Full text of Commercial and Financial Chronicle : April 22, 1954, Vol. 179, No. 5318

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BUSINESS

ADMINISTRATION
LIBRAE.!

ESTABLISHED 1S39

Reg. U. 8. Pat. Offioe

Volume 179

New York 7,

Number 5318

\ EDITORIAL

As We See

:

1954 and Thereafter

events

during the past few years have
caused such a stir as the Oppenheimer case. Asitonishment and mystification have struggled for
:
supremacy in the minds of most observers. Were
] it not for the Hiss, Fuchs, White and other almost
.incredible affairs, one might well arrive at the
conclusion that either the activities of Senator

regarding need for

present data
of nation's

Estimates

sales market.
ments for

as

The question of how many
are

necessary

has been the

the

and

million

been

one

num

one

of the worst

until

on

of

with

Continued
♦An .address
Officers'

Banks
and

55

by

Held

Mr.

Association

before

April

15,

1954.

employment.
a

year

before.

Sep¬

Last

By Novem¬

was 303,000 below 12 months
before; in January, 1954, it was 871,-

below

000

March it

January, 1953; and in
1,400,000 below March,

was

1953.

<-/. ;

—;v

The average hours worked in non-

agricultural industry have dropped
only slightly—from 41.0 per week in
February, 1953 to 40.5 in February,
1954, but in manufacturing the drop
in hours has been more pronounced—
H. Slichtet

Sumner

1954.

from

40.9
per
week in February,
1953, to 39.4 per week in February,
The annual rate of personal incomes before taxes

dropped by about $4.2 billion, or 1.4%"between October,
Continued on page 34

48

the Joint Meeting of Savings
IV and V, and the Auditors
State of New York, New York

♦An

of Groups

Comptrollers Association of the

City,

page

of the decline is the volume

civilian

ber, it

over

substantial

on

employment, and personal

000 above

units per an¬
a

few

tember civilian employment was 46,-

ments, replacement of dilapidated or temporary housing,
relocation needs of tenants displaced by slum clearance,

ap¬

page

1962

new

a

began last summer is continuing. The
most up-to-date and comprehensive
measure

earliest, 1970.
Many factors contribute to the
need for new housing units, such as
new
household formations, popula¬
tion
increases,
population
move¬

Harry Held

,

depressions in history unContinued

which

increase in this figure on a per an¬
num
basis
from
1962
to,
at the

during
world wars

past three or four decades, Two

incomes

The most common denomi¬
nator of potential requirements has

to have been particularly numerous

pear

arid

over

in

come

The Decline of Business

The decline in production,

again.

stupid or otherwise ineffective members of so¬
ciety who pride themselves upon differing with
everyone else, history has often been largely
shaped by others so gifted with understanding
and imagination that they were able to lay the
basis for a much better life, materially, intellec¬

speak,

revised

and

made

vital part in human progress—or at least
always

These variates from the norm, so to

per annum

fraternity.
Many estimates of
potentials involved have been

the

should

government, assistance,

distributors, and the mortgage bank¬

ing

and (3) larger spending by

revival

f

to meet the housing needs of the country
subject of much discussion by the Govemment, the construction and home
building
industries,
material and
home appliance manufacturers and

that members of it have. While there are

t

housing starts

-

beyond tax
cuts. Concludes nation is now producing $6 billion less
than it should, and, as unemployment is wasteful, the
government in dealing with recessions should err in
doing too much rather than too little.

range between $5 billion
Concludes, in housing, 1954 should be
good or better than 1953.

and $7 billion.

Predicts

without

months,

housing in 1954 will

amongst us. There can be no doubt that
element, always with us, has historically

spiritually.

consumers.

mortgage money require¬

new

(2) larger spending for inventories and

governments;

production by business;

July 1960. Says there seems to be no question
industry can produce the housing units
needed, and there is no likelihood of any decline in the

tionist

or

potential hous¬

construction

Oppenheimer case and the entire Oppen¬
history have, however, called the atten¬
tion of the thoughtful once again to a very real
problem which permeates this so-called security
question and which is all too likely to escape the
minds of the great rank and file. It is the role of
the intellectual rebel, the philosophical noncon¬
formist, or as the Kremlin calls him, the devia-

tually

average

1953 to

heimer

a

annual

an

decline

business, and the salient features connected with it.
Sees as sources of revival: (1) larger spending by local

in

ing need of approximately 1,175,000 units from July

The

played

Dr. Slichter reviews statistical data relating to the

housing,

new

largest savings institution reveals

that there is indicated

McCarthy had created a certain hysteria in offi¬
cialdom, or else political fear of the Senator him¬
self had influenced, perhaps unduly influenced,
action in this instance. In any event, it is prob¬
ably as well to await further clarification.

this

By SUMNER H. SLICHTER*

University Professor, Harvard University

Lamont

Vice-President, Bowery Savings Bank, N. Y. City

official

Copy

Prospects for Early Upturn

By HARRY HELD*

After

a

Decline and

The

Housing Prospects foi
Few

40 Cents

Price

N. Y., Thursday, April 22, 1954

of

the

III.,

,

address

by Prof. Slichter before the Management Conferenca
Business of the University of Chicago, Chicago,

of

School

April

1954.

17,

— Underwriters,
dealers and investors in cor¬
afforded a complete picture of issues now registered with the SEC
undertakings in our "Securities in Registration" Section, starting on page 49.

SECURITIES NOW IN REGISTRATION

porate securities are
and potential

State and

m

U. S. Government,
State and

Municipal

Established 1856

*******

MARKETS

ALL
*

ON

CALL *

ONE

STATE

and

MUNICIPAL

Municipal

H. Hentz & Co.
Members

Bonds

i

Securities
*
telephone:

U. S. Government

HAnover 2-3700

Chemical
BANK & TRUST

—

Municipal,

All Corporate & Foreign Bonds

^

*

MABON & CO.

115

Bell System,

*

Amer. Stock

New

★

★

*

THE NATIONAL CITY BANK

★

★

★

Active

Net

99

WALL

CO., Inc.

122 Years of Service

To

Dealers,

STREET

NEW YORK

to
5, N. Y.

—

Refined

—

T.LWATSON&CO.
Liquid

Exports—Imports—Futures

Banks

Brokers

50 BROADWAY, N. Y.

Detroit • Pittsburgh
Coral Gables

Beach •

NATIONAL, BANK
OP THE CITY OF NEW




bridgeport

perth

amboy

Executed

•

On

CANADIAN

Central Maine
Power Co.
COMMON

AH

Analysis

DEPARTMENT

WIRES TO

MEMBERS

PoMDuoii Securities

MONTREAL AND TORONTO

goodbody

&

co.

NEW YORK STOCK EXCHANGE

115 BROADWAY

NEW

YORK

Geneva, Switzerland
Amsterdam, Holland

Hollywood, Fla.

Grporahoh.

YORK

1 NORTH LA SALLE ST.

40 Exchange

Place, New York 3, N. Y«

CHICAGO

Teletype NY 1-702-3

WHItehaU 4-8181

upon

request

IRA HAUPT & CO.
Members New
and other

111

Boston

York Stock Exchange

Principal Enphanges

Broadway,

WOrth 4-6000

DIgby 4-2727

:

CHASE

THE

BONDS & STOCKS

Teletype NY 1-2270
DIRECT

Bldg.
Y.

Exchanges At Regular Rates

CANADIAN

Members N. Y. Stock Exchange
American Stock Exchange

Orders

•

Bond Department

other Exchanges

Maintained

and

IRON MINES, LTD.
Commission

Raw

Markets

STEEP ROCK

Our Customers
Canadian

SUGAR

Chicago

Dept. Teletype: NY 1-708

Inc.

Trade

N. Y. Cotton Exchange

Miami

Bond

of

Cotton Exchange

NEW YORK 4, N.

OF NEW YORK

Exchs.4*

Teletype NY 1-2152

★

Orleans
and

RE 2-2820

Broadway, N. Y. 6

Exchange

Exchange,

Board

Chicago

^

Sixty Years of Brokerage Service

♦Members N. Y. and

Cotton

York

Exchange

Commodity

Preferred and Common Stocks

COMPANY

LAMB0RN &

New

Exchange

Stock

American

BONDS

4*

State and Revenue Bonds

Stock

York

New

Complete Brokerage Service

N.

Y.

6

Teletype NY 1-2708

Telephone:

Enterprise

lsilO

The Commercial and Financial
2

Chronicle

Thursday, April 22, 1954

.

(1774)

The

petition and trade in

We

Aztec Oil & Gas

participate and give their

Colorado Interstate Gas

Colorado Oil & Gas

for favoring

reasons

(The articles contained in this forum

Delhi Oil

they to be regarded,

•re

as an

Natural Gas & Oil

Senior

Jacques

Partner,

Republic Natural Gas

and

New

York

Southern Union Gas

Montgomery Ward & Co. Inc.

Npvv

Transmission

figure,
and

Pipeline

Western Natural Gas

old

an

so

.

.

an¬

of

120

a

this

While

company's af¬

Exchange

5

Teletype NY 1-583

f

fairs

r o m

a

financial

that

in

other

120

Exchange

Stock

BROADWAY, NEW YORK 5

ket

price of the stock, in this par-

Figures for

22%

that

question whether one can find

a

sets

securities!

Government

TWX LY 77

through the introduction

inventory

and

receivable

counts

towards the trend of the nation's
business
economy
will
change

be reasonwhatever ac-

may

that

certain

ably

L A. DARLING CO.
STOCK

Members:

Midwest
Detroit

Stock
Stock

Exchange
Exchange

DETROIT 26, MICH.
Branch

Office—Bay

City,

Mich.

.under

surveil-

FBI

vis-a-vis

taxes

there is a story behind the story, which over a pe-

Metal, which last
"
great
portion
from

ent

African

under the iron-clad

years

"rugged individ¬
ualist" who in the past has been
a

in
his
disagreement
with the policies of the last two
Administrations.

Democratic
been

lief

an

contention

his
the

that

for

country

economic

be¬

and

riding

was

fall,

It

the

hence

whose destinies he con¬
husband its re¬
for the coming storm and

company

should

trolled

prepared.

ures

are

related

many

fig¬

fantastic

the affairs of this

to

which

gether to make

sense

at all.

financial
ment

and

institutions

have

invest¬

Montgomery

their portfolio, and have

but even
they cannot rationalize Why this
.

.

.

1946 sold at 104 xk

Phone: HA 2-9766

Tele. NY 1-3222




time

of

offices

branch

our

Investment

Opportunities
in

Japan

Call
for

or

current

our

write

publications

Japanese securities

on

Yamaichi
Securities Co.,
\

Established

-

Home

Ltd..

1897

Office Tokyo—70 Branches

Brokers & Investment Bankers

V

111

Broadway, N.Y. 6 COrtlandt 7-5680

Trading Markets

important con¬
disgruntled stockan

will

with

bring

it

a

GENERAL CREDIT, INC.
(Prospectus Available)

PANTEX MANUFACTURING
SANDY HILL IRON & BRASS
REEVES SOUNDCRAFT

John R. Boland &
39 Broad St.,
B0 9-3242

Co., Inc.

New York 4 "

Teletype NY 1-4487

$275,009 Water and Sewer

income zoomed uoward from $8.7

n

be

American

year

derived

paying only $2 per annum
eight years later in 1954 the
same stock sells 44
points lower
at 60 and pays $3.50. In itself this
curious disparity is noteworthy,
but on top of that the company

during

.

profits

g s.

The
can

showed-

$3.38 for

$3.33

1952

$24.50

so

that

eight
a

of

26

the

for

be

M.S.T.

P.M.,

County,

Utah

*

until

8:00

Wednesday,

May

received

12th, 1954, at the City Hall; MidCity, Utah.

vale

Midvale

City is part of Metropol¬
- Lake
City. The 1953

Salt

itan

assessed valuation
the

was

$5,416,907.00

Issue

pledges

net

rev¬

enues

of existing Water and

Sew¬

priorities. The underlying as¬
sets comprise:

in

$28.25

for the portfolio

marketable
*

tions dropping

,

,

resenting

securities,

of

rep-

investments in
metal
mining

nonferrous
-•

$3.8
Armand G.

ac¬

Erpf

(b)

companies;
$10.37

per

share of working

officially estimated real

valuation $15,000,000.00.

er

(a)

from $6.2 mil¬

on

market

quite

opera¬

to

with

Lake

to

and

income

lion

Ameri¬

current breakup

a

Bids

of

of

compared

from

Salt

3,000,000 ; shares out¬
standing, preceded by $22 million

hot

1953

with

current

a

net

earnings

of

shares

common

Metal have

value of $47 which compares

company

systems

100%

with

The Bond

of

income

net

approximately 300%

of

of bond in¬

terest and

principal requirements.
W.
Gibbs, Fiscal
Agent, 401 Zions Savings Bank
Bldg., Salt Lake City, Utah, for
Write

Lauren

Notice

of

Sale

and

Brochure.

count of lower

lead and zinc prices, but

Continued

dividend

on

page

24

PORTFOLIO
•

Recent

-

No. Of

Shares

years

matter

Price

Company and Per Cent Owned

225,000
140.000

32,000
2,932.000

10,705.000
201.000

Value

Per

(000 >

Share

Climax

Molybdenum (9%)
—
41
Consolidated Coppermines
(8.8# )—*—_—9V%
Cerro de Pasco (2.5# )
'X
24

$3,225

Roan Antelope

9
2J/4

26.388

Rhodesian

O'okiep

(32.7%

Selection

Copper

1,140,000

Tsumeb

1,379,000

San Francisco

,—

Trust

(50.8%)

(19.7# )

Corporation
Mines

(28.5% )
of Mexico (33% )

42
9 (est.)
2 »/2

1,330
768

Over-the-Couiiter

24,086
8.442

Quotation Services

10,260
3.443

for 40 Years

Investments.

Total

.

earned
$66.96 and paid out in dividends
these

a

distributions from
Roan
Antelooe
and
Rhodesian
Selection Trust .which
benefited
from continued strength in copper.
larger

mainly

Bonds

City of Midvale,

million to $10.7 million, reflecting

while
.

25 Broad St., New York 4, N, Y.

to

Revenue

$83,947

31,

of $42.46

has been retained in the business,

Net Working

Capital

(Dec.

'Less Priorities and Reserves..

1953)

25,617
$30,832

Tangible Assets (Dec. 31,
Gross

Net

10.37

1953):

National Quotation Bureau
Incorporated

$56,293

Plant

Depreciation

$28.25

$56,449

and

Members New York Stock Exchange

wires

one

had for many years
stock in

its

a

Between 200 and 250

trusts

Ward in

of

well

very

million

can put to¬
theoretical point,
but in the final analysis make no
company

(9<PP£fiheifM/i & (fa

Mobile, Ala.

<

cannot fail to reap the ultimate benefits of "too much money
around."

The

management is and has been
some

There

-

v"
Direct

one

hold-

i

for

sources

Write for Circular

envisage

change in business policy, why
not
play the percentages where

its

Naturally

be

HUGO STINNES

and failing

...

centration

new

improving
foreign holdings

might

has

1051 Penobscot Building

NY 1-1557

.

outspoken

MQRELAND & GO.

of

have
been - screened -American Metal Co., Ltd.
minutely than a suspected
a
beneficiary
of

domination of

COMMON

St., New York 6, N. Y.

HAnover 2-0700

New Orleans, La. - Birmingham, Ala.

doubtedly

riod of time has gained more and
more national publicity. The pres¬

QUOTED

could

ARMAND G. ERPF
Partner, Carl M. Loeb, Rhoades & Co., New \ork City

represent under rather than overvaluations.
Those
figures
un-

lance.

SOLD

Exchange

taken at in the balance sheet

Communist

—

another

to come a time when either the
of the present views of the present management

servative character

more

BOUGHT

the stockholders in one

is

considering the ultra con-

more,

are

Lynchburg, Va.

by

represented

are

management, one

STRADER,TAYLOR & CO., Inc!

Exchange

American Stock

Rector

form or
that, one

pand the business! There is bound

.

.

American Furniture

Life Insurance Co. of Va.

have said before, these figures

we

Further-

Ward.

other stock on the Exchange
where 45% of these net quick as-

Dan River Mills

York Stock

New

Members

a
As

cash in
bank, and short-term United States

Not so with Montgomery
The net quick assets, after

suspect.

any

Commonwealth Natural Gas

for $1
paid.

that the share out of the $3.59

so

holders demanding a more substantial return on the investment,
either t rough larger dividends,
share shrinkage, capital repayments, or a little of all three.
It is one thing to be worth more,
dead than alive — it is another
thing to have enough for two lives
.—and with the strong probability

tories which

.

I

pany averaged 2% last year on its
sales, government, investments alone, it

the first-quarter of would' have accounted

down

are

ent 6% yield in our opinion is
unduly high for a company in this
condition.
If the com-

financial

in the past, and will again.1 Here
a nationally known and established business for 82 years which
has today in its business such a
super-abundance of fluid assets
that a new or enlightened management could set aside $20 to $30
cash repayment to stockholders,
or use- the money to ask for tenders to shrink the number of
shares outstanding, and still have
a super-abundance of excess working caoital to carry on and ex-

suspect, or very large invenmight be even more

be

is

Camp Manufacturing

Members

19

mentioned above are so much out
category contain in their current own this stock at $60 appear to of
ordinary accepted corporate
assets either a large amount of be giving away "ice in the winter." - balance that sooner or later there
accounts receivable which might
However, it has stopped raining must be a gainful distribution to

Trading Interest In

Bassett Furniture Industries

Steiner, Rouse &Co.

der-managed.
People who buy this stock for
long-term investment today, have
many things in their favor.
An
unforeseen -business
collapse

prevented

normal increase in

a

1954

substantial

a

has

decline)

business
even

ticular instance we hit upon some-

for

in

in excess of the current mar-

deducting all liabilities, and also
deducting the full amount of the
7% non-callable preferred stock,
amount to $87 a share
and it

Tel. REctor 2-7815

LD 39

it

was

are

Members

American

during the last five years
was
thought that the

(when
nation

.

Stock Exchange

(Page 2.)

City.

a

thing unusual!
f
- trend has not been reversed. That
Most companies in this selected is why people who do not care to

OTCpONNELL&fb.

Lo'eb, Rhoades & Co., New York

a»y

program

Jacques Coe

con¬

where
the net quick assets substantially

Since 1917

York

prob-

Bought—Sold—Quoted

management to partici- time will bring with it a more aggeneral expansion gressive business policy. The pres-

in

pate

cerns,

Rights & Scrip

Ar-

for 1953 were (which in our opinion is not likebillion dollars, ly) finds Montgomery Ward
even less than 1948, notwithstand"heeled with liquid funds" as we
ing an increased unit price, which can find no other company. Should
of course suggests the view that there be a new business boom, it
Ward has been losing out to its is possible that the present discompetitors.
.
^believers may change their ecoA reluctance on the part of the nomic religion, or the passage of

under

company

cate¬

of many

gory

Specialists in

—

Carl M.

,

standpoint are

New

Ltd.

Co.,

Metal

Sales

committees..

slightly

look.

second

1920

Broadway, New York

BArclay 7-5660

take

and

States,

well with investment

does not sit
•

blink his eyes

Member

and

ably outside of the country as
well, is that failure to expand and
keep abreast'of the competition,

recently

e

Ward, he will

Corporation

United

in

t h

published

New York Hanseatic

purposes

ters

Montgomery

Stock

American

contained in

nual report

American

v

appraisal of Montgomery
The conclusion in Wall

curity
Ward.

saying that liars

Louisiana Securities

City. (Page 2.)

nor

that
uicxi
—
been young blood, or because the old
fundamental change in the se- blood retires!

a

.

trouble

Texas Gas Transmission

Established

Partner,
Jacques Coe & Co., New York

Certainly one thing is quite evibut figures never lie
dent. At the $60 level, Montif one wants to take the Street,
Milk/ Street,
La
Salle gomery Ward not only is underof analyzing the statistics Street, and all other financial cen- valued and under-priced, but un-

There is

Taylor Oil & Gas

Stork

York

—

—Jacques Coe, Senior

There is no question- but
mere IS no quesuuu uul
over the oast years there has

Fxrlianee

MpimWr

Associate

Ward & Co., Inc.

Montgomery

the theoretical value of

to

Alabama &

stock.

the

City

and

intents

all

to

added

& Co.

Coe

Southern Production

Trans Continental Gas

be,

to

Participants and

Their Selections

mand G. Erpf, Partner,

JACQUES COE

Gas

intended

are not

offer to sell the securities discussed.)

Gulf Interstate Gas

Tennessee

Forum

particular security.

a

Week's

This

~

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

Oil

Canadian Imperial

Security I like Best

Reserve'

$24,895

Plant.

Established 1913

31,400
8.38

46 Front Street
CHICAGO

Net Asset Value

$139,674

$47.00

NewYork4,N.Y.
SAN FRANCISCO

(1775)

Number 5318... The Commercial and Financial Chronicle

Volume 179

Factors

INDEX

Affecting the Trend
Of the Economy

and company

and

tion

T*

■

-Ji~i tj-i * -

should be taken in order to stop

Probably

the

beautiful

look

us!

to

5
Obsolete Securities Dept.

6

99 WALL

STREET, NEW YORK

Telephone: WHitehall 4-6551

—Frederick W. Page

-6

j

any
United States Economy in Excellent Shape

10

Sinclair Weeks..

—Hon.

Let's Have

Ban

a

—

10

CROSS COMPANY

11

Deficits—Herbert Hoover

on

FOREMOST DAIRIES

Foreign Trade and United States Prosperity: The
Twins—Gardner

Siamese

important felt that easy money was detri¬
the United mental to our economy because of
.States economy for more than a its inflationary nature. Therefore,
after
this
Administration
year has been whether that econ- soon
took office steps were taken to
*omy
couId v
question

!

_

Securities Trading House—Rudolf Smutny

a

they

The Outlook for Electric Utility Common Stocks

unemployment. Concludes nation for next year
will face increasing. business cycle'problems, rising

two

W. Babson

Oil and the Investor in Iran—A. Wilfred May

unemployment, and increased monetary inflation.
-

4

Evolution of

further rise in
or

No matter how bad they are,

4

...

States porous steps

BEAUTIFUL

3

Economy—Harold A. Dulan

Organic Investment—Ira U. Cobleigh___

domestic investment to other de¬
mand components, Professor Dulan sees present business
slump due mainly to decline in inventory accumulation. Pre¬
sents data on nation's economic budget, indicating the-de¬
ficiency in demand needed to hold up present economic forces.

THE BAD AND THE

Cover

Reasons for Unemployment—Roger

shifting of

a

..Cover-

_:

Factors Affecting the Trend of the

faces problem of maintaining produc¬

employment at postwar levels during

Slichter

Housing Prospects for 1954 and Thereafter—Harry Held

demand from gross private

'«**■

H.

,—Summer

By HAROLD A. DULAN*

our economy

Page

Early Upturn

The Business Decline and Prospects for

Head, Department of Finance, University of Arkansas

Asserting

llCHTEIMIII

B. S.

Articles and News

3

most

concerning

Cowles.

__

Gold Standard

We Have Waited Too Long for Return to

L.

—Donald
v

Kemmerer

12

;____

Wiser___

Basis of Sound Money—Ray B.

FEDERAL ELECTRIC

12

—

,

-m

a

i

t

n

i

a

tighten the

n

of

productiv¬
ity and virtufull

ally
p

1

ly

ing declined,
price support

terially.

This

be too

to
•

severe

hous¬

Harold

A.

tain

Dulan

our

tionary bias.

mobiles declined.

icy

Since the end of World War

the

of

time,

II,
phe¬
been

our

nomenal

..nents

the

and

—Ivar Rooth

-

The

*

bond

gross private domestic investment
has taken about 15%; and the re¬

mainder has
ernment
•services.

been

taken

by gov¬

purchasing of goods and
Net foreign investment

has been abnormally low in terms

oriented

internationally

our

production

Private
continued

economy.

capital formation has
extremely high during

.postwar years, but for several rea¬
sons a decline can be expected at

time. However, our economy
faces a problem in
maintaining
any

employment at
postwar levels while shifting de*mand from gross private domestic
production

•

and

tion

relying

efforts

to

lishing

Lewis

Keith

component.

sumption

This

investment to other demand com¬

ponents. Furthermore, since the
shortage and many other

1

National City Bank

necessities

the gross

production subject to release by
private domestic demand

sumption

component. If the absorption does
not take place unemployment will

families

or

for installment pay-

becoming

a

As

The Administration's

cushioning

effect

our

was

eral budget.
•An

Annual

address

Meeting

Fed¬

Furthermore, it was
by
of

Prof. - Dulan at the
the P. E. O. Sister¬

hood, Fayetteville, Ark.,

present

the

Continued

NSTA

April 1, 1954.

38

Cover

__

specialized in

PREFERRED STOCKS

Securities

Our

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•

Stock Exchange

ST., NEW YORK 4, N.

Boston

Manchester, N. H.




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9

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30

The

.

The State of Trade

Washington and
*No article

Wallace Streete

You

New York

2-9570 to

HERBERT D. SEIBERT,

7,

1 Drapers' Gardens, London,
land, c/o Edwards & Smith.

Reentered

N.

Chicago

3,

111.

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St.,

(Telephone STate 2-0613);

Rates

Subscriptions in United States, U.
Possessions, Territories and Members
Pan-American Union, $48.00 per year;
Dominion

1954

Salle

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*Prospectus

on

Request

second-class matter Febru¬

as

Subscription

President

La

C.,

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

Y.

(general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation
records, corporation news, bank clearings,
state and city news, etc.).
135

E.

of America

Copyright 1954 by William B. Dana
Company

Editor & Publisher

SEIBERT,

Tracer lab Inc.

Vitro Corp.

9576

Thursday, April 22,

Offices:

*

56

—

of

Canada,

Countries,

Bank

and

Note—On

the

per

S.

WM V. FRANKEL & CO.
INCORPORATED

of

in

year.

year.

39 BROADWAY, NEW

YORK 6

WHitehall 3-3960

Teletype NY

1-4040 & 4041

Publication

Quotation

$33.00. per year.

$51.00

$55.00 per

Other

Every Thursday

Other

Jockey Club

5

this week.

DANA COMPANY, Publishers

DANA

Monmouth Park

2

_

and Industry

Reg. U. S. Patent Office

WILLIAM

Magnolia Park, Inc.*

16

_____

FINANCIAL CHRONICLE

Place,

Inc.*

6s—64

53

.

__

COMMERCIAL and

Park

Cahokia Downs,

46

—

49
—_.

Downs, Inc.*

Common

36

and You—By

.

Security I Like Best

Cahokia

34

.___

—

Salesman's Corner

The Market.

8

16

—

—

Exchange PL, N. Y. 8

Teletype NY 1-1825 & NY 1-1826

31

___

Governments—____

Security Offerings

40

47

Securities

Prospective

Y.

•

Chicago

mack1e, Inc.*

&.

42

Other

TELETYPE N. Y. 1-5

•

Nashville

21

in Britain"

Securities Now in Registration

Security

n^Request

Singer, Bean

8

Recommendations

Investment

on

Public Utility

v

REctor

TELEPHONE HAnover 24300

8

...

Reporter

o

*

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Our Reporter's Report

25

Members New York

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WILLIAM B.

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43

_____

Published Twice Weekly

have

Royal / Dutch

Notes

The

For many years we

6—69

37

American Shares

Bookshelf

News About Banks and

against

page

Magnolia Park, Inc.*
—

Washington Ahead of the News—Carlisle Bargeron

Mutual
-

Administra- ;
on

Lithium Corp.

HA 2-0270

deposit insurance. For basic

support

Hycon

;

36

Anniversary

Stocks

Einzig—"Investment Deadlock
From

compensation, price supports and
bank

33

Indications of Current Business Activity

Policy

balanced

a

(Editorial)

Dealer-Broker
...

present

nation

vy

24

Railroad Securities
a

tor

Coming Events in Investment Field

any sharp slide-off in business ac- y
Administration in tivity the Administration expects *
Washington felt, over a year ago, support from the many protective ;
that the most important aim for features
such as" unemployment *.

The

Protest Proposal

Says Tax Revision Bill Benefits

Insurance

Man's

Canadian

among many
United States is

quite inflexible struc-

and

Business

ture.

rise..

McGormick

Edward

_

See It

As We

Bank

potential
the

NY 1-3370

American Tidelands*

Regular Features

on

in

York 5

Teletype

•

Dlgby 4-1680

14

20

Sales Tax——

Individuals

prior purchases. Thus,
there is no doubt but that the con¬

ments

-•

r

a
large portion of total
spending units in our economy
already have most of their annual
income
committed
either
for

complexities of the international
economy render demand from that
area
largely non-operative, only
two areas remain to absorb the

Telephone

Military

Technical

at

___"

Food Industry Observes 25th

Frozen

ever,

dollar

and

Y. C.

'

20
Aiming

T. O. Yntema Sees Business Decline Coming to an End

aim

be realized—particularly for
three years longer. How-

to

two

Funston

Broaden N.

Dept.

&

Problems Discussed by

_.

Scores

Hammett

—-

___

_

and Economic

Social

A. Waksman

P.

Indicate

Superiority by Excess Secrecy

personal consumption will remain •
high and rise.
In fact, there is
tangible evidence that this Ad- '
ministration is relying upon the
strength of population growth and
the dynamics of available credit >'
to maintain and
strengthen the
demand from the personal con¬
may

Expenditures

Co.

Selman

;

There is confidence in gov¬

that

Capital

Antibiotics and

reduce

ernmental high policy circles

Manager

15 Broad Street, New

Optimistic Out¬
look, according to Dexter M. Keezer of McGraw-Hill Pub¬

individ-

is

5

Oh Lord, How Long? (Boxed)-

Prospective

purchasing from the government
level.

JOHN F. REILLY,

'•

How Long,

upon

indicate

28

Unlisted Trading

of gross

area

Members New York Stock Exchange

Stewardship in Securities Regulation

New

•

\'

and

ji

Sold

—

BURNHAM AND COMPANY

26

—

—J. Sinclair Armstrong

market

demand from
private domestic
investment
to
remain
high, at
least for the time being.
In fact,
many moves by this Administrathe

Kuykendall

'

business

heavily

very

22

'

Administration

The

Bought

20

/_

_—

—Jerome K.

uals rather than from government.

62%, which is consider¬
ably less than the proportion con¬
sidered normal in prewar times;

19

Federal Government's Role in Hydroelectric Development

However, the inflationary tech-.'.*,
from

CELLUCOTTON

18

Improvement in the International Monetary Situation

pol-

went back up.

mand

W. Wolkstein

—Harry

Interest rates

personal consumption

follows:

mass

declined

INTERNATIONAL

Why Industrial Development Revenue Bonds Should be Taxed

infla¬

easy money

reinstated.

.__

The Outlook for Nondurables—William H. Chartener

niques emphasized stimulus of de¬

has taken

of

The

an

productivity has
by the various compoof demand approximately

consumed

as

was

with

economy

ing and auto¬

most

high

Today—Jno. G. PewL___

Oil's Major Problems

so

our

15

Industry Coming—Edward G. Fox—_ 17

A Stabilized Anthracite

felt

was

level economy with a deflationary
bias to one of attempting to main-

cyclical prod¬

for

deflation

attempting to maintain

e-

vital

as

the

for>

.demand

ucts

and

Com¬

by May, 1953,
the Administration very definitely
reversed its policy from one of

d

lined,

such

arid

rose

declined sharp¬
demand for housing,
soon

and

-levels
c

immediately

market* declined.

GLASS FIBRES

13

___.

Growth Prospects of Television—Frank Stanton

automobiles, and many other im¬
portant products fell off very ma¬

govern-

.ment purchas¬

•

bond

modity prices

t

o y m e n

while

the

,

—E. C. Harwood

Federal; budget.

terest rates

em- '

Advantages of Return to the Full Gold Standard

supply and to
In¬

money

the

balance

.postwar levels

Record

—

Monthly,

(Foreign postage extra.)

account of the

fluctuations

Direct

PLEDGER &

Wire

to

COMPANY INC.,

in

rate of exchange, remittances for for¬
eign subscriptions and advertisements must
be made in New York funds.

LOS ANGELES

4

The Commercial and Firuincial Chronicle...

(1776)
n >

if

'e.f'

fr

IV

»M

/

f

i

-

Thursday, April 22, 1954

}

Somebody (to wit
pipe
organ
manufac¬
turers) said it wasn't an organ at

organ progress.

and

all!

Organic Investment
By IRA U. COBLEIGII

g

product

was

but

ered

sult

Whenever people talk about or¬

outside

the first
a

a

picture pioneer misfire commer¬
that is, cially.
to be of
Between 1930 and 1935 Ham¬

hospital

impression

seems

vast cathedral with powerful and

swelling

mu¬

sical tones and
harmonies

emanating
from hundreds
of
v

pipes
r

a

i

y

n

lengths

alti¬

A very

and

old

g

and

assorted
tudes.

of

ma¬

jestic instru¬
ment

this

is

In¬

organ.

vented

in

Alexa ndria

mond

Clock Co. spent most of its

time

3rd

famous

one

Cathedral

built

in

(England)

Winchester

about

950

It had 400

or

a

selling electric clocks, after
persuading some of the big
electric power companies to get
their generators operating at ex¬
actly 60 cycles — so the clocks
would
stay accurate. Hammond
clocks stopped when the current
went off
they didn't resume

The net
of

the

and

formed

Hammond

the

Teleview

Corporation which actually made

perts—they couldn't with certain¬
tell the difference. Hence, in

due

the

course

mond

was

an

Trade

Federal

decided

Commission

It's been so

organ.

since!

ever

time

reading.

the

on

of that

success

Hammond introduced the
Novacord, a versatile but not-

organ,

standard instrument played some¬
what like a piano.
It seemed to

Actually,

at

one

the

Solovox,

board

three-quarters of the electric clock
business
in
this
country;
but

tached

toward the middle 30's

and

competition

to

electronic

an

which

device

effect

electric

organ.

A

second-hand

piano, with everything deleted but

Solovox

each
for

and

every

year,

music

and

its stockholders the while.

..

..

NORTH CAROLINA

completely into

military,

and the fertile brain of Mr. Ham¬

mond

developed a control system
robot jet bombs of great stra¬

for

tegic significance.

Postwar, the
a
spinet

and

sold

has

Chord

buildings,

consistently well,

and, in 1950, there
the

intro¬
homes

for

organ

church

smaller

which

introduced

was

In

.

.

.

opportunities.
N

Carolina

our own mar¬

costing

organs

anywhere

Jefferson Standard Life Ins. Co.

Company

that

Drexel Furniture

Piedmont Natural Gas Company

For

Rose's 5, 10 & 25 Cents Stores

Wachovia Bank and Trust Co.

Company

details, quotes, prices, simply

definitely taken
ship
$975

the leader¬

over

with its units priced from
to about $3,500.
Hammond

has

sold

35,000

over

Hammond

this electric organ
more

together.
a

course

very

organs

is

not

to

were

ployment

and

reaso n a

b 1

prosperity
the

e

at

<

Pierce, Fenner




&

Beane

basic
for

reasons

the present
number of

Offices in 106 Cities

saving labor
building

throughout
istration.
manded

the

The

labor

higher

leaders

the

wages;

there

resisted

manufacturer and merchant to do

—namely,

introduce

automatic

machinery both for producing and
for

the nation is just

starting

new

To

women

employed; and (3)
the constantly increasing number

said

of age.

that

group

persons

65

over

It

can honestly be
in this older-age
listed in the "unem¬

many

are

ployed" category who would
have

been

classified

so

so

thing for the

one

employed are: (1) our increased
population; (2) the large num¬

years

de¬
con¬

higher prices;

only

was

ber of

able-bodied

up

Admin¬

Truman

un¬

not

selling

goods.

departure.

job in the future

work
the

both

at

one's

must take

and

the

this

on

hold

one

interest

greater

Furthermore,

do

a

better

bench

and

at

counter.

some

.

2%

the

field,

opening the

bags

and

sprinkling the fertilizer by hand.
Now

airplane loads with fer¬

an

tilizer at the
in bulk to

sprayed
air.

No

ground from

is

that company

wide line of

next,
turns

musical
follows

Baldwin

spring

manual

labor,

bags,

no

and better results.

What

The rapid

another

fewer

coin

machines

illustration

greater

sales

of

This

is

how

handled

are

clerks.

sales

up

also

with

reduces

properly.

The

practice

"But

unless

unless

they

have

JBut

the

who

minimum

are

371/2

American

on

Stock

permanent

solution

of

wages

and the

employers, for

picture at $1

have

been
and

paid

the

$20

faithfully

common

4-for-l in 1937. There

a

split
100%

stock dividend last year.

1954

around

are

earnings per share
$3.25.
Balance sheet

position is excellent with
current

ratio

(as

Shareholders

had

since

was

was

of

who
a

a

6-for-l

6/30/53).

entered

copy

the

in 1942 have

wonderful ride.

a

Here's
as

an unusual company that,
lengthened, but most\ sub¬

the

stantial shadow

of

a

versatile in¬

Laurens Hammond,
has advanced to leadership in its

tion of the founder and President,
Laurens Hammond,
with a

field, and offers to security buyers,
music loving and otherwise,
an
instrument

for

form

quite

ventor,

Executive Vice-President.

learned

the

as

office boy

through the
organ

Mr.

has
business from
years

For

here,

today's would

there

are

,

be

746,608

of

Mr.

a

investment

meritorious

too, may conclude

you,

mond is indeed an

Com-

ment.

will

work¬

mean

re¬

the

goes!

ers

that Ham¬

organic invest¬

always be
labor
or4

ahead;

the
a

no

prob¬
be¬

race

leaders,
shorter

for

hours,
auto¬

more

other

times

Labor has been

past 20

ployers
it

or

machinery. Sometimes labor
be

are

Let

years.

Now

the

top

on

the

em¬

having their turn. So
hope the employ¬

us

will not overreach for at least

another 20 years.
1

■

,

'

Joins Albert Theis

and

laden

investor

matic

the

own

your

common

shares of Hammond Organ

in

common stock.
If
further research into
this enterprise leads to an opinion
in harmony with -the above, then

growth

It will

employers.

Management is under the direc¬

Sorenson,

reduc¬

My forecast is that there is
listed

pany

a

hours.

higher

exceed

a

ducing the 40-hour week to 35

the

Cash dividends

a

This would

tween

should

has

for those

(2)

tion in the legal hours for

ing week.

con¬

increase?

an

wage

employed;

are

will

Washington

solution, which is (1)
in

buy.

wages.

goods

more

unemployment

tinue."

these

cannot

lem.

and

full

Solution?

dicated

1953

will

into

say:

people

And,

increase in self-serv¬

and

the

Is

unemployed

bought,
stores

gets

will

goods

Offsetting High Labor Costs

ice

There

unemployment when

building

Readers

the

dishonest clerks who do not ring

Wurlitzer

unemployed.

swing.

fields, where it is

the

on

is

not be much

factory and carries it

the

chances of loss to the stores from

console to credits.

Y.

re¬

due to

depression.

gradually

sumers

The

alone

than all the others

Sorenson started out

NEW YORK 5, N.

the

is

same

time.

Roger W. Babson

to

All these plans for

Production of Hammond instru¬
ments stems from four plants in
Chicago, all owned; and sales (for
fiscal years ended March 31) were
$11.6 million in 1951, $16 million

in 1931 and

Merrill Lynch,

And

unemployment

Exchange and quoted at 26 with
an
indicated $1.50 dividend.
In¬

as

70 PINE STREET

union labor leaders.

unem¬

field, but it

Mr.

contact—

Trading Department

upon

merchants by

and

have

now

both

younger man, Mr. S. M.

Chadbourn Hosiery Mills, Common

manufacturers

we

from

•

to $50,000, in the wide
popular market the Hammond has

1937

Occidental Life Insurance Co.

Casualty Insurance Co.

can

$10,000

million this year.

Erwin Mills, Inc.

Blue Bell, Inc. v

these

forced

been

years ago. The vitamin pills taken
What Are the Facts?
This amazing instru¬ by older people
undoubtedly keep
ment is so designed that even per¬
The above facts are why I
them in the "employable" ranks
say
sons with no musical training can,
longer. There are about 7,000,000 that 1954 can be a fair year not¬
with a little practice, play many
more
of these people now than
withstanding an increase in the
pieces with full harmony.
All there were 25
years ago!
number of unemployed.
The fol¬
they have to .do is play the air
The
constant
introduction
of
with one finger on the right hand,
lowing figures are interesting and
and
touch
a
button
with
the new automatic machinery results
important. At the top of the last
left, which invokes a three- in both unemployment and con¬
big boom in 1928-1929, 1% of the
part chord to harmonize with the tinued
prosperity. One of my as¬
population was unemployed. In
tune.
The
possibilites
of
this
sociates just visited a chemical
Chord Organ, as an instrumental
1932, at the depth of the depres¬
outlet for the musical aspirations plant where three men are now
sion, 9% of the population was
of
thousands of
eager
but un¬ doing the work of 80 men. Fertil¬
unemployed.
Today, with a pop¬
tutored amateurs, is enthralling.
izing plowed fields has been d<pne
ulation of 161,000,000
Every man, his own Liberace!
people, only
by hauling fertilizer in bags to

Wurlitzer in electronic organ sales.

...

the South—

of the stocks we buy and sell—or make
the following:

have

lines.

organ, now advertised

.

better than average investment

changes

many

All

other

in

textiles, wooden furniture

North Carolina's total sales and income top

in

nationally.

out

diversified from fishing and food to machinery and mining

American Trust

learn

of

company

duced

stores

super¬

adopted by

pression." The
public must prosperity—not

at¬

pre¬

by most modern

markets will be

sultant

widely popular today.

instruments.

American Enka Corporation

so-called

any

followed

"Business De¬

key¬

be

can

cision electronics for the

but of

kets for—are

pres¬

not due to

are

During World War II Hammond
went almost

put

(Sleeper in the South?)

some

the

figures on unemployment are
very misleading.
With retail sales
holding up reasonably well, these
figures surely

of

is

does sell

Among

that

trumpets, horns,
got terrific, patent suits were rife clarinets, saxophones and mem¬
and some other line of products bers of the violin family.
This

in

at

convinced

am

piano and, as a solo
duplicates the tone

a

instrument,

churches.

hint

I
ent

Building

point, Hammond was doing nearly

.

cotton

perity—not to depression/'

Ham¬

the

'

leader in tobacco,

our increased population; (2) larger number of
employed; and (3) increasing number of able-bodied
persons over 65 years. Says because of greater use of laborsaving devices, tbe resultant unemployment "is due to pros¬
women

require, however; a special play¬
ing technique and while popular
spinning when the juice came on for a while, was discontinued from
—that would have given the cus¬ production in 1941. A more last¬
tomers
a
sluggish and incorrect ing stable mate to the organ was

1937, the company ^ name bgcame
and
projected three-dimensional Hammond Instrument
Company;
pictures. Only because it appeared and in that year also came the
too early in history did this depth ""only serious challenge to electric

B,g

ployed: (1)

re¬

—

two

needed

Rabson gives

ex¬

pipes, 26 bellows the
keyboard, was deployed into
organists to play
laboratory action. A midget elec¬
it. Within 300 years German va¬
tric motor (1/100 of a h.p.) turned
riations
and
improvements
re¬
a
shaft with
91
humped tonesulted in three banks of keyboards
wheels on it.
These wheels, in
and a pedal keyboard much like
turn, set up electric current in a
the classic consoles of today's ca¬
coil and, depending on the num¬
thedrals.
And, until 1935, this, ber of times the
humps went past
excluding some types of home, the
coil, varying scale notes were
small range pump and pedal or*
created. The prototype model fi¬
gans, was the standard organ. But
nally contained 8V2 miles of wire,
today the most widely used organ could
duplicate the tones of a
is electronic.
pneumatic organ with pipes 16
To go back a few years, a most
feet high; and this electronic Or¬
talented gentleman graduated
pheus was only 4 feet high.
It
from Cornell with an M.E. in 1916.
wouldn't get out of tune, and un¬
In 1953 the corporate moniker
His name is Laurens Hammond,
like the massive pipe job, was not was
again changed, this time to
inventor since age 14, with over
disturbed by weather changes.
Hammond Organ Company, which
90 patents to his credit at the mo¬
more
accurately
describes
the
A king-size
ment. In 1920 he patented a tickunveiling of The
company's activities. About 75%
less clock which was later to be¬ Hammond Electric Organ, held at
of sales are to private homes and
come
the
City
just
19 years
ago
background product Radio
churches—the balance to schools,
for
Hammond
Clock
(April 15, 1935) started this magi¬
Co.,
or¬
night clubs, hotels, broadcast
ganized
in
1928,
and
pioneer cal music maker on its merry
etc. While
for
certain
commercial way. 1,400 units were studios,
manufacturer of electric clocks.
sold in 1935 at $1,250 minimum larger churches and theaters, the
Then
in
1922, a full 30 years
Hammond
organ
may
lack the
price,
and
from
1936
forward
volume and range of the big pipe
ahead of his time and market, Mr. Hammond
has made
money in

A.D:

Expressing view of unemployment figures are misleading, Mr,
as basic reasons for present number of unem¬

the

confusion

a

was

Unemployment

By ROGER W. BABSON

ty

first

(L'gypt) in the
century
B.C., the pipes were first filled seemed indicated for sustained
with varying amounts of water, corporate progress.
An automatic
and the thing was called a "hydbridge table, which shuffled and
raulos."
This type was standard dealt the cards electrically was in¬
till
the Middle
Ages, and had troduced,
and
enjoyed
some
rather a pagan overtone, since it measure of success.
provided the mood-music at the
Then there came a day in 1933
Roman games for that demented
when
a
strange
flute-sounding
sportsman, music lover and fa¬
"beep" was heard in the Ham¬
natic fiddler, Nero. Pneumatic or¬
mond factory. It was, as you may
gans, as we know them, first ap¬ have
guessed, an electronic "beep,"
peared perhaps as early as 400 the first note in what was to be¬
A.D.; and there was a big and come the sensational Hammond
Ira U. Cobleigh

settle

to

the Hammond others.

ventive mind of Laurens Hammond.

gans,

pipes

question.
A
pipe organ played certain pieces;

from the day
pipeless dream in the in¬

a

have

gan.

of Hammond Organ Company

when its feature

didn't

windpipe—hence 'twasn't an or¬
A body of experts was gath¬

Enterprise Economist

A swift review

It

Reasons for

viz,-

(Special to The Financial Chronicle)

ST. LOUIS, Mo.—John F. Koch

has become connected with Albert
Theis

Fourth

&

Sons,

Street,

Inc.,

314

members

Midwest Stock Exchange.

North
of

the

:

Volume 179

ff

wj,* »r >.;i;v «tf>v

u'"'

'.V'" :M)

.i,itfyt-y

ffv'j* w 1 'i-'•"•;■ 4v .'?^ v*'\V.«.

»« |

Number 5318... The Commercial and Financial Chronicle

(1777)

decree

a

Y^~
Steel

The

..

Production

Council

By A. WILFRED MAY

Carloadings

State of Trade

Weighing the effects of the anticipated oil settlement and
rehabilitation, Mr. May concedes its indispensability to the
country's economic recovery, but points out the permanent

Trade

Retail

Commodity Price Index
Food

Price

Index

Auto Production

and

Industry

drawbacks to the safety of foreign capital ensuing from the

Business Failures

;i

J)
A

slight decline in over-all industrial output for the nation¬
al-large occurred in the period ended on Wednesday of last week
and compared with the comparable week a year ago, production
dropped about 9%.
; V-.- r
_■
■ rV'i".

TEHERAN, IRAN—"Yes in the
following the coming oil
controversy's
settlement, development of this country's huge natboom

ural

In

the

week

ended

April 10,

/

•

result of

reduction

remain

consumer

in

the

manufacture

rials
rials

At

i

in

m

^

*

This
p-i

the

was

tn

surprising

attraction to foreign

in

monthly report to Congress.
This com¬
pared with 124% in February and 125% in January.
The record
high was 137% in July, 1953.
March production was down 9%
from the like month last year, the committee reported.

set

yearly

vnn

successful record

investment.

with

Steelmaking scrap prices rose this week for the fifth consecutive week, according to "The Iron Age," national metalworking
weekly. Increases* raised "The Iron Age" steel scrap composite

is

pace

ton to $25.67 per gross ton.

a

',,

7

-

edge

is

within

up

stabilized.
month.

the

And it

'

well-founded

some

With

South

hardlv

.

.

needs

invest¬

after taxes

be transferred, and

can

country's

America,

exchangeable*

export

goods

iciting pa

1 goods and
^7 ^

CsMd°intmifhfls

intent as well as a re-

•

petroleum currency, is
coun^erbalanced by the destruc-

tive potentialities in the political
n

fh

nvpraii

ppn

?***! sovera11 ec0

materials.

raw

However T must be concluded

mfl°^

are

herself

Iran

manufactured

wants to

iiuinit cxigcnLics.
Need for Capital Appreciated

^

American policy, holding that

„

Vl

"nationalization of investment un^ *s fully realized here that dermines the stability of the free
foreiSn capital is required to world," has been clearly set forth
build plant for export, at least to

the

to

Iranians

Ambassador

by

other soft currency countries. To Henderson. But it may be asked
this end, some nibbling at invest- whether the Persian man-on-the-

appears

lacks the

or

The

two.

-

ment

liberalization

already

has

street

or

politician

whoop

gives a

steel

a

can

Barring

realized

be

the

oil

found

tion, rather, is: 'What

to

to

overcome

here

support

friend's

I

QUERY: How long must

my

forecast

oil re-flow.

an

e

pre

-

Even under

Mossadegh

than any

favorable

budget-balancing with
oil revenues, conversion presented
difficulties.

Now

the

•

question that steel order books have been through

of

use

COBALT CHEMICALS LIMITED

1951,

early 1952 by
foreign exchange re¬
raiding of the gov¬

the
and

ernment
sources

••

since

revenue

financed until

serves

a

trust
dried

funds.

These

CAPITAL STOCK

rfn

in August, 1952,

up

10%, "Ward's Auto¬

workers in
the

ture.

on

Friday of last week.

is requiring additions of overtime and production

many avenues of Chevrolet manufacturing and lifts
industry's January-June United States program to 2,966,000

the

Continued

on

page

41

in

2.

From

the

proportion

rials of revenue

of

7.7

10.3

to

3. Almost countless new uses for cobalt and its alloys in
electronics, machine tools, aircraft, etc., promise contin¬
ued growing demands for these metals.

Ijas been compensated
by United State aid, which has

mounted

ANNOUNCING

to

$45

million

current fiscal year,
THE

ADMITTANCE
TO

NEW

OF

OUR

MEMBERSHIP ON
YORK

STOCK

FIRM*

in

the

exclusive of

According to recent issues of .'The Northern Miner,"
Cobalt Chemicals' future operating profits may be extreme-

Pertinent is this somber

warn¬

*

We recommend this

•

ing appearing currently in the lo¬
EFFECTIVE APRIL

cal

1(5. 1954

Tolu:

newspaoer.

ernment and the

"The
and

"

•

•'
.

"

established

&

CO., INC.

NEW

YORK

MIDWEST

Empire

Building

STOCK

changed since the last war. The
damage done by Mossadegh's Gov¬
ernment has not yet been repaired

!930

MEMBERS

.

and

EXCHANGE

Des

Moines,

we

budget

STOCI^< EXCHANGE '
4-9113

greatly

enough
Iowa

still

are

deficit.

talk

to draw

come

faced

There

the

and
a

sound

with

has

a

been

time

*

-i

-i

.

i




t.

>

>.

f

x

;

J

,r; r
"♦

,.i.

-

'

»

v

1>

i

£

.i o

plan for the

• vt

-

Li * "

*

> Vi.e

\

*.

11'

5TyU

i

*"

i

■

i

r.

i

'

i

i

-

j

iv

,

I

"

•

•.

'

or

'

'

*

'

.

: '

.

•

•.»•".

.I

'

•

'

'

-

""

call for Report C-30
iA

...

'

.

;

McCoy & Willard
Investment Securities

has

future."
i

'

Write, phone

'

.

.

•-

,

T. C. HENDERSON

as ati

PRICE ON APPLICATION
:'

realize

*

that world conditions have

low-prieed sto<rk

attractive speculation

Gov¬

Majlis must take

of the situation

stock

;

ly large.

Oil Revenues Insufficient

EXCHANGE

•

4.

a

$23 million outlay for Point Four.

THE

operations at it*

billion

billion of

expenses)
for

Company has just opened and started

giant modern refinery at Cobalt, Ontario, which is in the
heart of Canada's largest known cobalt area.
*

September, C: 1953 to
present the deficit, (running
..

Company is managed by Quebec Metallurgical In¬

dustries Limited, a subsidiary of Ventures Limited and
Frobisher Limited.

printing press, and by August,
1953, increased the currency out¬
standing by 40%, secretly and il¬
legally disregarding the legisla¬

move

Cxceptional Canadian Jnueltment Opportunity
1.

when the authorities turned to the

April-June automobile

Reports," stated

our

cur¬

has become really soft. The
budgetary expenses coupled with

the wringer. Although this hasn't been very pleasant, it has at
least made producers confident that their books are more repre¬

The

]they would have to endure without

rency

curtailed

motive

peo¬

aid?

situation of

some

subsidize these

we

ples in order to keep them interested in avoiding
far greater hardships at the hands of the Kremlin

of

-

t h

the minimum levels of

are

living in other countries consistent with the main¬
tenance of a strong, large, stable, and safe free
world.' "—Howard S. Piquet, Senior Specialist in
International
Economics,
Legislative Reference
Service, Library of Congress.

un-transferability in the

currency

face of

were

Chevrolet

much

executive

been closed.

and

power

investigation

on

ma£ later boost May schedules after books would normally have

production schedules by 5%

de-

'

have

er although some June business is in and quick delivery requests

sentative of actual business, concludes "The Iron
Age."
General Motors Corp. is increasing its

current

de-nationaliza¬

been accomplished

bargaining

And

It became increasingly uneconomic to collect material
—especially in areas more remote from the mills. Result: Higher
prices were needed to bring out the scrap. An analysis of the
market bears out this conclusion, this trade
authority notes.
While rate of new orders booked during April is not
enough
to boost production, it is at least equal to the rate of new business
a month ago.
The bulk of business placed now is for May deliv¬

no

the

and

it;

tail spin.

There's

will

only under duress. The confiscat¬
ing spirit is there to remain; with
foreign lenders not having

long

'•

Factors

other

Scrap price increases so far seem more to reflect a correction
within that industry itself than they do an upturn in
steelmaking.
After passing from scarcity to
oversupply prices went into a

■

that

tion will have

modest, it adds.

'

an

as

Importantly it must

confiscation

back.

•

give all these billions
merely to fill a so-called dollar gap. Interna¬
tional accounting balance between ourselves and
the rest of the world could have been brought
about very quickly after the war had the United
States not cared about the levels of living of the
peoples of other countries. Had we not given any
aid at all, balance would have been achieved, but
at a low level of despair and much of Western
Europe would in all probability now be Communist.
In essence, the dollar gap is the expression and the
measure of
foreign aid. To say that aid, or even in¬
creased trade, is necessary in order to fill the dollar
gap is an almost meaningless statement. The ques¬
in aid

of

The flow

flies-in-the-ointment

still remain.

significant up¬

sudden darkening of the labor picture or increase
tensions, the steelmaking recovery will probably

a

will

economy

Negative

Long, Oh Lord, How Long?

"The United States did not

purposes:—(1) To support govern¬
ment
expenditures and fill the
gap from tax evasion; (2) To bol¬
ster foreign
exchange, reducing
.the price of imports and main¬
taining the exchange rate; and

Residual

in international

be gradual and

the

How

.

situation

Consortium

serve

But

point to

get off its

>

oil

the

of

highly

a

-y.^

.

is

market

increasing number of orders for "quick
delivery" and nearing wage talks as potential stimulants, but steel
buying psychology is still in need of a powerful stimulant before
it

been enSaSed in. Last December about the free world's stability,

(3) Keeping down unemployment.

that it reached its low point last

zip needed to start

a

as in the past
indispensable for several basic

hope that the ingot rate might

month

next

now

Yet it still

Producers

;

the

foreign
trade restoration, extensive long-

of oil in the future

ward movement.

;

Tran'«i

international

extremely bullish force.

y

;

the

course

Ordinarily this would indicate that a substantial increase in
steelmaking is just around the corner, but analysis of many inter-:

There

:

advice

capital by

in

.

Settlement

of $359,000,000,000.

This was a drop of $4,500,000,000 from the rate in the preceding three months.
But con¬
sumer expenditures maintained an annual
gait of $230,000,000,000,
unchanged from the final quarter last year.
a

mn

Government, and having

views and field reports does not lead to such a conclusion at this

I

for

new

Greece, Turkey and

aessmeir

be

Consortium.

in

American oil executive now
as adviser to the Iranian

top

its

J time, states this trade magazine.

.

And

working of the

acting

disclosed

.

.

you

rpparrlim*

Output of the
nation's mines and factories, as measured by the index, dipped to
123% of the 1947-49 average, the House-Senate Economic Com¬

price 50 cents
■

if

rpmain hprn

permanently"

goods in March
industrial production

Total production of goods and services in the March quarter
;

into

prepared

are
a

pJt

only

Iran

wif

a

mittee

7

cur-

money

brought about a "slight further drop" in
according to the Federal Reserve Board's index.

-

the oil

the

of

will

unit!

rcncy

So

in

ft h e
Ltne

Iranian

durable

of

will

proceeds

spending holding close to last year's
peak level, it. has helped stem the downturn in general business,
according to Louis J. Paradiso, the United States Department of
Commerce's chief statistician.
March quarter outlays of this kind
ran at an annual rate of
$230,000,000,000, he reported.
This was
only $1,000,000,000 below the record pace in the third quarter of
1953.
It was $2,300,000,000 above the rate in the January-March
period last year.
>V:>
r'f'.v
A

consequence,

revenues

Ministers,

Holland is being closely watched
by government officials and busihere. The Dutch law,
which provides that all net profits

funds way
anticipated oil
required, no
matter what the final deal with
a

excess

But, mark ing in from European countries,
words, the including the on-the-job Germans.

my

ment of Labor reported.
Thirty-six states reported increases with
Indiana the only state reporting a decline of more than
1,000.
a

op-

As

in

of

ment laws

TesTofprS- Sg these nners%?ratreadyeobJne!
it.

insurance jumped by 49,100 to 387,900, the United States Depart¬

As

afford

plenty of

■

claims for unemployment

new

resources

will

Unemployment dipped fractionally with new and continued
claims for unemployment insurance also reflecting a slight drop
below those of the previous week.

The

nation's residual fiscal and political difficulties.

;

passed

was

by
the
tentatively
to the effect that any
foreign in¬
vestment
receiving approval by
appropriate
authorities,
would
have "the protection of law," and
that further regulations would be
issued. These regulations are now
being worked out.

Oil and the Investor in Iran

Electric Output

r t *f.-.

5

39 Federal Street, Boston, Mass.

1

Tel. HUbbard 2-37IJ

The Comrtiercial and Financial Chronicle

6

Evolution of

Trading House

By RUDOLF

r

Hutzler

uous

concern.

modest

Points out there is little narrow
specialization in securities business, and activities of commis¬
sion houses, traders and underwriters overlap.
Describes
development of large scale bond trading and the department¬
alization resulting from it. Stresses need of a flexible trading
organization, "geared to the times," and responsive to changes
in investment demands. Describes operations of the "trading
tween

bid and asked prices.

at

static
,

and

of

foundation
Bros.

based

on

the

have

40

of

—

premise, which
meticulously

we

a market
constant .bid and

taining

years

always
the

I

sible

pos¬

highsecuri¬

grade

suitable

for

is

course

of
of

ing firms engage in underwritings
of all varieties. I do believe, how¬

institu¬

were

era

ex¬

—have
many

within

of

confines

the

As

need for and

institutional

looked

loans

commenced

As

we

began to deal in bankers ac¬
ceptances, which in those days
were
outstanding in much larger
volume than they are today. From

invest¬

there

plete

It is quite a

tion for Wall Street.

creasingly

important part

in

that

our

we

expanded into other high-

-

The

stock

crash

a

Closed-end

1

rarely buy

both

we

became

ic

the

market

some

Frederick

targets,

W.

Page

investors

and

avoided
would

they

as

a

new

a

war

dawned.

era

Both

.

industries

returned

investor

to

This,

creased

ing

security holders

It also

brokers.

the

from

characteristic

business activity of firms who are

primarily

underwriters.

Super¬
imposed upon our trading activ¬
ities, have been our participations
in underwriting and private place¬
ments. Through tips, we have be¬
come

many

companies'

To

provide

a

continuous

mar¬

•

Large
The
it

you

have to "take a position";

that is, to go "long" for your own
account

require

principal. It may also
you
to go "short."
For

a

a bank comes in and
half million bonds when

*An

address

Institute

by
of

Mr.

Smutny before
Banking

Investment

Seminar, Wharton School of Finance and
Commerce, University of Pennsylvania,
Philadelphia, Pa., April 15, 1954.

of course, required financ¬
through bond flotations as
well as by stocks. Banks then be¬

Trading

as

we

know

fairly recent devel¬

a

firm

market

investment
banks

economic

scene

than it has since become. Consider
the market for U. S.
for

example.

came

War,

to less than

Federal

Governments,

Prior
a

the

First

Treasury

total

debt

to

'

billion dollars.

budgets in those far-off,

pre-depression,

prewar,

Keynesian

times

never

.pre-

even

insurance

and

the

and

,ap¬

this

in

Savings
companies

for

demand

known

of

ume

CONSULTANTS ON

Liberty

in

established a
in
U.
S.

trade

to

Treasury Securities.
Our

MUNICIPAL FINANCE
'

had

firm

•

the

called

other

categories

of

fixed

for

in¬

agencies in financial public relations,

improvement of public credit, sound financing of

post-World War I period,
the tempo of bond trading quick¬
ened perceptibly.
Much of it, in
contrast to

Board,

today,

and

two

done on the
our partners

was

of

who maintained seats

capital requirements and other problems of

York

public finance.

of

invited,

Stock




Consultants
70

PINE STREET

on

their

time

on

NEW

YORK 5,

growth

post-war

industry averages and,

are

as

any

at

asset

a

value, .de¬

the

and

security

conditions.

market

Both the

on

the

and

discount

pre¬

tend

fluctuate in relation to asset

to

value,

upon market psychol¬
Most companies have adopted
a policy of paying out their entire
realized capital gains. This policy

depending
ogy.

together with the fact that they
rarely
sell
new
securities and
sometimes retire outstanding se¬
curities

their'

explains

of

lack

growth in assets. As a matter of
fact their assets were $42 million
less at the close of 1953 than they
were

Dec.

on

1945.

31,

net

The combined industry had

lion

figures I have cited to

your

its

sell.

to

slight
substantial dis¬

at a

or

pending

approximately $5.1 bil¬
Dec. 31, 1953. Of this, the

of

assets

112%.

on

other

some

be

may

from

mium

listed

wishes

who

price

premium

the number of

rose

on

for

accounted

segment

open-end

slightly over $4.1 billion, and the
closed-end

123%-. *

the

accounted

companies

increase

an

assets

223%

in

net

tance

would be considerably
if credit were taken for
the substantial capital gains divi¬
dends that have been paid.. The
funds'

security

their

holders,

customers,
224%.
For
the

who

are

have increased
open-end
com¬

these are industry aver¬
I could select individual
with more impressive
is suf¬

panies

very

in

*A

talk

March

by

Mr. Page

Conference

Annual

Electric

44

growth

explain the difference be¬
the open-end funds com¬

tween

page

their

nature

potential is limited. Perhaps I had

Exchange,

23,

1954.

of

before

the

Boca

the

21st

Southeastern

Raton,

Florida,

approxi¬

common

stocks

by various institutions. Of this
amount, investment companies ac¬
counted for about 45%, pension
and all others for

is quite different than

the situation

12

of just

total

the

mand

better

on

in

invested

fast growing

industry.

1952

billion of new funds

mately $1.1
was

in

that

estimated

when

the

N. Y.

investment companies. It has been

ficient to show you that we are a

floor of

to insti-

institutional demand

19%. This

have been excluded from
the above comparison because by

response

of the

growing rapidly due mainly to
the growth of pension funds and

funds for 36%,

But I believe this

the impor¬

is

companies
records.

'

stock

common

However,

ages, and

The closed-end investment com¬

markets. Canadian borrow¬

of

bulk

the

ownership.

figure,
higher

I

.

Owners

Private individuals still account
for

has

during this period, and the

their

Continued

industry

of

..

Individuals Main

-»

,

company

"

'

„

Private

As compared to this showing,
the open-end segment of the in¬
had

securities.

your

Growth

,

made their first major appearance
our

\

Open-End Investment Company

all

Exchange.

erably, and in
•

Now the
measure

and

from

market

the

count

is

stock

exchange, and to be¬

stockholder you buy stock

stockholder

in¬

the New

ing in the U. S. expanded consid¬

Municipal Finance

industry

spent

on

Exchange

At this time, too, foreign bonds

WAINWRIGHT & RAMSEY INC.

125%

panies,

securities.

In the

~

advisory service has proved its value to all types

are

we

general bond department

come

Inquiries about this individualized service

de¬

partmentalized and was grouped
in the following units — bankers
acceptances and other short-term
securities, U. S. Treasury obligations, railroad bonds and equip¬
ment trust certificates, and a sort

all

independent financial

During the

Company

vestment

become

now

of catch-all unit which

20 years our

years.

equipment

Loans increased, we

department

VITAL LINK

vestment

Now, as the vol¬
Loans and War

"

of governmental

rose

your

period,met assets of the In¬

same

a

movement,
long-term

dealers

as

trust certificates.

over

revenues

eight post-war

risen

1

For

102%

plant in¬
operating
during the

gross

sell their own se¬

security analyst knows, there is for $928 million. Thus, the opennot a utility company in the in¬
end companies are not only the
dustry that does not beat the in¬
growth segment of the industry,
investments showed a correspond¬
dustry averages as far as growth but their pool of capital is over
ing increase.,
is concerned. I will, therefore, cite
four times as large as that of the
By the time of the First World
figures on Florida Power Cor¬ closed-end companies. Conse¬
War, the bond market had begun
poration which is truly a rapidly
quently they appear to be the ones
to assume its present day form. In
growing company. Florida Power's in which you should have the
our firm,
we were not only act¬
revenues
have increased 243%—
ing as money brokers and dealers more than twice the rate of the greater interest. However, there
is one point in favor of the closedin short-term investments, but as
averages—in the last eight years,
ends, and that is that they tend
dealers in long-term securities as
and its^jqumber of customers has
to be more permanent holders of
well. We had already become well

organized, the bond
much less important

national

operations.

participated

was

was

the

in

to have more leeway in their

gan

opment in the economic history of
our country.
Back in 1910 when

World
the

Bond

market

as

example, if
wants

Scale

bond

today is

our

ket,

of your

111%, and

.

known, in addition to our
other activities, as the mar¬

ketplace for finance
private financing.

value

lar

creased

come

The

companies only

or

stock

in

securities

our

stitutional investors.

differs

the

for

accounts

Their

curities.

polit¬

favor, and unprecedented growth
set in. For your industry the dol¬

over-the-counter

organization

distributing

largely

growth.

lowing

For the purpose of this discus¬ serve Act in 1913 and the organ¬
sion, a great deal of daily trading ization of the Federal Reserve
activity will be ruled out, such as .System three years later intro¬
the
usual
board
and
over-theduced to the American banking
counter stock transaction, margin scene a hitherto unknown degree
trading and commodity trading. of elasticity. The country's econWe shall be solely concerned with
omy, spurred by the war abroad,
large scale bond trading with in¬ began another burst of expansion.

commission houses,
Exchange
members,
or
by

shares

New

stock.

sole

the

respect. Fol¬

formed

either

is

open-end companies' phenomenal

own

of the Federal Re¬

its

value.

asset

company

for

which

turn¬

the company

current

the

wide

a

different function from that per¬

passage

then

around in this

the

;

money.

operations.

directly

The price you

constantly being sold through

are

com¬

a

we

.

its

market

vestors, but in
1929

open-end

stock

buy

and

become

To

an

back to

it

sell

you

upon

plague. You had your
Public Utility Holding Company
ever, that we are the only house
grade short-term securities.
We
ment, at the
that has constantly, and without were then known as The Discount Act in 1935, and we had our In¬
closest spread
vestment Company Act in
1940.
between b i d
any deviation from our original House of Salomon Bros. & Hutz¬
The latter was patterned after the
and offer.
In
concept of doing business, main¬ ler. We have always kept in close
Rudolf Smutny
tained
close
markets
in
high- touch with the money market, and former in many respects. During
rendering this
this period
we
both were sub¬
service to our customers, we have grade securities for institutional today
deal
in
Federal
Funds,
not
felt that profits will take care of investors. Over the years, under¬ j thereby, you might say, "keeping jected to stricter regulation
themselves.
writings, both corporate and mu¬ .our finger on the pulse" of the only by the Federal Government,
but by states as well. Following
This, per se, is an unusual func¬ nicipal, have come to play an in¬ daily
supply
and
demand for
tional

}

charge. When

Thus,

be¬

y
-

is the asset value plus a sales
you sell your stock,

pay

by in¬

better known in the banks,

came

s

were

favor

was

in

from the company.

at

a

■

funds,

mutual

you

company

in
.

great

operations

by servicing this need.

called

closed-end funds.
stockholder

with

of

firm

Our

histories

similar

1920

both

we

activity in placing
with
various banks.

deal

great

had

respects.

the

In

today.
However, there was a continu¬

ing

that the typical securities
firm goes in for narrow special¬
ization in any one type of Wall
Street activity. Commission houses
also trade occasionally, and trad¬

in

ties,,

main¬

suggest,

to

mean

monly

the Investment Company industry

constrictive curr
a result of all
these factors, the volume of bond
trading was lower by far than it

time

not

Reserve

system.

rency

course,

largest

markets

do

the

'
pre-

the then existing

in securities, a

everyday

,

The electric utility industry and

tremely short-term minded—they
had to be to meet the needs of

business.

create

maintain

and

normal

a

as

;

banks in

Commercial
Federal

offer, with all
the attendant rewards and risks,

should

:

<

Believes sharp rise in bonds
and preferred stocks has left them at a protracted peak.

a

make the

simply

is

possible intermediate reaction.

the

business

to

order

in

Trading

trade.

in

experience,
we

lack

you

business

that

to

,y y

-

almost unknown.

have is $450M, you may
go "short" of the $50M

you

have

is

followed

over

all

firm-

our

Hutzler

&

v

'■<

non-callable

were

comparable growth of

traces

public utility industries. Holding potential,
price appreciation is a principal objective in stock selection,
Mr. Page maintains chief factors are the price-earnings ratio
and the changes therein.
Listing favorable and unfavorable
elements in current outlook for utility stocks, concludes they
will work gradually higher over balance of year, with some

'

of refunding were in¬

waves

official

company

frequent. Direct placements were * the industry which I represent—

knowledge of market trends in successful trading.
The

bonds

Many

Investment

mutual fund and

supply of long-term bonds
comparable to that of the

portfolios tended to be as
as
mortgage
portfolios.

term

Says trading is an art calling for: (1) slide rule techniques
and (2) market intuition.
Emphasizes important role of

Salomon

all

v

present day.' Savings had not yet
become
institutionalized. Long-

work in unison.

room," in which salesmen and traders must

Vice-President of Tri-Continental Corporation

*

third. Taken all in all, the
total amount of bonds available
for trading was, by current stand¬
ards, extremely meager.' •'
On the other hand, neither was
the demand
for
that relatively,

the development and functions of a secu¬
Points out role of providing a contin¬
market for unlisted securities at the closest spread be¬
trading

By FREDERICK YV. PAGE*

poor

Mr. Smutny reviews
rities

Utility Common Stocks

utility bonds came next, and those
of industrial corporations ran a

Exchange

Members New York Stock

I

The Outlook for Electric

market,> public'

bond

long-term

SMUTNY*

Salomon Bros. &

Senior Partner,

I

proached the billion dollar mark >.
in any one year. Private debt was.
enormously greater than ? public
debt.
Railroad obligations con- •stituted the largest segment of the

Securities

a

■

,

Thursday, April 22, 1954

...

(1778)

amounted

years

ago

de¬
about

institutional

only

to

$100 million with investment com¬

panies and pension funds contrib¬
uting very little if anything to this
total. On the basis that 20% of the
institutional

might

demand

available for the purchase of

ity

common

mand

absorbed
mon

It

stocks, the 1952 de¬

institutions

of

over

50%

of

could

have

your

com¬

stock offerings for
seems

be

util¬

that year.

obvious from all of this

[Volume 179

that

Number 5318

investment

companies

and will continue to have

and

growing
price level of
You

must

have

strong
on
the

a

influence

stock.

your common

plan

The Commercial and Financial Chronicle

...

their

price-earnings ratios can be far
more important than the
earnings
showing in
influencing - market
performance over a given period
of

time.

performance

ings

knowingly occur
at a time of public offering.
By
and large they will make good
stockholders.
They are well in-formed, and they understand your
problems. They have common in¬
terests with you.
They simplify
your proxy solicitation, and they
can
be helpful to you; in many
ways if taken
into your confi¬

were

most

in

stocks

miserable

a

because

ratios

for

market

increased

dividends

,

The
reverse
was; true in
1951.
In that year
earnings were barely stable, and
yet the market for utility stocks

effect

was in a rising trend because the
price-earnings
ratio
rose
from
slightly uhdet 12 to over
:

curities, and if the

approximately <12.

these
as

the

on

dence.

Weight

a

full

earnings

for

return

erty,- the

the

If

used

are

issuance

of

return

on

be

can

company earns

its

on

a

se¬

added
-

the

very

prop¬

retained

attractive.

Because of the extreme

amount

of

institutional investor is interested

been

at

leads

in and what you could do to make

low,

and

securities

your

I

that investor.

attractive to

more

also asked to

was

that $64 auestion of what

answer

is the market outlook for electric

utility

stocks
at
my

times

in

when

ratios

selecting

individual

opinion this is

than

yield,

more

although

I

important
recognize

that many investors buy primarily

stocks. In turning
on
yield. However, I would rather
phase of my talk, I will
express merely my own observa¬ buy at a low ratio a utility stock
tions and opinions.
,•
having a relatively low yield than
common

be

limits

*

try to buy those selling
lower than average ratios. In
we

stock financing that

common

might

were

this

to

new

tance of

dilution.

to

required

and

thereby

result

The

is

a

higher price-earnings
ratio. Thus, with both the earn¬
ings in a stronger upward trend
and with the price-earnings ratio
probably expanding, the stock of
a
company with a good ploughback
of
earnings often has a
double

a

market

whip.

This obvi¬

ously would not apply to
that

pany

was

a

unable to

com¬

earn

a

that

one

like

course,

receive

to

dividends.

The

balance between payout
ploughback will vary by com¬
panies and will depend on many
proper
and

factors.

I

80 %v;and

consider

a

rate

of

On

hand,

Confidence is

influence

one

of the most

earnings ratios. In order to obtain
high ratio for your stock, there
must be a high degree of confi¬
dence in your earnings as well as
in
the management.
As far as
earnings go, you are fortunate in.
a

industry noted for the

an

at

that

5

times.

There

be

done

stability of
earnings. If

your

can

your

is
to

to

are

own

your

rate: of

to

discouraging to investors
stocks held back by

very

their

see

poor
earnings while others go
merrily
ahead.
Avoid
inflating
Since I have placed so much earnings to a point where they
emphasis on price-earnings ratios are vulnerable to a sudden drop. I
you may wonder how this con¬ have in mind such things as your
cerns you.
Ratios are established "interest
charged
to
construc¬
in the market by the consensus
tion" policy. There is one utility
of opinion of buyers and sellers,
whose credit for this item during
and'you may feel that it is not
within your power to do anything
Continued on page 46

Utility Investments
For

I

the

have

past twenty-one

been

responsible

years

for the

utility investments in Tri-Continental
Corporation and its three
affiliated
Broad

companies

open-end

New Issues

1

—

Street

Investing, National
and
Whitehall Fund,

Investors,

$33,416,000

Tri-Continental with net assets of

$176,000,000 is the country's larg¬
closed-end

est

investment

com¬

State of Connecticut

and accounts for 19% of the
assets of this segment of the in¬
dustry.
Our three mutual funds
pany

had

combined

600,000

Dec.

for

accounted

assets

net

of

as

31,

about

of

$73,-

1953,

2%

2% Bonds

and

of

open-end segment of the industry.
For the most part we are common:
stock buyers, but we do own some
bonds and preferreds. Our hold-'

ings of utility bonds amount
million

ity

do

our

common

May 1,1954. Due each May 1/, 1955-74, inclusive. Principal and semi-annual interest (May 1 and November 1) payable In
v,<Hartford, Conn.* or New York, N. Y. Coupon Bonds in denomination of $1,000, registerable as to
*

'

,1

,

holdings of util¬
have
;

util¬

That is by far

largest investment in
industry.

both principal and interest.

Exempt from Taxation by the State of Connecticut

to about 26% of our total common

our

or as to

Interest Exempt from Federal Income Taxes under Existing Statutes and Decisions

stocks, which amounts

stock investments.

' ?' principal only

'

;

-

to $8

preferred stocks.
We
million invested in

$47

ity

as

\

the
Dated

any one

Eligible, in

our

opinion, as Legal Investments for Savings Banks and Trust Funds in New York State,
Savings Banks in Massachusetts, Connecticut and certain other States

and for

Appreciation Sought
It may

I cite

be of interest to you if

some

of the factors that

we

MATURITIES AND YIELDS OR PRICE

investigate and what it is that ap-v
peals to us about a specific stock.
With

all

that

stocks

$26,000,000 Institutional Building Bonds, due 1955-74

buy, one
principal objectives that we
potential price apprecia¬
tion. Consequently we are looking
we

of the

for

7,416,000 Vocational School Bonds, due 1955-74

is

seek

factors
sell

stock

in

time

at

the

will

that

prices

higher
future.

make

Such

Price*
Due

Prices

to Yield

Prices

Yields

Due

to Yield

Due

.75%

1960

1.30%

1965

1.70%

1970

1961

1.40

1966

1.75

1971

1962

1.45

1967

1.80

1972

2.05

1973

2.10

1974

2.15

to

Yield

Due

<

1955

factors

1956

.90

basis, improved dividends,
or
some
development that may
cause
investors to appraise earn¬

1957

,1.00

1958

1.10

1963

1.50

1968

i.85

higher basis. The po¬
tential price appreciation is then
weighed against the risk that is

1959

1.20

1964

1.60

1969

1.90

be higher earnings

may

on

on

a

involved

before

make

we

\

three

The above Bonds

contribut¬

factors

:

our
are

offered, subject to prior sale before

ment, for delivery when,
the

100 (price)

(Accrued interest to be added)

commitment.
Of

Price

1.95%

per

a

share

ings

or

the

some

as

or

and if issued and received by

after
us

appearance

of this advertise¬

and subject to the approval of

legality by Messrs. Storey, Thorndike, Palmer & Dodge, Attorneys, Boston, Massachusetts.

price

aoprecia-*
cited, per¬
haps the most important and yet

ing

to

potential

tion which I have just

the

difficult

most

to

evaluate

is

the

appraisal that investors are
willing to place on the earnings
of
a
specific company.
This is
commonly referred to as the
price-earnings ratio. These ratios
will vary widely by industries as
well as by individual securities
within an industry. For example,
I

have

a

two

stocks

estimated

is

first

in
to

mind.
earn

The

The National

City Bank of New York

Phelps, Fenn & Co.

a

Halsey, Stuart & Co. Inc.

Goldman, Sachs & Co.

,

i

Stone & Webster Securities Corporation

t

First of

$11.75

Harris Trust and Savings Bank

Incorporated

.

Bank^i>^>Hallgarten & Co.

B. J. Van Ingen & Co. Inc.

F. S. Smithers & Co.

Michigan Corporation

Hornblower & Weeks

Adams, McEntee & Co., Inc.

is

estimated
these

to

first stock
Selling at a price five
times the price of the second, but
on

should

earnings the

Roosevelt & Cross

they
are
selling at approximately. the
same price.
The moral of this is
the

ratio

is

much

more

Dick & Merle-Smith

Incorporated

Ira Haupt & Co.

Bache & Co.

Wertheim & Co.

>

American Securities

Furthermore,

changes




in

Corporation

.

Robert

Winthrop & Co.

Branch Banking & Trust Co.

April 19, 1954.

Baxter, Williams & Co.

C. F. Childs and Company
Incorporated

»

National Bank of Commerce
of Seattle

im¬

portant than the earnings in es¬
tablishing the market value for a
stock.

Reynolds & Co.

be

the fact of the matter is that

that

Weeden & Co.
Incorporated

share this year,

and the second
earn $2.10.
Based

Kuhn, Loeb & Co.

Blair, Rollins & Co.

•

Seattle-First National

things

improve the

particular
return
inadequate levels, try
best to obtain rate relief. It

declines

substantially less than 60% ap¬
pears too low, for the resulting
yield is, usually inadequate.

payout

that

factors

important factors affecting price-

of

a

the

into

these ratios.

sell

return

or

other

the

improve the ratio at which
stock sells. This is not so as
dpay be more apparent if we go

stability of its earnings. This is
why utility stocks sell at 15 times
earnings whereas railroads stocks

and expected
companies that had
common equity ratios
and were willing to do their fi¬
nancing through senior securities.

relief,
very high

to

your

haying

of

payout

too high in- most
cases.
Exceptions would be com¬
panies that were earning a very
over

rate

the

to

or

this retention of
earnings can be carried to ex¬
tremes.
Although we are more
interested in the earnings ratios,
we
do not ignore yields for we
have stockholders who apparently

low

reduces

better trend in per share earnings,
and a growth in earnings usually

suggested that,I outline what the-

Of

Moreover, the amount of retained

impor¬
price-earnings ratios, we
place primary weight on these
ratios. The preponderance of our
purchases of utility stocks has'

Up to this point I have spoken
general terms about our indus¬
try and its significance to you.
When I was asked to speak it was
m

return

the

ploughback merely to
build up
the proportion of its
common equity.

earnings

Earnings Ratios

.

price.

proportionate amount of prior

Price-

on

market

retained
basis

a

earnings
Primary

the

over

longer term, but the ploughback
of earnings could have a twofold

price-earn¬
from 18 to

declined

used

former's

a

gave

reasonable

a

1937 utility earnings
rising trend throughout
of the year, and yet utility

but this will not

your

which had a high ratio and
relatively
high
yield.
The
ploughback 'of earnings
would
be
proportionately large
relative to both earnings and mar¬
ket price.
Thus, not only would
this stock have better prospects
one

In

being
largest stockholders.
There may be times when they
temporarily disrupt the market
by substantial sales of your stock,
among

on

(1779) ~ 7

Heller, Bruce & Co.

Eldridge E. Quinlan Co. Inc.

;

1954

Broad Street,

Hugo Stinnes—Circular—Oppenheimer & Co., 25

">■<£
;

Financial Chronicle... Thursday, April 22,

The Commercial and

(1780)

t

N'ew York

Dealer-Broker Investment

Iowa Public Service Co.

Recommendations & Literature
send interested parties

to

Merck

—

It'.-

y

.

Man's
of "Glean¬

Company, Inc.—Analysis in current issue

&

n.

and

Inc.

list

a

for new in¬

stocks

of suggested

vestors.

1948

quarter of 1954—Laird, Bissell & Meeds, 120 Broadway,
York 5,

>

parison

up-to-date com¬

National
York

Quotation

4,

N.

over

Inc.,

Bureau,

Lerner &

Rock

(bulletin

159)—Smith

No.

Time

countries

Oil

report—Standard

&

the

of

time

world

differences, in

N'. Y. Also available is

analysis of Sylvanfa

an

in

United States

the

map

a

and

California

copies

single

(paper);

to

1

Eastern

Recessions—

About

Committee for Economic Devel¬

opment,

Co., 50 Broad¬

Madison

444

York

22,

N.

Avenue,
(paper);

Y.

single copies available without

charge.

New York 4, N. Y.

way,

Do

\

of standard

listing of States

a

observing Daylight Saving Time—Foreign

COMING

Department, Manufacturers Trust Company, 55 Broad Street,

EVEN+S

and communities

New York

15, N'. Y.

In

Yields

issue

of

Bulletin"—Nikko Securities Co., Ltd., 4,

1-

Japanese

on

"Weekly

Stock

Stocks

Tabulation

—

in

current

*

*

♦

—

Study

—

Association of Customers Brok¬

New York Hanseatic

Blaw

an

Knox

&

Security

Co., 35

Wall St.,

Serlen
—

Memorandum

Hill Richards &

—

t

"al Maine Power Co.

y.

'

—

Analysis

Burian

Ira Haupt & Co., Ill

—

Information

—

McCoy & Willard,

Federal Street, Boston 10, Mass.

Rendering

Gannon, Inc.,

1 Devonshire Street, Boston 10, Mass.

1

Cr "er-Ilammer,

Inc.—Analysis—H.

Street, New York 4, N. Y.

Hentz

Co.,

60

&

on

New

York, Chicago & St. Louis, Bangor

Thomas

A.

Getchell

Mine,

Inc.—Special

Ghegan—

Swenson,

(Capt.), Pollack, Cohen, Smith, Strauss, Define

report—Loewi

Co.,

225

East

Arnold

Point

Club

Wechsler

J.

Mike

Mason Street, Milwaukee 2, Wis.

Point

5

243

18

Growney

16%

200

Annual

Summer
on

at

Subject

yield 7%

to certain exceptions,

Member

Sinking Fund requires $2.50

deposit quarterly

per

Bond Club of

OF PHILADELPHIA

Philadelphia, will hold

Whitemarsh

the

Country

Club,

N.A.S.D.

.

Broker and Dealer

Share.
Material and Consultation

Ligonier, Pa.
May 16-20, 1954 (Chicago, HL)
National

Federation

Analysts

Societies

of

finan¬

Conven¬

tion at the Palmer House.

•

to The

Financial Chronicle)

MIAMI, Fla. — Harry W. Link,
has rejoined A. M. Kidder &

Jr.

139 East Flagler Street. Mr.
Link has recently been local man¬
Co.,

ager

Pittsburgh outing
Country Club,

Rock

May 21-23, 1954 (Fresno, Calif.)

With A. M. Kidder Co.
(Special

Rolling

cial

Friday, June 11, 1954.

|\jomufa Jkau'lties
€o.t %h\.,
i

19th annual summer out¬

May 14, 1954 (Pittsburgh, Pa.)

Charles Kaiser

Harry W. Link, Jr.

to

(Baltimore, Md.)
Security Traders As¬

land.

Roy Klein

,

ASSOCIATION

Outing

Firm*

ing at the Country Club of Mary¬

at

INVESTMENT TRADERS

Exchange

Hoy Meyer

211

Kaiser

Stock

May 14, 1954

sociation

I

212

of

Baltimore

'

Whitemarsh, Pa.,

Textron B Pfd.

meeting.

George Leone

/

Board of Governors of Associa¬
tion

Club

222

Joe Donadio

its

(Dallas, Tex.)

Investment Bank¬
Association 19th Annual Meet-

24%

(Capt.), Brown, Alexander, Farrell, Barker

The Investment Traders Association of

&

the

at

May 12-14, 1954 (Boston, Mass.)

26

(Capt.), Corby, Siegel, Voccolli, Lienhardt

200

Edison, Incorporated, West Orange, N. J.

dinner

tag.

28

Werkmeister,

C.

Edison, Incorporated—Annual report—Thomas A.

annual

Texas Group
ers

Hunt,

Hoy Me.yer

Aroostook, and Central of Georgia.

York

May 9-11, 1954

33%

33

Hunter

leaf¬

Waldorf-Astoria.

(Capt.), Fredericks, Murphy, Weseman, Mewing

Beaver

a

(New York City)

New

33%

Krisam

Also available is analyses of the

out-mg.

37

36

Meyer (Capt.), M. Meyer, Frankel, Wechsler, King
&

Chemical Industry and Providence Gas Company and

let of comment

(Capt.),

Growney

Co.—Analysis—May &

Dealer*

Municipal

Security Traders Association of

(Capt.), Bass, Valentine, Eiger, Bradley

Klein
Bean

Chemicals Limited

—

(Capt.), Jacobs, Topol, Weissman, H. Frankel

Kaiser
—

Louis

36%

(Capt.), Craig, Gronick, Bies, Demaye

(Capt.), Gavin, Clemence, Montanye, Whiting

Manson

adway, New York 6, N. Y.

37%

(Capt.), Rogers, Gold, Krumholz, Gersten

^

Co., 621 East Spring Street, Los Angeles 14, Calif.

St.

Points:

(Capt.), Nieman, Gannon, Tisch, Greenberg

1, New York.

(St. Louis, M#.*

Apr. 29-30, 1954

May 7, 1954

Leone

Brooklyn Union Gas Company, 176 Remsen Street, Brooklyn

Consclidated

(STANY)

Inc.

Group annual

Donadio

u.j

York,

New

of

of April 15, 1954 is as follows:

as

Team:

Brooklyn Union Gas Company—Annual report—Secretary, The

Cc'.

Association

Traders

Bowling League standing

5, N. Y.

Burton Manufacturing Co.

the

at

Also avail¬

analysis of Central Indiana Gas.
Co.—Memorandum—Walston

New York

dinner

anniversary

Hotel Roosevelt.

SECURITY TRADERS ASSOCIATION OF NEW YORK

Corporation, 120 Broadway, New York 5, N. Y.
able is

Field

Apr. 29, 1954 (New York City)

•

ers

American Marietta Company

Investment

Notes

NSTA

chome, Marunouchi, Chiyoda-ku, Tokyo, Japan.

(

In¬

Pasadena,

request.

on

What

Refining, National Gypsum,

Tri Continental Warrants—Bulletin—Dreyfus &

100

over

with

compared

as

Al¬

complimentary; quantity prices

New

Chart—Chart

Inc.,

Gray—Industrial Re¬

Section,

stitute of Technology,

Com-

Service Electric & Gas, and Clinton Foods, Inc.

Public

throughout

variations

Robert D.
lations

Oil—Analysis—Thomson & McKinnon, 11 Wall Street,

Electric Products, Ashland Oil &

N. Y.

Daylight Saving- Time; also included is
time

Company—Annual

New York 5,

Shares—Reappraisal—Sutro Bros. & Co., 120 Broadway,

New York 5,

Co.,

bany 1, N. Y. (paper).

-

Barney & Co., 14 Wall Street, New York 5, N. Y,

Summer

Limited—Analysis—L. S. Jackson

Mines

910 South Michigan Avenue, Chicago 80, 111.

pay,

Sun Ray

Railroads—Analysis

&

Bender

Calif,

Economy

.

Steel

Iron

foreign trade.

Southeastern

Federal Taxation—Mat¬

on

4, N. Y.

Oil

Standard

Spinning Industry

discussions of Investment Trusts in Japanese
current

tute

Street,

Broad

30

Joseph—reprinted,

from the Twelfth Annual Insti¬

Company, 132 St. James St., West, Montreal, Que., Canada.
4

and

Stern,

Com¬

A

Provisions—

Basic

Franz Martin

T-31—

Ltd., 61 Broadway,

the Electric Wire and Cable Industry and
and

&

Treaties:

of

Scope of Collective Bargaining—
Steep

.

Also in the same issue are analyses of

6, N. Y.

-

Co., 10 Post Office Square, Boston 9, Mass.

New York

(paper),

Y.

N.

23,

Tax

Income

thew

Co., 44 Wall Street, New York 5, N. Y.

Na¬

Broadway,

1819

Inc.,

York

New

parison

North Main St., Akron 8, Ohio.

Dutch—Analysis—Herzfeld

Royal

Hunting—Discussion—Peter P. Mc-

Investors Beacon—Nomura Securities Co.,

I. Wells, Secretary, Ohio/*

Riverside Cement Company—Analysis—Ask for report

Pulp Industry in Japan—Analysis in current issue of Nomura's

York

search,

—

of Economic Re¬

Bureau

$1.50.

Co.—Annual report—L.

Edison Co., 47

—

1

Profit Taking vs. Bargain

New

Company—Analysis—

Insurance

New

Street,

Front

46

Y.

Dermott &

period

13-year

a

Edison

Ohio

Quotation Bureau Averages, both as to

performance

market

and

Accident

&

North, Nashville 3, Tenn.

the 35 over-the-counter industrial stocks

in the National

used

Life

National

^between the listed industrial stocks used in the Dow-

Jones Averages and

yield

New

Clark, Landstreet & Kirkpatrick, Inc., 315 Fourth Avenue,

Over-the-Counter Index—Folder showing an

Creamer

Daniel

—

tional

N. Y.

in

Trends

Output

Manufacturing Industries, 1880-

Womeldorff & Lindsey,

—

Exchange Building, Little Rock, Ark.

Stocks—Comparison and analysis for first

New York City Bank

Company— Analysis

Gas

Midsouth

New York 7, N. Y.

and

Capital

Japan—Circular—Yamaichi Secu¬

rities Co., Ltd., Ill Broadway,

Bookshelfr

National

Also in the same issue is an analysis of

5, N. Y.

the following literature:

Theatres,

Investment Opportunities in

Business

Josephthal & Co.,

ings"—Francis I. du Pont & Co., 1 Wall Street, New York

pleased

firms mentioned will he

understood that the

is

Memorandum

—

•

_

Broadway, New York 5, N. Y.

120

It

■■F,-;.;; 7-

4, N. Y.

for Francis I. du Pont & Co.

Security Traders Association of
Los Angeles-San Francisco Secu¬

rity
Traders
Association joint
Spring Outing at the HaciendaFresno.

-

May 21, 1954 (New York, N. Y.)

[Toppers annual outing at the
Montclair Golf Club.

on

Troster, Singer & Co.
HA 2-

2400

Members:

74

N.

Y.

Security Dealers Association

Trinity Place, New York 6, N. Y.




•-

NY 1376

61

without

Broadway, New York 8, N. Y.
BOwling Green 9-0187
Head Office Tokyo

(Chicago, 111.)

Bond Club of
(Special

obligation

Tel.:

June 4, 1954

A. M. Kidder Adds

Japanese Stocks and Bonds

to

The Financial Chronicle)

SARASOTA, Fla.
Newcomer is
A.

M.

now

Kidder

Palm Avenue.

&

—

Asher M.

affiliated with

Co.,

16

South
,

nual

field

Chicago 41st an¬

day at the Knoll wood

Club, Lake Forest, 111.
t

v

June 4, 1954 (New York City)
Bond Club of New York

-

30th

Volume 179

Number 5318... The Commercial and Financial Chronicle

(1781)
■

■

annual

field

at the Sleepy
Club, Scarbor¬

day

Hollow

Country
ough, N. Y.

Club

Detroit

of

War

From

Washington

Ahead

party at the Grosse He Golf and

II

General

much

as

Investment Dealers' Association
Annual

Convention at

Jasper Park Lodge.
June 11,1954 (Los Angeles, Calif.)

tion,

Bond
nual

Club of

Los

field

day
Country Club.

at

Angeles an¬
the Wilshire

Municipal

(New York City)

Bond

Club

of

of the Executive

Jane

11, 1954

(Philadelphia, Pa.)

Investment Traders Association

really

a

in

set

Democratic

putting

But be that

as

into

little

a

that

doubt

the

marsh, Pa.

that the President is not

16-17,
Minn.)

Twin

1954

ing

(Minneapolis,

have,

City

Bond Club annual
picnic cocktail party, Hotel Nicol¬
let June 16; field day and golf
tournament, White Bear Yacht
Club, June 17.
Jane 18, 1954
Bond

Club

(New Jersey)

the

June 24-25,

(Cincinnati, O.)

1954

Cincinnati Municipal Bond Deal-,

Spring party.

who

But

Municipal
of

(New York City)

Bondwomen's

were

the

could have

he

it

a

saw

to

a

President and

alike.

country club in which there

only

was

Philadelphia 29th
annual field day at the Hunting¬
ton Valley Country Club, Abington, Pa.
Sept 22-26, 1954 (Atlantic City)

a

lot of real estate

$100

or

to cost

I

am

$1,000

moved

$200,000 less.

loathe

to

some reason or

the

known.

think

in

and

I

was never

it

was

Eisenhower

loans

got

I

on

awful

cry

against the Democrats,

or

came

was an

out

that

over

the Housing Administration

rest of the

he

pinks, that it

was

of public housing.

enemy

waits

for

a

for

year,

just

a

year

as

This advertisement is

not an

offer

to

sell

a

come

clear

into

with

power

those

cleaning

T,

Clark,

President

Rejoins Bacon, Whipple
(Sopcial

of

Clark Oil & Refining Corp.

things

merly known

as

(for¬
Petco Corp.) has

announced the election of Milo F.

Snyder, Vice-President of Loewi
& Co., Milwaukee and Ray Carter,

won

to

The

CHICAGO,
Schubert

has

Financial

111,

—

solicitation of

an

of

Stock

Exchange

and

Midwest

Mr.

Schubert

with offices in New York City, to

with the Milwaukee Company and
Smith, Barney & Co.

the Board of Directors.

Stock
has

Exchanges.
recently been

offer

to

buy these securities. The offering is made only by the Prospectus.

NOT A NEW ISSUE

Firms

1954

(Hollywood,

1,500,000 Shares

Fla.)
Investment Bankers Association
Annual Convention at the Holly¬
wood Beach Hotel.

With

The Gas Service Company

Crowell, Weedon

(Special to

The

Financial

Chronicle)

Common Stock

LOS

ANGELES, Calif. — Jen¬
nings O. Stendal, Jr. has become
affiliated
&

Co.,

with

650

Crowell,

South

($10 Par Value)

Weedon

Spring

Street,
Angeles Stock
Mr, Stendal was pre¬

members of the Los

Exchange.
viously with Frank Knowlton &
Co. and Hannaford & Talbot and

prior

thereto

with

was

Conrad,

OFFERING PRICE $23,625 PER SHARE

Bruce & Co. in Portland, Oregon.

Now With Sutro Co.

:

(Special to The Financial Chronicle)

SAN

FRANCISCO,

Horace J.
sociated

Brown

with

Montgomery

has

Sutro

Street,

Calif.
become

—

Copies of the Prospectus

as¬

others

&

Co., 407
members of

as

are

may

be obtained from such of the undersigned and

qualified to act

as

dealers in securities in this State.

the New York and San Francisco
Stock Exchanges. Mr. Brown was
formerly with Guardian Securities

Corp.

Francis

and

Co.

I.

du

Pont

&

|

With Waddell & Reed

Kuhn, Loeb & Co.

Union Securities Corporation

Dean Witter & Co.

A. C. Allyn and

KANSAS
V.

Kimber

CITY, Mo.—Bowman
has

with Waddell
Baltimore

become

&

Johnston, Lemon & Co.

affiliated

Avenue.

Mr.

Kimber

previously with Looper & Co.

and

Prescott, Wright, Snider Co.




Company

Allen & Company

A. M. Kidder & Co.

Stifel, Nicolaus & Company
Incorporated

Reed, Inc., 1012

was

Reynolds & Co.

Incorporated

(Special to The Financial Chronicle)

April 19, 1954

D.

Bacon,
Whipple & Co., 135 South La Salle
Street, members of the New York

meeting.
Nov. 28-Dee. 3,

Chronicle)

Donald

rejoined

Petroleum Broker and Consultant

(Minneapolis

Board of Governors of Associa¬

clear

up.

Minn.)
tion

a

majority in the House they

have, and undoubtedly would have, told the Democrats, the
ADA, the CIO and the rest of the pinks to go to hell and gone on

Elected Directors

the politicians and

or a

was

Housing Administrator.

Hotel Claridge.

1954

and four

to him when he

National Security Traders Asso¬

23-25,

they

as

.

Congress, certainly that must have been clear from

about their business of

against the New Deal corruption?
as

turns

Emory
in

taking

ciation Annual Convention at the

JSept.

no

solemn administrative duty

For

although the General

Analyzing the outcome of the 1952 elections

on

of

throughout the land from the Democrats, the

the

clear-cut vote for the Republicans

no

law

be

could

project

on a

What, however, is the Eisenhower Administration

confronted with in view of the fact that

a

Had he said anything about the scandal which

majority in the Senate and

the

from

their part.

on

man

Now, if the Republicans had

able to dope out why

honesty

Administration

a

to

were

the first day he entered upon his office there would
have

member of

they apparently just didn't have the knack.

handsomely there had been
or

a

w&aps.

the first day he took office

look back and it didn't take much knack.

When
were

another

consider

an

It

They

men.

fellow club members, being in real estate, didn't get in

racket.

(Philadelphia, Pa.)

Bond Club of

are

being given

months, to spring what must have been clear

I belong

years.

Housing Administration for $1,000,000 and $3,000,000,

Yet you

>

secret for

open

was

the matter

effect that

was

on

feared, Mr. Cole

an

public housing it

predilections in

ADA, the CIO and all the

just where does the Government housing scandal relate to

of

his

him; he

swore

saw

been

Con¬

a

have long talked of this scandal, of how
sharpers with an invest¬
ment

and

under such

Carlisle Bargeroa

to

that

thinking
we

So

Ad¬

thing

a

my

Club

York annual outing at
Spring Club, West Orange,

Sept. 17, 1954

healthy

books

critic of

a

the Bible that was put up to him that he would
administer the housing law in the
spirit in which it was enacted.

mindful only of the country as a whole and who,

New

Rock

N. J.

non-partisan

very

Mr. Cole emitted mouthfuls of
utterances to the

and he

partisan, the hous¬

a

Well, the scandal has been

which
June 25, 1954

a

just wonderful if

therefore, all

New

of

not

notwithstanding

would be
gress

that

prove

is

chose

in such

moment to

the too evenly balanced political situation in Washington?

Jersey an¬
nual field day at the Rock Spring
Club, West Orange, N. J.

ers

scandals

ministration

a

timidly

Well, he had always been,

an uncertain position that
they began insisting
really better public housing proponents than the Demo¬

although he had been

Republican, maybe in spite of itself.
However, the situation is what. it is and
while it may suit some of our vocal citizens

June

were

crats.

would be

Republicans

that the Republicans were out ot kill public
Instead of the Republicans saying
they certainly were,

were

Administration

of Philadelphia summer outing at
Whitemarch Country Club, White-

the

up an awful cry

they

Republican program
or of cleaning out the New Deal
bureaucracy.
In the first place if there were a clear control
of Republicans in the Senate and in the House
there is

the Eisenhower Administra¬

or

a critic of Government
housing and rightly so.
Democrats, the ADA, the CIO,.all the pinks in the country,

they

it may it is wholly ineffective

effect

Republicans,

the Administration's motives.

to

as

be

housing.

Republican Administration.

in

just

was

Congress, quite

The

dubi¬

say,

that he

was

Republican.

a

head of housing, the
former Congressman Cole of Kansas.

in control of the Government;

are

Branch; that is to

to whether it is

a

New

Club, Rye, N. Y.

the Democrats

as

particularly dissatisfied with

General's

Why, when they fired the New Deal telephone operator
House, it was a national story with all sorts of in-

To

there is dubiousness about the Republican Ad¬
that is supposed to be in charge

or

York 21st annual outing at West¬
chester Country Club and Beach

nor

not

were

confronted with the proposition of not
making too many

were

nuendos

ministration

ousness as

June 11, 1954

'

at the White

It is doubtful that a more pungent argument exists against the
present lack of balance of power in Washington than the current
Government housing scandals. The situation is that neither the

Republicans

Democrat

a

changes.

of Canada

they

An appeal of the

In this light the

,

of the News

By CARLISLE BARGERON

9-12, 1954 (Canada)

but

the Democrats.

summer

Country Club.
June

*

•

»

political analysts did, the people liked the glamor about the World

Jane 8,1954 (Detroit, Mich.)
Bond

•

9

10

The Commercial and Financial Chronicle

(1782)

level

U. S. Economy

in Excellent Shape
>

States

mind

one

and "we

drift into

to

never

employing the

are

ment to create

and persuasion of

power

of

govern-,

Vof

This

gathering and similar exbetween representatives

of Canada

United

the

and

States

indicative of the mutual

are

will

good

us.

We

our

have

res

t i

p e c

and

have

voluine

a

no

until

settled

all

problems

not

20th century.

ever

/

will break the
of

o u r

friendship. | *;
Such

'

amity

amongst

we

tons

early

at

will such

Europe" We''tavern"onc^in- Seas
we
nave

on<cei

seen

ot

areas

degenerated

lost

armpri

their

SS'v.

?

.

grudges,

reserXes °3
are attracting

J5aiWin

A,n

this

side

Cp

job.

J

0U£

s^_

the

nuns

the

mine

does

North

There

is

haunts

and

two

our

on

Continent,

people here that has

to fear any of its neighbors
from the Circle to the Gulf.

cause

It is customary when represen-

V

r

H

Qnrl

Canada

fV.0

ana

TTn;t^

the

Qtotoc

United

btat^.s
independent na-

are two sep;arate

tions, eacn minding its own busiBiut

wnen

tn<e

real

cnips

are down our peoples instinctively
respond to an unwrititen pact ot

partnership, we were together as
the Kaiser s forces attempted in
ln

w-° c*r

i,*ewem0CJ?C,!e?u,,n

w

tatives of Canada and the United

t e first, world
with our allies

States

'

interests

have

ates,

and

made

earlier

in

confess to

eco-

cul-

mutual

close

us

days

quite

continent and

associ-

have

we

to

few squabbles,

a

But these differences

were

kept in

perspective.

We never ai-

lowed them to spoil

genuine inter-

proper

national

fellowship.

Senator

volume

home state the

my

of

Lodge,

Jr.,

United

States

Uons.

It

Henry

Cabot

Ambassador
the

to

entitled

is

Years

of

of

the

United

Na-

"One

Peace"

Hun-

published

the anniversary of the Treaty
Ghent and describes relations

on

of

between

cate

fense

the

solving the deli-

without

Northern lights.

I trust that

if the TTniterl ^Htp*

a

our

countries

during this

In

Canadian

the

much in
vate

by

Club

Secy. Weeks before
of Toronto,
Toronto,

Ont., March 22, 1954.

economic

area

common. We

competitive

have

we

rely

on

enteroriso.

in agricultural surpluses. We both
are interested in trade, especially

amongst

ourselves, for we
each other's best customer.

of;

President

minstration

generally, the Budget

provided

*/•

reduction of the def¬

icit

to

a

ther

$400,000,000.

cotton,: help.

There

Herbert Hoover

licensed

sons

fact,

more

law

the

under

"he

pressure

We want Canada to be

in

are,

were

on

our

Congress for

to

some

a balanced
ing year
But the

because

ous

have

we

prosperfriendly
Also

a

same motives, I believe, impel
f

u'j

u

Therefore what

"

across

border?

our

The

can

whole

;'

.

question

:

-

It

v

an

foreign
economic policy right now is being
earnestly
explored
by
the

tageous trade.

unemployment,

helps

must

you

engage

be-

a

dear

seemed

we

budget the followspend-

more

that

be

billion,

$2.9

The Administration
Eisenhower

wholeheart-

ediy in tbe promotion of profitable
and equitable world trade.
...

,

,,

„

,

possibly
into

natlons cannot expand their

to

senator

ings

There

sure

groups

States is not

vou

will agree

2

-plus

governmental

the

A

commission

of

yOU

favor.

wjth

And

if

me

I

will

you

B.

Randall, recently
report on foreign economiq policy.
That report has been under studv
bv
by

But I

It

and the American
offered

did" piesent

clearly

no

peoplp.

short cut.

But

e^R

the

each

'

their

organ-

an

free

hand-out

are

essential

a

£act^
my inquiring mind
ad(dng machine, I detect

organizations

and

I said the First Amendment.
..

.

.

_

Burns Bros. & Denton, inc.
37 Wall Street, New York 5
•

Montreal

•

TWX: NY 1-1467

Ottawa

•

Winnipeg

a

.

As

j

1

•

praised

message

1

in

is

am

sure

that legislative

Continued

on

page

/

z

^aily cheerful note The han^-out
Phdos°Phy at °ne fime
.Jax"

and-tax, spend-and-spend.

Now

end

.

iaxe^ CU J?XGS,j

'^pend-and-spend"

That is

•

end

still

is

philosophic im-

a

fundamental change of
+hf,rfx ie:

pnrl

nn

ideas

or

'

nf
.

Where the Editors Gome In
This

the

is

in.

come

You

whole

the

place
are

gospel

where

you
with

familiar

balancing

of

the

budget. I don't need to tell
you
elements of deficit economics, or the theology of deficit
salvation, or the future damnation
from this economic sin.
I

But

wonder

if

it

would

not

u^e .90un^rf ^ y°u again

wouId sPe11 out for y°ur reade"
what
eral

really happens from

a

Fed¬

Government deficit. It needs

tcT'be'"don'e"in"
that

^erms

such

eiemeritary
school
also many

any ^grammar
can

get

it

■

+ViroA

A^dI at
time
snHlft
™ir^Ltfl
tht
reLuurn wUl no^ L f^ont page
to

know

ove^

huntinp

hke qparrels over hunting

Communists.

ap-

by the Congress and the

public, I

v

.

par-

a

plders

•

turn

this treadmill until

however give you
7,
?
u

youngster

,,

result of the report

•

this

brigade would

'
'

A .National Problem

adequately

to

you

death

Be all this as it may, on this
and subsequent study, the Presioccasion I wish to discuss a grave
dent has designed a message to the. problem which needs your urgent
Congress on Foreign Economic consideration and service. That -is,
Policy.
the deficit in the Federal Budget. ,5,ews
a

band-out

ex-

authorized by the First
to* the Constitutipn.

cifically

_

tjie

cbain

Moreover

men

'Amendment

propositions and recommendations
As

leave the

civil

each of their hand-outs are spe-

it

picture so
plan's
various

could be evaluated and

are

of

of

all

and

cause

They

has

of goose feathers.

government agencies

ore'ssion

the "trade

that

a

force

mass

expenditures

that

izations and
™Vvith

to

do not want to

impression

thP Administration
tho Conthe Administration, the Con-

gress

as

about the power

in-

way

worse.

bear

casually: mention

generalization
for
reducing

Clarence
released its

even

ones-

course

;

may

have their sweet

my

alive.

Zionist and that it desires an ex- that if there are enough of these
tension of international trade.
V exceptions, the dynamics of this
TT

Congress

people have expressed the
thought that it may reach

^ax

opght H rel+^' That is, except tof
for
the particular
cause

economic isola-

an

jn

and

abstract.

certainly eacn 01 you wuiagiet

Other Administration words and
Aommisirauon words ana
deeds bear out that the
United

what

the situation will be

only two

are

Their proceed-

Byrd.

the

Certainlv each of

pro-

winer

a

do by way of appropriations. But
here again if the demands of pres-

reduce government

righteous. They are pop-

are

ujar

°£ mterna"

«(]«'

uonai "aQe.

to

This does not take

more.

that

economic strength «

*

rise

$9 billion.

^ these organizations in addition

9 ared- ff1 the United States, there
ls f. growing recognition that free

es-

instead of

will

it

account

horrid

expenditures.

,

J recaU f^at when your
[arl^am^t graciously welcomed
Jv®
4'". ft.
^

Budget

billion; and if the
Amendment passes, the
deficit may rise to $7.5 billion or

Some

' who want to

;

this

George

reduced. They should have symPa^hy tempered with perplexity.
There 1S a fourth pressure group

of President

believes

for

minimum ot $5

from the Federal
They should be subject to violent suspicion. The third
group want their particular taxes

Administration

the

For next year,

something

Trade Policy

deficit

than

larger

timate.

Treasury.
Eisenhower

the

ending 76 days hence will

year

,




It

disciples of

from those who believe they need

un-

Canadian Exchanges at regular commission rates

also

cause

experts,

all-time record

to

lot of
bright young men to sort out two
or-three thousand daily hand-outs,
United States Government and
byThere are four varieties of these
the business and labor
community, hand-outs.. The first are designed
But j win gtate several funda_ to bring good to somebody. Those
mental points which I believe require a double check. ?The secpresage increased mutally advan- ond
variety of'hand-outs come
of

United States trade with Canada der the Chairmanship of
1953 reached

hand-outs

their

add

to

^hofe y°u receive from.the Fed-

1

be done, eral Departments to till your
aPart from producing desired ma- columns — that is, in so far as
terials and goods, to increase trade, paid-for advertising will permit.

debated.

Toronto

cheerful when

to the sunshine

way

than 1,200 organizations or-per- 0f

textiles

Total eluding members of Congress,

STOCKS

Wires to:

<-

$3,300,000,000 for the fis¬
ending this June 30. We

year

;

vour

raw

Randall Commission Report

BONDS

Tel.: DIgby 4-3870

Eisenhower,

Secretary Humphrey and the Ad-

proposals for next
a decrease of a fur¬

importance of this trade is

T?^?rSno+"? ^ statistics.
in

on

when, due to the valiant ef¬

forts

more

are

GOVERNMENT, PROVINCIAL, MUNICIPAL T
CORPORATION—EXTERNAL and INTERNAL

Executed

priWe

Canadian Securtiies

Orders

ful

.

$9.4 bil¬

was

We began to be more cheer-

budget
showed

can

produce food and industrial products.
We have a mutual headache

The

address

-fri^nH

we

look to the Maple Leaf forever.

period.
*An

are

problems of continental de-

encroaching upon
one
another's sovereignty.
You
know that should peril threaten
Canada, you can count on the
Stars and Stripes waving under

Henry Cabot Lodge,

grandfather

dred

a

lion.

their

„

.

sf famous historian^! in'SS'^LZt

by

Massachusetts
late

.

your

The Other dav T reread

written

War.
together
hurled back

we

Together Canada and the United
+
,
..
States stand guardian of-our own
o,

However, while geography,
ture

ending June

year

30, 1953, the deficit

bfse stocks and he^lnt^}0^ cause for
^f™m us,an extensive list of which they
agricultural items, including tresh want

Communist hordes in Korea. Tois fitting
gether with our allies we defend
Lang Syne of the free world,

...

nomic

deficit for 23 years.

a

fiscal

became

along our

brotherhood.
^

the

even

the Axis and later defeated the

gather for each to refer to

to repeat this Auld

For

cal year

neonles

Partnership

nesis.

happen here

the long years of peace
unfortified frontier.
It

practice of

We ar? primarily dependent on people with7°u
,r P'C
' as^estosv papersome, kind of w

Independent Nations, But in

which

and

American

no

eye.

have

water.

not

anxious

The

friends

your

the

across

This

the

of

I, therefore, view this town with

°F to be magnlhed into crisis.

tension

happiness

dreams

_

we want you to thrive, and thereby
continue to be our good customer,

apprehension of its smaller neighthe

of

_

With the exception of two
years,
we have
diligently maintained the

Vw^°^
town is full ot

-

job

a

and policies of

*?0 friendly to permit m memory
misunder-

Thp'rnifht
The might nf thp giant an i the
of the piant and the

create

assigned

standings to be carried

•

bors

been

economy and increasing revenues.
an

run
editorial

risk, capital;.. >your

m

have

hnmM

t

o

tiwlir

at

next. ;You
to accept

me

a bout-

more

interest in your well-being.
on

do

at^al^hbjy -to

m»an^a^; drers
branch plants..

I

e

ronflirt

niLin! elHorL armed conflict, our two peoples

nations

to

per and alhed Prodacts and ma-;- town,
say
something

chinery. Your discoveries of iron,
^°PPer» mckel and-zinc and your

could

prolonged
churned-up hatred and

_

j, like all the

M.haveowandJuch manufactures as steel,
uor'dfr machinery vehicles, chemicals and
h°a™e ^sMtTo&

world

into

that everyone

v

cause.
Each of them employs a ing and suu. iower taxes are
public relations man—or a dozen having their way. Until Congress
of them—to present their cause td
completes its surgical operations
editors withhand-outs. That makes Gn the budget the position will
life simple for you.
You only not be precise. But it is already

and

defiled

culture

good

doubt

no

t0"n(hf been telling the finding methods

the money helped to finance hy-

this point: De- fruits, vegetables and

prove

this

dependent nations devoured by a
big neighbor — their sovereignty

of

today's get-together?
...

Chiefly to

I have

are

pressure groups

<*roe*ectnc power, ^chemicals, pa- rest of - the

0

arms.

"real remedy," and concludes there

as

increased over the previous = _y o u r urgent
y ar approximately $621 million., invitation to
Along. w1^ your own capital rspeak-unless-;

how-JJ-

drag out family skele-

as

*V.

Can- '

would not expect

a

-

tax burden "has been

our

and.people will have
patience." Calls for increased productivity.

V00;0^.* United States investments, editors what

settled these differ-

demonstration

a

the

in

The point is,

without resort to

But why

Weeks

Sinclair

that

ever,
ences

neighbors
Kurope.

"And"

"it would

of reasonable
history of these border troubles"—which in fact, were
require

States

nerves,

size to give a

which

bonds

forever

Shots in aneer

historian Lodge

of. United

value

expenditures

hopes for the future "if

^0M%nited StetTsTn^estment's"

bands to the frontier,

fired

investment.

private

ada at the end of 1952—the latest

we were

wrote

total

ment

ur

the

on
each other's
Your ancestors and mine

armed

of

reductions, but holds

than the country can bear.".- Stresses reduced
govern¬

more

us' is

between

direct private investment in

of

getting

hPiris

explore them
together. But
we

the

in

demanding

excessive tax
,

imports.

century

feature

that

field

The

Raiding parties burned ships. Hot-

i

describe

is

from 1814 to 1914

sent

v e

and
it is helpful to
problems

interesting

.-United States declares government deficits "is the surest road
to disaster in our system of free men and in our
defense against
the Communist horde.".
Scores, pressure groups

represented 59%
Imports
74%

link

States

not stopped and would not be
stopped until deficit spending ends, former President of the

exports.

total

your

*the

disputed
fishing
rights, navigation -rules
and boundary lines.
Both sides

existing

between

The

account

1953

total

Another

Speaks of atomic power for peace under the Eisenhower Pro¬
gram.
Stresses importance of free U. S.-Canadian trade, and
a continuation of a joint friendship for the glory of freedom.

changes"

in

your

United

Pointing out inflation has

.from the United States were

economic growth."

environment encouraging

an

/States

Deficits!

on

,

[of Europe.
v
According to your records, Can-*
adian
shipments to the United

old fashioned depression,

an

Ex-President of the

South America

total trade with the continent

our

Weeks reviews the Eisenhower Administration trade
policy, the findings of the Randall Commission, and other
economic conditions. Asserts the people of the United States
of

trade .with

Ban

a

By HERBERT HOOVER*

,

and, after excluding military aid,

Secy.

are

Let's Have

•

$2,460,000,000 we' imported from
you.
This exceeded total United

S.-Canadian relationships and problems,

After discussing U.

approximately $5,660,'Almost
$3,200,000,000
exports to you and about

were our

By HON. SINCLAIR WEEKS*
Secretary of Commerce

of

000,000.

Thursday, April 22, 1954

...

37

—77^

,,

,

,

Hoover before^the American
Newspaper

Editors,

p

.v-

Society

Washington,

d.

of

c.,

m^tVh°aDDen°freom aF^denl
must nappen irom a reaerai
Continued on

page

39

-

Volume 179

Number 5318

The Commercial and Financial Chronicle

...

t i

(1783)
/<

*

billion

Trade and United States

;

By GARDNER COWLES*

Publisher, "Des Moines Register."

'

-

laws

so as

abroad, and

I want to talk about world trade
and its

importance to our domestic
prosperity. I want to try to con¬
vince you that world trade is not
incidental

an

appendage

prosperity but
a vital cog
in

declines,

our

domestic

an

economy

shrink

will
with

.

dire

re¬

sults for

our

total solution—would be

reduction

I visited Spain,
Portugal, South Africa, Kenya,
Egypt, Syria, the Lebanon, Israel,
Greece, Italy, France and Eng¬
with

talked

I

of

dozens

and

dozens

in

businessmen

each

with government offi¬
and with local newspaper

country,
editors.

!

exception

Russia. They were

p o

as

1 i

the

naive

c

i

which

e s

that

we

worried

about

"Is

United

selected

items

in

tariff

our

year

Congress this

will

get
from
is maintenance

year

the

was

the

States

don't

perceive the

Importance of Exports
.

Now,

just

how

important

are

of

the

rest

better

the

heavily

—

to

instead of

building world trade, including
imports into the 'United States,
which

can

let

allies

our

the

earn

dollars

they need with which "to
buy our goods.
For years we have been paying
our

sounds
record

a

gigantic and we over-shadow the
trade of the world to such an ex¬

exports.

own

this

If

fantastic, just look at the
of the past 40 years:

the

First

World

States

War,

the

Europe

gave

$17

v In
the 1930's Roosevelt bought
gold at an inflated price, totaling
$17 billion, and most of it came

that

a

of

economy

10%
the

decline
United

30%

of

a

other

countries.

much

directly

more

catch

quickly.

it

in

the

neck

very

■.■: *

the

came

British

years

loan

The American

businessman, has
learned, especially since 1940, that
We can't wisely live alone in the
world politically. We need friends
and allies. That is why we are in
the United Nations. That is why
we
created NATO. That is why

was
followed
by
three
of the Marshall Plan costing

billion, about 40%

and

60%

in

war

goods

economic

in

aid,

or

on

To be
would

Exports
sections

of

our

25% to 50% of
tion

for

many

economy.

From

major

are

our

entire produc¬

of

cotton, tobapco, corn and
exported. In 1952, for
example, we exported 30% of our
wheat

is

earth-grading machinery, 23% of
our tractor production, 22% of our
sewing
machines,
13%
of
our
refrigerators, 16% of our trucks
and busses. I could go on giving

no

duties

I

am

not

i

Some

our

few

whole foreign pol¬

domestic

essential in time of

and

in

our

-military

"We Are Isolationists in Our
'■X Economic Thinking"
Americans

curiously isolationist in

are

our

still

in

a

state

of

readiness.

eco¬

*An
address by Mr. , Cowles at
the
Second Annual Management Conference,
sponsored by the School of Business and
the Executive Program Club of the Uni¬
versity of Chicago, Chicago, III., April

17, 1954;




-

This

is

far

cheaper to all of us than to
keep up the tariff wall.
More Investments Abroad Needed

gradual basis
period of years—would re¬
sult in an increase of imports of
from $800 million to $1.8 billion
per year. The increase would be
divided
about
half
agricultural
on a

products, about half manufactured
products.
Even the larger esti¬
mate of the probable size of the
increase in imports with the com¬
plete elimination of tariffs
amounts to less than Vz of 1% of

American

capital

invested

abroad is another way of permit¬

ting foreigners to get the dollars
needed to buy qur exports.
But
direct private long-term foreign
investments by U. S. companies
have averaged only $1.3 billion
per year since the war, and onehalf

of

this

total

represents

re¬

invested

earnings. We should ob¬
viously try to stimulate U. S. pri-

Continued

on

48

page

offer to sell nor a solicitation of an offer to buy any of these

Shares. The offer is made only by the Prospectus.

131,836 Shares

Peninsular Telephone

Company

Common Stock
(no

par

value)

The Company is offering to the holders of

•

its outstanding Common Stock

and to certain of its officers and

employees the right to subscribe for these
shares, as more fully set forth in the Prospectus. The subscription offer
will expire at 3:30 P. M., Eastern Daylight Saving Time, on May 5, 1954.

What Should Be Done?
I

persuaded that if

am

to

maintain

a

high

ports—and I think

for

necessary

we

level

a

our

tax laws so as

Subscription Price $32

want

of

a

Share

ex¬

high level is

own

domestic

The several underwriters may

offer shares of Common Stock at prices not
forth above (less, in the case of sales

less than the Subscription Price set

dealers, the concession allowed to dealers) and not more than either

to

the last sale

or

current

offering price

on

the New York Stock Exchange,
applicable New York

whichever is greater, plus an amount equal to the
Stock Exchange commission.

greatly to stimulate

capital abroad, and do everything
possible to increase world trade
generally including
our

ban

a

East-West

on

Copies of the Prospectus may be obtained from only such of the undersigned

relaxation of
trade

as may

legally offer these Shares in compliance with
of the respective States.

the securities laws

in

Europe.
It

thinking—and

this is the
Achilles heel of our present for¬
eign policy. Matched against our
military and political needs, our
world trade policy doesn't make

would be

by greatly lowered tariffs,,
but they can be maintained by
giving them peace-time orders
from the defense department and
funds for research to keep them

the flow of American investment

thinking.

industries

war

hurt

recom¬

oyer a

an

few industries

whole domestic economy and

our

jeopardizes
icy?

.

mending except

some

employees and help them shift to
other products, than to continue
a. high tariff policy which injures

hurdle?

tariffs—which

sure

be

would it not be better to have the

The best experts agree that a
complete and sudden removal of

This announcement is neither
,

tariff

es¬

Federal Treasury temporarily aid
those injured companies and their

ing $4.8 billion of imports, how¬
ever, only about $3 billion are
subject to import quotas or to tar¬
iffs sufficiently high to have an
appreciable effect on the volume
of imports. So it is this $3 billion
we
are talking
about when dis¬
cussing a drastic reduction in the,
tariff.
By how much would the
$3 billion expand if there were

production of both
goods and services. Our exports
provide employment directly or
indirectly for some four million
persons in the United States.

a

en¬

seriously hurt by a
sharp reduction in the tariff. But

and import quotas. Of the remain¬

total

our

tariff

10%

mestic production.

the

is per¬

which

of

if

But

reduced

timate is that there would be very
little over all displacement of do¬

in

products

free

enter

now

of

jobs.

45,000
were

and

only eliminated
tirely after a decade, the best

temporary.

consists

tariff

year.

prosperity—then I think we have
and treaties and alliances stretch-' only two choices: Either to con¬
tinue to give Europe about $31/2
Sng from Australia to Japan, from
billion
a
year;
or
revolutionize
Norway to Turkey, and now to
our
thinking about the evil of a
Pakistan. As a nation we haveshed isolationism in our political high level of imports, change our

nomic

our

lion

perhaps

year

billion per

have the Pan-American Union

we

not

of

the

How seriously would a drastic
reduction in our tariff affect our
American market?

of

about $12 billion.

the average about $31/3

*

But

convince
move

mestic industries competing with
imports. There would be a loss

on

1''/<;j;!

thinking

to

as

were

Eu¬

gave

we

exports and im¬
And now we have had two years
is the United States. of grants in aid, off-shore pro¬
But I want to try to prove to you curement of
military items, etc.,
today that we in the United States totaling about another $8 billion.
are also vitally dependent for our
So when you add ft all up you
prosperity on a high level of find that in the 37
years since 1917
world
trade, and should world we have
given Europe about $125
trade sharply decline, we at home
dependent
ports than

way

our

suddenly completely
removed, resulting in increased
imports of approximately $1.8 bil¬
lion per year, we would see as a
maximum a $300 million reduc¬
tion of annual output in our do¬

drastic

done

for manu¬

This

in

Most

cause

many

are

Then

in the
$3% billion.
States

decline

could

agencies
$8 billion.

rope

a

a

tariff

our

manent,

my

United States that year and 4%%

were

question:
going to

such

of

rest of the world the

That isn't good
opinion.

taxing all Americans
provide these billions

In

-

of the status quo.

world

of

giving

are

depression?" Each had a
very
personal " interest in that out of Europe.
question because each realizes that
In the Second World War, lendif we have a depression, the im¬ lease
shipments, exclusive of Rus¬
pact on his country will be violent sia, totaled $40 billion.
if not catastrophic. The size of the
In
1944-45,
through
UNRRA
U.
S.
economy
has become so and other

.

a

can

billion in goods.

we

-

act, asking for authority to

exports? In 1952, we exported
$15 billion of goods, equivalent to
9% of all goods produced in the

the Soviet Union. What they were

will

ments

still cling

we

notion

United

them

istration is asking Congress to ex- ;
the- reciprocal trade agree¬

tend

the level of world trade declines.

nation,

a

concerned about the intentions of

tent,

It is true the Eisenhower Admin¬

tariff

Yet;

we

actually not too

,

before and when

demand

The best estimate is that if

a

industrially and ; freer world trade is proof that the
Of our total imports of approxi¬
we
continue! businessmen of the United States mately $10.8 billion, some $6 bil¬

strong

American dole.

about

they

talking

in

interested

have

feel enough

ever

factured products is increasing on
the average of 4% per year?

1

be

for

Without

not

may

national product.
terrifying figure
population is growing

domestic

our

our

enough, in

off

Earlier this year

cials,

of you

ket for

billions of dollars of aid each year,

Gardner Cowles

policy.

land.

our

political

our

think that somehow

foreign

can

.

permanently export much more
than
we
import.
We
foolishly

Ameri¬

Whole

develop

Administration

Some

ciit

;

For,

to

—

we

our

faster than

,

American

importance of
strangle world trade and prevent! world trade, don't realize our
Qur allies from becoming
prosperity substantially depends
strong.®
Our trade policy operates to keep upon it, don't understand that our
our allies poor, and dependent on
present foreign policy will fail if

trade

we

are

,

thought is already being given to
these basic questions, but I don't.

5%

undermines

goals.
i We

must

If

structure.

and

anachronistic

economic
world

contradicts

military strategy and

financially.

whole

our

*

economic policy

our

exports

to flow round

The fact that the Congress is
keep telling ourselves we
need allies for political and mili- > apparently
unwilling
to; make
tary reasons. We;say these allies^ even minor concessions toward

of

domestic

our

Indeed,

s.ense;

think

can all agree these
important if not vital
to
our
prosperity.
Clearly our
economy would benefit from an
expansion of our exports. For, if

if
we
trade and

formed observer feels the most the

stimulate the flow* of American investment

everything possible should be done to in¬
world trade generally, including a relaxation of our
; ban on East-West trade in Europe. »

crease

I

when

for three years, asking
for simplification of our customs
regulations. But almost every in¬

says

to

cause

present gross
Is this such, a

our

on

larger foreign mar¬
products, as well as a
greater market at home, our total
production and employment will
rise.-.
t'r.l3'.';-:*:
Yet, every observer is agreed
our exports will sharply decline
if we cease foreign aid, if we
continue to restrict imports, and
if our overseas military expendi¬
tures taper off. A vast majority of
the experts agree the most helpful
solution—although by no means a

»

•

.

tax

our

figures

•

hundreds of prod¬

ucts.

economy

investment capital
the world?
•

our

domestic

things which will

Asserting Americans are still curiously isolationists in economic t
thinking and are still clinging to the whim that we can per¬
manently export more than we import, prominent publisher
urges American businessmen to revolutionize their thinking
about the evil of high- level of imports. Advocates change in A-

;

-

drastically change

percentage

hundreds and

.

world investment policies so as to
maximize
imports
and
do
the

Publisher of "Look" Magazine

.

similar

to hold up our

-

V (3) What are the implications to

our

—The Siamese Twins
•

a ye»r so as

exports?

11

i

to

seems

American

me

obligation to think
through:
(1)

responsible

businessmen

What

have

an

this problem
" '■

will

happen to
domestic
prosperity if our
ports sharply decline?

MORGAN STANLEY & CO.
G. H. WALKER-& CO.

(2) Are
the

A. M. KIDDER & CO.

ex¬

world

willing indefinitely
by gifts the rest of

we

subsidize

to

the

tune

of

MERRILL LYNCH, PIERCE, FENNER &

our1

*

to

COGGESHALL & HICKS

$3 Ms

April ei, 1954.

BEANE

I

*

12

The Commercial and Financial Chronicle...

(1784)

«,

-

t

-

U

1

United

We Have Waited Too Long
For Retain oi Gold Standard
By DONALD L. KEMMERER*

today

Our present dollar will buy only
about half what the 1939 dollar
For 13

would.

lost

have

and

feel

sure

that.

would

That

tions

remaining

each year.
In
1 94 9 it flattened

started

then
down

out,

again. It

flattened

o u

t

about

dollar.

the

with

But

our

government.

is

gold coin standard is this.
If
put gold coins in circulation,
y0u give this^country a genuine
and
full-fledged
gold
standard.

assur-

no

i t

m a

y

not start down

Mr.

again.

said

Martin

Monday that
should not

we

onto a gold

go
Donald L. Kemmerer

coin

;

until

:

•

They

got worse.

standard

matters

French

have done already. The

we

waited

had lost 85%

chasing
then

the

it

franc

of its pre-war pur-

they

before

power

turned to

their

until

1926

in

re-

full gold standard.

a

was

We should

We

end to talk of devaluing the dollar or of raising the
price of gold. Once gold coins are
in circulation in the hands of milYou put an

lions

of

more

difficult to devalue the dol-

people, it becomes much

A government contemplating
action would have to
excuses
to
the people, it

such

make

have

would
that

would

to

court

face

cases

clear to the Supreme Court and it would incur
financial dishonor.
No adminisgo

tration

would

incur

tions

\

gency.

our money

today. But,

are

have been the

men, my

monetary leaders in the currency

financial

for that reason

darkness

of

we

the

It

wars

that

mid-nineteenth

could

true

sound

policy affects

money

phases

of

economic

our

The

is

converse

likewise

rather

lose

it.

They

icy

As a young
college in 1927 I

of

man

some

of

then

as

vised

a

to

dozen nations

returning
I accompanied him on

gold.

several

that
to

such

on

trips.

One

reason

of these nations wanted

some

return

to

gold

to

was

attract

foreign capital to themselves.

specialty is economic and
history.
This winter I

Stuart
on,

$4,695,000

of

Western
trust

&

Co.

and

2%%

equipment
maturing an¬

certificates,
May 1, 1955

nually

clusive.

Inc.

April
16
offered
Chicago & North

Ry.

1969,

to

The certificates

in¬

were

past

standard

at home

abroad

well

as

wealthy citizens
the foreigners

as

get

gold

from

bars

tion would

not

succeed

the hoarders would

and

come

that

the gold.

their government in exchange for
their paper money or any bank
credits due them.
Under our gold

The performance of Mr.
Burgess and Mr. Martin is completely in character with what I
have found in other countries and

bullion

other times,

can

system

central banks

gold bars.
bullion

only

or

If

foreign

the

treasuries

we

had

a

can

get

true gold

standard, this discrimina-

tion would

cease. In fact, Congress
might make the bars rather srhall

that the average citizen might
demand them as well as the rich

so

That

man.
now

when I

is

what

I

am

asking

urge you to set up a

gold coin standard.
Let

me

describe

some

major ad-

Second, resumptions have practically always succeeded.
There
considerable

was

fear

1879

in

in

this country that the resumption
would fail, although in this case
Secretary of the Treasury Sherman

felt

confident.

caboose

an

Yet

the

of¬

certificates

is

subject to the authorization of the

f

Associated

(3)

Halsey, Stuart

offering are: R. W. Pressprich & Co.; Freeman & Co.; Wm.

E.

Pollock & Co., Inc.;
Gregory
Son, Inc.; Ira Haupt & Co.; The
Illinois
Co.; McMaster Hutchin¬
son & Co.; Mullaney, Wells &
Co.;
&

F.

S.

Yantis

&

Co.

Inc.

ment

Du Pont to Admit

influence

rates

business

on

bonds;

exports

to

and

the

entire

the size of

mitted

*n ^ew York, and the Sub-treas-

Francis I. du Pont & Co., 1 Wall

W.
to

Campbell will be ad¬
limited

partnership

in

ury °Pened at 10 a.m. with a salvo Street, New York City, members
from the Navy Yards.
Fifteen of the New York Stock Exchange,
As long as we had a metallic coin clerks st°od behind piles of gold
on May
1st.
standard, we never had an unbal- coins> ready for the rush of "hoardanced budget for more than four ers "
0ne man "was standing in
With Investors Planning
years in succession (1841-44) ex- lme" to Set g°ldIt was half an
(Special to The Financial Chronicle)
cept in wars. In 1934 we acquired hour before another came.
Less
BOSTON, Mass. — William H.
the
present
weak
gold bullion than a dozen came before lunch
Gannon has been added to the
standard.
Since 1934 we have had and a few more in the afternoon.
staff of Investors Planning Corp.
13 years of
peace and 7 years of More £°ld was deposited in banks
of New England, Inc., 68 Devon¬
war.
You
expect
unbalanced that day than was withdrawn. The
shire Street.
budgets in war, so let us leave Treasury's gold supply that year
1941-45 and even 1951-53 out of increased
instead of decreased,
the record.
But we have had 13 ResumPtion
was
such a "dull Two With Palmer, Pollacchi
years of unbalanced
budgets in Party" as news that it vanished
(Special to The Financial Chronicle)
the 15 peace
years—more
than fr°m the front pages after the first
vantages of the old coin standard,
in the light of financial
history.

i

ever

tory.

before

If

standard,
i

since

we

in

our

financial

had had

begun

would

to

long

withdraw

gold in the face of regularly unbalanced budgets and rising prices,

Any

•From
before
servee
on

D.

a

the

statement

by

Subcommittee

Matters

of

the

Dr.
on

Senate

Banking and
Currency,
C., April i, 1954.




Kemmerer

Federal

Re-

Committee

Washington,
—

resumption

you

voted

an especially easy one,
different from any the world has

ever

become

20

seen.
It would be only a
resumption.
We have
foreign convertibility now for

years.

„

tQ

You

gjve

g

7

are

being

Ampriranc

thu

Americans the same

Privilege of demanding gold that
you

grant

to

foreigners.

The

&

•

..

•

Ruston

—

Sargent
with

F.

have

Palmer,

Co., 84 State Street.

E. F. Hutton Adds
to The Financial Chronicle)

KANSAS

L.

Evans

with

E.

F.

credit;
debt; gov¬

on a
completely
basis; that is, not subject to
manipulation in one direction or

free

another.

1

>

its

in

future,

Convertibility

broadest
(4)

sense.

other

In

if the

words,

If

the

neath

policy

money

German

under¬

which

sons

within

as

well

mark, the French franc,

in

the

colossal
An

sure.

do

I

What

of

some

are

which

subscribe

money

Why?

the

A

Have

be

shrunk from

we ever

the

factors

***

,

To

program?
visionary program?

hard

the

by the
policy?"

mean

money

program?

impossible

Not at all.

what

our

economic

A Possible Program
A

our

Sound Money Is Honest Money
Now.

for

political freedom; in the fight
against totalitarianism.

gates.

phrase, "a sound

fight

and

As

outside of

as

allies

have enemies

we

our

from

and to the currencies of all of

rea¬

obvious.

too

are

knows,

everyone

afford, for

of

freedom

governmentally managed cur¬
should ultimately extend to
the
English pound sterling, the

economy

this nation cannot

its

rency,

is not sound,
the structure above it is in jeop¬
ardy. And that is one condition
our

convertibility
and

a

policy underneath our economy is
sound, it will maintain an everincreasing service structure above
it.

The
gold

own

money

stupendous

task,

the

difficult

job,
undertaking? No.

America fears nothing so long as
America knows she is right.

policy?

to

analyze

us

illustrate

what

unsound

an

them.

they

do

Let
to

View-Point of Other Enterprise
Countries

us

us—

what they have done to us.
If

can

we

agree

Permit

that the

fac¬

me

to

interject, at this

pointy the thinking of

eminent

an

of an unsound money policy foreign
economist, to demonstrate
damaging to the nation's eco¬ that the view-point I have ex¬
nomic health, and retardant to the pressed is not ours alone but is
nation's normal growth and ex¬ conclusively endorsed by one of
pansion, then it should be com¬ our strongest allies. Last Novem¬
paratively
simple
and
easy
to ber, Dr. Ludwig Erhard, Federal
apply remedial cures, some of Minister of Economics in the new
are

which

are before
you in the form
legislative measures.
One might liken this Committee

a

become

Hutton

111 West 10th Street.

Company,
.

.

Club of California

thejtopic

on

of

expert physicians,
diagnosing the case before it, de¬

greater

termining the cause of the ail¬
ment, and prescribing the curative
remedy.

United States
cooperation mu¬
tually beneficial to us and to the

field

greater

his

cooperation

country

3nd

the

—

Germans; cooperation immeasur¬
ably helpful in the battle against

experience in the
monetary economics re¬

of

and

between

Historical

Communism.

flects these patent and axiomatic
facts:
|
Hard vs. Soft Money

(1) A sound money policy
should be neither "tight or hard,"
nor "soft or liberal." It should not

that I would

fluctuate

sided

Here

are

some

ex¬

try,

from

what

extreme

one

the other. It should

cerpts from his brilliant address:

"During my stay in this coun¬
I have talked convertibility
to many of your leading citizens,
but

to

what

is

certainly does not

step

mean

contemplate any one¬
in this direction by

I just wanted to
explore the attitude of the United

is

resent

this

Germany alone.

not represent

commonly
known
as
"hard" money. Nor should it rep¬

States in
able to

commonly known

this matter, so as to be
the chance of future

assess

"soft" money. A sound money developments. When I speak of
policy should be stabler Ifshouid convertibility on the widest possi¬
be geared to a definite medium of ble basis, I mean to say that as
exchange, completely free from a minimum, this exercise should
all "managed" controls, rationing, include the dollar, the pound ster¬
restrictions of its free usage, and ling and the currencies of those
as

.

various

other - governmental

by decree

or

pro¬

inhibitions, whether

European

countries

ticipating

in

by Mr. Wiser

committee of the Committee

the

already

Coal

and

and Defense Communities.

otherwise.

"It
•Statement

associated

&

Germany, addressed the jnterriationally-k n o w n Commonwealth

of

group

CITY, Mo. —William

has

national

our

interest rates—all

health, in all of its ramifications;
to our country's politically-

hibitions and
(Special

asked
camp

affiliated

Pollacchi

domestic

onlv

■

Lodi

would be

had

-.

BOSTON, Mass.
and Ray M.

day\

gold coin

a

Americans

have

his-

-stock-pile of gold

budgets; governmental
spending; the volume of "money"
in circulation; the character of our

im¬

economic

nation's

Our

ernmental

ployment; to living standards; to

to

banks resumed two weeks ahead
of the official date.
On Jan. 2,
Resumption Day, flags were out

Julia

not

are

should be the basis of the issuance
of our payer
money; our

in¬

to

ports; to employment and unem¬

of

i

many

Theoretical values

tors

with

the

and

commodity

Gold Reserves

mar¬

expansion or contraction; to the
market price and value of govern¬

Interstate Commerce Commission.

in

and

wage

price levels.

sufficient.

terest

their

and

Let

of

actual value that reflects
truly

current

ket; to invest¬

cars.

Issuance

and take

This gold, this
exchange should have

medium of

.

bullion

A sound money policy

ments;

B. Wiser

Ray

organic

Halsey,

policy

exchange ratio.

an

sales, at home
and abroad; to
commodity
prices; to the
o

Money

should establish gold as the com¬
mon denominator for
determining

to

behaviour

Sound
money

and

Halsey, Stuart Group
Offers Equip. Tr. Gtfs.
associates

gold basis.

the

industrial

the stock

sound

tablish the American
paper dollar
in
terms
of a fully-convertible

mine

in

A

which in our case, of
course, is
gold; and it should ultimately es¬

agricultural
and

just out

saw

is

factory;

make

My father, known
the "money doctor," ad¬

the

and

is

this first hand.

it

is,

in

themselves better places to invest
money.

(2)

should define the character of the
standard upon which it is based,

closely related
t o production
on
the farm,

resuming specie
usually attract gold

than

true.

Whatever the nation's money pol¬

countries

payments

Gold-Base For

life.
,

back after

way

much

do

A

cen¬

generation, have spent literally hundreds of fered at
prices scaled to yield
better; we hours looking into the history of from
1.65% to 3.00%, according
could regain the other eye, so to specie resumption.
I have studied to
maturity.
speak. And we could certainly do instances in the United States,
The i$£ue is to be secured by
very much better than the weak Britain,
France,
Italy,
Austria,
the following new standard-gauge
version of a so-called gold bullion Russia,
Japan, Chile, and elserailroad equipment estimated
to
standard we now employ.
A gold where.
Two facts are true about
bullion
standard
is
sometimes almost all of these cases of specie cost not less than $5,868,750: 25
Diesel electric road switching lo¬
described as a gold standard in resumption.
First, some Treasury
3 Diesel
electric
which
the
only coin is a bar officials and central bankers have comotives;
locomotives,
and
25
worth, say, $8,000. In a real gold always been fearful that resump- switching

We

'

all

true after the

was

risks

such

than most na- the
present
domestically
irreas the French deemable money?
They say that
say, "In the land of the blind, the "now is not the time" to change
one-eyed man is king."
Chiefly to a gold coin standard.
Gentle-

regards

in 1919.
was

Why then &0 our Treasury and
better off as central bank officials want to keep

we are

convertibility would throw new markets open to the
United States. Wants ban against free market for
gold removed

rency

na¬

tury. It

have waited too long now.

Admittedly

other

the Napoleonic wars.
•
The history of resumptions

in the most severe national emer-

long.

relating to sound money.
only item still rationed and discriminated against
throughout free world is the U. S. dollar, and says free cur¬
Holds

resume.

you

lightly; it would be excusable only

not wait so

until

wait

ready to

a

inflation,

the

of

to

are

the

By
difficult to stop

very

momentum

lines what he terms axiomatic facts

of

bad enough iar\
bil- any

are

are

reason

every

an unsound money policy which
damaging to the nation's economic health, Mr. Wiser out¬

our

That
has never been the practice in the
past.
This idea that we must
wait until other nations are ready
is a fiction of the last 20 years that
the Treasury seems to
want to
perpetuate in its temporizing slo¬
gan of "now is not the time."
In
the past, it has always been
a
financially strong nation that has

way

My second reason for favoring

Our citizens have lost

now.

lions of dollars as a result of what

Gridley, Calif.

After describing factors of

domestically
inconvertible
cur- taken the lead.
The others have
rency,
the American citizen is followed
along as soon as they
unable to ask for gold coin and felt able.
That was true after
to bring any such pressure on his
World War I when we led the

again in 195354, but there
anee

of

back

Money

By RAY B. WISER*

demand liabilities

our

is

have

not

brought

have

is oi Sound

pay¬

why we
can
have unilateral
resumption,
why we can do it alone.
We do

realize

Senators

you

coin

resume

had in the 1920's.

we

t^\<*/n

better posi¬

a

gold

Thursday, April 22, 1954

in

11mr'r:iid

l-.-'.ri

!.«.

■

any

more

There

(1939-52) it ever greater pressure on the govvalue ernment to balance the budget
and to relieve the public's anxiety

years

its

of

5%

I

!f

,

nation I have
studied.
We have only half as far
to go—there is only domestic con¬
vertibility to accomplish. We have
60% of the world's monetary gold.

than

loss of purchasing power of about
5% a year during last 13 years, says we have already waited
too long to stop the momentum of inflation by resumption of a
full gold standard. Contends resumptions have "practically"
always succeeded and concluded "we can have unilateral
resumption, we can do it alone."

to

than

money

Dr. Kemmerer, pointing to

1

States is in

ments

We

of Illinois

Economics, University

Professor of

tion

".

to

the

Sub¬

on Currency
Banking, U. S. Senate, Washington,
C.t March 31, 1954.

seems

to

me

we

par¬

Steel

-

should have

convertibility first and then free-

and
D.

,

1

Continued

on

page

45

Volume 179

Number 5318... The Commercial and
Financial Chronicle

V

(1785)

cator

(5) To

fa)

parties

to

long-term

;.

Although the buvine

nower

be

poIIsdsp

bv
oy

either
eiiner

nf1

full

Gold

s
s

Standard

currency

pld coin on demand

thp

run

varies

nmupH
/us

(b)

i^u

-

of

pxrhanpp

relativelv

nmdium

in
in

•

December

-

tion

loss

or

buying

of

r

the

and

well under way

was

by
in

sP*te
the uncertainties engendered by the political campaign'
of that year.) The record of his- ;
tory suggests that firm adherence

To prevent further and indefinitely prolonged depreciadollar's

of

fn

When

it.

<a) Redeemable promises to pay
Dresumahlv would not be
presumably would not ho ic.nod
issued

than

p

any other

ff

■

parties

?

ibusiness conditions, (Of*(course, no
^
usually m0netary standard can prevent a
Throughout
readjustment if economic equilibthe' course"'oF
rium has been disturbed by exceshistory
gov-:
sive sPeculati°n, overexpansion, or
ernments
re-~"'s^Hod?er maladjustments; but firm
lieved of ful'adherence to. the gold standard
filling t h e i r .
' app.areTltly has a»ways facilitated
promises
kusmessreeoveryonce the maladredeem

mand

sooner

later

or

taken

have

(3)To

advan-

tage of

the

invitation

an

kix

medium

a

of

exchange.

Even

c* Harwood

(b) The fixed amount

>.

of gold in

rpio+ixrfiJ S

*

nnwnra

r

lf

WOrld

have

been

standard" as far
deemabilitv was

"off

thp

PnlH

pretend to understand

usually have been gradual rather
than seriously disruptive.
(c) When prices continue rising
a
country on the gold standard,
gold tends to move out from the
in

securing

bank deposits,

and

currency

thereby limiting

or

(b)

nized

"

Gold

is universally recogvaluable substance that

as a

Only

m0ney.

speculator and the

the

shrewd

(6) To assure that life insurance
benefits, pensions, and Social
Security

benefits

real

some

to

the

obtain

shall

worth

«»«

(c)

When

there

is

oIa^

ing within close limits when "bar¬

itate

have

those

benefits
their

and

for

depen-

the

tions

comparable

(a)

Continued

depreciation

of

available. Consequent¬
ly, they hesitate to make com¬
mitments, and while potential em¬
ployers hesitate the unemployed

economic

essential

calcula¬
ordered

to

wait in Government induced idle-

progress.

(a)
boom

An

is

There

are

inflation-stimulated
not

have

sound

been

perience

prosperity,

several

Such

ness.

juggling

such

the

was

during

nation's

the

for

that

of the 1930's after

years

all have been followed by severe

the dollar at the rate of the past depressions. Never have the man- recessions and hastens business:
decade would virtually destroy all agers of a "managed irredeemable recoveries.
such forms of family protection money" been able to create a no) To assure to all segments of
within the lifetime of the average sound and lasting prosperity.
the population the benefits of
individual. .This is what has hap(b) The manufacture of deposits
: A increased productivity,
pened m Fiance since 1915, and and currency based on Govern(a)

m

imP^tant i"espects the mone- ment
tarypoliciesfolto^
.bank

debt and non-commercial,
loans does not create reai

wealth. Such procedures only de-,

are

lost in the inevitable depres-

real worth of such benefits. Such sion aftermath.

is

1 !u

to date*
thrifty citizens

"of

«

<c) Already, the
the United States

-

including

jn

the

continued
those

inflation

citizens

virtually the
same value in exchange
and acceptability as gold itself. Such was
the nation's experience for the
States

(d)
I
have
here
an
exhibit
which summarizes the experience

(4)

principal nations since 1790.
Managed
currency
experiments

To

flight

a

from the dollar with

prices lower than those currently

II

.

"

*

-«

•

are

illusory

on

destnctive

They

of

hamper the

real
sound

real buying power

than

a

monetary

illu¬

growth of the

economy;

and such

continued growth seems to be es-

sion.

Only

a

on

resultthe

one

and

severe

unemployment

on

the

the

if labor has a fixed

tends

who have

A

more

and

are

rush

to

the

in

buy

dollar

before

This

after

(b)

none

that

such 1 light from
recorded

of the

a

history.

business

many

business

occurred

xtandard

while

ex-

cycles,
declines

the

gold

was

firmly established
prolonged for several years

were

at

rose

to col-

The United States has

perienced
but

in

a

what has happened

is

evepr

currency

and

prices

further could be expected

lapse.

low

levels.

The

Nation's

few

extremely severe and prolonged
depressions occurred
when
the
.gold standard had been suspended
or

its

in

question.

continuation

seriously

was

(In this

policies
the

fiscal
that

and

the buying power of their savings
insurance

and annuities.

statement

by

Mr.

connection,

Harwood

before

tbe Subcommittee of the Senate Commit¬
tee

on

Banking and

Currency, Washing¬

ton, D. C., March 31,

wiser

The

ficials

of

the

and

far-

more

ordinarily would act with

Vk%

of this fact,

awareness

(c) instead of depending
wisdom

might

dl^nyg

a

priced that

would
U JL U

benefit

UvllvliU

V

Especially

be

for

all

those

strive hardest

to

of

selected

a

guaranteed unconditionally as to payment oj par value and dividends by endorsement
by Chicago and North Western Railway Company

Maturities

Maturities

Yields

Yields

1.65&

1960

1956

Maturities

Yields

1965

2,70%

1955

disastrously (and who
disastrously in 1927-29),

2.975^

1.95

1961

2.80

1966

3.00

1957

2.20

1962

2.85

1967

3.00

1958

2.45

1963

2.90

1968

3.00

thousands of its wisest citizens

1959

2.60

1964

2.95

1969

3.00

or

wbo presumably can best foresee
the probable effects of unwise pol-

icies and
those

act

so

as

to

Issuance and safe
The

counteract

In the absence of

policies.

oj these Certijicales

observers, there would be
fective

check

unwise

on

no

should
an

or

wish

fiscal

HALSEY, STUART A CO. INC.

to

be

a

without

sensible

WM. E. POLLOCK A CO., INC.
THE

such

ILLINOIS COMPANY

i.

*

i

the
J

MULLANEY, WELLS A COMPANY

automobile

r

j

gold
if

.4

»
-i.

McMASTER

any

by
indir

I

I

HUTCHINSON A CO.

F. S. YANT1S A CO.
INCORPORATED

April 19. 1954

For 93 years,

watching

IRA HAUPT A CO.

INCORPORATED

driver would discard the speedom¬
eter and brakes.

GREGORY A SON

maker

important guide to policy
than

FREEMAN A COMPANY

R. W. PRESSPRICH A CO.

policies

policy

subject to authorization by the Interstate Commerce Commission.

ef-

until they had resulted in serious
disaster. No truly wise monetary

authority

are

Offering Circular may be obtained in any state in which this announcement is circulatedfrom only
such of the undersigned and other dealers as may lawfully offer these securities in such state

the combined judgment of a multitude of keen and
experienced

*




$313,000 annually May 1, 1955 to 1969, inclusive

the

who

err

err

.1

.

on

few

To be

t.C

>

>

I

this

most

men

protect,

Continued

Equipment Trust Certificates

mature

vl/lluUlllvl

would

whom

(Philadelphia Plan)
To

consumers
Ot

Mil

beneficial

^be nation would provide freedom
0f action for the many hundreds

djd

closely

19J34.

^, i'-

,

Technological progress, given

Chicago and North Western
Railway Company
Second Equipment Trust of 1954

might

future

or banking policies could demand
gold, and Treasury and bank of-

more

•A

rob

least

virtually defense-

$4,695,000

gold

sighted of the nation's citizens who
saw the dangers in unsound fiscal

hectic busi-

ness^boom attributable to loss of
confidence

to

the

power of the only rethey have.
The widows
orphans, the elderly and the

sential to survival.

United

full

(b) A possible resulting outflow
(a) The scare buying in July- of gold would force the Federal
August, 1950,. and January, 1951, Reserve authorities and the govprovided
a
slight indication - of ernment to reconsider the unwise
what a real flight from the dollar
policies.
—r
mean.

fixed

sources

"

wealth-

rather

(a)

gams

-g

in

based

Taxes

the other hand.

might

a

(c) Insofar as the depreciation less against the ravages of a decharges of business are based on preciatmg dollar that diminishes

(d)

(7) To assure all those who*11
labor

nation.

(a)

against

that
to

inhibit unwise

jeopardize

have always failed.

<2) To obtain the best available

decades

adhered

banking

of 20

against

of

economic

ill in health

-

absence

monetary-standard and a redeemable currenCy the pressure for

insur" prevailing and are inadequate for and depreciates the values of life

ance»

higher

currency

several

and

ex-

money-

1932. "Supplement B" explains
how the gold standard ameliorates

history, and

standard.

prolonged

fixed

no

its future is in question, men
basis for judgunthin
l.-mi+e

or

gains"

the veil of the
illusion" and facil¬

away

"money

sacrifices people make

themselves

(c) The fact that all currency is
convertible into gold should assure

in prices.

hand

ac-

man of great standard and redeemable currency

can,expec.! to

(8) To tear

does not deteriorate in storage,

preventing the further expansion
and the subsequent rise

ing distorted boom

cur-

ard to hasten recovery from business depressions.
*

abie

P^wer since 1939

of credit

insurance

nxea

hidden

change value of gold has remained
remarkably stable for generations.
Changes in prices based on gold

reserves

fixed

a

firm adherence to the gold stand-

are

preciation, have done likewise.

IBliriS

nave

rcdGcmsbIc

3

in

nor

Plus those who have, sav- the replacement of capital equips
in2s deP°sits and United States ment, business profits are in part

thev

uiey

position to take advantage of the
vagaries of "managed" irredeem-

a

have sought gold* and the Deonle

concerned

progress,
have a

thev

snd

commilmenis

was a rency the future of which is not

rpnf.v

f

re-188'000'0?0 h®lders

domestic

as

orderly

When

,

the

and

commitments

?8,

openly avowed that his act accordingly. Probably this
currency"

tory as a means of assuring the

-

(b)

confidence

long-term

v j
»stsndsrd

monev.

when nracticallv all nations of thp

E'

kwh dnlbr has

nurrhasin?

preserve

(a) Gold is universally accented

as

ir

f^nnncihnilv
'V-

-

recent

rate

for support- leled those of France.
iude those who strive to measure
'
.,
(b) Only a firmly fixed metallic and exchange wealth and invite
confidence in the standard has been found satisfac- overspeculation;
fancied gains

dollar.

■

ch-^H* j^l

s'u

of

Such

scheme was a means of deceiving counts in part for what appears
those who labor and who neither to be the invariable tendency for

respective

See Supplement A
'WSmmg data.

de-

men have
willing to in-

are

leader among the advocates of a being questioned, men can judge
so-called ^managed irredeemable when "bargains" are available and

a

^stments have been corrected ) m .the United States have; paral-

cur -

on

Vest.

resulting
i
m-I *

dniiar

<b> Lord.Keynes who

.

v

have

com-

fruitless

thp

1

^nld

un.. as the measure

be

nf

depieciation ot the dollar <faCilitate
at

continues

other

u

Hpnrpriatinn

ml^nefessLn?vaful^n/fl^ fCalth

h*

been

rency

value of their savings,
confidence and

Vpar?

*
a.-

will

pensions

ihp

booms in the nation's

have

accumulated.

tuatineterm! ol
L°ng IT money. managed lrre" have an inadequate
muting terms 01 ataanaeed cS- deemable fr0m
a managed cur

be T™
monetary

.

pany

yet has

as

■

■-

both

a

.then-

nf
no

itahin

«n

u

•

valup

little--

exchange

hn

viru

to

power.

S0Clal secu^y be*?f«te and

prpHit

JSS

that economic recovery in 1932, measured
u*,
~.e
i„j
by the index of industrial pro-

the

(a) When assured of the future

obligations,
they can judge the risks involved

note

are as fol- duction, began in August

lows:

<1)

with

rpHppmahio
redeemable

eurrenrv

Jts ^resen^ ga*ns aPd Possible futur5 P^n^0J1. benefits. All the ef-

expansion(dS^ttetoJ

banking

of

investment whenever savings

unsound
unsouna

unwimH

productivity.

nation

rapid resumption

a

a depreciating currency
labor judge the real value of

distorted

may

temnorarilv
temporarily

(7) stabiliza¬
steady buying power; (8) encouragement of investment and
savings; and (9) assurance to all seg¬
ments of population of the
benefits of increased

the

table to
can

credit expansion (inflation) or the

insurance benefits and social
security pensions;
tion of wages
through a

» of returning to it is important to

and

assure

forts of those who labor to obtain

.

♦£ aii ougn ine Duyir\g power
the dollar

*

of

policies; (5)'assurance of equitable treatment to both
parties
to long-term
contracts; (6) preservation of value of life-

•

both

contracts.

encourage investment

(9) To

^

Mr. Harwood lists among
advantages of having nation's currency redeemable in gold coin on demand:
(1) prevention of
further depreciation of dollar's
buying power; (2) insurance
against a flight from the dollar; (3) preservation of confidence
in the
dollar; (4) the inhibition of unwise fiscal
and

equitable treatment

assure

to

By E. C. HARWOOD*

Director, American Institute for Economic Research

:

and simple standard of value free
from the misconceptions attribu-

cordingly,

To the Fnll Gold Standard

'

and

adjusting policies acthe Bank of England
contributed greatly to the
stability
and prosperity of England.

Advantages ol Return

13

on

their

page

32

14

The Commercial and Financial Chronicle

(1786)

that

Businessmen Show Faith in the

businessmen

usually

under¬

%Future

Prospective Capital Expenditures
Indicate Optimistic Outlook

One

ment
men

1954 capital expenditures for manufacturing at second highest

f

level
y

•»

on

boom plans in face of anticipated decline in sales (of 2%)
termed unprecedented, indicating surprising degree of economic

be concentrated

in

automobile

Manufacturing

industry plans
new plants
in 1954 as it did
Manufacturers plan to

to spend
and

in

1953.

increase

capacity
4%

in

and

by

other
the

by

1 9 5 4,

following

three years.
These
results
of the seventh
annual McGraw

-Hill
n

g

Company's
of
business's

survey

plans for new
plants and

Dexter

Keezer

M.

of

the

Economics
survey.

sales

Almost

every

expected 2% decline in sales this

highlights of the

tition

three

the

period
times

annual

tion

allowances

are

clearly

in

much,
of

five

of

and

modernization.

is

—

essential for many

an

Last year, manufacturing com¬
panies used 48% of their capital
expenditures for expansion, 52%
for replacement and moderniza¬

This

tion.

year,

they expect the

in

up

industries

that

are

slowing their rate of expansion.

substantially

it

sales ' dropped

For the 1955-57

period, however,

,

badly.

;

.

.

there is a little more room for in¬

than for decreases with the

creases

amount of capital spend¬

planned just about half

ing now

between industry's maximum

way

estimates.

minimum

and

textile and food

spending
take

Steel,

companies report

the greatest leeway for

advantage

increasing

'54; level

the

from

to,

technological

of

developments, while the transpor¬
tation

electrical

equipment,

ma¬

chinery and steel industries have
the

to

reduce

spending if sales decline.

For the

leeway

greatest

transportation

period,

longer

equipment; as well 'as steel, food
.

textile

the

have

companies

By

as

aircraft

overwhelming margin,
manufacturing companies report
they usually reinvest all their
an

they

stating

companies

could spend

wha(

three times

they

plan for '55-57 if they could

now

and chemical

technological

of

advantage

machinery

Steel,

opportunities.

Depreciation Policy

Except for the

will fall

sales

own

proved

advance

consid¬

more

most

in:

common

machinery,

companies would cut

capital spending most if sales fell
badly,

but

industries

these

even

industries

Mail your Annual Report to the Investment

in '53

which

equip¬
machinery
fields which are among the indus¬
tries that expect the greatest com¬
petitive pressure in the next four
and

planned for '55-57.

I

Charles F. Watson, Jr.
partner

Charles F/ Watson, Jr.,
in

York

City, and

a

member of the

Stock Exchange since

York

New

& Co., New

AUowa.y

Watson,

passed away at the

1906,

age

of

years.
<;■

Thirty-one

of

cent

per

manu¬

increased

use

such funds in

more

than

one

capacity by the exact figure they way.
had
planned, neither more nor
i
Research Important Factor
less) plan the largest increases in
capacity in 1954-57. Transporta¬
Research developments — new
tion
equipment
companies,
in¬
cluding aircraft, expect to expand products, new processes, new ma¬
substantially this year,; but at a chines—will be important factors
slower
rate
over
the i following
in a competitive period. Electrical
three years.
Companies that are
machinery companies expect to
expanding capacity rapidly are
nearly
three-quarters as
mostly those with new products spend

to

below the level already

than 50%

the

electrical

they would not cut it by more

say

transportation

ment

accurate than

estimates of dollar capi¬

was

swer

tal expenditures.
Last year, for
facturers report they would rely
instance,
businessmen
reported
plans to increase capacity in man¬ less on outside funds if they had
ufacturing by 7%—and they hit greater depreciation allowances,
that figure exactly. Chemical and
while 27% would reduce outstand¬
electrical
machinery
companies
ing debt;* Many companies would
(with food companies, the three

look

spend

if

take

industry, companies in every depreciation allowances in new
major
field
of
manufacturing plants and equipment. Asked what
think they will get ahead of their they would do if depreciation al¬
competition by '57. Even in the lowances were substantially in¬
transportation equipment indus¬ creased, about 55% answered that
try, where sales are expected to they would spend more for new
decline, individual firms report plants and equipment. This an¬

have

Investors

would

and

minimum

and

shows

less than industry sales.
planned expansion in capa¬
city, 13% by '57, is particularly
significant, because in most years
estimates of changes in capacity

Country.

the

double

greatest room for expansion with

and, under present plans, to
reach 61% of capital -expenditures
in the 1955-57 period.
As might
be
expected, the greatest shift

The

the

spent under ideal conditions
nearly

57%

erably

of

is about 15%

below the maximum that could be

steel

their

Houses

whole reports

share for modernization to rise to

the average, as the sales

on

their industry.

offing

companies that want to prosper
in the competitive period ahead.

the

times,

competition

on

cutting

.

increase

will

sales

increased.

are:

most

intense

putting greater em¬
modernizing or replac¬
ing older plants as an aid to cost
phasis

makers; individual machinery
companies think that their own

1953-1957 to
fast as in¬

as

shows

the

division

'

Business

plans of non-electrical machinery

dustry sales.
(4) A majority of manufactur¬
ing
companies
would
increase
capital expenditures if deprecia¬

year.

Other

in

grow

major manufac¬
turing industry has increased its
plans since last Fall, despite an

survey

/

survey

_

creasingly seyere competition. On
the
average,
manufacturers ex¬
pect
their
individual
company

which

in

more

is indicated by
capital spending
plans between expansion and re¬

This prospect of sharper compe¬

Industry's plans are geared
rising sales over the long term.
But the
plans also portend in¬

week
by
Vice-President

That
is

as a

its current program

turing industry

average

expecta¬ placement

of these

to

Competition and Capital Spending
,

tions with the results of last year's

(3)

Director of the McGraw-Hill

conducted

Greater Competition Seen

plani

have

'54.

the

Comparison

chemicals and'

—

already

spend more for new plants and
equipment in '57 than they expect
to spend this year. Railroads and

in

group, manufacturers think in¬
dustry sales will increase by only
4% between 1953 and 1957.
'

High

—

petroleum refiners plan capital
spending in 1957 at levels that are
lelatively close to those expected

a

to

this

announced

Department

expect

as a group,

.

Dexter M. Keezer,
and

>

Although

-

manufacturing
company
antici¬
pates its sales will be up by 12%
over the
1953 level, although as

past.

equip ment
were

textiles

shows indi¬
penditures this year of $21.5 bil¬
vidual firms plan to meet their
lion, about 4% lower than the allsales goals by competing harder,
time record in 1953.
despite less optimism about in¬
(2) Over the 1955-57 period,
dustry prospects. Last year, busi¬
industry already has preliminary nessmen
reported that they ex¬
plans to spend an average of $17.5
pected total sales by manufactur¬
billion a year for new plants and
ing industry to grow by 10% be¬
equipment, a level within $2 bil¬ tween 1952 and 1956 but
expected
lion of the high 1950-53 average.
their own company sales to grow
Actual expenditures may be sub¬
by 13%—about one-third faster.
stantially higher than the current Now
they plan to beat their in¬
estimates if plans are revised up¬
dustries' sales growth by three to
ward as they have been in the
one.
"

in

Publi sh i

new

to

By 1957, the average

McGraw-Hill

an¬

9%

try's

turing industries

they believe sales will pick up in
later years.

Industry as a whole (in¬
cluding
manufacturing,
mining,
electric and gas utilities, com¬
munications, railroads and other
transportation) plans capital ex¬

their

future.

significant guide to indus¬
intentions.
Two manufac¬

a

cur¬

sales to decline about 2% in 1954,

1

(1)

equipment

in .sales

let-down

are

business¬

looking beyond the

in the
manufacturers,

petroleum industries.

Plans Approach All-Time

much for

as

and

that

be

to

seems

growth

strength, and efforts to get business through stepped-up com¬
petition, as well as confidence in the future. Largest outlays
to

new

are

rent

record, exceeded only in 1953, indicated by McGrawHill survey made under direction of Dexter M. Keezer. These

*■

industry's con¬
for heavy./ invest¬
plants and equip¬

plans
in

ment

for

reason

tinued

estimate their capital expenditures
for periods longer than one
year,
investment plans for future
years

'/•

from the 1954 level; manufac¬

up

"

Thursday, April 22, 1954

...

after

71

long illness.

a

Harris, Upham Adds
(Special

has

Exum

M.

The

to

Financial

Chronicle)

ANGELES, Calif. —Frank

LOS

staff of

added

been

the

to

Harris, Upham & Co., 523
Street.

West Sixth

,

them

for

information

on

your

company.

Addrvftsoflraph Service

We

have

graph

a

metal

stencil

Department

for

in

our

for

Addresso-

investment

every

banking and brokerage firm in the country,
arranged

alphabetically

by

States

Cities, and within the Cities by firm

and

names.

*

v

Our

'

.

service

i

Manufacturing
.

:

industries

ited

conclusions

expect to spend $12.3 billion for because
plants and equipment in 1954,

new

*

can

be

drawn

from reports on research spending

now

many

companies

were un¬

per

(United States

thousand.

.

or

Canada) is

able

to

troleum, food, machinery, electri¬

may

be

cal

complete list
$5.00

the industries that spend the most

about

•

the

same

in

1953,

last year.

as

machinery
companies plan

.

than

Pe¬

and
automobile
to spend more

with

auto

can




has

Calif.

Milton

C.

—

the

joined
Powell

Co.,

a

small additional

on

answer

the

significant

for research in

question,
that

two

it

ST.

&

tenden
way.

'

staff of Crut¬

316 North Broad¬

Co.,

•

of

With Hunter, Prugh Firm

relation to capital

expenditures and sales—chemicals
—

(Special to- The

electrical machinery—are the

Financial Chronicle)

DAYTON, Ohio—Mary L. Lieb-

and

two that expect the greatest sales

er,

growth between 1953 and 1957.

Winters Bank. Building.

The chemical, steel, textile
transportation equipment in¬
dustries plan to spend less for new
plants and equipment than they

Herbert D. Seibert & Co., Inc.

last

year,

as

do the majority

hard has

25

Park Place

REctor 2-9570

New York

manufacturing industries.
Among
nonmanufacturing in¬

dustries,

mining

companies

and

7

If

business" conditions

experience

indicates

C. E.

change,

Wheelwright

'

manufacturing companies

say

they

utilities are planning to
have considerable leeway, both up
increase capital spending in 1954;
,and down, for adjusting capital
but' railroads,
airlines
and
gas
-spending plans. There is more lee¬
utilities plan to spend less.

Although

joined the staff of Hunt¬

Prugh, Ball & Davidson, Inc.,

Leeway in Investment Plans

electric

Dealers of North America"

W.

Mo. —Loren

LOUIS,

Sloan has joined the

of other

Publishers of "Security

of

Security

'•

29%.

gummed roll

charge.

did

!

Neal D.

staff

Building.

and

also supply the list

labels at

Barker

makers

expecting the largest increase
We

Financial. Chronicle)

>

*

charge for addressing envelopes for the

The

like electric ap¬ much for research as for new
pliances or new types of machin¬
With First Southern Inv.
plants and equipment in '54, and
ery for civilian industry. In con¬
(Special to The Financial Chronicle)
and^ ".
trast, some industries that grew chemical, other machinery
BOYNTON BEACH, Fla. —
fastest during the '51-53 defense .transportation
equipment
com¬
build-up are now cutting annual panies plan to spend at least one- Thomas W. Lawton is now with
capacity
additions.
Only three
First Southern Investors Corpora¬
third as much.
At the other end
major industries—steel, petroleum
refining and transportation equip¬ of the scale, research spending tion, Southwest First Avenue..
ment—expect a markedly slower planned by the steel industry is
rate of expansion than ithat seen
v
only 4% as much as for capital
With Cruttenden & Co.
for all manufacturing iii '54-57.
expenditures. Although only lim¬
(Special to The Financial Chronicle)
•
$12.3 Billion for Manufacturing

available.

i

v

to

PASADENA,

consumers,

v.*

up-to-the-minute

(Special

.

This list is revised
daily and offers you the
most

Joins Milton Powell

«

way

for spending to go down than

C.

Edward Wheelwright,

Eliza¬
F.

P.

Ristine & Co., passed away at

the

beth,

age

eral

N'.

J.,

manager

of 80, after
months.

an

for

illness of

sev¬

Volume 179

Number 5318

The Commercial and Financial Chronicle

...

(1787)

television set.

one

Growth Prospects of Television
By

FRANK

STANTON*

of

M

•

com¬

TV

stations

started in

were

1953.

advertising
and

Columbia
started
radio

Broadcasting

out

27

broadcaster

System

ago

years

and

as

the

confined

started

-

the

war,

as

you

committed

into

to

receiver

machinery

which

ning
10

well

electronic

CBS

broad¬

in

.

and

'

'

;

■.

",r,

7.

it

as

with

is

tire field of electronics.
this

the

■'

year's

of

to

vigor

"V

-

at

Such

has

come

Most

future

been

uttered

times

during recent
invariably
back to plague the doubters.
of you will recall that with
but

they

have

the advent of television many au¬

thoritative

voices

sounded

death knell of radio

as

tising
medium.
What
happened,
of
course,
radio

went

on

to

an

sold

that

the

adver¬

actually
was

that

achieve

"

»•

'

a

community indicate that

forward

by Mr. Stanton before the

the

has

sales
of

record

advent

been

already

freeze.

Some

appeared

in

be

can

the air in the

There

to

About 70

there

of the

the air

on

or

will

over

be about

reproduction

white.

places

;

a

The

hours

ally

mistic

Color

found

over-balanced

figures by the

in

of

by

con¬

to

seems

home

on

have
of

curve

followed

ership.

which

illus¬

vigor

-j

$700

over

per

would

be

itures

The

mjuion

one

1

an

containing

area

television

homes>

covering

Within

the

pected

the

network

to

to

grow

next

be

ex¬

over

200

sta¬

tions covering

substantially all of
million

40-odd

homes

that

television

anticipated

are

As in radio, program

bas been

leadership

significant

a

force^ ill

the growth of CBS Television,
During the Fall-Winter season of
*951 *be CBS Television network
divided the 10 most popular even*n2 programs evenly with its
major competitor. However, the
following season (October, 1952April, 1953) CBS Television capmajority

a

of the top

in

1953

a

40%

set

popula-

to

we

can

look

expenditures

1958

$lJ/4

at the

billion

time

of

by

90%

of

ad-

the

1957

than

substantial decline in

CBS

set sat-

of

m

CBS

total

of

these

115

million

than

more

families

own

the. mort popular program on the
during

gathering

1953,

radios

12 million

that

of

the

industry

assembled

be

to

ever

regular basis.

M '

■'"

,

Tele-

major

ing

into

wjth

as

networks

were

*'

effectiveness

that

in

Continued

on

page

40

TRANSPORT, INC.

IN THE

contract

AIR FREIGHT INDUSTRY

for

growth

eight

years

found

American

has

of radio

13

homes.

million

It

I

been

The

television,

can

families

ceivers.
seen

.

Eisele &

ending
in

sets

29
own

increase

million

this

Today

at

million

of

King, Libaire, Stout & Co.

rate

of

Members

50

of

New

York

March 31,

ilies

the

aircraft

maintenance

own

Teterboro

Stock

also

Exchange

BROADWAY, NEW YORK 4, N. Y.
HAnover

5

families,

growth

passengers

five

operates

hangar and

1868

shows
un¬

of the fam¬

country have at least

has

dispatch

2-6<H»0

We

re¬

between

television

and

for

and

shops,

facilities at

storage

Airport,

N.

J.

It

the

Ameri¬

television

evidence of continuing

in

airfreight

commercial

and

.

Established

facilities
at

for

freight

the Detroit Airport.

are

offering

199,800

Shares of the Class A Stock of the

|

GENTLEMEN:
Please

every

.

Each year since 1949 has

an

7

of

under

Army and other customers.

has its

conclusion of the first eight years
of

the business

charter,

or

shippers,

■"

nothing short of explosive.

1930

Transport, Inc.,

primarily

industrial

Compared with radio, however,

in

in

transporting,

the

first

Air

engaged

•

television's

send

vie

copy

of

Offering Circular of Meteor Air

Inc., Class A Stock.

Transport,

|

Company

at

the offering price of

■

*1*0

NAME-

per

share

ADDRESS—

Offering circular available
CITY_.r

vir-

programming

daytime

su(.h

a

is

of

Television's Growth*

.

a

tually sold out at night, CBS Tele-

Meteor

purchased in 1953.

on

But what is equally

significant is that while both of

AIR

A SPECULATION

were

a

weakly average aud,ienca of 44
mllllon v,ewers' the Iargest num"

METEOR

a

Is

growth has been greater

radios.

more

,

Telev

_

vision took the initiative by mov-

acceleration

The

vision's

m

that

^

or

uration.

there

as

^

.

.

the

of

order

set

this

In

.

AI

worth .noting
b

for¬

aggregate television

vertising

(October, 1953-March,
connection it

paf faST°n

Today 98.1% of all U. S.
or

10

and maintained this
poS'tlon o£ eadership dunng the

phenomenal growth,

one

well

1, 1958.

dramatically than the

own

four

can

of

set pur¬

1954,

million

29

of

area

an

during the entire period

for every television

bill-

network

network 0f jgg stations in

a

1954).

int-0

Assuming the

television

and

ward

tele¬

a

off

network

Television

CBS

jg4g> covering

ber

once

worn

television

from 22 stations in January>

grew

ap-

.

about

1952.

I believe

tion,

was

owning

of

had
a

own-

ship between advertising expend-

of

felt that

was

corresponding

In 1953 CBS Tele-

'J,

al

tele¬

studies

numerous

set

o n

closely

set

million

represented

increase

pessi¬

number

viewing

daily

novelty

tele-

expenditures

These

proximated

re¬

television

„

the

me,

of

When

the

new

high that it

in

tured

the

but
hours

tells

expenditures

television

viewing

subject

speculation.
was

four

magazines

in

screens.

Advertising

television has occasion¬

been .the

place

ings.

continuation of the past relation¬

of

1954,

greater

'

'

maintenance
on

who

with

testify.

advantage

vision

line-up of approximately

stations.

and

in less space—clearly a dis-

tinct

It

experience

quick to

more

cov¬

television homes will

erage of

of

some

radio,

Virtually complete

the

of

im¬

advertisers

as

had

line¬

a

those

times

vision moved from second to first

immediacy
and

persons,

color

650 sta¬

interesting to note that

black

have

can

300 cdmmunities.

the

of

desirability,

anticipated that by the end of
there

to

invests

are

It

January,

one-hundred

than

Television's

CBS

in

more

adds

and

products with greater clarity and

Not all of the applications can be
up.

communicates

realism

and

applied for.

expected to be taken

color

as

measurably

year-

mately 750 station channels either
already

that

before Jan.

approxi¬

are

ex¬

stimulant both

a

comprehensively

It

Altogether

as

advertising and viewing inso¬

far

expected to

course

be

This

40%.

over

billings

homes;'

can

been

the

pected to act

the

on

bringing the

year

The advent of color

has

well

fact

years

and

stations.

is

aged and been

encoui

new

1952

about 380 stations

stations

1957

television

to

hours of programming.

served

227 appeared in 1953.

calendar

be

devoted

supported by the extension of the

those

21

time

stability in the amount

Color Television

now

vision

network

til all but 5% to 10%




to

The

cur-

Television

CBS

and

month of 1949.

tendency for the view-

no

viewing has

va¬

con¬

time

all-time

Centra] States Group, Investment Bankers
Association
of
America,
Chicago,
111.,

1954.

were

the

tions in

new

This

greater

a

programming

only twice country.
1933 and 1938.,

continuing

more

which

and

sets.

'

". ■;

sales of time.

the

chased.

sale

•An address

and
of

virtually two radio sets have been

and

radio

of

so

local

records in the sale of time and the
of

pro¬

upward movement of spot

of television's

elec¬

or,

affording

of

eve¬

10 out of the

•■'■■■;'

in

been

fact that

radio

v"*

doubts have

different

years,

-

popular

of

bile should not raise doubts about

present

studies

share

1953

our

veteran
compared
with
the
electronically equipped automo¬

its;

of

movement in the gross

sales

radio

one of
exploit

been

terms

there

trates

be

of

use

in

daytime

since

Nothing, it

a

strength.

and

vision

the
its
But the fact that radio is
having

industries

magic.

tion

broken

an

that

true

and

Each

now,

By

the

circulation

aggregate

Altogether

tronics,

popula¬

225

cally transformed.

first

This

infinite variety

Intensive

j

its. history,

families

in

is

and

..

been

homes, factories, and business or¬
ganizations are being electroni¬
veteran

to most of the rest of the

go on

50%

nearest

of the two

one

most

the aggregate

en¬

may

instruments

of

its

of

stated

10

.•

.

tinued

passing year sees the f mther ex¬
pansion of electronic application.
Each year more and more of the

a

service

air in 230 communities.

.

Only the

potential

rate

popular

has

this

said to have been scratched.

is

extending

1951 dis¬

downward

point it would be super¬
my
part to do more
than call your attention to the in¬
herent growth potential" of this
collective area of CBS activity,

and

new

television

are

time

on

tools

there is

some

television

Potential

Growth

of

is of

selected

quire

is

At this

surface

texture

interest,

stations

nearly half a billion dollars, about
$25 million higher than 1952. * It

divi¬

development

-

intertwined

deeply and in-

more

separably than does radio.

leading markets brought tele¬

established

electronic

Laboratories—the

fluous

be¬

run¬

spite of the advent of tele¬

Last

division;

manufacturing

A

sonality far

of all radio stations and networks

transistor

and

be

programs

that

sion; and CBS International—the
export sales division.
.-V
/

stations

into

in

growing total and is reflected in

These 108 stations located in

come

billings,

growth has been part of a rapidly

were

have

aggregate

gross

Television's

38%;

running

volves the texture of human per-

by

up of about 60 stations will be suf¬
pattern of growth, with
each year's sales exceeding those ficient to cover about 75% of the
of the previous year, a pattern* total
television
homes
in
the

lumbia— the radio and television

research

ahead

vision, radio maintained its

manufacturing division; CBS-Co¬
receiver

added

tinuous

as

tube

the
those

The other

most

In

divisions

as

the

the visual dimension of television pro-

on

stations

new

end cumulative total to about 450

the

grams.'

which operate
networks; Co¬
lumbia Records; CBS-Hytron—the
casting

stations

that

rently

gross

Radio's gross sales are

can

of

out

is the result

Television—the

CBS

belief

my

5.2

the

before

ratings or popularity.
Today CBS Radio broadcasts nine

arate units of CBS are: CBS Radio

and

CBS

program

bricks and mortar,
patents. These sep¬

or

steadily

volume is

medium.

decentralized

a

record

our

not

imposed

is

of

average

to

rose

indefinitely, if only because it in-

basic yardsticks for measuring the
effectiveness of any
advertising

three years ago ex¬

activities

philosophy of operations; and I
underline "organizations" because
men,

It

sur-

September 1948 and ter¬

in

areas

near¬

competitor, and 35%
1953, The figures for

in

Sales

<

,

of

the

an

the

CBS

longs the factor of novelty almost

of

riety

competitor.

manufacturing.

1 believe

freeze

the

moved

running
at
higher than

Frank Stanton

re¬

Today Columbia Broadcasting
System, Inc. is made up of seven
separate organizations.
I stress
the word "separate" because we
are

From

to the end

later

years

In

1952

network

the

of

30%

television

the

more

know, it entered actively into the
field
of
television
broadcasting

;

has

close CBS

and

and tube

; During

the first two months of

After

its

stations.

course,

Since the end of the freeze,

was

Some 10 years

fairly even terms with its
competitor. Since 1949,

higher

ing work of

and less than

1927, it

of its nearest

early pioneer¬

tended

of

thirds of the country's population.

ning about 25% higher than those

engaged in the

electronic

the

63

network

with gross time sales in 1952

si-i '

television

hours of viewing per set per day.

television

been,

vision within range of about two-

<

following
it shared this leadership

years

Radio

multaneousiy

search.

indicate

has

ing of any particular group to de-

est

period,

was

per

cline.

on

At

about^'t he.
CBS

viewing

idly

13

Columbia

same

of

stations have been appearing, rap¬

networks.

as

Records.

hours

obtained

1949-

period

the

Television

network

sion

later, by 1936, it had become the
largest of the four nationwide,

ganization

;

five

works in existence.

recording
field by acquiring an orknown

about

television

the

minated in April 1952, 108 televi¬

-

Radio.

Radio

operating in

for

on

51,

ing.

CBS

CBS

average set

estimated to be turned

,

then the smallest in terms of gross
sales of time of the three net¬

entered "the

now

the

of

opposite.

veys

FCC

clearly reflected in

experience

When

itself to this role until 1938, when
the company

■.

is

movement

a

the

the

Three

building

$l1/4 billion by 1958.

to

in

CBS

be

day.

of

new

Speaks optimistically of
Esti1953 was $700 million

television in

on

predicts it will rise

growth

During

to

December, 1950, the

was
•

,

beginning of television

future of color television and its value in
advertising.
mates

In

by the

r-

Viewing. The reality! whole.

proved

of

Reveals 29 mil¬

people already have television receivers, and 227

The

has

closely associated with the growth

and its expansion into the field of electronics and phono¬
graphic records. Reports each passing year sees further ex¬
pansion of electronic application and predicts, by 1957, 90%
lion

roughly

*•

"

,

population

pany

of nation's families will have television sets.

expected

end of 1957.
I

CBS executive describes growth and development of his

be

can

\

President, Columbia Broadcasting System, Inc.

This condition! the hoiirs of

approximately 90% saturation

15

STATE-

I

"

•

16

l

.

J

The Commercial and Financial Chronicle

(1788)

have

long since exceeded

their "fabulous"

THE MARKET... AND YOU
WALLACE

By

STREETE

ran

moments of trouble this

into

Steels

highs of

One

An

of
The stock market

The Papers, Uraniums, and

1929.
*

quite the opposite of the feats

*

:

*

glaring show

even more

persistent bearishness is

of

group

dozen

a

Outstanding

particularly this week in des¬
ultory markets

a
has

been

in

the

forefront

have held above 300

on

every

But there has

been

persis¬ end of 1949, it dropped to 24 dends of

a

tent increase in the list of new

single trading day after work¬
lows for half
ing across the line late in

dozen sessions

a

by 1950, 16 at the end of 1951,

10%

25%

last

in

year,

worthwhile

rather

a

well

as

and

1950

as

uncom¬

7 in the windup of 1952 and
couple of new
mon
improvement.
issues a day join the repeaters fractionally lower last year.
show
❖
*
*
a
similar
consistency
This issue sold as high as 101
but on the other side of the seeking lower ground. Prom¬
:
Champion Paper & Fibre
line in that they repeatedly inent among the new lows are in 1946. Its companion issue,
has shown an ability, at
Falstaff and Pfeiffer in the
try to best the 1953 high but
the A stock, once a near-blue
times, to be rather volatile
have been turned back time brewing group, J. P. Stevens,
Beaunit Mills, Celanese, Vis¬ chip, dropped resolutely from and, in
after time.
addition, has a steady.
116 in 1947 to less than 22 at
*
*
cose, Goodall-S anford and
advance
record
of
several
in the fabric and the end J of 1952 but then
As usual, the seven-month Kayser
years' standing. It has been
fields,
Studebaker steadied a bit and has held
old lag by the rails gets a clothing
posting new highs each year
and Hudson in the motors.
measure of blame
above 23 throughout 1953 and
every time
*
*
*
since its 2-for-l split in 1951,
the industrials go through a
so far this year.
repeating the same pattern
The motors, as a matter of
correction. But the fact re¬

March. The rails continue to

in

row

a

as

a

v

'

*

mains

have
hill

that

been

the

industrials

thoroughly in order

trying times throughout, Gen¬
eral
Motors
alone
showing
something of an inclination
to stand its ground. The in¬
dependents have all been
dragging anchor, and an ex¬

market,

pected

able

work

to

up¬

60

points, or rough¬
ly 25%, despite the drag the
carriers have set up. In short,
some

what corrections have
so

far

and

are

the

arisen

*

*

the

fact, have been having some

first quarter

>f

■"

.

old

stock

:-Vr.

■

While thq Bon Ami issues previous

perhaps,

are,

lustration
when

a

1946.

2-for-l

The

the

division
holds

issue

in

some¬

what

not par¬

company

sion in the bleak mid-Thirties.

Meade
Corp. was
another
by the industrial port by Chrysler has kept
making the new high list this
tion, there are other persis¬
shares, has yet to show signs the group off balance. Pack¬
tent losers around that week, again on a push to an
of topping out.
ard's president seems even a
all-time high.
*
*
#
haven't so convenient an alibi,
❖
bit more cautious than most
as

repre¬

poor

re¬

sented

ticularly noted for diversifica¬

the

Despite

Doing

Work

of the

independents in

group¬

ing all quarters of this

year

including International Shoe,
Alexander

Hires

Co., Holland

predictions, in a "year of adjustment" for
John
secondary issues have yet to his
company while the othefs
come
into popularity and it
Gas.
have been looking ahead to
has been the blue chips that
have

had

many

to

do

the

work

better

results

an

push of the averages into
area
only seen once before

Morrell

far

the

auto

fory—back in 1929—the
haven't
been
t ey ■ 'les,
brewing issues,
marketwise as
variety " tores and some of the

mergers

influential

as

the

talk

mere

*

*

;

a

five-year

persistent

action

naturally helps




been

able

to

paint

black

the
ink,
the

now see
no

figures
and

come

to level

over;

officials

turning point due

earlier than

beneficial

the

July when the

effects

might

be¬

the

close

out

the
each

er are

even

further away.

❖

#

,

of the Korean War

start

only

dozen

1,050

out

of

five

scant

a

End

common

bought for

some

chemicals
Pont

Profits

Tax

apparent. For such

as

issues, and Vanadium partic¬

which,
have

with

Vick

con¬
an

become

rail

the

Denver

Chemical,

has

issues

by

although

'.overall

sour

&

Grande

Rio

hhve

by

sales
8,

1947.

Starting at

30 at the end of

worked

its way

a

giving

steadily

6 uphill and the present stand¬

although they had to

the

selloff

week's

raced

estimates

of

coincidence all-time high for the issue.

l

as

a

wild

around that

first

all

quarter

more

But

has

not

in

been

the

material

building

the

were

far

optimistic than the facts

warranted.

When

no

in

not

are

the

rumor

contingent,

keen in judging

as

people who do the
underwriting business, quite evi¬
dently are willing to wait on the
market

let

and

render its

the

was

again.
article

It still appears to be like waving
a

red

in

flag

bring

out

yield

of

another

front

top

a

less

of

grade

than

bull

a

to

bond at

a

Although

3%.

attempt in that directions

week

rather

was

coolly

re¬

ceived, the record is studded with
instances

in

where,

light

the

of

subsequent

developments, today's
seemingly high price tag turned
out to be a bargain.
Some of the

major underwriting

firms which normally take on the

job

of

for

organizing groups to bid
given issue are finding some

a

of

their

associates

side

stubborn

bit

a

these

the

on

days wherr a
which means;,

price

is

through" the magic
basis.
Much
of
this

suggested

luctance

is

due

the

to

3%
re¬

fact

that

people whose business takes them
to

syndicate group meetings find
practically all of those ap¬
pearing at such sessions are "in¬
voluntary investors" in at least
one piece of business.
that

The

next

fortnight promises ta

be a| relatively busy
vestment
bankers

something

like

corporate

new

period for in¬
what

$150

with

million

bonds due

in,
for

up

bids.

Largest
wealth

of

$50,000,000 of
bids

day

will

is

Co.,

new

be

Common¬

of

these

Edison

Chicago's

opened

forenoon.

on

which

next

Tues¬

bonds

The

following day

will bring out bids for $15,000,6$$
of bonds of Utah Power Co.
And in the ensuing week a total
of

upwards of $90,000,000 of new

issues,
for

mostly bonds, will be up
competitive bids. Largest of

these

is

New Jersey Bell Tele¬
$2,000,000 issue followed

$20,000,000

two

undertakings,

Cleveland Electric Illum¬

for

inating Co. and the other for Wis¬
consin Electric Power.
The
tive

May

stantially

of

calendar

issues

new

by

was

the

prospec¬

swelled

sub¬

application

of

the Public Service Electric & Gas

Co.,

the

to

New

Jersey

Utilities Commission for

Public
authority

to issue and sell $50,000,000 of new

and

249,942 shares of pre¬

ferred stock.
The company

plans to apply the

of the

new
a

preferred to redemp¬

like amount of outstand¬

ing 4.7% senior stock.
Funds realized from the sale of

views
do

not

coincide

Chronicle.
those

list

seasoned

verdict.

own

valid proceeds received from the sale

found, however, they steadied

[The

a.

coaxed.

or

the

as

tion of

for

un¬

been

directions.

latter

just

of

has

most

be driven

are

values

per¬

levels

marked

any

backlog

apparently

to

Rather

who

own

which

in

up

Buyers
mood

to

with this drastic action

even

reduction
sold

turned

involved

less.

or

there

fort¬

last

the

accordingly

bonds

mit them to seek their

bonds

results

operating

time

an

agreements on re¬

within

and
the

ter¬

have

syndicates

their

issues

night
loose

yields and

.

Several

cent

one

a

shade

1949, it

a

the matter of

on

minated

by

been

share of the blame for

a

which

Railroad

respectively. These ing around 66 represents
no mere

*

*

take

source

creased

16%

market

erratic

good overall account of them¬

ap¬

General emerged from reorganization

over

somewhat

the

chiefs

from

prices.

phone's

more

Western

Rubber, first quarter net1 in¬
off

good but

a

performance recently, is

in

were

covering,

short

given them

*

An odd member of this group,

Electric, du Pont and U. S.
well

some

that life.

stocks

pearing in this select group.!

has

crete results of the end of

Excess

shade over

a

predominate,

and

of the considering

the first

as

have

$12 in 1950 worked to

rumor

chips

could

which

and

price

selves

strength

imparted to

blue

and

Climax

Steels

*

Stimulating

Momentary

that

something like occasionally

Boeing and Bell Aircraft
EPT's

as

a

comprise

du

recently

as

times

apparent. Any benefits
trade regularly. Aircrafts and

from the Hudson-Nash
merg¬

been

three

picture

But

$20

successively higher ularly, have had to cope with
since the 1950 break on some sizable skepticism

at

year

change

brighter.
to

Molybde¬

Climax

1950, pushed ahead to around

been

the other side of the

able

Vanadium

in

Vanadium, available for

around

Selectivity

improvement in the industrial

issues

hasn't

and

num.

Bullish

give all the appearances about them prior to the offi¬
somewhat
bear market performance cial news. The
Willys-Kaiser
union

swings

rather

some

*

autos

of

leading to

Corp.

The
So

vestors

still

is

market

rather severe
case of indigestion growing out of
a
conflict of ideas among under¬
writers and institutional portfolio

capture the imagination of in¬ yield

Affiliated

and

issue

new

"going

Uranium issues continue to

wide

The

in ? *

Furnace,

later

in

largely alone. In fact, despite quarters.
the

Smith, Charles E.

*

*

,

Blue Chips Still

The

suffering

this

happens thing of a title for stock splits
products catch by virtue of its 7-for-l divi¬

of

newer

with

up

extreme il¬

an

after

set

Report

of

that the industrials

so

Reporter's

the paper

was

International Paper

being achieved by such as
the
groiip for some time,
that have been falling steadi¬
including a selling spell heavy General Electric, du Pont,
forging to new highs rather
Bethlehem Steel and most of ly for four years or longer
enough to force the tickers
behind floor transactions in the Standard group of oils.
while the average tacked on repeatedly. It is within reach
❖
#
%
of attaining the same price
the week's initial session. It -•V /V. ■■
well past a hundred points.
was the second sell-off of siz¬
tag the old stock reached
Included in this group is the
More New Lows
able dimensions this month
prior to a 2-for-l split in 1949
Some of the minor indica¬ one-time speculative favorite,
but
was
well
enough ab¬
and
subsequent stock divi¬
tors can be taken either way. Bon Ami B. From 32 at the
sorbed
week,

Our

that stood out

group

division.

issues

or so

Thursday, April 22, 1954

...

expressed in this
necessarily at any
with those of the

They are presented as

of the author only.]

the

new

first and refunding mort¬

gage bonds

will be

uped to finance,

additions and improvements to

properties.,

l

t£e

.Volume 179

Number 5318

The Commercial and Financial Chronicle

...

(1789)
effective date of the plan—will be

breakdown

charged against produced tonnage.

A Stabilized Anthracite

payments.

It is

good and

a

workable

a

plan,

and will have the effect of stabil¬

Indnstiy Coining
By EDWARD G.

izing the Industry.
To

;

.

•

••

.

f

.

\

•

V

-

FOX*

r.

•

:

.

,

'

(

problems. Says efforts

being made to solve these problems,
Production Control Plan is needed,
and substandard anthracite produced
by coal "bootleggers,"
though not prohibited, should be identified by close policing.

The

stock-up during

Anthracite

many

other

beset

Industry, like
industries today, is

by

difficulties which are
deep-seated and wide in scope. I
am

sure

body

no¬

would

ers.

temerity
had

solu-

but

its

that

There

am

able

and

work¬

only

Edward

by

ducer

G.

Fox

.

retailer

This

is

no

or

solve

can

alone.
the

ultimate

one

pro¬

these problems
subject of vital

a

importance to all of
to

and also

us,

and I
welcome the opportunity of dis¬
cussing it with
tion

had

consumer,

If this

you.

asked

been

at

ques¬

time
I doubt

any

within the last ten

years,

if

received

would

it

tail

have

consideration.

serious

It

very

has

al¬

been the custom for the re¬

ways

coal

dealer

fill

to

his

bins

during

the summer months, and
producers became accustomed to
this sound

principle and governed
their
businesses accordingly.
Why, then, ' has it become a
timely question today? Let us ob¬
serve
the recent history of the
Anthracite Industry.
Over the past several years, the
Anthracite Operators had geared
1

themselves

to

maximum

a

time-production.
producing units

All

were

war¬

available

pressed into

low-grade

anthracite,

situation which led to

of

part

cash,

could

be

on

continued

on

in

storage of

a

the market. This resulted

2,350,000

tons

of

coal, principally the chestnut, pea
No. 1 buckwheat sizes, hang¬

stock

coal,

the

overcome

com¬

coal, and
portion of the
business by reducing the price be¬
low that of other producers. This
step was taken in the belief that
obtain

greater

a

other operators would not

move

to

meet/this

price competition — a
silly opinion. This resulted
price war in 1953 which cost

rather
in

a

this

Industry

less

not

than

$20

millions

without
materially
changing the percentage produc¬

tion position of any one
company.
This

situation, naturally, created
uncertainty in the minds of

an

the retailers
at

to whether

as

or

not

time during the year, coal
being purchased at prices to
their best advantage, and also left
doubt as to the stability of the
suppliers and the whole future oi;
the industry.
any

was

But my purpose is not to recite
the past problems of the
Industry

,

has been established, and
initial steps in this plan have been
taken to overcome these problems.

the retail dealer of

a

in

mind

is

that

not

storage

the

note that those

sup-

sizes

range

$2.50

matter

how

for

slow

producer

Anthracite

operators

above

of

their

product.

denied

coal

that

business

to

it

gearing

keeping with today's market,

that

so

are

this

production

maintained with

can

and

unfortunately

this

tonnage is predominantly in the
sizes which adversely affect the
retail

coal

dealer.

For

the

most

this tonnage is b^ing pro¬
duced by opportunists who have
taken advantage of an economic
situation to employ miners at a
substandard wage, and who are
part,

establishment

of

the

Greater

address

by Mr. Fox before the
Philadelphia
Fuel
Conference,

Philadelphia, Pa., April 7, 1954.




i

were

which

sustained at 1953

considerably'

were

the

of

The

from

the

dealer should be carried

in

overworked

the

summer

due

to

made

fair

to

average

will

probably

be

true

trade

at

lower

prices made

sible by deliberate failure

on

pos¬

the

Smith

has

industry.

This advertisement is neither

an

The

on

an
up-to-date
might say that

I

to

The

Financial

COLUMBUS,
Fullerton

has

with Bache &

Chronicle)

become

associated

Co., 30 East Broad
was

formerly

local manager for Westheimer and

and
of

prior

thereto

Fullerton

&

Inc.

offer to sell nor a solicitation of offers to buy
offering is made only by the Prospectus.

any

of these securities.

NEW ISSUE

April 19, 1954

1,219,856 Shares

in

detail to meet the present

Company

(a Minnesota Corporation)

early 1940's, has not been changed
in its basic principles, but
changed

Common Stock

day

problems.

Par value $5 per

Share

This plan does not prohibit the

production
but

does

grade

placed
full

substandard

anthracite
on

that

this

shall

or

coal,
be

the market without the
the

ultimate

sub-standard

be identified

pur¬

consumer.

anthracite must

low-grade prod¬
uct. The Industry will be
closely
policed, and violators of this por¬
tion of the plan will be dealt with
according to Law. Slate and bone
will

as

as a

not be

coal

The

low-

not

knowledge of the retail

chaser
All

of

provide

sold as coal—nor pea
nut coal—without the full

Company is offering to the holders of its Common Stock the right to sub¬
at $14 per share, for the above Common Stock at the rate of one share for
ten shares held of record
April 15,1954. Subscription Warrants will expire at
P.M., Central Standard Time, on May 4, 1954.

scribe,
each
2:00

During and after the subscription period the Underwriters may offer shares of
at
prices varying from the subscription price.

Common Stock for sale
i

>

Copies of the Prospectus may be obtained from any of the several underwriters,
including the undersigned, only in States in which such underwriters are qualified to
act as

dealers in securities and in which the

Prospectus

may

legally be distributed.

knowledge of the purchaser. Op¬
erators

will

be

restricted

from

overproducing the market, and

no

producer will be favored. Any
tonnage shipped from the coal in

storage

as

of March 29, 1954—the

The First Boston

Corporation

*

Ohio—Howard I.

Street. Mr. Fullerton

pany,

Northern States Power

with

Bache in Columbus
(Special

Company

this

associated

H. I./FullertonJoins

President

detriment to

been

for many years.

ity, shall unfortunately always be
a

Chronicle)

Leedy, Wheeler & Alleman, Inc.

this type of tonnage, low in qual¬

machinery

Smith

Financial

Florida Bank Building to engage
in
the
securities
business*
Mr.

this

part of its producers to meet their
just and legal obligations, but

and
man¬

in winter, which results in
costs

by fall to promote con¬
buying and better working

Burton
The

Fla. — F. Burton
Smith has opened an office in the

as in years past that the
usual tonnage of substandard coal
will continue to be offered to the

to the

machinery and

progressive advances

to

ORLANDO,

summer

consumer, relieving the
of
the
problem of idle

equipment

an¬

be

It

ultimate
dealer

prices

time at the mines.

retail

on

which

sumer

coal obtainable in sum¬
held in yards and ready for
immediate" d e 1 i v e r y, indicates
good business procedure.
by

spring

could

quality

buying

new

prices

be

top-

mer,

Summer

F.
(Special

Production

one
♦An

a

nounced by my company were an
effort to establish a realistic point

profit to the
mind, the greatest step in meeting
all of these problems is the re-

basis.

market;

with

justifiable
producers.
To my

Plan

and, with a short-range viewpoint,
dumped on the market a sizable
tonnage of low-grade substandard
coal which today has grown to
10% or more of the anthracite

but

be

Control

formerly known as bootleggers,
who produced without giving con¬
sideration to quality or weight

lowered,

a

realistic

boom period

the

the year?

the Production Control
Plan,
which
came
into
being in the

same

approximately

the fall prices of
in which tremend¬

assume that
greater
losses would be had if the present
prices were to continue through

ex¬

cannot

storage

Opens Own Office

/

reasonable to

merchandise

But
a

the

industry's history.

presently existing
prices, with little opportunity
then of meeting costs, is it not

It is not my intention to be pre¬
enough to advise a
group of retail dealers, many with

production which

a

ing over the market. This also
represented a cash outlay on the
part of the Operators in an esti¬
mated amount of $25,850,000.

During this

year

-If losses

pripes,

is

delivery either by
retailer—a full

how

that

F. Burton Smith

is important to

.

years

summarize,

confident

labor cost there exists a
floor below which the cost of
pro¬
duction cannot be reduced.

sumptuous

long

quite

fixed

supply of coal on hand in all sizes
permits undelayed delivery. /

perience,

feel

jeop¬

may

existence.

very

program

and

in Anthracite, there sprang up in
the region a group of producers

less than

somewhat

by

or

position and

his

will

difficult

very

the

just a
matter
of
plain
good business
judgment. Today there is no ex¬
cuse

a

To compensate for those
losses,
cost of production has been

of

storage and
scarcity of the

great,

himself in

Unless

producer

than during any recent
year of thfc

and

ous
losses were suffered by
major producing companies.

Having coal of all sizes in bins
and ready for the winter demand,
no

the

on domestic
almost $2.00 less than the

1953, the

this may result in a
/sizes most in demand this coming
/winter.

;

are

It

realization.

done,

prices

spring/prices and

may

full

year

is

buying program which,
has long been an established
prac¬
tice in the Anthracite Market is
more desirable in the
year of 1954

history behind the industry,,
is almost impossible to
imagine

several weeks.

in

now

last

the prices this fall
level which will as¬

a

summer

any lower prices than those pub-0
lished by the reputable
companies
at various times
during the past

known

tonnage
give
feeling of security to the deal¬
ers on the question of supply dur¬
ing the .winter months—but bear
sizes in

some

higher

constructive

it

It is true that the present

of

power

definite

months. Qual¬

summer

companies

until
at

In conclusion and to
I

the

ply of coal for the winter months.

opinion,

a

pur¬

are

ducing

and

that

assume

an

ardize

Keeping in mind the financial
losses sustained by the
major pro¬

in

to pre¬

This is generally

assures

except to say that in my humble

is in

short

on

not

or

must

reasonable
to

sense

financial

rests

whether

on

also

break-even

this

re¬

buying

Industry

price

average yearly price, so
that producers will at least reach,

or

The decision of

summer

not

be

sure

point.

to

throughout the dealer trade. Buy¬
ing during the summer season also

that

petition of substandard

ket began to settle

those sizes which continued to be

belief

conditions
difficult

it

circular
will

being made at the best
opportunity from a price stand¬

ity is an important factor in pur¬
chasing during the summer

,

they could unload this
recover

themselves to

into normalcy
and producers stored those sizes
not in great demand, so that pro¬

a

operators

some

a

largely

perfect product in winter

a

months.

can

created

of

more

than in the

who

roads made by some producers of

the

creation

pare

means

operator

contribute

on

more

in

prices through the year 1954 will
gradually climb above the spring

trade//.

are

Anthracite

1954.

common

„

a

obligations

less academic.

change of tempera¬

of which

Is

t

place

chases

constant

in

come

along the line—

the

this, increase

a

Both incoming raw
and outgoing prepared coal
subjected to snow, frozen rain

industry, plus the in¬ /sizes

full-time service. Lately, the mar¬

duction

an

legal

and

buying to this point

the

buying from a
standpoint.
During the

which it is

The storage of large
tonnages of
coal at the expense of cash in the

anthracite

ef-.

fort, ingenuity and research, by
day-to-day application of sound
business principles, and by coop¬
erative meetings such as this on
both the retail and producer
levels.
This meeting today, and
other similar meetings, indicate
steps are being taken in the di¬
rection of solving these problems.
one

which
his

with

tailers

the

large
price below

a

familiar

summer

tures—all

dealer and operator are victims of
/a
this parasite.

they will

constant

the market

on

operate at a1 profit. Unfortunately,
this situation still continues and
the
household
consumer,
retail

fident—

found

at

meets

prob-

made

type of operator with

dumping

all

year-round

of

ment

sum¬

outlay of

Some of you may consider that
the advantages given for summer

at

and

Wel¬

producers/provided

tonnage of coal at

solutions

are

No

standard

this

—rof that I

be

the

somewhere

an

However, to¬
day's merchandising by most com¬
panies in the coal business makes

late

mines.

coal
are

the non-payment of other ob¬

of

e m s.

the

fit not

seen

of

quality

ligations, which must be borne by

to

to

has

group

deal¬

some

winter, production is different

/■;

into the Health and

-

>';/
are

value

fare Fund for the protection of
the future of these employees. Al¬

or

o n s

c o n

same

pay

he

many

1

to

that

devised
t i

This

found

claim

V

//

We

obliged to work excessive hours.

so,

the

have

months.

summer

buying requires

answer

doubt in the minds of

a

Assures retailers that it will be safe and economical for them
to

mer

Greater realization must be had
by the dependable producer seg¬

ever, I appreciate that the year
provision for assistance in financ¬
just past could leave considerable4 ing this summer
buying to stimu¬

are

reestablishment of

a

It is appreciated that this
cash

this question could have
anything
but an affirmative answer. How-

/

Head of leading anthracite concern reviews recent
develop¬
ments in the anthracite industry and
points out difficulties and
and

overtime

''■/><

specifically the ques¬ either- by the household or indus¬
tion
concerning
summer
"fill- trial consumer,
by the retailer, or
ups," it is doubtful if in any year^ by the producer.

President, The Philadelphia and Reading Coal and Iron Co.
•»

labor

and

17

Blyth & Co., Inc.

was

Com¬

-

38

The Commercial and Financial Chronicle...

(1790)

of

Oil's Major Problems Today

of competitive costs;

(3) the attempts to organize a national
union of petroleum employees. Holds counter measures are
required to prevent domestic oil production industry from being
undermined and ruined by imports, and deplores threat of oil

voluntary
of its type in
the world. Its activities are varied
the

is

tute

greatest

service organization

and

Its

vast.

single

men

ports have risen from 377,200 bar-

rels

prevent the domestic oil produc¬

will

rise

tion

day

in

front

con¬

Its

us.

benefits

are

conservation

indus¬

sistent

alone

but

other

in¬

dustries

and

to the

with

sound

requirements.

States

Texas—have

which

at

wells

the

be

can

notably

—

restricted

rates

produced,

general public. I think its
outstanding feature is the fact that
it provides an area for cooperation
among people of different companies without in any way lessening the degree of competition existing among those companies. I
am
proud to be associated with
the API, and I am sure you feel

This prevents waste, which is
beneficial to all, but unfortunately
it also, in effect, makes possible
the supplanting of domestic production by imports. And that is
precisely what is occurring,

the

itself to

uphold.

And

are

way.

One of the most difficult

in other

lation
oil

prob-

lems to confront and confound

our

words,
the

of

the viothat the

we see

oil

policy

industry broadly

pledged

once

.

witness to

"

colored

judge.

raised

a

live

to

day.

with

All

my

she

another
talk, talk,

woman

does

is

talk."

I

oil

than

ter"

not

the

heights,

new

When

harbor

and

of oil

reserves

that

use

lightly.

tered

before,

ever

proved

our

do

word

"disas-

tanker

en-

Houston

re-

a

at

cently and discharged Middle East

the

whole

trouble,
She don't say."
hope to make clear just what
I have to say about imports. In a
nutshell, it is this: we have a national oil policy adopted by the
National Petroleum Council, the
API, the Independent Petroleum
Association of America, Mid-ConJedge.
I

tinent

Oil

and

Gas,

oth£r organizations,
individual

as

companies

Tipro,

and
by

well

as

and

oper-

atoijs. That policy, in

essence, says
that imports may supplement but

single tanker discharged
equivalent of one day's production from less than 20 Middle
That

East

wells.

But

load

its

repre-

day's

a

enough,

Impjbrts supplement

our domestic
production when they help us to

rne^t that part of

our country's
total demand that otherwise per-

thirfk most of
a

limited

be

us

are

amount

of

satisfied.

Because of high rates of produc-

agreed that

imports

possibility
that
domestic
producers might not be able to
satisfy
the requirements of domestic consumers

and

'and

with

of

at the

petroleum exporttime comply
laws and the

same

conservation

request of the military for standby production capacity as a defense

measure^
But
when
imports

part of

solution

run

problem.

In

the

to

the

first

import

place,

Texas loses position in the

as

effective as a counterbalance to
expanding imports.
v
In the second

ducers

cannot

place, Texas prolong
stand
the!

strain of operating at 10% or 15%
below maximum efficient rates of

production. They have rising costs
to face and financial obligations
to meet. They need the income
from

their wells

strengthen
guard
a

in

their

to

maintain

ability

to

and

safe-

nation in the event that

our

world

emergency should result
loss of oil sources in the

the

uncertain Middle East,

And in the third place, adjustcapture

a

the domestic market that
producers could them-

domestic

ment of

production allowables to

domestic1 demand
tended

as

an

was

never

instrument to

in-

coun-

selves

satisfy without violation of

terbalance excessive imports. This

sound

conservation practices, that

practice

was

states

a

is another

story.

Evidence of this
.

KockyOIMountain
American

Institute,

as

adopted

conservation

designed to husband

,

Ih

DWriet

Petroleum

the

hav)e

Many

that

urged

that

wells

obvious that only

could

man

see a

a

a

duction
ap¬

the passage of Federal

Casper,

"Wyoming, April 8, 1954.




in

protect

secure

domestic

our resources

ground Waste.
are

some

market

obtained

*he natlonal 011 policy that

*1S

\J

Many people would like to be
helpful in solving this problem,
but

not

all

have

effective

ideas

be done.

They

about what should
are

like

tended

the

lady who at¬

young

first

aid class

night.
Later, driving home along a dark
a

.■

,

-

,

i

„

-

m,

reviewing

ner urst. aia

,

had

you more

Chamber

labor

Old
the

and

costs

vacations

of

benefits such

would

compare

That

oil

workers

fact that labor turnover in petrol¬

refining

is less than 1% a
manufacturing indus¬
tries generally the rate of turn¬
over
averages above 4%.
These,
eum

.

For

United States Bureau of
Labor Statistics figures.
Now, if oil workers

already

are

receiving
favorable
wages
and
benefit
payments, have stability
of employment, and are not dis¬

interest

interest

in

a

their

should

working

thfere

central union?

exists

is

clear

be

That

from

the

fact that reportedly 149 delegates
from 31 unions, purportedly rep¬

should

of
be

ma.lOr
included

interest
in

a

that

review

Feb.

15

to

discuss

merger

central organization.

ed

and

into

for such

I hope

consider whether

posed,
union

■1

they will

not any sup¬

or

advantages

about
union

a

from

such

a

preferable to their local

are

I do not conceive of
your or my

selfish

interests

being opposed

as

to the interests of oil workers. We
all have a mutual interest in the

happiness, contentment
being

well

and

of

employees and in the
productivity and profitability of
our
companies.
To further this
mutuality of interest, it is man¬

and

responsibility to dem¬

fairness,
consideration,
willingness to compensate

a

*

Questions for Managers in Oil

Industry

Now,

who have managerial
responsibilities in the oil indus¬
try should ask ourselves a few.
we

questions.

Are

best

to

effort

ers'

problems

them?

Are

allay

we

and

to

the

solve

best to

our

personal

our

work¬

help

doing

we

the

making

understand

frustrations

that

develop when workers feel
they are not receiving individual
recognition for their efforts? Have
been

we

should

conscientious

as

as

we

be

about taking care of
grievance matters that arise
from day to day?
Are we keep¬
ing workers informed through an
adequate
communications
pro¬
minor

gram?

Do

listen to what they

we

want to tell us?

Negative
such

face

to

answers

these

as

question*

provide

can

to

as

a

par¬

why, in the
steady em¬

of

high wages,
ployment, and favorable benefits,
some
employees might wish to
see
a
change in collective bar¬
gaining arrangements in this in¬
dustry.
It
all

seems

to

that

me

should

we

employers and

—

employees

alike—we should all make

fresh

a

appraisal of the subject of labormanagement

relations.

The

kind

of

thinking that was done in the
Thirties and the Forties is
already
outdated.
We
have
sufficient
knowledge of human relations at
our disposal to work out
methods
of

achieving a new relationship
on mutuality of Ihterest and
economic justice. The old system

based

based

force

on

and

conflict

is

rapidly

becoming obsolete.
Al¬
ready there is evidence that the
new

system is emerging; when it
fully into view both the
old-fashioned
union-hating em¬

comes

ployer and the old-fashioned

ployer-hating

union

will

em¬

be

a

thing of the past.
We
in
the
oil
industry have
long had a reputation for pioneer¬
ing in the field of industrial rela¬
tions.

If

it

I

could

would

have

be

that

relations

man

dustry.
We

.

.

We

mpve

are

in

an

variety

rewards
a

work
in¬

our

indeed very fortunate to

the

are

of
of

.

associated

offers
and

we

aspects

situations at all levels

be

wish

one

swiftly in improving the hu¬

more

that

part

industry that
challenges

of

this

one

does.

of the most fasci¬

nating business in the world. The
things that have been accomplish¬
ed /in the past are little more than
pointers to the even greater things

remaining to be accomplished in
the

futurue.

In

self-satisfaction

achievement in
the

even

addition

that
our

deeper

knowing that

we

to

comes

work,

we

late

our

of
an

fellowman.

you—as

self—on

I

be

an

being

fortunate

oilman.

a-

i

serv¬

I congratu¬

congratulate
so

have

making

essential contribution in the

ice of

the

from

satisfaction
are

a

If the claim¬

representation is correct,

decide

seriously

need

a

are

Threat of a National Labor Lnion resenting 212,400 oil industry em¬
ployees, met in Philadelphia on
In
Industry

There has been another devel-

long

actually exists.

now,

stable

ing conditions is reflected by the

cooperate.

*\T

have

employment and are not, by and
large, unhappy with their work¬

why

,

than favor¬

more

conditions,

—

as

purchase

ably with refinery workers.

about

.

such
Tax,

plans, insurance, and so on.
According to the statistics for
1951
(the latest available), the
per employee
cost of non-wage
benefits
averaged $644 annually
for all industry. The average was
$975 annually for petroleum re¬
finery workers.
That figure of
$975 was the highest of any of the
20 industrial categories listed in
the study. No comparable figures
were
given for oil- production
workers,
but
I
amsure
they

contented

work?"

vari¬

in

are

stock

and

you

busy holding .a lantern irfe this
manhole so my friend can see to

Com¬

of

required payments,
Age and Survivors

legally
as

give

industries. These costs include

ous

too,

But can't you see I'm

think

whether

tial explanation

costs of

wage

then, not knowing what else to
do,
began giving him artificial
respiration.
She
was
working
hard at it, when the man looked

"Look, lady, I don't know what
have in mind, and I'd like to

the

on

to show how large the non-

merce

month.

around and said:

of $85.38

to

and Chemical
Workers International Union will

and

34.4 hours work

wage

States

United

course in her mind as she did so.
^em1em_ e1rl1n.? ™_„j
_™>'
she loosed his tie and his belt and

average

statistics
on wages, but I can save time by
simply saying that oil refinery
and
production workers
ai;e
among the best paid employees in
industry.
They also receive very favor¬
able non-wage benefits. Statistics
based on a survey of 736 com¬
panies have been compiled by the

one

street, she saw a man lying face
°wn, on the side of the load, so
she stopped her car and ran back

Opment
familiar with

the

importers, the harder it will
be to dislodge them and reestab-

the

on

pro¬

an

weekly
I could

legislation

the

gas

average.

solution

by

some-

measure

below ground and to end above
I
All who

of

centage

a

day are so
hopeful

run

and natural

workers

paid

miners

very

long

re¬

hourly wage of $2.21
and earned $90.36 a week.
An¬
thracite coal miners, by way of
comparison, earned an average of
$2.48 an hour, but since they had
an
average
of only 29.3 hours
work a week, their weekly wage
came
to $72.51.
Bituminous coal
were

efforts

in this approach,
Some have endeavored to

an

weekly earnings for

Oil

employee*
rejection of

or

true worth.

$1.77 for workers in all
manufacturing
industries.
The

Crude

in the neigh¬

average

case

workers were $93.90
as
compared
with
$71.57 for
the
average manufacturing worker.

Others thus far appear to
have ignored them.

mar-

ket, she will become less and less

I

is
necessary for this purpose at the
present time.
We recognize the

ers

heeded

the

agement's

with

compared

as

oil

asked

onstrate

finery

peals.

_

long

clear

not

have

Coast

West

hour

all

the adoption
proposed Oil

de¬

average

the

on

production from
about
5,000 average Texas oil
ers and the
economic stability of
wells. Think of the implication of
oil
producing
states
will
be
those facts for a minute and judge "5!,_ {J1V"VI™* *vKr
for yourself the seriousness of the P
in attacking this problem
threat posed by imports.
v ,
r®A®y "
The situation is plain to seeA^rm^s n0 advantage to domestic
producers.
The bigger the per¬
sented

imports that supplant it?

could

the East Coast and another

became obvious to all.
the

cal every day. The restriction of
domestic wells cannot provide a

hapfe

corn-

.P°?

They have pointed out
that such protection is justified by
the national defense requirement
for a ready domestic oil industry.
And they have asserted that un¬
less
support is obtained, living
standards of oil production work¬

linejto be drawn between imports
thai supplement production and
is

importing

-

industry.

not supplant domestic production.
"•
The question arises, how is the

shojild
<

answer

to

designed to

tion, Middle East oil can undersell
domestic oil, particularly at re¬
fineries along the seaboard.
The problem grows more criti-

Ttie

1Tia(je

Deen maae x

to

They show that
petroleum refinery work¬

average

panies, requesting that they exer¬
restraint in the quantities of
their imports.
One company on

oil wells, the writing on the wall

;does she talk about?"
"That's

/

that
being

are

upon

readily available

are

hope

are

the average were paid $2.32

ers on
an

meantime, appeals have

borhood of 40 barrels

f -"Well," the judge asked, "what crude oil within sight of Texas
;

been

I

who

Statistics.

in 1953

cise

j

before, produced

ever

in the ground to

divorce. I can't stand

me a

the

In

the ground.

on

United
States refining capacity,
according to a report appearing in
"Oilgram" on Feb. 19.

the United States Bureau of

rom

Labor

transportation costs, so that domestic producers, might compete
on
a
cost basis with foreign oil.
That, of course, is highly desirable. But the producing cost advantages of wells that average
5.000 barrels a day in the Middle
East
over
proratable
domestic

wells than

to have

poured

felt

or

facts

The

producers

be made to reduce production and

gentleman said of his
wife when he appeared before a
.•"Jedge," he said, "I've just got

be

domestic

Domestic producers are

paradox.

more

if

strange

we

industry in recent years is the being threatened with disaster at
subject of oil imports.
I have the very time that they are settalked about this subject several
ting new records for enterprise,
times before, and I hope no one
industry, and achievement.
For
has had reason to say of me what the fact
is, in 1953 we drilled more
a

than

ruined

and

Perhaps

being under¬
by
imports.

from

industry

mined

is

is, because workers

mistreated, or
nied their rights. Is that the
in the oil industry?

rates, imports would not find such
ready access to available storage,
and they might be curtailed rather

not be

to

underpaid,

could operate at levels more near¬

to

try

required to

ly approaching maximum efficient

ac¬

not

1954.

of

folks

Lots of

for them

need

a

exist—that

me

long record

understand.

that

to

are

operated at peak rates con¬

and

crue

oil

measures

46,000 barrels a
As a result of this
great increase in the size of im¬
ports, many domestic wells can¬

many

the

another

obvious

seems

industry's

to

cause

It

counter

in plants accounting for an
estimated
58%
of
the
present

autonomy.

think that strong unions arise be¬

which

ting

p era

oil

cult

Counter Measures Needed

a

you

progressive leadership in matters
of
labor-management
relations,
the proposal to change
present
bargaining arrangements is diffi¬

;

a

rels

the

does unfortunately1 add

problems

and

your

major concern to
industry. ?

member¬

ship

To those who are familiar with

conceding the domestic market to imports without a fight,

day in 1946 to 1,049,700 barday in 1953, an increase of
178%. According to a recent Bu¬
reau
of Mines forecast,
imports

o

same

and

.

Up

industry to
solvethemany

of

matters

interested' unions fhave

em¬

president

But still, the fact remains, the
to
restrict
domestic' reduction
of
allowables
below
significantly below maxi- maximum
efficient
rates,
almum efficient rates to avoid the* though
sound in principle
and
waste.
valuable in practice as an internal

measure,

against

responsibility as API viceis to bring before you

my

wells

i

bias

no

I do discuss it because

alike.

ers

necessary

.*>..»

have

I

I favor col¬
lective bargaining, and I believe
that labor organizations, if they
are
properly conducted, can be
helpful in advancing the best in¬
terests of employees and employ¬

personally, and I believe they are
public servants
one can find anywhere.
n

That is the situation today. Im-

technical

Jno. G. Pew

that

three of the finest

Increase in Oil Imports

I

ployee organizations.

laws

I know those

a

begin to discuss this
subject, I want to make it clear

the

favor

of Texas.

ity

the

oil

I

conservation

organize
Before

trators of the conservation author¬

is apparent whenever it becomes

func-

helping

they continue

admiration for the three adminis¬

nation-wide union.

is that of

tion

whole.

a

of

(1) the question of oil imports; (2) the problem

Insti-

to

being made
central union in the

oil industry.

They

adoption
by all oil
producing states.
And I would
like to express my respect and

Among the major problems facing the petroleum industry, Mr.

The American Petroleum

and

—

been.

mestic producers and the country
as

a

have

measures

sigqifipant happenings., I refer

to the effort which is

measures

to serve—the best interests of do¬

Vice-President, American Petroleum Institute

workers to form

of

occurred

which

conservation

have served

Vice-President in Charge of Production, Sun Oil Company

Pew lists:

practices

adopted know how valuable

were

those

ByJNO. G. PEW*

|

.

the

b e fore

Thursday, April 22, 195*

my¬
as

to

Volume 179

Number 5318

The Commercial and Financial Chronicle

...

(1791)

19

1952

and
early 1953.
For one cals and petroleum and coal
prodthing, there is no price incentive, ucts—enjoy
fairly steady consumer
Rising prices are an inducement demand. Gasoline stocks

The Outlook for Nondurables

reached

build

to

By WILLIAM II. CHARTENER*

inventories, and

up

ex-

a

state

bullish

conditions to

The

term

"nondurables"

the

with

case

the

more

nience

than

of

Some

statistical

a
an

the

conve¬

accurate

descrip¬

products it embraces.

day

an

of

tobacco

until

It

the

and

got

rumor

expert c o mmission study-

durable

in g

ular growth product—babies. Tex¬
tiles and apparel might share this

ment statistics

feel suf-

may

benefit

also, except for the rise of
synthetic fibers.
/

f icient dis¬
comfort

the

over

this

Almost

generalization

any

"nondurable"

can

from

dustries bracketed

st

to

them

bet¬

a

made

W.

Chartener

H.

in¬

leading

one

producer of
decided they were

men's nylon sox

durable

that

,

in

there

little

was

manufacturing

Government
an

lines

to

The textil

inventories,

should

now

be

sus-

ed

tional

"Non-durable"

.

4.

fh.
e

in

in

the

nondurable

sector,

be

uncomfortable generalizations

lm-

goods in¬
subject to im¬

portant exceptions.

«:nmp

some

of

ions in

h

cbange
®

jn

industrial

of

ordered

overcoats

them.

have

investigators

enormous

cache of army

by

ago

years

remainder

The

of this year.

Federal

Industrial

Reserve

Index

of

Production, adjusted for
variation,
reached
its

seasonal

m

a

not

direction

industrial

industrial

to

Th

peak of 157 in

decline of 14%;

have fallen from

August to 135,

11%.
a

a

Durables

products

p.

\

Tires

manv

than

other

re-

agencies

far

more

serving

/

used by consumers

rather than

by other industries. For some, such

food,

as

tobacco,

beverages,

ap¬

parel, and certain petroleum and
coal products, there is a reliable
which

demand

consumer

cannot

deferred. There is still
a range
for variations and shifts
in
consumer
demand, however,
and within this range the nondurables can be keenly sensitive

long

be

the

to

and

income

Also,

consumers.

the whims of

portant nondurables,
chemicals

dustrial

im¬
in¬

very

some

such
and

as

paper-

closely keyed to gen¬
eral industrial activity.
board,

are

Another characteristic of most of

Reserve

be

durables

off

the year as a

about

15%

fices

only about 5%. This does
not allow for much change from
present levels

in either direction

during the rest of 1954.
durables and

been

plagued

spring to

_

of

por s

A?sodaUon ^

Amedcan

modern

shared

fense

with

spending
blame

tistical.

area

change

to

have

central

-

these industries is their heavy re¬

of

which

for

business decline.

on

(Par Value 1^

drop in de¬
most of'the sta¬
the

general

Price

to

per

Operating

of

$14,593,155

income applicable to the
stock was $1,531,736,

,

to

prices—such

more respon¬

material
those of food, nat¬

changes
as

in

raw

Quite

different

a

Manufacturers' sales fo

ural fibers and crude oil—than are

durables

the machinery

from

the

levels

while

the

sales

characteristic

third

A

the

most

of

able

industries.

goods

industries

standardized and
This

is

a

is

that

products of nondur¬
are

constant

are

fairly

easily stored.
invitation

to

situation

exists, however, in the sales pic¬
ture.

are

off

only
of

of

non-

about

last

5%

per

share

The
will

the

on

common

additional

spring,

durables

have

dropped

roughly
15%.
For
an
analysis of inventory figures (de¬
ficient as they are) to have much
meaning, they must be considered

inventory problems when

antici¬
pated high levels of demand fail

be

entitled to the quarterly
of 45
cents per share
payable July 1, 1954 to holders of
record June

Common

10, 1954.
stock

to

be

situation in nondurable goods has
a
far healthier appearance than

until

statement

securities

shares. Also
000

shares

ferred

outstanding

of

stock

$25

par

and

the

assurance

and

no

offer

to

funded debt.

Share)

Share

not yet effective.
No offer to buy or
purchase the securities will be accepted

registration statement has become effective.
that the proposed

offering will be made

that will be available for distribution

or

The
as

to

publication of this notice is
the

amount

no

of securities, if any,

by this firm.

Copies of the proposed form of prospectus

may

Finally, many—but by no means
all—of the nondurable goods in¬
dustries

enjoying

are

This is obviously

growth trends.
♦An

address

the Joint
cers

15,

Mr. Chartener before
of Savings Bank Offi¬
Brooklyn, N. Y., April

by

Meeting

Association,

persistent

1954.




at

in

this

way,

the

inventory

be obtained from:

Gearhart & Otis, Inci

Crerie &

74

Electric

Trinity Place, New York 6, N. Y.
WHiteball

that in durable goods, and it holds
out a better prospect for early re¬
covery

Please aend

in production.

This is not to say that nondur¬
ables are likely to shift suddenly
into

a

period of

mulation

similar

inventory
to

that

Name

Address

accu¬

of

late

me

a

copy

of the proposed form of Prospectus relating to Standard Uranium

Company

Building, Houston, Tex,

3-2900

Corporation.

are

340,-

value

pre¬

$18,000,000

covering these securities is

should be made

outstand¬

ing after this sale will be 791,017

in relation to sales figures. Looked

to materialize.

registration

,•

dividend

was organized on January 11, 1954, for the purpose of
producing, selling and exploring for uranium and related metals. This is the Company's
first public financing and there has hitherto been no market for the Common Stock.
As of March 9, 1954, the Company had outstanding 3,185,000 shares of Common Stock.

The

stock.

shares* offered

Standard Uranium Corporation

sell the

common

equal to $2.32

Corporation

the Public: $1.25 per

in¬

$8,314,404 in 1949 to
in 1953. In 1953 pet

manufacturers' inventories ap¬

through only relatively pears to have proceeded at a sig¬
manufacturing
processes nificant rate in both durables and
reaching
the
consumer. nondurables.

This makes them far
sive

some

working off

have

revenues

creased from

go

simple
before

materials,

The

a

ex¬

office

equipment throughout its system.

1,430,000 Shares of Common Stock

the

over

installed

automatic

IDENTIFYING STATEMENT

Standard Uranium

of¬

138,-

over

operating exchanges

by inventory

gradual reduction

a

liance

raw

central

compared with

pany

Medical

NEW OFFERING

com¬

000 stations five years
ago. Penin¬
sular believes it is the first com¬

u,

the

in

stations

nondurables

of inventories in recent monthshas

215,000
automatic

This is not an offer to sell these securities. They are subject to the
registration and prospectus
requirements of the Federal Securities Act. Information about the issuer, the securities, and
the circumstances of the offering is contained in the prospectus which must be
given to the buyer.

problems since last summer. The
change in the inventory picture—
from a high rate of accumulation
last

as

for

whole and nondur¬

ables off

have

the>

Index, in 1954 will prob¬
about 10% below 1953,

ably
with

Both

putting

wide

A

fuLL throu^r

are

over

through 43

nTnnfJt^Lv

tistical

thus

fina1iv

mUst watch not onlythe stock
market and the multitude of sta-

rubber

positions

in
Florida,, in¬
Tampa,
St.
Petersburg,
Clearwater, Lakeland, Sarasota,
Bradenton, Winter Haven, Plant
City, Bartow and Lake Wales. It

rl

baa .,ts

within the nondurable group, the

about

or

and

indlJt;frv

toll

communities

serves

tobappo

be

cluding

a shift in the
general
industrial

of

additional

100

pro-

w

placement sales, are tied to new
automobile
production.
Entirely

123,

textile

production.)

chemicals, fuels for

peak of 138 last May and has been
falling since July. It has dropped

use

in

will

.

been folIowed by

direct se
sense
e.

Paper, when used for containers,
is tied very closely to general industrial activity. The same is true
of

turn

a

sale

company' which has been
operating since 1901, serveS; about

duction just as frequently has not

products

consumer

the

The

-f

that while nondurables fell
from
apparel
a
industry
accounts
for
thanpeak of 123 last May to 113, hold¬ much of the demand for textiles. ™s' ^2?
mortar shells. Even food, properly
ing steady at that figure in recent The textile industry, in turn, is a
the haze
the toprocessed, can be fully as durable
months, for a decline of only 8%. major customer. of the chemical bacc0
companies would' just as
as its metal Container; and a "non¬
industry.
soon not see their own
particular
durable" paper container will pre¬
No Early Recovery
<
;
All tnese interindustry relation- brand of smoke blow away,
serve
it
quite as well in cold
For the two groups as a whole,
ships mean that nondurables —
storage.
there
is^nothing now on the hori¬ despite the general characteristic
zon
to indicate either any sub-' of
being consumer goods — must
Canadian Dealer Registers
Characteristics of "Non-durables"
stantial recovery before the end
rely on improvement in general
The products made by the non¬
In Pennsylvania
of this year or any appreciable business conditions to
bring them
durable goods industries, however,
further decline below present lev¬
back to 1953 levels.
On April 13, 1954, Gus H. Cordo have some fairly general char¬
els.
The magnitude of the busi¬
With the outstanding exceptions olis, sole proprietor of G. H. Coracteristics which distinguish them ness decline from last
year's peaks of apparel and tobacco, however, olis & Co. of Toronto, Ont., befrom durable goods. These charac¬
would require a very considerable the
industry
groups
producing came the first Canadian to be regteristics are of value in appraising
rise in the second half of this year more directly for consumers have istered as a Dealer in Securities in
the business outlook for the non¬ to
pull the year as a whole up to not suffered much of a decline. Pennsylvania.
Mr. Corolis' firm
durable goods industries.
last year's record business activity. The
groups where declines have
is also registered as a BrokerIn the first place, most of the On an annual basis industrial pro¬ been
relatively small — food and Dealer with the United States Seend products of these industries duction, measured by the Federal
beverages, paper, printing, chemi- curities & Exchange Commission.
supply

over-eager

•proved

officers
durable

the

however,

whicl^'are

of
a

dial
equipment to provide 144
additional toll circuits for nation¬
wide dialing.
*
:
;
*

Nevertheless,'

St

under¬

$12,600,000 in 1954. The

centers,

production

1Q1Q

being

pany's entire system, on nation¬
wide toll dialing, and installation
at various
exchanges of inter-toll

cyclical
cyclical

everv

every

about

of

A tuFn in
by the way,

production,

preceded
" e c e u e a

,

is

various exchanges; installation of
equipment
to
establish
nation¬
wide toll dialing at four service

sev_

duration

average

rate

shares

major projects include installation

in

auspice of an overdue turn
production cycle, which

textiie

thp
tne

from
irom

numer_

Textiles have the addi¬

an

addi¬

the

five

construction program
which calls for gross
expenditures

Consumers have

promo

of

at

Stanley
Coggeshall & Hicks.

Co. and

applied to

tW0 yeaFS in the Past'

industries
can

nnr<;plvp<?
ourselves

eronn„

the work-

recovery

offering

Proceeds

their

has had

»

,

^

^nH?viV?Mal
d vidual

s'ales

eral lines.

Goods Industries

p
some

con-

responsive to price reduc-

tions and

least—reasonably healthy.

„.J

aDDarel

tosearsly

int

these industries.

relative to durable goods

Individual

The

&

d

shares

stock

share for each

written by a group of investment
firms headed by
Morgan

encouraging signs at the retail

level

tamed by consumer demand which
remains

before

ing off of inventories and
ous

trim

nf
oi

,

Synthetic fibers are nondurables, but within the past few

found

many

in

breather

a

have been hard hit. But

which have been

levels,

curtailed

we

as

used.

future

duction

as

131,836

common

one

on
April 20, 1954.
rights will expire at 3:30 p.m.
(EDT) on May 5, 1954.

tinued expansion.,

have

durable

the

only

manu-

to

appear

frpp*

the two groups have fared some¬
long. what differently in the current
as the "durable" automobiles and
business decline, and they have
refrigerators in which they are somewhat different prospects for

so

stocks

non-

of

The

«!

■

are

nondurables, yet they last

weeks

.

to

tional

held of record
trends

stantial improvement. The small
dr°P in chemicals can be regarded

bi
,pretty T" levels. Proslightly ower sales ,adjVStep t0

t„

the

"nondurable

as

^

durables, in short, is that

that

effort to distinguish

an

from

regarding

dustries would

term.

Plastics

be

goods" in

come

with

ter

fa¬

e

r's defini¬

e

tion
up

W

Elsenhower s

\

.

Some

Have Fared

word

*n£reasm£ P°P~h™6

nnH

no

facturers'

at

of

use

the

share

,jiatinn

The inventory outlook for

How "Non-durable" Industries

departure

pf

Food and bever¬

benefit from that other pop¬

ages

govern¬

well.

suing to its common stockholders
rights to subscribe at $32 per

twu

vieWvf„C°iol>anl

true

was

around that this nondurable prod¬
uct might make its consumers less
as

speedy end to this prob-

a

lem.

a

J™ * ln

chemical

petroleum industries.

Peninsular Telephone Co. is is¬

season

widespread pessimism
among businessmen, there is also
durable
gr0UpS
growth
no
feeling evident that is com- ohnulri
fViJLodxro
parable to the wave of enthusiasm
coming months and

mi.

tually
tion

ac¬

for

the

there is

bring them back to 1953 levels, v
is

outlook

immediately ahead. While

months

goods" production and sales have fared better recently than
durable goods, but points out both "nondurable" and durable
goods industries must reply on improvement in general busi¬
ness

sales

will

traffic-jamming

bring

Another absent factor is

pnees.

Describing "nondurables" as goods used by consumers and
not generally by industries, Mr. Chartener finds "nondurable

Stock Underwritten

oversupply during the
winter months, but the
opening of

cept for such isolated annoyances
as
coffee prices, the outlook is the
for continuance of
fairly stable

Economist, Department of Economics
McGraw-Hill Publishing Company, Die.

Peninsular Telephone

of

of

20

The Commercial and Financial Chronicle

(1792)

Why Industrial Development
Revenue Bonds Should Be Taxed
bonds by municipalities to

revenue

afford subsidies and taxation exemption to

industries threatens
to destroy both our tax structure and the competitive free
enterprise system, Mr. Wolkstein urges Revenue Code be
amended to impose income taxation upon income derived from

-

In

.

,

statement

a

.

which

I

sub-

Ways, and Means
I

called

attention

economic

on

bonds of State and local govern-

the

to

growing

ments

the

competing unly with

and

another

offer¬

w
w.

Wolksteljl

and

buildings,
„

questionable

these

plans

by

existing
Code,

within the Internal Revenue

shall surely witness the

structures and our system

under-

taxing

country's

our

tax

halted

are

closing the tax loopholes

of com-

enterprise with the end

industrial

section

to

plans, a number of municipal governments in certain States have

extent

lure new industries
away from other States by means
of
constructing new plants for
them through the issuance of taxexempt
industrial
development
Kr^c
"'h,v'h
hrwif,R
revenue
bonds, which bonds are
not
backed
by the
full faith,
credit and taxing power of the
^

i

issuing government.
past three years New
England.
New York
and New
Jersey have lost a large number
the

moved to

that have

South, having been lured there

the unfair bait of donated
plants, real estate tax exemptions,
by

and nominal rentals.
laws

Our Federal

seriously criticize unfair com-

petition among private industries

in

interstate commerce;
present Federal inactually serve to
encourage the aforementioned unfair and highly questionable comengaged

however,

our

laws

tax

come

petition
State

among

individual

our

Governments

for

in-

new

dustry.
that I brought before the CommisInternal

of

Revenue

per-

taining to industrial development
bonds that

revenue

were

issued in

1952 by the
for

City of Florence, Ala.,
the bepefit of Sty Ion Corporain

tion

the

amount

of

$1,300,000,
the Commissioner issued a, ruling
that, under existing laws, the interest

on

such

any

the

used

to

any

substantial

by

nonpublic lessees for
manufacturing articles which do
not
pledge the full faith
and
credit of the issuing authority for
the payment of interest and principai
a public utility produc.

.

.

jng electricity or gas would not
be 'manufacturing articles,
Obligations issued for the acqui'

gition

improvement

or

though

bonds

revenue

was

minor

a

of

real

Government cannot continue

extend the privilege of income
tax exemption unto the interest

entire

portion

property

revenue

i

respectfully
the

Senate
to vote

nance

tion

274

of

This

is

used.

.

.

will prevent

a

upon

Revenue

Sec-

Code of

section of the code

manufacturer from

taking unfair advantage of his
competitors through these lower

operating costs and unfair tax deductions, resulting from his enjoying the benefits of the local
government's tax exemption.
I believe it is
necessary, how-

(a)

of

Such practice is in contra¬

vention of public policy.

roaining taxpayers to shoulder
inequitable

share

the

of

an

Federal

income tax burden.

(c) It violates the equal protec¬
tion

clauses

clauses

of

the

and

due

Federal

our

process

Constitu¬

tion.

(d) It

to encourage local

serves

governments

subsidize

to

private
at the expense'of other

industry

...

,

,

municipal governments and State
governments and other tax-paying
corporations.
In the event of a major economic depression, we shall prob-

ably witness
in

these

a

widespread default

industrial

development

bonds with an impairment of the credit of these local
and State governments,
revenue

bonds

revenue

full

before

the

in

testimony

my

House

Committee

on

faith,

of

power

these

credit

the

issuing

securities

jected

the

to

diction

of

protect

the

fact

pay income tax on the interest
which he received on these qiues-

of

such

revenue

industrial
bonds.

development
On Jan. 20, 1954,

Representative Reed, Chairman of
the House Committee on
Ways and
Means

announced

mittee

had

Revenue

agreed

Code

that

to

the

com-

amend

the

to-remove the

ex-

isting Federal income tax exemp———

w

cial

bonds—bonds

are no more

than

which

SEC

be

and

commer-

with
the
fictional
veneer of municipal obligations,
If the issuing city is in no way

financially

responsible for these
questionable bonds, then how can
we define them as governmental
obligations entitled ,to the privilege of income tax exemption?
The bondholder cannot look to

Washington, d. c., April 12, 1954.




1954,

the

will

financial

pay, to

stability

the

of

city,
the

has

already

is to

more

come.

need, for example,
active

against

fuijigus diseases, against the
smaller

life

viruses

and

pathogenic
neoplasms.

and

will, therefore, continue. New

The

social

"The

Selman A. Waksman

rapid

extensive

of

antibiotics,
and the consequent saving of hu¬
man
lives," Dr. Waksman stated,
"have given rise to a number of
new problems of an economic and
sociological nature. As diseases of
childhood have gradually disap¬
peared, as the average life of man
has
been
prolonged, as certain
diseases have been virtually elim¬
inated, new problems have risen.
These are of an occupational na¬
ture, problems of employment, of
old age, of insurance, and of a
similar nature. As mortality from
tuberculosis
has
been
relegated
from

the

and

search

proaches

problems.

use

first

secohd

or

to

will

present,

or

diseases

bidity

rate

hand, since the mor¬
has hardly been af¬

found

and

ap¬
new

which

will

act

upon

isms of action of antibiotics
upon

bacteria, "viruses, and other path¬
ogenic

organisms
may
help to
the still obscure aspects

clarify

of their mode of

action, and thus
possibly lead to the discovery, or
even to the
synthesis, of new and
better

chemotherapeutic agents.

\

"Cognizance must also be taken
of

On the other

be

susceptible at pres¬
ent to chemotherapy.
More pro¬
found knowledge of the
physio¬
logical and biochemical mechan¬

problems

disease.

antibiotics

new

not

many

of the elimination of this

for

discovered which will prove to be
better than those
we
know
at

the

place in the mortality list,
clinicians are beginning to
speak not only of the control but

against

screening procedures will be de¬
veloped. Many substances will be

tenth

the

economic

new

which

and

result

social

from

the

greater

saving of lives of the
growing population and from the
increase

in

the

average

of

age

survival of the human race."

Scientist Scores

Aiming at Technical
Military Superiority by Excess Secrecy

in

sub-

Professor

of

Louis

Columbia

University,

to

public

investing

order

have been

on

part of the

country.

an

P.

Hammett, JProfessor
precautions

says

of

Chemistry at
military secrecy

for

exaggerated scale, and it would be
playing

ostrich to

suppose

enemies

our

technically

are

incompetent.

Trust Co. of

In the course of

Georgia

Memorial Award

an

Award

for

distinguished

address at

a

General Meeting of the American
Chemical Society in Kansas City
March

on

27, Louis P. Hammett,

ATLANTA, Ga. —-The Robert
Strickland Agricultural Memorial

five

years

program

would

are

be

overlook

Chemistry

service

nuclear bomb

the

betrayal from whith
It

Professor of

at

in their

through

wholesale

equally

the

stupid

evidence

making

suffered

we

that

enormous

to

they-

expend-

Columbia

itures

to agriculture in Georgia during

University,

03 was Presented to the Citizens
rank> Y*en!-Sa' at.
annual meetn?g■ °t„tne Georgia Bankers qAsso-

contended

in the form of applied and
developmental research on actual

C"^rL0n'n-4.-

tain

-

.

.

.

r-»

that

bronze plaque depicting the

against

any

ating

select a* worthy student
Dooly County to receive the

against
betrayal in

Hammett

P.

the f

The award, including the schol¬

arship, is sponsored each
the Trust

year

by

Company of Georgia in
,

ment of

time.

precau-

tions
Louis

scholarship.
/

exagger-

,

_

,

,

.

,

"There

is

the state

have

now

V

-

,

'

'

can

we

Maltz

&

Co.,

members

of

the

should

precautions

against

betrayal

against the precautions, but

think

habit

their value is often

good

secrets

over-

common

if

of

to

research.

the

It

does

ones

preserve

own

enemy's

technical

New York

advances

be formed
offices -at

solete, especially if our own advance
is hampered by hysterical
rather than by wise enforcement
of precautions.

Stock Exchange, will
effective May 1, with
120
Broadway,
New
York City. Partners will be Al-

fred Greenwald, Exchange

mem-

makes

the

secrets

_

ber, Louis L. Maltz and William

Greenwald and Dorothy Maltz

Partners in Greenwald & Co.

Mr.
are

the

would

ob-

.

^

"It

certainly be

playing

part of the ostrich to suppose

that

our

enemies

are

technically

incompetent if, as Vice-President
Nixon
reported the other day,

they

man

As-

as

United

great

as

States,

a

how

think it will be before

years'

gained

advantage

from

they

wiil

treason

seem a

drop in the bucket of their
accomplishment in overtaking us?
"it

seems

clear

members

as

an(j

fortunate
seek

of

then

of

that

both

human

the

citizens

as

race

a

particularly

community

to support and

must

we

defend man's

right to the search for knowledge
to

foster

possible way

every

prosecuting the search.

search

man

erally
which
the

useful
are

basic, and

found

methods

In this

two
of

gen-

attack

usually classified
hand

one

plied

has

as

or

the other hand

on

ap-

developmental. These

or

terms which

on

fundamental

I

have

are

dis-

to

come

like

very much, partly because I
underestimating the po-1 think their use obscures a
more

of

tentialities
no

in

I do not in any sense

future.

argue

by multiplying our

you

five

0f

have

the

as

the

and

of

the

in

If,

engineers at twice

rate

unquestionable
suthere had not been

estimated because of the

Maltz & Co. Forming
N. Y. S. E. Firm

uate

betrayal

if

in

now

the

I

ur e.

military
past, and that we
maintain such superiority as

secrets

we

t

misappre-

common

hension," he said "that

,

during his life¬

a

u

and

potential weapons.

have

are

turn

from

ancj

long do

w e

wealth

sistant Defense Secretary Quarles
says, Russia is turning out grad-

weapons,

college of agri¬
culture in the University System
of Georgia. The Vienna bank will
in

our

in

power

enemies, b,y
superiority in

® nY,W era.
a?TCUioUnnn
progress m Georgia, and a, $2,000
scholarship to

military

superiority

i_^eh^iz_e"sla®a""j

I g

ef-

in our

forts to main-

.

the municipal government for se- J. Patterson, General Partners,
curity, his only collateral being and Morris S. Becker and Dorothy

utacturer

Dr.

protozoa,

juris-

in

bonds

arising

use,

.

is creating
new economic

taxing

.b,FiJ&c. Collttte"™th,e r(ental in™me which Ze m?."~ Z Maltz. liml'ted partners.
tion
of the Revenue Code of
274

of human

.

progress

made, but

There is great
for
antibiotics

saving and
prolongation

problems

expanded

added:

"Much

been

sequent

authority,

should

control

the

the

and

public financing problems

reality

22(b)(4) of the Rev-

con

the

and

their

Waksman

anti¬

treasonable

that Section

be amended to impose
income taxation upon the interest

:

biotics

biotics and the

periority

tionable

Code

of

use

attention."

from

increasing

*ancL President of the Trust Com-

Ways and Means, I recommended
enue

the

memory of the late Robert Strick-

stress

resulting

Concerning the future of anti¬

klyn
College on
April 6th that

not secured by

are

pany untl* hls death, and former
exempt from income tax unto the that are attached to industrial de- President of the Georgia Bankers
bondholder, despite the fact that velopment revenue bonds. Under Association.
Mr. Strickland was
the city in no way pledged its Section
274, a person owning such an outstanding leader in the agrii'aith, credit or taxing power.
bonds will not be compelled to cultural and industrial developAccordingly,

Public

that'the

the

hazards

our

my further opinion that,
since these industrial development'

our

health

is

It

the

public

in

Health Forum

and

(b) It amounts to discrimina¬
tory taxation, since it forces re-

Winner

from the development of resistant
strains come forward to require

Section 274 solves only part

ever/to
new

development"
bonds for the following

.

urge the members
Committee on Fi-

favorably

the

new

industrial

reasons:

the

of

The section applies only to rental
payments
paid
or
accrued
on
property acquired or improved
with the proceeds of any bonds
issued after Feb. 8, 1954."
0f

these

on

Prize

rec-

property may be availed of for
manufacturing purposes incidental
to the primary activity for which
the

Fed-

to

ognized
governmental
purposes
shall not be considered industrial
development revenue bonds even

1954.

In response to a recent test case

sioner

by this

property used principally for

Within the

industries

be

our

Nobel

of Broo

respectfully call to the atten-

pjnance Committee that

Micro¬

the

of taxation which the
Constitution vests in Congress."
j

of

\

fected, the question of sanatorium
beds, of ambulatory treatment, of

Medicine, told

exercise of

tion of the members of the Senate

Institute

the

recent

nongovern¬

the

Waksman, Chair¬

r

of insurance, along

age,

similar nature.

a

biology, of Rutgers University and

private

a

of

man

en¬

.

obligations issued
acquisition or improvement of real property which
js

to

.

revenue

bonds covered

are

finance

of

pressures,

development

The

to

managed

these

allows as a deductible expense
any rental payments made by a
private industrial firm to
"a
state, territory, possession of the
United States, or a political subdivision thereof, or the District of
Columbia, as payments for the use
or occupancy of property acquired
or improved by such State or territ0ry with the proceeds of any
bond.

exercises

Dr. Selman A.

power

Section 274 which dis-

new

a

Capitalism and
Socialism facing all of us. As part
of
these
income tax avoidance
State

of

of

.

leasing plants at nominal rentals,
partial tax exemptions.

and full or

petitive

their State

finally enacted by the House of
Representatives in February con¬
tains

business of

a

it

the

interfere

to

the Internal Revenue Code of 1954

of

of

serve

as

donations of

Unless

result

a

State

a

amendment to

muncipal government.

As

ing them spe¬
cial subsidies

avoidance

code would

an

followed

with the sovereignty of

for new indus¬

in the form

appears

was

effect that such

in

f air

result

the

that his
by
pressures from certain local and
State governmental officials to the

the

country

mining

where

cases

It

announcement

municipalities
across

we

such

government.

problems of employment, of old
with others of

functions, and the business

immune from

oral

and

States

land

in

r

full faith and credit of the issuing

our

individual

tries by

.

.

war

among

one

.

,

,

Aug. 6, 1953,

on

led to

though conducted by the State is

respect to the interest
1 received on future issues of these

mitted to the House Committee

in

nature

mental

with

tion

whenever

.

not

...

,.

T

,

.

gages

this class of securities.
.

»

proprietary purpose in competi¬

a

that

•

T

Dr. Selman A. Waksman, * Nobel Prize winner in Medicine,
points out prolongation of life through use of antibiotics has

t

private enter¬
prise. And, may I note that the
U. S. Supreme Court has ruled in
cases involving the States of New
York, South Carolina and Ohio

Certified Public Accountant, Newark, N. J.

Asserting the issuance of

Antibiotics and Social and Economic Problems

tion with taxpaying

By HARRY W. WOLKSTEIN*

]

manufacturer, and the industrial
property.
In issuing these bonds for the
purpose of constructing industrial
property, the city is engaging in

Thursday, April 22, 1954

...

gained

only

from

three

to

important

mostly

classification,

because

the

terms

but
have

become

entangled
with
unfortunate and unnecessary
judgments
0f value.
In their extreme form
these become the
snobbery of the
theorist

who

claims

to

be

happy if his discoveries turn
to

have

any

practical

value

un-

out
and

the contrary snobbery of the
practical man who claims that his

only

.

,

.

.

.

motlve in the search for knowl~
edge is dollars and cents."

Volume 179

Number 5318... The Commercial and Financial Chronicle

(1793)
-

sence

T. C. Henderson Co.

Investment Deadlock in Britain

NYSE Member Firm
MOINES,

Iowa —T.

C.

Dr.

Einzig ascribes the investment deadlock in Britain to pre¬
vailing high level of taxation, combined with the continued

Henderson & Co., Inc., established
1930 with offices in the Em¬

Building,

unofficial restraint

they

announce

have acquired

the

.

York

Stock

makes

ber

firm

Iowa.

LONDON,

— During
the
budget debate Mr.
Gaitskell, Chancellor of the Ex¬
chequer in the Labor Govern¬

in¬

fective

April
15, 1954.
The

of

Theodore

Mr.

T. C. Henderson

months

competitive sale

on

ground

embarked

.

taxation

expenditure

preted in

on

investment

Allied Member.

the

Stacey R.

in

private

son

Henderson announced

that

able to

amounted to

Moines

office

will

years,

for

the

past five
associated
with

be

negligible
amount, indi¬

T. C. Henderson &

additional

second floor of the

ing

to

take

facilities
Board

for

their

will

Room

booths

sultation

larger

with

private

their

library

will

facilities

also

A

be

in¬

When

use.

completed the
have one of the

are

will

company

con¬

largest and most modern broker¬
age offices in Iowa.
Associated

with

T.

C.

Hen¬

derson & Co., Inc. are: Eli A. Pe¬

Vice-President and

tersen,

Sales

'Manager; G. D. Kaufman of Cedar
Rapids, T. J. Landstorfer and K.
-C. Shreve, Vice-Presidents; O. D.
Penn,
Assistant
Vice-President;
Stacey R. Henderson, Secretary-

tive

Einzig

was

done

is not for

it

But

Socialists to blame either the gov¬

private enterprise for

or

the

fices

in Sioux

ton, Iowa.
of

the

branch

of¬

City and Burling¬

The Resident Manager

gioux City office is Karl

4Sauer, and Carl Kleinkopf is Resi¬
dent

Manager

of the Burlington

Account executives of the firm

Dudley,

Robert

Dickinson,

J. J.

in¬

The government and the
nationalized industries are spend¬
creases.

easy

Receptionist, all of Des Moines.
Messrs

Shreve

all members of the T.

flC. Henderson 20-year Club. Peter¬

slower turnover.
the

of

enterprise,
sidered

C.

sellers'

attached

investment
while

to

con¬

was

in

spite of
dividend re¬

and

Plambeck, veteran

se¬

The

series P

that,

to par,

prices

to

halt.

year,

It ceased to be safe
that

sume

rise.

prices

to

as¬

possibility of
a relapse in the price level had to
be
envisaged.
In
the
circum¬
stances
high taxation and
the

vest.

of

low

dividends'

level

the

par,

continue

will

case.,

reduced

inducement

at

an

to
to

a

in¬

Since there was, to say the

servative

T. C.

Henderson„& Co., Inc., will

continue to provide investors with
every

facility for dealing in stocks

and bonds listed

exchanges
an

as

well

over-the-counter markets.

The

firm will also continue its aggres¬
sive

distribution

of

tual Fund Shares

as

from

the

Taxation
than

Socialist
is

under

Government.

ing

well

pro¬

Public

corporations.




a

time when the

re¬

viving German industry is receiv¬

Mu¬

as

only

the

British

taxation, at

leading

viding the capital needs of smaller
Iowa

failed

completely to reverse the
anti-Capitalist attitude inherited

ment.

as

has

almost

slightly lower
previous govern¬
industry remains
those dealt
gravely handicapped by excessive

all the major

on

Government

an

substantial

tax

reductions.

expenditure is running at

even

higher level than under

the Socialists.

the

&

a

Merle-Smith;

Bear, Stearns & Co.; Dick

Weeks;

construc¬

bonds

Wm.

&

The

Co.;

Hornblower

E.

Pollock

Garrett &

acher &

den,

Milwaukee

Mullaney,

Robert

subject

are

100.60%

Co.;

Socialist

rate

Wells

government

from

&

Co.;

Mellor Director

to

W.
a

C.

made

pub¬

Langley
a

&

Co.,

has

of

electric

distribution

and

sale

Investment

vestment trust.

in 18 counties

energy

International

go

the

The Cleveland Electric

restoring

Illuminating Company
Public Invitation for Bids for the Purchase of

$20,000,000 Principal Amount First Mortgage Bonds,
—

The Cleveland Electric

reasonably expect

cumstances would be through a
resumption of non-stop inflation.
But in this respect at any rate the
government has departed from the
policy of its predecessor. Inflation

in the Statement referred

which

way

United

ment

and how it
ness

There has been

no

of

the

knowing

may

likely to move,
is likely to affect busi¬

will be available

Cleveland 1, Ohio,

change"

economic

view

held

is

his

away

that,

anything

he should have raised
and

reduced

expects

the

others.

on

The

Chancellor

to

at 11:00 A.M.,

the Company
subsidiary contained in the Registration State¬
ment and
Prospectus and the Company's invitation
for bids. All prospective bidders are invited to be
present at
Dated:

^uch meeting.

April 21, 1954.

Mr.

The Cleveland Electric Illuminating Company,

balance,

some

Public Square,

April 28, 1954,

and its

The

if

even

Room 710, 75

on

them the information with
respect to

Butler felt he could not afford to

give

at

Daylight Saving Time, to meet with the
prospective bidders for the purpose of reviewing with

"no

program.

in said State¬

Eastern

burgh
by-election
which
took
place two days after the budget
statement.
Quarter of a century
ago Mr. Baldwin lost a general
of

to

be examined and copies of such documents
be obtained at the office of the Secretary of the

Company, 75 Public Square, Cleveland 1, Ohio.
Officers and representatives of the
Company, coun¬
sel for the Company, counsel for the successful bidders
and representatives of the auditors for the
Company

Rather

Socialist vote at the Edin¬

because

Relating to Bids for
April 21, 1954, and

ment, may

is

election

of Terms and Conditions

all other relevant documents referred

outlook.

conditions in Britain.

a

the Purchase of said Bonds dated

business trend in. the

States

of the official Prospectus. Bids will be considered

including the filing of
questionnaires. Copies of such Prospectus^ of a State¬

why Mr. Butler

of

the accept¬

Statement herein referred to,

decided in favor of his unpopular
"no change" budget is the uncer¬

means

to

bid, the bidder will be furnished with

only from bidders who have received copies of such
Prospectus and only if made in accordance with and
subject to the terms and conditions set forth in the

increase the purchasing power of
producers and consumers, leading
to a rise in prices.

no

below. Prior

of any

copy

sumption. Hence its reluctance to

is

to

ance

has been halted, and the govern¬
ment aims at preventing its re¬

There

of

an issue of $20,000,000
principal amount of
Mortgage Bonds,—% Series due 1989, bear¬
ing interest from May 1, 1954. Such bids will he re¬
ceived by the Company at Room 710, 75 Public
Square, Cleveland 1, Ohio, up to 12 Noon, Eastern
Daylight Saving Time, on May 4, 1954, or on such
later date as may be fixed by the
Company as provided

amount

investment to increase in the cir¬

American

an

its First

pointment in the country. Taxa¬
a prohibitive level.
only way in which the gov¬

the

Illuminating Company,

corporation (hereinafter called the "Company"),
hereby invites bids for the purchase of the entire

The

of

% Series Due 1989

Ohio

tion remains at

tainty

been

Director of the Second Ca¬

Company, Limited, closed end in¬

expected to make

reason

*

Geoffrey R. Mellor, partner of

nadian

The complete absence of
reductions, in spite of the im¬
provement of the general situa¬
tion, has caused widespread disap¬

Another

Fauset,

production,

future.

could

Co.;

lic utility company engaged in the

tax

ernment

&

Van

Co.

pres¬

in

and

&

Co.,

Sons; Schwab-

further

even

&

Co.; Thomas & Co.; Asp-

Robinson

Steele &

'

West Penn Power Co. is

as

proximately $2,000,000.

participating in the offer¬

are:

plus accrued interest in each

least, a
possibility
that
losses than risk
doing the wrong thing,
might be incurred, or at any rate Mr. Butler
preferred to do noth¬
Jilanager of the statistical depart¬ profits might decline materially,
ing. By this he earned the praise
ment. T. C. Henderson & Co., Inc., private enterprise no longer con¬
of economists who think that from
sidered the level of taxed profits
a theoretical
.manages the investment portfolio
point of view he was
and dividends sufficiently high to
right. But from the point of view
■of Supervised Shares, Inc., Iowa's
make it worth while to spend on
of
political psychology he was
•<only mutual investment company, expansion of plant.
certainly wrong. This is already
founded in 1932 with assets of ap¬
The position is that the Con¬ indicated
by the striking increase
analyst,

curity

Also

in*

net

$10,410,193.

and at special redemption

conditions in which private enter¬

would continue

Indeed the

maintenance

consolidated

and

was

ing

at

be applied

receding from

grant tax concessions which would

During the last

minimum

and Shreve in 1933.

Carl

a

reassuring

Owing to the re¬
risk

worth

joined the firm in 1943, Kauf¬ unduly

man

the

had

profit, owing to the rise in prices.
Error of judgment, or bad luck,
merely meant smaller profits or

to

Kaufman, Petersen and

are

producers

In

feeling that, whatever they may
produce it would be sold at a

a

sen

they

720,679
come

the

on

elec¬

Inc.;

much difference in the immediate

So

industrial

Tuesday

consolidated

year,

they themselves would have
if they continued to hold of¬

in itself it is not

was

For

previous

and
consolidated
$10,845,539.
In the

on

extension of existing plant.

market

on

of

$62,434,196

consoli¬
revenues

tric operating revenues were $57,-

bonds,
1984,

group

had

Alstyne, Noel & Co.; Heller, Bruce

money.

for them to embark

the

the company

electric operating

net income of

interest,

Award

by

won

country has effectively prevented
the

of

and

proceeds from the financ¬

It is
prise feels justified in committing
ambi¬ itself to investment on a
large
tious plans of investment without
scale.
regard to the degree to which
This explains to a large degree
profits are likely to justify the
Mr. Butler's
"standstill" budget.
cost. Private firms, on the other
Even though the new "investment
hand, have to pay attention to the
allowance" it contains may make
prospective yield of the amounts
to be spent on new plant or the some difference in the long run,
taxpayers'

the

ing

however,
the rising trend of prices came to
Hol-

lingsworth and Mrs. June Ainley,

respects

any

dividend

on

dated

to redemption at regular redemp¬
tion prices ranging from 103.50%

government
Conserva¬

Parliament

Kelly,

Richard

were

irrespec¬

Government

in

restraint

gone

For the year 1953,
its subsidiaries

and

tion program of the company and
its subsidiaries.

less favor¬

without responsibility
they relinquished office in
1951, the Socialists are forcing the
many

1,

accrued

company, will
toward the cost of

power

Conservative

of the company

the

since

in

revenues

derived from the sale of elec¬

or

At

official

Beall, Dubuque; John high taxation
Chariton; Lester H. straint.

Flower, John Hunt,

ing

central

In

ing, together with other funds of

The difference is that, hav¬

sure

combined with the continued un¬

James

-are:

the

fice.

duction

•office.

whether

and

2.975%.

was

Net

inter¬

now

control

prevailing high level of taxation,

tation.

has

company

even

than

could not go wrong.

The

are

a sense

inadequacy of private invest¬
For it is entirely due to the

ment.

long as non-stop inflation
proceeding there was a strong
Treasurer; E. P. Kearns, Assist¬ inducement to invest, in spite of
ant Secretary, and Helen Walker, high taxation and dividend limi¬
Assistant Treasurer.

purposes

effective

of

tive.

ized industries.

ernment

drive

a

in office is Socialist

by the government or by national¬

ac¬

clients.

stalled for their clients'
these

and

Dr. Paul

the investment

a

individual

officers

executives for

count

larger

include

with

their

the

on

Empire Build¬
of

care

which

Co., Inc. has

space

on

enterprise than they

in

are

erating
are

bid of 100.10%.

given universal suffrage and over¬
full employment, such is the bal¬
ance of power that the Socialists

them, effective May 3, 1954, as
Manager of the Listed Securities cating virtual
stagnation.
Department.
leased

actually

The truth of the matter is

£14,000,000
only. It is a

Most of

authorities

issue

three years ago.

industry

Frank Nowlin, Resident Manager
of Thomson & McKinnon's Des

committed

reinforcing
the taxation rules adopted against
businessmen by the Socialist Gov¬
ernment.
Expenses allowable for

the

year

had

the

Co. Inc.

mortgage

yield

total capital

C.

is

first

to

servatives

&

3%, due April

selves..;, The cost of social services
continues to rise.v During recent

past

Henderson, and his
Henderson

Co.

P,

100.50%

that in the

in

name

the

is

series

drive to which the Con¬

at

ernment

m e m-

bership

Power

far of the much-heralded

so

economy

them¬

the
,

sign

re¬

associates yesterday (April 21) of¬
fered
$12,000,000 West Penn

cized the gov-

membership
e

Halsey, Stuart

conditions

ment, criti¬

The

became

Eng.

the

of

course

in

uncertainty of the

It may or may not be good

Halsey, Stuart Group
Offer Utility Bonds

encouraging private investment.

them the only
resident mem¬

north

and

addition, the
company operates its Lake Lynn
hydro-electric station in West Vir¬
ginia. Substantially all of the op¬

Points out taxation

vented the Conservative Government from restoring

Exchange

western

Pennsylvania.

4

t

tricity.

only slightly lower than under the previous So¬
cialist Government, while public expenditure is running at a
higher level. Holds Socialist pressure in Parliament has pre¬

New

which

dividend increases.

of

economics, but it is certainly bad
politics.

in Britain is

membership

-on

on

noteworthy changes

the

of

or

American business outlook—is

By PAUL EINZIG

in

a

ists

sented.

DES

pire

of any

—whether for fear of the Social¬

21
;

By Elmer L. Lindseth,

taxes

public

•

make

changes in his budget, and the ab¬

n

President

22

Financial Chronicle

The Commercial and

(1794)

Thursday, April 22, 1954

...

"*

\
reduced, but many countries res-

Improvement in the International
Monetary Situation
By IVAR ROOTII*

strict
lar

J

in international mone¬

the end of World War II. Stresses wide¬

cast

1953

was

a

in which the
in a more sat¬
than at any time

year

isfactory
since

state

the end of the

World

war.

trade recover¬

its

from

ed

temporary decline during

i

vol¬

in

The

same as

in

where

by

the

boom

Korean

world

raised
trade

to

a

high

very

level. The bal¬

.*

of

any

other postwar

S.

U.

tenance

ous

position

payments

of

views

the

A
the

opportunity

fruitful

a

actual

on

economic

suffer

exchange

and

policies..

possible

Some

the

of

The

limit

might

of

usefulness

waivers

are

Articles

•

rencies has

do not

the

of

of

the

care

ments of
never

want

warrants greater emphasis here at

new

a

In; the calendar year

ECOSOC.
sions

and

some¬

other

and

to 21 member countries,

with other inter¬

cooperated

agencies

four others.
11

mis^

own

consultations

national

seriously
the

for

purposes

to

were

in

missions

Of these 25

countries

to

missions,
in

Latin

America, five to countries in the
Far East, five in the Middle East

Fund

and

Africa

The

and

four

questions

in

Europe.
in such

covered

contacts involved such matters

as

exchange control policy and ad¬
ministration; central bank poli¬
cies, administration and organiza¬

provided for in the
Agreement to
take
exceptional require¬

tion; and improvements in statis¬
tics.

In

addition

to

mis¬

these

sions, Mr. Cochran has in the past

member, but they had

before been

detail in the reports which
have before you, and perhaps

great
you

helping to solve the exchange
problems of its members. How¬
ever, both in the transaction with
Turkey and in the stand-by facil¬
ities recently granted to Peru, the
Fund waived this limitation. Such

part

future, I

has

would

period

of
service
to
through j. its
technical

1953, the Fund sent its

transactions
Fear

detail about the

more

program

missions., This is not covered in

in

a

the
last
eight years the rapid
for the main cur¬
progress of the U. S. economy has
improved.
In a num¬ provided a strong upward stimu¬
ber of countries one step after an¬
lus to the world economy.
With
other is being taken to increase
.respect to developments in the
the area of effective convertibil¬
immediate

convertibility

our

directions.

month

played by the U. S. is
indeed uniquely important.
Over

the outlook for the attainment of

this connection I would like

members

that the lim¬
itation of drawings by any mem¬
ber to 25% of its quota in a 12-

depression which would
undoubtedly have serious conse¬
quences for the rest of the world.

year.

In

times been expressed

recurrent

fears that the U. S. economy
•

of

some

visited

17

of

governments

in

Latin

year

granted by the

ity. Discrimination in trade is be¬ to make any forecast; but I do Fund.
ing reduced. . A more extensive want to stress the importance of
The credit of $12.5 million
of foreign-held balances has
strengthened and during the year
the
intention expressed
by the granted for a year to Peril in Feb¬
there was a noticeable improve¬ been permitted.
Some interna¬ U. S. Government to act rapidly
ruary 1954 for the stabilization of
commodity markets have and
ment
in
the reserves of
many tional
decisively should the situa¬ its currency was the first Fund
countries.
In the aggregate, and been reopened. In many quarters tion tend to deteriorate further.
stand-by arrangement for a peri¬
excluding the United States, the active thought is being given to The determination of the U. S. od
longer than six months and
gold and dollar reserves of coun¬ policies, which should ensure a Government, as that of the gov¬ the first with a member with a
tries outside the Soviet bloc in¬ still closer approach to converti¬ ernments of
many other countries,
fluctuating exchange rate.
With
creased by the equivalent of ap¬ bility.
Recently a number of im¬ to take the necessary anti-depres¬
it was combined a $12.5 million
proximately $2.5 billion, or by portant documents have drawn at¬ sion measures should justify the stabilization credit from the U. S.
about 12%.
Most areas shared in tention to the movement toward
"general expectation that, though -Treasury and a $5 million credit
this improvement, although there international equilibrium and to some
individual
countries
may
by a U. S. private bank.
As a re¬
the possibility of action toward
were many individual exceptions.
have special difficulties of their sult of these transactions Peru has
In some countries the improve¬ the further liberalization of trade
now, there will be no major in¬ been
given access to resources
and exchanges.
ment was insignificant, and in a
For instance, the
terruption in the growth of the which, together with the internal
few there was a sizable depletion communique of the recent eco¬ world
economy.
measures that are planned, should
of
official
reserves
during the nomic conference of the British
While assistance from the United permit the maintenance of Peru's
year.
The ratio of total reserves Commonwealth stated: "The grow¬
States was still an important fac¬ almost complete freedom from re¬
to imports
has significantly in¬ ing confidence in sterling and in¬
strictions on trade and payments.
tor in the world payments posi¬
creased in most countries which,
creasing strength and flexibility
tion during the past year, the im¬
In the past few years an in¬
in the report submitted by the of the economies of the sterling
provement that was then recorded creasing proportion of our trans¬
Fund to ECOSOC last year, area countries have enabled them
reflected in the main a decline in actions has been with the less de¬
showed a ratio of less than 50%. to make progress in
the move
inflationary pressures in deficit veloped countries.
The Fund's
Reserves in the form of gold and towards expanding trade and free¬
countries.
More and more coun¬ financial assistance to these coun¬
dollars - have similarly improved ing currencies."
The Annual Re¬
tries are now using the instru¬ tries does not mean that its re¬
during the last year for almost port of the Board of Governors of
ments of fiscal and monetary con¬
sources are to be used to finance
Federal Reserve
all the countries where such re¬ the
System in
trol to steer as closely as possible
their development programs. For
serves
were
particularly low at the United States stated: '"Most re¬
a course
that will ensure both a that
purpose,
long-term finance
markable has been the widespread
the end of 1951.
high level of employment and is required and, if domestic re¬
evidence of growing belief in the
The widespread improvement in
balance of payments equilibrium. sources are
inadequate, it may be
gold and dollar reserves occurred possibility of linking together the
In spite of these achievements, made available by the IBRD, the
free world countries in a broad¬
mainly as the net result of trans¬
it cannot be said that the financial \ Export-Import Bank, or by priactions
with the United States. ened market economy with fewer
investors.
When
and payments, situation is satis- vate
attempts
The aggregate amount of dollars barriers,, to trade and investment."
The gen¬ are made to push ahead with de¬
And in its last Annual Report, the factory in all countries.
supplied by the United States was
eral situation, however, is now velopment more rapidly than is
about $20 billion: $12 billion for National Bank of Belgium said:
with ^the limited
"Within the limits of its compe¬ ^ quite unlike that of the first years consistent
reimports of goods, $6 billion for in¬
after
the
war.
The
payments sources, domestic or foreign,
visibles (which includes large pay¬ tence, the Bank thinks it has suc¬
available to the country, inflation¬
ceeded during the past few years problems that now present them¬
ments by the U. S. Government
in creating the preliminary con¬ selves are primarily the problems ary pressures result.
But even
abroad) and capital movements,
of individual countries.
In these when no such attempt is made, de¬
and $2 billion for economic aid. ditions essential for the establish¬
'countries, for one reason or an¬ velopment sometimes leads to
The
large supplies of military ment, on the basis of a fixed rate
of exchange, of genuine converti¬ other— the
demand for imports temporary balance of payments
•equipment (over $4 billion) which
difficulties.
The Fund is always
the U. S. supplies to foreign coun¬ bility of the Belgian franc, imply¬ substantially exceeds the amounts
available
from export earnings. interested in the problems of all
ing the liberalization and conse¬
tries are
not included
of

ance

is

for

afforded
of

of convertibility.

ground has been broken in vari¬

middle of

been

„

for

developed so as to be more
effective especially in connection
with the achievement and maim-

Since the end of the

have

there

been established on

been

In

the

into
experimental basis

permanent basis.
The fa¬
stand-by credits have

more

cilities

tendency for U. S.

since

on an

1952 have

;

'

-

recent

the

war

result of these developments,

a

-

last summer.

position

duction every¬ *As

Rooth

The

in

that

the

discriminatory systems.
important aspect of

Fund's

a

imports to decline has been caused
by a reduction of general activity

tries in Western Europe.

trade and pro¬

ap¬

proximately

Ivar

States.

coun¬

1951, when the
fillip given to

was

simplifi¬

a

further

consultations

to speak in

in

United

the

with

transactions

generally improved reserve
in 1953 did not result
from new or tighter restrictions.
On the contrary, it reflected an
international
financial
position
n'lore nearly in equilibrium than

Its

1952.
ume

and

led to

relaxation of restrictive

or

operation

gold and dollar holdings in their

premium above the
U. S. $35 an ounce.
Gold sales by the U. S. S. R. also
added, toward the end of the year,
of certain

cation

by credits that had been put

foreign countries as a
whole from adding further to their

negligible

reserves

(Brazil,

have

sultations

of resources and on stand¬

use

on

prevent

purchases of gold, expressed
S. dollars, show now only

the

various elements

imports need not in 1954

of U. S.

official price of

to

these

how

in the present year.
In view, however, of the high rate
of reserve accumulation in 1953,
even
a
somewhat reduced level

U.

a

Chile
and Bolivia), two in Europe (Fin¬
land and Turkey) and one in Asia

will develop

Tells of role now being played
by the International Monetary Fund in improving world econ¬
omy, and discussing relations between the International Mone¬
tary Fund and the United Nations.

throughout the trading world.

world economy was

dollars

the United
Fund's financial transactions with
States of goods and services to be
(Japan). In general, the policies members have developed out of
used by U. S. and associated forces
our
consultations with them.
It
—continues at a high level, and that govern the use of the Fund's
is our expectation that the ex¬
economic aid by the United States, resources have been more fully
while reduced,- was still an im¬ developed, and the Fund has thus perience gained through consul¬
tations will help the Fund to play
portant element last year.
U. S. gradually become better equipped
a constructive role in
to assist members that are faced
assisting the
imports remained high in 1953.
with temporary balance of pay¬ efforts of members to maintain or
They are somewhat lower now.
ments
difficulties.
The policies establish convertibility.
It is, of course, not posible to fore¬

spread improvement in gold and dollar reserves, and lists fac¬
tors that are leading to a more favorable payments situation

vate

also re¬

and

America

Latin

in

outside

purchases

tary reserves and the balance of payments situation, and holds
in 1953 the world economy was in a more satisfactory state
than at any time since

position. * U.. S". military ex¬

penditure abroad—including such
items as troop expenditure and

Fund

World Fund executive reviews progress

in

gold

more

through repurchases ($168 mil¬
lion) than in any previous year.
The Fund's sales of exchange in
1953 involved six members, three

imports from the dol¬
order to protect their

some

area

dollar

Chairman of the Board and Managing Director
International Monetary

year

ceived

We

1947.

except

crimination has on the whole been

member

our

America,
I have been in

Asia and Europe.
member countries

a

great many countries in 1953 was

four

use

America

in

1954;

ary

South

in

January, and

and

hope

we

Febru¬

to

make

visits to many more members be¬
fore the end of the year.
It may be of interest to you to
see one of the published
reports of
j

a

Fund mission—that to India, en"Economic Development

titled

with Stability."
I will ask the
Secretary to distribute copies to

shortly.

you

You will understand

that the nature of
member
often

allow

not

In this
Indian Gov¬

the

believed

ernment

does

publicity.

however,

case,

work with

our

governments

that

those

in¬

.

,

terested in
should

sis

-

'

•

in

figures.

Out

of

this

$20

these

billion,

countries found it possible to use
about $2 billion to strengthen their
Of

reserves.

this, about half

quently the expansion of interna¬ 'The most frequent reasons are in¬
flation and reduced demand for
tional trade."
Factors in More

was

balances

the

U.

kept on deposit in
by foreign monetary

S.

Several
role in

Furthermore, official gold stocks
a

substantial portion

of

gold

new

production, as the de¬
gold by private hoarders
throughout the world declined.

mand for

This

fall

dpcline
in

the

markets.
*A
;

|

reflected

in

a

price of gold in free

The prices paid for pri-

statement

Economic
United

was

of

and

Nations,

Mr.

Social

New

Rooth

Council

York

12* 1954.




City,

before
of

the

factors

tion.
in

Fund has

have

played a
the favorable development

of the payments and reserve

authorities.

received

Favorable

Payments Situation

acquired in the form of gold from
United States, the other half
appearing as an increase bf dol¬

the

lar

primary products in export mar¬
kets.
In all these problems the

As

their

a

posi¬

result of improvements

production,

agricultural

other countries have been able to

rely less

on

U.

was

of

the

one

supplies;* this

S.

similar
U.

S.

the

reasons

exports

fallen.

last

exports

of

year.

•

demand

coal

has

There are, however,

for

other

temporary factors the disappear¬
ance
a

of which would

dollar

gap,

and

should

like

to

April
I

discussed in the committee.

again create

some

of .these

mention.

'Part

Dis¬

propriate

in giving not

and

balance

to

steps

its

consult every year
with the Fund.
During 1952 and

Monetary
this

With
nomic

ground,

I

may

part played
situation.-

showed

brief

trends in

an

Fund
sketch

1953
now

as

turn

by the Fund

Our

activities

increase

over

We sold more
($230 million) than in

years.

of
a

eco¬

back¬

to

the

1953

we

to

have

been

almost

con¬

stantly engaged in these consul¬
tations, which have covered more
than
very

40

member

large part

of

countries.
our

A

work has

in this
in 1953

been centered around these activ¬

recent

staff missions to the countries and

exchange
any other

ities,
visits

and

by

it

has

country

to the Fund.

involved

both

representatives

Some of these

con¬

development plans

available

financial

our

It

this analy¬
economic

and

has

itself

pub¬

mission's report.

Fund-UN Relations

Finally, there are two matters
involving Fund-UN relations
which

I

First,

at

should

its

ECOSOC
tions
and

like

to

16th

made

of

touch

Session

certain

regarding

content

the

on.

the

sugges¬

future

form

the

reports of the
specialized agencies.
While I
recognize that these suggestions
.

were

directed

agencies

principally to, those
prepare
special

which

reports for the Council, we have
nevertheless
eration to

given
them, as

close
we

consid¬

will to the

remarks

made on this subject in
opening days of this current

the

session.

Then, at the 15th* Session of the
Council the Fund, amongst others,
requested to look into the
question of possible discrimination

was

in the field of transport insurance.
We are doing so, in consultation
with

members.

our

quiries

have

pleted.

economy.

obligation

Played by International

For
also

members

only advice, but financial assist¬
ance when a member is taking ap¬

ing the problems raised by sharp
In 1953, as in other recent years,
fluctuations in the earnings of raw .the Fund's
opportunities for use¬
material exporters.
I shall, how¬ ful contacts with its members
ever, not toucjr upon them further have
steadily grown.
Members
today as they have been discussed that continue exchange restric¬
at a previous meeting and will be
tions and discriminations have an

important

most

factors in the decline of U. S. agri¬
cultural

direct interest includ¬

a

tits

its

of

lished

-

>

have

implications.

•

,

its

ficient

not

There

is,

evidence

But

yet
as

to

our

been

yet,

en¬

com¬

insuf¬

indicate

whether such discriminations are,
in

fact, significant factors in world

trade.

Before next year we hope
benefit of further in¬

to have the

formation

on this from GATT and
from nongovernmental sources.

Before closing I wish to record
appreciation of the close and
pleasant relationship that exists
our

between the Secretariat of U. N.
and the Fund staff. We have
many
tasks in common.
Both at head¬

quarters and in the regional sec¬
we
have found great
friendliness and full cooperation.

retariats,
We

in

have

return.

tried

to

offer the

same

Volume 179

Number 5318

...

The Commercial and Financial Chronicle

(1795)

P.G.&E. SERVES 46 OF CALIFORNIA'S

23

58 COUNTIES

NU SHASTA

LAKE

TAHOtP

-V
P.EATH

VAtUV

Wdah>\

Preliminary steps were taken toward acquisi¬
tion, by an exchange of stock, of Pacific Public
Service

Company. Its principal subsidiary,
Company,
serves
gas and electricity in areas within and
contiguous to our operating area.
Coast Counties Gas and Electric

The

expected improvement in

our

earnings

materialized, net earnings for the

common

stock

amounting to $3.12

with $2.52 in the
upon

the

average

share, compared
both based
number of common share3
a

previous

year,

outstanding in the respective periods.

$ 49,066,000

$ 46,688,000

7,011,000

10,166,000

65,503,000

54,957,000

10,968,000

8,497,000

22,179,000

20,537,000

5,629,000

3,805,000

35,172,000

32,700,000

91,309,000

73,324,000

17,783,000

16,740,000

15,722,000

of

Shares

Earnings Per Share

on

of

GAS & ELECTRIC

Average Number

of

COMPANY

Shares Out¬

245 MARKET STREET

.

Dividends Per Share
in the

$314,414,000

PACIFIC

Common Stock Outstanding

standing

Retained

6,486,000

$364,313,000

Average Number

24,984,000

14,282,000

President

15,530,000

29,689,000

of

Common Stock

Business, Per Share of Common Stock




SAN FRANCISCO

......

.

If

you'd like to know

more

6, CALIFORNIA

about P. G. & E. write: K. C. Christensen, Treasurer,

245 Market Street, San Francisco

6, Calif., for

a copy

of our Annual Report.

24

a796)

;

,,

S '

...

li(* * ??

l"'K JL* ;i *«UH:{

'

.

Stock

\

,

V™ **>' s*'**f

'

V

'

,,'

f.

■

'■'

The Commercial and Financial Chronicle... Thursday, April 22, 1954

",'V

-»

.

kets.

Exchange Executives Protest
Proposal to Broaden City Sales Tax

^

^v

UtffUUtit i 'HU fM X f?t tj}.

'

'

We

hurt

by

tax.

know

This

of the

business

our

is

the State stock transfer
would

another

only if his order is
York City.

ecuted

and Edward T.

Mayor's budget message
over
this tax was
questioned in view of the fact that

public hearing before the

a

City. Seven percent originates in
metropolitan financial institutions

April 14, Keith Funston, Presi¬

on

dent

of the

New

York

investment trusts,
trustees
of
pension funds, etc.,
who could easily shift their busi¬

Stock Ex-

elsewhere.

ness

commission

Only 23%

business

Stock

is

the

our

from

comes

individuals resident in
"Business

of

to

Exchange by 614 member

firms many of whom have offices
all over the country. In addition

to being member firms of the New
York Stock
Exchange many of
firms

these

Frankly, I was shocked
cynical implication that the

also

are

listed

Stock

members

of

Stock Exchanges in other sections
the country—Midwest, Boston,

Our

G.

Keith

Funston

E. T. McCormick

members

to

$6 million would be added to
the costs of using our facilities.

And

will regard the

fair

Stock Exchange issued statements

sales tax to

sales of

as

"fin

his

services

cover

merchandise.

■'*

'"It

would

•'

\

Funston

short-sighted for
the City to impose a 3% sales tax
services.

on

inevitable

Its

would be to drive

result

business out of

the City—even to the extent that

business organizations

might

I

move.

urge

themselves
you

not-',to

dismiss the possibility lightly. Re¬
call three years ago that eight in¬
vestment trusts

City

when

tax on financial
increased
beyond
a

businesses
reasonable

point.

Recall

has returned

one

of the

out

moved

the

that not

despite the be¬

lated rescision of the tax rate in¬

which

crease

drove

them

out.

What has already
small
scale
will

larger

scale,

services is

"I

I

be

the

effect

tax

new

the

of

the

pro¬

services would

on

securities

industry

of

New York.
cause
serious diver¬
sion of securities business .to other
markets.

i 'Tt

would

give

markets,

against Exchange

as

auc¬

"It would provide further basis
for complaint by investors that
our
tax
laws
are
designed to

penalize saving.
"It

tion

more

York

City will have to be found.

"It

favorable

than

would

volume

City,

it

rent

of

business

would

rolls

City

and

itself

reduce
the

which

—

in

the

payrolls,

taxes

of

the

are

funda¬

upon

mentally dependent

business

volume.
"Let

make

me

it clear that all

things would not happen
overnight — although they may
happen faster than some of us
think.

national, not

tion.

It

share

does

in

American
here

70%

all

this

of

stock

country.

another

Some people

are

into

16

can

odds.

17%.

misled by these

thinking

that

The

on

one

"The

network of

same

this

require

other

to

ness

facilities
the

Exchange

no

new

security
all

are

other

Seventy
from

percent

of

commission

that

"Our

is what

non-residents




of

the

used

Moreover,

tribute by

a

transfer tax must

a

the State

on

be paid

to

securities sale.

every

Those

who engage in the securi¬
ties business in this City are con¬

sequently

pur¬

in

other

financial

"You must be

tions to

other,

climes,

thereby

that

large proportion of the

a

curities
and

traded

this

on

$5,000 worth

ably

the

se¬

Exchange

those

who

favorable, tax

cutting

appreci¬

income

and

jobs available in

of

this

of

City.

z-'

>

.

"To the brokers in the City who
have

been
in

means

costs

endeavoring by
their

and

every

to

power

stimulate

the

terest,

reduce

customer

proposal

is

in¬

indeed

a

crippling blow.
"I trust that

the

by

more

amount

number

centers.

of the fact

aware

City

the removal of business organiza¬

way

sober reflection

on

will conclude that the securi¬

you

ties

business

should

not

additional

and

be

its

customers

subjected

to

this

assessment."

W. H. R. Gould With

ability

to

rests

service—that

broader

and

we

better

believe

we

we

pro¬

markets

enjoy the
We are al¬

taxation

factors

cost

against

threatened

with

which

us,

of

this

tax would aggra¬

new

vate.

of

busi¬

And in speaking of the

over-the-counter dealers who buy
sell

or

whose
,

of

directly to customers and
compensation is in the form

differntial

price

a

State

Federal

taxes, in¬

income taxes,

combined.

and

Our

total

were

about 6Y2% of our gross in¬
and 18 times our net income.

"The

City

City

last

taxes

Tax,

year

substantial, portion
which is paid by members and

member

a

firms

on

the

Stock

Ex¬

change, yielded the City last year
$8,200,000. This tax has been in¬
creased

in

other
The

its

recent
years
beyond
City tax—700% since

most

recent

doubling

two

increase

years

ago.

"The State stock transfer tax is
another

serious

handicap

ability to compete

"My fear about
tax is that it

on
a

will, in

even

to

our

further

taxed

3%

be just enough to induce investors

place their orders in other

mar¬

Securities

John J.

Kenney Joins
Mason-Hagan, Inc.

not

transactions

Exchange.

the

on

Boston

the Com¬
interest of en¬

in

of

Calif.

was

& Co.

Planned

—

California

securities

a

is

engaging

business

S. Smith is

be

of

the

business

seriously the threat that
service

some

A service organization

ing business by mail
easier

much

to

west

done

Stock

frained

business establishments from New

is

FRESNO,
Estates

not

execution

the

this tax would drive

York.

Prior thereto he

Planned Estates of Calif.

Stock

Moreover,

Harris, Upham & Co. in Dur¬

officer of J. Lee Peeler

an

from

in

Massachusetts,

a

of¬

Building. Loren
principal of the firm.

that

than

"I take

with

ham, N. C.

fices in the Rowell

business in another form.

same

Exchange,

from

transfer

has

adopting

tax.

This

any

is

re¬

such

indeed

a

Transmittal Securities
Transmittal Securities Corpora¬
tion has been formed with offices
11

at

Broadway, New York City*

to engage in a securities business.

sharp contrast to fhe thinking and

Otto

actions

of

of

our

own*

government

H.

Hartfield

is

principal

a

.

the firm.

fio-

by phone

or

than

move

a

or a

Continued from page 2

retail store.
"Of

614

our

member firms

and

The

corporations 439—or over %—are

New York.

About

outside

branches

the

out branches in

competitive

a

City.

capital

(after. deducting
priorities and reserves);
(c) $8.38 of heavily depreciated

the 300 with¬
disadvantageous

position

with

City

them to
to

or

move

outside the

establish

outside

branches.
"The New York Stock
and

York and

continue to

to

business in New York.
want
want

to
our

customer

We

in

going

to

want

New

the

York

penalized
business

make

our

to

do

direct

we

his

The customer

that

decision.

The table

given

vides details of its major holdings:

The major holdings are low-cost
producers with huge -reserves and
the scope of these properties em-i
braces
zinc

copper

and

in

Rhodesia, leadin

copper

Southwest

Africa,

molybdenum- and

in

United

the

zinc-silver

pany's

in

own

customers,

New

want the great

for

York.

or

being

bringing
And

we

declining
zinc the

markets

States

Mexico.

potash

and

lead-

The

com¬

operations

comprise

for

lead

and.

general climate for these

two basic materials appears to be

improved,

2 clas¬
sifies the coftipany assets and pro¬
on page

cline

of

while

copper

tially offset
lira

(where

and

de¬
cur¬

be at least par¬

the flexibility of
Antelope and Mufu-

heavy

royalty

tied to the copper

are

by

from

by

costs in Roan

ments

moderate

a

prices

rent levels would

the

recent

relief

pay¬

price)
from

United Kingdom taxation.

.Thus

American

ments

Metal's

constitute

an

invest¬

excellent

group

of prime nonferrous metal

mines

available

50%.

The

at

a

discount, of

smelting, and re¬
fining; also, in time, the wholly-

over

owned

Cor¬

world-wide

sub¬

velopment projects which supply

metal

trading,

Southwest

Potash

privilege of staying
poration should contribute
without having to stantial
earnings.

ourselves
to

do

We do not

Neither

move.

business elsewhere.
is

Exchange

its members want to stay in

New

fixed assets.

other

members of the Exchange and en¬
courage

Security I Like Best

100

The tax would place

penalize

cases,

of

this- tax.

to

be

terms.

many

that

The result recommended that the State Leg¬
security business islature abolish the stock transfer
done in one form—the brokerage tax in that state.
And, the State
form—would
be
more
heavily of Illinois, the locale of the Mid¬
subject

would

Financial

on

know

you

Association

missioner, in the
profit. hancing the growth of securities

or

transactions would

Dealer

have

just in City
estate taxes, than it pays in

that

a

on

of

pays more

portant

tional

Dealers in Atlanta.

done

apply to
over-the- In
Massachusetts,^ for example,
security transactions former Tax Commissioner Long

located in

Exchange

be

can

not

City real estate assessments on
business property. The City asses¬
ses
Wall Street frontage at one
highest rates in the City.
might mention that the Stock

it

principal basis. The customarily sent to each taxpayer,
Stock Exchange competes for with the annual state tax
report
business today not only with re¬ form, a written request that the
gional exchanges but also with taxpayer effect his securities

of

the

where

v

manufacturing establishment

"First, there is the high level

business

,

W., members of the New York
Exchange. Mr. Gould was
formerly associated with the Na¬
Stock

on

made

we

highest reputation.
ready operating, however,
definite

give

make■. the

area.

trade

compete

We know

diversion

minor

a

could

Courts in Atlanta
ATLANTA, Ga.—William H. R.

"

the New

on

indeed become alarming if
City should adopt this addi¬
tional tax, for it should be self-

low

a

would

These

to

three factors—service, reputa¬

—and

to

this

RICHMOND, Va.—John J. Ken¬
our
members,
I f am only local1 brokers and dealers in
ney has become associated with
thinking also of the 21,000 em^ financial
centers
outside' New
Mason-Hagan, Inc., 1110 East Main
ployees they have in New York York, but also local
government
and of their present payrolls of
Street, members of the Richmond
bodies, have carried on an ag¬
Stock
about $100 million a year.
Exchange, as Vice-Presi¬
gressive campaign to divert se¬
dent.
Mr. Kenney was formerly
"I
mentioned
that
this
tax curities business from this

we con¬

does

tion and cost.
vide

is

effect

now

Boston, for
85% of its total
business in our stocks; Midwest,
70%; Philadelphia, 91%.

was

of

tors

implies
the $40

message

of

sale

or

counter

Exchanges

example,

Stock

business

budget

members.

ex¬

there—they

is in stocks listed

1946.

ness.

difference the
cheapest, all things being
between profitable and unprofit¬ equal.
v:
able operation for many of our
"In this
connection, it is im¬

primarily in local issues. Today,
the great majority of their busi¬

any

un¬

will

3% tax of $1.20 on
involved in the

a

ness

markets.

facilities

same

"There already

of

as

and

business.

our

on

even

wires.

same

come

know, finan¬
this City is at

brokerage busi¬ evident that brokerage customers,
margin of profit, free to buy or sell securities on
high volume business. Therefore, any exchange, will transact their

bring the business to New York.
The orders would merely flow to
the
other
Exchanges over the

all

"As you no doubt

"The securities

pensive facilities to divert busi¬

real

members to

our

already shouldering a
seek to avoid it, I am concerned— double load of taxes, a dual bur¬
den not carried by their competi¬
seriously concerned — about the

ness

point I want to make is

that it would

I

imposition

Chicago may well be the cause
siphoning a great deal of busi¬
ness from New York to
Chicago.

practically all of the same
offices to the other Exchanges.

the

mar¬

be maintained
against all

Exchange
comes

The

or

supremacy of the New York

kets

the
ex¬

Exchange also located

does

statistics

of

Exchange

local institu¬

a

about

volume

changes

for

connect

Businesses,

"The New York Stock
a

account

traded

correspondents to

cluding

of these

is

most

town offices of our members and

New

adversely affect the
economy of the City. By reducing
the

Ex¬

our

our

telephone and telegraph
that; connect the out-of-

several

would add to the
growing
feeling of many in the financial
community that an area of opera¬

in

done

must bear the tax, but of
causing

N.

also

superior

tion markets.

strong protest against the cur¬
proposal to broaden the sales
tax base by the inclusion of serv¬

could

wires

on

opinion, this proposed
adopted, will have the
ultimate direct effect, not only of
reducing the sum total of business
my

if

the

on

are

wtiich

stocks

private

competitive

a,

tax advantage to over-the-counter

"In

Barring
tracted

a

deeper and

recession

than

anticipated, the earning
American

Metal

should

City of New York sustained since after two

currently
power
be

affiliates

an

more pro¬

of

well

years

of

I

competitive status.

our

a

rent

with

of

these

forty-two

York Stock Exchange.

would

"It

several

but,

in

listed

stocks

New York.

ness

its

business

or

and

sider substantial diversion.

like to tell you what

would

on

if

imposed.

believe

posed

happened on a
happen on a
the sales tax on

more

The

and

members, I wish to voice

New
York
of
Stock
Ex¬
stock would present no hardship change are also traded on other
to the brokerage industry.
The competing exchanges throughout
percentage the tax bears to the this country and in Canada. It is

than 82% of our trading vol¬

more

are

Exchange

destroy
tax,

American

>

of the Exchanges outside of

the

change—and

ume—are

•.

be

the

our

myopic indifference to its future,
propose tax upon tax that would

Gould has become associated with
Courts & Co., 11 Marietta Street,

hundred

"Seven
of

of

,,

"

total transaction value is mean¬ conservatively estimated
that, at
ingless. What is important is the the present time, more than 80%
competitive relationship of the of the dollar volume of securities
total charges in New York com¬ trading on the
regional exchanges
pared to what, the customer must is in securities traded on our New
pay elsewhere.
A $41.20 charge York exchanges. This trend of
in New York versus a $40 charge trading
away
from New
York

active

Mr.

statement

said:

well

as

investors

unwarranted

and

chase

profitable.

protesting
strongly against :the
proposal to; broaden the City's

that

the extent

to

commission

place the business wherever it
most
advantageous
or
most

is'

Stock

McCor¬

Exchange follows:

behalf

hundred

York

to

that

obliged to place their business in
New York. It is their free choice

change and Edward T. >■ McCor¬
mick, President Of the American

New

the

on

concerned that $4 million

am

"The

not

are

"On

Mr.

■

75% of these cial business in
people have incomes of under present subject to the extraordi¬
$10,000; 34%, of under $5,000.
nary tax on gross financial busi¬

effect

Philadelphia, Detroit, Pittsburgh,
San Francisco, Los Angeles, and

Stock

can

of

aid

to

Protest ■* '

the behalf of the Ameri¬

Exchange;

of

others.

passed on to the

stocks

"I

the

officials who not only do nothing

com¬

country

the bill.

City.

brought

statement
on

Exchange should not worry so
long as it is the investor who pays ices provided by
Five million people own their customers.

banks,

—

The

mick,

investor.
at the

At

McCormick's

concern

the tax would be

business to other markets.

New York City Board of Estimate

in New

"In the

my

remain the financial and

mercial capital of the

ex¬

Keith

Funston, President of the New York Stock Exchange,
McCormick, President of the American Stock
Exchange, appear at hearing of New York City Board of Esti¬
mate to point out danger of more taxation
forcing securities

Vto

tax

sort—payable by an

same

investor

be

are

company

and its

actively engaged in
exploration and de¬

element of long-term specula¬

tive

interest

and

growth.

Com¬

mitments in oil and gas properties
and

drilling, started several

ago, are

progressing.

years

'

IWT**S(W. "et

,

Volume 179

* vi MXtH-iV '•{

'..V

,.

I

;>

''

»,.v

•

,

Number 5318... The Commercial and Financial Chronicle

(1797)

25

1

£sr*tjsr
°*lier

Meeting tomorrow's needs today with the
world's largest open

the

is

hearth

open

raw

materials

Pictured above is

furnaces

average,

of 550

one

...

it

exact

After 13

INDEPENDENT

%

*

>'

■

-

J

% r

•

I

A

«

V

.

?

i {'1
}

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i

.

- •. • >

::-r

-{?• "1> 1.1




COMPANY

OWNED
;

is

-

to

large

the

average,

a;

.1

the

!,"[ [M"|M fU«N*CE
New

COUP
r„rk. Bhjt fu *
division for
production

Buffalo,
new

"ace

of various

WATIONAI

MINES CORP

types
needs of

as

in

tion

leading developer of the ultrahearth furnace . . . in this respect
many others, maintaining its reputa¬

National

Steefn^Jk

r

open
so

as

one

of America's

progressive

most

producers of steel.

JMriONAl srttl PRODUCTS CO

Houston,

Texas

CORPORATION
\~/

MORE

BY

THAN

19,000

1

A\

u

steel
STOCKHOLDERS

>

d

W3,

JVATJQJVAI

PITTSBURGH, PA.

■f

u

a

specifications.

15 hours, on

J
>

C*veN*„d*0o,,°*p™^*k
S

S

ovens,

assure

*

.4!

P*

National is the

NATIONAL STEEL

AN

to

tapped into ladles, then molded into
ingots—the solid form from which it is pro¬
cessed into one of the endless variety of
steel products.

foreground, the charging machine
operator is placing a carefully measured
quantity of scrap steel and limestone on thefurnace floor. Next molten pig iron will be
poured in. Other material will be added from
time to time in the melting process during
which intense heat is sustained by flames

GRANT BUILDING

mighty

analyzed

steel is

the

In

accord with

of National's 30 open

a capacity
heat—the world's largest.

per

a

.ssratfta;

w

product of highest quality and in

all much

larger than

and

checked

is

finished

and almost one-half with

tons

jets playing over the "bath" in
draught of hot air.

As the steel is refined in these

are

brought together and finally made into steel.
hearth

fieSteKKfcs

_

steelproducts^

continuous

operation—

furnace

because it is here that the

STRAN-STEEl DIVISION

hearth furnaces

from oil

If any one part of the vastly complex process
of steel production can be called the heart, it

imporran t

.

is

i

i

<

i

9

»

26

The Commercial and Financial Chronicle... Thursday, April 22,

(1798)
*

,

>

By JEROME K. KUYKENDALL*

in

Act, which vests in the Commis¬
sion
jurisdiction over interstate

If

transmission

and

energy

involved, they also

utilities

submit their views.

The

Mr. Kuykendall estimates that

if full use of our hydroelectric
potentials were accomplished, the output of total electrical
power could be doubled.
Reveals large increase in applica¬
tions for licensing of water power projects in last three years,
and states there is ample opportunity within the framework
of Federal Power Act for a partnership of private and public
interests in power development.

to

staff

the Commission acts

-for

Power

the

Act

Now

Congress has jurisdiction.
In place of the uncertain tenure
and

indefinite

prior

requirements

legislation,

the

noted

109 million

Water-power dams, be¬
ing
obstructions,
naturally fell
within the scope of these acts.

kilowatts, or
slightly more

gress

undeveloped,
to
be
nearly

necessary.

Beginning in 1884, when Con¬
granted the first specific

all

authorization for the construction

generating
pacity —
steam, hydro,

project on a navigable
stream, several acts were passed

£n d

of

than

of

ca

water-power resources

our

navigable

—

tion. Over the

acts

de¬
velopment of

dam

construction

the
on

years,

this

Kuykendall

K.

J.

every

Congress. Furthermore, these laws
established

poten¬

of

navigable stream was
by a separate act of

a

authorized

enormous

power

on

and
on
the
Under these early

streams

public domain.

in opera¬

now

power

which dealt with the development

internal

combustion

a

uniform set of pro¬

no

proceeded, slowly at some visions under which orderly de¬
rapidly at others, until at velopment could proceed, and, in
present about 23 million kilowatts cases where power projects were
of
generating capacity, roughly on the" public domain, permits
21%
of the total potential ca¬ merely reflected the views of va¬
tial has

times,

been installed
in rious administrative officers and
plants through¬ were issued by the executive de¬
out the country. Half of this de¬ partments.
velopment has been accomplished
This early legislation relating
the
through privately financed proj¬ to
development of
hydro¬
ects
and
half
through
public electric power on
navigable
have

pacity,

numerous

importance of developing
of literally inexhaust¬

The

source

easily demonstrated
fuels

ible energy is
in

of conservation of

terms

production of electric

used for the

For example, the annual
output of constructed hydroelec¬
tric plants is equivalent to the
power.

.

usable
the

recoverable from

energy

consumption

lion tons of coal

than

of
a

64 mil¬

over
year,

or more

gallons of petrol¬

billion

11

streams, or on the public domain,
was not conducive to development

one
feet of

cubic

and

hydroelectric resources.
over,
energy
from our
from

derived

is

be

of our
More¬

falling
a

con¬

the

long as
and rains fall.
atom is not in

depleted

evaporate

oceans

Even

mighty

as

Hydroelectric

power

has played,
an im¬

and will continue to play,

portant part in the multi-purpose
development of our water re¬
sources,
for the development of
power in conjunction with other
uses such as navigation, irrigation,
flood control, and water supply,
contributed

will

and

con¬

tinue to contribute in large meas¬
ure

to the economic

many

feasibility of
multi-purpose projects.

History

of

Water-Power

Development

history of our water-power
development begins in colonial
days with the construction of mill
dams.

the

the chief
ment
us

this

At

early

years

time

of

concern

was

in

avenues

and during
the Republic,

of

the

govern¬

maintaining streams

of

commerce.

Conse¬

quently, the first acts of Congress
relating to water-power develop¬
*An address

by Mr. Kuykendall at the
Conference, sponsored
by the Illinois Institute of Technology,
Chicago, 111., March 25, 1954.
American

Power




a

to

site for

which

and

The

fixed period
specific terms
both the licensee

Federal
to

opment,
of

the

electric

full

these

no

over, a grant might be altered or
repealed at any time without re¬

by the grantee

course

of the

United

visions
of

were

or

liability

States, and

pro¬

no

made for

property

disposition
termination
of

on

the

of
of

Federal

the

1920,

Water Power

Act

total

capacity of
water power developed on public
lands and navigable streams was
only about 1,400,000 horsepower.
Passage of the Federal Water
Power Act, or of a similar act,
would

quite

probably

have

oc¬

somewhat earlier, but for
conflicting opinions regarding
some
of
its
provisions.
Chief
among
these was the question
whether
be

or

made

by

the

not

for

charge should
privileges granted
a

license

in

addition

to

be such

and

benefit

or

terstate

or foreign
commerce, for
improvement and utilization

navigable streams and the

pro¬

visions of the so-called "recapture
clause." Eventually, however,
ferences were reconciled and
Act

was

passed substantially
today

in

Part

I

dif¬
the

it
the

as

of

Federal Power Act.
As

originally

Federal

Power

established,
Commission

the
was

of
the
Secretary
of
Secretary of the In¬
terior, and the Secretary of Agri¬
culture.
In 1930,
the Act was
composed

War,

the

conditions, the

assured

encounters

his

of

tenure

difficulty

no

on

license

project,

poses

.

lates

:

4(e)

that

thorized

the

of the

taking,

au¬

citi¬

to

States

or

any

State

the

which

over

has jurisdiction,

gress

lie

streams

lands

of

the

United

States, and at Government

dams.

Thus the Act provides for

It

is

the

mission

practice

of the

both

to

notify interested Fed¬
agencies,
Governors,
and

eral

if

If

any.

state and local

agencies of appli¬
preliminary permits
and
licenses
for
hydroelectric
power projects, thus giving them

United

the

project at the expiration of the
license, the Commission may issue
a

license

new

censee

to

or

the

to

original
licensee

new

a

li¬
or,

if neither of these actions is taken,

Commission

the

annual
censee

license

the

to

the

on

issue

must

an

original li¬

of the origi¬

terms

by year
basis until the property is taken

over

or

a

on

new

a

year

the

in

issued

license

with

conformance

I should add here that the

a

project
license

which

at

termination

the

modified

was

approved Aug. 15, 1953,

excludes

from

recapture,

projects owned by a state or mu¬
nicipality. There is an exception

other

or

similar

comments,

action

is

taken

and

by

the

Commission in regard to applica¬
tions for amendment of licenses
when major

furnished
Federal

various

to

and state

cordance

with

are

interested

agencies in

established

ac¬

prac¬

tice,

and notices of the filing of
applications for major power
projects are published for four
weeks
once

and

in

in

local

the

newspapers

and

"Federal

Register,"
notices by letter are given to
to

members

officials

of

of

Congress

counties

and

municipalities which might be af¬
fected
by or interested in the
project. Any party who feels that
his

interests

affected

may

by

be

adversely
project

proposed

a

may submit a protest to the Com¬
mission, and hearings in connec¬

tion

with

ordered

either
upon

application may be
the Commission,

an

by

its

upon

motion of

own

any

motion

or

party to the

proceeding.
Furthermore,
on

retary

an

of

present

before

action

is

application, the Sec¬
Army is requested

the

recommendations

for

amendment,

the

tenance, and depreciation on
woliks providing the benefit.

provisions which I have
constitute the

These
been

summarizing

which

conditions

principal
Federal

for

licenses

all

in

included

are
non*

of hydro;Other provisions,
dealing with special problems, are
included, when necessary, in ac¬
cordance with requirements of the
development

electric power.

Act.
I
I

come

to

like

now

to

should

point

a

lay

on

which
stress,

some

i^ the ample opportunity

and that

within the framework of the Fed¬
eral

water

for

Act

Power

of

our

advocated

resources

Eisenhower.

President

of

kind

the

development

partnership

by

have

We

that the Act clearly and spe¬

seen

cifically provides for participation
by independent action of nonFederal
interests
and
by joint
Federal non - Federal partnership.
-

Present

policy

Federal

Government

affirms

that

the

should

un¬

dertake construction of only those
water

ects,

resource

ests

development proj¬

of projects,
by local

parts

or

built

be

cannot

which

or

have

a

which
inter¬

national

significance, and that other proj¬
ects, or parts of projects, are to
be left to non-Federal public or
private interests.
The means for
non-Federal development of such
projects, either in their entirety or
in

partnership

with

the

govern¬

ment, has been at hand and suc¬
cessfully in operation for a third
of a century, under the Federal

Participation

non-Federal

of

Interests
There
in

number of instances

are a

non-Federal

which

interests

have

participated with the Fed¬
eral Government on a partnership
basis

undertaking

amor¬

tization
held

reserves, which shall be
until the termination of the

license,
to time,

applied,
from
time
reduction of the net

or

in

investment.

These

accumulated
years

ment
A

after

thereafter

specified
turn

reserves

the

are

first

20

of operation out of surplus

earned

in

in

reasonable

upon
a

excess

rate

of

of

a

re¬

the

legitimate invest¬
licensed project.

reasonable

annual

fee

is

specified in licenses issued by the
Commission, which the licensee is
required to
United

pay

States

to reimburse the
for

,

protection of navigation, flood
and
other water
uses.

control,

and

the

Secretary

of

Ag¬

by

struction

and

operation

however,

costs

of

ad¬

ministering the Act and for the
privilege of occupying and using
property of the United States.
Furthermore, a licensee is re¬
quired to maintain project works
in a state of repair adequate for
the efficient performance of the
for which
they were
constructed, and he must operate
them in a manner which, when

owned
sued

utilities

applicable,

Liability for damage to the

under

licenses

is¬

by the Federal Power Com¬

mission.

Examples

cited

where the

ment

has

can

Federal

also

be

Govern¬

participated in the de¬

velopment of
proposed

to

projects, originally
be constructed
by

non-Federal interests, by assum¬
ing responsibility for providing or
contributing
to
the
non-power

features.
For

instance, the United States
provided a part of the reser¬

has
voir

lands

Dam

Authority Pensacola project

for

Oklahoma

in

the

in

Grand

the

River

interest

of

flood control. The 1944 Flood Con¬

trol Act authorized
mended
for

the

the
nia.

a plan recom¬
by the Chief of Engineers

control

Tuolumne

of

flood

River

in

flows

in

Califor¬

This plan called for the Fed¬

eral Government to

estimated

purposes

erty.

Federal Water Power Act of

charges for interest, main¬

shall establish and maintain

tions

this

terior

the

equitable share of the an¬

an

nual

cerning water-power projects

opportunity to present objec¬

an

to

Likewise, the Secretary of the In¬

1935,

on

changes are involved.
Copies of license instruments con¬

for

the

In

is determined
Commission and is based

by the

the con¬
of the
power features of multi-purpose
which is the hydroelectric develprojects. Examples include, among
o p m e n t
in
the
International others, the London, Marmet, and
Rapids section of the St. Law¬ Winfield projects at navigation
rence
River, which, while being dams on the Kanawha River, and
developed by the State of New the Ohio Falls project at the nav¬
York, is subject to recapture.
igation dam at Louisville on the
Licenses issued under the Act Ohio River, where power features
were
constructed
by privatelyalso
provide
that
the
licensee

cations

consent

Senate.

of

amount

The

States.

or

of annual payments

of

by Public

missioners appointed by the Pres¬
ident, by and with the advice and
the

United

the

the

from

licensee

another

of

over

Law 278,

received

benefits

works

right

will not be inimical
to navigation, flood control, irri¬
gation, or recreation, and which
will protect life, health, and prop¬

of

payments. Conversely,
licensee must pay compensation

Power Act.

Act.

of the United States to take
a

Com¬

fair

States does not choose to take the

participation in water-power de¬
velopment by all interests,
public and private.

the

exceed

property taken, plus
damages due to
the

pub-' nal license and

upon

reservations

and

Con¬

to

the

value of the

is

licenses

United

not

licensee in

the

of

severance'

States, to any
association of such citizens, to any
corporation organized under the

laws

the

stipu¬

Act

Commission

issue

to

the

of

of the United

zens

has

development, and
public uses,
r e a t i o n a T pur¬

."

.

Section

to

Com¬

is

these

r e c

including

mission

five

Under

investment

taken

of

surrendered

or

licensees and the Commis¬

beneficial

other

amended to replace the three Sec¬
retaries with an independent com¬

composed

they

and

for

sial
of

Act

period, the United States
right to take over the
project upon payment of th,e net

the

interested

the definition

the

of water power

and

included

a

years.

this account in financing his proj¬
ect.
At the
termination
of
the

in¬

of

in

altered

licensee

sion.

as to be "best adapted to
comprehensive plan for improv¬
ing or developing a waterway
use

for

50

exceed

only upon-mutual agreement be¬

a

charges for the cost of adminis¬
tering the Act.
Other controver¬
items

be

may

tween

for the

Commission

to

prescribed

development.
Section 10(a) re¬
quires that adopted projects shall

...

are

Power

not

may

Licenses may be revoked only for
the reasons and in the manner

insure its proper

receives

licensee,

first

the
annual

for

more

be pre¬
issued by the

resources

period

resources

in

are

well

one

Federal

it was "de¬
the hydro¬

potential

power

resources and to

plans equally
received from

served, licenses

was

devel¬

and

water

country; and
to safeguard

signed

Act

the

conservation,

utilization of the

where

power

Power

encourage

project plan must
adapted to a comprehen¬
plan
of
development.
In

applicant,
preference
must be given to States and mu¬
nicipalities.
In order that
the
rights of the public in its water-

public interest.

enacted

Fed¬

We have already

that the

than

a

he,

best

adapted

use

under

protect

and the

the

provides benefits to other projects
subject to the jurisdiction of, but
not owned by the United States,

^

the

under

resources

cases

contract

a

government for

power

of time

make

1935

permit

of

was that they provided
definite term or tenure. More¬

1920,

appears

The

the

of

to v

curred

this category.

has

of

a

stantly replenished supply which
cannot

with

Act

which

thereof, to any State or to
any municipality for the purpose
of developing water power on any

investment

gas.

development

continuing

"waters

licensee

a

Power

provisions

of capital—public
or private.
One of the principal
objections to the enactments, prior
by

half grants. Under these precarious
These conditions, development of our
are
large and important savings, water-power resources was im¬
and,
although numerous
representing, as they do, 11 to peded
25% of the 1950 production of the special authorizing acts for power
fuels mentioned,
and they will projects were enacted, little prog¬
continue
to
increase in
impor¬ ress was made in the way of
It has been
tance
with the increase in de¬ actual development.
mand
for
electricity
and
the estimated that, prior to passage
about

or

eum,

trillion

sive

Federal

contain

power

projects.
this

be

If, in the construction and op¬
of his works, a licensee

eration

>f

examine

us

eral Power Act.

Federal

States is in

licensee; the United
no way liable.

Licensing Provisions

let

power

of

Water Power Act of 1920 and the

the aggregate tion
hydroelectric power navigable waterways of the
the
United
States, de¬ United States and the removal of
such obstructions when considered
and

veloped

appli¬

an

briefly
some
of the more important li¬
censing provisions governing the
development of our hydroelectric

which

of

in

on

before

project rests upon the

licensed

a

compensation therefor in the form

Federal

pro¬

orderly

develop¬
ment, for power production and
other purposes, of the rivers over

largely with regula¬
concerning obstructions in

estimates

capacity

pro¬

parties have
be heard and

protect

later

sites

By this

opportunity to
their interests

an

are

property of others, resulting frpm
the construction or operation of

invited to

Federal Power Act

Federal

vides

dealt

ment

agencies

are

all interseted

cedure

that time.

interest.

an

cation.
The

private interests, and the remainder through public projects,

iThe Federal Power Commission

have

public

over

added at

were

by

they

present

interests' of other Govern¬

electric

and Part III,
which
the procedural
and administrative provisions,

Pointing out only 21% of the nation's hydroelectric power

the

of

sale

or

are

which

ment departments or

therein,
prescribes

capacity has been developed, of which half was financed

to

Part II of the

engaged

Chairman, Federal Power Commission

11

invited

their views in relation to matters

Federal Power Act.

Hydroelectric Development

jffj

riculture

1920 was incorporated, with mi¬
nor-revisions, as Part I of the

Federal Government's Role in
*

1954

contribute

an

$12,000,000—justified by

flood-control benefits—toward the
construction of the
reservoir

of

San

of

the

Francisco

enlargement

of

Cherry Valley

City and County
and

the

toward

Don.

the

Pedro

reservoir, owned and operated by

Volume 179

Number 5318

Modesto

the

Turlock

and

The Commercial and Financial Chronicle

...

interstate

Irriga¬

would

Furthermore, during the last
session
of
Congress, legislation

Commission

passed

•was

at

v

the

Senate

contribution

$6,500,000
control

in
the

for

censes

f

be

affected
has

were

of

them, or
flood; projects for

for

Markham

a

Ferry

were

project,

foreign

or

tion Districts.

capacity.

commerce

thereby,

found

the

that'

the

declarations

connec¬

the

by
the Federal Power Commission,
v
t
Public Utility District No. 2, of
Grant
County, Washington, has
applied to the Commission for a
preliminary permit with a view
toward
development
of
hydro¬
electric power in

1953

plan of

development

this

At

capacity

Federal

the

end

1953,

year

velopment

Govern¬

for

000

kilowatts.

219

were

Of

the

of

calen¬

capacity

new

of

former

for

major

ects of

(Special

have

Chronicle)

aggregating

watts

of

of du

totaled

about

994,-

velopments and

592,000 kilowatts
private developments.
before the Commission

at

the

end

in¬

of

for

tions

preliminary

and

ing about

cluding

applica¬
permits,

were

total¬

amendments

10,838,000 kilowatts of

hydroelectric

new

proj¬

1953

both

public and

developments.

in¬

capacity,

private

Indicative

received

net

During the

riod,

of

the

for

applications

volved

of

the

Pont, Homsey & Company,

Milk

Street,

members

and

Columbia

Wells

projects

changes.

lie

Schirmer,

formerly

was

Atherton

River.

Clearly,

eral Power Act is

provides

Assets Now

Fed¬

Burgess & Leith.

seems

Power

eral

Act

has

provided

Keller & Co. Adds

a

climate favorable to development
of

hydroelectric

our

and

sources

power

(Special

that, under the Act,

opportunity is provided for

to

The

BOSTON,

re¬

Financial

Mass.

Chronicle)

Sanford

—

for full

of Keller

par¬

&

Co., 53 State Street.

when

sources

such

there

is

will

a

(INDIANA)

Earnings Increased... Expansion Continued

participation in
development of our water re¬

the

for

participation.

Total assets of Standard

Oil

Company

(Indiana) and its sub¬

NET

EARNINGS

FOR

WERE

1953

$124,830,000

sidiary companies passed the $2 billion mark during 1953. The

share. This compares

with $119,980,000

or

agencies of hydro-power

second billion of

Our 1953 tax bill

$94,729,000 which

was

of

compared with 57

Development

by

non

Federal

-

on lands
States and streams

the United

the

1920.

at

the record

Federal

Water

Now, let

Power

take

us

and

Act

Our

are

half

liminary permits and 67 licenses,
a
total
of 229
applications, for
projects representing 15,026.000
horsepower of installed capacity.
months

capacity

in

permits

projects

had

risen

been

to

our

rose

4

per

cent

and pipeline traffic.

runs,

program

continued, with capital

again exceeding $200 million to main¬

competitive position.

Such expenditures

in 1954 and 1955, totaling about
two-year period. Some other high¬

even greater

billion dollars for the

a

three

completed;

planned.
our

Ultraforming units—a

new

Oil's laboratories—were

Standard

aggregate
for
which

licenses had

or

quested

the

later

cent and earnings

lights of the year: Construction started on our refinery at
Mandan, North Dakota; three new research laboratories were

pre¬

Four

improve

year

seven years,

the first billion.

up

all-time high. The volume

an

liquids, refinery crude

expected to be

in less than

two

more

A

r

with $1,963,877,000

SALES

of

.■■

■■■

double

the

total

of

developed

States

to

that

all

in

date.

The volume gain in 1953

water

the

the average

United

Quite

evi¬

was stimulated by
the passage of the Act.

in

License

Applications

dealt
six

with

and

three

per

Sales and

involving
horsepower,

licenses

times

mental

individual

departments

operating

been

in

the

'

sage

$1,729,403,854

all

United

States

9,000,000
factory
tion

time

amounted

horsepower,

character

and

its

of

the

of

pas¬

to

the
the

only
satis¬

government agencies),
Interest expense.

Projects

-

Federal

Act.

Commission

declarations
struct

other
as

works

those

to

streams

on

defined

After

in

examination

proper

made

project
whether

of

works
or

not

these
to

the

interests




-

53,055,000

.

gram

half

new

40,125,708
8,671,862

41,674,330
11,002,150

............

5,395,554

5,410,869
$1,496,913,681

124,826,397

$

$

119,981,438

$

38,301,964

$

Sjiecial dividends paid in capital stock of
Standard Oil Company (New Jersey)—
276,939 shares in 1953 and 278,246
shares in 1952 at average carrying value
—together with equalizing cash pay¬
ments in lieu of fractional shares. Mar¬
dates of distribution

Total dividends

•

38,368,232

4

per

OF

1953

by

an

employees

our

are

ness

at

beginning of

any

at end of year.,

About

total stock; the largest

our

STORY

IN

our

employees.

FIGURES

1953

1952

1951

$1,729,000,000

$1,617,000,000

$1,559,000,000

124,830,000

119,980,000

$8.11

$7.81

FINANCIAL

Total income

Netearnings...
Net

earnings

per

share.

.

$

paid

per

share

46,620,000

$

46,870,000

148,700,000

$9.71
$

45,000,000

$3,954*

$4,019*

$3,864*
$

Capital expenditures....
worth, at the

78,210,000

$

73,110,000

$

103,700,000

$

209,200,000

$

204,300,000

$

183,100,000

year

$1,437,000,000

$1,272,000,000

$93.39

$88.33

$83.00

97,SG0,000

j
97,300,000

95,210,000

9,442

9,194

9,043

1,522

1,307

1,106

204,800,000

Book value per
the year end

$1,357,000,000

185,300,000

187,600,000

share, at

PRODUCTION

Crude oil and natural gas

net,

,

wells owned, net, at

the year

end

Gas wells owned, net, at
the year end
MANUFACTURING

Crude oil

run

at

refineries,

barrels

.

/

612,800

569,000

548,000

$1,499,000,000

MARKETING

$1,665,000,000

$1,550,000,000

plants operated, at
end

4,526

4,539

4,528

Retail outlets served, at
the year end...

30,900

31,040

31,130

the year

were

TRANSPORTATION

8,502,709

8,317,523

paid.......

$

46,619,487

$

46,870,941

v

$

78,206,910

$

73,110,497
773,259,988

854,833,205

required for

i

Pipelines owned, at the
year end, miles.......

8,462,720

—

'
$

e*

933,040,115

$

854,833,205

o

17,540

16,740

16,180

138,900

142,000

97,850

99,510

117,800

117,600

116,800

50,870

51,440

49,740

-

Pipeline traffic, million
barrel miles..........

142,500

barge traffic,

million barrel miles...

101,100

*

PEOPLE

Stockholders, at the

Earnings retained and invested in the business

of

em¬

institution is les9 than 4%.

and demonstrates the splendid support and cooperation of

Bulk

year...............

reserve no longer
investments.............

Our

stockholders. The largest stockholding

individual is less than 1% of

Earnings retained and invested in the busi¬
Prior years'

50,870.

cent general pay increase during the year.

STOCKHOLDERS NUMBERED 117,800 at the end of 1953.

half of

Tanker and
Balance of earnings retained

de¬

A further

numbered

a

END

Total sales in dollars....

i

equivalent to $1.3637 in 1953 and
$1.5187 in 1952 per share on Standard
Oil Company (Indiana) stock.........
.

reserves.

products is expected.

AT THE

running capacity,
at year end, barrels
per day.............

1

by Standard Oil Company

$2.50 per share

on

were
$209,157,000 compared with
Our expansion and modernization pro¬

crude oil production and

barrels

$1,604,577,457

on

share

billion dollars. About half of this amount will go into

liquids produced,

(Indiana)—^

ket values

per

in 1954 and 1955 calls for capital expenditures of about

a

velopment of

Oil

.........

earnings of subsidiaries.

The

year

end....

Employees, at the
end

year

had

proposed

determine

the

.

203
con¬

navigable waters but over
Congress has jurisdiction.

which

been

has received

intention

of

project
than

1920,

37,702,958
52,551,000

Regular dividends paid wholly in cash—

of the

Since

-•

Dividends paid

navi¬

Section 23(b)

Power

58,031,915

66,417,432

».

......,.....

year.

EXPENDITURES

$204,293,000 in 1952.

Crude

gable waters affecting the inter¬
ests of interstate or foreign com-,
merce
require Federal authori¬
zation under

profits taxes.
amounting

a,

'

end

46,979,844

Netearnings.

results

than

CAPITAL

Net

Total deductions...........

•

.

other

on

share at the end of 1952 to $93.39

business

$1,294,419,369

Minority stockholders' interest in net

accomplished in its administration
are apparent."
-

.

the value of

Earnings retained in the
*

$1,380,053,147

.

$254,523,000 in 1953 and $236,815,000
in 1952 collected from customers for

legisla¬

substantial

$1,616,895,119

to

the aggregate installation in
water-power plants in the

the

at

excess

was

paid in 1953 for the 60th consecutive

were

December 31, 1953.

Dividends

Federal income and

paid in 1953; of this, $2.50

were

year's reinvestment of profits increased the stockholders' equity
from $88.33 per

THE

Other taxes (exclusive of taxes

preceding the passage of the Act
that

Dividends

INCOME

$1,592,122,143
24,772,976

ments and abandonments.

years

and

customers

1952

Depreciation, depletion, and amortization
of propertiesDepreciation, and amortization of
emergency facilities
Depiction, amortization of drilling and
development costs, and loss on retire¬

constructed under Fed¬

authorization

OF

serve our

$1,709,510,619
19,893,235

revenues

ating and general expenses other than
those shown below,

Report of the Federal Power
Commission, "when it is realized
that
only
1,400,000
horsepower

share

special dividend in Standard Oil Company (New Jersey) stock.

holding of

Materials used, salaries and wages, oper¬

nual

eral

slightly higher than

DEDUCT:

dealt

in the
preceding 20 years.
pointed out in the Third An-

per

Dividends paid

with

had

was

STATEMENT

Total income

in¬

govern¬

had

$3.86

regular cash dividend and the balance

Retained and Invested in the Business for the Years 1953 and 1952

..............

the

as

the

with

*

improved ability to

our

Dividends, interest, and other income

much

as

compared

1953

horsepower, and had twice as
much horsepower built or build¬
ing

cent

Commission

much

as

permits

volving

and Earnings

applications

times

issued

the

reflects

CONSOLIDATED

During the first three years of
the Federal Power
Commission's

administration,

of 6

for the domestic industry.

This record of progress

dently, activity

Increase

DIVIDENDS of
was

$2,036,101,000 compared

$1,550,000,000 in 1952, highest previous year. Both in total vol¬
ume and in dollar value our sales were greater than ever before.

21,500,000 horsepower—more than

In

share.

EMPLOYEES

were

for 1952.

TOTALED; $1,665,000,000

1953

IN

than

more

per

addition, we collected from customers $255 million in taxes for
local, state and federal governments.

ployees received

By June 30, 1922, it
had increased to 20,000.000 horse¬
power, and by June 30, 1923, to

$2,052,000

equivalent to $6.16

were

per

share in 1952.

were

horsepower.

power

was

Taxes in 1953

$8.11

or

per

increase in domestic demand for oil

TOTAL ASSETS at the end of 1953

16,826,000

development

and

new and improved products were introduced by
in 1953 than in any other year since World War II.

v;;-v-

re¬

started

More

company

in 1952.

$7.81

registered in production of crude oil

were

vigorous postwar expansion

tain and

less than 13 months after
approval
of the Act, the Commission had *
received applications for 162

6

was up

Gains also

1952.

expenditures for the

hap¬
By July 1,1921,

pened thereafter.

per

product sales

over

what

see

reached

and natural gas

look

a

built up

was

required to build

of

jurisdiction of Congress
was,
as
previously stated, slow
and halting before the enactment
in

assets

years

Product sales for the year

under the

of

our

Copies of the 1953 Annual Report are available on request as long as the supply
lasts. Write Standard Oil Company, 910 S. Michigan Ave., Chicago 80, Illinois.

J.

Sachs has been added to the staff

Top $2 Billion... Sales at All-Time High...

vehicle which

a

with

reasonable to assert that the Fed¬

and Subsidiaries

actual

events demonstrate that the

the

Co. V and

&

the

on

of

New York and Boston Stock Ex¬

the

on

it

record,

31

in¬

4,450,000

Accordingly,

of

basis

received

total

net

a

kilowatts.

installa¬

4,221,000 kilo¬
generating capacity.
latter six-month pe¬

STANDARD OIL

Similar applications
filed
for
the
Rocky

been

Reach

Act

Homsey

Financial

plan be adopted the Federal

features.

the

The

Should

Government would probably par- '
ticipate to the extent necessary
to provide flood control and other"

As

to

tions

were

than 100 horsepower

more

With du Pont,

During
the
period applica¬

12-month

BOSTON, Mass. — James A.
Hodder, Jr., has joined the staff

kilowatts, of which about
402,000 kilowatts were public de¬

licenses,

power

''

ending June 30, 1953,

were

under

000

10,000,-

these

non-federal, public and private.
-'V'.
: ■■
1 -'

all interested parties, Federal and

authorization

664

ultimate

totaling about

the figures for the

under Federal Power Commission

effect,

provisions

stallations

ticipation in this development by

tions

plants

licenses,

in

in activity relative
hydroelectric de¬

are

year

27

construction

hydro

with

would

the

by

covering proj¬
ects
with
about
6,784,000 kilo¬
watts
of
existing capacity and

licenses

the Priest Rap¬

also include flood control.

were

hydroelectric

recent up-surge
to non-federal

Pending

ids section of the Columbia River.
One

there

of

53%

and for the latter half of the cal¬
endar
year
1953.

dar

of

end

about

fiscal

ment.

filed.

-

in

under li¬

now

for

owned

which
would
be
con-'
From the establishment of the
by the Grand River Dam Commission in 1920
through the
Authority in Oklahoma. The part¬ calendar
year
1953, applications
nership arrangements pertaining for
preliminary permits or li¬
to
the
Don
Pedro
enlargement censes have been
filed in con¬
and the Markham Ferry project
nection with 2,148 projects.
At
would be carried
out

total

in the United States which is not

structed

tion with construction licenses

Projects

account

cense

li¬

required for only 70
about 35% of the

which

(1799)

including $1,364 in 1953, $1,519 in 1952, and $1,704 in 1951, as the
market value of the dividends in capital stock of Standard Oil Com¬
pany (New Jersey) on the respective dates of distribution.

28

(1800)

The Commercial and Financial Chronicle...

Stewardship
In Securities Regulation

sonable

schedules
writers

affirming there is unanimity in the Securities and Ex¬
change Commission regarding a vigorous,
practical and intelli¬
gent administration of SEC laws, Commissioner Armstrong

Division's

its

three

mem¬

bers

of

Administration

one

in

for

five-

terms of

year

Commission¬
ers,

piring

I

each
So

year.
as

laws

ex-

one

J. Sinclair

Armstrong

far

I have observed in nine months

members of the Commission, there

sharp underlying differ¬
of viewpoint toward these

laws

between

as

and

me

Democratic

between
earlier

nepubiican

members

or

as

those

appointed by the
by the Eisenhower Ad¬

or

ministration.

differences

There

of

pretation, of

have

emphasis

been

inter¬

or

But the five

course.

members of the present Commis¬
sion have locked strong hands to¬
gether to give a vigorous, prac¬
tical and, we believe,
administration
their

SEC

elected

to

office

of

intelligent
laws which, in

of

regulation

the

of

securities

quote

me

of

American

from

President

Economic

Report to

Congress of Jan. 28 of this
"The

Federal

enacted

were

have

and

changed

year:

securities

nearly 20

in

ago

years

these

laws

which, while fully protect¬
the interests of investors, will

make the capital market more ac¬
cessible to businesses of moderate

size.
to

It

would

also

be

desirable

simplify the rules and thus
the

duce

issues

new

of

costs

and

re¬

registration

their

of

subsequent

distribution."!

inaugurating

a

market, have unquestionably im¬

broad

proved

rules, regulations and forms which

free

the

American

system

enterprise in the last 20

I for

one

of

years.

sincerely believe that

the Securities Act of 1933 and the
Securities Exchange Act of 1934
ha\~

Greatly

contributed

to

the

rest era "on of public confidence in
the comities markets and in

pri¬

vately

ned

.

and

managed busi¬

J have led to the
preserva¬
w.e free
enterprise system

ness z.:.

tion of

in th's country.

After 20 years, it
might be easy to forget the dan¬
ger the country was in in
1933
when r"mfidence in securities had

of revision of the

program

have grown up at the Commission
over the past 20
years is to sim¬

plify, streamline and speed up the
orderly
administration
of
the
statutes.

We believe that the basic

protections afforded
investors

by

American

to

these

strengthened

laws

and

will

the

public

abuses

The

had

whicn

suffered
haa

and

occurred.

a'ministration

rities

by the Secu¬
Exchange Commission

and

of these laws and the related
laws
later enacted to comp^ment them
•—the Public

Utility Holding Com¬
pany Act of 1935, the Trust In¬
denture Act of
1939, the Invest¬
ment Company Act and
Chapter

X of the

Bankruptcy Act—and

acceptance

by

the

securities

the
in¬

dustry of the basic premise that
the

seller

administration

curities
free

laws

flow

will

of

of

the

se¬

facilitate

investment

the

capital

must

assume

respon¬

delay in the offering of

serve

America
we

as

look

ride—socialist

a

free country.

the

at
or

world

worse—we

out¬
can

shudder at what might have
hap¬
pened if confidence had not been
restored. The investment

banking

fraternity,
*An

as

well

as

other

seg¬

Association
1,

We

treat¬

statements

under

hope

to

comment

required.

consideration,

release

shortly,

for

public
simplified

a

Under

rules, the post-effective
to
the
registration

We

debt

securities.

hope that this form will make

possible

faster,

simpler
registrations

expensive

and

less
such

of

on

competitive

the filing in one of
branch offices and

or

no

mit

such

This

eliminates

any

issues

In

tion

of

the

have

we

to

gress

the

debt

would

at

present.

simplifica¬

issue prospectus,
to the Con¬

submitted

Trust

make

per¬

registered

the

proposed

a

be

than

considering

of

amendment

Indenture

Act

which

permit the Commission to
rules

and

regulations per¬
description in the

taining to the

of certain provisions
required to be included in an in¬
prospectus

denture qualified under the Trust

Act.

would

in

not

provisions
cluded

This

any

way

required

in

the

proposal
affect the

to

in¬

be

indenture,

but
would merely make it possible for
the Commission to permit omis¬
sion

or

I modification

of

the

de¬

scription of such provision now
required to be included at length
the

in

These

prospectus.

are

generally

provi¬

known

to

be

them

in

wanted

the

to

indentures

if

they

to

several

occur

successful

cepted

and

writers

were

the

days

between

bid

time

was

the

free to make

the
ac¬

under¬
a

public

offering.
Our Division of

Corporation Fi¬

by

Commissioner

Arm-

of

America,

Chicago,

1954.




III.,

! Economic

Report

Jan-

28, 1954, 83rd
House Doc. No. 289,
2 Securities

Act

of

the

President,
2d
Sess.,

Cong.,
page

88.

Release

No.

3494,

Holding Company Act Release No.

12298.

Interstate

on

and

Foreign Commerce of the House
of Representatives in the spring of
1952, testimony both by represen¬
tatives
tional

issuers

of

of

and

institu¬

investors, illustrating

situations in which the
afforded

by

private

was

the factor

suer

many

flexibility
placements

to avoid the

markets. 3

I

motivating the is¬
public securities

am

sure

who have advised

regard

to

nancing

are

articles

those of you

corporations in

private

placement

fi¬

which

this.

Two

appeared in the
Review" of the New

"Monthly
York

of

aware

Federal

Reserve

Bank

in

March and

April, 1952, went into
the matter exhaustively.
They
recognize that the Securities Act
may have
been one factor.
But
private placements are not just a
device to avoid
have

registration.

They

real and valid place in the
financial system:
a

"The
the

of

nique

development and growth
private-placement tech¬
of financing is a further
financial

of

source

stability, at least
ible

loan

and

economic

the downside

on

of business
off

cycle, in that flex¬

agreements

decline,

defaults

and

can

arranged

practice

which

may

losses.

encourage

the

tendency on the part of cor¬
porate management to engage in
long-range investment planning.

The

knowledge, too, that changes

loan

in

Misapprehension

Regarding

I

would

the

like

there is

a

abroad

difficulty,

consumed

to

agreements—such

the

as

suggest to

you

the

land about

expense

and

time

Exchange

Commission.

occurs in

that

the public minds

the

difficulty

of

registering

an
issue
with
the
Commission for public sale is con¬
enormous volume

securities issued by American
corporations directly to large in¬

stitutional

priving
vestor

investors, thereby de¬

the
of

a

small

individual

chance

to

buy

in¬
new

high grade securities. I person¬
ally do not believe that the ad¬
is

a

substantial contributing cause

to the

popularity of private place¬
If it is, I am hopeful that
accomplishment of the form and

ments.

new

the

Commission has elim¬

requirement for the
filing of quarterly reports of gross
and operating revenue. Be¬

sales

of

cause

short-term

seasonal

and

business changes and the frequent
of

occurrence

contrary

net earnings

a

to the

trend

trend in

gross

a

these 9-K reports were
abolished.6
However, our statis¬

company,

tical

branch

receives

on

vol¬

a

untary basis quarterly reports of
net sales, net earnings and con¬
densed

1,300
and

balance

sheets

from

analyzes them
of preparing statistics

pose

penditures

over

corporations
for the pur¬

representative

on ex¬

and
equipment and working capital of
corporations, which are published
in
the
Commission's
quarterly
Statistical

ing

Bulletin

special

plant

new

on

and

economic

collaboration

with

mak¬

for

studies,

other

in

govern¬

mental

agencies,
such
as
Commerce
Department and

the
the

Federal Reserve System.
We
have
simplified

so-

the

called "when issued" trading

eliminating

fourteen

rules*
and

rules

two forms.'!

We

considering revision of
forms used by offi¬
directors and others for the
reporting of ownership or changes
in ownership of securities of listed
companies so that seven forms
the

are

numerous

cers,

used

now

into two
We

be

may

consolidated

three.

or

the

revising

are

rules under Section
curities
late

Exchange

to

shareholders.
forms

plicated.

presing

which

by
10%

rules

present

meet

which

16(b)

within

of that act,

X-16B-6

dispositions

felt

we

comprehended

Rule

certain

re¬

trading
and

needlessly com¬
a
particularly

are

problem

Section
vised

The

To

not

was

Act

swing
officers,

reporting
of the Se¬

short

directors,
and

16

re¬

we

to

exempt

pursuant

ta

riods of adversity without

We are studying the form for
registration of employee stock of¬
ferings with a view to expanding

forcing
bankruptcy may
also lead to greater willingness to
borrow on long term, in order to
plan business capital expenditures
ahead.".
'
a

borrower

Of

the

into

corporate

securities

fered

in 1953, 62% amounting to
$5.6 billion, were registered pub¬
licly offered securities, an increase
from

the

year

amounting

to

before, and
$3.4 billion

38%
were

privately placed ($700 million less
than in 1952). I would like to dis¬
pel, if I can, the popular notion
that

the

difficulties

and

like.3

its

use.
The
present Form S-S
provides wide latitude for the use

of

expense

stated.

inate,

the

issuer's

security
of¬

lished
We
of

the

to

the

extent

legally per¬
missible,
such
competitive
dis¬
advantage as registration may im¬
pose on public offerings.
Adequate Financing of Business of
Vital Importance-

and

report

other

ta

pub¬

readily available.
considering permitting use
form by a larger numher

are

this

and
more
varied types of em¬
ployee stock offerings, and revis¬
ing the form itself so as to make

it available for offerings under
employee stock option plans.
We have adopted new forms for

registration under the Investment

Company Act of management in¬
vestment companies and for regis¬
tration
of

ment

the

under

securities

of

Securities

We

rules 6

scribing

with-

together

'

considering

are

Act

invest¬

open-end

companies,

related

standards

rule

a

under

pre¬

which

investment
companies
register as investment com¬
panies and offer their securities

may

for

Adequate

financing of Ameri¬
enterprise in the year ahead
will be of vital importance to the
maintenance of the high level of
economic
activity. According to
statistics

prepared

by the Com¬
branch, the
expected expenditures of industry
on
new
plant and equipment in
1954 will be $27.2 billion, com¬
pared with actual expenditures of
$28.4 billion in the peak year of
mission's

1953 and

sale

We

in the

have

statistical

$26.5 billion in 1952.* In

file

financial

their

before

a

Securities").
4 Statistical

Release

No.

1221.

new

rule

dealers ta
with

statements

for

registra¬

tion; 11 a new 9-item form for
registration of brokers and dealers
instead of the old 27-item form;12
brokers

forms

and

and

reports

of

associations

dealers

eliminate

to

voluminous

exhibits

containing information otherwise
readily available;13 and a new
5 Statistical

Vol.

13,

Bulletin,

February

1954*

No. 2.

6 Securities

Exchange Act Release N«,

4949.
7 Securities

Exchange Act Release Ne»

4989.
8 Securities

Exchange Act Release

4998.
9 Investment

Nos,

1932

and

No.

Company

Act

Releases

1933.

Company

Act

Release

1945.

11 Securities

Exchange Act Release N<k

4902.

12 Securities

Exchange Act Release No«_

5000.
13 Securities

Series

States.10

a

and

applications

10 Investment

Subcommittee of
the Committee on Interstate and Foreign
Commerce,
House
of
Representatives,
82d Congress, 2d Sess., May 20 and 21,
1952
("Direct Placements of Corporate
Hearings

United

adopted

requiring brokers

simplified

can

3

annual

holders

material

Canadian

contemplated
registration
in respect of institutional
our

of

We

in financial papers, we hear
from investment bankers and the

generally,

The

inated

mergers or consolidations and the

in

read

cur¬

rent year.

grade debt securities should elim¬

general misappre¬
in

for investment bankers in the

temporary waiver of sinking fund
payments—may be made in pe¬

process

Delays

-

help stave

reduce

advance commitments for funds—
a

simplification

of

to

Committee

the

testi¬

before the Subcommittee of

mony

However,

refer to thern at all.

several

hours

considerable

was

of

the

tributing to the

used

There

debt capital.

registering an issue with the
indenture, be¬
Commission, the waiting period
cause, indeed, the Trust Indenture
Act
requires their inclusion in provided by the Act, and the sub¬
stantial legal liabilities imposed
indentures
securing
registered
debt issues.
Their description in by the Act on the issuer, under¬
writer and others, are the cause
the prospectus is not
something
of private placements. I think that
that is of interest to anyone other
than the lawyers, who would read argument has been greatly over¬
in

possible inconvenience to the un¬
derwriters from the delay from

the

long-term

basis

a

quickly

more

supplementary order under
Rule U-50 is required if two or
thought
bids have been made for the

their

with

and

which

that

more nearly1 Equally important as a stabilizing
element is the fact that corpora¬
private place¬
ments. We contemplate using our tions, as part of the private-place¬
ment
acceleration power under Section
arrangement, may obtain

debt issues

matically

time

clear

process

through this technique permit ap¬
propriate changes which, in period

offerings of in¬

grade

the registration of a
securities issue with the Securities

on

it

make

registration

1953 corporate offerings were $8.9
billion, in 1952 $9.5 billion.3 It is
clear that there is a big job ahead

Com¬

stitutional

statement becomes effective auto¬

regional

the

of the business

secu¬

amendment

our

will

adminis¬

the

at

form which would be available for
the registration of

hension

new

affording

administrative

registration

have

that

previously

believe

ministration of the Securities Act
address

strong before the Central States Group
Conference of the
Investment
Bankers
April

of

ders

the

We

this way we are

bidding and dispense with the
necessity of the Commission's en¬
tering routine supplemental or¬

securities.2

pertaining to the is¬

suers
of securities sold in
inter¬
state commerce, have
helped pre¬

matter.

protection of the investing public.
and

rities to be offered at competitive

more

When

in

sions

ing Company Act which eliminate
the

of

facts

that

the

included

into industry.

sibility of full and fair disclosure
the

discuss

be

been seriously undermined
We have adopted rules under
by the
staggering losses which me in-1 the Securities Act and the Hold¬

vesting

registrant's representatives a
chance to appear at the table and

by

enhanced

realistic, practical and vigoroiis
administration.
We hope that a
proper

Division

the

Indenture
Our objective in

the

registrant cannot be set¬

are

needed

ing

between

8(a) of the Securities Act to

laws

largely un¬
period. Some

that

over

substance.
difference

by them, the Commission it¬
considering the matter and
affording both the Division and

remained

modifications

and

procedures

mission
the

ments laid down by the act for the

interest

the

Eisenhower's

no

ences

in

of
the

which

without in any way impairing or
sacrificing the disclosure require¬

public, investor and taxpayer. To
give you an idea of the approach,
let

of close association with the other

are

Day-to-Day

1952, has seen
spread out before it a grand op¬
portunity for improving the dayto-day
administration
of
these

political party
and

November

defi¬

limit

to

tled

Starting
from
this
premise,
however, the new Commission, re¬
flecting the policy of the national

no

and

self is

Laws

than

in

the

ment

Commission
include

Commission

are

matters

opinion

and

administer.

more

to

cases

expeditious

of

between

registrant
doing our
petty and in¬

We

deficiency

of

toration of confidence.

Administration

the

and

eliminate

to

ciencies

ments of the

that the

We

hand and the

other.

In

stabilizing and competitive bidding rules.

member

substantial

one

the

of

industry, has I think
by steady statesmanlike approach
members
of
the
Securities
and to difficult problems, often in an
Exchange Commission in the basic atmosphere of public hostility,
philosophy of
contributed greatly to that res¬

vides

schedules.

significant comments from letters

activity and cites what has been done

five

the

best

the issue, registration, and distribution of securities.
Discusses "fixed price" offerings, and promises clarification

Improving the

has

accommodation

time

Division

the

ease

pro¬

performance

successful

financial

on

American enterprise is now of vital importance to maintenance
of high level of business

law

revisions

trative

for

on

delays in security registration is leading to private
placement of new securities. Says adequate financing of

The

rule

is not
driving corporations into the arms
of the large institutional investors

considered

Denies

we

under¬

When
delays do occur, they reflect dif¬
ferences with respect to matters

objective in inaugurating a broad program of re¬
vision of rules, regulations and forms is to simplify, stream¬
line and speed up the orderly administration of the statutes."

the acts which

and

on

intend to keep it that way.

states "our

SEC

issuers

time

registered issues pur¬
by the underwriters by
negotiated sale.
In my opinion,

to

After

of

the

meet

chased

by

At the outset, I want to affirm
the strong belief of the present

of

to

been distinguished over the years

Commissioner, Securities and Exchange Commission/

to

makingy^very rea¬

effort

the

J. SINCLAIR ARMSTRONG*

By

also

is

nance

The New

Thursday, April 22, 1954

4942.

Exchange Act Release

Volume 179

Number 5318

...

The Commercial and Financial Chronicle

system annual reporting form for
public utility holding companies.14
We

have, put

proposed

for comment

out

revised

forms

of

quar¬

mails

or

any

means

or

instru¬

mentality of interstate commerce,
or of any
facility of any national
securities exchange,
or
for any

terly and annual reports for regis¬ member of a national, securities
tered
management investment exchange to effect either alone or
companies 15 and applications, re¬ with one or more other persons
ports and other forms pertaining any series of transactions "for the
to registered investment advisers.10 purchase and/or sale of
any se¬
We have adopted a rule reliev¬ curity registered
on
a
national
ing exchanges on which a security securities exchange for the pur¬
is

admitted

to

unlisted

(1801)'

bulk

of

day-to-day

transactions
new

familiar
the

bold

Commission's

contravention

difficult

reported by

regulations

the issuer where the

security is fully listed

another

on

•exchange.
We

surveyed in

single broad
reporting prob¬
by the annual
a

sweep the over-all

lems

represented

reports

of

listed

companies

on

may

the

as

prescribe

as

rules

and

Commission
necessary

or

10-K, the proxy statements
companies
soliciting
proxies, the annual reports of the

unified
to be

whole.19

good

no

There

appeared

why a com¬
pany which solicits proxies should
Vbe required to duplicate the in¬

formation

contained in

^statement

'Which,
the

reason

in

in

practice,

Commission

-within two
the proxy

the

is

based

on

of
and

and

to

the

narrow

area

of

to facilitate
ket

individually by letter or tele¬
phone, case by case. Thus the vast

Division

our

of

for

the

the

may

ing

distributions

with

the

com¬

should

be

pro¬

After

study

had

these

will

Ias

the

in

connection

purchase of rights, such

no

experience

so-called

"Shields

by

Plan."

of

the

in

Commission,
promulgated for

the

21 Securities

Act

Rule

426.

Exchange

Act
.

'

We

have

looked

sidiaries

of

,

such

holding

filed

Section 6(b) of the Publics

Utility

Holding Company Act of

Rule

statutes

administer

we

Continued

carefully

.

on

with
cases

or4hree months after
material. By making a

minor change in the proxy rules,
we
determined that the informa¬
tion required by these rules would
Ifoe

entirely adequate for purposes
annual report with respect
subject matters covered by

<®f

an

to the

these rules.19 We
these

revisions

hopeful that

are

of

the

Everything

in

grows

Brooklyn

Commis-

r.sion's reporting requirements will

•give

further impetus and incen¬
the publication by listed
'companies of reasonably detailed

Homes

•annual

ter

tive for

reports

shareholders.

to

businesses
industries
Dodger
hopes—they're all growing bigger and bet¬

Under the revised proxy rules, fi¬
statements
contained
in

nancial

the annual -report
Jn

to shareholders

be incorporated by reference

may

the

proxy statement, provided
compty "with the Commis¬
accounting rules. We sin¬
cerely hope that more and more

they

sion's

reports
clude

•and

shareholders

to

balance
loss

which

and

sheets

and

surplus

the

meet

will

in¬

—

—

every year

And that

a

Commission's

(benefit to shareholders and

ac¬

man¬

us,

installed

that's

a

applications be
registration of addi¬
a

More

most

Has "

been

eliminated.

pew

rule,

the original

more

rshares

registration

or

amounts

the

reduce

year.

gas

of

unissued

gas

becomes auto¬

issuer's

—a

of the

Commission,

German

issuers

and

are

at¬

tion

about

these

issuers.20

14

Holding

our

over

3600

management

of Brooklyn

'and

company.
men

Company

Act

our

Our*

women

efforts, through sound

careful expansion,
to

bring better living to millions of people in

Brooklyn and Queens.
»

I1

1

..

•

V

•

.

Dividends

1953

■

Net Income

.

on

preferred stock

Net income after

$3,738,000

1952*
$3,152,000

222.000

....

preferred dividends

Average number of

of

Release

paid

You may obtain

directly

use

and

con¬

of

progress

275,000

Union's Growth

you

the

good

through reliable and efficient service,

.

know, Sec¬
of that act makes it
by

and

1

Brief Statement

common

Dividends

indirectly,

growth and

shares

.

.

3,516,000

2,877,000

.

.

.

1,634.000

1,571,404

.

.

$2.15

$1.83

.

1.50

1.50

also considering

"unlawful for any person,

a

^

Exchange Act. As

or

appliances.

look to the future with

we

"family" of

re¬

Net income per common

9(a)(6)

TV!

Brooklyn Uniort

in Brooklyn Union had

will continue their

gas

rules relating to the stabilization
of securities under the Securities
tion

on

;j

t

Distribution
we are

watched

ar¬

-

.,

The Question of Fixed Price

Finally,

we

and

year

frigeration, water heating and clothes dry¬

tempting to have made available
adequate financial informa¬

we

appliances—for home heating, cooking,

adopted rules permit-:
ting trading in validated securities

more

Yes,

for the

Enjoyed modern, automatic

We have

of

People Saw Brooklyn Union

fidence in the

gas,

metro*
f

-

community

complying with the Commission's
requirements and the administra-1
tive burden

heat.

billion cubic feet

To prepare

1952!

17%

a

in the New York

are

modern automatic gas

and for underground storage facilities.

More People

in

work

than in

Used

$2.15,

expert home economists and the interna¬

welcome and eloquent

preference for

was

tionally famous Dione Lucas demonstrate

To

ranged for additional supplies of natural

matically effective when they are
issued. This change will eliminate
approximately 500 applications a
."year and will materially simplify
and

previous

ever-increasing demand for

is deemed to apply
registration of the entire class
the

Gas Was

listed class of

^application
"and

More

share

area.

Home-makers

ever

.

1952 for 6809 stockholders-*

75% of whom

heating units

as many

in any

over

politan

that

for the

tional amounts of

for

as

indication of the

'

Under the

that is proud to be part

before—nearly twice
were

Under the revised rules, the old

-securities

gain

thriving community,

People Switched to Gas Heat than

$6,500,000

People Shared in More Earnings!

Net income per

WE HAD A GOOD YEAR IN 1053
More

agements alike.

requirement

More

growth is reflected in the

growth of The Brooklyn Union Gas Com¬
of such

to

—33% higher than in 1952.

profit

statements

counting requirements. Such a de¬
velopment'will
be
of
mutual

filed

ing. Appliance sales soared

—

in Brooklyn and Queens!

pany—a company

the

Main

Office

or

per

share

share

.

.

.

.

.

Brooklyn Union's annual

report

by stopping in

at our

by writing the Secretary of the Company

No.

*2430.
15 Investment

No.

Company

Act

Release

1957.

16 Investment

Nos.

71

and

Advisers

Act

Releases

Exchange Act Release No.

4914.

Securities Exchange Act Release No.

4991.
19

Brooklyn

Union

Gas

72.

17 Securities

18

The

Securities Exchange Act Release No.

4979.
120 Securities

Nos. 4983 and

Exchange

Act

5011.




Releases

com¬

panies.

report

in.v most

utility

holding companies and of public
utility companies which are sub¬

the

at

competitive bidding rule,
U-50, applies to issues of se¬

curities of registered public

statutory authority,
just on implied or fancied

powers.

22 Securities

X-17A-2.

Rule

The
Rule

rect and clear
and not

Bidding

tunity of describing how the pro¬
on which we are presently
holding hearings, developed.

di¬

on

a

under

posal,

principle that administra¬

tive action should be based

subject of stabilizing, the drafting
of a stabilizing rule covering most

rules

our

I would like to take this oppor¬

This Administration is dedicated
to

of

one

Competitive

VWe hope that the promulgation
of

the

searching has involved

of

Public

comment.

complications

inherent

to be found

istered under the Public UtilityHolding Company Act of 1935.

the

be

Commission's

difficulties

of

Utility Holding Com¬
Act, Rule U-50, which pro¬
vides, among other things, for the
manner of
offering new issues of
public utility subsidiaries of pub¬
lic utility holding companies reg¬

stabilizing transactions
be made, and the third cover¬

see.

Because

process

jurisdiction

pany

which

Commission.

and

of

ess

and soul

general stabilizing rules will
lead to fewer informal interpreta¬
juris¬
tions, but recognize that inter¬
diction over stabilizing to be as¬
pretive questions will arise which
serted by rules and regulations,underwriters should submit to the
published and available for all to
sible

the
our

Congress. This proc¬
statutory self-examination

study

at

up, case by case, over
period of time, like the common

if

see

in particular areas is

distribution, the second cover¬
ing the times, methods and levels

been built

continue

in the acts of

can now

a

that

Regulation X-9A6-1 under this
provision was adopted in 1940 and
limited

by

will

pared three rules, the first dealing
trading during

law. This process has taken place.
It should therefore now be pos¬

is

study

with underwriters'

policy in the past
feeling that the
stabilizing were so
novel

and

looking to

report that the Division has pre¬

the

prehensive rule
mulgated
until

types of stabilizing

proxy

annual

an

was

usual

Trading and Exchanges. I

in

a

stabilizing the price of a security
an offering at the mar¬
or at a
(changing price related
so-called
"undertaking" compa¬ to the changing market price. The
nies, and the requirements for the practice applicable to a fixed
price
registration of additional shares offering has been embodied in a
'Of a listed security on Form 8-A, number
of
interpretations, some
•and have attempted to deal with of which
were
contained in re¬
"these
reporting
problems
as
a
leases, but most of them rendered
listed

disclosure

the

transactions has taken much time

that

appropriate in the public interest
or for the
protection of investors."

Eorm

•of

of

with

stabilizing
may occur 21 and the requirement
that stabilizing transactions be re¬
ported within 24 hours.22
The

problems

such

face

prospectus

of pegging, fixing, or stabiliz¬
ing the price of such security in
of

stabilizing

connection

have not been the subject of any
Commission rules, other than the

trading
privileges from reporting informa¬
tion which duplicates information

pose

in

public offerings of securities

29

176 Remsen

Slreet, Brooklyn 1, N. Y.

•

Company

TRiangle 5-7500

®

page

30

30

The Commercial and Financial Chronicle

(1802)

i

'

'

"

'

'

•

'

,

and

29

has

serious questions about some
of the bases for the adoption by

protection

of

investors

sale

or

of

the
the

security

any

I

con¬

or

shall exempt from
provisions of subsection (a)

sumers,

issue

this Commission of Rule U-50 in

by

subsidiary company of a reg¬
holding company, if the
issue and sale of such security are
solely for the purpose of financ¬
ing the business of such subsid¬
iary company and have been ex¬
pressly authorized by the State

;

can

it

not sug¬

was

utility company,
government official or
or
person
outside the

gested

by

banker,

istered

.

you

Commission table,

any

agency,

commission of the State in which
such subsidiary company is or¬

,

that the pro¬
originated at the

assure

revision

posed

.

any

Commission.
At

the

mission

the

time

present
made

has

matter

decision

will

and

the

without

Com¬

decision

no

in

make

not

further

a

careful

exhaustive study in the light
the
hearings held and the

and

of

ganized and doing business." The
subsection
(a) referred to pro¬

ment

vides for the

and

mission

of

filing with the Com¬
declaration

a

regard¬
ing a
financing plan and the
taking of action by the Commis¬

briefs, memoranda and oral
that

have

argu¬

submitted

been

made, including those of the
regulatory authorities of the af¬
fected States.
.

mention

will

I

sion to make such declaration ef¬

one

fective.

before

;

closing

sion's program,

Declarations relating to a
financing plan may only become
effective if they meet the require¬
ments

of

Section

of

7

that

f<**hich lays down standards

as

their subsidiaries may issue.
We have recently put out

which

a

proposed

would

exempt from the
bidding requirements

competitve
of

the

Commission

subsidiary
and

for

securities

companies

sale of which

pressly/ authorized
commission. 23

the

have

issue

been

the

by

of

ex¬

State

What did the Con¬

gress mean when it said the Com¬

mission "shall

exempt" securities

expressly

authorized
commissions?

by

State

When the Commission first

sidered

this

con¬

of* statu¬

question

tory interpretation in July and
August of 1963, it was faced with
other factors;* The first
that the Commission was
two

in

staff

a

engaged
imposed by

reduction

the

exigencies, of
budget.
We
were

was

a

diminished

cutting

the

number of available people in the

time,

or from time to time,
reasonable periodic special

other

or

iners
the

sion

were

or

about 8%,

looking for

eliminated

fecting

without

public

areas

could

adversely af¬

interest.

The

proval by the Commission of
curities
State
self

authorized

expressly

commissions
as

an

in
be

suggested

of

of

the

State regulatory function for
which
an
exemption had been

specifically
Federal

carved

out

by

the

statute.

Secondly, you
will recall the very tight
money
market of May, June,
July and
August of
1953;
During these
months

confronted by a
requests, both formal
and informal, for
exemption from
the competitive
bidding rule by
companies which, in the exercise
we

number

of

the

were

of

best

judgment their

man¬

agements

were
able to bring to
bear, felt that they could not suc¬
cessfully
market
securities
at
competitive
bidding
under
the

rule.

Most

of

these

requests

for

exemption

we
denied, but not
wondering if Rule U-50

without
itself

not deficient

was

by

reason

of its failure to accord
any recog¬
at all to the
statutory ex¬

nition

emption in

cases

as

much

or

as

broker?dealer

'^inspection

.

available

for

the

current

fiscal

year, and expects to have avail¬
able for fiscal 1955, only about 42

States

1953, Judge Harold R.
in
the
United
District
Court
for
the

sitting

Southern
released
trust

District

of

New

York,

his

case

opinion in the anti¬
against 17 investment

23

Holding Company Act Releases Nos.
12217-X, 12314 and 12236.




and

manpower

Con¬

money.

versely, long term omissions to in¬
spect some firms cannot be jus¬

gram.
may

offices

of

NASD,

been

ing

inspectors

firms

to

as

State,
which

inspected by
These cooperat¬

agencies

organizations

and

make

information

similar

as

to

uling of inspections by the co¬
operating agencies and organiza¬
tions

will

coordinated.

be

dealers

much

troller of the
mission

same

examined

are

is

examined

are

the

way

as

bj? the Comp¬

Currency. The Com¬
much

very

with

the

gram

concerned

and is taking

weakness

of

this

pro¬

steps admin¬
istratively within the regional of¬
fices to improve both the
quantity
and

quality of broker-dealer in¬

spections.

course, a public agency, such as
the Securities and Exchange Com¬

mission, cannot abandon its func¬
tions to private organizations, nor
members
of
the private
groups approve the use of their
inspectors as informers to public
would

authorities
ters

with

respect

to

mat¬

not

involving defalcations or
insolvency. But even though the
of inspections made by the

scope

tween

Federal, State and industry
broker-dealer inspectors will lead
better

to

results

are

of

some

the

aware, members of
national exchanges

and members of the National As¬

sociation of Securities Dealers

are

subject to certain audits and in¬
spections.
An additional weak¬
when you consider the prob¬

ness

lem

generally is that in only

of the 48

at

gram

brokers
two

and

dealers, and in only
States

authorities have
powers

10

states is there any pro¬
all for the, inspection of

of those

do

the

State

sufficiently broad

to engage in

routine inspections.

a

program of

This

seems to

place

responsibility to act very
squarely on the Securities and Ex¬
change Commission whether we
like it
You
and
to

or

not.

the

the

total

securities

industry,

indeed

consider

spections

also

be

concerned

that

turned

the
up

interested,
as

the

banking

conditions

fraternity

*

*

which

I

de¬

try, and that renewed emphasis on
broker-dealer inspection pro¬
gram
of the Commission is as

the

much

in

interest

public

interest

your

of

the

we

in

the

and

the

as

investors

charged with pro¬

are

tecting.

finally, let

me say a brief word
legislative program. As
many of you know, the Commis¬
sion assisted the appropriate Com¬
mittees of the Congress in the for¬

about

our

of

controversial
Acts.

The

technical

some

amendments

Commissioners

non-

of

the

unani¬

mously recommended these pro¬
posals and they have received the
approval

Budget
the

the

of

Identical bills
the

Senate

held

by not a few money market specialindicate that there will not be any long-term financing by

for the Government is taken

ists to

;

Treasury in the foreseeable future.
The trend of economic
still the ruling force in the money market picture,
according to many in the financial district, and this appears to
the

conditions is

give further evidence that

easy

conditions could still be-

money

,

easier.

come

The lethargy which has been so prominent in the

Government
activity and investment
buying of these securities. The long-terms and intermediates have
taken a great deal of the play away from the shortest obligations
because lengthening of maturities has again become a very important part of the market's action.
•
" *

...

market of late has given way to increased

,

-

<

sion

House; hearings

which the -Commis¬

appeared and

our

testified at length.
the matter is in

Congress, and
as

to

the

ment

would

From here

on

the hands of the

chances

be

of

The

time

was

the

presently

The bill

pending

Committee

House

were

or

was

in

the

Interstate

on

Committees

and

greatly impressed

violating Regulation T,
40 were
violating the hypotheca¬
tion rules, 360 were
violating con¬

public

firmation and bookkeeping
rules,

leaders.

ability

and

was

a

reaffirming of the .i\

monetary authorities have been t
To be sure, the reduction in the '

much

now.

more psychological than of immediate ;
tangible value, because the deposit banks do not need to make any r
great use of this implement at the present time.
It did, however, .
help to bring the rediscount rate more in line with the bill rate, x
Money market specialists do believe, nonetheless, that the lower- v
ing of the rediscount rate will have a favorable effect upon the >.■
trend of Government security prices, because there will be less
hesitancy to put funds to work in Treasury obligations, with the

easy money program

being confirmed by the

powers

that be.

Cut

in

Reserve

Requirements Deferred?

The lowering of the rediseouunt rate has led certain
money
market followers to feel that there may not be an immediate lowerinpr of reserve requirements.
They are of the opinion that there
will be

more

vigorous

1

;

market operations to give the money
market the needed ease.
Greater near-term flexibility would be
the result of a policy of more intensive open market
operations,
according to certain money market followers.
On

the

other

duction -in

reserve

open

hand, there are those who believe that
requirements should be made at once,

follow-up to the decrease in the rediscount

a

re¬

as

a

!

rate.

They point out
that the money markets should be
given the additional help of a
larger supply of investable funds because this would eventually
have

•

favorable influence upon the economy, which could stand

a

bolstering at this time. It is also being noted that on occasions
in the past, when the business outlook was not as uncertain as
it

a

appears to be now, there were important lowerings of the
requirements of the commercial banks.

Treasury to Rely

on

:
.-■■■

reserve

Short Issues

The

borrowing by the Treasury of $1,000,000,000 on 52-day >
tax anticipation bills to meet the
expenses of the Government, \.
in the opinion of some
money market specialists, means that a long-term issue has been pretty well relegated to the distant S,
future, in spite of the reports that another two billion dollars will *
have

be obtained before the end of the
present fiscal year. '
of tax anticipation issues is likewise a continuation of the
policy which has been in vogue. *
'

The

to

use

It is felt that when the
Treasury comes into the market
again for funds, the issues that will be offered will be tailored
to

meet

the

that

needs

of

the

short-term

commercial

banks.

intermediate

or

term

This

most

securities

;
-

likely^

will

be

'.

used, because obligations of this kind would appeal to the deposit >
institutions.
By selling issues to the commercial banks, there 1
would be a creation of deposits which are
purchasing power, and

this is

trend

what is needed

which

it

has

been

in

to

help pull the economy out of the

for

some

time.

By financing the needs of the Treasury through the sale of
securities that fit the requirements of the deposit
banks, there
will be plenty of room left for non-bank
investors to take care
of the mortgage market as well as the
corporate and municipal
issues that will be coming out for sale.

■

Investors Taking Hold
Although there had been

a very large amount of
profession¬
alism in the Government
market, and this made it very susceptible^
to easy movements in both
directions, the recent

'.velopments have taken
traders

and

dealers.

a

It

great
seems

deal of the
as

monetary defrom the
investors have again

play

away

though
stepped into the picture to take command of the situation. This
means
that Treasury
securities are again moving out of the
market into strong hands.

Clark, Land street Wire

*

-

me

devotion

interest of

our

their

with

NASHVILLE,
Landstreet
315

&

Fourth

change,

Tenn. —Clark,
Kirkpatrick, Inc.,

Avenue, North,

the

of

Midwest

are now on

mem^
Stock Ex¬

the Goldman,

Sachs e& Co. wire system.

to

the

(Special

to

The

Financial

Chronicle)

SPRINGFIELD, Mass.—William
C. McCorkindale has formed East¬
ern

at

Fund Association with offices

1387

the

Main

Street

securities

Corkindale

to

business.

was

engage
-

Mr.

previously

in

Mc¬

with

Gage-Wiley, Inc.

Conservative Inv. Service
Charles J.

L. A. Dessez

Krueger is engaging

in the securities business from of¬

fices

legislative

Forms Eastern Fund Ass'h

Goldman, Sachs Co.

Foreign Commerce. The priv¬

staffs

the

which

some

rediscount rate

Commis¬

ilege of working with the Senate
and

sponsoring for

bers

is

policy

money

enact¬

appropriate

anything.

House
and

easy

comment by me

no

bill's

"Chaii'man

sion's function is to administer the

and

Psychological Impact
The lowering of the rediscount rate

the

introduced in

were

and
at

of

in accord with
the
President.

of

program

were

Bureau

being

as

law, not to make it.

purchased*

JK.

bullish developments,

two

namely the reduction in the rediscount rate and the financing of
through the sale of 52-day tax anticipa¬
These two factors give added confirmation of the fact ,
that the trend of interest rates is still in the same direction, down- ;
ward.
The use of short-term tax anticipation bills to raise money *

means

passed by the Senate unanimously

in¬

found to be in financial dif¬

securities

serious

are

by

is

for

moment ago

are,
number of

ficulties, 154 were found to be
charging customers unreasonable
prices

a

we

our

had

has

tion bills.

v

I submit to you members of the

worth

might

violations

141

from

of manpower and money available
for this phase of the regulation of

mulation

As you

market

Of

from the standpoint of the indus¬

-

Government

the Treasury's cash needs

will

recently

Commission.

will

the

to

exchange

and
information

have
the

Commission

the

available

make

scribed

broker

...

.

Governments

on

By JOHN T. CHIPPENDALE,
The

Therefore, a plan has been
worked out by which the regional

registered

broker-dealers,
very thin inspection pro¬
Unfortunately, the public
have the impression
that

/

tified.

a

were

occurred.

Duplication of examinations by
than one inspection within
short periods of time not only are
an
unjustified
harassment,
but
represent an unnecessary waste of
more

investment

On Oct. 14,

event

hope will work

we

improvements.

that

inspectors.
When
consider that there are over

Medina,

another

which

broker-dealer

discouragingly large.
In fiscal
1953, when 686 brokerdealers were inspected, 40 filrms

Then

month

you

in which the State

regulatory authority appeared to
be exercising the jurisdiction
spe¬
cifically referred to in Section
6(b) of the Holding Company Act.

ap¬

the

program depends primarily on the
availability of funds, and unfor¬
tunately
the
Commission
has

banks

a

or

see of all of the agencies and or¬
ganizations making broker-dealer
inspections could work out a co¬
ordinated program.
Understand¬
ings have been reached in the last

inspecting as it deems neces-. Commission differs from the scope
sary or appropriate in the public
of those made by others, we be¬
interest.
lieve that this * program of
co¬
As a matter of fact, the extent
operation
and
coordination
be¬

se¬

duplica-

unnecessary

Commis¬

necessary

Dealers,

Inc., and the New York, American
and Midwest Stock Exchanges to

little

pretty

^/oon by the Federal Government

the

as

the Commission do

ap¬

by
it¬

exam¬

public interest
or
for the protection of invest¬
ors" of registered broker-dealers.
The legislative direction is that

4,000

we

in

by

representatives of

deem

may

propriate

this is

and

other

or

in

which duplicative work

examinations

Commission

Commission's headquarters office

Washington by 43,

17(a) of the Se¬
Exchange Act, the Com¬

mission is empowered to make "at
any
such

Na¬

the

Securities

of

Reporter

Securities

inspections made by them. Sched¬

Under Section
curities

of

of

available to the Commission

Broker-Dealer Inspection

to

rule

new

of the Commis¬

relating to brokerinspections. '

dealer

act,

the types of securities which reg¬
istered
holding
and
companies

comment

further part

Association

Our

past year

Administrators, the National As¬

very

1941.

the

over

representatives

sociation

by rules and regulations or
order, subject to such terms and
conditions as it deems appropriate
in the public interest or for the

:

"

discovered.

were

conferred

tional

banking firms. The opinion raised

Thursday, April 22, 1954

'

number of other miscellane¬

with

provides that "the Commis¬

sion

violations

Recognizing the seriousness of
this
situation,
the
Commission

The New Stewardship
In Securities Regulation
1935

a

ous

Continued from page

...

-

at

New

York

name

of

Service.

420

Lexington Avenue,
City, under the firm

Conservative

Investors

Opens.:

BETHESDA, Md.—L. A. Dessez
is

engaging

ness

in

a

securities busi¬

from offices at 5409 Harwood

Road.

Number 5318

Volume 179

The

...

CommercialjtnLcL Financial Chronicle

(1803)
r

News About Banks

Assistant
J.

NEW

BRANCHES

NEW

OFFICERS, ETC,

Bankers

and

REVISED

W.

Los

The

Robert C.

pointed

Dallery has been

Vice-President

a

ap¬

the

of

Chase

National Bank,

it

announced by Percy J. Eb-

was

Mr. Dallery is

bott, President.

handling

official

the

of

member

New York,

bank's

the

v

a

staff ;

commercial

business in the New York metro¬

politan district.
staff

$2,000,000 to surplus within a year
it was announced by James M.
Kemper, Board Chairman. Direc¬
tors of the Bank have authorized
the transfer of

$2,000,000 from un¬
profits to surplus, boost¬

divided

June surplus was
As

Bob T. H. Hul-

were:

City, Mo. added a second

Kansas

ing the latter to $16,000,000. Last

\

V Other promotions on Chase's of¬
ficial

Company,

Trust

Commerce

result

a

raised $2,000,000.
the

of

action,

the

Second Vice President in the
petroleum department; Francis X.
Kosch, Assistant Cashier, con¬
sumer credit; Walter J. Woodger,
Jr.,
Assistant Manager, foreign
department, and Harold D. Hammar
and
Gilbert H.
La Piere,

Bank, which has beeri in opera¬

petroleum engineers.

Kemper said.

sey,

ital and surplus of

lifted

was

to

tant

thur J.

Dahl, Times Square; George A.
Hughes, National Park; Hugh F.
G.

Metropolitan,

McGrath,

H.

and

Frederick Tooke, Madison Avenue.
#

*

been

Trust Company, New

Bankers

York, it

has

Vice-President

Assistant

elected
of

*

Hartman

N.

William

announced

was

April

on

The

*

capital

National

19

by S. Sloan Colt, President. He

Latin Amer¬

ican business in the Foreign

Divi¬

Of

in

the

California,

was

from

$600,000

to

stock

dividend

in

San

Any
must

increased

plan
be

began his career
with Bankers Trust in 1936, and
Hartman

Mr.

promoted to Assistant Treas¬

was

Assistant Vice-

urer in 1946, and
President in 1948.
i

*

*

%

in

Formed

the

nounced

Scholle

C.

Vice-Presi¬

Assistant

as

Oliver

and

Gerard

Dudley

dents in the commercial and bank
relations

department.

and Mr. Scholle were

Mr. Gerard
both Assis¬

Secretaries of the Bank.

tant

curities business.

1865

trict.

cording

Arthur
i

to

President.

❖

the

as

Grimm

#

New

York

Elliott McAllister, President of
The
Bank
of California, N. A.,

New

York

admit Lawrence Wiltshire to lim-

pany,

San Francisco, Calif.

ited

ing.

William W.

partnership

^iwoituw
N

C

O

announced

York,

of

election

E.

April 22 the

on

E.

New
to

Stewart

the National Bank

O

R

of

National

Oneida,

New

from

were

RITER

J

3rd, President

with

common

stock

of

York,
$60,000

as of the close of business
April 2, 1954. The consolida¬
tion was effected under the

merged
on

of "The

and title

charter

Oneida

Valley National Bank of Oneida."
At the effective date of consoli¬

•

dation the consolidated bank will

of $600,000, di¬
vided into 24,000 shares of com¬
mon stock of the par value of $25

have capital stock

each; surplus of $500,000; and undividend profits of not ,less than

$35,000.
*

*

*

.

reflected benefits of the recent important

changes in the company's business structure

value

was

Dictating

Equipment

reduced

shares

' r-

*

*

Copy of Annual Report ^

Winston-Salem, North Car¬
and the National Bank of
Burlington, North Carolina,

available upon request.

olina,

and

charter

Wachovia

the

of

the

under

merged,
title

and

Bank

Company effective April 1.
main office and

Trust

the former

Both

Burlington branch of the Na¬
Bank of Burlington will

be

operated

as

branches.

Amarillo,

Bank,

its

increased

Texas,

$41,548,489

$38,691,228

Earnings before income taxes

2,862,041

2,005,948

Provision for income taxes

1,382,546

932,166

Sales, less returns and allowances

if

of De¬

$50,000, and Deport State
Deport, Texas, with com¬

Bank,

Pa.,

of

Company

on

of the close of business April 6.

in

Philadelphia,

April 15 promoted William
formerly Assistant Vice-

to Comptroller

of the

Carr joined the Provident
October,
1951,
as
Assistant

Mr.

Vice-President.

The

Mercantile

*

National

Bank

of

Chicago, Illinois, increased its
common
capital stock from $1,-

750,000
new

to

$2,000,000

by

sale

stock, effective April 6.




effected
of

title

of

I

Net

1,201,782

l

3.56%

3.11%

—-

earnings for the year

Percent of sales
Per share of

common

l

No. of common shares

outstanding

l

I
I

stock (after

providing for preferred divi¬
dends)
i

l
I

3.05
454,886

2.58

I

I

430,231

l

I
«

I

l

At the effective date of

have

capital stock of $50,000, di¬

vided into 500

of

stock

the

shares of common
par

value

of

$100

each; surplus of $50,000; and un¬
divided profits of not less than
$25,000.
if

Frank

L.

California

On
On

paid:

I

King, President of
Bank,
Los
Angeles,
has
announced
the

93,230

common

shares

common

430,231

1.10

1.00

stock

earnings paid in

39.3%

678,321

14,156,840

13,640,979

19,789,689

Earnings retained for the year

43.6%

897,884

dividends

T.

Brett

Cashier

to
and

Vice-President

and

18,627,805

O* S. Aultman, for¬

merly Cashier, to Vice-President.
J.

B.

Thompson, Head Office,

formerly Assistant Vice-President,
elected'.* Vice-President

assigned
Santa

to

Working capital at end of year

the

bank's

and

office

Shareowners' investment at end
year

Per share of common

of
40.19

stock

Elected Assistant Cashiers were
S.

Main

Black'-'hhd

R.

39.80

MA

Zee, Beverly llills Office, former¬
ly Assistant jp-ashier, were elected
Assistant Vice-Presidents.
R.

1

in

Monica.
N. H. Thomas,
Office^ and John Van der

u

l
l

(plus stock

dividend in 1953)
Per share of

93,230

488,381

preferred shares

Percent of net

if

if

Dividends

/1'v

l

1,479,495

period adjustments

128,000

consoli¬
dation the consolidated bank will

First

Primary:

l

National Bank of De¬

"The

Main
*

and

&

Batteries
V.,

l

port."

was

*

was

charter

the

California,

Bank.
.

consolidation

under

B. Carr,

President,

consolidated

stock of $28,000,

I

Storage

l

if

The First National Bank

mon

I

I

Prior

$1,000,000 to $1,300,000.
if

I
*

I

National

Amarillo

1952

I

❖

*

The

1953

election of Vice-President Arthur

Provident

Directors of The
Trust

i
,!

YEAR

THE

pany,

The

New

JERSEY

Wachovia Bank and Trust Com¬

000, and The First National Bank

Sherrill,

ORANGE,
NEW

I

HENRY G.

to $20, five shares of
issued.
The original

stockholder now has nine
of stock for each share.

as

Sherrill,

WEST

EDISON, Chairman Board of Directors

1921,

$100

stock

York, with common stock of $500,of

0

of Com¬

port, Deport, Texas, with common

Valley

Oneida,

First National Bank Build-

I
CHARLES

stock of
Bank

E

was

When the par

its

*

❖

Oneida

f

A

a 20% stock divi¬
paid. Then in 1945 a
50% stock dividend was declared.

in

merce

Board of Directors.

The

of May 1st.

as

MOtU
P

R

took

Trust

Commerce

When

capital stock by a stock
dividend effective April 9 from

Company,

Co., 44 Wall Street,
City, members of the
Stock Exchange, will

in ex¬

common

$

CORAL GABLES, Fla.—Edwin
F.1 Ashley has become affiliated
with Victor J. Lawson & Corn-

&

Kansas

Deposits today are
$430,000,000.

over

ac¬

Kleeman,

S.

if

Trust

Irving

York,

New

With Victor J. Lawson

Grimm & Co. to Admit

April 15 issue of the "Chronicle,"
page 1696.

of

cess

the Board of Directors of Colonial

Company,

approval."

|

tional

Trust

formed

&

Savings

the

L. C. Irvine has been named to

Pekar

Opens

has

bank for their

$800,000 by a
April 9.

Association with a
capital of $20,000, the Bank,
through absorption of smaller in¬
stitutions, has become the largest
in the Tenth Federal Reserve dis¬
City

Trust

York has an¬
appointment of H.

New

J.

Pekar

Company
with offices at 25 Broad Street,
New York City to conduct a se¬

of $48,000,000.

^

Bank

Exchange

Corn

Company,

William

J.

mitted to the stockholders of each

effective

previous increase on April 1 of
$100,000, effective April 1, by sale
of new stock was given in the

*

William

formulated

approved by the super¬
visory authorities and will be sub¬

A

*

is

which

Wm. J. Pekar Co.

—>

$30,000,000

excess

dend

sion.

nut Street.

a plan to merge
California, N. A.,

of

firm

Co.,
Inc., from offices at 1510 Chest¬

taking

Crocker First National Bank, and
California
Bank,
Los
Angeles.

of

stock

Bank

Bank

'

has been assigned to

are

the

$3,750,000, Mr.

institution has shown net earnings

Manager

"Informal discussions

Office,

under

of Charles J. McCue &

The bank's loan limit to any one
line

Belter, 48th Street; Joseph

Meara

branch.

name

release:

news

Pa.—Charles
engaging in the se¬

is

business

$25,000,000. In

at Metropolitan
Newly-appointed Assis¬
Branch Managers were Ar¬

named Manager at

was

|8th Street branch and George J.

ing

McCue

curities

addition, undivided profits are in
excess of $5,000,000.

in capital,
surplus and undivided profits ac¬
counts, only $5,000,000 was paid-in
and $25,000,000 came from earn¬
ings. In addition, the bank has paid
dividends of $23,000,000. Thus, the

Loveland

J.

tion since 1865 has combined cap¬

"

In domestic branches, LeVan H.

Rafael,

PHILADELPHIA,

King, President,
Bank,
Los
Angeles,

place to explore
*

common

First

C. J. McCue Co. Formed

Bank,

L.

Calif, have authorized the follow¬

and

Angeles.
#

*

California

Bell-

Bellflower

in

Wilshire-Westlake

CAPITALIZATIONS

the

the

of

Manager

Frank

National

First

Crocker

and

Snyder Assistant Manager

the

of

of

Fry was appointed

Office

flower

CONSOLIDATIONS

W.

of the Board

Crocker, Chairman

Clemmensen, F. C. Swanson, and
W. H. Wieland, Head Office.
Charles

31

i

Compressed
Gases

H. Thorburn,

Office,'^nd H. C. Betz, H. S.

i

!

Instruments

32

The Commercial and Financial Chronicle

(1804)

Continued,

from page 13

'

monthly basis, but use of annual
figures makes possible the sum¬
mary shown below.

;

Durations

to long term
trend)

would

production,
and
power," the declared purpose of the Employ¬
ployment,

(a)

11

u a

all authorities

y

1869

be

and

convertible

freely

1883

1892

1946.

the optimum

output oi prod¬

ucts.to purchase.
. ■,/
(c)
"Supplement C"
what
was
responsible
Great Depression
thus

^

•

gold standard

y<12)

^

To

ple

degree of

some

unsound

exposing

control

the

It would prevent the subtle
embezzlement that continuing in¬

banks.

central

ments and

<a)

The latter

govern¬
*

flation effects.

obtain

can

over

public

gold
for the

of

Losses suffered by

life

United
Social Se¬
reserves
and savings ac¬
paper currency
pay¬ curity
counts from the depreciation! of
ments; but
the
dollar
since
1940
already
(b); American- citizens cannot'
obtain
from
their
Government nearly $158 billion.
demand

on

in

exchange

Government's

promise on
to make such

owners

States

our

insurance,

savings

bonds,

promise

to

Federal

pay

All

demand.

on

Eeserve notes, most of our present
currency,

pledge

the unequivocal
the
United
States

carry i

that

..

.(c) It would

help to preserve
enterprise and

the system of free

free

markets

that

has

Nation the leading

made

the

industrial

pf. thepvorld. -It. is diffi¬

power

He

%\2

1947

much

gain

distortions

and

and

the.

failed

to

long-term

prolonged

takes

him

Certainly, there is

increase

for

trend

p e r i o ds, 1873and - 1929-1941.
still off gold after

of the gold standard was
in question from 1893,

seriously,
through the
Bryan - McKinley
campaign ;, of
1896; but was unqualifiedly reaf¬
firmed by the passage of the Gold
Standard Act of 1900; and the ru¬
of Mr. Roosevelt's intentions

to abandon

the gold standard be¬
widespread late in
1932,

confirmed

nation
ent

in 1933, and the
only to the pres¬
gold standard in

returned

incomplete

1935.

Several

more

adjustments,.

covery,
thus hesitate,
falters and drags
oyer

can

years passed

Probably

before emergency powers to alter

the

to

gold

is

standard

question,

basis for

place, careful scrut¬

'•■I

orF

the

demand

promised, the Treasury in recent
has given more promises to
pay dollars. Such subterfuge, the
years

to

if there

the

of

honest

an

minimize

the

people.

need

for

is

ence

to the

gold standard both al¬

expedites business recoveries. The
Although all money-credit
evidence is available in two forms,
require some control, if
which are independent and con¬
only to prevent abuses, the auto¬
firm each other.
matic features of the gold stand¬
The National Bureau of Eco¬
ard give1 early warning of abuses
nomic Research has compiled a
or unsound
procedures and there¬
huge volume of statistical series
fore
facilitate
corrections
by a
extending back to 1854 (on a
minimum of management.
monthly or quarterly basis).' After
(b) Because it minimizes the
extensive analyses of these data
; excuse of
controls, the gold stand¬
as
well as published reports of
ard is especially disliked by those
business developments, successive
who seek to enmesh the economy
peaks and troughs of business ac¬
in a network of socialistic con¬
tivity were selected by the Na¬
trols.

(a)

systems

tional Bureau.

To

reinforce

the

indepen¬

dence of the Federal

Reserve

Board.

(a)
be

During the period of 100
that

has

elapsed,

22

clines and recoveries

That agency would have to
to act when there were

free

Of the 22,

years

cyclical
were

usually great duration

de¬

recorded.

are

only three

of

and

un¬

these

warning signs of unsound devel¬
opments; and,
(b) An independent agency to

"off" the gold standard, in whole
or
part.
These
were
1873-82,

provide

1929-37, and 1937-45.

the

-appropriate

minimum
control

degree

has

of

been

occurred

when

the

of business cycles is

Nation

was

The record

given herein.-

by long experience to be
the only effective means of man¬
aging a nation's money-credit sys¬

More specifically, the durations
from peak to peak for all
except
the three exceptionally long ones

tem.

already mentioned ranged from 19

proven

(15)

To facilitate the sound
long-term
financing
of
public

debt

outside

and

of

long declines

the

months.

tended

Confidence in the future

worth of the dollar is essential to
.such

financing; and

(b)

Experience has shown that
3.
nation that meets its
promises
to pay enjoys the best credit

standing.

When the United States
resumed specie
payments in 1879,
one immediate and
striking result
was
the re-establishment of the

Government's credit standing.
Government bonds could be
floated at a substantially lower
«cost in

68

the

banking system.
(a)

months to

interest rates.

and

101, 95,
respectively.
If

war

years

are

The

three

recoveries

and

92

ex¬

months,

excluded, the

duration of 17 peacetime
was
40 months.
In sharp

average

cycles

contrast, two of the very long cy¬
cles, also in peacetime were 101
and 95 months

prevent

has

depression

a

been unsound

facilitated

by

bank¬
expan¬

inflation

of

credit.

Certainly the burden of proof is

evidence sup¬
porting the view that firm adher¬
strong

leviates depression difficulties and

elaborate controls.

(14)

sion

Recoveries

There

can

ing and distorted business

Gold

Standard Alleviates Depressions
and Expedites Business

and

To

Adherence

of

promises for
of
the
thing
promised, is unworthy of a great

(13)

Firm

instead

substitution

promises

nation

standard
SUPPLEMENT A

respectively (1873-

82 and 1929-37).. In each
instance
the nation was off or

partly

off

those who argue that firm ad¬
herence to the gold standard
on

would

worsen

or

prolong business

declines and that abandonment of
the gold
standard or

the

statistical

alleviate
The

data

innumerable

avail¬

the

gold

off

or

the

until

gold standard.

extensive reliable data for the

tire period

are not available

en¬

on

a

standard

the

less

form

of

For

example, if

alleviating

de¬

from the standard of value and its

which

monthly

reasonably

data

accurate

available)

are

This

we

find the following:

(a)

In

six

industrial

exceeded 25%

(b)

In

four

not

was

siders

1929-32,

question,

the

The

factual

of the preceding boom occurred

in

13, 16, 9, and 15 months
pectively.

Standard

Depressions?

evidence

res¬
[

(c) In the two other instances,

available

and

respectively, and
the latter apparently was short¬
ened by the huge purchases of
armament by

standard.

firmly on the gold
Temporary suspensions

of specie payments have
occurred
on
several occasions,

without

depth

apparently
affecting the

markedly

or

cessions;

duration

but

in

of

cyclical

each

of

the

re¬

few

instances when
either

part

(as in

1933?)
(as

or

in

noteworthy is the fact that
business contrac¬

severe

tion on record (greatest decline in
shortest period) occurred in 193738 when the nation was

partly on
and partly off the gold standard.
Similarly noteworthy is the lack
of any record of a rapid and last¬
ing recovery from depression lev¬
the

partly off gold
Before

nation

the

has

been

the gold stand¬

or

seriously in question.
attempting to suggest

how the retention of

from

that

firm

adherence

to

the gold standard tends to shorten

depressions

and

expedite

eries therefrom.

But

we

recov¬

well

may

gold

or

departure

standard

may

be

the

period

when

busi¬

activity is receding, after a
boom during which many malad¬
justments had developed, it is not
ness

that,

because

curtailment of

activity. At
fall greatly, and
part of the decline apparently is
such times, prices
attributable

to

the

extent

maladjustments and to

the

of

unreason¬

standard
Great

wise.

business
known.

as

individuals including

and

firmly

standard

to

estimate

when

become

have

judge

established

by,

unusual

available.

businesses

well

a

they can
bargains

Always

some

individuals

and

have

.

the

J*

«•

*

A




.*•,***

»t

)

i

•

<

-

}

J

fi

r

!.
!'■>'

■

■

:«'•

'

-

•/•

.u

t

limit the

to

grounds

extent of

from

Great

1929

assertions

these

for

included

have

lWe

1941

to

the

entire

the

as

years

are

period
of

the

for

the

following

rea¬

1941

did

industrial

pro¬

Depression

sons :

(a)

Not

until

duction again move above
long-term trend, and

of

Even in

unemployed
the

1939

the

1937
was

the calculated

average

7,700,000, and

number
ployed exceeded 9,000,000.
average

of

number
as

late

unem¬

(c) Thus, for 11 years after 1929 un¬
employed remained as serious a problem
it had been during the nation's earlier
severe
but brief depressions, and indus¬
trial production failed to increase above
its estimated long-term trend.
as

*

.

-

other¬

on
the other hand,
departure from the
gold standard unnecessarily pro¬
longed the Great Depression. The

-I'

I

sm1

>'

J -

i

i

3

.

i

;

I.

■>
,

.

•

.

However, the

and,

.

>**

the

subsequent

•

*

on

gold

of

maladjustments that preceded
Great Depression on the one

-

I

was

cause

Depression.1

tended

ard
the

as

managers

the

was

Apparently, the gold stand¬

(b)

long

nation

available evidence suggests

ing fear.
As

to believe

seem

the

the gold standard in 1929, the

surprising that such serious prior
maladjustments should result in
severe

Standard

(1929-1941)?

Depression

hand;

During

Gold

the

Many observers

for it?

or

in question

sions for years.

when

doubt

qifestion

any

1862-79

cyclical recessions
prolonged as serious depres¬

Also

of

beyond

prove

ask, if the suggested relationship
does exist, how can one account

seriously
1893-96), the

the most

course

interesting facts do not of

con¬

conduct

Responsible for the Great

r«

the gold standard
abandoned
in
large

was

was

were

Such

foreign nations.

one

.

usually

SUPPLEMENT C
Was

26 months

to

when

men

Moreover,
support, if they
do
not
prove
this explanation.
Certainly it is difficult to imagine
any contradictory explanation, any
argument that adherence to the
gold standard would worsen de¬
pressions, that would seem equally
reasonable and equally well sup¬
ported by the available data.

during the period since
1933, the recoveries required 43

United States during the
past 100
years
have
been
ameliorated
whenever the nation has chosen
remain

sense"

how

both

strongly suggests that the cyclical
depressions experienced
in
the

firm

the available facts

instances, when
standard

in

how

of

the

to

their business matters.

and

the gold

to

even

explanation

"makes

production

(1903-04, 1907-08,

1920-21,

adherence

is

gold stand¬

the Gold

than

gold standard
ameliorate depression at least

may

instances, the de¬

recoveries to levels above (hose

May

rather

partial

adherence

in

cline

SUPPLEMENT B
Ameliorate

The evi-f

9,000,000.

over

suggests that all the pump:

subsequent

ard.

How

unemployed

complete restoration.

and

setbacks

firm adherence to the

of

no

the

7,700,000; and in 1939
number of unemployed still

(for

means

for

In
was

priming, all the efforts to expand
purchasing power through various
means, could not counterbalance
the adverse effects of departure

ex¬

refer only to

we

boom.

the cyclical depressions since 1900

sible

business

of

Any

than

averaged

shortening the

of

wartime

number

average

1937-38).

shortening

contracts.

after 1932 until 1940

year

to

appears

depressions and
pediting the recoveries from
pression levels.

pos¬

ard has been

Unfortunately,

the

in

duration

1913-14,

duction provides additional inter¬

pro¬

gold

that

els

evidence.

be

the

suggest that the situation is other¬

the gold standard
during most of
the two long depression
periods.
The course of industrial

esting

by

facts

best

fulfillment

standard

Second, however, the recoveries
apparently are morq prompt and

wise,

perhaps the

and

retained.

on

-

available

Yet busi¬

contracts.

new

even-

sound

a

; Significant, perhaps is the fact
Evidently,
serious that all the attempts to ameliorate
maladjustments are followed by the prolonged depression that con¬
depressions of great depth whether tinued after 1932 proved fruitless
is

shorten

or

lack

pro¬

duction, when

"^managed

money" can
depressions.

de¬

in¬
fluence that retards the making of
able
reveals
no
consistent
ten¬
contracts, especially those of long¬
dency for recessions to be less
er duration, inevitably must ham¬
severe, measured by the total per¬
per the progress of business.
centage decline of industrial

iny of

cult

dollars

possibly

or

men

initiation

the

•

..

J

these

to

activity necessarily involves

ness

that such amelioration has taken?
In the first

in

abandoned,

dence

de¬

on

related

velopments is the' factor of trust
rium!;,; •;;v '...,n;,
r; ■ *
in .the i fulfillment
of
contracts.
Nevertheless, the factual evi¬
When the standard of values itself
dence clearly suggests that firm

bearer

bearer

in¬

^

.

the

the

to

pay

recovery

years

stead of months?

to' imagine better assurance the standard were finally allowed' more rapid when the gold stand¬
mand" the number of dollars in-. than this Nation would continue., to lapse.
ard has been adhered to. In other
I do not. assert that the
cheated, Instead-of giving to the to grow stronger than its enemies.
gold words, the amelioration .provided
"will

The

a

hesitate

limiting the extent of such mal¬

adherence

were

offer.

can

in

they will hesitate to act, they will
and postpone, and while
they, the usual initiators of re¬

sug¬

invariably has ameliorated depres¬
sions.
What is the precise form

came

he

true

standard of value firmly adhered
to; otherwise such individuals will

gestion here that the gold stand¬
ard, however helpful it may be in

1880,~ 1892-1901,

mors

bargain levels.
experience, that
buyers for the bar¬

nomic activity, but there must be

seri¬

no

The nation

was

houses
is

to

from

a

and

who

anyone

ously.

gold;

.

the

maladjust¬ lack a basis for sound economic
ments, is simply deluding himself
judgments. In such circumstances,

4

3

retarded

whenever

large number,
perhaps most other fields of eco¬

to

reason

such

the

declined

knows

there will be

that anyone who things
readjustments can be pre¬
vented, without first preventing

2

-

is

houses

new

have

of

possibly prevent
Noteworthy is the fact that in¬ or make unnecessary .the readjust¬
dustrial production was seriously ments required to restore
equilib¬

„

fulfillment of its specific

ing

same

there

presumably

prices of materials and other costs

believe

2

-

the Civil War until 1879; retention

purse.

(b)

Now

resumption in 1879.
t Free silver and Bryan campaign, gold
standard threatened 1893-96; Gold Stand¬
ard Act, 1900.
>«/., *•••,•,
*
$Off gold after ,1932."

three

lost, 7 in.; la'rge.;;part;. „ their

.Kb,;,

3

'

1925

1943

the gold standard in 1933,
people of the United States

have

severe

1948 -1951
Off

recessions

speculation,

would be eager to start construct¬

prolonged.

1929- 1941

*

estate

fol¬

activity and sometimes
depressions, more or less

2

1920 -1923

from

control

fbreign

included

2

1927- 1928

banking and spendthrift
Since the departure

against American citizens and
of

'

above

the

)

been

past

business

■

3

1923

over

in

favor

1

government.

the

discrimination

the

usually

3
2

V

1910-1912

| (a) It would restore to the peo¬

responsible.

was

end

-

that

:

the

in

genuine.

are

•losing them through unwise real

lowed by more or less drastic re¬
adjustments. Such readjustments

f9

1917- 1920

American citizens.

|

explains
for
the

notion

the

erroneous

as

have

1913-1915

that

rency

nor

tions

a

bargains become avail¬
provided they can be sure

example, a builder of resi¬
dential housing who has prudent¬
ly conserved his funds instead of

or

3

..

(c) By leading the way, our
an irredeemable cur¬
Nation would both encourage the
endangers the economic
rest of the world to follow and
system that uses it. Innumerable
instances testify as to the truth of provide a firm base for such ac¬
tion.
'
'■
■
this assertion, and none refute it.
(d) Exchange restrictions and
(b) A fixed standard facilitates
other rigidities necessarily inci¬
the
achievement
of equilibrium
dental to the management of irre¬
among
the economic factors of
deemable currencies, but that
production, the only sound assur¬
hamper the flow of commerce,
ance of optimum employment and
would tend to disappear.
production, without which there
can
be neither full employment
(.17) To bulwark the freedom of
shows

inventories,

from

.

'

190.9

-

in

or

in

are

of/ re¬
position to

For

ovorspeculation

or

and

other

or

dissipation

when

able,
bargains

plant

2

»

1902- 1905
1907

equipment*

of

*7':

1901

-

overexpansion

overexpansion

the

stocks; all such departures
orderly equilibrium condi¬

1888- 1890

Only general use of a com¬
mon monetary metal can provide
such free redeemability.

of

Thursday, April 22, 1954

unwise

sources

be

rampant speculation in real estate

3

1886

-

should

in commodities

1872

-

act

and

Years Duration

1873- 1880

(b)

experience of history

The

t

r

other

form

1865-1951
Period

would aid international commerce.

purchasing

ment Act of

; h

that' redeemable currencies

agree

(II) "To promote maximum em¬

t

V i

(a)

Production

Industrial

-

(16) To facilitate foreign trade.

'<•.\

avoided

development, the

emphasized.
Serious departures from equilib¬
rium conditions, whether in the

Downturns in'

of

(Until recoveries

To the Full Gold Standard
dren.

these

to

fact that the gold standard is not
considered a panacea for all eco¬

nomic ills

Advantages oi Return
potential widows and their chil¬

related

...

»

»

f

I

V-1

* '1

e

S

J- i
I
J'"'

1

Number 5318

Volume 179

.(1805)

The Commercial and Financial Chronicle

...

■.

the

paragraphs that

follow.
is

It

would

important to realize that
Depression
included
of fwo complete business

jmuch

extended from
the 1929 peak, through the 1932
or
1933 trough, to the 1937 peak
of business activity.
The second
The first

cycles.

from

extended

the

1937

peak,

trough,
and
through
part
of
the
recovery
{phase to the next peak.2
The
business
cycle that
ex¬
through

the

1938

the

tended from 1929 to

1937

was

second

the

nation's

in

longest

As measured by the Na¬

Shistory.
tional

Economic

of

Bureau

Re¬

search, its duration was 95 months
compared with 101 months for the
^business cycle that extended from
.1873 to 1882. From the viewpoint
the

of

present discussion, the in¬

teresting features of this compari¬
are

son

follows:

as

(a) The longest business cycle
in
the
nation's history began
the

when
the

had

nation

been

off

gold coin standard for sev¬

The same is true of
longest business cycle
history, that from

eral years.
the third

3n the nation's
1937

to

1945.

In

(b)
there

past 100 years,
peacetime busi¬

the
17

were

cycles, during all of which

ness

the nation

was

on

the gold coin

tortion

the

ts

facilities

such

of

n

the

in

far

provided

funds

of inflationary

flation.

also
spread to the securities markets,
which
by
1929 had become a
gambler's paradise. The increas¬
ing bank loans to finance the
mounting speculative activity be¬
The

speculative

inflationary

the

came

fever

of

source

gains, gains that soon ap¬
peared in the markets in the form
of demand for fur coats, expensive
huge

only 40 months.

in securities
comparable to the boom of 192829. We must go back to the Mis¬

standard

responsible
Depression there¬

fore should consider these ques¬

tions:

cessions

the cyclical re¬
depressions that oc¬

were

or

when

curred

tfirml.y to the gold
all

the

coin standard
than

those

standard

was

shorter

much

so

jwhen

adhered

nation

the

gold

.-abandoned?

(2) How did it happen that two
«of
the
three
most
prolonged
^cyclical depressions began, in each
.instance, when the nation had
ffoeen

the

off

•several

gold

standard

for

years?

duction

that

•^experienced
ide

and

tion

of

nation

ever

during the dec¬

occur

more

the

the

following

resump¬

gold coin standard in

1879?
But of

it

course

show

"(to

some

is not

the

of

enough

important

why the assumption that
the gold standard causes depres¬
reasons

sions
"there

seems

Were

to be unsound.

other highly

plausible rea¬

for the Great Depression? In

sons

-view
umes

of

vol¬

the fact that whole

have

written

been

on

this

subject, we cannot expect to cover
~all

aspects of the problem in this

Sbrief discussion, but we can

certain facts that

out

•

years

had

there

speculation

sissippi Bubble days in France
(when John Law's easy money
widespread ruin)
and to the South Sea Bubble in
England, a similar situation, to
find a comparable period.
In
the light of the exposures
since 1929 of developments during

point
to

seem

be

participants

throughout the nation, was one of
more striking features of this

the

But there were
cother, perhaps more serious, asipects from the viewpoint of the
•economy as a whole.
In nearly every city and even
the larger towns, the availability
cof
"easy money" for mortgages
con new building fostered a wave
rgreat speculation.

•-of

speculation

luxury

in

large

apartments,

hotels,

and

sky¬

2 The

t
.

next peak was not reached until
in
1945,
but
the recovery
had
brought business activity to a level well
above its calculated long-term trend by

early

«

"1941, the

year

when the prolonged period
activity and severe

»*>f subnormal business
»

unemployment

ended.




taken

were

public's

banks

frenzied

The

finance

of

Insulls, the Kruger & Tolls;
the general conversion of leading
commercial banks to purveyors of

the

the prostitution of

dubious bonds;

banking system generally to
services of speculation via
the
reckless
expansion of real
the

and accommoda¬

estate, security,

surely most observers,
in the light of hindsight, would
were

that all these developments
serious maladjustments, un¬

distortions, that had to be
corrected
if destruction
of the

sound

economy were

to be avoided.

history
we
learn, that failure to correct
such
maladjustments has more
than once resulted in a complete
From

the experience of

of economic activities
with virtual paralysis of business
and in many instances with an
overturning of the existing gov¬
disruption

Such

ernment.

was

the

Bubble

Mississippi

the

case

in

inflationary paper cur¬

the assignats, fostered simi¬
distortions nearly a century

thus

and

In

by

publication of

the

country,

we

had

estate

the

pered

actions

wiser

vent the

the

judgej the extent of

distortions that developed.

their

it.

The money and banking system

is not subject to collapse.

much

did

not

If

pre¬

"bust," they surely tem¬

Even

decline in

at

the worst

of

industrial produc¬

tion, reached in the summer of
1932, such production was still
about two-thirds of the estimated
long-term trend. Bad as this sit¬
uation was, it was far better than
the virtually

The liquid

business

has

outing

spring

im¬

Golf Club

proved.

Report from

bond

association of"

an

New

in

traders

City, will hold their annual

York

asset position of in¬

and

"Toppers,"

municipal

sound.

more

dividuals

The

generally is

on

at

Montclair

the

May 21.

...

business

the

I

R.F.C.

decisive

of 1933.

Then fol¬

INDUSTRIAL

than 18 months of in¬

fluctuations

business

in

rmmm

activity until the Supreme Court's
"gold clause" decisions were ren¬
dered
then

tial

in

early

return

about

the

to

Not

1935.

doubts

were

"<

■

until

the

.<r

par¬

standard
being.
A
prolonged upward surge of indus¬
trial production followed for two
resolved

for

the

gold

time

years.

'Thus it would appear that those
who blame the gold standard for
the Great Depression do so in dis¬

ofi the

regard

that and

earlier periods.

constitution

sound

him

survive

to

of

stead

for his

his

Here's evidence of progress.
pany

evidence

provided
It is
much as though an inebriate lying
in the gutter were to blame the
in

his

excesses

actions

unwise

own

in¬

resulting unfortunate

In 1953 Ohio Edison Com-

and its subsidiary, Pennsylvania Power Company*

consolidated, recorded:
•

enabled

that

•

•

/

.

$108,551,396 of operating revenue

h

6,270,851,832 kilowatt-hours of electricity sold

J'

562,682 electric customers served

con¬
•

$59,011,004 for property additions and improvements

•

dition.

2,818 kilowatt-hours annual use by residential custom¬

Ford Motor Economist
Sees Business Decline

Coming to
T,

0.

Finance,
tells

an

Yntema,
of

Ford

Petroleum

3Q's is

End

ers—19.7% above the national average
•

98% of farms in the territory electrified

More than

According to the United States Department of Com¬

Vice-PresidentMotor

Co.,

Association

"a

like that of the

complete cessation of

merce,

the Central Region of eight states including

constitutes the most
with

impossible."

highly industrial area in the world,

prodigious output of diversified products which

a

throughout the world. The territory served

marketed

O.

Yntema, Vice-PresidentFinance, Ford Motor Company,

by the Ohio Edison System, located

holds

center

the

there

is

a

"good

business

current

prospect

decline

has

just about run
its course."

of these

Center

of

Eighty
the last

two

practically in the

adjoining regions, is indeed The

Industrial America.

new

industrial plants were established in the

System's service

he told
meeting of

more,
a

Ohio,

together with the areas eastward to the Atlantic Seaboard,

are

T.

Further¬

the gold standard
play in the Great Boom that pre¬
ceded the Great Depression?
At
least
it provided a standard of
value by which a few saner citi¬
could

Toppers Schedule
*
Annual Spring Outing

factors

cited by Mr. Yntema:

The debt structure

likely

,

it was the unsound banking
situation, not the gold standard,
that accounted for the severity of
the depression.
Moreover, the recovery that be¬
gan in late 1932 and was inter¬
rupted by the bank moratorium
of early 1933 was resumed with
great
speed
until
the definite
abandonment of the gold standard

ex¬

What part did

zens

favorable

'

'

.

the goods available

buy.

other

These
were

is less

in the past,"

be,

busts."

and

in relation to

was

the

in

hasten

great depression

several occasions. Reck¬
speculation, un¬
sound
banking, and widespread
bank failures had been prominent
features of several great "booms
real

less

than it
*'

for them to

decline

1937-38

now

loans to banks. However that may

later.

our own

the

the

Even the efforts of the
which might have been

R.F.C.,

later; such was the case in Ger¬
many in 1923; and such was very
nearly the outcome in France a
few years

in

the case

rency,

lar

rise.

to

money

comparable to

after

burst

France; such was again
when the

tend

more

that

maintained

recession

a

recovery.

tion loans;

agree

leaves

Yntema

Mr.
"even

restore

to

confidence

more

severe, on

dreds of thousands of

the

summer

curred.

expenditures

hands of individuals and business

responsi¬

government

well be that inadequate

may

lowed

tinuing until 1929, there occurred
tone of the great real estate spec¬
ulations in the nation's history.
boom, with its hun¬

It

measures

in the

perienced great speculations simi¬
lar in some respects, if not so

Florida

with

depression while Fed¬

a

This

extremely difficult to obtain and
an exceptionally weak mar¬
ket for securities, there was little
chance of business recovery until
many of the
boom-time malad¬
justments had been corrected.

it should not be

boom years,

Ihighly significant.
Beginning about 1924, and con¬

'The

the

in

and

decline in

such

bility.

with

necessary
to belabor the point
that serious maladjustments oc¬

the

the

Why, if being on the gold
^standard was a primary cause of
ffhe Great Depression, did not that
•^depression
end,
when
or
soon
.-after the gold standard was aban¬
doned in 1933, instead of persist-,
fang for several more years?
(4) Why, if the gold standard
*^tends
to
cause
depressions, did
.the
most
rapid and most pro¬
longed increase in industrial pro¬
(3)

ebb

sys¬

,* successful in 1932, were hampered

200

for

Not

and other

scheme brought

Why

<1)

houses,

fabulous
items.

been

was

confidence
low

a

tax

pay-as-you-go

eral

With accommodation at the banks

1

cars,

(c) Those who argue that the

situation that must as¬
responsibility.
With

at

a

tem, he said, Federal tax receipts

domestic

bank credit,

luxury

for the Great

as

economy.

With

were

through
trough, to subsequent peak was

gold

gold

in the sporadic bank failures initiating
depositor runs on other banks in
the vicinity,
it is little wonder
with resulting excessive stimula¬
that even the sound bankers gave
tion
of
business generally and
more
thought to strengthening
support of prices at relatively
their cash positions than to serv¬
high levels. Instead of the gradual
ing
the
community in normal
lowering of prices that otherwise
fashion.
Thus, even applications
would
have
accompanied
the
for sound loans were apt to be re¬
great technological advances
of
fused and many banks sold bonds
that
period, prices of finished
in a falling market to bolster up
goods were held up on a high
their cash in order to be able to
plateau by the excess demand
meet possible deposit withdrawals.
made possible by continuing in¬
the

form

ration

peak,

more

prolonging
is sometimes

It was the

public's

banks

standard, and their average du¬
from

even

that

sume

Much of

ment

eral

of

cause

depression,

banking

diverted to the construc¬

advance of actual needs.

the

maintained.

huge amounts of labor and capi¬
were

become

Nor was adherence to the
standard

budget to cushion and par¬
tially offset the ups and downs in

The Federal government now
recognizes a responsibility to pre¬
vent
depressions.
We have the
economic "know-how" to imple¬

important of these factors is an
automatic tendency of the Fed¬

until the dis¬

on

serious.

these actions the economy
became seriously distorted in that
tal

had

presumably
if the Great

resulted

have

Boom had carried

By

33

the

business activity that

Great

the

office buildings. The pro¬
and
financing of such
enterprises became highly prof¬
itable, for the time being, as
eager investors bought mortgage
bonds promising what they ex¬
pected would be "safety and 6%."

scraper

moting

in

diseussed

*

i

j

eight

area

in 1953, making a total, of 724 in

years.

National

the

Petroleum Association

The above

in

Cleveland, O.,

report to

April 15 "a
great depres¬

L. I. Wells,

on

sion
of

the

is from

the Company's

annual

Secretary, 47 North Main Street, Akron 8,

write
Ohio.

early

is

J.

that

like

1930's

information

its stockholders. For a copy of the report

i

m

Ohio

-

Edison

^

Co.

possible now
because
s

t

a

of

b i lizing

factors

in

General Offices
T.

•

Akron 8, Ohio

|

O. Yntema

the

present economy."
Mr. Yntema said

© O. E. Co., 1954
one

of the most

1

*

34

The Commercial and Financial Chronicle

(1806)

Continued

from first

Utility Securities

Thursday, April 22, 1954

industry the ratio of inventories
mohthly sales at the end pf
September, 1953, at the end of last
November, and at the end of
February, 1954."
of

page

to

*

Public

...

The Business Decline* and

/

*

By OWEN ELY

Long Island Lighting Company
Long Island Lighting Company supplies electricity and gas to
most of Nassau and Suffolk Counties, and the Rockaway Peninsula
in Queens

County, these areas being largely residential.

Popula¬

tion served is estimated to exceed 1,300,000, having increased 55%
in the last decade.
Construction contracts awarded for new homes
last

year

in the

amounted tc

area

40% of all the dwelling

some

units contracted for in New York State.
About

75%

of

1

from electricity and

about 25%
residential, 24%
commercial, 13% industrial and 8% miscellaneous. About 81% of
gas revenues are residential and 19% commercial and industrial.
Substantially all the gas distributed is natural and reformed nat¬
ural gas.
1
from gas.

revenues

Of the electric

are

about 55%

revenues

are

Although industrial revenues have more than doubled since
1948, and local employment substantially increased, the ratio of
industrial to total

has remained fairly constant.

The avia¬
tion manufacturing industry has widely expanded during the past
decade and is the largest single industrial in the territory.
Numer¬
ous plants have been erected by light industries, their employment
absorbing much of the population increase.
The majority of Nas¬
sau
County wage earners are now employed within the county.
The per capita income of the county is one of the highest in the
revenues

State and Nation.

into

Suffolk

Industrialization is

rapidly spreading eastward
although it remains an important farming

County,

and

fishing area, having the largest agricultural income of
county in the State.
The company's capitalization,
of preferred stock

(the

including the two recent sales

recent sale

more

any

tion) is estimated to be approximately

was

a

refunding

follows:

as

Millions

-j,

Long-Term Debt

Percentage

$146

Preferred Stock

■

—

opera¬

56%

37

v

but

the

difference

smaller than is

incomes

sonal

30

billion

before

Long Island Lighting
stock record

mon

ing table.
revenues,

on

the

of

incomes before taxes
only about $2.0 billion above
February,
1953. The
month
of
March, 1954 will probably be the
personal

was

first

in

month

which

com¬

basis is indicated in the accompany¬

Despite the very rapid increase in kwh. output and
share earnings, if based on actual shares outstanding at

the end of each year, have remained in a narrow
range ($1.12 to
$1.19). This has been due in part to the rapid increase in the num¬
ber of shares, with new issues of common stock

Based

every year.

average shares outstanding, the figures
1953, $1.26 for 1952 and $1.37 for 1951.

on

Share earnings are expected to

obtains greater

pany

better

results

are

rently earning

control

obtained

over

from

were

improve when

the

com¬

operating expenses; and (2)
gas division, which is cur¬
With the completion

administration building,

expects to "tighten up"

(1)

the

rather low rate of return.

a

of the big Hicksville

better, $1.28 for

the

company

now

operating efficiency and achieve lower
costs.
Generating efficiency is improving rapidly: Btu's con¬
sumed per kwh. averaged 12,435 last
year, but with the Far Rockaway unit installed the figure should now drop to
11,100, and by
on

1957 to *10,000.
The production cost of about 5 mills per kwh. in
1953 is expected to decline this
year 10% to 4^2 mills—despite an
increase in fuel cost to 35.90

(ys. 34.10)

per million Btu.

There has been

no dimunition in the
company's rapid growth
Revenues for the first quarter were about
18% over last
and net income for the calendar year 1954 is estimated at

in 1954.
year
over

for

personal

additional

common

Allowing
stock issue next fall, this might be
average shares, and perhaps $1.25 on

equivalent to about $1.35 on
shares outstanding at the
year-end.
The management hopes that
in later years the figure
may rise to $1.50-$1.75 if earnings on the
gas division can be brought up to a 6% return on
the rate base.
Thus far relatively little has been
done to build up the househeating load and if greater progress can be effected in this direc¬

tion, this should be reflected in
as

thus

anticipated,

an

19 to

If earnings

improve}

increase in the present $1 dividend

might be forthcoming in
around

net income.

1955.

The

stock

is

currently

rate

selling

yield 5.1%.

doubtedly
than in

Revenues

Year
,

,

(Millions)

1953

-Common Stock Record

Earnings

$66.5

1952

—

1951

—

$1.16

Dividends

Retail

sales

declining
relative to last year. In January,
the seasonally adjusted figures fdr
sales

below

in February; they

1953;

4.1%
in

2.6%

were

below February, 1953;
the
preliminary

March

below March,

1953. The drop
in retail sales is mainly concen¬
trated in the durable goods indus¬
tries.
In
March, 1954, sales in
durable goods at retail were 12.0%
below

sales of
only
2.0% below March, 1953. But ap¬
parel sales, when> corrected for
seasonal, were also 12.0% below
March, 1953.
March,

non-durable

1953,
goods

but

were

The total drop in gross national
production since the peak of the

boom

in

the

has

1953

rate of

second

quarter

from

been

of

annual

an

annual
rate of about $359 billion, or a
little more than 3%. Over $10 bil¬
lion of the drop in the annual
rate

$371.4 billion to

of

production

is

to a
shift from the accumulation of in¬
ventories

at

billion

year

the

rate

to

a

n

a

of

over

$6

reduction of
'■

.

examine

us

few

a

pects of the recession strike

particularly

important:
are
using

as¬

me as

(1)
the
goods
faster
than
we
are
producing
them; (2) the well-sustained de¬
mand for capital goods and con¬
that

we

up

struction; (3) the low level of
tail

sales

incomes

in

relation

after
of

the

to

(4)

reduction

we are

17%-14%

goods faster than

15%-12%

the

in

in¬

1.19

0*25

14%-10y4

using

up

ducing them.

1.12

Nil

/ 1948

—

37.4

0.88

Nil

30.9

0.61

Nil

.

we

are

pro¬

government

at

the

rate

of

than $4 billion a year faster

more

than

they are being produced. In
the last quarter of 1953, purchases
of

Pittsburgh Bond Club
To Hold

.

Outing

PITTSBURGH, Pa.—The

Los Aug Bond Club
Annual Field Day

Bond

LOS ANGELES, Calif. —The
Pittsburgh will hold its
Bond Club of Los Angeles will
spring outing Ma.y 14 at the Roll¬
hold its annual field day at the
ing Rock Country Club,
Ligonier,
Pennsylvania.
Wilshire Country Club on June 11.

Club

of

The

Financial

DETROIT, Mich.

Chronicle)

—Sam

Gold¬

smith has been added to
the staff
of B. C. Morton &

Co., Penobscot

Building.




year.

At the peak of the boom

in the second quarter of last year,

goods

being produced about
$6 billion a year faster than they
were being purchased.
were

In the first quarter of

1954

tries

DENVER,

Financial

v

Chronicle)

Colo. —Edward

H.

Pierson has become affiliated with
F. I. F. Management

Corporation,

downward

revision

of

spending

plans.

were

ex¬

equip¬
indus¬

slightly larger than in

the first quarter of 1953

and, when
only
3% below the third quarter of
1953
the high quarter for ex¬
penditures on plant and equipadjusted
—

for

This

year.

means

in

the

ex-

half

second

of

ernment ahead, is there any pros-

The

strong
is

struction

demand

shown

for

by

new

con-VPec'o(,?" earlI fpiurn? The.reJs
no
r
°£*
w°rld W1" ^crease its purchases
?t our Soods
the immediate

con-

•.

tract awards and by new
housing
starts. In January, 1954 new con-

above

£uture- Tb,s le?v®s three Possible

January, 1953; in February, 20%
above a year ago; and in March,
13%
above
March,
1953. They
were also higher than a
year ago

sources of revival:
:
(1) Larger spending by state and
local governments,

tract

awards

7%

were

in last October and November.

September

and

December,

(2)

In

Larger
tories

spending

and

slightly below a year before.
New housing
starts,, when
seasonally
adjusted,, have been
increasing almost without inter-

concerns.

(1)

annual rate of

new housing starts
962,000; in February, 1954 it
was
1,180,000. The seasonally ad-.
justed rate of new housing starts

starts

was

The

the highest in 12

March

show

housing
drop below

new

small

a

February to an annual rate of
1,161,000, but still seasonally adjusted, the March starts are the
highest, with the- exception of
February starts, since March, 1953.
The rise of
the

most

cease

new

(2)

personal

after taxes.

I

have

*

pointed

business concerns.
business

that

are still
larger than
particularly personal
incomes after taxes. Hence, it is
noteworthy that retail sales for

year

has

been

going

on,

as

I

have pointed out, for nearly six
montbs. Inventories were not
Particularly large last year. Is
"ot an early increase in product101^ and ?mpl°ymeiri inevitable

per-

sonal incomes

a

Larger spending for invento-

The reduction of inventories by

incomes

-

out

their expenditures this

ries and direct production by

(3) The low level of retail sales in*
to

governments

J1? bllllon V* $2
bll,ll0,n- The outlook for considerably larger expenditures on muchneeded toll roads is particularly
brl§ht.

of

relation

local

>'ear bF about

housing starts in
declining business is
encouraging.
■' ■./'//, /

face

governments
and

for the last six or seven years
have been raising their expenditures by about $L5 to 52 biHi°n a
year* The ne?d for schools, roads,
by-passes, bridges, enlarged water
suPPly> hospitals, is very great,
State and local governments may
be exPecteq to continue to in-

was

February

ultimate

Larger spending by state and
local

th^^ea^oLl^^djiisted

in

by

consumers.

State

months.

for invenproduction

direct

by business

how-

eT^e^'a.ine,w Tcontract awards were (3) Larger spending

ago,

3ust °,^r11?^ current production
up to.level of current conyear^In this im-; sumption.

of

last

portant respect the present
sion
—

differs

.1

when

i.

from

*1

_

retail

_

1

that

of

1949,
!J

sales

held

up

—A

seasonal,

were

Although sales have been falling about as fast as inventories,
rst
TT'^Uv.,.o».-.r
so that at the end of February

reces-

•.

-

'

quite

inventories

satisfactorily.

seasonal

(4)

The failure

of the

reduction

larger

in inventories to cut the ratio

the

end

not

pf last Sep-

ries

adjusted for
seasonal, dropped nearly $1.7 bilbillion

to

needed

in

order to

efficient business
Furthermore,
in

make
oper,

some

tion and those engaged in making
most forms of industrial equipment will not be able to cut in-

ventories much longer.

An end

to the .reduction of inventories
wall mean, of course, a rise in
production and employment,
Hence, even though expenditures
on
plant and equipment are

branches

TABLE I
End of Sept.
1953

1.86

+—

Durable

Non-durable -i

Wholesaling

End of Nov.

End of Feb.

1.59

|:r

1954

3.93

1.95
2.30

1.61
3.30

iDurable
Non-durable

1953

2.27

C*"'

Manufacturing A//...

1.62
•

1.30

2.05

: *

Retailing

..

2.05

.92

.94

.96

1.64

1.59

1.62

2.11

2.24

1.30

1.30

Durable

Non-durable^,

of

continues to rise, the enterprises
supplying materials for construc-

November, $1.71, and at the
of February, $1.72. Table I
different

reduction

ment than last year, and if the
number of new housing starts

end

for

the

holding up well. If business spends
only 4% less on plant and equip-

$80.3

or

compares

that

fields of business sales have been

2.0%.*,(yhe drop in
sales> however, hjis been proPortionate to the dbbp in inventories so that the* *atio of inventories to sales' Jias shown no
significant change. At the end of
September, manufacturers, wholesalers> and retailers as a whole
held $1.68 of inventories for each
$1*°° of monthly sales; at the end
of

is

ations.

when'

$82.0

follow

possible

manufacturing and trade in-

lion—from

adjusted for
slightly
sales than at
of last September, it does
were

inventories will go on indefinitely,
A certain minimum of invento-

tember, when inventories
(adjusted for seasonal)"' beached their
peak, and the end^qf February,
total

(when

changes)
relative to

the&end

of inventories to sales.

Between

capital goods and construction.

penditures on plant and
ment by non-agricultural

The

penditures

and equipment—though in
industries, such as the railindustry, there has been

road

(2) The well-sustained demand for

Joins FIF Management

444 Sherman Street.
»

annual rate of about $3 billion

(Special to

B. C. Morton Co. Adds
(Special to

goods exceeded production by

an

a

plant
some

billion,

At
present
goods
are
being
bought by individuals, business,
and

fiscal

present

contrac-

1954 are likely to be as much as
$3 billion less than in the first
half of 1954. With cuts in industry's outlays on capital goods and
in spending by the Federal Gov-

ventories

0,60

46.7

business

revision of plans for spending on

re¬

personal

taxes; and

(1) The fact that

of

that the Federal Government's

months

briefly

features of the recession. Four

fact

months

tion between the two surveys did
not produce an overall downward

the last several months have been

0.90

40.8

What are the prospects for an
early upturn in business? Indus-

1954,

n e s s con-

running below the Corresponding

Features of the Decline
Let

five

due

'

inventories.

1.17

—

year

Upturn

an

cerns

an

ventories to sales.

18%-15i/2

ment. For the entire
non-agricultural b u s i

decline of about

a

1.15

—

—

also

are

52.6

1950

1947

larger

somewhat

be

58.5

1949

*

12 months

ventories to reduce the ratio of in¬

Price Range

$0,921/2

before

incomes

March, 1953.

failure
'

in

earlier. Even in March, 1954, per¬
sonal incomes" after taxes will un¬

$9 million compared with $7.7 million last year.'

an

recession

the

taxes will be less than

5%

recapitalized in 1950 and the

was

new

was

October, 1952.
In February, 1954, the annual rate

and

100%

taxes

above

figures indicate
$262

much

was

few months

a

In

ample,
$9.9

was

October, 1953, fcfr ex¬
the annual rate of per¬

earlier.

were

79

The drop
tax^s
social security
paythe same period has
incomes-after

Prospects for

plan to spend on plant and try plans to spend on plant and
equipment only about 4% less equipment in the second half of
been only about $2.0 billion as an than last year. 'This fact is con->1954 at an annual rate of about
annual rate, or about 0.7%.
firmed by two.,surveys—the Mc^ 5% below the rate of spending at
*
Graw-Hill survey of last October the present time. The cash outlays
Personal incomes before taxes
and the Department of Commerce- of the Federal Government in the
and, of course, after taxes as well,
were
still
somewhat
larger
in Security and Exchange Commis- fiscal year 1954-55 will be about
sion survey of early March. The $4.4
billion
less
than
in
the
February, 1954 than a year ago,

(including
in

ments)

January,

Common

Stock Equity:
(5,520,499 Shares)—.

personal

retail

14

■

1953 ao.d February, 1954.
in

:

Ill

Prospects for Early Upturn

1.32

2.02

Number 5318

Volume 179

The Commercial and Financial Chronicle

...

credit were terminated. By the pens is that many people start
vival in 1954 must, indeed, be re- end o^ the summer, however, out with the intention of buying
garded as dark. With enterprises there is a good chance that new a new house and end up with the
planning to spend less on plant borrowings will become as large purchase of an old house—probthen the outlook for business re-

smaller in the second half of 1954
in

than

first

the

half, production
and employment in most of the
capital goods industries may be

»*xicu

mat

~v

---

'

wish to reduce inventories
any
further, a rather
£harp reversal of business will occur,
at least in the
consumer
goods industries. The decision not

—r

hold

they

an

m

nlovmpnt
pioyment.

This
ims

creases

the

in

to^edu^e

^nven-

a n rid is -

make rs

the

trtbutorsof^consumer
Etence

will

be

inventories. Just
riifficnlt

Vin

earlv

becoming

from

larger

intend

them

in

niannedTn Sh J housing market also makes it
rinrfna rpppntvpar<f plain that the PrinciPal competi™r' tion to the new house comes from
number that actually pur- the old house. In the four-year
chased new houses, and the num- period 1949-1952, less than half
ber of new dwelling unlts started. as many spending units , which

little effect upon the number of
new houses or old houses sold.
The sharp changes from year to

of

become"

the'

in

(2)

sales;

current

sumers

become equal to

repay-

smaller

b

from

than

e c o

hiimnessmen

them to be

who had bought in the chased them, but nearly half again ably depends upon the prices and
given year up to the time of the as many spending units purchased availability of new houses. Hencfei/
interview, the number who said old houses as started out the year the new-house industry does have
which will occur when the reduc- they definitely would buy, and intending to buy them. Put in a good opportunity1 to expand at
tion in inventories ceases, has al- the number who said they prob- another way, out of 5.6 million the expense of the old-house in-

namely, the improvements in employment and personal incomes

consumers.

•

Consumer

spending may be diprincipal parts—

Vided into three

ready been
discussed. I have
stressed the fact that, orice manspending at retail. Spending for- agements decide to halt the cutservices in recent years has had a ting of inventories, the revival of
strong tendency to grow. In the demand will to some extent be
first quarter of 1954, spending for cumulative.
The second of my
spending for various services,
spending v for new houses, and

services

was

1953,
spending

at the annual rate of

peak quarter of
consumption
In the

the
on

durable

spending < on

meantime,

and nondurable goods

has dropped
by $3.1 billion as an annual rate,
Spending on services includes
some non-cash or imputed spend-

Ing, such as imputed rents
owner-occupied dwellings.
The current survey

finances

five

of

'out

houses

that

shows

or

persons

durable

on
;

goods

~„

to

than in

though smaller
More

1952.

people

1951

regard

or

the

present as a bad time to buy durable

goods

good time.
of

than regard it as a
Finally, the proportion
who

consumers

however, is only a rough estimate, .purchase

Fufther- In

1953.

buy durable consumer
goods continues to be high. It is
slightly higher than last year,

,

expect

prices

to drop during the year

has gone
.up. It was 31%" last year and it
is 36% this year. Table II sum-

February, installment credit
dropped by $293 million and noninofollmont
hv CQ1Q million
installment credit by $343 million,
Most of the drop was seasonal,

years

of

consumers

in

recent

and in 1954.

;

Does not the fact that a smaller

proportion of consumers intend to
buy houses

or

durable

consumer

-goods than last year and the additional

fact

that

more

consumers

pected?

demand

is

not

to

be

doubtedly

continue

for

some

be a deretail trade

months to

come.

pbe summer, the final

will be made

on

repayments

the large volume

controls

over

consumer

I

————*

,

adoption, and

or

by

Year

old)

Used

o"„iy
but

may

contain

more

Autd-

mobiles

mobiles

than

one

lam"?;

of consumer finances
indicate that they plan to behave,
survey

of

consumer

ors

operation with the Survey Research Cen-

hold Appli¬
ances

Durable Con¬
sumer

Goods

,

As a Bad
Time to Buy

Durable Con¬
sumer

Goods

ter..°*. t'ie University of Michigan.

7.0*

11.8

6.8

30.9

8.4*

10.6

6.9

28.4

1951

8.5*

6.6

5.5

27.4

33

49

6.4*

6.8

6.0

32.2

22

52

mm

—

"Federal
p.

mm

■

■

-J'

—

1953_

8.8*

9.0

6.2

31.9

34

38

1954_

6.8*

7.8

6.2

26.8

35

40

The
preliminary findings are based on
approximately 2,800 interviews made in
January and February in 66 sampling
areas.
The sampling areas include the 12
largest metropolitan areas.
The results
of this invaluable survey are worthy of
careful
study
by
all
business
policy
makers.




'

(Millions)

—$ 74

1948
1949

—

1950

—

1951
,

—

1952

1953
1954

—

—

423

209
404

409
170

T—

636

(Millions)

-f $ 78
—

+
—

—

+
—

85

48
179

129

131
293

Started

1

(Millions)

1,025,000
1,396,000
1,091,000
1,127,000
1,106,000

—

Bulletin," August, 1952, p. 8G2, and
Supplementary Table 13, pp. 8 and 10
Bulletin," August, 1953)
and "Economic

Reserve

III,

Reserve

Survey of Consumer
(a reprint from the

Indicators,"

March,

18.

V

TABLE

Purchases of Exist¬

Spending Units

Spending Units In¬

ing Houses Over
Planned Purchases

Actually Buying Ex¬

tending to Buy Ex¬

isting Houses

isting Houses

(Millions)

(Millions)

>

(Millions)

Excess of Actual

Number of Non-Farm

Number of Non-Farm

1.0

1.0

0.0

0.8

1.4

0.6

1.7

0.8

1.1

0.3

0.9
!

l

0.8

:

.

1.0

TABLE

Percentage

|

Instal. Consumer Credit

Housing Units

Houses

(Millions)

Part

Year

Total Consumer Credit

Number of New

Buying New

Houses

1953

spending units only.

Changes in total consumer credit and in installment consumer
credit in recent Februarys were as follows:

jffon-Farm

Spending Units

Spending Units In¬

1952__

25

III

Number of

tending to Buy New

"Federal
Finances

28

TABLE

IV

TABLE
Number of Non-Farm

1.8

26

—

*•

«.

oc

0.7

18

1952

The

of

Continued on page do

0.6

Are

mmmm

—

p

1.1

tain

1950_

—

__

of

buyers

1.3

Uncer¬

27.4

preliminary results of the survey of 1954
are
published in the Federal Reserve
Bulletin
for
March, 1954, pp. 246-249.

nurchases

But the excess of ac-

0.6

Who

4.1

is

finances

annually by the Board of Govern¬
of the Federal Reserve System in co-

made

their

Dian

0.8

Who Regard the Present—

9.7

♦Percentage of non-farm

furniture and major

j Durchases over intended Dur-

1953

1954,

one.

7.5*

1

of"

understated
t

1.9

♦

-

As a Good
Major House- Time fb Buy

Auto¬

not

do

1.3

abifoTPma0rria^

dwelling, and who pool their incomes for

TABLE II

New

changes in the availabilitv
0f used
d

1952

who live in the same

Furniture or

or

[

re lect^c a iges in ti7

1951

.

.

..

sonsAwShoea?enfeiatned

Percentage of Consumers Expecting to Buy-—

Houses

£

1950-

'

survey

, b
01 tn5; snaiJP year-to-year
p an^® ^
a|.
,sd?rp ?rap
from lyou to 190 ana tne sna p

1949-.,

considerably

are

1949

buying
non-durable
goods
are
-likely to be similar to those for
buying dupable goods.
If con¬
sumers behave
as the reports of

1 The

d^ncy for-pne to exceed the other.

in

—Percentage of Consumers

(New

be

to

seems

ck>se with nQ deJinite ten_

the

above intended
During purchases. What apparently hap-

of the two-year installment credit
granted for the purchase of automobiles in the summer of 1952
after

houses

previous years. But certainly

intending

chases in every year except 1949

1948

the

19450

fa-

houses likely

new

the

between

automobiles

new

jn 1954 will undoubtedly end up
by buying old houses—just as did

the new-house market. Actual pur-

will

to

on

of the

excess

...

voor

un-

indebtedness

consumer

ex¬

The reports of consumer

the

and

houses

new

February, 1948, tion was 1.1 million.
and February,
The
analysis of the housing
1953, total installment credit in- market would not be complete
creased. The (decreases in install- without a comparison of intenment credit in February, 1949, in tions to purchase used houses and
February, 1951, and February, actual purchases of used houses,
1952 were much smaller than the Here on£ finds that the relationdecreases this year. (Table III).
ship between intention and pracLarge repayments of short-term tice is exactly opposite to that in

•regard the present as a bad time
to buy durable consumer goods
than regard it as a good time indi¬
cate that an early revival of con¬
sumer

relationshin

intended and aetual purchases 0f

number of new dwelling units to be built—and also in excess of used car£ and durabje consumer
constructed TnfonHintf niirhhnoprc the number of new n/T
was especially large
dwelling units gOUUb d vpar abPaH nf time SU
„ nH
<?o
Incf
Ml
1 __x
yedl dUCdU. UL UII1C,
last year. Intending purchasers built last year. Many of the that intentions for a period as
were 1.8 million, actual construe- would-be buyers of new houses
aT'a vear are boiTnd"to be

Nevertheless, in
February, 1950,

^marizes the buying intentions and Pressing influence
attitudes

What about the relationship between intentions to buy durable
consumer goods and the actual
purchases of durable consumer
goods? Again one finds in the case
0f most articles a loose relationshiPj as Table VI shbws.

showed repayments of old debts units constructed—in spite of the new houses provided the prices of
exceeding new borrowings. Most fact that a considerable part of new houses are not too high.
expect their of the decline in consumer debts the
new
dwelling units conA rough estimate of the numthree

over

more, the proportion of consumers
3
l
3
who regard the present as a bad

time

*

of consumer

consumer

is smaller than in

intending purchasers of new dustry.

ably would buy. (Table IV)

There are three striking facts houses, there were 2.7 million
about Table IV. One is that in actual purchasers, but in comparievery year the number of spend- son
with 3.5 million intending
ing units that planned to pur- purchasers of old houses there
chase a new house was much were 5.2 million actual purchasers,
reqsons for expecting a revival in greater than the number that ac- The intending purchasers of new
consumer
spending, namely the tually purchased a new house. In houses exceeded
the intending
effect of debt repayments upon 1950 and 1952, the number of in- purchasers of old houses by 2.1
the demand for consumer goods tending purchasers was more than million, or 60%_ but the a^al
has received little attention. Until twice as large as the number of Purchasers of old houses exceeded
the end of last year, consumers actual purchasers. A second fea- the■ intending; purchasers by 2 5
were going into debt faster than ture of the table is that in every million, or 93%. Could there be
they were paying off old debts, year the number of spending units anY more impressive evidence of
Indeed, January,
1954 was the intending to purchase new houses the strong competition which old
first month in many months when has
been considerably greater houses give to new houses and of
the
seasonally adjusted
figures than the number of new dwelling the enormous potential market for

-$2.2 billion above the third quarter
of

year in the number of non-farm

those

The first of these three reasons,

'

wm have

spending units actually buying
existing houses indicates that the
The number of spending units started out the year intending to supply of old houses available for
intending to buy houses included buy new houses actually pur* purchase does fluctuate and prob-

ments; (3) price reductions and
m i n g' improvements
in products w i 11
desire
lead consumers to change their
buying plans.
*
'

(3) Larger, spending by ultimate
i

oTold^ouSs'Eut

nrkes

that

earlv stages of revival to prevent
inventories

turnover) so that lower prices for

ennnjLa was 7-9 million. ine look at the prices of old houses but will have

®

„1irY,uoi:

consumer

Purchases will rise as short-term
consumer indebtedness is reduced
and as new borrowings by con-

busi-

than
to

oiu

house industry These economists
argue that the supply of old
houses offered for sale is quite
independent of price (determined
by deaths, desire of elderly people
o move to smaller quarters, labor

nhase^nf

difficult

likewise

ic

it

reduction

oi

houses. Every part of the housing
industry has a strong interest this
year in getting the cost of new
houses down to the lowest practicable figure,

orevenf inventories

contraction to

nessmen

Dro*

to off-

it is extremely

as

the

in

in

necessary

unintended

the

set

increases

further

on

competition

ine

ineei,

repayments over new borrowings, compares the intended and actual
But what about the plans of purchases of old houses in recent
consumers to buy fewer houses years.
and other durable consumer goods
Thi j
t tfa
housi
k t
this year than last year and the
,
° Dlain thatthpnoTentiai
unfavorable attitude of a large maKes it plain tnat tne potential

consider^^^planned

goods have

decided have become low enough

duct

the

ture in 1954 and can make a
major contribution toward pulling

v

.

,

be

can

bright spot in the economic pic-

spending for consumption will be- ported at the beginning of the ™the intentions to buy houses,
gin to increase sometime during year are not necessarily final Let old or new' reP°rted m the curthe summer. This belief is based
first
and ac- rent survey of consumer finances,
uP°n three principal reasons: (1) tual purchases of houses and then
?
four-year period 1949-1952*
employment and personal incomes consider the planned and actual
to number of spending units
will experience some rise when pwchases of durable consumer that intended to buy houses, new
business shifts from reducing in- goods
*
or old was 9'1 milll0n5 the numventories to producing at a rate
The follQwi
teH
ghows the ber that "S The^look a^he

tendencv

a

still further the

which

to rie s

will lead to in^
win lead to in
demand for con-

goods and thus

sumer

.

industry

new-house

35

spite of the fact that the sur'
consumer finances does not
nmnnrtinn
of
rmcnmprc
towarH demand for housing, new or old,
Some economists have suggested
vey oi consumer nnances aoes not proportion oi consumers toward
the nrpspnt timp k mnrmniw
that it is honplpss for thp npwseem to indicate a revival in present prices? Experience shows ai ,
Pre.sePl
enormous— tnat it is nopeiess tor tne newSDencjin2
for
either
housing
or
that thP nbnc
mLimprs to hnv so larSe» indeed, that one can at- house industry to expand its marspending 101 eitner nousing or that the plans of consumers to buy tach lift e si^nif ranre to the rlrnn ket at the exnense of the nlddurable goods, I believe that houses and durable goods as re- . *?,u . signmcance to tne drop Ket at, tne expense of tne old-

will lpad to
win lead tq
production and em-

invpntories
inventories

increase

■

key to Pe course of busiP,5SS *n
Umt;ed States during
ne*\ *ew months. Unless these
expenditures rise, business revival
will not occur
•
-

not

rednpp
reduce

to
to

ucxjiuc

iiidiiagexa

do

(1807)

of

VI

Spending Units Intending to Buy

and Actually Buying
Furniture and Major

to

Intending

Actually

Intending

to Buy

Buying

Buy

Household Appliances

Used Automobile

New Automobile

Intending

Actually

to

Buying

4.1

Buy

Actually
Bnyin£

27.4

1948

9.7

1949

11.8

1950

10.6

9.9

6.9

14.3

1951

6.6

8.2

5.5

13.8

27.4

42.1

14.9

23.2

39.3

'

1 6.8

1952

6.8

1953

9.0

9.8*

1954

7.8

5,739,157
than

by

new

1

Reserve

Bulletin,"

passenger

6.2

«...

cars

business organizations.

July,

r

1953.

registered

28.4

26.8

--

698,

701

and

41.8

31.9

__

6.0
pp.

30.9

—

6.0

6.8

"Federal

—

"

1

represented purchases by individuals rather

33

The Commercial and Financial Chronicle... Thursday, April 22, 1954

(1B08)

Continued

make

jrom page 35

across-the-board

small

a

It is

reduction in the income tax.

wasteful,

tolerate

to

The Business Decline and

pointed out,
unemployment of a

million

or

have

I

as

the

above

so

Securities Salesman's Corner

normal

frictional

Prospects for Early Upturn
•chases

that people can

means

down to 10%
(with a few
exception), had eliminated these
taxes altogether. The purchasing
power of consumers would have
been raised by about $2.5 billion a
cises

be

j#ersuaded to buy, so that the re¬

ports on buying plans at the be¬
ginning of the year cannot be re¬
garded as final. Furthermore, the
fact that purchases of used cars year, or about $1.5 billion a year
<each year greatly exceed the pur¬ more than it was raised by the
tax
cuts.. The
chases of new cars, suggests that recently-enacted
4he new-car market can be well gain in consumer purchasing
^maintained provided new cars are power would not have been large
made
sufficiently
attractive in enough to have converted the

quality and price to force a more

present buyers' markets into sell¬

•rapid scrappage of old cars.
This
analysis
of the buying

weakened

ers'

of

T?lans of consumers for houses,
automobiles, furniture, and house¬

of

number

lion

probably exceed the
houses that will

the case

a

cash

about $2.5

be about

indebtedness

consumer

borrowings.
would

of

would

be

assisted

would

be

brought

tries, more and more cuts in
prices, and, in some cases, im¬
provements in quality. But the
very success of consumers in forc¬
ing manufacturers and retailers to
cut prices and to improve quality
•will lead consumers to purchase

managements

of

to

create

is

in

from

revenue

tax

that

fact

by

people

many

kets of

without any as¬

needed

is

in

sufficient

reasons

sufficient

order for the
to

the

come

soon,

several,

of

ruled

be

out.

tolerate

inhuman

tional

for

jcetailers'

of

cutting

and

the

additional dollars.

the

it

cut

and

manufacturers'




ex¬

Hence,
possible to

becomes

personal income tax, the
should
the

cuts

cent

A

take

a

form

marginal rate of

reductiqn of

a

given

in the total income tax

liability of

taxpayer would
the marginal rates of taxation
every

W

Mr..

Ezra

in

gov-

at

a

at

shington
April 13 to

mark

the

celebration
the

25th

of

An¬

the

of

Although

tax

an

a

desir¬

relief.

upturn in business

is not many months
away, I hope
that the Administration will ask

Congress

promptly

to

eliminate

the rest of the retailers' and
I

Feb.

Host

the

at

dinner

was

the Birds
Benson

Taft

Ezra

the
Foods

Eye

Division

Corporation,

of

General

which

was

formed in 1829 when the corpora¬
tion acquired patents and knowhow from Clarence
neer

scientist

in

thus

embarked

Birdseye, pio¬

this

field,
the

upon

and

build¬

ing of a new American industry.
Secretary Benson pointed out
that in 25 years this industry has
grown

from

single plant to an
which
today
includes

industry

a

1,400 processors, 235,000 retail out¬
lets
of

last

and

volume

a

than $1 billion.

more

sented

did

year

Charles

to

President

of

He pre¬

G.

Mortimer,
Goods, a
Agriculture De¬

General

citation from the

partment, which said that the in¬
dustry's progress "is marked with
milestones

of

achievements

history

that

have

making

-

resulted

in making available to the people
of this land vast

tritious,
frozen
In

high

-

quantities of

quality,

nu¬

quick

foods."

accepting the citation for his
for

reasons

the

edition

Financial

ufacturers'

excises,

or

the

ter,

easier,

more

frozen

foods

chance

of

man-

else

to

graceful

didn't

Mortimer

said.

American

tradition

tion,

the

women

the

freedom

kitchen

folk

in

the

them

are

will

assistance in pre¬

their income
The

not.

repay

you

ones

corporated,

Others

tax.

in

over

in direct

busi¬

for the time you spend with
them. Many women will especially

ness

be

grateful to you for your help
preparing their tax forms and
if you once have their confidence
to the extent that you

know their
financial situation (as will
revealed to you when you sit

entire

them

with

their

report)

and

you

make

Three

otherwise

opportunities for
would not
to light. Go over

come

most

likely

were

elected!

directors

were

Mr,.

Bateman

B.

and

executive

also

was

vice-presi¬

dent of the firm.

Municipal Bondwomen
To Hold Outing
The

that

prospects

Municipal

Bondwomen's

Club of New York will hold their
annual outing on June 25th at the
Rock

N.

Spring Club, West Orange,

J.

'

■

Joslyn, Sloane lo
Be Weinress Partners
CHICAGO,

that

list and pick out some of the

your

of

Frank

re-elected

reveal

business

directors

new

the meeting.
They are H. C.
Maginn, of San Francisco, and
Urban D. Mooney and Frank
Lynch,
both
vice-presidents
of
Blair, Rollins.
Re-elected to the
at

from them. Quite often, these

doing

elected chairman

was

up

quite
busi¬

be

can

certain that you will obtain
ness

Wall

Street, New
York City, Joshua A.
Davis, for¬
merly chairman of the executive

in

down

44

who will, can

times

many

radiation and also

be

meeting of share¬

holders of Blair, Rollins & Co. In¬

people who will James J. Sullivan, who

some

your

Elects Officers
At the annual

Bryant,

you

111. —On May 1st
Joslyn and Harvey

George

R.

Sloane

will

Weinress

become

partners

ir*

&

Company, 231 South
Street, members of the

think would like to have your of¬

La

fer of assistance.
helping others is

New York and Midwest Stock Ex¬

bank,

Time spent in
in the

money

For

some

years

Salle

changes.
of

(unquote)

secretary, I
approximately one
my

,

have

assisted

hundred Mutual Fund clients with

their income tax returns.
A

part of my

tion

of Mutual

personal produc¬
sales from

Fund

March 1st to April 6th—27 work¬

tion, totaling $48,657.90 and there
are

still

11

more

radiation

pros¬

pects that I have not had time to
contact.

In addition to the above,

1 made 30 sales which

were

The

Financial

Colo.

Chronicle)

Jack

—

Austin and James W.
been

added

to

the

ilton Management
Grant Street.

staff of

K.

have

Dunn

Ham¬

Corporation 445

Joins Dominion Securities
BOSTON, Mass. — Lowell A.
Warren, Jr., has become associ¬
ated

ties

with

The

Corp.

Dominion

He

was

Securi¬

formerly with

First Boston Corporation.

repeat

orders

on
former radiation sales,
totaling $43,133.42. These 30 or¬
ders all came by telephone with¬
out any solicitation whatever on

my

to

DENVER,

(Special to The Financial Chronicle)

accounts, all from radia¬

new

is ^manager

Two With Hamilton
(Special

ing days—is the following:
12

Joslyn

trading department

I have realized

of Mr. Button's sugges¬
tion and have tried to capitalize
on it.
This year, with the help of
Mrs.

Mr.

the firm's

the value

part.

Joins J. S. Kimball
(Special

to

The

Financial

Chronicle)

BOSTON, Mass. — Mildred BL
Spering has joined the staff of
J.

Summary

S.

Kimball

&

Co., 24 Federal!

Street.

Total orders

42
i

New

12

accounts

Total volume

$91,972.32

The foregoing letter speaks for
In the final analysis there

only two

reasons

why people

cause

they have confidence in

you

emancipa¬
wanted

And

interested

in

when

show

you

their

it

welfare

by

your

—

acts

true

all

they could get from
chores.

steady returns to

Blair, Rollins Co.

board

Dividends"

living, Second, they remain customers
the when they find out that you are

the proverbial snow¬
colloquial setting," Mr.

of

and

Resident Partner in Chicago
For Dean Witter & Co.
CHICAGO, 111.—Dean Witter &:
Co.

that

announce

Witter is

firm's

now

Chicago

Monroe

William

ML,

associated with ther

Street,

office,
as

111

West

Resident Part¬

ner.

have

ball in its

"But

ular

re-elected president.

saying that remain your customers. First they
like you and believe in you be¬
American
appetite,

that unquenchable desire for bet¬

on

have

that clinches it.

of the
Chron¬

ties Salesman's Corner."

suc¬

of the frozen foods industry,
crediting first of all the prodig¬
ious appetite of Ameficans for the
better things
of life, which he

you

of the board. Emmons Bryant was

icle" the following article appeared
in John Button's column, "Securi¬

Mr* Mortimer reviewed

the

of

4th

"Commercial &

niversary of interviews
industry.

this

the books

When you sell good in¬
vestment securities that pay reg¬

committee,

v.p.

There

accom¬

away

salesmanship—that's all
to know.

will

illustration of the effec¬

an

appreciate

a

on

the

would, therefore, be

able form

so-called

I

tiveness of personal service along

without

earn

per

moderate.

mentioned

names

the lines suggested herein.

are

taxation.

Suppose, for example, that Congress,
instead

as

nation's prosperity.
"It
goes
without

which

I

suggestion

a

itself.

cut

--do not believe, however, that this
result would follow provided tax

kept

ter

said, is at the root of much of the

whenever

might prevent the price
cutting and improvement in qual¬
ity that I have argued are needed

were

persons

the

to

con¬

demand.

by

when

so

refrain from mentioning the name
of the writer of the following let¬

threatens to reduce the incentive

to

sumers,

consumer

earned

high income brackets which
is taken by the government

One might argue, it is true, that
anti-recession policies, such

cuts

dollars

ap¬

Eating"

throw

you can

Because of the figures given here

and

in the

come

stimulate

the high marginal
rates. The proportion of addi¬

more

out

nice

made here and it proves successful.

cess

in

reductions

cuts

the

gathered

some

tax

employment.

tax

the contraction.

tries

someone

a

we

us

human

All the

preciate it.

You

ernment,

tax relief where it is needed most

unemploy¬
is, unemployment be¬
yond the inevitable frictional un¬

to

consumer

being

reader

a

uIncome Tax Time Can Pay

plishments of the frozen foods in¬
dustry as some 500 leaders in this

company,

—namely,

unnecessary

additional

hailed

Benson

ing the exemptions does not give

ment—that

as

of

is needed to halt

the recession is needed is because
and

into debt.

and

paring

Agriculture

of

Secretary
Taft

More serious is the fact that rais¬

influences could produce a
sharp contraction. The other rea¬
son
why I believe that a more
active government policy against
wasteful

must be will¬

purchasing
power by about $5 billion a year,
which is undoubtedly more than

ary

is

go

increase

bination of these three deflation¬

it

one

some

proposals of various mem¬
Congress that the pur¬
chasing power of consumers be
increased by raising the exemp¬
tions in the personal income tax
impress me as undesirable. Some
of the proposals go too far—thus
to raise exemptions by $200 would
bers

the pos¬
bad months
Certainly it
is possible that business concerns
will begin to cut their capital ex¬
penditures while consumers are
ctill
reducing their
debts
and
while managers are still endeav¬
oring to cut inventories. The com¬
will

sibility

assets of the banks

The

be wrong. Although
at present there are good reasons
for expecting that the recession
upturn

grow,

ing to

may

cannot

the

earning assets of the commercial
banks ought to grow at the rate
of about $3 billion a year. But in

for this

that

make

to

supply grow as fast as the
productive capacity of the coun¬
try grows. This means that the

policies upon one's most op¬
timistic expectations. There is too
good a chance that these expec¬

and

volume

money

and to

lic

mild

at all times in

rowing is needed

letter

and

industry are being limited

ernments

less, not conservative, to base pub¬

continue

Benson

as

by the repayment of consumer in¬
debtedness, new borrowing by
the Federal Government, business
concerns, or state and local gov¬

conclusion. One is that it is reck¬

will

others hail
progress made since 1929, when
Clarence Birdseye's patents were
acquired by General Foods Corp.
Secy.

provided, i of course, the tax cuts
are not too large.
When the mar¬

Jbasten the revival? I think not.

tations

Anniversary for
Frozen Food Industry

in favor of them—

argument

while

a

Name of Mutual Fund (deleted)

25th

would

cuts

in

once

of this column will write

In

deficit in the cash budget

a

regarded

an

needed from the govern¬

two

ing too little, too late.

dinner

repayments. In addition, new bor¬

are

of doing too much, too
in the direction of do¬

than

the

tax cuts already made
policy of easy money.
Does it follow that no additional

There

direction
soon

to be in the

errors

argument against making
them.. As a matter of fact, it is

the

are

erable for the

an

the

€steps

dq it, but in deal¬
ing with recessions it is far pref¬

nearer

felt

volume to offset the effects of the

and

do and when to

considerably larger than

loss

The

the pur¬

ment to halt the recession

.

day

government be¬

yond

■

or

and

under¬

indicates that revival should come
a few months
sistance from the

govern¬

Every

appropriate public
policies would give them jobs. It ter, but since he so kindly tells us
is difficult for the government to that he is a regular reader he will
determine precisely how much to understand that I am
using his let¬

excises.

Government

jin

a

million

a

when

work

attempts to reduce inventories

the

do
recession? My analysis

the

account

allows

of

What should the government
about

which

of its citizens to go without

more

industry, in
a g riculture

would be

IV

of

strict

to

ment

will

nation

humane

a

which would follow abandonment

chase of many things.

Role

hold

duction, employment, and incomes

encouraging

leads

houses

the

and

tories still lower. The rise in pro¬

goods than they now intend

new

business

when
justified
in
ceasing their efforts to cut inven¬

lying demand for new houses pro¬
vided
the
price is competitive
with old houses, because experi¬
ence has shown that the purchase
•

Fur¬

inventories

reduce

to

concerns

is the evidence of a strong

defla¬

repayment

thermore, the efforts of

age

policies,

deficit

indebtedness.

consumer

when the volume of em¬
ployment can be controlled in
considerable
measure
by public

new

over

the

In this day

ment—it is inhuman.
and

By JOHN DUTTON

"Proof of the Pudding Is in the

large

as

the

Hence,

roughly offset
effect of the

tionary

finances they intend to

Particularly

the

th$ deflationary effect caused
by the excess or repayments of

ingly vigorous competition in the
•durable
consumer
goods indus¬

buy.

in

create

budget of the Federal Gov¬

do, they will bring about increas¬

to

the deficit
bil¬

But

would

year

the

improve

to
of

as

ture, and appliances, as they told
Stoe interviewers in the survey of

more

have

to

retailers to

and

and
cuts

ernment would

of automo¬

biles, furniture,
and household
applicanes, my analysis indicates
that buying plans are likely to be
revised upward. If consumers do
limit their buying of cars, furni¬

-consumer

prices

which tax

new

In

built.

be

manufacturers

cut

thus

and

seriously the incentives

quality of goods.

appliances indicates that in
the case of new houses the inten¬

hold

tions to buy

markets

unemployment.
The
country today ought to be pro¬
ducing at the rate of at least $6
billion a year more than it is do¬
ing. But it is worse than wasteful
to tolerate unnecessary unemploy¬

Midwest Exch. Member
CHICAGO,

111. —The

Midwest

Stock

it did without the aid of agrono¬

mists, farmers, engineers and re¬
searchers, equipment manufactur¬

Exchange today elected to*
membership Byron W. Hunter o£
Chicago, 111.

they

ers,
processors
and
packers,
willing to pay a premium for wholesale and retail distributors,
the built-in quality and value of
journalists
of
magazines
and
frozen foods, even in the
penny- newspapers and the Department
pinching days of the depression." of Agriculture, all of whom he
Mr. Mortimer said the industry praised for their
help in develop¬
could not have moved forward as ing the frozen foods
industry.

Robert P. Martin

were

Robert P. Martin partner in Da¬

venport

&

ginia, and
mond
away

Co.,

Richmond,

Vir¬

member of the Rich¬
Stock
Exchange,
passed,
on April 12th.
a

-

Number 9318.. .The Commercial and Financial Chronicle

Volume 179

Continued

jrom

the crystal ball but at the known

of

facts.

10

page

doom

ture

U. S. Economy
progress

follow

will

much

the

of

a

'

Committee

]

Trade

on

and

seasonally adjusted basis was

homes,

Economic Affairs
States

Economic Affairs

and

on

is

a

in

problems and the
means
for their equitable solu¬
tion.
As Secretary of the U. S.
Commerce, I

Department of
appointed

to

that

on

serve

was
com¬

mittee.
held

We

•

in

meeting

first

our

Washington on March 16 and ex¬
amined with candor and friendli¬

lems

which

struction

therefore,

governments

not

commercial

United

the

at

this

in

Trade

on

types of cooperation
but

Eco¬

and

Joint Board of Defense

and

and other

are

signs of

assurance

an

slow

of

solution of all our
defense, trade and all

steady

problems,
others.

v

iv

:

Economic Conditions and Outlook

factor

further

A

:

annual

lion,

less

July

and

ary,

1953.

tion

has

at

reflected

in

the

assure

that
reality

in

to

respective countries.
exports

Because

between

and

20

rep¬

25%

of

national income, your econo¬
is likely to be more sensitive
in the economies

fluctuations

of all other nations, but more es¬

United

the

of

pecially

want

to

me

States,

the

of

attitude

ministration

with

economy.

the

•;

respect

to

in

America.

and sincerity the

United States as it appears

of the
to

economic picture

As

goods

you

and

reckoned

the output of,
services in 1953 was

know,
at

$367.2

billion,

just
every
source

We
and

at

to

use

to

fight

the

power

environment

an

to

But if

future date adverse con¬

some

ditions

encourag¬

economic growth.
should

require

additional

from
a

new

policy, new tax revisions,
incentives to business expan¬

sion

employment, large scale

and

public works and whatever fur¬
public spending and legisla¬
tion are needed to cope with an

a

in

Korean War economy

peace

economy

began.

to

Emer¬

This assurance, in it¬
spur to business confi¬

emergency.
a

dence.

ous

for 1954 presents numer¬

recommendations to the Con¬

preparedness efforts were gress for sustained economic
replaced by a continuing defense growth.
1
gency

sustainable level.
In a nutshell our objectives are:
Naturally it was recognized that (l) to make steady jobs, through

program

on a

of the
certain
readjustments would occur in the
civilian economy.
Some of these
following

the

slow-down

earlier defense expansion,

readjustments are over and

others

continue.
The annual rate

put has

of national out¬

•

providing

incentives

investmentj in
and

other

and

(2)

of

expansion

ment insurance

business

equipment
productivity

to place more

consumers' hands,

visions,

to

plant,

means

money

in

through tax re¬

of

unemploy¬

so

and other job se¬

teo

of

both

of

heart?

shall

welfare

all

of

part¬

in Ellis &

ner

of

Phoenix. Prior

Paul Yarrow

thereto he

was

the trading depart¬
ment of the Chicago office of E. F.
of

manager

all that is best in the New World
the

a

Yarrow

forward

go

for¬

was

merly

With those ideals

we

Mr. Yar¬

nue.

stem

us

of
Ma¬

office, 205

row

heritage and from our
schools, our churches

our

our

for

Hutton

mankind.

With Founders Mutual
(Special

to

Co.

&

Joins

and

of

Clement,

Renyx, Field Co.

Chronicle)

The Financial

(Special

DENVER, Colo.

to The

Financial

Chronicle)

Marvin S.

—

COLORADO

Spracklen has joined the staff of
Founders Mutual Depositor
First National Bank

Herbert

Corp.,

SPRINGS, Colo.—
Snegosky
is
with

J.

Renyx, Field & Co., Inc.

Building.

Tax Revision Bill Seen

plant and equip¬

expenditures in this cate¬

$28 billion.

Commenting

developed

resources

at

limitless country,
nothing of your amazing
growth, and as we in

say

look

States

at

the proposed measure
perspective, the "Monthly
Bank Letter" states it is necessary to look at the program as a
whole which, as the table shows, affords a release of around $7
billion revenues or just about the amount that government out¬

which will benefit individuals.
<

our

.

lays

Power

for

would

do

be

enduring

mutual

a

war

business
as

would

of

the

a

Totals

econ¬

Expiration after

and
4

$814

5

President

curse.

Eisenhower

has

a

abroad,

etc.

the benefits out

individuals. The 'other benefits to in¬
children, child
doctors' bills, pensioners, farmers, etc. Apart from

dividuals' include better tax treatment for working
care

expenses,

the expiration of

the

excess

profits tax, the main benefits to

cor¬

porations is permission to shift ahead deductions for depreciation
and

change that should yield increased revenues in
On the other hand, the partial relief from double,
dividends would scale upwards over three

depletion,

a

to come.

years
,

taxation of corporate

pro¬

calculated ultimate revenue loss of $814 million a year.
proposal—costing $240 million revenues
fiscal 1955—that the minority party in the House would have

years

for

"It

in

a

is

this dividend

discarded in favor of an increase

to

in personal income tax exemp¬

tions from $600 to $700 at the cost

The door is

Russia to join the
rest of us in applying atomic en¬
ergy to industry, medicine, agri¬
culture, electric power develop¬
ment and other peaceful pursuits.
open

years.

of the whole program go to

stockpiles of normal uranium and
kept

later

in

"It will be observed that nearly two-thirds of

that the nations contribute
common reservoir from their

fissionable materials.

when

earned

income

posed
to

million

One-year extension of period in which business can offset losses against
profits for tax purposes, reducing the tax load on certain types of business

of
in Bible days—could be
a

$240

6

modern pillar

of

extension from original June 30, 1953 expiration
loss is subject to a wide range of error.
million in fiscal 1955; $642 million in fiscal 1956;
fully operative.-

mos.

revenue

loss

Improvements in tax treatment for working children, child care expenses,
bills, pensioners, farmers, etc.
Allowance of more
rapid depreciation in early years will increase tax

revenues

safeguarded.

instead

6
of

estimate

doctors'

flame renewed assurance that their

boon

The

3 Revenue

apparent to all the world in the
explosions in the Pacific. The
people of North America saw in
the giant mushroom of smoke and

a

—4.7

—2.6

i

2

test

fire—as

—0.3
—0.3

Expiration of increases under Revenue Act of 1951.

date.

entire world.

awesome

—0.5

1

Niagara of

—0.2

;<

Corporation depreciation allowance 5
Other benefits to corporations 6

Appreciation of the devastating
power of the nuclear weapons was

The

—1.0

*

to individuals 4—

Other benefits

peace

activity and global trade
lift the living standards

is

—3.0
—2.0

Dividend credit 3___

world

omy built on soldiers' graves and
broken
families.
Genuine peace

unleash such

Individuals

i_.

Tax Revision Bill:

good

not have to have

would

Corporations

I

Jan. 1 personal income tax reduction
Dec. 31 expiration of EPT 2

will of the
governments and the peoples of
the earth. In order to thrive, we
the

Program

(Figures in Billions of Dollars)

Peace

The greatest stimulant to

by

year:

April 1 excise tax reduction

Atomic

trade

being reduced this

are

To gain

1954 Tax

of our lives are
'V,.,7

years

before Congress,

now

dividends is only one of several features in

industrial

United

the Tax Revision Bill

on

the April issue of the "Monthly Bank Letter" of the National City
Bank of New York points out the relief of double taxation of

rec¬

ord rate in your
to

Benefiting Individuals

April issue of the "Monthly Bank Letter," published by the
National City Bank of New York, points out reduction of tax
on dividends is only one feature of new legislation.
+

billion.

$180

of

sum

of

The calculated deficit

a revenue

loss of $2.3 billion.

by this substitution would thus be enlarged

by roughly $2 billion.
i
"The relief from double

taxation

of

dividends

would work

individual would exclude from his
taxable income dividend income up to $100, calculate his tax in the
usual way, and then subtract from his tax bill 10% of the amount
briefly

gone down, but the de¬
far has been moderate.




ideals

San

Fourth Ave¬

together, contributing our share of

our

year,

The people of Canada, where
curity and human welfare assist¬
uranium
is dug, fervently pray
ance. Already tax reductions since
Even so, we are operating at a
Jan. 1, have left $5 billion of tax for such a transformation. So do
current rate a bit below $3-30 bil¬
savings in the pockets of the peo¬ the people of the United States,
lion.
The total for the year 1952
ple to increase their purchasing where bombs are made. I believe
was $348 billion.
So we are much power this year.
with all my heart that the com¬
better off than two short years
mon
people of Russia yearn for
Included
in
our
program
are
ago.
this outcome as earnestly as we.
measures to strengthen
the econ¬
Let
us
examine
a
few more
Therefore, let us persevere in
omy through new housing incen¬
yardsticks. Our very latest survey tives—a fact of interest to your efforts to prove our good faith
of expectations for new plant and
regarding atom peace to those
lumber
industry — through slum
equipment indicates that business
clearance,
agricultural supports, behind the Iron Curtain.
plans capital expenditures almost
If we patiently try, the Soviet
ship
and highway
construction
as high as in peak 1953—the sum
subsidies.
Government
may
join those of
of $27.2 billion only 4% less than
Finally an appraisal of the econ¬ Canada, the United States and all
last year.
friendly nations in finding the
The
latest figures show
that omy of the United States requires
means of diverting the vast power
construction activity in February a look into the future—not into
cline

in

My friends, as you look at nat¬
ural

addition, the Administration's

program

in

we

and our homes.

population growth
private industry

new

huge

continent
In

services

has

never

The

guaranteed by honest treaties and

a war.

employing

are

goods and

of

as

manager

the

been equaled in
reached the peak
without the regimentation of dic¬
tatorship.

every

persuasion of government to

create

ing

feasible
arsenal,
as
government mobilizes
material and human re¬

the self, is

our history.
In the
second half of the year transition

highest

1953

ment since the end of World War

in the economic

ther

me.

to invest in

of signs of a serious The best
they expect their gov¬ ■ahead.
in
support of private

etary
describe with frankness

me

history—and

enterprise

and

case

recession,

shall not hesitate to use new mon¬

more

by

year

United States

prompt, vigorous direct action, we

buys

output

Ex¬

Curtis & Co.

growing population and dynamic
are
of one mind never to drift industrial potential, don't let any
into an old-fashioned depression. pessimist ever persuade either of
us that we're on the wrong track.
They rely on free enterprise as
their
normal
economic
system. We've both got a bright future.
But

Stock

the United States the value of the

encouraged

the

The people of the

Commonwealth, Europe and Latin
Let

has

1953

Ad¬

New York and

Confidence in this technological

In

Eisenhower

in
ex¬

mem¬

bers of the

changes,

job opportunities and

new

is

I believe you may
describe briefly the

factors,

plus

purchased

or

Fay,

have done so without manu¬
facturing a single slave chain. In

markets, including increased
desire for imports.

the

from you than
do all the nations of the British
which

viding

II

additional

&

you

pro¬

Canada and other

Hooker

with

San Francisco

new

best cus¬
in excellent

consider

we

goods

associated

become

have made a world record in
swift industrial development—and

industries and creating new, pro¬

gory were

Betore

your
my

$282.5 bil¬

shape.

dition of

cognizant of your own

home

at

your

you

of

consumer

Steadily,
competitive

•

has

the end of the great war

Since

Fay

Calif. —Paul

MATEO,

Yarrow

of

porting nations.

at the end of

as

from baby crib to
chair, will be a po¬

easy

trade with

r

weapon

our

161.5

person,

revolution

enterprise

resent

rate

same

SAN

economy, our

duced

The recent tax reduc¬
kept disposable income

United States is the economic con¬

are

power

from

tential

below peak
above Janu¬

2%

than

trade relations of Canada and the

You

of

rate

$2 billion

ernment

situation.

are

population of 175 million.

a

elders'

1953.

Joint

in the Permanent

Affairs,

unity

the

tomer

and

Canada

of

States

Committee

nomic

with normal

marketings.

teamvvork

The

to

Total

services.

independent
demonstrating the

mate

unemployment

Hooker &

States—two

nations-

system is
remaking the residential and in¬
dustrial
map,
transforming
old

we

interfere

to

.

is

United

By 1960—only six years
hence—our census experts esti¬

Without the slightest intention
seeming unduly optimistic or
surpluses abroad, to
of boasting, I cite the facts to re¬
interested countries

with

consult

of

population

population

our

<the

and

separate,

million.

of

agricultural
and

Today

Personal income in January was

You,

the United States, in disposing of

entire

two Canadas.

improve¬

seasonally

the

in

that it is the continuing

the

million—the

30

Every

of its con¬
affirmed
policy of
of Canada and

particular,

run

dues

employment has
increased to 60,051,000.
Total consumer spending
thus
far in the first quarter has kept
pace with the fourth quarter rate.
The decline in durable goods pur¬
chases has been offset by a rise

aware

are

In

tents.

published.

been

has

que

some

than

more

3,671,000.

official communi¬

The

countries.

showing

Estimated

ment.
rose

both

to

common

are

giowtn

market

the trade and economic prob¬

ness

pupuj.ai.ion

increased

pri¬

Paul Yarrow Joins

limits

you

pace

establishments in Febru¬

was

of

dom.

lower by 120,000 than for

The reduction

of

weapon

side

other

equal your remarkable recent rec¬
ord, since 1940 our population has

marily in manufacturing with con¬

currency

the

on

ary was

January.

and

shining

cultural

appointed by our respective
governments to meet and discuss
in broad
terms economic, trade

cers

a

friendship and the glory of free¬

equiva¬
lent of adding to the United States

special committee of cabinet offi¬

from

instrument

an

The

are
going ahead.
Although the percentage

Employment in other than agri¬

atom
to

blessings for all mankind.
In closing, let me repeat:. Can¬

of the mountain and in confidence

dip;s utilities expect a 10%

8%

is

sun

jump.

Committee

Canadian

-

Trade

offices,

we

know, the Joint United

As you

■

factories, 'stores,

farms and expanded services.

an

the

ada

both from January and from
February, 1953.
Our recent surveys report busi¬
ness

in

fu¬

less

to

Joint

the

in

and ours—to spend money on de¬
sirable
goods, renovations, new

up

may

will be removed.

-

confidence

sales expectations in general
approximate
those of
1953.
Duraoie gooas producers expect

which

uncertainty

still feel about customs
•administration
and trade policy
some

on

that

and

For

prompts people with a high
capita income—such as yours

per

in Excellent Shape

37

(1809)

as

follows:

In 1956

an

of dividends included in his taxable income.

effective

come

in

a

The plan would be¬

graduated way beginning

Aug.

1,

1954 and

fully effective in the calendar year 1956.
and Means Committee report points out that this
formula affords greater relief for the low-income investor than
would

be

"The Ways

for those at

higher income levels:

"The method of relief from double taxation

committee
,

is

a

modification

of

selected by your

dividends

the

received

adopted in Canada in 1949. However, the present Canadian
is 20% instead of the 10% provided in this Bill. Moreover,

ing/the credit to the amount of taxable income,
than

the amount of dividends, is a

the Canadian system.

method

income."

for

credit
limit¬

when it is less

restriction not imposed under

On the other hand, the dividend exclusion

provided by your committee's Bill is more liberal
dian

credit

persons

receiving

than the Cana¬
of dividend

small amounts
'

38

The Commercial and Financial Chronicle...

(1810)

Continued from page

3

last three months of 1953.

In

the way, interesting to note that
throughout this entire report the
"maximum employment" is
used. There is some question as to

billion

the fourth quarter of 1952 the re¬
sult is an effective decline over

term

the year of $11.5 billion in demand
from the business inventories seg¬

3

/

whether it is

several years these

to

trast

Factors

Affecting the Trend
Of the Economy

the

of

ment

rise

a

of

$8.5

con¬

billion

in

Since

economy.

an

effective decline of $6.1 billion 'in
business
inventories
took
place

deficit in its annual budget for
several years.
The Council of Economic Ad-

third quarter of 1953
through the fourth quarter of
1953, the major impact of the devisers informed President Eisen- dine occurred at that time. In
matelv $360 billion while effecting hower, prior to his report to Confact, the year 1953 was characterimportant shifts in demand be- gress in January of this year, that ized by beginning at a gross natween
the
various
component most
of the economic trouble tional product level of $361.1 bilareas.
causing the rise in unemployment lion, rising to $371.4 billion by
..."
during the latter part of 1953 the end of the second quarter and
the following
sustaining factors to maintain our
economy at current high gross national product levels of approxi-

tion is relying upon

from

a

the

.

„

Extraoidinary expansio

(1)

o

population.

cen+ered jn the decline in the rise

basic

0ther

Investment outlays in agri-

(4)

'culture

population rises.

as

needed
neeaeu

construction
consuuciion

Public
Public

(5)
(5)

schools, hospitals, highways.

now:

_

,

,

.

..

(6) Business cost reductions and

price policies which pass a share
on to the ultimate

-of the benefits
consumers.

some

those

propensity

high

A

Binee last spring

government ofbusi-

the'

soundness of Presipremise
for
business
activity
and

debated

Eisenhower's

dent

sustained

employment in the United States,
this theoretical and statis-

Wnile

battle

^ged,

conflicting

of

opinion

unemployment levels rose

'hat and nrnrliift demand
somewhat and product aemana
Ynonv
areas
deHined further
many areas declined lurtner.
the

-fJTifear

that

people

Y?™

on^

minds
minds

the
the

onto,.or)
entered

of
ol

manv
many

no«cihiv

recesHpnrps-

a

and even possibly a depies
sion such as the United States ex-

sion,

L "

*1

this

im

Ko

1932, might be imInteresting ly throughout

minen.

ere

n,i«ht

1QM

i„

jjericnced in

United

their

pursued

ously

expansion

plans and activated those plans in
face of rising negative eco-

the

nomic

Nevertheless,

psychology.

uoemployment statistics edged upward.
Prevailing pessimism was
reflected in a decline in the stock
market

though

the

Council

dent

enable

to

crises

of

suffi-

Congress to

take

steps to counteract any rise in un-

employment.

This

Act

provided

the President of the United States
with

Council

a

visers

to

keep

unformed

as

Economic

him

to

Ad-

continuously

the

health

of the

and it provided Congress
independent group of

economy

with

of

an

economists for

the

same

purpose.

The Congressional economists are
associated
mittee

with

Joint

the

Com-

the Economic Report.

on

With the assistance of his Council.

of

Economic

Advisers

it

is

boped that the President will be
dfo'le to detect any weaknesses de-

veloping in the economy and will
report these weaknesses to the

reports and

dations

or

recommendations which

Congress feels
economic

recommen-

would

needs

of

satisfy

the

the

country
under'the existing circumstances.
In the past, to sustain

employment

levels, Congress has relied most¬
ly upon the highly inflationary

deveiop

Hence, im—

should remain stiong.

SfJitlonarv^

that

steps

them

counteract

portant compensatory steps of an
economic or financial nature by

eaTe

to

pr0vide
wor^S)

for

taken

hp

further

tredit

nlah<?

to

public

provide

in

to

instance

that

expanded

and

duction

be
For

rPPomrnpnd*

thpv

personal

for

re-

a

taxes,

par-

PreJi- li£ul?-rly alth(eJow incomAe,leve1'
?ewohnSta'lJ"The Cou"cl1 ?f Economic Advisers
soreported and '
Eisenhower so lepoi ted ana apparentiy
conseauences

already has plans for

Tan!faCr°vmi954
Congress in initiating road> airporf, dam, and
Ja'™ary>
hospital construction. At the same
Many highly competent indi- time several measures are recvidual&.in all walks of life have ommended for aiding and stimut

ment

services
for

from

than

it

was

current

able

to

pay

receipts.
Thus
ilie United States has experienced




of

the

structures created by the

Act

ment

of

1946

the maintenance

terns

of

full

estimated

business

programs

employ¬
of

"(1)

assurance

per

bers

Table II shows the summary of
economic budget for

employment

duction for the actual

1953, and for the

and

A Further

pro¬

report.

This

product

and

its

components

is

model

showing the

product

demand

maintain

ploy

our

m e n

present

t

levels

ployment.

amount

of

sonably

expect

amount

dividuals

em¬

high

demand

we

with

can

this

rea¬

shows

that

and

needed

the

a

about

or

withdrawals

two

million

in¬

reduction of hours,

a

to

reduce

this

further

a

purchasing

total

man-

would

reduce

pay, and hence
fall in consumer

and

power

probably*

decline in demand for goods
and services.

some

amount

likely to develop if present

to

take-home

cause

deficiency in demand between the
amount

of
em¬

bring about the ad¬
they would
have
ta

rates,

wage

de¬

total

model

such

in

hours of work by about the same
amount.
Unless offset by higher

mand trends.

Since

instead

reduction

If

sufficient

the

present

wili

to

were

justment,

to

versus

It is
num¬

labor force

occur

the

of

amount

necessary

the

might
of

alone

for

those years, but rather constitutes
a

in

now

Voluntary Re¬

additional

decline in hours of work per em¬

1954

forecast of the gross national

a

that

choose to return to school, to the
household, and to the retirement
rolls as they have in the past year.
Furthermore, it is possible that a1

fiscal year

estimated

Committee

innot

are

results:

the nation's
maximum

if

pat¬

a

be

not

and

savings

-

changed, they will lead to one/or
combination of, the
following

Employ¬

should

Joint

that;

suggests

consumer

vestment

institutional

the

eco¬

expressed opposition to this an- lating activity in the area of cap- nomic forces are not supplement¬
"(2) An Increase in Unemploy¬
alysis. Many of these opposition ital formation by business,
ed, the conclusion of the study is ment. If all or most of this ad¬
that vigorous steps should be tak¬ justment is expressed in unem¬
opinions are very sound economically. Some economists feel that
^nose wno xeei
mat moie en at this time by Congress and ployment alone, there would be
fh
information
given
whereas the information given vigorous economic measures the Administration in order to an increase of perhaps two mil¬
V8
lu ™eas.ui:es
.

,

Fiqpnhowpr

S

^

bv

Eisennowei

ur.

nse

in

will
k

time,

.

f

th

mfintal demand

nd th

economic

Economic

ronn1pr

movp~

serjoug

fhprp

win

widespread

t de_

unemplov-

^^Go^^Scoun^^I
.

too

.

..+t]

„

*

4

"late
*

Presi-

,

in

the event ot the detection of fur-

ther weaknesses are principally
the measures that should be taken, but that the measures should
be taken now. The principal reawhy

son

was recently given this opposition view

visers

should

jBo^rd brought Professor

Almost

in opinidn
is felt by

vored by President Eisenhower

.

A dramatic emphasis

Advisers

J*0* who w0"¥ act differently
that the corrective measures fa-

bp

„0f>n

bv

ail

entirely, the difference
is one of timing. It

financial

and

favored

measures

U1,

■

d

will be upon us so quickthat unless-we immediately ini-

t-

time

^

wide-

generate
,

this

"v
/
iavurea oy rresi
dent Eisenhower and his Council

at

!^s °* lls cau.f' particularly at
.ga

at

regard-

unemployment,

oartionlarlv

this

Congress

d

UdUon a\ia congress at ims time
sponsor the same type of correc-

force

collect,-ine accelerating torce oi
a

,u

♦

x-

t

is
of

.

acceierating

u

3

should be taken by the Adminis-

Dr

by

Arthur F. Burns and his staff,

President

Eisenhower

and bis Council of Economic Adfeel

that
be

not

these

taken

measures

now

is

be-

they feel that unemploy-

cause

Slty ot his tear of depression in consequences of the resulting in¬
°Pen
discussion.
Nevertheless, flation.
i"ere can be no doubt as to the
lmPortance of being correct in
Premise of Joint Committee 011
?ar aoalysis at this time, and that
The Economic Report
the correct action be taken.
The report Feb.
.

Many statistics
able

on

the

are

United

now

States

econ-

Economic Advisers
its analysis that

.

,

the Economic Report, represents

~ interesting

very

economic

a

and

statistical

correct in

tion

support of the opposipremise.
The report holds

that

after

the

mostly in the business
inventory section. Table I shows
areas

1T,and held, but that
S^oss private domestic
c_oraP°nent, business
declined $6.1 billion

_

weakness

was

centered

that practically all

_

26, 1954 by the
Congressional Joint Committee on

avail-

omy for the entire year 1953 and
they indicate that the Council of

of

current

de-

within the
investment
inventories
during the

overall

the

correction

component

cient

the

inventory
adjustment
demand, as now scheduled

anticipated

or

of

to

by
the
various
will be insuffi-

areas,

maintain

employment

the

levels

anticipated

Employment Act of 1946.

of

by
It

the

is, by

#

I ABLE I

Third Quarter 1953-Fourth Quarter

further

any

ployment.
those

rise

in

be

to

taken

from

could
in

are

Eisenhower

President

and

the

levels.

present

raise

total

winter

of

1954-55

million

basis—approximately the

stated

they are /in
favor of taking in the event that

seasonally

adjusted!

Census
the

Bureau

'new

'old

sample'

sample."
it

could!

"(3) Adjustments in Price Lev¬

compensatory
In contrast,

els. In

private competitive

a

aid is necessary now.

omy an excess of

the

econ¬

mand tends to work toward

Committee

subnpits a

report showing that weakness will

develop, and, in fact, is in the
of developing at the pres¬
ent time. They maintain that this
is

continue

will

fundamental

tax

and

act

for

increase

ahead

In summary, the

Committee

immediate

weeks-

in

on

whether

or

not the*

economic decline will be mild and?

as
1

follows:

the

contemplated

concentrate

findings of this
are

in

as

carefully the implications of the
resulting employment and priceadjustments. The analysis should/

reducing

report

de¬

thePresident's report, the Committee*
and the Congress should consider

taxes in other areas—particularly
excise taxes.

Joint

de¬

"If it develops that private con¬
sumption and investment do not

1955.
They want action imme¬
diately; hence there is strong sup¬
port in Congress for raising the
personal exemptions in the in¬
come

a

The report recommends the fol¬

and

1954

over

lowing action:

and

through

supply

cline in prices and costs."

process

weakness

orti

secondary effects of such unem¬
ployment are difficult to measure..

visers, relying upon the expected
strength
of
sustaining
forces,

Joint

as

same

amount to about five million. The

his Council of Economic Ad¬

no

a

On

Thus, the difference in thinking
on timing.
The President

that

on

the

weakness should develop.

maintain

be¬

during the 1949-50 adjustment

centers
and

to

tween four and four and one-half

have

already

This

unemployment

the Council of Economic Advisers

self-correcting

without

further-

government

"On

the

basis

of

the

assumed

labor
and

forces, employment, hours
productivity, national produc¬

tion in fiscal 1954 could total $365
billion
and
in fiscal
1955, $373

billion."
"Demand

tion,

for

the

on

national

basis

of

produc¬

estimated

present trends, plans, and expec¬
tations, however, is estimated to
total $363 billion in fiscal 1954
and $360 billion

"This

(in

summation of

Table
to

in fiscal

II)

of

projections

indicates

inadequate

sustain

1955."
the

pos¬

total

de¬

'maximum'

em¬

ployment and production amount
to $2 billion in fiscal 1954 and $13

1953

lion

unem¬

Interestingly, the steps

recommended

mand

Analysis of Trend of the Economy
1.

stop

sibility

^

the

action, as was largelyin 1949, or whether the-

case

economic

decline

is

of

more-

a

serious, more widespread, and spi—
raling kind.
If
the
latter, the*
Congress could consider proceed¬
ing on three fronts mentioned in?
the

Economic

Report,

additional'

to

those spelled out in the Presi¬
dent's program:

"First, the Congress could
thorize
money

further

a

and

consequent

easing

credit

of

markets,

declines

in

au¬

the-

with/'

interest

rates, relaxation in lending terms*
and
as

loan and

guaranty programs,.,

inducements to private expan—

(In Billions of Dollars)
3rd Qtr.

Item
Gross National Product

Components:
Personal Consumption
Gross Private Domestic
InvestNew construction

Producers' durable
equipment.
Business inventories
Net

Foreign_____

1053

ChangesIncrease

$369.5

Federal,
ational £

Other._

4th

Decrease

$6.0

TABLE

II

Qtr.

1953

Gross National

$363.5

231.0

1.0
6.4

Product

Versus Expected

(In Billions of Dollars)
Actual

230.0

55.2

48.8

24.9

—Estimated—

Fiscal

$0.4

27.1

25.3

0.6

1.1

0.2

60.4

—3.0

National

Production

(consistent

Fiscal

FiscaF

15)53

15)54

15)55

with

26.5

6.1

3.1
—2.1

85.5

of

having the govern¬
purchase more goods and

measure

aim

further

states:

analysis

present

some

takes steps to

his

is
feeling
thinkers

a

economic

many

the

"This

involuntary,

not

economy

our

areas,

economists, reviews the Presi¬

implement either

among

that

not

In fact there is

demand

This the President has
done each year since the Act was
passed.
Congress, with the assistance of
its

Committee

ployee

Congress.

dent's

and

nature
normal.

'

Continuing
-

of

of

advance

in

ments

tion."

economy,

econ¬

satisfy
at 'maximum*
employment and produc¬

duction of the Labor Force.

Colin Clark of Oxford^ England, ment will not rise much higher,
f. s,:r028 exponent of this opposi- and that if these compensatory
xl.on V12w> i° J^ew York for forum measures are taken now we will
States economy, Congress passed discussions of his views.
Inter- get inflation. Therefore, the econThe Employment Act of 1946. The 2,s
?
j""6 event i°st much of omy would gain nothing from the
purpose of this Act is to provide
lts Y.1^0^ becaVje Professor Clark standpoint of alleviating unemao insight into economic develop^oditied considerably the inten- ployment but it would suffer the
anticipation

Very likely
a
certain
unemployment, partic¬
ularly when it is of a frictional
our

amount of

in

add

can

levels of

employment.
free

omy

"max¬

conceivable

just such a
possible reoccurrence of depression
tendencies
in
the
United
In

imum"
in

of

time

to less demand than the

up

predicated

as

and 1955 years as presented in the

ferenee

Act of 1946

—_

1946

first

programs

leading to constantly higher
capita standards of living.

when the National Industrial Con-

during 1953.

The Employment

of

maintenance

Joint

ofarge.^

States corporations vigoi-

the

the

continued growth in our economy

Even

*±.,press!on

PX'fu'

f

particularl,'the/headi

Act

upon

for

ment, but rather the

.

th

important

an

o„on

as

darkened,

picture

economic

in
in
As

year

ment

ous weakness and that after a dec]jne ^ inventories will be
short Per.1fd °f,1time it w0"ld cOj> self-correcting, they, nevertheless,
iuC!
J5US
^ reasoned advjse that the economic situation
that pendmg the development ot h
refullv c+uriied
and if wpakfnrjj1pr weaknesses in the basic
careiuuy studied, ana if weaK
funnel weaKnesses in me udaic nesses
a
fundamental nature

and economists have

leaders

the

Economic Advisers feels that this

to conpart of

ticials, agricultural leaders,

tical

economy

Congress at this time, they feel,
or
invest on the
are unnecessary. In fact, they feel
receiving the annual income, that such steps might be detri-

(7)

jness

our

close

magnitude,

in¬

to

us

terpret the spirit of the Employ¬

"Economic Indicators," February,
1954.)

appeared
(3) Stimulation of investment strong and vigorous, the Council
in factories, machines, and public felt that the weakness in the in-services as population rises.
ventory segment was not a senin

mand

declining to

for

sound

in fiscal 1955.
If this es¬
timate of public and private pro¬
grams is in the correct order of

at about $363.5 billion. (Gross national product statistics are from

product de-

of

areas

then

Since all

inventories.

jn business

(2) Statistically high backlog of
housing demand.
;

Thursday, April 22, 1954

$360.4

$365.0

$373.5

224.9

231.8

233.0

53.9

48.0

47.0

Demand for Gross National Product:

1

—1.0

Consumer

Business

59.5

State and

2.1

52.1

85.7
0.9

50.0

Federal Government

8.8

1.2
1.1

26.3

24.2

'

26.2

28.4

57.5

57.0

51.4-

$360.4

$363.0

10.0

25.2

Local Governments

Demand—Present

Trends

$360.0

Number 5318

Volume 179

*,.

^ion and to State and local financ¬
ing of needed public works."
i-n

the

"Second,

reductions

tax

consider

could

Congress

beyond

contemplated in the Presi¬

those

The nature of this
of course, would de¬
pend upon the situation and out¬
look at the time. If the principal
dent's program.
•tax

action,

-deficiency in demand appeared in
le
consumer segment,
emphasis
could

be

iles, to
tions. in
".tax, and
ifrates. If

reducing ex¬
raising personal exemp¬
the individual income
to adjusting income tax
private investment needs
given

to

further stimulation the Congress
ccould weigh the possible effects of
^permitting the April 1 reductions
iin the corporate income tax rate
tto take place, and proceed with
■-other improvements in the busi¬
ness and personal tax structure."

the

for

lus

development of new

As

compare the thinking of
Congress and the Administration,
are justified in as¬
suming that if unemployment de¬
velops both would sponsor strong
compensatory measures.
We can

it appears we

further

that

assume

these

meas¬

will increase the money sup¬

ures

ply but we cannot be sure they
will stop the rise in unemploy¬
Whereas

ment.

we

can

be

sure

Federal budget deficits act to in¬

the money supply and that

crease

achieves
just that, we cannot be certain
that such acts will stop a rise in
unemployment.
an

easy

policy

money

Thus, it seems the United States
experience one of two types

of economic

development between

and 1956.

The first of these

*

On
$he other hand, it must be realized
iple if left to run its course.
ithat

decline in incomes result¬

a

companied with or without rising
unemployment and with or with¬
out rising living standards.
If

inflation

develops it is very
in view of recent and
planned further capital formation,

ing from a recession or depression
"would also result in budget defi¬

doubtful,

cits, by reducing receipts and inCreasing
certain
expenditures
^automatically."

that the inflation would be of the

Interestingly the report of the
Committee recognizes the

•«Joint

sustaining forces
-which the President's Council of
^Economic Advisers relies so
.rstrongly upon, but as will be
moted in the following quotations
iJrom the report, the Joint Com-

?

strength of the

of the

jmittee feels that the impact

^sustaining forces will be consid¬
erably delayed; hence, that their
.•strength will be felt later rather
"tthan now, and that in the transibetween

ttion

now

the time

and

disastrous

in

type

which

monetary

base is drastically

duced

long

the

ever,

duration

of

determine

the

its

inflation

the money. The borrowing alter¬
native is where the eternal dam¬

matter

nation

here, the United States appears to
face, for at least the next year or
two,
increasing
business
cycle
problems, rising unemployment,
and increased monetary and price
inflation, with continuing high
gross national product levels. The

question at issue is whether these
can be managed effectively

forces

with the tools available to achieve

nation

will

I

employment w h i 1 e maintaining
or
increasing living
standards.
The danger lies in the destructive

Co

position

a

which

Or

Keith Reed & Go.

-growth trend from which a sus¬

sweet

staff

Committee

~ihe

fully sympathize with all these
pressures for reduced taxes be¬
cause, in my view, our tax bur¬
I

has

den

large.

The major sustaining

-forces which are seen ahead may
be summarized

(1)

as:

1960;

the continued high

(2)

"levels of investment in plant and

make this produc¬
(3) the technolog¬
ical
advances,
such
as
atomic
energy,
bringing cost reduction
•-and new products; (4) the back"Jog of highways, schools, hospitals,
/and other public facilities Which
•

equipment to

possible;

tion

be constructed

.must

/maintain

even

services

of

if

we

are

to

the minimum level

the

average

citizen

^considers

acceptable; and (5) the
improved position of consumers
—who still have a significant por¬
tion

of their

^isave

above

income
what

to

spend or
be re-

"A

factor

-difficult

to

important,

which

self

a

ard

of

more

our

they

over-burdensome,

and

questions of
grave
concern.
One of these
questions is the moral corruption
many

evasion

spreading

Another

these

of

of

grave

questions is that they are un¬
dermining the economic founda-

the
of

citizen

to

set

the

investment

for

many years,

living and

and has reecntly
conducting his own firm in
Temple.

the

for

next

fiscal year by

over

$7 billion without the George and
other

willingness to
work for it. It provides the stimu¬




cheery

some

econ¬

publicly that if the private pres¬
sure groups and the pressures of
state and local governments for
Federal money would quit their
hand-outs, and would leave the
Federal
two

leagues

of

Organization and

such

cost

from $4% billion to over $30

bil¬

lion. Government revenues, which

mostly taxes, have increased
billion a year to over

from $3 Vz

The consequences of
living

Task Forces*

our

give

you

the

few months.

a

reductions

could

we

By

come

to

wiping out the deficit even
with the* already agreed tax re¬
near

ductions.

,

.

Relief In Military Expenditures
With

little patience,

a

.

there is-

another hope of reduction in gov-s

there be

$65 billion.

My
col¬
Commission
on

the

full details in

government of 23 years ago. Cur¬
rency in circulation has increased

whole

for
ex¬

functions.

necessary

ernment

are

could

we

penditures between $5 and $7 bil¬
lion, annually, without damaging

of

the

twice

alone

reduce

Government

years,

and I will be able to

ma j or
But, let
mistake, we must have
full defense.
However, some of
us during four years have urged
a
reappraisal of our methods of
■warfare and the weapons we make

burden

and

spending.

is

for

Our

defense.

no

We insisted that in view

use.

scientific

of

discovery and the
character of our enemy, some of
By
our methods of warfare and some
and
of our weapons are now obsolete.
rising prices through the back,
We also urged during these years
door, a family requires an income
that we were spending too much
of $3,700 a year to give the same
standard of living that an income trying to cure the age-old hates,
fears and
disunities of Western
of $1,500 a year would buy 23
We have contended that;
years ago.
And the purchasing Europe.
our
genius in producing the gi¬
power
of all pensions, savings
deterrents of aggression
bank deposits and income from gantic
would give a better assurance to
trustee securities, has been re¬
the free world and lessen our eco¬
duced
by
more
than one-half
nomic burdens and deficit.
amid millions of tragedies.
There is hope in these fields,
These
effects
have
been
re¬
is that the cost of

this

has increased by about 80%.
taxes through the front door

is

the

our

surest

road

disaster

to

de¬

our

Productivity

in

It is the

system of free men.

surest road to disaster in

Amendments.

I

give

can

for

you

reducing

still another hope
economic bur¬

our

dens and deficit

provided the peo¬
fense against the Co m m u n i s t
ecstasy from
ple will have a little patience.
horde.
this relief, do not forget we will
With maintained free minds and
Now I am not unaware of the
still be spending about $65 billion
free spirits, we daily open vast
effect on the deficit'of World War
a year—and do not forget the sin
new frontiers
of science and in¬
II, the Korean War, the Cold War. vention.
of the continued deficit.

in

However,

any

The theology of

this is that only

period of self-denial in expen¬
ditures and no further tax-cuts
a

can

wash this sin away.

question which
whether bear¬
ing the pains of holding up taxes
is worse than the greater pain of
tax

the

But

economic

the undermining of our

government borrow¬
;

'

^

;

there

have

been

Reduction

un¬

Now I come to the real remedy

deficit.

for this disease of Budget
The

immediate

medication is

reduction

further

of

taxes

the

Government borrows

deficit, it must do
things—print cur¬

make up

or

the banks turn their bonds into

a

They expand Our
ductivity and thus increase
government's revenues.
It

ity

no

than

proposals, and

steam

the

to

passed

pro¬

the

productiv¬

invention

of

the

engine that aided Britain
its economic burden after

to carry

the Napoleonic Wars.

try that helped
dens

after

us

It

tric

the

was

our coun¬

the bur¬

carry

Civil

our

the advances in air

War.

It

was

transport, elec¬

communications

power,

and

agriculture that helped carry our
burdens after World War I.
We

mnt

The Congress has not yet

the increased

was

from

railway development of

Expenditures

of

the Administration

medicine to cure

huge

expenditures and waste
alongside these events. Nor am I
dense to the political implications
of these problems, but I am also
alive to the political and living
consequence of failure.
necessary

stands out today is

the Federal Reserve for currency.
I

will

not

comment

Johnson & Johnson Formed
SPARTANBURG,
&

son

Johnson

is

S. C.—John¬
conducting a

securities business from offices in
the

Montgomery Building.

C. L. Keyes
Charles L.

for him¬

a

what

'

for the new looks by the Eisen¬
peated ever since government dis¬
hower
Administration
gaze
in
covered this barbiturate to put
these directions.
It has happened
By the valiant efforts of the deficits to sleep.
Congress and the Administration, repeatedly over the last 500 years.
Relief Through Increased
i
It
the tax burdens will be reduced It has happened in 40 nations.

business in Texas

been

average

constantly improving stand¬

sun

/?

.

,

mentioned elsewhere

have again

now

inventions
of older

and

new

many

new

applications
One of them

knowledge.

is the growing application
of
atomic energy and its by-products
to industry.
We are today in an¬

other
in

new

further

era
of great
expansion of

promise
our

pro¬
appropriations for next year.
one
oil three
ductivity and our government's
Th e
appropriation
committees
income.
rency, borrow from the banks, or
headed by such valiant soldiers of
borrow from investors. The lat¬
Conclusion
economy as Senator Styles Bridges
ter is the least evil, but there are
We could both cure the budget
and that old Trojan Congressman
never
enough investors
about: John Tabor are
earnestly search¬ deficit and many of the pains of
Printing currency and borrowing
ing for reductions in spending. toes without lessening our effec¬
J. E. W. Thomas
from the banks have only one end
They may, I believe, have some tiveness in defense or in the
—that is inflation. And let no one
needed functions of government if
success. But they cannot cure this
DALLAS, Tex. — J. E. W.
believe that Government borrow¬
we
could now have a period of
immediate huge deficit.
Thomas
has
become
associated
ing from the banks is in the long
self-denial and patience.
with Keith Reed & Company, In¬
Again this is where you come
run
any
less inflationary than
That is the end of this sermon.
corporated, Fidelity Union Life
printing currency. Its results are in, for theirs is a battle with pres¬
The text has been to balance the.
Building. Mr. Thomas has been in
sure groups and handouts.
the same—it either inflates credit

but equally
characteristic
the

as

\r.

ations of progress.

on

spen,d

your

time in

the illusion spread by

Keynes that
it does not matter how much the
Lord

John

Maynard

Federal Government may borrow,
because

we

"owe it to ourselves."

taxes

a

securities

Keyes is conducting
business from

at 151 West 44th

City.

debt.

Opens
offices

Street, New York

the

There

the

same,

you

have to

to meet the interest on

pay

And worse, you get

the

stabbed

in the back by the inflation it can

produce. You might try that phi¬
losophy

on your

food bills and see

how the groceryman

takes it.

are

theory

and

urge

upon

who
upon

want

those

meritorious
not

be

matters

some

who
but

oppose

projects

and

if

give* the

act and

its cur¬
may be

Nation

the

destroyed

chance to

of

practice you could
the pressure groups
more
spending
and

Their

tailment.

awhile
Just

measure,

is

-determination
..American

is much

not,

or

stupendous,

are

still

are

true

still

the

Whether this

to

would

squired to meet their basic living
■posts."

is

abstraction
taxes

than

more

bear.

can

the Federal

the addi¬

ing standards to about 15 million
additional people between now
-and

the deficit.

stopped

the

And

systematically reduce governexpenditures until the Budg¬
taxpayers to take. But it is the et deficit is met. Then, and then
deadliest of poisons that can be
alone, can inflation be stopped.
poured into the nation's system of You will be surprised how quickly
life. It is a far greater economic the
patient will respond to this
sin than higher taxes. For when treatment.

others

tional goods and services to pro-vide even present per capita liv¬

been

country

The borrowing

suggest that public as well as pri-vate economic expansion can be
very

not

deficit.

a

omists may say.

all

the defict is easiest of all for

studies by

and

putting
somebody else.

tax burden on

ing.

decade of

prosperous

a

the

for

nostrums

health from

■the 1960s."
"For the longer run,

on

Nor to tell you about the

moved.

Thus

tained economic growth can take

•place into

the excise taxes

of

Governmental Borrowing

J. E. W. Thomas Joins

the economy
the long-term

on

to

luxuries should not have been re¬

side of inflation.

;:ierm growth trend of

time

your

demonstrate the particular painf ul
element in every variety of taxes.

iand the Congress for the next two
/years is that of making the tran¬
sition from a position which may
-well have been above the long-

sure

almost

take

not

the

destructiveness.

have

we

As

It will continue as

have

we

We

treadmill.

deficit

taxes.

In view of the forces presented

as

might, in extension of these
elementary remarks, take a short
Cutting Taxes
look at what has happened from
I will deal with the tax side
our
national
experience of 23
first.
That indeed needs to be
years of deficit borrowing—with
spelled out so as to still the those two
exceptions/
Our Fed¬
clamor of the people and the
eral debt has increased to $275
pressure groups for excessive tax billion from
$19.1 billion.
The
reductions until we get.out of the
interest on this amount alone is

the aim of satisfactory high level

tsible steps must be taken.
"The problem facing the

in.

comes

from

would

Action

sets, their con¬
nerves; or it must be met by the tinuation will produce the dark¬
Federal Government's borrowing ness of rising prices and wages, no

re¬

destroyed. How¬
nature, intensity and

in

Is

been stopped..

the

even

or

Inflation

Do not believe that inflation has

ings of some pressure groups; or
by
levying
more
taxes
which
hurts
most
everybody's
pocket

raise

icant, compensatory support such
••has that embodied in the above rec■emmendations for additional pos-

Deficits!

on

expenditures which hurt the feel-,,

they

will be most signif¬

their strength

Ban

a

39P

potent in advo¬

are

you

cating patience.

Budget deficit. The deficit must
be met by decreased government

and

bring hardships to the peo-

because

;

we

assist is continued high level produc¬
-fjstate and local governments to tion with moderate unemployment
but not much inflation.
In fact
^improve their facilities, particu¬
deflation in terms of price level
larly in areas most seriously afmight be achieved.
This could
#ected by unemployment."
."The combined effects of such mean rising living standards. The
Actions, of course, would be to un¬ second possibility would be high
balance the Federal cash budget. and rising gross national product
"iShis is an important step and stimulated by monetary and price
This development the
•should be taken only after it is inflation.
-clear that the
adjustment will Council of Economic Advisers
■•either not be self-correcting or wishes to avoid. It could be ac¬
will

Let's Have

public services."

now

encourage

10

page

I recently

constantly improving private and

public works and at the

time

from

improved products, for better
ways
of making them, and for

may

-same

Continued

and

"Third, the Congress could in¬
crease Federal expenditures for
/needed

(1811)

The Commercial and Financial Chronicle

will

they wait
Congress a

the taxpayer a

Budget,
taxes
duce

as

and
fast

afterwards
as

we

can

expenditures.

of failure

are

cut
re¬

The penalties

more

than you may-

think.
But

to

further

-

this

being

an

educational

job directed to the public and the.
pressure groups, it is mostly up to
you.

You have thousands of pul¬

pits and millions of voices.

chance to breathe.
Some

There

are

Future

Hopes

hopes for the future

if the pressure
groups and
the
people will have patience.
And
again here is where you come in

With Benj. W. Currier
(Special

to

The

Financial

*

Chronicle)

BOSTON, Mass.—Paul F. Mina—
sian

has

become

associated

with.

Benj. W. Currier, 70 State Street..

40

(1812)

The Commercial and Financial Chronicle...

Continued

jrom

by

15

page

of stores,

a group

increases

nected

so a program

its

popularity by its
adjacency to another popular pro¬

Growth Prospects of Television
the

months

12

of

work averaged
most

the

1953

net¬

before

broadcast

5

v

CBS

demonstrated in
broadcasting

leadership than the re¬
that

announcement

tional

million

$9

business

time
CBS

be

of

day¬

placed

on

Procter

by
is

which

addi¬

an

worth

will

Television

Gamble

p.m.,

birth

sales

and
cent

&
the

not

only

country's

largest advertiser, but
reputation for making
precise judgments of relative ad¬
vertising values.
also

has

a

Expansion of Television
The

growth of the
television population furnishes a
sound basis for an expansion of
total advertising expenditures on
television

from

the

level

recent

estimated at close to $700
in

1953

projected

million
figure previously
about $lJ/4 billion

the

to

of

for 1957.
Where

tion

the

is

billion to

best

can

additional

from?

come

be

half
ques¬

answered

considering where the $700

not

of

growth
into

cut

of

enues

the

by

mil¬

television

has

aggregate

of

any

the

rev¬

competing
the list of

media.
Looking at
radio, newspapers, magazines and
all other media combined, we find
that advertisers' expenditures in
each type of medium in 1953 was

than in

greater

1948, in spite of

television.
Some part of the growth in the
older
media
was,
of
course,

merely
growth

keeping
of

the

and

level.

rise

with

up

overall

in

the

the

economy

general price

Further

TV

highly significant
reasons why CBS Television's net¬
work billings can be expected to
grow in the near future.
First, as
additional

stations

come

the

on

air converting single station mar¬
kets into multiple station markets,
clearance

have

problems

which

networking

plagued

during

the

period of the freeze should
substantially disappear.
During
the freeze and even now, individ¬
ual stations in important markets
have affiliation with
works and

for

so

than

more

reach

the

it
at

additional

in

single

net¬

impossible

network

one

market

As

time.

several

make

the

to

same

stations

ap¬

station

markets,
clearances will improve and each
network's programs will be car¬
pear

ried

011

more

stations.

This

ten¬

dency

is

work.

The average evening half-

already

hour program
in 1950

was

on

powerfully

CBS Television

carried

31

on

currently it is carried
with

tions

stations;
73

on

advertisers

some

at

sta¬

using

it still remains close to 150 outlets.
It may con¬
printed media as fidently be expected that adver¬
television grew at a faster tisers in the future will
want to

as

the

rate than the economy as a whole.

Accordingly, it is clear that tele¬
vision

financed out of the in¬

was

creased aggregate

advertising

ex¬

penditure rather than at the

ex¬

of the other media.

pense

Television

Thus, the

age gross time revenue for

hour

evening

program

aver¬

half-

a

CBS

on

about

ran

about

100 stations covering
ap¬
proximately 85% of the television

homes

Even

if

advertising expend¬
growing it is
probable that, given tele¬

quite

vision's share of the public atten¬
tion, and its sales effectiveness it
would
total

successfully
at

revenues

increase

the

its

of

expense

the other 90%.
I
me

am

length

the gen¬

on

eral values of television
hicle for the
I

as

a

ve¬

advertising message.
previously touched
on

have
of

some

for

the

characteristics

of

its

extraordinary impact such

as

its

dramatic vividness and its unusual

to

power

share

enable

the

course,

the

viewer

experience.

It

to

has, of

other unique values.

It is

the first medium that makes ac¬
tual demonstration of the
product

possible, thus enabling the

pros¬

pective customer to obtain all the
information he requires before en¬

tering

the store.

For

the

future,

television's impact holds out even
greater promise through the addi¬
tion of color which besides

en¬

hancing the presentation of those
products which

vertised, will
new

fields

are

open

as

presently ad¬
up such large

fashions

and

tex¬

tiles.
The specific value of television

advertising
when

it

is

becomes
compared

printed media

on

the

tionwide coverage.

clearly
which

emerges

has

a

T

manifest

with

basip of
e

as

lower




1
a

e v

i

s

the
na¬

io

n

medium

"cost-per-

1953

the

favorably

pare

with

period

any

in the past.

Both past and future

increases

gross

for

in

average

only
of

time

networks

revenues

reflect

not

the

larger station line-up
possible by the appearance

new

stations,

but

also

the

higher rates for the older stations
their

as

television

set

population

increases.

is in

close

a

I

have

adverted

earlier

evision

ming.
that

in

I

the

would

program

greatest
caster.

field

of

now

to

program¬

like

to

say

is

the

leadership

single asset of
While

the

and Tel¬

broad¬

a

leadership

in

any

In

programs.

the

to

carry

absence

these
of

an

black-and-white broadcast stand¬

particular,

ords has been

velopment
corded

high

sound.

microgroove

fidelity re¬
long-playing

The

which

record

play without
than

more

can

interruption

half-hour

a

Rec¬

leader in the de¬

a

of

Columbia

on

for
one

side, a product of CBS Labora¬
tories, was introduced in 1948. At
the

time

record

disks

the

conventional

album

sold

shellac.

single

of

for

12-inch

$13.85

The

or

six-

vinylite
$8.50 on

music

same

on

a

12-inch

vinylite "Lp" re¬
cording retailed at $4.85. This far
less expensive record produced a
fidelity of sound far superior to
any record on the market.
More
than 200 companies

try

in this

coun¬

today manufacturing long
playing records of the type intro¬
duced by Columbia Records.
are

In

1953, Columbia Records
adopted the technique of injection
molding to mass produce longplaying records at double and
even
triple the rate achieved by
previous methods. This technique
of

high precision injection mold¬
not only increases efficiency
production, it also turns out a

ing

The

ance.

long

playing

-

nique, the
the

microgroove

the

tech¬

of new plastics, and
of injection molding

product

a

better

of

use

process

creates

perform¬

combination

at

incomparably
price than

lower

before.

ever

Another

product

of

the

CBS

Laboratories, working with Co¬
lumbia Records, is the "360"
high
fidelity phonograph. Like the "Lp"
records before it, it was an exam¬
better product at

a

It

capable

was

a

lower

of repro¬

signal, it

was

necessary to fit and

additional

information

into

nooks

crannies

the

the

and

standard

signal

in

disturb

the

such

of

black-and-white
a

way

reception
was

not

as

to

accomplished at

a

costing

two

or

three

times

as

much. This innovation has started

powerful

new

trend in the phon¬

ograph industry toward
duction

of

fidelity

moderate

equipment

the

pro¬

cost

on

high

ready-

a

custom basis.

a

This

trend
can
be expected
to
give further support to the stead¬
ily increasing demand for high
quality recordings.

The fact that the upward move¬
of the record industry has

ment

been revived

solid

during the period of
rapid
growth

most

the

uptrend

conclusion

that

in records is based

foundation

and

the
on

have

now

capable of de¬

white

color

a

much

for

the

sets

in

and

black-and-

the
and

pensive.
For

works and

Expense
For the
of the

of

Color

of

the

Television

color television

the

sale

of

actually reduces the

overhead costs of the network
or
station.
In this respect I think

business is unique.
Another feature of network
broadcasting is important in this
connection.
This is the value of
our

adjacencies.
store

owner

ping

center

Just
to

in

as

it

locate in
order

to

pays
a

a

shop¬

benefit

from the flow of
traffic attracted

small

but

rapidly

growing

receiver

will

matter.

support

brisk

a

demand

ket,

but

market

for

will

dominated

gaining

black

a

is

white

future

become

mar¬

the

set

increasingly

by color. Our hope of
major place in the

manufacture
ceivers

the

and

of

television

therefore

closely

re¬

con¬

this year. As a result it offers the

hope

of

providing a color tele¬
sufficiently attractive
both in performance and price to
vision

set

create

demand that will get pro-

a

rolling. Once large-scale
commercial
production of tele¬

vision sets gets underway, we can!

rely

the

on

to the

which

processes

led

great improvements in per¬

world's

the

white.

most

modern

production

It

will

facility

of

picture

black-and-

double

picture

our

production capacity.

Throughout the CBS
tion

increase of picture size

well

as

nomical

from

the 99 square inches of the
15-inch planar mask picture tubes.

Today's high price of color
ceivers

is

made

of

up

two

that

in the

as

circuitry.

substantial

made

toward

Whether

re¬

ele¬

organiza¬

rest

of the

f

t

u

I

report
is being

can

progress

this

objective.
improvements

u re

from our own organization
The
first is the higher or from the
outside, it is our plan
always encountered with the to use the most advanced tech¬
development of a''new product. nology as soon as it is commer¬
New types of
components are re¬ cially feasible. The experience of
quired and these must be expen¬ our organization to
date, as ex¬
sive until they are
produced in emplified by the "205," gives us
come

ments.

cost

great

quantities.

factor is the inherent

The

second

ex¬

prove

minimum

a

of

35

tubes

set

also

hand

sets.

involves

work

in

components,

The

twice

much

as

of

some

cost

as much
as their
black
white counterparts.
However,

the

history

of

will

uses

which

times

highly
tele¬

certainly be very
large. The qualitative superiority
of color programming is such that
just about every television family

color

assembly, and

the

This field will

compared with about 20 tubes for

black-and-white

will im¬

we

position in

our

competitive field of color
vision set manufacture.

color television. Present color sets

require

confidence that

every

com¬

plexity of the circuits involved in

,

want

to

have

vision set. This

color

a

tele-

that in the

means

of the next seven or eight,
something like 30 to 40 mil¬

course

years

black-and-white

lion color sets may be sold at
encouraging prices considerably higher than
those that have ruled in blackpossibility
of
simplification of circuitry and the and-white.
Thereafter, replace¬

television

affords

example

of

reduction
of

Once

consumer

come,

the

^Initial

acceptance

shall

we

to

am

the

in the cost of the

ponents.

is

be.!; well

com¬

hurdle
over¬

a

This acceptance
on

price

and

the

on

reduction^ of the
of television
receivers. •
way

costs

ments

avail¬

be expected

can

vision

set

It

worth

transitional

its preference has
kept pace

buy
sets,
with

holding

technology

declining,

a

until

even

at

though

Until

a

share of the market.
color tube of size compa¬
17-and 21-inch tubes

appears

commercially

At

be

limited

a

least

.

there

can

demand

for

,-r.
one

approaching

such

tube

is

now

produc¬

tion: the CBS-Colortron
"205," sonamed because its picture area is
205

square

inches.

This

is

con¬

trasted

with the 99 square-inch
picture areia of the 15-inch planar
mask tube, and the 162
squareinch

area

of

the

participate
The

19rinch

planar

in

or

problems
in

two

this

order

great

of
to

market

'

widespread

acceptance

of

the

CBS name together with es¬
tablished CBS know-how in tele¬
vision techniques,

particularly in

color, should enable CBS-Colum¬
bia to gain a
leading position in
television
set

and

ness

is

on

dynamic
which

manufacture.

the threshold of
chances
for

Our

The

manufacturing busi¬

period

the

entrant.

set

tube

favorable

commercial

year

in

is

clearly
through
the

struggling

serious

of the future.

willing to
and" 12-inch

ac¬

tele¬

dollars.

of

next

is

color

measured

the

was

retail

a

on

a year.

market

the

10-

run

prospect

cordingly for

ability, but also on the size of the
color picture.
While^at one time
public
millions of

to

the order of six million sets
The
long-term

billions

hinges not only

program

i

duction

industry the best technical man¬
power
is being devoted to de¬
reduction of price from the
high velopment of a color set with a
initial level of over
$1,000 per set,
larger
picture
and
more
eco¬
and some

color sets.

the

importance of the
superior in performance)?
economy of construction to)
other tubes potentially available
j

tube

color

television

means

will;

output.
"205" is

and

for

sets at prices
substantially
higher than black-and-white, the
mass
market
will "require some

only

production. An ac¬
tive program is under way to in¬
crease our share.
Right now that

that
mass

tubes, both color and

While
the
superior appeal of color television

centage of the total United States
set

reduction

that it is

for

is

present the 21-inch .set dominates
the
field
with
thet 17-inch s£t

per¬

cost

thej

acceptance|

The

the

significant

Consequently,

initiate

consumer

excellent position to proceed on
large-scale manufacture of color
picture tubes. That plant will be

consumer, the expense

different

a

costs

rable to the

program time

of

process

and

for stations,

ample to repay the
required equipment.

CBS-Columbia, our set manu¬
facturing division, accounts for a

riod.

pending the de¬

With our new CBS-Hytron
pic¬
advantages of color television, ture tube plant at
Kalamazoo
when
it
is
in
full
swing, are nearing completion, we are in an

tions of CBS.

sustaining

downward

velopment

the

advertiser it is

necessary for the
station to provide a
program for that pe¬

Production plans for color tele¬
sets have had
to
be re¬

vised

television.

net

network

or

of the size
public has

become accustomed.

ordinary receivers; but formance and reduction in prices
equipment, both transmitting of black-and-white sets to accom¬
receiving, is complex and ex¬ plish the same miracle for color

developing

opera¬

picture

a

on

and

record

phonograph manufacturing

pic¬

be received in color

can

color

on

color

a

ex¬

be

can

pected to continue.
So

we

system

livering and excellent
ture that

and

a

of

expense

television

orate

installation

afford

rapidly lead toward

squeeze

10

built

will

to which the American

and

namely, the black-and-white
signal. In order to provide a color

ducing a quality of tone previous¬
ly attainable only through elab¬
custom

"205"

the

up

pense

far

a

believe

I

of larger tubes. I am
by the Federal Com¬ convinced
that
tlie
commercial
munications
Commission
were
availability of the CBS-Colortron
designed for the most efficient "205" in large numbers in the
possible use of the limited spec¬ second half of this
year will get
trum space required
by the type the production of color sets
offj
of information to be transmitted—
dead
center
ards set

result,

In

tube.

vision

The

adding consider¬
complexity to the circuitry.

supports

required

system.

able

television's

time

color

As

advantages, the advantages are
particularly great in broadcasting.

the

for

race

mask

re¬

ment.

field will usually have substantial

Advertisers pay for the
programs
that they sponsor as well as for

the

will

character¬

industry leadership both in sales
volume and in technical develop¬

made rather than

leadership of CBS Radio

of

promise

difficulties

technical

engineering

ple of

com¬

the

the

achievement

price.

that will

istics

The

easy.

in

that

market

But

dustry and

country at a costper-thousand to the advertiser for
program

one-

be

of

sets.

black-and-

time and

made

it is unnecessary

sure

to dwell at

in

not

side

tremendous

a

television

on

product of unsurpassed

of 100.

excess

absorbs less than 10% of the total

cease

The

color

white sets. This great

in

advertising expenditure.
the aggregate
iture should

re¬

of

fifth of the sales of the record in¬

of

Television which

presently

great

war.

between 100 and 225 stations,
with the average certainly well
use

$16,There appears sufficient room 000 in
October 1951, $22,000 in
for television advertising to grow October
1952, $26,000 in October
since only a small part of the ex¬
1953, can be expected to increase
pected growth of aggregate adver¬ to something over $60,000 in the
tising will be adequate to support not too distant future. This aver¬
the
projected total increase in age gross for time will deliver
television.

in¬

thing between one-fourth and

Expansion

two

are

However,
that

true

well

the

There

may

daily,
weekly,
seasonal basis.

or

for

Basis

advertisers

a

on

monthly

the

The

lion currently being spent on tele¬
vision has come from.
The spec¬
tacular

which

time

purchase

anticipated

the

after

record

of

color

realization

re¬

was

In addition to providing a lower
value
of
output,
estimated
at
"cost-per-thousand" than printed about $200 million retail, is over
media, television is broadening its five times that of 1939, the first
base to include advertisers with
full
year
of Columbia Records
relatively small budgets.
This is operation, The sales of Columbia
being done through a variety of Records
grew even more rapidly
special sponsorship plans.
Such from 1939 to the
present than did
plans include the opportunity for those of the
industry as a whole
alternate week sponsorship, mul¬
and are now running about nine
tiple sponsorship of the same pro¬ times the 1939 level.
Columbia
gram, and five-minute segments Records now accounts for some¬

of

Advertising

for

peated in the field of phonograph
recording which CBS entered in

fering the same circulation, and
Monday through Friday. There is only one-fourth as much as a
December 1938.
The
no
better illustration of the in¬ group
of newspapers offering
dustry experienced a
terdependence between program comparable circulation.
were

promise

which
radio and

television

future

will go a long way toward pro¬
Color has such dramatic
appeal viding the basis for a general
for the viewer as to
for color televison. It
carry the "go-ahead

The pattern of leadership

magazines or newspapers, half as
much as a group of magazines of¬

nine out of the 10

popular daytime shows that

the

television.

Columbia Records

either

than

families"

thousand

gram.

with

Thursday, April 22, 1.954

a

of

,

a

new

growth

in

are

especially

well

qualified

confidence

is

sup¬

ported
the

have
open

set

by the initial success of
CBS-Colortron which, as I

indicated, we believe will
the way to large-scale
color
production.
It
is
further

strengthened by our development
of
the
Chromacoder
(color)
camera system which
the General

I

Volume 179

Electric

study,

Number 5318. ..The Commercial and Financial Chronicle

Company, after intensive

has

selected

to

and

manufac¬

ture and sell

Television

as part of its line of
television station equipment.
On the
basis of these recent

achievements

well

as

its

as

has

acquired

art

second

to

the

manufacture

of

is

television

will

sure, -that

with

agree

the

future

I

me,

color.
sents

ex¬

ceptional opportunities in the col¬
lective

fields

CBS

of

Continued

the
I

every

healthy

a

assure you,

intention

have

meeting

of

this

challenge.

■■V.\

"Ward's"

,/• '

v

3,108,000 units.

Industry
history^ it de¬

j.;./

•/:,

or

rate

a

528,000

of

for

a

"Ward's"

April,

States producers paralleling the prior week's

was

a

parts shortage the week before last)

tory.

and

shutdown at

a

Studebaker's

&

declined

a

168

to

A

ago.

year

about

from

drop

The

offset

a

Bend

with

their
of

excess

$100,000,

15.7%

Tbeen below 70%, "Steel" points out.
Some people think

when

31

of

general

the

Dun

in

districts,

.

i

ordering
.

.

inventory

at

normal

tool

rates,

I

■

Price indexes remain
and

minor

downward

adverse
now

daily

American

steel producer

,

couldn't

we

'

fill

Institute

•

announced

that

-

.

now

The

duction
was

week

on

the

annual

1,624,000 tons.

a

month

A

year

placed at 2,276,000 tons

or

comparable because capacity
percentage figures for last

117,547,470 tons

as

ago

the rate
the

101.0%.

year

as

was

•

its

'

price

per

pound

actual

of Jan. 1, 1954.

weekly

are

production

The operating rate is not

based

on

annual

The

capacity of

clothing, most

volume

The
tail

ligntmerchants
of

Easter

1953

season.

total

dollar

in

trade

mated

the

during

shopping

the

volume

week

of

re¬

esti¬

was

by Dun & Bradstreet, Inc.,
below to 1% above

"

to be from 3%

sales

of

volume

a

aga

year

Regional estimates varied from
the comparable 1953 levels by the
following percentages: New Eng¬
land and Northwest —4 to

Midwest

and

Southwest
to

—3

to

Pacific

and

0; East

South,

-fl;

Coast

—2 :

-{-2.
In

keeping with
the

terns,
in

pat¬

seasonal

rises
report- ;

most pronounced
demand

consumer

ed by

were

retailers of apparel.

Household

neglected

goods
week

widelyshoppers

were

last

as

concentrated'

on replenishing their
Spring wardrobes.
Consumer in-

down

was

The

markedly

volume of wholesale

increased

from
trade

moderately

continuing

a

few

last week
of the past

but not

weeks

trend

regaining the
high dollar volume of 1953.
The
greatest increases appeared in ap¬

parel and food lines.

Shows Irregular

price

commodity

wholesale

the

substantially.

index

prices showing further mod¬

Department store sales on a
country-wide basis as taken from
the Federal Reserve Board's index

for the week ended April 10,

increased
the

1954
above the level of

16%

preceding week. In the previ¬
week, April 3, 1954, a decrease
was reported from that of

ous

of 13%

decline

rains

some

over

week last year, apparel sales were
up

in Latest Week

in

the

of

the

previous

Southwest

the

despite

the

similar

drought

week

with

the

four

in parts of Texas and
Liquidation for tax and other

reported

were

week-end.

in

1953.

ended

For

April

decline of 6%
For the period

10>
re¬

was

*Jan.

1

to

April 10, 1954, department store
sales registered a decrease of 4%
the

below
of

period,

corresponding

1953.

trade

Retail
York

Easter

by the CCC were to be offered for immediate sale. Rye
showed independent firmness.

week

weeks

1954, a
ported.

sales

in

volume

City last week
from

was

12%

New

lifted by

18%

to

above the like period in 1953. Last
year

of

grain

last

and

week

soybean

averaged

futures on the Chicago Board of
52,700,000 bushels per day, against

domestic

flour market

was

featured

by moderate book¬

Factors

of spot

in

the

decline

on

April 2.

were

the

slower demand

coffee increased following the

as

offerings

ending of the dock strike

and the absence of Brazil support demand.
was

by limited of¬

irregular but closed strong aided

in the London market. Warehouse stocks
of cocoa fell slightly to 106,923 bags, from 110,664 last week, and
compared with 65,919 bags a year ago. Lard continued to rise
reflecting strength in fats and oils.
With market receipts the
smallest for about six months, live hogr values rose to record

ferings and

tember

Electric Output Decline's Further the Past Week
distributed by the electric light

17, 1954,

1948.

period

after

th*

was

Easter.

According to the Federal Re¬
Board's index department

serve

store

sales

in

New

York

City for
April 10,
1954, registered an
increase of.
24% above the like period of last
year.
In the preceding week,
April 9, 1954, a decline of 9% (re¬
vised) was reported from that of
the similar week of 1953, while
the weekly period ended

for

the

10,

1954,

four

ended

weeks

to April
was

1953

in

was

*

cotton prices were

slightly

downward

April

1%

was

10, 1954, a decline of 1%

under that of the

period.

Comparison

5-10

of

For the period :!Jan. I

registered

Jan. 4-9

week

week

in

period

in

1954

begins
and

tb«

with

with the Jam.

1953.

Joins A. E. Weltner

parts of the belt.
Domestic mill

decrease

a

reported.

i

mixed the past week. The
as the market eased
on
continued slow demand for spot cotton, lagging sales in cotton
textiles and reports of the receipt of much needed moisture in
trend

demand

was

rather slow with

buying confined

Some selling was attributed to the lessened possibility of a
tight supply position due to recent heavy withdrawals from the
loan. Sales of the staple reported in the ten spot markets showed
a further drop last week and totaled 69,500 bales, compared with

i

above

week

strength

Movements

general

the

second

(Special

mostly to small lots to cover nearby requirements.

and power industry for the week ended Saturday, April

Easter

later

buying

As compared with both the pre¬

;

■

reaching all-time high levels
■

the

of Jan. 1, 1953.




of the

ings of Spring wheqt bakery flours and scattered replacement
buying in hard Winter wheat flours among bakers whose balances
were nearing exhaustion.
Coffee prices have fallen steadily since

68.1% and pro-'1

lower than capacity in 1954.

The amount of electric energy

was

high levels for April, and the highest for the market since Sep¬

ago

was

It

index of $6.35.

total

year

the high level of a year ago.

the poorer prospect for commercial export business,
and the large stocks available for delivery contributed
to the
weakness in the bread cereal.
There was a sharp drop in corn

The

ago.

capacity of 124,330,410 tons

like week

sum

sur¬

a

of

did not expect to surpass the sales

/terest

48,700,000 the previous week, and 34,600,000 last year.

industry's ingot production rate for the weeks in 1954 is

based
For

a

against 15 in the previous week.

purposes,

Trade

capacity for the week beginning April 19, 1954, equivalent to
1,634,000 tons of ingots and steel for castings, as against 1,622,000

68.0% (actual)

weight

the

the

1953>

to

Sales
re¬

operating rate of steel companies having 96.1% of the steelmaking
capacity for the entire industry Will be at an average of 68.5% of

tons and

had

going into its seventeenth week.

Cocoa

Steel

failures

figures

Althqugh

in

able

were

sales

encouraged

Since Easter

earlier

declined with other grains but oats

those

•

the

owned

unchanged, although there are scattered
in response to competition, this

and

the

of

weeks

retailers

prices at mid-week following announcement by the United States
Department of Agriculture that the 1948 and 1949 corn corps

revisions

Iron

Fourteen

unsettled with

conditions

weather

Oklahoma

trade weekly reports.
The

extended

Wheat

■orders."
•

among

slightly

Grains continued

company's customers, had enough tool steel to last them
through May of this year at present rates of consumption. Now
that the inventory reduction should be about completed, the pro¬
ducer says, "We are somewhat concerned. If all of our customers
start

the 136
-small

but exceeded

lower than in the prior week. The index for
April 13 registered 276.53, against 276.97 on April 6, and 279.37 on
the corresponding date last year.

the

to

week

leading commodities were irregular last wek and

Bradstreet

&

finished

veals that it is receiving a substantial volume of'orders, although
-each order is small. In the fourth quarter of last year, many of

were

the

and its chief function is to show the

use

Movements

However,

a

in

198

appeared

Wholesale Commodity Price Index

.

According to this trade magazine,

to

$7.42 two weeks previous.

the

represents

in

foods

parts of the na¬

many

ceding week and the corresponding

that steel production will rise during the

completion

most

general trend of food prices at the wholesale level.

reductions sends buyers
-back into the market for steel: Heralding such a trend may be the
buying plans reported in a "Steel" survey. Those reporting in the
survey say they expect to buy 3.7% more steel tonnage in May
than they bought in March. Of those reporting on May plans com¬
pared with March performance, 46% expect to make no change,
20% expect to buy less, and 34% expect to buy more steel.
.summer

38

above the comparable 1953

index

The

All of April's production has

strong 70%.

as

with the all-time high of

of

set for Monday.

was

two

was

$5,000; however, they continued

level.

still

April thus far is the weakest steel production month this year.
All of the weeks of the first two months of the year were charac¬
terized by steel ingot production rates in the 70s, and the first
a

from

under

1953

erate loses for the week.

was

last week,

30

and

dip at Ford
(Ind.) fac¬

in the national rate stemmed from drops in seven of 13

March

fell

This Year

The wholesale food price index, compiled by Dun & Bradstreet, Inc., declined for the second straight week, bringing the
April 13 figures to $7.35. This compared with $7.40 a week earlier,

it notes.

of

same

Food Price Index Trends Lower for Second

magazine of metalworking. This marked the second consecutive
week of a decline of a point from the preceding week. The decline

week

failures

208

to

liabilities

with

even

liabilities in

low for the year was set by steel ingot production last
rate was 67% of capacity, says "Steel," the weekly

new

but

15, from 246 in the preceding week, according
Bradstreet, Inc. Although down for the third week

Trends
A

losses,

April

Higher Level This Week
week.

that

the

industrial

approach of

tion in the period ended on Wed¬

week.

casualties

Steel Operations Scheduled at Fractionally

\

ceptibly in

year,

and

Shopping

by the

and
mild weather, shop¬
increased their spending per¬

pers

Successive Week

South

Resumption of Studebaker assembly

paralleled

week

>
>

Easter

ago.

of

1953 week.

Stimulated

"Ward's Automotive Reports," states.
industry, "Ward's" reports, assembled an estimated 119,997 cars last week, compared with 119,542 (revised) in the pre¬
vious week. A year ago the weekly production was 123,889.
Last week, the agency reported there were 21,118 trucks made
in this country, as gainst 22,004 (revised) in the previous week
and 26,753 in the like 1953 week.
"Ward's" estimated Canadian plants turned out 7,214 cars and
1,873 trucks last week, against 8,516 cars and 2,012 trucks in the
preceding week and 8,436 cars and 3,093 trucks in the comparable

last

more

Continuance of five-day operations at all Chrysler Corp. car
divisions for the second week, return to output by Hudson after
•a week's
shutdown plus gains at Chevrolet and Packard (there

'division

of

the prewar level, failures were off 37% from the 1939 toll of 313.
The number of concerns failing with liabilities of $5,000 or

industry, "Ward's" said, scheduled 141,115 cars and trucks
141,546 in the preceding week and 150,642

same

Week of Easter

or

to
to
the lowest level this year, casualties remained above the 165 and
188 in the comparable weeks of 1953 and 1952.
Continuing below

for completion against

in the

latest

the

Improves

Substantially in Closing

pass

Dun

24,000-unit
said, with
119,542-unit

,

Volume

10,

week

•total despite Good Friday absenteeism losses.
The

for

prior week despite Good Friday absenteeism
held under the level of 164,932 units produced in the

Commercial

Passenger car production last week continued at
pace,

production

the

ended

Chevrolet is carrying

crop

nesday of last week.

Business Failures Dip to Lowest Point

Reflecting the General Motors Corp. lift, the industry's secondquarter car output projection stands at 1,541,000 units.
The goal,
of which 527,000 is being marked down for April, is 8%
over
"the January-March yield of 1,425,964, the statistical agency added.

United

ended April

week

Output Last Week Held Close to the

Automotive

/

J:

the

freight for

Level of Week Ago

1953

the brunt of the General
^Motors Corp. increase, indicating its adjustment to a four-day
"Week in early February was a miscalculation.
Buick, Oldsmobile
•and Cadillac programs are already virtually geared to plant output
capacity.

idaily

revenue

S. Auto

U.

higher first halves were 1953
and 1951, both virtually tied at

1950

'

;

Outwardly,

.

and

cars,

of

Loadings totaled 606,790 cars, a decrease of 114,349 cars
15.9% below the corresponding 1953 week, and a decrease
83,962 cars or 12.2% below the corresponding week in 1952.

the only other

noted

3,255,772

Loadings

xrf

net stock
under loan of 6,164,a

1

The

completions, third highest for the period in

"with

we

Preceding Week

were

entries

657 bales.

1954, increased 7,488 cars, or 1.2% above the preceding week, ac¬
cording to the Association of American Railroads.

of
can

Gain of 1.2%

a

.

loan,

April 2

against

bales, leaving

Trade

leading set manufac¬

^he State of Trade and
car

pre¬

from page15

clared.

Loadings Register
Above

unusually compelling op¬

turers.

summary:

Radio continues to be

transformation

This
an

Car

annual

ended

bales,

With-

the

from

cotton

week

20,243

impact of color.

industry

steady

among

tiave presented. They are worth a

quick

record

a

the

week last year.

of

of 1953

portunity for us to convert our
experience and skills into a place

activity.
I believe,
which I

This conclusion emerges,
from the specific facts

increased

drastic trans¬
formation through the advent of

am

offers

the

over

week earlier, and 74,500

drawals
in

about to undergo a

sets and tubes.
You

figure represents a decrease of 51,000,000 kwh.
week, but an increase of 232,000,000 kwh., or
the comparable 1953 week and 1,241,000,000 kwh., over

same

61,938

demon¬
sales in¬
crease
strengthened by improve¬
ments in the quality of the prod¬
ucts and the lowering of prices.
Set and tube manufacturing is

upon

in

current

a

in the

the like week in 1952.

The

hope and intention to build
this basis a strong position

<our

The

tremendous

71,500

2.9%

strates

of

It

none.

kwh., according to the Edison Elec¬

tric Institute.

below the preceding

on

knowledge and experience in the
color

has

estimated at 8,345,000,000

was

service to the national market and

ac¬

reservoir

a

a

growth ahead of it based on the
increasing extension of television

tivities throughout the last decade
and a half, I think it is clear that

CBS

vigorous industry which has

fundamental, long-term vitality.

41

(1813)

to The Financial

KANSAS

Dengel is
E.

now

Weltner

Street.

Chhonicle)

CITY, Mo.—Walter C.
&

affiliated with A,
Co.,

21

West

10th

fjr

42

(1814)

The Commercial and Financial Chronicle...
Thursday,

distribution

CLOSED-END NEWS

ments in

TRI-CONTINENTAL

time

of $190,780,000, according to
Randolph,
Chairman of the
and
President of
the investment

Board

company.
In

.

report to stockholders issued today,

a

of

the

31,

months.

meant

This

that

of

110

each

share

during

10%

than

shares

new

three

1953, to $27.85 on March

more

of

rise

a

OF

in

common

$25.21 on Dec. 31.

SALES

for

the

last

quarter

of

1953

Eberstadt

noted

that

al¬

though the (Federal Reserve Board
index of industrial production had

declined
its

1953

8%

by

December

from

high in 1953, the FRB chemi¬
cal production index had declined
4.6% during the same period.

shareholders
had $27.85 in net
assets, above and beyond its oo.igavions to
its debenture holders and preferred stock¬

$199,926,000 during the March
quarter a year ago, tne National

The company at the end of the
quarter had assets of $9,682 for each $1,000
debentures outstanding and
$386 for
each share of preferred stock.

panies announced Tuesday.
Mr. .L'oerstadt stated, "the demand
Net
sales,
after
redemptions, for chemicals has continued at a
were
$103,930,000 during the
fairly satisfactory level and the
March, 1954, quarter, compared outlook on the whole
appears en¬
With $103,533,000 for the previous

of common stock owned by its

the investment company

holders.

of

Tri-Continental,

which

largest

the

is

in
the
quarter divi¬
of 22 cents per share on April
1.
compared with a first quarter divi¬
of 20 cents in 1953.
Mr. Randolph

closed-end

country,
dend

This
dend

investment

paid

company

record first

a

pointed out that the dividend payment was

approximately

the

same
as the corpora¬
tion's net investment income for the period.
added

that

it

will

compare

He

is

impossible

to say at
the present time how the dividend for the
full

year

dividend

of

in

$1.11

Tri-Continental

with

the

Union

its

Railroad

Co.

by

System, Inc. "A" by 2,100
1,300 during the quarter.
The

,

corporation

Kansas

Power

and

eliminated

&

Light

"B"

by

holdings

Co.,

of

road Co. and reduced

Tobacco

Co.

Tobacco

,

Gas

by

Co.

Corp.

"B"

by

holdings of American
shares,

2,600

by

6,500

5,800

Gas & Electric Co.

Reynolds

shares,

shares

United

American

and

end

Shares

&

today.

This
$34.73

made

for

realized

with

net

on

The

tax

securities

to

31,

of

for

exceeded sales for the first quar¬
ter of 1954. Securities

bought (ex¬
cluding U. S. Government securi¬
ties) totaled $314,739,000 whereas
total

sales were $226,370,000.
Holdings of cash, U. S. Govern¬
and

short-term

1954
with

compared
Dec.

$263,647,000

31, 1953.

net

and

tions

15.9%.

net,

stocks

4.2%;
and

U.

S.

on

bonds,

U.

S.

13.8%.-

un¬

$12.88

share

a

at

2.3%;

year

on

category

10.9%

a

year

compared

accounted

preferred

ago

cash,
obliga¬

common

products, 7.3%

accounted, for
against 24.9% in

ago;

public

utilities,

to

as

1953.

in

net

earnings and dividends.

industry

in

record $1.6

indicate
for

of

11.1%; and electrical
against 8.1% March 31,

* MUTUAL INVESTMENT FUND

to

a

billion. "Present plans
expenditures

substantial

level than in

and

9,400 shares of

in

Common

stocks

accounted

for 83.3%

of assets, U. S. Govern¬
15%, and net cash 1.7%.

During the quarter the
the following stocks to its
Radiator

can

10.800

company

added

holdings: Ameri¬

shares,

Armstrong

Cork 300, Babcock & Wilcox 1,300, Hercules
Powder 1,000, Safeway Stores 1,500,

Socony-

5,000,

Southern

California

Edison

5,000, U. S. Gypsum 2,800.
It
increased
its holdings

Oil, West Penn Electric.
The

company

eliminated

its entire

assets

of

122,198, higher than at the end of
any previous quarter in the fund's
16-year history, and equivalent to

2,702,594 shares outstanding on
March 31, 19531
NET

ASSETS

Studebaker.

Holdings were reduced
Minerals, Lorillard, Sears,
United

in

International

United Air Lines

Fruit,

to

of

stock

provide

that

Reporting

Elec¬

redemp¬

on

the company's first

Merck

and

Middle

South

v

Company, in

Investment

announcement by

an

Waldo Coleman, President, to¬

day reported total net assets
March

31

reached

the

high of $72,766,000.
of nearly six and
since

the

During the quarter Broad

Street Invest¬
maintained common stock holdings at
approximately 85% of assets.
On March
31
its largest
common stock investments
by industries were public utilities, which
represented 17% of assets, oil, which rep¬
ing

14%

of

equipment

and

sented

of

6%

New

assets,

electrical

and

electronics,

which

Dec.

added

holdings

portfolio

the

to

31

half

a

when

a gain
million

net

assets

$66,290,000.

the

during

quarter

were

(15,000 shares),
(10,000 shares)

and

Pacific

United

Coal and Oil

Fruit

shares).

(15,000

The

increased its holdings of Allied
Brooklyn Union Gas, Cluett Peabody and Continental Can by 2,000 shares
each,
Florida
Power
&
Light by
8,000
company

Stores,

shares, National Fuel Gas by 15,000 shares,
Newport
News
Shipbuilding
by
4,000
shares, Penn-Dixie Cement by 2,400 shares,
Shamrock
Union

Oil

and

Pacific

Southern

Gas

by

by

'

Consistent with this policy, the
investment portfolio con¬
individual

follows:

as

preferred

common

and

350

over

18.0%

and

Van

section

stock

common

Bullock Bullish
On

Utility Outlook

Even

though

further decline

a

secu¬

14.7%

stocks,,
and 5.0%

stocks,

bonds,
62.3%
cash

receivables.

trie

utilities

cellent.

continues

be

to

AN

10%
1952

the April "Perspective," issued bythe investment
management de-;

partment of Calvin Bullock.

"Projecting

industry's

the

6.78% rate of annual growth since

1920," the study states, "an out¬
put to 1,137 billions of kilowatt
hour

PERSONAL
JAMES

F.

"A number of

PROGRESS

continue

FOGARTY, prominent

public utilities executive, has been
director

a

General

of

Carriers

Corporation,

investment

under

company

Cal¬

vin" Bullock
shares
Stock
1

management whose
listed on the New York

are

Mr.

Fog arty

.

Company and is
Cleveland

formerly

was
North

American

Director of

now a

Electric

Illuminat¬

ing Co., Detroit Edison Company
of

number

a

of

other

granted last year and of the
$62 million in applications pend¬
ing at the year end, $21 million
were

"The

livered

hall

has

been

Fund,

Inc.,

Francis F.

according
issued

to

A

an

today

by

Randolph, Chairman of

Board

President

and

mutual

of

fund.

Vice-President

of

the

The

has

the

stock

common

Electric

dle

eliminated

and

South

of

reduced

Utilities

Company

investment

American

its

by

its

holdings
3,500

Gas

of

&

Mid¬

shares

and

by 12,000 shares.

greatly

units

newest

this year

to

ASSET

VALUE

of

National

INCREASE of approximately
in sales and net earnings of

companies in 1953 over
reported Monday by F.
of

Fund, Inc. in the fund's

Chemical
63rd quar¬

terly report to stockholders.

ter
F.

produce

a

President.

and

Mr.

a heat rate of 8,-?
30% improvement
1953's average.
They will
over a large share of the 25

a

"These

economies

multi¬

are

plied by modern transmission
and

tems

the

asset

earlier

value

of

amounted

far

as

as

"An

excellent

load

attained

factor

»

The

Bank and Financial Consultant for

Atlantic

and

City Electric Company.

mouth

College

ceived

an

in

1930

and

that

tinue for

Mr. Page graduated from Dart¬
M.B.A.

University
Business

He "is
J.

this

benefit

some

time to

should

Town

where

OPEN-END

adding back the 33 cent

STATISTICS,

MARCH

31,

1954—110

March 31, 1954
net

Glen

serves

est

1932.

for

the

balance

the

self

in

1955.

'•

f.

assets

OPEN-END

per

$■
f -:

share

.

.j

bi if

Diversified Investment

Fund, Inc.

March 31, 1953

$4,146,061,000

■■

hi

FUNDS

Dec. 31, 1953

$4,582,433,000

Fundamental Investors, Inc.

year

after

$3,968,343,000
k' y'
i.X

1st Quarter

Full Year

1953

1953

1953

$190,623,000

$160,368,000

$199,926,000

$672,005,000

86,693,000

a.

1st Quarter

1954

Sales

4th Quarter

56,835,000

67,461,000

238,778,000

$132,465,000

$433,227,000

Repurchases
Net

sales

$103,930,000

$103,533,000

Purchases and

Sales

of

Portfolio

Manhattan Bond Fund, Inc.

PROSPECTUSES

Securities

AVAILABLE
FROM

YOUR

ON

or

1954 to

March 31,

1954

3, PA.




Holdings

of

Cash,

U.

S.

Sales, $226,370,000

Governments

March 31, 1954, $295,975,000

and

Short-Term

FUNDS

DEALER,

OR

Chicago
Bonds

Angeles

HUGH W. LONG AND COMPANY

San Francisco

Incorporated

Dec. 31, 1S53, $263,647,000

Westminster
Source: National Association of Investment
Companies.

MUTUAL

INVESTMENT

Clmlan.i

Los

investment dealer

PHILADELPHIA

1,

Purchases, $314,739,000

Prospectus from
your

Jan.

THESE

LOCAL

(Excluding U. S. Government Securities)

FOUNDED

of

the study states that the
long-term rate of growth of about
7% per year should reassert it¬
1954,

Ridge,
on

income

net

of

Council.

■(■■■■■•■■■a

Total

of

he

in

con--

come.

Foreseeing no more than a mod¬
gain in output, revenues and

re¬

Harvard

School

Administration
resident

a

from

Graduate

w-

a

of

for

1953/
largely due to the great increase
was

study finds that the cost
of senior capital for utilities has
been declining for nearly a year

over

13.5%

de¬

possible

for the low-cost unit.

62.1%

Tri-Conti¬

Brooklyn Union Gas Com¬
pany, a Trustee of Irving Savings

>.

$11.74
to

sys¬

inter-connections

signed to reach

'

The

Ran¬

dolph noted that the increase

de¬

kilo--

with

Btu,

per

of 1954, according to Francis
Randolph, Chairman of the

Board

im¬

be

nental Corporation, Broad Street
in air conditioning, which changed
Investing Corporation
and
Na¬
tional Investors Corporation, Mr. the summer slump to a period of
/ /;•"
Page also serves as a Director of peak demand."

N.
THE

two

atmosphere

hour output.

Vice-President of White¬

announcement

the

PAGE

•

first

the

in

1954.

hour

watt

900

over

FREDERICK W.

of

proved.

take

a

granted

regulation

com-

pames.

named

increases of $21 5 million*

"Rate
were

of

President of the

favo.able im¬

ities.

months

Exchange.

a

pact on earnings of electric util¬

&

closed-end

a

important factors

exert

lo

Corp. shares increased
10.5% to $13 during the first quar¬

Stathas.

was

in

1,000

company

ex^.

This view is expressed in

Investors

by

The

on

production is foreseen for
1967, compared with 400 in 1953.

shares,

5,000

shares

2,400
shares.

same quarter a
.yeay
Largest industry holdings in

ago.
the

million

ment has always advocated broad
investment diversification.

mutual

Texas

stocks in the

in the economy may temporarily
outstanding shares.
' :
halt the annual gain in the output
Since
1932,
when
Common¬
of electricity, the outlook for elec->
wealth was founded, its
manage¬
10

balanced

Southern California Edison

assets,
with
42.13%- in
preferred stocks, com¬
with 56.23%
in common

all-time

This is

repre¬

assets.

31, 1954, common
represented 57.87% of the

of

as

35%.

or

March

stocks

The company now has over
40,000 shareholders and more than

and

that

$17,421,-

ago.

On

pared

COMMONWEALTH

Mr. Randolph announced
gain in net assets over
March 31,
1953, was $11,000,000
tions,

were

bonds and

the

Raalte

Eberstadt, President
5!!!! 5!E" ■■■■■■■■■■

Instru¬

and

fund's

quarter of its 25th year of opera¬

in

portfolio

Broadway, New York 5, New York

Street

Randolph, Chairman of the Board

P. P.

Established 1930

Broad

and President of the mutual fund.

Robert S. Adler, David
Copland, J. K. Langum, Anan
Raymond, Edward P. Rubin, and

NATIONAL SECURITIES &
RESEARCH CORPORATION

OF

Investing Corp.increased 19% dur¬

reelected:

FOLDER AND

Gas

March 31, 1954.

assets

230, equal to $30.11 per share on
578,636 shares outstanding, com¬
pared with $15,848,760, equal to
$28.76 per share on 551,115 shares
outstanding at the same time a

Laboratories,

elected

may
be suspended
accordance with the In¬
vestment Company Act of 1940.
The
following directors were

PROSPECTUS

quarter

Chemical

increased its holdings
by
1,000
shares
and

Prbducts

Utilities.

tains

fund's

hold¬

ings
of
American
Tobacco,
Caterpillar,
Colgate-Palmolive, Dow, DuMont, Liggett &
Myers, Merck, National City Bank (N. Y.),

tion

FREE INFORMATION

Pacific

Investors

Avon

rities

resented

of Aluminum
Co., CIT, General American Transportation,
Ohio Oil, Republic Natural Gas, Shamrock

only
WRITE FOR

the

Beckman

Blockson

net

Texas Pacific Coal and Oil by
2,000 shares,
and eliminated its investments in
Abbott

1953," Mr. Eberstadt

net

the quarter ending

year

National

Chemical

Total

television

charter

SERIES

during

of

of

fund's

assets, oil 10%, electric equip¬

Meeting on April
5 stockholders voted to amend
the

SECURITIES

shares

tric.

added.

highs at the latest

At the Annual

I 120

amounted

plant and equipment during
although at a somewhat lower

1954

electric utility 12.1%

were

ments

and

NATIONAL

new

7.6%, build¬
ing 7.2%, and chemical and drug

and

,

1953

pur¬

stocks

quarter.

added

6,100

totalled

The report points out that capi¬
tal expenditures of the chemical

Five largest investments by in¬

dustry

Vacuum

as

it

adjusted for reinvestment of capi¬ ing the first quarter of 1954, rising
tal gains distributions was also at to a peak $43,054,000 from $36,a new high.
182,000, according to Francis F.

and

for

assets

stood at

6.6%.

that

79.4%;
preferred,
2.6%; and cash, receivables
Government obligations net,

net

1953,

on

Dec. 31, 1953.

on

net assets, number of out¬
standing shares and of sharehold¬

ment

'

of

31,

practical
common

March

Total

security profits
profits are dis¬

Of the common stocks held
on March 31,
1954,
oil and
gas
stocks

26.7%

on

'

assets

corporation

Government

A

accounted

excess

the

shares

ments,
and

of

holdings
20,000

Fund at March 31, 1954 were $60,-

quarter-end. Per share asset value

assets;

bonds,

the

noted, should benefit many of
the portfolio companies and per¬
mit their growth to be reflected

on

of

stocks

common

of

Dec.

on

end

fund, today reports record highs
in net,assets, shares outstanding
and net asset value per share for
Total

all

AMERICAN

reports

shows

such

total

receivables

bonds

$295,975,000

were

ers

tax

the

as

report

0.5%;

in¬

of

stockholders.'

1954

81.3%

stocks

for

substantially

number

income

future

on

that

quarterly

March

*2

of

value

asset

like

a

Federal

extent

tributed

this

of

tax

was

31,
$436,372,000

the
New

for

fuliy invested in

was

were

S.

expiration

or

has elected to be taxed under the Internal
Revenue Code as a "regulated investment
company." As such, it is relieved of Fed¬
income

mu¬

figure

a

March

on

The

profits

per

31, 1954 of $37.54

appreciation

the

the 110

portfolios

31,

year"

by

March
31
a
year
ago,
and with
$33.65 at year-end 1953.
In computing net
asset value in each instance no allowance

for

Purchases

ments

the

net

closed-

a

*,

share

per

the

Dec. 31, 1953 and $614,090,000
March 31, 1953.

March

of

reported

shares

to

$4,582,433,000
1954, an increase

vestment

first

at

Shares, $21.05 per share based on 2,855,570
31, shares of capital stock outstand¬
1954 of $29,655,249, equal to $14.06 ing. This compares with net assets
of $52,989,406 or $19.60
a share, compared with $27,031,462
per share

today

/

compares

for

reached

on

payable

eral

had

SELECTED

360,000 shares outstanding, after
deducting dividend of 15 cents per share,

is

$132,465,000

of

over

the

"Since

managed

company

Dominick,

asset value at March

share

and

funds

Com¬

couraging."

Inc.

Corporation,

investment

Dominick

Investment

by 6,000 shares.

NATIONAL SHARES CORP.
National

tual

Washington

$ TWater Power Co. and Western Pacific Rail¬

of

first quarter of 1953.
Total net assets of

holdings of

3,800 shares, Pacific Gas & Electric Co. by
6,000 shares
and
Columbia
Broadcasting

/

quarter

since

increased

Pacific

Association

record

1953.

Florida Power & Light Co. by 12,300 shares,
Wisconsin
Electric
Power
Co.
by
15,000

shares,

and

poses

Investors

investment

mutual

balanced

Fund,

LIFE

MASSACHUSETTS
a

$30;332,000.

were

National

Mr.

mutual
funds
during the first
quarter of 1954 amounted to $190,623,000 compared with $160,368,000

announced that the net asset
stock increased from

Mr. Randolph
value

By ROBERT R. RICH

F.

invest¬

on

11.6% from $31,789,000 on Dec.
31, 1953. Net assets on March 31,

high

Francis

gain

The net assets of the fund to¬
taled $35,467,000 on March
31, up

Mutual Funds

completed

Corporation

Tri-Continental

the first quarter of its 25th year of opera¬
tions with net investment assets at an all-

from

December, 1953.

April 22, 1954

at

Parser, Elizabeth 3, fyw Jersey

Volume 179

March 31

oils,

Number 5318... The Commercial and Financial Chronicle

in public utilities,
equipment, chem¬

were

electrical

jvt a rrrr»AT a t

cPOTTnTniTr.fi

NATIONAL

o

Re-

attempted

«a" common
the company.

longsearch
Corporation, as sponsor term future, his
forecast
has
and manager, announces that ef-r
turned out to be hopelessly shortfective immediately no minimum
sighted and pessimistic. Benjamin
number of shares is required to
Franklin, for example, thought at
establish

Distribution Reinvest-

a

ment Order

for the National SeSeries of Mutual Invpst-

curities

Funds

ment

"This

i

share-

anv

holder—regardless of the
build

held

compound

who

—

the

for

his

may

to

now

the

and

income

FIDELITY FUND

Wednesday
reported
the
largest
quarterly
sales in its 24-year
history. Gross
on

sales for the three months ended
March 31, 1954, amounted to $7,-

for

increase

an

of

the

$5,087,885 in the
sponding period of 1953.

over

March
.-iviarcn

the end of his life that

perhaps

take

to

amendment

saies
sales

established

of-the
oi tne

42%

corre-

Fund
tuna

record.

a

also

They

of

the

incorporation.
will

Bank and Insurance Stocks

be

certificate

New

available

By H. E.

of

This Week

certificates

in

few days,

a

Geyer

c;tafp

and shares will bp madp avniiahip

?u

S rSnla
h
™pS to^

l

u

i

ivTa,,,

? ?Jar.

announc-

NET EARNINGS of Investors Di-

Louisiana Purchase felt
that the territory might be fully

versified Services, Inc., in the
three months ended March 31,
1954, amounted to $1,030,320 or

'Thomas Jefferson in

ing

the

occupied after 25 generations. The
it

.

New

of

England Fund showed a 6.7%
during
the
three
months

gain,

ended

March

from

31,

$17.37.

said

to

dices

This

in

increase

was

Fund's assets

with
in-

general

prices in
30%

over

$18.54

favorably

various

stock

of

fact

land

1954—to

compare

increases

the

share

of

view

New

of

n?es

■?

innn,

_

*.i

Street,

tlon

ot

f

of

neiween

Donas

°f olio wed hv the" various
SmLc
compa" 5°F0/examole Central Surety &
TnluranrP ^haS 82 5^ of
policies

the

leading

eomna

the year 1953

The

asseI-

i

"Analvzer"this

vear

con-

statistic*

tains pertinent

capi-

[rbonSsincludfn/sigV'Lstate

»n

.

bars and

^^Undistributed earnings of I.D.S.
can be seen
report cov_
there would b_e a_ hundred or. ijo wholly-owned subsidiaries were ers much more information than
lb evejy city. I might add that he $991,337 or $3.41 per share of, the usual review of earnings pubviewed .this development as a I.D.S. stock, an increase over the lished by many investment organ*14 free the country as it in the first $2.68 per share• shown izations. Particularly interesting
highway safety from $778,574 or
would
fbrefaw;*be ^,lmb when

t

quarterly report of last

drunken

riders

wild

and

British socialist

horses

than 100! hours

more

Thus, the total increase in

1954,

against

and helnful from the noint of view

ana neipiui irom xne point oi view

v

vear

thef 19tti ^

during

$1,784,266

between the

4he

similar

predictions

almost

yearly

on

since

days.

VIId

The Northern States Power Co.

distin-

and

ma-

municipal

se-

has 57.7% of its

now

this classification

Con-

assets in tnis ciassnicauon.
e

uon-

% HolMngs of

preferred stocks has become relativelv

do all of the

ever,

The balance between losses

less

surance

imoortant

in-

among

companies in recent

is

the largest holder
curities.
.

nffor llndprwrittpn followed by
UIIUGITV IIIICII

college

a

in

periods of profitable operations are

Northern States Power

'

"Sir William Crookes,

Eng-

state

curities and

years.

group

petroleum

my

favored

and rates is usually a fine one and

year.

haustion of the earth's coal supply
within a few years. I have heard

St. Paul Fire & Marine has long

-

SamC Per'°d °f jor insurance lines in a particular with 15.5% Insurance in this
produce an un- Firemen's
of Newark
derwriting profit
of assets

{953

economist Jevons, in 1860,
at the possible ex-

alarmed

was

:

Rarely, if

day.

a

insurance

different

ijnes.

$6.14

or

industrials, and 36.7% invested in
bonds, mostly U. S. Governments,

S^in^eiit

sur-

quarter of

per

Insurance Stocks

—

~,lreel

^

wqrlc
value

v

Onerations

S 0Ver the $1'722,210 century foresaw the period when plus was $2,021 657, equal to $6.95
it would be unnecessary for chilper share in the first

ASSET

0.

.

March, 1953.

NET

Wall

63

„

talizations, premium writings, op- and municipals and 29.2% in U. S.
s'
f?™ffrlt minrtlriv
erating earnings, dividends, assets Government securities. The Fi.In the early 1900s a gentle- the _ first quarterly r®Port, un- and investments for 69 of the lead- delity-Phenix Fire Insurance on
baan.^r?.in Philadelphia grew en-, audited, for this year which was jng fire an(j casuaity insurance the other hand has 46.9% of its
thusiastic about private motor- released by the company Monday, companies.
:
'
assets in common stocks, mostly

"?efa

^mounted to_$2,695,912 for an in- A,
in

Co.,
.

gurance^StocK^

$?'fl05 £2
inlt
few $1^05 692 or $3.46 per share inthe

up^to settlement within a

„
&

ueyer

JOHNSON

street, tion of assets between bonds and
tion oi assets oetween oonas
av,aiiabl,e New York, one of the leading in- preferred and common stocks,
^Tgh therFlrst National Bank vestment banking firms specializAn examination of the percentof Minneapolis, exchange agent.
mg in insurance stocks, just re- age figures readily reveals the

settle

Tbp

class

and

non-voting shares of

The split will be effective inl¬
mediately
upon
filing
of
the

it would

centuries

Tb*aSirWn

number

wants

future

Hare, Vice-President, explained.-

220,703

the

amnnu

that

means

of shares

predict

to

voting shares

common

"When anyone in the past has

'

tt

SECURITIES &

43

meeting here today approved a
proposed five-for-one split of the

Shortsighted Forecasts

icals and insurance.

(1815)

rate reductions. Con-

versely unprofitable underwriting
justifies rate increases.
However,

,

Obviously

this

of these s^

information

on

underwriting and investments is
not only helpful

but essential in
analyzing the shares of insurance

were

term U. S. Government

high-grade

corporatev

bonds,
period

cash throughout the
for some time past,

Total

u^rJ

and
and

nf>t

«

huics

Mamh

on

aim

31

policy is entirely flexible
types

of

used,

and

securities
its

aa

that

sizable

to the

be

may

short-term

holdings
contributed
importantly to the over-all stabiiity of asset value during the
two

years.

point to
of

.

of

noted

the

opposite
activity and

industrial

'

the

constructive

forces

will

prevail

about one-third of the
assets (will be kept) in defensive
holdings as reserves and the balance

largely

with

emphasis

in

stocks

common

on

the !ess cyclical

■'

Majoi

poitfolio changes during the

three* months of 1954

first

listed below:

arc

portant historical

West

American
Penn

Aviation,

Electric

du

.

Pont

Maine

Power

Pfd.

Quoted
in

de

,-ittw

items

rp^

E.

E.

only

been

proved

.

bonds later this year,
to the general tunds

but

im-

ance

the

has

ad-

f.ny ^aepe aent standard, i »©a

™gqcr

any

earlier

at

Dull

01

stage

l pay
of

the

QUARTER

1954, Wall Street InCorporation reports total

assets

Th

$14.21

period
$15.55
ber

increased
on

of

share

to

$16.94

Dec. 31, 1953.

shares

The

come

OF

high

025.259

at

of
the

The Fund

.

at

to

1,059,689

Value

Line

year

were

$4,685,740

an

from

the
all-

1,-

was

96.49%

-

a

end

in commons; 5.56%

with

87.68%

in convertible

same

Total net assets reached

a

ana

Minnesota '

Wisconsin

North

of

min0r seg-

a

Total

oner-

rofnt 01 ineir Dasmf^s.-lotai oper

for 1953 were $92,600,000 and net income was $14,revenues

g00,000.

are

at

the

of 20 cents

on

the

common

current

stock

quarterly rate

nf
f

remainder

holdfngs^by SrngdustrymTlutd0eCdk

18.85%; electronics and
equipment, 10.23%; oils,
foods,
7.42%;
railroads,

electrical

8.34%;
6.98%; construction,
airlines, 5.71%.

a on...

6.90%;

and

New

York

has

Henry J. Stone Joins
Coburn & Middlebrook
to the Financial chronicle)

such

formerly known

versiffld Fund^

nlme

Inc

effeet'ive

Diversified

as

Coburn

&

Mass.

J.

Henry

—

Middlebrook,

Inc.,

75

state Street. Mr. Stone was

previ0usly affiliated with R. H. JohnSon & Co. as resident manager in

ium

April

1

D., Moreau Barringer, Chairman
board, expressed the opin¬
ion that the general investment

Jpc"

1^1

writes

CHICAGO
„

.,

?

_

u

John J

111

'

u

caliber

Diversified Services, Inc., at their

of

the

portfolio




has

not

STOCKHOLDERS

of

Investors

insurance

is

but

Thus
an

investor

can

Midwest

and

Brans-

age

interesting

Stock

past

The class A stock is entitled to
non-cumulative

dividends

of

15c

share per annum in preference to the class B stock; the cla«$;
per

B

stock

and

infor-

is

then

dividend

after

entitled

of

payment

to

share;

per

arc

and,

the

above

further dividends
equally, share for
the class A stock and

amounts, any
shall be paid

share,

upon

the class B stock,
Meteor

Air

believed to

Transport,

Inc.

ized in Delaware

on

March 2,1946

and made its first flight on May 3,
1946.
It has been in continuous

operation

then.! The

since

pany's principal offices

are

com-

at the

years,

to

his home at Nyack, N.
His age

Y.
was

74.

Government

in

26,

India,

ANALYSIS

17 N.Y.

City

Bank Stocks

in

First Quarter 1954

Bishopsgate,

Pakistan,

Paid-up
Reserve

Zanzibar,

banking

[

Request

Laird, Bissell & Meeds

Protectorate.

Capital
Capital

Fund

and

on

Tanganyika,
and Somali£4,562,500
£2,281,250

Members

exchange

New York Stock Exchange

Members

£3,675,000

The Bank conducts every description

at

Copy

Ceylon,

Kenya,

Aden,

Authorised

Y.,

after

the

Office:

Uganda,

died

AND

London, E. C. 2

Burma,

N.

is

be the oldest contract

air freight carrier in the United
States. The company was organ-

Kenya Colony and Uganda
Head

stockbroker,

Brooklyn,

eight

short illness.

to be used to purchase

are

aircraft and for working capital.

oi INDIA. LIMITED

Ex-

associated with Security Adjustthe

The net Proceeds from the offering

COMPARISON

land

of

Teterboro, N. J.

tabulation showing distribu- and shops.

Branches

Cabrera'

Corp.

ai $1.50 per snare an issue of iy»,oi 199,at
share
800 shares of class A stock <par
of ^eteor Air Transport, Inc.,

NATIONAL BANK

Charles Cabrera

Charles

C?--N*w Yo[k City, are offering

^

f^es. He was previously with

a

companies in

the different types of insurance.
This too aids in explaining |the
diverse underwriting experience
shown by some of the fire and
casualty companies in the past
several years.
■,'/

Salle Street, members of the New

ment

the "Analyzer"
determine the po-

using

by

become connected

'

Class A Stk. at $1.50

bimuany iNew rorK non tumuiauve aiviaenas oi ioc

fire

no

Transport

mative feature of the Geyer & Co. Teterboro Air Terminal, Teterreport not available in most of boro, N. J., where it also mainthe other reviews is the percent- tains cargo storage space, hangar

1-

With Glore, Forgan

for

of the

Similarlv New York

■

Eisele & King, Libaire, Stout &

American Fidelity & Casualty that equal

Di

1954,
Fund,

prem-

values
y*.

-

,

Meteor Air

a

Fire Insurance with over 60% of
its business in straight fire lines
is in a different position than

Another

(special to the financial chronicle)

.

-

writings in accident and

hpnlth

neaitn iisks.

1

Boston.

ha^changed

Investment

sub^

Continental Cas-

as

sition of the various

stone has become associated with

Tra^-

for which the bank is

y °

is

than

opportunities

uaUrthat h^l7.5% o? Rs

IT*' C°' °f ChiCag°*
pany

p

fidelitv

Hrv^ifforont rendition*

been appointed Transfer Agent for American National Bank & Trust

to

:

of

of

wholly concentrated in auliability and property
damage underwriting.

York

BANK

76 3%

in

tomobile

earlier.

THE

in

The largest single common stock

with

Marvlanrl
Marvland

ft°!^rpminm^ volunTe
profit

comnarahle
comparable

same

pan^'Hs
hncit
£ 4

the
the

as
as

among the various shares,

insur¬

same

degree, it
is essential in analyzing a com¬
pany to understand the nature of
its business.
Obviously a comthe FideMyVDe-

with Glore' Forgan & Co., 135 La

on

the

in

almost

share,

a

ation of future orosoects
ation of iuture prospects.

institutions

two

no

lines to the

enh^idiarv

uc

March 31, 1954 was 2,186,568 compared with 338,545 a year

ing

with

concentrated

5?d cSX^LSan^lirSs

w.prif of fhpir hiisinpss

new

high of $10,378,688 on March 31,
for a gain of $8,665,251 over the
same date last year and a gain of
$4,513,605 for the first quarter of
this year.

widely
ance

Bankers

"

utilities,

Pnmn;,nv

BOSTON,

year ago.

early months

natural gas comprises

The number of shares outstand-

invested

com¬

notes

fnd SoTh Dk^a The'sal

In-

com-

pared with $1,329,843 in the

year-end.

the quarter's

andlhe

from
num-

of the

prepay

'

-

(special

the

the volume of business
the volume of business han-

comnanv

Fund in the first quarter of

three months

the

outstanding in

three months increased

time

in

will be added

ings is not sufficient for an appraisal of the shares or an evalua-

well
well

gain in underwriting profits.

0f

share at

per

straight fire

of quite profitable underwriting
It is for these reasons that the
showed a declining trend.
Cer- "Analyzer" has proven to be such
tain automobile liability and cas- a valuable aid in the determinaualty lines on the other hand were tion of the impact of various inhelped by rate increases made in surance and investment trends
*951 and 1952 and showed a good upqn the different companies as

and

$3,983,481, equal to
share compared with

or
1953.

31

the

after several

vear

vears
lines last year alter several years

suppiy electric service in portions

of

per

$3,707,468,
Dec.

ended

31,

'

per

to

of 1954 and the

ating

.

point

market.

THE

this

value

used

0f 1955.

market

lieve 1 am sate in saying that the
investment
duality
our
of
list

ord

Asset

and

pany

"Brevits"

maintained,

as

SALES

high of $18,047,297 on March
last, as compared with $15,937,610 at the close of 1953.

&

well as from the sale of new
preferred stock and first mortgage

"Although
investment
quality," he said, "and resistance
to possible future decline, are not
qualities that can be measured by

the first quarter of 1954.
The
increase boosted the total to a rec-

31,

Blvth

as

day
in

Corp

dusty

Vanced.

net

^

consisting fcf

group

Boston

:

,

example,

died by different companies varies

in

Hale

Sanders'

First

payable to banks, and for a construction
struction program auring the balduring tne Dai-

$15.24

DELAWARE FUND reported Fna 13% increase in net assets

record

y

For

lines last

As
££e {As

Nemours

by

Vance

vesting

Co.

Dayton Rubber Co.
A„TAT^

un(jerwriting

'

March

Airlines, Inc. 3!/2%
Allegheny-Ludlum Steel Corp.

**14 per
S
$14

15
will participate, with
rjghts expiring May 4 1954. The

President

FOR

Eliminations

„it,t

,

held at a price of
stockholders
o£

Dividends

Co.

,

,

April

viewed

Inc.

American

Central

share

forgotten archieves."

than

McKesson & Robbins, Inc.

hi<?

Crawford H. Greenewalt

long

Boeing Airplane Co.
North

are

,

J?*®
shares

"

.

,erJu eveiits

Ttc ^
stanas
at

Additions

nrove

,

stock market averages, and added:
"Until there is further evidence

that

-

par / vaJue con}mon stock at the

troublesome in their particular
setting, fade first into unpleasant

this

on

wnai

generation prove his

.

shareholders, the Board

Trustees

trends

briefly

luuugcu.

against the pattern of our coun- unsubscribed
portion will be purtrys steady long-term growth and chased from the company bv an
prosperity, the bad times,
so

and

[ Commenting

ui

generation

a

'

defensive

last

in

errbr

S

New England Fund's investment

t

ou^^iico

he did not foresee was that chemistry through nitrogen fixation
would

1

17

!ft7 979

xojuhj&

American

120

of

Telephone:

business.

Trusteeships and Executorships
also undertaken

Bell

(L.

Stock Exchange

BROADWAY, NEW

A.

YORK 5. N. Y.

BArclay 7-3500

Teletype—NY

1-1248-49

Gibbs, Manager Trading Dept.)
Specialists in Bank Stocks

44

The Commercial and Financial Chronicle...
Thursday, April 22,

(1816)

under

first call, or high coupon
bonds appreciably over call? Will
the market preference be for low

Evolution of

Securities

a

Markets in Specific Issues

and

Trading House
San0nande]fo^^^bonV^raS profita'^rpSsftion1 ifJJertajn
ufits

senior partner is always available

yield discount bonds as insurance
against refunding, or high yields

6

Continued jrom page

afterward,
the bond issue. The over-all keynote
mounting total of debt issued by is teamwork..
state and local governments neThere is one thing all members
cessitated our setting up a rnunici- 0f this trading team always keep
Shortly

to

Actual

risk of loss through refund¬

a

ing?

sues

Trading "know-how," when
drop back
constant

evaluation

of

which

claims

that .the

whole

customers'

trad¬

orders,

a

section

tain

is

of

the

market,

we

senior partners may decide to in¬
tervene with an admonition to cut
down a certain position or with

of its parts.

sum

The

If, how¬
situation seems to
be
brewing in an issue or in a cer¬

ever,

psychological theory

greater than the

is¬

tions throughout the day.

make up the trading day.
a

specific

Government

our

30-odd

some

years

who wanted another assign¬

ment

and demand and supply plus mar¬
ket conditions, may cause fluctua¬

these factors and otners produces
the
purchases and sales which

There is

in

traders.

position,

ing

all

the

in

youngster

ago,

generally left to the dis¬

of

a

Department

markets

are

cretion

to pay up and when to

—the

judgment.

pass

1954

he

because

the

afraid

was

Treasury, which was then trying
to retire its World War I loans as

rapidly as possible, was going to
wipe out his job along with the
public debt!
One financial movement which
still

be

to

seems

gathering

strength is the institutionalization
of savings.
As a result of this
movement, there has been a rela¬

tive

decrease

in

individual

long-

department..
* in mind: No trade is worth mak- In a way, this theory applies to
term investment demand and an
Cen- ing unless it fulfills the objec- our trading. The continuous
increase in that of institutions. As
stream of public and private trad¬ a direct order to build it up.
tury period, the expansion of the
tives and desires of the lnstitua
by-product, over - the - counter
ing information constantly circu¬
Coming
events
money market was closely paraltion with which it is made. °*heraffecting
the trading in bonds has continued to
leled by the growth of our bond wise, no matter how seemingly lating throughout our organiza¬ whole bond market usually, but grow in importance while bond
tion creates a charged atmosphere not
always, cast their shadows be¬ trading on the Board has declined.
trading activities. As each section Profitable, it isn t worth a hoot,
pf the market grew in importance, We
all know that today s fast for those attuned to it. As the fore. In a given situation, we sen¬ Judging from the continued in¬
new units appeared in our trading
buck
can
become tomoirows tempo qiuckens either on the up ior partners decide by issuing an crease in investable funds of in¬
or down
side, the trend is sensed over-riding directive on all the surance
room. As some types of paper fell
headache.
companies, savings banks,
pal bond trading

Throughout this early 20th

disuse

into

faded

or

the

from

In

several trading units were
merged with others or suspended,
.

of
The

tion.

setup

have

we

today

times.

Operations of the Trading Room
•

Now

let's

take

operational

at

Our

setup.

is the hub of

room

look

a

in

salesmen

or

organization,

trading

tuate

minute

from

to

as

minute;

price spreads and yield relation¬
ships keep changing; a block of
bonds is retailed; the price on an¬
other block is raised or perhaps

lowered; the

our

flash

trading

tape prints a
projected refund-

news

about

a

may

be an increase or

reduction of the Federal Reserve
our
rate of discount; prime loaning
offices in other parts of the coun- rates
at the banks change, et
try are in close touch by means cetera. All this financial news is
of an extensive wire system. All grist for our mill and every effort
are required to keep well informis made to keep all traders and
ed on our trading ''positions" and salesmen fully informed throughAll

production personnel
gathered together in it, and
our

picture. Every
effort is made to provide the upfor them to do

sary

Our

traders

market position

which

most

of, the various is-

make

the section

up

of the bond market to which
they
are

assigned.

to make

They must be able

bid

a

or

offer in

an

active issue in their field of

cialization at

a

any
spe¬

moment's notice if

market conditions permit. Others,
the salesmen, are expected to
keep
iii close touch with a number of
accounts and to know the
portfolio preferences and trading patterns of those institutions.
p,rr,,
Both the salesman

are
part of
f ^leam.
The

cannot be

,

over-all

an

,

and

individual

Trading Ah Art, Not,a Science

,

trader

art, not

an

science.

a

it calls for

a

1

slide rule techniques,

combination of two

aRd S \ market intuition.

Under

the first come such questions as
bat 1®ttie general economic outl°ok- Where are we ini the busiWhat are the 1Tjnne-

cycle-

ness

What

tary authorities^ thinking.
are

cloistered

strength
have

doing?

they

will

What

Federal Reserve do

building

in the money

unison, fully utilizing to
best
advantage the firm's

the

the

trader

account

specific
may,

the

situations.
to

make

cover

salesman

The

occasion,

on

trader

for

primary dualso

in

salesman

encourage
a

the

commitment

which, from the narrowly specialized viewpoint, may offer dubious
possibilities,
or
conversely,
to
caution in
circumstances.

urge

iL

While

roles

the

are

able, it
traders

job

in

well

as

not

is

a

given

set

of

Each

-

salesman

usually interchange-

nevertheless

frequently do
covering

an

an

true

that

excellent

account,

the fact that salesmen




to

ments

clerks

whose

by

of transactions.

ment

require-

ments of the Treasury. Right now,
for example, is easy money going
to be made easier? What is the
outlook

the

for

term funds

supply

of

long-

supply of long-

versus

investments?

term

An

evaluation

such

factors

Equally essential is market intuition or a sense of timing, keepabreast

of

the

day-to-day

trends, grinding out the trades
which give us our bread and butter- Such Questions as these arise
d?ily: What is the demand-supply
Picture in any given issue? How
do equipments compare yieldwlse with municipals? Is the new

traders,

as
can

'>

$

J

1

and

Acceptance
mands
of

a

man

day

Department

only

al

accounts

tive

by

up

in

the

of

some

covered

are

stock
"1.

>

given group?

seasoned

issues?

issues

and

Benew

Right now, is it better to
low

j

t.

1

i

coupon
o"

t

"1

.1

bonas

it

'1

*

'T

,

»*'

sexnng
5

>■

i

T

5)

i

\ {

by part¬

senior

addition,

smaller

accounts.

and

They

sales¬

service
less

in turn

ac¬

are

assisted in this latter task by jun¬
iors
who
also
service
on
their

minor

own,

and

still

all

key

In

trading and sales,
it that

we

understudies

carry

less

active

spots, both
try to see to
available

are

efficiently in the ab¬

on

of the lead

man.

lowing
units

consists

trading

the

of

fol¬

departments

or

Governments, Municipals,
Industrials, Utilities, Rails, Arbi¬
trage,
Preferreds,
Liaison,
and
Acceptances and Finance Paper.
The

—

applied to these units,
however, are not always fully de¬
scriptive of their trading prov¬
ince, For example, International
names

Bank

Debentures

Canadian

and

bonds,
both
Governmental
and
Corporate, are traded in the In¬

weeks, the word might go out
offerings and build up
long position, full steam ahead.
Our method of exercising control
over our trading setup is uncere¬

monious

is

trading
tomed

have

tions

securities.

As

trade.

If

desires

However,

~

flexibility must be the
institution engaged in

an

to

limit.

an

investment program

sell

a

block

of,

million industrial bonds in
we

usually

hundred

an

limit

bonds

to

in

a

our

say,

a

a name

couple of
position,

a

? Vt' JO

so

to

accus¬

take

face-to-face
the

in

with

and

i

r;r*

l

con¬

which

We also have written

which

ment

we

com¬

were

our

distributed

officers

some

here

this

7,000 invest¬

day

every

the

of

year.

virtually 100% of all trad¬
ing transactions are made by tele¬
phone and
rely solely on the
honor of the contracting parties
for subsequent fulfillment.
In all
of my 38 years in this business,
during the course of which I have
traded literally billions of dollars
worth of bonds, I have had not
one
"reneg" on a trade, regard¬
of

the

that

fact

markets

are

constantly

changing with conse¬
substantial gain or loss to

side

contract

the

or

is

other.

the

basic

The

oral

foundation

business, and my experi¬
ence
is an
eloquent testimonial
to
the
integrity of the trading
fraternity.
our

Federal

ings

growing

Look

this

tempted

to

Ahead

cover

the

at¬

historical

background of our trading organ¬
ization, its growth and develop¬
ment, and its present physical set¬
up

and method of operation. Now,

to round

out the

like to take
of

course,

a

picture. T would

look ahead.

ever

knows

No one,

tne

future

part

of the

until

it has become

past.

Apropos of that, I still recall

a

>">

to

sav¬

ever¬

an

of institutional funds

sum

investment

for

in

pre¬

common stocks are no
longer in¬
frequent. In certain institutional
type
stocks, such as American
Telephone and
Telegraph,
and
high-grade utility stocks, trading
positions
have
been
profitably

maintained.
stock

Our

preferred

own

trading unit is

likely

a

can¬

didate for expansion.

Another

section

the

of

market

which will bear close watching i3
that
comprised
by the dollar-

quoted,

tax

bonds.

exempt

-

revenue

These obligations

now

are

coming

to

amounts

and long-term maturity.

market

governmental

ready under
network

in

large

budgets al¬
strain and a

severe

of

long overdue trans¬
highways geared to
present day traffic needs, this type
of issue is growing in favor. These
revenue
bonds
already have a
continental

brief

but

history.

excellent

investment

Should they continue to

increase
in
number, they will
bring to the municipal market a
trading opportunity it has never
had before; namely, a chance to
make close, good-sized, two-way
trading markets in large scale

dollar-quoted issues. We are
considering the addition of a
tation

section

to

now

quo¬

municipal

our

Offering sheet which will be de¬
voted to such
It

is

dollar-quoted issues.

possible that in the not too

distant

future,

municipal traders

will find it advantageous to carry

larger

trading positions

bonds

nue

with

turn-over than

eral

reve¬

of

rate

now carry

in

moving, basis-quoted gen¬

market

Then

plicit

obligations.

too, there

enormous

the

the

of

development

necessitate
are

<

ahead

potential im¬

which

power

financings

lies

economic

in

atomic

day

in

rapid

a

they

will

some

financing.

Such

bound to be large—

likely large enough to dim

very

the splendor of last year's "quar¬
ter billion plus"

financings. They

can't all be direct placements, but
if many are in that category

even
a

good portion of them will

tually

come

One

of

a

the

things

for

which

crises
our

that

we

are

proud of at Salomon Bros. &

market

ties

even¬

into the marketplace.

Hutzler is that

I, have

talk,

makes

ferred and equity securities. Large
volume trades in preferred and

most
A

of

extension

taxation

institutions

available

prudent-man

the

and

income

.

During

likely to

seem

Recently-enacted
legislation

slower

But

less

these trends

continue.

institu¬

-J.i:

o

it

daily offer¬
ing and quotation sheets (sets of

cur¬

demand-supply picture in

of

aspect

are

tend

men

firms

munication

for

quantity, experience plus the

executing

the

and

of

trading posi¬
tion within the limits set by firm
policy as to quality and quantity.
As far as quality is concerned, we
limit our inventory to high-grade

rule.

we
we

occasional

tact with

cretion

here again

that

binding contract upon which all
trading is based. We do, of course,

quent

own

other

one

which

to

completely for granted. I think,
however, it will bear mentioning.
That, gentlemen, is the oral but

one

institutional

but effective.

There
;

savings and loan associations, mu¬
funds, pension funds and the

tual

like,

With

reduce

Each unit is responsible for, and
exercises virtually complete dis¬
to its

all posi¬

on

jtime when the bond market

dustrial Bond Department.

as

up

hand, if the redis¬
rate had just been lov/ered

morning) go to

At the present time, our trading

organization

lighten

a

banks
..

circum¬

eral

de¬

The most important institution¬

a

to

who devotes most of his

servicing savings
and pension funds.

such

had been under pressure for sev¬

attention

to

issue dictate the

tween

at

junior

now

part-time

to

Under

senior partners might

we

On the other

count

order clerk.* At

an

heavy? What is the yield spread
be*ween top-grade utilities and

a

;

Our govern¬

senior and two

two

ners,

advances

and

tions.

the other extreme, our once large

rent

gories within

deter¬

department; ' for /'example,

!ssue calendar's backlog light or

Between industrials and utilities?
Between the various credit cate-

down.

come

takes up the full time of two part¬

accounts.

of

is

their fu¬

for

warnings by Federal Reserve of¬
ficials that they'd like to see them

daily vol¬

average

cash

Federal Reserve may have
remained persistently high despite

order

number

its

over¬

For in¬

at the

decide

and

inspir¬

to the

as

addition, discounts

and

traders

raise

to

stances,

junior

concern

ture mortgage financing needs. In

trading unit is under the

who,

the

Treasury 3V4S? Between telephone
bonds and light and power bonds?

_

trader

of

direct supervision of a partner. It
is staffed by a group of senior

backed

ing
must

we

Story

ners

are

mar-

trading positions.

ties,

specialists,
who, due

were

salesmen

pres¬

stance, insurance companies may
be talking about the growing total
of direct placements they are go¬
ing to have to take
up
next
month.
Savings banks may be
asking whether they should sell
short equipments or long Govern¬

within.

from

some

all bond market outlook.

previ¬
traders,
their
capabilities, were admitted to the
firm.
This is a great inspiration
to our organization and engenders
the drive, which is necessary to
achieving success.
ously

and

men,

What

is the specialposition in that

his

firm

that

policy

of

national economy may be

The partners are men who

the

as

to

the

is

the

to

amount

supply and also show¬
ing signs of increasing listlessness
even
though offerings are still
moving out fairly well.
At the
same
time, developments in the

elements of

firm

our

ahead?

trading

in

addition

of

adhered

certain

a

from

sure

our

ing

One of the greatest

sence

In

of

lives in private offices;
the front line as traders

are on

we

to

the

under

control

and salesmen.

feet conditions in any one issue or

work

over-all

organization, flexibility and team¬
work is the rule. We partners are
all working men.
We do not lead

group of

issues,

trading units. To illustrate, a mar¬
ket may be holding the price line

action.

various components

market in the months immediately

salesman

well posted on

of the

,

determines long-term market policy- However, a long-term outlook for money m"st not be the
ist who runs our
§uiding factor in day-to-day tradsection of the market; however
lnSThe supply factor in the
the salesman is
probably better bond market might cause a severe
posted on market conditions as a reaction although the long-term
whole. The individual trader no outlook for money is such that
matter how expert he is in his there mi®ht be a plethora of funds
own field, cannot know
an
insti- and a considerably higher bond
tution's portfolio requirements as market some months away. Condoes the man who covers the ac- siderable money has been lost in
count. Also, he should be
equally trading by not giving the proper
as alert as the salesman
to devel- evaluation to the factors that curopments in another section of the rently affect the market against
market which affect his
trading the background of forces whose
position. So, in a trading organ- effect might not be felt pricewise
ization salesmen and traders
must *or months to come,
as

exercising

mined

"

Trading is
the

In

ume

neces¬

minute detail the demand-supply
situation
in, and the technical
sues

out the day.

so.

know to

effort made to transmute

an

are

theover-all market

to-the-minute information

and

it into appropriate

and

I
mentioned before, must be
well
posted. Sometimes markets fluc¬
A

operation. i°g; there

our

person

auxiliaries.
These auxiliaries are the statisticians and the
portfolio research clerks. The statisticians quickly supply needed
information not otherwise readily
available, such as size of sinking
funds,
average
maturities,
et
cetera,

reflects today's

conditions. Had a
trading organization such as we
now
possess
been launched in
1910, it simply could not have existed, for the economic conditions
appropriate to its existence had
not
yet come into being.
The
moral of all this is that a trading
^ifeanization must be flexible; it
must be constantly geared to the

together
wire, traders,

their

trading organiza-

our

then, are

room,

by

So much for the historical back-

ground

trading

our

gathered

scene,

over

we

have provided

investment

has
the

securi¬

weathered

past

44

all

of

years

existence, and it is exhilarat¬

ing to contemplate that
contributed
gree to

at

least

in

the expansion of

we

our

country.
We

look

1

forward

dence to the future.

have

some

with

de¬

great
.

confi¬

Number 5318.... The Commercial (Md Financial Chronicle

.Volume 179

l\

1 't'

Continued

from

i-

.

liquidation
at

Basis of Sound
dom

tion

and

b.y the natural opera¬

this

of

result

would

trade

of

be enforced

If we have

system.

Money

ernment is the

least.

by

its

The

force.

own

vital

United States should have

a

interest

as

in

convertibility

dis¬

rationed and

item still

only

the

criminated against, throughout the
free

is

world,

Free

the

S.

U.

United

States.

the

of

people,

further
all

we

this thesis.

on

with

few

a

intenton

no

implement
illustrative

release

hand

the

the EPU

—

—

until

will

in

sparrow

our

etary policy upon

the

danger

have

we

convertibility.
"I

to

the most

of

one

am

already

on

world

a

that

free

of

advocates

only

convertibility
basis

wide

this

I

as

true

cooperation without distrust

lysts,

exchange

control

and

years,

feel

can

of exchange

rate

Thus,
to

measures

apply

we

The

and

Bible

that

is

precisely

are

what

we

have."

Remove Shackles of 1933
ity

on

we

world-wide

a

/must do some
home.

One

the

vwhich
when

Kremlin.

of

basis,

these

to

handicap;

placed upon us in 1933,

was

the United

States went off

gold standard and it became

crime for

American

an

citizen

a

gold

liave to repair the damage which
jresulted
.from

to

national

our

this

fallacious

-.and soundest way to recover from

tShe 20-year-old mistake would be

to

enact,

the

and

^President tp sign, Senate Bill No.

13,

pending before

now

•mittee,

or a measure
i

A

Gold

measure

removes

restrictions, impositions and

^inhibitions, both

upon

gold mined

iin the United States and

American

that

such

Thought, held, sold,

gold im-

market

open

^States,

in

and,

gold

the

of

the

may

traded

or

its

output

be

United
of

case

im¬

13

faces

of

number

and

the

as

political

just

as

freedom.

f_cal

you

freedom

cannot have politiwithout

all

of

the

other freedoms attached to it, eco¬

•

nomic, religious, etc.
•"

ago,

one

of

our

Many years

most

brilliant

Statesmen said that the best gov¬




all

rainbows which

everything but

never

promise

materialize

current

Needs:

Our

160,000,000 population, in¬

creasing

rapidly,

vainly

these

degree of sta-

domestic

our

eficially

the

to

international

As

producer of

a

I

prunes,

am

interested in selling at a fair profit
all of my output of

So

ity.

is

every

Formerly,

this commod¬

exported 40% of

we

our

production

balancing 60% of
domestic

this

needs.

convertibility
As

peaches, I

profit.

do

sound

a

its

pre-war

canning

interested in selling

peach

So is

of

at

crop

a

fair

peach grower.

every

Prior to World War Two, England
was

a

customer for Cali-

strong

fornia canning peaches.
to

export

much

as

half million

two and a

as

Since then, England

maintained

has

We used

to Great Britain

cases

at that time.

an

e m

b

a r

g o

against American fruits because of
■

_

,

,

.

,

Just this spring, we had devel-

oped

a

the

program

cooperation

in

United

States

Foreign

Operations

Administration

the

Government

British

our

most

fense,

about

purchasing

Resources:

important natural

both for

lie

Some

peace

dormant,

and

re¬

de¬

awaiting

suitable and favorable

a

mon¬

etary atmosphere.

and

for

maintain

their volume

producand still

price

themselves:

that

so-

called alleged over-production
crops

to

be solved by lower

can

producers;

stock (par $10) of The Gas
Service Co. at $23.62^2 per share:

mon

decreased

lower

of
re-

The

subscription books were closed
same
day. The bankers had

the

been

awarded the issue

13

their bid of $22.03 per share.

on

The shares

that farmers

from

duction with lower prices to them;

crue

an^

-be s0~ca'led farm prob-

lem is

porting

million

one

peaches

ning

States

cases

of can-

England.

to

called

the

for

to

Government

The
United
our

pay

in dollars, with the Brit-

growers

ish

Government

equivalent in

transferring

an

sterling

pounds

to

the credit of the United States in

nally, the

for Ameri-

use

expenditures in

can

myth and exists only for

a

the benefit of those who want

program

an

a

staggering high

pyramided

on paper

printed dollars, either must be

increased

its

or

government must

re¬

expenditures drastically.

(6) Fluctuating Money: Our financial structure is constantly im¬

periled

by

wide

April

on

purchased frond

were

Britain

Fi-

simmered down
cases

because

to the

The

-

for wasting

excuse

billions of

talking about it.

I

assure

this Committee that nothing could

father fiom the truth.

Like

the

merchant,

dividends
its

mining

the

operator,

the Professional man and all other
farmer

terprise
quit.

our

on

no

is

en¬

basis

or

alternative.

no

middle

fluctuations

in

supply of "artificial" money;

minimUm .exP?r!. t0."nage WU1 "0t
be
depreciated further

Lack
has
an

of

a

Exports

sound

most certainly

policy

money

annual export loss of four

lion

of

bales

mil-

cotton, hundreds of

of bushels of wheat

millions

and

other American agricultural

many

vitally

products,

needed

But that

is not all.

Aid," is

just

as

"Trade—Not

essential to

welfare

of American

and

sound

a

would
for

help in

export-import

by drastic changes in credit and

imports.
aware

policy

substituting trade

Our current

picture

is

one

of

exports and increasing

This

Committee

is fully

of the serious consequences

ing extremes in interest rates; by of this situation.

■

paid

in

each

on

year

During the last three

per share per annum on the
1,500,000 shares of common stock
outstanding. It is the inten¬

$1.24

the

of

tion

to

continue

September and December and to
quarterly

a

dividend; of

31c per share payable on June I#;.
1954 to stockholders of record on'

1954.

May 14,

Gas

principal

Farmers Want Freedom

directors

the present policy of paying divi¬
dends quarterly in March, Juries

The

cated

Service

Co.,

at

700

whose

office

executive

is 'lo¬

Scarritt

Building,
Moreover, the vast majority of Kansas City, Mo., was organized in
Delaware on Aug. 22, 1925, and is
American farmers want to conduct their operations under

free

a

in an atmosphere dom-

economy,

demand, under a monetary system
^ree °* regimentation, arbitrary
cordl'°ls and manipulated managemen7 on a free-choice basis, and
in.the true American competitive
SP"'*- They want fair and equitable prices for their labor< invest"
men^ an<* r's'5 caPdal, managerial
ability' ingenuity and enterprise,
They want a dolIar that repre-

sents a dollar's purchasing power,
^hey want a fair and equitable

They want to pro-

duce all the food and fiber which

7Iand

their

their

and

skm

^ an(J wWch fee Unjted States
^ rest Qf the

and

wmW

needs

policy will help

A sound monetary

Ioft

thesfi

authorized to do business

for¬

as a

eign corporation in the States of
Missouri, Kansas, Oklahoma and
Nebraska.

The

company is and
as an operat¬
utility engaged in the

intends to

continue

ing public

distribution

for

sale

and

natural

of

residential,

commercial
industrial purposes.
All gas
distributed by the company is pur¬
chased at wholesale, principally
gas
and

from Cities Service

has

company

no

Gas

The

Co.

facilities for the

manufacture of gas.

The

}

territory
is

company

.-

served

located

by1 the

in

area

an

embracing western Missouri,
tral

and

eastern

eastern

munities

and

two

southeastern

in

north¬

Kansas,

Oklahoma

cen¬

com¬

Nebras¬

can

objectlves

having

ka,

population

a

proximately

1,600,0^0

of

ap¬

which

of

approximately 860,000 is

concen¬

trated in the Greater Kansas

City

t0
area.

frilj^ion
Gas Service
If

have

we

a

really sound and

honest dollar, we
the major

thg

agricultural problem of

United

gtates_

conclusion,

sound

a

I again

may

whole.hea;tedIy

dorge

,orth

the

basis

monetary policy

genate

Bm

en-

No

as

set

13

similar legislation>

and

Jaw

that

^ lgnd

Qf

jg

America,,.
The

stake

at

'"ture is at stake.
world-wide

pended

for

such

Let

us

important?

contribution

1954, 1955, and 1956. Of

the

to

in

1956.

1955,
the

Of

gold

so

level

it will find its

based

proper

its

.upon

price

demand

at

home and abroad,

(2)

Providing

struction

000

unhampered

privilege of possession and trad-

(3)
ble

Providing

currency

based

on

to

a

credit

and

values that

from

tion

that

reflect

mon

the

under

with

free

existing

its

bank

that

and

agreement,

the

funds

of

$1,500,000

complete the construc¬

will

obtained

be

through further bank borrowings
the sale of securities.

ture,

The

na¬

amount and timing of such

additional
market

financing

will

conditions

depend

and

other

factors.

to-

corn-

denominator in the world's

currencies

be

through additional bor¬

,

r

Charles Sievers
Charles Sievers,

as

internal
will

$1,500,000

gold,

modifies.
Restoring gold

in

approximately $7,663,-

program

day's price levels for other comr
(4)

*

expenditures, it is esti¬

needed to

on

fully converti-

$3,000,000

funds, required, to

be provided from

can

rowings

or

an

ini 1954, $3,500,-

and

provide for such three-year con¬

remaining

free market for

a

it is antici¬

sum,

000 will be spent

available

American economy by:

(1) Providing

ex¬

pated that approximately $4,163,r

is at stake.

permit gold to make its

constructive

$10;-

during

construction

estimated

worId.s

Our freedom,

freedom,

presently esti¬

Qr

thg principle it embodies becomes

future

Co.

approximately

630,000 will be required to be

000

,he

that

mates

the years

In

for

will have solved

the,, ing in and with gold,

agriculture;

monetary

give-away aid.

decreaking

abroad.

has

calendar years, the company paid
dividends equal to approximately

course.

What could be more

contributed to

Co.

varying amounts
stock

1943.

mated that

credit

regulations; by correspond¬

Service

in

common

declare

operate his

profitable

a

There

There is

economic society,

must

Gas Service Co.

Gas

now

manufacturer,

the

no proceeds1
public offering will ac¬

the

since

ex-

corresponding export declines in

(5) National Debt: Our National

the

their
a

by Kuhn, Loeb & .Co., Union .Se¬
Corp., Reynolds & Co. and
Allen & Co., on April 19 offered
publicly 1,500,000 shares of com^
curities

sources,

Dormant

duce

at

brjng

Loss of

(4)

more

tion

tax program.

controls.

currency

power.

of

a

inated by the law of supply and

program.

am

my

against

cannot

lack

we

producer

a

of

We

because

now

Germany,

to

our crop

500,000

of

a

than

producer.

prune

control. We hope this

half

tries

only

sejj

the

of currency

has

reduce

can

an(j

segments of

scene.

to less than

which

make

can

less

Par**Y exchange ratio; that

farmers

itself

reflect

to

dollar

anything

on

help tremend¬

satisfy its consumptive needs with
a

faucet; that farmers

profit

words

a

British banks for

Consumptive

all

and translate itself ben-

program

anything except economic and

(3)

prob¬

cure

of

sectors

unem¬

ing the seeds of communist mira¬

or

.3n fact, one supplements the other.

.Actually,

which

ployment always offers, for plant¬

because it is

^significant

the

jgainfully' employed,

fertile soil

debt, already at

is

American

threat of

the

would

Economic Freedom

in

economy

with

»

unemployment specter, despite the

2stamp all gold with the label of

freedom

economic

the

Unemployment:

(2)

sources,

freedom.

Economic

be squeezed

or

wronger.

upon

ported gold, re-exported. In other

swords, Senate Bill No.

agriculture will have to

through

again

jported into the United States, de¬
claring

of inestimable

political slavery.

iSenate Bill No. 13 by Senator Mc-

imany

lost
mar¬

factor which determines whether

in

Market For

The

has

export

former

importance to our farm people—

cles and

sirqple and clear language of

cCarran.

Tthe

its

sales outlet

ket—a

Trade:

agriculture

of

not

these

which would

Here
cannot

we

Export

of

Loss

much

This Committee is familiar with
tthe

upheavals.

Com-

your

similar to it.

.

Free

to

t'.

(1)

monetary

quickest, most expeditious

Congress

added

ignore:

industry

The

bility

all

which

facts

some

sound

a

uncertainties;

it would

But

current

our

has

of

all

solve

ously in creating

mini¬

economy

:step.

ftbr

policy

the

by

not

us

to

gold certificate. We

or a

let

economic

shrink
<own

instigated

But,

monetary

we

is

tasks

terrific

disturbances

mize the effects which

a
a

world-wide

important things at American

the

ire move

re¬

sulting from the Korean conflict,

are

plan convertibil¬

can

not

prune

and

a

and off like water from

on

$23.62%

A group of underwriters headed

can match mounting costs of pro-

vac¬

the comparable damage

these

Before

economic

of

says

measures

horror in the eyes of the Lord',

but

the destruction

as

by World War II and

on

deliberately
weights

contribut¬

are many

aftermath

its

upon

monetary policy. Na¬

ing factors, such
brought

troubles

and

turally, there

is

false

exchange of goods

our

services.

false
a

20

some

ills

unsound

uum,

realistic.

and

for

country

no

its

that

sure

had foreign

now

ana- >

cannot blame all of our

we

economic

and

grudge between the countries con¬
We have

plant.

economic

would

ills.

its agricultural

industrial' productive

duction

turns

*

Honest Money

For

all

lems;

serious 'damage

As fair-minded and unbiased

an

cerned.

wrought

de-

* war-time

the

establishment

would

feel

to

will lead

and

policy which has

a

nation and

our

recession,

v

inate

from the

face

ardent
and

.

of the cyclical

following

The

mon¬

our economy

we

continuance of

the roof—

caught the pigeon on

agricul*
confusion

monetary policy would not elim-

particularly its agricultural sector;
of

de-

Offered at

Promulgated the absurd theories
that farmers can turn their pro-

Cities Service Co. and

examples

unsound

an

,

for
.

only

by fear

Need

Eu¬

We

Plan.

Payments

ropean
not

the

.

deflation,

"bust"

thesis

our

Germany

bust

to

and

boom.

us now

an

...

disagreement; by fear of in-

Effect of Unsound Money

Let

supply

programs
.

pression;

sure

am

and

flation,

agree.

of the effects of

has

I-

of

producing

and

not

as

substitute

costly

conflicting welter of

a

Gas Service Co. Stock!

been most curious to learn who

law

,

ture,

the

do

I

the

plans

most; the govern¬

believe it is necessary to elaborate

convertibility, including the

the

to

servant

prices; by resort to

types of subsidies

mand; by

Facts

vs.

Parenthetically, I have always

,

for

ob¬

most

ment which is the master, not

dollar.

dollar, would throw markets open

the

Theories

unnecessary

government bonds

and

45.

f v-

.

ineffectual

jectionable government is the one
governs

of

sacrificial

various

which governs

one

Conversely,

convertibility, freedom will break which
through

M

losses resulting from

12

page

(18X7)
t

H

conversion

privileges to allow for trade.

rett &

Partner in Bar¬

Co., New York City, and a

member

of

Exchange,

the New York Stock

passed

away

at

his

home Anril 15 at the age of 62» ~

46

The Commercial and Financial Chronicle

(1818)

here

on

be

may

analysts

many

favorable, turn that will permit it to attract
of the opinion capital in a competitive market?

more

are

that estimates of perhaps $9.00 to

Is there likely to be a long lag
between the need for and the

$10.00 would not be too optimistic,
it has been stated that ex-

granting of rate relief?

penditures

Commission allow

As

for

property
and
equipment improvements and for
<

new
equipment will be appreciably less this year than last, and

Southern Railway

finances

as

railroad stock market, and higher
than
a
year
ago.
The
transportation costs, however,
particular that segment repre¬
were held in much better control
senting
the
better
quality
(up 1.9 points from 1953) and net
operations,
has
been
giving a
income
was
off only about $1.9
considerably better account of it¬
million on a decline of $5.3 milself recently. There appears to be
lion in gross.
a growing feeling throughout the
Obviously earnings for the full
country that the period of busi¬
yearl 954 are not apt
ness readjustment has pretty well
run its course and that there are
$ll.b«J a snare realized m 1903.
On the performance so far this
convincing signs of the start of a
recovery. "Judging by many state- year and some indications that the
ments in the press and at annual tlde nas turned and that year-toThe

in

_

year

Also,

situated

better
been

doing

cent

months

of

most

the
have

railroads

substantially, it is felt that any
earnings would fully justify
liberalization of the regular dividend. The stock is

regular

basis,

$i,oo paid
this

that

so

railroad

fears

of

earnings

On a long-term basis
constructively inclined

amounted to 45% of the reported
income

not

this

concerned

of

the

over

outlook,

in

costs

instances

large

a

have

been

well

available

from

com-

stock. The construction prohas now been completed and
.

gram

credit

will

be

reduced

stantially. While the

new

-

sub-

facilities

will

produce earnings, the initial
increase will not nearly offset the

controlled, and that is one of
the most encouraging aspects of loss of the credit and there will
the picture.
be a substantial drop in earnings,
One

in

stock

the

semi-invest-

category that has been

tracting
recently

considerable
is
Southern
For

common.

principal

to that $64 question.
;
There are many cross-currents

for

prospects

the

ex-

in the road's traffic

pansion

continued

po-

at-

attention

We

pay a great

deal of attention

stock,
as

bonds, 25%

and

wanted

had
been

never

pre¬

common

be better

especially

dividend
this

on

25%

minimum., I

able

than
since

restrictions

have

understand

Some

formula.

to

are

formidable

once

convinced

now

that

1956 maturi-

of last year. In comparison, hold-

ings

of

bonds

cash

and

government

total close to $100 mil-

now

lion and will be further bolstered

by

' As

to

confidence

ment, there

like

to

in

even

stronger structures, but
other companies with stable growdo

not

need

to

be

so

manage-

are many

have

visit

managers

us

periodically and give us an opportunity to ask questions. While
this may take a great deal of
your

earnings in the next
two time, it is much more effective
Thus, it is now believed than having us attend a luncheon
that the 1956 maturities can be 0r other
meeting where it is someyears.

paid

off in

cash

when

they mature without any further financing. This will mean a highly con-

times

difficult

to

ask

counting,

utilities

many

1932 with
a

no

and

their
of

bonds

5

to

and

or

even

equity

interest

preferred

requirements. The

formula

has

resulted

in

companies

building
up
equity
We evaluate management
by its positions just at the time that they
showing over a period of time, by have been in the market for unservative debt
structure for the its
public and labor relations, by precedented amounts of new caproaa and no
maturity problems for its financing record and
security- ital. The dilution has been tre-

^rnany years to come.

holder relationship

A second favorable
aspect

Southern picture is

of the

the vast

im-

-

questions,

programs.

In addition to confidence in
earnings and management, prob-

-

ably the next most important factor contributing to high pricecourse, has stemmed from com- earnings ratios is growth in
per
plete dieselization of all opera- share earnings. The chemical intions. Probably just as important
dustry has been very successful in
is

the

comprehensive

provement

and

that

program

im-

yard

modernization

got

under

way

a

couple of years ago and is still
going forward. As the full benefits
from the yard program have not
as yet been realized
(one of the
largest projects is still being constructed) it is felt in most quarthat

ters

n

continue

-fnrthor

in the

crraHnol

increasing its

per

share earnings,

Mainly because of this,
normally sell at

stocks
ratio

the

than do

that the industry

chemical

a higher
Obviously
territory has

utilities.

growth of your

hgg

as a whole
hy this financial
During
these
years
of

been

policy.

hurt

heavy

common stock offerings, the
industry
has
been faced
with
rapidly rising costs which have
reduced earnings for most com-

Ponies below the allowable rate
„re.t.urn- During these years the
inflationary psychology has held
utility price-earnings ratios to

the

low levels by all past standards,

growth of your earnings and upon
the investors attitude toward your

We nave, therefore, seen abnormally large sales of common
stocks at prices based on relative-

a

tremendous

stock.

rwrlnrt

future to benefit

mendous and has certainly
retarded the trend of earnings. I

-

provement in operating efficiency
in recent years. Part of
this, of

influence

on

Fortunately most of
;

attract

you are
:—

*.

lv

Inw

parnings

which

flow

institutional

will

maintain

Any

his

the

demand

of

trustee

include

purchases

stability

funds

utilities
of

because

their

of

of

hands

earnings.

savings

the

common

banks

have

entered

stock market recent¬

ly for the first time. There is not
a

week that goes by

Set

request

a

-

,

hnvp

hppn

new

maintenance machinery

being developed.

the

the

long-term

are

time

same

somewhat

utilities

outlook,

favorite

a

with

At

them.

offerings

the

been

have

reduced. *

of

factor is the

Another favorable
.

relationship between

common

stock and bond yields.

all

operating ratio last

d™n

77.0%

to
as

opening
year,
nues

been
nance

67.7%

year

compared

recently
months

despite
fell

over-

as

of

the

nearly

1947.
the

fact

with

In the
current

that

12%,

was

reve-

ttiere

has

said

about

I do not

capitalization

care

talization

as

much about capi-

ratios

utility stock

as

ratios,

when

I

do

I

buy

a

about what

is going to happen to those ratios
after ,the stock
has been pur-

chased.

I

dislike

being

a

holder

no

work.

As

matter of

fact,

maintenance outlays for the

two

months

were

a

roughly




$600,000

any

substantial amount. Unfortu-

nately

Electric

the

SEC

case

in

came

the
up

El

Paso

with

a

that

I

have

gotten

would

there is

market

*^30

the yield on ^utility stocks

s

averaged about 130% of the yield
bonds.

on

During World War II

went as high as 400% of
yields, but in 1946 they de¬
clined to 120%. They are now at
the 165%
level.
With the bond

they

market

particularly strong at the

present time, there, is an upward
,

utility

pressure on

•

stock

.common

prices.

■-

eiL

®

vni1
'

by

p

1

„in,L,
clauses

a1
fuel

many

is

mate

on

After
^

also

having a favorable
utility' security prices.
twenty years of punitive

effect
^

„YV^

^

ac^ons fr0m

Washington

_

of

The

investor is very much

influ-

1

Phenomena

or

into

the

poor

earnings

the. first

for

have

continuance

a

decline

months

reported
could

Either

business

summer

declining;
has oc-

times in the past, it is

.

usual.
the

quarter

dampening
spring.

a

effect

the market this

on

,

;

A second unfavorable factor is
the market level of
utility stocks

relative

to

other

charts show that

stocks.

Our

only during brief

periods in the last twenty-fivq
have utility stocks sold at

years

stocks

that

price-earnings

selling

are

low ratios.

The

at historically
for this is

reason

investors have confidence in

earnings particularly be¬
they cannot be deemed to

inflated.

trial

and

In

contrast, indus¬
" earnings
are
by the large

railroad

-

-

considered

-

0~

inflated

and therefore

program

could

be' substantial

switching
trial

are

from

investor

utility to
stocks

common

indus¬

because

of
the greater profit potential of the
latter.

Another
the

unfavorable

factor

is

possibility of renewed investor
about

concern

effect

inflation

and

its

utility earnings.
This
being an election year, there is
real danger of Congress'
granting
on

too many tax reductions with the
result that the
d
t wil, b
f

out of balance.

With prospects of
financing, investor

deficit

psychology could change to
of inflation.
" ,

one

I

tinuance

of

these

favorable

fac¬

tors beyond next November.

If
__

all

of

this

__

sounds

.

like

3

^

commissions.

Probably the
:

i

?

now

:*$'
guess what the market will do*
mosi^avorable de- My guess, for what it is worth, is

n.

.•

.

...ni

.

earnings.

We have kept, since

weekly

.....

chart

a

stock

prices relative • to earnings.

the
A

adverse
few

utility

on

dramatic-

jfefects

vdars^go

of

an

war

depressed

tially.

it will not be substantial.

this

Bonds

rise

will

continue

at

its

re-

cent pace, and I believe that these
securities are close to their peak
for many
j eXpect

which

years hence. However,
this peak to be protracted

wm

give

you

ample

p0rtunity to sell this type of
rurjtv

at

favorable

opse-

nrire<?

fa^iable prices.

Indo-

John B.

utility Values substan-

Today there is the general

—

and preferred stocks have had an
amazingly sharp rise over the past
n|ne months. I do not believe that

prlce earnmSs ratios, une of tne tears. A tew year^go an inao
most important of these is the China development- -would have
regulatory climate in the territory,

for

hedged forecast of the market
outlook for utility stocks, it is so
noj. entirely bad. It^is hoped that intended.
There are many cross
this sentiment will finally permecurrents in the picture which
ate to the staffs 0f the regulatory make
it unusually difficult to
we

.

the

rising

private industry is

hear that the

fears

of

been

had

even

Gne

ratios

has

the last six months just at a time
that business has been

commodity
Finally investor attention may
clauses, still the investor worried -®00*1
focused on next Novemabout the effect of rising costs on
congressional elections,
utility earnings. ^ With this fear While political factors now appear
favorable
as
measured
by the
moderating, investors are willing
standards of the last twenty
to appraise your timings at
years,
there may be some anxiety over
higher values.
^the coming months as to the con¬
The change in th£ political cli¬
and

ally

earnines

the next few months.

over

market

lar£e

influencing

factors

rim-'
stork

-

,wio-n™o™

The

turn

other

believe

our

eenerallv weak

a

depression is a thing of the past,
they
will
be
attracted
to
the
cheaper stocks. At this point there

the

on

high side of normal. From 1926
to mid-1931, utility" stocks actu¬
ally1 yielded less" -than utility
bonds, and in 1929 their yield was
only 40% of bond-yields. In the

This chart shows very

to

utilitv

l'

good chance of

a

ning intG

t?en4

a

market

suffer

lationship to bond yields is

favorite thesis off my chest I will

,

declining

stocks

Although defense

1929,
my

and with

erallv

The

^

vulnerable to a business recession,
Once the investing public becomes
convinced that the long advertised

on

Climate

^

common stock yields may seem
tow to you based on the standards
?*.*, past *ew
their re-

almost to

mediate postwar period. The

w

be

and to promote
appliances. However,

Regulatory

trend
should

''mfehTtiirrT wmT unH^p

market

these conditions

utility

financial policy

30%, a good six points seeking
to
build
its
common nioney.
below the industry
average, and equity position, dilutes its earncompared with the company's own ings and fails to show a strong
ratio of around 39% in the im- trend in earnings. Much has been
Now

compa-

their

business

continue to slide, utility
earnings
would not be immune to the down
turn.
Moreover, the whole stock

cause

Siock-Bond Yield Ratios

industry

sale

your

If

such favorable

such institution. Because of

some

some

arrested

ratios as now exist. On the other
hand, industrial and railroad

from

f°r bonds, but the difference in pn stock market values than does
the cost of money on a triple A nm™ritv or degression Utilitv
can have an
bond as compared with that of a
'
p
y
J'
As a measure of the
progress al- important
effect on
per
share single A bond is so small as to be stocks are particmgiy vuineraoie
ready achieved, the transportation earnings. A company that seeks a insignificant as compared with the to war fears because of the effect
ratio last year had been reduced blue
chip rating by constantly higher
cost of common stock of abnormally hea-v^y tax burdens
from

has

earnings.

advice

for

.

experiencing. So

that I do not

bond

common

carried

6%

stocks had 7%

magic

entered

book1 value

deficit for their

rates

of

r

continuing

certainly

companies

industry got through the 1932 depression without too many bankwho feel that ruptcies of operating companies,
ties may no longer be considered this has a
tremendous influence It takes a long drawn out depresany problem. In the last 10 years on price-earnings ratios and some sion such as 1932 with the douor
so
Southern has retired more label this the number one
factor bling up of families to seriously
than $100 million of non-equip- to be
investigated when contem- affect utility earnings, and it is
ment debt, eliminating all maturiplating an investment. We like a extremely doubtful that with
ties prior to 1956 and reducing
management that is approachable present political thinking we will
the amount falling
due in that and who will give us an honest ever have another 1932. Moreyear to $59,286,P00 as of the end answer to an honest
question. We over, on today's standard of ac-

analysts
the

the

into

stocks.

with extremely volatile loads may

conservative. After all, the utility

Confidence in Management

u

*

the

satisfactory
Obviously most

to

minimum,

need

it

nies

at

.u

Some of the large New York life
insurance companies as
well as

minimum

a

now

j^y earnings, but for

not

the

—

this

are

" '
this

^

among

capital structure.
utilities

based

mar-

we

While

*

will

of 50%

ferred

many

stock

common

that

far it has not been severe
enough
to have an adverse effect on
util-

include

formula

the

turn

now

the unfavorable side of the
picture is the business letdown

curred

.

to this interest-during-construction policy.
ing loads

Railway
thing, most

one

in the utility

,

stock

and will

ones

Unfavorable Factors

,rs,

On

ket. On the favorable side I would

Utility Common Stocks

can be traced to
heavy maintenance out-

Transportation

believe I have discussed ' the

road and its securities I

acteristics of the territory and the

which

the 12 months ended October 1953
net

reflects^ current conditions?

funds

consider-

a

fair rate base

a

point to the strong growth char-

are

mon

ment

with an extra of
the first quarter of

in

The Outlook foi Electric

lays, which in themselves seem
proof that railroad management is

number

$2.50

a

the

the Commission interfere
with managerial prerogatives? I
have seen utilities lose financial
standing
because
of
too
strict
regulatory practices. There is not
much that you can do about this
other than attempt to educate
those charged with regulation and
to stand up for your rights.
"
Although there are other factors
influencing price-earnings ratios,

for

a

mie degree this
continued

on

a

earlier but to

year

now

year.

those

,

fading. It is true that in almost
every instance
railroad earnings
have been running below those of
a

up

Continued jrom page 7

good
job
with
respect to expense control in re¬
collapse in

built

comparisons from tential.
~
7
'■ :.
■ ■

revenue

large majority of the railroad

a

managements.

been

such

t^match the toward the

meetings this opinion is shared by

have

that
Does

Will

Thursday, April 22, 1954

...

John B.

Richardson

Richardson, Partner in

ybdecne
the treatment that a belief that such

^lopments will James Richardson & Sons, Ca^..character and nadian investment firm, passed
.

,.

utility receives from the regula-

be

tory body. Is it allowed

market values

a

fair

re-

kept

local

are;-unaffected.

away

.

.

,

following

a

,.

brief illness.

,

Number 5318.. .The Commercial and Financial Chronicle

Volume 179

(1819)

The

following statistical tabulations

latest week

Business
AMERICAN

IRON

AND

week

Activity

STEEL

Latest

Month

Ago

'

Indicated steel

Equivalent to—

AMERICAN

68.1

101.0

§1,634,000

*1,622,000

1,624,000

2,276,000

each)

output—daily

(bbls. of J ?

average

stills—daily averagr(bbls.)—
(hbls.)
Kerosene output (bbls.)
Distillate fuel oil output (bbls.).

Gasoline

6,458,300
6,883,000

6,267,750

23,313,000

22,098,000

2,233,000

2,764,000

2,545,000

10.058,000

10,116,000

9,722,000
8,723,000

6,567,550
i §6,759,000

6,486,250

22,898,000

22,858,000

Apr. 10
Apr. 10
Apr. lo

—Apr. 10

6,761,000 J

2,369,000

_

9,399,000

*

_.

.

Residual fuel oil output

(bbls.)

Stocks at refineries, bulk
Finished

and unfinished

Kerosene

(bbls.)

at—

oil

Distillate fuel

8,451,000

_Apr. 10

gasoline

(bbls.)

—

at

8,362,000

179,729,000

179,674,000

179,583,000

17,447,000

19,020,000

Apr. 10

57,772,000

59,551,000

Apr. 10

43,833,000

43,718,000

65,574,000
45,973,000

freight loaded (number of cars)
Apr. 10
freight received from connections (no. of cars)—Apr. 10

606,790

599,302

609,883

581,291

580,366

595,585

Residual

fuel

ASSOCIATION
Revenue
Revenue

(bbls.) at

oil

(bbls.)

at

;

PETROLEUM

,

^

*:

1

CONSTRUCTION

—

645,745

Apr. 15

$275,.OOP,000

184,370,000

115,621,000

148,335,000

114,229,000

129,913,000

99,763,000

126,666,000

Apr. 15

92,817,000

105,861,000

92,216,000

95,002,000

Apr. 15

OUTPUT

21,412,000

24,052,000

7,547,000

31,664,000'

Apr. 10

and lignite

(tone)

,660,000

*5,900,000

6,940,000

8,485,000

—Apr. 10

—

501,000

465,000

488,000

:

SALES

STORE

STSTEM-^-1947^49

output

FAILURES

Apr. 10

113

Apr. 17

Apr. 15

100

=

i

—

AVERAGE

NEW

_„

'*

103

92

97

,345,000

8,396,000

8,572,000

8,113,000

198

246

<

(in

kwh.)

000

INDUSTRIAL)

AND

—

DUN

&

_;

'

243

steel

Pig iron

(per gross

lb.)

(per

4.634c

(per gross ton)

4.634c
$55.59

'

4.634c

$56.59

—Apr. 13
Apr. 13
Apr. 13

j.

ton)

$56.59

28,424,000

$25.17

$24.50

$23.33

YORK—As

71,186

68,020

83,485

70,009
201,171

66,738
199,974

77,285
99,864

37,209

28,943

54,524

OUT¬

RESERVE

March

of

BANK

31:

97,231,000

10,434,000
60,471,000

$237,426,000
110,412,000
8,914.000
39,942,000

46,600,000

44,031,000

38,600,000

39,357,000

41,453,000

32,336,000

$580,160,000

$544,601,000

$467,630,000

198

$247,401,000

$237,821,000

139,367,000
10,204,000

150,585,000

•

...

on

-_

>1
,

,

gdbds stored and shipped between

foreign countries

;

i.

FAdLURE S—D U N

Wholesale

$42.75

&

BRADSTREET,

Commercial

Apr. 14

29.700c

29.700c

29.700c

Apr. 14

29.550c

29.475c

29.275c

33.275c

Apr. 14

97.500c

94.500c

92.500c

98.500c

13.750c

13.000c

154

87

<76

449

361

143

109

•85

87

74

63

1,102

926

739

$15,359,000

$23,043,000

5,117,000

4,538,000
11,770,000
4,082,000

:

13.000c

—

service

number

30.750c

Export

207

123

551

—

number

Retail number

Construction number

Domestic refinery at

at—
Straits tin (New York) at
Lead (New York) at
Lead

refinery

(St.

Zinc

Louis)

Apr. 14

at

(East St. Louis)

14.000c

Apr. 14

13.800c

13.550c

12.800c

10.250c

10.250c

9:750c

;

100.33

100.09

99.99

U.

S.

Government

Average

111.07

Manufacturing

Construction
Commercial

(

Bonds

corporate—

Apr. 20

111.88

>

laibillties

Wholesale liabilities

93.54

•

number

Retail liabilities

11.000c

Apr. 20

at

Total

12.800c

—Apr. 14

—

MOODY'S BOND PRICES DAILY AVERAGES:

Total

service

Group.

108.70
107.44

U.

110.52

110.34

104.83

COMMERCE

104.66

104.48

101.64

.—Apr. 2o

109.60

109.79

109.06

110.88

110.70

104.83

Apr. 20

112.37

V- 112.37

112.56

Apr. 20

2.47

:.—

,

;

r

103.16

MOODY'S BOND YIELD DAILY AVERAGES:
U. S.

Government Bonds—.

CASH DIVIDENDS—PUBLICLY
S.

CORPORATIONS

-

'i.K

2.50

2.97

3.12

20 '

2.49
3.11

3.12

2.85

2.85

3.24

3.00

of

Group

COKE

(BUREAU

2.99

3.01

3.31

3.15

3.46

Oven

3.47

3.43

3.65

3.18

3.12

Group—

Apr. 20

COMMODITY

MOODY'S

NATIONAL

INDEX

PAPERBOARD

Orders received

Apr. 20

3.22
'•

v

3.13'

3.52
:

3.04
.

Production

(net

coke

Oven coke

3.04

3.03

3.27

440.0

434.3

431.3

416.4

Apr. 10

229,743

Apr. 10

(tons)
Percentage of activity
Unfilled orders (tons) at end of period——

lignite

OF

(000's
$689,500

$181,300

<

30,940,000

__

29,430,000

36,566,000

2,171,000

(net tons)

2,354,000

2,284,000

242,573

298,123

253,105

223,165

225,519

243,388

235,635

Apr. 10

89

89

91

90

Apr. lo

413,245

424,943

410,285

554,127

Apr. 16

109.16

•*108.12

107.92

107.10

*

tons)

(net

MINES)—Month

tons)

of

Feb.:

5,812,426
5,646,745

65,422

165,681

458,965

2,756,938

2,787,141

1,995,003

81,630

♦74,428

117,546

103,496

101,825
112,016

95,795

*89,017

133,462

125,759

(net tons)

118,417

55,807

109

115

—

end of month

at

6,140,075
5,681,110

4,886,716
4,821,294

—

tons)

(net

stock

COPPER

(net

tons)

.

INSTITUTE—For

month

of

March:

Copper production in U. S. A.—
Crude

U.

2,000

pounds)

(tons of 2,000 pounds)

Deliveries
In

of

(tons

Refined

(tons)

Production

DEPT.

3.46

V

ASSOCIATION:

OF

Beehive coke

3.12 '

—Apr. 20

S.

February

March:

Pennsylvania anthracite

3.19'

Apr. 20 '

Group

Utilities

Industrials

of

(BUREAU OF MINES)—Month

3.14
'

Public

.1,387,000

$31,082,000

$244,000

COAL OUTPUT

3.47

3.15

Railroad

4,341,000

$47,774,000

3.42

2.85

——Apr.

i_____.

3,506,000

REPORTED BY
U.

—

Month

—

Bituminous coal and

—

corporate.

Average

3,553,000"
10,423,000
3,506,000

103.80

110.88

$12,213,000
<

$57,280,000

:

omitted)

Apr. 20

:

liabilities^

105.52

116.02
112.93

104.66

Industrials

110.88

116.02

113.31

110.34

Group
I—
Public Utilities Group—

7,255,000

__

liabilities

113.12

Railroad

26,043,000

liabilities

116.02

:

(tons of

(tons).

Manufacturing number

PRICES (E. & M. J. QUOTATIONS):
Electrolytic copper—

„

28,117,000

267,935,000
8,891,000

INC.—Month of March:

4.376c
$55.26

METAL

v

16,*078,00p>

277,992,000

INC.—Month of

shipments

BUSINESS

COMPOSITE PRICES:

Finished

;

19,068,0001

16,191,000

,

..-165
1

'

20,617,000,
37,000

278,675,000

—___•_

ACCEPTANCES

Total

'

Scrap steel

203,214,000

export

Domestic warehouse credits
Dollar exchange

INSTITUTE:

(COMMERCIAL

AGE

19,141,000

—

Domestic

RESERVE

INDEX—FEDERAL

BRADSTREET, INC
IRON

*

Exports

448,000

-

Electric

34;000
16,300;000

^

STANDING—FEDERAL

BtfSed
EDISON ELECTRIC

DOLLAR

Imports

*».'

.

223,868,000
*

and

Unfilled .orders at end of period
BANKERS'

"

DEPARTMENT

21,709,000
50,000
18;547,000

,

-—

Pennsylvania anthracite (tons)

-

OF

BUREAU OF MINES):

(U. S.

Bituminous coal

"

$215,384,000

■"

Apr. 15
.__

municipal.

Federal
COAL

$314,283,000

$306,562,000
192,333,000

Apr. 15

_____

Public construction
State and

193,378,000

____

zinc smelter output all grades
2,000 pounds)
Shipments (tons of 2,000 pounds).,
'"St.ockg.a.t end of period (tons.)

^

construction

Private

215,137,000

'Increase all stock (barrels)—

ENGINEERING

construction^

S.

214,810,000
21,323,000

;

domestic

AMERICAN ZINC INSTITUTE,
March:

721,139

NEWS-RECORD:.
U.

9,336

AMERICAN RAILROADS:

OF

ENGINEERING

Total

92,649

39,319

193,453,000

;

.Slab
CIVIL

116,247

42,735

Refined products imports (barrels)consumption
(barrels)

40,663,000

Ago

110,483

_

Indicated

60.693,000

Tear

Month

INSTITUTE—Month

Benzol output (barrels)--—,
Crude oil imports (barrels)

i
*

of that date:

Previoua

primary aluminum in the U. S.

—

18,685,000

j

MINES):

Domestic crude oil output (barrels)
Natural gasoline output (barrels)

159,893,000

17,269,000

Apr. 10
Apr. 10

-

,

8,025,000

OF

of January:
?
Total domestic production (barrels of 42 gal¬
lons each)

6,705,000

terminals, in transit, in pipe lines—

'

J

AMERICAN

^

output

.

>

(BUREAU

(in short tons)—Month of February:
Stocks of aluminum (short tons) end of Feb.

v

Apr. lo

:

—

Crude runs to

*

ALUMINUM

Production of

(net tons).

condensate

and

42 gallons
a

"*68.0

PETROLEUM INSTITUTE:

oil

Crude

and castings

are as

Month

Ago

§68.5

r

,

'

Steel ingots

'

.Apr. 25

—

in cases of quotations,

or,

*

either for the

are

Latest

Apr. 25

operations (percent of capacity)

that date,

on

production and other figures for the

cover

Dates shown in first column

Year

ft

;

Week

Week

INSTITUTE:

month ended

or

Previous

.

month available.

or

47

fabricators—

to

S.

A.

of 2,000

(tons

pounds)

■

Refined
of

stocks at end of period

copper

2,000

(tons

pounds)—-

OIL, PAINT AND DRUG REPORTER PRICE INDEX—
1949

AVERAGE

=

100

SERVE

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

.

DEALERS

SPECIALISTS

AND

ON

N.

Y.

DEPARTMENT

STORE

SALES

SYSTEM—1947-49

(FEDERAL

RE¬

100)—

Average

Month of March:

STOCK

*

EXCHANGE

—

SECURITIES

Adjusted

EXCHANGE COMMISSION:

Without seasonal

Odd-lot sales by dealers (customers' purchases) t—
Number of shares

Apr.

Dollar value

Odd-lot purchases by dealers (customers* sales) t—
Number of shares—Total sales
Customers'

Dollar

927,029

$38,843,567

$46,695,026

$40,150,266

1,001,471

904,939

l

990,361

9,234

8,213

7,347

7,517

992,237

896,726

983,014

902,847

$38,079,679

$42,748,729

$36,563,744

3

$42,527,514

by dealers—

Number of shares—Total sales

Apr.

3

309,150

322,810

322",810

309,150

299,090

29~9~656

279,970

279,970

by dealers—
Apr.

-

TOTAL ROUND-LOT STOCK SALES

3

316,360

253,710

301,460

278,550

STOCK
EXCHANGE AND" ROUND-LOT STOCK TRANSACTIONS
FOR ACCOUNT

OF

MEMBERS

ON THE N.

Y.

Total Round-lot sales-

Other

315,520

320,360

299,600

385,390

9,272,880

8.937,540

6,124,870

—„Mar. 27

Total sales

BOUND-LOT

TRANSACTIONS

FOR

ACCOUNT

EARNINGS

AVERAGE

9,588,400

9,257,900

6,424,470

9,731,330
10,116,720

103

ESTIMATE

U.

—

.DEPT.

S.

1;

.

1

,

,

♦$70.88

$71.93

75.81

♦76.38

77.52

63.63

*63.63

63.60

39.4

*39.6

41.1

39.9

♦40.2

41.9

38.8

♦38.8

40.0

$1.79

$1.79

$1.75

$70.53
1

goods

Nondurable

.

OF
Y

Weekly earnings—
All manufacturing
Durable

'

HOURS—WEEKLY

.___

goods

—

All

manufacturing
Durable goods
Nondurable

—

1

goods

—

___

Hourly earnings—
All

manufacturing
Durable goods

—

1.90

1.85

1.64

1.64

1.59

1.90

„

goods

—_

ERNORS

OF

THE

FEDERAL

!

RESERVE

SYSTEM—1947-49=100—Month of

March:
123

135

♦126

133

106.4

109.1

119.4

531,529

549,946

583,001

444,173

453,378

486,071

87,030

96,167

96,740

326

—

♦124

125

Seasonally adjusted
Unadjusted

MEM¬

OF

AND

INDUSTRIAL PRODUCTION—BOARD OF GOV¬

Mar. 27
Mar. 27

sales

85

'///•',

FACTORY

Nondurable

(SHARES):

Short sales

r

Hours—

3

Apr.

sales

3

Apr.

Short sales

Round-lot purchases
Number of shares

910,364

3
3

Apr.

Bales

3

91

adjustment

LABOR—Month of March:

Apr.

—

value

Other

988,111

$39,653,869

Apr.

Customers' other sales
Round-lot

876,370

3

Apr.

sales

short

980,698

—Apr.

—

3

107

for seasonal variations

401

190

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
Transactions of specialists
Total purchases

,

In stocks in which registered—

INTERSTATE COMMERCE COMMISSION—
Mar. 27

1,055,270

972,630

691,160

1,010,130

Short sales

Mar. 27

156,820

162,390

135,140

179,380

Other

Mar. 27

959,280

766,890

481,080

—Mar. 27

1,116,100

929,280

616,220

1,040,050

—Mar. 27

343,730

291,230

190,780

335,360

Total sales
Other transactions initiated
Total

on

Other

Other

Employment

off the

at

middle

of

12,900

290,230

Number

of

161,290

323,130

Number

of

motor

trucks

of

motor

39,040

23,510

232,902
31,450

74,090

356,877

234,181

425,760

395,917

265,631

499,850

Mar. 27

NEW
=

1,657,253

1,727,394

1,114,842

1,777,355

Mar. 27

SERIES

—

U.

S.

DEPT.

214,330

179,490

1,631,680

1,391,187

863,651

1,576,160

Mar. 27

:

193,230

Mar. 27

—

(1947-49

1,830,910

1,605,517

1,043,141

1,863,030

286,870

OF

Meats
«ill

foods

110.9

110.6

*100.2

98.8

98.0

-Apr. 13

105.2
93.9

♦Revised

lhan

farm and

as

foods

93.9

92.0

88.5

Apr. 13

114.5

*114.5

114.3

113.3

—

([Includes 580,000 barrels of foreign crude runs,
against the Jan. 1, 1953 basis of 117.547,470 tons.

figure.

1954,

(Number of orders not reported since




CEMENT

(BUREAU

OF

MINES)—

Month of February:

Production

•

16,895,000
15,202,000

Stocks

(at end

of month—barrels*.

:

U.

AND

11,143,000

17,325,000
14,155,000

25,857,000

24,464.000

78%

Capacity used
TREASURY MARKET
RECT

17,769,000

27,562,000

(barrels)

TRANSACTIONS

GUARANTEED

74%

IN DI¬

SECURITIES

S. A.—Month of March:

$22,437,550

$4,008,550
$485,200

109.5

—

other

_____

Net purchases

111.0

100.3

commodities

of Jan. 1,

Apr. 13

products

Processed

J
^

Net sales

commodities

Farm

PORTLAND

OF

100):

Commodity Group—
All

cars

Shipments from mills (barrels)

account of members—

\

passenger

431,865

328,400

1

PRICES,

—

393,193

328,394

351,910

purchases

LABOR

280,320

362,900

Mar. 27

Total sales

MANU¬

February:

coaches

Mar. 27

sales

of

FROM

;

148,390

.-—Mar. 27

Short sales

WHOLESALE

S.—AUTOMOBILE

Number

sales

SALES

ASSN.—Month

of vehicles

12,900

sales

Other

U.

FACTURERS
Total number

267,420

——Mar. 27

Total round-lot transactions for

Total

32,900

IN

FACTORY

18,900

floor—

purchases

Other

VEHICLE

344,000

Mar. 27

Short sales

Total

MOTOR

Mar. 27
.

transactions initiated

Total

,

Railway

(1935-39 average=100l___.

Mar. 27

sales

Total sales

..

of

March

PLANTS

the floor—

purchases

Short sales

-

Index

860,170

sales

§Based

on

*105.1

new

introduction, of Monthly Investment Plan

annual

104.7

103.4

capacity of $124,330,410 tons

UNITED

STATES

GROSS

DEBT

DIRECT

AND

GUARANTEED—(000's omitted):

$264,536,057
6,908,220

$270,312,455
6,354,530

As of March 31

General

fund balance

$274,858,550
4,988,045

$263,957,925

$269,870,505 $257,627,837
2.416%
2.385%

as

Net

debt

j.

Computed annual rate

-

2.394%

M

40

The Commercial and Financial Chronicle

(1320)

Continued

from

Foreign Trade and United States
investments

by

overseas

granting tax concessions and rea-sonable
government
guarantees
against non-business risks such as
expropriation and violent changes
in exchange rates. But even with
these devices of encouragement,
if more than $500
million of private funds annually,
in addition to the present outflow
•of investment capital, can be en¬
Jt is doubtful

Even with

so

capital

the

of

much

so

the

of

world, every American business¬

his

in

man,

shudders.

sensible tariff pol¬

purchase policy,
whether we can maintain the present level of our ex¬
ports without giving some foreign

our

•off-shore miltary
I question

economic

aid.

Don't forget since

-mid-1946

our

official grants and
have amounted to

abroad

loans

billion." It is a drastic
step to cut out all foreign aid to
Europe, as we are about to do
$44

some

military

off-shore

for

j(except

when

particularly

"purchasing),

■Congress shows no real signs of
doing anything about lowering
the tariff.

My plea is for American busi¬
to learn more about the

nessmen

interdependence of our domestic
prosperity and world trade, and to
decide
for
themselves what is
really

policy for

best

the

security and prosperity.
Many businessmen, for example,
that the peril-point and

assume

escape-clause provisions of the
Trade Agreements
Act are not
sabotaging tariff adjustment, but
of

them

that

know

to

seem

single exception of the
agreement with Venezuela,

the

with

trade

major reductions in United
-States tariffs
have been made

;no

since

provision

peril-point

the

went into effect back

present trade policies are pushing
the world toward intensified eco¬

and

nationalism

nomic

tinued

political

This trend if long con¬

division.

only lead to a reduc¬

can

standards, in¬
creased tensions, and finally war.
If
trade doesn't cross borders,
eventually soldiers will.
The people the world over want
a better life.
The mind of each is
tion in world living

expectations of plenty.
Each has a high standard of an¬
ticipation, and, if disappointed,
each is still ready to flirt with the
devil.
colored by

Complex as the problems are,
basic key to a solution is a

to

us

follow in the interest of our own

few

for

the

potential

units

of

dwelling
to

structed and

fGfiPU

200 000

over

vL lvf-

1 fftSn

^iS? i0^'

u

were in

sistent y, since

1950, accounted for

ai"w4
and fi 1 07
61%

little

this

that

owner-occupied
1960 will substantially ex-

stability and a toler¬
of living for most

reasonable

able

standard

that it

of

will

Chairman
House
Banking

Housing Act of 1954

new

produced
ing

in

starts and private construction

expenditures

which

units

of

1954

than

period in 1953 dur-

same

1,100,000

over

year

f

and

Homing Prospects for

What
A

1954 and Thereafter
development

as

programs)."

Early indications of new house¬
hold formations for the ten-year
period from 1950 to 1960 were that
.such formations would be at the
.rate of somewhere between 6M>
and 7V2

to

"650

A

million

Census

average

or an

thousand

750

per

of

annum.

release

Bureau

As

household

were

Newly revised estimates

950,000.

to indicate an annual aver¬

;,seem

increase in household forma¬
tions of 915,000 to July, 1955, and
.an
800,000 annual increase from
age

then until 1960.
annual

.an

This would

average

1954 to 1958 of

mean

increase from

834,500

hold formations.
In

to

Subcommittee

VA

and

Programs

FHA

on

and

Opera¬

tions, President's Advisory Com¬
on Housing Policies, Allen

mittee

:H.

Thornton,

subcommittee

staff

.advisor, said:
"This

■

annual increase
households constitutes
the major part of the requirement
for additional dwelling units,
of

average

834,500

which it is estimated will be pro¬

for

vided

occupancy

during that

time."
The
a

period to decrease. However,

that it

cated

the
range of average annual residen¬
tial production during the 1954-

ment

994,500

1958

to

1,044,500

units

as

period."

minimum

annum

"will

of
be

60.000

units

required

as

per

re¬

placements of units destroyed by
catastrophe, other hazards,. and




and

terms

Urban Redevelopment

These
were

estimates

made "without

assumptions
new

analyses
including any

to the

as

construction

amount of

which

will

be

in

while

livability to

funds in the
$6>1 billion in

up

there

market

for

is

the

to

still

housing,

fact that

it

is

considerably

buyers' market rather than
ers'.

to finance

A

stimulus

to

the

a

For
ments

in

instance, if mortgage repay¬
were to drop to $12 billion

1954-55

there

would

be

re¬

quired $8 billion in newB funds to
sustain gross mortgage lending in
the $20,000 and under classifica¬
tion at $20 billion.
An

interesting

figure

in

family dwellings in 1953
800.

If

required,
1954

million

one

con¬

was

homes

produced

and

$7,-

were

sold

in

with

mortgages On the 1953
average
basis, the mortgage fi¬
nancing for these types of housing
units
to

would

this

be

$7,800 million. If

figure

we add the possi¬
bility of 100,000 privately started
multi-family units (in 1953 there
were
122,600 units produced, of
which 35,500 were public housing,
leaving 87,100 as private starts)
with mortgage financing of $10,-

unit, or a total of $1 bil¬
the mortgage financing of
1,100,000 new residential units in
1954 would amount to $8,800 mil¬

Production of

jarger
gize

the average
varied considerably, the proportion of FHA

l

1,200,000

new

nancing.

jn these years
j mortgage loan

finanrin/was

VA

anH

suhstanti-

g* ^ferent anl tteVrke

com -

position of houses sold was chang¬

F

„

$91/2
All

billion

.

in

fi¬

mortgage

factors

being considered, it
new
mortgage
requirements, net of rein¬

would

that

seem

money

vestments

housing

z*

where

of

During 1952 gross mortgage
lending for housing units as re- billion,

repayments,
for
1954 will be some¬

in

the

in

of $5

range

to

$7

,

non-farm

by

fleeted

of
to

mortgage

What About

$18

The net increase in mort-

gage debt amounted

and my guess would be
somewhere around $5,800 million,

less

$20,000 or
approximately

to $6 3 billion

1954?

Any projection of housing pros¬
pects must obviously be consid¬
ered in the light of present eco¬

and $11.7 billion were apparent
mortgage retirements accounted
f?r through amortization and partial and full repayments during

nomic conditions and contemplate
no
substantial change in the in¬

^le Year'

nance

of

bility

particularly

In

1953

mortgage

gross

lend-

ternational situation

mainte¬

and

reasonably high level
of employment and economic sta¬
a

ing of $20 billion (based upon
non-farm mortgage recordings of

wages.

$20,000 or less) required about
$6.3 billion in new money, and

indication of the

increased from $11.7 billion in
1952 to $13.2 billion in 1953. With

sell-

the rate of partial and full repay-

demand

housing construc¬

new

tion.

to

a

now

mortgage

residential units would require up

was

year

increasing amortization payments, and assuming that

substantial

a

of

rates

earher

stimulate

commitments,

mortgage
add

to

seem

and

providing

are

homes

$13.2 billion was provided through
sales appeal. These factors, coupled apparent mortgage retirements. It
with the recent trend of builders will be noted that the figure of
requiring the maximum favorable apparent
mortgage
retirements

constantly

remains

ments

the

same

in

as

in prices

and

If the first quarter of 1954 is any
new

construction

trend for the balance of the year,
1954 should be as good as if not

better

high

than

was

tures

for

A

record

new

construction

new

amounting
this

1953.

established for expendi¬

first

$7.3

to

quarter

billion
of

during

1954.

The

previous record established in the
first

quarter

of

1953

was

$7,175

million.

1953, it might be safe to draw
New work on residential build¬
ment or neighborhood rehabilita¬
by producing houses in the lower- the assumption that a figure of
ing in March, 1954, rose by 11%
tion programs."
Also, in the cov¬ priced six to eight thousand dollar $15 billion would not be out of
over
February to $854 million, or
ering memorandum the subcom¬ sales price field, and in the last line as an estimated amount of
about the
generated

by

urban

redevelop¬

six months there has been

mittee staff advisor stated that:
"It

should

be

looked

emphasized

upon

that

as

forecasts,

al¬

tic in the making of projections.
However,
substantial
variations
are
possible in making the as¬
sumptions which have been neces¬

especially

with

respect

activity by builders in
programming such developments,
In this connection, it may be interesting to note that an estimated
summary price distribution of new
sales housing units started in 1953
indicated that 90.1% were priced
at

$7,000

mand

in

Losses

their

housing

very

units estimated for 1954-55, mortgage

financing

for

these

needs:

March.

1950-July,

from

1_...
'•

.

use,

1950

of

of one-half the

temporary

public

dilapidated during the decade..

350

600

housing

marginal dwelling units added in the 1940s.—

Reconversion of one-fourth the apartment

conversions added in the 1940s

350
450
.

L

11,770
Less

housing

starts,

1950-52

3,620

;

!■

Total

potential housing needs,

1953-60

as

Housing Act of 1954 in

last

year.

many

of

its provisions gives stimulation to
and
gage

construction

provides

benefits

activity

for

mort¬

investors.

The

2,500

*

will become

7,270

250

Removal

outlay

.

disasters

Removal

fine

On the basis of this chart there

years
1950-60

.

1960

monthly bulletin, "Business Con¬
ditions."

same

1954-

With

plus side is

One-fourth the units which

1950-1960, published in
by the Federal Reserve Bank

Chicago

formation,

Dilapidated units in

For purposes of comparison, the
accompanying table is an estimated

of

for

mortgage financing more
1955. Inasmuch as the total number of housing starts in 1953 was plentiful than a year ago and sub¬
over 1,100,000, and mortgage fi- stantially more than six or nine
months ago, there is little doubt
nancing in the non-farm $20,000
that mortgage funds are
readily
or less category amounted to $20
billion, it would seem reasonable available to meet requirements of
new residential
housing. The new
that with the same number of

residential

Replacement

1953

the

retirements

mortgage

(Units in thousands)

of governmental programs."

potential

on

to
Household

of

A further de-

over.

or

factor

economic conditions and the terms

breakdown

in-

an

creased

be

though every effort has been
made to be reasonable and realis¬

sary,

market could, however, be created

needs for

report further indicates that

that builders

"extras" in the form of equip-

in

lion.

takes two to six weeks

now

longer to dispose of houses than
it did a year ago. It was also indimore

of

Market?

of builders insmall minority

sizable number of builders stated

consid¬

was

the attached estimates should not

report dated October, 1953,

a

the

a

indicated "from

other factors

eration, there

house¬

new

which

Oc¬

of

increases

result of this study,

a

included

tober, 1953, estimates that for the
12 months ending April, 1953, ac¬
tual

(except for re¬
and
rehabilitation

reduction

repayments would proportionately
increase the new funds required

number 0f new houses sold in the

billion.

expect sales volume in the 1954-

other demolitions

ing through catastrophe such
earthquake, flood or fire.

Sales

the

dicates that only a
1955

and destruction of existing hous¬

about

recent survey

be ap¬

proximately $5 billion, or—to use
an
outside estimate—possibly $6
billion.
It should,
however, be
pointed out that any substantial

lion,

amounted
The Sales Market

For example,

mortgage

recordings

started.

were

mortgage

would

000 per

higher for the

were

months

three

ing

page

were

units would be
the next year. Hous-

the

in

1954-55

required in 1950 was onsiightly larger than the amount
required in 1952, although the

this

1,400 000

passed,

required

of funds

Committee stated recently that if

the -"Hon to

Do we have
this great oppor¬

funds

the latter. Conversely, the amount

With the

produced

funds

of

units.

f ■

new

Wolcott of the
and
Currency

year.

people everywhere.
see

be

factors

1952.53 required $5.8 bil-

u

potential need geared at approximately 1,100,000 units, there is litunits

other

estimated 950,000 new

sold

produce

can

number

nd

* fmount

housing

the

estimated

result of varia-

a

the

same

Q£

census.

demonstrated

the

„The amQunt

may be
associated with different numbers

.There construction industry has
seems to be no question
that the

of

in

give

tie doubt that at least this number

by sen¬
sible trade
policies and invest¬
ment incentives to private capital
to move the world steadily toward

for

may

will

53.3% indicated in the

incn

1950

funds

number of housing units*
require different amounts of
m0rtgage funds, and conversely a

ODOwe

seems

trend

continue and that
in

| soid/As

ti

the

the 1920s. TViPPP
There

fho 109(1*1

m

doubt

umts

of

basic problem and variations
considered
regarding any

h

of all starts, as against 83%

in

power

presentation

Federaiiy aided and conventional
mortgages, price distribution of

Single family dwellings have con87%

as
in 1953, we could reasonably
estimate that the amount of new

funds required to finance a nection with a
study of required!
given volume of housing depends
mortgage financing is that the
on a number of related factors—
average mortgage
on
new
oneterms 0f financing, proportion of

"

housing units required.

our

excellent

The report states;

?were
fanuly type andunits.
over
multi-family

600,000

Opera-

that

and

ing will apply equally in 1954-55

inn^nnn^ing cateigory Also, 0£

a

ftnn nnn

FHA

on

be

to

in

were

rapidly expanding world trade,
coupled
with stable
currencies
and movement of capital to areas
We have it in

on

the

the

over

re¬

Advisory ComHousing Policies, because

4,700,000 units, of which over 4%-- projection of required
million units were privately con- mortgage financing,

first

first

of 1953

amounted

started

1953,

1953

as

relative types of financ¬

President's

tions
mitte

non-farm

—permanent

for the

Continued from

port to the Subcommittee
VA
Programs and

Ficture

1950—to the end

Since

question, I would like

subcommittee's staff advisor's
and

the

tunity?

in 1948.

Qn

Financing

basis

same
same

market for

to refer again to the Oct. 9,

.

,

and

or

What about mortgage financing
new housing production?.

'

Production

The

the

crying need.

the

for

re-

of

the

middle-aged

are

Having drawn this conclusion,
assuming that the price level
housing remains relatively on

and

it

as

many

category will be about

$20 billion.

experience
great

a

Mortgage Financing

•

much

So

who

that

beyond,

£?PPi?g ,0ff t0 J'000'00,0 or
11S
f e?
year fr°m
1960. inclusive.

1956 to

our

tariff, I fail to see how we can
reasonably continue to press other
countries to lower their barriers
to
trade with each otheip.
Our

our

of

couples

domestic prosperity

our

export trade is to dwindle
sharply.
Unless we are willing to lower
if

own

seem,

indicated

has

production and financing picture,

maintain

even

stimulate

Surprising

may

However, the general opinion indicates a housing need of
somewhere close to 1,200,000 units
in both 1954 and 1955, with a pos-

..

a

and

because

family increase.

year

"let's don't give those
another cent,"

or

three-

houses

Thursday, April 22, 1954

...

and in this

two-bedroom
into

move

riod.

a

foreigners

but it is harder to see how we can

to

four-bedroom

quirements—now, what about the

ports,"

selling

owners

houses

million

one

as

noyed and say, "to hell with im¬

with laws designed to
private foreign invest¬
ment of U. S. capital, and even
with a continuing but tapering

icy,

low

as

which has already been evi—
that of present home

one

denced

of the secondary buyers of the
two-bedroom houses have been

When this

the whole world
It is easy to get an¬

economy sneezes,

average

until 1960 and some
as high as one and a half million
units per annum for the same pe-

interest, must

own

become world-minded.

damn

ticed abroad.

today

are

some

units

much the lead¬
ing industrial nation, we have so
much of the productive capacity,
We

annual

an

potential housing need of approximately 1,175,000 units from July,
1953 to July, 1960.
Many other
estimates
and
projections have
been
made
of housing
requirements

Prosperity—The Siamese Twins
vate

indicated

was

12

page

'MatoU*1 •> «*<"(*<

.*1

—

8,150

are

Housing Prospects for 1954

bright,

and with the better
balance which is at present notice¬
able
between
new
construction

mortgage requirements and avail¬
able mortgage funds to meet such

requirements, this
as

one

of

the

year

most

should end

successful

adequately meeting the n$ed of
better housed America.

in
a

a

(1821)

Number 5318...The Commercial and Financial Chronicle

Volume 179

* INDICATES

Now in

Securities

Acme Industries, Inc., Jackson, Mich.
(5/3)
April 12 filed 50,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Proceeds—For
general corporate purposes.
Underwriter — Baker, Simonds & Co., Detroit, Mich.

^ Aeco Corp., Reno, Nev.
14 (letter of notification)

April

250,000 shares of com¬
mon stock. Price—41 cents per share. Proceeds—To pur¬
chase 30 shares of Sea Shore Oil Co. and for general
corporate

Office—Cheney

purposes.

Reno, Nev.

Bldg.,

Underwriter—None.

stock

(par 50 cents) to be issued upon exercise of

rants.

Price

At par.

—

Proceeds

war¬

For working capital.

—

Underwriter—Granbery, Marache & Co., New York.
•

Allegheny Natural Gas & Oil Corp. (4/26-27)
(letter of notification) 500,000 shares of com¬
mon stock
(par one cent).
Price—60 cents per share.
Proceeds —To drill and complete wells, for improve¬
March 19

ments, to acquire additional oil and/or gas producing and
non-producing properties, leases or interests and for
working capital. Office—Titusville, Pa. Underwriters—
S. B. Cantor Co. and Northeastern Securities Co., both
of New York.

if Allen Products Corp., Silver Spring, Md.
April 14 (letter of notification) 7,500 shares of 6%

cumu¬

lative preferred stock (par $10) and 7,500 shares of com¬
mon

stock

(par

cent) to be offered in units of

one

share of each class of stock.
ceeds—For expenses in

marketing of
13th

Price—$10.01

per

one

unit. Pro¬

connection with production and

golf ball

a

of offering. Pro¬
Underwriter—Hemp¬

the American Stock Exchange at time
ceeds—For advances to subsidiary.

hill, Noyes & Co., New York.

Office—8055
Underwriter—None.

washer

St., Silver Spring, Md.

Allied Products Corp.,

device.

Detroit, Mich.

April 6 filed 65,000 shares of

(4/27)

stock

common

(par $5).

Price—To be related to the market price of the stock on

preferred stock (par $100, expected to carry a dividend
rate between 3%% and 4*4%). Price—To be supplied
by amendment. Proceeds—From sale of stock,
with
to

together

proceeds from sale of $24,000,000 of 3%% notes
firms, to repay bank loans. Underwriter—

insurance

(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For working capital, etc.
Office—20 Broad St., New
March 22

York, N. Y. Underwriter—Mid-West Securities, 164 Con¬
gress St., Brooklyn, N. Y.
American Transportation Insurance

Co.,

Kansas

City, Mo.
March 17 filed 20,000 shares of capital stock (par $100).
Price—$150 per share. Proceeds — To increase capital
and surplus. Underwriter—None.
ir Apache Uranium Corp.
April 19 (letter of notification) 7,795,000 shares of com¬
mon stock (par one cent), of which 6,720,000 shares are
to be offered to public and 1,075,000 shares are to be
reserved

options.
Price—Three cents per share.
mining operations. Office — 505 Atlas

for

Proceeds

—

For

Apex Uranium, Inc.
April 5 (letter of notification) 1,775,000 shares of com¬
mon stock (par one cent), of which 400,000 shares are to
be offered to public and 1,375,000 shares to 20 existing
stockholders. Price—To public, 10 cents per share, and
to

stockholders,

cent per share. Proceeds—To finance

one

Southern

Santa Fe, N. M.
notification) 748,000 shares of common
•tock (par five cents). Price—40 cents per share. Pro¬
ceeds—To acquire properties and leases. Office — Blatt
Bldg., Santa Fe, N. M. Underwriter—Hunter Securities
Corp., New York.
Natural Gas Corp.,

Dec. 23 (letter of

•
Big Horn-Powder River Corp.
April 2 (letter of notification) 280,000

54.575,000

Underwriter—None.

Capper Publications, Inc., Topeka, Kansas
of series six 5-year first mort¬

March 23 filed $2,000,000

4% bonds and $2,000,000 of series seven 10-year
mortgage bonds. Price — At 100% of principal
Proceeds—To advance sums to Topeka Broad¬

gage

first

casting Association, Inc., a subsidiary, and for redemp—^,
tion of certain bonds. Underwriter—Itfone.
Carolina Casualty Insurance

(Offering

Common

&

stockholders—underwritten by Lazard Freres

to

Inc.)

325,000 shares

11

Bonds

.

.

Bonds

:
$20,000,000

(Wednesday)

Debentures

Jersey Bell Telephone Co
(Bids

V*

11

$25,000,000

EDT)

a.m.

Texas State Oil & Gas Co

.Common

l

& Co.)

D. Sherman

(L.

and

$15,000,000

EDT)

a.m.

5

May
New

White, Weld & Co.; and W. C. Pitfield & Co.,.

Co.;

PDTl

8:30

Wisconsin Electric Power Co

(Friday)

Telephone Bond & Share Co

'

$299,500

and Northeastern

Cantor Co.

Securities Co.)

5300,000

North American Uranium & Oil Corp..;
(Israel

Standard

Uranium

(Gearhart &

&

Co.)

Common
Crerle & Co.) $1,787,500

(The

CDTi

& Co.)

Housatonic Public Service
(Offering

stockholders—no

to

I-T-E Circuit
(Smith,

Co.

&

(Bids

underwriting)

41,159

shares

(Van

C.

Common

Wisconsin Electric Power Co
(Offering

Allis-Chalmers Mfg.

General

&

Curtis and

Securities Corp.)

Illinois

Northern

Jackson

Webber,

30,000

Co

Gas

&

Stone

&

(Bids 11

Combustion

Bonds

...Preferred

Empire District Electric Co
(The First Boston Corp.

tBids

Debentures

and G. H. Walker & Co.)

$4,000,000

•

(Philip

Gordon

Co.,

&

Inc.)

$5,000,000

to

be

$25,000,000

Equip. Trust Ctfs.

Southern Pacific Co
(Bids noon EDT)

(Offering to stockholders—may be
Miller &

Co. and

Lawrence

Acme

Industries,
(Baker,

(Bias

Common
50,000 shares

EDT)

on

May

Price—100%

10.

cf

—

-

.

•

,

Continued

on

page

50

Common
underwritten By Hayden,
117,500 shares

invited)

Bonds
$65,000,000

(Wednesday)

May 19

Preferred

California Electric Power Co

Bonds

Light Co

11:30 a.m.

be

rights to
principal amount.
Proceeds
For construction program.
Underwriter —
Halsey, Stuart & Co. Inc. won award of the issue on
expire

i

Inc..

Simonds & Co.)

Delaware Power &

to

due

Cook & Co.)

Pacific Gas & Electric Co...
(Bids

Inc.

$50,000,000 of subordinated convertible
1984 being offered for subscription by
stockholders of record April 21 on the basis
filed

April 21.

$7,905,000

(Monday)

May 3

22

Bonds

Co

■

Columbia Gas System,

debentures

$20,000,000

invited)

Northern Ohio Telephone

common

(approximately $32

of $100 of debentures for each 36 shares held;

(Tuesday)

May 18

1,500 shares of

Price—At market

Proceeds—To J. P. Routh, the selling stock¬

Underwriter—Fahnstock & Co., New York.

holder.

common

Bonds

New York State Electric & Gas Corp
(Bids

Common

Light Metals Refining Corp
I

EDT)

noon

$15,000,000

Common

(Monday)

Virginia Electric & Power Co._

Inc.___

First Boston Corp.)

(letter of notification)

(par $20).

share).

March

First Nat'l Bank of Toms River, N. J
(Offering to stockholders) $150,000

I

$15,000,000

(Thursday)

Engineering,

(The

Clinchfield Coal Corp.

April 6
stock

(Friday)

May 14

Common

Weld

$18,000,000

EDT)

May 17

April 29

/

.Debentures
a.m.

(5/4)

Halsey, Stuart & Co. Inc., Blyth & Co., Inc., and
& Co. (jointly); Kuhn, Loeb & Co. and
& Co.1 (jointly); Glore, Forgan & Co.; The
First Boston Corp.; Dillon, Read & Co. Inc. Bids—Ten¬
tatively expected to be received up to noon (EDT) on
May 4 at 75 Public Square, Cleveland 1, Ohio.

shares

Co

Power

shares

___ti

EDT)

noon

Montana

&

Co.

filed

31

White,

•

Light Co

(Bids

filed

$20,000,000 of first mortgage bonds due
1989. Proceeds—For construction program. Underwriter
—To be determined by competitive bidding.
Probable

Common

Corp

stockholders—Merrill Lynch, Pierce,
Beane may act as clearing agent)

to

March

per

(The First Boston Corp. and Glore, Forgan & Co.) 400,000 shares

Utah Power

1

Wertheim

Preferred

606,423

General. Telephone Co. of Indiana, Inc.__Preferred
Webster

Bakeries, Inc., Augusta, Ga.
162,500 shares of class A common stock
(par $1) and 62,500 shares of class B common stock (par
$1). Price—Of class A shares, to be supplied by amend¬
ment; of class B shares, $8 per share.
Proceeds—From
sale of stock, together with $500,000 to be received for
sale of 5% debentures, will be used to acquire stock of
H. H. Claussen's Sons, Inc. Underwriter—Johnson, Lane,,
Space & Co., Inc., Savannah, Ga.
April

$35,000,000

Inc.)

Utilities

Public

(Offering
Fenner

(Paine,

it Chemical & Fibre Associates, Inc., Reno, Nev.
April 16 (letter of notification) 8,750 shares of common
stock. Price—At par ($10 per share). Proceeds—To pay
notes, retire purchase contract and for working capital.
Office—139 North Virginia St., Reno, Nev. Underwrite*

bidders;

_.Debentures

Co

(Wednesday)

April 28

....Preferred
$21,000,000

Inc.) $40,000,000

Co.,

421,492 shares

underwriting)

stockholders—no

to

per

purposes.

Cleveland Electric Illuminating

Inc...Bonds

(Wednesday)

May 12

shares

300,000

Co.)

Ripley & Co. Inc.)

(Blyth &

Common

Noel &

shs, of common

$50,000,000

EDT)

a.m.

(Blyth & Co.,

Collings & Co.)

Corp

Alstyne,

share. Proceeds — For
Office—2402 Douglas St.,
Underwriter—None.
Price—$20

corporate

Omaha 2, Neb.

(Tuesday)

Northern Natural Gas Co

Preferred
C.

11

(Harriman

$5,000,000

Temco Aircraft

and 85,909

May 11

....Common

Co

and

Lincoln, Neb. and Cruttenden ;

of

pfd.

$1,000,000

Niagara Mohawk Power Corp...

$2,000,000

Breaker Co

Barney

First Trust Co.

Co.)

_Bonds

„■

Reuss

Bonds

Consolidated Edison Co. of New York,

$50,000,000

Devon-Leduc Oils Ltd
(McLaughlin.

6z

.Bonds

Edison Co
a.m.

$138,750

$7,500,000

invited)

be

to

employees.

general

65,000 shares

(Hemphill, Noyes & Co.)

10:30

stockholders—no underwriting)

Kansas-Nebraska Natural Gas Co., Inc.
i
Preferred & Common

Common

Corp

(Bids

to

(Bids

(Tuesday)

April 27

Commonwealth

(Offering

(letter of notification) 10,000 shares of com¬
(par $1) to be offered only to certain officers

16

stock

Claussen

Common

Associates, Inc

Iowa Public Service Co..._______

Corp

Otis, Inc. and

Allied Products

Electronic

Common

$1,500,000

(Monday)

May 10

Allegheny Natural Gas & Oil Corp.______Common
B.

-

—None.

April 26 (Monday)
(S.

Co.

April 7 (letter of notification) 20,000 shares of class Bstock (par $1).
Price—$4 per share. Proceeds—To in¬
crease capital and surplus.
Office — 262 Morehead St.,
Burlington, N. C. Underwriter — Courts & Co., Atlanta,

April

Counties Gas Co. of Calif

(Bids

April 23

shares of com¬

being offered to stockholders
on a pro rata basis. Price
60 cents ''per share. Proceeds—To retire debt and for
working capital. Office — 930-17th St., Denver, Colo.
stock

(par 10 cents)
of record March 31, 1954

mon

Carpenter Paper Co., Omaha, Neb.

(Bids

__Equip. Trust Ctfs.
EST)

(Bios noon

Angeles

Underwriter—None.

amount.

Underwriter—None.

Bldg., Salt Lake City, Utah.

Angeles, Calif.

Office—1900 W. Slauson Ave., Los

mellia stock.

Basin

N. Y.

American Coffee-Matic Corp.,

Arden Farms Co., Los

mon

Northern Pacific Ry.

ISSUE

REVISED

April 5 (letter of notification) 12,289 shares of common,
stock (par $1) to be exchanged for 153,615 shares odt
Camellia Diced Cream Co. stock at the rate of one share
of Arden Farms common for each 12V2 shares of Ca¬
47, Calif.

NEW ISSUE CALENDAR
(Thursday)

ITEMS

shares.

Ga.

April 22

PREVIOUS

exploratory and development operations.
Office—718
Majestic Bldg., Denver, Colo. Underwriter — Carroll^
Kirchner & Jaquith, Inc., Denver, Colo., for 400,000

^ Allis-Chalmers Mfg. Co. (5/12)
April 16 filed 350,000 shares of cumulative convertible

Blyth & Co., Inc., New York and San Francisco.

★ Air Express International Corp.
April 13 (letter of notification) 5,000 shares of common

ADDITIONS

SINCE
•

49

(Merrill

Lynch, Pierce, Fenner & Beane)

$5,750,000

$10,000,000

Common

Republic Aviation Corp

May 25

(Tuesday)

(Smith, Barney & Co.) 30,000 shares

Bonds

California Electric Power Co

Cleveland

Electric Illuminating
(Bids

noon

(Bids

(Tuesday)

May 4

EDT)

Bonds

Co

$20,000,000

Bonds

Montana Power Co
I

Montana

(Bids

Power
tBids

11

a.m.

EDT)

$6,000,000

Preferred

Co
11

a.m.




EDT)

$6,000,000

...

to

be

invited)

$8,000,000

Debentures

Consolidated Natural Gas Co
(Bids

11:30

May 26

a.m.

EDT)

$25,000,000

New York

Boston

Philadelphia

(Wednesday)

Public Service Electric & Gas Co
Bonds &
(Bids to be invited) $74,994,200
,

Pfd.

Pittsburgh

San Francisco

Private Wires to all

ofices

Chicago

Cleveland

^

r p uwl aw u ustm

A <

MWWf*NWl

t*i ■"»! u 4tAuawi

Financial Chronicle... Thursday, April

The Commercial and

22, 1954

(1822)

50

of Consolidated
share for each two
Consolidated shares, held April 8; rights to expire April
29. Price—$3.50 per share. Proceeds—To repay advances
from Consolidated and for working capital, etc. Business
To design, develop, manufacture and sell or lease
by common stockholders

for subscription

49

Continued from page

Engineering Corp. at the rate of one

Engineering, Inc. (4/29)
April 9 filed $15,000,000 of sinking funa debentures due
May 1, 1979. Price—To be supplied by amendment. Pro¬
ceeds—To repay $10,000,000 bank loans and for general
Combustion

Underwriter

corporate purposes.
Corp., New York.

—

The -First Boston

i

(4/27)
April 1 filed $50,000,000 of first mortgage bonds, series
Q, due May 1, 1984. Proceeds — To redeem $40,000,000
3%% bonds due 1983 (which were sold last July) and
for new construction.
Underwriter—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston Corp.; Glore, Forgan & Co.
Bids—Expected to be received up to 10:30 a.m. (CDT)
on April 27 at 72 West Adams St., Chicago 90, 111.
Commonwealth Edison Co.

Consol. Edison Co. of New

Natural Gas Co. (5/25)
April 15 filed $25,000,000 of debentures due 1979. Pro¬
ceeds—To repay $15,000,000 long-term notes due March
1, 1955, and to purchase stock from or make loans to its
★ Consolidated

for new con¬
struction. Underwriter—To be ^determined by competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co.
Inc., White, Weld & Co. and Paine, Webber, Jackson &
Curtis (jointly); Morgan Stanley & Co. and The First
Bostbn Corp. (jointly). Bids—Expected to be received up
subsidiaries who will use the funds to pay

(EDT) on May 25.

Cooperative Grange League
Exchange, Inc.

Federation

of 4% cumulative preferred
and 500,000 shares of common stock

stock

(par $100)

Proceeds—To retire class B
preferred stock of
G. L. F. Holding Corp., a subsidiary, and for working
capital. Underwriter—None. This offering is a continua¬
tion of earlier offerings of same classes of securities.
Price

(par $5).

At par.

—

and

stock

common

cumulative

5%

Cornbelt Insurance

Co., Freeport, III.

March 17 filed 300,000 shares of common

Price—$3

per

share.

stock (par $1).
Under¬

Proceeds—For investment.

writer—None.

Associates, Inc. (5/10)
(letter of notification) 7,500 shares of common

^ Electronic

April 19

holders of record May

(letter of notification) 1,666 shares of common
(approximately $30 per share).
Proceeds
To Octave Blake, the selling stockholder.
Price—At market
—

Underwriter—Pyne, Kendall & Hollister, New York.

Light Co.

rights to expire on June

15 shares held;

for each

share

working
N. J.

9, 1954. Price—$18.50 per share. Proceeds—For
capital. Office—Long Branch Ave., Long Branch,
Underwriter—None.

Electric Co. (4/29)

& Co.,

New York.

;

,

,

Inc., Tyler, Texas
March 9 (letter of notification) 60,000 shares of com¬
mon stock (par five cents).
Price—At market (estimated
at 70 cents per
share).
Proceeds —To underwriter,
Empire Oil & Refining Co.,

Charter Securities Corp.,

New York.

Family Digest, Inc.

Office—421
Underwriter—Carl J.

capital and operating expenses.

St., New York 14, N.

Hudson

Y.

Washington. D. C.

Bliedung,

Fidelity Acceptance Corp.,

Minneapolis, Minn.

notification) 2,800 shares of 6% cumu¬
lative preferred stock, class E. Price—At par ($25 per
share). Proceeds—To be available to subsidiaries and

Jan. 26 (letter of

Office—820 Plymouth
Bldg., Minneapolis, Minn. Underwriters—M. H. Bishop
& Co., Minneapolis, Minn.; and B. I. Barnes, Boulder,
outstanding

bank

loans.

Colo.

(5/3)

convertible preferred stock.

New
★

York 4, N.

March 29
stock

Underwriter—None.

Y.

Insurance

Gulf

Co., Dallas, Texas

(letter of notification) 5,000 shares of common

stock¬

(par $10) being offered for subscription by

holders of record April 12 on the basis of one new

share

held; rights to expire on May 3. Price
—$55 per share. Proceeds—For general corporate pur¬
poses. Office — 3015 Cedar Springs Road, Dallas, Tex,
Underwriter—None.
/ /
^
for each 44 shares

/

'

★ Hartford Electric Light Co.

April 15 (letter of notification) 5,450 shares of common
stock (par $25) to be offered to employees.
Price—$45
per share.
Proceeds — For construction.
Office •—266
Pearl St., Hartford, Conn.
Underwriter—None.
Home Improvement Financing Corp.

/

'

.<•

notification) 30,000 shares of 6%
preferred stock (with warrants to purchase 6J,000 shares

April

12

class

of

of

(letter

A

common

Proceeds

share).

Office—240

stock)l
To

—

West

Front

Price— At par ($10 per

finance home
St., Plainfield,

improvements.
N. J. Under¬

writer—None.
Housatonic Public Service Co.

(4/27)

April 23 at the rate of one new share for each eight
(with unsubscribed shares being offered
Price — To be supplied by
amendment.
Proceeds—To repay $130,000 bank loans

shares then held

to officers and employees).

and for construction expenses.

★ Inter-Canadian Corp.,

Underwriter—None.

Chicago, III.

■

»

April 19 filed 100,000 shares of common stock (par $1).:
Price—$25 per share. Proceeds—For venture or semiventure investment situations in

White, Weld & Co., New York.

Canada. Underwriter—
•

v

Inter-Mountain Telephone Co.
March

filed

18

142,500

shares

of common stock being
stockholders of

offered first for subscription by common

Financial Credit Corp., New
Jan.

($5

ing

60,000

notification)

of

(letter

April 7 filed 41,159 shares of common stock (par $15)
to be offered for subscription by stockholders of record

April 9 (letter of notification) 142,875 shares of class A
stock.
Price—At par ($1 per share).
Proceeds—For
operating

shares of 6%
Price—At par
per share).
Proceeds—For production and market¬
of soluble traces minerals.
Office — 50 Broad St.,
14

cumulative

.

April 8 filed 40,000 shares of cumulative preferred stock
(par $100). Price—To be supplied by amendment. Pro¬
ceeds—To prepay bank loans and for new construction.
Underwriters—The First Boston Corp. and G. H. Walker

filed

29

York

record March 30

cumulative sinking

250,000 shares of 7%

preferred stock. Price—At par ($2 per share). Pro¬
ceeds—For working capital. Underwriter—E. J. Foun¬
tain & Co., Inc., New York.

fund

Firth-Loach Metals, Inc.,
18 filed 33,400

March

Pittsburgh, Pa.

$25).
equip¬

shares of capital stock (par

share. Proceeds — For expansion,
ment and working capital. Underwriter-—None.

Cornell-Dubilier Electric Corp.

Delaware Power &

to be offered for subscription by stock¬
10, 1954 on the basis of one new

(par $1)

stock

Price—$25

April 7
stock.

processing

equipment for scientific, industrial and commercial uses.
Underwriter—Blyth & Co., Inc., San Francisco, Calif.

reduce

March 26 filed 7,500 shares

data

electronic

specialized

and

standard

Empire District

York, Inc. (5/11)

of first and refunding mort¬
gage bonds, series K, due May 1, 1984. Proceeds—To be
applied towards cost of redeeming $27,982,000 New York
Steam Corp. first mortgage bonds and $25,000,000 West¬
chester Lighting Co. general mortgage bonds.
Under¬
writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; Morgan Stanley
& Co.; The First Boston Corp.
Bids—Tentatively ex¬
pected to be received up to 11 a.m. (EDT) on May 11.
April 7 filed $50,000,000

to 11:30 a.m.

—

★ Great Southern Minerals, Inc.
April

per

four shares

on

the basis of one new share for each

held; rights to expire on April 28. Price—At

par

($10 per share). Proceeds—To repay

for

new

bank loans and
Co., At¬

Underwriter—Courts &

construction.

lanta, Ga., for 78,336 shares. The balance of 64,164 shares
are
to be
purchased by two principal stockholders,
Southern
Bell Telephone
& Telegraph Co. and The
Chesapeake & Potomac Telephone Co. of
★ International

Virginia.

-

Dairies, Inc., Miami, Fla.

April 13 (letter of notification) 300,000 shares of class B
common stock.
Price—At par ($1 per share).
Proceeds

★ Gambella Corp.
April 14 (letter of notification) 50,000 shares of class A
5% preference stock (par $5) and 25,000 shares of com¬
mon stock (no par) to be offered in units of two shares
of class A stock and one share of common stock.
Price

machinery, plant facilities, and working

—For

Underwriter—None.

capital.
.

★ Iowa Public Service Co. (5/10)
April 14 filed $7,500,000 of first mortgage

bonds due

$10,000,000 first mortgage and collateral
trust bonds due May 1, 1984. Proceeds—To retire bank
loans and for new construction. Underwriter — To be

$10.25 per unit.
porting roofing

Proceeds—To produce device for sup¬
other structural materials.
Under¬
writer—Arthur. C. Pontius, Utility Bldg., Fort Wayne,

May 1, 1984. Proceeds—To redeem a like amount of out¬
standing first mortgage 4% bonds due 1983 at 102.42%

determined by competitive bidding. Probable bidders:
Halsey, Stuart & Co.; The First Boston Corp. and Blyth
& Co., Inc., (jointly); White, Weld & Co. and Shields &

Indiana.

plus

April 6 filed

Co. (jointly); Union Securities Corp.; Lehman Brothers;
Morgan Stanley & Co.; Kuhn & Co. and Salomon Bros.
& Hutzler (jointly); W. C. Langley & Co. Bids—Tenta¬
tively expected to be received up to 11:30 a.m.' (EDT)
on May 3 at 600 Market St., Wilmington 99, Del.
★

Devon-Leduc Oils Ltd.

10-year 5% convertible sink¬
ing fund leasehold mortgage bonds due May 1, 1964.
Price—100% of principal amount. Proceeds—To redeem
outstanding bonds, repay bank loan and for general
corporate purposes, including drilling commitments in

Stony Plain India

Reserve and

in participation of

the development of the Buck Lake Area. Office—Winni¬

peg, Canada.
New York.

Underwriter—McLaughlin, Reuss

stock (par 10 cents).

—

Middle

Branch, Ohio.
Co., Cleveland, O.

Turben &

Underwriter

—

Merrill,

derwriter—Sheehan &

(Theodore)

March

31

New

—

For investment. Office

notes.
new

—

Elizabeth,

Jersey.

★ Dufur Elevator Co., Dufor, Ore.
:April 16 (letter of notification) $70,000
Price

of 5-year

At par.
Proceeds—For construction of
Underwriter—None.

Duggan's Distillers Products Corp.
19 (letter of notification) 200,000 shares of

Feb.

mon

5%

—

building.

(par 10 cents) to be offered to stockholders.
per share.
Proceeds—For general cor¬
purposes.
Office—248 McWhorter St., Newark

25 cents

porate

5, N. J.

Underwriter—None.

★ Eagle-Picher Co., Cincinnati, Ohio
April 12 (letter of notification) 275 shares of

common

stock

(par $10).
Price—At market (estimated at $20.50
share).
Proceeds — For general corporate funds.
Underwriter—Benj. D. Bartlett & Co., Cincinnati, O.
per

ElectroData

Corp., Pasadena, Calif.
March 15 filed 450,000 shares of common stock (par $1),
of which approximately 43,800 shares are being offered




Co., Boston, Mass.

& Co., Kansas City, Mo.

310,000 shares of participating common

(par 20 cents) to be offered for subscription by
of participating common and common stock on
the basis of seven new shares for each 10 shares held.

stock

holders

supplied by amendment. Proceeds—To pro¬
vide financing for Telephone Bond & Share Co. and for
general corpbrate purposes. Underwriter—None.

Price—To be

General Credit Corp.,

Miami, Fla.

capital
(par$l). Price—$4 per share. Proceeds—For work¬
ing capital. Office—799 N. W. 62nd Street, Miami, Fla.
(letter of notification) 74,990 shares of

Underwriter—Murphy

&

Co.. Miami,

Fla.

Corp., Baton Rouge, La.
March 19 filed 100,000 shares of common stock (par $5).
Price
To be supplied by amendment. Proceeds — To
selling stockholders. Underwriter—Kidder. Peabody &
Co., New York. Offering—Postponed indefinitely.
General Gas

'it General Public Utilities Corp. (5/12)
April 15 filed 606,423 shares of common stock (par $5)
to be offered for subscription by stockholders at rate
of one nevv share for each 15 shares held on May 12;
expire June 2. Price—To be supplied by
amendement. Proceeds—To be invested in corporation's
domestic subsidiaries. Underwriter—None, but Merrill
with rights to

Lynch,
com¬

stock

Price

filed

Del. Un¬

accrued

Underwriter—To be determined

interest.

by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Union Securities Corp. and Salomon Bros.
& Hutzler (jointly); Equitable Securities Corp.; White,
Weld & Co.;; Kidder, Peabody & Co. and Blyth & Co.,

(jointly). Bids—Expected to be

Inc.

I-T-E

Circuit Breaker

received on May 10.

Co.H4/27)

April 5 filed 100,000 shares of preferred stock (par $50).
Price—To be supplied by amendment. Proceeds—To re¬
duce

short-term loans.

Underwriters—Smith, Barney &

Co., New York, and C. C.
delphia, Pa.

Collings & Co., Inc., Phila¬
>
' v

Machine Co.

Johnston Adding

(letter of notification) 100,000 shares of com¬
stock (par $1).
Price—$2 per share. Proceeds—

March 16
mon

For

tooling and dies.

City, Nev.

Office—402 N. Carson St., Carson

Underwriter—None.

Keps Electric Co.
April 6 (letter of notification) $200,000 of 14-year 4Vfc%
registered debentures and 12,000 shares of capital stock
(par $1) to be offered to present debenture holders of
record April 1; with rights to expire on May 4, in units
of one $500 debenture and 30 shares of stock.
Price—
$560 per unit. Proceeds—For working capital/ Office—
5000 Baum Blvd., Pittsburgh 13, Pa. Underwriter—None.

—

★ Diversified Growth Stock Fund, Inc.
April 14 filed 1,000,000 shares of capital stock. Price—At
market. Proceeds

share. Proceeds—

Office—100 West 10th Street, Wilmington,

stock

April 8 (letter of notification) 13,403 shares of common
stock (par $1).
Price—$21.50 per share. Proceeds—For
general corporate purposes, in part to replenish working
capital used previously to purchase a walking drag line.
Office

per

inventory, capital expenditures and working rani-1

tal.

March 25
Diamond Portland Cement Co.

Price—$1.50

For

Co.,

&

Corp., Wilmington, Del.

(letter of notification) 140,000 shares of common

Feb. 2

Gary

(4/27)

March 10 filed $2,000,000

the

Gamma

or

Pierce,

Fenner

&

Beane

may

act as clearing

agent.

General Telephone Co.

of Indiana, Inc.

(4/28)

shares of $2.50 cumulative pre¬
ferred stock (no par). Price—To be supplied by amend¬
ment. Proceeds—To repay bank loans and for new con¬
struction. Underwriter—Paine, Webber, Jackson & Cur¬
tis and Stone & Webster Securities Corp., both of New
York.

shares of preferred
of common stock
(par $1).
Price—The preferred, at $45 per share; and
the common, at par.
Proceeds—To buy assets of Kerber
Packing Co.
Kress
March 29
for

(S.

Underwriter—None.:
H.)

-

& Co., New York

filed 40,shares of common

issuance

under

the company's stock

stock (no par)
purchase plan

for selected employees.

III.
notification) 26,450 shares of common
(par 33% cents). Price—At market (estimated at
$2.50 per share). Proceeds—To Roy A. Kropp. Chairman
and President. Underwriter—L. D. Sherman & Co., New
York, and Sincere & Co., Chicago, 111.
Kropp Forge Co., Cicero,

General Stores Corp., New York
March 8 filed 300,000 shares of common stock (par $1).
Price—$1,371/2 per share. Proceeds—To pay part of cost
of acquisition of Ford Hopkins Co., Chicago, 111. Under¬
writer—A. C. Allyn & Co., Inc., Chicago, 111.
;

March

it Kisting Corp., Elgin, III.
April 13 (letter of notification) 2,700
stock (par $10)
and 175,000 shares

30

filed

30,000

April 7 (letter of
stock

Light Metals Refining Corp., New York (4/29)
1,250,000 shares of common stock (par $1).
share.
Proceeds—For construction and

Feb. 15 filed

Price —$4 per

equipment of control plant, and main plant, working
capital, advance royalties and reserves.
Business — To
refine beryllium ore and market the products.
Under¬
writer—Philip Gordon & Co., Inc., New York.

Number 5318

Volume 179

...

The Commercial and

•

1
,

Market Basket,

r

filed 28,830

15

March

Los Angeles,

Calif.

shares of common

cents) being offered for

Martin Arms Corp.,

Calif.

writer—None.

Las Vegas, Nev.

,

March

(J. W.), Inc.

New Bristol

%\ Medina Oil Corp., Orlean, N. Y.
(letter of notification) 2,800 shares of common
par
($100 per share).
Proceeds—To

Republic of Panama

,

March

Inc.,

trust

certificates for

1,000,000 shares of common stock (par one cent). Price
be supplied by amendment.
Proceeds—For ex¬

—To

ploratory drilling and development, in State of Israel,
and for operations and expenses. Underwriter—To be

amendment.

named by

N. Y.

April 2 (letter of notification) 5,000 shares of 7% cumu¬
lative preferred stock.
Price—At par ($10 per share).
Proceeds
To reduce notes payable and for working
—

Underwriter—Frazee, Olifiers & Co., New York.
general offer planned.
•

capital.
No

• Minnesota Mining & Manufacturing Co.
April 19 filed 200,000 shares of common stock (np par),
to be issued under the company's "General Restricted

Plan" to employees of this corporation and

Stock Option
six other

companies.

••.

Pasadena, Calif.
shares of common stock (par

cents)

be offered first to

to

65

stockholders and to gen¬

Price—$2 per share. Proceeds—To increase
capital and surplus. Underwriter—None.
eral public.

Mississippi Chemical Corp., Yazoo City, Miss.
Jan. 5 filed 26,666 shares of special common stock (par

$75—limited dividend) and $1,500,000 of certificates of
participation (to be sold in multiples of $75—5% inter¬
est). Proceeds—From sale of these securities, together
with bank borrowings, are to be used for expansion of
"facilities. Underwriter—None. Sales will be handled by
company

employees.

j

-

Montana Power Co.

•-

March 31 filed

$6,000,000 first mortgage bonds due

Proceeds—For

construction

be deteimined by

1984.

Underwriter—To

competitive bidding. Probable bidders:

Halsey, Stuart & Co. Inc.; Kidder,

Peabody & Co., Smith,
Lee Higginson Corp.

Barney & Co.,|Blyth & Co., Inc. and

(jointly); Union Securities Corp. Bids—Expected
11 a.m. (EDT) on May 4.

to be

received up to

Montana Power Co.

(5/4)

31

filed

Weld & Co.: Union
& Co. and Blyth &
Bids—Expected to be received up to

ding.
Probable bidders:
White,
Securities Corp.; Kidder, Peabody

Co., Inc. (jointly).
11 a.m. (EDT) on May 4.

Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co.; Kidder, Peabody & Co., Smith, Bar¬
ney & Co., Blyth & Co., Inc. and Union Securities Corp.
.(jointly). Bids—Expected to be received up to 11 a.m.
(EDT) on May 12.
bidding.

•

Monterey Oil Co., Los Angeles,

Calif.

257,338 shares of commerctatock (par $1).
Price—At the market price then prevMfng on the New

•Feb.

2

filed

special offerings or
secondary distributions. Proceeds—To Lehman Borthers
(400 shares); partners of Lehman Brothers and members
.of their immediate families (150,458); and The Lehman
York

•Corp.

Exchange,

Stock

(106,480).

or

through

Underwriter—None.

No general offer

planned.
Moreno

Uranium Corp.,

Denver, Colo.

750,000 shares of com¬
mon stock (par 10 cents) to be offered first to stockhold¬
ers.
Price—To stockholders, 20 cents per share, and to
public, 25 cents per share. Proceeds—For drilling, sur¬
veys,
acquisition of properties and working capital.
Office—731 Cooper Bldg., Denver, Colo.
Underwriter
March 31

(letter of notification)

Bell Telephone Co.

Mountain States Telephone

& Telegraph Co.

of capital stock being of¬
fered to stockholders of record March 26 on the basis of
one new share for each four shares held; rights to expire
March 5 filed 487,248 shares

About 86.66% of the presently outstanding
stock is owned by American Telephone & Telegraph Co.
April 30.




(5/5)

Underwriter—To be determined by

program.

Stuart

& Co.;
Boston
(EDT) on May

Corp. Bids—To be received up to 11 a.m.
5 at Room 2315, 195 Broadway, New York, N.
Mexico Copper

New

operations and expenses.
amendment.

Y.

Electric & Gas Corp. (5/18)
due 1984.
construc¬
tion. Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kidder, Peabody & Co. and Salomon Bros. & Hutzler
(jointly); Union Securities Corp.; The First Boston Corp.
and Glore, Forgan & Co. (jointly); Lehman Brothers,
Harriman Ripley & Co. Inc.; Hemphill, Noyes & Co. and
Drexel & Co. (jointly). Bids—Expected about May 18.

April 21 filed $20,000,000 first mortgage bonds
Proceeds—To repay bank loans and for new

Feb.

Inc.

2,400 shares of common
share. Proceeds—To a
Underwriter — Silberberg & Co.,

(letter of notification)

23

stock (par $1).

Price—$25.25

stockholder.

per

if Niagara Mohawk Power Corp.

(5/11)

210,000 shares of cumulative preferred
Price—To be supplied by amendment.
Proceeds
To repay bank loans incurred for construc¬
tion and to reimburse company's treasury and to finance
construction. Underwriter—Harriman Ripley & Co. Inc.,
20

filed

stock (par $100).
—

Proceeds—For construction
Underwriter—Morgan, Stanley & Co. and Coggeshall & Hicks, both of New York.
Pennsylvania Gas Co.

Feb.

Uranium

American

& Oil

Corp.

New York.

Feb.

3

"

(letter of notification)

$80,000 of 5% notes due

1, 1974, and 2,000 shares of common stock (par
$10) to be sold in units of $400 principal amount of
notes and 10 shares of stock. Price—$500 per unit. Pro¬
ceeds—For actors' equity bond, royalties, land, construc¬
tion of theater and related expenses.
Office—60 State

Northern

Underwriter—H. C. Wainwpight &

f

Illinois Gas Co.

(4/28)

additions and improvements

First Boston Corp. and

$5).
For

to property. Underwriters—
Glore, Forgan & Co., both

of New York.

Underwriter—Blyth & Co., Inc., New York.
Northern
16

States

Power Co.

(Minn.)

1,219,856 shares of common

filed

stock (par

subscription by common stock¬
one
new share for each
10
4. Price
—$14 per share. Proceeds—To repay bank loans and for
construction program.
Underwriter—The First Boston
Corp., Blyth & Co., Inc., and Kuhn, Loeb & Co. (jointly).
$5)

being offered for

holders

on

the

basis

of

April 15; rights to expire on May

if Pacific Gas & Electric Co. (5/18)
April 20 filed $65,000,000 of first and refunding
gage

of one new

expire on
National Fuel Gas Co., majority stockholder,
subscribe for an additional 28,554 shares. Price—

$15 per share. Proceeds—For acquisition and working,
capital. Office—Warren, Pa. Underwriter—None.
*

**

Colo.
March 23 filed $300,000 of 6% 15-year convertible sub¬
ordinated debentures. Price—100% of principal amount.
Proceeds—For general corporate purposes, probably to
reduce outstanding bank loans or repurchase of out¬
standing securities. Underwriter — Paul C. Kimball &
People's Finance Corp., Denver,

People's Finance Corp., Denver,

bonds, series X, due June 1,

Colo.

shares of 6% cumulative preferred
Price—At par ($50 per share). Proceeds — For

March 23 filed 2,904
stock.

general corporate purposes. Underwriter—None, Com¬
pany is also seeking registration of $164,000 of deben¬
tures, notes and preferred and common stock heretofore
sold and holders thereof are to be offered the right to
rescind their purchases.
Porta

Co., Inc., Chestnut Hill, Mass.

April 8 (letter of notification) 640 shares of
tive preferred stock (no par) and 640 shares

$6 cumula¬
of common

to be offered in units of one share of
each class of stock.
Price—$100 per unit.
Proceeds—
For manufacture of sporting goods.
Office —48 Moody
(no par)

stock

Underwriter — Minot Kendall

St., Chestnut Hill, Mass.

Co., Inc., Boston,

Mass.

Prudential Finance Corp. of America.

debentures
cents) and
cent), the shares

April 9 (letter of notification) $100,000 of 6%
and 100,000 shares of common stock (par 10

stock units, $2 each.

1984. Proceeds

Proceeds—To make loans and dis¬
Office — 1108-16th St., N. W.,

count commercial paper.

Washington 6, D. C.
Washington, D. C.

Underwriter—John C. Kahn Co.,

Public Service Co. of New Mexico

138,656 shares of common stock (par

$5>)

being offered for subscription by common stockholders
of record April 1 at the rate of one new share for each
10 shares held; rights to expire on April 27. Price—$11.25
per

share. Proceeds—For construction program.

Under¬

writer—Allen & Co., New York.

Inc., Idaho Falls, Idaho
(letter of notification) 1,170,000 shares of
common stock (par 10 cents).
Price—25 cents per share.
Proceeds—To complete plant, repay obligations and for

March

29

working capital.

Falls, Idaho.
City, Utah.

Yellowstone, Idaho
Coombs & Co., Salt Lake

Office —1820 N.

Underwriter

—

Republic Aviation Corp.

(5/3)

April 14 filed 30,000 shares of common stock (par $1).
Price—To be supplied by amendment.
Proceeds—To a

Underwriter—Smith, Barney & Co.,

New York.

if Rheem Manufacturing Co.
April 19 filed $750,000 of interests in an "Employees
Stock Purchase Plan" and 25,000 shares of its common
stock

if Northern Natural Gas Co. (5/11)
April 16 filed $40,000,000 of sinking fund debentures due
Nov. 1, 1973. Price—To be supplied by amendment. Pro¬
ceeds—To be applied toward redemption in June, 1954,
of a like amount of 4%% debentures due Nov. 1, 1973.

March

capital
minor¬

ity stockholders of record March 19 on basis
share for each YlVz shares held; rights to

selling stockholder.

April 8 filed 400,000 shares of common stock (par
Price—To be supplied by amendment. Proceeds —
The

(no par) being offered

Pumice,

Inc., Boston, Mass.

Feb.

St., Boston, Mass.
Co., Boston, Mass.

17,526 shares of

for subscription by

(letter of notification)

25

stock

March 17 filed

(4/26)
March 1 filed 750,000 shares of common stock (par 10
cents). Price—$2 per share. Proceeds—For capital ex¬
penditures, including payment of balance due on cer¬
tain claims and properties. Underwriter—Israel & Co.,
North

Co., Tampa, Fla.

April 1 filed 131,836 shares of common .stock (no par)
being offered for subscription by stockholders of record
April 20 at the rate of one new share for each five shares
then held (with unsubscribed shares being offered to
certain officers and employees); rights to expire on

50,000 shares of class A stock (par one
to be sold in units of one share of common and one-half
share of class A stock. Price—Of debentures, at par; of

New York.

April

v

^

Peninsular Telephone

&

Yorker Magazine,

Israel, and for

Underwriter—To be named .by

Co., Chicago, 111.

Corp.

April 4 (letter of notification) 600,000 shares of common
stock (par 25 cents).
Price—50 cents per share. Pro¬
ceeds—For mining expenses.
Office—Carrizozo, N. M.,
and 1211 E. Capital St., Washington, D. C. Underwriter
—Mitchell Securities, Inc., Baltimore, Md.

New

.

1,-

Price—

Proceeds—For explora¬

development in State of

tory drilling and

will

competitive bidding. Probable bidders: Halsey,
& Co., Inc.; Kuhn, Loeb & Co.; Morgan Stanley
Shields & Co.; White, Weld & Co.; The First

shares held on

—None.

on

New Jersey

April 7 filed $25,000,000 of 35-year debentures due May
1, 1989. Proceeds—To repay advances from American
Telephone & Telegraph Co., the parent, and for con¬

North Shore Music Theater,

Montana Power Co. (5/12)
March 31 filed $18,000,000 of debentures due 1979. Pro¬
ceeds—To refund a like amount of 4%% debentures due
1978.
Underwriter—To be determined by competitive

>;/

-

,

(par one cent).

April 26.

New York.

60,000 shares of cumulative preferred
stock (no par). Proceeds — For construction program.
Underwriter—May be determined by competitive bid¬
March

New York.

selling

(5/4)
program.

Light Co. held by minor¬

Financial Advisor—The First Boston Corp.,

April 24.

trust certificates for

000,000 shares "bf commoh stock
To be supplied by amendment.

May 5. Price—$32 per share.

if New York State

Mission Indemnity Co.,
March 29 filed 600,000

(par

struction

Mid-State Commercial Corp*, Middletown,

•

Republic of Panama

program.

interest
$8) being offered in exchange for common stock

of New Bedford Gas & Edison

on

voting

Chickamauga, Ga.

Pan-Israel Oil Co., Inc. of

•

ity stockholders on the basis of 4% New England shares
for each New Bedford share held. The offer will expire

1

American

filed

30

Toronto, Ont., Canada

32,126 common shares of beneficial

Dec. 10 filed

— 10 East Corydon St.,
Winner & Myers, Lock

Mediterranean Petroleum Corp.,

/

Oils, Ltd.,

England Gas & Electric Association

New

Price—At

purchase drill rig, etc. Office
Bradford, Pa.
Underwriter —Haven, Pa.

Underwriter—J. P. Marto & Co.,
- ••
" >

shares of common stock (par $1).
Price—To be related to the bid price of the shares on
the Toronto Stock Exchange, with a 20% underwriting
commission. Proceeds—For general corporate purposes.
Underwriter—To be named by amendment.

share. Proceeds—For gen¬
Fulton St., Brook¬
lyn, N. Y. Underwriter—None.
9

Paleo Oil & Gas Corp.,

April 5 (letter of notification) 299,800 shares of capital
stock (par 10 cents). Price—$1 per share. Proceeds—To
explore for oil and gas. Underwriter — Gill, Pope Co.,
New York.

Dec. 18 filed 1,000,000

corporate purposes. Office—510

stock.

Y.

(letter of notification) 58,800 shares of com¬
$1). Price—$5 per share. Proceeds—For

10

working capital, etc.
Boston, Mass.

(letter of notification) 24,012 shares of com¬
stock (par $1) to be offered for subscription by

Dec.

/

stock (par

mon

employees. Price—$10.50 per
eral

Bids—Tentatively expected

(jointly); Blyth & Co., Inc.
May 18.

to be received on

Natick Industries, Inc., Natick, Mass.

•

15

mon

Boston

March 30 filed American voting

Underwriter — Robert B. Fisher, 704'
Drive, Las Vegas, Nev.

if Mays

be determined by

April 20 filed 100,000 shares of common stock. Price—At
market. Proceeds—For investment.

Vegas, Nev.

April

4% bonds, series V. Underwriter—-To
competitive bidding. Probable bidders:
Corp. and Halsey, Stuart & Co. Inc.

refund $63,040,000

Co.

if Mutual Investment Co. of America, N.

En Canto

•'

April 15 (letter of notification) 2,550 shares of common
stock (no par). Proceeds—To Sun Gold, Inc., Whittier,
Calif. Address — P. O. Box 31, Whittier, Calif. Under¬

April 8 (letter of notification) 5,000 shares of class A
preferred stock (par $5) and 5,000 shares of common
stock, class B (par $5) to be offered in units of one share'
qf each class.- Price—$10 per unit.
Proceeds—To man¬
ufacture small target pistol.
Office — 510 S. Fifth St.,,
Las

•

The First

if Murphy Ranch Mutual Water

Proceeds—For
Underwriters —
Eichler & Co., The First California Co,, Inc.,

v

i

Proceeds—To repay
and for new construction.

share).

Underwriter—N one.

-

Bateman,
and William R. Staats & Co., all of Los Angeles,

per

advances from parent company

stock (par 50

subscription by stockholders of
rights to expire

April 7, on a one-for-ten basis;
on
April 23.
Price—$16.50 per share.
improvements and working capital.

record

($100

par

•

•

•

Price—At

51

(1823)

Financial Chronicle

purchasable under the plan.

if Richland Realty, Inc., Cincinnati, Ohio
April 12 (letter of notification) 995 shares of common
stock (par $100) and $200,000 of 6% debentures, matur¬

Price—At par. Proceeds—For general
corporate purposes. Office—1000 Fountain Square Bldg.,
Cincinnati, O.
Underwriter—None.

ing May 1, 1979.

if Rio Grande Investment Co., Longmont, Colo. |
April 19 (letter of notification) 1,150 shares of common
stock (no par) and 1,150 shares of 6% cumulative parti¬
cipating preferred stock (par $100) to be offered in
units of one share of each class of stock. Price—$100 per
unit. Proceeds — For operating expenses and to make
loans. Business—Finance company. Address—P. O. Box
194,

Longmont, Colo.
Colo.

Underwriter—William E. Conly,

Jr.. Longmont,

mort¬
To

—

(

Continued

on page

52

52

The Commercial and Financial Chronicle..

(1824)

Scurry-Rainbow Oil Ltd., Calgary, Alta.,

•

4,700,416 shares of capital

filed

15

Feb

cents) being offered in

Canada

Oils Ltd. stock on a share-for-share basis, and
the 534,320 shares of Rainbow Oil Ltd.
basis of 3.8 shares of Scurry-Rainbow stock
for each Rainbow Oil share. The offer expires April 20.
of Scurry

*• Temco Aircraft Corp.
price

(no par).

Brush, Slocumb & Co., San Francisco, Calif.

by

ible

basis of two

Wilson Bldg., Corpus

The offer expires on

Price—$11.50 per share. Proceeds—To
participating preferred stock. Underwriters —
Simon, Strauss & Himme, New York; William N. Pope,
Inc., Syracuse;, N. Y.; and Chace, Whiteside, West &
Winslow, Inc., Boston, Mass. Change in Name—Company

—

common

stock of American Woolen Co.

&

on

common

filed

5

shares

29,458

of

convertible

Bros.

&

Hutzler

the basis of

Boston

stock plus $5
share up

it Wyton Oil & Gas Corp., Newcastle, Wyo.

in cash for each American Woolen

to and including April 19 when offer

April 20 filed 1,000,000 shares of common stock (par$l).
Price—$1,121/2 per share. Proceeds—For. general cor-1
porate purposes.
Underwriter
National
Securities

)5tock

(par $11) and 29,458 shares of class A common
(par $1) being offered to holders of participating
stock in units of one share of each class of

stock

the basis of

Underwriter—General Investing

one

unit for each

Feb.

16

bonds
Proceeds—To repay bank loans and for new

1984.

petitive

Underwriters—To

bidding.

both of New York; William N. Pope,
Inc., Syracuse, N. Y.; Chace, Whiteside, West & Winslow,
Inc. and Draper, Sears & Co., both of Boston, Mass.;
and Chilson, Newbery & Co., Kingston, N. Y.
r
(5/4)

to be

April 5 filed $15,000,000 first mortgage bonds, series A,
Proceeds—To

determined

bidders:

by

Halsey,

April

con¬

Stuart

Bros.

&

Hutzler.

received up

to

(EDT)

on

& Co.
(jointly); Blyth & Co., Inc.; The First Boston
Corp.; White, Weld & Co. Bids—Expected to be received

8:30

UP to

(PDT)

a.m.

on

May 4.

Bros.

March 8 filed $600,000 of 5% convertible debentures due

noon

June 15,

1964, to be sold to pea growers located in East¬
ern
Washington and Northern Idaho. Price—100% of
principal amount. Proceeds—To improve facilities and
for working capital.
Underwriter—None.

March

filed

15

cent).

options
Office

Uranium

on

Corp.

Moab, Utah. Underwriters

—

—

construction.

new

&

of $5 in cash and $7 principal amount of debentures for
each share of Equitable stock.
Exchange offer is con¬

Gearhart & Otis,

ditioned solely

upon acceptance by
Underwriter—None.

•shares.

80%

of outstanding

Stanley Works, New Britain, Conn.
ber

of

an

West Coast Pipe Line Co.,
Dallas, Tex.
Nov. 20, 1952 filed $29,000,000 12-year 6% debentures
due Dec. 15, 1964, and 580,000 shares of common stock

num¬

shares

of common stock to be offered to em¬
Proceeds—For working capital, with
right re¬
served to pay off bank loans.
Office—95 Lake

(par 50 cents) to be offered in units of

St., New

Underwriter—None.

ture and

Feb.

19

filed

being

value

of

640,000

offered

shares
in

for

stock

the

(par

$300,000

50

of

5%

cumulative preferred

Company and

(b)

23

shares

for each of the 25,000 shares
of the
company. Offer

.None.

stock

of

(par $10)

Weld

Corporation stock

of

stock

(no

maximum of

par)

to

be

offered

139,662 shares of
for

possible

March

sale

during the period July 1, 1954 to June
30, 1955. Price—
At market. Proceeds—To
selling stockholders. Under¬
writer

houses.

15

.preferred

filed

received

representing the maximum number of shares
which it is anticipated
may be purchased by the trustees
under the plan.
Underwriter—None.

one new

by stockholders

in

8

it

Co.

bonds

an

due

1984.

Underwriters

To

be

determined

by
Halsey, Stuart
Inc.; The First Boston Corp.; Lehman Brothers,
Stone & Webster Securities Corp. and White, Weld &
Co.
(jointly); Blyth & Co., Inc., Equitable Securities
Corp. and Central Republic Co. Inc. (jointly); Merrill
Lynch, Pierce, Fenner & Beane and Union Securities
Corp. (jointly).

competitive

'

reported company plans to sell, probably
issue of about $7,500,000 first mortgage

was

August,

bidding.

—

Probable

bidders:

Co.

&

share-for-share

a

expire

on

redeem

construction.

new

up

to 11:30

a.m.

Boston Edison Co.
Feb.

15

pre¬

basis.

The

Co. Inc.

April 19. Price—$105 per
preferred stock and to

Underwriters

—

Harriman

(CST)

on

it California Electric Power Co.

on

writer—Merrill

April 14 it
sell

Kansas

City, Mo.

Underwriter

HI.

t

v }

r

z

I

A

\y

.

Power

announced

of

bonds due

gage

first

new

construction.

Fenner

&

Under¬

Beane,

1983.

&

art

Co.

body

&

received

Inc.;

Co.;

the

23

Blyth

to

.

'

plans to issue and
bonds

Underwriters—To

be

due

1984.

first mort¬
determined

Probable bidders: Halsey, Stu¬
Boston Corp.; Kidder, PeaCo., Inc. Bids—Expected to ba

First
&

1

Corp.

stockholders

approved

a proposal to increase
(par $10) from 1,600,000
5,000,000 shares and the authorized preferred

authorized

(par

common

$50)

provide

For

New
■■

(5/25)

mortgage

May 25.

on

Carrier

The

Co.

company

like amount of 37/s%

a

by competitive bidding.

for

stock

from 181,855 shares to 800,000 shares
further possible financing. Proceeds—

expansion, etc. Underwriters—Harriman Ripley $
Hemphill, Noyes & Co.

Co. Inc. and
>

Electric

was

$8,000,000

to

,

new

Lynch, Pierce,

Proceeds—To refund

Chicago, 111.

Ave.,. North

(5/19)

1

stock

Burlington

and

company plans

York.

shares

.•—None.

announced

was

gating "98,800 shares and for

per

•

issue

105,000

ic Whitaker Cable Corp., North Kansas City, Mo.
April 19 (letter of notification) 5,000 shares of common

the

plans to

to issue and
shares of cumulative preferred stock (par
.$50). Price—To be named later. Proceeds—To redeem
two issues of $2.50 preferred stock,
(par $50), aggre¬
sell

April 8 at 20 North

(par $1) to be offered to employees. Price—$15
share. Proceeds—For working capital. Office—1301

company

Offering—Tentatively expected in June.

-April 14 #

ex¬

$6

announced

was

be determined by competitive bidding. Probable bidders;
Halsey, Stuart & Co. Inc.; The First Boston Corp.; Leh¬
man Brothers; Kuhn, Loeb & Co. a*d A. C.
Allyn & Co.
Inc. (jointly); White, Weld & Co.; Harriman
Ripley &

Feb.

(par $1)

it

sell about $15,000,000 of first mortgage bonds due 1984.
Proceeds—For construction program.
Underwriters—To

stock

share for each two shares held about




will

Wacker Drive,

(4/23-27)
stock

cumulative

Ripley & Co. Inc.; Union Securities Corp.; Lehman
Brothers; Stone & Webster Securities Corp. Bids—To be

,latter

common

on

Proceeds—To

finance

plan for the employees of this
company and its subsidi¬
aries and 146,100 shares of common stock (no par), the-

Telephone Bond & Share Co.

Gas

Barney & Co. and Blyth & Co., Inc. (jointly).

• California

60,000 shares of 4.40%

stock

change offer
share.

★ Sun Oil Co., Philadelphia, Pa.
April 15 filed 14,000 memberships in the stock
purchase

rbasis of

Co. and Union Securities Corp., both of New
Offering—Postponed indefinitely.

ferred stock (par $100), of which 47,370 shares are being
first offered in exchange for outstanding $6 cumulative

None. The shares will be sold
through brokerage

March 31 filed 325,000 shares of
to be offered for
subscription

private sales of

West Texas Utilities Co.

common

public

and

ceeds—Together with other funds, to be used to build
pipeline. Underwriters—White, Weld & Co. and Union
Securities Corp., both of New York.
Offering—Post¬
poned indefinitely.

it Sun Oil Co., Philadelphia, Pa.
a

stock

common

West Coast Pipe Line Co., Dallas, Tex.
Nov. 20, 1952 filed 1,125.000 shares of common stock (pat
50 cents). Price—To be supplied by amendment. Pro¬

of

March 30.

April 15 filed

Price—To be supplied by
and 1,125,000

&

York.

$10 par common stock
expires Oct. 31. Underwriter—
Office—Salt Lake City, Utah. Statement
effective

-

$50 deben¬

$55,000,000 first mortgage bonds to be used to build a
1,030 mile crude oil pipeline.
Underwriters — White,

par

authorized,

issued and outstanding capital
stock of Strevell-Paterson
Finance Co. on the basis (a)
of 13 shares of
Corporation stock for each of the 5,000
shares

of stock.

additional shares of

cbmmon

of

exchange

share

one

one

amendment. Proceeds—From sale of units

Strevell-Paterson Finance Corp.
cents

Louisiana

was

t

undetermined

ployees.

Britain, Conn.

it

reported Cities Service Co. may sell its
holdings of 1,900,000 shares of this company's stock.
If
sold at competitive
bidding, bidders may include Smith,

,

Inc., New York, and Crerie & Co., Houston, Tex.

April 16 (letter of notification)

Arkansas
Feb. 22

Arkansas Power & Light Co.

it Webb & Knapp, Inc., New York "
April 14 filed $8,607,600 of 5% sinking fund debentures
due June 1, 1974, to be offered together with certain
cash by the company in exchange for
outstanding com¬
mon
stock of Equitable Office Building Corp. on basis

stock

;

■

i
Bids—Expected to be received up to
May 17 at Room 735, 11 Broad St., New

on

;/

announced stockholders will vote

was

Underwriter—To

Hutzler.

(EDT)

,

on

Feb.

(par
Price—$1.25 per share. Proceeds—To exercise
claims, and for general corporate purposes.
common

for

York, N. Y.

(4/25-27)

1,430,000 shares of

and

For general corporate pur¬
Weld & Co., New York.
v

sidiaries for their construction programs. Underwriter—
None.

bidding. Probable bidders:
Halsey, Stuart & Co. Inc., Kuhn, Loeb & Co. and Wertheim & Co. (jointly); Stone & Webster Securities
Corp.;
White, Weld & Co.; Union Securities Corp.; Salomon

Spokane Seed Co., Spokane, Wash.

Standard

loans

—

April
increasing^ the authorized .common stock from
4,000,000 to 5,000,000 shares to en&ble the company to sell
additional shares when necessary. •
Offering will prob¬
ably be made to present stockholders: Proceeds—To sub¬

be determined by competitive

bank

Proceeds

Underwriter—White,

March 11 it
28

it Virginia Electric & Power Co. (5/17)
April 19 filed $25,000,000 of first and refunding mortgage
bonds, series K, due May 1, 1984. Proceeds—To repay

—

President, announced directors
an offering to common stock¬

American Natural Gas Co.

April 28 in Room

Pacific Lighting Corp., and for new construc¬
tion. Underwriter
To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co,... Inc.;
Merrill Lynch, Pierce, Fenner & Beane and Dean Witter

Towe,

$60,000,000).

poses.

2033, Two Rector St., New York, N. Y. ,////»

parent,

T.

$55,000,000

to

advances received from

repay

K.

holders of rights to subscribe to a new issue of convert¬
ible preferred stock (in the neighborhood of

&

Bids—Tentatively expected

noon

21,

have under consideration

com¬

Smith, Barney & Co (jointly); Lehman Brothers and
Bear, Stearns & Co. (jointly); The First Boston Corp.
and Blyth & Co., Inc. (jointly); Kidder,
Peabody & Co.;
Salomon

1984.

Probable

be

it American Cyanamid Co.

due

Co. Inc.; White, Weld & Co. and Stone & Webster Se¬
curities Corp.
(jointly); Union Securities Corp. and

M. Kidder & Co.,

due

Light Co. (4/28)
$15,000,000 of first mortgage

filed

struction.

—

Southern Counties Gas Co. of California

"best efforts basis."

a

Prospective Oifeiings

Corp., New York.

Utah Power &

participating pre¬
ferred share held as of record March 25 (with an over¬
subscription privilege); rights will expire on April $0.
Price—$15 per unit to stockholders and $15.50 per unit to
public.
Proceeds — For expansion and working cap¬
ital.
Underwriters
Simon, Strauss & Himme and A.
on

on

it Twin Arrow Petroleum Corp.
April 13 (letter of notification) 600,000 shares of class A
common stock (par 10 cents).
Price—50 cents per share.

preferred

.

Inc.; Glore, ForLehman Brothers and

(jointly); Union Securities
Ripley & Co. Inc. (jointly); The
Corp.; Equitable Securities Corp.; Merrill
Lynch, Pierce, Fenner & Beane. Bids—Tentatively ex¬
pected to be received up to 11 a.m. (EDT) on May 4.

expired. Dealer-Manager—Blair, Rollins & Co. Inc., New

preferred

stock

the

(5/4)

Corp. and Harriman

First

York.

Signature Loan Co., Inc.

one

improve?-

and

—

March

•"#

supplied by amend¬

Power Co.

Co.; Kuhn, Loeb & Co.;

Salomon

Corp., Seattle, Wash.,

c

be

share of preferred and one^half share of

a

common

Inc.

Price—To

Proceeds—For property additions and
improvements.;
Underwriter—To be determined by
competitive bidding.
Probable bidders: Halsey, Stuart & Co.

L. D.

Incorporated, Providence, R. I.
stock, series
(par $100) and 489,171 shares of common stock (par
cents) being offered to holders of the 978,342 shares
of

shares.

Proceeds—For

Wisconsin Electric

Textron

one-fifth

Federal Loan Co. of Pittsfield,

as

Underwriter

50

offered to public.
retire

(4/27)

April 7 filed $20,000,000 first mortgage bonds due 1984..

Feb. 8 filed 195,668.4 shares of 4% preferred
B

Co.

property additions
ments. Underwriter—None.

(5/5)

Christi, Tex.

Power

privilege); rights to ex¬
May 20. Employees to receive rights to purchase

on

ment.

,

of

April 30. Subject to prior right of

formerly known

the Thrift

to

,

Electric

unsubscribed

gan
•

exchange, 47,806 shares of the new preferred are to be
purchased by the below named underwriters and re-

was

■

Wisconsin

pire

Sherman & Co., New York.

shares of

new

7% stock for each old participating preferred share held.

Sayreville, N. J. Un¬
Inc., New York. No
\

Co.,

common stock
(par $10)
to be offered for subscription
by stockholders of record
April 27 on the basis of one new share for each 10 shares
held (with an oversubscription

April 7 (letter of notification) 599,000 shares of common
stock (par 10 cents).
Price—50 cents per share.
Pro¬
ceeds— For general corporate purposes.
Office — 603

preferred stock (par $11) being offered in exchange
outstanding participating preferred stock held at
on

pursuant

1

State Oil & Gas Co.

&

April 7 filed 421,492 shares of

Van Alstyne,

!

company
,

• Texas

^

shares of 7% cumulative convert¬

close of business March 25

the

of

employees

Plan.

Signature Loan Co., Inc.

-for

—

• Tennessee Gas Transmission Co.April 15 filed $1,200,000 of "contributions" to be made

(letter of notification) 1,500 shares of common
Price—At market (not1 less than $16 per
share). Proceeds — For working capital. Office—1555
Barcroft
Ave., San
Francisco, Calif.
UnderwriterApril 5

March 5 filed 58,916

Underwriter

•

Calif.

Shasta Water Co., San Francisco,

stock

stock (par $1).
To be supplied by amendment. Proceeds — To

_

Ross

general offer planned.

(4/27)

three selling stockholders.
Noel & Co., New York.

Underwriter—None.

Organic Chemicals, Inc.

derwriter—Graham,

March 30 filed 300,000 shares of common

a

on

books); White, Weld & Co.; and W. C. Pitfield
Co., Inc.

&

exchange for the 2,670,000 shares

Wilson

March 18 (letter of notification) 7,500 shares of common
stock (par $1).
Price—$2.37V2 per share.
Proceeds—
To selling stockholder.
Office —

handle

stock (par 50

in exchange for

stock

•

April 23-27 for a 14-day standby. Price—Tb be supplied
by amendment. Proceeds—For financing of company's
subsidiaries. Underwriters — Lazard Freres & Co. (to

51

Continued from page

.Thursday, April 22, 1954

Number 5318... The Commercial and

yolume 179

Financial Chronicle
Fidelity Trust of America, Dallas, Tex.

Central Hudson Gas & Electric Corp.

bonds and

March 8 it was announced issues of mortgage

preferred stock are now under consideration, but def- *
plans will depend largely upon developments in
the securities markets. Construction cash requirements
are estimated at $17,300,000 for 1954-1955.
Company is
inite

reported to be considering the issuance of about $9,000,$3,500,000 of preferred stock In
1955. 'Underwriter—Kidder, Peabody & Co., New York.

000 bonds this fall and

Central Illinois Electric & Gas Co.

offer and
sell around the middle of 1954 an issue of $4,000,000 first
mortgage bonds. Proceeds—To repay bank loans and for
new construction.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Stone & Webster Securities Corp.; Kidder,
Peabody & Co. and White, Weld & Co. (jointly).
Dec. 9 it

was

(1825)

Dec.

22

it

announced-that company,

was

its capitalization

crease'

to

Jersey, Central Power & Light Co.

plans to in¬

$3,000,000,^following which

First National Bank of Toms River, N. J.
Jan

it

12

announced bank plans to offer for sub¬

was

scription by its stockholders of record May 1, 1954, an
additional 3,000 shares of capital stock (par $10) on the
basis of one new share for each 26 shares held; rights to
expire on June 16. Price—$50 per share. Proceeds—To
increase capital and surplus. Underwriter—None.

Chicago Great Western Ry.
26, the ICC
for exemption of
—

and Union Securities Corp.

(jointly).

Refining Corp.

Fund,

Inc.

Peabody

posal to mutualize this Fund, a block of capital stock
may be offered publicly through Stone & Webster Se¬
associates.

curities Corp., New York, and

Colorado-Western Pipeline Co.
announced company has

was

rado P. U. Commission for authority to build a
natural gas pipe line, in Colorado, to be

additional $40,000,000 of senior debentures later j
in 1954. Proceeds—For construction expenses and to re¬

pay a bank loan of $25,000,000.
Underwriter—To be
■determined by competitive bidding.
Probable bidders:

IHalsey, Stuart & Co. Inc.; Morgan Stanley & Co.

25

it

Power

&

Light Co.

reported

was

v

company

may

later this

year

issue and sell about $15,000,000 of first mortgage bonds.
Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; White, Weld
& Co.; Lehman Brothers; Merrill Lynch, Pierce, Fenner

Beane; Glore, Forgan & Co. and Harriman Ripley &
(jointly).

Co.

Feb.

Co., Philadelphia, Pa.

20

it was announced stockholders will vote April
increasing the authorized common stock (par $2.50)
from 500,000 shares to 1,000,000 shares. There are pres¬
ently 276,088 shares outstanding and an additional 43,217

22

on

reserved

are

for

conversion

of

debentures

and

the

remaining 180,695 shares are available for the em¬
ployees' stock bonus plan. The proposed increase in
capitalization is necessary to provide additional shares
to finance the continued growth of the company, or if it
seems advisable for stock dividends or a stock split. Un¬
derwriter—Estabrook & Co., New York and Boston.
General
March

22

Acceptance Corp.

it

was
reported company plans registration,
future, of $4,000,000 convertible debentures
due 1984 (with warrants). Underwriter—Paine, Webber,

in

1954 from sale of bonds
common

Putnam

stock:

Chas. W. Scranton & Co., and Estabrook & Co.
be placed privately.

IBonds may

Curtis.

^Consolidated Edison Co. of New York, Inc.

Equipment Corp.

April 2 it was announced stockholders will vote April
on increasing authorized convertible preference stock
from 15,000 to 25,000 shares; the authorized preferred
stock from 150,000 to 250,000 shares and the authorized
common
stock from 1,500,000 to 2,000,000 shares. Pur¬
pose—The increases in stock are being sought so that
the company will have available additional authorized
unissued stock

to

be

used

when

considered

advis¬

cluding, but not limited to, the acquisition of new busi¬
financing of new construction, payment or prepay¬
outstanding indebtedness, restoration of working
capital, granting of additional employee stock options
under the plan approved by stockholders in 1949, and
for additions to working capital.
Underwriters — The
First Boston Corp. and Tucker, Anthony & Co.
ness,

ment of

April

Tthese shares.

$2,500,000

9

it

Inc.

reported

was

through

plans to raise about

company

issuance

of

securities

new

Underwriter—McCormick

&

later

in

Co., Chicago, 111.

obtaining the necessary funds will be
Underwriters—To be de¬

termined by competitive bidding.

Probable bidders: (1)

bonds—Halsey, Stuart & Co. Inc.; The First Boston

Corp.; Glore, Forgan & Co.; Kuhn, Loeb & Co., Union
^Securities Corp.

and A. C. Allyn & Co., Inc.

(jointly);

"*White, Weld & Co.; Drexel & Co. and Equitable Secu¬
rities Corp.

(jointly); Harriman, Ripley & Co., Inc.

UGFor common

~"Weld

&

Co.

(2)

stock—Kidder, Peabody & Co. and White,

(jointly);

Blyth

&

Co. Inc.

and

Merrill

Tff.ynrh, Pierce, Fenner & Beane (jointly); Union Secu"

Krities Corp.;

Kuhn, Loeb & Co. and Smith, Barney & Co.

<jointly); Stone & Webster Securities Corp.; The First
Boston

Corp. and Lehman Brothers

(jointly).; Carl M.

3Loeb, Rhoades & Co. apd Wertheim & Co. (jointly).

: later
•.

8 it was announced company plans

than Oct.

;pay

the sale not

1, 1954 of about $2,1100,000 of common

stock, probably first to stockholders.

bank loan.




March 23 it

was

announced that the company may

it necessary to sell
of

unissued,

its

a

bond issue

Proceeds—To reV..

it

Inc.

(5/10)

reported company plans to issue and
sell 10,000 shares of 5% cumulative preferred stock
(par
$100) and 85,909 shares of common stock (latter to stock¬
holders

on

was

l-for-10

a

basis).

Proceeds—For expansion

Underwriters—The First Trust Co. of Lincoln,
Neb.; and Cruttenden & Co., Chicago, 111.

program.

Keystone Portland Cement Co.
April 7 it was announced that following a four-for-onl J
split-up of the common stock, a public offering will be
made. There are presently outstanding
136,434 common
shares, of which 82,274 shares are owned by a group of
investment bankers headed by Shields &
Co., New York,
Offering—Tentatively expected early in May.

Koppers Co., Pittsburgh, Pa.
March 29

stockholders voted to
stock

increase the authorized

from

2,000,000 shares (1,867,125 shares
outstanding)' to 3,000,000 shares. There are no imme¬
diate plans to issue any of the additional stock. Under¬
writer—The First Boston Corp., New York.

Long

Island

March 4 it
to

issue

was

Lighting Co.

announced company

additional

common

stock

plans later this

year

and

mortgage bonds
to finance its construction
program, which will require
about $70,000,000 additional financing.
Underwriter—
For bonds to be determined by competitive
bidding.
Probable bidders:

Halsey, Stuart & Co. Inc.; W. C. Langley & Co.; Blyth & Co., Inc. and The First Boston Corp.
(jointly); Smith, Barney & Co. Underwriters for com¬
mon stock may be Blyth &
Co., Inc., The First Boston
Corp. and W. C. Langley & Co. and associates.
Louisville & Nashville RR.

or

find

to issue the balance

an

reported that the company may issue and

was

issue of bonds late in

1954.

Proceeds—To retire

$24,610,000 Atlanta, Knoxville & Cincinnati Division 4%
bonds due May 1, 1955, and for general corporate pur¬
poses. Underwriters—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.; White, Weld & Co. and Salomon
Bros. & Hutzler (jointly).
„

Metropolitan Edison Co.
Dec. 16 it was reported company may sell in 1954
about}
$3,500,000 first mortgage bonds due 1984. Proceeds—Foe
construction program.
Underwriters—To be determined
by competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; White, Weld & Co.; Kidder, Peabody & Co.
and Drexel & Co.
mon

(jointly); Kuhn, Loeb & Co. and Salo¬
(jointly).

Bros. & Hutzler

Missouri Public Service Co.
28

it

was

announced

company plans to issue and
stock and borrow $18,000,000
proposed acquisition of
1,500,000 shares of common stock of Gas Service Co. of

$14,000,000 of

from banks

in

common

connection with

Kansas

City, Mo., at a total cost of $3?,000,000. Follow¬
ing consummation of proposed merger of the two com¬

panies, it is planned to sell $9,000,000 of first mortgage
bonds, $2,500,000 of debentures and 65,000 shares of
preferred stock (par $100). Proceeds — To retire bank
loans.

Underwriter—For

common

shares, of which there are
149,739.35 of $5 par value. As the company's shares are
now selling on the New York Stock
Exchange at about

$7.50 per share it is necessary that stockholders on April
13 approve issuance of the unissued shares before they

March

stock

(now in regis¬

tration): Kidder, Peabody & Co.

be

can

sold

at

common

a

premium.

Proceeds—To

be

used for

financing Granduc Mines, Ltd., in which Granby

owns

interest.

an

Jan. 27 it

was

announced company

bonds due

an

For

plans to sell around

issue of about $16,500,000 first mort¬

1984 and

preferred stock (par $100).
termined by

40,000

shares of cumulative

Underwriter

competitive bidding.

—

To be,de¬

Probable bidders: (1)

bonds—Halsey, Stuart & Co. Inc.; Union Securities

(jointly); The First Boston Corp.; Harriman Ripley &
Co.

and

17

sell

it

late

was

this

reported that company plans to issue
year some additional first ihortgaga

bonds.

Proceeds—To repay bank loans and for new con¬
struction. Underwriter—To be determined by competi¬

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc., White, Weld & Co. and MerrUI
Lynch, Pierce, Fenner & Beane (jointly); Blair, Rollins

Michigan Electric Co.

November, 1954,
gage

Montana-Dakota Utilities Co.

tive

Indiana &

Corp., Goldman, Sachs & Co. and White, Weld & Co.

Eastern Utilities Associates
: March

Granby Consolidated Mining, Smelting
& Power Co., Ltd.

Philip A., Fleger, Chairman, stated that about

^$24,000,000 of new capital will be required during 1954

tor

Kansas-Nebraska Natural Gas Co.,

sell

Duquesne Light Co.

^announced in the near future.

•

March 24

Dec.

it Glass Fibers,

1954.

;and that plans for

Equitable Securities Corp. Meeting — Stockholders will
vote April 27 on approving new
financing.

Nov. 12 it

27

.April 8 it was announced stockholders will vote May
17 on increasing common stock (no par) by 2,000,Q0O
tshares.
The company has no definite plans to issue

iMarch 8,

Brothers and Bear, Stearns & Co. (jointly); Kuhn, Loeb
& Co., Salomon Bros. & Hutzler and Union Securities

near

able by the board of directors for corporate purposes in¬

reported company plans to raise between

—

common

Foote Mineral

and

Connecticut Light & Power

sell in the
$16,000,000 first mortgage bonds. Pro¬

To repay

bank loans and for new construction.
Underwriters—To be determined by competitive bidding;
Probable bidders: Halsey, Stuart & Co. Inc.; Lehman.

sell

an

Underwriters—For

Merrill Lynch, Pierce, Fenner &
Common stock was increased by stock¬

and

General Precision

announced that company

^10,000,000 and $20,000,000 in

For

M^rch 25 from 2,500,000 shares to 5,000,000

Florida
Jan.

System, Inc.

plans early in
June to issue and sell $40,000,000 of senior debentures

.& Co.;

Co.

&
on

Jackson &

Vice-President.

ceeds

shares, and the preferred stock from 250,000 shares to
500,000 shares.

$21,500,-

financed
through sale of about 70% of bonds and 30% of equity
capital. John R. Fell, a partner of Lehman Brothers, is

was

—

applied to Colo¬

tOOO

Columbia Gas

Underwriters

construction.

new

Beane (jointly).
holders

shares

reported that, in connection with pro¬

was

For

—

Co. Inc.

April 12 it was reported this company (formerly Petco
Corp.) plans early registration of 50,000 shares of con¬
vertible preferred stock (par $20) and between 750,000
to 1,000,000 .shares of common stock. Proceeds—For ex¬
pansion. Underwriter—Loewi & Co., Milwaukee, Wis.

announced that company may

was

latter part of 1954

stock

(first to common stockholders), Kidder,
Peabody & Co. and Merrill Lynch, Pierce, Fenner &
Beane (jointly).
For bonds, to be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.

&

Clark Oil &

Kansas City Power & Light Co.
March 8 it

Corp. (jointly); Glore, Forgan & Co.; Blyth & Co., Ina

Inc.; The First Boston Corp.; Lehman Brothers; Kidder,

dismissed the company's application
an issue of $6,000,000 collateral trust
bonds due Nov. 1, 1978 from competitive bidding. Pro¬
ceeds
To repay bank loans and for capital improve¬
ments.
Underwriters—May be determined by competi¬
tive bidding. Probable bidders: Halsey, Stuart & Co. Inc.
and Union Securities Corp. (jointly); Kidder, Peabody
& Co. and White, Weld & Co. (jointly);-The First Boston
Corp.; Merrill Lynch, Pierce, Fenner & Beane. On April
23, last year, the road rejected the only bid made of
98.05% for a 5%% coupon by Halsey, Stuart & Co. Inc.
Feb.

was

Expected in June.

and The First Boston Corp.
(jointly); White, Weld & Co*
and Shields & Co. (jointly); Harriman
Ripley & Co., Inc.*

common

by

stock.

For construction program.

March 27, it was announced

Proceeds

.and

—

—

Florida Power Corp.

Underwriter—May be
competitive bidding. Probable bidders:
Bljhh & Co., Inc. and Kidder, Peabody & Co. (jointly);
Harriman Ripley & Co. Inc.; Coffin & Burr, Inc.

JSDec. 7 it

Proceeds

To be determined by competitive bid¬
ding, Probable bidders: Halsey, Stuart & Co. Inc.; White*
Weld & Co,; Glore, Forgan & Co.; Kidder, Peabody A
Co.; Union Securities Corp., Salomon Bros. & Hutzler
and Merrill Lynch, Pierce, Fenner & Beane (jointly)?
The First Boston Corp.; Lehman Brothers.
Offering-

(5/14)

determined

^and

in

Underwriters

registration statement will be filed with the SEC to
a new offering.
There are presently author¬
shares of no par value, of which 33,750 shares
will be outstanding following present offering and sale
of 30,000 shares of common stock at $10
per share.
Business—A discount and lending organization. Office—
Fidelity Bldg., Dallas, Tex. Underwriter—May be Boylen, Kasper & Co., Pallas, Tex.
; ized 35,000

ceeds—For construction program.

March 5 it

reported company tentatively-plans to
1954 about $6,000,000 first mortgage

was

sell

authorize

that the company plans new
financing late this 'summer which would require issu¬
ance of common stock and probably $10,000,000 of bonds.

.a

it

and

bonds due 1984.

expects to sell $5,000,000 of convertible pre¬
ferred stock late in the second quarter of 1954, but that
details of the offering are not available at this time. Pro¬

the company

March 5 it

16

issue

a

April 1 reported that

William F. Wyman, President, on

March 12 it

Dec.

announced company intends to

Central Maine Power Co.

Colonial

53

Inc.; Kuhn, Loeb & Co.; (2) for preferred—The First

Boston Corp.;

Smith, Barney & Co.; Lehman Brothers;

Union Securities Corp.

&

Co. Inc.

'

Montreal Transportation Commission
March

22

it

was
reported Commission may issue and
$30,000,Q00 to $35,000,000 bonds for refund¬
ing purposes. Underwriter—If through competitive bid¬
ding, probable bidders will include: Shields & Co., Hal¬
sey, Stuart & Co. Inc. and Savard & Hart (jointly);
Kuhn, Loeb & Co., Glore, Forgan & Co. and Salomon.
Bros. & Hutzler
(jointly); Lehman Brothers; White,
Weld & Co., Union Securities Corp., and Blyth &
Co.,
Inc. (jointly); Dominion Securities Corp.

sell around

Continued

on

page

54.

1

54

The Commercial and Financial Chronicle...

(1826)

Continued from page

April 12 it

April 1 it was reported company plans to offer aboul
400,000 shares of capital stock (no par) for subscription
by stockholders later this year or early next year, sub¬

ject to approval on April 29 of a proposal to increase the
authorized
capital stock from 4,000,000 to 6,000,000
Proceeds—For

new

construction.

Underwriter-

Dillon, Read & Co., New York, handled secondary offer¬
ing in 1943.
New
16

Dec.

reported this company tentatively

was

1954 of about

issue and sale in

bonds due 1984.

plani

$3,000,000 first mortgage

Proceeds—To repay bank loans and for

construction.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co. and Lehman Brothers
(jointly); Equitable Securities Corp.; Union Securities
Corp. and White, Weld & Co. (jointly); Merrill Lynch,

new

Pierce, Fenner & Beane.
New

Orleans

Feb. 8 it

Public

Service

Inc.

reported company plans to offer for sale
mortgage bonds due 1984 late this

was

of first

$6,000,000

Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Equitable Securities Corp.; Union Securities Corp. and
Harriman Ripley & Co. Inc. (jointly); Lehman Brothers;
Kidder, Peabody & Co. and Stone & Webster Securities
Corp. (jointly); The First Boston Corp.; White, Weld &
year.

Co.

the year. Previously, the company had
an
issue of $15,000,000-first mortgage

new

until later in
planned to float

bonds, due 1984,

competitive

bidders: Halsey, Stuart
Lehman Brothers;
Blyth & Co., Inc.; Kuhn, Loeb & Co.; Merrill Lynch,
Pierce, Fenner & Beane and Union Securities Corp.
(jointly); Harriman Ripley & Co. Inc.; The First Boston
Corp.
Sutton

(jointly).

Public

April

20

Electric & Gas Co.

Service

filed

company

(5/26)

basis

with sale

of

thereafter expects to market

debentures

due

1974.

for

each

for

May

nine

It

June.

or

Proceeds—For

construction

Co.

new

construction.

and

Lawrence

to be not less than
bank loans and for

Underwriters—Hayden, Miller & Co.
Cleveland, Ohio.

Cook & Co., both of
Registration—Planned for April 27.

it Northern Pacific Ry.
Bids

Texas Eastern Transmission

(4/22)

trust certificates to mature

to

1969,

Co.

inclusive.

annually from May 14, 1955
Probable bidders: Halsey, Stuart &

Inc.; Salomon Bros. & Hutzler; Kidder, Peabody &

Co.

Northern States Power Co.
Feb. 8 it

was

and sale of

that the

be

Underwriters

—

To

determined

by competitive bidding. Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Lehman Brothers and

Riter & Co.
(jointly); Smith, Barney & Co.; Glore,
Forgan & Co.; Merrill Lynch, Pierce, Fenner & Beane,
Kidder, Peabody & Co. and White, Weld & Co. (jointly);
Equitable Securities Corp. and Union Securities Corp.

<

1

stockholders

approved

issuance

of

$20,000,000

Trans-Canada

March 26 it

construction

1954

estimated

program,

Pembina

in

Alberta

Pipe Line Co.

(Canada)

to

Edmonton.

Financing will be handled
jointly by Mannix Ltd. of Calgary, Dome Exploration
(Western) Ltd. of Toronto, and Carl M. Loeb, Rhoades
& Co. of New York.

\

Feb.
27

23

on

was

shares to

common

April 27

stock from 740,000

1,000,000 shares.

No immediate plans to issue
any of the additional stock have been announced.
Un¬
derwriters—Harriman Ripley & Co.
Inc., and

Smith,

Barney & Co., New York.
Pioneer Natural
March 26, P. C.

Gas Co.

Spencer, President of Sinclair Oil Corp.,

stock

stock.

and

holdings of 769,721 shares of Pioneer

384,860 shares of Westpan Hydrocarbon Co.

Underwriter—Union Securities

underwrote recent sale of Sinclair's

Interstate

plans for

Gas

Co. stock.




Corp., New York,

holdings of Colorado

Pipe Lines, Ltd.

annouced

New

:

-

,

that the cost of the

to

do

bank

will

vote

lo,gns

White, Weld & Co. and
Corp., both of New York.

possible

a

stock at

March 1

Carolina

April

it

was

sell

& Gas

$12,000,000

of

bonds.

intends to make

Proceeds—To

pay

shares

of

$1.28

Proceeds—To

$10,000,000 of additional

was

reported

7,500,000 shares to 15,said it has no immediate
shares.

Underwriter—

cumulative

repay

bank

stock

(par $25)
construction

and

&

for

Co.,

loans

Underwriter—Blyth

issue of 100,000

an

preferred

Inc.,

San

common

-

Fran¬
•

West Coast Transmission Co.

Oct.

it

was

announced

common

that

company

now

plans to

long-term debentures and 4,100,000 shares of
stock

to be

sold

finance construction of

a

to

the

Proceeds—To
pipe, line from tho

public.

natural gas

Canadian Peace River field to western Washington and

Oregon. Underwriter—Eastman, Dillon & Co., New York.
West Texas Utilities Co.

March 8 it

was

announced company

plans to refund its

$5,500,000 bank loan in the Spring of 1955 through the
-

,

issuance and sale of first mortgage bonds. Underwriter—
To be.determined by competitive bidding. Probable bid¬
ders:

stock

.

plans issuance and

14

ordinated
„

'

company

proposal increasing the

a

from

issue $29,000,000 in l-to-5^-year serial notes; $71,000,000
in 20-year, first mortgage bonds; and $24,440,000 in sub¬

for

Southern New England Telephone Co.
it

stock

• West Coast
Telephone (Jo.
April 13 stockholders voted to create

-

Southern New England Telephone Co.
March 26 it was reported company, in addition to de¬
benture financing, plans to issue and sell to its stock¬

•

common

Dillon, Read & Co., New York.

Underwriter—May be determined by
competitive bidding.
Probable bidders: Halsey, Stuart
& Co. Inc.; The First Boston
Corp. and Lehman Brothers
(jointly); Kidder, Peabody & Co.; Union Securities
Corp.
Previous financing was done privately.

March 26

Co. of California

an

Co., is planning to issue

Underwriter—None.

Corp., New York.

000,000 shares. The company
plans to market the additional

construction.

about

appropriate time, when conditions warrant.

Oil

authorized

reported this company, a subsidiary of

and

Securities

cisco; Calif.

Generating Co.

South Carolina Electric

Webster

refunding of the outstanding $6 preferred

an

Underwriter—Union Securities

Canada, Ltd.

announced company

&

ferred stock, without par value, into 1,000,000 shares of a
new
class of preferred stock, $50 par value, making

initial public offering of its common shares in the United
States to realize at least $5,000,000.
South

Stone

Tri-Continental Corp.
f
March 30 stockholders voted to reclassify 500,000 shares
of presently authorized but unissued $6 cumulative pre¬

program.

Scudder Fund of

plans later this year
to repay temporary

company

financing

permanent

necessary to pay for new construction esti¬
mated to cost about $11,000,000 for 1954. Underwriters—

increasing the authorized common stock from 5,000,000 to 10,000,000 shares and the authorized indebted¬
ness of the company from $25,000,000 to
$50,000,000. The
company has no
specific financing program.
Under¬
writers—Previous offering of $24,952,800 3% convertible
debentures, in September, 1953, was underwritten by
Drexel & Co., Smith, Barney & Co. and Merrill Lynch,
Pierce, Fenner & Beane.

was

reported

was

some

April 13 stockholders approved
stockholders

announced

was

Halsey, Stuart & Co. Inc.; Blyth & Co., Inc. and
Salomon
Bros.
&
Hutzler
(jointly); Merrill Lynch,
Pierce; Fenner & Beane; Equitable Securities Corp.;
Glore); Forgan & Co.; Kuhn, Loeb & Co. and Lehman
Brothers (jointly); Kidder, Peabody & Co.; The First
Boston Corp.

sale of about

$15,000,000 debentures. If competitive bid¬
ders may include
Halsey, Stuart & Co. Inc.; Lehman
Brothers and Salomon Bros. & Hutzler (jointly); Kuhn,
Loeb & Co.; The First Boston
Corp.; Merrill Lynch,
Pierce, Fenner & Beane; White, Weld & Co. and Kidder,
Peabody & Co. (jointly); Morgan Stanley & Co. Offering
—Expected in May or June.
■

announced that Sinclair has under formulation
the disposal of its

-

Transcontinental Gas Pipe Line Corp.

Paper Co.

it

(par $25).

announced stockholders will vote

increasing the authorized

.

building
pipeline would be ap¬
proximately
$292,000,000, ' which would be financed
through the issuance of about $36,500,000 each of com¬
mon stock and debentures and
$219,000,000 of first mort¬
gage bonds. Underwriters—Lehman Brothers and Wood,
Gundy & Co., Inc., both of New York.
was

March 16 it

on

holders

Pennsylvania Glass Sand Corp.
Feb. 26 it

■r

may

new

April 14 it was announced company has been granted
the right to obtain a permit to build a 72-mile
pipe
line to transport crude oil from the Pembina Oil Field

V

.

,

Edison Co..

Underwriters—The First Boston Corp.,
York, and Collin, Norton & Co., Toledo, Ohio.

and

300,000 shares of preferred stock (par
$90) and increased the authorized common stock from
3,404,135 shares to 5,500,000 shares. Proceeds—To com¬
plete certain acquisitions and to repay short-term bor¬
rowings. Underwriter—May be Allen & Co., New York.

vote April

present.

that the
raise new money this year through the
sale of $1,000,000 first mortgage bonds or from tempo¬
rary bank loans for its 1954 construction program, which,
it is estimated, will cost $1,661,000. Underwriters—May
be determined by competitive bidding.
Probable bid¬
ders: Halsey, Stuart & Co. Inc.; Smith, Barney & Co.,
and Glore, Forgan & Co.
(jointly); Union Securities
Corp.; White, Weld & Co.; Equitable Securities Corp.
company

Jan. 29 it

debentures

'

<

cumulative preferred stock from 300,000 shares to 500,000
shares. The company does not plan to do any financing at

Brothers; Merrill Lynch, Pierce, Fenner & Beane.

(jointly); Kuhn, Loeb & Co., A. C. Allyn & Co. Inc. and
& Co. (jointly).

Ogden Corp., New York

-

April 20 stockholders voted to increase the authorized

Inc.; Equitable Securities Corp.; Kuhn, Loeb &
Co.; Stone & Webster Securities Corp.; The First Boston
Corp. and Salomon Bros. & Hutzler (jointly); Lehman

Wertheim

April

Toledo

Union

bonds due 1984 in October of 1954.

Corp.

stockholders will

announced

was

K

Co.

&

Scott

approximately $20,000,000 of first mortgage

by

'

•

by Merrill Lynch, Pierce, Fenner & Beane. An issue of
$8,000,000 bonds were also sold last year at competitive
bidding, with the following making bids: Halsey, Stuart

(Minn.)

reported company is planning the issuance

determined

be

27 on increasing the authorized common stock from
7j-*
500,000 shares to 10,000,000 shares. Underwriter—Dillon,
Read & Co. Inc., New. York.
*

r

expected to be received up to noon (EST) on
April 22 at office of company, 14 Wall St., New York,
N. Y., for the purchase from it of $4,575,000 equipment

Underwriters—To

Inc.; Stone & Webster Securities Corp. and White,
(jointly).

March 5 it

St. Joseph Light & Power Co.
March 30, C. A. Semrad, President, announced

are

Co.

Weld & Co.

Rockland Light & Power Co.

•

'

Business—Air

''y'

competitive bidding. Probable bidders: Halsey, Stuart &

April 1, Rockwell C. Tenney, Chairman of the Board, an-,
$14,000,000, will require further financing. Common
stock financing to stockholders in 1953 was underwritten

authorized company
common stock, exabout May 18, with

construction.

new

at

(5/18)

>/;

■

of the proposed cross-Canada gas

nounced

Northern Ohio Telephone Co.

Kan.

private.

or

Tennessee Gas Transmission

Puget Sound Power & Light Co.
April 5 the directors approved a program designed to
refund the company's long-term debt. Bidders may in¬
clude Halsey, Stuart & Co. Inc.; Lehman Brothers; Stone
& Webster Securities Corp.

York and San Francisco.

April 5 the Ohio P. U. Commission,
to issue and sell 117,500 shares of
pected to be offered to stockholders
a
14-day standby. Price—Expected
$20 per share. Proceeds—To reduce

Wichita,

Corp.,

was reported company plans issuance and sale
of $20,000,000 of debentures in June and $25,000,000 of
first mortgage pipe line bonds in July. Proceeds—For

preferred, to redeem outstanding 4.70% preferred issue
and from sale of bonds, to pay for property additions
ami improvements. Underwriter—For preferred, Morgan
Stanley & Co., Drexel & Co. and Glore, Forgan & Co.
For bonds, to be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Morgan
Stanley & Co. and Drexel & Co. (jointly); Kuhn, Loeb
& Co. and Lehman Brothers (jointly); The First Boston
Corp. Bids—Expected to be received around May 26. •

pro¬

Blyth & Co., Inc., New

A.)

reported company may do some financing

Jan. 27 it

ing mortgage bonds and 249,942 shares of cumulative
preferred stock (par $100). Proceeds — From sale of

$24,000,000 of sinking fund

Underwriter—Probably

gram.

share

new

one

scheduled

was

year, either public
circulating equipment, etc.

Jersey Board of P. U. Commissioners covering the pro¬
posed issuance and sale of $50,000,000 first and refund¬

$300,000 of new securities. Underwriter—Eisele & King,
Libaire, Stout & Co., New York.

the

Probable

later this

application with the New

an

bidding.

(O.

Feb. 15 it
•

holders

on

Co.

company

& Co. Inc.; Equitable Securities Corp.;

early in 1954. Underwriters—To be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.
Inc., Kuhn, Loeb & Co.; The First Boston Corp.; Harris,
Hall & Co. Inc.; Harriman Ripley & Co., Inc. and Union
Securities Corp.
(jointly); Lehman Brothers; Kidder,
Peabody & Co.; Blyth & Co., Inc. and Smith, Barney &

Riddle Airlines, Inc.
Jan. 7 it was reported company plans to file a letter of
notification soon to issue an aggregate value of up to

shares held

Electric

plans to issue and
September, 1954, $10,000,000 first mortgage bonds.
refund bank loan of $7,500,000 and for
construction.
Underwriters—To be determined by

loans, with permanent financing delayed

29 it was announced company has applied to the
Nebraska Railway Commission for authority to issue
365,400 shares of common stock to be offered to stock¬

.

&

announced

was

Proceeds—To

Northern Natural Gas Co.

C). March

Gas

sell in

was reported company plans to finance its
construction
program
through temporary bank

Co.

Jersey Power & Light Co.
it

March 8 it

1954

National Fuel Gas Co.

shares.

Southwestern

Service Co. of Colorado

Public

53

Thursday, April 22, 1954

Southern Pacific Co.
Bids

are

expected

to

I

(4/29)

be received

by the company in
New York up to noon (EDT) on
April 29 for the pur¬
chase from it of $7,905,000 equipment trust

certificates,

series

Western Pacific RR. Co.

March-10
from

applied to the ICC for exemption
bidding on its proposed $22,500,000

company

competitive

debenture issue.

The

30-year

5%

income

securities/

would/be offered in exchange for 225,000 of $100 par
preferred stock, of the more than 300,000 shares out¬
standing. The company plans to offer $100 of deben¬

tures, tone-fifth of a share of common, and an undeter¬
mined cash payment for each share of
preferred stock
and then redeem the then
remaining outstanding

83,211

shares of preferred stock.

NN,

dated April 15, 1954 and due annually to
April 1, 1969. Probable bidders: Halsey, Stuart & Co.
Inc.; Salomon Bros. & Hutzler; Kidder, Peabody & Co.

Westpan Hydrocarbon Co.
See Pioneer Natural Gas Co. above.

•

Number 5318

Volume 179

...

The Commercial and Financial

\

Continued from first page

everything, but particularly perhaps about the newest and
most potent developments in atomic physics. Some like
Fuchs apparently proceeded quite knowingly and deliber¬
ately to steal for the Kremlin; others doubtless regarded
the Kremlin as all-worthy and talked much too freely with

• 7-

W We See It
'Twenties,
strictly conformist, reflected

(-doubtedly stimulated the movement. Even the
which in many respects was

intellectual rebellion which revealed

certain

a

of the strange

some

and

!

economic doctrines of the New Era
mores of personal con¬

try at the very beginning of the 'Thirties—and inciden¬
tally had been heralded in rural areas years before 1929
—soon
revealed- that there had been quietly brewing
us

Europe in
scoff at what
had been regarded as commonsense in business and eco¬
nomic affairs and to classify as a "creed outworn" a very
:, substantial part of the philosphy which had
up to that
C time been regarded as the essence of true Americanism. •
Those of us who happened to be in touch with what was
going on among the so-called intelligentsia of the nation
and in many, if not most, of our institutions of learning,
of the drift of social and economic

bizarre,

*

tists of the time. Geniuses in

mathematics

or

intimately associated with
incredible naivete in matters that were more directly and

immediately connected with everyday life.

-

in political and

Now, this ferment was soon reflected

i other policies and other programs
or

and for
'

fact, however, that these notions as

not overlook the

-

of the kind that we Americans

not

were

which have not proved

conducive to real economic and social progress,
this reason it was and is to be regretted. We must

helpful

i

such

have ever be-

of thought

fessed to believe in full freedom

speech

v

*

so

their

own

throw

-

long

as

well

as

of

neither was used as a means or a pretext

philosophies to which
thinking did not lead them, or by force overorder already adopted and practiced by the

the

7-

'

majority.

;

as

oblige others by force to accept

to
,

always pro¬

trying to suppress by force. We have

In such

situations

as

always

throw

everything they do not like and by force

lence to establish
:

in conspiring to over¬

some

other system more to their

Ordinarily, in this country at least, these

*

not

are

create

trouble-makers

are

for the most part unable to

happened, however, that dur-

and

*

these

ing

liking.

serious situation. It

numerous

a

and vio¬

years

of-ferment

;

there arose a

movement

able to arrogate

centered in Russia which was somehow

each

for

36

common

subscribe

subscription

ing of subordinated
debentures

The

debentures.
convertible

are

into common stock of the corpora¬
tion

and after Jan. 1, 1955

on

itself the style,

unto

price

conversion

is

debentures also will

ject to redemption at regular re¬
demption
prices
ranging from
103V2%

to

par,

folk

and

dissatisfied with what was around
of

new

a

and perfect

tliem

and of prophet

political system. Proselyting

throughout the, world was, moreover, one
tenets of this new

of the basic

regime.

What Better Fishing

Grounds?

What waters could furnish better

at

Net.

proceeds from the sale of
will be added to

the-debentures

gener&kiunds of the corporafunds

which had flooded this country

(and

a

cash to be realized from op¬

erations during 1954,

good many others

that

matter)

about

naive

the

by the 'Thirties? Who wbuld be more
real

nature

of

the

Kremlin than the

close

the

who had never
come
intimately into contact with life about them? It
is perhaps harder to understand the Hisses and the

expenditures
to

handle

of

gas

Whites, than some of the pure scientists who went astray.
In any
other
were

in

with rebels in
study and endeavor, among whom there

event many of these latter consorted

the New Gulf

lines

of

always agents of the Kremlin to tell of the

Moscow, and the effectiveness of the

of communism—and,

of

course,

miscalled system

to obtain for the Politburo

all the information that could be obtained




idealism

about almost

required

Hooker

a

to stockholders of record

of

business

3,

May

as

of

the close

1954.

ANSLEY WILCOX 2nd

Secretary

-cyfcwz.

Notice ot

to be held

May 5,1954

that

deliver

System through

Interstate Gas Com¬

meeting of stock¬
ALLIS-CHALMERS
COMPANY, a

Southern

corporation (hereinafter
"Company"), will be
the general offices of the

Edison

of

line beginning late this year.
interconnected

System, Inc.,

natural gas

of the corpora¬

tion, 14 operating

subsidiaries and

subsidiary

service

company.

the

called
at

Company, 1126 South 70th Street,
West Allls, Wisconsin, on Wednes¬

day, May 5, 1954, at twelve o'clock
noon (Central Standard Time), for
the

following

or

purposes,

any

thereof:
To elect

2.

To

Board of Directors;

a

and

consider

act

upon

a

proposal, recommended by the'
Board

Directors,

of

amend
of

to

Article IV of the Certificate

Incorporation

in

in the

forth

set

the respects
State¬

Proxy

ment;

;

consider and

To

transact any

other business that may prop¬

erly come before the
or

meeting

adjournment thereof.

any

Holders ot common stock will be
entitled

to

vote

on

all

matters

the meeting.

before

come

subsidiaries

gaged in the
storage,

are

en¬

production, purchase,

transmission and distribu¬

to

posed Amendment to Article IV of
the Certificate of Incorporation, to

authorized number of
shares of
$100.00 par value pre¬
ferred stock from 259,481 to 618,854

increase

tion of natural gas.

the

shares.

1954 as the record date
determination of the com¬
mon stockholders and the preferred
stockholders entitled to notice of
22.

the

to

vote

By order of the

Certain sub¬

other

and sell gasoline

hydro-carbons and one

the meeting
thereof.

at

adjournment
W.
Vice

sidiaries produce

of Directors has fixed

The Board

and

Dated:

CUMULATIVE PREFERRED STOCK

E.

or any

Board of Directors,

HAWKINSON,
Secretary.

President and

March

22,

1954.

DIVIDEND

NO. 17

CUMULATIVE PREFERRED STOCK

4.88% SERIES
DIVIDEND

NO. 26

The Board of Directors has

authorized the payment of the
following quarterly dividends:

251/2 cents per share on the
Cumulative Preferred Stock,
4.08% Series;

Holders

preferred stock will be entitled
to vote at the meeting, hut only on
the proposal, included in the pro¬

March

Company

DIVIDENDS

4.08% SERIES

1.

for

Operating

California

Delaware

to?

and

annual

the

holders

MANUFACTURING

in

system composed

and

declared

ANNUAL MEETING OF STOCKHOLDERS

large additional

The Columbia Gas

a

of

on April
14,
quarterly dividend of
Fifty
Cents
($.50)
per
share on its
Common Stock, payable May 28,
1954

1954

MFG. CO.

to be received by

The Columbia Gas

an

Dividend

Directors

Company

Milwaukee, Wisconsin

3.

market areas the

is

Stock

of

Board

^ALUS-CHALMERS

contemplates
expenditures of about $105,000,000,
with a large portion of the pro¬

pany

to stockholders of record as of
of business June 3, 1954.

busi¬

of

April 15, 1954, will be entitled to vote
meeting.
*
By order of the Board of Directors.
W. H. OGDEN, Secretary.

ot

geniuses in physical sciences and the like

April 14,
dividend of

such

construction program

volume

for

will be avail-

of the 1954 construe-/
tion program. The company's 1954^
able for part

order

at

record

of

j

Hooker

of
on

quarterly

a

E'^ctrcchemical

held, pursuant to the By-laws, at the principal
office of the Company in Roanoke, Virginia, on
May 13, 1954, at 10 o'clock A. M.,
to
elect three Directors for
a
term of three

ness

Company

NOTICE IS HEREBY GIVEN,

posed

fishing than those

close

The

Thursday,

yeais.
Stockholders

Dividend

Directors

•

Common

of Nor¬
will be

Meeting of Stockholders
Western
Railway
Company

plus accrued in¬

terest.

and

of

declared

1954

the

Annual

be sub¬

and title of friend to all- who were :r^vgijable at the beginning of 1954,
'

Stock, Series B
Board

Preferred

Second

Cumulative

25,

OF

OF

held
-

business

only
convertible in

$131/3 per share subject to adjust¬
ment
under
certain
conditions.

the

of

redeemed,

being

The

1955.

The

to- stockholders of

close

including Dec. 31, 1958 un¬

previously

less

and

share on its $4.25 Cumula¬
Stock, payable June 25,
record as of the
June 3, 1954.

Preferred

1954

1954

5,

ANNUAL MEETING
STOCKHOLDERS

NOTICE

The

April

Virginia,

Hooker

April 14,
dividend of

on

quarterly-

a

tive

RAILWAY

.

Halsey, Stuart & Co. Inc. heads

per

Company

$1.05 per share on its Cumulative Second
Preferred Stock, Series B, payable June

AND WESTERN
COMPANY

NORFOLK

Roanoke,

war¬

syndicate that will purchase the
unsubscribed portion of the offer¬

$1.0625

1954

rants.

a

declared

1954

of

Directors

of

Electrochemical

$13,596,000.

NOTICES

MEETING

Dividend

Stock
The •> Board

Electrochemical

be

will

$4.25 Cumulative Preferred

The

(EST) on April 21, 1954.
The
subscription offer will terminate
at 3:30 P.M. (EDT) May 19, 1954
to
by

COMPANY

non

idated net income of

ELECTROCHEMICAL

HOOKER

affiliated
public utility corhpanies for resale

sells natural gas to

3:30 P.M.

shares held of record at

Company have declared quarterly
No. 143 of one dollar and

dividend

its out¬
the right to their customers.
For the 12 months ended Feb.
to subscribe, at 100% of the prin¬
cipal amount, for $50,000,000 prin¬ 28, 1954, an unaudited account
showed the company and subsid¬
cipal amount of subordinated de¬
iaries had consolidated gross rev¬
bentures, qt the rate of $100 prin¬
enues of $238,379,000 and
consol¬
cipal amount of subordinated de¬

to and

this there are, of course,

certain number who take pride

unimpressed with

Pennsylvania, West Virginia, Ken¬

of

holders

evidenced

28,

COMPANY

standing common shares,

rights

May

The Directors of International Harvest¬

tucky, New York, Maryland and
Virginia. The System also has an
extensive wholesale business and

System, Inc.

The Columbia Gas

bentures

Com¬

stockholders

to

business

,

seventy-five cents ($1.75) per share on"
the preferred stock payable June 1;
1954, to stockholders of record at the
subsidiary produces and sells oil. close of business on May 5, 1954.
, •
Retail natural gas operations are
GERARD J. EGER, Secretary
conducted in the states of Ohio,

System Debens.

offering

the

the

ASHBY, Secretary.

B.

W.

1954.

er

is

of

close

of

Stock

1954,

15,

June
the

at

on

HARVESTER

dupes of agents of the Kremlin or are so
the need of discretion?

Gas

payable

record

declared

been

Capital
pany,

of

dividend

Fifty Cents ($.50) per share
has

of

STREET

RACK

2, Pa., April 21, 1954

quarterly

a

as

$25,000,000
a

,

A

Practical Matter

a

purely practical matter, assuming we still
have secrets and could in any event keep them, what are
we
to do with these men who are so likely to become
But

and

lieved in

1513

Phila.

INTERNATIONAL
As

the physical

sciences seemed to be somehow
>

COMPANY

METER

AMERICAN

are

all.

esteem of us

Halsey, Stuart Group

creeds
of the most brilliant of the physical scien¬

some

by

NOTICES

DIVIDEND

them; certain it is that we want to make use of their
gifts; obviously they are human beings sensitive to all the
things the rest of us feel; plainly if they are sincere and
above board we can hardly fail to concede them the right
to think as their own intellect suggests; and, so far as we
are concerned, the honorable among them is due the full

Underwrite Columbia

the social, political and economic

were

held

-

formerly

was

Riley & Co. for many years.

known, which of these
well balanced men are to be regarded

think¬

ing at these levels—a situation which later gave rise to the
cry that so many of these seats of learning were "hot¬
beds of socialism." Particularly extreme, often indeed

*

with

765 North Water

Smith

Mr.

Street.

press

rate by the time war broke out in

aware

The Marshall Co.,

v

.1939, it had become definitely the fashion to

well

Smith has become associated with

security risks? To be sure, we do not wish to sup¬

real

as

The Fashion to Scoff

were

when all the facts

even

brilliant but not too

Washington.

At any

Chronicle)

to The Financial

Incorporated

,

in

known?

But when aTe all the facts

were or are.

And,

very

a

(Special

MILWAUKEE, Wis.—Harold E.

ascertainable it is not difficult to know who

or

the traitors

substantial volume of heretical philosophical and economic notions. The pervasiveness of many
of these, stimulated afresh by the hardships of the depres¬
sion, made possible the success of the New Deal regime
among

known

are

55

Smith With Marshall Co.

doing, and still others just talked too much.
Not all the geniuses, and not all the nonconformists
—so we hope at least—did any of these things. But many
of them consorted with those who did. When all the facts/

itself in

crushing depression which broke upon the coun¬

duct. The

agents without fully understanding what they were

its

certain breakdown in the

a

(1827)

Chronicle

30V2 cents per share on the
Cumulative Preferred Stock,
4.88% Series.
The

above

dividends

payable May 31,1954,

to

are

stock¬

holders of record May 5,1954.

Checks will be mailed from the

Company's office in Los An¬
geles, May 31,1934.
P. C. HALE,

April 16,1954

Treasurer

58

The Commercial and Financial Chronicle... Thursday,

(1328)

Guards FHA

BUSINESS BUZZ

April 22, 1954

!

Independence

Another important

back¬

factor of the situation
fight over the inde¬
pendence of the FHA.
As a rule, but of course with
ground

^ Washington...
the-Scene Interpretations
huta the Nation's

And You

Capital

the

was

exceptions, Congress guards the
independence of agencies lad¬

li-

wmA*sm>

ling out

'■/% / /■/

to the public in

money

business way, like

a

banks, the
the

Home Loan Bank Board, or

«

-

influential

C.—Con¬

D.

WASHINGTON,

which

here

Meanwhile,

are

;

*

;

bear

VI

had

he

—

existence

did

building

builders

So

respect to Title VI

vince

the

it

to

cost

cial

an

to

minated.

The

istration,

on

postwar

pression,

and

Rept alive

as a

with

of

wanted

the

show

a

able

to

title

a

house

doesn't

fit its foundations.

housing legislation this session.
It

home. That
trying to

kill

may

the

"Dreamhouse"

bill, but housing is
along

Opposed

with
is

business

all

clearly
trend.

Finally, this background notes
that the Democrats themselves,
as
they saw how loose was
Title VI financing, got their
craws
full
of the
thing. Ray
Foley, the last Democratic'^
Housing and Home Finance Ad¬
ministrator, some three times
asked

indefinitely at not less than

the

termination

of

Title VI.

»

>•

Meanwhile, however,

Congressional Re¬

publicans' necks
this.

The

are

way

virtually

Administration

-

Housing Activity

the

is

a

ing

out

on

official

Congressional

Support Pro¬

even if not called such,
commitment for maintain¬

construction

annually

million housing units a

What will

and
one

year.

happen is that after

the

fury

gone

in¬

of

continuance of the housing con¬
struction boom.
Meanwhile
Great

facet

another
is

Scandal

threatens

which

is

this

of

that

housing
the

one

of

the

comforts

it

few

White

boom,
great

House

has. FHA, of course, is handling

only

of the housing
However,

25%

some

finance

FHA
official
will
be
frightened from stamping "ap¬
proved" on few if any loans
on.

Every

po¬

tential FHA lender also will be

mighty
to

an

In

careful

agreeing

about

FHA loan.

the

is

because

housing

there will prob¬
fair chance for an

a

money

of

VI.

scale

other hand

down

payments,

tively

to

President should

Whenever

G.

was

known

to

easy

Washington, T. Jeffer¬

B.

Franklin,

and

even

Apparently,
has

smaller

substan¬

as

atmos¬

direct.
is

an

—

fice.
for

It offers every opportunity

a

inclined to wobble

person

about
a

a

principle to connive with
beneficiary of easy money for
cut in the

proceeds thereof.

Teletype

SL 456




FHA,

an agency free
control.

cal

and

of politi¬

It does not follow either that

(a)

the

pendent

officials
agency

of
are

inde¬

an

invariably

honest,
of

or (b) that the officials;
"political" agency would

a

invariably

operate

such

—

Stock

Louis 2,

Skips Congress

of

didn't

the
is

to

Loan

other

"constituent"

Bank "

agencies. It has

The

Board, and
housing;

never

been able

that

that

it

never

oc¬

within

the

Administration
or

cbnfide

to

in

the

Congress about it.
to those who

in

the

the

White

drafted

tive

Order

and

so

ball

carriers in

Congress could either

give

or

aid

know what

gle

were

was

individual

given

a

House,

a

Execu¬

giving the Housing

Home Finance

ministrator
the

however,,

proposed

Agency Ad¬

authority

to

'oper¬

statutory provisions of
merely to needled

and not

"constituent"

agencies.

Empire building has a way of
going on within the bureauc¬
racy regardless of party.
If you
don't

believe

it,
resigned

lyday,

Guy HolFHA Admin¬

page

istrator.

It

are

House

Administration's

itself for the stat¬

White

has

the

background
Great
Housing

people

occur

brilliant

the

that

been

entitled

[This column is intended to re~
fleet the "behind the scene" inter~
pretation from the nation's Capitol
and may or may not coincide with
the "Chronicle's"

own

to

afoot.
was,

views.]

One sin¬

however,

break, without

any

de¬

Pop.

however,
not

yet

WE Will BUY

something

was

about

to

—

Crosse & Blackwell
Gorton Pew Fisheries

Dennison

Concord

1

Manufacturing

(N. H.) Natural Gaa

Rumford

Printing

United Cape Cod

Cranberry

Morgans Inc. (Units)
American Piano

Carl Marks
FOREIGN

Exchange

SECURITIES

50 BROAD STREET

TEL:

HANOVER 2-0050

Garfield 0225

L.D.123

*

&

Co. Inc.

Detroit &

Mackinac

Rwy.

SPECIALISTS

NEW YORK 4, N. Y.

TELETYPE NY 1-971

LERNER & CO.
Investment

10 Post Office

Y~J1

;

However, Congress has long
thought the principle good. The
Housing and Home Administra¬
tion is a "supervisory" agency
with ^shadowy
lines to FHA,

Merrimac Hat

Quoted

Mo,

an

political motives.

for

agency

ate

One of the other

Transmission

320 N. 4th St.
St.

'j

to

tails, of exactly three minutes,

SCHERCK, RICHTER COMPANY
Bell

respect

work,

law,

Gas & Oil

Member Midwest

this

Federal Coal 5s 1969

Sold

and

Na¬

utory officials.

Wagner Electric
Bought

X

happen.

to substitute

depends upon the honesty
literally thousands of em¬
ployees far from the central of¬

Production

Natural

of C

the

independence,

of

Scruggs-Vandervoort-Barney Com. <8c PfdL
Tenn.

off

Under the present

of

ness

Valley Gas

Eastern

the C

Home

such

credit program, its sound¬

leaders of

men

longer

the

so

there

Eisenhower

credit generates evils. This

so

recreate

either advise

easy

greater

a

value,

phere of Title VI whenever the

curred

Problem Is Easy Credit

to

terms of repayment, and

Scandal

Basically
the
stink or al¬
leged odor currently being aired
on housing is
an expression of
the ancient principle that too

the bill

at the initiative of the
loans

of

cost"

current

President, to provide

denly awaken to the fact that it

Congress.

appraisal formula

the hallmark of Title

On the

proposes,

can't control what

principle

National Oats

the

was

facets

out of

sub¬

reembraces

"necessary

which

vided the White House will sud¬

comes

This

House

White

the

bill

It avoids

housing bill—pro¬

Saint Jackson.

Anheuser Busch

Treasury

agencies, Congress laid
statutory principles, stat¬
utory definitions, statutory
terms, and created an inde¬
pendent agency to handle the

stantively the evils of Title VI.

end,

be

easy

son,

Olin Oil & Gas

lay

the

agency

the

down

learned by D. Eisenhower.

business.

every

like

Olin Industries

Miss.

all

-

principle

Texas

have

demagogues
and

vestigation is over, somebody
will get together and figure out
a
way to
turn on the spigot
of government and/or govern¬
ment
assisted easy housing
credit so as to guarantee the

gram,

lot of

a

all

hoarse

vided the Democrats will give it
to the White House, and pro¬

the

Adminis¬

bit too big for his

a

breeches?"

bucking

tration AND

for

be getting

ably

The

SnercS

danger.

similar
"Think he may

activity,
construction,
one

in

is

in

to

not

political

its

of

r y

call

With

while the heat is

Nevertheless, it is premature
to kill off the chances for ANY

which

|

program

it

that

politically controlled!

tional Bank.

>

dream

ta

tradition

the

it passed the House so that this

state

a

him

could

was

Timewise, as has been stated
the public prints, the effect
of this development will work
toward killing the bureaucrats'
dream house of a housing pro¬
gram already knocked askew as

for

Democrats Finally

sudden it

in

stop this particular nonsense.

.

a

done.

"the tools of the

buy

better

sweet, dirty, understand¬
of slow horses, fast

before but all of

business "stimu¬

their reward

had

crowd

Ad¬

and bad card hands to
explain why nothing was done

hearted guys who didn't believe
in giving the returning veterans
chance

that the

story

real estate lobby" and the hard- *

a

announce¬

would

Senator

supervisory

e c r e

tell

months

women,

a

de¬

leadership at
the time fought this because it
was inflationary, and those men
like Rep. Jesse P. Wolcott (R.,
Mich.), then ranking minority
member of the Banking Com¬
mittee, were singled out for

was

S

the

the
the

in

were

C of C
demand

case

that

bank

why

12

Chaos

and

COULD

April

feeling is

ministration

The Republican

as

1950.

was

of

The

having

is

Under

Title

and two

a

troubles

things that
especially the

year

such

tion

Timing

By

State

State of Chaos the Administra¬

first

the

did.

one

The

lant."

opprobrium

the

might be subject to

control.

shape.

from

ment.

hand,

fear

of

White House-HHFA

ter¬

conversion

of

until

down

reason

buttress up its capital structure,
or
be
liquidated.
But in the

constantly

nothing
was
done
until
whoop and the holler of

Admin¬

other

in

plus to dig into this thing, and
except for some fringe tax cases,

erect

be

Truman

the

obsessed

was

great

should

shut

the

bad

Eisenhower Administration had
had

invitation to finan¬

seduction,

competing

it

when

Following World War II many
thoughtful people believed that

title,

worries.

assured

obvious

Suppose, for
example, the X National Bank
in

the White House broke the story

the

building.

this

labor,

banks

political

suppliers and

came
to
mind,
Congressional mind,

promoter could con¬
FHA

that

fol¬

been

has

tradition

lowed- forfdihe

hour then

per

money

Criticize

"necessary cur¬
rent
cost."
That
just
about
boiled down to allowing an ap¬
praisal at whatever figure the

the

That

paying

merry-go-round

One

was

or

was

Congress couldn't be per¬

suaded
VI

during the life of the latter.

-builder

department.

builder

higher for their services.

piece of collateral should exceed the amount of the loan

standard

ilglijfgg

full-scale employment with

a

With

>'>,•

manufacturers naturally did not

FHA followed the conventional

-

Title

little

a

no

material

The

V lending idea that the value of
.

*//''

find easy money displeasing, nor

.

,

'/ y

big Title VI operator could

the

J during World War II. Its objec¬
tive was to get housing built and
hang the
cost.
Under FHA's
older Title II, the basis for ap¬
praising a house or apartment
is its long-term economic value.
In other words, under Title II,
^

If

street

the

who supervises national
banks, is technically a part of
the Treasury, by tradition his
office
is
independent
of the
rency,

''J-:-/A

pre¬

swipe them away at S3 per hour

into

came

The

Thus, for instance, while
Comptroller of the Cur¬

the

to

become competitive

bricklayers $2.50

this situa¬

Foremost is that the loose
financing of Title VI is an old,
old story.
>; .V- j;
■■
Title

been

not

«SSfl

accus¬

style

a

accustomed.

costs.

down

some

which

the background of
tion.
on

in

had

builders to
about

miscellaneous notes
*

they

living

| VI operation just about took all
the
incentive
away
from

about.
;

to

viously

got

groups

tomed

gressional Committees are now
engaged in harvesting and tasiing the juicy political fruits of
the Great Housing Scandal of
1954.
So they should develop
the story of what the fuss is all

FHA.

Securities

Square, Boston 9, Mass.

JTeiephone
HUbbard 2-1990

Teletype
BS 69