Full text of Commercial and Financial Chronicle : April 23, 1953, Vol. 177, No. 5214

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university
of

ESTABLISHED 1S39

michigan

APR 24

1953

AMflMSTUTMX

The Commercial w=
Reg, U. 8. Pat. Office

New York

Number 5214

Volume 177

; EDITORIAL

We See It
of

Concatenation

a

number

of

has

events

Asserting we are not heading for a depression, Treasury
Secretary foresees a sounder U. S. economy despite arms
race.
Reveals new Administration will move to achieve

'

brought the international situation sharply to the
fore. This same course of developments has led

J the President to make what is described as a
"major foreign policy address." We are faced
;
with vital issues, and, it may be, with epoch-

time to

well be shaped within
it might well be if
sincere and the Western powers

come

prove

:

themselves competent to meet the chal¬

lenges by which they are, or would be, faced.
At this moment it is far from fully clear what

really
a new regime—intends or is planning. It could
be, of course, that all our hopes will presently
be dashed once more against the rocks of double
talk and double dealing. These things can not

the

regime in Russia—if it is indeed

new

be foretold at this moment,; but it is
we

certain that

fail to take these overtures of the

must not

seriously and at face value until events

Kremlin

proved them counterfeit. But this is only
the beginning of the story. Even if we assume
that the new masters in Moscow are now ready
have

to

yield their doctrinnaire nonsense and are pre¬

pared to give up their zeal for world communization—and in a real as well as a technical sense
wish now to "co-exist" peacefully—even if all

problems fit to try the patience and
statesmanship of"the world await those

this is true,
test the

?

* There is

nist world.

None of

reason

we

peace

and

people

consider some of the octopusthe Securities and Exchange
Commission, the more convinced we become of
the correctness of the view that the Commission

depression.

are

helping

neither

Continued

on

38

page

,

strengthening

our own

the theory that an ounce

on

vention is worth., a

ought to be abolished, and that definitive legisla¬
tion be enacted containing the existing safeguards

friends "j
defenses,

our

against

of pre¬
In

America grew great. It was in
that we grew strong and rich
accumulated the homes, plants,

provoked by the recent SEC
offering a proposed Form S-8 which deals
with employee stock purchase plans.
The Commission tells us that this form is in¬

release

peace

farms, mines and

„

transportation, that'

through two

It was
and

wars.

saw

us

wars

that brought us debts, taxes

inflation.

tended to act

be

If

readjustments,

of

on

page

REGISTRATION

the
new

then indeed the

'

There are

course.

employees under

of stock purchase and savings plans.
maze
of instructions which constitute

proposal be regarded as a simplification,
original instructions and require¬
ments for registration as they now exist — and
mind you these are the creature of the SEC —
must be terrifying.
The need for the registration of; securities
where the employer-employee relationship is in¬
volved eludes us completely.
Why should any regulatory body in the securiContinued on page 44
this

20

by Secretary Humphrey at the Annual Luncheon
Meeting of the Associated Press, New York City, April 20* 1953.
<

SECURITIES NOW IN

simplification for the registra¬
securities

certain types

address

♦An

a

to be offered for sale to company

and the foresight to do them.

do and lack the courage

will

as

tion under the Securities Act of 1933 of

::

\fhy, then, Should anyone fear
peace? The reason, as I understartd
it, is that some people fear for the
strength of our own economic posi¬
tion if government spending for de¬
George Humphrey
fense is reduced.
They fear a free
economy devoted to the pursuits of peace.
Such think¬
ing is entirely unjustified. We are not going to have a
depression in America whether we have an armistice, a
real peace, or continue to develop a proper and balanced
posture of defense. There is no reason for a depression
Unless we fail ourselves to do the things we ought to
There

of the objectionable practices

This sentiment is

peace

and

a recurrence

of the late'20s.

pound of cure.

Continued

afford to forget that

can

;

.

in

-

us

-The longer we
activities of

like

this country are talking as though
they were afraid of peace. Peace is what we are worKing and striving to attain. To achieve
Some

SEC should not inject itself into em¬

ployee-employer relations. There should be no registra¬
tion requirements for employee stock purchase plans.
Relief sorely needed from seme registration requirements
of primary public offerings. SEC should direct its efforts'
along those lines.

to fear peace.

./" We are not headed for

guide the destinies of the noncommu-

who must

no

screen

the Commission.

may

the next few months, or so

the Russians are

smoke

reductions until a bal¬
anced budget is achieved. Admits taxes are too high and
should be revised to encourage more jobs and more pro¬
duction, while the National Debt should also be reduced.
Warns against excesses of speculation in a boom, and
urges dealing with readjustments when they are necessary

making decisions. If one permits his imagination
to run unchecked, it would not be difficult to
convince oneself that the course of history for
Some

simplification

sound currency, but opposes tax

a

:

plans offered by American

porations to their employees should not
a public offering.
SEC propesed Form

Secretary of the Treasury

v

business cor¬
be regarded as
S-8 no genuine
and press conference ballyhoo only a
to divert attention frcm valid criticism of

Stock purchase

HUMPHREY*

By HON. GEORGE M.

Copy

Tongue in Cheek!

"No Reason to Fear Peace"

As
!

Price 40 Cents a

1953

7, N. Y., Thursday, April 23,

•

j-

Underwriters, dealers and investors in cor¬

—

afforded a complete picture of issues now registered with the SEC
potential undertakings in our "Securities in Registration" Section, starting on page 48.

porate securities are
and

State and

in

WESTERN

U. S. Government,

State and

Municipal

Securities
telephone:

STATE

Pacific Coast &

and

MUNICIPAL

Direct Private

Bond Department

Dean Witter & Co.
14 Wail

Street, New York, N.

THE NATIONAL CITY BANK

Los Angeles • Chicago

•

Boston •

'7

OF NEW YORK
Bond Dept.

ESTABLISHED
Members

Bonds

Hew

American

CO.

1832

York Stock Exchange
Stock Exchange
Exchange,

Commodity

Inc.

Request

Active

York

Members

Hew

Members

American

New

30 Broad St.

New York 4
Tele. NY 1-733




CITY

Denver
Spokane

Angeles
and 10 other Western

THE CHASE

Teletype NY 1-184S

CANADIAN

OP THE CITY

Commission
Canadian

Orders

Executed

Power Co.
COMMON

On All

Exchanges At Regular Rates

»

Analysis upon reqaest

DEPARTMENT
Montreal and Toronto

Goodbody & Co.

boMcuox Securities
<orporati02i

ESTABLISHED 1891

STOCK EXCH.

40 Exchange Place, New York S.N.Y.

IRA HAUPT &

PERTH AMBOY

NEW YORK

1 NORTH LA

SALLE ST.

CHICAGO

Teletype NY 1-702-3

WHItehaU 4-8161

CO.

New York Stock Exchange
other Principal Exchangen

Members

and

111 Broadway,
WOrth 4-6000

1tS BROADWAY

'

OP NEW YORK

Central Maine

BONDS & STOCKS

MEMBERS NEW YORK

BRIDGEPORT

BANK

NATIONAL

Cities

CANADA OIL

York 4, N. Y.

WHItehaU 4-6600

Stock Exchange
Stock Exchange

Tel. DIgby 4-7800

NEW YORK

Markets Maintained:

Direct Wires to

Broadway,

Telephone

•

Salt Lake City

Teletype: NY 1-708

CANADIAN

60

1915

Principal Exchanges

LANDS, LTD.

T. L. WATSON &

Pacific

Hardy & Co.

BROADWAY

CO.

Honolulu

Net

on

50

Los
San Francisco

Circular

ESTABLISHED

Members of All

Exchanges

and Security

J. A. HOGLE &

Y.

Principal Commodity

Members of

department

Missouri

Wires

Coast to Coast

Wires

Chemical
COMPANY

Bonds

Hawaiian Securities

HAnover 2-3700

BANK & TRUST

Municipal

MINING

SECURITIES
Direct Private

bond

OIL &

Boston

N. Y. 6

Teletype NY 1-2708

Telephone:

Enterprise 1826

v 7 f '•.
*

">

*

U

■,

V

N. »

'

(1730)
'•

•

1

O

i

il

•',

The Commercial and Financial Chronicle

5hr

^

;

„

The

' if-

Security I Like Best

participate and give their

and

reasons

for favoring

(The articles contained in this forum

they to be regarded,

are

Trust

Companies

be,

to

nor

offer to sell the securities discussed.)

as an

H.

THEODORE

of 293%.

BIRR, JR.

of America N.

President, First California Company,
San Francisco, Calif.
»
Bank of America N. T.

California

The

Quarterly

in

And

Comparison

Bank

is

banking,

in

America.

of

recorded

the

of

history

other bank has dem¬

no

America,

1

Available

Taggart,

phia,

The

tract

New York Hanseatic

Stock

produced earnings of $322 to

progress

ma

i

x

banking

(2)

an

t

count

H.

T.

translates

of

into

action

the

Bank's

fornia

Rights & Scrip

of

growing state with

a

—

service,

Cali¬

(3)

a

diversified and dynamic economy,
and

(4)

expanding, robust

an

pop¬

ulation.

Since 1917.

During 1952, California chalked
up new records augmenting fur¬
ther

gfCpONNELL & To.

position of preeminence
the states of the Union. For

example:
reached

Members

agricultural

$2.7

income

billion,

public and
private construction expenditures
exceeded $3.6 billion, personal in¬

Exchange

Stock. Exchange

American

its

among

BROADWAY, NEWr-YORK 5

dividual

Tel. REctor 2-7815

income

from

skyrocketed to $23
million

of

the

all

sources

billion and

state's

5

population

of 11.8 million were gainfully em¬
ployed. The foregoing facts point
to a high level of business
activity.
This

turn had

on

Bank of America with its

538

Furniture

American

in

pact

Trading Interest In

statewide

cally

Bassett Furniture Industries

a

favorable

branches

located to

im¬

strategi¬

render

complete

and

efficient banking services.
The word "growth" has become

Camp Manufacturing

extremely fashionable in invest¬
ment parlance in recent years. All

Commonwealth Natural Gas
Dan River Mills

too

dubious when

one

Life Insurance Co. of Va.

leaves

usage

the

facts

con¬

cerning some institutions are care¬
fully scrutinized. The word
"growth" as applied to Bank .of

STRADER,TAYLOR & CO., Inc.
TWX LY 77

ment.

a

the

"growth"

factors

in

organizations.
stockholders

eloquent
Bank's

distribution

of

record

as

billion

a

$1.4

billion

to

investment

the

to

able

investor

with

income

growth., It has
been one way for the prudent in¬
vestor (not interested in specu¬
lating) to protect investment in¬

against

of

the

York

1856

of

million
of

American

New
*

Stock

York

its

past three months,

speculators

Chicago
New

Board

Orleans
And

of

Cotton

other

Inc.
Trade

—

a

2.1

made

loss

a

the

outside

DETROIT

—

the

GENEVA,

SWITZERLAND




a

if

that

mated

this

would have

a

each without

giving

gains

in
as

raison

of its

a

all

d'etre

as an

function

of

bank
for

the
con¬

the

investment
as

a

pri¬

At

ported

any

tains

many

possi¬

they are perpetual. I
might add that in 1942 the stock
selling

was

$6.50

around

of

LAMBORN & CO., Inc.
99

WALL
NEW

STREET

YORK 5, N. Y.

SUGAR

With
under

the

$3.00

warrants

it

Raw

Refined

—

—

Liquid

Exports—Imports—Futures

available
DIgby 4-2727

seems

an

unprec¬

edented

opportunity to participate
further rise in the market

in any

while taking very little risk.
CHARLES A. TAGGART

President, Charles A. Taggart & Co.,
Inc., Philadelphia, Pa.

Commonwealth

Stock

Foremost

Exchange

Oil

of

invest¬

of

1952

in

it

outstanding

products which under

new

nor¬

meet

company

Bought—Sold—Quoted

consumer

and

approval

in

result

pro sperous
"

operations.

Prospectus

on

request

I would like
to write about
a

company

is

which

growing
through

moderni¬

zation

of

A.

Teletype
NY

WHitehall 3-2840

1-809

estab¬

lished

Taggart

Street, New York 4

Telephone

al¬

ready
Charles

Broad

the

quisition

a c

Gordon Graves & Co.
30

smaller

concerns

marketing products for which the

410 Pan American

Miami 32,

Sank Bldg.

Florida

demand is well known.

At

the

start,

like

would

I

that

while

to

Foremost

of

states and

seven
so

that

over

the

80

28

communities,

company

now

communities

and

Over-the-Counter

Quotation Services

serves

their

con¬

for 40 Years

ing from Minnesota to Florida, in

ex¬

In¬

Standard

in

acquisitions in 1952 have
Foremost's territory by

pany,"

increased

growth

and

complete

has

out

in 18 states,
spanning the continent and rang¬

is

Moody's

and

the

re¬

excess

portfolio

Both

Common Stock

and said about

Largest Independent Dairy Com¬

Company

assets

The

Company

Dairies, Inc.

Dairies, Inc. slogan is. "The South's

such

&

port¬

folio for anyone who cares to
it in detail.

The

New York 7
Tel. NY 1-1932

DIgby 9-1550

per

share
and
the present
value is
approximately double that figure.

Pur-

are

open-end

end

Service
carry

Tel.

Security Dealers Ass'n

Broadway

weight to

and

vehicle.

tremely well diversified
situations.

Members N. Y.

150

the fact that

po¬

originally organized in

the

total

Poor's

profits increased from $12.8
million to $50.3 million — a gain

an

$22 million.

Gersten & Fbenkel

$27.00

over

point

Investment

ment trust

Rights

the warrants

value of

estment

n v

a

is

Rights.

♦

liquidating

value should double,

rants

S. Lichtenstein

The

&

1968

Southern Company

share. It has been esti¬

per

chaseWar-

vestors

net
.

$11.80

and

Stock

5.1

gain of 279%.

to

value of about

unlim-

Company

Second, as an investment: dur¬
ing the same period (1937-1952),

PITTSBURGH

liquidating

as

America

vately owned public servant.

NEW YORK 4, N. Y.
CHICAGO

I

B.

Natural Gas

of

low

a

time the Invest¬

one

ited profit

in¬

from

at

Company of America stock

a

for

be

tentials

1933.

stitute

Exchange Bldg.

has

proper

with

I

America

Bank of America
n. Y. Cotton

At the present

ment

ideal

would

from

increased

5

price, give the investor the right

speculation

$8.2

to

Deb.

Rights

to buy a large number of shares.

the

vehicle

gain

million

addition

call

investors

The

gain of 142%. Number

foregoing factors

Exchanges

perpetual

a

$20.-

perpetuity.

in

warrants,

being

procedure.

to

Spectacular

Exchange

in

with

over

at

are

to

$424.3 million

Exchange

Exchange,

from

East Tenn.
CV.

of

5.485

at

should

many

I

a

—

&

mal conditions

action

a

served

Common

Warrant

buy

stock

share

per

These

to

common

At this level of the market and

considering

2,472,000 — a gain of
419%. Capital funds
(excluding
reserve
for possible loan
losses)
increased from $111.9 million to

Exchange

Cotton

Commodity

increased

Customers

loans

476,000

Exchange

Stock

481%.

creased

Members
York

New

of

Warrants

gain of 469%. Loans

$1.1 billion to $6.4 billion

H. Hentz & Co.

shares
9664

of America

Purchase

485%

investments

Insurance

Company

fu¬

Company

holder

the

bility for loss.

and
Established

entitles

offices

development, production and sale

meager

a

the

the

America Stock Purchase

of

billion

—

Agricultural

Common &

City

gain. Deposits
increased from $1.3 billion to $7.4
—

branch

our

growth companies engaged in the

LICHTENSTEIN

New

and

in

in

Investment

is

common

over-the-counter

Partner, B. S. Lichtenstein & Co.,

Stock

Com¬

well

so

to

&

Pacific-

Management
done

Much is/written
S.

of

performances

Each

market.
BEN

NY 1-1557

Members, Philadelphia-Baltimore

America

in

affairs

&

have

stellar

of the dollar.
Bank

Research

past that it is reasonable to expect

the

living and
cipal value as well as from the
experienced decline in the value

traded

Capital

Investors, Inc.
and
American Mutual Fund, Inc. The
three trusts managed by Capital

rising cost of
depreciation in prin¬

come

was
a high-water
mark for
security prices in general.
First, as a bank: resources in¬

from

of

daily and' is
that
the

an

itself

also

creased

rec¬

number

grows

portion of the holdings of Transamerica Corporation and (b) 1937

•ssvmo^

prov¬

St., New York 4, N. Y.

con¬

American

seeking sound value and depend¬

the year in which the Bank's
stock first became available to the

through

The

testimony

commends

was

public

successfully

a

a

therefore,
to
find
its 220,000 stockholders
the
sixth
largest
stockholder
group in the U. S. A. Numbered
among them are over 6,000 insti¬
tutional investors, such as: sav¬
ings banks, insurance companies,
investment
trusts,
foundations,
and labor, fraternal and fiduciary

years

Bank of America. This period was
selected for two reasons: (a) 1937

I

^qUR

on

as

ord. It is not surprising,

(1937-1952) pro¬
good historical setting to

measure

preeminence

continuing historical

Investment Co.

Fifteen
vide

and

factors.

growth

the end results of Bank

are

America's

en

investment

sound

a

bank based

America has validity based on its
record as a bank and as an invest¬

Lynchburg, Va.
LD 39

often, claim to its

is

built-in

Exchange

Exchange

Orleans, La. - Birmingham, Ala*

ture.

—

These

philosophy

in

earnings, dividends, in¬
yield and value — Bank of

with

ployee staff which enthusiastically

Specialists in

pro¬

Stock

Stock

HAnover 2-0700

New

management

the

manages

from factors that

viewed

America

Birr, Jr.

e m-

-

were

earnings factor.

come

manage-

m e n

of $840

support the much larger

When

people,
enlight¬

ened

sup¬

dividends paid. This is growth

num¬

2)

York

American

25 Broad

Philadel¬

Management Company which also

pany

the

the

ber of

investment

same

with

Research

duced to

serv-

to

ce

A.

New

Members

Direct wires

1952, earnings

m urn

Charles

Inc.,

(Page

and

port the dividends then paid. For

(1) a philosophy
of

greatest

Stock

$240

yield factor. The

i

-.

of

then and $640
(13.5%)
This is growth in the income

now.

Teletype NY 1-583

York

income

(5.1%)

are:

Exchange

120 Broadway, New York 5
BArclay 7-5660

dividend

produced

for the Bank's

Associate Member
American

investment

same

solid

1920

Co.,

gain of 174%;

a

—

cornerstones

Corporation
Established,

1.952

of

cash
four

Steiner,Rouse&Co

Mobile, Ala.
research

The

York

split) worth $12,400 at the

This is growth in the value factor.

soundly.

President,
&

Pa.

close

so

New

Dairies, Inc.—Charles A.

Taggart

growth
swiftly and

request

on

Co.,

S.

Members

Foremost

onstrated such
so

&

Bought—Sold—Quoted

S.

B.

City. (Page 2)

shares (through 2 stock dividends
and

Louisiana Securities

Stock

Ben

—

Partner,

*

valued at $4,525 at the
1937,
increased to 400

of

end

America

of

Lichtenstein

gain of 336%.

a

—

S. A.—

&

Co., San Fran¬

Warrants

Lichtenstein,

to $38.4

vestment in 100 shares of Bank of

investment

complete

California

Purchase

Appraised at, bid prices, an in¬

S. A.

&

million

T.

Birr, Jr., President,

cisco, Calif. (Page 2)

*

Cash dividends paid in¬

creased from $8.8 million

Alabama &

Selections

H. Theodore
First

intended

not

are

Bank

particular security.

a

Week's

Participants and

Their

Investment Co.

of New York
84th Consecutive

This

Forum

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

Leading Banks

120

Thursday, April 23, 1953

_

r,

New

,..

see

efff^t

surrounding

addition to

Hawaii,

areas

overseas

Guam,

operations in

Okinawa

and

The

Incorporated
Established 1913

present

company

was

in¬

corporated under New York laws
a

National Quotation Bureau

Japan.

Continued

46 Front Street
CHICAGO

on

page

41

>

New York 4,
SAN

N. Y.

FRANCISCO

\

Number 5214

Volume 177

.The Commercial and Financial Chronicle

..

The Road Ahead

INDEX

By W. W. TOWN SEND*
President Townsend-Skinner &

Investment counselor maintains
soon"

SEC Uses Blackjack to Push Pet Reform—Leslie Gould

face

now

to

world

with

be

uncertainties, it is not
that

expected

mind

than ordinarily

more

ean

finite

any

far into the

very

peer

There

future.

visible,

the

on

he

way

—Edwin

slow

and

down

little boy always

isn't

he

falls off, because

we

have

to

burst

of

speed

S
warrant two
■PBM conclusions:
If 1 S
The f i 1 s t

IHHHB however, just
i

conclusion
that

we

not

s

can-

easily

escape

pe-

a

|l ^^B riod of read5k IBB

justment,

tr enchment

W. Towr.send

W.

r e-

and recession

for

rather ;than

and

simple

as

for

Unfortunately

that.

as

about

their
readjustment. Bond prices began
to

break

completed

months

six

about

later

of

some

drastic. And

amples

of

—William

ex¬

almost completed

have

may

:

in

the

which

readjustments

consecutively

taking 'place

r

not

are

and

do

we

»once

our

:* been

the

face

not

ability of

to

•

strong prob¬

deep depression and,
economic machinery has
a

overhauled,

able

"should

we

forward

move

months.

bility

of

should

be

academic

be

into

a

consists

synthetic prosperity.

The word recession has come to

sinister. This

something

is

not

good semantics. A recession is
retreat from an abnormally high

level of activity to a
of
*

normal level

activity and is healthy.
A

depression,

from

of

activity to a sub-normal level
activity and is most unhealthy.

"It
'

sometimes

is

a

hard

to

keep

industry

States,

industry

As

the

world

the
have

Business

ever

country

same

problems.

internal

Most

use

the

used

From Washington Ahead of the

a

it

does

also .start

not

Adminstration

in

heads of the industrialists to

pledged

to

to

f-

of

all

breakdown,

v
•

world

the

>

Security Salesman's Corner

like

the

little

boy

'

.

'Abstract of

an

address by Mr. Town-

}

send before Group 3 of the Pennsylvania

!

State

Bankers

Association

brings our discussion back to to¬
day's most serious element of po¬
tential

April

Pa.,

Continued

.

on

page

1

BROAD

Pulp and Paper Industry" on page 18.
See "The Market
and You," by Wallace
.

Twice

Weekly

Albany

Boston

•

,

\

i

Private

Wire

•

to

COMPANY
COMPANY,

DANA

Glens Falls

Nashville

•

Schenectady

CROW ELL,

•

Worcester

WEEDON &

Gardens,

Drapers'

r

G

Bonds

December
to

maturing

this

31

new

frtna

m<7
Treasury

year

3%%

applications

,f

.

1D„

London,

,

C.,

E.

immediately
exchange must

_

york(

N

Eng-

1942, at the post Office at New
under

Y.,

the

bonds

3%

Act

of

March

8,

Subscription Rates*.

cash

HERBERT

Pan-American

Thursday

plete

and

corporation

and

Other

news,

city news,

Offices:

Chicago 3,

every

111.

news

135

Monday (comquotation
bank clearings,

etc.).
South

Canada,

of

$45.00

$48.00

year;

Salle

St.,

(Telephone STate 2-0613);

$500

is

but

—

denomination

may

exchange

holders

Series 1 F

them

t:|

for

payment.

per

Application for exchange of your matur*

In

ing F and G Bonds

year.

Note—On

account of

the

fluctuations

to

for the new 3Vis may1;
Federal Reserve Bank u?
banker will help yc4
make application.
made at any

Your

in

own

for exchange must
1953.

Application

rate of exchange, remittances for forelgn subscriptions and advertisements must

be made in New York funds

be

branch.

Bank and Quotation Record — Monthly,
$30.00 per year. (Foreign postage extra.)
the

La

per

Other Publications

and ad-

issue —market

statistical

records,
state

issue)

(general

Union,

Other Countries, $52.00 per year.

Thursday, April 23, 1953

at

J

D.SE1BERT, Editor 4 Pobllshar
Dominion

Every

fully-marketabv3

new

made

or
'j
the neiii,
higher multiple of $500 upon paymeai
of the cash difference.
Eligible F and (j
bondholders who do not wish to makj
the exchange will have the opportunity,
of reinvesting the proceeds of, their m«.-■
tured bonds in other series of Savin^j
Bonds currently on sale, or to receive

Bonds

n

1879.

to 9576

1.

par, with intere I
1—an especially z.
tractive feature of the offer.
The min>
mum
denomination available in the ne;/

smaller

w.n.

for

for this
be

will

bond

Copynght 19KtyW.ll.am B. Dana

Publishers
Publishers

before May

adjustments to May

Reentered as second-class matter Febru-

WILLIAM DANA SEIBERT, President

•

LOS ANGELES, CALIFORNIA




B
B.

REctor 2-9570

vertislng

Manchester, N. H.

and

Park Place, New York 7, N. Y.

TELETYPE N. Y. 15

•

Chicago

•

and

to

Exchanges

"■*

.

land, c/o Edwards & Smith.

COMMERCIAL

ST., NEW YORK 4, N. Y.

TELEPHONE HAnover 2-4300

All

page 5.

on

Reg. U. 8. Patent Office
25

25

1

converted

be

56

FINANCIAL CHRONICLE
■

WILLIAM

New York Stock Exchange

May

40

f

Members

[
|

which mature in 1953
F

Series

f

:A

*See article "Canadian

fDiscontinued.

PREFERRED STOCKS

Spencer Trask & Co.

5

made

The

specialized in

BONDS

U. S. GOVERNMENT

5

(Walter Whyte Says)

_

have

[

for Owners of

Bonds of 1978-83, if you act

Published

For many years we

.

2

____________

Washington and You

Streete

Wilkes-

at

.

.

OPPORTUNITY

Series "F" and "G"

The State of Trade and Industry
Tomorrow's Markets

danger, the high and still

1953.

18,

.

The Security I Like Best

particularly when the
loan does not produce an income
out of which it can be repaid. This

•

Barre,

48

.

NOW

SPECIAL

A

and

You—By Wallace Streete (successor to
"Tomorrow's Markets, Walter Whyte Says")

credit,

If you act

25

Securities Now in Registration

the excessive use

S5£J[

51
36

.

Exchange PL, N. Y. 0

35

Offerings

24

The Market

than encourage

a

Security

40

Teletype NY 1-1825 & NY 1-1826

54

Public Utility Securities

Speaking more specifically, the
banker should discouraged rather

•

.*

MACKIE, Inc.

&

HA 2-0270

5

Railroad Securities _.i

.

•

Singer, Bean

22 .V

j

May

Our Reporter on Governments

Prospective

spin-

der way.

Wilfred

Our Reporter's Report

ning.

For years we have been for

37

—

Observations—A.

the

policy of retrenchment wher¬
ever possible. This is already un¬

avoid

42

Notes

News About Banks and Bankers

Like

spinning should recog¬
responsibility to see

industry

'...

8
47

Mutual Funds

stimulant at

that

Their major problem is
bring about a slowdown and

News—Carlisle Bargeron

Indications of Current Business Activity

abuse

moderation.

in

alcohol, also, it is

Common

24
'

a

a

8

Einzig—"Peace Prospects and Sterling Convertibility".

Credit, like alcohol, is only good
when

Stromberg-Carlsom

16

of credit.

their

is

Field

Recommendations

NSTA

involved

have

rather than the

Lear, Inc.

*

Dealer-Broker Investment

of

nize

which

56

Events in Investment

Coming

implies the

and

helped to produce our most press¬

ing

Bookshelf

Man's

Kerr-McGee Oil

22

...

Canadian Securities

it is this
finance industry which has
destroy

to

General Gas
Cover '

(Editorial)L_u___

Bank and Insurance Stocks

great. But

grown

create

to

power

has
this

it

See It

We

are

the glow of health and the flush

-

Cinerama, Inc.

Regular Features

of fever.

j

Alabama Gas

55

mation About Canadian Life Insurance Shares

credit which keeps the wheels of

an

36

:_

Leighton Foster Protests Misleading and Inaccurate Infor¬

R.

the

in

of which you

Without

not

power

Los Angeles

Francisco

almost entirely of trans¬

they look alike. The resem¬
blance, however, is that between

have

San

31

Walter F. Merkel Forecasts Further Growth of Utilities

part, is the greatest middleman

a

Wires

Philadelphia ' *

31

Waldo Fisher Warns Industry on Guaranteed Annual Wage..

of

group

a

that

We

Teletype NY 1-3370

Direct

23

NAM Critical of Capital Investment Data

,

"Washington

BO 9-5133

19

Boom's End Near, says Marcus Nadler

first, a narcotic beyond a certain
'recession
from
extending itself point and in the end a deadly
into a depression and it is true poison.
Those who provide the

•

Broadway, New York 6

13

She Wants World Peace

Savings Bank Deposits Show $506 Million Gain in 1st Quarter.

than

more

to

interest

United

normal level

a

of

Incorporated

Cover

(Editorial)

Eisenhower Urges Russia Prove

•

much

of

finance

them

the other hand,

on

is

retreat

20
61

And the reason
particular discussion

^ The

could

a

J.F.Reilly&Co.

18

Higher Interest Rates in Offing—Roger W. Babson

Tongue in Cheek!

<$>

,

18

Prospects for Commercial Bank Loans—Shaler Stidham

actions in dollars and in debts.

rather than

-

16

Dignan

Canadian Pulp and Paper Industry—R. M. Fowler

The

debt.

this

why

known.

mean

Pipeline

16

How Sound Is Our Farm Credit?—Emmet J.

system
of free-enterprise
capitalism has been the inflexi¬

fairly protracted period of sound

,

Banking

bankers is because their business

concurrently.

The second conclusion, is that

r *

Gas Transmission

Transcontinental Gas

14
Means to

Adams

Sherman

—E.

figure has
and one-half

own

-

Texas

14

.___

—Howard Buffett

only valid criticism which
has been leveled against our

ever

now

Cheyney

The

:

prices

Stock

readjustment.

just

are

J.

What New Administration

700%,; with $3.3 billion of that
increase coming within the last

entering on their
.'readjustment phase and it prob- ably
is a fortunate thing that this
recession is a "rolling" recession

their

-

12

Credit

Consumer

Eastern

Transmission

Powerful Forces Leading Us Toward Ruinous Inflation!

before

$16.7 billion, an increase of over

fourteen

Texas

This

debt.

consumer

Institutional Acceptance of

The

of which is
fantastic
growth of

almost

the

12

Mann_

Reaching the Purple Twilight—Clifford F. Hood

most serious

the

us,

11

be

excesses

Gas

Transmission

10

excesses

several

have

we

such

WHitehall 4-6551

/Tennessee
10

_____

__

What Can We Do About Taxes?—John J.

us,

must

corrections

great,

are

Where

uniform.

be

not

"

and

STREET, NEW YORK

9

_____—___

Companies and Securities Markets

.

the process of slowing down can¬

fairly

have

WALL

Telephone:

Problems of International Investment—G. Keith Funston

is already
background for

and

Obsolete Securities Dept.
99

Responsibilities of Bankers—J. L. Robertson

we

really do know how to slow down.
It's almost

Washington Bell_________,_

—George T. Conklin, Jr

choice

from

was

necessity

obsoletes.

supply the cash!

Gold Standard

the Full

Life Insurance

picnic.

a

the

!

6

_

7

—James

very

fact,

Commodity prices reacted at once

.___

6

strong

mad

soon.
This, in rocketed in seven
in progress. The years from $5.6 billion to $24.3
business and the billion and the growth of install¬
three major markets, as disclosed ment debt has been even more
in the banking figures, began to spectacular.
This is up, in the
deteriorate
very
early in 1951. same period, from $2.0 billion to

time

some

have

bring

5

__

Business

Year's

Second-Half

for

Nourse_.

G.

In Defense of

hopes

t o

You

Objectives of Treasury's Tax Policies—Marion B. Folsom

The

off.

step

enough of the

and

4

Security Business "Sad and Sick"—Edward T. McCormick

economic

"signs

Let's

to ride fast. He hasn't learned how
to

like

I Portents"

Outlook

Clouded

enough to pedal
long. Russia
are that little boy.
We
prove
that our recent '■

are

4

—_

We'll

stay on is

can

Cobleigh____.

Keep Our Economic Powder Dry!—A. Wilfred May.

bicycle for the first time.

The only

PICNIC

3

W. Townsend___

there is strong probability that "we do not

deep depression." Comments on danger of excessive use of
credit and "still mounting invested pyramid of consumer debt."

beset

Ahead—W.

AND COMPANY

Humphrey.-Cover

Book Values—Ira. U.

a

a

Road

Fear Peace"—Hon. George M.

period of readjustment, retrenchment and recession,

a

but says

In

Reason to

The

"fairly

cannot easily escape

we

Page

,

Co., Inc.
"No

LlCHTtnSTfl

"

Articles and Nevjs

York City

New

Investment Counselors,

3

(1731)

be mac a

before May 1,

Published
tion

with

as

a

the

■

public service in coopera*
Treasury Department by

Commercial and Financial

Chronicle.

t

4

(1732)

The Commercial and Financial
Chronicle...

Slipping

sources.

Book Values

the

radio

made

inroads

known

traditional

the

on

well

read¬

ing habits of the American people.
aud

make

by

planet
pundits than

ownership of the equity
general public was

bookworms,

common.

trolley,

There

the

the

the

or

and

is

stereop-

U. Cobleigh

non

-repeating

Books

still

are

purchase
to

the

1937 dividends to

book

Way back 110
there opened in London
under the pro¬

store,

Alexander

of

and

and

Daniel

Macmiilan.

and

an

was

It grew,
American branch

but

of

deficits
were

20

hundred

Book

thousand

the

of

corporated
and

no

cents

Month

listed

are

on

selling around 11.

dividends since
dicated at $1 a
tom

1953.

a

all

an

The

tween
and

five

1946.
to

and

high

a

one-half

of

30

Americans

improve

in

racked

are

1937

shares

Club, In¬
the NYSE

Unbroken

are

in¬

now

and the cus¬
company has been to

of the

Textbook

is

year;

Other Candidates

Of

in

in

line to profit from that
proclivity.

the

touched

In¬

and

course,

review,

eager

stands

Book-of-the-Month

About

sturdy.

1949

up

always

themselves,

ternational

lovers of the great outdoors.

range
of the
1944 to date is be¬

from

common

time

possibility.

price

in this rapid
field has only
Your

upon.

terest in this

topic

book

been

further

in¬

impel you
investigate Prentice Hall, pub¬

to

Conservative Finances

Q.

Company

There

63

(selling over-the-counter at 15)
follow $161,553 of long-term debt.

text

GWTW, which bulged

high, is always

has

John

1949.

1948/50

Nine

to

up

against

actual

;

reason

in 1869

most

our

stock

one

Macmiilan

prietorship

section of his¬

tory.

for

example.

an

a

companies,

available

The

years ago

ticon, into the
Ira

where

made

Public.

few

a

another,

been

band

concert

are

however,

col¬

lar,

the

catalog
diversity
is
achieved by Medical and Religious
editions plus works for juveniles

The Macmiilan Company

«

1952

and

reproductions)
phonograph records!

for children.

paid in 1951 and 50 cents in
1952.
181,566 shares of common

Finally,

books, in all
truth, are in
no
danger of
joining
the
celluloid

all

at

little bit

a

(art

line of

a

to come.

but another

among

the

this

escalator,

and

pay out a high percentage of net
earnings. Management is adroit,
Assuming the current rate of and shrewd selection of books to
What is called the Trade De¬ operations, International now sells be offered to Club
Members, plus
about
five
and
one-half
times aggressive
partment, including a wide assort¬
promotion, suggest that
ment of popular titles, turned in earnings, and indicates ability to this
company
can
sustain
its
17% of sales for the 1952 year, pay $1.00,
or
perhaps more, in profitability.
Financial
position

knit
group.
Thus it is not a
business where, historically, wide

our

young sters
more

on

1948 and

Miniatures

a

was

trade should be pretty wonderful

for years

and personally
small and closely

a

now

in

1951

dividends

statistics, particularly the

bumper crop of kids

in

in

side, running

share

a

in

will

growth

owned

managed

the erratic

on

60% of its gross; and
refer to population

over

you

interest

Earnings have been

cents

if

tano, Doubleday, Scribners, Dutton, etc., come to mind; and their
enterprises
have
usually
been

privately

to

tenaed

Ltd., and a 16%
world company.

derives

book publishing; and the invest¬
literary-product companies whose shares
are publicly held.

television

and

their

little
Mac¬

college and post grad, Macmiilan

educational

While

have

of certain

a

ladder,

also

Altogether, from kindergarten to $2.72

"Expanding Your Income"

A short reading stint about
ment merit

down

educational

big in high school
elementary school texts.

and

By IRA U. COBLEIGH
Author of

;

the

in

miilan is

Thursday, April 23, 1953

may

lisher of business
books, McGraw-

Club

finances,

the equity is
Skipping over to the popular
merely 280,553 shares of common
fiction and non fiction, you might
with
a
book
(ledger not text)
be
interested
in
Book-of-thevalue, most conservatively arrived
Month Club, which has devised
at, of approximately the current
and perfected a plan for the sale
market price of $21. Net current
of four (or more) books each
year
assets are above $14 a share; and
to a subscribing
membership aver¬
good will, which must be worth
aging well over 500,000.
Supple¬
a
couple of million, is meekly
menting revenues from the Book
stated on

Hill, which has

a
large book pub¬
lishing division, Henry Holt & Co.,

and

others.

In any

event, you will note that

book

publishing, historically, has

been

better

insulated

against the

ravages of the business cycle than
most industries, and some of

these
educational
tool, and started which, in 1896, become
book values are also
interesting
do not have to be "light The Macmiilan Company, with
and
not
the last balance sheet
unworthy
investment
reading" to gain great general its stock owned and controlled
Club are a line of
by
Metropolitan values.
at $3.
readership.
The "Bible," in the its British parent.
United
States,
is
a
perennial
The sustained dividend record
The march of years, plus the
best seller, and the most pervasive
internal British taxation and fi¬ running back to 1898 was men¬
book, in its influence among us, nancial erosion caused
For the
last
12
by two tioned earlier.
of
all
the works of literature. World
Wars, dictated, in 1951, the months, the dividends per share
Equally, and quite unfortunately, sale of the American unit for (including extras) totalled $1,675.
"Das
Capital"
by
Karl
Marx, dollars; and today all save 5,000 For stability of investment,
although a dull, badly written, common shares are owned in the quality of balance sheet, and divi¬
prejudiced and error-laden tract United States. And Macmiilan is dend durability, Macmiilan Com¬
By LESLIE GOULD*
on
political
economy,
was
a quite
a
company.
It has paid pany beckons. The stock is traded
Financial Editor, New York
source book for Socialist
England, dividends in every year since in the over-the-counter market.
"Journal-American"
and, coupled with the "Commu¬ 1898, and while evidencing a lot
The
Securities and Exchange
American Book Company
nist
minority interests. Recently, the
Manifesto," has become a of corporate
stability, this enter¬
Commission is one of those little abuses have
virtual modern bible for the Com¬
been where cumula¬
Another company in the same
prise has by no means stagnated.
law-unto-themselves bureaus, and tive voting is permitted.
munist heresy.
Macmiilan is the largest publisher general line of endeavor is Ameri¬
as
the
following shows is not
To get back to Florida
can Book
Power.
Company, which showed
On the lighter side, books such in the U. S., in the general field,
a v e r s e
t o This
company
has
and derives its sales and earnings 1952 net earnings of $472,000 or
cumulative
as
"Gone
With
the
Wind,"
doing a little voting, but had decided to
from a very broad base. Its com¬ $4.89
on
each
of
96,468 shares
put
"Anthony
Adverse"
and
"The
blackjacking.
up
its abandonment
to
shareRobe" have in
book
(and later plete publishing list would em¬ outstanding. American Book is a
The Florida owners
at
leader in
this
publication of college
year's
annual
movie) form had a wide influ¬ brace well over 7,000 titles, and
Power
Corp. meeting.
some*
and school texts and it also offers
500
different
books
are
ence
on
our
times,
and
have
operates
in
a
line of juvenile books through
The SEC was
helped to sustain the book read¬ published each calendar year. The
notified, as it is on
northern
its
Alladin
Books
division.
In
all matters
ing tradition of our peoples. And, screening of material for this
coming up at meetings
Florida
and
production is, in itself, an edi¬ 1950, as a pioneer advance into
of course, our schools and
of listed companies.
The SEC then
colleges
southern
have never swerved from their torial stint of mammoth propor¬ new educational techniques, this
gave an "informal" opinion that
Georgia, the it looked with
consider
that company acquired a 50% interest
major emphasis on text books as tions, when you

powerful

they

SEC Uses Blackjack
To Push Pel Reform

a

road to

Macmiilan is bombarded by over
7,500 manuscripts each year. Of
course,
the
mortality
rate
on
these is bound- to be high, but

scholarship and wisdom.

We cannot quite agree with Fred
Allen's classic quip that the 20irich

screen

"Five

Foot

has

replaced

the

editors can't

Shelf"!

of

Granting, then, the durability of
book
in
our
sociological
scheme of things, it's
appropriate
to
inquire who puts them out,
are

and

can

buy stock

you

all

can

the

Wind"

copies

in

them?

with

up

often

so

a

That's

over.

come

every

publishing companies profit¬

able,

rejection.

'em

the

pitchfork type
They have to look

use

and

real

a

like

which

how

With

10,000,000

the

aggregation

small

of

college

businesses.

Distinguished book family
such
as
Harper, Putnam,

30)

names,

got

from

Bren-

text

publisher,

(fiscal

,

this

ending

year

about

30%

of

subs

this

field

vorably regarded, and
ect

further

diversifies

are

this

proj¬
Leslie

it

steady dividend

since

in December

formed

was

1907.

book

ol

it?

the

First

National

Well, recently
buy 50 shares.
Not that

it's

of the

maintain markets for.

But

come

And
A

had

someone

miles of
up

of

did, when

we

one

Bank

30

we

or

40

picked
more

up

order

an

split in 1952. Present

rate

Stock

is

$2.50

popular issues

idea

an

at

45.

around

working

capital
$1 million loan

our

110

offices,

stock—for

a

can

on

em¬

it

the

Holding

which the SEC

Int'l Textbook

two states

serves

Whether

Company

it is

of law.

an

inte¬

a

com¬

covers

under

comes

is quite

It

though

the

matter

a

clear that the

company is exempt.

The SEC, though, has a pet re¬
form—cumulative voting for cor¬
poration directors. This is a
debatable

question,

arguments

and

be made

can

sides—for

there

and

are

share-owner may
less

than

directors.
and

is where a
bunch his votes

the

Say he has

there

slate

full

500

shares

10 directors

are

of

1100

executives

account

might

<■

•

up

for

International Textbook Company,
whose
earnings
and
dividends
have
displayed
more

shareowner approval. He can cast
he

was

quite willing to

part

with his

price.

story?

None in particular.

dividends —when

—-

we're

it

comes

to

buying

whether

10$
at

they're little known or
phone call can usually pay

the

other

end

of

the

line.

others we've mentioned.

This company draws its main in¬
come from
the sale of books and
courses

Except that when

selling bank stocks
widely owned—even a
or

the

its

of

instruction

International

Schools,
tens

of

people.

postal

from

these

which

Trading Department

are

owned

Merrill Lynch, Pierce, Fenner & Beane
70 PINE STREET

NEW YORK 5, N. Y.

Offices in 104 Cities




Alma
of

70%

Mater

successful

gross

course

of

comes

materials,

turned out in company-

printing

plant

and

bindery, at Scranton, Pa. In ad¬
dition, printing and binding for
outside

sively.

customers

is

done

exten¬

for

cast

each

2,500 for two and
Abuses

Abuses
where

director,

5,000 votes for

by
of

some

so

this

ance

in

Clear Case of Federal Abuse
This is

clear cut case of abuse
of power by a
government agency.
Florida Power is either
or

of

the

have

York

with

not

ex¬

determined

by

division—has put
head.

utility

a

shotgun at the

The SEC is not the
only bureau
to

abuse

so

its power.

Practically

everyone of the other autonomous

The

follow

Federal

the Federal

mission,
Federal
name

the

same

Power

tactics.

Commission,

Communications Com¬

CAB,
Trade

Anti-Trust
Commission

and.
—

few—are others.

a

or

come

in

we

Western Central

Petroleums

mean

•

accept¬

the

•

man¬

voting privilege
by keeping off the board or deny¬
ing representation to long-time

20, 1953.

is

company's

•

permission

"Journal-American"

from

the

of April

inc.

11

Producing Wells
New Drilling Scheduled
Operating at a Profit

•

Capable Management

;

For Further Information

non-cumulative

♦Reprinted

Holding Com¬

by the law, but its

whether it has cumulative
voting
for its directors. That is
beside the
point, but the SEC with its power
—or rather the staff of
the

agement. On the other hand, some
managements
have
abused
the

New

exempt

it is not from the

RAPIDLY EXPANDING
OIL COMPANY

waterfront

term—into

a

pany Act

outside group has at¬

the

Holding Company Act.

Groups

tempted to muscle—and
muscle

done,
steps

That is just a plain hold
up —
black jacking.
So, the company
gave up its plan.

on.

Outside

such

on

were

one, or

Further, there is

a wholly
subsidiary, International
^Correspondence Schools Canadian,

owned

votes
can

offered by

Correspondence

thousands

About

500

if it

exemption

from the

agencies

voting

that

the SEC threatened to
take
to end Florida Power's

both

on

be

can

strong

abuses.

for

and

move

emption

it

Cumulative

Company

administers.

Holding Act provision is

text books.

volatility

Minneapolis

Moral of the

well

serenity that an
publishing en¬
offer to shareholders,

book

third, and lower priced entry
among
our
book
values,
is

65,000

of

than

private wire, and
with a seller.

in

portrays

ar¬

corporate

we

they did.

man

Book

was

A

that

Act,

the

and

the American

on

Exchange

Additional

phasis is

It isn't.

sions

pact region.

one

particularly when the main

to

com¬

disfavor

a

provi¬

two for

the

York?

The

grated system and

terprise

Hudson Falls, New

&

is exempt from the

pany

ingly supplemented by stock di¬
vidends of 60%
in 1922, and a

entrenched
—

a

Light Co.

It is exempt because even

American

hear

Gould

fine

a

payer

supplied by a
ranged last year.

Ever

Power

company

American Book has been
and

by

idiary,
Georgia

fa¬

operations.

shares are traded

sales

pro¬

vided

dividend

April

net

technical

and

for

and

service

being

possibilities in

pleas¬

Macmiilan is the second
largest

1952

Records) in Audio
Inc., to produce and

Cash distributions have been
gen¬
erous and these have been

Macmiilan

sensation of 1936.

About the first question, book
publishing, unlike steel, railways,
or motor cars
in America, is an
;

latter

Decca

distribute instructive records. The

beauty

"Gone

sold

was

they

(with

Education

.

'

about 60c

s. b. cantor cg.

T9 Wall

St, N. Y.

•

WH 4-6723

to

Volume 177

Number 5214...The Commercial and Financial Chronicle

Steel

The

(1723)

Production

Electric

Carloadings
Retail

State of Trade

Price

Predicting that next step on Russians' Peace-Offensive time¬
table will be early resumption of appeasement gestures on our
vulnerable trade front, Mr. May cites their dual purpose of
sowing dissension in business-hungry Western nations, and sat¬
isfying Soviet military machine's need for strategic materials.
Citing long-time record of basic Communist philosophy, main¬
tains reliance on their overall cooperation without definitive
guarantees would rest on untenable assumption that Kremlin
rulers suddenly have ceased to be Communists.

AND YOU

Index
...

Auto Production

Industry

By A. WILFRED MAY*

Trade

Commodity Price Index
Food

and

Keep Our Economic Powder Dry!

THE MARKET

Output

Business Failures

By WALLACE STREETE

J
•V

Nervousness

over-all output in some industries for the period
Wednesday of last week worked to counteract declines
others leaving the level of total production close to that of

—

Increases in

ended
in
the

Korean

on

week.

prior

Further

postwar high reached

displayed

little

variation

the

from

fluence

a

***§

close

the lowest level

to

Steel

a high level with claims
benefits down to a new 1953 low and

ingot

in

in

output

seven

the

April

ended

18

Pittsburgh

averaged

still felt by steel producers in that

were

Increase in extra

area.

charges by Republic Steel Corp. is the first

round has been settled.
Meanwhile, steel firms
will continue to adjust extras to compensate for changes in costs
wage

time.

They

steel

are

additional

from

charges, which average about 25% of total steel cost

Extra

to consumers, have
hold-the-line price

not been revised since producers agreed to a
policy at beginning of the Korean War, states
this trade authority.
That

steel

thinking seriously about raising
base prices was made official last week with statements from
three leading producers.
Their statements bolstered an "Iron
Age" prediction of several weeks ago that steel prices would be
raised at least enough to cover any wage increase.
>
The

companies

price

increases

are

are

expected

to

come

by June,

if not

sooner.
Increases would probably be made now if it were not
for uncertainty of the cost of the seventh wage round coming up,

trade

this

states

']■.

weekly.

I

The Wage Policy Committee of United Steelworkers (CIO)
meets in Atlantic City April 27, 28 to fix wage demands and plan
strategy.
It is taken for granted they will ask a healthy wage
increase.
And, with the cost-of-living crutch, weakening, they
will

productivity arguments.
arguments will be hard to prove—or disprove.

try to support their demands with

Such

Steelworkers'
of

for

desire

contract

talks

wage

is

reopenable on wages only. Notice
must be given on or before May 1.

Following notice, bargaining must begin 30 days after May 1.
If no agreement is reached by midnight June 30 union or company

resort to strike

may

If

the

steelworkers

a moderate
price increase
will probably average about $4 to $5 a ton.
It will be higher
on some products, lower on others; it will not be an across-the-

wage

are

finally

able

to

wangle

increase of say 10 cents an hour, the steel

scrap market, which had turned soft in recent weeks,
beating this week. "The Iron Age" steel scrap composite
price fell $1.75 a ton to $41.00 per gross ton. Sharp price declines
were registered in nearly all areas.

In

the

automotive

industry

car

and

producers

truck

lost

20,000 units due to strikes last week.
Auto

output dropped about 11% in the week to 120,038 from

could

cession

discerned

be

Motor

Ford

Co.

result of

production

of

30%

tumbled

cars

the

past

15-day strike—now settled—at its Monroe,
Mich., parts plant.
An interplant trucker dispute cut Chrysler
Corp.'s auto output 20%. Normal operations for both companies
were

a

economy.

Labor troubles
lose

more

than

Thursday.
far this

so

35,000

new

over

year

believes this indicates workers'
ambitious
are

production plans"

have caused

and

trucks,

"unrest

can

this year.

the industry to

said "Ward's."

It

1,900,000 cars

planned for the current quarter.
;

industrial

on

page

pleasure in announcing the opening of a

construction

settle back to

a

may

slower rate,

•

•,

j

i

moved, may point to curtailin

chinery

Actual

erable volume for
to

supplies

military

be produced in consid¬

may

time

some

regardless of what
place in peace negotia¬

come

takes
tions.

No

one

feel

to

seems

Admin¬

the Eisenhower

Ass'n

Pittsburgh

of

Dealers,
Exchange

Securities

Stock

NEW YORK 5, N. Y.

PITTSBURGH 22. PA.




dangling

markets

new

Brooklyn

Academy

In

1953.

..

a

of

terest

paid

blacklisting

the

UN
devoted

many

w
genuinely

real

it

hostility

of

colors

For

of

to

,

wholly unreasonable.
Realism
and
imagination

seems

vieing for control of the
former

seems

to

have

getting the better of the

argument for the time being.

in

the ECE, the International Monetary Fund and Bank; as well as
the

v

•

such

as

page

55

barriers,

tariff

Continued

on

....

few maturities of City of Florence,

Alabama,

a

Industrial

Development

Tax Free.

This is

Bonds to yield 5% absolutely
Real Income upon which you will not have to

next

pay tax

Revenue

March 15th.

■

Here's How

You Save—
Tax-Exempt 5% Bond
Taxable Interest

Tax

Taxable Income
(Joint Return)

to

Bracket

yield

(1952)

'$4,000

after Tax

-

22.2%

V

amount

same

6.43%

8,000
8,000- 12,000
12,000- 16,000
16,000- 20,000
20,000- 24,000
24,000- 28,000
28,000- 32,000
32,000- 36,000
100,000-120,000
200,000-300,000

24.6

6.63

29

7.04

34

7.58

38

8.06

90

50.00

400,000-

92

62.50

4,000-

»

8.62

42
48

9.62

53

10.64

56

11.36

77

21.74

|

probably is because the

Contentions

that

City of Florence 5% Tax
Interest

payable April 15th and October

15, 1967 available in $1,000

Exempt Bonds'

15th. Maturity due

October
:

bearer bonds at par (100).

turn

means

reduced

Gearhart & Otis, Inc.

de¬

45

Nassau

als; and that
dustrial

a

letdown in in¬

frequently

activity

to

keen

competition,

Atlantic 1-7380
-

Continued

on

page

43

White & Company
Mississippi

Valley

St. Louis

1,

Bid?.

Mo.

Street,

New York

5

McCoy & Willard
30

Federal Street

Boston

10,

Mass.

to

through

expansion

trade

lowered

erected

machinery

other

further

We have available

mand for all kinds of materi¬

leads

tradei

persistently j shunned

has

Income Taxes.

a

settlement

unforeseen

This

;

and

are selling at the highest yields in ten years. In¬
municipal bonds is completely free from Federal

on

reached with Moscow—which

46 the

^

aluminum,

Municipal bonds

rearmament could be

are

.

.

.

5% TAX EXEMPT

preparedness for
considerable period unless

some

.

strategic materials, as

to the stimulation of international
trade, the Soviet has shown its

Music,- April 22,

of

.

in

organizations

fertile

provide

^

molybdenum,
steel alloys.

balt- Even in th^ case of

Inc.

610 Smithfield Street

,

.

the

and

strictly barter basis, be-

a

terested

KSWffSdSSSt

implies a slackening in
armament production, which

70 Wall Street
WHitehall 44540

the

in

(he Russians were only in-

cause

rio-

for

on

peace

Graham & Company
Nat'l

commodities

then

slowdown in

investors.

GEORGE J. ARNOLD

Members

for

goods accounting for a sizable
part of the Gross National

readily appreciated by most

Management of

materials

fradc

to

production of ma¬
and
other
heavy

realist's arguments are more

NEW YORK OFFICE

aim

Hpqi-rfv

^afpro^raLruteTxce^
r°™1

assuming that the urgency of —lia) ,oxt of addresa by Mr Ma)r
national preparedness is re- before Institute of Arts and Sciences,

been

under the

time

products. The indication that tradp

stock market's destiny. And

.

Continued

We take

trio

.;

fh

f

negotiations following the terminati0n of their three-year trade

.

tious

needed

sorely

machine.

war

insincerity of their protestan

appeared

in demand for civilian

down

crimp the industry's

A record

ti

appeasement strategy in the po-

the prospect

any

The Russ}ans similarly showed

th

less building-up of her military maof ch"*ea
slackening in armament Europe®Tconomies Tlso S
output than ill a possible letpresent a particularly propi-

on

cars

® Rus.siar}s' peace-offentechnique in the trade sphere

near-strategic

.

make

to

equipment

capital

for their

dovetailing with their current

-nnmio

refused

f

-

A

°

Economists

worried

a

restored by last

dissen-

creating

-

no

goods unless they were to be tiedjn with.
the raw materials and

danger spots in a hng objectives of nthor
Soviet ecorirhlmv"*
nomic policy"; the other aim bereadjustment to a peacetime jng aCqUisition of strategic and
absence of

istration would approve

week as

The

goods. But practrade actually resulted
the Conference, because the

from

even

deemed helpful, al- lltlcal field
H: must be rememthough pessimists professed to
nXnV°of °the
scent a pattern
reminiscent WOrld has, through the years, conof 1929 in emphasizing the stituted one of the two control-

that

was still 25% higher than the 96,084 in
week, according to "Ward's Automotive Reports."

Russians

sion
.

of East-

consumer

tically

were

the

ago

surplus

May

paucity

trade; dangling before their
business-hungry
industries ; the
fiction of Soviet demand for their

certainly
predictable.

Wilfred

the

West

the

1 i n's

more

A.

democ-

Western

the

over

tures

lts

to

135,754 last week, but
year

m

in

racies

a.im ?f

The
a

is

r e

and their satincessantly
agistirring up dissatis-

toward

faction

early
relaunching
of
appeasing ges-

Product.

board increase, "The Iron Age" declares.

took

by

sims of a serious resigns oi a serious le

xio
no

ment

lockout, asserts this trade journal..

or

Peace

the trade

on

that
uiaL

work, time, or ingredients in meeting customer

tated

o

Offensive. But

warrant up¬
quotations.
Assurances from Washington

specifications.

stooges

Kremlins

the

ward revisions in

prices had been expected for some
supposed to be based on actual costs resulting

spokesmen

ellite

new

K

ly vigorous

extra

Soviet

f

front

helped

nomic Conference in Moscow. The

the

on

hmetable

considered demand sufficient¬

during the period of price stabilization.
in

arrive

J
was

strategy was effectively employed
at iast year's International Ecor-

German^ urnwill

fieation

advances in certain
types of semi-finished steel,
suggesting that producers

doubtful, added this trade magazine, that the steel price
structure
will be
finally clarified until the question of the

Increases

exPeeted Soviet proposals for

moderately.

scattered

It is

seventh

According to Washington dis- ground for the Kremlin's temptdiplomatic officials are ing blandishments,
guessing the exact hour on which
Typically, such clever trade-bait

this patches,

demand

cautious

Sentiment

v\r. 7..'

*

.

and

lic interest.

working weekly, the current week. Consumers may expect extra
increases by other producers who have been studying their prices

" 'V,-

Slackened

lying tendencies lacked the
spark needed to bring in pub¬

price action by a major producer since priee controls ended—but
it won't be the last, according to "The Iron Age," national metal-

carefully for some time.

have

to

Surprisingly good March
quarter earnings statements
failed
to
generate unusual
enthusiasm, however, and ral¬

98.8% of capacity, down 0.1 of a point from the preceding week.
The effects of the recent labor-management dispute on a railroad
near

on

bolstered the list

years.

week

possible

depressing in¬
share prices. Sell

pressure

week

Employment continued to hold at
for unemployment insurance

over a

seems

lost much of its

few weeks ago and was only about 3%
peaty reached in the final quarter of 1943.

all-time

the

below

it

truce

5

0

The Commercial and Financial Chronicle

(1734)

ing

(Clouded Outlook foi Second-Half

new

the

in

their

time

same

Formerly Chairman, Council of Economic Advisers

and

took

trols

would

would

a

on

stride,

McCoimick Sees "Sad and

a

but

in

Sick"

con¬

at

the

inflationary dan¬

This

ger arose.

distributors

liquidation of

new

Exchange tells panel of National
people are making money in
the securities business, and for at least 50% of them "it is
their own fault," while the other half suffer because of gov¬
ernment regulations and taxation. Defends aggressive securities
Industrial Conference Board few

spread talk of ammunition short¬

Though stating

really know what is going to

no one now can

(2)

recessionary break of moderate severity;

a

(3)

and

stabilization

a

My title is

of economic double-talk. It
taken

for

literally—and

your

merely
no

one

speaker
that

can

can

be

even

as

—

know

what

think

is

l'r

■

going
to happen to

the

W*

in

of

The

as

off"

on¬

Edwin

the

G.

Nourse

al¬

of

boom

a

period;

than

anything

consumers and business¬

men
but also by the
mysterious
machinations of the fresh team of

mischief-makers

in

the

Kremlin.

But my

title can be read also as
intimation that the speaker
thinks the business prospects for

tion

from

mobilization

Industrial

C

a

Such

land

£'! >,ii V

.

Three

I

was a

great deal of easy optimism
about a
"confidence" boom ex¬

McCormick,
President
the

of

American

Stock

change

Ex¬

and

formerly

which

of

further

for

three

a

tending well into the future.

to

of

whom

men

I

"commercial

as

would

refer

The

state

in

of

discussion

a

the

securities

the

of

business

may look for signs' which he characterized as being
inflationary danger or in a "sad and sick" condition.

the

that

of

area

United

we

fiscal

policy.

Treasury, the
Budget, and the

the

In

may

States

of

,

economists."

They "make book" on what is
going to happen in terms of per¬
centage points on the wholesale
price

index, the Federal Reserve

Board's

production

index, or the
various rates of
interest, and bet
their professional
reputation, their
jobs, or their chances of promo¬
tion

of

or

consultant fees

omist

of

scientific

more

than

addition

other

Mr. McCormick,
participants
were
Becker, Chairman of

Neal

Dow

the

to

panel

National

Industrial

Board and

ence

Confer¬

Chairman

In-

of

as
a
whole
are
tertype Corporation; John S. Sin¬
policy of holding clair, President of the Conference
spending and holding up Board; Fred Lazarus, Jr., Presi¬

down

on

on

taxes

as

close

to

a

so

this year" and
by the statis¬
tics from week to week of actual

operating rates which would
to

up

almost

mischievous

nessman

and

the

for

throughout

econ¬

the

public

busi¬

because

it

encourages them to base their
actions on some favorite sooth¬

sayer, and it checks their process
of continuous
study of constantly

changing events
able

impact

and

the

on

their
trend

prob¬
of

the

economy or a particular business.
On

the

nently
and

other

hand,

for

proper

the

stimulating to

man

and

the

it

is

emi¬

economist

the

business¬

individual

spender

and

investor for the economist to
his tools of analysis to
explore
what may happen if various forces
use

or

factors in the economic
picture

maintain
or

less

a

discernible

and

more

measurable

trend, if they
change from possibly foreseeable
couise, if quite new elements are

injected
certain

should

as

the

develop

events
or

into

process,

alternative

(such

internal

as a

•versitv

15,

external

truce in Korea)

price

Treasury refunding
*An

cut

or

of

the

moves.

address
of

if

policy-making—such

Chrysler's

School

or

combinations

from

by Dr. Nourse before the
Administration, UniBuffalo, Buffalo, N. Y., April

Business

1953.




million

also

inhibitions says: It is not
only
dangerous for the economist him¬
self to offer
"dope" on what will
happen in the business scene. It
also

6.5

It

leanings

fed

was

cars

maintained
fed

was

tions

of

make

which would

top figure

the

outlays
$27

inten¬

this

the

if

year.

management

match

of

add

cars

by stated

business

capital

to

year

previous

billion

and

by

week-to-week

figures of
engi¬
neering contracts let and housing
starts which would match

bet¬

or

ter the records of last
year or the

before,
higher."
year

The
been

a

"whichever

was

would

you

prefer—by

February and March

FRB

pro¬

duction index which
surpasses any

previous

peak.

tressed also

(and

a

by

It,has
a

stock market rise

lowering of

margin
further

quirements)

and

pansion

ex¬

loans

and

business

of

consumer

note

been, but¬

by

credit.

A

re¬

reassuring

been given to the busi¬
picture by the fact that total

inventory

figures

have

not

run

materially ahead of ratios to sales
or
production that
past been regarded

In

some

prehension
aded

as

a

of

be

based
reason.

in, the

sound.

Republican

the

economy

manage¬

might

over-confidence
emotion

There

were

rather

in

boom
than

some

lurking
fears that we had been
sitting on
the
inflationary safety valve and
that, with the removal of wage
and

or

price controls and the

relax¬

have

watch

miserable job,
capital¬

a

American

system

to

people

of

the

States.

companies,

in

the finance

everyone

nity, has made

banks,
commu¬

look bad. Today
only have six and a half mil¬

we

us

lion stockholders. The
way to be¬
come a small businessman in this

country today
is to become a
stockholder and we have
done

nothing to put that
I

think

it

will

program over.
be

the

biggest

munism if

Mr. McCormick: About the Fed¬

in

America

stock

private credit is heavily extended,
and if mortgages, bank
loans, and
instalment sales are resorted to as

you

United

of

means

ish

keeping

of

pace

the fever¬

up

business

in

maining-quarters of '53,
well

the

re-

might
the onset of dangerous

feel

inflation.

But

here

we

I would

too,

say that the present situation is
moderatelv encouraging. We have
a

experts

in

ment.

the

Both

imposing

I believe their

business

dence.

I

operated

for

public at
I

the

benefit

of

the

thought I might be asked,

as

answer

Lazarus, how
and I had a ready

was,

for that.

If

Mr.

the

danger of inflation get¬

ting out of hand for monetary
credit

exnansion

or

likewise

reasons

is not serious.

fact;

must

to

watch

the

field, we
developments in the

of wages and

lar^

this

at

artificialities
have

been

third

or

prices, particu¬

moment

of
are

when

direct

being removed

incidentally, when

new

leadership is being tested.

union

in

a

If

we

a

industry is booming.
prices in the stock market

very sad

and sick state. Few

making

are

business and

least 50%

of it

and

think

I

of

cause

and

other

government

I

think

own

half

is be¬

regulations

we

serious

industry has
doing

have been alerted to

situation
come

which

to and

we

higher

and

costs

a

and

leapfrogging
higher

as

a

has

way

Continued

on

page

26

3:30, and I

am

proud to say,

junior exchange,
on that.

Also,

permissive

we

do

Stilwell:

What

does

by

mean

six

Mr.

and

Mr. McCormick:

As

a

matter of

a

fact, Brookings Institution made a
rather extensive study in the last
in

year

which

by

tical
that

in

certain

techniques, it
the

six and

are

a

statis¬

arrived at

was

United

States

there

half million individ¬

uals who hold stock in American

corporations.
Chairman

Becker:

Mr.

McCor¬

mick, I am going to astonish
by asking every member of
who

of

owns

you

the

or

more

stock

common

one

in

some

company

—

it doesn't matter what

company

—

to put

up

his hand.

:

Chairman Becker:
Well, I would

roughly 90% of the people in

say

this
of

room

own

common

maybe

at

least

stock

in

one

a

share

company,

apple tree.

an

From The Floor: In view of the
show of hands, maybe this
ques¬

tion isn't proper, but Mr. McCor¬
mick mentioned that most of the
firms are losing money.

Possibly
they are selling their services too
cheaply. I wonder if you care to
on

that?

Mr. McCormick: I think
you put

finger right

The

commission
years.

schedule

a

for

There is absolutely

the

ules

it.

on

Exchanges have had

rigid
many

no sense

present commission sched¬

for

selling Stock Exchange
securities, the New York Stock
Exchange, the American, or the
individual exchanges. It just does
not

pay for an intelligent man to
in the security business at the
present schedule of commissions.

go

Why
skilled
the

should

a

young

security analyst

combination

of

man,

a

who has

being

a

good

salesman,

go out and find a person
who has $2,000 and sell him a hun¬
dred shares, a single round lot of

securities at

something

to

will

we

$5? That is what the salesman, that
is supposed to be trained and have

to correct it. I
think that the importance of the

prices, 3:00

two

or

are

finally been recognized
by New York, and last year they
of changed their trading hours from

then you would want to hold
your

hopeful that within

year

our

further round of stiff wage

advances

the

half million stockholders?

at

fault,

taxation.

I think

the

is^heir

the

in the

money

securities

west

a

is

going up, on the average showing
increases, the security business is

the

control

This

Yes.

most

With

people
Watch Developments in Wages
And Prices

Turning

Mr.

to

McCormick:

a

very

next

your

ments?

of

and as I say, we
miserable job of put¬

McCormick

how is business?

Mr. McCormick:

common

over.

comment
now,

buying

companies

lot better.

a

Chairman Becker: I will ask you

are

that

got

be

can

started with Mr.

business

or

and,

market

50%.

we

am

the

by

States,

ting this

or

the political influences
brought to bear directly
indirectly through the Congress
can
be held
in abeyance, I feel
that

stock

It is lousy.
unduly check¬
Chairman Becker: Even with a
activity and confi-, reduction of the margin require¬

demoralizing

ing

lower,

target was 40. They
satisfied
a
sound,

entirely,

are

adequate

restraints wherever they can with¬
out

Would

still

Mr. McCormick: I think, finan¬
cially, I'd be satisfied with 50%.

Treasury Departr
"feeling out"
and

Yes.

it

it altogether, or is the
margin requirement all right?

are

conditions

lower

abolish

competent

money management
agency
in the Federal Reserve
System working in accord with a
strong team of debt management

Becker:

to

sell the obvious

can

the

have done

shares

Chairman

like

in

audience

Reserve Board?

we

labor-

our

advantages financially and socially
of becoming a small businessman

in

breast?

eral

monetary policy. There is no
denying that both business and

a

criticism

for

inflationary danger

new

rankling

any

your

to

area

is in

area

confidence boom based

an
on

have
as

quarters there was ap¬
that
what
masquer¬

sounder

ment

fact

second

signs of

removed

;

has

ness

on

virtually

"contained."-

market

optimism of January has
justified or aggravated —

whichever

be

The

by statements from the automo¬
bile industry that
they were "go¬
ing to make and sell 5.5 million

the

or

rather

the

Insurance

to

as

as

By

peak.

a

The "confidence boom"

or

Is

plateau

a

the

on

shrewdness of their guesses
smiles of Lady Luck.
The

reaching

poorest job,

selling

United

Administration
committed

would

was

of

istic

management relations, and I think
it will be the death blow to Com¬

,

ber

the

thing in smoothing out

produce or come dent
of
Federated
Department
possible to a balanced Stores; Professor Leo Wolman of
budget—one of the stronges safe¬ Columbia University, and Charles
definition it would last for four
the third and fourth
guards against runaway inflation. J. Stilwell, President of Warner
quarters of
years, and by that time it would
this year are not too
If Mr. Truman's 1954 budget is cut
bright.
& Swasey Co.
be so well established that it could
\
As a matter of
fact, my choice of go on irtdefinitely. This optimism by $8 or $10 billion and the spe¬
Thq transcript of the portion of
cial post-Korean tax increases are the
title reflected an intention to
was based on the fact that
panel discussion in which Mr.
sug¬
current
simply allowed to lapse without? McCormick
gest both these things.
First, I employment was high, business
participated follows:
wanted to do a bit of
any
further tax slash, then we
and consumer s
debunking,
Chairman Becker:
p e n di n g well,You
think
should be so close to balance in
Forecasting or prophecy or crys¬ heeled and full of confident
more highly of
op¬
[The Federal Re¬
the consolidated cash budget that
tal-gazing has become an occu¬ timism, population
serve Board] now than
growing vig¬ I think this
you did 60
source
of inflation
pational disease with a large num¬
orously, and government spending
days ago. All right. Do you still
an

is going
recognizing
importance of doing an intel¬
ligent selling job. We have done
move

Exchange

McCormick

engaged

directions

this kind of development?

First is

T.

we

reassurance

escape

E.

^.

Inflation Signs

suggest

Bureau

In the year-end and New Year
business outlook
statements, there

T.

member of the

May

to
-

Edward

big

be the necessity of

the

Commission,

less

boom

in

I think the next

to

Cincinnati, O.,

outcome—■

severe

high-level stabilized prosperity.

Plaza

Hotel

apparent

an

at

which has been adopted as a
very
important aid to the industry, and

Securities and

planning.

re¬

or

of

held

Nether-

side" from

up

period

nference

the

keep in mind in his future

in
a

the

on

o

Board

which the provident businessman

rather smooth transi¬

a

was

the

at

National

the

must

have had since

we

of

Meeting

and perhaps runaway
inflation—cannot yet be dismissed
from
the
range
of possibilities

wave

(2)

conducted

339th

of cuts

ease

panel discus¬

Administration"

budget

over-the-counter business gaining.

sees

"Business Under the New

on

accelerated

three

revived

a

out

recent

stabilization.

characteristic final "blow-

1937; (3)

ways nervous and often naive be¬

havior of

These

cessionary break of greater
severity but certainly more

tossed

by

(1)

1954

spending, there

inflation, which would be the

rather

are

not

are

of

turbu-

about

outcome.

possiblities

that

being
lently

"break
its

of danger in

sources

satisfying

still

picture

follow

need to do to attain the most

zens

clouds

that

the

are

Since all

Congressional

the

sion

a

that, even un¬
der
Eisenhower and
Humphrey
and
Dodge, we might see con¬
tinuing and larger deficits and
that we might see the economy

direction; and what we
businessmen, officials, and citi¬

.:v* w-,

v

1953.

shroud

ly

■.

mimii'KJS

second

half

conceivably

the

of

course

Administration's dis¬

new

current

salesmanship, and
In the

distinct possibility

another

v

business

in

one

what

American

with

of

in

War

illusionment about the

outcome, which would
dangerous, is now unlikely;

be

coincided

and the

on

economy.

during the next few quarters.
In
doing so, I shall explain why I

15,

World

consideration

Ways from Here

could

sub¬

and the renewed
of more Koreas or

third

a

this

me

affairs

force,

wake of Stalin's death.

this general background,
lay before you three pos¬
sible patterns that our economic
let

air

apprehension

With

safely
meaning

most

on,

April

really

Three

unblushing piece

an

unidentified

coasts, inadequacy

our

greater further expansion of

a

the

a

could be based

program

price-income adjustment for all parts of the

a

Korea,

of the civil defense program, need

for

rather smooth transition from mobilization boom to high-level
stabilized prosperity. Says we have not "licked the business

cycle/' but points out

in

age

marines off

happen to American business in second half of 1953, Dr.
Nourse intimates outlook for third and fourth quarters of year
is not too bright. Lists as possible patterns economic affairs
could conceivably follow: (1) a revived wave of inflation;

Security Business

President of American Stock

from wide¬

came

Thursday, April 23, 1953

sky¬

be off

of inflation.

wave

fact

By EDWIN G. NOURSE*

f

prices

we

Producers

Year's Business
TP

CMP,

of

rocket and

...

led the

corporations,

at

his

the

$20, $2,000 worth, for

finger tips the facts about

company

—

that

is

what

he

will

get by finding a person who

has

$2,000

to

put

into

equity

securities.
I

say

that is simply stupid, and

Continued

on

page

25

;

Il

Number 5214

Volume 177

(1735)

!'l The Commercial and Financial Chronicle

.

r

-

.

•

.

tion in this country.

President Eisenhower in his State

ly, there is no doubt or disagree¬
ment as to their desirability and of ' the
to the direction of the first reduc¬ said:

Objectives of Treasuiy's

on

Almost everyone
this subject.
Any
long continuation of this form of
'taxation could not be justified be¬
is

Under Secretary of the Treasury

Federal
Administration

Folsom explains current and prospective

of taxation and keeping

of reducing burden

ance

ance

is

reduction

not

yet

Au

the

of

details

the

or

;it

Great Importance

bal¬

ministra¬

tion's
range

long-

tax proI

gram,

to

this .»

nity
to

am

have
opportu¬

glad

to

1

talk

about

you

of

our

problems

and

some

indicate

to

b

o

the

of

some

j

ti ves

e c

which

we

nave

'devel¬

oped

during

A

;

of Lower

individual

in

reduction

taxation

of

in¬

taxes is of great

expansion by existing successful
companies.
Thus, whether dis¬
tributed or
retained, reasonable

-

Secretary
Humphrey
his statement before the Treas¬

Treasury.
in

Sub-committee on Appropria¬
tions stated the general goal of
ury

'the Treasury as
"It is

our

follows:
in the Treas¬

purpose

to help provide the proper
climate in America.

ury

these two
immediate ideal form of taxation because it
the two budgets are accounted for problems, we have the more fun¬ is direct in its impact and because
damental
one
of
attempting to the rates and definition of income
by additions to the trust account
in
the
Old Age Insurance and work out a structure of taxation can be adjusted to whatever may
the
prevailing concepts
of
other retirement funds.
Under which will have the least possible be
If only modest
these
systems funds have been inequities and at the same time ability to pay.
collected on a contributory basis impose minimum restrictions on revenue were required, taxes on
country's
economic system. individual incomes might well be
in excess of the payments. For in¬ the
You will note that I have in ef¬ used as virtually the sole source.
stance, under the Old Age Insur¬
fect
referred
to
the least bad, Since, however, the pressure of
ance plan, there is now a balance

economic

policy is very im¬

fiscal

The

which

climate
but

has

the

lives

intangible

is

effect

direct

a

of each of

upon
every¬

us

of

$17

excess

It is pur purpose to es¬
tablish and maintain such fis¬
day.

between

billion resulting from the
receipts since 1936, in¬

of

that cluding interest,

determining

in

portant

•Most of the differences

the expen¬

over

Beyond

rather

than

the

best,

system.

tax

legitimate profits are a part of the
foundation of our whole economic
system.

advance

high

abroad

frbm

and

the

na¬

policies

t©

revenues,
any

a

single

secure

large

total

dominant reliance on

form

of

taxation

is

will

as

people."

...

problem is, of

This first

the immediate
trol

We

the

of

of

confronted with

were

course,

getting con¬
budgetary situation.
one

a

ties

forecasting

of

side.

'»•

pros¬

1;

budgetary deficit for fiscal
was
based upon the

1954
assumption

year

re¬

revenue

is on the wrong

,v,

.

The

error

that

reductions

tax

These reserve funds

are

Excise

surprising that criticism still ex¬
ists to the effect that these excess

principal source of revenue
this country, and in this area

in

Excise

has

Southern Pacific

the scheduled

with

six

advance

cutback

on

revenue

months of

in

the

billion, or $3 billion a year. The
corporation
income
tax
rate,
under

present law, will drop from

used

47%

on

a

March

31,

*An

the

of

1954,

yearly revenue loss

address

Special

tional

about

Tax

Industrial

curities

York City,

April

Secy. Folsom before
Conference of the Na¬
Board, New
1953.




are

neces¬

of the

produced by pros¬

industries while others are
supplied by industries that are
perous

in

distress

some

ent

general

ness.

even

high

at the pres¬

levels of busi¬

\

•

Excise Taxes Will Continue)

will

of total revenue

view

In

it appears
have

taxation.

small

$1,000,000 annually from

To mature

to

private

To be

investors, and
been avail¬

bring in

a

relatively

proportion of total tax r

Continued

on

page

Certificates

May 1, 1954 to May 1, 1963,

guaranteed unconditionally as to payment of principal and dividends
by Southern Pacific Company

inclusive

by endorsement

MATURITIES AND YIELDS
(Accrued interest to be

added)

3.00%

3.20%

1961

1954

2.60%

3.10

1962

1955

1958

Regardless of which budget con¬

2.75

1956

2.90

3.15

1963

cept is used the deficit projected

1959

1960

3.175

for

next

year

inflationary,

would be seriously
especially with the

3.225

,3.25

very

ties

to

now

halt the inflation

seriously
real

been

which has

cutting

into

than

Issuance and sale
*

of these Certificates arc

Commerce Commission.
is circulatedfrom only
in • suck State.

the

value of the dollar for more
a

decade,

assurance

HALSEY, STUART & CO.

balanced budget was

as

subject to authorization by the Interstate

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

The

so

Though there is still uncertainty
to when recommendations for

tax reductions may

be made safe¬

R. W.

BAXTER,
IRA

L. F. ROTHSCHILD &

PRESSPRICH &, CO.

WILLIAMS & CO.

HAUPT & CO.
McMASTER

April 23, 1953.

BLAIR, ROLLINS &. CO.
INCORPORATED

GREGORY & SON

FREEMAN &. COMPANY

WM. E. POLLOCK & CO.,

HUTCHINSON &. CO. '

McCORMICK & CO.

Inc.

CO.

INC.

INCORPORATED

THE ILLINOIS COMPANY

FIRST OF MICHIGAN

MULLANEY, WELLS & COMPANY

need),

that continuing reliance
to be placed on excise
Excise
taxes
in
the

United States

1957

by

16,

items taxed

some

if these sums had not

$8 billion.

Conference

very common

Furthermore,

(Philadelphia Plan)

ceeds of sales of Government se¬

penditure figures are finally de¬
termined, judgment on the proper
The deficit figures which I have
timing of tax reduction must be
cited are the familar ones from
suspended.

revenue

sities.

are

in the same way as the pro¬

that a
in sight has
been stated by President Eisen¬
of
about
$2
billion.
Also,
on
hower to be necessary before tax
March
31,
1954,
certain excise
reduction could be made safely.
taxes, which bring in about $1
An intensive review of budgets
billion a year, are due to be re¬
duced. These four changes would has been proceeding since Jan. 21
result in an annual decline in tax in all Departments. Until the ex¬
to

52

resulting in

true luxuries and some

are

of which

imposed

now

Company

Equipment Trust

3Vs%

securities

high level of business activi¬
prevailing. In line with
about $1.5 objectives of the Administration

tax to June 30,

of

loss

a

affected

Dec. 31

income

personal

expiration
tied
up
with

would

which

1,

which

are

systematic manner
of things, some c?

Equipment Trust, Series II

proceeds of the sales of these
to the trust funds are

The

Its

be

to

come

R.

H.

very

variety

a

on

taxes

not

a

and

problems.

long-run

in

immediate

both

have

we

$10,000,000

able
through the .trust funds it
scheduled
would have been necessary to sell
existing legislation.
The
United States Government securi¬
excess profits tax is due to expire
ties in probably the same amounts
on
June 30; this would involve
to private investors.
an annual loss in taxes of a little

billion.

constitutes the

taxation

third

invest¬

under

$2

sug¬

exclusively in United States
Government securities. It is rather

would go into effect as

over

I

accuracy.

ed

deficit of $5.9 billion in
invested in
the fiscal year ending this June, receipts after being
and with
a
budgeted deficit of Treasury securities are used to
'$9.9 billion for the next fiscal pay for governmental activities.
It should be clear upon reflection
year. It now appears that receipts
United States
Government
for the current fiscal year will be that
securities
are
the
only proper
substantially below the estimates
of
investment
for
these
contained in President Truman's form
funds.
It
would be foolish to
Budget Message of January.
hoard the cash and it would not
Though the amount involved is
be wise to invest these Govern¬
no greater than is likely to occur
ment funds in private securities.
at times in view of the difficul¬
pective

ceipts, the

of

gradually decline.

....

.

or

degree

considerations.

.

necessary*

likely to lead to its breakdown.
permit gradually reach a pay-as-you-go strictions.
America to continue to grow basis. Under these conditions, the
Corporate income taxation
is
The criteria for modification of
and reach even higher stand¬ difference between the cash and
the second major source of taxa¬
the
tax
system were stated by
ards
of
living
for
all
its administrative budgets will also
cal

predicted in.
determined with any
be

gest, however, that at rates around
50%
it
becomes
a
major
and
not
a
minor factor in business,

think, important to keep in tional desire to carry on a con¬
tax system siderable variety of domestic gov¬
be positively good.
It is in¬ ernmental
functions
m a,k e
it

that further large

corporate

point in

cannot

taxation

the fact that no

generally agreed can
additions to this evitably burdensome and restric¬
We can hope only to min¬
fund are not necessary and it is tive.
imize the impact of the sacrifices
expected that with the increase in
and the consequences of the re¬
expenditures that the system will

ditures. It is now

threats

„

critical

The

It is. I

mind

-

the

.

past three
months
the

breaking

a

point.

importance
be undertaken."
because
of the
very
heavy tax
burdens now pressing on people at
The most basic issue in any tax
the
so-called
administrative or
Again, I need structure is the balance between
conventional budget. The January all income levels.
not elaborate on the fact that tax the
different
major sources
of
estimates of the deficits in the
rates
are
close
to the all-time revenue. During most of our coun¬
cash budget were $1.9 and $6.6
billion for the current fiscal year high in most brackets, with levels try's" history, we have relied on
that at many points exceed even customs, the sale of public lands,
and 1954, respectively.
the
peak rates
reached during and excises. After the adoption
For many purposes, the position
either of the two World Wars. The of the Sixteenth Amendment in
of the cash budget is important
since it indicates the net impact expenditures arising from the de¬ 1913, income taxation, both indi¬
fense emergency require and jus¬ vidual
and corporate, developed
of the Government's receipts and
tify such taxes as are necessary rapidly under the financial pres¬
expenditures on the country's eco¬
to avoid inflationary deficits, but sures of the first World War.
It
nomic activities.
On a short-run
when tax burdens are as onerous has been the principal source of
basis, a balance in the cash budget
as they now are, the strictest econ¬
revenue
since 1918, with the ex¬
may be taken to indicate that the
is also necessary to keep ception of a few years in the 1930's
Government is paying its way by omy
these
burdens
at the minimum when income tax revenues dried
taxes and not pumping any new
consistent
with
national
safety. up during the depths of the de¬
money or credit into the country's
We want to return as much spend¬ pression.
economic system.
ing as possible from Government
Individual
income " taxation
is
to private hands.
The Trust Funds
considered
by many to be the

the

Folsom

B.

M.

This tax also

to

dynamic growth
have provided the equity capital"
This includes
upon which our whole industrial,
particularly real opportunity system has been built. Without for the growth of small busi¬
adequate dividends to justify con¬
nesses. Many readjustments in
tinuing
investment,
we
should
existing taxes will be neces¬
have to look to a drying up of our
sary to serve these objectives
traditional pattern of formation,
and also to' remove existing
and expansion of industry. To the
inequities.
Clarification and
extent that corporate profits are
simplification in the tax laws
not distributed as dividends, they
as well as the regulations will
constitute
additional capital for

Income Taxes

come

pushed

be

may

of the country.

with

incompatible

is

he

must

We

stacle to

on

healthy economic growth.

sources of revenue. Lists pro¬
and cites simplification and removal of
inequities as chief objectives. *

possible
to make
any
definite statement
about either the prospects for tax
it

agreed

the three principal

among

posed tax reforms

While

a proper

profits tax.

cause

budget situation and says it is desire of the new
to halt inflation arising from deficit financing. Stresses import¬

tem

defect of the so-called ex¬

the

cess

By MARION B. FOLSOM*

when
'

"...

elaborate

not necessary to

It is

Message

Union

Corporate profits, when distrib¬
develop a sys¬
uted as dividends, are the neces¬
which will
sary reward to the many millions
impose the least possible ob¬ of stockholders whose investments

tions.

Tax Policies
Secretary

7

.

CORPORATION
F.

S.

YANTIS & CO.
INCORPORATED

3ij

8

The Commercial and Financial

(1736)

P. R.

Chronicle... Thursday, April 23, 1953

Mallory—Information—Troster, Singer & Co., 74 Trinity
Also available is information on

Prof. 0. G. Saxon fo

Place, New York 6, N. Y.

Dealer-Broker Investment

Recommendations & Literature
send interested

to

Stocks—Brochure

Bank

mentioned will he pleated

understood that the firms

It it

case

Mead

Johnson
&
Co.—Memorandum—Zuckerman, Smith &
Co., 61 Broadway, New York 6, N. Y.
Missouri-Kansas-Texas Railroad Company—Analysis (bulletin
No. 121)—Smith, Barney & Co., 14 Wall Street, New York 5,
N. Y.

for these issues, in¬

par¬

Limited, 50 King Street, West Toronto, Ont., Canada.

In the

growth

brochure

brief analyses of St. Lawrence

are

Co.,

Packaging

and

Corpora¬

which

stocks

tional

Company

'

Products

Corp.—Memorandum—Cohu

&

Co.,

Wall

1

Wisconsin Hydro Electric Company—Analysis in current "Busi¬
and

Financial

Digest"—Loewi & Co., 225 East Mason
same issue in an anal¬

Street, Milwaukee 2, Wis, Also in the

&

ysis of Hamilton Manufacturing Company.

New York 6, N. Y. Also in the same
bonds, preferred stocks and common
appear interesting.
A memorandum on Na¬

lists

are

Philco Corp.

Street, New York 5, N. Y.

115 Broadway,

bulletin

on

Company—Analysis—

—
1952 Annual Report —
Company, 910 South Michigan Avenue, Chicago

80,111.
Victor

ness

Industry—Analysis—Goodbody

Insurance

Company of Indiana

Standard Oil

tion Limited and Cockshutt Farm Equipment Limited.

Container

memorandum

a

Accident

and

Safeway Stores, Incorporated, P. O. Box 660, Oakland, Calif.

Corp.,

same

of Canada—Dominion

likely to

Securities

in

ticipate

Life

Standard Oil

cluding pertinent facts on 28 selected banks—Kidder, Peabody & Co., 17 Wall Street, New York 5, N. Y.
Canadian Companies—Analysis of 36 companies

Also available is

National

Address NY Dealers
Harry R. Amott, Amott, Baker
& Co.,
Incorporated, President of

Clark, Landstreet & Kirkpatrick, Inc., 515 Fourth Ave., N.,
Nashville 3, Tenn.
Safeway Stores — 1952 Annual Report — The Librarian, CF,

parties the following literature:

stating the

American Enka and Universal Match.

of

Foreign Investment in

Japan—Discussion of regulations

New

From

con¬

Washington

cerning it—in current issue of "Nomura's Investors Beacon"—
Nomura Securities Co., Ltd.,

1-chome, Kabutocho, Nihonbashi, Chuo-ku, Tokyo, Japan. In the same issue are discus¬
1,

for

Bank

first

New

—

York

Hanseatic

Corporation, 120

Broadway, New York 5, N. Y.
New York

Stocks—Comparison and analysis as of
March 31, 1953 of 17 New York City Bank Stocks—Laird,
Bissell & Meeds, 120 Broadway, New York 5, N. Y.

New

York

City

Bank

Stocks—Comparative figures at March
31, 1953—The First Boston Corporation, 100 Broadway, New
York 5, N. Y.

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

parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial stocks
used in the National

Quotation Bureau Averages, both as to
yield and market performance over a 13-year periodNational
Quotation
Bureau, Inc., 46 Front Street, New
York 4,
Price

New York.

Performance

Comparison of "War" stocks, "War or
peace" issues, "Peace" equities, leverage securities and de¬
—

fensive shares—Francis I. du Pont &

York 5, N. Y.

Co., 1 Wall Street, New
a

*

*

♦

,.

.

American Car &
&

Foundry—Memorandum—Auchincloss, Parker
Redpath, 52 Wall Street, New York 5, N. Y. Also available

is

*

a

memorandum

American

on

Union Oil of California.

Insurance

Insurance Company,

and

Bridgeport Brass Co.—Data in

National Fire Insurance Co.
current

issue of "Davis Invest¬

ment Digest" — Paul H. Davis &
Co., 10 South La Salle
Street, Chicago 3, 111. Also in the same issue is a summary

of Newport News

Shipbuilding and Dry Dock Company and

follow-up reports on Cincinnati Milling Machine, Pullman,
Inci, Pepsi-Coia, Cutler-Hammer, Gardner-Denver, and Re¬
public Steel.

■y

Duquesne Light Company—23-page illustrated
analysis—Blyth
& Co., Inc., 14 Wall Street, New York 5, N. Y.
Climax Molybdenum

Company

_

Analysis

—

E. F. Hutton &

Company, 61 Broadway, New York 6, N. Y.
Continental Casualty
1 Wall

Thomas

Company—Analysis—A. M. Kidder

& Co.,

Street, New York 5, N. Y.
A.

Edison, Incorporated—Analysis—H. Hentz &
60 Beaver
Street, New York 4, N. Y.

Co.,

Company—1952 Annual Report—The Secre¬
tary, Fruehauf Trailer Company, Detroit 32, Mich.
Broad

Tire

&

Rubber—Memorandum—Hirsch

&

Street, New York 4, N. Y. Also available is

randum

on

Co.,
a

25

memo¬

United Air Lines.

Great-West

Life Assurance
Company (Winnipeg, Canada)—
Analysis—Eisele & King, Libaire, Stout &
Co., 50 Broadway,
New York 4, N Y. Also
available is a bulletin on "Capital
Gam Opportunities in Life Insurance Stocks."

Interstate

General

Bakeries

Corporation—Review—Kerr & Company,
Petroleum Building, Los
Angeles 17, Calif.

Iowa Southern
way,

Utilities—Review—Ira Haupt & Co., Ill Broad¬

New York 6, N. Y.

the

Eisenhower

dramatization

public

the

Mallory

the American Public Power

trical

Match

Security Dealert Association

—

with

connected

now

Robert

D.

H.

M.

Grove Associates, 801 Euclid Ave.

French & Crawford Add
to

The

Financial

Chronicle)

Crawford, Inc., 22 Marietta Street.

With King Merritt
(Special to The

LOS

a

third whose

King

name

escapes

and

tiie

Federal

LOS

agency.

has become

questionable

they have

as

be

the

wanted

setback

a

Federal

to

the

In lieu of this, they

are

It

of Theodore

issue

that

Roosevelt.

men

ground, undeveloped,

can

resources

to

the

Fifth-third

Ca/nes

co-op

in

resources

worth nothing to anybody.
There
is no Tidelands oil unless
somebody develops it and the real issue
in this particular fight is whether this oil is
developed or not.
are

By the Federal Government it would not be.
been

able
are

to

bring myself to grief
"going to waste" in our

over

And

I

have

never

the millions of kilowatts

unharnessed

streams.

There

times mor£ tons of coal lying idle in the ground.
The
whole issue is one of private interests being permitted to
develop
our
power needs, with three highly competitive fuels vying for
markets, or of steadily increasing the stranglehold of Federal
are

many

bureaucracy under the guise of giving the people cheaper
but instead giving them higher taxes.

.

,

securities business.

Street.

'The American

power,

"exploitation of selfish

Natural

a

to

political capital back in the
is a tremendous political fraud

get blue in the face about it.

power,
,

50

—

Mendel

rities business from offices at 1534

Public

made

It

has

Geldzahler is engaging in a secu¬

are going to hear a great hue and cry in the
about the "Big Business dominated government"

natural

at

Geldzahler Opens

for New York to accept.

an

in

BROOKLYN, N. Y.

you

is

Ltd.,

offices

Street, New York City, to

engage

It is seriously doubtful whether such provisions would

years

Clarke,
with

demanding

provisions requiring that, in the distribution of the
preference be given to municipally operated and rural
onerous

D.

formed

Broad

re¬

Government

carry

over our

Chronicle)

with First California

now

George

pro¬

But the Washington perspective in

operate the plant.

few

220(1

ANGELES, Calif.—Irving N.

been

section of the St.

that in the event the license does go to New York State it should

be too

Harrison,

Geo. D. Clarke Ltd. Formed!

so

Granting of this license would

set-ups.

A.

Spring Street.

cloudy that newspapermen have asked
him at press conferences, without any subtlety but with
bluntness,
if he planned to take any action to make the Commission
act, and
he saw nothing objectionable in the questions.

build and

Chronicle)

Company, Incorporated, 647 South

plant, in conjunc¬

This is somewhat bold and of

ent, quasi-judicial

crowd

Richard

Boren is

priety on the part of the President because the Federal Power
Commission which within the next few weeks is expected to pass
upon New York State's application is supposed to be an independ¬

Power

Financial

Government

Federal Power Commission to build the power
tion with Ontario, in the International Rapids

years

The

(Special to The Financial

staying out.
In this category, President Eisenhower has said several times
that he would like to see New York State granted a license by the

cent

1151

With First California

to

capable of building and operating and, where a compact of states
is necessary for a project, to let those states get
together to build it
the

Inc.,

Sixteenth Street.

arresting the
trend toward Federal ownership of the electric power industry. It
does not intend to try to undo such an octopus as the TVA, but it
is against any additional TVA's and is committed to
letting the
private companies build and operate those projects which they are

with

Co.,

Separovich has become connected
with

living are at an all-time high.
But
they do. So-called cheap public power is a religion with millions
of people; politicians ride into office on it.
The Eisenhower Administration is committed

&

SACRAMENTO, Calif.—Yubi G.

of

cost

Broadway.

(Special to

It is truly amazing how they can make
"cheaper power" a fetish with so many Americans when elec¬
tricity is the smallest item in their household budgets at a time
taxes

Chronicle)

Joins R. a. Harrison

at

me

Merritt

South

Carlisle Bargeron

return of the Republicans.

wnen

Financial

ANGELES, Calif.—Lionel

S. Peck has become affiliated with

They flourished in the 20 years of the New and Fair
Deals but they seem to have lost none of their steam since the

that

Troster, Singer & Co.

are

Fla.

Benjamin F. Ricker

are

Association, the National Rural Elec¬

Co-ops Association and

but

Information Available

Peacock and

of the strong¬

knowledge, three well-heeled
"organizations," national in scope, operating in
Washington in public power advocacy alone:

the

American Enka

Trinity Place, New York 6, N. Y.

one

(Special to The Financial Chronicle)

ORLANDO,

ATLANTA,
Ga. —
Davidson
Henry is now with French &

come.

anti-Tidelands forces

advocates,

power

Two With H. M. Grove

(Special

a

There are, to my

days

Universal

to

only

political blocs in the country; the reclamationists, the so-called
conservationists, the
apostles of Federal spending and the so-called
Liberals generally. You would be surprised at
how
many
livelihoods, political as well as
otherwise, these professional activities afford.

interests."




of what is

is

It

Thursday, April 23, 1953.

est

Anyway,

Y.

Administration.

Comprising
the

turning

Members: N,

on

deliberate fili¬

no time had any serious hope of defeating it. Their
has been to sell to the country at the outset of the new
le^iine the propaganda thai me /\aiiiinistration
plans to "give away" our natural re¬
sources
to
private interests.
The Tidelands
constitute
only the first skirmish in what
promises to be a continuing war throughout

next

Solid "Citizens"

74

in carrying

a

purpose

not

P. R.

Tidelands legislation,

debate which smacks very much of

Lawrence River.

Fruehauf Trailer

Goodyear

opponents of the

the moment.

Company — Analysis — J. R. Williston,
Bruce & Co., 530 West Sixth
Street, Los Angeles 14, Calif.
Also available are analyses of Fireman's Fund Insurance
Company, Ilanover Fire Insurance Company, Great Ameri¬

can

The

their long

buster, have at

City Bank

Saxon of Yale Uni¬

the Association at the Hotel Bilt-

Earnings—Tabulation of preliminary figures

quarter

Glenn

O.

more,

By CARLISLE BARGERON

comments, etc.

New York

Saxon

Security Dealers As¬

versity, Department of Economics,
will address the dinner meeting of

the News

Ahead

sions of the Investment Trust Industry of Japan, Pharmaceu¬

York

sociation, announced that Profes¬
sor

tical Industry of Japan, Power and Rayon Companies, Stock
Market

Glenn

Dr. O.

is also available.

,

o?n

(1737)

Chronicle

Number 5214... The Commercial and Financial

Volume 177

"useless"

-

►'

-to
or

stages of evolution and called attention to this, ijn
print;"John Law debt money," -''Monetary Reform," J923. ,
assignats, mandate; or "Con-

his standable when

sion

.

By JAMES WASHINGTON BELL*

Secy.-Treasurer of tile American Economic

r

Association

•

Department of Economics* Northwestern University

f Head of

:
•

operation of the full gold standard, ami

Dr. Bell describes

■;

belief wbat

gpad for England was good for us."

wax

of

the

I.

•

:

,

i
-

obligations to centraF banks, in.
exchange for bank; notes. When.
this was done directly, as in the
case of Germany after. World War
I, the Reichskassenscheine became
virtually the only assets back of

in Jts note issue powers, to, pound
for. pound cover of gold vs. notes,

fHo

•"

Points

;

operation

promises, governments sold their (except during three suspensions)

: :

out bow

r

smooth

services),
and
that
and
borrowing involve
credit-debit
operations
which

were gold
standard
in the United eventually cancel or wash out.
Kingdom say from 1890 to 1913 For example, I was once greatly
ly always failed because of the seems almost incredible Jo us in impressed to see the debtor-credobvious fraud. Then, in order to these days. Under the Act of 1844 itor transactions of 52 banks, indisguise the fiat character of these the Bank of England was limited volving • almost $600 million set-

-

explains wEy it fell into disfavor. Says we got off on the wrong
track in 193$ when. we abandoned the gold: standard "in the

The

(0r

lending

tried in many countries and near-

•

^

Gold Standard.

is essentially

Experiments of this kind

;

:

into

realize that all

exchange of goods for

—

Example of Smooth Operation of g00(js

the 'redemption of the
appropriable. assets.

for

paper

•

barter

#

o

tinentals" directly without provi-

we

buying and selling

r

9

Thdi

con-)

Roir-hc

marlre

anrl

U..

i.e.,

and above

over

hnU

-,.mc

the New York

at

for

*

the

" *

cents.

fixed fidu-

a

ciary amount The Bank of Eng.land held gold varying normally.
from about £33 to £38 million.
omn.mf

tied

House

ffPnPrai

r

thp

i^4Sk» SSSSi'

'

ith

minute

Clearing
of

sum

3

;

,

reserves

,

standard

«ftid

debtor countries

in

doubtful

and

°^it^ mrrtncv
fli CUITenCy

MSelS>; Willi

usuaHv

USUaiiy

tinning to operate on our present hybrid

standard. Contends our
monetary system Has made possible a buildrupof a weak credit
^' structure through monethcation of the huge public debt •

p:
;

■

:.i?.

.

i.;,
.

:

->agement .of

•

Revival of Interest in the

•

It

snectable
specraoie

w^aooutine goia

,

standard again,

^esubject;!^nor,It fact, a revival of: ~ The devaluation

longer taboo.
interest

the

in

glad

am

if

■

-of

to '

f

re

numerous

debt from

pro-

WMons

X

nf

the market

"

.

without

being '
considered
■

politically r
suspect, with- : ;
©ut being ac-.

■

Wall Street

a

trare'liJits fnn1hi
trary limits to. the
"pronosals

There

J. W. Bell

or

hanW

100%-reserye money
incidentally destroy com-

of

minion

interpretations

,EVen

before

are

given, and at £33 million as high as 6%.
A charge of/1% 7 would attract

nawn

"ahnst nf cmid »

tn

an?

(of the old.orthodoxy and not the,

lad reaHsm

n

isi

We

not^ yet too late to return
,

^lri

after

became
so mestic and international relations.
discredited, in recent ; The benefits to be gained by a

satisfactory : record^

thoroughly
planation
tte

believe that the ex-

but I

years,

gSold

cam

be

that

they might almost 0n it and the significant point is
be considered the stock-in-trade! that
stability and

so

both'internal

if superstition and mysticism work by adheringviz: maintaining one
rigorously to but the
objective,

found^in^Eng-

and

econonaMi

depression

States

in

commodity

money

£hen critics of the gold standard
blj*me pe£?le'£* h^ding^ But

when credit collapses do we blame
svstem9

th

Sometimes we

to

the

full

tah.ish'The JSh! "
k

J?
i
.if
Pa ~
aitKer ,deflate the dej>tJ° tde

and aPd'ty °
^f,. ass,ets
support outstanding obligations at
par*

!d®^tors,r,
P y

objective as

a

»

favor in the United Kingdom,

"accom-

it seems, learned modating commerce and business." views of British Economists
•

.

,

gold

.pp

.

Why the Gold Standard Broke
Down. Why It Fell Into Dis-

employment, income or even such

general

^

111

pound on a convertible gold basis;
they were not guided by prices,
a

j

.

pound sterling sound abroad by
making the pound convertible into

_

laws of its behavior.

GoId standard had a creditable

gold
....

.

.

...

,

Another important point to

standard

this
lIUS

in

m

is
x»

connection
cuimeeuuii

the
mc

.

,

questioned the advisato the gold

returning
...

,

_

_

...

it in 1918-19 in Great Britain and

note lt

small
smau

t

k

ted

f

a

reasonably stable1 money

^iiir the United; with political

1929<-1933t

tradition;

economic

purchasing power remained rel- balance-billions of pounds of fistable. , J; M.-' Keynes nance and trade. . This is under-

J"e ea"y I9zus, ana-tne i^oia i^ei
'

controls limited by atively

forces; and it would tie

well

as
many greatly facilitate the free
However,s a ment of capital and trade.

"scientific"' monetary

more

tem

as

•; orthodoxies.

*

;

Continued on page 33

;

*

—

*

It has not preand in-

vented■' mismanagement

to grief has prompted

might

come

many

to reconsider the virtues of

the gold standard system.
J

■

;

-

j

Summary of Address: Thesis

_

is

purpose

April 17,1953

.-

1,004,869 Shares

o

Product

y Systems Are a

of Evolution.

Every student familiar with the

standard works from W. S. Jevon's
-Mechanism of Exchange" down
to contemporary texts

and banking knows

on

money

the story of

describe money,
viz.: - How commodity
full money grew out of bartering one
gold- standard; - why
the
gold commodity for another, how repstandard fell into disfavor; how resentative tokens or promises bethe present status of the dollar came more convenient media of
differs from the full gold standard exchange and effectively served
and why it is not a wholesome as
substitutes for commodity
and stable one; and the advan- money, and how, after long and
tages to be gained from an all-out, painful experiences, other assets
full gold
standard, rather than that! commodities were monetized
My

■* ,f ;

Operation of the Gold Standard

.

"

.

NEW ISSUE

flation, and the fear that unlimited or unrestricted management

—

*7/"*

sys¬

offer to sell nor a solicitation of offers to buy any of these securities.
The offering is made only by the Prospectus.:
•;»

This advertisement is neither an

move-

did not prove to be a satis¬

factory substitute;

Common Stock y

to

Par Value %S per

briefly the operation of the

continuing to operate on our prescnt hvhrid

when Goldsmith and other modern

standard

Mycon^luskinsmay

bankers assumed demand or

.

,

he

brieny..-h.obUgationSonthe the next
basis of
fractional cash reserves;

:

-

summarized.

stage of the evolution was reached

-

_

got off on the wrong track
in 1933 when we abandoned the
We

when

central-bank

serve

as

member

debt
bank

pression that followed, and in the wften the gold reserve was
belief that what was good
for stracted from the monetary
England was good for us.
With the resulting freedom from

♦A

talk

by

Dr. Bell before tbe MidAssociation, Cedar Rap-

Economics

ids, Iowa, April 9, 1953.




Holders of the Company's outstanding

.

•,

.

.

Common Stock are being offered the

right to subscribe at $14 per share for the above shares at the rate of one new share
for each 17 shares held of record on April 16, 1953 and the additional privilege of
oversubscription, subject to allotment, for shares not subscribed for pursuant to
the above offer. Subscription Warrants will expire at 3:30 P.M., Eastern Daylight
Saving Time,

on

May 7, 1953.

agreed, subject to certain conditions, to pur¬
unsubscribed shares and, both during and following the subscription
period, may offer shares of Stock as set forth in the Prospectus.
The several Underwriters have

chase any

Copies of the Prospectus may be obtainedfrom any of the several under¬
only in States in which such underwriters are qualified to act as
dealers in securities and in which the Prospectus may legally be distributed.
writers

The First Boston

completely and inconvertible
debt-money rests on nothing but

Corporation

tern

gold standard restraints we built debt, as in the case of United
a weak credit structure, prin- Kingdom and, domestically in the
cipally by monetizing the huge United States,

vrest

,.

,

absys-

up

The political man-

.

Share

to

came

reserves,

gold standard in the belief that it ^us providing for the pyramiding
rather than monetary and eco- 0f debt-money through the operanomic management was to blame ^jon
a secondary credit expanfor the collapse and the great de- sjon. and a f|nal stage is reached

public debt.

the

as

collapse give

impact of Keynesian eeo- the currencies of the world: to a
nomics destroyed? the gold stand- single measure of value and thus
ard

t

.

The

other

_.

_

^fandar ^after World War I. The
Cunliffe Committee recommended

theeT920's, Sm^Lg^^wSxItirfraU occasionaIly but was always re-: amount of gold 'reserve which
gold people
a store of value;1t would aa'ablished and on the whole its was needed to keep liquid end m ence a
Bruxel

stentod to,
witl^

we haven't yet,

history for neary a century prior
are: confidence in the dollar be- to World War I. It broke down
retUrn

and in the association of the
standard

+

ask for the
itself,

money claims and

g°ld

th sa£ety; the character of credit (debt), nor Its secret was to keep the credit ; ; Nobody
do we understand the rules or structure sound sound abroad the /Not of
at home and bv hility
nound sterling

,

!Ie havf.,en?ugb gold t0,both dos"pp?rt
credit structure in

and the

long

a

«!'•'«

u

PVHeral riph'f" of critics of the g°ld standard- The international
were
Federal debt, implication of these stories is that achieved to a stability degree
remarkable

.

new).
gold, standard,

^nany
i

UaP- These latter two examples cording to expectations and busimoney have been cited nessmen and bankers could count

-inese proposals iacK realism, we with primitive peoples they should
should face the problems of re- work with us; we can bury our
est, operating a gold mine, or gaining public confidence in our gold and live successfully and
perhaps even being considered an credit structure by returning to a happily in a ghost world.
,
!
unconverted, orthodox economist fully convertible currency..
the lessons of history
.

4.

^otcs) Jpjthe, ghost ol gol<V ani understood how this "automatic

other pressure group inter-

some

sup-

Keynes, D. H. Rob-

delightful little. Alice-hvWonder- rest of the world, and 10% ''from
land_style book on 'Money,"Ade- the moon.". .\2.3 V'..'-V.":.:
scribed: the." relationship
of the A? Hartley Withers maintained
John Bradb
>s (British Treasury that not
men in ''The City '

* of token
often

=

establish

(and

cused of being
a

was the free operation of market

assets

tne.marKet, he related stories about the South gold-flow .exchange /system 1
creait system, sometimes we
% debt in ^Ub?3rlt-al p0rftl0n
and then nothing goes but
of the Tnf-3 the banking system,. African foreman with a glass eye worked, but the important thing do
and stone m
on the Island of
.
§ worked ac? spot-cash or barter transactions.
7®Dl

^r.

tandard.

s

thisxondition,

the Dublic

el y

about the gold

not

posals have been made to isolate

able, to

talk

of the dollar

jeopardize public confidence
well managed.
Conscious

may

g; the ?

postwar years.

i

he

rate

bank

whichVtf noUm figure was*araroachL a redue- ply and demand forees- Naturally
l)acJ^ ®1 ll» ass^ts wnicn, it not im- ngure was approacnea a reauc
conditions under which the
mediate y aPProPriahle, will even- tion in the bank rates mighf, be g0jd standard works are the same
fp^^beepme so.; In the mean- expected. In fact, the effect was
those required of any credit
time the status of money in rela- almost automatic: at £38 million
H
^
tion to gold is not clear and dif- the rate might be as low as 2% y
*
- J'
' '
ferent

and the' magnitude of public debt

.

occurred

.

durin

the

J and n-' This gives debt money preached

and-vvavstems^4rade ^e^ritf

The gold standard system
breaks down when people at home
j^^j^yj^j^j^ 'serable credit structure- a vul- erts0n, in the early 1920's, in his gold from Europe, 2% from the or abroad loose ^confidence in
moneUzationhavecreated which

.

gold standard
has

as was

money

limitations and was none too suecessRll inaccomplishing what was

re-

about the eold

talk

to
w

become

have

seems-to

people's

-'toeen set by gold standard

Standard

■

the

j?cked. ^ discipline which would

Geld

an effect on the Bank Rate.
the practice in World Wars Ifthe. lower '. figure -was

jcit.financing through the market, had
,

Before

the

monetization

mysteries
were

o{

debt

understood
,

.

it

,,

did not seem illogical to skip the

Ladenburg.Thalmann 8c Co.

Carl M. Loeb, Rhoades&Co.

Wertheim 8c Go.

10

The Commercial and Financial Chronicle

(1738)

Thursday, April 23, 1953

...

life insurance investment has been

Life Insurance

directed

Companies

Responsibilities of Bankers

from governments

away

private enterprise/ V

into

and

By J. L. ROBERTSON*

Trusteeship

And Securities Markets

life insurance is

JR.*

By GEORGE T. CONKLIN,

^

Member, Board of Governors, Federal Reserve System

characteristic of
ingrained with
management and

The trusteeship
life

Second Vice President

insurance

so

the public alike, and so

Guardian Life Insurance Company

Although stating principles of sound banking and credit are
the same, regardless of a bank's size, Reserve Board member
points out, in small bank, director must have more compre¬

taken for

granted that at first blush it seems
v

However,

fixed interest rate on reserves. Explains
investments in various investment
categories and finds direct placements of corporate bonds be¬
coming a dominant factor in this field. Says life insurance
companies have shown a decreasing interest in common stocks
in recent years, despite legislation permitting them to invest
life

insurance

75

ship

of guaranteed

cause

to

unnecessary

discusses leading factors which deter¬
policy and its importance be¬

Life company executive

mine life insurance investment

far

was

from

reality in

a

industry.

years

Neither
The

truism, the absolute safety of life
insurance.

1870's

life

and

the

fundamental

the

cause>

principles of sound banking

of sound

the

one-half of all
companies failed,

practically

insurance

and

of

decade

the

In

practices

The

influence

the

curity

markets
in

understood

life

size

location.

or

d i

of

When
r e c

upon

the

se-

t

be
the

b

may

the

e s

light

of

Growth

A

factors

which

which

insurance

ence

icy. The

to

factors

will

be

cussed

dis¬

bilities,

in¬
there

Such

to take
T.

G.

Conkhn, Jr.

on

National

a

factor
c1

jn

tending toward conformity

is the fact that

regulation

in

policy lia¬
that the life

meant

could afford
long-term point of view

an

another

cash

gr0ss

four

It

has

meant

benefit

ex¬

of

basis.

funds

It

dustry

the

ignore

has

short

three

payments,

allowed

thus

investment
term

running

inflow

times

has

and

insurance company domiciled, say
in Iowa, and wishing to conduct
business

a

of

industry

investment.

Association of In- to

Commissioners. A further!

surance

the pre¬

over

tremely low liquidity needs, with

the state level and is co-ordinated

by

has

insurance

reg¬

is

as¬

stability of assets,
with the long-term and

predictable nature

about the most

ulation

year

cyclical

coupled

regulated
is.

no

period in which

vious year. This continued growth

just

dustry

continued

there has been

grow;

and

indus¬

is

try

depression, life

sets did not increase

briefly.

policy, has

have

assets

in this entire

The life in¬
surance

its investment

influ-

the

insurance

f

o

primary

a

in prosperity and

more

important
these

had

for

on

long-

a

market

run

in-

ability

to

price

must

state,

fluctuations and depressed values
conform substantially to the regu-i 0f 'distressed
business conditions,
lation
standards
of
that
state. and to hold for

16ng-term

FJew York State insurance law has
had

wide

influence

in

this

re-

spect, since companies doing busiin New York hold well

ness

over

80% of all U. S, companies assets,
As

far

investment

policy is
concerned, regulation affects it in
as

three ways.

*(1)

has

dustry

Furthermore,
hence
surance

pals,

York

State

fields

these

S.

Governments, municiCanadian
Provincial
and

:

as

are

cannot be

They likewise frequently

regu-

permitted
set

any

field,

one

minimum

up

qualify

in

and

standards

to

investment.

an

surplus. New York State

pro-

hibits the accumulation of surplus
in excess of 10% of reserves and
other

policy liabilities. This is an
extremely important factor conclitioning life insurance investment, for it

means

cushion which

is

can

that

the

risk

be accumulated

strictly limited. Consequently,

it severely limits the risks which
a life insurance
company can ap

Interest rates

/o\

rru

1

„

Certain

as

commons

*

may

the limitation

amrauce

investment

quired

in-

the equity

fiem must necessarily be limited,
Considerable work
Is

now

being

provide

on

carried

attempt to arrive at
greatei

Any

a

valuation
on

in

an

method to

efoKiith,

stability

of

ir,

m-

vestment values.

interest

pressure

on

to

a

secure

the

past

of

is

the

earnings

the

heavy

a

investment

a

re¬

of

officers

rate of return

equai to that guaranteed

t ,

on

^

policy

reserves

'

°

Competition and
In the

Free

its hist

by
jj
a

Enterprise

Life Insurance

The Ule insurance

Industry

over
has been eharacterized

high degree o£ competition
bas continually demonstrated
a

the private sector of the

economy

jn orcier to achieve

a higher interest return> un turn to achieve
^he lowest net cost position for
its

policies

market,

in

competition

rather

with

than,to seek

Si;,rA^^rL„bvye„Uo„

«* riskless safety and low

Federation

turn Ot investment 111 government
bonds.
Thus, wherever possible

of

Securities

Analysts Societies, Philadelphia, Pa., April 13, 1953.




of

re-

of

their

their

importance

whether.

of

which

detailed

the

of

their

cannot

■

jobs

be

sitting

others, jobs which in

Board

stitute

a

mil¬

$1

Broken

Bow,
or

$100 million

a

bank

here

Louisville.

•

L.

J.

in

in
In

either case, he

Robertson

evi¬

of

the

jobs

—

delegated'

is

bank

respon¬

widespread
realization

the

Nebraska,

a

sense

to

con¬

trusteeship

a

shareholders

not only for
for
the entire

but

community. With this realization,-,
our banking
system should be in
position to make

a

contribution

an even

the

to

greater

>

maintenance

of the high
degree of economic,
stability and progress which our
country has achieved. >/ / >'./
/" ;";V"
,

is going to
The program presented hereto-/
has
touched
furnish speculative or /
w
.
look for the day
upon
many
venture capital to new enterprise. traditional three C's: Capital, Ca-j aspects of the job of a bank direc¬
Given these background factors, pacity, and Character. One
bad tor—responsibility for. the selec- u.
it is only natural that life insur- i loan of $1,000 is just as serious to tion and supervision of personnel,
ance
investment
should be "di¬ that bank in Broken Bow as one for safeguarding the bank's assets, /,
for evaluating
rected primarily toward fixed in¬ of $100,000 to the larger bank.
operating perform¬

insurance industry cannot be ex¬

pected

to

.

investment,

come

of

longer-

a"

nature, with the backing of

lerm

equity risk cushion and dem¬

an

onstrated

earning power.

Consequently,
curity
the

far

as

markets

;

the

as

se¬

concerned,

are

primary influence of life in¬
investment

surance

1

Everyone would agree that the

techniques

administration

of

and

praisals

policy is felt the
ery

are

inspections

just

are

securing

and

ap¬

important in

as

of livestock

case

time approximately $42,000,000,000

identical. Thorough

are

regular

basic

the

and

machin¬

farm loan

and for relating general

ance,

eco¬

nomic developments to local busi¬

conditions. •;

might be quite dif¬

nevertheless,

principles

in

ness

the two banks

ferent;

in the bond market. At the present

/

;

.

Bank Face-Lifting

;

-//•

.

'.

••

I Against this background I would
like

to explore a slightly differ¬
path.
We hear a great deal
these days
about, three-dimen¬

ent

they ' sional films
designed to give mo¬
tion pictures new depths of per¬
or
somewhat less than 60%
of or inventories pledged to secure
ception and realism. Let. me try
total life insurance assets art* in¬ a manufacturer's loan. The impor¬
to
use
a.
somewhat comparable
vested in bonds, and in the past tance of adherence to amortization
vehicle to lift away the facade of
year,
net additions to the ac¬ or repayment schedules is surely/
present-day banking and perhaps
count amounted to about $2,250,- no less in one bank than it is in
enable
us
to
get
a
fresh and
another
000,000.
merely because one is clearer view of our subject.
:
This market is a highly compet¬ classified as a city bank and the
The easiest way I know to do
itive market, and the influence other as one of its country cousins.
this is to tell about an old friend
for

a

the

accounts

as

receivable

:

u

the

of

is
of

life

insurance

than

greater

no

companies
influence

the

Small Bank Director Must Follow

-V; y/-

of mine.

he

All Bank's Activities

Back in the

was

director

a

..

early 1920's

of

the

of

one

single factor on the supply
30,000 banks then in existence in
side of any supply-demand equa¬ v I am
willing to concede one dif-;; this country.:, About 30 years ago
tion. The industry has been ac-; ference between these two
types he dropped off into a deep sleep,
a

by

few

a

bond
stated

of

dominating, of. institutions—if

market—A'.
that

A.

have

we

,

Berle.
in

our

it. In

upon

insists

much

as:

small bank, the di¬

a

done:

He

rector must; have a

anyone

more

compre¬

hands the power to determine the

hensive knowledge of all the

long-term interest rate for capi¬

tivities-of his bank. The so-called

tal in the U.

"country banker" must know the

This

is

only

S.

• -

simply not

insurance

The

companies

portion of

a

;

•

so.

~.

The life

represent,
side of the

one

other

and

more

important

side of the market is the demand

side for-funds. The supply side of
this market plays a more passive

He is not in the

answers.

his

—as

hire

city

flock

a

nish him
a

bank

being

a

is

friend

of

position

may

be—to

specialists to fur¬

with the
a

ac¬

answers.

Still,

bank, and the job of

good bank director is not

altered by any artificial label like

Rip

Winkle^ had

Van

woke

„

for

up

short

a

while in the early 30's—just long

■

enough to hear the bankers being
roundly> damned—and went right
back into
.

He

hibernation.'//:/:

one

of less than. 15,000

country.

were

equally

/

He

neither

There

.

changes
him.

-

// /

to the other day—and

came

discovered/that his bank

not

was

now

was

serving the
many other

astounding
to
quite sure—and

I—which

were
good
or "city bank."
and which bad. But he was greatly
Today; top-notch directors are
impressed by these changes and
terest rates than the demand, be¬ .insisting on
being furnished with
that is the reason! want to repeat
cause the supply is much steadier
broad-scope reports from manage¬
to you now what he told
than the demand. Thus, money for ment
me./ •V
concerning every aspect of
You can imagine his surprise
investment flows rathe r con¬ the bank's operations—from lend¬

role

in

the

determination

oL in¬

stantly into the life insurance
companies and is invested just as

"country bank"

- am

,,v>

ing: and

investing

practices

to

the

policies .and

special

methods

when he
the

what a face-lifting
premises had had, both

saw

bank

inside and out. :.."Why,'\ he said,
as a matter of in-/ devised to deal with criticized as¬
"this
looks
positively. inviting./
policy, th>ey do not build sets. They are insisting upon the
What happened to that cold, stony,
up large cash balances. The de¬ establishment of adequate internal
mand for these funds in the form audit
controls, realizing that the atmosphere for which we were so

constantly, for
vestment

of

well

sues,

missed the wire tellers' cages. /He

mortgages, corporate bonds is¬ old idea that small banks cannot
etc., fluctuates widely from afford such measures has been ex¬
year to year in response to trends
ploded, ..that in fact they cannot
in capital formation. A decline in afford not to have them. They are
new

capital formation usually re-/ devising, methods, to check up on
a greater relative decline
performance, to see how Board

suits in

in

industry

disposition to accept the risks of

the

—-—

that

life industry and exerts

be

surplus '

that life

in

guaranteed, and
changed for any exist-

weighty- determinant

preferreds

upon

means

reserves

and

means

must be carried at market values.

with

ture

encouraging-, than
today by bank di¬

awareness

rectors

is

differ¬

management

of

consideration of life insurance in¬

Thus, by the very naits trusteeship, the life

the

more

dence

lion

of public

vestment.

Even

on

industry

strong

a

sense

given

a

no

he

with
responsi¬
bility and trusteeship. This has
meaht that safety has developed
over
the years as the primary
high

is

ap¬

has

succession program.

a

o r

which

sibilities

ence

the regulatory au-/
Gradually
there.,

evolved

a

bank

little

in¬

the

by

t

to

of the pitfalls ahead of the

aware

loan, it makes

of

and

the

guaranteed rates takes place only
?/er ai°nS Period of time. Thus,
f severe decline in interest
*at.e_s fr0.m *e ^fpl\esf10"' uatl1
seriously affected the life
msuraoce industry, for not only
th®"* pew investments made
? lower rates, but their existing
lnyestnients
taken away .by
lefunded at lower rates.
This

The wide fluctuation in the prices
of these latter securities, coupled

accumulation

abuses

/fiew business to business in force market,
namely the supply side.
is relatively small, any

1

assets

and

policy

dustry

thorities.

has

policies and since the relation of

carried at amortized values others
euch

on

the

cused

downward or
upward change affects only new

(3) They regulate the valuation
assets

fixed

ing policies.

propriately take.
of

life in-

a

change in

(2) They limit the accumulation
of

of

investment operation,

estate

late the extent of the investment

part

a

'

obligations, corporate
bonds, preferred stocks, common
stocks,
equipment
trusts,
real
housing.

liabilities

Guaranteed Fixed Interest Rate
Policy Reserves

Government

and

policy

fixed dollar amount;
inflation hedges are un-

In

U.

ability

a

necessary

New

economic

unfortunate,

ic allowable fields of investment,

are

the

to do
these things; it does not
necessarily have the legal ability
to do this, which in many ways is

represent

State laws delineate specif-

recov-

It is emphasized that the in-

ery.

situation

correct

full

given the

economic

these

of

result

a

management, steps were taken to

growth and stability of
industry. For the last 70 years,

the

pol¬

has

on

been

in¬

vestment

As

striking characteristic of the
insurance industry and one

jjfe

determine life

prove

Stability of

and

The Industry

backgroi'.n d

dishonesty and fraud

asked

failure lay in

in-

of

companies

surance

equities.

are

in every bank regardless

same

of

credit

in the investment side of business.

in

Urges country

credit expansion in recent
places heavier burden on bank directors.
warns

accepted

insurance

was

knowledge of all the bank's activities.

banks be made attractive, and

trustee¬

ago

another present day

the

company

hensive

mention. it.

even

years

new

bond

issues, for the/de¬ 'policy decisions are working out
industry
for
outside in actual
practice, to reveal ele¬
funds. to finance its capital re¬
ments of strength and weakness
quirements is largely a marginal
of which
demand. Internal funds, including
they should be cog¬
mand-

of

large relatively constant deprecia¬ nizant., They are paying particu¬
charges are the primary lar attention to personnel policies
source for corporate
capital1 out¬
with a view not only of providing
lays. For the period 1946-1952,
corporate bonds issues supplied good management but of assuring

tion

only

12%

of

the

demand for funds

from

internal

total
as

against 62%

funds.

Continued

corporate

on

When

page

the

28

continuation

a

of

it.

They

are

known?"

didn't

but he found

Bank

the'

lobby, .he

a

great

many every-

day

folks—^clerks, laborers,, fac¬
tory workers, farmers, and house¬
wives—and not

sheepish,,

one

of them looked

though it were
the proper place to be seen.
He

not

as

dumbfounded—but not

was

displeased

to find a bevy of
pretty girls behind the counters.
He

,—

reacted

might
where

"snorkel."
*

the

to

banking
their

leave

much-as

very

expect

drive-in
by Gov. Robertson before
Workshop
of
the
American Bankers Association, Louisville,
Ky., March 20, 1953.
Country

-

a-single Prince Albert,

see

*An address

the

In

.

service,
He

and

pen

could

mothers

children,

one

baby

to .the

complete

with

sarcastically

Continued

on

page

in-

27

>

/

Number 5214

Volume 177

...

The Commercial and Financial Chronicle

(1739)

to

-seas

Problems of International
Investment

the

tional

of

President ©f the New York Stock Exchange

or

the

investment and have the private investor step in, Mr. Funston
outlines

„

a

capital gains taxes and double taxation of dividends

well

kets

that

can

always

as

buyer

Working relations between stock exchanges, business
organizations and financial concerns in different countries.
Ttj-i-i

4.

n

*

i-

I d like to talk
'Inme

over

.aI+

lems concerning

onrmornmrf

the employment

capital in

national

', .1 n

national and

channels

h

s u c

•manner

Just

inter¬

employment

—

United States

dividual
fits,

laggard

'political
well

s

which you

G.

While

Funstoo

Keith

be

can

problems which

indigenous
-United

Canada

to

Tries have

investments,

global Ih

economic

in

ments

«

dvfeh

closer to

come

of

work-

a

investment

the

to

important

of freedom

an

fh6

and

will tb fight to preserve our free-

imagination

of

to Yisk

darmg

in

the

faith

of

peoples

own

future.

the

•feelifeve in their

hope

of

who

In

the

cannot

the

waite,

Chairman

Canadian'

utopms and that now
back

we can af-

,jtake its course. I do
flave established

nature

that

say

we

a^sound working

which

we

still

can

improved

now

let

and

but

be

which

commend

may

to

the rest of the world for its mfor-

as

I

might drive across the Inter-

nati0nal

Economic

,

,..

.

the

same

.

.

plement your achievements as an
agricultural nation, as a trading
and

t

as

producer

a

_

and

..

of

of

flow

tional.

of

your

it

efforts has

mildly

—

a

enterprise.

capital,

which it is based.

States

has

today

•surplus—we
it

took

solidity

investment

been

porter of capital for
years—but

rapid

The United

an

have

an

some
a

ex-

30-odd

century

of

growth to reach that position. I
was

really

■frankness,
While

to

astonished,
in
all
learn that Canada,

consuming

'Of money

huge

also

been

in

several

—.

Canada, Toronto,

sixty

years

1

..

.

The in-

the-same Treason.
in

the

for ex-"

United

States ,'or

as

a

dange.;

mfchanism^
insnectinn'and nprhans"'reoair Fcr
^P6011011 ana pernaps repair.
is the stock exchange whiet.i
It
Drovides the machinery to spread
uh

ownership

e

throughout
.

,

.,

.

of

industry

lands

our

' VYnrt0V+wv

.

Ana it is on our exenanges tn&c
Continued on page 3G

our

national market places. He knows

everywhere

'

i;

818,657 Shares

Aluminium Limited
(Incorporated under the Laws of Canada)

Capital Stock
Without Nominal

or

Par Value

JssUe

The shares

to

be offered represent neW financing

by the Company and Avill be -offered to

ptfestnt shareholders on the basis of one pew share for each ten shares held-of record'On April 24, 1953.
\ Rights to subscribe Will expire at 3 p. m., E.D;S.T. on May 15, 1953, TheiFirst Boston Corporation and
White, Weld & Co. have agreed with the Company to act as Dealer Managers to form and manage a group
of securities dealers for the purpose bf soliciting subscriptions in the
Limited has a similar agreement to act as Dealer Manager in Canada.

;

United'States. A. E. Ames & Co.
;

.

■;

,

Subscription Price The Rights may be exercised, at'each subscriber's option, either in Canadian
»dollars at a price of $33.'50 per share or in United States'dollars at a price of 534.00 per share. The United
States dollar price represents the approximate equivalent of the Cahadian dollar price on April 16,1953.

The First Boston

White, Weld &Co.

Corporation

copy

of the prospectus relating to

Name....

Aluminium Limited's

offering of additional shares

Address,

Please send

of capital

me a

stock without nominal

or par

value.

As

have

I

already

tacular

growth

^e

This announcement is neither an offer to
The offering

sell

nor a

solicitation of offers to buy any of these securities.

is made only by the

Prospectus.

capita Canadian invest-

per
ment
in

than

iarger

been

States

United

for

larger
a v a

Canada

i 1

a

some

b 1

e

April 22, 1953

is

United

capita

per

investment in

states
has

the

intense—but

is

'

'

186,753 Shares

and

figures

Aluminium Limited

that,

(Incorporated under the Laws of

•

,

„

MI

Canada)

Canadian investment of $39.

a

.

.

our

as

Capital Stock

...

Surely here is a magnificent
example °f international trust,
respecf and confidence. I hope
thal relationship flourishes V\for as
1

•

time,

v\'4-Vi« AM

two countries have a

border.

Without Nominal

These shares
Limited

to

are

anybody consider this un¬

flow of capital an en¬
on
the
sovereign

impeded

Par Value

issue of 818,657 shares to be offered by Aluminium
with 62,250 shares to be offered in Canada by
Limited, are to be acquired through exercise of rights to be

part

of a

new

its shareholders and,

A. E. Ames & Co.

Does

or

purchased from certain

_•

shareholders, all as set forth in the Prospectus.

croachment

*

rights

the

of

Canada?

I

United

think

not.

States

or

Price for the shares

offered in the United States

Rather, it

is an economic pattern which I
suspect some day will prevail
among all civilized countries, once

they learn that political freedom
and economic freedom walk hand
in hand. It is a pattern symbolized
py the International Bridge con-

.

$41.75 Per Share

Copies of the Prospectus may be 'obtained from the undersigned
only in States in which they are qualified to act as a 'dealer in
Securities and in which the Prospectus may legally be distributed.

amounts

in the postwar growth

period, has

hessmen

need

I

gtates investors in Canada's spec-

sensa¬

And not the least extraor¬

dinary phase of your
growth is the financial
on

unhealthy market for seen-

is not all from South

say,

common

'

Hr"_ The success
been — to put

An

own

buy

can

Canadian

a

North.

long

materials.

raw

was

April 21, 1953

on average, each
Canadian citizen had a per capita

accomplish: you are building a
great manufacturing plant to com-

nation,

and

pointed out, the interest of United

had

processor

Exchange

NEW ISSUE

Canada seems to be telescoping United States investment of $84
1!! ? fu United States decades to whiie every United States citizen
n.Uj
^earf w^at it
took the

»

sit>le.

Identifying Statement is not an offer to sell these securities. They are subject tb the registration and prospectus re¬
quirements of the Federal Securities Act. Information about the issuer, the securities, and the circumstances of the offer¬
ing is contained in the prospectus which must be given to the buyer and may be obtainedfrom the undersigned only in
States in which they are qualified to act as a dealer ih securiti'es-and in which the prospectus may legally be distributed.

.

'

Stock

ly because of the existence of

Cana-

wants to

that he

ease

of

showed

Progress
,

the

And

who

^ share in a United States company can invest his money with

ja^es^

'

^

Bridge.

investor

filiation and benefit.
Canada's

equity financing is all but impos-

This

companies

such

many

international bridges

—bridges to accommodate the free
flow

of

private

capital

—

will

& i&STchS i 5^ fcr°? C a n a d a and^ the
Can., April
16, 1953.




United

States

across

the

sdven

The First Boston

I

new products, new industries. An,t
,without a healthy securities market the raising of new funds by

savings to work in industry main-

London

the

x.c.

pu pe l

y0U to invest in Canada, to share
m youl future, just about as easily

This

even

bf

will

numne

constantly

Canada is willing today to put his

Stock Exchange, who visited th£

*

hardly

greatly

..

ronstantlv

aro

monpv

sums

of

hundred

vestor

function.

neverthe-

total

a

our

relationship

. j

In the words of John B. Braith-

$284 million in dividends;

owners

jn

countries already have estabpolitical
and ■ economic

lished

,Tord to sit

j

>•

econ-

country were $91/&

your

1951

share

I don t mean to miply that

_

•

One ot the

great

vfektors'supplied $7% billion,

peoples

i'^fho have havb the courage and
igaift,

n

.

mark

as

economv

own

mere /dbllars-and-cehts
significance. We are allowed by

3
ot^er factors which
more

16ve

.r

fcapitalistic actly

of the

unless

Washington's

counterpart—exists

ronto

billion; of this United States in-

?vm?
fn en^owe^ than
natural resources,

J

.

an

large and increasing. At the
end of 1951 total foreign invest-

-

.

tWith T)Ountiful

'intense

r

_

United

of

past 10 years those divi*
problem than1 any other hationfc dend payments have added Up
tdrtainly than any other team to almost $2 billion.
Each country has been
These figures havfe much mor6

fare

-i.

caVitalistk

stagnate

£Tu

a 'later our Exchange—like :its To-

are

importance
A

pfaces-,A capitalistic economy wl

was

iess js

the

„

nation

per¬

your

the

political sanity of the

solution

^blO

.

omy

It seems to-me that our coun- paia out to United 'States share

;;

I

_

Pan

They

one

upon

system without which that

you

the

in

amount

relation

in

to

successful

•solutionj hinges

jwhoie world.

brokers.

in Canada

small

^Lces

developed to meet this need.

not

are

imposed

wealth.

new

the

not

their

upon

4iealth and

exchanges
devices

York

have, rein vested for the

are

or

States. They ate

and

-scope

but

years
us

is

-

are

economic

States capital employed

eparated.

These

States

United

recent

creation of

.-homic—if, in¬
deed, the three
.areas

in

a

centage of your national product

as
eco-

as

The

outdistanced

have

fi¬

been

has

has not been exactly an

of course,

find

means

New

the
seller.

i

'

,

.

substantial

a

by capital created by your

efforts.

direct

the

quickly exchanging those securities for cash. The

some

buyer,

a

«

in Canada, most

expansion

your

•own

t

bene¬

social and

•;are

•

of

nanced

con¬

Such

ieged to put to work
amount of money

in¬

cerned.

investors, individual
corporate, 'have been privi-

and
■

and

each

While

growth.

postwar

your

greatest bene„fit for each
Tor

l

inte§ral

..

.

is the

me

which foreign capital has made to

]s e c ure.th e

.^country

of

relatively small contribution
latively

a
to

as

.

astonishing to

as

York
to

but, at the same time, they wanted

mar¬

securities

of

at a

after V.

wdsmngions through the system— money fo *
consolidate the growth) for the development c.i

Jc

an economy at the whim of

group
si_i.v

.

tal.
.

of

find

Securities

recent years an exporter of capi-

seller

always

can

mechanical

-

.

prob-

some

the

shares

minutes

has bought them.
.

,

of closer

■>m

infant

an

first acts of George

i™

international double taxation; and (3) establishment

as

^

New
back

go

struggling to its feet.

TnWn

T n^nn

y

+

Montreal,

-licly measured. It is in such

tory taxes and restrictions on,profit remittances; (2) removal
of

py
ex-

stock

the

Exchange
when
V+

^yc

of

roots

stock

the

sell his

five

The value of stock exchanges .vi

,

import quotas along with multiple exchange rates, discrimina¬

;

The

core

is

can

price

not limited to their immediate an-1

*vmfnh?^rtgovernment was to
tLX* worth S
of national -debt, : which
amounted
SS. Sf M&f &^
* 8ta8genng- $80 million.
^
tf
Peopte were * TPt to buy the
willing
.property i4 constantly and pub- bonds of the new government—

three

pronged program 'for encouragement of international flow of private capital: (1) removal of export and
as

On
Un

Toronto,

in

Npw Vnrk

the

process

markpf
market.

changes

na-

»,

international,

investment

sppnritips
securities

Maintaining it is high time that government back out'of foreign

¥,..

the wheels of industry and
J

finance revolve."

investment is

that he
fair

the ball-bearings upon

are

which

Investment Process

Whether

By G. KEITH FUNSTON*

•

Toronto Stock Exchange last Fall,
"The
Stock
Exchanges
of the

Market—Core of

,

*

South

world
Securities

1

Africa,

Europe,

America, the Near and Far Easts.

11

Corporation

White, Weld &Co.

12

(1740)

The Commercial and Financial Chronicle...

-

problem by stating initially that
the
1954
budget is really "two
budgets, an administrative budget
and a cash budget.
The former
indicates a deficit of $9.9 billion,

What Can We Do About Taxes
By JOHN J. MANN*

-

Chairman, Board of Governors

the burden of taxation and its ill
effects on equity investment, points out where government
expenditures can be reduced Stresses importance of equity
Mr. Mann, commenting

•

investment and lists

tion

on

means

as

offset to
Taxation has been
in

bad word,

a

every

that,

before

But,

we

who

live

in

this

present

en-

lightened gen-

eration, might
w e 11
laugh
with

scorn

at

preceded
know-

earth,
John
...

J.
■

this

from

taxes
sible,
fond

factory formula for making
expenditures

that with all

Tf fU" wailwe,"
dolorous

ceipts during 1954,

gov-

equal

re-

in the

or

their

ing about the tax burdens levied
upon them, they
never had it so
good."
Unlike ourselves, they

STbIy foreseeable futureAs you know, President
hower

stated vin

March

that

cut until

Eisen-

the, middle
should

taxes

and

purpose

destroy." Though they complained

"We claim that unless

about the payment of

Holds

have

we

a

1

two-fold

f
,

human rights.

the

t

of
be

not

has
com-

for

a

capital

fred

of

Tennyson putting the finish-

ing touches
of

reason-

on

"Locksley

characterized by
The

dustry
though

overnight
rather

are

advances

changes

remote.
and

an

Al-

improve-

many

bodied

in
in-

an

ments constantly are
taking place,
their cumulative effects are usu-

ally

em-

heavy

chances

the technical phase of such

work,
Clifford F. Hood

is

investment.

radical,

Hal 1." This

as an

bis share of the present staggering load with all others, but also

present-day undertakings,
industry has evolved its
technology gradually over the

centuries and

Lord

many

The steel

nel—found Al-

able and prompt soluticm to this
paramount difficulty—not merely
individual taxpayer bearing

as

massive plant facilities and

his manuscript
hone

glamorous

as

our

English Chan-

future.

earnestly

own,

is not at all
of

,

parable to the

in the right direction,
hope that some such formula will be found feasible in the
j

and

space

us

near

time

made

approach

Let

viewpoint

of

spread

over

a

period

years; thus they
apt to catch the public

Of

less

are

fancy than'
astounding -changes in other industries proprophecy in the light of time. AH: ducing direct consumer
W
*

•>

attention

T

rea-

balanced budget is "in

a

Materials," and calls

.

perspicacious gentleman or
thereof, can divine a satis-

.

challenge
(1) how to use atomic development for conrstructive purposes; and
(2) how to keep this greatest of devel¬
opments from engulfiing our freedoms. Stresses
importance of

might come in the very near fu- ing military costs,
ture, it is apparent that we would
Whether such a program is feasbe naive in the extreme to expect ible, I cannot say, but certainly
significant, if any, tax reductions it is worthy of serious considera¬
during the current year, unless tion by the Congress as a studied

ernment

,

35% of national /

$0.3 billion from the estimated
ln J[he yea5
Leonard Case, allow you to have luncheon in
$45.5 billion ticketed for military Jr., the founder of Case Tech, was London and indigestion in Npw
expenditures. And they note that graduated from Yale. That same York.
,:
in this last element, Defense Sec- year, across the Atlantic—which
Of course
steel-making
science
from it has a
retary Wilson has spoken of $4.5
r™™ u
L—?*'_
romanticism of its

hope

all

we

..

in the atomic age:

can be balanced by cutting only

Mann

U

this

..

Corporation

resulting from competitive rather

than cartelized markets.

for relief
individual
and
corporate
in as short a period as pos- billion,
and Senator Taft has
and while many of us had talked of $4 billion, as possible
hopes that some such relief figures to be arrived at in reduc-

While

group

on

—

toms and other sources.

some

us

for

years,

Says this is an "Age of
decentralization of industry

to

.

as
in
reducing civil
programs
by about $2.2 billion,
they conclude that the cash budget

34% from corporations, 14% from
excise taxes, and 5% from cus-

and

who

billion

$5.1

Steel

veals iron and steel
production account for

income.

Taking $2.6 billion from
foreign aid, by leaving the same
amount

--

of

States

Picturing the "purple twilight" era as it affects the steel in¬
dustry, Mr; Hood foresees no immediate changes in steel
production technique which
may result from use of atomic
power.
Stresses importance of steel
industry in the economy, and re-

emerges..

The $68.7 billion in potential re¬
ceipts will be obtained as follows:
47% from taxes on individuals,

te gripings of
the ancients

others

deficit

prior

.

nation subject to
the burden, from the time of the
ancient Egyptians,
and
very
likely
of

zens

too

capital gains.

and mouths of citi-

the minds

previously

low,, they say, that, as¬
the revenue estimate is
low* by $1.5 billion, a new

cash

period of its application; (4) abolition of
dividends, and (5) increase of the capital loss

on

By CLIFFORD F. HOOD*

President, United

suming

and shortening

tax

double tax

have

too

enues

of making equity investments

-(1) reduction of individual taxes; (2) aboli¬
of the Excess Profits Tax; (3) reduction of capital gains
attractive:

more

I

Reaching the Purple Twilight

ad¬
verted and the second, or cash
budget, a. deficit of $6.6 billion.
In the light of the customary ap¬
proach by budgeteers, to estimate
expenditures too high and rev¬

American Stock Exchange

[

which

to

Thursday, April 23, 1953

m

—i-

a

a

.

^

_

the

could

tithes, they
realize their

wholly
good fortune,

never

existing

know

or

balance

we

in individual
taxes
and
relief see" and that he had seen f the 10-year period
many
important
budget, there will never be from
several
inequitable
tax heavens fill with commerce,.
advances will, occur in the techany lowering of taxes, because we
measures presently imposed would
and
pilots' of
the
p u r p I e -noiogy of. the
steel-.industry,- but
thoroughly believe that an un- be
highjy beneficial to American twilight/I'
•
few will ever make the headlines.
;

v

'

r

look
pay the rest.
Of course,, we

taxes

are

•

all

continues to

money

that

know

And

necessary.

tolhZ!teaVbly

-

long

so

idea

is that

with

up

will

we

the

cheapen,

our

catch

never

indebtedness,

never

he

f.

thJvta
*b®

/.•

..

let

.

revision

a'

on

tax laws., One of its
tasks should be to study the,ad-

for complaint. We fully appreciate that we all must bear, in

does

proportion to

°

lower revenues."

can

cause

fair share

a

ernment,

of

ability to

our

of

the

costs

of

preserving

pay,

gov¬

our

na¬

tional security, of the interest on
the public debt, and other

legiti¬

mate. costs

powerful
on

What

the

steward

should

part

of

be,

budge^ its costs that

the

of

only for essentials,
costs thereby
incurred

the

be enuitablv assessed

that

the good
that it so

our money

expended

that

unon

and

us

just debts accruing there-

our

from be collected without fear

favor.

What

expend

we ask

tax

our

of

or

those who

monies

is

their

i—

a"?..tha£ £bey .,aPPr?ach
budgets not from
the view¬

point of how much they
but how much

they

can

can

spend,

save.

of

us

fully

that it is much

course,

say "cut the

„

on

easier

k.nd

This

so

??'

is

to

0n*110n,r

true

the present period of international
tension.
As you know, proposed

government income and expendi¬
tures for the year 1954 amount to

$68.7 billion

on

$78.6 billion

on

looming deficit
Of

the

tures,

$78.6

the

the

one

hand and

the other, with
of $9.9 billion.

billion

military

a

expendi-

will

absorb

59%, international endeavors 10%,
on the national debt
8.7%,
veterans 6%, and other costs 17%.

interest

*An address by Mr. Mann at the Fifth
Annual
Management Conference df the

Schcn} of

.

Business

tration, Cornell
1,

and

Public

Admin-'*-

University, Ithaca. N.

April 17, 1953.




corporations

potential dangers to
terpnse economy

free

our

(en-

thereby result-

ing.

.

.

expenditures.

How

this be done and retain
and

safety?

There is

0j costs which
as

a

is

can

efficiency
hard

a

core

irreducible

now

practical matter—interest

government

debt

and

veterans'

arkincTont
s„

ware

^ars<

affte

far

on

.As you

know, equity capital is
basic prop of our free enterprise economy.
And those who,
in

the

past and

been

willing

lated

risk

at

to

present, have

take

involved

nf

tv,p

"CIC

hv
UJ

that

llin{r
puiimg

tiah+lxr

mnrp

a

hnrlcret

ine

ana

thp

mfv

+hnt

couincrc

onmp

hp

thp

chpii«

Hp
_

pux&e

malrinor

dollar's worth

rnst

cavp

pi

is

nc

maHp

_tH
biiixigb
nprtQin

received

for each dollar
spent, it is doubt¬
ful that a sufficient sum can be
saved to give real
hope to those

look for consequent tax re¬
lief in the immediate future. The
same
is generally true so far as
our

foreign aid program is concerned and for costs of other do¬

mestic

poses', become part of

Anr

our

wa,y of life so far as the
of
the voting populace

existing
majority
is

con-

......

cerned.
We must understand that
the Congress and the Administra¬
tion
in

reducing

expenditures

will be political as well
tical. And, as we

as

prac¬

know, the

po-

litical decision will not
always be
the'one'which the application of
hard-headed
business
principles
WOuld indicate.
In

a

recent

-publication of the
"Legislation Daily," On March 31,

supplying
capital to corporate enterprises have been responsible in
mdustry and for

our

_

,._S

knot.

es^took ltS_OWB1CU
They

approach

at

^

our

present

of living.

do

takes

on

S

ud

us

reach
cent

iS

that

purple twilight in reyears—and a few are suc-

purple

who knows —the

twilight may be merely
sign on the way to

rendezvous with

The

industry
them

undoubtedly

in

steel

destiny.

industry - is

the

Atomic

steel

heat

sharply steel

industry,

opment
little

to

another.
than

more

' "if"
scientists—perhaps
are.

here

10

It .has .been

since

-years

in

new

mines and oil

Such

equity

awe-

tem

and is

economic sys¬

our

critically needed,

ticularly at

the

insure that

present

par¬

time

to

our

corporations Will
not become too dependent on debt.

of the atom beneath

two-day

convocation

just

a

voorc

"rr*

far-reaching

implications

of atomic energy.

ments

will
W"1

A

recent

Nationar°Tndus
ustfial
Board

shows

,

that the investment Per member
in
all
manufacturing establishments

has

about

last six years.
invested
for
worker

was

doubled

In 1945, the capital
each

production

about $5,700.

this figure increased to
..

In 1951,

apprOxi-

...

ma^elyrh n^tri pf
of

the

in

.

,

the

plarus and equipment
averaged over $30,000 per worker,
new

continue

-

it

has been

discouraging

day .when

at

a

—

newer

accel—

an

long—sometimes
sometimes excifc-

as

a

the

and

Lycurgus,
UU16UD,

steel

from

sternest

T.vpnrmie

Spartans,
Within

The Transistor
.

Mysteries

eartHy .an
unfolding m b
sequence. A tmy,

—are

called
new

a

^

g

bug-like^^object

transistor dias^

vistas

of

the
all

nefnklinVinJ
csiduiisucu

established

_medium_ of exchange.

the

past

hundred

years,

engineer.. And

opend^up festatik)ns-totI^;^teed..fcfnhS^
be

we-may.-.soon

wearing

wrist-watch radios, just
DJcic Tracy. I am told .that a
ieievision camera, small - enough

iike

^ inside

permit

me

Pittsburgh,

a

briefcase, may

soon

to sit in my office
or

in New-York

watch

in

and

an
Open
Hearth being
tapped at one of our, plants at
Gary or
Lorain.
If
Alexander
•

Graham
vjrrauam

Bell's
ecus

telephone
icic^uuuc

;

helped
ucipcu

to sPeed the course-of .business,

lef ,us consider for
what

may

been a steadily
growing conviction that we have
been moving toward a
so-called
"steel standard," not as a medium
Qf excjiangej birt in
terms of na-.
t-onal wealth In all of its mani-

for .the:celectronics

•

Conference

experimental

however, there has

,

'are

its

Stands of Stagg Field ing — road the iron
in Chicago. And here we are ;in industry has travelled

fields.

investments

the
ex-

a few of whom erated pace and will undoubtedly
evening—first un- be extended into new fields.

this

the West
this

a

is

inspection devices. These
develop—

iron

the lifeblood of

of

some

of 0»e

new

inventions, the expansion of exist¬
ing plants and equipment, and the
discovery
and
development
of

is

now,

programs and in some of its

Snarfan«

bustoess. the development of

even

springs from

startling devel-

a

of

ploring and using atomic by-prod-

four
ACW
few years lafpr pnneiHprin^ some
jume later,
considering snmp

UMICW
of new

few

some

industry's metallurgical

ucts

leashed and controlled ..the

noui

growth

for

in¬

as

possibility.
Obviously, this
something for the future. But

contribute
WIlluuulc to

6»«v»m

energy

aware of the purple twilight era
into which man is pushing as he
one

use-

other

operations is conceivable—even

some energy

the
tllc

steel

will

with

common

of

source
—

another road
our

sometjme in the future

dustries.

ceeding.

specific

we see no

dS?1?F™fnte. °f
*®*
otZl da^-

find the'
twilight of the

purple

now,

^weeping.changes.in our industry
as a result ofthe splitting-of the
atom" But who knows today what

we

stratosphere. Every major power
ln

As of

six

or

nlanes

Let

Atomic Energy and Steel
.Industry
'
~

Continued equity investment on
large scale is essential not only
to maintain our present powerful
productive position, but also to
a

The Chamber of Commerce of the

fTnIf<Tj qtot♦nnt"mit
the

calcu-

such

frontedS witlm'the'dUemma^of pre-eminent standard
striking from

the

in

Z'ct ?raKS nave "T1 !^punMU^
de
ge <T>e;>s"re £?r 'he growth 0

national

~° Iar as lye national ae-

eternal

Tomorrow

Importance of Equity Investment

-

governmental operations,
which have, for all
during nv0AC* Konnmn nori practical purnviciina

particularly

tfnxrirlfrvip^t level
government liirfi

the

of

budget" than to take

™

do

appreciate,

hv

.Inil w an/ £
and ;the

Anciencan

f

who

Difficulty of Cutting Budget
All

nflnf,Uv JinTfJ

re-

never

Reduce Expenditures

that

they act more like the fiduciaries
41
4u—
they should be, than as spend„i

must

Unee

farth^and

imu

sky, .it

five

our

.principal *

.

reduce
demand

that .it act

is

not

may

you

,

Administration, in return, is
it

you

but

We have the Gordian knot
ap¬
parently, so now all we need is a
Hercules to cut it.

in the most
productive nation

can

we

mean

taxes

of living

and

earth.

new

not

form

sav

•

^av"~and^Twrrthina

existing 1 lavender

the

TndTn": aZved^Sitylltofwe
fOTmlyconectedweha'veiw ^ust beginto iowerre^enues Which
imposed

ud

187-

working

now

eo

us

the

purplish at all;; But

seem

,

long overdue.

_

to

into

a

^antiai.*bortitm;

sub-

'nation's

<

weaith. The Tron and steel
and al—
]jed industries;

-those
businesses which are
greatly de—
pendent upon iron and steel
pro¬

duction,

account for almost 35% ot
the national income.

Our industry is not
unaware ot
the responsibilities
that this places
upon

us and I believe
that I ca^
Speak for the
industry in saying
**
*
that our expansion

programs com-

pieted

and

^moment -eliminate

be .accomplished w-sh adequate

in

any

progress
concern

supply of

our

.

should

rbout

an

products:

;a;

estim ated that
pee^

OP

S' "*"•

^

Continued

on

vagi

2$

!.

'

*

h
«

Number 5214 ...The Commercial and Financial Chronicle

Volume 177

Eisenhower

nomic system of its own choosing
is inalienable.

Urges Russia Prove

Fourth:
to

zeal for peace stays

,have

aggressive

no

but will continue to

purpose,

and the first great step in that direction is an
in Korea.

Holds

Sets forth

tions.
In

address

an

to

toward

progress

a

disarmament

American

the

it is

oppose aggres~

with

honorable truce

President

16,

the

.

United

sternly disciplined by experi-

in

States

bid

a

In

the

peace • in

step,

that

an

honorable
truce

in

Ko¬

Tie stated

rea.

dem¬

a

Soviet

the

use

its decisive influence
.

,

In this

all

spring of 1953, the free
weighs one question above

others:

the

chance

for

all peoples.
u
weigh this chance

just

a

peace for
t

To

instantly

n

recent
It

to
of

moment

came

-

EuropeJ They

these

cen¬

in

"r,

and

toil."

fruits
^

t

The

of

their

-

We

government held a
dif£erent visl0n of the fu-

vastl

ture.

moment,

is

to

^

*

.

,

trust

.4

,

our

'

;

•

,

mutual

and

aid—

be. sought

Security
oeuuniy

in

and

threats

result

has

been

tragic for
the Soviet

the world and, for
Union, it has also been ironic.

val-

The

chose one road,
The leaders of the Soviet Union
chose another.,

amassing of

Soviet

alerted free nations to

of

The way

aggression.

a

It

power

new

dan-

free

of

people

No

earth

on

held—as a people—to
enemy,
for all humanity

brave

but

'
,

It

instilled

let

in

the

free

the

a

times

in

natilswhenthe

of

moment

Soviet leadership
a

...

nations

.

.

l^se and, wilt beyond the
of propaganda or

pressure

break,

now

or

ever.

remained, however, one
thing essentially unchanged and

"

_

.

,

The

world

mav

[ ; '

;

unchanged

Thirty Year 5'/,% External Loan Gold Bonds, Due August 1, 1955 '
Thirty-Four Year 4%% External Loan Gold Bonds, Due April 15, 1962

City of Copenhagen,-

;

the

p'ctiuua

that

an

of

Sea

reach

the

to

Sea

dominate

to

the

saw

to

'v.-

We

era

Josef

Soviet

from

of

the

Japan,
million

800

SOuls.

Soviet

Stalin

his

and

of

born

system

one

with

has

It

by
was

It

War.

stubborn

amazing courage
War.

shaped

predecessors

World

sur¬

often

and

Second World

a

lived

to

not

do

their
,

>

And

they

threaten

some evidence that
recognize this critical

moment

We welcome every honest act of
We
care
nothing for mere
rhetoric.
We care only for sincerity of
peaceful purpose — attested by
deeds.

The opportunities for such

deeds

are

of

ance

a

but

no

upon

the

upon

them.

Even

a

Soviet Union

(Kongeriget Danmarks Hypotekbank)

the Soviet
an Aus¬
trian
treaty, or ' its release
of
thousands of prisoners still held
specific

acts—such
signature

December

Raiser

to

never

gressive

has

their

firm

x

any

Soviet

1, 1972

February 17, 1953, the undersigned gave notice of the setting aside
of about $9,600,000 to be applied, for the calendar
year 1953, to the retirement and
cancellation of bonds of certain Loans, as Set forth in the notice of that date.

And

so

fostered
This
'

Consolidated'

Munidpalities

of

Denmark

it has

We

come

been

What

can

to pass

thdt

the

way

years

of

life

the

i

on

acquisitions will

occur

the future.

The worst is atomic

of

the

upon

perpetual

burden
OF

KINGDOM




depend

<

MINISTRY

Copenhagen, April 23, 1953.

must

c

FINANCE

OF

OF

DENMARK

Member

THE

simply

war.

of.

A life

fear and tension; a
arms
draining
the

wealth and the labor of all peo¬

ples;

*

.

a

wasting of strength

that

"

defies
Soviet

^he American system or the
system

70

National

WALL

STREET

Association of Securities Dealers,
•

N.

Y.

5,

N. Y.

•

WH.

Inc.

4-0175

this dread road?

The best would be this:

in

SECURITIES CORPORATION

"

any

..

resources

Speculation

L

McGRATH

world—or

.

further similar

a

COMMON STOCK—OFFERING PRICE $1.00 PER SHARE
Write or phone for offering circular

1

best to be expected can be
stated.

$3,400,000, will be applied to the' acquisition of bonds of the
other four issues mentioned above, -apportioned with regard td the amounts outstanding,
by purchase at prices not in excess of the principal amount thereof and accrued interest,,
-or by redemption (not later than in
1954),
;• t; '
'
'
;

dollar

as

of fear and

The worst to be feared and the

The balance, about

any

Offer

MICRO-MOISTURE CONTROLS, Inc.

fears it has

nation in it—hope for if no turn-'

ing is found

not

"WEATHER-GUARD"

NEW

299,000 Shares

in the rest of the world.

has

forged by eight
force.- I '

'

made to the separate notice.

or

AMAZING

Automatically Raisfts Windows and Tops at tho First Drop of Rain

,,

of Denmark's

*oins

.

.

the

wfesi
ie/7.
h(

Ver

device

>

and suffered the very

City of Copenhagen will shortly publish separate notice that there has been
drawn ,by lot for payment $1,200,000 principal amount of City of Copenhagen TwentyFive Year 4J4% Gold Bonds, Due
May 1, 1953. .For further information, reference is
made to the separate notice.
"
*
of

y

.

d«yV

THE

leaders,

the Soviet Union itself has shared

The

Association

»Pre

ag¬

otherwise."

■■.
Notice is hereby given that Denmartc, in addition, has set aside a sum of about
$4,800,000 to be applied for the calendar year 1953 to the retirement and cancellation
of bonds df the above-described Loans, in the amounts and in the manner referred to
below, accrqed interest being supplied from other funds:

Loan

39

1°Ws • Ra'se

nu

<5S-gS?s.,

however, have
seemed to persuade themselves or
tried to persuade their people—

Under date of

the

Market

rr

page

Stluts

ertW*

whatsoever.

purpose

iTon. 1
I

Top

on

as¬

had

as

upon

.

Forty-Five Year 5% Sinking Fund External Gold Bonds'Series DC, of 1927
Due

that

sociation

Mortgage Bank of the Kingdom of Denmark

complex protocol
simple will to do

Union's

icZwiajeet

PtoducU
Con*orti'''

perform¬

few such clear and

No

that purpose. •
•
The free nations, most solemnly
and repeatedly, have assured the

Thirty-Year; 5 % % External. Sinking Fund Gold Bonds, Due November 1, 1955
Twenty-Five Year 5% External Gold.Bonds, Due February 1, 1953

■

free world still holds

The

many.

great number of them

a

Continued

Hew

wel¬

know. Recent
of Soviet

give

may
—

third.

quest of just peace.

common

the

yet

•

statements and gestures

waits

The

■,

readi¬

to

leadership

precious uppvsii,uiui..y
opportunity

a

peace.

death

hjs rule
cxnand

finally

sincerely any genuine evi-r
of peaceful purpose ena¬
bling all peoples again to resume

Danish Consolidated. Municipal Loan

' "r

the

was

nations

*

Will it do this?

other

no

The extraordinary 30-year

0f

span

dence

'

'

free

•

a point of peril reached,
help turn the tide of his¬

leaders

come

...

Twenty-Five Year 4% % Gold Bonds, Due May, I, 1953

thing

the

of

S^e"

new

iws
has

tory.

answer

live?

knows

with

vived

power

Is there

sane men:

the world

Wav

Baltic

as

c

to awaken, with the rest of the

the question that stirs the hearts

that,

.

...

.

.

the

So

to

their intentions with sim-

pmnirp

conviction

nnrnnci^l^H0 ^?1]"

right to

nation's

Every

ness

Whether

and interests.

*

unaffected by Soviet conduct: This

.extent

world that do-

rights

«

«uw
n°w

that calls upon

governments of the world

speak

this—the

doubt

none

No

form of 6
government and an eco■!

a

a

Stalin

shares

unshakable

Kingdom of Denmark-

Similarly,

are

com-

New °Tealthip S°

and to

ended

fellowship and justice.

Notice to the Holders- of :

•

free

world, to

gressor.

an

—and

Third:

those

choices must be made
a turning toward
just and lasting peace.

capable of inflicting instant and
terrible punishment upon any ag-

the common hunger for peace and
Second:

v;

if there is to be

to of all

now

can

be

be

men

of

one

it calls upon them to

ger

United

There

"

,

whole

It is

of its

spect

plicity and with honesty.

the

just

a

is

compelled

hv

rts conduct m world affairs.
First:

mis
'mis

tnem }n seif-aeiense to spenu uuchnsen by the United precedented money and energy for
chosen

wav

/

too, was

hope

*

equal

mands and expects the fullest re¬

and point the hope
^ ^
^

it is

States.^as plainly marked bja GeVelop weaponsforced war
armaments. It
them
of

stubborn and

..

and

new

confronts.

gravest

.

The

to

.

free

Southeast Asia

the

to

the

which

thePperil

denying " to aU 'he affairs

nthpr<?

,

\

a

munity to be met by united action.
This is the kind of free world

These plain and cruel truths de-

to
iu

was

nation's security tong as there persists a threat to
and well-being can be lastingly freedom, they must, at any cost,
dim and
almost
die.
And
the achieved in isolation, but only in remain armed, strong and ready
jshadow of fear again has darkly effective cooperation with fellow- f°r any risk of war.
It inspired them—and let none
nations.
lengthened across the world.
I
remains

be

to

-

armies, sub- fine

ity—at all cost.
—di an cusi.

,

«ed friends, the other free nations,

sum-

peace.

the

European Defense Cum¬

a

*

.

oeoDles

The United States and

The eight years that have passed
have seen that hope waver, grow

Today

than 8,000 people.

the world has been taking.
This is not a way of life at all,
in
any
true
sense.
Under
tht

Soviet

of

partner in this community; and
that this, for Germany, is the only
safe way to full, final unity,
It
knows
that
aggression
in
Korea

-

homes that could have

more

are

defense

the

It knows that Western Germany

single destroyer

a

sacrifice

and

that

munity.

This—I repeat—is the best way
of life to be found on the road

-

vigilance

bracing

fighter

single

a

.

for

pay
new

housed

own

-

bricx

modern

half-million bushels

a

of

knows—out

tUurope imperatively demands the unity of purpose and
action made possible by the North
Atlantic Treaty Organization, em-

miles of concrete

for

pay

with

an

mind another
great decision, lew clear precepts wnica govern

of

lasting

the

enjoying

low two distinct roads/

tHp

victory and of freeThe hope of all just men

that

We

plane with
of wheat..

world

knows

deserves
50

stay

Western

heavy

fine, fully equipped

some

to

price of liberty.

It

pavement.

devote

feeding and housing the needy, of
perfecting a just political life, of

trium¬
Their

were

war-wearv

Wwer
r

ful spring of 1945, bright with the "
dom.

to

Two

is;

It is

This way was

nations

TZ %ertTfThf world bfa but
singlef ulibrf d?ed aggressive

4-

with that yet more hope-

promise

it

-

banish fears.
t0 controi an(j to

the war's wounds, of clotmnk

InSSfSrneSSSr'

...

The text of the President's address follows:

world

all

A

the

hospitals.

to

was

way

allow

modern

one

that

each serving a town of 60,000 population.

the great and good tasks of
healing

victory,

of

bring not merely a truce in
The^nfinstant—and perished.
The na-.
Korea, but genuine peace in Asia. tions of the world divjded to fol-

to

,

tensions,

mutUal

leadership in the Soviet

Union to

to

Eisenhower

Pres.

of

intentions, and challenged

new

^

will

the bitter wisdom of experience—

this:

is

the

by

free

This

spend¬

school in more than 30 cities.
It is: Two electric power plants,

United

the

inspired

^

of

cost

history,

cloud of threatening war, it is It ; is a world that will always
too
twr^ncrete decent '
the woFld of its d?slgn' se~ humanity hanging from a cross of accord the same respect to all
vlJwN/ curity was to be found—not in iron.
others,
purpose,
to
gu a r d
vigilantly

towards peace
onstration

^

its

are

confronts

free.

is not

is

bomber

the

to

faithful

reduce armaments.

.

progress

awaits

Tllis

comrades in arms.
peoples shared- the joyous prospect of building in honor of their
dead, the only fitting monument
—an age of just peace.
'
All

that

spring

phant

'

be

States

peace.

was

that

^

lieve

the soldiers of Russia in the

direction

would

United

those who

arms

alone.

money

The

their energies and resources to the

the

ter of

true

way

spirit

;

in

the

fed,

not clothed.

are

leadership

new

own

free world aroused, as rarely in

a

spending the sweat of its
laborers, the genius of its scien¬
tists, the hopes of its children.

^tions"To prohibiT strife to"re-

soldiers of the Western Allies met

world," and
pointed out a
first

This
^

1945.

of

for

of

toward

war

weighs the chance for peace
with
sure,
clear knowledge of
what happened to the vain hope

her allies

and

ing

they proposed to
follow, through the aftermath of

It

~

position of the

nations.

Tnis

those who hunger

This world in

light of these principles,

citizens

from
not

cold and

defined the way

;;,deceit of easy illusion.

.

.

other

the

the

proposal.

it

Dwight D. Eisenhower

©utlined

all

In

shuns not only all crude counsel of despair, but also the self-

April

arma¬

just reand honest understanding
upon

Peace

Washington,

on

in

race

are

U. S. Defines Way Toward True

ence.

C.

rather

theft

and

however

past,

Its future is, in great part, its
to make.

gun

—a

the

to

strong, cannot bind it completely.

that is made, every
launched, every rocket
fired signifies—in the final sense
Every

It

Society of Newspaper Editors in
D.

any

but

la uons

awaits Soviet inten¬

peace

upon

ments,

unchanged and that U. S. and its allies

.

.

warship

based

links

Its

Cites Armament Costs

their

indefen¬

is

government

Now a new leadership has assumed power in the Soviet Union.

'

attempt

nations

And, fifth: A nation's hope of
lasting peace cannot be firmly

;sion. Calls attention to heavy cost of armaments and terror
.of atomic war. Says "we welcome every honest act of peace,"

•

other

to

sible.

because of the adverse attitude of Russia, points out

peace

our

of

nation's

Any

dictate

form

President, after explaining vain hopes in 1945 and thereafter
,for

achieve true abundance and happiness for the peoples of this earth,
"

She Wants World Peace

13

(1741)

or

any

system

to

I
I

Underwriting discount 20c per share,
($59,800). Net * proceeds (after $20,000 |
I expenses) to be used: Manufacturing facilities $70,000; Advertising and sales promotional
■
$49,000; Working Capital $100,200.
!
Underwriter will pay $300 for warrants to buy 300.000 shares of issuer at $1.30 per |
1
share, and the President of the Underwriter has a right to purchase from the organizing ■
I stockholders 60.000 shares for $300. all of which are subject to conditions summarized".
:
these
securities are believed
to
be exempt from registration, they have ,|
registered with the Securities and. Exchange Commission; but such exemp- |
■
tion.
if available, does not indicate that the securities have been either approved
lor disapproved by the. Commission or that the Commission has considered the ac-■

I

irt the

offering circular.

Because

"

not

been

Jjcuracy or completeness of the statements in- this

Offering Circular.

^Jj

14

The Commercial and Financial Chronicle

(1742)

Thursday, April 23,

.,.

1953

VI

end'
wealth."

stocks through the years and

The Institutional

Acceptance

Yet

look askance at the neigh¬
boring family which is accumulat¬

ings,

Vice-President,
Consumer Credit, Inc.

Executive

upholding

meal.

I know

when

carefully, there

pects
and

of

very

are

national

our

political

examine

you

few

as¬

economic

economy

which

can

be

said

to

charge account

American

homes,

that

tent

cash

account
in

purchases made

cerns

in

bank—the

con¬

given

a

30-day period and paid for in full

choice

their

of

is

in

wealth

one

or

We

equipment.

account

one

speaks in

general

very

terms, such

as

Ameri¬

of

canism,

can

universality of
be

agreement
axiomatic.

For

,

1

e

consumer

William J. Cheyney

d i t .i

c r e

s

function

a

notation of

receivable

account

an

indebtedness

corresponding

a

the

to

credit of such debtors to designate
their

work

is

It

for

performed

our

wages

salary.

or

this

upon

of

set

general

definitions and understanding that
must

one

The consumer, on
uses

credit, should realize that he

does

so

to buy major packages

and industry as an adjunct to the

development of the durable prod¬

tract his

segment,, particularly

that

of

which

from

satisfaction

time

beyond the

will'

he

of

ex-r

periods

over

date of

pur¬

part- which deals with products chase, his true thought being that
which are in themselves packages in the transaction he is accumulat¬
of services which can be extracted ing personal belongings; posses-,
sions

which

will

life

make

more

periods of time
by consumers; hence, which, as comfortable in a physical way;
which
enhance his
standard
of
packages, • cost more than most
living— possessions which in the
consumers can pay for out of im¬
most tangible
way
represent to
mediate payroll or salary cash'in
him true savings.
hand. Without some provision to
only

long

over

in¬

spread the purchase payments,

could not distribute these

dustry

they

expected

only

to pay as

economically

go,

-

services,

people of the United States

be

can

of

packages

long-term
for the

tific fact, rules out any presump¬
tion that they should pay in 1953
all

-they

of

the

goods and services

plus paying for services

use

they will be unable to extract
til

1954,

1955,

haps for 10

1956

of

and

un¬

that

savings and cash savings
seem

so

looked

upon

recent

tion

with

are

decades

home

of

is

the

accumula¬

ownership,

(Notice

however for how few years of the

world's
out-

as

history this has been set

folk.)

per¬

is

It

•

j

our

contrasted to the

they

with which

ease

add the figures of bank

can

This

balances.

underestimate

contributes

cial

useful

and

over-estimate
of
accumulating dol-

operated care¬
fully and con-

virtue

the

of

goods

Goods depreciate you say.

but we who ex-, urged your customers not to take

the

interesting, however, that

Your task has not been easy in a

accumulated, boom-crazy land.

consumers'

People do not
buy their home equipment to sell
it.

convinced

what

it would

bring

the

op

sec-,

ond-hand' market.

is not,

Consumer accumulation

for

future

market

Consumers

such

as

business.

speculation,

The

in?

not

are

15

true

lived refrigerator is
straight line depreciation
a

year

wishes, for changes in the value
or price levels in the
interim,
if
one
would
become
technical).
of the dollar

accumulation

ahead.

With

haps five out of six investors with
less
time

life¬

a

home

of

comes

the

accumu-

equipment
Yet

apparent.

resent

the

be-

stocks

Against

this

descrpitive

back¬

sumers

save
dwindles rap¬
discuss, here today a

may

ground it is obvious that in gen¬

idly.

eral

type of piecemeal saving by

refer

we

credit

purchase
which
tion

of

will

in

to

goods;

consumer

Notice

surgical

satisfac¬

time

the

im¬

capsule

in

purchased.

are

that

services

beyond

income

they

and
them

render

periods

mediate
which

here

it is used to, finance the

as

this

durable

tp

a

performed

in

products

The end goal

useable

to, cash,

family

the

to

just

come,

deferred

purchase

payment
a

Consumer

it does to

as

estate without

plan

used

Ijeast,,

accumu¬

in the form

of

contrasted

as,

ownership
property. To, the common
the
ownership
of
real

therein

to

services.

here is the

possessions
insurance,

1953; the lasting good from which
personal
is
expected
to
accrue
through
years

and

lation of" "wealth"

real

con¬

through their purchase of

sumers

of

applies

operation

We

an

or

possessions
represents,

to
to

likewise

in¬

ful

For I will be

•

our.

in

themselves

conform

to

definitive limits.

the
of

i.e., its
future

consumed

this

sort

accumulation

similarly dwin¬
dles rapidly; the accumulation of

use

by

In

enjoyed,
of mortgaging

way

income

to

desires,

is

and

would

belief the
not

is attributable

asm

otic

impulse

say

that it

average

person

consider

address

by.

than

to

to

patri¬

economic

in

50r-cent

the

of

use

V

first

istence.

also

that

business
five

This

four

their

of

that-

means

.

of

fail in

concerns

years

;

out

of

Mr,-

Cheyney,

before
the 1953 National Consumer Credit Con¬
ference.
New
York
University.,
New
York City, April 8, 1953.
.1 "




.

very

banking
between

just

a

few days

usual report
concern,,
those

are

of

"Few

a

ago.

large-

and: far

who. purchase

foundations

of the windows in

The

house.

our

eco-

depression

other

use

.

so -please understand
this, discussion is not about

..

That effort is commendable.

squeezes

lions

of

view

dim

will take

that

economy

them while

we pour

overseas.

bilj
\

Currently that policy sends $10
to $20 billion of American

wealth

It is not fea^t
sible to compile accurate figures*
There are too many items, top
many variables, and too many rat
holes. There are direct handouts*
Point 4, military aid, American,
each year.

overseas

expenditures,

army

defense 1 spending,

chew

to

1

areas.

I And

..

in

Can

on:

Adminis-

any

that tration require the American peo-

capital by would-be b(usi;-,
the pie to tighten their belts, give up
and their families rto, enhnrnediate outlook, but is con- extravagant
habits acquired' "in
private enterprisers far more cerning the future—five* ten-and the- last. 20 years — while our
risky than the use of the*same. 20 years ahead,
wealth is being, funneled over¬
capital to accumulate household,
WUI. •*.
.
.
seas
at the rate-" of $250 million

nessmen

ter

satisfaction-giving durables.
There

I

i*

total

limit,

value

of

<rf

,

■

.

■

*

of

sense

physical

durables-

penl-contmueci cietermrad

a

home

the

and-

balance- between

equipment: of

growth. of

balance and other

ing-

life

there

a

one's

if,

of

course,

considerable "on; going" margin for savings out of" the
family s income.
Nonetheless, it.
is

any-

false

is

the

economics

people

to

misleads

and

teach-that

vestment

of

month

the

Tearful

the

in

funds

in-

each

to

destroy

Secondly, I want
to
discuss
briefly what you can do business wise, to. protect/yourself and
your customers,
r,

Finally,; and

most important,

is

institutional

my.

belief- that

acceptance

(continued

on

of

the
conon

page

30

I"

hope to suggest a course of action
that could prevent the national
catastrophe that is the certain end
^

•

it

week

that

or

faster?

Do you believe

conservative Congress* can

a

be elected on a
penny

platform of pinch-

for the home folks—spendon

the foreigners?

_■

•

+his fellow has set out

for himself

Now

to

I
my

a

now—

biz order

agree

first

topic

—

the

ma-1or forces opting to cause
* An address by.' Mr* Buffet* before the
Nebraska Third District Bankers ConOmaha, Neb., April 22, 1953.

vention,

financial

I suggest to you That

won>t g0 for

and

spending
home

as

well

Inflation

policies /of loose
extravagance
at;
abroad—in other:

as

WOrds; ruinous

inflation,

Force

No.

5

%—The

America
For

the

first

\

America

•

time- in

is

now

our

I

*

-

«

Dominance of the Military in

tory.

-

•

,

way

Americans
it, and that the only
that policy will be endured is

^y

operating

by the American ,0f continued inflation.
•
household equipment
M
H
u*.
You
whik'thp
Y0U may decide right
may decide ngnt
while-the •:

constitute* exnenHitvirp
constitutes expenditure

Thus,

of

combination

the
53;% that; is left of the* 1939 dolfoixe.s

.year

iamily

oi?

savable

a

Primarily what I hope to picture

bank

savings,, includ-

insurance,

about is
«»ra,»0.un,t .*c°"

f

.lon8".*erm

course

ment.

the

surprised if we do.
shake-ups that will
and
break

have

ex¬

the

of small

dollars,
when
they
purchased 1.0 years aga out placing of similar funds in banks
and securities constitutes invest¬
100-cent dollar savings.

a

economy

fairs,.
a

is

to
achieve
in domestic civilian af¬
earnestly

off-purchase
Export-Import
the textile industry and the col- Bank
loans, World Bank loans,
lapse in cattle prices axe storms stockpile material purchases, etc.
that
indicate
rough weather in
I repeat the question I want you

some

eco¬

were

I received
*An

more

satisfy current soundness. Note the redemption
today of these gilt-edge securities

passing 1 should

my

new

the

some

Only in minor degree do we
speak of and defend the use of U. S. Government bonds excepted,
credit by consumers to finance although even here their entnusiservices

five

the other hand, a success-,
the
family should commence to

toward"

as

reasons.

on

economists

well

as

.

cludes, by this definition, financ¬ accumulate
savings in the form of
ing which consolidates obligations
stocks and bonds, the fervor of
which

essence

tho given family ought to: accumulate
for its own' status and.
comfort:.
does
There is advantage in» maintaining

say

refrigerator-.

credit

very

Consider

house- the

empty satisfaction;
it. not seem sol

If,

nomic

accumulation of

an

de¬
since

dollar

higher price levels, may sound out
of place in the near future.

rep-

nomic

con¬

steady

a

the

of

we

1939.
A
saving than they in the
reversal, even though
aggregate invested.
The fallacy temporary, is overdue. So what I
of assuming the accumulation of
say
today
about
inflation
and

for obvious social

terms.

on

what
six to

of

omists for channels in which

daily,

now

next

interruptions,

experienced

able products the people purchase

cumulated

the

Administration

new

working

But I suspect the voters

terioration

the end of

predicting

in

minor

have

at

My obser¬

18 months.

the securities markets leaves per¬

money

not

are

habpen

may

The

doing I want to

so

point clear.

one

vations

in

of stocks

But in

make

right

wrapped in the packages of dur¬

ac¬

seas. There is no stated limit or
terminal point in this pledge of
our
youth
and our resources,
When one scheme goes stale, like
UNNRA or 1 later the Marshall
Plan, a new name is created. Like
dope, these handouts and med*dling habits are more difficult to
halt each year that they go on.
On the domestic front our foreign policy raises a question our
bigwigs don't talk about. I will

depreciation! answers: I do have, just "ain't so." tell you about i.t,. and you can con-i
We have a saying in the invest- sider its political significance.
.
a
ment business that he who looks
Can
an
elected
government
of 1/15 of the original' cost each
back dies of remorse. So in this play Santa Claps to the world and
year (allowing, of course, if one
discussion I am going to look be Old Scrooge, at home?
i

on

the

realm, of

economic; matters

on

—and it has? taught me that some

soon

leaves the

one

that I don't have all

me

the answers

jar

once

•

I want to. confess at the outset.
that 27 years in the investment
business, shortened by eight years
spent in Congress, has thoroughly

plant and equipment in terms of

ership in America itself and stock
ownership should be encouraged

are

Buffet*

Howard

und-u-e- risks and unnecessary
be cautioned that, chances. For all this I salute you.

should

buying
of

or.

policy has us making mili¬
tary expenditures in 50 countries
on six continents and in the seven

plore the economics of instalment
it is in error to consider the value

being levied against
government budgets
more countries.
This for¬
are

eign

have

andi

Cer-

cash, home ownership
and insurance, the fervor of econ¬

services

in 30

servat.ively,

lars.

Taxes

Americans for

You-have

not

of

sequences

^

;

accumulating

place to place, and year to year,
indisputable.
i

but the facts are

condi-

tions.

of

military is trying to police the
The pattern varies from

world.

finan-r-

sound

ant

wisdom

the

of

to

best

to bring about

,

of own-

term

is financing deficits for most
non-communist world, and

ing your

wealth

useable

accumulated

of

lation

\;

The result is that the U. S. Treas¬

I

ury

economic goal, for comt, stocks is better than

an

us

political, economic and
obligations in the world.

..unlimited

bankers,

Moreover,

bipartisan .> forthat we have

so*callec^

||MH|

|H||eign policy tells

its

of the

The

through

favor

than

have been, do-

synonymous.

Accumulation by the public also

15 years. Such long-

or

the texts and current

accumulating cash. So much

mon

on

are

made to

speaking,

which obviously, as a quasi-scien¬

for

Many

admonitions which extol the virtue

Inflation Force No.. 1—The
American Foreign Policy

difficulty in measuring the value,

tainly, they do,

business

by

econ-

^

„

w

en-

kno,w that you

that

true

.

his side, if he

to

economists have,

is

It

explore the institutional

acceptance of consumer credit.

of

ica

of

group

more

de-

the American dollar finally to

a

corresponding

but not yet paid for to

in

them

services

ucts

such

offset

must

it follows that we

restoration of
permanently halt
continuous inflation.,

to

way

teriorate like a ripe banana.

Third

you

No

do

can

in Amer-

omy

its real definition.

to

as

it conforms to

use

this definition,
with

consumer

enterprise

private
is used

It

credit-, and in

t

that

say

represents

economy,

our

purpose,
us

the

sound

look the fact that scholars so fre¬

1y when

"institutional

Bankers.

courage

On

in

District

over-*

not

must

only

as

Lists current forces leading to

businessmen

quently have treated

out of income earned

currency

opportunity to, speak to

home

acceptance."

economy.

inflation.

gold

With good reason I welcome the

wealth as a
by the pur¬
exchange
measurement
chaser within approximately the purely
same time stretch.
If the charge that the public mind is confused

have complete

and

redeemable

accu-„

of

form

of the windows in our

some

themselves and their customers, and advocates

accumulation

the

the

have shake-up* that will

soon

house," hojds present- paramount economic peril is
deterioration of the dollar. Urges bankers to protect

continued

if

truly involving the other—quickly would tell you,

as

charge

a

that the aver¬

the right to

da not

we

jar th£ foundations and break
economic

family

(2)

or

Congressman and investment dealer, saying he "would

be surprised if

not

it were
given a choice between just two
alternatives, (1) the right to ac¬
cumulate
equipment
for
their

credit, that is, to the ex¬

consumer

Former

month,
would
on the

setting aside $100 a
proudly
say
they
never
purchase anything

age

l""

Nebraska

Former Congressman from

piece¬

who

instalment plan.
It is my opinion

;

By HOWARD BUFFETT*

who buy stocks

men

by

consumer

mulate

Strangely,

equipment

household

ing

for

credit as a function of
and in the private enterprise economy, finds as much reason
for the public to invest in household durables as to save, buy
life insurance, and invest in stocks.
Points out American
industry carries a debt of 35% on its assets, and its solvency
is not questioned.
Cites huge appliances industry built up
through instalment credit, and deplores "dissemination of
statistical data reflecting on consumer credit markets."
Mr. Cheyney, in

Powerful Forces Leading Us
Toward Ruinous Inflation!

is.

Americans who are

many

happy in their own steady drib¬
bling accumulation of stock hold¬

By WILLIAM J. CHEYNEY*

Foundation

accumulated

true this

How

Oi Consumer Credit
National

with

up

;

his¬

dominated

by the military in so-called peace-!

time. There is no reward m railitary life for economy or retrenchment. pressures for larger spend¬
ing

are

automatic.

It is

a

^one¬

Today our military
expenditures—on an overall basis

way

street.

Continued

on

page

41

Volume 177

Number 5214

.,.

The Commercial and Financial Chronicle

SAFE

WAY

STORES,

INCORPORATED

1952 actuatle^.
The

well in the election

Company did
the

over

preceding

dividends

all

on

Net sales

year.

year.

were

Net income before taxes showed

outstanding stock have been paid since the CompanyVincorporation in 1926.

NET SALES HIGHEST IN

HISTORY

NET PROFITS INCREASED
(Before Taxes)

Again in 1952, total aggregate net sales of Safe¬
way

Stores, Incorporated and its subsidiaries set

new

The net

record, totaling $1,639,095,212, an increase

of

$184,452,216,

increase

an

the highest in Safeway's history. Uninterrupted

12.68%

or

a

$17,094,348
1951. After

net sales in 1951.

over

profit before income taxes for-1952

taxes

was

compared with $13,318,809 in

as

refund of excess profits
$1,157,000 in 1951 and

allowing for

a

in the amount of

payment of increased income taxes in 1952, the
net

profit after taxes on income for 1952 was
$7,331,943 as compared with $7,615,851 in 1951.

EARNINGS AND DIVIDENDS
After

deducting preferred stock dividends of
$1,641,948, earnings amounted to $2.01 per share

of

common

stock. This compares

previous year of $2.26
Dividend

preferred
per

%

r

paid

were

Here's What

<

Happened to

"'A/,
!

1.63 to 1

was

as

on a

against

in 1951.

15 YEAR COMPARATIVE RECORD OF SAFEWAY

Paid out to Farmers

,

-

/

%

85rro

\

III

'

Suppliers of
Expended
for Manufacturing and
Warehousing
Goods and

\

'

'v

iiii

Paid out in

-I

j

100

iW

!

y

Salaries,

Wojjes and Bonuses

;

Paid out for Operat¬

ing Supplies and Other

Expenses

A-'' J

\

'■::

Net Assets

Taxes,

■,

'

Set Oside to

cover

De¬

Profit for Stockholders
and

1938.'..

.

.......

'/>>''

$

$13.84

r

,.308

14.26

287

14.38

-

1941...

.......

60,007,566

270

14.87

1942...

.......

60,154,048

280

..

»i.

61 ,*453,200

288

.......

62,564,498

1945...

...»-«.»

63,604,685

•311

........

71,901,081

-359

..«^. >«

76,039,946

388

21.96

81,972,829

428

24.44

91,236,990

488

28.22

115,215,274
113,821,747

371

29.76

;

377

29.58

132,273,480

266

29.03

1946...

Compensa¬

1949...

.......

.......

........

'

1952...

i;''

2.20
1.59

15.23

,

1.00

1.35

15.78

t

;

i.oo

1,56

16.40

■i

*

1.64

1.00

;

1.63

i.oo

,

16.97

1.59

1.00

20.18

4.29

,

*

.......

as

299

\

$1.34

.1.17

1,17

1943...

•

Stock*

$ .67
1.50**

1

53,286,166

•

Common
*

Stock*

48,407,475
51,075,334

1951...




$314

Common
'

.......

1948...

"

;v*v,

Stock*

Dividends Paid Net Earnings
Per Share of Per Share of

.......

tion to Elected Officers

'

*

Common

1939...

1950...

i

Per Share of

Preferred

*1940...

1947...

Surplus

Paid out

)

Per Share of
Stock

-

^

preciation

/ Wi

Book Value

Capital
Year

1944...

Paid pyt for Local,
State and Federal

'

STORES,

and Surplus

and other

\

"

ill

$142,948,472.

INCORPORATED AND ALL SUBSIDIARIES CONSOLIDATED

Safeway's 1952 Sales Dollar
✓

fully consolidated basis
1.39 to 1

on

$232,344,580,

were

were

The ratio of current assets to current liabilities

stock at the rate of $2.40

common

of the sdme date

and total current liabilities

earned 3.51 times. Cash dividends

the

on

Safeway and all subsidiaries

31, 1952 totaled $132,273,480. Total

current assets

on the 4% cumulative pre¬
416% cumulative convertible

share.

/

'

December

stock.*

,

f- V

common

s

,

f/

with earnings in the

share of

requirements

ferred stock and the

were

per

ASSETS AND LIABILITIES
Total net assets of

1.00

2.75

;

i.oo

3.50

'1

1.25

5.04

2.40

5.20

2.40

2.26

2.40

2.01

*Number of shares adjusted to reflect April 12,1945 3'for-l split.
**Paid in part in fjve percent preferred stock.

PROGRESSIVE OPERATIONS
THAT PROMOTE 'PROFITS
•

"Buy-build-sell-lease"
of

new

stores

and

stores to increase

program

Maintaining

with construction

modernization of

existing

an

continuing research

a

effort to increase stockholders'

of

Operation of Company owned supplier plants

Establishment

for production of quality milk, bread, coffee,

increase

goods, and other food products to be

sold at reasonable prices.

•

<

densely populated

canned

•

profits and

customers'convenience.

efficiency.

in

program

Maintenance

of

assure

testing kitchens operated by
the

areas to maintain quality,
efficiency and speed service to retail

outlets.

trained home economists and

nicians to

large distribution centers in

laboratory tech¬

••

Providing expert job training facilities for all
professional meat

workers from retail clerks to
cutters. In

quality at all times of all

products sold in Safeway Stores.

courses

addition, the Company sponsors study

in

citizenship.

SAFEWAY

m

STORES,

INCORPORATED

V—
..u
.....DiAtJ,

SAFEWAY

STORES,

INCORPORATED

pBa»«S60.OaMon<'A,Co«orNo
please

send

copy of

YOUR

1952

REPORT
'

1
'

*

,

^

ANNUAL

name..-

•••

STREET..
ZONE... .STATE.."
city.... — CP

The Commercial and Financial Chronicle.'.. Thursday,

-

16

(1744)

What New Administration

COMING
In

Calling agriculture

SHERMAN ADAMS*

By DR. E.

Deputy Manager in Chaige of Department of Monetary
American Bankers Association

to

era

Let

the

consider

us

Administration to
"sound

ministration

culture without government aicL

(Chicago, III.)

1953

j

Municipal Bond Club of Chicago
meeting
at
the
Union

annual

League Club.

tical

htC

a

•

(St. Louis, Mo.)

banking.

i

Dealeri

standpoint
economic

of

tant

probably

icy,
the

most

sig¬

nificant

'sound money .'

•

Throughout

Or. E. S. Adams

his

campaign '*

and

since,

-

Eisenhower

President

repeatedly expressed his de¬
termination to prevent further in¬
flation.
What does this portend
the American

Does it
for

economy?

that

mean

we are

serious decline in prices and

a

business

activity?

Over

a

-long

been

subjected to repeated doses

inflation.

of

to

come

Many people have
this treatment as

regard

being necessary I to
pression.
This

the

ills.

de¬

prevent

:

:

viewpoint partakes of the

ancient
is

has

years, our economy

fallacy that

It is

more money
economic

all

for

cure

modern version of the

old

bubble

theory of John Law.

The

trouble with

it

always

bursts.

bought

never

bubble is that

a

Nostrum

of

secret

lies

in

the

and

pected

debt

more

and

of

and

more

and

more'

more

money.

Prosperity

Without

Inflation

Prosperity without inflation
the

aim

the

of

ministration.

Eisenhower

This

is

not

a

is

Ad¬
new

idea, certainly; indeed, except for
the past few decades, it has always
the

been

traditional

American
I

do

objective of
policy.

public

not

mean

to

that

t•

:;,v.

ji;

::

practice
tural

Spring meeting
the Greenbrier HoteL -

the

would-be

conquerors who came to power in

failures

to be

are

Germany, Italy, Japan, Russia, and
Neither do I wish to imply that
there is any certainty that infla¬
tion will be halted abruptly. Fed¬
eral

expenditures for defense

bound

to

remain

veryVhigh

might conceivably increase.
will

be

true

even

if

are

and

This
is

peace

achieved in Korea.

Moreover, even if we are able
military spending some¬
what, the task of achieving a sound
to put our

economy with

part of the normal pat¬
in good times.
■

as

even

cent

months

in

the

livestock

in^

:■*

difficult prob¬
lems. Overhasty action might en¬
danger the rather precarious bal¬
pose

many

of

ance

very

high-employment
economy. The Eisenhower .Admin¬
our

istration has evidenced its
ness

of this

*An

address

aware¬

fact,

dustry may be a preview of what
will take place in other areas over
the next several years.
'

of

Dr.

Adams

before

a

Meeting at the Fourteenth Annual
Pacific Northwest Conference on Banking,
SlatCollege of Washiur*on, Pullman,
Washington, April 10, 1953.




stitutions have contributed much

;^°

agricul-

i

never

institutions

are

......

June

prepared to with¬

a

r i
t
3-4, .1953

that may de¬
noninflation economy.

.Twin

;

for

the Banks

Strong Enough?

By and large, the banks

i

much

than

their

communities

even

adverse circumstances.

under

'

There were some banks which
managed to survive the holocaust
of

1929-33

less,

were

customers

but

which,

unable

to

neverthe¬

serve

their

Club.

•

s

•

-

Annual

Canada

of

of

'

-

•

June 18, 1953
;New York,

Pelham

gov¬

.

..

nual

(New York City)

._;

at; the

day

at

Club.

Rock
-

through

,

...

,

.

many

...

.

does

not

of

nothing
farm

This,

prosper.

which .is

first
concern, - therefore, June 27, 1953 (Chicago, HL)
always be the stability of the
Chicago Bond Traders Club An¬
banking system. On the basis of nual Spring Outing at the Nordic
past experience, we might sum¬ Country Club.
Our

as

Aug. 20-21, 1953

(1) Every banker should peri¬
odically reappraise the adequacy
of his capital and reserves.
/If he

page

37

IBA

Rocky

(Denver, Colo.)

Mountain

Group-

Bond Club of Denver annual

frolic

at

try

sake

of

and not

avoid them for the
your bank, but for the
to

the
desk, the citizen^of your com^

sake of your customer across

^et^sa^here a°nd

in

now,

that

al- j do not claim to have all the an-

would like to discuss
two glaring examples of
a
•
-4mL
u -x the
years I have experienced.
- Amazing as it seems, through U
some of you older men can well
aii.>y0ur best operators-survive remember the overexpansion of

ine sericulture

or

one

•

and prosper and, best of all, the 1918,
-n

futurc
r

Ms

brighter. Science is being helpful.

of

eases.

"

has

medicine

,

j

•

marked was
•

-

the cur* and, preven-

animal

and

practice
.

0.

„

.

.

..

than

that,

sizable bank
to make up
amount.
This
a

was; nccesSary

additional

is promptly blossomed

in

nowadays

the adjoining farm.

also to -be mortgaged and,

worse

^

poultry dis- the

Better soil conservation

and / 1920, when.

1919,

yes,vthe farnr being purchased

.More and better insecticides, vet- Oh

erinary

-

throu8hou^
^ buy

looks

rcspect

into a capital

loan for the bankv All of
the final result.

.

most States. Crop rotation is be-

During 1922, 1923

and 1924, we saw wholesale fore-

ing adopted and diversified farm- closure and literally thousands of
ing

with

dairy

livestock

projects

are,

operations or good
in

many

*

lo-

men

flat > broke and many

banks-with substantial losses star-

them m the face, with no poscall ties,
surplanting
the
"one- sibjiity of recovery.
time" "one-crop" program and, to
why did it happen?—too ambi..

be fair,

toois
to

mg

let's not overlook the fine tious

contribution ,that
and

modern

equipment

farm

a

program—in short, over¬

expansion.

The long-term debt

have made

the American farmer,

enabling

investment,

on

top of the heavy

sum¬

Albany nultl -"^TaddrMsbr Mr. Dignui
Hotel
(Aug. 20) and Park Hill Couiitrtf.1 th«. Indi.».
Club (Aug. 21).

,„c,
mer

is as

of the hazards of finane- swers, but I

ways one

.

the

Qnly

say

fluctuations

price

commodities*

common

/

to

My answer

the mistakes of the past

are

farm and livestock producer

your

*5?*

that you can benefit and profit J?y

other

prevalent, you know too well that

Spring

must

on

You fellows who
in

I do think, however,

yours—no.

,

hazards that beset the farmer

tion
an¬

when, : and all cases?

years

.

Continued

bankers.

will be a sure-fire slide rale {pro- f
cess that can govern all conditions j

T

rainfall, infesta-

.,

of Cincinnati annual party ^at
Kenwood Country Club.

Lessons from Past Experience

.

i

bankers of Indiana

tion of insects or the

progress in

Group

tem.

,

you

due to excessive

_

Security Dealers As?

Annual Outing
Country Club.

field

.

,

scale, would create a real threat June 25-26,1953 (Cincinnati, Ohio)
to our independent
banking sys¬
Municipal Bond Dealers

lessons

^

a

babies in 1921,1922 andML923,;

those of you

some r"!e

extremely hazardous business;

have ilived

annualsummer

_

sociation

ernmental credit agencies. A rep¬
etition of this, even on a reduced

the "essential

has

1933, 1934 and

#

Convention.

rious, but it also retarded recov¬
June 19, 1953 (New Jersey)
ery.
It also contributed to the
Bond Club of New Jersey
establishment of numerous

marize

banker

guide, but what about you

a

young
or

Many of

^:^^ W^arSh ^aUey
Country Club-

se¬

more

as

•

an

.

Philadelphia

not

adequately,". This

only made the situation

as-

-

experience to use

-

.

v.

of

..

Wgaith of past

production were

making

,

old-time

The

these

the

looking at the individual bor-|

are

supplies.

loans*

banking collapse appears to be try Club.
completely out of the question.- •-*
June 10-13, 1953 (Bigwin, Ontario,
But simply to avoid another de¬
Canada) ^
•'
bacle is not, of course, enough.
Investment Dealers' Association

more

Predominant repayment factors

.

,

de-:

high school m
1935—is it possible
Is this a simple task? It is /not. that
you must learn the hard way
First of all, you are dealing with by taking losses, or can we lay

City Bond Club annua)
the White Bear Yacht

a

do

-

.

fulfill

cannot

in

capacity,

-

-

able to

,

which

responsibilities -without

Jupe 5, 1953 (Chicago, HI.)
Their assets, gen¬
Bond
Club
of
Chicago
40th
erally speaking, are -both more
liquid and of better quality than annual 'field day at the Knollwood Club,'Lake Forest.
formerly. For years, most banks,
have been following conservative
June 5,1953 (New York City)
dividend policies and have been
Bond Club of New York Annua)
building up their capital accounts
and reserves.
The possibility of Field Day at Sleepy Hollow Coun¬

be

■

.

sistance of the banks, within their

*ood condition.

must

-'jV?

materials, have at

raw

Agriculture

in

are

their

•.

all times ample available

picnic at
Are

house-

fast-growing

a

industries,

pend upon

annual

.

•

great

(Minneapolis-St.

Paul, Minn.)

stand any pressures

velop in

Detroit

American

The ultimate repayment depends
Up0n the type of operation being
agricultural production financed and yet, in each case, we j

j

golf party at the Meadowbrook Country Club.
-

that their

sure

of

the

to

also essential and important that

summer

The import for banking is clear.

Bankers must make

Club

Bond

.

follows:

Dinner

re-

that more to the present and the future?

belt and feeding areas as iti
American population continues to is in the area where range cattlebe well-fed and well-clothed; It is °r range sheep and wheat are the :

f

June 2, 1953 (Detroit, Mich.)

sound dollar will

a

make the oldtimer feel he waa
living in a new world. These in-'

and

practical

,

iwife, in order that

;

ex¬

-

China.

with

We must

sibility

at

May 15,1953 (Baltimore, Md.)«.

inflation,

and

America

of

t

against

remedy

.

nec-

the

development

tioiii

simply exist. They must
public policy in this country has,
Bigwin, Inn, Lake of Bays District
have sufficient financial strength
been chiefly responsible for the
to be able and
willing fully to June 12, 1953 (Philadelphia, Pa.)
inflation. Most of it, of course, is
•••
j
*
t4.*
serve
the legitimate credit needs
Investment Traders Association
part of the cost of defending our
civilization

to

of the past 20 years. The advance-?
ment in livestock feeding would

•

sible to harmonize sound banking;' i

).'■

In many

Banks

imply

mental work has been the marvel

policies

our

take

experi-;

Their

due: University.

If we,

arrange our program in order

Baltimore Security Traders Asfields, therefore, pain¬ sociation 18th Annual Spring Out¬
line at the Country Club of Mary¬
ful
readjustments may lie ahead.
; i
\
•- ' What has been happening in re-, land.
•; [)'■ ; ;

tern

that

enduring prosperity

creation

present, if

unsound, let's

remarkable boost

a

it will be sound, both for the bank
and for the borrower. As for the

•'

policy shifts'away

losses

*

the

public

paternalism

have

Bankers

the

ex-

..

our

a

in

...■wi-.it-..

When

•

period of

adopt

andSproduC-]'4---'rrs ■?■
j
lose sight of
v Now, iir spite of all this .very:
Association of Stock Exchange
nave
been few and far between.
the real problems of: agriculfciraL impressive progress, we are still
^irms Board of; Governors i. Meet¬
We may be headed for a real
producers and keep in mind that
deading with the law of aver-;
ing.
f
testing period.
ar ■ return;< u#
a
you, as bankers, have some re-v ages. You and I are asked to fihighly competitive economy and
May 13-16, 1953 (White Sulphur sponsibility in this matter to your nance the individual producer. la
Lo a price level which is not al¬
community. Above all, agriculture
Springs, W. Va.)
cases, you and I realize that
ways rising will mean the elimi¬
Investment Bankers Association ^as 3 grave and serious respon- Tep'ayment of the loan depends on:
nation
of marginal producers.
from

headed

the

essary-steps

May 11-13,1953 (St. Louis, Mo.)

'Losses on bank loans

.

-

has

for

Astoria.

been

prosperous.

is dedicated toj

should

we

In the last two decades "know-

y

>

the trend of prices

strongly upward. Most
businesses and farms have been

that ii

is

there has been no seri¬
banking assets.. For

of

years,

many

has

new

Administra¬
tion

test

ous

fact

about the

For more than two dec¬

ades now,

better job and to do It

of .agriculture and livestock feeding than we are willing to admit,
future, let, us analyze our phi- and your great institution here in
Ranch, Brackettville, Texas.
losophy for determining the sound- Indiana; in my humble judgment,'
ness of agricultural loans and let
is one of the great leaders in this
May 8, 1953 (New York City) i
us examine the program that we
march of progress. I salute your,
Security Traders Association oi
are using and see if it is not pos- great University, Purdue!
< j
York dinner at the Waldorf-

new

business.

pol¬

a

when it needs to be done.1

bankers, have made mistakes in

are

Spring Meeting at the Fort Clark

approach has impor¬
implications for the banking

This

*

him to do

the

by great institutions such as Pur-

At

a

.

the

From

review

years gone by, /let's frankly and
honestly admit our folly.
-

:

■

American

!

how" has had

as

Municipal

Louis

St.

to

us

tending agricultural credit.

\pril 30-May 1, 1953

the concept of

of

Advocates action to stabilize

past, check up on the present, and
try to visualize the future and the

J

InvestmentCud

meeting at the Boston

all

j

policies

April 28, 1953 (Boston, Mass.)
Boston

for

j
:

agricultural credit

/

..

As bankers, I believe it is prac-

'

money"

Over

cant.

to

means

.

;
is highly signifi¬ Group annual outing.
period of time, it
May 6-9, 1953 (San Antonio, Tex.)
will
probably exert a profound
Texas Group Investment Bank
inrluence upon economic devel¬
Association of Amertce
opments.
•
> • - •'* • "t,:' ers

Au-

new

••

.

April 24,

Yet, despite all these provisos,
the dedication of the Eisenhower

in a
what

ushered

and

close

a

one.

new

more.

j

point where "tbey must either fish or cut bait,"
and they should assume tbeirresponsibilities hi financing agriat

ars are now

Hotel Bilt-

Room,

Money" Portends

What ''Sound

;The election of General Eisen¬
hower last November brought one

Fountain

the

i

j

lays down principles bankers should follow in granting;
farm loans, so as to avoid a bad credit situation. Says bank-

annual spring dinner at

sociation

most significant

as

...

agricultural distress in the '20s,

and

Security Dealers As¬

New York

fact about new Administration its
advocacy of "sound money," Dr. Adams says aim of President
Eisenhower is to restrain inflation while mantaining prosperity.
Warns, however, return to a highly competitive economy, with
stable price level, may mean elimination of marginal .producers
and many painful readjustments may be ahead, for which
bankers should be prepared. Urges banks appraise adequacy
of their capital and reserves, and guard against laxity in lend¬
ing. Holds banks are in sound current condition.
Citing

City)

April 23, 1953 (New York

j•
!

extremely hazardous business, Western

an

bank executive barks back to

Policy

■'<

Vice-President, U. S. National Bank, Denver, Colo.

Field

Investment

By EMMET J. DIGNAN*

•<

EVENTS

Banking

Means to

April 23, 1953

long-term debt was beyond the
producer's abilty to pay in a peContinued on page 4o
.

>.

Volume 177

s

Number 5214.The Commercial and Financial Chronicle

.

•

(1745)

■5

17

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making

■

structure

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•>«

^V\s\

«MT UKK
STEE1 CORP

Detroit, Mich
of

a

>\\Nv^

of

applications

\N\V
.

««V\
'

*

rv,

sST^fc1'
foF.

standard and
products

steel

*.3

-Irjon.W vrWor^a

§,*&£$.

^other important steel produci

V

^

fc"//
'

*

*

•

'

.

'

'

.

u.

■*.-■'

.

,

„

,

/(.!.

co>

'

Speeding the flow of vital iron

ore
SFRANSTEEl division

with

new

a

fe°rFv Vlch-and Terre Haute

"Leviathan of the Lakes"

famous

Early in the present shipping season,
National Steel's fleet of iron ore freighters
will be

joined by the Ernest T. Weir ... the
largest ship ever built on the Great Lakes.
Before navigation

is halted again by next
ice, it is estimated that the Weir will
transport approximately 900,000 tons of iron

winter's

National's

from

ore

mines

in

the

Lake

Superior District to the docks of Great Lakes
Steel Corporation in Detroit and to lower
lake ports for rail shipment to the Weirton
Steel Company at Weirton, West Virginia.

I-

founder

and

chief

executive, this proud vessel is 690 feet long,
has

a

capacity of

cargo

more

than 20,000

lHfL "anna

t.

OH COMP
0hPtoducet

m extensive he
the ^eat
Lakes a:

York

RI

r

Ernest T. Weir is a symbol of the
of steel production in America. More
particularly, it is a symbol of the consistent
progress of National Steel
completely
integrated
entirely independent. . . one
of the country's largest and fastest growing
producers of steel." """7
7'* W ' * »' "• >

national
Supplies high

mines CORP
erade

^

n

new

.

.

.

.

.

iJ

:

V

WTIOHAlSEEEl PRODUCTS CO
Houston,

Texas.

W

.

IHI„

,

VtzstMs. F J'
NATIONAL STEEL

■
■

r
,

progress

.t.,
;

furnace CORP.

Buffalo, New

,

.

for National's

Named

•

jfM*

features of marine

The

iron^
itZ ln
8
■

Sttan-Ste^rSLte't8™,^

and

incorporates the most advanced
desigm It is a sturdy link
in the vital chain of transportation which now
must move the greatly increased supplies of
raw materials demanded
by National's large
expansion of facilities ... an expansion
which will bring steel-making capacity to a
total of 6,000,000 tons during 1953.
/
tons

ri""* l"0H

fce™""-feturer-of

CORPORATION

■

:
*

ttifJL

4

v

i
r

■

'*

GRANT BUILDING-

:

;

,

*

"

^

AN-INDEPENDENT




-

f

f

-

A-

v

COMPANY

' -

OWNED: BY

; u,

PITTSBURGH, PA.
S

-'p**

MORE

n;

THAN

<vn

l»,000:

V

NATIONAL
•A.

** >-

STOCKHOLDERS

r.**

i'

STEEL

4 A

:

•: ^

•

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Xl.-1

.

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5f*

...

The Commercial and Financial Chronicle

J3

dustry and Canada is the secondlargest producers of hydro-electric
power in the world.
The annual
value of Canada's pulp and paper

The Canadian

Pulp
And Paper Indusby

President, Canadian Pulp and Paper
*

■

Association

As

session

this

is

to

devoted

Canada's resources, some statistics
to make them

First,

brief

as

as

try

possible.

you

Her

wooded

products

of

pulp

meet

to

these

And

needs.

and paperboard

far

by

largest

the

I

summarize

will

loans

papers,

make

mills

over

a

year;

products.
But

/

such

any

statistical

sum¬

Brazil and the

mary is apt to be a dull thing. It
390
does not give a picture of the color
the
and romance of an industry such
rates of individual usage are much
as this; nor of the scope and mag¬
lower: in Iran, for example, less

forests of

than

ceeded

he
consumes
about
pounds. In other countries

only

today

by the tropical
of

forests

Russia.

is

Canada

2

person

nitude of the industrial skills

consumed

in

year;

per

pounds;

a

is

pounds

Japan,

23

per

Egypt,

pounds,

8

and

re¬

quired to provide you with your
morning newspaper or the paper

without thought of
France, 63 pounds. But as the how
country green
R. M. Fowler
they reached your hand.
economies of older nations recover
with trees, her
The story starts deep
in the
forests occupy
over
1,300,000 from the effects of the war and northern
woods, remote from any
square miles, or 60% of the land as the underdeveloped areas pro¬
settled community. The demand
area of the 10 provinces. Our pro¬
gress and raise their living stand¬ for
wood has pushed Canadian
ductive forest area totals 764,000 ards, there will be a growth in
pulpwood operations far into the
square miles, some
10% larger their demands for pulp and paper hinterland. In several instances
than

that

Jbut there is

important differ¬

one

almost all

between the two:

ence

©£ your

States.

United

the

of

productive forests are eco¬
accessible, whereas
has over 260,000 square

nomically
Canada

miles

Dominion

the

that

Service

classifies

now

Forest

produc¬

as

tive but economically inaccessible.
In other

words, this area almost

products which could be substan¬

in

the

use

of

books,

as

wood

more

will be obtained from the forests

occupied

tiow

silviculture
serious

improve

as we

and

losses

reduce

from

the

on

fire,

insects,

and disease. As much wood is

in

sumed

Canada

our

by

con¬

these

scourges each year as goes
the
manufacture
of
pulp

into

and
date, Canada has had
ample supplies of wood; and there
To

paper.

still appears to

margin

to

be

meet

demands.

With

materials

can

a

comfortable

growing

proper

be

world

care,

raw

provided for

a

Canadian

companies

cutting

are

new

human

magazines,
increasingly

needs

and

wants

develop they are being met by
turning to wood fibres as the raw
material:
have

paperboard

largely

boxes;

paper

containers

displaced
wooden
milk bottles have

claimed part of the market from

into

moves

mechanized,

an

enormous,

mass

highly-

production fac¬

tory. Whatever may be the theo¬
ries about bigness in industry, it
is inescapable that the mills mak¬

ing

newsprint
be big,

must

and other papers
with large high¬

speed machines and heavy equip¬
ment

for

incoming
glass bottles; and in a non-paper
wood
and
the
bulky outgoing
field, rayon and acetate fibres
product. From one of the more
made from wood have challenged
modern machines operating, as is
the

textile

cotton.

markets

of

wool

and

These and many other de¬

velopments

have

been

reflected

in the per capita consumption,

'

handling

the

customary, night and day for six
days a week, there flows in that
ribbon

time

a

wide

and

of

paper

20

feet

2,600 miles long. You
addition,
the
number
of
might thing of it as covering a
heads in the world is increasing
20-foot highway from New York
rapidly. We can picture this in¬ to San Francisco. And that is
only
crease by imagining a new city of
one
machine for one week. We
60,000
people
appearing
some¬ have 137
newsprint machines in
where on the map every 24 hours.
Canada although not all of them
These new people will need sup¬
to
be sure
are
as
wide
or
as
plies of pulp and paper products. fast as the one I
have used as
Against this picture of rising an
example.
population
and
increasing per
In spite of major increases in
capita usage, Canada's forest re¬
newsprint capacity since the war,
serves take on great
importance. it seems to be a
steadily shrinking
It is fortunate—for Canada and
percentage of total Canadian pro¬
for the world—that this potential
duction. Newsprint production;in¬
for growth exists for as I have
creased by about one-third be¬
said; pulp and paper is in many tween 1946 and
1951, while the
ways the basis for industrial de¬
production of pulps of many kinds
velopment and a raw material of and
qualities rose by over;60%.
democracy.
J
•«
In this period Canada became the
Today the pulp and paper in¬
largest exporter of pulps > in the
dustry is Canada's largest indus¬
world, and in 1952 over 1.8 mil¬
try, Here in the United States you
lion tons of pulps went to the
have a great and growing pulp
U. S. That total represents only
and paper industry.
In absolute
about 10% of total U. S. pulp sup¬
terms it is larger than the Cana¬
dian industry—in fact about Vh ply, but it is important to the
maintenance of the high levels
times as large in volume of pro¬
of pulp and paper consumption
duction. But in relative terms, it
is less important to the American in this country and is the sole
In

,

substantial additional production.
But it is now clear that the Cana¬
dian forests are not inexhaustible,
and

I

am

pulp and
a

glad

to

that

say

the

industry is taking
leading part in forest conserva¬
paper

tion.

Increasing Rate of Paper
Consumption
I

perhaps appear to be
the size of Canadian

may

laboring

forest resources, but the point is

important
there

in

for

has

been

recent

years

major shift in
the world wood supply picture. In
many countries demand for forest
products has caught up with the
rate

of

forests

forest
were

during the

a

growth

European

seriously

overcut

and postwar years.
In the countries of Northern Eu¬
war

rope, where
lent
forest

utilization
about

they practice excel¬
conservation,^ wood

appears

in balance

to

with

be

just

the forest

growth. Here in this country great
and successful strides are being
made

to

increase

trees, but

your

the supply of
demands for wood

•An address by Mr. Fowler In
entitled "Canada—Nation

pew York

on

the

a

series

March,"

City, March 24, 1953.




serious decline in Lank

business and investing in it.

a

On

Dec.

31, 1945, at the end of not decline as much as they did
World War II, commercial banks in
by-gone periods of panic and
had far more in the way of in¬ Depression, in the past, ever pres¬
vestments than they did in loans. ent
danger of
runs
on
banks
Since
the

then,

greatly intensified the reductions

situ¬

ation

outstanding
bank
periods of depression.

has

righted

m

itself,

and

exceed

the

As

a

derive

larger
proportion of

ber

of

deposits.

During
early

Federal Reserve bank

a

bank

unless

a mem¬

the latter

could

discount with the Federal Reserve
bank certain limited types of loans
made by the member bank. Todayj

than

from

Federal

a

invest¬

their

so

could not advance cash to

their gross in¬
come from

do

to

cash

into

ready for possible large

thirties,

much

loans

be

upon

banks

the disastrous period of the

a

they

loans

withdrawals

result, banks

now

to

as

There

pressure

of

managers

convert

in¬

vestments.

tremendous

was

today
greatly

loans

in

loans

Shaler Stidham

ments. During

to

the last several years

Reserve

position where it
member

a

bank

is

in

a

loan money

can

bank

practi¬

upon

when loans cally any of its assets except for

rising sharply, the average
rate of interest earned on them
also increased to a marked degree.
were

real
a

This

estate.

will

member bank in

that

mean

future

period
of depression will not feel that it
a

the average rate earned will have to call loans in order

For 1945,

business loans by central

on

the height of land on
watersheds draining into the Artie

fertility, of the commercial forest
area which
supports your great
pulp and paper industry in the
Southern States, is growing trees
which cannot at present be har¬
vested economically.
much

same

beyond

and newspapers; and

addition,

use

as

city to raise cash, knowing that instead
Philadelphia
commercial banks it can go to its Federal Reserve
It is fair to say that consump¬
was
1.95%, whereas for 1952 it bank and borrow by pledging its
tion of pulp and paper is both
was
3.28%.
The substantial in¬ loans and/or investments as se¬
Ocean. Roads have had to be built
a
creases
in the volume of loans curity. This should
good measure of modern eco¬ to reach these
go a very long
pulpwood stands;
nomic .development and also a and wood is cut and hauled many outstanding, coupled with the very way toward preventing such a
prerequisite to improvement in miles
appreciable gains in the rates of downward spiral in loans as* we
by thick to be dumped into
living standards. In the last 20 the headwaters of streams that interest
earned,
naturally
re¬ experienced in
193pv to 1932. On
sulted in considerable increases in top of
years we have seen a great growth
this, we have the Federal
flow south to the mills. There it

tial.

the equal in size, although not in

In

you

cups

mean

in

by-gone periods of panic and depressions, since
there now exist factors which have a definite
tendency to hold
up volume of loans. Explains differences between lending to

factual

the

for major products in volume are
and newsprint and pulps. But, in ad¬
fine
the dition, the mills produce

these

in future will not

sions

world.

story

needs

a

lending by commercial banks since World
War II ended, and finds need for additional working capital
basis for recent increase in bank lending. Says business reces¬

The Factual Story

States consumed about 60 pounds
of paper

ex¬

is

be

to

buyers of U. S. goods in the

them

of

world.

area

withal

Philadelphia National Bank

Mr. Stidham reviev/s

where¬

growth has been spectacular. At
the beginning of this century the thousand varieties of pulps, papers
and
paperboards, and specialty
average
citizen
of the
United

major forest
the

country. Thus not only will
receive commodities you need

but also we will obtain the

growing rapidly.

are

of the

resources

potential

production

Vice President, The

exports to

our

wrapping paper, tissues,
paperboard and many other prod¬
Here in the United States, the ucts made from cellulose. Between

Canada

one

substantial

a

increase

world's

know

that

such

By SHALER STIDHAM*

Canadian exports
of

by saying that there are
some 90 pulp and paper companies
fibre are growing at a great rate in Canada operating 130 mills in
also.
Only in Canada is there seven of our 10 provinces. Their

paper

you

should

has

but I will

avoided,

cannot be

all

about 35%

your

products, Mr. Fowler points out importance of Canada's
huge forest reserves in meeting world's demands. Points out
there are 90 pulp and paper companies in Canada operating
130 mills, producing all grades of paper, and says this devel¬
opment is in response to consumer demand. Notes industry is
entirely conducted under competitive private operation.

paper

/

of

23%

and

for wood pulp and

Stressing the rapidly increasing demand

Bank Loans

billion. Its exports
will be close to a billion
and will account

dollars in value
for

'

'

Piospecls for Commercial

output is $iy4
this year

By R. M. FOWLER*

;

9

Thursday, April 23, 1953

...

(1746)

the

This

spite

on

serve

terest

rise

in

operating

gross

the

in

District, whereas in 1952 in¬
on loans accounted for 53%
of

Insurance

Corporation,
will help

existence of which

to maintain confidence

the

depositors

on

of

the part

member

a

^N^ank and thereby tend to prevent

J
income of the
Federal Re¬

Third

of gross income.
Some

the

total loans amounted to

of

24%

banks

Philadelphia Deposit

accomplished de¬

1945, earnings from in¬ of
v

In

terest

but

was

sharp

a

costs.

the

of

profits

banks.

a^rtrsbr for

the withdrawal of de¬

posits.
During the late thirties and the
early forties, some students argued
that bank loans had been perma¬

economic forecas¬

nently relegated to a position of
that interest rates will much less importance in our over¬
all economy. They failed to real¬
decline somewhat a year to two
from now. Even if the volume of ize that the outstanding volume
our

ters argue

should remain

of

loans

during the late thirties
unusually small because of
which no longer prevail
duce the gross income of banks. Let today.
First of all, a large num¬
outstanding loans

present levels, a decline in the
interest rate would, of course, re¬

at

us

suppose

that the forecasters are

was

reasons

ber of businessmen eould not for¬

correct and that interest rates will

get that their banks had

decline in the years to come. We
would still like to point out that

them

talking about the soprime rate of interest, rep¬
resenting
the
interest charged
class "A" customers, such as the
Philco
Corp.
Customers
other
than class "A" concerns have al¬

their

they

are

called

ways

been charged more than the

for

time when
assets

in

these

of

a

they had to sacrifice
order

them into cash.

tion

pressed

payment of loans at

A

to

convert

goodly propor¬
deter¬

businessmen

mined- that they would henceforth
operate their businesses in such

a

fashion that
to

rely on

they would not have
bank credit. Secondly,

During the past sev¬ the decline in the volume of busi¬
in
eral years when the prime rate ness -i and
commodity^ prices
moved upward, the rates charged during the early thirties produced
non-class "A" borrowers were not a sort of shell-shock among busi¬
prime rate.

to an equivalent degree.

nessmen

arid

Therefore, it is reasonable to ex¬

luctance

to

pect that as the prime^ rate moves
downward,
there
will
not be

expand

moved up:

even

a

their

in

corresponding re¬

be

those

aggressive and
of operations,

rate

cases

where

bank

equivalent reductions in the rates financing would have been readily
charged non-class "A" customers. available merely for the asking.
Furthermore, the Federal Govern¬
Effect of Business Recessions on ment had entered into the loan¬
Bank Loans

ing

business,

and

granted many

loans that banks would otherwise

businessmen are of the have made.
opinion that the volume of gen¬
During World War II, we had
eral business will fall off some¬
price controls in the face of a
source of supply for many of your
economy than the Canadian pulp
time in 1954 or 1955. What will
sizable increase in the supply of
and paper industry is to Canada. important converting mills. In ad¬
happen to the volume of business
money.
The result was that ci¬
Among Canadian industries pulp dition, the
production
of
fine loans outstanding in that event?
vilian businesses required far less
and paper stands first in value of
In order to even make a guess as
papers, wrapping papers, paperworking capital to conduct a given
production, employment, total
to the course of future events, it
volume of business than would norboard, tissues and specialties has
wages paid, and by a substantial
is necessary to glance at the past.
amount first in capital invested. increased
mally have been the case. Manu¬
just over 40%
since
There is every reason to believe
It is the largest industrial buyer 1946. These products are gener¬ that bank loans in the future will facturers found that they could

of goods and services in the Do¬

ally excluded from international

minion; it

trade

uses one-third of all the

electric power

generated for in-

by effective tariff barriers

Continued

Many

*An

Sixth

address

Federation

on

page

32

by

Mr.

Stidham

Annual Convention *of the

of

Financial

at the
National

Analysts

Soci¬

eties, Philadelphia Pa., April 14, 1953.

persuade wholesalers to pay much
more

rapidly

than

Continued

in
on

normal
page

32

Number 5214

Volume 177

...

construction activity and the fact

Brick

Syndicate Mgr.

that

For Paine, Webber Go.
has

Brick

John

been appointed

syndicate manager of Paine, Web¬

& Curtis, 25 Broad

ber, Jackson

Street, New York City, it was an¬
nounced

W.

Mason, "

aging

municipal securities. How¬
two-thirds of the gain this
year was in corporates, in contrast
to one-half a year ago. Holdings

April

Ex¬
.

transferable, and the

Mr. Brick, as
syndicate
manager, will
work directly

36.8%

and

holdings of

cor¬

will

The

000,000

heads

were

13.4%.

expire

chases

Southern

The

$105,435,000

of

000

subsidiary
sys¬

to

Co.; Georgia

made

were

assist

to

companies

same

in

cents to $1.18,

September,

1947

operations
paid its

and

quarterly dividend in March,
Since that time it has regi-

1948.

larly paid quarterly dividends oh

ditions to their properties. *

its

common

of

20 cents per share per quarter

The

' - ■

Southern

The

of

companies

utility

Company furnish

has

elec¬

stock; the current rat'>

prevailed since June, 1949.

J.

Lewis, partner
in

of

charge

Brick

John

Under-

the

(INDIANA)

Paine,

of

Department

writing

Webber, Jackson & Curtis.

and Subsidiaries

Mr. Brick was as¬
Kidder, Peabody &

For 29 years

with

sociated
Co.

and

Co.

to join W. C. Langley &
went on loan to

ago

the

Mr.* Brick

Bank

International

struction

Financial position

Recon¬

for

strengthened further

in

Development

and

with the first bond is¬

connection

Report record sales and income.,.

he

when

there

syndicate manager
resigned a year

was

the

by

out

*

World

Bank.

shortage which slowed some of our drilling and construc¬

Standard

the steel

with 2.37 to 1

brought

sue

expenditures in 1952 were for developing new crude production,
increased refining capacity, new pipelines, and improved marketing
facilities. Further expansion in operations will be needed to meet

Oil Company (Indiana) and its subsidiary companies *
strengthened their financial position during 1952. Current assets
were 3.01 times current liabilities at the end of 1952, as compared

record volume

President of
of Mutual

Savings Banks, reports first quar¬
ter increase in deposits is highest
gain in this period since 1947,
brings total deposits to

and

with all these gains, our net
the strike in

6even

of

our

earnings

produced 2
in 1951. But
down. One reason was

our

price ceilings

future

strike also

1945. This

000 in

$1,550,000,000 compared with $1,499,000,-

were

averaged-' slightly lower 5 than in 1951 although labor
costs rose generally.
■'•.*;
,

:

'

->*'

/

President

Association
Banks and

ings
the

M. Cath¬

National

the

of

Savings
President, Dollar Sav¬
Mutual

of

Bank of
City of

New

quarter dollars since January 1, 1946,

FOR

1952

$119,980,000

WERE

$7.81

or

share.

per

amounting to

63-year

of oil

benefits to employees were

year,

117,600 at the end of 1952. The

was

4%. Dividends

were

paid in 1952 for the 59th consecutive year. As

in the past,

this year's reinvestment of profits has increased the
stockholders' equity—to $88.33 per share on Dec. 31.
,

sharply to $204,300,000 despite

CAPITAL EXPENDITURES increased

increase of
our

largest amount of our stock any one person owns is less than 1%
of the total; the largest amount any institution owns is less than

$237,000,000, for governmental agencies.

York,

During the

OF STOCKHOLDERS

NUMBER

or

gasoline and other petroleum products,

on

in

increased, without increasing the over-all cost to the employees.

with $148,7Q0,000 or $9,71 per share in 1951 and
$8.09 per share in 1950. Our tax bill for 1952 was
$92,677,000^ equal to $6.03 per share. In addition, we collected
$123,580,000

1952 numbered 51,440, an

history took place in 1952 as part of an over-all pattern

This compares

taxes

in expanded facilities

1,700 over 1951. The only serious work stoppage

.

EARNINGS

NET

than doubled since

largely due to the investment of more than a billion

industry strikes.

'

to Robert

According

arine,

was

EMPLOYEES AT THE END OF

and

'

•

$1,964,000,000 compared

1951, highest previous year. For

record sales
Prices

sold

finance

production, manufacturing, transportation and marketing.

for

the third straight year,
made, both in total volume and in dollar value.

a

were

expansion and to provide increased working capital.

with $1,801,000,000 for 1951, and have more
and

SALES IN 1952 TOTALED

of $139,000,000

than $80,000,000 in bank loans, to

more

TOTAL ASSETS at the end of 1952 were

caught between rising
crude and products.

capital

expected to be somewhat higher.

CONVERTIBLE DEBENTURES in the amount

we were

on

are

in 1952 to retire

and related

customers in the steel

important,

more

costs and inflexible

were

refineries last spring. The steel

loss of sales to

a

industries. Even

other

$23 billion.

expenditures

cent more than in 1951. We

per

capital

$183,100,000 went for this purpose. Our major

continuing increase in demand for products. In 1953 our

a

total income reached a new high—

our

cent more crude oil and natural gas liquids than

resulted in

over

of sales,

$1,617,000,000...3.7

Gain in First Quarter
Association

before. Our sales trend continued upward—

year

products (in volume) being sold. Largely as a result of this

more

per

National

tion. In 1951,

despite the handicap of refinery and steel strikes—with 2 per cent

Savings Deposits
Show $506 Million
Robert M. Catharine,

a

.

deposits in the
nation's

5 2 8

mutual

sav¬

CONSOLIDATED

ings banks in¬
creased $506,-

THE

INCOME

STATEMENT OF

STORY IN

Retained and Invested in the Business for the Years 1952 and 1951

and Earnings

FIGURES

1950

1951

1952

000,000 during
the

first

quarter

of

Dividends, interest, and other income

record

new

"This
pares

Robert

M.

and

general expenses
shown below.

Catharine

.

the first quarter of any year since
compilation of these figures began

to

creased

with

$199,000,000,
rise

a

of

government

in

PRODUCTION

35,849,657
91,703,000

52,551,000

,

earnings

Dividends

$1,410,349,623

on

.

.

"...

was

also the largest on, record for

this month. Assets

deposit

gains,

kept

pace

reaching

with

$25,902,-

000,000 at the close of March, 1953.
,

t

Total dividends paid
Balance of earnings retained

Earnings retained and

run

holdings

off.

reflects

This

is

slackening

both




lessened

;..

10,563,892

8,502,709

Earnings retained and
at end of year

$

46,870,941

$

73,110,497

945

187,600,000

,168,700,000

?

•

;

,

,548,000

499,500

$1,550,000,000

$1,499,000,000

$1,268,000,000

4,539

4,528

569,000

.

Bulk

plants operated, at

.

the year end

'

31,040

.

,

.

'

4,521
»

*

16,740
138,900

•

.

.

16,180
"
142,000f

103,697,015

,

.

8,462,720

—

invested in the busi¬
$

' *
15,440

854,833,205

$

,

*
•

129,200

Tanker and barge traffic,

102,400

97,850

99,510

117,600

.

116,800

96,090

49,740

46,740

45,000,341

669,562,973

-

„

'..

31,020

"

31,130

PEOPLE

.-

Stockholders, at the year

773,259,988
,

8,724

•

1,106

185,300,000

Pipelines owned, at the
year end, miles.;
Pipeline traffic, million

invested in the busi¬

at

investment

ness

-$

*

9,043

"

TRANSPORTATION

.

$

78,180,000f

95,210,000f

.

at refineries,

barrel miles

.......

beginning of year.r.,
Prior years' reserve no longer required for
ness

In the portfolio, the increase in

mortgage

.

$76.27

.

million barrel miles....

March, 1952. The March increase

$83.00

,

,

,

-

127,400,000

$1,166,000,000
• '
,/

'

the year end. .... . . . .
Retail outlets served, at

\

•

$

1,307

...

Total sales in dollars....

>

$1.7037 in

stock..

183,100,000

\

MARKETING

34,436,449

$

.

dates of distribu¬

equivalent to $1.5187 in 1952
1951 per share on
Standard Oil Company (Indiana)
,

.

fractional shares.

were

end

capacity, •' •
at year end, barrels ,
per day..

.

.

$

$1,272,000,000
'

-

9,194

barrels...,....:.....

' '
■

97,300,000

.

Crude running

.

,

38,368,232

$

Market values
and

Crude oil

148,697,356

,

.

r.

82,370,000

MANUFACTURING

paid by Standard Oil Company

in capital stock of
Standard Oil Company (New Jersey)
—278,246 shares in 1952 and 339,160
shares in 1951 at average carrying
value—together with equalizing cash

tion

$

119,981,438

Extra dividends paid

$

_

$1,496,913,681

(Indiana)—\
>
»
Regular dividends paid wholly in cash—
$2.50 per share in 1952 and $2.25 in
1951.

the year

6,034,002

$

$3,135*

103,700,000

wells owned, net, at

the year end.........
Gas wells owned, net, at

38,731,649
6,102,700

5,410,869

....................;....

*
$

liquids produced, net,
Oil

for

in net

$

Crude oil and natural gas

.

agencies)40,125,708
8,671,862

$9.71
45,000,000 $
„
$3,954*

.

.

barrels...;
•

Total deductions
Net

compared

as

51,122,254

58,031,915

profits taxes..

Minority stockholders' interest
earnings of subsidiaries,. .

in¬

$181,000,000

$1,180,806,361

r

amounting '
$236,814,801 in 1952 and $205,883,-

payments in lieu of

deposits

-i

,

$1,318,000,000
123,580,000
$8.09
41,210,000

$1,559,000,000
148,700,000
.

,

,...........

'

.

Interest expense

they

March,

-

$1,294,419,369

340 in 1951 collected from customers

interest-dividends."

During

"

,

abandonments37,702,958

ments and

did during the
corresponding period of 1952, they
deposited 11% more. Four-fifths
of the regular deposit gain during
this
period
resulted
from
the
receipt of new money in contrast
t«

"

.

Federal income and excess

1947,"
Mr.
Catharine
said.
"These continuing large increases
in
the
people's savings are
a
potent force in helping to preserve
the stability of our national econ¬
omy. Although people
withdrew
7 % more from their regular de¬
posit accounts in mutual savings
banks during the first quarter of
than

Net earnings per
Dividends paid

Other taxes (exclusive of taxes

in

1953

operating
other than those

Depreciation, depletion, and amortization of
properties—
Depreciation...
Depletion, amortization of drilling and
development costs, and loss on retire¬

gain of $418,000,000 for the same period last
year and is the highest gain for

$1,617,000,000
119,980,000
share.. ■ *■
$7.81
:...$
46,870,000
Dividends paid per share
$4,019*
Earnings retained in the
business
$
73,110,000
Capital expenditures.... $ 204,300,000
Net worth, at the year
end..:
$1,357,000,000
Book value per share, at
the year end.........
$88.33
Net earnings

,

Materials used, salaries and wages,

a

Total income

0

DEDUCT:

com¬

with

FINANCIAL

$1,559,046,979

Total income.$1,616,895,119.

figure of $23,1 16,000,000.

-

$1,539,119,806
19,927,173

$1,592,122,143
24,772,976

Sales and operating revenues

1953, to reach
a

1951

1952

yean,

$10,965,000
earnings pe:."

and

$20,232,000,

The company started

the

$163,942,-

1948 to

For the

went from

share from 91

making

in

in

1952.

in

net income

on

of investment firms

group

in

revenues
of Tin
Southern Company increased fro \

year

shares

the

in

(Ga.).

improvements, extensions and ad¬

m.

p.

additional

stock

subsidiary

May 7, 1953.
Boston Corporation

First
a

3:30

last

of

Alabama

Operating

first

subscription

at

lanta

loans

bank

Co.; Gulf Power Co., and
Mississippi Power Co. The pur¬

of

York Time

New

porates and municipals of $3,417,-

sale

Power

rights, subject to al¬
lotment., Warrants are fully
offer

were

end

tem: Alabama Power

shares, not subscribed for by the
exercise

the

purchase

common

the

have

also

Stockholders

since

companies

governments of $9,537,000,000

Stock

to

1953.

16,

short-term

repay

made

new
shares held of

17

each

during the quarter. On March
31, 1953, mortgage holdings of
$11,530,000,000 equalled 44.5% of
total assets, while holdings of U. S.

and

David

per

privilege of purchasing additional

000

vestment

banking

with

record

$14

basis of one

the

on

for

share

at

to

par

of

most

to

Georgia,
to
northwestern
Florida, and to southeastern Mi •
sissippi. Among the larger citi i
MobP .*
on served are Birmingham,
and Montgomery (Ala.), and At¬

Proceeds of the sale will be used

$5

of

stock

common

share,

of U. S. governments rose $94,000,-

in¬

change firm.

shares

additional

value

ever,

coast-

to-coast

fering
at
competitive
Wednesday, April 15.

is offer¬

service

1.0

and

Co.; Carl M. Loeb, Rhoades &
Co., and Wertheim & Co., which
won
the underwriting of the of¬

ing holders of its common stock
the right to subscribe for 1,004,869

tric

Thalmann

Ladenburg,

&

Offer Underwritten
The Southern Company

and

man¬

partner

the

of

some

including

Southern Go. Stock

have

banks

completed
the
build-up of their mortgage
portfolios. The gain during the
first quarter of $299,000,000 was
about the same as during the cor¬
responding period a year ago, as
was
the quarter's rise
of $210,000,000 in holdings of corporate

by

Lloyd

(1747)

The Commercial and Financial Chronicle

773,259,988

Copies of the 1952 Annual Report available on request as long as the supply
lasts. Write Standard Oil Company, 910 S. Michigan Ave., Chicago 80, Illinois

end..:.r......

Employees, at the year

«

"
-

•

• •

51,440

end

♦Including $1,519 in 1952, $1,704 in 1951, and $1,135 in 1950 as the
market value of the dividends in capital stock of Standard Oil Com¬
pany

(New Jersey) on the respective dates

...

fRevised figures.

of distribution.

'

H'

20

The Commercial and Financial Chronicle

(1748)

Coffee Prices?

What About

Higher Interest Rates in Offing

This

Wall Street observers are in
will stiffen. Says any
faster than increase in productivity is

•

agreement about is that money rates

attempt to raise wages

equivalent to

increase in interest rates.

an

...

Last

December

on

Massachusetts

from

of

all

found

almost

Street

friends

Florida

to

Wall

my

bullish

were

on

again to interest rates, these must
a return of in-

and

<A

:

"J

?
■

,

~

In

are

fined

to

con-

those

who

■*

still

lieve

•»

be-

War

III

Babies" which

Impartial

observers

Eisenhower

mjt it to occur.
The

our

and the

resources

resource-

the

that

sion

need

to

as

thankful

are

that

to

will

we

some

of

fulness

our

country

not

occur

kick

may

a

They

ulative

unless

we,

to definite objectives,

course

the

over

adjustments when they

Agree

The only

Interest

on

are neces-

is

What

thing Wall Street now
is that money rates

will

stiffen.

the

increase

This

in

rates

homes

You

due

installment

other

for

able

the

first

time

have

buy

Loaners

ting

of

20

money

3%%
This is

it

have

to

also

are

been

automatically

increases

interest

rates*

interest

yield

of

bonds

important factor.

is

When

good bonds yield little, banks and
trustees

of

loan money more
freely
mortgages; but today the yield
good bonds is increasing. Many

af these

to

bonds

Federal

vast

nontaxable

are

income,

amounts

due

as

headed.^ For 20 years we
have been consistently following
unhealthy policies that induced
inflation,
depreciated
our
currency and threatened to exhaust
credit.

our

We

Although

bank

a

actually

that its rate has not

ourselves

are

We

est

to

only

?i/o<7

navs

in+Pr

3/4%

pays

inter-

buy machinery which
hours

40

paying

more

a

week

is

than

now

runs

really

he

was

paving wnen tne rate was 4% and
paying when the rate was 4% and
his

machinery operated 48 hours
week.

per

ing

more

than

You

already

.

building

costs

..

cause

less

present

must

you

money

Those

than

to

now

who

now

r—-*1
today
8%
paying

borrow

more

and

cars

just

wage

rates

productivity is equivalent, to
increase

in

interest

rates.

most practical solution

to

high prices is to abolish

k°yr, week.

Otherwise,

an

The

present
the

we

40-

must




it from outside

feverish rush to preparedness.

gut

must

we

0f

from

one,

at the

not

is

life

way

their- part.

be

reduced

dol-

Also, that is

Taxes

until

but

forget that

our

threatened,

from

two

not

sources

time,

same

be jost jus|. as completely

can

economic

within

by

as

without.

In

terioration
our

ctrov

will

the

to

g^gssion.

de_

will

means

is

de-

only destroy

but

protect

It

from

economic

not

verv

Seek

from

aggression

fact,

of life>

way

we

deterioration

it

the

which

bv

from

ag-

economic

strength of America that has

sup-

for

allies

our

We

wars.

with

to

fight two

Both

not

problem, but with a dilemwhich
simply means
two

a

ma,

problems
must

the

at

seek

same

find

which

balance

and

will

time.

that

We

delicate

give

the

us

not

expenses

decreased in the

was

period from

deficit of $51

a

billion in 1945 to surpluses in 1947

1948.

and

Defense spending itself was re¬
from $90 billion in 1945 to

duced

to¬

come

past

years.

it

ever,

that does not

We

relief

is

Taxes

high

high,

the

must

of expense. Both

both

better

of

is

down. It's

come

must

revision of

are

be

re¬

must

tax

our

provide the incen¬

better

more,

jobs

more

and

cheaper

Taxes

included

in

the

of

form

living, no matter what
they take, but they are more

destructive
forms

of

than

contribute

amount

$32

of

and

years.

outstanding

unsatisfied

au-

to spend Government

$81

to

bil-

90 days, and
$175 billion of total

be

billion

paid

in

which

will

revenues

in

Must Achieve

a Sound Currency

The first step in solving them
is. to achieve a sound currency.
History demonstrates that when-

initiative

others.

in

ageous, determined, corrective

ac-

tion is taken in time it finally
soeeds entirely out of control and
finishes/ in - utter collapse. The

$10 billion deficit

our

years.

over

anticipated

first half of

the

depreciation

of

dollar has already occurred!

Qf abQut

In addition to deficits The programs and conditions
$4 bmion in 1952i $6 bil_ which this Administration inher-

ij0n

1953

revenues.
jn

1954,

an(j

billion

in

found that the proposed

*ted would have accelerated that

contemp^ted

Stopping that spiral is imperative. C

billions of dollars of deficits in

One essential to accomplish this

we

future
each

programs

the

have

We

of

a

already

next
tax

several

Pace.

years,

Taxes

greatly

structure

that

is

is

to bring

penditures

our

under

Federal

control

ex-

and

at

high that it is adding

the earliest possible time and hal-

tremendously to our cost of living
an<* threatening to destroy the in-

them with our income. This
cannot be done in a minute with

so

we
t-

face

our

"" •"* "nat&Jz&s a&st
n°t

legacy. This is what

today.

sible

one

by

no

in

strength of

.

.

n js far fr0m

But it is

a

means

view

our

too

'

.

late,

of

an

if

we

enough, to make

pretty picture.? progress

are

real

in •'that

and

early
•

and

the

great

country and the

Our; inheritance of

never

makes

our

less

obii-

and

make for efficiency. Haste
waste.

money
a

More

defense

for

is perfectly practical

possible

1

competition?

Competition
It

is

what

to

is

the

has

national

our

est

pride

is

better

more

slogan.

people

Our great¬

imagination,
and
ingenuity

our

sourcefulness

production,

sales

tion.

Let's

all

them

a

and

they

under

will

brightest day

we

in

to

give

whatever

be and

not

re¬

distribu¬

prepare

chance

the conditions may

again

trade.

Ameri¬

and

goods at less cost for
is

of

our

More

system.

can

life

made

see

produce

have yet

if

the

seen

in

America.
An

equally

mental

of

to

our

trade

the

is handled

flourishing

management of our
The way in which it
also

can

bearing

or

and

have

the

bad times.

im¬

an

economic

upon

creation
A stable

is essential to

rency

funda¬

the soundness

and

money

is

huge debt.

good

important

preserve

an

of

cur¬

ever

ex¬

high costs the
available
money
supply,
high prices of everything foster the over-extension of
credit
buy. The present tax system and depreciate the value of the

pression,
makes

in the event that

possible

peace

curtailment

of

defense

government
is

essential

be reduced
ment

If

rapidly as
spending declines.
as

return

we

the

to

govern¬

citizens

as

we

make in government expenses the

people

will

have

the

money

spend for themselves in their

what

way

been

the

spending

or

wasting

—

has

for

and

in

for their

they

their

want

own

much

account

own

for what

way

better

than

the

government can spend it for them.
scale of living for all the

The

people will increase, the demand
for production will

will

be

plentiful

continue, jobs
and

everyone

will be better off.

If,

tures
are

of

-

increased

funds

for

already under

quarters and many
low

if it

appears

-

expendi¬

civilian needs
way
more

in

many

will fol¬

that the

oppor¬

tunity for effectively doing so is
approaching. The planning divi¬
sions of several governmental de¬

accomplishment. partments

are

preparing for stud¬

greatly

right back
inflationary spiral of re¬
us

the other hand, the debt
managed that it drains the

on

so

savings of the people too rapidly
and in too large amounts so as to
unduly
restrict
credit,
depress
prices and deprive industry of the
funds
and

required for full operation

expansion, then it

can

con¬

tribute to depression. Here
again,
balance and timing are of first

and

concern,

wise

and

handling of refinancing
debt

structure

careful

our enor¬

is

of

the

greatest importance.
Administration Believes in

a

Free

Economy
This Administration believes in
the American
a

free

way

of life and in

market

lieves that
ence

over

a

economy.
It be¬
most powerful influ¬

the years has

accumulated

effect

of

been the

the

indus¬

try and efforts of so many of our
people to advance their own in¬
terests
own

independently and
This

ways.

withstood

wars

way
and

in their

of life

has

political

manipulations and experiments of
all kinds.
our

for

contribute

times.

cent

is

can

pushing

to

them. The people can spend their
money

it

into the

own

government

—

dollar
toward

mous

rapidly as1 possible the savings

Plans

direction

fear

we

panding level of employment and
sound prosperity.
If the debt is
today so managed as to increase
unduly

tough

impos-: start at once. Fear and indecision

vigor and resourcefulness of
people.

ance

do

and the

own

goal

sev¬

some

spending. It
that, as government
ever currency deterioration has expenses are brought under con¬
started it tends to continue at an trol, as waste is
eliminated, and as
ever increasing rate,
the faster government spending is gradu¬
the further it goes. Unless cour- ally reduced that taxes must also

We were
h£mded
a
proposed
budget for
next year's expenditures in excess
of $78 billion, which involves a

1954 and future

in

^

conditions

all

are

But

portant

goods for all the people.

cost

times

eral lines.

be

sys¬

people and for the mak¬

more

ing

be

can

opposite

tives for the creation of
for

no

taxation,

addition there

In

to

and

that

mean

too

and

radical

tem

of

matter of timing geared

a

duced.
a

way

stand

must

Just

to reduction

too

easy

excesses

present

far

anticipated.

simply

no

is

along the line. How¬

from

which

balance

a

fiscal

our

all

highly competitive

are

down

where
plant capacity has been
recently so greatly increased will
require real sales effort and bring

That is what America stands for.

should

take

great

confronted,

are

should

under control.

true.

g

by

and

American people must

do

That is what we must
gether, but only as
always preserve and always pro- obtainable.
There is
tect. Confronted with a crisis, we
to

a

taxes,

matter of my own

where the

in Korea

war

inherited

obligations

This is

(the increase,-in-hourly

of

every

over

s

more.

Any attempt to raise
faster than

be-

home,

a

buy

,

costs

build

or

now
were

.

,

muc

pay-

for mortgage money

when

.

are

at

this

have

funds

now
now

billions

maturities in less than five

have

who

Of

matures

there

manufac-

have

and

involves
a

necessary
military preparedness we
in the mdist of a feverishly for defense against outside attack threatens to stifle
initiative, ex¬
improvised program of vast mili- while always continuing to main- pansion and
ultimately jobs.
A
tary spending. We found that a ttain our economic strength at better
balanced
system
is
re¬
so-called police action had turned home. Those are dual problems quired.
into a real war.
and
must
be
The reduction of taxes, more¬
simultaneously
We
now
find
ourselves
with solved,
over, is one of the best guarantees
over $267 billion
in total indebtwe
have against the fear of de¬

purchasing

A

That
more

and

increased, yet thorizations

power.

manipu-

rates

is
only narrowly removed from
printing money. As a result of
vacillating
foreign
policies
we

to you it has increased in terms of

turer

printed

edness.

you

100

lars of current indebtedness which

lion

tell

spend.

concern.

plied the sinews for ourselves and

artificially

interest

our

for

will

the

from

started with to approxi-

have

lated

the

i
*1
j
Interest u™™
Payments Already «• i_
High

shrunk

our

mately 50 cents today.

to

constructing super-highways.

that period

Over

has
we

issued

being

were

we

directly

found

an

for which

consequences

cents

get-

have

the turn and avoid the inevitable

"choosey'; about their loans.

The

Our deficit
same

a

immediate

..

aggression without regard to cost

It is not too late to make

turned.

dollar

waiting to see what the future
will bring forth.
This hesitancy

on

one

that

do

They are turning down many applications which they would have
accepted a year ^ ago. Banks are

also

com¬

obtain

so

we

the years.

jn

treading a dangerous path,
from which we have now

this,

years

able

is

investors!

to

for

been

of

Here

causes.

small

U. S. Government Bonds.

you

to

over-building

and

now

be

government

in

and

the

or

are

will
the

news

good

to

permanent posture of de¬

correct

Have Been Treading a Dangerous Path
been

upon

bond

to

program

event

any

preparing to preserve?
our lives?
No.
What

hurriedly
Is

it

hastened to protect

_

one.

Rates

re-

sary.

traces

be the

with

For several years past we

buying,

military spending.

big

a

in

that is

it need give us no fear.

are

deal

and

boom

of the satel-

one

and that China may

sue-

see

else.

someone

further feel

agrees

of

rate

have

We

plete

is

and

All

re¬

always readjustments taking place
any active economy, sometimes
t0 the advantage or detriment of

such
the dismal days of depres-

very

Malenkov is not Stalin's real

lites

fine

one

lion in 1947.

actual

an

an

the

truce in

a

Korea,
truce, will not
early important influence

even

have

President; and are ourselves, we American citizens, we are really trying to preserve
glad
for
Stalin's
death.
Wall fail to have the strength and forti- is our American way of life. That
Street,
however,
believes
that tude to avoid the excesses of spec- ,is what we have fought for over

change

Department

issued

port and is engaged in further
Deliberate, not timid, carefully study. Many associations of busi¬
hundreds
of complaining letters
planned objectives, with price tags ness, farmers and labor organiza¬
have come to me.
Most of these
attached and efficiently pursued tions should and will be willing to
refer to the price of coffee.
Let both for ourselves and our
allies give active thought to alternate
me
say
that the price controls will
provide a posture of defense plans that will best serve the in¬
were
taken off of coffee to help
of their own
against
outside
aggression
that terests, not only
our
"good neighbor policy"
in can and will be maintained over
members, but of all the people.
Central
and
South
America. whatever period
may be required.
therefore, when you pay more for
Cites Postwar Reductions
This will protect us more ade¬
C(jffee
just remember
you
are
After the last war we decreased
quately from threat from abroad
truly helping millions of very
than blowing first hot and then the rate of total government ex¬
<
nponm working on the coffee
P001 people worKing on me conee cold in extremes of emotion as penditures in just two years from
we have been
plantations.
doing since World $98.7 billion in 1945 to $39.3 bil¬

page

that

are

uncertain

and

They

cessor

Commerce

■

Roger W. Babson

future.

The

already

lifted,

proper

they fear would suffer by peace.
confused

has

$17 billion plus about $5 billion
gations both immediate
and fense for America.
of foreign aid in the same two
planned is staggering, but not yet
Balanced Budget and Taxes
years.
We have no such tremen¬
beyond our powers of control,
is
more
reductions
to
Control of our expenses is vital dous
one
group and sometimes to an- Accumulations of 20- years-cannot
contemplate
likely
than other>
to our success, but that is only or gaps to fill now.
But depression,; No;
Our plant is
We be removed in 90 days. It will
when
Stalin cannot
preserve our way of life
take rigid self—discipline and de- part of the task. Equally impor¬ already geared to increased civil¬
lived.
They through another long, deep-de- termined action. But over a pe- tant in
balancing the budget is ian production.
h o 1 d
"W a r
pression and we must never per- riod of time, if we resolutely hold the amount of income we have to
Full production in many lines

r *$4
*

the

fact,

bulls

been

"No Reason to Fear Peace"

7,

4

in

the way.

on

on

'

r> ,

Since

s

bearish.

now

f'Mtyif*

%.

i

from first

done

ies.

or

Continued

the

sentiment

it too!"

eat

be

a

War II. Talk of

Peace

outlook,

A

"Wi

"We cannot have our pie

flation.

Today, owing to the Ko¬

-

^

increase to check

stocks

rean

.,

curtail spending which would reI suit in unemployment.
To refer

way

my

this

can

minute, but it is in the cards and

prices.

have

controls

the

By ROGER W. BABSON

Neither

to say another

me

retail

about

word

Mr. Babson contends only thing

brings

Thursday, April 23, 1953

...

It will overcome all of
of today.
It is be¬

burdens

of the accumulative
desires
ambitions of the vast
number of our citizens to
so live
their lives that
by their own
cause

and

the

en¬

deavors they
continually advance
their own positions that
we

what

we

are

today.
•
■
We are in good hands as
long
as the
great American consumer
are

Number 5214*..The Commercial and Financial

Volume 177

is. free
and

from

will

restraint

decide

lar

and

itself

devote

must

creation of

the

to

However, freedom for
for

or

in

still

Rule

is

fundamental

relations.

human

Freedom for

the citizen involves equal respon¬

of

sibility

the

himself to
fills it.

citizen,

that he

see

He must

for his

use

each

for

wholly ful¬

only to
the extent that it does not trample

rights of his neighbor

the

upon

and enhances

the

common

good.

responsibility of

It is the

at

Hay den,

*

John

Editor

or

Gubeliis

A.

Bawl Street Journal,

lampoon

foibles

Wall

of

Bawl
are

Street

members

Ingen

Dempsey

&

Co.

Glassmeyer of

Blyth

Co.

&

and Raymond D. Stitzer of
table

Abrams,

Inc.

the

Equi¬

of the

has

daily"

reputation

Day, the

aquired

a

authoritative

the

as

feature

a

Club Field

Bond

"annual

as

Nation

wide

-

interest

circulation
and

Adrian

which may

states,

the

of

the

be sent

W.

T.
of

Jr.,

B.

Ervin

per

Fenner

from

as

of

has

Merrill
Beane

&

Ball, An¬
Fred
E.

Coberly, Robert

Erlandson, Frank J. Fitzgerald,

and

office at

William

Reed,- Inc.,
Sweet.

G.

Savage have be¬

209

All

South

La

Salle

previously with

were

-uttenden\& Co.

most recently

Lynch, Pierce,
and

his

prior

Kalb, Voorhis Admit

associations have included Court-

the

Kalb, Voorhis & Co., 25 Broa<l

is

ley, Ltd., Los Angeles; the Mennen

Street, New York City, members

Company, Newark, N. J.; the con¬

of the New York Stock

office

troller's

Despite inflation,

the

of

Treasury

nomial

Altha

Mesirow

Department and the National City

one

copy.

Exchange,

May 1 will admit Celia L. Kalb

on

and

Bank of New York.

a

E.

Bryngelson,

,

Arnold J:

New

edition

1953

Cubellis
with

been

Chronicle)

—

come^ associated with Waddell &

Street.

Clinton
Mr.

35,000

Circulation

price remains at

dollar

to Bawl Street Journal Chairman

well

as

Massie

M.

York Trust Co.

advertisements,

than

more

countries.

Manager

May 8 is the deadline for sub¬

cartoons

to

brought orders for past issues

from all 48

otherwise expressed.

and

Charles
manager

of

resident

as

Financial

Bawl Street Journal has lifted its

journal of confidential opinion not foreign

mission ©f stories,

appointment

The

Butcher, Ray C.

Exchange, announce

the firm's Newark, N. J.,

the

in

Stock

Cubellis

Securities Corporation.

drew

Co., members of the New

York

18

since 1919

Published

&

ers

Edward

Inc.,

to

CHICAGO, 111.

NEWARK, N. J.—Orvis Broth¬

B. J.

of

(Special

Orvis Bros. Branch

the

of

Committee

Journal

Walter

L.

Van

tributaries.

its

and

customs

denizens

the

of

Street

the

of

Other

Many Join Waddell & Reed

Mgr. for

limited

partnership.

to

every

citizen of this country,

••■■'J

of business

farmers, labor and all of

men,

and

this freedom

advancement

own

annual

be

must

jealously guarded and carries with
it corresponding obligations. The
Golden

are

of the

issue

indi¬

an

nation

a

ama¬

the

of

for the benefit of the forthcoming

things
in vying for his favor.

at less cost

vidual

world

and better

more

Shreye
Co.

Digest.

financial
invited to do their stuff

humorists

teur

and

punsters,

Jokesters,

inventive

genuity of all America is in com¬
petition for that consumer's dol¬

&

Straley at the Investment Dealers

prices he is willing to pay.
means
that the productive
power and the in¬

That
and

Stone

Seeks Contributors

21

(1749)

Wickliffe

Bawl Street Journal

he

what

will buy and

he

when

buy,

what

artificial

freely

can

Chronicle

you

here today in
dom

to

accepting your free¬
the responsibility
with it; If the American

accept

that goes

people really want stability they
must all contribute to it, in the
prices they charge, in the wages
they

demand

in

and

-

-

everything

/

1951

1952

d'

ih

.

■

that they do.

They must exercise
self-restraint from making quick
turns
and

the

to

detriment of

in

promote

sible the

every

way

$459,269,626

24,457,855

22,416,813

Profit for Year

pos¬

7.98

Preferred Dividends ($3.25,per

good of all the people.
Plan

Quoted

11,181,923

Eisenhower

President

3.50

Profit Retained

12,398,072

12,367,506

All Taxes

50,001,972

said

in his great

speech in Washington
last Thursday noon:
"The

peace

founded

seek,

we

nations, can be for¬
tified—not by weapons of war—
but

by wheat and
and

this

"This
ask its
tions

155,159,360

127,708,733

204,338,216

188,053,759

...1r

language
in

arms.

ready

CHIEF PRODUCTS
Division:

Farm

Graders, Motor Scrapers and Motor

to

fund

a

for

world aid and reconstruction.

The

General

of this great work would
help other peoples to de¬

purposes
to

velop

monuments

to

this

West

and St. Thomas,

new

from the President's letter to

shareholders:

expenditures for

"When

the world."

will

have, since 1946, expended just under

this

program

are

is

what

nothing

all

we

want.

It

,

to

fear, nor is there
for depression.
Ad¬

reason

fluence

As this is

of our money, attain
that nice balance between achiev¬

-soundness

does

ing security and handle our fiscal
/affairs with wisdom, America can
look forward to good jobs at good
living.

We

greater

can

based

damental

have

a

opportunity

and

for

than

we

have

known

capital

This investment will have important in¬

Report

not appear

are

Department

only slightly below last

11 25 South 70th St.,

we

Milwaukee 14, Wis.

fun¬
r-

;..

rJ

■

7 r

security
in

many

President

to

The

Financial

RALEIGH, N. C.

—

Chronicle)

Herbert E.

ALUS-CHALMERS

Henry has been added to the staff
of Bache

&

Co., 126 South Salis¬

'

Wages and

:

Joins

salaries

Harry Jt Wilson

(Special to The Financial. Chronicle)

CHICAGO,
Arnold

is

A

taxes

bury Street*

*

be obtained

Shareholder Relations

favorable for setting new records. However,
February

may

by writing Aliis-Chalmers,

Bache Adds to Staff
(Special

i

Copies of the Annual

begin 1953 is approximately $325,000,000.
written, the overall economic outlook for the year
as we

years.

;

uv

$100,000,000 on

think we have a 'fighting chance' to
approach 1952- results for the complete 1953 period. In any
event, '53 promises to be an interesting and active year."

with- m

individ¬

ual and collective future

.

on

of facilities are finished, we

operations in 1953 and future years."

"'year an<l at this time

stronger

sounder

on

conditions

.

expansion

sales for January and

pay and real advances ii? bur scale

economy

and

.

on our

"Backlog

v

commitments

present

modernization

justments,, yes.
But not depres¬
sion. So long as we maintain the

of

Pittsburgh, Pa.; Boston, Mass.; Gadsden,

England; Essendine, England; lachine, Quebec

Ontario

health.

and

any

Springfield, III.; La Crosse, Wis.; Terre Haute, Ind.; Cedar

would be these: roads

war

Peace

Allis, Wis.

Ala.; Oxnard, Calif.; Foreign: Eling,

ready, in short, to ded¬
icate our strength to serving the
needs, rather than the fears, of

is

turbines; electric

gas

Plants:

schools, hospitals and homes,

"We

Steam, hydraulic, marine and

motors, controls; steam

Rapids, Iowa; Norwood, Ohio; LaPorte, Ind.;

trade, to assist all
peoples to know the blessings of
productive freedom.
'The

Motor

pumps,

and fair world

kind of

Division;

Tractors,

Crawler

Wagons.

condensers, transformers, switchgear, regulators,
blowers, crushers, cement kilns, mining and processing machinery.

generators,

undeveloped areas of
to stimulate profitable

the

the world,

Machinery

Harvesters,

Implements,

Tractors,

Tractor

disarmament

and

25,425

to*

people to join with all na-:..
devoting a substantial

by

food

29,989

in

percentage of the savings achieved

be:

2,595,102

.

is

government

36,650

2,955,339

Outstanding (shares)

Number of Common Shareholders

challenge

.

.

Common Stock

earth.

on

needs that

are

37,027

Number of Employes

words that translate

are

world

315,762,492

Total Liabilities

cotton; by
by meat and
•

"These

359,497,576

by

by wool;

into every

147,331,381

Total Assets

gpi|

Jl
Hi

by timber and by rice.
"These

135,018,337

Net Worth

effort among

milk

56,314,892
1

Wages and Salaries

decent trust and cooperative

upon

8,890,028

4.00

Per Share of Common Stock

•

As

1,159,279

share)

Dividends Paid to Common Shareholders
Eisenhower's

8.19

877,860

Per Share of Common Stock

long-term thinking and
that is for the ultimate

planning

$516,116,741

Sales Billed and Other Income

others

111.

—

Donald

affiliated

now

retained

$12,398,072]

29%

L.

2%

rafeiltgli

with

yyy.'y'-^

.




10%
mujm1.?

\y

Profit

$147,331,381

.

Harry J. Wilson & Co., 208 South
Ha Salle Street,
Au;
„

$50,001,972

'

:s.r:

j

I

)

'

•-

;

22

(1750)

The Commercial and Financial Chronicle

Texas

Allen

*:■

of J.

Bank and Insurance Stocks

<■

(t

o(

the

Republic

National Bank of Dallas, Texas

branches

new

Bankers

and

etc

revised

April

14,

voted

Thursday, April 23, 1953

...

Vice-President

as

Stockholders

consolidations
new officers.

Rhodes

of April 14.

as

News About Banks

the election

announce

unanimous

By

on

ap¬

H.

This Week

proval of

E.

—

JOHNSON

Insurance Stocks

a $7,500,000 increase in
capital and surplus, according to
a
joint announcement issued by

Milton M. Bates was appointed

Vice-

Madden.

W.

Edmund

Assistant Cashier of The NaCompany, of New York has been tional City Bank of New York,
supervising Vice-Presof all the com-

appointed
ident

in

charge

offices in Brooklyn effective May 1, it was announced
on April
17 by Horace C. Flanigan, President.
Mr. Madden began his banking career in
1921
pany's

has been with Manufacturers

and

Trust
ttie

Company since 1931 when
former
Brooklyn
National
1

~

Bank

new
new

Mr.
Madden
succeeds
Miller, who has re-

capacity
Walter

his
his

In
In

acquired.

was

R.

signed to become Executive VicePresident of Liebmann Breweries,
lac.

assuming his new poMiller will become a
of the Advisory Board

an

*

of Manufacturers Trust

Company's

*

*

jj

2\

Fales,

DeCoursey

by

'

"

,r.M

Executive

s

have

*

*

•

.

..

negat, N. J. (with common capital
of

$110,000), was placed in
voluntary
liquidation
effective

Street, Brooklyn.

The

Century Club, veteran
organization of The Na-

service
tional
and

City

Bank

City

of New

April

E°°m

hattan.

York

York

Trust

was

York

9..0

ls

*

shareholders of the Second Na-

tional

City members attend-

Bank

PhiladeIphia

of

^pril jd. approved

? with 1,350

'

*

,*

of the bank by

capstock

*

.

th

f $25 m

c

*

Bank

additional

6\vith l99 membe™ of ?^ £hares> par value *10' Under the
Oulrter Centurv Club oresentat plan' rights wiU be issued to a11
toe

first

«

banquet

Howard C. Shep-

year.

erd, Chairman of the Board of
National City Bank and City Bank
Parmorc
Farmers

brief

Trnct
1

Pnmnnnv
Company

rust

address.

moHp
made

Toastmaster

a

a

f^old- the additional shares
Pf record April 14,
purchase

to

the

on

basis

of

additional

one

sJare forShare. Rights sharesexpire
eactl
held,
a
Will

at ?20

of

about

bank,

problem.

construction

for

lias

its

new

*

rr,u

sj:

.

,

.

„

Merced office will be

and
a
new Redding office
at Pine and Yuba Streets.
,

export

products

and

i^eSi curr.en1tly 0a

V1 2f 15 display windows of
Colonial Trust
<r

i

PHILADELPHIA

Pa

-fniLrADLLirill/Y,

fa.

become

Hook

National

Bank

Hook, Pa. (with
$175 000).

The

of

the

First

1

Kleeman, President
of
the idation
banking house, announced that $575 000
was

tribute

to

and

arranged

as

a

has

in

Finland

Colonial Trust windows

until the latter
part of
*

On

of

*

May.

(oar

pSof$250,000.
*

The

as

Aetna

Ohio,

$15,000 by

John

C.

increased

\

,

Fire

and

Today, this office

55,000

serves

National Bank of Chicago, has

an-

nounced the election of Philip L.Butler to the post of Assistant
ally located at 3rd Avenue and Vice-President in the banking de70th Street, this office
moved to Partment.
The promotion was
its present location at 3rd
Avenue made at the meeting of the Board
and 72nd Street in 1947.
For 134 of Directors, held on April 9. Mr.
years
the Bank has served
the BuBer joined La Salle National in
citizens of New York.
Through July, ^49 as an Assistant Cashier.
four
offices
it
now
safeguards Defore going to Chicago, he was
over a quarter billion
dollars, the associated with the Chemical
savings of more than 200,000' de- Ban^ and Trust Company in New
$100

savers

million

on

with

more

deposit.

than

Origin-

positors.

York City. He

,

the

John

D.

eeutive

Butt, Trustee

Vice-President

man's

Bank

elected

and
of

a

for

Savings

was

member of the Board of
Directors
of
Commercial
State
Bank and Trust
Company of New
York
(formerly Modern Indus

trial

Bank)

Jacob

it

.

graduated from

University of Alabama
*

Ex-

Sea-

was

The capital

*

in 1931.

of the Florida

was

announced




by

of

Directors

123.519

2.24

8,651
23,034
9,336

40.7

77,795
43,231

2.03

26,138
32,758

90,298

Fire

17,954

'

"

■

*

•

"

with Newburger & Company 1342
Street, members of the
New York and Philadelphia-Baltimore stock Exchanges, in their
tradinS department.

He

E. W. Smith Co.

was

The

Financial

Corporation

Chronicle)

67,718

2.07

81,931
13,543

90.7

101.934

1.13

75.4

26,438

1.47

87,298
144,019

44.4

312,660

1.59

84.8

214.047

1.26

233,622
22,176

89.8

226,861

0.87

1.56

52.8

0.89
1.95

69,813

34,326

49.2

104,730

1.50

5,156
23,126
28,576

48.9

23,296

2.21

funds

_

..

can

be

47,334

-

...

seen

63.3

51,472

1.41

60.4

34,482

0.73

in the above tabulation there is

of

a

particular

company

are

AND

NATIONAL BANK
Bank Stocks

oi INDIA, LIMITED
Bankers

Head

and

on

Request

^reet.

in

India,

Aden,

Uganda,

land

Exchange

Stock

Exchange

Paid-up

NEW YORK 5, N. Y.

Telephone: BArclay 7-3500

(L.

A.

Teletype—NY

Gibbs,

Manager

Specialists in
L

Pakistan, Ceylon,
Tanganyika,
and

Capital
Capital

Dept.)

Bank Stocks

banking

and

_

£4,562,500
£2,281,250

Fund

£3,675,000

The Bank conducts

1-1248-49

Trading

Reserve

Somali-

Protectorate.

Authorised

American

Members

120 BROADWAY,

Wh^e'

D^onshire

in

Kenya,

Zanzibar,

Stock

Richard A. Kimball have

'

Government

26,

Bishopsgate,
London, E. C. 2

Branches

Laird, Bisseil & Meeds

Chronicle)

W"h

the

Office:

registered

BOSTON, Mass.—John L. Gard¬
ner

to

Kenya Colony and Uganda

March 31, 1953

Members New York
Financial

business

ANALYSIS

17 N. Y. City

Copy

The

the

-i

Two With White Weld
to

institutions

some

inadequate for

Burma,

(Special

considerable

a

among

being handled.
However, the relationship between investment
policy, underwriting and capital position is obvious. Should a
change be made leading to a more aggressive investment or
underwriting position, additional capital may be required.

Alfred I. Scott II, has become
associated with Emanuel, Deetjen
& Co., 120 Broadway, New York
City. Members of the New York

of'The Sfr af^iated

First National Bank of
Fort Worth,

1.61

44.9

28.936

COMPARISON

a

35,772
146.155

65,612
73,210

«Joins Lmanuei, L/eetjen

as

1.37

85.8
58.7

handling two to three times as much as others for each dollar
capital. As a general proposition those institutions with large
common stock holdings have followed a more conservative under¬
writing policy.
Such considerations do not necessarily indicate that the capital

rm9nllj

Stock Exchange,

0.83

of

Bachar has been with J. A. Hogle
& Co.Y for several years. ;j
'

28.160

ferences in the amount of business written with

been

D. Bachar, President, William L.
^lea> Jr. Vice-President, and
Charles C-. Nicola, Secretary. Mr.

•

0.67

56.6

the different companies in the percentage of
capital invested in common stocks. Likewise there are wide dif¬

to engage In the securiHesbualness?"e„Gerald

e

1.17

135,977

68.1

variation

formed with offices in the E & C

I*„

15,397

90.1

Security Insurance.
10,549
Springfield Fire
* 36,535

depart"

has

40,272

70.7

181,842
19,202
22,417
53,321
14,697

62.7

As

to

1.56

1.30

51,470
10,089

Insurance

St. Paul F. & M.-___

for-

Empire Securities Corp.
(Special

74.6

82,076
14,807

Phoenix

Providence Wash.

Na-

id°nal Bank of Jacksonville,
Florida was increased as of April
9> from $1,500,000 to $5,000,000 by
a stock dividend of $3,500,000.
The Board

52.6

86.0

196,403
Home Insurance.... .169,803
Ins. Co. of No. Am.. 260,147
National Fire
42,007

Markman

Cap. Funds

29.052

Hartford Fire
Joseph

Bell

Leichtman, President.

—

American

Great

< 000)

42,778

90,844

Glens Falls

Hanover

Funds

55,231

Ins.....

Association....

representative,

*

Per Dollar of

__

Fireman's Fund

rities

^President,

Wright,

Premium

Wrftten

(000)

201,821
Insurance..
33,930

Federal

DENVER, Colo.—Empire Secu¬
„

N't Prom.

Capital

Surety...

Insurance

Continental

stock dividend

a

'U of

Stocks

21,277
30,874
Camden Fire..13,212
Boston

of

its

Consolidated

Common

49,747

___

Ins

American

ita25thAnniverra£°fn thattefgh- Ch^rman'of'thrBoidTfTrSaii^Huilding
borhood.
over

Insurance

American

U. S. Fire
Bank

as

Capital
(000)

1 ' ment of
mer1/

*

National

of March 30, from $100,-

of $5°>000-

Office of The Bank for
Savings in

$

Third

Circleville,
000 to

April 16 the Third Avenue

57 500

of

undivided

capital

*

shares of

stock

surplus of $675 000 and

significant economic
The display will remain

progress

m... f.

people

Stks.

nnrW

$10 each)

their

to

the

caDital

a

this connection it is

some

Funds

has

National

this

seems

>

Marcus

Anril

nf

ag

of

now

interesting to relate the capital funds
of the companies to the common stock
holdings and the
premium volume for the year 1952.

common stock of

consolidation

as

In

of

consolidation

Bank, which following the consol-

S.

exhibit

*'

Jos^nh

JOsepn

associated

*
a

view

condition, should the business continue to
likely, especially with the development of
multiple line underwriting, a number of additional insurance com¬
panies may be seeking new capital in the coming year. So far
this year Maryland Casualty and Agricultural Insurance have done
financing.
grow

Joseph Markman With
Newburger & Company
has

stocks and

they accepted.

In

effected of the First National
Bank of Chester, Pa.
(common
stock $400,000), and the Marcus

Company's Rocke- taken nlace
feller Center Office on Avenue of
the
title
of
the Americas, New York.
Arthur

the

which

:

.

most of the companies have substantial holdings of
the rise of the equity market since 1942 has

course

added substantially to surplus of the different companies provid¬
ing an additional source of capital. Nevertheless, many companies
were not in this position and had to restrict the amount of
business

was

.

-

j

*

As of March 31

*

'

,

*

consu^ale. General of FinlanVs sponsoring an exhibition
Einnish
i

Of

common

'OCjtod at 18th Street between L

Markman

taxes,

a similar amount from retained investment
earnings, the total
has probably been less than 100% as compared with a 200%
gain
in premium writings.

one

at

Ho°ver> President

The

matter

a

federal

for

at Merced and the
Redding,
it
was
announced on April 16, by Paul E.
other

„

branches.

overseas

on

offices of

two

As

of fact the underwriting profit
margin,
for a group of the major companies has
averaged less than 5% over the past ten years. This has meant
that after paying taxes the addition to
capital funds from this
source has probably been less than
50% in the decade. Allowing

before

Calif., is

start

^.PV! 7 •
T/
win oe
Randolph S. Merrill who was also divided equally between surplus
Chairman of the
Committee
in and
capi!ai a ^ p u n.
charge of banquet arrangements. am°unt
$250,000 each. This will
Two
hundred
and
twenty-eight increase capital account to $1,new members have been received
250,000 and surplus account to
into the
Club
since
last year's $1,250,000.
A previous item indinner.
Similar events are held cident to the proposed capital insimultaneously in other parts of crease appeared in our April 2
the world in which National
City issue> page 1446.
was

public

National

Francisco,

San

to

greater degree.

financing has been required to provide the needed capital funds.
Several
unprofitable underwriting years have not helped the

*

California

buildings

new

the

*

Anglo

even

coverage to a larger amount of insurable property.
This growth has been so rapid that in a number of cases
the
internal sources of capital have not been sufficient and

shares of stock.
The

an

increased. Also higher premium rates
particularly on casualty
lines have contributed to the gain, An additional factor has been
the natural growth of certain insurance lines such as
extended

under-

an

underwrite

trasts

founding

announced,

and Dallas Rupe & Son, to
the
issue
of
new

pany,

on

increase in

an

is
with

Waggener, First Southwest Corn-

TonTs

$25,000 stock dividend, as noted
in our issue of Feb. 26, page 918.

Ball

,the Hotel Astor, Man-

e

of

Bank

River, N. J. The latter, early this
year, Jan. 30, increased its capital
from $700,000 to $725,000 by a

held

Grand

the

The world-wide member-

°f

New

in

16

of

New

of

Farmers

Bank

Company
on

annual banquet of the

17th

Quarter

First National

the

*

it

made

April 3, having been absorbed by

*

subject

writing group of investment bankers, headed by Walker, Austin &

..

xhe First National Bank of Bar-

stock

been

distributed

accentuated to

to apProval of the Comptroller of
Arrangements,

n

the Bank.
,

now

their

These large gains have come about for a number
of reasons.
In the first place the insurable value
of real estate and property
has grow nboth because of increases in
prices and the new con¬
struction which has occurred.
This is particularly
true with
respect to automobiles where the number and the value have

approval of. the plan by sharethe Currency, in Washington, D. C.

D

Vice-President and Mr.
Executive Vice- r si

Erooklyn Office, at 177 Montague

*

been

our

holders. The plan is

president

busines.

and
the
balance
together with underwriting
profits used to augment capital.
The sharp expansion in premium
writings since 1941, during
which period volume increased on the
average by
over 200%.
has put considerable pressure 011
capital positions. In some indi¬
vidual cases the gain has been close to
400% with the problem

incident to the in¬

issue of April 9, page 1540.
Alfred
S.
Mills
as
Trustees of Warrants representing
rights to
The Bank for gavings in the City subscribe
for additional stock
of New York was announced on were issued and mailed following
A

past decade

growth, for the most part, by retaining earnings. On a
long-term
basis dividends up to about
75%-80% of investment income have

in the capital appeared in

crease

Election of Harold D. Rutan and

Mr.

member

of the plans

the

over

Historically fire and casualty companies have financed

Mr. Bates is assigned to the Over- bank to $50,000,000. Capital and
Division of the bank at the surplus now is $42,500,000. Details

head office.

sharp growth in premium volume

adequacy of insur¬
capital and the capacity of the industry to handle the avail¬

able

seas

Upon

sition,

ance

The

Hoblitzelle, Chairman and
Fred F. Florence, President. When
completed, the increase will raise
the capital and surplus of the

i

President of Manufacturers Trust

has at various times raised
questions about the

Karl

capitalizations

every

description of

exchange

business.

Trusteeships and Executorships
also undertaken

ing 1953 and caused considerable
controversy, according to the pro¬

Boom's End Near,

fessor.

Says Marcus Nadler

,

Economist

whether we
downward
trend will develop in not
predicts

peace

business

not

or

irrespective

corpora¬

offering

timing
tune

Addressing the New York State

as an

this

of

considered

that

and

caused

it

.

an

ernment

holders

of

outstanding

extent

un¬

among

whole

long-term

end

be

support

That the public debt

well

obligations

boom

some

to

which forces the
support prices of

farm products at 90% of
parity, food prices would be lower
many

than

they

instalment

only

there

has

been

abuse of bank credit and under

no

known, was the opinion

loans

of

Outside

are.

now

There

at

need

therefore,

adopt

to

ence

management

debt

.

time

a

such

extent

recent

operating

management

will

attributes of

curities

as

government

Motor

problem of the effects on busi¬
of an improved international

ness

situation and the con¬
tinued anti-inflationary credit and
debt management policies of the

and

relative stability.

last

few

ury

(Special

Daniel

weeks, he added, Treas¬

obligations

have

proven

to

The

Financial

GREENSBORO,

During the

Lewis

Building,

to

&

have

C.

Co.,

added

—

Leslie

Babcock, Jr. to their staff.

be less marketable and less stable

...uppliertothe

the 1952 Annual Report:

monetary authorities.

easing

A truce in Korea and an

the international

of

sions will not

business

Dales

materially alter the
he contended.
is hasten the enl

RoadAStar
trailer

it will be of shorter duration. Even

change in the interna-

a

tional political situation
bound

was

the

to

to

come

factor

and

day

as

stated

the

In

Nadler,

and

was

stimulated further by

high

in inventories

at

We

.

.

years,

and replacement business represents

tion of

timing

our

sales force

we

reduced

.

worthwhile service to the
the

our

opinion

of

benefits

coopera¬

total investment

to

customers, to

our

pliers and the

It

by corporations.
to

$122,115,599

Sales for Commercial Use

Requirements

40,694,0-15

<

withholding

Federal

of

Speaking

,

the

e

will

boom

«nd.

tc

to

come

soon

an

This

policy led to a curtail¬
availability of Reserve
Bank credit, to a reduction in the

,

★Copies of the 1952 Annual
Report may be obtained upon
request simply by writing to:

Excess

The Secretary
Fruehauf Trailer

Detroit 32,

Company

Michigan

$

volume

total

the

de¬

demand

of

Share of Common Stock

Share of Common Stock

......

.

....

Share of Common Stock

porting member banks in leading
cities at the end of March, 1953
$3,846 million dollars smaller
A credit

than at the end of 1952.
restrictive
but it

policy works slowly
invariably achieves the de¬

sired

results.

in

business

Should

ensue

international

by a moderate
unemployment, one

that

the

Reserve

result

of

develop¬

be

it

nied

setback

a
a

political

should

ments and

as

accompa¬

increase in
may
expect

authorities

will

change their credit policies in or¬
der

to

keep

possible

on

New

The

-

334%

business as far as
fairly stable level.

Treasury Bonds

offer

by

30-year

billion of
amount

G

a

bonds

new

in

Treasury

the

bonds
cash

$1

and

exchange

which

of

raise

to

a

for

similar

F

will mature




and
dur¬

Detroit,

$2.00

$ 42,705,403

2

.....

to

1

$30.45

1.9

to

1

$28.84

earnings in 1953 under present tax
Federal normal and surtax before be¬

ing subject to Excess Profits Tax. The Company with its United States subsidiaries will
file a consolidated Federal income tax return for 1952. The figure of $4.75 includes the

of the 1952 unused Excess

Profits Tax Credit amounting to approximately

Common Share.

A
FRUEHAUF

$3.94

$ 42,822,895

•

.

...

6,210,108

$2.00

.,

Current Liabilities.

......

WorUVs

TRAILER

COMPANY

posits adjusted of the weekly re¬

was

$

5,711,525

$3.61

....

Profits Tax Credit—The Company's
,54.75 per Common Share after

55 cents per

maintain their required
Money became tight and

to

............

laws could reach

carry-over

liquidity of the commercial banks
-and to increased dependence
of
the latter on the rediscount privi¬
lege

per

Book Value per

ment of the

reserves.

...

Ratio of Current Assets to

Reserve

credit„ restraint
policy by the Reserve authorities
also supports the conclusion that
of

adoption

.

Net Current Assets

Dr. Nadler said the

credit policy,

Earnings

.

Dividends Paid per

Later on it
curtail capital

to

Net Earnings
Net

present.

also tenu
expenditures.

28,961,296
$161,612,310

...........

Total Sales

purchases by ultimate consum¬
ers in
expectation that prices of
commodities may
be somewhat
may

$132,651,014

$162,809,644

Sales for Military

of

lower than at

1951

1952

Dr.

however,

may,

temporary

a

>

in defense

reduction

material

satisfactory

the employees, the sup¬

shareholders alike.

expenditures or in capital outlays
lead

American people, while at

producing tangible and

time

same

*

truce in Korea and im¬

a

Fruehauf manufacturing

plants and the

sub¬

a

confident that the

are

$53,632,991 at the

$44,402,157 at the end of 1952.

Fruehauf Service System backed up by
the intelligent cooperation of the 9,000 members of the
working Fruehauf family will achieve another year of

our new

improvements in other models

by $9,230,834 or from

end of 1951 to

equipment in operation has tripled in the past

proved international political con¬
ditions will not cause an immedi¬
ate

held

was before the change
policy.

it

Soviet

in

service

overall decline in highway

Through intensified sables controls and full

uncertain to-

this remains as

and

an

stantial annual sales volume.

in

end

the

was

.

The only

distant future.

not

unknown

10
•

the bcom
an

Buying

stoppages.

day of readjustment. Such read¬
justment may be somewhat more
pronounced than might otherwise
have ensued but at the same time
without

parts

freight ton-miles due to the steel strike and other

bring closer the

the boom and

of

$27,247,812 in spite of

pattern,

What it may c.o
of

political ten¬

Builder

Largest

of

T ruck-Trailers

Michigan
r

^yxfrysyv/j'///w,//V,s/t _.<£"£

5$ v

Mc¬

Jefferson

Transport Industry
from

seen.

Chronicle)

N.

political

Excerpts

influ¬

Joins McDaniel Lewis

se¬

marketability

safety,

levels than ever before

peacetime, is confronted with

To

Dr. Nadler described the princi¬

pal

FRUEHAUF

Nadler,

Dr.

when

bonds

future buyers of government

economy,

new

alJ

developments

obligations remains to be

policy.

of

govern¬

already greatly reduced.

debt

in

de¬

a

obligations at

what

no

term

marketability of

was

decline in bank

a

was,

present

flationary

it not for the farm

policy,

government

stable for

loans.

-

in

according to

the

tion, resulting in

the

long

Ameri¬

The

in

the

ment

as

liquida¬

inventory

readjustment

outstanding

capital

in

corporations

by

to

future."

can

at higher

large

on

dis¬

"not

tant

Marcus Nadler

is

been

were

reduction

some

as

later

lead

busi-

current

the

Treasury

too

the

of

ness

of

an

have

time and

Korea,

there'll

a

and

course

and

moderate

well

policy of the Fed¬
eral
Reserve
played
a
notable
role in curbing the forces of in¬
flation.
Commodity prices on the

is lopsided
that, regard¬ and that the previous Adminis¬
less
of
what tration missed several opportuni¬
may
happen ties to
lengthen the
maturities
in

their

run

boom

expenditures

the

that

credit restraint

government bonds.

Univer¬

sity, predicted

contended

Nadler

inflationary forces have to

the

sharp decline in gov¬
security prices, resulting

considerable uneasiness

in

New

ent
a

Dr.

downward

would hasten the end of the pres¬

time.

necessary

Society of Public Accountants in
New York City on April 20, Dr.
Marcus Nadler, Professor of Fi¬

make

334%

of

inoppor¬

offering

few

for

obligation

long-term

a

time

the

opportune and whether a rate
was
warranted at this

was

the interest

whether

23

present money market conditions
banks are in a position to believe.
In offering a 314% issue,
new investments.
An easing
he said, the
Treasury forced a
of
the
international
tensions

by the speaker.
The
however, he said, may

raised

be

in the right di¬
anti-inflationary

Others

measure.

York

step

a

as

rection and

distant future.

at

of

expressed

costs considered the new Treasury
issue

a

nance

private

(1751)

question,

that

should compete ag¬

with

gressively

believe

who

Those

the Treasury
tions

have

Chronicle

Number 5214... The Commercial and Financial

Volume 177

E.

24

(1752)

The Commercial and Financial Chronicle

the best

Peace

Prospects and

.

Thursday, April 23,1953

,

thing the. British Govern¬

ment could do about

is to

s

convertibility

forgpt about it. A prolonged

feeling
thatthe
Government
might at any moment decide that
.

the time

By PAUL EINZIG

effect

Predicting

Sterling convertibility this year, Dr. Einzig holds
impossible unless sufficient dollar aid is obtained to enable

it is

Britain

no

to

Union.

relaxation

a

will

witness

not

serve

useful

no

Texas & Pacific
rule

a

inclined

are

railroad
to

be

executives

most

the opening months of the

ing

conserv¬

year.

preced¬
Under the circumstances

ative in public discussions of pros¬

it does not appear optimistic to
pects for their own road or for the visualize the possibility of earn¬
industry. Quite often they are apt ings above the $30.00 level for the
to be downright pessimistic, par¬ full
ton and Paris, it would now be in¬
year
1953.
While dividends
NASHVILLE,
Tenn.-W.
N.
ticularly where traffic or cost fac¬ have been increasing gradually
clined to think again, having re¬ Estes
has become Vice-President
tors are involved.
It is rather a ($7.00 last
gard to the indications of a change of
year, $6.00 in 1951 and
Mid
South
Securities
Co., welcome
relief, therefore, to come $5.00 in 1950) the distributions
in the international political out¬
American Trust
Building, where across a railroad president who is have been
look. A relaxation of the interna¬ he will
quite modest in relation
be in charge of the mu¬
willing to admit that things are to earnings.
tional political tension might ma¬
It
is expected in
nicipal
bond
department.
Mr.
quarters,
therefore,
that
terially increase the difficulty of Estes served as Treasurer for the good and willing to sound an op¬ many

LONDON, England — It is be¬
increasingly evident that
1953

could

W. N. Esfes V.-P. of

of international

coming

year

and

taking the
unsettling

an

As

political tension
might materially increase task of maintaining convertibility.

the

for

come

purpose.

its debit balance in the European Payments

repay

Holds

has

plunge would have

a

Mid Sooth Securities
-

restoration

tibility.

i

c

i

conver¬

weeks

such

s

sterling's

Until

few

a

ago

of

de-

a

o n

was

the task of maintaining the con¬
vertibility of sterling. It is true,

in

ted

many

quarters

for

the autumn of

this year. It is
an

open secret

that the

tremely

ex¬

keen

would

taking that

on

step

at

earliest
sible

But

the
Dr. Paul

prepared to take

In

of the Washington and Paris dis¬
cussions, and recent international
political developments, materially

Mr.

Eden

and

Mr.

States

All that the

Nor would it be possible.to make

tion

of

tional

the

idea of

rules

of

Monetary

the

Fund,

ment

freely,

would

cline.

rearma¬

necessarily

.

conditions in

,

affect

the United

of

time,

same

tension

would

relaxation

a

make

it

even

difficult for securing dollar
aid in order to be able to restore
and maintain the
convertibility of
more

action which might be
interpreted as an attempt to grant
any

financial aid to Britain by circum¬
sterling. As things were recently
venting Congress. Nor could any it may have
appeared a fair gamundertaking be given about a re¬ hie for Britain to restore

the

for

Governments

of

Western

Europe, they made it
plain that if Britain were to insist
giving

on

her membership in

up

the European Payments Union for
the sake of
restoring convertibil¬

ity,

the

Union

other

members

would

insist

on

of

the

claiming

the

repayment of Britain's sub¬
stantial debit
balance
with the
Fnion.
This alone would
make

convertibility
ritain

impossible

obtained

aid

ar

to

be

ucing her gold
Evidently, in
ubstantial

unless

sufficient dol-

a

able

to
ebit balance without

United

that

repay

thereby

re-

reserve.

the

assistance

States

and

tibility
he

from

of

worst

to

tion and

Europe have saved Britain
from the grave
consequences of a
and
ill-advised
decision,
rn

rash

can

be

umstance

doubt in the cir-

no

that

1953 would

convertibility

mean

another

tibility crisis in 1954. And in
f

the fact that

in

conver¬

Britain had

view
ster-

ing crises in 1947, 1949 and
1951,
crisis

in

trengthen
ound

to

the

onement

a

year.

of

would

belief

have

second

very

risis

1953

the

further

that

she

sterling
Even

is

crisis

post-

a

convertibility

by deferring till next

year

he return to
e

convertibility would
helpful,. for it would at any

ate
ence

break

the

bi-annual

recur-

of the crisis.

Even

if

the

Government

had

major crisis

a

prospects, it is necessary

envisage the possibility of an
unfavourable change in American
business conditions, which would
mean that the
Washington Admin¬
istration

would

have

both




Vice-President.,

is

in

pros¬

Aluminium Lid. Slock

continuing

helping

situation

impression

the

of

the

might

consider

financial

convey

Americans

of enemy aggres¬

subsided,

that most

make

case

among

menace

has

longer

any

In

for

improvement

political
that the

resources

any

others.

apparent

apace in the postwar
In the annual report it was

years.

Offering Underwritten

pointed

prospectus offering
818,657
additional shares of Aluminium

had

.

Limited

filed

was

with

the

retary of State of Canada

Sec¬

20, and registration of the offering
also

became

United

effective

States

under

Securities

last year reached the
in
the company's

Act

change Act of 1934.
The

to

rent year

1933, and the U. S. Securities Ex¬ tivity

which

would

people would

no

it
necessary
to
sacrifices for the

sake

of

pean

Allies of the United States.

strengthening

Conceivably all

the

these

Euro¬

assump¬

tions may prove to be
exaggerated.

highest
81-year

and

sufficiently

high

forward

revenues

in the

area

to

to

convertibility

before

it

of

the

international

economic

and

will

be

possible

to

see

how1 far

Moscow and
Peking are prepared

to go on the
way towards
a

adopting
conciliatory policy. The negoti¬

ation of any concrete
understand¬
ing would be

necessarily

a

lengthy

process, and even after its
clusion it would take
some

'tfe.s'

,t.:

r

push

-

.

Rowland

-

R.

Hughes

character of the service

offering is being made by

record at the close of

business

*

-

.

President

-

about
on the basis of one brought
share for each 10 shares held. load there were other factors con¬
Warrants will be mailed on or tributing to the highly
satisfactory
about April 25 to all shareholders earnings
results.
One thing," of
record

Such

price

in

3

at

be

may

exercised

dollars

at

(Canadian)

$33.50

price of

(U. S.)

a

per

a

share.

company

Net

are

proceeds

estimated

to
at

037,000.

dieselization program.

Installation

improvement in operating effi¬
ciency, as it has for practically
every road in the country that has
$27,gone in extensively for such pow¬

The cost of this
program,

presently authorized in British

As measured by the usual statis¬
tical ratios, Texas & Pacific has
assumed

position as one of the
top railroads of the country. Last
year it had a transportation ratio
a

of 31.0%.

This represented

area,
now

well

was

industry
to

below
as

36.9%

in

the

a

First

Boston

Bear, Steams & Co., 1 Wall
Street, New York City, members

whole, which

a

1952.

on

As

a

as

ager

Charles H. Blatt will become

partner in Gruss

lent to $1.05 a share

to

The

Financial

CHARLOTTE,
staff

of

N. C.—Claude S.

Interstate

Corporation,
Building,

added to

Securities

Commercial

members

west Stock

Last year the company reported

peak earnings of $27.02
the

387.550

stock

Broadway, New York City,

the

Mid¬

Exchange.

The

Financial

con¬

BOSTON, Mass.
McKeon

Jackson

is

&

with

—

common

in

the

preceding

ing

As stated above, the operat¬
performance, as measured in

transportation ratio

year.

year.

With Paine, Webber
to

share

a

of

to

change,

the

company

(more

William

gain in

gross

Webber,

Curtis, 24 Federal-St.
■]?><

than

pared
i!

Ihv

has

Mitchell & Craft Admit
WASHINGTON,
&

Craft,

16

East

members of the

Beau

Street,

Pittsburgh Stock

Exchange, admitted Sue M. Van
Sytzama to partnership April 1.

Specialists in

Guaranteed
Railroad

Securities

came

With

to

a

million)
With this

income for the

$1,670,000

-com¬

$967,000 j realized

f«/''r»7V.rTr<;iy

.

ifi

;

Pa. —Mitchell

con¬

reported

$1.2

revenues.

combination, net
period

May 1.

Also, in the first two months

1953

sizable

Paine,

on

improve in the current

Chronicle)

E.

mem¬

bers of the New York Stock Ex¬

on

the

of

tinued

(Special

of

share

outstanding, compared with

$18.90
Bank

shares

a

a

Company, 52

statutory

rate of 52%.

Chronicle)

Abernethy, Jr. has been
the

com¬

stock, after allowing for Fed¬

eral income taxes at the

With Interstate Sees.
(Special

the

on

.

mon

&

trans¬

E. road's favor is a distinctly favor¬
Ames &
Co.,- Ltd., and White, able sign and it has been contin¬
Weld & Co. are
dealer-managers uing at a substantial pace in the

S

of the firm's municipal de¬

Gruss & Co. Admits

Corp., A.

shares.

Exchange,

1, will admit Joseph P.
Marius Decker, Howard

partment.

came

recently

1949 Texas & Pacific had

May

Crosby,
Finney, Jr., and Harrie T. Shea to
partnership. Mr. Finney is man¬

ratio for the

estimated at $435 million through
portation ratio of 38.2%, at which
1954, of which approximately $317 time it was
only 1.6 points better
million had been
expended as of than the industry as a whole. The
Feb. 28, 1953.
widening of this spread in the
The

Bear, Stearns & Co. to

of the New York Stock

er.

drop
of a little more than two points
uled to be
substantially completed from the preceding
year and
it
in

Columbia,
the
Caribbean
Quebec, and elsewhere, is

Press

freight' adopted to create the job of Dep¬
an in¬
uty Budget Director, Mr. Hughes
fluence on the revenue trend. Sec¬ will
get that post.
ondly, has been completion of the

the

will be added to the funds
of the

1954.

Budget.

Secretary James C. Hagerty said
if
pending
legislation
is

that

$34

The prospectus states that the
proceeds of the sale of the shares

as

ant Director of the

This is still

of a large amount of diesel power
alternatively at the op¬
each subscriber, in U. S. has brought with it a significant

of

ap¬

course, was the increase in

rates last year.

or

dollars at
per

expire

May 15, 1953.

Canadian

of

share

will

on

rights

either

tion

and

(EDST)

p.m.

has

change in the pointed Rowland R. Hughes, Vicearea that
President of The National City
the peak traffic Bank of New York, to be Assist¬

new

of

Eisenhower

the

was

April 24, 1953,

becomes

financial situation. And it is bound
to take
many* months before
it

r'

another all-

time peak.
While it

evident how the

change in the po¬
litical situation is
likely to affect

I

ac¬

for the offering and have under¬ current
year to date.
The magni¬
possibility of such develop¬ taken to use their best efforts to tude of the improvement is obvi¬
form groups of
ments will doubtless be
envisaged
soliciting dealers ous when it is realized that each
by such responsible statesmen as to procure subscription for the point drop in the ratio is
equiva¬

Churchill, Mr. Eden and Mr.
Butler. It would indeed be reck¬
less
irresponsibility to plunge into

.)

cur¬

level of plant

a

But the

Mr.

■

management looks
additional industrial

expansion in the

of

this

The

forward

the

reflecting

levels

April history.

on

that,

out

industrial growth, the gross reve¬
nues and
net income of the road

A

pansion program which is sched¬

spare

Appoints R. R. Hughes

has been going on for
time, accelerated under the
exigencies of World War II and

able

to

Pres. Eisenhower

pansion

hands full with its domestic eco¬
nomic problems and would be un¬

its

determined to proceed with
time
convertibility notwithst a n d i n g before the
economic consequences
the negative response in
Washing¬ could be ascertained. Meanwhile
een

last.

F.

company
available
for
general
corporate purposes, including the
financing of the company's ex¬

o

proceed with it. So between
hem the United States and
West-

allow

to

sion

to

intervene

would

develop on this side. Owing to
change of the political situa¬

mean

onvertibility, should Britain wish

States

the

the

in

the assumption that, if
came to the
worst, the

rather than

the

from

on

United

the

absence

I.M.F., the E.P.U. countries are
a
position to veto the return

"here

liberalization

some

conver¬

laxation of U. S. trade barriers
before the attitude of
Congress is
properly ascertained.
"v
As

Bert

are

subscription rights to shareholders

-

At the

enthusiasm.
Evidently the new
Administration is anxious to avoid

taking

termination of

States, and American demand for
imported manufactures would de¬

to

received without

was

^

a

business

enable it to. grant dollar facilities
more

in¬

the

contrary,

Interna¬
as

an

export of manufac¬
tures to the United States. On the

United

so

in

crease

relaxa¬

a

for these losses through

up

promised was
plan submitted to

the

study

materials would also decline.

raw

:

Government

them. Even the

Assistant

first

producing countries of
Sterling Area., In addition,
American purchases of strategic

from

of assistance.

Co.

Madden,
Texas & Pacific, as a matter of
President; Matt B. Pilcher, Vice- fact, has been
doing an exception¬
President, Secretary and Treas¬ ally good
job for quite some years.
urer;
Robert H.
Jordan, Vice- It
operates
in
the
Southwest
President, and Porter L. Easton, where consistent industrial ex¬

the

have

Butler

more

loss of dollar earnings to the raw

success¬
;

affected in

material

Washington with¬
having received any promise

out

to

a

convertibility.;

sterling is bound

race

curities

place, any fall in
commodity prices would mean a

of risk to that end. But the results

reduced the chances of

better

political
mitigate the re¬

would

the

downs.

and

ups

as

be adversely
than one way.

certain amount

a

no

far

to

Einzig

even

returned

so

armament

pos¬

ful return to

further

Such

Vollmer, Presi¬ pect.

dent of the Texas & Pacific. In the

Mid-South Se¬

have

in

relations

moment

is

and

is Mr. W. G.

a man

-

Gov¬

ernment is

timistic note for the future.

State of Tennessee for two terms.
Mr.
Estes
began his career in

Also, there is considerable
feeling in financial circles that a
sterling would be less exposed to the
investment field in 1919 with
annual report to stockholders, of split in the stock is in the
a run due to a war-scare—though
offing.
I. B. Tigrett Co.,
Jackson, Tenn. which Missouri Pacific is
by far Be that as it may, this relatively
even
in this respect it would be Prior to
becoming Treasurer for the largest, Mr. Vollmer stated inactive stock still sells
low in re¬
unduly optimistic to assume that Tennessee for many
years he had that
he
anticipated that freight lation to demonstrated earning
henceforth the relations between conducted
his
own
investment traffic
on
the
power.
company's lines
East
and
West
would
always business in Nashville.
would be higher this year than
necessarily
run
smoothly
and
Other officers of

freely predic¬

layujgga am Mia STOCKS-10 KM
25 Broad Street

"

New York 4, N. Y.

Telephone BOwIing Green 9-6400
Members NsttT Asso. Securities Dealers, Inc.

Number 5214

Volume 177

The Commercial and Financial Chronicle

...

load

6

Continued from page

(1753)

if

entirely too great, especially fact, I think that
make

transaction

way

McCormick Sees >ASad and

to

wants

one

dollar
with

going to get above six perhaps by saying I am
half million stockholders confused.

not

are

we

and

a

until

I had the

change it.

we

is asking Mr.

not sell stocks

McCormick a ques¬

such. I

am

low goes

often

have

I

Lazarus:

Mr.

$2,000

wondered, if we want more stock¬
holders in the United States, why

mem¬

and

chase

salesmen

you

fact, I think
question.
%

is

it

oum

less

is

.were

good sional buyers and sellers of
People

ities.

.

went

secur-

there

because

'20's

early °30's

and

that

thing

we

it

to

.

bers

is talking about

is

dealing with. There
in.

rities. There is

are

one

the

to

seems

good

^Jrst as
my face.

doesn't go

; "After all, a person
down and buy a corner

drugstore

hands

their

and

&

Procter

buy

store over night, and Gamble?
Mr. McCormick: No, they don't.
when you buy stock you are going
into business. You are becoming They come in and buy their coma small businessman in something
petitor, as a matter of fact,
or

grocery

t

i-

that

should

you

opinion,

my

do

after

only

yet,

and

consideration

careful

haven't

we

enough of them.
I think

country

is

(Special to the financial chronicle)
T

McManus is now with William

+u

tax-revenue basis,

a

that if

'

they

sjx and

not

are

you

in the people

having

the

second

thing, about the

that

me

this

it is a question

and the consumer,

Wolman:

Mr.

interest

securities.

kaif million

a

out and stimulate

of

It is

not

those

in

people

only on

the

buying side. I think that people
ought to be told to get out of Gen¬
eral Motors at the right time and

but

think that

it

Standard

the

DlJTTON

&

Corp. analysis

Poor's

proposal to

were

our

tion,

board, which is now under study,

with
more

'

r

r

worthwhile

quite rewarding., I don't know all
the answers, but I believe I know

a'lot more about people than I
And here is a
Mr. Frailey's talk hits me short list of the things I have dis
something that I believe is covered that I like in other people
important
in
developing I know that they like these thing]
did 25 years ago.

all full of helpful informa-

too,

successful relationships with peo-

to

do

an

-

intelligent

<

high-cost research, you

your

„

him

and

in

out

a

on

commission, possibly charge

lower
•

him

let

should

w

won't

lose

of

half

them

could

make
"

a
'

Mr. McCormick: As a matter of

about the United States Govern¬

fact, I don't think we are at the
point' in ' the securities business

ment?

where

*

Mr. McCormick:

as

Well, you and

all Americans

know, that you don't have to
the government

be,

Chairman

the matter of loy-

your

Becker:

But

bonds can go down.

ask

Mr.

Becker:

McCormick




I'd
a

have to take the

small

add cut It up among fewer
people. I think the pie can be
bigger. That is the trend of my

pje

I think that we on the

v-

yet can take themselves for what

«iey are.! As President- Eisenthing. said it, j. ajce yoipr

full import

excellent advice,

,

has

caJ ^ trusted.

of that speech
only going to dwell

copy

a

available. I am

.

,

.

1 ^e people who are not too

to ,y_:—
^ j—u'T"
ments off for, <Ja chin and a chat,

upon the main theme of his talk.
upon tne main meme 01 ms iani.
..
nnint„
voll
^
obtain

,

line pomts reading of the and w^° remember that r am,a
y°u_.can 0Dxa.m
I
a
complete

exchanges

pretty

.•

.

original.

j

™

,ui.

nice

guy

too —and

who

,rrt„

^

think

being murdered by

are

we

the open-counter

they

taking

are

market, because

wholesale

our

business, they are buying run-of-

the-lot, which is at less than the
cost to do it on the exchange.
nil

chnnlrf

that

think-

that

even
...

don't,
the

doesn't

you

hf>

street,

customer's

much

mpre

we

had

have

and

don't
the

those Jhree ways.

fir^ "^e
Lf
writer to put himself into s

^'t^nponle hf wlSine
^niH tlflk wTth t^

1p+

they are doing—who don't fiddle,
- faddle and fumble when I paj

them for service' buy something
from them' or » even g°Jishin3
were
sitting onnosite you in "a with them' 1 like people who ara
opposite
were
y^u
pr?u, „f _t_heir_Work.
your office), that IS the
J
pe0pje wh0 are too full
fn to give yousuccess- I ideas 0f understandingact I like or to
?owa
to brag, nlaizi"
like
my own
.
the

wav

if thev

vou

a

display

of

the,

stockholders, which was very im-,
I'd

pressive
we

have

a

like

to

suggest that

display of those who

position to buy common
the period from
January 1st up to this period but

were

in

stocks

a

during

so.

...

man

you

really

be¬

You

lieve

that

question,

your

low-priced stocks make the

brokerage fees on

who

had

they

as

mean

example,

the. funds

for

common

one reason or

can

learn

can

day.

every

stop learning

soon

as

conveniently do so.

Others find that every day is a
adventure. If you like living

—

if

you

it

find

like people
endlessly

an.

—

you

will

interesting

study to analyze your own reac-

and your, own emotional
pattern, as you go through each,
day of making a living,, of enjoy-

with

stocks but

another didn't.

Mr. McCormick: As a matter of

life,

of solving problems, of
family, and

contacts with friends,

with ..business
are

which to buy

we

valuable

men

new

ing

From The Floor: As an

yes,

Some

tions,

•

Becker:

Chairman

that

constrUcted

Inasmuch as something

Floor:

The

From

about

to

like

\

seriously believe only froril jaHuary 1st?

average

know

McCor-

the securities than the man in the

r

in

commissions

haven't done

From The Floor: Mr.
mick

Mr» McCormick: They can.

Chairman

we

is con-, thinking.

alty. You put up the money.
_

> '

CWce to feel that those I trust;
he

if

to get in, let
£
nothing. You The
by
anything; and thirdly,

commission
get out for

a

him

,

about what they are doing and

Secondly, the professional who
in and out and doesn't need

is

,

the business., of Mr. Frailey's

not going to get

-

who are not ashamed to admit L,

..

.

;In order to get the

;

:

-

,1 like people who are serioo

bring about this much sought after
condition

are

that: any

believe

and many others
found something in his work, other
than monetary success; that is also

istence unless we expand

of

I

securities for
century, as I
have done, has

will go out of ex¬
the base pie than any one thing that you
or
I, or anyone else, can do to
security holders and make it

This industry

but

man who has sold
over d quarter Of a

,

and that is one.

T

living?

ordinary
person
knows as
rhuch about a business as he does

on

heart

ter

matter of fact, I have made

a

three-pronged

.

sell at the right time.

Chairman,

the

berned, sold

a

Effective Sales Letter Writing

nn

doesn't Mr. McCormick

as

£( 64 o£

ailment.

get people to buy equity secu-

business,

far

at the age

away

+
I am speaking in the sense that hrnntfht bnpk- on thn floor nf thp
understanding
brought back
the finnr of the
of the problems of the people who we
ought to have a securities exchanges, it adds
^ we ought of about this being you write letters
are running the company in which
community industry that is com¬ the market. I think the Equity to not alone when yourself
they are buying securities, and petent , to service the American cut) our commissions, so that you but when you sell through a perthat is one way to stimulate their public in that way.
are doing business on a large volV .
sonal interview.
interest in it, and I think it is
Chairman Becker: Can it be you ume pn the floor at a wholesale
Tkere js 0nly one way to undergoing to pay off, not only psycho¬ have too
[many members, there- rate. I think eventually the ex- g^and peopie — that is to underlogically but in dollars. *
fore, they | can't all make a living, changes are going to have their stand y0Urself first.
Life is so

as

*

,

fxchange^aTs®1

going

By JOHN

rate is

own

our

.,

everybody, having

know,

,
.

^Joseph , Soltanitzky member of

getting now, and

are

-

;

.

a

—

divided loyalties;

Leo,

,

/ ■■

v....

You have to go

country and owning a part of it.
Then it is not a question of having

-Mr.

>

Joseph OOltailltzky

don't wait for Christmas or soma
^00 smap a base to run an ade-I am speaking now as far as the
Mr. Frailey suggests that if you Specjiai
to let me know how
got quate action market; I think it exchanges are concerned, not the want to be successful in writing
fee^ ab0Ut me.
: ;(f'
,
must be expanded tremendously. securities markets
generally, I f.ood sales/letter that yoU-jsnou ^
j
peopie who know what
As j sayj

of this

laborer

As
a

in

that the future

confidence in the business of

of the

Ex-

lot of

a

.

,

particular post

it is,

mem-

Stock

Securities Salesman's Corner

$2. I think you mentioned that

at

but the risk of plain as the nose on
Chairman Becker: How about
buying Lazarus, and I think he
Procter
&
Gamble? Don't they
should be compensated for it.
come right in with the money in
how

Midwest

if they R; Staats & ^ 640 South

confidence

can't have

you

',

On

the

on,

Building,

the

when people
Cy Frailey, expert on sales let1- ring true. I know
I don't claim
writing, made a speech on how are genuine today,
rates, 15% seems a little high. It
character
to, write an effective sales letter to
be an expert at

are

on

floor of the exchange
where you buy and sell, where all
orders in a particular stock are
'executed, and they all are funmeled. That is the function of the
iness looks like from here out, and exchange, but if you sit back and
if he is a competent man he spends wait for the professional to give
a lot of time at it He spends a
you the volume, you are going to

'yV.''-. .v„
i
He's
got To
know something
about your department store. He
is selling you;, he is selling his
knowledge of what the retail bus-

of

With W. R. Staats Co.

A

+.

buying securities, to have
confidence in the people you are

correct on that.
the floor of the ex¬
change act principally as agents
in the execution of orders, but as

V

Chronicle)

Ohio

in

move

,

Lazarus.

Financial

Terminal

I say, it is no longer a professional
«ra\ijndrpd%TVf'"Advertising in Action" sales promarket; it is basically an invest- quite o/o,
■. T w ii grant tnat
wi]i t,raVlJmotion conference on Jan. 16, that
.g wor^While reading if you did
ment market^ and the orders have £we could figure out what is an
not hear it.
John McKenzie; of
or
Bache
& Company,
or
any to be brought to the floor. That unsolicited order on which you
S.-P. Corp., has mailed copies of
other brokerage firm and" walks takes selling,
are not spending money, doing a
-~u
some of the talks made
at? the
out to sell your stock, he is not.'
You have to go out and get peo- study and advising them, that the cdnference to dealers throughout
talking about the United States pie interested in buying thf secu- rate, ought to be lower.
country an(R although they
Government. He

The

of Saunders, Stiver & Co.;
Tower

narticularlv
particularly

*

furthermore,

people in whom you have confi¬
dence. I think that is your first

them

rities, you
The people

a

reputable brokerage house and I
think you should only deal with

No exchange buys or sells secu¬

have got to combat.

Secondly,

have

Saunders, Stiver
to

CLEVELAND,

profit tax, the attitude

+

than

arb

men

You

buy securities you should go to a

basically an investment-type mar-

isia complicated
piece of merchandise we are sell¬
ing. We are not selling a stamp;
we are not selling an interest In
the
United
States
Government,
When a man leaves MertiU Lynch
;

Joins
(Special

thev rut it wir to 30 days it will
they cut it back to an Have it will

the first count,

on

customers'

all

Becker:

mick.

get many more times tax revenue

guilty

not

to

cor¬

government that they have change,

+

on

competent. I think that before you

ket.

is some¬

—

Today it

disappeared.

terrible reputation cally

acquired — and I think
of a minority in the late

we

Chairman

aPProached thls p™blem that if Street.
purely
tax-revenue
basis,

exam-

public.

are

we

and

Regulations what they are — and
est exchange
in the country,. I thank God for regulations, I be¬
have to admit that the securities lieve in it — the professional elebusiness is digging itself out of a ment of the market has practithat

comorations
corporations,

....

+

Now, I have got to admit that

running the second larg-

deep hole. The

the

on

bought and sold and that was the
experience in the government at focal point for buying and selling,
one time regulating this business -but with taxes as they are, with
now

of
or

excess

runnhfg strate '°

inations. before they are let. loose
inations, before thev are let loose

.

something

sympathetic audience, Dr. McCor¬

should kid himself,

„

I think most

certain classes, that is,

pass

the stock exchanges
meeting place for profes-

a

.

schools," requiring individuals to

for several

do

— Edward
desirability of equi¬ M.
Meyers has been added to tho
talking about the bur-

am

of the

that

and

men

right direction

Having had a similar amount of

and

that the securities busi-

of the big firms are now

generations
very

the

want

you

to

tackle the double taxation of

not so*think we are moving in pencil ought to be able to demon-

think

I

lousy.

For many years and

matter of

a

a

Well

,aSnH%7HnW1learf-tlnghqUeS"
hhSne^f I Kvthat is. why our

'

"Mr. McCormick: As

dens
oens

If

them to buy

pays

bonds.

have

porate dividends.

only experts are in the field, I k^ore they are entitled to capcan't say yes- That is just simply ital tax. Anybody with a sharp

Hnn

about

-

ties. I

McCor¬

Dr.

reply.

ing.its customers'

man

rmicK. well, l tnink

*

*

Why

stockholders.

to say

me

Becker:

McCormick:

.Mr.

about that4?

wrong

McCormick'

Mr

to buy

don't people know
them to go some
place and buy it? Then it would
be inexpensive
to get a lot of

stock?

enough

will

mick

got orders.

Am I

to

why you have

and

stock,

have

$5

E Bond for $25

complicated to buy a share

so

You

destroy the

Chairman

with

a man

we

it

The basic difficulty in the whole

some¬

only sat and executed

men

would

worthless?

I thought the

stock;

no one here

brought

you

speaking of things that

am

when

tax-exempt

lot of internal things.

done, or hope to do, in
order
to
improve our business,
but I am not kidding myself and

will find

you

a

rities

°rders> that it wasout the
but; sent the investment . mess has done a good job in train- to hold securities for six months
houses

simple to go into the post

it is so

office and buy an
and

stock

out and sells

some

if

that

crux

considerably stimulate the busi- picture is our tax structure. There
ness instead of selling the advisare
at least three taxes I can
ory
service; which
is
perhaps think of, offhand, that completely

what shocked when he says a fel¬

tion.

of

as

think,

you

rates down

to the

haven't

loading fee considerably less.

your

bers, of the stock exchanges did

Chairman Becker: Mr. Lazarus

I

goes

business has been bad.

our

We have

you
find yourself
loading fee of about 15%.

you

why

two-

stock,

a

Don't

little

a

impression that

the

of

two-

on a one- or

Now, in Toronto

Sick'7 Security Business

that

23

like

interested

warm

associates.
in living,

because
human
being

people

If you
and you
are

a

yourself,

I

you

have found out that certain

things

on

an

f0tksuthat talk down to no person /
nor
tQ
anyone

wko
that

are

j

like pe0pl(j

poised in the

comes

assurance,

from confidence in tho

rightness of their work and tho
and decency that they aro.
putting into, their daily lives.
:
I like people who can say, "I waj
wrong,or "I am sorry there wa 3
a misunderstanding, please forgive
it." I like people who can forge i.
the little hurts that unavoidably
creep into human relationships an J'
let bygones be bygones. I like th-i
fellow who can laugh at his own"
mistakes but never at mine,
I like the best in people and X

purpose

believe all of us should try to
find it. As Mr. Frailey says, "that'3"
not Pollyanna stuff, it's the bes£
kind of salesmanship there is."Put it into your letters, put it into"
your life.
You'll have customers
and friend — business suc^s antithe profits will take care of them^.
selves.

26

The Commercial and Financial Chronicle.,.

(1754)

he

unless

Continued

from

6

page

promptly finds

ternative

is going to keep up a flow of orders tnat will justify the fabrica-

al-

an

for his

marxet

private

Not only is the worker's
aDility to purcnase reduced, but
also his willingness or "propensity
to

spend" suffers a chill. He bea
poorer prospects for a

comes

Year's Business

house,

a

car,

hats for what I call "inflation from

the market."

raised the

these

speaking,

Broadly

dan¬

people subconsciously felt on Nov
5, 1952 that they had voted the
present. Union
economic problem out, and failed
demands seem to be turning away
to realize that they had merely
from stiff rate increases toward
voted a more competent business
such security measures as the an¬
management team into the seats of
nual wage or toward acceptance
power in the White House and the
of an increasing number of ProfltExecutive Branch. The complexion
sharing plans. Strikes
though of
Congress changed but IrtUc and
fairly
numerous — are
neither
Johnny Q. Public was still ab u
widespread nor of long duration. the same mixture of conscientious
gers do not seem to ine to oe acute

perhaps

or

Labor

management

as

concerned

be

to

seems

even

well

as

that he had been under

terms of settlement that will per¬

Deal.

prosperity
rather than
rash ventures into new

petuate

making

sparking

given

reason

five

next

for

a

feeling of confidence is the com¬
mitments
made
for
high-level

general

price
moderate in¬

a

One

years.

the

in

confidence

ness

food—or

curtail

wife

his

and

purchases

even

may

He

somewhat

on

movies.

this

Nor does

apply merely to
Those
still on the payroll are likely to
husband their purchasing power
against the possibility that they
too may become entirely or partially unemployed. With declining
orders, the manufacturer not only
those actually disemployed.

places smaller orders and trims his
inventory; he puts some of his
modernization and expansion
he

until

drawer

can

It

doom.

ness

is

note

to

Even

a

government spending, the accom¬

panying high

does not want to brace him¬

man

self against a vague danger of in¬
flation only to topple backward
the real hardships

into

a

weakened inducement for busi¬

way

the

price-income rela-

have been

working

out of line with

depression.

him into

tant

I

am

the

lead

watching small and dis¬

dangers

and^ to

devising

to forestall them,

measures
'

will

That

not

extent

little

a

concerned

to which

at

businessmen

and the public

generally seem to
accept placidly the idea that this
is "a new day" or that we
haye

"built-in

devices

of

stability

in

our modern economy, or that the
Employment Act of 1946 "licked

the

autos, with buyers for 5 8 million-

administrative

unions.
moving

officers

business

economic

our

gained

institutions

economic

and

sophistication

that could express itself in better
economic behavior.
In the third

section of my remarks, I want to
sketch a picture of how. through a

combination

escape a

how

of

these

demonstrate

may

factors,

that

we

we

can

post-boom let-down. But

people will actually per¬
form in a testing time has yet to
our

demonstrated.

be

A

careless

incompetent driver c^n

the best

car

in the ditch.

I shall here try to

remaining
that

I

believe

And

point out

dangerswe

of

or

put even
a

so

few

recession

need

to

watch

ernment

operations, there will be

the market
Will

into

pohcymaker and

operating.
billion of
and purchases come

wages

the

This

market?

fected by the
the economic

not

expect

gloom, we can¬
private enterprise

a

to

flourish.

blind confidence in

successfully led
in

Europe

ous

power

or

a

a

But

rrmre

eeneral who

military crusade

faith in t>m miracul¬

of

a

Republican

label

will not of themselves get us over

the

rough

spots in

rearmament

boom

moving from
to

high-level

peacetime stability. Addressing




a

ket for autos

at

5

citizen which

as

is

Demands

Stabilization

a

would

ture

of

possible business fu-

our

technological skill,

But

enlightener

in

sophistication,

prosperity

and

our stores full of cus-

tamers."

Europe

■

at

As to the time of this showdown

as

firms

and

individuals,

time

effect

to

the

r.

threaded

good
and

to

argued
this
the

both

It

with

rising

mav,

equal

economic

•

a

problem

businessmen

evnenH^

of

(

foreet

overlook the speed with

which the repercussions of
ernment

retrenchment

a

gov¬

program

spread to the whole civilian

econ¬

Every man pruned from
padded government
omv.

man

without

purchasing
onre

roll.

some

terials

or

up on a

on

a
Friday-night
private

"procurement
curtailed

supplier's

cuts

orders

his roster

a

payroll is

power unless he

picked
Every

cancelled

fresh

to

lor

is at
pay¬

order

dcvn
ma¬

tn

few

Washington
or

_

ifte^enf
^ft

nof
not

nprmif

the

ends

to

be

notion
make

to

mP

bv which
Dy wnicn

sought

thev
iney

can
can

But I believe it

to

so

is

or

the

be
ue

atdi

possible

outline quite briefly the charof the problem posed and

the basic line of approach through
which it must be attacked.
In
lem

its simplest terms

the prob-

confront is that

we

of price-

income adjustment for all parts of
the economy simultaneously.
The
money

close

flow must be kept at

to

maintain

full

tide

if

we

or

to

are

high-level

prosperity,
Consumers must have liquid purchasing power to take the product
of our fabulously productive plant
and labor force

promptly and fully
,

or

a

acter

gov-

afford

can

in

or

permit me to go
into great detail as to the nature

tained

officials

dpnrp

employees from the merchant

s

,

_

shelves if he

ori®

maneu-

base."

oar

inSS

cTeatine surnl.rs
ft P!

and

home

from

fhe n^rnose ^f
hi.nriiot

on

White thta

htsTeen'^tans

demonstrated® {hi
capLbleand'have

on we have
amazing productivity

econon?yP is

of which

our

maintained the standard nf livim*

rpnprrn<?«?inn<i

of the

civiliL pooXtion

and in

nn

,

fight- I. by the Big Depression
ing rearguard actions against a re- War
II,
and
by

bv World

rearmmnlnt

forward

for

now

a

Again in

(a)

between

struggle

the

j. lie

uuiic

ui

between
ucbweeii

cuiiueiibiuii

management and labor which will
come

to acute stages when and as

tion of the rate

curtaiied is between ability to
keep husiness healthy and groware

trustee's

th*

respon-

of

war

either

prepara-

like subtraction from productive employment or a like addition to consumer well-being. Are we smart
and sportsmanlike enough to make
it the latter rather than the
former? Such was the declared
mean

apparently
vine.

lie

a

of the Employment Act—

purpose

The

military and civilian expenditures supplied

a

simple arithmptip

■

show-down? It Is & basic ideolog- tions will
lca

imperialism

second-half '53 against Soviet

planning

constructive program for 1954.

agement feels

£hinrS!d

+he

.Time dope
does

means

ernment

The Malenkov
their

and

our

/nnor,^

been

„

ing' Primarily ^ a Job-giving and
fnwrlo^ed
institution. "Manlorecl sed wage-paying
safp

a

eeonomif eho ee<?

to the

nor

Jh

on

to

Neither

or

hv

that
is itself
of
our

answer

open

it

pinv

workers
w

earned

cogency

simple

kind

n

miracle

employer and
however, be

productivity

Bn

ftftnrp

T? wfii

expanding

of goods provides for rising
standards of living and adequate

employee.

j

broad

LniSlrohlth
men who are bot

i

nf h'v

flow

incentive

a

Inntrni nrhu+h/prrnr^nf
Set ItL L
hiCandid

uctivity blunts the danger of in¬
the

by

nrnenprnne

the camp of the optimists,
it is argued that our rising prod¬

that

k,r

prosperous futurelis not

In

and

,

,

smooth

of

lin5Tp,n<rInt

ing the lag.

flation

,

of fixed obstacles and alert

aware

some

transition

...

straight channel

patience and tolerance dur¬

some

—.

c?mnTa

situation ic

vui
£ 7
repercussions on deed advanced it slightly. But our
the Con.fess 7and the business people eye that great productivity
STl^i T''
as somethinS whi<* should adalready in the early vance family and community livl! L that showdown period ing levels at a rate long hoped for
'J or are
0f the official dopesters not ,Ma"y but long deferred—by World War
ancj

n

4^e con^umer viewpoint) and (b)
°Jees or,ei??p oy/er?.Jna^"
agf,
representative (with the
P„oducer or capitalist viewpoint),
The bone of contention

the

sumption. This will not be

possessed

both of economic savvy and
will.
It will at best take

than '54."
vers

volcanic

between

public

tho

ev^nt

anv

a"d

ployed, and

]yorkers I°r wage or salary (with

enterprise of our peaks of inflationary boom and
But I think that, instead the sunken but tenacious reefs of
of its being an automatic
process underproduction
and
undercon-

of

credT ex^ansion ta^ PX

ground of solid

ture—the middle

be-

still to be understated

seem

by
this
opinion.

tfas

What, then, is the nature of this

This brings me to my third pic-

mar-

or

low, the magnitude of the problem

and the Utopian dreamers in been drained awav
our midst the fact that private consumption for
enterprise can and will keep our active war in Korea
factories open, our people em™r

Program

sub¬

a

of

competent

million

ases

or

The

problem.

economv

as

economic

Beyond question, the psycho¬
logical factor is imoortant in the

or

most

opportunity to vin- by some $20 billion of
dicate the system of free business tares touch of it deficit
enterprise-to demonstrate to the bythesovemmenttarof.eh
world and to the Doubting Thorn- vate

r.VW!ieiLt°J?Ser.^°rmlmmiZe vised estimate of
deflationary dangers?

now

stantial reconversion operation. I
do not say that it cannot be ef¬

the

tlfe^courses
al Prlvate
nrivate

himself
himselt

for

action

offsetting $10

an

private

it is

as

action

of
01

$10 billion less of immediate pay¬
roll and procurement to support

times, not

apprehensions

Since

"The opportunity that is arithmetic of the
up on the American busi- The market

Us°tmes'ent ^igh tew1'n Bta^ny these business leaders quite to
the^
he Presented
activity wotad'"
t°°w f? could T !, ^
,"f e
how it
be deferred later

out for.

■practical operation of an economv.
If leaders and public are full of

items.

labor

of

with buyers for 3.5

analysts put the sustainable

nessman is the

this debt structure could be serv-

people.

a

ing machines

million; and similar surpluses for
radios, refrigerators various other

.

cycle" and ushered
regime of maximum employ¬
either of the Unseen Hand of class¬
ment, production, and purchasing
ic tradition or the seen mechan¬
power.
One would be blind in¬
isms of built-in stability, it will
deed .not to recognize
that we
take a lot of doing by business
have markedly improved some of
in

Sight." At present rates of production they projected 6 6 million

on

,

into

bar-

8.4 million TV sets with buvers
for 6.5 million; 4 5 million wash-

spending, and a lessened
iced smoothly by employment and
power of consumer spending. Gov¬
ernment economy is a consumma¬
its present mgn
level.
But any
tion devoutly to be wished, but
its implications for the market in
of
reate the crisis

characTer

collective

what

ness

of reces¬
sionary deflation. As I said at the
beginning, I am not here to make
activity wouia create tne crisis
which, manufacturers
and
mer¬
of disinflation proceeding to dis"predictions of things to come.
chants,
bankers,
farmers,
and astrous deflation and of recession
But I am prepared to say that I
believe the prudent businessman working people deal must not be thrpatpnin? to hpromp denression
overlooked.
does need to think long and hard
of a stubborn
If the budget is balanced by
about what conditions or factors
What then are the danger siglead to the collapse of a boom or pruning some $10 billion of pro¬ nals that the' businessmen should
to the snowballing of recession spective
expenditure from gov¬ watch for' What are

sincerely from

would be needed to keep business
flowing at full tide after we
passed the peak of the rearmament effort. We could not long
postpone a showdown on this issue. To the Commonwealth Club
of California last September I described this as "The Businessman's Opportunity in 1953," defining "the businessman" as the
proprietors of small business, the
executives of big business, and the

impeding busimerely

we

were

nicipal and state governments are
tempted to do the same.
Now this is not to paint a horrendous picture of

that

tions

more

see

wlhat 'you all know about the
business spending, mechanics of the economic process
crease
in military and civil de¬
and the resultant high consumer
—that the business spiral operates
fense
expenditures
would
not
spending. The other rests on the cumulatively in a downward diseem likely to put the price struc¬
faith of businessmen and private
ture under
rection just as it does in the upa
strain that would
ntizens that the new Administra¬
ward direction unless checked by
make general price advances
a
tion will bring sound management
source of inflationary danger.
intelligent and courageous action
into governmental affairs. But we
of business executives, private incan't have it both ways. If Presi¬
Are We Faced with a Danger of
come
administrators, and public
dent Eisenhower and the Republi¬
Recession?
agencies. For some years we have
can
Administration really keep
You may think that in marshal¬
been parlying a legitimate posttheir promise to balance the budg¬
ling some of these causes of re¬
war
catching-up
effort into a
et, restore the value of the dollar,
assurance
against the danger of
high-pressure inflationary boom
eliminate waste, and bring about
runaway inflation, I have gone so
by monetizing a large public debt
far as to raise a suspicion that tne efficiency in all government oper¬ and by the private deficit spendations, there must be a substantial
real danger lies in the opposite
ing of both business and condecline in government spending,
direction. Certainly the business¬
sumer debt expansion.
Probably
advance.

year

plans and blueprints back in the
clearly what the future may hold,
With falling tax revenues, mu-

v

contradiction

basic

a

explanations given for busi¬

in the

traordinary productivity of our
present industrial system removes
the likelihood of a scarcity ele¬
ment

,r.

-

is

There

the ex¬

of

Revelations

ground.

intelligent and stupid
the New

and selfish,

find

to

ciotning

question "Confidence in
what?" I suspect that a great many

for small
postpones

even

or

durables.

consumer

I

January,

in

audience

business

with frankly and
both sides of the

tor and the primary producer to gaining table if free enterprise is
keep the labor force employed, to achieve sustained employment,
plants replaced as they are worn Both labor and management must
out, and equipment and technol- be willing to face facts even when
ogy constantly expanding to serve they are unpleasant,
a growing population and improvnow
us
apply that rather
ing to satisfy new wants and more generalized statement
of the imexacting standards.
pending problem to the specifics
Now it is obviously possible as of our near-term
situation. Even
a mechanical
possibility to divide before Stalin's death, people who
up all we can produce on a 40- didn't have their heads in the sand
hour week and a 50-week year, saw supplies catching up with
But to write up the billions of market demand for many comprice tickets and wage tickets modities under present conditions
with such economic correctness of price and income. One business
that that distribution will be ef- periodical that has all along exfected through our almost-free uded confidence in a continuing
market processes—aye, there's the
specifically a 10-year — boom
rub. I have been saying to va- ran a piece last week under the
rious audiences for more than a title "More Goods Than Buyers in

product.

Clouded Outlook for Second'Half

Thursday, April 23, 1953;

withering

now

in the

on

the

will have to be

answer

of both pub-

areas

policy and private policy.. If
bring spending down and keep

we

taxes up to where we have a balanced budget and if we hold credit
extensions down to

a

self-liquidat-

sibility for the preservation and ing basis we shall have a sound
improvement of the capital plant environment in which to work out
on which high and ever-rising terms of trade in the marketProductivity must Jest Union the goods market, the labor mar,

representatives are the spokesmen
superficially ■ for the consumers'
°liver Twist complex ^
More!' In a deeper sense, however' they are sPokesmen for the
funcjamentai

health
h

„

requirement

market

bJ ourrenf'

to wit

of

tbe

alJ

consumer

goods

proem-

y

.

...

Resolving
...

this
.

~—ir*

consumption

~

.

conflict

loio

,co

of

-

a

apn

and by labor to

man-

agement of the need of maintain*n£ ' real consumer purchasing
power.

That^ is a difficult odu-

cational job, jut
1 Edwin
puhiic

G.

i*

must be dealt

"Economics ic
12.

Nourse,

Service,"

on

P.

.

the

use

of

our

re-

and property.

men

adiustment will hp at

^2

\aiY}e(l only by great ylsdom ****

forbearance where prices are adrm-n:<,tprpfi

anri

nndprctand-

mmIste!ed and great understand-

tolerance where

prices and wages are made by the
process of collective bargaining.

proach during late '53 and '54 will

necessitate vigorous but frank and
sincere demonstration by management to labor negotiators of
need
maintaining plant,
providing capital, and sustaining
research

h

—

production and
a
continuous

equilibrium at full
of

market

money

put

ing and mutual

Diovment"i
.

the

will

sources

a

nower

duced under conditions of tall
_

and

that there

nurchasine

snail oe current purcnasing power

for

ket,

which

As

an economist, I am not able
predict whether or how nearly

B^at will be done.

But

as an econ—

omist I commend to you a course

0f

administrative

keeps

you

whether your
are

making

tribute
come

which,

your

the

company

kind

of

con-

price-in¬

adjustment", that will help,

toward
I

to

conduct

asking
constantly
policies and action^

peacetime high production.

commend

to

you

also

a

con-

'

Number 5214... The Commercial and

Volume 177

that part of this ability to mainof what others are thing of his profit margin. , This payment.' and 24 months (some¬
times even longer) to pay the bal¬ tain earnings was due to relative
was administered pricing of an en¬
effect on the adjust-r
in the capital base
ance, and some-other lenders were shrinkage
ment process so that you will be lightened sort of GHQ. And it is
even more liberal. He asked: "Isn't
(which gave him some concern),
as
fully prepared as possible to being followed by the platoon
leader at many a distributive out¬ it possible that consumer purchas¬ but that the major part was attribadapt yourself to conditions pro¬
ing power will be exhausted in utable to a larger volume of earnduced in your market by these post as he feels the pressure of
tinuous study

doing and its

others.
illustrate by three ex¬

actions of

Let

.

me

side of la¬
side of govern¬
the side
of
agriculture—and the government
apron string to which it has tied

amples, one frbm the
bor, one from the
ment,
one
from

itself.

(1) When some textile
England recently

in New

cuts or

wage

order to keep

ing assets and to significant
changes in bank earnings and expenses.
On the income side, as
he had already seen, the drop in
the proportions of earnings from
government
price support
and man to mortgage his future in¬ loans has been offset by added
interest from securities, and from
subsidy and has sought to post¬ come, because he might never get
sources
such
as
service
that income." He shook his head new
pone the evil day of adjustment
to economic reality. Part of this despairingly as he said: "I guess charges. On the expense side, the
bank no longer had to.lpay interest
responsibility lies with the farm¬ folks nowadays think the govern¬
ment guarantees them an income on demand deposits, but the savers themselves and part with farm
this boom period and leave very
by
conditions
of little to fall back on in less favor¬
Before I could an¬
over-stimulated supply and sev¬ able times?"
eral areas of falling demand, agri¬ swer, he added: "We used to think
that it wasn't exactly wise for a
cultural
policy
has
clung
to

increasing competition.

workers

accepted
an enlarged stint in
their local plants in

operation, they were "rolling with
the punch" and making realistic
adjustment to the current phase

Faced

(3)

state

who

politicians

think that farm votes

seem
can

to

sured only

and

are

life—and

for

considerably above

The volume of real-estate credit
in

he learned, has ex¬
panded so much that it now ac¬
counts for about one-fourth of all

in policies to make an economi¬
competition in their cally adjusted agriculture one of
sector. Of course that action was the
major supports of a sound loans. Two developments in this
mot a final answer to the problem.
field impressed him.
economy.
First—and
Both
they and their employer
In conclusion, I am in full ac¬ this had his hearty approval—the
should go on from that point to
cord with the business leaders and regular use of amortization loans,
maneuver for more favorable con¬
others who are saying that peace with monthly payments covering
ditions as fast as
they can be
not
of

market

brought about as part of a larger
adjustment process. But payless
workers and idle machines would

have complicated others'
•problems as well as their own.
(2) The
automobile industry,
faced with the prospect of more
simply

tions with

lead

ous

could escape

tionary

gad¬

Each was looking for "snob
appeal" to give him a larger share

nearly-saturated market.
manufacturer brooked
disfavor of his fraternity by

a

the

United

and governmental

the pitfalls of either

depression.

commend to you my

keep.
in

the

know enough

inflationary breakdown or

gets that enhance the manufac¬
turers' cost and the owner's up¬

Then

in

we

but

taxes—a

also

officer
banks

told

by

a

one

And

defla¬
so

I

third "mod¬

him)
government

agency

called "F. H.

was

bank had not also
pit at the
have
changed and checks

oil

their

grease

cashed at the same

time.

mingled with some

employees he

1

contain himself in

scarcely
-

banking.)

financial structure, as a whole and

bank"—were nearly ten times
larger than in 1920. Not only had

expanded, but in rela¬

importance demand deposits
had increased at the expense of

tive

time

deposits.

convenience of

The safety and
paying by check,

whiskered friend was much per-

of

friend
found in the bank's balance sheet
were not all on the liability side.
He learned some rather startling
things about its earning assets
too, besides the mere fact that
they also had expanded roughly
changes




my

not in

the

in

someone

of this room muttered:

credit inevitably raises questions
as to whether such volume of new
borrowing can be sustained. If it
cannot, the stability of the economy is threatened unless substitutes can be found for that portion
of the present demand for goods
and services which is based on
that credit.
.
t
;

back

"So what?"

position to speak,
but I would like to say that the

He

is

a

cial

Burden of Credit Expansion'

in the 'forties, and now
a neat package that fits quences
the cold war of the 'fifties, the
requirements of both lender
basic characteristic of our bankand borrower.
And he was glad
that this included not only full ing system — a vast network of
disclosure of the borrower's needs free and independent institutions

both

charters—has

Federal

quite

in

Yet

served,-

and

State
been

piace
wh0

heavy

a

are

burden

those

on

charged with responsibil-

management,
policies to act in
as will aid in per-

ities

for fiscal, debt

and

monetary

such

manner

forming that most difficult tightwire balancing feat — sustaining
economic
equilibrium
at high
levels of activity. Those same developments add greatly to the responsibilities of all bank officers
and directors to exercise extraordinary prudence
in extending
credit.

pre-

Throughout our economy there

-

another has bee„a marked movement to-

it is clear that banking to-

sense,

as we

experienced in recent years

haVe

the

operating under

such

Credit developments

action in

of freedom

restoration

the

ward

day bears little resemblance to the

enterprise. The market place,
banking of yesterday. Bank direc- jn virtually all fields, is less retors, bank officers, and I might stricted today by governmental
add bank supervisors, must look controls, supports, and regulation

threw up his hands.
representative who spends all his
Already bothered and yet be¬
time assisting farmers of the area
by these ' changes, my
to make the most efficient use of witched

friend's

their facilities."

0f

today's banking problems with

at

than

has

it

for

been

time,

some

perspective of 1953 eyes, with The price of this additional freetime to time, of an (jom js greater individual respon-

the

the help, from

and

glance

backward

occasional

sibility, for the stability or instability of our economy will reflect
more than ever the composite re¬

informed forward look.

an

Community Importance of Bank¬

and

directors

As

well

are

aware

of individual decisions

bankers,

yor

thousands
not only

—

banking decisions but, even more

importance! important, man-in-the-street decicredit to your sions — decisions as to which the
the nation; well guidance of officers and directors

of the

banking and
community and to

of

that you are engaged in a

aware

of thousands upon

sult

ing and Credit

of the banks of out smaller com

particularly ef

quasi-public business which car- munities can be
ries with it tremendous economic fective.

.

responsibilities; and that profit—
it follows, therefore, that yo
although necessary — is not your must piace high on the list of you
sole objective or measure of sue- duties and responsibilities thos
You know that a bank can-1

cess.

which obligate you

(1) to intelli

be oblivious of developments

not

its

in

bewilderment

was

com¬

means

you

choose), but also the judgment,

facts of our national

that you can help

so

fairs

of

your

own

economic life,

courage, and enlighten
leadership in ever-widenin
areas of community and nationa
ed

shape the afbank in such ]jfe<

plete when he learned of the de¬ fashion that it can make a real
The bank had shown similar re¬
cline in the level of interest rates. contribution to the preservation of
sourcefulness in developing new
Call loans, for example, on which our kind of economy, and our
types of financing. The "personal
the rate had been about 8% in kind of life.

finance"

Paul H. Toy Opens
(Special

department was entirely

consumer

Insurance.

the

when

ago

1920. now ran about 2Y2%; U. S.
advent of "no minimum
new, havmg been started during
certificates of indebtedness had
accounts, had brought
the 'thirties, and then mushroomed
these facilities broad public ac¬
dropped from about 5*/2% to
since the end of the war. Instal¬
ceptance — thanks also to some¬
ment credit to individuals for the roughly 2%; and short-term busi¬
ness loans now yielded about onething else he had thought would
purchase of automobiles and other
never be possible, Federal Deposit
half of their former level of some¬

But

in each of its parts. The rapid increase recently in these types of

the outset, my be-

,

plus the
balance"

Developing New Types
Financing

I said at

gently gauge and meet the credi
community, in the nation, needs of the people — .throug
and in the world around it. Con- banking policies built upon en
-sequently, you must realize that it couragement of initiative and en
is both your duty and your re- terprise and balanced by restrain
sponsibility to understand not only upon speculative excesses — an
—although the bank had , really
de- broadened its program in this report of one bank which listed the facts of your own institution (2) and perhaps even more fun
94 different banking services
field in the past few years. "Why,"
(by the use of my three-dimen- damental, to provide both by pre
was he
availably to its customers, and he sional
approach
or
whatever Cept and example a high degree o
said, "it has an agricultural

age

the volume

bt this has been balanced
loss ratio lower than ever

a

As

analysis of his ability to re¬
but also arrangements for
adequate supervision of the loan
until final payment. He chuckled
when he said it wasn't altogether
ten times.. First, the bank's loans
true that the banks had learned
were
exceeded
by its security
this technique from another gov¬
holdings, which now accounted ernment
agency, called "R.F.C."
for more than half of total earn¬
"Why," he said, "the examiners
ing assets, as contrasted with less used to scold us at each examina¬
than one-fourth in 1920. He was
tion for not sewing up our loans
told that the expanded role of
properly. We had to reform sooner

made.
The bank's deposits—this
the statisticians' mythical "aver¬

scribing the progress

take of such magnitude—$60 billion of

taxes

long-term corporate debt — are
factors which must be considered
in gauging ; the stability of our

of the
found that, although investmentshad developed pri¬
or later."
they were not getting rich, they
marily during World War II, when
were being paid more than bare
the bank's substantial acquisition
Service Functions Expanded
subsistence wages, and that retire¬
of Federal Government securities
He learned that since 1920 the
ment, hospitalization, and bonus had been made possible by the
plans had been inaugurated. To Federal Reserve System which, service functions of his bank also
top it off, he learned that recrea¬
through its own purchases of such had greatly expanded. There had
tional facilities had been installed
been a marked growth in its fidu¬
securities, had provided commer¬
; to make working conditions mofe cial banks with the reserves es¬ ciary activities; and it was partici¬
pleasant. This was too much, and sential to a large expansion of pating to an increasing extent in
he was just about to retire into
the fiscal operations of the Fed¬
their asset structure..
obscurity again when the last sur¬
eral Government—selling and re¬
Not only had total loans shrunk
vivor of the old-time officers rec¬
deeming savings bonds, receiving
in importance as compared with
subscriptions for other government
ognized him and insisted he look
investments, but the make-up of
;
over the rest of the bank.
v
\
securities, carrying Treasury tax
the portfolio had undergone great
When I saw him, he had fin¬
and loan accounts* and accepting
changes, t Loans on securities,
social
ished the grand tour and was
security, corporation in¬
which were more than a third of
sorely perplexed.
He could not the total in 1920; now amounted come, and withholding tax pay¬
ments.
Then, in the course of a
figure out how the bank could to
only 5%. Farm financing had
operate- in this strange fashion; also declined—relatively speaking hasty survey if the President's
but on the other hand, he could
desk, his eye fell on the annual
As he

and

expenses

1920,

P Responsibilities of Bankers
customers could

busi-

been

before in the history of American

by

pay,

quired why the

substan-

expendi-

current

of

slightly more of his bank's gros home mortgages, over $23 billion
earnings now than they did in of consumer credit, $70 billion of

and

a

has

omy

of

particularly^

dependent on the
increased use of credit. The postwar era has involved tremendous

of the American econ¬
kind of houses being built with stay on their toes if they are to
making the internal adjust¬
some of that credit, and the prices keep pace with it and successfully
ments which will move forward
keep it adjusted to changing conthose houses were selling for.
into business stability and eco¬
ditions so that it may continue to
He found
that business loans
nomic growth at levels of activity
serve the needs of a growing and
had also undergone considerable
only moderately below those of
dynamic economy.
the present.
It will not be easy. change in both volume and char¬
Despite the speculative boom oi
But at bottom all it requires is acter. He was pleased to note the
the 'twenties, the collapse of the
that the rich resources we have be present tendency to wrap up all
'thirties, the war and its conse-.
administered with the economic the loose ends of a credit trans¬
el"—that

portion

ness

amazed to learn that nearly

half of commercial bank mortgage

bankers,

tures of both consumers and

point of it all is that our commerbanking
system,
like
the
loans are so
guaranteed at the whole of American civilization,
present time, but in some measure changes so amazingly fast that
that offset his concern about the bank officers and directors must

He

Continued jrom page 10

constructed

tial

-

resorting to price-appeal and in¬
intelligence we have—by men
creasing the purchasing power of
patriotism and good will.
!
the market by sacrificing some-.

curb so that

gut

should remember that a

and interest, plexed by the changes which had
technique (an taken place while he slept, but
taught to the he nearly had a stroke a moment

A."; and second, the
of such
affairs so that, as a mere opera¬ guarantee or insurance
loans by the Federal Government.
tional and mechanical problem, we
about business

than buyers,

amount and with luxury

recession
I think

States.

decided to "beat
a tired horse" rather than easing
his burden. They designed the '53
cars with horsepower in excess of
its present wasteful and danger¬
cars

to

the Kremlin need not

principal

only

in Korea and better general rela¬

about the same number of refrigerators, and nearly 16 million
television sets,

was

ating

his bank,

the outbreak of hostilities in Korea we not only have carried on a
vast program of rearmament but
at the same time have built roughly three million new homes, more
than 12 million new automobiles,

expansion of credit, and present
offset by higher salaries debt levels are the highest on rectaxes.
(On the whole, oper- ord. The mere existence of debts

ing
and

parity."

be as¬

by continued handouts
not too much concerned

27

(1755)

Financial Chronicle

goods, and for the re¬

pair and modernization of homes,
now represented about 13% of all

thing over 6%.

Let
duiv v

me
aeav

For roughly two years now,
nation, we have enjoyed a
*
•
remarkable degree of economic
a

„

1

ll

-

^

—

_

lotrolc
levels r\+ nntof output and employment. Substantial
ctahllltv
qt
stability at rppnrn
record

in

productive

capacity

"How, m the.. circumstances," have made it possible to absorb
with additional secondary he asked, "can the bank earn a a major defense effort without
credit extensions to finance com¬ satisfactory return for its stock¬ cutting back on our civilian econ¬
holders?"
He was surprised that omy. Thus far, it has not become
panies and dealers. .
with all these changes, the bank's necessary to make that difficult
He- swallowed hard
when he
told

me

that his bank was financ¬

ing the purchase of new automo¬
biles

on

the basis of

a

profits
about

on invested capital are still
the- same as in the early

Westridge Road to engage aaa th
in ma

'twenties—around 8%, after taxes.

small down It took him only

a

w

o-

securities

dcuui

,

a

Mr.

Vice-President

Toy ha
of

th

William P. Burke
William P. Burke, partner i
W.

guns or butter.

something of a start (as it may

business.

Hollywood State Bank,

__

Burke

P.

It gives city,
V
you, and certainly would my myth--^01"!*
me

Chhonicle)

Calif.—Paul H
* wua

Toy has opened offices at 178

loans,

choice

Financial

j

w

increases

The

va am

ly.
as

to

LOS ANGELES,

1/
vv1 j
jicl"
amplify that very brief-

&

Co.,

New Yor

and a member of the Ne\
i.
ox

:

t

Stock

moment to see ical friend) to realize that since away on

t.

Exchange, »passe

April 4.

28

(1756)

The Commercial and Financial Chronicle

Continued

from

12

page

of

process

refer
and

peace

good or evil,

for

war,

or

It is

destruction.

lor construction or

products,

erosion

a

unwar-

belief in individual freedom must
be based on true religion

ranted

wages

If

growth

'it

characterize this
steel. Yet, even
though I would certainly be the
last to discourage such a thougnt,
cf

is

to

easy

an

erosion of

I stilLthink it

acterized

as

Don't for

a

who

have

i? but it still

concern

is

to

how

fission

that they

writers

tell

have

their

revised

now

for

formula

time-worn

plot. It now goes: "Boy
meets girl, boy loves
girl, boy
loses girl, BOY BUILDS GIRL."
material

has

its

in

place

lives, each must find its right-

cur

I 3 4-4-1

r*

is

it
We

it

must

Probably

keep

time

as

and

new

not

and

take

lightly

atomic

abreast

research;

maintain

free

our

With
jn

of

we

in

that

People

talk

wasted

are

of

the

in

that

we

society in the

be

be

this sub-

have

To

means

The

challenge is two-fold
opinion: First, how do we

in

such

other

in

presses

flow

materials

to

use

make

by

The

some

same

can

pe-

universe.

forsaken
of

the

their

reacted

in

and

Those

forefathers

a

j

t

lathers, have, I be-

felt

real

With

a

void

principles to fall back

'

.

positiVe

nQ

-i

politics.

•

nncic

now

n«?p

mitom'oblie

^

are essential for a free Peo"
Tf
ig
Ple? ^ is understandable +V,Q
that

of

and

no

on

real

Yet

You
v""

think

can

amples,

and

of

other

ex-

26

I

hope

will.

you

It

under the military circumstances is time that more thinking be
1 t mafpHak Fach of these tbat prevaded at the time, the done by individuals on these subwUh the
early development and applica- jects. ?he point is that the free
well as with the entire gamut tion of atomic energy had to be economic system is the
servant
Suit <snnnlip<! that are subject to strict government su- 0f all of the rest of our

Shir

as
AP

striving

for

competitor,

you,

This

recognition.

that

is

each

cf these competitors is doing very

w

Of

..

just as

modifies
other

comcom

has competed with each
have

members

lifetime

but

eveJy

raw

think

They have

all

of

hiidishment
rot only

of

our

WHhin
Within

us

haye

we

similar

seacoasts

well. All

as

their

serve

respective geographic markets
the industry of those

developed.

however,
alert

In

areas

the

Pittsburgh

as

grew

process,

has

been

and

has striven mightily to
challenge to its supremacy. Similarly, the aluminum industry has witnessed the rise of
meet the

.i7•

facilities
fram

x

in

the

j.--

centers

far

which

area

riant for many years.

to

parallel
And

I

now

we

We

can

have

we

in

all

the

tion: How and Why?
This
condition
has

because

point

can

of

'/

name.

to

come

domi-

was

occurrences

file industries

ques-

^

had

free

"

~

"

rnnsnmpr

mv,

men

y

'

.

Trns could not have

,

come

about

without the existence of free men
end free industries. No governinent

could

no

oped

on

ment

this

status

supervision

my

created

by

this

beneficent,

it

way.
was

To

neces-

industry itself. A carindustry, whether operatits own or under govern-

telized

was

how

would have devel-

Jhave sharp compeltition
the

£alZ-

within

in

or

production

achieve

ing

matter

have

no

well.

as

Please,

will leave

one

idea that

Hood

is

I

secrets to private enterprise. This

opinion

a

la

could

this condition.

nrcsents

thrlaf

nrobablv

to

at home

free

seriousness

hope

NRA,
not

in

have

Rather

it

of

here
fromabroad.

thinking

our

awakening
of

their

this

to

threat

cries

a

right

people

some

are

areat

as

anything

as

Fortunately
people

will

the

mnrk

poiitical
faHh

Jf

liberties,
small;

large

or

and

I

would

up

T
1

al(?0
dlt>°

i,nnp

t
mat

«ope

nilr
our

we

a^rPP^nHptv wTtbrmt

nrnnprtv

of

one

that

most'

thp

has

twenty
been

Thi<?

and

years

•

fed

is

ones

to

our

within the last

alas

it has

all

but

'

swallowed

Tx

Tmtinn

monstrous

been

ever

+

_v

{JrQr)A

y

Hpr
doms in our mi^,:g order -of
minds m
importance; actually we cannot

dn

•

have

a

without the other. Each
link in the circle binding

one

forms

a

free

society and

that

Arnarina
America

are

we

the others will

destroy the base,
go

by the board,

a

Erosion of Freedom

.

Loss of freedom has not
always
been accomplished
or

summation

sudden
of

above

all

like

democratic

a

hope

to

reach

the

homely

these

and

fundamental

purple
shall

we

"Pon the tried

virtues

that

have

glVC

liVCS

OUr

shall

have

to

+and

y,_

Significance.

make

up

our

a11 tbat bonr
bonor as such

a?
w0* ±or sale

tbe marbet

on

e+xcf?t as tbey become infredl^nts that you and I and all
Secure
io

in

777vT
for

cept

such
7

good

faith

a

!

u

Pr°dUCtS
there

? laith, there

by

atom^^ower

longer

holds

really

matters

the

belief

in

that

the

he

over-all

of mankind that
cannot

and will

^^

not-be reached

Continued from
page 10

Life Insurance

Companies

And Secnrities Markets
on

the

e

Ts}gmflcafnt that' ^ the Scottish
^

assoclaid bith

was

of

moral

teaching

Take the

0t m0ral Phllos°PhyThe roots of

in

the

in

a

that

our own

firm,

rich

creation

of

system
soil

and,

mortals.

are

of

a

power

In

case of 1949 as an ex-

the

of the Declaration of
.u1:
•
Independence, ,"We hold these
truths to be
self-evident; that all
men are endowed by their Creator
with certain unalienable rights"
and s0 n0 ~ the language that
eve.ry sch°o1 boy can quote but
^hlc.h * am afraid to° few have
sludl^d as deeply and pondered
as thoroughly as they should. Re-

to

2^ bllC,

$28

ta

UiTd^:

1949

clined sharply to $14.1
billion, and
jumped to $39.4 billion in 1950.

The

of

use

funds to
amounted

$16.1

internal

finance
to

$19

billion

billion

in

ioc;n

in

1950.

sources

these

of

demands

billion

1949,

in

1948,
$20.4

and

rvtomoi
External

fnn^c

funds

as

our

on

we

now

say

Certainly, these

"inalien-

mean

that

foundations are, indeed, based
higher faith and positive

a

$1.4 billion in 1949, and $19.4 bil-

lion ^ 1950. This provides a good
examPle of the wlde variation in
demands for external financing
by business caused by

,

This lofty
language is not just
Jeffersonian oratory. It expresses
the very basis of our
society. By

ism is

of

equally wedded to

materialism.

In

relatively

a

funds. The
life

$5 g

increase in

savings accounts,
savings and loan associations

am0Unted

to

$5.6 billion in

our

billion in

As

1949

and

is

competitive

the

„

market

amount

placed

in

will

of

capital

tends

to

the

$6 3

bii_

demand

for

more

dy-

be

a

factor.

higher

depend

their

total

corporate

——+

xi

with

its

the
upon

funds

bonds

as

in turn,
relative
the

x

interest

rates

Moreover
7

attractive relative

est

rates

as

a

on

corporate

net
,

.

markets,

to

inter¬

bonds, and

consequence, most of new
funds were channelled

insurance

into

mortgages;

corporate

since

bonds

that

rates

time

have

be-

come attractive relative to frozen
m0rtgage rates

on

GI's and rnns
a FHA's

-.

"

This

long

situation
as

will

mortgages

are pegged

on

than

the

\.

the

supply

supply

side

If,

such

intereset rates

refiect

continup

.

insurance

companies,

but

also

ra

eovernm'nt^

Vj°
the governme"t guaranteed
the

as

is

as

to interest

certainly desirable,

market

are

forpp*

freed
t h

a

to

n

a

marxet torces, than a
greater flow of insurance funds
.

would turn toward
mortgages,
So much for generalities
„c

nnm

'

IaaIx

e ls actlve competition for u now look briefly at
hand, investments not only among the securities markets to

capitalism,

,

upon

against mortgages. This,
will
depend upon the
degree of attraction of
interest rate in these two

rate.

result

a

namic factor in the determination

words,

form of economic
organization
two-fold.
On
the
one

bond

sav-

commercial

°n'
companies

insurance

1948.7°"®.

lion in 1950.

the

the

economic individual liberties and

the

and consequently, most new funds
savings in have been channelled into bonds,

insurance,

of

rev-

of

the demands for funds with

in

theory

a

and

supply of certain institutional

other

con-

interrelation

tion

the

and

'
Concept of Our Society

banks,

supplied the marginal funds or
Briefly, in the postwar period UP
the balance, and these amounted- to
1951, mortgage interest rates
to $9.7 billion in 1948, a minus of were

member the words, "truths," "self- small fluctuation
m^ business con^ '
Creator and unalien- ditions. Contrast this wide variaable —or
able."

trusts, the

ings

vmonocefot^on'\Z
mTamol.nted baTnks' °ntthe

ohilosoohv

overnight

predetermined

these,

man

made us a great nation- In a11
humility and sincerity we shall
bave to adwt, a Power higher
than ourselves from whom is denX?d a P°sltlve.moral code that
Will

must-

we

„

a

of

none

and

you

ha^e f° fa" ba<*

abidine faith in

preserve

—

strengthen

into

by violent

olution

of

many

am

business

a

^

firm

* contrast note that Marxist
Social-

.

r

all times

eheis reduced, it teb,
^fs demand for funds ro between the life companies
celebrateTas'such iTTs eZal ?'Ssour rfTu^d? ^ ^ ^ fT ^ a"d thte
cpAebl]atea as such. It, is equally-side sources of funds.
Iqan, the pension

freedoms"

connected with economic free-

doms and if

that

values in

™3ral philo.s°Pher

to

"larger

an

democracy, therefore,

grown

come

.

so-called

upon

dignity of the individual and
in the supremacy of
human rights

Jrnwn

hnc
has

have

never

break, one moral principles.
Hnk is t0 destroy the entire circle.
The

of

core

could be done- 1

whole American
concept
freedom
is
built

the

economic

,

that

squarely

iiberty is deeconomic liberty it

'thinkprs lanSuage
inniKeis

often-expressed opinion

—•

believe

around which a firm faith for
modern man can be built.
Were I a philosopher, a politica* scientist, or a moralist, perhaps I could tell you how this

political

belief an(J Jn definUe
iritual
values;It is n0 coincidence in my

beyond

wjn g^ve serjous
study to the too-

nriva+p

liberties

positive moral

a

grouped'in

deep

attentively by all people.

«1 !

^

do

hard

a

- ■* 5swl-s»

economic

said

^jhinh
which

under

belief

more

be

-

I

well that the state-

of

upon

we

wholrTsv^em

louder; further, I hope those cries
and

of

our

political

also

can

will be listened to

more

•

and

pendent

become

done, and it is best done,, plan of action. All
too frequently
the free competitive move- it has
come
about through the




R]lf

here

advo-

faU",ftbe immediate of all atomic
turning ovcr
by the Government

intellectuals

developed

operating in a free market, seeking the favor of that master of
thp

hope that

j

removed

be

^Sit

gram of our fissionable

materials

with the

owns

production,

centers

the Great Lakes, but

designed to

were

the

here

toe^growtVo"'^^ to^intduft^rny^loTA'meTi-

of

on

com-

they

lies the need

and

Government^ actually
of

only

chaUengedMiy

and

billion

each

alone.

both

the

$12

as

only the tools

^ nhiHncaytiond
geographic location

these

h,gh

not

And here don't

price

cq

™
aa

each

cf the very important competition

of

secrecy abates, an increasing rec-

competed with

industry

whether

5i»s»sassa sawr — ■—

of

so

other.

tbese
tnese

each of

as more

the atom has been responsible for

Decentralization of Industry
But

pervision and control. But

u

But

eacb with significance for

and

.

code

'

that

that

twilight of achievement,

^

•

^ fheirnersfst-

orthodoxy

believe

with

«

ever

u who haye

'

well as their persist-

gone

fundamental

one
foot in the
twentieth century and one in the
ix
eighteenth in business, religion or

measurement of
values, their
quality and struction? Second if this is ac- print. No paper can be tree unless
lives haye lost a feeli
f ^
price coping with the inexorable complished, how do we keep this it is free to
.f_
buy newsprint at
icance in this cosmic environment
and
+Kio
in
law of economics.
greatest
of
developments
and open mdnoc
prices; and this in +,ir>n
turn
+
nKiiJ moniifapt.irprc b
The automobile manufacturers, greatest of government monopol- reaches right back to the primeval
We
Importance of Human Rights
enguifing the freedoms forest land.

as

not

the

various

lives'

government board.
be said of news-

ful situation, based on

y/b0
Kig skill
f j

do

but merely

religion

lieve

the presses—not steel, alio-

cated

a

faith of their

who

atomic development for construetive purposes rather than for de-

living in

say

importance

the

And stm

and

people

I

at all.

turn

steel

of

if

me

long

years

the

too

to

belief, have been giving merely be satisfied by control of the
lip-service.
And
lip-service
in Physical environment alone—one
religion is the same as no religion who believes that before we can

other

free

a

will

one

I

stand

there is

denomina-

no

to

that

return

a

ways, citizen like all of you—one who
have become
increasingly believes that probably the greatdefiant; others indifferent; and est challenge to free men
today
others, I am afraid, who have is in man himself—one who be¬
gone through
the formalities of beves that human needs cannot

private publishing establishments.

A Two-Fold Challenge

all

than

Unfortunately,
afraid

am

Some

words, presses
by private individuals or

owned

memberships

of

his

in

beliefs

have

free press without free

no

presses—in

ancj

have

and

stoutly affirmed is that there

can

v»a a

challenge

man

wh0

ject before the committees of the

that

1

think

have been

we

position

thousands

on

can

the

purposes

0f

the

glibly

"Free Press" and many

of words

of

grew.

dawn

riocj 0f unbelief—a serious unbepef jn the fundamental

agree-

freedom

and

simply inter-

record

still

rather

are

of

I

faith around which the

the

at

churches

I

seriously

the necessity of freedom

on

worship

press.

all

are

things

the

our

tions,

of

mass

social

and

forefathers.

our

however,

they mean
orthodoxy of the

sense

important than,
organization,

more

of

-i

re-

United Nations and other worthy
organizations. But what needs to

process.

my

than

too

changes

but

tVi

all—

at

not just

of

ment

greatest

"Challenge to Free Men."

We

pathetically useless

a

profound

a

scheme of things. The traditionalists will easily give us the
answer
that we return to the
religion of

often

atomic age this
interlocking state
Ua
Itr
anar»t a/3
needs to be
powerfully reasserted,

red matter.

fascinating

even

but

The

of

is

»vi /\v»a

more

of

of the metal until nothing remains

am

men.

recent

This challenge is

picture

Each

4

form

locked,

tarded, however, it gradually but
inexorably eats into the very core

more

moving

a

other

some
4 4-

structural

surface discoloration. If not

all have

we

is

because

dynamic.

that Hollywood

me

or

in

prior to, and

I

two

A i

that the

me

free

is

It

lightly—or
the

that

fusion

important,

building

with

concerned

so

far

is

The

unprotected

member

assembled

faith

familiar with this action

are

a4<

development of nuclear

and

and

goes,

things,
Fortunately we have been building faster than we have been destroying. As a matter of fact, we
are

ill

•

_

are

to

remain

importance.

building

of

i

been

seems

gravest

advances and

technical

age

i

able to talk to the point than

of materials.
moment overlook the

materials, such
a«
aluminum,
plastics,
copper,
magnesium, and that
first o f
man's useful aids — wood. This
has been an age of construction
an

•

j

here. Many of them

of other great

aad

Age." I hope

•

'i

j

ual

form

an

the other hand,

on

analysis, I believe spirit-

any

steel. At first it is little

expansions in the production and
u*e

/»

i

steel,

last

rusting. All

compare

a

ers

age

technological

ereat

■

from

it to

the

in-

to

reality. But,

and, in

freedoms,

our

be overlooked by the great speak-

better be char-

can

an

the Atomic
a

us

government

be permitted

analogy

an

on

in

might

would

f

o

the first part of this title will not

of

age

I

sert

significant that the general

...

freedom

an

of

Men

and de-

power

an

theme of this two-day conference

of Materials

Age

dispersion of

as

should be "The Challenge to Free
An

wide

oi> excessive cision, makes individual

unfair taxation

power an

ment of prices,
and profits,

Accountants

effect

of assets. I would term

Reaching the Purple Twilight
pie of the world will decide that
our products
are to be used for

erosion.

the

to

Thursday, April 23, 1953

...

the

Let
•

-

various

determine

the extent to which life
insurance

Number 5214.., The Commercial and Financial Chronicle

Volume 177

(1757)
companies

are

influence

an

these markets.

in

—

x

i

rx/r

The Government Bond Market
As

pointed out, life
companies have rela-

already

insurance

somewhat
total

*

leis

than

outstanding

half

the

new
money
market
and
a
secondary distribution market. It
a

cor-

Porate non-mortgage debt of

is furthermore

ap-

proximately $56 billion. This contrasts with a percentage of 5.6%
in 1921 10.8% in 1929 and 21.7%

little incentive to invest in 1940.
in U. S. governments, and greatly war period

Morjover,

tively

prefer to accept the risks of private
investment
for
the higher

of

long-term

insurance

terest

rates.

The

spread

stantial

psychological swings of the publie
market.
For
example,
"A"

less attractive than several years'
can invest in a good grade bond
and receive almost the same
yield"

the increase in life

have

headings of corporate

fluctuated

yield

much

as

down in

and

up

one-half

as
times

Today,

ago.

per

in

as

in

some

cases,

bonds has amounted to somewhat cent several
over
the past"
If investment opportunities of,
return involved. Only when pri- less than three quarters of the few years, yet in the direct placeinsurance companies shrink in the
vate
investments were unavail- increase in
corporate long-term ment market, there was no com- future and
the
spread between
able have the life insurance com- non-mortgage debt. The heaviest parable fluctuation. Too many preferred and bond
yields become
panies invested heavily in U. S. relative investment is in public people when talking about the attractive, the life insurance comgovernments. This was the case utilities where life insurance bond market look at quotations panies will show further interest
in the depressed thirties, and dur- holdings amount to roughly two- for
distributed publicly offered in the preferred
market, but so
ing World War II, and as a re- thirds of total outstanding debt, bonds. This presents a completely long as they are required to
carry
suit, insurance company holdings and the smallest relative invest- misleading picture of the market, them on a market value
basis,
piled up to record high levels, ment is in railroads where hold- representing only marginal buy- such interest will not be
very
In 1946, holdings of U. S. govern- ings amount to about one-third of ers and in very small amounts,
great.
ments amounted to 46.8% of life the total outstanding.
The real market lies in the new
Common Stocks
insurance

with

this compares
peak after

assets;

the

at

11.5%
War

World

I, and with 1.8%

view

such

that

fact

the

of

governments carried a maximum
interest rate of 2Vz% compared
to

considerably high rate guar-

a

policy

it is not
companies

reserves,

that the
effort to reduce govholdings and to invest

surprising
made

every

ernment
in

the

private economy at higher

yields. That they were able to do
so was in large degree made possible

by the inflationary pegging

policy of the Federal Reserve.
At the present time, long-term
U. S.

governments comprise about

12% of life insurance assets. After
the

decline

sharp

when the pegs were

in the period
in effect, gov-

ernments since 1951 have declined

slowly

as

percentage of assets
decline is apt to

a

this

and

slow

further

continue

influence

the

striking

of

aspect

dous increase in life
holdings of industrial

cellaneous bonds.
these bonds

900,000,000,

insurance

largely through
increased assets

of

Municipal Bonds

Holdings of

increased from
or

4.4% of life

$1,-

insur-

and about 12V2% of
industrial bonds outstanding in
1945 to approximately $13,600,000000 or 18.7% of assets, and probably over 40% of industrial bonds
outstanding, at the end of last
year. They are now by far the
largest corporate bond holding,
having passed pub ic utility bonds
for the first time in 1951.
There is rto reason to anticipate,
any substantial
change in the
foreseeable future in life insurance investment
policy toward
corporate bonds. Public utilities
will remain the prime investment,
industrials will continue popular

the

cycle.

upswing

The

of

way

the

in

business

which

such

investments weather such a
nicipals. During the crisis markets riod will largely determine

invested heavily-relatively in muj

it

1

•

1

*

_

i

L

_

^.1

as

valuable to inSSividuals and corporations, and
municipal yields declined to a
extremely

unattractive

level

companies.

ance

As

companies

surance

their

life

to

insur-

result in-

a

sold

largely

municipal holdings.

'

In recent years,

trend

there has been

the

toward

use

of

and

utilities

mu-

for

except

Th

rails, this
direct placement

market.

.

'

Direct placements have evolved
over

long period of

a

result

forces.

years

fundamental

of

Without

as

in-

a

The

into

going

imnnrt

stock

common

comnanies

SL

nt

Sn,lnT!lrh„S
time

present

1%

or

Ne

in

increase

changed

the
being

from

taxation,

income

has

in

individual investor limited to
an
important factor
nati0nal

in the corporate bond market to
being priced completely out of the
market by low after tax yields;
(3) the great increase in the institutionalization of savings,

as

a

result of individual preference,'
with the result that one or a few
institutional investors could pur-

importance of. the

influence of life insurance

many

itespects a marginal market. It is
Highly probable, however, that
in +

1

4-

n/trtnn

/4i nnnf

n

I

o on wi ottTC

inroads

market

the

on

iltw
likely.

are

Preferred

public

of

precedto
earned

trust

sufficient

?4%Tr
vllue

to

th

funds equation is
factor

assets

today,

have been a
factor in life

'in

vi^w

and

+

dvnamic

J.l II"! !
•

determination of

indemand facfundamental and

tor>

this

should

is

continue

to

be

the

^
future. However, from

i7the
1

next 25

the

the

years, the supply of funds

be

may

the

over

a

imoortLt

more

hVtho

factor

,

x

25

years of surplus funds and de-

issue

value

£

.

|

ex

f

life

Dresent

,

Merrill LvncH Add*

,

com

common

stocks

of

t

estimated

In

Y

insurance

(Special t0 ™E Financial chronkxe)
FRESNO, Calif.—John A An-

2%

^th^la^ge^ette^known

Street

issues,.
in

Yet

spite

the

of

action

of

Lon Grier Adds

!^™Yl'^islat.ure'thhelife
a

\

(Special

h-aV6 Sh°Wn

decreasing interest

common

in

^

stocks

1950

000.

The

Financial Chronicle)

is now with Lon L. Grier
& Co.
;

The

the post-

to

MILWAUKEE, Wis.—George M.

in recent years. In
stock holdings increased
$160,000,000, in 1951 $110,000,000,
and in 1952 an estimated
$75,000,-

never

war period, life insurance holdings of preferred stocks remained

a

less

a

evrl

a

terest U^s than the

dividends

failure

the

of

ri

w

Tmdifirmai

p

Form Richard & Co.

industry to

significant take greater immediate
insurance invest- tage 0f this law should
until

th*

T

which

really

ment. From 1931

from

dining interest rates

initkl

holdings

fd

rtT

,

restrictions

£'

oav

.

Qn

™
1
!. rapidly as

„Pnw

i

™
11 ha! ten P01"1611
0Ut that the supP1y side of the

^

the

or

'

if th

nt

1
supply-demand equation
-ga * a °than it has been over the last

h

b

funHs

seems

are

of

and

as

.,

aggregate'amounlTdir

an

{

market

Clinnl

mere is the prospect, however,
^hat their relative importance may
be somewhat reduced if pension

which have

vears

tho

on

suPPiy side.

common

Stocks

Life insurance holdings of preferred stocks amount to less than
2%

exchanges

factor

one

LfL long-term standpoint,

^neks

common

substantial

in the corporate bond

of

investments

and

program

Pmiitv

industry will remain

York

^ *'Xidend^ fn e^ch

public market

and to rhake that market in

no

such

thn

arxets.

oneXrd

surplus^ whiS^^

purther

investment

surance

*75U'U°W0 °r 1% °f

In ^arch of 1951 th

investment in equities,

hkely *° increase, but will 4
necessarily remain a minor factor both in the overall life in-

Tht

.t

.

s„rnliis

.

somewhere

$750 000 000

around

any

total

in-

,

ot

1S

The£

market

equa^

stantial

primary effect 'of the life

th

insurance

fln

economic

is at its peak, and no further sub'

insurance industry upon the corporate bond market has been felt
in the direct placement market
rather than in the public market,
Direct placements are not a new
phenomenon in the capital markets but in the past 20 years they
Have risen to a position of great
importance, particularly in certain
sectors of the bond market. Last
year, for example, direct placements totalled $4,086,000,000 out
of total bond issues of $7,725,000,000 or 52.9%; in 1951 direct placements amounted to $3,326,000,000
out of a total of $5,691,000,000 or

nt

,

on

detail, the mpre
important
of iegisiatUre
adonted a law nermit
these have been (1) the great tins comDanies to inv^t in nualidecline in the interest rate in the fi d common
stocks
an
amount
thirties and subsequent years,
or
which together with (2) the great

4

«m/\

Kf

J

and

-

The high tax rates of the war peture

-Ci 14*-»

v\

Direct Placements

"yields became attractive.

riod made the tax-exemption fea-

1

pe-

vestment policies in the future,

pnunicipals increased to 6.3% of

assets

a

t-vAli/iioo

trc\

pf the thirties, insurance holdings
of

electric

chase an entire bond issue; (4)
although the volume of new issues the dearth of investment outlets
would be substantially curtailed in the thirties and the consequent
in the event of a recession or de- pressure of institutional investors

on

Insurance companies have never

e*

market,

money

mis-

and

the life companies upon ance assets

anteed by
their

most

in war years has been the tremen- consists of the

1930.
In

The

insurance investment in the post-

basic

the

outlets

insurance
lnvestment- If valuation methods
are changed which will reduce
.

the effect of market fluctuations

you

high grade preferred.

a

in

ni1+iof„

a

the post- utility bonds in the public market

in

change

between

steadier market,, preferred yields and the yields
subject to the wide obtainable on new bond issues is'

isr less

and

fully reflecting the change in in-

29

advannot

be

"ffVOd

BROOKLYN
lini and A
-o-

u

«V,

j

o al fixed

a

N

Y—R

Giordano'

C Cape

haw. WnW

formed

,

n- tRichard & Co. with offices at 7243
in bonds and Shore Road, to engage in the secu-

come investments

almost constant in dollar amount, mortgages have been more than rities business. Mr. Giordano was
In the period of 1945-1950 the ample to absorb all life insurance
formerly with Capper & Co
gas,
electric, sewer, and water
insurance companies holdings of f
d
t high rates of interest Tn
'
plant expansion. These bonds
preferreds increased by about
8
*
have gradually carried a consider$800,000,000. This was the period addition, we are in the boom
D, H. Whittemore Adds
ably higher rate of interest than
of greatest activity by the life phase of the business cycle and
(Special to The Financial Chronicle)
general obligation municipals, and 58.4%.
insurance companies in the pre- many institutions are naturally
hence, particularly in view of the
Moreover in the industrial field ferred market, yet even during reluctant to initiate a common*
BOSTON, Mass.—Edward Fitzincreased income tax liability of and the field of natural gas pipe this period the increase in such
eerald k now with n
w
wi««
insurance companies,
have at- lines, direct placements probably holdings amounted to but 3%% stock investment program at such
:tracted considerable institutional amount to much nearer 90% of of the increase in assets. The pri- a time.
muie oc uo., z<k j?eaerai street,
nicipal

revenue

bonds to finance

"such projects as toll roads, bridges,

•

xU

u

g^ld is now wrth D. H- Witte-

interest.

totai

•

offerings.

In

the

electric

influence during this period

mary

Qn

'

The
'

future

nicipal bonds
insurance

importance of muan outlet for life

as

funds

will

depend

al-

most

entirely updn their rate of
interest. At present relative rates,
though

even
<
_

:

l-l-.

in

ably

improved

xl

consider...Ill
they will
xU

x

the

past

year,

continue unattractive with the
...

*

-m

ception of
1

A

set

ceivable,

revenue

of

our

record low bond yields.
The sharp 'subsequent market
flutuations in preferred holdings,

under

is

con-

which

degree, life companies have
_

J

iL aL.

their

X

^

A

direct

«...

mew

placements.

«

-

I

_

con-

i

i.

For

to
example,

hand,

should

depression

or

no

as

roonlt

n

a

result

rates
•

t

_

nf

_

1

1949

the

lntnrncf

-

recession,
-

.

.

w.

degree

in
11.

J

«

«

changed the

popularity of preferred stocks

as

•

sometime m the next year or two,
common
become

much

outlet. Probably

economy

ularly for schoois, Toads hospitals,
etc. Thus, a heavier relative volume
of municipal financing may
'have to tap a wider market and

Prices

of

more

appeal to institutional investors at

higher relative interest rates.

would

(special to the financial chronicle)

be lower, other outlets for investVIA

rt

VI

li-IAfl

.

T-114-1

Wl

II

n

VI

<4

,
1

V1T/VH

ment far less plentiful, and interest

rates

attractive.

less
if

Even

°we infran<:e companiesin have been
we relatively
inactive
the
pre-

look at the^ purchasers of large
public offerings such as the recent Allied ,.Chemical and Dye

full

J:

of

1951

they held




and this situation

market,

likely
present

to

continue

conditions
than

are

direct; placement market

is

strictly a new money market; there
i;++1a
The
life
insurance
companies is little or_ no secondary direct
are
the
most
important single placement market. Thus, it is a
factor in the corporate bond mar- market distinct and
separate from
ket. At the end

ferred

long

so

exist.

as

There

u

investment

'■

,

.

Mich.

Frank

—

is with

Goodbody & Co

were

and

in

Merrill

Lynch Adds

(Special to The Financial Chronicle)

DETROIT, Mich.—John V. Ren-

chard

is

with

„

to

have

on

such

a

Lynch,

Merrill

0

„

^

e common stock market. What Pie ce, Fenner & J3eane,
little influence the industry would and Shelby Streets,
tend

S.

.

Penobscot Building

advantage

picture,

DETROIT,
_

Mendel

Congress

market

•

The

Corporate Bonds

wnen

With Goodbody

attractive,

stocks

COmmon

ance

whpn

& Co., Inc.

cuumwu

in 1951, 86.9% of the bonds ac- life insurance investments, priquisitions of .28 major life insur- marily because such holdings

£ whe^ ^Xas^zed
ls iurtner empnasized

He was f°rmerly with Schirmer,
Athert°n & Co. and Blair, Rollins

stock investment would

interest

changed

_1

_

considerable

than

nVinnrtnrl

of

the

and
.1

higher

a

ensue

.

^

yields

obtain

.

acquisitions

recession

backlog of demand in

public works

*

ac-

counts for about 90% of all dinl tmomontc
onrl
in innraooinrr
rect placements, and in increasing
rnnf

other

companies comprising the have to be valued at market iaKen 01 ine INew *orK law,
bulk of the industry assets were prices and cause undesirable sur- however, equity investment of
consists of so-called in the form t^f direct placements, plus fluctuations.
life insurance companies would
expenditures, partic- and only 18.1% were purchased
jn
pas^ three years, life remain a minor factor in the over-

important

the greatest

ble.
The life insurance industry

M

municipals might become a much
more

leading to life insurance interest
in preferreds was the pressure to

fined

•*

bonds.

circumstances

however,

ex-

utility market they amount to
somewhere around 20-25% and in
the rail market they are negligi-

the

X

the public market which is both

more

life

insurance

ample outlets for
funds

in

bonds

at

attractive rates. Furthermore, the
.u

attractiveness
a

.......

.

of

would tend toward
.

.

.

.

.

siightly cush,

,

j«nlsn«.

lonin8 11 in a Penoa oi aeenne.

preferreds from

Conclusion

investors

has

the

pre-

ferred market in recent years

from

kept

(Special to The Financial Chronicle)

ST.

tax standpoint to certain corpo-

rate

Joins Slayton Co. Staff

/.

There is little prospect over the

foreseeable

future

of

any

sub-

LOUIS,

McCormack

is

Company, Inc.,

Mo.

—

with

Harold L.

Slayton

&

408 Olive Street

Thursday, April 23,1953*

The Commercial and Financial Chronicle..,

30

(1758)
'

f

' the

for

14

Continued from page

of

distribution

major

products.
Most of

this, you say, is history
whereas our problem is a current

The Institutional Acceptance

one.

We have

country

01 Consumer Credit
had

of

full maturity.
I am perplexed at times at state¬
ment on our topic emanating from

of the charge
purposes and accomplish¬
account, which most business con¬
ments.
siders tantamount to cash pur¬
The people of the United States
chasing in the main.
possess today more than $75 bil¬
Thus, a simple misunderstood
lion (estimated on a straight line
economic
situation
blinds
the
depreciation basis) worth of un¬
used services that lie in the equip¬ judgment of many who are proud
to buy for cash and "talk about"
ment
they have purchased for
their personal use. A very large those others who use the instal¬
ment
plan.
Personally,
I
feel
^segment of this has been pur¬
chased on some instalment plan. deeply indebted to the millions of
Americans
who
buy on instal¬
The instalments long since have
heavy durable goods

most

of

but this

chase

It

I know

think American industry is

We

-extremely solvent, and feel its in¬
debtedness of about 35% of net
is

worth

balance
borrowed

conservative

a

and

owned

between

cash

hold

to

plant and equipment.

outstandings

capital. Yet we practice at looking
askance upon the debt involve¬
ment of American consumers
they owe something like
against their accumulated
assets in plant and
equipment.
Recall
too
that
this
entirely

-when

2ti%

he

and

multiplying
six

volume

business

over.

changeover? Of course, the sav¬
finding in¬ ings may have gone into this
man's
personal income. On the
dustry debt at the 35% ratio point.
The

remaining portion of con¬
indebtedness
stands
off

sumer

against investment in asset values
which are hard to measure, but we
presume

these values are equally

important to the American people,
could

and

into net

translated

be

dollar worth which, when consid¬

ering the debt against it, would
leave our people
equally wellsituated

debt-to-asset

the

to

as

ratio of industry, agriculture, min¬

ing and the other great segments
of

our

It

other hand,
have

credit

the

to

end

con¬

that

all

competitive

a

portions

individual

An

must
cus¬

case

possibly 65% of

expect repayment of their
loans of 1951 and 1952 for indus¬
banks

major appliances and furnish¬
distributed on credit terms
credit volume can¬
not be brushed aside by recourse

trial

fields if in turn now that they are

obvious

too

it

that

credit

handle
must

consumer

thought

observation.

a

lot

business—and

cost the
other

cost

There

world's

the

so

more.

provoking

wages

production,

in volume

by

the

plan,

considerable

outstandings

sible

facts

-judgment

which

upon

in

base

to

measuring

institu¬

.

There

is,

for

instance,

manufacturer

-known

of

well

a

my

ac¬

quaintance who is bitterly opposed
the

to

while

of

use

85%

consumer

the

of

dustries,

lions of

tional acceptance.

output

credit,
of

his

plants reaches consumers only
through some sort of credit pur¬

are

employed families in turn
and

consumers

creates

made

markets

their

income

for the products

by still other millions. This

chain

of

enriched

economic
all.

us

It

reaction
has

built

man

One

up

It

class

was

an

family,

used

in

this

ordinary middle-

today

could

buy

a

consumers' durables
had

a

volume

in

million.

be

so

for

there

are

in¬

such
It

than

inconceivable

a

fraction

output.

is

duction
in

people of this coun¬
try bought on the instalment plan.
Incidentally one reason why Rus¬

minor

a

an

industries

not the little

can

and

few years

that

increase their pro¬

sales

tremendously

without

some com¬

parable resultant increase
dollar

totals

whole

of

consumer

in the
credit

refrigerator for $400. The sia must continue to rattle the outstanding, when one refers to
family,
however,
points
with sword or face economic oblivion products not readily distributable
pride to the fact that it pays cash is that its (-arms production plant except on time-payment plans.
for everything it purchases. What was built
Cut back the total of these out¬
directly upon and for
these

products?

Television

war.

There is

no

civilian

market

sets, fine standard plumbing, fur¬ for its products should it be per¬
niture, floor covering, refrigera¬ mitted to turn to consumer out¬
tors, and so forth. Yet it is quite put. Why no market? Because
-evident

jftiat

on

such

considered

products

thought,
would cost




there is in Russia

broad

use

of

facility for
instalment buying
no

credit

consumer

measurable

responsible for the dis--

that those

semination

statistical data re--

of

fleeting the consumer credit mar¬
kets should permit the high-light¬

the extent of its
for many

fits

$2 bil¬
in 1953.'*"
mills had only started!

stalment credit rises from
lion in 1945 to $16 billion
In 1945 our

of

use

by the public

people enjoy the bene¬
institution in society

an

without becoming

articulate as to
We have esti¬

to

electrical appliances,
furniture factories;,
just commencing to procuremore time-tested ingredients;,

produce

for consumers;
were
once

products to replace the-

their

for

materials

ersatz

of

time;

war

ac¬

just once morereasoning.
becoming available to the carpet
mated that ten million families in mills. The extent of outstandings,;
the United States two years or so of consumers for the purchase of
ago did not habitually use the in¬ such
products at the war's end!
stalment method of buying and obviously
was
of no statistical!
their

very

count

infrequently the charge ac¬
system.
Without question

disbelievers to

these erstwhile

of

the conclusion that they,

too, can

ceptable wool

was

significance for purposes of com¬

earlier

the

of

to thosewhich most

statistically

comparable

era,

perhaps to what has taken placer
and it in
our
public
school systems,
is the natural presumption that where entirely inadequate facili¬
these new households are using ties at the war's end have been*

there were

credit

a

few

least

at

•

the

per¬

same

used

already

who

tabulations

earlier

when

to

dollar extent as do

and

centage

years ago,

credit
on the

to

is

call

fect of

dollar

trite once more
attention the ef¬
the changing value of the
perhaps

to

your

the amount of consumer

on

Unlike

outstanding.

credit

some

the average

in less than 11 months

(the term varying by industry, of
of
course).
This
makes
consumer
credit outstandings more imme¬

better

are

of

degree.

It

must

more

family which like my tries readily converted to war and
bought a refrigera¬ defense production. The military
$3,250. This was a cash might of our nation could not have
.purchase. It was made before con¬ grown to its present stature had
credit

channels

the

sufficient cash purchasers to take

a

This,

that it seems inconceivable to mej

steadily by the building:

overcome

of

and better schools so that:

more

the

by
one

statistical

same

expenditures

in

terrific

rise

schools

between

Yet

we

know

one

of the finest

the

for

1953*.

and

1945

well this has beer**

could

nation

process*,,
alarm the-

with

view

could

investments the-

during

made

have

period. It is merely that we*

who have
homes

come

to

their

own

live

to

or

in

own;

separate-

dwelling places without doubling;
up

grandparents;,

parents,

with

friends and others,

who have

ac¬

000,000. In 1953 this plant expects forms of industrial, agricultural cumulated tremendous worthwhileto move a $4,000,000,000 volume.
backlogs represented in*
and real estate credit, consumer service
Most of these products reach the
credit turns over rapidly. Instal¬ products as well as dollars, by in¬
public through instalment selling. ment accounts today pay out on stalment savings plans, attest to>

assumes,

for

field.

time.1

in mind, II
suggestion!

near

In 1952 this
manufacturer's sales were $365,-

own, years ago

sumer

this passage of

of sale without

With these thoughts
cannot refrain from the

in consumer

the

in

great

of $70

1946

To,
these
durables
industries
products that brought him these which could not have been de¬
millions, was all the while eco¬ veloped without plentiful use of
nomically unsound.
the instalment plan, are the indus¬

tor

the point

to

consumers those

decline

manufacturer

business, hence wage payments
throughout our economy; in trans¬

able to accumulate and pay for the

I know

ucts

surely.

has

since portation, communication, recrea¬
as
in the obvious
be is already a millionaire, the tion as well
means by which consumers were
directly resultant directions.

chasing. This

we

market

are unused to the gigantic figures;
outstandings over those of earlier
in dollars used that have accom¬
future, periods, even had the value of the
is quite alarming to contemplate. dollar, hence the price level, and panied this progress. ,r :
It can be said that the public
Its effect on the assurance of the the average dollar credit used per
banking world as to the certainty transaction remained stable dur¬ schools as now modernized haveof repayment of large outstanding ing the period, which, of course, institutional acceptances.
So can it be said that the peopleindustrial loans would be shaken they did not.

consumers' durables in¬

65% or 70% of whose
products reach consumption by
the instalment plan. These mil¬

pos¬

said before by the

fact that
money
invested
in
plant and
equipment to produce cannot re¬
sult in an increased flow of prod¬

as

only on the instalment earlier period, and (2) for a siz¬
disastrous effect of a able segment of the increase of

the great

disposal all

earlier value.

to

those who should be interested in

their

equipment has reached its maxi¬
mum
output. This lag is caused,

assimilate this increased extent of its outstandings were
output? When one considers that published.
This in itself would
these products are in the main the account (1) for the ability of our
larger more expensive "packages markets to distribute roughly 25%
of services" that can be bought more durable products than in the
gate

are

highest

the consumer

should be unwilling in the aggre¬

to

today
several million families supported
at

full

in

quick conclu¬

must

expansion in

it have

at

the

can

way

the economy of

the

debt than existed in the

families in the United States than

other

what

In

ings

sion

period of months or even a year
after the manufacturing plant and

an

markets.

of

our

to

greater propensity to go into
erstwhilewith
the
dollar
at its;

any

it would be enjoy a higher physical standard Americans would call strictly
indication that the of living by the judicious appli¬ temporary war-time situation.
newly achieved productive capa¬ cation of their personal credit to
The American family has ex¬
city was not in fact needed; that this end.
perienced a change in its livings
its
Moreover there are 25% more situation
ouput is repudiated by the
somewhat
comparable
clearly

mar¬

passed on to his

course—but with

An

to be our duty to con¬

tinue research in the field of
sumer

been

tomers.

economy.

seems

in

considerable

ket

a

present time,

the

at

try are considered in

•

for

accounted

should

ucts

cash and plant, of indus¬

sources,

the

purchase of these new prod¬
not continue to rise

ment

this

in

effected

been

ir^ credit outstandings represents

outstandings

increase

to

accomplish,
is
bearing
followed,
housing
has
become
doing the same thing (for our en¬ fruit. More effective perhaps has
more adequate and these families;
tire productive capacity in the been the satisfactory experience
have undertaken a new existencedurables industries has risen rap¬ of friends and neighbors who have
under separate roofs. This too has.
idly, much of it on borrowed bought major products on credit
capital), it is evident that if con¬ since the war. This example, be¬ required an entirely different set
sumers' obligations for the instal¬ ing contagious, has brought many of credit circumstances not truly

Is it not obvious that econo¬
have

continue

parison with those extent under
in part for the educational work which has free-market conditions.
the steady increase in industrial been accomplished thus far, in¬
You
undoubtedly
recall that:
borrowings. It is only right now, cluding the training of the people
throughout the war millions of"
in the spring of 1953, that this to use
instalment credit wisely,
families were living two and threenew
plant is beginning to pour and to understand what should be
to a house, even two and three to*
its output into the consumer mar¬ expected of it as well as what it
an
apartment. In the years that,
kets.
One of hundreds of plants cannot

his

mies

.

banks during

the

by

and

year

times

whereas all the re¬

cumulations,

plant early in 1952 borrowed

A

averaged

total

and

Government

Federal

vanced

consumers
concurrently
•owned cash and other dollar ac¬

ignores

so.

or

years

$20 million for a new factory and
new
machinery to increase pro¬
duction. These millions were ad¬

bookkeeper to his

one

while

payroll,

three

past

individual judgment.

old store. He has added one

clerk

that

the matter is

of

planners, as well as the
result of managements own best

$365,000 per year in volume, and
has transacted this business in the
same

the up¬

on

Federal

down.

has

the

the

of

selling business, without changing
his product lines materially. For
now

credit

Consumer
will

great durables plants of

for

$65,000 per year. He de¬
termined to go into the instalment

years

still.

are

This has been much at the behest

of about

ten

value,

In considering the institutional
this
country
rapidly have been in¬ acceptance of consumer credit,
creasing their capacity to produce possibly the best measurement is

cash. He did volume

sold only for

parallel to changes dollar
it is erroneous to presume
that this resultant dollar increase

employment to a partThere really isn't any

be choked back to any

The fact
the

retailer who for years

a

.

and

ward trend.

market continues

prices

V

'

The Federal Government is en¬ ing of comparisons between credit
business had about joying an extremely high flow of outstandings at the end of World!
reached
a
plateau,
after their tax income resulting from our War II and those of today as, ,a~
present high speed flow "of prod¬ statistically sound picture of what:
rapid rise of the last few years.
The bank then went on to say ucts from manufacturer to ulti¬ has taken place in this area. Con¬
mate consumption, which would
that it notices with some concern
stantly month after month, evem
that consumer instalment credit suffer greatly, of course, should in headlines, we still read, "In¬

the latter,

instalment

vast

of our producers'

that

than

tion

pointed out with some satis¬
that the rising loans to

industry

the cash pur¬
chasers would not have sufficient

be said roughly that

can

National

Chase

the

"*

'

■

faction

are

the
cash to purchase the number of
manufacturers' plant and equip¬
these products they now enjoy.
ment extant in this country is
Some argue it costs more to buy
mortgaged to 35% or more of its
total
value. Consumers perhaps on the instalment plan. I have ex¬
amined this considerably. Much
©we $12 billion on their instalment
could be written on the subject,
plan purchasing against their $75
billion "plant" at today's straight but on the average I believe it not
line depreciated value, i.e., an in¬ only costs no more to buy on the
debtedness of far less in propor¬ instalment plan, but actually our
*

Bank

plans.

payment

time

on

Without

York

New

right

recently

instance,

indebted to the millions who pur¬

tion.

For
here in

otherwise very sound sources.

purchasers

ments. In truth all cash

paid out for the most part,
accumulated wealth con¬
tinues to render its service and
constitutes true savings accumula¬
been

ever

to grow to

the use

including

its

to

again can be sold
consumers except by heavy use
the instalment method, allowed

to

sales

the

out more

'

:

.

.

what

time week.

developed in this

now

producer's plant which
products in a

a

than

year

market for them been
confined to cash purchases, even

much more in dollars today

credit has been given no
-fair chance to develop, because
©£ economic misunderstanding as
djumer

of

back

other alternative.

will turn

!

'

pipelines of wholesalers, re¬ ly increases to reflect this change^
manufacturers; second, Since, generally speaking, con¬
the layoff of workers or the cut sumer4 income
fluctuates some¬
the

tailers and

standings either by voluntary acof the public or by outside

diately susceptible to the devalua¬
tion of the dollar than any other
When
to

interference with the competitive

market, and only one result can
follow, that is to say, firsts the
backing up of unsold products in

a

in

$400

if

make

the

the

written

dollar
on

finance the same

a

few

continue

average

same

the

of

course

to

down-

latter's

use

attainment
result
in

two).

of

in

full

Accept¬

progress

strength

private

and

.

prosperity

As
a

in

the top of a hill. Down

on

the

valley, in the anthracite
district of Pennsylvania, were the
little

homes

of

hundreds

I

books

to

ing in

house where there

to

the

productivity as the
borrowed or owned

plant and equipment (in content
the discussion of "the last page or

the*

boy, I spent much time ir>

a

house

miners.

only

of

which it has been accomplished.

of

product obvious-

done-

system within*

enterprise

amount

the

reference

of investment,

new

with

this

this

anything but increase the stature,,

a

running
without

1 I

Institutional

has

Nor

ance.

extensive use.

consumers

payment,
credit

in

$300 refrigerator goes up

years,

tion

•

credit

of

type

the

cannot

water,
a

veniences

no

of

ever

coal
liv¬

was no-

bathtub,

and!

good many of the con¬
of the times. I didn't

understand
—*. that

recall

then-—but

the

know

hundreds

*

now

of. small

houses around the bottom of the

Number 5214... The Commercial and Financial Chronicle

Volume 177

lull

if

few,

possessed

of

any,

these comforts. I was in this house

time

one

bullets; riddled

when

window and when, with the
my-family, I lay flat on

/every

of

jrest

Jthe

floor,

ate

meals

my

the

on

ffloor, slept on the floor, for two
(days or so.
Yes, the issue was wages — or
so the
papers said—but underly¬
ing their interpretation that it
more

was

they
that deep

in

pay

money

wanted,; I believe now
down
the
little
people. in

the

Blouses at the base of the hill enwied

the

acetylene

-coverings,

floor

lights,

and

yes

the

the

—

bathtub; and rapidly they

explanation to invested between 20 and 30 bil¬
can
get an lions of dollars annually, in recent
dollar. It will keep years, in new plant and equip¬

And he told of his

Ingersol for

a

There

growing in America

was

then what fully exists

today—the
the people that "the

feeling among

hand that makes has the power

to

belief that it has

take." I add my

"right to take" and the "right

the
to

—
a right that in my
judgment enterprise guar¬

enjoy"

humble
antees

and seek

all who work

to

exercise within the framework

igrowing to hate the family at the
5top of the hill. For in our coun¬

of

our

earlier

its

from

awakened

try at

tem

-was

lethargy toward the upward striv¬

which

that

ruined

has

many

/great nations of the earth.
While

wages,

money,

the

was

publicized issue at that time, as
it often

amoney

I

now,

as

overheard

once

ilolks

the real irritant

the lack of
and "status" for which
can be exchanged. '
;

things
•

is today,

then,

was

grown

my

talking in those days with

i;he President of

great American

a

of the people
succumbed
the terrible upheavals that have

ings of the
to

masses

today would have

we

couraged to accumulate the per¬

possessions of man's normal

sonal

choice if free to choose.

.-asked, "How

the

watch?"

In

^President

I

can

own a

+

telling the story, the
this great company

of

commenting, by such

~was

ample,
man's

for

was

a

man

circumstances

Lpossess a

ridic¬

utterly

how

upon

ulous it

to

ex¬

an

in work¬

aspire

to

valuable precision watch.

expansion.
This hasn't been generally under¬
stood, partly

ventories

isms

rest

revolutions

and

of

attest

to

the

of

Consumer

Credit

Acceptance

as

a

years

The

-^Manufacturers has issued
ment
'

against

warning

alyses

ated idea

;-as

as

the

to

imposed

on

flation.

In

of

in which it has

research of the NAM,

.

four-fifths

That

the

of

$20

to

billion annually invested by
in recent years has not
'been for expansion but for re-

business

placement;
retained

have

stock

know it."

Further, an increase in business

to

billion annually, and
*4hat corporate debt has increased
-~:from $85 billion in 1945 to $156
at the

intensifies inflationary
the research report con¬

credit,
forces,

"Thus,

no

matter how the ques¬

end

impossible to
complacency a con¬

tion is viewed, it is

regard with

(3) It is truejhat the retained
profits
of
corporations, as re¬
averaged about 10
billion dollars a year since 1945?

have

But, two-thirds of this reported
amount have been needed simply
to maintain the

of

1951.

ternative

sources

are

New contributions of

tal—in

the

of

form

lhad

ditions

serious effects

on

the health

of the economy, but inflation has

t

suppressed their
study declares.
In

the

course

study

since

points out—but
doubling of the

"

a

>.

combination

peculiar

of circumstances

has made busi¬

borrowing necessary and at
the same time has tempered the

ness
f

«effects of borrowing on

such

i

the busi¬

firms mat resort to

study

explains.

it," the

"Does this mean

tihat businessmen should view the

"{progress

of inflation

with satis¬

faction, and hope for its continua¬
tion?

-sighted

This

would

position

"businessmen

are

from

this

expansion

of

were

so

percentage of

same

tional income

increased

as

na¬

in the 1930's, the

as

as

final

that

supply of venture capi¬
increased, either one or a
combination of the following re¬
is

sults must ensue:

"(1)

o m m e

rce,

urged

of

-

bear

manu¬

t i

c a u

negotiat i

be

cease, or

be

and

a

not

short¬
many

likely to take it.




-

must

con-;

"(2) The real burden

of busi¬

must

taining provi-'.
s

i 0

for

n s

a

Dr. Waldo Fisher

nteed

g u a r a

"extreme

the durable goods

supplied

capital

new

period.

annual wage plan,

an

according to Dr. Fisher, unless it
has made a careful study of its
record of fluctuations

in

em-

ployment and demand over a long
period of time. He suggested determining the unemployment hazby

per

and deter-

production,

and

The book increase in own¬ mining the causes of these fluctuaequities in unincorporated
tions and what can be done about
business have averaged less than
Then, he said, a company
a
billion dollars annually since them.
1945. This is less than the amount will be in a position to find out
(6)

needed to make up for the failure
of

charges to current cost to pro¬

vide

whether it can

guarantee wages or

employment and what such a

fully for the maintenance of
will costi
; 77-.

(7) Although business accumu¬
liquid as¬
sets
during the war years, on

lated large amounts of

plan

management is compelled to

If

since 1945. Apparently busi¬
has

considered

it

"(3) Inflation
must
continue,
reducing the real burden of

billion

dollars

at the end of

156

billion

dollars

to

the

at

1945
end

1951.

tion has been to reduce

burden

real

the

sively

progres¬

of

the

Business has borrowed large sums

the

year,

central

problem

of

present-day

A

summary

the

of the conclusions
follows:

(1) It is true that business has

plan

said,
mean

upon

For

of

indebtedness

has occurred

of course,

expense

of

the

creditors

..

to¬

° d

a^d hence had not gone
*brougb tbe. deep dePression of
th® early thirties,
Experimentation has been to©
hmited, Dr. Fisher concluded, "to
warrant any optin^stic endorsef1®
unlinaited plans except in
industries in which the demand
for the product is subject to only
minor fluctuation and in which
seasonal fluctuations in output can
be Predicted with reasonable accuracY' Their extension to indusgenerally is not justified on
the basis of available knowledge."
.

.

J. H. Goddard Adds

as

to

the

fi¬

of the funds and

will benetransfers

years

:

squires

praisal, the study says.

a

re-ap¬

With Hornblower & Weeks
(special to the financial chronicle)

the breaking down

this

Federal Street,

f:

concession," he declared.

(4) Stop

Joins

bargaining on separate
instead, negotiate

total

the

amount labor

among

McCoy & Willard

(special to the financial chronicle)

BOSTON, Mass.

is to be Hurley has

talk

McCoy

that
the various de¬

—

joined

Barbara

the

staff

S.
of

street.

annual wage.
guaranteed wage
employment obliga'on to one

mands, including the

&

Willard,

u.

(5) Limit any

«

c

yA„

Federal

30

AIUr»
,

specified percentage of

Henry S. Allen, partner of
Spencer Trask & Co New York
Passed awa? at the aS» <*

lull.

70*

or

'dure of *
the payof.payroll, e.-

nancing of busmess operation in year and to -he expor
recent

shire Street, members of the Boston Stock Exchange.

union demands;

gether, suggest that the generally-

opinion

9

±

"Management should insist

amount

taken

conclurmns,

These

and

impact of such
BOSTON, Mass.—-Joseph Llfunion-management ^uk is now affiliated with J. H.
example, Dr. Fisher Goddard & Co., Inc., 85 Devon-

at given in benefits and then
distribution of
of about the

business.

are

of
BOSTON, Mass. — Herbert I*
rigid craft job classifications. Ferrari has been added to the
Wage guarantees will require the staff of Hornblower & Weeks, 75

net

tolerable.

nation's

that year were lesg than 1Q

The need for

will require

on

The

the

specified or unspecified reasons,
Almost two-thirds guarantee full^me hours or pay for the full year,
ubout a fourth have extended their coverage to all employees,
The costs of unlimited plans are
high except in companies operating under very favorable economic
circumstances, Dr. Fisher warned*
and in a long depression might
well lead to insolvency. A substantial number of the known
plans had failed by 1946, and most
of the plans still in operation in

factfinding
negotia-

seniority requirements will
that short-service employees

little.

fit

the

debt.

of

nondurable consumer
industries. They tend to
guarantee employment rather
than income, most often for on©
year, and many of them permit
cancellation of the guarantee for

at

long-service employees

the relative burden of

existing

covered

earners

1%

(Special to The Financial Chronicle)

relations.

tices.

accepted

business finance."

made in the study

This,

a

re¬

already

wage

under

(3) Point out the

has

of inflation

lation

changes occur in the general eco¬
nomic climate. This, then, is the

attempt

but at the same time removal of all make-work prac-

process

debt.

are

any

will receive most

(9) One of the effects of infla¬

in.

consumer

higher prices.

goods

tions.

(8) The chief source of funds
expansion in
the
postwar

effect has been to make the cumu¬

equally undesirable. But they
inescapable,
unless certain

Insist on joint

(2)
before

for

thus

"All three of these alternatives

employment directly.

necessary

(or at least advisable) to maintain
substantial degree of liquidity.

an

on

antee, Dr. Fisher

tive,

a

duced

'

or

bargain

In¬

in- total of employees. These plans

management should attempt

negotiate

ard

the

to the

on

of

of

well

plans.

rates

form

number

wage

own

to

productivity.

particularly, should use concentrated in small establishcaution" in negotiating ments and in the service, distribu-

dustries,

No

relationship
of

250, Dr. Fisher estimated, and the

annual wage.
Firms in

'

The number of guaranteed
wag©
employment plans now in oper¬
ation
probably does not exceed

ers'

increase,

indebtedness

ness

for

or

.

sales

each

,

standard

a

that exceed this rate must

passed

the

n g

employment
contracts

rate

creases

in1

o u s

close

a

general
1

facturers to be

in the postwar

(5) The

outstanding business indebtedness.

expansion

Business

Fisher, is considas

(7) Point out that, according to
economists generally, the share of
the income going to
wages and
fringe
benefits
must
normally

by stock issues has amounted to
less than 2 billion dollars annually

expansion would be wholly wiped
;;1

out.

of

is

conclusion

cording to Dr.
ered by some

for additional commitments.

-'

and

nance

C

^

Fi-<V.

of

analyzing annual lay-off
100 employees, measuring the incidence of seasonal employment by comparing monthly
or
weekly
employment figures
with annual averages, analyzing
fluctuations in physical volume of

surplus of profits available for net

only trivial period has been borrowing. Cor¬
porate debt has increased from 85

equity investment.

or

are

ness

proprietors and

unless the

.

"Thus
•

net

reasonable level of dividends.

be the

to

issues

evidently not been
to encourage risk-taking

tal

iprice level through inflation has
l&ept the "real burden" of business
'debt at approximately the same
hievel.

stock

have

its borrowing,

indebtedness

the

the

for

in amount. General economic con¬

approximately

of

•doubled

M939,

available.

equity capi¬

been

partners—have

"The

has

*ihe simultaneous

the

symptoms,

business
its

a

ness

then is what al¬

"The question

and investment by

j

tangible assets of

available

been

years

NAM study says.

f The shortage of venture capital
-—forcing business to finance it¬
self largely by
borrowing—has

•

School

assets.

tinues.

Z less than $2

^trillion

Ameri-

Pennsylvania,

issues

the average

on

of

profits

merely for
tangible ; assets;
'capital supplied by
amounted

Manufac-

employment guaradvised that it:
balance
these
have
not
been
replacement of tinuation of the dependence of
(1) Demand that the union also
drawn on, to any substantial ex¬
that the
new business on large-scale borrowing
tackle the problem of regularizing
for financing its expansion," the tent, as a source of funds in the
two-thirds

that

corporate

rgone

ihas

a

debt, like any other expansion of

-$30

I

The con¬

could Jead

general economic catas¬
which might very well
destroy our business system as we
only to

the follow¬

emphasized:

are

economy.

inflation

trophe

rCr. Hagedorn, assistant director of

ing points

general

the

with

the

manner

dollars

Wharton

University

business is

The health of

tinuation

study prepared by George

a

their creditors by in¬

health of

■t)een financed."

i

normal

more

idea

false

a

through

activities

their

up

and

rather fi¬

would

"Businessmen
nance

wrapped

expansion

ness

-

'

of

cedures

an

billion

10

of

rate

a

nually since 1945?

If dividends

exagger¬
to the extent of busi¬

have created

at

profits
has
been
made possible only at the expense

an¬

and said
statistical

postwar business
"usual incomplete

been

undistributed

of
the

financing

the

about

cency
•

'

the

\

such

plans.

can

to

capital-raising, pro¬
than through the losses

compla-

in

(4) Even this small surplus of

has been for replacement and

of

state¬

a

depreciation

corporate assets.

for expansion.

Association

National

at

Conference of the

integral

annually invest¬

Points out four-fifths of the $20 to $30 billion

not

address

an

tunng

and employment guarantees
because
these
industries are so
corporations, since as a result of
sensitive to cyclical fluctuations,
part of enterprise itself, without the rising price level adequate
he declared.
Such companies, he
which, well and intelligently used, provision for such maintenance is
said, will probably find it necesthe
whole
system
would
be not charged in current costs. Only
sary to set definite limits on their
about 3 billion dollars annually
jeopardized.
financial
liability
under
such

Institutional

general

Capital Investment Data

by business in recent

has

than

greater

the

the /world

of

In

of the

annually in certain years, and has
averaged
8 billion dollars an¬

source

ed

one

wage

r

Management Association, held feasibility of a guaranteed olan. >
m New York
City, Dr. Waldo E.
business accounts are less than
(6) Insist on making any ^
the actual cost of replacing the Fisher, Pro¬
anteed plan a contributory one to*
fessor
of: In¬
capital consumed*
discourage the union from com¬
dustry at the.U
ing back year after year to ask
(2) It is true that the increase
for

made

ances

have

NAM Critical of

because

inflation is that allow¬

of

effects

ported,

The freedom of our nation from

unless they set definite limits under

contracts,

wage

fixed

for

,

School of the

net

But, approximately half of this
plunged the rest of the world into increase represents the additional
chaos. In no other country has the cost of carrying the same physical
enterprise system developed the volume of inventory at a higher
great consumer credit facilities price level. Only half represents
which have permitted us to escape a genuine increment to stocks of
the troubles of peoples not en¬ goods held by business.

who told how one
of his employees accosted him and

■watch company,

expenditures

represents

in the book value of business in¬

private system.

believe that had not our sys¬

I

business
assets

Guaranteed Annual Wage j

on

Fisher, Professor of Industry at the Wharton
University of Pennsylvania, points out durable
goods industries are sensitive to cyclical fluctuations and therefore subject themselves to financial liability in guaranteed

good time; get you to work
But, about four-fifths of this
and get you home on
time. The watch you make in our amount has been required to re¬
plant is for those who can afford place the capital values currently
used up. Only about one-fifth of
expensive precision watches."
time,

on

Industry

m

Dr. Waldo E.

ment?

very

to

&o

Warns

workman—"You

the

were

that time, a class system
emerging—somewhat similar

(1759)

Six p<

en

c

.U

t

32

The Commercial

(1760)

uo/t

{mm

LOniinuea

need for the making of loans to its retire the term loan in full. Thus,

1R
.o

nnrtP

jrvm page

i

clients.

.

it
®

Prospects for Commercial

there

are

many

banker can do to of

a

situation and insure

a

A*)lfC

Uwllilw

re-

payment of the mohies advanced

porate securities? Originally, I felt
that

the

of arriving at a
concerning a term loan
process

and "again cheerfully grant loans
to a business in which we would
never think of investing money

involved will find that they will decision
have to carry larger unit quan- to a business was essentially the by buying bonds, debentures or
retailers
In turn individuals re- tities of the
items handled by same as that of deciding whether stock.
ceived less in the way of credit them. Likewise, competition will to underwrite a securities issue
In closing, I woul^ like to sumextension from retailers. The net force them, to extend more credit f0r a corporation.
In fact, I felt marize the major paints which we
result of all this was that a smallthan they have been offering to s0 strongly on that score that I have discussed.
We pointed out
er amount of bank loans was retheir customers, and to permit decided that I would collaborate
;
—
and wholesalers were able

times

do'the

to

sort of thing with

same

the volume of

quired to finance

dur-

transacted

business

civilian

ing the war years than would have
the

been

in

case

neace-time

equivalent

an

economy.

the

With the ending of the war,
situation changed

to a very conThe removal of

siderable degree.

rises in comBusiness concerns
began to carry larger unit quantities of inventories and, of course,
the price of each unit had been
controls

permitted

modity prices.

demanded

Customers

increased.

periods of
time in which to pay their bills,
and

obtained

longer

factors

These

greatly increased
the requirements of businesses for
working capital. Furthermore, the
postwar years were ones in which,
all know

vou

as

there

sub-

was a

stantial investment

in

by businesses
improved fixed

and'/or

new

assets.
Where could businesses turn to
fulfill

their requirements

ditional cash? Securities

for ad-

were

sold

their

periods of in the writing of

longer

clients

a

book on the

for their subject with a brother-in-law of
Federal mine who was a securities underGovernment has announced its iri— writer. Before we got started, the
tention of retiring from the busi- war came along and since then I
ness of loaning money to farmers have changed my mind to a conand businessmen. Much of the siderable degree. To my way of
slack will have to be taken up by thinking, there are some rather
the commercial banks of the coun- fundamental differences between
try. Third, if we do have a de- the granting of a term loan and
cline in general business, the Fed- either the underwriting of a seeral Government, the states and curity issue or the process of arthe municipalities undoubtedly riving at a decision to buy an outwill increase their spending for standing bond or stock of a corpublic works. The banks will have poration. What can an investor
a chance to make loans to the do if he buys a bond or a debencontractors who will perform this ture of a company and later dework. Finally,,we have a special ddes either that his original decisituation here in the Philadelphia sion to purchase was erroneous, or
area in that the Delaware Valley that the condition and prospects
area is on the threshold of a pe- 0f the company have so changed
riod of long and sustained growth, that he no longer wants to hold
This will result in increased busi- the security? The most that the
ness activity in the area, which investor can hope for is that he
time

which

in

to

Continued from

to institutional

investors, but this solution was
open only to the larger corpora-

was

small that

so

ings was not the
suit, businesses

retained

As a
forced

answer.
were

wm

smart

be

enough

or

lucky

by banks.

enough to reach that decision so
In
conclusion, we may state far ahead of the other holders of
that, while the net effect of these such bonds that he can sell, his
factors will be that a decline in holdings without any loss of pringeneral business will reduce the cipal.
If he is not that prompt in
outstanding volume of bank loans, reappraising the situation he must

Loans

Loans

resort to loans from banks.

J..

_

,

„

.

Bankers Receptive to Expanding:

Credits

surprisingly receptive to their

requests for credit—much more
than

been-the

had

past.

Not

too

many

in

case

years

so

the

have

passed since the time when many

loaning officers sat back and

to

businesses

might

as the backbone of combanks. After World War

mercial

ended, commercial banks

Ag

far

banker

the

ag

is

con-

businessmen

come

in-

to

were

making loans at ah average interest rate of only 1.95%. From this

pects

should be deducted approximately to
one-third of 1% to cover the cost

„

Ilv

1

VflZlCltllflU
c

*11111

*

And

n

'

V
throughout the world, and their
production^ has

,

therefore

grown

mainly to supply expanding do-

to find a suitable manner in which

they

can

meet their customers're-

quirements for credit.

This is evi-

of

a

serious

a

borrower deteriorate
degree. A term loan

of one-third of

denced by

day

are

the fact that banks to^
making many types of

loans which

of,

or

were

not

utilized to only

even

a

heard

small de-

gree m years gone

by. These inelude term loans, revolving credits and the financing of leases of
trucks, oil tankers, passenger cars,
service stations stores, and office
buildings. In addition, banks today are making a great many
more

the

loans

than

security

of

they used to
accounts

on

receiv-

for

has

ever
seriously considered a
question such as this, because if
a

bank

ing

were

loans

only

to

several

for it

discontinue mak-

even

for

a

months,

period

become dim indeed,
This is due to the simple fact that
businessmen are attracted to a

meeting

the

a

reputation for

reasonable

require-

ments of its customers for loans.

Conversely

they

are

he

management is not
solving the problem,
suggest that the necessary

can

of

terial. It it

pulps and papers othej than newsprjnt increasecj fromr 40% of our

free.

total

production in 1946 to about
l951
and ^
vigorous

should

if the

ever

I question

comes,

long remain truly

press can

-

i<be

second

*

conclusion

I

draw

s?conc1 dra™

f

45%,in
growth

is exnected to

continue

*

growth is expected to continue.

L

Tw
5
Canadian. me
fact 1S that today and for many,
+

In 1952 Canadian newsprint years, this country, the United
P:roduction of almost 5.7 million States, has obtained from Canada
tons was 54% of all the news- 75 to 80% of its newsprint reprint produced m the world. We
consumed about 6%Jof our pro-

quirements.
itself to .be

Canada

has proved
reliable source of

a

duction at home, about 8% went supply for your expanding needs;:
to countries overseas, and the bal- We have met your demands with

from

of

your

Canada,

but

total

supply

received

you

speed and efficiency. In face of
these facts, it seems strange that
in the last year or two there have
been frequent statements by a

number of

politicians,

your

sup-

ported by some of your publishers,
which protest against what they
call
the
"dependence"
of
the

inclined

to

their

in

papers

In

man

instances, the borrower

reduce

pap

outstanding

his

inventories

to

and

receivables,' convert-

ing them into cash in
c,,ffiPipnt

nav

£"o?UducFnT
bus^s

make

the

lasLi>ix

or

seven

We have added nearly 1,100,000 tons to our productive

years.

capacity since 194%*most of it in
response to rising demand in the
United

States.

increase

in

Incidentally,

Canada

exactly .the

same

as

is

this

almost

your

own

newsprint capacity ^oday.

in the United States or in Alaska,
* We in Canada and narticularlv

fear

There

tw0

are

Kkp

+n

fn romnetitinn We dn
competition from other

wLre^rthev

mills

Thev need onlv

they

?

■

+•

off

an amount
the
bank

w

the

that

as

dnd

In

mivateventures

-R .vaie yen™res in

relation to efficient manufactur-

inclusions

draw

frnm

nfthi/atHtnHe

I

the

mar^ets; as proot ot this attitude,

enniH

^ompam<fs Wlth larSe interests m
Canada have participated in two
5ree ".^wspnnt mills in
the Southern States. But we do
venture.to question the wisdom of

kf^
ILlfLrS !n ^111^

any national government expands
mg a domestic industry by "forced

HmVcontrols weT^lemovedTnd

fas0" that. ex,i,sting supplies come

of

growth

Canadian

Thp

panapitv

firqt

newsnrint
fVnt

tolemand

„

.

fhprp

a"Snn

l!p(,

Dur

h„jlf

th^t

lin

controls weie^removea ana from

i

«°Lrtage^ ofnewlfoint fa the
cllsumer could
" ?
at evei7 cqPsumer couia
that,

everv

"a poTnt ^e^anteTfuFfe" H^o

itsTeal eltate

buift

be

mav

nass

ecbno^

be

defensible

Conclusions
•

do

vou

not

fi

woldri

believe'

in the newsorint industrv
as

snoriages. ,inis peni-up aemana draft"; doing

the business.

them to
deposits from a where the danger of loss of prinbank which has the reputation of cir,ai
is
minimized
Sometimes
not granting the loans which it
the situation can be remedied by
withdraw

when the free press of the world
is dependent on government assistance for its principal raw ma-

mestic needs. With tfcpir relatively
fasfer growth, the production of

present

capable

of

would

bank which has

the

changes be made so as to improve
future the quality of the leadership of

the

Paper Industry

however,

agreement
always
includes
a
of making, servicing and collect- number of default clauses which
ing the loans. If we assume a rate enable the banker to take conance

.

nearly 1,300,000 toneless in 1946 United States on a "foreign",
from Canada than you took last source of supply. They have gone
finds out that he made a mistake year, In other woi$| the growth on to propose various government
jn granting
a term
loan or, if of Canadian newsprint capacity measures by way of subsidies;
through no fault of judgment on has /largely contributed to the loans and special tax concessions,
his part, the condition and pros- spectacular growthL_qf your newsto stimulate newsprint production
cerned,

1% as an allow- structive steps to remedy the sitlosses, the net return on uati0n before it becomes so bad
their desks and plead for loans,- loans at that time was
only1.3%. that a loss becomes inevitable,
Today
this is all* changed and When this is compared with the what kind of steps can a banker
most bankers have a very open then going rate of 1.15% for U. S.
take to remedy such a situation?
mind and a constructive attitude Government securities due in 3
He can urge that the policies and
when handling requests for credit
to 5 years, one naturally asks himprocedures of the management of
Instead of deigning to grant credit self the question as to
why a com- the business be altered to meet
only when they feel so inclined, mercial bank bothered to make the situation confronting the combankers today are actively trying loans at all. No sensible banker
pany.
If the banker decides that
that

sisted

:

there is a very
be great deal which he can do if he

described
II

Businessmen found their bankers

Business—Backbone of
Commercial Banks

™

to

1930 to 1932.
In addition,
pointed out that a bank must
have a constructive lending policy
or it will not share in the
growth
of
our
economy.
Finally,
we
delineated some of the differences
between loaning a business and
investing in it.
we

011 1m

^

proportion

for the best.

.

re-

from

the

will call for increased financing

earn-

a bank.
Even in the event of.
decline in general business, this
the fu-

situation will continue in

18

mae

came to the United States, a
total of over ,4,800,000 tons. This
Canadian supply prbvided about
tions. High rates of taxes resulted
four-fifths of all the newsprint
in businesses being able to retain the overall prospects for continued either sell and take a loss of prin-. you obtained last
y^ar. Back in
a
percentage of net profits that growth are quite encouraging.
cipal or else hold on and hope 1946, you obtained about the same
the public and

to

a

^onnnuea jrorn page 15

pay

Second,

purchases.

that loans once more constitute
the most important earning asset

Is the process of making loans by him. We think you can now ture;. and we certainly do - not
similar to that of investing in cor- understand why We will again foresee a repetition of the period

w

¥

that

clear

correct

and Investing

-

DOIftJi

is

things which

it

Distinction Between Bank Loans

f

anQ Financial Chronicle... Thursday, April 23, 1953

V

f4ta m
queers added nearly* 400,000

t™.

tons

and Canadians nei^y 1,100,000
tons to their capacity w1th the

Furthermore,
it
^
selUng
able field warehouse receipts for should be
kept in mind that the and/or its fleet of vehicles used
merchandise, trust receipts, chat- mere making of loans creates de- jn the business and leasing them caught up with
Remand. The
tel mortgages, and loans secured posits. When a bank makes a
loan, back from the purchaser.
The newsprint "shortage^ throughou
by inventory under the Factors the proceeds of it are credited to
cash proceeds from the sale are the world has disappeared with all
Lien Act.
the borrower's deposit account. It
used, of course, to reduce or pay Producers operating,* at close to
What will happen to the volume is true that he can draw the money off the
outstanding loans. On oc- their expanded capacity.
of
outstanding loans if general out of the bank, and some of it casion, a real estate mortgage on
This major expansion of Canabusiness activity declines appre- may end up as a deposit of one of the land and
buildings will pro- dian newsprint capMity has been
ciably? We have already pointed his suppliers in another bank, but duce enough cash to solve the accomplished
by private
proout that loans wilT not be reduced
a sizable proportion of the monies problem.
•
,ducers who have ponded in an
to anything like the degree that
loaned do stay With the bank
0n the other hand, the answer
enterprising way \6~the opporthey were in previous periods of which advances the money.
Any may be to have the loans secured tunities of an
expanding market,
recession.^ At the same time, we banker worth his salt never for- by the pledge of certain assets without
subsidies, sp&cial tax,toncannot gainsay the fact that a de£ets the fact that he must so order 0f the company, such as accounts
cessions, official' ffobr prices or
crease in the rate of business acthe affairs of his bank that it will receivable, inventories, plant and
any other form of government intivity will undoubtedly reduce the always be in a position to meet equipment. Perhaps one or more
demand for bank loans. Yet there* the justifiable needs of its cus- 0f the stockholders can be

foreign"

PerhaPs
amonS
,

..

.

obsolete

sources.

this

recent attitude
of y°ur Politicians

some

,

•

.

f

.

.

andTeTere residue o®

an
old form of economic isolationism,
„

,

b

.

,

t .

that
s

tesujb that toda^^upply has ^ore

.

for the

so

lly

dfscomfSt

country
to

nPWQ

example

an

in

growing

depend

on

ira
thit
need

"Ceign"TuPDlies of

matei:ials
rpniIfrp X f
d * wid^XpH "

m

wmespreaa

.

D0iiHral

to

be

or

snouid

imniirntinnc-™

regarded

qC

n
-

*

«

2

fc f ,^^ *°feigner;
inannronriate fZ Li ^ feCmJ
f ria1tceft *°r neighbors and
imDiication^ if r,,ncf on?C0fn0m+ie
imPilcaxionsr 11 runs counter to
for

thicr

y°ur basic belief in the virtues of
competition. Moreover
iha nninf

^

it

ignores

\

k

per-

are a

have

number of factors which will
a

definite tendency

to hold

tervention. If mor^: newsprint is the poirit that to export

you must

guar-

needed, there is natdoubt that it import and newsprint is

our

tomerS for borrowed money. This

suaded to come forward and

is

antee Payment of the loans, with

just

as

true in Hmes 0f booming
-d

tight money

as

can

tive without the

it is

private initia- est export commodity to
„e& of govern- United States. If you become

be provided by

in times of depression and panic, guarantors. Still another solution

ment -promotion

haVe yet to experience full-scale

The policy of

This is, I think,

peace-time

that it invests in bonds only those

ber

of

lines

of

business

competition.

which

When

that time arrives, the businessmen




sums

a

bank

has

to

be

of money which it will not

might be for the business to

to

a

and

finance company

or

a

go

factor

borrow sufficient monies

to

tance in the

hope

we

will

and
a

assistance, s
lcient m
would cease

fact of impor-

newsprint,
to

be

larg-

the
self-

Canada

the .largest

newsprint industry. I single market in the world for
never come

to

a

time

your exports.

*■'

Volume1177^ Number 5214... The Commercial and Financial
Chronicle

Continued

from

9 r7 w'

page

to

increase, inventory and wage
revived, and all the

payments

Full
egations favored it
ports)

in

the

iate

infprnal
thp

nnrf

hankfn**

ity in 1930. Even J. M. Keyes ad¬
vised
going back to gold after

that

World

War

I.

In

"If

re¬

introduced throughout

Europe, we
all agree that this would
promote,
nothing

as

else

the

can,

revival

not only of trade and production
but of international credit and the
movement of

capital to where it is

needed most.

One of the greatest

elements of uncertainty would be
lifted. One of the most vital parts
of

prewar

restored.

organization would be
Any one of the most

subtle temptations to

national

it

cause

so

to

be

re¬

a

would
much

graceful)
so

would

national currency
been stabilized on a gold

once

basis,

improvident

for

act

harder

(be¬

openly dis¬

Finance

to

as

be
more

a

the

Tn

WVP

nnptp

hp

stances

un'

in

rash

to

mnnev

X
K^L S'"it
Hrrlim

nres^nt

mlr WrtJUn

surrpnder

.? to surrender our freedom

,

in

is#

100

71 jn

(e.g., May 17, 1933) that the
United States didn't have suffi-

cient

did not reach the 1926 level untiK

President

Roosevelt's

gold

assump-

to

reserve

of

,

resume

£lated prices"

did not result from monetary

•

Although we held over one- icies alone. And need I add that;
third of the world's monetary gold the implementation of the naive
and had reduced foreign credits quantity theory of Professor Warto a low level and had restored ren could hardly be called succonfidence and minimized domes- cessful?
Business recovery was.

tic
hoarding,
we
nevertheless weak and halting and stopped:
abandoned the gold standard and short of full recovery. Employdevalued the dollar. It

tL United^tat^It it ReV^?al of Pofllcy K0r®odo*
Stilt ?i hip ft Snufrwhpwlh!
Monetary controls abandoned.
thPimnPhioStv nf fl^choa^nntv
Although the Democrats had
Board

to

specie payments is open to doubt, the impact of World War B
The facts all point to adequate brought it there in 1941. It should
gold stock, ample reserves and de- be added that these price changes;

PtrPrvhn^v

nf

60.2

actually happened!
rise in the price index froim

1934 to a high of 88 in 193?
(23.9),
from
which
point
it
reached to 75 in August, 1939. If:,,
stood at 80 in December, 1940 anct

centers,

until,

are

nnt

from

What

Jun€' the whole pattern became
blurred when another flurry occurred in tbe international money
Jhe l0w point of «old
stock 0f about $3.6 billion was
reached in June-July. The recovery Pattern was again taking
form in July and AuSust, but was
hopelessly blotted out when the
P°litical campaign grew more
heated ln September and October,

pqcithat

manappmpnt

was a

'

'

Not Enough Gold? The Evidence

index

tion

hut

inanpH

66.1%.

L-

•

then in the
city satellites. Even
the country banks were
beginning
to reflect improvement

bSnJ fuUv
reserves*are being iully

rr
would

Hrainc

arp

reserves

Tnpirfpntailv

financial

activity
getting under way—first in

price

standard in Jan. 1934."

was

ment

de-

a

liberately

and

output

rose

somewhat

but even at the peak in 1937

unnecessary
decision,
The real reason for going off gold

were

considerably lower than the levels of the late 20's.
Pit
1 orr?
promised to cut the Federal
It was futile to try to make
FnailnH
hMrv'Sw!!'L„n budget 25%, and campaigned on
money "work" in an atmosphere
t™Tfw wJh w77f ho■„« a "sound currency to be preserved
of political and economic uncerIZh+Ur L ZrZrttu,at a11 hazards" plank, rumors be-,
There was little reason for the tainty. The easy money policy wasS L tZ hS
~tgn gan to circulate which presaged fear that the readoption of the well-advised but without business
nfp
i7 S
I later events« President Roosevelt gold standard would lead to gold confidence it was like "pushing
-pe* refused to reaffirm the "sound exports and hoarding and hence on a string." Easy money merely
a

MmnpS tl

™

a

that

the

New

didn't
want to be hampered in its plans
to manipulate money by any obligation to convert dollars into gold,
was

Deal

«rar

finance

moved; for if
had

eofd

trusted

gold standards could be

cvetpmc

utnizeH

April, 1922, he

wrote:

PvtPrnni

?bnHpS

pniri

the Macmillan Commitiee
major¬

sensitive

the

and drastically changed gold

new

business

were

Standaid

(majority re¬
1920s, as did

of

symptoms

In Defense of the

33»

(1761)

Minister

destroy this gold

basis."

i 1LT
very ainicuii
sary

in

to

economic

S

maxe

tne

money" and the gold

neees-

adjustments

ments after

tain that end. international stabil-

domestic

election; he refused

the Glass Bank Reform bill and

on

call for a tight
the

to

cooperate with President Hoover

lty could be obtained cmly at The
cost of much

covenant in

government securities in his state-

to at-

instability, instead he conferred
openly with

an^. Keynes

wanted
domestic the so-called "Committee for the
with emphasis on Nation," a
group favoring a paper
domestic factors,, e,g.» priees and
money
standard.
Rumors
and
employment rather thair the pre- events
confirming rumors led to

Federal

Nor

policy

money

there

served

by

Reserve banks.

1

build

to

reserves."

idle "excess

up

Since the horse refused

tion in Jan. 1934, for the 40% de-

to drink voluntarily* duress or
f°rce was resorted to. It was the^

valuation

beginning

was

of

much

the

justifica-

dollar

to

match

the depreciation which had taken

omy,"

of the "planned econ-^

the

social

welfare

-

state,

with all of its hollow shibboleths,
e.g., "if-business won't, governevents were occurring which made
wheat and cotton, were depressed ment wiu" "borrow, spend an<*
him change his views. * Quoting
because foreigners could not af- elect," the perpetually unbalanced
requisites of international balance,
from
his >' "Monetary "Reform"
hoarding and bank runs. It looked ford to buy them with
high priced budget, "we owe it to ourselves/"
.(1923), pages 178-81, I read: Pu Sold standard obviously had SUSpicjously as if the plan of the dollars on the exchange markets, ' monetize the debt, debts are asI
"But the conditions of the fu- IZZlTlf
Relief
jnf °J?il>g administration :was to They neglected to consider that; sets. • Reli( expenditures, pumpdoned[it reluctantly and only after let the banking system collapse, foreign countries devalued their priming, and compensatory spend■,ture are not those of the past. We a valiant
struggle when-sheMis- (See Herbert Hoover's Docs. 1938
currencies
and /imposed
have no sufficient ground for ex¬
import I nS
or functional /finance all
covered that-she couldn't; have ,and
Memoirs, 1952. His incredible controls in order to check pur- proved unsuccessful while the orpecting the; ".continuance of the both stabilities.
?
;
story would hardly be believed Phases and stimulate their exports thodox restraints to over-issue oY
special conditions,which preserved
•
at the time and has
only recently and that our matching their• de-7credit» be., gold redemption, rea sort of balance before the war.
..been fully related.): An "emer- valuations merely left them with serve ratios, balanced budgets and
The war has effected a great
But

<

even-

he

as

wrote

this,

stability,

„

„„

place

elsewhere.

used

that

was

A

K

The

vv<lvu

argument

exports,

our

e.g.,

„v

"

'

.

.

change. Gold itself has
a
'managed" currency
stands at

become
.

.

The United States Abandoned the

Gold

it

.

'artificial' value, the
future course of which almost en¬

The

the

.

policy

of

United

the

States"

already

an

on

page

gold standard
barbarous relic

a

outworn dogma

nonmetallic

and

.

the

truth

a

.

standard

regulated

has

slipped

in

Keynes had

to understand
England
would
have to make to get back to pre¬

what

come

sacrifices

he blamed the opera¬
tion of the "gold standard" and

war

par, so

bank

central

policy.

Gold

im¬

ports into the United States
affective

not

were

in

expanding bank
credit and raising prices because
the

Federal

tralized"

Reserve Board

gold

"neu¬

flow

by offsetting
sales of government securities and
that

by

action

taking

put into the market.

much

as

out of the market

money

This

as

contrary

Since

" v

and

strong

a

and
of

was

as the "gold
paradox"
perhaps the first example

systematic, planned central
bank policy to supplement dis¬
a

count
tions

with
so

as

order to

open

to

market

stabilize

stabilize the

opera¬

credit

in

price level.

The unwillingness or inability of
central banks to play according to
the
rules
of
the
game
Keynes

a

con-

tinuous succession of emergencies

case

be made to the effect that this

can

be

today if

much

a

had made it

we

busi-

our

to stay on the gold standard
at that time.

gold

It

standard

rather,
debt
ment

represented

shake-down of exeessive

a

and

of

wholesale

a

readjust-

speculative over-invest-

ments and other distortions whidi

had

taken

in the late 20's.

place

Whatever the causes, rock bottom
of the
depression had probably
been

reached

by 1932
badly chastened,

ness,

ready to work its

T.

nanh

and

busi-

was

about

out of the

way

dumps.

excuse

and

Policy

step

a

;

;

The bank moratorium

was

an

toward

the

abandonment of the gold standard,
*n

raP*d

succession

specie

pay-

as

"a

weakness

the

of

plored the measures taken "in
cent years" by central banks

re¬

to

offset

standard

and

domestic

monetary

many

circumstances,

internal

liams,

control.

in

damental

1932,

insist

upon

This, J. H. Wil¬
called "The fun¬

conflict

between

the

ard.

principles of the gold stand¬
Central banks not

unreason¬

ably feel it necessary to hold

sur¬

plus reservg for protection against




and curtailing their imports?- Is
this a new prescription for increasing the wealth of nations,

and receive

more

£ a» contracts

was abrogated;
the Thomas Inflation amendment

was passed permitting every inBationary device known to be

of Monetary. Crackpots.
E.

W.

(Jan.

Kemmerer
1942)

15,

predicted

dub

would

1933

a

half

of

that

that

could

have

artificial

first

become

a

economic

f money management (and later by millions of

election

silver

the

injury of
countries; ; the

great

standard

jettisoned

to

States from

free

the

foreign

States

Delegation

nomic

Conference

World

at
at

July.

It

manipu-

trie"

dollar

re-

lations; and the gold dollar

money

in

begins

full

was

We abandoned the gold stand-

of

year.

with

on

this

the

occasion.

passage

nolicv

bv

of

It

the

buying

in

the open market with Federal Reserve

funds

some

$1.1

billion

of

stored.

It

probably

than

minor

London,

off their debts, (b) stop forced
their

customers'

obligations and (c) start expand-

ing

their

paper

and

credit.

The

short-term

no more

changes "if the

a

the

was

the
of

Townsend

gov-

Chandler in

the

"Money and
To

—

revision

Banking"

continue:
was

writes L. V.

1953

"In

of

(page

the

end,

decided that other

monetary

objectives

important

than

were

more

maintaining

the

gold value of the dollar at its old
level. We, therefore, remained off

giltTedge^ j?ond market :the gold standard during the

strengthened, business loans began

bimetallism.

i

Mission com.
thp

4ft,_

tb0«l

"
the 30 s. It was not an'

or

atf time t0 lry ^ correct me ma-

opp'or- takes> nor was it possible to ac
eooperaMoreover, we would pr^bahly

of the "elec"technocrats"

Plan.

It

(The President

was

was

given actual power to put nation
bimetallism.) In that year we

on

discarded the gold standard, outlawed gold coin, nationalized all
monetary gold, implemented the
Warren gold purchase plan, and

^fn®u!ffn™£.ldlewar n^nanv
"g J™e ™{°^d j^ar
J1 "J

£ase, a"d ;he nPnr^riatP
jyere more aPPr°P"a*L
e had no

to

war-

s^_.
pi^lOTi «« m

nor

was

of

there

anv

P™P-Pnr"Jng; Por ^as t
a y
m^tabihze business?

^tcaah fphlpvelofprnnlovment
at^^f^ieVaelff, sSfcTnt DoI-ir^^riMons
be singled out
can

»cy deciaons can be s

aspnefx^fcuSare

%

not beyond

ment which a e n
y
prepared the way for the national cismbank moratorium and the devalu(1) iHow,^1S,^VSL ^

?° f.1"a"ce
basis? Specifically,

crli.

.

i2e dollarwere

Jadefc

^r-

an

year

the

the

trv

$1

monetary policy"

however, it

of

as

!

in raising prices, merits and demerits of the Treasstimulating business recovery, in- ury-Federal Reserve rate schedule

enabled
pay

and

J. Viner s

atl r11

147).

to

have

ernmeni naa Deen wllling 10 maKe
this the Primary objective of its

impulse set in motion forces which
(a)

^e felt,

ernment had been willing to make

his

commercial banks

would

been re-established with

government securities. This initial

liquidation

Eco-

United tion in May, and Jettisoned in

interference

while engaging in

The

late

^dldate ^"
hu:rd^s:

our people to the

which

politics

attained

to monetize the Federal debt for monetary panaceas of
Father1 tmows cadet over.
the purpose of deficit spending); Coughlin; 85 Congressmen peti- pl®ta°- nli .
nf
aiJ expensive and unnecessary tioned the President to appoint
P
Sllver
Purchase
program
was him economic adviser to United 7 gon^

me

uncertainties

brought about by the

that

the

devalued to encourage exports by the year of revival of long dislasting re- bringing the dollar in line with credited "greenbackism" and of
for purely other depreciated currencies.
the resuscitation of the corpse of

place

had it not been

covery

business
the

wholesome

and

taking

was

in

convinces

year

sound

a

covery

of the

of

year

tunity for international

situation

omy ^were

used to reflate
prices and de- heyday of monetary crackpots. In over
crease the debt burden by means that year wide acclaim was given

was

study

„

historians

that

Monetary Conference of 1933

close

In me

uncertainty ana
of confidence in monetaryvalues, prices bore no definite re
latlonship to the supply of money
business languished,
rhe
stagnation or maturity theory
depressions gained in popular
i y'
v,
a y,T after re ^5^5

i0, •April 20); monetary gold
^
^- - both
pr ices and
employmmik
bad to be turned into the United Twenty Years of Monetary Man- reached their Prewar levels The
States Treasury; the gold clause
agement~.The Record a Year objectives of the planned econ-

conference heralded

credit

confusion

EWorld War II came £°

.

June, 1932.

the

principles of central banking and

* down so. that all nations can retain
their positions in the world markets by stimulating their exports.

and

A

•

currency,

Economic

easv-money

stability: the former imposes ex¬
ternal control; the latter must, in

tive7„
'
We may conclude that the reethat ord of money management in the

depreciating
rather' thanja sound
a

promising London

and

monetary controls were inopera-

they had aimed to correct.

it

Was Beginning to Work Feb.-

gold movements as being
Glass-Steagall Act of Jan. 31,1932,
"fundamentally in contradiction which
enabled the Federal Rewith the gold standard system,"
serve
authorities
to
nursue
an
and they
called attention to a

logical conflict between the gold

Is

fundamental imbalances

same

which

.

ard on March 6, 1933 to meet an
"emergency." It was expected at
story
is
an
important that
time that the departure
gold standard." The Gold Delega¬
chapter in economic and political would be temporary and that the
tion, reporting in 1930, also de¬
history and is too involved to re- told standard would soon be recriticized

the

ments were suspended for an in- namely, to give
definite period of time, (March less?
'

adopted—to
Federal Reserve Monetary

7

Moratorium

-

happier world

ness

to

be known

created

tha^ bave extended over a period
one,^.
more than 20 years (and still fosters trade? Must the best cur^^3®'s wa3 one °f
is much evidence to seem to be with us).
,
^■1 «-rencie.s
pursue
the worst ones atmosphere of

There

would

was

came

effectively

was

March 4, 1932, the first of

unnoticed."
Finally on page
The
drastic
liquidation, bank
19Q he states: "I regard the sta¬
bility of prices, credit, and em¬ failures, and deflation marked by
a
drop of 40% in the price' level
ployment as of paramount im¬
could hardly be blamed on the
portance."

1

gency"

1933:

Was it necessary for the United
States to go off gold standard in
1933?

187—"In

Record

an

tirely; depends:,; on

in

,

the Federal Reserve Board of the

is

Standard

mainder

of

1933

and

re-

adopted

a

How effective

tary

+.

the

mone-

hit

what

were

thl
the

policies

creasing

foreign hade and in

our

reducing

the

cording to G.
metic,

the

debt

burden?

Ac-

F. Warren's arith-

devaluation

of

41%

morcimprewe^^
ments
on

the

0f

an

board

untutored
of

colleague

directors

of

a

small Chicago bank than with the

rationalization of this move com-^
mg out of Washington,
(March, 1933) to the 1926 level
(2) M. S. Eccles propose
o
of 100, e.g., a rise in the price of channel governmen
e
!**GC.y
1 °z- of gold from $20.67 to $35 mto the Fe era
eserve an s*
should just about restore the com-

modity

price

is 69%;

a

level

from

60.2

rise in the commodity

Continued on page

34

The Commercial and Financial Chronicle

(1762)

Continued from page

"Socrates

between

33

the Econ¬

and

omist."
VI

In Defense of the
Federal Re¬

Reduction of

(3)

in June, 1945.

ratio to 25%

serve

security

(4) Special government
proposals.

reserve

The gold

standard may or may
restrained the money

have

not

do

but
the

these instances
to illustrate

in

managers

they

serve

fallibility of "reasonable and com¬
petent men" in high office. Mis¬
takes can be made there as well as

number of economists represented

Real Issue Defined

The
who

issue

real

those

who

those

between

the

support

status

favor

full

the

hearings

sition

the

Since

1934,

been

of

limitations

all

dealing in gold. In
this would mean that any

United

limited

States

interna¬

effect,

and

of the

holders

United

States dol¬

gold bullion standard. The lars, whether they be govern¬
leading to decontrol
ments,
central
banks
or
other
of the government bond market Treasury buys gold without limit
at $35 per ounce and though some banks, or individuals, foreign or
and the Treasury-Federal Reserve
domestic, would be able to re¬
"accord" of March, 1951, were fa¬ restrictions are placed on gold ex¬
deem
these dollars if they pre¬
vorable developments. They rep¬ ports, the Treasury has not, to my
ferred standard gold to the prom¬
resent a return to the old ortho¬ knowledge, refused to sell gold (at
ises to pay gold.
doxy of monetary controls in a the fixed price of $35) to foreign
The benefits to be gained by the
central
banks
and
governments
freer market,
return
to
an
unlimited
gold
whether
to
prevent the dollar
standard are many-fold. I
shall
Opinions of Economists
from
declining in
foreign ex¬
treat briefly those which I think
In 1933 economists were almost change markets or for other rea¬
the most important.
unanimous in their opposition to sons (e.g., Italy bought
$1/2 bil¬
We have been living in a dis¬
the money
manipulations being lion gold in the summer of 1950
and

on

of

orthodox

the

The revolt
in
m

i

s

gold

the

of

Econo-

Committee

National

t's

support
standard.

eventually crystallized

formation

the

their

in

on

Monetary Policy in November of
that

In February, 1934, a
survey made by the Independent
Journal of Columbia University of
2,560 members of the American
year.

Economic Association showed that

has become

us,

on

of

the
a

on

removal

tional

carried

Money, they tell

gold

holding

(?)

as

that

believing

speculation,

a

the

dollar

devalued).

would

be

further

The Treasury, in prac¬

tice, also sells gold to meet bona
fide

for

demands

artistic

and

industrial

honest

ask

The

world.

dream

of

cates

managed

paper

advo¬
money

should return to the
gold standard when the system we
why

we

have works well enough as it is.
'In

undergraduate

but the use of
gold domestically for monetary
and hoarding purposes is prohib¬

read

ited.

Ob." The thesis of the book is that

purposes,

Our present

ard

thus

is

limited gold stand¬

hybrid system, (a)
international
or
externa,1
answering the The
opposed
the gold value of the dollar is, in a limited
and favored a re¬ way, kept convertible into gold
turn to the orthodox gold stand¬ at a fixed price; and (b) the dol¬
ard. This was still the position of lar is defined in terms of gold but
a
large majority of monetary is inconvertible at home.
economists
The
difference
between
our
polled in 1944-1945,
a

my

book

a

by

Hans

days

I

Vaihinger:

entitled "Die Philosophie des Als
live in

we

lieve"

world

a

"make-be¬

of

do these

Must

myths teach us?

abandon

we

the

hard

of economics that assets
debts

and

conduct is

human

tutions

of

that

new

when he

Must

as

tom

or

dol¬

a

not

incredulous
Socrates

even

beyond

talk to the economist
pound?

paper

consider the gold at Fort

we

Knox

the

British

the

we

did

back from

came

the Styx to
about

which

satisfy

from Mars

man

must

or

dollar is

a

doctrine

to

seem

and

"mores of the tribe"

"dollar is

a

lar"—a

insti¬

on

property

validity of contract,
cultivate

that

and

based

private

rules
assets

are

debts,

are

white stone at the bot¬

a

out

five

of

questionnaire
buying policy

apply

in this

mists

of

export

Convertibility of
5. Legal tender

.

.

v

.

.

.

No

,

,

No

import

and

4.

.

Limited

into gold

currency

........

,

good as long as they
paid? We may cite the

classical example of the Canadian
bank

insolvent for

—

forty

years

some one

may

case.

the

f

apt to be accepted

f

able results of

justments

$

is

legal

of

simply the conse¬
series of misfortunes

a

misguided

depression lasts
regarded

tender.

as

tary

System

standing
we

its

on

have

as

huge

a

pyramid

In the apex

nose.

the

"ghost

of

er

gold" in the

of

that

government

we

may

The

for money.

new

odd billion

constitute

Federal Reserve

held

reserves

the

against

$25

$20
bank

billion

connection

of

the

United

monetary system with gold
consists solely of the
buying and
selling operations of the United
States

Treasury with foreign gov¬
and central banks, and
with the buying of gold from the
Federal Reserve notes, together
gold market, domestic and for¬
with
silver
certificates,
United eign.
So far as
our " domestic
Federal Reserve notes
outstanding
and $22 billion deposit liabilities.

ernments

States

notes, and a small amount money and credit supply is con¬
coin, constitute the available cerned, it consists (except for the
money in circulation.
Some $20 overvalued
silver) of nothing but
of

billion

of

the

total

$22

billion

Federal Reserve deposit liabilities
constitute member bank reserves

which

of

in

are

about five

or

demand

turn

blown

up

to

six times in the form
and

time

promises.
A

man

his intellectual

ing

curiosity by send¬
ten-dollar bill to the Treas¬

a

for

ury

redemption

and

got

no

deposits.
satisfaction. [Quote: A. F. Davis—
a
large credit or
"A dollar is a dollar is a
resting (except for
dollar"]
silver certificates) upon a small He discovered
that a true legend
apex of irredeemable gold certif¬
on our
paper money should read:
icate reserves.
Thus

we

have

debt structure

The

size

credit structure is limited

of

this

"This is

only by

legal minimum

reserve provisions
(Federal Reserve bank and mem¬

it

is

other

$5. It is not redeemable;

merely

exchangeable

domestic

money

ber

banks), which are set by which,
Congress, and by the discretion of
the

monetary authorities, i.e., the

Federal
ury.

At

Reserve

the

and

present

the

time,

Treas¬
prac¬

except

silver

for

all

of

certificates,

is likewise irredeemable."

The

same

issue

was

made

clear

with respect to the
sterling in D.

a

decade, it

a

is

hailed

as

ratio, if it means any¬
merely as an index
limits of debt expansion.

reserve

thing,

serves

the

to

with

But

convertibility

"par-boiling
A

dence

authorities,

whether Demo¬
cratic or Republican, should want
this
responsive
mechanism
be¬
cause
it provides a market test
of their policies and enables them
to perform their assignment with¬
tary

in

limits

the

and

convertibility
takes

paper

in

warm

of

the

oblivious of debt
water

the

frog

and

money

gold standard until

hot

g.,

of

effect when the at¬
confidence becomes

—

lies

in the

-—

promises

to

debt

able

assets

pay

to

debt money,
appropri¬

on

money

with

back

or

instead

it

the "make-believe,"
debt

The

gold

economic

between

dangers of

our

economics.

to

the

over-specialization
Perhaps the deter¬

irredeemable

minants of economic decisions

are

maintain

money

can

gold

superstructure
to

carry.

to redeem

(debt)

The

promises is hon¬

est;

omists should

read

econ¬

sociology and

anthropology and also even psy¬
chiatry in order to better under¬
the

stand

find

economic

some

our

guidance

man.

or

can

direction

reading in the writings of

J. M. Keynes and D. T.

whose subtle
prose

We

did

Robertson,

irony and beautiful

more

by ridicule, traves¬

is

good

it

require¬

forces the issuer to redeem

maybe

re¬

the

and

reserves

More

it

by

monetary authorities to
a
satisfactory relation

asked

ment

our cur¬

really non-economic in character.

soecifically,

the

Report, 1950 (p. 42). Although
not

do

we

believe

that

the

Em-'

ployment Act should be the sole
arbiter of monetary

favor

policy,, we do
objectives but main¬

these

tain that serious inflation and se-^
rious deflation
vented

better be

can

pre¬

under the

discipline of the
full gold standard than under an
irredeemable

paper

money

sys¬

tem.

We fully agree with the Com¬
mittee's statement that serious in¬
flation

and

deflation

is

too,

pos¬

sible under the full gold standard
that "there can be no effect¬

and

ive

substitute

for

monetary credit,

agement,"

but

responsible

and fiscal

man¬

maintain

we

that

management under the discipline
of

gold

convertibility
is
more
likely to be responsible than manwithout such restraints.

agment
We

maintain,

furthermore,

restraints

that

management

on

contract

law;
or

it

face

the consequences. It thus imposes

responsibilities
authorities
power

not

upon

the

to

issuing

abuse

their

to go into debt. It operates

like
in

those

As

imposed from abroad. :V

to

the

danger of hoarding,
quite agree that a general fear

we

lack

or

of

confidence

tegrity of the

a
self-regulating mechanism
curbing inflationary excesses;

requires the least administrative
machinery; ensures the maximum
immunity of the currency from
political interference;

and it

im¬

in

the

dollar would

in¬

start

stampede of redemption which
government could not meet.

a

the

But

if people

the

dollar,

ment's

have confidence in

i.e.,

fiscal

in

the govern¬
monetary pol¬

and

icies, there should be no need of
redemption. People normally pre¬
fer

paper

medium
near

to

money

of

gold

as

a

exchange, and prefer

moneys,
i.e.,
investmentsi
which yield a return, to gold as V
-

store
that

of value.

Someone

has

said

"redemption does not lead to

hoarding

unless' the government1

goes on a

rampage."

Domestic

and

International

Gold

Standards

The return to
standard

possible
set

unlimited gold

an

by the United
and

feasible

States

is

would

and

good example to the rest of

a

the world.

It would hasten the

establishment

of

gold standard and of
free

multilateral

ternational

Many

re-

wide

world

a

system of,

a

payments in in-',

trade.

economists

admit

of gold as

proper use

the

center of

a

gravity for international monetary
relations, but see no advantage inv
moving
back
toward
domestic
gold money.

.

However,

even

international

in

the

field

of/

relations

economic

there exists much misunderstand¬

ing

which

is

only

The

overcome.

slowly beir^g
slogan

new

sign

of

encourag¬

an

economic

(How

enlightenr

beautiful

is

an

in¬

tellectual sunrise!)
After the failure of the London

Conference
of

oL 1933

the

attention

governments shifted to domes¬

tic

welfare

and

economic

alism.

would

standard

like nothing else

quiring

is

of

fiat money it now is.

rency

due

las

ment.

strengthen confidence in

problems

of

(i. e., rqaximum production and
employment and stable purchas¬
ing power), as stated in the Doug¬

ing

Conver¬

on

gold standard would make

real

par¬

-

attainment

of the Employment Act"

purposes

"Trade, Not Aid" is

tibility
The

.Perhaps this is the place to sug¬
gest
inter-disciplinary approach
by
the
"behavior
sciences"
to

in

e.

redemption

or

Confidence Based

relaxes,

man,

prudence,

disturbed.

it

as

gets warmer the
blissfully
happy,
with no worries, no hates, no re¬
criminations,
no
criticisms
or
complaints about FDR or H. Tru¬

frog

of

frog":

a

frog lies contented

water

reserves

withdrawn when confi¬
becomes
impaired. Mone¬

be

may

mosphere
like best the metaphor of the

I

to

tically all of the Federal Reserve H. Robertson's
delightful dialogue




half

boiled.
from Cleveland satisfied

If

era.

the 'wave of the future.' "

States

which

theory adjusts itself

to the 'new' situation by

demand

so

bank

the

form of inconvertible gold certifi¬

cates,

stagnation

political regime,
however, detestable, stays in pow¬

securities;
that

this gold and give it to the United
States
Treasury, leaving in its

few years, it is

say

consist

billion in
withdraw

large

the

a

supply of money is de¬
termined chiefly by government

portfolios

block of $23

Now

If

becoming
depression economics. Every pros¬
perity which does not fade quick¬
ly becomes in the eyes of many a

earning assets and a
proportion of commercial

gold.

a

monetary

stead

bank

a

policies.

secular

a

and economic

Picture the United States Mone¬

the unalter¬

not

of

quences

and

"'Domestic sale only on license for
non-monetary purposes.
tFree import; export on license to foreign governments and central banks
only.
$For gold and gold certificates held
by Federal Reserve banks—everything else

as

deep-seated malad¬

the

money"

relatively
power
"es¬
a

purchasing

to

are

.

.

3. Free

.

constant

as

assets and

need not be

—

.

"honest

an

that maintains

one

bay or Treasury gold
should be imposed by free market
reserve the glass eye of the South
forces
(i.e., tne
cnoice between
African mine foreman? Must we
debts and gold) at home as well
take on a new faith that debts are

philosophy may
say, "in forty years many of
us
Many econo¬
will be dead," so what?
Perhaps
present generation
we should take things on faith and
have never known any other than
not ask too many questions.
In
the managed paper money system.
this connection we recall the fate
They accept debt money and the
of the city dog in James Thurber's
"creeping inflation" which almost
animal stories; the city dog who
invariably accompanies it as a
didn't ask any questions and got
when experimental polls of ex¬ present limited gold standard and matter of course.
Everybody loves
what was coming to him from the
perts were made by me under the the full gold standard system can inflation. "Inflation runs by com¬
skunk and the porcupine.
auspices of the American Eco¬ be readily determined by enumer¬ mon consent," said Schumpeter;
The
advocates
of
nomic Association.
managed
However, in ating the essential characteristics it is a "way of life," and Nourse
the
1949-1950
hearings
of
the of the full gold standard and not¬ calls it the "slippery road to ruin." paper money maintain that all
Douglas Subcommittee on Money, ing the respects in which our Haberler writes in the forthcom¬ money is managed and no money,
Credit and
even
under the gold standard, is
Fiscal Policy, about present legal provisions fail
to ing (AEAP&P, May 1953):
three out of five of the limited correspond:
"It seems to be a law of human any better than its management.
This is, indeed, true but under the
Present
nature
which holds not only
gold standard and convertibility
Legal Provision of
for economics but also for politics,
-Characteristics of Full Gold StandardU. S. System
of paper money into gold reserves,
and other spheres — that situa¬
1. Definition of monetary unit in terms of gold
the reserve ratio acts as a very
Yes
tions which exist long enough ac¬
2. Free coinage and free conversion of coin into bullion
sensitive index of good manageNo
quire a normative power and are
2a Buy and sell gold bullion at fixed
ment.Under the paper standard
Limited *
price

four

is

these

the

of

before it failed. But

this

and

Yap.
What

maintain that

sential

expressed

full

the

to

Hybrid System

has

Measures

Committee.

lan

and
gold

quo

a
barbaric
relic, an Auri sacra
oppo¬ standard centers upon the desir¬
james, a legend, a myth, a super¬
standard ability of limited versus unlimited
stition, or possibly a taboo or
and this proportion probably does convertibility of the currency. The
voodoo, a mores, a religion. I need
not misrepresent the opinion
of advocates of the full gold standard
merely to recall the delightful
economists in general.
propose the removal of all restric¬
Alice-in-Wonderland sketches in
tions on the redeemability of the
D. H. Robertson's little book on
Present Status of the Dollar: How
money of the United States into
"Money", the parable of the glass
It
Differs
from
Full
Gold
gold, both foreign and domestic;
eye and the fei Stones on the Isle
Standard Description of Our

the

at

panicky

and

untutored

the

by

masses.

Hawtrey, Gregory, E. W. Kemmerer, and of the majorities of the
Gold Delegation and the Macmil-

Standard

Full Gold Standard

discredit the poses monetary discipline without
all the logic sacrifice of individual freedom or
and
arguments of the classical national sovereignty.
It is not an adequate answer to
economists, of pre-1923 Keynes, of
ty and lampoon to
gold standard than

*

Why Return to the Full Gold

The

.Thursday, April 23, 1953

..

Restrictions

export

and

on

exchange

devaluations

currency

nation*-

imports,
controls,
other

and

beggar-your-neighbor policies re¬
sulted in a fairly complete disin¬
tegration

of

international

nomic relations.

edy

these

Attempts to

devastating

eco¬

rcpD-

conditions

made by multilateral agree¬
ments at Bretton Woods followed

were

bty the big "loans," the Marshall
Plan,

the

Mutual

Security

Pro¬

gram, the "offshore
program,

volving

procurement"
etc., yet all of these, in¬

over

$35

billion

United

States
to

foreign aid, has not served
make Europe self-supporting;

"Dollar shortages" and inconvert¬
ibility of currencies are still major
complaints.
We

still

that "dollar

hear

economists

shortages"

are

say

the re-

Volume 177

Number 5214

...




The Commercial-and Financial Chronicle

(1763)

35

36

The Commercial and Financial Chronicle

(1764)

tax

system.

return

predicts 20% to 25% gain in electric and gas production by
1955, with billions of dollars of additional capital investment.

By OWEN ELY

the

market
tax

by

General

<

Gas

of New York

incorporated in April, 1937, and grew from

was

Annual

small beginnings to its present position as the second largest
independent distributor of LP-Gas (liquefied petroleum gas) in the
country.
It serves a total of about 78,000 domestic, industrial and
commercial customers in Louisiana and the western half of Missis¬
very

sippi by

The

LP-Gas

LP-Gas is

being

merely transferred

are

the oil and gas

ernmental

Merkel

phasized, will enable them
tain

*

forts

in

the

production,

companies

promote

sound

Such

course,

a

additional

funds

em¬

to ob¬

for

As

to

ac¬

complishing their goals, he urged
them to "Make Your Story Easy

public

to for Your Audience to Understand."

from

exchange

of

The

stock.

cylinders

one

in

the

subsidiary

wholly-owned

company's

dealer organization

.

American nations.

7

page

(adjusted

sales

through

■

.

The acceptance of
wi

distributing

through

products

its

are

still of nominal

shipments last

butane-propane gas, still

cises

General Gas is the first major

with

It

has

now

to

tax

and

ing

beverages.

storage.
tanks

some

gallon capacity.

200,000 gallons

Salt dome cavities

are

day

a

tanks

of

production contract negotiated
commended

for

1952

1951.

maintaining defense

Jhigh production rates
In

in

are

production

continuing this

General established

a

company

year.

smaller

When

W/,"A

year

sold

120,000

of

features

enue

May dividend will be 250

or

'Share
a

earnings

were

reported

as

follows

in

the

year ago:

1951

"

1950

In

to

prospectus

two years have

been

what by warm winter
weather.

say,

Breining Partnership

solved

and

&
a

Co.

t

consisting of Harold
•Charles

M.

partnership

will

new

A.

Bowsky,

be

dis¬

partnership

Weismann,
James

J.

Gurney, member of the New York
Stock Exchange,
George J. Metzjuer,

and

Frederic A.

excessive

to

tax

should

be

the

as

be

should, needless

based

reasoned

on

requirements

large,

are

broad and diversifed tax system
will minimize both inequities and

repressive economic

handicapped

Williamson

'will be formed.




■

New

York

announce

branch
New

sider

some¬

of

a

at
120
Broadway,
City, under the man¬

of

Gerald

the removal

office to 745

YorkXity.

R.

of

Fifth

Aronson,

its

principal

Avenue, New
.

from

the

gen¬

detailed and technical

of

particular

forms

total

of

such

remove

present

,

treatment,

be

not

may

adequate.

existing law

the

long

amount

be

the

run,

will

be

in

written
same

charged

as

however,

creation

the

one

double

in

some

of

loop¬

converted

way

into tax-exempt foreign income.
The

de¬

investment

an

equipment

found effect

incur

briefly.

in

the

whole

we are
area

of

the tax treatment of pension and

retirement

plans

investments

rule

abuses

the

ample

of

creating
law.

for

need

17 out

of

the

so-

risks
in

in

as¬

hope to be able to

permit
greater discretion by management
in the timing of depreciation de¬
ductions.

In

the

long

run,

Secretary Humphrey has al¬

at

enues

given

any

rates. We

are

tive.

problem

The

clear

level

is

of

tax

the

of

one

method of
of

change and the timing
adoption. Some liberaliza¬

its

tion

be made in the regula¬
while others may require

may

tions,

legislation.
Capital Gains Taxation

perennial

a

Bona

one.

sults

this

that

area

are

we

quite

with

re¬

illogical. In

need, above all other

to

them.

of

misuse

and

be

fide

they represent a tax-paying
capacity but they do not consti¬
tute income in any ordinary sense.
To
encourage
risky investment
and

to

ment

such

permit fluidity in invest¬

markets, the rates of tax on
gains must be kept at rea¬

sonable

levels.

However,

sub¬

a

stantially lower rate of tax on
capital gains than on ordinary in¬
come

provides
various
to

temptation

a

sorts

of

to

ordinary in¬
into capital gains. Our anal¬

ysis in this

includes consid¬

area

eration of

definitions, rates, hold¬
ing periods, and the treatment of
capital losses.
There

field

are

of

Charitable
made

and

activities.

educational

have

properly

when

status is used

complex

as

the"
a

may

tax-exempt

cloak

business

subject

or¬

been

tax-exempt, but abuses

develop

The

problems in the

many

tax-exempt

to

cover

activities.

of

of

the

tax

cooperative associa¬

Inequities
I

shall

further

take

not

specific

time

to

simplify the

as

we

(2)

can,

ties, and

system

to

use

of' tax-

exempt securities also raises prob¬

much

as

inequi¬

remove

(3) to develop a system
impose the least ob¬

will

growth of

country.

Action

sizes.

In

budget

of the foregoing

on some

view

of

position,

forms which

the

are

troduced

hope
this

on

have

to

year;

done

next

few

a

good

a

year,

re¬

clearly desirable

limited

a

tight

very

of the

some

have to be postponed

may

in¬

or

scale.

We

things done

many

and

may

be

will

others

have

to

there

has

been

substantial reduction in

ex¬

go

until

over

penditures.
From

my

appreciate

comments

the

fact

will

you

that

the

in¬

vestigations and planning on tax
matters at the Treasury are being
carried
scale.
been
a

out

on

considerable

a

Fortunately,
over

the

there

past

several

have
years

good many excellent studies and

proposals

on

tax

policies.

The

trouble in the past has been a lack
of action, not of

study.

now

consulting

groups which

with

,

We

are

various

have been examin¬

ing the operation of

our

tax

sys¬

tem.
The financial and

economic

as¬

pects of the work in the Treasury

the

and

the

technical points will bring in adtional revenue. On others, it will
involve revenue losses of various

Dan

issuance

list

in

be apparent from the foregoing
examples. Our objectives are (1)

level of tax rates.
The

to

problems

formulation of tax policy. I hope
that our approach to such prob¬
lems and our point of view will

requires special study, espe¬
cially in view of the present high
*

close

Simplification and Removal of

artificial

convert

Their

require

come;

criminations have developed over
years,

in

those

also

may

scrutiny.

the

long-term capital gains are clearly
quite different than ordinary in¬

treatment

several

by

advantage

which

The subject of the proper treat¬
ment of capital gains and losses

in

position

accounts

stacles to the economic

tions

past

abused

use

some

the objec¬

on

changes

*

Expense

are

called fringe benefits. Various dis¬

the

recommended

liberalization of present rules, we

satisfied, will increase total
investment, the national income
and, incidentally, total tax rev¬

in

the

that part of the law to remove the

that

fixed

ex¬

care

provision

new

to

who

anyone

conspicuous

a

the

a

by

country for

of 18 months is

the

which

by

attributable

abroad

outside

under

1951

income

earned

activities
is

arising
in

adopted

take

We

competitive
and

the willingness to

on

inevitable

ganizations

One of the first subjects

examining is

the

sets.

of

taxation,
several
problems
are
conspicuous. I shall mention a few

Exchange,

establishment

turns

one

more

aspects

office

York

agement
and

the

Stock

In

devices

eral subject of balance among the
major forms of taxation to con¬

Aronson, Hall & Co., members of
the

off?

come

.When

the

New Aronson, Hall Office

and

create

pressures.

Problems of Form of Taxation

of them

Breining

pushed

a

on

plant

sys¬

any one

1.82

:::::::

the past

On April 30 the old

acceptable

an

judgments and not be punitive or
confiscatory. But so long as total

529,000 shares outstanding after the sale
of shares to the
public,
19,52 earnings were $1.23.
For the first
quarter of 1953, 400 was
earned compared with
310 in the corresponding quarter of 1952.

of

rev¬

better ap¬

a

exist when

income

on

revenue

Based

New

of

sources

1.36

1947

over

of

A

gression to the whole tax system.

at

'f These pro forma earnings were based on the
400,000 shares
outstanding after acquisition of the stock of Delta.

Earnings

form of

one

intolerable.

principal source
of revenue, and it should be used
to give the desired degree of pro¬

<•

'

any

general, I believe that the in¬

relied

Nil

1948

w'

of

can

is

con¬

higher, the

likely to give

dividual

1.98

"

treatment

proper

rapidly should

is

$1.64

1949__
:

economic

not be too serious;

This progression

'

'

effects.

levels

the rate of $1 a year.

■of

is

tem than

a syndicate headed by
Kidder, Peabody & Co., the price
public being 9%. The stock has
recently been selling around
15 in the over-the-counter
market. Dividends were initiated about
a year ago at the
quarterly rate of 17 %0, but in February this year

raised to 2C0 and the

con¬

inequi¬

become

proximation to

through

was

attitudes

become

diversification

to the

she rate

rates

taxation

stock

common

sources

low, the

are

bad

-

subsidiary, Gamma In¬

shares

principal

adverse

as

source

General

balance

proper

repressive

or

rates

and

but

promising.
ago

sub¬

individual

sequences may

and

The outlook for the
development of this novel product

is considered

the

arise
a

doctrinnaire

inequities

dustries, Inc., to distribute industrial radiography machines which
use AEC
isotopes such as cobalt 60 to detect flaws in large metal
products.

rates

done .recently

country.

revenue,

ties

has been

schedules,

of

principal topic is that

has

of any one form. No tax is without

$17 million defense

The

on

cerning the supposed advantages

Delta Tank in 1952 aiso began the production of artil¬
a

Another

reli¬

Canada

tax

was

developing

adopt

are

lery shells and other military items under

those

income,
corporate income, and excise taxa¬
tion, we must be careful not to

aggressively merchan¬
dised, sales accounting for nearly one-sixth of total system sales
last year.

cation.

United

abuses.

as

among the three

also permits off-season purchases at favorable
prices.

and

ex¬

greater

in

income

reduce

In

ground, and losses are even smaller than in tanks.
Large storage capacity reduces the possibility of
shortages, and
appliances

the

tax represents

The

is

ready

withdrawn from

above

Household

The

through which domestic in¬

to

storage

inexpensive compared with

very

against

to

prevent

holes

an expense under
any of various
systems, but the speed of permis¬
not been unrelated to the ability sible writing off
may have a pro¬

During the period

are

from

and intoxicat¬

The

excises

on

in that

2 million

over

in

from

other than tobacco

tanks of

little

7.4%

only

revenues

15.2%

stantially

a

ineome

come

able income of business. The prob¬
lem here is one of timing; how

gallons additional capacity, compared with above-ground storage
of peak demand

and

things, clarification and simplifi¬

ex¬

fiscal
1952, secured 24.2% of total

cises

8 million

prepare

all

from

Canada,

contrast,

Federal

steadily and the

underground

taxes

to

preciation in computing the tax¬

year

distributor to store LP-Gas in

access

capacity of 6 million gallons and plans to

a

combined

ance

cavities.

taxation

avoided.

be

must be made with care,

on

By

management looks forward to further growth in this area.

dome

double

clearly

however,

tobacco and beer, wine and liquor.

fuel

new

13.7%

from excises other than those

of record levels.

relatively

a

comparision with other

received

we

proportions in relation to

year were

the rich Latin American market, is increasing

salt

in

countries. In the fiscal year 1952,

its

in 27 states, Canada and a number of Latin

Gas and Delta Tank

important problems of tax policy.
International

taxation.

Tax Policies

include

to

Although export sales made by both General

domestic sales, foreign

derived abroad raises difficult and

Modifications of the

largest manufacturers of LP-Gas tanks and

country,

■

taxation of income

proper

come

Objectives of Treasury's
ernes

of the

subject.

The

attempt

Delta) increased from $11.6 million in 1947 to $22.0 million in 1952.
Delta is

this

States

the gas

In 1952 the previously affiliated Delta Tank Manua

by

pre¬

provisions for crediting foreign in¬
Continued

'

became

will

Eisenhower

cal relations. The Treasury would

should

,1945, and the expansion of General Gas seems to parallel that of

lacturing Company

proposed

participate in the examination of

expan¬

key

a

intergov¬

on

of Federal-state-local tax and fis¬

*

themselves.

municipally

sumably review the whole subject

investor

he

new

plants.

relations

President

sion, at the most economical cost

in¬

have

will

to

finance

to

commission

The

urged

relations.

to

this

for

necessary

curities

utility executives
maintain and expand their ef¬

to

A

needed.

most

owned industrial

utility

areas.

LP-Gas appears to be the fastest growing segment of

industry.

enterprise where

private

are

problem has arisen in connection
with the use of tax-exempt se¬

been

industry, national sales in 1951 being nearly four times those of
the

of

they

Stressing the highly competitive
nature of the capital markets, Mr.

crease

Since

area.

has

field

II

by-product of oil refining, the company benefits by

a

near

to another

billion

War

the

spent by the utilities to provide
improved and expanded plants.

increase

In order to obtain the additional

panies territory, this apparently has not interfered with its growth
trucks

$13

World

from

almost

capacity

'

its

than

of

di¬

funds

least.

is usually shipped in specially constructed railroad cars
or tank trucks.
Its principal domestic uses are for cooking, househeating, water heating, refrigeration, clothes-drying and air-con¬
ditioning. Sales to industrial users are principally for engine fuel
for farm tractors, highway trucks, buses, and irrigation pumps, as
well as rice, cotton and lumber dryers, weed burning, flame culti¬
vation and boiler fuel.
While natural gas has come into the com¬

since

years, Mr.
He pointed out that

end

that

fact

The

exist

investment

verts

few

next

very

securities

tax-free

proximately 25% by that time. He
stated that a recent phenomenal
growth of the public utility in¬
dustry will continue uninterrupted
during the next several years, at

pressure

.

more

that electric power pro¬

would

the

the

to

20% by 1955 and that gas produc¬
tion would show a gain of ap¬

produced from natural gas and casinghead gas as
refining crude oil, and when kept under

is

since

April 17

on

the

Merkel said.

of

duction

in the process of

as

during

Maryland Public Utilities As¬

declared

sales offices.

well

Conference

Business

to the capital market for
billions of additional dollars

come

many

City, speaking at the

sociation in Baltimore

of 57 branches and

fleet of 331 vehicles operating out

a

F. Merkel, Vice-Presi¬
Gartley & Associates, Inc.,

dent of

the

in

reflect their
high

no means

investors.

bracket

Walter

General Gas Corporation

securities

advantage

of

rates

lower

The

such

on

of the

effects

economic

and

Walter F. Merkel, Vice-President of Gartley & Associates, Inc.,

Utility Securities

both the fairness

lems concerning

Forecasts Further Growth of Utilities

Public

Thursday, April 23, 1953

...

is under the direction of Professor

Smith, who is
Harvard

supervise
On

the

our new

legal

on

leave from

Business

side,

School

to

Analysis Staff.
Mr.

Kenneth

-

Number 5214... The Commercial and Financial Chronicle

Volume 177

Continued

Gemmill of Philadelphia has just

Revenue to the

lems

and

Means to

by

finds

In

able

be

Committee

Taxation

Internal

on

thing

cials

r

staff

and

also

are

get

always
the

banks

of

an easy

is

fact

that

have raised

not

hun¬
addi-

out

Revenue, and

sound

standpoint

policy

Whatever

.to

Congress

will

for

the

be

careful

(

.

suggestions
of

possible

in

study

to determine what

fort

tions,

those

most

ef¬

an

ing

not

This' situation

obligations

imposes

special

upon

they should be.
During previous booms, lax lend¬
ing policies frequently added to

is for the

recommenda¬

is within the power of
'Congress to do with them as it

it

anay

fit.

see

dull

has

Congress

that

responsibility.

as

tions.

Some forms of competition

of course, healthy and desir¬

are,

Administration of Tax Laws

to

final

a

point.

comment

the

on

sub¬

ject of the administration of the
tax laws. The policy of this Adis

ministration

.

laws

interpret

fairly and without

attempt

or

to

to

the

bias

any

indirectly

secure

something that has not been
thorized

by

.attitude

has

the

au¬

Congress.

already

This

been

made

•clear under the able and vigorous
^

leadership

Commissioner

of

An-

•drews. With tax laws and business
transactions

there

;are,
to

complex

as

they

as

However, experience has
that certain forms of com—k*
petition among credit institutions

proven

I should like

briefly

reflect

to

philosophy

of

large

avoid

to

all

misuses

such

public.

such

it is,

as

ture.

Only thus

not

"law should

in

And

the

examples

as

as

of

some

be made

the

is

fairly

much

as

ment

agent to discover that
has
it

made

is

-'

an

additional

7.•'

.

that

•

could

we

immediate

the

foresee

mit

future

to recommend

us

to

per-

all the

ad¬

justments which we find desirable. " Simplification and removal

;

of

inequities

features

of

promptly
nition

:

•

•.

we

our

repressive

laws

shall

as

that
be

the

tax

We

objectives.

must

and

our

can

are

our

proceed

be reduced to a

with

with

recog-

our

pri-

objective of maintaining
sound budget position.
mary

a

York

City

York

Stock

Tiadmit Harold P. Hecken to

nership

on

the

have

learn

will
part¬

Let

short,

Stock
Hilda

limited partnership.

Exchange,.

Kaprow. to
•




7

somehow be
cooperation.

must

groups

for

together

the

good.

and pr0sper.

Individuals

and

are

survive

to

Certainly the future

holds plenty of challenge for jail
us

in

the

fateful

of

banking business.;iTh©

question
the

have

is

whether

we

intelligence,

the

vision, and the courage— in short",

New codes of social conduct are

needed.

the years that lie
independent banking and

private enterprise

will

Social Responsibility

Need for

to do in

us

groups

the statesmanship

to live up to

these responsibilities.

-

monetary regulation
objectionable and most

needed type

This puts

minimum, consist¬

of control in a private
bankers in an unusual

bankers

to what

as

no

Yet,

man.

first be clear

us

than

more

the

Notes

NSTA

next

in the public interest,

are

called

upon

exert

to

this shift in policy does not mean.
It does not mean a return to a

more

more

self-discipline and support
regulation of their own busi¬

laissez

jaire

ness

than

in

twentieth

the

philosophy. Midway
century,

other

are

groups. They
restraint and

laissez

economic

more

Thomas Jefferson

that

the

best

once

remarked

Avoiding Excessive Regulation of

government js that

7

which governs least. There is truth
in this maxim
still; but in our

economic

influence

activities.

upon

the

sive

come

copybook should be revised: "The
best
government is that which
governs

neither too little

much."

■

.'V

nor

One of the basic differences be¬
tween

Jefferson's

is that the
to
to

and

ours

ctrnnrt

strong public demands, has now

assumed
to

time

government, in response

' r7.

Hotel

of

is

menace

a

to our free

r

econ¬

The duty of bankers, there¬
fore, is not Only to support sound
monetary regulation, but also to
do what they can to avoid the
dangers of excessive regulation.
As

practical matter, the most

a

j

th

w

f

bankers

can

do

effective way tnai Danxers can ao
this is so to conduct their banking

responsibility for trying
operations that the
a
high level of eco¬
cuse
for additional

maintain

The avoidance of
reduced
unemployment has beam*

to

a

need

or

The Eisenhower Administration

^"gVu'sinesstnd

accepted the re- rising prices, the banks have adIt could not possibly hered to generally conservative
lending policies. Also, witness the

explicitly

sponsibility.

as

possible, it should try to make operation of bankers with the
use of individual initiaVoluntary Credit Restraint Pro-

maximum

voluntary cooperation, and gram of 1951-2. And only recently
self-adjusting tendences of the American Bankers Association
competitive markets.
;
! has announced new plans to? try-

tive,
^be

7.

,•

SECURITY TRADERS

..

.

.

.

'■

•

7,7;:;

>" '7v

.J

-

,

(STANY) Bowling

of April 16, 1953 is as follows:

League standing as

■

ASSOCIATION OF NEW YORK

Security Traders Association of New York

7,■77'

7./'

the Park Hill Country Club.
;

'

-

Points
Bean (Capt.), Frankel, Strauss, Nieman, Bass, Krassowich
38
3Y
Hunter
(Capt.), Klein, Weissman, Murphy, Searight
36^
Meyer (Capt.), Kaiser, Swenson, Frankel, Wechsler, Barker
Team—

36

Cohen
(Capt.), Smith, Valentine, Meyers, Farrell, Brown
(Cap!.)* Craig, Fredericks, Bies, McGovern_____

26

Growney

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

Murphy

(Capt.), Manson, D.

Montanye, O'Mara, Pollack,

Gavin
Donadio

(Capt.), Demaye, Whiting, O'Connor, Rappa,

(Capt.),

23

7-

>

25

22%

Werkmeister, Leinhard
22

Corby

——-—

"

Club

200 Point

Sam Gronick

_—-221

225

Richy Goodman
Hank Gersten

5

-

Point Club

—234

Herb Seijas

-

—

Tom Greenberg

Walt

Seijas

Bradley, Weseman, Hunt, Gronick, Huff._
Greenberg, Tisch,

29

28*4

23

—

—

Mewing (Capt.),
Leone

■

(Capt.), Ghegan, Jacobs, Gannon,

Goodman

Serlen

7

(Capt.), G. Montanye, Voccoli, Siegel, Reid.___.__

Burian
Krisam

American

banking in recent years has been

has

and on Aug. 21 the Field

starting about 4:00 o'clock p.m.

Day will be held at

ex¬

regulation is
minimum.
In this

°£ PUb_

->>ni

;

omy.

too

7'

.-•/ j;

7J

held in Denver on Aug. 20-21.

Calcutta Buffet, will be held at the Albany

Aug. 20 the

On

it, the better. Exces¬
regulation of credit could be¬

there

our

Perhaps

Credit

7

Summer Frolic will be

Fortunately, it does not follow
that just because some regulation
of credit is necessary, the more

highly complex world of today,
public policy is bound to exert
considerable

than is required of others.

:;V

Mountain Group-Bond Club of Denver annual

The IBA Rocky

public-spirit-

edness

CLUB OF DENVER

BOND

must display greater

^ IeU<1"

disavow it.

New York City, members of

admitted

work

to

common

g0> there is much that remains

for

.

In

ulation

™ss

May 1.

American

Economic

late.

,

ahead if

to shreds.

prevent this kind of chaos,

vival.

problem, therefore, is how efforts of the American Bankers
government can foster stable pros- Association in 1948 to restrict the
Nielsen Partner
perity with the least interference use of bank credit to essential purNielsen & Company, 120 Broad¬ with individual freedom.
So far poses. Witness the nationwide co-

-

eco-

—.

aggressive

The problem is one of mutual sur¬

The

way,

mi__

The

the interplay of the fac¬
supply and demand in com¬
petitive markets.

has
for banking.
too,

members of the
Exchange,

economy

To

position. The banker relishes reg¬

Gammack & Co., 40 Wall Street,

New

structive leadership in public af-

tors of

public welfare. This,
important implications

nomic activity.

Gammack to Admit
: New

7

varied

many

interests.

group conflict must
replaced
by group

It does not

citizens.

ent with the

as

recommendations

consistent

,/V

beset

are

enterprise economy.

-enough reduction in expenditures

■

of individual

economic life of the nation should

de-

a

a

is the least

overpay¬

an

discover

to

our

It is a conditioning, rather
coercive factor. It infringes

Administration is that direct gov¬
ernmental
interference with the

a

as

a

groups.

conflict of these groups could tear

hardly at all upon the free choices

Another major plank in the eco¬

a

wish

I

•

than

well-being of the

nomic platform of the Eisenhower

and honestly,
credit

responsibility is

suspend

of collecting

the

to

ficiency and collect
tax.

:

the economic

Reducing Government Controls

might

of

taxpayer

■

agents.

nation.

now

us

of

It does
the arbitrary de¬

depend upon

We

representing
nomic

regulation

cisions of droves of governmental

that American banking will alremain strong and contribute

to

by the Con¬

process

revenue

.revenue

In

not

be sure

we

of

the

structure.

obvious.

impartial and impersonal.

ways

not by administrative fiat.

gress,

-

commu¬

we

can

by

economic

The dangers of this situation are

etary management is a useful and
desirable type of control.
It is

continue

to

their

must apply these
lessons well, now and in the fu¬

•think it should be. Changes in the

.

are

serve

well,

•exist. We shall administer the law

It

If banks

nities

of adminstrative discretion and to
remove

social

YJ:t\ba7 ?7r_7?^lze..„7(7.0":

great cost to the banks and to the
at all times to

• •:

kind

This

attitudes of abound in the world and that these
Some qualities can be cultivated an$ e£of
these
groups
are
motivated fectively mobilized. 7
;
7
chiefly by prejudices and irre- : • Here is the great opportunity
sponsible self-interest, rather than and responsibility for bankers,
by the requirements of a sound they will, bankers can exert con-

have learned the hard way, at

we

extent

various

credit
unhealthy and even dangerous.
may seem
at times to interfere
All of these are lessons which
too much with banking operations.

social

or

administrative
earnestly
en¬

an

shall

We

group.

deavor

bias

the

common en—

terprise.

This stems from the fact that

this opportunity and of the re- has been built upon the strength
sponsibilities it entails. In a de- of moral values. This is not naive
mocracy such as ours, public poli- optimism; it is simply a reebgnicies are determined to a very tion that honesty and decency-

^e standpoint of bank-

public

ers,

twist the administration of the

law

Fr0'm

negg •

—

are

opportunities

are many

recognition of the moral obligaof tions of all individuals and groups

fairs. In order to do so, they must
today, not maintain a responsible,' objective
by the simple two-sided class war- approach
to
public
problemstary policies must be based upon
fare envisioned by Karl Marx, but Thereby, they can also provide an.
the requirements of the national
by a welter of pressure groups example for other groups to. emueconomy, not of the banking busi-

able.

As

aspect

tbe-Eisenhower victory which has to contribute to the

...

make

do

-we

third

a

special import for American bank-

American banking.
Bankers, more than most
groups, understand and appreciate
the importance of these measures.
the inflation and thereby accentu¬
It is their peculiar duty, therefore,
ated the subsequent decline. Prob- to
give their full support and coably the greatest contribution that operation to the development of
banks can make to the future sta¬
sound fiscal and monetary poli¬
bility of the economy is to adhere cies.
7
7
to conservative lending policies.
In the field of monetary
and
(3)
We must avoid unsound
credit
regulation, this responsi¬
competition among credit institu¬
bility is not always easy. Mone¬

conservative

of the entire -nation. When

.good

may

to carry through

period of adversity. Now is the
to reappraise your lending
policies to make sure they are as

make

the

which

a

legislation

tax

result

on

Measures

time

a

i

.

we

loans

might not wish

adminis-

and

tratively feasible.

7

from

those

be paid when due and which you

of securing changes in
are

yet

Specifically, this means that the for the next four years, at least, quality which our
society, furbuEisenhower - Administration
will bankers will have a greater oppor- lent though it is, can seek >to de¬
*
"J
'
J
place. its greatest reliance upon tunity to contribute to the formu- velop. One could easily cite en¬
fiscal and monetary measures to lation of public
policies than for- couraging instances of it In the
maintain economic stability. This merly.
actions
and
policies
of
several
is already clearly apparent in the
I think it would be difficult to economic groups in recent >y£ars.
news from the nation's capital.
overestimate the significance
of After all, our whole civilization

of Internal

law which

Fiscal and Monetary

is

(2) All banks should guard
against laxity in their lending

policies. - Now is the time to weed

the process

There

the

of

Congressional,

(the

controls

Emphasis

Treasury groups should speed up

•

;

which

decide

to

own

Bureau of Internal Revenue. Col-

«

alone,

poses,

^

'

Bureau

is

these

source

a

only to its

laboration between

•

Sunday
school stuff; it is the first law of

community but to the entire bank¬
ing system.

working

officials

with

closely

-

re~

not

able.

But

weakness

of

policy offi-

The Treasury

of social

and does not obtain it is

the

Ways and Means Committee and the Senate Finance Com¬
mittee.

is

tional capital in recent years. Any
bank that needs more capital now

House

-

a sense

This

mo"etal'y management is both well-being of the whole economy..
utilizing necessary and desirable, and de¬
But social responsibility is more
effectively can we serves the full support of the than
intelligent self-interest: It
hope to avoid and eliminate the banking community.
implies a conscience, a citizen's
pressure for other types of con¬
concern for the
public welfare, a
The Dangers of Group Conflict
trols which are more objection¬

do.

dreds

Joint

of

develop

sponsibility.

that

SLSLSSS Unill!a^
objectionable. Only by

and

out

go

This is not
to

Revenue

staffs

the

and

must

con-

sound basis.

even for productive pur- cessity of working together.
We
turns out to be inflationary live in an age of economic interfrom the standpoint of the econdependence. The welfare of every
controls
omy
as
a
whole.
That is why group depends upon the continued

governmental intervention is
reduced, the practical prob¬

lem

happy to

Congressional

the

a

voluntary
important though modern technology,
they are, cannot do the whole job.
The quality of responsibility is
When our economy is operating to some extent a matter of
long
at full capacity, as at present, any
range, enlightened self-interest; a
substantial
expansion
of
bank realization of the imperative ne-

Banking

more

should

capital.

very

If

he

closely with the

work

to

of

staff

are

on

clear

is

3T

credit,

that

to be

investigations in the

our own

it

efforts

they are becoming in¬
adequate, then the answer is clear:

experience in the field.
.

keep the extension of
credit

What New Administration

prob¬

reviewed

proposals

Treasury, we

mg to

But

lawyers, economists, accountants,
and administrators with practical

-

page

Analysis Staff. We

will thus be able to have all

.

16

sumer

joined the Treasury to supervise
the Legal Advisory Staff. We are
also adding some industrial ac¬
countants and men with experi¬
ence
in the Bureau of Internal
-

from

(1765)

208

——292

Bradley ——-200

Duke

Hunter

Walt Mewing
Joe Douadio

Julie

Bean

D
t_r

38

The Commercial

(1766)

of

Continued from first page

government they want is hardly in keeping wfth Ameri¬
tradition. Our position as conqueror of Japan leaves

can

in

us

We See It

'As
Karl Marx

Lenin, neither Stalin

nor

communism

nor

trying role in connection with all this, and our
association with the arch imperialists of the
past
one sense,
perhaps, embarrassing.
;
a

close
nor

socialism, is in any

Trotsky, neither

way

in

is

Yet all these

responsible for

not

are

of the conditions and the issues which must now
faced and which may well prove real stumbling blocks

out of the

paths of all dealings or understandings with either
the Kremlin or any of the major Eastern powers. It is of
the utmost importance that our own diplomatists should
bear this elementary and basic fact always in mind. Other¬
wise

all but certain to fail to obtain end results

are

we

might be within

our

security in this modern world of
dent

has

Continued

and

into

their

ears

in

recent

never

or

been

-

:.

Nor
our

can

it

be

attitudes have

anything other than the trap¬

denied that at times in recent
years
come

perilously close to interference

with the internal affairs of other
countries. For

part,

we

have

our

own

sympathy with or any confidence in the
communistic regime in China. We find it
anything but
to our
liking. Yet any effort on our part to prevent the

Chinese from

no

establishing and maintaining whatever kind




listed

change

all

here.

the

of

mar¬

listed

the

on

Exchange totaled

of three that

government

ownership.;*

We have made good
progress in
recent years. In three recent
post¬
war

to illustrate,

years,

1,-

some

300,000 people became share

own¬

for the first time.

ers

But our fi¬
nal goal is still far, far in the fu¬

ture.

>i.

Last year, to

help

reach

us

undertook

we

our

number

a

to get fun¬

information

about

our

The Brookings Institu¬
Survey of Share Ownership

the

United

States

such

was

a

operation.

of

the

engaged

in

Ca¬

a

In other words,

800

or

industrial

so

445

over

companies,

of those

54%, have

or

earnings of

our

eral

of

peoples.

our

I think you

in

might be interested

recent series of articles in the

a

London

tled

ket" presented statistical evidence

the argument that in
the private investor, as

support

England
used

know

to

him, is dead—
"crushed to death by high taxa¬
tion and rising prices."
we

"In

the

"Economist"
market

the

few

next

years," the
"the plight of

said,
for

risk

capital must

be expected to grow at once more
serious and more obvious."
The writer

said

be

tem

only
it

as

realistic

one

answer,

the capitalist sys¬
been knoWn is to

has

wither and

there appeared

die.

."

.

.

"If

a

dertaken.
out

no

in

world; for it

countries

two

our

degree unknown else¬
that

is

the

in

im¬

portance of the freedom of capital
to work where it pleases is under¬
stood and

accident

Nor is it

respected.
that

United

Canada

States

and

present

an

the

solid

a

ideological front to the menace of
.E'ach of us has

world communism.

deep

a

and

abiding

the rights and

dividual,

respect

which

concept

a

flourished in

for

sanctity of the in¬
has

North American

our

capitalistic society.
Importance of Capital -Mobility
Our

mobility of capital has

duced

condition

a

which

abhorrent

is

theorists

of

still

pro¬

daily
to

life

Russian

with

obsessed

the

capitalism in¬
evitably produces a disenfran¬
chised proletariat.
In the United
States we have some 6,500,000 peo¬
ple who have a direct ownership
interest in publicly owned corpo¬
rations and another 2,000,000 peo¬

ple who

own

shares only in pri¬

vately held corporations.
I would like to

of

owners

in

see

the

United

States

doubled—and then doubled again
and again until
every family has

ownership interest in

an

ductive

wealth.

come down and play
Throgmorton Street."

their part in

That is England's

problem, that
is your problem, that is our
prob7
lem—employment of the mass savT
ings of the people.

our pro¬

of life.

"If

generation

new

a

induced

invest

to

of

program

be the first

in

active
need.

is

be

to

industry,

a

That is my

publicity

will

billions

of

dollars

the

arguing

men

imminent

dynamic
must

all, the. people who don't

It will have to

disappearance of a
in Britain.
It

industry

demonstrate

that

an

I

know

there's

no

need

to tell you of the work that

about
share

example,
there

100,000

were

millionaires,

Nor

active

for

me

D'Arcy

we

want

the

risks

to
and

and

tell

people

benefits

to

over as

of

spread

wide

an

if

publicly owned

do

Exchange

ownership
share ownership
area as possible.

Our Basic

that fantastic number,

could not buy our

businesses.

We

our

own

se¬

This extensive search for

facts to

serve

the basis for

as

ac¬

got to tell them why

to their

advantage to

vestment offers

how

out

see

it's

what In¬

them, and to point
it is

easy

to

become

a

shareowner.
Our stock

have
to

exchanges, of course,

concurrent

a

insure

that

whether he is
or

States, is given the

honest and

possible.

investor,

citizen of Canada

a

the United

most

responsibility

the

efficient

service

A striking example^of
international cooperation with this
•

objective
last

mind

in

was:

provided

when our two govern¬
acted ind concert to protect
investors
against
the
so-called
year

pasture salesman, the sales¬

moose

whose

man

main

aim

in

life

pears

to be to sell worthless

rities

to

It

to

seems

cooperation
countries
of

ap¬

secu¬

the gullible.
that

me

growth

two

our

the tide

as

here

surges

closer

even

between

is inevitable

the

in

North.

I have in mind such

ects

the $63 million

as

project of Aluminum Company of
Canada at KittimaU

-

.

-

i

.

I mention the amount of money

involved in each of these projects

over

idea

as we

people

and, above

these

projects

will

They

create.

merely the start in a dynamic
cycle of growth. In each of our
are

antibiotics, third-dimension mo¬
tion pictures, jet planes, atomic
submarines, and synthetic fabrics.

can¬

the

the

—

find

plenishment of industry."

did decades ago,
wealthy to supply these
in the United States, for

depend,

on

securities

un¬

to

countries

Stock

not

funds;

to

about

can

ever

tried

exchange is the indispens¬
able pipeline through which sav¬
ings must flow to secure the re¬

make

further growth possible.

we

have

not only because the investments
their pints,
and
women
over
their teacups, themselves are huge but also be¬
whether they are concerned with cause they must fade away before
the disappearance of savings and the even larger investments which

set

democratic capitalism.

need

We

own

curities.

a

Doherty, A. J. Trebilcock and Jack
Rattray are doing here in Toronto
Perhaps the best way to em¬ on that score. Perhaps, however,
phasize the need for spreading you might be interested in a
share ownership is to point out thumbnail sketch of what we are
that our industries, just as yours,
trying to do at the New York

of

operation,

proj¬
expansion
program
of Steel
Company - of
The next "Economist"
article, Canada at
Hamilton; Consolidated
"Shares for Sale," was
just as
Mining's $60 million expansion at
incisive in its observations.
Trail; the $41 million development
"The City and the Stock Ex¬
of Sherritt-Gordon Mines at Lynn
change," the writer said, "have sat
Lake; the $200 million operation
uncomfortably on the defensive of
Iron Ore Company of Canada
and have done nothing to explain
on
the Labrador-Quebec border;
to a wide public that the dearth
Canadian
Chemical
Company's
of investment in risk capital is a
$55 million petrochemical plant
major threat to Britain's industrial
near
Edmonton; the vast half a
future—and hence to the nation's
billion
dollar
power-aluminum
standard

stock

the number

all

who

population to

the

or

of

ments

where

Canada

costs

the prices we charge, our methods
of selling.
We have in progress

"Economist," a publica¬ tion is
grounded on the simple
given to airy dreaming.
premise that we can't wait for the
first article, intriguingly ti¬
public to beat a path to our doors
"Corpse in the Capital Mar¬ —we've

Canada to

It is

in

and
securities
In addition we have

our

not

accident that capitalism
flourishes in the United States and

States,

the world.

policy

dissected

the most intensive survey of our

private industry and the
Stock Exchange are to revive," the
article concluded, "they must de¬
vise between them new ways of
inducing broader masses of the

United

tax

regulations.

merchandising problems

to

And

we

of our productive capi¬
depends, is a wider stream
of equity capital, the constructive
employment of the mass savings

"unless indeed

Exchange,
some* 330
are
immediate part of the Canadian

recently we finished a
analysis of the efficiency
operations in terms of Fed¬

our

vitality

the New York

on

that

limited degree

a

of

talism

one

the company he

is

also

corpora¬

about

are

themselves

know

corporations. The only
answer, the answer on which the

to

industrial

We

the reinvested

on

The

chances

the rest of

,

to

document, for it has filled a deep
gap
in our knowledge
of
the

prosperous

tion

issues

borrow

rely only to

issues

1,012

to

oblivion.

can

market value of

The

States

the

businesses
into

Ex¬

value

17.6% of the

or

Canadian

States

Toronto

market

a

of

United

the

on

had

value

date

outworn theory that

a

as

recent

a

issues

the

we

difficulty be interpreted
pings of imperialism.

At

800-odd

a

have

few.

a

investments somewhere outside of

seriously

different look to the peoples on the
other side of these installations.
Their experience of the
centuries is such that things of this sort .can
only with
may

our

shares, to mention only

economy.

in any of the

have

Only

an

have aggressive designs on the peoples of
Asia, or anywhere else in distant lands. The facts, how¬
ever,

mean

broad

Stock

in the northern
approaches to Russia. Even with all this
it is difficult for us to see how
any one with reason can

suspect that

food

companies listed

remains, of course, that we have now under
long string of islands, island bases and
island fortifications
stretching across the Pacific to the
very doorsteps of all these Eastern
peoples, and more
recently we have been following an analogous procedure
control

and

out

The fact

our

eco¬

coun¬

tilling industries. Qn the Toronto
Exchange you have United States
chemical, shipbuilding, automotive

nadian

Those Island Bases

-

the

two

our

clearly expressed. On

selects

good
played
country, and we
still have the remnant of the
regime which we supported
there and which was not able to save the
day for those
who did not wish communism to
reign. But these matters
though puzzling and difficult, need not be insoluble. It
may well be doubted whether there is much real suspicion
among the informed in any of these countries that this
country harbors imperialistic designs against them.
t

between

market place are traded the shares
of your mining, railway and dis¬

out

will with the present rulers of China
by the part we
in the internecine strife in that stricken

-

mesh

interests of

tries is

tion,

of the Orient. We have not earned much

areas

close

United

peoples by our discriminatory im¬
migration attitudes, but by and large there has been a
deep bond of friendship between the rank and file of
involved in exploitation either in China

the

nomic

Actually, and this may sound
paradoxical, when an investor in
my
country buys a share in a

minds of Far Eastern

produc¬

don't

industry.

$2.2 billion.

the

I

economy.

listed

propaganda of very recent years, the
United States would stand in a preferred
position in lead¬
ing to some sort of workable rapprochement between East
and West. We, of course, did ourselves no
good in the

other

11

page

Investment

all

years,

of

means

sure

clarify that statement by saying
that public
ownership does not

in

New York Stock

obviously have a situation which will lend itself
reluctantly to elimination or even control.

Americans and the Chinese. We have

I'm

objective,

Problems of International

ket

we

But. for

from

$7.6 billion,

Exploitation

standing with their Western brethren. For these and other
reasons there/has
grown up through the years, and even
the centuries, a profound resentment against the West
which will not be -easy to put down.
vNow add to all this
the effects upon the rank and file of all the
propaganda
dinned

task ahead of him.

easy

the

of

tion.

tion

In the Far East there is a history of exploitation run¬
ning far beyond the recollections of presently living gen¬
erations. Not only is there the animosity and the resent¬
ment stemming from the fact that the West has taken a
great deal of the good things of life without full com¬
pensation, but also a large measure of that rankling which
comes
to a proud race from having been denied equal

which has been

ours.

reach.

always been ruled by single individuals
of individuals. The people have no back¬
ground in, no knowledge of, and no experience with what
we think of as democracy or liberty—and probably very
little interest in it. The nation has always been suspicious
of outside peoples, always uneasy about what foreigners
might do to it. It is apparently very nearly second nature
for those who manage the affairs of the country to be
secretive and "withdrawn." There is apparently among
those who run the affairs of the country a deep-seated
"inferiority complex," a sort of resentment against the
Western world growing out of a feeling that they are not
freely accepted as equals. And Russia has always been
imperialist. It, too, has (at least in its own eyes) a "mani¬
fest destiny," and always has had one.
Historical

can¬

our own
Obviously^he Presi¬

ership

damental

small group

a

no

Kremlin,

waygf

Thursday, April 23, 1953

...

of studies and
surveys

Russia has

or

recent machinations of the

more

not, of course, be permitted to stand in the

in the

which otherwise

complications combined (wljich mostly
or any others which arise

product of Stalinism)

a

many

be

at]4 Financial Chronicle

Our

basic

around this

Policy

policy

revolves
objective: Public own¬

today

there

industries which
of

generation

a

These
But

were

ago—television,

exciting

are

how

long

will

are

part

of

they

page of progress
make

way

for

whole

are

undreamed

words
it

be

the

today.
before

industries

which

have not yet been conceived.
From

the

past,

having turned to
.

;

1946

through 1952 inclu¬
sive, industry in the United States
has

spent

$151

billion

on

new

plant

and equipment. This year
it is estimated that
$27 billion will
be spent for this purpose.
* 1
A

great part of the billions of

dollars the

industries of

our

two

Number 5214

Volume 177

...

'«li

they

from

nations will heed must come

i,

to

anxious

are

encourage

investment.

investors. Obviously it

foreign investment in their coun¬

investor

obligation and responsibil¬

tries—joined the Soviet bloc in
approving the Resolution. Only
the United States, the Union of

and

mosphere so that the needed sums

South

with

will be forthcoming.

the

individual
is

our

ity

everything possible to

do

to

create

investment

healthy

a

at¬

New Zealand, and
of
Great

Africa,

United

Kingdom

his

funds

Canada

of

to

societies, our economies, are under

rights

diabolically skillful

and

constant

pose

nevertheless,

attack from the totalitarian states;
and

from misguided or mis¬

even

informed

groups

within our own

ranks.

in

Canada,

the

in

we

the

States, and other free na¬
world must do more

United
tions
than

merely resist these

We must

fight to the others.
initiative

the

take

at

and

home

that

of

private

investment

that

and

—

the

those na¬

as

and

enter¬

of

of

its

holding

are

future

realization,

I know of

actions,

the magnificent

highway

even

more

cooperative relationships and un¬
dertakings which Canada and the
United

called

be

can

the

peace.
of

only

question

one

which progress waits.

upon

-O

It is

already this: What is the Soviet Union
expanding busi¬ ready to do?
Whatever the answer be, let it
financial
cooperation
have

States

achieved. To such
ness

and

with

Canada,

the

continuing

I

pledge

interest

be

the

you

plainly spoken.

Again

support

and

The hunger for

say:

we

is too great, the hour in his¬

peace

of the New York Stock Exchange.

tory too late, for any government
to

from

13

page

Eisenhower

Urges Russia Prove

organization.

hopes with

mere

promises and gestures.

Deeds

There

She Wants World Peace
from

World

War

II—would

be

impressive signs of sincere intent. devoted to military

be

can

truth

of
no

is

simple.

persuasion but by

deeds.

Is the

new

leadership of the So¬

viet Union prepared to use

materials to be

of certain strategic

test

The

-

make clear our views to our rep¬

resentatives in the United Nations

men's

mock

words and

No Persuasion Other Than by

.shall

we

of

know

i

other than

course,

by these and similar

that

together to im¬

prove

States.

no

that marked

must

we

United

the

of

up

striving

and

continue to work

inter¬

respect

we

bright

towards

of the investor.

body to the
international

international

an

long

the flow

capital

Continued

done

been

has

nations

this

oppor¬

an

the

down

securities of

so

States

Exchanges

your

the

welcome

national

two countries regret

our

revival

attacks.
aggressive and carry

We must be

negated

go

damage

by

of the

the

to

nities of

You

tions

line for
private investment. I do believe,
though, that the business commu¬

tunity

all

world—just

but which,

defensible

were

in

prises

in¬

But I would like

on

and mine the

improve

United

the

ease.

traded

can

industries

the

in

or

equal

see

that freedom

while

But

American

North

has

choice—he

of

range

vest

The

today

problem today is not only Britain and Northern Ireland op¬
our present way
of posed this travesty.
doing business. We must fight,
Among the nations who de¬
and fight desperately, to preserve
clined
to
vote
yes
or
no
was
the gains we have achieved. Our Canada—for reasons which I sup¬
Our

to

39

(1767)

The Commercial and Financial Chronicle

its de¬

cisive influence in the Communist

purposes;

world

including control of the
International control of
flow of arms—to bring not merely
energy to promote its use
an
expedient truce in Korea but
amount of oratory.
for peaceful purposes only and to
Overseas Investment
porting nations have their own
This we do know: a world that insure the prohibition of atomic genuine peace in Asia?
Is it prepared to allow other na¬
One of the most important and job to do to facilitate the flow
begins to witness the rebirth of weapons;
of capital. In the United States, trust
tions, including those of Eastern
among nations can find its
(4) A limitation or prohibition
pressing tasks before us is the
for example", we must modify the
way to
a
peace that is
neither of other categories of weapons of Europe, the free choice of their
restoration
of
private
overseas
own forms
of government.
investment to its traditional, its capital gains tax and double taxa¬ partial nor punitive.
great destructiveness;
Is it prepared to act in concert
tion of dividends. We must work
With all who will work in good
(5) The enforcement of all these
essential, position in world affairs.
with others upon serious disarmaSince World War II the United towards the elimination of inter¬ faith toward such a peace, we are agreed
limitations and prohibi¬
ment proposals.
national double taxation; exten¬ ready—with renewed resolve—to tion
States has exported through gov¬
by adequate safeguards, in¬
If not—where then is the con¬
ernmental channels some $38 bil- sion of reciprocal tax treaties; the strive to redeem the near-lost cluding a practical system of
crete
evidence
of
the
Soviet
establishment of uniform securi¬ hopes of our day.
inspection under the United Na¬
f lion
in the form of military and ties
Union's concern for peace?
The first great step along this tions.
legislation and reciprocal se¬
£ economic
aid. In contrast private
The test is clear.
curities treaties.
The details of such disarmament
way must be the conclusion of an
foreign investments during the
There is, before all peoples, a
programs are manifestly critical
Your own. government has been honorable armistice in Korea.
same
period totaled around $7.7
This means the immediate ces¬ and complex. Neither the United precious chance to turn the black
billion.
a leader in.ihis area—you do not
tide of events.
of
hostilities
and
the States nor any other nation can
Canada's contribution to world have a capital gains tax and you sation
abroad.

two

of

other

those

and

governments

our

Second,

Resoration of Private

The

capital

They would

carry a power

of per¬

suasion not to be matched by any

(3)

—

atomic

ex¬

.

.

If

and mutual defense since
amounts to around $2.5

recovery

the

war

have

made*-

a

of

elimination

eventual

private invest¬ taxation oihfliividends, to mention
It
should
mean—no
less im¬
ment abroad during these years two points^aAnd I have reason to
portantly—an end to the direct
comes
to about one-quarter bil¬ believe thatlDur present Adminis¬
and
indirect
attacks
upon
the
tration in Washington is aware of
lion dollars.
security of Indo-China and Ma¬
These governmental grants and the importance of private invest¬
overseas
and
is
actively laya. For any armistice in Korea
loans have been vital to world ment
that
merely released aggressive
,.recovery
but admittedly they studying waffs and means of en¬ armies to attack elsewhere would
were
stop-gaps,
not
too
much couraging
flow.
*
be a fraud. \
admired by the giver or by the
P r e s i d?4?ri t
Eisenhower has
We
seek, throughout Asia
as
receiver. It is high time, in my named
LeWis
W.
Douglas, our
throughout the world, a peace that
opinion, that government
back former Ambassador to Great Bri¬ is true and total.
out of the foreign investment tain and at one time Chancellor
Out
of this
can
grow
a
still
? scene
and high time that the pri¬ of McGill TJniversity, to head a
wider task—the achieving of just
vate investor step in.
group to study our foreign eco¬ political settlements for the other
But the private investor
can¬ nomic policies with a view to rec¬
serious
and
specific issues be¬
not be just tolerated—he must be
ommending' changes designed to tween the free world and the
Canada's

billion.

•

,

-invited

To

!,

welcomed.

and

encourage

three

capital,

private

of

strengthen the free world.

the international

;

flow

i

things are necessary, therefore.

First, governments of those na¬
tions seeking capital
must take

Soviet

Union.

fresh, hard look at such deter¬
rents to investment as export or

a

None of these issues, great or
Thirdly, our stock exchanges,
our industries, our busines organ¬
small, is insoluble—given only the
izations, and our financial commu¬ will to respect the rights of all
nities
should
establish closer nations.

working relations with each

other

v.;;

It

encouraging to note : from
frequent references in the daily
that

governments'r: of

the

nations

free
,

.

these

studying

are

questions intensely. It is to be
hoped that some tangible results
will
I'd
an

//:

follow.

soon

in passing

mention

lik&^fo

inter¬
must be

unfortunate example of

which

action

national
corrected.

The General Assembly

of the United Nations last Decem¬

so-called National¬
Resolution by a vote of

ber passed the
ization
36

to

with 20 absentions. The

4,

Resolution purported to be a dec¬
aimed

laration

asserting

at

the

sovereign rights of nations but at
the same time speeding and safe¬

guarding international investment.
The

Resolution

right of

a

resources,

the

nation to nationalize its
then topped off this an¬

nouncement

strangely

recognized

of

the

failing

to

obvious

mention

Curiously,

too,

many

capital-

nations—nations which claim




registered form and
receive their dividends, proxies,

certificates
to

and other rights

in many for¬
eign countries shares are trans¬
ferred

of persons,

directly from the

whereas

company,

in the form of bearer cer¬

which must

tificates, with coupons

a
a

of trade

and of ideas.

This community would include
and united Germany, with

condition and re¬

operations of their com¬

sults of

panies. They also expect

good
formula

no

free

and

community

the

vision of Europe.
A

Program of

Arms Reduction

full vot¬

of the burden

a

of armaments

now

better

a

the

function

and the

together to create

public understanding of
of

free

(1)

the investor

of tomorrow offered the same

of

State

arteries

before

the

could

properly

include:

The limitation, by absolute

numbers

by an agreed inter¬
national ratio, of the sizes of the
or

in¬ military and security forces of all

ternational investment fare which

enjoyed

the most solemn agreements.

enterprise

private investor.

I would like to see

he

seize

to

Doctrine

all na¬
Control strangulated the tions to set an agreed limit upon
of trade, commerce and that proportion of total production
(2)

A

commitment

by

fail, and the
against it ¬

be divide t

at least need

would

with

the

the

present

world

the

task—and

greatest

of

who
The

The fruit of success in all these

tasks

greatest opportunity—or all. It is

has

human¬

condemned

of

purpose

United

the

States, in stating these proposals,
is simple.
These
proposals spring—with¬
out ulterior purpose of political

this: The dedication of the ener¬
passion—from our calm convic¬
gies, the resources and the imagi¬ tion that the
hunger for just peace
nations of all peaceful nations to
is in the hearts of all peoples—
a
new
kind of war.
This would
those of Russia and of China no
be a declared, total war, not upon
less than of our own country.

human enemy, but upon the

any

The

decent trust and cooperative
nations, can be forti¬

upon

effort among

fied—not

by

of

weapons

war—

by wheat and by cotton; by

but

by meat and by
rice.

milk and by wool;

and

timber
These

by

are

that translate

words

They conform to our firm faith
God created men to enjoy,

that

founded

seek,

we

peace

language on earth.
These are needs that challenge

fruits of the ear h

not destroy, the

and of their

toil.

own

They aspire to this: The lif i
from

arms

and of fears

find before

from

and

backs

the

hearts of men, of

tv,-

their 'burden o>':'
so

them

that they n

.

~

golden age oi

a

freedom and of peace.

into every

this world in arms.
This idea of
not

is

world

Marie Moore Joins

just and peaceful
new
or
strange to
a

Broderick-Colenteti

inspired the people of the
United
States
to
initiate
the
It

us.

European

Recovery

Program in
prepared

That program was

1947.

with like and equal con¬

to treat,

and

Eastern

the needs of
Europe.

cern,

Western
We

are

prepared

readiness

be

in

reaffirm,

to

concrete evidence,

help

to

which

all

build

a

peoples can

productive and prosperous.

is ready to ask
join with all nations
in
devoting a
substantial per¬
centage of the savings achieved
by disarming to a fund for world
This government

its people to

aid

reconstruction. The

and

pur¬

of this great work would
help other peoples to de¬
velop the undeveloped areas of
the world, to stimulate profitable
and fair world trade, to assist all
poses
be:

To

Marie

The

monuments

to

this

J.

Marie J. Moore,

Moore-

formerly man¬

of operations, news depart¬
ment
of Doremus &
Company,
has become associated with John
P. Broderick and Robert S. Co1. -

ager

man,

public relations and
consultants, at 52
New York City.

adver¬
BroaJ-

new

kind of war would be these: roads
and

Joins Brown,

schools, hospitals and homes,

food and health.
We
cate

are
our

(Special

strength to serving the

world.
I know of

make

nothing I

can

add to

plainer the sincere purpose

Madeira

to The Financial

Chrowiche)

FAYETTEVILLE, N. C. —John

ready, in short, to dedi¬

needs, rather than the fears, of the

nations;

but

armed

longer in its clear knowledge

way,

into

These

strive

remains

investors ex¬ weighing upon the world. To this peoples to know the blessings of
tising
matter of course. We
end, we would welcome and enter productive freedom.

must also work

strive

to

kind to this fate.

oped and which our
as

we

world

self, it

To End Human Misery;

world

elections.

/This

work justly

Armament Funds Can Be Applied

government based upon free and

As progress in all these areas
ing rights; Many foreign concerns
strengthens world trust, we could
still have far to go to meet the
proceed
concurrently with
the
standard wihch our North Ameri¬
next
great work—the reduction
can stock exchanges have devel¬

pect

If

failed

no

our

secret

without

faith
can

effectively.

and

with the most

full
independence
of the East
for dividends or
other
benefits. North American European nations could mean the
end of the present unnatural di¬
stockholderst^xpect full disclosure
of the financial

which

free

deposited

be

by

prompt compensation in the event
of expropriation.

poor

we say:

•

is

press

Again

faith—the

brute force of poverty and need.

The United States
to speed a return to normalcy in is ready to assume its just part.
international finance.
Stock ex¬
We have already done all with¬
import quotas, limitation on re¬
changes and financial communi¬ in our
mittance
of
power to speed conclusion
profits,
control of
ties can do a great deal themselves
of a
treaty with Austria which
capital movements, multiple ex¬
to facilitate two-way international
will free that country from eco¬
change rates, fear of nationaliza¬
investment
by developing more nomic exploitation and from oc¬
tion or expropriation, special
uniform methods, terminology and
cupation by foreign troops.
taxation
of
foreign enterprises,
technical procedures for securities
We are ready not only to press
.undeveloped*- banking
facilities,
transactions to bridge the gaps of
inability to deal with responsible
forward with the present plans for
language and custom that exist closer
government officials, require d
unity of the nations of
our
countries and the
local- participation, discriminatory between
Western
Europe but also, upon
rest of the world. For example,
enforcement of tax laws, and re¬
that foundation, to strive to foster
Investors in the United States and
a
broader European community,
quirements for the reinvestment
Canada are& accustomed to stock
of earnings.
conducive to the free movement

►

we

the prompt initiation of political dis¬ properly claim to possess a per¬ this
chance, the judgment of fu¬
double cussions leading to the holding of fect, immutable formula. But the ture
ages would be harsh and just.
free elections in a united Korea. formula
matters
less
than
the

toward

start

N., Hauser has become
with

Brpwn,

New York
ly

with

Madeira

City. He was

Cniirt.s Sr.

Co.

associated
&

Co. of

previous¬

40

(1768)

The Commercial and Financial Chronicle.

*

Continued

from

page

12

balance remaining
succeeding years until

carry any

into

loss is

ment

worker will amount to

per

Assuming

.

3%

A

ample, should not, and I believe,

ten

will not be raised from the grave

-<$80,000.
per

an

year

of

able

Where

.

will

this

capital

come

initiative, and extremely dif¬
to administer on an equit¬
basis. Chairman Reed of the

House

Ways and Means Committee

brief story writ¬

Henry

mounting

in

Hazlitt

"A

it points

present

Let

load

tax

well.

who

is

presents

I met a friend
large. stockholder in

a

General

Motors

he

and

told

The

at

of

of

once

element

no

of

doubled

from

1945

more

to

1952,
and today is much greater instead

me

less

much

of

because almost

worse,

the

danger.

simple fact that it has

than

story. A few weeks before, his

a

pyramid

be*

one

no

lieves it to be bad.

dispose

us

specious and fallacious arguments
which purport to prove that to¬
day's mountain of private debt

the impact

up

onerous

inverted
debt.

consumer

magazine under the
Tale About Taxes."

/'The other day

ficult

required, i

the

very

3

page

The Road Ahead

:

in Point

a

Mr.

believe

I

product, and capital formation of just and discriminatory tax—one
of gross national product, it that has clearly proved itself to
is estimated that in the year 1960 be a deterrent to business
growth
and

by

heading

15%

approximately $60 billion in gross
private capital formation will be

Case

read

me

"Newsweek"

annual increase of that fondly awaits it on June 30.
in gross national This is a prize example of an un¬

from

the

completely offset.

What Can We Do Abont Taxes?
Let

Continued

over

..Thursday, April 23,1953:

than

the

Bankers

simple

had
used
somewhat
Retained earnings, includ¬ has characterized this tax as a son
excess
of Federal, state and local debt
ing depreciation, Will presumably "great
obstacle
to
a
balanced strength on the mixing valve in should be a cause for concern, all
supply a major portion of it,- as budget" and has said also that his bathroom and broke the handle by itself.
it has in the past. However, re¬ "the
off. The local plumber couldn't
But corporate wealth and cor¬
upsurge in tax dollars re¬
tention of such earnings for plow¬
sulting from the removal of the repair it, so he ordered ahd in¬ porate earnings, even though they
ing back into the business is Excess Profits Tax will more than stalled a new valve. The valve are
shrinking, may justify the
turned out to cost $22.59. The in¬
becoming increasingly more d iffir offset
any paper losses which can
$165 billion of corporate debt.
/'cult because of the heavy tax bur¬
stallation/at $4 an hour, brought The value of ■ our homes
be ascribed to its repeal."
and
den which removes a major por¬
So far as the capital gains tax, the total up to $100.
farms and the earnings of our
tion of gross income, and because
"That sounded
double taxation of dividends and
steep" enough. citizens may warrant the total
stockholders' rightful insistence
the capital loss offset proposals But it was not until my friend had of farm and non-farm debt, which
that dividends be paid.
made
some
are concerned, bills have already
mental
calculations has grown from $53 billion to $131
Taxeshave also restricted equity' been;
he
realized
how
introduced in the Congress that
steep it billion in seven years. Both the
investment by the high and mid¬
by
Congressman . Richard >- M. really was. His income falls into corporate and non-corporate debt
dle
income
groups,' who' have Simpson
of
Pennsylvania- and the 90% tax bracket. So he figured totals1 involve long-term debt, for
found, for the most part, that thie Congressman / Hale
Boggs / of that in order to acquire the $100 the most part, amortized or other¬
earnings they might otherwise in¬
Louisiana/ both of whom ' are with which to pay this plumber's, wise reducible ; over periods of
vest in-equities are taken by the.
members of the House Ways and bilk he had to receive $1,000 in from 20 to 40 years.
government, and that investment Means Committee.,
dividends from General Motors./
But it is no more true that per
<\ < « V -v.
in dividend paying common stocks
Mr. Simpson's bill, H. R. 3099,
(For the benefit of the ;non-. capita wealth.justifies per capita
vis increasingly less attractive since would reduce
the capital gains mathemathical, $1,000 in dividends short-term debt than it was ever
a major portion of the dividends
minus
$900 in
taxes
on
them true that. "The size of the national
period from six to three monthsfrom?

fact

,

be

told

which

but

pression
enced

have

we

has

been

accompanied

We have
face

our

or

of

d

;

of

e

b

t

economy.

in the

us

is

short-terml

it

It

now.

debt

experi¬

collapse

staring

one

right

consumer

the

pyramid

somewhere in

de¬

or

ever

precipitated

by

inverted

an

one

history

our

discloses. Every recession

total

sum

need

is

and

danger-f

ous. Its growth to date
has beeri
fostered by bankers. It can be ar«*

rested

by bankers. If it is not

so-

arrested its

collapse, like the col-f
lapse of all the others, could hurt
the

bankers

well

as

There
the

the bort

as

;

rowers.

two

are

bankers

j

ways
be

can

in which

hurt

by this

,.

collapse. If the borrowers

also

are

...

be

withdrawn and although-this
will find its way back into
banking system, the chances

money

the
are

better than

do

'

so/by

.

is

traceable

•

would

allow

individuals

-

to

ex¬

clude from gross income not more
'especially,have found investments
than $200 of dividends received
in low yield tax-exempt securi¬
^from domestic corporations, and
ties far safer and more profitable
would / increase
the
allowable
after taxes than high yield corcapital loss offset from $1,000 to

leaves

$100

to

pay

is

debt

plumber's

a

bm.), ;

unimportant

because

it to ourselves."

owe

that

even

it will

entirely/ different

an-

route,/The principal element of
danger, for > the banker/, however/,

,

paid is taxed out of their hands.
"Those in the high tax brackets,

their sayings are bound to

savers,

Over

10%

we' trade

is

to

••
something else/
today's volume of

of

due

to

credit /extension,

and yet trade volume
promises tobe less instead of more than to¬

.

"But this is

When the government bond'
only the beginning.
$1,000 in divi¬ market broke wide open it was day rs production. Here are a few)
dends, General Motors last year discovered that the debt was owed statistics obtained from reliable:porate equities. - ' •
had; to earn $4,149 before taxes, by all of us but was owned by each sources and as a result of exten¬
\
:
$2,000 a year, with a five-year But in order to earn $4,149 be¬ of us. That was an important les-t sive surveys:
In the years 1946 through 1949,
}
carry-over of unused losses. Mr. fore taxes, General Motors had to son in the fallacy" usually to be
This year's automobile
for example,
non-financial cor¬
output,
Boggs bill, H.R. 3686, would go sell $21,570 worth of cars—say found in any glittering generality. at
present rates, will be 6.6 mil-porations obtained, on the aver¬
further—it would cut the capital 18
A most prominent retail mer¬ lion
Chevrolets—to its dealers. To
cars
and trucks.
age, 64% of their capital from re¬
The esti¬
gains tax rate in half, by includ¬ sum up, because of cost and tax chant is quoted by the New York
tained earnings, only
mated demand is for 5.8 million..
6% from
ing only 25% of long-term gains; erosion, in order for my stock¬ "Times" as stating that consumer
:aaew
Television sets are coming out at
equity financing and 30%
would allow individuals and fidu¬
holding friend to replace a bath¬ credit is not too high and that the rate of 8.4 million. Sales
from debt. But mark the trendare
In

order

to

pay

.

^

in

1951, such, capital

*

-43%

ciaries

a

tax credit

equal to 10%

derived, of dividends
received, and would
earnings, 6% increase the
capital loss offset
financing, and from
$1,000 to $5,000. /
'
was

from retained

from

equity

new

51% from debt.2

New equity capital from the is¬
of stock has amounted to less
than $2 billion annually since the

sue

vSecond World War—on the

Jhand, corporate debt has
in the

other
grown

period from $85 bil$156 billion.
,
*

same,

Jion to

Both of these bills are praise¬
worthy as far as they go. But my
objection to them is that they do
not go far enough.
;
/

So far

dends
that

is

it

as

the double tax

on

divi¬

•.indebtedness,

Caused

in

•

large

by the shortage of ade¬
quate venture capital, presents a

measure

danger not only to the

corpora-

lions thus forced to saddle them¬
selves with such loans, but to the

entire

national

economy

as

well.

While the danger is not imme¬

valve, "GM"

sell

On

18

this

concerned,

should

be

my

alto¬

gether and that a percentage or
partial dollar credit toward divi¬

adequate to

rectify existing inequities. Under
present tax laws

a

make

to

note,

I

shall

sign off.

shareholder is

as a

source

of fresh fi¬

nancing is both abnormal and

un¬

healthy.
Making Equity Investment
Attractive

To

make

Iboth

feasible

equity
and

investment

attractive

sev¬

Reduction

individual

taxes;

<2) Abolition of the
its tax;

excess

prof¬

is

spread

this

gentleman,

Blyth & Co., Ghicago
to The

Financial

Chronicle)

of

CHICAGO, 111.—Morris Mather,
Jr. has rejoined Blyth & Co., Inc.,
South

135

Mather

La

has

Salle

recently

President

of

Street.

Mr.

Vice-

been

Knickerbocker

Shares, Inc. and Prior thereto

was

partner in Morris Mather &

billion

of

installment

installment

debt.

I

again,

when

a

portion of that income is distrib¬
uted

him

to

as

a

dividend.

No

double

tax

is

one

of

the

prime

associated " with

come

Davies

&

unfortunately

investment

own

field,

as

which

Kenealey

in

Mr.
were

Bakers-

Atkinson

also

asso¬

ciated.

me

families

are

well reduction in the

capital
gains
period
from
six
(3) Reduction of the capital months to three months or less,
gains period and the amount of and in addition reduction of the

(Special to The Financial

BEVERLY
Glen

Brewer

HILLS, Calif.
has

become

—

R.

occur

interests

the

before December

31 this year, I believe

securities

business

and

cor¬

porate enterprises generally.

that, in the

So

of

our
far as the credit for
economy gener¬
capital
siteps should be taken losses is concerned, in my mind,
to relieye corporations and stock¬ there is no real
justification at
holders from the inequitable tax the present time for
continuing a
burden they have been
limitation on the amount ot such
bearing,

ally,

some

losses thatmay be credited to in¬

The Excess Profits Tax, for ex\

v

v

1 NYSE

study

of

selected

Federal Tax Policy. • 2 If.»S. .Dept.' of
Commerce,

-

aspects

of

-

purrent Business—Feb. 1952.




•

Survey of

come. If a man suffers
a capital
loss in any
year, he should be permitted to offset the entire
amount
of the loss
against income" and to

BEVERLY

HILLS,

Calif.

debt

are

the

ers,

Reed,

Inc., 8943 Wilshire Boulevard.

.

Joins S. B. Franklin
(Special
LOS

to» The Financial

Chronicle)

ANGELES,/Calif.—Morris

meet

a

million.

not

wealth

lot of Joes. William

a

stated

President

would

at

have

are

the bank¬
.

sometimes

so

pre¬

only-

proverbial

wise."

it

"Word

;

ther

to

<

.

require to throw this coun¬

into

try

all

the

as

AFL,

that

to

see the
forest for the trees. Sometimes it
is
the
other
way
'round, But
bankers are not ignorant. T And
this discussion is intended

Green,

of the

time

one

what

occupied that they cannot

capita
not at all conclusive, for

formerly

extension,

themselves.

Bankers

simple reason that Jim will
pay
Joe's debts—and there

are

credit

I leave that answer

tailspin

a

would

million

two

Are those of

who

us

men

be

With Rex Merrick

to

hungry.

(Special to The Financial

concerned

are

SAN

about today's situation

prehensive when

we

unduly ap¬
cite the pos¬

MATEO,

Landrum

is

Chronicle)

Calif. —R.

now

with

Rex:

Rex Mer¬

rick, 22 Second Avenue.

sibility that less than 10% of the
who

today

apiece

of

owe

nearly

consumer

Two With Inv. Service

debt

(Special to The Financial

the

considerably

owe

more

DENVER, Colo.

than

it

is

any

valid

ment

was

Chronicle)

Raymond J„

Corporation,
Mr. Sullivan

previously with Renyx,

444:
was

Field &

Co.

Barham & Co. Adds
(Special

to

CORAL
R.

Seward

and

Of course,
pulmonary conges¬

no

Service

Sherman Street.

time he had gallstones.

there

—

Carroll and Kenneth H. Sullivan
have joined the staff of Invest¬

$1,000 average?

Nor

threatened, with pneumonia. That
—

Frank M. Millburn has been added
to the staff of Waddell &

to

we

will be the overproduction
picture
when, if and as credit is curtailed?

argument
ciated with Taylor & Company,
to cite the favorable experience
rate of the tax itself well below
the tax on capital gains;
364 North Camden Drive. He was
of installment debt in the big de¬
(4) Abolition of the double tax the present 26% figure. Adoption formerly with Dean Witter & Co.
pression
of
1929 to 1933.
The
of such a proposal would be bene¬
on dividends;
and prior thereto was a
partner Critical debt pyramid of that pe¬
(5) Increase of the capital loss ficial not only to the
Treasury, by in Danford, Brewer & Co.
riod was based on security specu¬
offset.
reason of the
resulting increased
lation and was never larger than
volume of long-term
While it is
transactions,
extremely doubtful
With Waddell & Reed
$8.5 billion in brokers' loans. This
that any alleviation of individual but beneficial as well to investors,
time the patient is ill, or at least
(Special to The Financial Chronicle)
taxes will

thenot

are

washing machines

produced

excessive

aver¬

age

they

asso¬

million

being

If

might get into difficulty because

Chronicle)

Sales

probable demand for 3.5

in debt today as were

in debt in 1935 and that the

$1,000

With Taylor & Co.

Radios
at

are facing
overproduction
they are not reassuring. Restated, of about 12% in automobiles and
they disclose that twice as many household
appliances, in spite of

families

perpetuated

double tax.
I favor

with

and Mr.

firm

4

are

installment debt per family
Co.
today is $635 and not $115. That
isn't good. It is bad.

impediments to equity investment. Co., 425 Montgomery Street, mem¬
bers of the New York and San
Probably
no
greater
stimulus
Stock Exchanges. Mr.
could be given to our free enter¬ Francisco
prise system, and no greater in¬ Ebert was formerly head of his
ducement given to corporations to
slow their rapid accumulation of

And

not

question these figures but to

million.

likely to exceed 12 million. Elec¬

debt.

would

6.5

manufactured

tric refrigerator production is at.
the rate of 4.2 million
against proT
jected sales of only 4 million,.

Today 26 million families owe the
largest share of the $16.5 billion

$1.5

at

being

rate of 13.4 million.

million

13

James Ebert, Others With
Discussions of per capita
Davies & Co. Staff by comparison with per

but,

estimated
are

families in 1935 owed most of the

his

shares,

is

out

families than was the
before the war. According

a

and

of

conclusion

this

it

taxed not only on the income of
the corporation in which he holds

dangerous debt obligations, than
eral steps may be taken
by the
the abolition of this ill conceived
Congress in the future:
(1)

that

among more
to

diate, because of the existence,of
(Special to The Financial Chronicle)
*•
/other form of individual income,
inHation, it is nonetheless a real
SAN
whether it be rents, royalties, or
FRANCISCO,
Calif. —
threatening cloud overhang¬
interest, is subject to such a duM James Ebert, Richard O. Atkinson
ing us. Such''excessive reliance
and Charles E. Kenealey have be¬
assessment.
To
my
mind
this
debt

fact

for

reason

Morris Mather Jr. With

and

•upon

one

th£

belief is

abolished

dends received is not

had

Chevrolets."

case

(Special

,

This great increase in corporate

room

and

The

Financial

Chronicle)

GABLES, Fla.—Kelton
is

now

with

Company, 2207 Ponce

Barham
de Leon

Boulevard.

tion before. There is now—and it

is serious.
We

.

With Cruttenden & Co.

'

of
this difficulty but not unless and
until it is recognized as an ele¬
can

pull

ourselves

(Special to The Financial
Chronicle)

out

*

-

'

CHICAGO,
Buxton

has

III.

—

become

Wilford

L.

connected

lies the with Crutenden & Co., 209 South
joined the staff greatest cause for concern
It is La Salle Street, members of the
of Samuel B. Franklin & Com¬ hot
so
recognized, * at present. New York and Midwest Stock Ex¬
TT.n reform
it
ift Jikelv
to
rtrOW
pany, 215 West Seventh Street.
changes. r,
%
M. Blumenthal has

ment

of

danger.

There

Number 5214.;. The Commercial and Financial Chronicle

Volume 177

Continued

from

printing

or
bonds.
impressive,
array
of requirements and -ap¬
parent safeguards in this opera¬
tion does not change the act. And

14

page

That

Powerful Forces Leading

Us

set'up

around

—are

Compare

billion

$1

this

with

a

week.

ing

military

our

prices.
And so
organized la¬

tnan

budget for the whole year of 1939.

bor

has

the

deterioration

The

result

*

since 1939 American

That year it amounted to

$1,070,-

000,000.
;

The increase is

50 times—

over

better

off, despite

in

the

the

is that

Air

in

business

the

biggest
It spends

world.

buying materials

more money

ster

the

is

Force

dollar.

organized

worker is somewhat like

5,000%.
Our

been

young¬

a

stuffing himself on cake.
had

never

it

He

good at the mo¬

so

ment, but trouble is ahead.

an¬

spiral turns

ends in disaster for workers.
it

will

automatically increase in dollar
value as the purchasing power of
the

savings

take

dilution

of

and

•«.

;•

a

this,'
my

com¬

.

investment

I Like Besl

busi¬

.

In this

But

a

driving

us

-

•

*

.

situation, it is

patriotic
how this factor operates.
duty to preserve your economic in 1949 as a merger of a Delaware
Suppose you have a church sup¬ strength. Only citizens who are company of the same name and
per. Food is ready *f or 100 people. economically
The
independent
can* Maxson Food Systems, Inc.
Tickets are sold to 100 people. But take part in the fight to save this < Delaware company was incorpo¬
somehow 50 additional tickets are Republic. 1 would like to spell rated in 1931. The record of yearly
passed out. The amount 61 food this out at length, but time pre- • sales which I have before me goes
■
per
person
is reduced to two- vents.
back to the year 1936 When net
a

.

Let

thirds, automatically, isn't it? And
the food value of the tickets sold

printing

press money

and bonds.

With the gold Standard, the citi¬
zen could obtain gold and prevent

another force

>,

y

into

like to—or

become

the

simple illustration of

a

waste.

competitors to reveal

are no

inefficiency

would

mercial for

his

incompetence,
and no automatic forees operating
to reward economy and penalize

there

would

leave this

me

injunction—you

an

sales

best

decrease from net

protect

towards

down

Political Integrity

of

and

not

may

syrup

that

Done

I have outlined six
of

inflation.

many

income for the

Prevent

to

cures

On ; the
are

four

for the latest
tabulated below:

figures

years

are

.

Net Income

Net Sales

major forces
other

offered.

$1,948,415
1,508,493
1,248,886
1,245,031
798,168
626,268
966,575
529,881
279,694
463,387

1952___$87,044,618

side,

For

10 years

inclusive, with con¬

1952

to

solidated
Be

in 1938,

1937 to $2,397,000

net

and

1943

Galloping, Ruinous Inflation?

a

sales of $2,516,-

they have increased in every year
since to and including 1952. Sales

from Washington.

What Can
>

soothing

on

come

in

000

aftei;

$2,153,000,

totaled

subject with

for cash is likewise

and brilliant

honest

statesmen, or

the Air Force

in

And

over.

further

go

,

down.

goes

I

as

remarks

period of disaster
and suffering, to sell that truth
governmental dilution of his dol¬
to them.
lar savings. Today he cannot. Meanwhile
the
political
and
economic power of labor bosses is Inflation Force No. 6—The Break¬

that

dollar

I.won't
much

2

Continued from page

reduced, isn't yourselves, your customers and
this
wage-price it? There in a very elementary your
country by vigilant action
into a rat-race that way is the story of government based on the realities Of inflation

Ultimately

nually than General Motors, U. S.

Steel, Standard Oil of New Jersey,
Dupont, and American Telephone
and Telegraph combined.
Think

dollar

savings.

union worker wages ris¬

faster

an

ness.

this

prevent

can

Here is

far kept

money

press

tney

individual with

no

Toward Ruinous Inflation

4®

(1769)

1951—

58,538,075

20

,1950
48,160,059
I have explored anti-infla¬
1949
42,011,579
proposals, seeking to find the
potent of
Inflation Force No. 4—The
1948— 33,040,151
together. .7,.- 7,7/
;
i *■
all—yet it is in some respects a effective remedy.
Delusion of Governmental
*
1947— 29,067,447
About six years ago, after al¬
«.
Then there is our ground Army,
result rather than a cause.
{ Handouts; r;
■; ;
; 1946— 26,383,646
competing with the other two for
Is there in government today ways discovering vital defects in
1945
12,829,296
The American people have had
a
bigger piece of the taxpayers'
the courage, ability and will to other remedies, I found'the one
for 20 years an effective demon¬
1944—>10,421,678
hide.
•,
answer to inflation that seems to
-*•
stop inflation and the destruction
1943—. 8,734,235
On top of all these is the atomic stration of what government can of the
historical • validity, In, my
dollar? This is the all-im¬ have
do for special groups by political
V The per - share earnings, 0*
energy agency, phis a couple of
portant question on which our knowledge it is the only way in¬
interference.{This has created the
flation has even been permanently course, have not kept pace witbi
others, that also spend $50 million
national future depends.
delusion that government can pre¬
a week orso..r :7c■!.,:11; •: <'
halted. It is the restoration of the increase in net income, aa
Z
;
For 20 years the high road to
vent depression, end unemploy¬
^Militaryspending has become
in ? gold. there wete" 999,598 shares out¬
political success has been to create currency; / redeemable
virtually the sole routed to profits ment, and nullify the penalties inflation.'
-5.v"" History supports that conclusion. standing Dec. 31, 1952, compared
that follows the violation of nat¬
for many businesses.
It has be¬
Possibly today there is some with 317,579 shares at the end of
Now I don't mean that those in
ural economic laws.
V
{
cure.
come
the magic prosperity for¬
Possibly
inflation 1943. Most of this increase was for
office desire inflation. Mostly they other
For 12 years we have been go¬
be -ended
mula for reelection for many poli¬
by some new the purpose of acquisition, though
do not. But they do want to be could
ing into debt, either public or pri¬
ticians,
•
re-elected. A genuine fight against method of currency redemption, in some 200,000 shares were the re¬
vate, at the rate of $100 million
Can it be stopped?
inflation may be political suicide a fixed quantity of some other sult of a 50% stock dividend m
a
day for every working day in
article or articles of permanent
Not so long as we try to be
and they know it.
1950.
the year. This inflation has been
intrinsic value.
world cop. Not so long as we try
So what happens?
Profits
before
taxes
for the
promoted by government, using
In mentioning the possibility of
to? settle
every
quarrel every¬
Vocally they all oppose infla¬
year 1952 amounted to $4,434,305
printing
press
financial proce¬
some other standard besides gold,
where. • •
-tion. But in too many cases it is
vs. $2,969,093 in 1951. The gain i»
dures. Because this operation has
I do not visualize any such system.
Unusual proof of the military
net income was achieved despite
just simply campaign oratory. In¬
been handled carefully to prevent
It helps make my case clear: (1)
dominance of America was seen
flation
has
created
a
sense
of
a 70% rise in Federal Income and
public understanding and alarm,
that the redeemability of paper
recently in the response to Rusprosperity, which helps them get
excess
profits tax—provision for
great numbers of people still do
sion peace overtures.
re-elected. Perhaps the most in¬ money into a fixed quantity of which rose to $2,485,890 in 1952*
The stock
not visualize our peril. They ac¬
an article of intrinsic and durable
market had the worst jolt in two
teresting
continuous
tussle
in
from $1,460,600 in 1951.
cept the politician's claim that
value is vital (2) that most of us
years.
The
Washington
brass
Washington is the effort of both
Per share earnings, after pay¬
government
schemes
promising
who favor the gold standard have
started screaming "foul"!
parties to avoid being hooked with
ment
of
preferred
dividends^
them something for nothing, will
no
especial love for the gold
How will we cut this spending
the blame for any down-turn in
amounted to $2.02 for 1952, based
work.
standard simply because it is the
down—when such efforts will be
the inflationary boom. Yes, the
on the average number of shares*
And so we have full employ¬
smeared as unpatriotic—economy
$100 million a day borrowing that gold standard. Instead it is be¬ Outstanding during the year. Paid
cause
we
want inflation stopped,
ment laws, statutes that promise I
advocates called penny-pinchers,
spoke about earlier enabled one
E.
Reinhold, President at thei
and
don't
believe anything else
willing to sacrifice the safety of financial security without saving, party to stay in power for 20
time,
but
now
Chairman, ex¬
the nation for a few small savings. well-being without industry, and years. Politicians respect that suc¬ will do it.
pressed the opinion that it seemed
Powerful
If there were devised a better
Utopia to our people, all without cess record.
propaganda
will
be
appropriate to use the average*
rolled out by both the military regard to the
natural economic
number of shares outstanding "be¬
In detailing these six major in¬ way, we would be for lit.
brass and the pocketbook patri¬ and moral laws.
The 1952 Republican platform cause
major
acquisitions
made*
flationary forces, I have skipped
ots in industry, whose profits de¬
It would take too long to detail
the* effectiveness of primarily through the exchange*
others, for lack of time. It would recognized
the
fallacies
and
downright be easy to list probably a dozen gold when it set out the aim of a of stock were consummated si*
pend on military orders. Under
these conditions the conscientious crookedness that permeates this
legislative economic narcotics "dollar on a fully convertible gold late in the year that the shares*
officeholder .who fights
for re¬ propaganda and deceit. But it can
involved
received
only limited
fueling the inflation boom, and basis."
straint and economy is not in a be summed up in a few words.
benefit from the earnings Of the*
which .are today politically un¬
By putting this pledge into their
pleasant spot. *, • /, ;
-* •/• ••
Any proposal that promises the touchable. But my time is too platform,
the * Republican party newly acquired companies." Ad¬
citizen
unearned
rewards, is a short to do them justice.
confirmed the importance of the ditional properties acquired since*
Inflation Force No. 3—The
the first
of the year have in¬
swindle. Such rewards can be paid
goal. But all signs indicate that
Strength of Labor Bosses
If Inflation Continues, What Can
creased the outstanding shares to
no
only if the government legally
party will restore gold re¬
Our

of

of the

rest

than

is larger

Navy

the

world

a

that

all

put

worthless dollar.

This

tion

'

for

cause

galloping infla¬

be the

may

years

tion

most

,

-

,

,

,

...

-

,

>

.,

.

.

,

,

.

>

.

'

'

'

.

.

~

~

A

few

weeks

ago

you

saw

a

decline in cattle prices amounting
to 30% or 40%. Even the cattle¬

-

Now

assuming other' primary over a
period of years but only if
producers also get lower prices,
it is concealed. Other nations have
dd we have any assurance that la¬
done
so
frequently by skillful
will,

costs

come

down

com-

mensurately,'so that the price ad¬
justment will be spread evenly

debauchery of their currency.
Here is

a

surer

road to commu¬

nism than any

other—and we are
on
it. • But
this deadly danger
Aside from minute changes in
moves
slowly and quietly, and
a
few
labor:*" escalator contracts
sounds no alarm to the people,
like the ClO-GM .agreement, the
like
atom
bomb
explosions
in
signs seem to be in the opposite
Nevada, which have tidal waves of
throughout

direction.

ber

this

our

economy? 7

Here

fact

we

—

must

labor

«•

*

remem¬

bosses

still

riding high. "; These bosses
generally will resist downward
adjustments in wage rates, no

matter

how

desirable

publicity.

v

T

are

Inflation Force No. 5—The End
Of
When

the
the

Gold
U.

Standard

S.

Government

such

repudiated the gold standard in
changes might be for the workers 1933, it abandoned the only effec¬
in the long run.
tive braking mechanism thus far
Let's
consider
a • little-under¬
devised to prevent monetary in¬
stood

truth.

For

labor

union

flation.

bosses, inflation is quite satisfac¬
The right of the citizen to ex¬
tory.
It gives them a constant change paper currency for gold
grievance with which to solidify had historically enabled Ameri¬
their power.
cans to control their government's
Yes, inflation has supplied these financial policies. Today the poli¬
bosses with a perfect excuse for ticians can in effect, write checks

Do

to

w

Protect

Yourself

Your Customers?

And

to pay

the person who gets some¬
thing for nothing. The practical
men themselves said that this ad¬
meaning of this is that govern¬
justment was sound, and had to
ment handouts, like embezzling in
come.
Their wisdom and courage
business, can bring temporary re¬
should excite our admiration
wards. Such thievery can continue

bor

You

-

steals the fruits of another's labor

First, let

me

record

money,

unless the

ple force them to do

peo¬

there is

that

ho

their value double or more.

No two inflations are
But

generally

who

have

countries

come

—

and

those

just alike.

individuals

out best

in

in other

America

thus

those who owned land,
other tangibles, and selected com¬
far,

...

are

Rejoins H. M. Byllesby

first

the

Turnbow

D.

Mr. Reinhold

the

CHICAGO, 111.—Ralph M. Somhas rejoined H. M. Byllesby

and

as

company

told

from one of tho

I have been

record

successful

his

that

even

succeeds*

who

President comes*

acquired enterprises.

business*

Mr.*

exceeds that of

Reinhold.
Cash

dividends have been con¬

The current

servative.

cash dis¬

25 cents

quarterly.

bursements
The

5%

are

cash rate prevailed

same

and was

1952

in*

supplemented by at

stock dividend on Oct. 15

ol!

that year.
The stock

is traded in the un¬

listed market, and as
written

is

(Special to The Financial Chronicle)

mers

He es¬

$1,400,000 before taxes.
G.

to

the voium€>

earnings for the quarter

timated

;

over

1952 period.

in the same

of

$27,500,00(fr
of 1953, aik

quarter

increase of 40%

Chairman

as

sales of

reports

now

for

Reinhold

E.

Paul

my conclu¬
satisfactory

...

seen

1,047,331.

so.

However, if enough Americans
understand the situation, they will
protection against inflation. The force
government to restore re¬
only true Way to beat inflation deemable
currency. Otherwise we
is to halt it. Meanwhile* you and
continue
on
the primrose
path
your customers can act to keep
pointed out by General Douglas
as strong
as possible. This means
MacArthur. Speaking to the Mis¬
that you will turn a deaf ear to
sissippi state legislature a year
political chatter on the subject,
ago, he declared,
/
*
and instead study the realities and
as
we
continuethese
act accordingly. ;
; > ;, "And
wastrel policies without promise
J First you may decide that, prob¬ or hope of regaining normalcy . . .
ably the worst place to have your H becomes
increasingly clear that
"investment savings during infla¬
the
pattern of American fiscal
tion is in dollars and dollar obli¬
policy is being brought into con¬
gations. The investor in dollars sonance with the Karl Marx Com¬
and dollar obligations has lost half
munist theory.
Such policy
his principal during the last 10
is leading us toward a Communist
years. He will continue to lose,
state with as dreadful certainty as
perhaps faster, in the next 10
though the leaders of the Kremlin
years, if inflation
continues. On themselves
were
charting
our
the other hand, the person who
course."
has owned actual property, either
Gentlemen, will we accept the
land, good common stocks,
or
other
productive
property has challenge of Mac Arthur's warning!
sion

making new wage demands regu¬ against every bank balance in the mon stocks. All these items are
larly.
By achieving 1 their
de¬ land, individual or corporate, by wealth, or 'constitute title to such
simple
devise
of
issuing wealth, and to a large degree
mands, the labor bosses have so the




deemable

Foremost

consider
mon as a

quoted

this is being!
20^-22.

Dairies

I!

com¬

suitable investment for a*

Incorporated, 135 businessman,
although
because
Salle Street, members of
of the character of the business, it

Company,

South La

the Midwest Stock Exchange. Mr.
Sommers

has

recently been with

Mitchell, Hutchins & Co.

might be
more

included in somewhat

conservative accounts.

-

42

(1770)

The Commercial arid Financial Chronicle...

Thursday, April 23, 1953

Waddell & Reed Add
(Special

The

to

BEVERLY
M.

Deveney

Reed, Inc.,

Financial

Chronicle)

HILLS, Calif,—Hazel
is

8943

with

Waddell

Wilshire

&

Boule-

¥3Td,

NATIONAL

STOCK SERIES
ilUTUAl INVESTMENT FUND

Prospectus from your

dealer

or

NATIONAL SECURITIES &
RESEARCH CORPORATION
established 1930
120 Broadway

•

New York 5, N. Y.

FOUNDED

1928

Prospectus from
your
or

investment dealer

PHILADELPHIA

37/ie

3, PA.

3eerye

PUTNAM
FUND

of* 3/)c6ton
Putnam Fund Distributors, Inc.
50 State

Street, Boston

Fundamental Investors, Inc.

MUTUAL.

INVESTMENT

1 1
,

%|

|;r Diversified Investment Fund
•

ONE
WAll
STREET

BtlELOCK
NEW YORK

GENTLEMEN: At
me a

no

obligation please send

prospectus on Canadian

Fund.

Address.




income

investment

quarter

the action does not indicate

full

dividends

in

crease

the $1.10 per

over

in

According

the

to

report,

8,406

s.hates o£„BroSd,?tlieQe4Investing'

of

The

1,182,536 a year earlier.
of shareholders given
in the report reveals that 82.4%
are
owned
by
individuals,
of
by

women.

-

half

first quarter of 1952'. Earlier this distributed
fust quarter dividend on its comfon s[?ck }? 20 cents P,er. sha,re

hospitals

churches,

colleges,

institutions

other

and

at

2.4%,

the largest..

were

Broad

Investing

Street

with

auarter

the

first

its

assets

invested

Oils-at

stocks.

in

of

common

and chemicals

..

ter dividend was increased to approximate more closely the cor-

^period'anfi'^not 'necTsarilv
.

share

Ampr

Ti'i-Coritinental s

!

15.30%

mtroduced

tinued to represent a major hold-

•.untoxflift.jportfolto.

Am^fn2WM1
Wisconsin

4,100

^

tueky;

Gelanese
duced

and

Chrysler

were

re-

shares each.

by 4,000

DELAWARE-: Fund
with

something
spectuses;
It's a

ha?

of investment assets, con-

lvllCrQ"lHiOtSllir0 VlOCK

up

in
pro"Fact Book."

se^

prece-

a

j*

dent

the

in

industry.

•

'principal increases du
in
were
20,000

&„ Light,

Power

stockhoidjngs

common

Reynolds

30,600

p0nt,

wftlfa^Uelaborate'use0of oilor

14,000

Tobacco,

&'ATM1

and

>

interesting

in

and

)

fashion

Maytag^ 4;ooo

corporation

The- "Fact Book" was described

common.

tucky coal, 8,000

the

He

prospectus.

re-

called that under investment com-

Ken-

west

25,000

ciirysier, 16,000 Phelps
and 2,500 Hercules

nal

.

j

...

,

factures

product

a

.known
based

Guard"

"Weather

ferred briefly to that Utopia

as

our

untouched by war—a brighter

upon

country s disposable ln-

come,

then there will be rea-

its

in

and

at-

now

by manufacturing motor cars,, mobiles, television sets . and

2,000

Gas,

D0Sl0n inV6SIII16lil Ulllll

after

deduction

a

aircraft,

of

jnStead

guided items in

dinner meeting ot tne Boston investment Club will be held at the

^Ar.

,

....

$40 billion

The Bearish Analysts ;
Realism held sway as econon<4
fpr-hrnrinns rip-

nrmctc

annually omists ^nu tecnnicians , ae
for bated The future of business
in Europe and market prices at the sixth

or more

Tuesday, for military purposes and

on

r :

p.m.

-formine

:

our

allies

«0t

Principal speaker;, will be E. it is
difficult to imagine annual convention of the Nalrattoarail'Sjwte «ad what might be accomplished tional Federation of Financial
J ^
^
in
nrncrram nf wnrld hetfpr- Analysts
Societies in Philahead of the Research Department m a program 01 WOria Dexter
^ p c^^f.
of Vilas & Hickey,, New York. ment. As ail example, our delphia^
Sentiment leaned
a

u

u

heavily to the bearish side in'

""Wwft will be "Outlook for automobile plants- produced
Security Pries ter 1953. and ^ m year almost 4.4
i

seaboard

A

c

*

•

million

Kenneth 5. Adams

with

cars

a

reflecting a conviction that ,

industrial production was destined to hit a

factory the tempo 01

of' something less than

iSfi

^

Kenneth S. Adams passed away

slower

nace

F

at the age of 73 on April 20. Mr. r '
Dlliion, in LvDi Sllgnuy
^
^
Adams was a former President of more than 5.3 million vehicles
With the thesis
a
the Hartford* (Connecticut.) Stock were manufactured and sold ness
slump so widely acExchange. He was a founder of f
flunnt $7 q hillinn
About ppnteH
onp
mifyht
wonder
Adams, Merrill & Co, investment

from

brokers,
in 1941.

which

retired

he

billion dollars, or more were verse

A. M. Kidder Opens

of $37,465,r

188, representing U. S. & Foreign'*
investment in its affiliate cover-

,

0

?

fT

tnrnpH

,t

KT

nnt

itself
as : of
March 31, 1953
duce a prospectus that an Ameri- amounted to $96,766,691, equivacan investor can read and* underlent tp'$96.7.67, per share of first
stand, rather than one that would preferred stock outstanding and,
require a Philadelphia lawyer-to after
deducting the value in
interpret:
And we* began.'; right; liquidation, of the first and second
pro-

hv

psychological

American Manv investors

title.

the
a

That's

why

factor.

nrobablv are

turned out by American Many investors pro oaqiy ar

in response to more
nf couinffc nr

and other househo d liberal spendl g OI sa

g

in Orlando, under the management appliances were distributed as a consequence ot otner
of Robert E. Nowell. Mr., Nowell f0 American consumers* The stimulating influences. In any
was formerly with Thomson & f , * vaiup Qf +we country's' event precedent suggests that
McKinnon. | •
f
^
n0rponfaap
thp ex^

-

Fusz-Schmelzle Adds
stocks in the total
(Spocial t0 Th&PinwciA£ 0HRONICM)
;; \ -.
1 amount* of $15,000,000, to $83.01 ? ^ LOUIS, Mo. — Glennon, J.
CLOSED-END NEWS :
per share>
common stock out- Martin is ; now.; with FuszGROSS ASSETS of;i -Trr-Conti- standing. This, compares with net Schmelzle & Co., Boatmen's Bank
nental Corporations totaled TH?,- asset value on March 31, 1953 of Building, members, of the Midwest
with

;called

busi-

rSranch Under IMowell plants last year. A great many prepared to wait out a m£M
ORLANDO, Fla.—A, M. Kidder refrigerators, wash i.n g ma- recession in expectation of a

:

"to

ot

*or a^outbillion. About cepted, one mignu wonaer
5 million television sets with whether the market had not
a wholesale value of half a taken into account this ad-

presentation to the origir- ing the latest period and a similar
function of the deduction of $41,586,325 for the & Co., members New York Stock ci!ines vacuum cleaners elec- recovery
corresponding period'last year:
Exchange, have opened their four- , . . '
have tried,."
the mutual
Net assets of U. S. & Foreign teenth year-round Florida office
irons

fund executive explained,

goods.

consumer

||j%IJ 11! mm am UaaIShm missiles and atomic weapons'

T° MOWDHMr Meeting ;m™
linnCTTmietin^aof 'thi" Boston"!? that ^ uTited° SfotesTpends

gir- tine Railroad 2^000 MinneapolisHpneywe11 and 5'000 Merck*

are

appliances, ' etc., hundreds of other attractive

household

- Inwclmorf Rhlk

i

tnc

"We"

,

of

peaceiui btHueniems> cau

;i

•

design, and

prospectus.
*

return

completeness

simplicity,
.tractive-

Funds

Delaware

literature.

Fact Book' marks a

.

earnings

preciate what might be done through production of useful
bil- goods
moV* °f£Tng an issuf °,f, 2?9>~ lions of dollars (now funneled
If peaceful settlements can

vwwhiihvw vv,r

££"§«.
^taS^o- Se, S hSS

the: prospectus FIRST, quarter reports of United
was to-be a-sales piece that would
States & Foreign Securities Corp.
tell the story of the- offering in and its affiliate United States &
full. "However," Mr. Nelson went International
Securities
Corp.
on, "the introduction of legalistic show a combined net asset value
prose
eventually led to the de- 0f $122,263,043 as; of March 31,
velopment of what is known in 1953 compared with $134,061,262
the industry today as supplemen- on March 31, 1952. These figures
ta!

—

bright side of the picture. It been poured down the drain.
created only

,

legislation

pany

proporUon

tional income

McGrath Securities Corp., New for mankind by devoting

Eieci April 28, at 5

Best

6,500

Dodge,

-

by W. Linton Nelson, President, as
a. return to the function originally
on„ 10,900= umted

assigned

Pacific Gas &

ot

story

Delaware Fund and its operations

completelv

nrnnnrf:nn nf tu nfl
.

An idealist can visualize the our gainfully employed—has

il

McGratll

N?ckei Se^RaiiroId* Boston Yacht Club

a 900

the

\

SSCUHH&S COID. re(lu.lres imagination to ap- Wealth is

During the first quarter. Tri-contdnentai '*■

The "Fact Book," as the name
implies, Shy68 facts about Delatelling

A

underwriting and

distributing subsidiary, Union Sepurities Corp., ranked fourt

.

illustration,

11

L-

comnanv

owned securities

come

new

it. thinks may

$

4?e micro-moisture grid controls.-The world in which sums formerly son. for viewing the future
spent on .national defense more optimistically, for the
to
15.65%
of
assets.
Chemical
The
is marketing cou^ be utilized for impr°ve- nation's workers then would
rePresent*ng a holding of cnly one'product, the'Weather ment of living standards in
able to increase, their
$13,952,550 remained in tnird_ po- Guard for raising hydraulically underdeveloped c o u n t rie s. spending for desirable mer536?000a interest °inf it" 3wholly! widows'and'LdverHMe tops^'hat belaefits <:ould b® gained chandise—better homes, auto-

That's the title the.Fund has given tlSff^^SSS^SS^
which

wasteful armament. Too

fir^- pos!^n

tri^Ne;^
.and

on

pessimistic attitude,

mto ammunition and similar be negotiated in Washington
Controls, Inc. of Miami,, Fla„ at war materials) to useful prod- and in Moscow looking to"as„ a spfuiation-" ucts. In his address before the ward retrenchment in defense
JvstgrfBi&si
»*»«». N»?which i.u
investment facilities and for working capital, paper Editors, last week, pr0mise of reducing burden-

tear

last

naid

a

The Picture's Bright Side

"
,s ot necessariiy 000 shares of common stock (par
a" lndlcatl°n that payments for 0ne cent) of Micro-Moisture

Service and 10,000 du Pont were

building

Anil Yltll
*11111 1 VIA

■

_

WNNP

tsamst* °»
•nnrinp thp nuartpr innnn

adopts

Hiava IIaiaIiipa CIaaI#

port, however, that the first quar-

public

18.75%,

17:86%

utilities at

ended

89 22%

■

naturally tures of labor and materials

realist

the

that

capital gain divi-

as

dends.

0Umf^ness4cJncefrnrCaf29%
and

■

vv

.

.

m

TmA Msr|/A|
1 IlV ITllllAvft

unrealized apprecia-

on

m

mm

mv

,

owned

are

'

no

u

trom the 15 cents paid in the
In other categories, same period last year. Francis F.

than

that

state

rep0rts

>

r

•

allowance has been made for capital

An analysis

more

stock of U.S.'Continued from paqe 5

Administration's income, which is tion as the corporations have
f,
fi^fonVin
rep0Ft' t0~ elected to be taxed as "regulated" narrowing of profit margins mean progress. Undoubtedly
April 8 1953
InvestmenMncome '"vestment companies and under and a recessi0n in retail trade the nation's economy has been
these seem so logical weakened by huge expendi-

owning

which

common

preferred & International.

$6

Net investment income for TriContinental, exclusive of Capital gain tax

share paid

last year.

shareholders owned 1,429,922

shares

405,370
stock..

in-

1953

for

standing and $354,29 per share on 80% of the

and

an

43

(1771)

Number 5214The Commercial and FinancialChronicle

Volume 177

;it's: preferred

'Fact- Book*." -;

output of motor cars, trucks a high percentage ot tne _ex
and desirable appliances must perts seldom guess correctly. have been well below our exr > The manner in which liquipenditures on military prep- dation tended-to lose momenarations. In other words, we turn on the recent decline sugrhw the potential of doubling gested. that holder^ were not
our

output.

But

the

realist likely to become panicky^over,

S to^'thG flFst'hua^iv3™^" $t21*557'497, 0I?
firS<l stock Exchan£e- HiB was previous- intervenes with a harsh q.ues- a Korean truse agreement and
•:to®SLve. etf'k to foe mergirot preferr^d «ock and $93.97 per ly..wlth waddell & Reed, Inc. , tion> "Who would pay ' for that at'least a moderate reCapital Administration Company;
common* stock.
V*
them9"'
covery might take* place be-

Limited.
After

«r

ures

on

the* merger,

stock

common

31, ;;1952

March 31,

The
rages

.tal

but Tri-

asset- value of $25.69 per
Dec.

stock

1952.-

and
■

had

share

$23.98

on

preferred
amount
per

.

cover-

total

in, /the.

of; $35,825,000,

to

was

previously

with

$10.92 Company, Inc.

share of common stock out-

standing.; This compares with net

3L, 1952 of

value

on

March

$68,090,090,

or

$340.45 per share

asset

*

report shows^. asset

stocks

Staytqn

&

.

♦

Two With Waddell & Reed
(special to the financial chhonicle)

1

KANSAS CITY, Mo.— Andrew

Oliver B.; Polk

and

Masur

foritbq enlarged senior capi- of first preferred stock and $12.60

Ml

structure vr/Of --the

have become affiliated with Wad-

company

of $8,^52:

per

expanded

$1,000 prin-

cipal amount-oLdebentures out-




per

share of common, stock.

U; S. &;
the

Foreign

second

owns

preferred

99%. of dell & Reedy Inc., 1012 Baltimore

stock

and Avenue.

•

-

^

^

fare resumption of

s

#

Tim® Unpropitiotis fof
,

t.

emotional

selling'

Discounting World' Peace

outstanding James has become;affiliated with

««»— "f ;«■•*»» of the «r m»»- National Bank Building. He
comparable liquidation
first and second linois —«—»«•

of

Continental's;
an.

preferred

first

'

not strictly

are

because

share of com?-

*,

(special' to the financial chrowcbe)QUENCY,; 111: — Kenneth- M.

liabilities rand
net assets: were equiva- equivalent to_$314.81 per share of ;

to,$24.68 per

*

*

Hess Inv. Co. Adds

U. S. & InternationaFs net assets
at March 3fV 1*953 were $62,961,540, ;

— -

deducting

reserves,

lent

; '

•

;

ci^„rKr

-

ETke views :expressed in

this

J.,', H? sszirz sx&g ana s a
presented as*
q

mav

p nf* ,m:wftrca1
lor aa era.GF unxve
f

w[sh

hrnth-

Chronicle,

They, are

those of the author

only.]

i

-

erhood, but the time ior aisEmerich Go.
COUhtmg such a s a e P
(sp^ai to the financial chronicle)
fairs * ill " the. StpcKi market IS
CHICAGO, I1L—Allan. F. Smith
not yet;. There is encourage- has become associated with Ames^
ment,; however; in thinking Emwrch & Co.,g' ^
that cessation of hostilities in
^ock Exchange; He was
Korea andi other signs of a formeriy with Dempsey & Co. for
lessening in the cold war may many years.

m

(1772)

The Commercial and Financial Chronicle...

Continued

from first

[Editor's Note: How about telling the employee
spend for cigarettes?] All this

page

how much he may

ires field constitute itself

an

the

other

:

increasing interest on the part of many
corporations in thrift savings or stock purchase
plans involving the accumulation of funds of
employees and the employer, for investment in
Securities of the employer, has
prompted the
Commission to give special attention to the
regis¬
tration and prospectus requirements applicable to
such plans."
part of
go

a

the

Witness

Still

r

administrative

agency.

specifically exempts
involving a public:
opinion is an outstanding

some

of the in¬

"simplified" proposal.
to stock
purchase plans under
"which the companies make
periodic contribution
is

purchased mainly in the

simple that they

nine closely-type¬

SEC

the

dubs

detail, but the complexity of the whole will be
readily understood from a summary which will
all-inclusive by any

In

the

the

plan must conform to the following condi¬
as a condition
precedent to its registration
under the SEC requirements:

v

Well,

plan must permit all employees in a desig¬
category to participate. Periodic cash pay¬
ments and payroll deductions
may not exceed a
Specified percentage of the employee's pay.

Administration,

abolition of the Securi¬

decades

one

agencies, especially by the Securi¬
Exchange Commission. Under the cir¬
cumstances it is not too much to hope that the
SEC budget for next year will be measurably
cut by Congress.
ties and

a

of

action

we

Through such action will come some respite
oppressive administrative action.

from

The

taking here" — meaning
such amendment.
under any of our
be handled by administra¬

CHRONICLE would

are

editorial,

'

We wonder whether the
in Mr. Cook's remarks

These

can

have

implications contained

are

Those

.

.

.

,

.

,

,

,

.

,

Mr.

though he

Cook

in effect

said

was

that

the SEC

..

railroad
cost

equip¬
not

less

&

Co.;

First

McCormick

than

of
&

Michigan
Co.;

$15,000,000: two diesel pas¬
Wells & Co., and F. S. Yantis &
senger locomotives; 39 -diesel
f
freight locomotives; seven diesel Co., Inc.
;•
Halsey, Stuart & Co., Inc., and
switching locomotives; 222 box
associates
are
offering today
cars; 263 gondola cars; 19 flat cars
</ipril 23) $10,000,000 of Southern
with end racks, and 42 ballast
S. E. Fleisckmann With
Pacific Co., series II 3V8%
equip¬ cars.
Merrill Lynch Firm
ment trust certificates, maturing
Included in the offering group
annually May 1, 1954 to 1963, in¬
(Special to The Financial Chbonicle)
are:
R. W. Pressprich &
clusive. Subject to authorization
Co.; L.
ST. LOUIS, Mo. — Samuel E.
F. Rothschild &
Co.; Blair, Rollins
1»y the Interstate Commerce Com-,
& Co. Inc.;
Baxter, Williams & Fleischmann has become * asso¬
imission, the certificates are priced
to yield from 2.60% to 3.25%, Co.; Freeman & Co.; Gregory & ciated with Merrill
Lynch, Pierce,
depending on maturity.
Son Inc.; Ira
&
Haupt & Co.; Wm; Fenner
Beane,
511 ".Locust

can

D. E.

Equip.Tr. Ctfs,

-

of

the

SEC

Senate

ber

faccured

certificates

by

the

are

to

following




be

-new

E.

Pollock &

nois

Co.;

Co., Inc.; The Illi¬

McMaster

Hutchinson

Street. He
in

was

formerly

a

Emerson

Company,

to

Reilly

has

120

Broadway,

of

the

former

board

J.

mem¬

M.

Reilly

now

Reilly,

& Willard; new business
director of the American Institute

of

Finance; and

a

member of the

editorial
Hill

New

staffs^ of the McGrawPublishing Company, the

McGraw-Hill Book Company and
"Christian Science Monitor."

York

City, advertising and public the
firm, it is announced,
Mr. Reilly was most recently

relations

promotion
Research
a

and

Brown

joined the New York public rela¬
tions department of Doremus &

former

director

ate, worked

on

tric

the initial Parade

Auto-Lite. He

With

oL Standard

Consultants, Inc., and as
Steve Hannigan associ¬

partner of Stars Automobile Show of Elec¬

Friedman, Brokaw & Co.

of Connecticut (Chair¬

Subcommittee)

Company of Boston,,

Doremus & Go. NY

j

SEC

Commerce Committee that deals with the SEC).

Reilly Joins

David

7, N. Y„

the

(Chairman of the House Interstate and Foreign

.

.

having

and send copies of their letters

.

'

of

count executive and

Corp.;

Mullaney,

be

Congressman Charles A. Wolverton of New Jersey

legislate and replace our Congress by exercising
its rule-making powers.

to

desirous

to Senator Prescott Bush

not have intended it, what

may

Park Place, New York

are

and Congressmen

man

Even

should

shackles removed should also write their Senators

power of the Commission, the setup
of which we believe to be one of the most
per¬
nicious factors in the whole of our administra¬

tive system.

who

Communications

Editor, Commercial and Financial

to

Chronicle, 25

generally understood.

other reference than to the

no

related phases of the subject

or on any

discussion.

addressed

appreciate receiving

views expressed in the above

the

on

'

These

new

paternalism; one that is pledged to
powers which have been exercised by

under

standard-gauge
estimated

and

understanding
which is divorced from two

a

of

comments

ment

Halsey, Stuart Group

have

we

administrative

The

nated

speak,

we

budget for 1954 will be slightly larger than the
$51/2 million of 1953, but will not quite equal $8
million.
,'7
\
f)
'

rule-making

A

conference of which

press

Chairman Cook indicated that the Commission's

means.

tions

Offer

ployee-employer relationship?

tive action."

permit giving all-of these in-

obscure

to

Why doesn't the Commission focus its attention

that reflect the costs

shear the

kind

written pages.

Space will not

intended

a field in which simplification is vital
pubic welfare, and that is with respect to
the registration requirements, complex and bur¬
densome as these are, set forth in the Commis¬

Form S-8—-"makes
unnecessary
There is no important problem

proposed Form S-8

occupy

screen

There is

statutes that couldn't

of and conformance with this

smoke

-

reporter in a recent press con¬
possibility or advisability of
amendment
to
existing SEC legislation,
Donald C. Cook, the Chairman of the Commission,
gave it as his opinion that such legislation is
"remote and most unlikely." He added that "the

market.

not be

ministrative

valid criticism of SEC activities.

to the

Questioned by
on
,the

Trhe general instructions
covering the operation
are so

conference in connection with
silly. The attempt to create
an
impression that the SEC was rendering some
signal public service is completely unwarranted
by the facts. It all amounts to but another ad¬

Exchange Commission, we have called
amelioratory legislation which would amend
the existing Federal securities laws.

It is also limited to
companies which file annual
reports with the Commission.
be

simplification.

Holding a press
this release seems

ference

must

a

stands, interested

ties and

purchases.

stock

really have

now

for

participat¬
ing employees who deposit cash or authorize
payroll deductions in connection with their stock

The

It would do well not to have

requirements

persons are given
May 12 to submit their views on the pro¬
posal. We suggest those views be that all regis¬
tration requirements
relating to the matter under
discussion be completely abolished.

'

In the absence of the

securities for the benefit of

or

parties.

here and give much needed relief, instead of in¬
jecting itself with piddling action into the em¬

limited

in cash

to

until

proposal a simplifi¬
cation there is implicit in that appellation an
admission of existing complexity,-again of'tits
own
doing, especially where the simplification is
itself so complex as to require a Philadelphia
lawyer to unravel it.

tricacies of this
It

well

do

sion's rules relating to primary public offerings.

When

that a plan
providing for the acquisition of a
proprietary interest by employees be not conBtrued as a public
offering.

proceed to examine

it would

for employees'
purchase and savings plans. In that event

As it

requirements which,
sans
the projected simplification, are very ex¬
pensive indeed.

co

us

entirely out of employer-employee

would

we

nowhere in

is

preservation

nose

who in the end pay prices
of the present registration

instance where this provision should be invoked

But let

end

own

registration

stock

the

under

between

by the Com¬

Conformity - with these proposals requires
lawyers, accountants, experts and money, lots
of it; and if these are the products of simplifica¬
tion, then heaven help us, for we are the public

The Securities Act of 1933

our

part

7

transactions by an issuer not

offering and here in

the

etc., etc.

employees and their employer
require no supervisory direction or
an

a

its

any

whole list of

a

provisions

relationships and not attempt to write contracts

directions with reference to annual reports, etc.,

those

from

as

sight. There are
prospectus requirements, summaries of earnings,

r

As we view it, the matter of
acquiring a pro¬
prietary stock interest in a business by its em¬
ployees is one of a contractual relationship

control

filed

documents

or

contract

those insisted upon

enjoys this wide power that
implies, then in the interest of wisdom

for these

complicated instructions
heading "General In¬
formation Regarding the Plan, Who May Partici¬
pate in the Plan, Contributions Under the Plan,
Withdrawal from the Plan, Assignment of Inter¬
est, Default under the Plan, Administration of the
Plan, Investment of Funds, etc., etc., etc."

for:

and should

facing sheet of the form,
undertakings, sig¬

registration statement."

and directions

government agency which we just don't

between

and

keep its

think this is becoming involved? Well,
please hold on, for it is onty the beginning. When
it comes to making the regulated walk a tread¬
mill, the SEC is a real champion.

"The

on.

information

are

If the Commission

Mr. Cook

Do you

ing powers under the statute might properly be
employed to simplify its registration require¬

paternalism

many

prospectus, the required

of the

substituting

mission.

requirements,

natures, consents of experts and exhibits and any

time the question whether its rule-mak¬

demonstration of

other

are

ment shall consist of the

"The Commission has had under consideration

a

may

of them.
Then follows a lot of hoopla about the appli¬
cation of general rules and regulations.
This is enlightening:
"The registration state¬

employer, thus fostering improved
employee relations."

Here is

them which

There

interest in the

'

in this

and

record
certain
withdraw all of his con¬

tributions without forfeiture.

following: "Employees' stock purchase
plans are being adopted by more and more com¬
panies not only as a savings program for the
employee but also as a means of stimulating his

ments. ..."

further invasion of our rights such
instance, partially supplanting the prin¬
cipals, that is, the employer and the employee,
may expect

as

given conditions

the

some

a specified formula.
deposited in a bank or trust

pursuant to

circumscription of those powers is essen¬
our
well-being and until this is done we

tial to

company which will keep an individual
of each participant. The employee under

auxiliary to employee

assigns a number of reasons
for its so-called projected
simplification of the
instant registration
requirements. Among these

for

done

The proceeds must be

The Commission

are

be

must

Tongue in the Cheek!

.

The

-

Thursday, April 23, 1953

has

been

ac¬

McDonald, Evans

•

(Special to The Financial Chronicle)

KANSAS

-

J.

CITY, Mo.—Cameron

Hemphill is

ald,

Evans;

now

&

with McDon¬

Company,

Baltimore Avenue^

*'

1009
-

*

Financial Chronicle

Number 5214... The Commercial and

Volume 177

Continued from page
y~-

.j_-;;.v.

16:--*

^

-c

"j"."..

Now,
most of you would admit that this
might happen once in a lifetime,
but to repeat the same mistakes
as" soon again as 1928 and
1929
seems almost too much to believe.
of declining markets.

riod

j

;
*

;In many

the

-to

it did not happen
or to the
of them

cases,

borrower,

same

for many
definitely out of
incidentally, many
banker,

same

swere

'and,

business
of them

had died of a broken heart,

did

but it

in many cases in the

happen

same area."

very

with

the

bankers

Indiana

you

to review

of agriculture during
the depression and drouth years
from
1930
to
1936.
Even you
hardships

-

younger men have some memories
of those days when, for many a

books, shoes
almost a lux¬
ury and the family car (and only
one car)
was a worn-out jalopy.
Since 1935, financing agriculture
Jhas become quite a simple matter
family, school

farm

and blue jeans were

Yes, it is true

most localities.

in

have been devastated

areas

-some

lost

the

country

as

whole

a

has

en¬

joyed prosperous conditions, when
-viewed
from
the standpoint of
Hi vestock and agriculture and their
loans, have been liquidated

Hbank

fashion.

excellent

iin

ticket

,

Our

pose

of

-volume

tural

period

this

on

and

livestock

"

is the formula for
Bleeping oqt of trouble in the fu¬
Now, what

How 'can

ture?

we

continue

to

customers and not only

our

.•serve

miles

five

within

to

to say "we do

to

hand

paint it"? Be realistic when you

When

ple.
to

you

three

two,

have to go back
Committee in
four months and
increased line of

Executive

your

or

rearrange

an

credit, two things occur to them.
No.
1
your customer doesn't
—

is doing. No. 2

what he

know

asset

to.your bank or to your commun¬
ity and when you are dealing with
honest
borrower, remember

not

cases

some

overdo

this

end

cus¬

that

to

pay

Remember, you
bank. Let the life

anyone.

running

are

customer will

your

a

insurance companies and the longterm credit agencies finance the

long-term credit. Encourage
customer

of

dum

I

not

do

it essential

at
details
experience in

regard

with

of
this business of financing livestock
men

you

.-and

agriculture.

I

going

am

to

•clarify a number of very impor¬
tant
things
in
one
paragraph;
^namely, the honesty and integrity
*cf the borrower—his "know-how"

resourcefulness

;and

experi¬

and

ence,

of necessity, must be a fore¬

gone

conclusion.
If your ; man
these qualifications, what
practical approach?

in

included

not

to

Florida

his

operating budget.

was

Discuss fully and frankly
loans with your Board of

(4)
your

Present

counsel.

advice

their

Get

Directors."

and

only

the

not

point of view, but the bor¬
problems. This is espe¬

bank's

rower's

cially important where you have
Board Members who know and
the activities

and if you

of agri¬

facts

do not know the facts,
sake, get them be¬

heaven's

for
fore

attempt to present your

you

your

(5)

the

worth

In

some

interest

cases

it

this is

sell, but it is

gram to

important

from

costs

is

he

not

there

a job,
helpful in the

only to do

but he is there to be
matter of
and to

analyzing

give

you

advice and counsel
do

can

as

do I mean that
knew his father or his uncle.
to know him and his family.

quaintance,
;you

<Jet

nor

customers.

your

can

have is

file

and

that

neither

a

of

human,
that
glass. Have him
you have a re¬

your

depositor—to

stockholder. Have him un¬
derstand that "yes" is not always

;your

him

needs

he

to

honest and reasonable

an

-

minute you become a
or

being

little sloppy

little careless in this respect,

a

will become just
sloppy and careless, and

borrower

your

when

as

this

happens,

may

you

as

You must have his con¬

well tear up that chattel mortgage

must have sound
and. you. must know his

and, far better, take ah unsecured

you

—

^operation- thoroughly—thoroughly
^enough to point out the risk and
the-hazrards-of^his- urrdeflfcafkiTtg
^and still be optimistic enough to
•.recognize where success could be
^attained in spite of some adverse
•conditions.

Have

files

good

information

in

don't have a sloppy,
incomplete credit file. Before you
—

mnake the loan, have him sit down

don't

I

note.
are

tions.

connec¬

When

mortgage
on

cara^hffw big they

theffiamily

what

or

yo*$gmake a chattel
loan on^&ttle, on sheep,

crops, or any

demand

that

all

other commodity,
proceeds be ap¬

plied and if advances are neces¬
sary

(2)

is

banker

the

all proceeds of sale

on

be

..your

loan

applied. Don't ever weaken. The

this most effectively, you must

reasons

good

(6) Where you take security, in¬
sist

twice

fidence

a

information

the

do

triendly.

for legitimate purposes, con¬

sider

those
Do

*

advances

not

release

on

their

the

pro¬

ceeds.

be a 90-day bank.
Arrange a maturity on your loan
when the customer will normally

'mentfrom year to year.

Keep all

have

production to sell either to

for

fully

repay,

give

"these

you

statements

in

the

file

also copies of all documents,
{all letters—everything pertaining
ryears,

to

the loan in his file.




Point out

and

in the world

alysis,

the

theory

too

afford

beef,

when

We

people wh&

many

to

buy

beef

is

high-priced

high priced,
everyone in America

today

the

who works and is willing to spend
his hard-earned dollars for food

have

In many sections our feeders have

best

fed

nation

and, in the final

well-fed

a

we

nation

an¬

is

a

happy nation. Now, if the Ameri¬
bankers

can

find

cannot

within

not

for

prosper

(7)

Do not

customer's

point of view.

Declines

in

Farm

I need not

Product

point out to

!

I

1

including

wool,

tell

can

my

beef

Will

period, stick
close

or

with

count

nothing

on

short-term basis

a

his

credit

risk

fidence
tions

and

payment,

even

in the darkest days in the depres¬
sion of the thirties, I never did
know

of

farm

a

or

ranch

being
was

this day of high
essential

than

taxes it is more

ever.

either
our

fish

farm

Where

that

known

into

clouds

the

was starved
Recognize that it

banks

cut

(Special to The Financial

being

his

Cruttenden & Co.

With Merrill Lynch

a

nancing

a
good,
honest young
who has youth and "know-

person

claim

I

in

good care of the
remaining livestock. Keep in mind

have

we

the

on govern¬

will

take

longer hours. It will take experi¬
ence
and
"know-how"
on
the

livestock operator of to¬ part of the banker. It will take a
understanding of
the
day, with his high cost of opera¬ thorough
tion, must get good production— problem in each case, but I think
he must get a big calf crop—he the ultimate objective justifies the
must

get

a

fine

lamb

time.

marketing
economize

on

Don't

his feed

he must forego

and

crop

weights at
try

to

budget. If

that winter vaca¬
or
to Hawaii,

Merrill

Pierce, Fenner

& Beano,

sacrifice

individual

has

time

the

should talk

and

arrived

think

I

when

out of the same

we

our

With Waddell & Reed
(Special to The Financial Chronicle)

MINNEAPOLIS, Minn.—Joseph
B. Erdman is now connected with

Waddell

mouth

on

side

&

Reed, Inc.,

Imperial Sees. Co.
BROOKLYN,

N

Y.

Sam

—

Belofsky has formed Imperial' Se¬
curities

with offices at 1600^
to engage in a se¬

Co.,

Lincoln Place

curities business.

V. TV Smith Opens
engaging in
from

Smith fcft
securities business

Y.—V. T.

N.

ROME,

a

offices here.

all subjects.

Let's
not talk about free enterprise and
of

MINNEAPOLIS, Minn. — John
Henry has been added to the
staff of Keenan & Clarey,
National Building.
A.

resources

that the

he must increase their

Kenneth

Edwards Street.

608

banks to meet this respon¬

our

gram

numbers and take

Lynch,

—

with

La.

is

Robertson

are

herd

good feeding pro¬

SHREVEPORT,
W.

■

in excellent condition.
margin is so thin that you
justify

(Special to The Financial Chronicle)

temporarily
suffering the results of adverse
Joins Waddell & Reed
whether conditions or price de¬
(Special to The Financial Chronicle)
clines.
Are we
going to curse
DETROIT, Mich.—Bertland W.
government help on one hand and,
Fast is now connected with Wad¬
on
the other hand, send honest
dell & Reed, Inc., 15315 West WTjcand honorable producers to agen¬
Nichols Road.
cies of government for financial
assistance?
Are we going to re¬
fuse to finance the young experi¬
Keenan & Clarey Add
enced farm boy or farm girl who
(Special to The Financial Chronicle)
operators

gentlemen, this is what we talk of
If when we talk of free enterprise.

breeding

Chkoniclb)

ELGIN, 111.—J. Willis Langdafe
has joined the staff of Waddell &
Reed, Inc. He was previously with.

bait.

retain that flesh than how" and ambition and health, but
to put it back on. Recognize that lacks only one factor—reasonably
his production is increased sub¬ liberal
financing?
Remember,
by

:

Joins Waddell & Reed

with

deal

is cheaper to

stantially

Financial Chronicle)

substantial

has been trained under the leader¬

profit

a

challenge.

King Merritt & Co., Inc.

have

the

animal.

an

this

meet

con¬

instil®-

great

your

LOUIS, Mo. — Perry'V.
Bollinger has joined the staff el

a

loan;1 deals ship of the 4-H or FHA and ex¬
primarily with livestock security, pel him or her to the factory be¬
insist that your borrower be an cause we are unable or unwilling
extravagant feeder. Never was it to take some moderate risk in fi¬
(10)

that

will

stabilizing agricul¬

I have faith and

ST.

Many of
large and small livestock and
or

a

With King Merritt

his

amortization

as

in your States
great contribution m

a

(Special to The

head in the
eyes to the re¬

on

that

nation

industry

make

tural credit.

livestock, his equipment or
from day to day.
farming operations. When his
It is my humble opinion
that
short-term credit is in excellent
shape, he can always arrange to we, as bankers in America, are
now
at a point where we must
pay interest, taxes and a modest
on

the

excellent.

this matter of

during

we,

These

noses

in

and
are

cultural
can

more than
45,000 individual
appeared on the horizon during
borrowers, I have seldom, if ever,
several periods and yet, through
observed a case where a heavy
it all, the American farmer is able
long-term debt got the borrower
to hold his head high when we
into trouble where he owed little

or

TJheir faith and con¬
themselves, in the in¬

our

our

carry?

as has been the: case
feeders, but their spirit

You Indiana bankers, by work¬
ing together with the great agri¬

honestly that in
experience, dealing sponsibility the banking industry
must

in

dustry
whole

and

decline.

sand

you

of

years

fidence

that

you

products, have suffered

this

hurt,

Prices

serious

Least

Loans

Dangerous

been

with your
is good.

the prices of many farm commod¬

ities,

Long-Term

Chicago Analysts to Heer

government interference in

curse

CHICAGO, 111.—S. A. Swensrud,
good, but furnish ample July and advocate it the follow¬ President of the Gulf Oil Corpo¬
ing April.
Let's make up our ration, will address the April 2£
feet} to safeguard: ajgaingtrloss and
minds
to
actually
finance
the luncheon meeting of the Invest¬
low production;; soundest industry in any nation
ment Analysts Society of Chicago.."
(11) Try to regahd; every, ap¬
—agriculture.
Let's be realistic
plicant as a close friend and deal
enough to recognize that losses of
With Waddell & Reed accordingly. In banking, in public a modest degree will occur. Let's
life, in government, there is no be willing to absorb and forget
(Special to The Financial Chronicle)
substitute for honest, frank, and
these losses and look with optim¬
PEORIA, 111.—Robert E. Gaufc
-honorable
dealings
with
every ism
to
the
hundreds
of
cases is now with Waddell & Reed, Inc;
tion

to

California

well and

man

that

sits

adross

the

desk

from you.

Do not hesitate to say

think. A truthful state¬

ment

may

rower

will

We,

where losses do

'

Instead
on

American
advocates

bankers,

that

we

like

tion

on

many

businessmen, are great
of

private

enterprise.

of cursing surplus,

let's

knees every night of
and thank Almighty God

our

year

-

as

not and will not

City.

of Kansas

-

;

occur.

hurt, but your bor¬
get
respect you for the the

saying.

re¬

substantially

pro¬

mutton

duce the debt. This eliminates pa. t

or

any

period, unless American
agriculture is prosperous.

extremely

so

your

what you

merits.

complete informa¬
tion and keep it complete. Com¬
pare with him his financial state-

:;and

have

can't

but

to

and

being the most

throughout the term of your sibility without calling
assistance.
It
loan, for heaven's sake, reduce the ment

To

answer—for him.

best

outstanding

in

examiner, with all his wisdom, is,
after all, not a mind reader. Give

are

is

sponsibility to

the

borrower's

your

decision.

that

subscribe

have too many cattle.

we

are

glorious history

our

cannot

Have him real¬

you

In

your

arrive at

eye

well-fed and happy peopfe.

a

don't

"

himself has failed to portray many

feed lot and be¬

'^understand

I

world

we

the

of the favorable factors and your

friend.

his

come

this

In

good complete credit
thorough
personal

a

knowledge

or

Visit his farm

ize

to how you

respect, the greatest associate you

because

By

problems

better job for your bank

a

for

and

your

the benefit of his

criticized

ac¬

that

stomach.

him.)

hard pro¬

a

not hesitate to

Do

;is

First, know your customer.
I do not mean a casual

God

full

a

nation in

been fortunate

does

foreclosed where the interest

customer's request.

Many

>

thank

reality thrives

on

longed

hand

and

will realize full well that that trip

condition.

this

We

positors also and the safety factor,
from his point of view, is well

a memoran¬

budget

your

•flmeets
a

prospers

the year. (After all, you need de¬

customer a copy so that he /

your

-

this time to go into a lot of

America, in

and

and

talk to being paid promptly and the taxes
that when you take even a modest
being paid, even though the prin¬
your
Bank Examiner when he
loss, your producer is out of busi- visits your place. Keep in mind cipal payments were deferred. The
mess.
that he is a good American, visit¬ many hazards of agriculture just
make long-term credit a "must"
ing your bank in the discharge of
Essentials in Agricultural Credit
for the average operator, and in
a duty and responsibility and that
-

that

best-fed

of

try to collect the last cent of

interest

.

adequate. Make

culture. Give them complete

no

all

program.

doing. So have your pro¬

are

gram

beyond this, keep our customers
out of difficulty? : Keep in mind
"broke farmer" is

—

do not know for sure what

understand

a

most

a

help him to care¬ their combined resources a for¬
ments
and
his
budget for the fully arrange a well planned long- mula to finance agriculture on a
term credit, even though it means
period. Insist that he put in the
proper basis, then they have no
his
having idle funds in your right to criticize government in¬
things that are essential and see to
bank through certain periods of tervention.
American
it that your projections are am¬
business
working out his loan require¬

are

Ikeep out of trouble ourselves, but,

-that

In

Let's

of

Cadillac would sell for if

a

not have sufficient funds on

own

a large
agricul¬
loans, have been nil.

in

losses

'

v

Liverpool, if I had to swim that
last five miles.) What do you sup¬

you

but

drouth,

from

enter¬

it,
half finance y0Ui\
but, in many a case, a reasonable: it is well understood by all of can afford beef.
is required to
amount of insurance payable to you that the first step towards a
I have just
completed, during^
do a good job, don't tell him he
the bank serves a fine purpose in communistic state is hunger, and the month of March, a
24-day tour
will have to get along on $14,000,
this, followed by want and de¬ of the West and the Southwestcase of emergency.
/ 1
It just will not work. (I would not
privation, leads to an unhappy In many sections our range men
(9) Do not become avaricious
give you a nickel for a steamship
population.have been hurt by dry weather:
and

you

suffered

the. have

assume

private

just

not

(3)' Do

wheat crop and still others

a

have

prise. It is

of

e

customer. If $18,000

locations have

Other

floods.

.toy

h

de¬

responsibilities

velopment of new business, your that an army travels on its stomach.
It is also well-known to all of
earnings will reflect favorably.
you
(8)

*

"

-

that

also show him
thought should be given the
progress, if this be the
tomer's
life
insurance

his lack of

in

the

in

renewals

ii? turn be willing to

you

time " saved

the

well-known saying

to him his progress,

case#

little interest, but if

a

spend

making,up

Credit?

the company were

1 feel it is unnecessary

will

......

How Sound b Ooi Farm

of

you

i. ,;> c.

;>

'

..

t.

(1773)

I

are

the

one

and only na¬

earth that is blessed

abundance.-

Without

an

with

abund¬

food, what would be the
due paper. It eliminates a lot of Now, if we are to reap the bene¬ prospects
for our fast-growing
work. Yes, I'll grant it deprives fits of private enterprise, we must population? •
Let's
continue
to
ance

of

Joins Gross,

Rogers Staff

(Special to The Financial Chronicle)

LOS

ANGELES,

Calif.—Keith

has joined the staff ot
Gross, Rogers, Barbour, SmHh

L. Rumph

Co.,

559

members

South
of

Figueroa

the

Stock Exchange.

Los

Street,
Angeles,
■

46

The Commercial arid Financial

(1774)

Railroads, representing

Continued from page 5

the

51

Another

in

development

current

the

the

is

fast

in

U. S. Auto Output Cut

workers for auto production.
Last
Thursday the Navy canceled a $154,000,000 contract of Ford's
Lincoln-Mercury Division to make J-40 jet aircraft engines,
General Motors Corp. division and most independent pro¬
ducers, except Kaiser-Frazer Corp., continued to produce at high
rates last week.
Studebaker, after a slow start early this year
because of model changeover troubles, is now leading all inde¬
is

releasing

more

about

Passenger
clined

about

It
*

pendent makers and is approaching a 6,000 weekly rate.
Tax collections are lagging and the Government's deficit for

tended

^

week.
-«*
output for the past week was made up oH120,038
and 25,514 trucks built in the United States, agains1T^135,754
Total

year fending

and

the previous week and

29,178 trucks

provided by existing law would slash revenues by $8,000,000,000
yearly.
"You cannot expect all these reductions to come as
scheduled," Mr. Folsom pointed out, "unless there is a sharp re¬
duction in spending."

Canadian factories turned out

8,317

6,692

and

cars

3,160

trucks

in

cars
cars

Activity in the building 'construction industry displayed a
sharp seasonal rise in March, according to Dun & Bradstreet,
Inc.
This was evidenced by the volume of building permits for
215 cities which reached a total of $468,133,028, the highest for
any previotis month in over two years, or since October, 1950,
which had a permit aggregate of over $500,000,000.
The March
figure was 39.2% above February With $336,391,002, and 33.6%
more than the comparable 1952 month with $350,270,591.

City alone building plans for March were
valued at $42,546,378, up 55,3% over the February sum of $27,394,212, and 34.9% above the $31,535,059 for March a year ago.
Regional comparisons disclosed marked gains over February
in all groups, while all but the New England region showed an
increase over March a year ago.
Permit volume in the Pacific
region was more than double that of last year, with siofirp ad¬
vances
reported by the Mountain group, up 59.7%; the South
Atlantic, up 50.7%, and the West Central, up 47.3%.

Steel Output Scheduled at 99.3% of Capacity This Week
Pressure

Commercial

for

higher steel

prices

is

mounting,

"Steel,"

says

and

rose

.

ages:

week

Casualties involving
136

from

121

last

which 'occurred

a

liabilities of $5,000

week
year

did

but

not

There

ago.

also

a

;

in

$100,000.

lamented

Wholesale Food Price Index

soared

155%, the cost of goods and services has risen 138%, but
that the price of steel has gone up only 87%.
\
V
Coincidentally, Ernest T. Weir, Chairman of National Steel
,

.

Corp., the countrys fifth largest steel producer, this trade journal
states, expressed concern *in a press conference at Pittsburgh that
the steel

Industry's earnings

dustry, and asserted

too low for the safety of the in¬
are and have been too low.

are

at $6.35 on

•gain

statistics

from

these

reports,

"Steel's"

28th

Financial

Annual

Aanalysis of the Steel Industry' in its current issue shows that 30
iteel producers representing 94%. of the country's steelmaking
'capacity made in 1952 a net prbfit of only 4.91 cents per dollar of
sales, compared with 5.71 cents in 1951.
The 1952 rate is the
lowest
cent

since the

is

worth

5.46 figure

less

of

1946, and,

today than it

was

in

knows,

everyone

as

a

'46.
was

the

steelworkers' strike, states this trade publication, with the largest
loser from the strike being Uncle Sam.
and

excess

His take in federal income
profits taxes from the steel companies was $1 billion

less than it would have been had there been

no strike, it declares.
though steel companies are dissatisfied with their earn¬
ings,' they will be cautious, perhaps even reluctant, in considering
a general increase in prices.
The steelworkers' union plans to ask
the companies in a few weeks for a wage increase. Even though
a steel price increase is
justified on the basis of present conditions,
the union would use it as additional
leverage in their wage de¬
mands, says "Steel."

Even

Although

demand for steel exceeds supply, this
observes, the industry was unable to operate at
high a rate in the week ended April 18 as in some of the
over-all

trade magazine

quite

as

weeks

earlier

The

this

year.

American Iron

an average

rate

when

Steel

of 98.8% of capacity.

was

Institute

announced

For the like week

a

103.1% and production 2,324,000 tons.

the capacity

was

that

the

.Smaller actual output

was

month ago

A

year

ago

2;087J)00 Hons,

100.5%.

or

year ago.

Grain markets strengthened last week
the

There

Electric Output Advances Above
Preceding Week
And Year

Ago

The amount of electric
energy distributed by the electric light
and power industry for the week ended
April 18, 1953, was esti¬

mated at

stitute.

8,112,969,000 kwh., according to the Edison Electric In¬
-

...

.

The current total was 111,804,000 kwh. above that of the pre¬
ceding week when output totaled 8,001,165,000 kwh. It was 1,008,714*000 kwh., or 14.2% above the total output for the week ended
-April 19, 1952, and 1^382,505,000 kwh. in excess of the output
,

reported for the corresponding period two

-of

:f

trading

closed

December, it

was

rise

ratios,

in

corn

shrinkage

a

was

influenced

of visible

stocks,

by

and

years ago.

Car Loadings Rise 2.4% Above Preceding Week
Loadings of revenue freight for the week ended April 11,
1953, totaled 721,139 cars, according to the Association of American
.




/continued to
earlier.

their

future, there

near

ap¬

apprehension

remained

very

year-ago

level;

durable

of

goods

larger while soft -goods

were

down

were

slightly from 1952 level.
Department

the

Federal

sales

stores

country-wide basis,

Reserve

a

on

taken from

as

Board's

in¬

dex, for the Week ended April 11,
1953,

the

of

impounding

chary of

commitments

be. less

to

"stocks

^

decreased
of

.

■

from

the

week.

In

increase of

an

week

1952.

of

increase of

5%

11, 1953,
reported.

was

For the period Jan.

the

For

four weeks ended April
an

were placed since Feb.
15.
!Although demand remained on the cautious sicje, there was a
moderate pickup in bookings of hard wheat bakery flours -the
past week, aided by a strike which closed down a pumbef of mills

13%

preceding

reported from that of the

was

similar

The 'amount of 1952-crop corn under Government loan as Of
March 15 was reported at 270,400,000 bushels, of which 40,000,000

the

previous week

"8%

| i;

bushels

the

of

than in recent weeks. ^TVllblesalets*

favorable feeding

heavy

level

orders

inventories

harvest of 1,052,-

farm supplies.

the

perceptibly

past
months, -the"dollar volume

wholesale

level

more

markets

during .the

peared

801,000 bushels—the second largest of record.
The

As

beyond the

on

sharply below last .year's

a

for

year

a

While many buyers were

placed this year's Winter wheat yield at 714,154,000 bushels. Al¬
though this was considerably larger than the 611,090,000 forecast
last

spend

did

reduced

extending

the sidelines to await the Government crop report,
after

1952

^exceed the level of a.year

Which was
Friday.
Concern Vpver the 1953
wheat crop prospects largely superseded Korean pseace develop¬
ments as a market factor.
The Department of Agriculture forecast
to

week.

slightly above the

1 to April

11,

1953, department store sales reg¬
istered

improvement.

1952.

Shipping directions al$o shoWed some
Export flour business remained dun.
Cocoa prices
continued to advance under buying influenced by ^ growing tight¬
ness in spot Accra supplies and
high asking prices, for that grade
by the British Cocoa Marketing Board.
/ •
The lard market developed a stronger tone,

rising live hog values
Cotton
within

a

prices

as

were

steady

with

daily

fluctjjationB

the

holding

■
.

Inquiries and offerings were limited and trading was compara¬
Sales

f ^

were reported it 74,500 bales,
against 68,400 the previous week, and 98,100 in the corresponding
Demand from friills continued to lag afpd inquiries
from foreign sources were light.
The -market received some sup¬
port from moderate mill price-fixing and hedging

earlier.

reported

2,109,000 bales.

son were

bales.

Loans

for

the

Gov¬

through April1 3
for tfrbburrent sea¬

season

Aggregate repayments
194,400 bales, leaving loans outstanding of .about 1,914,600
"
\}<tk

Trade Volurtie Shows No
Perceptible $
From Week Ago

A

Shoppers in most parts of the nation in the tfef tod ended

area

on

several

the

period

days

in

were

-

the

Board's

Federal

index

1953,

department

in New York

registered

a

:

Re¬

City for
April II,

drop

of

18%

from the like period Of last yestr.
In the

:
-

preceding week

reported

was

similar

week

from
of

no

change

that' ofr the

fdr

1952,

while

ended

April

11,

was

re¬

"

the

four
a

corded.

April
on

the -like

-According to

1953,

fange

York

slight- fall¬

a

the weekly period ended

withdraws!^ Entries for
April-3 totaled 21,473 bales, -against |9,263 a week
Withdrawals amounted to 10,800
bales, agaiq&t 15,600 the

before.

totaled

above

largely responsible for the week's

store sales

the week-ended

week

New

showed

from

4%

Heavy rains experienced in

serve

week last year.

qh^ations.

in

of

showing.
•

in the ten spot markets

ernment loan entries continued to exceed

off

1952.

increase

trade

week

ing

afded by steadily

very narrow range.

an

Retail
past

the result of aggressive packer demand.

.

,

the general

noticeable lack of selling pressure as traders took

was a

they

recovered

the

prior

and recovered most of

ground lost in the preceding week.

sold

similar

wholesale

week

"several

\

.

generally

the

continued fo

from

i$S'■'

tively quiet.
v

past

daily Wholesale commodity price index, con)j|iled by Dun
& Bradstreet, Inc., was fairly steady during most of
|fte past week
but moved slightly lower toward the close. The indM finished at
297.37 on April 14, as against 280.05 a week *earlier/#nd -300.61 on
a

receipts

Trading activity in many of the

The

the like date

in

than

^nation's

in the West and Southwest.

and

operating rate of steel companies having 93 % of the steelmaking
capacity for the entire industry will be at an average of 99.3% of
capacity for the week beginning April 20, 1953, equivalent to
2,238,000 tons of ingots and steel for castings. In the week starting
April 13, output totaled 2,228,000 tons with the operating rate at
the

in Week

Closes; jWeek

'•Slightly,Lower

sales

goods

than

durables

trend of food

Wholesale Commodity Price Index

a

consump¬

before.

Thig^trowed the

general use and its chief function is to shdw
prices at the wholesale level. .

foods in

issued

Responsible partly for the decline in earnings in 1952

week earlier.,

of

of

Most food

years.

/larger

Shoppers

the year-ago level of $6.37 to only 0.3%.
;
represents the sum total of'the price der pound of 31

over

Further,'early this mortth, Republic Steel Corp., the nation's

Helping to inspire steel executives to speak out on prices-are
6t§eF compariies' &nnual reports for 1952. A compilation of salient

a

buying
level

larger share of their incomes

The index

that stfeel prices

third largest producer Of steel, said in its annual report that the
price increase permitted by the'government after the steelworkers'
strike last summer was inadequate.

April 14, from $6.32

re¬

many

about half that

was

prewar

had

more

moderate

Moderate!^

The

capita

per

the

and

week.

Following the leveling off movement of last week, the Dun
& Bradstreet wholesale food price index rose moderately to stand

the "financial malnutrition" of the steel industry and
pointed out'that'since 1940 his company's employment costs have

the

household

three^ther lines.

Gains

beef

than they did a year ago.
1
•
With the help of many aggres¬
sive promotions; 'retailers of

was

wholesaling casualties were about even with 1952,
declines from last year's level prevailed in

the

foods

some

emphasize

vegetables.

stores

they .were

the weekly magazine of metal working, the current week.
-In a talk at »an industrial convention Benjamin F. Fairless,
Chairman Of U. S. Steel Corp., the nation's largest steel producer,

in

by

Super-markets

of

tion of butter

sharply to 22 from 9 and commercial service
12 from 6.
businesses failed than last year in the
commeijB|al services;

more

to

prices

year ago;

manufacturing and retailing, while wholesaling failures climbed
More

reductions

past week.

,

attracted

were

margarine topped the

heavier in all industry and trade groups except
construction where casualties declined. Mild increases/occurred in

Mortality

-j-3

Pacific Coast +2 to +6.

duced

up 29
from 19 and compared with 36 in 1952. Of the week's tdtal failures,
13 had liabilities in excess of

-fl

fresh

rise hmong small

,year-ago

South and Southwest

price

more; increased to
the 152 of this size

failures, those with liabilities of less than $5,000;

the

the

continued

or

reach

was

Regional esti¬

from

following percent¬
New England and East 0 to

4-5;

the

recorded.

were

no¬

estimated

was

year ago.

Consumers
the

up

Midwest and Northwest

4-4;

April 16 from 140 in the preceding week, Dun % Bradstreet,
Inc., reports. Despite this rise, casualties were not as high as a
year ago when 188 occurred although they exceeded the 151 in
the comparable week of 1951. Continuing far below the prewar
level, failures were only one-half as numerous as fn 1939 when
316

a

by

to +7;

165 %i

to

were

and

sections.

week

varied

to

Moderately

industrial failures

the

levels

ended

York

New

For

Business Failures Rise

ex¬

repossessions

some

mates

1

^

in

level of

comparable 952 week.

the

was

grant

by Dun & Bradstreet, Inc., to be
from
1
to
5%
higher than the

week, against 8,5.98 cars and 3,252 trucks in the preceding week
and

credit;

there

to

The total dollar volume of retail
trade

and 3,32© trucks last

cars

sales,

delinquent accounts

96,084 car* and 25,084
^

trucks in the comparable 1952 week.

credit

reluctance

ticeably in

.

120,038 cars compared with 135,754 cars (rethe previous week, and 96,084 cars turned out in the

in

relied

relaxed

on

attract

to

to

merchants

many

growing

according to "Ward's

in

Attrac¬

price promotions of

heavily

terms

1952.

merchandise

While

production in the United States >fi§t week de¬
11% below the previous week but w&s still 25%

than

more

in

helped
shoppers' interest.

rather

car

spent

week

during the prior

slightly

reduced

bolster

aggravated

vised)

and

seasonal

year ago

June 30 will be "somewhat larger" than the
$5,900,000,000 predicted by former President Truman, Treasury
Under Secretary FolsOm, reports.
He estimated that tax cuts

^

tive

Ago

higher than corresponding period last year,
Automotive Reporte."
>

last
as

the similar week

Late|| Week

by Strikes in

of

much

as

week

ix

,

But Holds Above Year

f

fiscal

°

Thursday, April 23, 1953

...

Wednesday

■

total

1951.

easing of once-tight labor supply in the auto-dominated Detroit
area.
"Ward's" said the "cancellation and re-phasing of defense
contracts"

week's

represented an increase of 30,387 cars, or
4.4% above the corresponding week a year ago, y§hen loadings
were
reduced by labor difficulties in the steel industry, but a
decrease of 56,850 'cars, or 7.3% below the corresponding week

Industry

industry

of 2.4% above

cars

preceding week.
The

The State of Trade and

increase of 16,622

an

Chronicle

weeks

decrease
For the

11,

1953,

of

2%

period Jan.

volume

2% under that of 1952.

1

to

declined

Number 5214... The Commercial and Financial Chronicle

Volume 177

(1775)

The following statistical tabulations

Indications of Current

Business

latest week
week

Activity

month ended

or

Latest

Previous

Month

Week

Week

Ago

AMERICAN IRON AND STEEL INSTITUTE:
Indicated

steel

Equivalent

(percent of capacity)

operations

month available.

or

Apr. 26

§99.3

*98.8

on

Year

(net tons)—

Apr. 26

§2,238,000

*2,228,000

2,324,000

2,087,000

42

oil

and

gallons

condensate

BANKERS'
OF

(bbls. of
....Apr. 11

6,267,750
116,705,000

6,341,250
6,965,000

6,449,950

Apr. 11

7,060,000

11

22,503,000

22,401,000

23,147,000

21,542,000

.Apr. 11

2,678,000

2;605,000

2,425,000

2,720,000

__Apr. 11

9,790,000

*10,169,000

10,544,000

9,412,000

...

(bbls.)

Kerosene output (bbls.)
Distillate fuel oil output (bbls.)
Residual fuel oil output (bbls.).

I

_.__Apr. 11

8,723,000

Stocks at refineries, bulk terminals, in transit, in pipe lines—
Finished and unfinished gasoline (bbls.) at_
—Apr. 11
Kerosene (bbls.) at
Apr. 11
Distillate fuel oil

(bbls.) at
Residual fuel oil (bbls.) at

ASSOCIATION

OF AMERICAN

162,249,000

160,869,000
18.640,000
62,545,000

48,494,000

40,663,000

39,998,000

42,284,000

704,517

700,108

661,649

668,949

690,752
628,655

CONSTRUCTION

S.

construction

Private construction

r_Apr. 16

Public construction

:

State, and

148,335,000

___Jl_Apr. l6

126,666*000

,

.

—

—__.3JL.Apr. 16

municipal—

"V

231,750,000

84,339.000

31,664,000

74,586,000
9,753,000

93,441,000
20,768,000

63,088,000

;'

30,546,000

/.

-:

-

Pennsylvania anthracite

•-

Beehive coke

•;

—Apr. 11

7,070,000

•'/

8,425,000
448,000

;-x/s_Apr.ll

(tons)______—_—,—.—______

" system^-llh?-49 average

;

.—Apr.' 11

122,100

3ii;ooo

662,000

y r 113,300

-..128,600

-federal reserve

105

v;

rApr. 18

'8,112,969:;;:.

8,001,1658,077,706/
''

industrial)

and

d

—

.

bradstreet, inc.—______

--; ,sfl

165

-—Apr. 16

^

f

•

.1

•

„

/

•;

^e. & m. j. quotations):
Electrolytic copper—
.
Domestic refinery at-—
Export refinery at
Straits tin; (New York) at———_______

;' V L :<{i :; i4o
V

4,376c

$55.26

4.376c

,

4.376c
:

$55.26

.

•

v

$55.26

•:

$42.75

$44.08

$43.92

'

,

30.400c

30.425c

'29.150c

33.675c

34.200c

33.975c

27.425c

121.500c

121.500c

12.500c

I3.500C

Apr. 15

12.300C

______

———_£sLApr.

U. S. Government Bonds—

95,000c

"•

,

111.500c

-

'.

_____^s_Apr. 21

Average corporate.

a-haApv. 21

Aaa

5^Apr.

_i——-

34

29

30

31

26

and

11

10

26

26

18

____

,

205

_____________________

725

8

—

'* '■■■

——

Railroad Group
Public Utilities

318

L'Orders

Production

•

27

19.000c

Highways

125

95

115

57

51

51

98.23
110.15

:

110.70

—

104.14

105.17

;

109.60

102.96

;

-

107.27

['**

f

-•••'

'

FAILURES—DUN

Wholesale
Retail

number

Commercial
Total

■'

service

2.93
3.00

Construction

3.36

-

76

(tons)

3.19

Commercial

OIL, PAINT AND DRUG REPORTER
V1949 AVERAGE i=100
LOT

Retail

-

Dollar

value

■.Vv-,'.-. 3.25 ■'!
/

3.32
""

3.17
419.5

number

63

173,738

,.'"•■•■

i

,

Z.

..107.10

Stocks

32,698
■

29,803

32,270

850,274

920,179

$39,530,066

$37,963,466

$41,508,247

,

.

.

$40,150,266-'

4

30*121
879,588

'

*■'

927,029

-

.

*

229

^

;- 29,754

-

I

—

/

f

201

28,760
803,112

Men's

March____

_r_

7,131

month

$36,563,744<

$32,488,279

$32,203,188

$33,126,961

281,920

-258,950

Piece

767,000

-

-•

.

/

.

.

V.

279,970

765,778

735,251
1,639,947
3,812,794

1,173,976

RETAIL

1,861,629
6,940,360
109,962
1,091,947

20,277,000

104.7

104.8

137,086

-

,

1—

_______—

L-_—

97.7
105.4

106 *

100.4

________—__

.100.4

101.5

;

104.8

105

107.6

—

goods—

107.7

103,6

,

90.6

-..-"■
,—-—'

■•

•

95.4

90.7

110.7
94.9

;

-

•'■—'

102.2

120.4

comforters—

and

90.6
108.4

95.4

goods—l.
—

Blankets

97.ty

104.8

furnishings

Sheets

105.b4>

97.6
105.4

—

Domestic—

660,17!
19,886,900

PRICE

'

/•

107.6

216,990

108,170
1

(COPYRIGHTED)

1935-39=100

April 1:

Cotton wash

'

.

$534,000

20,221,000

—//_—

Rayon and silks____*._——

•

Number iof; shares—Tctalsales.^—._^—^_————^Apr.Short sales——
——.—Apr..

$511,000

6,402,108

March—_____

of

apparel
apparel

Home

772,858
5,858

795,981

-,828,409

$29,232^)00

772,176
1,940,751

as. of March 28
of March 28__—_—

Infants' and children's wear—

27,442

6,742

7,517
9021847-

$27,273,000

6,905,000

4,563,000

COM¬

Piece Goods

172

29,517

835,151

•

.•*

2,485,000

FED¬

OF

PUBLICATIONS
—

of

ComiX)site index

27,614

28,961

•

' 237

;•

30,943
910,364

•

3,378,000
1,180,000

NEW YORK—

DEPT.

Women's

VZ*,

31,172
:

—Apr-.

by dealers—

—

28—L__

March

—As

4

3*506,000
1,387,000

BALES:

as

Linters—Consumed

109.82

:

—^——

—

public storage

INDEX

4

713.

$13,046,000
2,233,000

.

In consuming establishments

FAIRCHII.D

-

691

$507,000

^___

(000's omitted)—.

LINTERS

AND

OF

Lint—Consumed month of

81

107.49

BANK

MERCE—RUNNING

'

Customers'other, saler_^;_^—_——Apr.
Dollar value'

RESERVE

COTTON

423,844

*107:06

.

55

$31,082,000

LI/-

^

liabilities-—:__i_

liabilities

ERAL

•

"

.

~

$8,452,000
5,124,000
9,139,000

___:

liabilities
service

Cotton spindles active as of March 28___—

Customers' short, sales.;
—^>—Apr.
Customers'; other; sales———.
—_——Apr.

Round-lot sales

Total

198,938

517,597

95

567,535

$12,213,000

72
:

49

3,553,000
10,423,000

;

—_______

liabilities

As of March 31

242,903

251,974

,

,*

739

liabilities

COMMERCIAL PAPER OUTSTANDING

431.1

226,218

*>■

•:

69

371

86

3.19
2.97

In

Number of shares—Total sales.—;—___i_—_-__Apr.
Customers' short salesi—i——__—_Apr.

v

•

:

413.9

'

■

;

v

•

:

364,392

^

90

"
Number of orders-^-Customers' total sales——Apr.

•

3.34

-

,

—Aim.

—

Odd-lot'purchases by dealers (customers' sales)—
'

3.44

.

^

■

.

'

'

-3.42

-

odd-lot sales by dealers (customers' purchases)—
v;
.•■". Number-of. orders^..—
U---———Apr:
Number of shares-..-——Apr.

1

.:

s:

■

554,127

" ' v
^±^lApr. l7
ODD-V

DEALERS AND" SPECIALISTS ON N. Y. STOCK
EXCHANGER SECURITIES EXCHANGE COMMISSION;

;

"
.

235,635

PRICE INDEX—

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF

.

3.49

/

-

.:

76

348

3.50

3.57

3.63
: '

416.7

———^Pr- J J

L_

? 9,43

.

;

361
85

:

Wholesale liabilities

3.13

,

3.28

154

j.

ii__

number

Manufacturing

3.16

.

'

.

BRADSTREET,

i

2.62
,

i___.

Construction number

113.70

2.91
3.31

&

______

—

number

3.19

3.21
_

v.

_

'•;"»■

.3.39

-

.

;

Manufacturing number

109.60
■

109.97

2;9f>'

:

-

106.92

•

108.52

water.

INC.—Month of March:

113.12

106.56

and

BUSINESS

114.46

109.60

-

105.52:

:

223,165^

Percentage

39

100

.

of activity^—-'—--i.—_ABr' ll
Unfllled:orders:v(tons>-:atendbfperlodi-ai^__i____—^iAP1''1l

■

32

148

3.65

received-(tons)_i^__—______-_^_----_-i-_-———7Pl' f}

131

34

132

-

"3.47•

INDEJL———.__——-JApr. 21
^
' r
^
l',

NATIONAL PAPERBOARD ASSOCIATION:

114

134

5

-

'

MOODY'S COMMODITY

311

103

137

95

'

—

295

115
^

102

94.30

.

104.31

3.46.

'•'-'3'.27

55

26

107.44

J,' I

3.52

„——,w_———_ja$L_Apr. 21

Group——————________—________ Apr. 21
Industrials: Group
—_———Apr; 21

:..t

'

•

5

715

44

46

13

3.32

:""r
____l_______Ll'lApr. 21
—_If_iApr. 2i

8

647
■'"

'

1__

'

A

30

46'
216

65

101.97

.3.25

.

238

5

-

»:3.42f'-»■,•

_fcs_lApr. 21

j—

6

;

-

.,

107,98

VT'! 2.99*"i

—————.rApr. 21

;—

41

11

-tf,
:

292tl

28

51

"f / 109.24

108.16 ;
,

274

31

13

93.65

104.66/

'

123

58

105.34

______________l2a:. Apr. 21

—.—L_Apr. 21

110

47

Residential building

''

102.2

103.0

120.4

122.2

.

Other
'

——_i__Apr.

sales.

TOTAL

4

258^950

216,990

7* 308,160

318,550

348,760

■v

Hosiery

Total Roundrlot sales—
Short sales '
; :•' /.Other', sales-

*

Corsets

,:

_______Mar. 28

TRANSACTIONS

-ROUND-LOT

Shoes

FOR

332,590

9,731,330

9,567,670

422,140
8,984,260

ACCOUNT

OF

■

10,119720

9,900,160

8,406,400

Shirts and

-

Transactions of specialists In stocks
Total purchases ———

-""■'Total-sales _i_~:-w__—
Other transactions initiated on-the floor—
Total purchases
—

>

Short

1,010,130
179,880

_.-________'.i____.pr_Mar. 28.

*

165,480
787,890

1,040,050

—___-i_Mar.28
-

J-

953,370

-f

i

"

335,360

316,760

32,900

_^w^_Mar. 28
—^.Mar. 28

;

12,000

Other «ale$—'—.Mar. 28,

Total sales

-—U—-^-Marl 28

Other transactions initiated off the floor—
Total

■*

290,230
r-

323,130

——

Short, sales

.

.

sales

Other sales
,

Total sales

WHOLESALE

28

LABOR—(1947-49

NEW
=

28

499,850

28

1,777,355

-

SERIES

—

_Mar. 28

S.

100):

DEPT.
•

245,480

203,610

280,080

commodities

Farm

—

—;

—

products,,

Processed

foods-,

—

Meats

396.181

1,492,306
314,040

1,220,145

1,507,764
1,821,804

1,126,751

162,320

1,289,071

fa

•Revised

nf Jan. 1,

figure.

111.5

z__Apr. 14

109.5

*109.6

110.3

__._Apr. l4
_____Apr. 14

98.0

*98.6

100.1

107.2

104.9

107.2

103.4

*103.6

88.2

*88.6

94.4

110.7

113.3

*113.2

113.4

113.2

HIncludes 575,000 barrels of foreign cfude runs,
of 108,587,670 tons.




104.8

109.0

102.9

102.9
102.9

———

—

Luggage

—

Electrical

household

appliances

—-i—
—

———

GREAT BRITAINBANK, LTD.—Month of March

103.0
109.8

108.5

118.1

118.9

101.1

101.1

103.0

100.8

101.8

104.4

104.6

106.4

101.6

101.5

100.7

127,783,000

£11,670,000

£2,337,000

NEW CAPITAL ISSUES IN
MIDLAND
U

112.3
^

108.2

S. GOVT. STATUTORY DEBT LIMITATION
—As of March 31 (000's omitted):
Total face amount

that may be outstanding

at any time__—
Outstanding—

——

public debt
—---------Guaranteed obligations not owned by tne

Total

gross

-

__

$275,000,000

$275,000,000 $275,000,000

264,484,781

267,583,710

258,083,504

51,275

50,029

40,582

$264,536,007

$267,633,740

$258,124,087

^

—Apr. 14

1953 as against the -Jan. 1, 1952 basis

102.9

107.0

100.8

Treasury

foods_____—____Apr. 14

—

All commodities-other than farm and

100.2

100.2

102.8

118.4

——_r:

—

352,871

527,304

1,704,565

102.4

102.8

coverings

Radios'

213,710

Commodity GroupAll

Floor

10,100

436,965

246,650

111.7

110.0

197,800

43,310

1,457,915

U.

267,390
34,600

268,185

286,870

106.5

110.0

102.4

108.2

1,593,705

425,760

28

106.8

110.0

107.0

wear—

679.180

65,740
461,564

*

109.2

——

.

367,795

74,090

1,576,160
1,863,030

——

-——

Underwear

295,586

351,025
69,170

431,865

28

stMar. 28

:

————

PRICES,

Socks

China

—:—______i__Mar. 28

—

Infants"

108,910

—

'

•

Short

302,230
314,230

100.6

108.6

106.7

overalls—

and children's

754,160

*

purchases
Mar.
:—....^
——_____^_iu3aMar,
Other sales ——.—
;—
_-^»Mar.
Total, sales ———————-————Mar.
Total round-lot transactions for account of members—
Total purchases
J—
I
.'—_ae.Mar.
——

;

96.8

99.2

108.6

100.2

including

570,270

"

sales

92.1

102.4

—~
——

neckwear___.—

'

■;

;

./.'• :•:

929,330
213,700
800,720
1,014,420

925,920

860,170

—_—l-Mar.*28

..

91.9

102.9

Clothing,

in-which registered—
-i_*Mar, 28

—

98.5
107.9

r

,

—_—

Hats and caps—

MEM* /

97.9

107.3

99.2

.—'————

—

Underwear ■

BERS, EXCEPT ODD-LOT DEALERS,AND SPECIALISTS:: **

v-Short-..sales Other sales:"—

—

__________

apparel—
Hosiery

238,890
7,003,580
7,242,470

95.6

94.8

98.1

—.—,—;

Men's

385,390

94.8

107.3

—

Underwear

*^ar. 28
-_—''___'^Mar. 28

Total sales :

brassieres

and

Furs

•;«

—.—

________—*.

_—

Aprons and housedresses^__—

ROUND-LOT STOCK: SALES -ON THE/NEW YORK

,;

.

278,550 m

.

Women's apparel—

EXCHANGE AND ROUND-LOT $TOCK TRANSACTIONSFOR ACCOUNT-OF MEMBERS (SHARES)-: *■ -

:

/,

Z-iisLsio

279970

Round-lot purchases by dealers—'
; : ;
. ^
Number of/shares-—Apr.

/

<

§Based

"on

new

/.

25

316

'

construction

9

33
•

Conservation and development
All other public_______.

*.

103.80

J/L.:,—.L/L—;:JSEiApr.- 21

17

122

r

utilities

■:

Miscellaneous public service enterprises

/.

.———L——^.Apr. 21

Utilities Group.——.—.

yAaa;-—te~———-—-L.—:-L~—■
Aa

34

33

Sewer

106.04

107.27

—.L_l—.—Apr. 21

MOODY'S BOND YIELD DAILY AVERAGES:

,,

122

32

'

...

118

18.800c

101.64

U. 8. Government Bonds.:—

41

119

19.500c

104.83

;-Average corporate

62

13.300c

i-

108.52

Apr. 21

—

74

50

65

11.000c

105.52

21

'

TIT

__

Group—

112

49

12.800c

93,20 '

_

Public

114

buildings_Z

11.000c

•

11.000c

15

12

398

Other nonresidential building
Military and naval facilities——_____

'

13.000c

77

,

—_________

garages

Hospital and institutional

'

—

Railroad Group——a.

-

425

202

Nonresidential building
Industrial
;

24.200c

MOODY'S BOND PRICES DAILY AVERAGES:

Industrials

431

__

Educational

.Apr. 15
J/__Apr. 15

—_.

—

.

.J.f

.^Apr. 15

(New York) at
Lead (St. Louis) at

A

;-:t

19

195

Public

.r/i-

■

67

19

Telephone and telegraph—
Other public utilities
All other private

$42:00

y;

.--Apr. 15

Lead

Aa

77

Railroad

4.131c
$§2.72

yZ

,

1,617

198

Fuhlic

"

,

_

■

710

alterations..—....

.

Miscellaneous

OO 03

{ 160

•

,

at—

and

760

recreational—.
Hospital and institutional—__________

ji.

•

".V

metal prices

(East St. -Louis)

799

675

•

856

Social

"

Iron age composite prices:

Finished steel (per lb.)
Apr. 14
•V; Pig; iron (per gross ton)_——
l______.___Apr. 14
».
Scrap steel- (pergross ton)—_______ Apr. 14

Zinc

$2,332

761

1,733

Educational

7,104,255

••

,r

*

...

$2,225
1,578

$2,458

ZZZZ

Farm construction

Electric output (in 000 kwh.)_„

(commercial

$458,498,000

Religious

edison electric institute:

failures

$489,556,000

Other nonresidential building__

y.^'^^'lll

100

97

50,849,000

$467,630,000

Warehouses, office and loft

'»

^.^.Apr. 11

31,772,000

building (nonfarm)
dwelling units...

Commercial

;.v3 60,000

-

,

6,214,000

32,336,000

;u

Industrial

8,055,000
632,000

8,460,000

..

57,000,000

shipped between

Stores, restaurants, and

(tons)——______

department store sales index

38WOOO

stored and

construction

new

COAL OUTPUT

(U. S. BUREAU OF MINES):
Bituminous coal and lignite (tons)

44,205,000

Nonhousekeeping
Nonresidential building (nonfarm)

114,209,000

v

137,664,000

39 942 000

Residential

120.896,000

93,634,000

8,211,000
27,556,000

:

Private construction

$235,105,000

101,479,000

;

95,002,000
;

$316,089,000

$195;il3,000

$228,004,000

8,749,000

"S^li'ooo

J

Additions

$275,001*000

$233,509,000
114,321^(00

110,412,000

—

goods

on

New

^.^_Apr. 16

.

.

$237,426,000

BANK

CONSTRUCTION—U. S. DEPT. OF
LABOR—Month of March (in millions):

ENGINEERING
H.

—

NEWS-RECORD:

Uf.

o

RESERVE

Total

Total

721,139
646,149

,

Ago

$136,312,000

BUILDING

RAILROADS:
.

Year

Month

$131,524,000

OUT¬

foreign countries

35,880,000

Month

ZZ_Z~Z—I__ZZZZZI
ZZZZZZZZZZZZZ

exchange

Based

17,017,000

59,723,000

(number of cars).
....Apr. 11
Revenue freight received from connections (no. of cars)_Apr. 11

Total

Dollar

157,781,000

18,760,000

60,972,000

Previous

NEW YORK—As of March 31:

Domestic shipments
Domestic Warehouse credits

8,746,000

19,075,000

Apr. 11

Revenue freight loaded

ENGINEERING

9,318,000

161,207,000

...Apr. 11

—„

8,593,000

6,366,300

of that date:

are as

$153,511,000

ACCEPTANCES

Imports
Exports

6,315,000

Apr.

....

stills—daily average (bbls.)—

Gasoline output

DOLLAR

either for the

are

Latest

(in thousands)

STANDING—FEDERAL

output—daily average

each)..

Crude runs to

CIVIL

—

Month of March

AMERICAN PETROLEUM INSTITUTE:

of quotations,

cases

BOARD OF GOVERNORS OF
FEDERAL RESERVE SYSTEM—

THE

100.5

in

or,

to—

Steel ingots and castings

Crude

Dates shown in first column

BANK DEBITS

Ago

103.1

production and other figures for the

cover

that date,

«

annual

capacity of 117,547,470 tons as

Total gross

public debt and

guaranteed

obligations
Deduct—other outstanding

public debt obli¬
gations not subject to debt limitation-*—-

outstanding—
Balance face amount of obligations, issuable
Grand total

under

above authority

607,515

610,643

651,347

$263,928,542

$267,023,096

$257,472,739

7,976,903

17,527,260

*•'

48

The Commercial and Financial Chronicle...

(1778)

Thursday, April 23, 1953

it INDICATES

Aberdeen Idaho Mining Co.,

Jtarch

Wallace, Idaho

(letter of notification) 100,OGG shares of non¬
assessable common stock. Price — 15 cents per share.
Proceeds
Wallace

—

To develop

mining claims. Underwriter

—

Brokerage Co., Wallace, Idaho.

* ACF-Brill Motors Co., Philadelphia, Pa. ■
April 20 filed 215,360 shares of common stock (par $2.50)
and 44,303.5 common stock subscription warrants. Price
—At current market

prices, plus not more than 50 cents
share of stock and 25 cents per warrant. Proceeds—

per

To Allen &

Co., New York.

Underwriter—None.

•

Armstrong Rubber Co.

30

j

convertible subordinated
Price—To be supplied by

debentures due

May 1, 1973.
I Proceeds—For working capital. Business—
Manufacturer of tires and tubes. Underwriter—Reynolds
amendment.

& Co., New York.

<

Ashland Oil & Refining Co.
Feb. 27 filed 100,000 shares of

+

'

cumulative second pre*
ferred stock, $1.50 series of 1952 (no par) (convertible
prior to June 15, 1962) to be offered for subscription by
officers and employees of company and its American
for Employees."

Plan

tion

a

"Restricted Stock Op¬

Price—Alternate

provision*;

capital stock (par $10)
being offered for subscription by stockholders of record
April 14 at the rate of one new share for each three

of the market value of:c the: stock at the time the options-

shares

are

held; rights to expire on April 29. Price—$30 per,
general corporate purposes. Office

share. Proceeds—For

—Watertown, N. Y. Underwriter—Blyth & Co., Inc., New
York.
T.Alabama Power Co.

the purchase price at 85%

fix

and 100%, respectively,

granted. Proceeds—For working capital and used im

part for property additions and

improvements. Under¬

writer—None.

American-Canadian

(formerly

Uranium Co.,

:

Ltd.)

April 10 filed $18,000,000 first mortgage bonds due May
1,; 1983. Proceeds—For construction program. Under¬

April 17 filed 500,000 shares of common stock (par 10
cents). Price—$1.25 per share. Proceeds—For engineer¬

writers—To be determined by competitive
able bidders: Halsey, Stuart & Co. Inc.;

ing, development and mining expenses. Underwriter—
George D. Clarke, Ltd., 50 Broad Street, New York.
:

Inc.,

and

bidding. Prob¬
Blyth & Co.,
(jointly); Morgan

Peabody & Co.
Stanley & Co.; Kuhn, Loeb & Co.; Union Securities
Corp., Equitable Securities Corp. and Drexel & Co.

(jointly);

Kidder,

Lehman

Brothers;

First

The

Boston

Corp.;

JHarriman Ripley & Co., Inc, Bids—To be received up to
11 a.m. (EDT) on May 12 at office of Southern Services,

Inc., 20 Pine St., New York 5, N. Y.

:

/ •;

^ Algemene Kunstzijde Unie N. V. (United Rayon
Mfg. Corp.), Arnheim, The Netherlands
April 17 filed "A. K. U." American depositary receipts
£or American t shares representing ordinary shares of
Algemene at the rate of
Florins

50

par

one

American share for each

value of ordinary shares.

Depositary—

The Chase National Bank of the City of New York.- Un¬

derwriter—None,
0

financing being involved.

no

Aluminium Ltd.

(4/24)

March 30 filed 818,657 shares of capital stock

(no par)

to be offered for subscription by stockholders of record
on

April 24 at rate of

Kield; rights to expire
dollars; or $34 U. S.

one

new

Dealer Managers—The First Boston Corp. and
"White, Weld & Co. to head group in United States; and
ment effective

Co., Ltd. to head

Colo.
March 23 (letter of notification) 232,000 shares of com¬
mon stock (par 10 cents).
Price—$1.25 per share. Pro¬
ceeds—For exploration.
Office—Interstate Trust Bldg.,
Denver, Colo. Underwriter—Luckhurst & Co., Inc., New

group

••

:

.

,

New York.

13

(letter of notification)

stock.

Price—At

market

com¬

(from $2.50 to $3.50 per

Baukol-Noonan, Inc., Noonan, N. D.

March 16 (letter of notification) 15,000 shares of common

May 1, 1973.

holder.

burg, S. C.; Johnson, Lane, Space & Co., Savannah, Ga.;
Corp., Charlotte, N. C.

smd Interstate Securities

American Pipeline Producers, Inc.
Jan. 5 (letter of notification)

599,000 shares of

common

stock (par one cent). Price—50 cents per share; Proceeds"
—To drill wells. Office—Room
308, Texas Eastern Bldg.,

IShreveport, La. Underwriter—W.C. Doehler Co., Jersey
City, N. J. Offering—Date indefinite.
American Reenforced Paper Co., Attfeboro, Mass.
March 18 (letter of
notification) 1,960 shares of common:
dstock (par $5). Price—$15.25
per share. Proceeds—To P.
TP.: Jackson, the selling stockholder.

Underwriter—Paine,

Webber, Jackson & Curtis, Boston, Mass.

—

Arcturus
March 27

Electronics, Inc., Newark, N. J.
(letter of notification) 40,000 shares of class

A common stock (par one
cent). Price — 50 cents per
share. Proceeds—To Delbert E.
Replogle, President. Un¬

derwriter—Gearhart & Otis, Inc., New York.

Arkansas-Missouri Power Co. (4/27)
April 6 filed 40,000 shares of 5%% cumulative preferred
stock. Price—At par ($25 per
share). Proceeds—To re¬
imburse the company, in
part, for property additions and
improvements. Underwriter—Edward D. Jones & Co.,
St Louis, Mo.
6

Arkansas-Missouri Power Co. (4/24)
April 6 filed 47,413 shares of common stock
(par $5) to
be offered for subscription
by common stockholders of
^record March 31 at the rate of

one

new

share for each

sight shares held (with an oversubscription
privilege);
sights to expire May 5. Price—To be
supplied by amend¬
ment. Proceeds-—To
repay bank loans.
Underwriter—
Uone, but soliciting dealers will be paid a commission.

per

(par $1). Price—At market (from $2.50 to $3.50
share). Proceeds—To C. E. Kempel, the selling stock¬
Underwriter

Jamieson

—

&

Co., Minneapolis,

Minn.
i
Bristol Oils Ltd., Toronto, Canada
Sept. 25 filed 1,000,000 shares of common stock (par $1).
Price—Approximately 64.48 cents per share. Proceeds—
To acquire leases and for corporate purposes. Under*

writer—None.

To be named by amendment.

Byrd Oil Corp., Dallas, Tax.
Oct. 22 filed $1,750,000 of 10-year 5^% convertible sink¬
ing fund mortgage bonds due Nov. 1, 1962, to be offered
for subscription by common stockholders at the rate of
$100 of bonds for each 28 shares of stock held (for a
14-day standby). Certain stockholders have
rights. Price—At par. Proceeds—To repay
outstanding notes and for drilling expenses
capital. Underwriters—Dallas Rupe & Son,

waived their

$1,014,500 of
and working

Dallas, Tex.;
Co., New York; and Straus,
Chicago, 111. Offering—Postponed.

Carl M. Loeb, Rhoades
Blosser & McDowell,

&

C.I.T. Financial Corp., New York
April 2 filed 374,500 shares of common stock (no par) to
be offered under "Restricted Stock
Option Plan for Key
Employees" to certain employees of the corporation and
its subsidiaries.

California-Pacific Utilities Co. (5/5)
April 15 filed 50,000 shares of cumulative convertible
preferred stock. Price—At par ($20 per share). Proceeds
—To repay bank loans and for

new

construction.

Under¬

writer—First California Co., Inc., Los
Angeles, Calif.
California Tungsten
Corp., Salt Lake City, Utah
March 30 (letter of
notification) 1,999,000 shares of com¬
stock.

mon

Price—15

cents

per

share.

Proceeds—For

working capital, etc. Underwriter—Tellier
York.

&

Co., New

Carver Oil & Gas Co., Inc.
March 23 (letter of
notification) 2,042,051 shares ©f com¬
mon stock
(par one cent). Price—\2Vz cents per share.
Proceeds—For development of

•

Cascade

Natural

Gas

Corp., Seattle, Wash.
(letter of notification) 60,720 shares of com¬
mon stock (no
par) to be offered in exchange for 11,400
shares of 8% cumulative convertible
preferred stock (par
$5) and common stock (par $5) of Northwest Cities Gas
Co. on a l-for-5V2
basis, plus 25 cents in cash. Price—
$25 per share. Proceeds
To acqmre aforementioned
March 30

—

stocks.

Underwriter—Sheridan Bogan Paul & Co., Phila¬
delphia, Pa.

Boston

Philadelphia

Pittsburgh

San Francisco

Private Wires to all




offices

Chicago

Fenner & Beane and Salomon Bros. & Hutzler
First Boston Corp.

(jointly);
Bids—Tentatively expected to

The
be

received

mon

Milling & Mining Corp.
(letter of notification) 1,800,000 shares of

stock. Price—At par (10 cents
per

noon

(CDT)on May 15

at

20

No.

Drive, Chicago 6, 111.

Columbia Gas System^ Inc.
April 9 filed 1,700,000 shares of

(5/12)

V ;'

:

stock

(no par).
Proceeds—To repay bank loans and for construction pro¬
gram. Underwriters—To be determined; by competitive
common

bidding. Probable bidders: Merrill Lynch, Pierce, Fenner
& Beane, White, Weld & Co. and R.
W;'Pressprich &c
Co. (jointly); Morgan Stanley & Co.
Bids—Tentatively
scheduled to be received up to 11 a.m. (EDT) on
May 12.

Community Credit Co., Omaha, Neb.
Jan.

-

26

(letter of notification) 1,500 shares of
cumulative sinking fund preferred stock, series A. Price
—At par ($100 per share). Proceeds—For
working capitaL Underwriter—Wachob-Bender
Corp., Omaha, Neb.

it Computer Manufacturing Corp., N. Y. (4/27)
April 13 (letter of notification) 150,000 shares of com¬
mon stock (par 10
cents). Price—$1 per share. Proceeds
—Principally for working capital and for general cor¬
porate purposes.

Underwriter

—

R.

Klein

V.

Co.

New

York.
•

Consolidated Gas Co., Atlanta, Ga.

(4/27)

March 27 filed 50,000 shares of common stock
(par $5).
Price—$8.50 per share. Proceeds—To repay bank

loans,,
$34,700 of debentures of Consolidated Gas Co.

Albany, and for working capital. Underwriter—Courts
Co., Atlanta, Ga., and New York, N. Y.

&

it Consolidated Natural Gas Co. (5/26)
April 17 filed $40,000,000 of debentures due 1978.
ceeds—To

purchase
their

Pro¬

securities of operating subsidiaries

construction

expenditures, estimated at
$49,000,000 for 1953. Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart
& Co. Inc.; Morgan Stanley & Co. and The First Boston.
Corp. (jointly); White, Weld & Co. and Paine, Webber,.
Jackson & Curtis (jointly). Bids—Expected to be re¬
ceived at 11:30 a.m. (EDT) on May 26.

Cooperative Grange League Federation
Exchange, Inc.
'
Feb.

13 filed 50,000

shares of 4% cumulative preferred
(par $100) and 700,000 shares of common stock
(par $5). Price—At par. Proceeds—For working capital
Business—Production of dairy and poultry feeds. Office
—Ithaca, N. Y. Underwriter—None.
'
•
Copeland Refrigeration Corp. (5/6-7)
April 14 filed 150,000 shares of common stock (par $1), of
which 75,000 shares will be for account of
company and

the

rest for account of selling stockholders. Price—Tosupplied by amendment. Proceeds
For working:
capital. Underwriter—Baker, Simonds & Co., Detroit,.
be

—

Mich.

Coronado Copper Mines Corp.

.

Jam,28 (letter of notification) 299,970 shares of

common

stock

(par 10 cents). Price—$1 per share. Proceeds—
acquire leases, for exploration expenses, to repay
loans and for working capital. Office—100 West 10th
St, Wilmington, Del. Underwriter—Charles J. Maggio*
Inc., New York. Letter to be withdrawn.
To

Detroit Edison Co.

(4/28)

March 26 filed $40,000,000 of general and

refunding mort¬

gage bonds, series M. due

May 1, 1988 (to carry interest
Proceeds—For construction pro¬
Underwriters—To be determined by competitive

at not to
gram.

exceed

4%).

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Kuhn, Loeb & Co.; The First Boston Corp.; Coffin &
Burr, Inc. and Spencer Trask & Co. (jointly). Bids—
To be received

up

to 11

a.m.

(EDT)

on

April 28 at 60;

Broadway, New York 4, N. Y.
Detroit Testing Laboratory. Inc.,
Detroit, Michw
April 2 (letter of notification) 150,000 shares of common
stock (par $1). Price—$2 per share. Proceeds—For
work¬
ing capital. Underwriter—S. R. Livingstone, Crouse &

Co., Detroit, Mich.

it Dixie Fire & Casualty Co., Greer, S. C.
April 9 (letter of notification) 8,000 shares of common
stock (par $10).
Price—$25 per share. Proceeds—For

working capital.

Underwriter—None.

East Tennessee Natural Gas Co.
March 20 filed $2,144,520 of 5% convertible
debenturesdue May 1, 1968 (convertible into common
stock at rat©
of one share for each $10 of
for

com¬

share). Proceeds
mining operations. Underwriter—R. L. Hughes &
Co., Denver, Colo.

—For

to

up

debentures), being offerecT

Central City
March 4

Cleveland

Inc., Harriman Ripley & Co. Inc., and Stone Ac Webster
Securities Corp. (jointly); Union Securities
Corp.; Kuhn,
Loeb. & Co.;
Kidder, Peabody & Co.; Lehman Brothers
and Glore, Forgan & Co.
(jointly); Merrill Lynch, Pierce,

stock

properties, etc. Office—
c/o Ralph T. Masters, 163 Remsen
St., Brooklyn, N. Y.
Underwriter—Securities National Corp.,
Newark, N. J.

New York.

Underwriter—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co,
Inc.; Blyth & Co.,

to finance

.

stock

Price—At par (in denominations of $1,000
each. Proceeds—To repay short-term notes and for work¬
ing capital. Underwriters—A. M. Law & Co., Spartan¬

• Central Power & Light Co. (5/15)
>
April 20 filed $8,000,000 first mortgage bonds, series: E,
due May 1, 1983. Proceeds—For construction
program.

of

25,000 shares of

share). Proceeds—To Halvor Rolfsrud, the selling stock¬
holder. Underwriter—Jamieson & Co., Minneapolis, Minn.

^American Discount Co. of Georgia (5/6)
April 16 filed $2,000,000 of 5.90% capital debentures due

REVISED ~

per share). Proceeds — To E. Carey, Jr., and W. D. P.
Carey, the two selling stockholders. Underwriters—Bosworth, Sullivan & Co., Denver; Colo.

to retire

Baukol-Noonan, Inc., Noonan, N. D.
March
mon

in Canada. State¬

April 20.

■

it Aviation Equipment Corp., Wilmington, Del.
April 17 filed $1,000,000 of 6% subordinated debentures
due 1964; 8,000 shares of 6% preferred stock (par $50);
and depositary receipts representing 8,000 shares of com¬
mon stock
(par $1) to be offered in units of a $1,000
debenture, eight shares of preferred stock and depositary
receipts representing eight shares of common stock. Price
—To be supplied by amendment. Proceeds—From sale
of securities, together with $4,000,000 to be borrowed
from bank, to acquire airplanes and equipment and for
working capital. Underwriter—Union Securities Corp.,

share for each 10 shares

May 15. Price—$33.50 Canadian
dollars. Proceeds—For expansion

on

program.

A. E. Ames &

Atomic Uranium Corp., Denver,

York.

ITEMS

'

ISSUE

Central Fibre Products
Co., Inc., Quincy, III. ;
March 23 (letter of notification)
2,400 shares of common
stock (par $5). Price—At market
(approximately $39.50

Wacker

^-Athabasca Uranium Minesv Ltd.

(5/12)

PREVIOUS

.

March 31 filed $4,000,000 of 5%

and Canadian subsidiaries under

Agricultural Insurance Co.
March 25 filed 100,000 shares of

ADDITIONS

SINCE

lit

subscription by

common stockholders of record
April
of debentures for each five shares of;
stock held: rights expire April 27. Price—Atr

10 at rate of $10
common

principal

amount.

Underwriters

—

Proceeds

White,

Weld

—

For

property

additions.

& Go., New York; F.

S.

Number 5214... The Commercial and Financial Chronicle

Volume 177

Moseley & Co., Boston, Mass.; Equitable Securities Corp.,
Nashville, Tenn. and Elder & Co., Chattanooga, Tenn.
Econo Products Co., Inc.

(1777)

options, and 2,435,583 shares in exchange for oil and ga*
properties and interests therein. Price—At par ($1 per
share). Proceeds—For acquisition of additional proper¬

49

ir Foote Bros. Gear & Machine Corp. (5/11-12)'
April 20 filed 100,000 share? of cumulative convertible
preferred stock (par $15) to be voted upoq by the stock¬
holders on May 4. Price—To be supplied by amendment.

Jan. 8 (letter of notification) 300,000 shares of common

ties and leases.

Underwriter—J. A. Hogle & Co., Sail

stock (par 10

cents). Price—$1 per share. Proceeds—For
expansion and working capital. Office — 17 State St.,

Lake City, Utah.

Offering—No date set.

Underwriter—James T. DeWitt & Co., Inc.,
Washington, L>. C.

March 31 filed 220,000 shares of common stock (par $1)
and $2,000,000 of 6% subordinated income debenture*

capital.

due 1968

★ General Contract Corp., St. Louis, Mo. (5/11)
April 17 filed 500,000 shares of 6% preferred stock (par
$10) to be offered for subscription by common stock¬

New York.

Ekco Oil Co., Philadelphia,

Pa.
(letter of notification) 99,000 shares of common
stock (par one cent). Price—$3 per share. Proceeds—
To acquire leases and drill wells. Underwriter—Hopper,
Soliday & Co., Philadelphia, Pa.
Dec. 4

•

Emerson Electric

Manufacturing Co.

March 18 filed 37,230 shares of common stock

(par $4)

being offered for subscription by stockholders of record
April 16 at rate of one new share for each 12% shares
held (with an oversubscription privilege); rights to ex¬
pire on May 1. Price—$14 per share. Proceeds—For gen¬
eral corporate purposes, including acquisition of certain

Federal Electric Products Co.

Proceeds—To retire presently outstanding 6,500 shares o£
convertible preferred stock (par $10) and for

working

(5/4-7)

(with warrants attached to purchase an addi¬
at prices ranging from $7.50 to
$17.50 per share. Price—For common stocky $7 per share,
and for debentures, at 100% of principal amount. Pro¬
ceeds—To repay loans. Business—Manufacture of devicei
tional

120,000 shares

for control of low voltage electrical energy. Underwrite*
—H. M. Byllesby & Co., Inc., Chicago, 111.

holders at rate of one share for each 3.3
held.

9

Price—At market.

Proceeds

For investment.

—

common

sharesi

Unsubscribed shares to be offered in exchange for

share).

Proceeds—To redeem series A preferred
outstanding, to repay loans and for working capi¬
Underwriter—G. H. Walker & Co., New York and
St. Louis.

Springfield Corp., Springfield, Mass.
20,000 shares of capital stock (par $10).

shares

filed

writer—D. J. St. Germain &

Chicago^

series A preferred stock (with a cash adjustment). Price
—To be supplied by amendment (probably around
$11
per

First
Feb.

Underwriter—A. G. Allyn & Co., Inc.,

111*.

tal.

Under¬

Co., Springfield, Mass.

Grand Bahama Co.,

Tool Co. Underwriter—

Ltd., Nassau

None.

English Oil Co., Salt Lake City, Utah
Jan. 5 filed 3,435,583 shares of common stock, of which
750,000 shares are to be offered publicly, 250,000 share*
are to be reserved for officers and key employees and

Feb. 3 filed $1,350,000 20-year 6% first mortgage conver¬
tible debentures due March, 1973, and 1,565,000 sharesi

cents). Price—$2 per share. Proceeds—For development

assets of United States Electric

Flock Gas & Oil Corp., Ltd., Calgary, Can. (4/27)
March 19 filed 800,000 shares of common stock (par 2C

of class A stock

of

tures and $1

held by it, for acquiring and holding
reservations and leases or participating therein, for ex¬
ploration and drilling expenses, etc. Underwriter—Petei
Morgan & Co., New York.
properties

now

per

(par 10 cents). Price—Par for deben¬
share for stock. Proceeds —For new

construction. Business

Hotel and land

—

development

Underwriter—Gearhart & Otis, Inc., New York.
Greenfield Tap & Die Corp., Greenfield, Mass.
March 30 (letter of notification) 4,000 shares of common*
stock (no

par). Price—At market (approximately $23.50
per share). Proceeds—To Donald G. Millar. Underwrites1
—Tucker, Anthony & Co., Boston* Mass.

NEW ISSUE CALENDAR

H & B American Machine

Chicago

May 7, 1953

April 23, 1953
Western Ry

Great

(Bids

1

Seaboard

Bonds

fProbably First Boston Corp. and

(Offering

E.

A.

Ames &

&

Ltd.*

-

--Common

I.

(E.

Columbia

Co.)

Gas

New

(Edward

(R.

D.

&

Jones

Klein

V.

(Offering

& Co.i

Mechanical Handling Systems, Inc
(Kidder,

Peabody

&

March 2 filed

Debentures

Becker

&

Co.,

offered to

Inc.)

rate of

Preferred

common stockholders—underwritten
The First Boston Corp.)

to

(Bids

Co.)

by

loans. Underwriter—None.

Detroit Edison Co.__

Bond*

(Bids

Petroleums

(White,

Weld

&

11

Common

and Wood,

Schlafly Nolan Oil Co., Inc.__
(L.

H.

Rothchild

Republic

G.

Phillips

Sunray Oil Corp

Preferred

Debentures

& Co.)

&

&

Central Power

(Bids

Bonds

CDT)

noon

April 29, 1953

Texas Power & Light Co

Common
underwriting)

Co.

.Common

G. Becker

&

Anne's

St.

'Pills.

Oil

F8irman

(Bids

Co., Inc.)

Common
.Common

...

Co.

and

H.

M.

(Bids

Equip. Trust Ctts.

May 4, 1953
Federal Electric Products Co
(H.

Hickok

M.

(Bids

Government
1

...Debenture®

(Offering

Texas Utilities

Califoifria-Pacific Utilities Co
(First

California

Montana-Dakota Utilities Co.,

.Common

.

(Blyth & Co.,
be

Co.

& Webster Securities Corp.

Union Tank

(Smith,

11

a.m.

&

June

Gulf Power Co.—

..Common

New England

Bonds

(Offering

CDT)

New York

and

The

&

Co.;

First




Preferred
Blyth

Boston

& Co.,
Corp.)

to

stockholders—bids

Inc.;

and

to

$10)

to

be

11

.—Common
be

invited)

.Bonds
Invited)

of

record

phone & Telegraph Co. and Chesapeake & Potomac Triephone Co. of Virginia, own, respectively, 32.8% gnd
12.2% of the presently outstanding common stock ©8
Inter-Mountain); rights expire on April 28. Price—$1©
per share. Proceeds—To reduce short-term notes. Under¬
writer—For 78,336 shares—Courts & Co., Atlanta, Gau*
and New York, N. Y.
5

IMn
notification) 61,960 shares of class A
common stock (par $1).
Price—$1.37% per share. Pw*
ceeds—For working capital. Office—10 Light St., Baltic
more 2, Md.
Underwriter—None.
International Glass Fibres Corp., Baltimore,

March 6 (letter of

Bloomington, 8KW
capital stock (par $1®>
to be offered for subscription by stockholders of record
April 1 at the rate of 1 3/11 shares for each share held.
Price—$16.50 per share. Proceeds—To increase capital
and surplus. Underwriter—None.
Interstate Fire & Casualty Co.,

Ispetrol Corp., New York'
of common stock. Price—A®

Oct. 29 filed 49,500 shares

Bonds

ajn.

142,500 shares of common stock-vottoiJ

being offered

March 26 filed 28,000 shares of

1953

Telephone Co

(Eids

Common

Long Island Lighting Co
Langley

Bond*
EDT)

Pennsylvania Electric Co
EDT)

purchase ©E

($100 per share). Proceeds—To finance
crude oil for Israeli enterprises and to purchase

par

products for resale in Israel.
Israel Securities Corp., New York.

oil and oil

Aug. 3, 1953

(Baker, S'monds & Co.)
C.

a.m.

June 10, 1953
Electric System—

iBids

-Debentures

M. Law & Co.; Johnson, Lane, Space & Co.;
Interstate Securities Corp.)

(W.

11

June 23,

Copeland Refrigeration Corp

..

Common

invited)

———

(Bids

May 6, 1953

„

9, 1953

(Bids to be

Co.)

American Discount Co. of Georgia
(A.

.Common

American Gas & Electric Co

Service Corn..
(Bids

*

stockholders—no underwriting)

to

Debs.

Debentures
Barney

Common

and White, Weld & Co.)

Car Co.

Wisconsin Public

1'953

Co—

...Common

invited)

Tennessee Gas Transmission
(Stone

(Offering

Inc.)

Southern Bell Telephone & Telegraph Co
'Bids to

—Common

June 4,1953
General Public Utilities Corp

(Offering to stockholders—underwritten by Blyth & Co., Inc.
and Merrill Lynch, Pierce, Fenner & Beane)

Northern Natural Gas Co

.Debenture*
EDT)

(Bids to be Invited)

Inc.)

,

for subscription by common
March 30 at rate of one new
share for each three shares held. (Southern Bell Trio(par

Co.)

stockholders—no underwriting)

to

Preferred

Co.,

11:30 a.m.

June 2,

>.May.5, 1953
;

Spiess &

Employees Corp—*

(Bids 11:30 a.m. EDT)

*

Inter-Mountain Telephone Co,
March 20 filed

—Common

Consolidated Natural Gas Co,

Debentures

Montana Power Co.—
^

Bonds

EDT)

May 26, 1953

.Debs. & Common

Byllesby & Co., Inc.)

(George D. B. Bonbright & Co.)

;

noon

W.

Underwriter—Barrett Herrick Ai

^ Insurance Co. of North America, Phila., Pa.
April 16 filed 30,000 shares of capital stock (par $5) t©
be offered for sale to employees of company and five*
affiliated companies. Underwriter—None.

^

stockholders

Manufacturing Co., Inc

;

invited)

Shield Chemical Corp
(Peter

capital.

$6.50 per shares

.—Bonds

May 25, 1953

EDT)

noon

Bonds
EDT)

a.m.

to be

(Bids

Byllesby A Co.. Inc.)

St. Louis-San Francisco Ry._

Bonds

May 20, 1953
Philadelphia Electric Co.—

EDT)

p.m.

Co
&

11

outstanding

working

—

of RFC loan ($192,311);;
preferred stock ($86,341)* arid

balance

Inspiration Lead Co., Inc., Wallace, Ida.
f
Jan. 26 (letter of notification) 2,000,000 shares of cgsxh'*.
mon stock.
Price—15 cents per share.
Proceeds—FGfc
mining expenses. Office—507 Bank St., Wallace, Idsu
Underwriter—Mine Financing, Inc., Wallace, Ida.

EDT)

a.m.

Southern Natural Gas Co

Common

—

(Bids 2

11

(Bids

EDT)

Mansfield Tire & Rubber Co
(A.

(Bids

held. Price

stock

repay

Co., Inc., New York.

Electric Co

Pacific Gas &

Common

:

for

a.m. EDT)

May 19, 1953
Metropolitan Edison Co.

(Offering; to stockholders—underwriter to be named)

National Ceramic Co

redeem

to

Bonds & Preferred

(Bids 11:30

April 30, 1953

p.m.

.—Debentures

(Bids to be Invited)

Mount Holly Water Co._

(Bids 3

common

Proceeds—To

Southern Natural Gas Co

Jasco, Inc.

per

Independent Plow, Inc., Neodesha, Kan.
shares of participating convertible
A stock (par $5), to be offered for subscription*
by common and preferred stockholders at rate of one
share of class A stock for each 3% shares of preferred

May 18, 1953

(Bids 10:30 a.m. CDT)

Central Foundry

Price—$1

Feb. 26 filed 100,000

and/or

Preferred

stockholders—no

cents).

broker.

Co.)

May 15, 1953
& Light Co

Common

Wisconsin Public Service Corp

to

10

class

(Offering to stockholders—underwritten by The First
Boston Corp. and Johnston, Lemon & Co.)

(Oflering

Common

Common

Dillon

(par

Co.)

—

(Eastman,

•

share. Pro¬
the selRng
stockholders. Underwriter—None, but Thomas M. Sterl¬
ing of Watt & Watt, Toronto, Ont., Canada, will act as

Inc.)

Co.,

Gas Light Co

Washington

(B.

Co.)

stock

mon

Peruvian Oil Concessions Co., Inc

Common
&

Southwestern States Telephone Co.'Central

(Kidder, Peabody

Gundy & Co., Ltd)

.

ceeds—To Orrin W. Fox and Richard L. Fox,

May 14, 1953
Menabi Exploration Co., Inc

EDT)

a.m.

Ltd—

Co.;

*

Hycon Mfg. Co., Washington, D. C.
March 17 (letter of notification) 100,000 shares of cam-*

.

Merrill

•

v

EDT)

noon

(Bids to be Invited)

v

stockholders of record March 10

share for each three shares held; then ix»

—

Reading Co. —Equip. Trust Ctfs.

April 28, 1953

common

one new

Preferred

Philadelphia Electric Co

Common

Co., Hilo, Hawaii
25,000 shares of common stock being firsL

employees; any unsubscribed shares to be offered to*
public. Subscription rights will expire on April 27. Prit*>
At par ($20 per share). Proceeds — To repay bank:

May 13, 1953

Common

—

Hilo Electric Light

Bonds

EST)

noon

Lone Star Gas Co

Co.)

(Peter Morgan

,

G.

(A.

Common

Flock Gas & Oil Corp., Ltd

Common

EDT)

a.m.

Woodley Petroleum Co—

Co.)

.Common
&

11

(Bids

Co.)

Consolidated Gas Co
(Courts

EDT)

a.m.

Orleans Public Service Inc.—

Preferred

Computer Manufacturing Corp

it Hickok Manufacturing Co., Inc. (5/4)
April 20 (letter of notification) $100,000 of 6% subordi¬
nated debentures due April 1, 1973. Price—At $80 per
$100 unit (plus accrued interest). Proceeds—To the un¬
derwriter for its own account. Underwriter—George D.
B. Bonbright & Co., Rochester, N. Y.

Bonds
11

System, Inc....
(Bids

April 27, 1953
Arkansas-Missouri Power Co

Preferred
Co.)

Co._

Power

(Bids

Common

Shelley

-Preferred

Inc.)

Co.,

May 12, 1953
Alabama

and

Western Safflower Corp.—

&

Walker &

H.

(G.

McDowell;

Co.; Straus, Blosser &
McCormick & Co.)

Allyn

General Contract Corp._

underwriting)
-

C.

(A.

Common

Maremont Automotive Products, Inc.(Hallgarten

Co.,

Power Co.
stockholders—no

to

(par 25 cents). Price—At market (esthpated a8
$2.50 per share). Proceeds—To five selling stockholders-* i
Office—122 South Michigan Ave., Chicago, 111. .Under-^A
writers—May & Gannon, Boston, Mass.; and Walston Be
Co., San Francisco, Calif.
♦
•

Corp.)

Foote Bros. Gear & Machine Corp

Common

__

Arkansas-Missouri

Boston

stock

May 11, 1953

April 24, 1953
Aluminium Ltd.

Preferred

First

(The

EST)

p.m.

Co., Chicago, III.

March 27 (letter of notification) 30,000 shares of conunorx

Co.

Finance

Denver & Rio Grande Western

crud©
Underwriter-

'

.

RR.

—

(Bids to be

Equip. Trust Ctfs.
invited)

Continued

on page

50

50

The Commercial and Financial Chronicle

(1778)

Continued jrom page

Mex-American Minerals Corp.,

49

Israel Overseas Corp.

stock

of New York

capital stock par $1 and
$3,400,000 of 20-year debentures to be offered m units
of eight shares of stock and $1,700 principal amount of
debentures. Price—$2,500 per unit Proceeds—For gen¬
eral corporate purposes.
Underwriter—None.
Feb.

17

16,000 shares of

filed

New Orleans, La.
March 2 (letter of notification) 1,700 shares of common
stock (par $1). Price—At market (approx. $21.37Vz per
share). Proceeds—To F. Lloyd Monroe, the selling stock¬
holder. Underwriter — None, but James E. Bennett &

10

class of stock.

and

Proceeds—For

interest.

accrued

general

corporate

Underwriter—Wachob-Bender Corp., Omaha,

Nebraska.

• Lone Star Gas Co. (5/13)
April 22 filed 183,300 shares of cumulative convertible
preferred stock to be offered to common stockholders
of record May 13 at the rate of one preferred share for
each 30 shares of common stock held.
Price—At par

($100

Proceeds—For working capital and
improvements to property. Under¬
writer—The First Boston Corp., New York. /
for

share).

per

additions

and

per

fo

Mid American Oil & Gas

Underwriter—Greenfield & Co., Inc., New

share).

per

Long Island Lighting Co.

April

filed

6

100,000

stock, series C
amendment.

(par $100).

Proceeds

construction.

new

(5/6-7)
of cumulative

shares
—

Price

To

—

preferred
To be supplied by

bank loans and for

repay

Underwriters—W. C. Langley &

Co.,

Blyth & Co., Inc. and The First Boston Corp.
Lorillard

(P.)

Co.

14

basis

on

of

one

share

new

for

each

seven

shares held; rights to expire April 28. Price—$23.25 per
share. Proceeds—To reduce bank loans. Underwriters—
Lehman

Brothers

and

Smith,

Barney

&

Co.,

both of

New York.
•

Mansfield Tire & Rubber Co.

April 10 filed 200,000 shares of
Price

—

To

be

stock, (par $5).

supplied by amehdmCiff. Prtffceeds

General Tire & Rubber Co. Underwriter—A.
& Co., Inc., Chicago, 111.

—

To

G. Becker

Marathon Corp., Menasha, Wis.
March 20 filed 614,872 shares of common stock
(par
$6.25) to be offered in exchange for stock of Northern

Paper Mills
Northern

on

the basis of six shares for each share of
stock and five shares for each share

common

of Northern preferred stock.

Refining Co.

(letter of notification) 400,000 shares of common

(par five cents). Price—60 cents per share. Pro¬

acquire additional properties. Office—927-929

ceeds—To

Market St., Wilmington,

Del. Underwriter—W. C. DoebCity, N. J.

ler Co., Jersey

Utilities, Inc.

March 20 filed 475,000 shares of common stock

being offered for subscription by
of record April

(no par)
stockholders

common

8 at rate of one new share for each 14

shares held

(with an oversubscription privilege); rights
expire April 28. Price—$23.25 per share. Proceeds—

to

For investment in the

stocks of its System op¬

common

erating companies and to

all

repay

portion of

or a

Underwriter—None.

writer—None.
•

Utilities

Montana-Dakota

Co.

April 15 filed 293,108 shares of common stock (par $5)
be offered for subscription by common stockholders
basis of

on

one

share for each five shares

new

held

on

about May 5.

Price—To be in relation to market price
shortly before the offering. Proceeds—To repay $5,250,short-term loans and for

000

writer—Blyth
Fenner
•

&

Inc.

Co.

Power

filed

Lynch,

Pierce,

be determined by
Probable bidders: Halsey, Stuart
Inc.; Smith, Barney 8c Co., Blyth & Co., Inc. and
Lee Higginson Corp. (jointly); Lehman Brothers; Union
Securities Corp/Bids—To be received up to noon. (EDT)
on May 4 at Two Rector St., New York, N. Y.

competitive
&

Underwriters—To

construction.

new

bidding.

Co.

stock
mon

common

(no par) to be offered for subscription by com¬
stockholders of record April 29 at rate of one new

share

for

each

held

share

(with

oversubscription

"an

privilege); rights to expire May 29. Price—$22 per share.
Proceeds—To repay bank loans, etc. and for capital ad¬
ditions. Underwriter—None.
States Tel.

Mountain
March

6 filed

fered for

& Tel. Co.

390,931 shares of

subscription by

27 at rate of one

new

share for each four shares

tions and

National Marine Terminal, Inc., San Diego, Calif.
March 10 (letter of notification) 30,000 shares of 6%

cents).

Price—$2

per

share.

exploratory wells, acquisition of leases

(par 25

drilling of

and for general

corporate purposes. Underwriter—B. V. Christie &
Co.,

Houston, Tex. Dealer

Relations

A.

Representative—George

Searight, 50 Broadway, New York, N. Y. Telephone
WHitehall 3-2181. Offering—Date indefinite.

McQuay, Inc., Minneapolis, Minn.
(letter of notification) $200,000 of 5V2% de¬
bentures due April 1, 1978, and 10,000 shares of common
stock (par $1) to be offered in units of one
$500 deben¬
ture and 25 shares of stock.

Price—$600 per unit. Pro¬
Office—1600 Broadway, N. E.,
Underwriter—None.

ceeds—To enlarge plant.

•

Mechanical Handling Systems, Inc.
(4/27-30)
March 31 filed 120,000 shares of common
stock (par $1).
Price—To be supplied by amendment. Proceeds—To
chase

pur¬

common

stock of The Louden

ness—Manufacture

and

sale

of

Machinery Co. Busi¬

conveyors

in

industrial

and commercial
applications.

Office—Detroit, Mich.
derwriter—Kidder, Peabody & Co., New York.
Merrill Petroleums
Ltd., Alberta, Canada
March 31 filed 1,000,000 shares of
common

Un¬

(4/28)

stock

(par

$1), of which 400,000 shares are to be offered in the
United States and 600,000 shares in
Canada. Price—To
by amendment. Proceeds—For drilling and
exploration activities.
Underwriters—White, Weld & Co.,
New York; and
Wood, Gundy & Co., Ltd., Toronto, Ont.,
Canada.
be supplied

Metropolitan Edison Co., Reading, Pa.

April

15

filed

$8,000,000 of

first

mortgage

bidders:
and

competitive

Halsey, Stuart & Co.
Salomon Bros. & Hutzler

bidding.

due

Probable

Inc.; Kuhn, Loeb & Co.

(jointly); White, Weld &
Co.; The First Boston Corp.; Kidder,
Peabody & Co. and
(jointly); Harriman Ripley & Co., Inc. and
Union Securities Corp.
(jointly); Blyth & Co., Inc. Bids—
Tentatively scheduled to be received up to 11 a.m. (EDT)
Drexel & Co

on

May 19.




($100

par

(parent)

owns

now

shares

1,351,203

per

share). Proceeds—For property addi¬

improvements. Underwriter—None.

preferred stock. Price—At par ($10 per share). Proceeds
—For general corporate purposes. Office—U. S. National
Bldg., San Diego

1, Calif.

Underwriter—Wahler,

White & Co., Kansas City, Mo., and associates.

• New England Electric System (6/10)
April 22 filed 828,516 additional shares of common stock
(par $1) to be offered for subscription by common stock¬
holders of record June 10

on

for each 10 shares held

(with

lege); rights to expire

on

expected to be mailed

by

or
on

the basis of

one

new

share

oversubscription privi¬
about June 25. Warrants
June 11. Price—To be set
an

on June 8.
Proceeds—For expansion pro¬
Underwriters—To be determined by competitive
bidding. Probable bidders: Blyth & Co., Inc., Lehman

company

gram.

Brothers and
Bear, Stearns & Co. (jointly); Merrill
Lynch. Pierce, Fenner & Beane, Kidder, Peabody & Co.
and White, Weld & Co. (jointly).
Bids—To be received
on

June 10.

S.

be revised.

.

at

rate

(with

expire

of

one

share

new

oversubscription
5.
Price—$24.50

an

for

each

privilege)!

May
per
share.
Proceeds
For construction
program.
Underwriter —
Merrill Lynch, Pierce, Fenner &
Beane, New York.
on

12

filed

Public

Service

$6,000,000

Inc.

bonds

due

bidders:

Halsey, Stuart & Co. Inc.; Lehman Brothers;
Kidder, Peabody 8c Co. and Stone & Webster Securities
Corp. (jointly); Equitable Securities Corp.; Union Secu¬
rities Corp.
Bids—To be received up to noon (EST) on
May 12, at Two Rector St., New York 6, N. Y.
North American Peat Moss
Co., Inc. (N. Y.)
April 10 filed 500,000 shares of common stock (par 10
cents). Price — $1 per share. Proceeds
To purchase
equipment and for working capital. Underwriter—R. A.
Keppler & Co., Inc., New York.
—

Natural

Gas

Co.

April 15 filed 598,100 shares of

new

stock

stockholders of record May 5

share for each five

shares held

on

(with

(par $10),

subscription
basis of one
an

oversub¬

scription privilege).

Unsubscribed shares

fered

Price—To be supplied by amend¬

ment..

to

short term loans and for
—1TcF be

construction.

new

Underwriters

determined

by competitive bidding. Probable
Halsey, Stuart & Co. Inc.; Blyth & Co., Inc.;
First Boston Corp. Bids—Tentatively scheduled to

bidcFers:

The

be received up to 11 a.m.
Economic

(EDT)

on

May 19.

Corp., New York

March 6 filed 100,000 shares of

Price—$28

common

stock

(par $25).

share. Proceeds — For development of
industry, etc., and for working capital. Under¬

Israel

per

writer—None.
Paradise Valley Oil

Aug.

20 filed

Co., Reno, Nev.
3,000,000 shares of capital stock/Price—

At per (10 cents per share).

Proceeds—To drill six wells

subleased land and for other corporate purposes. Un¬

(selling

commission

is

two

a

on

commission

share). Office-r-c/o Nevada Agency & Trust Co., Inc., Cheney Bldg.
139
Virginia St., Reno, Nev.
cents

per

Pennant Drilling Co., Inc., Denver, Colo.
Marfeh 23 (letter of notification) 42,507 shares of common
(par $1). Price—$1.30 per share. Proceeds—To
MorMs Repiin, the selling stockholder.
Underwriter—
Peters, Writer & Christensen, Inc., Denver, Colo.

stock

Peruvian Oil Concessions Co., Inc. (5/14-20)
16 filed 9,000,000 shares of common stock (par $1)

Jam

(expected to be amended about April 23 or 24 to 1,000;OOO^shares). Price—$2 per'share. Proceeds—For general!
corporate purposes. Business—Plans to produce* and sell
petroleum and its products from lands to be held under
concession from the Peruvian Government. Underwriter
—B? G. Phillips & Co., New York, for 1,000,000 shares.

April

Mining Co.

13

Cletter

of

Price—At

stock.

notification) 400 shares of capital
($250 per share). Proceeds—For

par

ejfaipiTient and expenses. Underwriter—None.
^Philadelphia Electric Co. (5/13)

Ajril 10 filed 150,000 shares of cumulative preferred
stfeck" (par $100). Proceeds—For new construction and to

r®ay

bank loans. Underwriter—To be determined by
c<Mipetitive bidding. Probable bidders: Morgan. Stanley-

&|Co.; W. C. Langley

& Co. and Glore, Forgan & Co/;

(jointly); The First Boston Corp.; Union Securities Corp.
Bi||s—Tentatively scheduled to be received up to noon
(E||T) on May 13 at 900 Sansom St., Philadelphia, Pa.
★

iphtladelphia Electric Co.

(5/20)

"

Ap^ll 10 filed $30,000,000 of first and refunding mortgage

boptds due

1983. Proceeds—To repay bank loans and- for

nd$fe construction. Underwriters—May be determined by
competitive bidding. Probable bidders: Halsey. Stuart 8c
CoJ&nc.; Drexel & Co. and Morgan Stanley & Co. (joint¬
ly fe, Kuhn,

(jofntly);

Loeb

Co.

8c

and

Union

Securities

Corp.

White, Weld & Co.; The First Boston Corp.

Bids—Tentatively scheduled to be received up to noon
(E£}T) on May 20 at 900 Sansom St., Philadelphia, Pa.

{Philadelphia Electric Co. (6/2)
Ap£il 10 filed 100,000 shares of
to

common stock (no par)
by employees of company

|>e offered for subscription

an&

subsidiaries.

its

Price—From

85%

to

95%

the

of

employees.

are

to

be

of¬

Proceeds—From sale of stock, together with pro¬

sale in

Phillips Packing Co., Inc.
/
Fe&%2 (letter of notification) 3,000 shares of common
stotk (no par).
Price—At market (approximately $6
■

pen

Proceeds—To Theodore Phillips, the selling

share).

stockholder.
more, Md.
★

Underwriter—Alex. Brown & Sons, Balti¬

'

v

jplume & Atwood Manufacturing Co.,

|: Waterbury, Conn.
April 2

stcljk

(letter of notification)

13,500 shares of common

(no par) being offered for subscription by sto:k-

ho^lers

of record April 17 at rate of

fort* each

shares

four

Prfee—$16

share.

per

an<jr equipment.

(5/5)
common

of which 548,100 shares are to be offered for
common

★ Pacific Gas & Electric Co. (5/19)
April 21 filed $65,000,000 of first and refunding mortgage
bonds, series V, due June 1, 1984. Proceeds — To retire

program. Underwriter—None.

(5/12)

of first mortgage

1983. Proceeds—For construction program. Underwriters
—To be determined by competitive
bidding. Probable

by

★ Ores, Inc., New Plymouth, Idaho
April 13 (letter of notification) 60,000 shares of common
Price—At par
($1 per share).
Proceeds—For
equipment. Underwriter—None.
stock".

th^t current market price. Proceeds—For construction

New Orleans

March

Northern

(5/19)
bonds

1983. Proceeds—For construction
program. Underwriters
be determined by

—To

Co.

(86.41%) of presently outstanding capital stock. Price—
At

are

March 25

Minneapolis, Minn.

Telegraph

Bank
common stock

Proceeds—For

16

held

to

★!5Pess'n

stock being of¬
stockholders of record

common

common

ital.

McCarthy (Glenn), Inc.

April

shares

rights

basis

be supplied

June 12 filed 10,000,000 shares of

record

derwriter—None, with sales to be made

sinking fund debentures due
$12,000,000 bank loans and for

held; rights to expire April 29. American Telephone. &

by amendment. Proceeds—For working cap¬
Co., New York; and
Straus, Blosser & McDowell and McCormick & Co., both
of Chicago, 111.

Underwriter—M.
may

Oklahoma Gas & Electric Co.

on

(5/4)

$18,000,000

Proceeds—To repay

1978.

Merrill

and

Under¬

Beane, both of New York.

Montana

2

Co.,

&

construction.

new

Maremont Automotive
Products, Inc. (4/24)
March 30 filed 230,000 shares of common stock
(par $1),
of which 20,000 shares are to be issued
by the company
and balance by certain
selling stockholders. Price—To

Underwriters—Hallgarten &

wells.

Financing

March 19 filed 241,195 shares of common stock
(par $10)
being offered for subscription by common stockholders

Intestine

(5/5)

to

March

•

sums

which have been borrowed for such investment. Under¬

Mount Holly (N.J.) Water Co. (4/29)
April 14 (letter of notification) 5,000 shares of

(4/30-5/1)

common

Proceeds—For drilling of additional wells

—

stock

April

March 25 filed 356,573 shares of common stock (par $10)
being offered for subscription by stockholders of record

April

"•

of

York.
&

subscription warrants for 40 shares. Price—

unit.

purchase producing

Gerber, Inc., New York.

Co., Chicago, III.

April 7 (letter of notification) 275,000 shares of common
stock (par 10 cents). Price—At market (12 to 16 cents

or

•

filed

of stock and

and

-

Middle South

Liberty Fabrics of New York, Inc.
(letter of notification) 1,356 shares of 5% cu¬
mulative preferred stock (par ($10). Price — At market
(about $6.60 per share). Proceeds—To Maurice Goodman,
Vice-President. Underwriter—None, but Dreyfus & Co.,
New York, will act as broker.
March 24

21

amendment.

Nov. 10

$206,000 of 4V2% first
mortgage bonds, series A, due Feb. 1, 1977. Price—100%
purposes.

Ltd., Canada
1,000,000 shares of capital stock (par 200
Canadian)
and
subscription warrants for 600,000
shares, of which the stock and subscription warrants for
400,000 shares are to be offered in units of 100 shares

10

Telephone Co.

(Kan.)

Northlands Oils

Nov.

$52

Mid-Gulf Oil

(letter of notification)

3

Proceeds—For work¬

Price—$6 per unit.

Thursday, April 23, 1953

—

ing capital. Business—Purchase, processing, refining and
of Fluorspar. Underwriter — To be supplied by

sale

Co., Chicago and New York, will act as agent.
Junction City

(par $5) and 113,000 shares of common stock (pai
to be offered in units of one share of each

cents)

Jefferson Lake Sulphur Co.,

March

Granite City, III.

113,000 shares of 6% cumulative preferred

filed

Nov. 3

...

one new share
held; rights to expire May 15.
Proceeds—For plant expansion

Office—470 Bank St., Waterbury, Conn.

Underwriter—None.
★ Reedsville

Supply

Co.,

Reedsville,

Ohio

Apfcll 13 (letter of notification) 3,200 shares of

common

stop: (no par) to be offered for subscription by present
stockholders.

infficapital.

Price—$10 per share. Proceeds—For workUnderwriter—None.
,

,

June

of

$40,000,000 of debentures, to be
used to repay bank loans and for construction program.

Match 6 (letter of notification) 724,687 shares of common

Underwriter—Blyth

&

stock (par

posed

Francisco.

Co.,

Inc.,

New

York

and

San

Resort Airlines, Inc., Miami, Fla.
10 cents)

stockholders

on

a

to be offered for subscription by
rata basis. Price—20 cents per

pro

Number 5214

Volume 177

The Commercial and Financial Chronicle

242, International Airport, Miami 48, Fla.

Under flatter

•

Schlafly Nolan Oil Co., Inc. (4/28)
March 25 filed 150,000 shares of common stock (par 25

and

cents). Price—$4 per share. Proceeds—To purchase

for oil

prospect

and to develop and operate
Office—Mt. Vernon, 111. Under¬

and

gas

properties.

producing

properties, to

royalties and producing

leaseholdes,

writer—L. H. Rothchild & Co., New

York.

27

N. C.
$150,000 of 6% con¬
due 1968 (convertible at

of notification)

(letter

interest debentures
time at rate of 500 shares of common stock for each
$1,000 debenture); and 150,000 shares of common stock

tingent

Transmission

mile crude oil

stock (par $5).

Co. and Union Securities Corp., both of New

supplied by amendment. Proceeds—To

chase up to 375,000 shares

25% stock interest.

a

derwriters—Stone & Webster Securities Corp. and
Weld & Co., both of New York.
•

pur¬

of capital stock of American

Republics Corp., constituting

Un¬

White,

Texas Oil

Dec.

Exploration Co., Ft. Worth, Tex.
(letter of notification) 1,200,000 shares of

5

com¬

stock (par 10 cents). Price—55 cents per share. Pro¬
ceeds—To drill oil and gas wells and for acquisition of

any

properties.

Underwriter—None.

Texas-Oklahoma Oil & Gas, Inc.
mon

to be offered

land

York, and Stein Bros. & Boyce, Baltimore, Md.

ceeds—To

it Seaboard Finance Co. (5/7)
April 17 filed 50,000 shares of sinking fund preferred
stock (no par—stated value $100 per share).
Price—
To

be

supplied

Proceeds—To

amendment.

by

reduce

Underwriter—The First Boston Corp., New

bank loans.

by the company and 200,000 shares by BoWright Williams. Price — 25 cents per share. Pro¬
develop

tional Bank

properties.

Office—1605

Bldg., Dallas, Tex.

First

Na¬

Underwriter—None.

Proceeds—To reduce bank loans and for

Underwriters—To

be

construc¬

new

determined

by competitive
Stuart & Co. Inc.;

York.

bidding. Probable

Security Oil Co., Denver, Colo.
March 5 (letter of notification) $250,000 of series A 1953,
five-year 10% debenture bonds. Price—At par (in de¬
nominations of $25 and multiples thereof). Proceeds—To
drill wells.
Office—501 Empire Bldg.,
Denver, Colo.

Kuhn, Loeb & Co., Blyth & Co., Inc., Kidder, Peabody

Underwriter—Underwriters, Inc., Denver, Colo.

& Hutzler.

'

*

&

White, Weld

Express Corp.

Union

Precision Corp.

of notification) 18,000 shares of common

March 13 (letter

stock

Price—At market (approximately

(par 40 cents).

share). Proceeds — To Sembodja Corp. of New
York, 50 Broadway, New York 4, N. Y. Office—Chau¬
$1

per

Underwriter—None.

tauqua County, N. Y.

•

Telephone & Telegraph Co.

Bell

Southern

Southern Co.

March 13 filed

1,004,869 shares, of common stock (par $5)

being offered to common stockholders of record April 16
on the basis of one new share for
each 17 shares held
(with

an

Proceeds—To

share.

subsidiaries.

in

investments
Boston

per

Underwriter

—

increase

The

First

it Southern Natural Gas Co. (5/18)
:
April 20 filed $34,220,100 of convertible sinking fund
debentures due 1973 to be offered for subscription by
stockholders of record May 20 at rate of $100 of
for each

debentures

expire
for

June 8.

on

10 shares of stock

held;

rights to

Proceeds—To repay bank loans and
Underwriters—To be determined

construction.

new

Safflower Corp.

Western

(4/24)

(par 25 cents). Price—$1.25 per share. Proceeds—
plant. Office—First National Bank Bldg.,

construct

To

Springs, Colo.'Underwriter—E. I. Shelley Co.,

Colorado

Denver, Colo.
Wisconsin Public Service Corp.

(4/28)

shares of cumulative preferred
(par $100). Proceeds—For new construction. Un¬
derwriters—To be determined by competitive bidding.
Probable bidders: The First Boston Corp.; Merrill Lynch,

March

30

filed

30,000

Pierce, Fenner & Beane; Kuhn, Loeb & Co. and A. C.
Allyn & Co., Inc. (jointly). Bids—To be received up to
10:30 a.m. (CDT) on April 28 at 231 So. La Salle St.,
Chicago 4, 111.
Service

Public

Wisconsin

Corp.

(5/5)

mortgage bonds due May 1,
Proceeds—To repay $6,300,000 bank loans and for
construction. Underwriters—To be determined by

1983.
new

competitive bidding. Probable bidders:

Halsey, Stuart &

Inc.; The First Boston Corp.; Union Securities Corp.;
Kidder, Peabody & Co.; Merrill Lynch, Pierce, Fenner
& Beane and Salomon Bros. & Hutzler (jointly); Harris,
Co.

improvements. Underwriter — May be
by competitive bidding. Probable bidders:

Securities

•

March 30 filed $8,000,000 first

Hall &

Co.

(Inc.); Carl M. Loeb, Rhoades & Co.

Scheduled to be received up to 11
at 231 So. La Salle

a.m.

Bids—

(CDT) on May 5

St., Chicago 4, 111.

it Woodley Petroleum Co., Houston, Tex. (5/12)
April 21 filed $2,500,000 of sinking fund debentures due
1968 and 50,000 shares of cumulative convertible pre¬

Bids—To be received up to 11:30 a.m.
at Two Rector St., New York, N. Y.

ment.

Kidder,

Corp.,

&

Peabody

(EDT)

on

May 18,

ferred stock (par

company's

Oil Co., Inc., Houston, Tex.
(letter of notification) 250,000 shares of capital
stock (par 10 cents). Price—$1 per share. Proceeds—To
drill wells.
Office
116A City National Bank Bldg.,
Houston, Texas. Underwriter — Walter Aronheim, 82

$50). Price—To be supplied by amend¬
applied to the activities of the

Proceeds—To be

Becker &

Canadian subsidiary
Co., Inc., Chicago, 111.

Underwriter

—

A.

G.

March 24

—

Beaver

St., New York.

/

„

Young

(Thomas) Orchids, Inc.
of notification) 3,300 shares of common

March 10 (letter

stock (par $1). Price—At market (about
Proceeds—To John W. Hanes, and Hope

derwriter—None, but Smith, Barney &

it Townecraft Industries, Inc.
16 (letter of notification) $50,000 of convertible
(each $10 principal amount convertible into
one share of Class A common stock, par $1).
Price—At
par (in denominations of $50 and $100).
Proceeds—For
general corporate purposes. Office—271 Church St., NewYork, N#Y. Underwriter—Nope./

April

and

Newhard, Cook & Co., St. Louis,

$33 per share).
Y. Hanes. Un¬
Co., New York,

Mo., will act as

brokers.

debentures

Union Tank Car Co.

(5/5)

April 15 filed $20,000,000 of sinking fund debentures to
be dated April 15, 1953 and to mature April 15, 1973.
tire

common

Bros.
(EDT)

and

Price—To be

Corp.

Offering—Expected in

curities Corp., both of New York.
the Spring of 1953.

Co. and
Merrill Lynch, Pierce, Fenner & Beane (jointly); White,
Weld & Co.; The First Boston Corp; Kuhn, Loeb & Co.,
Lehman Brothers and Salomon Bros. & Hutzler (jointly).

oversubscription privilege); rightsjo expire on

Price—$14

7.

May

Salomon

Texas Western

(5/5)
April 9 filed $30,000,000 of 24-year debentures due May
1, 1977. Proceeds—To repay advances from American
Telephone & Telegraph Co., the parent. Underwriters—
To be
determined by competitive bidding. Probable
bidders:- Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; Kuhn, Loeb & Co.; The First Boston Corp. Bids—
Tentatively expected to be received on May 5.
,

Co.; Lehman Brothers;

May 18 at Two Rector St., New York, N. Y.

determined

timore, Md.
Silver Creek

&

Bids—To be received up to 11:30 a.m.

it Texas Power & Light Co. (5/18)
April 13 filed 70,000 shares of cumulative preferred
stock (no par). Proceeds—To retire bank loans and for
additions

Dallas, Tex.
shares of common stock (par 50
cents). Price—To be supplied by amendment. Proceeds
—Together with other funds, to be used to build pipe¬
line. Underwriters—White, Weld & Co. and Union Se¬

Merrill

and

Lynch, Pierce, Fenner & Beane
(jointly); The First Boston Corp.; Union Securities Corp.;
Hemphill, Noyes & Co. and Drexel & Co. (jointly);

on

Motor

Halsey,

.

(Del.)
Jan. 8.(letter of notification) 20,000 shares of 6% cumu¬
lative preferred stock
Price—At par ($10 per share).
Proceeds—For working capital.
Office—Manheim Pike,
Lancaster, Pa. Underwriter—Alex. Brown & Sons, Bal¬
Shirks

Co.

bidders:

West Coast Pipe Line Co.,

Nov. 20 filed 1,125,000

6tock

Texas Power & Light Co. (5/18)
April 13 filed $5,000,000 first mortgage bonds due 1983.
tion.

—

fering—Expected in the Spring of 1953.

stock

(letter of notification) 1,200,000 shares of com¬
stock (par 10 cents), of which 1,000,000 shares are

(par $1). Price—At par or principal amount. Proceeds—
enlarge plant. Underwriters—McGinnis & Co., New

Underwriters

pipeline.

April 9 (letter of notification) 240,000 shares of common

March 27

To

51

White, Weld &
York. Of- *

(5/5)

Co.

common

mon

Scil-Tone Corp., Plymouth,
March

Gas

April 10 filed 1,000,000 shares of
Price—To be

—None.

sell

(1779)

Tennessee

Address—Box

capital.

working

Proceeds—For

share.

...

supplied by amendment. Proceeds—To re¬

for general corporate
purposes including the construction of new tank cars.
Underwriter—Smith, Barney & Co., New York.
•

$15,000,000

bank

loans

and

100,000 shares of capital stock (par $5),

of which 50,000 shares are to be

offered for subscription

stockholders of record April 20 at rate of one new

by

Mfg.

Co.

,

April 7 it was announced stockholders on May 6 will
on increasing authorized common stock from 3,750,-

vote

to 5,000,000 shares (par $20). It is
planned to issue any of the additional
Underwriter—Previous financing was handled by

000 shares
not

(no par)

presently

stock.

Blyth & Co., Inc.
American Gas & Electric Co.

Union Wire Rope Corp.

March 30 filed

Prospective Offerings
Allis-Chalmers

(6/9)

April 6 it was announced company plans to issue and sell
800,000 additional shares of common stock (par $5). Pro¬
ceeds—To be invested in operating subsidiaries. Under¬
writers
To be determined by competitive bidding.
—

by competitive bidding.

Probable bidders: Halsey, Stuart

Inc.; The First Boston Corp.; Blyth & Co., Inc. and

& Co.

& Co. (jointly); Kuhn, Loeb & Co.;
Equitable Securities Corp. Bids—Tentatively expected to
be received on May 18.
Kidder, Peabody

share for each 10 shares held

(with

an

oversubscription

privilege); 33,300 shares will be sold to one subscriber;
and the remaining 16,700 shares to be offered publicly
together with any unsubscribed shares. Subscription
rights will expire on May 8. Price—To be supplied by
amendment.
Proceeds
For expansion program and
—

^ Southern Natural Gas Co. (5/19)
April 20 filed $30,000,000 first mortgage pipeline sinking
fund bonds due 1973. Proceeds—To repay bank loans and
for

expansion program. Underwriters—To be determined

Probable bidders: Halsey, Stuart
& Co. Inc.; Kuhn, Loeb & Co.; The First Boston Corp.;
Equitable Securities Corp.; Blyth & Co., Inc. and Kidder,
Peabody & Co. (jontly). Bids—Tentatively scheduled to
by competitive bidding.

be received on
•

May 19.

Southwestern

March
stock

filed

16

(par $25).

States Telephone Co.

(4/28)
shares of cumulative preferred
Price—To be supplied by amendment

60,000

(expected to be at par with a yield of somewhat better
5V4%). Proceeds—For construction program. Un¬

than

derwriter—Central Republic Co.

(Inc.), Chicago, 111.

working capital.

Underwriter—P. W. Brooks & Co., Inc.,

Securities

Blyth & Co., Inc., and Goldman, Sachs & Co.
(jointly). Registration—Expected about middle of May.
Bids—To be received early in June.

Corp.;

•

Arkansas Louisiana Gas Co.

April 10 it
tion

New York.

First Boston Corp.; Union

Probable bidders:

with

was

reported company has filed an applicaP. S. Commission for authority to

Arkansas

$35,000,000 of first mortgage bonds. Pro¬
bank loans and for new con¬
Underwriters—To be determined by competi¬

issue and sell

it United Rayon Manufacturing Corp.,
Arnheim, The Netherlands
See under Algemene Kunstzijde Unie N. V. above.

ceeds—To repay $25,000,000
struction.

tive bidding.

Co., Bellefontaine, Ohio
March 12
(letter of notification) 2,500 shares of
cumulative preferred stock.
Price—At par ($100
share).
No.

5%
per

— For
plant expansion. Office —127
St., Bellefontaine, Ohio. Underwriter—None.

Proceeds

Main

Probable bidders: Halsey, Stuart & Co. Inc.;
Freres & Co. (joint¬

The First Boston Corp. and Lazard

United Telephone

ly); Union Securities Corp.; Smith, Barney & Co.; Equit¬
able Securities Corp. Bids — Expected to be received

early in May.

Continued

on

page

Vault Co. of

America, Davenport, Iowa
March 2 (letter of notification) 10,000 shares of common
stock. Price — $10 per share. Proceeds — For working
capital. Underwriter—A. J. Boldt & Co., Davenport, la.

Star Air

Freight Lines, Inc., N. Y.
Feb. 4 (letter of notification) 149,000 shares of
stock (par $1) in units of 20 shares. Price—$20

Victoreen Instrument Co.
common
per

unit.

Proceeds—To purchase Quaker
to

City Airways, Inc. (Pa.),
purchase operating certificates and for working cap¬

ital,

Office—2 East 33rd St., New York.

Underwriter—

None.
Sun

Electric

working capital.
Office—6323
31, 111. Underwriter—None.

Avondale

Ave.,

Chicago

Taylorcraft, Inc., Conway, Pa.
April 7 (letter of notification) 80,000 shares of common
working

$1).

(letter of notification)

(par $1).

Price—$1.75

capital. Underwriter

burgh, Pa.




per
—

share. Proceeds—For
Graham & Co., Pitts¬

(4/28)

When the
rior

the

problem is producing a supe¬

printing job against a rush deadline,
answer

is

Sorg

April 8 filed 84,734 shares of common stock (no par) to
be offered for subscription by common stockholders of

thirty

record

—

specialists for over

legal printing.

shares

April 27 at rate of one new share for each 10
held; rights to expire on May 14. Price—To be

supplied by

• Sunray Oil Corp., Tulsa, Okla. (5/14)
April 21 filed 719,881 shares of common stock (par $1).
Price—To be supplied by amendment. Proceeds—To The
Atlas Corp., the
selling stockholder. Underwriter —
Eastman, Dillon & Co., New York.

(par

15,000 shares of common
Price—At market (approximately $5.25
per share). Proceeds—To E. A. Benson and R. F. Shima,
the two selling stockholders. Underwriter—Barrett Herrick & Co., Inc., New York.
12

Washington Gas Light Co.

Corp., Chicago, III.

March 27 filed 3,000 shares of 6% cumulative preferred
stock. Price—At par ($100 per share).
Proceeds—For

stock

Feb

stock

Proceeds—For new construc¬
Corp., New York;

amendment.

We're

years

in financial, corporate and

equipped to handle design, print¬

tion. Underwriters—The First Boston

ing, binding and mailing all under one

and Johnston, Lemon &

roof,

Co., Washington, D. C.

with

day and night availability.

West Coast

Pipe Line Co., Dallas, Tex.
Nov. 20 filed $29,000,000 12-year 6% debentures due Dec.
15. 1964, and 580,000 shares of common stock (par 50
cents) to be offered in units of one $50 debenture and
one

supplied by amend¬
Proceeds—From sale of units and 1,125,000 addi¬

share of stock.

ment.

tional shares of

Price

common

—

To be

stock and private

sale of $55,-

000,000 first mortgage bonds, to be used to build a 1,030

SORG

PRINTING CO., Inc.

80 SOUTH ST., NEW

V0BK 58, N.Y.

52

52

(1780)

The Commercial and Financial Chronicle

Continued

from

Arkansas

page

Power &

51
Light Co.

Jfeb. 2 it was announced company may issue and sell,
probably in June, 1953, about $18,000,000 of first mort¬
gage bonds.
Proceeds—To repay bank loans and for
new construction.
Underwriters—To be determined by
competitive bidding. Probable bidders: Halsey, Stuart &
rjr Co. Inc.; Lehman Brothers and Stone & Webster Secu¬
rities Corp. (jointly); The First Boston Corp.; White,
Weld & Co., Blyth & Co. Inc., Equitable Securities Corp.
and
Central
Republic Co.
(jointly); Merrill Lynch,
Pierce, Fenner & Beane and Union Securities Corp.
<jointly).

Arkansas Power & Light Co.
March 20 it was announced that company may consider

refunding the outstanding 47,609 shares of $7 preferred
(no par) and 45,891 shares of $6 preferred stock
{no par), both called at $110 per share. Underwriters—

tftock

To be determined by competitive

bidding. Probable bid¬
ders. Blyth & Co., Inc, and Equitable Securities Corp.
(jointly); W. C. Langley & Co., and The First Boston
Corp. (jointly); Kidder, Peabody & Co., and Merrill

Lynch, Pierce, Fenner & Beane (jointly); Union Securi¬
ties Corp.
<

Atlantic Refining Co.
March 27 it was announced that proposed debenture isisue

later this year

nature and

termined.

will be around $60,000,000. The exact
are still to be de¬

/authorized

debt
be

from

used

will

,

vote

$75,000,000

to

help

struction program for 1953.
<& Co. may head group.
•

May 5
to

for

pay

a

increasing

on

$150,000,000. Pro¬
$100,000,000 con¬

Underwriters—Smith, Barney

was

announced RFC plans sale of $1,675,000

•of this company's collateral trust 4% bonds due
July 1,
1961.- Underwriters—To be determined by competitive

bidding.
Probable bidders: Halsey, Stuart & Co. Inc.;
Blyth & Co., Inc. Offering—Withdrawn.
"

Evansville, litd.
.April 13 it was reported company plans issuance and sale
>ot additional common stock (up to an amount not exiceeding $300,000). Price — Expected around 62Vz cents
per share. Underwriters—Cruttenden & Co., and
Mason,
Moran & Co., both of
Central

Chicago, 111.

Foundry Co.

(4/30)

March 16 directors voted to offer
rights to present pre¬
ferred and common stockholders to subscribe for
addi¬
tional common stock in the ratio of one share of
common
.stock for each four shares of either common
stock held. Underwriter—To be named

or

preferred

later.

Young of F. J. Young & Co., New York is

a

Fred

J.

director.

.~

Central Hudson Gas & Electric
Corp.
March 3 it was announced that some
portion of the com¬
pany's financing program for 1953-1954 will involve the
«ale of $16,550,000 new
securities, a portion of which will
involve common stock or debt securities
convertible into
common
stock.
Stockholders at the annual
meeting
:March 24 voted to authorize an
additional 1,000,000
(shares of common stock.
Underwriters —Kidder, Peabody & Co. and Estabrook & Co. handled

offering in

Kovember, 1949, of $6,000,000 2% convertible debentures.

Central Illinois Public Service
Co.
March 26 it was
reported that the company may about
anid-July sell about $6,000,000 additional common stock
(first to common stockholders).
Underwriter—The First
Boston Corp., New York.

Central

Louisiana

March 26 it
stock
>

was

issuance

the

Co., Inc.

and

sale

of

the

locally in the
company

are

common

parishes

in

located, such

exceed $300,000 in

They will also vote

aggregate market value.
approving issuance of securities

on

•convertible into shares of
any class of capital stock.

*; Central Maine
Jan.

2

it

was

Power Co.

reported

plans sale later this
$10,000,000 common stock (in addition to
$10,•&W),000 of 1st & gen. mtge. bonds sold
March 10, 1953)
company

mtcr distribution
by New
JL»

England Public Service Co. of

holdings of Central Maine Power Co. common
stock
Probable bidders: Blyth &
Co., Inc. and Kidder, Peabody
fc Co. (jointly); Coffin & Burr, Inc.; A. C. Allyn & Co.,
Ipc and Bear, Stearns & Co. (jointly); Harriman Ripley
Jk

Co., Inc.

U

new

&e determined

Stone

&

company may issue and sell
preferred stock. Underwriters—To

by competitive bidding. Probable
bidders:
Webster Securities
Corp.; Lehman Brothers

jod Glore, Forgan &
Harriman

Co. (jointly); Blyth

Ripley & Co., Inc.

CJomtly); Salomon
®

and

&

Co., Inc.,
Smith, Barney & Co!

Bros. &; Hutzler.

Chicago Great Western Ry.

Sre«n1n7nnrpany.asl^e?

(4/23)

ICC

Permission to
flsell $6,000,000
collateral trust bonds due 1978

ared by

$9^)00,000 4%
iSFroeeeds—-To pay off
»v3m-3
The

first mortgage bonds

$3,000,000

Pr°bable

FirS6?^'Y &rC°' and Widte>
Boston Corp.; Merrill
Bids—Expected

at 1

working

&

Co

Inc

*

Weld & Co. (jointly);

Lynch, Pierce, Fenner
p.m. (EST) on
April 23.

Cincinnati Gas & Electric Co.

^rnmnnn+thWaSureVfaleii

the
£35,000 000 through sale of new comPany Plans to raise
securities (mostly bonds)
Proceeds—For new construction.
-

;fbr bonds.

about

w

conlPetitive

Halsey, Stuart




&

Underwriters—To be
bidding. Probable bidders
Co. Inc.;
Morgan Stanley &

ments

l-for-15

a

basis.

There

are 8,531,329 shares
Proceeds—For invest¬

presently outstanding.

in

subsidiaries.

Underwriter

—

None.

500,000 shares of common stock. Price—Ex¬
be around $10 per share. Underwriter—Hayden, Stone & Co., New York. Offering—Postponed.

^ Colonial Trust Co. of Wilmington, Del.

Merrill

Lynch, Pierce, Fenner & Beane, New York,
clearing agent in previous stock offer.
March 18 stockholders authorized

April 10 it

reported

was

plans to offer to its

company

stockholders of record April 23 the right to subscribe on
before

or

May 12 for 4,028 additional shares of capital

stock

(par $10)

three

shares

the basis of one new share for each
Price—$30 per share. Proceeds—To
increase capital and surplus.
Underwriter—Laird, Bison

sell & Meeds,

Wilmington, Del.

Columbia Gas System,

April 6 it

announced

company plans to issue and
$40,000,000 of new debentures. Pro¬
ceeds—To repay bank loans and for construction pro¬
gram. Underwriters—To be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
Morgan Stanley & Co.

sell later

was

this year

March 10 company announced that in the next four years
it expects to raise about $280,000,000 of new capital to

$500,000,000 construction program during
No conclusion has been reached as to the
type of securities to be issued or when they will be sold.
a

that period.

Halsey, Stuart & Co. Inc.;

Kuhn, Loeb & Co., Lehman Brothers and American Se¬
curities Corp. (jointly); Glore, Forgan & Co.; The First
Boston Corp.
(Glore, Forgan & Co. and The First Bos¬
ton

Corp.

underwrote

ferred stock to

offering

an

common

Culver Corp.,

April 3

an issue of 3,000 shares
(par $100) to carry a cumulative divi¬
dend rate not to exceed 6%
annually. The management
states that, under present
plans, these shares will be is¬

sued

the growth of the corporation warrants.

as

of

convertible

pre¬

stockholders

March

18

Employees Corp.

directors

authorized

stock

common

:

(5/26)

an
offering of 12,000
(par $5) to stockholders of rec¬

ord April 28 at rate of one new share for each five shares
held (not taking into account 3,000 shares to be issued as

stock dividend

a

on May 26); rights are to
expire on June
Subscription warrants are to be issued on the latter
date. Price—$15 per share.

24.

^ Greenwich Gas Co.

of

record

Jan.

13

was reported company plans to issue and sell
$200,000 of first mortgage bonds and $483,000 of common
stock (the latter first to stockholders). Proceeds—To re¬

tire bank loans.

Underwriter—F. L. Putnam & Co., Bos¬

ton, Mass.
Gulf Interstate Gas Co.,
Houston, Tex.
Sept. 16 company applied to the FPC for authority to
construct an 860-mile pipeline
extending from southern
Louisiana to a point in northeastern
Kentucky. This
project would cost about" $127,887,000. Transportation of
gas is expected to commence by Nov. 1, 1954. To finance

the line

stockholders last November.)

company plans sale of bonds and stock (75%
25%, respectively). Underwriter—May be Carl M.
Loeb, Rhoades & Co., New York.
and

Chicago, III.

common

Government

April 13 it

Commonwealth Edison Co.

help finance

as

of preferred stock

shares of

Inc.

acted

Government Employees Corp.,
Washington, D. C.

held.

were

given the right to subscribe on or before April 24 for
23,640 shares of common stock at the rate of one new

Gulf Life
March

21

Insurance

E.

Co., Jacksonville, Fla.
Phillips, Jr., President, and others sold

L.

each $5 par common share held immediately
prior to the two-for-one split up of shares effected on

about 150,000 shares of capital stock for a reported price
of $17,400,000 to an investment banking group headed
by

Jan. 13, 1953. Price—At par ($2 per share). Proceeds—
For investment. Office—105 West Madison
St., Chicago,

Equitable Securities Corp. and R. S. Dickson & Co., who
plan to offer a part thereof in two or three months.

share for

111.

Underwriter—None.
Delaware Power &

Feb. 24 it

Gulf Power Co.

'

Jan. 28 it

Light Co.

announced stockholders

was

on April 21 will
proposal to increase the authorized
preferred stock from 200,000 shares to 300,000 shares
(par $100). Probable bidders for any new preferred

vote

approving

on

stock

financing

First

Boston

a

may

include Blyth & Co., Inc. and The

Corp.

(jointly); White, Weld & Co. and
(jointly); Lehman Brothers; W. C. Lang¬
ley & Co. and Union Securities Corp. (jointly); Morgan
Stanley & Co. Stuart Cooper, President, said it is pos¬
Shields & Co.

sible that

common

Delta Air

stock may be sold

later in the year.

was

termined

by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kuhn, Loeb & Co.; The First
Corp.; Kidder, Peabody & Co. and White, Weld
& Co. (jointly); Merrill Lynch, Pierce, Fenner & Beane,

Boston

Salomon

Bros.

March 26 it

Utilities

was

with

the

bentures

shares of

mon

Debentures

stock

at

rate

will
of

be

convertible

share for

one

into

each

Delta

com¬

$35 principal

amount of debentures.

are

about

Nov. 1,
Oct.

1

1953, to May 1, 1968, inclusive, and
of

like

a

amount

of

said

on

certificates.

bidders:

Halsey, Stuart & Co. Inc.;
Hutzler; Kidder, Peabody & Co.

or

about

Probable

Salomon Bros.

&

Detroit Brass & Malleable Works

April 15
to

was announced

that stockholders

were

Detroit Edison Co.
24

it

unspecified

was

company

convertible

(about $55,000,000 to carry
4%) which may first be

an

plans to issue

debenures

due

an

1963

interest rate not exceeding

offered for subscription by
stockholders. Proceeds—To retire bank loans and to meet
construction costs. Meeting—Stockholders on

April

will vote

on

authorizing the

new

debentures.

14

Under¬

writer—None.

Inc.;

Estabrook

&

Co. and Stone & Webster Securities
Corp. (jointly); The
First Boston Corp.; White, Weld & Co. and

Kidder, Pea¬
body & Co. (jointly); Glore, Forgan & Co. and Harriman
Ripley & Co. Inc. (jointly).
El Paso Natural Gas Co.
25

it

as

was

Co.

(jointly);

(EDT)

June 9.

*■

has filed an appli¬
proposing the issuance of 781,042

FPC

stock

(no par) to

held

shares

on

common

the basis of

on

stockhold¬
new

share

about

previously

been

to be offered for sale to

erroneously1

one

May 8. [It had
reported that the new

or

shares

were

on

announced company

common

four

a.m.

Co.

stock distribution

a

for each

stockholders.]

Inc., Chicago, III.
Feb. 9 it was reported company has applied to the CAB
for a certificate of convenience covering service from
Detroit to Cleveland, and also in Chicago, where the
company is now operating a mail pick-up service in sub¬
urban towns. Underwriter—May be Cruttenden & Co.,
Chicago, 111.
-

High Voltage Engineering Co., Cambridge, Mass.

of

was

reported company plans early registration
convertible subordinate debentures

$800,000 4%-6%

due 1967 and 20,000 shares of common stock to be offered
in units of a $1,000 debenture and 25 shares of common
stock.

Price—$1,000 per unit. Business—Company was
organized in 1947 to design, develop and manufacture
X-ray machines and other equipment. Underwriter—
Paine, Webber, Jackson & Curtis, Boston and New York,
Iowa Electric

April 13 it
common

writers

Light & Power Co.

reported company may sell in June some
and preferred stock and/or debentures. Under¬

—

was

For stock:

The

First Boston Corp.

Walker & Co., both of New York.

ing

was

April

and G. H.

Previous debt financ¬

done privately.

announced

it

13

reported company plans issuance and
$7,500,000 first mortgage bonds. Under¬

was

sale in June of

writer—To be determined by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co. Inc.; First Boston

Corp.; Kuhn, Loeb & Co.; Kidder, Peabody & Co. and
Blyth & Co., Inc. (jointly); Lehman Brothers, Bear,
Stearns

Union

Eastern Utilities Associates
Feb. 20 it was announced
company plans sale of $7,000,000 collateral trust mortgage bonds due 1973.
Under¬
writers—To be determined by competitive
bidding. Prob¬
able bidders: Halsey, Stuart & Co.

March

&

it Iowa Public Service Co.

announced

amount of

ers

to vote

increasing capital stock (par $10) from 200,300,000 shares and on waiving their preemptive
on

any additional shares.
The addi¬
tional shares may be sold at
par for working capital, or
used as stock dividends at.the discretion of
the directors.

March

cation

Feb. 18 it

Derby Gas & Electric Corp.
April 10 it was announced corporation plans to offer
to its common stockholders the
right to subscribe for an
additional 50,Q00 shares of capital stock
(prior to con¬
summation of plan of merger of
company and its sub¬
sidiaries). Underwriter—Allen & Co., New York.
April 1 it

Drexel

Helicopter Air Service,

(8/3)
expected to be received by the company on or
Aug. 3 for the purchase from it of $3,300,000
equipment trust certificates due semi-annually from
Bids

and

Tentatively expected at 11

Feb. 11 company filed an application with SEC covering
proposed issue of $10,695,846 of 5J/2% convertible de¬

share.

Hutzler

&

Union Securities Corp.; Equitable Securities Corp.; Leh¬
man Brothers. Registration—Planned for
May 8. Bids—

Gulf States

(subordinated) to be issued in exchange for
Chicago & Southern Air Lines, Inc., common stock under
merger plan at rate of $21 of debentures for each C. & S.

(6/9)

reported company plans issuance and sale
of $7,000,000 of first mortgage bonds due 1983. Proceed!
—For construction program.
Underwriters—To be de¬

Lines, Inc., Atlanta, Ga.

se¬

by competitive

Halsey, Stuart

First

& Beane.

to be

due in 1988.

of notes and for

—To be determined

bidders:

issue and

on

(par $5)

reported company plans issuance and sale

rights to subscribe to

U wai? reP°rted

59,000 shares of

General Public Utilities Corp. (6/4)
April 6, A. F. Tegen, President, announced that the com¬
pany plans to offer about $16,000,000 of common stock
(approximately 568,756 shares) to its stockholders about

pected to

000

Central Power &
Light Co.

publicly 200,000 shares of, preferred stock (probably in
May) and $25,000,000 debentures. Underwriters — White,
Weld & Co., N. Y.

June 4

Productions Corp.

was

Denver & Rio Grande Western RR.

April 16 will

on

block of the authorized

a

facilities

no.^

Electric

announced stockholders

authorizing

for

/which

of

•

Basin Oil Corp.,

on

Cinerama
Jan. 9 it

Probable bidders for bonds:

Bangor & Aroostook RR.

"March 31 it

vote

W. E. Hutton & Co.

timing of the financing

Stockholders

ceeds—To

Co.; Kuhn, Loeb & Co. and Salomon Bros. & Hutzler
(jointly); Blyth & Co., Inc., and The First Boston Corp.
(jointly); Union Securities Corp.; Glore, Forgan & Co.
and White, Weld & Co. (jointly); W. C. Langley & Co.;
Lehman Brothers; Harriman Ripley & Co., Inc.; Merrill
Lynch, Pierce, Fenner & Beane.
Previous equity fi¬
nancing was underwritten by Morgan Stanley & Co. and

..Thursday, April 23, 1953

.

&

Co.

and

Securities

(jointly).

L.

Corp.

F.

Rothschild

and

Salomon

Co.

(jointly);
&

Hutzler

Offering—Expected in June.

Jasco, Inc.

(Del.)

(4/30)

Bids will be received up to 3 p.m.

the

&

Bros.

purchase

from

the

office

of

(EDT)
Alien

April 30 for
Property, 346

on

Broadway, New York 13, N. Y., of its 50% ownership (5
shares) in this corporation.
TTie other 50% interest is
held by Standard Oil Development
Co., a subsidiary of
Standard Oil Co. (New Jersey).
•

Long Island Lighting Co.
was announced that company this Fall plans
to issue and sell in the neighborhood of 600,000 shares
April 21 it

company

plans

to

place

privately $120,000,000 of first mortgage bonds and sell

of

new common

stock to be followed in the latter part

of

,

Volume 177

Number 5214

The Commercial and Financial Chronicle

...

(1781)
the year by an issue of about $25,000,000 of first mort¬
gage bonds (this is in addition to 100,000 shares of series
C preferred stock, par $100, registered with the SEC on

April 6). Proceeds—To
construction.

bank loans and for

repay

Underwriters

(1)

—

For

new

stock,

common

probably Blyth & Co., Inc. and The First Boston Corp.
(jointly). (2) For bonds to be determined by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.,

Inc.; Blyth & Co., Inc. and The First Boston Corp.
(jointly); W. C. Langley & Co.; Smith, Barney & Co.
Louisiana Power & Light Co.

March 20 it
in

June

writers

announced company may

was

$12,000,000
To

of

^first

issue and sell

bonds.

mortgage

Under¬

determined

be

by competitive bidding
Probable bidders: Halsey, Stuart & Co. Inc.; Kuhn, Loci.
& Co., Lehman Brothers and A. C. Allyn & Co., Inc.
(jointly); Blyth & Co., Inc; White, Weld & Co. and
—

Shields

Co.

&

(jointly); Salomon Bros. & Hutzler; W.
C. Langley & Co., The First Boston Corp., and Glore,
Forgan & Co. (jointly); Merrill Lynch, Pierce, Fenner
& Beane and Kidder, Peabody & Co. (jointly);-Harriman
Ripley & Co., Inc.; Equitable Securities Corp.
Maier

April

announced

was

of

four

share.

per

plant.

offer 400,000
stock to its stockholders at

common

shares for each share

new

Proceeds

—

To

held.

help finance

a

Price—$5
new bottling

.

April 8 it was announced company plans to issue and
sell $1,000,000 of convertible debentures.
Proceeds—To
finance development of oil properties in Ecuador. Under¬
writer—Kidder, Peabody & Co., New York. Meeting—
Stockholders

thorized

April

on

stock

common

27

will

vote

increasing

on

au¬

by 500,000 shares.

Michigan-Wisconsin Pipe Line Co.
March

24

it

reported this company is considering
permanent financing of its $20,000,000 bank loans which
mature July 1, 1953.
If competitive, bidders for bonds
was

may include: Halsey, Stuart & Co. Inc.; Glore, Forgan
& CO.; The First Boston Corp.; Harriman Ripley &
Co.,
Inc.
:1
yi'-;■ ,,
'

V.'/:

March 11 it

was

announced stockholders will

on

April 28

increasing authorized common stock from 3,440,000 to 3,950,000 shares and the preference stock from
160,000 to 210,000 shares. Underwriter—Probably Union
Securities Corp., New York.
on

Mississippi Power & Light Co.
March 20, E. H. Dixon, President of Middle South Utili¬

ties, Inc., announced that refunding of Mississippi Power
& Light Co.'s $6 preferred stock (no
par), of which 44,476

shares

are

now

outstanding,

may

be

considered.

This issue is callable at $110 per share. Underwriters—
To be determined by competitive bidding. Probable bid¬
ders: Blyth &

i

Co., Inc., and Equitable Securities Corp.
(jointly; W. C. Langley & Co., and The First Boston
Corp. (jointly); Kidder, Peabody & Co., and Merrill
Lynch, Pierce, Fenner & Beane (jointly); Union Securi¬
ties Corp.
.YV:.< .:»7 'V r/"
March 31,

serial

F. J. Green, President, announced that

debentures.

tion program.

additional
—

Proceeds—To

mortgage

finance

bonds

1953

and

construc¬

The latter may be placed privately.

common

For

stock

construction

on

a

one-for-five

program.

—

it

11

near

was announced
company plans issuance and
the middle of 1953 of $10,000,000 first mortgage

t>onds. Underwriters—To be determined by competitive

ibidding. Probable bidders: Halsey, Stuart & Co. Inc.;
W. C. Langley & Co. and the First Boston
Corp. (joint¬

ly);

Kuhn, Loeb & Co.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); Glore, Forgan & Co.; Lehmnan
Brothers; Equitable Securities Corp.; Union Se¬
curities Corp. and Salomon Bros. & Hutzler
(jointly);
Merrill Lynch, Pierce, Fenner & Beane; Harriman Rip¬
ley & Co., Inc.
National Ceramic Co., Trenton, N. J. (4/30)
March 29 it was announced that sealed bids will be

ceived

re¬

before

April 30 by Surrogate of Mercer
•County, at Trenton, N. J., for the purchase of a majority
rstock interest in this company.
Bids will be opened by
the court at 2 p.m. (EDT) on May 1.
•

on

or

New Jersey Power &

April 15

company

Light Co.
applied to SEC for authority to issue

;^nd sell $5,500,000 first mortgage bonds due May 1, 1983.
Proceeds—To repay bank loans and for new construction.
"Underwriters—To be determined by competitive bidding.
Probable bidders: Halsey, Stuart & Co. Inc.; Salomon

Bros.

&

Hutzler; Union Securities Corp. and White
Weld & Co. (jointly); The First Boston Corp. and Kid«der, Peabody & Co. (jointly); Carl M. Loeb, Rhoades &
Co.; Equitable Securities Corp.; Kuhn, Loeb & Co.,
Xehman Brothers
Merrill

Lynch,
"Probably in May.

and

Goldman, Sachs & Co. (jointly);
Pierce, Fenner & Beane. Offering—
'

New York State Electric & Gas

JTeb. 27 it

;;

"

Corp.

reported that company may, later in 1953,
$20,000,000 first mortgage bonds (following
•private sale of 75,000 shares of 4.40% preferred stock,
was

issue and sell




offered).

■

1

.

/

stockholders

,

May 6

on

a

Underwriter—Blair,
' : /

/

Indiana, Inc.

April 10 it

was announced that
company plans to issue
and sell 600,000 shares of
preferred stock (par $25) and
to offer to the common
stockholders on a l-for-8 basis
472,000 shares of common stock. Proceeds—For
expan¬
sion program.

Underwriter—Blyth & Co., Inc., handled

previous financing.

plans to issue and
Public Service Co. of New
Hampshire
■
3 it was announced
company plans to issue ant
sell approximately $5,000,000 of bonds in
May or June;
1953, and in the latter part of 1953 to issue sufficient

Proceeds—For

Nov.

new

■

shares to raise about

common

Northern Natural Gas Co.
Feb. 27, H. H. Siert,
Treasurer, announced that following
the proposed offering in
May of 548,100 shares of com¬
mon stock to
stockholders, the company plans to issue
and sell $40,000,000 of new debentures.

bank

repay

loans

and

for

$4,000,000.

new

Proceeds—Tto

construction.

Unde*»
be
determined
by competitive bidding.
Probable bidders: For bonds,
Halsey, Stuart & Co. Tnc.;
The First Boston<€orp. and Coffin &
Burr, Inc.
writers—To

pay

(jointly);
Kidder, Peabody & Co.; White, Weld & Co. For
stock, 11
Kidder, Peabody & Co. and Blyth & Co., Inc.
(jointly);
Harriman Ripley & Co. Inc.

(jointly). Offering—Expected in June.

March

Proceeds—To re¬
bank loans and for construction program. Under¬
writers—To be determined by
competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
Inc.; Blyth & Co., Inc.;
The First Boston Corp. and
Kidder, Peabody & Co
Northern

Public Service Co. of Oklahoma

was reported company
may issue later this year
$1,500,000 of first mortgage bonds. Proceeds—For ex¬
pansion program. Offering—May be placed
privately.

>
;

Northwest Natural Gas Co.
23 it was reported that this
company plans to
finance its proposed 1,300-mile
pipeline from Canada to
the Pacific Northwest by the issuance and sale of
$66,-

Oklahoma

Natural

announced

was

sidering authorizing
shares of

new

Gas

directors

were

Reading Co.

con¬

Bids

a

sufficient number ol

3,279,768

Bank, Omaha, Neb.

April

6 it was announced stockholders have
approved
an increase in authorized
capitalization from $4,000,000
to $5,000,000, par $20 per
share, in order to pave the way
for an offering to stockholders of
20,000 new shares at
$40 per share on a one-for-ten basis, following which a
stock dividend of 30,000 shares will be
paid on a basis
of one new share for each
7% shares held.

it

Corp., Albuquerque, N. M.
announced

was

SEC

an

issue

of

company plans to register
stock, which will be offered

nationally. Office—5003 Central Avenue, N. E., Albu¬
querque, N. M.
\
Pacific Northwest Pipeline Corp.
Jan 29 company received FPC
permission to file a third
substitute application
proposing to construct a 1,466mile transmission line
extending from the San Juan
Basin in New Mexico
the

and

Colorado to market

areas

in

Pacific

Northwest.
Estimated overall capital cost
project is $186,000,000, including $2,000,000 for
working capital. Financing is expected to consist of first
mortgage pipe line bonds and preferred and common
of

the

stocks.
Underwriters—White, Weld & Co. and Kidder,
Peabody & Co., both of New York, and Dominion Secu¬
rities Corp. Ltd., Toronto, Canada.

Pacific Telephone &
Telegraph
17 Mark R.
Sullivan,

Dec.

President,

announced

that

bidders

for bonds: Halsey, Stuart & Co.
Inc.; Morgan
Stanley & Co.; White, Weld & Co.; Lehman Brothers and
Union Securities Corp. (jointly).
Stock would be of¬
fered to stockholders, without
underwriting. American
Telephone &

Telegraphy Co., parent,

common

shares.

owns

91.25%

of

Pennsylvania Electric Co. (6/23)
April 1 it was reported company plans to issue and sell
in June about $12,500,000 first
mortgage bonds due 1983
and

a

like amount later

program.

tive

;

are

;

Remington Corp., Auburn, N. Y.
.-■/'HCeF:. i'"
April 14, Herbert L. Laube, President,
following approval
of

v

the increase and
split-up of common and preferred
stock, stated that the increased capitalization is neces¬
sary because the profit left after
today's taxes is far
from
enough to finance this corporation's continued

growth.

The

common

was

increased

from 50,000
shares,
1,000,000 shares, par $1, and split-up on a
5-for-l basis, and the preferred stock
increased front
2,500 shares, par $25, to 50,000
shares, par $10, and splitpar

$5, to

up on
•

2V2-for-l basis.

a

Republic National

V:

Bank of

Dallas

(Texas)
April 14 stockholders were offered the
right to subscribe
for 250,000 shares of
capital stock (par $12) on basis of
one

new

share

for

each

seven

shares

split; rights expire April 30. Price—$30

held

after

stock

share. Pro-

per

ceeds—To be used to increase

capital by $3,000,000 and
surplus by $4,500,000.
Underwriters—Walker, Austin &
Waggener, The First Southwest Co. and Dallas
Rupe &
Son, all of Dallas, Texas.
,

,

St. Anne's Oil
Co., Midland, Tex.
March 28 it was reported that
about April 10 of

—$5

per

and H. M.

share.

i

(4/30)

.'.v
registration is expected
250,000 shares of common stock. Price

Underwriters—Sills, Fairman

Byllesby & Co., Inc., both of Chicago.

& Harris

'

St.

Louis-San Francisco Ry.
(4/30)
Bids will be received by the
company at 120
New York 5, N.

Y.,

purchase from

it of

up

to

,

v

M

Broadway,

(EDT) on April 30 for the
$5,175,000 equipment trust certifi¬
noon

cates, series L, to mature in 15 equal annual installments.
bidders: Halsey, Stuart & Co.
Inc.; Salomon

Probable

Co.

company in 1953 will borrow some $125,000,000 from
banks to be refinanced later in
year, probably by offer¬
ing of bonds and additional common stock. Probable

Pacific

V,

expected to be received by the
company up to
it of $4,500,000 of
equip¬
ment trust certificates. Probable
bidders: Halsey, Stuart
& Co. Inc.; Salomon Bros. &
Hutzler; Kidder, Peabody
& Co.
:v.'v.-;";;'
v.

Proceeds would be used for

company's construction program. Underwriters will
be determined by competitive
bidding. Probable bidders:
Stone & Webster Securities
Corp.; Shields & Co.; Leh¬
man Brothers and Harriman
Ripley & Co., Inc.

10

(jointly); The First

$7.50) to raise $4,000,- ■' May 13 for the purchase from

shares of $7.50 par value.

the

& Co.

Inc.;

(jointly); Mor¬

(5/13)

offering of

the

Ormond

and Lehman Brothers

Stanley & Co. and Drexel
Boston Corp.

stock (par

an

common

J>'

was

gan

This would follow proposed stock
split of present
authorized 1,639,884 shares of $15 par value into

March

it

Kuhn, Loeb & Co.

000.

Omaha National

25

announced company plans
issuance and
in June of $50,000,000 of first
refunding mortgage
bonds. Proceeds—To
repay bank loans and for new con¬
struction. Underwriters—To be
determined by competi¬
tive bidding. Probable bidders:
Halsey, Stuart & Co.

Co.

that the

new

sale

Canada, Underwriter—Morgan Stanley & Co., New York.
it

was

Public Service Electric & Gas Co.

000,000 of 5% debentures and 1,400,000 shares of common
stock at $10 per share
publicly in the United States and

24

it

reported company may issue and se&
preferred stock (par $100). Under¬
writers—To
be
determined
by competitive bidding;
Probable bidders: Glore,
Forgan & Co.; Smith, Barney
& Co.; Kuhn, Loeb &
Co.; Harriman Ripley & Co., Inc.
and Central Republic Co.
(Inc.).
Proceeds —For addi¬
tions and improvements.
■

Feb.

000,000 of iVz% first mortgage pipeline bonds to insur¬
ance companies ana other institutional investors
and $9,-

Feb.

2

40,000 shares of

Pennsylvania Power Co.

April 6 it

with

Monongahela Power Co.
Dec.

recently

announced

was

approving

Public Service Co. of

$23,000,000 of new securities in the
(in addition to 80,000 shares of cumulative

stock

on

Rollins & Co.

additional

future

preferred

basis,

Underwriters

To be named later.

4iale

an

near

announced that
company

was

com¬

proposed two-for-one split-up to be voted upon April 24,
the company will offer to its stockholders 40,000 shares
•of

sell

$1,500,000 of equity securi¬

Mobile Gas Service Corp.
March 6, Maurice White, President, announced that, after

froceeds

Jan. 7 it

7 it

vote

Offering-

Offering—Expected in June.

first

April

Company also plans to issue and sell to American Tele¬
phone & Telegraph Co., its
parent, 700,000 additional
shares of common stock
(par $100).
-

(jointly).

Missouri Public Service Co.
pany plans to issue and sell
ties and about $3,500,000 of

Stock

•

$20,000,000 financing program,
which may involve the
private placement of $2,000,006
of preferred stock and the
sale, partly public and part
privately of $6,000,000 of collateral trust notes and
$12,000,000 of collateral trust bonds.

March

Minneapolis-Honeywell Regulator Co.
vote

June 23.

'

.

•

Exploration Co., Inc., Houston, Tex.

(5/14)

on

•'

Pittston Co.

(jointly); Kuhn, Loeb & Co. Bids—Tentatively

scheduled to be received

■

•

i..

mortgage bonds, series G. Proceeds—To repay bank loans
and for construction
program. Underwriters—To be de¬
termined by competitive
bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Morgan Stanley &
Co.; Mer¬
rill Lynch,
Pierce, Fenner & Beane and Glore, Forgan

construction.

Underwriter—None.

Menabi

•

$35,000,000 of refunding

Co.

by

Northern Natural Gas Co.

New York Telephone Co.
(6/23)
Feb. 26 company applied to New York
F. S. Commission
for permission to issue and sell

&

III.

~

Northern Indian# Public Service Co.

will

company

Permian Basin Pipeline Co.,
Chicago,

Feb. 4 company filed an amended
application with FPC
for authority to construct a 163-mile
pipeline system at
an estimated cost of
$40,269,000. Probable underwriter*
for convertible notes and
stock; Stone & Webster Seen-?
rities Corp.; and
Glore, Forgan & Co., both of NewYorfi£w
Of the stock of this
company, 51% is now owned

mined

Brewing Co., Los Angeles, Calif.
it

18

additional shares of
rate

$100, and $5,000,000 of 3%% debentures due 1991
(latter expected in April). Underwriters—To be deter¬
by competitive bidding. Probable bidders: Hal¬
sey, Stuart & Co. Inc.; The First Boston
Corp. and Glore,
Forgan & Co. (jointly); Blyth & Co., Inc. and
Smith,
Barney & Co. (jointly); Hemphill, Noyes & Co. ana
Drexel & Co. (jointly);
Kidder, Peabody & Co. and Salo¬
mon Bros. & Hutzler
(jointly); Lehman Brothers; Har¬
riman Ripley &
Co., Inc.
par

53

Proceeds—For construction
Underwriters—To be determined by competi¬
on.

bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; Kuhn, Loeb & Co.; Kidder, Peabody & Co.; The
First Boston Corp.; Equitable Securities
Corp. Bids—
Tentatively set for 11 a.m. (EDT) on June ^ Registra¬
tion— Expected on May 12.
;
j

Bros. &

Hutzler; Kidder, Peabody & Co.

<

San Diego Gas & Electric Co.
March 23 it was announced
company plans to issue
and sell additional securities to
help take care of its

$17,550,000 expansion

program for 1953. Underwriters—
For any preferred or common stock:
Blyth & Co., Inc.
Probable bidders for bonds:
Halsey, Stuart & Co.

Inc.;
Blyth & Co.,,Inc.; Kuhn, Loeb & Co.; The First Boston
Corp.; White, Weld & Co. and Shields & Co.

Union Securities Corp. and Merrill
Lynch,
ner & Beane
(jointly); Salomon Bros. &

(jointly);
Pierce, Fen¬

Hutzler.

Sears, Roebuck & Co., Chicago, 311.
April 6 it

was

announced

company

plans to raise about

$50,000,000 by offering shortly to its stockholders about
1,000,000 shares of capital stock (no par).

On April 27,
stockholders will be asked to increase authorized
capi*.\l
stock to 27,500,000 shares from
25,000,000 shares (2<
167,840 shares outstanding at Jan. 31, 1953, with 478,673

Continued

on

page

5&

■

'

•

.

54

"•

I

(1782)

The Commercial and Financial Chronicle

"

Continued from page

& Co.

53
employees under a stock

shares reserved for issuance to

Texas

Proceeds—To be utilized for general busi¬
purposes. Underwriter—None.

option plan).
ness

Inc.; Stone & Webster Securities Corp. and White,

Weld & Co.

Feb.

24

(jointly).

Illinois Natural Gas Pipeline Co.
was

and

common

the ratio

in

stock

75%

and

stock

common

for

and

N. J. (5/25)
March 26 it was reported company plans to issue and sell
about $300,000 of common stock. Proceeds—For working
capital. Underwriter—Peter W. Spiess & Co., New York.

Feb.

•

Texas
26

Utilities Co.

it

Washington Water Power Co.

Underwriters—To

Stuart

deter¬

be

First

•

& Dominick.

19

(

announced

FPC

Presiding Examiner
decision, subject to Commission review, author¬
izing company to construct approximately 160 miles of
pipeline at an estimated cost of $5,945,000. Securities
may be sold privately through competitive sale.
was

a

indebtdeness

First

izing the
in

to

company

construct

Southern California

Edison

an

Co.

Boston

Feb.

is considering selling $25,000,000 of first mort¬

company

that

Corp.

11

June

gage bonds and $15,000,000 of preferred stock. Proceeds
—For 1953 construction program.
Underwriters—May be

it

the

company

debentures.

on

First Boston Corp. and

Weld

Harris, Hall & Co. (Inc.) (jointly).

April 10 it

000^00

parses

create,

may

Southwestern Gas & Electric Co.
Feb.

25

it

was

Lehman

Beane

and

Union

March 16 it

Securities Corp.

18

needs.

Canadian

to.

April 14 it

was

reported company plans to offer for sub¬

scription by its
additional

common

common

common

stockholders about $1,000,000 of

stock. Underwriters—Hamlin &
Lunt,

Corp.

also

reported company expects to do

Co. of Lincoln

Weston

(jointly);

April 8 it
on

vote

stock

from

for

program

at

common

stock

filed with

SEC

on

market

of

are

long-term
shows

the three

the

are

present

vail

at

fluctuating and

until

yet

as

who look for

nervousness

least

bond

basis. In

new

a

the

to

pre¬

exchange

"rights"

accruing to F and G
holders under the recent offering
of 3%s expire at the month-end.
Meanwhile

becoming
The

underwriting business has

returned to that

where bank¬

area

ing groups going after new issues,
particularly via competitive bid¬
ding, are finding it necessary to
do

a

good

before

for

a

a

year

the

no

two

or

Federal

umbrella

of real

back

Reserve

over

the

is

down

literally need for
chart

a

that

they

must

nimble-footed in going after

be

has

been

when,

with

holding

an

government

safe

a

and




offering

to

convertible

3J/4 %

there

demonstrated

quently head
discourage the
part

of

larger

practice

dealers
portion

to

take

of

It has been noted

down

given

a

among

is

due

up''

their

this

gives

,

a

underwriters

Proceeds

—

100%

To reduce bank loans of
/-/.Jo;

reported that the company may, late this

was

early in 1954 issue and sell
out its

financing

The First Boston

stock

common

some

Underwriter—May

program.

Corp. and Robert W. Baird & Co.

was

announced

company

has applied to the

Massachusetts Department of Public Utilities for author¬
ization to issue and sell $3,000,000 of 20-year first mort-

over

a

period,
sec¬

that

deal

a

re¬

bit

one

underwriter,

nettled

by the practice, put it,

figure that
well

a

and- then

trouble.

People who have

off

than

they

can

comes

bitten

chew, start

Institutional

tendency
who

fre¬

cool

to

and it is

new

investors

offerings

still

are

felt, probably will

con¬

by competitive bidding. Prob¬

Stuart

&

Co.

Inc.;

First

Boston

CoYp.; Blyth & Co., Inc.; Kidder, Peabody & Co.

its current operation.

of

possible

attrac¬

capital apprecia¬

tion.

Meanwhile, attention is turning
the

major

municipal
emphasis

revenue

toll

market

roads

and

up

those

as

being

are

picked

where the .yield is 3% to 4%,

noted, in»rpreference to
porate
debt Issues
which
available to

Looking

cor¬
are

of

the /insurance

for

has really been "turning down

the

screws"

up

a

in the case

institutions it has to be,

the shares,

Buyers

are -

disposition to pick
"

opportunity t<£5Eiatn

a

by

would-be

"free-

story has it that the

gov¬

demanding that banks mak¬

ing loans to clients, for purchase
of the

new

showing

the

good cur¬

issue, submit
the

a

state¬

net

latter's

worth.

-

I

This procedure, a severe change
from recent years,"

has, it is said,

brought considerable howling on
the part of

.

motivated

on

doubt, the Treas¬

riders" in its latest operation.

ment

sjock is that of

seasoned compafty, and

serious

com¬

offerings with ^.keen eye.
the

are

«no rea¬

ernment's monetary officials have

Secondaries

panies likewise^&re reported to be
looking over frequent secondary
Where

Screws v_;

ury

been

Some

the

on

going the rounds

well-founded, and there is

One

yiCt$ 3.5 to 3.8%
Over

Putting
If reports

son

J

issued

is

it

of

bridge and tunnel

authorities.
These

with

bonds of the

on

typer^such

there is strong

generally

Halsey,

tion

"you

given issue has been

placed,

more

a

bidders:

rent yield with the added

Momentarily

particular

able

Treasury completely winds up

to

penchant to "stock

shelves.

any

a

cover.

"good tone," but the ultimate
action is considered bad.
As

fre¬

Practice

growing

500,000
a

Subject to market conditions, the corii-

the

of these

a

to
of

tinue in that frame of mind until

issue

particularly in the case of
ondary
equity
offerings,
dealers have

to
the

on

Favor Revenue Bonds

Irksome

outstanding)
distribution

Worcester Gas Light Co.

Proceeds—For

syndicates

up

than their orders will

ing effort.

There

the

Underwriter—May be named.

April 2 it

an

is

shares

writers—To be determined

selling and naturally the complex¬
operation that requires
ion of the market changes."
plenty of fortitude and real sell¬
into

Corp.

(jointly).

stockholders;

debentures

.

approving

rata basis.

round

be

part of in¬

'

Wisconsin Public Service Corp." '

to

authorized

part of the additional shares for issue

one¬

"compass" to

course.

prior

or

new

business.
It

increase

reported company plans to issue and sell

was

tenders

market, they had little to fear in

sign

and painfully in

aware,

cases,

are

"boning"

the way of price decline. The
way

underwriters

quently in recent months that if
you miss out on pricing at the
immediate time of offering there
is a strong possibility that a po¬
longer the situation of tentially
successful
deal
turns
deal

submitting their
given undertaking,

It is

some

to

voted

$7,000,000 of refunding mortgage bonds.

Treasury
sign

some

stock is expected

construction. Underwriter—

also plans to offer additional stock to stockholders
pro

March 17 it

Curtis, New York and Boston.

April 8 it

little

having found

fact there

stock

common

gaffi^.bonds. Proceeds—To retire bank loans, etc. Under¬

April 10—

Money rates
the

a

$7,750,000.

Washington Gas Light Co.

above.) Probable bidders for bonds: Halsey, Stuart

see

&

son

new

Instrument

(160,583

on

dividend.

pany

1,900,000 shares to 2,500,000 shares

without

voted-to

announced stockholders will vote April 30

was

shares

on

$42,000,000.

(Neb.).

Electrical

and

year or

of

stockholders

increasing authorized capital stock (par $12.50) from

stock

May

May 1, 1976. Underwriter—May be Paine, Webber, Jack¬

some

financing this Fall (under $50,000,000) to replace
short-term bank loans. (This is in addition
to 1,000,000
of

stock
reserve

conversion

upon

debt

shares

to

that

|00,000 from 500,000 shares. The sale of about $3,000,-

shares,

estimated

stock from

announced

was

250,000

authorized'common

stockholders

and

New York.

Hajygs Hall & Co., Inc., Chicago, 111.; The First Trust

(jointly).

grant directors right to issue all

creased

Tennessee Gas Transmission Co.
was

to

and

Buffalo, N. Y., and Allen & Co., New York.

March 27 it

25

it

10

in June. Proceeds—For

Walworth Co.
March

National

Peace River field to western Washington

000|bonds and 80,000 shares of preferred

(jointly).

★ Strategic Materials Corp., Buffalo, N. Y.

the

increase the authorized preferred stock (par $25) from

,iv

is

to

Western Light & Telephone Co., Inc.
April

$30,000,000 of

announced stockholders will

(1953-1955)

notes

1953

Company's construction

years

stated company may issue and sell $59,-

was

of 4% first mortgage bonds to insurance corn(including Prudential Insurance Co. of America,

Oregon. Underwriter—Eastman, Dillon & Co.,

Light Co.
the

;

comfnon stock for about $30,000,000. Proceeds—To fi¬
construction of a natural gas pipe line from the

000 shares in order to provide additional stock for future

(jointly);

bidding.
Securities Corp.;

nance

common stock to com¬

Equitable Securities

increasing

on

Under¬

competitive

Citj£: Bank of New York; and about 3,500,000 shares of

Corp., Harriman Ripley & Co., Inc. and

was

by

000,000 of 3% to 4% short-term

2,000,000 shares (1,842,500 shares outstanding) to 2,500,-

Brothers; Blyth & Co. Inc., and Stone & Webster

Securities Corp.

and

Utah Power &

& Co. and Kiddef-, Pea body & Co.
(jointly); W. C. Langley & Co and Paine, Webber, Jackson & Curtis (jointly);
Harriman Ripley & Co. Inc.; Merrill
Lynch, Pierce,
&

Co.

Goldman, Sachs & Co.

reported company later this year may
issue and sell 50,000 shares of cumulative preferred
stock (par $100).
Underwriters — May be determined
by competitive bidding. Probable bidders: White, Weld

Fenner

&

determined

Ne^ York Life Insurance Co.; Northwestern Mutual Life
Insurance Co. and several Canadian companies); $25,-

and sell In

issue

l-for-15 basis and

a

Proceeds—For

The First Boston

be

Westcoast Transmission Co.

construction program
by competitive bidding. Probable bidders for
Underwriters—For stock, none. For debentures, to be
bonds: Halsey, Stuart & Co.
Ipc.; The First Boston Corp.
-determined by competitive bidding. Probable bidders:
and Harris, Hall & Co. (Inc.)
(jointly); Blyfh & Co., Inc.;*
Halsey, Stuart & Co. Inc.; Morgan Stanley & Qp., White,
Kuhn, Loeb & Co. Probable bidders for preferred: The

determined

that company plans issuance

250,b00 shares to 400,000 shares and the

approximately $20,000,000 of
stockholders

mon

reported

was

Harriman Ripley & Co., Inc.; Union Securities Corp.

and

reported company may

was

•

a

United Gas Corp.

March 11, William C. Mullendore, President, stated that

it

2

Probable bidders: Stone & Webster
approved

Collin, Norton & Co. handled
latest common stock financing.
Probable bidders on
any bonds: Halsey, Stuart & Co. Inc.; The First Boston
Corp. and Glore, Forgan & Co. (jointly); Equitable Se¬
curities Corp.; Kidder, Peabody &
Co., White, Weld &
Co. and Merrill.Lynch,
Pierce, Fenner & Beane (jointly);
Union Securities
Corp.; Smith, Barney & Co.

miles of pipeline
estimated cost

335

Alabama, Georgia and Florida at
$8,141,518.

of

March

company's secured indebtedness and capital and surplus.
Charles E. Ide, President, stated that the management
has no present plans to issue new common shares.
The

Georgia Natural Gas Co.
Feb. 19 it was announced a FPC Presiding Examiner
filed a decision, subject to Commission review, author¬

•

and $ale of 100.000 shares of new preferred stock.

without consent of majority of the preferred stockhold¬
ers shall be 20%
(instead of 10%) of the aggregate ot

South

be sold privately through Kidder, Peabody

may

po.

writers— May

stockholders

Halsey,

:

Inc.; Union Securities Corp. and Lehman
(jointly); Blyth & Co., Inc., Smith, Barney &

West Texas Utilities Co.

Toledo Edison Co.

cured

a

it

&

proposal to increase
the authorized common stock from 5,000,000 to 7,500,000
shares and to amend the articles of incorporation so
as
to provide that the limit on the amount of unse¬

South Carolina Natural Gas Co.
Feb.

filed

issifes

June 2.

April 21

include:

Co^and The First Boston Corp. (jointly). However, both

(jointly); Union Securities Corp.; Lehman Brothers
Bear, Stearns & Co. (jointly); Kidder, Peabody &
Co. and Merrill Lynch, Pierce, Fenner & Beane (jointly):
Goldman, Sachs & Co. and Harriman Ripley & Co., Inc.
(jointly). Bids — Tentatively scheduled to be received
on

share. Under-

per

may

Co.

C&tand White, Weld & Co (jointly); W. C. Langley &

Boston

and

before May 20.

or

&

Brothers

Co.

Proceeds—From sale of debentures
plus $4,600,000 from insurance loan, to complete new
plant at Greenville, Miss.; to make improvements at
Yonkers, N. Y. plant; and for working capital. Under¬
writers—May be Morgan Stanley & Co. and Dominick
on

preferred stock at $110

\y|iters.—If competitive, bidders

by competitive bidding. Probable bidders: The
Corp., Blyth & Co., Inc., First Southwest
Co., Rauscher, Pierce & Co., Inc. and Dallas Union Trust

(Alexander), Inc.
was announced stockholders will vote May
20 on authorizing $4,689,625 of convertible subordinated
debentures, which may be first offered for subscription
by common stockholders at rate of $100 of debentures for
each 20 shares held, this sale to be contingent upon the
sale of Sloane Blabon Corp., a wholly-owned subsidiary,
16 it

sale

gage bonds and $18,000,000 of debentures. Proceeds—
Tcycepay $24,000,000 of bank loans and to redeem 35,000

mined

^ Smith

April

announced directors have approved the
in May of $10,000,000 of first mort¬

was

and

shares of $6

company

subsidiaries.

in

vestments

Pierce, Fenner & Beane and
Corp. (jointly); Equitable

& Co.; Union'Securi¬
Bids—Expected to be received in June.

Corp.

issuance

(6/2)

announced

was

Webster

April 10 it

plans to sell addi¬
tional common stock (no par) sufficient to raise about
$15,000,000 of new money. Proceeds —To increase in¬

Shield Chemical Corp., Verona,

&

Securities Corp.; Kidder, Peabody
ties,

scribed for by other stockholders or their assignees. Pro¬
ceeds would be used for expansion program.

on

Securities

additional shares not sub¬

any

the basis of one new share for each
four shares held. Price—$20 per share. Proceeds—To in¬
crease capital and surplus.
:>
shares (par $10)

Lynch,

Sftwue

issue and

of

25%, respectively.
It is anticipated that Peoples Gas
Light & Coke Co. will subscribe for about 67% of the

Second National Bank of Philadelphia

April 14 stockholders of record that date received right
to subscribe on or before April 24 for 25,000 additional

Underwriters—May be determined by

(jointly); Merrill

that company will

announced

bonds

sell

Thursday, April 23, 1953

competitive bidding. Probable bidders: Halsey, Stuart &
C<fflnc.; Kuhn, Loeb & Co. and A. C. Allyn & Co. Inc.

.»

it

construction.

new

...

buyers who

potential "quick-turn"
are

not keen

mitting such data.

on

sub¬
_j

Number 5214

Volume 177

(1783)

Financial Chronicle

The Commercial and

...

have

Continued from page

5

suddenly given up their basic
that they cannot be safe

and must be elected

credit
t

holders.

by the policy¬
the par¬

55

E. F. Hutton Adds

Furthermore,

(Special to The Financial Chronicle)

ticipating policyholders have the
CHICAGO, 111.—Lillian L. Hale
right to vote by proxy on all
has been added to the staff of E.
questions that come before any
F. Hutton & Company, Board of
be Communists?
meeting of the company.
"If you have seen any of the Trade Building.
chosen successors' ruling with the
Surely until our long-time selfthe EPU and GATT, and the Ha¬
carried-over
Palace
Guard, are avowed enemy gives clear evi¬ circulars and other printed mate¬
vana Conference.
E. G. Lindberg Opens
dence
that he has undergone a rial that have been circulated in
And in the recent Czech trials suddenly going ^.into a permanent
reversal of the ^0-year-old Stalin complete change of all his basic the United States in recent months
(Special to The Financial, Chronicle)
the main charge against Rudolph
aims and philosophy, along with I am sure you will appreciate the
LOS ANGELES, Calif. —Ernst
Slansky was that he promoted policies—in matters of either eco¬
effective disarmament agreement, misleading and inaccurate char¬ G.
nomics or politics?
Lindberg is engaging in a se¬
trade with the West.
\
it is only the part of the most ele¬ acter of much of it in the light of curities business from, off ices at
'

•»

.

,

until

capitalism

destroyed—in

is

other words, that the Soviet policy¬

Keep Our Economic Powder Dry!

makers

suddenly have

ceased

to

'

'

.

And

Our Self-Destruction

for

"Trade"

must

ever

as

now

the
Rus¬
objective;

blocking

alert

to

sians'

other

"trade"

needed

raw

avoiding

thus

ensuing

suicide

ments to its ally
Even

in

that

fact

the

sell

continues to

and

sold

;

■f

it

exists

little

very

a

'

of

absence

out

the

in

tensions

the

Indonesia,

Malaya,

pines, the Middle
and Germany.

what

obscurity

he

The

Past

ing

intelli-

take into account the
past as a clue to future behavior.
This is particularly true in dealing with the Russians, where the
where

"'chosen

themselves
have
operate in terms of an

to

entire historical era.

long

the

Throughout

*\~

Lenin and Stalin equally,

years

"Your
me

as

fact that cannot be

forgotten in wishful thinking.

impracticable to cite here

list of direct and specific
quotations throughout the years
spelling out Lenin's and Stalin's
unswerving commitments to the
overthrow of the capitalist coun¬
as an

and

cannot

One

or

the present zig-zag strategy

on

Foundations of
VII):
"The
object of our strategy is to gain
time, to demoralize the enemy,
Stalin's

(from

Leninism

third

the

of

must

pany

(Chapter

assume

even

after

typical

following

line

ap¬

peared in "Pravda": "The Russian

people must fulfill their sacred
duty of strengthening the mighty
Soviet armed forces and other So¬

service."
And
again last week before the United
intelligence

of his

Nations Vishinsky gave one
choicest

re-runs

of verbal

lynch¬

ing of the West.
matter

peace,
assume

at

directors

be

least
of

a

RAILWAY

how
can

that

we

with

Stalin's




we

any
own

the

.

I would be

information

general

from

hear

to

at

you

associated with

nedy has become

ness

White, Weld & Co., 231 South La
Salle
with

He

Street.

April 27, 1953.

:

April 15, 1953.

"

-

.

v

Stifel, Nicolaus & Co., Inc.

NOTICES

DIVIDEND

■

COLUMBIA PICTURES

regular quarterly dividend
per share on the 5%
Preferred Stock
has
been
declared
payable

Convertible

meeting held April IS, 1953,
declared
of

com-

a

June

quarterly dividend

$1.06

1, 1953, to stockholders of
15, 1953.

record May

share on the

per

|sc?:|

of 31%0

The Board of Directors at a

one-

WooIndustries

A

CORPORATION

$4.25 Cumulative Preferred
Stock of the company,
able May

NOTICES

/ A regular quarterly dividend
of 300 per share on the Com¬
mon
Stock has been declared

pay¬

15, 1953, to stock¬

holders of

record May 1,

payable May 29, 1953, to stock
holders of record May 15, 1953.

Vice-Pres. and Treas.

M.

1953.

6,

payable

12,

L. G. CLARK, Treasurer

formerly

was

the Capital

on

1953, to stockholders
of record at the close of busi¬

May

111.—John X. Ken¬

CHICAGO,

share

Stock of the Company,

Chronicle).

Financial

dividend of fifty cents

a

Weld & Co.

With White,
(Special to The

a

(50(f)

A. SCHNEIDER,

E.

GRIFFIN,

Secretary'Treasurer.

of Nor¬
will be
pursuant to the By-Jaws, at the principal
office of the Company in Roanoke, Virginia, on
Thursday, May 14, 1953, at 10 o'clock A. M.,
to
elect
four
Directors for
a
term of three
Meeting of Stockholders
Western
Railway
Company

Annual

and

held,

At
of

meeting of the Board of Directors
Gamewell Company held on

a

The

of

record

at

the

close

busi¬

of

COMPANY

voted:

.

Stockholders

ELECTROCHEMICAL

HOOKER

April 17, 1953, the following dividends
were

years,'

$.25 cents

April 16, 1953, will be entitled to vote
such meeting.
By order of the Board of Directors.
L. W. COX, Secretary.

ness

at

The Board of Directors has de¬

time."

MEETING
STOCKHOLDERS

OF
The

TECHNICOLOR, Inc.

any

ANNUAL

OF

NOTICE

1953

per

share payable May 15,

close of business

Cumulative Preferred
Dividend

Stock

May 5, 1953.

end dividend of $.25 cents
share payable May 15, 1953 to
stockholders of record at the close
A

$4.25

stockholders of record at the

to

year

per

of business May 5,
W. C.

1953.

declared

1953

Beck, Treasurer

Company

Stock,

Preferred

close

record

of

of

of

as

Southern

California

Edison

Company

1953.

June 2,

business

of

15,

dividend

its $4.25 Cumula¬
payable June 26,

stockholders

to

1953

Hooker

April

on

quarterly

a

$1.0625 per share on
tive

of

Directors

of

Board

The

Electrochemical

the

DIVIDENDS

GOULD-NATIONAL
BATTERIES,

Stock

,

Series B

Manufacturers of Automotive

Meeting of the Stock¬
holders of Allied Chemical & Dye Cor¬
Tlie Annual

DIVIDEND

poration vvijl be held at the principal
office of the Company, No. 61 Broad¬

year;

vL**..
action
.

a

proposal

declared

$1.05

per

The Board of Directors
a

.

today declared

regular quarterly dividend

per
.

upon

1953

share
-

on

r.'

in¬

author¬
ize the Company to issue 150,000
authorized but unissued shares of
Common Stock of the Company for

,

to

purposes of said plan without
offering - such shares to the
holders of the Company's outstand¬
the

first

ing stock for subscription;

and

(3) To transact such other business
as
may properly come before the
Meeting.
Stockholders of record as of
vote

W. C. KING, Secretary.

Dated, March 19, 1953.

Directors

declared

a

of 75<t per.
Common

on

May 1 to shareholders
of record April 21, 1953.

of

Cumulative Sec¬
Stock, Series B, payable

CUMULATIVE PREFERRED STOCK
4.88%

SERIES

DIVIDEND NO. 22

stockholders of record

1953 to

business June 2, 1953.

The Boaftd of Directors has

authorized the payment

of the
following quarterly dividends:
251/2

Dividend

Stock

share

cents per

4.08% Series;
of

Board

The

Electrochemical
1953

declared
Cents

to

a

business

on

April

15,

of

quarterly dividend

($.50)

Stock,

stockholders

close of

^Directors of Hooker

Company

share

per

payable
of

May

record

May

1,

as

on

29,

of

its
1953
the

1953.

ANSLEY WILCOX, 2nd

Secretary

on

the

Cumulative Preferred Stock,

;

30V2

•

Cumulative

•

share

cents per

><

on

the

Preferred Stock,

4.88% Series,
The

above

dividends

are

payable May 31,1953, to stock¬
holders of record May 5, 1953.
Checks will be mailed from the
Company's office in Los An¬
geles, May 31, 1953. y
p.c.

A.H.DAGGETT
President

^

share on its

Common

Fifty

Stock, payable

15,

dividend

quarterly

of the close of

Common

dividend

share

April

21, 1953.

today

Hooker

April

the close

March 19, 1953, will be
at this Meeting. The
transfer books will not be closed.

of business
to

record

The Board of

26,

on

SERIES

DIVIDEND NO. 13

of 56]A$

shareholders of

Dividend

centive stock option plan and

as

the Cumulative Preferred
Stock, payable May 1,

\v

Common

that the stockholders approve an

June

of

Directors

Company
a

Preferred

ond

dirt£%s for the ensuing
J

.

To take

Batteries

Preferred Dividend

Borough of Manhattan, New
York, N. Y., at one o'clock p.m. (Day¬
light Saving Time), on Monday, April
27, 1953, for the following purposes:
way,

To elect

Electrochemical

NOTICE

Industrial

and

of

Board

The

TO THE STOCKHOLDERS:

4.08%

Dividend

SAINT PAUl, MINNESOTA

/

CUMULATIVE PREFERRED STOCK

Second Preferred

Cumulative

INC.

NOTICE OF ANNUAL MEETING

entitled

greatly

with

if you desire more

management;

WESTERN

April

Treasurer

,

you

directly

communicate

glad

suggest

I

company

COMPANY

Virginia,

1, 1953.

May

GOULD MOREHEAD,

R.

April 21, 1953

ticular

n0n-shareholders

DIVIDEND

record

of

interested in the shares of a par¬

;

.

holders

On the other hand if you are

NOTICES

AND

NORFOLK

Roanoke,

(2)

logic

Again,

shore

Payable May 15, 1953 to stock¬

1953.

the offensive."
Stalin's death,

to

And

No

and

be

and in

company

companies.

—

(1)

crave

971/,

insurance

mul?

1951
percentage
was
raised
to
% ,n the case of the largest

the

repre-

States

United

MEETING

and to accumulate forces in order

viet

principal

the

senting

the other

triumph in the end."
And one Stalin quotation bear¬

the

to

given

socialist economies
co-exist
in
the
same

must

later

has been

name

companies,

of the

QUARTERLY

NO. 29 DECLARED

Common Stock—30^ per

Department

+

o+

distributed

size

and

is unthinkable.

r

law.

operation indispensable
of communism,
basic tenet that the

against us," was the Lenin theme
song.
"The* existence of. the Soviet Republic side by side with
imperialist states for a long time

ing

i qi n

"Whoever is not with us is

world.

;

^ ^^^ovidesSnd has
Tw
iff' i

the

to

capitalist
,

nfesLTrequired to besegre^ted

It is appar-

advance

the

to

participating insurance.

*he™

Canadian life
complies that is being

counsel of the-Association

folk

the long

tries

to

me

one.

the

seen,

30-year-long religion that is
conveniently

1

fuart of the business ™ntten

be-

shar«of

of

—-a

is

information

have

recognized dealer in inshares." May I as general

a

surance

overthrow of the free nations

It

be mislead-

Participating, policies. The per<*ntage. vanes with individual
companies but by far the greater

I

at the volume of

inaccurate

insurance

have we

.1: the

a

to

seems

Russians'
frankly proclaimed dedication to

consistently

''■*
months

concerned

and

companies with share capital to
write both participating and non-

SBBSS&* s&s !$»

they

v

-'In the first place, the insurance
law of Canada permits Canadian

letter

DIVIDEND

clared

exLtflh sSore%uartoseStatodlhl the

overwhelming, and

so

of Mr. Foster's

the United States.

in

manifes¬

to

evidence is

features about

are some

impossible.

the sig- insurance
"new circulated, doubtless in good faith,

of ordinary human

tation
vgence

text

about the

.

I real thing,"'we cannot disregard
the fact that it is only a

(70 in all) in-

and United States stock companies not
only most misleading, but actually

misleading

culated in the United States.

look," hungry as we are for "the

.

termed

companies- that is being cir-

ance

come

over

"There

REGULAR

mystery about the

no

of Insurance at Ottawa is the best

cooperation

your

GAS CORPORATION

on

in getting
the facts before the American investing public.

States, vite

Russians'

the

of

nificance

business in Canada

the shares of Canadian life insur-

what

the

invest-

;

.

.

without

shares

Doubtless the Federal

inaccurate information relative to

•

_

"There is

misunderstanding

'

.

SUBURBAN PROPANE

recommends the pur¬
their

of

operations of Canadian life insur¬
ance
companies and no lack of
sources
of reliable information.

quarters in Toronto, Can., reports Canadian life insurance companies
that he is concerned regarding that make any comparison with

III Wishful Thinking
In

chase

NOTICES

DIVIDEND

policyholders' compa¬
dealer in the United

who

States

Boulevard.

Wilshire

Nevertheless, they are

century.

knowing all the facts is rendering
a real disservice.

British and Canadian, carrying

Officers Association, having head-

Philips follows:
"In recent
Austria

the
East,

of

number

a

'

'

Leighton Foster, General Counsel of the Canadian Life Insurance

of

areas

Forget Entire

Cannot

.

to

ment dealers in-the United

undiminished

,

:

'

.

R.

and in
overall world

an

leave

settlement,

'

•

.

letter, dated April 16, and

a

sent

Formosa;

and

3563

his clients

regarding full implications of the Canadian insurance law

•

Indo-China

proud of

are

enviable
a

Misleading and Inaccurate Information

■

.

In

The Communists
better opportunity to

up

We

life insurance com¬

they have established an
record over more than

panies;

military de¬

fense fronts!

dealers in U. S. in which he states grave

ground forces in North Korea.
And similarly, a truce in Korea
would increase the threat against
the

as

the

Leighton Foster, General Counsel of the Canadian Life In¬
surance
Officers Association, addresses letter to investment

arma¬

their stockpiles behind
the front; they will gain immunity from air attack behind their
lines; and they could get freedom
to reconstruct their airfields and

'

well

as

on

R.

China."
settle

will

Korea

will have

'

economic

foregoing.
Canadian

prudence

dry

About Canadian Life Insurance Shares

armistice or cease-fire

an

'

'

and
establishment,

powder

primarily

Protests

there militarily.

build

and

enormous

our

keep

a

concealed

never

Malenkov

with^an
military

common-sense

to

the
our

mentary

is:—Can

nies and any

our
from

mirage of trade advan¬
tage.
As Mr, Vishinsky frankly
conceded in the United Nations
last month, "the Soviet Union has
chasing

^question

that

assume

sorely growing
materials and capital

equipment;
national

we

company,

of

' acquisition

namely,

realistic

The

be

we

Longer> Communists?

No

hale,Treasurer

April 17,1953

April 10,
TT

1

m * + *

Si

The Commercial and Financial

(1784)

W

Chronicle.Thursday, April 23,1953

Without

BUSINESS BUZZ

nent

more

foreign

billion

A

BeKnd-tk-Scene Interpretations
from the Nation's

•

•

•

fj

way

no

*

their

public

moderate

equitable

the small-

off tax revision, even
•est smidgen of a

lower

from

WASHINGTON, D. C.—Write

start, as a pros¬

Short

pect fbr the first session of the
453rd Congress. Then come next

ening

January, take another look.

income,

This is the reaction which has

greeted

the
last

week

support

Conference

much
mental

[For full text of Mr. Folsxrai's address turn to page 7—
wry.

overall

action:

Possibly
view

Ibudget

the

of

position,
which

^reforms

Vr* niirable

tight

very

of the
clearly debe

to

.

few

post¬

in

has

foundation

the

now

Despite

■

to bring

of

for

>

a

tax

he

Mr.

im¬

Folsom

as being a
firmly committed to
much common sense

as

into the operation of

can

laws, and

man

im¬

an

large volume

a

his visitors

who is

bringing
as

the

Com¬

new

'

Itower

the Feed Bill, and further points

\ On the other hand, some of
the reports of the intentions of

out that all told

these officials may be mislead¬

Administration

against

$8 billion

some

ing.

of expiring taxes must be con4
fddered

as

a

problem in face of

xvhat he reveals to be

wuproductivity
than former

a

President

Since

Truman

budget- balancing
tax" reduction

of

mum

tax

overall

pathetically

second,

revision

a

becomes

Earlier

opinion, it
third.

poor

this

would

broad

a

what

were

agreement,

In

what

carder.

Then,- with

to how much

spared,
ment

there

on

the

in

and

official
~

sources

could

It

was

Jloiise

cises,

then proposed that the

Ways

and

Means

of

did

this

only by

pointed

better
tax

to

in

than

income

whereas

T

"A

of

the

13.7%

all

U.

S.

from

ex¬

ob¬

is

of

a

he said.

Capitol Hill observers
-Agree heartily with Mr. Folsom's
Judgment that over the long
period, reform of inequities will
expand
business,
corporation
personal income, and hence
...v,.the tax base.
Long range, the

Treasury

itself

will




benefit

exist when

pushed to
He

an

ac¬

tax

needs

are

and

very

repressive

levels,"
that

system is

desirable

minimize

source

observed

cially
to

any one

excessive

further

diversified
•

achieving as much economy
possible without too great a

may
some

surprise
Repub¬

political sacrifice.
The House
Appropriations Committee at¬
tempted to foreclose the issue,
and the

resulting action on the
Appropriations
bill
on
both

floors

also

tend

may

same

time the House Appropria¬

the

tions

Committee,

to

force

Micheles

Hill

How

Sales

to

posed to cut a
spending meat out of the public
housing
and
slum
clearance
programs. The Committee also
would compel the sale,-at a dis¬

main

outlines

the

before

the

of

Many farm observers believe
that the final outcome of
than

The explanation, of course, is
that

Republican

Congressional

is weak

to

negligible

Chicago, Baltimore, etc.,
public housing

cally important.

except

Republican
in

the other

On

hand,

for

the

is politi¬

the

rural

standing

farm

is

for

Your

Water

—On

if

Y.

Machines

—

Street, New York 4,

request.
Men

and

Waddill Catchings and Charles F.

System

count if necessary,

Leads

Booklet

—

leads—Mailograph Company, Inc.
(Mr.
A.
Kates, President),
39*

Money,

See Two-Price

McGraw-

—

discussing
sources of mailing lists,
form of
mailing pieces, percentage return
expected, costs, etc. in developing

with deliberation.

of the

of $1 billion
mortgages of the Federal
National Mortgage Association.

Ad¬

housing program
study can be made

Get

Force

ministration's

it did, pro¬
great deal of the
as

Dean

Book

Company, New York
City—Cloth—$3.75.

more

of

Roos—Little, Brown & Company,.
34 Beacon

Street, Boston 6, Mass.

stewing about
the future of the farm problem,
in both Congress and the Ad¬

—Cloth—$2.50.

ministration,

sources

a

1954

year

to

turn out in
advocacy of what

be

amounts
on

will

farm

to

a

two-price system

products. It will be

variation

of

the

old

Haugen

export

scheme

New

the
of

England's

McNary-

Re¬

Use—Report of

of

National

a

Financial

and Their

Committee
the

New

England!

Planning

ciation, 30 Pearl Street,

Asso¬

Boston,.

vetoed

debenture

by
President
Coolidge in the late '20s.
With Secretary Benson's main

areas.

Mass.—Paper.
Trade—and

Lamb

ney

—

Aid—Beatrice

Pit¬

Public Affairs Com¬

argument against arbitrary and

mittee, Inc., 22 East 38th Street,.

hand, there is always an
interest
in swiping
as
many

high farm commodity price

New York

votes

zations

With the White House, on the

possible
Democrats
in
the
as

from

big

the

cities.

ports,

the

major

farm

sup¬

in

agreement. In fact, they backed

Hence,

the lower

some

idea

in

gress.

even
though there is
genuine proposed economy
the
House
Appropriations

cuts in the

Independent Offices

bill, this bill
for the

poses

White

It also raises

lem.

The

a

problem

House.
a

Administration

hoped to try to frame

has

an over-

"flexible"

support

adopted in the 80th Con¬

These farm leaders think that
too

high

continue

further prob¬

or

which

of

only

these

will

supports
to

pile
war

up

16, N. Y.—Paper—25c..

organi¬

for the most part

are

simply

surpluses

Workers'
1953

—

Story,

Labor

bor,

The —1913

Yearbook

United States

No.

II

—

—

Department of La¬

Superintendent

ments, U.

of

Docu¬

Government Print¬

S.

ing Office, Washington 25, D. C.

—Paper—45c.

and donations

surpluses

guise of lend-lease

under
can

the

TRADING MARKETS

relieve.
Riverside Cement "B"

this

likely to give

.Senate.
Most

see

licans fighting against a diminu¬
tion of farm subsidies at the

Gorton Pew Fisheries

/

ceptable (revenue) system than
is

to

view

a

sources

better approximation to
can

housing programs with

Foreign Policy Without Fear—
Vera

National Company

diversification

revenue

24.2% of its

from

House, if possible, should also
pass it in 1953. This would push
the legislation
to a forward
position for 1954 action in the

^

the

balance

revenues

revenue

only
category.

mittee should attempt not only
to report out a bill, but that the

to

other

I^e

tained

Com¬

Superficially, it
observers

Fed¬

a

all housing program, balancing
subsidies
among
the
various

as

House Cuts Pose Dilemma

South,

that Canada derives

Delay Hearings

...

strongest

a

re¬

substantially,
recently in that

done

was

decades

breakdown," the Under Secre¬
tary observed. He pointed out

agree¬
bounds

as

Federal

prevails, with the

Federal
Will

Folsom

liance "on any single form of
taxation is likely to lead to its

as

be

Conference

tax accounting for
80% of Fed¬
eral revenues. A dominant re¬

could be

metes and

for

been

not

ability to

country."

any

Folsom

inference.

has

the

duce income taxes

nearly two

in

to

where

endorsing the idea of
Mr.

Canada

York,

f

Mr.

than

In

standing

eral sales tax.

now

overall revision bill.

an

to

need

to

what

figure

a

revenue

Industrial

address,

.

the most serious in¬

reforms

.

closer

came

equities in the tax system, and
what priority should be given
tti

*'

his

Board

start

as

'

'

-

Bearings this month. The hear- '
Bigs would be for the purpose of
crystalizing as much as possi¬
ble

J

'

:

cises

unrelated

In the big urban centers of New

Federal Sales Tax

both the
Capitol had

year

Committee

sym¬

to

Hints Need For

Treasury and the
Mgher hopes for overall reviatom It was planned by Dan
Meed that the House Ways and
J&ffeans

own

to the realities of life.

ances

third. In the current

is rather

Treasury

depreciation
schedules bearing a closer rela¬
tionship than do present allow¬

be¬

certain mini¬

a

'the

on

be expected to listen

may

.•

first and

that)

in

suggested,

depreciation. Such a
liberality is hardly to be ex¬
pected, although the Treasury

estimated, at least for the cur¬

comes

been

particular,
ticket"

laws

rent year.

has

will let business "write its

greater

tax

of

It

ing to put business ahead of your personal pleasure?"

does T. Cole¬

so

Andrews,

missioner of Internal Revenue.

fmllds up the case of the Eisen-

"Ten days off last month to have your appendix out—
four days off last week for the flu!—when are you go¬

be done through

can

revenue.

man

Folsom

Mr.

for

about equitable relief

mediate loss of

:

context,

outlook

regulation, and without

«iOn.

in

the

where this

presses

■-

,

be expected to work hard

may

as

For

_

delay
in / substantive
legislative action, the Treasury

the

'

On

r

Regulations

Capitol Hill inter¬
speech, of a "good
amany" things being done next
year in the way of overall reviIiope,

prets

the Los

a

further

]

;

Treasury Works

■-J-

Viewing Mr. Folsom's entire
fgmech, the possibility of "a few
things" being done this year is
regarded as most optimistic. In
the light of that context, there
is not

Co., 218
Street, members of
Angeles Stock Exchange.

been abandoned.

now

,

expendi¬

tures."
„

staff of Neary, Purcell &

West Seventh

to

it is only

ANGELES, Calif.—Joseph

A. Harmath has been added to the

Committee
will
report to the

the
bill

a

LOS

on

June.

done

reduction

lantial

until

(Special to The Financial Chronicle)

Any idea that the
House
can
adopt a tentative
overall revision bill this year

until there has been sub-

over

hearings

House this year, but

this year;, a
good many may be done next
jyear, and others will have to go
things

probably

views.)

Neary, Purcell Adds

Means
will not

and

revision

own

possibility.

poned or introduced on a limited scale. We hope to have a

n

Ways

public

its

have

some

are

have

may

begin

the "Chronicle's"

.

the

Committee

and may or may not coincide with

now

can

be projected.

Hence

to

price.

govern¬

spending than

JSd.] In speaking of the Treas¬
ury's unquestioned deep inter¬
est
in
overall
revision,
Mr.
!F6Isom said as to prospects for
"In

of

rate

lower

a

where

some

pretation from the nation's Capital

tial achievements in the way of

by

a

(This column is intended to re¬
flect the ubehind the scene" inter¬

overall revision must wait for a

3Board

and

with

ket

for

would

on,

Marion B. Folsom,
TJndfer Secretary of the Treas-

Industrial

Xfetkraal

levied

price

price,

eliminating

of

so

export

between
the
higher (if
relatively
moderate)
support
price and the lower world mar¬

periods,

Hence it is agreed that substan¬

the

before

and

be¬

ence

time curtail Treasury revenue.

a

full-dress

formal,

address

taxation

old

an

corporation

toward

start

a

is

raise funds to offset the differ¬

however, a short¬

depreciation

of

it

appearances

charge

more

a

tax system.

run,

double

and

rates

multi-

fore Congress, are leaning more
and more toward the idea of a
world

r

perma¬

a

nostrum, these farm leaders, in

iv

^

on

scale, there will
of getting rid of

these surpluses.
Even
though

\ fXlSt

JljL § wvv

Capital

dollar

be

on

less

or

aid

I

Foreign Securities Specialists

Wico Electric
I
t

large, in order
inequities

I

sures." As to Canada, he stated:
"The greater reliance on ex-

Louis DeJonge Pfd.
Congress St. Associates

P.ARL MARKS & C*Q. INC.

a

pres¬

i

Thomas G. Plant Pfd.

espe¬

economic

Cheney Bigelow W Works
Oliver Bldg. Trust

Rrm Trading Markets

!

"both

Stores

A. & G. J. Caldwell

i

revenue

when

Caribe

FOREIGN SECURITIES

%

60 Bread Street... Haw Tort 4, H. Y.
Tel: HJUjoyw 2-0050

Teletype NY I 071

.

LERNER & CO.
Investment

IB Post ©ffie«

Securities

Square, Boston 9,Mass.

Telephone

Teletype

HUbbaurd 2-1990

BS 69