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Final Edition
ESTABLISHED
in 2
Reg. U. S. Pat. Office
Volume
165
Number
4588
New York, N.
Reduce
Some Comments
Prices,
Truman Urges
President expresses
Art oi
prices; and urges all cooperate to
keep them down. Says we must
Jhave
prosperity
Dr.
example free
as
enterprise benefits people.
Cites
price rises and asserts reductions
will maintain prosperity. Denies j
farm
parities led to high food
costs.
^
<
;
■
^President Harry S. Truman, in
address in
an
April
at
21,
Associated
New York
City on
luncheon of the
a
discussed the
price situa¬
tion, which, he
Press,
asserted,
dark
a
in
of
chief
economic
lapse
of
M;'
"
and,
the
of
The complete text of the Presi¬
Freedom, in the American tra¬
dition, is always coupled with ser¬
vice.
The American press—a free
— must never forget its ob¬
ligation to the American people.
(Continued on page 24)
press
the market
Dr. Melchior
place
is
chorus
governed
that has been
by
try out of the
coun¬
depression.
Now,
prices
which
Nov.
serves
idea
of
fresh
Blum
of
on
Pictures
of
IBA
Meeting in Monterey,
on
15
and
Nations
April 10
Geneva, Switzerland. At this Second Session, multilateral nego¬
between the members of the Preparatory
on
31
level
177.20.
there has
ever
been
a
v;'.
a-'/
i
chorus of
pessimism by
professio n a 1
economists
t
the
o
on
Established
request
as
Anthony Gaubis
busi¬
outlook during the six to
months immediately ahead.ness
'
These
back
forecasts
to the
can
12
traced
be
of econ¬
omists
who
were : predicting
a
major
depression
within
six
months after V-J Day, and at that
time
same
started
whether
;,
group
ten
the
debate
would
we
twelve
or
as
have
million
to
eight,
unem¬
by the spring of 1946. It
subsequently admitted that
propaganda purposes behind
the
;; ; (Continued
On
page
32)
on
page 42)
.
Group
p.
State and
27.
STATE
R. H. Johnson & Co.
.
'
*Prospectus
grow¬
ing
Aerovox Corp.
Havana Litho. Co.*
of
How¬
The stage will then have been set for the Inter(Continued
Texas
Oct.
between
The work of these meetings re¬
others, in a preliminary draft of the
below the Dec.
Committee directed towards the reduction of tariffs and the elimina¬
26)
page
.Indus¬
Average,
was
in
(Continued
Jones
o w-
ployed
tiations will be carried
billion
300
$ D
e
at the Second Session which began on
bright
magic of words, while the French
a
United
the
budget
running
b y
t h
(I.T.O). It is hoped that
the work will be carried forward and completed
controlling prices by the
is
London
in
Charter for the International Trade Organization
de¬
Charles Prince
credit for the
met
26, 1946.
sulted, among
which is supposed to be halted by
(Leon
measured
.
as
5% above and
I.T.O., as
these agencies' alleged
partici¬
pated in nor sent observers to the First Session
of the Preparatory Committee of the United. Na¬
tions
Conference
on
Trade
and
Employment
displayed by some
it is the continuous rise of
PRINCE
The Government of the USSR neither
talks,
people who tried to talk the
CHARLES
Fund, is based on
domination by United States. Points out Soviet
would here be involved without her indispensable
veto power. Holds Moscow similarly has joined
none of UN's specialized agencies because of their
claimed conformity with interests of United States
because of its control of the purse strings.
•
lower. prices,-
Palyi
as
whole,
a
also from World Bank and
tion of preferences.
Vacuum Concrete
During the past three months, business activity has held at the
highest levels touched in any peacetime year. At the same time,
Political economist asserts Russian's current abstention from
preaching
pious speeches.
dents address follows:
i
tuating within
joined
the
same
Address
,
has been fluc¬
By DR.
Eco¬
nomics
(3) "psychology climate" of
trial
Agri¬
ket
at
low;
Why Russia Continues to Snub
It is the same
naivete of believing that the mar¬
time, strongly denied that the
guaranty of parity prices to agri¬
culture was a cause of high food
prices.
Text
of
his program of
"'"v.,/"prices,
the ^Bu¬
ate to support
President Truman
lower
Commerce,
cultural
far¬
bor to cooper¬
and
reau
col¬
and la¬
are
propitious for rise; and (4) potential demand for
equities related to supply is large.
seems
econo¬
-
and
n
calked upon
mers,
de¬
Treasury
a
and
industry,
(2) price earnings ratios
caution
'
Business Activity
retaries of the
of
a
:
j
mist, his Sec¬
pleaded for
price reduc¬
avoiding
be
clining rapid¬
ly
after ■ the
President, his
nomic sky. He
means
political strategy.
Expects business readjustment but holds
kept moderate by adjustment of current industrial,
;(fiscal, and political difficulties. Concludes stock market is in buying
range, for following additional reasons: (1) stock yields are high;
as
extent will be
commodity prices were controlled by well-meaning pro¬
nouncements, exhortations, sermons, prognostications—and not by
supply and"
demand—they
eco¬
as
I
If
would
Ripe for Major Rise
Investment adviser asserts business is being baselessly talked down
V
to bottlenecks at home and abroad.
cloud
tions
Forecasting
market, and contends reversal of upward trend will not come
as in 1920, through money scarcity. Lays price distortions
about,
Copy
a
By ANTHONY GAUBIS
speeches, calls attention to neglect by business recession fore¬
casters of heavy world wide demands for food, commodities and
other products, together with prevailing hurricane of spending.
Says it is economic illiteracy to assume production is pricing itself
out
Price 30 Cents
Stock Maiket
Palyi, in pointing out rising prices cannot be halted by pious
was
the
y., Thursday, April 24, 1947
By DR. MELCHIOR PALYI
concern over
Section 1
-
/
the Dismal
on
Sections
AHD
Municipal
MUNICIPAL
Bonds
1927
BONDS
INVESTMENT SECURITIES
Hirsch & Co.
f
Members New
York
Bond Department
Street, New York 5
THE NATIONAL CITY BANK
Stock Exchange
BOSTON
other Exchanges
and
64 Wall
PHILADELPHIA
HART SMITH & CO.
v
25 Broad St., New York 4, N. Y.
HAnover 2-0600
Chicago
'
Geneva
Albany
Baltimore
Buffalo
Syracuse
(Representative)
Sranton
52
Woonsocket
Bond Dept. Teletype: NY 1*708
.Acme Aluminum
NATIONAL BANK
of INDIA LIMITED
Bankers
to
the
Government
in
Head
Conv.
LAMBORN & CO.
99
WALL STREET
.
Solar Aircraft
90c
In India, Burma, Ceylon, Kenya
Colony and Aden and Zanzibar
Subscribed
Paid-Up
Reserve
Capital
Capital
Fund
Exports—Imports—Futures
_
The
Bank
conducts
banking
*
and
description
exchange business
every
of
also
undertaken
120
DIgby 4-2727
New
Preferred
York
Broadway,
Telephone:
Bell
NATIONAL BANK
;
Brokerage
.
Corporation
i
_t j
"V v
Stock
•
/
■
Exchange
New York 5, N. Y.
REctor
Teletype:
Hardy & Co.
Members
New
York
Stock
in
N
on
Analysis
Y.
Curb
upon
Exchange
request
New
York
Curb
Exchange
IRA HAUPT&CO.
Members
and
Exchange
Members
30 Broad St.
New York 4
2-8600
NY 1-635
Indiana Service
and Dealers
*
request
THE CITY OF NEW YORK
OF
Toronto
Dealt
'
Trusteeships and Executorships
Montreal
THE CHASE
for Banks, Brokers
Reynolds & Co.
Members
%
1-395
Service
Company
*Prospectus on
•V';"', ';■■■;•
•'; :
£4,000,000
£2,000,000
£2,200,000
HAnover 2-0980
Bell Teletype NY
New York
Assn.
Conv. Preferred
Conv.
SUGAR
Members
WILLIAM ST., N. Y.
Bond
*Twin Coach Company
Branches
■'
Security Dealers
■
'
Office:
26, Bishopsgate,
London, E. C.
York
Alloys, Inc.
Preferred
Detroit Harvester Co. Com.
NEW YORK 5, N. Y.
Kenya Colony and Uganda
New
Willkes-Barre
Springfield
OF NEW YORK
Harrisburg
Pittsburgh
London
Dallas
Williamsport
Teletype NT 1-210
Cleveland
Troy
Tel. DIgby 4-7800
Tele. NY 1-733
'•
111
York Stock Exchange
Principal Exchanges ■<;
New
other
Broadway, N. Y. 6
REctor 2-3100
Boston
Teletype NY 1-2708
Telephone:
Enterprise 1820
Thursday, April 24, 1947
COMMERCIAL & FINANCIAL CHRONICLE
THE
2
(2194)
Trading Markete in*
Taxation for Free Enterprise )
Standard G & E, Com.
Rails
Old Reorg.
Phenolic
Amer.
and
ing standards
trolled,
KING & KING
No
SECURITIES CORP.
Established 1920
Sy
Members N. Y. Security Dealers Assn.
of
/
Exchange PL,
one can
we see
doubt that the
uation
has^—
•
1
*
also
greatly with needless figures.- ,The Presi¬
changed since dent proposed a budget of $37.5
the '30's, no¬ billions of expenditures for fiscal
'.'■'v', ,/v
Huron Holding
the
in
tably
field.
fiscal
We
Jones Estate Corp.
went Into
the
war
a
Kearney & Trecker
Federal debt
of $55
& Kaiser
billions}
out
came
we
with
Standard Screw
with
a
debt
nearly
of!
$ 2 7 0
billions.
Federal
MitclielUCompiuj
120
Gov¬
lected
Roswell
Magill
ent
taxes
about
with
compared
fiscal
dividual with
an
1946,
128
increase
Savoy Plaza
of
dens
magnitude
its
81 Nassau
5
Street, New York
Teletype NY 1-1548
we
England Gas
New
that
the
ing it
Common
—
haps
free
New
York
Tel.
Curb
REctor
of
the
four
freedoms pro-
claimed by
President
Mis¬
Roosevelt
when
he
and
Winston
Churchill
Exchange
The
signed the At¬
Federal
G.
Hoffman
lantic Charter.
:'
An
address
by Mr. Magill, of
the law firm of Cravath, Swaine
&
Moore, before the Academy of
Political Science, April 17, 1947.
<
is
The freedom that thrills
try not to bore you
2-7815
there
us
But
Budget
for.
which makes pos¬
sible the fullest use of our capa¬
bilities as individuals—the free¬
dom that fosters the maximum
i$ the freedom
Issues
>
We Maintain Active Markets in
opportunity for growth and devel¬
opment materially, intellectually
spiritually—again as individ¬
and
U, S. FUNDS for
CANADIAN BANKS
Pfd.
neither
Bell
N. Y. 5
Teletypes—NY
a
City Units
Members
64
WALL
New
York
1923
Curb
r
ST.
*
HAnover 2-9470
Teletype NY 1-1140
theXommittee for Eco¬
nomic
Development, under the
title of "Freedom Has Its Price,'
the following statements appear:
"Everything that is worth hav¬
ing has its price, and freedom is
no
exception.
But it cannot be
bought with money alone.
"Our forefathers made the ini¬
V''
Exchange
NEW YORK-5
lished by
work
"The freedom to think, to
and
to
MICHAEL HEANEY, Mgr.
WALTER
KANE, Asst. Mgrw
Joseph McManus & Co.
Members
effort which these
men
is a
It has made
and women bequeathed to us
precious possession.
New York Curb Exchange
Chicago Stock Exchange
through earnest
progress
and able
Securities
down to us.
handed
they
Curb and Unlisted
the freedom that
tial payments on
New York 6
39 Broadway
Digby 4-3122
The
nance
never
Teletype NY 1-1610
bought
install¬
purchase
Kingwood Oil Co.;
generation to gen¬
lib¬
The thoughtful and
A Crude Oil Producer
women of
again called
and
men
today
are
to contribute to the
of their heritage.
payment must
"That
Canadian Securities Dept.
•
Price about
mainte¬
be made
Analysis
on
forefathers made it
(Continued on page 36)
I
/•
1%
Request I1
i
»
by us as our
Hanover 2-4850
&
upon
is
freedom
"But
America
CANADIAN UTILITIES
Dealers Assn.
1-1126
to achieve nor to
booklet recently pub¬
easy
In
hold.
is
defined
thus
as
erty-loving
CANADIAN MINES
&Teene<m4Compon.u
87 Wall St.,
Ass'n
Common
Established
Freedom
ments run from
CANADIAN INDUSTRIALS
England Co.
Members N. Y. Security
&
Frank C. Masterson & Co,
uals.
outright.
United Piece Dye Works
&
Tudor
—
eration.
Com.
Detroit Int'l Bridge
tion in the world.
,
Newmarket Mfg.
Northern New
(Va.)
Stock
America the most prosperous na¬
Boston & Maine R. R.
All
Common
They
You are all reasonably familiar much more than mere negation to paid in terms of blood, work, in¬
foresight and constant
with the basic fiscal facts, and I the freedom that we Americans telligent
have been willing to fight and die alertness to protect their liberty,
shall therefore
NEW YORK S
General Aniline & Film A
from
fear were two
Paul
Members
120 BROADWAY,
.
and
freedom
free
the greatest threat to the
enterprise system in this
1.
York Stock Exchange
New
re-
want
country today.
McpONNELL&fO.
of
i ction
r
Freedom from
taxation, not merely the
sheer burden of taxation, is per¬
Sold — Quoted
t
s
directed
Bought
ab-
sence
of my address
that I accept the
fair chance to work.
a
Freedom, as
the
is
It
private enter¬
prise system has proved to be the
best system for our economy, and
that we should preserve it by giv¬
& Electric
Central States Elec.
what we mean
usually defined, is negative
character/*
1 n
philosophy of the previous speak¬
ers:
Teletype NY 1-1843
Eastern Racing
by this word "freedom."
title
very
shows -further
Street, New York 5
Telephone: WHitehall 3-1223 *
Corporation
should, first of all, have clear in mind
My remarks will not change
The
Preferred
&
Preferred
Perhaps
that orientation, for taxation, too,
is primarily a domestic concern.
7-4070
Telephone COrtlandt
Bell System
This morning's program is lim¬
a few vital domestic prob¬
20 Pine
Economic Development
small business.
To
impact
ited to
lems.
Stock
H. G. BRUNS & CO.
HOFFMAN*
,
,
Curb Exchange
York
New
Members
Douglas Shoe
Struthers Wells
Bell
not
spells significant changes in stand¬
ards of living and ways of life.
Vanderhoef & Robinson
L.
Common
lack of freedom under
collectivism, Mr. Hoffman urges defenders of capitalism to take
action to improve its effectiveness rather than stress its accomplish¬
ments. Asks joint government and private action be directed toward
stabilizing the economy and points out need for recasting tax sys¬
tem, for better timing of public works and for removing obstacles
taxes.
individuals;
on
W.
1950
Cincinnati Div. 4s,
Contrasting freedom under capitalism with
man
such
Baltimore & Ohio
Toledo &
(Continued on page 37)
President, The Studebaker
only spells heavy Federal tax bur¬
Class "A"
has
for wc have had annual
budget deficits every year since
1930, But it is prudent to bear in
mind that a balanced budget has
been obtained only by the appli¬
cation of the highest peacetime
tax rates we have ever known to
Chairman, Committee for
income of $3,000,
$100,000
such
By PAUL G,
^
billion
$1
In 1946, the
paid $133 and the
man
paid $54,093.
An
in
$3,000
branch offices
our
years,
Outlook for Freedom
as
the individual with $100,000, $33,-
3/6», 1956 •
Direct wires to
condition
Common
married with two minor children,
oaid no Federal income taxes and
Savoy Plaza
it
best
True, our Federal
will be the
beer, for many long
great.
nearly
In 1940 the inr
in 1939 and 1940.
were
surplus is attributable to the reenactment on a permanent basis
of wartime sales and excise taxes,
$19 billions ip
in
not very
financial
ceed estimated expenditures by a
little over $1 billion. Most of this
i nd i vidua 1
income
NY 1-1227
activity
present levels, estimated Federal
receipts from
taxes and other
sources in fiscal 1948 would ex¬
WOrth 2-4230
Bell Teletype
taxes
New Orleans, La.-Birmingham, Ala.
budgetary surplus, thus, is
all our pres¬
maintained at
present business
If
MY 1-1557
HAnover 24700
June 30.
Exchange
St, New York 4, N. Y.
eol-t
ernment
Baltimore Stock Exchange
Broadway, N. Y. 5
Members
The
1948.
otherwise would have ex¬
on
The
is maintained, and if
25 Broad
Stock
York
New
Members
:
which
pired
Request-
on
Steiner, Rouse & Co.
Our domestic sit-
increasing responsibilities abroad.
i
Analysis
successful completion of World War II marked the beginning
in domestic as well as in international affairs. Every
evidence of our new and
Automatic Fire Alarm
May, McEwen
Bought—Sold—Quoted
.•'•V
for the United States,
new era
a
day
ofSecuritlesDealers. Inc.
N. Y. 5 HA 2-2
TELETYPE NY 1-423
Nat'l Ass'n
that tax
so
debt and taxes spells epochal changes in liv¬
Maintains misdirected taxation, not merely its qualitative burden,
threat to free enterprise. Insists Federal expenditures mu:t be reduced and con¬
rates can be reduced in all brackets. '
of life.
ways
constitutes greatest
U. S. Sugar
BELL
fi
Manufacturing Co.
Secretary of the Treasury
official asserts enormous ..increase in
Former Treasury
Soya Corp.
40
Rockwell
Preferreds
&
Commons
Former Under
,
V'
MAGILL*
By ROSWELL
Goodbody & Co.
1127
Principal Exchanges
Members N. Y. Stock Exchange and Other
NEW YORK 6, N%.YV *
115 BROADWAY;
Trading Markets in
Telephone BArclay 7-0100
Teletype NY 1-672
'
*
An
before
ance
by
address
Mr.
Hoffman
the New York Life Insur¬
Group, New York City,
10, 1947.
-
April
PETER MORGAN & CO.
New York 5, N. Y.
31 Nassau Street
Tele. NY 1-2078
Tel. BA 7-5161
j
-
American-La France
Dictaphone
»
General Portland Cement
We
:
Specialize in
FEDERAL WATER
.
MONROE AUTO
Girdler
'
♦
Raytheon Manufacturing .Co.
Common
$2.40 Conv. Preferred
*MONMOUTH PARK JOCKEY CLUB
available to
dealers and banks only
Prospectus
Prospectus
G.A.Saxton&Co.,Inc.
York Security Dealers Association
74 Trinity Place, New
Telephone HAnover 2-2400,
170 PINE ST., N. Y. 5, / WHiteball 4-4970 I
Request
*
Troster, Currie & Summers
Member New
Teletype NY 1-609
on
" J
I
Prioata Wires to
/
Common & Preferred
PUBLIC SERVICE
PATHE INDUSTRIES
Standard Stoker
Tennessee Gas & Transmission
j'
SOUTHWESTERN
Marmon-Herrington
*
Products, Inc. Com. & "A"
*Emery Air Freight Corp.
EQUIPMENT
POLAROID CORPORATION
Grinnell.
*Air
& GAS
FINCH TELECOMMUNICATIONS
Giddings & Lewis
,
*Prospectus
BOUGHT—SOLD—QUOTED
J-G - White 8 Company
INCORPORATED
I:
York 6, N. Y.
Teletype 1-376-377-378
Buffalo—Cleveland—Detroit—Pittsburgh—St. Louis
Members
STREET
NEW YORK 5
120
ESTABLISHED 1890
Tel. HAnover 2-9300
Tele. NY 1-1815
request
1
1*
I
ff'
..
Reynolds & Co.
2.
■/*—.
37 WALL
on
•
New
York Stock Exchange
Broadway,
Telephone:
,
New York 5, N. Y.
REctor 2-8600
Teletype: NY 1-635
J>.;.
Volume
165
Number 4588
•THE COMMERCIAL &
FINANCIAL CHRONICLE
INDEX
Articles
and
News
Taxes Must Not Be Reduced
Page
Stock Market Ripe for Major
Rise—Anthony Gaubis
Cover
Some Comments on the Dismal Art of
Forecasting
—Melchior Palyi
______Cover
V-jiSecretary of the Treasury
Secretary Snyder declares current economic conditions
•
Why Russia Continues to Snub World Trade and
Monetary
Bodies—Charles Prince
Cover
Reduce Prices, Truman Urges
;
i
,
The Case
Trade
for Tax
Practices
Reduction
Under
McC. Martin, Jr.
A
Financial
Expert Looks at U.
S.—Arthur
reduction
in
a
9
*
4
5
—
Black Market
6
7
9
Monetary Fund Studying Silver Use
convinced
am
14
_
20
20% Wage Increase
21
:Schram Protests N. Y. Reserve Board's
Support of
Eccles' Credit Policy
be considered
23
■
'Texas IBA Spring Group Meeting Held in Mexico
55
*
To
from
Regular Features
'Bank
Insurance Stocks
and
Man's
Canadian
looming
Events
in
Our Reporter cn Governments...
15
20
Investment
'Dealer-Broker Investment
Recommendations
NSTA
11
Austerity Bud¬
56
Funds
16
Notes
12
Observations—A.
Wilfred
Published Twice
May...
5
Weekly
The COMMERCIAL and
FINANCIAL CHRONICLE
Reg.
U.
S. Patent Office
25 Park Place, New York 8, N.
REctor 2-9570 to 9576
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RIGGS, Business Manager
"
Thursday, April 24, 1947
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a
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Now
Tomorrow's
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48
Washington and You
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levels.
reach
Under
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taxes
do
hardship
as
1942,
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at
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under
the
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of
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impose
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per
year.
Other Countries, $42.00 per year.
so
security
Quotation
Record—Monthly,
(Foreign postage extra.)
Earnings
Record — Monthly,
year.
per year.
point
tax
a
on
(Foreign postage extra.)
but
so
ktajhmib
James
aspects
mu
H.
£>.
^ M
Bossard
ch
pattern of human expe-.
rience. Students of the culture of
page 22)
be
FARR &
Members
since
Every
said
Social
Trends,
sponsored
the
age,
of
the
individual.
Change
problems
state of transi¬
Garden
of
Matthew
as
one
to
significant
well
a
York
New
York
120
York
Curb
Coffee
WALL
CO.
Stock
Exch.
&
Exchange
Assoc.
Sugar
Member
Exchange
ST., NEW YORK
TEL. HANOVER 2-9612
>
American Oversea) Airlines
Republic Natural Gas
Haile Mines
U. S. Finishing Com. & Pfd.
J.K.Rice,Jr.&Co.
v
Established 1908
Members
is
about
contemporary
rapidity, as
sheer
its scope. The more spec¬
tacular of these changes are the
as
material
and
We
Broadway
Teletype N. Y. 1-714
Punta Alegre Sugar
Eastern Sugar Assoc.
Cuba
Company Pfd.
Lea Fabrics
U. S.
Sugar
*Fidelity Electric Co.
Class
A
Common
Stock
Susquehanna Mills
♦Prospectus
oil request
DUNNE & CO.
Members New York Security Dealers Assn.
25 Broad St., New York
WHitehall
technological ones.
(Continued on frage 25)
4, N. Y.
3-0272—Teletype NY
Private
Wire
to
1-956
Boston
♦♦Stern & Stem
interested in offerings of
are
.
Security Dealers Assn.
Haytian Corporation
dead and the other
be born. What is
its
Y.
Bell System
FIRM: MARKETS
MAINTAINED:
N.
REctor 2-4500—120
Eden.
Arnold
his, is cast between two
change
and
1947.
Textile, Inc.
Bagdad Copper Corp.
General Aviation
4
High Grade Public Utility and Industrial
Equipment
James H. Acker & Co.
Members N. Y. Security Dealers Assn.
Broad
New
York Stock
Tel.:
HAnover
2-4300
Street —New York 4, N. Y.
Tel. HAnover 2-5872
Teletype NY 1-2785
Exchange
Broad Street, New York 4
Albany
-
-Boston
-
Members
New
York
135 S. La Salle
Curb
Exchange
St., Chicago 3
Tel.: Andover 4690
Teletype—NY 1-5
Glens Falls
Schenectady
on
request
♦Public National Bank
*lst
Spencer Trask & Co.
25
♦*Offering Circular
& Trust Co.
PREFERRED STOCKS
Members
New
New
five such aspects.
We have been in
Economic
be made in New York funds.
the fluctuations in
Newburger, Loeb & Co.
WHitehall 4-6330
Quotations Upon Request
considered
powerless
the rate of exchange, remittances for for¬
eign subscriptions and advertisements must
account of
of
contemporary
*An address by Dr. Bossard at
the Seventh Annual Forum on
Inquiries Invited
Teletype NY 1-2033
Haytian Corp.
against the
background of social change. To
be sure, change is as old as life.
tion
larger
by
the
New
York
Chapter, Chartered Life Under¬
writers, New York City, April 18,
Prudence Co.
St, N.Y. 5
Sugar
reduction
Roberts & Mander Corp.
Bell
Punta Alegre
conditions, I do
Rapid Material
must
view, they
many
of
a
are
worlds,
Other Publications
and
another
are
N. Y. Title & Mtge. Co.
15 Broad
Securities Dealers, Inc.
the Ameri¬
on
may
Globe Oil & Gas Corp.
Vl
Nat'l Ass'n of
an
pects of this larger social situa¬
tion, with particular reference to
to' live
the
of
Subscription Rates
25
of
Security Dealers Assn.
new
effort today, then, is to
attempt to speak of selected as¬
ucate
3, 1879.
^
Teletype NY 1-1203
Member
•
New York
these
own
1.
Lawyers Mortgage Co.
Members New York Stock Exchange
\
people.
Under present
believe that
in, and to ed¬
5
Lawyers Title & Guar. Co.
|
1
Broadway, New York, N. Yi
HAnover 2-8970
conditions
not
not
All
Note—On
continues
present
abuse it. From
$25.00
39
output.
income
properly
per
economy has already
remarkably rapid transi¬
a
tion from record wartime
produc¬
tion to record peacetime
Reentered
Bank
g0ldwater & frank
reduction program.
Copyright 1947 by William B. Dana
Company
Monthly
j
Company
Mortgage Certificates j
appropriate, H.R. 1 does
right approach to a
Present economic conditions do
hot call for a tax reduction. The
My
wonderful
place
Whyte Says)
$25.00
tax
a people identify some 10 or 12
basic parts of the culture
pattern:
the economic, with which we have
dealt today, is but one of these.
production
Corner—
3
Securities
Securities
N.
impossible.
reduction
or
if
even
capitalists, or prospects and risks*
people in a larger society.
this
25.
j
Title
the
of
or
in
made
CERTIFICATES
Mtge. Guar. Co.
tax system difficult
Finally,
(Continued
processes
14
TITLE COMPANY
Bond &
the
12
Estate
Y.
HERBERT D. SEIBERT, Editor & Publisher
D.
one
Public Utility Securities
Railroad Securities
York,
'WILLIAM B. DANA COMPANY, Publishers
WILLIAM
Reporter's Report
Prospective Security Offerings...
iry
revision
sociologist, interested in people, today's discussions are,
point of view, of very great importance, since
they deal
Real
8
get
Mutual
a
damentals
38
Our
Field
Einzig—Britain's
Page
18
43
Bookshelf
Securities
comprehensive
with the fun¬
Page
fBusiness
a
Employment is high, and national
general
time
is
a
buyers and sellers, but
or
23
JFund
Election; Bank Abstains
'A11
1,
as chief factors in
insecurity of the individual:
(1) rapid material change; (2) revolution in group
living; (3)
changes in family structure; (4) mobility of
population; and
(5) huge debt and tax structure. Points out humans should not
19
—.
Explains Unofficial Market in Canadian Dollars
an
in
Dr. Bossard lists
18
WHitehall 4-6551
Professor of Sociology, University of Pennsylvania
,
Industry 1947 Plant and Equipment Expenditures to
exchange.
Offerings Wanted
By JAMES H. S. BOSSARD*
17
___.
Holding
proposed
Individual Security
17
"Eccles Favors FR Guarantee of Long-Term Loans to
Small Business
-
the
of
1, April 22, 1947.
17
_
Average Size of New Home Mtges. Up 55% Over 1939
-
that
Committee,
•Commerce Dept. Reports Sharp Decline in Individual
Printers Obtain 16 to
by
Modern Factors in
14
in
tax rates for
emphasized
H.R.
excessive
H. R.
with
bonds!
STREET, NEW YORK
Telephone:
14
Balance
Exceed 1946 Outlay
is
as
peacetime
favorable
on
cash
tax,
such
reduction
at
this
neither necessary nor
appropriate.
I believe that this
conclusion is
9
President of Wabash Railroad
Capital Expenditures by Class I Railroads During 1946
-Government Economists Now More Hopeful About
Savings
gen¬
'"Statement by Secretary
Snyder
before Senate Finance
7
Postwar Transportation Analyzed by Nat'l Industrial
Conference Board
Price
no
aspects of H.R. 1.
I
WALL
99
and
chance to line your
a
of
might make later achievement
can
7
Fund Researcher Abroad With Camille Gutt
Chileans Feted by Federal Reserve Board
is
year
with*
pockets
stocks
us
,
Size of the public debt.
Moreover,
premature reduction of one 5
supported by a careful examina-
6
1,999,602 Comparison Tickets
K. Atkinson,
.why I believe
tax
6
Tax Reductions Will Pay for
Themselves, Says W. R. Burgess
World Bank Postpones Decision on New Executive Director
this
tax
specific
Registration Requirements on New Issues
Consider Tax on Federal Reserve Notes
New Liquid-Assets Survey in
Progress
A.
Snyder
desirability
maintaining present
to repeat some
of the reasons
John W.
-.
obsolete
your den
hot make the
eral tax reduction is
advisable at
this time and also to comment in
more
detail on certain
4
The
were now
that
>
International
Ways
Means
,,
those
NO!
the walls of
Instead, give
budgetary
situation.
Today, I wish
10
LaGuardia
times,
tion of both the current economic
conditions
and
the
Com mittee.
*
Buffett Asks Light on
Military
Curb Clearing Corp. Processed
the
and
10
Says Strike Closing Exchanges Would Be
Good Thing
i
Sen. McCarran's Bill Would End
Costly, Elaborate
recent
my
p p earance
House
9
Landon
on
before
Implement the Truman Doctrine—Tom C. Clark
11
Is Present Postwar
Lending a Relapse?—A. M. Sakolski___ 12
Sweden's Currency Policy Defended—Herbert M. Bratter.. 56
a
pre¬
tax
8
N.
Parkinson
.
e
views
9
How to Cut Prices—Alf M.
v
my
Warding Off Depression—Howard T. Lewis
Money and Prices—Thomas I.
c
a
viously stated
8
'
I
h
I
6
7
Young
Prospects of American Investment Banking in Mexico
—Elmer A. Dittmar
f
tax
reduction-.
7
Charter
How Are the Banks Doing?—Moms A. Schapiro
Banking Without Tears—Raymond Rodgers__'_
•.
major
postwar
6
Now—Harley L. Lutz
ITO
second
5
-
thousand
a
any
I am glad to have
this opportunity to
appear before the Senate
Finance Committee. You have
before you H.R.
1, a bill which would
f; make
the- • -—*—■■■■
4
Arbitration of Wages at A. M. Kidder & Co.
-
NO, NO
—
Don't line
3
,/r-v —Edmour Germain
International Capital Investment and the World Bank
—John J. McCloy
Export-Import Bank Looks Ahead—William
Asserts proposed legislation unwise
under
year.
WMMMMJIi
AND COMPANY
budget¬
circumstances.
3
■
present
this
rates
2
Taxes Must Not Be Reduced—John W.
Snyder____
Modern Factors in Individual Security—James H. S.
Bossard
Where Does Monopoly Really Lie?—Earl
Bunting
Third Union Enters Wall Street Scene as UFE Wins Limited
and
priate.
2
—
*
situation make general tax reduction
unnecessary and inappro¬
States public debt's size
prompts maintenance of
ary
Cover
Taxation for Free Enterprise—Roswell
Magill
Outlook for Freedom—Paul G. Hoffman
.
llCHTEHSTEIff
B. S.
By HON. JOHN W. SNYDER*
.
quarter analysis
on
request
Macfadden Publications
All Issues
C. E.
Unterberg & Co.
Members
N.
Y.
Security Dealers AssTn
61 Broadway, New York 6, N.Y.
Telephone BOwling Green 9-356S
Worcester
Teletype NY 1-1666
■Vr-
FINANCIAL CHRONICLE
THE COMMERCIAL &
<2196)
4
Thursday, April 24; 1947
,.V
Sen. McCarran's Bill Would End
LaGuardia Says Strike Closing
Ward & Co.
Exchanges Would Be Good Thing Cosily, Elaborate Registration '
talk he declares stock and commodity exchanges
not
Requirements on New Issues
ending "this artificial speculating, gambling business
1ST. 1VJ6
In radio
are
needed and
bit." Demonstrates ex-Mayor's
would not hart business one
nomic illiteracy.
1
Abitibi Power
iii
;
close.
F.
in
LaGuardia
H.
usual
his
familiar
stated:
"I
as
want
much
Jack & Heinz
as
strike
one
I
like
would
or
to
collectivist ideal, and would ban¬
ish private trade and commerce
take place — and that is the
strike of employees of some of the
members of the Stock Exchange.
entirely.
I don't
no
see
Lanova*
Long Bell Lumber
•
Majestic Radio & TeL
Maryland Casualty
why the city butts into
that at all.
Because, I'll tell you
something.
see
such
Under
there could
be
no
system
a
commerce
and
business transactions. The State
would be the master and dispenser
Sulphur
Michigan Chemical
Minn. & Ontario Paper
Missouri Pac.
Pfd.
Moxie
N. Y. New Hav. & Hart.
Pfd.
Pathe Industries
Philip Carey
"Listen, you employees of Stock
Exchange firms. Don't be afraid!
They can't stand a strike.
They
our wants. But a system of free
enterprise, such as we still enjoy,
requires public markets and has
long had them.
just can't stand a strike! Don't be
foolish, r Now, you can get any¬
in
change
Com* Pfd.
conveniences
of
As stated by Harrison
his Hart, Schaffner
H. Brace
& Marx
thing you want, and I'll tell you prize essay on "The Value of Or¬
why.
Because if the Stock Ex¬ ganized Speculation":
"The in¬
should
close,
and
every
to
which
fore¬
our
Commodity Exchange should be fathers were subject, because of
closed, it would be the best lib¬ the lack of organization in the
eral education that the American process
of fixing the prices of
oeople could have. Assuming that commodities,
can
scarcely be
the Stock Exchange closes, and realized. At present any man may
fhe Wheat Exchange, and the Corn enter an Exchange as a member
Exchange and the Cotton Ex¬ or through a broker and become
change — all close — it wouldn't a market factor to the extent of
make one bit of difference to the the
amount
of
the commodity
industries and businesses of the which he is willing and able to
country.
carry.
The condition that pre¬
"There would be just as many vailed before Exchanges assumed
.
Polaroid
Purolator Prod.*
and their present prominence offers a
of pitiful contrast, when it is remem¬
that formerly
the small
steel produced, there wouldn't be bered
dealer was at the mercy of theone pound of wheat less grown or
sown, it would show how artificial great magnate or merchant, with
this speculating, gambling busi¬ no system for giving dealers of his!
automobiles
,
& Pfd.
Upson Corp.*
U. S. Air Conditioning
U. S. Fidelity & Guar.
United Artists*
manufactured,
wouldn't
V Taylor-Wharton* '
Textron
one
Vacuum Concrete*
less
pound
It wouldn't hurt business
bit!
one
class any
don't be frightened
So
case
omy,
the
or
where the national
of
flow
that you're going to lock the busi¬
ness
of the country.
No, this is
one
United Drill & Tool"B"
is!
ness
be
any man
or
the business,
or
(D.-Nev.)
April 15
on
know what price to place
in
prevailed
famine
the province and
a
(Continued
industry wouldn't be affected one
could
How
one
surfeit in an adon
45)
page
introduced in
so
new
sued
enterprises. According to
statement is¬
a
Senator McCarran, "The effect of this
by
legislation
proposed
of a
promoters
would
.
be
to
enterprise
new
require
from
secured
money
enterprise,
proposed
the
ing
the
enterprise in the
new
prospectus,
and
sale
to
of
concern¬
in
the
in
the
forth
the offer of securities for sale."
or
The text of Senator McCarran's bill (S.
which
was
Banking
the
spend
stock
manner .set
the
do' nothing
to
further than make a truthful statement
1099)
referred to the Senate Committee
and
Currency, reads
as
on
Sen. Pat McCarran
follows:
A BILL
To
facilitate
Be
the
investment of venture capital in
new
enterprises.
it enacted
by the Senate and House of Representatives of
the United States of America in Congress assembled, That the first
sentence of section 7 of the Act of May 27, 1933 (48 Stat. 78, 15
U. S. C., sec. 77g), is amended to read as follows: "The registration
statement, when relating to a security other than a security issued
by a foreign government, or political subdivision thereof, or by an
issuer engaged in the promotion or organization of a new business
enterprise, shall contain the information, arid be accompanied by the
documents, specified in schedule A; when relating to a security issued
by
a
foreign government,
or
political subdivision thereof, shall contain
the
information, and be accompanied by the documents, specified in
schedule B; and when relating to a security issued by an issuer en¬
gaged in the promotion or organization of a new business enterprise,
shall
contain
the
information
specified in schedule C; except that
or regulations provide that any such
information or document need not be included in respect of anyclass of issuers or securities if it finds that the requirement of such
the Commission may
information
by rules
document
is
inapplicable to such class and that
protection of investors is otherwise
required to be included within the registration statement."
Sec. 2. Section 26 of the Act of May 27, 1933 (48 Stat. 88; 15
U. S. C., sec. 77aa), as amended, is further amended by adding at
the end thereof the following:
or
disclosure fully adequate for the
"Schedule
C
"(1) The name under which the issuer is doing or intends to
do business;
"(2) The name of the State or other sovereign power under
which ..the issuer,Js oris to be organized;
,T v,1f.
...
"(3) The location of the issuer's principal business office,, and
if the issuer is a foreign or Territorial person, the name and address
of its agent in the United States authorized to receive notice;
voice in determining the
commerce.
wheat, for example, at a time
upon
econ¬
the national welfare, or when
health,
McCarran
bill which would amend the regis¬
in
the Stock
Commodity Exchanges—insti¬
tutions, that are almost as old as
to discourage strikes private commerce itself. Of course,
possible. But there is the ex-Mayor may agree with the
that
a
to facilitate the investment of venture capital
market places, such as
he
manner,
Hydraulic Press
Warner &
the
telephone
Hoving Corp.t
•
truthful statement concerning proposed enterprise
from stock sales as set forth in the prospectus.
tration requirements of Securities Act of 1933
metropolis of Nevy York has a fan¬
tastic
originality
that
smacks
strongly of utter economic illit¬
eracy.
No economist, ancient or
modern, radical or conservative,
orthodox
or
heretical,
to
our
knowledge, ever before has advo¬
cated the'- abolition of organized
in
strike
the Senate
and
Communism
of
foregoing remarks of the
ex-Mayor of the great coipiperpjal
which he dis-
Hoover Co.
V Wts.
a
money
Senator Patrick
you
The
his
cussed
it,
to
Economic Illiteracy
the
of
remarks,
Higgins Inc.
Old
In
course
Pfd.
General Machinery
Gt. Amer. Industries
•
spend
as
all
would
stick
.
Smacks
they
twish
Chicago R. I. & Pac.
Old
want!"
organized Exchanges in
general and
expressed a
Cinecolor
So
iota.
strikers, and you'll get what you
to
the
condemn
Mfg.
Mexican Gulf
little
took
plovees,
occasion
Barcalo Mfg.*
'
and
-
Aspinook Corp.*
Old
ther than make
Station
strike of Stock
'
Armstrong Rubber
Bates
registration requirements of new enterprises
capital, by requiring promoters to do nothing far¬
ease
to secure venture
April 20, in expressing himself in favor of a
Exchange em-^
on
Measure would
eco¬
"
F. H. LaGuardia in his radio talk over
Former Mayor
WJZ
'
J
"(4)
The names and addresses of the directors
or persons
perform¬
ing similar functions, and the chief executive, financial, and account¬
ing officers, chosen or to be chosen if the issuer is a corporation, as¬
sociation, trust, or other entity; or of all partners, if the issuer be a
partnership; and of the issuer, if the issuer be an individual; and of
the promoters in the case of a business to be formed, or formed
within two years prior to the filing of the registration statement;
"(5) The general character of the business actually transacted
or to be transacted by the issuer;
Swasey
"(6)
A statement of the capitalization of the issuer, including
its capital stock and the
the authorized and outstanding amounts of
Bought—Sold—Quoted at Net Prices
Amer. Gas & Power
Cent. States Elec. Com.
EASTERN CORPORATION
Derby Gas & Elec.
NATIONAL COMPANY
Federal Water & Gas.
.
proportion thereof paid up, the number and classes of shares in
capital stock is divided, par value thereof, or if it has no
which such
IT.'Ml
fj'i
'it:
"
'
I
!
•
1 'r
fit i 1
)
J.'j
t
i
i
/
•#/<>*
Puget S'nd P. & L. Com.
Southwest Natural Gas
Standard Gas Elec.
>
?
Central National
-
>
Tide .Water Pwr. Com.
'
.
Corporation
ESTABLISHED 1927
22 East 40th
5
be
to
Street, New York 16, N. Y•
tProspectus
0Bulletin
or
Upon Request
Teletype: NY 1-2948
Telephone: LExington 2-7300
Circular upon request
rz.
-
The
specific j purposes { in
detail
and
such purposes, so far
as
the
approximate
determinable, for
be offered is to supply funds, and if funds are
raised in part from other sources the amounts thereof, and
sources
thereoft shall be stated;
"(9) The estimated net proceeds to be
to be offered."
i
derived from the securi
itjy
CTIVE MARKETS:
II
I
£
"(8)
amounts to be devoted to
the
^
!?
'*
which the security to
v
11
[!..
par value, the stated or assigned value thereof, a description of the
respective voting rights, preferences, conversion and exchange rights,
rights to dividends, profits, or capital of each class, with respect to
each other class, including the retirement and liquidation rights or
values thereof;
"(7)' The amount of capital stock of'each class issued or in¬
cluded in the shares of stock to be offered;
•
Ward & Co.
EST
*Hungerford Plastics
Consolidated Dearborn Co.
—Common—
»
,
;
.
.Members N.Y. Security Dealers Assn.
,
,
.
Yields 8*4% at market
.
Di«Noc Co,
r
Virginia Dare Stores
Strong in cash
|
'District Theatres
.
1926
*Metal Forming Corp.
j'
*Dumont Electric
"
....
120 BROADWAY, N. Y. 5
REctor 2-8700
Represents 2 modern, well located,
low cost office buildings.
Analysis
on
•/
Great Amer. Indus.
.
-
.
Direct Wires To
•
n •
Pbila., Chicago <fc Los Angeles
V ENTERPRISE PHONES 1.
Hartf'd 6111
Buff. C024
FIRST COLONY
'
Seligman, Lubetkin & Co.
Incorporated
Bos. 2100
...v*-•';'iv
Prospectus Available
Request
N.Y. 1-1286-1287-1288
,
*
Members
41 Broad
New
York Security Dealers Association
Street, New York 4
\
HAnover 2-2100
SIEGEL & CO.
39 Broadway, N. Y.
6;
_
CORPORATION
52 Wall St.
New York 5, N.
Y.
DIgby 4-2370
Teletype NY 1-1942
Tel. HA 2-8080
Tele. NY 1-2425
Volume 165
.Number -4588
THE COMMERCIAL & FINANCIAL
CHRONICLE
1
Consider Tax
on.
.
Observations
.
from the Nation's
~
Capital
jljL §t/U
/
JL CJUt-
»WASHINGTON
WHAT SAFETY IN FOREIGN
the
Senate Republicans are to have Democratic
help in passing the
Big question today isn't whether the measure will
get Senate OK but by what tally. Already it's apparent that certain
upper crust Democrats will (1) help revise the House-approved tax
could be
been
LENDING?
given to the public of the factors pertaining to the safety of
we may extend.
Typically within the last few days,
in contrast to the widespread cynicism which has
been pervading our international lending outlook,
the credits that
Martin
veto.
Privately,
debate
Democrats
some
is
politically
economically
ate
and
—
;
wise, want from
Secretary Snyder specific rec¬
ommendations on how, where
and
—-
when
pared.
levies
should
«
Senate
bill
*
#
still
*
-
points
at
least
two
tax
*
*
God
what
House
outcome to
He
*
mark
A. Wilfred May
two
down
little of this water
save
face, then relay the
bill to the White House.
There¬
after, the strike situation and
litical
considerations
will
po¬
deter¬
mine whether the
be
signed
legislation is to
vetoed.
or
*
Federal
the
what
international
agree
a
*
knows
ference would
uttered the
*
can
out
simply to
*
Speaker
*
Reserve
Commerce
Senate will do to the labor bill.
That's
you
squeeze
(1)
Only
to
(Continued
and
Board
Department
21)
on page
Third Union Enters Wall Street Scene
as
are
UFE
Asked
by this* writer whether
successful results from the current Geneva Con¬
un-
(1)
Senate will
water down the tough House labor
legislation;
(2)
conferees
will
dimensions:
increasing the cut on small
incomes, and (2) advancing the
retroactive date from January 1
to July 1 this year.
able
interview with this columnist vig¬
several of the most accepted
an
skepticab credos.
,,
holds
our
.
be
not
an
indispensable base for
fiscal
solvency, and 6n abortive
Geneva disastrous, President McCloy
following argument in contradiction.
that
whereas
ment
•
Second
AFL
union, the Office
Employees
effect
provided for under Section 16 of
the Federal Reserve Act, is mere¬
in
the
and
1920's
hearings
United
Financial
Employees
which
has
Union,
had
monopoly of the New York financial district bewildered
development.
now,
gations and
time
by
were
even
nevertheless
Eccles. "Notes not covered by
PAPER
STOCKS & BONDS
Abitibi
Brown
sulted in
<:
red-tape,
There
is
indignation
~
EAjlL BUNTING*
arrogance,
a
St. Lawrence
HART SMITH & GO.
re¬
dispute
between
nancial
A.
M.
obtained
speedy
the
Employees,
Kidder
Co.
of
Fi-^
United
AFL,
early
Tuesday midnight, that is,
week, averting a
1,900 brokerage employees which
threatened to tie up alt of Wall
for
Street.
committee, headed by
Grover A. Whelan and including
Arthur A. Whiteside, President of
Dun & Bradstreet, Inc., and Wil¬
liam A. Galvin, international Vice-
dispute.
President of the Bakers and Con¬
letters
The
fectionery
Workers
commenced
the
City Hall
its
on
at
There
lation
to
start, and
announce
originally
isuccessful
able
was
termina-
little
Company
,
other
The
—endless
and'
is
bureaucratic
red-tape,
labor
the
that
Emil
Schram, Presi¬
Exchange, notifying
the
union's
contract
with the Exchange, at the union's
order,
was
expiring at mid¬
(Sunday,
night
the
next
day
April 20) and that
,
.
an
''
"(Continued oil page 54)
been
and
have
used
power
been
Earl
this
*'An
by
Mr.
April
W-iti
23.
.,
-....
Security
Ass'n
Dealers
NY 1-1026
that
IRANIAN STERLING
monopo¬
monopolies
in
CHINESE STERLING
DUTCH. STERLING
to the public interest;
to labor's just rights;
contrary to good government.
But
no
monopolist wants to
come
out into the open. Neither
the labor dictators nor the bu¬
contrary
Bunting
England Reg. Jiial In¬
dustrial Conference, Boston,
and
contrary
large for all to see
address
before New
convinced
labor
government are just as bad as
monopolies in business. They have
realized tha4t all monopolies are
Bunting
to the limit, .The result has
written
up with this abuse of
The American people have
in
lies
being
these
officials
Y.
fed
power.
become
hands.
And,
human,
N.
Broadway, New York 6, N. Y*
American people have be¬
The
come
in their
:
111
BArclay 7-0570
concentrating
own
,
,
People Fed Up
in
economic
power
Members
longer our own.
any
Request
on
F. H. Holler & Co., inc.
strikes,
an
busily
engaged
em¬
ployer is free to fill jobs vacated
shortly?Rafter
waves
staggering
of uncertainty and
industrial chaos, sweeping
For years, of¬
ficials of both
Information
.
incredible
markets,
responsible
city's intervention in the
Rumors
were
current
from
of
taxes,
black
is
was
the unicn sought city help
Saturday morning shortly after
employees of the New York Stock
Exchange had been given form
dent
waste,
and labor have
who
that
them
iri the field of
arrogance,
government
considerable
Toronto
the
specu¬
was
Montreal
Indiana Limestone
ever-growing fear as to
whether or not our economic soul
over
the
own
was
.
to>
AFL,
Monday morning,
the day the strike
scheduled
Union,
deliberations
a
than 36 hours later.
more
L395
—
in
government.
settlement
and
this
strike of about
&
by Deputy Mayor John
a
six-month-long wage
HAnover 2-0980
Teletype NY
New York
,
Bennett
ST., N. Y. ff
Bell
raging in this country today—a fire of public
two vast concentrations of economic , power.
fire
against
field of labor.
A three-man mediation committee named
J.
?
Minnesota & Ontario
incredible waste, black markets, stag¬
-*
One is
clauses from Exchange and Curb contracts.
?
Donnacona
Declar¬
ing Federal Trade Commission is dominated by crusading business
baiters and yelping bureaucrats, leaving no business concern safe
from attack; he brands its recent Anti-merger:-Congressional report
as dishonest, misleading, distorted propaganda.
on their territory. City Media¬
Committee, headed by Grover A. Whelan, finds formula for
averting threatened strike against A. ML Kidder & Co., Stock Ex¬
change, Curb, and possibly five other brokerage houses on Wall
Street. Employees of Kidder firm to get raises. Across-the-board
30-day cancellation
Company
Consolidated Paper
gering taxes, industrial chaos, sweeping strikes, and fear.
tion
Union asks elimination of
S.
gold
would be the basis of taxation.
52 WILLIAM
U. F. E. apparently to confine itself to brokerage
together will resist encroachment of
barred.
Marriner
higher than those in
the results measured
Mr.-hunting declares government! and labor monopolies have
new
the CIO's Financial Employees Guild
increases
Re¬
at the
discussed
was
Chairman
Monopoly Really Lie?
By
field and both AFL unions
-
Federal
1930's
President, National Association of Manufacturers
v
AFL
at
direct
on
purchases of Treasury obli¬
serve
Price Brothers
Local 153, comes back to Wall Street seeking to organize bank
employees.
Reserve
,
by return to the lenders actually—although unrecognizedly—were
quite satisfactory.
But this favorable interpretation is directly disputed by the
official and unofficial records, as well as impressions which have so
strongly influenced the public's thinking ever since that period.
According to findings of the Foreign Bondholders' Protective Coun¬
cil, a total of about $10 billion of bonds had through 1931 been issued
or guaranteed by foreign governments.
Since the time of their issu¬
ance up to the present about $3% billion principal amount have been
completely retired through repayment or repatriation at varying
indeterminable discounts. Additionally there have been so retired
about $2Y4 billion of issues some principal of which is still outstand¬
ing. Hence the total amount of bonds now outstanding is $4-/2 billion,
of which $2 billion, or 45% is in default.
So the net result shown
by these studies is that on the original grand Cotal issued, the loss
is 20% plus the very large indeterminable shrinkages of principal
(Continued on page 46)
Wheie Does
International
Federal
on
notes, this is not to be interpreted
as
a
sign that the Board fears
hyperinflation.» The tax, which is
Wins Limited Arbitration of Wages at Kidder
By EDMOUR GERMAIN
reportedly has
considering
a
govern¬
tax
trade barriers in the form of Smoot-Hawley
tariff schedules
probabilities:
toward
redrafting the House
on
have been
But
reduction at all.
Outlook
can't be traced
McCloy, in
~
orously rebutted
wasn't
party line.
he
The
any
Speaker
Final form of the Sen¬
measure
on a
,
omni-*
the
on
the
as
opened
body
til votes have been counted.
Neither Republicans nor Demo¬
crats
Secretary remains
non-cooperative, elects to oppose
The
kidding.
and Treasury
^ Secretary Snyder
on this issue.
They feel tax reduction
this week
bill.
bus
unhappy with the President
are
friends
assured
legislative
upper
to
we
pass it. That's worth remember¬
ing because if any substantial number of his own political kin back
the bill, President Truman
may bef>a
-
have directly encountered two most glowingly
ly a way of syphoning off profits
optimistic pronouncements about both our public
of the Reserve Banks.
The sub¬
and private financing possibilities.'
•
ject came up during the House
With regard to th* self-styled "private" op¬
erations of the World Bank, its President, John J. Banking and Currency Committee
legislation, and (2) thereafter help
discouraged from
(Special
—
"Chronicle")—While the Fed¬
eral Reserve Board
•Midst all the ramified discussion
surrounding our prospective
international lending, it would seem that at least a clearer
concept
tax reduction bill.
%
Federal Reserve Notes!
,
By A. WILFRED MAY
Behind-the-Scene Interpretations
on
meddlers
reaucratic
Mass.,
(Continued
.......
on
want
page
BOUGHT
—•
SOLD
F. BLEIBTREU & CO:,
their
*
Inc.
79 Wall St., New York 5, N.
v.-
46)
.-I. •'
Y.
......'
Telephone HAnover 2-8681-2
Leading
>
.;f
Banks and Trust
American Maize Products
Companies
i
—
60th
I '
*
I.
,
-
.
CONSECUTIVE
Specialists in
■
m
Boss Manufacturing
of New York
•
/
Co.
Philippine Mining Issues
Electric Bond & Share "Stubs"
,
Canadian and4
Domestic,
*
QUARTERLY COMPARISON
Gulf
Mexican
Tide Water Power
Sulphur
'
'
Available
on
request
J
MAHER&HULSEROSCH
Bought—Sold—Quoted
120
-•••-*
FREDERIC H. HATCH
BROADWAY, NEW YORK 5, N.Y.
Telephone: BArclay 7-5660
'
:
~
.
.
New York Hanseatic Corporation
Established
MEMBERS
Teletype: NY 1-583
63
Wall
N.
Y.
SECURITY
Street, New York 5, N. Y.
/
,.OCt
INC.
•
Brokers
62 William St.
,
Teletype
„
NY
WHitehall 4-2422
DEALERS ASSOCIATION
-
Securities
NawYork 5,N. %
,
Telephone
1888
Dealers
&
In-Investment
Branch Office
Bell Teletype NY 1-897
113
,
.
!
Hudson St.,
1-2613^
.
Jersey City. N.
«
-
---
••
•
—
,
v
6
New
Buffet! Asks
Liquid-Assets
(Special to
the "Chronicle")—Another liquid
assets survey for the Federal Re
serve Board is being conducted at
the University of Michigan.
Re¬
sults may be available in June
when a comparison with the pre¬
vious survey will be made.
Of
special interest will be any indi¬
cation of a need for tax reduction
in the lower income brackets.
WASHINGTON
Light
Curb
on
Military Black Market
Survey in Progress
i
WASHINGTON, April 23 (Spe¬
to the "Chronicle") — Con-
—
cial
H.
Howard
of
B uffett
to¬
Nebraska
revealed
day
to the "Chron¬
he
that
icle"
of¬
ports
con¬
cerning enor¬
Transit Co.
Baltimore
Issues
All
Bay way Terminal
Coal
Davis
'
Coke
&
Stand. Wholesale Phosphate
and Acid Works
STEIN BROS. & BOYCE
Members New York & Baltimore
Stock
Exchanges and other leading exchanges
CALVERT ST., BALTIMORE 2
3-3337
busiest
Howard
and
Buffett
military
situation
currency
of
account
nontechnical
liabilities
were
&
firm
established;
the liabilities thus far
a
and
how
accumu¬
MONTGOMERY, ALA.
Lime Cola
Sold—Quoted
forth
between
24
Federal Street, Boston 10
Tele. BS128
THORNTON, MOHR & CO.
30
1946,
Continuing Interest in
Gruen Watch
Iowa Power & Light Co.
Memos
New
York,
Los Angeles
Stock
Inc.
NORTH and SOUTH
Phone 4.7159
9,
IOWA
Company
MUNICIPAL
Philadelphia
ago
length
at
about
his
comments
have been the
that similar controversy will
be
generated by my discussion of
subject today.
the
While I have not been
had
have
rather
banker,
a
extraordinary
seeing much of
the world and particularly have
I
seen
accumulations of capital
disbursed throughout the world in
opportunities of
*
of
Address
Mr.
Annual
McCloy
Forum
on
at
Eco¬
Member
Reliance
Varnish
and
RICHMOND, VIRGINIA
Bell
System Teletype:
Los Angeles
continuing interest
Available
No
on
proper
From the time of its
S2l
Incorporated
»
Floor, Kentucky Home Life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Bell Tele. LS 186
powers,
in
Stix & Co.
around
5
times
earnings.
Outlook
for
this
leader
.
in
509 OLIVE
PEnnypacker 5-8200
Private Phone
dent
to
ment
Members
St.
Louis
Stock
Exchange
PH 30
that if the world
collectively spend
so
much for destructive purposes,
it
the best
thought we can apply to the inter¬
national investment of capital for.
time
is
that
we
gave
productive purposes, to the crea¬
tion
of
health
World
conditions
of
economic
throughout the world.
Needs
Economic
As
Well
As Political Health
It
is
not
only
political
health
but economic health as well that
are to avoid
unholy prac¬
tices which lead to wars. I recall
must seek if we
we
the disruptions and
(Continued
page
on
28)
* '
&
Washington Rwy.
For Immediate Execution of Orders
or
of
Quotes call TWX Sp-43
Exchange
A.M.,
Pac.
from
Std.
10:45
Time:
on
Floor
11:30
to
Sp-82
at
other hours.
on
request
Standard securities
H. M. Byllesby & Company
PHILADELPHIA OFFICE
Stock Exchange Bldg. Phila. 2
Telephone
Teletype
RIttenhouse
6-3717
-//
and
as
itself
PH 73
corporation
Members
to
Brokers
-
Peyton
Spokane
Dealers
-
for specific pur¬
tions, the Bank avoids, for exam¬
ple, the financing of exports and
imports on customary short terms,
which i$ the proper business of
commercial banking institutions,
~
before
Currency
"A
Bill
example,
another
statement
*From
tin
Standard Stock Exchange
cf
Win. McC. Martin, Jr.
which in the opinion of its
board of directors offer reasonable
assurance of repayment, and which
do not compete with private capi¬
tal.
Under these several limita¬
for
to
Senate
of
Mr.
Banking
the
Mar¬
i;
Kellogg, Idaho and Yakima, Wn.
Branches at
v '
and
other
of
porters and importers. The assist¬
ance
of the
Bank was usually
sought in order to make possible
terms
of
credit
foreign
to
chasers of United States
pur¬
products
longer than customary and longer
than commercial banks were pre¬
pared to accommodate. . For ex¬
ample, the Bank financed exports
of raw cotton during this period
with
terms
running up to 27
months and exports
for
terms
running
of equipment
from 5 to 7
years.
Precedents
were
set during
this
early period of the Bank's history
for credits to foreign governments
and their agencies to. finance
de-j
velopment projects and programs
and for credits to provide dollar
Import
exchange for purchases of essen¬
tial United States products by for-
corporation
Bank
of
Committee on S. 993—
Provide for the Rein¬
Underwriters
Building*. Spokane
foreign trade financing
largely to assisting in financing
specific export and import trans¬
actions, chiefly the former, on
application of United States ex¬
poses,
SECURITIES
It is limited in the exercise
During the first six years of the
Bank's existence, it confined itself
manage¬
loans which are
NORTHWEST MINING
multilateral trade,
Export-Import Bank over the
years may be classified for con¬
venience into three general types.
its
of
required by
law,
it con¬
fines
N. Y. C.
Pittsburgh, Canonsburg
Memo
and does
The
statutory
and,
LD 11
It does seem
can
the
As
a
matter of pru¬
BOENNING &. CO.
1606 Walnut St., Philadelphia 3
1st 5s, 1937
Tele. LY 83
deed.
capital market.
loans,,
St. Louis 1,Mo#
Dan River Mills
Lynchburg, Va.
astronomical
become
reasonable terms from the private
by
States and
amount
STREET
fllllllllllllllllllllllllllllllllllllllllllHK
Scott, Horner &
Mason, Inc.
purpose,
making of loans to foreign gov¬
ernments and other foreign bor-,
rowers who
can obtain funds on
howby its
ceiling on the
Conservative Management.
SPOKANE, WASH.
Bassett Furniture Ind.
same
establishment, the Export-Import Bank has
the United
of
the
INVESTMENT SECURITIES
LYNCHBURG
American Furniture Co.
the
in¬
figures
banking powers.
purpose of
promoting the
foreign trade
COrtlandt 7-l?02
Trading Markets
ex¬
pended for the
these
of
ST. LOUIS
building construction industry.
1st
add this to what others have
Emphasizes abstention from financing ex¬
terms.
been vested with broad
debt—Long dividend record.
Excellent
™I BANKERS BOND
victory in wkr might
These billions, added
to the much larger sums which
the United States herself expended
on her own war effort brought the
total of capital disbursed by this
country
to
approximately $341
billions, all used in the main for
the purpose of destruction. If we
ports for own sake.
RH 83 & 84
Telephone 3-9137
Telephone—WHitehall
Earnings
reported
byQ
Company total $5.68 per share.
Co.
that
be achieved.
directly contributing to balanced and expanded
CRAIGIE&CO.
of
York Curb Exchange
1946
Girdler Corporation
fought with the United States in
limiting credits to those authorized for specific purposes, those
as
GRINNELL CORP.
Murphy Chair Company
who
chief states it will discontinue aiding world
begins operating. Interprets policy
fundamental
Consider H. Willett
was
those
to
Chairman, Export-Import Bank
Institution's operating
BONDS
■F. W."
Hagerstown, Md.
3-7253
Private Wire System between
Philadelphia, New York and Los Angeles
A
American Turf Ass'n
States
Export-Import Bank Looks Ahead
ever,
American Air Filter
objecof the
billion
United
By HON. WM. McC. MARTIN JR.*
Pittsburgh, Pa.
N. Y.
LOUISVILLE
some
time
and
Stock Exchanges
New York
Bell Tele. DM 184
one man
talked
CAROLINA
Walnut Street, Philadelphia 2
1420
BUILDING
I recall that
the
available
order
me.
Chapter, Chartered Life Under¬
writers, New York City, April 18.
VA.
VIRGINIA—WEST VIRGINIA
'
BUCKLEY BROTHERS
Members
Also
MOINES
economics
of
reconstruction when World Bank
New
DES
made
upon
Seventh
Stock
Meredith Publishing Co.
EQUITABLE
stock by Bache &
RICHMOND,
Request
on
wealth
or
cern
———
definite
Dealers in
Northern Indiana Public Service
Bird & Son,
Common
Hudson
Niagara
Co.
PHILADELPHIA
Preferred
on
the purchase
was
of
common
Stott &
MG 84
L. D. 53
&
tives.
edge and wis-
matched
were
department
new
shares
Teletype
Telephone
order
nomic and Social Trends, of N. Y.
WHEELOCK & CUMMINS
3.30%
which
on
Montgomery, Alabama
3-6696
INCORPORATED
purposes."
Co. at 14% per share from Wagner,
T
DES MOINES
of¬
my assumption of the
the International Bank^.
to achieve
Some $50
be-
stowed knowl¬
I
Power
Connolly & Co., Inc.
Tel Hubbard 3790
denly
in¬
firm
member
comparison tickets
of
copies available
I acutely do, that
as
reduced sub¬
subject of all
stantially to a comparatively neg¬
manner
of
ligible point in the first year,"
John J. McCloy
c ontroversy
he said.
"Matching of trades in
ever
since.
the Street has been greatly speeded
Although Karl Marx had the same
by elimination of the old method subject as that assigned to me, I
of
delivering tickets back and think no one need feel any con¬
April 22,
Request
Offered only by prospectus-
Walter J.
realize,
you
formation has been
by the then
on
sure
am
capital and
The initial transaction
Maine RR.
Prior Preferred
Circular
I
office of the Presidency of a bank—even
has not sud-<£——
were
additional
fices for comparison
&
principal justification for Bank is to prevent repeated misdirection
Denies possibility of lending misman¬
agement through either political motivation or self-interest.
of international investment.
"The number of tickets returned
or
<
a
1
correction
gov-
encourage¬
charter provision
dow in finance
tickets
18,130
day,
Points to
private international investment of capital stimulated by
prohibiting Bank's encroachment thereon. States
ment to
tickets.
for
Bought—
Boston
ernmental nature of institution's operation.
noting the first anniversary
home by officers and men of our
of
the
department, formed on
armed forces.
April 22, 1946 to effect centralized
"Enough time has elapsed so matching of transactions for buyer
and seller, Mr. Moffatt pointed to
that Congress should get a com¬
its effectiveness in improving the
plete factual story on the whole
accuracy and legibility of member
those
B
World Bank President stresses essentially private rather than
.
In
lated," said Mr. Buff ett.
BOSTON
the
processed.
remittances
Bell Teletype BA 393
New York Telephone BEctor
was
department han¬
dled
exactly 20,000 comparison
tickets. On May 28 last year, next
operations
abroad
By JOHN J. McCLOY*
President, International Bank for Reconstruction and Development.
4, 1946,
1,020,000
Sept.
was
shares and
market
black
day
when Curb volume
losses through
V-;1/.;-'"-,'
of oper¬
comparison
year
central
-the
busiest
Army
mous
initial
its
The department processed com¬
parison tickets for several millionshare days in its first year.
Its
newspaper re-
BALTIMORE
In
ations
Thursday, April 24,-*1947,
International Capital Investment
And the World Bank
nounced.
has this week
requested
Clearing Corp.
Processed 1,999,602
department of the New York Curb
Exchange Securities Clearing Cor¬
poration processed 1,999,602 com¬
parison tickets representing secu¬
rity transactions on the exchange
trading floor, Fred C. Moffatt,
President of the corporation, an¬
gressman
ficial light on
6 S.
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2198)
of
Export
Washington,
purposes."
-
and
for
< Continued on page 41)
yolume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number .4588
The Case for Tax Reduction Now
By IIARLEY L. LUTZ*
Tax
Consultant, National
Association of Manufacturers
Professor of Public Finance, Princeton
v
-
I WASHINGTON
advocating tax reduction now, points out to await a
recession before reducirig taxes would he
acting too late to ease
such recession.
Contends current national income permits both
debt reduction and tax reductions and denies that
high taxes are
needed to combat
inflationary tendencies.
.*
the
rectors of
individual
of
income
in
taxes
the
Act
1945
was
too
modest
to
in
count
this
story.
record
The
the
of
increas
since
e
1928
painfully
miliar
of
fa¬
tc
all
Even
you.
to
up
s
is
1938
*
—
below the wartime top.
general agreement that'
these rates are too high for peace
conditions and that they must be
reduced. In the present? discussion
the main point of disagreement is
the timing of the reduction.
The
Administration
viewpoint
slightly
is
There
is
there
that
action
of
that there should
at least as much
beginning as is provided by
a
bill
before the
larly
and that this
the
on
and
upper
in¬
had been pushed up to
higher levels than were applied
at the peak of the first World
War.
This, however, was only the
comes,
such
for
case
Our position is
be a beginning,
the
middle
no
want to defer
it until the "proper time" arrives
rates, particu¬
Dr. Harley L. Lutz
is
They
now.
made
Senate
today,
beginning should be
now.»
It will be my
task, in this brief
preliminary to olir discussion, to
examine
the
of the
some
that
reasons
third fiscal year after the end of
advanced
against tax reduction now, and,
in doing this, I shall establish our
grounds for asking prompt action
on the pending tax bill.
1. Tax reduction to support the
hostilities
level of business and national in¬
floor
which
on
the
of World War II
We
are
increases
built.
approaching
now
the
and
individual
tax
were
tax
incomes
the
rates
on
only
are
opposition
Secretary
*An address by Dr. Lutz before
the New England Regional Indus¬
trial
Conference,
April 23, 1947.
Boston,
Mass.,
of
the
said that tax
deferred
there
should be
signs of
are
recession.
(Continued
have
Treasury
reduction
until
business
a
has
Both the President and the
come.
If
47)
incentive for going
the extra mile."
"It
of
the
Bank
the
Na¬
W. R. Burgest
the
people of the day almost unbear¬
able," said Dr. Burgess. "In some
and
at
some
the
times
justified, and the value
of the currency collapsed. England
=and the United States have in the
borne their
■past
the main
reason
debts well, and
is clear: the force
of
enterprise has been so power¬
ful and the growth of production
and income so
rapid that they
provided ample means to pay
debt charges."
-
"Today's debts are heavier ab¬
solutely and relatively, and we
must
our
summon
full
to
their
of
payment
and
ingenuity," continued Dr. Burgess.
"This country has an enormous
potential. Our heritage and tra¬
dition of private enterprise has
developed pmvers of productivity
resources
energy
,
never
is
to
Progress
effort—
extra
for
incentive
mile.
As
going
wartime
a
high tax rates could not
be avoided; in time of peace and
facing our present tasks they are
bad medicine and ought to be re¬
duced promptly.
The method of
great
was
the
extra
the
involving the prospect of
early seating on the board of
the
Italian
an
to
represent
Italy, but the other
of
the
Bank:
Colombia
Fund,
as
recently
Turkey,
and
not
only
members
new
Denmark,
Venezuela.
The
<
reported by this writer,
decided that, under Sa¬
vannah Resolution 10, it must pro¬
ceed yyith an electi^^
the
other
ious
to
board
new
be
represented
anx¬
the
on
a
Italy.
Denmark
has
special issue of this mat¬
and
ter,
are
by
made
at
the
Wardman
Park
meeting last September the Dan¬
request to be represented by
Belgian executive
director
ish
the
referred to the board
was
rectors.
issues
Indicating
involved
the
of
di¬
complex
the
on
Fund,
Greece, because its vote is cast by
Egypt, supported the decision to
the
hold
election
at
thus
once,
indicating the election of
ian.
known before. Our problem
release and stimulate these
for that is our one best
hope to satisfy this debt without
series damage.
Also production
provides the goods people can buy
reduction
should
the
secure
extra
worth while.
larly
such
be
leaders
that
order
in
as
to
social
our
effort
This
will
be
particu¬
individual
sur¬
lowering
an
Ital¬
In view of the
feelings which
have been stirred by this issue,
Italy reportedly is hesitating about
naming an Italian candidate for
executive director.
brake
a
debt
taxes
reduction
Once taxes
not
will
ness
all
raised.
to
have
be
Reductions
done
gradually
tuned to the swings of busi¬
and the budget.
But above
it
must
be
remembered
that
dynamics. If the
incentive, and
enterprise they will
reductions
largely
so
in
Oslo,
:
example, will have a signifi¬
impact outside a nation's
boundaries, at least in the case of
certain specific commodities, but
the establishment of such a system
of controls might be regarded as
cant
tionships,
are
ways
in which
the
three
4
problems
which
arise
much
a
domestic problem as
require or even permit in¬
ternational consultation. Similarly;
so
han¬
dled—by uni¬
lateral action,
by bilateral
action, and by
not
be
to
actions in the field of taxation are
usually viewed in terms of
for themselves. It
the '20s after World
was
War
mestic considerations, even though,
the interests of foreign nationals
action.
may be
In
jnost
in¬
where
cases
unilateral
tions
are
.
involved.
Unilateral
•
action
;
also
Will&rd
L.
Thorp
a
strong nation acts in disregard
of
ac¬
involved
are
those where
the
problem is regarded by the
appropriate authorities as prima¬
rily a domestic one, with its inter¬
national
aspects,
if any, being
decidedly secondary. It is obvious
that a system of price controls,
*%
V
a
weak
Thus
one.
territorial
expansion, like the ill-fated Ital¬
ian aggression in Ethiopia, was
(Continued on page 34)
^
*An address by Dr. Thorp
before
the Academy of Political Science,
New York City, April 17,- 1947.:
■■
ff
'Jf''
ITO Charter
By RAYMOND F, MIKE SELL*
Brussels
and
lems of financial and commercial
policy, Professor Mikesell sees
negotiation and debate substituted for economic warfare. < Points
ITO, in preventing trade controls, will be counterpart of func¬
prohibiting exchange controls. Con¬
tends charter of ITO makes state trading compatible with princi¬
ples of private multilateral trade, and contends purpose is not to
abolish existing practices but to modify them.
out
tion of International Fund in
Luxembourg.
beginning, is expected to
interview applicants for Fund re¬
A fundamental objective of the foreign economic policy of the
States is the establishment by international agreement of
.
search positions in London before
returning to Washington.
the
is
board
of
directors.
There
some
Fund
United
common
Presumably, Bernstein accom¬
panied Mr. Gutt with a view to
assisting the managing director
of the IMF in preparing his report
to
{
Holding International Trade Organization and International Fund
and Bank will provide mechanism for consultation on common prob-
Bernstein, who as a U. S. Treas¬
ury
official
worked
with
Dr.
Harry White on the BW program
from the
\
Associate Professor of Economics, University of Virginia
—
ground
for expecting
assistance to Denmark in
due course.,
of fair
rules
which will
the
cure
.
dealing
private enterprise. Specifically wo
would like to outlaw by interna¬
tional agreement all exchange re¬
se¬
max¬
imum benefits
strictions
interna¬
from
tional
particular
and
rules
standards of
Albert J. Quisl With
international
trade which
Schoellkopf,
roy,
Inc.,
Hutton
,
Pome-
&
announces that Albert J.
Quist,
formerly
Struthers &
with
Co., has
Wood,
now
become
with
New York
office, 63 Wall Street.
the
firm
in
the
this
in
we
Schoellkopf, Hutton
country would
like
to
made
univer¬
sal are,
few
see
with
(Continued
Raymond F. Mikesell
on page
40)
*
notable
unregimented
activities
of
Address
by Prof. Mikesell at
Meeting of the
Academy of Political
and Social Science, Philadelphia,
Pa., April 19, 1947.
the
51st
Annual
American
United States Government
United
State
and Municipal
Railroad, Industrial
Public
with their expanded money supply
.
and
helps restore the balance of
money and goods."
•
brakes
on
attention,
of
Kingdom 4%, 1960-90
Rhodesian Selection Trust
Utility
BONDS
Gaumont-Britisli
Investment Stocks
Scopliony, Ltd.
I.
enterprise
but
the
other
course
that
tax
need
brake
is
British Securities Dept.
probably the most powerful and
is
surely
the
easist
to
Dr. Burgess concluded.
release,"
;
^
Members New York Stock Exchange
68WilIiamSt.
New York 5
Knowledge
•
,
,
,
Goodbody & Co.
201 Devonshire St.
Boston 10
Experience
•
jor Investors
Facilities
Members
*
a
exceptions, those which are con¬
sistent with the principles of free
international trade carried on by
the
current international
,
trade
for all nations.
The
on
transactions, all export subsidies
and import quota and licensing
arrangements (except those con¬
sidered necessary for the Depart- %
ment of Agriculture's support price
program), all restrictive interna¬
tional
cartel
arrangements,
all
tariff preferences (except our own
preferences with respect to Cuba) ;
and all state trading activities.
The four cornerstones of Amer-
resources,
are
-
appears
from time to time in cases where
the
stances,
Reductions of tax rates were fol¬
lowed by increasing tax yields."
"There
do¬
multilateral
Reportedly the two trav¬
together in Copenhagen,
renew
pay
for
rela¬
there
(Special to
the ."Chronicle")—E. M.
Bern1
stein,- acting director of research
of the IMF, by prearrangement
left Washington early last-week
to -join Mr. Camilla Gutt In Eu¬
the objective is
restimulate
interna¬
tional
demanding.
be
{
point of view
of
time'when
reduced they can¬
are
easily
and
is
a
so
at
\
Foreign policy, by definition, has to do with matters which ex¬
beyond the boundaries of the country concerned. From the
1*1
associated
"There may seem to be a cer¬
tain contradiction in a program of
i
Trade Practices Under
means
taxes, for they are today
on
incentive. ?
?
reducing
tend
may
members
measure
tional debt has
fear
taxes.
is
penalizes
removes
"At the end
-countries
States
system
April 17, 1947.
seemed to
greatest
their extra exertion, their extra
concentration.
The
present tax
New York City
the
the
on
cal Science in
war
of
one
to
depends on the full blossoming of
the energies of millions of leaders,
of Politi¬
each
that
United
fore the Acad¬
of
clairvoyance
no
handicaps to productivity in the
of
New York, in
an address be¬
emy
subject of taxes the
needs
know
National
City
the
banker-economist said:
Debt and ViceChairman
of
in
one
Bank,
eled
dangers of a continuing huge public debt were cited by
Dr. W. Randolph
Burgess, Chairman of the Falk Foundation Com¬
mittee on the
'
<§>On
can be present
The issue has been a
controversial
very
rope.
The broad
management
of the Public
McCloy
to preside.
WASHINGTON
Banker-economist points out after first World War reduced rates
produced higher yields. States present high rates are "bad medi¬
remove
unilaterally, bilaterally, and now multilaterally.
States bilateral approach restricts trade; but multilateral method
of agreement has great advantages of: (1) obtaining clear state¬
ments of national positions in open;
(2) expanding trade; and
(3) promoting needed international interdependence.
!the holding of an election for a
thirteenth executive director until
President
'
national agreements
Abroad With Gutt
Toi Themselves: Burgess
cine that
Dr. Thorp traces historical steps in successively concluding inter-
|
con¬
Fund Researcher
tax Reductions Will Pay
|
World Bank
at
made
page
on
the
Assistant Secretary of State for Economic Affairs
.
sidered and postponed decision on
Congress is now considering the first tax bill to provide
significant relief under the individual income tax since 1928.
reduction
April 16, chairmaned by ViceGarner, the board of di¬
on
By HON. W1LLAHD L. THORP*
(Special ' to
—
7
International Agreements and
International Trade
"Chronicle")—In its meeting
President
The
The
'
Executive Director
University
Dr. Lutz, in
i
World Bank Postpones
Decision on New
:
(2199)'
N.
Y.
Stock Exchange and Other
115 BROADWAY
Telephone BArclay 7-0100
Principal Exchanges
NEW YORK 6, N. Y.
Teletype NY 1-672
'
i„),..a|, „'», j 1*1*1 'njiiiwu'
Banking Without Tears
COMING
By RAYMOND RODGERS*
EVENTS
Investment
In
time ago requested
Commonwealth & Southern some
April 25, 1947 (New York, N. Y.)
SEC ap¬
preferred
sub¬
proval of a plan to exchange up to 400,000 shares of its
stock (with about $23 arrears) for the common stocks of three
sidiaries—Consumers Power, Ohio Edison, and Southern Indiana
Gas
& Electric. The proposed basis of exchange would be two shares of
preferred for three shares of Consumers, two shares of Ohio, and
1 " 1 11
■"
'-»™
a
Tm/44 ovlo
—
Southern Indiana.
two shares of
'■
'
'
exchange offer, if consum-
The
approved by the mated, would give a former hold¬
SEC on April 11 and Common¬
er of Commonwealth preferred $7
wealth issued its detailed "plan
in regular dividend income in¬
of exchange" April 16. The offer
stead of $6, and payments would
will remain open to (1) the date
doubtless be more regular (for a
when 400,000 shares have been de¬
number of years in the past Com¬
posited for exchange, (2) May 5, monwealth paid only $3 a year on
(3) such later date up to May 20 its
preferred, although last year a
as
the company may determine,
total of $9.25 was paid and this
or (4) later dates if permitted by
year to date $6 has been paid, re¬
the SEC.
The exchange offer is
ducing arrears to $23). However,
voluntary and is not to be en¬ he would relinquish all claim to
forced by Federal Court order. If
remaining arrears.
more than
400,000 shares of the
Consumers Power has been sell¬
1,441,247 shares of Commonwealth
preferred are deposited for ex¬ ing recently around 35, Ohio Edi¬
son around 32, and Commonwealth
change prior to the close of busi¬
Southern at about 120, so that on
ness on April 28, deposits of 24
an arbitrage basis (ignoring divi¬
shares or less will be accepted in
dend adjustments) Southern In¬
full (to the largest even number)
The plan
was
subject to
and the balance will be
rata acceptance. If less than
300,000 shares are tendered Com¬
monwealth reserves the right to
pro
would
diana
to be worth
appear
marketwise, about 35. This figure
would reflect a dividend yield of
about 5.7% and a price-earnings
12, based on the
The Bankers
"exchange share earnings of $2.95 last year.
In considering whether to ac¬
agent. Delivery of the new cer¬
tificates is expected to be made cept the plan, holders of the pre¬
to depositors around May 29,1947. ferred stock have to weigh the
is
Co.
acting as
the proposed future dissolution of
Commonwealth
against the in¬
company in
1946 issued
additional common stock to
ties of the common stocks to be
are
New
(each
some
amount of their eventual claims in
Power
and
Ohio
currently traded on
York Stock Exchange
Consumers
Edison
the
raise construction funds) and ap¬
plication has been made to list
Southern Indiana also;
It is an¬
ticipated that there will also be
"when distributed" shares
three
companies
a
of the
three stocks
be
Record
tlement
10
.Jun 30
rnuthcm Itid. G, & E._ jun
10:
May 23, 1947 (Philadelphia, Pa.)
Bond Club of
Field
has
the
the
any
set¬
Commonwealth
oi ^course the
though
final
right
(with
any
nual
Golf
Outing
Country Club.
fixed amount.
nual
12,
QUOTED
Public Service of Indiana
Puget Sound Po wer & Light
Federal Water & Gas
Southwestern Public Service
j
■
■
>"
y
•.
,
i
' i
Prospectus
he?!
•; } t•
on
.r
Picnic
(Minneapolis
White
the
at
-
St.
Bear
■
i. ■*
*•
Request
Paine, Webber, Jackson & Curtis
Established
1879
new
conditions brought about by
competition in industry and com¬
either
unable
been
or
Raymond Rodgers
un¬
petition among the banks.
In
the
ness
failures.
we
this
competitive era which
entering, the comptrollers
are
and
auditors'
cial
planning,
functions
death
and
Common
future
more
&
two
or
banking will depend
during the next
three years than on anyyou men
other group.
This is not to depre¬
cate, in the least, the importance
(Continued on page 43)
.
♦An address by Dr. Rodgers be¬
fore the 12th Eastern Regional
depression, primarily Convention of the National Asso¬
of
Bank
Auditors
and
prices will uncover ciation
New
York
City,
many unsatisfied: demands which Comptrollers,
will prevent the bottom. dropping April 23, 1947.
serious
because lower
Securities Associ¬
June
14, 1947 (Chicago, 111;)
Traders
Bond
annual
Field
Club
Day
June
How Are the ilanks
/
Chicago
Party,
*
Country Club.
of
.
Milwaukee
Bond
Merrill
at
Club
Hills
.
Bond-
(Wesiflel^
Club
-
of
New
annual
Country
/
N^
Jersey
Spring Field Day at the Echo Lake
Country Club, Westfield, N. J.
July 15, 1947 (Detroit, Mich.)
problems.
-
Security Traders Association of
Detroit & Michigan Annual Sum¬
Golf
'
Party, Orchard Lake
Club.
Also a cocktail
—
banks doing?
Depositors and customers as well as
stockholders are interested in the answer.
The healthy condition of
How
banks
all
are
of
is,
body's concern.
business, banks,
course, every-<S>As in all other down, tabulated,
for all banks as
too, need suffi¬
bay operating ex¬
penses,
meet Unforeseen losses,
Aug. 10-14, 1947 (Boston, Mass.)
provide for income taxes and
National Security Traders Asso¬ leave a fair margin for the hire
ciation annual convention.
of capital.
The public cannot ex¬
Nov. 30-Dec. 6, 1947 (Hollywood, pect sound banking conditions to
continue, unless banks operate at
Fla.)
an adequate profit.
•
Annual Convention.
to
Chicago
*
bank accounting methods and points outmeans whereby stockholders and public are deceived, as to bank >
earnings and assets. As factors contributing to reduced bank earn«. A
ings, points -.ot&incomeiirom -Treasury securities will be redncedi
and Operating expenses together^ with unprecedented competition;);
among banks and betweed bank and non-bank lenders will become :
more severe.
Calls for a better understanding of current banking >
Mr. Schapiro criticizes
Club, Waukesha Cotihty, Wise.
Jun*37, JL947
«y
••
President, M. A. Schapiro & Co., Inc.
*
20,1947 (Milwaukee, Wis.)
picnic
Doing?
By MORRIS A. SCHAPIRO*
7
Acacia
.
cient income to
various
classes
well
component
of
—s-
—
and
banks,
leases to the press
s
combined
as
the
for
groups
and
Through
re¬
and by official
publications, the Federal Reserve
Board, Comptroller of the Cur¬
rency, F.D.I.C., and State bank¬
ing authorities present both their
findings
and
interpretation
of
bank earnings.
It is on the basis
Stockholders, of course, should
of these findings that the public
know how their banks are doing.
judges how well or how poorly its
In recent years, there has been a
banks are doing.
healthy trend of giving stockhold¬
It
is
of
vital
importance*' to
ers 'more
informative
repbrts^
has been
figures still
continues in many banks where
managements have not yet recog¬
nized the fiduciary' nature of their
relationship to stockholders.
While
much
progress
banks and their stockholders that
true picture
in the banks.
generation ago banks cared lit¬
tle about the public's understand¬
ing of banking problems. ;?<But
times have changed.
Some of the
the
of
public
the
gets
what's going
on
A
public is represented by the problems, which banks will have
banking and fiscal agencies of the to surmount are without prece¬
Government. - The public looks at dent.
Banks need' an informed
banks throughuthe figures which
public if they are to solve these
they periodically furnish to the problems successfully and survive
bank
supervisory authorities on as private enterprise.
The obli¬
forms designated by these agen¬
gation of bankers to explain'their
cies.
Information on assets and
problems to the public is grow¬
liabilities, earnings and dividends ing.
*
*
in these official reports, is broken
Here at this meeting are met
Co,
the very
*
BROADWAY, NEW YORK 6, N. Y.
Wire
banks.
of
on
.
Direct
to
importance
It is not too much to say that the
.
Northern Indiana Public Service
29
finan¬
\ The
v
Gilbert J. Postley
of
control and
expense
cost reduction will become of life
made, the blackout on
Midland Utilities
Common
ternal "reconversion" to meet the
.
Philadelphia
have
to
that
so
While I do not anticipate that
Club's annual this recession will
degenerate into
Bond
have
over-employment.
13, 1947 (Cleveland, Ohio)
Cleveland
scrutinizedan
in¬
be
more
will
buyers have
The recession is not yet fully
preceded Wed¬
nesday night, June 11, with a apparent, because production is in
cocktail
party
at the Nicollet great volume, the national income
is at record level and unemploy¬
Hotel, Minneapolis.
ment, although now beginning to
June 13, 1947 (Boston, Mass.)
j!all off, has been at even more
Municipal Bond Club of Boston than a full-employment level—it
Annual Outing. H : ,, J
has been rather on the basis of
June
once
Banks
Yacht Club, to be
Investment Bankers Association
"w:■'
i'.V-. ii'
will
willing to pay
•
^Indiana Gas & Water
hWK?'■
v
1947
the
'
meet competitive prices and costsLosses will increase and credits
prices asked.
This has re¬
sulted in declining volume of sales
Paul)
Twin City Bond Club 26th An¬ accompanied by losses and busi¬
June
mer
Southwestern Electric Service
r r
Inverness
at
party and buffet dinner on July
14 at the Savoyard Club, Detroit.
SOLD
—
13th An¬
certain
the part of
Our bankers will have to sharps
en their pencils and dig deep to
these fields
poor,
(Toledo, Ohio)
Club of Toledo
on
necessitate
and
Recession and the Banks
v
liquors. Prices
high and qual¬
Day outing at the Sleepy Hollow^ ity has been
Country Club, Scarborough, N. Y. relatively
Bond
policy
and wines and
Bond Club of New York Field
June 6, 1947
in
banks.
have, by and
large,
been
(New York)
market, this recession
nonetheless
changes
foods
June 6, 1947
Country
BOUGHT
remedial actions
in
approval) to assign
ing value of the estate rather than
Jtin 30
will
frozen
Philadelphia An¬
at the Philmont
Day
out of the
clothing,
Country Club, Philmont, Pa.
claim of at least
only a percentage of the liquidat¬
Aug 20
Jun
Ohio-Edison
"bear
observers
Date
8
House.
deteriorate
some
a
Federal Court
Pay't
Date
;Of
"estate";
as
Aug
Annual Convention at the Palmer
particu 1 a r 1 y
furs, ladies'
Club, Llanerch, Pa.
The Commonwealth
to fear.
SEC
Power
Illinois Bankers Association 56th
erch Country
other hand;
continued
any
The long anticipated and much advertised business recession 'is
So far it has affected primarily the so-called soft goods lines;
shoes, jewelry,
cosmetics,
May 19-21, 1947 (Chicago, HI.)
nual
longer important in bank¬
here.
equal or aver-*
premium Js obtained) in
follows:
C asumers
the Shannopin
Pittsburgh. ■
■
are no
Field Day at Llan-
$123 and possibly $133 (if the call
$2^' annually,iand the^next'dates
ofrpayment :of1 the?: 50^qharterly
-
in
preferred has
are
paying dividends at the rate of
probably
Outing
Country Club,
at
(1) that commercial loans
government bonds at profit and then repurchase same bonds later,
and selling hp premium to be amortized.
Traders
Annual
ation Annual
On the
market"' which
of the exchange offer.
amounts "would
Securities
First
all
stocks might
common
further
(ranking
140
on an
basis).
age
seem
stocks
Pittsburgh
Association
June 13, 1947 (Philadelphia, Pa.)
deposited to justify consummation
common
May 2; 1947 (Pittsburgh, Pa.)
ceived for each share of preferred
sufficient number of shares
three
.
the bundle of common stocks re¬
about
I
ing; (2) commercial banks have no concern about real estate
loans; (3) term loans are profitable at present low rates; (4) con¬
sumer credit is highly profitable;
and (5) that banks can self
Eleventh Annual Din¬
at the Waldorf-Astoria.
may again sell in the market to
yield about 5%, this would make
of the preferred stock have been
All
ner
York
spring party and silver anniver¬
sary celebration.
worth
lacies:
Security Traders Association of
New
ally sound utility operating stocks
the Exchange
Commonwealth to
Assuming that eventu¬
received.
advice by
upon
appreciation possibili¬
and
come
trading on* the Exchange in the
that
about
of
ratio
reject .all deposits.
Trust
' "v
;
Professor of Banking, New York University
Field
Assuming recession in business, Dr. Rodgers maintains bankers will
have to check closely on costs and credits.
Lists as banking fal¬
Exchange Plan
Commonwealth & Southern
'ii
Thursday, April 24, 1947,
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2200)
8
aw
A talk by
Mr. Schapiro before
of Bank
Comptrollers, New
the National Association
Auditors
York
and
City, April 22, 1947.
.
•
,
officers of many of our
banks, who furnish the operating
official
figures
contained in the
returns
forwarded to the banking
(Continued on page 38)
-
Volume
Number
165
4588
THE COMMERCIAL & FINANCIAL
CHRONICLE
(2201)
A Financial
Chileans Feted
Expert Looks at U. S.
By ARTHUR N. YOUNG*
WASHINGTON
been
in
Washington
;
i
relative to other countries.
»
dollar bonds have urged the Bank
not to make a loan to Chile with¬
out better provision for old bond¬
holders, the Bank
>
A. financial adviser
should take
looking at
over-all
an
view.
country's financial situatiori
a
should try to see what is
He
with it, and be^
thankful
with
should
fact
be
and in position
to
point
out
We
a
bout
the
trends
are
leading.
and
politics, I
people
free
other
happy if
water
had
we
once
The United
Looking
proud
some
States is unique
at
position
our
home and in relation to the
there
between
our
and
contrast
situation
of
sound
/An address by Dr. Young be¬
Economic
March
Club
of
as
eco¬
First
this country as
Second, in our
can
to help other
can.
interest,
should do what
we
become
to
(Continued
31, 1947.
in
keep
we
countries
country
our
properly
own
Detroit,
at
world,
financial affairs.
should
we
other
we
fore
for
nomic and
high standard of liv¬
the
on
and
page
stay
30)
President, Dittmar & Co., San Antonio, Texas
U. S. investment banker outlines recent Mexican industrial progress,
opportunities for American investment capital in
Mexico. Gives, eleven-point program for acquainting American in¬
vestors v/ith Mexican progress and for creating necessary interest
ou;
bankers.
part of Animcan investment
One of the
tration is the
as
collector of
U.
Gov¬
S.
circles
'the
pressure
which bondholders have
sought to
put on. Chile is unwarranted. For
some
reason,
been
singled out when there
worse
it is said, Chile has
examples
where
in
of
South
default
anyway Chile's case is not
as
it has been painted."
are
else¬
America
"and
dark
as
There
is_
no sign that Chile will not in
due course get a World Bank loan.
Calls for joint research
programs in which
'sales, purchasing and engineering participate; ft' 1
However troublesome
what
lies
ahead
ward
signs,
played
either for
political rea¬
or
-
of
cause
d
be¬
the
e,
the
"Chronicle")—The
research
staff of the IMF—which since BW
has had before it the
request
of
silver-producing
interests to do
for silver—is seeking
information on the monetary use
something
and
movement
of silver
vidual countries
by indi¬
the years. It
over
be anticipated that silver in¬
terests will again raise the ques¬
tion at the September governors
may
meeting in London.
E. F.
foreigntrade develop¬
They even emphasize the
backlog of natural -re¬
sources in .the country and to
pur •;
pros-,
pe¬
have
dom
failure
needs
as
sel¬
seen
provided,
—-
f
o
course,
H.T. Lewis
we
can
really get moving before it is
too
late.
Those
least four
who
look
for
at
five years of a high
or
level of business activity, in the
last analysis, base their reason¬
ing
the
on
the still
of
to
national
but
"all
the
world
needs
CHICAGO, ILL. U- Edward F.
Wrightsman
with
has
become
Barcus,
asso¬
Kindred
&
man
was
formerly manager of
municipal bond department
for Harvey Fisk & Sons in New
York City.
the
equipment." A All of these
generalizations are supported by
a great array of these
very tang/
ible facts.
and
an
Income payments are at
all time
high.
Output of bitu¬
minous coal, crude oil, and elec7
trie power are not only above what
ing power. They point out that
only a beginning has been made they were a year
ago, but are well
in satisfying that demand. Indeed,
ahead of the 1941 average.
Ex¬
in the
automobile field
(which penditures on new plants and
many contend is the key indus¬
equipment more than doubled in
try) the supply is probably far¬ 1945, and these expenditures have
ther behind the demand than it
continued at a high rate in 1946,
was
a
year ago.
To this funda¬ Retail sales are at unprecedented
mental factor the optimists add a
of
number
the
intangibles,
demonstrated
such
results
of
as
the
levels.
Employ merit; ihstead of
dropping off after the confusion
of
war, has increased to nearly
60,000,000*
If the cost of living
ply proven during the war; to the has risen, so have wages.
Bank
deposits, and new life insurance
are
at an unbelievably
^Remarks of Dr. Lewis before figures
One need only men¬
the Purchasing Agents Associa¬ high level.
Other
tion of Philadelphia, Philadelphia, tion the housing shortage.
American will to produce so am¬
(Continued
Pa., April 10, 1947.
Of
HaSsey Stuart & Co.
David
T.
Miralia, who is in
charge of the municipal bond de¬
on page
33)
Halsey, Stuart & Co. Inc., 35
Street, has been elected a
Wall
principal objectives of President Aleman's Adminis¬
ner development of Mexican industry.
Much has
11
"EWVn &C6VT6
X liLJuiVAwwli 1
m
'mm
partment of the New York office
of
Vice-President,
y-
"Reserve for
fur
been done>
(1) Municipal utilities
proved
and
additional
Monterrey, for
.xample,
has
to
grown
t h
be
"Pitts-
e
burgh''
of
Mexico. It has
•he
largest
Mill
Steel
Mexico
of
the
—
in
one
largest
im¬
water,
(2) Transportation — improve¬
in the country's railroads,
air lines, bus lines and truck lines.
(3) Building materials.
(4) Packing house facilities.
(5) Development of dairy prod¬
ucts and many others.
ments
North
in
—
electric power plants.
and
sewer
All of this will take millions of
America.
dollars—much
Natural
Seymour Gertler Joins
has
been
brought in
from
than the
in¬
private capital that has
been pouring into Mexico during
the last few years.
Texas,
the pipe
Hourwich & Co., 27 William
Street, New York City, members
of New
York
Security Dealers
Association, announce that Sey¬
mour
Gertler, formerly of Gert¬
ler, Stearns & Co., has become as¬
sociated with them in their Sales
Department.;, i. /
«
'
A
< ■ »
found
in
Mbn'u
and
'
in
and
McWard & Co. in San Fran.
(Special to The Financial Chronicle)
-
around Mexico Ciiy
Towever, the
surface hasn't even h en scratched
in this country yu¬ ah
an natural resour*/ r
Among the
so
rich
Iditional in-
mane,
dustries needed
is
xico
r
are
the
,
Cameron, Director.
The
latter,
however,
consists
mostly of businessmen who have
lived
However,
sources
cient
following:
addrej^
Investment
of
E
America
JLeon, Mexico; A r
Dittmar at
country,
know
the
funds
not
the
from
be
huge
;these
nearly suffi¬
program
at
Herbert Blandford in Elmira
ford
is
conducting
a
son
Avenue.
*
ments—more orofitable than those
Bladgley, Inc., 8 West Fortieth
Nuevo
presently obt?i—»ble in the United
(Continued
technical terms that
so
sense
on page
39):h,.A
of the
often confuse—"Accounts
Payable", "Depletion", "Fixed Assets", and the rest.
More
important still, you'll be better fitted to "In¬
vestigate then Invest".
,
of "How
write
to
Read
a
Financial Report",.
Department T-9
Merrill Lynch, Pierce, Fenner & Beane
Underwriters and Distributors of Investment Securities
Brokers in Securities and Commodities
°
Bladgley, Inc. in New York
-ey,
you'll find it makes sound, everyday
securities
business from offices at 403 Madi¬
Thea verage American investor
is interested in "orofitable invest¬
.0, 1947.
financial
ELMIRA, N. Y.—Herbert Bland-
Group of
:as
■
become "snarled up" when you sit down to
report?
Do you bog down when the accountants show
"Reserve For Contingencies?' on the liability side?
If you are one of thousands of such investors—who
also realizes that understanding a financial report is
important to you—we'll be glad to send you our new;
booklet, "How to Read a Financial Report". We think
a
For your copy
Association
v
-
the
will
for
hand.
the Convention
in
customs and habits of the people
and fluently speak the language.
Do you
read
Financing in Mexico is pres¬
SAN
FRANCISCO, CALIF.—
id
ently done by the Nacional Finan¬
Elmer A. Dittmuv
lines financed cier of Mexico, the equivalent of McWard & Co., Inc., has been
principally by -;!e dean capital, our R; F. C.; private banks, which formed with offices at 333 Mont¬
Monterrey 'further- boasts one of include the three largest banking gomery vStreet to
engage in the
the j largest
breryy ies in North groups of Mexico City — Banco
securities business. Officers are
or
of
America.
large Nacional de Mexico, Banco de
A
n
cement plants hu\ e been built in Commercio, Banco Internacional I^ymond W. McWard, President;
Monterrey and od
places. Many and their affiliates throughout the G. Arata, Secretary, and William
s
are
to be country, and private individuals.
-other large induct
J.
-
mi mm
Staff of Hourwich & Go.
dividual
gas
more
Amer¬
ican
still
latent buy¬
such
new
roads,
bridges,
schools/flood control, and other
public improvements.
Basically,
however, the optimists base their
arguments on the backlog of demand for capital goods,
arguing v
that not only the United
States,-
a
enormous
meet
,.as
demand
existence
deferred
enormous
on
huge
ment.
fabulous
.
Wrightsman With
Barcus, Kindred in Cgo.
ciated
a
11
a
a
of
a
existing products, such as auto¬
mobiles, as will make present
plans -; and
equipment, t obsolete.
They point to the possibility of
confi-
e n c
new
in
gen¬
eral
we
to
such
fear of under¬
mining
development
of
some
industry, or evem of
revolutionary development'
great;
up
perity such
(Special
-—
possible
so
riod
WASHINGTON
<$>-
well
sons
A
questions may be, the question of
the most immediate and the most
business is
pressing. Cer¬
tainly the out¬
point to
Silver Studied
for
other
production/
'
David Miralia Y.-P,
By ELMER A. DITTMAR*
on
without,
as
some
Co., 231 -South La Salle Street, in
charge of their syndicate
and
trading departments. Mr. Wrights¬
Prospects of American Investment
Banking in Mexico
and points
In
two clear main lines of
are
policy
enormously powerful
economy and
ing
striking
in
both
reaction
the
run¬
a
to see how much is right
with this country. My outstanding
is
debts."
from
its economic and financial strength.
am
application
put it, "acting
can
day, electric
light even though dim, and coal
enough to heat one room.
may
repatriated American I
old
a
ning
detached position—I hope
not too detached.
a
each
were
a
As
with
in
resources
where
area.
our won¬
genius for technology, and
not too large a population.
Our
average family little realizes how
high are its standards of comfort
and
luxury.
In Chungking we
one who has been
outside of
this country for most of the past
17 years, and been apart from its
have
great
with
As
controversies
be thankful for
can
some
tariffs and like restrictions, a re¬
sourceful
working population
state of things
and where
Arthur N. Young
some¬
third of the world's goods.
a
trade
not
palatable
—a
Here
it.
derfully rich natural
even
though
increased
we
like
—
war", our
thing like 5% of the world's people
produce and consume something
disinteres ted
truths
the
territory suffered no attack,
and we did not have to reduce o,ur
total civilian consumption— iii
done about it.
He
During
main
it, and what
should
be
Chile's
ernment
countries.
that, and what
is wrong
right
:
for
business.
to be go-
seems
ing ahead with the processing of
The Overall View
v
Dr. Lewis
.
;
,
contends an era of
prosperity can be attained by business,*provided management starts using more dynamic tactics in ward¬
ing off depression. Holds major durable goods boom is
likely to;
last three years and stresses wise
application in management con-trot of "a pooled
judgment" of executives in all branches of a»
application, was entertained at
by the Federal Reserve
Board
on
April
18.
Although
American holders; of old Chilean
luncheon
v
tage of our present strength to anticipate expected future longterm decline in nation's
economic, financial, and political position
,
; By HOWARD T. LEWIS*
Professor of Marketing, Harvard Graduate
School of Business
discussing
with the World Bank Chile's loan
Newly repatriated economist offers detached analysis of country's
Notes enormous growth in national income, - debt and
taxes, since First World War* Strongly urges us fully to take advan¬
-
to
"Chronicle") — A three-man
Chilean
delegation,
which
has
prospects.
-
(Special
—
the
Former Economic Adviser to U. S. Department of State; and to
Governments of China, Mexico, and Honduras
-
9
Street, New York City is engag¬
ing in the securities business
70 PINE STREET
,
NEW YORK 5, N. Y.
'
Uptown Office: 730 fifth avenue
-
.
t'
commercial & financial,
the
•10: (2202)
bid
modernization of the
and
UliU
ment
city of Cleveland's
Board for improve¬
surface transportation system and
r-;-T
rapid transit line.
refinancing the system to build a high-speed
line between southwestern Cleveland and the western suburb, Lakewood, and inauguration of a Iim-^
*
"
Fahey, Clark & Co., Cleveland,
ited rail operation to two east-'
and
Ryan, Sutherland &
Co.,
ern
suburbs, East Cleveland and
Toledo, on their bid of 100.59
Cleveland Heights.
a
of revenue
Council for
tion for the issuance
before City
bonds, is
approval.
rapid
cent
calls for $8,000,-
high-speed 15transit line on the
build
to
a
$8,000,000 for
capital improvements other than
rapid transit, including new bus
garages and overhead trackless
trolleys;
$6,000,000
to retire
bonds now outstanding from the
purchase of the system from the
old Cleveland Railway Co. five
years ago and rubberization of
city's
1967. The
proceeds will be used for pur¬
chase of real estate^ and addi¬
serially from 1948 to
tions to
school building.
west side;
Side lines except one,
traekless trolleys on five
Bosworth & Co., Toledo,
won $200,000 North Royalton Lo¬
a partner of the New York
cal School District bonds as 2s, Exchange firm of George
proceeds of which will be used bright & Co. He haS been
for additions to existing buildings.
ager of the firm's Buffalo
*
$
A
Ball,. Burge & Kraus group
$250,000 City of Euclid water
Chairman, William
main 2l4% bonds which brought
C. Reed, says that construction of
a total of eight bids.
the West Side route would begin
The
winning bid was
102.17,
by Sept. 1 if the plan is approved
by Council before adjourning for which just edged out the No. 2
bid of 102.09 made by Stranahan,
the Summer.
Harris & Co.
Otis & Co. was third
Construction of this route will
The
■
that post.
Board
,
All were for
with 101.67.
2V2s.
the
building of nine
In the Ball, Burge group were
2,000 feet of subway, a
railroad underpass and 1,000 feet Roose & Co., Toledo; Fox Reusch
& Co. and Browning & Co., both
of deep cut with retaining walls.
of Cincinnati.
The bonds were
Mr. Reed stated that invest¬
reoffered to yield from .80% to
ment
firms
have agreed the
2.50%.
plans are sound and that the
■j,x
*
*
Cleveland Transit System would
William
Mericka and Carl
let bids as soon as it is apDoerge, of Wm. J. Mericka & Co.,
approvei.
Cleveland, were the only Ohioans
The City of Cleveland also is among the 100 or so out-of-State
expected to ask for bids on May 6 guests attending meeting of the
on
proposed $6,100,000 general Texas group of the Investment
Bankers Association, which gath¬
obligation bonds.
Of the proceeds, it is planned to ered at Monterrey, Mexico, April
9 to 12.
man¬
office
of
were
prices. The
strange thing,
Co. and
&
The
Board
was
and contractors.
increased from
circles
Controller
;
with
ber of years
ments at City
*
#
•*
Several Ohio school districts in
the vicinity of
groups
successful in two sizable rail
Cleveland awarded equipment trust issues.
bond issues recently.
Wickliffe
were
Co.
&
Stuart
Halsey,
Local
A
School
Dis¬
trict awarded $225,000 bonds to
Halsey
Otis &
group,
Co. and First
including
Cleveland
Corp., won $5,440,000 equipment
trust certificates of Erie Rail¬
road
on
bid
a
99.2799
of
for
obligations.
The notes,
maturing from 1948 to
1957,
t%%
were
reoffered at prices to
1.10% to 2%.
from
Seven
Public
Utility
Operating Company Stocks
Recommended
for
Investment
will be used for the
500
all-steel
50-ton
yield
Proceeds
purchase of
box
cars,
300 50-ton all-steel hoppers
and
Diesel switch and passenger en¬
Copy
on
Request
OTIS & CO.
(Incorporated)
Established
1899
CLEVELAND
Chicago
Denver
Columbus Toledo Buffalo
New York
Cincinnati:
gines,
sented
Erie of
The
an
price
sale
interest
repre¬
to
cost
the
1.89%.
other, Halseyr including
Cleveland, reoffered $1,650,-
C&O
10-year
OHIO
CLEVELAND,
—
told
large group of bankers
a
brokers
on
and
12 at the Mid-
April
Day Club that within two years
the
may
company
capital
additional
require
large
its
finance
to
told that the electrical industry
is
Mr. Lindseth said:
eight times as large as
three decades ago and is
in its infancy.
"C. E. I. is
it
was
growing at the most rapid rate in
its 55-year history.
"Should
the
company
in the
30
fast
as
grow
years
only half as
it did in the last 30 years,
its total
investment in plant
and
•
North
American
Co.
is
disposing of its holdings in C.E.I.,
as a result of the 'death sentence'
clause
in the Public Securities
Illuminating stock in the future
because
its ownership will
be
BROWNHOIST
—★—
more
14,
Ohio
widely scattered." - ►
» was the first of a series of
This
in which officers of
various
corporations
listed
on
The
Cleveland Stock Exchange
will tell members of the invest¬
such meetings
Union Com.
BIdg.
CLEVELAND
Tele. CV 174
Co.
Union Cent. BIdg.
CINCINNATI
Tele. CI 150
page
on
45)
;
By ALF M. LANDON*
Former Republican Presidential
Candidate
Republican leader, in outlining national policies, asserts high prices
are more dangerous to free enterprise than Communist Party. Urges
business rid itself of "follow the leader" psychosis, and attacks in¬
Sees legislative need to erase labor monopoly
sound fiscal policy, lower taxes, tightening of
best corrective influence
as
on
cost of
ment fraternity about
plans
and
companies. ;
outlook
44J
v
living.
living under a Congress that does not owe itselection to the slush funds of the Federal Treasury — city gangster
Today
machines
we
—
are
or
t.
liberal
principles of genuine rep¬
resentative government.
leftist
the
F'AC.
That
1 i
I
mean,
with its committees
giving all sides full and fair hear¬
ings—with department heads;
RepubCon¬
ca n
huge expansion program. •
The meeting, sponsored by the gress has got¬
ten away to a
Cleveland Stock Exchange, was-
Richardson
Field, Richards
(Continued
How to Cut Prices
Elmer
Lindseth, President of the Cleve¬
land
Electric
Illuminating
Co.,
INDUSTRIAL
Commerce BIdg.
cor¬
credit/sensible tariff adjustments, and sound monetary policy, to¬
over arrogant bureaucrats of labor and industry
Act, it is expected that there will
be considerable more activity in
Union
deposits
and
individual
desp^e the fact the Treasury -has
York.
New
to
bank
in
increase
Parkinson
gether with control
Harshaw Chemical
Cleveland
dollars.
This
Brightwaters,
Syndicate,
Press
Sponsors Meetings
"Since
1582
billion
porate depositors has taken place
and urges permanent
ed out.
Annual statement xm request
pared with the end of 1945 of $18
through the Continental
dustry-wide pricing.
t
Drackett
statement of Mr.
Cleveland Exchange
serial equip¬ property by 1977 would be $800,ment
certificates
at
prices
to 000,000, or four times the com¬
yield from 1 to 1.75%. The high
pany's present size," it was point¬
000
to
1921, is the new
of Jack & Hentz Precision Indus¬
since
next
In the
First
held only $3 billion dollars of
bank deposits.
That leaves
individuals and
corporations
ury
lished, and it is difficult to under-
St. Louis bank for a num¬
a
prior to going to the
Hospital and $150,- Mexican Government post.
*
*
*
000 for street openings.
ket house, $150,000 for improve¬
less
means
$137 billions, or an increase com-
.
program,
$200,000 for a
health center, $400,000 for a rnar-
changed in that the U. S. Treas¬
money
higher prices for the things which
money buys.
The facts and fig¬
ures
are
now pretty
well estab¬
$1,000,000 for general sewers,
Industrial
financing
was
the tries, Inc., Chairman Byron C.
$1,200,000 for bridge improve¬
Foy, announced.
ments, $750,000 for the airport and chief topic discussed by the 225
Kemper
was
associated with
$400,000 for lakefront improve¬ persons in attendance. The prin¬
Westinghouse Electric Corp. for 22
ments in connection with the air¬ cipal speakers were Sr. J. M. O.
years, serving as Auditor of the
port, $750,000 for sewage disposal Monasterio, Minister of Finance of
construction, $500,000 for paving, Mexico,
representing
President Lighting Division in Cleveland
from 1938 to 1943.
Since then he
$300,000 to modernize police and Alemon, and Ramon Beteta, Sehas been with Diebold,, Inc., at
fire stations, $250,000 for recre¬ cretario de Hacienda y Credifo,
Mexico.
Beteta
was
connected Canton, O.
ation
use
Bank
down to $140 billion
But
the
picture
had
were
available
well-known
Kemper,
W.
and
supply deposits
serious dollars.
these
*A
auditing and controlling
the money
1946
purchasing value in each unit of
that money which in turn means
released
John
of
end
mately $28 billion dollars.
hold
to
money
direct
prices.
much
Too
Supply
Money
the
At
policies
our
provide
pressure on
five to seven members.
in
to draw funds to buy what
they thought they needed if they
could find it.
1
continue
officials,
and
Merrill,
Secretary, and
James Krumhansl, Treasurer, have
been
elected new Directors
of
Arthur G. McKee & Co., Cleve¬
engineers
This
corpora¬
govern¬
business
which increase
H. R. Moorhouse,
land
and
important
other
ment
Co.,
*
*
*
'
supply in the country was approx¬
imately $168 billion dollars. Money
in circulation was still approxi¬
beseech
ficials
prices,
Co.
&
Turben
Parkinson
I.
prices. While top government of¬
Maynard H. Murch & Co., Hayden, Miller
the
deposits,
individuals
to
power
T.
rising prices seems to ignore the
most
important cause of rising
Shep-
&
bank
$148
Of
U. S.
deposits.
litical recognition of the danger of
window."
McDonald
bank
in
tions, bank deposits of $124 billion
dollars on which they had the
is that this po¬
$40,000,000
debentures of
U. S. Rubber that "went out the
& .Co.,
left
ilatio-nary
the
ard
these
in-
called
are
$28 billions of it
Treasury held $24 billions.
.■
what
venting
dollars.
billions
of pre-
the end
at
approximately $176
was
in coin and currency and
was
and
ways
means
offi¬
Government
supply
money
1945
billion
y
Presi¬
dent's Cabinet
which offered
The firms were Hawley,
of
the
Kuhn, Loeb &
Co. and associates
Our
news
b
responsible
Federal
tively simple action necessary to
hasizes
p
discussion,
•
houses
Cleveland
Five
Bom
e m
the
the
relieve the situation.
them.
Current
why
of
cials
do not take the needed and rela¬
prices or '
reduce
'
members of the
.
require
bridges,
hold
Stock
it
it
it
bidder for
successful
the
was
major thoroughfares.
stand
ap-.
leaders to
ness
continue in
will
and
1941
since
daily
peals to busi¬
Captain of the South High School
football team here, has been made
all West
with
of Washington
come
,
Braun,
with the average citizen and his government representatives. - Out
up
is a member of
the
National
Automotive Parts
Association and stocks and dis¬
tributes more than 50,000 auto re¬
company
School District
placement parts. C. T. Reinberger
bonds, maturing of
University Heights, is ViceMay and Nov. 1, 1948 to 1967, to President and General, Manager
McDonald & Co., Field, Richards
of the firm.' >.•'~- <:• ,».
;
& Co. and Stranahan, Harris &
it
it
*
Co., the latter of Toledo. The bid
Hugh A. Johnson, who was
101.06 for 2s.
sapplyri^^*eriour ^
Rising prices and increased costs of living are rapidly catching
4% sinking fund debentures.
awarded $405,000
was
.
Says d*bt redemption has not reduced hank deposits,
.' and urges Federai Ksserye fir ehahge policy of buying any govern/ ment obligations held by member banks.
the Auto¬
Cleveland.
The
-
'i
•.IVY'';;,'..,:; .i-'V1''.
S
prices.
on
consists of 15-year
The financing
7' 7 ft
^
^whicfr jncreascfjncttey
financing
program announced by
motive Parts Co.
of
i
business: to fcbkfprices, cllier important officials continue policies
.
capital
new
Willoughby
The program
000
bonds which mature
2*4%
for
four-point program, including
resolution requesting authoriza¬
A
the
banking firm, was
ana
1
•
Mr. Parkinson points out while top government officials beseech
v
-;V
underwriter in a $300,000 expanr
sion
:
'
'
President, Equitable Life Assurance Society of the U. S.
s-
■
v
Columbus, in¬
The Ohio Co. of
vestment
•
f
|
*
«
e
By THOMAS I: PARKINSON *
of nine
tenders
,7 ,7
part the acquisition
freight locomotives with
to cost about $2,091,055.
construction of a
The board plans
the
a
in
Expenditure of $22,000,000—largest-In the
1'istory—has been voted by the Cleveland Transit
X.11C11V
repre-j
net ^interest
cost 4. oi
1.648%. The proceeds will finance
sented
Ohio Brevities
'
99.219 for 1V2S and
was
chronicle
compelled to reveal their policies
the American people through
splendid start,
to
both in trans¬
those
b
u s
i
n e ss
L
e
g
ation
of
and
i slature,
to
principles
which
The
—
and'
its moorings
adrift" in aspectacular ( irregular
country
lost
years
of
was
short-cuts and undemocratic pro¬
cedure in the transaction ©f pub-
the
o n
lic
the
business. It is but natural for
All M. Landon
perpetuity of
the Republic
is dependent.
The character of
government is equally as impor¬
tant as is its direction.
a
hearings
the floor of the Congress.
for
storm
and in return-
ing
on
Our
national
the
committee
thorough discussion and consider¬
the
acting
present Congress is giving
to
government—almost
tone
following the
Deal methods of
irregular short-cuts to legislation.
For the first time since 1933
public affairs are being conducted
by the Republican Congress as
they must be, if those affairs are
to be handled in accord with the
new—in contrast to
dangerous New
to
people
become thoughtlessly
with the slow visiblein the return to, normal
impatient
progress
essential methods ] of repre¬
sentative popular government. Al!
and
they see is the surface stuff.
People miss all the labor and
time required to investigate and
correct the labyrinth of new deal
regulations forced on the coun¬
try contrary to the intent of
Congresses.
Republican Promises
Understandably,
anxious
to
fsee
people
the
,
i
are
Republican
promises of the pre-election pe¬
*Address of Mr.
Landon at the
conditions, Republican 1 National Committee
for
their Luncheon,, Kansas City, Mo., April
22, 1947rr<s;vi;V •••.
.
4
.
r
j/f-
-
riod translated into laws. We want
taxes
;
>
1
reduced,
(Continued
the national debt
on
page
44)
/
Volume- 16S ' Number
4588
THE COMMERCIAL &
FINANCIAL
V*'. afat
CHRONICLE
(2203)
208
Implement the Truman Doctrine
Attorney General of the United States
:!
Says
Europe, U. S. is
that has proved his
•
J of
a
-
diana : Public
.£ Clyde Porcelain Steel
■
Detailed
of
eyes
Americans
the
of
stand
and
Nation
and
of
the
early
eisions
Tom
so
C.
Clark
mile
shaped by Jefferson and so pro¬
foundly influenced by the people
and the circumstances of this
has
city
in
power
limit." This
as
most
of
the
to mind at
notable
as
achievement
Also available
the
of
The house where Jefferson au¬
thored it stood on the southwest
the
in
Annual
not
so
Jefferson
spirit
is
dividual.
Day Dinner in Philadelphia, Pa.,
April 15, 1947.
is
the
It
the
on
River
Mills,
A.
Darling
and
'
an
Franklin
Also
available
Hydraulic
Press
Also
circular
Corp.—
Comstock &
.
.
send interested parties
Also available
'
;
the following literature'.
Bank
Stocks—Laird, Bissell &
Meeds, 120 Broadway, New York
Street,
Recovery
and the Tariff—Discussion—Delafield & Delafield, 14 Wall
Street,
an
on
Utility
—Ward
—
Four-page brochure
Qn
country and its financial con¬
dition—Chemical Bank & Trust
Co., 165 Broadway, New York 15,
N. Y.
"
"How
port"
to. Read
—
Financial
a
Booklet
Re¬
explaining
in
the techni¬
sound every day sense
cal terms that so often
confuse—
Write to Department T-9, Merrill
Lynch, Pierce, Fenner & Beane,
70 Fine Street, New York 5, N. Y.
■
\
Stock
Co.,
120
New York 5, N. Y.
Also
on
available
T.
Analyzer
—
Comparative tabulation—Geyer &
Co.," Inc., 67 Wall Street, New
York 5, N. Y.
Empire; Lanova Corp.; Mo¬
hawk Rubber; and Taylor Whart¬
on Iron &
Steel; Purolator Prod¬
ucts; Upson Corp.; Alabama Mills;
Pfaudler, Corp.; United Artists;
Vacuum Concrete; Barcala Mfg.
of
America—Special re¬
port—Walston, Hoffman & Good¬
win, 265 Montgomery Street, San
Also
ports
available
Boston
on
are
Bonn
&
Terra-Lite
detailed
Co.,
120
Herald
Traveler
Corp., Bullock's, Inc., Detroit Har¬
Co., Gabriel Co., Glenn L.
Co., St. Regis Paper Co.,
Leading Banks and Trust Com¬
of
secutive
New
York—60th
Utah
comparison—
New York Hanseatic Corp., 120
Broadway, New York 5, N. Y.
Oil
Industry—Detailed
on
situation
and
& .Co.,
60 Beaver
Street, New York 4, N. Y.,
.
,
Also available is the Fortnightly
Investment Letter discussing
Importance
nues
to
leaflet
of
Soule
Kingwood
Southern
Oil
Co.—Card
Boston
&
Maine Railroad
Circular — Walter J.
Connolly &
Co., 24 Federal Street, Boston 10,
—
Co.,
193
-
(Special to
i
Cola
Co.—Late
(Special
to
The
Financial
Chronicle)
Fourth and Olive Streets, St.
Louis,
Mo., members of the New York,
St. Louis and Chicago Stock Ex¬
changes. Mr. Daugherty prior to
serving in the armed forces was
data
Auto
for many years with Selected In¬
vestments Co.
The
Financial
Chronicle)
Dinkin has been added to
the staff
Co.,
2038
Broadway.
Burgess Battery Co; Com.
Chgo. Atiro. & Elgin Ry. Units
Franklin County Coal
Corp.
Corrugated Paper
Holeproof Hosiery Co.
Howard Industries, Inc.
*
Hydraulic Press Mfg. Co.
Long-Bell Lumber
Company
*
Miller
Manufacturing Co.
Oil Exploration Co.
Com.
*Old Ben Coal
Corporation
Trailmobile Company
r
*Detailed
-
analysis available
request
Currie &
Sum¬
74 Trinity Place, New York
6, N. Y. "
mers,
Comstock & Co.
CHICAGO 4
231 So. La Salle St.
Dearborn 1501
955
Central Steel & Wire
Co.,
Common
^Seismograph Service Corp.,Com.
*
Prospectus
Available
on
Reqifost.
H. Davis & Go.
Established 1916
10 So. La Salle
St., Chicago 3
Tel. Franklin 8622
(Special to The Financial Chronicle)
KALAMAZOO, MICH. —James
H. Tolhuizen is with E. H. Rollins
&
Colorado Milling &
Elev., Com.
""National Tank Co., Com.
Members Principal Stock
Exchanges
Chicago Board of Trade
With E. H. Rollins & Sons
Equipment—Cir¬
Teletype CG
405
Ind.
Rockford,
Cleveland, Ohio
111.
Indianapolis,
Sons, Inc.
SINCE 1908
J Fred. W. Fairman Co. L
JAMES MFG. COMPANY
COMMON STOCK
A
Descriptive Memorandum
Passenger
Public
cago
South
Utility
Sent
on
Central Public
Request
La
Salle
Reve¬
5^'s of '52
Corp.—
&
Street,
4, 111.
Co.,
Chi¬
Recent Review
Members:
Central and South West
Detailed
memorandum
mary—Fred
W.
Corp.—
and
Fairman
*
&
sum¬
Co.,
on
:
Request
208 SOUTH LA SALLE
/
the
the Railroad Industry; a
research comment dis¬
of
Central
Memorandum—Brailsford
208
Chicago
Stock
225 EAST MASON ST.
PHONES—Daly 5392 I* Chicago: State
ST.
CHICAGO 4, ILLINOIS
Exchange
MILWAUKEE (2)
0933
H y>;/
Teletype MI 488
1
J
*■
OAKLAND, CALIF.—Leon wJ
;
Daugherty With
CHICAGO,
ILL. —Claire
M.
Daugherty has become associated
with
Newhard,
Cook
&
Co.,
Oil
r
-
tmm——>
Newhard Cook of St. Louis
study of Wis¬
'
%
Main.
7
on
4, Ala.
Monroe
&
affiliated
Street.
Teletype CG
Claire M.
Thornton, Mohr & Co., First Na¬
tional Bank
Building, Montgom¬
.
Smith
become
•
ley Investing Co., Inc., 238 Gen¬
esee Street, Utica
2, N. Y.
Co.—Analysis—
Peter Morgan &
Co., 31 Nassau
Street, New York 5, N. Y.
ery
has
memo¬
outlook
—H., Hentz
7,
(Special to The Financial
Chronicle)
WATERVILLE, MAINE.—Lester
*
and Union Bag and Paper Co.
Mass.
randum
With Smith Co., Waterville
—
Utica & Mohawk Cotton Mills
Inc. — Circular — Mohawk Val¬
memorandum
a
7
Spring Street.
vester
con¬
quarterly
632 South
memorandum—Amos C. Sudler &
Co., First National Bank Building,
Street, Milwaukee 2, Wis.
Lime
ANGELES, CALIF.-^Wil-
lis 3E. Mathews has
been added to
the staff of Dean
Witter &
Ft. Wayne
Martin
panies
LOS
Broadway,
analyses of
Co.,
and orandum—Joseph Faroll & Co., 29
Broadway, New York 6, N. Y.
cular—Troster,
re¬
(Special to The Financial
Chronicle)
[
Circular—Caswell
& Co., 120 South La Salle
Street,
W. L. Douglas Shoe Co.; Hart-
ford
Bank
memorandum—
New York 5, N. Y.
consin Power & Light
Company
Loewi
&
Co., 225 East Mason
memoranda
are
—
—
Manufacturing Company
Also available is
Broadway,
Francisco 4, Calif.
'
Insurance
&
•
formerly with.
—
Descriptive
Aspinook corporation—Circular
Finland
Corp.
Sunshine
Consolidated, Inc.—
Supplemental memorandum
W.
Indiana Service Corp.—Analysis
Haupt & Co., Ill Broadway,
New York 5, N. Y.
:
Life
With Capital Securities
Manufacturing Co.
James
Tower, Cleveland 13, Ohio.
State
Jacobs & Low, 61
Broadway, New
York 6, N. Y.
investment by Otis & Co., Termi¬
nal
as¬
James
Joins Dean Witter & Co.
L.
Sperry
—
matter
D.
Isenhour & Co.
Denver 2, Colo.
stocks recommended for
was
-
CALIF.—
William
He,
:
Chronicle)
of^ Capital Securities
Brownhoist
Late
data
Gottron-Russell
&
Co.,
Union Commerce
Building, Cleve¬
land 14, dfiio.
Operating Com¬
Stocks—Descriptive
seven
Stern &
on
United States Lines Co.—Mem¬
Industrial
Public
Economic
Lumber
Financial
California
Building.
offering
Stern Textiles,
N. Y.
analyses of
Mfg. Co., Long
are
with
Company,
an
are
New York 6, N. Y.
analysis of the Mid¬
dle West Corporation.
pany
is
Manufacturing Co.—
Analysis — Steiner, Rouse & Co.,
25 Broad
Street, New York 4,
—Ira
roads; and
available
;
cussing Quarter Results for Rail¬
5, N. Y.
) European
Bell
t
Miller
j
Comparison and Analysis 1st
Quarter 1947 of 19 New York City
)
Trust
Co.—Detailed Analysis—Comstock
& Co., 231 South La Salle
Street, Chicago 3, 111.
Chicago 4, 111.
Long
understood that the firms mentioned will be pleased
to
_
&
Rockwell
Hotels Statler Co., Inc.—Memo¬
randum— Shaskan &
Co., 40 Ex¬
Investment
roke
The
Charles C. Sattes has become
sociated
Mass.
Coal
1
29)
to
,j SACRAMENTO,
with
turing Co., and Old Ben Coal Cor¬
poration.
Recommendations and Literature
It is,
,
Steel Car
Co.—Up-toCircular—Lerner & Co., 10
Post
Office
Square, Boston 9,
Hydraulic Press Manufacturing
r
(Special
Ralston
change Place, New York 5, N. Y
Deale
r-B
.
date
Bell Lumber Co., Miller Manufac¬
of
>
Joins Wm. D. James Co.
Public National Bank
Co.—Descriptive
analysis —
Co., 231 South La Salle
Chicago 4, 111.
•
Rail¬
on
.
inviolable
page
Exchange.
Mr.
Gartland
has recently been with
Link, Goi'i
man & Co.
,1
•
,
Co.—First quarter analysis—C. E.
Unterberg & Co., 61 Broadway,
New York 6, N. Y.
Inc.—Memo¬
Detailed
Chicago
Co.*
annual
County
Chronicle)
—
on
comparative
ing, Detroit 26, Mich.
captaincy of the soul. And while
(Continued
a
report—
Moreland & Co., Penobscot Build¬
Jeffer¬
freedom
'a :>•
Inc.
L.
dignity of the in¬
is
is
10
Va.
We
the
of
Dan
hearts today.
It
man.
developments
.
randum—Scott, Horner & Mason,
Inc.," Law Building, Lynchburg,
for¬
as
William
—
Financial
Stock
Prentiss-Wabers Products Co.—
New analysis—Adams &
Co., 231
largest stock casualty
insurance companies.
great spirit alive and aflame
our
That
address by Attorney Gen¬
at
table
empty
gesture to a great name, a great
man long
distinguished, but more
as
a
living acknowledgment of
.
Clark
do
leaflet
a
Portsmouth Steel—Card memo¬
randum on growth
situation—Ben¬
nett, Spanier & Co., Inc., 105 South
La Salle
Street,
Co.—De¬
The
ILL.
Thomas
J.
Gartland has rejoined
the staff of
Kneeland & Co., Board
of Trade
Building, members of the
Street,
—
&
brochure
Thomas
Wall
Byllesby and Co., Stock Exchange
Building, Philadelphia, Pa.
the
carry
49
.V
to
CHICAGO,
—
Co., 135 South La Salle South La
Salle Street, Chicago 4,
Street, Chicago 3, 111.
111.
a
custom.
party
founder,
We
son.
Pennsylvania soil.
*An
enabled
Hicke.y,
Study
—
ington Railway Co.—Discussion of
speculative possibilities
H. M.
on
:
Casualty
.memorandum
Blair
meet to honor the
memory of our
Independ¬
once
old
an
Party's
Declaration
ence comes
tailed
principle of in¬
a
democracy.
Tonight we gather to
ward
world.
The
law
RR.
Pittsburgh, Cononsburg & Wash¬
Spring Street, Los Angeles
Continental
the
,
circular
a
(Special
memoranda
Chicago 3, 111.
was a great Sec¬
as
is
are
1
14, Calif.
United States in its infancy to live
and' pro¬
is without dis¬
Today it
the greatest
pute
South
hot; .dog
American dishes;
it
&
roads.
New
Consolidated Engineering
Corp.
-Memorandum and annual
report
-Maxwell, Marshall & Co;, 647
the
described
ternational
grown
gressed.
He
Thomas
Street,
Son, Inc., and Gruen
New York 5, N. Y.
Also available is
iv
Foundation Company*
/ 7
neutrality zone within which no
beligerent could enter. It is now
commonly known as the "three
de-
Nation
and
100%
are
shore.
largely
eral
York 4, N. Y.
1 Also available
right of the United States in the
navigable waters surrounding its
From
the
-
the first to declare and claim
freedom, and
dignity of our
people.
r;—.
Vilas
current
retary
of
State.
During
this
period he lived here in Philadel¬
phia. As Secretary of State he was
pi the inde¬
pendence
of
our
SU Louis 1, Mo.
7th and Market :Streets.
.
Jefferson, too,
I
Americanism;
out
—=-
independence
democracy; of
America
1—
available
Pennsylvania
&
Co.,
Mississippi Valley Trust Building,
fh typical American ifashioh; this
site, I am told, is now a. hot .dog
fctaridP Both the Declaration " of
all
symbols
Corp.—
circular—White
Co.,* Inc., 41 Broad Street,
corner of
become in the
-
who
anyone
Also
Service
Co., and On Bird &
Public Service Co. of Indiana.
^ Watch" Co,
-
'4>—-—:
Brothers,
1420
Walnut
Philadelphia 2, Pa.
11
J. Gartland Now
With Kneeland & Co.
—
Presidency"^' £ Consolidated Dearborn Corp*—
Circular—Seligman, Lubetkin &
.
Northern Indiana Public Serv¬
ice
Memorandum
Buckley
•
• -
„
j
In¬
v-..
committed to ruthless imperialism
leadership.
^
.
Chi¬
—
The^lhistoiy of the founding of this nation is largely the history
quasi-Pennsylvania, Thomas Jefferson; *in-fact Jefferson $nd ithe
City of Phila-'
cjelphia have
' .vy•,
Street,
are memoranda
Mobile Gas Service
Corp., Na¬
tional Fuel Gas Co., Northern
a
lie, and calls for united action to
implement the "Truman
Doctrine." Ridicules Republican
party promises to reduce budget,
debt and.taxes and asserts
have the man in the
>
i
Salle
on
Cabinet Officer points out
similarity of circumstances of the Monroe
y
Doctrine in 1923 and the ^Trutnail
Doctrine^ as expressed in Presi¬
dent Truman's address
asking aid for Greece.
tells
La
7 Also available
By HON. TOM C. CLARK*
tells people of
South
cago 4, 111.
Telephone Randolph 4068
Direct Private Wire to New
York
Bell
System
CG
637
12
THE
(2204)
recession
Residential Construction
single-family homes has
standstill-—not only in the suburbs
Construction of new
tically to
a
where the slackened pace
of new
slowed down prac-
of the large cities
building has in some cases "become
Is Present iPostwar
A
-
a
By A. M. SAKOLSKI
U. S. Foreign
feels he
doubtful legal
high price when, by waiting, he
can get it for much less.
Though materials may possibly
be somewhat more plentiful, they
changes in real estate
placed strategically to note significant
All the data on the subject^-
of
a
smaller size—in vast
servers
talk
loose
be having the ef¬
inducing at least some
may
prospective builders and buyers
to put off their plans for a while,
some
analysts think. After all
they reason, why should one buy
a new house or erect one now at
noticeable but also in scattered and isolated communities of
sections of the country, according to some ob¬
very
'
of
fect
current
the
All
"
Thursday, April 24, 1947
COMMERCIAL & FINANCIAL CHRONICLE
lending after World War I
lavish scale with
was on a
authority, and was for various purposes, political,^
humanitarian, economic and political. Whole structure of indebted¬
"
rather they average only $42 a week in
ness collapsed in the depression of the 30's.
income, can't think of purchasing
are still very high in price, it is
important information still has to
$10,000 homes are, in fact, leaving
In 1921 the Sixty-Seventh Congress was
reported. Until certain formidable
: be obtained from the South West,
predominantly Republi¬
the
market for new homes in
but it is believed from what is
cost and
price obstacles in the can. As is usual in cases of change in the political completion of
droves,
they declare. The 1946
known that the downward trend
path of new construction can be the nation, the
boom in small home construction,
appears that Treasury Department
vin home construction is nation- it is seen all around now, stemmed removed, one analyst argues, it new Congress,
will pay some real estate pro¬ in
officials were aware of the fact
its
first
| wide. ;
^
•'
out of the demand of "hysterical"
that they had no legal authority
moters to develop old properties session, began
The savings banks report a siz¬
buyers able as1 well as just-allto continue the loaning of money,
since it is known that the mater¬ a series of in¬
able dropping off in new mort¬
too-willing to pay whatever price
ials and 'labor which go into one
raised
from
the
people of the!
vestigations
gage financing on all residential was necessary to put a roof over
new
house can renovate 10 old into the acts
United States by the sale of Lib¬
■; real
estate, * both old properties their heads.
trends.
isn't
yet,
known
(and
as
some
projects,, and
and
buildings.
policies
govern¬
:tv
'
The
great post-war shifts in
Discussing the general building of the former
whose business it
population are ebbing, one (Ob¬
cost level, Myron
is to issue authorizations to build server
L. Matthews, Administra¬
comments.^ People
are
To the
( say that from their vantage point rapidly settling down in the par¬ Vice-President of the Dow Serv¬ tion.
they see the demand for new con¬ ticular areas in which they have ice, Inc., states that the reduction Committee of
can be accomplished by the elim¬
struction dwindling practically to
Judiciary of
selected to live, he says. If they
;
a.trickle. In New York State, too, don't have the accomodations they ination of a number of extra con¬ the United
struction cost factors, particularly States Senate,
it is reported, unemployment has
would like to have, at least they
; been
the
increasing among workers have found some sort of shelter spotty receipt of materials on the under
new*
,
erty bonds and by taxation, to for¬
eign Governments for the purpose
ment officials
in
the
'
construction
what extent this
To
trades.
•
drop in employ¬
has not been
seasonal
is
ment
fully determined yet by the com¬
pilers of the statistics, however.
Normally, the peak in building
construction, as reflected by the
employment figures, evidenced in
1940, for instance, comes in- July
but in
1946 -the peak came in
October
and
the
employment
curve has been down ^ver since,
to February,) the last
which
figures 5are
at least up
month
for
available.
a*
,
^
|
Thus, some of the experts on the
status, financial (and ; otherwise,
of residential real estate are in-;
*;
,
to feel, in fact, that the
building industry—at least inso¬
far as it is chiefly- connected with
clined
home! construction—is
new
likely facing
of
-
■;
I
a
very
prolonged period
relative
Inactivity. On Long
Island, one "government1 housing
official has revealed, there ^ are
1,800 homes in all stages of fcohr
siruction, planned speculatively to
sell for $11,500, for which there
are no buyers. This weakness in
demand, for homes', at
current
prices is not confined to; the
metropolitan New York market
either, he says. In one small up¬
state community, for instance, he
pointed out, there are nine homes,
originally built to sell for $9,500,
I which
; $8,400.
can't
The
future
:
dustry,
4
market.
-•<
observers
| sible for builders to
(
4
'
believe
erect new
dwellings at a moderate cost, construction is going to lag seriously,
they say. Veterans who, because
industry ever had was 1942 when
the total amounted to $14,000,000,000.
some
cost
analyst thinks, in the
facts (1) that construction
in the first quarters of 1947
was
twin
Stephenson, Leydecker Add
* (Special to The Financial Chronicle)
;
OAKLAND,
>
1940
and
new
homes
Ley flecker & Co., 1404 Frank¬
lin Street, have added John
E.
Halleck to their staff.
the
during
With Quail
same
(Special
100% higher than
back there in 1940. The
quarter
were
they were
median advertised
homes up
price
of
$7,860.
the difficulty
probably
of
getting pos¬
even
Bapk Building, members
Chicago Stock- Exchange.
is engaging
Smith
With Merrill
1
PALM
Paul
Loans
Mr.
Hunt, the expert of the
Senate Judiciary Committee, then
proceeds to expose what he called
"the more important facts" re¬
these postwar loans as
by the correspondence
between the Treasury Department
garding
not only
be expected,
disclosed
policy in making foreign loans
subsequent to actual hostilities
was attacked, but the authority on
the part of the Treasury to make
such loans, estimated at $l1/2 bil¬
lions, was seriously questioned,
and
the labor which went into them.
is feared
can't
new
some
now
a
tions,
now
follows:
"Approximately
$1,500,000,000
was
loaned
to foreign govern(Continued on page 48)
a
while.
glut
even
may
on
remain
the market
which
homes
New
on
Lynch Firm
the high
BEACH,
FLA.—Joseph
Walker,
Jr.
has
with
Merrill
it
become
Lynch.
will attend the affair, according to
Arrangements Committee, Leslie Barbier, who is
associated with G. A. Saxton & Co., Inc. A brief address of welcome
will
be
given
by
Michael J. Heaney, of Joseph McManus & Co.,
President of the Association.
PITTSBURGH
to
ILL.
CHICAGO,
Caswell
Chronicle)
The Financial
has
Robert
—
C.
CO., 120 South La
Salle Street.
Directors:
E.
Charles N. Fisher, Singer, Deane & Scribner, Wilbur
Johnson, Johnson & Johnson,
and Lawrence E. White, Blair F.
Claybaugh & Co.
With Eastman, Dillon & Co.
(Special to
Chronicle)
The Financial
Folker With Conrad, Bruce
(Special
ILL.—William
G.
Dillon
Co., 135 South La Salle Street.
CHICAGO,
Curry is now with Eastman,
Lincoln
LOS
The
to
Financial Chronicle)
ANGELES, CALIF.—Con¬
rad, Bruce & Co., 530 West Sixth
Street, have added Ambrose D.
Folker to their staff.
Dinkier Hotels
East
Avenue
Co.jCIass A Pfd.
'
Athletic Club 2s, 1955,
Roosevelt
Hotel 5s, 1964
Rodsevelt Hotel Common
Sherneth Corp. 5%s, 1956
Corp. Stock
A. M. Greenfield
WS
Walbridge Operating 3s, 1950
5s, 1954
Westinghouse Bldg. Par. Ctfs.
61
With Herrick,
BIdg. 5Vis, 1963 WS
New York
Stock
Joins Fewel & Co. Staff
LOS
Broadway Corp.
WS
CBI
5
EXbrook 8515
Mr. Torney was for¬
merly with E. F. Hutton & Co.
of
BArclay 7-4880
Crowell, Weedpn
ANGELES,
CALIF.—Wil¬
L.
Sample has joined th(
staff of Crowell, Weedon & Co.
650 South
the
Spring Street, member;
Angeles Stock Ex¬
Los
change.
With Bishop-Wells Co.
(Special
Halifax,
Incorporated
Tel.
become
Stock
Amott,Baker & Co,
150 Broadway
has
with Fewel &
With
LOS
liam
Inc.
CALIF. —J.
Jr.,
Co., 453
South Spring Street, members "of
the Los Angeles Stock Exchange.
ANGELES, CALIF.—Rob¬
ert W. Torney has become asso¬
ciated with Herrick, Waddell &
Co.,
Gannon,
connected
Waddell Co.
LOS
ANGELES,
Pierce
Grant With Brennan Co.
Montgomery St., San Francisco 4
& Co., Inc.
Treasurer:
OFFERINGS WANTED
Gov. Clinton Co., Inc.
ASSOCIATION
TRADERS
Secretary:' Earl E. Sweitzer, E. E. Sweitzer
Kenneth Moir, Chaplin & Co.
associated
become
with Caswell &
SECURITIES
Pittsburgh Securities Traders Association has received the
following slate of officers to be voted on at the election meeting.
President: George S. Lestrange, Moore, Leonard & Lynch.
Vice-President: William G. Simpson, H. M. Byllesby & Co., Inc.
Caswell Adds to Staff
(Special
&
felt.
More than 1,500 persons
The
be willing to
however,
OF NEW YORK
Representatives of investment firms and financial organizations
throughout the United States and Canada will be the guests of
members of the Security Traders Association of New York at its
11th annual dinner to be held on Friday (April 25) at the Waldorf
the chairman of the
Fenner & Beane, Bassett
Building.
,
eventually find
price,
"it
NSTA Notes
Astoria.
choice loca¬
though they can not
be sold, may
to 'Mr. vHunt,
According
Pierce,
It
homes which
sold
be
buyer who will
pay
v
a
Hiltqn Hotels Pfd.
155
foreign governments.
He reported as
SECURITY TRADERS ASSOCIATION
in the securi¬
affiliated
Dinkier Hotels Co. Common
Tele. SF 61 & 62
of Post World War I
Record
The
hostilities
after
of the
ESPERANCE, N. y.—Leroy M.
ayailable, some observers
point out. Many new homes which
have been erected are selling for
Gov. Clinton 2s, 1956 WS
J. S. Strauss & Co.
the request. How¬
this
long
purposes
A report on the results of this
investigation was
prepared by
Don M. Hunt for the Committee.
might
re¬
refusal,
the
Treasury Department continued
making loans to foreign Govern¬
the official foreign-loan
that was turned
affili¬
Leroy Smith in Esperance
session of such materials as have
Markets:
Real Estate Issues
despite
ever,
to the Committee.
over
and
Chronicle)
been
not
been
Dlgby 4-4950
California & New York
refused to grant
correspondence
& Co., Davenport
ated with Quail
high in view of the costs of labor
and materials, in fact, in view of
is
Firm Trading
Committee
quested authority to make these
postwar loans, but the committee
tually made, and the outstanding
features of these loans
as
dis¬
closed by
before the House Ways
Means
and
IOWA.—Frank¬
ties business.
have
Costs
a
1-953
in person
& Co.
Financial
lin Lee Barnard has become
all
for sale in February of
Member* Now York Curb Exchange
Boll Teletype NY
to The
DAVENPORT,
this year,
have been erected
40 EXCHANGE PI., N .Y.
CALIF.—Stephen¬
son,
(2)."that the prices
of
of
for
Mmbirt Now York Stock Exchange
on
80% above the pre-war year
one
seen,
something of
SHASKAN & CO.
the
of
Dec. 12, 1918 and Secretary Carter
Glass on Feb. 15, 1919 appeared
ernments, the loans that were ac¬
As
figure, however, some
feel, because of the inferior qual¬
ity of the materials in them if
not also in the workmanship Pof
SECURITIES
further in¬
Treasury William B. McAdoo
the
the
too high
REAL ESTATE
and stresses the fact
best building year the
the
that
quarters. The nature
problem
confronting
would-be builders and buyers is
very
some
He points out
year.
000,000,000,
he says, too, was $9,203
whereas in April of 1940, the fig¬
ure was $4,408. The cost of put¬
ting up a typical single-family
be sold now for house in
1945, he also points out,
was $5,914 but in the latter half
of the building inof 1946 the figure had jumped to
strongly, lies in the lowprice-home field. Until it is pos-
was
Secretary
ceased.
the revision is not as low as $15,-
of construction
—
and at the
moment the prospect for lower
costs in the building field as in
so
many lines of trade do seem
rather remote, some analysts con¬
tend—building activity will prob¬
ably continue to taper off, it is
of
that
after all
ments for reconstruction and other
construction
'
j Until the cost
drops somewhat
felt in
1 {The Committee
formed
war,
ceased."
building total have been revised
he feels 1947 will still be a big
longer be con¬
important factor in the
this group can no
an
prosecuting the
hostilities had
job, premium prices, low pro¬ •Chairmanship
A. M. Sakolsld
ductivity of labor and the neces¬ of Sen. Knute
sity of using costly substitutes. NelsonofMinThis elimination he sees increas¬
nesota, was assigned the investi¬
ing the current purchasing power gation of United States Foreign
of the 1939 building dollar from Loans during and following the
30 to 40%.
war.
This Committee had a study
Though the early forecasts of made of the laws under which
$22,000,000,000
for
the
year's loans were made to foreign gov¬
adequate for the time for their
needs, he points out. People gen¬
erally are obviously not as des¬
perate as they -were for living
quarters, he feels. People with the
necessary
funds
to
purchase
homes at prices being currently
asked have bought their homes,
another observer comments, and
sidered
of
Donald
New York 7, N.
Teletype
Y.
NY 1-588
ir
Brennan
M.
&
n.
s.,
Grant
Co.
25 George Street.
canada—
is
(n.
with
f. J.
S.)
Ltd.,
VAN
E.
to
Dionne
staff
The
Financial
Chronicle)
BUREN, MAINE—Bernard
has been
added
to
the
.Bishop-Wells Co., 16pl
Devonshire Street, "Boston, Mass,
of
!
Volume 165
Number 4588'
THE COMMERCIAL &
FINANCIAL CHRONICLE
(5205)
13
34i(jhlicjhts of the %rtyxjhst Annual Report
TREND
The
a
witnessed
1946
year
,
Average holdings
®$fy|29% from sales Qfgas;aricF
and sustained
vigorous
derived from sales of elec-
were
Almost 83,000
the balance from minor activities.
growth in almost
of the
every
gain in
operating
gross
Expenditures for enlarging and
improving our facilities were ap¬
nues was
achieved
tions
both
proximately double those of 1945
rates
and, despite shortages of essential
material
and
miles of line
equipment,
any
other
built and
were
applicable
In
year.
to 1946
sharp
barked
war
the
Wages and other operating
increased
but
these
costs
were
and reduced fixed
earnings
during
electric,
IS
*
one
per cent
•
peak,
over
i
stock/
common-
additional
1945.
were
of $2.00 per
continued
share
1945.;
at
the
per annum
.v.-
to
Latest estimates
1,300,000
1,-
813,276 customers, and
steam
service
total
a
to
water
with this
15,677 customers,
This
of 1,891,676 for all de¬
forty-six California
Company
of
Revenues
is
more
of
revenues
the 1940
kept
by the fact
to our customers in
from all branches
income,
61%, and sales of
692,000,
total of
\\{ mately
4.8%l
or
to
a
record
Ownership
Stockholders numbered
at
70% of our gross revenues
•
^
ff
•"
than
at
/'la.
■
Average. Cost per, Kilowatt-Hour
<Year 1935
nature
employment
profit
of
are to
our
at
continue,
■>rvy:iq
125
the expense of another.
100
m
75
balancing
am
of the interests of all
essary.
groups
is nec¬
■M
50
In keeping with this be¬
lief, it is the Company's policy to
charge the lowest possible
consistent with
rates
good service
to
public, fair remuneration
m,
25
H
S3*
to
to
those
a
reasonable
who
■
one
economy must not
A fair and harmonious
the
vll.
100%)
=
150%
tit:
11 umnn
11 ii ii hi
ii ii ii in
lAioNoopo-rtfotiflU)
0\
Ui
ft
(ji
ffi
ffi
fli
01
re¬
ML
supply the
* >
'ti
* • *:
capital used in the business.
NOTE: In 1946 the
138,919
tomers
used
an
Company's residential
cus¬
of 1495 kilowatt-hours
of 2.67 cents per
kilowatt-hour. The average
monthly bill was
of
the close of 1945.
electricity
$3.33.
average
at an average cost
'
"
-
ax
•
••.
a,
i
:
v
1
1 i\
fjl
I
■i!
245
MARKET
J copy
of
our 1946
'
.
STREET
•
SAN
FRANCISCO
J!::,;ual Report to Stockholders may he obtained
;
i
' v-}
I
>
■
•
on
lit
have shown
the close of the
year, or 5,277
more
t
"
ety.If high levels of production and
turn
Stock
$168,281,000. Approxi¬
mm*
ai
highly industrialized soci-
employees, and
86%.
increased $7,-
,
m
'iff
Bill
■
m
period. Substan¬
pace
operations, including miscel¬
laneous
H.
than
evidenced
electricity
gas
CO
Qenera I
gain of
expanding population.
1946 increased
Gross
over
'/
;1
>•
;
25
tn
other service facilities^
popu¬
that, compared with 1940, sales
partments.
the Com-4
VJ.'
tial additions will also be made
to
of our
place the
40%
or
business has
and
to
'.i
•t
million
clearly the interdependent
figures. The Company's
census
062,723 customers, gas service to
'l
.
7;
one
Events of recent years
operates at 4,600,000, a
electric
being supplied
*7**
50
_:|
pacity, will bb added
sector
was
ur-i'F.
75
horsepower of capacity, or more
than 40% of
present installed ca-
paid during the
ion
lation of the
Customers
service
100
pany's electric generating plants
counties in which the
At the close of the
year,
jt'X-
expenditures for im¬
in this five
year
,
of 143,627,000,000 cubic feet, X*
gain of 6%
'
■
past ten years..
a new
125
1951 inclusive,
to
$2.16 per share in
which has been
established in 1944.
reached
from 1947
$2.72 per share Compared
Dividends
rate
within one-half of
of the wartime peak
Sales of gas
outstanding
with
exceeding those of the preceding
were
of
were
totaled 7,521,-
000,000 kilowatt-hours, slightly
and
'was
this program in 1946,
$300,000,000.
Earnings for the 6,261,274 shares
.
j"
$44,000,000
«
f
...
150
proving, and enlarging the Company's facilities will exceed
materially lower than
,
•
now pro¬
.
.Sales
year,
years
for .domestic and
war.
100%)
175
v
record pace.
than
-Approximately
war years.
Sales of electricity
are
before the
charges.
"
";v.
com¬
service; both gas and
higher than
were
of the
any
rates.,
commercial
lower Federal income
revenues,
taxes
pany's.
gross
=
200%
and it is estimated that in the five
1
.
vigor and is
at a
spent on
modities and services, the Com-
by larger
than offset
more
Net
increased
(Year 1935
pressed forward with
was
utmost
More
increased
contrast to
prices of almost all other
ex¬
substantially,
Average AnnualUseJCilowattCHours
following the end of the
ceeding
was
operations.
•
penses
t
which the Company em¬
gram on
gas
$7,000,000 annually,
of which about $5,200,000
more
connected than in
new customers
and
placed in effect early in the
almost
ers
more
despite reduc¬
electric
1935-1946
The extensive construction
pro¬
year estimated to save our custom¬
in
ELECTRIC SERVICE
it V7-"
Construction Program
reve¬
RESIDENTIAL
or
in California.
Rates
The
87 shares,.
about three-fifths of the
total, live
phase
Company's activities.
were
shareholders,
OF
6,
CALIFORNIA
application to £. J. Beckett, 'Treasurer
.
CfNf£R
OF THE WEST
14
;.t
4 ■-^y*T «& ,* * ki'I/:v,:."' $
>• & <-) .
THE COMMERCIAL & FINANCIAL CHRONICLE
(2206)'
A. K. Atkinson Pres.
Postwar
Of Wabash Railroad
At
a
meeting
expected that the new Denver & Rio Grande Western securi¬
ties will be issued and regular trading started some time within the
It is
to
the
nmmmmma
Recent market action of the income bonds and
classes of stock in particular, and the first mortgage bonds
lesser extent, has
a
general pattern set in the
the courts. Consistent pressure
,
period immediately preceding and
immediately following issuance of
securities and settlement of whenissued contracts.
>&£-.;■, J
A considerable amount of spec¬
takes place in the
when-issued securities during the
time when the reorganization plan
is being contested
through the
various courts.
To a significant
extent such
buying is done by
,
not prepared to, or
of, actually taking up
securities and paying for
speculators
not desirous
new
made.
is
delivery
when
them
Thus, with few, if any, exceptions
price action of the junior securi¬
ties has been notably poorer than
general market.
Many rail
analysts are of the opinion that
this period of necessitous liquida¬
tion affords an exceptionally ad¬
the
opportunity
vantageous
into the
the
week
last
Late
to
buy
properties.
new
&
Denver
Rio Grande Western Income 4V2S
As there are
interest
paid at the time of
delivery of the bonds this repre¬
sents a "net" cost of just frac¬
tionally above 40 for the new
bonds. Analysts who have studied
dropped below 50.
accruals
two
of
years
which will be
the Rio Grande situation consider
that
under
even
tions of
condi¬
present
abject pessimism such an
evaluation of the road's potential¬
ities
short
little
is
It is expected
have
no
income
but
ridiculous.
that the road should
difficulty in covering this
interest
bond
the
of
most
conditions.
severe
On that
all
under
depression
basis
in-
an
quested
action
generally apparently does not yet
recognize the complete
change
that has taken place in the char¬
he
of
acter
For
Rio
&
Denver
Western.
tion bridges has been
sharply.re¬
duced, the road has more central¬
ized traffic control in proportion
to main line mileage than any
other Class I carrier, and major
was
in this respect.
Dur¬
ing the reorganization proceedings
the Interstate Commerce Commis¬
sion
commented
traffic
the
the fact
on
potentialities
that
the
of
Dotsero
Cut-off, completed in the
early 1930s, had never been fully
Now they can be.
development
character
of
altering
Denver
Rio
&
of
es¬
major steel in¬
a
Wire
time to
plants for
at
come
Grande
to
plant.
considerable
a
least.
Western
Also
Union
Chicago,
111.
only
Denver &
will
it
will
handle
share
With
general traffic
level
St. Louis, Mo.
this
add
Birmingham, Ala.
with
Pacific, but generally for
short haul, in the outbound
a
movement of the finished
Los Angeles, Cal.
at
product.
the 1941
development could
one
much
as
gross.
as
12% to the road's
(Special
LOS
to
The
Chronicle)
Financial
ANGELES,, CALIF.—Wil¬
C. Perry III has become af¬
filiated with Bogardus, Frost &
"
MEMBERS
Stock
Exchange and other
leading Security and Commodity Exchs.
120
Assistant Comptroller
Railroad Administra¬
served ,as
Broadway, New York 5, N.Y,
Banning, 618 South Spring Street,
members
of
Los Angeles
.repair two
one
particular form of transporta¬
tion for the movement of goods
a
the
New
York
and
Stock Exchanges.
So. LaSalle St., Chicago 4, 111.
G. Brashears Adds to Staff
(Special
to
LOS
Guaranteed Stocks
obtaining
more
?•'.
'<
arid
personnel.
Problem
#
seph
The
Financial
ANGELES,
M.
Smyth
Chronicle)
of
-
t
equipment
also
finds,
being
the survey
situation is
increase
being much more acute today than in the production of trucks and
during the war, and state that the parts. Because of the freight-car
immediate need in the industry is situation, however, an added load
for more and better equipment, has been placed on the trucking
particularly
for
the
railroads. companies. This high level of de¬
Some executives cited instances mand, according to one executive,
(Continued on page 20)
where plant operations had to be
this
although
Many, executives characterize
the/. transportation
situation
as
prior thereto, having
positions in the office
of
the General
Auditor of the
Denver & Rio Grande Railroad;
While with the Railroad Admin¬
tion
relieved somewhat by an
V":
and,
held various
took a prom¬
part in the final settlement
of accounts with the rail carriers
Capital!Expenditures;by Class I Railroads ,
Highest Since 1931, With Exception of 1945
istration, Atkinson
railway property made by Class I
whose
000,
for public use
With
th£
receivers,
appointed by the
Association
the
the
980,000, capital expenditures in
1946 were greater than in any year
further added:
t
.
The Association's announcement
expenditures
Total
authorized*
1946 were considerably
in ex-
Atkin¬ oess of this figure, but inability to
son took a leading part in formu¬
secure adequate supplies of mate¬
lating and carrying to a successful rials somewhat limited the actual
conclusion the Plan of Reorganiza¬ expenditure made.
For example,
tion of Wabash Railway Co., which the total amount of capital expen¬
was
consummated Jan.
1, 1942. ditures authorized for locomotives,
Since 1942, while serving as Vice- freight cars, passenger cars and
President-Finance and Accounting other equipment, including carry¬
the funded debt of the Wabash over from 1945, was $770,911,000.
has been reduced approximately Of that amount, $319,017,000 actu¬
ally was expended in 1946, com¬
appointed pared with $314,779,000 in 1945.
Secretary and Treasurer, in charge Carry-over
of unexpended au¬
Of the New York office, with head¬ thorizations
for
equipment re¬
quarters at 44 Wall Street, New maining on Jan. 1, 1947, totaled
York City.
$451,894,000, the greatest amount
Mr.
Steele
was
born Oct. 6, of carry-over for any correspond¬
1895, in Creston, Iowa, and began ing period in the past 23 years,
his railroad career in May, 1915, or since the compilation of these
when he entered the service of records began in 1923.
Of this
$166,746,000
was
for
Chicago, Burlington & Quincy amount,
freight cars and $168,948,000 was
for
passenger-train cars.
Both
intendent's office at Creston.
Entering the Army in Septem¬
ber, 1917, he served with the 333rd
added
overseas
Gun
a
Batallion
and
was
Railroads recently announced.
totaled $562,-
American
of
exception of 1945, when such expenditures
since 1930.
for
railroads in 1946 totaled $561,957,-
Federal Court at St. Louis.
the
other improvements to
Capital expenditures for equipment and
inent
CALIF.—Jo¬
been
..
harass truckers,
of the U. S.
Machine
has
\
.
Truckers
.
Shortages
The., Immediate
three times under
or
figures are new high records.
locomotives, the carry-over
For
was
amounted to $15,256,-
ment in 1946
1945.
For
structures,
and
roadway
Class I railroads made capital ex¬
penditures of $242,940,000 in 1946,
compared with $248,201,000 in the
preceding year.
Capital expenditures made an¬
freight-train
year.
to the staff of G. Brashears &
capital
made in
cars,
Co.,
actually
After the war, Steele was asso¬ expenditures
amounted
to
$159,282,000,
Spring Street, members ciated with the U. S. Railroad Ad¬ 1946
of
the Los
Angeles Stock Ex¬ ministration, the Denver & • Rio compared
with $138,114,000 in
change.
.
Grande Railroad, the Denever & 1945.
For
passenger-train cars, the
Rio Grande Western Railroad Co.,
and from April, 1926, to June, 1930; amount of capital expenditures in
the
nually by Class I railroads in
past 17 years follow:
$561,957,000
562,980,000
560,112,000
454,282,000
534,897,000
543,021,000
* 429,147,000
262,029,000
226,937,000
509,793,000
1946
1945
1944
1943
1942
1941
1940
1939
1938
1937
1936
•_
298.991,006
188,302,000
212,712,000
103,947,000
1935
1934
1933
1932
167^194,000
1931
361,912,000''
1930
872,608,000^
$106,536,000.
For
in
000, compared with $17,888,000
510 South
Bonds
Special Securities
,
With Walston, Hoffman
(Special
.
With
Quincy Cass Assoc.
(Special
to
LOS
The
Financial
GUARANTEED RAILROAD STOCKS-BONDS
ANGELES,
New York 4, N. Y.
Telephone BOwling Green 9-6400
was
road Co.,
came
ciates,
;
523
Exchange.
:■
*'
Quincy Cass Asso¬
West
,
••
Sixth
Street,
Angeles Stock
:
I
Financial
Co
Chronicle)
FRANCISCO/ CALIF.—
.
following which hie'be-r
Assistant Secretary and As¬
sistant Treasurer of Wabash Rail¬
road Co.
urer
and
He has served as Treas¬
Assistant
the company
,
v
SAN
The
Statistician
and
Chief 4946. was greater than in any year Frank J. Perry has become asso-,
totaling $47,169,000,
Clerk
to the •. Chairman - of -.. the since / 1927,
ciated with Walston, Hoffman &
CALIF.— board of the Missouri Pacific Rail-, compared > with $127,934,000 in
he
to the staff of
members of the Los
Teletype NY 1-1063
;
to
Chronicle)
Charles W. Burger has been added
itS Broad Street
.
movement.
'
Railrad Co. in the Division Super¬
231
for
freight cars was fre¬
quently stressed. One executive
observes*: that "freight cars are
W. Donald Steele was
liam
York
Situation
Freight. Car
need
for
steel
airlines for the move¬
30%.
v
;
Perry With Bogardus, Frost
New
President, was born in Denver 55
years ago and entered the service
of the Wabash in 1922 after having
operation
Facilities
on
The
in
the
and
The
growing
a
cd^side^atiohs in: the; selection of
Railway
properties had been taken
during World War I.
He advanced through various posi¬
purchased
by
a
subsidiary of
United States Steel,
West Coast tions with the Wabash to Vicedemand for steel is expected to President, Secretary and Treasurer
and in 1931 became Treasurer for
assure
a
high rate of
effort have been
war
all of the coal used in the Geneva
Private
reliance
and
Mr.
sideration
Rio
Direct
operating prac¬
adoption of more
efficient and progressive methods
on the part of the carriers.
tices,
They are: increas¬
industries;
some
appointed Receiver of Wabash
Co. and served in that
lower costs. As a second consider¬ capacity until January, 1942, when
ation the improved physical con¬ he became President of the suc¬
dition of the lines and equipment cessor company, Wabash Railroad
allow the company to compete for Co.
During his period of service
transcontinental freight which for¬ the
physical properties of the
merly it was in no position to company have been improved and
handle.
financial
position
greatly
Complete rehabilitation its
of the connecting Western Pacific strengthened.
has also been an important con¬
Mr. Atkinson, the newly elected
for these
Commission Orders,
t ing
Vice-President - Finance and
Accounting and Secretary of the
company, was elected President.
ciency of the plant and speed up
operations which in turn result in
ment for the
We Solicit
tation pattern.
during
others stress the need for
improvement
ing use of motor carriers for short
hauls;
the virtual cessation of
domestic water transportation by
son,
dustry at Geneva, Utah. The fa¬
cilities constructed by the govern¬
I
/
records
conditions
.
tablishment
'
the war,
are
outstanding
difficult
under
features of the postwar transpor¬
Ar¬
thur K. Atkin¬
m e e
established
permanent
become
to
beyond
their control and that they have
changes, however, are considered
likely
carriers
badly disrupted by
were
war, but most of these shifts
regarded as temporary. Some
the
are
of the problems con¬
many
fronting the
,
Grande Western has been the
STOCK EXCHANGE
cedures
be
,
that
transportation pro¬
Established
At the same
K. Atkinson
some
ment of repair parts and small
Pitcairn, 65 years old, grad¬ shipments. Wartime experiences
uate of Princeton University, class liave also recited in some modifi¬ being retired at a rate of 3,000 per
projects for reducing grades and of
1903, began his railroad career cations of packaging and methods month and the, railroa^rcan^ get
curvature
have
been
accom¬
46 years ago with the Pennsylva¬ of in-plant handling of materials. few new ones because of steel
plished.. The trustees have also nia Railroad Co. as a rodman, ad¬
'. While changes have occurred in shortages. They have 80,000 new
spent heavily on equipment, in¬ vanced through various positions relative; costs of the various
types ones on order and they claim, it
cluding the purchase of a con¬ to become General Superintendent, of
transportation services, execu¬ will be necessary to build 125,00$
siderable amount of diesel power.
Eastern Ohio Division, in 1928 and tives report that other factors such during the.; coming year in oride^
The property improvements are became President of the Detroit; as
bringv j conditions
back^'tp
availability of facilities, speed to.
important from two angles. For Toledo & Ironton Railroad in Jan¬ of shipment, reliability of service •normal. Many cars now in serv-;
one thing
they improve the effi¬ uary, 1931. In October, 1933, he and efficiency often outweigh cost ice are stopped in transit for shop
the
CHICAGO
might
be
will
portation."
that
property.
A.
and combina¬
number of wooden
re¬
this
so
responsi¬
bility for ope r a t i n g the
Grande
^
proportion of
will continue to carry about "the same
the nation's freight in
there
relieved of di¬
one
to equipment shortages.
cause
of
rect-
thing the prop¬
erty has been virtually rebuilt
during the period of trusteeship.
Heavy rail has been installed, the
Another
As members of the
rman
Pitcairn
realized.
|
i
pointed out in many quar¬
community
It is
Ascribes chief
the postwar period as before the war, although
shifts in the<e>
—
—*
types of freight they carry, in the curtailed because of a shortage of
the
board
of
opinion of leading business ex¬ freight cars. Heavier loading of
d i r e c t o rs, a ecutives
necessary
under wartime
surveyed by the National cars,
newly created Industrial Conference Board on regulations, is being continued.'
While some executives believe
position. M r. the "Postwar Model of Trans¬
a
outstandingly attractive.
seems
war.
Railroads
appointed
ters that the financial
ulative buying
the
11%
better than
of
return
come
during
Says better coordination all transportation facilities needed.
company,
was
C h
been typical of the
past as other railroads emerged from
lias
been characteristic in the^
than
cairn, who has been President of
next week to 10 days.
the two
of
Railroad Co.
17th, Norman B. Pit-
April
Transportation
National Industrial Conference Board reports situation more acute
the board
of
directors of Wabash
held
Thursday, April 24, 1947,
Secretary
since Oct. 1,1945.'
of
,
Goodwin.
1945.
"For
.
locomotives,
capital
ex¬
penditures t o t a l e d $97,310,000,
compared
with $127,934,000 -in
1945.-
,
Expenditures for other equip-
265 Montgomery
members
of
San
the
Francisco
New
Stock
Street,
York
Mir. Perry was formerly with
California
and
Exchanges.
Co. in: Santa:
%.:■*
K
.
First
Barbara*
~
I "V oltnne* 165 7A Number''45 88
THE COMMERCIAL
of
shares
the
issue
for
ultimate
distribution by the underwriters.
placed in registration
j,
Plans
for the
orters
week,
of
a
of
Report
reported underlay
offering some time this
were
as a
block of
of
represents
%
a
A A,
the
labor
outlook
giving
signs of clearing now that* the
threat of a steel strike has
been
averted and both labor and
in¬
dustry show
the
upon
disposition to
a
U,
new
contract
as
a
S.
look
it
total
will
-
be
of-
ing around 47 in the open market,
giving the forthcoming block of
stock
around
an
aggregate
value
of
Proceeds
(Special to The Financial Chronicle)
But for the moment the
haze
LOUIS, MO.—Blewer, Heit¬ Inc. announce the opening of an
& Glynn, 320 North Fourth
office
in
the
Candler
Building
Street, members of the St. Louis under the management of D. Finby the Stock Exchange, have added lay
McRab.^'ivV:,::;^;i
.->■
postwar George E. Sory to their staff.
will
be
used
to finance the vast
plans which the
com¬
pany has set for itself.
uncertainty
seemingly
not drifted away
has
sufficiently to
encourage investors to resume
the comparatively free and
par
,
E.
value preferred
Laurence
Bradley Now
on
I
LOS
Bradley
has
I.?du Pont
de' Nemours' &
Co.
Mr.
H.
Bradley
become
R.
Baker
Wulff &
&
has
of
been
added
to
(Special to The Financial Chronicle)
belle
the
has
become
and
affiliated
Stock Exchange,
Street.
v
ago.
of
basic
few
a
Meanwhile,
With Leo SchoehbruiL
With William Walters Co.
(Special to The Financial Chronicle)
I
LOS
nard
(Special to The Financial Chronicle)
ANGELES, CALIF.—Ber¬
J.
Johnson
is
with
LOS
Leo
ANGELES, CALIF.—Wil¬
Securities Co., 3923
Co;, Inc.
liam
Walters
Schoenbrun,,1373'Westwood Bou¬
Franklin
West
Sixth
Leonard
R.
Street,. have
picture
money
It's here-a
the
has
not
changed materially the buyer of
securities
is
convenience
new
on
evidently disposed
to give more weight to the
mat-'
ter of projected yields.
At any rate,
according to re¬
ports in the trade the two
utility
issues brought out this week
are
proving a bit on the laggard side
when it comes to
moving into in¬
vestors' hands.
'
Both
offerings, sold
petitive
plenty
bidding,
of
in
com¬
brought
competition
out
and
by
and
large
were
not too far apart, indicat¬
ing
that
were
competing
tenders
investment
thinking
along the
much
lines.
same
Nevertheless
that there was
bankers
pretty
indications
-
are
rush of
no
buyers
at prices fixed for
reoffering al¬
though
the
picture
admittedly
could
change considerably with
NO TIPPING'INiC&O DINERS
sustained turn in the under¬
any
lying markets.
*
THE
SERVICE IS COURTEOUS AND FREE
-
NO TIPPING THE PORTERS IN C&O
COACHES-THEIR SERVICES ARE
,
FREE"1
V Naturally the
current setting
Wiarketwise, with auto and steel
unions
j
having taken
mant
stand
until
this
week,
most suitable
-The
issues.
new
$10,000,000
-
debentures,
through
by Northern
new
serially from
brought out
1967,
the
Two New Issues
*
due
not
was
backdrop for pub¬
lic offering of
;
ada¬
an
their demands
on
1957
States Natural Gas Co. attracted a
total of four bids with the
highest
tender fixing a price of 100.2005
for a 2V2% coupon.
*.
Next highest bid was
followed by a third of
and
fourth
a
the
was
2.05
99.03,
99.639
99.559
all
for
interest rate. Reoffer¬
same
ing
of
at prices to yield from
to
2.625%,
according
to
maturity.
The second issue,
first
mortgage
Northern
$19,000,000 of
2%%
States
bonds
Power
of
Co.
of
"Wisconsin, brought out bids from
five
banking groups, with the
winning tender fixing a price of
100.6311.
The
100.532
less than
or
lowest
bid
the
cents
■'
••••<-
<•(
c,
still
v,
4.
touchy
2.565%, and
response
that
on
the
recent
offering
896,404 shares additional
stock
to
holders
of
who had
This
the change tray when you eat
on
C&O diner. It
means
you
won't
have to dig down for change for the
who
porters
serve
the coaches
on
to
move
nuisance is the
last, -of
many
travel offered
rail
your
The
ticket
personal
have
of
common
We cannot extend the
redcaps in these stations
our
on
its railroad
rule
to
the first step
tip—ahd is taking
toward abolishing this
From
now
on,
you
and
underwritten
ing reported that
expired
any
by the
pay
roll. Nor
apply
on
can
are
not on
^Naturally, this does
not
apply to Pullman
the no-tipping
Pullmans, since the
porters are employed by the Pullman
Company—not by
vl
us.
porters, or to redcaps
in union
of the services
But wherever C&O employees are
on
hand to
serve
you,
you'll find
outstretched palms—for
they perform.
This
means
you
we'll
since they are not
com¬
C&0
employees.
won't have to leave
attending to
your
needs.
than 95%
of the stock, offered at
axprfce of
a
share,
had
beei\fsub¬
scribed for.
CHESAPEAKE & OHIO RAILWAY
r
.
:
This
>
left
only
about
44,800
terminals,
no
offer¬
more
$57.50
tipping
improvements in rail
bankers
the
the
are
urgently requested not to tip C&O
employees for
no-tipping
rule to union terminals shared
C&O with other railroads, since the
Chesapeake & Ohio does not
believe the .travelers
nuisance.
American
"rights"
week
end
latest, but not the
by the C&O.
pensate these employees directly for
Subscription
this
you
service—without extra charge?
as
Toba6eo Co.
earlier
when
tip
on a
C&O crack trains.
shouldn't
Tobacco
still popular with investors
witness
B
score.
Equities in leading corporations
are
of the ordi¬
need
entitle you to courteous
should
American
many
sug¬
t
,
so
you
a
per
gested that institutional buyers
are
services
Why
was
evident slow
to shell out for
nary
travel?
10
Priced at 101 *4 for reoffering,
the yield here
customer of
was
$.100 under the top.
;
WHY shouldthe railroads—have
you—the paying
-
TERMINAL
TOWER, CLEVELAND I, OHIO
added
Reiss to their staff.
months
though
v;
as¬
easy
buying habits
„
with
Smith, Hague & Co., Penobscot
Building, members of the Detroit
Merrill
levard.
Co.
.
DETROIT, MICH.—Camille Ga¬
CALIF.—Tom
Lynch, Pierce,
Fenner & Beane, 523 West Sixth
previously with
was
Plank
staff
ANGELES, CALIF.—Laur¬
D.
LOS ANGELES,
M.
Staff of Lester & Co.
ence
stock, which
•'./
(Special to The Financial Chronicle)
A week from
no
Gabelle Joins Smith, Hague
With Merrill Lynch Staff
(Special to The Financial Chronicle)
the projected million shares of
j
Co.,
ner
today is the date sociated with Lester & Co., 621
readily be that conditions marketwise, that is for seasoned securi¬ tentatively set for the public of¬ South
Spring Street, members of
ties, will improve measurably.
fering by bankers of the bulk of trie Los Angeles Stock
Exchange.
of
ATLANTA, GA.—Blair &
.
44-
$2,700,000.
Du Pont Preferred
could
Blair & Co. Open New
Branch Office in Atlanta
ST.
considered that the stock is sell¬
Steel-CIO
model,
the
public subscription
the balance to be sold to
expansion
substantial
secondary undertaking when .it is
With
>
Colgate-* issuer
*
of
for
Blewer,
"IJf
the company's pension fund.
^
about 60,000 shares
Palmolive-Pete Co.
This
[with
secondary distribution,
common, "stock
shares
i fered
With
(2207)"
Heitner & Glynn
i'Between 700,000 and 750,000
Sizable Secondary
v
fortnight
a
ago
^
.
:
;
FINANCIAL CHRONICLE
&
>
Thursday,
FINANCIAL CHRONICLE
THE COMMERCIAL &
April 24,
1947
Wm. R. Edwards
Atwill
with
Road.
a
trader
and
gan
|/SECURiriHV
A PROSPECTUS ON REQUEST
from your investment
dealer or
Distributors Group, Incorporated
63 Wall Street, New
York 5, N. Y.
Prospectus upon request
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\
Volume
Number
165
4588
THE COMMERCIAL & FINANCIAL
CHRONICLE
(2209)
Government Economists Now More Reports Sharp Decline
Commerce
-
Hopeful About Price Balance f
•
mally high rate of $33 billion in 1945 to about $19 billion in 1946.
Sees likelihood of further decline in current
year.
-
following the price situation from the vantage point
capital may be de-^
scribed
as
moderately £ hopeful' evident a widespread acceptance
over the outlook
although they of the importance of: price adjust¬
have their fingers crossed.
Some manufacturers, too,
The ment.
course
of prices during the rest who are in close touch with* the
of the year cannot be predicted public, are likewise aware of this
with confidence, for there are too need. This is a
good-sign. ^
^
many uncertainties. Yet there are
some hopeful indications.
;y' Steel Prices a Crucial Testf. =
A.
thing,, the index;,of
commodity prices has
evidencing a tendency to
But some of the basic industries
are
in
for
reducing
less
a
situation
favorable
to digest the added costs.
Since
profits generally have been large,
official Washington thinks that in
most
there need
cases
not
result
during
rate of $33 billion in
1945 to about $19 billion in
1946,
the Department of Commerce re¬
ported
a
review of
savings " trends prepared
Office
of
which
will
issue of
Business
Economics
the April
in
appear
by the
"Survey of Current
Busi¬
ness," $ official
Department
Commerce publication.
of
Uncertainties
There
tions,
of
ahead,
strike to
this be
For
course.
is business
go
important
are some
ques¬
example,
going to be allowed to
will there be
or
coal
a
"gum up" things?
weeks late.
late spring—three
a
Will
in the summer?
have drought
we
Will the frosts be
Who can foretell?
early or late?
with wages at the new level,
in the eyes of the Administration.
To
has
illustrate, in building there
been
considerable
postpone-
mentjowing to the high prices, but
if prices come
construction
duce
or
down so as to re¬
costs
15%
by
such orders will be re¬
more,
cannot add
pated
now.
•
A favorable factor is that in the
the^e
trades
distributive
is
now
is
that
Administration
loss
hortation
be antici¬
may
that
ex¬
businessmen lower
prices.
tended
thepast j
quarter
1947
In 1946 many of
discontinued their
purchases and liquidated
these
groups
bond
of their
some
half
than
in
by
purchases
in wide
was
the
sharp rise in home prices in the last few years has been
accompanied by a substantial increase in mortgage debt, both indi¬
vidually and on an overall basis, according to the Institute of Life
Insurance. This gain was particularly pronounced last year.
Figures
compiled by the Federal Home Loan Bank System show that the
average size of all new mortgages of $20,000 and under recorded on
nonfarm homes rose 55%
from<§>——
1939
through 1946, with nearly
Figures compiled by the Farm
half this percentage gain occur¬
Credit Administration show that
ring in 1946 alone.
This
uptrend in average mort¬
debt is one of the factors
explaining the growing concern
gage
in
out
and
of
Government
over
the question of how many of the
families which have been buying
at inflated
homes
going
their
into
own
prices may be
debt too deeply
well-being.
for
proportionate
greater
a
rise
curred in the farm mortgage
than
on
urban
homes
oc¬
in 1939
available),.the
aver¬
age
Federal Home Loan Bank
tem
was
1939
Since
Debt Pattern
Sys¬
figures show that the aver¬
size of all new mortgages ot
age
recorded
under
and
$20,000
on
$2,722 in 1939.
For 1946 this average was $4,206,
iiorrfarm homes
•
V:H
fc-'M'-i
increase of $1,484 or
55%. Last
year alone the average of " such
new mortgages recorded showed a
gain of $766 over the year before
an
A.
was
compared with a gain of $718 for
the six preceding years
gether.
III
of
total
The
taken to¬
such
new
mortgages recorded last year was
$10.4 billions, the largest annual
total
record and nearly double
on
••
the
Mti
1945
figure. A large number
of high percentage
GI loans made
during the year was a factor.
breakdown
A
shows
groups
dividual
age
gain
lenders.
greatest
the
occurred
From
aver¬
an
mortgage of $1,851 given by
this group
to
that
lending
in
mortgages granted by in¬
percentage
home
by
an
in 1939 the figure rose
average
of $3,245 in 1946, a
gain of $1,394 or 75%'.' "
'
1
of recorded farm mortgages
$3,560,
or
63%
the
increase of $1,370
an
in
six
years.
Here,
too,
biggest increase among lend¬
ing
billion
and
1939-45
a
99% rise for the
period.
.
'
:
v
f
The trend
of all
of the average size
home and farm mort¬
new
gages
recorded; for^ all; lendi»s
since 1939 is given in the follow¬
ing table:
iv
Nonfarm (a)
One
continued
-■
1939
$2,722
1940
,
expansion
1941
v
2,290
2,906
2,480
2,918
2,690
1943
3,031
3,030
1944
1942
'
3,187
3,220
1945
3,440
3,560
1940
4,206.
<b)
(a) Mortgages
under*
of
$20,000
and
1946
(b) Not available.
Sources:
Bank
in
was
Federal
Home
Loan
System, Farm Credit Ad¬
ministration.
•
,
1 h.'
at
the
COMPANY
than
consumer
rise
credit
of
amount
savings
in
entirely to
under
proximated
counts
which
when
tax
a
the
two
were
the
previous
1941.
components
ratio
to
total
ago.,.
of
of
freight,
with
short
£
£
etc
All other—interest
6,393,098
.
Net
£.
D
■%.
D
,
$58,786,292
: '
t;
was a
shift in
United
States
tions, suggesting that low income
groups are now much less im¬
portant in the market for savings
the
the
war,
Department of Commerce said.
Redemptions of series E bonds
.v* ••• _: jr.'-,-;
•*
,"t •> ./■
D
$21,449,257 '
D
20,412,784
D
3.385,823 *
$15,247,864
X D
D
$45,445,820
XX
$
D
$11,340,472
X;.
4,560,929
and
costs
it
more
is
estimated
than
The increase
~£-I,/:.££*;<•..
legislation, known
Congress, payroll taxes
1947,
'
jy
..
result of
a
197,950 f
...or.
the
as
(-■•■if-,.••••••*
"Crosser
Bill,"
enacted by the
considerably increased, effective January 1,
are
that
this
increase
$4,000,000 annually.
will
add
'
to
the
Company's
*
.
»
.
in costs of the Company by reason of
higher wages, added
payroll taxes and higher advanced prices of fuel and material,
compared
with January 1, 1946, is estimated at
$44,000,000 annually. To partially
offset the additional costs, the railroads in
April, 1946, made application
the
to
Interstate
averaging about
freight
Commerce
Commission
19%, to be effective
given
was
and
rates
to
other
under suspension
been
restore,
for
charges
Commission
the
effective
January
a
1,
notice
This
July
and
was
1,
in
March
2,
advance, of
granted, but X
the
emergency
1942; which
had
1947,
increase
estimated
in
to
add
freight
rates
about
and
17.7%
to
freight revenues of the Company In 1947.
Over the last
3.62%.
only
15 years,
In
1946,
the rate of return of the Company has averaged
even
included, the rate of return
with
was
the tax
carry-back
credit
of
$20,148,000:
only 2.85%; excluding the tax carry-back
credit, the figure would be less than
1%.
Money invested in other public
utilities and general lines of business has been earning about 2%
much
permit
will
as-that
them
sustain
invested
to
earn
a
railroad
in
railroads.
return
credit
of
and
not
Railroads
need
rates
less
6%.
Such
attract
than
the
investments
of
times
which
fair
as
will
return
the public
provide better service all in the best interests of patrons, employees and
investors
outstand¬
By the first quarter of 1947
been
offset
by
heavy purchases, but this increase
largely reflected the renewal of
bond
had
purchasing by
exhausted
their
during the preceding
persons
who
legal
limit
year.
Many
in
<
•
only 7%. Following further hearings,
outstripped purchases in 1946, re¬
sulting in a net decline of $500
the amount
m
freight rates
in
not
1946,
4
1944, with certain modest- additions. 4
permanent
1,
short
authorized
since July
authorized
on
increase
an
effective
This interim increase approximated
charges,
railroad
The
tinued
securities
which
alike.
loyalty
are
and
and
officers
Directors
assistance
and
necessary
to
modernize
facilities
and
'*
/
President
agencies,
■;
:
27,343,972
million
had
j
-
$306,816,885
•
the
decline
X
397,790
D
debt, rents, etc
on
1
Government series E bonds from
ing.
I
•
As
-
in
\
$56,388,502
338,529
earnings
79th
building.
repayment of
during
v
,
4,599,152
Cr
Total
credit,
term
mortgage
debt
was
somewhat
larger than the amount of new
than
D
$275,212,290
I
-
permission
bonds
A
$279,472,913
prewar
residential
of
:
with 1945
V.-;.-
revival
purchase
&
I'
taxes
;
V
$311,377,814
-
hearing and final disposition of the petition.
•
profits
Compared
$304,984,716
etc.
debt—amounting to $2.9 bil¬
lion—associated with the postwar
debt.
due T
dividends,
Equipment and Joint Facility Rents
the
.
war
v-
.X
in
passen¬
etc
sources—interest,
Payrolls, fuel, material,
Taxes
'
year,
marked rise in mort¬
During; the'
Taxes
"
were:
1946
EXPENSES:
ex¬
gage
of.
facilities
.
earnings for 1946
credit, however,
/
excess
Year
Total
short-
In addition to the spurt in shortterm consumer debt last
was a
other
rents,
ap¬
representing two-fifths of the total
at the end; of 1946 as compared
with three-fifths of the total five
years
X
or
Presidential
decrease of $20,412,7841 This is
a
•
expenses and net
mail, express,
gers,
record
partment of Commerce said.' In¬
stallment financing, particularly,
line
:'-n " **'
carry-back credit of $20,148,000 claimed
by the Company
of the law which permits the
carrying back of the
transportation
From
out¬
relationships to income, the De¬
of
by
compaitto&
the
operating loss and recomputation of income and
prior years.
>•'«
'•
>
From
remains far below what might be
expected on the basis of prewar
out
U'.
.
$304,984,716,
,
ceeded the 1941 mark.
is
were
terminated
was
REVENUES:
Charge ac¬
single-payment loans
consumer
period
emergency
in
total.
credit
term credit whose volume far
Total
V'.y/''
Company
provisions
The revenues,
increased
1945
such
the
in
and
the
in
194C
short-term
standing at the end of 1946
established
of
revenues
j 1946 show a net credit of $338,529,
of
$2.4 billion above the
The
vy.yy-
.
operating
acknowledge
of
44
engage in the securities business.
Proclamation, September 29, 1945, which distorts
responsible for the
the
consumer
the
,
Co.,- with offices
Street, New- York City, to f
1945.
Operating expenses were $275,212,290, or
$21,449,257 less than in 1945; however, included in the
1945 figures was.?
$18,571,715 representing balance
of
cost
of
war
of
$2,190 the lower to the higher denomina¬
2,769
Wall
HOLDERS:
/■■'■■.
^
$56,388,502 less
debt.
factor
decline
the
Farm
&
erson
emergency
further in the first quarter of 1947
because of additional price rises
the
V
1946
unamortized
Savings out of current income
are
estimated to have ^declined
During 1946 there
Year
Mrs. Anna K. Dickerson and Al¬
fred J. Kuntze have formed Dick¬
Summary of Annual Report 1946
In
;
Dickerson & Co. in N. Y.
RAILROAD
TO ALL SECURITY
in!
insurance.
THE BALTIMORE AND OHIO
there
of $19 billion going into sav¬
ings. V About $16 billion of sav¬
ings were in highly liquid form,
representing currency, bank de¬
groups was in * the - average
mortgage granted by individuals there
which showed
of
other
of
ence
even
$2,190. For 1945 (the
was
latest figure
National Service Life
hand, E bonds of
$1,000 denominations,
which comprised about one-third
billion and consumer expenditures
came to $127
billion, the differ¬
field
though the total of farm mort¬
gages declined steadily through¬
out the war. The average of farm
mortgages recorded by all lenders
ow¬
reduction of
a
in.;
Savings :
however, dropped 30%
ance,
use.
.
The
higher than
was
prior to ;1944.
ing to decreased participation
and
disposable income of in¬
dividuals during 1946 was
$146
consumer
Mfges. Up 55% Over '39
and
year
in the form of Government insur¬
$50 denomination have declined
from the peak percentage of
15%
of the total in 1944 to
14% in Feb¬
ruary 1946 and 8% a year later.
On
j
V';V
Total
and
Aver. Size of New Home
any
com¬
Similarly, E bond purchases
$500
; X.£\"
volume
high mark of an average of
36% during 1943 when the
payroll
savings plan
those
were
earlier and
a year
although such
about one-third be¬
of 1945.
The smaller
purchase of $3.2 billion of
private insurance last year was,
only moderately below the 1945 ;
^
•
to
1946,
The
opening
;
• -
denomination,
$5 billion in time
savings deposits.
and
the
of currency
deposits' continued
were
ings.
first
two-
vX.;
•
dollars in holdings
$2
rise
a
the
in
three-fifths of
als to purchase bonds and the
re¬
turn to traditional means of
sav¬
over
the
during, the year,
holdings of F and G bonds in¬
was
of
,
about
during
decline in cash
savings
than in bonds reflects in
part the
removal of pressure on
individu¬
February, 1947, 16% of the
of Series E bonds
creased
in
17
relative
holdings.
billion
a
,
decline
was
quarter of 1946.
In
to
and
year
of
less
fifths
ment bonds.
One thing
the picture
up
has
pared with 34%
savings bonds.
beginning
:T.
ments
significant develop¬
during 1946 was the tend¬
low
the legal
i
.
savings
The volume of E-bond redemp¬
tions
posits and investment in Govern¬
So, the Washington economists instated.
say, you
the
-
-»One of the
Concurrent with
If
prices come down, a \big
backlog of demand will offer sup¬
port. In this respect, we are in no
1930.
Therefore, they feel there
cannot be a depression without
bottom, but at worse a recession.
Will
good crop year or not?
a
We start with
increase is deemed regret¬
table by some observers here. . If
there is no coal strike, good profits
are possible in the steel industry
at
value of E bonds
of $10 and $25
since
wage
maximum
each year.
;
April 21.
on
This is revealed in
purchase
persons
to
r
increased
Savings in the form
.
bank
even
inflation spiral.
an
prices,
February 1947
rise
they ency, disclosed by an
been
analysis of
have not benefited from large
level out.
*
savings bond holdings, towards a
advances. Steel will be an impor¬ restoration of the
Is this a portent?
prewar savings
Nobody can
tant testing ground for the price
be sure.
pattern.
During the war large
But the steel and auto
trend from here on.
The state¬
groups of persons who formerly
wage
settlements
recently
an¬
ment from steel quarters that the
spent as much or more than they
nounced
are
regarded as intro¬
effort will be made to avoid in¬ received
in income became im¬
ducing stabilizing elements, pro¬
creasing prices as a result of the portant purchasers of Government
vided business makes a real effort
.
had
and
—
one
purchased
years,
rises, increased quantities of consumer goods, expanded
consumer
credit, and the disappearance of wartime savings pressures
combined to cause a
drop in in-^
dividual savings from the abnor¬
such
ment economists
For
bonds
war
-
WASHINGTON, April 23 (Special to the "Chronicle'9—Govern¬ mally high
wholesale
E
all purchases.
Price
of the nation's
;
all
the
~
►
Correspondent reports prevalent opinion that prices are levelling
oat, that steel and auto wage settlements are stabilizing influence)
and big demand backlog will cushion potential
price drop.
■
in Individual Savings
Department estimates savings have fallen from abnor-
■
of
with
stockholders,
appreciation
patrons,
employees.
the
con¬
Governmental
,
R. B.
White, President
-
COMMERCIAL A FINANCIAL
THE
Net investment
those of 1945.
Bank and Insurance
Stocks
Stocks
Week—Insurance
50 %
and
and of casualty insur¬
Operating results of stock fire insurance
companies for 1946, in comparison
with 1945, have been sum¬
April, 1947, issue of Bests Insurance
ance
News—Fire
aggregates of a
writings in fire and
the stock com¬
represented is
not stated, but the presumption is that this group also writes around
90% of the total stock company business.
'
compiled and published represent
group of 232 fire insurance companies whose
allied lines approximate 90% of the total written by
panies. The number of casualty-surety, companies
The
figures
following table shows
The
resylts for the fire group:
1945
——
#
<
1946
;
8.4
—
$1,786,953
385,549
340,438
reserves
Loss
——
Net
—
'Loss ratio
53.0
.
,
underwriting results-.;—
in premium reserve equity
Statutory
Increases
investment income.^
Federal
taxes
+ 54.4
4.3
+
90,969
—66.3
15,015
5,065
$78,096
65,036
$34,947
+
+
(after taxes)
losses of 1946 and the increased cost
aggregate results achieved were surprisingly
premiums written were larger by 31.3% while unearned
the heavy fire
In view of
business, the
of doing
good. Net
premium reserves were up 27.4%. These
decline in surplus, which also was affected
securities
prices of the
increases account for the
by the lower market
held in the portfolios of the companies.
Total
combined ratio.
in 1945, and consequently the
underwriting losses were larger,
increase in total premium reserve equity,
than
lower
ratios were a shade
both loss and expense
noting that
It is worth
but when adjusted for
the
net underwriting profits
greater by 54.4%. Net investment income was moderately
higher, there was a sharp drop in Federal income taxes (due to
greater statutory underwriting losses), and total net operating results
were 21.6% higher.
Dividends increased by 5.2%.
Results for the stock casualty group were as follows:
statutory
were
%
1946
1945
(capital and surplus).
Policyholders' surplus
Loss
premium reserves
premiums written
premiums earned
Net
Net
*.«
Net underwriting
investment
Net
Federal
Dividends
55,113
20,901
3,406
—83.7
$118,647
$64,942
-45.3
50,118
46,650
'The casualty
7.6
+
7.0
-
—
<
well, relative to 1945,
companies did not fare as
Premium volume was up 22.3%, and unearned
23.3%, with a$>combined ratio moved up approx¬
did the fire group.
premium reserves
resultant drop
in surplus.
Oper¬
results, however, deterior¬
ated; loss and expense ratios were
both higher than in 1945, and the
ating
Australia and New
Zealand
Underwritings
loss on a statutory
basis, against a gain in .1945, but
these losses were more than offset
by an increase in the premium re¬
serve equity.. Final results, how¬
ever,
were
considerably below
imately
points.
7
produced
a
RANKOF
NEW SOUTH
WALES
(ESTABLISHED 1817)
.
(
Earnings Comparison
Pald-Up Capital
£8,780,000
Reserve Fund
„
6,150,000
Reserve Liability of Prop— 8,780,000
£23,710,000
Fire & Casualty
Aggregate Assets
S, Sept., 1945
Insurance Stocks
30th
1946
£223,163,622
Circular
THOMAS BAKER HEFFER,
General Manager
Head Office: George
LONDON
29
Street, SYDNEY
47
Request
Laird, Bissell & Meeds
OFFICES:
Threadneedle Street, E. C. 2
on
Members
New
York
Berkeley Square, W. 1
arrangements with Banks
throughout the U. S. A.
Exchange
Stock
120 BROADWAY, NEW
YORK 5, N. Y.
Telephone: BArclay 7-3500
<L.
A.
R.
Alfred
Gibbs, Manager Trading
years,
the Treas¬
been
Banks
to
mil¬
banking institutions
as¬
for
"
i
guarantee
banks should
the
periods up to 10 years.
j
is important to emphasize
"It
that the
ointed
is
bill
general
supervision of the Mortgage and
Appraisal Department.
Edwin H. Beiderman, who has
Deen
with the bank since 1919,
a
.now
gap
in private financing
exists in enabling
that
these en¬
Vo f- caupo* hi a
WEST
210
LOS ANGELES 14,
Comprehensive Trading
appointed
on
terprises to obtain essential fi¬
nancing.
The costs of going to
the
capital
markets for small
lished
wish to con¬
Sales Service
•
NEW YORK
CHICAGO
DALLAS
»
•
PHILADELPHIA
•
•
DETROIT
as
.
SEATTLE
1
Co.
has
directors of the
an¬
A.
Gerity-
Casting Company.
McDowell, is
a
partner in the
Mercier, McDowell &
Dol-
Thompson
with Buckley Broth¬
phyn, Detroit, and Mr.
ST. LOUIS
SAN HANCISCO
Jr.,
McDowell and J. Cary Thompson,
firm of
IOSTON
Gerity,
nounced the election of George
Mr.
;2>,w aitJ CsOtH t c tin y 7Uitgf ft
businesses.
proposed
"The
call
for^
factors
many
enterprises
and fees
terest
collected iri con¬
any
TELETYPE; LA 27». LA 7»
Analytical and
not
present day needs. It
type of home loan fi¬ whose financing needs have or¬ nection with this total of about
nancing, and moratorium mort¬ dinarily been met through cur¬
$11 billions of operations "were
rent
borrowings
now
need a more than sufficient tocqyer ex¬
gage re-financing.
fer
Michigan Die
CALIFORNIA
TELEPHONE TRINITY 7171
13b, moreover, is
extension of credit to
loans
for working capital only
and provides that loans cannot be
made for more than five years
and can be made only to estab¬
the
limits
handled some 3,50(>
commitments and
aggregating ^hout ^$o__0
Similarly, under tpe V-
Jr.,
STREET
SEKEKTS
should
directly.
bill does notgovernment appropria¬
tions and, therefore, no drain on
the Federal budget is involved.
business are
prohibitive.
Like¬
The
Reserve
Banks would^o^se^
wise, many banks properly feel
their surplus funds as a basis for
three offices.
that
they cannot extend
some
the guarantees, and should losses
Howard B. Lee has been ap¬ term credits for from five to 10
be
sustained they would first
pointed Assistant Secretary and years without some protection as
come out of the fund created by
Manager of the Flatbush Branch provided b.y this bill. It amounts
the guarantee
fees charged.
If
office at Avenue J and Coney to a form of spreading the risk
this
were
not adequate, losses
Island Avenue.
by providing insurance for a fee. would be met out of the Reserve
Gustav T. Andren has been ap¬ It is not the purpose of this bill,
Banks' net earnings or surplus, t
pointed Assistant Vice-President however, to provide guarantees am sure that this responsibility
and Freeman L.
Meinertz, was for either short or long-term fiplaced on the officers and direc¬
appointed Mortgage Officer.
i nancing whieh banks can and tors of the Reserve Banks, under
Mr.
Johnson
also announced) should extend without assistance
regulations and supervision of the
"The basic need of the smaller,
Board of Governors, will riot en¬
that the bank's
resources have
independently owned business en¬ courage easy and unsound credits
passed the $470,000,000 mark, and terprises is for long-term funds.
on the part of the private banks.
that a Mortgage Consultant Serv¬ Some businesses need funds for -"-""""rrnrW epptinn 13h Federal Remodernization of plant and equip-/
ice has been set up at the main
ment and additional facilities. Thq serve Banks
office, Fulton Street and DeKalb
need also arises from the sharp applications for
Avenue, to give a broader and increase in prices and greatly ex- advances,
more helpful service to home loan
panded volume of business result- loan program, 8,771 authorizations
millions.
borrowers.
Nine specially trained ing in a much larger volume of for guarantees of war production
accounts receivable and of in¬
loans,
aggregating • yearly $10.5
mortgage consultants are at the
ventories. Because of these vari¬
billions, were handled.
The in¬
James
BUIM-Wlftt CO.
their credit
governmental agency
principal purpose of the
- "Section
adapted to
make term loans espe¬
to
could
fill
to
purpose
with
Assistant
Vice-President, in charge of the
general supervision of Banking
Floor Operations
at the bank's
been
has
Directors of Die Casting
INSURANCE STOCKS
on
extend such credits
short-term obli¬
loan.
enterprises,
as
a
rule, prefer to obtain funds
on a loan rather than on an equity
basis because they do not wish
their stock ownership to be di¬
luted or to run the risk of losing
control
of the
business.
Term
loans
amortized
out of profits
meet this need.
This type of fihancing is particularly suitable
for small businesses that need a
funding of their
BANK AND
originate and make
based
loans
other
smaller businesses for
of providing them
necessary capital that they
not otherwise obtain. It will
cially
the
Alfred R. Marcks
have
McDowell and Thompson
DEPENDABLE MARKETS
only and not
'any
to
loans by chartered bank
judgment, and that neither the
particularly to small and medium^
Federal Reserve Banks nor any
size businesses that need capital
sociated
p p
approximately $139
of
ous
Dept.)
long
part
who
Marcks;
service of those who
Teletype-—NY 1-1248-49
Bell
Agency
their
owing
Vice-Presi¬
dent. He will
51,244
profits (after taxes)—
fol-
921, has been
$88,304
results-
income—
of
Board
Trustees
a
—85.0
run¬
Reserve
he
with
the bank since
48,217
Federal
as
day, April 18.
promo¬
tions made by
has
$13,235
suggestion of the
Council of the
Reserve System by in¬
regular meet¬
ing held Fri¬
and
18.4
25,017
taxes
Total net. operating
-
results
equity.
underwriting
10
ury
appointments
22.3
98.7
the
financing institution' as
lions that was set aside from the provided in the bill.
"It should be borne in mind that
gold increment to enable Federal
the Reserve System has had the
Reserve
Barks to
make direct
authority under 13b for the past
loans to industrial and commer¬
13 years to make direct loans or
cial businesses.
The second sec¬
to make commitments to purchase
tion of the bill substitutes for the
loans made by private banks. On
direct lending authority a provi¬
principle, we feel that the private
sion which would enable Federa
23.3
38.1
banks
Eccles
vides for the return to
several new
announced
Avenue,
+
34,982
-
63,287
President of
Brook¬
Fulton Street and DeKalh
Savings Bank of
+
60.6
91.8
.
in premium reserve
Increase
1
1,130,434
1,064,866
55.0
———.
ratio
Statutory
underwriting."
+
642,020
1,382,432
1,261,175
36.8
ratio
Combined
as
—
ratio
Loss
Expense
945,091
341,879
520,818
reserves
Unearned
+ 12.3
without
serting in the bill a provision that
the guarantee shall only be avail¬
Marriner S. Eccles,
able when it appears to the satis¬
Chairman of the Federal Reserve
faction of such Federal Reserve
Board emphasized that the prin*bank that the business enterprise
cipal purpose of the bill is to aid
is unable to obtain requisite fi¬
in
providing
small
businesses
nancial assistance on a reasonable
with necessary capital that they
can
not
otherwise
obtain.
We basis from the usual sources.^; T§le*Board also favors the rec¬
quote from Mr. Eccles' statemeri
ordation of the Federal Ad¬
as follows:
"The bill has two sections. The visory Council that the bill be
amended to provide that the guar¬
first one repeals section 13b of
antee be restricted to chartered
the Federal Reserve Act and pro¬
as
5.8
—
$1,009,256
$1,071,014
made
Advisory
Federal
ning
George C. Johnson,
Change
—(000's omitted i
S.
Viarriner
BfeEyn. Dime Sav. Bank
Appoints New Officers
lyn,
of such quality that
be
mittee adopt the
chartered
varying experience on the differ¬
ent lines emphasizes the value oi
The Dime
was
could
it
a
by
made
5.2
>1^:
Dividends
cases
guarantee by giving participations
systemnof; to their correspondent banks or
guarantee
in; other banks in the community. * Iri
part by these order to-meet .this objection, the
banks of loans Beard recommends that the Com¬
provide for
inland marine
and aviation. Results in the vari¬
ous
lines were mixed, on which
Best comments as follows:
"The
diversified
to'
instead
coverage,
„
the loan
and
Banks
'in
yond their legal limit-, would re¬
sort to the guarantee even though
Reserv
oral
21.6
68,426
—
f'.vW. Total net operating profits
■u'
—
$9,043
+
$5,859
87,252
underwriting results.^
Net
Net
---
111,579
35,473
+
$:>'
98.3
loan
by the Fed
was profitable.
Other
which expanded were: Ex¬
tended
the smaller banks,
Act f
cirect
but
5%,
lines
ground that
where
the amount of the loan was' bebanks to S. 4US on the
R
Federal
serve
high, and there was some im¬
provement in underwriting results
due
to
rate
increases;
ocean
marine business declined
about
16,2
of
sion
vehicle premiums in¬
creased nearly 50% over 1945 and
almost reached the 1941 prewar
31.3
+
102,536
—
29.620
—
27.4
+
ihc<^= '
provi-/ "There has been considerable
thj objection from some of the larger
repeal
to
present
Motor
41.0
99.2
.
ratio
Combined
13.2
+
April 17 to the Senate Banking'
Committee which has under consideration a bill (S 408)
formal statement;made on
a
and Currency
marine
high fire
losses
influence greatly under¬
writing results, and it is worth
noting that straight fire business
has been unprofitable for three
years in succession.
With" higher
rates this trend could be reversed.
57.9
41.2
—.——.—
A, Expense ratio
+
1,325,794
1,531,935
1,246,464
1,040,369
1,166.766
1,072,438
—
premiums written
premiums earned-:
Net
■
Change
(000's omitted)——
$1,950,756
In
and ocean
vehicle
motor
institutions.
to chartered banking
^^
and 60% of total business*
is more than twice that of
combined. Consequently
concisely in the
and Casualty Edition.
marized very
betweeh
for
accounts
and Currency Committee basic need *fIsmail
funds and net equity financing. Would
enterprises is for long ferm
straight fire
from
income
mium
business
This
Long Term Loans to Small Business
Tell* Senate Banking
companies as a group, pre¬
ance
VAN DEUSEN
By E. A,
of
Eccles Favors Federal Reserve Guarantee
in¬
with the fire companies,
showed a moderate gain, but divi¬
dends were 7% lower. ' Vv V-!hf. With regard to the fire insur¬
come, as
;
April 24,1947!
(2210)
18
i
rS Thursday,
CHRONICLE
is associated
ers,
New York
Cityf^^^
gations into a term
"Owners
of
small
substantial period of time to re¬
tire
loans
by gradual
from'earnings;*
repayment
+ t
penses
and losses and
to . show
profit. In other words, the
record is not one of loose lending.
—"This bill, of course,' does not
some
Banks in com¬
private banking
Credit judgment and re¬
place the Reserve
petition with the
system.
sponsibility would remain pri¬
with the lending bank^
guaranteed would origi¬
nate with local banks dealing with
local people whom they know and
marily
Loans
with
whose
character,
capability
capacity they would be fa¬
miliar.
A Federal Reserve Bank
could not guarantee .any .lQantiinand
>
•
JVohixrie
Number 4588
165
THE.COMMERCIAL & FINANCIAL CHRONICLE
(2211)
nr
less
requested
to
do
by
so
the
loans
well
as
as
in
loans to
Industry 1947 Plant and Equipment Expenditures
bank:
Reserve
Each
If
loan
••
passed
-
would
have
r
There
The
Reserve Banks
eral
to
would
blanket, approval.
.
guarantee
*
be
by the Federal Re¬
upon
Bank.
serve
approved
Bank r the
be
12
and
24
provide a regional or¬
ganization through which locali
financing institutions, in all parts
off
of
Belt & Sundell Now 3
With
Cayne, Bobbins j
made
in
."As
the
program,
of
war
the
under
Department
of
by
with expenditures of $12.0 billion
in-'l946
and $6.6
billion in
1945.
This survey also shows that busi¬
ness
anticipates
billion
on
spending /$3.6
plant and equip¬
during the second quarter of
1947, approximately $100 million
higher
than
the
expenditures
planned for the first quarter, al¬
though almost $200 million lower
new
ment
pro¬
than
V-loan
maximum
a
the
Com-.|
to
responsible
case
loans
Exchange
the
record
expenditures
m
the last quarter of 1946.
interes
rate would be set for guaranteed
The present maximum rate
loans.
*Of
under section 13b is 5% and it is
contemplated that the initial max¬
imum rate under the new legis¬
;
lation would be the
Within
same.
Robert
Belt
Robbins &
Street.
this
K.
Belt
was
total
approximately
$12.2 billion will be spent by
Roy B. Sundell
cor¬
porations, the remainder by unin¬
corporated business. In addition to
the $13.9 billion on new plant and
Co., 39 South La Salle
Mr.
this
formerly
a
been
been reached
have
in
the fourth
pared with $7.0 billion in both the
first half of 1947 and the last half
of 1946. If the
anticipated expend¬
itures for this year
eventuate, they
last
be
15%
year.
above
expenditures
They would be about
70% above the amounts expended
in 1941 arid more than 50%
higher
than in
1929, the two
prewar
highs. Adjusting for the substan¬
tial price increases,
however, ex¬
penditures in 1947 would prob¬
ably be slightly under those
1946, although higher than
1941
or
in
in
1929.
to
'
Railroads
'
and
industry.
electric
the
on
pect continued
antici¬
other
Manufacturing Companies Expect
change
and
gas
hand,
ex¬
increases in their
capital outlays during 1947. Com¬
mercial
and
companies
clines
most
miscellaneous
anticipate
small
de¬
during 1947 while mining
companies
about the
expect
to
rate
same
as
spend
at
in the last
half of 1946.
It is possible from the
survey to
compare actual expenditures with
those
that
had
anticipated
by
been
previously
the
companies.
During the fourth quarter of 194ft
the
on
aggregate
new
industry
was
planned.
and
amount
expended
plant and equipment by
slightly higher than
Manufacturing,
mining
railroads made approximately
7% smaller outlays than had been
anticipated. This
limit, which may be subject
Decline
partner in Kitchen & Co.
Mr. equipment, it is estimated that
with changing condi¬
American business will spend an¬
Planned expenditures by manu¬
Sundell was in the trading depart¬
tions, interest rates would be deother $600 million on old or used facturing companies for 1947 are
ment of Hicks & Price.
termined by the borrower and the
estimated at $6.2 billion, not quite
^plant and equipment.
bank.
Guarantee
fees
charged
EXPENDITURES ON NEW PLANT AND EQUIPMENT BY U. S. BUSINESS*
would be specified percentages of
1939-1947t
the interest rate, graduated ac¬
(Millions of dollars)
cording to the percentage of the
loan
guaranteed.
The method
4
all
the first half of this
year and $3.4
billion in the last half of
1946.
utilities,
quarter of 1946, Business antici¬
pations indicate a leveling off of
expenditures
during
1947 .with
estimated outlays in the last half
amounting to $6.9 billion com¬
will
for
a
steady
increase in expenditures on new
plant and equipment since the be¬
ginning of 1945, the peak seems to
equipment,*
Commerce. This may be compared
purpose.
duction
and
^mission, and
is especially qualified
tcj provide this service because ot
its close contacts and daily rela¬
tionships with banking institu¬
tions.
Its
responsibilities
for
maintaining sound credit condi¬
tions, so far as its powers permit,
make it the appropriate agency
for this
new
While there has
total
Manufacturing companies
of 1947 compared to
$3.2 billion in
and^
plant
public jointly today by the
Securities
Congress,
:
new
according to the quarterly survey
Cayrie^
/. ihanent organization created
leveling
a
agriculture, expects to spend about $13.9 billion during 1947 for
the purchase of
country would have con¬
CHICAGO; ILL. — Robert K.
access to a guaranteeing
Belt and Roy
Sundell have
agency if needed.
The•Federail
associated : with *
Reserve System, which is a per- become
:
previous high periods, but
over
during second huge six months.
the construction of
venient
and
SEC predicts increases
;
PHILADELPHIA, PA., April 23—American business, exclusive
the
Congress
To Exceed Last Year's
;
no
branches
of
pate a grddual decline in expendi¬
tures during 1947. They
exepect to
spend $3.0 billion in the last half
institutions without assuming ex¬
cessive risks."
;
-./W.".
Fed¬
their
half .the
i
This bill : is a r means of
by . the brans.
aiding the private banking sys¬
would be made promptly avail¬ tem of this country to meet
par¬
able without referring the matter ticularly the longer-term financ¬
to
any ,; agency
in Washington. ing needs of the smaller business
local
19
vet*
was
more
than
offset by commercial and miscel¬
laneous
companies
and
utilities whose expendi¬
gas
tures
were
and
electric
larger than had been
planned.
,
would be similar to that
the V-loan
antee fees
when guar¬
ranged from 10 to 30%
program,
interest rate,
of the
used in
according to
percentage of the guarantee.
This has been and would be the
the
-1946-
Jan.-
1939
Manufacturing
Mining
l-,930
___!
1941
2,580
380
Railroad
Electric
1940
3,400
560
Commercial
gas
and
480
550
2,360
—
miscellaneous §
1944
1945
1946
2,250
410
560
2,130
utilities
440
1943
2,760
680
280
and
1942
2,390
3,210
5,910
360
6,170
April-
Mar.
19474:
June
1,100
1,400
JulySept.
1,650
-1947Oct.Dec.
Jan,-
1,760
Apr.-
Mar.t
JuneJ
1,620
: i
1,530
500
440
560
110
130
160
160
160
150
580
550
570
1,000
100
130
160
180
21(1
280
1,040
1,690
180
230
280
360
350
420
3,980
4,420
710
910
540
460
710
680
540
490
630
2,840
1,720
920
1,250
1,800
610
1,060
1,100
1,180
operating procedure.
is evident, therefore, that
Total
5,200
6,490
8,190
6,110
v 4,530
5,210
6,630
12,040
13,890 i;
2,200
2,790
3,310
3,730
3,440
3,560
the
lending banks must carry
oecuriues and Exchange Commission and other data.
These figure®
some portion of the loans without
do not agree precisely with the totals included in the
gross national product estima tes of the Department of Commerce.
The main difference lies in
the
inclusion
in
guarantee and this will be a de¬
Commerce figures of certain outlays charged to current account.
fEstimates based on anticipated capital expenditures of business.
§Includes trade, service, finance, com¬
terrent on their making undesirable'and risky loans. The steeply munication, and transportation other than railroad.
..
graduated guarantee fees will in¬
duce banks to carry as much of
the risks as possible and thus
cause
them to exercise careful
judgment and prudence in passing
"
upon credits.
"Business and
at
w
are
at
some
rounded
and
will
not
This appears as a matter
credit conditions
and
present
times may not
....
-Figures
..toe.
.
or as an
offer to buy,
vc
uumu
comutttcs,
.
uaaeu
on
necessarily add to totals.
of record only and is under no circumstances to be construed as an offering of these Shares for sale
solicitation of an offer to buy, any such Shares. The offering is made only by the Prospectus.
or as a
other
1,270
j
be such as to re¬
quire extensive use of the guar¬
antee
authority.
However,
the
Reserve
Banks
should have a
service of this kind to
business and industry
when necessary. The amount, of
NEW ISSUES
stand-by
render
to
The
Light and Power Company
long-term funds that individual
enterprises may need is often rel¬
atively
small.
Many loan r dejmands do not exceed $10,000 and
few
relatively
336,088 Shares $2.00 Preferred Stock, without par value
$100,000.
exceed
and designed
The bill is intended
Price $53.50 per
primarily to help the smaller en¬
terprises. The larger ones, as a
rule, do not need this sort of as¬
sistance because they can go to
the
share
plus accrued dividend
Subject
capital market and raise funds
bonds or equity financ¬
to
either by
priority rights of present Preferred Stockholders
under the Company's Exchange Offers
-
ing:-,^ ;
guarantee service, as pro¬
would be avail¬
"The
vided in this bill,
it has m the
without discrimination for
whether members of
the. Federal Reserve System or
163,912 Shares $1.90 Preferred Stock, without par value
able in the future, as
past,
all
banks,
Price $52 per
:-i'
not.
'Tt
would
ill-advised
be
and
shortsighted, in my. opinion, for
i
Copies of the Prospectus
j
.
repeal section 13b in
that the $139 millions of
Congress to
order
share
plus accrued dividend
.""2' <tt
may
may
be obtained in
any
State from such dealers participating in this
legally offer these Shares under the.securities laws of such State.
issue
-
'Goyenimeht 'funds ; thereunder
may-be returned to
arid fail to provide
the Treasury
this proposed
alternative authority to the
eral
Reserve
posalis
Banks.
Fed¬
The pro¬
th^result^pjtpng;;and ex-,
tensive^experien<^..which the Fe^ii^l* fte^rvev-System has . had -in
connection with the loan guaran¬
tee Drihdple^ltr is a tried -Ortu
tested
principle
-
exempMleAv. in
Federal--Housing sAdministration
Putnam & Co/
Chas. W. Scranton & Co.
U '•
The First Boston
'Tf
Corporation
y
B^A-&JGo.rinc. v
April 24/1947
Estabrook & Co.
w
Harriman Ripley & Co.
tr-'f •? *'.
-
Smith, Barney & Co.
Incorporated
Drexel & Co.
^^
*
Kidder, Peabody & Co.
-J
: > "V
THE
Thursday, April 24, 1947
CHRONICLE
COMMERCIAL & FINANCIAL
(2212)
120
Explains Unofficial Market in Canadian Dollars
Status of Postwar
Canadian Securities
which participants arc
in
freight
high classification rating.
trating "their business on
emphasize the inadequacy under pres¬
New York for Canadian funds.
it is becoming evident that the
Canadian authorities are now also thoroughly aware of this fact.
Constructive steps such as the closing of loopholes in the F.E.C.B.
regulations have already been put into effect, but have so far not
succeeded in reversing the down-<9exchange market would be bene¬
taking a
continue to
Recent events
in truckers concen¬
resulted
makes
situation
This
of the free market in
This fact has long been obvious but
ent conditions
answers
questions most frequently asked about Canadian Exchange.
Ascribes discount of Canadian dollars to a small "unofficial market"
to
(Continued from page 14)
has
WILLIAM J. McKAY
By
Foreign Exchange Board of Canada issues brochure giving
Transportation
non-residents.
Foreign Exchange Control Board
The
of Canada has issued a
,V|<1
" A nfinnw 4A
^
' *
* * '
"
difficult I brochure entitled "Answers to Some Questions About the Unofficial
yr\
it
much truck serv-| Market in Canadian Dollars," in<S>
would desire."
which explanations are given of States.
for us to use as
ice
as we
Shortages
^
Water Transpo
n
Exchange
Canadian
regulations
These dollars will be re¬
ferred to throughout this brochure
as "inconvertible" Canadian doty
why Canadian
sometimes priced on lavs.
portation are also reported. Some an "unofficial market" at less
]■ (4) The use which can be made
ward trend that was set in motion1
ficial in many respects. The Ca¬ difference of opinion is noted as than the official rate. The text of of Canadian dollars acquired by a
following the strong rumors of an
non-resident in this way is lim¬
nadian authorities would have a to the showing being made by the document follows:
imminent devaluation of the offi
more
direct control of foreign coastwise and intercoastal steam¬
ited by Canadian exchange con¬
The Unofficial Market in
cial dollar.
* ' - :
trol
capital movements, and the injec¬ ship service. One Eastern manu¬
regulations.
In
particular,
Canadian Dollars
The relative
unimportance of tion of market stability would cre¬ facturer contends that "water
these regulations require Cana¬
From time to time Canadians
the free market in comparison
ate greater confidence abroad in transportation is neither adequate
dians to obtain foreign exchange
have noted the existence of an
I with the official market
.per¬ the Canadian dollar and the obli¬ nor efficient, and we. feel,,that unofficial market for Canadian for all commercial exports to the
haps been over-stressed in Cana¬
United-States and for commercial
gations of the Dominion of Can¬ contributing factors are govern¬
funds in New York. Many Cana¬
dian offical circles. If this were
ada... On this side of the border ment control of major steamship
etc.
Canadian .dollars
dians and others who are aware services,
strictly correct there is little doubt
lines and the obvious decline of
moreover there - would; be a still
cannot be accepted in payment
of this unofficial market have not
that serious attention would be de¬
for these things. For this reason,
greater interest in the develop¬ the American merchant marine.
voted to its elimination. Actually
ment of business with Canada if We, of course, ship alf exports by known how or why it arises.
the most important use tor Cana¬
however, the free market serves
the free market for the Canadian water; however, we are not movdian
dollars
'"ve noticed that
acquired by non¬
I as the channel for large scale cap¬
in
of water trans-
Severe shortages
and reasons offered
dollars are
has
its
to
consequently
movements and
ital
importance cannot be ignored
this extent. ,'' \'
4
dollar
placed
were
on
a
stable ing
is
coastwise
or
intercoastal
shipments by water owing
•
perhaps the principa
ulation in the free exchange mar¬
characteristic
of the unofficia
ket which the Canadian author¬
market is its extreme narrowness
ities are
powerless to prevent.
and its aptitude on frequent occa¬
However strong the official dollar
sions to develop a one-way ten¬
and however abundant the Domin¬
dency.
This lack of stability is ion's
surplus of U. S. dollars, bear
inevitable in view of the nature
raids on the free market can not
of* the
transactions which pass
be checked by official statements
over the free rate.
For example,
alone, and despite statements to
capital transactions are normally he contrary the level of the Ca¬
in the one direction and the other
nadian free dollar does have an
main component of the market, influence on the Canadian situa¬
the tourist demand, is seasonal. tion.
t "
In order to limit the extent of
During the week the external
the fluctuations, which often missection of the market was firm as
jeadingly reflect on the standing a result of savings banks' demand
of Canadian credit in this country,
for these issues which have re¬
What
any
mainly
On the other hand the absence to irregular • schedules
and-fre¬
of official control encourages spec¬ quent embargoes at ports. Labor
basis.
conditions
han¬
exorbitant
and
dling charges at piers make ocean
shipments very unattractive at the
present time."
,
They
Canadian dol¬
^s.are at less than the on this
market sometimes priced officia
have felt that this
reflects the worth of the Canadian
rate
and
may
the judgment of non¬
residents.
Other misconceptions
in
dollar
have
also
arisen from
unfamili-
arity with the circumstances.
Because the circumstances in¬
volved in the unofficial market in
residents in the unofficial market
is to make
capital investment in
a
Canada—for
example, to purchase
securities, or to make
loans, or to invest in Canadianbusinesses. When the capital with¬
drawn by one non-resident in the
Canadian
"inconvertible" Canadian
form of
is
acquired by another
in
the
unofficial
to | Canadian ^dollarsi are mrt
market for the purpose of making
known, the present brochure is
have had an unfavorable effect
a
capital investment in Canada,
designed to provide answers to
on the demands for air travel, ac¬
it is clear that no net export of
the
questions
most frequently
cording to many executives. The asked about
capital from Canada takes place.
it.
uncertainty of schedules and ar¬
(5) The only important excep¬
Key Facts About the Unofficial
rival time has also been an ob¬
tion to the rule that residents of
Market
stacle, but it is believed that air
Canada must receive foreign ex¬
Before
considering the ques¬
travel will increase considerably
change in return for exports of
with more, equipment becoming tions, these general facts should
goods or services to the United
available, with better-trained per- be considered,
States is the case of tourists tem¬
sonnel and with improved airport
(1) All exchange transactions
porarily in Canada. For practical
cently been added to the legal list, facilities. The comment most fre- in Canada take place through bfreasons
these tourists may u?©
nternals were inactive and slightquently made regarding air ficial channels and at official Canadian dollars in payment for
y weaker in sympathy with a freight is that.it is expensive and rates of exchange. The unofficial
services rendered to them.
further decline in free funds. Since cannbt be utilized foY many types market in Canadian dollars (in
(6) Canadian dollars acquired
the change in the F.E.C.B. regula¬ of
which the Canadian dollar has on
In the unofficial market are thus
tions which prevented the arbi¬
occasion been quoted at less than
"limited purpose" dollars.
They
Longer-Term Trends t
the Official rate) is entirety lo¬
trage of Dominion Government 3,
Air Travel and Transport
widely
Weather and crashes appear
dollars
non-resident
,
~
m
gome
tion
measure
at
of official interven¬
appropriate levels
to be desirable. This
constitute a precedent;
appear
would
would
Prior
official
dollar last July^the unofficial rate
would have been forced above the
official quotation if the Bank of
Canada had not supplied official
dollars to meet the demand in the
not
the
to
free
•
revaluation of the
market.
Official
supervision of the free
CANADIAN BONDS
..<•
f
p
•
/"■ 2. * 1\''\
;>
vi
'u-'-''/ ''"v."
" •
,
against stocks, the pressure
iceably diminished.
funds
Free
'
Most;
continued
•
manufacturers
surveyed
expect to continue to rely upon
the
however
following sales in connec¬
tion with the acceptance by the
Montreal Light, Heat and Power
stockholders in this country of the
offer of $25 per share made by the
Quebec Hydro-Electric Commis¬
weak
sion.
> '■-
■
bonds
of offers of these bonds has no-
railroads
extent
as
in
about, the
to
the
same
period.
prewar
While shifts have occurred, many
.
.
u.
.
-
cated outside of Canada.
v
:
(2) Transactions in this market
are invariably between two non¬
residents.
No resident of Canada
is ever authorized to acquire for-
«they arethey point eign exchange and no resident of
only tern- ficjax market through the unofporary.vThe railroads,
have .lost some business to Canada coming into possession of
other forms of transportation be- foreign exchange is ever authorout,
cause
turn
of-the
car^ shortage, but in |ZG(j fQ convert it into Canadian
they have bbtained business
dollars
through
the
unofficial
generally carried in prewar market
days because of the current lack
(3) The market arises because
of adequate coastwise and inter¬
capital transfers to non-residents
coastal
steamship
service
and are
permitted relatively freely
changes in cost differentials.
under Canadian foreign exchange
not
;
Puerto Rican Sugar Crop
GOVERNMENT
Reported by Lamborn Co.
PROVINCIAL
The current Puerto Rican sugar
.1.
Railroads
are
generally
ex¬
harvesting and grinding of
control regulations. Before noting
swing, is forecast pected to continue handling large the sources of Canadian funds that
products -with relatively find their way to the unofficial
at 1,035,000 short tons, according bulky
value
as
well
as
carload
to cable advices received by Lam¬ low
market, it is well to remember
if cus¬ that residents of Canada can ob¬
born & Co. from San Juan.
This shipments, < particularly
tomers have railroad sidings. In
indicates an increase of 126,000
tain foreign exchange at official
the less-than-carload freight field,
rates to meet not only all current
tons, or approximately 14%, when
keen
competition
between
the account items due to non-resi¬
compared with last year's outturn
railroads and the trucking com¬
of 909,000 tons.
dents, such as payment for goods
Weather
conditions,
however, panies is expected, particularly and services, but also capital obli¬
for hauls up to 500 miles.
are not entirely favorable and the
gations expressed in foreign cur¬
A number of executives believe
sucrose yield of the cane is gener¬
rency, such as maturing bond is¬
that
better
coordination
of all
ally below normal.; >
sues, as they fall due, and in some
transportation is required. It is cases in advance of the date on
Sugar fifoductidri * *tcK"April 5
felt
that
many
economies and which they fall due.
this year amounted to 473,000 tons
faster service could be effected,
But in addition to these types
while last year to the same date
and each- form of transportation of transaction, Canadian regula¬
522,000 tons were produced, ac¬
tions also enable many other types
could
perform the
service for
of capital payments to non-resi¬
cording to Lamborn & Co. Rains
which it is best suited.
dents to be made in Canadian dol¬
and
unsettled
labor
conditions
crop,
MUNICIPAL
which is in full
CORPORATION
CANADIAN STOCKS
A, E, AMES & CO.
INCORPORATED
TWO WALL STREET
f
NEW YORK
5, N. Y.
One railroad executive included
RECTOR 2-7231
NY-1-1045
have interfered with
some
operations in
in
the
sections of the island.
survey
"any two
Quarter Century Dinners
TAYLOR, DEALE
One
& COMPANY
'64 Wall
J
thirty-four
ployees and partners
Street, New York 5
WHitehall 3-1874
hundred
'
*
V
Century
management if doing
so
would be
in the public interest." He further
of Merrill
contends that "government expen¬
Club
dinners
held
cities
same
test as to public convenience
and necessity and
economic justi¬
fication that is applied to the / ap¬
throughout the country,
f In New York, 62 attended the plication of the railroads for the
held at the Ritz-Carlton building of new lines and for the
dinner
Government
Municipal
Hotel.
Provincial
Corporate
aging
different forms
Lynch, Pierce, Fenner & Beane ditures for all transportation facil¬
attended the firm's annual Quar¬ ities should be subjected to the
ter
CANADIAN
that
em¬
April 22 in various large
SECURITIES
or more
out
ilbcwls
Winthrop H. Smith, man¬
extension
silver
Interstate
partner,
presented
but without
conversion
the privilege of
other currencies
Canadian dollars paid
into
in Canada.
to'10 new members here.-
sion."
of
old
lines
Commerce
by ; the
Commis¬
demand for
partic¬
ular purposes in relation to the
upply of "inconvertible" Cana¬
dian dollars available.
A dollar
that can only be. used in certain
ways is obviously
likely,to be
quoted at a discount below a dolar .that has unlimited application.
the
depends" upon
Canadian dollars for those
(7)
Canadian
of
amount
The
,
the un¬
The vol¬
ume of transactions in this market
has not run to more than a small
dollars changing hands on
official market is small.
fraction of Canada's
international!
transactions.
Answers to
Questions
from these facts
bat the unofficial rate for Canaian dollars does not necessarily
It can be seen
judgment of non-resi¬
reflect the
dents
as
Canadian
to the value of
general, but reflects ra¬
ther the limited use that can be
made of Canadian funds obtained
in this way. But various questions
on this subject arise to which the
funds in
following
provided.
are
answers
Maintained in
Outgoing Foreign
What Controls Are
Canada
on
Exchange?
A full
'
^ '
understanding of the un¬
,
official market in
requires
brief
a
.
Canadian funds
explanation of
exchange regu¬
lations. For simplicity the descrip¬
tion of regulations given here is
related to transactions with .the
holder and another. Such a trans¬
United States where the unofficial
action would make it possible, for
market is located.
j;i
instance, for one American re¬
Under
Canadian foreign ^ex¬
ceiving Canadian dollars through
the sale of real estate in Canada change regulations, United States
dollars I are available at official
to obtain U. S. dollars by selling
the Canadian, dollars to another rates out of official Canadian re¬
American.
Thus there exists a serves for all current account
transactions, whether the original
supply of Canadian dollars in the
hands of non-residents which are terms of the transaction call for
not convertible into U. S. dollars payment in United States dollars
non-residents are
of transportation should be per-?
not "blocked" and may be trans¬
mitted to operate under single ferred between one non-resident
Merrill Lynch Holds
I
pointed
lars
only be used for certain types
payment in Canada. Their price
is naturally affected by the re¬
striction of their possible use and
can
of
in
this way to
Canadian foreign
.
at the official rate in
which
to
among
themselves.
creates and maintains
unofficial market in the United
transfer
This supply
the
Canada but
are free
the non-residents
or
not.
For
.
..
•
;
example, an. American re¬
ceiving
or
-
•
a
Canadian dollar interest
cheque, or Canadian
dividend
Volume
165
-Number
4588
THE COMMERCIAL & FINANCIAL
CHRONICLE
business transactions below the
1945 and 1944 levels.
.
Washington and You
''■
f
?!
(Continued from page 5)
mired
down
harness
in
effort
their
to
haul
double-
through
guarantee loans up to 90%. Sen¬
ate Banking Committee,
by
Tobey,
has
the
proposition up for hearings.
In
other spots, enthusiasm is lack¬
ing.
;
.-j
f
*
,■
*
*
........
First day Author Tobey sched¬
committee hearings on; the
uled
guarantee
deal,
Federal
Reserve
Chairman Eccles motored up Cap¬
as star witness—Motored
$50,000,000
Economizers
good
mittee quorum.
;■s
Treasury Secretary Snyder is
outwardly
neutral
the
Re¬
for
a
•
planned for 1948. Legis¬
census
lation -authorizing
the
census
has been initialed by the Sen¬
ate
Civil
Service
Committee,
can
be
tors
are
expected to get Senate
approval. But House appropriadead set against it and
of today have a tight enough
grip bit the money bag strings
as
to starve the; Senate bill.
Keep one eye — or both — on
developments in the automatic
vending business. There are sound
reasons to believe automatic sell¬
ing will boom, will (1) challenge
the ingenuity of vending machine
care
olutionary trends in packaging.
bid
for
guarantee
Actually, he doesn't
for it but isn't pining for a
fight.
;*:
>1:
one
good legislative
panhandler by the Federal Trade
—
you're
000,000
or
receive
a
Clayton
Act amendments
prohibiting one
company from acquiring the stock
mission
competitor is foundering. (2)
The House Commerce Committee
is about to order
hearings on a
bill
reducing F^C from a quasijudicial body to a medium of col¬
lecting evidence to be submitted
to the courts.
C
•
,
•
-
:
;
Nor is family happiness ram¬
of
'chides
his
claims
a s o n
elder
publicly
brethern
for
shaking the big stick instead of
functioning^
as
"a
business
court*" Mason would curb bad
.
practices
on
an
industry-wide
i;.
set
sji
for
ff.
howls
root
grass
against the President's war on
high prices. Edwin G. Nourse, the
President's
economic
Houdini,
says farm prices must come down.
Right now he's planning to stump
the West and give this word
per¬
sonally to farmers. In that pro¬
there's
pain
for
plenty
political
of
Democrats
unless
the
White House intervenes.
be
chronicled, is ready to acknowl¬
edge that chatter of any gener¬
and
substantial
reductions
predict
food
price
is
purely
wishful
He's
unwilling
to
dreaming.
deep
any
cutback
prices before
in
1948—possi¬
bly not then.
questionnaire
*
*
The Senate this week voted
leased
smoothed
the
•
way
,
have
for legislative
For
*
fr. OPA litigation
transferred
partment
to
for
kicks
OPA
*
cases are
the
being
Justice
De¬
disposition.
That
the
from
ladder
lawyers
trying
to
hang onto high-paying jobs by
prosecuting price ceiling* of¬
fenders another couple of years
so.
>
"V4-
%
Civilian
tration
industry
as
follows:
as
hint
a
ft
ft
••
Production
restrictions
/
and
increases.' •'-»»*•' * Jr
one-year
other
it remains 7 hours.
tee
v
,'•*/»
fe(id
convened
public hearings to
(1) claims by Pan-American
Airways that one American flag
sift
line
should
control
international
and
commerce,
(2)
counter¬
claims that steamship lines should
be
licensed to operate overseas
air
carriers.
likely,
with
A
deadlock
continuation
looks
of
the
present system probable.
■,
$
■
't
^
f? r*
For
of
i •,
cogent,
a
the
plaint
3
rebuttal
sane
that
business
alone is to blame for price dis¬
tortions,
ask
of
on
Senator
your
Representative
to
Senate
mail
or
you
Document
a
21,
Wages and Profits. It's
just off the press and supply is
limited. Prepared by the Legis¬
lative Reference Service for the
Senate
Labor
18-page
vincing
well
as
the
Committee,
pamphlet
evidence
Securities
of
111
the
Broadway,
that
Adminis¬
on
commer¬
The Federal planners
are
worried
by the first quarter new construc¬
tion lag of 11% below Adminis¬
estimates.
building
Currently,
isn't
even
New
effective
;..
CIO
event
through
labor
for
mands
.
g t o n
(Duke) Hunt¬
.will
be-
er
come
an,
h
cluding
increases
and
costs
higher
higher
in
reflections of in¬
were
costs
of
production,
in
their
profits
were
1945
"The
form
downswing.'
of
contract
,
.of
cer
Aetna
-
at that timer1- .:
when
be
the
and
he
will//
active
in
Victory,' president; of
.
'Times.'"
which he described
Whole¬
sale
Duke
depart-
Hunter
best that
/ r
ments..
Mr. Hunter started in the secu¬
rities business in 1915
outdoor
on
Street
Broad
the old,
Curb
Ex¬
change Market with the firm of
George, Rieth & Co.
Prior to
forming Hunter & Co. in 1940, he
was
with
associated
Hanson
~
Vv
Mr.
as
well
as
Hunter is Treasurer of the
Security Traders Association of
York, whose annual dinner
is being held at the Waldorf to¬
morrow night.
New
have
hours.
first
and
we
as
Mr.
such
was
ITU's
Victory said it
reduction
in
was
45
of
30-hour
a
the
years,
the first step toward
goal
the
work
week.
,/
"Ratification of the contract
the Local's Executive Committee,
its Scale Committee and three In¬
ternational officers who took part
in the last eight negotiation ses¬
sions.
The
International
Woodruff
officers
Randolph,
the opening of a new
office at 25 So. 3rd St., which
the management of John
announce
under
E.
ITU
Niemond
who
has
ft
back
ber, of yeaps, recently;being asso^
ciated with Fitz^efald & Cb.!:t /J
Other offices of Penington, Col¬
Co., are in New York and
ket &
Reading, Pa. The firm has
bership on the New York
mem¬
Stock
Exchange, Philadelphia Stock Ex¬
change and New York Curb Ex>
i
change.
is
not, and is under no circumstances to
solicitation of
an
be construed
offer to buy
any
as,
in
and
'•?/
offer is made only by the Prospectus.
ISSUE
$40,000,000
t.
v
ri
■
United States Rubber Company
Twenty-Year 2%% Debentures
Dated
Due
April 1, 1947
April 1, 1967
100%
'tv'
'."•%f
i>
AND ACCRUED INTEREST
relation
1944.
were
billion
1
offer of these
an
of such securities.
corporate
lower
t
1946
Copies of the Prospectus may be obtained in any State only from such of the several Under-
Such
-writers named in the Prospectus
an
and others
as may
lawfully offer these securities in such State.
es¬
Kuhn, Loeb & Co.
resulting
tax reductions and
carry¬
operations.
ac-;
engaged in the securities
business in Harrisburg for a num¬
ft
not
1946 aggregate
$4
been
tively
was
urged in the printed message from
were
HARR1SBURG, (PA.— Pening¬
ton, Colket & Co., of Philadelphia*
'one of the
ever
billion in 1946. But included in
timated
': *
Penington, Colket & Co; ^
Open Harrisburg Office 5^
6,
negotiated.'
The work week for most printers
is
reduced
from
37 V2
to
36 Yz
&
Ira Haupt &
Co. in their trading departments.
Hanson,
Local
;
urged ratification of the contract
Trading
-
f
totaled $9.9 billion in
1944, $9 billion in 1945, and $12
from
•.
the closed shop.
The publishers'
negotiating committee was headed
by C. C. Lane, Assistant Business
Manager
of ' the
New * York
"At yesterday's meeting, in The
Livingston,
301;: Schernierhorn
Street,
Brooklyn,
Laurence
H.
labor
profits
the
y
ratified
,
OFFERING PRICE
ft
year I
labor
costs."
Actually,
such that i
this
in¬
suppliers'
their
were
gain
sentatives last Tuesday after ^18
negotiation sessions. It continues
or
.
might
yesterday had been agreed upon
by Union and publishers' repre¬
slowdowns in protest
against the offers made up to then
by the publishers.
offi- "
Union
.
result
creased
:
pay
stoppages
n
NEW
that
not
disability
v
Mendel Lotsky who said
charge
companies,
many
health,
was
be 'an economic
Its de*
1 i
The
the higher
profits of 1946
due solely to price increases.
prices did
profits but
for
a week; -
I\.
:
further concessions which it could;
not win next year if there should
jobs
and that Wel-
of 1
securities for sale or as a
corporation
were
the
in
and
This advertisement
as
document says
"The basic
statistics do not support Mr. Mur¬
.
of
-
business conditions
newspaper mergers.
Of $15.50 to $21.80
that business distorted small wage
increases
into
big
profits,- the
contention
tion
"The ITU has sought increases
high
Murray's
elimination
pay
further
con¬
^
Phil
of
severance
;
for
get ready now
"Principal objector to ratifica¬
pension provisions had been
rejected by the publishers.
On
April 9 printers in four newspaper
plants staged unauthorized work
management must share
responsibility
Of
the
weeks'
strike
can
for next year.'
shift from $83.50 to
The contract provides also
two
i
A.
Power, Scale
member, speaking in
ratification, said: 'Those;
of
who ; want to
improvements
'lobster'
for
M.
Committee
favor
new scale gives printers on
day shift a weekly wage of
$90, which is an increase of $12.50.
The night shift pay is increased
from $81 a week to $95, and for
dis¬
"•
"William
the
Corporation, $100.
wholesale
today,'
he said.
Vacations will
this
offers
that
it
was the best that could be
ob¬
tained at this time. 'We
recognize
that strikes aren't
popular
be three weeks with pay, a.gain
of one week., /
,
'V;
*
Barrett, who said the con¬
tract was 'not
entirely satisfactory'
to the Union
negotiators,'insisted
this week.
the
'1
f
1
"Mr.
retroactive to April 1,
conditions take effect
The workday for the
day and night shifts is reduced
from 7V2 to
hours, while for
the 'lobster' or early morning shift
office
international air*
on
Elmer Brown.
.Francis G. Bar-|
Committee Chairman,
are
for farm loans as the
RFC provides a secondary mar¬
ket for business loans. It slipped-
tributors
a
"
operations, watch ? the.
than
cial construction
may be removed
than generally expected.
commercial
f
■
City newspaper pub¬
/"Mr.v;Victory,
:
;
contract
market
Aetna
'.3\v" '*•vt I
ft"
Wage Increase
York
Typographical
by the Publishers Association as
agent for publishers of 15 dailies
"Wage increases in the
private lenders. The bill, in ef¬
fect, would provide a secondary
and% Hunter & Co.
totals
#
'
n=
New
Union No
6
(AFL) was
signed April 21 by J. C. Cullen, Chairman of the
Publishers Associa¬
tion of New York
City, and Laurence H. Victory, President of
Local
No. 6.
The agreement, which expires March
31, 1948, provides pay
increases of 16 to 20%, three weeks' paid
vacations and other bene^
fits for 4,000 employees in the<5>
composing rooms of 27 newspa- President,
and
Vice-Presidents
pers in the city.
It was negotiated Larry Taylor and
April 21 stated
Federal
Farm
Mortgage Cor¬
poration to biiy1 veterans' farm
loans
from
banks
and
other
I nf orm at 1
to business transactions in
sooner
tration
for
before the House Commerce Com*-'
mittee. Last Tuesday the Commit¬
For
.
*
;t.;
Martin
'
Or
International
and
rett, Scale
who would be responsible for its and
will be adhered to by pub¬
and Daniel J.
McCauley, former
spending. The Senator says it lishers of 12 other
newspapers not
would help small
business, but represented by the Association. Vice-President, took the floor in
defense of the proposed contract
probably Congress won't concur.
The pact was previously approved
against
several
members
who!
#
#
'*
by membership of the local Union
urged its rejection.
Some speak¬
at a meeting on April 20.
Farm
In dis¬ ers said the
state
legislators
are
social benefits which
cussing terms of the new agree¬ the
wagering the House will accept
negotiators had failed to gain
the Senate bill
ment, the New York "Times" of were
authorizing the
more important than the
pay
be1 treated''C'asr- business
of/
the New York /
o h
will
averages.
'■*'
net
[President
under
and
"The
gleaned therefrom is to be re¬
Bank
finally
he
contract between
one-year
lishers
selected
confidential.
ray's
i)l
what
they have acby ran¬
dom drawing. Individual
quesK'' quired the
corporations
the extension. House acquiescence
will-. follow
shortly. Policies of
/
be
Aetna Securities Corp.
Absorbs Hunter & Go.
profit
on
sheet
1
Legislation extending ExportImport Bank to June 30, 1953, is
to coast through Congress with
:
would
why he wanted it,
ord vote.
representative batch of smaller
ft
OK.
SEC
prices.
*
ease.
tell
wanted,
York,
announce
May 1, ; 1947
Data
Economist Nourse, it may
such
to
Just about all
registrant would be required
000 to $5,000,000, likewise to
copy
al
the
underwriters and
air
basis.
ject
tration statements.
manufacturing corpora¬
tions With bsseiS from $1,000,-
line
Get
Senator
$5,-
all
prosecutions.?
M
of
1947's first quarter. The inquiry
Is also going to three-fourths
"'"/V''
blessing,
assets
loss and balance
and
Truman-appointed, is clamor¬
ing for substitution of trade
practice conferences- for FTC
'Presidential
with
more
you'll shortly
Federal Trade Com¬
tionnaires
pant within FTC itself. Repub¬
lican
Commissioner
M a s o n,
manufacturing
a
corporation
(1) The
Commission. Here's why.
Commission's drive for
"
The
introduced a bill to greatly
shorten and simplify such regis¬
Senate this week
Without the formality of a rec¬
jj:
If
Wanted
.
A
MaCarran
through
on
authority.
Board
serve
a
ventures.
new
21
-
makers to fashion bigger and bet¬
ter machines, and (2) bring rev¬
of
Senator
C
has
have
itol Hill
right back down town again be¬
cause Tobey couldn't lasso k com¬
'
wants to whack off yards of SEC
red tape in registration of issues
chance of blocking the business
chair-/
manned
CPA's
weekly maximum.
Congress the Tobey bill empow¬
ering Federal Reserve Banks to
./
Nevada's
touching
Printers Obtain 16 to 20%
i-.-V
■
r,,v^> f
(2213)
;
Deduction
of
the tax and carry-back
savings
lowers net profits in relation to
April 18, 1947.
-
4
j
THE
Not Be Reduced
Taxes Must
Securities
Salesman's Corner
By JOHN
BUTTON
the Editor
that was
that would be
originally discussed writing this column with
of the "Chronicle" one thing was foremost in our plans and
that an attempt would be made to write about things
! When we
v
practical helpfulness to salesmen who
contacting the investing public.
•difficult to do this.
The limitations of
of
were
out in the field day
At times it has been very
the written word and the
sparseness of our own personal experiences have often made it so.
However, there arc occasions when the desire to grope with a sales
Thursday, April 24, 1947
FINANCIAL CHRONICLE
COMMERCIAL &
(2214)
22
(Continued from page 3)
would bring about any signifi¬
cant increase in production, nor
do I believe that a tax reduction
is necessary at this time to assure
continued high-level production.
The rapid and sustained growth
of
employment
and
output
achieved in 1946 and the early
exemption is subject to
great num¬
the limitation that persons qual¬
problems
have been accumulating. More¬ ifying for it must include in their
gross income for tax purposes the
over, much interest has developed
first $500 received from certain
in a series of fundamental tax
types of periodic pension or re¬
problems. The problems to which
technical
of
ber
additional
finance, a
ters of war
tax
tirement annuity
refer are not solely, or even
primarily, ones of tax rates. They
relate
rather to tax structure.
These problems now need careful
I
benefits that are
fully exempt from taxation,
is estimated that this addi¬
now
It
tional
exemption
would
reduce
accomplished
the income tax of 2.8 million per¬
consideration, especially in view
with present tax
rates. During
sons over 65, of whom 825 thou-i
of the high level of current and
that period, millions of demobil¬
sand would be made non-taxable.
prospective revenue requirements.
ized veiterans found civilian jobs,
It
is estimated
that the bill
Although I do not believe that
and there was a rapid increase in
problem that is common to everyone engaged in retailing
would reduce tax liabilities by
the time has yet come for revi¬
becomes more than something to write about for another week. Such the number of new small business
sions involving major tax reduc¬ $3,769 million for a full year.
sales problems are a challenge to all of us and their solution means firms. Business as a whole is now
This is $280 million more than the
tions, it is not too early to begin
money in the bank.
operating virtually at capacity.
studies of desirable tax changes original bill. Of the total reduc¬
To be specific, most investment firms have one problem in com¬
Production
is
now
limited by
tion in liabilities $3,624 million
to take effect at a later date. The
mon todav.
If we can find ways and means to overcome the sales shortages of ^materials and labor
would be attributable to rate re¬
resistance'whi^h has been built up against the purchase of securities rather than by lack of venture Treasury Department has been ductions and, $145 million to the
Studying a large numbers of im¬
due to declining markets, then we have somethng that eari be of
capital or markets. All of these
increase in exemptions for tax¬
tical advantage to us.
There are very few retail organizations today facts are evidence of the vigor portant tax problems, working on
payers over 65.2 .
• <
,
*'
1
that do not have this same problem.
Customers have paper losses, and adaptability of our free en¬ many of them in close collabora¬
Since H.R. 1 is retroactive to
.some of them very sizable ones too.
Public psychology has defin¬ terprise system. Employment and tion with the staff of the Joint Jan. 1, 1947, its enactment wouldl
Committee on Internal Revenue
itely turned against making commitments in securities at this time. output will undoubtedly rise still
Taxation.
The
Treasury
stands reduce receipts in the fiscal year
The old "bear market" problem is here again. We've had our feast higher
in the future with.the
1948 by more than the amount of
ready to assist the Congress in
and now we are back in the famine for a while. Some salesmen don't normal growth of the economy.
one year's reduction in tax liabil¬
any way possible....
■even call on their old customers.
This is certainly wrong.
ities and would also necessitate ai
Inflationary pressures have still
In anticipation of later tax re¬
One partner in a member firm said the other day, "My salesmen not subsided. Prices and produc¬
ductions, we should review the large amount of additional- tax
are afraid to go out and see their customers when they look at the
tion have not yet fully adjusted
whole tax system. We should re¬ refunds. It is estimated that the
losses they have." Sales volume is down and the pessimism is con¬ to one another. So long as infla¬
examine not only the individual House bill would reduce receipts
tagious. In the securities business, we are surrounded with emotion¬ tionary pressures exist, there is income tax, but also the corpora¬ in the fiscal year i.948 by $3,994
alism. Strange as it may seem, ours is far from a factual or scientific good economic reason for main¬
million. It would increase refunds
tion income tax, excise taxes, and
business. When the skies are sunny and the birds are singing, there taining high taxes. If we should
estate and gift taxes. Such a com¬ by $751 million. In considering
are smiles in Wall Street; but when the losses are piling up and the
cut taxes prematurely, we could
the effect of H.R. 1 on the budget
prehensive review should aim at
news
is unfavorable, those who are selling investments tag right easily contribute to further price
1948, it .is
revisions that will fit all major for the fiscal year
along. Licking a depression, whether it be short or long (and that is rises and to economic instability.
taxes together into a system that necessary to combine the. decrease
what a bear market means in the securities business) is not some¬ If we cut taxes too soon we shall
will produce adequate revenue, in receipts of $3,994 million witli
thing that can be done by using a simple formula.
Those who have probably find it impossible to re? will be fair and equitable, will the increase ' iii. expenditures;- of
overcome previous periods of dull business would probably say that
verse
our
action, On the other
interfere as little as possible with $751 million for additional re-f
it takes a combination of sound planning and diligent execution hand, it will be-time enough? to
incentives to work and invest, and funds. H.R. 1 would weaken the
to do so. For what it is worth, here's a few things we are doing today: cut taxes when it becomes clear
budget for,-the fiscal year 1948
after day
months of 1947 was
securities
We're sticking to sound fundamentals. That means working,
But there are many ways to work. Intelligent selling
consists of more than seeing as many prospects as possible in a day.
It is better to call on a few customers and know what you are doing.
(1)
that
not loafing.
such ac¬
conditions call for
tion.
In this business, you don't sell securi¬
ties, you sell IDEAS. Do you want ideas?
There is only one way to
get them. THINK ABOUT YOUR BUSINESS.-Do.you know people
who are still inflation-minded?; Will the price of gold be raised some
day?
Is there a convertible preferred stock or a bond that has be¬
come attractive due to recent market conditions?
Is it possible that
the lower prices go, the better become the values?
Doesn't the public
always go to extremes?
Is there a local stock in your community
that enjoys a broad stockholder interest?
If so, why not visit the
management and arrange to write an up-to-date analysis and offer
it to the stockholders and others why may be interested.
Or pick out
five blue chip investment stocks that have paid dividends for 25 years
and advertise them, \Today's income returns should be something
you could become enthused about yourself.
There are probably a
hundred more ideas that you could put down on paper that are better
than these.
Why not get one that YOU LIKE and try it?
We are using IDEAS.
(2)
:
We're in this business to stay—because we like it.
This means that we take the bitter
(3)
Nothing
with the
Some people say this is one business where you never can
build up anything.
Other have said when markets are on the way
up, any chump can make money, but when they go down, we all look
Budgetary Situation
The current
make it difficult or
adopt many needed changes at a
the fiscal later time. Many such funda¬
mental tax revisions will involve
year 1947. If the taxes are not re¬
duced we shall also be able to substantial revenue reduction. If
achieve a budgetary surplus; in we now make a major reduction
the fiscal year 1948. It is by no along the lines of H.R. 1, we may
means
clear, however, that the later find that we are not able to
surplus in the fiscal year 1948 will adopt many of the basic revisions
exceed the
amount foreseen in in the individual income tax and
the President's budget, except for the other taxes that are necessary
budgetary surplus for
the effect of the
tax
we
always have to be "bulls" in this business, even when
Maybe all these things are true, but this also
And no one ever
confidence in themselves was
unshakable.
So keeping your chin up is also a real asset, and one
way to do it is to remember that BEAR MARKETS DON'T LAST
is true, other lines
made
a success
of business have other troubles.
of anything unless their
FOREVER EITHER.
-
(4)
*
We're also sleeping good at night.
Airline Foods
It helps!
Corporation—Common
Under
rates.
are
Or
subsequent adop¬
the Congress of the Presi¬
dent's recommendation for exten¬
sion of the so-called war excise
for
a
to
existing
for the fiscal year
estimated at $38.8 billion.
law,
1948
The
1
specific
examination of H.R. 1, as passed
budget puts expen¬
ditures for the fiscal year 1948 at
President's
I
turn
now
to
a
more
by the House. For the use of
Committee, I have appended
some
inequities iry
reduction measure',
Although the bill has been some?
what modified since it was orig^
sound postwar tax system.
Specific Discussion of H.R.
point, to
H.R. 1 as a tax
tion by
revenues
should be "bears."
problems, we shall
impossible to
ation of other
existing taxes. I am gratified.that
the
latest
estimates indicate a
sweet. |
we
markets
•
productiojo;.
.
......
!. by $4,745 million, -v
As I have already said,-I do
There is danger that if we act.,
not believe that a tax reduction
prematurely
by
reducing
the.
rates of one tax, without consider¬ is now appropriate. I now wish
for mass
also calls for the
is easy all the time.
alike.
budgetary situation
maintenance of
will help maintain mass
the
to
introduced, it
inally
would, still
relatively too little taxi
reduction for low and middle in-»
comes as compared with high in¬
comes. As I said to the Ways and
Means Committee, it seems to me:
that if a 1947 tax bill has any
place at all in the management of
our financial affairs, it should airn
primarily at bringing relief to;
taxpayers who have borne extra¬
ordinarily heavy burdens during
the war and postwar transition*
years and should give considera¬
tion to inequities. I do not believe
that
H.R.
1 accomplishes these
provide
statement several
exhibits objectives.
and an appendix. This material
H.R. 1 would not reduce taxe$
$37.5 billion. A Conference Com¬ includes a variety of statistical
in
the
same
way
that we in¬
mittee of the House and Senate is
data on the composition of the
creased them during the war. This
still considering various legisla¬
individual income tax base and
can be clearly seen in Exhibit 2,
tive budget estimates of expendi¬
other information that I believe
which compares taxes at different
tures. We still do not have any
will be helpful in your considera¬
net incomes under the 1939 law*
clear evidence that expenditures
tion of H.R. 1 and other proposals
in the coming fiscal year can. be
present law, and H.R. 1. To illus¬
for tax reduction.
reduced
below
the
President's
trate,
H.R.
1
would eliminate,
H.R. 1 includes a general reduc¬
22%
of the difference between
budget figures of $37.5 billion. In tion
of
individual
income tax
present taxes and 1939 taxes for
my opinion^ it would be unwise
rates and a special additional ex¬
a married person with no depen¬
to
reduce
the revenues before
emption for taxpayers over 65
dents and a net income of $5,000,
we have a
clear picture of what
years of age. It would reduce the
But at a net income of $1,000,000,
expenditures will be authorized. income tax
by 30% for taxpayers
the bill would wipe out 69% of
whose net income
in excess of
the tax increase since 1939. Taxes
Public Debt
exemptions is $1,000 or less, and
at the $5,000 level would still be
We have emerged from the war
by an amount which under the
eight times as high as in 1939, but
and immediate transition period
notch provision would rapidly fall
at the $1,000,000, taxes would be.
with a public debt of approxi¬ to 20% at a net income of $1,396
only a little higher than in 1939^
mately $258 billion. The size of after exemptions. For net income
H.R. 1 would reduce taxes on very :
the^ debt is a strong argument after exemptions between $1,396 high incomes to a level only sr
against a tax reduction at this and about $302,400, the reductions
little higher than that before the'
time. Under present conditions, I would be 20%. For higher incomes
war.
It
would leave taxes:,on
believe it will be sound financial the
reduction would gradually
lower and middle incomes much
policy to achieve as large a budg¬ taper off to 10.5% above $5,000,higher than before the war.
et
possible and to
my
,
*Denman Tire & Rubber Co.—Common
*Prospectus
request
on
Herrick, Waddell & Co., Inc.
55
LIBERTY STREET, NEW YORK
5, N. Y.
is
surplus against the
public debt. When national in¬
come is
high, as it now is, it is
surplus
apply
American Fruit Growers Inc., Com.
Arden Farms Co.,
Pfd. & Com.
*
prudent to, reduce the public debt
as rapidly as possible. The present
situation gives us an opportunity
to make further reduction in the
debt.
Fullerton Oil Co., Com.
Wagenseller 8
626
Los
Angeles Stock Exchange
SO; SPRING
'
TRINITY
ST.
LOS ^ANGELES
Teletype:
LA
that
we
should
prove
our
find it desirable to post¬
temporarily further debt re¬
years we
5761
pone
14
tirement.
68
Market Quotations and Information on all California
believe
I
determination to
retire public debt by making as
big a payment on it as we can. If.
we do so, there will be less cause
for
concern
if in some future
now
Members
as
tha(t
.
During :recent years,
Securities
tention
almost
JI
I
when atr
,
devoted
exclusively to urgent; mat¬
was
necessarily
rate reductions in the
bill are identical with,
The
000.
amended
bill for all
taxable net incomes in excess of
$1,396. Only about 1,100 taxpayers
in
those
the original
get less than a
would
reduction. About 14.4
20% rate
million tax¬
payers would get a 20% rate re¬
duction. About 8.5 million would
get between 20 and 30%. The re¬
maining 24.8 million
taxpayers
would get k 30 % rate reduction.'
H.R.
1 grants a special addi¬
modifications
Despite
at both
and upper extremes,.
H.R. 1 still provides in the main
a
flat percentage cut in present"
lower
the
taxes. Of
the $3,769
million
to
lion is
attributable to the 30% re¬
duction, $520 million to the notch
area
of 20-30% reduction, $118
million to the 10V2-20% reduc¬
.
tional exemption of
over
sons
65
years
$500 to per¬
of age.1 This
tion, and
$145 million to
$1,000
over
case
of joint returns, the
additional exemption ^jwould be
where both husband arm wife are
the
65 and
income.
each has $500 or more gross
the ex¬
emption for persons over 65.
"So far as I know, a flat
'
;
"
centage cut
1 Jn
special
.J
reduc4-
$2,262 million is attributable^
the 20% reduction, $724 mil¬
tion,
taxes
has
in individual
been made
2 Estimates
of
tax
per¬
income
only twice
liabilities
for th®
p/olurne 163 '> Number 4588
L.
[THE COMMERCIAL & FINANCIAL CHRONICLE
(2215)'
_____
before in the history of the Fed¬
eral income tax. The first
in the
Was
Revenue
applicable to
act
made
flat
a
rates
1924,
That
25%
reduction,
greater and
lower- incomes
were
on
much
of
incomes.
1923
but exemptions
Act
time
less
were
than
under
law. The second time
present
tentative
rate,
aged
involving the partial inclusion of
income
"notch"
for the
tax, the
provision
the:
and
would
excluded
now
be
of
one
five
Mexican
stu¬
uated there in
1923
with
to "
Bank's
Support of Eccles' Credit Policy
many
written
has
taxpayers.
come
Schram Protests New York Reserve
A.B.
an
taxpayers: degree and a Phi Beta Kappa
There would be an increase iiv key: He is an authority in Mexico
refunds, particularly for low in¬ on Applied political science and
confusing
flat per¬
a
is
and
dents who accepted scholarships at
the University of Texas. He grad¬
and
lectured
Emil
Schram,
astonishment
expresses
be enacted. It would make reduc¬ General of National
fense
portant
tion in revenues of almost $4 bil¬
der
Federal
lion
retary
differences
1945 Act and the
between
kind
of
the
reduc¬
tion proposed in H.R. 1. The
cut
under
1945
the
Revenue
5%
Act
of
was
only one of three im¬
portant changes in the individual
income tax.
than
It accounted
one-fourth
of
the
for less
total
re¬
duction of the individual income
In my
opinion, H.R. 1 should not
necessitate
and
increase
been
vice for
in the
government
On
April 16, 1947, following the release of the Annual Report
of the Federal Reserve Bank of New
York, which contained a de¬
ser¬
time, being Director
Statistics, Un¬
some
$^ecretary of State, Under Sec¬
of
the
Treasury and now
in
expenditures of $751 million Secretary of the Treasury. He was
for tax refunds at a time when the manager of President Aleman's
a
balanced budget and substan¬ campaign and is without question
an
flat
reduction
would
re¬
17
Would
of
amount
give
5.9%
a
revenue,
reduction
in
85%
bracket rate, and a 25%
reduction in a 20% bracket rate.
An across-the-board percentage
an
Cut of the type in H.R. 1 decreases
the progressivity of the income
fax.
(
The
$500-special tax exemption
over 65 years of age
for persons
included in
fo
the
H.R.
special
is
1
addressed
problem
of
one
group. The bill as amended would
without any present1 basic reason,
continued to rule, in effect, that
N.
the
and
all
present
tax
present
size
of
the public
maintaining
in
itself
4
is sound America.
The social program of the con¬
achieve as
as possible. The vention was outstanding, with the
will
continue to Texas Group being guests of the
Marriner
Eccles
rates in
conditions,
1947.
Under
large
a
policy
surplus
Administration
it
to
fiscal
1948 to the lowest level pos¬
expenditures for the
year
sible in view of
industry
our
national, ob¬
famous
Brewery, makers of
Bohemia
Carta
and
beer
(two
months
ago
"Time" Magazine's article on Mon¬
Blanca
Spring Group
Meeting in Mexico /
spring meeting of the Texas
The
fully
tax-exempt, p. m. on April 8th and arrived ip
security old-age Monterrey at 7:00 a. m. the next
benefits, railroad retirement morning.
-re¬
convention headquarters were
benefits, and retirement pay of
^rrned forces personnel retired for at the Casino de Monterrey, elite
disability. This modification is a social plub of the above city..Ho¬
(pomplication Of the original pro- tels Gran Ancira, Colonial, Mon¬
Vision, which does not meet the terrey and Bermuda provided 150
fudamental objections to such a rooms for the guests.
Elmer A. Dittmar, President of
Special exemption. I do not be¬
lieve that exclusions of particular Dittmar & Co., San Antonio, Tex.,
kinds of income from the tax spoke
on
"Considerations
for
base are an appropriate means of American Investment Banking Ac¬
bringing relief
to special groups.
Ways
I
told
the
Committee, I
tension
from
the
base.. I
present
individual
do
ex¬
exclusions
income
believe
not
Means
opposed to
am
of
and
tax
that
it
Would be fair to increase income
Monterrey
were
in attendance at
this party which gave atmosphere
exemptions for persons over
65 years of age and not for simi¬
which
tax
will
be
essential
is
reduction
when
securities business from offices at
2619
Davidson
a
Hot
treated
that
:
....
will
in
need
H.R.
to
1.
be
In
Subjects
considered
w.
include
the
taxation
of
dividend
forms of business, loss carrybacks
carryforwards,
treatment
of
depreciation,
family income,
M.
J.
This is under
to
O.
Monasterio, President
of the Credito Internacional, S. A.,
Mexico
)
Enactment
of
H.R.
1
gave an excellent ad¬
"Joint Financing by Mex¬
tax
and
costs.
the
It
increase
would
administrative
cancel
a
part
great progress that has
made
in
recent
'
years
of
been
toward
simplification of tax, forms.
The
different rates of reduction from
no
text
of
Mr<, Schram's
"I
least,
astonished, to
that the Federal
Bank
of
am
serve
New
York
had
on
on
ican
and
the
Reserve
should
John H. Jackson With
asso¬
CHICAGO, ILL.—John H. Jack¬
has
son
Lee
become
associated
Corporation, 231
South La Salle Street, in the mu¬
nicipal department. Mr. Jackson,
both before and after serving in
the
Bank of New York carefully
forces
armed
was
connected
with the Chicago office of
man.
jn this Bank's report, just
issued, relating to the denial of
the same credit privileges to the
securities of listed companies that
pears
are
available to
John D. Hiltbrand to
the securities of
John
that
Board
of
Governors
of the
a
D. Hiltbrand will become
partntsr in
Wall
Grimm
New
Strefet,
&
Co.,
City,
the Nbw York Stock
Exchange.
Mr.
t
Hiltbrand
the
research
ment.
and
Prior thereto he
as an
was
i
offer
The offer is
$10,000,000
Kingdom of Norway
Interest
Fund External Loan Bonds
Uue April 1,1957
payable April 1 and October 1
Price 98V2% and accrued interest
exception, all who heard
of
conditions
in
both
covered
Copies of the Offering Prospectus may be
courage in the way
certain controversial
such of the
convention
our
guest
Kuhn, Loeb & Co.
Harriman Ripley & Co.
Minister
teta,
of
Finance
Republic of Mexico.
of his
full
address, which
in
the
of April
17th;
was
Foreign
Mr.
the
Lazard Freres & Co. Smith, Barney & Co.
Blyth & Co., Inc.
Dominion Securities Corporation
Eastman, Dillon & Co.
Kidder, Peabody & Co.
was
given in
"The Mexican
Investments in
Mexico."
Estabrook & Co.
Hallgarten & Co.
Toward
a
Ladenburg, Thalmann & Co.
Chronicle"
Attitude
Beteta is
Drexel & Co.
The subject
"Financial
Government's
of
of the respective States.
Incorporated
Ramon Be-
was
obtained from only
legally offer these Bonds in
as may
compliance with the securities laws
points from an international stand¬
point, and his sincerity of purpose
in making such an address. :
The principal speaker and
undersigned
April 24, 1947.
citizen of Mexico
9
/
of
buying depart- *
Amott, Baker & Co., Inc.
construed as an offering of these Bonds for sale, or
April 1,1947
has
been with the firm in charge
solicitation of an offer to buy, any of such Bonds.
made only by means of the Offering Prospectus.
Ten Year 3V2% Sinking
44
York
members of
Fed¬
System authority to
^
Be Grimm Co. Partner
other
New Issue
countries, his
Harri-
Ripley <& Co.
his speech were impressed by his
knowledge
with
Higginson
Bank & Trust Co. in St.
Without
ff
LeeiHigginson Corp.
or as a
Dated
of
say
American
dent of the Mercantile Commerce
that
forms
other
property. These are the securities
with respect to which the public
can get fullest information through
the disclosure requirements of the
exchanges themselves and of the
Securities Exchange Act."
examine the statement which ap¬
circumstances to be
buy,
,
would
full
owns the securities
managed and most
City,
dress
of
complicate the individual income
The
tivity in Mexico." This speech ap¬
elsewhere in today's issue of
the "Chronicle."
ex¬
emptions and other matters.
of
use
statement follows:
pears
income, tax treatment of different he
and
policy to
credit to listed securities.
eral Reserve
Avenue.
Louis, and
a
tax
reduction
program,
the only the latter part of 1946 re¬
Whole problem of incentives and turned to his native country and
markets merit broad and careful assumed his present position. With
consideration. The problem is not his native background of his coun¬
merely one of individual income try, and With the wide experience
tax rates. It includes other phases in the banking business in this
©f the tax system and many fea¬ country, Mr. Monasterio was very
tures of the individual income tax well qualified to cover the subject.
appropriate.
his
in the
the
in
accommodation
credit
be
can
companies. I cannot believe
they
would
approve
the
of
fifty-seven. Mr. Rutter had gratuitous discrimination against
such securities that is taking place.
been •- associated
with
Abbott,
"It is very easy to attract a cer¬
Proctor & Paine until 1940.
tain type of applause by appearing
to be tough with the stock mar¬
ket.
There is, however, a prin¬
.Paul Wintner Opens
ciple involved that goes much
r Paul Wintner is
engaging in the
deeper. The Congress gave to the
vestment broker, died at the age
Banking
Groups of Industrial Projects in
Mexico." Mr. Monasterio, although
larly situated persons under 65.
H.R. 1 is not only deficient from a native and citizen of Mexico,
the standpoint of equity. It is has lived in the United States for
not the well-balanced approach to the past 32 years and was in the
the important problem of main¬ banking business in this country.
taining incentives and markets, He most recently was Vice-Presi¬
fax
in
confine restrictions
level
enterprises, listed on
exchanges, may not get the
same
should
Chairman
Texas IBA
social
As
Bank
with
terrey stated that - his beer was ciate itself with Marriner Eccles
probably the finest in the world) in his perfectly absurd effort to
that is likely to be realized in for a typical Mexican luncheon in
justify the gross discrimination
1948 could best be applied to the the gardens of this brewery. The that
is being practiced against mil¬
reduction of the public debt.
evening dinner dance was held at lions of American citizens who
v
the
Casino
de
Monterrey with own the securities listed on our
outstanding Mexico City stage and securities exchanges.
radio stars as entertainers. Many
"I would like to suggest that the
of the leading social figures from stockholders of the Federal Re¬
now
as
Reserve
who
best
our
our
ligations and public needs.:! am
sure, however,
that any surplus
\'i
Such
York
lowest
successful
ment that the
associate
the
securities, the Board has,
person
of
astonish¬
ing
New
banking
a
is¬
state¬
a
ment express¬
Emit Schram
investment
for
Stock
Y.
about
to listed
the
of
sued
formation readily available to the
call
securi¬
r o
Exchange,
conditions and will make this in¬
partially offset the additional ex-/Group of the Investment Bankers and local color.
emption by the requirement that Association was held in Monterrey,
taxpayers include in their gross April 9-12th.
A deluxe special
N. E. C. Rutter Dead *
fncome the first $500 of certain train
provided by the " Missouri
Pacific left San Antonio at ♦ 6:30
types of pension and retirement
N. Edward C. Rutter, retired in¬
Income
Ec¬
ident,
the
same
Chairman
pointed out in January of
1947, the volume of such credit is
at
ment
tax rate, which would lose about
such excessive
last 30 years.
••
v;V.-'-;V
While the Board's power to re¬
strict the use of credit is confined
age -point
the
no
As
nicle,"
April 17, 1947,
page 9), Emil
Schram, Pres¬
listed
1 would make later well-balanced
Cuauhtemoc
sur¬
credit.
ties (see "The
make every effort to hold govern¬
each
cles
of
C h
financial
in
of credit
securities.
Mexico'.
percentage points
in an 85% rate bracket, but only
4 percentage points in a 20% rate
bracket. In contrast, a 5 percent¬
reduction
There has been
use
use
of
considered the "number two" po¬
figure in the Republic of
By concentrating
large reduction in one tax, H.R.
debt
rates
carrying
litical
tial debt reduction should be our
ties,
20%
the
a
reduction of
A
for
first objective.
Existing tax rates and
duce
prevent the excessive
Board's
gin trading in
fuction of 3 percentage points in
a uniform
certain number of
Re¬
policy of re¬
strictive mar¬
,
a
the3>
of
serve
During the convention, a meet¬
tax. The remaining three-fourths tax revision more difficult, and ing was held with Mr. Beteta and
of the 1945 reduction was made
perhaps impossible. H.R. 1 would 15 or 20 leading bankers from
|n the form of an increase in the not be an equitable tax reduction. Mexico City and the United States
normal-tax exemptions and a re- It would
unnecessarily complicate with the definite idea of a joint'
committee being formed to first
the individual income tax."
ach surtax bracket,
In conclusion, I wish to repeat study all of the Mexican laws and
i
There is a significant difference
that, in my judgment, economic regulations regarding foreign cap¬
between a flat percentage cut in
conditions, budgetary uncertain¬ ital,: and also existing economic
percentage points in each bracket.
should
against holders
,
centage cut in taxes was made
Was -in the Revenue Act of 1945.
But I want to emphasize the im¬
has
institution
of listed securities.
sively :on this subject. Mr. Beteta
Conclusion
that
associate itself with absurd effort to discriminate
exten¬
23
with
v.
.
THE COMMERCIAL &
(2216)
4
of
production is now 71% great¬
than it was in 1929.
This is
trial
these
many
some
were
Truman Urges
Reduce Prices,
except their government, to
lowed by wage earners and their
actual physical volume.
It is not speak for them.
leaders.
In addition to this human aspect,
dollar value.
'
Some
moderate wage adjust¬
oreign policy are examples of the
The physical volume of agri¬ it is a dangerous economic fallacy
inest effort of a free, responsible
ments have already been made
cultural production is now 32% to say that prices are not too high,
ress.
Without; abandoning con¬
this year—peacefully. Some others
simply because. people are still
tractive criticism, the press, with greater.
may be expected.
Price adjust¬
A bridge designed to
Civilian
employment is now buying.
rare
ments
and
exceptions, has carried the
wage
adjustments
carry 10 fons is not safe with 15
10 million greater.
V
"acts fully and fairly tp the Amer¬
have been the traditional method
Our national income—including tons on it even though it has not
ican people, so that they could be
of sustaining mass buying power
individuals and corporations—is yet begun to cave in. The excess
the judge.
and
sharing the benefits of our
now
running at an annual rate weight must be taken off the
We are now at a stage in our
increasing wealth.
In our im¬
of 176 billion dollars, contrasted bridge in time. When it begins to
national economic life when the
mensely productive economy, fair
with
only 83 billion dollars in crack, it is too late.
American press can render sim¬
prices and good wages are the
There is one sure formula for
1929.
ilar service.
earmarks of American prosperity.
Now,
what have these great bringing on a recession or a de¬
The manner in which the Amer¬
To wage earners and their lead¬
pression. That is to maintain ex¬
ican press makes clear to our citi¬ gains since 1929 meant to all of us?
ers I repeat my counsel of mod¬
high
prices.
Buying
In 1929 the average income of cessively
zens the problems that we face in
eration.
individuals in this country was stops;
production drops; unem¬
maintaining our prosperity—and
But it does not require much
after taxes.
Today it is ployment sets in; prices collapse;
the reasons why it is essential to $654,
foresight to see that? if the cost
profits vanish; businessmen fail..
$1,090, after taxes.' Expressed in
advance that prosperity—can help
of living does not come down, the
That formula was tried after the
determine the future welfare of dollars of equal purchasing power,
size of wage demands might be
the increase has been from $825 first World War. And we paid for
every family in the United States.
magnified. Peaceful managementin
1929* to
$1,090 today.
This it. Between 1920 and 1921 annual
We
all
want
continued « and
labor relations would be jeopar¬
national income fell by $18 billion.
ever-increasing prosperity. It is a means, on the average, for every
dized.
Bitterness and strife would
man,
woman
and child in the Industrial production dropped become harder to avert.
simple, normal, human desire to
23%. Unemployment increased by
want to improve the standards of country an increase of 32% in the
This is another reason—and a
more
than 4 million.
Business
living for all our people*
The power to buy goods and services
most compelling one—for bringing
failures more than doubled. Farm
desire for better living conditions with current income. This is the
prices and the cost of living down.
losses were appalling.
is not the only reason, however, measure of the rise in our stand¬
This will help wage negotiations
We must not choose that for¬
ard of living in less than one gen¬
why continued prosperity in this
to proceed toward peaceful ad¬
mula again.
eration.
country is essential.
If we are to avoid a recession justments beneficial to all. An¬
This is not a record of war pro¬
We know that the freedom and
other
important contribution in
we must act before it starts.
integrity of the United States are duction. It is an unparalleled rec¬
bringing about lower prices is
Prices must be brought down.
ord for peacetime goods and ser¬
safe only in a world of free peo¬
increased productivity on the part
ples living at peace with their vices, devoted to the needs and
of labor. Higher productivity re¬
What Lower Prices Will Do
enjoyments of the American peo¬
neighbors and engaging in free
sults in greater production, which
I speak first to those business¬
ple.
and friendly commerce. Hence, it
in turn leads to lower prices to
men
who have it within their
Economic Skies Not Clear
is our policy to aid the free peo¬
the public.
But I must say in all frankness power to reduce their prices.
ples^ of the world in their efforts
After war and postwar inflation,
Price reductions will bring more
to maintain their freedom.
that "the economic skies are not
it is difficult to find solutions fair
prosperity and profits in the long
Many of these peoples are con¬ entirely clear. One cloud is sha¬
to the consumer, fair to the work¬
run.
Lower prices will sustain
fronted with the choice between dowing our economic future.
er, and fair to business. Employ¬
and further increase the present
er
one,
.
and
democracy.
That
is
cloud
by
caused
the
It should then be ex¬
proper.
tended first to those who need
relief most.
Additional weapons which the
government possesses in its fight
against inflation are rent control,
export controls and credit control.
Rent control is
,
totalitarianism
1947
moderate wage increases nual interest obligation of the
justified by economic or government and also tends to
check inflationary forces.
When
equitable considerations.
Since then this counsel of mod¬ we are over the hump of inflation,
millions have no
eration has generally been fol¬ tax reduction will be feasible and
that
(Continued from first page)
ts treatment of the recent war
nd its discussion of our present
Thursday, April 24,
FINANCIAL CHRONICLE
vitally necessary
costs are lower
until construction
present acute housing
shortage has eased.
Export controls must be main¬
tained
to avoid price increases
and
the
arising from
uncontrolled foreign
purchases in this country.
Credit control cannot be relaxed
high that
must go into debt
to make both ends meet. Making
more
money available on easier
credit terms would only enable
people to go into debt at a faster
rate. Over-extension of credit to
support over-extension of prices is
fuel on the inflationary fires.
It
would help no one in the long run.
It is in the tradition of "boom and
bust." The government should re¬
tain and use its measures for wise
so
long as prices are so
many consumers
credit
control.
Situation
Acute
The economic
have
cussed
policies here dis¬
been ■* devised
not
hastily to meet a situation
has
them
for
policies is
by the acute sit¬
existing today.
uation
A,
months.
many
The reiteration of these
made necessary
which
I have been
just appeared.
urging
responsibility of preserving'
our
free enterprise system will
continue to rest upon the joint ef¬
forts of business, labor, the .far-*
The
ers
and workers must both give
high volume of sales and stimulate
to
this task
all their energies,
greater production.
This nation
mers, and government.
them by the devastation of war
Some say this cloud is certain
good will, and understanding of
will grow only through ^increased
There must be moderation on
Which has so impoverished them to burst. They are sure of a re¬
their country's best interests.
productivity and more and more
the part of business, forebearance
that they are easy targets for ex¬ cession or a depression.
I do not
production. Higher prices for the
on the part of labor, all-out effort
Food Prices
ternal pressures and alien ideol¬ share their belief that either of
same
amount of goods will lead
on
the part of the farmer; and
these is inevitable.
ogies.
•
In considering the high cost of
to an artificially-inflated
wise guidance and action on the
I believe that we, as a nation, only
By providing economic assist¬
living we must also examine pre¬
economy, not a sound economy.
ance, by aidingJn the tasks of re¬ can prevent this economic cloud¬
vailing food prices. The phenom¬ part of government.
Present business conditions per¬
There must be unity of effort
construction
and
rehabilitation, burst.
But it requires prompt,
enal
world
demands for farm
mit—in fact, they require—lower
and a willingness to cooperate in
we can enable these countries to
preventive steps.
'
products is maintaining farm
the achievements of our goal of
withstand the forces which so di¬
Price increases have been felt prices in many important fields.
prices at present levels. The un¬
Profits ' in
the. aggregate are
a strong, stable economy.
rectly threaten their way of life bjr every American family. No
precedented purchasing power of
all records although
The men and women here to¬
and, ultimately, our own well- One needs to tell them how much breaking
our own people and, the needs of
profit margins vary greatly in in¬
being. But we can provide the the? cost of living has increased!
war-devastated countries abroad day, and the rest of the press of!
dividual chses. In 1946 corporate
the nation, have a great oppor¬
necessary assistance only if we
House furnishings, for example,
have combined to force farm prod¬
were 33%
ourselves remain prosperous.
have gone up 23% above the 1945 profits, "after taxes,
ucts upward. The government pol¬ tunity for service at this time. Not
higher than in 1945.'. In the first
only must the facts be presented,
average.
•'
"
/ • • '
icy' of supporting farm prices at
An Example to Free Peoples :
but there must be brought home
quarter of 1947 they ran even
90% of parity is not the cause.
Clothing has gone up 24%. >'
higher; These figures are total
to our people the seriousness of
Food has risen 31%.
And only if we maintain and
Of v the major food commodities,
the issue and the need for united
figures and do not, of course, ap¬
increase our prosperity can we ex¬
Only rent, because it, is under
pbtatoei arqthe only crop currenteffort for the good of all, rather
ply: to every. industry ;prI'eirery
pect other countries to recognize rent control, has remained prac¬
ly being given governrnent support.
business,
than separate effort for the benefit
|g j;
the full merits of 'a free economy. tically stable.
The support price^ of wheat', for
of any group. '
I do not have to name the par¬
Even more dangerous than the
We know that our system of pri¬
example, is*$1 .'82 a bushel, while
I take comfort in the knowledge
vate competitive enterprise has rise in retail prices is the sharp ticular industries or the particular wheat is currently selling at about
that the press of this country will
The men- who run
produced the highest standard of rise in wholesale prices since 1945. businesses.
$2.50 a. bushel. The support price
accept this opportunity for serviee
them know exactly which are in¬ of
living the world has ever seen. By Here are examples:
hogs is $14.94 per hundred
in the same high spirit with which
cluded and which are not.
Textiles—up 39%.
steadily raising this standard, we
pounds. The recent price has been
it has always served this nation.
Farm products—up 40%.
cah demonstrate to all other na¬
around $25.00.
Responsibility on Private
tions the vitality and superiority
Building materials—up 51%.
Let me repeat: the government
Enterprise
of $ free economy. Our system of
Food—up 53%.
policy of supporting farm prices
Our private enterprise system
Excessive wholesale prices are
private enterprise is now being
is not the cause of the prevailing
responsibility for
tested before the world. If we can translated inevitably into higher now has the
high food prices.
prove j that it is more • productive retail prices.
With higher and prices. During the war the gov^
Without the support program,
and more stable, more generous higher retail prices, families can ernment shared that responsibility
Walter F. Wilson has been ad¬
and more just than any other eco¬ buy less and less. Thus, excessive through the mechanism of price farmers, mindful of the disastrous
mitted to the firm of Charles King
control.
In the spring of 1946 I farm collapse shortly after World
nomic system, we shall have won wholesale prices are hitting at the
& Co., members of the Toronto
War I, would not have planted
the test.
*
foundation of our prosperity, for strongly recommended the contin¬
Stock Exchange.
Mr. Wilson will
uation of price control so that we their tremendous recent crops. The
But if we ignore the needs and we can be prosperous only when
be resident partner in the Toronto
would have been
could
attain an orderly with¬ consequence
shirk the responsibilities of our business activity is at its maxi¬
office in the Royal Bank Building.
drawal from control of prices as smaller acreage, greater excess of
mum.
Mr. Wilson was formerly a part¬
economy, we shall lose both our
Prices Too High
'
V
supply approached demand.
A demand over supply, and prices ner in Wilson, Tovell & Co.
power to help others and our ca¬
much higher than they are now.
group saw fit to sabotage price
There are some who say that
pacity to inspire others. Economic
to the Because of the support program,
trouble in the United States would prices are not too high, so long control and represented
the consumer is better off and the
public that prices would come
provide agitators with the oppor¬ as buying stays at high levels.
world food situation is more man¬
down in a free market.
From the human standpoint, I
tunity they seek., •;
This has not taken place.
On ageable.
It is necessary that we develop reject this argument.
With this sound bulwark against
a new realization of the size and
It provides no answer to those the contrary, prices rose sharply
LOS ANGELES, CALIF.—The
after controls were taken off and a repetition of the agricultural
ThfsTdecisiott has been forced upon
*
sharp and rapid rise in prices.
rl
.
.
..
,
•
Chas. F.
King Admits
W. F. Wilson to Firm
,
,
,
.
Calif. Investment
.
strength
of
economy.
our
tremendous production
war
a
Our
during the
astounded the world.
phenomenon
•
which
It
no
was
living.on fixed incomes, such
It
one
provides
thought could endure after hos-
veterans
tially
Our Wartime
no answer
and
to those
who
more
must pay substan¬
for houses than they
able to afford.
are
Surpass
servants,
-
It provides no answer to many
millions of American families in
they have continued to rise. Pri¬
vate enterprise must display the
leadership to make our free econ¬
omy
work by arresting this trend.
depression which started in 1920,
farmers should continue their ef¬
forts to bring about maximum pro¬
duction.
reductions have al¬
ready shown that this leadership
Some
d o
price
e s
I
exist.
commend
what
y
The Role of
I have been
,
Economy
We are beginning to zense the
fact, however, that our peacetime
economy cannot only equal our
wartime economy,
it.
The
but
can surpass
city, town and rural area.
of high prices, too many
these
families
are
spending
every
Because
of
their meager
their
war
savings and cashing
bonds. They are post¬
by comparing the
present time with the year 1929,
poning necessary medical care.
They have gone into debt in an
amount 50% greater than a year
which
ago.
progress
we
have
made is
demonstrated
the
of highest
economic activity before the war.
The
was
year
physical volume of indus¬
They
through
are
choice,
make both
doing
but
in
ends meet.
,
Counselors Elect
as
widows.
tilties ceased.
Can
civil
teachers,
,
.
not
order to
this,
And most
accomplished.
I ask
other business leaders to step for¬
ward in the same direction.
has
been
maintaining our pres¬
The government
has responsibilities.
It is an
farmers in
also
Has Responsibility
Government
speaking about the
workers, and
prosperity.
.
economics and
Iri the present economic situa¬ good business that, in times of
tion, labor also has a responsi¬ great inflationary pressures, taxes
Labor
bility.
Also
^
axiom
should
-
of
not be reduced.
Any sur¬
plus which the Treasury can se¬
cure should
be applied to reduc¬
would threaten another inflation¬
tion of the
ary
wage-price spiral.
of
Counselors »iAssocia¬
Southern
California
has
announced the election of the'fol¬
governors:
Chairman;
Foster
B.
Sears
of
Henry
W.
dena.
B.
W. Murray Hawkins,
Henry
H. ^Clifford,
Rhodes,
Thomas liD.
Santa
Barbara,
and
Siems of South Pasa¬
was elected
Robinson
Secretary-Treasurer.
good
said, in January of this year,
that
excessive
wage
demands
I
tion
lowing members to the board of
:
role of businessmen,
ent
Investment
Federal debt.
Reduc¬
I also said tion of the debt reduces the an¬
N. C. Beeber Associates (
Nathaniel C. Beeber has formed
Nathaniel
C.
Beeber
Associates
with offices at 61 Broadway,
New-
City, to conduct a securities
business. " B:;
V:
York
.Volume 165
Number 4588
THE COMMERCIAL & FINANCIAL
CHRONICLE
Modem Factors in Individual
(Continued from
3)
page
dividual. development,
and
frees
conditions.
it
A
rapidly
changing material civilization
erates
group
a
profuse
the in¬
that they,
overstimulate
residence, dividends, wealth and dividual and burn
him out
income. A banker
vehtion
curities
of
are
beauty
find
In
one
wards
dime
a
do
stage of business, the
go
to
the
another, to the
semble.
an
who
man
effective
can
research
and
problems
between
the
his
de¬
pressure
ditures
for
research
which
depreciate their equipment be¬
fore that of their
competitors. And
when funds are- set
up
So
completely do we worship at
the shrine of change that the
great
American fear has become the
fear of being
naive, and being
naive is to like old
things, old
and
inner
is that
the
he
contemporary
knows too
has
too
few
many
friends:
tragedy is his lack
of
man
is not
a
rational, but
emotional, critter.
been told, hah in
jest
and I suspect
wholly in earnest,
that what
distinguishes man from
intensely
We
have
the
lower animals
is
drinking
without being
thirsty and making
love at all seasons.
The essence of
both is emotional.
against
these eventualities, the
politicians
tax them away.
of
that
an
of
will
in
time but
satisfactory emotional experience.
What, makes all this so important
of
double
is
people
as¬
heavy depreciation resulting from
nejw processes, and large expen¬
consume
ac¬
not
man
obsolescence,
industry is caught
modern
are
problems
in
partment. The flour mills in the
Middle West eliminated the old
fashioned miller. New inventions
create
longingsfor
alone, unhappy, and often with
profound: feelings of frustration.
In other
words, one of the basic
re¬
promoter;
•
satisfy the soul, which
leave the real person
untouched,
dozen.
a
,
natural
friendship, that
War
generals become
young; people
who
and educated, full of
and
contacts .which spell
quaintance but
are
lacking
promptly
places a premium
upon the soldier and his
qualities;
during a long period of peace,
destroy.
no, one
meaningful experience. What they
chance
a
that
.
will
•
fact
with
eager
hope
,
television
the
the
today
stroys the city but builds the
suburb; the talkies displace the
silent movies; the radio
gives to
without
is
real individual. 1 His
emotional life is
inadequate. Our
larger cities especially are filled
replaces coal; the auto
depreciates rail - stocks;
a v new
highway destroys ; the value of
filling stations and roadside stands
along the old one; the auto de¬
which
all
knows
oil
talent
pre¬
maturely. One can do too many
things. In a way, most significant
se¬
insecure; and invention
basis of material
change.
isthe
Fuel
defined in-*
once
that which makes
as
To
add
difficult
insult
often
to
in
injury,
our
large city life, just to
at
least
In
if ,you
are
it
is
into which
we
put
our
sonality
and which
entire range of
our
mean
group
entire per¬
by themselves but near to each
other in point of space. This
type
of
family living, whatever its spe¬
cific form, gave a
stforig sensd of
comprehends
activity. Some
such inclusive
group has been the
basis of social
organization from
the Teutonic
kindred, two thou¬
sand years ago, to the
open coun¬
try neighborhood of 19th
century
America.
Today,
timate
live, not in
inclusive
in¬
with
group,
one
its
in
and
impersonal
nature.
We
and
work
limited
with
one
group, play with another,
worship
with a
third, and
with
sin,
a
living,
fourth. This plan of
group
characteristic
cities and
not
perhaps,
of
without
of
large
suburban towns, .is
its
advantages.
It
gives greater
opportunity for in¬
no
dependent
well-behaved.
long as they
or keep quiet
family is rarely socially
upon
resources
hood
have
its neighbors. The
of
the
vanished,
them the security that
living with
neighbor¬
and
comes
with
from
your own.
Changes in Family Structure
Reinforcing and sharpening the
effects of what has
just been de¬
are the recent
changes in
the structure of the
family.
The
historic form of
family, which still
prevails
in
most
parts
of
the
scribed
world, i|S the extended or
kinship
type in which a large number of
related kinfolk live
together and
share life's experiences and
prob¬
lems.
This may have been
the
patriarchal family, with several
generations living
China;
or
the
is
the
Many
present day mo¬
are new.
One of
unit
together, as in
loose, semi-patri¬
new
one.
the
widows
and
Confederacy.
came
support of
orphans: of the
twhich moves.
later, an en¬
before.
But
many
tire
Down to the present
time, in many parts of the South,
the enlarged
family constitutes a
mutual aid association.
Blood re¬
lations, whether congenial
.are
cherished
over
of misfortune.
the ties of
not,
against the day
or
Much is made of
blood, and
persons are
constantly going out of their
feature
new
is
the
the population who
the
war,
too often.
a
proportion of
an
Before
move.
circumstances
migrated annually across
state lines in pursuit of industrial
and
employment.
from
than
million American families
a
changed farms.
members of the U. S.
most
exclusive
were
not
club
freed
from
meaningful
Warren S.
One-third of the
has
community
contacts.'
one of
population
of this as
written
con¬
sustenance
no
social
Thompson,
outstanding
Senate, the
large
other group controls of
duct, and drawing
Every year# more
so
adequately into its social
setting,
persons
What results in
proportion of these changes i»
individual or family not inte¬
grated
than four million
more
our
experts,'
follows;1
millions
of
in
America, ;"Today,
there
are
states they people who have gone out fromRepresented. Mobility is most pro¬ their family
and
neighborhood
Today, most of us live in the nounced iri our large cities, Where groups, generally in search of'
Random
immediate fcrm of
sample studies suggest larger
economic
family, made
opportunities,
thait about a third of the
up of parents and children.
popula¬ who < have thrown off' the re¬
Spare
tion move at least orice a year in
beds are avoided, for definite
straints not only pf these r
pur¬
small, >
poses
of defense.
Finally, there is intimate groups, such as
This type of ordinary times.
:clubs,;
the estimate that more than
family
lives
unto
thirty lodges, business associations, etc.i
itself,
and
million
civilians
changed their Many of these persons have never
largely apart, from its kinfolk. Its
interests are sidewise, in terms of residence during the recent war
jbeen - able to find a satisfactory :
period. A third fact t6 be noted place for
what the neighbors
themselves in the; new •
think, rather
than lengthwise, in terms of in- about
contemporary mobility is community, with its larger and"
that it is characterizing all ele¬ less
tergenerational duties and obliga¬
intimate groups. It is becausements in the population
Once modern migration is so
tions.
This, to be sure, has many
largely'
we thought * of the mobile as the
advantages, when all goes well.
individual, separating individuals •
shiftless and the no-account. This from so
But life has the
many of the established*
chastening habit
is no longer true.
Executive tal¬ group
of not always going
contacts, which give direc- i
well, arid ent is on
the wing.
Vast mergers Ition to conduct and
when misfortune befalls the mod¬
meaning; to;
to
favor one's kin
in
way
business
or
born in the
.
politics.
•
of business have
resulted often in
isolated, independent, imme¬
the creation of the
migratory ex¬
family, it faces its problems
ecutive, who roams over the in¬
a ledge of
security that is very
ern
narrow,
indeed.
When
dustrial
present
activity, that it is of
on
divorce, desertion and separa¬
tion; it will suffice to merely re¬
call their
enormity and the rapid¬
ity of their increase.
From onefourth
dren
to
in
one-third
urban
many
of
the
school
chil¬
sys¬
.
would
think
of
policy holders
rural
as
insurance
relatively sta¬
a
ble group.
Yet a tabulation of
2,107 such policy holders in three
Western states revealed
that, over
an
11
year period, only. 30% had
changed their residence, and
not
that
almost
out
one
of
(23.5%) had moved four
times.
sides
four
or
more
Here again, there are two
of
the
story.
Certain stu¬
dents have emphasized the advan¬
tages of modern mobility, pointing
that it often gives the indi¬
vidual or family a fresh start,
particularly where a misstep has
been made; that it offers release
out
from
such
jsignificance in modern
;
empire of his organiza¬
tion, with a range as wide as that
of any hobo;
Or, consider an¬
other illustration.
This audience
Moreover,
great'
life."
"i
workers to available
of
Most
significance; rif;
mobility is particularly, great lor
the
children in the families in¬
volved. To begin with, it breaks
for them the
continuity of life, as j
expressed in the tangible tokens;
of fainily possession. Adults
prqt-j
tie
about
the
adaptability of
young
children, but my own;
studies point definitely in the op- '
posite direction. Change of resi^
dence means complexity for ~the'
child at a time when- he is in need'
of Simplicity.
Next, residential '
mobility means change of school,
change of friends, social contacts,:'
social
tus.
acceptances, and social sta-;
At least
great
deal
of this country's;
psychiatrists has a
one
leading child
to
say about mental»
upsets. in children, ;
resulting from the fact that mo-, >
bile families put them under
pres-'
and
nervous
direction.
Here,
the extreme
aspects are
Psychological
obvious.
show
increased
that
come
to
an
individual-
and
family as a by-product of in¬
tegration into the life of a com¬
munity, and with reference to
as usual,
those more intangible and perhaps,
the most
more important
spiritual resources
studies
range
in
and
choices
that
,
sociological evi¬
however,
points in the
dence,
other
sources
jobs.
the
that
an
to
come
from living'as'
one
accepted member of
a
group.
stimuli, such as ac¬
company
mobility, tend to in¬
crease
nervous
strain, while re¬
search studies by psychiatrists and
ment
to
sense
of
sociologists
reveal
ment in the
population living for
fundamental
problems of the American people
the
shortest
house
shows
time
that
in
the
the
ele¬
same
the
It is from the
world.
a
feelings of attache
place that we get;a*
stability
One
of
in
a
Changing
the
is that so many of them are indi¬
viduals who have lost association'
highest preva¬
tems today come from incomplete
with their old landmarks, Hither
lence of personality disorders, and
or disorganized families.
Finally, that intracity mobility is more they have moved, or the old land¬
there is the third fact that with
marks have been carted away tosignificant in this connection than
make room for what /we term
rapid cultural changes, the cul¬
intercity
movement.
Similarly,
tural distance between generations
the spatial distribution of suicides progress. And, as Walter Lippman.'
once wrote: "It takes time to learn,
broadens out, thus lessening the
and other forms
of personality
bond of mutual understanding and
to love the new gas station which
disorder shows heaviest concen¬
stands
where
the
wild honey¬
responsibility.
This is especially trations in areas of
highest mobil¬
suckle once grew."
pronounced in many families of
ity. Victims of excessive mobility
foreign white stock.
Old age in¬ become
spiritual nomads, extreme
5. The Changing Debt and Tax
surance is the present day substi¬
individualists, and tend toward
Structure
tute
for
kinfolk
v';:?.:?
responsibility, what one might call moral ni¬
again
with
distinct
gains and hilism.
1
Finally, as a sociologist,/1 am
losses.
It is, however, with the less ex¬ apprehensive about the changing
.
,
,
-
4.
Mobility of Population
treme and pronounced results that
we are
Modern
man
concerned.
What does this
increasingly does repeated moving about do to the
He. moves about ordinary
person
and
family?
job to job, home to borne, Stated in terms of process, what !
community to community.
Not happens is something like what
not
from
stay
put.
.
i
the
frustrations,
occupational
social; that it stimulates both
sure to become the
family's enter-;
through comparisons and through
ing wedge in a new community."
the opening of new possibilities.
What I have been trying to
Obviously, too, the utmost in ef¬
say is
that
modern
fective organization of our labor here
mobility1
and
other
productive resources makes for insecurity, both in re¬
calls for the constant relocation of gard to the more material re¬
and
I
j
often, the organism suffers
only a !
temporary shock and may sub^e-i I
quently be even; stronger thai*
the tribe;
was
organism
When, as, and if,,!
this
transplanting process is done
skilfully, quickly, and "not too.'
that sprawls all over the old Ford
and the bed
blankets.; A second
on
they have, and turn down
by 11 o'clock.
Today,
social
these
a
a
broken, followed by the problem of
building
Far West.
bility, however,
the
up
New Englanders moving to
or
how distant kinsmen
forward to assume the
see
be
noticed,
of
29,
shrub or tree is j
The old root
system
is
transplanted.
of the features of
diate
so
children,
ica,
the Middle and
when
religious congregation; then may interfere with the success
o£
tended to unite for
the enlarged
kinship family group. this process—the new soil may not
purposes of
defense against the
exigencies of Today it is characteristically the be
suitable,
it
may
take
too
life.
Ah excellent historical ex¬ individual, most often men, and long uhtil new root
contacts are
ample of this can be found in the predominantly young men.. If a, formed,
the transplanting may
South aft6r the Civil War. North¬ family unit
moves# it is the imme¬ occur along with other
distressing
erners were astonished
diate and not the
kinship group problems, and it may be repeated
constantly
to
impersonal
radio
the urban
3.
we
feelings of likemindedness and
security, but in many secondary
groups which are
highly special¬
ized
have
.
as
Orice it
.
the
It is not.
history,
security.
No matter how
many
internal quarrels there
might be,
and there were many, kinfolk
Sociology,
those
It is
as
happens
a
old as the
children of Israel crossing the Red
we speak of this as
day families break, the child so
problem of
achieving status, often becomes & social ■? responsi*
and it is one of
the
peculiarly im¬ bility because, as the'records put
portant but overlooked
problems it, "there is no family."
ideas, to uphold old virtues. We of the
little man in our
are
sure only of our
society.
Three further facts are signifi¬
uncertainty Because we have
overlooked it, cant
about anything more than a week
in this connection.
One is
we have failed
to understand
why the shrinking size of the
old# and the result is a pose of the
little man in
family.
America, al¬ Low birth rates are translated into
sophistication to cover a lack of
though he is the best paid and
proper stability. It is not neces¬
the small family system.
most
Again,
comfortably living little man
sary to underscore the significance in
there are many advantages of
the
this,
world, takes such a delight
of
all
this for insurance folk.
but one fundamental result is that
in
kicking the old capitalist sys¬
Change means chance, and long tem
the child of today leaves a small
around.
He must give vent
ago, Sumner, the Yale sociologist, to
family to go to a big school, a big
his frustration in
some
man¬
pointed out that insurance was ner
factory, a big office building;
that is acceptable to the
Irish
the social defense
whereas his grandparents left a
against chance. policeman at the
corner.
To put
big family to go to a small school,
it in another
way, for many per¬
2. Revolution in
Group Living
shop or office
sons
building.
This
the only
way they find to
change is tremendously impor¬
To the average
overcome this sense of
man, change,
inferiority tant, and in a
great variety of
and progress, mean mechanical in¬ is to develop a
persistent pattern
ways.
Recent studies of gangs
novations, ?like the radio, tele¬ of dissatisfaction.
They are agin
among school children show them
the
vision, telephoning from a. moving
government, the capitalist sys¬
to be the result Of a natural
grop¬
train, or the atomic bomb. My tem, the United Nations, the fore¬
ing of children otherwise alone to
thesis
here
is
that
the
great men, the preacher, the priest, and
changes in human history are not increasingly, even the institution gain security. This is particularly
apt to be the case where several
of
those in the mechanical
marriage.
gadgets
Incidentally, this
minority groups are competing or
which men use, but in the insti¬ may explain,
too, why the women
in conflict with each other.
wear those hats and
tutionalized
Again,
the men these
arrangements
by
one
senses
that
the
American
which they live and in the at¬ awful ties: it's the
only way to be
child stands on a narrow
titudes and values which
family
noticed.
they
ledge, even if he is in no way im¬
accept. To some
of
these
From the
less
standpoint of his se¬ perilled.
spectacular but more important
curity, one other feature of this
This brings up the next fact.
changes I waht to make brief impersonal,
secondary group liv¬
reference.
The
Family members increasingly fal¬
first
of
these ing must be noticed.
The modern
ter and fail in
changes is the passing of the old urban man has no
maintaining even
neighbors. Who this
narrow ledge.
fashioned neighborhood. In Soci¬ does live
It is not nec¬
next door?
He neither
essary here to repeat the statistics
ology, we speak of this as the knows nor
primary group by which we
an
intimate, face-to-face
experience.
old
as
the
cares,
is
type, in an earlier Amer-.
ica, in which relatives lived mdre Sea/the Pilgrims coming to Amer¬
is
large.. Contacts in this
secondary
living
are
partial
and
superficial. They are so
op*
constant, factor in the
^redistribution of jobs, places Of
as
mobility of population
new
Security
archal
Forsooth, the world is constantly the individual
from many social
being remade before our' very restraints,
gossipy interferences
teyes. What we forget is that and
petty irritations that come
these changes, which we hail as
from living all the
time with
progress, are translated into un* people who
know all of you. But
stable working and
living and in¬ there is a debit. side" and
vestment
(2217)
that
debt
and
tax
structure
of
this
There is much that I do
not know about public
finance,
but there are some things which
country.
seem
self-evident.
(Continued
One is that 260
on
page
26)
j
THE
COMMERCIAL & FINANCIAL
Thursday, April 24, 1947.
CHRONICLE
(2218)
6
Dismal Art
Some Comments on
odern Factors in
ndividual Security
(Continued from page 25)
dollars on one bill alone
a lot of money to owe in any
lan's language. Another is that
paying back or merely reducing
illion
climbing; the wholesale index has
risen in the first quarter by some
points to a new postwar high
almost 150, as against 108 a
nine
of
The
ics.
(Continued from first page)
franc deficit.)
But they keep
big mills hold
strenu¬
ously the price line for strip and
sheets, while anxious buyers are
scrambling for the available sup¬
merely translate into
nical language what
minds of the men on
the street-
The result is the emergence
ply.
market": intermedi¬
aries
buy the steel at current
prices and sell it approximately
of
"gray
a
sentiment.
public
exchange
experience
proves
conclusively that "what
went up must come down."
But
the
stock
operators <— to whom
year ago, 77 in 1939, and 60 in
proportions will early 1933. Food prices are the at a 100% profit to consumers. Westinghouse points out the fun¬
ake a long time—several genera- "jumpiest," having risen by more
damental difference in the mone¬
(Whether or not there is a "kick¬
ions at least. And, third, to stop than 60% in a year's time. Equally
back" to the mills, no outsider tary factor between 1920 and now.
borrowing to give yourself a treat important, however, is the fact knows—unless in the form of pro¬ We have to face this time "a per¬
is like giving up dope, or drink¬ that
industrial, products
as
a
portionately cheap scrap.) Which manently depreciated dollar," it
ing absinthe, or eating candy. It whole, especially building materi¬
that the rise of
goes to show that straws in the says, meaning
isn't easy.
( als, maintain their slow but un¬
commodity prices that has oc¬
wind cannot stop a hurricane of
curred since 1939 could not be
I would like to express my utter swerving trend, this in spite of demand.
reversed, even though individual
contempt, not for the persons, but substantial set-backs along overA Hurricane of Spending
luxury
lines,
toys,
for the thinking of that group of stimulated
prices which have gone up dis¬
food,
dairy
products,
It is a hurricane of spending, proportionately under the infla¬
public leaders who have been, and canned
tion stimulus may have to be (or
are, getting across to large ele¬ women's apparel, etc., to say noth¬ domestic and foreign, that is hit¬
ments of our population the; idea- ing of the reaction to such cases ting us.
Consumer spepding, piu- haye already been) corrected.
that you can borrow money with¬ as a 450% rise of fancy-priced nicipal outlay, and business in¬
Reversal of the Cycle
out paying it back. It would help dresses.
vestment on unprecedented scales
tremendously if all people re¬
create
bottlenecks
and
rising
How does a typical reversal of
Neglect of World Market
alized that whether you pay it
prices, which in turn provide new the cycle come about? In Novem¬
back through inflation, or default,
One trouble with most price- impetus for more spending and ber,
1919, the discount of the
or the slow and painful process of
forecasters
(or price-preachers) investing. Net individual incomes, Bank of England, then still the
taxation, you pay it back.
after taxes, have risen since 1939
world's financial center, rose to
is their neglect of the world mar-,
This
changing debt and tax ket.
Less than a year ago, the by more than 140%, while retail 6%; in April, 1920, to 7%. In this
structure
translates
itself
into
prices are up only by some 70%. country, the official rate followed
Department of Agriculture ad¬
families — family plans, income vised farmers to cut down on (Farmers' and factory workers' to 6% in January, and to 7% in
and savings. Families have chil¬ wheat
incomes have grown by
acreage
because of the gross
June, 1920. By that time, prime
more than 200%.) In dollar terms,
dren to educate, furniture to re¬
commercial paper was selling in
prospect of a record crop, over¬
place, houses to repair, perhaps looking the more than record de¬ retail sales have increased and
N^w York at 8.13%, and call
some
day a new car to acquire mand abroad. There can be little keep increasing, in proportion to money went as high as 25%. The
again.
Meanwhile father gets doubt that we are heading for a the inflated national income; so boom was strangulated, so to
do consumer loans, too.
The large
older.
Some day, perhaps soon,
speak, by the automatism of the
$15 billion total of annual ex¬
perhaps even now, he passes the ports, if not more, one-half of it majority of the people enjoy now sky-rocketing cost of borrowing.
substantially higher
"real" in¬ Nothing of the kind can happen
crest of his earning power. With to be financed
by this country
a
taxable income this year of itself. That is the implication of comes than before the war.
now, when interest rates are fixed
To be
sure, every price paid
$4,000, he gives the Federal Gov¬ the "Truman doctrine" of making
at reqord
low levels—when the
ernment $840; with a taxable in¬ the world safe from bolshevism by one man is an income to an¬ banks
have
some
$75 billions
other, and unless the latter buries worth of bonds in their portfolios
come of $8,000, it is $1,360. Here
by dollar-diplomacy. It will de¬
the money, it is bound to reappear
goes the family surplus and safe¬
on
which they can borrow cash,
plete our alleged or real surpluses
as purchasing power.
The argu¬ any time and at a nominal cost,
guard against the future, against in more than one way.
ment
of depression-prognosticaold age. It is this long drawn out
from the printing press (euphaWheat is a good example. We
tors
that
our
production as a
consequence, this
bitter destiny
mistically called the Federal Re¬
will enter the new crop year with
t
to
sizable
<
generations
a bare
100 million bushel carry¬
federal debt,
which spells a succession of fami¬ over, but expect a new record
lies who will 'be unable through¬ crop of lJ/4 billion bushels. How¬
out their entire1 existence to build ever, the foreign demand has been
estimated weeks ago (before the
adequately for the family future
whole
entire
several
that
the
in
This
of
too
security
any
and Central
bears upon the
over
others) are higher almost
everywhere outside the United
States than within; and it ignores
the nature of an inflationary boom
against a
effective plan of adjustment peace-time trans-oceanic trade of
will have great only half as much. The additional
such
to meet this issue
half
from this country, a
together with our
consumption would leave us
drain
Perhaps all that I have tried to
own
to this, that we humans
not just workers or capitalists,
say comes
are
next
come
which
year
practically
no
carry¬
over. If so, wheat prices are bound
prospects
or
risks, buyers or to
sky-rocket, with port facilities
sellers. Beyond all we are people,
setting the limit on the drain.
Who live in families, that live in
Crop failures abroad may worsen
communities, which are a part of
the situation, characterized as it is
a larger
society. Looking out of
already by the opening of vast
our respective windows, we see a
new
famine areas.
Other farm
world rushing by so fast that we
products will be naturally affect¬
forget the narrowness of the ledge
ed, except the perishables; flax¬
on which we lean.
Intent as we
seed at $8.50 per bushel is at allare, it is well not to neglect this
time high.
(At the same time,
ledge.
Congress
and
the
government
pour out fresh subsidies to bolster
Milner, Spence & Go. Is
Also, world-wide
falling
it
pulling
are
the wrong
out
reconstruction
rab¬
bits." That is the considered judg¬
ment
the
of
management—prac¬
tical executives and scientific ad¬
Electric
(published lately in
Harvard Business Review).
Westinghouse
visers—of
Corporation
the
That is
no
mere
theorizing: it is
backed by planning to
millions for
a
(Special to The Financial Chronicle)
SHELBY, N. C.
—
..
William G.
Parker is with J.-Robert Lindsay
& Co., Webb Building.
'/
few
new
spend $120
plant and equip¬
economists
business
cycle
has
been
pointed out time and again by this prophets
the
But most "economists" in
still overlook the de¬
this country
pendence of the domestic business
on
international condi¬
outlook
tions.
farm
falling
was a piece de
The expectation of
prices, e. g.,
resistance
of
nessmen
were
and
and
die-hard
to spread to busi¬
consumers
general¬
ly," the Westinghouse report con¬
tinues, "it would be serious in¬
deed."
This means to understate
the number of die-hard prophets
virtually all recent and to over-estimate their import¬
a forthcoming re¬
ance.
They reflect rather than
forecasts about
With Alex. Brown & Sons
(Special to The Financial Chronicle)
cession, which will have to wait
until world-wide shortages have
SALEM, N. C. — been overcome.
The steel people are learning a
Gray
is
with
Alex.
Brown Cc Ccr.s, CTIanlon Building. lesson in supply-demand econom-
WINSTON
Hahnson
_
„
j
w
.
.
fall suits
just been announced by cloth¬
manufacturers.) Less nylon
hose is produced for a while, and
more shoes; the situation will be
reversed after some months. What
;
is
important: cosmetics and
more
down in price, or
^il going up? Labor.is re-,
leaded at one point and promptly
absorbed at another. If less steel
casein
going
crude
to
needs
be
allocated
for
auto¬
will be available
for railroad equipment.
Consum¬
ers, too, may speculate a while on
lower prices. But all such slowing
down of the inflationary impetus,
mobiles,
painful
more
the price reactions may
individual fields, ,is
to be short-lived. "Distor¬
as
the
in
be
bound
tions" in the price
stop
an
necks
structure never
inflation. The basic bottle¬
remain operative, raising
costs, interrupting production, de¬
laying deliveries, postponing the
"filling of the pipelines" again
and
again.
by 8 to 10%, wage rates
being
boosted
this spring
If only
are
the pattern set by the
That means high¬
er costs, higher prices—and more
income to spend. It is the conse¬
quence of full employment and
manpower
shortage which may
again,
on
rubber industry.
is, but the vital fact it repre¬
the greater or lesser sup¬
lead,
sooner
6r later, to
work stoppages and little or
also
new
improvement in labor effi¬
ciency. Freight cars are another
overhanging bottleneck. Loadings
in the second quarter are expected
no
by 33.2% those in the
period of last year. But the
railroads lose 5,000 to 6,000 cars
to
exceed
same
_
F. H. Rosenstiel, in
"Commercial and Financial
Chronicle" of March 27, 1947.
*Coined by
the
in physical vol¬
that fresh
relent¬
lessly. It sorely misgauged the
the story.
foreign bottlenecks, too. It was
of some $34 billions
are much
written last year, which may ex¬
more
than
double
what they
plain that 1946 exports are under¬
were
27 years ago; in addition,
estimated by almost $4 billions,
the public (individuals and nonto say nothing of the more recent
financial institutions) is holding
expansion of our commitments
cashable government paper to the
abroad. It knows nothing about
tune of $90-odd billions. It is this
the growing international scram¬
vast accumulation of actual and
ble for raw materials, food and
potential purchasing power that industrial
products, nor of the
forces prices to a permanently en¬
destructive
delays
in restoring
cast,
ume.
ability
writer.
With J. Robert Lindsay Co.
«
(A 5 to 7% rise in men's
much the
rate itself, significant as
scarcely doubled
market is essential to understand
Pierce, Fenner & Beane, 22 Bat¬
,
to¬
ing
ply of money. The Westinghouse
report puts the finger on one es¬
sential element in the price mech¬
anism: on the volume of "liquid"
other than food,
tery Park Avenue.. %
i
one
has
sents:
ment.
Actually, the majority of
along many lines large industrial concerns ignores
such as box cars, the
prevailing slump-psychosis,
locomotives, tractors, earth mov¬ to use this very apt term*, and
Co., Limited have formed a part¬ ers, office equipment, fertilizers, does not hesitate to invest in rec¬
nership under the name of Milner, coal, steel, paint, carbon black,
ord-breaking
capital
expendi¬
Spence & Co., with offices at 25 and even aluminum. Their prices
tures, which, run currently some
King Street, West; the new firm may rise accordingly.
Add to it 60% above the first quarter of
is a member of the Toronto Stock the international competition for
last year.
Neither rising costs
Exchange. Partners are A. J. Mil¬ raw materials which we import,
nor the alleged - resistance of * the(
such as sugar, copper, lead, anti¬
ner, A.
G. A. Spence, the ex¬
public against higher prices seem
change member, L. G. Mills, E. F. mony, natural rubber, tin, flaxseed
to deter them.
They understand
and linseed oil, fibres, pulp and
Mulqueen, and A. B. Massey.
that durable goods are the bell¬
On the other hand, wethers of the business cycle, and
wood* etc.
where foreign competition is seri¬
With Merrill Lynch Firm ous, as in cotton goods, our indus¬ that we have just embarked on a
long construction cycle of six to
(Special to The Financial Chronicle)
try is in for hard sledding.
nine years duration.
ASHEVILLE, N. C.—Edward G.
That the picture of the world
"If the
current pessimism
of
Mathews is with Merrill Lynch,
export
ONT., CANADA—
The directors of Mills, Spence &
TORONTO,
•
another
and
So what? Men stop buy¬
ing woolens and turn to worsted.
System).
interest
ing depression or recession in 1947
needs will strain to the limit our
i Formed in Toronto
which
.
today
money (the total of cash in cir¬
a
month,
while
replacement
culation and
demand deposits),
amounted to 3,000 in January and
purchasing power to be spent
which has trebled since 1940, and
along another. That may mean
2,300 in February. With a bumper
has increased more than five-fold
violent fluctuations as between
crop ahead, we might look for¬
since
1929.
Barely one-sixth of
different industries, but it can not
ward
to
a
vicious
rail
tie-up,
the present $125 billions of cash
affect the prevailing full employ¬
curbing production here as it does
funds existed in 1920, a fact that
ment
and
in most other countries.
general
price trend
alone makes all the difference. In
more than superficially, t
No mention of these domestic
the
meantime, let us add, our
"We at Westinghouse
believe much wanted production has obstacles to readjustment is to be
those forecasters who are predict¬
found in the Westinghouse fore¬
farmers.)
"distressed"
in
ours,
*
line
morrow.
prices along one line merely free
billion bushels or more can
only
for the social integrity
of the family.
meaning
as
'
as
What matters is not so
two-fold
a
many
Europe's crop) at well
billion bushels,
a
serve
abroad,
expression of eco¬
nomic illiteracy:
it ignores the
fact that industrial prices
(and
is
much of Northern
ruined
floods
accustomed ways.
problem
and insurance, and
older
be pricing itself out
may
of the market at home or
will have with the
i
-
labor troubles are dor¬
mant, as long as shortages in
parts and materials, in warehous¬
ing and port facilities, and espe¬
cially in box cars, do not inter¬
fere, surpluses may arise, indeed,
causing price cuts and inventory
losses. Rising prices misguide pro¬
duction into excesses along one
long
including
interruptions. As
major
without
They
quasi-tech¬
is on the
create
In
only part of
Our savings deposits
reality, that is
if
the
not continue
mounting, as it does. And mind
you: the rate at which dollars are
spent is still a very slow one.
"The current rate of money turn¬
over,^ although increasing .since
early
1946,
has a long way
to go before it will be as high as
it was even during the depression
years of the 1930's."
hanced
money
plateau—evdn
volume would
Basic
Bottlenecks
nor
of the fact
credit is being poured out
production in Europe and Asia.
What
are
we
facing
is
not
a
this year or next,
be followed by a "high plateau"
mild recession,
to
of
out
and
healthy prosperity/
we are
facing, with or with¬
long
What
minor
backs, is
a
and temporary •; set¬
hectic process of full
employment with shifting and in¬
sidious bottlenecks,
tuating but
violently flue-,
upward-moving costs
and prices, industrial strifes, mar¬
economy is beset
bottlenecks in man¬ ket confusions, inflationary and
power, raw materials and means international tensions, and ulti¬
of transportation,
and therefore
mately a day of reckoning.
by a rising trend of costs and
prices.
The question, then, is:
how soon can the productive ap¬ With Brown Bros. Harriman
(Special to The Financial Chronicle)
paratus overcome these bottle¬
necks? Even the otherwise real¬
BOSTON,
MASS. — John W.
istic
Westinghouse
report in¬ Thornton is with Brown 3ros^
dulges
manifestly
in wishful Harriman & Co., 10 P. O. Square.
thinking by assuming that later
this year the shortages in durables
Kidder* Peabody Adds
will be ironed out, as they have
(Special to The Financial Chronicle)
been in a number of soft goods.
BOSTON, MASS.—Kells M. BoThis implies, in the first place,
land is with Kidder, Peabody &
that
the present high level of
Co., 115 Devonshire Street/
production will be maintained
Our
by
postwar
basic
Volume
16S
Number
Texas
&
N.
4588
THE COMMERCIAL &
FINANCIAL
CHRONICLE
(2219)
27
Group of IB A Holds Spring Meeting in Monterrey
Standing, left to right: Herbert F. Boynton. Chairman, NASD, H. F. Boynton
Co., New York; Porfirio Gonzalez, Manager, Cuauhtemoc Brewery, Monterrey,
L., Mexico; Creston H. Funk, Chairman. Texas Group, IBA, Funk & White,
San
Antonio, Texas. Seated, left to right: Edward D. Muir, Russ & Co., San Antonio,
Texas; Win. N. Edwards, Chairman-elect. Texas Group, IBA 1947-48, Wm. N.
Edwards & Co., Ft. Worth, Texas: John H. Rauscher. Rauscher, Pierce & Co., Dallas,
Texas; Eimer A. Dittmar, Dittmar & Co., San Antonio, Texas.
Left to right:
ers
Association
Industrial
of
Carlos Novoa/Director General, Bank of Mexico, President Bank¬
Mexico, Mexico City; Antonio L. Rodriquez, President, Credito
de
Monterrey, Monterrey, N. L., Mexico; H. H. Dewar, Vice-President,
IBA, Dewar, Robertson & Paneoast, San Antonio, Texas; Dr. Josue Saenz, Director
Treasury, Mexico City.
of Credit of Mexican
Left to right:
Judson S. James, Jr., James & Stayart, Inc., Dallas, Texas; Jose
Chamber of Commerce, Monterrey, N. L., Mexico; Milton R.
R. Underwood & Co.. Houston
Texas; Wm. A. Parker, The
Cantu Farias, Manager
Standing, left to right:
Ramon Beteta
Minister vf Finance, Republic of Mexico;
Creston H. Funk, Chairman Texas Group, IBA,. Funk & White, San Antonio, Texas.
Left to right:
John H. Rauscher, Rauscher, Pierce & Co., Dallas, Texas; Porfirio
Gonzalez, Manager, Cuauhtemoc Brewery. Monterrey, N. L., Mexico; Jose Cantu
Farias, Manager, Chamber of Commerce, Monterrey, N. L, Mexico; J. Marvin More-
land, Rotan, Mosle & Moreland. Galveston, Texas.
*
Underwood.
Milton
Parker Corp.,
Left
to
Boston, Mass.; John H. Rauschei, Rauscher, Pierce & Co., Dallas, Texas.
right:
Virgilio Garza,
Chairman of the Board, Credito Industrial de
Monterrey, Monterrey, N. L., Mexico;
J. M. O. Monasterio, President, Credito Inter-
nacional, Mexico City; General Matias Ramos Santos, Chief of 7th Military Zone
of Mexico; Herbert F. Boynton, Chairman, NASD, H. F; Boynton & Co., New .York.
28
THE COMMERCIAL & FINANCIAL
(2220)
Thursday, April 24, 1947
CHRONICLE
International Ca pital Investment
try, it means the creation of a
(Continued from page 6)
of my somewhat frequent market for the surplus goods it is
trips about the world—this was in a position to produce and ex¬
and the assurance of an
after Germany had surrendered— port,
expanding world trade in the fu¬
I was walking through the batture,
which will enable
it to
tered
and
demoralized city
of
Vienna and suddenly across the maintain and increase the output
street I saw
the offices of the of its productive plant. In addi¬
the
increased imports of
Credit Anstalt.
It brought back tion,
memories of 1931 and I experi¬ goods and services which come to
the lending country by way of
enced a strange feeling. For sud¬
the standard of living of its citi¬
curred, we were confronted with
in
places
like Greece, Poland,
significant defaults and losses on
foreign dollar bonds, the major Hungary, Italy, Austria and China.
But the grant of relief to such
areas of default being Lat.n Amer¬
countries is not intended, like the
ica
and Germany.
It is worth
international investment of capi¬
noting, however, ihat despite tne
widespread defaults, full payment tal, to be directly productive; it
is designed rather to let the people
was maintained on the outstanding
of such countries meet the mini¬
foreign dollar bonds during the
mum requirements for actual sub¬
period by Australia, Argentina,
sistence. International investment
Canada, Eire,
Finland, France,
starts
only where international
Switzerland,
Luxembourg,
the
relief leaves off, at the point where
Netherlands, Norway, Newfound¬
it is economically sound, both from
land
and the
United Kingdom.
zens.
Czechoslovakia,
one
on
•
denly,
the
of
the
recalled
I
years,
of the terrible
intervening
all
across
destruction
uneasiness
which the an¬
failure of that
caused in knowledge¬
foreboding
and
return
had
circles
uneconomical
for
made
from
S.
Al¬
though I had been entirely remote projects or for purposes which are
non-productive or are beyond the
from any transactions involved in
able
§
though I could per¬
the bank and
haps not trace any direct connec¬
tion between its failure and the
terrible
that
events
their connection
a
was
the
present. The
capacities of the borrowing coun¬
try to carry out, merely squander
the wealth of the lender, increase
the difficulties of the borrower,
ultimately
which
pressures
If
largely
impelled,
are
we
against our will, to invest so much
of our capital for the accomplish¬
ment
of
destructive
purposes,
ought we not be willing to marshal
substantial portions of our assets
of achieving eco¬
political health?
Few things, I think, can con¬
tribute more directly or more sub¬
stantially to the creation of con¬
ditions of economic and political
health than wise international in¬
vestment of capital by those coun¬
tries which are fortunate enough
for the purpose
nomic and
position of capital ex¬
to be in the
If this be so, it is worth
porters.
examine together
this afternoon some factors under¬
to
while
our
took
lying the international investment
of capital and to explore some of
the lessons we have been taught
by international investment in the
past. It may then be profitable to
analyze the role which the Inter¬
national Bank, as one of the prin¬
cipal international financing agen¬
cies in the world, may be called
the most important
international invest¬
far
by
position
generated war.
in
middle
the
From
ment.
the
of
onwards her foreign
increased by about
19th century
investments
million annually. In terms
of present day purchasing power
the investment was much larger,
and it was made against the back¬
$300
ground of
a
population and
a pro¬
ductive
plant very much smaller
than that, say, of the United States
today. Not all of Great Britain's
investments
nate, but
of
were
wise
or
fortu¬
the whole they were
on
benefit
enormous
Great
to
Britain, enabling her to build up
in the period of her greatest in¬
dustrial supremacy new markets
South America and
North and
the
Far
East
made
was
of
possible
through the financing provided by
the investment of
other creditor countries such
as
France, the Netherlands, Bel¬
gium, Switzerland, Germany, and
Italy.
World War I brought this phase
capital I
mean
the funds of
one or more
in another country
That
purposes.
take any one of a
It
be
can
investment can
number of forms.
loan from
a
ment to another.
countries
for productive
It
one
can
govern¬
be
loan
a
through normal investment
channels, by private investors in
one country to the government, or
to private enterprises, in another
made
take the form of
direct investment of venture capi¬
tal abroad.
Or it can take the
It
country.
can
Great Britain and to
to
had
she
thereafter in
achieving an export surplus. The
United States, on the other hand,
International
the
as
Bank,
international
1940, approx¬
imately $9 billion par value of
foreign dollar bonds were issued
government and private investors.
were
mates
in
bination
forms
of
which
it
characteristics of the international
investment
of capital
United
indicate, for example, that
1938, the outstanding external
of
investment
amounted
to
may
there are two fundamental
take,
of
States, and large
of American equity capital
also invested abroad. Esti¬
sums
But whatever the form or com¬
sources
From 1930 to
the
to
which derives its funds from both
Fundamental Requirements
subscribed
been
by countries which either did not
issue foreign dollar bonds or had
As
result
a
role
of
recent
the
of
war,
in
States
United
the
finance has
Great
before.
been
United
the
$11V2
Bad Financing
States
billion.
After First World
War
of which I
become
Britain,
in¬
stead
As you know, some of this for¬
be
balance.
On
the
other
the United States, with its
great productive machine not only
intact but expanded to a capacity
tive
favorably situated nations.
benefits of wise interna¬
The
tional
investment of capital flow
equally to the borrowing and
lending countries. To the borrow¬
ing country, such an investment
means an opportunity to acquire
from the lending country or else¬
where
the
goods and services
which
it
level of Fs
needs
to
increase
ard of
the
productivity and there¬
fore of its real wealth and
living. To the lending
stand¬
coun-
over-borrow, and there was little
supervision of the expendi¬
ture of the proceeds.
During the
or
no
speculative
boom
States in the last
in the United
quarter of 1928
in
diversion of capital
ment
and
The
formed.
was
Develop¬
Interna¬
mech¬
capital-exporting na¬
today this means pre¬
tions—and
United
the
dominantly
States—
may
be made available at reason¬
cost
before
never
known
or
ap¬
even
as one of the
and certainly much the most
few,
im¬
capital-exporting
proached, stands
of
portant
the
nations of the world.
This
the
throughout
opment
in
railroads
world—
gold
Balkans,
the
South Africa, rubber
plantations in the Far East, to pick
but a few random examples—so
mining
in
the United States today
has a com¬
parable opportunity to contribute
to
a
prosperous and
expanding
world economy by assuming the
leadership in international invest¬
ment which its dominant produc¬
tive
position makes inevitable.
development
of
of
ment
this
of
in¬
are only a measure
goods and services which
the real subject of the invest¬
are
dollars
And when
we
think of the
object of the investment, it should
not be simply in terms of export
and
import, or balance of pay¬
ments or budgetary statistics, im¬
portant
icant
the
these
as
should
consider
may
more
as
the
harbors,
hydroelectric
the
of
mizes
the airfields,
projects,
the
ments is not only an
rehabilitation
is
made
a
bet¬
place to live in for all con¬
If, however, its economic
health is not restored, there may
not
only
not
be
an
world economy but a
tracting
which
ly
expanding
vastly con¬
the consequences of
country would ultimate¬
one,
no
escape.
Relief
possible
capital
Needs
Bank's
the
members,
usual
risks
tional financing.
a
of safe
sort
of
mini¬
it
interna¬
The Bank forms
bridge—safe
far
so
the investor
in its securities is
concerned—for
private capital to
as
move
the
made if the Bank is satisfied that
the project or program
nanced is economically
the
the international field.
into
that
sense
level
will
it
to be fi¬
sound in
raise
the
of
productivity of the bor¬
rowing
country,
and
that the
prospects of repayment are such
as
to make the loan a prudent
business risk.
You
well ask why, if the
rely on the private
may
Bank
must
investment market for most of its
funds, and if it can take only
prudent business risks, there was
necessity for its establishment;
why, in other words, was the job
not left entirely to the investment
market?
The basic
is that, in this
after the war,
of Europe and of the
transition
the
answer
period
needs
Far East to reconstruct
facilities
the
productive
the war, as
ravaged in
the needs for developing
as
productive
resources
of the
areas of the world,
that the necessary
would simply not be
underdeveloped
are
large
so
financing
available
without
in
the
private
form
some
international
market
effective
of
such
guarantee
as
that which the International Bank
affords.
Countries
readily
raise
$10
which
might
$50-
$20
or
or
million in the private market need
$100
$200
or
or
$ouu million,
iwen
though their credit rating is good,
sums required are so large tnat
the
private investors are unwilling to
provide them wilhou. the aadisecurity afforded by tne
Lonal
Bank.
Apart from the considera¬
tion of the size of the
another
element
political
is
investments,
the
factors which
uncertain
per¬
now
vade
the
world
scene.
that
the
Bank
should
I
take
it
hold
not
back from granting loans until the
whole political scene unfolds. By
the influence which the availabil¬
ity of long-term capital may have
stabilizing economic conditions,
in
I
would
like
to
examine
this
with you a little more
closely, since the role of the Inter¬
concept
national Bank has ribt always been
clearly understood. Many people
as a bank with $8 bil¬
think of it
lion
its till
in
member
contributed
by the
avail¬
able to lend to any nation which
can demonstrate its need for funds.
and
governments
And
people wonder why a Bank
not tending
all
the needs of the world
with all this capital is
to
without necessitating further calls
the United States Congess.
the
first
the
of
place,
Bank
the
capital
paid in
or
to
be
paid in by the member govern¬
ments amount to only 20% of the
Bank's total subscribed capital, or
approximately $1,550,000,000; the
remaining 80% of the subscription
of each member is subject to call
only if needed to meet the obliga¬
It is not avail¬
tions of the Bank.
it
is
hoped
that
the
Bank
may
play a part in helping to create
healthy political communities.
The loans of the Bank will, as
I
have
out
stated, be made primarily
of
funds
borrowed
by the
private investors, but
Bank from
the
capital
members
subscriptions
of
of
the
the
Bank, whether
paid-in or on call, will serve as
security to those investors en¬
abling them to apply their funds
international
investment,
through the medium of the Bank,
to
with the security of the 80% call
on the member governments as a
protection. Because of this same
security factor, and because it is
no1:
primarily a profit-seeking in¬
stitution, the Bank will be able to
make
loans
for; projects which,
though constituting prudent busi¬
ness
risks,
are
not
attractive
enough to secure purely private
financing.
.
able for lending purposes.
Remedies Investment Misdirection
be; we
signif¬
steel mills, the factories, the oil
fields, which that investment will
make possible.
The financing of these develop¬
economic
private
because, through the security af¬
In
the
ment.
the
Bank is that it makes such invest¬
on
vestment merely in terms of dol¬
lars;
productive
the
of
The significance of
countries.
funds
think
shouldn't
and
restoration
the
capacities of the capital-importing
Objectives of Our Investing
We
for
forded by the capital subscriptions
1929, there was a sudden
Let me emphasize that when I
from abroad
to the purchase of stock in domes¬ speak of need I am referring only
to
the need
for financing the
tic enterprises, thus causing major
embarrassment to European credi¬ restoration or development of pro¬
ductive facilities and resources. I
tors. As a result of all this, when
the
world-wide
depression
oc- do not mean the need of American
and
Reconstruction
for
able
cerned.
less
the International Bank
ment that
import
ter
Money
was
loaned for unproductive purposes,
countries
were
encouraged
to
was
hand,
national
finance.
precisely because of the
desire that private capital be em¬
ployed for international invest¬
It
funds in the
and
war
the American market with inter¬
that they are made for the
of developing the produc¬
resources and capacities of
nations.
the capital-exporting
upon
demonstration
of
the applicant country. To
contrary, loans can only be
simply
well
must
the
by
ravaged
during the period of their recon¬
struction have a continuing net
possible, the world will be
ond,
international
an
Bank is primarily a
attributed to the unfamiliarity of
purpose
On
scale, such investment is obviously
the function of private capital in
whereby private investment
apparent
may
capital investment in eco¬
nomically sound and productive
tional
it is the satisfaction of
capriciousness
long-
requires
development
and
the Bank's
place,
available for loans
not
are
need by
term
anism
mechanisms,
are in a position to
export surplus; and, sec¬
reconstruction
Long-term
gap.
funds
any
stop¬
Relief is only a temporary
been
tries of the world have also
enjoy
an
productive facilities.
of being in the position of
capital-exporter, has, at least
temporarily,
become a
capitalimporting nation.
Most of the
other highly industrialized coun¬
a
opportunity;
a desperate
are made primarily $y or through
eign investment of the United
need. A great part of the economic
funds derived from those coun¬ States during the period from 1920
0
1940 was haphazard and mis¬ community of the world has been
tries which, by reason of their
destroyed or demoralized. If its
superior resources or productive directed; a portion, at least, of the
speak: first, that the investments
to
projects.
such issues in default.
no
difficulty
suddenly found itself in the un¬
familiar role of being one of the
major
such4
drew
heavily on her foreign investments
during the war, and though she
was able to restore them by 1930,
credit.
through the medium of an agency
less extent
Britain
Great
end.
an
within that country,
of currencies of other countries,
a
to enterprises
a
by
loan to one country, or
form of
has
position gives the United
with which to trade and a source States an opportunity to contribute
of income to support her standard
to the prosperity of the world, and
of living
when that supremacy to its own prosperity, which is
was
challenged.
They were of unparalleled except perhaps by
enormous
benefit to the rest of the experience of Great Britain
the
19th
the world, too; much of the de¬ in
century. As Great
velopment of industry in Europe, Britain then enhanced its own
economic
and
of the industrial and agri¬
position by financing
cultural
development
of
both industrial and agricultural devel¬
to play.
By international investment of
upon
Bank
far different from what it has ever
Britain
From 1815 to 1914 Great
contributing factor to the fears
and
tional
international
Great Britain's Past Position
symptom was clearly
was a
I may point out that
80% of the capital of the Interna¬
of borrower and
utilize foreign capital
development
standpoint
lender,
third
the
In
or
for the restoration or
In passing
the
international relations.
the
of
War II.
and induce rather than avoid poor
that
which
of
disease
economic
failure
in
had
occurred, the sense of
meantime
Bel¬
Denmark,
gium, Estonia, Haiti, Italy and
investment.- Japan had no defaults until World
international
wise
Loans
U.
the
in
con-
to an increase in
But these results flow only
nouncement of the
bank
investment
its
on
ribute directly
want. There has
been, and still is today, a tre¬
mendous need for relief abroad,
misery
or
Safeguards
from starvation
dollars for relief
and World Bank
Demand
The
for
Dollars
A further
In the second
place, and this is
most important, of this $1,550,000,000, only some $725,000,000 is rep¬
resented by United States dollars;
the remainder is represented by
the local currencies of the various
members other than the United
States—pounds,
francs, kroners,
pesos, and the like.
Only a rela¬
tively small portion of this other
money,
contributed by the few
other
countries
which
are
today
capital-ex¬
porters, is immediately available
for lending purposes.
Moreover,
the need of practically all poten¬
tial
borrowers
is primarily for
in
the
dollars.
position
of
The Bank must, therefore,
lending funds partly
to this $725,000,000. but primarily
to the sale of its securities in the
look
for
its
reason
for the estab¬
lishment of the Bank
was
the
rec¬
ognized necessity of avoiding the
misdirection
the
of
As
vestment.
United
international
the
experience
States
in
the
in¬
of
1920's
investment,
all too
easily lose its way. By reason of
its character as a public interna¬
tional
agency,
the International
Bank is in a position to secure
information, both with respect to
the
economy
of the borrowing
country and with respect to world
economic trends generally, which
is not available to private inves¬
demonstrates,
without
tors.
able
such
guidance,
may
Such information is invalu¬
in
appraising the merits of
proposed projects and urograms
in assessing the risks which
and
their
financing involves. Further¬
because of its character-as a
public international agency, rather
than a simple lending agency, the
other words, will be made out of Bank is in a position effectively
funds borrowed by it from private to supervise the expenditure of
investors, and not out of funds the proceeds of the loans which
contributed by the member gov¬ it grants, and to maintain contact,
private investment market, pre¬
dominantly the United Spates mar¬
ket. Most of the Bank's loans, in
ernments.
more,
even
after the
period of disburse-
Volume
165
Number 4588
with
ment,
THE COMMERCIAL & FINANCIAL
CHRONICLE
develop¬ nomic health in the world can be
ments and trends in the
borrowing and I sincerely hope will be, sig¬
countries. Finally, since the Bank nificant. The
production resources
is not primarily a
profit-making and facilities, the trained man¬
institution, it will not be subject power, the will to produce, are
to the temptation of encouraging all
present. What is needed are
excessive, or otherwise uneco¬ the raw materials and capital
nomic, borrowing by its members. equipment for reconstruction and
In the long run, however, inter¬
development. The Bank's loans, to
national investment of capital is the extent
that they make such
primarily the function of the pri¬ raw materials and capital equip¬
vate market, not of public agen¬
ment available to the borrowing
cies.
The
founders
of
the
Bank
of
fundamental
its
purposes
is to promote private foreign in¬
vestment, and that, to this end, no
loan may be made by the Bank
when the loan is otherwise avail¬
able to the borrower in the market
on
reasonable terms.
Moreover,
the
Bank
is
to assist
empowered
private capital by its guarantees
of and participations in private
international
degree of
well
loans.
Indeed,
of the Bank may
inverse ratio to the
in
of
its
time
urgently needed.
contribution
of
services
are
The greater the
the
Bank
the
to
ternational trade.
suffer
the
abroad.
If
bring such
capital together, we
may
help create an expanding
world economy, and, if we do, it
will represent a large step for¬
tion of the Bank.
the
Bank
enced
will
by
One is whether
be
influ¬
unduly
political questions, and
the other is whether the represen¬
tation of potential borrowers on
the
Bank's
Directors
Board
will
Executive
of
result
in
improvi¬
dent lending.
The
Articles
the
of
Bank
pro¬
expressly that loans shall
only be made for productive pur¬
other provi¬
many
sions which restrict
the character
of the loans which can be made,
political loans as such are defi¬
nitely excluded. The Bank need
only follow its mandate and act
in the independent manner which
the Articles clearly contemplate
to insure that no so-called politi¬
cal loans
are
intention
of the administration of
the
that
Bank
It is the firm
made.
that
mandate
will
be followed:
So
tors
far
the
as
Executive
Direc¬
concerned, it is true that
number of them represent po¬
a
are
tential
borrowers, but
number do not.
only after
a
dation for
a
a
controlling
The Directors act
favorable recommen¬
loan is made by the
administration; in fact, the charter
of the Bank forbids any loan being
made
that
is
disapproved
by
a
loan committee which is
composed,
ip practice, of the principal offi¬
cers
of the Bank.
Furthermore,
it
a
has
been
very
desire to act
conscious
as an
of
part that it will play in the course
of its operations. If the attitude of
the members of the Board of Di¬
rectors
is
indicative
of
the
state
of mind of the member
there
will
be
the members
countries,
developed among
a sense
of co-respon¬
"The
Jefferson,
having
struck
the
spark,
foresaw the need of
kindling other men's hearts. He
had probed deep into this
new
miracle, into the character
nation
new
that
of this
endowed
was
with it. And he had learned that
freedom was a law that could not
He
knew
that
freedom
would have to be written and re¬
written in the blood of those who
cherished it.
His
thoughts were prophetic. In
1785 Jefferson,
writing to James
Monroe from Europe, poured out
these two—peace.
Market
on
find
may
to
come
adore
it
own
climate,
manners
return
your
to
make you
.
.
and
.
add
your testi¬
Corp.
on
April 15 offered, as a specula¬ mony to satisfy our countrymen
how much it is in their interest
tion, 28 000 shares of $5 par value
to preserve, uninfected
by con¬
common stock of
Carney Fasten¬
tagion, those pecularities in their
ers, Inc.
The stock was priced to
government and manners to which
the public at $6.50 per share.
they are indebted for those bless¬
Carney
Fasteners,
Inc.
was
ings."
Mitchell
formed
Securities
in
New
York
in
October
1946 to manufacture and sell slide
machine
which
com¬
an
with
The
assembly
line
will
constitute
the
first fully automatic line of slide
fastener production machines in
the industry, totally eliminating
manual
operation.
personnel
on
Since the only
the line will be
su¬
pervisory it is expected that this
will
result
in
a
relatively
manufacturing cost.
low
At present the company is pro¬
ducing zipper chain from
one ma¬
chine at its Columbia, S. C. plant.
Seven other machines presently
under
are
sembly
pected
construction.
line
to
Full
there
into
the
has
been
field
tional investment
of
those
operations are ex¬
about June
Upon completion of the pres¬
financing, capitalization of the
ent
shares of
ing.
The
consist
common
of
61,000
stock outstand¬
has
company
no
fund¬
ed debt.
even
and
of
a
collecticve effort
the
members
to
on
The
my
see
the
remember
diffi¬
"the most momentous problem"
since independence. At that time
as
the
peace
of
the
world
was
threatened by the so-called Holy
Alliance.
The
Russian
Emperor
had
issued
ukase
a
prohibiting
citizens of any other nation from
navigating
miles
of
fishing within
or
the
Northwest
100
Coast
of
North America. Imagine the nerve
of such an
Emperor\prohibiting
Americans
home
from
fishing in their
The^Jnomentous
waters.
problem,
however, was not too
Jefferson, Adams, and
Monroe, for the United
much
for
James
States
issued
gone down in
Doctrine.
wars
ters
It
which
as
has
the Mon¬
declared
"in
the
of European powers in mat¬
relating to themselves we
have
it
ukase
a
history
taken
never
comport with
part,
does
nor
policy so to
only when our rights are
invaded or seriously menaced that
we resent injuries or make
pre¬
our
do. It is
paration
for
system
Annual Picnic June 20
from that of America."
MILWAUKEE, WIS.—The Mil¬
waukee Bond Club has announced
that its annual picnic will be held
Friday, June 20, at the Mer¬
Country Club, Waukesha
County, Wis.
on
rill Hills
Shields Adds
CHICAGO, ILL.
Sullivan
to the Bank.
the creation of conditions of
eco¬
Staff
been
—
Richard A.
added
to
the
Co., 135 South
La Salle Street.
is
powers
One
successor
Harry S.
the
essentially
later
years
of
hundred
principles
defense.
our
we
and
different
twenty-four
find
being
those
applied
President,
Truman.
The
allied
A controlled
...
radio,
utter
fixed
elections,
supression
of
A
Combined
The
this
Effort
Essential
ultimate
policy
consummation of
be attained only by
can
It
the combined effort of all Ameri¬
We
cans.
same
each
must
have
that
itself
of
in
another
miles
here
to
they
vastly
city
from
used
but
be
"across
the
across
different
horses
and
And
so
"average of
an
is
it
now
was
betting
L
board.
they changed to
they have
board"
board
from
the
across
20%"
the
found out that cut¬
soon
ting taxes
fighting spirit that tonight
evidences
thousands
now
As to the riddance of the public
debt, you will remember that
fourply promise of balancing the
budget, reducing the debt, paying
the cost of good government, and
cutting the income tax by 20%.
per¬
sonal freedom."
confused
so
lost the average.
even
(Special to The
SOUTH
Financial
BEND,
Chronicle)
IND.—Richard
our
This
against the progress of liberal
principles. Today the progress of
liberal principles throughout the
tical
doctrine
of
"At
world
must
the
by the poli¬
totalitarianism.
aptly put it in these
present
history nearly
choose
moment
every
between
in
nation
alternative
associated
ways of life. The choice too often
has not been free.
"One way of life is based upon
the will of the majority and is
has
become
descendant
the
of
illustrious
the
John
that
they
really
"Mom." You remember last year
when they were out trying to get
votes—and it looks like they were
successful
they said "Just take
'Mom,'
left
for
foreign
and
was,
soil—France
the
as
of
envoy
it
the
United States he faced Talleyrand,
the French foreign minister. The
Government that he represented
innovation of his time, a
philosophy in political econ¬
omy, based upon self-government
and freedom. Today that innova¬
was
an
new
tion
stands
the
as
oldest
living
government in the world. I say it
was an innovation in Johns Mar¬
shall's time. We will have another
innovation
not
keep
U.
our
time
ourselves
to present
No
in
if
we
the
on
do
alert
day influences.
S.
Ruthless
Imperialism
tells
committed to
ism
and
—
the
people
ruthless
a
war
Union—tells
cruel
with
lie.
a
of
It
imperial¬
the
is
Soviet
a
most
falsehood, because it reveals
utter lack of
an
—
off price controls and
'Mom'
being
housewife.
can
'Mom'
And
herself.
have
our
running
We
those
out.
sugar and your
coats and your
prices/1
Ameri¬
they said to
'Never fear.
of
way
bureaucrats
leave it to
the
And
You'll get your
steak, your petti¬
hats, all at lower
today
"Mom"
is
standing with her hands on her
hips and she's waiting anxiously
to call the next turn. It
only took
her 100 days to get
enough. They
have not found the alibi yet for-
800
butter, $100
Pop's
shirts
dresses,
with
the
and
short
for
tails
and .the
long prices. They're look¬
ing mighty hard, and I assure you
they have left no stone unturned
not even the gravestone of
—no,
OPA.
who
understanding
or
appreciation of the American way
of
life.
As in
Jefferson's time,
however, this is no time for
hysteria. It is a time for clear
thinking. The cheap, blundering
The average American, the man
the street, knows the answer.
He knows, too, that the difficul¬
in
ties ahead of
our
insurmountable.
ber,
country
And
1948 the people
are
in
not
Novem¬
of America
will voice that want, will answer
that need, at the ballot box.
"We Have The Man"
assult
The people will want a man in
the Presidency who has proved
upon
his
now
being made by some
the bi-partisan foreign pol¬
of our nation must not be
icy
allowed to provoke action on our
which would be utterly out
keeping with democratic prin¬
ciples. Democracy is ndt redeemed
by reverting to the practice of
dictators. The dignified procedure
part
of
of democracy demands the imme¬
leadership, who
to have the
because
can
has
be trusted
of tomorrow
answers
he
thq
answers
of
today.
And
they
know
have
we
the
man.
Yes,
have the
we
shown
that
he
man
who has
rise
can
above
Congress of leg¬ self-interest, above political am¬
islation implementing the Truman bition, a man who has been guided
doctrine and providing protection by the simple formula—and I am
against expanding totalitarianism. quoting now—"to do in alL cases,
from day to day,
Such a vote, like the cannon shot
without; regard
to narrow political considerations,
at Concord, "will be heard around
diate passage by
the world." It will be the
to
those
who
answer
after
returning to
private life would attempt to ex¬
ploit the respect paid to the high
office they formerly occupied. Our
position is crystal clear. Such ex¬
ploitation is not only bad taste,
what
Those,
are
The
have
all
best
me
for
the
people."
our
fellow-Democrats,
my
big man's words. And they
a
been
lived
up
to by
big
a
man's works.
The
Riddance of Public
to
seems
welfare of
it is bad Americanism.
and
whose words I
man
quote
whose works I cite is Harry
Debt
own
warns of the attempted
encroachment of Russia. The Holy
world is threatened
of
alibi
need the most of all is what to tell
Marshall, better known as the
Chief Justice of the United States.
John Marshall, too, was once the
S. Truman.
declara¬
Austin, Inc., Na¬
tional Bank Building.
Cox
with Harrison &
brother
a
tion again
Our President
With Harrison & Austin
Americans—a
Telling "Mom"
Another
same
by
words:
D.
.
has
staff of Shields &
position
where it cannot meet an obliga¬
The contribution of the Bank to
to
(Special to The Financial Chronicle)
member finds itself in the
tion
and
the
Europe that the United States is
Holy Alliance
would
political
intro¬
the part
that no
mighty
against. They
stopped looking for the
answer, but are still looking for
the alibi.
oppression.
and
deeply
more
Milwaukee Bond Club
most effective
a
leaves nothing is
legislate
and
press
One
commence
will
you,
about
words
He
roe
interna¬
stabilizing factor.
This attitude
may take the form of the strictest
adherence by the borrower to its
own obligations on the one hand
to
have
today.
as¬
1947.
company
today,
culty of 1823 which he described
believes that this
company
before
him, the out¬
side world of hungering
peoples,
of desolate cities, burned forests
and
bare
fields, he would feel
auxiliary equipment neces¬
for the manufacture of com¬
plete side fasteners.
the world
at
proceeds of this offering
be used by the company to
complete construction of and to
place in operation a fully auto¬
matic production line consisting
of eight chain machines
together
sary
stand
and
say
those
again, without changing so
much
as
a
sentence, a single
phrase. But I think, as he looked
produces zipper chain
unusually rapid rate.
will
could
alive
were
words
auto¬
The
he
Jefferson
fellow-citizens,
new
matically
at
If
Alliance sought to enforce against
that
one
Secretary of State. In 1797 he, too,
country, its soil,
equality, liberty,
its
laws, people and
on
convenient
Europe. It will
your
America the divine right of kings
find
from
hard
through the acts of a distinguished
American, who thinks, talks and
"My God! How little do my fights for our kind of
Democracy
countrymen know what precious
a
Pennsylvanian — the dis¬
blessings they are in possession of, tinguished
Secretary
of
State
and
which no other
people on George C. Marshall.
He
comes
earth enjoy
I sincerely wish from
a
long
line
of
peerless
If this be the case, we may
duced
is
the
life
of
his heart in these words:
sibility for the obligations to the
Bank.
of
will
way
the
upon
minority, forcibly imposed upon
the majority. It relies upon terror
be written in indelible ink—once
and hence forever
guar¬
anteed.
second
based
enacted
its
Placed
experience, after
short time thus far with
objective
responsibility
for the success of the Bank. They
are men of distinction, attainments
and self-respect. There is a sense
of collective responsibility among
the Board which may be one of
the most important factors in the
development of the Bank and the
body,
of
the
my
the Bank, that the Directors have
every
and,
Carney Fasteners Stock
type chain
vide
poses—and by
the goal we all seek
prosperity
fasteners. The company has
plete rights and title to a
Political Motivation Excluded
burns the
distinguished by free institutions, applies to mine as well, just don't
government, free squeeze easily. In fact, the Repub¬
elections, guarantees of individual licans found that the only way
liberty, freedom of speech, and they could possibly legislate that
religion, and freedom from polit¬ promise was to pass an arithmetic
ical oppression.
law, but the proposition that one
representative
...
ques¬
tions which frequently are raised
in connection with the organiza¬
en¬
fiercely against the advanc¬
first
you
close, I would like to
few words about two
a
tide
—
ward toward
handmaiden
say
can
dark
a
ing night.
can
and
we
stability and prosperity through¬
out the world, the sooner can pri¬
vate agencies play their traditional
role in the process of international
I
indeed, they
earth
lives and breathes and
more
never
do
only a small part.
But peoples
who contribute the major factors
to their own
recovery deserve such
help as can be given them in the
form of productive capital from
—stability,
Before
We must
the
gulfs it and snuffs it out irknation
after nation, here in
America it
whether we
lender, that loans
or
do it all;
creation of conditions of economic
investment.
(Continued from page 11)
across
delusion,
be borrower
can
peoples
the
success
be
length
29
Implement the Truman Doctrine
countries, will increase their level
off productivity and, as a direct
result, will serve to promote the
long-range balanced growth of in¬
recognized this when they wrote
into the charter of the Bank that
one
(2221)
economic
It
is
interesting
Jefferson
also
to
note
possessed
a
that
fine
instinct in the domestic problems
of
the
nation.
He
cherished, as
Harry Truman, "peace, econ¬
omy, and^the riddance of public
debt," believing that these are the
high road to public, as well as
private prosperity and happiness.
On economy and the riadance
of the public, debt, our political
opposition are mighty busy these
days. They remind me of the old
Easter egg hunt, except theirs is
an alibi hunt.
They talk of cut¬
ting the budget $6 billions but
after they go back to the study of
does
Whefi
to
a
man
pledges
his
do
best
and
best
is
a
this
President,
Congress
that
will stand behind him and hold up
his
hands, will be
the' choice
of
the American people at their next
opportunity to make
that is
believe
why I
there
overcome
and
Democratic
a
Democratic
be
figures,
peace
world, they elect him. That
why
and
prosperity and
means
in the
the
Some
that
pledge, people love him. When his
their arithmetic they find it can't
done.
himself
keeps
future
say
is
that
or
a
choice. And
to you, I do not
any
problem
America
solve.
of
cannot
30
THE COMMERCIAL &
(2222)
prises
Financial Expert Looks at
A
(Continued from page 9)
sound.
United
secure
the
States to be prosperous and
in the long run if most of
is
It
impossible
for
is unprosperous
and in
disorder.
How we
should give effect to our interest
in helping other countries—it is
not merely a matter of doing good
the rest of the world
—is of course a
complicated sub¬
ject.
we
Treasury
Our Own
U. S.
debt such as boosted our national income —
which in terms of prewar prices
we have and if we tax accordingly
we
can
spend what we are now is not up nearly as much as the
spending. But I am reminded of figures suggest. And we must not
the backwoods legislator who was forget that the debt burden would
be greater if prices fall. Thus if
beginning his first term. He said.
"I don't understand all this about average prices fall by a fourth, a
debt of $260 billions would be
sinking funds and floating debt.
What we should have is a sinking equivalent in burden to something
like $350
billions. In the past
debt and floating funds."
Clearly our Secretary of the prices have fallen after great wars.
lions
Financial Misman¬
agement
can
carry a
and
members of
right in saying that
For many
many
Congress are
debt reduction should have prior¬
behooves
reasons,
to
us
Thursday, April 24, 1947
FINANCIAL CHRONICLE
therefore, it
reduce
the
debt,
pay
postal
the
like
should
Then there
are
other payments
for the benefit of pressure groups.
These range
from a racket
to
begin
without
$20 to $80 billions. The knows how wastefully they were
figure is over $100 billions if we generally conducted. There is un¬
Now let us get down to specific
add
Federal
Reserve
holdings. doubted room for greater economy
problems. In order to get and keep
Largely as a result, total demand and efficiency in our forces, and
our finances in order, and at the
deposits in banks plus currency for postponement of some pro¬
same time to safeguard our essen¬
outside the banks grew from about grams. International expenditures,
tial
interests, we are facing
a
also, do not compare as vote-get¬
$40 to $110 billions.
series of vitally important deci¬
ters with a few superfluous post
Our
price
rise
is explained
sions.
Many of these are about
offices in the right places.
Yet
matters without much precedent. mainly by the fact that we bor¬
considerable international expen¬
rowed to cover more than half of
Most of these decisions come to
ditures are vital for our national
our
War costs.
We could have
focus in the budget—talk oT which
interest
and
security for some
is now so much to the fore.
A done better. The Treasury esti¬ time to come.
mated on the basis of 1943 prices
generation ago our national in¬
Many large cuts in our budget,
that for 1944 available consumers'
come
was $50 billion, a third of
however, can and should be made.
what it is now.
Yearly Federal supplies would be $88 billions but
A first priority, in time of infla¬
that
disposable national^ income
expenditure and
total national
over
and
above
existing taxes tionary tendencies and shortages,
debt were under $1 billion each.
would be about $135 billions—an is to cut to the bone on public
Federal, State and local expendi¬
works and postpone them wher¬
excess of buying power of $47 bil¬
tures absorbed only about 5% of
lion. Yet there was violent oppo¬ ever possible.
Surely this is no
our
national income.
Now with
sition when the President asked time for the Government to go out
income well above $150 billion
for a tax increase of $17 billions; competing for scarce materials and
we are spending around 30%
for
labor. It does not make sense to
government.
And debt is more again when the Treasury asked
for $10 ^ billions and Congress carry over into a time of high em¬
than two hundred fifty times that
finally voted an increase of only ployment the execution of pro¬
of 1914.
Our
from about
Specific Problems
to about $1 billion. The 1944 budget grams intended to create employ¬
ment.
The country as a whole
of situation was not well handled
either by the Executive or Legis¬ needs to fight the efforts of local
a
government in ordinary times,
lative branches. But the result is political and pressure groups to
as regards its finances,
is to be
Also State
our
national responsibility. In a fill the pork barrel.
sound.
Are
I
old-fashioned
am
enough
believe still that the first duty
finances
our
Can
we
a
sound?
debt of $260 bil¬
afford and should
spend $30 to $40 billions yearly
lions?
we
handle
Can
we
for government?
The
answer
tional
income
is that with
of
over
a
$150
sense
we
we
are
asked for the inflation
getting.
Our debt of
and
local
finances are mostly in
better shape
$260 billions is, of
than Federal finances.
Apart from exceptional cases, the
curse, less burdensome at present
States
should not
high prices than if prices had not
The
Washington.
bil¬ risen.
price rise also has from
na¬
draw
money
Also
enter¬
there
tween
and
individual
tax
individual
to
more
taxes.
Readjustments
enterprise, such
to
encourage
as
spreading
unusual incomes and losses over
periods,
longer
avoid
to
and
of the uneconomic effects
some
of the
capital gains tax.
stability as possible
tax system, with varia¬
tions to be made mainly in the
rates of individual income tax.
As much
the
in
coordination
Better
Fed¬
of
eral, State and local taxation.
HI
Avoid
Must
Depressions
Sound
public finances are not
enough. They are only the begin¬
ning. In 1835
tional
debt
Yet
two
into
one
of
we
and
paid off
had
later
years
our na¬
surplus.
a
entered
we
of the worst depressions
our
history. Also we had sound
public
finances in the 'twenties,
before our greatest depres¬
sion. It is clear that sound finan¬
just
will not prevent a depression,
ces
that
and
measures
avoid
are
might be no sur¬
if
other
take
to enjoy
are
we
stability.
it is imperative
depressions. First
the future
For
to
must
we
also
reasonable
the
deep
direct
effects
serious
on
Then there are
indirect and no less serious
our own economy.
the
world-wide
The
repercussions.
United States has become the eco¬
nomic
and
financial
world.
The
effects
of
hub
the
depression
of
radiate
would
here
all
in
direc¬
tions, to the hurt of other coun¬
tries, and bounce back on us. The
psychological consequences would
be to reduce the defences against
totalitarianism.
Whether
or
success
we
like it
failure of
or
our
not, the
free en¬
terprise system will be judged—
and its life is likely to depend—
not on whether it reaches heights
prosperity and welfare and inliberty,
but
upon
the depths.
And it may not much matter even
whether our depths are above the
heights of most of the rest of the
world. It will be the extent of the
of
dividual
whether it keeps out of
fall
that
will
count.
Karl
Marx
predicted that capitalism would
collapse as a result of inability to
with depressions; and his
present-day followers count
heavily upon such a break-down.
cope
Those of
us
who believe in the
free
enterprise system
are
on
treacherous ground if we merely
take
refuge
in
opposition
to
"planning." We must have a plan,
or a program,
if we prefer that
name, to reduce economic fluctu¬
ations and to prevent recurrence
of such
a
depression as that which
began in 1929. It is no good to say
we
should not tamper with our
economic system. If and when we
the postwar period
the' time for a major overhaul
our tax system. Adam Smith's
famous
canons
of
taxation—abil¬
are
threatened with another seri¬
depression—and I think a se¬
depression is not now in
sight—we shall tamper again as
ous
rious
have
done
certainty, convenience
and
economy—are
still sound.
These canons imply the proposi¬
tion, of which we hear so much
we
that the tax system, con¬
sistent with fiscal needs, should
policy will
ity to pay,
today,
least
and
income
corporation taxes, to
duplication and shift the
burden
In any case
of
,
and
reduce
plus.
is
when
tax
higher incomes to encourage in¬
centive
and
intelligent risktaking.
Readjustment of relations be¬
international expend¬
itures, and with the prior need
to reduce the national debt. Also
tax yield estimates are for the
year ending in June, 1948, on the
assumption of about the present
level of business activity. If we
have a recession—and no one can
say we shall not—tax yields would
and
income
in
conditions permit, including re¬
duction
of extreme
rates
on
of necessary
fall
cut
A
such as
of unwanted
of price sup¬
port and such things as export
subsidies for cotton. We should
get rid of all these as soon as
actual commitments permit. These
programs raise costs throughout
the country, and hurt the ordinary
laborer and consumer as well^as
the export trade. They are incon¬
sistent with our international pol¬
icy of removing trade barriers and
encouraging worldwide recovery
of trade.
We put penalty duties
on subsidized exports from foreign
Treasury
buying
silver to programs
too much
Fortu¬ delay. The $3 billions cut talked
When we look at the disturbed ity over tax reduction.
about is pretty small. Our sights
nately we have a productive econ¬
financial conditions abroad, we
omy
and machinery to collect should be raised to a figure of the
should not have the idea that the
countries to us; yet we subsidize
enough revenue to cut our debt. order of $5 to $10 billions as soon
United States has an impeccable
some
of our own farm exports.
If we do not cut it when the coun¬ as possible.
record of management of its own
Finally there are such things as
try is prosperous and everyone
The objectives of debt manage¬
finances. Let me cite a few cases.
pensions and veterans' bonuses.
has money, we shall be in trouble ment are well stated by the Com¬
During most of our history our
The record of these is not a savory
when things are not going so well.
mittee on Public Debt Policy as
banking system was weak and in¬
chapter in our history. We have
Good times are not always with
"the fostering of high employment a chance to learn from 'our un¬
efficient, subject to periodic pan¬
us.
Our history shows alternating
and a high total income for the happy experience.
ics.
From 1929 to 1933 the total
number of banks fell from 24,000 good and bad periods. When next country," "continuity of prosperity
Clearly the cost of general gov¬
a bad period threatens, there will
rather than 'booms and busts'", ernment needs careful overhaul¬
to 14,000—and that decrease was
be great pressure to try to spend
avoidance of both inflation and
not wholly voluntary. We had no
ing.
Our Government has "just
our way out of it.
The supreme deflation, and reasonable debt re¬
budget system until 1921, though
grown," like Topsy.
A careful
aim of any Administration is to
duction.
These objectives, I am study
Great Britain and others have had
of
its organization and
stay in power. Republican or Dem¬
confident, can be accepted by pa¬ means of greater efficiency and
budgets for generations. We have
parties economy is indicated. Such a study
often spent recklessly. For exam¬ ocratic, the voters will expect it triotic elements of both
to cure a depression, and it is not
both in and out of the Govern¬
ple, the peak year for pension
might best be made by a bi-parti¬
likely to refrain from trying the ment.
costs up to World War I was 1913,
san
commmission
representing
spending cure.
exactly 50 years after Gettysburg.
Yet the economic problems of Congress, the Executive, and the
We may learn from the experi¬
In currency matters we have not
debt management are not easy. public. And its results should lead
ence of other countries.
The Brit¬
distinguished ourselves. From the
These problems are under careful to action and not be pigeon-holed.
ish debt after World War I was
'seventies up to now we have been
Before World War I we were
around
£8
billions.
That was study by our Government econ¬
In trouble, at times seriously, from
omists; and the studies of the spending about $700 millions a
about twice their national income.
silver and other measures. And in
Committee on Public Debt Policy year—we talked then in millions,
It was much heavier then for them
1933 our monetary system broke
should prove very helpful.
The not billions—for the Federal Gov¬
than our present debt is for us,
down from extreme deflation. We
Our entire civil estab¬
immediate Treasury policy of re¬ ernment.
for they had nothing like the mar¬
have since done a good deal of
tiring debt held by banks and lishment cost $210 millions. World
gin of surplus that we now have
monetary
zigzagging, with our
War I led to a five-fold growth of
with our enormous productive ca¬ keeping up the sale of savings
recent price rise being about the
bonds to the public is clearly wise. Federal costs, to around $3.5 bil¬
pacity.
And they had suffered
fastest in our history.
As to interest rates, the problem lions in the mid-twenties. Allow¬
heavily in World War I. The total
Last month I visited Honduras.
is
complicated.
As things now ing for the price rise of about 45%,
of their debt did not change much
I found them facing no serious
the real increase was about three
between wars. Because they could stand, the balance of advantage,
financial problems. Their budget
I believe, is to move toward a and a half times.
not reduce their debt, they now
is balanced and they spend no
In 1935-39 average expenditures
freer play of economic forces in
bear a debt burden of over £25
more
than they can collect in
This is
the long run but taking pains to were about $8 billions.
for them is far
taxes. Their total debt is less than billions, which
prevent any sudden changes that equivalent to about $14 billions at
heavier than ours is for us.
a year's revenue.
Their currency
would affect the value of govern¬ present
prices.
The President's
As
to
many
other
countries
is stable and there is little infla¬
ment securities.
budget proposal of $37.5 billions
whose debt runs into big figures,
tion.
Perhaps the United States
thus is a little more than two and
Now, if the budget is to provide
the debt problem is swallowed up
should ask Honduras to lend it a
a
half times the real level of
in the much graver problem of a surplus for debt reduction, it is
financial adviser.
spending before the war.
checking inflation. Their spending clear that revenues should exceed
While many of our financial ills
A good practical objective in
has not been voluntary, to cure a expenditures. Obviously the first
are due to war and circumstances
the first instance is to hold the
depression,
but
for
immediate principle is to hold expenditures
beyond our control, let us hope to
real level to about twice that of
needs of war and survival, or has to a minimum. What that involves
do better in the future than we
been forced on them by the enemy. is now being debated throughout pre-war, say to $28 billions on the
have in the past. There is warrant
the country.
Clearly cuts should basis of present prices—not count¬
for this hope in the progress and They have created so much buy¬
ing debt reduction and emergency
and will be made. But where?
wider understanding of economic ing power, by borrowing from the
There is danger of cutting in the postwar outlay.
analysis, and the growing technical banking system, that prices are
Now, as to taxes. Their weight
Leaders in both
bid
up
nearly
ten-fold as in wrong places.
competence of financial experts
is obvious to us all, and pressure
both in and outside of the govern¬ France, ten-thousand fold as in parties as well as our military ex¬
to reduce is strong. Of course we
ment. Our problem is to make a China, or even billions' of times perts have pointed out the dan¬
should reduce taxes as soon as we
correct analysis, to promote wide as in Greece and Hungary before gers in cutting our defense pro¬
gram below the, proper level, in¬ properly can. But decision as to
understanding of basic issues, and their currency revisions.
We must pay careful attention cluding adequate provision-for our the time and amount of reductions
to act on the basis of the interest
should wait until the total picture
of the country as a whole rather to the relation of our debt to in¬ responsibilities in occupied coun¬
tries. With this principle there is becomes more clear. We cannot
than yield to harmful pressure flation. We a^l know that in order
no
ground for dissent, but its afford to reduce the total tax
from special groups and cheap po¬ to finance the War-, we had to cre¬
ate bank credit. From Pearl Har¬ application is open to some argu¬ yield while inflationary forces re¬
litical interests.
ment.
Everyone in or able to main as strong as they are, with
bor
to now, commercial banks'
n
holdings of national debt grew observe our military operations such uncertainty as to the amount
and
of which are troublesome,
regressive and hard to admin¬
ister—retaining mainly those on
liquor, tobacco and gasoline.
many
service
their way.
impede
high
employment
economic stability and prog¬
have
cope
a
plan
we
to
with it. We reject, therefore,
the extreme view that
there
unless
before
well-considered
were
a
be enough.
a
let-alone
Even if
chance of following
such
a policy in a major depres¬
sion, it would bring needless suf¬
revision, like govern¬ fering and loss.
At the other extreme
is the
reorganization, is a good
subject for recommendations by a view of those who are impressed
strong
bi-partisan
commission with the doctrine of over-saving
representing Congress, the Exe¬ as the chief cause of depressions
in mature countries. They believe
cutive, and the public.
This subject is too complicated we
do
not
spend enough and
to
analyze here in any detail. therefore hold that budget-bal¬
Some of the more important ele¬ ancing and high employment are
ments in tax revision, however, irreconcilable.
These
persons
Tax
ress.
mental
include:
would turn to public
of all
few of the excise taxes,
Abolition when feasible
but
a
spending, re¬
gardless of deficit, to provide de¬
mand for goods to offset an ex-
Volume-165Number
THE COMMERCIAL & FINANCIAL
CHRONICLE
4588
(2223)
their finances and promote unrest. the
money and not try to collect."
Thus we would defeat our ends I
It does no good to kid ourselves
pected shortage of consumer de¬
mand. A debt is not really a debt,
war,
Chungking with nearly : a
million
people was bombed to
they argue, if it is owed to your
neighbor* in the same country. As
rebuilt.
Other by weakening and not strength¬
great cities — Shanghai, Nanking, ening them.
The best defense
Canton and Hankow—were partly against communism is rehabilita¬
to
this
theory I merely point out
that while deficit spending may
pieces
then
and
Many lesser cities and
destroyed.
tion
and
and
recovery
by
a
merit
to
extent
some
in
owns
almost
were
respect
The
main
elements
what is
of
are:
(1) A better understanding of
the
and
causes
nature
of
de¬
pressions and how to recognize
signs of their approach, so that
suitable action may be taken
time.
(2) A
of
program
in
"suitable
intangible damage. There is mal¬
nutrition,
sickness,
discourage¬
ment, and strain; and the scatter¬
ing of organizations, both governrfient and business, during years of
enemy occupation.^Extreme infla¬
tion demoralizes public employees,
as
the buying power of the pay
falls, and it makes nearly every¬
habilitation and overall direction
of programs like those now
being
discussed is
We
therefore,
he knows
center
the needs of
upon
;l
•
•
policy such
J jeopardize
our
y.
financial
own
one
can
what
re¬
now
such
say
aid
order of
cost.
But
it
haJf in the next year, and should
taper off gradually. We can and
urgent needs for goods. The
effective
should stand such a cost, since
t makes it almost impossible for
procedure, I be- few things will contribute more to
To dwell upon the measures in any government to govern well. lieve, is to give help so far as posthe future security and prosperity
sible to specific and proven
any'detail .'is not possible here. It These conditions promote dispon¬
private
the United States thah the feent and lead to calls for radical enterprises
in
these
is reassurihg that they are
countries, I covery of nations that are in disbeing
one
more
or
of
less
speculator,
a
action."
most
carefully studied by competent
people—both
governmental
au¬
thorities in
action.
We should be patient and sym¬
Washington, and pri¬ pathetic in
judgment of these
vate agencies such as the Com¬ countries.
They are injured and
mittee for Economic Development.
sick, physically and psycholog¬
I shall merely
say, by way of out¬ ically.
You cannot expect a man
line, that about three-fourths of knocked in the head and suffering
our national income
goes for con¬ from fever to be fully efficient.
sumers' goods and
government, in
Our action should.be primarily
which variations are not
great. economic.
This falls under two
The high variation is in the re¬
heads.
The first is to provide
maining1 25% which is used for
temporary aid from our strength
durable consumers' goods and in¬
to them in their weakness.
The
vestment. The problem is mainly
second is to press for creation of
what intelligent business can do
sound working system of inter¬
for itself, and what
government national trade and finance.
We
can
wisely do, in this area. Clear¬ should base our action
upon the
ly business should do as much as
premise that the communistic sys¬
it can for itself. And
government tem cannot
prevail, either by force
action may include the
timing of or by blandishments, against the
desirable public works, which do
rest of the world if it is free and
not include leaf-raking, to expand
reasonably prosperous.
them in time of depression; recog¬
Many of our people are worried
nition that the budget need not
lest our aid be like pouring water
necessarily be balanced in really
Quite properly
bad years, provided that the defi¬ down a rat-hole.
cits are made good as soon as prac¬ they are against that. Our aid ob¬
should be constructive.
ticable when prosperity returns; viously
and variations in the income
tax
our
That includes in the first instance
IV
providing consumption goods to
help to maintain minimum work¬
ing health. But equally important
is that these countries get to be
What Help to Other Countries?
going concerns at the earliest pos¬
having
in
mind
effects
on
con¬
demand.
sumer
sible moment.
We
now
which is
in
do,
its
the question
to
come
far
from
easy, of what
can and should
the United States
interest
own
to
help
The idea is that we
should
help them to help them¬
selves.
We cannot confer prosper¬
ity
It is mainly for
themselves
to
take
the
upon
them
them.
other countries to return to sound¬
and to stay sound.
needed internal measures to re¬
Clearly store production and solid finances.
should do is to This calls for a major effort on
ness
the first
thing we
keep sound ourselves.
If we do their part. What we do must be
this,
we
help other countries coordinate with, and in some cases
through the ordinary processes of dependent upon, what they do. We
trade and investment. As a
buyer should expect them to take rea¬
of other countries'
goods and ser¬ sonably effective action with a
vices, and a center of large pro¬ view to putting their affairs in
duction to supply what they need
order.
this country is vitally
important
We should contemplate tempo¬
Financially speaking, the dollar is
rary aid under definite construc¬
now
the world's monetary stand¬
ard.
If
prices gyrate
our
they
as
have been doing, they make other
countries'
monetary
problems
harder.
keeping
there
are
ought to do be¬
we
sound
ourselves,
two extreme views. The
first, that we should do nothing
is pretty well discredited. We triec
this
isolationist
approach in
our
aid
the various countries to
Stand
their own feet will vary.
on
World
main re¬
War I the
their
with
carefully made pro¬
grams, there is need for careful
supervision by well-qualified
standing of and respect for their
customs and institutions which are
Let
the
not
us
too
ernment
Unless
were.
tion
on
have
to
means
an
especially when they
with the hard necessities of exist¬
to produce rather
our
than to live off
bounty. Our aid should help
this opportunity to pro¬
provide
duce.; ;Most of
think
to
about i f any
that
middle
Most
the
As in
course
of us
and
them to
come
will
do
so
or
agree
something.
many
cases,
is indicated.
little
war-stricken
world
situation,
situation,
suffered
the
people who stop
this
ought to
we
But what?
a.
our
about
as
we
to
help countries with military
equipment and army reorganiza¬
tion, it is very important to look
carefully at the burden on them
of maintaining a given level of
military costs. We must not over¬
look the question of what each
reforms. What country
order
country
armed
can
afford.
establishment is
pensive,
especially
countries
have
to
hard it
is
for
Over most of
the
uppermost
does not?
they need peace and
their borders, free¬
external interference,
from
chance to
a
ernment, however, should expect
j.
l
—
'
1^
_
them to make such reforms
feasible
in
relation
handling and
Relief aid
not
lend.
wealth
_
our
with
as are
effective
should
we
We
and
of
use
to
help.
give and
great
our
production, and free¬
propose
would
destruction,
war
are so
to help that many of us
be ashamed to
ment, especially if
we
ask repay
could
see
at
where I
was
China,
during most of the
these
we
ought not to place
countries
that
are
sick
injured and fighting for their
lives extra burdens that would be
heavy for them but trifling for
And it will not promote
democratic
ideas
us.
growth of
abroad
if
we
beyond their
capacity to bear. If
do
shall hurt their economies and
must
we
We
told
are
that
strength.
population
our
is likely to level out at something:
"ike ,180 millions before the end
of this century, while the numbers
of
Russia, China, India and other
countries
will
well
above
over
grow
a
heir present total of
ion.
in our
population
will
We shall do well to use the
people
grow.
time
do
bil-
And the proportion of older
when
all
we
we
sounder and
at
are
to
can
the
bring
top to
about
a
stable situation
more
in the world in which later
gen¬
erations of Americans can live. :
0;:
Our best hope,
therefore?
tb
13
keep this country strong and pro¬
ductive, to help adequately from
our strength to tide over the diffi¬
culties
of less fortunate
countries
and to get them on their
feet, and
join in promoting the recovery
o
of
world
trade.
calculated
risks
The
he
incalculable
matters drift.
policy
a
risks
Let
of
letting
not leave it
us
chance, but try to be the
.0
and
costs
such
of
far less likely to hurt us than
are
ters of
mas¬
fate.
our own
Kuhn Loeb Places
April
$40,000,000
The
re¬
Kuhn,
in
a
Loeb
18
&
headed
Co.
offered
a
new
20-year
a
issue
2%%
de¬
bentures, due April 1, 1967. The
debentures, priced at 100% phis'
accrued interest, are being sold
to provide the company with ad¬
ditional working capital required
to
handle
business,
the
of
volume
present
which
reached
the
an¬
nual
fourth quarter of 1946. This rate
of volume continued in the first
quarter of
"Times"
has
economic
I
misery around it. We should learn
war
experience after World
debts—I handled
a
lot
that
"the
inseparable
immnrli'ofh
Vmnnh
"the immediate
leadership in world af¬
fairs"; and that this country "can¬
not
be
politically internationa
and
economically nationalistic."
Parts of the program of reducing
obstacles to foreign trade are op¬
economic
test of
peace is
our
along with
a
lot of that
of
argument and
bad
rate
of
$570,000,000 for the
1947, and is approxi¬
40% above sales for the
first quarter of last year.
mately
Among
need
the
are
additional
for
return
than
in
existed during
rubber
for
in
system at home. Let us also op¬
it as an international system
Without strong American support
recovery
gone
faster.
are
Our
after
In
sue,
and
eco
issue
are
a
31,
re¬
A sinking fund
retire the en¬
by maturity.
addition
to
the
present
is¬
the outstanding funded debt,
capitalization of the company
$40,000,000 of 2%%
debentures due May
other coun
at
in the
March
to
which they
will consist of
RapicFas has been
lower
notice
thereafter on
downward
tire
As to the longer future, we must
recent progress,
*'
days'
has been set up to
expect and plan for a decline in
I processes
and
year
1965,
Decline
starting
30
on
deemable at par.
and
This
necessary
to resume the
East. '"
scale
We Must Anticipate Future
tries
company
Far
the
first
to
and peace—is
financial
it
makes
prices beginning at 103%
likely to prevail.
relative
the
deemed
of foreign trade and in
economic
factor
The new debentures may be re¬
highly-regulated and restrictive
threat
purchase of natural
by the government.
financing of purchases of rubber
regulated and restrictive economic
its
normal
the war and
higher costs,
generally
1946,
latter
all
more
and the termination, of exclusive
public interest. But it would
be short-sighted to yield to such
opposition. We oppose a highly-
system
a
ventories and accounts receivable
eral
vestment—with
to
hence slower turnover of in¬
and
control of the
a
factors
the
governing
working
capital, the prospectus points out,
the
posed here and abroad by persons
and groups having a special in¬
terest that is contrary to the gen¬
luxury without regard for the
our,
said
is
from the political peace"; that the
ic<
greatest democracy chooses to live
from
well
peace
our
rea¬
ttci
.
longer future
on
around
tried to collect them
we
:
use.
or
every
also expect and plan for a decline
in our relative political
the
had
sonable
In
self-interest
for the State Department—but we
armament costs
going to eat.
we
For the
for
men
of
stew
our
help to saddle them with
present
barriers.
nomic strength.
we
low-paid
nation-wide banking group which
and
War I. We got priorities of pay¬
it that
man
an
ment for our relief advances and
prepared
wenty
pose
likely, we should
they
face" of
James Reston of the New York
Our gov-
recover.
long run, which in general is not
do not
the
ex¬
help them with upkeep in the
see to
in
force
very
and navy. Unless we are
back.
modern
air
an
what
thought of most people is whether
are
A
long
U. S. Rubber Go. Debs.
within
dom
and
in
have
but China may need ten
acre,
fur¬
to
We
to China, though
China produces about as much
per
commodity agreements.
these countries need
course
But above all
and
find it necessary
realize
how
today
Insofar
need
world.
wheat
eliminate preferences, to limit re¬
Of
to prevent others from go¬
ing in who would not get out.
shipped
strictive business practices and to
prevent abuses of international
ing.
on
that process de¬
we
the
over
so
get rid of most of the quantitive
restrictions
and
exchange con¬
trols, to enter into reciprocal ne¬
gotiation? to reduce tariffs and
busy
are so
more
for
example, are pro¬
highest wages paid
anywhere, they are being sold all
mess of re¬
strictions and barriers. The object
of the proposed agreement is to
standards—
our
and
auto¬
our
plan
to
can hardly expect them sud¬
denly to become perfect democra¬
have
markets
our
than
more
trade
recovery.
Unless it
succeeds, the world will continue
we
to
reconstruction
can
duced with the
mote
Only
small part of the world's people
have democratic traditions, and
or
its
own.
International Trade Organ¬
ization is our best chance to pro¬
a
cies
re¬
and
other countries
strictions
for
side, lack of means
honest living and high
of which to repay. As a matter of
tentot," likewise is discredited
Foreign* peoples want opportunity
trade
every
to make
trade
our
mobiles,
Many of you know from your
experience how hard it is to
starva¬
rates of sickness and death.
Though
own
struction, disruption and inflation
it
we
hold
nish direct aid.
conditions ourselves,
it is hard to appreciate what these
countries have suffered from de¬
seen
what
to
access
upon
broad basis. The
on a
velops, the less
have
we
foreign
import. The
lelp are not as perfect as we wish
they were, or as we wish our gov¬
actually
as
they
can sell their
goods and get such
funds as they can, in the normal
way, to pay for what they must
we
first hand how little they have oujt,
as
need
impatient if
governments of countries
a
and also
recovery,
needing
those of
ours.
be
ignored..• the
well
of
countries
different from
become
dependent
are
covery
under¬
international relations and merely
quart of milk daily for each Hot¬
World-wide
peace,
suffered
dom from
icies are followed. If we operate
problems.. But we in these countries it undoubtedly
found that they
sooij: fcaught up will be with the aim of getting out
with: us.
The other view, of
as
soon
as
we
properly can, as
countries
continuance
and
for
pump
goods and we will need'""'
With-our head start and
resourcefulness
as
they have
tact
with
firmness,
sympathy with people who have
grievously,
the
possible sound outlets for
ordinary private investment.
because
much richer than the countries we
.
these
see
soon
merely
for
their
technical ability
and
oughness—though these qualities
also
prime
can
short time. But we want the flow
to come of itself. Also we want to
American personnel. Our
person¬
nel need to be chosen not
various countries
Even though loss and destruction
are now worse, it should be possible for the job to be done in
comparable time if the right pol¬
six years in
We
Besides
essential—but
This is closely bound up
measures of immediate aid.
war
with Germany and
Developed countries will
our
theirs.
to the prob¬
come
finance.
ment in local currency.
are
we
lem of creating a sound working
system of international trade and
govern¬
construction took from about one
to
Finally
erprises. Private enterprises
should ' reimburse
will
take for
After
As to what
yond
programs. The need for
should taper off. How long it
tive
tress because of the War.
rather than blanket funds for
gov¬
ernments to ° be used for govern¬
ment operated or controlled en-
the
want
billion and
a
a
tiding
fore
Japan.
figure of the
a
billion to
a
ly developed countries, like
Eng¬
land, Canada and France; and be¬
exactly
very
will
should not exceed
over
>
,
"
"
"
—
soundness? Clearly it will not. No
and other basic
industries. The aim is to
get pro-
meanwhile
;
I have outlined
as
agriculture, mines
going,
the
likely to be beyond
are
storing shipping, railways, roads,
duction
of
But, the question is asked, will
a
attention,
„
being paid.
self-reliance
his strength.
job for civilians.
a
should
and
borrower if we press him in his
distress to give undertakings that
.
needed
transaction a loan
that there is not
a
know
we
reasonable chance of
And it does not promote the self-
progress.
wiped out. Hence there should be an overall
of China's shipping program for each country, caresome circumstances, indefinite ex¬ Nine-tenths
and a great part of its railways fully
coordinating any military
pansion^of public; sftehdinjg can
measures with the civilian
only lead to growing inflation, were destroyed.
pro¬
gram. Our military did a remark¬
^and to moving toward a totalitar¬
But besides physical destruction
able job in the war. B^ the! rc*
ian state.
;here is in these countries grave
have
calling
when
31
.
1, 1976; $24,-
have 000,000 of serial bank notes due
technological 1947 to 1954,. inclusive; 651,091
down
shares of 8% non-cumulative
being copied every-
and
But we need not fear this non-callable first preferred stock,
par
value, and 1,761,092
economic grounds. Our experi- $100
feeling and did not get paid. The where.
late
once
said
to me about 1925, "If we ever
have
Secretary Kellogg
to do this again, let us give them
on
ence
shows
|greatest
that
we
have
trade with the most
our
i
shares of common stock, $10 par
high-lvalue.
■
t
-
32
THE COMMERCIAL & FINANCIAL CHRONICLE
(2224)
our total economy, it is also im¬
portant to keep in mind that we
have many more people gain¬
Stock Marl cet Ripe for Major Rise
(Continued from first page)
these forecasts were a desire
to
the so-called Full Employ¬
Bill, and to get the Presi¬
dent's backing for an 18V2 cents
enact
ment
hour wage increase "to main-
an
tain the
buying power of work¬
Subsequent events proved
ers."
that
this
been
could
group
have
not
Thursday, April 24, 1947
now
consumption has been running at
(4) The
proposed
loans
to
very high level, there is more Greece and Turkey, plus the loans
likelihood of a decline in produc¬ to be made by the Bank for In¬
tion of these items during the cur¬ ternational
Settlements, will tend
rent year, than there is of a sub¬ to bolster our
foreign trade dur¬
stantial increase in the near-term ing the latter half of this
year.
rate of consumption. .
(The demand for some American
(2) It is almost inevitable that products is so great that shortages
many small and relatively high- of materials and shipping facili¬
cost producers will be forced to ties, rather than
credit, are the
go out of business, as their mar¬ limiting factors in today's rate of
kets are taken over by the larger, exports/)
more efficient producers of goods,
(5) There is a
a
wrong
employed than we did 10 The average speculator appears to
ago.)
' be 4ft a mood to ignore favorable
(2) Some of the recent propa¬ factors,
and
to
accept
unre¬
ganda in support of the thesis that servedly predictions that
are; the
the buying power of the masses reverse of those
which were so
has declined materially as com¬ very
popular (and so very wrong>
pared with the pre-war period, in the spring of 1946.
states that the unorganized fac¬
(4) Judging by the data on sav¬
tory workers, as well as office ings of individuals, free
credit
workers, have not received -wage balances* in brokerage
fully
,
,
hands
of
guided
political
the
individual
policy
Charles Michalson, when
tion campaign included
gan that the
business
who
the
recovery
"planned that way."
Could
it be, that the Democrats and their
affiliated economic
planners, are
trying to talk business down dur¬
ing the next few months, in order
to reduce the danger of a declin¬
during
Believing That
Business
Set-Back Will
Any
Be
II
Some readjustment in business
activity before the end of 1947
would not. surprise any students
of economic affairs. No one could
—or
should—have seriously be¬
lieved that retail trade would hold
particu¬
purchasing
average,
once
consumer
power could again be partly di¬
verted to the purchase of automo¬
biles,
new homes, and other semidurable or durable
goods.
It was
also -unreasonable to believe that
liquor
or drug consumption would
hold at last year's indicated levels
for any prolonged
period of time.
However, the
mood
or
fashion of
the spring of 1946 was to believe
that we were in for an almost un¬
limited period of
continuously ris¬
ing sales and profits, particularly
as
soon
various
as
Government
controls, such as OPA were re¬
moved. (It was pointed out at
that
time, that it would take at least
two
three
or
years
to
make
up
half of the loss of
produc¬
tion in automobiles because of
wartime curtailments, and that it
even
would
probably take at least five
years to satisfy the pent-up de¬
mand for
housing.)
The basis for the current fash¬
or
style of expecting an im¬
portant business recession
ion
during
the next six to twelve months
ap¬
pears to be no sounder than the
basis
for
unlimited
which
of
optimism
prevalent in the spring
was
1946.
If
this
is
true, common
stocks are definitely in a
buying
area, just as they were in an in¬
termediate
selling
this
at
zone
homes.
While
we
may
not have
The
above
reasons
underlying
statements
be
may
the
sum¬
marized as follows:
III
Reasons
for
1
ers
car
is not supported by the facts:
prices,
after trade-in allow¬
have not risen as much as
ances,
Moderate
fifteen
a
Business
above
the
months,
many lines
has been
sumption.
by the data
of
past
than 100%
1936-1939, while the cost
has
risen
potential
less
than
of
60%.
since
production
consumers'
This
is
would
mean
new
jobs
new
(7)i Finally,
excellent
there
chance
absorb at least
one
still an
Congress
July 1,
which will add almost $4 billion
a year to consumer
buying power.
The outlawing of portal-to-portal
suits
also
appears
to
be
reason¬
ably certain, and this should
cel
of
one
can¬
the
contingent liabil¬
being faced by many
now
buyers alone could
car
ig
that
will pass a tax bill before
firms.
year's capacity
V
Miscellaneous Considerations
consequent
losses
in
It
sion.
efficiency,
and the expense of using substi¬
tute products.
Wholesale and re¬
tail
(1) It is being argued that con¬
buying power must be in¬
sumer
mark-ups of building mate¬ creased because the weekly earn¬
rials are also reported to be un¬
ings of factory workers have risen
duly high, as a direct result of less than the cost of
living during
Shortages.
These factors could be
corrected
very
quickly, and a
moderate decline in costs
(15% to
20%)
would
probably
release a
great deal of the urgent but sus¬
pended
demand.
Furthermore,
relaxation of the remaining Gov¬
ernment
(3) Food
prices
mer
and
during the sum¬
months, as the new
harvested, both here and
fall
crops are
abroad.
As
a
matter of
fact, the
quotations
indicate
that
tember wheat is selling at about
50
cents
a
bushel
below
May
summer.
(Sep¬
about
volume
80%;
of
(b)
the
business
total
is
much
greater; and
(c) the total supply
is three times the pre¬
of money
level?
war
As far
creased
as
consumer
credits
are
development, with the in¬
availability of automo¬
biles, electric refrigerators
washing machines?
and
VI
correction
or
readjust¬
by the decline
from approximately 213 to 160 in
in
business
the Dow-Jones Industrial Average
between May and October of last
year.
the
in
During this correction (and
subsequent further declines
some
issues), the
majority of
stocks
have
declined
by more
than 40%, and have retraced oneor
of
more
their
previous
advance since 1942. The extent of
the
mobile and steel
pending wage
telephone, auto¬
industries, would
probably release
this
buying
declines
in
deal of
gerat
a
power.
(5) Many high-grade stocks-are
selling at 50% or less of their
now
indicated
values
the
on
demonstrated earning
basis
of
power,' his-
toricaL price-earnings ratios dur¬
ing periods of general confidence^
and indicated potential yields, lit
the past, similar buying
oppdrtuf
nities have been seen only when
the market as a whole was
fairly
close
to
level
a
from
which
major advance subsequently
veloped.
a
de¬
The very near-term outlook for
stock prices would seem to depend
in large measure on labor and
political
It is quite possible
news.
that the
is
from these
news
about
now
as
sources
bearish
it
at
is
going to be, so that we may be
seeing an earlier than anticipated
"test"
of
the
160-170
mentioned
Stock
the
in
/
Prices,
Jan.
The
Outlook
-
which
16,
1947,
in the
area
Average,
issue
as
for
appeared
in
of. the
"Chronicle."
that
It is still probable
suspension of operations in
a
the
steel
and
automobile
indus¬
individual
through the motions
threatening, to strike before
reaching a settlement. Favorable
of
above, the market ap¬
to have fully discounted a
ment
the
the
sirable to go
As stated
moderate
of
in
tries will be avoided, even though
the labor leaders may find it de¬
TThe Outlook for Stock Prices
pears
disputes
Dow-Jones Industrial
concerned, isn't a substantial rise
(from the low wartime levels) a
normal
settlements
action
taxes
on
term prospect,
also
is
a
near-«
in spite of the
suc¬
cessful efforts of the Administra¬
tion,
so far, to keep the Republi¬
party from making good on
this 1946 election promise. Underthe circumstances, it would seem
reasonable' to "expect a. resump¬
can
tion of the upward trend in
prices
as
soon
as
it
stock'
becomes ob¬
vious to
more people that the 1947
readjustments in business activity-
likely to be of minor, rather
major proportions.
are
than of
issues
is not fully reflected by the Aver¬
partly because the lows for
ages,
individual
spread
stocks
have
been
period of more than
six
months, whereas, normally,
they occur within the span of a
few days.
over a
Apart from
the
extent
of
last
year's
decline, stocks appear to
be in a buying area from the fol¬
lowing points of view:
(1)
At current prices of about
Life insurance Div.
Rate
Approved:
Dividends to Savings Bank Life
Insurance policyholders' in New
York State for the year commenc¬
ing May 1 at the
the
past
the
year
Life
same
rate
as
approved
were
Trustees
in
by
of
Insurance
Savings Banks
Fund, it was an¬
nounced
recently by Mr. Clarence
Plantz, - Executive .Vice-Presi¬
167
dent. This will be the fifth
approximately 4.7%. This com¬
with a yield on high-grade
ordinary policies have been deter¬
compared
pares
mined
bonds of 2.6%.
same
1947,
as
a
with $47.50 a week in
of
1945.
During
this
January
period, the cost of living has risen
look
point
an
economic out¬
of
view—to compare
the current level of
factory wages
and
living costs with
pre¬
period
war
This
some
same
such as
1936-1939?
Government data shows
that the $47
by the
a
week
now
received
factory worker is
20% from 91% above the average 1939
level,
The grain and 108 % above the 1936
average.
will also be materi¬
risen
ogy, which could come about with
Average, the yield on the stocks
which make up this Average is
misleading, from
quite
pre-war levels,
prices in general have
(a)
the
average
factory worker received about $47
a week in
January of
past two years. According to
Government statistics, the
fairer—and less
appear
above
when
accounts*'
extremely- low level o£
brokers' loans, the potential de-r
mand for equities is
very large;
Any-reversalm "the fear psychol¬
and
the
building restrictions will from 127.1%
of
the
1935-1939
undoubtedly be seen as soon as average to 153% of this
base, or
there are any signs of an
impend¬ by about 20%.
ing surplus of critical materials,
Wouldn't it be
and/or skilled labor.
well
age
half
might be in order, in this
stage
where
individual
buyers review, to comment also on some
of the recent
may prefer to wait for a particu¬
widely publicized
"reasons" advanced to
lar model, rather than to
support the
purchase
thesis that (1) workers are en¬
any car available.
titled to still higher
wages; (2)
(2) A substantial part of the
high cost of building is traceable prices must be reduced and/or (3)
we are headed for a
to
material
major reces¬
shortages, with the
of
con¬
and
These
ally lower by next
clearly shown
inventories. Since
This
ities
to
goods
ials.
living
output of automobiles, even
though we may soon reach the
futures
twelve
indicated rate of
on
more
cereal prices
running at substantially
the
,
have risen
by 10% to
their post-OPA peaks.
Readjustment
(1) During
statistics, the incomes of
farmers, factory and construction
Workers (and a few other
groups)
declined
Expecting
'
~
ment
prices of meat, dairy products and
many
other items have already
;;
has
buying power, for some
groups,
which
would
at
least
partly offset any reduction in
payrolls in other industries. In
cars than can be
produced during addition, there is evidence that
the current year.
The argument readjustments in some lines (in¬
that automobile producers have cluding furs)
have been com¬
priced themselves out of custom¬ pleted. ;
•
a
certain to decline
time last year.
builders
(1) We have not as yet satisfied
because of a lack of raw materials.
our pent-up demand for durable
and semi-durable
goods, including The freight car industry is also
railroad equipment, heavy elec¬ operating
on
reduced schedules
trical equipment, automobiles and only because of a lack of mater¬
indefinitely at last year's levels
of about two and one-half times 100% since the 1936-1939 period;
however, according to Govern¬
the 1936-1937
larly
locomotive
just
announced a sharp curtailment of
operations, effective immediately,
pent-up demand for twenty mil¬
lion cars, as some
people had pre¬
election
dicted, we almost certainly do
have a„ pent-up demand for more
an
ials. For example, one of the lead¬
ing
Moderate
slo¬
was
ing
trend
year?)
their demands for critical mater¬
for
Reasons
in 1936,
the elec¬
usu¬
ally prevails during periods when
stock prices are in a
buying area*
years
in their fore¬
increases
commensurate & with
supply situation
those of members of the CIO and
by early 1946, but they were suc¬
AFL.
This is only partly true,:
cessful in getting a round of wage
great deal of evi¬
increases for all organized work-? with established trade names. This dence to support the view that we since most
unorganizedplants
will naturally result in a cancel¬
have been able tG avoid dealing
ers.
are In a major
inflationary spiral,
A careful analysis of the recent lation of orders, and a. temporary which
with unions only because they
may not be reversed until
have always made it a practice to
widely publicized talks of Rob¬ increase in the supplies of certain the Government dares to
modify
ert Nathan, Leon Henderson and goods, through forced sales.
its easy money policy, and thereby keep one step ahead of the local
other economists (who have direct
(3) The
high
level
of
food
or national wage pattern. Further*permit a sharp rise in the cost of
or
indirect affiliations with the prices is reducing the amount of
servicing our national debt. (Such more, during the-past 10 years,
consumer purchasing power avail¬
most of the large organizations
CIO), discloses that we are again
action
appears
unlikely, as
it
back to where we were in the fall able for non-food items.
would not be "politically expedi¬ have made, it a point to increase
of 1946: we are told that wages
(4) The extremely high cost of
the w^ges of their office help
ent.")
Our supply of money is
must be increased further to pro¬ construction work has led many
whenever' factory
wages
were
about three times
the
pre-war
vide greater buying power for the prospective
raised.builders to suspend level, and the recent
Analysis of the' salary
tendency
schedules
of
wage earners, to help forestall the their plans for new structures, toward
banks,
insurance
an
increase in velocity
coming depression. Some of these pending a reduction in costs.
would seem to support the proba¬ companies, and mercantile estab¬
(5) Congressional delays in re¬
Washington economists are agitat¬
bility that industry will have to lishments, also shows that current
ing for a return to excess profits ducing taxes, and passing correct¬ follow the second of Mr. Truman's levels of wage payments are sub¬
ive portal-to-portal legislation, to¬
tax legislation, and all of them
alternative
recommendations
of stantially above those of pre-war
want to reverse the recent trend gether with the delays in getting
"either
lower
prices
or
raise years.
toward a free economy.
(3) It is stated that we have
(Itj con¬ Europe back on her feet, are tend¬ wages."
nection
with
these forecasts, it ing to hold up the sales and ex¬
been witnessing an
"unhealthy"
(6)
Certain industries would
might be interesting to note that pansion plans of many companies.
rise in commercial borrowings and
step up their rate of operations
the top Democratic political strat¬
consumer
credits.
Shouldn't we
if other groups should
IV
slacken
egy in Washington is again in the
expect commercial loans to aver¬
more
cast of the labor
also in line with that which
average
in
(2)
the
Dow-Jones
Stocks
are
now
only about 10% above
year's levels. (This earnings'
estimate appears to be very con¬
servative, in view of the prob¬
ability that the companies whose
earnings
were
held
down
to
nominal or deficit levels during
the first half of 1946, because of
material shortages and OPA price
regulations, will show a sizeable
increase in earnings during 1947.)
last
The
Dow-Jones
Industrial
has not sold below
ing has risen by about 54% since
the
current
wheat.)
Any reductions in food
prices will automatically increase
the residual
buying power of the
workers
public.
ience.
compared
has
not
with
(From
declined,
pre-war
the
as
exper¬
standpoint; of
at
average
age
ing various allowances, it is ob¬
vious from these figures that the
consuming power of the .factory
selling
about 11 times earnings, if we as¬
sume that earnings during 1947 will
In the meantime, the cost of liv¬
these two years. Even after mak¬
Industrial
Aver¬
10 times
year's
earnings ex¬
cept during a very brief period
late in 1941, and it has sold at
below 12 times the current year's
earnings. during only one of the
past 16 years, excluding the three
war
years,
1940-1942.
(3) The "psychology climate" is
B.
sive year in which
in
suces-
dividends for
accordance
with
the
scale. On Group policies, the
dividends approved for the
total
coming year amount to 20% of
premiums, compared with 15%
year. The announcement is¬
sued by the Life Insurance. Fund
last
added:
The
39
surance
savings banks with in¬
departments had a most
favorable
mortality experience in
earning rate on invest¬
1946. Their
ments during the past year aver¬
aged
costs
3.21%.
were
Their
low
the-counter"
distribution
due to the
system
of
"over-
selling
without commissions.
During 1946, purchases of Sav¬
ings
Bank
Life
Insurance
in¬
creased
and
70%,
a
insurance
46% to
a
total of $27,000,000,
in
force
increased
total of $89,000,000. The
average size of Ordinary policies
purchased during the year - was
$1,326 and the average in force
$1,091.
(Volume 165
THE COMMERCIAL" '& FINANCIAL'
Number 4583
CHRONICLE
Warding Off
(Continued from page 9)
indices mignt be added, but there
is
need to particularize further.
in spite of all these
very
bases for optimism, it" is in¬
no
Yet
real
teresting
to note that "a basic
characteristic of the American at¬
titude
today
is
of
belief
that
the
universality
catastrophic
depression is unavoidable; that it
the
a
to
higher prioes and shoddy ma¬
terials, and great backlogs of or¬
ders are true today as in 1919.
To all of which the pessimist will
add that we never did really get
of
out
depression of the '30s.
Indeed, every one of Haney's 20
the
business
'38
indices
than
issue
in
of
the
Oct.
the
And
in
lower
were
'37.
2
Bulletin
N. A. P. A.
den of the maintenance of this
called
so-
full
employment is going
to be placed pretty definitely on
private business; and that inter¬
national peace,
in spite of clashing
is dependent, in the
analysis, on economic pros¬
perity and a reasonable measure
ideologies,
last
of business
definite
log
of
stability. For
time
to
postwar
come
some
our
demand
in¬
back¬
and
un¬
of
our
,,(2225)
33T
who are becoming increasingly ment officers. In short, the quali¬
sophisticated
and
increasingly fied procurement officer himself
"choosey." • These goods must be constitutes—or should constitute
produced at low cost, and they —part of that which we call man¬
must be distributed efficiently.
A agement.
True, he has always
recent publication of the Cana¬ certain direct operational and ad¬
dian Government expresses this ministrative duties to perform. He
same
thought
in
substantially must know "the tools of his trade.
these
words:
During the first He must know sources of supply,
postwar year the manufacturing good
procedure,
good
record
industry has show a vigor not keeping, possess negotiating abilunlike that demonstrated during ity,
maintain good
buyer and
the
war
years.
But vigor
in seller relationships, and know all
formulating business policy and in the rest of th&* techniques' of his
administering it is only part of job as purchasing agent and pro¬
in¬
the paralleled purchasing power will the
picture.
The success of an curement officer. All of these are
increases previ¬ tend to obscure this basic prob¬
undertaking
depends
in
large absolutely essential to good pur¬
cdrives of the prosperity
ously reported. Generally, how¬ lem, but thereafter, when tnis de¬
chasing
measure upon the degree of effir
chasing operation.
I do not for
demand
has been taken
tof 1946 is the belief that the boom ever, the price trend is upward. ferred
ciency with which an entrepre¬ one moment want to belittle the
as fleeting."
Buyers are reluctant to extend care of, the answer to whether neur
"Dr. Gunnar Myrdal,
can operate.
He cannot af¬ importance of them.
No man can
Inventories from here on, and are private enterprise can maintain
Jfamous Swedish
economist, pre¬
ford to neglect the introduction of do a good purchasing job without
employment
will
depend
dicts a postwar U. S. economic taking into account a 26% com¬ full
new materials, new technical de¬
them no matter what other quali¬
the extent to which the
crisis that will bring to a head, posite advance on raw materials upon
vices, new production methods, or ties he may possess. It is on these
with serious effects upon world and a composite 60% advance on American people can adjust them¬
of up-to-date
marketing proce¬ things that the National (Associ^
selves to what is, after all, a very
economy,
the deflationary crisis supply and repair materials in
dures, as these will permit him to tion up to now has placed the
the
cost
of
of the early '20s and the
present inventories different kind of a world, in most
depres¬
produce more efficiently.
Few greatest stress in its educational
sion of 1929-32. Other economists over prewar prices.
Inven¬ respects, from the world that we
And yet, even so, there
used to know. For, after all, the businessmen, and this is particu¬ program.
here
and
in
.
.
Europe share his tories are badly unbalanced.
larly true of manufacturing in¬ are those in the Association who
world
of
today is a different
views.By 1950, hardship and All buyers are of the opinion that
dustries, can afford ,to llemain with good reason feel that still
hunger may be with us again, and inventories should be very care¬ world, and it is this fact that behind
technical
progress
long greater weight should be placed
the
paralleling between
the only one to gain will be Rus¬ fully watched. They believe that makes
without paying the penalties of
upon
them.
With the present
1946 and 1919 dangerous. Some¬
outstanding
orders
may
sia, who will attempt to use«world many
the inefficient in losing markets status and the present emphasis
how a lot of people who, in spite
economic
disintegration for her never be filled."
y;
and outlets.1
of this entire program I have no
of experiences (both recent and
own ends.
In such a
crisis, world
Being neither an official nor an
quarrel.
/
»
And this problem is not going
|
to
the
contrary,
peace and the system of free en- unofficial forecaster, I cannot in¬ not-so-recent)
believe that planning in Wash¬ to be made any easier if, as 1
ternrise would be at
will
somewhere
come
about
1950
<or sooner). The unanimity is
/striking: one of the fundamental
says:
dicate
"Reports from buyers
a
slowing down in
of price
number
....
f
.
.
.
-
.
-
stake."
Are
tangible evi¬
support this general
dences, to
of
pessimism?
;
For
Department
thing,- the
Commerce
of
estimates
record
a
with
good
high
the
are
of $800,000,000
of another
prospects
Half of this is in
raw
ma¬
terials; the, other half divided
equally, between goods in process
finished
and
20%
goods.: True,
of this rise
due to
about
less
or
is
higher evaluation, but it is
also well
are
more
known
that inventories
badly
very
leveling off proc¬
is
likely to
decline
come, particularly since to
business conditions four
years
in advance is
balanced.
gerous
this
Fur¬
I
;
have
a
it that—is based primarily on the
return of 10,000,000 to 14,000,000
men
and
and
the
to
to
women
fact
civilian
that
the
A shortage of skilled labor or fall.
exists, man-hour production showing
ar-
jgument that higher wages in the
XJnited States are offset by high¬
man-hour
er
production seems
to be open to some question.
mow
Strikes have and will continue to
seriously interfere with
very
pro¬
non-
then
should be in fairly
category
This
siasm.
disappointing, the old
life,
military population was for four
years limited to 85% of its pre¬
war
consumption of non-durable
goods.^ This cannot go on indef¬
initely—in fact, most goods in
plentiful supply by next
of its earlier enthu¬
cur¬
chooses to call
one
ly lost
is very
un¬
feeling that the
rent boom—if
thermore, management has clear¬
still
dan¬
world.
in
this
some
five
or
most
a
undertaking
predict
up
$800,000,000 > by the; first" of * this
month.
the
certain
that
manufacturers' inventories
to
or
any
(undercurrent
one
dicate when the
ess
there
the
real
is
boom
signs
of
summer
already
passing.
will
test
business confidence in
And
come.
the
'
If
future
still continues, if reasonable prof¬
its for the future
are
in sight, and
if labor is willing to do its share
(and these
inclined
to
"ifs"), I am
with my col¬
real
are
agree
duction, and it would be interest*-
league, Professor Slichter, that it
ing
is
to
know
continue
:
how
long
"buyV off
to
'
shall
strikes."
we
quite probable that there may
be
a
tremendous boom in durable
-header, and that decline did not
disturb the general equanimity of
merchants—at first. World War I,
too, ended with money plentiful
goods, and in industrial
capital and construction. I do not
want to belabor the point, but I
may
indicate that expenditures
for durable goods, capital goods,
and housing (adjusted for season¬
al changes) rose from $24 Vz bil¬
lion in the first quarter of 1946
to
$29V2 billiffi in the second
quarter; that the prices of most
durable goods are lower in rela¬
tion to prewar prices and in rela¬
and interest rates
tion
Frqfitcprosp^^
to
/seem
ment
expansion
scale. V The
is
consumer
warrant
plant
on any
stock
equip¬
or
extensive
market
decline
discounted, but those with long
memories
recall it was just one
after the 1918 armistice that
year
the stock market took its first big
tard
low, but to
re¬
speculation, the Federal Re¬
serve
irom
boosted
4%
to
the
4%%
1919, and to 6%
cause
'
to
were
bor¬
the Civil War. eBusiness loans
are
reaching, new highs week after
week; interest rates are up; com¬
hard
pressed
free;funds, only this time, in¬
borrowing at reserve
'hanks1,: as in. 1919, they are sell¬
ing government bonds.
And to
are
for
stead:'.of
continue the analogy, and I quote
from a. Federal Reserve Bulletin
©f
1920;
there
are
"labor
diffi¬
culties-: andi unrest, and foreign
problems, strikes and threats of
strikes, strained international re¬
lations."
All of these things are
as
are
characteristic
of
today.
of
1919
There
most
non-durable
November
buy
banks
of
that the demand for dur¬
able goods, industrial capital, and
housing are financed on credit,
inventories,
bank
loans
were
rising,
and
the
banks,
short
of
reserves,
were calling on the reserve banks
ior
money, r That
is
all
hap¬
pening again. Commodity prices
are
today - higher than at any
time since the previous inflation
<of 1920, the second highest since
mercial
prices
than
goods (especially foods and cloth¬
in January, be¬
businessmen
rowing
incomes
consumer
rate
discount
in
the
to
as
are
they
other
similarities, too. The boom in real
estate prices, scarcity
of labor,
decline in the bond market, in¬
creasing resistance of consumers
ing);
which, though an element of in¬
stability to such a boom, does as¬
sist in making the transition; that
a
large part of the demand for
this type of goods is very urgent
will
ington
solve
most
problems, and even those who
are unwilling to go quite this far
are all
too ready to turn to the
Government
Federal
tion
their
to
for
problems.
a
solu¬
The
un¬
employed (including those who
just don't want to work) must
be taken care of, yet we still turn
too
often to the government to
see
Labor is in the
that it is done.
have never
known before, though it does not
always seem to realize that re¬
sponsibility goes with power.
saddle to
degree
a
Transportation
tion
at
are
of
dreamed
a
we
and communica¬
speeds
not
even
decade ago.
Cor¬
porate property, instead of being
owned- b,y a few individuals, is
actually owned by a larger num¬
ber of persons than ever before.
educational program author¬
The
ized
by the GI Bill of Rights is
likely to have very far reaching
those
who
conceived by
responsible for it,
not
consequences
are
for the more than
and
depression • and then
strained experiences of war,
through
the
are
14,000,000 men
have ' lived
who
women
a
likely to be satisfied with
shibboleths.
Basic and
not
outworn
technical
expansion in the production of
non-durables. So, although I re¬
peat'that I am no forecaster, it
may well be true, in spite of some
doubts, we shall have good busi¬
ness through three or
four years
to
But regardless of the particular
month-by-month trend of busi¬
ness,
in the years ahead the thing
really like to emphasize
that
our
one
serving intact
tem
of
living,
chance
our
of
American
and
perhaps
our
These responsibilities are clear¬
those
of
management.
But
though we may be willing to ac¬
cept,
at least
in essence, the
things I have said, there is still
another, query
that
must
be
ly
raised.
who
Just
what do
or
we
15% Rise in Rents
Senator Albert W. Hawkes, Re¬
publican, of New Jersey on April
20
mean
when
somewhat arbitrarily
on
both decided
policy and directed the method
for
carrying it out?
There are
companies, and many of them,
operated von Ithai basis,; and of
course in the last analysis some¬
one
must assume final responsi¬
landlords
than
crest of the
prosperity
wave,
damning
the
unions, or criticizing the govern¬
ment will not be accepted as ex¬
riding
Merely
when
cuses
ably
just
full
the
the
break
that
one way
employment,
comes.
reason¬
economic
stability, and world peace can be
in
attained
that
period
the backlog of
mand has been taken
sooner
way
or
when
deferred de¬
later it will
care
be).
of (as
That
is to produce new and im¬
proved
products,
reasonably
individual, lies in the maintenance
that will meet the de¬
of a high level of employment; priced,
that the responsibility for the bur¬ mands of consumers—consumers
an
of
decentralization
tries is making
ized
one-man
trol
all
physical
toward
trend
growing
autocratic ad¬
individual. The
the
does
ministration of
large
indus¬
successful central¬
administrative
but impossible."2 ;
In other words,
con¬
government
cording
dispatch
as given
of April
"In
favor
fer
effort
especially from
"pooled judgment" is
more
likely to insure that busi¬
ness
will meet its responsibility
than is "autocratic administration
here
members
judgments of those persons
bined
particularly qualified to perform
essential basic functions of a
the
business—the
production
gineers,
sales
1
directors, chief en¬
managers,
managers—and the procure¬
Reconversion, Modernization and Ex-
oansion,
lected
Progress
Canadian
and
programs
Manufacturing
:n
be
now
the Senate
on
changed
to
Se¬
ber,
1946.
v
(1) A
flat
rise,
10%,
or
across
V
>
-
the
;•
;
"
'(2) The landlord and tenant
sign a lease, any time up until
next Jan. 1, which would provide
for
a
15% increase and which
•
to
would remain in effect until Dee*
31, 1948.
The 15% rise could be
figured from last Sept, 1.
:
T
"
-Under. .this plan/ Mr., If awkes
said,
tenant would
'the
that
he wouldn't
and
that
rent
increased
17
as
bp
sure
be,' thrown
wouldn't
he
have
out
his
again for as long
advance/
18 months in
or
"That
should
added,
guarantee, ' hre
worth
be
additional.
the
he would have to pay.
5%
"Mr. Hawkes said he would call
together early this week—prob¬
ably tomorrow—half a dozen Sen¬
ators and three or four influential
House
members in
agree
on
attempt to
an
policy
a
the
rent
"
in¬
:
W. Tobey,
New Hampshire,
Banking Commit¬
Charles
"Chairman
Republican,
of
for
r
creases.
of
Senate
predicted thlat the meas-.
approved, extend¬
ing controls through Feb. 28, 1948,
will pass the Senate without any
tee
has
ure
that group
increase.
across-the-board
would
he
He
for
early
press
action.
,
■.,
Hawkes
"Mr.
should
done
be
something
said
soon,
since
the
present law expires on June 30.
"
'We
are
fast
deadline where
approaching the
we
won't have any
Controls,' he said, 'and much as I
hate all Government controls, I
have never been in favor of sum¬
marily taking
off restrictions on
J.
rents.'
•
"He
a
date fixed
until
or
that is
favored extending
month longer than the
said he
controls
a
in
next
the committee
April
leaders
30,
bill,
'because
renting period.'
"On the House
have
side, Republican
discussed
the issue
agreeing on
across-the-board increase."
several times without
an
,
permit
/ v*' Vv~;
'
Indus¬
1945-1947,
Economic
Research
Branch, Canadian Department of Recon¬
struction and Supply, August,
1946.
2 From "Freedom within Management,"
Harvard Business Review, Summer Num¬
tries,
/ ■
who
the
extension
board
on,
by an individual." Now I take it,
pooled judgment means the com¬
;
bring together
details, Mr. Hawkes
simple rent con¬
that
either:
ac¬
rent increase but dif¬
the
calendar
to say:
on
to
Senate
some
asked
trol
21, went
and
on
con¬
control,
to an Associated Press
from Washington, which
in the New York "Times"
an
House
said
,
and
enabled to agree on a
15% increase in rents under
tinued
talk about "man¬
we
agement"? Is it the board of di¬
rectors, president, or the general
manager?
Is management just a
chosen few who traditionally have
that
proposed
tenants be
"
its
pre¬
chance of preserving the max¬
imum liberty and dignity of the
one
seeking to keep our
economy
dynamic and stable is
to operate their businesses profit¬
ably, for surely this is a respon¬
sibility they owe "to their stock¬
holders,
their
associates,
their
workers, and the public. Yes, and
to their
workers, too, for only
a profitable
business offers sta¬
bility of employment."
ment
once
sys¬
in
nessmen
officers
I should
is
the
Senator Hawkes Asks
-
There is
come.
than in the prewar years. Yet,
first responsibility of busi¬
war
research have given us
atomic power, radar, gas turbines,
television, and the rocket. Indeed, bility for decisions, but I am dis¬
many of us feel as though we are posed to agree with Mr. William
caught in the power of forces Bi Given, Jr., the President of the
quite beyond our control, in the American Brake Shoe Company:
grip of which we are helpless and "Business management is entering
bewildered.
It seems as though upon a new chapter in its evolu¬
there is nothing we, as individ¬ tion; once nap-rowly dictatorial in
uals, can do, even if we were character, it is becoming more and
Prac¬
fairly sure in very tangible terms more broadly democratic.
of what our goal might be. In a tical experience has demonstrated
measure, this is true. We are, each that, save in abnormal cases of
managerial
genius,
the
of us, to some degree in just that rare
frame of mind.
But before we pooled judgment, initiative,; en¬
give up entirely, let's look a lit¬ terprise, and ideas of an organ¬
tle farther.
Particularly, .let us ization produce a better end re¬
examine what business manage-- sult in terms of progress and prof¬
generally and procurement
specifically can do. •
If business; managementi7 is to
share in preventing this country
and must be met, at least in part.
from going into an economic tailFinally, it is usually characteristic
spin, and to insure that what we
of business expansions that rising
call the American way of life is
output of durable goods and fcap- to
survive, it will have to show
ital goods induces, through aug¬
itself possessed of a very high
mented employment and pay rolls,
order
of
constructive {: vision.
an
suspect, more manufacturers are
going to find that the margin be¬
tween production cost and selling
price will be smaller in the post¬
34
International Agreements
and International Trade
our Government sought to estab¬
(Continued from page 7)
certainly not a negotiated action. lish and maintain the American
At the other extreme, unilateral doctrine of the freedom of the
action also appears in cases of seas, and these treaties, with their
good-will like the payment made emphasis upon the rule of non¬
by the United States Government discrimination in the treatment of
for goods requisitioned in Italy, shipping, contributed, in the first
although this was not required by half of the 19th Century, to the
by
the American
the Armistice terms.
But it is achievement
obvious that most international merchant fleet of the dominant
problems involve mutual interest
Equity and justice
form of international
collaboration in their solution.
and
concern.
require
some
position in the maritime world.
More
recently, after the First
World War, a whole series of new
commercial treaties served to re¬
establish and regularize our com¬
mercial
bilateral
the new natjons that arose from
the dissolution of the old empires
approach is un¬
doubtedly the most usual form of
international
and
of Central and
Most
consultation.
Eastern Europe.
At the present time, the State
Department has a program vigor¬
countries.
Alter all, most trans¬ ously under way for modernizing
actions themselves are bilateral— and extending the coverage of our
international
of
problems arise out
affecting two
situation
some
buyer and a seller are involved
one person infringes on the
alleged rights of another. The net
a
—or
in
There
treaties.
commercial
now
effect
are
25 relatively
some
and
changed bilaterally between for¬
eign offices; most international
conversations are betv/een repre¬
sentatives of two countries; and
most of the situations where per¬
sisting problems appear have been
dealt with by the construction of
an
elaborate network
of bilateral
arrangements, agreements
or
trea¬
and an approxi¬
mately equal number of executive
agreements,
exclusive
of
the
agreements with 28 countries con¬
cluded under the provisions of the
Trade Agreements Act of
1934,
relating to more specific problems
in the same general subject mat¬
ter. Nevertheless, we are without
what
In
the
past, the bilateral ap¬
proach has been the chief vehicle
of international
first
limited,
arrangement. The
entered into by the
and
economic
tions with
of
bases for our
commercial rela¬
contractual
such
ties.
the
of informa¬
Certain
matters
eral instruments are those of par¬
ticular concern between ourselves
immediate northern and
our
southern
neighbors, such matters
as
the use of boundary waters,
measures
to safeguard livestock
interests
both sides of the bor¬
on
protection of migratory
birds and game animals, and the
regulation of fisheries.
the
der,
Civil Aviation
.
a
considerable number
more
trading
important
Paris."
ternational Justice.
field
another
for
bi¬
a
illustration
where bilateral
being actively ne¬
the present time is
that of civil aviation. The United
States
This is the entire list of
has
concluded
recently
agreements with 29 nations which
establish the basis for the devel¬
opment of international commer¬
to
there
situations in which
is limited to only
many
specialized
problem
countries and where the bilateral
approach, is all that is needed to
deal with the problem. It still re¬
countries.
mains the chief method of carry¬
ing on international affairs. How¬
existing ever, today I wish to call to your
treaties are sadly out of date. The
with France. This treaty of "Araattention the development of the
ityand Commerce" between "The treaty with Great Britain of 1815, multilateral approach, particularly
treaty
United
States
America
of
was
Most Christian
King, and the 13
Upited.States of North America,"
was
negotiated by a commission
headed by Benjamin Franklin. It
In addition, many
that
with
of
Denmark
our
of
1826, and
that with Colombia of 1846 illus¬
trate
the
parts
of
ancient
our
At
commercial
this
of
character
cuss
moment,
Department has in the planning,
drafting, or discussion stage about
20 projects for new comprehen¬
*
■>
"Willing to fix in an equitable
and permanent manner the Rules
which ought to be followed rela¬
tive to the Correspondence &
Commerce
*
.
.
between their
re¬
sive
commercial treaties.
In the
China, negotiations have
completed and the proposed
treaty is now before the Senate
for its consent to ratification.
case
'of
its
of
been
violent
1900. As
to
vention,
multilateral
agreement
whose concern was
the maintenance of
Countries
,
.
»
have
judged that the said End could
founding the Advantage of Com¬
The
term
"comprehensive"
is
used
tivities of corporation; freedom of
worship,
acquisition, disposition,
solely
upon
reciprocal
Utility, and the just Rules of free and protection of property; access
to courts; freedom from unreason¬
Intercourse; reserving withal to
each Party the Liberty of admit¬ able searches and seizures, from
ting at its pleasure other Nations discriminatory taxation, and from
to a Participation of the same ad¬ compulsory military service.
Provisions dealing with the ex¬
vantages."
This, our first treaty, was con¬ change of goods relate to the gen¬
eral principles that should govern
cluded in Paris on Feb. 6, 1778,
the application of import and ex¬
and
was
ratified
by Congress
May 4, 1778. It was followed by port duties, internal taxation of
a
similar understanding in 1782 imported'-articles, the making of
with the Netherlands, another in import and export quota alloca¬
1783 with
Sweden and a third tions, the regulation of foreign
exchange, and the operation of
with Prussia in 1785.
monopolies and the granting of
Bilateral Treaties Increased
public contracts and concessions
as they affect trade.
From that time on, bilateral
treaties were entered into with
Navigation provisions relate to
country after country. During its such matters as entry of vessels
history,
representatives
of
the into ports, assistance to vessels in
merce
interests
and
'
United
cial
States
than
more
100
treaties.
have
negotiated
bilateral
These
friendship,
among
treaties
commerce,
gation
commer¬
of
and navi¬
most im¬
portant international instruments,
for they establish a basis for our
are
our
distress,
and
freedom
dis¬
from
criminatory charges and practices.
Modernizing Our Treaties
There
scribed
is,
of
course,
limitation
upon
no
pre¬
the
sub¬
^ch treatie
In
economic
relations
with
other its program of modernizing its
countries. Historically, they hold commercial treaties, the Depart¬
an honored
place in the record of ment is giving attention to such
ject patters
the
first
up
drug
rules of
so-called
peace
and
Hague Peace Con¬
ferences in 1899 and 1907 and the
two
American
Central
is
con¬
tions
agreements
whatsoever.
conven¬
or
The
first
in¬
ternational
agreement of which
found
record
was
not
have
handled by the State Department,
and is not even published in the
official
This
compilation
came
authority
the
about
given
treaties.
of
because
by
of
Congress
Postmaster-General
to
buy
sellv
or
other
some
country
the secondary-
for
less
no
Peace Confer¬
In
1910
the
the
elaborate
of the multilateral instru¬
was
further extended.
A
the
to
enter
into treaty arrangements concern¬
ing postal matters, with the ad¬
vice and consent of the President.
The United States sent represen¬
tatives to the first International
Postal
Congress which convened
in Berne on Sept. 15, 1874. A re
agreements.
multilateral
most of the
With
nations of the world
the Allied and
Associated Powers, and with the
included
war
fort
among
being the type of overall ef¬
which it was, it was obvious
that
a
operation was in¬
that multilateral oro-
group
volved
and
used.
While
much of this wartime understand¬
cedures
would
be
ing took the form of executive
agreements, there were some doc¬
uments of great formality, such
as the Chapultepee Agreement of
1945.
The most significant point
of all is the fact that the end of
the war brought universal agree
ment
that hereafter
actions
concerned.
Our tariff policy was placed in
relationship to the tariff policies
number of such treaties were cre¬
of
the
Reciprocal Trade Agree¬
represented a major de¬
velopment in approach. Congress
delegated to the President broad
powers to
negotiate with other
countries changes in our tariff.
use
ment
of
us
upon
The
began the
of
1907.
in
even
ment Act
hundred
of its existence, the United
States entered into no multilateral
years
treaties,
of
was
Reciprocal Trade Agreements
Epochal
trade,
certain
war—the
the creation of some international
almost
protection and
particular
regard for how this or that de¬
cision might affect the economic
abroad.
organization which may appropri¬
ately deal with some specialized
group of problems. The multilat¬
eral approach is, of course, not a
For
There
<■
primarily with
wished to
who
these
ated for this hemisphere, being
imited to the American Repubadvisedly with respect to
ics. In the economic field, there
not be better obtained than by these treaties, for the extent of
were multilateral
conventions on
taking for the Basis of their subject matter covered is ex¬
;he preservation and protection of
Agreement the most perfect tremely wide. The broad fields new one. Where wars in the past
fur seals (1911), joined later by
Equality and Reciprocity, and by usually dealt jwith are three: the have involved only two countries,
others relating to whaling (19311),
carefully avoiding all those bur¬ status and activities of individuals the peace settlement has been bi¬
silver (1933) and sugar (1937).
lateral but there have been many
densome Preferences, which are and organizations, general prin¬
usually Sources of Debate, Em¬ ciples relating to the exchange of instances where wars have drawn
Stimulation by War
barrassment and Discontent; by goods, and rules affecting naviga¬ in other interested parties and
Now that we are so near to the
leaving also each Party at Liberty tion. In the first category are in¬ where a multilateral peace has
to
make,
respecting" Commerce cluded rules as to entry, travel, been negotiated.
present in this historical review,
and
it should not be necessary to take
Navigation,
those
interior residence, and the carrying on of
Postal Union Established
Regulations which it shall find specified activities by individuals;
time to describe the great impetus
the status, organization
and ac¬
hiost convenient to itself; and by
which the war gave to the use
spective
tariff
its
policy as part of its overall for¬
eign policy. In the United States,
the
argument
was
within the
country, between those industries
the white
sanitary conventions
controls. Fulldress conferences were held to set
slave
and
treaty, or
or
and
countries
considered
it
therefore
graph by multilateral agreement.
Between the two World Wars,
a
on
the country
subject in which they all have an
interest. It takes the form of the
estalishment of
other
to
cance
controversy.
by which a group of coun¬
reach
agreement on some
tries
approach
during this period. In Eu¬
rope, each nation realized that its
tariff policy had direct
signifi¬
safety at sea" international reguations, and some slight order was
brought into the fields of the
wireless telegraph and radio tele¬
that
•
tariffs
reached with respect to
and
approach
American
the
and
slowly and slightly extended. In
the social field, agreement was
ence
multilateral
say
which might in turn be taken by
Multilateral Approach
The
n
tariff
effects
development
The
our
such multilateral conventions was
to dis¬
advantages
multi¬
it is limited to very
and limited subject
of
of
During the early years of the
20th century, the area covered by
difficulties.
the
structure.
mosphere of such treaties, starting
with, a statement that the parties,
being
some
elements
treaty
well illustrates the nature and at¬
■
in the economic field, and
for
matter which did not contain the
the
two
that
can see,
you
are
obvious
is
the
America had adhered by
cial aviation.
It
which
implications
I think it would be fair
acts.
that until 1934, American
policy was viewed by Amer¬
icans
as
essentially a domestic
matter. Many foreign analysts of
the problem pointed out the dif¬
ference
betv/een
the
European
and conventions
United States of
treaties
lateral
field, we have
substantial evolu¬
a
attitude towards the
our
international
own
Brussels.
are
in
tion
repression of the African slave
trade and the formation of an
International Union for the Pub¬
lication
of
Customs
Tariffs in
An
through
gone
the
number of double-taxa¬
area
treaty
multilateral
elaborate
has
conventions.
toward
the^ exchange
governments of their offi¬
In 1890 came the
In the economic
cial documents.
negotiation, and the United
recently entered upon
program looking to the conclu¬
tion
the
among
The Economic Field
con¬
following year, a general
convention for the protection of
submarine cables. In 1886, a con¬
vention was concluded in Brussels
in
lateral
sion of
1864
cerning care of wounded in time
of battle, the neutrality of those
involved, and the creation of the
symbol of the Red Cross. In 1883
came the first international con¬
vention concerning patents, trade¬
marks and commercial names, and
looking
is
of
1882 to the multilateral
Convention of
Geneva
working out of arrange¬
ments for the avoidance of double
taxation
bureau
measures ... at
Our next act was to sub¬
scribe in
The
States
"scientific and per¬
a
international
manent
peculiarly ap¬
propriate for regulation by bilat¬
a
earlier, but also such agencies as
Institute pf Agriculture, the
International
Office
of
Public
the
Health, the Pan-American Union,
The International Labor
Office,
and the Permanent Court of In¬
lishment of
tion.
comprehensive commercial trea¬ of another
aide-memoires, ties, about a score of others the agreements
subject matter of which is some¬ gotiated at
memoranda
are
ex¬
result is that most
notes
furthering activities
freedom
to
other relations with
Bilateral Approach
The
treaty in the negotiation of which
participated was
1875.; It related to the estab¬
the United States
in
weights"; and
tion, and for
relating
and
Thursday, April 24, 1947
{2
THE COMMERCIAL & FINANCIAL CHRONICLE
(2226)
Tariff
countries.
otner
ji
sions
conces¬
to be on a mutual and
were
reciprocal basis.
The reciprocal
agreements thus far nego-
';rade
tiated have been bilateral instru¬
ments.
Now
we
ir»
reaching
are
which
the
third
a
multilateral
method has assumed much greater
We are dealing and
to deal with a number of
importance.
propose
economic
international
planning
this
basis
multilateral
a
on
extend
to
method
even
problems
and are
the
use
further.
of
Thus,
was
set up to establish
responsibility for postwar re¬
lief as a general obligation to be
uituateraiiy. The Inter¬
national Bank for Reconstruction
and Development and the Inter¬
national Monetary Fund are given
responsibilities far beyond those
ever given before by the several
ITNRRA
the
«t
to
governments
agency.
And
any
now
economic
proposed
the
Charter for an International Trade
Organization not only sets forth a
set of principles aimed at elimi¬
nating
uneconomic
discrimina¬
tions
and reducing
barriers to
trade, but also establishes an or¬
ganization which will provide a
regular forum for the exchange
of ideas on trade matters and the
reduction
of
trade
controversies.
surprising that the
multilateral approach should have
come so strongly to the fore.
The
world has been growing smaller
It
and
is
not
smaller
while
the
necessary
international arrangements for economic activ¬
issues should be solved on a
mul¬
ity
have
become
increasingly
appropri¬ complex. Different bilateral ar¬
ate.
The outstanding example of rangements on the same subject
the anplication of this principle by any one country with several
others make for great administra¬
approved by the Postmaster-Gen¬ was, of course, the establishment
suiting international treaty con¬
cerning the formation of a Gen¬
eral Postal Union was formally
eral and the President
1875.
It
established
on
a
March 8,
degree of
tilateral basis wherever
of the United
The Char¬
Nations and the
Nations.
ter of the United
agreements setting up its many
subsidiary and related organiza¬
tions constitute a vast extension
change. It sbt up a central office
to facilitate the distribution of of the multilateral treatment of
uniformity of foreign postal rates
and
established conditions of
ex¬
tive
basic
confusion at home.reason
But the
is not administrative.
Many of these economic situations
arc
interlocking.
Trade may be
quadrilateral.
financial
currents
triangular or
tainly
<
Cer¬
flow
back
and forward
and around.
international questions.
It is no new venture for the Certainly it makes sense for the
agreements, and the development
countries of the world to meet
of further agreements in the in¬ United States to participate in an
together,
face
these
economic
American foreign policy.
matters
as
more
comprehensive terests of the postal union. How¬ international institution. We al~
The
treaties previously men¬ rules regarding the rights of cor¬ ever, it should be noted that the remember too clearly our failure problems together, and try to find
the
best
solutions
possible by
tioned were effective
pieans of porations; more detailed coverage establishment of the union did not to joir. the League of Nations, bu
support in our own effort io win of exchange control, Government supersede the negotiation of vari¬ we should also remember that in their joint and combined effort.
The bilateral procedure of in¬
and
establish
our
political and monopolies, and nationalized en¬ ous-bilateral agreements in the the past, we have adhered to con¬
economic independence.
ventions by setting up not only ternational arrangement was cus¬
Later, it terprises; provisions favoring the postal field.
v;'
was by means of such treaties that
The next so-called multilateral the agencies -which I mentioned tomarily carried on without fanpractice of commercial arbitra¬
information, the resolution of dis¬
Volume 165
THE COMMERCIAL & FINANCIAL CHRONICLE
Number 4588
or
tories
very
away.
public awareness. Perhaps which may be present in the in¬
limited number who have itial positions taken, tends to dis¬
special interest in the matter appear as that position is modi¬
fare
a
a
know that at this moment
we
are
in the process of negotiating such
different bilateral agreements as
fied
At
various
in
with
various
least
in dealing
governments.
multilateral tech¬
ways
other
the
but- thev quidkly drifted
Even so,.it was loaded down
with literally hundreds of reser¬
vations by individual signatories
aviation
civil
that the pro¬
was
agreement
technical
international
upon which all countries
unreservedly agreed made a
very negligible list.
«
ittle
negotiation
mul¬
difficulties of getting
agreement
times,
many
difficulties of
a
compared
as
getting
a
great
to the
series of
bilateral agreements. If the multi¬
lateral agreements are to be suc¬
dure'
which
inevitably
seem
extraordinary
consume
of time-and
to
amounts
The multi¬
lateral negotiations are also likely
to be multi-lingual and this takes
energy.
superable one.
It is a problem
faced by any public body where
its procedures call for delibera¬
tions in the open.
However, ;in
the international field it is of the
greatest importance that w.e do
Furthermore, we must re¬
hot: ;^i^pjem|hi9si^e"
sbbrOpqiaph
member that the participants are
hf^y|ctbriesls and defeats
representatives of governmentsour eyes on the necessity for find¬
that they frequently are not, free
ing solutions and on the quality
'to shift lightly from one position
of solutions found.
time.
.
to another, but must wait author
ity
from
individuals
r y>
bodies
or
somewhat removed from the time
Tendencies to Exaggerate
Another
implication of this fac¬
pressure of the conference room. tor
of publicity is the tendency
It is a great step forward to ob¬
towards exaggeration. What were
tain
statements
of
position, to
points in a debate become news¬
identify and define specifically
paper headlines. Controversies are
the disagreement, and to have a
news, agreements are not (except
place to consider and discuss.
perhaps at the Council of Foreign
In general, we Americans aire Ministers).
Different
countries
too
frequently
disappointed
if have different forensic styles.
A
problems
are
not
immediately rnild criticism in one language is
solved.
In the international field, an insult in another.
There is
agreements inevitably take time. danger that we may overrate the
We have many examples of this
disagreements which may appear
before us.
The refugee and dis¬ from time to time, that tension
placed persons problem was one may be created beyond that jus¬
recognized by everyone as urgent¬ tified by the basic facts. It is no
ly needing immediate treatment
impossible, of course, that efforts
Discussion of the problem went
may be directed at some limes in¬
on all through the days of UNRRA
tentionally to create these lenr
and the new International Refugee
Organization is only now in the
of being born.
Here was
a
simple problem and also an
urgent one, but a few issues were
process
found
which formed the basis of
debate
endless
to
uncover
mise.
On
and
it
took
workable
a
time
compro¬
perhaps be encour¬
aged that a solution eventually
was found.
We may learn to do
better as time goes on, but we
should not be too disturbed by
failure to get quick and decisive
can
action.
It
is
important
to
appre
ciate fully the implications of the
fact that the multilateral method
dealing with international prob
lems brings the actual process of
international negotiations out into
the open. Discussions on prospec
tive bilateral arrangements have
of
seldom been in the public eye. In
ternational organizations operate
the open, even to the extent;
making an issue over how many
newspapermen could go to Mos
cow.
This has both advantages
and!disadvantages. The great ad
vantage is that it does permit the
public to have information about
trends of policy before irrevocable
steps are taken. It also may please
the (diplomat
who
has
b e e i
in
of
charged with not having a con
foreign policy. As a mat
ter-of fact, one of, the reasons why
foreign policies have seemed in
consistent is that in the past they
sistent
have become known only through
publication
agreements.
.«however,
.
of
actual, and
These >
frequently
fina
agreements
represent
compromises to meet in part the
position of one
Country.
or
another foreign
Therefore
consistency
are
dissenters.
some
in the case of
negotiation,", there
ever,
fundamental
issue
still
of
How¬
the
is
how
much
weight should be given by a coun¬
try in .the, minority group to the
a
majority of countries
fact that
take
different .view in the event
a
that
action is required by it.
Security Council, the veto
power represents a way in which
certain of the countries, at any
some
In the
rate,
protect themselves from
can
the majority. In the Economic and
Social Council
and, in fact, all
other organizations of the United
Nations, there, is
The
tion.
no
by
a
conclusion
reached
international body with
was in thorough disagree¬
which it
ment.
the
Paris
Conference,
Mr
Byrnes took the position that he
'would support any proposal for
any of the treaties which was en¬
dorsed
by two-thirds of the
tries there represented.
coun¬
This pol¬
tendency to exaggerate
understanding, good¬
will and common sense.
It would
be
a
sad confession of lack
of
faith in
that
There
is
no
cure
for this
general
other
than
underlying principles
to suggest that it is a steo back¬
ward to bring the consideration
of
these problems out into the
open.
It do not believe that it is.
But
our
must achieve broader per¬
we
spective in
our
judgment concern¬
ing the process and results of in¬
ternational negotiations and I be¬
There
win.
we
is
which
we
which
does
one
must
will find itself in the minority,
hope that in such
make
cases,
determined
a
we
I
will
effort to
ac¬
cept the majority judgment if it
does not involve
a
violation of
our
fundamental principles.
Actually,
I tnink we can have real confi¬
that
dence
the
majority
of
the
problem
wisdom and discretion.
all have in mind
arise
in
simpler
In the case
of a bilateral negotiation, if there
is disagreement, a country is able
to stand by its own position and
not
occasion the United States
on
nations of the world v/ill act with
other
Permanent
Representation
types of negotiation.
that ends the matter.
Prior to the
In
one
which
respect,
the procedures
adopting may be re¬
new, namely, the crea¬
we are
garded
tion
as
of
more
or
less
permanent
representation
and the establish¬
nearly all multilateral nego¬
tiations proceeded on the unanim¬ ment of substantia] international
secretariats.
This is still so much
ity rule and the result was that
multilateral
agreement
always in the experimental stage that it
is difficult to form any judgment
represented the greatest common
denominator that could be found as to its probable effect. It means
war,
The
the
bilateral
is not
alive. But
the multilateral approach has been
greatly extended.
I think thei$
is some symbolism from this for
approach
the economic field.
We have used
the bilateral approach
cally
reducing
tariff
trade
barriers
while
by recipro¬
and other
continuing
Harper & Son & Co., Seattle;
B.
Emerson,
Morgan
Stanley & Co., New York; Harold
C. Evans, Commerce Trust Co.,
Kansas
City Creston H. Funk,
Sumner
Funk &
White, San Antonio; Rus-
sell
Kent,
A.
Bank of America,
A., San Francisco;
Shirley C. Morgan, Frank B, Cahn
& Co., Baltimore; ChapinlS. Newhard, Newhard, Cook & Co., St.
Louis; Nathan K. Parker, Kay,
Richards & Co., Pittsburgh; James
E. Roddy, Scharff & Jones, Inc.,
New Orleans; William C. Roney,
N.
T.
■
&
>.
S.
Wm. C. Roney & Co.,
v
>j
Detroit; T.
Johnson
Ward,
Merrill
Lynch,
Pierce, Fenner & Beane, Phila¬
delphia; Thomas Whiteside, Chace,
Whiteside, Warren & Sears, Inc.,
Alfred
S.
Wiltberger,
Blyth & Co., Inc., Chicago.
Boston;
State
chairmen
with
work
to
this committee and cooperate with
State Directors of the U. S. Sav¬
ings Bonds Division of the Treas¬
ury
Department will be appointed
the most-favored-nation extension
to assist each member of the com-*
of benefits.
mittee,
Our objective was to
increase trade for the benefit of
our
ers.
producers and consum¬
But for most countries, either
own
unilateral action
or
Curb Five and Twenty
bilateral bar¬
ter agreements operate to restrict
The multilateral
trade.
approach,
with its emphasis on non-discrim¬
ination and reduction of barriers,
is dedicated to the expansion of
trade.
By its recognition of the
necessity for joint action by many
countries, it is the natural me¬
dium
for pursuing the goal of
peace and plenty.
This applica¬
tion to. new fields of an old tech¬
problems in its
path, but it also has the promise
has
nique
of
a
many
better future in an age when
the interdependence of all nations
of the world is no
for
longer
a
subject
argument but an established
significance.
fact of vital
Club Is
IBA Committee to Aid
Savings Bonds Program
PHILADELPHIA, PA.—Forma¬
of
an
IBA
committee
with
Organized
f
than 75 regular members /
of the New York Curb Exchange,
More
of
most
whom
were
brokers
on
the old outdoor Curb Market be¬
the
fore
ex¬
change moved
in
indoors
1921, have org a n
i
d the
z e
Ex¬
Curb
change Five
and
Twenty
mm*;,
Club.
¥
■
;
M o r t i m er
*'%•£
Landsb erg,
member
a
of
30
of
Curb
the
the
for
tion
At
on
35
P.
case
with
an
activity
dead—it is very much
such protec¬
undoubtedly will
arise where the United States, like
any other country, will find itself
faced
compared
as
night, but it is the case that some¬
thing new has been added to the
international scene which may be
of extremely great importance.
multilateral
a
role
part of the United Nations Sec¬
retariat,
Obviously this is not a
i;ask
to be accomplished over¬
icy did not lead to any major dif¬
ficulty in that case.
Obviously
the present situation requires the
working out of solutions which
can have overwhelming endorse¬
ment.
But I do suggest that the
multilateral approach will mean
sions.
lieve that
also
there
passive
with the present
,
proce¬
The
imitqd in size and took a some¬
what
cessful, there needs to be a will¬
ingness to accept the majority
ters into the picture and any mod¬
Perspective
judgment and not to insist that
ification must be judged not only
the
I doubt very mucli that we have
majority judgment be so
in terms of its own extent but in
watered down as to be acceptable
yet reached the point where we
terms of the effect it will have on
without difficulty to every par¬
can place these public multilateral
the prestige of the negotiator and
ticipant. This difficulty is, I think,
negotiations in their proper per¬
of his country.
Anyone familiar the
explanation for previous mul¬
spective.
In the first place, we with
the operation of, groups pf tilateral
agreements
are inclined to expect something
being con¬
people — for example, laxge com¬ fined to such non-controversial
much more rapid than is produced
mittees — knows that final solu¬
and technical subj ects as postal
by this process.
We ought to tions
are seldom found in discus¬
know, from our observation of sion in which a substantial num¬ cooperation and safety of life at
sea.Parliaments and Congresses in ac¬
ber of people participate.
They
tion, that hammering out policy
are more apt to be worked out by
IJnanimity Rule Abandoned
when many opinions and preju¬
more
limited group
working
dices must be considered requires
Luckily, the unanimity rule has
quietly and out of sight.
time and patience.
As compared
This problem of operation .in virtually been abandoned.
While
with a bilateral negotiation, the
public is, of course, - not a new compromise will still be neces¬
multilateral process introduces a
problem and certainly not an in¬ sary, action can be taken even if
who|g series of problems of
significance.
political
1-eague Secretariat was able to do
much excellent work but it w$s
Multilateral
unanimous
mostly been made up of
specialists working on
organizations with
lave
had
tiplies the
significance. There have
before but they
secretariats
seen
visions
with nique makes public the initial
the Union of South Africa, a lead- position as wellVas the ultimate,
lease settlement with Norway, and solution of the problem.
a fisheries treaty with Mexico. On
Publicity May Increase
the other hand, everyone knows
Difficulties on Agreement
about the meeting of the Council
of Foreign Ministers in Moscow,
However, it also should be noted
hat this fact in itself may make
and the Security Council at Lake
Success.
agreement more difficult.
Once
i
position has been taken pub¬
ic ly, the element of prestige en¬
Present Negotiations in
a
the result
and
value and
(2227)
past
years,
present
ernor
a
gov¬
of
the
exchanges and
Mortimer
partner in the
firm of Brickman,
Landsberg
>
Landsberg &
elected president of thej
McCormick, a Curb
National Chairman, to aid in the member since 1911 and first pres¬
U.
S.
Treasury Savings Bonds ident of the exchange after it
moved indoors, was named hon*
Program was announced here to¬
president. Other officers
day by Edward Hopkinson, Jr., orary
President of the Investment Bank¬ elected for the ensuing year in- \
elude
Edward A. O'Brien,, v.ce
ers Association of America.
president; George J. Bernhardt,
In announcing the appointment
secretary;- and ^Rulley Koernerj:
of
the
national
IBA
Savings
treasurer.
'
;
Bonds Comimttee, Mr. Hopkinson
Eligible for charter member¬
said:
ship in the newly organized club;
"The members of the Invest¬
are 128 members of the Curb Ex¬
ment Bankers Association are in
change who either have owned ;
full accord with the Treasury's
memberships for at least twentypolicy of distributing ownership five years or will round out a
of the securities of the national
quarter century on the exchange
debt more widely among individ¬
during 1947. Of this total, 103 uals and other non-bank investors were members of the Curb when
through the sale of U. S. Savings it moved indoors June 27, 1921,
Bonds. It seems to us a vital part
and the remaining 25 bought their
of wise management of the debt,
memberships shortly thereafter.
which is so important to the whole
Foui teen of the eligible mem¬
future economy of the nation.
I bers were among the group or
am
sure
all investment bankers
outdoor brokers who on March 16,
will cooperate in this program, 1911 formed the New York Curb
and take an active part in the Market Association, which later
Treasury's
mid-year
promotion changed its name to the New
campaign for savings bondss in York Curb Exchange. Of the 128
June and July.
eligible men, 97 are still active on
"The sale of more savings bonds the floor of the exchange.
Of the
to more people will help to retire others, most continue ac'ive in the
nAmmuniiv
thniitfh
Kpl-*
more
bank-held obligations as financial community though sel¬
they mature, thereby reducing the dom appearing on the exchange
poten'ial of bank credit expansion floor, while a few are no longer
and
helping
to
check further in the New York area.
;
price rises in consumer goods.
Formation of the club is the
"The appointment of the IBA culmination of several months or
committee at the request of the preparatory work on the part of
Treasury
Department was ap¬ an organization committee headed
proved by the Association's Board by Mr. Koerner as chairman and
of Governors at its last meeting."
including
Mr. Bernhardt, com¬
In addition ta Mr. Markus the mittee secretary, Charles W, HalIBA Savings Bonds Committee is den, James J. Hopkins, Charles
made up of investment bankers Leischner and Mr. O'Brien.
Norbert
Barney
W,
Markus,
&„jCo.,
of
Smith,
Philadelphia,
as
Co., was
club.
E.
.
R.
>
^
the participant countries.
necessity of meeting the re¬
quirements of every country was
of course a very limiting factor.
This
was
the
difficulty
that
for
all
The
that a group of people are spe¬
cifically assigned to making the
machinery work. As for the rep¬
resentatives, there is much to be
haunted multilateral discussion in
said for the procedure of desig¬
nating certain individuals who de¬
the irter-war
vote
period, particularly
in the economic conferences that
their energies to multi¬
negotiation.
Anyone who
all
lateral
has
participated in such activities
that complete
strangers
from every section of the coun¬
make slow progress, but that as
example, the 1927 Convention on
try and includes:
familiarity develops, time and
the Abolition of Export and Im¬
C. S. Ashmun, C. S. Ashmun
energy can be saved and there is
port Prohibition was probably, up a somewhat greater possibility of Company, Minneapolis; Ewing T.
to its time, the most comprehen¬ accomplishment.
As for the sec¬ Boles, The Ohio Company, Co¬
John D. Burge,
Ball,
sive and far-reaching multilateral retariat, that requires the devel¬ lumbus;
opment of real international .ser¬ Burge & Kraus, Cleveland; Ed¬
agreement in the economic field
vants who can put aside their na¬
ward B. Coughlin, Coughlin & Co.,
ever negotiated.
For a time it had tional loyalties.
If this can be
a
very impressive list of signa¬ done, it will be of tremendous Denver; Sherman Ellsworth, Wm.
were held for the most part under
League of Nations auspices.
For
knows
opened the organ-*
as
temporary
chairman and outlined the pur¬
Mr. Koerner
ization
meeting
club as a social group
good fellowship and
develop a closer social relation-*
ship among the members of the
poses of the
to promo'e
exchange. The meeting was turned
over to Mr. Landsberg following
his election
as
president.
36 ■>:
THE COMMERCIAL & FINANCIAL CHRONICLE
(2228)
Outlook for
keep the people to be concerned about their
(Continued from page 2)
outlook for freedom bright, then future, dangerous for them to be
through hard work and intelligent
the greatest responsibility
faced fearful. Our American system has
action.''
traditionally offered rich rewards
Yes, freedom has its price. And by you and me is to fortify our
for hard work and creative think¬
all of us are obligated to pay our capitalistic system against either
frontal or flank attacks by capi¬ ing. r It has imposed reasonable
share.
The part we, as members
penalties on those who did not
of the business community, have talizing to the fullest extent on its
That's why it has
We have
every work or think.
to play looms large once we wrap potentialities.
been dynamic.
our - minds
around
one
funda¬ right to deep gratification in its
Of course, the opportunity to
record to date, but we should re¬
mental truth, namely, that both
member that there are still too use rewards and penalties most
on the basis of the historical rec¬
ord and on the basis of objective, many people whose incomes are effectively lies in the field of pri¬
vate enterprise.
Private enter¬
analysis, freedom as we define it low, whose opportunities are lim¬
ited.
We should also remember prise has greater freedom in offer¬
can
be
enjoyed only in those
that the ultimate test of any busi¬ ing incentives to its workers and
countries where democratic capi¬
tern of
^
talism
record;
historical
the
is
of the Chris¬
tian era some 40 billion people
have lived on this earth. ' Less
than 3% of these 40 billion peo¬
Since the beginning
ple, or about one billion, have led
free lives.
The balance had their
lives ordered for them either by
ancient
who
;
modern
or
That fortunate billion
for
the
have
freedom
knoWn
have
lived
;■ '?}?
chiefs
tribal
dictators.
most
part
the
in
the
for
our
its
produces to
management.
It is not
Therefore, bound by an intricate mass of gov¬
to the critics of capi¬ ernmental and bureaucratic regu¬
is
what
average
answer
should
talism
can we
it
man.
be
not
a
lations.
accomplishments, but rather
plan of actidn fori so' imprdving
past
a
effectiveness
the
that
it
of our system
yield ever-increasing
will
■■
better order the lives of individu¬
individuals
than
als
their
lives.
own
order
can
That, of
course,
has been the prevailing idea since
the
beginning
opportunities for more and more
of our people.
Before we can de¬
termine upon that plan of action,
we should take a long, hard look
at our system to find out what
makes it tick, what has made it
strong, what its weaknesses are,
and how they can be corrected.
I
will
It
century one great invention after
another
—
the
automobile,
the
think
of
takes on new im¬
with every increase in
the percentage of total national
income absorbed by taxes.
When
employment,
portance
only
take
taxes
a
small percent¬
of total national income, they
probably a factor of minor
importance. With expenditures in
the postwar period reaching levels
that may require as much as 15
tri 20% of the national income, the
structure of the tax system and
the amount and timing of tax col¬
lections become factors of primary
hard
and
work
hard.
goods
services, is, of course, made
of the combined demands of
individual customers—consumers,
up
business
firms, and the govern¬
At any given time market
demand depends upon
(1) how
ment.
much
have
I
said
form
It is not
so
have
socialistic
true
for
fly
the
socialistic
carried
the
out
doctrine
which, among
other things, calls for ownership
b,y the state of all means of pro¬
duction, including industries en¬
gaged in manufacturing, transpor¬
tation and
communications,
as
financial
is
not
cause
institutions.
necessarily
it
As
well
as
A
state
socialistic
in
engages
enterprise.
a
some
matter
be¬
public
of
fact,
all
states, including ours, engage
in
some
public enterprise
and
should in those exceptional situa¬
can best serve the
tions where it
•
eration
Why
attainment
of
the
socialistic
goal is reached civil liberties
are
either impaired or obliterated and
religious freedoms are curtailed.
That's what happened in Italy and
Germany.
in
pen
That's what may hap¬
England if that country
carries out
full program of na¬
It may happen be¬
a
tionalization.
cause
more
breeds
power
If
power.
you
lust
a
for
put into the
hands of government bureaucrats
not
only political power, but also
the way in which men
power over
make
their
living,
it
is
short step toward control
way
only
over
a
the
credit
is
available
are
war
ence
market demand that
we
must
High
Living
and (2)
Standard and
Instability
the
possible advantage of the energies
what
of
the
(he people who work within it.
natural in¬
Capitalistic
If you agree with
Jby preserving
me
System
that only
our American sys-.
.♦4
resourcefulness,
how well they work to¬
.
'
;
'
.:.t*
-
5
Let's first try to find' out what
makes people work? and think.
Few
people work for work's sake.
Fewer
settle down to the tough
job. of thinking just fori the fun
of it.
Most of us ordinary fel¬
lows put forth our best effort only
as a result.of pressure in the form
of penalties for inaction, and re¬
wards
for
wards
are-
fluence.
extra
exertion.
Re¬
the most powerful in¬
In
fact,
psychologists
have discovered that rewards have
nine
times
the
penalties.
pulling power of
And the psychologists
also
against excessive fear
warn
and
penalty, because fear corrodes
does
not
stimulate.
we
must
more
for basic needs,
use
chance
we
have
We
need
:
better
timing in the
construction of public works.
In
the past, we have had the greatest
volume
of
public works
during
times of prosperity and the low¬
est volume
during depressions. It
ought to be the other way around.
Through better timing of public
works, it should be possible to
bring about a great increase in
stability in the construction in¬
dustry.
III.
Unemployment Compensation
Insurance
So
ited
far,
■' ■'
we have made only lim¬
of unemployment com¬
use
pensation
insurance
as
social
a
.
growth is dependent on them. The
special handicaps which confront
small business must be recognized.
remaining Means must be found for making
goods
.
promise of
a
I.
We
need
a
new
complete
recast
of
and
expanded fields of credit
available
small
to
business
upon
capable, management.
Government has an opportunity to
proof
of
small business by develop¬
extensive informational
services than are available today.
help
ing
more
Beyond these specific measures
there
is
search
need
for
intensive
re¬
both by government,
cational
institutions
and
edu¬
private
problems for which
there are no ready answers avail¬
able. The shockingly small amount
that has been spent on fundamen¬
groups
tal
Taxes
on
economic
tional
research
is
a
na¬
As a nation we
have been, willing to spend hun¬
dreds of millions of dollars for re¬
disgrace.
our
our
there is
reasonable profit;
so
these
When chances of profit are dreary,
for
,in which
several specific areas
government can and should take
action quickly.
Among these are:
business
(The
is healthy
n.
Public Works
tax system.
In my opinion
present system exerts a de¬
search in technology, but pathetic
What is true of the individual vastating influence on the dyna¬
amounts have been brought to the
buyer is true of business.
Busi¬ mism of our economy and also
support of research that will help
As
ness can postpone is purchases contributes to its instability.
build a society that will use that
even more
easily than individu¬ a first step toward correcting the technology for the public^ Welfare
^
als.
Modern competition makes weaknesses in our present sys¬
that will administer that Research
business put more and more of its tem, tax rates should be stabil¬
wisely. The research goihg: oh; in
the the
money into capital goods—build¬ ized, set so as to balance
principles of admihistr ation,
ings and machinery, office and budget in a period of normal in the
understanding of our ec6store equipment and inventories— prosperity, and then let alone. The
nomic
and
social -environment,
to make possible low-cost produc¬ significant
feature of stabilized and in the field of
human rela¬
tax rates is that they result in the
tion and to provide the value and
tions is today tragically- small!
collection of a high volume of tax
We need not only- to encourage
services which buyers demand. If
dollars in periods when inflation
businesses do not make such pur¬ threatens and a low volume of tax economic research; ^ut1 after we
get the facts we must: be willing
chases, the savings of both indi¬ dollars in periods of depression. to
face them if we hope to pre¬
viduals and businesses cannot find Stated otherwise, stabilized tax serve
capitalism.; We must give
rates are counter-cyclical in their
their
way
into the stream : of influence on our economy.
Sec¬ up trying to use slogans, cliches,
and
benighted
expressions/ of
active, creative capital. But busi¬ ond, at the earliest possible mo¬
views based on prejudice as an¬
nessmen will make investments in
ment, business'taxes should be re¬
swers
to
tough economic ques¬
duced.
Why?
Because growing
such capital
only if
.
and
It
are
to
Nazis found slave labor inefficient
-wasteful.)
depends.
These proposed
changes are, of course, just three
among many that should be made.
there is no money magic,
formula, no one cure for
boom-bust cycle.
ant
dynamic? A dynamic, productive regularly. On the other hand, the
is one which takes fullest more
money
we
have
beyond
as a
Fortify the
one
no
'
economy
gether.
much
.
to have
.
The tax rates should
tool, but its effectiveness has been
dramatically, demonstrated.
It
gives to. people the confidence in
While we are seeking for meas¬
continuity of income which, is', so
ures to minimize the instability of
essential .to the achieverhe'nt f of
our economic system and thus cor¬
greater/ stability in our ecohomy'f "
rect its weaknesses, we must con¬ It also makes a
tangible Contribu¬
stantly
keep in mind that its tion through the maintenance of
strength lies in its natural lusty purchasing power. We should not
vitality.
That we must not lose. allow the circumstances that there
Otherwise, we may end up with has been considerable malradmina stabilized poverty so character¬
igfratioh' of unemployment com¬
istic of the tired, regimented, oldpensation insurance to blind, us" as
Paradoxically, the most import¬
In the few minutes
single factor in creating insta¬
to me I should like to indicate,
give you my ideas bility in market demand in the
rather sketchily of necessity, cer¬
as to why our economy has been
United States is our high standard
tain contributions that government
dynamic and why it has been un¬ of living. When you give thought
and business can make toward the
stable, then to outline briefly how to it, the reason is obvious.
If
achievement of our objective.
we should go about developing a
most of us are just barely able to
Government has the general re¬
program aimed at protecting and earn a minimum living, we will
enhancing its dynamic productive¬ have little choice as to what we sponsibility of providing an eco¬
nomic climate in which free labor,
ness and moderating its tendency
buy or when we buy it.
Our
free agriculture and free business
toward booms and busts.
money will go for food, clothing
can
flourish.
In addition, there
Why has our economy been and shelter that we have
and
period.
be changed so that
they do not
bear too heavily on these creative
inventive, groups upon which so
■
Unstable
ventiveness
look for creative
leadership dur¬
ing the next quarter of a century
the forgotten men of the- post¬
'
Dynamic Economy Is
and upon
on
age
I propose to
they live.
i: j
•
or
-
objective of complete governmen¬
tal
ownership. ;■ Whenever
that
happens, long before the final
•
cash
Assuming [adequate natural re¬ choose what we buy and the
public interest. But we must dif¬
sources, its dynamism will depend larger the number of
ferentiate ' sharply
purchases
betweep the
on - the
extent
to which we can
state which is carrying on some substantially
postpone—and often
which the potentialities of its citi¬
do, even if we have money in the
public enterprise and the state
zens are realized; upon how much
bank.
'
which has undertaken
seriously use is made of their
the
*
a
way up.
Third,- I
concerned about high tax rates
growing junior executives, as
well as growing artists, growing
writers, and growing actors. These
groups, to whom America must
am
customers, businessmen and the world economies.
to its benefits.
Our aim should be
government, and (2) how much
Now
comes
the $64 question. to extend it as far as practi'cal^to
of that cash or the proceeds of What kind of a
Payments, of course',r
program can we all workers.
that credit they are
willing to get under motion that will yield should never be large enough; tov
spend for goods or invest in busi¬ us dynamic stability?
Perhaps make unemployment attractive.
ness assets.
you will agree with me that the
IV.
Instability in market demand complexities of the problem are
results from a complex set of fac¬ such that
Small Business
(1) it will take the col¬
tors.
Among those factors are: lective wisdom of all of us—gov¬
Obstacles which stand in the
High standards of living; the large ernment, business, labor, agricul¬ way of new business and the
capital investments required for ture and the educators—to help
growth of small business must be
modern business; the tax system.
us work our way toward our goal,
removed
because
our
future
collectivism,
fascism, nazism,
not
fighting their
to
and for the second time in a gen¬
of
obvious because many
which
states
banner
holds
ruinous to enterprises that are
are
are
because
demand. Market demand for
the dynamism and high
productivity of American indus¬
try have proved a decisive factor
whether
it
be
in winning a World War.
communism, or socialism.
The
The second major characteristic
case against the totalitarian
states,
of
our
economy—and this has
of course, is clear as crystal.
In
been its greatest weakness—is its
every such state, past or present,
During the past 100
freedom of the individual is under instability.
attack
constant
or
totally non¬ years there have been no less than
26 business depressions, culminat¬
existent.
ing in the boom of the 1920's and
The case against socialism is not
the bust of the 1930's.
so obvious, but it is
just as strong.
What
every
is
and
new
better social order for themselves.
*
stability
the
be too harmful to
well-established,well-financed businesses, but they
Private
instability in business activity pri¬
marily through affecting market
the
radio, the airplane, and numerous
others—has given a start to new
industries which have grown into
of time.
In con¬
We have perfected the
and revolutionary giants.
techniques of mass production,
concept of a capitalistic economy
stream-lined
distribution,
and
is that individuals, if given op¬
modernized
our
merchandising.
portunity for a full expression of
We have seen the income of the
their abilities, can bring about a
better standard of living and a average American family doubled;
trast,
*
and hence
demand and
the stability of incomes,
on
importance. By collecting too lit¬
tle in taxes in periods of pros¬
enterprise also
gets a greater stimulation as a re- perity and too much in periods of
Suit * of the "impact of penalties depression, the tax system oper¬
ates to encourage inflation and to
upon people.
For example, if a
private enterprise is inefficient, it deepen depression.
can go broke and quickly.
That's
A Program for Stability
a
penalty that means something.
It is against the background of
No one wants to go broke.
To
these various factors which influ¬
avoid going
broke, management
of
recital
they are often put off even though
ample cash reserves are on hand.
Taxes also; affect
market de¬
mand.
The influence of taxes on
private enterprise develop a program to moderate
Above all, due
has this opportunity, through re¬ its fluctuations.
wards
and
penalties, to realize weight must be given to human
pean states—all capitalistic econo¬
behavior.
Our free economy op¬
more heavily on the potentialities
am particularly eager to have you
mies.
erates through
the decisions of
pace-setters in the Nylic organ¬ of the people that private enter¬
ization acquire such understand¬ prise must have a predominant many millions of consumers and
Freedom Under Capitalism
many thousands of businessmen.
role in our economic system if we
Even a casual analysis of capi¬ ing because your contacts extend
Confidence on the part of indi¬
far and wide and you can be of are to keep it dynamic.
talism and collectivism reveals the.
viduals in the continuity of their
immeasurable value in promoting
Next, let us consider the ques¬
reason why freedom flourishes in
tion of inherent instability. Free incomes, and confidence on the
economic literacy.
the one and withers in the other.
The first major characteristic of economics, largely in consequence part of businessmen in the pros¬
In all collectivist economies the
our economy is its dynamic pro¬
of their freedom, are subject to pects of a profit are paramount
idea prevails that dictators or bu¬
considerations.
ductiveness. Since the turn of the powerful influences that induce
reaucrats can somehow or other
United States, the British Empire,
and certain of the western Euro¬
■rh
system
ness
prevails.
Here
capitalism
Thursday, April 24, 1947
purchases
are
postponable.
must
look
to
plowed
additional
needed working capital.
High tax
rates on business profits may not
back
earnings
for
tions.
And
tribute
Nylic
.
I
now
to
the
group
to
pay
contribution
the
should
already
like
has
made
Volume
toiwar
Number
165
dr- the
THE COMMERCIAL & FINANCIAL CHRONICLE
4588
of
achievement
dynamic stability.
By your rec¬
ord-breaking sales since V-J Day
We
doubled.
also; largely
dream of abol¬
can
realize the age-old
Utility
money
important
of
you have helped
materially in of all, on this material foundation,
moderating a boom. Every pre¬ we can build conditions which
mium you have collected not only will provide not only equality of
has helped reduce inflationary opportunity but certainty of op¬
pressures but it also will help to portunity for every man, woman
moderate any recession because it and child to grow and develop in¬
will make available loans when tellectually and spiritua 11 y.
they may be most needed.
But Therein, it seems to me, will lie
you have, done even more than the strength, the power, and the
that.
You have set an example grandeur of the America of to¬
of salesmanship that should' in¬ morrow.
#
spire men in all other fields; an
example'that is badly needed, be¬
at
ishing
Most
poverty.
of tax laws* is. to raise
fairly to meet the expenses
government.
which
That is the target
the
of' taxes
shotgun
•s
;
in too
many
has; gone vyery soft.
The day is
will
point to your sales accom¬
plishments and urge
that
our
salesmen go out and do likewise.
If they do as well by us as you
have done by Nylic, a most im¬
portant
contribution will have
been .made to the maintenance of
that
T market demand of which I
have spoken at such great
length.
can. be a vital factor in
On
asserted
in
a
that
Promote Understanding of Our
level
readjustment in the
of several important
industries without
much
disturb¬
V'T.v1";
Economy
^ ■''**
ance
to employment
conditions.
:"y By now I hope I have con¬ He did not look for a general col¬
vinced you, both as citizens and lapse in the wage-price structure
salesmen/that there is much more as occurred in 1920 and 1921, and
to do if we are to keep
outlook for freedom bright.
for
you.
the
'
not
are/diligent and wise in seeking
man
if /we,
arid
the
people
of
the
United States, are willing to work
harder and thirik harder, then the
25
next
promise of
progress without parallel.
If we
years
hold
maintained
a
the * second
if
that
nation-wide
the
remain at peace the real incomes
earnings
of
of
our
people
can
be
it
pattern
have
ever
national
income
had." Should
the
we
na¬
tional income retreat to the level
mass
or
ends.
If such changes
made, let them be ac¬
complished openly and plainly by
to be
are
statute
a
drawn
for the
purpose,
brought about by indirection
a
revenue
Our
act."
the
wages
operating
out
takes
premise
free
private
should
be
is
enterprise
maintained.
'
Primarily the
managed
first
attention.
$70,000,
the
than 77
more
of
Treasury
cents
out of
underesti¬
this sort are
men
sibilities;
of
likely to induce
more
to persuade them to
rest?
With the present
a
Federal
we
Does any¬
to take on additional
respon¬
or
budget, and the budgets
bound
are
good
many
to
confront
to
years
for
a
the
interest
an
that most men do not
enjoy such incomes. To be sure,
they "are; but are not the man¬
agers of American corporations
and
men,
typically
on
all income earned in
of
$18,000.
reaches
or
more,
an
That
is,
a
income of $18,000
Pay
(After
Gross
of
of
Indeed,
at the. present time, an $18,000
salary is not notably high* and
many
rank
well
men
of
below
the
top
American executives
that
the tax
and
more.
re¬
*7 Another
examples state
my
the next dollar of in¬
on
earned
by
with the re¬
and' that the
men
spective- salaries,
rate of tax
salary is not
great.
so
the total
on
Here is
a
Gross Income—
—
Federal
taxes)
different income levels:!
in
Income
1930, 1940,
Taxes)
1946
at
the
only
1946
$2,578.20
.
the
budget at long last must be
balanced. To my mind, that prop¬
osition is pretty clear. It1 we can-r
jnot balance the budget in a year
of great business activity and full
employment, when can we balance
at?
The next question, whether pro¬
posed Federal expenditures can
fee reduced by $4, $5 or $0 billions,
one
as
which must be dealt with
either in
on
In
thick volume of
data
the necessity for and the
cost
activity; or
page of conclusions frpm a
each
of
a
a
government
few basic facts.
/.
,
', "
For this occasion, the latter will
fee < enough.
We can only afford
tke/President's budget if we feel
thatqvery, high business ac¬
tivity can b$ maintained indefi¬
jsqre
nitely;) aricjl further, if
we are
will¬
ing toi continue to bear the full
burden qf World War II tax rates.
Unlessj those/two factors persist
jhigh business activity and
vpry high tax rates—a Federal
feudget of $37.5 billions cannot be
balanced., Hence, in my view,
Federal expenditures must be re¬
—very
duced, arid competent
believe it can be done.
Federal
expenditures,
students
three
years after the war, are still sev¬
eral times the $3.2 to $9.7 billions
range,
still
of the, thirties.
too
many
There
government
are
em¬
ployees in too many bureaus and
departments. The vast sprawling
distinguished
to
easy
thorough
a
committee
and
secure;
re¬
is
if
even
not'*
it
is
secured, and actually reports, its1
views are not likely to be heeded. ■<"
Moreover,
been
there
published
have
already
number
a
of
re¬
ports containing recommendations>
of major changes.
The task now
is
to
put the recommendations
into
statutory
adoption.
tion
form
The
Representatives,. and
In
lor
Federal
actual
Constitu¬
provides that revenue bills
originate in the House of
shall
practical
fact,
so
they
in the Ways and
they do„
originate
Means Commit¬
tee, after an initial period of labor
by the excellent staff of the Joint;
Committee
Internal
on
The
most
have
the
Two
/
28,283.00
-r
44,710.00
of
08,548.50
of;
subcommittee
a
Committee
its
and
to get
more
Dependent
by
revenue
the ; product
on
staff
Ways
with
the
and
co¬
operation of the technical, staff of
the Treasury. Such a
joint effort
should be undertaken this Sum-
38,828.00
109,538.00
successful
been
work
Means
65,732.00
;
\
!
this
"...
bill ready for enactyear.
A subcommittee
a
character
can
•
much
do
effective work than any out¬
side group
Children
could possibly accomIt has a great amount of
plish.'
3,000.00
2,867.00
—
_
and
data
at
its
the
of
technical
command.
Most
Congressional
...
assistance
important,
members
of
such
a
group have been elected
by the people; and by their mem¬
bership 'riri the;
Committee
;
charged with ac¬
tual
responsibility for revenue
legislation. They can do a good
job, and they often have. It is
proof enough to note that the
present Chief Justice of the United
States
are
made
early reputation
of just such a
reduced, there are two substantial ernment. If budget expenditures subcommittee.
under control; that the Federal reasons for reducing surtax rates can be
brought down $4 billions
Fiscal problems are bound to
Government is going to try to get in the upper and middle brackets. or
$5 billions or $6 billions,'indi¬ haunt us for
years to come. Taxes
$1 value for $1 spent; that Federal First, the incomes of trie men who vidual income taxes can be re¬
will necessarily remain high. The
taxes, though they will need to manage American business fall in duced and a substantial payment
Federal Government will continue
be high, will not have to be truly those brackets, and we want to can be
made on the debt as well.
to be the senior partner in every
astronomical.
encourage them as much as we Since Congress
probably will not business and profession. It be¬
can
to vigorous activity in the undertake this
year a revision of
hooves us, therefore, to.-use our
2. Federal Taxes
next decade.
Second, since the the whole normal tax and surtax
best brains on the tax system un¬
The premises on which the Fed¬ wartime
increases
in
tax
rates rate
schedule, the fairbst proce¬ der \vhich we must..live and move
eral tax system should be based were sharpest in those brackets,
dure for tax * reduction seems to arid have our
beings. We must
in fairness they should be given be
are more important than the de¬
a
straight
across-the-board
try to shape it so that, burdensome
tailed rates, exemptions and sub¬ priority in tax reduction after the
percentage cut. If this is done, as it will
be, it still permits, and
stantive nrovisions.
war.
the progressive rate structure is
indeed encourages, American en¬
First of all, what part should
But Congress should do more. left in effect, with a pro rata re¬
terprise to function and to flour¬
tax statutes play in our scheme of It is also true that the base of the duction. Every taxpayer benefits,
ish.
The task is not easy in a
things? Everyone recognizes that income tax has been materially to the extent that he has been complex and disordered civiliza¬
taxes, particularly individual in¬ broadened through the lowering paying taxes.
The big taxpayer tion, but, it can be done if Con¬
of exemptions. The bulk of tax¬ gets more benefit than the small
come taxes, of the magnitude we
gress and the people see the issues
have now, and shall have ihrough- able income and of taxpayers are taxpayer,
but only because the and meet them wisely.
I hope *
out the foreseeable future, play a in the middle and the lower in¬ taxes
he has
been ? paying - are that
here, as .in the scientific
major part In shaping business come brackets. Hence, it is riot many times as great both in rates fields, it will be
possible to say
decisions. It follows that the im¬ possible to raise exemptions much and amounts.
that, if an American really under- *
pact of taxes upon our economy without too great a loss of rev¬
stands a problem,, he is well on
3. The Next Step
deserves careful study, in order enue; If expenditures can be re¬
his way to its solution.
that our taxation policies may be duced, however, rates in the lower
Reduction of Federal expendi¬
shaped to serve the same govern¬ brackets can be somewhat re¬ tures and of Federal taxes by
mental or economic ends that our duced, arid they should be. So long several billions will be
a
major
C. B. Whitaker Has Opened
other national policies do. If we as the individual income tax is fiscal
accomplishment, but a great
believe in free private enterprise, relied upon to raise approximately deal will still remain to
be done. Offices in New York City
half1 the Federal budget, as it There has not been a
our tax system should be framed
thorough
Clarence
B.
Whitaker
has
to permit free private enterprise must be, the initial rates of the revision of the substantive
pro¬
to function and flourish for the income tax cannot be very greatly
visions of the Federal revenue opened offices at 2 Rector Street,
general good.
reduced; but it is possible to give laws since 1942. In the meantime, New York City, to engage in the
is
Congress to make it clear
that the Federal budget is really
Hence, if income taxes
for
are
to be
penditures
of
the
Federal
Gov¬
as
the
an
Chairman
i
'
•
This is not to say,
should be
taxation
a
however, that
directed pri¬
"t The individual income
tax
produced
$18.26 billions in 1944; $19,034 billions
economic policies deemed desir¬ | in 1945; and $18,331 billions in 1946.
The budget estimate for 1947 is $17,907
able at the moment. The primary
billions and for 1948, $18,391 billions.
marily
to
enforce
social
or j
number
have
been
of
sections
found
to
and there have been
court
■
'
.
•
Revenue
s
ment next
'
4.202.00
——
that
1
^proposed, is
someone to
appoint a distin¬
guished committee. But a really
mer,
-
alike
'
a/'!
the
for
bills
/
$2,934.80
3,000.00
a year ago,
Democrats
The method for
7,976.50
With
Man
month
which
on
vision of the revenue laws, which
is usually popularly
14,347.50
164,156.25
Married
last
topics
recommendations.
9,492.00
200,000
—
and
other
Department has been working for
years, and is prepared to make
Various
at
,
licans
dozen
realizes.
Budget Bureau used in
its estimates
The
Committee
18,952.00
of Federal activities has still
3,000
interest, is wrong !
works, badly in1
Secretary of the
public
■
1948 will not be, I am afraid, the
5,000
4,997.75
4,950.00
4,515.50
the "normal postwar year" of our
10,000
9.939.25
9,696.00
8,423.00
President's budget would be $10 hopes. There must be greater ex¬
20,000
19,546.25
18,468.00 * 15,960.00
trillions, out of balance.
:
penditures for international relief,
50,000
s
46 311.25
39,636.00
29,280.50
e Hence
the first great question for the Army and Navy, for the 100,000
86.661.25
66,872.00
45,907.00
veterans, than will be required 200,000
feeing debated in Washington to¬
164,261.25.
.110,868.00
69,331.00
Even so, the budget
day is whether Federal expendi¬ hereafter.
fl0% allowed as deduction from gross income.'
tures can be reduced,
so
as to should be brought down in 1948
What these figures show is that all taxpayers a percentage reduc¬
permit a substantial payment on to around $32 billions, and in suc¬
the public debt, and some reduc¬ ceeding years to $20-$25 billions. steep increases in individual in¬ tion.
tion in taxes. There seems to be One good way to promote business come taxes have occurred in the
The key to the whole problem
general agreement among Repub¬ confidence and venturesomeness middle and the upper brackets. of tax relief i$ the level of ex¬
that
Means
4,870.00
86,556.25
fully trimmed down from
>
Treasury listed to the Ways and
of
1940
100.000
the free-spending days of the war.
practice.
joint
;
46,206.25"
—
no
theory 7 and
9,876.25
19,441.25
-—
-
50.000
con-'
of insurance in which the insured 1
4.966.25
10,000
20,000
or
staff work that must be performed
is far
greater than the
after
1930
—
remote
Taxation.! The amount of essential
$2,968.50
—
some
tingent reversionary interest, and
(income
Single Person
efficien¬
has retained
table showing the take-home pay
Federal
Incomes
incomes,
more?
or
ex¬
once
the United States Treas¬
fTake-Home
with
men
these amounts
effective
50%
tax of trusts in
come,
Treasury has too great
come
man
for
The treatment in the estate
which the settlor
ness.
in
labor.
own
believe that surtax rates
■
and
the retention
cf
coroorate
earnings fcr the needs of the" busi¬
sate for his
one
clarify
family trusts: the
issuance to officers and
employees
of options to
buy corporate stock;
has retained
ceive
man-in-the-street
$3,000
i 5,000
not been
out
to the statute are
needed to
the treatment of
additional dollar he earns,
leaving him 23 cents to compen¬
take
fundamental
cess
be¬
(Continued from page 2)
highest
social
cents
every
American businessman today. The
fact 1s that the tax rate exceeds
Taxation for Free Enterprise
the
economic
desired
time,
are
added
and
accomplish
the
cies.
most
to
at the same
to
come
mates by a surprising margin the
income
taxes
payable
an
by
wage
in¬
likely to be
some
further price increases by
companies that are not able to
absorb
undertaking,
68
every
Gallup polls have revealed that point is that
of
round
there
creases,
tions of businesses and
men, with¬
out
our
duration.
comes
fairly from all sorts and condi¬
of the individual income tax upon
Regarding the 15-cent-an-hour
wage
increase granted by the
General
Motors
Corporation to
the electrical workers, Mr. Hoff¬
improvements which will make
for its more effective functioning;
enough to draft laws
that will raise billions of revenue
the managers and the stockholders
of American business that requires
recession that may come will
be of great depth or long
But * it's
all * worth
doing.
If,
through promoting a better understanding of how our economy
functions, ' we can ward off at¬
tacks which would vitiate it; if we
.
.
any
hard
by men. Any new
Capital, not developed by the busi¬
ness itself, will have to come from
men.
If, therefore, we are pri¬
marily concerned with the main¬
tenance and progress of the free
enterprise system, it is the impact
and selective
price
Treasury
additional dollar he earns,
leaving him 32 cents for his own
work. If he can increase his in¬
is
be
'Selling,
products such as steel and auto¬
keeping ,.our factory! stacks smok-. mobiles. He looked for an orderly
'
the
shotgun.
It
than
more
vigor and the enterprise and,the in these men's activities to afford
competition of the men who man¬ to encourage them toward a life
age it.
Do not forget that how¬ of leisure. ;••.
>'';;v.,V, ■
ever great our corporations
It may be said that these sala¬
may
become, they will be and must ries are the salaries of successful
,
■
$44,000,
takes
even
What makes it go?
manufacturing
companies
are
making
exorbitant
profits
was
highly disturbing to business and
may bring about a general stop¬
page of buying.
While • agreeing
that some prices were too high,
this was not true of important
of
difficult
a
system
all
income
an
a
that
confer¬
press
belief
the
Once he reaches
earn.
It is
#
April 18, in New York City,
Hotfman
Mr.
ence
can
with
in
Readjustments
not far off when we in other lines
he
target to hit,
not
Foresees Selective Price
lines selling
cause
ury is entitled to more than he is
himself of every additional dollar
should be aimed.
^
.
37
tion.
of
the
work
a
law
badly,
number of
decisions that need correc¬
For example, amendments
securities business.
in
the
past was
Eiseman &
&
Co.
Mr.
Whitaker
with Alexander
Co., and D. M. Minton
•
:
*
•
.
33
THE COMMERCIAL & FINANCIAL CHRONICLE
(2230)
Thursday, April 24, 1947
How Are the Banks
Our
Reporter on Governments
By JOHN T.
(Continued from page 8)
authorities.
security market has gone on the defensive, with
pending clarification of the new
credit restricting policy of the monetary authorities. . . . Prices have
come down in some instances about one-half point from their tops,
on increased volume, part of which was accounted for by selling on
behalf of Federal and the trust accounts. , . .
While the money
managers are not hitting the market now with securities, it is lndicated that issues are available for sale, if one should be looking
for them.
.
.
the last five years the
bank
earnings has
been
For
p
.
little doubt that a
There seems to be
ceiling has been put on
adviser to the Board of Governors
which means
until the mar¬
ket itself gives more proof of what is likely to take place. . . .
Although non-bank investors have substantial funds that eoula
be put to work, they are not inclined to do very much, while
there is uncertainty as to what might happen to the eligible
of
t
the
Federal
said:
Reserve
System,
1...
"In
the
management
services commensurate with their
cost to the community.
Banks'
earnings must be adequate to se¬
MARKET CLUE
bank obligations will be watched very
closely because the trend of prices of these securities should be the
clue as to what might be expected of the other issues on the list. . . .
The market action of the
cure
sufficient capital, to pay ex¬
to yield a reasonable re¬
With the very
large growth in the Government
penses,
turn, and no more.
of the credit base
portfolio, there is danger that
through the partial redemption of Treasury bills is the most impor¬ bank
earnings will be unnecessar¬
tant development in the money markets in the last 10 years. . . .
ily large.
Some device must be
The weekly retirement of bills, which are practically all
found to prevent this from hap¬
owned by the Federal Reserve Banks, along with war loan calls
pening for this would be no more
on the member banks to replenish Treasury deposits at Federal,
desirable than it would be to per¬
will curtail the ability of the commercial banks to make loans
mit the banks to suffer from in¬
that the restricting
It is believed in some quarters
purchase government securities.
of
lose
will
Banks
.
adequate earnings.
.
Federal
retired by the government, the
Treasury bills are
As
Reserve
.
government
securities and Treasury
de¬
posits. . . . The member banks by this procedure will lose Treasury
deposits and reserve balances. . . . When the Treasury replenishes
its balances at Federal, by means of calls on its deposits with the
member banks, the credit base of the commercial banks is cur¬
tailed.
This new policy of credit restriction is a well thought
...
that can have a very decided effect on the money mar¬
kets as well as the prices of Treasury obligations. ... It also gives
the monetary authorities greater flexibility of operation than would
have been the case if other measures had been adopted. . . .
out program
*
CREDIT RESTRICTION
new
Restricting of the credit base to fight inflationary forces is not
because the authorities took measures to curtail the expansion
1937, when reserve requirements of the banks were raised. . . .
Whether the credit base be limited through higher reserve require¬
in
bills and war
calls, depends upon existing conditions, although the results are
likely to be the same. .
.
The contraction in the credit base, which
seems to be in the making, will cut down the ability of the banks
to make loans and buy government securities. ...
If the commercial banks are to be removed* only temporarily,
ments, as in 1937, or by the redemption of Treasury
loan
.
noticeable effect
securities* . . . On the
other hand, if the member banks should turn out to be sellers
of government obligations, the effect oa the level of prices of
these securities and their future trend could be much more
buyers of Treasury issues, there will be a
as
upon
the trend and levels of government
drastic.
.
The banking
function, like every other eco¬
nomic function, is justified only
insofar as it gives service for the
returns it receives and the policy
some
questions
restrictions, it
seems,
by the member banks toward the government market.
.
will
conditions.
restrictions will be used by the
If commodity prices should level off and then
decline, there will most likely be less use of the restrictive meas¬
If they continue to rise, then there will be greater use
of credit restrictions.
The same would seem to hold true for
bank loans.
As for the commercial banks, the way in which
they rebuild their credit base could have an important bearing on
the extent to which the credit limiting measures are used.
.
If the member institutions should dispose of certificates or
short bonds (but there is a limit as to the amount of these that
can be sold) or borrow from Federal, and not affect government
security prices too much, the new policy will most likely be cop*
ures.
...
...
.
.
im¬
the public interest de¬
mands the purest, most realistic
concept of bank earning power.
portant,
Actually,
figures
the
of
bank
earnings offered and released by
the banking authorities, have by
no means portrayed the real situ¬
their
own
there
of how banks
earning
This
monetary authorities will depend upon (a) the movement of com¬
modity prices, (b) the trend of bank loans, (c) the manner in which
the commercial banks adjust their reserve positions to meet the new
.
...
officially
figure of
$206 million?
The difference in
the use of these words, Net Cur¬
rent Operating Earnings, is $66
million or 3% on average capital
accounts.
How can there be pub¬
lic understanding of bank earn¬
offered
ing problems if figures
in
sented
a
manner
are
pre¬
which
pre¬
public from knowing
really going on in the
what's
Here is still another illustration
of the misuse of words.
This ap¬
plies to bankers
ficial
use
stockholders.
is
As
a
misunderstanding
doing. The true
of banks has ap¬
are
power
has
reacted
unfavorably
on
The fact is that
securities.
item
is
not
earnings,
but
really just current income, sub¬
ject to bond premium amortiza¬
expenses,
and
Federal income taxes.
tion,
operating
State
and
The
so
public will remain confused
long as the language of experts
is not clear and precise.
Here it is well to point out that
banks, when amortizing
bond premiums, follow an unreal¬
istic accounting procedure which
makes
their
earnings a p p e a r
larger than they actually are.
If
banks are unrealistic about their
bond
If
recurring depreciation is ex¬
cluded from current operating ex¬
penses,
net
current
operating
earnings become increased by the
amount previously used to antici¬
pate depreciation.
income,
can
they
expect
the public's judgment
realism
in
of bank
earnings?
-
Most banks operate bank prem¬
Others pay rent.
ises.
would
be
Bank fig¬
intelligible
more
and
useful, if all were on a uni¬
basis and the- operation of
bank premises were netted into
one figure and included in current
form
income
current
or
whichever the
In
case
expenses,
may
addition
current
net
to
be.
operating
taxes
based
on
income,
banks incur additional tax liabil¬
ity
profits arising from sales of
on
securities, and frequently, on re¬
from sale of
coveries realized
as¬
sets
previously written down. On
the other hand, tax liability is re¬
duced
when
banks
experience
capital losses.
Some
the
of
larger
banks
in
their annual report* to stockhold¬
ers,
show their profits from sales
net
of
applicable
securities
of
recoveries
Taxable
taxes.
similarly,
some
many
2-gf° "recurring deprecia¬
banking house, furniture,
fixtures."
and
ures
banks?
ment
Item
in
tion on
the
vents
this
peared exaggerated in the official
findings given out to the public.
WHY AND HOW MUCH
The full extent to which credit
consid¬
Because these questions are
to
.
.
fairly
be
can
ered.
these
figures easily reconciled with the
published reports issued by banks
by the policy that will be adopted
measure
had not been deducted from
come
the
power
result
The extent of the use of these credit
be determined in
the
wrong
as well as to of¬
agencies, and, if they mis¬
words, can the public be
blamed for being confused?
Cur¬
rent Operating Income, which is
This
statement
raises
many
before expenses and taxes, is un¬
questions.
When are bank earn¬
fortunately described in Item 1 as
ings adequate? What is a reason¬
"current operating earnings." This
able
yield?
Who is to judge
For example, the
whether earnings are sufficient to is confusing.
wrong impression is created when
attract
capital?
Obviously,
a
it is said that commercial banks
proper definition of bank earning
have
"earnings" from
Govern¬
is essential before such
of the banking authorities should
be guided by that principle."
ation at the banks, nor are
.
.
the question of recurring depreci¬
use of words creates
impression. Net current ation on banking house, furniture,
Many banks have
operating -earnings of the com¬ and fixtures.
mercial banks here on Manhattan applied capital funds and reserves
Island for the year 1946 totaled to reduce the statement value of
about $140-million, representing a such assets over and beyond the
return of 6J/2% on average capi¬ normal or regular amount per¬
tal accounts.
The public, how¬ mitted as a recurring deduction
ever, is led to think differently. for income tax purposes.
It believes that the earning power
This is, no doubt, a commend¬
of this group of banks is much able procedure. However, regard¬
less of whether or not such poli¬
greater.
It has support for this
opinion because in the official re¬ cies have been followed, a truer
turns, Item 3, Net Current Oper¬ picture of the year's
earnings
ating Earnings is shown at $206 would result if banks included
million.
This is a return of 9^2% under Current Operating Expenses
—not 6V2%.
in their report of earnings, the
' A'-:(
-Ij-y
Here is a difference of $66 mil¬ regular amount claimed for re¬
lion.
How would the public, un¬ curring depreciation on banking
familiar with the real workings, house-, furniture, and fixtures: know that $66 million of applica¬
Provision for this has already
ble taxes based on operating in¬ been
made in the official returns
a
...
of the
banking system emphasis should
be on seeing that banks render
issues.
,,
example, in November 1944,
Goldenweiser, economic
Dr. E. A.
prices of Treasury obligations for the time being,
that investors will be cautious, and on the sidelines
|
question of
recurrently
public issue.
a
in
ence
ask
to
senting these figures may not
have something to do with mis¬
understandings which exist today
in the minds of many.
Later I
shall refer to some of these fig¬
ures.
We all know that during
The government
i;
time
whether the methods used in pre¬
CHIPPENDALE, JR.
indications it will remain that way
>
is
It
figures unusual
current roperating
tax
are
..Conversely,-
treated.-
banks have segregated from
credits which
deductible losses
when
resulted
were
established.
In this way, every effort is
to keep in clear view for
.
taken
stock¬
holders the true earning power of
their banks.
If the total tax
were
included
in
liability, Item -7,
current
operat¬
Net Current Oper¬
ating Earnings, Item 3, would then
ing
expenses,
substantial portion of
portfolios held by banks was be closer to the real facts than it
What are the reasons for this acquired
at
prices above
par is now with the tax liability ex¬
confusion?
Banks must make provi¬ cluded.
For- example, the total
First, there are seri¬ value.
ous defects in
terminology.
Sec¬ sion for the bond premium paid tax liability for 37 New York City
ond, capital transactions are not because this may represent a loss banks was $75 million, and if this
properly segregated in the official on sale and is sure to represent a figure were included in current
reports of the supervisory agen¬ loss at maturity.
How this pro¬ operating expenses; net current
cies.
Third, "Net Current Oper¬ vision is made has a vital bearing operating earnings would then
ating Earnings," which is shown on net current operating earnings. stand at $131 million against our
all banks and their stockholders.
as
Item 3 in these official returns,
calculated without any provi¬
A
very
bond
banks do not figure of $140 million and the
amortization sched¬ Federal Reserve Board figure of
ules.-; They buy premium securi¬ $206 million, which of course is
taxes.
ties and promptly write off the before any income taxes. : Thus,
What
is
meant
by
earning premium, often using reserves or it is apparent that the distortion
power? In the ordinary course of proceeds from some other capital of bank earning power would be
tinued as long as commodity prices and loans move up.
The bond for which much less if this method were
On the other hand, if the commercial banks should dispose of their business, banks have day-to¬ transaction.
followed.
\
:
v.
their long bonds, as they did in 1937, and create chaotic conditions in day items of current income and they pay a premium is put on the
Out of-net current operating
the government bond market, there would undoubtedly be immediate current expenses. These items are books at par.
A rate of invest¬
of a recurring character.
Hence, ment; income apparently higher earnings may cash dividends to
changes in the method of limiting the credit base, « . ♦
the
market;, provides,
they are reasonably foreseeable than
is stockholders be properly declared?
BILL REDEMPTIONS
by banks, and are usually con¬ thereby reported to the authori¬ When a cash dividend is paid
.
.
.
.
move
have
on
into
to
uncertain
the
do
is
to discontinue the redemption
loan
war
measures.
It would
stages, then all the
accounts,
stop
to
-
.
.
money
managers
of bills and calls
the £ deflationary
monetary
be
been defrosted.
difficult if the bill and certificate rates had
more
.
.
If the
.
retirement of small amounts of Treasury
bills and the repayment of war loan accounts
should not retard the
upward trend of commodity prices and loans, the redemption of bills
could be increased.
If the uptrend should persist the authorities
could still defrost the bill and certificate rates in a move to further
,
.
.
curtail credit, that might be
affecting commodity prices and loans.,..
Although the opinion is
more
widely held now by followers r
of the money markets that short-term rates will not be defrosted,
this should not be ruled out entirely. . . . Whether it will take
plaee
or
not
and loans.
seems
...
-
to depend upon the-future action of prices
•
\ '
a • »■*
r
.
.
..
However,
many
follow regular
.
...
trollable.
come
less
Current
operating
in¬
ties and then to the
public.
The
current
operating ex¬ higher the coupon, the greater the
penses gives net current operating income.
Obviously, such "inter¬
income^—not earnings.
There are est income" is misleading, ob¬
taxes to pay on this income-—State scures existing conditions, and re¬
and Federal.
It is only after de? sults in an overstatement of "net
ducting provision for such^taxes, current operating earnings.";
that the earning power of banks
Many banks thus contribute to
can be properly identified.;
some of the misunderstanding
in
This earning power has-come -to the public mind. A valuable con¬
be described technically ^
tribution could be made by com¬
current operating earnings, an exr, mercial: banker
in agreeing on
pression which has found accept¬ regular amortization of all bond
..
-
.•
•
sion for State and Federal income
.
The redemption of limited amounts of Treasury bills, not only
gives back to the monetary authorities control over credit but also
gives them greater flexibility in carrying out the policy than would
haye been the case if rates had been changed.
If commodity prices and loans should turn dowmand business
.
is
in the
standardized form of 'premiums for purposes of deterthe American Bankers Association*
■mining and-reporting net current
ance
and the New York State Bankers' operating earnings.
The
Association.
It has been adopted authorities,
too,
should
other than net cur¬
from
a
rent
operating
source
earnings, ' it,' can
only come from capital or from a
capital transaction.
There is no
source it could comer from.
Such earnings as are retained and
other
added to capital
accounts, consti¬
tute the means to- meet -and * ab^
sorb
losses
losses.
and
There
are!'
always
chargeoffs. but
only
profits and recoveries.
In recent years banks have fortu¬
sometimes
an excess of
profits and recoveries over losses
and chargeoffs.
History teaches
that this happy state will not" con¬
tinue indefinitely, v.*
Os-
nately experienced
banking
specify
and is now being used by an in-r "net after regular amortization"
Today, we can reasonably esti¬
creasing number of banks iiiii v > under Item 1-a in the official form mate a bank's net current operat¬
published reports to stockholders?,Idistr-ibutechto the reporting banks. ing earnings for- the current cal¬
Let us illustrate how a diffeir- ^ A^parafHel-to -the * foregoing :• is endar year, but who would dare
Volume
165
THE COMMERCIAL. & FINANCIAL CHRONICLE
Number 4588
-
stockholders Canadian funds on the unofficial Why Does the Canadian Government Not Eliminate the "Dis¬
afford delay in market for this purpose. > ;
Other' Americans intending to
count on the Canadian Dollar
clarifying the issues.- Bank audi-*
in the Unofficial Market?
tors and comptrollers have a .lead¬ travel in Canada occasionally buy.
Canadian funds in the unofficial
ing part in the task ahead. There
It would be possible to main¬
forecast the net of losses,' charge-
can
find included under
we
Recover¬
Profits, Item 4, provision
ies and
for*« such- internally carried re¬
serves as are released to capital
Such transactions are
accounts.
neither
earnings
income,
nor
They represent a trans¬
profits.;
reallocation
or
is
There
no
of
is
an
due to market..,-
urgency—an urgency
the fact that
informed public is
an
.,
.
tain
,
Are Canadian
Why
Dollars Fre¬
vital, if banks are to successfully
meet the conditions and problems
quently
of the day.
What
'
-
^
these conditions and
are
the
in
the
Un¬
Discount
a
banks
in¬
continue
creased. capital accounts by
leases
from internally held
re¬
of retirements
re¬
and
where
Specifically, in 1945 three
serves.
banks
member
—
Bankers
Trust
Company, The National City Bank
and National Bank of Detroit-
transfer¬
had similar transactions,
total of $26 million to capi¬
tal accounts.
The reported excess
ring
of
a
and recoveries over
and chargeoffs for all Fed¬
profits
losses
banks,
member
Reserve
eral
in
Of
this amount 11% was due to the
reserves
released by these three
banks.
There were other banks
1945
was
similar
with
the
about $225 million.
public
capital
items.
was
called figure
How would
know how much
ever
included
in the
so-
of net profit?
to
Third, it
newals.
business
do
debt
of bank-held
rates
interest
lower
because
down
come
The rate quoted for the Cana¬
dian dollar in the unofficial mar¬
supply
upon,
and
re¬
on
costs more to
operating
current
—
and will stay up.
unprecedented competi¬
expenses are up
Fourth,
lenders
non-bank
individual
among
and
between .banks
exists
tion
well
as
as
for
all
banks
available loans.
which
conditions
The
have inherited reflect the
banks
magni¬
financial; economic,
social and political consequences
of
the
war.
How
successfully
the
of
tude
banks
depend
soon
these
on
the
conditions will
how
meet
well
public
how
and
understands the
banking problems of the day.
the official
demand condi¬
mainly
(Continued from page 20)
goods to Canada, can send the
payment to a Canadian
of
dents
can
dollars out
States
record of
nadian
bank with instructions to convert
of
at
United
official Ca¬
the official
rate.
reserves
demand
investment
capital
for
converted
be
into
through official
official
So
as,
for
view
funds
the
of
entering the
Canadian
dollars
in
entirely
.
nonresidents, such
a
drain
of U. S. dollars is regarded as
unnecessary
for
one
an
Canada
to
undergo.
(Continued from page 9)
S.
channels
funds
at
the
Canadian
States,
of
all
and
bankers of the United States must
us
become
Mexican
successful
American
interest
investor's
in
of
obtain at home.
many
,
in
-
Mexico
American
to
are
discount which has little rela¬
to
even
York
the
rate
quoted
in
for
cheques,
bank
drafts, etc. To a small extent there
is some justification for this since
no
local demand for the
it has eventually to be
shipped to a bank in a large cen¬
currency
ter in the
United States
in Ca¬
or
nada with consequent expense for
in
investments more
profitable than that which he can
Investments
the mining
American
^,
internacional
Credito
of
City, will clear up a great
questions that may enter
'
In order that
we may get down .
specific cases and not gen¬
eralize too much, I would like to G*
take the liberty of suggesting for
to
the
consideration
of
Mexican
the
Government, the Mexican Bank-'
ing Groups and this meeting, an
11-point program which I believe
would
do much toward clearing
the mystery surrounding in-*
vestments in Mexico by the gen¬
up
Luis
San
can
An Eleven-Point Program
companies, such as the
& Refining
which
has
huge
at
smelters
turn
minds.
our
businessmen.
Smelting
Company,
the
Mexico
not
are
on
the subject, so that
educate their
clients. There are many things to
be considered, and we know that
the succeeding addresses by Sec¬
retary of the Treasury Beteta and
Mr. Juan Monasterio, President
obtaining
banknotes
educated
thoroughly
all phases of
they
concerned, it has
For years many individual Ameri¬
unfortunately always been the
can
citizens residing in Mexico
case
that merchants, hotel-keep¬
tiave successfully conducted their
ers, and even many banks in the
business here. Also, many large
United States have been reluctant
American corporations are today
to handle them and if they are
doing
business
successfully
in
ready to accept them at all, charge
Mexico. Foremost among these are
a
in
Prospects of American Investment
Banking in Mexico
new
coin
and
U.
rate.
far
if there is
be converted into
The
vestment in Canada which cannot
New
dollars in payment for a shipment
rate.
in Canada
tion
Explains Unofficial Market in Canadian Dollars
were
know that
enterprises
by non-residents. If at have been
immensely profitable—
any time the supply exceeds the
earning not less than 20% per
demand in this market, a discount
annum, after all Mexican taxes.
will naturally arise. This discount
The problem is how to bring to¬
really represents an inducement
gether Mexico's interest in de¬
offered
by one non-resident to
veloping her industries and the
another to take over a capital in¬
is
the
Canada's U. S.
on
liquidations of Canadian capi¬
tal by
This would
offered for sale there.
that
39
-
in the United States depends
ket
at
of
prepared to buy at that rate any
Canadian dollars which might be
public,
' instances
Government
drain
the United States consist
Canadian
for
rate
Canadian
the
tions in a narrow and highly spe¬
unfamiliar as it is compromising political; fact that cialized market". The
supply con¬
"with the inner, workings of banks, the public be able to finance at a
sists of capital items in the hands
distinguish between capitai ana low and stable fate of interest. of non-residents which
they are
Second, is the fact that hank in¬ unable
earnings?
u'
to convert into U. S. funds
For example, there are numer¬ come from Treasury securities will
ous
fixed
a
a
resources,
market
dollars in the United States only if
Below the Official Rate?
-.
,
Quoted
official Market at
our
the
fact
.
capital.
for in¬
justification
dollar
longer
no'
problems? Here are a few.. First;
overriding financial fact In
time is the public debt^ia^d
cluding such items in earnings or
In net profits, Item 6. H6\V can because of its magnitude; the un¬
fer
involve
their
and
""•.Banks
offs, profits and recoveries?
Again referring to the official
report of earnings and dividends,
(2231)
Potosi,
Chihuahua and other places. The
eral
Corporation has estab¬
plants in Mexico. The large
rubber companies, such as Good¬
year, Goodrich and Firestone have
likewise established plants here.
lished
American
and
Celanese
would
investing
create
the
public,
necessary
interest on the part of American
investment bankers and investors:
(1) Establish a Joint Committee
charges, insurance and so
composed of Mexican and Ameri¬
be kept in mind Also, new companies in other lines can investment
bankers, including
are gradually coming in, such as
and funds are provided out of of¬ bank balances held by non-resi¬ that no Canadian should be under
officials of the Mexican Govern¬
ficial Canadian reserves of United dents in Canada at the time when the necessity of accepting
this Sears, Roebuck, which opened a ment, to make a thorough study of
large store in Mexico City in
States dollars at the official rate. foreign exchange control was in¬ discount as United States funds
the problem of American individ¬
In addition to all such current troduced in September, 1939. At for reasonable travel expenditures February.
ual
and
institutional
investors
the present time these bank bal¬ can be obtained at the official rate
account payments, certain capital
Activities Still Limited
making investments in Mexico.
These
effected
payments
residents
dents
in
are
readily
may also be
of Canada to
United
official rates.
basic
A
into United States dollars.
conversions
supply
of
"inconvert¬
ible" Canadian dollars consists of
cannot
be
converted
into
made by
ances
non-resi¬
U. S. funds out of official reserves
States dollars at
For example, United
in
Canada, but tbey can be trans¬
ferred
freely
between
one
non¬
provided from
official Canadian reserves to pay
resident and another in the unof¬
maturing debts, including bond
issues,
which
are
payable
in
United States funds. The present
of
policy also permits such payments
to be made before they are legally
prevent the transfer of
dollar balances from
through the calling' of such
obligations in advance of matur¬
ity.
resident to
States
dollars
are
off
diie
What General
Regulations Cover
resi¬
dents of Canada are required to
collect foreign exchange for ex¬
ports
Canadian
avoid
It has been the aim
exchange policy
anything
which
accounts"
"blocked
Other
to
in the nature of
one
non¬
another.
supplies of Canadian dol¬
lars find their way to
cial
would
Canadian
market
through
the unoffi¬
capital
new
otherwise account for them to the
transactions permitted in
vertible" Canadian dollars.
Canadian securities for cash
in
Canada.
Is
the
However, American investment This Committee should make its
banking firms have not yet under¬ recommendations as specific as
taken activities on an organized possible. /'■ ;■;
Unofficial
Market
Really a
scale. To date only three Ameri¬
(2) Translate into English all
Subsidy on Canadian Exports?
can
investment
banking
firms Mexican Laws, including labor
The idea that Canadian dollars
have spent a great deal of time laws,
affecting credits and invest¬
acquired in the unofficial market
learning about Mexico. These are ments in Mexico, and make proper
at a discount by Americans could
Glole, Forgan & Company, the comparisons and interpretations
be used by them to pay for ex¬
present fiscal agent for the Na~ of these laws.
ports from Canada, thus consti¬
cional
Financiera
of
Mexico.
(3) Have the government give
tuting in effect a subsidy on these
Kuhn,
Loeb
&
Company
and proper guarantees regarding the
exports, is incorrect.
Canadian
Shields & Company. Other under¬ protection of foreign investments
exporters must always obtain pay¬
writers have shown little or no in Mexico, under existing laws.
ment in U. S. funds which they
interest. Why it this?
(4) Maintain all present Mexi¬
are obliged
to sell to a bank in
First
of
all,
the
individual can obligations —- government,
Canada at the official rate. Thus
American
investor
has
never
railroad, etc., on a current basis.
the discount quoted on the unof¬
shown a great interest in foreign
(5) Make necessary arrangeficial market is
unavailable to
Discount
Quoted
the
on
v
since
registered their pur¬
Foreign Exchange Control Board,
chases with the Foreign Exchange
except for occasional exports in¬
Control Board at the time of pur¬
volving not more than $100 in
chase.
Under the rules in force,
Canadian funds.
Residents are
these Americans have been au¬
also required to follow a similar
thorized to sell those securities in
procedure in obtaining payment
Canada and to transfer the Cana¬
for services rendered to residents
dian dollar funds obtained in this
of the United States, except in
way to other Americans.
Simi¬
•the case of professional services
larly, Americans have been au¬
and services performed in Canada
thorized to sell real estate and
for tourists.
In the latter case, a
receive the proceeds in "incon¬
requirement
to
collect United vertible" Canadian dollars. Fi¬
1* States funds would be quite im¬ nally, proceeds from maturing se¬
possible to enforce. Residents re¬ curities
payable solely in Cana¬
ceiving United States dollars from
dian dollars are transferred to
investments in the United States,
r-n
non-residents
in "inconvertible"
ei,ther as income or through the funds.
rt
sale of securities, etc., must also
m
It
is through these types of
account for the foreign exchange
transaction
that
the
unofficial
to the Foreign Exchange Control
market obtains its supply of Ca¬
a
Boardnadian funds.
J"
Canadians are not, of course,
Who Buys Canadian Funds Through
permitted to convert United States
the Unofficial Market?
dollars received from any source
The demand for Canadian funds
|/4' into Canadian dollars through the
1940
-.
•
unofficial exchange market.
Where Does the Unofficial Market
Obtain Its Supply of Canadian
Dollars?
Gold
dian
Exports
Funds
in
Cana¬
Unofficial
Into
the
in Canada.
t
-
investments.
sells
the
the
he
Canadian
at
home
.
to
ments for dollar
exchange to pay
interest, principal and dividend
payments on investments held by
in
Second, when
the foreign
American investors.
into
venture
(6) Under the leadership of |the
Joint Committee, invite groups
of American investment and com¬
However, because Mexico is our
next
it converts the
Cana¬
dollars
through the unoffi¬
obtaining a pre¬
mium which is not passed on to
the gold producers.
This is not
The U.
S.
door neighbor,
mercial bankers and industrialists
the average
to visit Mexico.
American investment banker and
(7)
Have
Secretary
of
the
or other equally«
his client would not be disposed
to fear investments in Mexico, ii
Treasury Beteta,
they had more general knowledge
of the country. This knowledge
falls into the following classifica¬
in the United States before bank¬
tions:
tion, the American Bankers Asso¬
cial market, thus
case.
funds
States.
have
ample invest¬
field in South America in the late
Government
U. S. funds it receives into
the
his
United
did
didn't
were
1920s, he had severe losses.
gold abroad
dian
for
ments
It has sometimes been said that
when
He
because there
Market?
dollars real¬
Knowledge
qualified persons, make addresses
ing and business groups, such
the
Investment Bankers
as
Associa¬
ciation and the Manufacturers As¬
ized from sales of gold abroad by
the Canadian Government or the
Laws affecting
Bank
ments in Mexico.
investments
de¬
(2) The subject of Foreign Ex¬
change.
•
(3) Knowledge of those customs
and habits of thought of the popu¬
these
from
lation which would affect invest¬
Mexico for Mexican securities.
of
Canada
are
(1)
converted
into Canadian dollars at the offi¬
cial
rate
through
The
of
the
exchange and not
unofficial market.
Canadian
rives
no
the discount
in
the
U.
Government
financial
on
benefit
Canadian
unofficial
ments.
S.
market.
If
the
any
converted
into
Canadian
dollar^
of
Mexican
credits and invest¬
sociation,
.
.
dollars
dollar proceeds of gold or
other export were converted
into Canadian dollars through the
unofficial market, they would be
in reality paid over to a non-resi¬
through
the
unofficial market
dent
wishing to withdraw his
arises mainly from the use which
capital from Canada. But because
can be made of Canadian dollars
these U. S. dollar proceeds are
so obtained for capital investment
preceding description,
For example, Americans who
it is clear that Canadian dollars
which find their way into the un¬ wish to buy Canadian securities,
purchase real estate in
official market consist entirely of or to
capital items, since all current ac- Canada, or to make loans or in¬
vestments
in Canada, cap buy
count payments due to non-resiFrom the
of
and
&
> t
should
It
on.
"incon¬
These
consist, for the most part, of sales
foreign purchasers of Canadian
by Americans of various kinds of
capital assets in Canada. For ex¬ goods.
and to sell these foreign
ample, some Americans bought Does Canada Convert the Proceeds
to a bank in Canada or
Incoming Foreign Exchange?
With reference to receipts,
funds
ficial market.
express
;;•"
;
The Government's attitude
toward foreign investors.
(4)
„
A
American commercial
have
successfully
made
few
banks
commercial
to
trouble
with
loans in Mexico be¬
these banks have taken the
cause
all
of
acquaint
the
themselves
factors
affecting
successful lending in Mexico.
The
banker
American
must
do
the
investment
If
business, credits and
in Mexico,
and on
trips to bring along other
important members of the Gov¬
ernment and Mexican industry.
(8)
Broaden
the
market in
on
(9) Develop a joint working ar¬
rangement between Mexican and
,
American investment bankers for
the
financing-of ..Mexican
'* ^
(10) Acquaint the United States
Securities & Exchange Commis¬
joint
industrial projects.
sion
and
the
New
York
Stock
Mexican invest¬
ments and the subjects pertaining
Exchange
with
thereto.
;
"■
Appoint
a
competent M
Canada, they
profitable investment banking op¬ United States publicity agent to
enter Canada's official reserves
portunities are available here with accuratelypublicize business
and are available to finance imJ no more than known propqrtion- events and opportunities iq Mexports and other payments abroad. 1 «te
Jlisk," men tne
investment ico.
? u
i 1 i'V
at the official rate in
same...
.
(11)
.
Thursday, April 24, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2232)
40
The ITO Charter takes
Trade Practices Under
'
"
♦.
•
'
;
■i
•
.'
'
.
j
The ITO Charier
(Continued from page 7)
•
rest of the
Fund
world. Moreover, each
•
program, namely
Fund Agreement
Char¬
practices of the American
What the Fund and the
ITO represent therefore is not a
return to the 19th century nor
even an attempt to turn the clock
back to the 1920's.
Rather than
seeking to remake the world, these
Agreements are postulated on the
economic and political systems of
the United Nations as they exist
today and are likely to exist for
some
time in the future.
Their
fundamental purpose is two-fold.
First, they provide a set of stand¬
ards for their members which will
achieve the greatest possible ben¬
efits from trade in a world of
widely differing economic and po¬
litical systems. These rules gov¬
erning fair dealings are not rigid,
but are sufficiently flexible to
allow for changes in the structure
of the international economy and
for meeting new problems as they
arise. Second, the Fund and ITO
provide a mechanism for consulta¬
tion on common problems of fi¬
nancial
and commercial policy.
general rules which
followed
by numerous and
tion to the amounts supplied
riod. This method of
before
to
certain
Draft
Trade
turns."
1946.
,
.
.
as
Charter
for the
the
of
State,
This
draft is
drafted at
based
on
important exceptions
on
titative restrictions
an
those re¬
are
quan¬
as
de¬
Charter, to the need of Members
to take action within the provi¬
sions of the Charter to safeguard
ary
reserves
or,
in the event that their
low, to achieve
reserves are very
pressure in the event of a
serious or abrupt decline in the
effective
of
demand
other
coun¬
tries."5
is contained in the
reasonable rate of increase.
In
are
on
ment which
permitted to
re¬
the London Conference. Article 13
strictions
employ import
which
would
have
an
effect equivalent to exchange con¬
trols
of
permitted
the
by
Interna¬
tional Monetary Fund. Since the
Fund Agreement gives its mem¬
bers
a
more
mission
to
strictions
or
less blanket per¬
employ exchange
during
on
the
re¬
post-war
transitional period,2. a really se¬
chapter'
Economic
was
also
Develop¬
drafted
of the Charter authorizes
ber, with
the
a
at
mem¬
permission of the
Organization and the concurrence
of any other members with whom
the
member
trade
has
negotiated
a
quantitative
taken
Na-
trade will
restrictions
not
before, about
1951.3
2 See
The
"Articles of Agreement, The In¬
Monetary Fund," Art. XIV.
ITO is required to review all re¬
strictions in force within two
years after
its institution.
The Organization is not
expected to be inaugurated before the
*"
ternational
IS*
3 The
Preparatory Committee took no
specific action.
'
•
4
latter
part
of
1948.
4 For
on
be under¬
Elections at Conference
Board Meeting
attempt is made to outlaw state
Three Councillors and 38 board
trading enterprises either in the
members
were
elected'; or re¬
original American draft or in that
elected at} the -286thmeeting [ of
produced at the London Confer¬
the National: Industrial Confer¬
ence.
Considering the trend to¬
ence Board held on April* 17 at
wards socialization in the world
the Waldorf-Astoria Hotel in New*
today it would indeed be futile to
York.
Sewell L. Avery, CHairmari
do so. It is obviously absurd to
of the board, Montgomery Ward
ask countries to permit free trad¬
& Co., Inc., and General Robert E.
ing by importers and exporters in
Chairman .of the board,.
commodities the domestic produc¬ Wood,
Sears, Roebuck & Co.j were elect¬
tion and distribution of which has
ed Councillors of the Conference
been nationalized. What the Char¬
no
.
seeks
ter
^o
do
is
state
make
trading practices compatible with
the
principles
of
multilateral
trade conducted by private enter¬
prise. The fundamental rule which
Charter is that
state trading enterprises shall be¬
have just like unregimented pri¬
is laid down by the
vate
traders,
buying wherever
at the lowest possible
they
can
Board, and Dr. Nicholas 'Murray*
Butler, President Emeritus, Co¬
lumbia
a
University,
has
been
National
the
since
reelected
Dr.
was
Councillor for five
Butler
years.
of
Councillor
a
Conference
Board
1927.
The New York executives who
were
elected for
a
one-year
term
Willard Chevalier, Vice-Presi¬
dent and Executive Assistant to
are
prices and selling to the highest
President, McGraw-Hill Publish¬
bidders, without regard for polit¬
ical
or
economic considerations ing Co., Inc., and Alexander Fraother than the purely commercial ser, President, Shell Oil Co., Inc,
pertaining to the particular
ones
Mr. Chevalier succeeds J. H. Mc-
Graw, Jr., President of the Mc¬
Graw-Hill Publishing Co., as a
expecting a great deal
members of the Conference Board.
from state enterprises whose buy¬
involved.
transaction
This
is
ad¬
mittedly
ordinated by the same central au¬
thority.
unless
But
this
funda¬
mental rule is observed bilateral¬
ism is inevitable.
It
difficult
if not
impossible
to formulate specific rules which
will
is
assure
the avoidance of trade
discrimination and bilaterialism in
state trading. The success
of this
The New York executives who
were
reelected board members
Frank
W.
Abrams,
are
Chairman of
the board, Standard Oil Co. (New
Jersey); Willis H. Booth, director,,
Commercial Solvents Corp.; F. B„
Davis,
Jr.,
Chairman,
United
States
Rubber
Co.; Arthur O.
Dietz, President, CIT Financial
Corp.; David M. Goodrich, Chair¬
man of the board, The B. F. Good¬
rich Co.; James E. Moul, President*
economics and business. The work
of the board is supported
trading generally involves.7
Tariffs
I
have
said nothing
important
provisions
which
Charter
deal
about the
of the ITO
with tariffs
and tariff bargaining, export
sidies,
customs
procedure
measures
pro¬
designed to fos¬
a
more
complete discussion of the
relations between the ITO and the Fund,
"Quantitative and Exchange Re¬
strictions
Under
the
ITO
Charter,"
see
my
"American Economic Review," June 1947.
5 The most important of these are the
period (Art. XIV) and the dis¬
criminatory restrictions permitted against
a
member
clared
whose
scarce
6 "Draft
currency
has
been
de¬
by the Fund. (Art. XIV.)
Charter," Article 8.
r
and
universities.
E. M. Scott & Co.
other commercial policy matters.
provisions
are
SILVER SPRING;. MD.—E,!
certain to be
or
Scott & Co. will
engage in the in¬
mod if y i ng interferences with
world trade and in standardizing
vestment business from offices at
9400 Thornhill Road.
Officers of
; procedures
and
eliminating sources of discrimina¬
the
extremely
useful in reducing
administrative
tion.
In conclusion,
the general prin¬
trade
practices
and
Treasurer.
duce their impact on
policy should be uncompromising
in its efforts to abolish all of the
governmental
strictions
on
controls and re¬
world trade which
' '•
r
:
\
-
4,
Joins Hallgarten Staff '
restrictions,
but to modify
firm
are
Elmer
M.
Scott*
President; Ruth L. Scott, Secre¬
tary; and Henry E. Worcester, Jr..
ciple followed by the Charter is
not so much to abolish existing
CHICAGO, ILL.—Robert C. An
tonsen has been added to the staf
of
Hallgarten & Co* 231 South Li
Salle Street.
,j
■
•
Gillespie in Brooklyn
BROOKLYN, N. Y.—Edward
Gillespie is engaged in the
seen
ties business from offices at 2C
Dorchester Road.
Americans do not like, and to re¬
make the world in our own image.
exchange controls permitted to members
of the Fund during the post-war transi¬
tional
by near¬
ly 3,000 business concerns, trade
associations, labor unions, govern¬
ment bureaus,
libraries, colleges
sub¬
and
them so as to re¬
world trade
and to bring them under interna¬
ter industrialization, which may
tional supervision." This has been
otherwise be inconsistent with the
a disappointment to many who be¬
lieve that our foreign economic
provisions of the Charter,.
agreement, to employ
tective
rious effort to supervise exchange
current
Organization.
Turning finally to the provisions
of the Charter on state trading,
These
The second departure from the
general rule
addition, members of the ITO
a
agreements for the fixing economic and political systems of
prices, the setting of produc¬ the countries employing them. As
tion and marketing quotas, the regards world trade in the im¬
suppressing of technology or in¬ mediate future and possibly for
vention and other restrictive ar¬ many years to come, to control or
rangements which may be judged not to control Is not the question.
harmful to trade. This is all to the Rather the question is, how: to
good.
The
Charter, however, control and for what purposes. The
makes provision for the negotia¬ program of the Fund and the ITO
tion of inter-governmental com¬ Charter-is basically one, of sub¬
modity agreements dealing with jecting; the. use: of exchange: and
prices, production and marketing trade; controls C' to - international
of primary commodities under the supervision.
%
-f
supervision of a Commodity Com¬
mission to be established by the
of
major
their economies against deflation¬
strictions in order to prevent a
serious decrease in their monetary
existing foreign trade prac¬
policies are in consider¬
able measure a reflection of the
aspect of the ITO program will
depend in large part upon the good
trading countries would give ade¬
The Turbo-Mixer Corp.; Philip D.
faith of the state trading countries
quate guarantees that they would
in living up to the spirit as well Reed, Chairman of the board, Gen¬
maintain domestic full employ¬
as to the letter of the rules.
This eral Electric Co.; H. S. Richard¬
ment, or agree that their imports
part of the program will also be son, Chairman Executive Comwould not fall below a certain
greatly handicapped if Russia does nittee, Vick Chemical Co.; Murray*
minimum. Such a provision was
not become a member of the ITO Shields, Vice-President, Bank of
obviously not acceptable to the
the Manhattan Co.; E. T.
and
Stannard*
cooperate
whole-heartedly
United States, whose Congress has
Kennecott
with its objectives. As a minimum President,
Copper
not yet been willing to recognize
Corp.; David L. Tilly, President*
the Organization will provide a
full employment as an obligation
New York Dock Co.
mechanism
for
consultation
on
of the government to its own peo¬
The Conference Board, founded
state
trading practices, thereby
ple. As it now stands the draft
reducing both the danger of eco¬ in 1916, is an independent and
Charter provides that "the Or¬
nomic warfare and the harm to nonprofit institution for research)
ganization shall have regard, in
multilateral
trade
which
state and education in the fields of
the
balance of payments. Members of
the ITO may employ import re¬
the
Charter
lating to the safeguarding of the
the articles
October
the
the exercise of its functions
December
I.r»—»-n r"*"
Preparatory
Committee,
November 26,
origin?' >A-ner«ran
"
which
United
Since this
in
whereby
fined in the other Articles of the
The most
International
of
.consumers
at prices below
or
to the fundamental rule
submitted to
Department
domestic
charge
include
to
agreement
the U. S. agricultural program.
Trade and Em¬
Organization
The
noting.
it is clear that its purpose is to
make the Charter consistent with
and
nary
of
provision was contained in the
original United States proposals,
1 All references to the ITO Charter in
this article will be made to the "Prelimi¬
.
similar domestic products
of
current market levels.
International Trade and Employ¬
j
and
last
ment some time next fall.L
-
agricultural
on
(2) 'to
free
These pro-
the United Nations Conference
-
surplus
remove a temporary sur¬
plus of a similar domestic product
by making the surplus available
is
it is
of
products necessary to en¬
governmental measures de¬
signed (1) to restrict the produc¬
likely to be substantially
altered
liquidation
Also permitted are import
force
ployment Conference now being
in Geneva, but the Charter
not
are
at the London Conference last fall
restrictions
held
is
worth
trade restric-t.
that countries
may suffer as a result of unem¬
ployment and depression in other
countries. An attempt was made
fisheries
London
International
on
Charter recognizes
stocks.
Controls
Provisional Committee
of the
the
fundamental rule
tions
orderly
Conference.
subject to
further polishing at the meeting
-.1.
departures from the
But
tices and
mercial
ing and selling activities are co¬
Guaranties of Full Employment
Two other
exceptions
not likely to
tions.
,
of
group
are
modities in short supply, and the
resentatives of the 18 nations atCharter
first
the results
duplicate those which we might
expect in the absence of restric¬
tion at home and abroad of com¬
regarding
the
;
v
may
imposed during the post¬
war transitional period in connec¬
tion with the equitable distribu¬
:
draft
ITO.
to
some
degree
eliminate discrimination in trade,
under
see
dur¬
previous representative pe¬
apportioning
a
has to do with restrictions which
*
The
expect fo
may
may be
of 1945, preliminary
the signing of the Anglo-Amer¬
tending
we
The
posals, to which the British Gov»s
ernment has agreed in principle,
v were
submitted to the Preparar
tory Committee of the Interna¬
tional (Trade
and Employment
Conference, held in London last
.*■;> October. Agreement was reached
a majority of the articles of
f
; the proposed Charter by the rep:
ing
but
the
i
<
exports
imports
tem
developed out of our
discussions with the British during
-
or
among
long list of exceptions and coun¬
ter-exceptions. However, a sum¬
mary of a few of the principal
ones
may serve to
indicate the
kind of international trading sys¬
the latter part
-
imports
apportioning
imports
sources of supply in propor¬
of
trading with other members. 1
will not attempt to catalogue the
tion
ican Financial Accord.
prin¬
ciple
be imposed on
ITO Charter
to
impractical,
frequently
is
in
further gen¬
the pro¬
posed ITO Charter, I want to dis¬
cuss
in
broad
outline
those
provisions which have to do with
exchange restrictions and quantitative trade controls.
The orig¬
inal United States proposals for an
r
origin
ter, no restrictions other than
duties, taxes or other charges may
Before making any
■
Recognizing that the estab¬
of a global quota with
as to the country of
tas.
lishment
nb restrictions
the Charter falls back on the
or
eralizations
are
of
the administration of import quo¬
complicated exceptions. The fun¬
rule is that, except as
otherwise provided in the Char¬
economic warfare.
Exchange and Trade
some
regulations for applying
damental
negotiation and debate for
tional
stated
trade
are
interna¬
They seek to substitute
restrictions
tive
in
economy.
outlines
Charter
ITO
specific
the rule of non-discrimination in
provisions of the ITO Char¬
regarding the use of quantita¬
terms
by
ceptions to the fundamental rule,
The
ter
permitted
controls
exchange
the Fund.5 In addition to the ex¬
Restrictions
cies and
;
consistent with the discriminatory
a common mem¬
Exceptions to Quantitative Trade
ter, has revealed a further modifi¬
cation of the rules which t>est
characterize the traditional poli¬
a
effectively
can
common purpose
the
Monetary
and the Inter¬
the
national Trade Organization
the ITO
or
accomplish their
unless they have
bership.
successive draft of the two basic
instruments for the implementation of our international trade
-
ITO Charter
cannot be dis¬ Organization is requested to con¬
cussed without constant reference sult with the Fund on all matters
ica's program of international co¬
to its counterpart in the field of involving the balance of payments
operation for realizing our trade
of its members.*
foreign exchange practices, the
objectives are the International
The
second
general rule' on
International Montary Fmid
Monetary Fund and the Interna¬
Agreement. Whatever trade re¬ quantitative trade restrictions is
tional Bank, the Anglo-American
strictions a country might be pro¬ that whenever trade restrictions
Loan Agreement, and the proposed
hibited from imposing by means are applied in accordance with
International Trade Organization.
of exchange controls can readily the other provisions of the Char¬
The International Bank and the
be accomplished through the use ter, such restrictions must be non¬
British Loan Agreement are esof an import quota or some other discriminatory in their effect on
sential to the implementation of
type of quantitative restriction. other members. But there are also
the fundamental agreements on
In many countries the exchange numerous and complicated excep¬
foreign trade and exchange prac¬
control system is combined with a tions to the fundamental rule on
tices contained in the Monetary
These
ex¬
system of import licensing so that non-discrinmination.
Fund
Agreement and the ITO
the two types of restrictions are ceptions include (1) restrictions
Charter.
In the development of
indistinguishable in practice.
It essential to the equitable distribu¬
our international program it was
is significant therefore that the tion among consuming countries
recognized
that
the particular
ITO - Charter
provides for the of commodities in short supply;
rules most congenial to the special closest
cooperation between -the (2) export and import quotas im¬
interests and policies of the United
ITO and the Fund. Although the posed
under inter-governmental
States were unrealistic in the light
matter of joint membership has commodity agreements established
of the present international econot been finally determined, it is under the supervision of the Or¬
nomic environment, and would be
difficult to see how either the ganization;
and (3) restrictions
completely unacceptable to the
*.1
stand
a
against international cartels by
outlawing all international com¬
it is possible to
have an efficient multilateral trading sys¬
tem in a world of state trading monopo¬
lies. In practice trade in such a world is
7
Ideally,
of
course,
L.
J§. Myers in Syracuse
SYRACUSE,
Myers
will
N.
Y.—Leon
conduct
a
securiti
business from offices at 116
mour
Street.
"
- - -
Se
*
-
:n-
.Volume 165
Number 4588
;
THE COMMERCIAL & FINANCIAL CHRONICLE
?2.33Y4~-;41
1947
March,
amounted
342,000.
I
(Continued
s:
from
The Export-Import Bank Act of
6)
page
eign countries during periods of
temporary deficits in balances of
payments. With the advent of war
Europe, loans for development
purposes in Latin America became
a major
type of operation for the
in
Export*Import Bank, while the
dollar-exchange loan fas a fore¬
1945
ment of foreign debts to
Other American creditors,
the policy of the
expressed
Congress that the loans of the
Bank should, in the judgment of
the board of directors, offer ; rea¬
sonable assurance of repayment.
In accordance with the broad con¬
For
Bank's
also
reasons
operations
rected
have
the
di¬
been
goods. One
is the very great
importance to the United States of
extended
other capital equipment. These are
period
first and basic criterion in making
among
of the reconstruction loans
runner
by the Bank during the
following the end1 of the
war. These two types of credits,
together with the direct exporterimporter credits, constitute the
f
three
general
categories
iiancing by the Bank.
of
fi-
its emergency reconstruction loans
and has judged reasonable assur¬
tion that
the
assump¬
place.
reconstruction
American
Latin
to
countries
through the
Export-Import Bank were given
special impetus in 1940 by the
action of Congress in increasing
the lending authority of the Bank
enable
to
it "to assist in
velopment
of
de¬
resources,
the
the
the
credits
These
ground
that
any
other
course
would have been,
contrary .to the
intent of Congress and to the broad
As you can imagine, the applica¬
of this policy has been no
the
for
the
of
board
are
stabilization of the economies, and
the orderly marketing of the prod-
ucts of the countries of the West¬
ern Hemisphere."
During the next
been
ordinated
through the National
Advisory Council with the foreign
facilities.
few years the Bank arranged : a
series of credits to Latin American
V
Bank.
loan
consumer
countries*to assist them in carry-
ihg, out development programs and
to
purchase^ the
.goods
2
such
4
'•
the
United
States
services
and
required for
During the war,
programs.
Bank
carried
,
earlier
its
out
•commitments, in so far as the
.-availability of goods and ships
permitted, and also played a role
'
in financing the production and
import into the United States of
strategic and critical materials re-quired for the prosecution of the
{
'
*
*
In
Bank's
all
reconstruction
fully
The
board
of
decision
power
loans
of
has
and
its responsibility to
as
serve
strictly the policies of the
Congress laid down in the ExportImport Bank Act of 1945. In this
endeavor, we have had the full
support of the National Advisory
Council.
Future Policies
Bank
port
called
Bank
again to its traditional types
operations deemed important
criteria which will guide the Bank
in
was
of
.revival of
upon
their economies
this -way
in
a
to make
and
possible',
trade with them
our
a
on
normal peace-time basis.
In car¬
rying out" this role, under the
terms of the Export-Import Bank
Act of 1945, the Bank has author-
;•?
ized reconstruction credits
:■
than $2 billion.
more
totaling
Full details
regarding these credits
^
J
to; be
are
found in the three semiannual ! eports of the Bank, to the Congress,
which, you have had copies, so
V
that \I, will; not rburden
V
the
1
should
like
to
future
its
which have
point out,
recon¬
struction
come
that
Bank
most direct manner to
trade, and shall be
in
the placing of orders
thousands of suppliers
throughout the country.
?
many
It was clearly intended that the
Export-Import Bank should play
a
major
role
in
reconstruction
*•
time
as
only
?
11
and
for
open
Development
business.
'
..
i
The
Export-Import Bank continued its
activities in this field over a longer period of time than was envis-
terms ap¬
on
*
Not
Finance
Exports
-Own; Sake-;
for
-•
I cannot
emphasize too strongly
Export-Import Bank has
the
undertaken
never
the
finance
to
ex¬
sake. The Bank
believe that the position
does not
of
own
United
States
in
interna¬
trade
justifies the use of
public funds merely for the pur¬
pose
of providing a temporary
export of
the United
these
authorizations
its
undisbursed
of
that
The
date
authorizations
national Bank, the
Bank decided that
to
end, its
an
agency
Export-Import
it must bring
program
emer-
reconstruction credits and
especially
credits'
which have
access
of
of
the
countries
to
to the facilities
International
Bank.
The
Export-Import Bank continues to
consider, however, in accordance
with
its
thority,
general
credits
with countries
struction
as
powers
to
and
finance
of these
sum
two figures,
or
$2,700,000,000, represents the ex¬
tent to which the statutory lending
authority of $3,500,000,000 is pres¬
Thus the Bank
ently committed.
has
why the Export-Import Bank has
primarily interested
ity at present of approximately
$800,000,000. Of this amount, how¬
in
$500,000,000 is now ear¬
marked.for possible future credits
to China, thus leaving $300,000,000
available at present for all other
purposes.
The Export-Import
always been
what
it
long-run
finances
effects
in
and
of
what
the
fi¬
it
It explains why the Rank
nances.
likely to finance
the
export of raw materials, such as
cotton, and of capital goods, than
of finished consumer goods.
more
The
Bank's
fundamental
attitude
in
basis
this
of
the
as
countries.
have served
export
of
other
'
'ifZ -VV * J?
_
2
is
chiefly to promote the
which serve to
productive capacity of
goods
increase the
foreign countries and their ca¬
pacity to export those products
which
are
desired
in
States and elsewhere.
recon¬
with
regard
foreign trade at the
present time is to maintain a high
volume of imports in order to
provide foreigners with the means
of buying United States products
in large quantities and at the same
time
repay
their debts to this
country.' The Bank has directed
its operations over the past 13
years towards the solution of this
fundamental problem. Its credits
the Bank
undergoing
well
au¬
trade
growing
produc's
same
we
are
limited in
fact that
September
(28)—as
Long Island
the neigh¬
boring states of New Jersey and
communities
and
Westchester
in
and
Connecticut.
ing
cities
•
,
"In New York
will
State, the follow¬
have
period of observance
the
as
same
New York
City;j (Newburgh runs from May
tj Sept. 28): Albany, Amsterdanf Auburn, Batavia, Beacon,
27
our
borrowers subsequent to June 30,
1948.
time to time
the
as
required to effect
manufacture
export of
products or the execution of the
project
to
be
financed." Heavy
machinery and capital equipment,
which
figures
largely in the
BankV operations, are often manu¬
factured to special specifications
and
require
dletown,. Mount Vernon, New Ro-
chelle, New York, Niagara Falls,
North Tonawanda,
01ean, Oneida,
Oneonta, f- Oswego ," Peekskill,
Pittsburgh, Port Jervis, Poughkeepsie,
Rensselaer, 1 Rochester,
Rome, Saratoga Springs, Schenec¬
tady, Syracuse, Tonawanda, Troy,
Utica, Watertown, Watervliet and
Yonkers. /
and
so
months
from
more
or
a
year
for
r
;
"During the past
found,
ered
states
some
or
it
year,
have
was
consid¬
passed laws providing for
the advanced
in
pending
time; bills are
the California"
now
and
Minnesota State Legislatures. Leg¬
islation approved in Maryland au¬
thorizes the counties of Arundel,
Baltimore, Mont gome r y and
Prince George to push the clock
ahead.
In Rhode Island, where
general observance has: been the
rule for several years, daylight
saying was made official by an
act approved April 24, 1946.
Reincorporation Approved
•<
"In
By Senate
East
some
states, notably in the
West, the ques¬
Middle
and
tion is left to the individual com¬
uncommitted
the
helps to create
market
of all
for
kinds
time to facilitate
United
In this way
a
steadily
American
and
at
the
Virginia, Wisconsin
as
$1,200,000,000.
was
lending author¬
ing.
Daylight Saving in
New York April 26
Bank is not at this time asking an
increase
in
its
statutory
lending
outhority.
It
is
clear
from
the
it is intended
to
operate
on
business-like basis and, if pos¬
sible, without overall cost to the
taxpayers. This recognized objec¬
a
tive
is
achieve
pected
not
the
more
because the
to
difficult
Bank
make loans
attractive
to
is
ex¬
which
are
to
private capital,
is, loans which presumably
carry a relatively high degree of
that
'
•
•
"In Canada,
and Wyom-*-
•,
the Legislature of
the Province of British
Columbia
approved province-wide day¬
light saving from April 27 to
Oct. 26."
* -. -.•
•
1 ■ 1 \ '
has
In a notice on April 21 regard¬
ing daylight saving time, Allan
Sproul, President of the Federal
,
Reserve Bank of New York stated
Gersten Heads Comm.
that:
ever,
that
operation.
With the
opening for business of the Inter-
out of 'the
in
will
•
legislative
history of the Export-Import Bank
active
the
upon
of
capital goods. The urgency for
the passage of the proposed legis¬
lation arises
Sunday
mentioned
exports
cus¬
tomary selection of dates—the last
Sunday in April (27) to the last
WASHINGTON,
April
2 3 —
There are still: a num¬
(Special to the "Chronicle")—Re¬ munities.
approximately
$1,900,000,000, of incorporation of the charter of ber of states, however, l which will
which about $400,000,000 has al¬ the
Export-Import Bank has been continue with standard, time, many,
ready matured and has been re¬ approved by .the
Such states,
Senate, but still of them by law.
paid. The authorizations of the awaits House action. Hearings are which either have adopted stand¬
Bank which were still unutilized
ard time legally or from which no
yet
to
be
scheduled
by
the
by borrowers as of March 31,1947, House
Banking
and
Currency municipalities have yet reported,
that is, which have not yet taken
are:
Alabama, Arizona, Arkansas,'
Committee.
the form of actual loans, amounted
California,;
Colorado,
Florida,
The life of the Bank is at
pres¬
to $1,200,000,000.
ent
scheduled to end June 30, Georgia, Idaho, Kansas, Kentucky,
If the Committee will bear with 1948. This
Louisiana, Minnesota, Mississippi,
means, unless renewed
Montana, Nebraska, Nevada, Newme, I should- like to cite a few
by the Congress;' that the Bank
more figures relating to the Bank's
Mexico, North VCarolina,> North
cannot
enter
commitments
to
Dakota, Ohio, Oklahoma, Oregon,
operations.: The amount of its out¬ make disbursements
beyond that
South
Carolina,
South Dakota,
standing loans as of March 31 was date.
Texas, Utah, Washington, West
$1,500,000,000 and the amount of:
United States
into
financing
Goods
date, that is, actual loans to bor¬
rowers i over
this
period, were
the fact that the real problem of
one,
I
demands
the
for
to
the unwillingness of private capi-
reasons:
Capital
of
.
Chairman,'
earlier
Bank
Actual disbursements
700,000,000.
against
stimulus to exports. This explains
is
Mr.
York
New
will follow its
<
case.
Dees
that
the
in
goods from
tal to go into the war-devastated
countries and, two, the long delay
In getting, the International Bank
aged in 1S45 for two
^
such
until
the International Bank for
Reconstruction
should
financing world
foreign
of
propriate to the circumstances in
each
tional
with
which
specific
balanced
a
expansion
long-range
ports for their
resulted
credits
the
shall contribute in the
purposes,
tured products and that they have
t
to be established
It is the policy of
it authorizes shall be for
loaps
were
available
solely for the purchase of United
States agricultural and manufac-
J
those
are
date.
same
Exports
-.
of
October.
year
to 18
completion
and deliver y
o r installation
of those items which will improve
abroad. Accordingly, the present
the economies of our customers
liquidation date of June 30, 1948,
abroad.
being less than 15 months away,
is presently limiting and will soon
Bank's Past Volume of Business
prevent the operations of the Bank
Before concluding, I should like
in one of the fields most important
"Official state-wide observance
to give the Committee an idea of
to the foreign trade of the United
this year is set for Connecticut,
the volume of Export-Import Bank
States.
I again
urge, therefore,
Massachusetts,
New
Hampshire,
operations over the whole period that the bill before
you be given
of its existence. From 1934 through
New Jersey ^nd Rhode Island; in
early and favorable consideration.
March 31, 1947, the Bank author¬
Maine, it will be on an unofficial
ized loans aggregating nearly $3,basis.
'
'' ' •
The
States.
activities
the years.
over
the
United
::
as
tial to extend assistance in the sale
international
the
of
the
of
with
you
however, that the Bank's
v
future
trade
further details about them at this
time.
.
to
struction
-
-
of
to
•extend large loans to war-torn
•countries to assist in the recon-
«?
-
ahead, the Exportwill devote itself
our
States, but rather it is for the pur¬
pose of creating permanent mar¬
kets for all types of United States
products that it is deemed essen¬
re¬
resist pressure for unsound loans
from whatever source and to ob¬
Import
the period
immediately fol¬
lowing hostilities, the Export-Im-
:•
all
over
regarded it
has
Bank
tained, however, its full
In the period
Reconstruction Loans
.
the
output.
It is not that the Bank is
interested
less
States.
policy of the United
total
financing that there is a rec¬
ognized deficiency of private bank
co¬
war.
In
;
successfully
and
their
term
have
loans
of
the items for which
It is with respect to such medium-
however, the
cases,
statement of condition
capacity
has
been
I should explain
that, in order
greatly increased during the war. to control the
utilization of cred¬
On the other hand, foreign pur¬
its which it
authorizes, the Bank
chasers, like domestic purchasers, does not disburse its loans in
lump
are able or prefer as a rule to
pay
sums
at the time credit agree¬
for
capital goods only over a ments are
signed, but provides
period of from three to ten years. that
disbursements be made from
tion
task
the
a
Exportof March 31, 1947
productive
interests of the United States.
easy
the things in the produc¬
proportion
the
on
and
in
ability to Binghamton, Buffalo, Canandaihandle such financing because the gua, Cohoes, Corning, Cortland,
Government Corporation Control Dunkirk, Fulton, Glen Cove, Glens
produced by industries which tra¬ Act
prevents the Bank from enter¬ Falls, Hornell; Ithaca, Jamestown,
ditionally depend on export mar¬
ing into loan contracts which Johnson City, Kingston, Lockport,
kets for the disposition of a high
would
require disbursements to Long Beach, Mechanicville, Mid-
calculated risks with
Development' loans
maintain
tion of which the United States is
The Bank has thus taken
respect to its
Policy Toward Latin-America
and authorizations of the
as
Sunday
City this
pre-eminent throughout the world.
These are the items which are
revival of world trade
a
to
foreign
markets for heavy machinery avid
multilateral basis would take
on a
..-;v
of repayment on
ance
ability
*$52,-
•
statement of the loans
a
Import Bank
reason
ity in world affairs on the basis
of: enlightened
self-interest, the
Bank has accepted need as the
its
this time
to the
financing of capital
distinguished from consumer
as
responsibil¬
cept of accepting our
other
and
it
to
;
offering for the record at
am
"Daylight saving time" will be
effective in the cities of New York
and
Buffalo, New York, during
period from 2 a.m. on Sun¬
day, April 27, 1947, to 2 a.m. on
Sunday, Sept. 28, 1947.
During
this period local time in the cities
the
of
New
York
and
Buffalo,
New
York, will be one hour in advance
of
Standard
Eastern
this
will
bank
Time, and
operate on such
local time."
.
on
f6r
canvassing
banking enterprises
in the Greater New York Fund's
Annual
10th
E.
the Public National Bank & Trust
Company of New York, who will
serve as Chairman of the Fund's
a
sur¬
April 20
This
C.
was
Solicitation
Committee.
announced by Alexander
Nagle,
President of
the
by the Commerce and Industry
Association of New York,
T|homas
York and Chairman of the
Jefferson
Finance
Mile.v, secretary of the
Association
stated
that
whiclv
Campaign,
April 29, will be headed by
Chester Gersten, President of
opens
Banking
available
made
Organization
Manhattan's
■
According to returns in
vey
|n Greater NY CampaigR
daylight
saving time will not be observed
First
National Bank of the City of Newand
Insurance
Fund's
Commit¬
tee in Manhattan. The Fund
seeks
"business's share" of the $32,300,-
generally throughout the coun¬ 000 needed this year by the agen¬
Nevertheless, the Bank has
been able to operate over the 13 try this year as it was in 1946. cies participating in the campaign.
years
of its existence, not only From the Commerce and Indus¬ These agencies, which comprise
without cost to the government, try Association advices we quote virtually all the major community
but actually at a substantial prof¬ in part as follows:
health and welfare organizations,
it. It has paid all of its adminis¬
conducted
under
Catholic,
"New York State law is per¬ are
trative expenses out of earnings, missive, giving municipalities the Jewish, Protestant and Non-Sec¬
tarian auspices, and serve 2,700,covered what small losses it has right to determine for themselves,
but stipulates the period of ob¬ 000
persons annually.
At least
been obliged to take, and accu¬
servance, for the
added hour of $6,000,000 is sought from business
mulated a reserve against future
daylight must be between the last to ; help meet the agencies' re¬
risk.
th^prepay- * contingencies
as
which ,at the end of
Sunday,
in
March
and
the
last
quirements.
42
(2234)
THE COMMERCIAL & FINANCIAL
'
of the United
Trade Organization
Why Russia Continues to Snnb
World Trade and Monetary Bodies
(Continued from first page)
•
,,
i
United
articles
Employment in the autumn of States
were
1947.
agreed to by the Prepara¬
Barring unforeseen last-minute tory Committee and incorporated
into the Suggested
Charter for
national Conference
developments,
will
the
Trade and
on
Union
Soviet
again not be represented at
the
Second
Session
of
the
Pre¬
Committee of the pro¬
jected I.T.O. As the writer has
suggested earlier [see the "Chron¬
icle" for Aug. 29, 1946], in the
light of the global dynamic poli¬
tical currents, it would have been
contrary to Soviet interests had
they participated in the estab¬
International Trade Organiza¬
an
tion of the United Nations.
recognize the logic
The Soviets*
paratory
lishment of the
events
of
trade
national
and
possesses
almost
industrial might in
is presently the
States
United
of
60%
the
world
the
of inter¬
finance. The
the fields
in
and
nation
largest creditor
limited
natural
touched
I.T.O.
the
74
by
Government,
submitted
tion
by
with un¬
resources
of
ravages
un¬
and
war
invasion. Hence the Soviets are in
Her Majesty: The Veto Power
4
position to compete or to bar¬
with the United States in
the I.T.O. stems from the any
shape or form. Moreover,
composite group of extenu¬ during the next decade or two
Basically,
from
same
Soviet
abstention
ating
circumstances
that
prompted the Government of the
USSR
not
to
join
the
Inter¬
national
Monetary Fund and the
Bank,
both
specialized
agencies of the United Nations. In
my
previous analysis of Soviet
World
trends of
thought
Fund
the\Bank
ap<f
"Chronicle
for
of the
apropos
i^ov.
have summarized
7,
[see the
1946] I
the Soviet
at¬
titude towards these
agencies. The
be re¬
Fund,
the Bank and the projected I.T.O.
are
predominantly under the in¬
central
Soviet thesis may
stated to the effect that the
fluence
and
United
the.y
direction
of
the
States, although ostensibly
specialized agencies of
are
the United Nations.
thus
placed
in
vantageous
position
to the Soviet
ence
nomic
activities.
cumstances,
be in
The USSR is
serious
a
with
refer¬
planetary
Under
the
disad¬
eco¬
the
cir¬
Soviets will
gain
the USSR will be
far used in the United
Nations
Security Council. Hence,
should the Government of
why
the
USSR
assist
in
huge importer
a
heavy equipment, producers'
goods, and of technical "knowhow"; but will not be in a position
to compete for world markets for
its exports.
of
The
is true
reverse
as
far
of the top
the
as
States is concerned.
United
Some
echelon of authority in
are currently ex¬
Government
our
pounding
the
thesis that full
employment is a fundamental ob¬
jective. By their own admission,
domestic
the
sorb
national
entire
the
ab¬
cannot
market
output.
Therefore, the crux of the prob¬
lem is to find ways and means
utilize
industrial
nation's
the
to
equipment by finding or expand¬
world markets for the na¬
output which cannot be
absorbed domestically. This is the
ing
tional
motivating force of the projected
International Trade Organization.
America's Stake In Foreign Trade
veto power, their most formidable
weapon so
establishing
Following
the
the
of
passage
Hawley-Smoot
Tariff
Act
of
1930, the annual value of United
States foreign trade fell from $9,-
a
agency of the in 1932
drop of more than
knowing in ad¬ two-thirds. Many American ex¬
vance that they will not be able
port industries were shut down
to exert strategic influence on its and
many
American
workers
global ramified activities because joined the breadlines. American
of
the
absence
of
the
"veto crop surpluses broke down the
power," and by virtue of the home
markets.
American
pro¬
—
Nations
United
States'
resources,
dire need
financial
supreme
^industrial
might,
of, and for, world
and
mar¬
kets.
Paramount American Role in the
iT.a
;
Soviet political economists
rec¬
ognize the fact that he who pays
the piper must needs call the
tune.
This
generally
accepted
principle is equally applicable to
the
International
Bank
construction
and
for
Re¬
Develop¬
ment
[World Bank] and to the
projected
International
Trade
Organization,
both
nominally
specialized agencies of the United
Nations. In the
of the World
case
Bank,
most of its securities will
be sold in the Wall Street market
and the
United States Govern¬
ment
40%
has
of
underwritten
the
Bank's
almost
subscribed
capital stock. It stands to reason,
therefore, that the fundamental
policies of the World Bank must
needs be formulated and executed
largely
in
the
United States.
interests
of
the
.
*
of
out
domestic
the
All
market.
in
all, the world-wide depression
was intensified and prolonged by
the collapse of international com¬
merce.
Fearing such
United
have
States,
been
made
forestalling
in the
recurrences
prodigious
efforts
end
of
collapses
in
to
serious
the
the volume of international
com¬
Accordingly, the Recipro¬
merce.
necessity also have to be
directed
basic
in
consonance
interests
States. This
is
of
with
the
the
United
fourth
the
time until June 12, 1948 and con¬
currently
broadened the powers
of the President to reduce United
States
import
much
fect
as
restrictions
50%
by
as
of the rates in ef¬
ground
formulation
which
of
led
to
United
the
the
States
Proposals for Expansion of World
and Employment, and in
turn also, the Suggested Charter
by the
fact that the Economic and Social
Council
named
of
the
thef United
same
members of the
mittee
that
four
more
States.
Nations
countries
as
Preparatory Com¬
were
vited by the
15
originally
in¬
United States, plus
including
the
United
Moreover, of the 89 arti¬
cles in the Suggested Charter for
an
for
an
International Trade Organiza-
International
Trade
Or¬
ganization.
thereof, the Eco¬
pursuance
nomic arid Social
United
Nations
1946 to call
ference
an
Council of the
resolved
in
Feb.
International Con
Trade and
of the United Nations
exercise
an
effective role and influence
commensurate with their political
other
position in world af¬
economic and .com¬
and military
their
fairs,
the
on
consider
Charter
the
Employment
establishment of
for the
International
and his British and American
lowers
"the
as
advocates
of
fol-,
new'
wars," Mr. Knuusinen asserts that
ing.
their plans are
The
Soviet
the
to
key-note
position
was
by
Foreign
Vyacheslav M.
Molotov
given
the Peace Conference in Paris
at
Aug. 15, 1946 when he stated:
on
"The western leaders had tried to
aimed not only at
independence of.
Western European States but also
at disrupting the cause of a dur¬
able peace.
Consequently Kuusi¬
nen advises those countries to re-',
shattering
the
tain their economic national inde¬
prove
...
The
drafters
the
of
Suggested
Charter have considered the crite¬
ria
ing the weaker states through the
policy to be adopted by
international advisory and regula¬
tory agencies. By the same token,
it would be a decided misreading
fail
of
the
to
recognize the fact that there
many powerful vested inter¬
are
trends
if
time
of
we
ests in the United States who are
of their capital."
power
of
Rightly
the
wrongly,
or
Gov¬
pounded before.
Its timeliness,
however, assumes added signifi-'
cance in view of the recently con- -
ernment of the USSR views with
eluded trade agreements between-
misgivings 'the whole philosophy
and methodolgy of the I.T.O. as
embodied" in the Suggested Char¬
ter. They are haunted by the fear
that the United States is pursuing
the Soviet Union and
a
the
Sweden, and
and
-
Denmark,.
*
Soviet Concepts of Contemporary
Dollar Diplomacy
of action in the economic
course
Union
Soviet
respectively.
definitely
indisposed to genuine and commercial fields, where we
trade
agreements commensurate are supreme, as counter pressure
with the wealth of the greatest measures
against the political and
Government officials do dread the
creditor nation in the world today.
strategic
reminiscent
These
where
exercise
ordinary influence on
foreign-policy makers. And, it
pressure
our
is
groups
than
more
States
to
United
indefi¬
that
cannot
nitely
the
continue
axiomatic
quantities
huge
export
of goods and
services without, in
return, being willing to receive
appreciable quantities of imports
of
areas
they
are
USSR,
advantage¬
the
more
Soviets con¬
responsible
leaders
in
England view
with
equal misgivings the establish¬
situated.
ously
that
tend
of
ment
The
many
a
dictatorship
of
the
American
First
another
of
prospects
War.
trained
war
would
Soviet
be
the
on
Concurrently,,
march.
observers
lowing
the|
Obviously,,
ensue
again,
chaos
such
Communism
rampant
trade
of that following
World
should
and
entrepreneurs
fol¬
are
trends , in
the
continually
closely
United
American dollar in world trade.
States
and
their impressions in Rus¬
publications.
They seem to
I. T. O. and the Western
and
to
extend
the
necessary
view with misgivings the "new j
Economic Bloc
"loans"
and
"credits."
This
is
kind of dollar diplomacy" as rede¬
evident
In
October
1939 Mr. Winston fined and expounded at the last
yi the acquiescence to the
notorious "escape clause" apropos Churchill
proclaimed
that
"the National Foreign Trade Conven¬
of projected
tariff reform. Ob¬ Russian policy is a riddle wrapped tion.
The Soviets are definitely
viously, these "escape clauses" are in a mystery inside an enigma." skeptical of the proposed "liberal¬
designed
<to
give
preferential Regretfully, this quip was given ization" of the new doctrine to the
treatment
to
interests
vested
at
of the general [national]
expense
welfare.
As
corollary, this ac¬
bound to weaken
a
position in world
leadership
and
simultaneously
place the United States in a dis¬
advantageous position with refer¬
ence
to the USSR.
Draft
Charter
charged
those
responsibilities
with the
of
making ahd executing foreign
policy in behalf of the United
States will of necessity have to
re-orient
the
current
course
of
action. Instead of being dealt with
independently in the purely
nomic
and
commercial
be
eco¬
integrated
should
aspects, it
into
the
fabric of our over-all global for¬
eign relations.
Our former
ambassadors
well
too
the
to
the
USSR
know
difficulties
they en¬
countered in defining a plausible
formula apropos of "loans" and
"credits." To the Russians,
restrictions
no
as
"loans"
to
how
ultimately be
used,
whereas "credits"
might imply
for specific purposes or projects.
will
For weeks
centered
instead of
It
is
stantial
end the discussions
on
more
on
political issues
on
economic problems.
doubteful
credence
sian
by some top eche¬
authority in the Govern¬
end
undue credence
of
lon
ment
and
whether
has
sub¬
been
given
to this factor, namely, that "loans"
and "credits" are integral parts
a
writer has cited chapter and verse
to the effect that the precise oppo¬
site is a more nearly correct ob¬
trade
servation.
all forms of discriminatory
in
Elsewhere this
fthe
Institute
of
tics in Moscow
published
compre¬
lining how and whv the USSR is
national
not
economic
program,
must
special¬
of
•
treat¬
trade are likewise
ment in foreign
regarded as a facade of the "in¬
iquitous dollar diplomacy."
The
cow
commentator
on
the Mos¬
radio and reports in the
nomic, political and strategic fac¬
tors
affecting each of the ten
countries in Europe, five in the
nomic power,
Far
and three
East
in
the Near-
Middle East.
Projected plans are also in the
offing affecting Sweden and Den¬
More recently, comprehen¬
mark.
sive plans accompanied by effec¬
tive bids for economic cooperation
were
Soviet
published in Soviet Russian
A
declaration
demanded
of
that
diplomacy.*
convention
America's eeo-,
the
supported by every
diplomatic means, should be ex¬
erted consistently and in a coordi¬
nated way in all talks with other
Powers, and that the system of
state trading which exists in oth°r
countries should be fought with
economic and diplomatic
weapon."
This appears to be the
spirit with which the Soviets ap¬
proach the I. T. O. and other spe¬
cialized
agencies of the United
every
journals apropos of France, Bel¬
Nations.
gium, Norway and the Nether¬
As a logical corollary to this
lands.
The
most authoritative
statement came from the pen of trend of thought and sequence of
Otto Kuusinen, President of the events,
the governments of the
Karelo - Finnish
Republic
and countries that are beholden to the
member of the Presidium of the Soviet Union must needs follow
.
Supreme Soviet of the
Mr.
Otto
Kuusinen
USSR.
warns
of
an
Bloc
incipient Western Economic
joint aegis of the
under the
United States and
England.
article by Otto Kuusi¬
divided
into five parts
The long
wo
+1
rvvi o
I
i
inn4-
parallel course of action. Illus¬
is the state¬
ment
made by Deputy Foreign
Minister Vladimir Clementis < on
a
the
of
Union to underwrite any
reduction
barriers and elimination of
to be known as 'dollar
individual
the
and
necessarily
reduction
,
The over-all plan
monographs
discuss the variegated social, eco¬
Soviet System.
well-balanced
purposes
is
of
transcending importance. In addi¬
tion,
a
comprehensive
inter¬
for
proposals
can
integrating the political economy press had this to say: "The Coun¬
of each of the-, eighteen countries cil's 33rd annual convention last
that comprise the contiguous So¬ November saw the open proclama¬
viet "zones of security" into the tion of the principle that has come
policy.
velopment
remedying the ills of the
as a willingness to in¬
corporate it as a basic formula in,'
the new foreign economic policy
of the United States.
The Ameri- ;
by business leaders
the United States.
foreign trade governments of Europe against the
Obviously,
long-term "Pretenders to Guardianship Over
"credits" to the USSR, for poli¬ the People in Europe," (the title
tical prestige as well as for im¬ of the article) and offers strong
mediate
reconstruction
and
de¬ admonition to beware of the plans
of
of
world and
hensive analyses and studies out¬
that
clear
Between
World Economics and World Poli¬
Basic
and "Credits"
seems
the
Specifically,
Ignores
Soviet Need of and for "Loans"
It
record
Affinity
Alleged
be
limited
to nen is
commodity
trade [Pravda, February 19, 1947] ana
such a specialized agency of the
barriers, especially to lowering discusses specifically the Ameri¬
United Nations. The Council set of
commodity tariffs, however can plan for reciprocal lowering
up a Preparatory Committee of important
they might be. The of tariffs the world over and its
19 nations which held its first base, scope, magnitude and frame¬ relation to the projected I.T.O.
work of the Suggested Charter He warns the Western European
session at London in Oct. 1946 and
precludes
those
factors,
hence countries
against
the
potential
drew up the preliminary'draft of
offer no inducement for the Soviet threat to their
sovereignty and
to
^ and
mercial deficiencies notwithstand¬
Minister
point of view,
the BritishAmerican - supported United States of-Europe.
Referring to Winston Churchill
from
surely' result
sponsored
too much regarding the pendence in the face of the Ameri- *
sistance to
an
agency,, such as "equality of opportunity." It was can danger.
In contrast, he inthe I.T.O., that would redound to hard to find a better
principle be¬ vites their attention to the treaties.
the benefit of American financiers tween the strong and the weak of
friendship, mutual aid and post¬
and exporters. It will be remem¬ countries.
But why was it war
cooperation
between
the
bered
that
the
Soviets
always proposed for 18 months only? Be¬ USSR,
Czechoslovakia,
Poland,
draw a distinction between inter¬ cause smaller countries will not and
Yugoslavia as "models" of in-;
national
financiers, whom they accept it. It is not Iceland but the ternational agreements, and pre¬
want to destroy,
and American United States that -suggests this sumably also as a counterpoise to
industrialists, whom they respect principle. It is -convenient only the I. T. O.
and admire.
to countries capable of dominat¬
This Soviet thesis has been ex¬
Jan.
1, 1945. These de¬
velopments constituted the backon
with
therefore, they would be making
an egregious error of judgment ii
they would lend prestige and as¬
they
for
United
the
of
conducting
From the Soviet
meant
been renewed
negotiations that
countries.
cal Trade Agreements Act of 1934
In
evidenced
is
has
Similarly, the projected I.T.O. Trade
will of
States
ducers of
automobiles, machinery,
petroleum products, pork, wheat,
cotton, tobacco, fruit; and many
other
important products were
hard hit by, the loss of foreign
markets.
Unemployed
workers
and
struggling farmers dropped
of the Pre¬
with the bilateral and multilateral
trade agreements
the
Goverment
ized agency
unless and until they can
<:
5
session
second
quiescence is
640,000,000 in 1929 to 2,934,000,000' the American
another specialized
United
The
(I.T.O.).
paratory Committee is now being
held
in
Geneva
simultaneously
no
not
position $o exercise the
a
Nations;
Thursday, April 24, 1947?
CHRONICLE
xxr/Ynlfi
trative of this pattern
1946. "Czechoslovakia
pledge to join a world
trade organization that might in
effect exclude the Soviet Union
and the eastern bloc of states with
which Czechoslovakia is closely
linked economically."
<;
October 31,
could
In
for
a
were
not
discussing the negotiations
loan of $50,000,000, wdiich
suspended by the
State^De-
partment, Mr. Clementis indicated
also that the chief difficulty in the
of
completing the
trade
agreement, as differentiated from
the loan, was the American desire
to include a clause providing for
way
+
r>ni4ioc'
inomhpi'cVlin
in
a
» .*
"\i
""
V;
.7.
*
Volume 165
world
trade
bility,
be
'
,
body.
similar
made
r
.
«•?"*
...
t.
Number 4588
by
In all
THE
proba¬
reservations
will
grouping of countries into "blocs"
inevitable consequence.
an
The
impact of the strategic contiguity
of
the
USSR
to
the
countries
in
South-Eastern Europe and to those
in the Far East makes it
impera¬
tive for the governments
of those
States to re-orient their
domestic
and foreign policies in consonance
with
the broad
the Soviet
basic
interests of
System, the industrial
might and economic wealth of the
United States
notwithstanding.
_
Soviet Russia
United
vs.
States
Fear of Greatness
The
can
!
Government of the USSR
ill afford
to join or
now
un¬
derwrite any realorNominal spe¬
cialized agency of the United Na¬
tions
American terms.
on
political,
military,
and
In
the
strategic
the Soviet Russian craven
fear of greatness is in direct
jux¬
areas
taposition to the industrial might,
naval
and
supremacy,■;
tional
of
commerce
States,
which
fear
craven
is
of
interna¬
the
United
.
imbued
with
greatness
of
a
its
Accordingly, each of the
Great,• Powers is disposed
own....
two
neither to deviate from its tradi¬
tional social milieu
nor
make
to
basic
compromises affecting the
political economy of their respeciice countries.
.The latest writing of Academ¬
ician Eyvgeni S. Varga are quite
explicit to the effect that it would
.■be contrary to .the fundamental
i
tenets of the Soviet System if the
Government of the USSR were to
undertake
a
course
of action that
would widen the foreign markets
and thus
mitigate depressions and
economic crises in capitalist coun¬
tries.
They are brutally frank in
stating that it is of the utmost im¬
chairmen of the
In
all
unemployment
probability
(2235)
43-
two power¬
the
Banking Without Tearsr
avowed
hostility of Soviet spokesmen and
expressed antipathy of many Sen¬
(Continued from
page 8)
>
Fact—Very few bankers have good boy won't pay me."
My
credit, loan and investment any real appreciation of the total father said, "Go tell him you have
officers of your institutions. It is, costs involved in consumer credit to have the money for your fam¬
inter alia, for4 the failure on the
rather, a frank recognition that operations.
Many bankers dis¬ ily."
A little later Sam came
part of the drafters of the Sug¬
systems will have to be tightened covered, quite belatedly, that the back quite crestfallen and blue.
gested Charter to take action on
up and costs will have to be cut— bad-debt losses of the small loan My father asked
him, "Well, what
four basic aspects of the projected
and you are the men who will
companies and the sales-finance excuse did he give this time?"
program:
(1) How to coordinate have to do the
job.
companies, were relatively incon¬ Sam said, "Oh, he say the interest
countries having a complete mo¬
In New Orleans
they speak of sequential.
They immediately cfone et it up."
nopoly of their foreign trade with a
legendary
In conclusion, and in all sin¬
character,
Jessie jumped to the erroneous conclu¬
those where the free enterprise
Holmes, the fool-killer, who rides sion that their experience would cerity, I want to say that you bank
svstem still prevails.
(2) What forth and
destroys foolish ideas be the same—and, I will admit, comptrollers and auditors are en¬
should be the commercial relationand superstitions.
You gentlemen so far, it has even been better— tering a period which will be a
snip between and among members are the Jessie Holmes' of
banking. but this experience has been under great challenge and a great oppor¬
and non-members of the I. T. O.
You
probe,
and
measure,
and conditions of "over-employment," tunity to you.
Obviously, costs
(3) What should be the voting
weigh, and evaluate, and seek out sharply rising wages and shortages will have to be cut in banking just
procedure, one country one vote the safest, most
efficient, most of goods, particularly durable con¬ as elsewhere; and as you men
or
in proportion to size, and (4)
economical way of doing things. sumer
goods.
(After all, what know from hard experience, that
Whether some
countries
should
Whereas, the other bank officers credit risk is there in financing an will not be easy.
hold permanent membership on
think that such and such is the automobile when the borrower can
Paradoxically, yet just as ob¬
the board governing the I. T. O.
case, you know whether it is or sell it on any street corner .for viously to >me, you are going to
Thus clouded in an atmosphere
nctt:/ You deal in facts; you have $500 more than he owes the have to increase some of your
of confusion, fear, and mutual dis¬ one
yardstick—the pragmatic one. bank?)
A
testing period ap¬ prices.
In sharp contrast to in¬
trust, the historic concomitants of
proaches when the "telephone - dustry, where prices are clearly
international power politics, it is
Widespread Fallacies in Banking
credit" extension methods of some too high, banking prices for many
doubtful whether the projected
Every line of business develops of the banks in this field will indispensable services are at the
I. T. O.,
as
presently envisaged, certain fetishes—certain "Sacred
prove wanting and bad debt losses lowest point in history.
I urge
could survive the cptngs of birth Cows."
The ; Frenchman
would on such loosely granted credit will you to do something about this
at the heavy hands of both the call them "Grand
before the regulatory authorities
Illusions"; the pyramid.
United States Senate and of the American would call
them, more
Bankers, also, discovered that are forced to intervene.
Government of the USSR simul¬
"simply, delusions. Unfortunately, the rates charged in this field were
The next few years may be dif¬
taneously.
More important, the banking;: recently seems to have far
higher than they could get in ficult, but they will be interesting.
global implications of the univer* developed more than its share of other fields.
There will not be a dull moment
Ergo, they jumped
sally promulgated Truman Doc¬ iubly^Sj^Miptions^things which to
another
false
conclusion, for you.
Whether we shall have
trine place the whole progranren- are taken for
granted, largely be¬ namely,
that
profits
must
be "banking without tears" will de¬
visaged in the IT. O. in a pre¬ cause of .a sort of mob psychology,
pend on you gentlemen more than
higher. The much higher operat¬
carious situation.
Parenthetically but which are simply not true. ing costs, the cost of acquisition, all other groups combined.
may it be observed that as of this Let us look t&t some of the fal¬ and
the heavy social costs were
———ii
i
1
writing the methods used in ef¬ lacies widespread in banking to- conveniently overlooked.
fectuating the policies embodied
Too many bankers rushed into New York Stock
of the
toward the I. T. O. accounts,
ators
•
in
the
Trumah
Doctrine
tend
to
expedite and not to contain Soviet
expansionism the world over, es¬
pecially in the Near-Middle East,
The anomolous state of affairs in
Greece, with the emphasis
on
Tur¬
-1.
Fallacy
are
.
.
Commercial
loans
longer important in bank¬
no
ing.
—
a
Fact—Total loans of $32 billion
at the end of 1946 were nearly $3
?.
dollars
billion
a
sim¬
greater than the
World War I reached
commercial
fore-runner of
and
ilar fait accompli in the Far
East,
in-mid-1920.
especially in Korea.
,
Business and Trade Relations
Continue
field
of
Likewise,
loans to
industrial
busi¬
Exchange
Weekly Firm Changes
in
idle
credit
consumer
order to utilize idle funds or
The New York Stock Exchange
without adequate man¬
clerical
experience,
agerial
training,
or
has announced the
or
what I mean,
let
changes:
To show you
ability.
me
ask one cate¬
realize
that
credit extension is
most
Marche & Lord
consumer
more
of
a
Arthur
social
V.
Crofton
will
with¬
draw from partnership in Melady
& Co. on April 30, and on May 1,
John Melady limited partner will"
to be at a higher problem than a financial one?
May Trepeat, the day of reckon¬
during the inflationary
business
boom
which
followed ing in consumer credit approaches.
There will be
losses in public
World War
nesses
W.
Ayres will retire
partnership
in
Granbery,
on April 30.
from
gorical question: How many bank¬
ers
following firm
.
Warren
appear
level than
Usual
as
the
manpower
:;jiV_
.
loan peak of
key, is but
portance to the Soviets to witness
widespread
& FINANCIAL CHRONICLE
ful Senate Committees.
other
governments
apropos of the I.T. O.
For, they
all recognize the
fact that the post¬
war malaise is
intense and that
is
tive
COMMERCIAL
become a general partner.
;;
\
Concerning the use of quantita¬
I.
Robert W. Atkins
will
retire
trade restrictions, exchange
goodwill, operating losses—slow
would simultaneously en¬
from Shearson, Hammill<& Co. on
2. Fallacy — Commercial banks
controls, import quotas, export
losses, hidden losses—all kinds of
hance their own trading position
April 30.
subsidies, international commodity need have no concern about-real losses
where
banks
have
not
as a huge buyer of finished
Pierre Albrecht, limited part-''
prod¬ agreements and other
cognate as¬ estate, values because they have handled this credit as a highly
ucts and industrial "know-how."
ner in
Bendix, Luitweiler & Co.
pects of world trade the Suggested so few real estate loans.
specialized,
fully
autonomous
Hence why should they join an
will become a general partner ef¬
Charter for the I. T. O.isv largely
Fact-r-Bank loans on real estate function
under the direction of
International Conference on Trade
fective May 1.
'
■"■"V
following the philosophy of the are five times larger than in 1920. trained consumer-credit staffs.
and Emojoyment designed to pro¬
On May 1 transfer of the Ex-*
Bretton Woods Articles of Agree¬ Such
loans
increased
Do not misunderstand me, I be¬
approxi¬
mote tM maintenance of employchange membership of A. Pam *
ment.
The
interlocking of the mately $2.5 billion in 1946 and are lieve in the soundness of consumer
mentgm capitalist countries and to
Blumenthal to Andre B. de Pontet*
proposed I. T. O. with the Inter¬ currently at a record high of over credit.
I am just trying to em¬
will be
considered by the Ex¬
create\ greater vistas of foreign national
Monetary
Fund
and $7 billion, which is approximately phasize that you must not take it
tra^e that would redound to the World Bank, the Food and Agri¬ 50% more than the previous high for granted—that real ability is change. Mr. de Pontet will act as
benefit of international financiers,
an individual member of the Ex¬
culture Organization, and with the reached
in
1941.
In particular, needed in this field just as much
the avowed enemies of the Soviet
International- Labor Organization banks hold a larger proportion of as in any other activity of the change, it is understood.
Transfer of the Exchange mem¬
planned economy system.
Inci¬ is a
logical development of the farm mortgage loans than at any bank. And, if I were you, I would
dentally, in the original proposals specialized
bership of Rudolph Reimer Jto
agencies of the United time in the last 20 years.
proceed along the lines suggested Otto B. Reimer will be
of the United States 13 pages were
considered
Nations.
So far, the Government
daughter a on
3. Fallacy — Term
loans
are by my six-year-old
given to trade policy, and two of the USSR has chosen to
May 1.
join profitable at the ridiculously low few years ago. Her grandmother,
paragraphs to employment.
none of
them, but the door is still rates which prevailed in 1946.
who had been teaching her the
Ironically enough, the fate of open for the Soviets to
join any
principles of Christian Science,
Fact—The
cost
the projected I. T. O. is none too
accounting
I
and all.
had suffered from a headache all
studied offers little support for
promising in so far as the Senate
Nevertheless, business and trade
day.
Along about five o'clock in
Finance Committee and the Sen¬
this idea.
Even considering these
between the United States and the
the afternoon, I heard my daugh¬
ate Foreign Relations Committee
loans as being on a marginal basis,
Soviet Union continue as usual.
ter say, "Nanny, why don't- you
I can find little evidence of profit¬
are
concerned.
During the re¬ During the year
1946, the United
pray to Gad—and take an aspirin."
ability.
Competition has ^indeed
cently held hearings, Under-Sec¬ States
Treasury purchased gold
Well, my advice is to dig into
run riot when a borrower can se¬
retary 01 State William L. Clayton from the USSR
aggregating $33,your costs and set up a few re¬
cure
and his advisers were
dislocation
in
the
United
and
States
tive
which
,
.
subjected to
cross-examining that
doubt as to the probable
negative reaction of most Senators
such
left
cn
rigid
no
those
I. T. O.
ously
absent
whereas
committees.
from
Pro-
conspicu¬
were
the
hearings;
the
Chairman, Senator
D. Millikin, conducted the
with principal emphasis
the degree to which the
States would put an im¬
segment of its foreign af¬
Eugene
inquiry
cn
(1)
United
portant
fairs
two
Senators
under-
an
autonomous inter¬
728.071.
global
Due
to
character
American
the
of
nature
some
industrial
rations and
giant
and
of
the
corpo¬
Soviet Trusts and in¬
Council
of
the
United Nations, under whose aegis
it would ostensibly function.
It
will
be
recalled
that
the
whole
trade-treaty program as .embodied
in the Suggested Charter for the
I.T. O.
tion
was
saved
from
destruc¬
prior to the opening of the
Preparatory
Second Session of the
;.
Committee
currently*
held
G eneva by concerted action
on
in
the
'
part of Senators Arthur H. Van;
(dchberg and MRlik
bonds in the market on bet¬
ter than
a
2%
basis.
Frankly,
many of these term loans remind
products
and
bad!"
so
huge quanti¬
goods, finished
industrial
"know-
agency,
and
(2)
the how"
without
"credits"
and
[fear] thesis that the powers of "loans" and without
formally join¬
projected I. T. G. might be ing the I. T. O. and the • World
.greater than those of the Social Bank, the political
entanglements
Economic
a
that
year
coula
continue to purchase
ties of producers'
the
a
on
notwithstanding.
Also, I am not too sanguine as
possibilities of full payment
to the
on
of
some
Competition,
have
standards.
of
the
ST.
gin
LOUIS, MO.—John H. Cra-
has
become
associated
with
of
overhead
during the
The
Edward D. Jones &
Co., Security tition the
of
and
have
intervening
world
has
we
expan¬
crept
14
ever
Fallacy—That bankers "can
and eat it, too."
in
¬
known
consequences
in sev¬
phases of banking, it is prob¬
ably at its worst in market opera¬
tions
in
government bonds.
I
refer to the practice of some banks
of
selling government bonds to
take a so-called "profit" and, then,
turning around and buying the
same bonds in a week or so and
eral
up
amortized.
the
premium
to
be
A few banks, particu¬
Finland
on
"profits," and
impossible!
into
is
Such
banks
are
you
know that
liable
to
York
a
colored boy who used
to work
brochure
page
165
&
Trust
Broadway,
New
Bank
15, N. Y.
Opportunities
and
in
Pitfalls
Foreign Trade—Bank of the Man¬
hattan-Company, 40 Wall Street,*
New York 5, N. Y.—Paper.
Opportunities
Trade
Foreign
Manhattan
and
—
Pitfalls in
of the
New York,
Bank
Company,
N. Y.—Paper.
^
the
Rear
Farrington,
McCann,
New
N. Y.—Cloth—$5.00.
:
Jr.—
York,
find
themselves in the position of Sam,
Four
dition—Chemical
larly the smaller ones, have done
so
extensively
that
their
premium account approaches the
size of their capital.
The over-all
effect of this is to convert capital
—
country and its financial con¬
Company,
this
years.
compe
the
Fact—While
of this fallacy can be seen
Railroading
End
S.
—
Coward
From
Kip
-
.
members
St.
Louis
the
New
Stock
Ex¬
changes. Mr. Cragin was formerly
with Slay ton &
Co., Inc. In the
past he conducted his
ment
this:
business
cruelest, most savage"
Building,
York
real
wastes, inefficiencies, and
sions
(Special to The Financial Chronicle)
5.
have their cake
4oans- setting
afraid, may
lowering of
cycle
financial strength of
since
1932.
Many
no
borrowers
With Edw. D. Jones & Co.
am
some
term
Remember
had
test
these
I
caused
have
serves.
borrower could not sell five-
terlocking financial arrangements
Effecting plantetary markets, it is
me of the fellow who was
going
difficult to give a categorical fig¬
to the races with his wife.
After
ure
reflecting total current ex¬
considering his financial situation,
ports to the USSR.
In our previ¬
he said, "Honey, I sure hope I
ous
analyses we have suggested
break even today; I need money
that the Soviet Government
national
and
five-year term money
1%
basis, when
than
less
same
own
business in Joplin.
invest¬
;
will
disclose
many
unsuspected
weaknesses during the next three
or
"4. Fallacy—Consumer
my
credit
is
father
down
South.
A
friend had borrowed $5 from Sam
and
four years.
highly profitable.
for
terest.
to
:
Taxation
promised to pay him 6% in¬ dolph
my
for
Prosperity—Ran¬
E.
Paul — Bobbs-Merrill
In about a year, Sam came Company,
New York, N. Y.—«■
father and said, "That no Cloth —$4.00.
'
44
tion
How to Cut Prices
(Continued from page 10)
cut, a balanced budget, definite
reductions
agencies
to
If the
of action in the
Republican Party wants to
country's leadership. As evidence, preserve our country from depres¬
sion
and totalitarianism, and to
we note that President Truman s
Federal
expense,
employees,
labor national poularity rose to a peak prove it is not just an agency for
of
and
consistent
course
laws that will provide for genuine shortly after he took office and the ultra-rich
collective
bargaining. But most apparently turned his back-to the chance.
,
in
it
—
has
now
its
the
steel
much
me
there
industry seems
arguing that
like
be
can
stabilization
no
employment in a particular
dustry. For a long time that
fairly
the iia-»
cessive" positions to cause
tion undue worry.
of
in¬
Leader?*
the
Psychosis
Get Rid of "Follow
was
second
A
wide-spread
view
in
business. In recent years, how¬
ever, it has been found that by
study and cooperation a perfectly
a
1947
Thursday, April 24,
THE COMMERCIAL & FINANCIAL CHRONICLE
(2236)
like
drive
to
at
™an,af®®f"llow
that it should get r:td
the leader"
>"
7
that I would
point
oJ,
.
tv,;s
psydt°siSj_Tod^!^^
probably most evident in con
High prices of today are more
realize the arin the way of employment sta¬ riection with wages. I
.am sure
duous and tedious preliminary lowed, his popularity rating dwin¬ dangerous to free private enter¬
bilization. Sometimes this can be that you are familiar With this.
work which
dled steadily, as his behavior con¬ prise than the Communist Party
must
be done
oy
done within a company all by it¬ Recently one of the companies in
Congress before needed reforms tradicted his apparent early stand. of the United Nations has ever
citizens
;
.
do
be
can
November
the
After
Republicans gained con¬
trol of Congress, he expressed his
how
desire
away
:
much
be
-must
work
bureaucratic
removed
can
begin
before
on
or
rubble
actual
the construc¬
tion of sound laws to replace the
jerry-built flimsies of the New
Dealers. An infinite amount of
and
national
P?* a year ago> we spent a
IZ °A^Ame filing the people that
the OPA of wartime wasn't suited
±
i
cooperation
to
bi-partisan unity. Again, he
to
be
returning to his
original Presidential position.
Up
popularity rating among
the people of his country.
They
study, research and surveying has were encouraged when he took
already been accomplished by this his strong stand against Commu¬
Republican Congress.. I have no nism, within and without our land,
free
a
isn't.
it
seemed
peacetime economy, and
However, instead of dis¬
banding the price control agency
a gradual basis as Congress in¬
tended, it was turned loose sud¬
went his
on
be
done
through a better arrangement
production schedule. In
of
when the
for
self
been.
elections,
enac'.ed. They do not re¬
alize how much New Deal under¬
brush must be cleared
could
amount
enormous
In the months that fol¬
New Deal.
not
its
is
textile industry . gave an M
and within almost a mat¬
the
crease
ter of
comparable increase
the entire industry.
other cases it was necessary for
different industries to mesh their
went through
activities
In the steel industry everyone
together, with the
that
suit
when
re?
high
the employment level the other
on
was
up
low, and vice-versa. I think
was
it
one
for
time
is
business
manage¬
day,
days,
a
to¬
well know, is pretty
sitting around- waiting to
you
as
much
what U. S. Steel does. If U. S.
see
Steel
gives, say
10%/increase,
a
planning we will see the same kind of an
increase throughout the steel in¬
rJot of increased prices was ,the op good times more or less in¬
definitely into the 'future. Sure, dustry. And1 this increase will be
natural and inevitable result.
that means taking some risk, but ?given regardless of the profit po¬
doubt that public
impatience will and formulated a clear cut land
However, enough time has now so
does everything else in busi¬ sition of the individual company.
fade rapidly, as the fruits of its firm foreign policy. The Repub¬
elapsed to enable private industrv
ness.
This "follow the leader" idea
diligent efforts ripen into honest, lican Congress is supporting that to get back to sanity. But the ad¬
At the moment if we could get seems to me to be
fair and workable laws. I am con- foreign policy in the interests of
justments in prices are not being
•fident that the American
business
management
to
start sound. If it continues to grow, it
public national unity and bi-partisan co¬ made as almost every industrialist
will be quick to salute
this Re¬ operation for the nation's welfare. and producer will admit privately planning on the basis of conti nued will tend to give us the sarm.kind
of an impossible situation that ha
publican Congress as its memberthey should be. The snowball roll¬ good times far into the future, it
A Stand on Domestic Policy
could do wonders in the way of been one of the curses of England
ing down the mountain has built
P translates the promises of
The President will have to take
adding a substantial stability.
It for the past generation. Over there
last; November into the perform¬
up into such an avalanche that
ance of this summer.
would mean that a business couid with' industry-wide bargaining it
his stand shortly on domestic pol¬
denly by
a
A
Presidential veto.
ment as a whole to start
>
■
ba^ca!Jy
-
i
Deal
bureaucrats
best
to
their
"smear"
are
and
handicap this Congress by refus¬
ing any cooperation on their
part.
The
campaign
now
going on
against the Congress is more than
a
partisan
fight.
It
involves
two
distinct
philosophies of govern¬
The Republicans are reaf¬
ment.
is afraid individually to
try to turn it aside.
everyone
The New
<!oing
firming fheir belief in the
sounds
providing for sizable tax reduction
substantial
and
payment
on
the
Higher
demand higher
higher prices give labor
wages
m —
the basis
on
which to demand still
public debt—and other bills which
higher
wages.
And
the
price
express anti-New Deal basic prin¬
structure continues to build
up
ciples
of
government.
Cutting
until people are wondering
government expense, of course,
it the only cure is to let the ava¬
the heart of the
breaks
"call
me
Liberal" totalitarian New Dealers.
ness of government
by law. The
New Deal bureaucrats s'ill
seek a
dertake
tainside.
became
ploys and employees r to agree
prices
yield it a
today
which
profit margin
which over the long pull is ade¬
quate to attract capital to the in¬
dustry. It would mean, from the
point of view of the public, that
business
management
itself
was
saying that it has unlimited
now
confidence in
system of indi¬
our
vidual enterprise and in our abiU
not to
a
simple.matter^or em¬
make
technological im¬
a
provement. .It
became
simple
a
matter because one company knew
that* it
investment
,
technological
could* -
to
improvement
,
^be¬
rmprovemeht
the
make--
competitors
his
of
none
cause
make the
get the
didn't need to
additional
i'r.
existence
fully^ the totalitarian liberals
lanche crash into the next moun¬
establish
would
icy, when he will be confronted
with
Congressional
enactments
ity to make it work successfully either. The upshot of all of this
Deal, struggling for its
I believe, is where a Re¬ and
continuously in the public in¬ has been that"productiye,efficienqy
among^eal Democrats—r
publican Congress can come in terest. It; would mean that busi¬ in England is distressingly low, as
government by
men—specifically, is not for-any cutting down of
with some very timely help in this ness
their men.
'
.7
government. Its philosophy is for
management would be show¬ compared to what we - haverhad
emergency. Industry needs some ing a united front to the public in this country- In: my judgment
more government, not less — for
Curbing Totalitarian Liberalism more
government spending and encouragement in order that it which said, in effect, we are will? it will be fatal to tte progress of
The
may apply the wisdom which it ing to take the same gamble on this country if we fall into that
Republican
Congress
is more taxation.
showing its ability to curb success¬
possesses and has gathered in the the future that everyone else has
I think
The
New
It is obvious that we cannot
had taken
who
far down road to
us so
the
past year.
'■
to take. In a
that President
national socialism.
call for without drastic retrench¬ Truman has done about,prices is
A few years more
of unre¬
ment here at home. We may have mostly- conversation. It seems: to
strained - totalitarian h 1 a
n n1 n g
the issue is that President
to give up—even if temporarily— me
the top down—from Wash¬
Truman believes that he is dealing
services government should ren¬
ington
Bureaucrats
with a problem that the governinfiltrated der. It is
past time to take stock.
with
Communism—apd
would
have
the Soviet
been
warranted
in
of the world—
look, the United States of America
'is sick unto death
with the weak¬
saying to the.rest
ness
inherent
i-
.
y
in
cannot
they
Republics:
• themselves,
save
now caiv
Thq<
all
save
.liberal
America* *iiand
you? - ;;
.institutions
i
the- world
owe
a
Republican Con¬
it goes steadily and
pa¬
tiently about I he hard work of
rebuilding stone by stone the edi¬
V
The
lican
our
mere election of a Repub¬
was
cheering and
stimulating to liberals
the
world
over.
Today, if
Democratic Presi¬
dent would really
join a Republi¬
can
Congress
in
effecting
an
a
«about face,"
in-*
of
project.
any
If the President's new foreign
policy is to succeed, America must
j
be a sound financial moor post for
the
of
rest
the
non-Communist
*
Will
President
-
Truman
"go
along" with the Republican Con¬
gress
on
the' domestic policies
espoused by that body of patriotic,
sincere
Americans?
Will
he
co¬
represen¬
tatives of the people on
(he home
front, as they are supporting him
in foreign policy?
Will he hew
his way out of the governmental
wilderness created in the past 14
years
by
power
reaucrats?
greedy, selfish bu¬
Their
lust
for
domi¬
contempt for individual
rights and disregard of the con¬
stitutional
processes
of govern¬
nance,
mocracies of the past and
present
would give the world new
evidence
of
the
incomparable
ment
on
—he
orce
and
vitality of
our
great arid
glorious Republic.
5' Of
course, Mr. Truman has not
openly and frankly confessed 1he
mistakes
Deal,
of
the omniscient New
has he admitted that he
nor
opposition to the control of
this nation
by the leftist bureauera's.
4.
>
A"d,'t
the
-
pre¬
being
authority.
Today, President Truman's
political
to
the
of
prostituted
the
the prin¬
Democratic Party,
to wrecking
and then came close
the greatest of the world's nations.
Will he be courageous and forth¬
right enough to join with the Re¬
publican Congress in the interest
of national unity and bi-partisan
cooperation on the home fronts, or
will
he continue
power
Deal
and
pressure
totalitarian
now
beliefs
New
remain
Dealers—the
real
affairs.
On
the
Demo¬
ing
down
riding
mg
the
1 t
Truman
home
determine
will
stretch
on
domestic*
answer
answer
to
that
to this
country's progress or decline in
strength, well being and advance¬
ment, in the critical months ahead.
foundation for the
Mr.
Their
sufficient tq
enigmas A Republican Congress, by build¬
the Reoubucans alike.
confused American
people can-
.«a*
leaders?
question rests the
A
11
yield to the
of the New
seems
crats—and
whether
to
wav be that in the end keep him wavering
waged for control of the adminis¬
tration
first
ciples
influence
totalitarian liberals will
vail in. the struggle now
in
a
strong America, is laying the
ident Truman's
success of Pres¬
new
foreign policy.
1948
left wing horse but
wear-<
the right wing colors.
i
iI
1
3
't7'.
all
now
ment is powerless to solve except
through the pressure of public
opinion, and the indirect weapons
available to the President.
Ill attempting
that, he gives the
nod to a new wage
w.roy:.
hope of free enterprise and of
financially: solvent Republic.
''•!/«
«-■ n
1
.i|'
t £'• i: t-vil
increase drive
by labor. Thus, he clears the way
for another round of post-war in¬
flation.
I
attempting
am
to
offer
a
definite plan of action. Frequently
Past months, I have urged
IS
t"e
•
Anti-Trust
Division
the
of
Justice
Department to investigate
I propose that
Congress can do something
concretely helpful about it.
hese prices. Now
the
First, I think it is time for busi¬
ness
leadership
over
the
nave
a
trend
in
whole to get
as a
that
idea
boom
and
we
bust
have
to
business
this country. I know, of
word, it would mean^
business
is
saying
the
to
^American public that we are set¬
ting prices which
give us a fair
assumption that
going to continue to
be good—not setting prices which
return
the
on
business
is
yield such
rate of return that
we
can
ride
through the next
great storm that may hit us. Let's
get rid of the storm psychosis.
Let's reveal not only to ourselves^
a
but to the whole
have
system in which
a
genuine
able
confidence.
that
reason
our
should
we
have
we
There
is
not
no
keep
economic system on a reason¬
even keel.
Now
such
part of
a
world, that we;
at itude
an
business
hole would not
business
the
on
management
mean
organization
as
that, every
limited
profits to some percent which you
or I might think is "fair." Grant¬
are going to use individ¬
enterprise, there always will
be some companies, and some in¬
we
ual
dividuals,
seems
us.
who
make
reasonable
to
more lhan
the rest of
That is true in the bottom
of
re-adjustment.;'With: wise 'man¬
realsense, a price which we pay for
the right of Treedom—the right
for a man to go into business and
try to make a larger return on his
capital thari if he bought govern¬
agement, however, these re-adjusiments should take place in
fectly safe investment. The public
that
course,
run
we
are
able to have
to be
are
going
never
business trend
a
absolutely smoothly. There
always going to be periods of
less
more
or
time
not
in
the
entire
ia
mah-j
if
agement
continues
terms
profits now betelling what is going to
in
think
in
large
be the situation
ana
to
little bit hence
a
they must
protecting themselves.
The
steel industry is a good example.
This industry has always been
known as a prince and pauper in¬
dustry. During the period of good
consequence
start
it
times
has
suffered
made
But I cannot
large
very
substantial
see
%than
a
.
losses.
any reason
to be the
that there can't be
case.
or
some
other
per¬
attempts to eliminate these high
profits spots in our economic or¬
ganization. On the contrary, such
at
a
of
bonds
ment
a very
a
economic li system
major portion of; business
no
depression. It is, in
economy
working
cause
a
interest would not be served by
industry
one
gll at once. But in my judgment
??-ngx *° have great diffi¬
culty getting this kind of
good
this has
a
that
ing
Give Up Idea of "Boom and Bust"
has
We Republicans claim to be the
-
i
to
profits, and then in bad times it
Republicans; the Hope of Free
Enterprise ;v." L'-
a
Up
come
Our people hunger for
courage
clear thinking, plain talk and
a,
«
any
dividual—should estimate the cost
the path leading
to the
abyss of national- socialism
mat
has engulfed so
many de¬
•
as
operate with the chosen
Republic.
Congress
same
of
as
fice of
Government—the
world to tie to.
great deal to the
gress
President's
everybusiue^jnan-
un¬
heavy burdens the
new
foreign policies
why
To argue
anything other
elimination
would
mean
should say iiw effect, care what my eomp ~titor is going to *do; I'm going
to^do
which will
|iye me the
greatest productive efflciencyv
going -to, pay the
seem to me to be fair. and best.
I'm going'to price my products at
the
level I can in order-to
yield me what I think is fair.
Jto
other words,'I am going to be a
agement
just don't
thSI&g
wages-whi^
fowrat
real
competitor, not just a mem
the herd.
Such a policy
of
ber
does not mean that we have com
petition
between
force wages
well
the
mean
management-to
It can just
down.
exact
reverse,
as
witness the fact that it
Ford
in
w^s Henry
competitive in¬
highly
a
who lifted his wages far
in other companies
He did it — not by following a
leader - but by deciding what
was best from the point of view
dustry
those
above
of his individual company,
the others didn't like it,
an4 1
that was
just too bad.
In
industry-wide
opinion,
my
pricing, industry-wide almost any¬
It g°es coritrary
principles, that th- dif
companies within an indus¬
thing, is bad.
^
the basic
ferent
try should operate independently.
Let's get rid of this war-born in¬
dustry-wide approach to our prob¬
lems and settle down into a good
competitive
independent,
basis.
Furthermore, if industry is
to stick to industry-wide ^ricin»
it
cannot
kick
on
industry-wide
bargaining by labor.
,
ib-;
the de¬
On the side
struction of the individual incen¬
-jlf
-if*
Labor and Wages
of labor whatneedk
be^done^?: pretty.bbviousn "Wfe '
life bjood of our economic organ¬ are never going to get a declfniqg
ization. What we need is to make price level against a rapidly rising
sure
that we keep competition wage rate. I believe that we bave
alive
so
that these "excessive" the right to ask labor to t&kp the
profit positions have to be tem¬ same kind of a gamble on: the fu¬
porary, because some^cuhei:. pro¬ ture that we ask business mqnag^r
ducer will come -akrfig and knock ment to. take. The real, wages of
tive and opportunity, that- are thq
to
the profits down to a more
American
sonable
rea¬
level.
labor—wages In
■
ternis
Granting that we
keep
the
Anti-Trust
Laws
in
good shape
and well-enforced.,
and grafting further that business
of what they will buy — are far
above what they were in the pre¬
will
them, and they are not as high as
take
sition
of
on
our
prince and -pauper- citua- will
■*.' .v--1>
.
.•*;•>\ : ii>in;;
a
broad, optimistic po¬
the fundamental
strength
economic system, we never
have- enough
of
these
i.
"ex^-
war
as
we
Of course, they are not
level.
high
as
we
would like to see
ultimately
through
will
technological
But. when
you
get
them
progress.
increase
;
wages»
r.
Volume
Number
165
without
having a corresponding
productive efficiency,
in
increase
thfe inevitable result is
in
prices.
clearly
THE COMMERCIAL & FINANCIAL
CHRONICLE
4588
This
last
an
shown
was
that
year
increase
so
the .labor
leaders must know that it is true.
Another round
of
increases
will not help labor—it will merely
increase prices again and hurt la¬
bor and everyone else. If, instead
of demanding another substantial
wage
round of increases, labor .will hold
fast and let us get our economy
Track
to
know
third
that
cannot
we
wheat
of our
effect
that
upon
ship
one-
Investment Bankers
supply out of
its having an
the country without
Complete Plans for
of living—
and
price support pro¬
cost
our
cannot put through
we
continue
one
Fund
still expect
gram after another and
Fourth, Congress can tackle the
cost of living situation by bring¬
ing leaders of industry and lead¬
ers of labor into hearings that will
I
which
Such
■
check
this
leader"
"follow. the
Campaign.
a
just
'mentioned 'above.
corrective legislation will not
be—must
should be
not
be—anti-labor.
no more
It
anti-labor than
the Sherman Anti*Trust Act was
apti-business. The latter was antibuccaneer, and it has nof been en¬
forced
as
it should
What
be.
need in labor legislation is
we
anti-
labor-buccaneering correction, and
with industry anti-monopoly cor¬
rection.
Second, the government needs
\
to
or
more
its
overhaul
monetary
policy,
accurately,-see to-it that
the Federal Reserve System stops
following policies which are in¬
flationary in the highest degree.
Ju.. 1946. we had an increase in the
money
supply and bank credit
which, measuredby f peacetime
standards, was perfectly fantastic.
debt
their field in behalf of the Greater
New York Fund's /10th Annual
sound, productive, folly.
Congressional
authority
competitive basis, not only labor over tariff rates and excess profits
but everyone else will benefit. Ap¬ —which it should not hesitate to
proximately 80 cents put of. every use by drastically lowering the
final consumer's dollar represents first and" taxing the second, if
wages back through the productive necessary—is a powerful .weapon
to encourage industrial and labor
process."
■; '•
V:'.;
:,On the side of government, it leaders alike to work together to¬
ward
a* sensible price structure
seems to me that there are three
broad constructive steps that could that will halt this spiral of dan¬
be taken.
First, it, needs to sup¬ gerous inflation^ •
port legislation which will get rid
\
Prices and Production ;
of the present monopoly aspect of
Of course, the thing that will
the labor situation.- .Unless dbis is
done, it will be impossible' to get bring prices down best is in¬
rid of the "follow the leader" creased prirductiom But that is be¬
attitude on the part- of business, ing held back by uncertainty as
on
R. Parker
and
Chairman
of
the,
Fund's
First
City
of
National
New
Bank
York,
T.
of
Jerrold
Bryce, partner in the investment
the Presi¬
open
had
Hotel
producers that they
enough of New Deal
crackpot schemes of managed cur¬
and permanent deficit fi¬
nances—that because we live in a
streamlined machine era the old
rency
not
that
government—and
both
the
assigned solicitation quotas
campaign.
President
Congress—will do all it
and
do in
can
ernment debt or other debt that
is held by our commercial banks.
What has
happened during the
off
year
Eccles
of
The
banks
bought
on
other
made
the
market
government
.
fect
1947
April 29 with
Astor
at
effect
loans which had
S.
Sen¬
of
these
not
lars
more
at
the
loans
and
now
sits
th'e
ef¬
spend
than
High
tration
of
the
living which
by the adminis¬
Federal
Govern¬
bring about achange in'
Federal Reserve
to
power
pol-^
Board's
a
make
it.
•
have*!,
We
frequently the desir¬
Monetary Commission
study the whole problem oZ
in this country, but we'
money
should not wait for
One of the curious facts about
and
suph
study;
a
before bring pressure to bear on
Mr. Eccles and his Federal Re-'
ator Irving M. Ives will be the
principal speaker. Frederick M. only when, they lend to borrowers
or buy government bonds
directly
Warburg, partner in Kuhn" Loeb
The fact is
& Company, is Chairman5 of this from the Treasury.
that
banks
create
new
money
year's campaign. John A. Cole¬
when they buy government or
man, of Adler, Coleman & Com¬
other bonds on the market for
pany and Chairman of the board
their own investment earnings;
of the New York Stock Exchange,
Recently the banks bought the
and John D. Rockefeller,
3rd, are
bonds
issued
by the State of
Campaign Vice-Chairmen.
These purchases in¬
In its forthcoming appeal the Michigan.
accounts
the
expressed
to
Stop Expansion
bank
*
cori1 of
ability of
this money matter is the current
belief that banks create money
creased
of
Mr. Ec¬
icy.
They have the power~-i©
change this policy as they had
beginning of 1946.
Must
danger
controls
taken
of
ment is to
had
we
the
on
the
at
should be
The
bank
money supply,
so
have $13 billion dol¬
to
Reserve
.
and
the
Federal
among those at¬
President's Conferr-
the
recently
cles
bonds
deposits.
real,
money-making machinery which
is reducing the
purchasing value
of the dollar and putting pressure
upward on prices.
j
The first step
iq the,war against
the
we
dinner at the
U.
increasing
that
campaign will
a
which
of
the
higher and higher prices.
it did not is that the
went
the-
ence
its
reason
of
was
tending
is that the Treasury paid
some
is
rising prices.
significant that Chairman
is
Board
tions held
*
The Fund's
show
our
It
which
of
cause
gov¬
the
dent
means
of
supply
money
supply
money
amount
increased
have
If
the
the
the
for the
are
that
on
purchases of Treasury obligations
on the
market, plus purchases of
corporate and municipal bonds,
campaign,
Complete plans were made for
convassing all of Manhattan's in¬
forth¬
changed—the
outlook
for
eco¬
nomic stability and lower prices
will be materially improved.
is
are active in the Fund's
attended the meeting.
j
time tested economic laws
true
depends
they main¬
directly re¬
sponsible for the continuance and
the
further
expansion
of
the
debt. What
or
and Alexander
were
situation
is
in prices when
tain financial policies
Clark, Dodge & Company,
M; White, partner
in White, Weld &
Company, who
firm of
vestment banking firms and mem¬
bers
of Mr.
Kuhn's committee
that
In
it is not true that, the
supply
depends on the
money
amount of government
the
to
the Congress and
dollars.
10)
page
crease
.
the
policies. Both
the Congress have the obligation
clearup
billion
$23
from
government
maturing obliga¬
investment
by the banks, but the
bankers
solicitation
reduction in money supply which
committee; presided at the meet¬
ing, held at No. 2 Wall' Street. should have taken place did not
VT '
Alexander C. Nagle, President of occur.
of government
the President and
If
by
reduced
other words,
Kuhn, Vice-President
the First Boston
Corporation, past
of
to the entire range
with.
(Continued
meanwhile
Meeting in the heart of New
York's financial
district, Manhat¬
tan investment bankers
planned
solicitation of all organizations in
prices to go down.
Money and Prices
|
Campaign
(2237)
Board
serve
icy
to change their pol¬
requires the Federal
which
Reserve
Banks
to
buy
any
gov¬
ernment
obligations held by the:
member banks and thereby pro¬
vide
the
sion
member banks with the
of
means
of
and
more
more
expan¬
supply of dollars. ,x!V.
This monetary policy plus its
consequences is costing the peo-'
pie of this country very much,
our
our
more
in increased prices than it
the
money supply.
Exaetly the same would have cost them to pay the
the
happens every" time the taxes which would have made it
cal policy—balance the budgetoverall contribution need of $32,- thing
banks buy government bonds as
make a substantial payment on
unnecessary to create much of the
300,000 required by local hospitals,
Yet the Federal Reserve never so
the national debt—lower taxes-^- health and welfare services iit the they have been „and are buying debt which the banks, helped the
much as lifted its fingers to, hold
government bonds, not because Treasury to float during the war.
this expansion in check, The argu¬ tighten tip on credit—make sen¬ city. Four hundred and twenty*
the Treasury asks it but simply
sible tariff adjustments—maintain
ment in,*support of this policy is
l^ree organizations and institu¬ because they want the
a fixed and sound
earnings.
monetary pol¬ tions, conducted under Catholic,
that unless money rates are con¬
The more they buy the more our
tinued at an artificially low level icy—control "the personal power Jewish, Protestant and- non-sec¬
of arrogant bureaucrats over la¬
tarian auspices, share equitably in money supply rises and the more
through Federal Reserve policy,
there is available for future buy¬
bor and industry alike—all that
gifts solicited by the Fund,
i
the interest charge on the public
- <
Members of Mr. Kuhn's com¬ ing.
debt WiH increase, < If thepg^e^r acting together would have a cor¬
f
This process must be brought
rective influence on the cost of mittee who attended
yesterday's
establishing beyond any; question
of doubt a permanent, sound, fis¬
fund
seeks
business
$6,000,000
community
from
toward
La&sardia Says Strike
Closing Exchanges
was
and
of ^beingy penny wise
pound foolish this certainly is
o
case
In order to save; a
it.
little bit
living.
If
on
to
-
there
ever
was
time when
a
needed
we
statesmanship on the
the carrying charges of our public
part of labor leaders,and industrial
debt, we are endangering .the pripe
leaders alike, this is that time.
structure of the whole nation and
Unless we get some of this eco¬
thereby undermining the value—
nomic
statesmanship and some
the real value—of the entire sav¬
ings of our people.
Third, it
about
time
seems
that
to me that it is
the
Government
got itself straightened out on what
it is doing to prices. It comes with
for an administration to
complain about the risting cost of
food when the administration it¬
ill
grace
piling up millions of bushels
potatoes to let them rot, and
otherwise supporting this and that
commodity which are part of the
standard
diet of
the
American
self is
of
political
planned
statesmanship
another
economy—another OPA
inevitable.
is
Because
economic
permanent
planning by government is incom¬
patible with freedom does not
that
mean
the
elected
represen¬
tatives of the people cannot func¬
tion successfully in an economic
crisis.
Russia is waiting hopefully for
another
"bust"
dently expects
a
totalitarian
when
us
confi¬
she
succumb
to
economic
to
planning
with ill and"
control
of
everything-^-ingrace
an
administration to
cluding labor. ' ''
blast others about the price trend
? •Without
abandoning the prin¬
when through the way* it is han¬
people.
It
for
also
comes
-
dling ijtsf purchases of grain, and
pther .materials.for relief* it is en*
couraging speculation and driving
prices to substantially higher levthan<: aq, orderly buying. pro¬
ciples of
American Republic
Marxism
called
New
Dealism—Kienism or Sialism—we
for
*
can
our
any
look
the Republican
to
gress to meet the present
inflated prices:
Con¬
greed of
All of us in a high-standard-of.would necessitate. Granted,
administration doesn't know living economy are interdepend¬
much jit is going to have to ent upon one another. Each of us
gram
the
how
buy for relief purposes.
But when provides
it does engage upon a program,
mtist{hhve
some
If jit
nitude,
would permit the
markets to know what
markets
In ah
could
it
idea of the mag¬
adjust themselves
the
speculators have just had a
I am'not suggesting
eliminate or curtail our
high time.
that
we
relief program.
the
market for the goods
labor
But I think that
of
others.
why nothing less than
manship,
or at
this is, the sponsibility,
dfderly manner. Instead,
wheat
and
a
least
That
some
is
states¬
of
a sense
re¬
by each group in its
dealings with all others will give
us
fufl'productjon,
ket,
ample
ah
prosperity and
a
say
if the
various groups do
orcise
such
of
not
that
ex¬
stop if
we
have
a
WouSd Be Goed Thing
i0innnoUnnrl^whpnPfhPr
real desire
meeting
included:
Harry
W.
to hold prices. We can not go on
Beebe, Vice-President, Harriman
Ripley & Co., Inc.; Walter F. increasing the volume of dollars
available
without
suffering
inBlaine, partner, Goldman Sachs &
2°mmg one' and arrangementsv/erc>
when there for
no
systematic
,
Co."; William ft- Brent, syndicate
Manager, Eastman, Dillon & Co.;
George K. Coggeshall, Vice-Pres¬
ident,
Schoellkopf,
Hutton
&
Pomeroy, Inc.; James Coggeshall,
Jr., Vice-President, The First Bos¬
ton
creases
in prices unless we are to
utilizing
the few facilities for
communicationi and transportation
have absolute and thorough regu¬
lation. The American people have
that
indicated
they do not want such
regulation. How, then, are we to
stop the process of increasing our
supply of dollars?
Corporation, and Enos Curtin,
Vice-President, Blair & Co., Inc.
Reserve Board Should Amend
Jo M. French, syndicate Man¬
Policy
ager, Blyth & Co., Inc.; Herbert
What happens now is that the
S. Hall, partner, Morgan Stanley
Hanks sell their short term % of
& Co.; Paul F. Hay, W. C. Langley
1% Treasury certificates and use
& Co.; W. Fenton Johnston, part¬
the proceeds to buy higher inter¬
ner, Smith Barney & Co.; Joseph
H. King, President, Union Secu¬ est-bearing bonds. This could be
rities Corporation; James J. Lee, stopped by the Federal Reserve
Board's discontinuance of its pol¬
Assistant Secretary and Assistant
icy requiring the Federal Reserve
Treasurer, Lee Higginson Corpo¬
Banks to purchase from member
ration; Laurence M. Marks' of
banks government bonds offered
Laurence M. Marks & Co., and
by the member banks at the pre¬
Frederick L. Moore, partner, Kid¬
vailing market. This means that
der, Peabody & Co./V^'V*,,-r,
Richard M. Newall, of Dillon, any member bank—that is, speak¬
Read & Co.,Tnc.: Leonard D. New- ing generally, any local commer¬
cial
bank — can,
whenever it
borg, partner; Hallgarten & Co.;
Miller H. Pontious, syndicate Man¬ pleases, dump its short-term lowrate government obligations into
ager,
F. Eberstadt & Co. Inc.;
the Federal Reserve Bank and get
Rudolf Smutny, partner,, Salomon
the means of buying for its own
Bros. & Hutzler; Percy M. Stewart,
...
were
at hand?
'Prices''in the
early days could not at best have
been
other
guesses
than
the
those
of
is
some
and
j
tiroes
early
of
governments
in
facilities
were
ing to true commercial standards."
May
Mayor,
we
ulative
transactions
also
that in
the ex1896, Germany,
without trying to abolish alto¬
gether organized
Exchanges,
placed such severe curbs on spec¬
remind
that
latures
similar
have
considered
action,
but
never
this method of further
Bolton With Crouse Co.
(Special to The Financial Chronicle)
the
increasing ganized
already inflated money sup*
ply of this country?
■
i
•
,
a
Exchanges
do
business to hold the price front or
E. Roy has been
lightened
change. ' Mr. Bolton
declare
of J. Vander Moere &
gram
is on prices—let
the public
like.
:
fair
as
we
would
was
formerly
with McDonald-Moore & Co.
Fiscal policies Cause High Prices
why
that concentration of
business is the
reason
serve
With J. Vander Moere Co.
members of the Detroit Stock Ex¬
as
not
..
neither of these is apt to be as en¬
or
it
useful and necessary purpose.
high government officials call
the effects of its pro¬
has
proposed by the niost rabid
politician to outlaw or abolish or¬
ganized Exchanges either in the
Crouse & Co., Penobscot Building,
know what
.taking
been
It is difficult to understand
American public
eco¬
collapse threatened that na¬
tion, so the stringent law was soon
repealed. During the past hundred
years, Congress and State Legis¬
DETROIT, MICH.—Frederick J.
the
an
nomic
Bolton has become associated with
letting
i-
in
fixing prices, as
lacking for
scientifically fixing them accord¬
line
in tfie' interest of honesty, the ad¬ bility the renlless force of events
the
Government will. Aqd
ministration has a responsibility or
for
not
were
then, for the fiats
excuse,
decrees
responsi¬
sense
haphazard
who
experts and who had every facil¬
ity for taking advantage of the
weaker commercial units.
Then*
portfolio, that is for its own in¬
terest earnings, other bonds, gov¬ field of commodities cr securities
Thomas, > partner, Lehman Broth¬ ernment, State, municipal or cor¬ transactions.
Neither the Grain
ers.
porate. Even if this was a good Futures Act of 1922, which regu¬
The Fund's 10th Annual Cam¬ policy during the war, ■■■ whatf can lates
commodity, trading, nor the
now be said for its continuance in
paign will continue through May the face of the
simple fact that it Securities Exchange Act of 1934,
which
has
been
designated
as enables,
encourages and almost regulating Stock Exchanges, have
"Greater New York Fund Month." compels the banks to. make use of the least suggestion that such or¬
Kuhn, Loeb & Co., and Joseph A.
reasonable
security. It is needless to
a
mar¬
a
on
big
(Special to The Financial Chronicle)
*c»
GRAND
RAPIDS, MICH.—Paul
for the in¬ i National Bank
added to the staff
Co., Peoples
Building.
46
(Continued
/
from
page
(Continued
5)
through the repatriation of
and interest incurred
much of the $5V2 bil¬
lion that was retired.
.
from
in
interlaced power restricted
apparently
And
way.
any
of
some
them have heard of the old farm¬
record in these overall aggregate terms gives the
ing practice of starting a backfire
advantage of avoiding misleading favorable interpretations through to
put out a threatening confla¬
failure to realize that the repayment of many maturing obligations
gration. At least that is what they
was
feasible only through applying thereto the proceeds derived
appear
to be trying when, to
from the successive flotation of new issues to the same borrower
dodge their richly earned label
In other words, a sort of Ponzi technique of endless chain refunding
of the great monopolists*.of our
It is thought that the SEC has initiated studies into these facts. In
times, they dig up the old charge
that substantiatable
the relevant
once
'
compiling
should forthwith set about
the Government
official data, so
and for all be deduced.
event
oriy
conclusions can for
Circuitous
Repayment
■
,,
-
,,
conviction that even
President McCloy firmly
the thus-restricted countries can
non-restricted
McCloy
payments to us, by remitting circuitously through
neighbors with whom they are on free-transfer terms. Mr.
has committed himself to the doctrine that comparatively
small
amounts of credits from the Bank, added to this process, will act
a catalyst in accelerating, crescendo, the general flow of trade.
He is thus adopting the pump-priming theory on a broader inter¬
as
national scale.
The
Prospects for Private Investors
prone'to classify his Bank as an
activity of private capital, and not a governmental operation—a con¬
cept which is not at all clear—for purposes of this discussion let us
now
consider separately the potentialities bound up with strictly
private investors. Here again no less careful an expert than James
W. AngeJ.1, who recently saw first-hand technical service on the
Allied Reparations Committee i^Germfmy, and has been a consultant
to the Government in United iREaticrfb functions, publicly outlined
some amazingly extravagant expectations at an Academy of Political
While Mr.
w-«s**e
A Dishonest Report
techniques of restriction,
make
"
today is
monopoly.
FTC
wouldhave
charge
shown
been
at once as sheer non¬
up
sense.
•
Let
state these facts in an¬
me
If we put the record
in the form of a chart, it would
need to be about the height of a
other
McCloy has been
charge?^All
Who is making this
way.
building. On such a
the total number of busi¬
would rise from the
four-story
chart;
the
is
left-wingers, of course. That
be expected.
And - if the
to
charge
limited
were
group we could
But others have
chorus.
made
and
be a
zig-zag line showing
mergers
and acquisitions dur¬
would
all
joined
the
in
an
—
agency
Commission—in
of
Federal
the
a
special
report to Congress. And I have no
hesitancy in branding this report
as one of the most misleading, dis¬
and—in its inferences—
presentations ever of¬
fered to the American people.
Now
the FTC says that it does
intend
"not
suggest or imply"
comparatively few
that these
gers
to
shout—throughout
when
an
tactics
as
But
organization uses such
the FTC does in this
report, it is time for those of us
who speak for business to meet
the challenge, and meet it head-on.
Now let me tell you something
about this report.
Let me give
mer¬
and acquisitions were illegal.
it does suggest, imply—and
But
language.
pages
the
whole
23
of this report that this gne-
tenth of 1%
tration
is "increased concen¬
economic power,"
of
it threatens
that
the "disappearance" of
"independent, competitive firms."
FTC's Case Is
week.
all
me
:;v.
poses.
say
possible
business
mergers
^:^
■
,•
The
want
with
by
which
truths—half-truths
misleading than
half
are
more
outright falsehoods.
Practical Results 1
The
...
Heading the FTC's list of com¬
panies which acquired the assets
of others in the
the
is
American
Corn.
It
in
past
the
seven
companies
years.
Let's look at the
this case.
of
-
past seven years
Home Products-
acquired 88
Was that bad?
details
Poppycock
■
-
>
Twenty
time
may come when it is
Waiying aside all the portentous political
unwise and even unsafe to raise
obstructions, even in the face of the concurrent abortive Moscow
doubts as to the truthfulness of
Conference proceedings, Dr. Angell calculates that $30-35 billion of you some of my reasons for blast¬
a bureaucratic document. But that
additional foreign investment, in addition to relief operations, will ing it with all I've got.
time has not #et arrived—thank
This document was labeled as
be needed during the coming decade, of which $20-25 billion is to
God!
So again I say without res¬
come from the United States, the major portion from private inves¬
"special report" to Congress.
ervation that the
FTC's whole
tors. Furthermore he very definitely concludes that credits even in One would
think that in these
case on concentration of economic
such large aggregates can be repaid.
ircumstances, Congress would be
power
is
pure,
unadulterated
We are certain that Professor Angell will understand the exist¬ the first to get the report, or at
1
he least, v/oufd receive copies at poppycock.
ence of skepticism in the minds of the relatively inexpert public, and
Even if the slight postwar stepwhat is even more significant, doubts governing the pocketbooks of the same time that the press was
But in this up& in mergers and acquisitions
his potential investors. Even waiving aside arbitrarily the inescap¬ given its contents.
able implications in the East-West political impasse, let us take a case the report was given to the continued--although actually the
last two quarters of FTC's own
look at the potential trend of trade. The Geneva Conference, accord¬ press in manuscript form and it
point sharply down—and
was
not for many days that the chart
ing to the London "Economist," is merely a "horse trading" perform¬
report was printed and thus made even if new concerns added to the
ance, in which 17 nations are bargaining for the amount of subsidy
ranks
of industry did not out¬
the United States will give in return for getting international trade available to the members of Con¬
number mergers and acquisitions
gress.
on a non-discriminatory plane—again calling on us to pay the piper
combined by 45 to 1, it would take
in order to call a tune which is a legitimate one.
FTC's Improper Release
1,000"years to monopolize indus¬
The effect of this maneuver is try.
That is the overall picture.
;;
Political Interferences
There are of course general inferences from our historical anti- obvious. By giving the report first If we take specific industries,
to selected members of the press such asi textiles and apparel, which
colonial, and previous debtor status which mitigate against our
stand high on the FTC * list of
whole-hog assumption of the foreign-lending role. At any time large- —and by having no copies avail-,
scale foreign lending cannot be engaged in under the same cold¬ able for other persons—the full alleged culprits, we find it would
blooded risk-appraisal standards that are used in dealing with the force of the blast against business take, not one, but 2,00V years to
business borrower at home. But this differentiation is now greatly could be carried in the papers, monopolize these particular in"
accentuated
even
further by the prevalent secular increase of and no one could answer it soon diistfies.'rV:f
^ In the face of these facts, what
popular prejudice against, and lack of sympathy with, the rights to enough to do any goo&c v. >.a
I
can't believe this delay in in the name of common sense, is
protection of the private investor. In line therewith is the unclear
copies available to all the FTC so excited about? Whose
incidence of political elements. For example, in Asia not only will making
I interest is it trying to protect?
lending be affirmatively instigated by political motives to a consider¬ concerned was an accident.
able extent, but conversely in China for example, the safety of such can't believe it because this prac¬ Certainly it can't be the public's
tice has happened too frequently interest. No evidence is cited in
loans which are made for any reason, will be negligible in the
Science session last
let
frankly—and
emphasis—that
are leading
to monopoly in this country today,
business
itself has the
greatest
stake in stopping this trend.
But
the fact is that nothing of the
sort is happening.- What is hap¬
pening is the old, old story of
bureaucrats
highly coloring an
anemic story for propaganda pur¬
if
I
torted,
strong
Now
with
years.
dishonest
That Is
prac¬
a
anything in the statistical
be.
f. •
can
to cite some names and
And the topmost
cases.
I want to do this because, ';
zig between 1940 and 1945 would
we
in
business •; come
be only a few inches from the unless
floor, and less than half as high through with the simple facts,'
bureaucracy will continue to get
as the top zag of the 1920's.
well ignore it. ing these
officially by
Trade
one
The charge has now been
Government
the
to this
fourth floor between
1047. Down along the
baseboard of the first floor there
1900
It is just about as shoddv
tice as
field
third to the
<
.t
Replying to this writer's query as to the definitive injury to
monetary solvency arising from a continuation of bilat¬
reiterated the
with
firms
total
the
ness concerns
international*
eralism and other
that it is business which
overrun
yer year of providing a
statistical'basis for
In operation. in appraising the importance of these
manufacturing and mining—which mergers? They are not. Such an
happens to be a fact—the whole omission is absolutely inexcusable.
than one-tenth of 1 %
5)
page
Calculating the
*
Monopoly Really Lie ?
Where Does
Observations
Thursday, April 24, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2238)
years
ago,
about a
small drug concerns and
dozen
laboratories
formed
this, holding
improve distribu¬
lower costs. Other com-
corporation
tion and
to
>
in.
Growth was
except in 1932 and '33.
Both
old
arrf
new
companies
found
that the
setup increased
their sales.
Acquired companies
did not "disappear."
They flour-*
panies
steady
came
ished.
through acquisition
about one third
as large as other capital expendi¬
tures in the period for which data
is available. And, according to a
recent prospectus of the company,
all of the net fixed
assets ac¬
Expansion
of assets was only
quired in five years were less
than $3 million.
Yet this is the,
*
>
it has become too much of a the FTC report to show that any
guarantees or other safeguards.
pattern to pass off as mere hap¬ damage whatsoever has resulted
And besides there is the additional factor to be considered of
penstance. And in this particular to consumers.
delineation of the relationship between concurrent publicly and
instance I am bolstered in my sus¬
Is it small business that has the
privately-extended credits. Where will private lending end and
picion by the fact that as long ago FTC worried? Well, small busi¬
government lending-subsidization begin, and to what extent will the
as
last
December—(the report
ness is frequently mentioned, and
latter feed the former? Chairman Martin of the Export-Import Bank
was
released
to
the
press
on
the Commission seems to be in
reports to the Congress the thoroughly commendable record of his
March
11)
the
left-wing press
institution's 13-year record of having accumulated a Reserve of $52
quite a stew because in the ma¬
knew, not only that this report
million after having met all its operating expenses arid losses. But
jority of instances the purchasing
was being prepared, but also what
firm
had more assets than the
it still is indeterminable, as to fact or degree, whether this has been
it was going to try to prove.
made possible by concurrent indirect subsidies and grants from other
company purchased. *But the evi¬
So much for background. Now
dence shows that it couldn't be
sources.
et's turn to the report itself;
the
particular small businesses
\v
Specific Obstacles t ; K
1
The gist of the report is to the
which had been acquired that the
There are various other dangers of a more specific nature to our effect that there is a
loophole in
FTC is disturbed about. They are
permanently conducting the continuing healthy international trad^on the anti-trust laws. This alleged
doing all right. Many of them are
which the repayment of credits must be predicated. A decline from
oophole is the fact that the FTC
still operating under their origi¬
our present extraordinarily inflated(?) domestic postwar boom of ac¬
is not authorized to prevent one
nal names and managements. And
tivity, witha consequent decrease in our utilization ofImports,Would company from buying the assets
lead to a boom-and-bust cycle in our international trade.
Again, of another. Largely through this those which I have any way of
checking on are doing better than
and of particular importance to our prospective private investors is so-called
loophole
some
1,800
before. Furthermore, there is no
not only our country's increasing independence of foreigners' raw
manufacturing and mining com¬
evidence whatsoever that the pre¬
materials, but the radical changes in both our national and individual
absence of political
;
-
customers
arising
the tremendous recent progress in "syn¬
from
thetics" and other new products.
:
the
panies have been purchased since
1940.
/ - V > \ '"v '
■
:
Distortion Charged.
political factors in their internal as well as
The
visible
could
international incidence. Various kinds of difficulties surelv are
interfering with the successful consummations of private investors'
deals with those countries which are socialized, nationalized, or
communized—both statically and dynamically. In short, there is no
as
kind and
in lieu of
of credit-extension by indi¬
resulting headline which
read
"1,800
Companies
Up," sounds like a
pretty serious situation. Of course,
if, instead of giving merely the
gamble, when applied to the process
that such mergers have been run¬
'
1
event, in view of the confused and conflicting "public
regarding the various ramifications of our prospective
efforts to behave as a responsible creditor nation, it would be most
constructive for the public to be afforded a clear-cut concept as to
whether or not the World Bank is going to function in a hard-boiled
100% business manner; and an understanding of at least the quanti¬
tative factors involved in thef balance of payments progess. * In any
concepts
Small Business
seven
the' FTC
years,
had
said
ning at an average of less than
250
a
year,
the story wouldn't
have probably been lost in the
financial pages. But that wouldn't
have
if
it
oast
served
had
seven
mergers
FTC's purpose. And
said that for the
been
years
had
the numbers of
amounted
to
Not the Real
Concern
Swallowed
total number of mergers for these
.
cerns
advantage.
Sign of definitive cessation of the instability of every
description which makes a travesty of the word investment
viduals.
these merged con¬
failed to sell their assets to
vious owners of
Nor could
it be small business
general that the FTC is work¬
ing itself into a lather about. For
every firm acquired in the past
seven
years, 45 new companies
have been added to the total.
in
Here is
another point:
'<
From internal evidence, we may
be
sure
that those who
prepared
monopoly exhibit "A."
FTC's
Among the companies listed
needed
One
•
the firm's
as
more
ignored. This top company in the
FTC's, list of "acquisitive" firms
It consists of
prices down.
kept
small
which
concerns
list
FTC's
the
their
of acquiring com¬
what they term "Pri¬
mary Metals," is Dresser Indus¬
tries, Inc. Actually Dresser is not
in the field of primary metals. It
panies
owns
m
no
mines
or
smelters.
It is,
and coming competitor to
larger concerns in the field of oil
machinery and supplies. If it is a
an
up
monopoly, then baked beans are'
a monopoly.
'
at.
•
The fact-is that all of
tire
sub¬
sidiaries of the Dresser group are,
independently operated, and each
has been allowed to retain its own
'*
management.
Another Example
One
final
example:'
'
'!
The
FTC
to town on the situation in.
the field of heavy steel drums. A
goes
casual
of
us
reader
(and
I think most
read casually unless we see
in print), might as
that the whole .» steel
industry is being monopolized af¬
ter
skimming throughr this I ire¬
markable report. The fact is-that
all steel barrels, drums and ship¬
own names
our
well suppose
ping pails—light, heavy, and
me¬
dium—amount to only 1 \'z %■ of, all
the
fabricated
steel
shipped in
this
country. >? ■ »: ':
: -, rv,r
< r
Furthermore, while new wooden
barrels have increased in price
from $2.75 to between $6 and $8
in the past 10 years, and fiber
containers
have
gone
of; .iassets
drums has gone up
less quired. But are they given, thus
kept
identity but joined forces to re-;
duce cost and increase output.
Here is another case: Topping
in
of
headquarters.®
point which the FTC
the FTC's report knew
the amount
the companies ac-
by
FTC, as "mergers and acquisi¬
tions," one was an office building
the
price,
the price
of
up
sharply
new
steel
only 25 cents
since 1937. The list price of new-
'Volume
THE COMMERCIAL; & FINANCIAL CHRONICLE
Numbet 4588
165
-jl.
(2239)
•.
;i
A
drums is $3.25.
smearing of business constitutes ^the system-changers in the temple
today sell-- the greatest single element of un¬ of government.;;- • >.
I
•
h
'■4f-Ifig for as high as $6. - Does that certainty- which ^ is preventing d Gentlemen—only you can lift
business from going ahead with the stifling fog of untruths from
sound as if steel-drum manufac¬
turers were out to monopolize the greater
momentum
to
achieve business—giving
the
full
facts
V
Used drums of the
specifications
same
are
about free enterprise to the
or victimize the public? * even higher standards of living
peo¬
Again I ask what is the FTC up and security for the a American ple is our only hope to free Amer¬
ica from the curse of these leftist
.to?
It says that the 62 largest people.
I;
.
...
•
} companies in this country have p. Now is the time to clean but bureaucrats.
'industry
-
-
.
.
enough net working capital to buy
'.the assets of 90% of all manufac-*
turing corporations in the United
what?
The Recon-j;
struction Finance Corporation has
enough billions to buy out 96% of
States./'a So
,
.
.
.
all manufacturers.
.
.
-
Gentlemen, it is not
pleasant
task to have to face such things
a
this report of the Federal Trade
Commission.
And it is pretty dis¬
couraging to be forced to recog¬
nize that the Federal Trade Com-
port
this.
as
us
employment
such is the fact, and all of
had better wake up and realize
Commission,
this report shows
as
beyond a shadow of
doubt, has
a
'
fallen under the influence
of the
We
/
this that the individual
members
j of the Commission have
gone col'Teetivist. We all know that is not
But what I do
true.
mean
is that
*
this report shows
clearly that the
Commission is now being influ¬
.
enced
by the ideology of the col-
lectivists.
>
.
what that
you,
can
Federal
Trade
gen-
to
With
mean
of this country.
future
the
to tell
need
tlement,
the
,
Commission
the domination of business
under
'
baiters, not
business
a
concern
in
this country
is safe from attack.
Only the exposure to the truth
these
of
borers-from-within
will
uproot them in government.
No
one
a
gooders, the make-over boys, and
planners in govern-
the economic
recession
careers out of
jumping on business.
In the early years they decried
the
great capacity of industry,
which later was to prove the godsend of victory in war.
Then they sent up a howl that
reconversion from
war
would pro¬
duce 10 million
unemployed. And,
of course, only they knew the answer.
How private enterprise ab¬
sorbed our returning soldiers and
went on to the highest employ¬
ment in our history is a matter
.
•
of record.
The
that
their
American
same
was
economy
"mature" and done for in
gibberish 15
years ago
turned
out to. be the arsenal of universal
freedom, the jack-pot of lendlease, the source of war billions in
taxes, the hope of world resusci¬
,
,
tation.
yet these yelping bureauescaped the people's
purge of last November are still
crats
.
ture
from
economically suc¬
cessful pattern; preachments that
amount to nothing more than economic heresy and betrayal of our
'
*
fc
would
plainly evident, it
were
then
be
late for cor¬
too
*•
reduction.
the
effect
that
fluence of
a
for the in¬
cut to be gener¬
tax
follows
it
not
nues
or
that
expected until the spring
early summer of 1948. Now it
lay
be
true
that
similar de¬
a
in
the effects of a tax cut
would be experienced, if the cut
to be deferred until
were
the
started
recession.
had
we
We
know
experience that many things
wrong in even one year
recession
or
depression.
It
be another
case
the
3.
reduction
Debt
than
satirical
the
about
the
Administration
present
public debt in view of
record.
But, seriously, we
concede that the debt is
of
grave
rush
the
may
determination to
a
avoid
In
we
urging
not
are
levels
is
of
next
of
At
the
•
f
:
individuals
is
not provide
individuals
fur¬
cuts
voted
can
the
be
;
just
ii
absorbed
was
the
tax
25%
the
as
a
of
rests
on a
revision
of
infla¬
misunderstanding of the
Comparison of Surtax Rates, Acts of 1918 and 1936
Surtax
Act of 1918
Bracket (000)
Act of
Total Surtax
3%
$
6%
110
13%
of the
38
-
40
18%
3,410
24%
48
-
50
23%
58
-
60
28%
68
-
70
33%
5,510
8,110
11,210
27%
the way of life
nation great.
78
-
80
38%
14,810
47%
88
-
90
43%
$
19%.
51%
that has made this
Let's be alert this
time' to the old familiar pattern
of
smear,
innuendo and plain
isolated incident
98
-
100
48%
150
-
200
56%
35%
43%
18,910
23,510
77,510
Let's realize that this
of
a
business, iback
new
55%
in
the
doghouse;
part of a- campaign to revive the
ancient, creaking canard that inI dustrial
bigness is synonymous
monopoly; part of
a
desire
65% above $1,000,000
Top rate
drive to put
Normal
tax
rates:
Income
beholden
obligation
maximum
nomic scandalizing.
eco¬
This constant
year
Notes
lower throughout than the
and
.60%
75% above $5,000,1
on
Table
normal
rate
for
1919-21
to
the
1918
surtax,
the total is
1936 surtax plus normal tax.
(2) The difference of $500 in the exemption for married persons
would
make
brackets.
a
small
difference
r.r--'-v -{ "c.v:
■
,
•
great
a
of the public debt points out that
at present our total
purchasing
is
quarters
equal
of
to
the
about
three-
national
income,
against only about half of the
mUch
smaller
national income
of
' :
the 1920's.
in
-
tax,
particularly in the lower
have
more
been made
working^
.
reasonable
to
banks. And the high taxes
responsible for the shortage
available investment funds in
the hands of
individuals..
are
Summary; % %
of
process
inflation,
which means to redeem the bankheld debt. '
'
\
!
When
■,; ■;
■
We believe that there should
be
tax reduction for
a
individuals, in
the
amount
vided
that
by H. R. 1
would
be
pro¬
as
amended, and
distributed among all taxpayers
as therein
provided, (1) Because
will
make*
the
is
of
with prewar experience is to
verse
It
necessary
a
greater volume of business loans
tional
re¬
secure
that' the
from
study states, further, that
only effective way of restor¬
ing prices to levels more in line
the
to
capital.
assume
-
lack of funds in the hands of
in¬
dividuals
made
it
This
contribute
support
be
to
the
future
of
employment and na¬
income; (2) 'Because it will
possible
to
do
this
and
yet
substantial
a
payment on
debt, and because the tax cut
the
is
our best assurance that
we can
continue to reduce the debt in the
we
look at the official
future; (3) Because this reduction
budgets for 1947 and 1948, do we will be an
anti-inflationary move.
find evidence of a
plan to combat (a)By promoting saving, invest¬
inflation by keeping taxes high ment, hence
greater production;
and
making
large
against the bank-held
course
payments
debt?
do not. When the
we
Of
budget surplus for 1948, assuming
retention of the war excise rates
and
an
was
not
increase
deficit
of
postal
sufficient
which
to
the
(b) By lessening the pressure
business to seek bank credit.
on
1947
fiscal program was formulated, a
deficit
was
expected.
And
the
rates
offset
the
budget
pro¬
jected for 1947.
Since there has beep no provi¬
Norway Bonds Placed
On Market At 98Y2
An underwriting
•„
group headed
jointly
by Kuhn, Loeb & Co.,
Harriman Ripley &
Co., Inc., Lazard
Freres
&
Co.
and
Smith,
Barney & Co. is offering publicly
today a new issue of $10,000,000
budget programs for 1947
and 1948, it follows that the re¬ Kingdom of
Norway 10-year 3%%
tention
of
the
high tax rates Sinking
Fund
External
Loan
during these years would have Bonds, due April 1, 1957, at 98%
sion for debt reduction in the of¬
ficial
had
effect at all
no
the infla¬
on
and
accrued
interest.
Harriman
tionary
situation.
Taxing
and
spending is simply a transfer pro¬
cess. If taxes are high the
people
Ripley is managing the books for
less while the government
postwar public sale in the United
States of bonds of an
spends
more.
chasing
power
cept
when
The
total
of
pur¬
is not affected
of
ex¬
the
taken in taxes is used to
redeem
the
some
bank-held debt.
The transfer character of
and
spending
conclude
be
lead
may
that
we
indifferent
to
to
the
amount.
They would argue that a large
budget is no more harmful than
moderate
a
is
far
one.
Such,
the
case.
from
the
motives
offering
however,
Under
a
and
incen¬
^
marks
the
first
European
country.
Proceeds
new
way
from
the
sale
of
the
bonds will be used by Nor¬
to increase its United States
dollar
exchange
to
afford
can
as
taxing
some
underwriters;;
The
money
reserves.
The
bonds, which will be direct
obligations of the Kingdom, will
be redeemable at the
issuer's op¬
at least 30 days' pub¬
notice, as follows: to and
including April 1, 1949 at 101 V2%;
thereafter to and-including April
tion,
upon
lished
1,
1951
and
at 101%%; thereafter to '
including April 1,* 1953 at-
amounts for investment out of the
101%; thereafter to and including
April
1,
1955 at
100%%; and
thereafter at 100%; in each case
plus accrued interest. They also
incomes
will be redeemable at
par for the
tives to get income are
weakened.
impossible
to
definitely
it becomes
adequate
Further,
save
from
which
a
margin
consumption -requirements
would
be
count,
available.
therefore,
low
better for the economy
taxes.
On
every
taxes
are
than high
Granted that the actual outlook
for 1947 and 1948 is different than
presented in the budgets, the
change is fortuitous. It was not
planned or anticipated
in
the
estimates.
budget
The
Adminis¬
sinking fund, which is
to
retire
to
maturity.
34%
it
as
say
inflation
an
control.
,,
T
further and
that the program of high tax
rates
fact,
on
we may go
those incomes from which
substantial
savings
would ; be
made, except for the taxes, and of
large spending through payment
of
salaries
in
low
and
income
benefits
to
groups
for
not
was
tax
Dec.
31,
on
Also, there
1946, loans of the com¬
expanded by $7.6
banks
inflationary
government
in
bank
are
limi¬
outstanding: ins U. S. dollar bonds,
which is one-half the peak of the
direct dollar indebtedness of the
Kingdom reached in 1928.
Joins Merrill Lynch Staff
(Special to The Financial Chronicle)
SAN
Robert
FRANCISCO,
filiated with Merrill
Fenner &
Lynch, Pierce,
Beane, 301 Montgomery
♦
.
At Keenan &
^
CALIF.*—
D. Gibson has become af¬
*
."
Clearey, Inc.
(Special to The Financial Chronicle)
SAN
erick
MARINO, CALIF.—Fred¬
B.
Stubbs
is
with
Keenan
as
respect as
loans. > These
every
were
000,000 ; kroner, or about $100,000,000 at the current official rate
of exchange. About
$60,000,000 is
Street.
billion. Private bank loans
certain
payments to enemy in¬
of private bank loans
also be cited as an inflation¬
tendency fostered by the high
rates. From June 30, 1945 to
mercial
to make
The direct external funded debt
of the Kingdom at the end of 1946
amounted to approximately $500,-
con¬
expansion.
ary
able
those
chasing from saving to consump¬
tion, and in a time of shortages,
tends to force prices
up
while
it curtails the funds for capital
may
amor¬
terests.
sumption purposes, is inflationary.
It is a process of transferring pur¬
rise
prior
*
payments to holders of its secu¬
rities- in countries occupied by
tations
In
calculated
bonds
obliga¬
tions except that, during the
war,
Germany 1
all
the
the payment of interest and
tization upon its external
tration has not yet admitted that
should lead to differ¬
ent premises as to tax policy, nor
has it been recognized that high
taxes
merely
to
support high
spending would have no effect at
of
At no time in the
past has the
Kingdom of Norway defaulted in
the change
The
(1) If we add to the 1918 surtax rates the highest normal tax
rate, the total rate is higher in. some brackets than the 1936* rate
plus normal tax, and lower in other brackets. When we add the
then for business to delineate the
truth to the public, so that the
righteous indignation
out the traffickers in
300
1,260
3,000
5,120
7,700
10,960
14,860
19,400
24,500
30,000
89,000
1918, 6% on 1st $4,000; 12% on
remainder; income years 1919-21, 4% on 1st $4,000; 8% on remainder;
Exemptions: 1918-21, $2,000, $1,000, $400; 1936-39, $2,500, $1,000,
$400.
•
to remake America in some for¬
the
1936
Total Surtax
890
clean
of
tionary tendencies. This argument
leeway, under the expenditure
1,810
in
cut
combatting
9%
an
had
was
means
13%
up
for¬
4. We must keep taxes high now
there
20
is
and
1924.
ceiling which is likely to be set
people of this country will rise
j
In
the
as
30
It
will
1924, applicable to 1923 incomes,
-
eign image.
'
have.
absorbed
-
with
It
percentage
should
stage,
18
report is not
'
now.
loans
■
borrowing that occurred in fi¬
nancing the war. A recent study
above
next
•
-
so
all of the relief that
28
part
is
even
conclusive
but
principal
intelligently dealt with later,
if the proposed tax cut for
be
attack for
falsehood;
We have
sult that
present
income,
Indeed, it
taxation
ranks of those who would destroy
'
circulation.
increase of purchasing power be¬
cause of the large amount of bank
large budget the heavy taxes cut
deeply into incomes, with the re¬
gotten,
national
Each
year.
Federal
this
evidence of the reforming
purchasing power, either
deposits or as money in
bank
the other parts of the job cannot
tax reduction now,
suggesting that this
reduction.
debt
a
omnibus revision. In any case,
there is no reason to suppose that
ther increase.
8-10
is—the
ditional
as
one
unloading,
because
the
people generally have faith in the
stability of the debt and of the
values which it represents. The
task of future debt management
is to preserve and strengthen th„s
faith. To do this requires evidence
of an intention to redeem it, and
of
simply
series of tax revisions rather than
matter
for
or
the
large and complicated as to sug»gest that we are likely to have a
There is
redemption,
for
is
area
to all.
concern
general
no
a
job
over
the
until
wait
is doubtful if it will do the whole
of
concern
should
tax structure this year;
tax reduction. It would be easy to
be
economic
stall, which is
intended to postpone action in¬
definitely. It is clear that the Con¬
gress
cannot review the entire
prevent
rather
of
our
recognize
it
cause
inflation is the expansion of bank
credit. The expansion creates ad¬
spend
We
This
theft.
2.
level
a
whole tax system can be revised.
of locking
the barn door too late to
the nation's capac¬
on
activity.
go
would
of
activity
will make such a revenue surplus
possible. And tax reduction is an
essential step in the maintenance
of
the
high
level
prosperity.
Hence, we can do more over the
years to reduce the debt by re¬
ducing taxes now than we can by
keeping them so high as to im¬
pair
the
economic
incentives
which underlie vigorous business
be
would
further,
surplus of reve¬
for the purpose. A sustained
high
amended may
as
contend,
assurance
ity to provide
the full results of the tax cut pro¬
posed in H. R. 1
some
the
ment rests
ally felt. Mr, Snyder said that it
would probably be about a year.
Accepting this estimate of the
time lag between legislative ac¬
tion
and
the
operation of the
effects
We
best
considerable
a
time will be required
If
at
first
Let's
what
The basic
as
that the
holding to a
regular policy of debt payment,
year by year, will be provided by
tax reduction. The logic Of this
view is very simple. Debt pay¬
before the Ways and Means
Committee, including Mr. Snyder,
to
Heals.
American
•
./
who
throwing monkey-wrenches into
the economy by preaching depar¬
]
arguc
forecast accurately
can
1948.
be; set
action be taken at the expense of
And
!
debt
re-
$41.5 billion
spending ceiling
$32 y|
billion, - there
would be a margin of $9Y4 billion
for these two purposes together.
Assuming that the revenue loss
under.; the pending tax Mil to be
$3.8 billion, or even as much'as
$4 billion, there would be at least
$5 billion for debt retirement.
in
rective action through tax revi¬
sion. We share the view of wit¬
; ment have made
'
.
a
were
can
half the do-
and
no levels points to
recession may occur. If we
td Wait until the fact of
when
of
decade and
a
duction
from
The Do-Gooding Career
For
follows:
as
beneficial
I don't
V -vV.
of what we call
•
power
by the Congress, for both tax
;.v~w
of
line
this
answer
nesses
left-wingers and of the anti-business crusaders..
I don't mean by
business,
and
stimulas is needed.
ment
what faces us.' The Federal Trade
,
7)
page
they hold that it would have. no; ^projection of Federal > net
such effect now, and they add that
receipts under existing tax rates
under the present conditions of
and at current national income
FTC Has Joined "The Crusade"
But
from
time, they contend, the action
will stimulate business, whereas
mission would sponsor such a re¬
.
*■'
.
(Continued
-
•
that
-
'
as
The Case forfTax Reduction Now
and the correction of infla¬
cause
tion.
' 47
&
Clarey, Inc., National Building,
Minneapolis, Minn.i ;
■
J
>
'
FINANCIAL CHRONICLE
THE COMMERCIAL &
48
Thursday, April 24, 1947
(2240)
situation
praisal. Today the
Tomorrow's
Markets
Walter
quarter and potential buy¬
ers
shy away from it even
though it's selling in the low
30's.
This isn't a specific ex¬
Whyte
,
ample
==By WALTER WHYTE=
eral
much as it is a gen¬
as
one.
slightly
is
situation
The
trend reversal
a
the 1929-32
the market in
of
market. reminiscent
Monday's
in
seen
high as $2 for
the
Says—
Possibility of
out with
company can come
earnings of as
Buying public now selling era. Before
minded. Suggest waiting for those days could move up the
factors and the fervors that
additional developments.
Thefsingle important thing
happened since the pre¬
vious column was, written,
that
brought in such huge buying,
to
be liquidated.
The
same thing is true of the cur¬
rent market. VT^
had
Monday.
Actually
ing, a lot of it very confident
insignificant on the because "I own them outright
surface. It merely showed a
-they can't hurt me" type, is
one
day's market which now either
liquidated or in
opened up and stayed up all the process of being liqui¬
day. During the day the fluc¬ dated. The rush from money
seen
was
it
was
tuations
with
minor
were
brought about the wild
which
dullness being the rule rather
markets of last summer has
than the exception. What was
changed.
now
important about it is that the
market developed a quality,
The
Is Present Postwar Lending a
after
Company
reversed.
is
after
ments
all
This money was
drives
taxation
and
thorized
to
and
loaned
"In the aggregate, foreign lend¬
ing extended by the United States
to Europe and by European coun¬
"Various branches of the United
Government
States
made
-
pay¬
ments of cash to foreign Govern¬
then
to Governments
by Princeton University:
by these Governments.
of the prosecution of the war
and
which Governments were
ments,
enemies of indebted to the United States both
engaged in war with
the United States.
when those
loans and interest,
on
"Treasury Department officials payments should have been made
to the United States Treasury and
aware of the fact that they
no
authority to make such credited to the account of the
loans after hostilities had ceased. Government to which they were
The
buying isn't, and prob¬
ably won't be aggressive, for
to
ers
It is
time.
some
after
come
for buy¬
in with both feet
break
a
rare
have just
as we
high cost of liv¬
The
varied.
and
ing, high cost of goods and
services are all contributing
preferable today to either
had. But the fact that it ap¬
goods or equities. Just as the
peared at all. was of technical merchant is disturbed
by high
significance. In the past such cost inventories on his
often
action
points
a
It is likely
change in trend.
that the
to
situation exists
same
There's
for
switch
this
and' it
formance,
from
possible explana¬
a
public
a
in per^
the
is
so
in
In
red.
the
have "fear" sales.
is
Latter
psychology.
you
In the
sales.
bargain
other you
case
one
heightened by de¬
As
stems clining prices.
all
investor
concerned with securities now
have
today.
tion
shelves,
sells and
one group
depresses the mar¬
Last, summer "everything ket, another one seeing the
result also steps in, and so it
was going up," at least that
the
was
back you
look
the
popular belief. If
see
that
reached
All
has
point of satiety.
a
this
"Millions
States
money
Governments
due.
of
worth
dollars
of
United
loaned to foreign
were
sent directly
purchased
products
with
was
if it wasn't already here. day's market began to show
The only escape from it was evidences of trend change.
ner,
to
shift out of cash and into
In the
things.
stock
If
market, it
of the
case
Whether
not it is the start
of real upsurge
equities. tell.
was
or
What is
is too
more
soon
to
the American people for
the pur¬
pose of the prosecution of the war
against Germany found its way
into Germany with the sanction of
the Treasury Department of the
United States, while Germany was
yet our technical enemy.
to Influence
European
Political Situation
loans
"Numerous
Germany with our sanction. In
other words, money raised from
for the
"had
were
value of maybe $40. At and then sag
a
the general ap-
was
back to about
166-168. The chances
are
that
nothing worthwhile; of mar¬
ket
importance will happen
Pacific Coast
Established
V
1856
Securities
Orders Executed
on
"Forty-eight millions of dollars
people's Liberty
loan money was used for the pur¬
pose
of
sending
supplies into
Austria, which country was then
Department allowed
The Treasury
payment out of this fund of
interest
and
bonds
of foreign
Governments
held
by
private
the
loans
private
These
United
the
of
citizens
States.
were
given
preference over the United States
loans.
Members
Pacific Coast Exchanges
"Millions of dollars of this Lib¬
was
loaned to for¬
"Money
United
Governments
by
loaned
was
States
the
various
these
to
that
they could
it to the United States as
on loans already made.
repay
so
interest
Department con¬
tinued
making
these
loans
to
Governments supposed to be en¬
Schwabacher & Co,
•
basis. Thus the money raised from
the American people to prosecute
the
war was
used
by Great Britain
in
competition with American for¬
eign trade.
"One hundred thousand dollars
of America's Liberty loan money
was
used
for
expenses
of the
Russian
delegation
at
the
"Twenty-six thousand dollars of
America's Liberty loan money was
used
of the delegates
from Liberia to the peace confer¬
as
the
expenses
This
with
the
approval of
Secretary of the Treasury and
President.
fund
not
of
dollars
from
this
loaned to Governments
were
then
actually
Czechoslovakia
until it
New
New
was
in
existence.
not
nation
a
created
by the treaty
of peace of June, 1919. Serbia had
no parliamentary form of govern¬
was
ment during the time it received
loans from this
country.
"Moneys from
this
Board
of
Inc.
Trade
went
"The Treasury Department
'
New Orleans Cotton
(Associate)
New York 5, N. Y.
COrtlandt 7-4150
Teletype NY 1-928
Private Wires to
San
Francisco
Exchange
And other Exchanges
.
i
up
their
Monterey
—-
Santa Barbara
Oakland
—
■
because
the purchases
in the United States with
normal,
the
result
made
exclusively
Western
prices in the
war instead of
stability
eastern
Department ac¬
cepted demand obligations from
foreign Governments for all of the
loans they made when all of the
sections of the acts, authorizing
loans,
as
for obliga¬
tenor and effect
provide
tions of the same
the particular Liberty loan
obligations,
demand
and
by
raised. The
above
re¬
having no maturity date
interest-paying
ferred to,
definite
no
date, made it an easy matter for
the foreign Governments to defer
payment both of principal and
as the whole matter was
left in a very indefinite and un¬
the
interest,
the
entire corre¬
that any legal
opinion
asked in regard to, this
'
matter."
more
was
for the American
to countries in this
unwill¬
Central
area.
and Southeastern Europe
obtained
financial aid only after 1924.
"The
loans
the
the
with
twenties.
and the
post-war
affected by the settle¬
which
tiated
the
of
terms
were
ments
creditors
the
In
nego¬
in
debtors
United
the
States''
distinction what¬
no
made between
war
loans;
relief and reconstruction
cially regarded as commercial ob¬
ligations. In contrast, Great Brit¬
ain and France followed the pol¬
icy of treating these two sets of
obligations
separately;
in
the
French
phraseology
war
debts,
"political,' relief and recon¬
were
struction credits 'commercial'."
so-called
These
mental
inter-govern¬
credits"
"international
which had at the time essentially
motives
same
impel
along the
down
almost
broke
lilies
now
as
follow
to
nation
completely in the postwar depres¬
sion of the early '30's.
To all in¬
tents and purposes, they may becompletely written off the Treas¬
ury's books.
Whether the
outcome may
same
be
expected in the present Santa
Claus complex for foreign lending
of
can,
tured.
-
only be conjec¬
history sometimes re¬
course,
But
peats itself.
President Honors Hull
Without
making any advance
announcement, President;
Truman
on
April 16 drove to
Bethesda Naval Hospital to pin
public
the Medal for Merit with Oak Leaf
Cluster
on
Cordell Hull in recog¬
and
Repeated
Whether the conditions of for¬
TJntil then we will continue
eign lending were actually
to occupy the sidelines.
ducted as stated above or whether
*
;.0: *
the report was tinged with politi¬
during the war, Associated
Washington advices stated.
Press
The 75-year-old former Secretary
of State has been at the hospital
since suffering a light stroke: last
October.
Mr. Hull, who i? now
described to be appearing in good
health,
remained
seated
the brief ceremony.
Mr.
President,
I
during:
"Thank you,.
am
p ye r~
whelmed," he said after the. Presi¬
dent had pinned the medal in
From the Associated Press;
Washington accounts as given in:
place.
the New York "Herald
we
*
Urge to Lend
The
political
and South¬
clearly the
Ceneral
in
Europe
of
Europe.
nition of his public service before
"Throughout
was ever
Northern
ingness to grant long-term loans:
same
level.
Demand Obligations Accepted
these
the: countries
to
and
The lack of financial and
the
"The Treasury
.
"Then, as now, most of the for¬
eign lending was directed almost
the
prewar
postfunda¬
was
mentally unstable and unsound.
United States at a
a
the
that
armistice indebtedness
such loans kept the
showing
signs, now
heads, be¬
More next
!
Y.
Cotton
NEW
Exchange Bldg.
YORK
4, N. Y.
DETROIT
PITTSBURGH
Sacramento
Fresno
[The
article
CHICAGO
GFNEVA.
SWITZERLAND
Hme
views
do
coincide
Chronicle.
those
not
cal bias is not a matter
Thursday.
—Walter
N.
Principal Offices
—
the
con¬
•
with
returning to
from
States
departments i of this- Government
tinued making advances to for¬
requested an opinion from the
eign Governments while, at the Attorney General as to their au¬
same time, it was
holding consul- thority to continue making loans
for the purpose of the prosecution
for the next few weeks in of the war after all hostilities had
ceased. In fact there is no record
;
Chicago Board of Trade
14 Wall Street
prevented
Department
United
spondence between the State De¬
partment, the Treasury Depart¬
ment, the President, and various
Russia, namely, the Kerenski govforeign Governments, submitted
rnment, the Kolchak government, to the Committee, there is no rec¬
and the Wrangel government.
ord or mention that any of the
Stock Exchange
Francisco
loaned to
certain state.
fund
short-term
quote:
Tribune,T
-
"The President presented to Mr~;
the Medal for Merit with:
Hull
oakleaf
awards
torious
ance
cluster, signifying two»
'exceptionally meri¬
for
conduct' in the
perform¬
of civilian duties.
..
-
York Stock Exchange
York Curb Exchange
San
Exchange,
Commodity
;■
ury
credits, how¬
consisted almost exclusively
accommodations,
ever,
of
obtain pri¬
or
credits, both categories being offiir
money
which the money was
"Millions
numerous, you
"hall be advised
accordingly.
Exchange
the
could return to normal, the Treas¬
peace
conference. This with the approval
of the Treasury Department.
come
Cotton Exchange
York
Chicago
Members
Curb
York
New
New
.
of
foreign Governments was used to
erty loan money were loaned to make purchases in the United
Great Britain, after all hostilities
States. By continuing the making
had
ceased, for the purpose of of loans to foreign Governments
allowing her to build up her ex¬ after the armistice so that they
ooking
Exchange
with Germany.
"Most
return to normal
reserves
ever was
money
governments
vate credits. Private
settlements,
the
receiving
actually and technically at
"Millions of dollars of this Lib¬
port trade and
Inter¬
their gold and foreign
ernments
to Britain
Loans
10, 1920, when the
after January
were
States.
European
use
formal process verbal of ratifica¬
tion was deposited, and the Gov¬
peace
When the initial
:
Stock
York
New
the''United
result,
reason
"The Treasury
enemy.
any case.
H. Hentz & Co.
1945, this lending origin¬
in
exchange
made
the purpose of
from this fund for
approval of the Treasury
earned 50 cents happen is that the averages Department to the aid of three
whole year its stock will climb slowly to about 173 Separate de facto governments in
least that
in
ties
had to
increasing, our influence in the
European political situation at the
peace conference; not for the pur¬
pose of the prosecution of the war.
of the American
likely to
company
greater extent
than after the cesation of hostili¬
a
with the
a
even
an
six billion dol¬
in the second half of 1919 and, as
Loans
to
ence.
back to the
goes
was to get
and into stocks. opening paragraph where it
around the cor¬ was pointed out that Mon¬
out of money
Inflation
will
you
opinion
mass
the market
until
goes,
To
ran
or
ated
therefore
is
Cash
factors.
in 1919 and 1920
se
perhaps to five
lars.
Reserve
governmental credits ceased to be
available, with a few exceptions,
erty loan fund
Reasons for this are many
tries inter
Federal
were
get rid of their capital eign Governments and by them gaged in war with enemies of
even for one day, that showed
for something that wouldn't loaned to various relief and re¬ the United States for the purpose
an exhaustion of4 the selling
construction
organizations,
thus pf prosecution of the war after
while at the same time it depreciate during inflation,
circumventing the act of Congress. the peace treaty was signed and
are now hoarding their cash.
showed some
buying.
now
had
our
ed to
the
cellation of all debts as proposed
the pur¬
used for
be
pose
Relapse?
with
Bank of New York and published
au¬
was
and
parleys with foreign
Governments on a possible can¬
raised from the
by Liberty Loan
American people
people who want¬
same
tations
page 12)
hostilities ceased.
(Continued from
expressed
Whyte
in
necessarily at
with
They
those
of
was
any
more
presented
of the author only.] t \
are
to lend
this
the
as
however,
recall,
as
that "the urge"
our resources
great
requiring
is sufficient to
comment here. It
and
abroad then
possibly even
the present
recent study,
entitled "Postwar Foreign Lend¬
lavish
than
time. According
ing"
to
at
a
made by Miroslav»<A.. Kriz
"One of the citations called him
the 'father of the United Nations.'
"Signed by the President, it said
diplomacy not only
'a powerful weapon in support of
our armed strength' but 'a
potent
,
Mr. Hull made
instrument in laying the founda¬
tions of a
stable
and peaceful
world order in the postwar era,-
Sfolume 165
Number 4588
THE COMMERCIAL &
FINANCIAL CHRONICLE
Securities
•
Acme Electric
June
26
Corp., Cuba, N. Y.
results of competitive
bidding are known. Underwriters
be filed by amendment.
68,880 shares and
the proceeds from the sale of
63,860 shares.
also will receive proceeds from the sale of
Company
20,000 war-
cants for
common
stock to underwriters at
an
aggregate
Of the net proceeds ($292,940) $50,000
twill be used to pay current bank
loans; about $20,000
will be used for machinery and
equipment, and the
mainder for working capital.
;
Probable bidders include
ing.
—
total, 140,000 shares are
being sold by St. Regis Paper Co., New York, and the
remaining 40,000 shares are being sold by I. Rogosin*
President of Beaunit Mills, Inc.
ratio
of one additional share for
each two shares
Unsubscribed shares will be offered
for subscrip¬
tion to officers and directors of the
company.
Price—By
held.
.
amendment.
(letter of notification) 214,890 shares ($1 -par)
Being offered for subscription to stockholders
Proceeds—Working capital.
Berbiglia, Inc., Kansas City, Mo.
Sept.
Offering in¬
definitely postponed.
of record
Feb. 20 at $1 a share. Rights
expired 3 p.m.
(EST.) March 11. UnsubscribWLsffiates will be offered to
the public through
Greenfield, Lax & Co., Inc., New
reduction
working capital.
of
current
obligations
and
/
Arkansas
June
American
27
*
Broadcasting Co.,
filed
Inc., N. Y.
950,000 shares
corporation had network affiliation agreements on March
The remainder will be offered
publicly. Price
amendment. Proceeds—To
prepay notes payable to ac¬
quire radio station WX^Z, to construct broadcast trans¬
mitter for station KGO at San Francisco
and for working
capital. -•
II.
$6
—
a
of
—Heronymus & Co., Sheboygan, Wis., and Lon L. Grier
Co., Milwaukee, ?Wis. For new machinery and for
working capital,
S
fv
•; -
^
—Rauscher, Pierce & Co., Inc., Dallas,
Underwood & Co., Houston, Texas.
and
Milton R.
Price—Debentures
will be offered at 100 while
price of the preferred and
common stocks will be
supplied by amendment?. Pro^
ceeds—To pay >$712JHH)-balance on a bank
capital.
loan,^retire-'
$850,000 promissory notes, and provide working
'"
$■' American
;'
are
shares
for
Mich.
are
tion
use
stock"
mon
as
they
subscription
to
for
common
to
the
conclusion
group of about 50 persons who represented
a
distribution.
.
...
..
Inc., New York
March 31 filed
$2,030,400 4% subordinated income deben¬
tures due 1957 and stock
purchase warrants for shares
of
$1 par capital stock; also filed a maximum of 228,899
shares,of capital stock, reserved for stock
purchase war¬
rants from April, 1947
through March, 1957 at $9 through
$13.50 per share. Underwriting—None.
Offering—The
debentures and purchase warrants will be offered
to
stockholders
in units of $100 of debentures and one
stock purchase warrants at
$100 per unit.
Unsubscribed
units will be sold to American
Airlines Inc. at $i00.
Purpose—To repay loan from American
Airlines,
balance for general funds.
Inc.,
American Water Works Co.,
Inc., N. Y.
1946 filed 2,343,105 shs. of common (par
$5)
plus an additional number determinable
only after the
March 30,
Offering—Shares
are
Co.,
part of the 99,000
the selling stockholders.
go to
a
Blumenthal
(Sidney) & Co. Inc., New York
Aug. 30 filed 119,706 shares (no par) common and sub¬
scription warrants relating to 30,000 shares thereof.
Underwriting — None.
Proceeds
For reimbursement
—
of
company's treasury for funds expended in re¬
demption of, 3,907 shares of 7% cumulative preferred on
April 1, and for funds deposited in trust for redemption
on
Oct. 1 of remaining preferred shares.
proposed to
•
['.l
common
share. Proceeds, working capital.
Electric Co.
The First Boston
Corp., and Drexel &
(jointly); Shields & Co., and White, Weld & Co.
(jointly); Dillon, Read & Co., Inc., and Smith, Barney
& Co.
(jointly); Blyth & Co., Inc.; Union Securities
Corp. Price—To be determined by competitive bidding.
-V-'T.;
'.■-"'•I-
offer the
-Mar.
stock
share,
Motor
for
Although it was
subscription to stock¬
company on
Sept. 20 decided
yi
v'
/■
Bobbi
*
.
Car
•
Vi
^
'*•
v
'Vf
«
• */ •*
'>
*
Proceeds—The offering is part of American's
plan to
dispose of its holdings of 1,150,000 outstanding shares
of Atlantic City. The shares
remaining after the public
offering will be distributed as dividends on American's
stock. This dividend
policy will become effec¬
tive June 15 and will continue to the
end of 1948. Bids
common
—American
at
30
Gas
& Electric Co. invited bids
April 15,
Street, New York, for the purchase of
common
shares, but the sale has been post¬
.
>
Church
522,416
poned.
•
Automatic Icq Corp.,
Chicago
3
:
■4
■
SPECIALISTS IN
the stock
will
company.
For completion of display automobiles
under
be sold
by officers and directors of tfoe
new
construction.
>
Boston Store of Chicago, Inc.
Sept. 10 filed 30.000 shares ($50 par) 5% cumulative
preferred and 500,000 shares ($1 par) common.
Under¬
writers—Paul
Offering
—
H.
Davis
Preferred
&
will
Co.
and
have
Stroud
&
Co.,
non-detachable
Inc.
stock
purchase warrants for purchase of 30,000 shares of com¬
stock of the total common, 375,000 shares will be
offered for sale for cash.
30,000 shares are reserved for
issuance upon exercise of warrants attached to preferred
and 95,000 shares are reserved for issuance upon exer¬
mon
cise of
outstanding warrants.
Price — By amendment.
proceeds, together with other funds, will
to pay the company's 2% subordinated note m
the principal amount of $5,268,750 and accrued interest.
Offering date indefinite.
•
Proceeds—Net
!
(Continued
on page
50)
#
—
Underwriters and Distributors
of
Corporate and Municipal
■
State and
Municipal Bonds
Securities
:m The
C.J. DEVINE
FIRST BOSTON
CO.
Kidder, Peabody ^ Co.
Founded 1865
48 WAIL
&
INC.
CORPORATION
Pittsburgh
Chicago
,
•
ST., NEW YORK 5, N. Y.
Boston
•
Cincinnati
Philadelphia
•
St. Louis
•
•
HAnover 2-2727
Pittsburgh
•
San Francisco
Cleveland
'
(letter of notification) 60,000 shares ($1 par)
Price—$5 a share. Company proposes to offer
12,997 shares of- common in exchange for its unsecured
promissory notes in the amount of $64,985 held by dis¬
tributors of company's proposed products. Underwriting,
United States Government Securities
t
Chicago and other cities'
*
:
>
April 14 (letter of notification) 200 shares of Class A
($100 par) common and 800 shares Class B ($1 par)
Corporate and Public Financing
.
*v
"V
be used
—
T.
-
-
,
-
Corp., Biripinghaitf, Ala.
common.
.
March 19 filed 522,416 shares
($10 par) common, being
offered by American Gas & Electric Co.
Underwriters—
To be
determined by competitive
bidding. Probable
.
New York
I
-
Co.
American Overseas
Airlines,
Boston
>
,
shares purchased from the company
by F^ S. Yantis &
Co. and H. M. Byllesby & Co. who will receive all of
the proceeds. Price by amendment. Proceeds—Proceeds
com¬
stock (par 500). Underwriter—A. M.
Kidder & Co. Price
bidders include:
f
purchasing the shares for investment and net
holders at $10 per
to withould action.
,
(N. J.)
were
jfeoth of Chicago.
Contributors, Inci (4/24)
Astor Zipper Corp., New York (4/28)
<ApriL7 r( letterj of .notification) $7,500 shares of
Atlantic City
-
March 27 filed 72,000 shares ($1 par) common.
Under¬
writer—F. S. Yantis. & Co..and H. M.
Byllesby &
it will
to issue any additional shares of
part of company's refinancing plan,
j
Machinery Corp., Orlando, Fla.
'
.
Black, Sivalls & Bryson, inc.
•
Mar. 31 filed 143,000 shares
(50c par) common. Under¬
writer—Name to be filed by amendment.
Price by
amendment.
Proceeds—For general corporate
purposes
including reduction of bank loans and outstanding notes.
-
ing stockholders.
lication of "47—The Magazine of the
Year."
per
5%
whether such sales had the effect of
making the entire
offering public. The Commission staff stated that regis¬
tration is required if any of the
remaining 733,575 sham
are to be sold;
Price—At market. Proceeds—Go to sell¬
100 shares (10c par) Class B common.
Prices—$100 per
unit consisting of one share of
preferred and one share
,of. Class A common; Class B common 10 cents a
share.
No underwriting.
To increase working capital for pub¬
—$3
of
So far, 231,204 shares have been sold in the
open ma>ket and the Commission had raised the
question as *•»"
April 17^9^7 (letter of notification) 999 shares
(no par)
$5 preferred; 999 shares (10c par) Class A common and
,
shares
Berkey & Gay said the shares had been sold in 1944
stockholders,
come
41,000
issued and outstanding. The purpose of the
registra¬
statement is to enable holders to effect sales
by
of the prospectus.
<
4
and 1945 to
of
"we have
notification)
Feb. 3 filed 733,575 shares ($1 par) capital stock. Under¬
writing—None. Offering—Company said all of the shares
company in the ratio of one-third
for each common share held.
Unsub¬
share
new
offered
of
Berkey & Gay Furniture Co., Grand Rapids, ^
being sold
not be necessary
(5/6)
sinking fund debentures,
Shares
the
^Associated Magazine
par) $1.10 cumulative pre¬
ferred and 60,000 shares
(no par) common. Underwriters
ment of
be
of
Dec. 22 said
.
Feb. 24, filed $1,000,000 oT 4%
due 1967; 25,000 shares
(no
Offering—Stock will be offered to
common
will be purchased
by the
Price—Public offering prices by amend¬
ment.
Proceeds—Net proceeds will be used to retire all
unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock.
George Eastwood, President, in letter to
American Iron A .Machine Works
Co., Okrahoma
City, Okla.
Co.
underwriters.
for each five shares held. Underwriter
&
a
scribed
share. Offered initially to stockholders in
one new
will
common
stockholders
American" Hydraulics, Inc.*
Sheyboygan, Wis.
April 2 (letter of notification) 50,000 shares of common.
ratio of
&
exchange to holders
of its ?532,996 shares of $6 cumulative
convertible prior
preferred stock at the rate of 1.4 shares of first
prefer¬
ence stock for each share of
$6 prior preferred.
Shares
of first preference not issued in
exchange will be sold
to underwriters. The
300,000 shares of second preference
stqck will be offered publicly. The 1,355,240 shares of
($1 par) common stock.
YJnderwriter—Dillon, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100,000 shares may be sold
by com¬
pany to persons, firms, or corporations with whom the
Price
stock (par $5).
Inc., and E. H.
common
preference stock, Series A; 300,000 shares
ofcpnvertible
second preference stock, Series
A, and 1,355,240 shares
common stock
(par $5).
Underwriting—KuhnALoeb &
Co., New York.
Offering—The 350,000 shares
/of first
preference stock will be offered in
outstanding stock of Okla¬
June
1
Co.
(letter
Offering price
$6 a share. ;Underwriter—Estes, Snyder & Co.,'Topeka,
Kans. To payjoutstanding indebtedness and
expenses and
to open five additional stores in Kansas
City, Mo. Offer*
ing postponed indefinitely. '■
"
4.
L"
July 12 filed 350,000 shares (no par) cumulative first
25 shares of stock at $1,000 per unit.
Underwriter—A. W.
Benkert & Co., Inc., New York. To reduce indebtedness
Incurred, in acquisition of
Castings Co.
Gas
12
cumulative convertible $6 par preferred.
Armour and Co., Chicago
income notes and 7,500 shares of
capital stock (par 250).
Offering—To be offered in units of $1,000 of notes and
homa Steel
Western
16,197 shares of
the public.
Price by amendment.
by six stockholders.
;
Industries, Inc., New York^
(letter of notification) $300,000 10-year 5%
17
filed
Rollins & Sons Inc.
for
\
5
Underwriters—Rauscher, Pierce
All American
March
'..I-.0
'
,
amendment.-■ Proceeds—Of the
common.
For
,
V'.'-;.
Sept. 27 filed 180,000 shares ($2.50 par) common. Under¬
writer— White, Weld & Co., New York.
Price
By
derwriting—No underwriting. Offering—Stock
will be
for subscription
sto common stockholders in
Air-Borne Cargo Lines, Inc., New York
York.
"
.
V
Beaunit Mills, Inc., New York
offered
the
re¬
For working capital.
.
American Zinc, Lead &
Smelting Co., St. Louis
Sept. 6 filed 336,550 shares common stock
(par $1).
Un¬
©rice of $200.
14
common.
To
be offered to stockholders at
$100 per
Class A share and $1 per Class B share.*No underwrit¬
Dillon, Read & Co. Inc.,- White, Weld &
Co., and Shields
& Co.
(jointly), and W. C. Langley & Co. and The
First Boston Corp.
(jointly). Offering—Price to public
by amendment. Bids—Expected about
April 30.
the sale of
'
INDICATES ADDITIONS SINCE
PREVIOUS ISSUE
—To
receive proceeds from
four selling stockholders
49,
Registration
Proceeds—Company will
share.
Feb.
in
filed
132,740 shares ($1 par) common stock.
Underwriters—Herrick, Waddell & Co., Inc., and First
Colony Corp.
Offering—To be offered publicly at $5
a
Now
(2241)
Members
New York
oj the New York and Boston Stock Exchanges
Boston
Philadelphia
Chicago
50
of $25 par common of Califor¬
nia Oregon present, outstanding are held by Standard
Gas.
They will be reclassified into 390,000 shares ($20
par) common.
Standard Gas will make a capital con¬
of offering)
Contributors Inc. JPfd. &
California Oregon. Proceeds
proceeds to reduce its bank
loan notes.
California Oregon will apply its proceeds
to redeem 45,761 shares ($100 par) 6% preferred, series
of 1927, at $110 a share. The balance will be used to
—Standard Gas will use the
April 25, 1947
Hamilton
Mfg. Co
Common
-
provements.
Common
Preferred
Zipper Corp
Inc
Foremost Dairies,
>
New York New Haven
Preferred
&
Hartford-Equip. Tr. Ctfs.
April 30, 1947
Consolidated Edison Co.
11
(EDT)
a.m.
-Bonds
-
—
Inc.
Inc.
share in Canadian funds.
Proceeds—For a variety
in connection with exploration, sinking of
shafts, diamond drilling and working capital.
$1
Debentures
—Preferred
(CST)
Gas Co
Central Soya Co., Inc.,
1947
Debs., Pfd. & Com.
Debentures
rate of
shares
ment.
Common
Gum
itely postponed.
Cincinnati
May 15, 1947
Consol. Gas El Lt. & Pr. Co.
($1 par) common. Under¬
Sept. 27 filed 268,875 shares
writer—Van
Alstyne, Noel & Co., New York.
$7,125 per share. Proceeds—Stock is being
holders who "will receive proceeds,
Price^-
sold by share¬
(Harry), Inc., Wilmington, Del.
Braunstein
Sept. 25 filed 12,500 shares ($25 par) 4%% cumulative
convertible preferred stock and 50,000 shares (200 par)
Underwriter — C. K. Pistell & Co., Inc.,
Price—$25 a share for preferred and $11
a share for common.
Proceeds—7,000 preferred shares
are being sold by company, the remaining 5,500 pre¬
ferred shares and all of the common are being sold by
common
Suburban
Bell Telephone Co.
expenditures and for additional
(5/12-15)
Philadelphia
Gum,
&
100,738 shares ($50 par) capital stock.
Underwriting —None.
Offering — For subscription to
common stockholders in the ratio of one share for each
six shares held as of May 12, 1947.
Price at par. Pro¬
ceeds—To reimburse company treasury for construction
14 filed
April
(Bait.).—Debentures
(Continued from page 49)
Bowman
stockholders mt
held. Unsubscribed
will be sold to underwriters.
Price by amend¬
Proceeds—Working capital, etc. Offering indefin¬
share for each 7J/3 shares
one
Co—Bonds, Pfd. & Com.
Upper Peninsula Power
stock.
Claude
Neon,
improvements.
present stockholders. Net proceeds to the company, es¬
timated at $147,500, will be used to prepay to the ex¬
tent: possible outstanding ; $149,300 mortgage liabilities.
Offering date indefinite.
Flying Service,
Robertson, Mo.
Inc.,
March 24
(letter of notification) 50,000 shares ($1 par)
27% cent cumulative, convertible preferred and 50,000
shares (10c par) common. Price—$5 per unit, consisting
of
one
Underwriter—White and- Co., St.
share of each.
Louis, Mo.
For expansion of operating facilities and for
working capital.
Inc., New York
/
?
($1 par) common. Under¬
writing—None.
Offering—Shares will be offered for
subscription to common stockholders on basis of one
share for each 10 shares held.
Price by amendment.
Proceeds—To finance airline operations and acquisition
and development of oil properties.
Company also plans
to advance funds to Summit Airways, Inc., of whose
March 28 filed 223,954 shares
stock it
(N. Y.)
owns
dividend.
Harriman
Aug. 9 filed 300,000 shares ($5 par) common stock.
Underwriters—First Boston Corp., New York. Price by
amendment.
Proceeds—Go to Joseph Levy, President,
selling
(O.) Electric Illuminating Co.
21, filed
1,847,908 shares
(no
Offering—All of the shares are owned
Feb.
par)
common.
by The North
shares to
record
March 19 at $15 per share to the extent of one Cleve¬
land
for
every
five North American shares
held.
Rights expire May 27. The remaining 133,383 shares
are
to
be
sold, probably through competitive sale
Probable bidders include Dillon, Read & Co. Inc.; The
First Boston Corp.; White, Weld & Co. and Shields
& Co. (jointly); Kuhn, Loeb & Co. and W. C. Langley
& Co. (jointly); Otis & Co.; Blyth & Co., Inc.; Smith,
Barney & Co..
Proceeds—For prepayment of bank
which
is
offering
stockholders
of
North
American
Co.,
common
notes
bid of 100.06 for
a
Ripley
&
•
a
Co. and Mellon
dividend.
In¬
Burrillville Racing Association, Pawtucket, It. I.
offered for
publicly at $20
a
will
finance
be used to
share.
Price—$20
the
cost
of
a
share.
Proceeds
completing
a
race
Lincoln, R. L
California
be
N.
Oregon
Power Co..
determined
1
competitive bidding.
Probable bidders include Blyth .& Co., Inc.? The First
by
Boston
Corp.; Harriman Ripley & Co.; Kuhn, Loeb & Co.,
Smith, Barney & Co. (jointly); Merrill Lynch, Pierce,
Fenner & Beane, and Bear, Stearns & Co.
(jointly).
California Oregon will sell all of the preferred and
and
30,000 shares of the common, Standard Gas & Electric
Co. (parent), which is planning to sell its entire com¬
mon stock
holdings in California Oregon, will sell the
Service,
1,714,524
American
Inc., Farmingdale,
Y.
working capital.
(5/5)
Chicago
Packing Co.,
Cudahy
4 filed $15,000,000 first mortgage sinking fund
bonds, series C, due 1967.
Underwriters—To be deter¬
April
mined by
competitive bidding.
Probable bidders include
of
B,
due 1964. The registration said $1,000^,000 of the funds
will be used to acquire additional facilities. Bids Invited
—Bids for purchase of debentures will be received up to
11 a.m. (CST) May 5 at 221 No. La Salle St., Chicago.
Halsey, Stuart & Co. Inc. Proceeds—For redemption
102%% $14,000,000 first mortgage fund bonds series
Curlee
•
Clothing
St.
Co.,
Louis,
Mo.
-
April 18 filed 22,500 shares of 4%% ($100 par)
lative preferred.
Underwriter—Stifel, Nicolaus
.cumu¬
& Co.,
shares will be
the company's
outstanding Class A common,- valued at $31.50 each.
Unexchanged shares of new preferred • will be. offered
publicly at $100 each. Proceeds—Proceeds will. be. used
to redeem unexchanged shares of Class A common at
$31.50 each and to carry out the company's -expansion
program.
Business—Manufacture of men's suits • and
overcoats.
Montreal, Canada
of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd., Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,00<^
will be used for mining operations.
of
Deardorf
•
Oil
Corp.,
New York
April 16 (letter of notification) 980,000 shares (10c par)
common.
Price—30 cents a share. Underwriter—Tellier
&
For drilling oil
capital.
Co., New York.
and for working
Delaware
•
Power & Light
well, equipping it,
Co., Wilmington^ Del.
April 14 (letter of notification) 14,300 shares ($13.50 par)
common.
Price at market.
No underwriting Proceeds
be
will
paid
to
individual stockholders sending
Trust Co. for sale.
their
Clinton, Mich.
of notification) 10,000 shares ($1 par)
behalf of Donald D. Thomas, President of the
17
stock
(letter
on
Price—$6
company,
Hague & Co., Detroit.
•
Delta
Oxygen
a
share.
Underwriter—Smith,
Proceeds go to the selling stock¬
Detroit
stock (par
writers—F. H. Koller & Co.
a
Price—$6 a share.
Cohart Refractories Co.,
Mar. 28
file^ 182,520 shares ($5 par) common.
writers-—Harriman
Co.,
bpth of New York,
&
Proceeds
price by amendment.
being sold by Corning Glass Works,
New York, and represent 88.8% of the total outstanding
—The
shares
common
are
of the company.
Consolidated Edison Co., Inc. of N. Y.
(4/30)
10-year 3%% debentures, due 1948, and to make
payments on short-term bank loans. Bids Invited—Bids
for the purchase of the bonds will be received up to
11
a.m.
(EDST) April 30, at 4 Irving Place, New York.
will
For working
Disticraft Inc.,
capital.
Chicago
,
;
notification) 15,000 shares of class B
common on behalf of Clarence W. Kraft, Ray T. Haas,
and William A. Spanier, all officers of company. The
securities may be sold through Bennett, Spanier and Co.,
April 3 (letter of
Chicago, as
April 11 filed $100,000,000 first and refunding mortgage
bonds, series B, dated April 1, 1947, due April 1, 1977.
Underwriters—Names to be supplied by amendment.
Probable underwriters: Morgan, Stanley & Co.; Halsey,
Stuart & Co. Inc.
Price by amendment.
Proceeds—To
redeem
Boston.
Under¬
Ripley & Co., and Lazard Freres
Detroit,-Mich.
par) common. Under¬
Detroit. Price — $5.50
— Stock is being sold by six share¬
receive proceeds.
M'- .}■
Typesetting Co.,
share. Proceeds
holders who
Louisvlller Ky.
Inc., Memphis, Tenn.
Sept. 25 filed 70,920 shares ($1
writer — C. G. McDonald & Co.,
(letter of notification) 6,500 shares of common
$1) on behalf of selling stockholders. Under¬
Feb. 24
Co.,
April 16 (letter of notification) 2,500 shares of Class A
stock.
Price—$100 a share.
No underwriting.
For
retirement of bank loans and for purchase of equipment.
holder.
March 26 filed 60,000 shares ($100 par) cumulative pre¬
ferred and 390,000 shares ($20 par) common.
Under¬
writers—To
I.,
April 15 (letter of notification) 97 shares (no par) com¬
mon.
Purchase—$300 per unit.
No underwriting. For
■«
subscription to class A
the basis of one share
stockholders at $20 a share, on
for each share held.
Unsubscribed shares will be offered
track at
Country Air
Cross
Clinton Machine Co.
Feb. 27 filed 38,500 shares (no par) class A stock. Un¬
derwriter—Barrett & Co., Providence, R. I. Offering—
be
21
L.
of North American.
Clinton Machine Co.,
Feb.
definitely postponed.
will
Sexton Co., Chicago
(letter of notification) a maximum of 5,000
shares ($5 par) common on behalf of Robert S. Cald¬
well, a director of company. Underwriters—Swift Henke
& Co., and Paul H, Davis Co., Chicago.
March
Securities Corp. bid 100.779 for a 4.40%
The shares
stockholders. Offering date indefinite.
Cribben &
.stock to Wilmington
of cumulative preferred stock
Underwriters—To be filed by amendment
Rejected—ComDany July 23 rejected two bids re¬
tor tne stock.
Blyth & Co., Inc., and F. S. Mose-
ley & Co. and associates submitted
4.30%
general funds.
Inc., L. I. City, N. Y.
Crawford Clothes,
Cyprus Mines, Ltd.,
Union Gat Co.
($100 par).
ceived
shares, will apply proceeds to
61%.
Cleveland
May 3 filed 70,000 shares
Bids
N. Y«
being offered by selling stockholders. Price by amend¬
ment.
Proceeds—The company, which is selling 50,000
May 3f filed 500,000 shares
loan
Brooklyn
Inc.,
Inc., St. Louis.
Offering—The preferred
offered for exchange, dollar for dollar, for
New York.
Brayton
Industries Co.,
152,500 shares ($1 par) common. Under¬
writers—Aronson, Hall & Co., and P. W. Brooks & Co.,
New York.
Offering—Of the total 102,500 shares are
purchase of three aircraft and for
Fort Wayns, Ind.
subscription to common
be offered for
May 12, 1947
Bowman
4
Aug. 21 filed 90,000 shares (no par) common. Under¬
writer—None.
Offering—Common shares initially will
American Iron & Machine Works
Company
Inc., Dunbridge, O.
(letter of notification) $300,000 of first mort¬
gage bonds. Price—$500 per unit. No underwriting. For
retirement of preferred stock, for purchase of two alfalfa
dehydrating plants from Logan County Dehydrators, Inc.
and for retirement of latter's preferred stock.
May 5, 1947
National Gas & Oil Corp
improvements
Mar. 28 filed
a
Central Mills,
Common
May 6,
porate purposes including extensions and
of its properties and plants.
/
March 13
Tide Water Power Co
Suburban Propane
Offering —To
underwriters.
of purposes
May 2, 1947
Cudahy Packing Co. 11a.m.
stock. Under¬
the public at
writer—No
Debenture
Preferred
Preferred
Common
Fairbanks Morse & Co
Northwest Airlines Inc
Walker Vitamin Products
400.000 shares of common
24 filed
June
Ltd., of Toronto,
.Preferred
I.) de Nemours & Co.
Whites Auto Stores,
common.
Porcuplno Gold Mines,
Ontario
May 1, 1947
du Pont (E.
unit through the underwriters. Proceeds—Proceeds,
at $16,507,162, will be used to reimburse its
treasury for capital expenditures and for general cor¬
per
estimated
■
Carscor
Class A
Alliance, Inc..
Tilden Commercial
10,000 shares ($1 par)
filed
tional equipment"
of N. Y. Inc.
April 3 filed $16,677,100 15-year 2V2% conv. debentures,
due May 15, 1962. Underwriters—Harriman Ripley &
Co., Inc., and Alex. Brown & Sons. Offering—Debentures are offered at par to common stockholders of
record April 18 on the basis of $100 of debentures for
each seven shares held.
Rights expire 5 p.m. May 14.
Unsubscribed shares will be offered publicly at $100
Continental-United
Omaha, Neb.
Paper Co.,
Under¬
writing—None. Offering—Shares will be offered direct¬
ly to officers and employees of the company at $45 a
share.
Purchasers must agree not to transfer the shares
for a period of five years.
Price—$45 a share. Proceeds
—To be added to general funds for purchase of addi¬
31
Power Co.
/
Carpenter
Mar.
April 29, 1947
Pitney-Bowes, Inc._
additions and im¬
treasury for previous
its
reimburse
April 28, 1947
Astor
,
tribution of 30,000 shares to
Com.
Pfd.& Com.
Co
Durban Aircraft Service
The 312,000 shares
mon.
April 24, 1947
Associated Magazine
Consolidated Gas Electric Light &
of Baltimore (5/15-16)
The subsidiary
plans to amend its charter to create the new preferred
stock and to reclassify and increase the authorized com¬
NEW ISSUE CALENDAR
(Showing probable date
of common.
shares
360,000
remaining
Thursday, April 24, 1947
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2242)
agent.
California, Clearwater, Calif*
11,500 shares ($25 par)
5y4% cumulative convertible first preferred. To be of¬
fered at a maximum of $26 a share. Underwriters —
Pacific Co. of California, Cruttenden & Co., Pacific
Capital Corp., all of Los Angeles; Brush Slocumb & Co.,
San Francisco; and Adele W. Parker, Clearwater. To
purchase 493 shares of capital stock of G. H. Cherry,
Inc. out of a total of 625 such shares presently outstand¬
Douglas Oil Co. of
March 13 (letter
ing
of notification)
'
>
Volume 165
Number
4588
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2243)
du Pont
(E. I.) de Nemours & Co. (5/1)
April 10 filed 1,000,000 shares (no par) preferred stock.
Underwriter-—Morgan Stanley & Co., New York. Offer-tng—An unspecified number of the shares will be held
for sale
Foreman Fabrics
on
Foremost Dairies, Inc.
war expansion and betterment
program of which con¬
struction expenditures
approximating $92,300,000 in 1946
Duraloy Co., Scottdale, Pa.
(letter of notification) 25,000 shares
($1 par)
behalf of the issuer, 12,500 shares
($1 par)
the account of Thomas R.
Heyward, Jr.,
and 12,500 shares
($1 par) common for the account of
Mrs. Thomas R.
Hayward, Jr. Price—At market
on
(ap¬
proximately $3.25 per share).
Underwriter—Johnson
Johson, Pittsburgh, Pa., and The First Cleveland
Corp., Cleveland.
The company will use its
proceeds
for working
capital.
&
Fostoria
par)
common.
Price—$10 a preferred share and
$1.25 a share. No underwriting.
working capital.
East Coast/Electric
.
($1
Co.,
West
Point,
For
by competitive bidding.
bidders include
Halsey, Stuart & Co. Inc^
only); Harris, Hall & Co. (Inc.); Otis &
Co.;
Kidder, Peabody & Co. ' Offering—To the
public.
The
registration showed that $800,000 of the bonds and
all
the common stock are
being offered by East Coast
public Service Co., parent of the
registrant. Proceeds—
Coast Electric will
use
$500,000 of bonds toward
proceeds from the sale
the payment of
outstanding
first mortgage notes and
repayment of bank loans.
•
Ecclyco,
April
Inc., Williamsburg, Mass,
14 (letter of
notification) 500
A stock and
4,500 shares of
Class
'stock.
Price—$1 a share.
ing with securities.
issued and
shares of voting
non-voting Class B
No
underwriting.
Edelbrew Brewery,
Inc., Brooklyn, N. Y.
Price—$25
share.
Proceeds
modernization program.
No
underwriting.
Grolier
writer—None.
for each share of Engineers
share.
a
approximately $870,000, together
Hamilton
(Harry), Inc., Detroit
Mar. 31 filed 100,000 shares
($50 par) 4%% cumulative
preferred and 250,000 shares
($1 par) common.
Under¬
writers—F. Eberstadt & Co.,
Inc., New York, and Watling, Lerchen & Co., Detroit. Price
by amendment. Pro¬
ceeds—To equip and improve
recently acquired Cleve¬
land,- O., plant.
Fidelity Fund, Inc., Boston
March
28 filed
300,000 shares ($5 par) capital stock.
Underwriters—Paul H. Davis &
Co., Chicago; and The
Crosby-Corp., Boston.
—For
investment.
Films Inc.,
Price based
on
market.
Proceeds
of
?es
of
class
New York
A
common
stock
stock.
is
initially
a
ther
into
2
Wad-
Offering — To be offered
unit consisting of one
share of class A
stock and one share of
common stock.
"1© for retirement of
toek at $100 a
convertible
Underwriter—Herrick,
Co., Inc., New York;
publicly at $8.10
writer—A. C. Allyn & Co., Chicago,
Milwaukee.
Price by amendment.
common.
Under-
and Loewi & Co.,
Proceeds—To retire
May 1 company's outstanding preferential
participat¬
ing stock.
Proceeds—$201,-
2,010 shares ($100 par) preferred
share; remaining proceeds, together with
funds, will be
used for production of
educational
'4-
"
|
j
'
•
Inc.,
Hartfteld Stores,
Inc., Los Angeles
June 27 filed 100,000 shares
($1 par) common stock.
Underwriters—Van Alstyne, Noel &
Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—
To be offered to the
public at $8 a share.
Proceeds—
Company is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its
proceeds
to p^y the costs of
opening additional stores and to ex¬
pand merchandise in its existing stores.
porarily postponed.
Electric Co.,
Lakefront
Realty
Corp.,
Chicago
April 14 filed 100,000 shares ($10
par)
writing—The
Shore Club of
common.
Under¬
underwriting will be handled by Lake
Chicago which organized the registrant to
carry out the proposed transactions.
Offering—To mem¬
bers of Lake Shore Club.
Price—$10 a share. Proceeds
—To
•
purchase property presently
leased.
Langendorf United Bakeries,
Inc., San Fran.
April 14 (letter of notification) 3,000 shares of Class B
stock
behalf
on
deceased.
of
the
estate
of
Bernard
Price—Estimated at $26.50.°
Wm. R. Staats Co., Los
Angeles.
•
Lay
April
18
(H.
W.)
filed
&
Co.,
Inc.,
Langendorf,
Underwriting—
Atlanta
16,000 shares
($50 par) 5% cumulative
preferred and 15,000 shares ($1 par) com¬
mon.
Underwriter—Clement A. Evans & Co., Inc.,
Atlanta.
Offering—All but 3,000 shares of the common
will be sold publicly at
$6.50 a share. The preferred will
be offered to the public at
$50 a share.
The 3,000 shares
convertible
not sold
publicly will be offered to company
officers and employees at
$5 each.
Proceeds—For con¬
struction of new plants at Atlanta and
Memphis, Tenn.
common
Business—Manufacture of food products.
•
Oil
/
Corp., Reno, Nev.
April 14 (letter of notification) 60.000 shares of common.
Price—$1 a share. To be sold through Vice-President of
company.
To drill exploratory test for petroleum.
Lithium Corp, of America,
Minneapolis
April 2 (letter of notification) 85,000 shares of common
and 42,500 common stock warrants not exercisable
until
May 1, 1948. Price—$3 a common share and two cents
a
warrant.
York.
Offering tem¬
Honolulu
Mar. 31 filed $5,000,000 first
mortgage bonds, series F»
due 1977.
Underwriters—Dillon, Read & Co., Inc., New
York,, and Dean Witter & Co., San. Francisco., Price by
amendment. Proceeds—To repay
$3,000,000 of short term
promissory notes and to reimburse its. treasury for pre¬
vious construction expenditures.
Helicopter Air Transport, Inc., Camden, N. J.
March 14 filed 270,000 shares of
capital stock. Under¬
writer—Strauss Bros., Inc., New York.
Price—$3.50 a
share.
Proceeds—Net proceeds will be used to pay
obligations, purchase helicopters and equipment and for
working capital.
Lesco
Underwriter—Hautz, Engel & Andrews, New
For mine development and for
working capital.
Lucky Stores,
Ltd.,
"
Anchorage,
on
Hawaiian
stock, of which
200,000 shares reserved for conversion of
class A. - Each
dell &
I
(4/25)
($5 par)
;v
(letter of notification) 200,000 shares of com¬
Price—25 cents a share.
To be sold through
officers of company. For
payment of property leases and
for machinery,
supplies and other expenditures.
<"
June 25, filed 100,000 shares
($5 par) class A stock and
300,000 shares (10 cent par) common
shares
Price—$11.50
'V.'
\
.
April 11
of
Manufacturing Co.
Mar. 31 filed 100,000 shares
of
Corp., New York, and for additional
working capital.
held.
common
Proceeds—Purpose
of offering is to carry out
a provision of dissolution
plan of Engineers approved by
the Commission.
with $755,000 of other
bonds, will be used to repay the
$34,000 of a property mortgage, to
pay off
loans in the amount of
$1,295,000 to Bankers Commer¬
Offering—The shares will be offered for
j
Kelly Willow Mining Co.,
Inc., New York
subscription to common stockholders of Gulf States'
parent, Engineers Public Service
Co., New York.
The
subscription basis will be one share of Gulf States stock
Products Co., Newark, N. J.
Feb. 26, filed 150,000 shares
($1 par) common class A.
Underwriter—E. F. Gillespie &
Co., Inc., New York.
Price—$7.25 a share.
The registration states
princi¬
pal stockholder has granted the
underwriters an option
to purchase 45,000 shares of
class B ($1 par) common
at $7.25 a
share, exercisable for a period of three
years.
'
mon.
For improvement and
Utilities Co., Baton
Rouge, La.
l,909,968sihares (no par) common. Under¬
t
;
Alaska
Gulf States
Jan. 20 filed
"l,
(letter of notification) 15,000 shares
(no par)
Price—$7.50 a share.
Underwriter—A. D.
Wakeman Co.,
Portland, Ore. For working capital.
standing common.
Proceeds—To retire $6 cumulative
preferred, balance for reduction of bank loans.
Federal Electric
Ferguson
r
Y
March 31
Hemphill, Noyes & Co. Offering—Underwriters to
purchase from the company
30,000 shares of preferred
70,000 shares of common; and from Fred P.
Murphy
and J. C. Graham,
Jr., 100,000 shares of issued and out¬
complete property extensions and for
general corporate
purposes.
Business—Internal combustion
engines.
cial
Society,
-V.-'
Engraving
common.
and
$2,500,000 of serial debentures, due 1948 to 1952.
Underwriter—Harriman Ripley & Co., New York. Price
by ajmendment.
Proceeds—To retire
outstanding loans,
of
'
and
For mine
(5/1)
April 11 filed $17,500,000 20-year
debentures, due 1967,
and
Proceeds—Proceeds
—
be added to
Keliey Boat Co., Inc.,
Milwaukie, Ore.
April 2, 1947 (by amendment),
30,000 shares at 4%%
cumulative preferred stock
($50 par) and 170,000 shares
of $1 par common stock.
Underwriters—Riter & Co.
Fairbanks, Morse & Co., Chicago
balance
a
will
being sold to stockholders.
are
'*
Offering indefinitely postponed.
Elkhorn-Beaverhead Mines Co.,
Baltimore, Md.
March 12 (letter of
notification) $250,000 first mort¬
gage 10-year 5% bonds, and
250,000 shares (10 cents par)
common.
Price—$550 per unit consisting of $500 bond
evelopment.
stock,
outstanding and being sold for the account
Company has also, issued 55,000
•
including
balance
Co.
Feb. 26, filed 102,000 shares
($1 par) common. Under¬
writer—Sills, Minton. & Co., Inc., Chicago. Price—By
amendment. Proceeds—The
shares, which constitute ap¬
proximately 48.5% of company's
outstanding common
Griggs, Cooper & Co., St. Paul, Minn.
Sept. 3 (letter of notification) 12,000 shares
($1 par)
common.
Underwriters—Kalman & Co., Inc., St. Paul.
modernization and improvement of the
manufacturing
plant and.machinery and equipment.
and 500 shares of common.
Jahn & Oilier
by amendment. Offering temporarily
postponed.
preferred. Underwriters—None.
Offering—To be offered
at, par to customers, officers and
employees of the com¬
pany. Proceeds — For corporated
purposes
$10,578,000 and
•
10 cents
Dec. 31 filed 5,000 shares
($100 par) 5% non-cumulative
debt of
gage
general funds.
purchase warrants to the selling stockholders at
a share
entitling them to purchase up to Aug. 1,
1949, common stock of the company at $11 a share. Price
For trad¬
I
1977.
bidding.
of certain stockholders.
stock
proceeds.
Probable bidders include
Halsey, Stuart & Co. Inc.; The
First Boston
Corp.; Glore, Forgan & Co.; Blyth & Co.,
Inc.; Harriman Ripley & Co.; Harris, Hall & Co.
(Inc.).
Proceeds—Part of the proceeds will be used
to pay mort¬
Glensder Textile Corp., New York
Aug. 28 filed 355,000 shares ($1 par)
common, of which
65,000 shares are reserved for issuance upon the exer¬
cise of stock purchase warrants.
Underwriter — Van
Alstyne, Noel & Co.
Offering—The 300,000 shares are
of
receive
lowa-lllinois Gas & Electric Co.
$22,000,000 of first mortgage bonds due
Underwriter—To be determined by
competitive
stockholders,
of
will
Feb. 15 filed
Roland E. Fulmer and Louis H.
Newkirk, Jr., are selling
the remaining 100,000 shares.
Price—$6 a share. Pro¬
ceeds—For purchase of sweet
potatoes, plant expansion,
additional storage
facilities, research and development
work and working capital.
(bonds
$10 per share.
Proceeds—Selling stockholders
Offering date indefinite,
Fresh
Probable
its fi¬
of present market
conditions.
program because
International Drass Co.,
Inc., New York
Aug. 28 filed 140,000 shares of common stock
(par $1).
Underwriter—Otis & Co. Offering—Price
Dry Foods, Inc., Columbia, S. C.
Aug. 30 filed 450,000 shares (100 par) common. Under¬
writer1—Newkirk & Banks, Inc. Offering—Of the
total
company is selling 350,000 shares and two
Va.
Mar. 28 filed $1,300,000 of first
mortgage bonds, Series A,
due 1977, and
60,000 shares of $10 par common. Under¬
writers—To be
determined
East
nancing
shares will be sold to such
persons as may then be
determined. To retire current bank loans
and to increase
general funds.
com¬
from $1.15 to
mon
Steel
Corp., Fostoria, Ohio
(letter of notification) 11,285 shares
($5 par)
common.
Price—$12.50 a share. No underwriting. Shares
are offered for
subscription to stockholders of record
March 31. Rights expire? 3
p.m. April 28. Unsubscribed:
i
cumulative pre-,
(no par) common stock.
competitive bidding.
Probable bid¬
ders include
Blyth & Co., Inc.; The First Boston
Corp.;
W, E. Hutton & Co.
Proceed^—Net proceeds from thesale of preferred will be
used to reimburse the com-,
pany's treasury for construction
expenditures./ Net pro¬
ceeds from the sale of
common will be
applied for re¬
demption of 5% cumulative convertible
preferred stock
not converted into common
prior to the redemption
date.
The balance will be
added to treasury funds.
Company has asked the SEC to defer action on
Underwriters—By
March 31
Durham Aircraft Service,
Inc., Flushing (4 24)
April 17 (letter of notification) 4,150 shares($10 par).
convertible cumulative
preferred, and 100,000 shares
Pressed
a
Illinois Powor Co.,
Decatur, III.
1,086 shares are being issued
in satisfaction of an
obligation to pay $57,000 in con¬
nection with the purchase of a
plant in Jacksonville,
Fla. Proceeds—For
redemption of 25,233 Vs shares of 6%
preferred and for other corporate
purposes.
,
for
Price—$5.50
June 17, filed
200,000 shares ($50 par)
ferred stock and
966,870 shares
Offering—65,500
shares will be offered to the
public at 52.50 per share.
Of the remaining, 3,414 shares
will be offered to
certain
officers and one large stockholder
who have indicated
their willingness to surrender
shares of 6% preferred;
stock held by them in
exchange for shares of new pre¬
ferred. The remaining
March 12
common
common stock
purchase
preferred share and 2 cents a
Underwriter—Amos Treat & Co., New York. '
It is expected that a full
registration will be filed later
with the SEC.
(4 28-30)
York.
represented the initial phase.
common
preferred and 50,000
warrants.
warrant.
March 28 filed 70,000 shares
($50 par) 4%% series cumu¬
lative preferred stock with
common stock
purchase war¬
rants.
Underwriters—Paine, Webber, Jackson & Curtis;
and Allen & Co., both of New
general
Company has inaugurated a post¬
51
Hy-Grade Supply Co., Oklahoma
City
Dec. 3 (letter of
notification) 54,350 shares of cumulative ;
convertible
July 29 filed 110,000 shares ($1
par) common stock, all
outstanding.
Underwriters—Cohu & Torrey. Price
by
amendment. Issue
may be withdrawn.
or before
May 7 to the trustee of a Pension
Trust established by the
company, without underwriting
discounts. Price by amendment. Proceeds—To
be added
to general funds to be used with other
cash for
corporate purposes.
Corp., New York
Inc., Oakland, Calif,
April 4 filed 50,000 shares ($25 par) 5J/2% cumulative
preferred and 50,000 shares of $1.25 par common. Under¬
writer—Blair & Co., Inc. Price—By amendment. Pro¬
ceeds—For payment of notes,
redemption of 10-year
4% sinking fund debentures for purchase of new
trucks,
fixtures and for working capital.
McClanahan
Oil
Co., Grand Rapids,
Mich.
April 8 (letter of notification) 260,109 shares ($1 par)
common.
Price—$1 a share.
To be offered for sub¬
scription by stockholders of record April 22 in ratio
of
one
for each five
shares held. No underwriting. For
working capital.
(Continued
on page
52)
52
(Continued from page 51)
,
.
,
the
Francisco
San
Co.,
&
McCormack
•
$300,000 from the Shell Co., will be used
purchase of the New Brunswick Properties
Brunswick Gas & Oilfields, Ltd.
and
v
$25,in 30
years. Underwriters—To be determined by competitive
bidding.
Probable bidders include Halsey, Stuart & Co.
Inc.; The First Boston Corp.; White, Weld & Co., and
Kidder, Peabody & Co. (jointly).
Business—The sys¬
April 10 filed 300,000 shares ($1 par) common.
writer—Name to be supplied by amendment.
Price--;
Proceeds—For exploration and devel¬
claims. Business—Mining.
40 cents a share.
opment of mining
Eased
'
v
Northwest Airlines,
150,000 shares ($1 par) common. Under¬
writer—Burr & Co., Inc., New* York. Price by amend¬
ment. Proceeds—Of the total, 100,000 shares are being
filed
Feb. 28
being sold by the company, which
ceeds for general corporate purposes.
are
/ Mercantile
of
be exercised through April 1950 at $10 per share,
through April 1952 at $11 per share and through April
1953 at $12 per share.
Underwriter—Mitchum, Tully &
Co.
Proceeds—To repay bank loans and for additions
Securities
term notes
be
proceeds,
Proceeds — Net
bidding.
derwriter—Southern Securities Corp.
market
common
together
•
struction
for
treasury
April 18 (letter of notification) 10,000 shares of Series
1937 6% cumulative preferred.
Price—$10 a share. No
Mission
Old
Appliance
par) common. Under¬
Angeles.
Price—$11.50 a
Proceeds—For construction of new plant build¬
&
share.
Los
Co.,
filed
31
Price by amendment.
Proceeds^Td^etiife oirtstaAding bank loans in amount of
$4,080,000, with the balance applied to general corporate
purposes, ^
y
f
Motors
Feb.
'
y
'-•<
/>
r'
r-
Securities Co.,
V'V
j
*'
'•
O
■!'<>'
'
'•
-
Inc., Shreveport, La.
t
Proceeds—For purchase of
automobile time sales paper which is its principal busi¬
ness as a
Poindexter
Inc.,
Distillery,
•,
•
June 13 filed 250,000 shares of common stock (par $1).
^Underwriter—Smith, Barney & Co.
Price by amend¬
ment.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends. Indefinitely
ooBtponed.
;
Electric
•
Charles
(letter of notification) 5,000 shares (50c par)
Price—$8.50 a share.
No Undeifwritin&. "To1
premium on life insurance policy of Leslie F. Muter
President and Treasurer of company.
Mutual Plywood Corp.,
Oakland, Calif.
March 11 filed 7,000 shares of 6% cumulative preferred
stock (par $100) and 10,000 shares of common stock
(par $100). Underwriting none. Price—Preferred $100;
common
$100. Offering — Securities will be offered
-mainly to employees. Proceeds — For construction of
plant, purchase of machinery, etc.
,t
\ i
Gas &
Oil
Corp., Newark, 0.v(5/6)
March 28 filed $1,750,000 of 15-year
due
1962.
Providence,
redeem
R.
first
P.
,
Underwriter
I.
Price
mortgage
—
]
sinking fund deben¬
G.
H.
Walker
&
Co.,
by amendment. Proceeds—To
bonds, to repay Freedom-Val-
company to the corporation and to add to general funds
for payment of costs of construction and development
work. - • -v
yyj»v..-
New Brunswick
Brunswick,
April
2
filed
Oilfields, Ltd., Fredericton, New
Canada
150,000
Underwriters—William
Pitfield
&
Corp., Worcester, Mass.
S.
Payson, Vice-President. Tucker, Anthony &
Refrigerated Cargoes, Inc., New York
Co.
C.
•:
Rolph,
and 277,231 shares (50c par) common stock, with Sterling,
Grace & Coi as underwriters.
Company has decided to
454,465 shares of common stock only, which will be
for subscription to stockholders of record Sept.
of one share for each five held. Issue will
be underwritten.
J
'
"y 1 y
Issue
offered
5 to the extent
not
Rosslyn Loan Co., Inc., Arlington,
Va.
March 12 (letter of notification) 20,000 shares
($10 par)
&
preferred. Price—$10 a share. Underwriter—Miller
Patterson, Richmond, Va. For expansion purposes.
•-, Russell
Manufacturing Co.r. Middletown, Conn.
April 14 (letter of notification) 12,110 shares (no par)
common stock.
Price—$24 a share.
No underwriting.
For additional working capital for business expansion.
Portland, Oro.
Salant
&
{
Salant, Inc., New York
stock.
Price
being sold by 13
28 filed 240,000 shares ($2 par) capital
Underwriter—Eastman, Dillon & Co., New York.
March
by amendment. * Proceeds—Shares are
stockholders who will receive proceeds.
Pacific
into
stocks will be sold at $105 per
share of preferred and one share
be used in organization of
Proceeds—To
common.
Republic Pictures Corp., New York
\
merger
par) common. Underwriter
Vice-President and director of
Registration originally filed July 31 covered 184,821
shares of $1 cumulative convertible preferred ($10 par)
Francisco
Helicopter Corp., New York
■
Martin
business.
•
upon
«
6% cumulative pre¬
ferred and 25,000 shares (no
—John
Louisville, Ky.
No underwriting.
Pharis Tire & Rubber Co.,
Service Caster & Truck Corp.,
Albion, Mich.
.
April 10 filed 32,000 shares ($25 par) $1.40 convertible
preferred and 53,962 shares ($1 par) common. Under¬
writer—Smith, Burris & Co., Chicago. Price—$25 a pre¬
ferred share arid $10 a common share.
Proceeds—Pro¬
ceeds, together with funds to be provided by a term bank
loan, will be used to discharge indebtedness to Domestic
<
*
.
Credit Corp.
shares
,
.
(no
par) capital stock.
Boston, and W. C.
Elwell,
Co., Ltd., Montreal. Price
Proceeds—Proceeds,
together
with
—
$5.75
$300,000
a
share
bank
loan
Solar Manufacturing Corp.
^amendment) filed 110,000 shares of 75c
stock, series B (par $5)
Underwriters—Van Alstyne, Noel & Co. Price per share
March'19 ?(by
cumulative convertible preferred
$12.50 Proceeds—Net proceeds will be
demption of bank loans and to cover
;
Plg'n Whistle Corp., San Francisco
expire May 1.
(4/29)
stockholders of record April 15 jn
preferred for each 20 shares of
common
held. Rights expire 3/p.m. April 28. Unsub¬
scribed shares will be offered tb the public. Proceeds
one
and
for working
capital.
short term bank loans
-;r,v*
S. C.
$100,000 to capita stock
31
filed
200,000
'
-
and
j
*
Co*, Charleston, 'S. C.
shares
(no par)/common:
|
and
bonds, due
competitive
bidders include The First Boston
Corp.; Harriman Ripley & Co.; Morgan Stanley & Co.;
Halsey, Stuart & Co. Inc. (bonds); Kidder, Peabody &
Co.
and .r Merrill
Lynch, Pierce, Fenner &
Beane
(jointly); >W. C. Langley &-Co. and Carl M.: Loeb.
Rhoades & Co. (jointly). Price to be determined by com-,
petitive bidding. Proceeds—To reimburse its treasury
funds expended for property improvements.
,
bidding. "Probable
share of
—Proceeds will be used to repay
—
$4,000,000 first and refunding mortgage
1977. Underwriters—To be determined by
shares ($50 par) 4*4% convertible
preferred stock. Underwriter—First Boston Corp., New
York. Offering—Shares are being offered for subscript
of
Proceeds
South Carolina Power
March 27 filed 45,736
tion at par to common
0
$75,000 to surplus.
.
March
Pitney-Bowes, Inc., Stamford, Conn.
Z,
Insurance Co., Columbia,
(letter of notification) 10,000 shares
mon.
Price—$17.50 a share. No underwriting-JStack,holders of record March 19 given right to subscribe op
basis of one new share for each three shares held. Rights
lounges in Long Beach, Riverside, Palm Springs and San
Diego and for working capital.
.
.y.
applied to re-;
part-of cost of
March 26
(par $7.50) cumulative con¬
dividend stock. Underwriter
—G. Brashears & Co., Los Angeles.
Price by amend¬
ment.
Proceeds—23,481 shares are being issued by com¬
pany and proceeds will be used in connection with recent
purchase of four Chi Chi restaurants and cocktail
,
expansion program.
South Carolina
Dec. 26 filed 50,000 shares
vertible prior preferred $2
ratio
D.
Newark, O.
Sept/27 filed 100,000 shares ($20 par) cumulative iCon?{
vertible preferred. Underwriter—Van Alstyne, Noel At
Co. and G. L. Ohrstrom & Co., New York. Price—$20 a
share. Proceeds—For payment of loans and to replace
working capital expended in purchase of building from
RFC and to complete construction of a building.
yoline Oil Co. the balance of advances made by that
;
No underwriting.
share.
Chicago
common.
tures,
a
Feb. 3 filed 25,000 shares ($100 par)
(letter of notification) 3,000 shares (no par)
common.
Price-^$100 a share.
To be sold through
officers of the company.
For design and production
16
National
Price—$100
Reed-Prentice
April 15
of, two helicopters.
pay
Tenn.
Chattanooga,
Inc.,
Reaves,
April 7 (letter of notification) 5,000 shares ($2.50 par)
common.
Price—At market. Being sold on behalf1'of
Murphy (G. C.) Co., McKeesport, Pa.
April
Pittsburgh, Pa.
Corp.,
For re-investment in business."
preferreds and share-for-share plus $5 per share in cash
for 7% preferred of the Pacific Power & Light Co. and
Northwestern
finance company.
Muter Co.,
Z"Z
Price—$3 a share.
Underwriting—Euler and,
To liquidate current obligations and for gen¬
preferred stock.
July 10 filed 114,815 shares ($100 par) 5% preferred.
Offering—Company proposes to exchange the new pre¬
ferred share-for-share for the outstanding $6 and 6%
Power & Light Co.
•
Products
Proceeds—For explora¬
share.
of mining property.
April 14 (letter of notification) 200 shares of ($100 par)
of
Proceeds—Shares are being sold by
will receive proceeds.
Business—
plasticizers and chemicals.
Pacific Power & Light Co.,
$5,000,000 collateral trust notes, series 118
to 137 inclusive, with 4% interest from maturity. Under¬
underwriting.
a
eral corporate purposes.
31
program.
"
19 filed
writing—No
Co., Phila.
$25).
sub¬
scription to common stockholders of record May 12 at
par in ratio of one new for each 10 shares held, t Rights
will expire June 30.
Proceeds—To finance construction
Eastman, Dillon & Co.? New York.
.
common.
April 9 filed 626,136 shares of common stock (par
Underwriters—None, Offering—To be offered for
Underwriter—
$5,000,000 of debentures.
B.
April 18 (letter of notification) 94,000 shares of ($1 par)
company.- Price—The
unit consisting of one
Va.
W.
Pacific Gas & Electric Co., San
Morris Plan Corp. of America, N. Y.
Mar.
Nitro,
—To be added to working capital.
ing and an office building and for purchase of machin¬
ery and equipment.
..
. f
.
j[
(500 par) capital stock.
Soden, Montreal, director of
shares
100,000
Price—500
Ramie
•
preferred is conver¬
& Co., and H. M.
Byllesby & Co., both of Chicago. Price—At par. Proceeds
March 25 filed 58,000 shares ($5
writer—Lester
filed
13
tion and development
par) common shares into which the
tible.
Underwriters~^F. Si Yantis
Angeles
Los
Corp.,
Price—At
Proceeds—For repayment of $11,500,000 of
Quebec Gold Rocks Exploration Ltd., Montreal
Nov.
filed 50,000 shares ($20. par) 5% Convertible
cumulative preferred and an unspecified number of ($1
Mar.
For working capital.
underwriting.
from May 1, 1947 to April 30, 1959.
bank loan notes.
amendment..
Miles, Mich.
Michigan Mushroom Co.,
>
six stockholders who
Manufacture of
•
lnc.,
Ohio-Apex,
by
expenditures.
construction
previous
common
face amount.
April 22 filed 75,000 shares ($1 par) common.
Under¬
writer—Doolittle, Schoellkopf & Co., Buffalo, N. Y. Price
will be used to finance its property con¬
and equipment program and to reimburse
Traction Co.,
Its
Proceeds—For in¬
(approximately $3,048,000).
vestment.
be received from
to
(par $1). Un¬
Price—Based on
March 10 filed 200,000 shares of common
the sale of additional
shares to Michigan's parent, American Light &
funds
principal amount of debentures for each 20 shares of
common held.
The debentures will be convertible into
Oglethorpe Fund, Inc., Savannah, Ga.
1969.
bid¬
first mortgage bonds, due
determined by competitive
Probable bidders—Dillon, Heed & Co., Inc.; Hal¬
sey, Stuart & Co. Inc.; The First Boston Corp.; Harris,
Hall & Co. (Inc.). Price—To be be determined by com¬
petitive
sub¬
scription to common stockholders in the ratio of $200
K.
ding.
with
convertible de¬
Offering —For
Co., is broker for the sale.
March 7 filed $6,000,000
Underwriting—To
Business—Manufacturer of candy.
and betterments.
Detroit
Michigan Consolidated Gas Co.,
Underwriters —None.
bentures.
may
tures, 4%
$500
and
$1,000.
Underwriter—Guardian
Corp., San Francisco.
For payment of short
or for other corporate purposes.
San Jose, Calif.
O'Briens of California, Inc.,
April 16 filed 20,000 shares of $1.35 cumulative preferred
stock (par $25), with warrants and 40,000 shares of
common stock
(no par).
Warrants for common stock
California,
(letter of notification) $146,900 10-year deben¬
series.
To be sold at face amounts of $100,
Mar. 26
Public Service Co. of Indiana Inc.
March 26 filed $11,077,800 15-year 2%%
•
Corp.
Acceptance
corporate purposes.
and
investment
for
funds
•
Francisco
San
Washington, D. C.; The First Boston
Corp. and Hornblower and Weeks, New York. Price—
By amendment. Proceeds — To be added to general
Parker & Redpath,
stockholders. The remaining 50,000 shares
will use its pro- »
sold by seven
struction of airport at Smithtown, N. Y.
company.
(5/1-8)
Minn.
St. Paul,
Price—
For development and con¬
No underwriting.
Underwriter—Robert
April 8 filed 395,000 shares ($25 par) cumulative pre¬
ference stock and an unspecified amount of common,
reserved
for
conversion. Underwriters — Auchincloss,
Inc., Brooklyn, N. Y.
(J. W.)
Mays
panies.
Proceeds—For investment.
market.
on
stocks of four constituent com¬
to redeem the preferred
Boston
March 19 filed 696,178 shares of beneficial interest.
Underwriter—Vance, Sanders & Co. Boston. PriceMassachusetts Investors Trust,
:
which will take
place of six constituent companies under the sim¬
plification plan of the New England Power Association.
Purpose—Proceeds of new debentures will be used to
retire existing debentures, to pay secured bank credits
and a note of Massachusetts Utilities Associates and
the
Under¬
^
reorganized holding company
tem is the
(letter of notification) 200 shares ($100 par)
and 1,846 shares ($100 par) preferred.
$100 each.
England Electric System
%
Progressive Air Service, Inc.', Smithtown
Branch, N. Y.
Z.
•
April 16
April 23 filed $75,000,000 of debentures, of which
000,000 will mature in 20 years and $50,000,000
Toronto, Can*
Explorations, Ltd.,
Manontqueb
New
•
be used to acquire
going business.
for the sale. Proceeds to
all the assets of McCormack & Co., a
towards
of New
common
April 14 (letter of notification) 25,000 shares ($1 par)
common; $225,000 of 6% certificates of indebtedness and
15,300 shares ($1 par) common to be issued on exercise
of the option granted by the certificates of indebtedness.
The common will be offered at $1 a share and the cer¬
tificates at face amount.
Hannaford & Talbot will be
the agent
Thursday, April 24, 194?
FINANCIAL CHRONICLE
THE COMMERCIAL &
(2244)
_
_
yolunie 165 J Number 4588
THE COMMERCIAL &
FINANCIAL CHRONICLE
(2245)
Southern
California
Edison
Co.,
Los
bank loan
Angeles
sidiary,
April 15 filed 1,653,429 shares of cumulative preferred
and 1,653,429 shares of $25 par preference stock. Under-
000,000
Textron
each,
Southern
and
for
notes issued by a sub¬
in the amount of $1-
Inc.
working
capital.
indefinite.;v..*
writers—First Boston Corp., New York, and Harris, Hall
.
notes; purchase of two
Offering
date
each of the
y: 4, Tide Water Power
■
v
(no par) common.
Under¬
writers—Union Securities
Corp.-and W.; C. Langley &
Co. are selling the stock and
also are the
principal
Unexchanged shares will be sold publicly through the
underwriters." Price—Not less than $28.75 a share. Pro¬
ceeds—To redeem unexchanged shares of old stock and
for
construction and
new
;
Los Angeles
•
bidders
(letter of notification)
stock
(par $10).
Price—$10.
Proceeds—For working capital.
Toledo
Chicago.
Company will use
shares to retire
365,000 shares
•
stock for each $1,000 of income bonds.
collateral trust bonds will be exchanged for
mon
an
equal
■
a
outstanding debt and preferred stock, involv¬
payment of $56,906,590, exclusive of interest and
Truckstell
Manufacturing
.
,
i
"
Trenton, N. J.
-t
shares
($1
par)
'
capital
stock.
Read & Co. Inc. Price by amend¬
Offering consists of an unspecified!
being sold by the company and
by
1962, and 225,000 shares
ment also covers
conversion
the
Co., Inc., Boston.
Western
Electric
Co.,
Feb:
share.
debentures.
.
Inc.
25, filed 50,000 shares
debentures
year
filed
having been replaced
J-
-
surance
($1
par)
Under¬
common.
at
same
private
[$1,000,000 12being withdrawn
time
loan
companies.]-
from
-v
*
three
1
.
in¬
/ •
Wisconsin Power & Light
Co., Madison, Wis. :
May 21 filed 550,000 shares ($10 par) common stock te
be
sold
at
competitive
bidding.
Underwriters—By
amendment.
Probable bidders include
Glore, Forgan &
Co., and Harriman Ripley & Co. (jointly); The Wis¬
Co.; Dillon, Read & Co., Inc. : Proceeds—Part
consin
of
the
shares
are
to
be
sold
by Middle
West
top holding
erence
of
'
Corp.,
company of the System, and part by pref¬
stockholders of North West Utilities
Co., parent
Wisconsin, who elect to sell such shares of Wisconsin
which
common
will
be
distributed
dissolution of North West
Utilities
to
them
upon
tks
Co.
Woodmont Country Club, Bethesda,
reserved for
Underwriter—Carver &
Price—Debentures 98; common $3.75
Dufault
Mines, Ltd., Toronto, Canada
writer—Name to be filed
share.
($1 par)
common.
Under¬
by amendment. Price—50 cents
Proceeds—For general operating expenses.
(NOT YET IN REGISTRATION)
INDICATES ADDITIONS SINCE PREVIOUS
•
(5/1-15)
by
March
Pa.
12
(letter of notification) $300,000 non-interest
bearing debentures. Price—$250 per unit. No under¬
writing. To obtain golf course property and to improve
same.
'
.
Wyandotte Worsted Co., Waterville, Me.
Feb. 26 filed 92,038 shares of common stock
(par $5).
Underwriter—None.
Stock will be sold through
regular
market
at
channels
current
the
over
market
but
at
New
not
York
less
Stock
than
Exchange
$10
per
Proceeds—Stock being sold by five stockholders.
Prospective Security Offerings
.J:
•
,
Stores,
equipment and for working capital.
Vauze
a
Auto
The state¬
Proceeds—For plant construction, purchase
Mar. 31 filed 500,000 shares
of
treasury.
offering to em¬
ployees. Price—By amendment. Proceeds—Stock is
being
sold by the four officers and
directors.
The proceeds
acquisition program.
common
York
Colony Corp., New York, and Childs,
Jeffries & Thorndike Inc., Boston.
Offering—Of the total
common 5,000 shares are
reserved for
(5/12)
common.
112,000 shares of
New
,
of
$3,950,000
of
($1 par)
jv;'if-.r
ISSUE
"
share.
r
\
»
r
H
,y
'r:
'-i/i
(Only "prospectives" reported! during the past week are
are not repeated)
given herewith. Items previously noted
■
i:
5
*
11j'i
.1- u!
:V
if.
•
<J>
-r>
United States Government,
^
.11; I
r:
;
Aluminum Co.1of America
cost of the plant replacement and
April 17, stockholders among others authorized directors
State, Municipal
to
incur
indebtedness
to
$150,000,000 at any time
delay incident to the 60 days' notice to
shareholders required under Pennsylvania laws.
without
and
•
Corporate Securities
up
Probable
•
the
improvement
underwriter, Morgan Stanley & Co.
Central
,
Illinois
Light
Co.
Blair
Co.
-
\
terms
the
NEW YORK
(
'•
,4
BOSTON
•
BUFFALO
•
•
:•
•
..:
*
•
-
/.—A.
CHICAGO
•
.
;*•
-
CLEVELAND
'
■
j
by
as
the
board
INC.
I ?• "5
■'
^
1,500,000 shares.
change presently outstanding
to
'
••
to
to
stockholders
PHILADELPHIA
•
v
•
V" •'
PITTSBURGH
y? ''
•
ST. LOUIS
•
SAN
rfvV
FRANCISCO
new
of
at
such
directors
present intention of
the
shares until such time
as
time
may
directors
new
and
determine.
not to
It is
issue
the
The proceeds of
stock would be added to the
pany's general funds and
such
upon
the present 5 V4% cumula¬
tive preferred stock has been retired.
the sale of .the
used
,,
•
•'
May 7 the SEC will consider company's application to
April 22 stockholders voted to create 200,000 shares ($100
par) convertible preferred stock which can be offered
common
program.
increase authorized (no par) common stock from 250,000
American Brake Shoe Co.
to
com¬
defray part o# the
>A
under way.
writers—First
Dec. 20 filed $700,000 15-year convertible debentures due
R. I.
It'U
»J
cap¬
V
.
Utah Chemical & Carbon Co., Salt Lake City
of
shares
now
Whites
Bids—Bids for purchase of securities expected May 12.
^
payment
of
burse its
Co. and Iron Range Light & Power Co.
per
.
J
expansion of business.
will be used in connection with this
working capital.
^
^
J
.
^
!
April 16 (letter of notification) 1,500,000 shares
(no par)
common.
To be offered for
subscription to stockholders
of record May 27 at
$40 a share. Rights expire June 27.
No underwriting.
To reduce indebtedness and to reim¬
was organized Feb.
26, 1947 to acquire the capital stocks
and assets of three Michigan operating utilities—Hough¬
ton County Electric Light Co., Copper District Power
300,000 shares ($25 par) 5% convertible
.
•
con¬
body & Co.; Merrill Lynch, Pierce, Fenner & Beane and
Paine, Webber, Jackson & Curtis (jointly); Blyth &
Co., Inc.; The First Boston Corp.
Price—To be de¬
termined by competitive bidding.
Proceeds—Company
Fidelity Union Trust Co., Newark, N. X
Proceeds—For
.
—
>.
_
Inc.
equipment and facilities expansion
determined- by competitive bidding.
Probable bidders
include Halsey, Stuart & Co. Inc. (bonds); Kidder, Pea-
Underwriters—Blair & Co., Inc., New York,
.
1,200,000
Proceeds
program
Manufacturing Corp., New York
Upper Peninsipla Power Co.
Offering date indefinite.
•*>
filed
.
Lines,
and the total number of shares
presently stated!
will be reduced if the
offering consists of a smaller num¬
ber of shares.
Company will use its proceeds estimated
at a minimum of
$6,500,000 together with a $7,500,000»
bank loan, toward
payment of its promissory notes and
to finance company's
Cleveland
March 6 filed $3,500,000 first mortgage
bonds, due 1977;
10,000 shares ($100 par) cumulative preferred and 180,000 shares ($10 par); common.
Underwriting—To be
Maxwell, Marshall & Co., Los Angeles. Price by
• :i •
Co.,
working
ital and
par common
Textron Inc., Providence,
c';
,
Air
Underwriter—Dillon,
;
Aug. 28 filed 195,000 shares common stock (par $1).
Underwriter—C. K. Pistell & Co., Inc. Offering—Com¬
pany is selling 45,000 shares, and eight selling stock¬
holders are disposing of the
remaining 150,000 shares,
^rice—$10.50 a share.
Proceeds—From 45,000 shares
sold by company will be applied to
working capital
J **i 2*1'
27
ment.
the exercise of warrants up to Jan. 15,
1950, at $3.50 per
($50 par) cumulative pre¬
prior to May 1,
1957.
Underwriter—Eastman, Dillon & Co., New York.
Price by amendment. Proceeds—Company will use
$375,€00 of proceeds to pay outstanding bank loan to National
City Bank, New York, and $250,000 to pay a short-term
.A;..C'.J/.-T
Nov.
share and 200,000 are reserved for the conversion of the
preferred. Underwriters—Names by amendment. Price
$5 per share for preferred. Proceeds—For
Propane Gas Corp. (5/5-9)
ferred, convertible into $1
amendment.
..
Western
preferred and 230,000 shares of common (par
50c). Price to public for preferred $5 per share. Em¬
ployees will be permitted to purchase preferred at $4.50
per share. Of the common 30,000 shares are reserved for
con¬
March 28 filed 50,000 shares
and
the basis of one
share for each five
presently held.
The remaining
70,339 shares will be offered
publicly through under¬
writers.
Price by amendment.
Proceeds—To reduce
bank loans and to' retire a
purchase money trust deed
note.
...>v
■
•
new
Nov. 4 filed 200,000 shares (par $l) '25c cumulative
Street & Smith Publications, Inc.
July 17 filed 197,500 shares of common stock. Under¬
writers—Glore, Forgan & Co. Offering—The offering
represents a part or the holdings of the present stock¬
holders. Indefinitely postponed.
V
./
*
^
preferred.
Weber Showcase & Fixture
Co., Inc., Los Ang.
filed 87,010 shares
($5 par) common.
Under¬
writers—Name to be supplied by amendment.
Offering
;,t—Of the total, 16,671 shares will be offered for
subscrip¬
tion to Weber's common
Stockholders on
vertible
Segal
common held.
Unsubscribed shares of preferred will be
offered publicly at $10 a share. Proceeds—For additional
working capital.
'
Feb. 28 filed
Underwriters—None.
April 14 (letter of notification) 3,534 shares of Class A
common and 3,591
shares of Class B common.
Price—
$40 per unit. No underwriting. For working capital.
for subscription to common stockholders of
Segal Lock
& Hardware Co. Inc.,
parent, at $9 a share in the ratio
of one share of preferred for each 30 shares of
Initially,
For
■
ment
vertible preferred. Underwriter—Floyd D. Cerf Co. Inc.,
Chicago. Offering—The shares initially will be offered
& Co.,
offered
:
William A. Coulter, President and
Director. The amount*
being offered by each will be stated
definitely by amend¬
•
The 4%
March 25 filed 25,000 shares of 60 cents cumulative
f Swern
($50 par)
Mar, 31
dividends.
Inc., New York
Balances will be added to
shares
number
U. S. Television
bank loan to
30,000 shares class A
5s.
Strauss Fasteners
,
4,000
ing
collateral trust 20-year
bonds and 31,200 shares ($1 par) common stock.
Offer¬
ing—To be offered in exchange for the 5% income bonds
and the 4% collateral trust bonds.
The company will
give $1,000 of the new bonds and 40 shares of new com¬
Suburban
Brooklyn, N. Y.
contributed by its parent, Cities Service
Co., will be used
Starrett Corporation
new
Vernon.
to redeem
April 23 filed $2,686,000 5%
amount of the
Mt.
be
Halsey,
only); Blyth & Co., Inc.; and
Smith, Barney & Co. Price to be determined by
competi¬
tive bidding. Proceeds—Net proceeds
together with $4,500,000 bank loan and if necessary, the $5,000,000 to be
being sold by certain stockholders.
are
Inc.,
/>
(5/1)
,
Underwriters—To be determined
by competitive bidding.
Price
York
Products,
publicly through Theodore Blanchard, New York.working capital.
\
;; \ .
Edison Co.
(O.)
Vitamin
•5% convertible preferred.
Price—$50. For subscription
to stockholders.
Unsubscribed shares will
,
Probable bidders include The First
Boston Corp.;
Stuart & Co. Inc. (bonds
by amendment.
Proceeds—
proceeds from the sale of 135,000
$1,500,000 bank loan. The remaining
a
i ;w
$32,000,000 first mortgage bonds, due
1977,
160,000 shares of ($100 par) cumulative
preferred.
and
Railway Equipment Mfg. Co., Chicago
Co.,
-
Oct. 25 filed
March 28 filed 500,000 shares ($1 par> Common.' Under¬
writers—Smith Barney & Co., New York; and The Illi¬
nois
New
PrbA:;'y'■ f.r*}.J;).:ix
April 22
include
Halsey, Stuart & Co., Inc.;
Blyth & Co., Inc.; Union Securities Corp.
Proceeds—
Part of the proceeds will be used to redeem $3,762,000
of outstanding first mortgage bonds at 105^4.
Balance
will be applied to capital additions.
Standard
Tilden Commercial Alliance
Inc.,
(4/30)
'
Walker
April 18 (letter of notification)
engage others to sell the stock.
pffering—sTo the public. Price by amendment. Proceeds
—Proceeds go to the
selling stockholders.
March 28 filed $5,100,000 first mortgage bonds, due 1977.
Underwriters—To be determined by competitive bidding.
Probable
•
underwriters. They will
,;i
improvement purposes^
Southern California .Water Co.,
Acquiring and developing mining properties.
(5/2)
Mar. 31 filed 157,868 shares
stocks for each share of old stock held.
new
Co.
Victory Gold Mines Ltd.,
Montreal, Canada
Nov. 13 filed 400,000 shares
($1 par) capital stock.
Uikderwrit®r~None as yet. Price—25
cents a share.
Pro.peedSr-For .developing
mining property.
Business'
Co.
(Inc.), Chicago.
Offering—Shares will be offered
in exchange for outstanding Series B, 6%, and Series C,
5%%, preferred stocks in the ratio of one-half share of
53
Commonwealth
800,000 shares.
their
The company also asks permission
&
210,000 shares, owned
Southern
Corp.
(parent)
into
Central Illinois and Commonwealth, in
joint application,
said
the
transactions
proposed
will facilitate Commonwealth's disposition of its Central
Illinois
more
common
stock
holdings and will make the stoqk
marketable.
.'j-'.?.'
(Continued
;
/
>
on page
.
/
54) ' \
.
THE COMMERCIAL & FINANCIAL
(2246)
54
Mid-Continent Airlines,
•
(Continued from page 53)
Greil
•
Drug
& Chemical Co.
to
provide working
capital.
with New York
stock, proceeds
^
'
Overall Co.
April 18 reported that Homer T. Hudson, President of
company has sold his common stock interest in company
to Kirchofer & Arnold, Inc., investment brokers for be¬
•
High Point
(N. C.)
*-
$500,000 and $1,000,000.
tween
terials, etc.
creating an issue of
75,000 shares of preferred stock (par $100), which will
be publicly offered.
Of the proceeds $5,000,000 will be
used to retire outstanding 4V\% preferred, the balance
for working capital.
Probable underwriters: Goldman,
June 9
stockholders will vote on
Lerner
•
Stores
certificates,
•
Corp.
Ohio
mon
are
from 125,000
Scene as UFE
Limited Arbitration of Wages at Kidder
by striking employees and is un¬
der no obligation to take back
strikers at the conclusion of a
."
letter
concluded
1962.
Inc.;
with
the
of a strike was
strike of course was
wrong,
called.
No
throwing
by
make
City's Intervention
police
lines
certain that the Wall
employer-group had really
very
Street
exhausted
Power
Southern
Pacific
new
dent of
"As
statement:
the Exchange, I have
out in the negotiation
of the pres¬
must serve all mem¬
bers of the Exchange, and through
them the public, without discrimi¬
ent contract,
all
possibilities for a
peaceful settlement of the dispute
before
actually
receiving
real
honest-to-goodness help.
nation. I regret
that the employees
them
upon
to
withdraw
The union imme¬
diately charged the Curb Ex¬
change itself was responsible for
the petition but the Curb dis¬
The
involved.
issues
calling
from the union.
of
mand
the
grievance machinery to
under the terms of the
It
contract.
many
is
will
missed
not
to their old
want
to
to
an
high
return
is
would certainly be in¬
dent of the AFL
well
represented by Such men as
if
as
severed
they had never been
this important
with
change that the clauses permitting
cancellation of contract by the
William
Collins, Regional AFL filing of a 30-day notice are to
knowledge of it, Director, and Martin Lacy, Busi¬ be eliminated. The Exchanges and
pointing out that they became ness Agent for one of the local the union are "to negotiate new
aware of its existence only when
teamsters' unions and son of the contracts expeditiously." The
Exchange. Prolonged strikes are
they were asked about it. It ap¬ more famous Martin Lacv, Presi¬ union
contracts
with
the
Ex¬
costly both to employers and em¬
pears, however, that some union dent
^of the Central Trades* and changes run to Jan. 31, 1948. Mr.
ployees. The Exchange will keep
members actually did sign the Labor
Council, comprising 750,000 Whelan said it was the union
open in the event of a strike in
petition and that it took some AFL members in the city. The which requested the elimination
order to continue to serve the
fast talking on the part of union
U.F.E. itself, at the conclusion of of the cancellation clauses from
investing public."
officials to get them to renounce the
two-day mediation meetings, the contracts.
their
signatures.
Mr. Whelan, publicly admitted the assistance
Union's Strategy
Though both the union and
pointing out that the origin of it had received from high AFL
A. M. Kidder & Co., following
The union's plan was, by giving the
petition had not been estab¬ officials in arriving at its own
the reading aloud of the commit¬
the
N.Y.S.E. and Curb 30-day lished, did announce at the time
decisions leading up to the settle¬
tee's report by Mr. Bennett to the
notices of cancellation of contract, that he would ask Mr. Schram
ment. Mr. Whelan also admitted
union
and firm representatives
as
permitted under the terms of and Mr. Truslow to see that such
that Charles U. Bay, Ambassador
the contracts whenever a member
and newspapermen at about 12:15
petitions were not distributed.
to Norway and a senior partner
firm such as A. M. Kidder & Co.
a.m. yesterday
(Wednesday), ex¬
of the firm of A. M. Kidder & Co.,
refused to arbitrate a dispute, to
Cooperation of Exchanges
pressed their pleasure at having
had been reached by wireless tele¬
strike also against the two Ex¬
reached a peaceful settlement with
Like the union, all the other
phone for his opinion. Mr. Bay is
the help of city mediation com¬
changes and so employ them as principal parties to the dispute,
on his way across the Atlantic to
clubs, as it were, to beat a con¬ including the N.Y.S.E. and the
mittee, yet no one seemed over¬
attend a directors' meeting of the
tract out of A. M. Kidder & Co.
joyed with what had been accom¬
Curb, consented to "cooperate"
Export-Import Bank.
and, so the union said, against with the city mediation committee
plished/Though hot one of them
five other firms with which it in its efforts to find a
would have changed the phrasing
peaceful
To Arbitrate Wage Issue
had an argument, Harris, Upham solution of the issues but chiefly
or
the content of the terms of
The wage issue was resolved
& Co., Bache & Co., White, Weld the
settlement, yet no one seemed at
wage issue as this one-ques¬ on the
basis cf limited arbitration.
& Co., Asiel & Co. and Drysdale tion seemed
all happy over the outcome. For
paramount to all oth¬ It was
agreed that an arbitrator,
& Co. One report, however, was ers and conferences commenced
the union, the settlement is prob¬
being involved in a disagree¬
ment between the union and one
of the 600 member firms of the
are
mentioned these
other five firms in its propaganda
that
so
the
union
that in the event of a quick
A. M. Kidder &
settlement with
Co., it could still have an excuse
Exchanges to
claimed
any
who
9:45
Monday when Mr.
Bennett and Edward C. Maguire,
director of the city's Division of
Labor Relations, met with the
at
a.m.
committee.
Mr.
Schram
and
Mr.
should
be
picked within 48
hours, should decide which of the
A.
Kidder
M.
should get a
much of
a
&
Co.
employees
raise in pay and how
raise should be granted
ably very much of a "face-saver."
After all, the union has yet to
it
prove
has
any
force these five firms also, if pos¬
How¬
contract with such
a
not
really
clause
a
contract but just
a
"memorandum," that, in effect,
a
such
clause
a
gives; the
merely
union power to use the Exchange
as
club
a
firm
against
which
with
any
member
may
it
have
an
argument.
Just
the
before
city mediation
entered
committee
into
dis¬
the
union
and
A. M. Kidder & Co., the fight,
particularly that phase of it con¬
cerned exclusively with the Ex¬
change, was taking on the nature
of
a
secondary
boycott.
The
union's intended.use of the Ex¬
changes against A. M. Kidder &
between
pute
the
and the union's
Co.
intended
use
of the members of another union
—the
of the S. I.
seamen
for
purposes
be
said
U., AFL,
picketing—could
of
constitute
to
the
very
and woof of secondary boy¬
warp
cott tactics. The House Labor
is
it
be
to
hibit
the
would
recalled,
of
use
in
boycott
the
Bill,
pror
secondary
disputes.
labor
-
Prepared to Fight
Firms Were
Had the strike materialized and
had the union
going
was
done
do,
to
as
it said it
against
strike
other firms in the "Street" which
it has been
trying to organize, it
would have met with the severest
kind
of
opposition. Bache & Co.,
which
had
been
singled out as a target for on¬
slaughts by the union, had warned
its employees that it was. already
for
instance,
over-staffed
if
that
and
anyone
picketed the company's premises
in
sympathy for the union, he
only make ;it that much
would
easier for
to reduce its
firm
the
staff because the firm would drop
him from its
employ. The U.F.E.,
held, does not repre¬
employees of the com¬
the company
sent
the
The union has held that it
pany.
the
inherited
has
another
AFL
appreciable eralist,"
strength in the "Street," outside
of the Exchanges anyhow. When
the union can think of picketing
in each case. No employee is to
Truslow, both of whom had pre¬ receive
an increase exceeding $25
viously refused to intervene in a
without enlisting the help of sdamonth, nor are all raises, in¬
sible, to come to terms. The union the U.F.E.-A. M. Kidder & Co.
man
or
others, it will probably
agreed
to postpone the strike, dispute, saying it was outside of cluding those already granted to then be in a stronger position to
40 employees, to exceed $25,000 a
however, when the city mediation their province to do so, met with
bargain with employers generally.
committee entered into the pic¬ the committee on call the two year in the aggregate. All raises
ture, at least until the committee days it found it necessary to con¬ granted, however, are to be retro¬
Strike Clause Eliminated
active
had had the opportunity to probe
to March 1. Across-thevene,
thus decidedly, reversing board increases are barred
In a sense, the New York Stock
by the
the
possibilities for a peaceful their original stand. Mr. Truslow,
terms of the settlement. All other
Exchange gained most from the
settlement. M. David Keefe, Pres¬ in
reply to a wire from Mr. Ben¬ issues between the union and settlement since whatever may
ident of the union, made it as a
nett, himself wired back: "I shall A. M. Kidder &
Co. are to be have been the union's reason for
condition
of postponement
that be delighted to meet with the
ironed out by representatives of asking for the elimination of the
the union's contracts with the Ex¬
committee as suggested and al¬
the union and the firm within a 30-day cancellation clause from
changes should remain in force though no dispute exists between
during the period of mediation. the New York Curb Exchange week, that is, by next Wednesday. the contract, the clause was a
Left somewhat hanging in the source of considerable embarrass¬
Walter Winchell caused somewhat
and its employees I can assure
air was the question of what is ment, to say the least, to the Ex¬
of a stir Sunday night when he
you that we will cooperate with
to be done about the 30 employees change. This is also probably true
mentioned the possibility of an the committee in
every way pos¬
immediate strike in view of the
recently dismissed by A. M. Kid¬ of the Curb. Wall Street stood
to walk out of the
given
the feeling is strong now
that a 30-day cancellation clause
does not belong in the contract,
that
are
A. M. Kidder & Co.
continuing the old con¬
tracts
he
ever,
thus becomes something
one.
The union,
com¬
AFL, possibly even
should
provisions of the contract.
academic
of course,
union
the
this "out" in view of the no-strike
whether the 30
of
work
feel
jobs since they have
employment.
The
to return to
of
refunding. Prob¬
dis¬
employees
other
question
smaller amount of
a
that
understood
the 30
of
found
William Green, Presi¬
personally, was
including
J
Co.
first mortgage bonds to effect the
city intervention but it was
Presi¬
terested in the restoration of the
quick nevertheless to avail itself
al¬
balance between union and non¬
of the city's offer to intervene.
ways endeavored to treat employ¬
union members in the employ of
That there was serious disaffec¬
ees fairly.
I believe in collective tion
the company that existed at the
AFL Helped to Win Accord
in the union's ranks which
bargaining and have sought,
time of the State Labor Board
might have led to the union's de¬
It is not too surprising that a
through the bargaining orocess, to
election last October.
sire for intervention—a condition
improve the relationship of the of disaffection of which the union fairly acceptable agreement among
the disputants was reached though
Exchange and its employees. It is
officials were apparently unaware
Exchange Contracts Continued
uncertainty over the eventual out¬
not the function of the Exchange,
as they seemed to be caught by
So faifas the Exchanges are
come
of
deliberations
did
en¬
however, to interject itself into
surprise when it was uncovered shroud the conferences until the concerned,
such
differences
as
a dispute concerning another em¬
—became
evident
on
Monday
arose between the union and them
very end. A mighty array of tal¬
ployer. The Exchange and its em¬ when a
petition was circulated ent was brought to bear upon the were in their turn resolved on the
ployees, as I repeatedly pointed
among Curb Exchange employees,
basis of
following
for
& Light Co.
able bidders include Kuhn, Loeb & Co.; Halsey, Stuart &
Co. Inc.
;^::v
be set up
re¬
around the Exchanges, wanted to
The union insists it did not ask
Corp.
plans to sell, probably next month
security
general
evidence
district
financial
cently—and it could be that the
city fathers, before exposing them¬
selves to the odium which they
erally
Co.
company proposes to refund $24,767,000 San
Francisco Terminal 1st mtge. 4s, due 1950.
Company
stockholders through
would incur in labor circles gen¬
acy
Welcomed
common
have been very much in
the
Electric
Rubber
Pennsylvania
•
New shares
shares to 200,000 shares.
around
&
April 19
Proposed financing will depend upon
(Continued from page 5)
The
to
Co.
1
&
O'Suliivan
•
Water Service Co.
Third Union Enters Wall Street
.
May
Stuart
Halsey,
ma¬
April 21 company reports it expects to arrange some'
permanent financing later this year in connection With
its construction program which amounts to $27,000,000.
Bids will be received April 29.
to be offered first to
^rights.
exceed 4.30%.
.
include
Gas
supply of construction
provide funds for expansion of company's plastic division.
April 17 stockholders voted to increase authorized com¬
will vote on authorizing 150,000
shares of new preferred, of which 125,000 shares (par
$100) may be issued initially.
Dividend rate is not to
strike.
•
Hartford RR. (4/29)
annually
$351,000
Salomon Bros. & Hutzler.
April 29 stockholders
Wins
due
bidders
Probable
Oklahoma
the
■
April 22 stockholders voted to increase preferred stock
from $750,000 to $3,000,000 and authorized common from
'300,000 to fJOO,000 shares.
Increase in eommoR fs tfr
of selling $5,265,000 equipment trust
of 1947 for purpose
Brothers.
Sachs & Co.; Lehman
New Haven &
York,
•
;
May 15 stockholders will vote on increasing the author¬
ized 4%
cumulative preferred stock (par $20) from
870,605 shares to 1,500,000 shares.
April 21 the Federal Court at New Haven, Conn., gave
permission to the trustees to create an equipment trust
Jewel Tea Co., fnew
•
New
conditions and
market
Inc.
recapitalization plan call¬
ing for an increase in authorized common from 500,000
to 1,000,000 shares and a charter amendment to permit
the issue of 200,000 shares ($25 par) preferred. At the
annual meeting on May i, corporation will consider the
plan to sell to officers and employees 30,60! shares of
presently authorized unissued common.
The price of
this offering would not be higher or lower than the
asked price from Feb. 3 to May 1, 1947.
The directors have proposed a
April 21 reported company negotiating
underwriting firm for sale of common
Thursday, April 24, 1947
CHRONICLE
dispute
union,
of
"Fed¬
the
longer active in the
no
financial district, which six years
ago
won
tions
a
Board
National Labor Rela¬
election against em¬
ployees of that firm.
.......
..-v
^
Another
Union
^
Active
This last week,
AFL
too, saw another
the
Office i Em¬
union,
ployees International Union, Local
_
sible."
der & Co.
fact that Mr. Schram had said the
contract with his Exchange could
not
be
extended beyond
midnight
unless
the
Sunday
union
re¬
scinded its cancellation order by
that
time.
However,
Winchell's
prediction concerning the immedi¬
The Exchanges, of course, were
depending upon the city for po¬
protection—abundant police
protection was apparently forth¬
lice
coming
too,
as
iudged from the
number of uniformed men who
(29 of whom
were un¬
firmly—is
Mr,
standing
Schram
firmly—-be¬
the
advis¬
members). According to the
union, it has been agreed before
hind
the State Mediation Board to sub¬
union
mit the matter to artrtr^^"
cancellation clause in the contract
ion
"v
arbitration, however, is apparently
meant referring the matter to tne~
ability
when
of
its
he
members
on
having granted
the
request for the 30-day
did.
of
Some
the
influential
Exchange
still
153, enter the Wall Street ,jseepe—
again, it must be said, because it
active there
once before,, last
A'3\feefdre^ the'unioii'is'try*
ing at the moment to organize the
employees of the Public National
was
fall.
main office
whose
Bank
Broad
Street
and
is
which
branches in this city and in
at
37
has
25
Brook¬
lyn, among whom it lost a
Labor Board vote last "fall.
though the
union
seems,
that
Al¬
UFE is a -little be¬
wildered at the activity of
AFL
State
in
its
another
it
territory,
according to the O. E.fI. U.
the UFE and itself have di¬
vided the New York
financial dis¬
trict into two sections.
The O. E.
f
Volume
I. U.
Number
165
is to
concentrate
THE
4588
on
Guild, ClOj is of
organ¬
izing the employees of the banks
UFE
the
while
its
continues
banking
and
ef¬
brokerage industries of the Wall
forts to organize the brokerage
in¬
The Financial Employees
dustry.
trying to
course
the
both
Organize
COMMERCIAL' &
Street
/
area.
the 1945
total
over
1945 and
ament
Italian to be seated
*
Fund's executive directorate.
on
*be decisive
Her vote to
"Chronicle")—The problem of
an article on page 1935 of
thd "Chronicle" of April 10 is meeting different treatment in the two
institutions.
The* Board of Directors of the Fund recently cut the
Gordian knot set forth in that article and voted to proceed with an
members
vannah
of March, , 1946,
and having an aggregate of not
less than 4,000 votes.
In other
words, the Fund has decided to
interpret Savannah Resolution No.
10 as requiring the holding of an
meeting
election
While the Fund's decision of last
"unanimous,"
as
the fact is that British and other
executive
dirqctors
representing
France, Greece, Canada, Belgium
and
the
Netherlands
argued
The Ameri¬
against the decision.
can, Chinese, and the two Latin
American executive directors fa¬
vored
the
decision
the
of
course
to the
which will
month
a
seating of
or
Italian
an
in
lead
so
board of executive directors.
The
apparent "unanimity" referred to
above
'J.',.-
be likened to that at
the subject of loca¬
may
Savannah
,
on
represent the new
next
is
general directors
to
not
1949.
"-*
"1
!
and
the
on
directors.
tive
British
t
and
Bank,
that
In
most
were
the
case
strongly
op-
i posed, but being powerless to in-
sist, 4n the end accepted the US
|
decision.
Probably before this appears in
the^ World Bank executive
f print
i directorswill
have
whether to hold
'
voted
election of
an
additional executive director
I
or
1*
votes
on
an
now
favor of
an
attitude
is at
election
pounds
of .acetate) and
totaled 15,500,000
pounds (11,300,000 pounds of visCose and
tate).
the board within
:•—-when
announce¬
the
Bank
is
:i portant decisions
i flotations—are the
peak in 1944 by 7% and the 1939
output by 29%. The output of
100% spun rayon fabrics exceeded
SITUATIONS
| rectors hold the balance of
f If the US view prevails
not
known, but
a
plants
rayon
planned, indicates that
production
control
the
and
of
lieved to be the first
post-war
listing of its kind, 29 countries are
now producing
rayon, 3 more thatn
condition
is
Union,
war
the
with
it
is
the
end
as a
WANTED
rayon
Wall
years
SITUATIONS
capable assistant,
the-counter house.
di-
Japanese
to achieve
it
the
experience,
available for over-
by
DIVIDEND
declared
of
to
acquired
May
In*
Place, New York 8, N. Y.
5,
of
SANFORD B.
office
A
experience
in
corporate
and
coordinator
advanced
in
modern
icle,
&
25
Have
15, Com¬
Financial
Park
York, April 22, 1947
quorterly
(75c)
dividend of Seventyshare on 1,298,200
per
Company for the fiscal year ended December
31, 1946, payable on Monday, June 16,
1947, to stockholders of record at the close of
business
Thursday, May 15, 1947.
Checks in payment of this dividend will be
to all stockholder; of record at their
addresses as they appear on the books of the
mailed
Company unless otherwise instructed
Trust
departments.
Has
experience as an ad¬
valuable
and
,
of n^l profits of the
in writing
J. J. MAHER, Secretary.
is
business
methods.
Agreeable
personality,
with training and ability to handle
difficult problems.
Chron¬
Place,
Secretary.
today been
affairs
ministrator
had
Cents
declared out of the surplus
been Executive head of Trans¬
mercial
WHITE,
shares of Common Stock without
par valu; of
Southern Railway Company, has
and
handling
securities
is
fully
capable of making satisfactory ad¬
justments of stocks and bonds.
New
regular
five
Capable of making prompt and sat¬
isfactory
decisions
on
important
matter? and is an excellent. corre¬
spondent. By reason of long years
and
both.
been
close
the
Railway
Assistant to Executive
experience.
W
the
on
has
Southern
8, N. Y.
fer
or
at
Company
for out-of-town
Box
record
Box
Has
accounts.
dollar and
share
1947,
DIVIDEND NOT'CE
of
manage
one
York
New
the
Unlisted Trader
to
of
1921, lately
cial Chronicle, 25 Dark Place,
WANTED
years
HARVESTER
115
1947.
Kew
Eighteen
raw
NOTICES
stockholders
business
424, Commercial & Finan¬
New York
in¬
imports of rayon
COMPANY
Stock Exchange house.
JB
to
necessary
Quarterly dividend No.
available.
t" since
employed
Box B 417, Com¬
Chronicle, 25 Park
be
materials and coal."
WANTED
Unlisted security trader and
clerk
about
this modest out¬
even
seventy-five
cents
($1.75)
per
preferred stock payable June 2,
r e e
of
industry has
rayon
INTERNATIONAL
"S t
of
60,000,000 pounds, but
will
crease
30,000,000
TRADER
order
level
a
extent
an
been set at
part
from
commission
Street
mercial & Financial
the
production
approximated
to
The Soviet
war.
SITUATIONS
York
Secretary
Fifteen
of
put,
1946
to
8i/2%. Production goal for 1947 in
that
presumed
reparations due her
"Japan's total
in
unknown, it is
however,
utilized
Japan.:
believed that most of them wfere
either destroyed or heavily dam¬
aged during the
Y;,
Russia will regard these
reduced
353,000,000 pounds, but due
to a shortage of raw
materials, the
reduced
capacity is only being
"Two Korean rayon
plants, and
in Manchuria also came under
Russian
been
about
one
levels.
was
has
Ger¬
been shipped to Russia,
v,
large portion of the
a
rayon producing indus¬
scrapped, converted or
destroyed during the war, Japan's
annual rayon producing
capacity
being
some
sta¬
-
-
Japanese
try
re¬
or
are
yarn
were
.
"Because
territory, is
new
filament
were
■
•
rayfen equipment has? already
man
"According to a new world di¬
rectory of rayon producers, pre¬
pared by the 'Organon' and be¬
rent
destruc¬
recent Russian
announcement that 14
stored
erably greater than in the 1943-45
period but only a fraction of pre¬
war
of
now
firm. Now connected. Salary,
and
executive
was
extent
and moved to Russian
during
9,000,000 yards, consid¬
Competent
or so
loans
mix¬
during 1946 reached
a new record total of
1,811,000,000
yards,
exceeding
the
previous
making im-
on
1946
ple fiber..
The
areas
tion, or definite information con¬
cerning the number dismantled
velvets, up¬
holstery and tie fabrics was 44%
over 1945 and
slightly over 1939.
goods
pounds
327,000,000 pounds
istration.
were 65% above
1945 and three times that of
1939,
while the output of
"Silk
000,000 pounds of which 214,000,-
rayon
000
fabrics
Italian
an
month
a
rayon
German
the
rayon plant of the Finnish Com¬
"Annual production of rayon,
nylon and silk and related broad
doubt¬
immediate elec¬
tion, which would seat
on
Bureau's
part further said:
this writing
ful.- Opposed to an
;«
4,200,000 pounds of ace--
The
ment in
India's
now.
over
15
in
and
totaled 224,900,000 pounds, known, and therefore the direc¬
than was shipped in the
tory shows the available pre-war
period in 1946. March fila¬ information.
ment yarn shipments amounted to
"Prior to the war, the Russian
62,700,000 p o un d s,« (44,900,000 rayon . industry
presumably was
poundsof viscose-f cupra and 17,- made up of 5
plants. While cur¬
1
I
8%
was
pounds staple. This contrasts with
the prewar peak in 1938 of
541,-
under Russian and Polish admin¬
fabrics
the pre¬
more
The
will
rayon
to
filament yarn and
21,000,000
was
Germany, Russia
over
55
pounds, 9,000,000 pounds of which
Isth¬
Karelian
located
access
plants
same
US and Chinese
certainly be cast in
later.
spun
victory
had
eries
woven
I
.
Rayon Shipments Up ^
800,000
functions
remunerations of tlfe execu-
until
V.■■■■
''i•
tion of the head offices of Fund staple shipment
| and
held
be
-V."-
-
15% below the
the
to Russia in 1944. Following
mus
the
when
Osakeyhtio,
Finland ceded
Domestic shipments of rayon in in 1939. When new
plants are*cdmMarch totaled 78,200,000 pounds,
pleted
in
Australia, Bulgaria,
4% over the corresponding month
China, Cuba, Egypt, India, paleslast year, according to the "Rayon
tine, and Venzuela, there will be
Organon," statistical publication of 37 rayon producing countries in
tfee Textile Economics Bureau, in the world.
The 'Organon' notes
its April publication. In an an¬ that the
present status of the ray¬
nouncement April 9, the Bureau on
industry in the Soviet Union,
Stated that for the first; three as well as those areas under the
months of the year, rayon deliv¬ direct control of
Russia, is not
8%
the
on
The
election
now.
week is described
i
fore.
and
(2247)
Kuitu
pany,
tures and blends
(Special to the
one additional executive director to
admitted since the Sa-?^—•——
was
output. Production of
Italy in the Fund and Bank referred to in
jelection of
the
and
vious year and 7M> times the 1939
~
WASHINGTON
17%
output. Output of fil¬
during 1946
several controversial issues.
on
by
1939 output by 7^%. Production
of 100% rayon filament
yarn fab¬
rics showed only a small increase
record 1941
1 Fundj Holding an Election; Bank Abstains
FINANCIAL CHRONICLE
New
Write
Box
Financial
York 8, N. Y.
New
power,
B
423, Commercial &
Chronicle, 25 Park Place,
8, N. j.
York
in this
j matter, the British and those who
share
their stand
happy.
will not
In Britannia's
be
case
too
one
TRADER
is
Wishes
the
opinion
same
British
still
feel
still."
Financial
The
.
that
orders
securities.
*
of
position
execute
f reminded of the saying: "A wom¬
an convinced against her
will, is
they were
right at Savannah in wanting the
headquarters of the Fund4 and
Bank, or at least'of the Bank, in
New York
to
and
*
B
within
and
k's
others
*
the
the
woo
time
to
the
The Board of Director* of thl*
M213, Commercial &
25 Park Place,
-
has declared the
MANAGER
Bookkeeper
Box
G47,
Financial
prospct of
Italian vote
Commercial
interest.
3'/*% CUMULATIVE
87'/j
'
.
*
be
and
Chronicle, 25 Park
me
five minutes to prove how my services can
especially
Box
valuable
to
you
this
in
trying
87 V2 cents
per
period.
.
a
po-
Even the Fund's decision of last
;
week
not
was
reached
without
'considerable
f
wrangling. Resolu¬
tion « 10 ' was passed for India's
sake/with quite different circum-
;
stances in mind.
It
was
S
rv$itiana which
wouldmake Italy
•Bank
beards
for
such
scattered
'
int^Hest^jas those of Denmark,
VenezueiayColombia (Bank only),
'
and
Turkey.
Trading Assistant
Experienced
which
sighed
up
month,
does
not
this situation; nor does
which
has
the BW
are
now
figure
in
Australia,
When there
another 4,000 votes, these two
countries will participate; not be¬
WANTED
ness
May 2, 1947,
STEPHEN L. UPSON,
Secretory
wire
growing retail following.
Box F 418
Commercial
Park
& .Financial
Chronicle,
Place, New York 8, N. Y.
25
We Need
r
MEETING NOTICE
NORFOLK
HELP WANTED
AND
WESTERN
RAILWAY
COMPANY
:
Three Salesmen
Roanoke, Virginia, April 2, 1947.
NOTICE
OF
ANNUAL
MEETING
OF STOCKHOLDERS
l|rlTRADERi::'ll
| a WANTED ||
=
High grade over-the-counter
s
an
experienced trader in
The Annual
To
cover
established
territories
in
Ohio, principally
Ohio banks and bankers with whom
familiar.
For
the right
men
we
we
are
already
folk
to
(2)
Commercial
&
Box K
offices in
Cleveland, Toledo and Columbus.
un-
426,
2
§j
Union Central
Building
OHIO MUNICIPAL BONDS
Cincinnati 2, Ohio
of
Nor¬
will
be
to
four
empower
of
its
and
shares
and
act
a
term
of
a recommendation of ttie
to amend the Company's
the Company to effect
present Adjustment Pre¬
Common
for
Stock, respectively,
share basis, and to
resolutions to effectu¬
one
upon
ate such Charter amendment and issue and
exchange of stock.
(3) to act upon a proposal to amend the
By-laws of the Company to increase from
twenty dollars to fifty dollars the fee paid
J. A. White & Company
each
Director
tended.
Place, E
.
Stockholders
ness
at
TiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiE
a
Stock
consider
IN HIGH GRADE
Company
Directors for
four
upon
Directors
stock-split
on
SPECIALISTS
Stockholders
Railway
act
of
Charter
a
ferred
Financial 2
E Chronicle,
25
Park
E New York 8, N. Y.
to
Board
open
Western
(1) to elect
three years,
should be willing
listed "securities. Good salary 2
2 and commission.
and
Meeting of
held, pursuant to the By-laws, at the principal
office of the Company in-Roanoke, Virginia, on
Thursday, May 8, 1947./&t, 10 o'clock A. M.:
—
2 house desires the services of E
only
decided to accept
agreements.
HELP
serviceman
Small
but
'
this
over-the-counter
expert on teletype.
Operated direct
with
out-of-town
branch
office.
=
Syria,
dividend)
25 cents per share
Each dividend is
payable June 2, 1947, to
Stockholders of record at the close of busi¬
con-
the spokesman on the Fund and
T
25 cents per share
COMMON STOCK (extra
not ex-
j'pected to fee invoked under
share
COMMON STOCK ($1 par
value)
(41 st Consecutive Dividend)
416, Commercial & Financial Chronicle, 25 Park
Place, New York 8, N. Y.
Place, New York 7, N. Y.
of Resolu-
tion .10 therefore becomes
litical decision.,
share
PREFERRED STOCK
Allow
'
...
interpretation
PREFERRED STOCK
cents per
3Va% CONVERTIBLE SECOND
spondence.
on
'
The
extra
:■
4% CUMULATIVE PREFERRED STOCK
$1 per share
matters in
which the British ■ have a special
■<
Corporation
following regular and
dividends:
Se¬
curity Analyst whose work has been widely syndicated.
Editor of financial periodical. Convincing speaker with
ability to service busy wire and voluminous corre¬
Desires part time job with
unlisted house. Experienced.
Fund
boards
CORPORATION
and
Chronicle,
8, N. Y.
Cashier
weeks, the British
face
to
from time
at
executive
few
a
having
itself
seat
a n
MILLS
service
over-the-counter
Investment Research & Underwriting Department.
New Y/ork, rather than Washing¬
ton.
Since
Italy holds enough
votes
Box
give
to
in
of
for
each
record
Board
at
the
meeting
close
at¬
busi¬
to vote
of
April 18,
1947, will be entitled,
meeting.
By order of the Board of Directors,
L. W. OOX, Secretary.
such
M
COMMERCIAL & FINANCIAL
THE
(2248)
56
Sweden's Currency
Britain's Austerity Budget
By PAUL
INDEX
Policy Defended
EINZIG
in proposed British budget for 1947-48 a continuaburdens and an effort to mop up purchasing
Dr. Einzig sees
""
through taxation. Says increased duty on tobacco imports
result in additional demands for higher wages because of
For detailed index of
BRATTER
By HERBERT M.
tion of wartime tax
Trade Mission asserts his country's
warranted defensive measure. New im¬
power
Dag Hammarskjoeld of Swedish
may
currency
revaluation
was
contents
port restrictions being supplemented with measures reducing home
consumption.
stimulus
Despite the development of conditions which have occasioned
Dalton'"®
—
the imposition of severe import controls in Sweden^as a means of
budget state¬ the smokers' purchasing power. It
is feared in many quarters that forestalling a5'currency crisis, the^
ment of April
port capacity.
Before the war
15.
Although the result of higher tobacco prices appreciation of the foreign-ex¬
Sweden imported its coal from
be additional demands for change value of the krona last
he had
some will
the UK, Germany and Poland, but
home truth to higher wages resulting in an all- July was not a mistake and should
increased tobacco prices.
.
,
'
'
.
,
Thursday, April 24, 1942
-
CHRONICLE
see
3
page
■
<">
hoped that the budget for 1947-48 would
to production were rather disappointed by Mr.
LONDON.—Those who
,
urovide
a
defla¬
to
tell
-
tionists, his
action belied
his words. For
to
his
refusal
use
-
his budg¬
etary
for
surplus
-
substan¬
a
reduction
tial
and his
nothing if not
Until/now the British
Govern¬
the policy of trying
the inflated purchasing
power by an increased production
of goods.
Evidently, however, of¬
ment pursued
to mop up
have
circles
ficial
an
mean
Elects New Officers
of Ryan, Suth-
D. Williams,
ren
/.
erlarid & Co.,
President for
bur¬
den.
Although Mr. Dalton made
■A-v?:':
some minor concessions, the basic
Warren
rate of income tax will remain at
9
Marvin
'
d. Williams
.
Inc. Secretary.
The
Board
in the pound for at
least another 12 months. This, to¬
of Governors elected for the cur¬
gether with the new taxes on
profits, dividends and stock ex¬
change transactions, tends to dis¬
courage private enterprise.
And
of
shillings
since
will
80%
of
Britain's
remain based
terprise
even
of
Labor
the
economy
private en¬
after the completion
on
Government's
na¬
rent fiscal year,
of
to
hurt
production by discourag¬
ing initiative.
Messrs. Wil¬
are
liams, Fields, Rorick, E. P. Liska
Braun, Bosworth & Co., E. P.
Wolfram, of Bell & Beckwith,
and Paul Meinert, of Goshia &
Co.
:
Dalton's
Securities
New Issues
M. S.WlEN & Co.
ESTABLISHED
Exchange PL N. Y. 5
40
supply situation has not changed
sufficiently to warrant a devalua¬
alternative
an
Ass'n
HA. 2-8780
Teletype N. Y. 1-1397
at home.
Excellent
G. Porter Elected Pres.
Swedish
the
tion of the krona as
1919
Members N. 7. Security Dealers
be
Long-term Outlook
■
RALSTON STEEL CAR CO.
'
-
(freight
Company announce the election of
.
George E. Porter as Chairman of
the
Board
President
and
Ford.
at
manufacturers)
car
IJp-to-date Circular
Now Available
a
'
■
:/
being
ures
supplemented
with
com¬
mittees are:
Franklin
L.
of
Schroeder,
investment' Securities
10 Post Office
Teletype Be 89
meas¬
V
notably pulp and paper, Mr. Ham¬
marskjoeld told a press confer¬
ence
in Washington this week.
Sweden is still handicapped, how¬
by the inability to import
Burns With Gross, Rogers
to The Financial Chronicle)
(Special
ANGELES,
LOS
bert
H.
CALIF.—Al¬
has
become asso¬
Burns
with Gross, Rogers & Co.,
ciated
adequate coal supplies, and must
458 South
of
use
would
wood which other-5
add
to Sweden's
ex¬
the
Spring Street, members
Angeles
Los
Stock
change.
148 State St* Boston 9,
Ex¬
Tel.
Braun, Bosworth & Co., Enter¬
tainment;
E.
M.
Bancroft,
of
budget statement
Square, Boston 9, Mass.
Telephone Hubbard 1990
designed to reduce home con¬
sumption of exportable products,
wise
LERNER & CO.
-
therefore
of the various
Stranahan, Harris & Co., Inc.,
Legislative; Oscar Foster, of Fos¬
contained another indication that ter Bros., Young & Co., Member¬
austerity is by no means Sir Staf¬ ship and Publicity; Irwin Ward, of
ford Cripp's personal policy but Roose & Co., Finance.
is endorsed by the Government.
The Club also announces that
He strongly emphasised the need it will hold its 13th annual Golf
for export drive, even though this
Outing at Inverness Country Club,
tends to reverse the process of on
Friday June 6, to which guests
Mr.
Domestic & Foreign
an
ever,
Chairmen
tionalization program,
this policy
budgetary austerity ?s bound
•f-gv Rails
produce some inflation of prices
to
Rorick of to the trade restrictions recently
special meeting of the Board of
SpitzerRoripk announced. (For a Swedish offi¬
& Co., Treas¬ cial statement on those restric¬ Directors on April 16* Mr. Porter
urer, and
W. tions, see Second Section of last has been First Vice-President of
H.
Schliesser, week's issue of the "Chronicle," both institutions since 1927 and
of Stranahan, page 4.)
succeeds the late Mr. Frazer L.
Harris & Co.,
The new import restrictions, are
the Britcontinue
in time of peace his ex¬
budgetary
krona could not
value of the
Reorganization
H.
policy means that
ish taxpayer will have to
to carry
cessive wartime
Co.,
Vice-P resi¬
dent,
by means of budgetary sur¬
pluses.
*
'
!
;
&
worth
of
power
This
any.
Of First Trust Go.
pounds of purchasing
of
ensuing
the
Hence the Chancellor's
millions
cannot supply
the first two
now
impediment to the outflow of
exports, and because of
general shortage of import
year.
f >, commodities, the revaluation
Norman J. could not materially affect Swe¬
ST. JOSEPH,v MO.—The First
Fields,
of den's imports, he exclaimed. Since
Braun,
Bos- the revaluation of last July the National Bank and the First Trust
,
production is
incapable of catching up with pur¬
chasing power unless the latter is
effort to absorb some hundreds
Swedish
the
of
TOLEDO,
OHIO — The Bond existing "sellers' market" the in¬
Club of Toledo has elected War¬ crease in the foreign-exchange
the conclusion that
reduced.
Dag
Mr.
reversed,
be
price level object to build up a reserve of
against anticipated price increases gold or foreign exchange, but to
abroad,
increases
which
have forestall a currency crisis and
becoming
a
financially
since occurred, Mr. Hammarsk¬ avoid
weak country.
He admitted that
joeld said, and not to influence
the balance of payments. In the the restriction of imports will tend
Bond Club of Toledo
reached
now:
now
Hammarskjoeld
to insulate the internal
policy
at a
series of budg¬
etary surpluses is
deflationist/
not
The Swedish-Polish trade
Trade Mission informs the "Chron¬ agreement has fallen short of ex¬
icle." Only time will tell whether pectations as to coal, owing to
problems, Mr.
the revaluation of last year was transportation
prices would go some wsy towards
wise or not, the Swedish Govern¬ Hammarskjoeld said.
bridging the gap between purchas¬ ment's financial advisor added.
In reply to a question, Mr. Ham¬
ing power and the volume of pur¬
The purpose of last summer's marskjoeld explained that the re¬
chasable goods.
revaluation of the currency was cent measures do not have as their
aiming
Einzig
Paul
increase
would
taxation,
of
Dr.
of
costs.
This
addition to the
volume
of
purchasing power,
though at the same time higher
round
Old
CAP.
N.
0125
s
:
Teletype
Mass.
BS 259
Y. Telephone HAnover 2-7914
Teletype—NY 1-971
HAnover 2-0050
Firm Trading
r
Markets
,.
MP**
•
i
mopping
purchasing
up
power
are
of
\ tic
FOREIGN SECURITIES
50 Broad Street
Own Investment Firm
1
duty on tobacco.
Opinions are
) sharply divided on whether-the
of
AFFILIATE; CARL MARKS & CO. Inc.
CHARLOTTE,
E.
-
has
Herndon
formed
M.
E.
Herndon
East Third Street, to engage in the
Dalton wanted to kill three birds
securities
with
one
stone
with
offices
business.
Herndon
Mr.
by reducing the
Co.
was
In
at
the
time
revenue
as
and
increasing
mopping
of
the
at
tobacco
up some
LERNER
the
117
past
Vice-President
Inc.,
Investment
Southern
was
with
Louis
C.
Co.,
Rogers
Co., and with R. S. Dickson & Co.
of
A MARKET PLACE FOR LOW PRICED
STORES CORP.
UNLISTED SECURITIES
Aircraft & Diesel Equip.
Metalastic Mfg.
Bendix
—-
Helicopter
Copper Canyon Mining
Differential Wheel
Princess-Vogue Shops
Rademaker Chemical
Corp.
&
INCORPORATED
Members
55
National
Association
of
South Shore Oil
Dealers,
Inc.
~
Trenton
-J
Valley Distillers
Van
r
Telephone
•
i
Teletvne
NY 1-277
•
Empire Steel Corp.
,
•
j
■
I
*Prospectus
on
Request
U. S. Airlines
Sweringen Corp.
Morris Stein & Co.
Established
Liberty Street, New York 5, N. Y.
BArclay 7-2663
.Susquehanna Mills
Rocky Mountain Fuel
Maguire Industries
,
Securities
General Products Corp.
Signature Recording
Haile Mines
Company *
"Seaboard Fruit Co., Inc.
Red Bank Oil
Martex Realization
Kobhe
Teletype BS 22
HANcocIc 871S
Tel.
10
Established in 1922
Pressurelube
Common
BOUGHT—SOLD—QUOTED
Specialists in
30 FEDERAL STREET, BOSTON
.
Palmetex Corp.
Cosmocolor
Kellett Aircraft
.
..
England Unlisted Securities
Myler Plastics
Gaspe Oil Ventures
FINISHING COMPANY
$4.00 Convertible Preferred
v
(
Federal Asphalt
Yz% Cumulative Preferred
UNITED STATES
A
New
Greater N. Y. Industries
4
New Eng. Markej
CHICAGO
Drico Industrial
same
tobacco
of
SECURITIES
a
Frederick G. Adams & Co.
achieved more easily through ra¬
consumption
Securities with
C.— Marion
N.
tioning;/ Evidently, however, Mr.
,
New York 4, N. Y.
]
/
reducing
could
dollars
\
(Special to'The* Financial Chronicle)
-
expenditure in
not
have
been
/ •
'
Issues
Utility Stocks and Bonds
TEXTILE
SPECIALISTS
•
Stocks
Bank
and
Investment Trust Issues
carl makes & r.0• mc.
M. E. Herndon Forms
austerity move has
'been the drastic increase of the
!
being invited.
Public
A1'further
Specialize in all
Insurance
Industrial
an
consumer.
i aim
We
All Issues
increase in the volume
goods available for the dornes-
through
i
BRITISH SECURITIES
50 BROAD
4
ST., N. Y. 4
1924
-
'
^
HANOVER 2-2895
TELETYPE—N. Y. 1-2866
J
Hill, Thompsons Co., inc.
Markets and Situations
120
for Dealers
Broadway, New
Tel. REctor 2-2020
York 5
Tele. NY 1-2660
@FedFRASER