"i"'
;.y • \
' ; '
On

the car-making scene, Wartf'Ss >aid. Saturday
operations
be quite prevalent this week.
Scheduled for six-day assem¬

will

bly

nine plants—Rambler in

were

Kenosha,1 Wis., currently

ating

■

at? all-time high rates; Plymouth-Dodge
Lincoln
Thunderbird in Wixom- Mich.; and
-

>

ahead

of the

prior week.

in

Ford

Division

in

Ward's said the only car assembly plants in the country fail¬
ing to put in a full week were Chevrolet'? Baltimore, Md., and
Tarry town, N. Y., factories, which vvofked" four days.
.

After

Electric Output

11.5% Above 1958 Week

The amount of electric energy,
power

week

distributed by the electric light

industry for the week ended Saturday, April 11, was
12,604,000,000 kwh,, according to the Edison Electric

iV

.

For the

kwh.

week

below:

that

ended
of

1,297,000.000. kwh.
week.

or

April 11 output declined by 14,000,000
the previous week, but showed a gain of
11.5%- above that of the comparable 1958

.

>■</

:V."*'■■■.»■

Car

-

.

.

.

•

•

Retailing Down in Post-Easter Week
buying fell noticeably in the post-Easter week from
was down appreciably from the similar calen¬
dar week last year, which was the 1958 pre-Easter week.
Sales,
however, moderately exceeded those of the post-Easter week a
year ago.
The most noticeable year-to-year declines occurred in
apparel, while volume in household goods was up moderately from
Consumer

the

the

prior week and

like

1958

week.

The, total

Loadings of
590.133

y

nounced.

This

was

freight" for the week ended April 4, 1959,
the Association of American Railroads an¬

an

increase of 73,366 cars.4or 14.3% above the

corresponding week in 1958, hut a decrease of 53,959 cars, or 8.4%
y. below the corresponding week

in 1957.
Loadings in the week of April 4 were 13,622 cars, or 2.3%
below the preceding week, due to the observance on April 1 of the
Eight-Hour-Day Holiday in the coal fields.
,

Lumber Shipments Again Exceed Production

Lumber shipments of 477 mills reporting to the National Lum¬
ber Trade Barometer were 6.2% above production for the week
ended April 4,
were

2.7%

In the

1959.

below

same

production.

•

For

the year-to-date, shipments of .reporting identical mills
2.3% above production; new orders were 5.2% above pro¬
duction.
'
r
.
-

Were

,

.

For week ended

April 4, as compared with the previous week,
reporting mills was 3.1% below, shipments were
0.6% above; new orders were 6.6% below.
For the latest week, as

production

of

against the corresponding week in 1958 production of reporting
mills was 17.9% above; shipments were 17.4% above; and new
orders were 2% above.
j' yj




coats
suits

down

of

retail

trade

in

the

week

ended

was

rate

the

on

continent"

in

in- *

an

terview at the Hotel Pierre.

>

•

Mr. Vieillard called for greater

;

exchange of scientific, engineering
and other technical personnel be?
tween
the
United
States
and!
France.

*

"Both
deal
.

area

to

countries
offer

and

have

great

a

another in this

one

only gain from closer

can

cooperation."
France

not

only rebuilt devasMr. Vieillard said, but '

tated areas,

increased

industrial

production,
50% above highest pre-World War

II
level,
according
figures
- ^

official

to

^

By the end of 1956, the overall"
index of industrial production was
42%

above

1957

total

while

the

level.

1953

exceeded

1956

The

by

>

9%

for the first ten months of

1958 French
other
out.

production; rose an¬
Mr. Vieillard pointed

7%,

•

'.

■

Vieillard

Mr.

tronics

being

.

said

-

that

elec¬

computing equipment
in every area of

used

French

was

th^

and particularly

economy

by such government and scientific

organizations
as
the
French
Energy Commission,

Atomic
Center

Theoretical

of

Chemistry,
Railroads, banks,
elec¬
tric
companies,
industrial
and
commercial organizations.
French National

Ilails GAMMA 60

as

World's Best

The

Compagnie des Machines
Bull general manager said that by
the end of 1959 or early 1960 tjie
GAMMA 60

would be in produc-

"

tion.

1 ■''

"It will be the first data proces¬

sing machine in the world which
handle
several independent
problems at the same time."
can

Vieillard

Mr.

gave

some

ex¬

amples of speed:
GAMMA

The

60

transistorized

,

computer will add,
microseconds; multiply, 380
microseconds; imput (120 digits,
memory time only);
242 micro¬
seconds; memory access; 11 micro¬
seconds
(six decimals or four
alphanumerics or single address
instruction).
It
has fixed and
floating arithmetic.
It can read 300 punched cards a
data processing

post-Easter sales promotions offset some declines,
apparel fell considerably from both the prior
,and a year ago. Volume in women's accessories and Spring
was down sharply from last year and interest in dresses and
showed moderate declines. The call for men's apparel was
of

women's

appreciably from the same 1958 week, especially furnish¬

ings and hats; decreases in men's suits and sportswear were less
noticeable.

from
Increased buying of Summer
slightly over a year
ago.
Appreciable gains occurred in volume in refrigerators, airconditioners, and color television sets. Purchases of floor coverings,
and linens remained close to a year ago, but garden implements
Retailers

of

household

goods reported moderate gains

both the prior week and a year ago.

lawn tables and chairs boosted furniture sales

showed

a

marked increase.

100

minute; print 120-character lines
minute. Printing speed
be increased by using more
than
one
printing
unit.
The
GAMMA 60 comprises ten types
of units: arithmetic, logic, com¬

at 300 per
can

translator, printer, card
tape,
magnetic
drum; and card
punch. 'It is designed so that the
memory is kept busy all the time;
Mr. Vieillard pointed out that
the Compagnie des Machines Bidl
had climbed from 31st place in
parer,

Nationwide Department Store

Unfilled orders of reporting mills

equivalent to 44 days' production.

..

volume

Although
sales

week new orders of these mills

amounted to 44% of stocks. ,.For reporting softwood mills, unfilled
orders were equivalent to 21 days' production at the current rate1,
and gross stocks were

dollar

to —3.

\

revenue
cars,

reports indicate that sales of new

remained ahead of year earlier levels.

9% to 5% below the similar calendar week a year ago,
according to spot estimates collected by Dun & Bradstreet, Inc.
Regional estimates varied from the comparable 1958 levels by the
following percentages: New England —5 to —1; Mountain —6 to
—2; West North Central and East South Central —7 to —3; East
North Central —9 to —5; South Atlantic —10 to —6; Middle
Atlantic and West South Central —11 to —7; Pacific Coast —12
April 8

week
-

Scattered

GAMMA

insurance companies, gas and

.

Loadings 14.3% Above Corresponding 1958 Week

totaled

of

early part of the week but ended unchanged after profit takingreduced the gains.
United States exports of cotton in the week
ended last Tuesday were about 52,000 bales, compared with 47,000
bales in the preceding week and 105,000 bales in the same week
in 1958. Exports for the current season through April 7 were esti¬
mated at 2.123,000 bales as compared to 3,885,000 bales for the
comparable period a year ago.

,

at

Institute.>

moderate

heavy trading, sugar prices were off a
fraction at the closing. Coffee prices remained steady with volume
moderately active. Cocoa dropped in price on light trading.
Hog prices fluctuated considerably during the week in active
trading but finished lower following a substantial increase in re¬
ceipts. Supplies of cattle were siri^lLbut. prices on steers slipped
at *he end of the week.
Laino trading was moderately active,
with prices showing a sharp decline.
Prices on the New York Cotton Exchange were strong in the
a

passenger cars

estimated

were

negotiations for susbtantial shipments to the Near and Far
East are pending, which, if completed, would absorb a good part of
the government surplus.
Prices of rice held steady.

oper¬

Newark, Del.;

Atlanta, Ga.: Chester, Pa.; Dallas, Tex.; Dearborn, Mich.; Louis¬
ville, Ky.; and San Jose, Cal.
Louisville also builds Edsel cars.

and

Domestic sales of rice

points

.

of 26,230 units

the

Europe, said that "this revolu¬
tion had helped France expand its
■%
plant and equipment at the highest:

year ago.

in small demand but ended the week several

was

of

1

calculator and largest producer of
electronic
computing equipment

was

but

week's truck

(25,956) by 1% and the

ing

Flour

one

Western
j

manufacturer

on

Second only to the automotive-industry as a steel
user, con¬
struction will probably be a better customer this year than it was

below the 280.89 level of

of

Mr. Georges Vieillard, founder
and general manager of the Compagnie des Machines Bull, Paris,

the week

April 13 from 278.73 the week before but

the

structure

...

figure as a result of substantial gains in
prices of bellies, hides and packer's calfskin. The Daily Wholesale
Commodity Price Index, compiled by Dun & Bradstreet, Inc., in¬
on

rev¬

immeasurably
scientific
and

Europe.

ended above last week's
v

has

in

high for 1959

Declines followed

;

electronics

an

strengthened

Commodity Price Index Hits New High

The general

of

which

technical
.

use.

Wholesale

midst

olution

It is not a cost-of-living index. Its chief function
is to show the general trend of food prices at the wholesale level.

...

put in place was

the

from the $6.72 of the similar

the highest level reached in 1958.

The Dun & Bradstreet Wholesale Food Price Index represents
the sum total of the price per pound of 31 raw foodstuffs and meats

general

time.

same

top French industrialist de¬
clared recently that France is in

lard, sugar, cocoa, eggs, and steers.

in

independent prob¬

A

Index, compiled by Dun & BradApril 7, unchanged from the prior

decline of 8.3%

processing machine to

handle several

Price Index Unchanged

Higher in price this week were wheat, corn, oats, bellies, and
Commodities quoted lower were flour, rye, barley, hams,

be ordered for June

.

:

GAMMA 60 will be the world's

lems at the

butter.

Spring auto sales are blooming for .the first time in three
Bales may confirm 5.5 million car forecasts for 1959. Ford
production will be boosted 20% in April and more steel may

..

If

producer of electronic

computing equipment in Europe

<

,

,

street, Inc., stood at $6.16

years.

delivery. Material" that was bought originally
protection has probably been pressed into immediate

France's top

first data

date

Last.week, steelmakers ran their furnaces at 93.5% of capacity
2,647,000 net tons of steel for ingots and castings.

strike

Revolution in France,

*

week.

and turned out

service.

the

The Wholesale Food Price
-

by about 3 million tons during the third quarter. Steelmaking operations may drop to 55% of capacity in July or August, but
they jvill probably average 63 or. 64% for the .quarter.

for

in

;

Wholesale Food

tories

car

337

of

earlier.

to cut their inven¬

consumers

to

cooperative exchange, and claimf

...

strike, look for

climbed

the

curring abroad, calls for greater

.

If there is

failures
in

the 38 of this size in the similar week last year.
Thirty concerns
failed with liabilities above $100,000, rising from
24 a week

So

will be out of balance.

284

$5,000 or more were involved in 272 of the
week's casualties as against 241 in the previous week and 304 a
year ago.
Among small failures, those with liabilities under
$5,000, the toll jumped to 65 from 43 and exceeded considerably

industries

If we have a. strike, that; lasts more than .six
weeks, consumers
will start using steel at a slow rate. After
six,.weeks, inventories
will have fallen from 22 million tons to around 12
million, arid they

industrial

describes electronic revolution oc?

Liabilities

production. Their demands will not increase. Steel requirements
for construction; pipelines^ and the oil
country will probably rise
will offset the

and

April 9 from

313.

were

Here is why demand will hold:

during the

ended

preceding week, reported
Dun & Bradstreet, Inc.
At the highest level in any week since
May 22 of last year, casualties came close to the 342 in the com¬
parable week of 1958, and exceeded the 308 in 1957.
Some 8%
more
businesses succumbed than in prewar 1939 when there

about the current rate of
see

Cites Electronics

.

Commercial

51

-

the

Department store sales

on a

Federal Reserve Board's

Sales Down 13%

country-wide basis

Index for the week

as

taken from

ended April 4,

dropped 13% below the like period last year.
In the preceding
week, for March 28, an increase of 16% was recorded. For the four
weeks ended April 4 a gain of 7% was

registered.

According to ♦he Federal Reserve System department store
in New York City for the week ended April 4 showed an
18% decrease from that of the like period last year. In the pre¬
ceding week, March 28, an increase of 36% was reported and for

sales

the

March

21

week

a

16%

increase

was

recorded.

For the four

decrease of 2% was noted over the volume
in the corresponding period in 1958.

weeks ended April 4 a

reader,
paper
magnetic

tape,

1956

in

listing

of

French

com?

the Bourse on the basis
of capitalization to the 22nd po¬

panies
sition
"As
was

on

in
of

1957.
Dec.

in 12th

'

31,

pl^ce."

1958

our

.

firm
,

52

The Commercial and Financial Chronicle

(1776)

only $5.8 million whereas,

books at

1959

Thursday, April 16,

.

.

Rise of U. S. Bonds in Banking System
Seen
Fiscal Irresponsibility

value probably
million. Add to this
the
as
$75 million spent on new
plants and improvements during
the past six years, $20 of working
Writing in Monetary Notes, Dr. Walter E. Spahr calls attention .
to the shortening of maturities in Federal debt from 1953-1958,%
capital per share and deduct the
$43 million indebtedness, and the
and the continued increasing use of the banking system to
Norfolk & Western-Virginian Merger
actual net asset
value of each
finance our Federal Government. Why, he asks, is the answer
common share approximates $150.
Substantial savings in operations have improved turn-around time From these figures it is apparent
always that we cannot undertake proper methods of govern¬
arc forecast when the Norfolk
& making for better utilization of why Great Northern Paper quali¬
ment financing and, also, return to a trustworthy currency?
the cars.
Western and Virginian Railways
fies as the "Security I Like Best"
Besides the savings to be at¬ for investors
ore
finally
consolidated.
Some
One of the country's foremost nature because of fractional re¬
seeking real value
estimates are that a minimum of tained by the rerouting of coal to for each dollar they invest.
monetary experts reveals the ex¬ serve requirements.
'
\
■
some
tent
to
which
we
continue
$12,000,000 annual savings tidewater, there probably are
to
"Monetization of Federal debt—
can
be made, while some place many duplicate functions and fa¬
widen
the
gap
between
fiscal that is, conversion of Federal debt
Also, some tax savings
the eventual figure at $20,000,000 cilities.
intentions and
into
bank
deposits or Federal
a year.
might accrue from elimination of
fiscal
prac¬
Reserve
notes
is an improper
While both of these coal carry¬ unnecessary
facilities.
The dis¬
tices at the
procedure." It tends to depreciate
ing roads are regarded as highly posal of duplicate waterfront
expense of our
the value
of the people's
cur¬
Public
offering of $22,000,000 economic
efficient carriers, better utiliza¬ property should provide benefits
rency, and it creates a variety of
Corp.
414%
convertible health.
tion of facilities could bring about through sale and tax reductions. Philco
the going market

exceeds $100

'

■

Smith, Barney Group

—

Offers Philco Debs.

substantial

operating

economies.

For example, tidewater coal traf¬

fic
he

for the entire

moved

line.

system will

new

the Virginian main

over

Prevailing

grades

the

on

to tidewater are more
favorable than those on the Nor¬

Virginian

roads

It is believed the combined

Much depends on

15,

debentures

The

the future of

is

1984

convertible

are

Virginian's
yard at Roanoke which should
reduce yard expenses. Coal now

bituminous coal.
Domestic con¬ into Philco common stock at $33%
sumption
has
been
improving, a share on or before April 15,
and
thereafter at $40 per
while export demand continues at 1969
a
low level.
Continued growing share.
•-.
/

moving

demand

folk

Western.

&

trains

would

Also, eastbound
the

use

the N. & W. in 130
trains could be heading

over

to 140 car

toward the docks in 200
and

without

service
IV. .&
other

the

required

now

W.

this

and

trains

car

of

use

pusher
the

on

would

be

an¬

would

reaches

tidewater it

transferred

be

to

the

3V. & W. to be handled at its mod¬

facilities

ern

Handling

at

Point.

Lamberts

costs

will

reduced

be

issue will have the

The

utili¬

domestic

the

of of

benefit

mandatory annual sinking
soft coal.
of fund of $880,000 commencing in
high-grade coking coal are down. 1969 and designed to retire 60%
With steel output on the Conti¬ of the debentures before matur¬
In addition to the required
nent expected to expand, it is be¬ ity.
insures

ties

good movement
European reserves

lieved

saving.

After coal

.

u

from

demand

source

from this

will improve.

for coal

a

fund .the

sinking
make

company

may

sinking

fund

optional

an

plan provides payment annually of not more
for a tax-free exchange of stock than the required payment, also
The deben¬
on
the
basis of 0.55
shares of beginning in 1969.
The consolidation

for

W.

&

N.

share

each

Vir¬

of

tures will

be redeemable

the

for

Norfolk & West¬ sinking fund at 100% plus ac¬
crued interest.
They also are re¬
more
than 50 tons of coal
per ern will issue a 6%, $10 par cumu¬
deemable
at
the
minute and this will mean'addi¬ lative non-callable
option of the
preferred to be
tional savings.
company as a whole or in part at
exchanged
for the
outstanding
Better utilization of equipment Virginian 6%, $10 par issue. This any time at prices ranging from
also will be a factor. It is esti¬
104%% to 100%, plus accrued in¬

Since

the

equipment

dump

can

ginian

is

mated

37

needed

fewer

to

diesels

handle

the

volume of the two roads.

tion,

freight

the

car

will

be

combined
In addi¬

fleet

will

common.

the last of the railroad

of

one

consolidation

plans proposed and

has moved

it

rapidly

more

than

erators

dry

be

purchased at

a

50%

dis¬

count?
In

addition,
the

shareholders

most

efficient

own

news¬

print producers in the paper in¬
dustry. Since 1952, $75 million or
f!ome $72 a share has been
spent
on

plants and improvements.
According to management, two
mew
giant
paper
machines
at
new

the

company's

.

East

Millinocket

(Maine)

Mill "are today making
newsprint of excellent quality at
a

speed higher than that of most

machines
result the

in the
industry". As a
company's "break even"

point has been substantially

re¬

duced.

Northern

is

the

largest

domestic newsprint producer
sup¬
plying between one-quarter and
one-third

tion. 220
in the
are

of

leading U. S.

area

its

the nation's

produc¬

newspapers

east of the

Mississippi
principal customers. News¬

print is still the company's most
important product but increased
emphasis is being placed on the

production of higher profit margin
specialty papers. In 1958 sales of

specialty

papers

(after

jumped 25% and

deducting

dividends

the preferred stock which has
since been retired.
Without the

issue

the

for the decline.

reasons

First,

sion

deepened.

dropped
panded

the

sales

deep

ahead, this

adverse trend should be

than

more

offset by favorable developments.

Specifically,

the

Whitney

ests which control

inter¬

Great

York Herald

Tribune and the

tionally syndicated Sunday
plement
Parade
Magazine.
present

contracts

publications
stantial
ern's

in

the

produc¬

tion of pulp for newsprint. Since
1953 hardwoods have
increasingly

supplemented the traditional soft¬
woods in pulp
making. As a result
the company's extensive stands of
maples, birches, and poplars are
now

being

used

which

means

there should never, in the
future,
be
any
problem
of
obtaining

ample supplies of wood.
As

already noted, last year
slipped to 29 cents a

earnings




and

Government and

operations include re¬
development work,

and

the

development and

could

amounts

of

expire,

As

these

absorb
Great

sub¬

North¬

Per

share

should

re¬

probable. It should
pointed out that reported

is currently under¬
1956 depreciation
totalled $6.9 million and
to $8.1 million last
year. 1958
power

In

charges
rose

cash flow earnings reached
ord

$8.80

a

share.

a

rec¬

Since

capital
sharply in

expenditure will drop
1959
and
subsequent years, re¬
ported net income should show a
commensurate increase.

portant tendency ,to improve the
management of Federal fiscal af¬
fairs.
There' are always excuses

experie

c

a

a

s

member of the
not

Econ-

omists'

National

offered

'

arid

watch

and

to

Committee

on.

Monetary Policy whose office is
in New
York
City.
This non¬
profit, educational-research com¬
mittee
of
monetary economists
has managed to keep itself alive
as
a
surprisingly effective con¬
science

as

honest

E. Spahr

Walter

well

too

known

of

Heller

E.

utive
the

committee

is

undertaking

an

investigation of our monetarybanking policies and practices.

In the committee's April

monthly
newsletter. Dr. Spahr writes that

a

total of $4,-

Included

in

this

amount

$3,000,000

of

notes

$1,000,000 of

and

5%%?

were:

subordinated

5%

con¬

F.

1974.

Eberstadt

&

Co.

Dean

and

Witter & Co. negotiated the trans¬

actions.

Heller, a major commercial fi¬
nancing and factoring organiza¬

will

the net proceeds
from the private sale to expand
general funds, thereby
enabling
the company to increase its pres¬
use

ent volume of business.
pany

The

Annual

tains

offices

in

New

York

Atlanta, and has subsidiaries
Chicago and Los Angeles.

and

in

Stern Bros. Adds

timore

KANSAS

CITY,

been

Mo.—John

added to

of Stern Brothers &

Avenue,

E.

the staff

Co., 1009 Bal¬

members

Stock Exchanged

of

the

the

1958

stood

Feb.

at

4,

$285,On

1959.

000.

The

five

years,

"On

by

the

to

July 27, 1953, 56 members

of the Economists' National Com

mittee

¬

and since.

"There

are

who

citizens

thoughtful

many

believe that nothing

Monetary Policy issued
[a] statement to encourage the
United
States Treasury
to turn

profligate

from banks to

until disaster engulfs this Nation;

on

...

of

means

savers

as

a

proper

marketing Federal debt

and to institute

both

a

as an

redeemable

cur¬

aid to the Treas¬

in returning to

better type

a

financing and to give this Na¬
honest

an

and

sound

will

and it

"According to the Federal Re¬
Bulletin for January, 1959,

serve

and

33,

all

commercial

banks held $67,320,000,000 of U. S.

Government

obligations on Nov.
with $56,910,000,000 on Nov. 27, 1957, an
increase of $10,410,000,000.
"On Nov. 26, 1958,"all member
26,

1958,

Government

obligations

as

com¬

pared with $45,823,000,000 on Nov.

1957,
000,000.
On

of

increase

an

seems

current

the

that

cates
is

26,

banks

of

1958,

held

its

reasonably clear that
picture which indi¬
widespread belief

this

well grounded."

not

With Midland Inv.

(Special to The Financial Chronicle)

COLUMBUS, Ohio—Patrick W.
and Donald E. Wood have

Doyle

connected

become

Investors

with

Company,

52

Midland

East Gay

Street.

Joins Samuel &
j

Engler

(Special to The Financial Chronicle)

COLUMBUS, Ohio—George W.
Arensberg has joined the staff of
Samuel
and
Engler
Company,
16 East Broad

Street.

$9,505,-

Federal Re¬

ZANESVILLE,

securities

Biel

(bought

Lynch

(Special to The Financial Chronicle)

$25,578,000,000

Government

S.

in

spending

of Federal debt

With Merrill

Nov.

U.

foolish

compared

as

banks of the Federal Reserve Sys¬
tem held $55,328,000,000 of U. S.

27,

government

and

is nothing of importance in

there

Two

23

our

and monetization

Monetization of Federal Debt

pp.

stop

cur¬

is

now

Ohio —Howard

connected with Mer¬

outright, and $156,000,rill Lynch, Pierce, Fenner & Smith
000 held under repurchase agree¬
Incorporated, Masonic Temple
ment) as compared with $23,167,Building.
000,000
(bought
outright,
and
$151,000,000 under repurchase

Gustave Mahler
1957, an
(bought
Gustave Mahler, Vice-President
outright). In that year the Fed¬ of Schroder Rockefeller &
Co.,
eral
Reserve
System monetized Inc., passed away March 29 at the
Federal debt to the extent of $11,age of 54.
916,000,000.
And, to the degree
agreement)

on

Nov. 27,

increase of $2,411,000,000

(Special to The Financial Chronicle)

From

debt.

of the Board of
of the Federal Reserve
System for 1945, p. 1: 'Approxi¬
mately $95 billion, or 40%, of the
borrowing [of the Federal Gov¬
ernment between^June 30, 1940,
and the end of 1945], was raised
Report

Governors'

nine months.

debt
on

Federal

com¬

$19,253,022 and net income of $3,775,829, both record figures.
Heller
was
founded
in
1919,
headquarters in Chicago, main¬

of Federal

tizes

average length of the
debt, June 30, 1953, was
eight months. In No¬
vember, 1958, it was four years,

"Federal

830,611,241

serve

in 1958 had gross income of

versus
All our

tem.'

June 30, 1953, itlwas $256,863,000,-

an¬

of notes.

lack of fulfill¬
political Admin¬

promise
ment.

selling government securities
commercial banking sys¬
Such procedure has been a
most
potent
factor
in driving
down
the purchasing
power
of
our dollar 58% since 1939, in giv¬
ing us the highest index of whole¬
sale prices since 1749, and prob¬
ably
in
causing our relatively
heavy loss of Treasury gold in

the:

the placement with insti¬

tutional investors of

000,000

Co.

&

and

currency

proper

dog

gold between 1933 and 1934.
Spahr is the committee's Exec¬
Vice-President.
At present

Dr.

tion

Walter

sound

methods of government
financing cannot be ^undertaken
at this time.
The campaign com¬
mitments of the present Adminis¬
tration in 1952 and practices since
constitute a deplorable record of

rency."

Privately

to. why a return to an

of our istrations and Congresses since
monetary system commencing
early 1933 have been heavy and
with, the tinkering of the price
profligate spenders and mone¬

Sells Notes

ment.

instance, the value of
parried i.' or* rrfhfc

n

of

Rein has

For

fiscal

ury

On Dec. 31, 1958 shareholders
equity was $57.79 a share. How¬
ever, this figure is an understate¬

timberlands

our

monetary and
e

Walter E. Heller

appears

stated.

ing the last two decades in par¬
ticular, has shown a remarkable
degree of irresponsibility in fi¬
nancing itself in this manner; and
there is no evidence of any im¬

E.

has

r

r

"Our Federal Government, dur¬

ountry's

c

rency

tion,

earnings

h

chronicled

manu¬

facture

both series due

na¬

sup¬

output.

earning
hardwoods

room

Northern, vertible
junior subordinated notes,
recently gained control of the New

also be

of

search

nounces

production.

year

Great Northern pioneered in the

home laun¬

radios,
phono¬
air conditioners and

to

south

sharply as new and ex¬
newsprint mills in that

went into

area

Second,

in

newspapers

gory are such items

use

refrig¬

con¬

sumption of newsprint contracted
moderately as the business reces¬

S pa

Products

common

catalog
papers.

freezers,

and

oi; guided missiles and tor¬
pedoes, radar equipment, high fre¬
quency and microwave radio and
earned 61 cents a share in 1958)
from the record $5.44 earned in television communications equip¬
ment, electronic computers, tran¬
1956.
1958
profits also exclude
34 cents a share profit on the sale sistors, vacuum and cathode ray
tubes and high frequency diodes.
of timberlands.
There were two
preferred

bound to about $3.00 this
year and
an increased dividend later in the

as light weight
magazine grade

and

Industrial

amounted to 15% of the
company's
production. Included in this cate¬

paper and

Consumer

electric ranges.

Looking further

Great

"Government

and

equipment,

graphs,

on

of

one

share

Walter

Corp.

major categories: "Consumer

Industrial."

land

Philco

of

include television receivers,

The Security I Like Best

Dr.

Shortened Maturities
business

The

and its subsidiaries is divided into
Products"

Continued from page 2

past

years,

terest.

two

of the others.

any

For the

25

distortions.

economic

other

subordinated debentures due April

being made today
that additional purchases will not (April
16)
by an underwriting
be
necessary,
which will mean group headed by Smith, Barney
The debentures are priced
debt and interest charges will not & Co.
at 100% plus accrued interest.
be increased.
sufficient equipment so

have

will

that
to

Federal

Reserve

member

bank

5

Banks

reserves

monetizing Federal debt, the
sibilities
currency

of
are

expanding
-

add

Frederick L. Free

by

Frederick L. Free, of Frederick

pos¬

deposit

multiplicative %n

L.

Free

&

Co.,

New

York

passed away, April-JLO^.

City,

(1777)

The Commercial and Financial Chronicle

Number 5838

189

Volume

The

Indications of Current

latest week
week

Business Activity
Latest

Indicated Steel

April 19

gallons each)
Crude runs to stills—daily average
42

2,631,000

Shipments

-

6,267,435

7,212,920

118,199,000

8,007.000

8,207,000

7,214,000

28,405,000

28,060,000

27,461,000

25,124,000

April
April

*

2,184,000

1,802,COO
13,281,000

2,393,000
15,103,000

2,203,000

13,784,000

11,506,000

April

0,081,000

6,867,000

7,500,000

6,785,000

Stocks at refineries, bulk terminals, In transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at
April

r

213,448,000

212,954,000

207,015,000

214,754,000

18,616,000

17,883,000

18,985,000

16.912,000

Kerosene

(bbls.) at
at

(bbls.)

Distillate fuel oil

Residual fuel oil (bbls.)

-

9,603,000

9,317,385

5,782,323

5,512,369

5,215,417

Ago

products

(net

tons)—

January

i

February:
y-; .y Slab zinc smelter output all grades (tons of

2,000 pounds)
Shipments (tons of 2,000 pounds)
Stocks at end of period (tons)

78,694,000

76,672,000
55,917,000

30,616,000
54,835,000

74,545,000

58,710,000

603,755
576,443

595,930
578,825

$338,300,000
121,600,000

$372,100,000

$354,588,000

202,200,000

171,G49,000

$49,500
11,900

$52,900

12,000

12,600

24,000

24,500

$85,200

$90,000

34,330,000
1,667,000

32,840,000
1,557,000

32,471,000

5,526,814

•5,614,696

4,078,567

5,436,617
90,197
3,709,108

*5,532,755
*81,941
*3.792,667

4,041,122

$44,071

$44,415

33,751
14,223

33,768
14,155

$43,017
33,273

8,881

8,277

2,116

2,125

2,041

0,G07

7,930

10,320

10,647

9,739

3,563

3,464

3,404

4,004

4,504

2.753

2.679

141

*139

131

127

*106

116

90

105

COM¬

OF

Month

$49,200

8,767

DEPT.

—

189,189

8,645

—

SERIES

59.511

195,777

$85,500

NEW

(Million* of

70,941

200,461

24,100

INVENTORIES

BUSINESS

of

Jan.

dollars):

Manufacturing

——

-

——

516,247

54,750,000

68,354

76,481

71,174
66,490

y

Wholesale
Retail

AMERICAN RAILROADS:

OF

ASSOCIATION

steel

of

of

MERCE

April
April
April

;

at

Year

Month

AMERICAN ZINC INSTITUTE, INC.—Month of

7,193,220

7,128,585

April

Kerosene

of that date:]

Previous

Month

STEEL INSTITUTE:

Ingots and steel for castings produced
(net tons)—Month of February

1,285,000

April

(bbls.)

output (bbls.)
output (bbls.)
.Distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.)
Gasoiine

are as

Sieel

47.6

Month

April

„

of quotations,

cases

6,186,168

AMERICAN IRON AND

Ago

INSTITUTE:
oil and condensate output—dally average (bbls. of

Crude

v

in

or,

either for the

are

Latest

AMERICAN PETROLEUM
•»

that date,

Year

92.9

*2,641,000

on

production and other figures for th*

cover

Dates shown in first column

month available.

Ago

*93.3

§2,648,600

or

month ended
Month

Week

§93.5

April IP

—r

or

Previous

Week

AM) STEEL INSTITUTE:
operations (per cent capacifj)
Equivalent to—
■
;
.V'
Steel ingots and castings (net tons)
IRON

AMERICAN

following statistical tabulations

53

"
-

•

Revenue

ENGINEERING CONSTRUCTION
NEWS-RECORD: ;
construction

CIVIL
-»■

/.

590,133

freight loaded (number of cars)
April
freight received from connections (no. of cars)—April

Revenue

—

;

5G1.207

497,474

ENGINEERING

of

!

..Public construction^

.

State and

:.

municipal

$469,800,000

216,700,000

169,900,000

182,939,000

April

.»

—

construction

Private

119,700,000

144,500,000

144,800,000

142,432,000

72,200,000

25,100.000

40,507,000

—

—

206,500,000
263,300,000

.■

(U. S. BUREAU OF MINES):

COAL OUTPUT

/■ i-'.'-'-V

'

.

4
4

6,835,000

*7,920,000
373,000

7,715,000
394,000

6,283,000

308,000

April

4

117

141

118

134

—April 11

12,604,000

12,618,000

12,996,000

11,307,000

Pennsylvania anthracite (tons)

318,000

DEPARTMENT STORE SALEg INDEX—FEDERAL RESERVE

AVERAGE

SYSTEM—1947-49

100

(COMMERCIAL AND INDUSTRIAL)

FAILURES

(per gross ton)

Electrolytic
Domestic

(E. * M.

Lead

$66.41

30.450c

30.425c

30.025c

21.725c

11.000c

11.000c

11.500c

12.000c

—April
—April

10.800c

10.800c

11:300c

11.800C

11.500c

11.500c

11.500c

10.500c

April
April
——April

11.000c

11.000c

11.000c

24.700c

24.700c

24.700c

24.000c

—

—.

at—

Industrials Group—

AVERAGES:

Average corporate——

——

—

Aaa—
:

An.

A

Group

Utilities

Public

Group

INDEX

COMMODITY

MOODY'S

ASSOCIATION:

NATIONAL PAPEBBOARD
Orders received
Production

(tons)

AVERAGE

=

ACCOUNT

FOR

91.91

92.64

99.36

89.92

90.06

95.92

84.30

84.04

86.65

88.13

38.67

91.05

89.51

89.92

97.78

91.48

91.77

98.73

3.92

3.88

3.97

-Total purchases
Short sales —
Other sales

4.21

••'•••

sales

Total

transactions initiated

Other

Total

purchases
sales

Other sales

.——

—

sales

Total
Total

Total

sales

■

:

-

'

sales

Dollar value

EXCHANGE

y

;

4.14

3.62

sales

round-lot

•

-.

Short

sales

4.31

y" £

>

4.29

3.83

V, 391.0

888.0

394.7

306,512

369,514

335,027

295,358

318,345

315,717

279,404

89

95

96

433,180

474,212

111.52

110:79

110.56

110.01

-

-

LABOR— (1947-49

Commodity Group—
All commodities

—

100)L

—

Farm

3,291,090
572,550

3,020.690
552,410

2,613,450

1,480,690

432,080

320,550

2,500,500

2,121,280

1,168,910

3,052,910

2,553,360

1,489,460
408,520

43,500

582,480
60,000

584,430

580,510

465,700

385,050

646,230

623,010

525,700

446,750

61,700

OF

63.00

65. (i

63.9

:>

TO

PAYMENTS

INSTITUTE

—

LIFE

$264,500,000

$214,800,000

$255,400,000

88,800,000
10,000,000

benefits

Matured

endowments

—...

.

67,200,000

199,900,000

65,400,000
9,200,000
46,500,000
103,700,000
97,000,000

values

190,400,006

$536,600,000

$681,200,000

135,800,000

...

.v—.—...ui—

LIFE INSURANCE PURCHASES

INSURANCE

LIFE

OF

...

—

8,800,000

of

Jan.

,

$3,486

Ordinary
Industrial

Industrials

Banks

(200)

:—

IN U.

ASSN.—Month
vehicles

FACTURERS'
of

passenger

199,700

206,430

139,270

77,730

Number

of

473,433
551,163

4,972,290

4,509,510
801,340

3,959,365

2,398,101

631,350

3,383,545

2,027,393

4.014,895

2,487,373

4.54

3.69

4.71

2.53

2.48

3.08

3.41

4.50

cars

686,439

—-—

coaches

motor

—
—

579,415

430,095

57G,365
109,804

479,097

357,466

100,158

72,289

270

160

340

3.522

3,339

2.377

459.980

4,055,360
4.856,700

6.92

3.84

March:

of

motor trucks

79G.5G5

4.35

4.50

FACTORY SALES FROM
R.—AUTOMOBILE MANU¬

VEHICLE

number

3.26

3.43

—

...

—

of

935,835

(24)

3.80
3.95

& Tel.)

—

PLANTS

$31,125,000

4.60

(15)

Average

$5,513

$30,576,000

OF

:

(10)

$7,013

$32,193,000

of Mar.:

(125)
(25)

Insurance

MOTOR

—

STOCKS —Month

(not Incl. Amer. Trt.

Utilities

$4,724

-

YIELD

AVERAGE

WEIGHTED

COMMON

Railroads

1,590

DEPT.

(000's omitted)

31

of Jan.

464

2,132

3.28

-

MONEY IN CIRCULATION-TREASURY

Number

974,350

$3,454

499

779

508,951

1,180,780

$4,382

459

i

763,435

959,780

40,300,000

119,100,000

INSTITUTE

Month

—

940,450

1,159,480

834,050

4,182,140
5.016,190

Number

of

...

FORECLOSURES—
FEDERAL SAVINGS AN1) LOAN INSUR¬
ANCE
CORPORATION—Month of Dec—
ESTATE

REAL

NONFARM

(BUREAU OF MINES)—

PORTLAND CEMENT
Month

of

February:

(barrels)

Production

2,220,551

1,939,608

1,153,211

$108,293,867

$111,268,421

$99,429,957

$50,187,447

2,029,208

1,981,563

1,683,681

1,022,426

6,166

6,375

8,545

20,782

1,675,136
$81,199,968

$44,598,437

21
21
21
21

2,023,042

1,975,188

$99,449,928

$99,242,727

567,350

536,890

440,080

293,470

56L350

536,890

440~080

293~470

758,190

770,350

734,768

423,110

1,001,644

operating
operating

Total

Net railway

income

Net

11.853,370

$784,227,845

644,544,329
78,905,591

$693,038,346
599,522,796

OF

FINANCING
U.

S.

—

of

$982,801
142,671

$931,797

$665,816

128,249

124,674

507,744

474,026

325,019

164,640

154,097

112,507

IN NONFARM
LOAN BANK
(000'e omitted):

and loan associations
companies
——

companies
banks

trust

savings

•*10.000,000

19,240,000

HOME

Dec.

Insurance

and

60,442,244
9,067,596

36,160,074
22,000,000

39,793,694

lending

——

institutions

299,427

272,492

260,132

531,300

471,376

362,853

$2,628,583

—

~

$2,432,037

$1,851,001

11,104,450

19,326,230

—

748,920

18,586,090

$748,269,119
609,210,746

—

expenses

BOARD—Month

Miscellaneous

22,337 980

revenues

operating income before charges
after charges (estimated)

ESTATE

REAL

Individuals

21,413,570

50

74,185,789

Mutual

950,580

55

of February:

Total

Banks

22.749,420

10,854,000
36,383,000

CLASS I ROADS (AS¬
SOCIATION OF AMERICAN RKs)— Month

Savings

740,140

*18,604,000
*14,416,000

*34,838,000

54

....

RAILROAD EARNINGS

AREAS

924,410

14,125,000

16,710,000
14,785,000
36,605,000

—

(per cent)

Capacity used
2,223,820

-Mar. 21

47,200,000

:

—

1,030,530

STATES

UNITED

BUREAU

OF

EXPORTS
CENSUS

—

(000's omitted):

AND IMPORTS
Month of Dec.:
'
$1,513,600

119.5

119.5

119.3

119.6
99.4

April

90.9

90.9

90.5

April
April

—

115

$746,200,000

Death

Total

April

products

POLICYHOLDERS

U. S. DEPT. OF

-

91

129

,

1,253,400

.

'l

104

127

Railway

INSURANCE—BENEFIT

LIFE

As

Mar. 21

WHOLESALE PRICES, NEW SERIES

,

,-

of

March

Total

(SHARES):

—

COMMERCE
COMMISSION—
Employment at middle of
(1947-49—100)
—

INTERSTATE
Index

82

100

unadjusted

404,209

ON THE N. Y. STOCK
EXCHANGE COMMISSION

-—————

-

unadjusted-,.——

(average daily),

(average daily), seasonally adjusted—y

88

498,653

dealers—

;•

monthly),

(average

Sales

Sales

Policy dividends

sales—-

Oilier ^sales

FED¬

FEDERAL

4.34

21.7S8.840

-

SECOND

DISTRICT

Shipmcnts from mills (barrels)
Stocks (at end of month—barrels

Mar.
Mar.
Mar.
—Mar.

—

*EX)R ACCOUNT OF MEMBERS
'Tdal

2.581

Averager—J 00—Month "of February:
Sales

100

shares—Total sales

sales

SALES

STORE

RESERVE

ERAL

4.66

Mar. 21

—

DEPARTMENT

—

3.89

Mar. 21
Mar. 21
Mar. 21

——

EXCHANGE—-SECURITIES

r

.

Average^lOO—

seasonal
variation
Without seasonal adjustment
for

4.42

TOTAL ROUND-LOT STOCK SALES
.

3,754
>

March:

of

MOODY'S

Mar. 21
—►—Mar. 21

—

Month

4.86 ,.:

Round-lot sales by dealers—

Other

.y

——

SYSTEM—1917-19

SERVE

Adjusted

4.51

COMMISSION

—

—

Round-lot purchases by
Number of shares

l

4.45

•

357,953

Mar. 21
—Mar. 21
Mar. 21

—

Customers' other sales

of

—

15,030

SALES—FEDERAL RE¬

(000,000 omitted):

-Mar. 21

—

-

—

Customers' short sales

Short

credit

4.55

61,800

Odd-lot purchases by dealers (customers' sales)—
Number of orders—Customers' total sales

Dollar value

-

—

DEPARTMENT STOfctE

4.84

Mar. 21

shares

Number of

—

loans

accounts

Surrender

4.32

(customers' purchases)—t

dealers

by

credit

payment

4.01

•

ACCOUNT OF ODDSPECIALISTS ON N. Y. STOCK

AND

DEALERS

Number

Single

4.41

548,370

—«—_——

——————

EXCHANGE—SECUURITIES
Odd-lot

Nonlnstalment

loans—

;;

-

4.42

390.2

—i—.—Mar. 21
—,——Mar. 21
Mar. 21

——

—

2.76

#yy;-.;.-:4;02

STOCK TRANSACTIONS FOR ODD-LOT
LOT

loans

4.42

650,670

sales

Total

Personal

-

modernization

3.79

members—

—

-

sales

Other sales

'

———

——

—

purchases

Short

and

4.46

-Mar. 21

—
,

round-lot transactions for account of

Total

goods

consumer

4.23

2,637,930
3,210,480

.

sales

———

...

4.28

initiated off the floor-

Other sales

Total

RE¬

-

—

4.53

Mar. 21
j.———
——Mar. 21
———
Mar. 21

purchases

Short

credit

credit

4.82

•

—-———-—--.

—

Other transactions

FEDERAL

of Feb. 28:

as

consumer

4.29

-—Mar. 21
— Mar. 21

;—

Short

THE

OF

Disability payments
Annuity payments

the floor—

on

4.19

——Mar. 21
—Mar. 21

—

—

4.41,

: 4:43

-

MEM¬

OF

—

—

——

.

.

37,445

3,347,045

intermediate term credit

•'

4.44

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS
Transactions of specialists In stocks in which registered—

V

(net tons)

INSURANCE—Month of December:

.

April 10

lOO

TRANSACTIONS

ROUND-LOT

:

'V: ;

91.34

7P1'!} f
-April 4

period

102.13

89.37

REPORTER PRICE INDEX—

OIL, FAINT AND DRUG

93.97

88.40

April 4
April 4

——

;

(tons)

Percentage of activity
Unfilled orders (tons) at end of

1949

'

93.23

84.55

April 14

—

95.77

91.77

April 14
— April 14
.-—— April 14

—

Industrials Group

,

.

—_

_

__

_

Railroad

,

,

90.06

*

89.92

April 14
.JJ ,}r?
Apr 14
April 14
April 14

—

96 92

89.78

92,93

April 14
April 14

Ai'ril 14
April 14
—.——April 14

U. S. Government Bonds——

■s

.

RESERVE BANK OF NEW YORK—1917-49

—-

MOODY'S BOND YIELD DAILY

92.500c

85.50

89.64

——

—

102.250c

85.36

84.96

April 14

Group

102.625c

102.560c

AVERAGES:

DAILY

Group

Utilities

Public

1,501,000

10.000c

J

t

Railroad

;

tons)—

Automobile

$33.50

_————April

at-—-—

A1-""—Z————I"IIII——IIir.—III———I—-I——— April 14

■<

$66.49

$41.17

24.400c

Aaa

.

$66.41

$37.83

29.725c

Average corporate

y.

$66 41

$36.50

«ii,

31.425c

U. S. Government Bonds

.j,-.

Total

Service

PRICES

;

(net

short and

Other

31.225C

Louis) at
Aluminum (primary pig. 99.5% ) at
Straits tin (New York) at
——
BOND

:y

tons)

(net

coke

Charge

Zinc < East St.

MOODY'S

—

tons)

tons)

GOVERNORS

OF

mated

5.967c

,0.196c

■

————v-I-—
-April
————————-April

at

Louis)

(St.

iZinc (delivered)

■

6.196c

6.196c

7
7
7

—April
—April
April

—

(net

CONSUMER CREDIT OUTSTANDING—BOARD

342

337

at—

at

Export refinery
(New York)

Lead

*

Beehive

copper—

refinery

coke

Oven

QUOTATIONS):

J.

(net

Repairs

(per gross ton)

Scrap steel

METAL PRICES

'

Production

AGE

Pig iron

i

284

311

9

April

COMPOSITE PRICES:
Finished eteel (per lb.)

■\;l:y;v,,

lignite (net tons)

(BUREAU OF MINES)—M'onth of Feb.:,

Instalment

DUN &

—

INC

BRA1) STREET,

IRON

COKE

in millions

(in 000 kwlx.)

Electric output

\

and

anthracite

SERVE SYSTEM—REVISED SERIES—Esti¬

ELECTRIC INSTITUTE:

EDISON

v

=

March:

Pennsylvania

Oven coke stock at end of month

April
April

and lignlffc (tons)

Bituminous coal

(BUREAU OF MINES)—Month

Bituminous coal

April
April
April

143,600,000

Total U. S.
■

COAL OUTPUT

107.1

107.3

107.2

100.4

99.3

108.7

April

127.9

127.9

127.7

125.8

UNITED

110.5

100.4

Imports
STATES GROSS DEBT

$1,596,200
1,089,000

$1,638,600
1,141,100

DIRECT AND

GUARANTEED—(000's omitted):

foods—

—:

All commodities other than farm

•Revised
as

of Jan.

1,

figure.

-

1959, as

rIncludes-5-30,000

IPrime Western Zinc sold on
"




§Based on new annual capacity of 147,633,670 tons
tNumber of orders not reported since introduction of

barrels of foreign crude runs.

against/Jan. 1, 1958 basis of 140,742,570 tons.

Monthly Investment Plan.
pound.

one-half cent a

and foods

delivered basis at centers where freight from East St. Louis

exceeds

As

of

March 31
funds balance

General

Computed
.•Revised

/

annual

rate

$282,153,039
4,438,286

$285,215,969
5,274,249

$272,728,185
6,075,602

$277,714,753

Processed

Meats

$279,941,720
2.781%

$266,652,583

2.80151'
—

figure." ♦♦Deficit.

i

2.725%

54

The Commercial and Financial Chronicle

(1778)

.

.

.

Thursday, April 16, 1959

★ INDICATES

Now

Securities

Academy Life Insurance Co. (4/27)
filed 310,000 shares of common stock

in

(par 30

for each share held

of record April 24,

1959 (for a 20by amendment.
working capital. Office—405
Exchange National Bank Bldg., Denver, Colo. Under¬
writers— Boettcher & Co., Inc. and Bosworth, Sullivan
& Co., Inc., both of Denver, Colo. [

Price—To

standby).

day

be

supplied

additional

Adam Consolidated

Industries, Inc. (4/20-24)
$1,500,000 of convertible subordinated
Price—To be supplied by amend¬
ment. Proceeds—For general corporate purposes. Ofhce
—404 Fifth Ave., New York, N. Y. Underwriter—Dempsey-Tegeler & Co., St. Louis, Mo.
March

Advanced Research

Dec. 1 filed 400,000 shares of common stock (par five
cents). Price—$6 per share. Proceeds—For research and
development program; and for equipment and working
capital. Office — 4130 Howard Ave., Kensington, Md.
Underwriters — Wesley Zaugg & Co., Kensington, Md.,
and

Williams, Widmayer Inc., Washington, D. C.

Agricultural Insurance Co.
March 23 filed 132,000 shares of capital stock (par $10),
to be offered in exchange l'Or stock of Anchor Casualty

Co. at the rate of

Agricultural share for each Anchor
share (par $10) and 1 1/10 Agricultural shares

common

each

for

share

one

of

Anchor

$1.75

cumulative

convertible

preferred stock
(par $10).
Office — 215 Washington
Street, Watertown, N. Y. Underwriter—None.
•

Aida

(4/22)

Proceeds—For general corporate purposes and working

capital. Business — Manufacture, sale and distribution
of novelty items, toys and costume jewelry.
Office —
146 West 28th St., New York, N. Y.
Underwriter —
Darius Inc., New York.
Airtek

—

2222

South

Underwrite*—S. D.

Figueroa Street, Los Angeles, Calif.
Fuller & Co., New York.

Alabama Power Co,

(4/30)

—

Underwriter—To

bidding.

Probable

be

determined

by competitive

bidders:

Halsey, Stuart & Co. Inc.;
Lehman Brothers; Eastman
Dillon, Union Securities &
Co.; Equitable Securities Corp. and Drexel & Co.
(jointly); Harriman Ripley & Co., Inc. and Goldman,
Sachs & Co. (jointly); Morgan
Stanley & Co.; Blyth &
Co., Inc. and Kidder, Peaboriy & Co. (jointly); The First
Boston Corp.' Bids—Expected to be received
up to 11
a. m. (EDT) on Apr* 30.
Alaska Juneau Gold
29 filed 640,660

Mining Co.
outstanding shares of common
stock, of which 300,000 shares are to be offered cur¬
rently and the remaining 340,660 shares in the future.
Dec.

American Buyers Credit Co.

be supplied
by amendment.
Proceeds—To
selling stockholders. Office—6327 Santa Monica Boule¬
vard, Los Angeles, Calif.
Underwriter—Lester, Ryons
& Co., Los Angeles, Calif. No
public offering expected.

Alaska Mines & Metals Inc.
Feb. 25 filed 1,431,200 shares of common
stock
of which 1,000,000 shares are to be
offered
are

(par $1),
publicly and
to be reserved for sale to the holders

of 6% debentures due 1962

issued-by DeCoursey-Brewis

Minerals Ltd., the company's parent
(payment for the
by such debenture holders may be made
by
delivery of debentures at par plus interest with premium

shares
for

Canadian exchange

rate).

Purchasers will receive
common stock purchase
warrants on all shares purchased
for cash or for the 6% debentures of
the parent at the
rate of one for each five shares
purchased.

Price—$1.25

per share. Proceeds—For general corporate
purposes and

working

capital. Office—423 Fourth Ave.,
Anchorage,
Alaska. Underwriter—To be named
by amendment.
_

Allied

Publishers, Inc., Portland, Ore.
22,000 shares of

Stock

(par $1). Price—$8.50 per share.
general corporate purposes. Office—665

common

Proceeds—For

S. Ankeny St.
Portland 14. Ore. Underwriter—First Pacific
Investment
Corp., Portland, Ore.

Alscope Explorations Ltd.
26

filed

1,000,000

which 700,000 shares

are

to

be

capital

offered

stock, of
publicly in the

Price—Re¬
lated to the then current market
price on the Canadian
Stock Exchange (31 cents
per share on March 16). Pro¬
ceeds—For properties,
drilling costs, working capital and
general corporate purposes.
Office
303 Alexandra
—

Bldg., Edmonton, Canada. Underwriter—None
States; Forget & Forget in
Montreal, Canada.

in United

-Ar American Agricultural Chemical Co.

(5/4-8)
April 10 filed 216,093 shares of common
stock (follow¬
ing three-for-one stock split
expected to
become

Price—To be related

to

ef¬

current

offering. Proceeds—For capital ex¬
Off«ce—100 Church
Street, New York N. Y
Underwriter—Hayden, Stone & Co., New York.

penditures.




"

Nov. 24 filed 300,000 shares of 20-cent cumulative con/ertible preferred stock (par one
cent) and 50,000 out¬
standing shares of common .stock (par one cent). The
jreferred shares are to be offered for public sale for the

ler writer—None.

American Growth

Fund, Inc., Denver, Colo. <
1,000,000 shares of capital stock (par

v

■

writer4^Bruno-Lencher, Inc./Pitt$burgh'/Pa» r
/"Associated Bowling Centers^Jiic,//::Y^

of the company and
/the-common shares will
offered for tile account of a selling stockholder.: Price"

account
out

r'

oe

Price—At market.
Proceeds—For investment
V;-r-To ^ supplied; by amendment: Prpceeds-^To acQuirie
Security Building, /Denver;/ Colo. Under* / new Bowling centers and increase working capital (part
writer—American Growth Fund Sponsors, Inc., 800 Se-: ;> *o be used in
defraying cost of acquisition of stock of
owner of a Brooklyn
•urity Bldg., Denver 2, Colo.
(N.Y.) bowling center.
Office—
135 " Front St., N. Y.
e American
Underwriter
To be named by
Independent Reinsurance Co. (4 24)
March 25 filed 514,500 shares of common stock, to be //aihendnteiftt;. bffering^-Expbcted Ih *w0;
•ent).

Office—800

offered

for

subscription by

rate

1.4

new

of

shares

stockholders at theG

common

each

lor

share

one

held

on

ir Associated Women Investors, Inc/■ -j
(letter of notification) 25,900 shares pi-common

or

; April. 6

about

April 24, 1959. Price—To be supplied by amend¬
ment. Proceeds—To increase capital and surplus. Office
—307 S. Orange Avenue, Orlando, Fla. Underwriters—

stock
ment
—P.

Francis I. du Pont & Co., Lynchburg, Va., and Goodbody
&

American
Feb.

24

mon

stock

Investors

(letter
(par

Proceeds—For
—

513

March 31 filed

Syndicate, Inc.'-'

of notification) 100,000 shares of com¬
10 cents).
Price—50 cents per share.

operation of

International

Trade

apartment hotel.

an

Office

Mart, New Orleans 12, La.
Co., Inc., New Orleans,

Underwriter—Assets Investment

American M. A. R. C., Inc. (5/4-8)
April ,13 filed 400,000 shares of common stock (par 50
cents).
Price—To be supplied by amendment.
Pro¬
ceeds—For expansion and working capital. Underwriters
—Auchincloss, Parker & Redpath, New York; and Wil¬

Johnson & Higgins, San

son,

American Mutual

Francisco, Calil'.

Investment Co.,

Inc.

notes,

second trust notes and construction loans.
Company may develop shopping menters and build or
ourchas^ office buildings. Office—900 Woodward
Bldg.,

Washington, D. C. Underwriter—None. Sheldon Maga¬
zine, 1201 Highland Drive, Silver Spring, Md., is Presiient.

American

Research

(4/20-24)
March 31 filed

Price—To

&

Development

Corp.

common

stock

(par $1).

American Telemail

Service, Inc.
17, 1958, filed 375,000 shares of common stock (par
$1). Price—$4 per share. Proceeds—To purchase equip¬
ment and supplies and for working
capital and other
corporate purposes. Office—Salt Lake City, Utah. Un¬
Feb.

derwriter—Amos

Treat
&
Co., Inc., of New York.
Name—Formerly United States Telemail

Service, Inc.
Amican Petroleum & Natural Gas
Corp. Ltd.
March 23 filed 745,000 shares of capital stock
(no par),
of which 500,000 shares are to be sold for the account
of the company, and
245,000 shares by the holders there¬
of.

Price—30

cents per share.
Proceeds—For explora¬
development program.
Office
2100 Scarth
Street, Regina, Saskatchewan, Canada.
Underwriter—
Cumberland Securities, Ltd., Regina, Canada.
and

Ampex Corp.
shares of common stock (par $1)
being offered for subscription by common stockholders
the

rate

loans and

to

provide equipment
for development and production of propellant rockets.
Office—Alexandria, Va. Underwriter—Johnston, Lemon
& Co., Washington, D. C.
•

Atlas

Feb.

investment Co.;/

3 filed

50,000 shares of

common

voting stock

(par

$10).
Price — $25 per share.
Proceeds —To purchase
additional contribution certificates of Great Basin Insur¬
ance
Co./ Office—704 Virginia Street,

Reno, Nev;/Un¬

Statement

effective April 7

v

Australian Grazing & Pastoral Co., Ltd.
'
Jan. 13 filed 4,000,000 shares of common stock.
At

Price—

(56V4

cents per share). Proceeds—To purchase
improvements: to buy additional ranch in
Queensland, Australia; and for other corporate purposes.
par

cattle;

for

Office—1301 Avenue

L, Cisco, Tex., Underwriter—None.

Robert Kamon is President.

•

t!','/-'

•

Automatic Canteen Co. of America
March 2 filed 292,426 shares of common

stock, of which,
126,072 shares to A.M.I.

company proposes to issue
for the latter's property and

assets, and the re¬
maining 166,354 shares are to be issued upon the exercise
stock options. Underwriter—None. Statement effec¬

of

tive

March

31.

Banners

Fidelity Life

Insurance

Co.

Feb.

28,1958, filed 258,740 shares of common stock (par
$1), of which 125,000 shares are to be offered publicly
and 133,740 shares to employees pursuant to stock
pur¬
chase options. Price—To public, $6 per share. Proceeds—
For expansion and other corporate
purposes. Office—AtUnderwriter—None

anta. G*

Bankers Preferred Life Insurance Co.
Jan. 30 (letter of notiifcation) 100,000 shares of common
stock
(par $1.60). Price—$3 per share.
Proceeds—For

incidental to operation of an insurance com¬
Office—Suite 619, E. & C. Bldg., Denver, Colo.
Underwriter—Ringsby Underwriters, Inc., Denver 2,

expenses
pany.

Colo.

—

March 12 filed 204,191
at

—

reduee¥hort-term bank

Inc.

100,000 shares of

be

in

/publicly arid 10,000
share^/fa* employees uhdeyplan'.
Price[To be supplied by amendment. Proceeds
To

the

*

supplied by amendment.
Proceeds—For
working capital. Office—200 Berkeley St., Boston. Mass.
Underwriter—Lee Higginson Corp., New York.

Change

/

derwriter—kNone/
- ^

Dec. 17, 1957, filed 490,000 shares of capital stock. Price
—$10.20 per share. Proceeds — For investment in first
crust

(par $2). Price—$3 per share,; Proceeds—For payoh/mortgages and payment on, properties. Address
Q{ Box". 1003, Tampa, Fla.' - Underwriter—None.

Atlantic Research Corp.. (4/20-24)
K
r
110,000 shares o^' common stock, of which
100,000 shares are tb be offered

Co., New York, N. Y.

of

one

new

share

for

each

10

shares

held

April 2; rights to expire on April 17. Price—$52.50
per share. Proceeds—For working capital. Underwriters
—Blyth & Co., Inc., San Francisco and New York; and
Irving Lundborg & Co., San Francisco, Calif.

Bargain City, U. S. A., Inc. (4/24-27)
29 filed 5,000,000 shares of common stock
(no par),
later reduced to 300,000 shares (par $1).
Price—$9 per
share. Proceeds—For expansion and
acquisition or leas¬
ing of new sites. Office—2210 Walnut Street, Philadel¬
Dec.

phia, Pa.

on

shares "of

United States, and 300,000 shares in Canada.

fective May 5, 1959)..
market at time of

under

filed

>■/; ■

••/;,:// / :?■,.*.<//■>•> ••
Armstrong Uranium Corp.
Jan. 16 (letter of notification) 3,000,000 shares of 'com*
mon stock - (par- ohe 0efit)l Priced ^
10 • cefits per share.
Proceeds—For mining expenses. Office—c/o
Hepburn T.
Armstrong, Round Up Heights, Cheyenne, Wyo; Under-

agreements with various policy holders
Buyers Life Insurance Co. and American
Life Assurance Co. (both of Phoenix) permitting them
;o purchase
stock at $1.25 per share. Sales personnel
aave been
given the right to purchase stock at $1.25
oer share up to the amount of commission they receive
>n stock sales made by them.]
Proceeds—For the opeKa.ion of other branch offices, both in Arizona and in other
dates. Office—2001 East Roosevelt, Phoenix, Ariz.
Un*

tion

Nov. 28 (letter of
notification)

March

York.

American

17

Uridemriters-/~Snowv Sweeney
Co./ Inc^and, A. C. Allyn & Co., Inc., both of New

&

shares of common stock, of which
4,545,455 shares of this stock are to be offered for public
jale at $1.75 per share. [Shares have been issued or are

Price—To

431,200 shares

Arkansas Western Gas Co. (5/1)
April 6 filed $1,000,000 of sinking fund debentures due
1984
(convertible until April 1, 1969). ; Price—To be
supplied by amendment. Proceeds—For property addi¬
tions and
[improvements

Nov. 13 filed 5,000,000

Louisiana.

April 3 filed $20,000,000 of first mortgage bonds due
1989.
Proceeds
For property additions and
improve¬
ments.

May 5. '.

Co., Inc. (4/20-24)
shares of common stock (no par).
Price —To be supplied by amendment.
Proceeds —To
selling stockholders.
Underwriter—Goldman, Sachs &
Co., New York.

slov.

Corp. and W. C. Langley & Co. (jointly). Bids—
to be received up to 11:30 a.m. (EDT) on

Expected

American Biltrite Rubber

Dynamics,

Inc. (4/27-5/1)
March 27 filed 150,000 shares of common stock (no
par).
Price—$8 per share.
Proceeds—For additional working
capital and for repayment of bank and Other loans. Of¬
fice

Boston

March 31 filed 325,000

issuable

ISSUE

—

Industries, Inc.

March 16 (letter of notification) 50,000 shares of cumula¬
tive preferred stock (par 75 cents). Price—$1 per share.

•

100,000,000 shares of capital stock. PriceProceeds—To selling stockholders.
Office—Magsaysay Building, San Luis, Ermita, Manila,
Republic of Philippines. Underwriter — Gaberjnan &
Hagedorn, Inc., Manila. Republic of Philippines.
Two cents per share.

In

Associates, Inc.

REVISED

petitive bidding. Probable bidders: Lehmar. Brothers;
Blyth & Co., Inc., and Smith, Barney & Co. (jointly);
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); White. Weld & Co.; The First

Nov. 24 filed

filed

30

debentures, due 1974.

PREVIOUS

ITEMS

•

American Asiatic Oil Corp.

,

March 31

cents) to be offered for subscription by common stock¬
holders on the basis of 0.525 shares of additional stock

Proceeds—For

Registration

ADDITIONS

SINCE

•

Anken Chemical & Film Corp. (4/20-24)
March 27 filed 225,000 shares of common
stock, of which
112,500 shares are to be sold for the account of selling

stockholders, and 112,500 shares for the account of the
Price — To be supplied by amendment.
Pro¬
ceeds—To construct and
equip plant space adjoining

company.

present facilities of the company in

derwriters—R.

W, Pressprich

&

Newton, N. J.

Co.

and

Riter

&

both of New York.

Un¬

Co.,

Basic
March

cents).

Arkansas Power & Light Co. (5/5)
26 filed 75,000 shares of
cumulative preferred
stock (par $100). Proceeds—For
property additions and

improvements.

Underwriter-^-To be determined by

com-

Inc.

r;

filed

444,246 shares of common stock (par 10
Price—At prevailing market price, in the Over-

the-Counter Market.

Proceeds—To selling stockholders.

Underwriter—None.
•

-

Billups Western Petroleum Co.

['•

o

(5/15)

April
due
to

1 filed $5,000,000 of 6% participating -debentures
May 1, 1984 and 1,000,000 shares of common stock

be

offered in units of $10 of debentures and two
shares of stock which will not be transferable
separately
until Nov. 14, 1959.
The company is also
50,000 shares of
which

March

5

Underwriter—Bear, Stearns & Co., New York.
Atomics

will

be

common

offered

registering
stock, not included in the units,
its employees. Price—In the

to

neighborhood of $22 per share. Proceeds—To be used in
acquisition of substantially all the assets of 39
corpo¬
rations and a partnership engaged in the
operation of
195
gasoline stations in Mississippi, Texas,

Louisiana,

<

Missouri,

Alabama,

The Commercial and Financial Chronicle

Number 5838

189

Volume

Tennessee.:; Underwriter—The
Savannah, Ga.

and

Johnson, Lane, Space Corp.,
'

Philadelphia, Pa.

Inc.,

Biophysical Electronics,

+

(5/1)

(letter of notification) 60,000 shares of common
stock (par 10 cents). Price—$2.50 per share.
Proceeds
—For general corporate purposes.
Underwriter—R. L.
Scheinman & Co., New York.
'

Anril 1

Inc., Huntingdon Valley, Pa.
(letter of notification) 90,000 shares of com¬
mon stock (par 25 cents).
Price—$2 per share. Proceeds
—For expansion; to repay bank loans and for working
Boonshaft & Fuchs,

March 20

capital. Office—994 Byberry Rd., Huntingdon Valley,
Underwriter—Woodcock, Hess, Moyer & Co., Inc.,
Philadelphia, Pa.

Pa.

^ Border Farms, Inc.
"
April 8 (letter of notification) 2~500 shares of common
stock (no par) and 5,000 shares of 6% cumulative pre¬
ferred stock.
Price—$10 per share. Proceeds—For op¬

Address

erating expenses.!

Underwriter—None.

Mex.

N.

P. O. Box 747, Portales,

—-

;•

.•

Bridgehampton Road; Races Corp./
Oct. 23 (letter of notification) 15,000 shares of commoD
stock (par $1) to be offered for subscription by stock¬

holders of record Nov.

V

Dec.

of claims

convertible

for

each

discharged; rights to expire about two weeks
after mailing of offer. Price—$4 p"** share. Proceeds—
To

1,000,000 shares are owned by Wilshire Oil Co. of Texas
stockholders and 150,000 shares are issuable upon exer¬
of share purchase warrants, exercisable on or be¬

cise

fore

Dec.

31, 1960 at $5 per share,
Avenue, S. W., Calgary, Canada.
Brockton

Edison

Co.

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Stone & Webster
Securities

Corp.; Kuhn, Loeb & Co., Salomon Bros. &
Hutzler and Wood, Struthers & Co. (jointly); Kidder,
Peabody & Co., White, Weld & Co^ and Shields & Co.

Inc.-——Common

stockholders—underwritten
Co.

and

(R.

Film

Chemical &

Bargain City, U. S. A——

.*4'

-

Stearns

•

.

\V! 'y.rJi;

Inc.

Coastal States Life

I.

(The. Johnson.

Lane,

shares

74,728

Space Corp.)

:-..Cooper' Tire & Rubber Co

Dalton

.

.

•

/___.Debentures

(Bids 11:30

.

'.Paul

.

.

Electro

Kimball &

C.

Networks,

$500,000

Inc.—:—

(Charles

Plohn

(S.

Coil

.

\

Inc.) $1,000,000

(Bids

Common

Genisco, Inc.

;

Ryons

Tuna

Investment

3,400

Corp

(Aetna Securities

Maine

Plohn

Wometco Enterprises,

.

$300,000

..Common

Corp.)

State
(Bids

11:00

EST)

a.m.

.Debenture#

(Eastman

Union Securities & Co.)

Dillon,

$1,877,700

of

San

Diego

(Offering to stockholders—underwritten by Dean Witter
& Co.; Blyth & Co., Inc.; William R. Staats & Co;;
Dillon,

Eastman

Dewar

Frito

Co.

(White, Weld &

Securities

Union

&

Washington Gas Light Co

Common

—

Loral

and

Co.

&

April 28
Electronics

(Kidder,

Common
Co. and Dittmar & Co.) 200.000 shares

(Paine, Webber, Jackson & Curtis and Stone & Webster
Securities Corp.) 800,000 shares

;;;

*

Common

Lockwood, Kessler & Bartlett, Inc.
du Pont & Co.)

(Francis I.

(Bids

a.m.

P.

Aida

%

(Wednesday)

April 22

Inc.)-$50,000

(Darius,

Edison
(Bids

Co
11

—

EST)

a.m.

———Preferred
\ J

:;,.(Offering to stockholders—underwritten
'Si'f'':.Sutro Bros. & Co.) 113,079 units
"

Corp.

Dynacolor
:

EDT)

•

.Common
50,484 shares

Co. and John H. Kaplan & Co.)

Long, Island Trust Co._l^±
..Common
(Offering' to stockholders—undervriten by A. M. Kidder & Co.)

a.m.

i

J I

$20,000,000

,

Co.)

140,000

Corp

1

shares

(Offering

——

ta

&

Southern

Italy

Co.)

1,500,000 shares

Development

(Paine,

Moog

Dickson

Units

Niguel Corp

Laguna

Webber, Jackson & Curtis)

Debentures

'

(Kidder,
-

Peabody & Co.
". Simmons)




Common

and Blunt Ellis &

130,000 shares

Power

Common

Co

be

invited)

250,000

shares

(Wednesday)
Bonds

Co

(Thursday)
Common

(Monday)
Bonds

West Penn Power Co
noon

$14,000,000

EST)

(Tuesday)

Consolidated Edison Co. of New York,

Inc.—Bonds

(Bids 11 a.m. EDT) $50,000,000 to $60,000,000

(Thursday)

May 28

.—Common
$200,000

Bends

Generating Co

(Bids to be invited) $25,000,000

(Friday)

Commerce, Washington, D. C

Common

(Offering to stockholders) $300,000

June 2

Public Service Electric & Gas Co
(Bids to be invited)

*

(Tuasday)
Debentures

$30,000,000 to $40,000,000

Common

Common

M.jA. R, C., Inc
Parker

&

Redpath

and

Wilson,

Crown Self-Service Stores,
(Charles Plohn

&

Johnson

Seaboard Plywood & Lumber

June 23

Bonds

Northern Illinois

(Tuesday)
Bonds

Gas Co

(Bids to be Invited) $20,000,000 '

$125,000

Common

June 25

$1,250,000

Corp

(Tuesday)

(Bids to be invited) $10,000,000

&

.Common

Inc
Co.)

June 16

United Gas Improvement Co

Higgins) 400,000 shares
Inc.)

Conunea

(Bids to be received) $20,000,000 to $25,000,000

(Monday)

American

Common

Mississippi Power
(Bids

to

(Thursday)

Bends

Co
be invited)

$5,000,000

(Peter Morgan & Co.) $450,000

$9,000,000

1

Servocontrols, Inc

May 4

(Best Securities,

(Offering to stockholders—underwritten by R. S.
& Co.. Inc.) $3,000,000

to

Virginia Electric & Power Co
;

]

Debentures

Gotham, Inc

Preferred

May 29

American Agricultural Chemical Co
(Hayden, Stone & Co.) 216,093 shares
(Auchincloss,

$2,000,000

(Offering to stockholders—no underwriting) 821,256 shares

Bank of

Continental Tobacco Co., Inc

(Thursday)

(April 23
Chadboum

Bonds

Fund

& Co.) $30,000,000

(Morgan Stanley

EDT)

Utilities

Southern Electric

(Friday)

j I
$1,000,000
Biophysical Electronics, Inc

|

ajn.

Consolidated Natural Gas Co

Common

\___

(R. L. Scheinman & Co.)

$3,500,000

(Bids 11 a.m. EDT) $6,000,000

(Dunne & Co.) $625,000

May

Bonds
EDT)

-

(Snow, Sweeney & Co., Inc. and A. C. Allyn & Co., Inc.)

> $1,403,720

Corp.
———Common
stockholders—underwritten by Bear, -• Stearns

Interstate

Common
&

(Tuosday)

May 26

Corpii

Chemical
!

EDT)

$4,000,000

a.m.

11

(Bids

"

Penn-Texas

States

(Thursday)

Arkansas Western Gas Co.__

300,000 shares

by

Co.)

Co

May 25
Debentures

&

Electric Co

(Bids

>

Bond*

(William R. Staats

Puritan

^—Common

of-America

Corp.

(Bear, Stearns &

f

Barth & Co.)

(J.

.

Lithium

Permanent Filter

11

-Preferred

May 21
Bonds

$20,000,000

Co

(Bids

Debentures

.1—

:_

Power

(Lee-Higginson; Corp.) $1,600,000

-

Greater All American Markets, Inc

-

Alabama

$2,000,000

Common & Warrants
by.

Co_—__r_—

B. S. F.

lAprll 30

'

Electric

(Bids

Blair & Co., Inc.) $947,200

Preferred

Industries, Inc.—

Brockton

J

Paso

Brooks

W.

stockholders—underwritten

to

(Monday)

Peabody

May 20

Common

Di-Noc Chemical Arts, Inc
(Offering

El

Debentures
$5,000,000

Space Corp.)

Power Co..

(Bids 11

(Wednesday)

April 29

Jf

150,000 shares

11

(Friday)

May 19
Paso

Gulf

Public Service Co. of Colorado

■:*'.

Interstate

Roland <& Stone)

stockholders—underwritten by
& Co., Inc.) 100,000 shares

to

Common1

(The Johnson, Lane,

Common

Corp
and Model,
250,000 shares

Telephone & Electronics Corp.—Common

General

(Tuesday)

Maine Fidelity Life Insurance Co
(Offering

(Thursday)

May 15

Preferred

Peabody & Co.

105,000 shares

Co.)

14

Billups Western Petroleum Co

El

(Offering to stockholders—underwritten by The First Boston
Corp. and Johnston, Lemon & Co.) $10,000,000

First National Trust & Savings Bank

EDT) $15,000,000

(Offering to stockholders)' 442,300 shares

(Kidder,

$1,500,000

—.Bonds i

:

May

Preferred

Power Co..

(White, Weld & Co.)

—Common

(Wednesday)

ajn.

May 18
Common

Inc..

Southern Nevada

$5,000,000

Fed-Mart Corp.

;

Foil

Textron,
(Blair

&

Debentures

Inc.

Co.,

Inc.;

G.

H. Walker & Co. and
Co.) $30,000,000

&

Sclaeick,

Richter

(■

$16,000,000

Marine Midland Corp

Netherlands Securities Co., Inc.)

and

(Offering to stockholders—underwritten by Laird
& Co., Corp.) 70,196 shares

Co

Telephone

Co.

1

Bonds

.

shares

Common

EDT)

a.m.

Co

.Common

75,000

Corp.)

11:30

(Bids 11

$875,000

Republic

Diamond

Idaho Power

Common

Corp..

shares

325,000

Co

Higginson

Electronics

(Charles Plohn &

(Tuesday)

April 21

Service

:(Lee

Precon

-

Inc.

*(Lee Higginson

Public

Debentures

Common

May 13

Common,

Pittsburgh Standard Conduit Co

Common

Co.)

&

$1,237,500

Inc.; Merrilly Lynch, Pierce, Fenner &
Smith, Inc.; and Kidder, Peabody & Co.) 50,000 shares

"..Common

Corp.___._i__

(Charles

Johnson)

&

(Tuesday)

Electric Co.

(Bids

Sulzberger,

(A. G. Becker & Co.

.

Reon Resistor

and Roman

$5,500,000

(Offering to stockholders—underwritten by Stone & Webster
Securities Corp.) 76,494 shares

...Common

;

.

$175,000

Co.)

&

Corp.

..Bonds

PST)

a.m.

Southwestern Electric Power Co

Jeuks, Kirklahd* & Co. and Woodcocks
Hess, Moyer & Co/, Inc. ) $125,000 $ *. i
' - '

(Hallowell>,

shares

._

Carter

(Gates,

El Paso

Common

Corp. of Florida

9

(Offering to stockholders—may be underwritten by

shares

150,000

$300,000

Eastman Dillon, Union Securities & Co.) $10,038,700

Krupp Manufacturing Co.__

Common
Co.)

&

Inc.)

Co.,

<*

Preferred & Common

May 12

Common
&

Co.)

Central Illinois Light Co

.Preferred

;;(Bache & Co.) $33,577,000

&—Debentures.

—

(Lester,

.

Edden

Earl

and

Southern Nevada Power Co

Common

Corp.

.(H. M. Byllesby & Co., Inc.) 225,000 shares

■

International

'

(Monday)

(J. Barth & Co.) $6,300,000

Glickman Corp.

(Offering-to stockholders—underwritten by McDonald & Co.
and Kidder, Peabody & Co.) $2,135,700

T

Equip. Trust CtfS;

Magma Power Co

.

.Common

-

(Wednesday)

Common

Bros,

150,000 shares

Corp.

(Blair

,

Preferred

Winders, Inc
(Bertner

Common

Fuller & Co.)

D,

56

EDT) $7,500,000

a.m.

May 11

Common

Dorsey Corp.
V7.y;C
: (Blair & Co., Ino.) $1,250,000

$270,000

Co.)

&

Corp.—J

Steel

Florida

Co.)

page

(Tuesday)

May 6

310,000 shares

Dorsey Corp.

..—Debentures'

Finance, Inc.—~

on

(Monday)

(H. M. Byllesby & Co.,

(Paine, Webber, Jackson & Curtis and Prescott,
Shepard & Co.,- Inc.) $3,500,000
:

^

Price—$1 per share. Proceeds—
Address—P. O. Box 1849, 3720 B.
Continued

Pont,

du

*

/

(par 25 cents).

For working capital.

Great Northern Ry

Dynamics, Inc

••

DeJur-Amsco

__—Common

Insurance Co

V

DeJur-Amsco

„ ^

Chemical Milling^ International Corp..—Common
.(Aetna Securities Corp.) $300,000
<\

Nov. 17 (letter of notification) 300,000 shares of common
stock

Common

-

and Bosworth, Sullivan & Co., Inc.)

Airtek

..Bonds

(Bids- noon EST) $5,000,000

by Francis

(Offering to stockholders—underwritten by Boettcher & Co.,

,

•

/. -wv

Co., New York.

Cemex of Arizona, Inc.

May 5

Academy Life Insurance Co

225,000 shares

Conine

derwriter—Sutro Bros. &

Arkansas Power & Light Co

$4,500,000

Co.)

&

April 27

Corp. ..^.....i^-.Common
JJohnston,\Lemon & Co.). 110,000 shares,...,
;

Central Louisiana Electric

warrant, for subscription by

one

stockholders of record April 21, 1959, at the rate of one
unit for each three shares then held; rights to expire on

(Bids to be Invited) $4,500,000

Atlantic v Research

•*"

share of stock and

one

Goodbody & Co.) 514,500 shares

Com.

——Common

Corp.

and Riter & Co.)

W. Pressprich & Co.

(4/22)
*
113,079 shares of capital stock (par $1)
and warrants for the purchase of an additional 113,079
shares, to be offered in units, each unit consisting of

(Friday)

American Independent Reinsurance Co...Common
to

F. Co.

CALENDAR

ISSUE

(Offering

S.

March 26 filed

May 6 (the warrants carry an initial exercise price of
$20). Price—To be supplied by amendment. Proceeds^For working capital and other corporate purposes. Un¬

(4/22)

March 6 filed 40,000 shares of preferred stock (par $50).
reduce short-term bank
loans.
Under¬

(Bear,

Anken

Office—630 Eighth

Proceeds—To

$1,500,000

Brookridge Development Corp.
19 (letter of notification) $200,000 of 6% 15-year
debentures.
Price—At par ($500 per unit).
Proceeds—For expansion and working capital. Offiee—
901 Seneca Ave., Brooklyn 27, N. Y.
Underwriter «—
Sano & Co., 15 William St., New York, N. Y.
;

B.

April 24

American Research & Development Corp
<Lee Higginson Corp. ) lOO.O'OO shares

Box-506,

None. Offer¬

—

Petroleums, Ltd.
filed 1,150,000 shares of capital stock of which

March 30

Co.)~ $325,000 shares

(Goldman, Sachs

.

O.

P.

—

it Britalta

^Industries, Inc.___-Debentures

American Biltrite Rubber. Co.,.

Address

ing—Has been delayed.

&

.

creditors.

current

pay

Bridgehampton, L. I., N. Y. Underwriter

~

<Dempsey-Tegeler. & Co.)

shares

four

(Monday)

April 20

(jointly). Bids—To be received up to 11 a.m. (EST) <m
April 22 at 49 Federal St., Boston, Mass.

1, 1958 on the basis of one new
held; unsubscribed shares
will be offered to current creditors in payment of all
or part of claims, at the rate of one share for each
$4

share

NEW

Adam .Consolidated

55

(1779)

September 10

(Thursday)

Georgia Power Co
(Bids to b* Invited) $18,000,000

—Bonds

f(6

The Commercial and Financial Chronicle ;.

(1780)

rContinued front page 55
32nd Street, Yuma.

Denver, Colo.
'

j

Ariz. Underwriter—L. A. Huey Co..
■

,

_

Louisiana

March 20 filed $5,000,000

-x

Cormac

itock (par one cent) and 108,667 common stock purchase
varrants, each unit consisting of one common share ami
one warrant, being offered
for subscription by holders
,f the common stock ol Cormac Photocopy Corp. at Uh-ate of one such unit for every six shares of Corma<
Photography common held on April 9, 1959; rights
to expire on or about April 22. Price — $2 per unit.
Proceeds—To finance the company's development and

notification) 150,000 shares of common
Proceeds—To be added to

share.

per

general funds of the company. Office—1020 G. Daniel
Baldwin Building. 1005 State Street. Erie, Pa. Under¬
writer—Summit Securities, Inc., New York, N. Y.

marketing program. Office—80 Fifth Avenue,

Chadbourn Gotham, Inc.

Crowley's Milk Co., Inc. > * ^
March 26 filed 60,000 outstanding shares of common
stock (par $20). Price— To be supplied by amendment.
Proceeds—To selling stockholders. Office—145 Conklin

purchase 300,000 shares^of common stock) to be offered
for subscription by common stockholders at the rate of

N. Y. Underwriter—None.
.
Self-Service Stores, Inc. (5/4-8)
April 10 filed 250,000 units, each unit consisting of one
share of common stock and two common stock purchase
warrants. Price—$5 per unit. Proceeds—For establish¬
ment oi proposed new stores, to pay accounts payable
(trade), to be applied to extinguish long- and shortterm loans, and the balance to increase working capital.
Office—368 E. 87th Street, Chicago, 111. Underwriter-

Ave., Binghamton,

4100 principal amount of debentures (with warrant for
purchase of 10 shares) for each 68 common shares held
©s of record April 23,
1959 (for a 14-day standby),
price — To be supplied by amendment.
Proceeds — To
provide additional working capital to finance the com¬
pany's expanding business and will currently be applied
to the reduction of short-term bank loans. Underwriter
—R. S. Dickson & Co., Inc., Charlotte, N. C., and New
York, N. Y.

■

.

(W. R.)

Chance

-

Charles Plohn & Co., New

(letter of notification). 10,000 shares of com¬
mon stock (par $2) and $100,000 principal amount of 8%
convertible bonds. Price — For common stock, $5 per

Development Corp.
Price—
$20 per share. Proceeds—For purchase and development
of industrial properties and for working capital. Office
—Chattanooga, Tenn. Underwriter—None.
Industrial

(letter of notification)

Cycon, Inc.
■
March 25 (letter of notification) 300,000
mon stock (par 10 cents).
Price—$1 per

150,000 shares of

com¬

Dalton Finance,

•

City Lands, Inc., New York
capital stock. Price—$20
per share. Proceeds—To invest in real estate. Officii—
Room 3748, 120 Broadway, New York, N. Y. Underwriter

Jan. 13 filed 100,000 shares of

—Model,

Roland

&

Stone,

New York.

Statement has

best efforts basis.

Inc. (Del.)
outstanding stares of class A com¬
mon stock. Trans Caribbean Airways, Inc., which owns
all of this stock, proposes to give the holders of its out¬
standing class A stock, and holders of its outstanding
5Vi% convertible subordinated debentures, transferable
warrants, which evidence the right to purchase shares
of the class A stoek on the basis of one share of class
A stock for each three shares of the class A stock of
Trans Caribbean which such holders either hold as
stockholders or to which they are entitled upon con¬
version of their debentures (with an oversubscription
privilege). Employees of Trans Caribbean and its sub¬
sidiaries will have the right to purchase up to 100,000
of the said 350,000 shares.
Price—To be supplied by
amendment. Proceeds—To selling stockholder.
Office—
Washington, D. C. Underwriter—None.
D. C. Transit System,

Mar. 23 filed 350,000

Aug, 21 (letter of notification) 300,000 shares of commoD
stock (par one cent). Price—$1 per share. Proceeds—To
pay additional costs of construction; and for retirement
of obligations and working capital. Office —c/o John
Harlan Lowell, 2200 Kenton, Aurora, Colo. Underwriter
—Lowell. Murphy & Co., Inc., Denver, Colo.
Coastal

States

Life Insurance Co. (4/20-24)
74,728 shares of common stock (par
$1.25). Price—To be supplied by amendment. Proceeds
—To selling stockholders.
Office—Atlanta, Ga. Under¬
writers—The Johnson, Lane, Space Corp. Savannah, Ga.:
and Walston & Co., Inc.. New York.
31

filed

^ Coil Winders,

Inc.
(5/11-15)
(letter of notification) 150,000 shares of com¬
mon stock (par 20 cents).
Price—$2 per share. Proceeds
—For; machinery and equipment, to retire loans and

April 7

•

•

notes; for research and development; and working cap¬
Business—Manufactures components for U. S. Gov¬
ernment and the electronic industry.
Office—40 New
York Avenue, Westbury, N. Y.
Underwriters—Bertner
Bros, and Earl Edden Co., bfcth of New York.

share

of

stock.

Price —$205

Derson Mines Ltd,
June 5 filed
oer

350,000 shares of

common

stock,

Price—Si

Proceeds—For new equipment, repayment of

loan, acquisition of properties under option, and other

corporate purposes. Office—Toronto, Canada, and Em
Underwriter—None

oorium, Pa

Diamond State Telephone Co. (4/21)
March 27 filed $5,000,000 of 35-year debentures,

mortgage bonds due

Sept. 1, 1968, $20,000,00 of subordinated debentures due
Oct. L 1968 and 3,000.000 shares 'f common stock to b*
as follows:
$1,000 of bonds and 48 sharer
of stock and $100 of debentures
nine shares of stocfe
Price—To be supplied
by amenwnent. Proceeds — T»
instruct refinery.

Underwriter—Lehman Brothers, Nev
Offering—Indefinite

Commercial Investors Corp.
Nov. 28 (letter of notification)
900,000 shares of
mon stock.
Price—At par (10 cents per
share).
ceeds—For investment. Office—450 So.
Main St

com¬

J. Hudson &

Pro¬
Salt

Col

company

due

Co., and for general corporate purposes. • Underwriter—To
be determined by competitive bidding. Probable bidders:
-

Halsey, Stuart & Co. Inc.; The First Boston Corp.; Mor¬
gan Stanley & Co.; White, Weld & Co.; Eastman Dillon,
Union Securities & Co., and Kidder, Peabody & Co.
(jointly). Bids—Expected to be received up to 11 a.m.
(EST) on April 21.
Diversified Inc., Amarillo, Texas
Jan.

6

cents).

filed

300,000 shares

Price—$3

per

share.

proposes

to

offer the debentures

arid 80,000

shares in units, consisting of $100 of debentures

common

and five common shares.

shares

common

holders thereof.

Proceeds

—

To

Remaining 75,000 outstanding

are
to
be offered for sale by
the
Price—To be supplied by amendment.
pay bank loans and for construction,

equipment and development. Underwriter—Lee Higglnson Corp., New York.
YYYYY-';
Eckert Mineral

Research, Inc.

March 27

(letter of notification) 150,000 shares of com-1
mon stock (par 50 cents).
Price—$2 ner share. Proceeds
—For mining and selling of ore. Office-—110 E. Main St,,
Florence, Colo., Underwriter—Harris Securities Corp.,
New York, N. Y.

Co. ''
>.Y:.
Aprrlv 6„ fletter of notification) 300,000 shares of class A
common stock (par 25 cents). Price—$ 1 per share. Pro¬
ceeds—For inventory, equipment, working capital, etc.
Office—901 S. Lake Street, Farmington, N. Mex. Under¬
writer—Investment Service Co., Denver, Colo. 1;:,
'Y
•

Electro

Networks, Inc;. (4/20-24) ' Y':Y»
(letter of notification) 100,000 shares of com¬
mon stock
(par 10 cents). Price—$2.70 per share. Pro¬
ceeds
To purchase test equipment, and for general
working capital. Office—1920 Park St., Syracuse, N. Y.
April 2

Underwriter—Charles Plohn & Co.; New York, N. Y,

★ Elliott-Automation Ltd. (of England)
Y"Y Y
April 13 filed American depositary receipts for 80,000
ordinary registered shares. Depositary—Guaranty Trust
Co. of New York,
YYY'Y'.
; YY':
>:YY- YYYYY- v-1
Emerite Corp.

YYY';:/Y. :>;Y-- YY'YY Y v YYy-

fan.. 19 (letter of notification) 250,000 shares of series 3
stock

jommon

(no par) to be offered for subscription
by stockholders on the basis of one share: of series 3
dock for each three shares of series 1 and/or series 2
:ommon stock held; unsubscribed shares to other stockholders.
Rights expire 30 days from offering / date.
Price—$1 per share.
Proceeds—For working capital.
Office—333 S. Farish

—None.

Street, Jackson, Miss. Underwriter

'

■

;■

k Euchler Home's, Inc.
March 27 (letter of notification) 30,000 shares of 60-cent
cumulative convertible preferred stock (no pwr). :Price
—$10 per share.
Proceeds — To acquire and develop
additional lands.
Office—2001. El Camino Real, Palo
Alto, Calif.
Underwriters — J. C. Strauss & Co., and
York & Co., both of San Francisco, Calif.

Eurofund, Inc.
2,500,000 shares of common stock (par $1).
Price—$26 per share. Proceeds—-For investment. Office
Feb. 26 filed

—14 Wall St., New York. Underwriter—Glore, Forgan
& Co., New York. Offering—Temporarily postponed.

Federated Corp. of Delaware
29 filed $918,000 of 6% convertible

Oec.

v
subordinated

iebentures due 1968.-. The company proposes to offer
1210,000 of the debentures to purchase the capital stock
if Consumers Time Credit, Inc., a New York
company;
1442,000 of the debentures in exchange for Consumers
iebentures; and $226,000 of the debentures in exchange
'or the outstanding 12% debentures of three subsidiaries
if Federated. Office—1 South Main Street, Port
Chester,
L Y,

Underwriter—None.

Federated Finance

Co.

17 (letter of notification) $300,000 of 10-year 6%
tenior subordinated debentures. Price—At par (in delominations of $1J)00 each). Proceeds — For working

Jov.

apital, to make loans, etc, Office-?-2i04 M0'r St^ Lin¬
coln, Neb. Underwriters — J. Cliff Rahel & Co. and
Eugene C. Dinsmore, Omaha, Neb.
e

Fed-Mart Corp.

(4/21)

March; 16 filed 170,700 shares of common stock. .Price—

of

common

stock

(par

operations of Reid Oil Co., a subsidiary; to reduce debt;
and for working capital. Office—8001 Athello St., San
Diego, Calif. Underwriter—Eastman Dillon, Union Se¬
curities & Co., New York.
Finance For Industry, Inc.

Dec. 16 filed 200,000 shares of class A

April 1,1994. Proceeds—To be used principally to repay
advances from parent, American Telephone & Telegraph

offered in units

City, Utah.

share.

;:YY'''Y;

$11 per share. Proceeds—For acquisition of land, build¬
ings and-fixtures for two new stores; for expansion of

Underwriter—None.

Fla.

Underwriter—Lehman Brothers end East¬
Dillon, Union Securities & Co. (jointly).




provide additional working capital and for

Inc.
April 3 (letter of notification) 20,000 shares of common
stock.
Price—At par ($10 per share).
Proceeds—For
working capital. Office—3160 N. W. 41st Street, Miami,

expenditures.

5£Ct^^rwriter-Earl
Halt Lake

subordinated

Delia Pharmaceuticals,

April 1,1959; rights to expire on April 20. Price—$21.75
per share.
Proceeds — To finance System construction

York

Corp. (4/27-4/30)
$1,000,000 of convertible

general corporate purposes. Underwriter—H. M. Byllesby
& Co., Inc., New York and Chicago.

per

Columbia Gas System, Inc.
March 5 filed 1,799,057 shares of common
stock (par $10)
being offered for subscription by common stockholders
on the basis of one new share for
each 15 shares held on

Commerce Oil Refining
Corp.
Dec. 16,1957 filed $25,000,000 of first

filed

notes and to

unit v
Proceeds^—For working capital.
Office—Suite 421, 901
Sherman Street, Denver, Colo. Underwriter—Associated
Securities 412 Main Street, Cedar
Falls, Iowa.

man

31

debentures due 1974. Price—To be supplied by amend¬
ment. Proceeds — To retire mortgage loans and bank

$220,000 of 6% unsecured
debentures due April I, 1964 and
1,100 shares of common
stock (par $1) to be offered in units of
$200 of deben¬
one

DeJur-Amsco

March

Colorado Water & Power Co.
Feb. 25 (letter of notification)

and

DeJur-Amsco Corp.

(4/27-4/30)
:
March 31 filed 225,000 shares of class A stock (par $1).
Price—To be supplied by amendment.
Proceeds — To
selling stockholders. Underwriter—H. M. Byllesby & Co.,
Inc., New York and Chicago.

ital.

tures

Inc.

,

Cfute Corp.

March

•

Dynacolor Corp.; Rochester, N. Y.: (4/22)

March 24 filed $1,600,000 of 7% sinking fund debentures
due -1969 and 155,000 shares of •common stock.
The

March 9 filed $500,000 of 7%

Underwriter—Aetna Securities Corp., New York.

been withdrawn.

•

—

.

(4/20-24)
subordinated debentures,
due Jan. 2, 1974, with attached warrants for the pur¬
chase of 100,000 shares of class A common stock. Price
—At face amount (in units of $500 each). Proceeds—To
finance making of -additional loans and to reduce shortterm debt. Office—3800-34th St., MfT Rainier,. Md. Un¬
der writer—Paul C. Kimball & Co., Chicago, 111., on a

stock (par 10 cents). Price—$2 per share. Proceeds
—For general corporate purposes. Office—Los Angeles,

mon

Calif.

?;/•;

shares of com¬
share. Proceeds
—For working capital. Office—Mearns Bldg., 142-148 N.¬
Washington Ave., Scranton, Pa. Underwriter—Sano &
Co., New York, N. Y. Offering—Expected in May.

(4/20-24)

(4/27-30)
:Y;YYt) Y
"
shares of 6%- cumulative, preferred
stock, series A^ $50 par (with warrants attached for the i
purchase of 50,000 common shares) and; 150,000 shares
of common stock (par $1).
Price—To be supplied by
amendment. Proceeds—Together with $1,000,000 of in-'
stitution'al borrowings and Other company funds, will
be applied for purchase by, its subsidiary of the assets
.
of Dorsey Trailers, Inc. .and to the retirement of the !
latter company's hcJes and instalment contracts, in tte
1 approximate amounts Of $4,000;000 arid $670,392, re¬
spectively. Office—100 West 10th St.; Wilmiiigtoti; Dei
Underwriter—Blair & Co., Inc., New York;
*;.•
Y
Porsey Corp.

March 20. filed 25,000

Y.YYY^YYYYyYYY ★ Electric City Supply

Sept. 22 (letter of notification) 150,000 shares of class A
stock (par 10 cents). Price—$2 per share. Preseeds — For repayment of loan; purchase of plant, and
office equipment; raw materials and supplies; and for
working capital, etc. Office—U. W. National Bank Bldg
1740 Broadway, Denver, Colo. Underwriter—L. A. Huey
Denver, Colo.

March 25 filed 37,500 shares of common stock.

April 3

;

common

chare; the bonds, at face amount/Proceeds—For research
©nd development costs and additional working capital.
Office—Waldorf, Maryland. Underwriter—None.

kr Chemical Milling International Corp.

York,

ised for working capital.
Underwriter
Investment
Service Co., Denver; ColoVbri a b^t efforts, basis.
< v
#

.

Cryogenic Englnooring Co.

.

March 31

Chattanooga

„

it Crown

|

■

& Associates, Inc.

New York,

Underwriter—Ross, Lyon & Co., Inc., New York.

N. Y.

(4/23).
March 26 filed $3,000,000 of 5.90%'convertible subordincted debentures, due April 1, 1971' (with warrants to
0

Chemical Corp.
iu8,667 units of 108,667 shares of cummoi.

Thursday, April 16, 1959

of undeveloped real estate/for organization or acquisi¬
tion of consumer finance business, and balance to he

5 ^

Jan. 22 filed

Century Brick Corp. of America

April 6 (letter of
«tock.
Price—$2

(4/20-24)

of senior sinking fund deben¬
tures (with warrants). Price — At 100% of principal
amount.
Proceeds—To retire a $2,150,000 term Joan,
for the purchase and installation of a dual tube pro¬
duction line, and for working capital. Office—Lima and
Western Avenue, Findiay, Ohio.
Underwriter—Paine,
Webber. Jackson & Curtis, New York; and Prescott,
Shepard & Co., Inc., Cleveland, Ohio.
; 0:; ^ ; • ;; ;;
March. 21 filed $3,500,000

Electric Co., Inc. (4/20)
of first mortgage bonds, series
I due 1989. Proceeds—To repay $1,000,000 of bank loans
end to finance construction program. Underwriter—To
be determined by competitive bidding. Probable bidders:
Dalsey, Stuart & Co. Inc.; Salomon Bros; & Hutzler,
Merrill Lynch, Pierce, Fenner & Smith, Inc., and Stroud
& Co. (jointly,; Kidder, Peabody & Co.;'White, Weld
& Co.
Bids—Expected to be received up Ik, noor. (EST)
On April 20.
;
*
Y ^.Y.
,Y ' :
Central

"

Cooper Tire & Rubber Co.

Y

/

■

.

50

Proceeds—For acquisition

stock.

common

Price—At par ($1.50 per share).

rapital.
writer

Proceeds—For working
Office—508 Ainsley Bldg., Miami, Fla. Under¬
R. F. Campeau Co., Penobscot
Bldg., Detroit.

—

Wich,

kr Fireman's Fund Insurance Co.
April

1 filed $3,000,000 of interests in the Fireman's
Savings and Supplemental Retirement Plan, and
50,420 shares of the Insurance Company's common stock
which may be acquired pursuant to said Plan.
Fund

_

k First Investors Corp.
April 9 filed (by amendment) an additional $100,000 of
Payment Plans ,(DW and DWN) and Single
Payment Plans (DWP). Proceeds—For investment.

Periodic

Volume

Number 5838

189

.

.

.

The Commercial and Financial Chronicle

Florida Builders, Inc.

6% 15-year sinking fund sub¬
ordinated debentures and 40,000 shares of common stock,
jfto be offered in units of $100 principal amount of deben¬
tures and one share of common stock. Price — $110 per
unit. Proceeds—For purchase and development of sub¬
division land, including shopping site; for new equip¬
ment
and project site facilities;
for financing ex¬
pansion program; and for liquidation of bank loans and
other corporate purposes.
Office—700 43rd St., South,
Bt Petersburg, Fla. Underwriter—None.
Dec. 1 filed $4,000,000 of

—

-

Corp. (4/20)
March 31 filed $2,135,700 of convertible subordinated
debentures due May 1, 1971, to be offered for subscrip¬
by

common

stockholders

at the

debentures for each 50 shares of stock

rate of $100 of
held on April 17;

rights to expire on or about May 4. Price—To be sup¬
plied by amendment. Proceeds—To retire existing longterm bank loans, and for additional working capital.
Underwriters—McDonald & Co., Cleveland, Ohio; and
Kidder, Peabody & Co., New York.

Fluorspar Corp. of America

notification—as amended) 300,000 shares
Price—At par ($1 per share). Pro¬
ceeds—For mining expenses.
Office—4334 S. E. 74th
Ave., Portland 6, Ore. Underwriter—Evergreen Securi¬
ties, Inc., 4314 N. E. 96th Ave., Portland, Ore./
j
;/
Feb. 5 (letter of

of

common

stock.

Foundation Investment Corp., Atlanta, Ga.

•

stock to be of¬
unsold portion
offered publicly. Price—$12.50 per share. Proceeds
repay notes.
Office—515 Candler Bldg., Atlanta,

Jan. 13 filed 231,988 shares of common
fered for subscription by stockholders;
to be
—To

<Ga. Underwriter—None. Statement effective April 2. :

it Genisco, Inc., Los Angeles, Calif. (4/20)
April 6 (letter of notification) 3,400 shares of common*
stock (par $1).
Price—To be supplied by amendment.
Proceeds—To selling stockholder.
Underwriter—Lester,
Ryons & Co., Los Angeles, Calif.
stock. Price
—$10 per share. Proceeds — For properties, furniture,
fixture and leasehold improvements and other expenses.
Office—565 Fifth Ave., New York, NZ Y. Underwriter
—Bache & Co., New York, N. Y.
*'
/

par) and 1,537,500 shares of common B stock (par $1) ;
Proceeds—To the Attorney General of the United States I
Underwriter—To be determined by competitive bidding
Probable bidders: Blyth & Co., Inc., and The First Bos-

Corp.
(jointly); Kuhn, Loeb & Co.; Lehman
Brothers, and Glore, Forgan & Co. (jointly)* Bids—Had
been scheduled to be received up to 3:45 pjn. (EDT) on
Hay 13 at Room 654, 101 Indiana Ave., N. W., Washing-.
ton 25. D. C.. but bidding hds been postponed.
Ion

General Builders Corp., New York
Feb. 26 filed $2,131,000 of 6% subordinated

debentures,
due April 30, 1963, with detachable warrants to pur¬
chase 213,100 shares of common stock (each $100 de¬
benture will be accompanied by a warrant for the
purchase for cash of 10 common shares at $3 per share
at any time beginning Oct. 30, 1959 to and including
April 30, 1969).
The company is offering holders
of its outstanding common stock and its outstanding
cumulative preferred stock of record April 8, 1959, the
right to subscribe to a total of $1,631,000 of the deben¬
tures with warrants.
tures with

warrants

The remaining $500,000 of deben¬
being sold to af group of pur¬

are

also stockholders of the company)
who have agreed also to purchase certain additional
amounts of debentures with warrants if subscription
chasers

(who

are

rights are not exercised in at least the amount of $500,Subscription warrants will expire on May 11, 1959.
Price — $100 per unit. Proceeds — To repay promis¬
sory notes, and the balance, if any, will be added to
working capital, to be used in part to reimburse the
company's treasury for payments made upon the acqui¬
sition of land and as working capital for such building

Memphis, Tenn.
"A" common stock
(par one cent). Price—$10 per share. Proceeds—For
working capital and general corporate purposes. Under¬
writer— Union
Securities
Investment Co., Memphis,
.

General Merchandising; Corp.,

Feb. 18 filed 250,000 shares of class

•

General Telephone &

Electronics Corp. (4/21)

Price—
general
UnderPaine, Webber, Jackson & Curtis; Stone &
Securities Corp.; and Mitchum, Jones & Tem-

March 31 fijed 800,000 shares, of common stock.
To be supplied by amendment. Proceeds — For
corporate purposes. Office—New York, N. Y.
> writers

—

Webster

pleton.

it General Underwriters Inc.
April 6 (letter of notification) 225,000 shares of com¬
mon capital stock (par 25 cents). Price — $1 per share.
inventory and improved mer¬
chandising methods, to finance the real estate depart¬
ment and insurance policy loans. Office—211-215 Pine
St., Pine Bluff, Ark. Underwriter—Lovan Securities Co.,

Proceeds—For furniture

Inc., Pine Bluff, Ark.
General

Waterworks

Corp.

March 31 filed 16,131 shares of $5 voting preferred

stock
(par $100) and 66,131 shares of 80-cent dividend voting
second preferred stock (convertible—par $1). The com¬
pany proposes to offer one share of the 80-cent dividend
second preferred stock for each share of New Rochelle
Water

Underwriter—None.
-

of its $5 preferred and one
share of the 80-cent dividend second preferred for each
Co.

and

one

share




-

Hinsdale Raceway, Inc., Hinsdale, N. H.
Dec. 29 filed capital trust certificates evidencing
•

1,000,—

shares of capital stock, and 2,000 debenture note*.
Price—The common stock at par ($1 per share) and tho
000

$500 each. Proceeds—For construction
including land, grandstand, mutual plant
—1608 Centinela Blvd., Inglewood, Calif. Underwriter—
building, stables and paddock, dining hall, service build¬
ing, administrative building, penthouse, tote board and
Reilly, Hoffman & Co., Inc., New York. ■
. -V
clubhouse. Underwriter—None. "Stop order" proceed¬
Godfrey Co., Milwaukee, Wis.
ings instituted by SEC in April.
*
/
March 23 filed 100,000 shares of common stock. Price—
To be supplied by amendment.
Hoffman Motors Corp.
'
Proceeds—To provide
March 9 filed 260,000 shares of common stock (par $1),
inventory and working capital for four new supermar¬
of which 250,000 shares are to be publicly offered and;
kets in the amount of some $309,400, and to provide
fixtures
and equipment with respect thereto in the
10,000 shares to officers and employees. Price—$10 p«T^
shares to public; $9 to employees. Proceeds—To selling::
amount of $635,000; some $30,000 will be used to provide
stockholder. : Underwriter — For public offering: Van:
equipment and improvements for Crestwood Bakery, a
subsidiary; and the balance will be used for investments
Alstyne, Noel & Co., New York.
Offering—Postponedin controlling stock in retailer-franchised Sentry Mar¬
indefinitely.
/
;
s
notes in units of

of

track,

a

.

kets

interim

in

and

investments

in sites and

develop¬

prior to resale. Office—4160 North Port Wash¬
ington Rd., Milwaukee, Wis. Underwriter — Taylor,.
Rogers & Tracy, Inc., Chicago, 111.
>
/
-

ments

.

,

Employees Variable Annuity Life

Home-Stake Production Co., Tulsa,

to be offered

Idaho Power Co.

2,500,000 shares of common stock (par $1)
by company viz: (1) to holders of common

stock (par $4) of Government Employees Insurance
on the basis of one warrant per share of stock held

334,570 shares

now

are

Co.,
(1,-

outstanding); (2) to holders of

stock

(par $1.50) of Government Employees
the basis of IV2 warrants per share
shares are now outstanding); and
(3) to holders of common stock (par $5) of Government
Employees Corp., on the basis of V2 warrant per share of
6tock held (as of Dec. 31, 1958 there were 143,703 shares
of stock outstanding and $589,640 of 5% convertible cap-'
Ital debentures due 1967, convertible into shares of com¬
mon at $28.0374 per share.
If all these debentures were
converted into common stock prior to the record date,

common

Life Insurance Co., on
of stock held (216,429

total of

164,733 common shares wpuld be outstanding.
share. Proceeds—For capital and surplus.
Bldg., Wash¬
ington, D. C. Underwriters — Johnston, Lemon & Co.,
Washington, D. C.; Eastman Dillon, Uhion Securities &
Co., New York; and Abacus Fund, Boston, Mass. Offer¬
ing—Indefinitely postponed.
a

Price—$3

per

Office—Government Employees Insurance

Great American Realty Corp.

900,000 shares of class A stock (par 10
Price—To be supplied by amendment. Proceeds
working capital. Office—15 William Street, New
York. Underwriter—To be supplied by amendment.
March 30 filed

cents).

—For

•

(4/22)

Greater All American Markets, Inc.

shares of common stock. Price—
To be supplied by amendment. Proceeds—For advance
rental payments, purchase of inventories and working
capital. Business—Operates eight super markets. Office
—7814 East Firestone Blvd., Downey, Calif. Underwriter
17 filed 300,000

March

—J.

Barth

Gridoil
Feb.

&

Co., San Francisco, Calif.

563,600 shares of common stock to be of¬
exchange for $2,818,000 of 5J/2% convertible
sinking fund redeemable notes, series A, due July 1,1976,
on the basis of 200 shares for each $1,000 note.
Office—

Avenue, West, Calgary, Canada.

Growth Fund of America, Inc.
Feb. 4 filed 250,000 shares of common

stock (par 10
Proceeds—For investment.
Office —1825 Connecticut Avenue, Washington, D. C.
Investment
Advisor
Investment
Advisory
Service,
Washington, D. C. Underwriter—Investment Manage¬
ment Associates, Inc., Washington, D. C.
.,
. ,
;
Price—At

cents).

used for

—

At par.

1959.
ma¬

equipment, and to provide additional funds
working capital and other corporate purposes. Office

for

Valparaiso, Ind. Underwriter—Kalman &
'

Industrial Minerals Corp.,

Washington, D. C.

July 24 filed 600,000 shares of common stock (par on*
cent). Price—$1 per share. Proceeds—To develop and
operate graphite and mica properties in Alabama. Up-*'"
ierwriters—Dearborn & Co. and Carr-Rigdom & Co.*
both of Washington, D. C., on a best efforts basis. State¬
ment effective Nov. 18.
International Bank, Washington,
$5,000,000 of notes (series

Dec. 29 filed

year,

D. C.
.
,
B, $500,000, two.

$1,000,000, four-year 4% per

3% per unit; series C,

unit; and series D, $3,500,000, 6-year, 5% per unit).
of principal amount.
Proceeds — For working

—100%

Underwriter—Johnston, Lemon & Co., Wash¬
Offering—Indefinitely postponed.
^-International Tuna Corp. (4/20-24)
April 3 (letter of notification) 175,000 shares of class;
A common stock (par 50 cents).
Price — $1 per
Proceeds—For equipment and working capital.
Office
—Pascagoula, Miss. Underwriter—Gates, Carter & Co.*
capital.

ington, D. C.

Gulfport, Miss.
Interstate Power Co.

(5/20)

of first mortgage bonds due 1989.
loans and for construction
program. Underwriter—To be determined by competitive
bidding. Probable bidders: Halsey,; Stuart & Co. Inc.;
Blyth & Co., Inc. and Salomon Bros. & Hutzler (jointly);
Merrill Lynch, Pierce, Fenner & Smith, Inc.; Kidder,.
Peabody & Co. and Lehman Brothers (jointly); White,
Weld & Co.
Bids — Expected to be received up to 11

April 7 filed $6,600,000
Proceeds

Heliogen Products, Inc.
(letter of notification) 28,800 shares of common
stock
(par $1).
Price—$5 per share.
Proceeds—For
Oct. 22

payment of past due accounts and loans and general
working capital. Office — 35-10 Astoria Blvd., L. I. C.

Co., Suite 1512,

a.m.

Hermetic Seal Corp.

notification) 100,000 shares of class A
cents). Price—$3 per share. Pro¬
ceeds—For payment of the balance of owed moneys to
creditors; to equip a plant in the Midwest area; for a
modern research development laboratory and working
capital. Office—744 Broad St., Newark, N:"J. Under¬

(par $1)

chinery and.

general pur¬
Address—P. O. Box-348, Albany, N. Y. Under¬

•

—

To repay bank

(EDT) on May 20.

Interstate Power Co.

(5/18-19)

April 7 filed 80,000 shares of cumulative preferred stock
(par $50). Price—To be supplied by amendment.
Pro¬
ceeds—For construction program. Underwriter—Kidder,

March 9 (letter of
common

shares of common stock

of April 1, 1959; rights to expire on April 17,
Price—$37 per share. Proceeds—For construction,

writer—None.

•

filed 42,193

being offered for subscription by common stockholders
at the rate of one share for each seven shares held as

Proceeds — To repay

3, N. Y. Underwriter—Albion Securities
11 Broadway, New York 4, N. Y.

Min¬

Indiana Steel Products Co.
Feb. 26

debts, acquisition of investments, and for
poses.

;

quette Ave., Minneapolis, Minn. Underwriter —
neapolis Associates, Inc., Minneapolis, Minn.

market.

Price

Lynch, Pierce, Fenner

Imperial Growth Fund, Inc.
March 2 filed 600,000 shares of common stock. Price—At
market. Proceeds — For investment. Office — 60 Mar¬

(letter

rights.

Lazard Freres & Co., Kid¬

der, Peabody & Co. and Merrill
Smith, Inc., all of New York.

&

Development Corp.
of notification) 22,820 shares of non¬
voting convertible preference stock (par $12) to be
offered for subscription by stockholders on the basii
of one share of convertible preference stock for each
10 shares of common stock held on or about Nov. 1,
1958. Stockholders will have 45 days in which to exer¬
the

operating facilities. Underwrite!*

—May be Blyth & Co., Inc.,

Heartland

cise

*

for construction of new

—

23

v.!
stock (par $10).
Proceeds—To be
partial payment of short-term bank loans made*

Idaho Power Co.

Co., Inc., St. Paul, Minn.

in

330 Ninth

1

April 1 filed 150,000 shares of common
Price—To be supplied by amendment.

5 filed

fered

(5/13)

filed $15,000,000 of first mortgage bonds du«
1989. Proceeds—To be used for partial payment of shorts
term bank loans made for construction of new operating
facilities. Underwriter—'To be determined by competl-'
tive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.; Lazard Freres & Co. and The'
First Boston Corp. (jointly); Salomon Bros. & Hutzler
and Eastman Dillon, Union Securities & Co. (jointly);:
Merrill Lynch, Pierce, Fenner & Smith, Inc.; Equitable
Securities Corp.;: Kidder, Peabody & Co. and Whiter
Weld & Co. (jointly). Bids—Expected to be received up
to 11 a.m. (EDT) on May 13.
,"

April

—405 Elm St.,

Freehold Leases Ltd.

Okla.

116,667 shares of common stock (par $5).
Price—$6 per share. Proceeds—For working capital aof
general corporate purposes. Office — 2202 Philtow«r»
Bldg., Tulsa, Okla. Underwriter—None.
:
V
•

Nov. 5 filed

Insurance Co.
Nov. 13 filed

Oct.

Tenn.

...

Highway Trailer Industries, Inc.
24 filed 473,000 outstanding shares of common
cents). Price—At prices generally prevail¬
ing on the American Stock Exchange.
Proceeds — To
selling stockholders. Office — 250 Park Avenue, N. Y.

it Glide Control Corp.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents). Price—$1 per share. Proceeds*
—For manufacture, marketing and distributing of auto¬
matic throttle control devices for motor vehicles. Office

000.

projects as the company may undertake. Office—2413
Third Ave., New York, N. Y. Underwriter—None. State¬
ment effective April 2.

>

stock (par 25

April 10

Frito Co. >(4/21)

Qaneral Anilinp A Film Corp-* New York
?
Jan. 14, 1957 filed 426,988 shares of common A stock (no

Inc.

stock.

Nov.

.

March 13 filed 3,357,700 shares of common

Government

March 25 filed 200,000 shares of common stock (par
$2.50), of which 140,000 shares are for the account of
selling stockholders and 60,000 shares for company's
account. Price—To be supplied by amendment. Proceeds
—For working capital and general corporate purposes.
Underwriters—White, Weld & Co., New York; and Dittr
mar & Co., San Antonio, Texas.

York. Offering-

(letter of notification) 285,000 shares of com¬
Price—At par ($1 per share). Proceeds—To
pay existing liabilities; for additional equipment; and
for working capital.
Office—East Tenth Street,. P. (X
Box 68, Great Bend, Kan.
Underwriter—Birkenmayer
& Co., Denver, Colo.

Steel

Florida

tion

Hickerson Bros. Truck Co.,
mon

(4/27-30)

& Co., Inc., New

March 11

Claymont, Del.

Glickman Corp.

Treat

Expected any day.

offer is conditioned upon acceptance by holders of 80%
of New Rochelle stock. Office—3219 Philadelphia Pike,

•

^ Florida-Southern Land Corp.
April 13 filed 2,000,000 shares of common stock. Price
$2 per share.
Proceeds — For construction of motel
units and other facilities.
Office — Tom's Harbor, Fla.
Underwriter—Alkow & Co., Inc., New York.

writer—Amos

share of New Rochelle $3.50 preferred (including accu¬
mulated unpaid dividends from November, 1950). The

stock (par 10

Peabody & Co., New
,.

York.

Continued

on page

5&

58

(1782)

The Commercial and Financial Chronicle

Continued

under

from page 57

shares of common
Price—$4.50 per share. Proceeds
and paid-in surplus. Office—At¬
lantic Federal Building, 1750 E. Sunrise Boulevard, Ft
Lauderdale, Fla. Underwriter—None.

land

Florida.

in

.

Office —1750

East

preferred

Calif.

.

•

Investors Funding Corp. of New York *
17 filed $500,000 of 10% subordinated debenturei
due July 31, 1964, to be offered in units of $1,000. Prict
Feb.

—At 100% of principal amount. Proceeds—For invest¬
ment. Office—511 Fifth Ave., New York, N. Y. Under¬
writer—None.

acquire machinery and equipment and additional spacf
laboratories; and for working capital. Office—
4 Manhasset Ave., Port
Washington, L. I., N. Y. Under¬
writer
B. Fennekohl &
Co., 205 East 85th St., New
York, N. Y.
for test

—

Keystone Custodian Funds, Inc.
90,600 shares of class A

March 27 filed

common

stock,

of which 37,600 shares are to be offered from time to
time by the Fund, pursuant to the terms of its Em¬

Option Plan,

and the remaining 53,000
shares will be sold for the account of a selling stock¬
holder. Price—To be supplied by amendment. Proceeds
—To selling stockholder:
Underwriter—Clark, Dodge &
Co., New York.
of class A stock and
300,000 shares of class B stock, of which a maximum ol
2,457,450 shares of class A stock are to be offered in ex¬
change for units in certain limited partnerships. Com¬
pany sold on March 14 a total of 250,000 class A shares
at $10 per share, and on March 4 a total of
300,000 class
shares

at

$1 per share to certain persons;, the re-:
maining 12,500 class A shares are to be issued to
Cinaba, Ltd. Office—521 Fifth Avenue, New York, N. Y.
Underwriter—None.
V
•

Lagutui Niguel Corp. (4/23)1 v *•'/"*April 1 filed 900,000 shares of class A stock (no par)
and 900,000 shares of class B stock
(no par) to be of¬
fered in units, each
consisting of one class A and one
class B share. Price—$10. per unit. Proceeds—To make
payments in connection with acquisition of certain prop¬
erties, to repay bank loans, for working capital and

other corporate purposes.

Los
son

Office—621 South Spring St.,
Angeles, Calif. Underwriter—Paine, Webber, Jack¬
& Curtis, New York and <Los
Angeles.

Laure Exploration
Co., Inc., Arnctt, Okla.
Dec. 23 filed 400,000 shares of common stock.
Price—$2

'

per share.

Proceeds—For machinery and equipment and
exploration purposes. Underwriter—None.
7

Lefcourt Realty Corp.
common

stock, of which
2^22,000 shares were issued in exchange for all of
toe common stock of Desser &
Garfield, Inc., and D. G.
& R., Inc.; 750,000 shares will be used for
the exercise
an

Mound

option

by

the

to purchase from Big
3,784.9 acres of land on or

company

Trail

Corp. some
before May 1,1959; and the
remaining 120,000 shares are
to be sold for the account of a
selling stockholder. Un¬
derwriter—None.
•

Lithium Corp. of America
(4/22-24)
March 31 filed 50,484 shares of common
stock, of which
18,984 shares were sold to the underwriters in
February,
1959. Price—At
prevailing market price on the American
Stock Exchange at time of
offering. Proceeds — For
working capitaL Office
Minneapolis, Minn. Under¬
—

writers—Bear, Stearns

& Co. and John H.
Kaplan & Co.

•
Lockwood, Kessler & Bartlett Inc. (4/21)
March 25 filed 150,000 shares of class A
stock, of which
100,230 shares are to be offered for the account
of the
company and 49,770 for account of
selling stockholders.
Brice—1To be supplied
by amendment. Proceeds—For
working capitaL
Office—Syosset, Long Island, N. Y.
Underwriter
Francis I. du Pont &
Co., New York.
Lorain Telephone Bo.
—

>

®"ek; 11 (letter of notification)

atock

1,562 shares of

common

(no par) to be offered for
subscription by stock¬
holdersi at the rate of one new
share for

approximately
the close of business on
17, 1959; rights to expire on May
15, 1959. Price
—-J32 per share. Proceeds—To reimburse the treasury.
Office—203 W. Ninth
St., Lorain, Ohio. Underwriter—

75.1729 shares held at

2

March

None.
•

Loral Electronics
Corp. (4/28)
April 1 filed 250,000 shares of common
stock (par $1).
Price—To be supplied
by amendment. Proceeds—To in¬

crease inventories
and for general
corporate purposes.
Off ice—825 Bronx River
Ave., New York, N. Y. Under-

^iters—bidder Peabody

Stone, both of New York.
LuHoc

& Co. and Model, Roland

&

held

the rate of

one

new

Restricted

company's

Stock

Under-

Proceeds

—

of common stock.
For the acquisition of




Price

$1
properties

,

kiedow Oil Tool Co.

May 5 (letter-of notification) 150,000 shares-of common:
stock (par one cent). Price—$2 per share. Proceeds—To*
pay loan; to acquire, fishing tools for leasing; and for ?
working capital. Office—931 San Jacinto Rldg., Houston, *
Tex. Underwriter—T. J. Campbell Investment
Co., Inc.. ;

V'-::,

Houston, Tex;
•

♦ *.

r

h-.

±^

-

..

*•

New York

Shipbuilding Corp.
7; •
f v.'/ r"March 3 filed 621,353 shares of common stock. Price—'
To be supplied by amendment. To be offered from time '

share for each two shares

April 22, 1959 (after giving effect to the 2-for-l
1959). Price—To be
to time either on the New York Stock
Proceeds—To increase capital •
Exchange at price \
and surplus. Office—83 Exchange St.,
Portland, Maine. . prevailing at time of sale or by public or private sale'
at related prices. Proceeds
Underwriter—P. W. Brooks & Co., Inc., New York.
To Merritt
Chapman &
■'//
Scott Corp., the selling stockholder. Underwriter—None, /
Maine Public Service Co.
(4/27-30)*-..
Statement 'effective March 26: •
April 1 filed 50,000 shares of common stock (par $7)/
7 New
Price—To be supplied by amendment;
York Shipbuilding Corp. 7
Proceeds—For
' ,
March .20 filed 83,334 shares of common stock, to berepayment of bank loans incurred for construction pur¬
offered in /exchange for common stock of Higgins,
poses.
Underwriters—A. G. Becker & Co., Inc., Merrill
Inc.,/
at the rate of one share of New York
Lynch, Pierce, Fenner & Smith, Inc., and Kidder, PeaShipbuilding com-t
mon for each 24" shares of Higgins common.
body & Co., all of New York.
7
7
on

supplied by amendment.

-

•

Mary Carter Paint Co.
30 (letter of notification) 37,500 shares of com¬
stock (par $1) of which 25,000 shares are
being
offered by the company, out of authorized but unissued
stock, and 12,500 shares are being offered by John F.
Crosby, Spring Lake, N. J. Price—$8 per share. Proceeds

-

.

mon

Fla.
Underwriter
Henry & Associates, Inc.,
cningo Plaza, Hialeah, Fla. 7 ^-7
;
:
.

capi¬
Office—Gunn Highway

share.
for

Oil, Gas & Minerals, Inc.
April 2 filed 260,000* shares of common stock (par 35/
cents.
Price—$2 "per share."" Proceeds—To retire bank*
loans and for investment purposes. Office—513
Interna-*;
tional Trade Mart, New Orleans, La.
Underwriter—*'*.
Assets Ihvestnfent Coiy Iiic:, New Orleans. La.

/

March 17 filed 400,000 shares of common stock. Price—

$3.75 per share. Proceeds—For general corporate pur¬
poses. -^Office—1404 Northwestern Bank
Bldg., Minne¬

Underwriter—None.

Millsap Oil & Gas Co.

O. K. Rubber

Dec. 23 filed 602,786 shares of common stock.
Price—$17
share. Proceeds — For additional
working capital.
Office—Siloam Springs, Ark. Underwriter—None.
*

The stock

of 3y4%

,V
stock

(no par) :

will

of Montana.

be offered only to bona fide residents"
Price—To be related to the current market

price on the New York Stock Exchange. Proceeds—To- "
gether with other funds, to carry on the company's con-1
struction program through 1959.
Manager-Dealers
:
Smith, Barney & Co., Kidder, Peabody & Co. and Blvtb

■

-

K.

Rubberj Inc.; and O. K. Ko-op Rubber Welding 7
on an alternative basis. Proceeds—Of the public
offering, will be used for additional working capital '/
and/or to service part of the company's debt. Office— '
551 Rio Grande 7Ave./: Littleton, Colo.
Underwriter— '
None.
7. r'?
/;. •■//,'
7 / 7

March 30 filed 130,000 shares of common

stock, of which
are
being sold by certain selling stock¬
60,000 shares by company (10,000 shares
to employees and
50,000 shares to public). Price—To be
supplied by amendment. Proceeds—For working rcapital. Office—East Aurora
(Buffalo), N. Y. Underwriters7
70,000

T

stock, $43,333.33

common

System,

Co., Inc. Offering—Indefinitely postponed.
Moog Servocontrols, Inc. (4/23)

m

shares

holders

Welders, Inc.

60,600. shares of

debentures maturing op or before May 6, 1965.'

$692,00Q of 0% debentures maturing on or before Dec '
31, 1974 and" $123,000, of 7% debentures due on or
before^
May 6, 1965. The company proposes to make a public t
offering of 25,000, shares of common stock /at $10 pei 7
share.
The remaining shares and the debentures arc 1
subject to an exchange offer between this corporation'
O.

—

•

15 filed

Dec.

per

common

class B

one

International Trade Mart, New Orleans 12, La. - Under¬
writer—Assets Investment Co.^Inc., New Orleans, La.
*

>

7'

shares and

Proceeds—To be available-,

estate

: \
t
...
«,
^
\
Oil, Gas & Minerals, Inc.
.
i
; u
Nov. 16 (letter of notification) 116,000 shares of common
stock (par"35 cents).
Price—$1 per share.
Proceeds—
For development of oil and gas properties.
Office—515

Proceeds—To be added to the general funds of the com¬
and be used for corporate purposes. Underwriter
—None.
'•!

Power Co.

Price—$100 per-unit.

investment in real

—None:.;v

pany

Montana

,;

<-~

,

syndicates and other real ;
estate. Office—9.Clinton St., Newark, N. J. Underwriter?

April

6, 1959; rights to expire on April 24 (with an oversub¬
scription privilege). An additional 29,900 shares are
being or will be offered pursuant to the company's
Employees Stock Option Plan. Price—$45 per', share.

July 1 filed 100,000 shares of

in units of nine class A

offered

Mergenthaler Linotype Co., Brooklyn, N. Y.
17 filed 116,541
shares of capital stock, being
offered for subscription by stockholders at the rate of
March

apolis, Minn.

„

Office Buildings of America, Inc.
•
5
April 6 filed 91,809 shares of class A stock (par $1) and
10,201 shares, of- class B common stock (par $1) to be'

tal, and to selling stockholder.
Henderson Rd., Tampa 7, Fla. Underwriter^—W. W.
Schroeder & Co., New York 5, N. Y.
at

Midwest Technical Development
Corp.

11 Fla-

—

—For payment of outstanding loans and
working

share for each four shares held of record

.

Oak Ridge, Inc. .
T
Sept. 4 (letter of notification) 100,000 shares of common)
stock (par $1).* Price —- $3 per share. Proceeds — For
working capital.
Office—11 Flamingo Plaza, Hialeah,

March

Oppenheimer Fund, Inc.

and

Dec.

5

-

/

filed

100,000 shares of capital stock. Price—A\ \
market (abqut $10 per share), Proceeds—For invest- r
ment. Office—25 Broad St., New York. Underwriter—
;
Oppenheimer & Co., New York.
.
;T
7
•
?

—Kidder, Peabody & Co., New York; and Blunt Ellis'& Simmons, Chicago, 111.

.

•

Ozark Air

Lines, Inc.
March 24 (letter of notification) 59,825 shares of gen-,
eral common stock :(par $1) to be offered for subscrip¬
tion by holplers of class A. and class B common stock
;

• Morrell (John) & Co.
April 13 filed 11,900 shares of capital stock,
representing,,
the number of shares
initially issuable upon exercise:
and/or plpss B common stock" evidenced by .a voting \
of stock options under the
company's 1957, Restricted c
trust certificate, one/ share -of general common stock for,
Stock Option Plan, plus an
additional; 28,100 shares

which remain available for the
purpose of stock
under said Plan.
'
J
;
'

J

options'/
"

"

"

-

it Mortgage Corp. of America -.-//V
April 10 filed $1,000,000 of 4%% collateral; trust
notes,*
due May 1, 1969-79.
Price—100% of principal amount.
Street,

Baltimore, Md.

each 20 shares of class A and class B

stock

common

of,

record Apr,-14, T959; rfghts to expire oil Apr. 23. Price—,
$4.25 per share/to stockholders:; $4.75 to public. Proceeds,
—To. purchase additional flight and ground -equipment.ahd for WOrltirig c'ap4t51v';AddreSs—P. O. Box 6007, Lam--

,

,

Proceeds—For repayment of loan.-Office—100 St.:Paul

bert

Field,' St, Louis 21; Mo.: Underwriter—None, but^
Newhafd, Cook and "Cd.'and YateS. Heitnen &: Woods, I
Louis, Mo./ offefed Jo purchase .the unsub.

Underwriter—None::/ " /

both of St.

^Mutual Investment Fund, lnc<, New York
:
April 8 filed (by amendment) an additional
1,000,000
shares of capital stock.
Price—At market./Proceeds—

seribed Shares:

,

•

v

.

'

Paddock of California
7"
30 ffled' 51,847 outstanding

March

shares of commonFor investment.
' ''
■ /
stock (par'$lp to be offered /'only to stockholders and 7
National Gypsum Co.
;
' 7
,7 directors of The Refin'lte Corp. and will.not be offered/
April 6 filed 1,014,300 shares of common
to the general public.'/ Price—$3 per share. Proceeds—"
stocky to be of¬
fered in exchange for all but not less than
98% of the: To selling stockholders, The Refinite Corp.
Office—8400;
outstanding common shares Of Huron Portland Cement' '• Santa
...

.

Co. in the ratio of 7/10 of
each share of Huron stock.

a

.

.

share of National stock for
'
"
;
~
.

National Life & Casualty Insurance Co.
March 25 filed 250,000 shares of common
capital stock,
to be offered to holders of certain of
company's life,
insurance policies issued on or prior to Dec.
31, 1955,

and to certain

employees. Price—$4.44 per share. Pro¬
capital and surplus. Office
2300 7
North Central Ave.,
Phoenix, Ariz. Underwriter—None.1
ceeds—To

increase

—

• National Tea Co.
April 8 filed 211,315 shares of

Mining Corp.

Sept. 29 filed 350.000 shares
per share.

stock at

&

Jan. 29 filed 3,492,000 shares of

of

'

■

Thursday, April 16, 1959

fice—1250 Wilshire Blvd., Los Angeles
17, Calif.
writer—Waldron & Co., San Francisco 4, Calif.

Price—$63

and

Maine

one new

Kratter Corp., New York
March 16 filed 2,719,950 shares

B

shares.

the

.

•

Inc.

Nov. 28 (letter of notification) 200,000 shares of common
Stock (par 10 cents). Price—$1 per share. Proceeds—To

Stock

common

stock split scheduled for April 22,

Underwriter—Paul C. Kimball & Co., Chicago, 111.

ployees

five

Fidelity Life Insurance Co. (4/28)
March 30 filed 100,000 shares of capital stock (par
$1.50)7
to be offered for subscription
by holders of outstanding

'

—

and

Proceeds—For drilling

exploration pro¬
gram; and for working capital, and general corporate
purposes.
Office—Virginia & Truckee Bldg., Carson
City, Nev. Underwriter—J. Barth & Co., San Francisco,..

Sunrise

Investors Commercial Corp,
April 6 filed 105,000 shares of common stock. Price—To
be supplied by amendment. Proceeds—To selling stock¬
holders.
Office
180 W. Randolph St., Chicago, 111.

share

unit.

per

to

.

Naylor Engineering & Research Corp.
Sept. 29 (letter of notification) 300,000 shares of cumu¬
lative voting and non-assessable common stock. Price—
At par ($1 per share): Proceeds—For
organizational ex-,
penses and first three months' operational expenses. Of-,

Magma Power Co. (5/11-15)
~
April 3 filed 100,000 shares of 6% convertible preferred
stock (par $10) and 500,000 shares of common stock
(par 10 cents) to be offered in units consisting of one

Boulevard, Fort Lauderdale, Fla. Underwriters—Aetna
Securities Corp., New York; and Roman & Johnson, Fort
Lauderdale, Fla.

Itemco

ployees pursuant
Option Plans.

•

Investment Corp. of Florida
(4/27-5/1)
April 13 filed 275,000 shares of common stock. Price—
$4.50 per share. Proceeds—For acquisition and develop¬
of

geological expenses, tesi

Underwriter—None.

stock (par two cents).
For capital account

ment

option and for various

drilling, purchase of equipment, and other similar pur¬
poses.
Offices—Wilmington, Del., and Emporium, Pa

Investment Corp. of Florida
Oct. 9 (letter of notification) 55,555

.

upon

issued

exercise of options

common

which have

stock, deliverable
been

or

may

by the company to officers and other key

be

em¬

Monica-Boulevard, Los-Angeles, Calif. U^derwrit-)
?V"'
_*: -'' *
;/"

er—None, -'-/

-

.

„

Paramount Mutual Fund, Inc.
Jan. 2 filed

300,000 shares of capital stock. Price—Mini- 7
purchase, of shares is $2,500.: Proceeds—For invest- •
Office1—404 North Roxbury Drive, Beverly Hills. "
Calif. Underwriter—Paramount Mutual Fund Manage-,*
ment Co
/ *
'
V
.<•
*
mum

ment.

.

it Park A

-

-

Shop Alexandria Corp. <
April 3, (letter, of notification) 2,500 shares of common 7
stock.
Price—At Par ($100 per share).
Proceeds—To.
prepare lots and purchase equipment and for working
capital. Office—124-126 S. Royal Street, Alexandria, Va..
^Underwriter—None.
.

,

Pearson Corp.

;

<••* \.w

•

Public Service Co. of Colorado

.

March 26

notificatiou>)v;175,Q00 shares of. com¬
mon stock (par 25 cents).
Price—$1 per share.-Proceeds
—-To repay ' short-term loan • and for working v capital.
Office—1 Constitution St., Bristol, R. 1. Underwriter—
R. A; Holman & Co., Inc., New York, N. Y.
March. 30 •fletter of

-

Peckman Plan Fund,

Pasadena, Calif.,;

Inc.,

Price—At

Writer—Investors Investments Corp., Pasadena* Calif.

*Penbertfty Instrument Co.

Ktv*,-:V'&•<> Bids—Expected• to- be^received up to 11 a.m. (EDT) on
■,AP^L28.
•/

Inc£ ; ^

notification) 35,062 shares Oficlass A
and 1,635 shares of Class B
(par $2.50).- Price—For class A stock,

March 26 (letter of
ccmiiton

(par $2.50)

srock

commofe

stock

★ PublishersCo.,lnc.
April 7 (letter of notification) 150,000 shares of class A
common
stock- (par
10 cents).
Price — $2 per share.
Proceeds
To reduce short term borrowings, purchase

-

share;, lor- class B stock; $6.25 per share. Pro¬
products program and work¬
taprtal.. Office—4801 6th St. South, Seattle 8, Wash.

$5.50

ceeds—FeT equipment, new
ings

Underwriter—Nonev>
/#

.V

.

r-r

Underwriter

determined by competitive bidding. Probable
Halsey, Stuart" & Co. Inc.; The First Boston
Corp.; Blyth & Co., Inc. and Smith, Barney & Co. (joint¬
ly); Harriman Ripley & Co. Inc., Eastman Dillon, Union
Securities & Co., Merrill Lynch, Pierce, Fenner & Smith
yInc. and Dean Witter & Co. (jointly); Lehman Brothers,
Kidder, -Peabody & Co. and White, Weld & Co. (jointly).
1To be

bidders:

;

—

advertising machinery, finance sales and
for working capital.
Office—1116 18th Street, N. W.,
-Washington 6, D. C. Underwriter—None.
collection and

v-fi

-

York City "(4/22-24) '
March 31 filed 1,500,000 shares of common- Stock to be /■
Purepac Corp., Now York
Offered for subscription by common stockholders at rate / March 31 filed 260,000 shares of
Pernr-Texas Corp., New

stock (par five

share for each four shares held on or about v cents), Price—$3 per share. Proceeds—To repay loans
April 2L -1959; tights- to expire,,on or about May 6, 1959.
and for general corporate-purposes. Business—ManuPrice—-To .be supplied by amendmenL j P^ocee^s^— To •; fapturers and packager of proprietary drug items.
Unpurchase additional stqck of Fairbanfo,;MQ^^VCdt- and/>;: derwriter — - Rtehard Bruce & Co. Inc., 26 Broadway,
for repayment of loans. Underwriter7**+- Bear/ Stearns & - "New York 4, N. Y. y •
:
.

,

*

.•Gp.^ffew^jfork.;
■M- Pennsylvania

^ ^Puritan Chemical Corp.

Power
Aug. 1 filed $8,000,000-o|.first ;mortgage bonds due ,1989
^Proceeds—To redeem a like amount ol 5% first mort
.

.

(4/30)

.

500,000 shares of capital stock (par 10
cents. ^ Price—$1.25 per share.
Proceeds—For working

March

.

filed

30

¬
capital and general corporate purposes. Office—2 South
bonds due 1987. Underwriter—To b.e determines
-Broadway, Lawrence, Mass. Underwriter—Dunne & Co.,
by competitive bidding. Probable .bidders: Halsey, Stuars ■/New York; '
■*£/\; :
.
■
:/& Cov inc.; Kidder, Peabody & Co.; White Wejd & Co.--;
Raindor Gold
Min^s, Ltd.
Equitable Securities Corp., and Shields & Cd.' (jointly
Jap. 28 (letter of notification), 290,000 shares of common
Lehman Brothers, Eastman Dillon,; Unioh.Securities A
stock (par $1). Price—$1 per share. Proceeds—To prove
Co., Salomon Bros. & Hutzler and Ladenburg, Thalman:
up ore and for road and camp construction. Office—At
[8c Cq4(jointly); Merrill Lynch, Pierce, Fenner & Smiu
Suite 322, 200 Bay St., Toronto, Ont., Canada, and c/o T
and Dfean Witter & Co. (jointly).
Bids r— Tentative! Arnold, Wilson Circle; Rumson/ N. J. Underwriter—
Ibad heen expected to be received ;up to j.1 icm.fEDT
S Co New Ynrk N Y

St.

.

-

Cupples-Hesse Corp. on the basis of .644 of a share
Regis common for each share of Cupples common.
Regis will declare the exchange offer effective i^
100% of the outstanding shares of Cupples stock is de^
posited in exchange, and may elect to do so if a lesser
percent, but not less than 80%, is deposited.

of

of St.

St.

Santa's Village,

Perfecting; Service Co.

sinking fund debentures due 1974. Price—At 100% of
principal amount. Proceeds — For completion of East
Dundee

'"3.-...-iu

'..:-'
-•.Permanent Filter Corp.;.;;V,
'ApriL 7 filed -140,000 shares of corhmon .stockj of ' which
120,000 shares are to be offered for account of the com¬
pany,

and

Underwriter—None.
Underwi

purposes.

Rassco

.

20^000 shares for account of selling stockholder.
"supplied by amendment. Proceeds — For

Price—'To ;be

•

Servonics, Inc.
(letter of notification) 133,000 shares of convmon stock
(par $1). Price—$1.50 per share. Proceeds—
For general corporate purposes.
Office—822 N. Henry

St., Alexandria, Va.
Shares in American Industry, Inc.
12 filed 50,000 shares of common stock.

Dec.

debentures
:

^

for

rate

each

300

of

$100

common

T6 be supplied by amendment.

Sheridan-Belmont Hotel

Silver Creek Precision Corp.
30 filed 1,550,000 shares of

common stock (pair
cdnts), of which 200,000 shares are to be offered fdHr
account of the company, and 1,350,000 shares for
account of selling stockholders. Price—To be supplied

March
10

Proceeds—To pay debt

the

Proceeds—For working capital. OfficeSilver Creek, N. Y. Un¬
derwriter—Maltz, Greenwald & Co., New York..
*
by amendment.

Central Ave. and Mechanic St.,

.working- capital. '

8IMCA Societe Anonyms,

Price—To

be

by amendment.

supplied

Proceeds:— To/

-New

York./

i

.

>.:v.

—

it Pittsburgh Standard Conduit Co. (4/27-5/1)
April 9 filed 75,080 shares of capital; stock (par $5).
Price
To be supplied by amendment.
Proceeds — To,;

*

—

?

repay

other

,

sort-term bank loans^ for- working capital and
corporate purposes.; Underwriter—Lee Higginsoh
.

_

St., New York, N. Y.

& Co. and Netherlands

April 27, 1959; rights to expire on or

amendment.
retire bank
loans, and for working capital. Office—55 Triangle St„
;Danbury, Conn/ Underwriter—-Laird & Co., Corp., Wil¬

Underwriters—Charles Plohn

Securities Co., Inc., both of New

.'

Fund of America, Inc.
filed 200,000 shares of capital stock. Price—At

Research Investing
24

Feb.

Proceeds—For investment
Office—Englewood,
Underwriter—First Mutual Securities of America,
!

"market.

Richwell

i

Petroleum

Ltd.,

Alberta, Canada

1,998,716 shares of common stock (par $1)
Of this stock, 1,174,716 shares are to be sold on behalf o 1
"he company and 824,000 shares for the account of cer¬
tain selling Stockholders. The company proposes to off®
the l,174,71f? shares for subscription by its shareholder!
at the rate of one new share for each three shares helf
fune 26 filed

(with an oversubscription privilege). The subscriptior
Tv
.period will be for 30 days following issuance of subMesa, Ariz. ~
»cription rights. Price—To be supplied by amendment
March 31. filed 400,000 shares of common, stock to be
Proceeds—To pay off demand note, to pay other indebt¬
offered for subscription by holders of-stock purchase
; rights acquired in connection with life insurance policies « edness, and the balance if any will be added to workinj
capital. Underwriter — Pacific Securities Ltd., Van
issued by Dependable Life Insurance Co. ajnfd to certain
couver, Canada.
"agents and brokers of Producers Fire & Casualty Co.
Roanoke. Gas Co.
'Price—$5 per share.
Proceeds—For working capital..
Underwriter—None.
/ .,*■ V/
"
March 19 (letter of notification) 17,732 shares of com¬
'
1

York, N. Y.

Producers

:'k}^

'

Fire & Casualty Co.,

'

•

.

*

•

^

'

Prudential Enterprises, Inc.
"Jan. 15 (letter of notification) 200.000 shares of common

mon

stock
sold

rights

and working capital,- Office—1108
N.W., Washington 6, D. C. Underwriter—
/John C. Kahn Co., Washington, D. C.
>
general

expansion

"

16th

Street,




the
123

shares hqld

(with an oversubscription privilege);

to expire on May 15, 1959.
Price—$16.75
Proceeds—To repay short-term bank loan

per

and
installation and construction of additional mains for
purpose of extending distribution facilities.
Office—
Church Avenue, Roanoke, Va.
Underwriter—^None.

share.
for

(par $5) *o be offered for subscription by
stockholders on the basis of one share for each

stock

common
seven

(par one cent) of which 170,000 shares are to be
by the company and 30,000 shares by a selling
stockholder.
Price — $1.50 per share.
Proceeds — Foi

-

24

filed

1,000,000

additional Capital Share for each Capital
(with an additional subscription privilege).
supplied by amendment. Proceeds—To be
added to the general funds of the company and used
for general corporate purposes.
Underwriter—None.
held,'

Share

or

one

held

Price—To be

Sip'n Snack Shoppes, Inc., Philadelphia, Pa.
of common stock. Prlce:—

mington, Del.

.

April 6 filed 175,000 shares of common stock (par 75
cents). Price — $5 per share. Proceeds — For working
capital; to reimburse the predecessor for certain devel¬
opment expenses; for inventories and work in process;
and other general corporate purposes.
Office—120 E.
41st

about

11. Price — To be supplied by
Proceeds—Fpr property and equipment, to

Inc.

(4/27-30)

Electronics Corp.

or

on

about May

N. J.

•Corp., New York.
Precon

held

of France
*
shares of capital stock, par
value 5,000 French francs (U. S. $10.12) per share, ami
equivalent 2,000,000 American shares representing such
1,000,000 capital shares (two American shares represent
one
capital share).
The company proposes to offer
holders of its American shares on April 13, 1959, and
holders of its capital shares in the United States, lib
territories and possessions, the right to subcribe for
one additional American Share for each American Sharp
March

'■

"Selling stockholders. Business ■/- Producer of decorative
•laminated plastics. Underwriter—Reynolds & Co., Inc.,

Co.

At par. Proceeds—For "working capital. Office — 3171
North Sheridan Rd., Chicago 14, 111. Underwriter—None.

April 10 fUed 221,883,614 shares of capit^rstock, to be .; and for development of present properties and acquisi-^
offered fbri subscripfion by holders of;;ppfstahdi/ilg Stock .riioh; and development of additional oil and gas properat ihe ratP; of one pevv share/for eaCh' tvVo 'Shafes held.
,tiPs. Underwriter—Emanuel Deetjen & Co., New York.
Price—To: be
by amendment/,, rroceeas—ror
. #
R|k(
jPrice^ToCbe supplied by Amendment.//Proceeds—For; /# Reon Resistor Corp. : (4/20-24)
.
■

-

Price—Al
1033-30th

Aug. 19 (letter of notification) $250,000 of 6% convertible
debentures due Sept. 15r1963 to be offered for subscrip¬
tion by common stockholders on a prq rata basis. Price—

principal. amount of
shares held. Price—

Office—Soriano Building, Plaza Cer-.. Anril 2 (letter of notification) 150,000 shares of common
VahteS/ Manila" (;F/1,).Underwriter—None: ^
stock (par ope cent). Price—$2 per share. Proceeds—To
ykr PhilFii»« .P«trol«iam Co.../• .*. S '■/ r*iirr»h
J.% Phillips....PetlroldMm^^^Co../ .' /purchase new equipment; for payment of chattel morth April 9 filed ,750,000 shares ".tit. comnfom stock,'' reserved
,gage and loans and for general working capital. Office—
.for issuance/upon exercise ofjoptions.jg{ran|ed^dr to bek%H7 Stanley Ave., Yonkers, N. Y. Underwriter—Charles
[granted-to certain key employees of the company and . piohn & Co., New York, N. Y.
/its. subsidiaries pursuant/to the; Key Employee Stock
:• Republic Foil Inc.
(4/27)
iOption Plan.
^ '' J.:.;.'.'./*/'1 'ffe
March 26 filed 70,196 shares of common stock, to be
\
-^offered for subscription by holders of outstanding shares
ir Pioneer Plastics Corp;, Sanford,
upon the basis of one new share for each three shares
April 15 filed 150,000 shares of common stock (par $1).

—

St., N. W., Washington 7, D. C. Investment Advisor—In¬
vestment
Fund
Management
Corp. Former NameShares in America, Inc.

Oil Corp.

che

Proceeds—For investment. Office

market

.,

J969, to be /offered for subscription by common
at

(5/4-8)

March 25

Financial Corp.

stockholders

Seaboard Plywood & Lumber Corp.

Service Life Insurance Co.

March 30 filed $1,500,000 of 6% convertible debentures

gelling ^stock-

k

sold first to present

Sept. 26 (letter of notification) 3,567 shares of common
»tock (par $1). Price—$18.75 per share.
Proceeds—-T6
go to a selling stockholder. Office—400 W. Vickery Blvd,
Fort Worth, Tex. Underwriter—Kay & Co., Inc., Hous¬
ton, Tex.

filed $1,000,000

Re iter-Foster

42,500 shares Of common stock, which

be offered and

shares of common stock. Price—
$3 per share. Proceeds—For expansion of present prod¬
uct lines and acquisition of new related lines. Off ice—
17 Bridge St., Watertown, Mass.
Underwriter—Petefr
Morgan & Co., New York.
*

./Rassco Israel Qprp ^.Nm York, ,op a "best effprJfL:

Proceeds-^To

*

March 27 filed 150,000

of 15-year 6% series A sinkini
hind debentures due 1973, to be offered in denomination!
; »f $500 and $1,000; Price—At par. Proceeds—For work
ng capital and general corporate purposes. Underwritei
26

»une

purposes.

stockholder!
at the rate of one new share for each eight shares held
on April 1, 1959.
Price—$10 per share. Proceeds—For
increased plant facilities, for purchase of equipment,
working capital and other corporate purposes. -Office-^
202 South Division St., Northfield, Minn. Underwriter
—Craig-Hallum, Inc., Minneapolis, Minn.:
^
to

are

shares held. Price—To
Proceeds
To be armlied in
company's

».■

23 filed

March

iePulonase ana retirement 01 tne company s

None.

working

Schjeldahl (G. T.) Co.

/Feb. 26- (letter of notification );28,2§0.. shares of ./Common . ,
oimnliod hv imenriment ••
.-•stock to be offered for subscription by ^tockMders on
^a pro rata basis.
Rights expire in 15 days. Price—At pai - 5%%to me
part convertible subordinated debentures presently out¬
($10 per share). Proceeds—For accounts receivable and
standing, in full,i at par plus accrued interest to the
and the balance for general corporate
inventories., 'Off i<st-332 Atando Ave., Charlotte,N. C
i
-Underwriter

Chicago);

new amusement park near
capital and other corporate

Village (a

for

Underwriter—None.

debentures for. each 10 common

,

Skyforest, Calif.
convertible subordinated

March 27 filed $800,000 of 6%

-

-

Regis Paper Co.

March 27 filed 58,000 shares of common stock (par $5)
to be offered in exchange for outstanding common stock

gage

;;on Aug* 27 but company, on Aug :22 "decfded/fo;. def» ;
New. York, N..Y.
eiala.
in mprlrpt '•nftnriitihnc*
S-'-^-'Rauid-Ar
/sale pending- improvement in / market" cohditmnS:r SEC/^★ ^Pirf"Amenca»^Corp.;'New-York
,
. ' ,
^
j on Feb; 25, 1959 extended to June 16, 1959 period within
April 13 filed $7,209,640 of convertible subordinated dc; which company may consummate financing.
bentures common stockholders in the ratio ofsubscripdue April 30, 1964, to be offered for $100 of
tion by

Investment Corp.

shares of common stock. Price—$1
share.
Proceeds — For investments and working
capital. Business — Real estate investments.
Office *—
Alexandria, Va. Underwriter—None.
per

qf .9ne.15ew

.

59

Jan. 29 filed 475,000

and

common

Robbins

Routh

(4/28)

filed£$20,000,000* of first mortgage bonds due

tl98{k -Proceeds—For construction program.

r

19 filed 20,000 shares of common stock (par $l, 1
market.' Proceeds—For investment;
Under

May

(1783)

The Commercial and Financial Chronicle

Number 5838

189

Volume

March 31 filed 200,000 shares

$2 per share. Proceeds—To pay loans and for new
ment.

Undei writer—Sano

& Co.,

equip¬

New York.

^ Socony Mobil Oil Co., Inc.
April 10 filed $23,000,000 of interests in the Employees
Savings Plan of the company, together with 460,0(10
shares of capital stock which may be acquired pursuant
to

said plan.,

ic Sorrels-Johnson Corp.
April 8 (letter of notification) 188,000 shares of com¬
mon stock.
Price—At par ($1 per share). Proceeds—For
construction, machinery and equipment; material and
supplies and for working capital. Address—Timber/
Ridge Ranch, Woodland Park, Colo. Underwriter—None.

Development Fund (4/22)
filed $30,000,000 of guaranteed external loan
bonds (guaranteed as to payment of principal and in¬
terest by the Republic of Italy). This Will include $5,000,000 of four-year bonds due May 1, 1963; $5,000,000
of five-year bonds due May 1, 1964; and $20,000,000 Of
15-year sinking fund bonds due May 1, 1974. Price—To
be supplied by amendment. Proceeds—For public works
and improvement projects. Underwriter—Morgan Stallley & Co., New York.
.
,
,
Southern Italy

April

3

it Southern Natural Gas Co.
April 14 filed $2,950,000 of participations to be offered
to eligible employees under the company's Stock Pi

Continued

on page

60

60

(1784)

The Commercial and Financial Chronicle

Continued jrom page 5i)
chase Plan, together with 71,951 shares of
Which
•

be acquired

may

^ Telephone Utilities, Inc., Ilwaco, Wash.
March 31 (letter of notification) 6,000 shares of pre¬
ferred stock (par £25) and 50,000 shares of common
stock (par $1).
Price—Of preferred, at par ($25 per
share); and of common, $3 per share.
Proceeds —To
complete purchase of The Island Empire Telephone &
Telegraph Co. and other telephone companies. Under¬

common stock

the plan.

pursuant to

Southern Nevada Power Co.

(5/11)
April 6 filed £5,500,000 of first mortgage bonds, series D,
due 1989. Proceeds—Together with other funds, will be
used to repay temporary bank loans, and to refund the
6lightly less than $4,000,000 of series "C" oxk% mortgage

Texfel

(4/27-28)

Underwriters—Bache

April 6 filed 75,000 shares of cumulative preferred stock
(par $20)i Price—To be supplied by amendment. Pro¬
ceeds—Together with other funds, will be used to repay
temporary bank loans. Underwriter—White, Weld & Co..

New York.

Southern Union Gas Co.

March 19 filed 442,731 shares of
4.64%. cumulative con¬
second preferred stock
being offered for sub¬
scription by common stockholders of record April

vilege);

to

($25 per share).:
for

ferred

of one share of preferred for each
shares held (with an
oversubscription pri¬

rights

constiiiction

expire on May 1.
Proceeds—To repay

program.

Price — At par
bank loans and

Power

Smith

Inc., and Eastman Dillon, Union Securities &
(jointly); Equitable
Securities
Corp.;
Lehman
Brothers; JCuhn, Loeb & Co.; Blyth & Co., Inc. Bids—
Expected to be received up to 11:30 a.m. (EDT) on
May 12.

stock.

President.

Title Co.
four

■

round

■

,V

.

;

Packaging; Corp.
April 1 filed 43,067 outstanding shares of common stock
and 28,834
outstanding shares of $1.20 convertible pre¬
to be offered from time to time

of

March 31

(letter of notification) 200,000 shares of
Class
Price—$1 per share. Proceeds—
For general corporate
purposes, and to acquire television
film series for distribution. Office—6
East 39th St., New
York 16, N. Y. Underwriter—R.
A. Holman &
Co., Inc..
New York
5, N. Y.
'
•'

mort

common

— 79 Ben Yehuda St., Tel Aviv, Israel.
Underwriter—American Israel Basic Economy
Co., New
S




..

t'\."

<■

S

^

H -A bri$

"V

by

construction

a

of

a

stock

Proceeds—For
"Western Village"

Calif.

,

-

Graham

Underwriter—To be named by amendment
Albert Griswold of Portland,
Ore., is Pres¬

--->

teuo-i

'

V

•

"

il

mm

Underwriter—Dean Witter & Co.,
Chicago, 111.

Western Wood Fiber Co.
March 5 filed 100,000 shares of

.

common

and

stock {par $10)

40,000 shares of preferred stock (par $25). Price —
Proceeds—For construction and + equipment of
company's plant and for working capital. -Office—300
Montgomery St.,- San Francisco, Calif. > Underwriter—
par..

None.

Wilmington Country Club, Wilmington, Del.

.■

•

/

Oct. 27 filed $500,000 of debentures due 1991
(non in¬
terest bearing) and 800 shares of common stock
(par.
$25) to be offered to members of this club and of
Concord Ltd. Price—$375 per common share and

$1,000

debenture. Proceeds — To develop property
build certain facilities. Underwriter—None.

per

and

Wometco Enterprises, Inc. -(4/20-24)
March 27 filed 325,000 shares of class A common
stock,
of which 290,000 shares are to be offered to
public and
35,000 shares to officers and employees of the
Price—To

company.

be

supplied

by

amendment.

Proceeds—To

selling stockholders. Business—-Operates motion picture
theatres, and television and radio stations. Office—30$
North Miami Ave., Miami, Fla. Underwriter—Lee
Higginson Corp., New York.
'

Wyoming Corp.
Nov. 17 filed 1,449,307 shares of common stock. Of
thesa
shares 1,199,307 are subject to partially
completed sub¬
scriptions at $2, $3.33 and $4 per share; and the addi¬
tional 250,000 shares are to be offered
initially to share¬
holders of record Nov. 1, 1958, in the ratio of one new
on that date.
Price—$4
Proceeds—$300,000 will be used for payments
purchase shares of International Fidelity
Insurance Co.; $325,000 for capitalization of a fire insur¬
ance company; $500,000 for
capitalization of a title insur¬
ance company; $500,000 for additional
capital contribu¬
tion to Great Plains Development
Co.; and $300,000 as

per share.
on

contract to

additional capital contribution to Great Plains Mort¬
Office—319 E. "A" St., Casper, Wyo. Under¬

gage Co.

writer—None.

Prospective Offerings

*y~,

Bank of

Commerce, Washington, D. C.

record

each

May 29, 1959, on the basis of one new share for
shares held; rights to expire on June 30.

three

Price—$150
and

per

share.

Proceeds—To

increase

capital

surplus.

★ Bank of Montreal

(5/1)

;

April 7, it was announced Bank will offer to. its stock¬
holders of record April 17, 1959 the right to subscribe
or before July
10, 1959 for 675,000 additional shares
capital stock on the basis of one new share for each
eight shares held. Price—$32 per share, payable in 10
monthly installments from July 10, 1959 to April 8,
1960.
Subscription Agent—Royal Trust Co.,.
on

of

Canada.

qk

(5/29)

Feb. 26 stockholders of the Bank
approved the sale of
2,000 shares of capital stock (par $100) to holders of

.

April 30,1957 filed 1,250,000 shares of common stock
(par
18 cents). Price—To be suDDiied
by amendment (ex¬
pected to be $1 per share). Proceeds—For exploration
purposes.

.

(letter of notification) 36,000 shares of com¬
(par $1). Price—$8.25 per share. Proceeds—
To repay outstanding bank loans and for
working capi¬
tal. Office—300 Montgomery Street, San. Francisco
4,
stock

Grand Estes Hotel and Con¬

Uranium Corn, off Amorlca. Portlands On.

ident.-

Boston

an

common

value.

;

borrowings, and for its

Underwriters—The First

program.

Corp. and White, Weld & .Co., both of New York.
,•/<
★ Western Utilities Corp. -•:/': V - -

share for each 2.33 shares held

April 13 filed 153,000 shares of capital stock to be re¬
served for stock options to
company's officers and em¬
ployees, of which 114,750 shares have been optioned at
$23.03% per share. The remaining 38,250 shares
may
be optioned in the future at
95% of the then fair market

•

.

of

—

—

stock. Price—

fF3?1- Office
'York, N. Y.

share

Hall, to be constructed in the immediate vicinity
of Estes Park Chalet, located in Larimer
County, Colo.
Office
330 South 39th Street, Boulder, Colo. Under¬
writer—Mid-West Securities Corp.,
Littleton, Colo.
★ Universal Oil Products Co.

insurance

pounds—equivalent to $11 per
up to 90% in State of
Jflrael Independence Issue and
Development Issue Bonds
end the balance in cash.
Proceeds—For expansion pro-

share. Proceeds
To.be loaned to a-subsidiary,
Western Massachusetts Electric
Co., which will be used
to reduce its short-term bank

vention

Avenue, Silver Spring,

funds), payable

full

a

stock.

common

and for construction

Underwriter—

Super-Sol Ltd.

S.

next

share at $1.25 for each
a stockholder who accepts

development and construction

William#

Inc., Austin, Texas. "Stop order" pro¬
ceedings instituted by SEC in
March, 1959.
★ Suburban Life Insurance Co.
April 3 (letter of
notification) 30,000 shares of 6% cu¬
mulative preferred stock
(par $1). Price—$10 per share.
Proceeds—For expenses for operation

U.

the

United Tourist Enterprises, Inc.
Jan. 28 filed 4,500,000 shares of class A
(par 50 cents).
Price—$2 per share.

of common stock
(par 10 cents). Prie%

of princmal
amount; and for stock $1
Proceeds—To erect and operate one
or

March 25 tiled
250,000 shares of
.At par (19,800 Israeli

to

than % of

with 396,000 shares of common stock which
may be ac¬
quired pursuant to said Plan.

•

an

allocation

more

★ United States Steel Corp.
April 10 filed $70,000,000 of interests in the company's
Savings Fund Plan for Salaried Employees, together

Strategic Minerals Corp. of America,
Dallas, Tex.
Mar. 31, 1958, filed
$2,000,000 of first lien mtge. 6% bonds

of

their

Office—Tiffin, Ohio. Underwriter—None.

(par 25 cents).

company. Office—7906 Georgia
Md. Underwriter—None.

out

United States Glass & Chemical
Corp.
Nov. 26 filed 708,750 outstanding shares of common
stock.
Price—At market. Proceeds — To selling stockholders.

Inc.

-

of

purposes.
Office—25 West 43rd St., New York, N. Y.
Underwriter—Allen & Co., New York, for
242,299 shares

York Stock
Exchange or off the Exchange.
Price—Related to the then current market
price on said
Exchange. Proceeds—To Estate of D. Samuel
Gottesman,
deceased. Underwriter—None.

ores

held; rights to expire on April 21. Employees are
offered the. privilege of subscribing for
16,000
shares up to 3:30
p.m.-(EST) on April 16; Price—-$25

At

share of United for each

one

;

:

.

being

.

Margate Homes, Inc., Broward Engineering Co., and
Margate Construction Co., certain outstanding debt ob¬
ligations of Margate Homes, Inc., and $62,500 in cash.
Proceeds—For working capital and general
corporate

Standard

using the Bruce

the basis of

,■

,

March 30

V\ share needed. In addition,
United's offer will have privileges to subscribe to
242,299 additional shares at
$5 per share, on a one-for-four
basis. The company also proposes to offer
187,500 shares
in exchange for all the
outstanding common stocks of

—

Process to beneficiate
manganese
Southwest Shares,

on

shares

purchasing not

—

gmmical processing plants

"

then

mon

Lawyers before its recent one-for-ten
reserve split,
or 2Vz shares of United for each share
of Lawyers after such split.
Lawyers' stockholders may

•

per share.

York.

Massachusetts Companies March 13 filed 177,626 shares of common stock
(par 50
cents), of which 161,626 shares are being offered for
subscription by common stockholders of record April
3,
1959, on the basis of one new share for each 15 shares

Co.

Investment Corp.
1,238,994 shares of common stock (par
$2.60), of which 809,195 shares are to be offered in
exchange for outstanding stock of Lawyers Mortgage &

Sir Standard Electric Co., Inc.
March 31 (letter of
notification) 10,000 shares of comtnen stock
(par $25). Price—$27.50 per share. Proceeds
—To purchase
equipment, erect and equip a semi-fire¬
proof building and for working capital.
Office
3016
Austin Highway, San
Antonio, Texas.
Underwriter
Bache & Co., San
Antonio, Texas.

975,000 shares

of New

Western

com¬

United Improvement &

—For bonds, 95%

Co.

Proceeds—
Underwriter—First

March 25 filed

Sports Arenas (Delaware) Inc.
Nov. 18 filed 461,950 shares of common stock
(par one
cent). Price—At the market (but in no event less than
$6 per share). Proceeds—To selling stockholders. Office
—33 Great Neck
Rd., Great Neck, N. Y. Underwriter—

*

Insurance

.

★ Western Holdings Ltd. (Union of South Africa)1
9 filed American depositary; receipts: for
50,000
ordinary registered shares.. Depositary-r-Guaranty Trust

—

None.

-

Employees

.

April

share).

per

April 16 filed 2,000,000 shares of common stock (par $5)
Pride
$10 per share. Proceeds — For acquisition oj
operating properties, real and/or personal, includinf
office furniture, fixtures, equipment and office
space, b?
lease or purchase. Office—
Wilmington, Del. Under
writer—None.
Myrl L. McKee of Portland, Ore., li

pay

number of

chare in

($1

par

Underwriters—

Corp., New York; and Johnston, Lemon
/
/
:
;
,;

Washington, D. C.

Washington, D. C.

United

alley beds by eight at Yorktown Heights,
•nd by six at Wilton Manor
Lanes, Fort Lauderdale;
8300,000 for deposits on leaseholds, telephones and util¬
ities; and $395,000 for working capital. Underwriter—

and

Price—At

For development of oil properties.
Investment Planning Co.,

installations, fixtures and equipment; $85,000
to expand two present
establishments by increasing
the

Sterling Television Co.,

For construction program.

per

Arenas
(Delaware) Inc.
Nov. 18 filed $2,000,000 of 6%
10-year convertible de¬
bentures
(subordinated), due Jan. 1, 1969. Price—To be
•upplied by amendment. Proceeds—$750,000 to pay AMF
Pinspotters, Inc. for bowling alley beds; $350,000 to

the New

—

The First Boston
& Co.,

Charlotte, N. C.

Petroleum A Development Corp.,
Mangum, Okla.
March 20 (letter of notification)
300,000 shares of

Sports

ferred stock (par $20)

Proceeds

Transcon

mon

A stock

indebted¬

★ Thompson Ramo Wooldridge Inc.
April 10 filed 153,711 shares of common stock, to be of¬
fered pursuant to the company's 1951 Stock
Option Plan
and its 1956 Plan for Stock
Options.

Co.

on

short-term

capital equipment and to increase working capital.
Office—1626 Hertford Rd., Charlotte, N. C. Underwriter

—Interstate Securities Corp.,

Halsey, Stuart & Co. Inc.; Merrill Lynch, Pierce, Fenner

None.

Washington Gas Light Co. (4/27) V
April 7 filed 100,386 shares of convertible preferred stock
to be offered for subscription
by common stockholders
of record April 27, 1959
at, the rate of one new share
for each 14 common shares
held; rights to expire on
May 12, 1959. Price — To be supplied by amendment.

sary

itures, and to prepay and discharge some $12,000,000 of
bank loans made for that
purpose. Underwriter—To be
determined by competitive bidding. Probable
bidders:

.

oversubscription privilege); rights to expire on May 7.
share. Proceeds—For working capital.
Underwriter—None./
;
,;.
'IS
''>!■"
Price—$9.75 per

Thermo Plastics Corp.

Co.

for other

Co., both of

March 26 filed 468,500 shares of common stock. Price—
At par ($1 per share). Proceeds—For purchase of neces¬

(5/12)
April 13 filed $16,000,000 of first mortgage bonds, series
A, due May 1, 1989. Proceeds—For construction
expend¬

&

retire

or

for

each four common shares held and
eight shares for each
as of April 16,
1959- (with an

Offering—Date indefinite.

stock, to reduce

247,159 shares of capital stock (par $1)
subscription by holders of common
debentures, at the rate of new share for

offered
and

$100 of debentures held

Co., Providence, R. I.; and
Scherck, Richler Co., St. Louis, Mo.

Underwriters—Snow, Swee¬

Electric

&

ness

York.

• Southwestern

Allen

incurred in January, 1959, and the balance for gen¬
eral corporate purposes. Underwriters—Blair & Co.
Inc.,
New York; G. H. Walker &

ney & Co., Inc.,. and A. C. Allyn & Co., Inc., both of
New

and

Instrument Co.

filed

stock

supplied by amendment. Proceeds—To be used in
part to redeem and retire all the outstanding 4% pre¬

the basis

on

common

Co.

4

being

To be

10,

1959,

&

Victoreen

March

chase of 600,000 shares of common stock (at the rate of
20 common shares for each $1,000
debenture). Price—

vertible

five

★

in connection with its various

★ Textron Inc. (5/4-8)
April 8 filed $30,000,000 of 5% subordinated debentures
due May 1, 1984, with warrants attached for the
pur¬

New York/
•

—

operations, and for general corporate purposes, includ¬
ing payment of purchase obligations on certain prop¬
erties, and for the purchase of warehouse inventories.
Office—Republic National Bank Bldg., Dallas, Texas.

13, Calif.

Southern Nevada Power Co.

Corp.

be used

v

Utah Oil Co. of New
York, Inc.
May 6 (letter of notification) 300,000 shares of capital
stock. Price
At par ($1 per share). Proceeds — For
development of oil and gas lands. Office—504 Jefferson
Ave., Rochester 11, N. Y. Underwriter—Frank P. Hunt
A Co., Inc., Rochester, N. Y.
;

repayment of the company's 5% notes held by an Amer¬
ican bank, and the balance will be added to its general
funds and will

.

Thursday, April 16, 1959

April 11 (letter of notification) 900,000 share* of com¬
stock. Price—At par (10 coats per share).. Proceeds
—For mining expenses. Office—305 Main
St., Park City,,
Utah. Underwriter—Walter Sondrup &
Co., Salt Lake
City, Utah.

March 19 filed 550,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Proceeds—For

pected to be received up to 9 a.m. (PST) on or about
May 11 in the offices of O'Melveny & Myers, Room
900,
433 South Spring Street, Los Angeles
•

Petroleum

v

_

.

mon

writer—None.

bonds due 1986.
Underwriter—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Eastman Dillon, Union Securities & Co. and
Kidder, Peabody & Co. (jointly); White, Weld & Co.;
Merrill Lynch, Pierce, Fenner & Smith, Inc. Bids—Ex¬

Utah Mlnorala Co.

.

.

.

*

.

•

-

Montreal,

"

\

.<S

'

t-*"

" '

;

,

tt

-

"...

v*

r

toasts-

?

Number 5838

Volume 189

.

The Commercial and Financial

.

.

Co., Inc.; William R. Staats & Co.; Eastman Dillon,
Securities & Co.; and Dewar & Co.

317the company filed an application with the
Illinois Commerce Commission for authority to issue
$10,038,700 convertible debentures due 1974, to be offered
to common stockholders of record on or about May 12
on the basis of $100 principal amount of debentures for
each 22 of common held. Proceeds — For construction

March
:

1

Florida Power Corp.

W. J. Clapp, President, announced that the cor¬
poration is planning to sell additional shares of common
stock on the basis of one new share for each 12 shades
held. Proceeds—For construction expenditures. Under¬
writers— Kidder j Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Smith Inc. Offering—Expected in

Underwriter—Union Securities Co. (now East¬
man Dillon, Union Securities & Co.)
handled previous
equity financing. Registration—Scheduled for April 23.
Consolidated Edison Co. of N. Y. Inc.

Dec. 10 it was announced that the company

bonds. Proceeds—For additions, improvements, etc.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co.; The First Boston Corp. Rids—Expected
fo be received up to 11 a.m. (EDT) on May 26.

and sell $18,000,000

,

^-Consolidated Electrodynamics Corp.
April 6 it was reported that the company is planning
early registration of $7,600,000 25-year convertible sub-.
ordinated -debentures due 1984, to be offered for sub¬
scription by common stockholders on the basis of $100
principal amount of debentures for each 14 shares held.
Underwriter—Blyth- & Co., Inc., New York. Offering—

•

1

'

J

Ma^;V~;; \*

Expected in

.

.

.

.

Underwriter—To be
determined by competitive bidding. Probable bidders.
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc., Kidder, Peabody & Co. and Shields & Co. (jointly); Lehman Broth¬
ers; The First Boston Corp.; Morgan Stanley & Co.;
Equitable Securities Corp. and Eastman Dillon, Union
Securities & Co. (jointly); Harriman Ripley & Co. Inc.
Registration—Planned for Aug. 14. Bids—Expected to

•

be received on

/

'

Consolidated Natural V Gas Co.
March 18 the directors approved a
holders

•

on

(5/21)
plan to offer stock-

-expire on or about June 10. Price—To be below the
market -price prevailing at the time of the - offering.
Proceeds — For construction program. Underwriter—
~

•~"

None.

.

Consolidated Natural Has Co.

•

-

plans this year to issue and sell

the company

•(

publicly

(jointly).

& Curtis

'

v

/

*

/,■-;

plans to issue

:v

(5/19)
that the company plans the

it Long Island Trust Co. (4/22)
April 9 it was announced bank plans to offer to its
stockholders the right to subscribe for 70,186 additional
shares of capital stock (par $5) at the rate of one new
share for each six shares held of record April 21, 1959;
rights to expire on May 8. Price—$20 per share. Pro¬
ceeds—To increase capital and surplus. Meeting—Stock¬
holders will vote April 21
on increasing
authorized

El

May 19.

on

Paso

.

;

$10 to $5.

Mississippi Power Co. (6/25)
10 it was announced that this company plans to
Issue and sell $5,000,000 of 30-year first mortgage bonds.
Proceeds—For construction program.
Underwriter—To
Dec.

.

offering of 76,494 shares of common stock to common
itockholders on the basis of about one new share for
each 25 shares held as of May 11, 1959 (with an over-

ceived

Specialty Co. (Calif.)
March 31 it was reported that the company is planning
an offering of about
100,000 shares of common stock.
Underwriter — Myron A. Lomasney & Co., New York.
Registration — Via Regulation "A," around April 22.
Offering—Expected some time in May.
Electronic

Mechanical

per
-

-

share.

Proceeds—To, increase

Northern

York, v.*

San

Diego, Calif.

(4/21)

its

subscribe

on or

offer to

21, 1959 the right to
before May 11,1959 for 105,000 additional

stockholders

of

record April

shares'Of capital stock on the basis of one new share for
each nine shares held (following proposed two-for-one




(jointly); Morgan

tatively expected to be received on June 2.

f

:

-

Dfego Imperial Corp.
March 16 it was reported that the company plans to
offer an additional 1,278,720 shares of common stock.
Proceeds—For further acquisitions. Underwriter—J. A.
Hogle & Co., Salt Lake City and New York.
- •*
San

and

(5/28) "

V

plans to issue

$25,000,000 of 30-year first mortgage bonds.

sell

Proceeds—For

construction

program.

Underwriter—To

competitive bidding. "Probable bid¬
Inc.; Eastman Dillon, Union
Securities & Co. and Equitable Securities Corp. (jointly);
Merrill Lynch, Pierce, Fenner & Smith; Kidder, Peabody
& Co. and White, Weld & Co. (jointly). RegistrationPlanned for April 17. Bids—Expected to be received on
May 28.
determined by

be

ders: Halsey, Stuart & Co.

Spector Freight System, Inc.
Feb. 16 this company sought ICC approval for issuance

200,000 shares of class A common stock (par $1), of
will be sold for the account of sell¬
ing stockholders Proceeds — To pay outstanding loans
and for additional working capital. Underwriter—A. G.
Becker & Co., Inc., Chicago, 111.

of

which 60,000 shares

Teleflex

Ltd., Toronto, Canada
R. C. Dobson, President, announced that
the company plans to raise approximately $1,000,000 in
the near future, partially through debt financing and
partially through the sale of additional common stock.
Underwriter — To be named later. Registration — Ex¬
March

24,

pected about May 1.
Union Electric Co.

(Mo.)

McAfee, President, stated that the com¬
pany plans to sell about $30,000,000 of additional com¬
mon
stock later this year through rights to common
stockholders. Proceeds—For expansion program. Under¬
writer—May be determined by competitive bidding.
Probable bidders: Lehman Brothers; White, Weld & Co.,
and Shields & Co. (jointly); Merrill Lynch, Pierce, Fen¬
ner &
Smith, Inc. Offering—Expected toward the end
of the second or third quarter of 1959.

Feb. 23, J. W.

United Gas Improvement

Co.

(6/16)

April 7 it was reported that the company plans to issue
and sell $10,000,000 of first mortgage bonds due 1984.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart &

Co. Inc.; White, Weld

Merrill Lynch, Pierce, Fenner & Smith and East¬
Dillon, Union Securities & Co. (jointly); The First
Boston Corp.; Kuhn, Loeb & Co. and Blyth & Co., Inc.
& Co.;

revised

(jointly); Kidder, Peabody & Co.; Drexel & Co. and
Union'Securities & Co. Bids—Expected
to be received on June 16.
Registration—Planned for

Eastman Dillon,

around May 15.

Virginia Electric & Power Co.
Feb.

offer

21
an

it

was

announced

(6/2)

that the company plans to

additional 710,000 shares of common

stock to

by stockholders of record on
the basis of one new share for
20 shares then held. Proceeds — For construction

be offered for subscription
or

about June 2, 1959, on

each

program.

Underwriter—To be determined by competi¬

bidding. Probable bidders: Merrill Lynch, Pierce,
Fenner & Smith, Inc.; Stone & Webster Securities Corp.
Bids—Expected to be received on June 2.

tive

West Penn Power Co.

(5/25)

reported the company contemplates the
issue and sale of $14,000,000 of first mortgage bonds due
1989.
Underwriter — To be determined by competitive
March 10 it

was

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Underwriter—To be determined by competitive
Lehman Brothers and Eastman Dillon, Union Securities
and The First Boston Corp.
& Co. (jointly); The First Boston Corp. and Harriman
(jointly); Lehman Brothers and Riter & Co. (jointly);
Ripley & Co. Inc. (jointly); Kidder, Peabody & Co. and
Merrill Lynch, Pierce, Fenner & Smith, Inc.; Harriman
/ White,, Weld & Co. (jointly). Bids—Expected to be re¬
Ripley & Co. Inc., and Eastman Dillon, Union Securities
ceived, up to noon (EST) .cm May 25 at office of West
& Co. (joihtly);Kuhn; Loeb & Co.; Smith, Barney & Co.
Penn Electric'Co., 50 Brbad St., New York, N» Yi . J
«
Northern States Power Co. (Minn.)
Worth Fund, Inc. '
March 31 it was reported that the company also is con¬
Feb. 13 it was reported that the Fund was planning
sidering offering about 714,000 additional shares of
the sale of about $5,000,000 of common stock. Price—
common stock for subscription by common stockholders
Around $14.25 per share. Underwriters—Blair & Co. Inc.
on the basis of one new share for each 20 shares held.
and G. H. Walker & Co., both of New York. Offering—
Proceeds
To repay bank loans and for construction

bidding: Blyth & Co., Inc.

.

Bank of

March 27 it was announced that Bank plans to

Brothers

gram.

capital and surplus.

First National Trust & Savings

(Minn.)

that the company has

plans, and is considering the offering and
sale of $10,000,000 of new preferred stock. Proceeds—To
be used to repay bank loans and for construction pro¬

-

J-

States Power Co.

its financing

Undei^vriter—MerrjllvLynch,' f-Pierce, Fenner & Smith,
Inc.;-New

Illinois Gas Co.

March 31 it was reported

^ Fairfield County Trust Co.
April 6 bank offered stockholders of record March 31
the rights to subscribe on or before April 28 for 48,625
additional shares of capital stock (par $10) at rate of
one new share for each eight shares held.
Price—$32.50

.

of¬

March 25, Marvin

—

"

Life Assurance Co.

that the company plans an

(6/23)
Chandler, President, announced com¬
pany plans issue and sale of $20,000,000 25-year first
mortgage bonds. Proceeds — For capital expenditures.
Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; The First
Boston Corp.; Glore, Forgan & Co.; Blyth & Co. Inc.
Bids—Tentatively planned to be received on June 23.
Registration—Expected at end of May.
Northern

announced stockholders will on April 28
the authorized preferred stock to

increasing

1,000,090 shares from 472,229 shares, and the common
stock to 25,300,000 shares from 20,300,000 shares. Proeeeds
For major expansion program. Underwriter —
White, Weld & Co., New York.

'

(joint¬

fering of 950,000 shares of capital stock. Price — $10 per
share. Proceeds—To increase capital and surplus. Un¬
derwriter—John M. Tait & Associates, Cincinnati, Ohio.

EI Paso Natural Gas Co.

•

Union

June 25.

Dec. 1 it was announced

privilege); rights to expire on May 26.
proceeds—For construction program. Dealer-Manager—
Stone & Webster Securities Corp., New York.
subscription

on

on

Lehman

man

North American Equitable

"

vote

bidding. Probable bid¬

ly); Merrill Lynch, Pierce, Fenner & Smith; Kidder,
Peabody & Co. and White, Weld & Co. (jointly). Regis¬
tration—Planned for May 29. Bids—Expected to be re¬

(5/12)
reported that the company is also planning

March 4 it was

by competitive

Halsey, Stuart & Co. Inc.; Eastman Dillon,
Securities & Co. and Equitable Securities Corp.
ders:

an

r

determined

be

Electric Co.

Feb. 9 it was

and changing par value of shares from
Underwriter—A. M. Kidder & Co., New York.

capitalization

sale

20,000 shares of preferred stock (par $100). Pro¬
ceeds—For construction program. Underwriter—1To be
.determined by competitive bidding. Probable bidders;
Eastman Dillon, Union Securities & Co.; Salomon Bros.
Sc Hutzler & Co.; Kidder, Peabody & Co., and White,
Weld & Co. (jointly); Merrill Lynch, Pierce, Fenner &
Smith. Bids — Expected to be received up to 11 a.m.
of

(EDT)

program.

June.

Co.

Feb. 9 it was reported

& Light Co.
that the company plans to issue
first mortgage bonds. Proceeds—

Underwriter—To be deter¬
mined by competitive bidding. Probable bidders: Halsey,
Stuart & Co. Inc.; The First Boston Corp. and Blyth &
Co., Inc. (jointly); Equitable Securities Corp.; White,
Weld & Co." and Shields & Co. (jointly); Kuhn, Loeb &
Co., Salomon Bros. & Hutzler and Eastman, Dillon,* Union
Securities & Co. (jointly); Lehman Brothers and Bear,
Stearns & Co. (jointly). Offering—Expected in May or

.

.

and

Southern Electric Generating Co.

City Power

construction

Co.

&

Dec. 10 it was announced that the company

announced that the company is contem¬

sell $20,000,000 of

For

.

Electric

Paso

•

Stanley & Co. and Drexel & Co. (jointly). Bids—Ten¬

.

was

Kansas

ana

(jointly) Equitable Securities Corp. and R. W. Pressprich & Co. (jointly). /Bids—Expected to be received
up to 11 a.m. (EDT) on May 19. Registration—Expected
today (April 16).
•
-. ,
El

Offering—Expected in June.

Dea 29 it was reported

■

-

April 8 it was announced company plans to offer about
640,000 additional shares of common stock to common
stockholders on the basis of one new share for each 20
shares held. Proceeds—For construction program. Un¬
derwriters—Drexel & Co.. and Morgan Stanley & Co.

Lynch, Pierce, Fenner & Smith Inc.
(jbintly); Lehman Brothers and Blair & Co., Inc., (joint¬
ly). Offering—Expected during August.

Co.'-(5/19) /'.
Feb. 9 it was reported that the company is planning the
••ale of $3£00,000 of first mortgage bonds due 1989. Pro¬
ceeds—For construction program. Underwriter—To be
determined by competitive bidding. Probable bidders:
^Halsey, Stuart & Co.; Merrill Lynch, Pierce, Fenner &
Smith, Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co.; White, Weld & Co. and Shields & Co.
Electric

Paso

ic Philadelphia Electric Co.

Hutzler and Merrill

*

$25,000,000 of new preferred stock. Underwriter
—To be determined by competitive bidding.
Probable
bidders: Eastman Dillon, Union Securities & Co.; The
First Boston Corp.; Morgan Stanley & Co.; Stone &
"Webster Securitie's Corp.
Offering — Expected about
mid-year.

Harriman Ripley & Co. Inc. (jointly
Offering—Expected about mid-year.

ding. Probable bidders: Halsey, Stuart & Co. Inc.; White,
Weld & Co.; Kidder, Peabody & Co.; Salomon Bros. &

and sell

.-*■11

White, Weld & Co. (jointly); The First

Boston Corp. and

plating the sale of $8,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bid¬

Duke Power Co.

March 9 it was reported that- the company

of first mortgage bonds.
Un¬
To be determined by competitive bidding.

& Smith Inc. and

Jersey Central Power 5 Light Co.

Feb. 10 it

<

debentures. Proceeds—For construction
program. Underwriter—To be determined by competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;. Morgan Stanley & Co. and The First Boston Corp.
(jointly); White, Weld & Co. and Paine, Webber, Jack¬
son

planning

announced that the company is

$15,000,000

—

Probable bidders: Halsey, Stuart & Co. Inc.; Equitable
Securities Corp.; Kidder, Peabody & Co.; Eastman Dillon,
Union Securities & Co., Merrill Lnych, Pierce, Fenner

Sept. 19.

May 19.

on

of

$20,000,000

was

of

Public Service Electric & Gas Co. (6/2)
★ Great Northern Ry.
(5/6)
Bids are expected to be received by the company on ... Jan. 30 it was reported that the company plans sale of
May 6 for the purchase from it of about $4,500,000 .; $30,000,000 to $40,000,000 debentures. Underwriter—To
be determined by competitive bidding. Probable bidders:
equipment trust certificates. Probable bidders: Halsey,
Stuart & Co. Inc., Salomon Bros. & Hutzler.
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Kuhn

March 18, James Comerford,: President, announced that,
hi* addition to the proposed stock offering to stockholders,

'

sale

the

derwriter

*Gulf States Utilities Co. (5/19)
April 7 it was reported that the company plans to issue
and sell 250,000 additional shares
of common stock.
Underwriter—To be determined by competitive bidding.
Probable
bidders: Merrill Lynch, Pierce, Fenner
&
Smith, Inc. and Lehman Brothers (jointly); The First
Boi&tQO^Corp.; Carl M. Loeb, Rhoades & Co.; Stone &
Webster Securities Corp. Bids—Expected to be received

821,256 additional shares of capital stock on the basis
of one new share for each 10 shares held; rights to

•

program.

Pennsylvania Electric Co.
Feb. 10 it

Loeb

about May 21 the right to subscribe for

or

plans to issue

of 30-year first mortgage bonds. Pro¬

ceeds—For construction

bidding.

Riter & Co.

v

j

•

61

Probable bidders: Lehman Brothers and
(jointly); The First Boston Corp., Blyth~&»
Co.r Inc. and Kuhn, Loeb & Co. (jointly); White, Weldl
& Co. and Glore, Forgan & Co. (jointly); Merrill Lynch,
Pierce, Fenner & Smith Inc. Offerings-Expected some¬
time during August.
•' '

tive

(9/10)

Georgia Power Co.

gage

.

* '

June.

(5/26)

March 9 it was reported that the company plans to issue
and sell $50,000,000 to $60,000,000 of #rst refunurng mort:

Union

Feb. 4,

program.

-

Underwriters—Dean Witter & Co.; Blyth &

stock split).'

(5/12)

Central Illinois Light Co.

(1785)

Chronicle

—

program.

Underwriter—To be determined by

competi¬

Indefinitely postponed.

....

62

(1786)

The Commercial and Financial Chronicle

Broad Street Sets

Mutual Funds

Selected

Gross sales of

By ROBERT R. RIGII

american

Street

Chemical Had

shares

Wellington Fund

Record First

and

$13,232,000

',

first

quarter of 1959
-nearly, three
times

were

(The net-asset

of

Institutional

Quarter Sales
rrotpcctut from vour dealer or

Record

Ilighs for Assets and
Share

Selected Investments Co.
135 6. La Salle St., Chicago 3, HI

Value

Chemical

Fund, Inc.,
reports
largest quarterly and monthly

the

sales totals in

the Fund's 21

year

the end of

SECOND

quarterly
DIVIDEND

a quarterly period.
31, 1958, net asset value

from

share

net

cash

or

stock

April 8,1959

EITHER PROSPECTUS
FREE ON REQUEST

quarter

increased

I

Incorporated

j

I

Investors

I

ESTABLISHED

1925

investing in

of securities selected

end

1958

of

and $7.79

a

for

v

Total

number

of

stockholders

from

1

| Incorporated J
Income Fund

list

|

a

J

for current

•

investing in

of securities

I

income.

L

-.-J

19,759,382 shares outstanding
at
Dec.
31, 1958 and 18,444,836
shares outstanding at March
31,
1958.

During the quarter, Chemical
Fund emphasized investments in

A prospectus on each
fund is available from

J

I.

^

added.

'

by industry groups

The

investment dealer.

I

The

The Parker Corporation

total

Reporting

assets

of

the

<•

Berkeley Street

Boston, Mass.

was as

follows:

I

% of Net Assets

ment company,

Coleman,

Jr.,

923,323
ing this

on

Fund

taken

rose from $58,31, 1957 to $91,March 18r 1959. ,\ Dur-»

Dec.

net

7

assets

-V

:

March

on

ital
2c

gains distributions of 5c

share,

the
gained 45.6%.
a

net

total

Line Fund

31,

March

of

assets

from

rose

1957

•

had

Southwest

Gas

new

rates,

31,

1959.

stocks ""constituted

was

Com¬

;

94.32 %

of

-in 7accordance"

assets,

positions- in.

Corp.

and

.

west Gas Corp. is a supplier of
natural gas to three rapidly-grow¬
ing areas in southern California,

$7,660,499

on

General Public
Service Assets

FXR, Inc., is a producer of
test
equipment and

zona.

[General

microwave

Public

;

Up

Service

Corp.,

31,

Outlining Corp.

ly 92%

Votes 3-for-l

ferent

of OCSF's

assets

companies

Oil and Gas
Glass

I

1958

10.8

10.7

5.5

5.8

the

4.7

3.9

stock of three shares for

3.2

2.1

dividend basis

Products

3.1

14.8

quarter

purchases of port¬
folio securities totaled
$18,125,527
during the quarter.

Chemical
fund

Fund, Inc., a mutual
by F. Eberstadt &
1938, diversifies its invest¬

founded

Co. in

ments over

panies
the

in

wide range of com¬

many

industries which

Fund's

management
achieve
above

will

growth

believes

average
result of chemical re¬

as a

search and
A mutual fund

investing in "growth"
stocks. Send for free booklet-pros¬
pectus by mailing this ad to

a

of

to

the

and

one

a

50%

a

Street

Chan¬

concern,

Bearing Company of Philadelphia
& Towne, invest¬

and Van Strum

counselors.

On April 23rd, the firm

Kingsley & Southwood,
Street, New York City,

name

37

of

Wall

members

of the New York Stock

will be
&

Co.

will

changed to S.

Exchange,
J. Kingsley

William E. Boye,
Jr., who

acquire

an

Exchange

bership, will become
the firm the

same

a

date.

mem¬

partner in

Since

The latter firm

investments

in

excess

to

Edison

Colorado

Abacus Cites Gain

New

K.

York

ported

Stock

that

asset

Exchange,

lar

quarterly

dividend

on

7

May 8.

Nickel

and

Philips'

;

General Investors'

was

increase

Mr.

Net Assets Rose 7:

107% in Past Year7

for

of 9.7%.

Jacobs

the

further

stated

that

Net

1959 the net

With

28c~ per

earlier; .that
12c

share

net realized

share

per

a

year

gain

contrasted

with

of
a

realized

loss

the

period; and that unreal¬

of

2c

the

present stock of 15 cents per share
payable May 20 to stock of record

Re¬

re¬

the

value

pared

The directors declared the
regu¬

and

Jacobs,

split,

present outstanding shares
would be increased from
372,817
to 1,118,451.

Gas

42% of total net assets^Natural
Jr.,-BresiW Gas 11 %» Gils 8% and Industrials
dent of Abacus Fund, ciosedrend \24%; ' U. S. Treasury Bills and
7.
investment company listed oruthe cash amounted to 15%.

7,- William

107%

author¬

in

Gas,

At'TVIarch 31, 1959, holdings of
Utility common stocks represented

hi Net Asset Value

ments equalled 29c per share com¬

the

positions

Electric and

Interstate

ternational

Lamp.

assets of General Investors

Trust

increase

smaller

include

California

Chemical, Food Machinery and
Chemical, Freeport Sulphur, In¬

quarter ended March 31,
income from invest¬

to

and

portfolio

Southern

vere Copper & Brass. Substantial
additions to previous holdings in¬
clude
investments
in
Allied

ized shares from 500,000 to
1,500,000
shares.
With
the
proposed

made

the

Motor,

value per share, including capital

an

implement the proposed re¬
application would

securities

Central Illinois

.

,

of

first offered to the investing pub¬
lic in June of 1956 the net asset

company's net
$36,821,049 equal
of
$500,000,000
for
individuals, to $43.03
per share on March 31,
institutions and eight mutual in¬
M959 compared with $33,563,167 or
vestment funds here and in Canr
$39.22 per share on Dec. 31; 1958,
ada.
supervises

be

Kings ley

Government securities.
shares of the Fund were

The

capitalization,

To Be S. J.

Ford

S.

increase

ning Corporation is parent of 15
subsidiary companies, largely f in
the
financial field.
Among the
principal concerns are Nice Ball

ment

added

invested in cash

was

sales

$4,260,346 and $1,705,727:, respectively. New isssues

the new

;

To

development.

split

a

on

dividend.

Wall

A

on
se¬

New1

recommend

U.

and

amounted' to:

operating
in
remaining

shares gains distributions of 6c a share,
of the has advanced by 50.8%.
In the
total
assets
have
proposal same period,
will be made to
Channing share¬ risen by more than 114%.
holders at the annual meeting on
May 15.
•
.,r.

to

current

ended

to

shareholders

equal

1959, the fund realized

$3,179,403 in securities profits
$9,095,758 of portfolio

curities.

Directors of Channing Corpora¬

2.1

15.0

and

purchases

dif¬

20 industries. 'The

8% of assets

Split

tion have voted

3.0

2.3

the

Stock

During the first quarter of 1959

in¬

was

vested in the securities of 41
over

24.5

sales of




dividend

March

on

total' net

Value' southern Nevada and central Ari¬

$9,891,220 ; 6n
During this same

27.4

During

Address.

the

to

18, 1959.

1959

March 31,

Name..

mon

President Ralph P.
disclosed that the

'

"

Specialties

Established 1894

and

value

V

•

r

The

asset

Chemical-General 31.0
Drug
21.6

J

Corn

ONE WALL ST., NEW YORK 5

5.01%

with the investment policy of the
Board ''requiting
a
minimum of
I?Xt»
90% of net assets at market value
value rose from $4.14 to $5.94. If
Inc., and increased its holdings of
to be invested in common stocks.
allowance were made for the cap¬ Electronic
Associates, Inc. South¬

period, the net asset

same

March 31:

Metal

CALVIN BULLOCK, LTD.

stockholdersV oi

to

the (Ireland, Pennsylvania invest-*

on

Pulp and Paper._

|

200

Value

Line Income Fund

Rubber

,

I

Total

-

was

distribution of assets

I

your

Savings Bank.

investment company,
components and Electronic Asso¬ closed-end
period, the net asset value rose ciates, Inc., is the leading
maker, reports that its net assets at mar¬
the
"Chemical-General" classifi¬ from
$5.02 to $7.43 a share. Here, of analog computers.
The Fund ket value on March 31,. 1959 were
cation,
while
reducing
invest¬ again after allowance for the cap¬ has
equivalent to
$6.17
completed the sale of its hold¬ $45,868,150,
ments in "Drugs," the Fund's sec¬
ital
gain distribution of 27c a ings
in
Machlett •* Laboratories, per share on the 7,434,792 shares
ond
largest group.
Holdings in share made on Feb. 17, the; net
Inc.,'. and United States Ceramic of common stock outstanding. The
Mead, Johnson & Co. were elim¬ asset value was
up 50.3%. '>
: :
"
Tile Co. at a profit.
asset value on Dec. 31, 1.958 was
•
I < V
inated during the quarter; Inter¬
$6.03 per share. ' /
national Nickel
% At March
1959 approximate¬
Co. of Canada

J

out
new

indicated

Aug. 29, 1956.

on

Dec.

I

brought
sales of

()vcr-Conntcr F iiiul

747,182

share at

a

the March 1958 quarter-end.:

51,982
compared
with
48,291 at the 1958 year-end and
45,642 a year ago. The shares out¬
standing increased to 20,675,632

capital and income.

I

gross

to

reached

possible long-term growth of

A mutual fund

March

President of the Fund, who is also
Vice-President
of
the
Buffalo

volume

sales

$10.39 per share at March 31, 1959
compared with $9.93 a share at the

®

that in

shares of the three funds recorded

-

President

I

during

March

on

Reports Gains

WALTER L. MORGAN,

list

Fund

Report Progress

at

shareholder's option.

A mutual fund

the

and

31, 1958, it was $163.82 per share,
according to William H. Harder,

Value Line Funds

23,

payable May 15,
in

of

1958, Mr. Morgan said that shares

Fox-Martin

$207.56

was

On
per

.

holders of record April

1959

performance

Mr.

Dec.
share

.

investment Income to share¬

1959

Wellington Broad Street Sales
Corporation,
$900,000,000, national distributor of shares of
Walter
L.
Morgan,
President, Broad Street
Investing Corpora-'
stated at the annual meeting of
tion, National Investors Corpora¬
stockholders held in Philadelphia.
tion and Whitehall Fund,
IncCC
Commenting on the investment

showed

First

a

the

on

for

31,
a 24% gain in asset value
1959, were a record $45,614,090
a new all-time
high for any month
adjusted for the December, 1958
compared with $34,808,137 a year
of $4,596,000.
reached $11,691,000, up 202% over capital
This was up 21%
gains
distribution. This
earlier and $43,464,203 at the end
from the February rate and 228%;
first quarter sales a year ago, and
result, he felt, was outstanding
of 1958.', This new high, Mr. Har¬
41%
over
the
*
•
previous
record because the Wellington Fund is a greater than in March..1958. ;
der pointed out, is attributable to
For the quarter just ended,-re¬ net share
quarterly sales total of $8,284,000. balanced fund operating under a
purchases by sharehold¬
March sales of Chemical Fund conservative
demptions of shares
of; Broad er^ and to continuing
policy.
apprecia¬
shares also reached a new peak
Mr. Morgan also reported that Street Investing, National Inves¬ tion
in
portfolio
holdings 7. of
for any month amounting to $4,- the
tors and Whitehall Fund totaled common stocks.
Wellington
Fund
now
has
245,000 as against $4,127,000 in over 268,000 shareholders.
$2,470,000, as compared with $1,During the first quarter of 1958
1
1
February, 1959, the previous rec¬
#
■ n.; v.;:"; ;:p. 775,000 in the corresponding pe¬ one additional savings bank and
ord sales month.
March sales in¬
riod of 1958.
two life insurance
departments of
creased 253% over the volume in
savings banks became Fund share¬
the same month a year ago.
holders for :the first time.
As a
The fund reported on April 15
result, Mr. - Harder said, share¬
the largest total assets and per
Mr. Bernhard noted that total
holding savings banks now num¬
share value for any quarter-end assets of the Value Line
ber
83
and
Special
life
insurance
de¬
in its 21 year history.
Over
the
Counter Securities,
Situations Fund rose from $6,266,partments 13.
056 on Dec. 31, 1957 to $10,377,210 Fund, Inc., the nation's only milNet assets totaled $214,908,581
On
March 31, 1959, tile Fund
at March 31, 195.9, compared with on March 18, 1959.
During this tual fund devoted! exclusively to owned
stocks
of
73
companies
$196,376,283 at the 1958 year-end same period, the net asset value investments in unlisted securities
representing 24 industry groups.
and
$143,794,150 at the
March of the Fund rose from $2.06 a reported a net asset value of $4.96 The
principal additions during
1958 quarter-end. Total assets in¬ share to $3.98 a share.
After al¬ a share at March 31, 1959, a 43%
the quarter were made in chemi¬
creased
by 50% in the past 12 lowance for a 7c capital gain dis¬ gain over net asset value of $3.46
cal, retail trade, electric utility,
months.
(All of foregoing and tribution, the net asset value dur¬ a share recorded a year earlier.
oil, railroad and container classi¬
subsequent data have been ad¬ ing this period rose by 96.7%. Mr. Total assets at March 31. 1959 fications.
%
; 7-'
justed, where necessary to reflect Bernhard noted that sales of the were also at an all-time high of
>Mr. Harder stated that the yield
the 2-1'or-l stock split on March Special
Situations
Fund
were
$244,925, a 71% gain- over total
on
all common stocks held, based
of
running higher than at any time assets
26, 1959.)
$143,353
reported
at
on investment costs and
since the Fund
currently
was
open-ended March 31, 1958.
Net
asset
V, ..Vvalue
history.

5c

of

exceed

now

per share
Investors Mutual

Inc.,1 reached $210.07
March 31, 1959,'a new high

.

Resources

PTind

Climb

to

value

Fund,

greater than the $4,537,000 in the
first quarter of 1958--according to
Milton Fox-Martin, President of

Near $1 Billion

live.

the

Continues

Mutual

of

record

a

Savings Banks' Fd.

shares of the

Group

Funds totaled

during

new

Thursday, April 16, 1959

,

Net Asset Value of

Quarterly Record
Broad

.

.

ized

1958

appreciation

910,787

or

per

share

increased

$3.40 per share.

in

$2,-

high

hit

of

earlier,
figures

record

a

$7,457,964

above

the

quarter-end

on

total

according

March
12

31,

months

to

preliminary
released April 13.
,

Aided by generally rising secu¬
rity prices and a 439% -jump in
first-quarter sales, the 7 Boston.

based

mutual

fund

net asset value

$6,233,033

total

increased

its

by 19.7% from the
of

last

Dec.

31.

Number 5838

189

Volume

Net assets

on.

amounted to

March 31

a

.

The Commercial and Financial Chronicle

.

.

&ear; ago

(1787)

securities

.

$3,603,541.>-i

takes

The number of GIT shares out¬

.

standing also reached
the

at

first quarter

767—Compared

829,

543

a

price of 100.567 to yield

indicated

4.59%.

Close

difference
in yield here would
offering of $11 million of prove bothersome remained to be
Rights, evidenced by subscrip¬
30-year bonds by Central Power seen.
tion
warrants
to
subscribe for
& Light Co., this week indicated
399,000 shares of Inter - Mountain
that investment bankers still are
Join Federal Sees
Telephone Co. common stock have
thinking pretty much along the
(Special to The Financial Chronicle)
been issued by that company to its
same lines when bidding for busi¬
LOS ANGELES, Calif.—Jeanne common
stockholders, ♦ which
ness.
Fergeson and Gentry Gibson have rights expired April 10, 1959 at 3
The winner in this instance paid
become
affiliated
with
Federal p.m. (EST). Of the total, 390,826
An

on

Dec.

31, and 587,571 on March 31,
1958, for gains of 22.8% and 73.4% ;
respectively.
/
The " income
fund's; net asset
value per

share, adjusted for cap¬
gains distribution, was $7.68,;;
up 2.3% from the year-end figure
of $7.51 and 25.3% from the March
ital

31, 1958 per-share value of $6.13".
GIT's national distributor, In-

,

Firming

in the

up

money mar-

ket continues to be reflected in
the trend of bond prices, both in

■

thJvisJuer a Price of 101.6599 for Securities Corporation,

cfnt'ner

$1 000 hond differential

ST h0ldS tme ta

27

year history.
This figure was
~
Itin-n ;
IT
27.2%, g^ea.er than the 1958 fourth
on?

439%

more

of

ume

last

1

$1 128 150

of

nurchases
purcnases

-

latter
lauer

vestment

-

inol

number

a

markef a.n^ber of

are'selline ' to

during
aunng

the
ute

of
01

section
seciion

market

and

than the «ou,aau voluuut
$266,935 vo»-

share
snare

the
uuj

Ll
JLU

ru

total

quarter

TreaSU1'y

yields

return

5

^

than

of
I

.

the current
91-day-bill offering brought bids

more

year's opening period.

4%. And

which averaged out to an interest

With

Harris, Upham

cost

/'' * X'(SpfeclaJ to: The Financial Chronicle)
.

■

WINSTON-SALEM, N. C.—John

T. Johnson has become connected

Harris,; Upham & Co.,.Pepper
Building.

Staff

to

(Special toTHE-FiNANciAL Chronicle)

CLEVELAND,
-

Ward

with:Gai-

& Co., Inc., 11900 Shaker
Boulevard, memhers of the Mid-

west Stock Exchange.

t

•-;/* '•

back

wait

in the year.

new;

offerings

of

recent

emissions

decidely

become

Stock

sticky

Substantial unsold
on hand
in both

I

M

which

however,

obligations

The

a

involved

offerings

J.

Mackey

Mackey,
*

City

age.'

pissed
of

72,

away

,

.,

partner

,

carrying

a

following

a

"illness.

reoffered

to

the

public

on

The telephone company

intends

to apply the proceeds toward the

D. banks,

short-term

on

which

notes

1959

were

pany

expects to

term

notes

on

$5,550,000.

Feb.

The

28,

com¬

the short-

renew

banks

to

the

notes to

which

will

not be so paid.

MEETING NOTICES

Pasco

de

CORPORATION

it

of

apparent, on
Central Power &
that

1

'

corpo-

new

to

be

issues

Z

"wisconsin

Power

&

Light's $14 mil-

cuity jn

diffi- lion issue seemed to take a hint.

any

raising funds they

At

need

in though at slightly higher cost.

this

any

was

98.789

for

>

offering,

upon

clearance

by

April 21,1959
Notice it hereby given

ness

Center,175East Old Country Road, Hicka¬
riUe, New York, on April 21, 1959, at
2 o'clock P.M., to elect eleven directors,
to vote on
the appointment of Price
Waterhonae & Co. aa independent ptiblid
accountants for the year
1959 and to

.

take action

June 12, 1959- The
Books will not be

on

Transfer

closed.

*.

^.

Michael D. David

Secretary
300

on

such other business

books will

not

be closed.

Park Avenue

New Y3rk 22, N.

aa may

properly come before the meeting or any
adjournments thereof.
Only holder* of common stock of record
on the hooka of the Company at the close
of business on March 13,1959 are entitled
to rote at the meeting. The stock transfer

—; »

•.

that the Annual

Meeting of the Stockholder# of Long
Island Lighting Company will be held at
the Company'*' HickariUe Operation*

June 30, 1959, to holders of the
Corporation's Common Stock
of record at the close of busi¬

the successful group to prepare
for

of

Directors

Corporation at
meeting held on Tuesday,
April 7, 1959, declared a stock
dividend at the rate of 1 share
for each 20 shares, payable on

a

a

burden 4%% Interest rate. This permitted;

of

Cerro de Pasco

rate the winning bid for

offering

Common Stock

Board

The

became

issue

T

5% Stock Dividend
on

Shooting for Target
When

brief mounting in many directions, the
-; tax privilege attaching to these

•

Cerro

were

double A rating.

issuers of

-^fe^esumably with the

April

and

April 15 at $15.50 per share.

L0N6 ISLAND LIGHTING COMPANY

base.

continued

seem

.'encountering little, if

.

Stanfill

pull the

plug and let them find

yields

as

Government and

tax-free

I,

—

Stanfill has become associated
with Financial Securities Corp.,

"

17
LrranK

Colo.

DENVER,

were

writers, headed by Courts & Co.,

company

balances
instances

were

attractive.

more

and irat* yields,

Exchanges.

Turning Them Loose

Sponsors let go of two more recent
underwritings
during
the

for, and

8,174 shares

reduction of amounts owed by

1 uimivmu

*

(Special to the financial chronicle)

too

spite of the hardening of

Co., 208 South La Salle;,Street,.Federal

f Midwest

Center

_

With Financial Sees,

good reception.

offering

j man is now with David A. Noyes-: : In

_of the New York

Southland

of

-

to

&

really attractive and the issue got
reaUy/ttracttye and the issue got

cor

not

is

CHICAGO, 111.—Michael J. Lib-

members

of

Ohio Edison Co.'s $30 million of
heavy. Bankers, accordingly, are 4%s, rated AA, and Montana Powfinding an opportunity to work off er Co.'s $15 million of
also
porate

in the secondary market

(Special to Tee Financial Chronicle)

of

when bankers decided to

ya

rt %

the current flow

stances,

proved

,

still

are

and

Fortunately, under the ciicum

some

With David Noyes

^

^2 427maSndVthemindicated yield D. Dunlap. manaSemernt of HuSh
-nder the
4.60%
to
the buyer
4.60%' to the buye) proved

of

a

the

in

_

a

week through the medium of Farmers Union Building. He was
termination of agreements, and in formerly with Mountain States
of a mind b°th instances the bonds involved Securities Corp.
, v
things out, settled back sharply from their
DIVIDEND NOTICES
authorities initial offering prices.

especially since some
in the banking world are predicting increased firmness in money

A.

,;ther
f*

sit

rates later

'

Ohio—James

is now affiliated

to
-

office

Goodbody &
new
branch

—

opened

Accordingly, prospective buyers
0f
fixed
income
obligations of

corporations

with

Gaither Adds

of-3.075% to the Treasury.

"

^00^ceTn7d8e9r <£ EX.?

has

subscribed

were

balance

purchased by the several under¬

Goodbody in Dallas
Co.

shares
the

DALLAS, Tex.
ter

7805 Sun-

L4Wd 101*637 ofLdndirated^ SCt Blvd'
tfanurnber of

oh

Inter-Mountaiii Tel.

Whether the single basis point

nlJJ.

close—1,018,-

with

SEC, at
an

Still Bidding

high

new

a

value

added

on

the investor.

for

63

CHARLES E. ELBERT

Y.

Secretary
March 13, 1959

over-the-counter market issue

the

R. i.

ALUS-CHALMERS

RepMs

MFG. CO.——
Milwaukee, Wisconsin

of

Tihra loinsuHV

Notice o!

ANNUAL MEETING OF

THE CHRONICLE

It be held
Makers of

Camel, Winston, Salem £ Cavalier
,

Will be Published

cigarettes

April 23,1959

1
★ The

1959

'

■

Spring

'■

COMPANY, a Delaware
(hereinafter
called the
"Company"), will be held at the general
offices of the Company, 1205 South 70ta
Street,
West Allis,
Wisconsin, on
Wednesday, May 6, 1959, at 11:00
A.M. (Central Daylight Time), for the
following purposes, or any thereof:

corporation

of

our

up-to-date

OVER-THE-COUNTER MARKET

resume

of the securities traded in the

A

on

A

cash

It

lengthy list of OVER-THE-COUNTER MARKET stocks on which
dividends

have

been

paid uninterruptedly for 5

years

or

longer.

includes corporations and banks which have paid up to 175 years of
cash

consecutive
.

,

dividends.
-

„

1. To elect a Board of

QUARTERLY DIVIDEND
quarterly dividend of 50c

.

-•

share has been declared
the

value

Common

$5,

of the

Stock,

ment thereof.

par

The Board of Directors has

Company,

'

payable June 5, 1959 to stock¬
holders of record at the close

annual

of business May 15, 1959.

meeting

By order of the

Don't

before

in

the

miss
this

opportunity to advertise

your

any

adjournment

Board of Directors

ARCHIED. DENNIS,
SecretmS

■

April 10, 1959

Bank

or

thereof.

Secretary

■

fixed March

19, 1959, as the record date for the de¬
termination of the common stockholders
entitled to notice of and to vote at this

W.J. CONRAD,

:*7t.

Dated: March 19,1959

Firm, Corporation or

important issue. Please reserve your space requirements

closing date of April 21st,

TENNESSEE
TRANSMISSION

Regular advertising rates will prevail
for space

HOUSTON,TEXAS

The




-

■

-

•

•

25

GAS

COMPANY

in this important issue.

THE COMMERCIAL & FINANCIAL CHRONICLE
.

•

V

.

PARK PLACE, NEW YORK 7, N. Y.

.

'

DIVIDEND

regular quarterly dividend of 35c per

share has been declared on

NO. 47

holders of record on May
J. E.

it: t,

the Common

1959, to stock¬

Stock, payable June 16,

RECTOR 2-9570

other

business that may properly come
before the meeting or any adjourn¬

Winston-Salem, N. C.

★

Directors;

2. To consider and transact any

largest market.

per

★

Hall

smoking tobacco

edition

ISSUE will present an
world's

Carter

NOTICE 18 HEREBY GIVEN, that
the Annual Meeting of stockholders of
ALLIS-CHALMERS MANUFAC¬
TURING

Washington

Printe Albert, George

"
'

STOCKHOLDERS

May 8, I9SS

15, 1959.

IVINS, Secretary

64

grid Financial Chronicle *

The Commercial

(1788/

should

,

••

•

S.

U.

the

make

report

Government
best

of

viise

,

-

business and technical skills of.
American operating companies

,

on

the

says

_

Thursday, April 16, 1959

.

In such cases, the

ing.

BUSINESS BUZZ

.

to

sound

assure

execution

and;

management; and to built into

Behind-the«Sccne Interpretations
from tbe Nation's

the financing arrangements the

Capital

maximum possibility for later

/

private financial participation.

.

•

l>

WASHINGTON, D. C.—-A 72printed
special report,

"Expanding Private Investment for Free World Eco¬

in

abroad,:

Latin,

Canada,

America

and Western Europe,,
increasing all the time, but
the special report prepared by
the State Department comes up
with specific recommendations
designed to encourage more priare

:

.

,

The

the

In

the

of

United
selves

States
with

concern

the

them¬

economy to our

foreign pol¬
and
aid
the

"}

tiomic
*

assets

as

eco-

nation

a

have not

eign

it

was

poses.

In

v

.

effort

an

to stimulate

vestments abroad by

that

not

do

ment

now

in¬

companies

have

invest¬

in

foreign countries,
report suggests:

Straus

-

the

trative action be taken
to

"We recommend

basis

mation

f

already pending before the
Ways and Means Comfnittee. Representative Hale
Hoggs, Democrat of Louisiana,

cies.

be

able

lieve,

"We have found

however,

that

report

Devel¬

expanding private invest¬
that in addi¬
tion to the well known shortage
of

no

is

the

Administration

business."

.

overseas

investment

losses due to

against

expropriation,

war

damage, etc.

an

Street, New York
(cloth), $6.00.

projects that
to

the

Development, 711
Avenue, New York 22,
(paper), 50 cents, (quan¬
tity prices on request).

Can Capitalism Compete—A Cam¬

paign for American Free Enter¬
prise—Raymond W. Miller—The
Ronald Press Company, 15 East
26th Street, New York 10, N. Y.,
(cloth), $4.50..

are

Common

unwillingness

spend, on technical prelimi¬
naries, many projects that might
be

other

or

or

'study

of

.

The

interest

report

private in¬
goes

S.

U.

on

designed

these barriers.

to
to

-

Government

will

find it necessary to finance con¬
tracts for

.

....

Bankers

Association,

12 East 36th.

Street, New York
16, .N.Y,, .(paper),
; ;
|
....

Growth Patter; The Insurance In¬

to

remain dormant.

make * suggestions
overcome

Handling"—

Commission,

American

of the

Language for

Check

Bank Management

interest, said

to

The

Machine

Mechanized
'

Mr. Straus.

American -

Research and Policy Com¬
CED—Committee

mittee of the

might

investors

to attract investor

otherwise

dustry in the California Market
/

—Dr. Robert R.Dockson—Union

;

Bank, Los Angeles, (on request).

Steel Facts 19,56-1958
Iron

and

East 42nd
N.

Steel

—

American

Institute,

Y., (paper).

urgent development and whieh

The report proposes that the

private capital is not forthcom-

TRADING MARKETS
American Cement

Botany Mills
Heywood-Wakefield

SPECIALISTS in

Indian Head Mills
W. L Maxson

Morgan Engineering

Serring Wall Street

SHOWING LISTS and RATES.
THE
83

Carl Marks




&

Ho. Inc.

New York 6, N. Y.

HAnover 2-9492

Southeastern Pub. Serv.

United States Envelope

FOREIGN SECURITIES SPECIALISTS
20

BROAD STREET "•

NEW YORK 5, N. Y.

TEL: HANOVER 2-0050

E-Z ADDRESSING SERVICE

Washington St.

i

National Co.

since 1927

SEND FOR FREE BOOKLET

150

Street, New York 17,

projects which need

FINANCIAL MAILINGS to
Brokers, Banks, Analysts,
Advisers, Funds, etc.

Y.,

Fifth

interest

Because

N.

N. Y.,

discouraged by the high cost of
surveying and proving projects

-

16,

for Economic

Foreign entrepreneurs
have

Eco¬

Budget and Economic Growth—A
Statement on National Policy by

par¬

Unfamiliarity with the prob¬
potentials of business
abroad is a major deterrent to
overseas investment by Ameri¬

of

and

Harper & Brothers, 49 East 33rd

effort to blue¬

lems and

who

Payments

nomic Growth—J. M. Letiche—

Aid to Foreign Entrepreneurs

The investment guaranty pro¬

thorizes guaranties of American

Government

S.

vestors die

gram, operating under a section
of .the Mutual Security Act, au¬

gen¬

there

Business

that

requested to consider, in
consultation .with
appropriate
Congressional committees, au¬
thorizing Small Business In¬
vestment Companies to finance
foreign investments of U. S.
companies qualifying as. small

con¬

practical method of provid¬
ing limited relief through tax
treatment,"
said
the
report,

recommend

U.

ticipation in
print plans.

of

Balance

in certain undevel¬

capital

oped countries, there is an even
greater shortage of well-pfcnned
projects seeking to attract Capi¬
tal.
As a result there is as-

be

be

.

one

The

ment report avers

cans.

Small

to l

...

,

of International

"We

erally
applicable
method
of
protecting pr insuring investors
against these losses.!.
We be-

Chairman of the Subcom-

increased to $1,000,000,000..

new
or
expanded private en¬
terprises in the less developed

by. U. S. investors, for ob¬
vious reasons, about financial
losses due to depreciation or
devaluation of foreign curren¬

House

this

in

the

,

!
years there has been
,

forth

on

opment Companies to invest in

their available foreign tax
credits through to their stockholders.

set

that appro¬

provide governmental, tax,
and legal support for the for¬

pass
'

investment

for

countries.
..

that the issuing authority
guarantees be

poses

active

priate legislative and adminis¬

should

arising from revolution,
insurrection, or civil strife as¬
It also pro¬

losses

sociated with war.

sertedly greater need for more
Development Companies

X'fllmpanies

are

American

published financial
also be recognized

ordinary loss for tax pur¬

an

as

portfolio investment
the special document proposes
that
all
regulated -investment

/ Actually some of the recom¬
mendations of, the. Straus report

lengthy
country and

in

statement,

be permitted to treat
foreign branches as forbusiness corporations for

For

hearings in this
abroad, to promote

to exchange rate change,
required by the Securities and
Exchange
Commission
to
be
shown

guaranty provision
Security Act be
amended to include coverage of
investment

of the Mutual

due

.

cern

on Foreign Trade Policy,
introduced a bill after

pres¬

Therefore, the report recom¬
that
existing
law
be

Under

pre¬

mittee

explain

mends

•»-

Portfolio Investment

Pending in Congress

^

to

on

regulations.

clarified to provide that the loss

islative support for a more lib¬
eral interpretation of such taxes.

"in cooperation to the
fullest extent practicable with
p r i v ate enterprise concerned
with international trade,
foreign
investment and business opera¬

and

which went
ent

tiations; and (2) The Treasury
Department re-examine its in¬
terpretation of the present stat¬
utory language and seek leg¬

pared

tions in foreign countries."

full

resources.

taxes for tax credit purposes be
dealt with in tax treaty nego¬

1 Mr. Straus, as a special con¬
sultant, made his report direct
to
C.
Douglas Dillon, Under
Secretary of State for Economic
said

their

with dignity!"

problem of recognizing foreign

been utilized

advantage to all concerned.
Thus, with the release and en¬
couragement of private initia¬
tive, the rate of growth in the
newly developing countries will
t>e greatly accelerated.

He

of

"Certain people simply refuse to accept retirement

taxes "in lieu of' income taxes,
the report recommends: (1) The

to

Affairs.

and may or may not eoirieideLwith
the "Chronicle's" own views.]

tax purposes, under appropriate
"accounting regulations."
On
the question of foreign

in¬

cluding capital, know-how, and
resourcefulness are in private
hands.
Therefore,
these
re¬
sources

-

[This column is intended to re¬
flect the "behind the scene" inter¬
pretation from the nation's Capital

The report adds: "We recom¬
mend that U. S bank branches
their

.

our

Congress. Just what action Con¬
gress will take on them remains
to be determined.

abroad

The report declares that the
lies in part in our rec¬

answer

ognition that most of

and

sidiaries.

veloped countries?

!

tain to be studied thoroughly by

the profits of a

Conse¬
quently, the report states, there
are special reasons for conduct¬
ing. banking operations abroad
through branches that do not
apply to other foreign opera¬
tions.
However,
banks
are
denied the tax advantage of operating through foreign sub¬

the

economic growth of the less de¬

The recommendations are cer¬

effect of de¬

confidence

capital

relationship of

objectives,

on

added

•

icy

foreign business

Usually the banks of this
country operate abroad through
branches, rather than foreign
subsidiaries so as to provide the

the private sector of the Ameri¬
can

as

uses.

.

of

* The report, however, recom¬
mends that where necessary to

accomplish high priority proj¬
ects, greater use be made of
management contracts which
centralize managerial responsi¬
bility for an entire project in
a
single company.

otherwise diverted from foreign

International

people

,

;

tributed to U. S. stockholders or

Why do the Gov¬

and

STOCKHOLDER

foreign
corporation arising
from foreign investments until
those profits are actually dis¬

In the introduction the ques¬
ernment

-

business

(Cooperation Administration, De¬
velopment Loan Fund, and the
Export-Import Bank.
tion is asked:

THE

tax

special

give

to have the

taxes

consultations were
held with businessmen, bank¬
ers and lawyers, and represen¬
tatives

MAJORITY

ferring payment of U. S. income

said

report

V

...

AND STILL

Revenue

to

tions known

ment

letter

his

V

corporations, such special treat¬

was

assistance. Mr. Straus
transmitting the

private

!

treatment to domestic corpora¬

conducted by
Ralph I. Straus, a Director of
R. H. Macy and Company, New
York, with the assistance of the
Department of State, Depart¬
ment of Commerce, Department
of Treasury, and other agencies
of the Government, and * with
study

HONORARY CHAIRMAN

of taxation

recommends that
Code be

report

Internal

amended

vate investments, \
The

Bloopbottle

-

and

-

PRESIDENT EMERITUS

foreign investment, the
Straus! report makes two tax
proposal suggestions. They are
»those applicable to all foreign
investments; and those that ap¬
ply only to investments in the
less developed countries.

Government, United States
bankers and industrialists.

particularly

J.C.

bill is en¬
Investment

Under the subject

for

architect

on

various branches of the Federal

American investments

feasibility
studies,**
engineering services,
construction, rather than
put the responsibility for an en¬
tire project in a single company.
These policies also lend
themselves to the selection, as
prime contractors, of architectengineers and construction com¬
panies rather than companies
with operating experience.
<
tracts

Incentive Tax Act of 1959."

of Congress,

members

.

Present, foreign aid regula-i
tions encourage separate con-^

j

■

aid programs.
The
titled "the Foreign

bearing 44;
recommendations, is being stud¬
nomic Growth" and

by

•

duce

called

ied

•

industry abroad, and thus re¬
expenditures for. foreign
economic assistance and other

•

p age
!

*■

.

.

-

TELETYPE NY 1-971

LERNER & CO.
Investment Securities

10 Posi Office

PSrCIr

Square, Boston 9, Mass.

Telephone
HUbbard 2-1990

Teletype
BS 69