Full text of Commercial and Financial Chronicle : April 4, 1957, Vol. 185, No. 5626

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ESTABLISHED IS39

MICHIGAN

Reg. U. a. Pat. Ofhca

Volume

Number

185

5626

New York 7, N,

EDITORIAL

l§:As

Utility Common
Stock Financing

and

serious

about the heads of

of the

mighty Teamsters Union

officials

strange, to

are

what

instances

odorous

mess

situation that is

disheartening

mal¬

about this

said

being

about

being revealed from day to day

Washington and elsewhere. There are those,

and

of them

some

ought to know whereof they

themselves

sters

in the

sion, the Life Insurance Economist notes, for example,

now

tions

earnings)

even though small, causes investor confidence
(2) improved investments standing of common
stock reduces over-all cost and simplifies preferred and

spells out
Perceives

are

author describes—can be used to

steady upward

per

about

standing

investment

whatever I have to
financing will often apply

common

stocks

common

looking

for

and

that

feel

I know

page

for
40

and

address

Whitehall

when economists break out

year

guesswork on the outlook for the capital

is getting

heights,

little.

hazardous

ready to push
whether it may

are

in the midst

and

more
a

ation of
Frederick

Page

economists forecast

downturn of business and a relax¬

inflationary forces.

Since early January there has been
James

your
on

are

capital

common

page

O'Leary
speculation about easing in the
markets. This view is sup¬
ported to some extent by the fact that the average yield
on fully taxable
long-term government bonds declined
much

what investors

Continued

by Mr. Page

Fund,

clearcat

perplexing period in which we
a
great deal of public discus¬
sion about the pressing need to com¬
bat inflation, but at the same time

before the Oklahoma Utilities Associa¬
tion, Tulsa, Oklahoma, March 28,
1957. Mr. Page is also VicePresident of Broad Street Investing Corp., National investors Corp.,
♦An

absence

hear

when they buy

expect

This is always a

new

recede

common.

stocks.

Continued

greatly deplored. At times one almost feels
that these "liberals" would not trouble them¬
on

whether

your

will be greatly simpli¬

much about it at all were it not

teau

"Having spent the
entire 24 years of my business life
studying the utility industry • and
purchasing large amounts of utility

likely to discredit labor unions and stimulate

the

is poised on a record-high pla¬
and
it is
so
difficult to tell

omy

Any bond buyer will put great
weight on the investment standing
your

undertaking, but it is particularly so

fied.

switch

ease

at this time when our national econ¬

bonds and pre¬

your

government securities and Aaa

Rules out likelihood of Federal Re¬

the time of

rash

markets.

stock, you will reduce your
and you will find that

financing of

ferred

legislation to correct abuses now so evidently
widespread—as if it were the revelations rather
than the state of affairs revealed which are to be

Continued

This
in

over-all cost,

the

on pessimistic signs*
stability around present levels

business downturn evidence.

preferred stock financ¬
common stock
entailing the greatest risk, is
your
most
expensive capital and
has the greatest effect on your over¬
all cost of money. If you can improve
the

credit

serve

accom¬

well. Moreover,

rate

swings

share earnings-trend.

money

enjoys. Again, they mourn that the revela¬
dramatically being laid before the public

selves very

substantial

corporate bonds.

bond and

ing

casting doubt

reasons

interest

during rest of 1957, with the possible exception of fairly

narrow,

stock

common

reviews vari¬

signs pointing to capital market easing, and then

to grow;

Before arriving at this conclu¬

heavy forward investment commitments;

Mr. Page's 24 years in utility stocks leads
(1) steady gains (in per share

Although the title sounds

capital markets.

ous

lugubriously say—and this may reveal
reasons why there is not a great deal
of optimism about the prospect of cleaning the
mess
up—that efforts on the part of the unions
themselves to oust corrupt officials and put their
houses in order generally would be likely to split
the "labor movement" and destroy the "unity"
it

pursue, instead, a steady upward
and dividends to achieve low cost

earnings

him to conclude that:

discuss

of the

minority of optimists, Dr.

plish

Others

one

Identifying himself with

rights, and to

—which the

longshoremen's racketeers to book.

trend

situation, and who are far from con¬
vinced that the AFL-CIO will succeed in really

the

;

Research

stock

correct the

righting it any more than these big-wigs of the
"labor movement" have succeeded in bringing

Investment

O'Leary doubts any important business downturn is
underway, or that any significant easing is ahead of as

financing; (3) most important of other investorinfluencing-factors is management; and (4) five factors

likely to do very much to

are

Copy

Life Insurance Association of America

bond

speak, who doubt very much whether the team¬

Investment company executive advises utilities to avoid,
if possible, offering new issues of common stock via

financing.

the

Cents

By JAMES J. O'LEARY*
Director

Vice-President, Tri-Continental Corporation

swirling

now

the least. One is tempted to say that in some

say

allegations

number of the top

Capital Markets Outlook

By FREDERICK VV. PAGE *

Certain of the reactions to the remarkable dis¬

closures

Price

Y., Thursday, April 4, 1957

♦An

address

ference

Inc.

Board

page

Dr. O'Leary before the National Industrial Con•
Meeting, San Franciscov Calif., March 28, 1957.
j

SECURITIES NOW IN REGISTRATION—Underwriters, dealers and investors In corporate

DEALERS

securities

afforded

are

with the SEC and poten¬
Section, starting on page 44.

complete picture of issues now registered

tial undertakings in our

"Securities in Registration"

State, Municipal
and

U. S. Government,
Slate and

Lik

Municipal

Securities
m

'''

'}'/}?

STATE

HAnover 2-3700

Public

•W--

MUNICIPAL

and

COPIES OF OUR

telephone:

''1

BONDS
CHEMICAL

BOND

•

BANK

DEALERS

THE FIRST NATIONAL CITY SANK
OF NEW YORK

Burnham and Company
MCMSCRS NEW

15 BROAD
cable,

VO»K

AMiiHlC*N STOCK

STREET, NEW YORK 5, N. Y.

EXCHANGES

•

Dl 4-1400

Bond

Net

T. L. Watson &Co,
1832

ESTABLISHED

Active

American

Stock

Exchange

BROAD

STREET

NEW YORK 4, N.

^outhwedt COMPANY
.

•

Banks

rrj-.

•

THE CANADIAN BANK

Brokers

CANADIAN

Canadian

Rights
We

Orders

PERTH AMBOY

Executed

DEPARTMENT

CANADIAN

DIRECT WIRES TO

offer

which
at

All

Exchanges At Regular Rates

buy

bank

expire
the

NEW YORK

NORTH

Municipals

current

market.

Wires to
Toronto, Montreal, Winnipeg, Calgary,
Vancouver, Victoria and Halifax
Direct Private

MUNICIPAL BOND DEPARTMENT

Dombuoti Securities

Co.

Grporattoti

NEW YORK STOCK EXCHANGE

115 BROADWAY

for California

the* above rights
May 17, 1957,

NY 1-2270

MONTREAL AND TORONTO

Goodbody
MEMBERS

BRIDGEPORT

and

OF COMMERCE

Teletype

Chase Manhattan

YORK 5

34 offices from coast to coast

Maintained

Markets

Dealers,

Commission

New York Stock Exchange

gouthwt4t

BAUAj

Dept. Teletype: NY 1-708

SECURITIES

Members

of the

Stock Exchange

THE

TBXjrrv-c r»v

coburnkam

SECURITIES

Members New York

120 BROADWAY, NEW

INVESTMENT

REQUEST

Harris, Upham &

department

30 BROAD ST..N.Y

DEPARTMENT

ARE NOW AVAILABLE
BROKERS

FIRST

;

REVIEW"
UNDERWRITERS

Bonds and Notes

"ATOMIC ENERGY

CORN EXCHANGE

bond

Housing Agency

LA SALLE ST.

CHICAGO

Exchange Place, New York 5, N. Y.

Teletype NY 1-702-3

WHiteball 4-8161

ISattk of Atttcricst
NATIONAL

Hvinos ASSOCIATION

30O MONTGOMERY STREET
SAM FRANCISCO,-CALIF.

{(,

The Commercial and Financial Chronicle

(1574)

The

only

For Banks, Brokers, Dealers

Security I Like Best

This
Forum

A continuous forum in which, each week,

a different group of experts
field from all sections of the country
participate and give their reasons for favoring a particular security.

..C

nationwide

Our

private

with

you

they to he regarded,

•re

wire
more

DR.

offer

as an

intended

not

are

be,

Louisiana Securities

—

Dr. K.

Beltchev, A. W. Benkert
& 'Co.,
Inc.; New YorK City.
(Page 2)

nor'

sell the securities discussed.)

/"•

New York

department

assures

of maximum service and

you

depend¬

New York Hanseatic

Wires

Private

SAN

largest

c o m-

mercial

pro¬
of bi¬

ducer

FRANCISCO

bright

future

;

three

|fCpONNELl&rO.
120

Stock

Exchange

Stock

Exchange

than

12%
and

for

ber

mark

from

"within"

have

are

large

plants

energy

consumers

to triple

expected

sales

1954.

Overseas

kets in

Commonwealth Natural Gas

mar¬

fore¬

coal

ture

Lynchburg, Va.

Association's

operations

large,

are

highly

Trading Markets
American Photo Equipment*

Drilling*

Fisher Governor*

Vita Food Products

1955*

Produced
for

resale

1951

9.3

8.1

13.8

11.8

9.5

Used in the company's
own

SWene«mjCompaT\i^
1920

near

56,000

1.9

compared

Thas

has

been

invest'-*

its

which

adding

recoverable coal
more
are

than

800

million

estimated to

duction

The

tween

As¬

the

common

Firm

new-

rates.

addition

tons,

•

and

northward

well

the

connec¬

Central

with

the

affords-

Lakes.-

New

outlet

/■

York
the

rto

consid

basic

cial

activities

marine,

V'r

class

been

and

PIPE

The

•

modern

Association

railroads,

and

WISENER

bulk

of which has

CAPPER & CO.

vessels, each
capacity of approx¬

cargo

imately 10,000 tons and is designed
for the carrying of coal and other
bulk commodities.
Eight vessels

Exchange PL, Jersey City, N. J.
119

are

Olgby 9-3424

stock, in 1956 compared with
in
1955.
The
directors at

their

final

Liberian

subsidiary.

The

COMPANY

and

King SL "West

Tironto, Canada

dividend

paid making

$1.25
a

per

total

the

two-thirds)

The

Patterson

owned

tion,

Oil

Co.

the

Continued

page

EMpirt 3-820a

two

Burns Bros. & Denton
INC.

Lecause of
37 Wall

Street, New York 5, N. T«

Undcricriters—Distributors
r

Dealers

'
.

Investment Securities
-■

Canadian and Domestic %

our

If history
be

ex¬

the

balance. \

automotive

About

25%" of "Arvin'k automotive

business
This
.

replacement parts.
has

percentage

the last

The

rest

doubled

years.

the

automotive

business is divided into qu t3 even

between General Motors,

Ford and Chrysler plus the inde^

pendents.

total

Arvin

manufacturers.

important

haust

pipes,

mirrors

and

Arvin

business,
to

our

for the

are

Over-the-Counter

makes

1,200 different parts fcr the

some

by the Virginian Corpora¬
engaged in the fuel oil

business in the Philadelphia area.

manufacturers of cars and trucks/

car

which

i.."

field, Arvin
purposeful; divers!ficatif n
between originab equipment and
replacement parts, and among the

per

share paid in 1956, compared with
$3 paid in 1955.

■:

high¬

logically into

traditional

was

of $4.50

Trading Dept.

to al

last

been

meeting /of portions

dividend

operated under American Flag Sales and revenues increased in
•1956 but earnings so far have not
and four by a wholiy-

owned

-.lower half and work back jowaid

registry
I

—

LINES

LIMITED

policy'

itself Arvin can
push hardest

pected

operates

Limited

...

non-auto¬

the

automotive has

repeats

operating ratio improved

47.3%..

mon

coke

Securities

50-50 balance be¬

type of manufacture."

Its operating ratio in 1955
54.9%, compared with 75.7%
all

$7.12

mining

plant and blast furnace operation.

the

Historically.

have
a

items.

which fit

Great

Mexican Gulf Sulphur

All

TRANS-CANADA:

it has

that.

automotive

(about

The Virginian Railway company
earned $10.08 per share of com¬

to¬

adequate
.

Trading Markets Maintained

many-sided diver¬

sales

motive

stock

1956
increased
the
and November
selling of cqal. Eastern Gas & Fuel quarterly dividenf from 7.5c per
share to $1 per share.
An extra
conducts
such
related
commer¬
In

Broadway, N.Y. 6 COrtlandt 7-5680

merging, company;

close to

very

of the

range

tion

for

mines.

reserves

■

Bankers

incieas ng

Diversification: is

Arvin's

are

Deepwater Bridge, whtre

was

33%

accom¬

additional

Branches

....

sification

97% of the capital

Va.,

operation

four

1897

—

Investment

the"

Aryin's dropping its TV. and c in-;
ette lines, at which time PresL.e it

ing.

with

1954,'a

<L-

is shooting
higher sales

it. might

at Arvin and

dieselization program, is outstand¬

daily potential

late

Established

Office Tokyo

The operating efficiency of the
rIn
Virginian Rahway. helped by a
-has

l.G,

for about 64 years, at
present pro¬

Atomic Fuel Extraction

has

activities.

owns

58%

and

Wyoming Uranium

2-0570—Teletype JCY

l oth

over

about

1956 its

tal

iBaruch-Kenilind

Diwet Wire

711

years

plished primarily by putting into
The

{Philippine Oil

tons

increase.

HEntferson

2.1

future the company

expects to reach

Tel. HAnover 2-4850

•*

operations

In the

42,000

Home

Brokers

Virginian Corporation,
which holds as its principal asset

Point,

1955

10.5

Purchased

Request

-C-Wl

•

voting

—Millions of Net Tons—-

•

Yamaichi

Securities Co., Ltd.

better

Historica ly,

been- ,a

„

write

few

well
,

now

the .next

information

current

Call

purchasing other enterprises with
i future.
Characteristically,
it

three years:

Fortune Petroleum

•

For

(representing about 31% of the
Glen
W.
Thompson
wrote
lis
stock)
of the
Virginian:
has
Railway Co. The Virginian; Rail¬ stockholders;- that " "Arv'n
found' the rewards are insufficient
way is primarily a bituminous coal
an annual
capacity of over 500,000
for- xne
time,- energy- an J c a oitai
carrier and its" 611 'milts' of /rail-"
tons and only one has a
capacity
required. We are conv n;ed that
of less than 300,000 tons. The table road extend from the coal fields,
the company's resources can
be
of West Virginia eastward to its
below
shows
the
Association's
extensive Tidewater terminal fa-- employed to better advantage by
production and sales for the last
expanding iiito electronic items
cilities
at
Norfolk
and
Sewalls

mechanized mines, tending toward
lower production costs per t-on.
Nine of the 16 mines each have

Sterling Oil

stock of the

favorable.

most

company's

concentrated

sociation,

satisfying the fu¬
is

from

companies

operating within the

position of Eastern
in

Fuel

demand

The
TWX LY 77

the

and

Gas &

profits
in

raents

major growth opportunities for
the
consumption
of bituminous

years,

although

Eastern Gas & Fuel derives sub¬
stantial

see

STRADER and COMPANY, Inc.

rate

substantially

not

In 1955 net income

Investments

the years ahead we

year

years

appear

policies

earnings

practically

in 1954.

In each of these several

ested.

three times the ton¬

remaining,

be stirring due !
improved Japanese economy.-

,to

very definite 10-point out-:
gains were substantially above the; line describing the kind of situa¬
tion in which it would b2 inter¬
1955 e'arnings.
>;

de¬

approached 50 million tons
over

impres-" present lines.

been

grown

per

products

earnings of these

has

com¬

yeiys.- It
confidently plans to hit that mark

1955. year-

in the next sive. In 1954 net income of Boston
Gas Co. increased by 132% ov;er

•

' '

since

1956,

nage

Life Insurance Co. of Va.

87 Wall St., N. Y.

increases

the 1953 level.

dustry

Satiett Furniture Industries

ESTABLISHED

and

The export market has be¬
declined 16% because oh the pro¬
come a very steady and important
motional gas rates, but in 1956
factor in the bituminous coal in¬
mand

...

The impact on

(e)

Furniture

*Prospectus

•

past 25

customers,/

heating

space

ends.

'//

;ry

of coal between the 1953

remarkable growth poten-

tial.

1958.

atomic

The

which

Trading Interest In

Having

care.

sales

(c)

new

growth

ucts should grow, but also bejause
it is planning its future with great'

promo¬

25 years.

Falcon Seaboard

Arvin intends to grow, not only
because the market for its prod¬
-

offices

stationary levels for three

char¬

in effect in December 1954, a gain
of 24%' was recorded in the num¬

•

supported

gram,

after

are

management

tional gas rates which were placed

(d) Demand for electric energy

largest gas

branch

our

STOCKS

seven

well-pro-;

results which prove Arvin's
past growth and give every prom¬
ise of future growth to continue.

in the Boston area, and

customers

TEL. REctor 2-7815

LD 39

the

about
on

and

Bos¬

utility company in New England,
supplying service to over 300,000

/v-./..;;

years.

by the end of

BROADWAY, NEW YORK »

American

Co.

the

JAPANESE

selling at
times earnings.

plans to increase rapacity by 42%

Members

York

Association.

opinion, an
selling
low price to

many

The aluminum industry

(b)

American

Gas

ton

esti¬

the

segment

look

; ;

■

now

NY 1-1557

Mobile, Ala.

-Direct wires

Leaving the statistics to last, let's;

Lnpjroperational

represents

Exchange

Stock Exchange

* HAosver 2-0700

stock

panies whose stocks
12

York Stock

New Orleans, La. - Birmingham, Ala.

I?"-; • *
of Co¬

dividend. It has the

acteristics

earn-

American

growth

tected

a( con¬

pansions to increase steel produc¬ 27 adjoining communities. Through
tion
15 million
tons during the an aggressive merchandising pro¬

Since 1917

New

and

tons

activities of the

(a) The steel industry, plans ex¬

SCRIP

capacity of

tant
Beltchev

mates:

RIGHTS

annual

gross

subsidiary,

the following

New England
industries.
This

New

historically
earnings
ratio
of
yielding above 6%

the

for

:
■-

Stork -Exchange
Leading Exchanges - '* .

lumbus, Ind. is, in
overlooked
at

Members
Member?

i 19 Rector St,, New York 6, N. Y.

New- York

':V«.■'>..
* Arvin
Industries, Inc..

source

,v>

Steiner,Rouse&Co

Thomson & McKiimon /
Indianapolis* Iiid.
■

and Other

Boston Gas Co., a wholly-owned

Members

Mass.,

Everette,

mgs.

very

based

try

only'local

the

sistent contributor to overall

ft.
Wa/

for this indus-

Specialists in

Fuel

working

180,COO

.Dr.

in. Arvin Industries

..1 Voperates

furnace has

Eco nomists

forecast

metal

tuminous coal.

substantially

Gas &

iron

pig

the

ALEXANDER CARROLL

Earn¬

furnace.

furnace

which

nation's fourth

Principal Cities

blast

in¬

Exchange

CHICAGO

•

Eastern

The Associao n

blast

increased

1936V

^as

dustry.;/

Teletype NY 1-40

•

ings

definitely

growth

1920

Member

120 Broadway, New York 5

BOSTON

produced is used principally
steel producers and by the

Quoted

are

Mass.,

Association's

may

classed

t i

PHILADELPHIA

1954.

Thomson

coke

holding

with¬

which

Corporation

WOrth 4-2300

operating and

Bought—Sold

McKinnon,
Jnaianapolis, 2nd. (Page 2 K'

Fuel

industry

now

Stock

Gas

company

American

r'roll,

The cokecarried on at
by the Everett

since

operations

Everett,

bien- in¬

has

and

Arvin Industries—Alexander Car-

represents Coke Plant Division ard by two
owned
subsidiaries
at
one of the
outstanding values on wholly
the market today. The Association Philadelphia and New Haven. The
is both

Established

creasing

City

Fuel Association

Eastern

able executions.

Associate

substantial

oven

Eastern Gas

this division

income derived from

BELTCHEV

A. W. Benkert & Co., Inc.

long experience and large

trading

Alabama &

Eastern Gas & Fuel Association
-

(Tbe articles contained in thig forum

markets, faster.
2. Our

Thursday, April 4, 1957

Week's '

Participants and

provides

system

in the investment and advisory

Try "HANSEATIC"
BECAUSE:

Their Selections

f'r

.Among

the

m.u/flers,

ex¬

Quotation Services
for 43 Years

tail pipe assemblies,
gas

likes

tank filler tubes.
the

automotive

National OiDtatioR Boreal

believing it to be basic

economy,

and

Continued

Established 1913

wonder,

industry has treated Arvin

46 Front Street
CHICAGO

page

New York 4, N.
8AN

FRANOIBOO

Number 5626

yolume 185

Some

The Commercial and Financial Chronicle

(1575)

INDEX

Significant Aspects
of

the

Board

American Motors

"—George Romney

;

1957 expectation of 6.2 to 6.5 million car
sales and 100 million in 1975, reflecting increasing multiple-

car-ownership, rising population and economic growth,

set

are

American Motors chief executive side; by side with
^mitigating obstacles to automobile progress. In questioning;
Walter Reuther's projected programfor. "walloping" the :

Gold and Monetary Discipline—Allan

Moving

teeth

was

cutting

Washington,

industry in

C., back in 1933—the year of
the Emergency Banking Act and
D.

the

scuttling

of the

gold

Constant;

(1)

standard—has

through increased productivity.

there

been

discus¬

sion,

contro¬

marily

and

problems

there is today.

roads.
•

The tempta¬

tion

deal

deeply
economic

our

Rather

Eisenhower's

various congressional

pro¬

than

time,

Why Canadian Mining Capital Is Invested in Haiti
—W. W. Weber:

/...

Railroads at Milepost '57—Albert R.
Beatty

chanical

—Samuel

touch

briefly

1913

This

A Bunker

the

provement

public enlighten¬
dealing broadly

and

■

hope

may

Productive

than

!;S

was

(Boxed)______

•.

•

K'S

* "1 ».t

compile

seat

the total

time,

holdings

about

(Editorial)

___J___Cover

we've

economic

facts

seem

we're

good

than

by
;

factors irr Growth of Market

the
ence,
cago,

address*

National

Romney

Mr.

Credit

Industrial

before
Confer¬

Bookshelf

From

___

Washington Ahead of the News—Carlisle Bargeron

Indications of Current Business

Singer,Bean^

Einzig: "British Credit Squeeze Relaxation".

Mutual

•

and

N ST A

.
.

Activity____^

in¬

total

owners

new

well

car

Our

rer

Public Utility Securities

The

Reporter's

Securities

has
the

war
years, by a remarkable
growth in the car market.
Stephen M. DuBrul, an automo-

5
39

;___i

Registration

49
_1

Security

The

State of Trade and Industry

Washington

Western Natural Gas

2
5

Strategic Materiais

Lake Ontario Portland

^Columns not available this week.

American Bankers Association, Chi¬
March 19, 1957.

Continued

page

Racing

You

and

San Juan

Like Best

The

Ambrosia Minerals

Oiierinss__

and You—By Wallace Streete—_—

Security

Universal Transistor*

Salesman's Corner...

Market

The

•.

Philadelphia * Chicago * Los Angeles

1__

;

Report

Now

Prospective
-

sharp rise in income
accompanied, save in

Securities

Railroad

Rise in Income

been

Bankers_______L

Our Reporter 011 Governments

placements, appears to be that a
1% change in income causes a
2.5% change in sales," the Insti¬
tute of Applied Econometrics

Direct Wires to

Observations—A. Wilfred May

observed. "The over-all

new

Notes

inc.

40 Exchange PL, N.Y.

Teletype NY 1-1825 & 1-4844

____

Mackie,

HA 2-0270

Funds

About Banks and

News

pointed out in 1938.

dynamic character¬
istics inherent in the industry, and
in the
general economy, the
growth of automobile demand has
*An

sales,

Because

automobile-sales
was

effect of income

■

Dealer-Broker Investment Recommendations

television

' Through the 'Twenties
ancjl
'Thirties, a close correlation be¬

come

with. An

work

tween

go¬

many

recently
observed,
be governed today

statistics

statutes."

had

^acquaintance
J*We

where

and

been

ing unless

and today's color

set.

we'd all \

clear

It's

,-K

■

Stocks.

Coming Events in the Investment Field__r__

width, tire quality, and other
were as vast, .relatively,
between a 1920 crystal

radio

tough time knowing where

Three States Natural Gas

those

now* total

and

Insurance

Businessman's

features

that

increased

have

times,

$5,782,000,000.
have

Since

banks.

and

Pacific Uranium

Regular Features

See It

V.•

i*'

Bank

for example, and most .other
popular makes, were about onefourth of the 1920 prices; and the
improvement in horsepowe r,.
braking capacity, window area,

holdings of automobile paper by
commercial

available at any

cars,

1939 that the Federal Re¬

release statistics

and

was

Botany Mills

Outlays to Remain High, According to SEC

wr?. *•#'

•♦

performance of the cheapest

•>*'.,

b.i

•; 1

G. D. Searle

—Department of Commerce Study

price in 1913, or even in 1920. The
prices of Nash and Hudson

market aspects
be of particular

Board first began to

JCY 215

Capacity Equal to Demand, Says Rukeyser

Business Capital

however,

.1936

interest.

serve

HEnderson 4-8504

Teletype:

31
fjt

Yes, That and More!

fails
year-by-year: im¬
quality and me¬

features

1936 models

remarks largely to the
automobile industry and deal pri¬
I

Exchange PL, Jersey City

Appraises Today's Instalment Lending Situation

'.i :»

automobiles^
Nothing approaching the comfort

that

Dlgby 4-^970

—Joseph C. Welman____

1936, " the
index for pas¬

figure,

reflect

some

Salt Lake City Stock Exch,
Spokane Stock Exchange

and

price
cars
declined

senger

43%.

subjects, I will con¬

marily with

Members

Waugh

fine

J.F.Reilly&Co.,Inc.

Export-Import Bank's Role in Foreign Trade and Credit

cover

;vVr

the Federal Reserve Board should

Instead

I'll

Between

wholesale

these

try

several.

inquiries

present opportunity for wide¬
spread public analysis of these
problems.
Consumer credit al¬
ready has been under extensive
study. The series of six reports to

about

car

able

will

further

Butler, III

Meeting Future Labor Shortage by Training and Not by
...Chance—Hon. James P. Mitchell.

all
eight of these points in the avail¬

posed comprehensive inquiry into
the nation's monetary system and

offer

,: "•

PACIFIC. URANIUM

Role in Nuclear Energy Development

length

URANIUM

drifting.

ment.

••

(6) Increase in instalment buy¬
ing.
(7) Increase in population.
(8)
Improved s t a 11 d a r d of
living.
/ : ; :

George Romney

concerned ..about

President

—William

mileage of good

RIO DE ORO

today is great.

;

Increasing

(5)

improvement

life;.'

broadly with
these subjects
am

Constant

(3)

YUCCA URANIUM

Facing Up to Inflation Threat—Edwin J. Schlesinger
Steel Industry's Key

production.
(4) Increased

Expanding
____!

Economy—J. Brooke Willis_____.___

The Airlines Approach the Jet Age—Curtis
Barkes_„_________- 22

stockholders.

monetary

MINERALS

—Roger W. Babson__

with customers, and sec¬
ondarily with employees and

fiscal

about

UNITED WESTERN

Forward Looking Bankers to Render Investment Advice

much

confusion

MINERALS

The Position of Mutual Savings Banks in the

(2)

and

AMBROSIA

_________________

;

Expansion of the market
through sharing lower costs, pri¬

versy,

___________

reduction

cost

______________

Industry in 1957—Harry L. Dalton

—Henry Ford II

/•:-

4-6551

Janeway____

Bringing "Operation America" Up to Date Requires Action
—Howard Pyle
__i

Dept.

NEW YORK

Telephone: WHitehall

Business Welfare Concepts for the Benefit of All Men
,,

consistently outdistanced the pre¬
dictions
of
marketing
experts.
Among the long-term factors re-.
sponsible for its growth and de¬
velopment were:

my eye-

___i;

_____

Aluminum Industry Trends—R. L. Sheneman

dividing and distributing political and governmental power."
Not since I

WALL STREET,

Bad News in April: A False Alarm—Eliot

The Textile

stuck with obsoleies!

Fixing in Creating Inflation

—W. C. Mullendore.

productivity be passed out in form of lower prices, in order
not to jeopardize the potential multiple-car-market, and the
reduction "of the nation's social and economic power, just
as
the nation's founders wisely recognized the necessity of

Geronomics—Ira U. Cobleighf
Role of Wage

guy

Obsolete Securities

:—Hon. Wallace F. Bennett_+_

automobile companies, Mr. Romney quotes Senator Douglas
on the
destructive nature of inflation.; Recommends higher

The

Sproul_____

to Economic Health After Inflation 1957 Ceases

AND CO JO ANY

WHO ARE WE FOR?

The Business Outlook—Ira T.
Ellis__i._______.___

Prosecuting Stock Frauds—Paul W. Williams

forth by

ONE, TWO, THREE, FOUR

Some Significant Aspects of the Automobile
Market

Corporation, Detroit

Auto industry's

_____Cover

.__

Utility Common Stock Financing—Frederick W. Page______Cover

President

and

Page

Capital Markets Outlook—James J.
O'Leary

By GEORGE ROMNEY*

[iCHTtnSTflU

B. S.

Articles and News

Of the Automobile Market
Chairman

Published Twice

Weekly

Drapers'

Gardens,

London,

Cement

Eng¬

land, c/o Edwards & Smith.

COMMERCIAL

The

For many years we

have

specialized in

ary

Park

Members

BROAD

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Stock

Exchange

ST., NEW YORK

COMPANY, Publishers

DANA
Place,

REctor

Spencer Trask & Co^

Reentered

Reg. U. S. Patent Office
WILLIAM

♦

CHRONICLE

FINANCIAL

PREFERRED STOCKS

and

New

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HERBERT
•

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President

Possessions,

Thursday (general news and ad¬
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Glens F^IIs

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state

issue

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Officer:

111.

—

market

news,

135

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account of "the fluctuations

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Thursday, April 4, 1957

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Every

TELETYPE N. Y. 1-5

post

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SEIBERT, Editor & Publisher

the

Prospectus

Febru¬

9576

Subscriptions

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TELEPHONE HAnover 2-4300

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York 7, N. Y.
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SALT LAKE CITY

The Commercial and Financial Chronicle

(1576)

areas.
I am assuming no serious
univer¬ war threat in the next year, but
sal rise., Some industries were ad¬ continuation
of
high
defense
justing to lower market demand." spending and the cold war. There
Government spending for goods will
be
further
incidents
like

gether with residential

The Business Outlook
7^

tion.

By IRA T. ELLIS*
Economist, E. I. du Pont de Nemours and Company

economist prognosticates a better business

E. I. du Pont'* top

the shortcomings of
forecasting and of the belief that Government can save us
from our excessive follies. Looking aheadtothe next decade/
by Mr. Ellis who also points out

down

the author states

and that

unemployment will not be

rapidly rising population is

our

businessmen think it is.
no one
*

business

omy

are

vestment

plans, the trend of gov¬
spending,
the
current
level of business inventories, the
level and recent changes in em¬
ernment

and

that

are

extremely

area

be¬

important

cause consum¬

purchase

ers

two-thirds
the

all

goods

services

and

Ira

Ellis

the

produced in
the

country.

Business
:

carried

have

The state of businesj
personal confidence, therefore, is always a significant e_e-

for

people.

and

ment in the business

.business
I

because

sumers

and

people

businessmen

ment,
.

homes,

l°rr&,C0mmon stock on
organized
exchanges,
quently revised.
The
short

fre-

■J®"

trends and other

the

normal

demand

this

country

address

local

state and

vides

Federal

ex¬

schools,

Mr.

tIl.

Ellis

over

should

keep

F ederal
covered

defense

and

Government

other

spending

by tax receipts.

The year 1957 will be a better
business year than we enjoyed in

1956, but it will be another year
moderate change.
Production
may rise 3% from 1956, as it did
of

last

sewer

from

year

view; of

the

before.

year

recent

increases, in

petition.

the year

clined

5%.

state

and

of 22%

output

wej]

taxes

took

there

But

were

based

goods,

minerals,
re-

activity rose steadily
frQm mid-1954 through 1955, but
showed little change in the first
half of 1956". It dipped during the
steej strike last summer, but rea

strong fourth

be utilities, highways,

wa^er

and

systems, etc.

Significant
1955

sewer

and

decreases

rise of 3%

1956

production

occurred

automobiles,
i

CQUipment,

Steel,

that

1956

the

farm

•

also

rose

10%

cial

1956—it

for

the

loanable

re¬

high

very

funds

from

all

mortgages.

Personal

will

income

about

probably

1957.

rose

the year before.
January was almost
January, 1956.
Nonover

6% above
agricultural employment
about

1955 to

1956.

productivity of labor
sharper rise in 1957

borrowed

may

vestment
and

Loans

stock

restrain

only

rose

crease

above

the

use

for

(The

show

may

than

did

last

5 %.

reflection of

and

highly

for

in¬

will

rather than
us

Look

Into

1957

tant business
the

factors,

outlook

that

the

their

demand

below

the

available

for

funds

principal
will

spending

sonal

security,
commerce

BANK STOCKS

all

year

foreign
aid,
and
housing

There is

good deal

discussion

current

areas

about

the

Federal

budget for
fiscal year
1958, and it may be reduced $2
or $3 billion below the
figure an¬
if

January, particularly

people who want the budget

know

let

what

their

"demand" from the

State

also

Federal Gov¬

and

local

spending will
importantly
construction, but also be¬

rise

for new*

this- year,

cause

re¬

Congressmen
they do not

services

increased- salaries

teachers

and

local

for

other

government
Public construction" is

activity

state

governments. 7 Federal
consists

principally
conserva¬
facilities,
development, etc. Public
construction
may rise
10% this
of

military

tion and

year

1956.

over

Can

Government

Protect Us?

business
ate.

activity rate will fluctu¬

While

business

at 3%

activity has
on the av¬

per year

erage over the past 50 years, there
is no assurance that it will in¬
crease

that

rate

each

year.

Some years

will show faster than
growth and some years

average

will show declines.

have

not

yet eliminated the business cycle

although

we may

moderate

the

have learned to

swings.

must

avoid the excesses of the boom if
we

are

decline.

avoid

Credit

the
and

subsequent
other

re¬

straints may be necessary at times
if

are

enjoy

stability.

reasonable

Government is
on

page

activity in
high
and
rising
individuals and by

Per¬

T.M.T. Trailer

income will rise because of
in

wage

and

Ferry

salary

proprietors, divdends and in¬
terest, Social Security payments,
etc.

J. E. Plastics

Mfg.

Quebec Chibougamau *

Incidentally,

employment

Goldfields Ltd.
A

John B. Stetson Pfd.
Pocono Hotels

largest Philadelphia Bunks

Units

Continuing Interest in

Fischer & Porter Inc.

Buck Hills Falls Co.

Grinnell

Guarantee Bank & Trust Co,

Chibougamau Asbestos

Corp.

Kalamazoo Vegetable

Reading Co. 3Vss, 1995

STROUD & COMPANY

Curtis

Parchment

Publishing 3-4% Pfd,

Keyes Fibre Co.

John R. Boland & Co. Inc.

1 NCORPORATED

Samuel K. Phillips & Co.

PHILADELPHIA 9
NEW

YOKE

PITTSBURGH
SCRANTON

•

ALLENTOWN

ATLANTIC

CITY

Members

LANCASTER

Phila.-Balt.

Stock

PH 375

•

N. Y. Phone

COrtlandt 7-6814

BROAD

NEW
Established

Exchange

Pennsylvania Bldg., Philadelphia
Teletype

BOENNING & CO.

115

Broadway
N. Y.

New York 6,

CO 7-1200

STREET

YORK

CITY 4

1914

1529 Walnut Street

Philadelphia 2, Pa.
LO 8-0900

ATT Teletype PH 30

Business plans must .always be
made on the assumption that the

estimate of developments in these

over

Continued
for

and rising employment, to¬
gether with increases in incomes

impor¬
estimate

include

supports

year

welfare,

business

rates

are

any

governments, together with a high

1957

must

bank

purposes.

rate of business investment.

now

spending and the

international situation

expend¬

occur

high rate of business

year

turn

expected in the

are

Principal Supports
The

increases
Since defense

policy of

portfolios,

to the outlook for 1957.

Maintained in all

force

of savings
such investment.

issues; etc.
* »
short, the year 1956 was a
of high business activity, but
it was a year of varied business
experience, a year of change and

steady growth.Let

Board

supply

new

fluctuation

commodity

unlikely

investment

ex¬

result of the

commercial

restraint

their supply from bank

and insurance company

of
one

The

lending for investment

year,

the

Reserve

restraint

year.

Bond7prices
declined, last

stability

Federal

commercial

1956.

year

prices in 1957 is

loans

will

national

grown

the

pected

in¬

10%, but investments

prices

partly

kept

Total

the

commer¬

credit

purposes.

rose

Board

bank

investments

banks

result,

lending by

1957

rise

million, about one-half

one

the rise from

during

PHILADELPHIA

some

The rate last

year

Trading Markets

has

Residential construc¬

6% last year

were

for

Reserve

banks

penditures this
ago

million in each year

one

1948.

from

Prices may show little further
gain from present levels, although
they
will average significantly

commercial

itures

government

levels—Federal,

ernment.

that

danger

of savings.
on

Increased

cline

investment would outrun the sup¬
Federal

goods and for services.

improvement over last year.
The number of housing starts will
fall to around one million, a de¬

rise

signs
inventory
being restrained.
end

demand

tight rein

Spending for durable
goods declined 5% last year from

the year before, compared with a
rise in spending for nondurable

erate

last year.)

...

textile
mill
products, and rubber products, tO-

rise

may

funds for business and residential

ply

in spending for auto¬

construction

the

was

services.

and

production. 'There
was

goods

expected

mobiles), nondurable goods, and

principally

There

rise

dential

; ;

building

categories—durable

employees.

(heavily weighted by

governments—funds which might

in the physical volume

year

major

business and from state and local

family

spending will rise
equally in 1957 in all of the

otherwise be used to finance resi¬

inventories

Business

decline,

Consumer
about

revenues

rapidly last year. At the year-end
they were up almost 8% from the
year before, compared with the

declined

between,

imagine

per

biles, houses, college education for
children,
and
other
relatively
large family, expenditures.
,7.

careful restraint of

rapidly rising

easily

worker

do to the demand for automo¬

can

duced will

because

Federal

additional

nounced

demand

j,n wholesale and in

finished-with

straint

The
slow,

can

during

what the addition of income from

this year. The output
of textile mills will show a mod¬

since

tinued to rise rapidly,

;

10%

exceeded

con¬

;

production

continued

and

goods,

Debt

about

adverse

some

developments in 1956.

You

persistent

and interest.

Automobile

777/7

1960's.

been

public construction.

1956.

only $2.4 billion

has

state and local.
Principal increases in Federal ex¬

governments.

durable

the

This tend¬

Expenditures for new com
struction may also rise about 3%,
comparable
with
the
rise
last
year, with a probable slight de¬
cline in private construction off¬
set by a substantial increase in
Inventory
building probably will not be so
important in 1957 as it was in

Incidentally, Federal
personal income taxes

1939.

in 1956 from the year be¬

fore.

8% last year, to $38.5 billion,
It seems almost unbelievable that
these

spending for
<- and
equipment may
5%, compared with the rise

rise

rose

Business

plant

new

debt

In terms of specific industries,
significant production gains in

the

Send for comparison of 11

the

the next decade. Re¬
gardless of its level, however, we

population
increases
over
the
years, and by the movement of
population. It will probably con¬
tinue to rise, but such spending is
largely under local control, and

expenditures.

the

Institute for Maine Industry, Colby College, Waterville, Maine, March 23, 1957.

Active

10%

goods and service in

local

qUarter

1965

before

about

the

country

governments pro¬

roads,

our

year

better

*An

make

can

estimate
steel

all

Output inbefore were

broad

for
77
,

normal—3%.

country

business

future

example,

take

1%.
gov¬

penditures for goods and services
provide principally for national
defense.
In addition to spending
for goods and services, the Fed¬
eral Government is also heavily
involved in payments for Social
Security and welfare programs,
interest on the debt, and similar
"transfer" payments. Spending by

covered rapidly in the fall.-The

—

for

9%.

rose

terms, was

1956 °ver the
before ocCUTT.ed ^ machinery, railroad
activity without attempting to es- equipment, paper and products,
timate the business cycle in de- chemicals,
petroleum, food and
tail. Business expansion plans, in beverages, and printing and pubparticular, are based on such long
together with construction
term trends.
The steel industry, °f taj!f*ies, office buildings, pubbased

indicators

spending was up less than
Spending by state and local

probably
of the output of

currently under

the

reenter

labor market his year.
ency

spending

tion is

in physical

new

many

the past 10 years and it will con¬
tinue at least until
the
middle

our

Federal

ago.

year

particularly
private debt, and that of state and

trade.

usually the next
six
or
the next
year.
Forecasts for periods beyond the
next
year
or
two are
usually
periods
months,

was

Business

build

are

growth rate
year,

nondurable

to bid a certain pc

1955

because

will

rather than

and in-

in inventories,

about

year

recor(j business activity,

creases over

continually making adjustme ts
their plans. Business decision
to invest in new plant and equip-

it would

wives

than the

number

Unfortunately,

wj(jeiy distributed—they occurred

dividual decisions to buy or

averaged

about

are

ago

year

1955^ ancj the

year

iast

con-

-n

Tbe

level of
not an exact

year

Business activity in the coun-

above

activity is

science

future

the

Estimating

forecast

1956

year

in this country, as

had

ever

forecast

our

The

business

best

^ry

outlook. For-

with

year ago.

be.
^

tunately,
confidence
has
been
high for the past two years, ana

f it remains high.

the

was

activity

1956

year

made

the

workers
will enter

young

defense

foreseen in

was

•

decisions

our

rise
in

in Southeast Asia.

levels,

ployment, personal income, in¬ the benefits are
widely distrib¬
dustrial production, etc.
We lean uted.
:
:77:;'7,
heavily on where we are and in
7? Personal income Id'st year was
what direction we are moving in
up 6% from the year before, and
estimating where we shall be a
as
a
result, consumer spending
year or two from now.
Let us
rose
4.6%, or $12 billion. Prin¬
start, therefore, with where we
cipal increases occurred in spend¬
are.
ing for nondurable goods (4-5%)
Reviews 1956 Forecasts
and
services (+7%).
Consumer
Let us combine our review of spending
for durable goods de¬

all

consumers

with such factors as business in-..

'
mm

individuals.
are

will

1957

increase

all

casts,

great m any
We

Thursday, April 4, 1957

Suez, perhaps in Europe, perhaps

In making their short-ran fofe- and water systems, 'etc. r Such
plant capacity, the year 1957 will
economists are concerned spending i£ stimulated largely by be
another year of intense com¬

right answer. In our comprivate enterprise econ-

made

favorable factor.

oetitive

decisions

serious problem

is what than it can of the steel operating
There is rate in 1958.

outlook

business

The

and services increased last year at

ernments

by intense competition, 3% production rise, and easier money
market in last half of the year. These predictions are broken

construc¬

It was not a year of

estimates

year in 1957 than the year before, buttressed by increased
individual, business and government spending, and marked
>

Tel. BO 9-0292

Tele. NY 1 -4487

Volume

Number -5826

185

The Commercial and Financial Chronicle

(15T7)

already selling in the market at
discount

from

asset

value, unless

the rights are used for actual sub¬

scription

the

not sold. The

rights

By A. WILFRED MAY

the

bull

reservoir

cally

high

striction
bond

ial g,/

market
histori¬

the

rates'

re-^

cised

financ¬

lows:

offer¬

stock to exist-'

even.

are

situations

• •

subscribing

;

May

■

overall
■

some

(4)

tion

shareholder

not

tive

source

principle by

which has

the

to this

come

Vice-President of
Continental Corporation.1
Page,

compensated

constitutes

1±.

only

the

cites

Abuse

form

—

gives them
opportunity

form of

"as¬

the

And

awakened
tance

centrating

peak

well.

concerned

that V from -the

least

izable

the

company;

off than those who do not

that

can¬

agent, the printer, and the under¬

consist

benefit

most

Dilution

rights offering/'
Mr. Page malces a much
and
highly constructive
contribution to the public's dis¬
illusionment on this important fi¬
nancing process, his blanket in¬
dictment of dilution requires some
qualification.
a

asset

has

full

text

.the

Association.

this
of

Mr.

Oklahoma
v

securities

California,
'.'

■' "•

Ohio

and

Pennsyl¬

s /

•-

which

does

monetary

company's

Determination

ment

Company

Hence,

this

Invest¬

the

with the municipal bond de¬

garding

Page's
Utilities

■**'*

2 "Rights
Offering
and
the
Share¬
holder", Observations, Aug. 2, 1956.

with

the

findings

our

impact

with

EDMOND
AS

LOS

where the stock is

OF OUR

SPECIALIZING

has

GAS

Mr.

RIverside

have

RESOURCE

opened

institutional

search department
Low

total

BLDG.

TEXAS

'l"'* '

Teletype

590

booked

some

question

was

heavy tonnages of light plate and

So that sheet mill order books are not too
flat-rolled tonnage booked, concludes "The

the

automotive

industry

new

7.4%, keeping alive industry plans to boost Aprilproduction 10% above year-ago levels. Sales covering
averaged 20,000 daily.
*

was

Automotive

Reports"

exceeding

the industry of sales well

7;,The,,au.tO;industry
duction

last week

the

mid-March sales in¬

half million retail units this

time since last June.

for the first

trucks, or 97.5%

said

by General Motors Corp. dealers and assures

sparked

closed ,out its monthly United States pro¬

with

March total of

£>79,206

cars

arid' 60,200

93.1% of scheduled volume, respectively.

most of the

month's truck output deficit

recently ended Eaton axle strike. It linked the moderate
decline in car making to a month-end adjustment which pulled
the

131,090 units from 138,646 units

past week's volume down to

Continued

page

are

pleased to

announce

that

our

of
NEW
is

•
20

YORK

now

OFFICE

located at

BROAD

STREET

New York 5,

Our

re¬

N. Y.

telephone number remains
WHitehall 4-2300

under the man¬

Goldman, Sachs & Co.

Hogle Adds

New York

LOS ANGELES. Calif —Wallace

Eagler has

been added

staff

West

Sixth Street.

A."

Hogle

Co.,

cars

11-20

"Ward's

month

daily sales of

average

period March 11-20 over that of March 1-10, increased an

Henry J. Low. Mr.
formerly - with Bruns,
Co.

;
sheet

May. But

J. A.
J.

t-3337

Winmill & Co., 1 Wall
Street, New York City, members
of the New York Stock Exchange,

SULPHUR

BANK

That draws less steel

Age."

Gude, Winmill & Go.

CAROTHERS & CO., INC.
DALLAS.

behind

Faries

formerly

Nordeman &

MERCANTILE

mill time.

associated

become

Street.

Seventh

short

put it simply, it takes longer to make

Dempsey-Tegeler & Co., 210

agement
-

sheet products.

Gude,

FIRM

NATURAL

are

ANGELES,1 Calif.—Culbert

FarieS

Henry J. Low With

BROWN

SECURITIES

OIL

mills have

same

ANNOUNCE

PRESIDENT

VICE

which

(Special to The Financial Chronicle)

industrial

ment company

ELECTION

items

same

April shipment and there is

these

the

company rights financing, dilution
is suffered in a closed-end invest¬

PLEASED

Unfortunately most of

summer.

the

Dempsey-Tegeler Go.

re¬

Vice-President
Gross, Rogers & Co.

THE

the openhearths. t To

other

C. W. Faries Joins

was

ARE

steel

paying

plate, structural and pipe.

"Ward's" attributed

West

are

heavibr steel products, adds this trade journal.
'
Most sheet mills have not noticed any improvement in

crease

;

for

less steel is produced per hour of

impressive

Ex¬

in¬

occurrence

istically and precisely determined.
Consistent

Bank.

change

and degree of dilution can be real¬

the

Corn

Chemical

from

March

past four

years

abroad

;

June auto

has

announced.

been

buyers

of the slack this

from

such

Western

for

joined

associated for the

partment

Dilution

area

vestment company

has

Eastern-produced

extra

Supporting expectations that overall steel shipments this year
on a par with those of 1956 is the fact that order
backlogs

of the New York Stock Exchange,
it

: *

Iron

been

monthly quota from the mills with orders booked

up some

sales for

members

City,

the specu-;

signs also that the premium-price market in structough as it once was. Some brokers of structural

of the

at home

■f the

bond

York

New

way,

position to dicker with

week are little changed from a month ago.
This despite the
sharp drop in sheet and strip order volume.
:
Part of the decline in steel ingot output is due to the change
in product mix. When a much larger percentage of finished steel
falls in the light plate, structural, pipe and heavy plate categories,

recipient

has

better

this

department
of Stern, Lauer & Co., 120 Broad¬
municipal

been

advance.

demand

wil

poiptst out

Richmond

John

the

steel

West Coast.

necessarily

are

from

Stern, Lauer & Go.

assets

not

take

far

inquiry.

part-time

finding its way
premium for it
freight, but the windfall is easing the tight
situation in that steel-hungry section of the country.
Many steelmakers are quietly looking for export tonnages
the

John Richmond Joins

and'

some

But heavy tonnages of

strong point.

have

are

Meanwhile,

management and the

the

market

material

limited to

are

stockholders.

marketable

values

both

forcing

-•

months

the

is still

users

because

Rothschild

are becoming easier to deal
with.
Contributing to this
slightly easier tone is the increasing structural output of a mill
that normally emphasizes flat-rolled, declares this trade weekly.
Still, the structural market continues so tight that most users

STOCK

burden,., on

market

shapes

disservice, including di¬
of the outstanding shares,

lution
to

all

—

changing* steel

turals is

causing

have

paying .for
the optioned,, stock
frequently
entails arrangements

assets

which

Hence,

The

There

case.

ensuing

Mr.
the

how

unreal¬

company's

investment

Precise

dilution

issue

placed.

pointed out

occasion^

page

for

occurred

-y

lators.

issue of the Harvard Business, Re¬

view.

On the other hand,

value.

value

realistic

Varying Effects of Offerings

before

unemploy-;

to run for cover and increased mill production of light
plate is pulling the rug from under speculators who charge what
the traffic will bear, states "The Iron Age," national metalworking weekly the current week.
*

pressed

another
corporate device, the stock option,
is cogently analyzed in an article
"Financing Stock
Purchases by
Executives" by V. Henry Roths¬
child
published
in the current

securities;
not of plants, machinery, patents,
or other assets on which
arbitrary
and sometimes comparatively un¬

While

this column

publicizes

needed

address

that

rolling, off sheet-strip mills.
This is competing with premium-priced broker material and hard-

OPTIONING

extremely simple
matter to compute its precise net

writer

the

extent

some

market

asset

"Chronicle"

The

bookkeeping,

figure.

subscribe, and goes on to say
that: "actually it
is the transfer
get

—

portfolio, it is

not

cover

■

Plate

effects

circumstances

relevant

IMPACT

times, by simply listing the mar¬
ket prices of the securities in its

those who subscribe may be better

1 See

investment

who

decreases

■

flight-gauge

main¬

that/the

see

individual

each

and

company,
dilution
is not

rights offering must be ap¬
in the light of the par¬

ticular

industrial,
the

measurable.

consists

reported

brokers

company

framework

necessar¬

railroad

incurrence

through rights; that such an offer¬

case

ing either dilutes the stockholder
or
forces him to increase his in¬

widely-

obvious

•

praised

the

easily

con¬

long-term point of view they are
better
off
without
offerings

most

this

seems

particularly

are

utility

•

He is maintains

The

definable.

to be
impor¬
of

lieu

ironic,

the con¬ value, or equity value referred to
price — above, is usually—at least as far
sometimes
a
past as the fixed assets component is

.and

from

Thus

Yard

on
the market

present

vestment

Back

attention

from

ily

to say

needs
crucial

the

dilution

cession

public

His

tions to which he refers

good invest¬
that it is a

subscribe; and goes

not

vania.

warranting the sufferance of dilu¬
tion,,..
./
,,..p

by a leader in the closed-end in¬
vestment company field. For it is
in that very area that the implica¬

extra dividend."

was

claims fell 10%; the past week, but were close to those of
comparable period in 1956. Layoffs, it was stated, declined
the
construction
and manufacturing; industries.
The most

noticeable

cru¬

hand, an invest¬
ment company, a holding company
whose assets are securities, obvi¬
ously has no such compelling need

attended complaint has been made

impression

under the false

writer, is it that the

he points out that

confusion,

ment

other

the

Quite

"some stockholders are in faVor of

that

fi¬

new

taining its competitive position or
perhaps
even
self-preservation.

situation,

accom¬

factor of dilution, but
spells out its implications. In

rights

Failures

fractional nature occurred in the output of the

,-Tn the field of employment it

psually needs its new
expansion in line with

ment—in
'•

scribes.

com¬

his effort toward clarifying popu¬
lar

set to

the

national " trend, for the pur¬
chase
of
needed
capital /equip¬

"premium"
situation, he gains if he sells his
rights; comes out even if"he sub¬

Tri-

panying
also

ended

the

another

investment

closed-end

not

Business

ment

•

the

stockholder must subscribe to

himself

utility

even.

"discount"

sessment" status.

This officer of the nation's larg¬

pany

Index

Production

Wednesday of last week, but these increases were off¬
degree by slight declines in the production of steel and
some food products.
However, for the nation as a whole, total
industrial production showed a moderate gain above the similar
week a year ago.
'A ?
v

the

Financing's Motivation

* funds for

dilu¬

escapes

out

comes

protect

been made

during the past week by Frederick

est

Increases of

net

a
-

rights-subscriber

situations

and

Thus,

authorita¬

writer's attention, has
W.

evenly
.

field. An industrial

pany

only

overall condemnation of the prac¬
in

The

nancing

•

■

The

premium

first

the

But

draw-backs.

tice

Industry

Price

automotive,.electric^:power> a»d>goal industries during, the..pbriod

con¬

assessment.

The motivation for

out

comes

dilution, but enjoys
gain.

escapes
Wilfred

mention

included

virtually

case

(3) Where the outstanding stock cial reason why the practice of
is selling at a premium, that is1 creating, dilution is especially un¬
above its equity value, the non- justified in the, investment com¬

Comment

has

Auto

engaging the
public's inter¬

the

equity.
'
rights-subscriber
in/

The

discount

high rate of
activity,
i Accordingly,
attending

est.

stituting

dilution of his

(2)

new,

aspects

rights in that

fol¬

suffers

rights is being
a

sold; specifically

via

used at

and

higher asset

Output
Trade

Commodity Price Index
Food

value and the market

than
holder not exercising his rights to; more
to a new stock offering for dilution.

share¬

holders

State of Trade

the

not

other hand, when the outstanding
(1) Where the outstanding stocks
is selling at a discount, that is be¬ stock is selling at a premium, a
low its equity value, the stock¬ stockholder selling bis rights is

de¬

ing additional
ing

and

Retail

tion

the

vice

stock

and

„

interest

price and the

price,

Production

Electric

Carloadings

price. Dilu¬
occurs
only when the out¬
depends on the relation between
the market price of the outstand-:. standing ,£tock
is
selling
at
a
ing shares to the equity value, and discount—with the offsetting sub¬
on
whether* the rights are exer¬ scription/to new shares via the

With industry's enlarged capital

demands,

between the market

Steel

•The

and

subscription

difference between

REALISM ABOUT RIGHTS
'

new

value, and sale, of the
only the difference

cover

the
507

St. Louts

April 1, 1957.

Boston
Albany./.

Chicago
Buffalo

Philadelphia
Detroit

"make

believe"

free

ket

By ALLAN SPROUL*

have

York

disturbing

proper

which

less

gold as a
question
constantly

be-

those who

the

that

lieve

use

metal

hammered

only safe
monetary
standard

for

home

they

gold
which

sponsibility we cannot abandon
long as it is our aim and ob-fc
jective to promote the greatest:
possible freedom of exchange of
goods and services, and the con¬
vertibility of currencies, outside

have

others

and

fixed point of "monetary reference
in a still disordered world, a re¬

place

economic arsenal today.

our

convertible

Doubts Foreign Run on U. S.

license,
the

J something
into

Gold

what is, probably, a
temporary lull in the agitation of
these
hardy perennial questions
about
gold, other queries have
tried to keep some of the spot-?
light of public attention focusseds
uring

for

pay

with

buy

States'dollars.

our

money

United

beautiful

this

You can't get very

these

of)

Two

metal.

questions

may

that is all.

the gold mining industry bCr,
The first
question is the one
So. far as* an arbitrary increase which has been raised most often
ginning in 1948, and a free gold
in the price paid for gold by our during " the
market was established early in
past
year
or ^ two.
our
1956. The latter is one of the con--' Treasury is concerned, I hold that Stated baldly, it equates the gold
present system
of "managed
cessions which our gold miners it would be,a haphazard grant in holdings
of
the
United
States
mcnev," savings, investments,
have been seeking, and yet, what aid to foreign countries, based on against the possible claims of for¬
long term commitments, and the
have the miners of Canada done- a more or less accidental distribu¬ eign nations, and their nationals,
production and exchange of goods
since
they • have had a choice? ,. tion of existing gold stocks and on that.gold and comes to the con¬
and services, both nationally and
gold producing capacity.
And I clusion that, if all of the claims
internationally,
have gone for¬ They have taken a government;
hold t h a t r its
domestic results of these foreign holders of dol¬
ward
for
more
than
a
dec¬ subsidy and sold their-output tothe government rather than- sell would be no less haphazard, pro¬ lars'
were
exercised,
the
gold
ade
in
a
rising
trend,
with

the few who cling

gold coin convertibility
theological
doctrine.
With

and

kind

the

soundness

among

That

abroad.

the

except

cally civilized
country is one
based on gold
convertibility

standard

gold

some

the

hold some'
far away from the price paid for. passing interest for us. The first?
gold by the United States Treas¬ relates to the possibility of a gold;
ury in the
world of today, and run on the United States and to
the price paid for gold in the Lon¬ our ability to meet it while pre-,
;
don market is a reflection of our: serving our required internal gold?
the "not so iron" curtain,
ternational commerce, while proprice and the dollar- reserve requirements. The second
It would be instructive, how-'; Treasury
tecting the purchasing power of
sterling exchange rate. It is pos¬ relates to the possible adoption of
our money.
Our present United ever, to make one or two compar¬ sible to trade to advantage within a
gold dumping "program by the*
isons with countries which have
States dollar has the supreme at¬
a narrow range of permitted ster¬
U. S. S. R., aimed at making fa-'
these same objectives, but which
tribute of good money in that it is
differ in their treatment of gold ling-dollar fluctuations, because of ; vorable trade bargains with un¬
universally acceptable wherever
the'• So-called * mint
nations
and
nationsor, melting committed
such acceptance is of importance dealings. In Canada, for instance,
now friendly partners in the free
assistance (a "polite charge,which our Treasury makes
to us. There is no susbtantial fear emergency
when
world:-;
•'
:,V;X
>
buying or selling gold, but
name for a subsidy) was extended1
of

economi¬

certainly has

name,

gold market in the world,
is not really free.
While
anyone can sell gold in the Lon¬
don
market,
residents
of
the
United Kingdom and of the

privileges of the citizens
foreign countries to buy,
sell, trade in, or hoard gold are no *
guide for the United States. We ling area can
amounts
of goidTunder
have been and are maintaining a

increase

but

circum¬

and

restricted

•

price of gold, which is devalua¬
tion
of
the
dollar
by
another

The

monetary

stances.

ex¬

"free"

consequences.

scribed

domestic gold
irredeemability; opposes free gold market proposals; doubts
the possibility of a gold run on the United States; believes
U. S. S. R. attempt at gold dumping could be combated; and
>
agTees there are valid questions about selective credit controls.
With regard to need for fundamental, objective study of our
whole financial machinery, Mr. Sproul believes it should be 1
done. Terms monetary discipline "good medicine for the body
economic/' and desires its widespread acceptance and support
even
though it may never be popular.

•

instructive

which

The

Leading central banker reiterates his views

even

possible temporary ' ample is the London gold market,
was
or
short run deviations from the - which
reopened in March,
1954.
It is by far the principal
fixed price of the Treasury could

Gold and Monetary Discipline
Former President, Federal Reserve Bank of New

.gold mar¬

April 4, 1957

The Commereial-and Financial Chronicle■'Thursday,

i(1578)

which this

country maint

i ri

o r

Allan Soroul

fluctuations.

minor

only

years

many

prior to 1934.
Paper money or

once we

And

rid of the aftermath

were

dollar balances of war, our government and our
coin monetary authorities have shown

could be exchanged for gold

bullion, on demand and at a
price, by our own people

fixed

and

nationals of

Unless
or

the

that

will

other countries,
to that

satisfied

not

system,

the fundamen-

standard,
will

talists

authorities

monetary

return

nor

be quiet.
which, in

Our present
standard
effect, obligates us to meet the dollar claims
of foreigners in gold bullion, but
which does not permit citizens of
this country to convert their currency and bank deposits into gold
coin, is almost worse than complete inconvertibility to t h e s e
dedicated people.
they

There

others lfc»»: dedicated,

are

perhaps, and with a greater tinge
of pecuniary interest, such as the
gold miners, who do not boggle
particularly at the form of gold
standard
we
have adopted,
but
who do suggest that we should be
little

flexible in

our

trading in gold and
the official price of gold.
they want, one way or anis an increase in the dollar
of gold—that is a devalua-

about
What

other,
price

tion of the
"T

hflvp

dollar.

mvsolf

evnre^ed

these questions in the past, and I
no more than summarize

views

I do like to
views, however, be¬
they provoked such a spir¬

was

firsl

Honesty." And

that "Monetary management
high sounding euphemism.. It
means
constant lying to support
constant swindling." You can see
a

sometimes pejr-

and

mechanical

useful

the

pockets

purpose

to serve
of the

hoards

irv

nnri

those exciting
exciting daj
davs
s.

which

held

this

sub-

ject when I spoke at the annual
convention of the American Bankers'

Association
which

with

respect to

ibility,

currency,
because

able

1949,

think

our

two-

and

fnHaxr

domestic^

not

nor

the

in
hnlrl

eon

are

fn order^ that

our

deposits,

interrhanvp

need be convertible into

may

Perhaps
jrc,iIIit±J5

I can
L* cari

vfdd

honest currency, which facilitates

♦An

address

Economic

our in-

by Mr. Sproul before the

Club of

Detroit, Feb.

is,

1'resident f,

ARTHUR

ueai

proP

fo buv
bu]liof1

sell

dnil
fi
?ume1t tbnt fo

void
ar

«h'1 ii\L tvL?!?™?,
COmmoddv dt
commodity, as well as

°
monetary

[yXX,
■

EEClli'EE-

V? d

th!f !hov i

Xe-r.Xy- XA S S E TS

■

v.$21X06,0,69

Untied States Govern meri t securities

16015H,742

...

*
•

State a/icf

...;

muweipal bonds and nates

President

Loans and bills purchased.

■■

Investmen ts in

;

Limited.
"

CHEST OX-

COULTER X

■

•

.....

■4,557,089
1,800,000

Morgan Grenfell «$• Co.

Banking house.

)

Morgan i\" Cie. Incorporated,

and Jit Broad Street
.

....

Corporation. '.X.
......

;. y.

3,560,000

3,000,000

.-.....

Liability o/ cuslomers on letters
;of credit and acceptances... . .......

21,268,830
$350,252,0S9

;

■■

•"

•+ ■:

;

Did KEY X. \,

CHARLES 1).

*■

LIABILITIES

ChairmanyExecutive Committee

'Deposits: .77. S. Govern ment........
CARL

./. MILEEIt T
President

?•

•

=■

The Gillette Company

OlJicial checks 'outstanding,..:

40,702,628

....

All other yy:y.

;

X.D.JAY
Director

•

Accounts

DEVEREUX

as>

credit issued

JOSEPHS
>.

It',

for taxes. etc..

.>;

x-.

7,787,191

y±

.vt'.";.. ft....

30,000,000

....

19,141,742

Undivided ptoftfs-l

"...

21,321,516

...

Capital—SCO,000 shares. XX.-.'r
Surplus

LAMp'XT

Vice-Chairman •;

reserve

22f20A96
$742,001,640

Acceptances outstanding and letters of

Chairit(nn
XX
Life Insurances Company

TlIOAf.iS S.

payable,

.078,478,546

3.X

New York

LEFFIXCrWEEL

$850,252.039

the
an

^
^ ^

United States Government"serurities

stabiiiil If £ mi
sellin! %niT
l! Ltf 1al(
S&liin^
bOW dl IlUCtU3t*Il^'

-•

the above statement

'•,

G USTA V METZMAX

secure

carried at

ALFRED

S.
P.

M ORG AX

Member Federal

SLOAX, JR.

$60,046,403 in

pledged to qualify for fiducviry -pmvers. to
public- monies as required by law, and. foe-other purposes.
are

Mem her Federal' Reserve

JUX1US

shltH

Iran

»»5/.

System.

Deposit Insurance Corporation

Honorary Chairmany.
' '
General Motors Corporation

JAMES
,

fn Jma sp^:ldaUa s

ri^t* to

trade in gold, which may
run counter to the Public interest,

the

nriVe

^ ,he 0I"X
whloh1 m'l

'to

gtates
P3^ ^0l
case,

there

So long
is

sense

that is the
in

having

MORGAN

THOMSOX

Finance Committee

12, Place

CIE.

INCORPORATED

Yenddme, Paris, France

Hartford Fire Insurance Company

GEORGE
JOHX S.

WHITXEY

ZIXSSER

Vice-CluiirmaH
Merck & Co., Inc. ~'

i
i

McCOLLUM
President

}n(?l^ary
1'

379,006,126

/..

DEU PRICE.% -

It.

Chairman j ;
*■ j.y.
The' P. P. Goodrich Company• ;*
^'

RICHARD

JOT1X L.

Stock of-the Federal Reserve Bank.

Cie, Incorporated

Morgan

12,672,782..

Accrued inter est, accounts receivable. etc..

CARTER

Chairman, -;

CHARLES

<44,983,442

■

GABOT

Slate Street .Investment Cor partition

BERXART)

-*■

•*7

Other bonds and securities..
PAUL

Continental Oil Company

met

Cosh■-on-Jiand atul due from -banks

Coifnrniwn'

Pechtrl

long

page

Statement of Condition March .77, IBM

-r

-Presid/Mt

?•

•

/'m

the

YORK

■"

gold

■£■(

Morgan c* Cie. Incorporated
<rot.

Continued

in v allcircum¬

effects

as a

against

reserve

deposit and note liabilities of the

pre¬

NEW

ill

P°Sals for 8 free goId markct

its

required

now

(certificate)

INCORPORATE!)

AX()RRSOXr

STEPIIEX D.

minimum

would

:-V".

AJjKX:A.XDEII

States

J. P. MORGAN & CO.

t. da visox

with
VViin

deal

unpredictable

cise

CJtairmtinv

the United States, and for an in¬
crease in the price of
gold, in even

have^n ™

ourjiomestic pursuits and

which

and

United

would fall substantially below the

vert-

that

bank

the

T/i r»c?f

Chairman

miners have the protection of

here, briefly and without
supporting
argument,
are
the

sun¬

holdings; of ; the

manifold

highly inflationary under some

gov¬

The Procter & Gamble Company

Well

views

IlEXR Y

Opposes Free Gold IVLirket

exchange.

Recommends No Change

•

people.

metal
and an international medium
of

circumstances,

for

expansion of credit which might

D1RECJORS

the necessary disciplines in trade
and finance a* home and abroad.
It has

basis

the

viding
.

sufficient- to

attractions

device.

Gold
has a usefai monetary role to
Ph*y> chiefly as a means of balancing international accounts, and
a8 a Suide to, not as a dictator of,
yerse

was

siabd-

Ignored S ETES mfnS 2£
one of the
^i

statements made in rebuttal of my
defense of monetary management
is

longer exerting

harsh

ited resnonse from those who hoid

Common

izing influence on the economy
a'?d' at I1"}?8', was Perverse in its
effects. Discipline is necessary
^ monetary management, but ic
should be^the discipline of eompeter.t and responsible men, not
the supposed automatic discipline

now.

contrary opinions when I
voiced them seven years ago.
A
pamphlet was put out with the intriguing title "Sproul

held

nomic and social policies,
I think that, fundamentally, the
gold coin standard has passed into
history and an international gold
bullion - standard has been accepted by the United States because experience had shown that
domestic
convertibility
of
our
.currency (and our bank deposits)

refer to these
cause

subsidy.

decent respect for fiscal and get them out from under the
monetary policies which will safe- shade held over them by the
guard the integrity and the pur- ernment..
"
chasing power of the dollar, insofar as this can be done by fiscal
and monetary means which have
a
due regard for national eco-

shall do

the free market," in
elsewhere, and forego
The free market has

gold

Canada
the

ideas

about market

their

;

y
..

■

MORCtMX GRENFELL X
Great

Winchester Street,

coy LIMITED]

London E. V. 2; England

Bank of America

The First National

N.T.ZS.A.

City Bank

Bankers Trust Company

of New York

Blyth £ Co., Inc.

The First Boston Corporation

American Trust Company

Smith, Barney & Co.

Chemical Corn

Exchange Bank

Son Francisco

The Northern Trust Company

'
Merrill

Security-First National Bank f

Los

Angeles

Lynch, Pierce, Fenner & Beane

Seattle-First National Bank

of Los Angeles

California Bank

R. H. Moutton & Company

;

Bear, Steams £ Co.

Dean Witter 6 Col

William R. Staats & Co.

Reynolds & Co.

*' " -V,' *

' u"

CITY SCHOOL DISTRICT
CITY HIGH

Bonds, Election 1955 Series C

J. Barth & Co.

ifornia

Angeles

Agriculture is extensive and widely diversified in the trade

Industrial development has been exceptional to serve the growing

•

Per

•

The

area.

capita income is above the high level reported for California

Metropolitan Area

Growth has been dynamic in both
The tax base is a conservative

despite extensive bond sales

with the growth.

Tax

•

Vv'-

;

Andrews £ Wells, Inc.

Bacon, Stevenson £ Co.

Francis I. duPont £ Co.
E. F. Hutton £ Company

Ira Haupt & Co.

Roosevelt £ Cross

population, assessed
keep

necessary to

Stroud £

Incorporated

Company

Robert W. Bain! £ Co., Incorporated

Incorporated

—*

A G. Edwards & Sons

City National Bank £ Trust Company

of Chicago

,'T'

delinquencies have been relatively small

the

over

years,

Ginther £

„

Company

National State Bank

Kean, Taylor £ Co.

Newark

and financial record has been excellent.

New York Hanseatic

H. E. Work & Co.

Corporation

I
'

Issues, Amounts, Maturities and Yields
(Accrued interest to

■-•,

■

William Blair £ Company

Gregory & Sons

population and assessed valuation.

Debt and tax burden continue moderate in relation to
and full value

Georgia

proportion of full value.

•

whole.

as a

(Incorporated)

Bacon, Whipple £ Co.

West.

ranks third in the United States in major

now

respects, behind New York and Chicago.
•

Trust Company of

High School Districts for conservative Investment

•

John Nuveen & Co.. Shsarson, Hammill £ Co.

Angeles City School

•

Laidlaw & Co.

Clark, Dodge & Co.

Carl M. Loeb, Rhoades & Co.
We recommend bonds of the Los

and

SCHOOL DISTRICT

be added)

'?■■■',■

■<

•

:
J. C. Bradford £ Co.C -

Julien Collins £

Bpe and Phelps

Company

Incorporated

Kenower, MacArthur £ Co.

Lawson, Levy £ Williams

$10,000,000 Los Angeles City School District
$10,000,000 Los Angeles City High
C'ty School

High School

District

$400,000

Price to

Due

Yield

1958

2.10%

District

)

2.25

400,000

•400,000

400,000

1960

2.40

400,000

1961

2.50

400,000

1962"

2.60

400,000

1963

2.70.-

400,000

1964

2.75

400,000

1965

2.80

•T-

oo o

1966

2.85

400,000

1967

2.85

400,000

1968

2.90

_•

•,

i'"

400,000
400,000

400,000

Due

Yield.

1971

2.95%

1972

3.00

400,000

•

400,000

1969

2.90

400,000

1970

2.95

■

;•

:"V

1973

3.00

400,000

1974

3.05

400,000;

1975

3.05

400,000

*4-976

> 3310

400,000

1977

3.10

400,000

-400,000

400,000

.3..15
1978
1979' 3.15 .'

400,000

1980

3.20

400,000; > 400,000

1981-

3.20

400,000

1982

3.20

400,000

Provident Savings Bank & Trust Company

Blunt Ellis £ Simmons

Due

May 7, 1957

of Memphis

Hooker £ Fay

York, N. Y.,

Los

■

Incorporated

Mayl, 1958~82, incl.

all

V,'.

Stern, Frank, Meyer £ Fox

Minneapolis

$ 1 ,000 .regrsterabie only

bonds

California

are

funds which may
v

for. savings

as to,

(.annual); j>ayobj»;,MjQX ,1Ff« 1958.

Jboth principal and interest.

upon

their bonds is exempt

upon the
.for other
legal investments ;for savings hanks, and

are

school

moneys

in California.

of Division 3, Chapter 17 of the California Edu¬

purposes,

obligations of the issuing district and

are

payable, botti principal and Interest, from ad
as to ra'te or amount upon all of

be levied without limitation

the taxable real property

in „the issuing District, and which, under the. laws now in

force,

jnay.be levied,without limitation.bs to rate .o/ amount upon .all of the taxable personal
T' -property,'except certain classes thereof, in ihe issuing'District.
x
1
; ':~ \
v.
-.

bonds

The First Cleveland Corporation

•

The First National Bank
of Saiaf Paul

are

offered when,

Hannahs, Baffin £ Lee

Folger, Nolan, Fleming-W. B. Hibbs £ Co., Inc.

Pierce, Carrison,Wulbem, Inc.

Rodman £Renshaw

Seasongood£ Mayer

The Continental Bank and Trust Company

DoU £ Isphording, Inc.

Ellis £ Co.

Elkins, Morris, Stokes £ Co."

The First of Arizona Company

comprise separate"issues of two distinct Dis¬

valorem faxes which may

The obore

Fahey, Clark £ Co.

Dempsey-Tegeler & Co.

Fred D. Blake £ Co;

Salt take City, Utah

tricts..The bonds of each issue in the ooiniorf of counsel constitute the legal and binding

Townsend, Dabney and Tyson

likewise legal investments in.California

security for deposits of piiblic

These bonds," Issifed under the provisions
cation Code, for'various

-y*

banks, 'subject to the legal'limitations

be invested in bonds which

eligible

are

Sntro Bros. £ Co.

•

legal investments in New York for trust funds, and savings

amount of the-bank's investment, and are

coupon

statutes, regulations and court decisions.

jrr

of Loe

agencies of Los Angeles County in New

at any. of the fiscal

Federal and State of California personal iogome taxes under existing

.1-

and

of,

of counsel, interest payable by the"Districts

present

-We believe these
banks

and November 1) payable at the office of the Treasurer

Chicago, Illinois, at the option"of the holder, first

In the opinion
from

)

Angetes, California,

Coupon bonds in denomination of

Lyons £ Shafts

Kalman £ Company, Inc.

Stubbs, Smith £ Lombardo, Inc.
Principal a"nd semi-annual (interest (May

The First National Bank

Cruttenden, Podesta £ Co.

Northwestern National Bank

Angeles County in

Robert Winthrop & Co,

Van Alstyne, Noel & Co.

Thornton, Mohr £ Parish

Dated

Third National Bank

Stone £ Youngberg

in Nashville

400,000*

;

400,060

Wm. J. Mericka £ Co., ln:.

Shuman, Agnew £ Co.

400,000

McDonnell £ Co.

•

Price to

High School

400,000

1959

Irving Lundborg £ Co.

School District

City School

and if issued ond received by

and subject to approval of legality

by Messrs. O'Melveny I Myers, Attorneys, Los Angeles, California.

GNckenhaus £ Lembo
The

Weil, Roth £ Irving Co.
*

circular

Wagenseller £ Durst, Inc.
Arthur L. Wright £ Co., Inc.

C. N. White £ Co.

relating to these bonds

may

be obtained from

any

of tho

above underwriters♦-

April 3. 1957

The Commercial

(1580)

Hertz Corp.—Annua]

Dealer-Broker Investment

Ilevi

)

Recommendations & Literature
It i»

understood

that

the

send interested

firms

will

mentioned

Stainless

Co., 120

tion

naval program for six
estimates of uranium
demand and supply, South
African uranium ore reserves,
and items on Newport News Shipbuilding & Dry Dock Co.
and Foundation Company of Canada—Atomic Development
Mutual Fund, Inc., Dept. C, 1033 — 30th Street, N. W.,
Washington 7, D. C.
J
including Euratom,

View

Northeast Airlines,

1957

Edition—Wood,
York 5, N.

Canadian
&

South

173

Inc.,

Wall

Portage

and capital

Investors and Incorporated

—

Current information

Parker Cor¬

Co., Ltd., Ill Broadway, New York 7, N. Y.

yield

market

and

National

York

Quotation Bureau Averages, both

performance

Quotation

over

Inc.,

Bureau,

Company—Report—Ralph B.

Insurance

Life

Co., In¬

13-year period —
Front Street, New

■

ration, 16 Court Street, Brooklyn

billiori
b 1

Ex¬

was
—

dou-

what

1 9 5 3.

There

were

issues

new

r e

gis t ered

SEC

the

1956.,
There

1, N. Y.

lion

are

Peabody

Co.,

Notes

Wall

Steel—Analysis—Peter
Street, New York 5, N. Y.

Wall

McDermott

Co.,

Drilling Company Inc. — Report — Rowles,
Co., Bank of the Southwest Building, Houston 2,
- ""''"y--".
v.,

Texas.

Company Limited—Analysis—-New York Hanseatic

Annual

Burroughs &

Stout

Son, Inc.—Report—Eisele & King, Libaire,
Co., 50 Broadway, New York 4, N. Y.

in guarding

and

the

econ¬

constant

vigil for fraud¬

Palm

for capital in this country. School

building programs, highways, con¬
sumer
requirements and defense
requirements
need
this
public

.y-Vv

will hold

support;

ASSOCIATION OF LOS ANGELES

Security Traders Association of Los Angeles will hold its

19, at Palm Springs Biltmore,

Spring Party—May 17, 18,
■_

tremendous demand

their

■

Springs, Calif.

There

May 17, 1957 at the Country Club

Traders Association
on

Maryland.

The

Corporation, 120 Broadway, New York 5, N. Y.
J. P.

Spring Outing

SECURITY TRADERS

•

Burmali Oil

Security

Baltimore

The

22nd Annual

ASSOCIATION

SECURITY TRADERS

BALTIMORE

Bartle

Winston &

are,

nation. I feel it

our

kind.

Botany Mills, Inc.—Memorandum—Aetna Securities Corp., Ill
Broadway, New York 6, N. Y.
•
•
%.•

I know

ulent financial transactions of any

Brewster

duty, and the duty of all of us, to

Wilcox—Circular—Joseph Farcll & Co., 29 Broad New York 6, N. Y.

way,

omy

here

shareholders

these

Bethlehem

shares.

own

vitally interested,

Association

Babcoek

Williams

other members of the Federal Bar

Street, Philadelphia 9, Pa.

Inc.—Memorandum—Kidder,
Street, New York 5, N. Y.

people in

the United States who

Philadelphia Bank Stocks—Comparison of 11 largest Philadel¬
phia Banks—Stroud & Company Incorporated, 123 South

AMP

Paul

mil¬

over

4, N. Y.

Broad

year

change

with

Inc.—Circular—Security Adjustment Corpo-

Yonkers Raceway

commer¬

$13,100,000,000

corporated, 20 Broad Street, New York 5, N. Y.

City is the

yvy■

■

volume in

was

Company, Inc., 25 Broad Street. New York 4,
available is a report on Loyal Protective Life

Universal Products Company, Inc.—Analysis—Blair &

;

cial and financial capital of the
country, with the most important
Stock
Exchanges in the World.

Stock

Insurance Company.

showing an up-to-date- com¬
parison between the listed industrial stocks used in the DowJones Averages and the 35 over-the-counter industrial slocks
in the National

Also

Over-the-Counter Index—Folder

used

American

Leonard

-y

the New York

Street, New York 5, N. Y.

United

Yamaichi Securities

market..

New York

lar

Investing Corp., 80

Ferry, Inc.—Study—General

daily
worth¬

alone the dol¬

Unilever—Memorandum—Model, Roland & Stone, 120 Broad¬
way, New York 5, N. Y.

10, Mass.
—

•

Corpora¬

Boston

indicating

less stocks—to the serious injury
of the reputation of the financial

Last

Company—Review—First

stock

Cites pre¬

victimization of bettors

Co.—Study—Singer, Dearie & Seribner, Union

Finance

Trailer

Wall

gains payment for Incorporated

poration, 200 Berkeley Street, Boston
Japanese Stocks

unit

prosecntion

activities

room

—

100 Broadway, New York 5, N. Y.

tion,
TMT

Income Fund—The

111.

securities

liminary investigation into boiler

Building, Pittsburgh 19. Pa.

Seaboard

Richardson

Calendar—Monthly calendar and memo-card—giving

dividend record

Tidelands, Inc.

If. II. Robertson

Street,

Royal Bank Building, Toronto, Canada.
Dividend

Co.,

analysis of Sterling Sugars, Inc.

Winnipeg, Canada and

East,

Avenue,

Salle Street, Chicago 3,

Trust

Securities—Review—James

Co.—Memorandum—Leason

creation

announces

special

frauds referred to him.

Study — T. J. Feibleman & Co.,
Richards Building. New Orleans 12, La. Also available is an

Convertible

Sons,

Co.,

Street,

Farnam

326

S. in the New York area,

expedite

1956-1957 statistical informa¬

Inc.—Bulletin—John H. Lewis & Co., 63

Manufacturing

Kimrock

Gundy

Street, New York 5, N. Y.

Wall

Plieoll

Canada and Canadian Provinces Funded Debts Outstanding—
New

States Attorney

Mr. Williams

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

Company; 15 Broad Street, New York 5, N. Y.
able is current Foretell Letter.

of U.

Aviation—Bulletin—Van Alstyne, Noel & Co.,

North American

Monthly investment letter^-— Burnham and
Also avail¬

—

United

As chief law enforcement officer

Co.,

Corporation,

Waehob-Bender

—

Omaha 3, Neb.

atomic aircraft carriers, official AEC

Bnrnham

By PAUL W. WILLIAMS*

Company—Analysis—Loewi

Nebraska Municipal Subdivisions

Atomic Letter (No. 25)—Comments on expanded atomic power

abroad

Mission Corp.

Steels, and

A His

Thursday, April 4.T957

Stock Frauds

Incorporated,
225 East Mason Street, Milwaukee 2, Wis.
Also available is
an
analysis of Central Louisiana Electric Company, Inc.

Broadway, New York 5, N. Y.

program

East

110

Prosecuting

Letter'—Hayden, Stone & Co., 25 Broad Street, New York
4. N. Y.
Also in the same issue are data on Hertz Corp.,

pleased

Upham &

Avenue, Chicago 4,- 111.

Kimberly Clark—Data in current issue of "Monthly Investment

parties the following literature:

Energy Review—Survey—Harris,

;

report—Treasurer, Hertz Corporation, 218

Electric Co.—Memorandum—Robert W. Baird
Wisconsin Avenue, Milwaukee 1, Wis.

Duty

Co..

Louis

Atomic

Wabash

South

14, Calif.

Street. Los Angeles

West Seventh

210

Co.—Report—Robert H. Huff & Co.,

Great American Insurance
"

and Financial Chronicle

y-v.-

:/• ;'

>';

;,y y. -y

speech by Mr. Williams before the
Bar Association, New York City,
28, 1957.

here

the

heart

New

Federal

■

;

March

Cities Service Company—Data

—Francis I. du Pont &
Also

the

selected

and

payers

in current issue of "Gleanings"
Co., 1 WalJ Street, New York 5, N. Y.

issue

same

are

issues

list

with

standing.
Cromton & Knowles

Corporation

—

Report

Inc., 140 Federal Street, Boston 10, Mass.
Fanner

Manufacturing

"Quarter

only common
? V)'V;1,

Co.—Bulletin,—De

—
,

May'& Gannon,
< \
r
.

Witt

ganization, 100 Broadway, New York 5, N. Y.
is

bulletin

Century"
shares out¬

Conklin

Or¬

Also available

Williams-Me Williams Industries, Inc.

Arthur

New York Hanseatio

Street, New York 5, N. Y. Also available are bulletins
Shipbuilding & Drydock and Pure Oil.

Maryland

Formed in

(Special to The Financial Chronicle)

BOSTON,

Mass.

Arthur

—

the munieinal depart¬

ment for Clayton Securities Corp.
and

prior thereto

Putnam & Co. and du
sey

with F. L.

was

Pont, Hom-

CHICAGO, 111.—Frantz, Hutch¬
inson & Co. has been formed with

offices at 141 West Jackson Boule¬
vard

chinson,

our

trading list
,

American

Officers

securities

are

President:

Frank Hut¬

Gene

Frantz,

Hutchinson,

ated

with

was

Secretary.

formerly

Weed en

Co.

Mr.

associ¬
in

DEMPSEY TECELED i CO.

the

nis has been admitted to partner¬

ship with David Sherman in Cap¬
to

engage

Hutchinson

CHICAGO, 111.—Herbert S. Kip-

Lately added

business.

Vice-President and Treasurer; and

& Co.

Admits New Partner

BANKS, BROKERS, D£AL^?S—

Chicago

(Special to The Financial Chronicle)

King has become associated with
New York Hanseatic Corporation,
84 State Street.
He was formerly
manager of

Federated Department Stores—Bulletin—Bache & Co., 36 Wall

Fraiflz, Hutchinson Co. DEPENDABLE MARKETS

King Joins

v;.; sj,

Photocopy Equipment Co.

municipal department. Mr. Frantz

ital Securities Company, 209 South

was

La Salle

Street.

Drilling Co.

*Fisher Governor

Company

the

William

TRADING MARKETS

municipal department
Blair

Company.

FLORIDA
SECURITIES

I
Are Your Records

*Falcon Seaboard

Bank, Insurance Companies,

Incomplete?

Industrials

'TOR SALE"
Invest in

Florida's

>
•

Prospectus

Request

Annual

Inquiries invited

Number of

Bound

Sets

Beautiful

Golden

"CHRONICLES" of

TRADING

Available in New York

TROSTER, SINGER & CO.
Members: n.

ALFRED

MM51

D. LAURENCE

& COMPANY

Security Dealers Association

Phone

Trinity Place, New York 6, N. Y.

City—Write

DEPARTMENT

TELETYPE

Various Dates From 10 to 50 Years

Triangle

REetor

INVISTMINT StCUKITliS

2-9570

Edwin

Beck

c/o Chronicle, 25 Park PL N. Y. 7

201 S.E.1st Ave. Miami,

Flo*

Phone: Miami, FRanklin 3-7716

Number 5626

Volume 185

The Commercial and Financial Chronicle

in the heart of the coramercial center of the world, that

York,
.

long way to ruin.the reputation of
the financial market.
•

H. B, Shaine & Go.

The boiler roOm operators have
their sucker lists.
The "opener"

Formed in Grand

varied financial enterprises
commercial banks, invest¬
ment banks, sayings banks, insur¬ telephones all the people on the
list and then the "loader" or the
ance companies, brokers and deal¬
"re-loader" follows up, and thus
ers attempt to fulfill these capital
requirements. The savings ot ingenuous investors are fleeced.
The
Securities
and
Exchange
many millions of people through¬
out our nation are made available Commission is quick to investigate
stock swindles £nd with the new
to fulfill these requirements.
many

•

such

Securities Unit, of the U. S. Attor¬

Exchanges Vital

•

stock ex¬
changes and securities exchanges
of all kinds is to provide a cenThe great function of

<1581)

ney's Office, we shall be quick to
prosecute.
It is for this reason
that I consider the creation of this
Unit

firm

Rapids

(Special to The Financial Chronicle)

GRAND

Shaine

are Earl A. Bedford, Richard
McCormick, Jr., Delia E, Wicks,
and Ralph J. Zinn, all previously
with Arthur M. Krensky &
Co.;*

Inc.

RAPIDS, Mich —H. B.
Co.

has

been

McKay Tower.
are
Hyman B. Shaine,
President; Maurice J. Amelar and
Richard J. Boss, Vice-Presidents,
and E. M. Silyerstein, SecretaryTreasurer. All were formerly with
Officers

Annett & Company

Arthur M.
Also

important development.

with

the

new

Limited

changed

was

Model, Roland, Sfone
Model, Roland &
Stone, 120 Broadway, New York
City, members of the New York
Stock Exchange.

Mason Brothers Add

(Special to

Annett
will

Krensky & Co., Inc.

associated

TORONTO, Canada:— Effective
April 1 the firm name of Gardiner,
Annett

E. A. Henderson With
E. Allen Henderson has become
associated with

New Firm Name Will Be

formed

with offices in the

335

Company.

continue

Bay Street.

The

Financial

firm

located

OAKLAND, Calif.
Calder is
ers,

now

Chronicle)

—

George R.

with Mason Broth¬

Central Bank Building.

market

tral
:

This announcement is not

whole investment process.

our

securiThey
vital and important part of

ties may be bought and sold.

.are

where

place

ojjer oj securities Jor sale

or a

solicitation oj an ojjer to buy securities.

wide regulations
of investment processes were ush-'
ered in to protect against frauds
in

1930's,

the

sale

the

securities

April 3, 1957

and

the public from crooked
who were preying on1

protect

914,078 Shares

promoters

gullible investors.
To protect

enacted

stat¬

of Federal

brought the securities

and the

markets

;

the public, Congress

series

utes which

field of

invest¬

under comprehensive

ments

ernment

One

regulation.

gov¬

Common Stock

the

for which the Securities;
and Exchange
Act of 1934 was
passed is stated in the preamble

purposes

that Act—"to insure the main-,

of fair

and

Pursuant

tenance

kets."

honest

that

mar¬

Act, the

Securities and Exchange Commis¬
sion

created which has power
almost
all ~ securities
ex-

was

over

S changes,

with power to protect
wide variety of manip¬
ulative operations such as pools,
wash sales, matched *. orders and;
boiler shops.
/
'
against

the

1920's

the

Par Value $1 per

forth below and

the

rate

spectus. United States Foil
Metals

one

share for each 11 shares held',

alias

Company and Reynolds Corporation, who

Company will receive rights to subscribe for

have advised the

aggregate of 463,212

fully set forth In the pro-

stockholders of Reynold*

shares of Common Stock,

Company that it is their intention to exercise such rights. Such shares

underwritten. Common Stock

evidencing rights, expiring April 16, 1957, to subscribe for these shares,.at the price set

be offered by the underwriters

may

as set

are not

forth in the ^.prospectus.

Subscription Price for Reynolds Metals Company Common Stock

unscrupulous*

promoters were selling phony oil

gold mine stocks.
In the
1950's, the unscrupulous promoters

and

have added

Reynolds Metals Company has issued to holders of its outstanding Common Stock transferable
warrants

$42

per

phony uranium mines.

Teeth of 1934 Act
The

teeth.

Securities Act of

Criminal penalties of fines

imprisonment

and

746,270 Shares

has

1934

specified

are

for violation of tlie Act. The Com¬

mission,

may seek
restrains violators.

injunctions
The

Act

United States Foil

pro¬

Company

vides for damage suits by indivi¬

duals, and the Commission may
suspend or revoke the registra¬
tion of

security

or an

Class B Common Stock
Non

exchange.
»

It' is
violate
curities

criminal

offense

Commission.

the

officer

chief
the

law
U.

in this area, I am

particularly in¬
terested in protecting the investor
and enforcing the Securities Acts.
1934

From

Stock transferable warrants

were

securities

outstanding Class A and Class B Common

evidencing rights, expiring April 16, 1957, to subscribe for these shares at

the price set forth below and at the rate of one

share for each 7 shares held, all

in the prospectus.

as a

receive

the

Reynolds Corporation, who

rights to subscribe for

as more

fully set forth

stockholder of United States Foil Company wilT

aggregate of 45,196 shares of Class B

Common Stock, has advised

Company that it is its intention to exercise such rights. Such shares
Common Stock may

30, 1956,
indicted in

2,283 defendants

be offered by the underwriters

set

not underwritten.

are

forth in the prospectus.

frauds

in United States District Courts in
543

United States Foil Company has issued to holders of its

June

connection with

per

the provisions of the Se¬
Acts or the rules of the

enforcement

Voting—Par Value $1

Subscription Price for United States Foil Company Class B Common Stock

developed by the Com¬
mission.
In 1956, 201 cases were
referred by the Commission to the
Department of Justice.
cases

per

Special Securities Unit

would

$28

•

make

nouncement at this time

an¬

which

may be obtained from such oj the undersigned
the underwriters named in the prospectuses) as may
jjer these securities under applicable securities laws.

Copies oj the applicable prospectus

believe is of considerable import¬
ance.
In order to work as close¬

{who

are

among

legally

ly as possible with Sinclair Arm¬
strong, Chief of the SEC and his
staff in New York headed by Paul

Windels, Jr., I
cial

creating

Securities'Unit in

similar to the Narcotics Unit.

Securities Unit will enable
process

spe¬

office

Thi|
us

expeditiously violations of

the Securities Acts.
At the
in

present moment, I have
possession the results of

preliminary investigations, made
by the Securities and Exchange
Commission in New York, into

alleged boiler room activities of
various brokerage firms.
There
are indications that daily victims
are persuaded to bet their-money
on

Reynolds & Co., Inc.

Dillon, Read & Co. Inc.

worthless stocks because

they

believe

they are acting on substan¬
tial and proper advice. The pho¬
nies who, over the telephone and

through the mails, attempt to vic¬
timize, and do victimize, the in-vesting public are again going a

BIyth&Co.,lnc. Eastman Dillon, Union Securities & Co. Goldman, Sachs & Co.
Harriman

Ripley & Co.

Incorporared

Lehman Brothers

•

...

Merrill Lynch, Pierce, Fenner & Beane

Stone & Webster Securities

Lazard Freres & Co.

Kidder, Peabody & Co.

Corporation

■

Smith, Barney & Co.
White, Weld & Co.

The Commercial and Financial Chronicle

Thursday, April 4, 1957

it, we cesses, all of which are generated
fears.* within ourselves. And, therefore,
fairly good, we have suffered from and delusions. The fears must be - before -wecan overcome
these
several more or less local diffi- replaced by faith in ourselves and
problems \ and restore -economic
culties, particularly in agriculture, the delusions must be wiped Out health, we must first regain our
and that these produced an. ap-^and replaced by truth and under- spiritualv* vision
and
vigor
and
parent and temporary balance. By standing.." -V '
;
then, with a sound spiritual basis
now, this balance has been over-. ; .Because inflation can counterto build on, undertake a vigorous
thrown and again in '56 and now '
prosperity and then destroy program of economic education or

J
.

HONORABLE WALLACE F. BENNETT*

United States Senator from Utah

•

as a

freedom."

The spiritual problems that we
face are not new or ..different*.,

parity to reinfect itself
is prevented.

these

gather

men

discuss economic prob¬
lems, inflation holds the spotlight.
And so it is today, with an array
to

painful in some parts of the body

for *

■

of trained and

not

immediate

"^rJJ^L^^nl^rfh:^:-overy'-litde

sumer

econ¬

would

they
was

and
analysis of,
"cause and
more

Wallace

philosophical

than scientific.

helps

Bennett

//v'//-'

tion when I think of it

■

eco¬

nomic disease, and in this light—
looked

through

the

eyes

layman—it seems to exhibit many
such
striking
characteristics.
"When inflation sets in, our econ¬
omy can truly be said to run a
temperature. Its actions lack vigor
and stability. Men who are caught
in

its

find

web

their

and

controls

vision dis¬

disease

the

build

hit

us.
if-we, set
the date this latest

one

1941,
began,

now

lacing

alert

keep

run

its

sets in, it often has

course

and has the

normal healthy
balance.
Our
temperature held
nearly level and we thought we
out of the

some

credit for this recovery! to a

ca-

California

March

28,

Meeting,

oan

°ur next,need is for increased

even

s e ns e_of ■

conf

woods.:

heritage pi the past and the hope

power

,a?j

■

h'rr'n

1932

■:

and for

normal

year now

the

agencies

now,

and^
then,

regain

idea

that

good

are

that

and

complaining that
than

the

Federal

Re¬

worse

the

Board has made

serve

far

too

our

tight.

Looking

money

back,

limiting
never

This
Ours is a
econ01hy-..■* Losses
eorne and when

fhsf
bur,true'

the very '

have

can

\yithout

down

government nar+iruHrlv

protect

cannot Extinguish

adjust-- cerned .about justice and equity.,
can. be m so many of our attempts to con-

profit and loss, trol the economic distortions by
are bound . to law, we have distorted .equity, set
they do, they . up shelters and special privileges

-"hist be made up. No.'mgn-madc for some and added extra burdehk
on •earth can change" this7to others.. But no matter: how
'fundamental truth and in oupeco- hard wg try to avoid it, when ive
'> nomic ^pattern
if we" block of I' substitute inflation for production
Fears and Delusions
/every other place where losses and prosperity, the ultimate bur¬
in many ways, we are in the may come to rest,they will evenden always/falls on those least
position of one who has becortie tually come out of the general able .to assume it—the pensioner,,
dependent on a narcotic. When store of values—our money—auc( the widows, and on the little peo-

health.

need

believe

the

can

sequences,>'we

temperature has risen steadily and
treatment

v/e

ma^r. P0£tP°ne or. deflect: its

•

fundamental truth that to be well

r«a.iv»oeo,

1957.

easv

infection has flared up again. Our

many

de-

themT We •mitst recognize?that,
this disease for 15 vears
It h'as of U^e'
io^uding-economic life, frexihility and.adjustment, ale in7.
become a more-or-Iess accented Tllis- delusion takes,:-some pueet -disiiensable to life, thaf-balance. is.
part ^f our Hfe
Durfn7^bifi:fo,!ms;r
®w"tanow.
h<-^m°
h3f.<Ptfiealth but that, rigidity is- death
time
we
have come
to
aepentr ?bJli"-in e'e o n o m t c mechanisms, to progress arid to freedom. And,
more
and
more1
Oil" outside
Cdn.
prevent adjustments most of*aU, -we need to be con-,

task

short-lived,

was

than

by-

-f supplyand

re-educatior;f0r;^d^P^°^'SerV
livins
is
never5"
thdt government, by ,-passing
ohe;We haw bfen suffering from 'la^; ean take all .-the ;risks, pub

!\ ^

Omen?

period

who

tho snirit

r-Nsdme delusions to. be overcome :, maftd'is inevitable ahd - while

faith in ourselves and in
But this

our

ISthe

ffVtto

The problem of

monetary

use

/-/" ,' '//

■

■'•••>

...

today

1951,
the
Federal
Reserve
regained its independence
its

historical

prepared to admit

Board

disease
the National Industrial Conference Board's
>

being,

wisdom, to; live

change of treatment adopted when

and

for

+¥ future for,a

We gave

were

the

.Srd

tp- treat—any

be normal.
'

•

lJS

f^e^on Tree /markets,.par tic u^.

price for the shot that lift's*
now into a feeling of super

any.

i^too^ has lasted 15 ..strength, and J well

not

we are

still

them

return to apparent

controls,

legalistic

collapse. Instead, ^ mar.fturelv foe a. better tomorrow, \Vc trusteeship which will protect
be the year of the last Postwar
neecUto have that faith restored/wi"™
inflationary adjustments. and thus PaI. too lon„ we have been pre-~s ?ed^
When we-weaken .
give us a chance for some preflcCppied-with the. present, ,and:
vent.ve practices
While we, must
D
e
e
b
%
v
a
h
wilUng t0 sacrifice the better- than
the ancients .

when this war
ended, it looked like we had made
a
remarkable
recovery,
with a

which have narcotic effects. Once
case

and

plete

delusions, and easily become

serious

;

of its strength and

from dependence on mech-

fistic

reimposed. By

were

controls.

dependent on nostrums, many

us out

«nif

SfSpSStf

the war in Korea

came

torted, and are inclined to excesses
and

and

rampant and our
were
wasted

could

Then

Fvprv

this time the disease had lost some

to understand infla¬

than,

faster

faith to replace^ our fearS;"faitli

In ourselves strong enough;.to'set"

setback in

nroerpss

'-? The first; challenge is to find >

' exaggerate

that

one

values

up.

pause

healthv

and

removed,

were

violent and

are some

out
the

Dec. 7,

keep it dormant and when

economic

different,

the

compelling
accepted the drugs of con¬
controls,
thinking
they
cure inflation.
All they did

proach will be
necessarily

cure

wu-

lead '

system

with

been

with the be¬

came

as a necessary result of
War's other problems were

was

minimize the vitality rot.

•

always

war.

omist, my ap¬

its

unless it

accepted

as¬

of the
subject. Since

trained

our

have

.v.

authorities who pneumonia.
We
tend to. see a anc!
*a""* n\ sound
principles
this earlier bout great depression booming up be- Which, can guide our actions. Iii
with
disease, which beggn hind'each little^dlp,'
; a veryrreal -sense, we need .to rqwith the first world war-in 1917.
In a real sense, too many of
cover or refresh our faith in freewas
allowed to run unchecked* fear the'future;-We have accepted V^am itself,-which we- have, been
and finally brought on a * genera k the.inarcotic."addict's''?philosophy1 ??1 }°° Fe-a(*y. to abandon at the
collapse 15 years later, from which, that-we should live for the pres-> ,•
s- ; economic pressure. v Th Xs
we had not fully recovered >when*
ent-*only, and be willing' to pav hiqans an oyeri-increasing depend-

ginning of World War II, and like
so many other economic ills, was

pects

which

fection

present
vari¬
ous
important

iUeau
incurable.
If. it is,

ana

/There

view, infla¬
tion '57 is not hard to place. It is
a
lingering remnant of the in¬

competent
speakers to

technical

while,

in the fundamental values of

Hoping
against
nope
mat ineit
will not be another year l.ke l932?

From this point of

They

will.

you

and they always will. But to recognize their importance to eco-

point

Whenever

re-education, if

chronic

off

going

from J very* def inite

think

suffer

has

and

days

organized group or institution is held responsible for undertaking educational program outlined by Senator Bennett for
"this may be our best chance to break the old habit of infla¬
tion
and restore our economy to a healthy balance in
.

general
- been

our

1952

'57, we are suffering a relapsb
we
have almost come to fear
facing the same old questions .prosperity. We have had a depreswhat to do about it.. Shall we-sion psychosis sa long" that we
continue the same treatment rr*? mistrust even our own achievemonetary controls? It can Jbe very ments. We need to regain faith

lingering remnant
"v of a 15-year infection which, unlike 1929, does not presage
a
collapse and, thus provides an opportunity for preventive,
practice involving spiritual and economic education. Like a
v
narcotic, we are described as suffering from fears, which
requires faith, self-restraint and spiritual courage, and from
'delusions, which consists of belief that governmental laws can
remove risks and that our problems are economic ones.
Every
"inflation *57"

Utah Senator depicts

since

condition

to Economic Health
After Inflation 1957 Ceases

Moving

while

that

realize

(1582)

"
-7 ',7
v£.'■ '■A;'.

inflation.

that

;

with fixed incomes.: Or,

pie

Thjs, of course,

Christ said, ;'the least of these, my
old hope' of getting something for : brethren."; For their sakes, most
nothing. Said in another way, we of ail, we need-to keep our dollar

is'

sophisticated version of- the

sound.

thai-inflation

delusion

have .the

$4,800,000

necessarily"

wIf we can straighten out our
related.
Deflation is bad, we say, spiritual approach, there are still
'and always happens when infla-- many
practical > problems to.be
deflation

and

are

not

Denver and

Rio# Grande Western

i4 tion

Equipment Trust, Series V

■

•

but

$160,000 semi-annually November 1, 1947 to .May 1, 1972, inclusive

unconditionally as to payment of par value and dividends by
endorsement by The Denver and Rio Grande Western Railroad Company

in ..both
to
a
.of
ment between the equallv unhealsales and wages, regardless of the
thy areas of inflation and defla- consequences.
When we do this,
tion, which can be considered norinflation is bound to be one* o£
mal and healthy.. And we need These consequences.
/■;
further

yield 3.50#

3.75# according

maturity

realize

whenever,
/
exists, -

that

both evil,

should

move

to cor-

rect the effects of both

by correct-

one at hand.
If either is
left to correct itself, it will act like
a

pendulum

other.
Then

HALSEY, STUART & CO. INC.
R.

FREEMAN & COMPANY

SHEARSON, MAMMILL & CO.

PETERS, WRITER & CHRISTENSEN, INC.

E. POLLOCK & CO., INC.

the

into

fear deflation/
inflation if it

Faith tq

it does now.

In the fiela of economic education, every American needs to

tearn such truths as these again:
t

(1)

That

delusion

problem lies entirely in the field
of economics and can be solved by

SURLEE, YEATMAN, MOSLEY CO.

could

Economic

farther

from

weakness

spiritual weakness.
out

the. truth.
form of

can

arise

of fears of selfishness or

ex-

paid

(2)

That

new

without
a

n0£ fjjj

(3)
come

any
jure

it,

same

jobs
new

debt

savings are

the twin sides of the

coin.

cannot.be
investment

free country can come

only from savings.

this

that

interest

and interest earned

created

Replace Our Fears

McMASTER HUTCHINSON & CO.

INCORPORATED

March 28, 1957

you

swing

Mate ial Education

which in
& CO.

Another

BAXTER <&. COMPANY

and

wipe" out

threatens, as

W. PRESSPRICH

Itratoriai

either inflation or deflation

/ ing the

DICK & MERLE-SMITH

which is the felt need

and assume business and labor leadership
broader band of limited adjust-/drive
for ever-higher goals

to correct our concept

(Philadelphia Plan)

To be guaranteed

Priced

balance.

mutually self-correcting. We need;*
'

mature

may

are

se,

per

bad if thev reflect lack of

Equipment Trust Certificates

■

of a whole generation to wipe out.
And there are many practical
"be healthv if they are" compulsions to offset, chief among

and deflation,

flation

33/i%

Balance

true.

Railroad

This, then, assumes-■'ovefcomeand lessons to be taught,
is good. Neither is .We have the bad economic habis good. Both in- its and warped economic thinking

stops.

inflation

■-that

Inflation

can-

nee(j

That

increased

only

from

wages

increased

can

pro-

cost of living index is to in¬
one-of two evils.
If all do

will have inflation with

*Continued

page

Number 5626

Volume 185

The Commercial and Financial Chronicle

Geronomics

;

Enterprise Economist
on

brand

social

new

of financial serenity
/•'.

■

the

Don't bother to look
word up in a dictionary, bethere yet. But

$2,000
your

illness,

logical

scale

expense,

dently

word

Greek

"geron"

meaning
and

familiar

you

here

first,
was

Ira

Cobleigh

one

out of three,

case

relates

probJems and

Essen¬

position

nomic

has

scheme

'slighted, neglected,
shall

How

■

The

years?

either

the rgtired

$75

come.

$15,000 investment

person

•,

most

would receive

:*rff'

Mexico,

Florida

bills

and

number

the

age

pur¬

financing,

fur¬

taxes

and

Broad

The firm is

international orr

funds

and

the

has

over

1,000

United

States,

the

of Hawaii and in 15

heirs—all

these

Englewood in June,

topics

further

well be the

readings'—

Territory

foreign

Prior to the firm's

maintained

geronomics.

repre¬

serving in 46 states of

tries.

may

Street,

Englewood, N. J.

sentatives

inflation, the

save

all,

absence
for

need

1954,

offices1 at

coun¬

move

270

Park

Avenue, N. Y.

•.

$4,185,000

heating

steep hill, and have

of stairs to climb—a

3%%

Maryland Railway

any

Equipment Trust Certificates, Series U I

lot

progressively

(Philadelphia Plan)

'.4 rt

;

■■

tougher assignment for older peo¬
ple whose hearts may be getting a

been

living costs.

Western

little tired.

To be

mature

$279,000 annually May 1, 1958 to, 1972,;i«clusiye

guaranteed unconditionally as to payment of principal and dividends by endorsement
by \Y/estern Maryland Railway Company

'this

leisure

the

which in many companies has be-

dren

MATURITIES AND YIELDS
(accrued dividends

all groWn up

now

and away,,
virtually obligatory, and in the old folks rattle around in a
others in varying degrees optional, Seven or
eight room house; and
at 65. What, in a typical case, will,
their comfortable living needs are

be added)

come

^happen at that target date?
When
ture

has

what are the
financial requirements of his
years,

advanced

years?

between

back to

50%

and

70%

nice

social security

ments and such income

have from

bank

ment bonds

interest,

pay-

he may
govern-

3.80

Issuance and sale

of these Certificates are subject to authorization by the Interstate Commerce Commission.
Offering Circular may be obtained in any State in which this announcement is circulatedfrom only.
such of the undersigned and other dealers as may lawfully offer these securities in such State,

The
,.

a
concrete "block-

room

home

Florida

for $8,000.

acquired

1961-72

house in

room

might

This leaves

,'•••

',»■»*.

.•

'•

7,,;.,i .">'••*.>„
1

.«»

■*"<•

■

sizable investible surplus (assuming the old homest|iad to be free

other investments.

four

built

the income he had been receiving,
and this taking into account his

pension, and

A seven

condition, etc., and in its place,

some-

3.60

1959

3.70%

*1960

by a smaller
modern home, all on

Ohio may be sold for $25,000 or so,
depending on location, structure,

3.50%

served

floor.

one

new

retiring,

will usually be cut
where

better

put out to pas-- functional

by the company to which he
a
good part- of his

devoted

active

man

far

1958

and clear) and somewhere around

DICK

$15,000 after brokerage and taxes,
may be released to provide more

NEW

exalted retirement income.

MERLE-SMITH

-f

V'v' v.V;;

•>.

V-.

■■

■

•

■

HALSEY, STUART &

CO.

Inc.

FREEMAN &. COMPANY

WM. E. POLLOCK

CORPORATION

R. W. PRESSPRICH &, CO.

HANSEATIC

YORK

'■

•*

CO., INC.

Life

insurance, converted into

annuity,
tirement
The

further augment

may

Now

re¬

income.

it?

the

afford

oldster.

great

earning
;
;

can

since

his

big

are

over,

and

will

based

American

geronomic
dependable
cases,

us up

bad times

pke

•

•'

luxurious

tainly

require

supplementary

„

will

the

will

income.

income, and where
fund
come
from
to'

Jirnuirf*
acquire them?
t e
.
•

Since
income is
the
ce inco
st
e

goal, existing insurance may
be converted, in whole or in part,
main

into

annuity.

Many ordinary
•life contracts have annuity pro•visions written into them.
Fur-.
ther, many people, especially pro.

fessional

people,

-annuities

1 jncome scheduled
-

stated

ber

too

buy

earlier
to

deferred"

years,

with

offer to sell

or a

Solicitation of

offer

buy these securities.

'The offering is made only by the Prospectus,

$6,000,000

Peo.

at*

good and

population
a

should

major

New Orleans Public Service Inc.

an-

op¬

company

earner

and

payer

First MortgaRe
Dated

Bethlehem
«-

ncf

St«,

Klt+

"I?

,nH

hi
las

today
el.

increac;in^

some

Price 100.825% and accrued interest

gJ"

ca-

two

all"!
dividend

The

may be obtained in any State in which this announcement is circulatedfrom only such
of the undersigned and other dealers as may lawfully offer these securities in such State. *

Prospectus

three

retail

HALSEY, STUART &.

CO.

Inc.

^hen what about Chesapeake
an<*
^
rail paying $4
ob a 1^56 net of $8.28.' Don't see
anything very wrong in buying
this stock on a 6/2% yield?
In

prospect
;

April 1, 1987

yields

shown splendid

wronS in buying a gO°d
f

Due

April 1, 1957

» uVlTrhll nn!S
jncome today with

Bonds, 43^% Series due 1987

for dec-

AUCH INC LOSS,

PARKER &

COURTS & CO.

THEM ILWAUKEE COMPANY

REDPATH

MULLANEY, WELLS & COMPANY

trade

merchandising,
retirement age. Remem-* Allied Stores, the biggest in the'
that, at 65, the need for* business, at 43 yields 6.9.-Sound
commence

•

everv
every

ades, and it's better off today car
building, rather than owning Pullcars>
A 6.5% yield on Pullman today is not to be sneezed at.

cer-

this

create

scare

into "growth" lists, has been

What should those investments be
to

scare

American

solid

pension and social security
and
retirement

This announcement is not an

Pu,lman' which seldom finds its
way

to the first

gracious

should seek

well

increasing

depend-

phase — an adequate
income. _In many

that

common

medical
medical

a
a

erate in favor of

will supply but a meager subsistso

assorted

basis

often, seem pretty likely to*
keep on smoking. They smoke in/

ence,

the

^/^dd"able) inCOm€ f0r"
Wipch brings

some

Tobacco

Dje deSr)ite
pie,
despite

•

knowledge that he has

that

payer

confident

INCORPORATED

April 4, 1957.

7614, yielding 6.5% on a $5 dividend, is the sort of dependable

can't recoup losses; and second
the greatest serenity he can at¬
tain

,i'

common

their generous return.

risks

years

selected

equities

the

First,

SUPLEE, YEATMAN, MOSLEY CO.

to assure,

CO.

high yielding
that pay rather

ones

presented below

are

may

.,,

for

use

■

friend

Thus

beyond.

about-

sort

than plow net income.. So at the
risk of some controversy, there

great
yearning for
a
market
killing,
which enthralls so many of us in
our early
oi
middle years, is not
pass

lot

HUTCHINSON

the

—

variety, the

risks); and not latching on to
growth stocks that may quadruple
in a decade.
Let's face it, in a
retired

What

My vote goes for the com-?

stocks

mon

swift capital gain (with its attend-

our

talked

income.

Bonds, preferred,

stock?

^ant

decade

securities should

whole

point to note, howlever, is that, at this time of life,
the paramount need is for income
—not
a; beady-eyed
search for
>

we've

addition

McMASTER

SHEARSON, HAMMILL & CO.

Ware* 29, 195T.

GREGORY & SONS

IRA HAUPT & CO.

NEW YORK HANSEATIC CORPORATION

THOMAS & COMPANY*

it had

heavy clothing

down annual

cu't

an¬

ganization specializing in mutuaj

will and the setting

of trusts to

office

smooth the transfer of property to

point
•

main

This is quite
of grounds.

Finally, however, there's a basic
economic equation.
Usually, the
logical starting
owned home has served well to"
of retirement,.,
bring up a famUy. With the chilof

durability

month in supplementary in¬
•vV
C';'\

■

tq be shoveled or waded
through, are health hazards. Fur¬
ther, the family homestead may

ignored.

efficiently,

New York from

phases

building

mortgage

6.2%;

home

ther defenses against

making of

and

Other

years.

—smaller

the needs

serve

the removal of the firm's

nounces

And we have, of
touched
upon
just one
the economics of ad¬

vanced

average

altitude

snow

eco¬

approach

consideration

new

whole

For

JaI£i

clients

King Merritt & Company, Inc.

Morris and

mutual, funds—the

dividend

F°r many oldsters, cold climates,'

presently

our

New

First

can

the U. S., over 14
"million.
Their number, thanks to
•advances in medical science, is on
the increase, and, quite frankly,
'their

6Y%

/o'
the

4f4s

effort to

its

to sunnier climes—Ari¬

m0ve

logical

number,

3V£s;

return
on
these mature equities selected for

decide to sell

Southern California.

ad^ustments of pejwho

older

and

"sons

Central

home,

zona,

financial

the

and

corre-

semantic need.

vital

tially

!, ?,,
is

approaches might
favored—bonds such as

especially in *. more
northerly sections of the country,

it
coined by

spondent
fill

phase

roughly

and

your

>/l

Office Now in N. Y.

Other

Essex

evenly spread among these issues,

freauentlv another
another
irequently
of
investible
funds.
In

J'e Rc oretiring couple will
nomics."
eheard

well

chase,

their

selves.

„

|„

r>„$Un

King Merritt Main

income variety.

•

hire

yield

'Now

balances should be pruinvested to maximize in-

source

many

yields 5.8

course,

absolute

Many other high
yielding shares may suggest them¬

needful for

other unusual

word

member

■

ril#,

income.

quate

come.

between

Tnere's
ineies

the

man,

bank

common at 66

this

geronomics—an assured and ade¬

progressive

moving ahead

Its

f!t"

come,

old

now

depending

of living)

surgery,

combination
the

$10,000

and

it will be. For
it

a sum

(anywhere

fine

Obviously

solution to the primary problem of

seems

for larger dividends here in years

•

interest

Allied

and it is not unreasonable to look

Thus, except for
at

Belt is

company
areas.

the economics

—

age because you're already there!

isn't

cause

income specifications.

our

thrift has virtually vanished. You
don't need to save for your old:™

now-

geronomics.
this

has been added

new

lexicon,

power,

meet

■

science

in the Golden Years.
'

Something
to

managed with sustained

earnings

Link

;
Some notes

and well

IRA U. COBLEIGII

(1583)

ARNOLD &.

CRANE

The Commercial and Financial

<1584)

wealth

Role of Wage Fixing
In Creating InflatioB
7;/;/7/.,//

Focusing attention

the

source

and

cause

rather than effects

credit transaction

ment order or

with

of-

its

has

By ELIOT JANEWAY

been'

the

supply, whenever the

Janeway asserts April's bad news will turn out to he
another false alarm; and 1957 will-prove to be a banner year

deemed necessary to
of';full employ-

are

maintenance

77 ment and prosperity,
;

Describes

Other

r ;

Pressure

GrOujiS 7

Other pressure groups form: the
farmers who demand parity; min¬

ing

a govern¬

despite temporary business troubles.^: Maintains inventory sit¬
uation is exceptionally bealthy, with inventories at an unprec¬
edented low relative to consumption.; Predicts early stock
market rise in anticipation of a May business upturn.

money

of these

use

who

groups

demand

Looks

this

I want to give my

of all

definition*

phenomena

monetary

the

believe

inflation.

of
called

understanding

use

these

hyphe¬
nated
words,
"wage - infla-

maintenance of that dynamic balance depends the continued existence

current siege of tions or a calculated risk on conliquidation is heading gumption H levels.
Remember-rinto a climax—by the middle nowadays nobody but the public
the second quarter.
The siege has money. Business has run itself

the settlement

groups

"cost-infla"rredit-

strike.

inf

lation,"

destroy

inducing inflation.

the

ways

•,

tion

pressure

active in

strike

settle-

ment is clearly

The

con-

are

in-

set off the

...

: designation of
which

would

the

table

"pressure

table"),

That
liiai
table
iaoie
where
wnere force
iorce is
is used
used
raise

wages

merely

to
xo

of the

one

ernment purchase-order-that
money or a

is,

P°

—as

aaa to .tne money supply, ana pact

government check (or

such

onto

over

travel

other

items,
packaged

and

Given

the

public's

ability

and

"short

use"

items

on
on

inventories

—

^'ewatohmg

Wm. C. Mullendore

spending

mass

//strike settle- ..willingness to spend —whether
/"•ment, which consumer investment goods or

switches

;7"'>va$. the^Bteel.!

are

bringing pressure to bear
foregoing
paragraph
is
Eliot Janeway
ventory recesfusing.
Infla- pertinent to inflation because: in- "Ponthose! who have the power
*"
sion now aption's source flation is a process wherein and to inflate. But w pomt is that we : proaching its climax.
The stock
is not at the whereby access to the free market,
the wrong Tathole1. market at first reacted to the steel
"bargaining and the goods and services therein, m trying to stop inflation, when, strike settlement as if its only imtable
"■
a
is given, not by
(
bringing goods we are watching the effects rather pact were long-term inflation. But,
more
precise and services of value to the mar- than the source and the cause, more
recently, the market has
and
accurate ket but by bringing only a gov- The source and the cause are to been reacting to the other extreme
etc.,

tain the present high level of con-

sumption. When

""going to be in- goods; and the boom marches on.
flationary; but
7 ~
v 7
.
short-term, .it; Inventories Can't Be Kept Down

al¬
period of infla-;
groups

The

ment.

long-termjm- housing or. automobiles temporq77 paet^qf the rily'slows down; mass spending

groups representing
the Infirm,
the aged, and those suffering all
of the physical ills of mankind,;
people tend to form into pressure groups

that communism
would them
So
capitalism by forcing or

dieted

sum-

steel

of money; and so has governBut the public has and will
have all the money needed to sus-

out

tion°~ "price- is to destroy their free market and demand the use of these
i n f'l a t i o n," system. Lenin knew that and pre- powers
of Government to help
tinn "

last

mer's

—i.e., the free market or free
enterprise system. And the most
effective
and
quickest
way
to
the freedom of a

with

started

stock-'

.demand help for their •
particular branch, such as con-,
of the freedom oVexchange struction,/housing- and the. like;,

destroy

:;i5'

like the

piling of their product in order to
prices; other business

fiat...."

x /.

inventory

maintain
First

Mr.

including>.

powers,

add' to

power

the

but maintains "that the rise of wages is not inflation"
as rising prices.
Terms inflation as

"in

all

use

powers

Califomian utility head recommends '*•

unless inflation is defined

demand originating

which'

law

as
ordering and re¬
quiring that the Government must';

its

Mr. Mullendore decries the power
groups,

enacted

interpreted
<

of the "power to add to the money supply."
of labor, and other pressure

absolute curbing

money

of inflation, well known

increasing the

supply/. Thereafter, ^ther#;
V-.-; results such laws -as the-Employ-'
j.
ment Act of .1946, in which the
/ rCongress J. of
the 4 United * States -

By W. C. MULLENDORE*//
Southern California Edison Company,
Los Angeles, California
*

Chairman;

as a moans

ChronicleThursday,-April 4,-1957

the

settlement's only imits immediate recessionaftermath.
•
'

can't be kept down to the level
of 15 working days by the industries which need
At

production,

mass

the

moment, these industries
need cash. But they always need
volume at least

as badly; and the
public has the money to give it to
them.
But a 15-day inventory
level
simply
doesh't
supply

were

enough materials to support vot¬
checkl on a bank
1S that Power which must be.
ary
ume production. 7someone eises cnetKj on a Danx
.7 7.
d_r:t
,
rIirhpd a little
deposit which originated in an removed
not only curoed a little, 7 V<As a practical matter,
however,
«,
ti
rreation of credit
Pro- but absolutely curbed if we
are
nauonary creation 01 creaii. t-ro
infla tinn
;
r
; / •
'7* ' v
-v
.
.J 1
•
today's 20-day working level of
A year ago, .the major
Auction and sale of., goods or
P
*
automo-»inventories is about to be cut
7
•
tive and appliance users of sheet
services does not precede this de- Agrees ^ Curbing Labor's Power
through April and into May to a
steel
were
mand upon the market, and, when
carrying
inventories i5_day
working level. Because tlie
Now if the issue before us today
cftmwinp

; places
set

where

loose

the

mighty force
inflation is mani-

fested.

Defines

Monetary Inflation

Inflation in my
mv
xuuduoivin
crease

book
is an
an in
inDOOK, is

the supply of the media

demand

does

production

but

not

credit transaction
frnment

order

f™mdnt order>

arise

with

fiat

its

tndl
own

the

were

labor

gov-

that

or lial»

P— creates

out

originates

,s
de-

they

ves

mand. That is why we cannot
out-produce an inflation. To try
and through the misuse and abuse to do so is as foolish as trying to
of credit. Inflation always results outrun our shadow.
in
reducing
the
objective
ex-

the

M%
we'

inflation, and

can

//J////// totter^wage
ra«se*?

that

rafses

are

major sheet
sjow

steel

down

speed up
of

users

their

buying

their power,
fell, the manuiacturers every other material with their
I would agree, ^mbhes
didn t dare
But
the
issue: the mills. ^anc®J their ^orders on "buyjng 0f sheet steel, this new inOn the

should

of the

to more than 60 working
When1 spring sales and as-

days.

their

have

curbed!, certainly

"Should

have

mbor unions

cause

ply is brought about through the
perversion of the power of issue

equal

question.

unions

answer

oTthe

one

hi-'

contrary,

pressure

forced

strike

buy

inventories

the

insurance

point

equal to almost 90 working days
The
steel
rate
stayed
up
last
spring
and, therefore, business
sentiment stayed up, too. But the
ratio of inventories to
consurpp-

vent0ry

cutback will put back;,

'significant

supply

new

jnto the banks
«
Here's
a
second

April's

planned

of money

why

reason

retreat

15-

day WOrking level

of inventories
money
still
easier,

make

Discusses Wage Inflation
evitable' symptoms' "of inflatfi'A,
mscusses wage
o
inflation as a rause of-wa?e
(And> in ?ome parts of( the counNow about "wage-inflation." We rajses js an irresistible force: The ti°^,s+hot
always> a ^ry money has begun to ease visin dhe wrldf today is! the dollarshqrt-te.rm danger-signgl; and our
fmst ajft
agr^e ,wifft those _who Way, therefore, to cure the disease short-term bearishness last spring ibIy ev^ri before the' new inveriOnce the barriers against inflation P°int out that,
with the aid of Qf rising
tory cutbacks take effect.) In orr|sjng
cost"
cost,?
and
the
rising
are
removed, the pressure forces powers
and
with the aid
of prices which result front inflation
Su
°* accovint.
.
,
der
ge^ inventories down, steel
which are thus set free
Then, last September, when the and related
mount exemptions from laws which apply is to
remove
the cause of inflabuying by the big

change-value

the

monetary

unit, the most important of which

and

grow

strength,

usually

until

ffsllother citizens, the organiza-

they are out of control. It tions called labor unions exert an
is the old story of Pandora's Box. a11 but irresistible pressure for inThose who for one reason or an- .creases of wages. It is also mdisother—to

fense, to

finance

save

country

war

de-

the world, to rescue

from

depression,

^Pal
hence,

that

tjon and tQ take
,

the

inflate
Qf
as

inventories

tjon

risj

three-y ear steel labor contract was
signed, the pressure to accumulate

to_

are

oT^roduction "and evitably led to the conclusion that
01 cP01itant increase the PrinciPal cause of »si"g Prices
the co^tant increase are nsing CQsts. an(J Qne Qf t[]e

reversed.

was

Mean-

while, money conditions were
sharpening the pressure to cut inventoiies to
six

the bone.

In the last

months, accordingly, manufac-

turers or consumer durable

goods

are

loose,

lose

become
all

others

uations

The

control

their

them

victims

within

along

the

affected

human

with- Labor Standards Act, the Walshsit- Healy Act, the Wagner and Taft-

thereby.
behind

pressure

;

infla-

tion is human appetite and human
desire to gain access to the market where the good things of life

be had in abundance, if only
you
have
enough money.
The
undeniable fact that goods and
may

fhatlSfCoarnthee Stm o?

chanfe

It is further true that the Fair

and

leads to the popular and

This

idea

can

alized

by brilliant financial

even
as
as

it
it

bv
oy

was
was

clever and brilliant
18th

of
01

one
one

minds

the
tne

the

Century—old John Law who

1705

first

coined

the

phrase,

l+vf»*

wealth.

money

create

...

Our

system

economic

ex-

change system. Its basic and most
fundamental law
would

lces

receive

services

and
must

first

and

that those who

and

remove

from

the

goods

bring goods and
can

serv-

the dynamic

of the market be
maintained.

""717address

bal-

and^Ta^fagaiS?'tte'uL" ol
™

upon

the

by Mr. Mullendore before

the National industrial

Conference

Board

Meeting In San Francisco, March 28, 1957.

that

when

much power

working days to lessithan 30 work-

With Bennett-Gladstone

portions

"iiey

where

days.

Yarmak

is
®^er which7 t hfe te'n s^the
7
dynamic baS^nre
o,! ^ Lrfpf^T S, a,?st0ne "
dynamic balance of our society. I 8417

now

with

one

those

monstrous
never

power

most

.,ni

evil

which

and

nrevionslv with

having ^ all that

r gtin main_

with

tain that the rise of

wages

is not

inflation
of

agents

and

fir

was

rex

Staff

agen-

in the

The

Fewel

Spring

Jr.

Street,
Coast

now

Co.,

connected

453

members

South

been

cut

short term

still

burden

the

Stock Exchange.

With Jonathan & Co.
(Special to The Financial Chronicle)

LOS ANGELES, Calif.—Joseph
P. Geraldine is now with Jonathan

onto their suppiiers.

This has gone about as far as it
Tbe

can

mius

have

over-loaded

the

further,

using)

force

"fiash"

and

perhaps

reducibie
other

cusbion

industries

now; and it is about to fall
sharply—just as consumption rises
seasonally.
This can't last more

85%
of

mill

the

steel

20%

any

tions/however
rnonev

for

will

rate

against a
But the effect
steel

brief,

much

verv

The ir-

demand

cut

steel

products

eerious drop.

the

of capacity

to 80%.

even

level

steel

cut

ieast to

rate—at

/ight^eastor thaS

opera-

is to make

ensier

the

even

over-*

pres-

ent dl-astic cutback in inventories
wouid

bv itself

Conclusion

trend.

inventory-consumption ratio
automotive
appliance
steel

May buying js therefore going to

in-

have in-

business

the

(sheet

LOS ANGELES, Calif.— Harold

Evans,

low ratio of

low

(Special to The Financial Chronicle)

the

groups which soon disthat when the gold standard

governmental

Pacific

pressure
cover

Company,

nwn

Any major change in the inventory-consumption ratio
up or
down—is always instrumental in
causing a sharp and fast reversal

Fewel Adds

have been created and must

one

Previ0usiy with J. Logan & Co.

or irreparable damage
to our country and its free institutions will
result.
However,

are

should

be curbed

Labor'unions

MannmS

—

Beverly Boulevard.

who agree

hpnrtnv
+hat
ie
heartily
that thie
this is

Bennett-

"""

will

matter of fact, the

ventories to consumption
ventories

LOS ANGELES, Calif.—Saul N.

industries

warehouses; and their own
operations are probably ahead of
pacemakers in the automotive-ap- even tbe
present, rate of, sheet
pliance industries now have their. buying. The coming cut in Apriling

Never, at such
(Special to The Financial Chronicle)

abandoned, the increase of the
safeguarded money supply is in the hands of

And

It is also

^cira^

market

of equal value to the market,

Only thus
ance

true

labor unions have

minds
minas,

ration-

demonstrably

paid to

are

areas.

Hartley Acts and other Federal as they have at the present time,"
inventories chopped to 20 workas
*aws> which they can force the increase in
floor under wages and wages not only to keep up with, ing days. As if this were not lean
enough, a 15-day inventory level
^ -e m®n°P^y Pd}Ye^
labor but also to keep ahead of the in- is the target now; and April-May
If®W1? o! Norris- crease in prices. But that is a far buying schedules are being cut to
a
u? uG1
! different thing than the conclusion the bone to reach it.
^ exempt that the principal cause of inflaNever have inventories been so
a^dTestoa nro^tradP ' °n iS the increase in wa«eslow
relative
to
consumption.

into
be

which

60-90

idwsluas

St
wealth.

the wages

the people in those

the level of

down

Cld

approximately
haIf the normal expectation, based
on
present
activity
levels.
In
other
words> the big materials
consuming industries are trying
pass the inventory - carrying

have cut their inventories of basic

materials from

durable

consumer

Early May will
liquidation come to

see
a

inventory

climax and

then turn into

a buying scramble,
The contrast with last spring that

is building

up now for this spring
self-evident. Then, sheet steel
months; and it won't, and other ■ materials inventories
April's new drop in the inventory-, were building up as money was
consumption ratio forecasts a re- being tightened, and as consumer
turn
by industry to aggressive durable sales were falling.
But
materials buying well before the now, sheet steel and other mate-

than

few

of the second quarter.
~
Here's why. At today's level of
mass income and mass spending—

end

and

automatic, periodic wage
immediately suggests & Co., 6399 Wilshire Boulevard, increasesr—a 15-day working inthat political pressure can be used; He was formerly with Daniel D.; ventory float ceases to be a busi-i
in lieil Of Production of additional- Weston &
ness
Co.,- Inc.
judgment of money condi--

rials inventories

the bone
as

being cut to
is easing, and

are

money

automotive

sales

were
doing
Sheet steel and other mate-

well.

rials inventories will be
further

ther,

and

money
as

eases

consumer

cut

still

still furdurable

i&j

N.Kuihber' 3626 tV; The 'Comto&l^fand

sales .get better*,; As the

Cv,-/ ? .*

^inanaafchrOTiicte

cutbacks

Einzig

British

comments

credit

squeeze;

the checking and relaxing of the
attributes increase in advances to

tive

sales *

depend

ori

higher

signififcaht portion of
and" they're about
get it again.

their stimulus;
to

Add

final factor

tremely bullish

this,

ex¬

for

the

outlook

end of the second

As the
monetary authorities see the steel
rate drop 10 percentage, points in
quarter.

few weeks, they'll take fright—
especially
because < they
suffer
from "seasonitis" and, therefore,
a

wage concession to railway employees. might:
lead to tn inflationary purchasing power expansion. Would:
like to see banks practicing self-denial in dealing with credit
applications, since it is futile to maintain rates at a high

starts for a

'*'

,;v'"

level

LONDON,

Eng.

dver a

period of years.yHi..

(

v •.

sharp climatic inven¬

tory liquidation coming in April
to this spring's falling tax collec¬
tions; and it's apparent that the
recovery in the making for the
turn of the fiscal year will be a
sharp one.
' V
.

The Second Half in Perspective

the second

perspective,

mind

each

the

it's

half of

well

consideration

since

year

1945

1957

bear

that-

summer

—

increases have spurred
spending in the second half by
the public. This pattern will exert
wage

a'M.0U 11 tC.'Cl:

rjjropUv

far

IKa

—

everything that

today's economy,
down must

comes

again.

Everyone
in
giving
advice

the

business

business
is
warned again and again to con¬
centrate on being right about di¬
rection and not to speculate on
timing, too. But the businessman
must always speculate on timing.
For better or worse, his advisors
ought always to be willing to do
the

Hence this forecast

same.

climax

the business

Vances

a,4": higher fax on' petrpl orivthe de^.£52.9 ,:niib. marid.; for^hQw: ^nd,- secbiid'Thand

expansion

expansion of advances has been .belief that these measures, toproceeding now for the last four gether with the economic cbnsemonths. :
~
quences of the Suez crisis, might
The explanation put forward in
quarters, that the increase

some

advances

year has

since the turn of the

been due to the

neces-

bank advances will have been affected

May

upturn

Strengthening—as it often does-^
to

the

bad

business

pending

the

PARK,

r:ia. —White,

Weld & Co. have opened a branch
office in the New England Build¬

under

the

John R. Kable.

management
^
r

the

•

Collins is

with Marache, Dof-

now

formerly
'

Vice-

Inc.,

Pine Street^ New
ih their. Bank SMrviqe

.20

York City,

Department!:

;

flernyre & Co., 634 South Spring,
Street. ;

He ' was

Samuel

Kostman, Inc.

with

formerly

Franklin

Co.

and

'BOSTON,

Mass.—S.

Grace Di-:

laniah has joined the'staff of Kel-.-

' ler & Co., 31 State Street.

Y 1

en-

this it

not an

offering-of ihf.se shares for sale, or an offer to buy. or a solicitation of an offer to buy
'
any of such Shares. The offering is Made only by the prospectus.
,r;~
v
j

Vitro

able to lower the Bank

Corporation of America
Common Stock

rules by practicing self-denial in
d e.a * in S with applications for
credit, the government would be

£«»

178,646 Shares

(Far Value $.50 Per Share)

rate to

exces®|v«1y

tagh level of 5A. By nmvallbutthe most extreme orthodox quarhave come to realize the futlUty ?f maintaining interest rates

at such a high level over a period
uf years. Disinflation would be
practicable with the Bank rate at
3% or even below. And even a
Bank rate would be of no

Rights, evidenced by Subscription Warrants, to subscribe for these shares at
$16 per share have beeft issued bv the Coftipany to holders of its Common Stdck
of record April 2, 1957, which rights expire April 16, 1957, as more fully set tertk
in the'Prospectus.

agreed, subject to ccrtairt conditions, to purchaM
unsubscribed shares and, during and after the subscription period, may
:
offer shares of Common. Stock as set forth in the Prospectus.
'
;
" f

The several Underwriters have
any
•

t i.

if the wages spiral continues
to rise.
:

Jj.i-,

use

of the several under¬
in which such underwriters are qualified to act at
which the prospectus may legally be distributed.

Copies of the prospectus may be obtained from any
writers only in slates

Wage Increase Precedent
Fr0m

this point of view

conceiyaole that,

dealers in securities and in

recent

developments have been far from

would

lulled

bank

[everSed'

mistake, however,
a fee ing
of se^

into

c,,„u

cline

y,e

The ease with which
Transport Commission has

bank
nank

pay ;0
ways

increase

f'n.e"'"gr
and other

h'?d l.n Zr

months

clearing

ago,

have

Britain

statutory cash
ratio, but 30%
traditional

All
in

reduced
proper-

current

there

ratio or liquidity
is considered the

minimum
the

liquidity
leading banks are

the close vicinity
one

shade

under

banks

often

tnent

position

the
materially
liquidity ratios-the
of liquid
assets to

banks
their

with the

compared

voiced

against,

exhortation

of them is

it.

the

of that
even

past

their

the

resent-

Hence, the re¬

by the

shipbuilding i n d ust r i es. The
workers feel that if static indus*,rie?'x
as
Joubtediy are, can afford1 to giye

5%, dynamic-industries-should be
?bl?
affourd ta glve m.ore' In
facf> there has been no increase
lr? the productivity m the en6irieering industry during 1956,
an(f Me cost of living has mcrease*l by less than the 5% inc^ease offered. And profits are
distinctly lower,
Even

all-round

increase

Kidder, Pcabody & Co.

White, Weld & Co.

W. E. Hutton & Co.

government's ,5% -tr. for, which the Transport
they, should cut Commission.has set the fashionT-

credit.on the grour^d that, so long would mean an, inflationary ex-,
as
their liquidity 'ratics are well pansion of
purchasing power. In

Hemphill, Noyes & Co.

Francis I. duPont & Co.
F. S.

Bache & Co.

Schwabacher&Co.

Tucker, Anthony &R.L. Day

Baker, Weeks & Co.

Blunt Ellis & Simmons

Hill Richards & Co.

William R. Staats & Co.

Lester, Ryons & Co.

Auchincloss, Parker & Redpath

''''

Moore, Leonard & Lynch

Kay, Richards & Co.
Arthur L. Wright
1
r*\ * V. :•
*

Boettcher and Company

Stephenson, LeyJecker & Co.

Singer, Deane & Scribner
Butcher & Sherrerd

Goodbody & Co..

Bosworth, Sullivan & Company, Incf

Sutro & Co.

J. A. Hogle & Co.

Paine, Webber, Jackson & Curtis

Moseley & Co.

RevnoIds&Co.,Inc.

the

that

Union Securities & Co.

Smith, Barney & Co.

employers in the engineering and

Liquidity Ratios
As

Eastman Dillon,

unions to hold out for a

jection of the 5% offered

Blyth & Co., Inc.

employees of British Railhas
encouraged the en-

higher increase.

advances
advances.

& Co., Inc.

•

.• fr

.ts'

National

Bank of .New York^ has bec<»ne
associated with iymVvEiPjollqjd^ft i

'.:v LOS' ANGELES,-Calif.—Fred W.;

the» Bank irate, by a mere n%
could not have , contributed much

settlement of these just conceded

strikes, the rising trend

figure, and

White, Weld Branch

strike

tries, so that it is

now

ing

(Special to Thk Ftnanciai CiiRO;NictE)v -V *' Co.;

;

pneering and shipbuilding indus- promising.

ratio.

immediately ahead.

the

liabilities.

WINTER

Whh Marache Firm

Bloom,

Presideiit <bfv the? .Public

senate ^ deflationary depres??on'rt
, s^! t e rcc:,ucfl01' ot

sity of paying high taxes on high'-*?- the resumption of the expanpast profits out of lower current sfonary trend. Indeed, if only the
profits, is not convincing.
That banks could be persuaded to play
factor would have manifested it- the game
according to its new

expect the stock market to anti¬

response

*-■ • '< •

Wm. E. Polloek Co.
[ Jacob

conclusion that the
Th« government's decision: to
credit
squeeze
has
become reverse the disinflationary measchecked and even reversed.
The ures Was probably based on the

news

:piattr:v-;:;':

;

the

escape

tion

to which
Davis

"p.-*.*

Jacob Bloom Joins

Mr. Liebl has been an *acexecutive since joining^ the

agency in 1948; previous*
he was with Anderson,

flie

outlook beyond May is so bullish
for ut least the rest of the year,

the

i_-,%;

Co. Inc.

down¬

side in April, and a dramatic up¬
turn in May.
If only because the

cipate

count

self primarily in a sharp decline
in deposits, whereas in fact the
particularly powerful pressure;
decline of deposits has been unupon business buying later in
the; usudlly moderate.
year
because
the ratio
of
in-f
A
much more acceptable ex.
Ventories to consumption is falling j
to such ay low point now.
With planation is that higher - wages
and higher prices have increased
every increase in consumption and
in prices,
the physical level of credit requirements.. Moreover, in
inventories will have to be raised some industries, especially in the
another notch just to prevent the automobile
industry, there has
ratio' of inventories' 'to consump¬ been a noteworthy recovery in
the output.
tion from falling even further.
Much of this would
Ever since the boom began, the Only show its effect in the next
business
atmosphere
has
been << monthly banking figures, as in
soured by the old saying about several big motor works the full
how everything that goes up must working week was only restored
come down. The "flash" dip com¬
during, the second half of March.
ing is about to demonstrate the On the other hand, by that time

go up

in 1949 and prior thereto.
space tyiyer at Dbnahpe,.

joined it
was

reverse

Investment: Cen-'

ter. Mr. Globus Will"

But add the

see

ItertoBGMkm

Madison Avenue

niotor Mdustry .to other ind ustries
borrowing by iu bad need of manpower has thus
the privately-owned sector of the
become reversed:.' And pressure
Community from .the banks was iprcing the automobile
industry to
ditures rise. This last factor alone
something ;iike _£,70 ■ mi 11 1 o n. concentrate on
exports instead of
would- be enough tp cushion the
i
increase *. is relying on. the domestic ; market
siege of inventory liquidation and'
^
4 to long-term ex- has weakened.
■
ir-v
turn it into a gradual recovery.
port financing, it is impossible to

money

Robert M. Jenove- and Howard

over-

rriade easrer
^ and aH thls; while tax collec¬
tions fall anjd government expen¬

Jenove, Uebl V.-P.s

Of Albert Frank

specialize-in
Law, Inc.,-131 Cedar Street,
that; e v en
New York; City, advertising and the development of/hiergers and:
*
'Jrpe,::-h .sea-^ t^ougli ,liquitiit/; ratios are low,
acquisitions.
He
is
-a
director of
adivahepahfe- expanded. *;'' ^ public relations, it was announced
by Howard^W. Calkins, Chairman/ the v Seagrave
Corporation, -the
v
As far as the* automobile indus->
Mr. Jenovd; has; been media di-; Starrett Corporation and the BSF;. ;
*3r'SPS.'-.1® concerned,the government rector of the agency * since he Company. '
•; " ,1:/,'•
■' ' {

C S.1
hiptor vehicles. The re-"allacatioh'
liquidatcd,consumptionsustained, f f} ] Million by ^he national- of jiabor froni the over-expapded
iHdustnes during the nionth,
rising,

the banks 'take the' line of

'■} of. banks.: The "Treasury was thus
'^th e:liohd oil. blptned forth^;; inadequate ptog-" Liebl have been elected Viceof ; Albert Frank-Guen•^c^whg^aiiks^^hf the" ^credit. Squeeze.' But presidents
ther

Altogether,i, then,

wages

■>

least resistance,- the; expansion of
advances and. of deposits will con¬

statement

monetary authorities inter making ;■
money still easifervthan it - is^arboiit
to be mpeie automatically -by the
inventory liquidation itself.
* * :

be—inventories

®ros-, & Co.* as manager of thefirths~newbusiness department in it*

expansion.

solidate and accentuate the effect

Tfre-Jlbfeissbey it WaV: responsible tor'
^mi%4March the high, liquidity/ratios of the.

adays.i can

of1

credit ' industrial :

feel impelled to keep.down

evei;, •

Ymonrtfc 1

As Most peo-

absence

of expanded consumers' purchas¬
above the traditional minimum, it
is difficult for then! to refuse ap- ing pOwerI-^vYi\.id"; --r: y.,plications for new ctedits. And
the government was sharply critidur- cized on the ground that, because

The

—

relaXed

pie (ineluding>;the .press) are^nOw;
aw?re>,. tbe monetary authorities v
are now more
conijjse4, than cpsV
tomCrs-,mea ;int -brokers^ offices,
about ^whether
itfS. inflation- or,
deflation; theylre fighting. • The•
news abbut 5 tp :be made :by
tbe s
approaching climax of inventory^
liquidation 4s certain to panjc" the

the:.business
situation building .up for lale May
and-'June is as >bullish* as any'
shbrt term busihess:situatiqhno\y-

bank

Morton Globus has joined Sutro

thef only'.meanS for;*
maintaining their prof its. If, lioW- :

Y ihg;. thepa$t of the expansion pf/the Treasury

expect, the steel i-ate to. go upor*
stay up in April instead of turn--

ing down - sharply.

the

to" prevent
a
further
of the inflationary spiral.-

their costs as

credit
squeeze "that has been, operating
in Britain now for something like
two years has become distinctly,

may

mission's

building*

and higher prices; and .fears Transport Com¬

wages

order

progress

Sntro Bros. & Co.

conventional and unconventional'

By PAUL EINZIGr

;Dr.

»i,

■v'

face, of .such; an increase it would' -'
be necessary to kpply anjbVerdoser 5
of
disinflationary devices, both

in inyentorying ^Tid'i ib st^el pro-» >
duetioir put 1 Money-back : into the.'

banks, cash will flow back to the >
speculative, builders; and residen¬
tial building will start up again by
itself'r— just when political help
froA "Washington is giying it an
extta lift. Appliance and automo¬

(ises)

pressing

Aluminum Industry Trends

contrasted
of

Analysis and Market Planning Dept.
Aluminum & Chemical Sales, Inc.

Kaiser

United

demand

rates of

measure

through

tire

—■

industry., On the
hand, the research and de¬
velopment programs of companies

quantify or
growth of alumi¬

upon
customers' ex¬
ploitation of these basic properties

organized

markets.

provided

industry's outlook and the gamut of aluminum s
industries in general are recounted by Mr.
The aluminum analyst expects shipments during

this country

estimated

try

Of course,

possible task

there is another side

oped.
close

the

growing

and

new

the

area

There

op-

about

future,

primary

ing awareness 'of operating, for all
practical purposes, in a permanent

Vomestic alld international
V

Forecast

■*

ple

Concerning the immediate fu-

pounds

at near capathroughout the year,

record first quarter,

traced in aluminum, as research and de-

declining trend in each succeed- velopment activity in our industry
ing quarter of the year. As a re- is vigorous. New applications for
nult, the available supply of metal aluminum are coming into being
for commercial use was steadily from
previous research, while

issue

vear.

enhanced

further

and

Despite the declining trend in
'aluminum shipments during the
/ast

three

calendar

quarters

the total

1956,

the

was

year

This

above 1955.

historical

roughly 10%

that

importance
*

relatively am¬
aluminum
users

giving

large

scale

research

increasing

iihead,

decline

from

crease

1955

the

years

that

aluminum

increased

had

States indicate

clustry,

assuming that wars
.The transportation

are

the other hand, is

ex¬

pected tor grow

possibly

1956

not

are

I960

the

con-

country

the trend in

year,

fhe residential sector,

downward

the

important
durable goods,

Similarly

consider

area

sales also turned
downward; first in the automobile
industry and later in

other cate-

gories.

Thus,

face

these

unfavorable

rival

ATLANTA,

gain

the

trends

an
underlying growth of
applications which more than

offset
.

declines

some

alumi-

num's principal markets. We feel
that this underlying strength in
demand supports the forecast that
the aluminum industry will continue to grow.
The
effect
±ne eitect

on
on

marketing artivitv
marketing
activity

of the increasingly favorable supr»lv

pij

situation

industry
As
As

wMtft'imnrmra
was to improve

sitnnimn

1he
ine

tcmers

+L
the

s service to its customers,

vpar
yeai

nrnarps^d

progiessed,

procurement

,...c

the

cus-

time

consump-

States was rising about 65%
m

shapes

and

castings,

con-

;

maintenance which
many

Australia and South America the

prefer

have.,caused

extrusions-

aluminum: win-

abroad

supply-demand

situation

The

vigorous

growth

free

the
j

chances

iu Lndllces oi vigoi ous

•

„

the usage of aluminum

world

worm

auite

anoear

appear quite

good, and it must be remembered

re-

Confidence in the growth of the

industry
•An

the

aHHi-nc.

New

National
!4arch

has

Castle,

further
**

relatively
Korean
with

less

War

our own

Many ol
tries with

a<?a> .°I

stimulated
than

was

the

become

mn'-'d; universal

product

between 1955 and

the

case

the

free

The

the

change, on April 1. He will be
in.charge of ine municipal bond
department.
;
.

COMING
EVENTS
(
'

;

electrical

conductivity

dollar

per

have only begun to be
in many parts of the

eVery

industry,

feel

10 years

industry

will

future

which

and

grow

rapidly

years.

many

course,

coun-

of Can-

consume

for

aluminum

nortation

container

field

A<?

vou

polTatl°" container field.AS you
know,

these

transportation

the

free

world

turers

furniture

and

have

ers

already

conversions

istics of

foil, both

container

package, design
the

as an

WTirc

and

Hilton

Statler

Security Traders Association of
New York 21st annual dinner at

the Waldorf Astoria.

(Richmond. Va.)

May 6-7, 1957

It is

Association

Stock

Exchange

Firms Board of Governors meet*

ing at Jefferson Hotel.

ideal lowMay 8-11, 1957

soeetacular

food

ahead.

annual

April 26, 1957 (New York City)

sizable

medium

their

vears

the

Investment

manufactur¬

made

and

(Dallas, Tex.)

Hotel.

continue to exploit tve character¬
cost

Field

Association

meeting at

manufac¬

this product.

Group

Bankers

also felt that food processors will

products

(White

Sulphur

Springs, Va.)

nro-

Investment Bankers Association

Spring meeting at the Green¬

cabl®

brier

produof<? fo»*
will, of

Hotel.

electrical; applications
course,

the

as
ues

con^

make'very important gains
electrical

May 17,

know,

the

niwh0'

(Baltimore, Md.)

1957

Baltimore Security Traders As¬

contin¬

sociation

to a1umioum.

convert

you

industry

22nd

annual

spring out¬

ing at the Country Cluo of Mary¬

land.

tainers facilitate the movement of

fi"mS nroducing basic alumin"m
t
™ movement ot mill
shapes has grown dramati¬
over freight breaking points.
without the necessity of unloading
cally in recent years. These films

goods
aiH

reload ine

The

DioDertv

,wlSf remits

aluminum

it to he rast inin-

tricate form with little

Stored
making
al fncrea" n4v 00^^^
s

ma-

customers

the

course,

the

primary producer.

i+v

the

integrated

their

the

adaptability in meeting the n^ds

fieM

acteristics,. as well as its* light
weight
and
high
strength.- are

large

customers

area.

part

within

From these

users

1957

(Los

Angeles,

Palm

Springs

Springs, Calif.

Biltmore,
.

May 19-23, 1957 (Cleveland, Ohio)

regional

National
ment

Convention

of Invest¬

Analysts Societies.

and fab->

June

cooperate have eo'^e deof new 'nroducts and

11-14,.1957

-Investment Dealers'

•velooments

highway petroleum* transport' dAchmoues of marketing that have
stimulated the growth of the-en¬
' "
-

field.

the

Palm

unioue

regional markets

in which aluminum

ricators

produ^^r has b°en

due

17-19,

Calif.)

Security Traders Association of
Los Angeles annual spring party

Their abilsuc'*essfuUy with

cownete

May

toe

Aluminum's non-sparking char-

the

are,

produce even making it increasingly popular in

April 21-23, 1957

Producers

irrigation systems

fnote

Investment

Texas

kler

Aluminum's properties of higher
electrical

basic
of

Pendergrast

partner in Courts & Co.,'
11 Marietta Street, N. W., mem¬
bers of-the New York' Stock Ex¬

automotWe

world

exception

Association,' today. The possibility of demands

1957.

general

consid¬

1960—a

Thos.

and

property of aluminum which perIt is expected that the more eco¬
mits its permanent coloring: of
gold and other hues gives it addi- nomical process of producing aTutional usefulness to product,plan-, rhinum tubing bv the continuous
ners and designers—a usefulness welding method will result in new
which has not yet been fully ex-, markets for this product. Sprin¬

the

country.

the

PennsyivTniT,^chapter! al"mini'™ than

Purchasing Agents'

20,

stimulated

desired.

that the historical growth which
for aluminum mill shapes took place there in the last five
declined appreciably.
Orders for years
was
occurring
in
many
practically all types of alumium countries whose economies were

products can now be placed in
production within a few weeks
ufter they are received.

r!ancep
anything like the
These same properties of lightP,
°i increase 111 Pe c°n" ness in weight and high strength
"P
aluminum in these which have made it popular in
fiee woild countries would of the transportation field promise
course leatI J0 a change in. the to make it popular in the transcurrent
{

— .Thomas
J.
admitted as a

Wa* ev^n mof^ which historically doubles is sales
P
Whether or not such growth
rates WH. cp.on ,inife al)roaa *s>,,
c0U.rSe» diliicult to say; but the

Ga.

was

rapidly and

very
even

Growth

sumP«j>n in free Europe was invested
"lor^ taan doubling; and in Asia, exploited

quired

agree.

in-;

The same reasons of lasting for extruded products to continue
beauty, low cost and freedom from,; to grow very rapidly as aluminum

ttan of aluminum in the United [plotted.

reflects
new

wholeheartedly

Possible insufficiency of supply is {lie finish

1950 to 1955, when the

Although total

activity

rising last

together-

industry, then

products to utilize greater quanti-,.
ties of aluminum It.is true■■ that ■ cations may increase the most rantechnology sets the hmtts Withi* idly-of-all of our growth markets,
which one metal or material can but it is no! expected that electri¬
replace another, and ;if is* equally - cal "applications will become more
true that all metals in general- important than' eit her building or
share in the advance of technol-,: transportation during the next 10
years.f;f:v
•■;
ogy. However, we believe. alumi
/;•'•:
''D
num. will be favored increasingly .:
Among the various aluminum
mill shapes we expect the demand
m the luture.
/
V ; .

by -making- aluminum more popular
annual in automobile || trim applications

.steadily

was

would

our

building
industry as aluminum's most im¬
portant market. Electrical appli¬

expansion

which is the
leading market for aluminum, was

ntruction

forward

move

Pendergrast

lie

today will make ;dows, .storm windows and other;' building industry. As-'ineritibned
of new applica- glass* framing will continue the earlier, potentials in this field as
tions feasible in the future.
usage of aluminum to an even yet unconverted from other ma¬
In assessing the future prospects greater, extent in these same ap-/. terials are very large.
for the demand and supply of I plications. Aluminum windows to- [*< Die castings in the transporta¬
aluminum, it is necessary to dis- »day perhaps make up no more tion field are expected to show a
tinguish between the market in 'than 25 to 30 /<? of the total mate- very rapid rate of increase. The
the United States and the free rial consumer in this market.
- American
Die
Casting Institute

Pointed up in these plans by the
fact that consumption oi primary
aluminum doubled in the free
world outside our country from
1950 to 1955. In the period from

hard to find.

In Courts & Co.

in-relative

metal in..- averted,

„our

countrv will be

steadily

sufficient to i*$ise
erably faster rate of growth than
33% over the previous year. The consumption
to a point about will continue to encourage its use that being experienced bv the alu¬
reasons for the lower
rate of in- 50% above the level in 1955.
A in all fields where lustrous metal- ; minum inHustiy as a whole.

.shipments

imply

Pendergrasf Partner

world market. Statements of ex- ;
The same qualities of pleasing has predicted that the amount o''
isting and planned capacity in the [appearance, low cost:-and resist-/ aluminum used in their industry•
But it must free world outside of the United a nee to corrosion which are now Will doi 'dc in the five-year period

per year.

is true.

meant

characteristic of

rate of

average

remembered

now

rate is considerably short

growth
of

the

for

nevertheless 3%

imply that markets and supply*

can

government's decision to activity going on
stockpile calls during the a greater volume

the

will

ca-

operated

increased

expect aluminum ship- engaged in product research addipacity to their ments to rise by 5 to 10% during tional
impetus to design" their
annual

that this

sure

without the historical dislocations

might expect, there will

one

not

are

maturity

ing market for aluminum.. Direct
defense applications for the metal

the next few

over

„

and development. The stream of
new products and processes that
In contrast to rising supplies, how- result from this research provide
ever,
shipments
to
consumers, new opportunities for investment
a

who

industry

economic fabric of the country, we;
do agree; and if maturity is meant

work

aluminum

leveling off in the growth curve,
do not agree; if maturity is
meant to imply that the industry
is now firmly established in the

belief that

our

those among us

the

dustry to continue to be the lead¬
■

Preference for

the. supply -of

years

' this

produced 7% more 1957■
'
'
primary metal than in 1955/ With
It has been estimated that as
the
exception of strike-induced much as *6 ; billion per year is
Josses in the third quarter, facili- being spent for industrial research

after

forecasting

It is

10-year period.
As

e e p

Aluminum

•i The fact that

and

levels

~
Increasing

buyers' market.

lion

were

four

coming to maturity in this decade.
If

these long-range forecasts will be
revised upward several times in

have

planning and k
evidence each day of its increase aluminum in ample supply.

about 3.13 mil-

nitv

consider that

The aluminum industry is giving expansion

pro-.

ties

only

During the
year domestic

are

speak

new

phasis on service to the customer 0ur forecasts to keep abreast of be some
shifting in the relative
which increasingly will tend. to. aluminum consumption in order importance of our various mar¬
the mark the industry's sales policies, that we may, in turn, revise our, kets. We expect the
building in¬

industry's

SiH-nc., idi)

are

125 such
the' United States

trends

timism

facilities

Aluminum

their

periodically.

markets to the fullest extent. The a continuing responsibility to our
analysis, natural result has been an em-, customers to improve and revise

confirm

the

continue

Upon

d n t inue

the expansion on the part oi es- jn order that plants may be built
tablished firms fabricating alumi- and aluminum supplied to meet
num. as each has attempted to these
demands.
We
in
Kaiser
participate

There

years.

excess

•

devel-

today, compared with
prior to World War II.

■

trends

recent

companies

to
this story — a much brighter products and processes which have
side, we think. It is entirely nor¬ not yet been conceived, but which
will be important factors in the
mal and,* in fact, desirable that
market by that time. Accordingly,
aluminum should be in adequate
all
long-range forecasts tend to lie
supply at all times. The purpose
The aluminum industry in" 1956 the entrance of new firms in in- 0f an long-range aluminum lore-: understated, and it is our plan to
completed another record year of creasing numbers and has spurred casts is to estimate future demand have our Market Research group

production and shipments, but it
was also a year in which some
conflicting

probably

industry will supply
6.9
billion pounds in 1960, with demand ranging
from
6 to 6.6 billion pounds, and 8.4 billion pounds by 1965; and
anticipates a 50% increase in capacity in the Free World over
the 1956 level by 1960. Though the industry is increasingly
aware of
operating in a permanent buyers' market, the author
foresees its production will be favored increasingly in the future

opportunities in all

has, of course, been the most spec¬
tacular growth story in our indus¬

5% to 10%, after increasing 3% in 1956 over

national scale have

on a

new

The growth among pro¬
of
aluminum
extrusions

ducers

by the

1955; refers to estimates indicating the

aluminum

other

based

num

in
the
total supply

years

The

attempt

aluminum
in
their
product
has planning and product design, the
aluminum Market Research group of Kaiser
and
magnesium Division of the Aluminum undertook an extensive
Department of Commerce to at- survey recently. On the basis of
tain a level of 6.9 billion pounds
this survey we expect the demand
by 1960. This is to be compared for aluminum will more than dou¬
with a range of industry market ble over a
period of the next dec¬
forecasts ranging from 6 billion ade to a level of about 8.4 billion
to 6.6 billion pounds, during .that... pounds
by 1965. It is interesting to
note that a forecaster has an im¬
; year.

1957 to rise

States.

aluminum

The aluminum

Sheneman.

1965 Forecast

the best estimates

and

several

been

usefulness

with

supply

the

Manager of Business

The Commercial and Financial Chronicle^. Thursday,' April 4, 1957'

available

the

against

supply from time to time is to be

SHENEMAN *

By K. L.

y-'

(1586)

:
-

Association,

of Canada Convention at Jasper
Park

Lodee.

Alberta: Canada.

Volume

185

5626

Number

•.

The Commercial and Financial Chronicle

(1587)

likely

The Textile Industry in 1957
;

than

spending, but that in
justifies' undue growth.

110

industry in 1957, are
recounted by American Viscose Vice Chairman who sees more
stable prices ahead than in 1956, and avers that the industry
"is and will remain one /of America's major industries."?
Though the current situation in Washington makes it difficult
to forecast future sales, Mr. Dalton declares the-general price
structure is reasonably sound, looks to budget-reduction as
the better way to reduce inflationary pressures, and describes
our
'.various
defenses ; against
depressions,u including the
."optimism of John Q. Public."
^

The

current

Washington

makes

plan

difficult

forecast

The

future.

sales

situa¬

for

succession

baked goods being the largest use
followed
by meats, candy and
gum,

popcorn,

and

underwriting
of
the optimism 'of
John Q, Public, which carried us

finds

which has given entirely satisfac¬

these, assurances:

favor

safely, through important "rolling

adjustments", of
the
past- few
as in auto and textile pvoductiohhand'-homo. building. That
1957.

tbur/ strongest
believe

essentially
the

sound

the

for

hope

economy

and

that

flurry of uncertainty

once

caused

in.

normal

conscious

likely

and

of contra¬

continued

estimates

tion

use

rayon

defies

our rec¬

ollection

parallel.

The

President

re-

;e a t e d 1 y
warns
of
in¬
p

construc¬

plications

call

least

for

one

units, underwriting con¬
tinued strong demand for house¬
hold textiles. Here, too, the back¬
log of 48 million existing house¬
hold units provides a tremendous
replacement market.

submittingb u.d gef

could

the;

con-'

tributing

fac¬

tor; while Sec¬

hiarry

Treasury

Humphrey

of
hair
curling
depressions. T h e
President \ warns
of
wage., and
Ex-President Hoover warn
-

controls,, while Commerce
Secretary
Weeks
declares * that
there is not the remotest sign of
an impending "bust" and
no pos¬
sibility
of such controls under
presently ' foreseeable
circum¬
stances.
Businessmen
might be
excused for feeling juSt a bit con¬
fused as to whether to agree with
the President or with his cabinet.
price

tions.

of the opinion that the best

inflation¬

place to begin reducing

would be the $72
billion budget submitted by the
President, which is the chief ob¬
stacle to long-awaited" tax' cuts.
pressures

Expenditures from tax revenue do
not reduce private spending by a
full

dollar, since some tax pay¬
ments
merely replace consumer

Heavy

savings.

government

ex¬

penditures,-therefore, are likely
to
increase, rather than relieve

All of. us
must
share the responsibility if
Federal spending is to be
stemmed, budgets balanced, taxesreduced, and if Uncle Sam is to be
discouraged
from
reaching
his
hand * progressively
into
our
pockets and into the area of state
inflationary

pressures.

and local obligations.
the

country

farm

attempt

to * improve

price levels, the larger gain
area is neither surprising

that

alarming.

nor

fullv
President's
immi¬

inflation

that

natural result would
have been abnormally heavy buy¬
the

nent,

ing to hedge as far as possible
against rising prices. Instead, the
opposite has been true. The un¬
certainties

caused

have

created

The Business and Defense Serv¬
Administration

ice

view

own

'confirm'

Commerce

and

our-

Secre¬

statement

that "the
economy
is healthy, business is
good, and the outlook also is good."
Weeks'

tary

conclude that

not

only is. the
price structure reasonably sound,
but
there
appears
to be ample
productive
capacity
to V assure
continued
price stability.
BDSA
represents the Commodity Organ¬

We
the

should, of

observe

hand*- the

first

supply-demand Relationship ip all
major industries and trades. ...For
virtually all consumer goods, ca¬

all watch

course,

signals

inflation,

the

not

other

hand, we should
panicky without looking

get

the facts.

immediate
inflation

Actually

evidence

either

retail

price trends, which
test.

are

index shows retail

prices

rently 3% above

year ago.

increase

indeed,
age

yearly

period
was

An
group

one

year

compared

gain

1945-52.

of
The

noticeable

with

rise

mainly

the

are cur¬

That

modest

the

price

consumer

dangerous

wholesale

final

The

find

aver¬

for
in

the
1956

because

With

address

railroad

Mr,

Dalton

before

executives, Sprir.gflc-id,
5,
1957.

March

■

Edmond L Brown Will
Carofhers &

Company;

it is

but

of America's

one

With
in every
employees engaged by
manufacturing
in
the
United
Together

apparel, it employs

one

of all

seven

States.

tremendous

Its*

underwrite

scope

stant

market

for

size

and

vast and con¬

materials

and

volume

and

Prospects

Boys' Wear and
Drygoo

rices than

Avisco
evidence

own

are

'challenge

durable goods.

tailers

proportionately?
durable

Other

bility

ice

car

the

chain

industry

substantial

tremendous

President of their firm,

ing in natural resource
Mr. Brown was formerly
of

Garrett

essential to self-serv¬

responsible

largely

I astounding

growth

respect

rather than

specific forms

increase

stores..

thaa

eight

years',

crease

paias

the entire range of textile us¬

the

President's

much

labor

not

warning

-anything,,
to

John R
John

sociated

Co.,

Inc.,

York

Carroll has become

with

JohnR.

Broad

Street,

its

billion

in thaUrnarket. The steadily
increasing registration of: motor
vehicles
(now over 65 million)

the

1957

and

years

packaging industry
into a $12

business.
75 %

domestic

cello¬

phane is used for food packaging,

Opens Office

This announcement is neither

SAN

;

FRANCISCO,
M.

Leland

securities business from offices
the

Russ

merly

Building.

grave

time

for

cause

that

offer to buy these securities.
.

100,000 Shares

concern

than

score

& Howell

Depression

absolute

Siaces has

"built

in"

(Par Value $10 per Share)

guarantee

since

defenses

curling"

and

the

collapse

Humphrey

include

Standards

1929

against

type

Hoover

These

Company

Common Stock

Defenses Against

Labor

solicitation of

by the Prospectus.

Productivity

evidenced in prices.

There

nor a

the

Act

Price $40 per

.Fair

the

and

Social Security Act, which under¬
take

assure

earning
active

labor

rate

country's

our

force

modest income for

retired

high

for

power

provide

unemployed

consumers.

Other

assur¬

Copies ol the Prospectus are
dealers

relate to marketing of com¬

ances

modities
tection

and
of

securities

and

investments,

may

obtainable from the undersigned and such other

lawfully offer these securities in the respective States.

pro¬

the

the
Commission,

Agricultural Adjustment Act,
Securities
and

Federal

There

are

influences
all

Exchange

Deposit

Insurance.

also indirect stabilizing

such

the

fact

expenditures to¬
in S5 of total
spending against a latio
of .less
than S.l in. $10 .in 1929.;
Government
spending
is
less
day

Harriman

government
are

about $1

Ripley & Co.

Incorporated

that

April 3, 1957.

was

for¬

partner in Kaiser & Co.

New Issue

in 1956 but there appears to be no
this

offer to sell

Calif.—

Kaiser is conducting a

seemed to lag somewhat

advances

(Special to The Financial Chronicle)

has grown

age

About

Kaiser

past

de¬

wage

warranted

gains.

New

'City.,

that

was,

as¬

Boland &

warning to

press

productivity

feel

who

officer

has

production

The offer is made only

some

are

John J. Carroll Wilii

and demand will in¬

The

whole

Its

doubled

further

beyond.

output which will pick

general supply.
There

Vice-

and Company.

steel

specializ¬
securities,

supermarkets, also to variety and

in 1957 in¬
clude the auto trade's expectation
a

are

which

for

consumer

favorable influences for

textile

the

Expanding

protection
against
or
soiling.
These

and

features

will do better

goods.

been

deterioration

General re¬

than

stable

1956.

Market

has

improved

Brown

ing, have announced that Edmond

packaging
films to provide commodity visi¬

forecasting.* that. soft

are

goods sales in 1957

are

L. Brown has been elected

demand for transparent

for

sumer

1957

Cellophane
There

better
promotion and merchandising to
meet the j competition from con¬
the

cepted

for

total.

the

by the likelihood of

Retail
our

ratio

and

Edinond

DALLAS, Texas — Carothers &
Co., Inc., Mercantile Bank Build-,,

supply, which has been debated
publicly, anv shortages are said to

national

Pennsylvania,

laminates,

fancy
place
kinds of decora¬

corners,
many

pacity amply covers likely nearby
demand. .'

recall.

which eventually lead to deflation,
on

remain

industries.

major

promotion
American Insti¬

ntegrityProgram

"hair
Moderate

Increases

danger

and will

manufacture)

,pf the textile in¬

dustry in slack periods,

that cutters and retailers have ac¬

seiiger

Messrs.
Price

inclined to discount

seem

the whole future

apparel

the

National

Commerce, and is, therefore, able

number

obscures

ization of the U. S. Department of

time

somewhat

tute of Men's and

against depression, but the United

being,

The

programs

Agspciation

hesitance, which we believe will
lie temporary, but which for the
the outlook for 1957.

higher.

the

Satisfies Demand

Supply

mands farther than

been

had
the ;

convinced

warnings

Giant

the

plastic

rose

deliberate

Federal Budget Inflation Threat

ary

Some

Industry

producers

am.

Textile

fiber

glass

mounting

the?

retary

quantities,

thatj

largest

mats, and

to buy are tops.
in wholesale
steady
flow
of
merchandise
4% over the past
through America's retail stores to
Apparel Demand Begins Well
year
on
nonfarm products, and
•satisfy basic needs of 170 million
7% on farm products.. Textiles, I
Department store sales continue people for apparel and housenoid
believe, were only V2 of 1%. The to1 record week-by-week improve¬ textiles.
/
index for" all products is! still ,be- ments over last
year and sales of
For yarns and fibers alone the
low the high points established in
apparel, which provides the major
textile
industry provided a 6V2
1950-1951
and again the rate of market- for'
rayon
and
acetate,
billion
pound
market
in
1956.
advance of \xk% in 1956 is mod¬
again have moved out in front.
Cotton
continues
as
the
major
est, compared with the average January sales of retail apparel
supplier,
but
man-made
fibers
yearly
gain
of 9%
during
the stores4 were
12%
above
1956,
show long range advances both in
period 1945-52. "In? view of the whereas all retailing averaged 7%

sold

while

flation

residential

1957

million

sections
of : the
country.
has. experienced in
the
entire most
period for which data are avail¬ These are expected in a range, of
able, beginning in 1913 and in¬ industries as chemicals, which in¬
cluding the years
of war-time cludes rayon* acetate and cello¬
price controls!
;>
v
~ J
' phane,- also in apparel, construcaircraft,
and
machinery.
The wholesale price index, which tioil;
Consumer income and willingness
reflects the price of commodities

fortnight

past

25%

years,

femaips

price

and
and

remaining

markets in the packaging
tobacco,
textiles,
toys
and
hardware, and drugs, pharmaceu¬
tory periormance.
ticals and cosmetics. Cellophane
Federal Housing Administration is also finding nonpackaging ap¬

valuable

ecohomy

our

potato chips
fresh
fruits

The

vegetables.

the

for

dictions in the

heavy demand for re¬
tire, s,
constituting

roughly 60%

tion

bbt

placement

chewing

Beyond

Washington has subsided,, the
expectations for 1957 Will
proceed with little delay. Employ¬
from
1953
through 1955 'we en¬ ment-not-only continues at a high
joyed
the
most prolonged
and level, but a Department of Labor
job
gains
are
pronounced
period of cpnsumer survey '• shows
price stability that our country anticipated in the early spring in

means

the

most

j I

drastically

stress

of the total market
for
passenger
tires.
In this re¬
placement market, the consumer

way

By HARRY L. DALTON*

Factors favorably influencing the textile

and

economic

private

Vice Chairman of the Board, American Viscose Corporation

;

be curtailed

under"

Lazard Freres & Co.

The Commercial and Financial

Chronicle

Thursday, April 4j 1957

(1588)

WALLACE

management generally was

sharp contrast to the pes¬
rampant in Wall

better tone

pretty

definite

Trading Turrets

in¬

opera¬

tions later this year are

1957 results will

chance that

lower

where

dustry

STREETE

the steel

Even in

Street.

much taken

Stocks showed

Goldman, Sachs, Installs Telephone

simism

THE MARKET... AND YOU
By

ex¬

pectation, there is a general

fWm

this week with the industrials

continue the trend. Columbia

satisfaction

air

outlook.

the

over

For

thing,
breaking out of their two- Broadcasting issues were
month trading range on the prominent at
new
highs in some of the heavy accelerated
upside to end a rather long large part due to the fact that amortization* charges are to*
the good earnings gain of last start disappearing this year
stalemate.
year is being projected nearly with M rebound in earnings
The leaders were assorted a dollar
•
'
•
higher to 1957 re¬ assured. •
if.
if
#?:■
V'*
metals, including L u k e n s sults of around $3. The com¬ V;.,;
Bethlehem Steel, which has.
Steely;, which
I'.-the
pany recently shed, its re-:
that led all the rest in its 1956 ceiver
manufacturing activity;: been hampered a bit in recent
performance, a gain of a eliminating this drain on years by the overhead of its
shade more than 300%. It
earnings. It is among the is¬ shipbuilding: division, now
was a repeater on the list of
sues
that are considered finds its ship division thriv¬
new
highs and in the process likely candidates for some ing. And a high level of' oper¬
worked to a 'price more than dividend
ations is
improvement.
cejjtain not only/for
1957

50% above the low recorded

this

Some

earlier this year.
*

the

stocks

store

building up a good fol¬
lowing, at least among mar¬
ket students, in the light of

some

re¬

ports for last year, were also

The

turnabout

market

drums for

rather

period

heartened

Street.

The

fact

protracted
a

bleak
all

that

uncertainties

failed

spur

taken

was

base for

dol¬

the

recent
to

the

after

lain

had

Eastern

report

makes

the

had

selling
hope that the
more

good spring upturn

had been formed.
Motors Still
Auto

Undistinguished

the ladder of major

that have been

u n

guished and show

form and the fact that

Put

t i

year's peak has been

$40 lately.
way the stock

around

another

that sold at
now

25-times-earnings
down to around

back

others

been

prominent in the vicinity of
their 1957 lows.
*

stores.

Interesting Oil Issue
In

the oils where

dle East

less

unrest

Any

ment

this year

even

did in all of

1956 when

ings

$2.26 mostly be¬ where

the

cause

earn¬

models

new

won

good customer acceptance in
the final
mates

months.

the Mid¬

still

was

not

without

esti¬

share.

much

the

conservative

were

somewhat

pected

case

year's

rebound

this

earnings
depressed and

officially
The

year.

ex¬
com¬

The

stock

since

could

volatile

than

large auto¬

there

are

less

million shares out¬

standing

against

nearly
and a whop¬

ping 280 million for General
Motors.
New Growth

and, in fact, is

tant

factor

outranked

Situations

hunting

where

Another

General

in the red ink column. The

company not
be solidly in
year

but

only expects to
the

hopes
as

black

tries

its

and the

the

New

this

something of
on

crest

the part

the

offices

new

over

Broad

the week-end.

Street,

The

new

trading desk, first of its kind and size installed anywhere, consists
of 16 turrets each handling 120 direct circuits independent of the
firm's main

switchboard, or a total of 1,920 private lines. Unlike
of conventional trading desks which take up
most of the surface area, the vertical turrets provide a sizable
working space for each trader. In addition, a trader can now dial,
into any circuit on another trader's turret to take part in the
transaction.
The same procedure is possible for Mr. Levy in an
the

flat keyboards

adjoining office, permitting
trading of securities.

greater

speed

and

flexibility in the

as¬

Yes, That and More!
"We

Nor

ests

start

living

and

means

for

within
to

their
like¬

"The

strength of

our

coun¬

try depends on far more than
forces

armed

alone.

Diversifiers

sound national

upon

omy

and

solvent

Government!"
Join

nations

wise.

company.

Rubbers

for

ours

nor

permanently de¬
pendent upon American finan¬
cial grants. It is time for them

the

political image.

abroad to be

of its business holds the most

followers

"It is neither in their inter¬

subcontracting parts for air¬
craft. The Federal highway
program
will benefit Houdaille's business of furnishing
crushed stone, gravel and
concrete. In fact, this portion
for

buy international friendship any
personal friendship can be purchased.
should we attempt to remake the world in our

economic

construction materials and in

allure

cannot

than

com¬

—

rests

econ¬

Federal

Senator

Sen. W. F. Knowland

Wil¬

liam F. Knowland.

Even Firestone Tire which
is

It is

importantly to new
production is in position

broaden its field

becomes

ment

ernments—started

consider¬

standard

must live.

The system of using
cushion of air, rather than

new cars.
a

or coil metal
springs, has
already been introduced and
expectations are that it will
be adopted widely
in next
year's models. The rubber
companies, like other auto
suppliers, have turned to
chemicals, aircraft and elec¬

certainly time we—all of

us including gov¬
living within our means. There
are a
number of foreign peoples who easily could
and would do well to begin at once to enlarge the
means
writhin which they should and ultimately

tied

car

leaf

lessen

the

their

new

car

business. Their replacement
market, too, is about in posi¬
tion

achieve

impor¬
the heavy auto

since

new

output since 1955 is now due

The flood of annual
reports

facilities

unusual

York, to which the firm moved

this

pretty

was

resume

well.

optimism

L. Levy (left), partner in charge of the trading
arbitrage departments of Goldman, Sachs & Co., supervises
test-run of the new telephone-turret trading desk which is one

pletely dependent on the auto
trade. Today the firm's auto
bumper work is supplemented
by its activity in supplying

Stimulating Annual Reports

there

Gustave

and

once

boom-bust

overcome

once

tance

&%0&

cycli- 1
cal defect, is that of supplying
auto parts. Houdaille Indus¬

reached

better-than-even

"feast

its

industry

for

noted

Avco

earnings have been
growing steadily and where

only

business

was

being done for the companies

this

impor¬

Electric

dividends
Considerable

famine" nature.

and
Westinghouse.
tronic lines
similarly ran into rough
12 sailing last year and wound dependence

than nine

million for Ford

ment

'^M.w

ably if the air spring develop¬

!jt

Allis-Chalmers
last

point up

quarter re¬ pany has a large
backlog of
neighborhood of heavy electrical power equip¬

those of the other

this

mar¬

first

put

sults

makers

Some

for

noted

year's earn¬
further improve¬

ings.

guaranteed to do better in the
appraisal.
first quarter this year than it
came to

stability of a high order, par¬
ticularly in an industry once

than 10-times last

up¬

strides to

ket reflection would

Chrysler

single large consumer
be feared, make for

opening two

have

has

uses

pect, which has been making

score new

earnings. Its profit
probably
hold steady
despite the added expenses of

signs yet
entirely cleared up, Pure Oil
of changing their ways. The
is one that has had a sizable
disappointment was that correction from last
year's
there wasn't any sudden pick¬
peak. In fact, some estimates
up in sales as is traditional of its oil and
gas reserves at
when
spring arrives. Even conservative
pricing come to
Chrysler, which admittedly is double the
present market
going to show excellent re¬ price of the issue. The com¬
sults for at least the first pany's earnings have been in
quarter, has had a rather a
steady uptrend in recent
mundane, market life al¬
years which is expected to
though it has been hovering continue this
year. The stock
close to its year's high while
lately has been selling at less
the

set in

15-times

will

groups

d i

last

well

still

are

varied

hovering

>5;

stainless

for, the

and the stocks have retreated

"bargain" levels. Food Fair

yr,.

IHP*

' ~

Steel

annual

its

Stainless

heavy consumer

Stores which sold around $62

year®* but for about th<?
;v,"

pertinent point about the
in the van as prices of the
buying. In some cases the de¬ stainless metal. No single in¬
metal showed firming tenden¬ flation
from
their
1956-57 dustry is a major consumer
cies in the domestic market.
peaks has been close to drastic in this field. The many and
continued

next three.

were

which turned
excellent earnings

Coppers,

one

need
[ The

article
time

replacement tires.
views

not

coincide

"Chronicle"
as

those

expressed
necessarily
with

They

those
are

this
the

presented

o/ the author only.]

plant

Public offering of 100,000 shares

Bell

stock

Howell

Co.

price of $40

common

per

made

yesterday April 3) by
underwriting syndicate jointly

was

managed

Harriman

Ripley &

Co., Inc., and Lazard Freres & Co.
Net

the

proceeds from the sale of
shares, together with
a private sale

common

funds received from
of

of 25-year
4%%
subordinated
notes,
convertible
into common stock, will be added
$4,000,000

to the cash funds of the company
and

at any
of

Offered at $40

will be available for general

Part of the
proceeds from the financings will
be used to repay short-term bank

corporate

purposes.

line

microfilm

produces

microfilm

equipment,
and

Howell

Co..

with

its

other

types of film, and photograph and

precision

optical

equipment

for

the government.
For the year

Co.

and

solidated

and

1956, Bell & Howell

its subsidiaries
net

sales

consolidated

net

mon

share.

had

con¬

$45,579,000
income

$2,191,000, equal to $3.84

loans.
Bell

offices
and
principal
Chicago, 111., pioneered
in the development of motion pic¬
ture equipment and currently is
believed to be the largest manu¬
facturer of such equipment in the
world. The company manufactures
an
extensive line of high quality,
precision-made motion picture
cameras, projector equipment and
sound
and
picture reproduction
equipment. It also manufactures
executive

Bell & Howell Stock

per com¬

Volume

185

Number 5626

The Commercial end Financial Chronicle

...

(1589)

Business Welfare Concepts
For the
it of All Men

more,

inflation

will

not

Recipient

the

Henry Ford II

Ninth

Annual

comments

Rerum

tions.
of

Novarum

Award,

self-regulating

interests

the

great
social welfare burden

eternal

destiny,

the

primary

responsibility of the businessman
is,

keep his

vent.

take
and

both

State

American

brash

have

morally

large,

helped

these

our

spread

far, although

in¬

have

taken

deed to ignore

attempt
the

evade

sometimes

cost

undermined

his

system.
to

free

our

They

enterprise

definitely here

are

stay.

sions.
In

accepting

the

Rerum

Karl Marx's Predictions

This is

Award, I should like to

Novarum

what I believe
modern-day significance
of those powerful injunctions is¬
sued more than two generations
ago.
The times and the circum¬
stances
have
changed.
But the
comment briefly on

to be the

principles of Rerum Novarum are
still valid and pertinent today as
a whole new set
that are political as

grapple with

problems

well

economic and social.

Progress Since
would

We
that

all

I'm

number

sure,

the

By almost any standard
has

America

hausted the

have

The evidence

slums.
and

than

And

1890.

dreams of

this

ex¬

the

ism,

system that I prefer to call

the

incentive-for-everybody

capital¬

called

system

sys¬

men were

their

machine

city

long

condemnations

and

its

they
were short in
technological vision.
What they failed to see, of
course,
was the
great potential of the ma¬
chine for

use,

relieving

men of drudg¬
putting within his
many things that were for¬

for

and

merly too expensive

completely

unavailable.

Significantly,
has

not

social progress
the expense of

our

come

lems.

past

out

points to

and

these

and

words

Pius

Pope

into the

all

our

we can

and

that

immediate,

that

the

who

been

earning

seeks

only to look at other
there

that

alize
social

can

unless

progress

real

can

paid for. In those countries where
social gain has been placed ahead
of individual
incentive and the

private

right

For

prefers

sive human drives'to

structive

purposes,

presume

lives and

destinies of

play

have

discovered

that

ex¬

tremely difficult to get their econ¬
moving.
Other systems—

omies

and I have seen

number of them

Europe—have

while
alive to

social

failed

has

incentive

because,

kept

been

large degree4 the burden
has

welfare

been

too

great for the economy to support.
Fortunately, the balance we
have
struck
in
this country is

reached

our

Americans

freedom

hour's

power of

wage

elsewhere in

people

The purchasing
erage

and

security, wealth
that possessed

than

other

any

example, of the $106.6-billion

*An
John

The

the world.

Mr.

Ford,
by

the

Catholic

labor-manacem^nt
was

City,

Relations

was

Award

Novarum
ice

1956

average

production

turing

workers

represents

nearly 50%

This

caf?'

of.

makes it

time share
must

the

time

Company.

In Tucker,

and at the

Graham B.

March

same

wealth with others.

let that

progress

The

men.

Conn.

—

of the

bers

Lupinacci is now affiliated with
Hegeman & Company, 300 Main
Street.

Chairman

New York

Blaine, who

association

Stock

will

with

During that
porate

Joins Sheffield Staff

of the

the

taxes

gain

take

over

into

LONDON,

Conn.

—

thony J. Magro is

now

with

Company,

White, Weld Adds

Sheffield

State

An¬

NEW

HAVEN, Conn.

connected

325

Street.!

„T,

& Co., 74 Elm Street.

buy

any

of these securities.

April 2, 1957

241,020 Shares

cor¬

(which

Common Stock

the 1947 level. If you
the billions of

dollars plowed back into
and

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

new

equipment, the rate of
investment

actually

(Par Value $1.00

share)

per

plant

return

declined

during the 10-year period.

Price $23.50 Per

Fair Shares

unequaled
We have

Committee.

presentation
to
Ninth Annual Rerum

for

distinguished

layman

in
relations.

what
of

they regard

the

itself

national

fair share

income

the

serv¬

field

The

award

College,

Jersey

spur

not

bad

Copies' of (he Prospectus may be obtained in any State in which this announcement
is circulated from only such of the underwriters, including the undersigned, as may
legally offer these securities in compliance with the securities laws of such State.

to the economy, inducing Us
more and to produce

produce

efficiently

have

greater

that

total

income

can

share.
But where one group claims a
disproportionate share of this in¬
come,

there

down

the

danger of slowing
and halting
expansion.
An
attempt
by either labor or capital to grab
economy

further

the total

increase

productivity,

NEW YORK

■

SAN

FRANCISCO,

Reyiiolds & Co., Inc.
PHILADELPHIA

CHICAGO

—

Robert
„r

G. Lee is now with White, Weld

The

account

Savings

(Sp&cftil to The Financial Chronicle)

NEW

the

nearly doubled between 1.947 and
1956, incidentally) showed almost

Director

Dollar

■v
period,

same

profits after

City of New York.

manufac¬

increase

continue

Chase Man¬

member of the bank's

advisory board, is

trustee

(Special to The Financial Chronicle)
"

Ex¬

of Burlington Industries, Inc. and

Bank

not

is neither

Bank, has
general part-

change.

trust

Nicholas

Manhattan

hattan

(Special to Thk Financial Chronicle)

STAMFORD,

Vice

of April 1, in the firm o£
Tucker, Anthony & R. L. Day, 120
Broadway, New York City, mem¬
ner,

his

Hegeman Adds

Anthony

Blaine, who retired

admitted

been

Chase

Mr.

con¬

men.

G. B. Blaine Partner

social

yTea^_ ^.f

in Amer¬

This is the modern-day message
read in Rerum Novarum.

the

with Julien Collins &

history,

edge for the benefit of all
I

„

needs

halted, but as a matter of Christian
charity, must use our new knowl-

aggres¬

progress,

our

not

mankind.

possible for

ica to have

V..

communities.
to

with

announcement

1947.

over

the

by St. Peter's
March 24, 195T.

given

want

over

history.

by Mr. Ford, read by Mr.
Connors, Jr., Chairman of the

Community

occassion

and

limit

first

the

•

Street it was announced by John
G' Whlte> resident partner at Chi-

figures, the
hourly earnings of

our av¬

address
F.

Mr. Sundell has been in the
independence,^investment business on La Salle
freedom from Street for 30 years« For the past

they

ands does

God

believe

broadly

some

thing.
In general,
these conflicting pressures act as

adopted widespread measures for

firm's

things

good

Roy b. Sundell

world,
grimly
of life,

given them
and

inheritors
the

The competition
happy one. The
between em¬
system already have ployees, owners and customers for

proving., to be
fruits of

the

over

unleashed
by the dynamic incentive system,

geared

shgpe

harness

in
in¬

rewards

tion ov«r 1955 and a rise of
$38.7 billion in compensation
1947.
In percentage

they

property,

wants of

World, to manipulate history. The
other

own

the

restlessly, '
better way

us,

schools

great

view

our

increasingly large
of industry.

the

relatively national income
originating in
capitalism of the past has manufacturing in 1956, $83.2 bil¬
given way to a consumer-domi¬ lion (or 78%) was distributed in
nated. self-regulating system that
compensation to employees. This
broadly serves the interests of the figure represents an increase of
great mass of our people.
$5.4 billion in employee compensa¬
have

technological

long-term social
gains will come from letting in¬
dustry respond freely to the nat¬
ural interplay of economic drives
—subject, of course, to the prin¬
ciples
of
social
justice
and
Christian charity.m, '
One

For

View

short-range

All

the

those

and

progress

with

also

are

for

and

complex
industrial

better

understand¬

should

but

and

opinion, the real issue
is between those who hold

business

Chicago office ot
& Co., 39 South La Salle

innovation,

with

only

are

There

today

and

searching for

and

forward

Long-Range

in¬

security, more
more leisure, more
drudgery, more and better homes

muster.

vs.

who

life.

One of

system

our

economic

country,

people

We shall have need of

wisdom

Short-

Leo

move

and

man

continue

of this earth.

them.

Pope

newer

the

ing

well-being of millions of
underprivileged people in other

management

should

„as

creased

has undoubtedly had a significant
the

and

lands

other allied areas,
Novarum

bearing.

not

—

social

influence of Rerum

heed

CHICAGO, 111.—Roy B. Sundell

Over the past decade, labor has

Xhe primitive and

think

the

face each other, but each is
facing itself first.
In

not

Finally, we are concerned to¬
day — and very properly so, I

still

the

Roy B. Sundell Joins
Reynolds & Co.

examining
all means

never-ending search for
way of doing things.

years

should

from

away

hallmarks

this

gone

Labor

experimentation

unstable

systems and other methods to re¬

the

"label-thinking"

process,

sides

wages.

progress

under

men

disease-ridden

While these

loud

the

growing
sense
of
labor-management re¬
sponsibility toward mutual prob¬

the

can

prosperity and security,
dividuals and as a nation.

sophistication,

bitterness
to

problems

monotony

record

and fearlessly
which, consistent with social;
morality, will enhance our future

was

of his con¬
in it only a tool

squalid existence of industrial

tem.

the

seems

social progress

achieved

have

many

drawing

in¬

the

there

years,

fairly

but, for the present at least, they
far less numerous, and much

from agriculture and skilled trades

reach

of comparison, our

was

production

mass

saw

enslavement,

ery

country.

who

the

look at

allow

scare

are

economy.

from the pre¬

Marx,

bring. He and

Pope Leo and Pope Pius

behind

Karl

temporaries

encyclicals are
us--at least in this

change that

attacked

their

far cry

in and

We still have strikes to be
sure,

unable to visualize the vast social

1890

agree,

substantial

dictions

evils that

well

problems of
Henry Ford, II

today

responsibili¬

both

table.

such

faster pace than our

productivity can absorb
they do not seem to have

them,

deci¬

major

and

prosperity.

increased

so¬

implica¬

tions

the

measures

and

bargaining

will,

pri¬

economy

our

Thus

cial

and

industry.

and

bolstered

understanding:
function
the

you

follows, then, that

consider¬

very

increased skill and

unemployment compensation.
of

long
rela¬

improvement has

ties

because

proper

bankrupt bus¬

economy

*/•;_

costs

about

creased

security of our people—hos¬
pitalization plans, pensions, Social
Security and Old-Age assistance
and

agree,
a

is not,

peace

the

extent

come

unemployment compensation,
I might add, are paid
entirely by

to¬

inessman

that

all

come

labor-management

Labor

believe that to

able

the

would

the

notes

vate

sol¬

.But

day

serves

for the

great
*

The

course,

business

too

to support.

Apart from the overriding obli¬
gation to serve God and to look to

broadly

people," and

our

must not be

his

that

system

mass

would

have

that, for the most part,
private initiative and private en¬
terprise have served us well.
It

happen.

past

doubt

overpowering strength against
weakness, it is the symptom of
a
most dangerous condition.
But

business decisions and warns labor and
capital against seeking
disproportionate shares of national income.
The prominent
auto producer asserts that the
"primitive and relatively un¬
stable capitalism of the past has
given way to a consumer-

dominated,

cannot and

itself, a sign of health. If it
simply the result of pitting

the social implications of major

to price
shrinkage of the

This

that

way

President, Ford Motor Company

let

think

too,

lead only

total market.

By HENRY FORD II*
„

can

and/or

The Commercial and Financial Chronicle
IS

Thursday, April 4, 1957-

(1590)

body,

now

extremely vital to the fur-

Republic it is indispensable
if the local will of the people is

ther

welfare

that

some

adequately represented in
the national government. /
.
It's
alarming to note that a
certain state — one of those that
should have been the last to fail
the intent of the Constitution—

the same opportunity to
grow in strength and sufficiency.
:
^This is not a question of con¬

this

cause

Bringing "Operation America"
Up to Date Requires Action
Deputy

cast

Mindful that the advancement of freedom, or "Operation
America/' requires deeds and not lip-service, President's
administrator claims the Constitution puts Congress "in a
paramount position and rightly so," wherein rests the appro¬
priating authority in contradiction to the President's position
of rendering information and recommendation to Congress.
In view of this Mr. Pyle defends non-military foreign aid.

j
|

the

Human

ior

tune — in tact, ever
through Adam decreed
should have dominion

not

earth

backed

every

over

—

the earth

including

ass

tough

wa s

ignment

right from the

haven't read the Secre¬
unvarnished
answers
t o
questions on this critical subject
as they appear in the Feb. 8 issue
of "United States News and World
If you

tary's

sands of years

Howard Pyle

history

written

about

it—

have come and

gone

been

fcave

civilizations

away

tyranny,

—

earliest opportunity.

tion

this

not

does

earth

freedom, civil
of

dom

government responsibility

its people relig¬
liberty, free¬
freedom of the

to give

was

speech,

security of individual rights,
popular education and universal

press,

franchise.
in

was

thorough

wisdom,

moral

enormous

group

great

courage

assem¬

Philadelphia for

months

of fact,

has

billions

Defense

of progress governmentally that the world had ever

sion will

now

it must be

ernment has been

said about

Hands of
icated

matter,

and

with

our

attitude toward the

United States.
grows
in informed
is

there

that

circles

lack

understanding

interest and

the

of
feeling

The

the

ablest and most ded¬

our

leadership

word needs-to be

Congress

respects almost

many

the Free World."

the

the,

before

what

AMERICA
to be

THE

earth

—

current

the importance ot the confess a*
*rnbo^, m
A0Y~t
ernmei*t. lt ,1S Possible t hat

and must continue

can

beachhead for the ad-

This

men.

freedom

cannot

granted, however, any

last

taken for

half century,

particularly

beyond

prove

the wisdom

John
"that

the
a

few

shadow of

of Secretary

Foster

war

and even more
last

Dulles'

years,
a

the

doubt

of State
reminder

is not prevented merely

by hating war and loving
Since

peace.

beginning, the peoples

of the world have hated
address

war

and

by Mr. Pyle before the
Mortgage and
Insurance Conference of
Croup V Savings Banks Association. New
York City.

the

along

somewhere

the

line

job to be done among us—a

vital

job if OPERATION AMER¬
proceed as planned.

ICA
A

is to

quick look at the text of the

Constitution

the

United States

given
detailed emphasis than any

reveals that the Congress is
more

other branch of the national
ernment.

Article I
cles

least

its

addition

of the

total

seven

text

the

mount

being

basic

words
text

gov¬

arti¬

the

document.' The authors of

the Constitution
of

half of the total

entire
♦An

Free

180

some

Certainly
public

■

words
—

Soldier-

iuuk

oven one so

let's

on,

"No

single

country,

tpnt

that

the

halipvpri

growth

of the United

World.

npppssarv

Communisl

Here my personal memory goes
to the closing days of the
in the Pacific.
Then, the

economies

the

—

States and the Free, back

There

who

those

are

altogether understandable desire
of our people was to bring our
example, the issue of, "economic citizen soldiers home as quickly
aid" is
especially worrisome to as transportation could be proby cerhere. / For

quite honestly disturbed
of

overtones

the

about ,vided.
In no
time at all our
manner—and* peripheral strength in the Far
from a East was bub a token force. We
letter we received the other day
were not ready for Korea and it
—"Economic
aid
will
not' stop struck us with devastating losses,

some

feel

who

strongly

to write in this

this

actual

quote

communism; military aid may.'' /
wonder

...

Aid

have happened at

Today,

the theme of our

mur-

Plan

United

put the

States

Congress
a

para¬

position and rightly so, be-

This

communism.

that

the

China

communist

was

say

takeover

aided

wav

and

these

-()f

j,orne

times,

than

bring it
increase

prematurely and
of having to

hazard

jbe

return
by the impoverished sta-^1he flower of our manhood to the
tus of the economy of that counbattlefields of the world.
to

the time

its surrender

Communism.

Today—there is
choice

between

a very

what

China

children

been
,

—

with

lost

million

persons

available

the

normal capacity
Furthermore,

enroll¬

facilities. /

ments

continue

well-'over

increase- by

students

million

year.

Responding to his Constitutional
.

obligation to recommend sucii
measures as he shall judge necessary
and expedient, the Piesiqent
has proposed a four-year emer¬
program
designed to re¬
classroom
crisis.
The

gency

the

lieve

estimated

billion, 300 million,
shall

What

total

to .be

expected

cost

year

.we

451
four-

1958

for

cost

dollars./ The

million

„:

it?

do -about

typical of the questions
we must answer as we remember
that this is OPERATION AMER¬
ICA
a
beachhead for freedom
is

—

that must continue to be an inspiration

lovine

freedom

the

peoples of the world and prool
positive that Communism is nc
match for it.
With all

our

dreams of progress

however, we must not
economy.

This

need

destroy oui

not happer

will exercise the intelligent

capable.

172

our

extent

the

ranaritv

norrT1oi

patriotism

ing

risk

can

2% million pupils more than the

that the Government will be serv¬

which

President's

are

Appeal

year.
I

Federal Spending in

•

Eurone

judged necessary and ex¬

crowding

are

schools

public

pedient, the President reminds us

well- on
to economic sufficiency, it's

Today
way

has

that

mean

being blind to the fact that even
now
31 million, 500 thousand of

hap¬

the Free World.

recommending the measures

Aid

School

Federal

decided

has

pened at these two points of the
compass.
Europe is growing in
strength as a part of the Free
World.

not

does

abetted

try

miscellane¬

lines, I have never been an advo¬
cate of Federal aid for our public
schools.
At the same time, this

This

enemy.

Excise

from

Among other things along these

been strong enough to be a real
threat to

Marshall

This is to say that the

never

all if our Forces out there had
*

Foreign

Non-Military

/It might

Corporation

12%

people,

our

from

Taxes,

and

Defends

War

are

taxes.

revenue,

sources.

ous

■

sources

29%

Taxes,

all

income

individual

Income

nations tnreatened by communw
aggression lrom without or subversion from within.
„•

international
trade and investment to the
of

liberty

the

Approxi¬

matter.

likewise supported

powerful as ours, can

defend

alone

of this
tangible

51%

other

Our

our

very

the
estimated
budget receipts in 1958 will come

Blood

American

versus

the

: President

■

•<

members

the

mately

the
Money

have

stake

divisions./

to provide the extra

safety factor directed by a more
widespread public judgment. : / ;

main¬
World

are

can

nation's

the

to help us to so alter

course as

our

among

granted.
Certainly the experiences of the
can

peace

1957

year

If this

concern

reported

leadership

h/d nothing whatsoever , to - mUrmg has a familiar ring. This
American
public • has
lost
the d?
with the economic recovery time; it's bring our money home.
taken for
identification of our Congressmen °f Europe and its present status,,/ for one, would rather see our
more than
with national policy?
If so, there as a bulwark against the advance money abroad, waging the near?
,

vancement

it is estimated that the

taining

trade

commendable

day's

include

divisions.

un¬

be true, then it could be that to-

.country

combat-ready

ability to

on our

taxes in support of it.

pay

...

believable strain

of collective security, the
funds assigned to this role for the

increased

idea

OPERATION

mean

sign
of it.

come

can

added

has

thing

from

Today,

people

arou„d

word here about
by collective se¬

good

relatively small groups whose in¬
cessant clamor for more of every¬

United States is maintaining some

abroad;
/ / •

.'/'•■

ciosex

mue

nave

tain

omissions.

Right here

complicated ad¬

ministratively almost bevond de¬

scribing, in
Hopelessly.

side of seriously

Congress Is Paramount

system of gov¬

our

responsible task!
department by

done

to err on the

hurtful

Granted

re_

items

and for devejuses of atomic
and

this

much

the

possible that in recent years
the pub¬
in many instances
has
been
too
largely expressed
by

and kinds
available to

weapons

curity

growth cf the economies of the
United States and the rest of

Now,

on i

will

lic

these funds both for

use

nuclear

and investment essential to

for

irresponsible,
across - the,- board
slash, so cripple strategic services
as

From then until

necessity

department, item by item, lest aii

AMERICA

beachhead for freedom.

.admitted that

It's

costss

B_29

Now, just

great

international

thinking

minded

doing

are

what has appeared to be

way

and

re¬

personal

must

it>s well

Atomic

this_the

/.'"/

and

v>'-'
economy

our

''■"■■/'/i-'
people

sober

our

the

now

involved.
It

first great era

would

equipped to say—that 45
of dollars, or 63% of our
assignment of funds should

such

home

"Increasing

been cut

representatives in
Congress to weigh all that is

the

among

member

being

our

integrity;

grams

have

use

resources;

the

total of all the

sum

Comes
your

who

NationaI

"A well balanced choice of pro¬

included.

been

produced the Constitution
of
the
republic of the United
States. It was the beginning of the

for

"Fiscal

quests that might otherwise have

last

Taken

months

dollars

the

from

these

course

it.

into

gone

and

-.'"/I',/;■

cnallenge to

greatest in our peace time

Our

°n the side o£ today's costs on

and

develop¬

conservation,

ment,
natural

have

that

of discussion and deliberation that

known—OPERATION

ur-

the President and his
spent months of the
hardest kind of work evaluating
the merits of every single item

vigor, mental acumen,
knowledge, practical
far-sighted vision and

physical

bled

that

1787

STATESMEN

REAL

such

for

gently important item of business
the Federal budget. As a mat¬
staff

international

moment,
it
is
Eisenhower's judgment

abroad

of all our

"Wise

ter

the

It's

that

Remember, this is OPERATION
AMERICA.

and

shared;

that

mean

substantial reductions in taxes.

the

energv

well

reduc¬
as well

and

1957,

1958

and the
people;

900

dollars

billions

portunity

billion

9.4

1958 with
tions in the national debt,
1956,

"Enhancement of individual op¬

established for the firs&time ■the Executive Department has no

anywhere

surveying

omy

Opposes Across-the-Board
Slashing

billion;

1953 to balanced budgets

fiscal

Tne

healthy and growing econ-/our military forces
with
prosperity widely oping the peaceful

"A
,

Now

deficit

defeat' increasing the numbers

be, / to

need

better;

aggression;

should be.

OPERATION

until

ious

—a

budget

the

and,

subject than ever before.
It's
a
most
encouraging

"Powerful armed forces to deter

its full Con¬
stitutional responsibility in rela¬

AMERICA began to be. Here was
to be

mat

suggestion

the Congress assume

people

terized the rise and fall of

so
at your
His candor is

rebellion charac¬

oppression and
people

Tne

refresning.

con-

quest,
militarism, lawlessness,
xaobmindedness, riot, persecution,

after

please

Report"

time and then

for a

scene

crumpled

the

dominated

have

-—empires
world

total

the

estimated

history.

judge

he shall

places

receipts

•//
/• >•1 ■; /' ■ / /,/ /
We nave moved from a budget

C"U
Union

billion,

million.

and expedient." In com¬ $680,000—the B-36 about $4 mil¬
with this obligation for lion—the B-52, $8 million.
the next fiscal year, the President
Similarly, the budget provides
prefaced his budget message with 4 for
$2.3 billion of expenditures
—"I
have
been
guided by. the
by the Atomic Energy Commis¬
following national objectives . . ; sion in the next fiscal year; this
"Peace, justice, and freedom for amount is 20% greater than the
our own and other peoples;
estimate for 1957.
The Commis¬
plying

Thou¬

out.

measures

necessary

found

soon

such

ior

pressing

President

recommend to their consideration

exactly.

start as Adam

The

President?

the

forth¬

Humphrey's

George

ury

ot
Constitution

says/HeUshan f/om
give.ht0
oi
the Se(„Confgrt!Ls
State of the

1958

situation

position

the

then

1958

estimate

best

President William McKmlev/

—and

President's Function

«-;•!"'r

billion, 600 million dollars.
The budget the present -Administracion took over in 1954 /was

he?

was

polls

the

Who

;

elsewhere.

What

right statement that . . . "WE'RE
SPENDING
TOO
MUCH
MONEY" illustrates the point

himself.

either

lightly

with a will to make it
active will
energized

up
an

—

taken

must, be

so.

power

appropriating authority
of OPERATION AMERICA.
Un¬
der no circumstances should it be

by the most sensible realism of
simple economics that we can put
to work. Secretary of the Treas¬

creeping thing
that creepeth
cpon

make

legislative

the

rests

for

the

and

Our

respect.

every

should be every

to remain

domestic economy

our

and

—

wanting

merely

will

Neither

sound

the

all

over

the Congress

tional

Here

■/'

•

800 million dollars.

striding' for

A policy of good
will and friendly trade relations
will prevent reprisals. Reciprocity
treaties are in harmony with the
.

civil

our

Totaled—irt brings the estimated

Said

the

million.

-spirit of the times; measures of
Constrtu- retaliation are not.
\
:
- This
•//"Isolation is no longer possible
citizen's attitude. or desirable."

toward

has

commerce/is

problem.

Eisenhower's attitude
~

encourage

qualified citizens.

President

for peace — but
gained them peace."

longed

that

best

spending measures
implement "Operation America."

long

our

and

one

the administra¬
operations, and
this item is down three hundred

The expansion of our trade

past.

debt,

for

necessary

tion

period of exclusiveness is

"The

the

spilled abroad; and other

beings have been around

since God

tile traditional

What McKinley

national

the

hundred million—and the 3% that

made the following state-

sense,

'a"C6ni?ness

build

not

devpto Congressional
service at
head of our government by

tion

irresponsible, across-the-board
budgetary slashes, while reviewing the Executive's respon¬
sibility in submitting a national budget. Prefers seeing our
money abroad than bringing it home with the chance of having
to

19V2 million.

will .not

—this

est

liberalism any more

conservatives,

195G than for

1954 Congres¬

the

exceeded

sional totals-by
will

budget is up four hundred million
plus—a 10% item to cover inter¬

World

nations

than such was the case when one
of our most widely advertised

Presidential candidates in

This

Free

other

in 1954, just; two* rr.ent in his last speech as PresiThe total votes cast dent of the United States.

before.

for the

1956

servatism

million more votes

Congress

years

budgetary items, and opposes

American blood

nearly

for the President in

the

given

By HOWARD PYLE*
Administrator to the President

people's

the

Therefore,

home,

1953

civil

benefits,

and

here

the

not

when

nation's
and

with those wh<
to
say
"It won'

agree

inclined

work"

c^st

posed that we meet t^e

are

pro¬

the

President

leaders

urge

busmes

labor to voluntarily exercis<

Volume'185

Number 5626

The Commercial and Financial Chronicle

inflation¬
tendencies of these times so
plainly recommend.

Division, U. S.
Treas¬ Schmidt, Poole, Roberts & Parke; Chairman; K. G. Lefevre, Fidel¬
Walter P. Miller, Jr., Cham¬ "Edgar Scott, Montgomery, Scott & ity Philadelphia Trust Co.,
Commerce; John A. Mur¬ Co.; C. A. Sienkiewicz, Central- Secretary;
Alexander Riddle,
phy, Reynolds & Co.; William B. Penn National Bank;'Edward B. Philadelphia-Baltimore Stock Ex¬
Murphy, Campbell Soup Co.; Paul Smith, Jr., Smith, Barney & Co.; change, Treasurer; and Mrs. KatnJ.. McNamara, "The
Warwick Goeffrey S. Smith, Girard Trust eryn Duffy, Executive
Secretary.
Hotel; George E. Nehrbas, Parrish Corn Exchange Bank; George E.
& Co.; Frank L. Newburger, Jr.,
Snyder
Jr.,
George
E.
Sny¬
With G. H. Walker
Newburger & Co.; Leonnl. Ober- der & Co.; Edward Starr, Jr.,
mayer, Board of Education; How¬ Drexel & Co.; James M. Symes,
(Special to The Financial Chronicle)

and

true

ber

resort to the force of

government

then this is not OPERA¬

controls

AMERICA.

TION
*

this

then

true

people have no reason to expect
President Eisenhower, John Fos¬
ter Dulles,

and others like them,
in
maintaining the

succeed

in the midst of all the con¬
are so stridently a part

peace

flicts that

of the international situations that

surround

today.

Certainly

lems,
are

numerous

turmoil

prob¬

they

difficult

tangle

domestic

our

are,

than

the

which

our

must

Brush, Slocumb to Be

ury;

such

FRANCISCO, Calif. —Er¬

nest E. Blum will acquire a mem¬

bership in the New York Stock
Exchange and on April 11, Brush,
Slocumb & Co., Inc., 465 Califor¬

C. Petersen,
Fidelity-Phila¬
delphia Trust Co.; Frederic A.
Potts, Philadelphia National Banx;
R. Stewart Rauch, Jr., Philadel¬
phia Saving Fund Society; Alfred
P. Rexford. Poor Richard Club;

Pennsylvania Railroad; Joseph L.
nia Street, members of the Pacific
WATERBURY, Conn.-—Anthony
Tinney, Station WCAU; Rudolf F. F. Rauza has
become connected Coast Stock Exchange, will also
Vogeler, Chamber of Commerce with G. H.
Walker & Co., 20 East. become members of the New York
and
Lloyd
R.
Yoder,
Station Main
Street.
Stock Exchange.
WRCV-TV.
:
«
Officers of the

R. G. Rincliffe, Philadelphia Elec¬

are:

Other officers of the Committee
T.

Johnson

tric Co.; Ellsworth A. Roberts, Fi¬

delity Mutual Life Insurance Co.;

Robert E.

Trust

clysmic clash of arms.
We expect them to continue to

NYSE Member Firm
SAN

ard

Mrs.

top leaders have thus far so suc¬
cessfully avoided a truly cata¬

Mary

Roebling,

Trenton

Executive

Walter

Schmidt,

Sessions

the

Charn-

the

RIVERHEAD, N. Y.

—

Butler,

Herrick & Marshall have

opened

branch

office

Gerald

Vice-

William

Brush,

Wilsen.

Brush,

and

Secretary

August

Treasurer;
Assistant

Secretary-Treasurer.

AMERICA

became

continue

beachhead

the

if OPERATION

can

for

freedom

that

privileged and happy

our

destiny when Columbus—and here
.

paraphrase the poet's lines-

this

gained

new

whole

the

world and gave
its
grandest

world

lesson—

■'

Sail on!"

"On!

Philadelphia Invesf-inAmerica Committee
,.<

PHILADELPHIA,

Pa.

—

Walter

Morgan, President of Welling¬
Fund, and Chairman of the

ton

Philadelphia

invest

America

Committee, announced the ap¬
pointment of a 62 man general
.committee to effectuate the pro¬
gram.
Invest-in-America W e e k
.will be observed throughout the
country during the week of April
28 through May 4, 1957.
j
"
Members of the general com¬
•

mittee

appointed by Mr. Morgan

leaders

are

the fields of pub¬

lishing,
banking, finance, mer;chandising,
insurance,
industry,
transportation, public utilities,
radio

television.

and

The
of:

general committee consists

Walter

delphia

Frank

Co.;

Annenberg,

Pnila-

Richard ;W.
Bulletin";
Baker, Baker, Weeks &

"Inquirer";

Slocum,
E.

"Evening

Miss

vestment

Women's

Barnes,
Club

In¬
of

Philadelhpia;
D.
Moreau
Barringer, Delaware Fund; Charles R.
Bird, General Outdoor Advertis¬
ing; W. W. Bodine, Penn Mutual
-Lite
Insurance
Co.; Richard C.
Bond, John Wariamaker; Thomas
-A.
Bradshaw, Provident Mutual
Life Insurance Co.; John F. Bunn,
Jr.,
Bioren &
Co.;
George
E.
Burens, General Electric; Roger
W. Clipp,
WFIL-TV; StanleyW.
Cousley, Murphy Oil Co.; Mrs.

These

Craig, Miss Margaret *
Crozier, Philadelphia- Restaurant
Association; William L. Day, First

-Walter\ A.-

are

just

phone service.
your own

few of the items of complete tele¬

A package can be made up for

particular needs at home

in the office.

Pennsylvania Banking and Trust
-Co.:
Also: W. W.

■

men's
G.

Bank

Dunlop.

Delamater, Trades¬
Trust Co.; Robert.
Oil Co.; Joseph.

Sun

Bigger

Telephone Service

Fisher, Reading Co.; Walter D.
Fuller, Curtis Publishing Co.; Al¬
fred
D.
Gillen, Bell Telephone.
Co.; Albert M. Greenfield, Bank¬
ers Securities Corp.; Lee S. Har-

New services and

ris, Jr., Frank G. Binswanger &
Co.;
Stanley H.
Heist,
Saving.
Fund Society of Germantown; Ed¬
ward
Hopkinson, Jr., Drexel &
Co.; Louis P. Hoyer, retired.
; Superintendent
of
Schools;
-Charles L. Huston, Lukens Steel
.Co.; Ralph Heaton, Transporta¬
tion Displays, Inc.;

been

Also:

Wood

Harleston

Wood, Alan

'Kindt*

-Co.;

James

Marvin,

Savings

phones

One of

the

most

significant developments of recent

has been the great increase in comforts and
veniences forMnore and more people.
years

con¬

helped this

anticipate, what people want and provide it at a
meant

The result is

wholly

by telephone service.

new concept

Recognizing the trend and alert to it, the telephone

what is

thought of

as
a

just

one

black

number of tele¬

by making

1
new

style

telephones available, along with color, and with spring
cords, illuminated dials, volume control, etc,
j
•

But the main

reasonable price.

was

convenient places around the house.

We have

and
„

Jr., John C. Winston Co.;
: Woodson
Knight, American As-sociation of Industrial Editors; C.,
-A. Kulp, Wharton School of Fi- '
-nance;
P.
Blair
Lee,
Western
-.Saving Fund Society; Percy C.1
Madeira, Tradesmens Bank & Trust.
-

developed to meet trend to greater

companies have been accelerating their efforts to find out,

Steel

Co.; Robert M. JoTine, Benjamin Franklin Federal
Savings & -Loan Assn.; Charles F.

formerly it

instrument, the modern trend is toward

comfort and convenience

Where

equipment have

reason

for the

success

of the idea is that

people have found that there is no greater aid to new con¬
and comfort than adequate' telephone service.

venience

In offices, as

well

homes, there is

now a

package of telephone service available for

Working together to bring people together
BELL

TELEPHONE

SYSTEM

much bigger

everyone.

Joseph

Riese,

succeed.

Neither

Presi¬

Edwin

Vice-Presidents;

Caine,

Philadelphia- Avenue under the management of and

Baltimore Stock Exchange,

Callan,

Griffing N.

130

Spencer

are

dent; Mr. Bium, James S. Taylor,

Butler, Herrick Branch

Committee;
of

ber of Commerce and J. Raymond
Leek

Co.;
s o:

the

firm

Ward, Chairman

They must!
They cannot fail!

1<$

Bond

the precautions that the

ary

(1591)

}

a. -r

■

•

The Position of Mutual Savings
Banks in the

Expanding Economy

regulation and by more unfavor¬
able
taxation.
The
funds
thus
shifted, it is said, do not represent
new
savings and, consequently,
inflationary.
The conclusion is reached that

are

existing monetary controls are in¬
By J. BROOKE

WILLIS*

adequate and that they should be
extended
to embrace the entire

Trust Company, New York City

Economist, Savings Banks

system of financial intermediaries.

economist

Banking

demand

extraordinary

that

notes

for

Otherwise, inflationary pressures,

impose legal

steady

rate

economic

ade¬

growth;

quate
in

must

there

inflation

The
ments

postwar
d

that

level.

demonstrated
that

limited

by
f i-

nance

capital

investment

grown

much

decade?
J. Brooke

of say-

Willis

-•

ings rather than through
expansion.

monetary

Recent Pressures

This

upon

combination

projection is based
of

assump¬

kets.

The intensity of these pres¬

past

year

and

heavy pressures have been

reflects

sures

This is not

new

Economists have long
aware of the growth in in¬

discovery.
been

stitutional

debt"

savings

some

of "indirect
now wish

writers

For

some

in the past, peo¬

years

ple have tended to accumulate

intermediaries.

Instead

financial

of invest¬

ings banks and to other special¬
ized financial intermediaries, each
providing its own distinctive fa¬

ij does not follow that their

decade.

upon

the

years

mercial banks.

commonly accepted projection cilities.
is
that the economy will
grow
Although the savings institu¬
during the next decade at the rate tions, as a group, have grown
of 3% as compared with about more
rapidly
than
commercial
31/2% per annum during the past banks,

half tions including a constant price
placed level. An estimated 3% annual
the credit and capital mar¬ growth in the gross national prod¬

last

have

rapidly during the
than those of com¬

housi ng by
means

against

What is the outlook for the next

and

intermediaries

financial

grown

rise in the price rising share of their assets in the
the number of form of claims

idea that the base of
control has been nar¬
on the statistical find¬

The

to describe it.

pared with 2.2% in 1955.)

equip-

plant,

:..."J.1 • .•'•''"*:..

ing their savings directly in cor¬
deposits, at only about 1%% per porate securities, real estate, mort¬
year.
(Last year the number of gages, etc., they have tended more
accounts rose by 2.0%
as
com¬ and more to entrust them to
sav¬

willing-

n e s s

just

argument

slowly than the dollar amount of

pacity to grow
our

has

comment

the

Moreover,

accounts

ca¬

our

other

must remind you
this growth is ex¬

by the

plained

have

part

ing that the loans and investments
of

However,

of; the
d e c-

step

(1)

by 6.6%
ac compared
with 6.9% in 1955.)
The growth
rate of the mutual
savings banks has been remark¬
ably steady even though some¬
for some

rowed rests

savings institutions.

develop¬

would

monetary

(Last year deposits rose

what slower than

savings.

I
each

presented.

financing.

Expansion at high levels of em¬
ployment is to be realized without

such

Regulations W and X over
and real estate credit.

chronic tendency

uct at constant

prices

assumes

annual increase in

population gain
in a period of growth for credit of 1.4%, a gain in output per mandemands to outstrip the rate of hour of 2V2%, and a decline in
savings.

rapid

growth

has

been

the expense of demand deposits in
banks.
a

Indeed, the channeling of
larger share of savings through

financial

institutions reflects, in
change in the composition
of savings rather than the substi¬
tution of claims on savings insti¬

part,

tutions

for

holdings

demand

pects of this situation which are
most important to savings bank¬
ers are
(1) the intensification of

of deposits.
/,There is no reason .why such
Such
a
projection jmplies a a change in the composition ;of
commensurate increase in pemortal savings would impair the opera¬
of
savings.
However, there can be tion
monetary policy.
Cer¬
no grounds for complacency. Even
tainly, we could not expect that
if we were certain of the validity monetary policy would be made
of the underlying assumptions and more
effective if
we
did away
that a steady pace of growth was with financial intermediaries and
assured, the savings banks would reverted to a system of direct in¬

competition and (2) the threat of

still

credit control.

relentless competition.

average

result of the extraordinary

the rising cost
the shqrtage of
savings, the savings institutions
have become the subject of special
attention and study
The two as¬
demand
of

for credit,

money

to comment
only
the aspect of competi¬
since that is h subject with

propose

briefly
tion

which

you

first hand.
my

and

are

quite familiar at

I shall devote most of

remarks to the threat of credit
Incidentally, current pro¬

control.

annual hours worked

0.8%.

face

decade of intense and

The

economic
growth projec¬
imply, a tremendous demand
for capital and a vast increase in
debt. During the last decade net
public and private debt rose by
nearly $300 billion. In the next
decade the debt could easily rise
by another $350 billion. In this
tions

vestment of individual savings.
The thesis that monetary con¬

trols

have

been

impaired by the

relative growth of other financial
intermediaries seems to imply that

economic growth should properly
be financed more largely by an
inflation in the money supply. For
this is the only way that a larger
share of loans and securities could

posals for extending credit controls
to savings institutions are to some environment the
be retained by the banking
competition for
extent
competitively
inspired. savings will undoubtedly be great. tem rather than by savings
stitutions.
However, demands for a study of
the financial

structure

and

prac¬

tices of all financial intermediaries

is becoming more and more wide¬
spread.
Such
proposals
range

that

from
hower

for

President

National

Eisen¬

Monetary

Threatened Controls Over Savings

Institutions

spite

channels

the

through

shift

which

sys¬

in¬
the

savings
supply

Proposals for imposing financial flow, the ratio of money
non-bank financial to national income has not shown
intermediaries appear to be gain¬ a long-run decline. This ratio has

controls upon

them.
In periods
expansion when in¬

for

substitutes

economic

rise, people are said to
prefer claims on nonbank inter¬
mediaries
to
demand
deposits.
In this way "the lending terms" of
the savings institutions are eased
comes

while those

banks

not.

are

><*»

the

reasoning broadens
definition of money to in¬

clude, in addition to currency and
demand deposits, savings deposits,
savings and loan shares, policy re¬
and

serves

other financial

assets.

The authors of this type of rea¬

admittedly have deviated

soning

the

from

banks
to

established

belief

that

unique in their ability
issue money, that is to add to

total

Financial

posed

Commission

.«i

•

•*

ates"

is unreal¬
apt to say

language

It would
ah

individual

person
"cre¬
The fact

"issues" claims.

is that neither savings institutions
nor
individuals have any power
to force their obligations into gen¬

The ability of savings in¬

money.

stitutions to expand is conditional

the willingness of people to
accrue claims by
refraining from
consumption as their incomes ex¬
pand. The savings institutions can
encourage thrift habits but they
upon

cannot

force savings accounts
unwilling public.
By contrast the obligations

commercial banks
the

accrual

are

;

and

money;

of claims against the

as a whole is not
special thing of its own kind conditional upon voluntary ^sav¬
and,
instead, argue that it is ing out of income by the com¬
merely one among other financial munity, but is the outcome of bor¬
intermediaries.
This viewpoint rowing
by the community, i.e.,
naturally
tends
to
regard , the spending in excess of current in¬
function
of
money
as
being come. For this reason the Federal
merely a store of value, something Reserve System has been given
to hold, not as a means of pay¬
the duty of limiting the availabil¬
ment or as something which peo¬ ity
of reserves. Otherwise, the
ple seek to acquire in order to banking system, which is inca¬
spend it. Consequently, it is pos¬ pable
of
the
required
self-re¬
sible to reach the strange conclu¬ straint,, would undertake to
satisfy
sion that a savings account, or an too many borrowing demands by
equity in a life insurance policy deposit creation.

banking system

substitute

for

demand

posit.

de¬

That savings accounts and other
claims on savings intermediaries
differ

policy of monetary restraint
be carried 'to the point of
actually reducing the amount of
could

and thus force

reserves

contrac¬

demand
deposits should require no statis¬
tical proof.
First, the aggregate
total
of
savings
accounts
and

tion

other

actual reduction in the resources

functionally from

personal financial assets is
a
stable
quantity as compared
with demand deposits in banks.
The major cyclical fluctuations in
the published statistics on per¬
sonal savings are not in the vol¬
ume of savings accounts but are
caused by changes in the amount
of
demand
deposits,
personal
debts, which are treated statisti¬
cally as offsets to savings, and
also by changes in inventories of
unincorporated business firms.
Secondly, the turnover of sav¬
ings accounts is decidedly slower
than that of demand deposits.

ments
the

bank

and

•

invest¬

deposits.

are

enough

the

loans

controls

with

Actually
seldom applied
to

force

commercial

cause

Last

banks.

year total commercial bank de¬
posits remained about unchanged.

(3) A final, and perhaps, crucial
concerns the ability of other
institutions
to
attract

point

financial
funds

commercial

from

banks.

The argument is that such a shift
from demand deposits to savings
accounts

inflationary since

that lending power of sav¬

means

ings institutions exceeds

new sav¬

ings.
Such

Al¬

though their holders add to and
withdraw
from
these
accounts,
withdrawals are for special pur¬

"shift"

does not

seem

period

likely to

preference
occur in a

rising \ expenditures
a general tendency

when there is

to prefer goods

to money.
savings accounts are not
a
The rise in savings deposits is
general means of i>ay-*
ment.
Savings deposits have an ordinarily the result not of such
average life of nearly four years, a shift in funds from demand to
demand deposits only one-half savings accounts,
but a rise in
poses;

used

month.

(2)

On the "second point, there
disagreement that the mon¬

personal incomes.

Savings deposits and other fi¬
can grow in periods
economic
expansion
even
impact upon banks than upon though the money supply is held
savings institutions.
dbwn.
There is nothing peculiar
The
reason
why
commercial about this. It merely reflects the
banks are the immediate target
fact that incomes have risen, and
of control is self-evident.
Com¬ so
consequently have savings. In
mercial banks are the institutions
terms of monetary mechanics this

etary controls have a more direct

which create the effective money

supply in the form of demand de¬
posits. In contrast with other fi¬
nancial institutions, the commer¬
cial banking system, if reserves
are available, can expand its de¬
posit liabilities as the banks make
new loans or purchase securities.

nancial assets
of

is possible
because the money
supply turns over more rapidly,
as the economists say, its ve¬
locity rises.

The rise in savings, instead of
representing an addition to spend¬
ing power, as argued by the ad¬
vocates of controls, reflects the
Debts
are
thus monetized
and
fact that not all current personal
bank deposits expand as a result
income is being spent. The greater
of borrowing to finance expend¬

ing support from academicians as declined during the postwar boom
com¬
well as from commercial bankers; following
•
its excessive wartime itures.
outstanding citizens to and therefore, what you might rise. But, it is no higher now than
By contrast, savings banks and
that by
Representative Patman otherwise regard as merely an¬ it was in the 1920's and it is lower other financial intermediaries can¬
for a
study by a Congressional other cry of complaint about tight than in the period 1900-1920.
not, on their own initiative, either
committee.
While it is quite true that bank individually, or as a system, ex¬
money and competition has to be
Very few of the advocates of considered as having some meas¬ loans and investments represent a pand their liabilities and thereby
these
proposals have
indicated ure of serious intellectual support. smaller ratio to those of the fi¬ enlarge the savings of the public.
specifically
what
ought
to
be
The argument
intermediaries, they are Any increase in savings deposits,
runs along the nancial
studied but, in any event, it is
still as high or higher in relation or in the total amount of claims
following lines:
to national financial assets or to against other savings intermedi¬
clear that the financial interme¬
(1) The growth in non-bank
diaries, and their role in financing credit institutions has narrowed national wealth as they were in aries, depends upon the act of
the year 1900.
the economy, will occupy a promi¬
By these stand¬ saving by the individual cred¬
the base upon
which monetary
ards the monetary base has not itors.
nent place on the agenda.
controls operate.
contracted as claimed.
The amount of personal savings
'
(2) Monetary controls, such as
Growth Potentials and
The thesis that monetary con¬ is a function of income and of the
legal reserve requirements and
Competition
trols have been impaired by the voluntary decisions by savers as
open market
operations, reduce
to the allocation of their total in¬
Since the war, deposits in mu¬
relatively faster growth of saving
the resources of commercial banks,
come
between consumption and
tual savings banks have grown at
through
nonmonetary
financial
but have no direct effect, and but
an annual rate of
intermediaries rests on a peculiar savings.
nearly- 6% as little
indirect effect, upon other
In an attempt to show that the
assumption. It is that there is no
compared with 6%% for all types
financial intermediaries.
of savings accounts and 7% for
essential
difference
between relative growth of financial inter¬
(3) In periods of tight money, claims on savings intermediaries mediaries is inflationaiy, the ar¬
life
insurance
policy
reserves.
*
savings institutions are able to at¬ and demand deposits in commer¬ gument has been " revived that,
*Au address by Mr. Willis, before the tract funds from commercial banks
cial banks.
The other financial like the commercial banks, the
Ninth Annual Savings Bank Conference
since commercial banks are re¬ intermediaries are said to be com¬
on Operation,-Audit and Control.
savings banks can "create" or "i$Boston.
stricted in what they can pay by petitive with banks and serve as sue"
Mass,
claims against themselves.
and

use

that

are

purchasing power.. They
that the banking system is

deny

This
istic.

-i-

Thursday, April 4, 1957

eral circulation since they are not

This line of

consumer

requirements on
savings institutions ignore their vital role in an expanding
economy.
Maintains savings institutions and other financial
intermediaries must be depended on to promote personal thrift,
productivity, and higher living standards without inflationary
proposals to

current

controls

credit

selective
former

savings institutions; with the intensification;of competition,
and threat of credit control assuming particular importance.
States

said, will require the use of

it is

credit, rising cost of money and shortage of savings have
resulted in devotion of special attention and study to the

•

(1592)

The Commercial and Financial Chronicle

the rise in savings the better for
the

can

investment

stimulated
sion.

in this
capital
unduly
expan¬
-

The
a

since only
be sure that
not being
by monetary

economy

way

only basis for arguing that

transfer of funds from demand

deposits to savings institutions is
inflationary lies in the fact that
such

transfer would not in itself

involve any reduction in the re¬
sources

of the commercial banks,

since the funds, upon
or

being loaned

invested

tutions,

by the savings insti¬
would in the course of

their circulation be

redeposited in

the commercial banks.
There is no way of

knowing the

extent to which mere shifts from

demand

deposits to savings
counts actually occur. To the
tent that they do/

the

ac¬
ex¬

money sup¬

ply becomes redundant. If there
is to be an adjustment, it is prop¬

erly made by restraints on com-

Volume

185

Number 5626

Financial Chronicle

The Commercial and

(1593)
mercial

banks, not

savings in¬

stitutions.

method

the

advocate

to all

termediaries is

quirement

by those who

extension

controls

mone¬

financial

legal

which

control

to be favored

seems

tary

reserve re¬

presumably

—

in¬

pre¬

scribed ratio of cash assets to the
volume of savings held.

Legal reserve requirements
a

are

method of control in

necessary

type of demand deposit bank¬

our

ing system but they
to

the

suited

are not

controlling
either the flow of funds through
savings
intermediaries
or
tne
purpose

ments.

why legal re¬
requirements
are
not

serve

reason

needea

nancial

institutions

that

creating

earlier

fi¬

nonmonetary

incapable

are

purchasing

power,

interesting fact that the

American Bankers Association has

Federal
Reserve's
power
to vary
requirements is
nowadays retained only for extra¬
ordinary situations. Requirements
were

last

prior

raised

there

the

institutions

diverse

banks,

pension funds
companies?

surance

the

position that for credit
requirement against

reserve

This view is con¬
New
York
State

deposits.
the

trary

Bankers

Association's

mendations

recently
Plan

legislature. In
published brochure

for

Member

that

recommends

recom¬

the

Bank

Requirements,"

serve

savings

life

Chairman

Reserve System.

Alfred

the

A.B.A.

the

Re¬

present

re¬

quirement of 5% against time de¬

pots be reduced to 2%. Let me
quote from this report in answer
to
the
question:
Is
there
any
justification . for
imposing
any
legal reserve requirement
deposits?
"Demand

banks

deposits

part of

are

supply and
control

time

money

properly subject to

are

bank

respect to

time

deposits,

however, is clearly very different.
They cannot be used directly as a
of

means

In the

payment."
of commercial

case

banks,

that

now

technique of control because

Federal

reserves
be controlled by

can

Reserve

which

powers

decrease these

less

the

holding

savings

actions

reserve

achieve

of control

the

mercial

banks

tions that

have

the

would be
to require them to hold

necessary

reserves

institution

central

some

designed

for

the

non-bank

advocates of

provide

also

lowering

control

for

the

would

raising

and

required

ratio.

(See Clark Beise "Are Our Mone¬

financial

outlook

institu¬

Summary

extent

intense

and

mands

are

threats

long

guard/

tive

long

Consequently,

reserves.

cash

the subject institu¬

able to replenish their

were

but

inevitably

would

cluded

the

credit

have

well

thrift
the

in¬

reserve

apparent that
on

tailed

form of selective

"Capital

rationing

financial

some

control

institutional
surance

Indeed,

The current proposals to

legal

impose

requirements
institutions
ignore

reserve

savings
vital

that

role

play in

upon

the

institutions

become

may

for

been

said

that

one

advanced

ear¬

economic

society is the variety of financial
institutions

few

lenders,

such

that

assemble

the

resources,

economical

capital,

realization

depend

the

upon

the

benefits

existence

variety of financial
for

capital

ings.

and

Only
proper

mercial

the
a

users

suppliers of
of

part

function

banking

this
of

sav¬

task

the

system.

com¬

out of

would

operate

tively

with

savings

than

with

Variable

1 Reprinted

Financial

full

reserve

effec¬

institutions

rations

banking

system.

stitutions

and

The

the
are

savings

are

that

ways

savings

other

intermediaries

growth
2

in¬

financial

indispensable
be

invested

the

assure

buy

optimum

Reprinted

full

Chronicle,"

the

Jan.

"Commcrr.ial

31,

Ann
Ann

was
was
These industries have

stones.

„

Averages?
averages

•

will

control

will

obsolete, as are horse cars,
the Oregon masts, and the
paving
blocks. The Dow-Jones
Averages
which so many bankers now wor¬
ship are only, tombstones of fad¬
ing great industries. These "Av¬

Years

the telephone
companies had comparatively few
subscribers.
There
were
only

erages"

will

eroded
------

banks.
did

not

Proctor
New

"Commercial

Chronicle," Nov. 22,

1956.

—

say

national

Harold Haiighey

continue

our

present

wages

income

and

industries

not

first

horse

job

was

line

car

•;

.(■/*':

Paine, members of the

York

Stock

Exchange,

an¬

nounced

the

office

Warrentown, Va., under

opening

inflation

of your

Haroid C. Haughey partner in

March

new

William

away

27.

HERTZ CORPORATION

THE

fu¬

possible

every

Record $58 million

way.

deposits but also the value
bond which the bank
:''■■

every

holds!

Furthermore,

that

membered

naturally

•

should be Re¬
banker'should

bankers."
deposits;
but the greater their deposits, the
more
they owe!
In their hearts
they realize that deposits repre¬
namely,

sent

the

"pair

Bankers

brag

The Hertz

The

debts.

driver's

gross revenues in

Conservative.It' is

said that only one thing' is more
easily frightened than-'a banker—

their

Corporation experienced its greatest

should

truck

leasing operation.

sit in
depositors

depositors

seat.

The

blame

not

year

1956, continuing to be the world's largest rent a car and

bank could close the bank
week.
Hence, I repeat we

ANNUAL

REPORT

bankers for be¬

HIGHLIGHTS

1956

1955

1954

$53,789,183

$41,279,907

$23,612,297

ing cautious.
Asking Bankers for Investment

Advice.
Banker? may

mis¬
with

take

associating

bankers.^Instead of' attend¬

ing

Bankers'

much

Conventions,

they

REVENUES

OPERATING

CAPITAL

$19,966,344

$12,959,895

$10,743,849

TAX

Rotio to operoting fevenue* .;..

EQUITY

be making

other

physicists, chemists, and other

scientists.

advice

Instead

other

remembering
perhaps
who

ask

you

asking

the

who

are

bankers

into

looking

are

1929, they should
the advice of those

rather than the

the future

past.

NET

BEFORE

INCOME

Ratio to

for

bankers

some

advice,

the

in an investment
study only its balance

they

look

5,960,147
,

•

equity capital.

They

and

ask

audit.

earnings statements.
the accountant's

to see

Yet,

students

the

past.

make

forecasts.

are only
Their busi¬

accountants

autopsies

Accountants
as

—

may

"undertakers"

—

not
be
not

Ratio to

equity capital

NUMBER

TAX..

operating revenue*

1,903,776

10,1%

...10.7%

8.0%

29.8%

34.2%

17.7%

4,759,418

2,901,552

1,370,414

7.0%

5.8%

23.8%

22.3%

12.8%

1,724,925

1,575,793

.,.,

OUTSTANDING

1,525,343

5% *tock dividend paid
J.

December

28, 1956)

EARNINGS
CASH

PER

SHARE....

DIVIDENDS..........

2.75

1.84

.90

1.00

.90

.50

DIVIDEND

STOCK

PASSENGER
OWNED

—

CARS

YEAR-END....

12,378

7,544

3,956

YEAR-END...,

12,857

10,663

5,339

25,235

13,207

9,295

TRUCKS
OWNED

"doctors."

AFTER

INCOME

Ratio to

4,434,615

company

sheets

NET

(Before

investment

TOTAL

VEHICLES

OWNED

Officers of Banks

humble

YEAR-END....

the

judgment,
should

bank

All data restated

reflect economic merger*.

graduate of some highly profes¬

sional

school, such

chusetts

Institute

if he is to

the

Massa¬

wonders

know what

which

are

and

associate

with

the annual report, write:

now

men

who

people by fsr.

use

Treasurer,

is ahead,

drawing boards and in test tubes.
He should read scientific jour¬
nals

For copies of

Technology,

give investment advice.

He needs to
the

management

Wilbur.

Hoppin Bros. & Co., passed

surveying for
in Gloucester,

and

higher
;

•

dreamed of 50 years ago.

even

from

come

climb

higher.

dol¬

the

de—

c^lne» while the basic wealth of
our nation — barring war — will

Inflation hurts not only the value

President

Abbott,

and

140,000 automobiles compared
with 54,000,000 today. Then there
were
no
radios, televisions, elec¬
tric
refrigerators or stoves, and
only a few chain stores. Over half

what

over

buy

be¬

come

It, however, is only fair to
that the bankers are fighting

19.57/

Opens New Branch

soon

food,
they

now

These

ture.,

WARRENTOWN, Va.

„

bar¬

your

shelter

little

dollars

your

classified

the fishing
industry of
making paving

chief

dollars

your

much

and

have

ers

ness

potentials.

Financial

the
the

draw

you

bank, whether

will

manual and

in¬

commercial

reserve

protect

for

would have when you put them
in is another question. The bank¬

far

larger share of capital invest¬

The

from Oregon

spars

masts

bookkeeper for
Yard,
which

What About the Dow-Jones

ago,

perhaps should attend conventions

arrangements

bringing together the

been

What About Inflation?

When

ac¬

and

the

Back

years

large

reason

that variable cash

suppose

ratios

un¬

savings. Furthermore,
the ravages of
war

your

Think

100 % .desire

and

technological improvements all

companies."

Moreover, there is

equivocal ly
support
their

Roger W. Babson

channel savings. The effective use
of

enforcing

markets

ful changes which will come about
during, the next £0 ,years./.Furthermore, there should be more
"egg-heads" on bank boards of
directors, whose knowledge is not
limited to existing industries.

Fifty

this

line,

wonder^ vanished,

the

of any

expanding economy.

has

these

that

quarters

medium

dominated

thing it is

very

asserted

critical

in
productivity and the resulting im¬
provement in living standards will
not be endangered by inflationary
financing.

ment must be financed outside the

avoid.

■

gains

the

control, the

supposed

required

promised

reserve

inevitably to de¬

the

institu¬

over
the composi¬
and, therefore, would

in fact become
credit

that

legal

control

tion of assets

promote,

savings

impose

requirements

tions would lead

serious

any

order

with

serve

Cape
cape

acquainted

car

Spar

safe¬

upon

investment

achieve

the
is

are

controls

intermediaries

depended

capital

attempt

the

Securities

prescribed

base.
It

only

not

Government

as credit de¬
there will be

strong,

personal

practice,

savings institutions. They and

York, Nov.

mutual

will

impose

actual

1956.1

the

The

participate in
but the competi¬

promising,
for
savings

tion

eco¬

certain.

will

banks

before the Economic Club of New

19,

the

over

world,

clothing,

continued

which

savings
it

for

growth

tary Controls Outmoded?" address

tions

•

The
nomic

cumulation

this technique would not be effec¬

lead¬

bankers

all

lars

mark

The

my-vlarge ac¬
quaint ance

func¬

tions."

pur¬

pose.

leave with

you

Feb. 5 he

special

discussing

which

-him. Based

not presently shared

are

avers

over
banks
by
the
Federal
Reserve
which they have no control, they
however, would represent a basic
and far-reaching departure from will give you back every dollar
Never
the principles
that have in the you deposit with them.
criticize a banker for refusing to
past governed banking legislation
and Federal Reserve policy. Com¬ make a loan.

the

over

reserves

institutions,

specified

regard¬

the

legal

proposed

unique
can increase

reserves

banks.

measure

same

System. The

has

are

protect the

money
„

ring

tive

banks

New

controls
analogous to
applied
to
member

must

aggregate amount of

aim

most

SISSfe %

"A policy of extending to nonbanking institutions a system of

monetary

His

first and fore¬

other financial

deposit.

with

It is

banker for the protection of your

ing

the legal reserve ratio is an effec¬

the

Gloucester, Mass*

safe to trust

Association, Jan. 21, 1957,
N. Y.) 2
In reply to
special question from the Joint

commer¬

by the monetary authori¬

commercial

of the

for

country

was a

York,

Concluding

the

ties. The situation with

the

My father

in¬

banker

respect

Bankers

cial

bankers.

great

New
a

Mr. Babson

past,

ago

electric

tracks'1 have

was

brought great

have

Federal

Bank

the

bankers and investments,.

(See also remarks

Reserve

job

Andrew's

vessels.

Hayes, President of the

Federal

second

BABSON

students

century

the

2£

ripped up and buses provide the
only public transportation. My

Bankers should know what is ahead and not, like
accountants,
'

stitutions has not found favor with
the

half

now

Happily the proposals to extend
controls to savings in¬

Economic Committee

the

very

ROGER

changed
and

im¬
portant question of equity in the
application of legal reserve ratios
to the various types of financial
intermediaries. For example, how
would
the
reserve,
requirement
be
applied: equitably
to
such
Finally,

said:

Mass.

Foiward Looking Bankers to
Render Investment Advice

1951

inauguration
flexible monetary policy.

control purposes, there is no need
time

early

the

for

Conse¬

the

York, before the New York State

explained.

l:iit is

taken

in the control

banks.

monetary

The main

•

quently,

their loans and invest¬

amount of

satisfactorily

commercial

The Proposed Method of Control
The

work

The Hertz

Corporation.

-•213 South Wabash Avenue,

Chicago 4, Illinois.

HERTZ
Rent

car

The Commercial and Financial Chronicle

{1594) ]

The Airlines

Approach the let Age
CURTIS BARKES*

and greatly improved type
of air transportation to commence in two to three years,
according to United executive, involves: (1) 27^jet trans¬

The

air transport

industry's

ports for long-range

new

flights at

investment cost larger than

(3) expectation that passenger volume in 1965 will be doubled
over
1956 and, despite a slowing down in growth-rate, an
increase from two to three out of five of all inter-city passen¬

The cost of air travel today is
be too low, and the view is expressed that a higher
on 1057 costs will permit jets to operate within

believed to

fare based

such fare levels and at
f

ing techniques.

profit.

Practically every airline in the
country has been to the market
for additional capital
within the
past
18 months.
That in itself
provides us
with

com¬

the investment

com¬

basis

of the

use

interest is

these

some¬

nation's

air

■:

feel

projections? ;
comfort and depend¬

service

elapsed westbound flying time

hours from

nine

Los

degree

New

Angeles.

flying

York

v..:<V-

within .six
of
that
time
will

Now,

with

established

was

of the
service,
the
be
reduced

years

Chicago to Los Angelesi—•3:50

States.

'-Chicago
Chicago

Turbine Airplanes for Shorter

have

about is not the
the

billion

Miatni^A-Li.

2:50

6:15
3:50

Washington..-

1:30

2:05

7 Think
discussing

been

half

from

New

being

York

able

4:00

for

newk for

and

dinner

such

can

levels

fare

If price levels go

profit.

air

jets

1957,

then

the price

will

have

travel

Based
per

leave

and, with

p.m.

night's

good

current-day costs, the
cost on a DC-8 jet

seat-mile

transport will fall
der

the

airplane

and

little bit un-"

seat-mile

bit

cost

DC-7

than

higher

DC-6B.
The

breakeven

DC-8

factor

load

jet

airplane for direct
expenses,
based on a

operating
1,000-mile

flight, is 32%.
Com¬
to a DC-7, it is 34%, and
DC-6B, 31%.;:

pared
for

flight,

2,000-mile

breakeven

load

factor

the

is:

30%

DC-8

31%

DC-6B

and

1957 costs,

that

say

over

higher

DC-7

ultimate, but only the time differential, arrive in
of the new era.; San Francisco at 6:40 p.m. in time

beginning

This

and

These

Flights
What

such

within

operated

the

■

years

can

1957

of also regardless of the type of air¬
I've plane being used.

The next reason is speed.
only in 1954 that regularly

was

tal

fare structure based
I

recognize'

they

costs

Assuming

then

was

Fares should be

that

increased

1940.

same as

confident

scheduled non-stop transcontinen-

increased

market

mentioned

the

handle

..*

ability.

the

over

economy

providing /thou¬ by 40%.
/
sands of jobs to bring this new ;
Here are some other typical jet
system into being. There are al¬ schedules:
ready 136,000 employees engaged
,.y;:%;;
Jet; Present
in air transportation in the United Chicago to New York
1:40
2:45

gases

airplane. No commercial jet air¬
plane will be equipped with after¬

20%

Why, do

ex¬

to achieve additional
thrust, and they are very noisy1
things which add considerably to
the overall noise of a military jet:

banking field.
mon

possible out of an
consequently, nearly all
jet engines on military planes are
equipped with afterburners.
An
engine;

haust

interest with

A second

all of the power

afterburner makes

basis

mon

The

will

continue

will

about

develop¬

and

small

not

substantial underpinning beginning

our

jets, take the matter of
several
military jet must get

military
noise.

will

provide

work

this

All

ment

the

will

but

line,

travel.

million

growth

United

training

handled by air.

to be

gers

of
personnel
and
the
development of new rules, regular
lions and procedures, and market¬

;

This

straight

for

more'

reach

what greater in the period 1961 to
1965* than
from
1957
to
1961.

terminal buildings, ..air¬
port improvements, airway traffic
control, and other miscellaneous
equipment needed to make these
giant airplanes into a transporta¬
tion system. All these things must
come along together, including the

turbine-powered planes, and

domestic commercial air lines to

;

hangars,

asset$kand net worth; (2) change-over of 80% of

present

million

hundred

lew

will

number

roughly -1965.

investment

dollar

predict that from the 38 million proximately the
passengers
carried in? 1955, the 1940, is too low.

industry.
:
one-half .billion

and

one

equivalent to 35 Prudential Build¬
ings, which is Chicago's newest
40-story office building. To this
investment you can acid another

Vice-President, United Air Lines, Inc.

This

■*

development

tremendous

the

for

of American

Thursday, April 4, 1957

,29%
load

breakeven

apply

direct

which

show

factors

operating

costs
comparability of

the

the three airplanes.

Therefore,

%
say

can

that

burners, and on the other hand
I960 the fare which the passenger
jet planes now on order is essen-, sleep.'
f.^t
they will be equipped with noise
will
pay
should
be reasonably
tially an investment in big, longOr, depart Chicago at 7:00 a.m.,
suppression devices. Progress in
American is
close to what he would pay on a
range equipment — transconti-? arrive in Francisco at 9:10y spend
the development of these devices
the travelingnental
coast-to-coast ; operations, a'full business day, and be back DC-71 airplane
to
produce the
is quite encouraging.
ost creature
amount
of
profit
to
the
and from the midwest to
either home in Chicago before midnight. same
that
airline.
you
can
coast. But this will most assuredly
%
>
?
/
Flight times such as these, and
Marked Improvements
imagine, and
be followed by smaller turbine- they are entirely realistic, will do
With the substantially greater
Curtis Barkes
As a matter of fact, very few
the jet age
powered airplanes for the inter¬ much to bring increased traffic.
speed, the greater comfort and
people in this country have heard mediate
will have a
length of flight—3, 4 and
What about the cost?
reliability, and
with reasonable
the sound of any commercial jet
fjreat impact on travel habits and
500 miles. We believe that by 1965,
fare levels indicated in terms of
transport,
and only those con¬
will give tremendous impetus to
?
80% of all flying done by domestic'
,; Future Costs
7 '7 the service provided, the prospect
cerned with the development have
the total amount of travel.
commercial
airlines
will
be ; in
First, let me say that the cost for air transportation in the jet
heard jet engines with sound sup¬
'The business and pleasure travel
turbine-powered airplanes. : This of air travel today, which is ap¬ age is truly exciting.
•
pression devices.
We are con¬
of the country is geared to air
means
there will be substantial
fident that the sound created by
transportation.
It is taken for
expansion
in
the shorter
haul
these airplanes will be acceptable
market;
*.'■
granted and is utilized in our
v77 i
to the public.
/■/.
/
day-to-day affairs. But, within the
True, the savings in time oh
What
can
the
passenger
expect
next three years, we are to see
these shorter flights will not be,
Economist stresses importance of product improvement, with
an
entirely new and greatly im¬ to receive for his money when he scf great as on longer trips, but
V
need for intensified research and scientific exploration. Main¬
makes use of this facility that will there are other
advantages whicn
proved type of air transportation
tains high government expenditure and excessive taxation
in
time
will
introduced by the commercial jet soon be available?
bring the turbine
can only be brought about through decentralization, increased
airplane.
;.777^ i What do we mean by new con¬ airplanes into these areas; Such
First, I would like to discuss cept of comfort in travel? There things' as comfort? composed t of
government efficiency, and cessation of social schemes. —
briefly the nature of this amaz¬ is an entire absence of vibration elements like absence of vibration,
from piston engines, together with noise level, space to move around,
ing creature of man's inventive¬
v MILWAUKEE, Wis.—The pause process engineers, whose job it is
ness.
The conception which most the
cushioning effect of swept and air conditioning. Reliability in industrial volume on a high to increase output per manhour.
"Thus it is expected that in the
people today have of a jet air¬ back wings. There is no feeling of and economy, as well as speed,:, plateau suggests that added pro¬
bring the
transition
from ductive capacity has for the time coming two decades the popula-;
plane is based on their familiarity speed once you are in the air. In¬ will
side
the
with military flying.
lation of the country will increase
cabin, size and spacious¬ piston power to the smooth flow being caught
of
ness are the first things that will
jet power
in these
shorter up
by 60 millions, or 40%.. But be¬
with
deDistinguishes Between cWil and
impress you and will make pos¬ lengths of flight.
cause
of increased ratios of the
m a n d
f o r
that

the

fact

the

average

•

Productive Capacity

Military
The

Jets

sible

military
and

weapon

that

mind

jet airplane is a
we
should keep in

there

fundamental

military

are

some

differences

and

very

between

commercial

a great flexibility of interior
configuration. N e w, interesting
interior
layouts,
together
witn
modern
color
and
lighting will
catch the passenger's eye.

tainable, and the speeds achieved

•What do we see ahead that will

Cabin

pressurization

and

feres

performance

create

disregarded.

the travel market.

that

Such

task

best

must

things

comfort,

operation, and ground handling
problems become secondary.
The

commercial

developed

jet

has

been

entirely different
concept; but still using, of course,
the same basic engineering prin¬
ciples as the military plane, it is
an airplane that is to be a servant
of the public.
The considerations
which

come

pay load,

which

forefront

speed, and range;
be

must

comfort,

the

all of

achieved

and

economy

are

with

passenger

appeal, for if these things

are

not

present, it cannot succeed.
The

commercial

for

had

select

those

elements

emphasis which will make the
success.

Much

of the pioneering is done
by the military, but it is far the
air
transport industry to adapt
accommodate

ities

these

commercial

possioilusage
and

example of this different

approach between commercial and
*An

Central
ers

address

States

28,

Mr. Barkes

Group,

Association

March

for

the

speed
for

before

tKe

Investment Bank¬
America,
Chicago,

1937.

for

be im¬
relative sim¬

Since headwinds

are

air

percentage

the

jet transport than
present-day aircraft, delays

due to abnormal headwind condi¬
tions

should

Weather

greatly

forecasts

points at

time

shorter

for

reduced.

destination

will

arrival

accurate

because

be
the

period of time
the forecast.

Orders
The

air

for

275

transport

staked its future

encom¬

275

their

senting

these
a

cost

about

$1.5

spare

parts

supply
a

industry
the

the

impor¬
have

for

about

airplanes,
repre¬
the airlines of

including

initially

the

needed

storerooms
in

has

jet trans¬
an

books

billion,

fleet

investment?

revenue

the

were

forecasting

domestic
22.5

operation.

keep
This is

doubling in volume

down

about

20%

five
per

the

years

rate

per

worthy

of the

worth

undertaking

$650

and fore¬
sight which has been responsible
courage

growth from

for

year

rate

the

past

about

for the next nine years.

year

40%, or
intercity

two

out

five
passengers
handled
by
all common carriers. By 1965 we
forecast

that

five

all

three

intercity

will be handled in

Some forecasts
than

this.

and

every

passengers

the air.

a
bit higher
example, the CAA
by 1965 the vcluir.e

are

For

predict that
would

every

out

somewhere

billion.

The

billion.

net

are

by 1965, or a nine-year
period. This represents a slowing

lion 'and

has

1956

over

impressive total for an indus¬
try with assets of about $1.3 bil¬

This

over

business

years.

that estimate would

million.

That

increase,

The

five

airlines

billion.

100%

1951.

year

doubled

miles

passenger

year

represents

compared with

our

between

mid-point

be 49

billion,

estimate of 45

The port of New York Authority

made
the

air

analysis
travel

Merryle

Stanley
R

keyser,

n a

t i

and

market,

forecast
-

and

they

work

ally

o n

syndic ated

will

force

riod

increase

the

same

pe¬

only by 20%, and,
shortening of the work¬

economic

col-

with

umnist

and

business

con¬

week, the actual number of hours
worked' will
increase
only
by

sultant,

point of reference,- we can
the year 1956. The number

handled

last

Pay?

take
of

This will give an annual volume

Manufacturers

one.

orders

support such

of about 45 billion RPM's by 1865.
In
1956
the
airlines
handled

Airplanes

port, and that stake is
tant

will

the

lower

Will

too,
to

jet.

much

such

benefit.
As

due

impetus

plicity of the jet engine compared
to the piston engine, and schedule
dependability will be another plus

program

undertaking an economic

and

Reliability,
proved.

will

convenience

tremendous

air

passed-by

has
benefited tremendously from the
vast military experience in this
field, but the commercial concept
has

schedule

and

economy

involved in this sort of

are

best ob¬

air¬

conditioning will be the

the

services.

•?'

.•

With the financial commitments

which

population among senior retired
citizens, on the one hand, and
young men and'women in schools
and colleges, on the other, it has
been widely estin.ated
that the

expect in the way goods and

market?

undertaking, an understanding
of the anticipated market is ob¬
viously quite important:
'

planes. As a weapon Ihe military
airplane has a specific task to per¬
form, and anything that inter¬
with

What do
of

Equal lo Demand: Rukeyser

view at

watts

Merryle S. Rukeyser

strialists

March

held

Koehring

Wisconsm

the

auspices

the

under

Club

Lie

"With shortages

overcome," Mr.

Rukeyser, who is author of "Fi¬
nancial Security
in a Changing

motivation
for buying consumer goods is im¬
provement in product, and this in
turn
depends
on
research ard
scientific
exploratory
activities.
In addition, volume hinges on the
World" said, "the new

index

confidence

business

in turn provide
through
ordering
capital goods—tools of pro¬

who

executives,

employment
new

There

duction.

has

been

indicators.

momentary

"Despite
term

against

race

factors.

pauses,

management is in a long

inflationary

Inflation, which depreci¬

ates

the

has

been,

buying power of money,
to

degree,

offset

improved efficiency in production
and better power-driven tools of

production.
ades,

For the next two dec¬

expected

population

trends

will make heavy demands on

the

design,
and
improved
tools of production.*
challenge that faces

labor-aiding
This

the

of heavy

gooas

—

tools of

and sources of me¬
chanical energy in the com ng two
production

—

decades.

long

presages

term

growth in capital goods.
"With

pause

national

the

tinuance

prices
for

and

hesitation in

economy,

inflation

—

the
or

con¬

rising

tends to te an argument

—

buying

ing.

now,

rather than wait¬

But in this area too business

executives, investors and consum¬
ers
are
seeking to visualize the
next

some

leveling off in the basic statistical

creative

dustrial

makers

Company.

are

American people
rely
increasingly on kilo¬
of electricity, on better in¬

will

a con-,

expectations

these

the

fulfilled,

ference of i id

10%.

ex¬

pressed this

phase in the economic cycle."
Inflation

"In

Under Control

appraising inflationary.

trends, it should be borne in mind
that the conventional causes of in¬
flation

appear

under con¬

Budgetary deficits have been
eliminated, and the Federal Re¬

trol.

System has been vigilant in
seeking to restrict excessive use
of private credit.
The pressures,

serve

however,
costs

and

for

higher

hence

industrial

higher

selling

prices stem from the fashion of an
annual

round

wage

rate

in-

V.olume

Number 5626

185

;

The Commercial and Financial Chronicle

the impact1 of high
growing oat of the pe^k

and

creases

taxation

cost of government..,

Taxej

will have far less overhead to

ar<; re¬

holders.

This- Week

•

excessive
taxation < requires
bringing, governmental
expend¬
itures under control.
While tne

IRVING

cold

ized in

tralization, that is, returning from
Washington to the states, the lo¬
and
private
enterprise,
those -• activities
which- they are
able and willing to undertake, and
through introduction of greater

calities

of its operating

Irving Trust Company-traces its origin to two banks organ¬
1851, Irving Bank and New York Exchange Bank. Both
subsequently took national charters.
Jn 1907 they consolidated
under the title Irving Exchange National Bank.
Through natural
growth and union with other banks, prominent among which were

32%

$262,000,000. In that

trust

charter

was

then relinquished and

granted to Columbia Trust.
tal funds

In
"

Investment

Iru 1926 American Exchange and

Pa¬

the

were

bank's

office at

main

new

widely held in institutional

One

Wall

Street

calling for courageous »confrontation of inflation. Mr.
Schlesinger assures labor they will be hit "just as hard as
everyone else" in the event of runaway inflation.

was

occupied; and at present there are:ten branches.' Irving conducts
a
general banking and trust business.
It is the country's 15th
There are approximately 48,000 stockholders.
v

Counsel,, New York City

New York investment counselor rejects any
temporizing action

merged with Irving, which brought capi¬
$60,000,000 and deposits to $628,000,000. V

1931

The stock

By EDWIN J. SCHLESINGER

Irving continued

under the special state charter that had been

company

cific National Bank

Facing Up to Inflation Threat

Irving and Columbia Trust merged.

year

major bank.

reserve, which at the end of 1956 stood
debt" reserve was close to
$10,000,000.

National Bank in 1912 and'Lincoln National Bank in
1920, Irving's capital funds reached $28,000,000 in 1923, with depos¬

its of

earnings was disbursed to the share¬
approximately 5.2% at the present price of
unusually attractive one for a conservatively

Irving's security losses and profits go into the bank's general
at $2,371,000.
The "bad

•

The national

'f*
-

accounts.

Mercantile

efficiency into government. Like¬
wise, the soundness of cenlinuing
pump-priming economic and so¬
cial schemes, cooked
up as de¬
pression, palliatives, should
challenged during a boom."
:

about

Bank Stocks

—

TRUST COMPANY

The yield of

operated

lasts, this can be done
such surgery as decen¬

war

only 66%

By ARTHUR B. WALLACE

Correction

net income after taxes.

than will the banks with, the

cover

widespread ldrge systems.
/
There is a long unbroken dividend record of 51
years.
The
stock is selling at present at about 12.8 timee 1956
operating earn¬
ings. In that year it earned 10.0% on its year-end book value, and

Bank and Insurance Stocks

garded as a business cost, and cor¬
porations, like individuals, try to
results in the
budget financial
form of 'take home' pay, that is,

only

(1595)> 23

largest bank.

Statement

Condition

December

1956

31,

•■-"y."':4- ASSESS
Cash

11945872360954807

Stock in

Mortgages

J"_l

■;

;'.t

___<

c-ial

Customers'

section

Department of
Labor—Superintendent of Doc-

Washington

uments,

—55c.

Our

•; ;

Future

Avenue,

New

York

Y.—30c.

V^.

Patterns of Farm Financial
-

ture

Donald

—

States, Canada,
McNally &

Company, P. O. Box 7600, Chi¬
cago 80, 111.—$1.75.
'
Steel •;Facts

1954-1956—American

Iron

and

East

42nd

Steel

Institute, "150

;

port

Congress—U.

mation; Agency,
D.

•

S. I Infor¬

Renewal

Administration, Hous-

1954

ing and Home, Finance Agency,
Washington 25, D. C.

Visutac

—

Bulletin

instruments

for

ment

describing two
speed

Corporation,

/North

Pelham,

(on

partment

1950-55—U.

De¬

Labor, Bureau of
Labor Statistics, 341 Ninth Ave¬
nue,. New
York 1, N. Y.—On
request.

Western

•

Area

ference
.

—

Development Con¬

Proceedings

conference

annual

—

third

Stanford

Research

Institute, Menlo Park,
Calif.—(paper)—$5.

Workable

Programs
for
Small
Communities and
Rural
Non-

Farm

Areas

small

—

Circular

communities

plan

action

aid

develop

el'.minale

blight areas—Superintendent of
Documents, U. S. Government

Printing Office, Washington 25,
-

C—5c.

Working
Vol.

Press

the

Nation

—

Newspaper and Allied
Service Directory: Vol. 2, Mag,

azine
Vol.
—

and

Editorial

Directory;
3, Radio and TV Directory

National

Research

Bureau

Inc., 415 North Dearborn Street,
Chicago 10, 111.—$25 par vol¬
ume;

three directories

sat,

$49 50.

—

ciation
East

48th

Manufacturers,

Street, New York 17,

Y.—(Paper;—On request.

;

■./

■

Up to 5

r> to lo

Years

Maturities

Over 10

Years

•

1950

—

v'7
10

;

;-v-

Up to 5

r> to 10

Years

■

9%'
•'

•

Over

Years

On Loans and

Mortgages

Governments

some

put

can

catch,

each

they

and

segment
at

*28

1956

*28

get out of hand,

happens.

Let

1.96

1954—

3.35

2.48

1955....

3.61

2.77

4.04

3.24

1956—.

increase

period of about 43%;

the

rate

earned

loans

governments nearly 63%. .With

IrVing's

government

bond

rates.

Statistical

Record

Book

Operating

Invested

Value

Earnings

Assets

—

Per

that

scorched

Dividend

inflation

Low

$22.90

$1.26

$176

$0.80

18%

14%

23.29

1.36

170

0.80

16%

14%

23.60

1.38

173

0 90

17%

14%

23.52

1.48

190

1.00

19%

16%

23.91

1.55

198

1.00

22%

24.28

1.63

23%

20%

24.50

1.73

217

1.15

24%

20%

24.84

.,1.30

.239

1.30

29%

22%

25.29

2.20

244

1.40

32%

25.53

2.56

260

1.70

214

1.10

burned.

Know

today

ca¬

ants, economists and financial peo¬

it must have long
since been apparent that, if wages
are increased faster than
produc¬
to

whom

for

organized

hit them

runaway

just

value

increased

about

10%;

operating

earnings 90%; invested assets some 45%; dividend 1}2%.

large New York City banks

increases that Irving Trust

preciation record has been

Irving, with

can

excellent

have had

Indeed,

the record of

boast; and the price ap¬

one,

too.

York banks that have

developed branch outlets, is in

tion if adver^fgeneral business

will

inflation

strong posi¬

conditions hit the economy/for it

hard

as everyone

how

Co.

of INDIA,
to

they

secure

He had

years.

become

asso¬

ciated

with

firm

the

1922, becom¬
ing a partner

the

Government

the

dent

in 1929.

Fleek

Mr.

Association

was

Investment

Presi¬

Bankers

of America.

Two With Cobum
>

(Special to The Financial Chronicle)

HARTFORD, Conn. —James J.
Rooney and Paul B. Curran have
affiliated with

Trumbull

the

Cobum &

Incorporated,

Middlebrook,

Mr.

Street.

100

Rooney

with W. R. Bull &

past was

Co.

With Thenebe

Two

(Special to The Financial Chronicle)

HARTFORD, Conn.—Robert W.

have

Pearl

Baxer

connected

become

Charles
36

Leonard

and

Agnew

Thenebe

Street.

Mr.

with

Associates,
Agnew waj

Christiana

Securities Co.

C. 2.

(London)

End

Fleek

1942

LIMITED

Office:

London,

John

previously with Putnam & Co.

Colony and Uganda
26 Bishopsgate,

Kenya
Head

Cleve¬

BANK

NATIONAL
Bankers

Hay-

land for many

be just as
labor as for

feel at the moment.

Branch

New

Our

Bulletin

Available

13, St. James's Square, S. W. 1.

Ceylon,
Burma, Aden, Kenya, Tanganyika.
Uganda, Zanzibar, and Somali-

Branches

India,

land

Pakistan,

Protectorate.

Authorized

£4,562,500

Paid-Up

£2.851,562

Reserve

relatively small branch system among the New

else, regardless of
may

part¬

den, Miller &

animosity toward organized la¬

that

year

ner

It would be no act

anybody else.
of

had been

senior

tivity. the future will
dim

his

about
ago,

become

has

pable staffs of attorneys, account¬
ple

of 63..
Fleek,

age

prior

been

have

badly

labor

Organized

West

book

March 28th at the

passed

to be

Range~

High

FJeek

better

appears

they

Will

Labor

lish

-Price

Sherwood

retire ment

of our smug fel¬
find that the rug
pulled out from under

and

••

pre¬

bor to state in unmistakable Eng¬

the

away

many

2.67

there has been

them

Governments

3.48

been

either

.Mortgages

telling what will

seem?

1955, it is easy to under¬
why there are so many peo¬
it out that
they are sitting pretty regardless

has

tho

John Sherwood Fleek

who have figured

what

•

John

in¬

least

1955_

1953____

1.97

decade

now,: there is no

happen.

throwing to

are

indefi¬

so,

situation is not faced courageously

by so large a
population since

the

*30

On Loans and

temporize

inflation,

made

I 'V ,'

with

other.--

1954 _j—

cannot

Viewing the. situation in the
light of the huge sums of money

ple

2.00"

2.09

this

so that they
examine the

hold and

hot potatoes

2.16%

2.80

Ten-Year

keep prices in line.

Adminis¬

had

Congress
asbestos gloves

de¬

(4) do everything possible
productivity increases
rapidly than wages; and (5)

should

ever

the

and

1952—.1/3.31%

3.07

tration

1853-J

portfolio in
maturities below five years in recent calendar years, the bank has
been in a favorable position to replace maturing paper at rising

few

the

galloping

was

both

stand

1951

nitely should,

29%

2.65'

three-quarters

move

supply and

If the budget
is going to be reduced as it defi¬

71%

1.99%

2.12%
2.39

how

19521—

schedule showing the average rate of return

debt;

that

see

low citizens may

governments:

law

the

sented to Congress.

earned

years.

1949—

this

"2.5

budget of $71.8 billion

doing, and
or

loans and

nearly

LV"''-../

84%

Thus

,.u., .'i ,ji;

''
r? v'-t'

* i-'

•>„-

dividend

Your Opportunities in Industry as
a
Technician
National Asso¬

V''

1949____

in 5

t'-lJ-'

•

re-

quest).

Industries,

■'

There follows a

Wage Disnersion in Manufacturing
-

45.3

holdings1; of Irving/Trust into principal maturity cate¬

*Due

Instru¬

First St.,

1948

19511

accurate

measurement -—Bouiin

Loans and Discount-

following schedule-will show the distribution of govern¬

bond

1947.

Urvan

—

With

M,r.

understand

••

its

national

nearly incredible and it is hard to

follows:

principal categories

started

the

(3) permit interest rates to
,

'nto effect ill

Schlesinger

flation

24.6

(2) follow this by

course.

127,630,575

gories for the past ten calendar years:-;t

Demonstrations

Act

Edwin

figure;

reduction

very

1955 when

22,630,575

token

have been put

6,279,451

$1,729,971,740

The

Authorized by Section 314 of the

Housing

Profits

—„___—

ment

Washington 25,

Renewal

the

duce

stantial amount and not just by a

about, nitely

which

XL'S. Govt. Obligations.23.1 Mtges and Banking Houses
Other Securities.—^—____ '2.3' Miscellaneous Assets

C.—(paper).

Urban
-

Cash

Street, New York 17,
N. Y.:(paper).
-

V. S. Information Agency—7th re¬

"_ 1

A breakdown of these assets into

steps,

55,000,000

_____

Undivided

we seem

necessa r

13,867,871
2,500,000
40,523,458

-$50,000,000

Surplus

Mexico—Rand

'and

____!_

Capital

Princeton- University
Press,;
J Princeton, N.»J.—cloth—$4.50. ;
Road Atlas, United

Net

.how¬

that

measures

consider taking, (1) re¬
budget by a very sub¬

gress may

Of in--.

case

certain

In; mand;

taking

Payable_______x—__ul_____

Acceptances,

—

the

punish

timid

Other Liabilities_i___^_^_________

Struc-

Horton

but

are

both the Administration and Con¬

can

ourselves

ever,

$1,729,971,740

Other Expenses-..;

Dividends

steps not

the

ii _Jj______$T,539,170,385

Taxes and

•••;

take

flation,

6.300.718

liabilities

Deposits

;

aggressor.

37,715,632

ate,

;.;

•

1955-65—

Department of Labor, 341

Ninth
;

Manpower
S

25,

Acceptances

20,719,383
16,648,727

Accrued Interest and Other Assets____

"Monthly Labor

?' Review"—U.; S.
^

Liabilities

There

threat

only to protect

36,664.884
784,944.420

Banking Houses- --!,

Labor Force—Spe-/

greatest

Banks$425,457,465
Obligations.398,370,511
3,150,000

—and"Discounts/r^____vZ;__-_-l-

Loans

England

the

Federal Reserve Bank.J___j

Secunties_av----_l-.--C--

Other

and Due from

U. S.- Government

New

-Inflation

confronting America today, even
outweighing the possibility of war
with Russia.
Should war eventu¬

Capital
Capital

Members

New York Stock Exchange

Members

American

120

business.
Trusteeships and Executorships
and

also

exchange

undertaken

Telephone:

Bell

(L.

Stock Exchange

BROADWAY, NEW YORK 5, N. Y.

Fund-.

The Bank conducts every description

banking

Laird, Bissell & Meeds

BArclay

Teletype—NY

Glbbs,

7-3500

1-1248-49

Manager Trading Dept.)

Specialists

Bank Stocks

The Commercial and Financial

(1590)

Chronicle

Thursday, April'4, $957

' '

less

Steel Industry's Key Role in
Nnclear Energy Development
Steel

Lukens

that

But

and

based

Commercial Development,

Company

According to Lukens' economic studies, Mr. Butler points out,
1984 world steel capacity will increase to 625 million tons as

with U. S. A.
producing 40% of this, due to the prospects opened up by
nuclear power.
Author believes the two-fold challenge of
financing added steel capacity and obtaining metallic supply
against

326 million tons

present

will be met in order to make

only
possibilities
with
nuclear fuels. There is, in addition, a brilliant future for nuclear-

outlines

made

steel.

Basically, the steel 1 n d u s t r y
home

the

confident

its

ieels

and

era
a

industry

supporting

key

atomic

future

the

development
of nuclear

en-

ergy.
We
as

view

new

mar-

truly

ket

marvelous po-

aSP

tential;
a
technological
advance

which
thrust

has

certain

heavy

plate,

cover

dropped

such

the

were
accidentsilly
it
bucn
potential

hoards
et^ed because o the
need to disassemble the reactor at

producing

electric

nuclear fuels

kilowatt

per

■■

mass,

The

with

concern as to whether a nuc.ear
reactor could withstand the lma

States, the
brisk. It has

matter of simple eco-

is only

than

power

2 mills

the

cost

producing it with fossil fuels.
in
In other
otner parts of
oi the
tne world, es-

pecially

those

economically

nations

that

underdeveloped

are

and

poor
in
power
resources,
atomic energy will unquestionably
be the cheapest method of pro-

ducing

electrical

of these

many

And

energy.

so-called

"back-

ward" nations can boast absolutely
regular intervals for refueling.
first-rate scientists of their own
This not being necessary with
t0
was
speed
the
day>
It
the conventional power plant scientist from India, remember,
boiler, it was a new problem. A wh0
startled
delegates
to
the

strength

high

new

steel,

alloy

^T-V'
three times, as ^trong^as
carbon steel was finally
chosen.
Used

the

for

support

hold-

and

down structure, it provided the so

Contrencefn

Geneva

These

1955

with

the

be available from controlled fusion
of the light elements within the

years

subject

—

lution because ot its resistance to rounded by the utmost
challenges up-..and ductility-under shock loading, the Western'World.
on
the
steel
Comparable examples abound.
This exoected

III

Butler,

But

They serve to show mat as the in-

energy

steel has faced

dustries developing nuclear power

power

both

chal-

other

lenges in

the

past,
fully.

met them

the

ample,
coal

past

the

steel has

and
r

for

years,

industries

that

ex-

lace

problems,

new

in-

steel

the

developing new steels
fabricating techniques;
required to solve them.
dustry is
and new

With this necessary background

burn

secrecy

holds
for

for

source

home

certain

clear

steel

industry

the

and

abroad

implications

steels, special
properties

What
be

were

Ze,rhe
de,lg"S
steels
there. POSSlble-

The

were

In the past 20 years, too, the
chemical, petroleum and other industries developed
products and

.■«

creating critical

processes

sion

problems for which

nomical

The

answers

steel

provide
but

corroeco-

known,

were

industry has helped to

not

merely one answer,
variety of answers, giving

these

industries

choice

great freedom of
designing their equip-

AWO ruiuIC

rnent.

yieios

seems

power,

needing

stantly

world

Now

the

-ltomir

But

using

power

alonl developing
'

and

esses

thlco

nroc!

new

Hemnndinf

make these processes

hue

tr,

g jfuf

possible, and
economically feasible. Like these

nirfpr^Vn"rtn«VpiPcTAo*iVAw^'t^T,e^

with

try is faced

temDerature and

pressure
p
problems
ra>uiepxowems.

with

corrosion

why

home

is also
also

problems.

steel

the

It
li

say

raced
faced

Thats

feel

challenge''

example that

Steel

closely

concerned

vessel

of the

pany's

the

Company

the

with

housing

steel

industry

re-

atomic

medicine,

and

even

where

radio-

seems likely to contribute
to Quality
quality control, v

"plant

power

atomS)
that

the

support

hold

safety

them,

for

the

and

structures

provide

people

who

use

believe

our li£etimesWhatever they are, however, it

nrndL!Lth^aan^°n,e

^ eight
^
producing clad steel over
rnches
thick, involved problems
far

beyonu simply doubling prebro uced thicknesses. I'he

L lm!!?.!
dT?
S0.
k
lot
ow

than

n?.v!'
did

e*
_

The Argonne National Laboratory in Lemont, 111., provides another example.
As reported by

two

its
..

electric

members,

there

was

Atomicr<E^ergy

States, it is esti-

re-

Vationai

Philadelphia,

create

increased

the
r,,oi

plants where the mined

nhvinn«lv

rreatA

do know that the

right

handling

harnessing of nuclear power
now requires specialty types
alloys such as solid stain-

of steel

stainless-clad

iess,

high-strength
a]so
are

alloy

know

that

helping

designs

and

iurgists

steels,

and

steels.

Metal-

reactors.

testing, analyzing, and

are

allovs

new

fourth; the growth ot nuclear^^delectiic power will create

nuclear reactors increases.
Fifth, but actually the result of
the first four, development of nuclear power inevitably will increase world demand for steel,

generators,

turbines,

heat

ex-

changers, transmission equipment,

wire, machines, tools
countless

others

all

—

limited

homes

sales

each

new

oeonle

its

and
of

anything

total

While

elec-

terms

how

States

year

produces

40%

327
the

With the prospects opened

by nuclear power, world capacity

gas and

'
we Can
produce
trl^aI energy by using fossil
u

by 1984 will have reached 625
elec- million tons according to Lukens
fuels economic studies. In this growth,

a"d water power far more cheaply despite the probable development
^ atomic energy at Qf steel-making facilities in na-

)L?n. we can
*»

pbyiw^y.

tions that had little
mqans

can spend more time in
with

experimental

that

none

be-

terms

much

billion

of
w

Scni.t

Jvi.

since

Kuhn, Loeb

Co.,

13,

vtu

1932,

chairman

who

director

Oct,

M..tc

resigned

partner

continuously

Pennroad
runiuidu

v
II. H. Rhoads Opens
(Special to the financial chronicle)
BEVERLY

Homer H.

fices
fices

in-

in
in

Calif,

HILLS,

Rhoads has opened

the City National

of-

Bank

business.

only

With

the

steel

industry

one-fifth

McGinty, Edman

(Special to The Financial Chronicle)

the

jt'

billion

isn>t

MrGintv

^Edma", Government Employee,
g*

adequate financing

But

(Special to the financial chronicle)

much

have

not

the only challenge. Equally senous is the problem of metallics

supply, that is

insuring an adequate supply of the raw materials

^NVER. Colo.-Gerald J.

Ashby> Ray G- Miller, Elmer W.

Mintken, Thatcher L. Shaw, Theodore T' Smith and Robert W"
Vorhes

The steel industry is dependent
two

sources—pig iron an^ steel

used

steel

production

was

Metallic

Supply

is not encouraging, how-

Let

"Report

With

Iron and Steel Scrap"

Banking Currency,

States Sees.

DENVER,

Colo.

and

Wayne

—

Thomas

11^1* T""

Nieman

^Cor^omtion

aye^

Buildfn« ^otl^

ciub

were

Denver Club Buiidin0. Both uere
with Colorado Manage¬
Corp.

the

W. R. Plankinton Adds
(Special to The Financial Chronicle)

calculated

the

rate

heavy

of additions

melting

Kinney
staff

this,

shall

have

look increasingly to pig iron
therefore, iron ore.
Present supplies of high-grade
iron ore are diminishing. Imports
increasing. As a result, a great
deal of work is being done to utilare

ores.

This,

is the challenge.
the prospect of having
sence,

Rather,

grade

and

the

blast

need

made far

solve
more

added to the
R.
Plankinton,

Bradway.

Bernard, Winkler Admits
On

April

these

11,

Bernard

.will

partner

Co.,

Wall

Isabell

become

city>

Street,

New

Excnantoe.
,

,I7.

Winslow,
As of

v^onu 1

axtner

April 4th Ivan Pouschine

becomes
&

partner

Stetson,

Winslow,

Broadway,

York

City, members

New

York

Stock

p__rrta

transporting
and

away.

the

The

problems

urgent because of

York

Exchan-e"

New

ore

Magor
limited

Winkler &
New York

Bernard,

members of the

stock

Cohu

It is not
no

furnace

steel mill from farther
to

es-

it is the problem of
efficiency of low-

ores

the

increasing

Walter

South

and

low-grade

___

been

has

scrap

reservoir."
of

DENVER, Colo.—Ralph M. Mc-

for

heavy-melting

ores

Mt.

Morrison

1637

obsolete
grades in the

"Requirements

all.

In-

High

(Special to The Financial Chronicle)

quote from a recent

made by the Department of Commerce
for the House Committee

Allen

Mile

Center.

ment

outlook for future supplies

of scrap
ever.

with

now

Company,

formerly

scrap.

The

are

vestment

basic to steeh manufacture.

ize

staff

steel

InTof
course' to^se thlt yeaFs
» Drofits would
left noth°;alf^°the neoDt who invest-d
fn letl Purities

the

Government Employees

With Allen Inv. Co.
added

ioined

& Edman

industry

automobile

our

capacity,

250 million tons.

George

useg

to hold its place with 40% of that
or

Schiff

Bovenizer, al¬

would

the

half

only

steel

working
than

Mr.

succeeds

added
.

construction

our

fore, the United States is expected

reactors

ington,. Del.

is.

stockholders,

only

annual

held in Wilm¬

jonn

and

the

per

The

Building
Building to engage in a securities

Because

tons

have

steel

boom.

capacity is estimated at

canninS industry currently uses,
FAIRFIELD, Calif.—Landon M.
or ahalf tha steel our railroads Exley and E^,win R. Grantham
need, or only one-quarter of the

American industry, including steel,
will share in this world-wide

steel

di¬

Corporation

2'S%; The added capacity would

supply

D g 6 n

Pennroad

Present capacity

crease

rector

chal-

capacity that could be bought
it,
it, a
a billion
billion dollars
dollars simply
simply

are

world

elected

company

be
po-

;

Challenge

certain

time,

marvelous

lnvestn*ent banking firm of Kuhn,

adct^d steel capacity, an in-

exedss

present

the

served

future

the

quality steels will

and

realized.
-

ereasingly costly matter. In 955,
profits in the American steel industry were slightly in excess of
billion. This sounds like a lot
money.

SchifF Director
T
.
,,
"...
Jo"n M. Schiff, a partner in the

needed.

and

Future Steel Demand

tential

future

challenge is financ

pos-

supplied,

and

pace

Financing
Part of this

We believe the problems will be

solved, the

lenge o£ the atomlc age' And not
available

and

amounts

materials,

raw

to tne pace and cnai

steel

sufficient

meeting

total

the

doubt that

this this.

limited

known resources of oil,
f°-a

Sener3ted
m
we
have

P°w^r

country.

amount

that

supplying

time to the prob¬

gearing

„XaH0ns
operations

urgent the

expansion

Managements, too, are devoting
lem

solve problems of financ¬

adequate

studvine

nroiecting

the 20th Century have made

United

the

build industrial plants,
transportation equipment

It will require

It will also make

ing

said

steels of higher quality,

need to

the

market of marvel-

new

potential.

ous

is,

Marketing
are

XfonfteeTdemanl
more

power

development in nuclear

and

energv

;

ii a s

annlications

and

these

—

nuclear

bring their costs down in

certain

en-1

nuclear
•

develop
t0

esses

using steel.

non-existent

sible. And there is

million

even

•

■

industry.

earlier,

people
materials

develop

for

steel

technical

rjpvolooinj?
develooing

then

needs,

"teel u,pd inr^rtnrpnncf^^tfnn
ste®J"s®d ^ reactor construction.

time.

Conference

will

ores are processed for subsequent
otnm■
^

producing over 2.4
million kilowatts of electricity in
^970. But that will be less than

pth

United

m?ted
tbatK nuclear-fuelled
actors will be

industrial Conference Board,
March I5« i#5?.

power.

In the

know more

processi

and

Shippingport, Pa., required stain- seems certain that they will not
steel
up
to 8%
incnes he anywhere near the amounts of
thick to meet the
specifications— £teel that will be needed for the
a thickness never
before required ^rst
result of atom splitting I
by industry. There is an art to mentioned — the production of
we

ll is imP°ssible to predict the
In turn, the increased availaddltl0nal tonnages the steel in- ability of nuclear-fuelled electric
dustry wl11 Produce to meet the power will expand demand for
d^™ands °t.pthese new markets steel in world markets hitherto

producing clad steel plates, and

impossible

wanting to know

radioactive materials, steel will be nity to grow. To capitalize on scrap. In the United States last
needed to house these Peaceful nuclea^ energy* they will need year, roughly 46% of the metallics

less-clad

Lukens

„ ra

Second

The nations of the world hitherto
In every instance, in these fields underdeveloped and poor in power
and
every
other
that
employs resources will have an opportu-

Ligh^Com- within

Duquesne

nuclear

verv

the

th3

are

processing,

ways

activity

them.

Lukens
actor

food

condi-

of these changes will

course,

_tppl<1,IQ"Vwith
n't much.
of
ni„m
thrfri,isn>t
muchot uranmm dnd thorium
Actually,
fn„ thp

research,

atomic age.
take

basic

of
It's

and

ith

its reserves of
the fossil fuels, oil, gas and coal. m in* fecovery and sate disposal
The second path is the utiliza- of radioactive waste materials.
tion of the by-product of atomic ™ ? will become an increasingly
fission, radioactive isotopes, in a critical problem as the number ot
in

inducts

open

constantly
and
eon-

steadily growing number of

come

core

fission

iwo distinct paths for further development within our litetimes.
One is the harnessing ot atomic
energy to produce power, electric

Challenges to Steel

ftarton'v1elds%eemfVopen

Ws
tnis

demand

constrnrtinn

■In broad terms, the splitting of

the key to mak-

special

racing results before placing bets,

inrrpp^d

demand for the steels used in

quality

with

meet special

some

is,

know.

steel

...

These, in brief, seem to be the
implications of the develop-

and

But in

Implications for Steel

pressures to get greater efficiency.
Steels oi extraordinary thickness
and

steels

tions.

-7

development

ment

produce better and better

upon to

electric

the

ergy.

does

dustry will increasingly be called

mininff

power

course,

what

chief

sur-

established, we can now come to
have been designing new equip- grips with the question of what
ment calling for higher and still
will be the role of steel in the
higher operating temperatures and atomic future.
electric

generate

But

ton.

certain is that the steel in-

seem

growth of nuclear

William

last

h^pr^tic^_th^mlk'e^rfthaWnSugh^teel

technological

industry.

estimates, of

are

and not guaranteed to be accurate

Today,

British, for example,
have estimated that right now the

pact if

United

will be far

cost

the

be. It's

nomics.

different

five

transportation.

nuclear-powered sea vessels are a
Nuclear-powered trains and
planes seem likely. Automobiles
are a possibility.

key supporting

as a

power

ial.

pace

.7,

the

Outside

development of nuclear energy, the writer
types of demands expected to be

the

industry to

enough steel is available

sure

In showing steel's future

it is needed.

capacity,

States

nuclear energy.

electrical

powered
I

United

certain

long-range plans will be

upon

But

it is

so,

the

nations

even

the

part

By WILLIAM BUTLER, III*
Assistant to Director of Market and

fortunate

world.

the

Exchange,
Pr*tVic^V»iIrl

®
• G.
F.
Rothschild & Co., New York; in-,
vestment
firm,
passed
away
March 25 at the age of 51.

George

Rothschild,

Volume

Number 5626

185

The Commercial and Financial Chronicle

(1597)

The

strengthening of the schools more valuable with the help; of
fundamentally a community- on-the-job training. The employer
problem;';; The Federal Govern¬ who determines his future skill
ment, VhoweverjV again
can
be requirements and, then institutes
is

Revlon Common Stock

Training and Not By Chance ^counted/upon

for assistance. As training programs to equip his
Reynolds & Co. headed an un¬
know, President Eisenhower employees to fill those require¬
has
asked
Congress to provide ments inevitably strengthens his derwriting group offering publicly
on
Federal funds to aid in school con¬ business,
April 2 a total of 241,020 shares
' !you

By HON. JAMES P. MITCHELL*
Secretary of Labor

struction.

Nation's top labor expert looks into the future and finds we
are headed into a
growing labor shortage. Foreseeing the need
of

additional 2 million

:will

million, skilled

4V2 million

professional and technical labor,
industrial workers,. and
managerial, clerical, and sales workers, the
semiskilled

and

'•

The

training and employment opportunities. ;

shortage of skilled, techni¬

the

cal and professional manpower, is
And

throughout
,.V

instead of bet-

unless

we.,

this

employment

policies

'•

trained

The

shortages,"

agencies

educational system.
..

Of course,
the Fe d er a 1

•;>

Government

company

•.

1 U »

•.

■.

•'

use

manpower.

•

which

makes

the

most efficient

character

are

for-share
shares

help by all"
James

.proper means.

Mitchell

provide
information, technical and finan¬
cial assistance, and moral support.
But the final effort must rest with
It

can

needs and aspirations of his
workers.' The acquisition of skills

company

can

need the

the

same

education.

velopment must be fixed, upon a
fully staffed training department

practical

approach

the proprietor himself.

Super¬

visors must have the full support
of management and be
provided

f^In loaning its creative thinking

community, because the com¬

the

munity best knows its own needs
and resources and can develop the
best solutions.

and develop skilled and
creative manpower I am not deal¬
ing in ideals but in hard

necessi¬

Preparing for the future,

short, comes down to a question
of coaxing the best out of the peo¬
in

who

ple

members of

available here and

are

teristics
most

els,

Endless ways must be found to

dent that

provide

national economy will suffice

expand¬
ing population; and the demands
establishment.

defense

our

Describes 1965 Requirements

The economy must grow enough

by the year 1965 to provide $560
billion in goods and services, for
population

will

opportunities

now

for

193. mil¬

exceeding

Given

machines

methods

are

men |

—

especially

improving

has

taken

the

measures

lead

this,

in¬

to prepare

that

sure

be
I

converted

one

here

needs

Praises

Arizona's

may

profit in measuring what

dents

Vital

vocational

divide

means

who

stu¬

their

and the

emphasizing

job

tion

the

young-

of the

Department of Labor

establish

where

center

training materials
valuable

materials

might iotherwise

But the very

Program

yvorkers
We

may

With

is a powerful clue that
be confronted, in 1965,
painful shortage of ca¬

people

pable

the

make,

man

those * wonderful

maintain

chines that
on

machines and tech¬

are

now

and
ma¬

increasingly

just

ciety.

and

•;

happy
..

so¬

......

Such a labor force" cannot be
created overnight. The acquisition
of skill is an arduous and time-

taking shape

drawing boards

consuming process. It begins in the
of indus¬ home, is nurtured in the schools
and

try.

colleges,

fruition

and

the

brought

been tasted by
ate.

the young gradu-

assure

accomplishes
itself of a steady

flow of manpower with the

basic

education. upon which industrial
Skills can be built. But no edu¬
cational

job.

system

can

expected

But it does to
provide individuals fully trained
not stop there. Workers must con¬
ies at the Department of Labor
for specific jobs.
Skills must be
stantly
adjust
to
indicate
that an adequate labor
technological developed on the
job, and indus¬
change,
adapting
their
skills
to
force in 1965 will require two mil¬
try must see to it that its work¬
lion
techniques, building new ers are placed in
additional professional and new
jobs in which
technical
workers — engineers, skills. Training and education are their
potential abilities will be
teachers,
scientists, draftsmen, lifelong processes.
wholly developed. This can best
3

Let

elaborate.

physicians,

Recent stud¬

and

so on.
additional

And

we
five mil¬

For the

boys and girls who

■

you

,%Tn ^extending full cooperation to
the schools, industry
much to

that

enthusiastic

about

what

have begun here, and I hope
I

have

communicated

some

such

as yours.

handled

Cuba,

the

Mexico

amounted to
after

the

for

company

$85,767,651 and
taxes

share.

sales

year

$8,-

was

per

were

37j/2

cents

was

quarterly dividend will be
paid on April 4 to stockholders of
a

record March 12 in the amount of

cents per share.

FHLB Nofes

Market

The Federal Home Loan Banks

April

erett

offered

Smith,

banks, and
dealers

through Ev¬
agent of the
group of securities

fiscal

$138,000,000 of 3.70%

callable

consolidated

April

15,

1957.

The

1957

and

notes

due

are

non-

dated

Oct.

priced

15,
at

100%.
Net proceeds from the

offering,
together with current funds, will
be used to retire

$212,000,003 notes
on April 15. Upon com¬
pletion of the financing, outstand¬
maturing

ing notes will have been reduced
to

$650,000,000,

$74,000,000

reduction

from

currently out¬
standing notes and Of $313,000,000
from
the $963,000,000
notes
outstanding on Dec. 31, 1956.

Joins A. R. Nowell
'

•

(Special to The Financial Chronicle)

SAN

FRANCISCO,

Homer A.

Lee has

Calif.—

become

ated with A. R. Nowell &

affili¬

Co., 400

Montgomery Street.

With Pacific Coast Sees.

Federal Government takes in pro¬
v

sales

dend

of the vigorous interest which the

grams

production
plants

income

paid;

Program

plants. I understand that only this
week they have adopted a sugges¬

time

are

$51,646,612 and net income was
$3,655,950, or $1.37 a share. In
January, 1957, a quarterly divi¬

establishment
of
a
scholarship accumulated for everyone's use.
Industry, labor and government
committee to assemble informaFor the past year the Department
niques which promise such thrill¬ all have vital roles to play in the
rtion on sources of financial assist¬
of Labor has been accumuFating
ing
improvements in efficiency future development of the labor
ance to-capable
youngsters.
materials
of this kind to form a
A skilled, creative, versa¬ •""
and .productivity also demand a force.
.But with all of this
industry has nucleus for such centers. We will
yery special kind of manpower. tile labor force is the invigorating
just begun. The long process of
participate in your program in
And what we have already seen of factor in our efforts to achieve a
education and training has barely
every way we can.
industry's
hunger
for
skilled more productive industry and an
;

quit«-on -training, methods^techniques
school and take a job which would
and specific programs for many
not use their best
abilities; the thousands of occupations will be

Threefold

which

importance of education to
^ters

what has not been done.

steadily.

could

leading brands

375,502, equal to $3.14

properly for hometown

brotherhood, between the
classroom

think, too, that there

1956
net

careers; a

.grams

Net

■

for groups of firms too small to
support individual programs.

years

and Wales.

believe that

opportunities in
local industry and to motive them

industrial

and

form students

and

means

"to~b"e

tity alone, this would
*

the

grasp

Foreign
through

re¬

well-planned and lively
An excellent example of joint
productive citizens.
program to keep teachers abreast
Unhappily, many Americans have of
industry - community action has
changes in technical needs and
not had this opportunity.
just occurred here in Arizona.
Of all
processes; an arrangement under
the negative forces in American
Some of your personnel officials
which .industry could
supply and
training officers have been
life, discrimination seems to me
equipment to the schools for vo¬
the most hateful,
I could speak
exchanging views on improved
cational training; cooperative
pro- means
of training
about it at length .today, :but I
within their
to

since

opportunity,

will

become

and

adequate increase

the

women

days

un¬

choice;

broad

the

over

plants at Edison Township, Irvington and Passaic, N.
J., The Bronx,
N.
Y., and Los Angeles, Calif.'

industry will find the
community following its lead—or¬
ganizing
programs
to exchange ex¬
which youth requires.
periences and ideas, setting up
Career Counseling
panels of trained specialists to ad¬
Other activities in which ex¬ vise companies which do not have
ploration might well bear lasting training programs, organizing co-^
operative apprenticeship programs
profit include career

industry of 1965

unskilled

Once
such

the firm has

Touch-and-Glow, Silken:

have

and be

Net, Silicare and Living Lipstick.
Revlon, with headquarters in New
York City, operates
domestic1

ment

these

people do not remain

educated

will include 10 million more work-

9ft5 and, in terms of quan¬

the

they

and
successfully marketed many:
other beauty preparations.
Among-

the incentives and the
encourage¬

need.

Most

lion. It is true that the labor force

move

skills which

to meet the needs of our

must

what

learned to their jobs,
warded for it.

bring home the importance of
training to youth, and to provide

marked by great tech¬

Only the most virile kind

world.

apply

the company's
Love Pat,

effort to encourage employ¬
to

ees

common

considerably expanded that aspect:
of its business and has
developed

And perhaps most impor¬
tant of all—a realistic and contin¬
uous

value

par

1,478,305 shares

cosmetics and toiletries. Founded
in 1933 as a maker of
nail enam¬

Labor.

supply must be used-to

era

strain.

formed

employers prefer to hire. Yet

people — women, older workers,
minority workers—to acquire the

of Ameri¬

nological complexity and promise
by persistent international

whom

ones

equipping youngsters for a satis¬
fying future in ' the workaday

these basic charac¬
the

might

the best advantage because it will
be all we have. It is perfectly evi¬

this labor

—and

is the paramount issue

The fruitfulness

groups.

School-industrial

result, out¬

major manufacturer
and distributor of a broad line
of

a
role in your Arizona
study, the Federal agencies, in¬
cluding the U. S. Department of

'/'■ determine how industry and gov¬
ernment can aid
the schools in

hiring standards,

not

are

committees

million will be

minority

workers with

findings.

survey

and

Revlon is

portant

a fresh look at
its school system in light of
your

par value class B common stock.

the

will want to take

million

labor

now.
can

over a

Under today's

identify

and

women

...

j When; I speak of the need to

ties.

Of the

group.

by them

of
the
after completion of the
will consist of 1,184,495

stock

un¬

class

capitalization

offering

age

received

needs

have

net increase in workers of all ages
.more
than five million will be

stock

standing

with "know-how" for
yje will„have;fiyq ipflliqn^more^
bringing out
workers 45 years of age and older strengthening of the schools, in¬ the" best Abilities of their people.
dustry not only performs a public
and 4V2 million more youngsters
Training programs must be based
service, but builds its own future. on actual
under 25 than we have at present.'.
training needs.
OneThe community which does the
Shot courses do little good.
There will be no increase in the
Full
most to develop the skills of its
use should be made of all avail¬
prime working age; groups be¬
own
people, and keep them at able outside facilities
tween 25 and 44 years of age; as
extension
home, very likely will find itself courses in local schools and col¬
a
matter of fact there will be
in
an
advantageous competitive leges, assistance of state agencies
750,000 fewer men aged 25 to 34
position in years to come.
such as the Arizona
—a
decline only partially offset
Employment
I have no doubt that Arizona Service which has played so im¬
by a 600,000 increase in the 35-to44

company's

from the sellers.

share-

number

the

competitor who is less mindful of

by the

group

The

the result of
of

common

conversion

derwriters

chines and processes than .will the

than

stockholders.

the

education

per

new

company. All net

offered

—

stands ready to ; 7

will

the

com¬

represent

selling

our

longer be left to chance.
Industry; makes
realistic'argument for adequate Training is essential.
draw, education
.when it points out to
Responsibility for employee de¬

not

proceeds

basic

does

financing by the

efficient

value

par

price of $23.50

most

:r;vT '

".:

«■-

This

and

than

new

Competitive advantage lies in the

young job seeker's minimum
credential; the nuclear
physicist

stock at

share.

machines and processes
available to nearly everyone.

are

the

Revlon, Inc., $1

mon

The

machinist, but both

will

Cannot Rely On Chance

government will continue to sup¬
ply^ services' and advice to the

and

farm/workers'

sources

million

today.

'■

■"#

and

Strengthen our '
educational"
system. :

classroom

bill
basic

highly young people that it has increas¬
skilled labor?
By 1965 the labor, ingly little use for the
untrained.
force wilb increase to 79 million;

ri d '

regular

The

declined.

highly

and

the

f\ Beyond High School Diploma

unskilled workers

and

From what

to improve our

training

•

Sources to Draw Upon

swiftly

move

farmers

the Nation^ will have
this shortage will get worse

general

ter

number

and

the

this

passes,

remedy

use of
training, and
therefore of the best talents of its
employees,
will
inevitably hold
employ¬
the edge in competition because
ment market is such that a
high
it will get more- out of its ma¬
schooL. diploma is fast
becoming

a threefold
program, for indus¬
labor and government, which would swiftly modernize
and equalize, for all workers, our educational system and our

try,

problem

Cabinet member recommends

help

(Special to The Financial Chronicle)

Your activities here in

Arizona,
first
your
state-wide study
of
Manpower Requirements and

Training

Needs which has been
today, but even more
important the
action
programs
which will surely follow from this

SAN
ert

FRANCISCO, Calif.—Rob¬
McFarland

now

with

Pacific Coast Securities
Company,
240 Montgomery Street.

released

penetrating analysis, will set the
pattern for the future.
"

We well know what

opportuni¬

With Reynolds & Co.
'

(Special to The Financial Chronicle)

SAN

FRANCISCO, Calif. —Jo¬
seph W. Hampton is now with
Reynolds & Co., 425 Montgomery

accomplished
through well- ties for industrial growth and so¬
Street.
He
was
the elementary grades planned 'testing
formerly with
and
placement cial progress await us in the years
Stewart, Eubanks, Meyerson & Co.
early years of high school, programs which identify the abili¬ ahead.
Your
spirited
effort
to
trial
workers, and
4Vfe
million the process is just beginning. Their ties of employees, and assign them
clear away the obstacles to those
more
managerial,
clerical
and need for competent, imaginative to a suitable job.
Joins Keller & Co.
opportunities in Arizona is assur¬
sales workers.
At the same time, teachers
and
a
well-rounded
(Special to The Financial Chronicle)
Every employer owes it to him¬ ance enough that Americans ev¬
course of
study is immediate, for self to. examine his
BOSTON, Mass. — Eugene D.
payroll for erywhere
will
not
waste
the
..'From a talk; by Mr. Mitchell before
they will be the core of the
Jabor promising people. In any business chance to-achieve a world in Zimmerman is now with Keller &
the
Third
Arizona Statewide- Industrial
will

need

lion skilled and semiskilled indus¬

today

are

and the

Development - Workshop;:
Arizona, March 16, 1&57.

University

of
«

force

1965—and

and beyond,

of„I975,
>

"l985,~

are scores

could

men

and

women

productive

who

and

which

technical

progress

serves

the noblest of man's purposes.

Co., 31 Milk Street. He

was

ously with Perkins & Co.

previ¬
,

7?ie Commercial and Financial Chronicle

(1598)

Normally,

Why Canadian Mining
Capital is Invested in Haiti
'V \

' ■:;•'>

By W. W. WEBER *

Consulting

Halliwell

Haitian

subsidiary, Sedren S. A.

and

first

poignant

most

question in the minds of many
"Why foreign exploration and
development in the face of the
attractive and inviting Canadian
conditions such as tax exemption
is

period, access, standard of

civiliza¬

operational techniques"?
As
a
consequence
of the above
there has been a large capital in-1
flow into this country with a re¬

tion and

sulting exploration and develop¬
unprecedented in the Cana¬
dian mining
industry. However,
these
bright
skies' and
sunny

ment

atmospheres have become recently
slightly cloudy and it is necessary
to mention only a few of these

mean

low

factors

temperature varies
of 75 degrees and

high of 82 degrees. Rainfall is
the rainy reasons

concentrated in

in September,

May.

October, April and
downpour may be of

The

short duration but the volume and

quick run-off can be perilous. In
general,
the
days
are
sunny
(every day at least 75%)', the
humidity moderate, except in the
summer or rainy periods, and the
winds constant and regular. This
climate has a particular appeal to
the average Canadian from Octo¬
ber till May.

possible to
reach the island
by boat direct
from
New
clouds, familiar to many of you—
York, or by plane direct
namely,
the
current restrictive from New York or Miami. Portfinancing policies, the trend and au-Prince is a minimum of 12
expectation of increased taxation, hours distant from Toronto.
the slow and steady rise of infla¬
Once in Haiti, access presents a
tion, the increasing demands of
labor, the decreasing limits of ac¬
cessibility,
particularly for the
virgin ground available for ex¬

Next,

It is

Access.

few

problems. There is a total of
of railroad, all narrow
gauge
and entirely linking the
sugar plantations. TTie roads grade
ploration. Though it is not the from macadam surface (approxi¬
intent of this paper to imply that
mately 300 miles) to a secondary
as in Kansas "We have gone about
roads network at times passable
as
far as We can go," there is
only by jeep (approximately 2,000
rather a suggestion that it is both
miles), and a limitless mileage of
timely and of material advantage footpaths.
(if only to preserve our present
Vegetation. The country is en¬
gains to share our proven benefits
vegetated
with
attempts
and standards with those countries tirely
peoples out of phase with our
developments.
Without
furthertransgression into the field of the
economists, it is also timely to
return to the theme or the illus¬
and

130

miles

evident

even

tain sides. The

tration

such

principle

beans,

an
or

of Ontario. It is located

Cuba

crops are

bananas,

70%

jungle growth.

the

topography

and

east

southeast

Jamaica

Republic'' is

moutainous

the. tropical latitudes, north 18 to

Gonaives

sector;
the

the

Artibonite

20 degrees.

Port-au-Prince

second
in

the

valley
north

The

island

The

material,

has

been

cen¬

source

slightly

standards is

Building

timber at
Canadian

good

under

in British

Material.

The

use.

Honduras.

With

the

Consolidated Halliwell

formations,

100

miles. The terms, as
briefly outline, will pro¬
the general, aspects of the

square

are

sev¬

the

;

All

steel

must

imported

transite, plywood and like
materials are entirely imported.
wise,

island

Equipment Aspects

Since

Equipment.

Mining

lacks

heavy industry

the
par¬

ticularly in the mining field, all
requirements for the surface plant
or underground operation must be

imported. The advantage of duty
free imports allows purchasing in
any of the
world markets at a
considerable
saving over Cana¬
dian tariff imposts.
On the ad¬
verse

chase

side,

mine

the

must

items

equipment

pur¬

Canada.

or rental,
complement of

The

equipment and warehousing, there¬
a
considerable
illustrate this situation,

fore,

represents

item.

sources

heavier

normal

than

similar to
in

our

one

dollar

(5) The Company

rental

ceases

and

Minor

unskilled

Skilled workers

intrusive

granodioritic phases and

largely

occurred

necessary.

eralize. The rock fbrmationg de¬
spite their youthful age exhibit a
complexity of folding/ faulting,

contortions and

and

discontinuity

equivalent to the knottiest prob¬
lems encountered by the writer

Concessionary
is
period of exemption

State

all

the
,

impossible'tb'gen¬

The

(10)

granted

(9) The Concessionary must file

from

the

near

Mesozoic period.
*
As to the structures
present
the island, it is

suitable reports concerning either
the .exploration, development or

labor

are

Tertiary with
rocks entirely basalt

stocks

sociated

pro¬

willing and co-operative worker
but
requires patience and un¬
derstanding to overcome his ig¬

occurred

the

masses,
mainly
excepting for the
major massif in the northeast sec¬
tor, are quartz diorites with as¬

Concessionary with the
complete all ancilliary

installations,

This peasant is

nepheline basalts.
The

small

exploitation of the Concession.
The

vulcanism

railroad, wharf,
etc., with an arbitration commit¬
tee indentified ,to fix any com¬
pensation
or, ;T expropriation
if

right

hand require a
inventory

off-shoot porphyry dikes.
This intrusive activity

vides the

The

is t

extensive period

the exposed

duction.

Concession order

was

throughout

amounting to 6% of the
net
smelting returns applies to
an area under exploitation or pro¬
The

c o n s

ings during the Cretaceous. These
are
probably the oldest Exposed
rocks on the island.
*

royalty

(8)

Pleistocene

There

within

The

excepting for the fossiiifer¬

of andesitic and basaltic
outpour¬

development under¬
two years of the
granting of the Concession.

Precambrian.

our

bined

communal

tectonic

and

The

com¬

intrusive

forces

operating on incompetent
coral
and
loosely consolidated
sedimentary
strata has produced
ment
a
complexity of local structures?
(11) The Haitian Government sufficient to
give gray hair to the
has agreed to a fixation of taxes
geologist. The major periods of
and duties as existed at the date
folding and faulting are believed
of the
granting of the Concession. to accompany the entry of the in>-(12); The grant provides for a trusives and extrusives and are
depletion allowance of 20%; per concentrated in the" late Mesozoic
annum
and
depreciation exclu¬ and early Cenozoic eras.
sive of buildings at the rate of
Now finally the
opportunities
taxes

lim¬

during

years

a
period of three
following the commence¬
of production.

33%

per

annum.

for

mineral

available

The equipment and ma¬ the Republic. The first attempts
excluding spare parts and to extract copper ores from Haiti
It is necessary to supply close replacement
items, are granted are attributed to the Spaniards in
1728. The first series exploration
supervision, fortified ~ with' 'pa¬ duty-free entry and, likewise are
and
development commenced at
tience, understanding: and experi¬ entitled to re-export free of duty.
the turn of, the century. This Work
ence in the tropics.
:
(14) Finally the Company as¬

distribution system to mesh with

labor.

(13)

* '

terials

the
large irrigation dam con¬
primitive tools and
structed in the Artibonite valley
the people. There
will
be
the fjjrst major electrical
have been several flourishing7 in¬
dustries established in the agricul¬ power source. Any mining indus¬
must
consider
tural field, but the best efforts try
generating
With-10 drills operating three
power
from - diesel
to investigate the mining poten¬
generators
shifts, and two headings proceed¬
tial have in the past been sporadic With a fuel oil tost- (duty free) at
ing ; underground, a • total • of 28
and half-hearted at best leaving 13—14c per gallon. \
Canadians (two miners,- 15 drill¬
this
There has been a limited search*
country
relatively
virgin
ers, three
geologists; 'two pros¬
prospecting and development and some drilling on the island
pectors, an accountant; mine su¬
for natural petroleum but as
ground"
~
*
yet
perintendent, Waster 1 mechanic,
these ventures have" not
proven
Now, the first consideration for
surveyor;
cook and1 mine man¬
successful.
the establishment of a mining in¬
ager) make up* the white com¬
Water
and
Rainfall.
A
tor¬ plement of the Consolidated Hal¬
dustry. necessitates a closer look
rential downpour
The
native
labor
in; the rainy liwell staff.
at the environment and circum¬
season may deposit several inches
force
averages
approximately
stance attendant to such a project of rainfall per
hour, but the over-! 500,
mainly engaged - in road
First climate- The tropical Cli¬ all precipitation is moderate (60building, construction, and pro¬
70 inches .on-the average). - The
mate is ameliorated By the nearviding drill set ups on.: the steep
run-off is quick and- complete*
valley "slopes,
Unskilled- 'labor,
iiess <5f the 'surrounding sea and
suck" that- plans.: for; production cheap- as itappears,; cannot", sup¬
alao with' changes in. altitude, the pius$ include;
provision* for the plant heavy equipmenton; specific
capture; and conservation of the
r
projects.) Skilled and.semi-sktlled
*An address by Mr; Weber ^before-the
available^ watepvsupply: The 'sea- labor provides the
ttSth Annnal Convention, of the. Prospec¬
major,;qdvaam4
son of .greatest
tors 4 Developers Association; - Toronto,
difficulty -extends tage in;-; .wSts -Ove^^com^aiiiffW
jfr dnr-Tate^November tffi-- March; Canadian -, standards.-->,
Canada, MarCb 6, 1957*"
- r
/

was sporadic
up to the late twen¬
obligations to safe¬
ties with a total production of
guard the health of its employees
several
hundred
tons of sorted
as well as providing an equivalent
of the Workmen's Compensation high grade copper ore. Until the
recent
advent
of "Sedren,
the
Act.
sumes

•"

certain

•

-r

Geological
Now

Picture >

look

prospecting and; exploration,
at a
standstill,

the

general' reconnaissance

sur-

briefly

geological picture.

!vey of the island

;

completed
by- Brown and Woodrlng-of the
U.$.G;S. in .1924; with additional
Work by

was

commence

(7)

are

Miocene

consist mainly of clay, sand
poorly sorted gravels.
;
VV
briefly the volcanic and
intrusive activity.

(6) The Company was obligated
ground

the

Now

Concession.

local

and

exploration

commence

similar

types

and

re¬

obligated
within
six months of the granting of the
to

„

thus

loosely packed" coral, coquina, and
limestone conglomerate. The re¬
cent deposits occur in the
valleyplains and are entirely alluvial

lieved of the rental payment.

isolated mines here

force is unlimited.

norance.

;

Age

content.

The

and

entirely
conglomer¬

and

Pliocene

entirely
strata

(4) The Company can relin¬
quish at any time any part of the
area

grits

occurrence and the rock

acres.

Concession

fossiiiferous

The

yearly fee of
hectare,' or 2.46

per

Upper Oligocene Age.

ates.

ous

fixed at

was

extensive

The Miocene is almost

sandstone,

area.

area

Canada.
Labor.

erate of

(3) The rental of the concession

mining equipment is' p|Tn6rmal
complement but' the spare and
stand-by units

defining the general

map

concession

equipment necessary for the
Consolidated Halliwell operation,
includes road building units; IV2
eu. yd. shovel, back hoe and crane,
tractor-bulldozer, traxcavator, Jwo

etc.

(2) The first requirement of the
Company was the compilation of
a
topographic and natural re¬

the

compressors;

;

This

the

Age overlies the Eocene
limestone.
This grades upward
into the sandstone and conglom¬

(1) The Concession was granted
for a period of 25 years and is
renewable..
:

normally

obtained under contract
in

grant.J

gocene

completely fabricated units. Like¬

Pro and Con

vide

Cretaceous.

limestones of Eocene Age. A sim¬
ilar fossiiiferous limestone of Oli-

will,

concessionary

There

find.

plants on the island
quality fair to: good.
Likewise, there are a number of
concrete
block
manufacturing
plants and because of their low
cost, concrete blocks are utilized
extensively in over 90% of the
construction
projects.'! J
1!

the

mentality

Consoli¬

unconformably Over¬

coral

difficult to
cement

zone

subsidiary, Sedren S. A. holds a
mining concession for an area of
25,000 hectares or approximately
I

with

Limited,

overlain

major rock exposures of a limey
origin good gravel deposits are
eral

detrital

turn

under

the

lying the

country has suffered

mineralization

through its wholly-owned Haitian

The population, 4,000,- tral
region, and the coastal plain ited in number, .but with training,
000 in number, is totally Negroid
along the northern shoreline of the semi-skilled laborers have re¬
or mulatto, with the exception of
the country. These art the
prin¬ sponded well to the requirements
3,000 white foreigners of all races.
of a mining operation;.
cipal agricultural regions.
The standard of living is low with
Power. There are no high ten¬
The
scale i of
wages
for • the
a small proportion (4%) amongst
sion lines on the island.
Local Haitian labor force ranges from
the intelligentsia and With means
a
high of $4.50 per day for the
stations,
mainly
oil
of a sufficient standard. The re¬ generating
diesel installations, supply the in¬
skilled diamond drillers, trades¬
mainder appear to be entirely in
the hands of Providence for their dividual cities with no rural dis¬ men, miners, etc., down to a basic
livelihood.' The general develop¬ tribution system. * The proposed rate of 70c per day for unskilled
ment of the

stone. This is the host rock of the

exclusive prospecting per¬
entitles the holder to seek

mit

adverse

are

extensive

its

portable

with
narrow
steep
valleys
separating
rocky
cliffs
averaging 3,000 to 3,500 feet in
height.
The highest elevation is
8,790 feet.
Three broad
valley
area of
10,700 square plains occur; the first or central
roughly l/40th the size
plain at the head of the Gulf of

dent

n.o

Typography'.; P T:h

Haiti

over

prises
miles,

principal
coffee,

moun¬

removed and the surface

denuded, has

Haiti, one of the two indepen¬
Negro
Republics
in
the
world, occupies the western third
of the island of Hispaniola in the
Caribbean.
The
Republic
com¬

steep

mangoes, oranges and sugarcane.
Most of the saleable timber has

a r been

specific instance, Haiti.
Describes

rice,

the

dressed
nearest

average

between

consequences.

Toronto.

Timber.

cost.,
The

siliceous

flows, ' and

abroad when none is avail¬
indigenously, and outlines the terms of the exclusive
prospecting permit.

l a va

completely denuded of merchant¬ and attempt to locate an ore dated Halliwell concession. V
able timber excepting a stand of body in a designated area.1; The
The Upper Cretaceous is ah as¬
southern pirte in the central val¬ exclusive permit holder then ap¬ semblage of limey
and argilla¬
ley north-east of Port-au-Prince, plies for a concession once an ore ceous sediments.
!
zone
the capital.
is indicated. This concession
The Tertiary consists; of lower
The coist of this lum¬
is
a
matter
of
basal
ber,
plus
the V quality: of
the
negotiation.
;
*
yolcanic and sedimentary

chasing mining equipment from
able

remainder

minor intrusive stocks and bosses?

developing and ex¬
of remaining at
Geologist Weber
the details of the major success of Consoli¬

Limited's

the

sub-siliceous

of the major consid¬

one

never

severe

here

explains the advantages and disadvantages in pur¬

Author

with

Exclusive Mining Permit :t

—

;

Why should Canadian capital be used in

before going into

Now*

untreated condi¬ erations of a mining venture in a
potable- without foreign land is the governmental of 'quartz diorite, granodiorite and
'
f
*
attitude.
Presently the explora- * porphyries.
First
There are several rivers of a tion and development underway
the sedimentary
se¬
fair size,
the largest, the Arti¬ in Haiti operates under either an quence.
bonite, has a length of 160 miles exclusive prospecting permit or
Cretaceous .or
possibly
preunder a mining concession.\
and volume similar to the Don
Cretaceous metamorphosed lime¬
is

tion,

rather

ploring Haitian metals and minerals, instead
hotne, is a question raised and answered by
dated

gram, but

Mining Corporation

Mogul

Geologist,

■

is reasonably
exploratory pro¬

water

available for

Thursday* April 4, 1957

...

;

This

minerals.
Iron

was

Butterlin in 1952-54.

map-illustrates the major
rock divisions present in the; Re¬

were
•

The prospects appear favorable
for
the
following metals and
-

occurs

principally

magnetite

in .veins; andcontact

re¬

placement bodies generally at the
contact
or.

basalt.

significant
been noted

diorite

and

limestone

Occurrences

investigation

without

v e

Limmade in the
The rocks are relatively
recent ranging in:age- from the north, and the Terre-Neuve valMiddle
-Mesozoic
to
unconsoli¬ ley of the Halliwell concession. ;h

public.

jiear

dated ^Pleistocene.- Nearly 80%. of
the" rock. exposures are -ofsedi-'
-

menta^*brig^;c^ixUy.rlimestc>nei'

Copper, occurrences are very
extensive. but those -of primary
significance are the vein and con•.

''ft-.

Number

185

Volume

5626

The Commercial and Financial Chronicle

(1599)

metamorphic deposits located

tact

HalHwell concession

the

on-

the

additional

type

located

disrupt

and

the

strata

graben block faulting

horst-

pattern.

associated

gold

and

silver

40% at Bresillac.

of mainly: quartz, carbon?

gangue

will

The

porphyry-copper
major importance of the ate,
aetinolite,
g;arnet,
epidote,
the prospecting northwesterly faulting particularly albite,
magnetite
and
chloritearea at Jean Rabel. Copper is also
the Bassin River fault has been its sericite.
•
*, ) I,
reported in the volcanic rocks in role in the localization of the
The shape of tne ore zone, out¬
the southern Peninsula.
quartz diorite-granodiorite plugs. lined- in an area
roughly 1,000 by
This intrusive penetrates the en¬
Manganese as vein-type occur¬
1,000 feet, is a lazy reverse S-contire
Cretaceous
assemblage fol¬ tour with a general
rences grading to 50%
Mn occurs
dip to the
in
the
Gros-Mosne
area
in
the lowing the lineal orientation of southeast; thin and
steeper (45°)
eastern
limits
of
the
Halliwell the fault zone.
on
the; western : fringe; bulging
concession. Similar vein-type oc¬
Since
this
intrusive
body is and almost flat lying in the cen¬
currences have been noted in the
believed to be the genetic origin tral area and
pinching and steepr
Jacmel area in the south and also of the copper mineralization and ening again on the eastern limit.
likewise
the
as
The
copper
occurrences,
concretionary masses in the
doming of the diorite intru¬
-

Central

Plains.;

Lead

minerals
in

located

been

not

zinc

and

have

commercial

quantities warranting exploitation
but

occur

association

Riviere

and

Nord

Gold

Bresillac.

with

veins.

copper

the

recorded

the

Normal

ozs7ton.

Alluvial

has

reported

from

gold
Riviere

Limmade
north

the

and

Plaisance

Riviere

and

south

the-

the

Reynolds

holds

the major

the

accurate

chro-

for

Canadian

the

development

capital

the

tarvia

road

due

cession

Gonaives,
limited capacity

.geology
.

limited

the

examine

anomalies

ore

zone

one

In the

types.

oldest

altered to
rock

has

tactite—a

epidote-garnet

work.

this

magnetite-

result

its

hy¬

morphism, the Cretaceous lime¬
is crystalline and devoid of

stone

limestone
«

horizon

strata

into

sequence

probably

Paleocene
The

depth

basaltic

horizon

flows

the

relatively

fossiliferous

stone. No

Eocene

^Structure.

-limb

The

concession

be located

the

flatlime¬

ture,

.strata

area

faulting

/teetonic

complicated

by strike
to: the general

parallel
.1 i n e am-e

westerly). These faults

(north¬

appear

proceeding

entire

main

the

(dipping

apparent

drilling has been

been

Over

beneath

second

the

zone,

present

highly

at the surface

attraction

this

the

zone

The
is

feet
completed

the
of

been

lost

public utility supplying elec¬
tric and natural gas services to
residential, commercial, industrial
and governmental and municipal

in the

customers

feet.

dicated

exploration
•/v ' •"

-•

—

steeply

the

Orleans,

La.

Participating in the offering are
—Auchincloss, Parker & Redpath;
Gregory & Sons; Ira Haupt & Co.;
Courts & Co.; The Milwaukee Co.;
New York Hanseatic Corp.; Mullaney, Wells & Co.; Thomas &
Co.; and Arnold & Crane.

Co.,

with

Fed¬

Capital Outlays to Remain High

schistose

the

about
Cassius
located

new

highs

creases are:

;

expected to be at about

these

would

programs

the main-,
reached at the

mean

this

following

year,

the

large advance

throughout.

During this period, the seasonally adjusted annual
and equipment investment moved up to $37 billion

could allow a
profitable mining
especially in this accessible loca-

and

tion.

step is

in; 1957.

Compared with

1956, the

anticipated in-

Higher selling prices

„

Differences
Most

com¬

well

increased capital

1957

•

Capital

Among

Programs by

Industry

major industries expect to increase their capital outlays;,

from

1956.

Manufacturers

and

the

public

utilities each'

than $1 billion, or 10% and 24%,
respectively, over spending in. 1956. The railroads also have sehed- v,
uled a substantial rise—19%—while other transportation companies
anticipate increases of

mineral¬

expect to spend 7% more than last year.
Commercial companies, on the other hand, have programmed

approxi¬
and west

capital outlays at 6% below 1956—following a steady rise~
Mining companies anticipate a slight decline in spend¬

since 1952.

been

ing rates this year.
;,
•
The 1957 programmed expenditures for major groups,

zone

pared with

Manufacturing
Durable-goods industries

Nondurable-goods

10 to

___

industries

Mining
i

Railroad

Transportation, other than rail

the

Public

sev¬

utilities

Commercial

po¬

com-,

1956 actual spending, are shown in the table below:
-Millions of dollars

and other—

Total

_________

Realization

Actual

Anticipated

19"»fi

1957

14,954
7,623
7,331

16,414
8,998
7,916

9.8
11.5
8.0

1,241

1,221

—1.6

1,231

1,468

19.3

1,712

1,826-

4,895

6,062

23.8

11,048

10,370

—6.1

35,081

37,361

6.5

1956

*
-

Percent

Chance

6.7

Programs

1956 show total expenditures of $35.1.billion,

major industry participating in the 22% rise from 19£5„
This increase—one of the largest, ever recorded—was within 1%

by magnetic means of the copper
iron
minerals.../The
initial

the

figure

projected

by; business in the survey.; ayear ago.

the. same as those
and com-.
and-other
lower .outlays' than previously

Outlays by manufacturers and utilities aFe about

•

Final figures for

with every

8% in manufacturing-, 4% in trade and 9% in revenues-

the utilities.

some

attempt £0 upgrade the
The lower zone or primary ore coppercontent' through
the removal
of
the magnetite,
consists
as
Fe
mainly :of -bornite and
chalcopyrite
with
minor chal¬ content ranges between 20 and
cocite, covellite, pyrite, galena and '•30%-at Cassius »arvd from 30 to

also indicates that businessmen expect sales to riste

goods cost are important factors in the expectations of increased
sales and investment.;
r'
'
>ff
"\

grade presently in¬
1.5%
Cu.
Since the

incomplete

are

$25% billion in the initial quarter of 1955.

zone

drilling have
this area.
A

survey

spending intentions.

equipment.1£&penditures

The report

under¬
to

61/4%t above the 1956 record-high, is
new plant and equipment in 1957,

business capital investment at the peak

1956.

1955 and

from

west)

body.

ore

and
mineralized zone is open in
eral
directions, the tonnage

drilling

New

had total operating revenues of
$45,278,277 and net income of $4,^
004,305.
/

Elizabeth M.

connected

Realization

1957.

beginning of

The

The company also supplied transit
service consisting of motor coach,

seasonally adjusted rate in the first and second halves

rate of plant

schist¬

The thickness varies from
40

billion on new plant
equipment in 1957, according to the latest survey of investment'
by the Securities and Exchange Commission and the *

tenance of

magnetite-rich zone has been
traced for a length of 1,200 feet
into the valley wall and across a
width of approximately 200 feet.

New Orleans Public Service Inc.

the

valley wall. Much
has

toward, the financing. of
program and the

construction

partial payment of bank loans,
is

considerable

$2 billion,

same

1957

by the

over $2 billion, or 6%%,
established in 1956.
Thfe survey, conducted in late January and February, indicates

copper-bearing
tactite
in a
horizontal plane near the base of

commence

now

that plant and

Meme.

6,000

sale

Department of Commerce. This amount is

the

case.

the

above the all-time high

Presently 22 drill holes totalling

surface.
was

zone

from

intentions

Cassius.

oxidized,

and

in
a

vertical attitude and

mence.

interest in each

Businessmen plan to spend a record $37%
and

crosscut

west

indication

hope
is pinned
ground
drilling

oc¬

copper

northwesterly

redeemable

bonds will be applied

its

zones

business

the

mineralization in

shows.

according to SEC Department of Commerce recent

the

This is

near

will

expected to be invested in

timated content if 1% Cu.

Business

width of 82 feet has
penetrated with an es¬

first

redemption

proceeds

company

(Special to The Financial Chronicle)

the

confirmed

now

has encountered

zone

now

Jean

eral Street.

bedded

upgrading

beneath the drilled

the first and major

the

believed

not

the

zone

•

the« axial

are

into

extend

normal

the

but

footwall

detailed

the

Kidder, Peabody

re-exam¬

ose

but

warrant

'-*•

Dickinson

malachite, cuprite, azurite, bornite tential of this area rests on the
1
with lesser primary chalcocite and current work.
The major hope of this and the
chalcopyrite. A metallurgical :
leaching procedure similar to the Bresillac area rests upon metal¬
recent developments in the south¬ lurgical tests about to commence.
These tests will seek a separation
western
U.
S.
A,
oxide
ores,

the- west

major synclinal strucplane
trending
i northwesterly
and, with an ap¬
parent' shallow
plunge
to
the
: southeast.
The continuity of the
-

Secondly,

erosion and the remaining portion
outlined,
approximately
500,000
tons
grading 1.56% Cu has not
been
placed in the ore reserve
category primarily because of the
extensive
oxidation,
principally

.or

copper-bearing minerals

appears to

sulphite replacing the
In consequence, the 254

extent

com¬

not present in the

mately 9,000 feet north

have been noted in this horizon.
j

indicate

the

diorite

copper occurrences

BOSTON, Mass.

•

revealed these

core

plug on the Concession. The main
primary mineralized zone does not
outcrop but varies from 100 to 400

contour

exposed

rare

the exploration in this area.
This .upper zone is exposed

This

Cretaceous

northerly drift also ai]d
blessings of nature are sincerely
appreciated evferiuif not greater
than drift height.
Raising is now
in progress to define the limit of
the
vertical
continuity
of
the
sulphide stringer zones.

sampling

warranted

Diamond

original

relatively

found

were

overlying

occurs

uppermost and most exten-

sively

lying

late

age.

concession
,

thin

distribution.

grades

the

agglomeratic

relatively

erratic

and

-thick

basal

with

soil

ized

overlying

the

With Kidder, Peabody ;

;

the

•

Net

Copper

the

crosscut

contact

then

and

areas

was

zone

limits of the southernmost diorite

feet

Unconformabiy

prospecting.

activity. /

through the ore
graded 3.98% Cu. The ver¬

zone

contact

28.

stringers of
chalcopyrite

and

throughout

proceed
of the indicated

each

tical

base

Meme Deposit. The ore zone
curs

meta-

fossils.

feet
zone

prospectors with

would

tactite
of

bedding.

line
200 miles.

the

bonds

general

accrued

to :
.

pyrometasomatic

results,

the

encountered

zone,

—

were

diorite

bands

residual soil

Cassius and Bresillac

a buffer be¬
relatively pure crystalline
J limestone - and
true- intrusive
a

ore
1"

vertical attitude.

contact

bornite

bedded

showing, the Meme deposit, and is
in
progress
on •' the

tween

presently

brid rock forming

diorite.

over

in the

which

completed

been

bearing

the

word

where Haitian

the

drilling in the Same plane. These
fractures appear to
originate in

instances examination of old

located

limestone under the action of the

mineralizing - solutions

limit

occurrence.

possibilities

The main adit, cross-

ination of the

anomalous

in-the

stringers

workings, coupled with geological
mapping evaluated the prospect as
to the merits of drilling. Presently
23 prospects of merit have beeh

the

zone,

devoted

underwriters

bonds at

March

These investigations
have not
been underway for a long enough froily coach and electric railway
service in New Orleans.
m
period to have achieved conclu¬
For the year. 1956, the company
sive

the

From

re¬

The

di¬

occurred

work.

only

regard.

sale

prices
ranging from 105.33% to par, and
at special redemption prices re¬
ceding from 100.83% to par* plus

Conces¬

grade of less than mine

massive

Trenching and sampling, and in
some

strata

the

ore

have

been

porphyritic, alteration halo-mar¬
gins of these plugs. 1 ;' V :

be¬

zone

tactite

has

the

toward

Croinor

ry-type

the

end

brief

number

exposures

The

of the

bid of 100.133%.

The

large

4.45%.

award

petitive

Cu, and the iron

cursory

area

copper

plugs; and also low grade porphy¬

•

metamorphosed limestone host of
rock

diorite and

numerous

surface copper occurrences.

of tjhe Cretaceous and Eocene. The

.the

crews

exception,

sea¬

concession

work.

terrain

covered

slightly

areas

anomalous

port of
on
the
Baie of Gonaives, 13 miles distant
the main ore body. ;
the

Two Canadian

native

from

Within

determinations

favorable

con¬

the contact

anticipated.
cutting the

mantle proved to be very success¬
ful in the
locating of the more

north

to the

area

now

beneath the major bulge.
relatively important devel¬

average

volume of control.

surveys

metal content

capital

the

aerial

rugged

bounded

Bulk

the above map in the Terre Neuve

Port-au-Prince,
city. The nearest city

the

examination

distance of

district of the northern peninsula.
This
site
is
approximately 160
from

yield

encountered

Pershing are pros¬
pecting and exploring surface ex¬

com¬

rectly

drilling

established

by 2 miles in the Bassin and
The magne¬
tometer,
self-potential and soil

miles

elevation

underground

ground

miles

Re¬

located

and

Cu.

the

opments

interval

Terre-Neuve valleys.

sidiary, Sedren, has met with the
major success.
;.r
as

Rabel

posures

tween

Two

aerial

areas

Consolidated
Halliwell
through its Haitian sub¬

This concession is

for

relatively

sampling

First,

elevation

coordinates
stations to provide
and

230

control

tailed

public.
Limited

adit

far

feet, the

which

effort

Now

photography. Ground parties then
proceeded
with a selective de¬

Finally, the direct results of the
and

the

magnetic survey was
completed in conjunction with the

which

concession

1.65%

and

the copper

over
1,200 feet of main 8'
by 8' drive and 600 feet of drift

the

this

are

area

main

totaled

crews

feet

200

contour

demanded this

Miragoane dis¬

Company

x,.y,

over

The

portion of the Republic.

exploration

with

alumina

the

detailed

head of

Offers Utility Bonis

.,.

re¬

30—50%.

northern

ceived;

■

under exploitation by

now

flown

ground

plus-minus 5 feet.
topographic
survey

lacking.

Bauxite

trict is

the

mite have been reported but veri¬

fication

been

mill

floats

sion

present

Underground development
late in August has

/ /■

•

won

There

the

thickness

from

iron

3,507,000 tons grad¬
2%

Halsey, Stuart firoap

possible

Three drills have

content from

mean

menced

been

inch

the

and

for

maps

areas

near

has

area

with

the entire

year,

result, aerial Mosaics and

for

mercury

further
•; "

During the past

the

product.

content about 1%

underground
development is testing the pos¬
sibility of block caving in sectors
of the zone with a tonnage poten¬
tial slightly over
4,000,000 tons

inch, with a contour interval of
plus-minus 25 feet with selected

Nord,

Gosseleine

major bulge.

over

The

zone..

compiled
on
the
regional scale of 1,000 feet to the

peninsula.

Platinum,

two

areas.

have,

been

streams

progress

base

originating
from
the
Quartz-copper veins thereabout,
well

and

probably
as

ing slightly

show/the Meme deposit, and

concession

quartz-

content

has delimited

Presently diamond drilling has
been completed on the first and

Prospecting and Development
.

metamorphic copper
at
the
Meme
deposit
between
0.04
and
0.08

ranges

Approximately 35,000 feet of
drilling on a Vertical grid pattern

feet above

elevation of the

of the diorite in close

zones

as¬

contact

deposit

contact

mineraliza¬

copper

tion; Occasionally a gold content
several ounces of the ton has
■

125

prospects, the Cassius and Bresil¬

been

mately

the

northwesterly quarter
has uplifted this sector approxi¬

the Bassin River fault and the

lac

universally in

occurs

sociation

dioritic intrusives, the exploration
has been confined to the exposed

dis¬

ri'v

•

the

main

copper-quartz veins of the Terretrict.

sive in

relationship

proximity to the Bassin fault.

with

pyrite, chalcopyrite and bornite in
the copper zones, particularly the
Neuve

close spatial

concentrate

Halsey, Stuart & Co. headed an
cently commenced the testing of
underwriting/ group
which
on
the Bresillac showing. This show¬
March
29
offered
$6,000,000 of
ing has an exposed length of 1,500
New Orleans Public
Service, Inc.
feet in the creek valley. The ex¬
for
first mortgage bonds,- 4%%
posed iron bed contains chalcopy¬
series
due
April
I, " 1987, at
rite
but
with
five
holes
com¬
100.823% and occurred interest, to
pleted, and results from only two,

The second step
purification of. the

merchantable

exhibit

involve

iron

residual soils of the Northern and

anticipated at this- time last year. /Mining companies
mercial enterprises exceeded their plans while railroads

transportation companies

made

scheduled.

■

...

The Commercial and Financial Chronicle
28

Thursday, April 4, 1957

(1600)
"

■».

have

By ALBERT R. BE ATT V*

the

Railroads

Association of American

Assistant Vice-President,

have

the

primary concern today, as
I understand it, is whether we as
a nation and as a people will con¬
tinue to have in the years ahead
Our

permit

produc¬

vast
tion

fail.

first

well

ahead,

•where

that

the

the regulation

are very

levels.

based on the

was

assumption that railroads

Al-

were

■ and
the rail-

taxes

every

revenue

IOV2 "t:ents

'investors.

ex-

(/.

(

49.4%.

available traffic to be moved,

All

penses.

declined

had

Although, as I said a moment
the T intercity
commercial
pas- ago. the railroads are virtually
senger- traffic, but in 1955 this 100% regulated, only about 35%
percentage was down to 36.4.
'
of our intercity highway freight
>'
'
'
-traffic
is
handled by. carriers
• /
..^Taiiic.Levels Change
which are subject to Interstate
/There ar§ two reasons for this. (Commerce - Commission
regular'
One, of course, .is the appearance/tion, and only about 10% of the
and growth of new forms of trans-(inland waterway traffic is reguportation. -The other is govern- (lated. /(/ |
'/-v
This situation, which has been
ment policy which restricts the
1
- a strong
1
A
J
railroads, '--'j
and -has
tenddecried by the Interstate - Com-,
enciy to favor: the growth of com- merce Commission itself, is largely
peting .commercial carriers to the due to laws which either specifi-

these costs left only
slightly more than 10 cents for
net railway operating income, out
ch 'had
of which
' 'to come
~""
payment of
1925-1929.
^/(/7..':,'(
•(/:
fixed
charges, capital expendi-While it is true that there is
tures
and
dividends/to railroad
no such thing as an average rail¬

by .cally exempt carriers under

7detriment ./oftransportation

cer-

These net".-earnings,fas' low 'sis -Ta.U.%V"'V>^tain conditions"from- being' begu-:
(financial
picture than others, the results for they are, would have been even (( While.thdxailToads' share of the feted by the Commission, or are
better> or

are

traffic

1929, the railroads carried 70% of

pre-

about 10 cents went for other,

road, because some railroads have

exactly

see

this

have

In 1956,

than

and

respect

paid out of

dollar

r''

looking

falter

our

other expenses.
roads

given to this tax
deferment factor, railroad earn¬
ings from 1952 through last year
were 23% less than for the period
recognition

Federal level

years/and had it even
before that in many states. Much

terrupted during World War II, in
the'relative amount of intercity

When "taxes, including payroll taxes, and

earnings.

current

were

never

fuel, materials

conditions

vailed

the sum
though it

railroad

wages

for

Similar

include

accounts

their

that

system
will

railroads

the

public regulation
the

the prices which
for (materials used

supplies.

Although this money
must be paid in taxes in the fu¬
ture, the government has required

transportation

had

of railroads

^for 69

obvious/ then,

sensitive

We have

the

VJ*

earnings of the railroads

and

pay

paid

was

defense

purposes.

sort of

The

44%

selective competition everywhere
and at all times. From the stafreight and passenger traffic car- tistics I cited earlier in respect to
-in their daily operation increased ried by the railroads. In 1929, the the freight and passenger situa179%.' Out
of
every
dollar of. railroads' share of total intercity tions, surely no one could deny
-revenue
which the railroads re- .freight traffic was about 75%, but that airlines, truck lines, bus lines,
.ceived last year, more than 48 by 1955/the last year for which water carriers and even pipelines
cents went for wages and 20 cents
comparative figures are available, are serious contenders for the
railroads

and indirect subsidies#
for

for

though the total volume of traffic
bridge t0 be moved has been increasing

costs

■

income

net

monopoly. The railroads are still
regulated in many respects as a
•
over the years,
there has been a monopoly, even though they are
the combined persistent decline, temporarily in- m feet faced with intensive and

enough

gap.

unit

to permit every proper opportunity to meet competition on
equal terms, and not preferential treatment; similar treatment
in regulation and taxation as is accorded other forms of

facilities

greater than
Moie-

revenues.

been

not

employees

physically and financially strong, the outlook for the industry
will be discouraging. The answer; according to Mr. Beatty, is

'in

From 1939 to 1956,

will make it possible for them to remain

addition

much

month.

the benefits of more traffic
and improved operating efficiency

be pessimistic and aware of rails' importance
in America's future economic growth, Railroad Association
official warns that if railroads are unable to obtain a share of

transportation; and an end to all direct

been

increase

-resulted

revenues

decrease

over,

Not wanting to

the total traffic that

wage ;in

rates,
increases in the ...cost r-of
materials (and - increased
taxes

'57

Railroads al Milepost

increases

because

clined

worse

a vailable (freight traffic has been
so -worded - or interpreted that
rail-/;going .down,'the trend for other many carriers . are ..-successfully
roads have made in recent years forms of commercial carriage has able to avoid regulation. This has
the
current
Albert R. Beatty
in operating efficiency.I Due to a been
upward. ' In
1929,
motor had an extremely adverse effect
^situation,
better
plant
and
better, trucks/carried but .3.3%
of all on the railroads, -and has also
calculate the rate of return on the much
; whatever
it
methods of operating it, the rail-^inlercity(commercial freight traf- 'been partly/responsible for thp
property value of the railroads.
may be. Since the end of World
On this basis, the rate of return roads are today turning out more fic,: but' by" 1955, this percentage ^weakening -of other common carWar II, except for a few months,

today

railroads

and

—

whole

conditions. As you know,
net railway operating income is
the measure of earnings used to

experienced
economists have
described as "boom times." Gen¬

what 'some

railroads

the

their

ciated capital investment

transportation

depre¬

motive,

has been

erally speaking, business has

before.

good,

cant

been postwar years,
and
over
this
and the traffic to be moved period has averaged only 3.76%.

high level. In fact,
there have been times when there

has

been at

not

sufficient

tal

investment

has

increased

the busi¬

the

end

loco-

per

train and

had

has (riers subject'to-regulation.
inland// Let's take a few- minutes to exand canals, which rose from amine briefly some of these reguin 1929 to 7.7% in 1955. The lations.;Under existing law, motor
to. 17.7/The

risen

same

also been true of traffic on

per

than they ever did
Perhaps the most signifi-

rivers

1.4%

• pipelines,
which are Jvehicles - are exempt' from ecotransportation - of the specialized carriers of one com- nomic: regulation ;whenThey haul
average freight train. In 1929, the-modity^ had increased their rela- certain
agricultural and related
average
gross 4 ton-miles
-per.- tive share of the total traffic from'Products—an exemption which is
freight train-hour stood at 24,539, 4.4% in 1929 to nearly 16% in not' extended
to (the>■ railroads.while in 1956 it was 57,012—an 1955.
So far, air carriers have Court decisions, particularly in th'e
increase of 132%,
(//. been a relatively'small factor in past two years, have.had the ef7

railroads

the

service

per car, per

single

output

Moreover, although the net. capi¬

quantity of

for (the

hour of work

in six of the eleven

less than 4%

been

not

tremendous gains which ihe

average

in America have

had

lower

typical of

are

the reasons for

figure

the

hourly

petroleum

since
earnings on
been
ment. From this, it would seem less than they were in the five
to follow logically that the earn¬ years before the depression.
And (
Such increases in operating ef- freight transportation.
,
/. feet of widening these exemptions
ings of our transportation agen¬ this, of course, does not take into ficiency have been the direct reThere is a similar situation on
such an.'extent that even rep-,
cies should be good under such account the greatly reduced buy¬ suit of extensive research and the
the passenger traffic side.
Here,-*^es^nta ves
.
trucKmg incircumstances.
•
" ing power of today's dollar .as capital improvement
program of as I pointed out a moment ago, ^ustry aye urpng>legislative,acr
Since the end of the railroads have suffered a de- Lontp prevept any,further spread
Unfortunately, this has not been compared with that of the 1925- the (railroads.
World War II, the railroads' capi- cline to an even, greater extent
the case. True, some
;
individual 1929 period.
!s kind, of exempt carnage,
was

equipment to carry all
that

ness

for move¬

offered

was

this

substantially

the

war,

larger investment have

carriers

have

and

done

continue

quite well financially, but
earnings for the transportation in¬
dustry as a whole have been and
etill are meager and grossly in¬
adequate.
to

This is particularly

true of the
railroads, the industry I have the
honor of representing. The rail-*
roads have failed
to participate
proportionately in the general
prosperity experienced by the na¬
tion's economy in the years since
World War II. Even in 1956, the
of the greatest economic

year

tivity the country has

ever

ac¬

seen,

they have been unable to earn a
fair return on their capital in¬
vestment;
and
their
earnings,
moderate as they are, have been
achieved largely through in¬
creased
efficiency and by bor¬
rowing from the income of future
years.

the

latest

year

rate of return earned

roads

less

than

1929.

the

Excluding

the

income

Financial

tax

This

only

current

slightly

much

would-be

half

have

Even

the

There is another important rea-

Com¬

roads'

how

financial
it

has

recent

situation

and

about.

come

through

1956,

revenues

taken in

that

—

is,

for services

railroads"

the money
performed—

65% greater than those from

1925

through

1929,

period.

operating

also

Yet

income—that

is left out of

revenues

net

pros¬

railway

is,

after

what

paying

expenses, taxes and

fore

fixed

10%

less

rents, but be¬
charges-—was actually
in

the

through 1956 than it
the

five

years

1952

years

return

pectively

were

perous

during
immediately pre¬
was

earned

railroad

industry

should be at least

ings would
roads

tend

with

sufficient

help the railroads to
maintain their position in a
highly
competitive field.

erating income for the

1952-1956

period is in reality overstated by
$770 million, due to authorized in¬
come

•An

tax

deferrals

address

stimulate

been

have

earnings

low, and especially at

time of good

Why have

business

our

•

prosperity?
by

Mr.

Beatty

the

The
in

railroad

few

to the first

words,
net

question,

is .simply

earnings

have

this:
de¬

the

railroad is

production

high
a

Volume

railroad's

with

eco-

With

earth

all-

can

pre-

serv-

they

But

performed.

and

not

are

some

all.

while

cases,

are

not
rig-

com-

restricted

not

raiiroads

regulated

culty in adjustment of rates, both
and down, and are faced with
inequities brought about by pubtransportation that
intentionally' or
unintentionally
favors other forms of commercial

the

disadvantage

the railroads.

vessel

the

pretty

Moreover, railroads can always be
required to publish higher rates
the
purpose
of
protecting
water transportation, but the In-

decline

must

generally known
are
virtually

railroads

feet

* V'* "

/'.

For

example,

the

tern-

national

economy

affected

the

expenses

penditures.

The

1954. able

traffic

pened again in July,
steel

capital

and

strike, and

re-

ex-

1956 due to
a

10%

The railroads

bounds

regulation

are

the

reason-

serves

and- very useful purpose.

thing hap-

same

regulation.

first to agree that within

drop

But they do
feel that regulation should be fair
and

the

public

interest

and

Competitive Rate-Making

The railroads

likewise at

are

great disadvantage, under existing

law, when it

comes

when

charge

to competitive

Listen to what hap-

railroad, because of
wishes
to
lower rate than a coma

advantages,

peting form of transportation. The
railroad
serves
notice
that
it
wants to put in such a lower rate,

subject to state

water

rail transportation;

transportation

conse-

the

increase

rates because of their adverse ef-

inherent

100%
regulated.
Not only are
they subject to the regulation of

Commission

Commerce

terstate

but they are also

serious

when the
no

Interstate Commerce Commission,

has

water

'o e^

moderate decline in traffic

revenues

situation

for

pens

For in-

few

regulation

from

thfe

over

commodities

buik

rate-making.

Lxtent of Regulation
It

GXGmnt

lie policy as to

the

under

iranSportation

carrier

or,

They also encounter diffi-

carriage

f
been

have

also

given certain advantages
st

in-

beine

shorter

carriers

;'more than three such commodities,

are

their

the

tfefaS/

Water

but many times

with

quired immediate retrenchment of

the

petitors

they

railroads

The

regulated

cludld

where

quences.

the

opportunity

bave.

jdiy

line or route in the same

same

dirGction

Federal Government, largely
through the administration of the

faced
a

these downward trends.

:-phis

that

margin
of profit and the pressure of increased costs, the railroads today
narrow

earnings of the railroads, and
~

the transportation

But if the vol-

in operation
distressing results.

current

answer

and
Transportation
Conference,
University of Tennessee, Knoxville, March

beyond

performance.

efficiency.

severely

railroads failed to

fixed

assured

verse

been

porary and moderate downturn of

generally?

share fully in the nation's
postwar

Traffic

1957.

railroad

ices

is insufficient, no amount of

even

Why

op¬

the

round

are

Accounts for Low Return

Moreover, this net railwav

know,

Because of their

ceding the depression.

would

have

efficiency

de¬

also

for

compares

vent

would

But

conditions

which

the

transportation

oppor-

enough work to do, there
transportation machine on

ume

transportation in volume. By

nomical

finance capital improvements On a
scale which would give the nation

kind

had

which

control.

its very nature,
indispensable to

earn¬

manded by shippers and required
for
the
national
defense.
They

tor

machine

mass

the

funds

traffic

ana-should

As all of

provide rail¬

been

whole

'6%. Such
to

have

standards.

railroads

Actually, the rate of return for
the

substantially greater if it had not

pros¬

"substandard."

are

volume

True, this volhas been at a high level by

ume

any

should

portunity to meet the competition
on
equal
terms
and
have the
chance to arrest and perhaps re-

have

rates

railroads have not
postwar prosperity

tunity to handle.

railroad

observed that "judged by
standard shown of record the

should be given every proper op-

the

course

janroaas, 01 course, nave the

?•

no dlvine right to traffic, and no
oneis suggesting that they can or

upon

level

the railroads

earnings. In its decision in April,
1952, when it authorized a 15%
increase in freight rates, the Com¬

see

period
1952
railroad operating

shared

1929..Commerce Commission before
.charging less for a.longer distance
have- £an for ? shorter +dlsta"£e over

railroads

The

l°ng-and-short-haul clause, whiciv
do?s apply to railroads and re¬

com-

enjoyed by most other businesses

prewar

the

five-year

why, the

son

passenger

the

to more than 29% in 1955.

oWtrin

Commission has commented

low

rfipsol

too, ; are. not

;9mres ral1 car^fers to
ta:in adbusiness from .J/ance approval .01 tne interstate
of

one-tenth

mere

substitution 01 diesei-electric

merce

Situation

briefly examine the rail¬

substitution

their

mercial

ef-

held

Interstate

signalling

new

strengthening of the roadbed and

earnings for other regulated util¬
ities, and only a little more than
half as much as is considered by
most enterprises to be a minimum
return.

installation of

locomotives for steam locomotives.

reasonable

and

riers* to which the railroads have
lost the most ground, have increased

Motor, venicles,

car-/k°und *9 adhere to. the so-called,

other, hand, air

the

fic.

ficient and more economical yards,
the
xne

return

than

courts

fair

than with respect to freight traf-

averaged

annually, and

such things as new and better

cars,

1929.

rate

the

earned

have

than $1 billion

systems, construction of

only about three-fifths

the return

any

Let's

credits from the 1956 accounts, the
rate of return would become only

3.21%,

expenditures

return

mission
Rails'

tal

the

only 3.95% •in 1956 the amount reached $1.25
one-fourth billion. This money was invested

—

rate

—

by the rail¬

was

investment

net

whole

1956

—

into effect,
the

rate

unlawful.
merce

before it can go
competing mode of
seeks

The

its

suspension

Interstate

either

or on

th& ground

Commission

instances,
protest

numerous

because
own

Comof

this

motion, sus-

pends the rate until it has had

should keep abreast of the times—

opportunity to conduct an investigation. This suspension, under the

recognizing situations

ex-

present

few,

ist today, not 10, 20 or more than

long as
Even

seven

30 years ago.

they

can

continue

months,
the proposed

for

railroad

Volume

Number 5626

185

The Commercial and Financial Chronicle

(1601)
is

rate

finally, found»to be

reliance

com¬

pensatory—that .is, able to cover
the cost of performing the service

war

railroads

°n

and contribute something to profit
and
is also
otherwise lawful,

times of

has unduly
transportation

emergency,

tended its own

tivities, and

has

also

arrest

be most

ac¬

transferred

substantial volumes of transporta¬

tained
riod.

during the suspension

Many times it has lost the
traffic permanently either to an¬
other carrier or because the ship¬
per has acquired facilities to do
his own hauling.
•
of

works

the

railroads.

determining
rate

thi^f

the

retain

share"

traffic?

the

railroads

words,

than

the

those

that railroads

are

brella".
of

the

over

their

goods and services

We
.

the

of the

total

the

than

population

228

and

powerful and

cient

locomotives,

cars

and

other

know, largely depend

you-

But

matter

plant

and

roads

will

of past

how

services
not

obtain

the

victims'6f this
Still

;

policy

a steadily
population and greater pro¬
duction of the part of agriculture
and

pertaining to public aid to other
forms of carriage.
Although the

transportation
tinue

costs

own

building, equipping and main¬
taining their plant and paying
taxes on it, and receive no gov¬
ernment
aid of any kind, large

From

has

-i

other

and

competing

activities
subsidies
The

ernment.

or;'direct

from

the

free

own

Stop

was

transportation
forms

same com¬
other forms of

rection.

aid.

would

There would still remain

things

•

transportation is achieved.

needed.

treat

Compensatory,

this

eminent

use

either

to compete

without

fic

structed

cost and service.

maintained

and

the

And

this is

real

earmarked

tracks

for
for

taxes

upkeep
of
special benefit

railroads, but instead go
support the general services

these

partially
repay the government for facili¬
ties that it provides for their use
and their benefit.

In this

railroads

taxes

greater percentage of their

operating
motor

than

revenues

freight

carriers

water carriers in both

and

charge

user

bined.
latest

year

for

parative

statistics
the

revenues

the

com¬

available,

operating
for taxes, while in

motor

was

5.5%

carriers it

such

are

com¬

1954, the

railroads'

went

case

riers.

general tax

which

6.3%

the

and

payments

For example,

the

was

recent

Government

largest single

common

for

2.9%.

years,

itself,
user

of transporta¬

tion

services, has engaged in prac¬
tices
that are
undermining the
physical and financial, health of
the railroads.
For instance, the
Post

they

common

Office Department

always

mind.

are

need

This

should

•

the only complete

carrier which undertakes

than

other

any

been

fuel

clearly

and

mind

the

carriers

carrier.

the

situation

for

ever

and

operation

transportation
which

has

put

another

carriers

common

greater

would

freedom

pricing,

regu¬

way:

but

they

com¬

would

not be permitted, as they are not
now,

put

rate

any

tory, which is unreasonably high
which

discriminatory

prejudicial against shippers, com¬
modities, regions or communities.
Cabinet
Under

the

transportation
began
with
railroads,
today's
transportation
depends on railroads, and tomor-

very

base

the

transportation

structure.

quote

the

Proposal

not

Committee

whether

improvements
basis

report,

could
a

rate is less

reasonable

the

not,

minimum

effect

that

While

not

ness.

Even

the

Department

Defense,
which places its main

total

traffic

that

for

share of the

will

them

make

remain

physically and financially strong
the

outlook

the_ other hand,

will

discouraging

they

can

mode of

traffic

transportation,

any

whether

it is lower than
necessary to meet
the competition of another mode
of

transportation.
This

would

creating

have

the

effect

situation wherein each

charges
general
tax

speaking

carriers

but

are

your

also

unfair

and

burdensome to the public. I have
reference to the existing federal
excise taxes

possible

post service in
competition with the express busi¬
parcel

the

user

with

like to call

extended

unable to obtain

which

are

commercial trans¬

both

persons

and

doubt

may

the

war

but

also

that

the

future pros¬

pects of the railroads will be good.
To

bring about such long over¬
changes is going to take a
high degree or statesmanship on
due

the

part

all

those

who

have

the

important responsibility of
keeping our common carrier in¬
dustry physically and financial¬
ly sound. It will necessitate view¬
ing the problem as it really is, and
a
willingness to reach a solution
that will not
only strengthen our
gigantic transportation system but
will also be
truly in the public in¬
terest.

•

railroads

they

expect

not

seek

nor

preferential
asking for
anything that will hamstring those
carriers
with
which
they
are
treament.

They

any

are not

competition. All the railroads
is that they be afforded the

ask

same

opportunities and the same
treatment in respect to such mat¬
ters
as
regulation and taxation

which

recall, so-called
temporary taxes of 15% on pas¬
sengers and 3%
on freight were
imposed during World War II. The
purpose
of these taxes was not
only to produce revenues for the
you

conduct

treatment, there is

little

of the rail¬

taxes,
I
attention
transportation taxes that are
only detrimental to common

should

portation

are

sums

times and the
competitive facts ot
life, and if it recognizes the need
for equality of

The

property.

If they

continue

transportation policy. If that pol¬
icy is brought in step with the

the railroads

made

adequate

■

other

responsi¬

losing large

by the public.
evident, then, that the fu¬

It is

disadvan¬

about, and properly so,
the financing of such

than

Commission
a

concerned

mode of transportation, or its re¬
lation to the charges of any other

other

was

trains

passenger

•

mands

their

always have been for
good roads, and did not oppose the
enlarged
federal
highway pro¬
which was approved last
gram
year by Congress.
What they are

funds.

Committee's

consider

For instance,

charge rates which,

determining whether
rate,

by competitors

conducting for some time now socalled experiments in transport¬
ing regular first-class mail by air
at
special rates, and has over¬

and

business

any

branch that

cost

and

are

rather

■

merce

used

roads.

rate

bilities is another matter.

pect

ment
refrain from
undertaking
soundly conceived and necessary
programs to provide basic trans¬
portation facilities which may be

be able to meet transportation de¬

has been

at the tax

carrier would

"reflect cost advantages whenever
they exist and to their full ex¬
tent."
But
the
Interstate Com-

than

But how well the railroads will

Cabinet

a common

be allowed

simply be impossible. Mod¬

the railroads will still be the

the

should

of money, and the same
principle
should be applied to
unprofitable

equalized, and the railroads

Committee's
the

proposal,

them

ern

•row

meet

bodies

ture of the railroads is
dependent
in large part on the
government's

other

will

regulatory

catastrophe
again.

local and branch line
trains which
being operated at
out-ofpocket losses. No one would ex¬

public

facilities and will

will

That recommendation is that

into effect which is not
compensa¬

this

have

that

of these

befall

tion.

permitted

Moreover, Without railroads, the

facilities

using

particularly

are

no rights of way
By "user" taxes I
made by trans¬

agencies

and

that

alsoi!

payments

portation

role

be more
sympathetic to re¬
quests from railroads to eliminate

which

emergency.

scale

State

which railroads pay

taxed.

com¬

—

time demands if such
should

they have

keep

vital

this way will the tax burdens be

petitive

economy, important at all times,
becomes vital in times of national

existence

are

The

railroads—play in the event of
national emergency, and should
do nothing that would
serve; to
weaken their
ability to meet war¬

but which many of their competi¬
tors largely or entirely escape be¬

mean

rev¬

carriers

this effect.
should always

the

should not be
confused with general taxes—the

cause

from

through favorable legislative ac¬
tion on its principal recommenda¬

given

materials

demonstrated,

was

common

longer patronized

lated

perform mass
service with far

manpower,

transportation
greater economy and conservation
of

that

Presidential Ad¬

service at the lowest cost.

t0Aan?irom
any Part of the
they can

nation. And

situation

the

Federal Gov¬

refrain

volumes and

increased reliance be placed on tage that they are now.
competition in transportation rateIn this connection, I would like
making as the surest and best way to make it clear that the railroads
to secure for the public the best
do not advocate that the govern¬

rail¬

anything, for anybody, in
quantity, in any season of the

any

the

form

have

government

charges

sort of taxes

financial

what

the .line with the amount of use which
Cabinet Committee would correct each carrier makes of them.
In

to haul

would

the Federal
which is the

wilF need railroads be¬

car¬

water

borne

roads.

forms

and

will

connec¬

out in general

pay

;

one

America

cause

tion, it is also significant to note
that

fact

basic

railroads, there is

prevail

consideration of the fu¬

ture of the

not

federal transportation policies
and
submit
recommendations."

questions

any

does

visory Committee on Transport
Policy and Organization was ap¬
pointed in 1954 to make a "com¬
prehensive
review
of
over-all

will their ratio of

Need Is There
In

found when

rests- the very
future of the railroad industry,

the other hand, a very large part
of the taxes paid by other forms
go

situation

transportation.
This

likely
Will they

possible to change current

—

transportation

ward course?: On the answers to

police protection,
fire
protection,
education
and
even facilities
provided at public
expense for their competitors.
On

basis

the total traffic continue its down¬

the

any

traffic trends

not

are

government

find

their property are

These

taxes.

the

to fare in this respect?

Taxes paid

not all.

moved

How will the railroads be

government at public expense.

by railroads

such

for the available traf¬

charge k>r for an inade¬
quate-charge
of facilities con¬

matter

support for

mon

cilities.
These

the part of the
gov-'
well

•

of these subsidies is the

car¬

of age, and
to pay .their

come

required
just as the railroads do.
applies to promotional

activities

certain

such fa¬

way

major forms of

now

by engaging in practices that

charges

user

own

And

enue

aad maintained at public expense
should be required to pay fully

operations conducted

there

Furthermore, the

transportation alike, government
policy must be such that besides
freedom

Subsidies

shrinking traffic

what

all modes

greater

all

ernment

there will be

misunderstanding

means

were
in
might have
justification for public

assistance,

but I should like to
so

dis¬
who

it may take.

1 haye already referred to these

summarize them

some

But

should

Inequalities Summarized
.

transportation

riage have

to be done before
equality of treatment for all forms
of

private

infancy,

been

simply be an
encouraging step in the right di¬

many

are

agencies, both di¬
indirect. When the
newer

their

®.,fa^roads ih the
petitive position

they

Future government
policy should
also put an end to all
subsidies to

industry that produces competitive ...rate-making,
those
economically should be carriers which use facilities built

most

their

rect and

carriage.

and

when

travel

Congress is being
urged to repeal these taxes in the
public interest, and it is to be
hoped that there will be no
furT
ther delay in
affording such relief.

a change in our
regulatory policy as
transportation, important as it
Would be, would still not place

permitting

take it for granted

regulation

time

such

transportation.

such

even

generally,

allowed

But

inequalities,
and

gov¬

consequential

transportation depends

since

the

each

the

field

needed,

commercial

portation system,
and
are
criminatory in favor of those
use

the

much

which pays no such
excise taxes
for the services of public
for-hire
carriers. They are
thereby weak¬
ening our common carrier trans-,

now

termination

redefinition

stimulation

government

now

;•

•.

the

travel

transporta¬

devoted

not

enterprise
way of doing business, it is only
natural that a competitive
spirit
has
prevailed.
In the economy

r -■ •>. r that (the

find

have

field

land

will
we

charge
the
lowest
the extent to which it shares in prices and, by,so doing,,,prosper
the total market for transporta¬ accordingly. Under such a system,
tion. services.
This, in -turn, de¬ •the public—and thai means you
pends in large part on how well and me—benefits as a result. But
each mode of carriage will be able as I have already pointed
out,
form of

car¬

riers takes the form of either pro¬
motional

indirect

fair

dedicated

aid

what

; .-/•/

v
future

they
unless

tion;.

this, if would

transportation

agencies'^"; .„,k.'*
However,- the

are the bene¬
assistance.
This

such

Certainly this pre¬
opportunity and a chal¬
lenge. to all our transportation

industry
of

con¬

the

future

have—a

for

will

during

the

bright future.
sents

segments of the rest of the trans¬
ficiaries

that

seem

demand

services

mount

two decades.

portation

the

industry,

This

difficult to-do

rising

against the railroads is that

railroads meet all their

petitors;

*.n other; words, with

important public
transportation that

works

doctrine.

erroneous

another

contemplates

having the
during the war.

had

discouraging

inducement to substitute
privately operated transportation

are

for

over

direct

else has recommended

anyone

tion

their

the. rail¬

are,

able

the

first put into effect.

;

good

the
so

objectives and terms of such reg¬
ulation, and a recognition of what
has taken place in the
transporta¬

id'Competitive..prices'

facilities.

been

now

they
are

passenger

do.

mended

;

effect

They

of regulation of
transportation by
public authority. What is recom¬

and

business they need and must
unless
to their attainment of lower costs, trends, it is estimated that total have
they can perform
the railroads are particularly the; intercity . freight traffic will be -their .services at prices that com¬
65% more than it was in 1955. *-; : pare favorably with their com¬

importance of large traffic volume

passenger

earnings.

and using the experience

new

case

has

than

the passenger tax.
These taxes are still

Mifr°UliIike
to emPhasize
that
the
Cabinet
Committee

new

equipment,

the

transportation

war

decade, but these
wartime taxes
continue, the only
relief being a reduction to
10% in

neither
nor

effi¬

aoie

intensive

better freight cars,

opportunity to compete
equal terms .than they

to meet suc¬

are

mean

railroads, it would afford them

terms

which

that basis,

million. ; On

the

with

new

United

Census that

?n more people, bringing

traffic

told

considered.

penditures of at least $1^ billion
a year.
And capital expenditures,

<thls c°untry.:may'have

tb■'

competitors.- Due to the

also

are

States Bureau

equal

The

would

Jrai\sP°rJation
he could use to
advantage, cost and service

the .railroads

ec°nomically

best

trans¬

improvement in their
plant and operations and methods.
This will require huge capital ex¬

1965 may be 40% more than it
was in the prosperous year of 1955.

for-hire

c?nditions, each user
?
Uly be in a Position
for himself which form

X
-J.
to 2
decide

continuous

times re¬

and

rates

by the Joint Committee

•

neither

competi¬
they are faced,
they must be in a position to fur¬
ther improve their plant and serv¬
ices. They will need thousands of

expand¬

economy.

competing

tion

the Economic Report that the

protective "um¬

vigorous

toldI

are

competitors.

many

and

prevents

cessfully

idea of

some

look ahead to

can

ing

forms

If the railroads

will be

government

respect

other

others.

discourage the unnecessary use of

can

regulator of rates and the
effective allocator of traffic. Un-

with other kinds vof
carriage.

confidence.

this

from

,,,^e hear
all sides
that the
holdsongreat
promise; that

From this, it can be clearly seen
quired to hold

it is

talk,

port.

the railroad

with

main

public policy as to
As I pointed out

mean

stimulates

future

are

unduly adverse effect

the

competition,
rather
than
government control, would be the

nor
impartial. It restrains
the railroads and at the same time

reflect

the future

than

meas¬

sound

It has not been my
a
pessimistic

large

which

By this I

transport would perform

services

...

that

policy

what lies ahead for the railroads.

Commission feels this would

traffic

■

railroads

our

better able to obtain

permitted to put in rates lower
than, or .even as low as, those
charged by their competitors sim¬
ply because the Interstate Com¬
have

...

have merely attempted to paint

not

merce

57.

the picture

other

often

very

of prospects for

view

"fair

■

those

the climate in which trans¬
portation operates in the future.

earlier

- because,
under proper
conditions, there is good reason to

Is the reduced

•;

form

trends,

encouraging.

transportation.

industry

frequently

mission, "lower than necessary to
meet the competition,'', thus en¬
abling the carrier publishing it to
or

view

rate, in the judgment of the Com¬

obtain

carriers.;'

intention

disadvantage of the

It is

con¬

common

milepost

principal tests ap¬
plied by the Interstate Commerce
lawfulness

assume

tinuing responsibilities of

This, then; is

the

Commission

that

obligations and

"L The Future Outlook

One

operators

of the

none

pe¬

present

ure on

tion services from the railroads to

irregular

reverse

All this depends in

—

the railroad has irretrievably lost
the business it
would have ob¬

their prospects for the future will

ex¬

are

accorded other forms of

transportation. Given such oppor¬
tunities, they are confident they
will

able

forge ahead

and

continue to provide America with
the kind of transportation service
that

expect

needs and has the right to

The Commercial and Financial Chronicle

XI.

Export-Import Bank's Role
In Foreign Credit and Trade'
Export-Import Bank of

President,

efforts by various countries to assist
their exporters and, in referring to "cold war" competition,
hopes we will not compete with the Soviet Bloc on the basis
of unsound loans at unrealistic interest rates.

having
such

capital stock of $1 billion

owned by the

only if approval had been obtained before the sales contract
been unconditionally con-

comparatively

years,

speaking,

have

review

operating expenses,
payment of interest on money
and dividends on the

payment of all
borrowed

capital stock. The Bank during its
lifetime has authorized over $8.3
billion of credits in 68 countries

during the past two years, and aa
increased number of requests have
been received from U. S. export¬
ers
for
financial
assistance
in

credit

that all

due

predecessors
office

in
the

and

loyal,

Of the world.

ef¬
Most Active

ficient, per-

staff

,manent
"servants.
The

important years in the
activities of the Bank have been
since World War II. Over the cal¬
The most

civil

Waugh

Samuel

of the Export-Im¬

history

endar years

Bank
reflects
the
ever
changing conditions, year in and
port

out,

year

the

trade.

foreign

Bank

Exporter

Credit

the

Bank has

been developing

selling abroad

1946 through 1956 the
an
average, of

credits each
However, the current of the

year.

activities during
did not flow at an av¬
steady rate. Changing

loaning

Bank's

was

September, 1940, there were
seven
statutory changes in the
Bank's growth and development.
It is not necessary at this time to

or
conditions and currents of foreign

erage

others

number

These

the Bank

to assist in

meeting the

seen

credits

porter

made

II, July, 1945, to be precise, a new-

in and

roll

service

its

and

speeded

in¬
in

and

unfore¬

the

example, in

authorized

Bank that
year totaled $1,200 million.
Only
World War II.
The Bank as of
two years later, however, in 1948,
that year became an independent
credits authorized dropped as low
"agency of the United State Gov¬
as $138 million.
By 1950, when the
ernment, a position which it still
Korean
War
broke out,
credits
holds.
;

•

t.\

its

authorized

the

that

for

year

rose

Originally directed by a Board
-of Trustees representing various
•agencies of the government, the

have

will

seas

million." In
1954 the rate
had dropped again, this time to
$345 million.
Then in 1956 an¬
other of those unforeseeable in¬

of credit

the

role

made

does

dicate

their

buyers and

will
We

our

not

are

decisions and

own

disclosed' to
in

in¬

...

others,

position of sup-

duplication on business conducted
overseas
and
by
the
prompt
enactment of

legislation approving
in the

States membership

United

proposed Organization for Trade
Cooperation. This administrative

will greatly aid the orderly
operation of existing arrangements

„

agency

Foreign Aid Program

The Senate Special Committee governing multilateral- trade to
to Study the Foreign Aid Program help prevent discrimination land

has by now received-reports from
at least two of the 11 research

restrictions

phases of this problem.

various

studies

The

submitted

—

the

Research Center in Economic Development and Cultural Exchange
at the University of Chicago
covered "The Role of Foreign Aid
in the -Development of . Other
Countries," and the submission by
the Center for International
Studies at the Massachusetts In-

against

commerce."

foreign

our
'

•

Common

European

Market

of the six
countries in the heart of Europe
representatives

The

comprising the European Coal and
Steel. Community
just T recently
reached

"complete agreement" on

trade treaties and

atomic poo}.

Of course, sub¬
ject to ratification by their respec¬
tive governments. The Eximbank
stitute of Technology was directed
is servicing the first major credit
to
"The
Objectives
of
United
extended to the Community by
States Economic Assistance Pro¬
our government and therefore we
These treaties are,

plying credit information to anycidents developed — the blocking
one, whether he be an exporter or
affairs, as a result of the
of the Suez Canal—and total cred¬
most recent August, 1954, amend¬
a
banker. *
its authorized for the year rose to
ment, are now managed by a full>(2) The Bank is preparing an
A single credit of
time bi-partisan Board of five Di¬ $1,156 million.
application form.'
grams."
rectors appointed by the President $500 million of this sum repre¬
By way of explanation, this may
sents the secured line of credit au¬
Time does not permit an analy¬
of the United States by and with
thorized
to the United Kingdom seem strange, but the Eximbank
sis of these reports other than to
the
advice
and
consent
of
the
has
never
used
an
application
to
meet
British
dollar
require¬
Senate.
say
both recommend the exten¬
ments for U. S. goods and serv¬ form, for the business of financ¬
sion and the enlargement of the
This last amendment also pro¬
ing project or development loans aid
ices.
- '
" • v" ■
programs and deal with the
vided for an Advisory Committee
does not lend itself to a specific
consisting of nine members rep¬
British Line of Credit
form.
Today we find that many Question of
resenting finance, commerce, in¬
paction or
So far the British Government of the smaller exporter credit apdustry,
agriculture,
and
labor. has not drawn
plications show a greater degree °f the
any of this loan.
The Committee is appointed by
Whether
it
will
draw
on
the of uniformity and we believe the Committee
Bank's

peoples.

tions necessary to avoid

comparative of rela-

security,

advanced by taking the ac¬
unfair tax

ally

tive importance,

re-

quired to process an application.
It should be emphasized that this
information will be used only to
speed

are

necessarily

na¬

these as¬
sistance
programs
are
steps to
increase
international trade and
investment. Both can be materi¬

the

And

free

Essential complements of

degrees

comments

the

world

the

promote peace, collective
and
well-being for all

our

time

minimum

the

files

have found that

information

the

when

over-

supply

the future

Eximbank.
not

assistance

is a keystone
the administration's efforts to

varying

which

data

III

effect

order

endeavoring to build up

are

files

our

$566

August, 1954, Amendment

which

all

requests

for actual financing.

countries! for reconstruction. Cred¬

continuation of military and eco¬

but rather to stim¬
thinking, I would like

your

potential

on"their

information

customers abroad prior to

European

loans to

Plan

Marshall

pre-

as-

to list a few of the more prominent problems on today's horizon

(1) The Bank will welcome the
by exporters of credit

1946 the Bank

and

answers,

ulate

"As has

tions

his Feb. 23

transmitting his report on
Trade Agreements ;. Program.
following paragraph is from

nomic

attempting

Union

Budget Message;

the
^

repayment."

submission

'some; substantial

loans

the

State

already been indicated
in the State of the Union message

de¬

reasonable

"offer

Without

exporters

and
way' indicate a

Part

Five changes or re¬

up.

the

The

Imponderables

year

over

that

his

message

solely

the Directors'

and the fourth time in

of endeavoring to

any

from

surance of

be improved

may

offered

are

make! sound

those

which the Bank's handling of ex-

contingencies.

For

Toward the close of World War

velopment, again to meet contin¬
gencies — these
occurring
from

deavors

problems of foreign trade in those
prewar days.

change occurred in the: flank's de¬

year

not

sire

out flow finements have just been adopted
over
many
large
rocks, which by our Board of Directors and are
discuss in detail these particular
usually cannot be seen far ahead. here announced for the first time,
steps but we may note that these Consequently, the Bank's loaning
developments were necessary for record fluctuates as the Bank en¬
Crcdit Data File
trade

changes

diversion

less

has

date the
be asked

Message/again in the Budget
Message, a third time in his letter
transmitting the Economic Report,

improve the Bank's services

been

ways

export transaction
financing.

for the purpose

part

will

President .'referred

The

OTC

..of order to add a banker's caveat.

our

experience

Continuing

Eximbank

the

determine

that,

Perhaps here it will not be out

Program

where

credit.has

single

dicated

these years

and

conditions

than $1,000.

$550 million of new

Be¬

with

tion

to that

prior

present ; Congress

may

not

does

loans in participa-

has authorized

renewal of the Trade Agreements

medium terms.

re¬

be presented and
change any of the basic

plication

Many of these have involved quite
small amounts of credit. The Bank

authorized

Bank

Birthday, 1934,
established

Lincoln's

tween

when

During World War II

The

year

t0 ratify membership in the Orthe time when an ap- ganization for Trade Cooperation.

cerns only

for

the

will

the

interest.

hence the Congress
again be confronted with the
one

must

usual

Bank's

the

eligibility of

the record ob¬

nevertheless,

paper,

conform

Credits

jectively, and

to en¬
decisions in

pressure

make

national

the

above

quirements and this change con-

Part

the

con¬

Congress¬

rise

must

sense

This

problem

the

Bank's approval for jts financing. Act
that has been in effect since
1934. But
Such

experts, so that the
results
are
acceptable and remunerative for both parties."

Exporter

statement,
from ail
Con¬
Administration
and

them

able

•

who

men

constant

reserves of $435.1 million
been accumulated after the

before he cah obtain

the deal

pressures

conscientious

fronting

petition, however, instances arise
in which the exporter must close

„

T.._,

„

resolved

indicative

has

Bank

consideration."

demand

eluded. Due to international com-

rangements, carefully studied and
all I...

United States Treas¬

the

past

significant

and

gress

agreed to participate in financing

sion

ury—and Congressional authority
to borrow $4 billion.
During the

short time,

can

promotion of trade expanprimarily for the benetit of
the United States but at the same
time contributing powerfully
to
the
economic
advancement
of
the

—

The Bank is now prepared
financing paper which
the-

Trade

ago

Mis¬

the

directions converge upon the

to consider

the

"Conflicting

•

days

Boggs goes on

Congressman

every

(5)

New

make

Financing Paper

Use

grown

with the

and

reputation.

those
foreign
countries with
into a sizable institution which it has friendly and profit¬
able
trade.
When
contracts are
and now operates as the interna¬
tional lending arm of the United negotiated with the Export-Import
States in support of U. S. over¬ Bank, it can be taken for granted
seas
trade.
Today the Bank has that they are purely business ar¬

Eximbank History

experience

purchaser s

the

many

represents completed export sales.

through
the statutory
changes mentioned the Bank has

commenting on the
remarkable history of the Exim¬
bank during its 23 years, I always
preface my remarks by stating

Bank

made

was

World

letter from

Export-Import Bank comes in. It
is
an
institution which" already
has established a commanding role

time,

Whenever

been

world.

the

—

comprehensive study
This

foreign trade policy.

our

statement

the purchaser's bank abroad an- sissippi Valley'
" *
swering six brief questions about Conference.

part
This is where the

transactions

ness

Which has

before

also have learned
in their past busi¬

deal

great

international competitive

that

taken

have

Orleans

second,

and

only,

knocks but they

prominent problems, imponderables, in the current
international trade scene.
Mr. Waugh calls attention to

The

than

undertaken

Ways,

the powerful

Means- Committee

and

/erred

•

better statement

"Americans

Part I

;

the Buenos Aires

Washington

reviews five changes or refinements
expedite exporter credits, and lists a few of

just adopted to

recently in an editorial
"Herald."

that given
in

Export-Import Bank head
the

know of no

SAMUEL C. WAUGH*

committee

On the smaller credit sales reto there; will be two xeYou can see that it is difficult quiremenfs: first, the purchasers*
to depict in a few words the role
balance sheet with profit and loss
of
the
Export-Import Bank.
I statement for the last 12 months
World War

purchases made since

Thursday, April 4, 1951

(1602)

followed

have

with

The

development
'

Free Trade

Area

has been some confusion

There

this

interest.'

great

hard and soft loans

the

Board

Directors

recommendation
of

the

Board
each

the

Bank, and meets
in

the

credit

continue.

Washington three times
Questions of policy

draw

year.

discussed

detail.

the
most
man

consultants

year.

The

fortunate

throughout

Bank

have

has
as

of the Committee Mr.

all

addi¬

know.

not

in
But

this

The

Middle

the

British

the

credit

the

form will

un¬

our

United

_U.

labor in

Union

been

Export

Chair¬

benefit
-

each

Import

year

which

Ingersoll, of Chicago, Chairman of

the

has

decided

charge
tion

commission

made upon that porthe
financing requested

was

from

part upon the maturity.

the

Bank

and

depended

submission of the

Administration's

recommendations

Citizens

his

from

known

over-all

after

hearing

Group,

in
U.

has been studying the

aid

program,

will

turn

the

eyes

fact

Area

Peter

serve

The

supporting the

evidenced by

named

recently
the

Exchequer.

Thorneycroft, was chosen to
as the "Coordinator."

potential

formation

from

the

that

Chancellor

constructive

our

enthusiastically

Free Trade

Foreign Trade Policy

'It would serve no

purposes

significant that the United King¬
dom has reversed its position and

now

the Fairless Committee,

doubt have a great bearing on the
future activity of the Eximbank.

The prin-

cipal purposes of the commission
were to encourage
larger parlici-

the 17 nations in the
Organization for European Eco¬
nomic
Cooperation.
It is
most

comprise

with, I presume, the President s

which also
a

loans

overseas of products
Bank's loans facilitate.

submits its recommendat.onsalong

commission

the

outset

the

through sales

Roy C.

complete

charge.

and
state of the

Bank

The

(3)

discontinue

industry

every

/0.

dollars

in the case
loans—for
purchases

States

insure

nnni,Wi«„ onH wni
a fho t non
application
and will aid the Loan
Ofticers in their processing.

East

here in the United States.

tion, individual members of the
Advisory Committee have been
used

will be used to pay—as

governing operations of the Bank
are

certainties

with the

Common

previously men¬
tioned, is limited to the six coun¬
tries and the broader plan known
as the Free Trade Area which will
Market which, as

the final decision
Congress after the Special
analyzes 11 reports and

President

European

the

between

the

impact

European

the

Com¬

with the
possibility of the creation of the

mon

Market,

together

that our foreign trade
has reached a crossroad, 17 nation Free Trade Area on the
The Trade Agreements Program
United- States
export market is
and the liberal trade policy that
^one of the-$64 questions in the
it represents has not in decades
_trade field. Willi.there be dis¬
been faced with the crisis it faces
crimination against the dollar ares
today/' .
<..•*.
>
:
to
."or wilLthe elimination of customs
terials, equipment, and services *,
(4) Where the fina need por/ioiv ~. These words are not mine, but
'add was never made. Since that
and tariffs over the term of years
exported., abroad.
This
sum ." of an export sale does not exceed' hfe those of the Honorable Hale
improve, the economies
of tfa<*
;
*A»
•ddresa
by
Mr. Wao-h
boforamounts to more than a billion $50,000 the initial credit informa- Boggs, Congressman from Louisi- areas to the extent that
they will,
*he
Chicago
Trade CWereiw*., -dollars,
most of which covered tion may be limited.
• — - ana and the Chairman of the SubBorg-Warner

It is

Corporation.

the

interesting to note that, over
years,
eight
mid - western

pations by the exporter and, con-

smaller participation by
states,r Illinois,
Indiana, Iowa, the Eximbank, and the limitation
1934 it was given an initial capiMichigan, Minnesota, Missouri, „by the exporter to shorter credit,
tal of $1 million, and $10 million
Ohio, and Wisconsin, have re¬ terms.-Experience has shown that
borrowed from the Reconstruction
ceived approximately 38% of all these aims may -be. obtained by
; Finance Corporation to make a
the Bank's disbursements for ma¬ other means,
*
-i,.-; *
loan to Russia—which I hasten
When

the

Bank

was

created

versely,

the

fact

policy

•

Number 5C26

185

Volume

eventually - be-even greater

The Commercial and Financial Chronicle

mar¬

can

A Banker Appraises

kets for United States, products?
»

integration

economic

The

(3603)

Todays

must admit this will undoubt¬

seem

call

edly

for

review

commercial

over-all

policies.
first

the

Since

have

heard

other

common

the

and

markets

Missouri

/■",

Economic

The

;

/".y :

•

Policy

the V

U.S.S.R.

Who will

fair reputation,

complicated by the recent trade
policies of the Soviet Bloc? We
cannot disregard this competition,

that

dent

debted

must

country

any

Eximbank

the

International

now
or

This is

debt

period which

the

abundance

the

ture.

period.

"■

Let

Red

hasten to add

that it is

tight is "tight"
as

to advocate the
taking of this step. I would be
less than honest, however, if I did
not

purpose

December

last

East

they

has

States

trade

one

policy

China.

Agricultural Disposal

increasingly

Fed¬

spending;

hardly considered possible a

known

been

L. 480. The fear has

expressed

that

will

cost

our

Federal

than

debt

total

the

only

to compete, and

wealthy enough

'that it might become.a perpnartent

offered.

solution

The

that

so-called

of these

as
well as our
States commercial policies

imponderables
United

in the fields of minerals, watches,

fish

fillets,

name

but

have

and

effect

of the

tivities
These

."clothespins,

few, will in a measure

are

the future

the

previously mentioned

their solution will have

the

bank.

future
We

role

are

today

with the fact that
countries

have

the

Exim¬

confronted

dozen

or mpre

various

plans for assisting their exporters.
It will be the objective of the
Directors of
a

fluid

able to

our

order to be
continue in the future, as
in

they have in the past, to assist in
maintaining the competitive posi¬
tion

our

interests

traders and
-the

United

business
States,

working to the greatest -extent
possible - with and -through our
private bankers. ■
*'
: '*'■*

curtail credit for hous¬

Joins Stewart, Eubanks
»•

Few are

SAN

Arthur

Calif.—
Nelson.has joined the

FRANCISCO,
J.

Shall

the

Oh,

He
A

& Co., 216 Montgomery Street.
was

previously with Richard

Harrison, Inc.

no,

Shall

staff of Stewart* Eubanks^ Meyerson

cut

back

and

for .other

such

1 BOSTON' Mass.

■arid

credit

worthwhile

Co-.

consumer

back

instalment

credit, and cause a

cut

50 4 Congress

Street,

/-the. New - YOrk -r;hhd
Boston Stock Elxschanges.,
*.*

members /of

An address

by Mr. Welman before the
Association's Instal¬
March

American. Bankers.
ment

Conference

Credit

38, 1957.

it -would

years,

actual

reduction

have

the

considering the total instal¬
credit

charged

to instalment credit
use

credit

and,

—

but

were

now

loans

use

be¬
of instalment
years

different form.
obtained

instalment

generally,

amortization

from

the

credit;

present-day

methods

~ are

superior to the hit-and-miss
payment agreements, or lack

for

Charles J: [further decline in the production

Reardon -is now <witlr F. 'S; Mose¬

ley

few

supposedly benevolent em¬
ployer, for many of the purposes

projects? Never.
Shall

the dollar vol¬

necessarily

and cut down

purposes,

father, father-in-law, Uncle John
or Uncle Jack, or sometimes from

curtail credit to busi¬

certainly not.

exceeds

number of people for

same

will

There

of supplying more jobs?

municipal, state; and Federal proj¬
ects—for schools,
for hospitals,

With F; S. Moseley
(Special to The Financial .Chronicle)

it dif¬

abandon¬

hard

by, and

come

statement

still

people,
their

type.

scarcity

credit

....

all.

in many

Terms

are

instalment
real

bargains

Truly,
of

one

ft-"'

play

em¬

growing

industry, business, municipalities,
and undividuals.
_

The character of people seldom

changes, but their ability to pay
their debts is
constantly changing
and is
frequently beyond the con¬

lulled into

the

and

anxious

somewhat

the

are

becoming

cautious.

that

money

There
It

ap¬

attitude

consumer

How to Avoid Controls

may

people
sion

are

that

now

the

American

making the deci¬

to the need for controls in
field. If we are to
as

the

deny the

need

for selective

properly

do,

controls,
must

as we

the

responsibility, along with the pub¬
lic, of proving the lack of need
and
the wisdom of
dependence
upon the ability of borrower? and

the credit, we shall also be

lend

changing.

great part in this im¬
we

stabi¬

the

Others continue
as

and/or sell the goods.
signs
that
they
are
pears

Just

security

"built-in

economy.

a
buying-borrowing spree, aided and abetted by a
great number of people
willing

con¬

this,

our

sense

in somewhat of

Without

false

Admittedly, our people have in¬
dulged themselves, to some
extent,

that

and

so-called

lizers" in

the establishment and

business.

mense

spending, "and
unprece¬
dented expansion and
spending by

instalment

the way.

fense,

properly take credit for
much of it, but I am sure we will
not
forget
that
others
helped
us

conditions.

by government subsidies and de¬

can

show

credit

economy stimulated and bolstered

growth of our country
would
have
been
much, much
slower. We in the banking busi¬
ness

and

have had

accomplishments of the past few

credit.

bank¬

ployment;

will record that one of
the major developments and major

sumer

in instal¬

reasonably full

Bank

day.

our

share the belief of many

and

build

future

their

habits

can

lending and general

economic

history

was

their
He

We have had

Country's Growth

growth

and

desires,

and

our accomplishments were
achieved under, most favorable

and
is now proudly and confi¬
dently wearing its long pants.

decades

and

instalment lending has grown up

needs

cases,

ef¬

Must Confess Outside
Help
In looking at the other
side of
the picture, we must
confess that

this

generous. "

credit

their

sound base for

ment

his

Neither
only mod¬ trol of the individual.
not at borrower nor lender should be

Rates have increased

and,

success

learn and understand

weaknesses

strength,

*./'

the

can

peculiarities.

that,

stands

com¬

pelled to share jointly the respon¬

sibility for the present and for the

lenders

future course.

properly. We, as lenders, must re¬
double our effort? to,
formulate,
maintain, and
abide
by
?ound
principle? for the extension of our

should like to

thp

men

and

tribute to

pay

women

banking

^PQn^ible.iornithis phase

of ,o.ur

business.

fore widespread

industry,

instal¬

and

outstanding

actually existed in the

curtail to the farmer?

and

means

take the Fed¬

consumer

credit

same

now

problems;?, that many others
likewise supplied their

ness

(Special to The Financial.Chronklh)

Regardless

outstanding,
we
should not forget that some credit

Unthinkable.

t-;

Reserve

ment

needs; and that there are increas¬
ing signs that supply may
be
catching up with demand.

confusing.

definition,1 we"' find

have

say

"consumer

Product, the volume of
sales, the figures on instalment
credit, and other statistics.

we mustn't do that!
anguished cries that the

below one-million starts.

Shall

terms

con¬

National

willing to consider that we have
less eligible veterans each year;
that many have solved their hous¬
ing

and

let

acquisition of goods and services.
We are, at times, prone, fo over¬
look this in considering the Gross

no,

are

First,

today

past

country will be ruined if we drop

Bank to maintain

position

Oh,

Situation

instalment

seeing

economic

the billions."

meant

premise that it is all right
credit—provided it is

Shall

aren't

be much
higher. If "Our total outstandings
had remained the same during the

the other fellow's credit.

There

rates

won¬

describe or classify, the
outstanding is- "away up in

ume

curtail

ing?

themselves

situation

the

re¬

eral

the

one

the

much

scarcer.

Credit

au¬

to the

thing everybody seems
to be in complete agreement: that
is

Reserve
so

forts. He

in this great country of ours there,

Re¬

marvel

in mind, in com¬
paring volume with previous
years' figures, that it takes more
dollars to buy
something or do
something; and, today, if we loan

awful

this

real

We must keep

that accom¬

about

brought

effect

ing

want

$40 billion.

shortage.

difficult

problems facing the Administra¬
tion and

have missed

in¬
any

Federal

that

the

that (.'total

plishment
very
far), we have
"tight
money";
and
there
are
many who would indict the banks,
the insurance companies, and the
other lenders, and. particularly the
Federal Reserve Board, for hav¬

ac¬

Eximbank.

among

ment

can't .have- all of the money
they need or want at the same
time
(and I am not so certain

omy

find

total

policy in our trade program. Here
again no constructive comment is

to
to

The real

more.

that

the

una¬

they

restraining

credit?

how

people,
business
and
industry,
municipalities and governments,
and other segments of our econ¬

used

sumer

decades ago.

ing of agricultural surpluses, and
one
in
which
no
country
is
.

that.

credit," "instalment credit," "per¬
sonal loans," "small loans," etc.,

few

have

relative

and the beginning
road-building program that

the

What

ago;

Nevertheless, because all of the

nature.

commonly accepted existence
of a tight money
policy I believe

estly

The

that

Today's

over

method for dispos¬

into

entered

•

have

all-time high;

much

could

outstandings

credit

consumer

few years

and

such

All

higher and money

billions of
instalment

many

rate

disposal of our agricultural sur¬
pluses under the, law commonly

funds

Aided

doing

der

budget;

from

C. Welman

lion

certain

goods,*

similar

located for this purpose, the com¬
plaints of some extenders that they

yet.

straint
Joseph

that

such people find

type of lending by a
few banks and others, the curtail¬
ment by some of the amounts al¬

inflation.

opposed

restraint.

thorities

allies are growing
unhappy
over
the

secret

friendly

our

items

Notwithstanding the

find

opposed

are

restraint.

could

$41 bil¬
of industrial expansion, at a

of our business, and yet he
learn very quickly the funda¬
mentals of good lending and ex¬
perience the glow of satisfaction
can

set,

ment of this

concerning

—

also

hear

$71

billion

and

Program

serve

fi¬

and

municipal
The

who

year

built;

nanced;
eral

;

television

personal credit.

to be cheap, plenti¬
ful, and valuable. Unfortunately,
they haven't found the formula

million

sold,

for

entirely different one for Red

fair

ficult to obtain small amounts of
:

is for money

produced,

its satellites and

the U.S.S.R. and

kind

automobiles

cannot appreciate or
reconcile the fact that the United

that

em¬

household

Nor will

issue—ex¬

sin

was

are

for that
a

being
six

there

Many

million

houses

learned

regularly

woman

automobile,

other

nimity of opposition.

observe

there

was

possibly

cept

how

one

in the Far

to you that

not report

Never

which

against

won-

China

all

n are

flation

I often

Recognition

small down-payment,

furniture

automobiles, appliances,
items? Mustn't do

very

catchy phrase,
"tight money"

part

will have any
difficulty in buying"' ing.
an

other such

labeled

have

with

beyond its

capacity
to
pay
weakens that
country's entire financial struc¬
:

our press,

padio and television, and our
of speakers, authori¬
ties, experts, and prognosticators

in¬

our

Recon¬

for

Bank

incurs additional

with

and

fair debt condition and small down-

man

with complete

say

the

and Development which

struction

with

can

reputation, in fair debt condition,

responsibility during changing economic conditions.)

self-evi¬

(1) the present instalment
(2) what banks should expect from the
on:

built-in stabilizers may lull borrowers and lenders into false
sense of security,
perceives signs of cautiousness, and cites
"Consumer Credit Creed" as guide against abdicating
primary •

yet I fervently hope we will not
attempt to compete on the basis
of unsound loans at unrealistic in¬
rates.

exposits

payment, at fair rates and reasonable terms — constituting
"one of the real bargains of our day." The ABA official warns

gainsay the fact that

the so-called "cold war", has been

terest

banker

lending situation;
public and vice-versa; :and (3) how to preserve excellent
instalment lending progress, avoid, selection controls 1 and
unbalanced portfolios. Mr. Welman points out, despite "tight
money," such credit is available to regularly employed, of

cus¬

plans for other areas,
in
Central
and ; South

America-

ployed

toms union

notably

think

confidence that

President, Bank of Kennett, Kennett, Mo.

favoring

comments

Vice-President, American Bankers Association

year

and instalment credit—

consumer

our

woman

extended by banks, finance com¬
panies, or sellers of merchandise.

By JOSEPH C. WELMAN*

trade

man

away from or is being de¬
prived of reasonable and adequate

nearing fruition,

plans

one

far

Europe has been • encouraged by
this Administration and now that
fhe

that in the United States

say

of America

They have done a
fectly grand job. They have
tributed
of

greatly
banks

our

much

group

per¬

kind of

con¬

good

done

than

any
other
banking and
bring together, for their mutual
benefit, banking and the great
mass
of' the
people.
They are

institutions;

great effect
if

our

we will assist materially in
preventing and offsetting infla¬
tionary and/or deflationary pres¬
sures.

shp.uld

trols

because

public relations work.

lending policies,

systems,

and

—

•

Commission

far

sections,

re¬

ments of

the

instalment

divisions,
our

and

our

from

own

weak¬

from

our¬

competition;

our

number

first

years

ago,
Consumer

National

Conference,
was

aware

are

while

take

this morning.

"Consumer

adopted.

and

Most
have

another

It reads,

look
as

follows:

Consumer Credit Creed

"We believe, That, in order, to
justify its charter, a bank must

is the

the

reasonable

credit

re¬

quirements of its territory as well
as
provide a safe depository for
funds;

lending

depart¬

banks have contrib¬

of uted much in the way of leader¬
ship and management. Many of
any sort of repayment plan, which
our
existed in those days;
truly great leaders came up
Today, there are in our banks this way. Many more are being
developed now. This field pres¬
many other loans classified as in¬
stalment or consumer loans which ents an opportunity for enlarge¬
would have been otherwise classi¬ ment of the badly needed im¬
fied a few years ago.
proved recruiting, training, and
I firmly believe that in no other executive development program.
segment of our economy is the The good young prospect will find
need and desire for credit so fully here that he can tfuickly get his
served at fair rates and oh reason¬ 'teeth into something tangible and
able terms
in the field Of in¬ •show "real. progress and accom¬
stalment lending.
3 believe we plishment. He is less awed by this

•

the

it, but I think it very worth¬

serve

Not to be underestimated

that

Quite

seen

the ABA.

fact

protect

Credit Creed"
of

be*

Instalment Credit

protect

Credit

out the bias and handicaps pre¬
vailing in some of our operations
—are
admittedly
tops.
Losses
have
been remarkably low and
delinquencies well in line. Credit

properly
claimed
and
shared by the men and women in
this phase of banking and by the

entertain

from doing what we
know shouldn't be done.

mostly developed in the past two
decades and, consequently, with¬

can

nesses:

pro¬

records

not

thought of favoring clumsy con¬

selves and

Instalment

do will have

our

economy; and,
joint actions are wise and

ties; and in the allocation of funds
for
promotion, advertising, and

cedures,

sound,

the
allocation of funds for lending; in
the allocation of space and facili¬
our

credit; and the in?tinctive

sense

happening. What

humanize

entitled to full recognition at the
council tables and in the manage¬
of

themselves

of the American people
brought into play. There
encouraging signs that this is

are

ment

contain

must be

earnings

have

and

the

"That the extension of credit to

salaried

uals

wage-earning individ¬
sound basis

eco¬

nomically important part of such
service;
■

"That, while recognizing the. im¬
portance of volume in reduction
of

loan

costs,

deavor to

bank

should

en¬

assist people to get out

of debt rather than into

it;' '''
;
"That, although a bank must be
competitive, it must maintain its
practices and policies on. a plane

Continued

page

The Commercial and Financial Chronicle

irnrrt

could never have Persuaded the and consolidate again—and per-*

nnnp

Continued pom page 61

mi.

«■

great majority of the millions of

•

signed to serve and has come to
serve, and may also create demands upon the instalment lending, investigating, and recordkeeping personnel to the end that
the true instalment borrower will

be neglfected. A long, hard, real-

indicate

istic look at this might

may

that these loans belong elsewhere.
If they demand^ as they often do,
the kind of skill and knowledge
our instalment loan personnel possess, and such people are not
available in the' department in
which the loan properly belongs,
then consideration might be given
to a transfer of some of these
skilled people into these other
lending divisions and their replacement by others so that real
instalment lending can continue to
function with the same degree of
efficiency and success to whicji it
has become accustomed.

still

ideal,
will, in
elude a balanced portfolio of the
direct, over-the-counter type of

practices;

uess

"That

bank should determine

hazards inherent in

the costs and

establish its loan
charges accordingly; and, finally,
"That any bank which extends
credit to individuals under these
standards of practice will merit
the goodwill and support of the
such credit and

general public."

♦
i1
be that through our experience we have gained the wis5om to refine, amend, and im-

It may

this code somewhat—and

prove

be that some small parts of
it now appear to be too stilted and
restricted—but, in the main, the
fundamental truths pointed
out

of it all the

since

way

The

gram

and

about this

wouldn't talk

type of lending for fear we would
be considered "radical." We must

to preserve
this progress, to keep for instalment lending the high regard it
now
enjoys, and to keep it the
everything

we can

is and should be in

useful tool it

of life.
If we are to do this, instalment
lending in our banks must be an
essential and vital part of a well
rounded financing program, but it
our

and

economy

our way

should not dominate or be a step-

will

...

banking if

ing

monopolize
—and
ana

onlv
omy,

extend

enen

great danger to

whole if banks should

as a

situations pedictate

and

them which will

culiar to

the borrower.

welcomfd

appreciated
management;

it must be

however

accompanied

good portion of common sense

>■'

•;

refuse

ual m the community seeking ts
lybe
aJfefjltilllfnf'w/sftoh
care of, the satisfaction of watching tlie increased fllowo:^f 1t a fen
tlJe1
Pt "le, and the gratify ng fe
g
troyearrnp,

LnnlP

ecf nut

Vnfht WhiiP in thTLin thn
Al "c? ln nnnnin have «hnwn
a

ahilitv

vpmnrknhlp

diht and
nroLrlv

the matter

nSSace

nam

thpm-

oMnstalmSt
their fin^ces

and often have become

ov^pma^ip

ynl

throu^ exnen!

savers

the

use

ir^tal-

be folly to
fail to recognize there are always

have built up a siz-

because

onerations

th_t

Qav_

mert

Out of Debt

People

Keeping

of thp kind

arp

rru

The

discussing

Ttf rf

Savings and Mortgage Di-

vision of
ers

•

our

American Rank-

own

pointed" out

has

Association

quite properly time and time again
there

that

savings

tween

are

proper

demands

other

desirable

and

upon

funds

This

sizable

their

instalmpnt
that

manv

commonlv

not

instalment

loans

into

way

eon-

have

instalment

The desire to utilize

departments

proven'skill,
princinle

technique,

for

and

commenrinhlp

"t ^s elnSSS tnd

provided
done

indi-

clearlv

banks

our

loans

sidered

sound

in-

the^need

tribute to the

lenders

this

some

'-Vlt is

found

but

balance

cated.

kind

our

SSmSit "ending
proper

and

needs

does not preclude the use of

savings

be-

savings funds

for

uses

link

mortgages

and

There

and

proper

not

the

obtaining

primary purpose of
higher rate. We must

also beware of the danger that this
tpnjpn„v
-

fjA

lir.

of a limited number of

too large

„■

borrowers,

portion of the funds

"II

de-

•

r,ego!aiY "If "I °
Yo*k jr?J?s,fr ^sf°~
cmtiomheld at the Waldorf Asv

Joseph E. Williams,

pTla Hotel

Chairman of the Executive Cornmittee> °n behalf of .",s associates,
announced the appointment of the
following Committees: , s- rr *

Liaison

Committee

for

Stock

Exchanges

XT.

Travers (Chairman),

President .Manufacturers
«

0,» ■ Frank Ji. Ormerod,
Telephone & Telegraph

or whether it is to become a chain -American

are

thev

over-encourage

nermit

ou^, operations because we aie it tney over encourage or permit
weH protected by such devices as the naive, the inexperienced, and
endorsements

renur-

flated prices there win be more
and more pressures on us to lend

iarger amounts, lengthen loan
turities>

and

reduce

ma-

down-pay-

ments as an inducement to people
to buy durable goods and to maintain full employment and high in-•
comes
is my bope and my beJief that we shall ajways be alert
to changing political and economic
conditions and wisely and

prop-

Tav

rammSH-!

d Tax Cominittee

,,.5.,..

William J. Neil (Chairman);
Vice-President GuarS,nty, T^,ustf,iCo' of New York;
J^ra"k 9;. ?traat' Vice-President
Marmc Midland Trust Co^.of New
Y°rk; Robert H. Akers, General
Ele£.tri£, C9"lpany' John G- Babcroft, Ex-Officio Assistant Vice?resident The Bank of New York,
.

Assistant

policies,

This committee will study all

j have the equal hope and
faith that we will never abdicate
our primary responsibility to see
that the credit extended is good
and not bad for the People.
There are some who believe
that this country is in for a pro-.

Pr°P°sed legislation, rulings and
tax matters that may affect the
jyork and rePort its findings to
the Executive Committee for approval so that proper action may
be taken with such proposed legislation and rulings.

our

current

l°n£ed period of so-called "tight
^
„
...
.
i
money" and that the demand for
vZ* r' P,ubhc,ty and
,
money wiU increasingly exceed
^
Educational Committee
supply- If this should be true, ; Fred W. Gundersdorf (Chairthen banks may be compe%d to man), Assistant Secretary United
take additional steps in rationing States Trust Company of New
?r allocating funds for the various York; Arthur Sundt, Union Car-

9aAb^fot^a^.ratlpn' ^

typef of loans' including instal-

Should,this happen, j-ne1 Trust rri hI-Lv wSS
There are always those who will }
* fj?
+1* a
J rnp Fv-nffiPirk*'m
~
overbuv and overborrow
Grant— ?cndinte in our institutions must coe, Ex-,Gfficio, Assistant.^Treas—
oveiouy ana overoonow. yiaru
unfair
Hi^priminatton
hut urer American Tel ^ Tel
Co
ors cannot escape responsibility resisr
uniair aiscrimin^tion ^but ; „
can iei. & rei. to. .
the

weak

use

instalment

recourse,
endorsements,
repur- the weak to use more instalment
chase agreements, and reserve ac- credit than they need or can pay

•

musI be ready and willing--to ,co-,-r This committee will recommend
onerate jn th

nrodpr

t:nn

programs

funds.

certain

Likewise,

there

fair

agendas for the meet-

s
, a^enaas tor tne meet-<
nigs, handle publicity pertaining

in tne proper allocation ol f

loanable

to the Association and educational

certain tnere is a lair lu 1 e ^otiduon ana eaucationai

UU1C1.

avocation in the making and pur- matteis, such as the course given

devices has not been fully tested V The Creed also says that our ad-

Phasing of instalment loans, and at the A. I. B. on transfer work,
of°nrofit
l^o/haidline
Standardization Committee ••

rPVY1pmber

how-

back

reasonable

tTSSSSSfS th°^e toe" " '

period

•

^but
ratS™
conHnuf to^ This
nA^de
{Assistant
William
couiq wen mean losses ana prop- nmmm. -afla.vye can iec
rmmdnd sprvW
busi

balkTand

inal sale was based not "Pon the the necessity to break down the

purpose
puipose

■

those who cannot or do not do so.

thesofe SpauVrposSe°or
purpose or maj?r
major

instalment lending

and

Borrowers Responsibility

that the old barriers between the erly adjust

Public, ana banks have been des-

le5|per purchased where the orig- plopte

of investing in

■

consider

compete vigorously at high rates
tne sole

Jl-n*!-

Those who^refuse^o consider

Voiume is generally
d

morale

In the last analysis, the quesin a weB rounded program, but; [lon resls with the. borrower as
never should we hand over com- 1° whether debt will be helpful
pleteiy the reins to others. To do or harmful, whether it is the
go w0ldd be no favor to the dealer; means of acquisition and progress,

decision.

this

his

dulls

rower,

Not for one moment should we
discount its value and advantages

circumstances

entirel^

instalment-credit

any

There would be

banking

almost
a
most

or
or

'Iri mrat'eases

refuse

community

an area or

extend
exiena

public

narticularlv wneie
where we
particuiany
we

—

through others."
In many banks, and in many areas
and communities, there will exist
the

the funds of our areas or com-

munities
munities

harmful

most entirely,
entirelv
most

sayS

able volume of business through
fhp nurpha^p
of ripalpr
pontraptm
devote ourselves al- me purcnase or aeaier contracis
or solelv
to
accentand
ieel secure in this phase of
or soieiy, to accept

eauailv

Q.eed

Many of

Exclusive

Cannot

sound cred.it policy.

■'

that "a bank
must determine for itself whether
ft wil\ offer its services directly
>phe

Thursday, April 4, 1957

around bis neck—and often that Go;.
B"11' Asstf. Vice-FTesiof hjs wjfe an(J family, But we dent City Bank Fanners .Trust
cannot, and should not, escape the Co., Arthur S. Muller, Ex-Officio
™?reJly causje tn<e dealer t<oresponsibility Qf tr
^ influ^ Assistant Vice-President Bankers
other means that have been avail^ ^ his direction. .We must have Trust Company.
' '
s° laj*. aiw
<2
" a the facilities and ability to work r\^s committee is to take up all
son to beli<eve tney will not Con patiently with him -r. to .explain matters concerning the work that
unue 10 ne avauauie.
:
. 1
over and over again our basic stems or has any relationship with
Those who Permit dealer orig- philosophy and our policies-^-and the Stock Exchanges; this would
inations to absorb their funds to convince him. that we really cover such matters as facsimile
completely will miss the thrill of want to help> not harm
V signatures, various requirements
seeing a live, healthy volume of
Under present conditions of of. Ibe Stock Exchanges and obloans made directly to individuals, modern mass production, in-> I?in!nS „Te?ieI as to tight time
well rounded pro- actively at work in providing creased productive facilities,. in- schedules re: stock splits,-stoekmost instances, innumbers of peop e wi
creased plant expansion, and in- dlvldends and stock subscriptions,

the
people in our communities, known of consumer durable goods and
to be in debt, carried a stigma as
services.
being poor managers and not quite
trustworthy. Many of us recall the
Dealer versus Direct Loans
time when a few auto loans and
I do not propose here to attempt
monthly payment loans we had to go very deeply into the queswere sort
of "made on the sly," tion of dealer versus direct loans,
long

our creed, encourages
evasion on the part of the bor-

time—but without the dealer ve- sire for permanent improvement,
hide, mass production and mass and encourages the critics of
selling, as we know it, could not .banking.
y
have been accomplished.
n
^
.

J1lir>gs they want and neea, 10 g
befoie they could acquire them by
our conduct, loans for a multitude of purposes ?avin? tmst; the pleasure and sathas come a as well as the purchase of dealer jsfaction which come in knowing
days when contracts arising out of the sale that every cr^1^°^by Individfirm

and

fixed

stand

proper guideposts for
Instalment lending

OlOCK I HDSier ASS II
-A

credit on the lender or borrower,

things, violates

these

bought

then

and

Surely, we could have done some
of it—and we do some

disrepute to
banking and keep all advertising
restrained truthful, and exact;
"That a bank must determine
for itself whether it will offer its
services directly to the public or
through others, but that no bank
should uphold or assist such others
vvhen they indulge in unfair busi-

prove- his
his outstandings"
profits; reflects
no AM10III1CGS
£
nanced cars, appliances,and house- crease
and imIfOHlltllllBfiS-

hold goods, to have come first to
the lender, arranged for the loans,

■

AM I
I OVtlllVflV
Xlln^llAll
insiaimeni llvIllIlIlW Mil till lHMl

whichwill not bring

haps again arid again—or due to

people who have bought and fi- the desire of the grantor to in-

PfliiKvl A AAVSIf Vi>
IVUdV i#
AD<%Ml»AV
Ad TAflStr'C

•

(1604)

d value of the

product

old

totamw from

feeling that thev mav

un-

meru ana vaiue oi tne proauci or oia reeling tnat tney may De un
the ability to pay and the financial wanted or their applications re-

ness

is "too

"'vaiisfeJ-8KlP-way^iBBtB>W»n

J. Richer (Chairman),

Treasurer

'The

Chase

Ranlr; Geaege-M;zBcr

acquired
through too much effort hart, Corporate_ Trust Officer
*° Permit it to be permanently Chemical Corn Exchange Bank;
d

-Walter L

PYnpfii

tpmnnrarv

Jones

Assistant Soorp-

qsmagea py temporary expedi-r yvynex i_, uones, Assistant ^ecre
ehcy. We readily concede that it taly Bankers Trust Company^-T.
conauion oi tne purcnaser, out jectea ana, at tne same time, aa
.
j
rafrv tbp lar^P
O
MacDonaH
Genpral
Motors
rather upon the liberal terms of- mit that much of our advertising "P®® not carry tne large compen- v. ivxacijonaia, uenerai Motors
condition

the

purchaser

but

iprtpd

and

at the same time

ad-

pnmnPn

will inevitably bring us
trouble and grief—no matter how
niuch reserve or how good the endorsement—and will weaken our
business; lessen the esteem in
we are normaBy held; and eventuaUy create a sour taste on the
part of our directors, stockholdcrs, management, supervisors, and
the public.
All of us are subjected to, and
tempted by, the proposals and different forms of protection offered
by customers with strong financial
Positions and large deposit balances; and I doubt very much if

fered>

there is amonS us one who can
honestly say he has not to some
extent succumbed to such influence.

There is great danger to

our

has gone too far. Instalment credit

doesn't have to be sold with the

fating balances of commercial and Corporation; James E. Robertson,
industrial lines, and our rate Assistant Vme-President City

vigor, enthusiasm, and clamor used st.ruct^resdp and sbould recog- Bank Farmers Trust Co.; George
to sell beer and cigarettes. We can nize Jbis, but we must never for- E. Wasko, Transfer Agent Atchinever dodge the fact that it is what ^
B\ere are compensations soPy Topeka & Santa Fe Ry. Co.;
it is—a debt that must be repaid, other than large balances. '
,
W. J. McDermott, United States
We can certainly sell the idea that
Instalment and consumer credit Steel/ Corporation; Herman W»
it is, properly used, a useful to61 will-not,; and should not, escape Wanilpn Ex-Officio 2nd Viceto enable people to acquire and thorough scrutiny in the proposed President Guaranty Trust Co. of
pay for something useful and en, na«onal inquiry into the nature, New York.
:
joyable, within their means and performance, and adequacv of our
The-primary purpose of this,
income; to make progress in in- futire financial system: but there committee is to attain the highest
creasing their net worths through ,s every reason to believe it will -degree
of 1 uniformity among
the ownership of goods and chat- come out all right. We must con- Transfer Agents by promulgating
tels; and to ease a temporary or tinue to so conduct ourselves that and
reviewing rules covering
unexpected bad financial situac.an always withstand search- stock transfer work and thus simtion.
.
.
-in£ inquiry.
plifying the problems of security
It is not worthy of bankers to
We have developed a wonder- holders. Trns committee will also
overemphasize the attractiveness fui new banking - service; we ffnk,,on C.CH releases and
of debt, to encourage borrowing ,n ltl/1 .
TA„ri]
,
f .f.
,nill, yandI.e
various questionnaires
just for the sake of borrowing, to
be
we
fr0m time to time. It will also

field of banking, to the maintenshould
proud of ,t
shou d
ance
healthy competition, and encourage refinancing just be- guard it zealously; and we should work closely with the Executive
?° .0ur prestige if we do not min- cause the loan is well paid down, do our utmost to improve it.
Committee and serve as a clearing
™ze Ibis practice.
and to consolidate just for the
,
nouse for questions raised by the
Dealer paper, properly origi- sake of consolidation. To consolir> •
\\r n
A JJ
members concerning procedure
nated, policed, and serviced, pro- date in order to improve one's *
Paine, Webber. Adds
; and practice. ,
vides

the

admitted

benefits

greater volume and somewhat

eas-

certainly in order; but consolida-

condition

and

make

progress

Mr.

(specialto the financial chronicle)

BOSTON, Mass.

—

Herman W-.

Williams is Ex-Officio

each of the committees.

«.

rightfully belonging to the great

jfr aad Iess eostly acquisition and tion due solely to the desire of

number

p^?t intidlys ^oSomy. 3 ^ laL^tHvoidfadng SfiSn-> -Paine, Webber,. Jackson & composed of-the'foUowing. perf

borrowers

whom

in-

fc-talment lending is rightfully de-

Banks

and

other

direct lenders

cial

facts

of life,

only to rewrite

par^er bas been added to the staff

Curtis, 24 Federal Street.

•

The

Executive

Committee " is

sons. Joseph E. Williams, Chair-

Volume

185

Number 5626

Vice-President

man,

The

Manhattan

: /.The Commercial and

Chase

Bank;
Arthur :S.
Secretary,
Assistant

Muller,

Vice-President

Bankers

American

CONSOLIDATIONS
BRANCHES

NEW

OFFICERS.

New

York

early

Transfer

CHASE

MANHATTAN
Mar.

the

7,756,947,31S

any

customers

new

other

1,027,406,571

1,073,035,283
3,731,987,213

rity

82,222,489

79,614,193

Loans

NATIONAL

NEW

Allyn,

firm.

The

current

active

than

one

year

bond

Allyn

"While

the

followed
Board

Deposits

by the, Federal Reserve

"the

the

vestors

3,708,099,539

profits

72,599,459

69,381,186

and

Govt,

Loans

re¬

money." Despite
rates,
the
market

Undivid.

for

areas

Total

2,845,221,115

672,786,918

697,433,284

1,151,935,811

1,164,754,950

profits

58,512,881

56,263,500

Loans

gained in the corporate field, with

underwritings

21.9%, but were lower than the
preceding year in municipals, "re¬
flecting in large part the prob¬
lems imposed by the
rising trend
rates."

The

'56
•

1,729,971,740

1,492,221,280

1,539,170,385

23,656,341

22,630,575

The

Allvn

organization

tains offices in
20 other

New

INC.,

CO.,

_____—

Govt,

main¬

YORK

cities, in addition to

850,252,089

854,614,967

742,001,640

745,566,397

218,806,069

211,684,375

160,594,742

179,738,532

due

and

19,141,742

17,832,862

CO., NEW YORK

TRUST

ASE Quarter Century Club
Wilmont
elected

President

Goodrich

has

Loans

835,171,185

695,201,748

733,186,326

159,463,627

171,480,416

417,903,726

405,927,296

profits--

9,171,564

8,973,905

Exchange Employees' Quarter
Century
Club.
Mr.
Goodrich,
building director of the Exchange,
joined that organization after hisr
graduation
from
the
Columbia
School
He

Engineering

resides

8801

Deposits
Cash

moval

Loans

with

Bellone, Treasurer, and
Bernard W. Burke, Secretary. The
Quarter Century Club, which was

the

from

rity
Loans

Exchange

have

for

been

discounts

Cash

NATIONAL

Park

Albert

Inc.,

Law,
advertising and

York

relations,

Wolcott

and

Associates, public relations
ol

Los

public

Francisco.
resents

relations
This

101,366,892

263,374,870

280,281,459

9,820,062

9,387,254

West

affiliation
last year

new

Coast
-

which

610,905.051

438,723,571

546,612,949

117,273,851

187,828,755
134,849,592

255,400,283

8,735,854

8,383,445

BANK

NEW

San
rep¬

the

two

public relations
was

instituted

the

YORK

Dec. 31/56

54,658,955

holdings

50,405,354

47,011,263

73,860.484

72,729, ^53

1,525.414

1,222,932

secu¬

discounts

profits

FARMERS
NEW

an¬

TRUST

COMPANY

YORK

due

U.4

rity

161,205.189
120,591,249

from

Loans

sccu-

holdings
k-

Undivided

two

initially

•

(

87,143.644

47,833,974
•

•

has

been

directors

3.318.600

2.482.497

profits—

12,987,372

12,801,777

Harold

Helm,

Chairman.
it

Marine

pany

Midland

New

will

Mr.

Hopkins has

with

continue

the

since

George

duties

Second

National

the

issuance

1922.

since

Bank

Phila¬

special

All

shareholders

present
the

right

with

the

held

part

any

thereof,

New

at the age

Scheuermann

was

Assistant

Bank

National

the

1912 to

Cashier

National

Park

1929, becoming
in

1919, Assist¬

Vice-President, 1920 and Vice-

National

Chase

National

made

President

1929, he

Senior

the

of
in

merged
Bank

the Park
with the

Vice-President.

promoted
Bank

When

1922.
Bank

Chase

Vice-

Manhat¬

John
the

ings Bank
than

of
24

Bank

Sep¬

,v,
«

Darrow

board

Second

America's

Na¬

approximately

sale

new

caster, Pennsylvania

increased

was

$900,000 to $1,000,000 effec¬
tive March 21 (50,000 shares, par
value $20).

Mr,

;

1935

Clark

Beise.

Sutton's

South

and

from

announced

was

territory includes
New York City, Upper New York
State, Vermont, Philadelphia and
southeastern
Pennsylvania, Vir¬
ginia, West Virginia and' North

stock, the
capital
stock
of
The
Conestoga National Bank of Lan¬

Carolina.

Sutton

joined

the

batch clerk,

bank

and served

lending officer at the Berkeley

and Oakland Main Offices and the

Instalment

Wythe County National Bank of

Wytheville,
with

Wytheville,
stock

common

The

Bank

Crockett,
stock

ment

$175,000;

office

under

poration

the

charter

title

and

16.

The

First

Ohio,

$400,000
fective

The
The

of March

Bank

its

capital

common

Ind.,

$250,000

dividend

and

Mr.

shares,

par

The

value

John

common

000 to

mon

Sioux

capital

new

(17,500

dent

Falls,

Bank

Form

Berry has resigned

O.B.E.,

Director

has

been

in his place..

the

20,

D.,

the

firm,

holds

the

ex¬

the

was

BEVERLY

$1,000,000

HILLS,

Cal.—Para¬

with

offices

9477

Brighton Way. Victor G. Paradise,
formerly with Morgan & Co., is
a

North¬

Bank

Securities

dise Securities Company has been

com¬

increased

Paradise

(8pecial to The Financial Chronicle)

stock dividend
(5,000 shares,

National
to

B.r

chair

the Board owing to
other duties and Mr.

Prideaux,

formed

stock

$500,000

the

Board.

its

March

the

change membership.

increased

Security

remain

Frederick

Dallas

value $100).

Effective

Sir

from

DALLAS, Texas—Metropolitan
Corporation,
Vaughn
Building,
has
been
elected
to
membership in the Midwest Stock
Exchange
effective
March
27,
1957.
George S. Rooker, Presi¬

capital stock from $200,-

G.C.M.G.,

Midwest Excli. Member

$300,000

sale

National

March

Metropolitan Daiks

Minn.,

$500,000 by

of their Board

retired

appointed

$20).

First

Rochester,

from

March

Michael

seat

pressure

increased

$300,000

the

effective

an-

ef¬

Bank

was

from

$350,000

South

following changes in

olace

has
will

but

com¬

stock

National

stock

Eng.,

Shelby

man

who

shares,

(20,000

-if

Bank

London,

31:

Leith-Ross,

dividend

stock

de¬

Sir
Edmund
Hall-Patch,
G.C.M.G., has been elected Chair¬

his

increased

March

Shelbyville,

the

nounces

value $20).

par

Ltd.,

National

cor¬

relations

Standard

Africa,

capital stock from $300,000 to

mon

The

of not less than $123,985.
it

head

to As¬

in the

years ago.

the Constitution

depart¬

At the effective date of consoli¬

reserves,

Loan

Francisco
elevation

bank

and

partment four

effected

was

San

before his

sistant Vice-President

Inc.,

Virginia, with common
$20,000 consolidated as

Credit

the

Virginia,

Crockett,

consolidation

from

for

St.

Promotion to Vice-President for

President
'if

the

legal department with the title of

past six years

and

common

west

years

Bank

March 25, fol¬

tember, 1918.

Mr.

par

Brooklyn, N. Y. for

National

chanics-American

$4,000,000.

the
head of the Bank's

partment,

subscription,

Mackey, a member of
legal staff of The Dime Sav¬

years.

tional's capital funds and reserves

effective

1947.

than 50

will be increased to

stock

for

and

Bank

1909 and 1912

between

with

from

worked

National

Liberty

for

Louis,

L. Sutton, Atlantic sea¬
representative in Bank of
Corporation, San Fran¬
cisco, Cal., and bank relations de¬

New York,

ant

the

Bank,

April

retired

St.

long illness. He had 38
years of service to his credit, hav¬
ing joined the staff of the Me¬

With the completion of this new

Mercantile

Bank

Vice-President

died

Mr.
the

lowing

share.

per

will

bank

First

additional share for each 10 shares

price of $28.00

26, after serving

Louis, Mo., died

Manhattan

70.

one

each; surplus of $195,000; and un¬
divided profits, including capital

an¬

March

Assistant

Joseph F. Thompson, Sr., man¬
ager of the Collection Department

will

purchase

with

Counsel

Bank

shares of capital stock.

have

66,

and

National

Mo., died

been

Hayward,:

the bank for

Textor,

been

Hugo E. Scheuermann,
Senior

First

"■

He
1954.

capitalization, by
12,500 additional

their
were

1949.

Vice-President

meeting of shareholders has been
called for April
18 to authorize
increase

There

has

1956,

since

G. Semisch, President of the

the

Chase

John

associated

has been its Chairman

bank

director.

been

Bank

member of the

of directors

March 8.

Company, Union City, N. J.

dation, the consolidated bank will
have
capital stock
of $195,000,
divided into 19,500 shares of com¬
mon stock of the par value of $10

Com¬

Trust

has

York

President.
His

the

Wytheville."

The election of Joseph B. Zweias Assistant Vice-President of

board

January,

has re¬
Hudson

the

"Wythe County National Bank of
it

elected

was

bank's

!|l

Hopkins

Chairman

changes in the board. I'
Mr. Andrews, elected President

of the close of business March

announced

was

Mo.,

associ¬

tired

E.
Andrews,
President,
Jefferson-Gravois Bank, St. Louis,'

other

Relly

Frederick

value

par
•

meeting

and

board

79 950 577

discounts

died

been

City,

stock effective

new

(75,000 shares,

;

retired last June.

Jr.

by the sale of
$io).

Assistant

Conn,

had

Bank

common capi¬
$600,000 to $750,000"

tal stock from

long illness. His

75,

was

Okla., increased its

ated with the Bank since 1921. He

Broadway.

Sands,

York

158,115.080

36,387,227

Govt,

118.358,205

banks

age

Dec. 31/56

$
resources

Deposits

Stamford,

March 25 after

National

Trust Company of Oklahoma

retired

The

tan

Mar. 31/57

and

$360,000 to

$10).

Fidelity

March 18

Vail,

from,

New

was

increased from

was

and

value

par

The

of Chemical Corn Exchange Bank,

was

Cash

floors,

used

the

President,

Total

elected

and

coun¬

facility

Lexington Avenues,

upper

located

York,
93,189,747
257,357.543

173,330,522

Plaza

Astor

the banks Personal Trust Division
now

Bank,

Celina,

49,613,410

BANK

Dec. 31/53

504,666.337

from

expanded

in Los Angeles,

nouncement said.

Loans

impor¬
occupying the

Far

Bank

by a stock dividend ef¬
March 19
(60,000 shares,

fective

Savings Bank."

Vice-President

standpoint of soundness
throughout the entire bank.

YORK

173,678,750

Undivided

and

include the constant audit cf loans

NEW

Govt,

Streets

include "an

side

will

nounced

announce

service

expansion

rity

CITY

Angeles,

establishment

firm'

193,215,940

96,323,920

187.331,808

banks

Frank-Guenther

New

public
sel

148,046.597

due

Lexington Avenues.

branch

three

which

The

191,048.951

resources

and

for

42-story

which will
block running

54th

will

from

533,999,157

profits..

Deposits

Coast Services

the

approximately 200,030
feet of space. The Hanover

Street

476,754,909

Mar. 31/57

Albert Frank Expands

53rd

fel

secu¬

more.
Total

new

the
GRACE

Jamaica,,

William

stock

new

$600,000

April 1 under the title

Clarence

project
to

tant

and

merged

part of iti

agreement

square

Park

facilities

Dec. 31,'5S

with

years

the

pancy

holdings
&

announce re¬

Gray,
Hanover
Chairman, stated that the lease
will provide for the bank's occu¬

601,708,874

due from

—

Govt,

Undivided

the

Mar. 31/57

1946, is composed of

who

BANK

resources——

banks

York,

business center

lease

53rd

from

New

The announcement

Plaza

occupy

Tctal

Bank,

substantial

mid-town

came

538,716,689

profits

Arthur A.

CO.,

secu¬

discounts

THE

1,316,925

operations from Wall Street to the
new

Bank,,

stock

National

( ' fi

Bank,

capital

common

Union

$300,000 to $360,000 by the sale of

was

delphia, Pa. reports that

Hanover

YORK

holdings

Undivided

1,337,746

from
_____

Other club officers elected
Wfljy;L Deposits,.
'Cash knd
John
V.
Creed,
Vice-Presiaent,

employees

due

Govt,

rity

—,—

and

banks

Road,

Brooklyn, N. Y., and has been

TRUST

Mar. 31/57

resources

1922.

Shore

resident of Bay Ridge for 25 years.

organized in

MIDLAND

14,665,560

218,444,023

discounts

MARINE

13,913,420

N. Y. and the Jamaica

of "Jamaica

9,512,354'

undi¬

and

when

Savings

9,495,295

10,510,827

profits..

The

Savings

secu¬

discounts

Alex.

NEW

Total

33,877,004

8,696,769

vided

secu-

been

one-year
term
as
the American Stock

33,208,741

holdings-

March
THE

Dec. 31.'56

$36,876,277

from

due

Govt,

holdgs

Dec. 31,'56

793,580,417

174,015,828

Govt,

curity

and

NEW YORK

Mar. 31,'57

banks
U.

Rock away,

Trust

$36,197,928
;

from

banks

Loans

Deposits

square
379.009,126 3i)0,961,831

Undivided

Chicago.

YORK

resources

William

profits—

Deposits

TRUST CO.,

Dec. 31/56

secu¬

discounts

NEW

31/57

Mar. 31/57

York, Boston

1,435,928

CLINTON

from

due

NEW

Cash

1,441,149

Astor

holdings

Total

profits—

784,944,420

Undivided

THE

17,898,228

823,530,567

resources—

rity

13,746,964

discts.

firm took

underwritings, corporate
and municipal, with a total value
of $4,736,591,000,
compared with
$4,936,624,000 in 1955, with par¬
ticipations of $88,428,000, against
$95,894,COO in 1955.

was

14,795,770

14,496,048

Undivided

rank

value $100).

par

Wichita, Kan.,

at¬

1940,
made Solicitor in Januavv
:
'

secu¬

discounts

long-term

banks
U.

398,370,511

and

6,913,568

holdings

425,457,465

Deposits

Loans

Govt,

Loans

432,824,170

Mar.

Cash

336,146,523

MORGAN

Total

8,256,854

se¬

profits—

38,154,522

—

holdgs.

37,597,157
from

due

and

Park Avenue.

part

and

Dec. 31,

31, '57

❖

Cash

Dec. 31,'56

became the first major New York

1,736,527,270

banks—

■:

$41,842,729

Deposits

The
The

Treasurer of the Stamford Savings

$41,538,691

Commercial Bank to

due

Govt,

curity

Mr.

Underwritings of A. C. Allyn
Company,
Incorporated,

interest

COMPANY, NEW YORK

TRUST

and

resources

Surplus

se¬

and

898,913,039

800,813,118

resources-

irom

1,507,858

rity

Deposits
Cash

74.805,372

1,539,255

Cash

3.137,030,771

Mar.

Undiv.

investments,"

stock

31, 1956

discts.

IRVING

individual in¬

attractive

stock

Dec.

31, 1957

holdgs.

72,912,717

Total

encourage¬

Assistant Solicitor in

COMPANY

TRUST
YORK

2,721,434,417

banks—

from

36,035,473

profits—

THE

due

Allyn pointed out.

common

3,919,860,014

and

worthwhile

offer

many

common

3,758,083,937

the

money

"continues

discts.

—---

35.684,306

1932,

officer

secu¬

Undivided

rity

resources-

Cash

Mr,

investor

basic

turn available

high

problems in
last year,"

find

can

1,184,240,523

noted,

saver

ment

1,195,588,283

curity

'tight money' policy

markets

Allyn

holdgs.

Total

stock

39,945,798

discounts

se¬

Mar.

and

Govt,

banks

NEW

142,808,479

34,668,942

Mar. 31/57

6,672,390,362

MANUFACTURERS

138,617,637
from

holdings

Total

156,127,457

31, '56

1,861,534,344

Undivid.

commented.

created

capital

Dec.

31, '57

1,308,148,997

should be

in serving in¬
institutional invest¬

and

Mr.

ors,

Loans

named

Rockaway

UNDERWRITERS TRUST CO., NEW YORK

YORK

6,691,860,149

investment

underwritings and
dividual

curity

due

attorney

$ '

Dec. 31,'56

7,426.979,040

banks—

Govt,

report of this Chi¬

headquartered

1956

152,227,014

BANK

CITY

BANK

due

and

history,
Chairman, disclosed

the annual

cago

7,485,882,769

resources-

from
U.

and

3,793,239,277

in its

year

Cash

disc IS.

Deposits

Report

resources-

banks

Cash

Total

Deposits
1,795,003,635 2,072,851,139

Total

NATIONAL

Mar. 31,'57

profits

FIRST

STERLING

6,927,736,057

Mar.

Annual

Dec. 31, '56

31, '57

se¬

;

CHICAGO, 111.—A. C. Allyn and
Company, Incorporated, added

tained

TRUST COMPANY OF NEW YORK

holdgs.

Loans

Undivid.

THE

Allyn Makes

THE

6,585.785,264
banks...

Govt,

curity

due

and

from
U.

7,529,490.137

resources..;

Cash

ship in the Association.

A. G.

BANK.

Total

Its

membership is
composed of the leading banks in
the
United
States, Hawaii and
Canada.
This
country's
largest
corporations also hold member¬

staff

dividend efective March
*

Mackey joined "The Dime"

1951.
THE

Deposits

organized in

was

1920s.

Stock

(10,000 shares,

on March 29 as
officer of the Bank. William A.

and

President, The Bank of New York.
.The

Bankers

and

ETC.

CAPITALIZATIONS

C. Bancroft, Assistant Vice-

Association

stock

Mr.

REVISED

Telephone &

Telegraph Company; Herman W.
Warnken, Second Vice-President
Guaranty Trust Co. of New York;
John

NEW

Solicitor, retired

Anzalone, Assistant Solicitor, will
take
over
Mr.
Mackey's duties
beginning April 1, ;

News About Banks

Trust

Company; George J. Kenny, Treas¬
urer,
Vice-President
The
First
National City Bank of New York;
Harvey
W,
Roscoe,
Assistant
Treasurer

Financial Chronicle

•

principal.
Also

firm

associated
J.

with

Cravens,

the

ne\v

who

was

previously with Morgan & Co.

The Commercial and Financial Chronicle

finance

can

Knowing this, I believe
I can suggest to you a few

stocks.

when

than 2Vz%.

less

buy

investors

limited rate of return just cannot

Why else would
Florida Power &

make your
Light common yielding only 3%
stocks more appealing to the in¬
when they could buy Minnesota
vesting public and thereby reduce
Power
&
Light first mortgage
your cost of financing.
bonds
to yield 4.b%,
or Paciuc
in which you can

ways

Light preferred stock to

Power &

do to make your
attractive
to
investors?

What

can

stocks

when

Obviously
tive

offer com¬

you

must be attractive rela¬
securities that are
Therefore,

mon,

you

competing with securities

you are

companies and industries
well as with government and

of other
as

Can you of¬

municipal securities.

better investor appeal
than do these other securities?
equal

fer

of Common Stocks
this

Before

question

can

investors are looking
they buy securities. 1 he
three main appeals are safety, in¬
what

just

for when

The

this

for

reasons

shift

est

But

substantial

tremes

are

capital

these

between

gain.

two

ex¬

the bulk of the inves¬

looking for all three

tors who are

to wealthy in¬

its appeal

deal

For

vestors.

person

in the 40%

higher tax brackets, municipal
bonds
give a much higher net

utility common stock
possibly do. Today such an in¬
vestor* if his primary investment
objective is income, will be much
better off investing in tax exempt
bonds.
They give greater safety,
they are available in an increas¬
ingly

ble

generous

such

reason

choose

will

investor wili

stock is because

common

that

believes

tax

good yield. From
economic point of view, your

of safety

and

securities have well above-average

essential

sell

safety,

you

modities

at very low cost so

com¬

that
the public is getting an outstand¬
ing bargain when it buys your
service.

this and

Because

the

public's desire for better, easier
living, your industry has an ex¬
ceptionally strong growth record.
It is only in the political area that

securities

your

Your

carry

common

risk.

stocks, except for

the past year, gave
tractive yields.
obtain

utility

common

could

relatively at¬
An investor could
better income

stocks

bonds

than he
preferred

stocks.

Thus, your stocks having
safety and offering good yields
did not have to give promise of

gains in order to attract
Unfortunately, in my
opinion, too many utility execu¬
tives still operate on the basis that

capital

investors.

stocks, I

industrial

One line shows the market

enough

appreciate

stock

common

after paying

even

varying degrees.

preciation

ordinary income has lost a great

that

capital gains
still be bet¬
Up until the early post World
ter
off
taking
a
lower
net yield
War II years the utility industry
successfully attracted capital by amounting to 3 to 11% annually.
This requires an annual apprecia¬
offering a relatively high degree
features in

both

offer evidence to refute

can

would

quantity, and to
give the same net yield after
can
taxes your stocks would have to
primarily interested in safety to
the speculator whose main inter¬ yield 7 to 15%. The only possi¬
and appreciation. Emphasis
vary from the trustee who is

come,

when it
comes to appreciation.
Also, if the
utility man to whom I am talking
is
overly frank,
he
sometimes
says, "Yes-you want us to get our
stock up in price so you can sell
out at a nice profit."
I think I

emphasis to appreciation are quite
clear. With current high tax rates,

can

answered, it must be determined

>*,

Thursday, April 4, 1957

tion
stock
taxes

common

to break even after
compared to an invest¬
bonds. When

just
as

tax exempt

ment in

the

about

he will

25%,

is consid¬
stocks should be ca¬
showing considerably

safety of principal

ered,

your

pable

better than

annual 5% appre¬

compete

ciation if you are to

suc¬

cessfully with tax exempt bonds.
Another

reason

for the shift in

emphasis to appreciation
changing value of the dol¬
lar.
Following the stock market
crash of 1929, thousands of in¬
vestors decided that never again

bearing

(Chart 1)
of

you

th's matter.

action

line

market

the

shows

action of the Dow-Jones index of

this

connection, I am con¬
during these postwar
years there has been a major shift
in investor emphasis from income
to appreciation potentials. This is
why such popular stocks as Alum¬
inum
Company
of
America,
Amerada, Gulf Oil, Humble Oil,
that

International

Business

Machines,
Minneapolis Honeywell,
Minne¬
sota
Mining
&
Manufacturing,

potentials

appreciation

bonds.

est is

basis in

own

now

shown

into

was

If you

catch in

long-term

better

lower

the

than

there

know

com¬

line,

and

popular concept of how

the

industrial

behave

stocks

com¬

utilities.
Actually the
upper line reflects the market ac¬
tion
of
our
holdings of utility
common stocks (Chart 2), and the
pared

tion

shows

line

lower

market ac¬

the

these

for

most

the

very

performance of the utili¬
to the

market

is due almost entirely

ties

fact that for our

ing

portfolio we have

non-urban

selected

could

see

serv¬

where we
above-average gains in

growing

utilities

per

utilities

and

city

Large

financial

The last time this was done

scale.

would

utilities

risk under

We,

market
" •
■

poor-

conditions.

shares of Florida

own

Light that cost us $1.25

$2.50

been avoided. The limited amount

investors, and my purpose in urg¬

invested

they

years

and

off, these
investors
they again had taken
substantial losses in terms of the

were

paid

found

that

switching
have

the

end

You

results.

will

note

the utilities

that

purchasing value of their dollars.
With this declining value of the

the

years

breakup

panies
the

their big¬

made

industrials

1942-1946. These were

in the years

when the basis for the
of
the
holding
com¬

prepared

being

was

investor

had

that I

confident will continue

for some time in the future.

and

opportunity

With

both

inflation

high

tax

apparently

time

be bad for utilities,
only four years when
utilities failed to better the

supposed
there

rates

with

you

can

1950,
were

some

come,

the

showing.

comparative

not such

1947

you

are

successfully

100%

could

would

com¬

appreciation

investor looks for when he se¬

stock for capital apprecia¬

lects

tion.

You

adopt many of these

can

investor

stocks

The

value

market

value

variou?

to¬

conditions.

day's market
based

under

appeal
of

element

Book
stock's

but undercurrent market
conditions it isf a minor factor,
and market values bear little re¬

value,

lationship

book values.

Some

book,
times
book value. Yield is another ele¬
ment in market lvalue but it, too,
stocks

sell

less

than

whereas others sell at many

minor factor.

current

lower

they

yield

is be¬

confident that over

are

period of years Florida will be

reporting higher per share earn¬
ings and with these higher earn¬

paying

will

ings

larger

confidence

dends. -This

divi¬
based

Florida's past,
earnings and dividend record and,

favorable

the

large degree on

climate,
Electric's-

regulatory
Wisconsin

the state.

earnings and dividend record does,
not inspire the same investor con¬
fidence

there is

in addition,

and,

apprehension about; strict regula-;
tion

the

Table

state.

the

shows

earnings,

dividend, and market price record
of

the

stocks

these

two

com¬

Note that Florida's earn¬
ings and dividends have increased
panies.

95%

115%

and

1950,

whereas

respectively since
Wisconsin's have

increases

29%

33%.,

price action of the stocks
shown even a wider dispar¬

has

As pointed out'

stock

has

during

this

Florida's

ity.

314%

ciated

Wisconsin's

whereas

This

68%,

appre¬

period,

stock

because

Florida's

appraised

up;

investors

earnings

at-

8.7 times in 1950 but having

onlv

gained confidence are now ap¬
praising them at 18 times—an in¬
crease of 107% in the ratio.
Wis¬

price-to-earnings

consin's

stock is

factors.

that
might
occur business conditions./

But the

potential when
selecting common stocks, I should
be able to tell you what features
an

cause

shown

Stocks for

put great emphasis on

Light

much

extremely

Since
the

earnings per shareparticularly con-?

higher

put a 50% higher appraisal onFlorida's earnings and to accept a

have

Appreciation

that"

appreciate, we also
that
this
appreciation

Tailoring Utility

confident

very

Power
selling at 18 times*
earnings to * yield 3%, whereas
Wisconsin Electric.is selling at 12,
times earnings to yield 5.6%, The,
reason
that investors are willing

important to a
healthy private industry facing a
tremendous capital program.
4

are

Among utilities,' Florida

ognized will operate not only to
the company's benefit but to the
consumer's benefit as well. Thus,
is

business

On the other hand, in-f

earnings

potential is an important element
in low-cost financing and if rec¬

sure

materially

under poorer

investments
maintain

the

decline, and
that earnings can-

and they are not

frankly like to see our

maintain

can

should

eerned about any minor downturn

make a
not be
We

features and thus give your

1-14-

not

much

sold
had a
Obviously we have

profit.

confidence.

period of time Internation-.
Business Machines will report}

these stocks for a long time.

While

showings

to make the util¬

Central

vestors

now.

the time

and

ity investor particularly happy. In
1954 and 1955, although the utility
pete for the investors' dollars. If
showing was not as good as that
you
will
give,
it
substantial of the industrials, the utility in¬
weighting, you will find that you vestor could not be entirely un¬
if

out

them

these stocks
undoubtedly

would

held

profit,

quick

holding

Why

over a

short-term

were

answer

volume

were

and the
for industrial

longer weight appreciation lightly

just

were

chart

the

from

The

ness

done did ing utilities to realize the import¬
effect on ance to investors of appreciation

that was
important

in gest gain against the

heavily

matured

bonds

bonds.

of
not

share.

Interna¬

1956 earnings.

present level of earnings if busi-'

Middle

share,

that

felt

be a

war

now

Power

when

1940

was

and shares1 of
slow South Utilities which cost

with

those

times

Illinois
-

regulation or we feel that
management is pursuing

wrong

Cen¬

The investor lacks confidence that

trend

the

widely between

whereas

earnings,

39.1

tion?

of local

area

share.

earnings

can vary

should there be such a wide varia¬

eliminate commitments
in
but when-/we do, it is
for some/ good
reason.
not ill ke

price-to-

tional Business Machines is selling
at

usually

growth in per share earnings have

Throughout the 1930's and the war

1956

utilities,

the

For example, Illinois

holds up.

'■

tral Railroad is selling at 7.3 times

not only from the
industrial stocks, but

is the

they put money in stocks.

earnings
stocks.

other policies.
very, occasionally / do
we
popular blue chip companies—the Only
positions
on
a * wide
leaders in their field.
The better liquidate
include

stocks

This

formula.

utility holdings.? We do occasion¬

Either

earnings

price of a stock, there is
important factor in the

increase

ally

7:4'

per

earnings ratio. The evaluation of

came

some

common

the fundamental basis for the

are

also from the elimination of a few

latter the

these

Incidentally,

stocks.

industrial

Dow-Jones

the

sale of

funds

share fig¬

per

:'/'

another

seven

The

gain and 1956.
fits purchases

in the

are

market

long-term

are

market

I would

ago,

years

share.

per

Although

it is evident that we
holaers on a suothe question, I am sure that most stantial majority of our utility in¬
vestments.
As
to frihe other 25%
of you would say the upper line
was
the industrial index.
It has of our utility stocks, we added
new
names* between
1953
had sharper fluctuations and has eight
didn't

they

ures.

to 20 years.
industrial stocks. Both are plotted
on the basis of 1938 equaling
100 Considering that several of these
are
companies that tame out or
which is the starting point on the
companies
only
seven
chart.
Which line is the utilities, holding
and which the industrials?

periods

for

investments

from

the

dollars available for the

panies in which we have had sub¬
stantial

stock is it s proipsct ve

And investors
|re not near¬
interested in the number of

ture.

are

that the most import¬

factor

emphasize the words "prospec¬
Past earn¬

folio shows that 75% of the stocks

which

single

are of interest to the inves¬
mainly as an indication of
what can be expected in the fu¬

utility common stock port-,

our

become

An analysis

fact.

common

tor

get the stocks up so that
sell out at a nice profit, it

study the

ings

was

can

tive" and "per share."

main inter¬

talk appreciation, my

earnings

that when I

the criticism

ant

compete with tax ex¬

necessary to

empt

The

value of

the "better

5%" that I said earlier

than

years

been relatively unimportant.

stock market, the more convinced

that the average

tion is far greater than

•

accomplished, but please note
annual apprecia¬

ranging

that will probably not be avail¬
dollar, more and more investors able again. In order to eliminate
are
investing in stocks for the these distortions, I have prepared
the appeals of safety and stable
dividends are all that are neces¬ purpose of obtaining appreciation a table
(Table I) showing the
sary
to attract capital and that as a partial hedge against infla¬ market action of the two groups
They buy the stocks that with 1947
anything more than a minor ap¬ tion.
equaling 100.
During
preciation potential can be ig¬ they believe will show the best this 10-year period when we had
appreciation „and this is a trend almost constant inflation which is
nored.

vinced

offer

investor

would

has

compete with industrial stocks. I
will outline how I think this can

chart has

of utility stocks, and

group

other

the

show

weighted, but for several

For the full 10-year

period, the utility gains have been
superior to the industrial gains, so
I submit to you that utilities can

yield than

Appeal

compete with industrials

yield 5%%? They are looking for of those points.
;
appreciation
and
weighting
it
As to the ability of u'ility com¬
rather heavily. i??,'?:'}..'. 47/44,4v■'/,■
mon
stocks to show as much ap¬

other

available to investors.

point

this

make

people, I am told that
utilities with their regulation and

yield

National Cash Register, etc.,

happy with gains of 26% and 13%
respectively.

with utility

Financing

Utility Common Stock
that

and

easily

cheaply.
Often

MContinued from first page

■j,

has
a

ratio

expanded from 10.5 to 13.7—-

gain of 30%.

will

that

agree

I am sure that you
Florida has low¬
stock

ered the cost of its common

capital much more than has Wis¬
The former's earnings of

consin.

$2.59

of 51/z%

share represents a return
on the 46% market price
Wisconsin with prac¬

of the stock.

tically

equal

share sells at
a

earnings of $2.46 a
31, which results in

return of 8.0%.

earlier, many of the most popular
stocks

19J3-1

have
1938

3? 40 41 kZ 43 44 45 46 47 48 49 50 51 $2

53 54 55

56*

19^

yield less? than 2^2%.

The

stocks, which we own
range from Vfe % to 8%, and even
among our utilities there is a wide
range of 2% to 6%; It thus seems
clear that stocks do not currently
sell on the basis: of yield.
There
yields

39 40

42 43 44 45 46 47 48 49 50 51 52 53

54 55 56

when

been

time|," in the market
yield wasa*more
heavily

Not

you

and

only

cost of

the

can

obtain

increased

dence,

all

important

equity capital improved if

but

higher 'earnings
investor

confi¬

improved invest¬
usually reflected
of prior capital. Cus¬

the

ment standing is

in lower cost
tomers
run,

will

benefit over the long

and the private industry

will

Volume

able

better

the

withstand

this

for

that I

reason

The Commercial and Financial Chronicle

of socialistic ventures.

inroads
It

Number 5626

185

;
de¬

the

return.

fail,

these

economies

and^nly then should
attempt to^obtain rate relief.

the "cost of money ' theory in reg¬

Rate increases, by and large
undesirable, but if necessary

ulation

should

plore

growing

the

toward

trend

and feel that anyone who

abets it is doing a great

the

disservice

private
enterprise system. Under that the¬
to

industry

and

there is no incentive to lower
your cost of capital and in fact
you can't. It would be practically
impossible to increase investor ap¬
ory

praisal
as

price-to-ear»,ings

your

Went

the cost of

up,

capital

earnings because

your

would

equity
This

your

down.

ratio

would result in rate reductions

the

which

equivalent

niinate

the

earnings.
would

growth

per

confidence

Investor

shaken

elishare

would

this would

and

be reflected in turn by a lowering
of

the

Once

price-to-earnings

investor

it takes

ratio.
is

confidence

lost,
long time to rebuild it.

hesitate

not

them.

should

our

this

tion would be given a boost.
•

At this

point it is evident that

two main proposals for lower¬

ing

cost

capital

are
(1)
share earnings,
and (2) take steps to improve in¬
vestors' appraisal of your earnings

your

increase

your

per

which is reflected in the price-to-

earnings ratio at which
sells.

first

step;

long

way

you

your stock
accomplish the

can ■

have

will

you

toward

gone

realizing

the

second step.

Increasing

1954203

There
which

Per

not

are

utility

Earnings

many

with

ways

its

return

per

earnings.

ob¬

increase

the return

in the

there

your

because

ital will rise
and

that

sure

they

not subscribe to this

point of view.

I grant that you cannot
constantly
show
substantial
year-to-year

gains in
do

not

you

per

share earnings, but I

think

this

show

can

necessary.

steady

gains even
though small, you will find that
investor
confidence
will
grow.

Chart 3 shows the per share earn¬

ings results
above

two

nues.

utilities

growth

average
you

were

with
reve¬

investor

which would you have more
fidence in? I think that a

upward

ings

trend

per

earn¬

accomplished if you
intelligent use of the five

can

make

con¬

steady

factors which will give higher per
snaie

earnings.

These

factors

follow:

Of all
per

in
:

earnings,

rate

your

the most
important. If
already earning a fall re¬
turn, this factor is probably use¬
less
as
a
means
of
improving
earnings. However, it is our ob¬
you

are

servation

that

flationary
utilities

allowable

under

earning

return.

managers

can

tion

either

in¬
few

very

are

duty

whatever

you

through

sales

promo¬

improve

1948—

than

—

■

the

that

into

went

preferred

about

was

are

position

these

unfavorable conditions.

From
you

are

should

tailor

risks 'involved.

fit the

made

Conse¬

quently, those who preach stand¬
ards
of
capital
structures
are
theorists, m my Opinion, who have
harmed the industry. At the time
that El Paso Electric was to be
divorced

from

its

holding com¬
the SEC issued a decree
pany,
stating that the minimum capital
should

the

electric company

debt,

favoable

most

have

50%

ever

had

25%

bond
will

likely

have again.
On the other
hand, the common stock market
was
relatively low in that stocks
were
selling at subnormal priceto-earnings ratios on an historical
basis.

The

ately

small

result

was proportion¬
offerings of low cost
prior
securities
and
relatively
large offerings of high cost com¬

stocks.

This

was

expensive

financing.
Was

was

gance?
with

this

cost- of

strength

added

fi¬

worthwhile,

unnecessary

Anyone

who

organizations such

etc. will

extrava¬
has dealt
as

know that there

PTA,

are

such

Stocks

Inde^ 1*14"

Utilities

D-J Jndust.

10ft
Utilities

100.CU

100.0

4.2

97.9

104.2

+40.4

110.5

146.3

+17.6

1.0

129.9

+14.4

+24.6

148.6

148.8

185.4

8.4

+16.0

161.1

215.1

—

3.8

6.7

155.0

229.4

+43.8

+26.2

222.9

289.5

1955—

+20.8

13.0

269.3

327.1

1956

6.5

275.5

348.4

had

substituted

stock

financing for actual
preferred stock financing,

the

used

price

common

stock

time

the

of-

had

which

the

was
selling at the
financing.
If stock

actually

sold

been

main¬

tain the 35%

ratio, it is extremely
that
the
market
price

doubtful
would
the

have

been

assumed

other

showing
As

were

assumptions neces¬
the
theoretical

better

than

actually
be

can

There

made

probably
the

level.

similar

that

sary

maintained

have

would
been.

from the

seen

maintenance
have

35%

resulted

ratio

poorer

earnings record. With the irreg¬
ularity of reported earnings in the

ratio

without

ruptcy,

195324

10%

common

real

risk

under

even

you

stock

bank¬

condi¬

1932

tions.

The

point that I would like to
that

should

set

think

not

you

bogey such as
35% or 40% as your goal and then
continuously build toward this.
don't

ratio

some

below

drop

afraid

trend of per share
The

use

structures

ing

should

upward

earnings.
in

factor

your

changes

capital

trend in

upward

30%

to maintain

necessary

let

obtain¬

earnings

synchronized with the
factors,r especially^rate of

other

return.
pears

upward trend

been

irie

used

by Atlantic City Elec-

since

ever

the

in earnings has
At that time

1948.

had
the
recom¬
mended capital structure of 59%,
company

debt,

15%

35%
common.
In
several
subsequent
years there was a decline in the
of

rate

the

preferred,

return

company

mid

and

offset

increased

its

this,

pyra¬

that at the end of 1956 its

common

equity ratio had declined
As a result, the com¬

31.6%.

pany has been
increase in per

each year
per

able to show an
share earnings

since 1948, and by 1956

share earnings were up 81%.

With

investor

confidence

the stock sells at

average

ratio.

thus

well

What

would tne record have been if the

Year

1.950

1856-

Florida

$1.21

per

share earnings

unreasonable

$1.90

that

assume

the

be selling at as high
price-earnings ratio as it now
enjoys. Using a price-to earnings

ratio of 15

instead of the present

17, and applying this to the pro
earnings cf $1.53 results in

forma
a

market value of 23

compared to

the actual present price of 28.

interest
latter

rates

rising.

are

case

securities

your

company

value

its

the
If

common.

the company were selling 250,090
shares—an
approximate 1-for-10

offering—it

would be obtaining
$1,250,000 less capital at the lower
price. To pay their current divi¬
dend of $1.30 a share would cost
the
company
$429,000 in addi¬
tional dividends annually because
of the increased number of shares.

Thus,

Atlantic

City Electric

used the type of

has

buildup in pyra¬

mid which I recommend.

cannot

always
what

vance

market

rising
your

trol

the

over

capital.

much

cost

your

interest

the

law

con¬

prior
es¬

supply

and demand in the money market.

Unfortunately this factor is work¬
ing against an improvement in per
share
earnings at
the
present
time in that the cost of your new

prior capital
of

the prior
As

books.

higher

capital

you

than

now

issue

new

will

rates

falling at
financing, but

worthwhile.
There

bei

the time of
if you give"

are

few other

can

sugges¬
lead to an

improved cost of prior capital.
Try to schedule your offerings
during periods when financing
calendars

not too congested.
tendency on the part
corporations to do their fi¬

are

nancing

the

first

part

the

and the months of February

year

through April

seem, most popular.
yourselves available to se¬

Make

curity analysts and make sure
they have all the information that,
they desire. Above all, don't mis¬
lead them, and don't talk down to
them.
They
are
an
important
group
when cost of capital
is

Appearances before analyst
meetings are
important,

group

but

would

that
your

capital

individ¬

recommend

ual calls with prior notice so that

questions

be prepared.

can

A pri¬

vate visit during which a security

buyer

ask questions which he

can

believes bear

confidential mat¬

ters is much better from his
of

than,

view

large

point

invitation

meeting

where

he
hesitates to ask these questions.
Moreover, he feels that he has in¬
formation
that
is .not
generally
group

available.

tioning you on
ter,
volunteer
and call

By and large this is

tablished

ad¬

security the
receptive to or

The

have

not

this enough study you should be
able to bat over 500 and this is

Capital
do

issue

determine

type

will

Invite him

Ill

Reduction in Cost of Prior

You

In the

better

early in anticipa¬

concerned.

35% equity ratio would have cost
market

fi¬

tion of your needs/Of course,
you

Thus, it is conservatively esti¬

the

who

by bank loans

during a period of declining in¬
terest rates, but it is wrong when

mated that to have maintained the

ques¬

important mat¬
the information*

visit your territory

overlooks

you.

amount

by which

can

you

affect the cost of your prior cap¬
ital is limited, but if you can im¬

it by only five or 10 basis
it is worthwhile.
Assum¬

prove

points

ing

that

earning

are

%, the difference of 142%'

you

and your bond money costs

return

works

the

benefit of

this

owner.

the share

difference

can

increased to

1.6%, that represents
improvement of over 6% iit

the amount

fit

of the

working for the bene¬

owner.

higher rates the average over¬
all cost of prior capital increases.
However, there are certain things
you can do to stem this tide to
some

at times
of

flexible

constant state of flux and
are

receptive to

one

type

security and at other times to

another

Therefore, you
should be in a position to offer
whatever security the market is

mcst

type.

have s?en
companies adopt certain patterns
of financing
and stick to them
receptive

to.

Dividends

Florida

$0.62

Wisconsin

$1.20

Florida

io y2

Wisconsin

1.25

1.94

0.70

1.30

121/2

1.93

0.7242

1.40

1542

1.54

2.01

0.80

2.07

0.87

1.50

311/4

2.05

2.35

1.021/2

1.60

331/4

2.59

2.46

1.22

1.60

4342

33}8

115%

29%

314%

which

factor

lead

can

in
per
share
earnings is the reinvestment of a
portion of these earnings.
I am
often
asked
what proportion of
earnings should be paid out in!
improvement

dividends and I have heard theo¬
rists

this

argue

point

great

length.
In my opinion, there i3
no specific
percentage tnat fits all
market

conditions

all

com¬

earlier, the
current market appears to be ig¬
noring
yield except in certain
securities,
but
there are times
when the market puts a great deal
panies.

Prices

Average Price

1.42
1.75

Reinvestment of Earnings
Another

in your financ¬
ing plans and do not get into a
corner
where there is only one
way out.
All securities markets
Keep

are

extent.

% Change

1950 to 1958

in 1956

Wisconsin

companies

construction

until the bank loans reach certain
levels at which time they are per- •*
manently financed.
This is fine

There

instead of the actual

security being

creased 68%

Record of Earnings, Dividends, and

Earnings

tions that I believe

TABLE

Comparative

the

making its early market his¬
tory, the buildup of investor con-;
fidence could probably have been
slow.
Over the full period per
share
earnings would have in¬

was

stock would

it, I believe that

know

nance

first few years when the
company

recommend

to a

whether

chart,

for

offered.

com¬

have been $1.53 instead of
Under these conditions it is

above

Portfolio Compared

earnings,

Per

the

nancial

assumptions
When

mon

bond
we

forma

pro

81%.

pre¬

market

certain

made.

reported if

$1.65.

periods when it ap¬
that your rate of return is
likely to slip, you should allow
ferred, and 25% common.
This your pyramid to rise and do your
started a fashion. Many compan¬
financing with the lowest cost
ies decided that they had to be
capital.
Conversely,
when
you
much better than the "minimum"
expect your rate of return to ex¬
and in this
they were encouraged pand either because of some new
by many outside well-intentioned profitable load, a major economy,
kibitzers.
The rush was cn to or a rate
increase, you should take
build
up
equities.
First a 30% advantage of this opportunity to
goal was set, but then this was build up your equity, but you
raised to 35%+40%, and higher. should not offer so
many shares
At the time, I
was consistently that the gain in earnings would be
against this build up and 'with
fully diluted.
hindsight I ant:sure the build up
This : policy
of
synchronizing
was a
mistake.-During the period
changes in capital structure with
of this build up, we were having
other factors in order to maintain
structure for

conditions

the

earnings

would

con¬

pattern

paring

been

lower cost of money, take a much

could

Such

35% equity ratio had been
maintained year by year. In pre¬

compared

smaller proportion, of revenues or
net income.
Although I do not
.

though market

poor.

might consist of first selling com¬
mon
stock, then selling preferred,
and
then
selling bonds and re¬
peating this in rotation with no
thought given to existing market

earnings

would

much

meet

pricing point of view,

And

are

Another chart shows the actual

dividends

happened.

you

stronger

structure

2.1

the

standards

companies

worst

ho /one pattern "that
applied to all segments of
the industry or to all companies
within a given segment. A capital

Change

weather

today's

-Today

can

—16.8

2.3

how

by and large this

make

There

2.2

-f 12.9

And

extremely pyramided
companies,
there
were
few bankruptcies.
Some

arrears

but

everything
else
being
equal.
Therefore, I thihk there is much
to be gained
by a judicious use
of your capital structure.
This
begs the question, "What should
a capital structure be?"

Indudrial

history.

industry

operating

•"

versely, if the proportion repre¬
sented by common declines, per
share earnings will be
increased,

(Market Performance of Utility

1947

actually lost

you

greatly superior competitive po¬
sition than you were in 1929, the
labor
saving devices
on
by common ecfuity, it results in' many
proportionately heavy offerings of your lines are even more of a
common
necessity
than
they
were
then,
stock,1 and this dilutes
the per share
earnings.
Con¬ and fixed charges, because of the

TABLE

Annual %

long
finally

was

balance for the only

built up,

I)-J Indusl.

de¬

few

very

present

chooses to build; up the proportion
of its capital structure represented

not

your

cost reductions to

VeT

the

Changes in capital structure can
have an important bearing on per
share
earnings.
If a company

maximum

you

earning this return, it is
as

service

mon

present

conditions

are

rates

consumers are

ever

Return

factors which affect your

return

the

holding

Capital Structure

•

Rate

encount¬

was

that most

are

time.

the

only
but

util¬

period of time accounting most utilities had little
will < suffer or no common equity, and some
service and eventual-' had actual deficits. Yet, outside
over

interested

and

your

storm?

to face

that families

did

cap¬

ly from higher rates. With mil¬
ky services at such barga.n prices,

many

feel that regulated utilities cannot
show the required growth.
I do

time

can

your

severe,

doubled

life¬

our

were

Not

customers

capital.

even

ditions

customers

your

from poorer

over-all invest¬

this

for

maintained, the cost of

proportion, your cost of capital is
unchanged, and you have no im¬
portant reinvestment of earnings.
is

continue

foreseeable future
demand

Unless investor confidence

ment remains constant, your cap¬
ital structure is kept in a constant

will

then.

upon

unfavorable to

operations

pression

attracted at low cost.

and

tremendous

per snare earnings if

I doubt that we-,

drawn out

rigidly

maintained?

the

ity

upon your com¬

the

original capital structure had been

sion.

conditions

test

supreme

that would have

ital is to be
There

the

time, will be called

you

can

answer

recalling the experience of utili¬
ties during the great 1932 depres¬

ered

vious that physical expansion will
not

are

extrava¬
this question,

unnecessary

To
make

importance of main¬
taining adequate earnings if cap¬

limited by regulation can increase

its

let

after

you

constantly impress
mission

gances.

you

connection,

what

Your

cost
of
capital would be
considerably higher if not prohib¬
itive,
and
government competi-,

things

then

you

(imr 3&J

weight

said

yield.

out for any company

pends

what the company can
the retained earnings.
If

do with
a

company

will

tionate amount of
and

What the pay¬
should be de¬

can

earn

issue a propor¬
prior securities

full return

the

the
be quite

total investment, the return on

reinvested

earnings

can

Under these conditions the
company is justified in having af
large.

Continued

page

The Commercial and Financial Chronicle

Thursday, April 4, 1957

(1608)

that I would like to mention. Your

Continued from page

should

earnings

reported

temporarily inflated

this instance the
proportionately
large
reinvest¬
ment of earnings at a high return
can
contribute importantly to an
upward trend in per share earn¬
low

payout.

other hand,

the

com¬

risk

bought

and

market

the

stockholder.

the original

rights offering either dilutes
stockholder or forces him to

not
A

tinue to expand.

the

in¬

inflate

much

earnings

long

you

con¬

Interest charged

construction, if too liberal, can

earnings so that

reported

means

terest

investment.

effect

minor

company

that a
upward trend in earnings

My main thesis has been

have only
the trend of steady
and
dividends

increase

small

your

year is highly
impressive when

rate each

dividend

desirable and

is examined.
can employ re¬

the long-term record

However, if you

confidence.

Confidence

can

earnings.
Some

to his

add

such

For

reinvestment

the
a

him

force

essential

high appraisal of your earnings
which, in turn, will give you low
cost
financing.
However, there

that influence
investor confidence, and the most

dte

Also, confine the amount of po¬
tential

dilution

securities

clauses

investor

are—working for the
you keep your payout as low as
possible consistent with a small interest of the stockholders who
annual increment in
your
divi¬ own the company—which they do.
Under our free enterprise system,
dend rate.
V
management operates a company

capital.

its

benefit

the

lor

Offerings

Stock

be avoided.

should

lier,

timing

the

chronized

with

As stated

should

ear¬

be syn¬
in your
this the

changes

But

paid.

return.

Beyond

Unfor¬
to sell stock at successively higher tunately this is not. so, and there
prices on each subsequent offer¬ are too many officers whose main
ing.
Thus, even your newest objective appears to be to main¬
share owners would
not
be di¬ tain their high salaried positions
luted.
While this may sound dif¬ and the prestige that goes with
would

desirable situation

most

ficult, it should be generally pos¬
sible if you have a steady upward
trend in earnings and dividends.

shareowners.

its

ests

Although some
have already applied for compen¬
sating rate increases, damage has
already been done to confidence.
In
investment circles, California

the

has

reputation of being very

form of

tend

extra dividend.

To summarize, I would like to
you
one
final chart.
This

show

the

shows

chart

earn¬

1949' of

since

record

ings

per

From

the

long-term point of view, they
better off if you do not offer
through rights. Those who sub¬
scribe
may
be
better
off than
are

those

\yho do not

scribe,

cannot sub¬

actually
it
is
agent, the printer,

the

but

transfer

and
the underwriter who get the most
benefit from a rights oifering.
It
is an expensive form of financing
for

the

utility.

The

you

get from such

the

goodwill

only

benefit
offering is

some

short-sighted stockholders.
to

are

get

even

have

must

this,

If you

rights
in

and

or¬

ten years

average

50% and wage
rates had increased by an astro¬
nomical amount.
Then he added
had declined about

share earnings
during this period.

that

you

dence

10-year record of

issue

number

same

you

are

dollars

priced the stock

than

at the

I noticed that two gave the
record of earnings per share and

mar¬

showed

this

basis.

for

holders
them
In

the

than

occasional
addition

dilution

bulk

will

your

done

most

rights

Don't .be

depressed

deceived

when

their

market.
you

see

this

tively

ashamed of the
the stock
company sells at a
rela¬
low relationship to earn¬

they

record.
of

ings.
There

were

I might add that

influencing

few

investor

final

factors

confidence

such

runners-up

Power

Corp., Texas Utili¬
ties, Houston Lighting, etc. More¬
Florida P. & L. has certain

over,

"hidden

the

real

earnings"

initiated,

which, known

would

lower

price-earnings ratio
■'"X-

what.

cently

McGregor

addressed

its

some¬

the

re¬

York

New

basis
100.
It has
117, 133, 143,
index

107,

106,

100,

This

167.

been

has

accom¬

record

has

been

102,

106.

record,

has

what

basis

89,

90, 39,

101,

92,

100,

this

With

index

similar

earnings

contrasting

is interesting to see
happened to the price-

In
1949,
Com¬
pany A's stock sold at 10.8 times
earnings, but by 1956 this had
increased to 17.3—a gain of 60%.
In the same period Company B's
ratio had expanded from 10.3 to
ratio.

earnings

38%. Company
67% gain in
earnings and a 60% increase in
its price-earnings
ratio, has ap¬

A's

—

gain

with

stock,

preciated 167% during this sevenyear period.
This compares very
favorably
with
most
industrial
stocks and has materially lowered
the

capital. Company B's
has appreciated 46% during
of

cost

stock

this
rate

not

period.
of
as

less

compound

This

than

6%,

and

municipal

has

his company.

and

enjoyed

trend

the

Florida

the steadiest growth

enjoyed by any state during
years since the Civil War,

the population is expected to

gain

80%

the

decade

ending

Every week, on the aver¬
age, 3,500 people come to Florida,
which

The

seekers.

with

fewer

than

2,000

some

state

job

are

ended

people

dustrial

stocks.

you

can

program

compile

Company
trouble
you

A's,

not

has

it.
If
record such as

you

will

attracting

better

the long run to

tremendous

ahead

have no

capital.

Company
ability

B's

capital at reasonable rates.

that

1946.

additional 220,000
completed by the
1962.
The company has
half interest in a 150,000

units

end

about
kw
to

atomic energy plant expected
be in operation by the end of

1962.

Florida Power & Light has been
in

fortunate

having

a sound reg¬
The company has
automatic rate adjustment clauses

ulatory

setup.

covering

its

all

nearly

its

business,

stabilizer for earn-*

ings and thus aid the
finance

company

tremendous

1956

growth.

income

net

perhaps

such

During 1947-

manufacturing

new

created in Florida than

were

great industrial

and

states

Pennsylvania,

and
since 1954 that growth has accel¬
erated
rate

than

double

the

but

rising

1955.

nation's

de¬

states 40%—

some

Florida showed

over

rates

gain of 8%

All except three of the

largest

companies

life

insurance

actively.u(making
mortgage lpans in Florida.
Defense industries, faced with
the

are

urgent

need

for

en¬

more,

gineers and scientists, have found
that employment in Florida
has
a

big

panies

appeal. Hence, these com¬
and others have been lo¬

cating

factories

new

facilities

Aircraft,

research

Florida:

General

Lockheed

Electric,

Pratt

& Whitney, Combustion Engineer¬

in oil

period

1920

west

coast

and

36.8%

well

the

east

central

and

north-central Florida.

include

served

lower

the

most

will

residen¬

lower

with

and

recapital¬

was

equity ratio

the end

(which

increase

this

has

1956

re¬

straining effect on earnings by
reducing leverage) share earnings
increased
in
every
subsequent
By 1952 share earnings had
nearly doubled the 1947 figure of

year.

(in

looks

and

740

easilv

could

Reference

the

reported).

was

made

was

earnings."

"hidden

though 1957
1952's $1.42

double

$2.59

1956

above

referred

This

company's celebrated hur¬

its substantial
acquisition ad¬
justments, and the fact that "in¬
terest
charged
to
ronstruction"
ricane

reserve,

for

charge

plant

discontinued in 1954.

was

The

stock, which

common

onlv

sold

earnings

times

when first distributed to the pub¬
in

1949,

advanced from
to last year's
fafter adjustment for
has

of 8%

low

1950

the

SDlit).

2-for-l

4614

around

The recent price

the

with

compares

of 4314-44%.

1957 range

J. C. Wheat & Co.
To Admit New Partners

The company, the state's largest

along

this

and

years,

this had increased to 38%. Despite

the past decade.

operates

Power "& Light
a
substantial

Florida

result

P. & L.'s sales increased

utility,

1947

28%

high

turing
plant uses
about
18,000
kwh annually—six times as much

gas

and-

rates.

tial

ized

each

Florida,

year

for

result

probably

general

manufac¬

amount of gas for boiler fu<d over

but

the

When

natural

about

contract

will

brings

Florida

half.

the

are

clauses,, can

reverse.

pipeline

lic

work

Florida

Glenn L. Martin Company. Indus¬
trial development not onlv helos

prices.)
protective

new

economy
in

Edison

These

ary

worker

except

being sharply reduced by the rise

ing, Monsanto Chemical's subsidi¬
Chemstrand,
Sperry
Rand,
Minneapolis Honeywell, and

clauses

California

Florida

interest

have,

not

industrial business, the

Southern

previously set.

For the first ten months of 1956,

California

earnings of some utilities such as

1954,

(In

adjustment

these

suffered

have

would

the

sharply, and

utilities

the

where

incident,

Suez

correspondingly.

also

jobs

the

price of oil went

year earlier, and the 3%%
unemployment was about the ir¬

Cities

Miami.

Miami

RICHMOND,
J. C. Wheat &

April

Va.—On

Co., 1001 East Main

Street, members of the New York
Stock Exchange,

will admit Irving

Beach, West Palm Beach, Daytona

L. Erittle and Lawrence B. Wales,

Beach.

Jr.

Coral

dale, St.
Ft.

Gables.

Augustine,

Mvers.

The

Ft.

Lauder¬

and

area,

and

Sarasota

tourist

vegetables

and

coast

citrus

fruits in most of the remainder.

98% electric and 2% gas, but

the company's gas

are

been

48%

sold.

prooerties have

Electric

residential.

commercial 8%

his

firm's

Norfolk

Arcade,

39%

electric

the

firm.

co'-n-

rates

The

company

huge

rapid

confident

growth

construction

from

Bernard

partnership

Join Gill-Harkness
(Sr>ec:al to The Financial Chronict.z)

and

program

LONG

per

continued

Selden

Resident

he is

1, George S.

April

retired

industrial and 5%

residential

of which

revenues

kwh, and annual usage
of 3,502 kwh, compare with 2.600
and 2,956 kwh nationally.
3.070

office,

the

in,

headquarters

Jr.

government and municipal. Aver¬
age

partnership. Mr. Wales will

Manager.

The company's revenues in 1956
were

make

trade

the chief activity in the east

over

continue to attract

present.'capability

times
times

planning three
kw

reducible minimum.

now

Your industry

adding 640,000 kw to be com¬
pleted by the end of 1959 and is
now

unemployed

is
in¬

bonds or

2.3

and

1962

without the automatic adjustment

attractive to( most investors

either

kw,

boards.

Florida

19%—in

record on an
1949
equaling

that

Following

clined

would like to read you its earn¬

It vis estiV
it "will need
generating capability of 2,375,000
drawing

mated

Society of Security Analysts and
told
a
"grew-some"
story
of

financing,

Light Company
the

which act

Smith

record. I question your

are

on
mortgage
building in the

capital

was

with

Florida

the

respect

competition

home

didn't think it
important statistic or be¬
they

keen

with

since

damper

giving

cause

sell

commis¬
sion.
made a
strong effort to show some in¬
crease in per share earnings each
year
and has worked diligently
to strengthen investor confidence.

the stock¬
made out on a per share
don't know whether this

nothing to indicate how

because

rights.

stockholders

and

was

being expensive,
a rights offering
usually depresses
the stock during the rights period
and

ber

stock¬

number of customers,
per customer, num¬
of employees, average wages,
a steady decline in rates, had

holders

unnecessary

al¬

units,

cal

dividends obtained by eleminaiing
more

third,

impressive
performance in growth in physi¬
it

though

consumption

The

paid.

resulting unnecessary
dilution will not help your pershare earnings. Over the long run
the higher per share earnings and

ket.

glancing
perform¬

desk.

at the

ratio,

two

the same
Company A has

regulation

14.2

reports

three

week

came

dividends

going to have
shares to get in the

you

excellent job.

last

Just

This

means

How do

suppose investors felt when
offered these figures as evi¬

ance,

were

per

10%

give them value, you must
price the stock below the market.

der

the past
residential rates

pointed out that during

> our

the

value

some

management.
Re¬
cently I heard a talk by the presi¬
dent
of
a
utility in whicn he
of

might
the title of

with

156,

change

Light

companies operating in contigu¬
ous
territory and subject to the

been

pany

picture

Michigan

who had avoided the use of
dilute
per
share
earnings,
I preferred
stock in his capital plished without the help of a rate
increase—the return has actually
strongly recommend against the structure. His reason for so do¬
offering of stock through rights. ing, even though it would benefit slipped. Company B on the other
hand has had
a
spotty earnings
Some stockholders are in favor of the common stock, was that under
record
as
you
can
see and
has
rights under the false impression modern indentures if they went
done very little to stimulate in¬
that it gives them a good invest¬
into arrears
for a certain num¬
vestor
confidence.
Its
earnings
ment opportunity or that it is a
ber of
quarters, there could be
because rights

Largely

this

I was talking

ago

will increase.

confidence

Summary

financial officer of a com¬

years

of rate relief.

regulatory lag can be reduced,

investor

with

few

with

price of oil.

ings

office.

the

which,

Today

believe that these

two objectives

latter

This

confidence

slow in the granting

lay claim

P-E

I960.

common

will be bet¬
ter served under the profit system
price level is important.
If you
which leads to more economical
can sell stock above its book value,
you
add to per share earnings, operations. Since this is so funda¬
everything else being equal.
If mental, it is generally assumed
that management always has
as
you sell stock below book value,
its primary
objective the inter¬
you dilute per share earnings. The
of

rate

schedules

vulnerability.

results in higher cost
earnings of utili¬

turn,

in the

fuel

"premier utility growth com¬
pany," since it was selling re¬
cently at about the highest multi¬
ple of earnings (18) and returned
the lowest yield (2.8%) of any of
the leading growth companies in
the utility list. Of course, day-to¬
day market changes might change

adversely affected by the increase

reasonable rates
labor is being adequately

and that

lack

rate

Power

the

and

stockholders. If this were not so,
factor affecting the
utilities
might just as well be
share earnings is the
publicly owned. Of course, it is
policy adopted in connection with
to the long-range interest of the
common stock offerings.
The best
stockholder to make sure that the
price possible should be obtained
customer is getting the best pos¬
and'all unnecessary dilution

service

perhaps

operating in California where
there are no fuel clauses are being

in per

sible

Florida

Chairman

ties

final

The

trend

that

their

hurts

Common

Florida

minimum.

added

convertible

from

utilities

Electric

have

—which you

space

By OWEN ELY

common

advantage important of these is management.
You
should at least give the
from the stockholders'
point of
view, I would
recommend that impression that you are hired help

tained earnings to good

try

you

rec-

offerings so that
they do not come too frequently.

factors

other

would

Thus

that

commend
your

Utility Securities

this line,

Along

reinvestment of
crease his investment in the com¬
there
is
the
risk
that
when it
of building
pany/He may not be financially runs out earnings cannot be main¬
up its equity ratio and so does not.
able to increase his investment or tained. The
issue a proportionate amount of
quality of your earn¬
he may already have all he wants
ings has a considerable bearing
prior securities, or if it is unable
invested in the company.
If
not,
on
investor
confidence.
to earn a good return it is not jus¬
he can always add to his invest¬
tified in retaining a large portion
The constant offering of com¬
ment
through purchases in tne
of its earnings.
Since the stock¬
mon
stock or the threat of over¬
open market.
holder can reinvest these funds at
hanging dilution from convertible
a
better rate, it is against his in¬
securities
will
disturb
investor
Other Factors Leading to Investor
the

uses

pany

Public

decline.

substantial

I think that tax
savings resulting from amortiza¬
that a rights issue has been fully tion of emergency facilities should
subscribed.
The chances are that, be normalized. Tax savings from
a
majority of the subscriptions accelerated depreciation are more
came
from
rights
that were questionable and do not concern

from

ings.

Financing

Utility Common Stock

not

that there

of
has
on

BEACH,

Bethell,

Edward

Cleven

Gill-Harkness

Building.
with

Calif.—Martin
B.

Norman

All

are

Co.,

f were

Kostman, Inc.

Best
now

and
with

Security

previously
.

♦

•

Volume

Number 5626

185

;

The Commercial and Financial Chronicle

(1609)

■

Continued

from first

page

that

important

any

downturn

business is under way or that any
significant easing is ahead of us in

the capital markets.

Capital Maikets Outlook
year

this

3.43%

from

December

last

here,

It has since recovered
stands
at
about

later,

cline

year.

and

currently

3.30%.

Likewise,

Poor's

Standard and
yield
on
high-

average

municipal

grade

declined

bonds

from 3.44% in December to 3.22%
in

with

mid-February,

again

Moody's Aaa
bonds fell from 3.75%

yield

average

corporate

December

March.

pub¬

two months of
out at yields some¬

of 1956, but here

there

has been

rates

some

weeks.

recent

moderate

again
stiffening in

easing

likewise
conventional

were

the

.Signs

mortgage
market
during
Feb¬
ruary." The big question before

therefore,, is
whether
the
moderate easing which took place
in the capital markets in the first
two months of the year indicated
us,

trend

cent

sist
♦

whether

recovery

in coming
to

order

the

re¬

in yields will per¬
months.
v
this

analyze

ques¬

tion, I would like first to review
some
of the
signs which many
economists think

now

point to

can

residential

far, if indeed it develops

all.

housing. There are many hous¬
ing
analysts
who
believe
that
resistance to high prices

consumer

in the

housing field is

of the

Those who anticipate some eas¬
ing in the capital markets during
the rest of this year call attention
a
number of developments in

the

national

economy,

follows:

(1) A great deal of stress is laid

the apparent leveling off in

upon

business and

industrial

plant and
equipment expenditures. The Mc¬

into balance with the de¬

mand.

(3)

Industrial

the

Survey,

National

Conference Board data

bank

erable

ex¬

penditures, and the SEC - Com¬
merce survey on plant and equip¬
ment expenditures are all cited to
indicate

loans

that

some

the

and

equipment
Although it is

tures.

steam

expendi¬
admitted

that the record annual rate of $38

billion,
ond

reported

for

the

sec¬

quarter of 1957 by the SEC-

Commerce

survey,

healthy

one, much is made of the fact that
this rate represents a leveling off
of the rise

in these expenditures.

The explanation for this

ment,

which

widely

develop¬
accepted

among business economists, is that

profits rates have de¬
clined to a point where at high¬
corporate

interest rates, business concerns

raising serious questions about
going further with their plans for

are

expansion.
ed out that

In addition, it is point¬
capital spending moves

and

waves

that

leveling off heralds
most

not

are

recent

the
an

present

end to the

and

movement

the

this

of, these expenditures
which
applies pressures to the
capital markets.
(2) The second most important
sign of easing in the capital mar¬
which

frequently

men¬

tioned is the persistent decline in
of

seasonal

time

greater

same

It is

decline

has

year

1957

than

been
last

was

re¬
was

last year.

(4) Another sign of ease that is
frequently mentioned is that man¬
at

much slower rate in Jan¬

than in

uary

The

1956.

inventories

the

last

quarter

question

been

has

therefore, as to whether
we may not be moving into a pe¬
riod of inventory liquidation.
raised,

Still

another

crease

has

sign

place during

This

shows

disposable

fourth

in¬

the past
personal

that

saving amounted to 7.6%
sonal

ease

moderate

personal savings which

taken

year.

the

of per¬

income

the

quarter of 1956 as com¬
6.8%
in the fourth

starts.
the

A
fact

great
that

deal

housing

have currently fallen to a
seasonally adjusted annual rate of
910,000 as compared with 1,127,starts

some

the

fol¬

are

business

whether

downturn

the

Actually, there is still

deal

for

room

the

Another

that

question

point

whether

(7)

may

Still

often

sign

another
is

cited

basic

that

industries

some

have

the

and

retrench this
their borrowing activities.

consumers

has

credit

levels

raised

frequently

consumer

record

not

year

ease

the

shown

the

resiliency this year which had
been expected by them. Frequent¬
ly mentioned is the automobile

industry,

where

that

noted

Business and industrial plant and

equipment spending is still
creasing even though there

in¬
has

been some slackening in the rate.
Moreover, despite narrowing prof¬
it

business and industry to substitute

capital

equipment", for

high-cost

labor.
In

residential

construction

field, despite the fact that hous¬
ing starts have declined the dol¬
lar

amount

struction

residential

still

Added

to
of

this,

con¬

record

the

total

commercial and

industrial construction still places
aggregate construction expendi¬
tures

record

levels.

the

housing field Congress is strug¬
gling with the problem of how to
increase

the

volume

financing

for government-insured and
guar¬
anteed
mortgages,
where
the

major part of the decline has
curred.

have

soon

providing
down

inevitable

seems

shall

for

that

legislation

reduction

payment

oc¬

requirements

under the FHA program, or as an
alternative a substantial increase
in

purchases

sured

and

the

government-in¬

guaranteed

mortgages
such

government through

agencies

the

Federal

National

use

the

National

Life Insurance fund.
both

ments

Service

We may get

easing of FHA down

pay¬

and

an
expansion in gov¬
purchases of mortgages.
going into detail, all of

ernment

Without

the devices to

expand government

purchases of mortgages will re¬
quire the U. S. Treasury to raise
new
money in order to support
the purchases. There is no escap¬
ing
the demands which
would
thus

kets.

put

the

Government

capital
action

the lines indicated could

activity

the

mar¬

along

increase

residential

field

rather

substantially. For a time at
least the mere availability of fi¬
nancing on easier terms for gov¬
-

have become

comfortable in its
the

demands

bit

ability to meet

placed upon it.

Finally, considerable em¬
phasis has been placed upon the
decline in the stock market which
took

place in the

months

weeks.

The

that

the

gradual

basic

couple

year,

recovery

weakness

both

first

spite

recent

argument here
of

stock

prices

depressing influence

consumer

and

business

expectations.
These
which
ber
as

the principal
increasingly large

are

signs
num¬

of economists

are pointing to
suggesting that
a
business
is already in progress,

downturn
or

imminent,

that along
easing in
the capital markets.
But, a great
deal of this reasoning is still quite
"iffy." The early months of the
year seem to be a time in which
many economists are chronically
with it

and

will develop

Still

another

reason

doubt

important downturn in busi¬
activity and consequent eas¬
ing in the capital markets is the
any

pessimistic about the business out¬

fact

that

incomes

are

consumer

ex¬

personal

still

rising
penditures.

are

the

expendi¬
record

a good
optimistic

room

about the business outlook

and to

skeptical about the possibility
of
a
business downturn, leading
the way to greater ease
in the
capital markets.
V
.

Reduced Liquidity

is still

The

rate

for

reasons

which

not much of

relative

savings

Similarly,
in the

have

made

dent in the shortage

corporate

demand.

profits

rose

fourth

doubting that

sub¬

any

the

forward

months
For

the

thing,

one

investment

commit¬

ments of financial institutions
As

heavy

the

result of the

placed
most

these

built up

stantial
from

part

normal

meet

have

for

flow

several

Indeed, in order to

some

is not

sub¬

cash

sources

months ahead.
it

their

com¬
a

these

commitments

unlikely that there will

further

government

liquidation of
by
these

securities

institutions.
It

important

financial

rienced
to

recognize,

system

reduction

raise

cash

markets.

that in

for

expe¬

its

the

ability

investment

last

several

institutions

consistently

reduced

ings of U. S.

years

have

fi¬

rather

their

government

hold¬
securi¬

ties and other saleable assets.

Al¬

though the end is still not in sight,
the relatively low holding of such
assets, plus the capital loss which
be

must

taken

restricting

much

flow.

This

reduced

sale, currently

savings

institutions

their

regular cash
phenomenon of

same

liquidity

also

exists ; in

places

much

corporations
short-term

and

pressure

borrow

Federal

Reserve

Board

index

industrial production in February
was

only

one

point

below

the

peak of 147 in December of 1956.
Added to

this, according to

pre¬

the

thinness

securities

the

market,
to

prone

sudden

market

psychology.
by the
possibility of a
modest issue of a long-term secu¬
rity, for example, is enough to set
off quite a movement in the
yields
mere

announcement

Treasury

the

long-term
yields

not

governments.

outstanding
they likewise

bonds,

cor¬
are

good thermometer of basic

conditions in the

capital markets

because of the limited market for
them.
»<o
Federal

Reserve Policy Change

Finally,

no guess about the out¬

look for the

capital markets would

complete

the

outlook

policy.
been

the

without
for

discussing

Federal

Reserve^
matter of fact, I have

implicity assuming that the

general

economic

balance

picture

this

during
will

year

such that the Federal Reserve

thorities-will
ease.

cautious

be
au¬

about
credit

They will undoubtedly want
,

clearcut

evidence

downturn

before

toward

expect

such

business

they make

ease.

any

Since I do not

clearcut

evidence

develop, I believe that the Federal
Reserve policy will continue to be
in the direction of credit
restraint.
Just as has been true in
recent

months,

a major objective of the
Reserve will be to con¬

Federal
duct

their

operations

such

to permit the interplay of
demand and
supply forces in the
capital markets. As I have indi¬
way as

cated,

expect

produce

these

comparative

forces

stability of

interest rates during the remaind¬
of, this year at around present

levels,{

long-term

-'tjli

t;,

•: s ■'<!:}'/fi,

$20 Million Bonds of
Los Angeles Districts

money

markets.

In addition, it is important to
recognize that, if financing should

Offered to Investors

become

more readily available on
terms,
there
are
many
pressing demands for capital

Bank of America N.T. & S.A.
and

easier

funds which have gone unsatisfied
in the past year which will prob¬

ably manifest themselves very
promptly. Prominent among these
demands for

are

schools

funds to

finance

and

highways and public
seems .likely
that if
credit
becomes more readily
available this type of postponed
demand will soon be brought into
play.
utilities.

The

Outlook

Against this background, what
can

conclude

one

about

the

out¬

look for the capital markets dur¬

ing the remainder of this year? It
do

that whatever changes
in basic long-term

occur

interest rates will be gradual and
of minor amplitude.
That is, I
think

that

rates

will

charac¬

associates

ripe for another rise in rates

the

order

same

time I

material
markets.

last
see

year,

but at

prospect of

easing in the cap¬
The backlog of in¬

are

City School District
High School
District
3V4% bonds, Election 1955, Series
C, maturing from May 1, 1958 to
1982, inclusive.
The bonds are
priced
to yield
from 2.10%
to
and

City

3.20%, according to maturity.
Other members

Security First National Bark of
Los

Angeles;

tional

Angeles;
Dean

Bear,

Witter

Staats

Barth &

occur

this year.

I would like to make this

qual¬
however. We may wit¬

ification,
ness
fairly substantial swings in
the yields on government securi¬
ties. Aaa corporate bonds, and sim¬
ilar securities. These swings could
conceivably

take

place alongside

Stearns

Co.;

Carl

Shearson,

Kammill

Company of

drews

Co.;

Loeb,

Co.; John Nuveen &

Trust

venson

William R.

Co.; Reynolds & Co.; J.
&

Co.;

Na¬

Co.; Clark, Dodge & Co.;
&

high level business ac¬
tivity, make it difficult for me to
see how any
material easing can

Seattle-First

Bank; California Bank, Los

Rhoades

continued

offering

Pierce, Fenner & Beane.

Laidlaw

and

the

City Bank of New York; Bankers
Trust Company; Blyth &
Co., inc.;
The
First
Boston
Corporation;
Smith, Barney & Co.; American
Trust
Company, San Francisco;
Chemical Corn Exchange Bank;
The
Northern
Trust
Company;
R. H. Moulton &
Company; C.'J.
Devine
&
Co.;
Merrill
Lynch,

the

commitments

group include—The First National

dammed-up capital demands, plus

vestment

offering $20,000,000'

Los Angeles

terized

ital

conditions, show no
Moreover, the

much

any

trend.

government

the

omists to be
business

Because
is

corporate financial structures and

seem

interest rates to display
stability at around present levels.

move

has

This arises from the fact

the

nancial

direct

conventional

moving in the direction

moreover,
that during the last
several years practically the en¬
tire

particularly

expect

have

mitments which will absorb

corpor¬

ital market, and it is here that I

heavy demands

institutions

large backlog of

are

time.

and

new

mortgages where the heart of the
capital market lies today. These
are the bell-weathers of the
cap¬

the capital markets,

upon

present

during the preceding three quar¬
ters.
The average weekly hours
of manufacturing production
workers, thought by many econ¬

downward

issues,

porate

by
stability
at
around
present levels. Conditions do not

sensitive indicator

ate

residential

It is the

placements, and the

place in coming
capital markets.

quarter of 1956, re¬
versing the downward movement

commercial.

for the

is my guess

mortgages—both

stantial amount of easing will take

that

modest

to be optimistic about

room

general business activity through¬
out 1957, there are several other

personal saving has increased has
so

corporate bonds and conventional

The

In addition to the fact that there

■

comparative stability in the basic
interest
rates
on
new
issues of

changes

been

liminary estimates retail sales in
000 a year ago, with the end still
look.
This same kind of pessi¬
February continued at a record
not in sight.
The interpretation mism developed early last year and high level. Under these circum¬
of this is, of course, that this de¬ certainly proved ill-founded.
In stances, it is not surprising that
cline is reducing the demand for contrast with the pessimists are a continued
upward pressure is be¬
capital funds in the residential minority of optimists who doubt ing exerted on consumer
prices.

pushing

ness

(8)

where

Accordingly, there is still

deal

very

the

manufacturers' sales figures have
already been adjusted downward ernment
insured and guaranteed
on the basis of the
experience to
mortgages could very well pro¬
date. Similar arguments are made
vide quite a stimulus to the de¬
with regard to other durable con¬
mand for housing.
sumer
goods and likewise it is
suggested that the steel industry
Rising Personal Incomes
seems

downturn

budget

are

peacetime high.

outlook.

the

j.t (6:)

business

optimism

business

quarter of 1955.

risen

This higher ratio
saving is, of course, cited as a
movement toward restoring a bal¬
ance
between the supply of and
demand for capital funds.
,<■
;

continued

making.

Mortgage Association, the Veter¬
ans
Administration, or through

with

pared

cast

that

The jury is still out
a

dollar amount

during the
completed tax period
concerns

ufacturing and trade

lows:

business

was

reasons

expected

capital markets? They

highs.

20% less than it

view

may

The latest figures, moreover,
indicate that bank borrowing by

cently

main

.markets

prices in

heights in the first two
months of this year. Still another
element
belying any possibility

tures

advanced

the

upon

easing

year.

momentum

growth

made

the

bank loans which is characteristic

contributes

housing

bank

the

that

that!, although the volume of
plant and equipment expenditures
remains high, it is the direction

surge

ment

kets

showing

average of

new

Federal

margins, there are still very
at¬ ■strong pressures on the part of

being
that

year as a year ago.

the

fact

true

in the capital
expenditures area. A great deal
of emphasis is given to the argu¬

economists, consid¬

the

com¬

vigor this

has been taken out of the boom in

plant

among

importance

tached

made is

appropriations for capital

Particularly

mercial

Graw-Hill

doubt

regarding

nearly

Doubtful

wholesale
rise to

great

reducing the demand
housing, and that under these
circumstances the reduced supply
of
new
houses is coming more

the

are
can

ant factor in

(5)

Signs Pointing to

import¬

What
which

for

•

Easing in the Capital Markets

lack of demand

for

mentioned
Some

this de¬

construction

Markets

upon

explained by the dearth of
credit and how

year..

go very

touch

available

much

rose

Then, I shall indicate some
of the reasons why I believe it is
doubtful that further easing will

shall

what extent

-easing in the capital markets this

Reasons

About Easing in the Capital

basic question

area,

which

easily

than those prevailing

lower

reported

issues of

offered

first

the

at the end

mid-

new

securities

the year came
what

3.66%

Many of the

corporate

licly in

The

moderate rise from that date.

mortgage

to 3.15% in mid-February of

Some

Similarly, the

Co.;

Georgia; An¬

Wells, Inc.; Bacon, Ste¬

Co.; Bacon, Whipple &

William

Blair

Company;

Francis I. duPont & Co.; Gregory
&

Sons;

Hutton &
&

Cross

Ira

Haupt & Co.; E. F.

Company; and Roosevelt

Incorporated.

The Commercial and

(1610)

Continued jrom page

which

such

would

seem

Then we

Federal Reserve Banks.

would eitner have to contract our

supply and take the de¬
economic consequences
of such a contraction, or we would
have to reduce the percentage of
money

structive

gold reserves (gold certificate re¬
serves) required in order to main¬
tain the
money
supply at eco¬

So the

nomically desirable levels.

argument runs;
There can be only minor excep¬
tions taken to this arithmetic. The

figures

willingness to dis¬

because of our

of our own posi¬

close the facts

tion in such matters and,

to some

extent, to disclose as much as w'e
can learn about the affairs of our
clients and

There

customers.

can

question/ however, as to
is anything

real

whether the argument
than

exercise

simple

arithmetic, short of such a chaotic
world situation as would nullify

substantial

the

Because

that, in all but the most ex¬
circumstances, not all of

they were, to conserve and to seek
dollars
by trade and financial

It would be anarchistic
they would readily

to assume that

and

nationals in

a run

the

serves

bered

the gold re¬
States.

United

shouid

with their

cooperate

easily

always

that

have

remem¬

interna¬

tional

monetary system in the
world, as well as a collection
of national monetary systems, and
this international monetary sys¬

free

tem

imposes

economic

of their difficul¬

causes

their

depositors will try to with¬
their deposits at the same
time. In a sense, the United States

countries

draw

ciaries of the international

free

banker for the
accepting
deposits
countries, making

acting

world,
foreign

from

loans and investments abroad, and

with assurance poten¬
tial gold liabilities which seem to
tolerating

trespass upon our gold reserve re¬

nation differs
from most of our banks, of course,
in that it also gives away dollars
from time to time, and these gift
dollars have helped to increase
our short term liabilities, but that
The

quirements.

It is equally
which

cious

arbitrary actions
could destroy that system.
This
tion

discipline has its applica¬
the presence

eign

holdings

some

would

of large for¬
think

lars—they
balances

the

and

ances

Such bal¬
kept in

reserves.

however,

their

de¬

rency,

the

serves

can

systems,

banking

veloped
banks

countries

most

deposit

can,

case

need, draw on secondary reserves
by shifting their holdings of liq¬
investments

uid
or

else,

someone

their

replenish

even

reserves

by borrowing from a central bank
or

United

The

resort.

of last
States might

lender

equivalent

foreign

be said to have some modest

sec¬

and

are

trade

cur¬

our

because monetary re¬
safely be held here,

employed at short term
which will provide in¬

even

ways

to the

sential

finan¬

and

countries
and be¬
countries, require

maintenance

come

and

account

reserves

because

With

principle,

banking

that

working

current

monetary

held

are

tween

are

living threat to the adequacy of
our gold reserves.
As I have said,
these are not entirely free dol¬

pointed out in re¬
reliance

which

dollars,

have

restful

this

which

cial relations of foreign
with the United States,

buttal of

mone¬

tary system to refrain from capri¬

cussion.

benefi¬

the

are

doesn't need to enter into this dis¬

could

while their

owner

character

es¬

reserves

less

which it

were

possible

turn, un¬
considered a

can

the

from

borrower

In¬

As of
hitching the

ternational Monetary Fund.
would

that

now

cart to the horse.

Itj

that it is not prudent for

the na¬
tion to rely entirely on the bank¬
ing principle in equating its inter¬

provide

these

facilities.

its

For

for other nations

excuse

the

doubt

safety of
By
the

holdings.
these

other

their

dollar

have

toward

"banker"
in

which

the

Their

responsibility is

their

dollar funds

its gold assets. This suggests that
we take a little closer look at the

the basis of current trade and

short-term

liabilities.

that

short

foreign

Settlements and the

International

European
Payments Union).
About $5 billion of this amount is
held by foreign banks and busi¬
which

concerns

ness

these

funds

use

working

most of

balances

in carrying on trade and financial

transactions
and

since
now

wide

with
the
an

with

other
United

this

country,
countries
also,
States

dollar

international currency of
And in addition to their

use.

day-to-day need for dollar funds,
it

remembered

must

private

holders

convert

their

and

thus

that

cannot

dollars

threaten

these

directly

into

our

needs, and not on the basis
speculative rumor and narrow

esti¬

gold,
gold re¬

cur¬

rency

foreign

official and
private holdings of dollar bank
deposits and short-term securities
now total slightly in excess of $13
billion
(including the Bank for

with

tion in the
been

try

term

gain.

The situation most

likely to put

these

responsibilities

expectation of possible de¬

valuation
would

the

frighten

the

dollar,

nervous

test

which
holders

into

converting dollar assets into
gold.
There is nothing quite so
pathetic as a finance minister who

has

the imminence of

right

devalue

to the
taken.

The

and there is

likelihood

his

getting into that position.
principal
and
conceivably
possible excuse for a wholesale
The

conversion of

into

gold

this is the
The

It has

its

use

holdings,

gold

goods and services to communist
use,
a
maneuver
which, under
present conditions, would press
the United States into

exchange
for

goods

unequal

services

and

Since the Russians can,

gold.

if the they

wish, treat gold solely
commodity, it would appear

possible

them

for

ex-

change their gold for the products
of the free

world, and for nations

other than

obtained

that

our

services

own

gold

use

purchase

goods

United

the

and

assessing this danger
must be particularly rethat there

the

that

game;

rules of

are

international

the

monetary system, based as it is on

gold, demands discipline in observing these rules. Since Russia
is not a bona fide participant in
the

system, and in the circumstances posited would be flaunting the discipline of the accepted
of

code

international

there would be

behavior,
for

reason

too narrow a

seg-

Russia

from

which

ices

code

gold

far

the

could

sian gold

exf

the

brunt

heat, that residential housing and swering the questions which now
public building needed oy grow- plague the administration of
ing communities /do not get a monetary policy, and which now
deal under present meth- dilute acceptance of the necessary
of enforcing' credit controls, monetary
discipline.
To
paraf
It is held, by some, that the need phrase slightly something which
for
unifying,
legally and tor- Robert Maclver said on another
mally, all phases of national eco- subject. "Today the materials for
nomic policy, including monetary our building are better and more
policy, under one responsible ex- plentiful than ever before — and

square

ods

•

ecutive head or body has become here we give grateful thanks to
the
imperative.
quantitative
workers.
The
Here, I think, are valid ques- bricks and the mortar, the ^teel
tions. They demand valid answers and the lumber have been or are
if the people of the country, being prepared. The bricklayers
whether the heads of great cor- and the masons, the carpenters,
porations, or the heads of great the riveters and all the rest are
unions, or veterans yearning for ready.
Now we must pray that
a "home of their own," or who- the architects also arrive."
ever, are to accept and support
the
discipline which a money
economy
requires.
They
need Boni, Watkins, Jason Co.
valid answers, if political and so-

Opens D. C. Branch

Boni, Watkins, Jason'& Co., Inc.,

erate the impact of credit restramt on certain areas of the
economy, are not to attain a force
which will impair the eflective-

New

"tree enterprise
and

opened
H.

means

combat

Rus-

brine

this

dis

°* the Union Message to

The

mandarins^-1
.

h^i"±1S °°t aJ
1

acc.epled

w'a
J'
leaders, and

but the
requires

business-

some con-

citizens if it is to do its best work.

national inquiry into the nature,
Performance, and adequacy of our
financjai system, both in terms ol
service

d^retq

tions

£ever
k popular, acceptbut it
have widespread
j

should

and

ance

support

cine for the

the

whole

mechanism through

"i believe the Congress should

^uth°rize the, creation, of a com-

body economic.

past

year

while
have

two,

following a policy of credit
restraint, there have been encouraging signs of such public understanding.
It
is
also
apparent,
however, that monetary discipline
has become increasingly irksome
it

bears

other

down

one

of the

segment

an-

community

and, at times, seems to be denying them their fair snare of the

prosperity pie
ing.

N.W., Washington 5.
Dr.

Kaufmann

was

Economic

Stabilization

served

staff

have been bak-

foreign dollar assets

disappears

long

economist-

Statistics

in price,
ductivity analyses.
For

been

the

trust,
tion.

lems

develop

wotdd

present

and

f^^he

of improving the

purpose

ma„hinPrv»

.•'

•

specializing in anti¬
forecast and

market

also

consulted

prob¬

such

industries

watch

manufacturing, TV, chemicals and
food. During..World War II he was

Army

an
a

finance

major in the
A graduate

master's

tjon

officer

other

situation

dollar,

are

con-

the

same

not

equal

the

task
and
attemntine it,
it are
are be
k a
a, in
n attempting
be

discriminatory.

asserted

that

credit

and

reserve.

of Swarthmore Col¬

received his
degrees
from
Harvard,
where
he
has
taught. At one time he was on
the
Oberlin
College
economics
faculty and he also has taught at
the Army Finance School and at
the
Industrial
College
of
the
Dr.. Kaufmann

doctorate

and

Armed Forces.
.

There is an element of danger
.in tbis sort of thing. We do . not New York Stock Exchange
know what we shall get if we
Weekly Firm Changes
tamper with the present machinery> which has worked after a
The New York Stock Exchange
fashion, despite its periodic shoit- has announced the following firm
comings. There are always hare- changes;
brained ideas concerning money,
Transfer of the Exchange mem¬
lurking m the wings and ready to
take the stage. But there does bership of the late Elliott M. An¬
derson to Walter J. Smith will be
come a time when the danger of
doing nothing outweighs the Wan¬ considered by the Exchange on
»
^er 0 doing something.
This-is April 4.
one °t those times,
1
George E. Paine retired from
t

into

production,
employment and income, and stability of the purchasing power of
the

pro¬

past four years he has

rate,

to un(jertake this vital inquiry. Out of their findings and
recommendations the Administrato the Congress any legislative
proposals that might be indicated

and

traffic problems in air transporta¬

lege,

zens

cost

independent economist in

Washington,

this

monetary

that

phase

arrangements

our

and

our

has

controls

Timpson,

In Investment Business
*

and

We have had a succession of rel¬ partnership in Robert
narrow official
inauiries & Co. March 30.

Controls

It has been said that credit

achieving at one
time
high levels

the

Agency;

worked with the Bureau of Labor

trols, on which we place so much fiscal and credit policies since
•—maybe too much—reliance for the war, some of which were con-

ing

case.

only

Credit

with

Gordon

atively
Selective

Dur- *.*

authorities

monetary

has

Kaufmann

Vice-President

office is in the Shore-

new

mjssjon 0f able and qualified citi-

medi-

good

been

the

and m terms of its func-

economy

ing

the Con-

an<* ereditpolfcy

f17

Dr.
a

ham Building, 15th and H. Streets,

Study

Sress said that he believed the
"time has come to conduct a bioad

fnd «^re^t policY .maY seejTJ
m.<ct

it.

elected

the firm.

tary

government economist,

manage

been

feasibility testing at thre National
Security
Resources
Board,
and

gold and the monetary

Kaufmann, economic consultant

Financial.^macbipery.

^SC+hllr!f- ° f
e y referring
rS
d|scipbnary requirements

and

office in Washing¬

new

and former

economy.

Broad Financial

economic

ton, D. C., and appointed Dr. John

general credit controls,
They need valid answers it the
ebh and flowof credit itself is not
to
contribute to rather than
ameliorate the ups and downs we
must expect in a dynamic

,ness

firm

York

management consultants, has

Gray, special assistant to
the President, performed; economic

t0 bring this dis-

the

withw-t^^Scstipiis that the time has come
and
fundamental study^of

sure

self-satisfaction

low

dumping campaign.

should
i

found

the

system

in which it operates.

restrictive citement of excursions whither
credit policy
;
while big business they cannot tell."
goes merrily on its way getting
By embarking on such a study
bigger.
It is argued, with some we may hasten progress in an-

is claimed that small business now

bulk of the world's trade and

commerce,

picture
financial

our

controls (in addition to the pres- creation of the Federal Reserve
ent specific control of stock mar- System, it should be undertaken
ket credit) to supplement and, at "in the spirit of those who ques¬
times, to reinforce general or tion their own wisdom and seek
quantitative control measures, it counsel and knowledge, not shal¬

ternatibnal trade, "but with to*ug|vf.!$hat is; why-Tnany of us, who have
ness on our part and a reasonable
been concerned with this problem
degree of cooperation from those *n recent years, were heartened
countries which, with us, carry on when the President, in his State
the

and the ways

circle

and goods

comprehensive

This inquiry should be a study in
gested that we should have two depth/and in the words of Woodor
three more selective credit row Wilson uttered prior to the

flow quite freely in

now

Thursday, April 4, 1957

structure

An<^ no, one can now be sure
concerned.
It would not be alto- he really has the answers. That is
gether simple and easy to exel ude^cne, .reason why there have been
the

observe

cial pressures, which seek to mod-

States.

membered

time

Secretary of the Treasury of the
States is not in the posi¬
tion
of
having
to
deny
such
of

of Russia.

case

United

rumors

for-

uses

large but unknown amount, to accornplish a massive diversion of

through

ment of our complex combination of public and private financial institutions. It nas been sug-

deny

devaluation
action

the

suggested that Russia might

makes

possible and
they all have an impor¬

manage

social

and

international

which

system
now

mated

political

re¬

sponsibility toward the "banker,"
monetary

financial,
contract in

implication of

eign holdings of dollars and dollar assets lias its special applica-

token,

same

nations

Gold-Dumping

It.

connection

cuss

States, by reason of
its position as the world's finan¬
cial center, has a responsibility to

tant stake.

figures of our

This

The United

national short-term liabilities and

aggregate

Speculation

maintained.

and

therefore,

argued,

may

pool-

work

bears

ondary reserves, in the form of own protection, it must order its
holdings of foreign currencies and fiscal and,monetary affairs, and
assets, but it has no substantial maintain its competitive produc¬
source of relief, no "lender of last
tive capacity, so that there will
resort"

situation,

incumbent upon

dollars

ests.

during the past five years they no
longer are pressed so hard, as

ties.

now

ing

them,

dollar resources of most of

treme

in the gold and

increase

healthy

and

certain disciplines
upon the countries which enjoy its
all cozy calculations.
advantages, even though gold is
In the first place, the aggregate
no
longer the absolute monarch
figures used in these calculations
of the system but has only consti¬
ignore the banking principle of
tutional
prerogatives.
It is in¬
proportional reserves which en¬
ables
banks
to
carry
deposits cumbent upon countries, which
their gold reserves endan¬
which far exceed their primary find
reserves,
secure in
the assump¬ gered, to take steps to correct the
tion

h i

equivalent of all-

the

In that

out war.

sell

in-

war

the resources of the free
gold for dollars runs only to tne world under special rules would
monetary authorities of foreign be the path to follow, and not the
countries.
These authorities al¬ fragmentation of these resources
ready hold about $8 billion of de¬ in a disorderly scramble to try to
posits and short-term securities. protect supposed national imcrserves.

available, (measures.

all

nearly

are

commitment

Our

possibility is

disturbances

almost

are

bank"

the

on
a

all-out

ternational

Gold and Monetary Discipline

condition

"run

Financial Chronicle

(Special to The Financial Chronicle).

structive and bore good fruit and
SAN
FRANCISCO, Calif. some of which assumed the ritual
character of the mating dance of Scott, Bancroft & Co. is engaging
the fiddler crab without apparent .in a securities business from of

results. Now we need a broad
study' or an in(luiry by an. ob^ec:

panel ^ citizens, divorced
been £rpm partisan public and special
now
private interests, who will develop
^-ve

fices

Officers

235
are

Montgomery

Street

Charles W. Partridge

President;- Charles
III, Vice-President

J. Lennihan
and Charlei

Partridge, jr.," Secretary.

Number 5626

185

Volume

Continued

from

United

page

States, however, with our

variety of natural resources, our
large supply of capital seeking in¬

ulation is

ing ume or
mill.

benefit

the

come

can

prepare

should

schools

expense

increased

should

available

the

rest.

Sometimes the price spiral

the

than

faster

1947

between

did
then

loss.
And

(o)
and

every

policy
a

of The
Pittsburgh held of

Bond

meeting

such

Banks

The

free

the

group

touches
whose

suffer

his

themselves
collapse again

State of the Union

that

leaders

had

business
to

self-restraint.

their

me,

inevitable,

Other

subject

not

sponsibilities.

that

habit

re¬

influence on the money market, although the decline in
loans is encouraging.
The capital market is continuing to push

ing

offerings into the picture and these are tending to absorb a

but to

Contraction in Short-Term Yields Likely
'

grant
spiritual

C. Lear

James

Moir

overbuild business

ventory,

built

our

structure on excessive

President: Arthur
Humphrey,'
Jr., Hulme, Applegate & Hum¬
phrey, Inc.

will

Business

personal confidence, on which
rising business activity depends
so
heavily, can be weakened if
excesses develop.

and

last year about the
great need for the accumulation
of savings in this country to fi¬
nance the expansion of our
busi¬
ness plant, our housing stock, our
road system, and our schools. The
need for saving is still very great,
as is shown by the increase in in¬
terest rates and bond yields over
the past year. The higher interest
rates are stimulating savings and
they are also -causing the post¬
ponement of some demand for
savings—stretching out the boom.Both trends will help to moderate
I

and

increases

construction

equipment.

'r-

;

take

will

Money Easing End of 1957

•

probably remain
."tight" during the next two quar¬
ters.
It may
be easing by the
year-end if construction and busi¬
ness spending for
new plant and
equipment rise by only the mod¬
will

amounts

erate

sonal
be

and

corporate

high in 1357,

expect.

Per¬

savings j

will

they were in

1956.

The

Federal interstate

highway

Looking

ployment

road
gram

construction under this

must

first

offset

Inc.

pro¬

decline

not

serious

were

25-34 years

country from

Schmertz

Inc.

Co.

elected to the Board of Gov¬

The

Spring Outing was planned
14 at the Fox Chapel

June

for

Gold Club.

Now

Actually the number of people in
this

will be lower in 1965 thah it Lewis
in. 1955.
There will be, of York and Boston Stock Exchanges,
course,
.many
more
in the age on April 1 will be changed to

10-19

from

these age

vide

large

number'of

years

The

also

and

over

labor

current

workers.
growing

from

workers

age

age,

do not pro¬

numbers

will

years

groups

Company.

Eddy &

Welles

limited partnership.

NEW HAVEN, Conn. — Bruce
Berman
has been added to the
drawn into the labor force,
staff
of Hincks Bros. & Co., Inc.,
and why labor productivity must
be increased substantially if our 157 Church Street.

ing

improve.

must

solve

force.

persons

the

size

rate of about 2.8
year.

per

Boston

In four years we add

equal
In

many

all

years

that

six

population equal

Canada.

million

We add a city

metropolitan

England.

New

add

•

population is now increas¬

to that

areas

of
the

John
28

passed away March

Kalb

the

of 49 following a
Mr. Kalb was senior-

age

heart attack.

partner

Kalb, Voorhis & Co.,
of the New York Stock

members

which was formed

Exchange,
1946.
a

Prior

thereto

Mr. Kalb wrote
investment
estates.

had

and lectured on

companies

since the

system will largely

new

replace

world

rising

was

and

one

trust
the

population means a founders of the New York Society

lowered standard of living.

In the

Security

Analysts.

offering

mean

less of

3V2%

long-term

Government bond

price adjustment for the other outstanding

Treasury bonds. It may be that the
marketable issues will soon be anticipating the long-term bond
which will be offered to the holders of the maturing savings
bonds.
Therefore, prices of the longer-term outstanding market¬
able issues are being watched very closely for clues along this line.
marketable,

distant

Corporates and Municipals Going
improving tone, and the way in
and

Tel

the

increasing

amount

yield than do

this

of money that is available

also

and,

action

for the high

bonds, and the marketability factor

Government

institutional

continue

money

true

able to compete on a more
are

which the very large Ameri¬

taken seems to be evidence of

There¬
corporates and

good, if not better in the non-Treasury issues.

will

was

Well

continues to have

Corporate bonds continue to give a much better

yielding bonds.

just

bond issue

Tel

can

corporate issues

for

market

capital

is moving into

until the

bonds are

Government

favorable yield basis.

Tax-free bonds

going into investment accounts in a

fairly sizable way

supply of these

securities, market

spite

the

has been

Joins Paine,

ample

the constructive side.

HARTFORD,
Parker

with

has

Paine,

Three With Dacey

Webber

(Special to The Fin/ ncial

in toll road construction,

competitive with the corporate and taxthey are being quoted at this time. However,
in the interim period, while the capital market is waiting for
this offering of long-term Government bonds, there might be
an
improvement in prices of corporate and tax free bonds so
that they would be more in line with a 3%% long-term bond
of the Treasury.
This would have a favorable effect on the
directly

exempt issues

been

Lewisohn & Co.

partner in

to be the belief of most money market fol¬
31/2%' long-term Government bond will be offered
of the maturing F and G savings bonds.
This will
a

make

not

fore,

John Kalb

the

problem of rapidly rising popula¬
tion supported by a slowly rising
labor

living is to continue

holders

Chronicle)

gests why so many wives are be¬

standard

April or early
Others believe

appears

that

The

Hincks Bros. Adds
(Special to The Financial

shortage, sug¬

now

On the same
will retire

from

20-24

It
lowers

Eddy

date

34 years.

long-term

therg are opinions around that the later part of
May^would be a likely time for this to take place.
announcement is imrhinent.

would

was

but

the

Also,

Eddy & Co.

Conn.—The firm
of Eddy Brothers & Co., 33
Street, members of the New

name

Government market is. concerned,
there will not be very much of a pick-up of interest in these
securities until the indicated long-term bond has been offered
to holders of the F and G savings bonds. Just when this offering
will be made seems to be largely a matter of conjecture, but
far

capital market.

HARTFORD,

age

group

3%% Long Bond for "F" and "G" Maturities

;

sector.

intermediate-term

the

Lear

ernors.

workers today.

bers of new young

Reed,

Klima

John
&

in relatively small num¬

resulted

are

Lear & Co.

ningham,

Decade Ahead

will

population

1958, however, rising

true

over
the next decade.
The low birth rate of the '30s has

ulation

1957 and

problem

every year.

& Co.

Co., George H. Kingsley, Jr.
by
of Singer, Deane & Scribner and
Louis R. Schmertz, Jr. of Cun¬

Looking ahead to the '60s, sev¬
trends are apparent.
Unem¬

gram may

be providing net sim¬
to the economy by 1959.

The

eral

ing at

construction

form

the

1960's.

the early

in¬

the

dustry and for business generally
over the next 15 years.
The pro¬

expenditures.

situation will

reverse

Our

for

Simpson, Emery

system

returned

system has been hailed as a strong

support

aid

roadbuilding

There

Money

W i 11 i a m

..Vice-President:

Simpson,

beingSecretary: Kenneth Moir, Ar¬
which
thurs, Lestrange & Co.
more money out of the
Treasurer: James C. Lear, Reed,
in 1957 and 1958 than

economy

spoke

price

have, been
Furthermore,

financed by tax collections

business

credit, par¬

credit.

bank

ticularly

roads.

toll

Federal

the

capacity or in¬

build

might

which

roads

save

seems

flow of funds into short-term Government securities.
reports now that some money is being moved out into

larger
There

Club, March 28, 1957, the
following officers were elected:

enough

obligations

the

The Business Outlook
powerful

Government

near-term

that, with the digesting of the new money raising issues of the
Treasury which should not take too long, and with the effects of
tax borrowings becoming less of a factor, there should be a

to economic health.

not

that further decreases in the yield of these issues, especially
Treasury bills, is to be looked for, with the passing of not too
much time. It is the belief of not a few money market specialists

sity

from the results of our folly if we

action

The

say

Kenneth

Continued from page

money

and the intellectual wis¬
to
re-infect ourselves,

move on

good

the available supply of long-term funds. Nonetheless,
which is seeking an outlet in the money market and
the capital market is still on the increase and this has tended
to have a constructive influence on yields of the issues that are
available in the short- and long-term markets.
of

part

the

God

the

of income taxes is still having a tighten¬

credit for the payment

not1

dom

have

find

accord¬

banks,

monetary

best

our

old

the

freedom.-

can

courage

churches

The

balance

equal

have

Humphrey, Jr. William G. Simpson

inflation, throw off its chains and
restore our economy to a healthy

bargaining.
groups

A. F.

its

run

may

break

will

disease

This

chance

economic truth, and truth is basic
and

the

course.

sponsibility is deeper and broader
than this. It goes to the point of
learning, using and teaching basic

collective

ment

just another part of the

when

re¬

the deposit

The opinions which are being expressed in certain
indicate that a let-up of some proportions in the re¬
policy would not be an unexpected develop¬
in the not distant future.
To be sure, the use of bank

strictive

it, but this one has a present
urgency. 1957 may mark the end
of the 15 years of inflation beguri
in
1941. This may
be the year

labor

and

examples

set

quarters

comes
individuals. It is.

Some

obligations:

usual,

President
Eisenhower
specifically mentioned the oppor¬
Message,
tunities

—

still

The action of the money market seems to give evidence that
the* "passive phase" of the policy of the powers that be, is not
exactly distasteful to those that are concerned with fixed income

this is
rather, a

must pay to continue as
free
men,
another test of our
devotion to the principle of liberty.
There are many other problems

price

and

life

after all,

will

economic

back

or¬

every

economic

our

programs

occurs.

country

responsibility,

institution that

free

securities

that this will continue to be true

ing to reports, are starting to rebuild their liquid assets. The
capital market is likewise in good shape, but this is almost
entirely a corporate and tax-exempt picture. Long-term Gov¬
ernments are not yet competitive with them.

country of free men, the ultimate

ours

shared

ganized

is a
responsibility

long

country,

should

this

undertake

should

Who

education?

Government

short-term

future.

foreseeable

the

for

of all, because

But most

purchase

Adding to Liquidity Position

for

demand

large and it is believed

very

public interest.
Who Does the Educating?

say,

time

the

concerned, because more funds will be available for the
of these obligations.

an¬

them, but it certainly also is in the

excesses.

some

Club

begun
should help

program.

suspense

lesser degree

the boom psychology appears to have passed
being, at least, into limbo. A continuation of
the downtrend in economic conditions will have to be favorable
as
far as the market for fixed income bearing obligations is-

companies have

insurance

for

Elects New Officers
nual

to have become one of do nothing, wait and see,"
or passive as the money managers indicate.
of inflation, or if there be any at all this

appears

state

Due

glad to see that the life

coin. I'm

when he can least afford it,
part
of
any
inflationary

his

finally, - that today's selors, and trusts need to put new
tomorrow's pensioner,- and more attractive emphasis onman
who lives long the savings side of the interest

enough to be put on pension must
pay,

consum¬

economy

PITTSBURGH, Pa.—At the

banks, insurance and savings and
loan companies, investment coun¬

•••'

our

time,

inflation-

the

consequences

adult

of
of

the money

well

Pittsburgh Bond Ctub

depression pattern of the '20's and
'3U's. And tne savings institutions,

is,

worker

gain

apparent

every

fact,

climbs
spiral as it
and 1951, and

wage

size

pattern is getting more important as far as
market is concerned, because further declines in some
the components that make it up is expected to have benefi¬
cial effects on money and credit conditions.
A restrictive money

workers
as

business

The

growing. Let's keep it growing—•
steadily if we can—but growing.

adjusting their economic theories
(4) That we are all consumers, to the fundamental truth and rise
the; wave
of
desperate
as
well
as
producers and * that, above
when our wages are inflated, we imagining with which they tried
ourselves
pay
for it in prices. to reason their way .out of the
the

all

The

ers.

Governments

By JOHN T. CHIPPENDALE, JR.

production
the '60s,

rising rapidly

number

the

Tne

number

will then be

continually

favorable factor.

necessary

spirit¬
ually for all life's problems, in¬
cluding these economic ones. The
the mission

than a soldier mark¬
an animal on a tread¬
few do it, their only

progress

Reporter

organizing production, rising pop¬

because
more

Our

national skill in

vestment, and our

to Economic Health
After Inflation 1957 Ceases

Moving

(1611)

...The Commercial and Financial Chronicle

(Special to The Financial

Chronicil)

become

Webber,

associated

Jackson

Street. He was
formerly with Walston & Co., Inc.

Curtis,

111 Pearl

Chronicle)

BRIDGEPORT, Conn.

Conn.—George F.
J.

Flanagan,

Gardner

Lucy
West

have

connected with Norman
&

—

James

Hill and
become
F. Dacey

Associates, 114 State Street.

The Commercial and Financial Chronicle

when the

Continued from first page

all this dirty linen is

the fact that

if indeed it is

entire national union no longer
employer who in turn can
not act in cooperation with his competitors in defending
himself; when men everywhere have the right to work or
not to work as their own judgments direct; when wage
earners are
no longer required to limit arbitrarily their

IS||j

being washed in public,

being washed at all.

consternation in the ranks
transgressions re¬
vealed, and a good deal is said from time to time in a
vague sort of way about the injury to the individual work¬
ing man implicit in this type of behavior by his leaders,
but what seems to be feared most at least among the socalled liberals is that labor unions may presently be re¬
Of

course,

lively with employers to keep output up and costs down—when these things have come to pass lab^r union rack¬

there is general

sensitive to the moral

eteering and the rest will no longer be a problem.

Thursday, April 4, 195?

of things in the
name of "picketing" which would put others behind the
bars in short order. They freely deny men and women
the right to work. They use their power to obtain much
to which they, economically speaking, are most certainly
they are allowed to do all manner

not entitled.

privileges and others like them are endangered, '
seems to be feared, by such disclosures as those now

These
so

being made. It seems to us that if such a consequence
should flow from the scandals now being aired or any
others which may

follow them, nothing more helpful

could

country, including in the long run the wage
themselves. We do not for one moment regret

that certain members of our

national legislature are mov¬

ing with vigor to expose this sort of thing everywhere it
exists, and we do not see how anyone else could regret

have been
committed, although if the truth be told we do not see
how anyone could expect anything better in the circum¬

it. We, of course,

regret that such acts as these

under which Unionism has been

stances

permitted,

nay

encouraged, to develop in this country.
important thing now is to see to it that precisely
fear actually comes to pass—namely
that the unions and their members be deprived of their
The

what the "liberals"

place in the economic order and be required to

favored

obey the same laws that the rest of us have to obey.
would

tragic indeed if all this were to be permitted

Continued

from

granted that abuses of the sort already exposed will con¬
tinue, and what is more, abuses of many sorts which are
not

now

being aired will

right

Fortunate

on.

Timing

unfortunate that these scandals
should come just at the time that the exactions of the
unions are being appreciably reflected in the prices that
the rank and file must pay for the things they need in
their daily lives. It is not only true that wage increases
have come faster than improvement in what is known
as "productivity," which is another name for output per
manhour, but the improvement in "productivity" that
has come is not the work of the wage earners at all. On
the contrary, greater productivity in recent years has
been achieved despite
less diligent labor, more union
restrictions and general indifference to the volume of out¬
put from day to day. It has come because the scientist
in his laboratory and
the manager working as wage
earners simply will not do have found ways and means of
producing better goods in greater quantities more effi¬
ciently without either help or encouragement from the
men

at the

means

benches and the lathes.

There is at least the

possibility that the rank and file
will presently come to realize that this pampering of the
wage earner is costing them money. It is, of course,
merely silly to assert, as some of the defenders of the
unions do, that Rpces»are rising solely as a result of the
greed of producers or the policies of the monetary or
credit authorities. Generally prices must rise with costs
or
production ceases or is drastically curtailed. In -the
final analysis costs are today largely determined
by
wages. Exposure of some of the more unseemly things,
that go on at union headquarters may help attract attention to other matters having to do with the behavior of
the wage earner and to lead the man in the street to do
some thinking about these
things.
When
the

same

men

laws that

strike
their

have been

required to observe
employer is expected to obey;

ing

the

and projecting

season,

results

month

date

conditions

pulses

Aspects
availability

and

tation

6,200,000 to 6,500,000

Car

Multiple

potential

high¬

yearly

2V2%

pound interest gain in jeconomic
productivity, so that the nation's
production per individual is
doubled

about

year are

most one-third of new car

eration.

than

own

gen¬

every

once

one

than twofold by

60%

than

Two-car

car,

increase

will

households

buyers
more

1965, and by 1935
of car
owning

"
.

pand

very

claim

other

our

begin

rapidly and

increasing share of our

added income.

son's

income expands
appetities ex¬

our

When

rises

income

per¬

$3,000

from

will

families
than

nomic

be
if

car

one

of more

owners

avoid

can

international

and

When the pub¬

eco¬

catas¬

trophes.

na¬

problems, I'm confident
solutions
will >be

has

the road¬

characteristic

been

the

American

the

problems, for they are of con¬
magnitude.
The major

the past,
and this offers hope for the future.
However, I don't wish to minimize

people in

siderable
one

these:

are

(1)

Need

high¬

additional

for

ways.

Wasteful

(2)

consumption

materials

raw

sizable

and

in¬

operating costs.
Threat
of
governmental

creases

some

made

real obstacles

very

Getting around

blocks

joining the
multiple-ownership category. Al¬

com¬

must

its

con¬

public

found.

Ownership

future,

understands the

generally

ture of the

sound

familities has a second
total, there are now six
two-car families, and 750,-

000 families

the

efforts

realize

is to

in the road ahead.

present, one out of six car-

proximately twice as much as the
owning
previous generation in the way
car.
In
of world goods and services at its
million
disposal.
"This

car

Progress

industry

overcome some

and terminal facilities.

ways

has ap¬

generation

new

calcula¬

your

proverbial country
However, the above figures

the

full

observation:
"Each

and

support the industry's expecta¬

lic

research
made this

specialist, two years ago

country,

the

certed

business

affecting buying im¬

throw off

can

tions

the

over

other factors

Of the Automobile Market
company

12-

scien¬
tific business.
As you are
well
aware, public psychology, weather

Obstacles to

live

over

period, is far fronh

mile.

page

Assigning varying weights
different months, depend¬

the

sales this year.

Some Significant

(3)

car

controls.

Inflation and economic im¬

(4)

balance.

Another

major

the

factor

family trend is the desire

two-car

to $4,000, you may be sure— of young people everywhere to
particularly if he's a young man- drive. New York State reports a
that a large share of the increased
threefold
increase
in
junior
li¬
income will be spent on raising
censes
held by youngsters 16 to
his standard of automobile living. 18
years, over a recent five-year
This is also true of farm families,
period.
regardless of age.
More paid vacation time, more
"On the other hand, if a busi¬
paid holidays, and greater stress

year

Newcomb's

Dr.

pin¬

study

highway con¬
struction compared
to the mid20's.
The nation's highway con¬
points

the

struction

lag

program

averages

now

only one-half as much per high¬
way travel mile as that program
did

Motorists

ago.

years

are

paying $5 billion yearly in motor¬
ing penalties for inadequate roads
ness executive earnings $20,000 a
on
recreational
activities
have
through wasted gasoline, commer¬
year
gets a $1,000 raise, a far placed heavier demands on the cial vehicle time losses, and high
smaller share of this added in¬
family motor vehicle, and this is automobile insurance premiums.
come is likely to
be spent in the likely to continue. Weeks of paid As even a small
percentage rise in
automobile

to be

glossed over with the punishment of a few scape¬
goats, leaving the unions themselves and the leaders to
follow those deposed to go on much as before, sui Tfeheris
before the law. In such an event it may be taken for

units.
to

for the

projection

our

would come out to 6,900,000

year

tions

befall the
earners

justments,

quired to live by the same laws that govern activities
everywhere else in the work-a-day world. These organiza¬
tions now, of course, have nothing to worry about so far
as the antitrust
laws go, as do those they bargain with,
and

operations; when unions are willing to proceed cooperaoutput and to observe foolish restrictions upon their

Consternation, of Course

of those who are

strength of

be concentrated upon one

can

We See It

-As

(1612)

"The

—is

due

has

ownership

taken

level of

this year

place

(1955)
that

shift

marked

postwar

record

the

use—and

automobile sales

economy

our

which has resulted in vast growth
real income

lower

the

ranges
In

among

families in

middle

and

income

1941, half the families in the
an income after
less

incomes

have

now

$4,300. Due to
in
a

execess

dramatic increase

family income and to
population, a 73% in¬

average

larger

the

crease

above

the

tered

1960's

The

number

families

level

$3,000

regis¬

was

15 years.

doubled

than

will

the nation's

tivity

see

high rate

level of economic ac¬
mean

can

sharp

rise in
cheating
permit inade¬

income,

family

are

of "family

ourselves when

time

quate highways to exert a braking
action
on
the nation's
economic

| formations as the war¬
baby crop reaches matur¬

These

ity.

new

homes

acquiring

families will be
and motor ve¬
It is also

hicles for the first time.

anticipated that the relative num¬
ber

the

and

drivers

women

will

they do
faster rate than

driving

increase at

pop¬

ulation increases.

Newcomb,

Dr. Robinson

trans¬

research authority,
out
that
motor
vehicle

portation

points

travel has increased fivefold since

1920,

than

the.

growth of
economic activity.

twice as fast
total national
value

the

now

and controlled

highways,

access

cities

big

our

expressways

the

yet

total

is unimpressive.
In the
25 largest cities, an estimated 400

mileage

controlled

roads

access

available, with slightly

than 100 miles under construction.
The

Federal

new

Highway Pro¬

will place special emphasis

gram

modernizing the 41,000 miles of
the interstate highway
system—
about 1.2% of the miles of high¬

in the United States.

ways

War

World

Since

Many
boast

miles
a

progress.

are

than

half

than

$3,000: today,
of our families

in the past 10 years.

amount

United States had
taxes

has

vacation

in automobile

growth
and

market.

tremendous

The Bureau of Public Roads two

of
the
automotive years ago estimated that to im¬
has
been
greatly
en¬ prove all roads and streets in the
hanced; its use has become wide¬ nation to a safe and adequate
From
a
predominantly
rural
spread: and the ability of people level would cost $100 billion in
people, Americans have become to
purchase
new
cars
has
in¬ 10 years. Last year's Federal Aid
largely urban and suburban based. creased sharply.
Highway Act provides about $25
Sixty per cent of the nation's pop¬
billion in Federal funds over ap¬
ulation today is crowded into 1%
Future Market
proximately 13 years.
of the country's area.
The explo¬
The
lcng-range future of the
Authorities believe
that
these
sion of population clusters in cen¬
industry looks promising to vari¬ additional
Federal
funds,
plus
tral cities, and the mushrooming
ous
authorities.
Commissioner
and

of the suburbs are, of course, dy¬

namic factors in U. S. living today.

60-million

Nearly

live in the 37

already

people

largest metropolitan

centers.

Population projections for
the next 20 years indicate that an
additional
be

added

politan

million

these

people

larger

utility

product

Dispersal of Population

will

normal

Charles

Curtiss

million
The

trucks

cars,

New

passenger

car

1965. a

the central city has

suburbia.

The

exodus

fast

car.

to the sub¬

second, third, or fourth

Should

the

expected

continue, there might be
as

25 million
work

the

will

the

suburbs

many

will

depend

many

people coming

central
years

come

growth

city from

hence.

How

by passenger car

upon

the

cost

How

urbs, therefore, has multiplied the
need for

the

and

convenience of personal transpor¬

year

sales

1957?

for

the

take

1957

model

total of 2.471,364
cars—and project these
over 12 months, making

to date—a

passenger

figures

allowances

variations,

for

normal

we come

seasonable

with

re¬

tail volume of 6,270.000 passenger
cars.

take the calendar year

date, Jan. 1 through

a fid

make

the

same

March 10,

seasonal

ad¬

aid

and

con¬

local

and

state

fi¬

nancing, will result in total expenditures for highways of $95 to
$100 billion by 1970.
It

is apparent,

therefore, that

,good deal more family income will

tax

state

others
from

1941

doubled

increased

100%

recent
as

were

re-

placing

the motor¬

and

1954, 35
had increased gasoline taxes;

states

way

burdens

Between

one

national

the

taxes

of the Highway Act,

collectors

additional

ists.

vital

without

Even

boost in fuel

sut of passage

the

this

for

spent

service.
Federal

large will the automobile

market

retail

population

car

anticipated.

Federal

tinuation

metro¬
Even

only one-fourth

buses.

puts

figure alone at the

of 70 million is
grown

and

"Tirres"

York

100

100-million level by that date.

areas.

Since 1940,

predicts that

will have

1975 the nation

the Public

Roads Administration

67%.

its

their

Compared

increases

and

tax

levies

with

high¬

construction costs and greater

capital costs for modern designed

highways,

these

increases

an*

Volume

185

Number 5626

The Commercial and Financial Chronicle

(1613)
modest. Soaring gasoline taxes are

general

making

describes

motorists

increas-

ingly

conscious

costs.

In the aggregate, such costs

total

$17.5

motorists

their
for

five

each

annually.

able to

bine

gasoline

sumed, they would

latter

type

that could

"com-

passenger

space

maximum

istered price industries. The tight
money policy now in effect can
have very little influence on such
price increases since the big com-

panies

...

major

weight

con-

consideration,

will

tance.":

$2.5 bil-:

save

one

maneuverability into a small
package
since acceleration will

out of

coax

The

•

and

miles of travel

gallon

operating

car

billion

were

cars

use.

light
impor-

chief

administered

price

in-

and do raise prices
when demand is falling."
>

even

dustries

can

Let's

take

brief

look

the

1
/•.-'•'*
*
*
-jyu: causes of the inflationary spiral.
I predict revolutionary changes ,
1
>
v
annually.
;
in car concepts in this industry as
Gross National Product
However, higher engine com- a result of multiple;bar ownership,/. To maintain
high level employpressions
require --higher
and growing material shortages, and ment, at least a 4 to 5% increase
higher octane?/fuels that not only higher operating costs. The phil-?, annually, i n ih
engross- national
cost more to produce but
require osophy of making them "bigger, product, at stable prices, is remore crude oif per gallon."
-heavier and-more powerful" is quired. If the nation fails to reallion

their

total

gasoline

bill

;

having its last great fling.
Shortages

J-'

„

Factory

Through most of the postwar
years,-the industry has been in a
phase where the luxury aspects
;pect& of

Dea,er

Relations

for

manu-

i
^

These

contrasts

become

striking when

re-

crease

for

rently

takes

build

1950.

even

several

fact,

years

cur-

man-hours

than

car

was

required in
major automo-

one

bile company

compare

creases in the 1934-39 period with

recently made publie these figures on its
operations,
"The number of hourly worker
J
man-hours per vehicle produced

the 1948"56 period,

in 1956

the postwar period with prewar,
By matching up annual rates of in-

what

see

curred

the

]

we can readily
changes have oc-

vast

distribution

the

salaried

sales dollar in manufacturing in-

great

was as

somewhat

eluded,

than

in 1954 and
in

employment

ratio

the

1950.

If
in-

were

would

still

dustries. {'/>
i
•
worse because of a sharp increase
...PtoPlqyeei compensation in- ^in number of such employees. I }
creases in the prewar period av- wont tn b° fair, however, and ad- '
eraSed.$915 million annually, com- mit that the vehicle is consider- ■
ize this: annual growth, and the pared to $4,300 million in the post- ably
more
complicated in 1956 :
money supply increases, inflation- war Period; government tax rev- than it was in 1950." *
/
.r ;
;; ^ry pressures develop. It's the enu®s /derived f r o m corporate
It is questionable whether Wal- ;

Material

investment

duced.

;

return

factoring operations has been

•

The dynamics of the automobile

classic

from

case

the

economic

$84

rose

million

yearly,

ter Reuther is doing his members

^usiness should continue to'.pro- 'primers of too many dollars chas- compared to $b50 million; income a real service if his current ef— ■•'
npl
thp
inHllctrVt tA
ctill
cfriiQtiar
J
rGmsinin^
nl ri
remaining to
to storkh
stockholders
»in- fnrfc
/.'pro- pel the industry^, to still greater ing too few goods.
forts onH
and Vti
his projected program
creased $372 million annnallv- in
nounced/-Automatic shifting de^ production
fnr
"wnllftnino"
anfr»,mr»Kiix*
and ftsales levpls— .y- Currently
about
20%!" of the greased $372, fpillion annually in- for' "walloping" the*
the automobile
vices,: power- steering," power greater than in the past. However,
gross national product is used bv
Iok ea.1,!-er penc!d: compared ,
a companies .< result in still further
brakes, air conditioning and other one of the greatest dangers to congovernment,-/and the remaining f?5^-1!11011 .yearly increas? in the inflation. The illusion of getting
1948-56
embellishmentsmake - for '
....

automobiles

have

become

♦

;?•

PTR

in-

nVAitrnm

pleasurable

driving but also add
to cost of ownership and of operation.
The,; trend has been to Iput
certain types of cars back in the
luxury class, where they were betore World War I.
•

•

rvu

The rate

plete

4-t—

our

unless

iron

the

ore

miracle

reserves; and
of
tacomte

mining proves successful

turn

increasingly

Venezuela,
f0r

°re-

and

we must

Labrador,

overseas

sources

The United States

is, of course,

"have-not" nation

number

respect to

strategic

metals—

ranging from antimony to zinc—
which are used in making automobiles.! From time to time, deficiencies exist in the availability
of
cobalt,
columbium
copper,
nickel, asbestos, beryl, and selenium.

The

further

tendency

bigger and

grow

From

its

watch

front,

e^Tt

the

"Detroit

News"

Toward

Its conclusion

"For
;

some

vears

was

trend

winehas
years now me irenq
been

America

the

now

toward

big-

ly growing horsepowers. When, if
ever, this trend collides with an'
less

cars

clamor

thirsty for gasoline, the
the industry as com-

adjusts
quirements will
bear."
It

hag

wonderful

taken

less

"trend"

new

re-

Legislature..The:

ini

car,

ine

Chrysler has announced

and

ex-

small

car

' 9ne

the

America

oversized
and

-.f

cars

making

customer

Rambler

for

the

and

cars

who

gave

the

advisability
1

recently
these

traded

reasons

for

after

'First, I couldn't get the big car
my garage.
Second, I couldn't
♦

get

work.

•

„

in
my
parking space at
Third, I wasn't comfortable

inside the

Finally, I found I
was
getting eight miles less to a
gallon of gasoline than on my old
car.

car-

reports
lieve

"Automotive

that

motor

some
cars

Industries,"

engineers

may

be-

evolve into

three

specialized types—one consisting of a large luxurious high-i
model for intercity transportation, another a sports car for

way

travel

over
secondary roads, and
the third, a medium-speed car for

tional

inflationary

pres-

three

months

real

"Under

thoughtful
for

cause

;

| a«a
bld.le

penditures which, in my opinion,
altogether too large for peacetime economy."

who

refer

not

.v?

endowed
.

W1th czanstic

ro^iilations

:orce^_

and Federal

powers

affontinfr

keeo

par

dealers,
"
'
,

the

Reserve

attempts

suonlv

monev
.jl

„

share
/

only

fixe^

franchise

UP 8/2%, while the

holder.

the

stolen

they

are

sometimes

fact

SQjd

under
.

lLmi

auto-

are

£aise

and

representations,

seli-seeking a
advantage,
as

private

whiDDed

eyer

sentation in Colorado.

bill,
any

for

pre_

After read-

zxx.w

we are

'that

ever

countrv

all

£overlWnt
through

this

under

strict

regulation

likclv
lllVLiy

the

enemies

business

falls

ever

change
UkUI6C

convinced than

to
LU

activities

business>

that
not
I1UI

come
CUJlie,

the

but

have been

creases

trated

Price

machinery,

Penoa

nation's

ronrern

policies,

surprising to find
political activity and
Some

ovpr

our

concern over our

monetary

not

flurry of
rightly so.

politicians, however, choose

to deal with symptoms rather than

economic

illness. Senator

Kefauver, Chairman of the Senate

Anti-Trust

and

Monopoly

Com-

mittee, recently announced that
he will conduct an investigation
of price increases in "administered

price" industries, including
automotive industry.

the

"Much of the present inflational

spiral,"

price

said,

"appears to rise

increases

and

equip-

ment. Prices of construction materlals als0 have reflected heavy
fcusiness construction demand. In
the same period however, prices
of finished durable goods, largely
5)asse"g^r cars: aPPhances. and
hous^hold furniture, rose half as
.

xx.,

much,

admin-

about 6V2%.

Comparisons Before and
After

War
.

K/ince
in

1948, most of the increase

dollar income geneiated

in the

manufacturing sector of the

Investigation

npriori

concen-

metals, fabricated metal

products,

because

really do not believe
in
tne
free enterprise to which
they pay lip service."

largely

°my

h,^S be^n *n

econ-

forn\0/ higher

payrolls and government tax
Average

Pni.pS

full-time

annual

were

included,

much

greater.

nonwage

fringe

the

from

dustries'

corporate

1948

are

benefits

rise

becomes
tax-

manufacturing

about

income

70%

inthe

level.

corporate

real

to main-

wage

will

permit.

have

However,

real

Nor

other

out

be met.

can

these

tivity.

costs

make

na-

without

progress

spreading to all economic
of

labor.

continuous

which

Nor

econopiic

benefits

advances without

productivity

tional

living.

wage

increased

stoVpri
...

cause

national

0ur

funds

pro'ductton productlvlt-v a"d t0tal
- Due
to its
investment in

consistently
new

heavy

machinerv and

in new macmneiyana

development of
motor

new

industry's

methods, the

uroductivitv

For

at annual

however,
sumer.

rates

lie—

the

of about,

was

the automobile

Not only did he

con-

receive

of substantially better quality,

car

but

the~average wholesale

was

about 37%

price

less at the end of

the

period than at the beginning.'
1945, gross hourly earnin the automobile industry
have doubled. The average whole- ■
sale prices of cars stand 93% above
Since

ings

the 1945 level.
The major paradox of the automobile

industry
today
is this:
through
laws
that
protect
the
competitive
process,
prices
are

ing

time.

increased

5%, and real earnings of emDloy- '
ees
kept pace.
The big winner,

too much in too short

example, our Federal Government
is making huge military and for-

1919-37

average

subject

are

aeedtd from investors and profits

economic problems,
problems, in
in my
my view,
view, is
is
that the country is trying to do

to
needed discipline*/
discipline;
meanwhile, through laws promotunrestricted

power,

powerful

concentration

unions

are

of
ex-

eign aid expenditures, thereby re1
•
ducing the goods and services

penencing declining resistance to
inflationary wage increases. This
ln«nll,r
oh.
is legally and economically ab-

available to the civilian economy,

surd.

Too many

Until this problem is solved, the
long range outlook for the automobile business is beclouded,
The problem is larger than just
our industry.
It has become the
major economic and political con-

private citizens, too, are
trying to increase their standards
jiving too rapidly. Too many
business

competing
fnr
t

trying to build

are

facilities

pioducti0n

other

with

m„tpriai,

eb-ilipH

and

new

thus
industries

now,

labor

materials ancl sKiiiea laoor.
am
-opposing forei n ai

cern

"ndustol expansion ^othe^de-'
sirabie programs

lime

Aren't

muc'h

I just believe it

pauSed

examjnati0n to

sober

this ques-

time?

aren't

profits
goose

some

trying

jn too short

jng the

f0r

answer

our

dav.

ropnnraicinff

too

And in

starv-

that laid the golden

about

division

Its solution calls
nroviHing

nnH

and

distribution

of the nation's social and economic
power, just as the nation's found-'
ers wiselv
recognized the neces-

sitv of dividing and distributing
political and governmental power,
Historically, the American peopie have corrected
threats to its future
tru«t

ee«*>

such basic
welfare. I

1Q.ft

the

substantially

higher

-Automotive

Productivity

The fact is that wage and

fringe

dollar volume of sales and capital

benefit advances have been greater

investment.

than

brief, the rate of

the

rate

productivity

this

proves

the

case

with this vital threat to our economic future and world leader-

tne same dollar amount since 194»,

despite

groups

produc-

basic

can't

money
and
cheap
without further increases

cost of

the

cheap

credit

can

high

napr°Sress with union.

prosperity> farm distress and suband declining
profits at
tlme
wben
more

tween

are

the national income

.moior lnausuy s proaucuvliy oe

interests—con-

tinuous employment at
reaj

profits

inflation-

«tahnitv

labor's

stifling

COntrast,

market;^.. Furthermore,-1the
n ca^.no

Since
o.uLv

purchasing

cannot

■

again fall-

rontrnl

pPnnomip

cur-

above

developments

with

risen

Government

revenues

rently

has

p^sent road or we will price milhorn5 out of the potential multiple-

the

lain economic stability.
M.y personal sympathies

earnings

emplovees

48%;

rev-

Hin

have

portantly in the capital equipment
industries, b o o s t i n g wholesale
prices by, ,13%.; These price in-

institutions,

and is fundamental,
continue down the

was

groups

caHy

rea,

ary

source

that

fact

capitalistic

^ap^way of achieving'their
.

P»™s have tie-

17%

rela(ive

justification—the

sometimes

units

with

even

nivcixj-.

There

m0biles

unor-

income

are

gross national

Pr°duct has risen only z/2%.

attempt to show there is

who want to destroy democracy
and

in
.

tnei^10re} 1S to control intiation

Recent Federal Reserve actious
in holding down the growth in the
money supply have been n)ore
than offset by the increase in the

who,
cwy

a PubIic purpose in this kind of
In the past 20 months, money
legislation, the bill cites a feeble demand has exceeded supply im-

from

not

M^Teonom

thereforp

pending on savings to tide them
over.
Some of organized labor's
friends recognize this.
Senator
Douglas has said this of inflation:
"It can be a destroyer almost
as evil as war itself.
For those

con-

problem,

services

oon-

P°wer. js educed,
consumers
are
jess abie
buy.
The

better

to ,this amazing bill provisions
which would make a car manufacturer subject to heavy penalties
cancelled a dealership velocity of available funds. As a
franchise with any existing Colo- result, the money supply has gone

in«

Treas^rl
iieasury

they already have
^

growing subsidies,

creased

balance with available goods and

salesmen, auction lots,
V , ^
'
' * *
dealers have written in-

car

a
These

hlvIVeln
"u
nave oeen u.

toree.

farmers

GNP
holding

The principal tools for

asking for

are

workers, just

without fur.

pace

increases

rising incomes.

are

Revenue
Kevenue "to
.to bS
oe

has

and taxes

wages

consumers

Legisla/ Money Supply Outdistances

bill presented to the

ture, these dealers

the

major economic

money may be a heady ex-.perience now, but the severe head- ;«
aches would confront today's

oollapse."
Jf,
The automobile industry grew
reduced
to greatness by passing on part of
markets, or both? Obviously the *be benefit of higher productivity
strain of paying higher
prices is to the customer in terms of reless severe on the recipients of duced prices and greater consumer
increased hourly wages than on valuecan

price

wh^h-they ^
more toward reducing inflationary ^anized and
them,,,vis-a-ms
tlien compcti- pressures by
cutting its own ex- but to such

American

concern

tes™How S

tois

ther

booming economic activity I feel
the government could contribute

"Denver automobile dealers are
showing symptoms of this curious

the

of
"i

economic progress.

tinue at such

before

conditions

present

seriousness
scuuu«'«»

funds for capital expendi-

longer

submitted

et, Mr. Eccles pointed out:

government

you well know, come to the aged, the pensioner,:
earnings are the^ the widows, and other members
sources or means tor se- of our society who have been de-

The

This

Eisenhower

rapid

Such funds make possible the real
gain in employee wages and na-

his controversial $72 billion budg-

twn

causes

Joseph Geschelin, technical editor

president

businessmen

abandoning the larger car
just three months' usage:
in

——

longer.

marked

More than

those who

olten turn out to be the strongest
advocates ot government regula-

first

superiority of

ever

that

v.UiU..,Uv

doubts nationally

about the supposed

"heavy"

trend

have,

time, generated

car

country

sures from many |directions.

ironies of our eco-

Thls

with

wlth

Denver Post

shout the loudest about the blesstree enterprise, unrestneted by government regulation,

for

Rambler, the Metropolitan,
the Volkswagen have collided

the

show: the

tures required to increase our production as well as productivity,

is evidenced by the great demand dlrs

nomic system

abroad.

The
and

aiJU

normal

mand of the consuming public
and the capitai market. With the

factoij
dealersfranare

the

and

curing

existing funds.

ploring the possibilities of making
a

few

a
.

vear

£ toltots

"In

new

victor,

Chicago

figures

.......

Problem., For as
sale of eQulties or

^0n "al low beforrfhe Colorado &r
ot. aU. klnds' »s wel1 as
gtX LegislatureCololado the
spectacular increase in tne use
°
of

nntintn

costs

with Vvvo-?\

man

'This 80% does not seem to be
legfsla- enoufh to ™eet the Present de-

getting

some

said in

months ago-

£..ecting theirefforts atothe State

obvi-

nas England
recenuy its
pui

uction

small

rp!pntiv

hhc

loday

experience

th^ir

last

su^ed in getUng

rado

than
become

bthpr nhcpworc

rrnnv

Mntnrc

the

;

the

Arai

passed affecting;

"uses

for

petition

for

demand

consumer-

tQ wasbineton

succeeded

and

Eer duu
and neaviercars
heavier cars wim
with considiu
constantgei

insistent

dealers-took

tors-

materials.

follows:

the area^ibf factoryrelations,
ttte
organized
''

Eeeles

broad private and central banking

blems

short-

the automo-

orfa^ ra^jtioned'6

Smaller Cars."

cars

luxurious

aggravating

ages of some of these

tive

anism

Marriner S

period.

These

/.•

increase in labor and

,'V quireWibnts, including housing.

of a -deterioration of
voluntary cooperation mech-

automobile

g0% must provide all consumer
goods and services and capital re-

some groups of our

Because
the

at^wlu<A the nation is
up steel has helped de-

chewing

progress is lack of restraint

the part of
citizens.

" dealer

L-

tinued

in-

ship.

It is essential to the realiza-

tion of the huge auto markets of

the future.

The Commercial and Financial Chronicle V.

E«.n
®een

Fuel has an in¬

Gas &

Eastern

Coal

——

Coke

quin Gas Transmission Co., which
is. represented by $1.9 million of
subordinated notes due 1978, and

Store

1954

$89.8

$67.6

$52.4

Utility

Public

35.6

33.6

27.1

30.0

27.1

27.2

(36.8%) of common
Algonquin operates a
natural
gas
pipeline
extending

Total

w.w

from

bertville

(N.

distance

of 240

natural
in

the

J.)

New

6.5

most years.

5.5

5.4

5.1

8.1

6.0

have

$176.9

$151.1

$124.6

by the Association) natural
requirements
are
supplied
Algonquin.

Earnings

paying

share.

per

contract

dividends

In
will

customers

its

100%

foreseeable future

and

earnings of bituminous coal pro-

view of

jrl

o£ power
five

all divisions and consolidated sub-

have fully reflected this favorable

1955.

The marked improvement in revenues

may

ing three-year comparison.

for the last three years, on

ings

41/2%
Per

Pfd.

Common
Per

Shares.._

$43.63

$20.93

$11.56

246,373

Share
of

If we add to these earnings the
equity in the undistributed earn-

2,590,696

which

dend

declared

were

and

1956

would

be raised to

share paid in 1955.

$5.34 per

share.

tive

The

to
stock,
favor-

unforeseen

ments, we expect the consolidated
earnings of Eastern Gas & Fuel
for

1957

be above $4

share.

mon

Twelve

earnings
ported at $3.96
ruary

per

com-

months

Feb-

recently
share.

were

per

Gas & Fuel has

** were
ar ^^v^en<^s

paid

preferred

stock

the

year

same

$4.50 per eight times

the cumulative

1956.

During

dividends

totaling

earnings, which

corn-

favorably with the other
major bituminous coal producers.
pares

■

—

———

•, •

—.—.—

■

_..

1956

Arvin's

"down"

automotive

car

year,

volume

was

virtually equal to that of 1955.
Here

again

established
lt

Arvin

set

has

rules

get and keep important vola good
profit. Its policies

emphasize parts which re¬
good and complete engi¬

quire

Y^e<^

location of Arvin's

parts

supports

lower cost

manufacturers
them

and

can

car

the

over-all

well. Its

consumer

diversification

automotive

field

items carry the
kind of
of fnilltinlp
multiple diversifica¬

Its

lines

sales

such

product

radios, car and electric
space heaters, small electric ap¬
pliances,
window
fans,
ironing
tables, outdoor furniture and
newly

added

barbecue

braziers

diversified among the private
label channels such as the major

are

mail

The

plants. Arvin has

practiced

many

third
a

decentrali¬

years.

major

policy

promise

which

continued

growth, is Arvin's sound, conserv¬
ative

financial

management.

Cornerstone

this '

order

companies, retail
chains, and nationally known tire

simple capital structure. Never

has

Arvin

furred

issued

stock.

out

bonds

Only

pre-

inventories

order

basic policy to grow
vested earnings.
Arvin's
to

than 50%

Arvin

All

come

supervisors

^rainl"S
011 such diverse subjects
as cosx -control, personal i '0ia lioii*-

35 Vz years
of

dividend
pay

out

of age with an average
experience at

12 years of

some

This

elects its
d-»termines its

group

members,

level

own
own

plus 2t7%

17.3

18.89

plus 2.9

16.8

19.79

plus 4.8

2.10

26.3

22.64

■

24.5

24.93

2.01

margin

<2) Excess

turnover.

profit

plus 14.4

plus 10.1 V

tax

years.

resolute

tive financial

charted

has

not know

policies which are

in-" all misjudged by the market as if

working

and -is

administration, and the conserva-

dedicated

and

this

where else to find

were a

cyclical company with

uncertain future.

research,

the high return on invest-

ment,

■'

„

Continued

from

page

•

■

•

—

——r—

the-week

preceding.

During March of last
and

cars

statistical

ago

output netted

125,781

cars.

;

said
last week's operations
week'-at certain General Motors

agency

were

Corp.
Pontiac, Mich., and Buick at Flint,
But scattered six-day operations also were noted at several
Motor. Co. factories plus Chrysler Division at Detroit.»

marked

plants,
Ford

year

United States plants produced 575,260

105,205 trucks.

The

Mich.

year,

short work

Pontiac

including

With

March

completed

output

Saturday last, the indus¬

try's
first
quarter
car
production stands at 1,792,200 units,
slightly above the 1,742,934 last year. • Running below 1956, truck
manufacturing stands at 276,800 as against 313,105 last year,
"Ward's" said.
Last week marked the 2,000,000th car or truck
completion of the year for United States plants since Jan. 1.

management,

tions to

final

The

management

has received

which

policy

greatly

ex¬

panded emphasis in the past two

is Arvin's research program.
Arvin has always been research
minded. One of its principal serv¬

years

ices

the

makers

car

excellent

its

search work.

has

been

engineering and re¬
However, results in

past have been principally on
improvement of present products
and methods, and on preparations

for

car

new

models. Research was

decentralized along with sales and

through rein¬

research

As
far
for

take

new

was

changed. A

central research building was

chemical, electrical and me¬
departments. Its activi¬

has

ties

are

better

the

dav-to-dav

history

of earnings.

It has just

paiu its y /tu consecuuve quarterly

completely divorced from
problems of the

operating
ment

divisions.
"creative

1939

but

February

against

1,148

month.

Current liabilities of the failures in February were the largest
for any postwar month, amounting to $65,406,000.
Failures in all
size groups under $100,000 were 12% to 15% more numerous than
in 1956, while those of larger size dipped 10% from last year.

retailing more busi¬
The most noticeable
rise occurred in service enterprises. • Tolls among manufacturers,
wholesalers
and
construction
contractors
increased
slightly.
While failures
in manufacturing and wholesaling were below
those
of
February 1956,. year-to-year increases were reported
among retailers, construction contractors and service enterprises.
Casualties in the Middle Atlantic, South Atlantic and West
South Central
States were below those of January, while no
change occurred in the East South Central region. There were
month-to-month increases in the other five regions, with the
sharpest rises in the East North Central and Pacific States.
,

nesses

all

Its
assign¬
practical."

industry and trade groups except

February than in January.

failed in

Steel Production Scheduled

nrArlnnio
products

chanical

little

totaled * 1,146

preceding month.

place.

constructed. Now fully staffed are
its

failures

The toll was 12% hicher than the 1.024
a year ago and reached a postwar high for the month of February."
It remained 5% below the prewar level of 1,202 in the similar

result crea-

dam;

second

1956 all this

In
new

Business
in the

projects, and makes recommenda-

occasionally manufacturing.

either for expansion
to finance peak sea¬

production schedules. It has

been

instances,

tended

son

in Book Value

18.35

profit

per

16.2%

1.91

"X*

12.5

ranks.

...

tive

Assetsf J )

2.70

% Increase

Book Value

Total

mover

selling at $40 per share, and still
not be discounting a most promising future.

hi°h level specialists are or-

term

purposes

2.00

vpjow back of earnings, the investment in efficient plant and equip-

eanized into
group
ganized
into a
a "Key Men"
Men" group
totalling about 450. Every mem¬
ber of this group participates in
continuous year-round
formal

hSS
it. gone
PTinP tn tflP hunVc fpr oVinrf_
has it
to the banks for shortmoney

2.00

4.22

Arvin should, in my opinion, be

the

policy

Arvin's determination to maintain

practices
the

tion.

zation for

large number of

outside

S81T10
same

the

afford to make

spread

volume among a
different parts.
Arvin

than

pro-

to plants in five cities in southern
making for more effi—
cient, economical operations and
providing for a competitive situa¬
successfully

has like-

have

men

the

Arvin.

Indiana,

service; to provide that
engineering service; to keep its
plants and equipment completely
modern;
to
efficiently produce
at

channels

diversification

tion among the

neering

the regular

Arvin trademark.

Finally

wellenable

retail

and

the

by a unique "Committee of 24"
composed of young men averaging
well

wholesale
under

unie.st
ze

companies,

0.67

potential executives is undertaken

(By ALEXANDER CARROLL)
In

0.93

0.75

Return

2.35

combination "of

ships, and creativity, to name just
a
few.
Additional
training for

Arvin Industries
Well.

3.78

Sales Assets

_X*

12.2

future

The present
managerial group of 60 men aver¬
ages 45 xk
years in age and has
an average of
19 years of service
at

ratio

con u actual

rare

very

top

through

the basis of esti-

1957

mated

P/E

Except

supple-

a!ou"^
0n
^ew
S'0ek E*cha"% .E??te™

™

X. *0.65

.3.02

2.69

64.61

inevitably to accomplish its goals:

a* a^ levels.

company

declaration was 40c per share.

re-

1.23

on great depth, on youth and on
a very extensive training program

™en} cash p*you} wit? .stock divi"
dends at intervals and in amounts
'° be det,e™lne? by ,the trustees
dur.lng ,.1957' Latest quarterly

develop-

X""

64.00

management- which

placed upon promotion from with¬
in on an individual merit basis,

Arvin's

Barring

tUre

asset.in

emphasis

"•

0.25

Finally, you can add to this pic-^ ment, the forward look personnel

relations,

company

where

,area

6.4

(1.) Pre-tax

ln^us" its
record of

major

per

1.17
-

1.10
0.67

. .

Dividends

Earn, per

1.04

Margin

8.7

1956

been successful in the execu-

wise

paid

announced its intention to

a rvins

The

business.

ings of the Virginian Railway and holders
of
the
common
Algonquin Gas Transmission, the which payment compares
earnings of the Association for ably with the 60c per common
common

,.t...

Def. 0.11

1954

forward-

has a fine
employee
been

has

increasing

stock divi-

$1.40 in cash plus 2%

Arvin

try.

harmonious

$0.67
2,580,868

$1.56

$3.61
2,669,734

Shares...

Def. 0.10

6.9%

1952(2)

1953(2)

looking personnel policies. Its excellent employee relations record
is well known through the

$2,848,525

$5,157,205

'2.29

,20.36

Profit*

philosophy which gives great
promise
for
future
growth is

1954

1955

Net Profit

% Pre-tax

1955

and

ample

are

Record

(millions)

9.35

______

Growth

(millions):

15.19

Profit

management

advanced

tables

CHART II

30%—a truly remarkable
of

A,-uin

here, indeed, has been
growth company,

CHART. I

Sales

('-;■ /r"x,

1954 over 1953
TV business
low profits, earn¬

Performance,
Another
area

Stock:

Number

_____

its

fhniA?

iV^f'deeoinftiisimieiite

Arvin's Recent Profitability Record

almost exactly the same
profit margins were

were

up over

Stock:

Number of

1956

Arvin's

$10,749,712

Cum.

1951

|eS Herefare se«i^^or futufe

in dollars and

oustanding at the end of each year.

1956

Income

'},;

'•

1941____

standards

27%

because

Earnings
Net

V";X.

when Arvin quit the

per"

SSd

by the follow-

seen

•

net worth of about 37%.

dropped

needs over the next four
and the increasing

con¬

caused

has

years

sidiaries increased

over

1946_

■

1936________ X

high average re¬
these

for the

some

4wiJWtAyJL

Arvin's 25-Year

the company to be
win continue upward, tough minded towards unproiitthe authentic estimates able lines. Even though-its sales

production of steel and aluminum,
The earnings of the Association

17%

;

/V;-.

-v.

maintain

include

year.

product divisions and ; new

sumer

fields

new

healthy

1931.™

should

added

table./tMost^

and

growth stocks( it has averaged
about
10.3%), Arvin's manufac¬
turing skills have enabled it to

Insistence

a pronounced up¬
confidently believe that

trend

thjs

revenues

products

:W- X

showing

1954,

current

pres-;'prove that

ent

.L<XXX/v";'VV' V-X-X'

very

the

ex¬

fected resulting in a new material evidence of Arvin's past growth
called
"Arvinyl" which may have- and its ability to earn unusually
almost endless potentialities both
high returns';on investment to
A
in connection with Arvin's

margins may look relatively low

out

during

are

department
These

this

pected

important! of allj;;^ plastic-to-;
metal laminatingjirocess was per- .-X These 'two

compared with many more popu¬

turn

?.3:Ju
ducers6are; and'have"'^/^
with

Wil1 cont*nue to im-

operating

—

Earnings and Dividends

prove.

Sales and

Current

expected

...

al-

•

products

new

roll-away^; ironing-

lar

additional

take

net

Arvin's

worth indicating that the

Gas

Algonquin's

quantities of gas and it

Dealers

were

growth trend has been resumed.
Although
i t s
pre-tax
profit

12
6
2

—

accordance

agreements,

Industrial

Railroads

Transmission Co. improved sub¬
stantially in 1956 and the company

began

-—

Retail

55%
25

plants..

coke

and

General

added

been

have

researchr program

Several

re¬

20-inch window farts; several new"'
aluminum outdoor furniture
items; a complete" line of brand
new outdoor barbecue grills and

company's affairs. The heavy tax
burden
itself,
and
its effect of

companies

steel

utilities,

Export

gas

Algonquin

Exceptions have been

profit tax periods which
strongly
influenced
this

excess

Electric

been received.

taients.

the

„^«,+™U automotive. jtems some of which
a one-pound, all transistor
uavp
airpadv- hppn
mihmitterl
to
pocket radio; a nevr iine of 14 and *

cludinto

All of
owned

England area.
Gas Co.'s (wholly

Boston

youth,

new

.......

miles, distributing
different utilities

gas

Boston

"creative

its

in every major product group, in-r

coal sales in 'drying up funds for reinvestment
the previous and expansion were primarily rey€ar by 33% and have improved sponsible for the sub-par growth
71% *n
*w0 yearsin sales and profits in 1952-53-54.
Goal sales in 1956 were dis- jn the past two years, however,
tributed as follows:
14.4% and 10.1% respectively

Eastern Transmission Co., at Lam-

portable TV cabinets for

which sizable orders have already

re-

operational experiX

well

increase

1956 increased over

Texas

engineers-such

responsibilities
tocomits ready
bringing results.
In 1956
items
increase the com¬

to
to

The revenues from

with

connection

a
u

spite

doubled

net

9.2

foremost

two

selected to head it. As

uity nave

enee

worth an average of
at least 8% a year. This goal has
been
achieved
or,
exceeded
in
pany's

stock.

xivin

5.8

10.6

Pig Iron

51,711 shares

been

that

1955

Marine

were

sun

Arvin's

1956

Plant—

vestment of $7.1 million in Algon¬

have

Dollars)

(Millions of

cdmpetitive conditions.

Arvin's

months will
consecutive

which cash dividends
paid.
management has stated
considers one of its im-

years

Revenues by Operations P
o r t a nis
t
owners
is
owners

to
w Sales and

due
uue

satisfactory
satisiac
wry

verv
very

Fuel Assn.

BELTCHEV)

Dr. K.

(By

completed

have

Eastern Gas

in six

and

dividend

Continued from page 2

Thursday, April 4, 1957

(1614)

This Week to Yield

91.6% of Ingot Canacity

31,600,000 net tons of steel in the first
quarter, "Steel"' magazine reported on Monday of this week. The
yield represents 94.7% of capacity or an annual rate of 126,400,000 net tons, considerably above predictions for the year.
The
metalworking weekly said that on the basis of first,
quarter operations, the industry appears to be heading for a more
profitable year than it had in 1956 when its earnings established
Steel

record.

mills produced

X
•
Earnings totaled

•

$l,140,*C00;00fr m~1956'or V% above the pre-

•

Volume -185Number• -5626WTh& Ctron/nfevcial <ind*Findii<xal 'Chr&nicte

vious

record

$1,120,000,000. set in" 1955, according to -the publi-

senting 94%

the

nation's

ingot capacity."

•

-C

•improved
.volume
the

practices.

sales

1956

strike of steel

While the

did

7.82

cents

•

->••••.

creased

1955.

costs

facilities

under

and 'material

certificates

^There

ton

fast. amortization

and

of' defense

In 1956, Federal income taxes

necessity.'";'".j

were

4.7%

were 0.1% greater than profit.
Federal income taxes took $1,010,000,000 from these com¬
panies in 1956. In 1955, they took $1,050 000,000. r
J
V

;most of the steel plants were idled six weeks

American* Iron- and

making

91.6%

rate

capacity

steel

for

capacity

Steel

entire

for the

having

industry

week

by the strike.

Institute

companies,

the

96.1%

will

The

industry's

'is based
For

duction

ingot

beginning April

production

annual capacity

the like

week

2,411,000 tons.

the

of 133,459,150 tons

month
year

placed at 2,406,000 tons

was

for

rate

the

ago

rate

ago.

of Jan.

The

the

decline

cottonseed

The

Department

oil

prices

Agriculture

1, 1957.

Lamb

prices

advanced

for

crop

fourth

past

128,363,090 tons

of Jan. 1, 1956.

Electric Output Eased

Slightly the Past Week

The amount of electric energy distributed by the electric

sumed in

lightW;

and power

industry for the week ended Saturday; March'30, 1957,
v
-was estimated at 11,694,000,000 kwh.,
according to the Edi'son Elec-'*v
^tric Institute. This represented a decline below-th© previous week.

of soybeans.

consecutive

of the previous week; it increased 702,600,000 kwh.

;

far,

shirt

revenue

cow

increase of 51,205-cars, or-8.1%; above the

responding week in 1955.

' '

-•

Cotton

manufacturers

U. S.

Automotive outout for the latest week ended -March

-according to

"Ward's Automotive

.of the prior week

Last

week

cars

that

Last
in

made

the

reported there were
States.
This compared' with

agency

United

Last

week's

a year

ago."

•-./

23,000

trucks

23,220

the

output declined below that of the previous
f
week-by 7,556 cars, while truck output declined £y 220 vehicles",
•during the week.' In the corresponding week last year 125,781
cars and 24,082 trucks were assembled.
£
car

Canadian output last week was placed at 8,963 cars and
In the previous week Dominion
plants built

-trucks.

9,211
week, 8,540

1,633 trucks, and for the
-1,555 trucks.

comparable

1956

"*'■

•

cars

and

•,

......

■

Business Failures Down
Commercial
ended

and

March

'Bradstreet, Inc.,
weeks,
year

the

toll

industrial

from

reports.
exceeded

and the 237 in

prewar

;

dealer
year

men's

The

1955.

level of 310 in

318

failures
in

263

290

the

in" the

lowest

level

comparable

However, failures

were

6"%

four "

week

last

below

the

1939.

+ 5 to

Wholesale Food Price Index Edged Upward in
Lastest Week to Attain a New High for Year
street, Inp.,

rose

vious

high

5.6%

•

wholesaie

gain

price index
somewhat to $6.22
of

the

over

food

$6.20
$5.89

week
the

compiled
on

Coast

clothing,

year-to-year

major

the

March

earlier.

26. from

This-

comparable

Dun

declines

appliances

and

the

pre¬

represented

period

year

the

from

new

level

passenger

cars

^he preceding week,
below those of

were

dollar

volume

retail

trade

the

unchanged to 4%

was

—5

Grocers

•

reported

moderate

decreases

purchases

dairy

There

was

slight rise in wholesale trade the past week,

increased
The

their

total

the similar

orders

dollar

for

volume

furniture and
slightly higher than

apparel,
was

some

that

index

Department store sales

country-wide basis

on a

taken from

the Federal Reserve Board's index for the week ended

1957, increased

ceding week,
For the four

the like

from

March

16,

1957,

March 23,
period last year. In the pre¬
increase of 2% was reported.

March 23,

weeks ended

1957, a decrease of 3% was
period Jan. 1, 1957 to March 23, 1957, a gain
registered above that of 1956.

For

was

the

sales

volume

New

York

City

drop of 7% to 9% below the like period

the

fact

observers

represents

the

sum

total

the price

that

Easter

comes

three

level."

the

and

million

from.

...

weeks

last

week

year ago,

later

this

Maryland Ry.
Equipments Offered

was

the

1957 advanced 15%

period in

City for the weekly period ended March
from the like period of last year.
an

increase of 7%

For the period of Jan.

recorded

1956.

Co.

Inc.

and

are
offering
today
(April
4)
$3,450,000
Western
Maryland Ry. Co. 3%% equipment
trust certificates, series V, matur¬
ing annually May 1, 1958 to 1972,j
inclusive.
.

The

yield

certificates

from

3.50%

are

scaled

3.80%,

to
ac¬

cording to maturity. Issuance and
sale of the certificates
to

the authorization

are

subject

of the

Inter¬

state Commerce Commission.
The

issue

be secured by
switching loco¬
motives; 100 covered hopper cars
and 300 hopper cars, estimated to
cost $4,312,506.
seven

Diesel road

in the offering are
Merle-Smith;
R.
W.
Pressprlch & Co.; Freeman & Co.;
New York Hanseatic Corp.; Wm.
E. Pollock & Co., Inc.; Shearson,
H a m m ill
&
Co.;
McMaster
Hutchinson
&
Co.; and
Suplee,
Yeatman, Mosley Co. Inc.
&

With F. L. Putnam Co.
(Special to The Financial Chronicle)

BANGOR,

trade

In the

(revised)

was

For the four weeks ending March 23, 1957 a gain of 1%

registered.
index

Stuart

associates

Me.

now

—
George
H.
with F. L. Putnam

preceding week. March 16.-1957,

pound

Western

registered

year,

rise

of 4%

above

1, 1957 to March 23, 1957
that of the corresponding

during
1956
$409,186,000 and net
$41,240,000 compared
with revenues of $386,535,000 and
net income of $34,307,000 in 1955,

due mainly

According to the Federal Reserve Board's index, department

23,

revenues

Metals

amounted

Bangs is

state.

store sales in New York

reported.
per

bonds

mortgage

investors

$15

consolidated

Reynolds

ago.

foodstuffs and meats in general use and its chief func•tion is to show the general*,trend of food
prices-at the wholesale

Associates

1956 week.

raw

plans to obtain
$100 million from

first

borrowing

food

some

and steers.'

The

sale

institutional

pur¬

products and poultry, but the call for fresh meat was unchanged.

Brad-

$88

company

additional

the

similar-

—1; South Atlantic +3 to +7; East South
Central —2 to +2; West South Central +1 to +5, and Mountain
States —1 to +3%.

Retail
-

Higher in wholesale price last week were corn, oats, hams, "
bellies, butter, cheese, cocoa, beans, hogs and lambs. Lower in
cost were flour, wheat,
rye, barley, cottonseed oil, eggs, potatoes

of 31

The
an

.income

+9; East North Central —4 to 0; West North Central and

Pacific

new-

New

said,

banks.

slightly-above

was.

slight

were

increase

total

recorded.

1957

and

Wednesday of last week

the

Dun
in

the

upper

million, Mr.
and
its
annual
capacity is 100,000 tons of
primary aluminum.

—Dick

the, preceding week,

Although
the

declined

State

Reynolds

pick-up in purchases of cotton

period ended
higher than a
year ago, according to estimates by Dun & Bradstreet, Inc.
Re¬
gional estimates varied from the comparable 1956 levels by the
following percentages: New England -j-8 to +12; Middle Atlantic

cost

plant

Halsey,

The

there

inventories of

textiles.

Slightly the Past Week

Estimated

•

ago.

buyers

Inc.
offering is part of a $150
financing program for the

Reynolds

„

moderately
''

last.year.

Despite

and

week

expanded

chases

1,736

cars

banking
firms
Dillon, Read & Co.,

of
a
new
primary
plant
near
the
St.
Lawrence Seaway project and to
expand alumina, sheet and plate
fabricating facilities.

primarily
interested
in
women's
Spring
apparel, housewares and furniture last week.. Total retaiL vol-

the

previous week and 24,082

consumption of cotton
World 'stocks of cotton

the

week

re¬

construction

products.

rated

were

However,
-

and

aluminum

;

Moderately Exceeded Level of Previous
Registered a Slight Increase Above

Week and

level

and trucks.

subscribe,

•

Trade Volume

•:

29, 1957,

decliihed below

Reports,"

both in the production of

pay

,ume

industry assembled an estimated 131,090 cars,
;
compared with 138,646 in the previous week.
The past week's
production total of cars and trucks amounted to. 154,090 units, or
.a decrease of 7,776 units below that oidhe
preceding week's out¬
put, states "Ward's."
•'? :
'

•

Like Period of 1956

;,V;.

sale

its"

The

bales

Output Registered a Decline Under
That of the Preceding Week.

the

stock

investment

million

1951, according to reports from the
Advisory Committee. Increased buying by
boosted trading volume in combed cotton
a

Total

cor¬

Car
t

the

intends to

from

common

all

headed

since

print cloths tob;™'-^*

Shoppers

held

Inc. and Reynolds & Co.,

Loadings for the week ended March 23, 1957;* totaled 685,833 ;■
cars,
a
decline of 11,415 cars, or 1.6%
under.The*corresponding

week, but

decline

smallest

lawns the past week./There was

freight for the week ehded March'23, V-;
1957, declined by 3,393 cars Or 0.5% below the preceding week, the
Association of American Railroads teports.

1956

the

stock,

proceeds

own

York

countries, the addition to Free
was

per

one

own
outstanding
preferred stock.
Underwriting of the two offer¬
ings will be handled by a group,

Feb¬

International

1.6% Under Like Period in 1956
Loadings of

through

exports this season, at 5,268,000
about five time as large as a year ago.

were

Notwithstanding
some

1956

Car Loadings Ease 0.5% Below Prior Week and

season

Contrastingly, cotton

V-

April

current

$28

shares of 7%

bales in the

000

comparable 1956 week and 1,890,000 kwh. over+he week ended
1, 1955.
: ,r;

the

its

deem

f!.

for

seven

stock for sub¬

for the 435,904 shares of
Reynolds
Metals common stock whicn it is

were

consumption

746,270

price

common

the

use

amounted to 5,278,000 bales, down slightly from the 5,432,comparable period a year ago.

ruary

6.4% above

week

stock

common

each

Metals

week,
in hog

February, 1956.

Cotton

The past week's output-decreased 29,000,000 kwh. below that-..

•the

the

April 2,

April 2, 1957. Both offer¬
ings expire April 16, 1957. United
States Foil Co., which together
with its subsidiary Reynolds
Corp., owns 50.7% of Reynolds

was irregular, price levels at the
slightly higher than a week previously.
The-Census Bureau reported that cotton consumption in Feb¬
ruary amounted to 34,218 bales for each working day, slightly
more than January's 33,623,
but less than the 38,001 bales con¬

The
share

common

for

Although trading in cotton

is $42

record

comparable because capacity is higher than capacity in 1956. The
percentage figures for 1956 are based on an annual capacity of

Reynolds, Jr.,
company.

share and at the rate of

week

reaching the highest levels since last July. A reduction
receipts was accompanied by a rise in hog prices.. Steer and
prices were up, with sow prices the highest in two years.

pro¬

the actual weekly production
97.7- The operating rate is not V.

Co.

entitled

the

one

held,

scription at the

was

accompanied by

was

the

of class B

was

announced

the

United
States
offering to holders of
outstanding class A and class

its

cottonseed oil
attributed

years,

selling

that farmers intend to plant another record

each

■

Foil

prices for soybean oil.

the basis of

Simultaneously,

•

rights to
914,07JF

additional

1957.

products

prevalent among

comparable drop in the

1957

94.2% and

farm

to stockholders of record

Washing¬

from the

While coffee trading

nearly five

Much

for

President

traders that cottonseed oil was not
priced with substitutable oils and that this had
adversely affected consumption.
;

ago

subscription price

about $1,000,000,000.

prices.
steady.

trading
markedly.

common

according to

competitively

ago.

stimulated by
had fallen in the

was

surplus

cocoa

were

purchase
share

disposal

stockholders

common

very slow, with volume confined to
Sugar prices advanced slightly, contrast¬

heaviest

declined

belief

equiv¬

week

the

futures

compared

as
a

the

average

the

for

increased by

fairly quiet, prices

steel-

1957,

weeks

was

the

alent to 2,344,000 tons of Ingot and steel for castings,
92.4% of capacity, and 2,364,000 tons (revised)
*

year

little support generated

very

funds

ing with the declines in

.%»; :r

that

announced

.with
-

scattered fill-in orders.

industry and increased rates for overtime work
are pushing up its total
employment, despite the Continued introduction of labor saving equipment. Employment rose 1.4% in 1956
.over that of 1955. i Employment costs ".lumped 7.7%
even though
The

date

Reynolds Metals Co. is offering'

{•'■ Flour trading remained
.

Growth of the

operating

289.10

35,000,000 in the preceding week and 42,000,000 *a year ago.- Wheat
trading was especially large, with volume almost twice that a
week previously.

less than the. indus¬

try's net profit while in 1955, taxes

Offered at $42

com¬

Average daily trading volume on the Chicago Board of Trade
increased to about 50,000,000 bushels last week, compared with

was

that

news

abroad might be

•Even so,

•

comparable

prices declined last week. Selling
reports that the best rains in many months
"
' drought-stricken areas of the Southwest.

labor

far.

Reynolds Melals Stock

Grain

Even though sales and net profits were
up in 1956, the Federal
collector got 3.7% less than he did in 1955 because of in¬

.tax

the

steel

Past Week

workers.

industry earned more money in 1956 than it
analysis showed its net profit in 1956 as 7.28
of-every sales dollar, compared with a net profit of

out

cents

the

March 25, the Dun & Bradstreet daily whole¬
sale commodity price index was
fractionally below the 289.40 a
■'
week earlier, but it remained a few
points higher than the 285.59

•

the

1955,

1957

the over-all level of wholesale

recovery,

(1930-1932=;100)

had air 8.6% larger dollar
1955, despite a 1.6% decline in
Output was restricted by a six-

mild

Low for

modity prices dropped to another low for 1957

companies
than

industry's ingot production.

"week

©f

The

After

The increase in earnings came
largely from, increased prices
,of steel and efficiencies being realized from new facilities and

New

•

(1615)

Wholesale CommodityuPrice Index Registered

*•"\vr

-. -

cation's 32nd annual financial analysis of the steel
industry. The
figure is based on the performance of 33 ingot producers repre¬

Company,

was

Inc.

previously

of Boston.
He
connected with

Chas. A. Day & Co.

Joins Dewey, King
(Special to The Financial Chronicle)

BOSTON,
Charland

has

Mass.

—

joined

Ronald

the staff of

Dewey, King & Johnson, 53 State

(1616)

44%

J W..'

T-

;/V/"

in
Inc.

Adams-Phillips,

■,.-

—

Underwriter—Pasadena Corp., Pasadena, Calif.

Calif.

Addison
March

vertible

(letter

1972

due

debentures

Tex.

the rate

of $1.50

■

con¬

(convertible into common

per

Underwriter—None.
-

cents). Price—50 cents per share.
Proceeds—To reduce obligation, purchase tools and for
working capital.
Address—P. O. Box 322, La Junta,
stock

(par

Underwriter—Mountain

Colo.

States

Securities

Allied Resources Fund,

Inc.

•

- .<

Corp.,

REVISED

Kings Mountain, N. C. - j y
shares of common stock, of which

Inc.,
to

are

for

offered

subscription

each
four shares held; and the remainder will be offered to
the public.
Price—At par ($1 per share).:/ Proceeds—
To repay loans, for exploration and development work,
stockholders at the rate of five additional shares for

construction and working capital.
A.

./-'■: /■ '■

S. MacCulloch of Vancouver, B.

dent and

- ■

283,676

principal stockholder.

Underwriter — None.
C., Canada/ is Presi¬
;

;

^ Cascade Natural -Gas Corp.; Seattle,Wash. (4/24)
March 29 filed 226,820 shares of common stock Xpar $1)

•-

7 filed

;

subscription by, common. stockholders'

offered for

of record April 24 oh

the basis of one new share fori each

2Vz shares held; rights to expiTe on May'^8;

privilege); rights to expire on April 9, 1957. Price—$22
per share.
Proceeds—Together with funds from private
sale of $750,000 5% first mortgage bonds, Series H; due
May 15, 1987, for property additions and improvements
and to repay bank loans.
Underwriter—Dillon, Read &
Co. Inc., New York. .
-/ ■-' -; '
,* ,

Denver, Colo.
:

;

& Light Co.

Power

Mines,

if Carolina

34,377 shares of common stock (par $1)
being offered for subscription by common stockholders
of record March 22, 1957 on the basis of one new share
for each eight shares held
(with an^oversubseription

March
mon

Hills

Black

March

Agricultural Equipment Corp.
* ;
1 (letter of notification) 500,000 shares of com¬

March 29 filed 679,469

rights to expire on April 29, 1957. Proceeds—To retire
an outstanding debt.
Office—20 Elm St., Pittsfield, Mass.

Benjamin & Co., Houston, Tex.

Gas Co. (4/8)
; :/';j
(letter of notification) 20,000 shares of common
stock (par $10) to be offered to common stockholders
around April 8, 1957 on the basis of one new share for
five shares held (with an oversubscription privilege);

share). Price—At face
amount (in units of $100 and multiples thereof).
Pro¬
ceeds—For the purchase of equipment and hangar space
and working capital.
Office — 302 Texas Bank Bidg.,
Dallas, Tex. Underwriter—Creson, Sledge & Co., Dailas,

stock

for increased

Berkshire

SINCE -PREVIOUS TISSUE

and

open

(letter of notification) 240,000 shares of com¬
mon stock (par $1).
Price—$1.25 per share. Proceeds—
For partial payment for plant site; partial payment of
obligation to Memorial Inc. and for working capital.
Office—4718 W. 18th St., Houston, Tex. Underwriter—
28

March 8

'
of notification) $300,000 of 6V2%

Airport, Inc.

acquire additional truck terminal branches;
inventories; and for working capital. Busi¬
ness — Transport refrigeration equipment.
Office^-947
Communipaw Ave., Jersey City; N. J/ Underwriter—
Fred Kaufman Co., 120 Elm St., Orange, N. J,^':
-

'•,,

Beautilite Co.
Dec.

(letter of notification) 5,000

-""5' **

/"•/' • ITEMS

shares of common
stock (par $20) to be offered to stockholders, officers,
directors and employees for a period of 10 days, the un¬
sold portion to be offered publicly. Price—$21 per share.
Proceeds
For purchase of additional autos and for
working capital. Office — 10 S. Craig Ave., Pasadena,
Teb.

*' %'

r*'-

iff Df CATES :ADDITIONS7c•

?Prioe—To be

supplied by amendment Proceeds f-^- To reduce '4%%
notes by $1,000,000, to repay* about $695,000 of bank loans
and for, construction program.;-UiiderWriter^— White,

Weld &

Co.-f New York. /;•; ' j ;-r*'

Central

•

./-''.i"-*

American ^Acceptance* Corp.-^ /

South

Dec. 14 filed 400,000 shares of common

stock (par one
;

Price-^-At market. Proceeds — For investment
Underwriter—Fund Corp., 523 Marquette Ave., Minne¬

cent).

apolis, Minn.

Aluminum

Co.

Canada, Ltd. (4/10)// • •
March 21 filed $125,000,000 of sinking fund debentures
due 1980.
Price—To be supplied by amendment./ Pro¬
ceeds—Tq retire bank loans of $63,000,000 and for work¬
ing capital and future construction expenditures. Underwriters—The First Boston Corp. and Morgan Stanley &

Co., both of New York,

None. r."
,

Amalgamated Minerals, Ltd.
•"
Nov. 23 (letter of notification) 3,000,000 shares of com¬
mon stock
(par five cents). Price—10 cents per share.
Proceeds—For mining expenses and development of oil
properties. Office — 901 Sherman St., Denver, Colo.
Underwriter—Lackner & Co., Denver, Colo.
-

if Amcrete Corp.
(letter of notification) 300,000 shares of com¬
mon stock (par 10 cents).
Price—$1 per share. Proceeds
—For expansion and equipment. Business — Prefabri¬
March 29

cated
Fox

wall

concrete

Island

Road,

sections

Port

and

Office—

buttresses.

Chester,

Underwriter—

/.// ////v

'.//" //'*

Provident

Investors

Corp.

/' '/'/■>;

••

: Century Controls Corp^ Fyrmtngdaie, k{
Aug. 27 filed $600,000 of 10-year-6%^/lebentures. Pi4ee—

/• ,/

90% of principal amount. ; Proceeds^For research and
development; expansion; e<guipment;r andother' dor*
r, / ;
•" porate purposes. Underwriter ^--Nonei y /;

Blue field

held.

Price—$17

Proceeds—For advances to

share.

per

Chinook Plywood,

subsidiaries/ and for general- corporate
Underwriter—None. Offering — Expected in
/:///
: - %//%/.-/

purposes.

April.

•"

New Orleans, John S. Tanner, of Dallas, and C. L.
Edmonds, of Houston, three of the 22 directors, are
Chairman, Vice-Chairman and President, respectively.
of

Apache Oil Corp., Minneapolis, Minn.
25
filed
50,000 shares of common stock
(par
$2.50). Price—$6 per share. Proceeds—For investment
March

of APAF

in stock

Co.,

subsidiary; to

inven¬

carry an

tory of leases for present and future drilling programs;
and for

general corporate purposes.

Underwriter—APA,
Inc., another subsidiary, Minneapolis, Minn.
Applied Physics Corp..
March 8 (letter of notification)

Inc.

viz.: $25,-

if Colonial Aircraft Corp., San ford, Me.;«
March 29 filed 250,000 shares of common stock (par 101),
to be issued upon exercise of warrants to purchase the
following number of shares and held as follows: Glick

000,000 of sinking fund debentures due 1987 of British
Columbia Power Commission and $20,000,000 of sinking
fund debentures due 1982 of Pacific Great Eastern Ry.
Price

To be

—

supplied by amendment/ Proceeds

—

bank loans and for capital expenditures. Under¬

repay

(par $1).

Office—362

^V. Colorado Street, Pasadena, Calif. Under¬

writer—Schwabacher & Co., San
Automation

•

Francisco, Calif.

Co.

held; rights will expire
by amendment.

April 22.

Proceeds—For

Price—To
capital

penditures and to finance increased inventories and
counts receivable.

478

ex¬
ac¬

Underwriter—Morgan Stanley & Co.,

New York.

shares of capital

response

when

you

Impact!

advertise

services

get

them in the

greater

Chicago

Tribune. No other medium in Chicago and Mid-America

gives

such comprehensive coverage of business
the general public. For sales
impact
that gets best results, call your advertising counsel
or
nearest Chicago Tribune representative
today.
you

executives and

THI

WORLD'S

CM AT 1ST

X C W S f A 11 *

J-

•

//•/;■/

Underwriter—Landau Co., New York.

N. Y.

Columbia

Gas

{

System, Inc.

for each 13 shares held

if Bureau of National Affairs, Inc.
21 (letter of notification) 500 shares of common

and

named

drilling, working
Under¬

later.

For

14,000 shares of com¬

machinery, equipment, inventories and
Office — Washington and Cherry Sts.,

Conshohocken, Pa.
California
March

Underwriter—None.

Electric

Power Co.

Commonwealth Investment Corp.

499,400 shares of common stock (par $1).
share. Proceeds—For working capital to
expand
company's business and operations. Office—■Sioux Falls, S. D. Underwriter—None.
14

filed

Price—$4

(4/9)

300,000 shares of common stock, for property
and improvements and to repay bank loans.

(par $1).
current

Halsey, Stuart & Co. Inc.; Kidder, Pea-

Witter & Co.

ceived up to 9
So.

a.m.

(jointly). Bids—Expected to be re¬
(PST) on April 9 at Room 900, 433

Spring St., Los Angeles 13, Calif.

bonds,

Publications, Inc., Topeka, Kan.
filed $1,000,000 of five-year 4% first mortgage

series

six, and $3,000,000 of 10-year 5% first
mortgage bonds, series seven. Price—At par. Proceeds—
To redeem outstanding bonds and for improvement of
present facilities and other corporate purposes. Under¬
*

O <■'

•

.!■■■:

Jan. 31

stock

Price—S3

10Q,000 shares of
per

share.

common

Proceeds—To

III.

Price—$5 per share. Proceeds — To discharge
payable, including bank loans, and long
in the total sum of approximately $1,030,000;

equipment;

—

Allen

and

Shaw

for working capital.
Under¬
Co., 405 Lexington Ave., New

17, N. Y.; and Sliaw & Co., San Marino, Calif.

★ Continental Can Co.,
March 29 filed

Inc.

131,593 shares of common stock (par $10),

together with an equal number of options for common
stock, the latter to be offered under the company's
"Employees' Stock

Purchase Plan 2" to executive em¬

ployees of the company.
Continental
Miss.

(letter of notification)

(par 10 cents).

new

writers

York

Capper
March 25

for

Corp., Chicago,

558,100 shares of class A common stock

notes

debt

term

International

filed

Probable bidders:

body & Co.; White, Weld & Co.; Lehman Brothers and

per

Conticca

March

Underwriter—To be determined by competitive bidding.

Dean

Oil Co.

notification) 75,000 shares of common
stock. Price—At par ($1 per share). Proceeds—For oil
drilling expenses. Office—1848 South Elena Ave., Redondo Beach, Calif.
Underwriter—Samuel B. Franklin
Co., Los Angeles, Calif.
Jan.

11 filed $6,000,000 of first mortgage bonds due
Proceeds—Together with proceeds from proposed

Blvd., Chicago 4, 111. Underwriter—None.
Creek

March 14 (letter of

(par $10) to be offered for subscription by
stockholders and employees.
Price—$12.50 per, share.'
—

to be offered to stockholders on a basis
Price—$13

share for each three shares held.

share. Proceeds—For working capital and for reduction of short term loans. Office—Board of Trade Bidg.,
Comanche

(letter of notification)

working capital.

new

141 W. Jackson

purposes.

stock

Proceeds

(par $10)

one

per

if C & D Batteries, Inc.
mon

(letter of notification) 22,956 shares of common

Feb.

stock

to be offered publicly, and 100,000
Price—At par ($1 per share). Pro¬

equipment, exploration,
other general corporate

Columbia Malting Co.

For

—

April 3, 1957,

Dillon, Union Securities & Co., both of N.

Eastman

Underwriter—None.

Burma Shore Mines,, Ltd., Toronto, Canada >
July 26 filed 600,000 shares of capital stock, of which

capital

record

—

(no par). Price
$32 per share. Proceeds — For
working capital.
Office—1231 24th St., N. W., Washing-

are

(no par)

on the basis of one new share
(with an oversubscription privi¬
lege); rights to expire on April 22. Price—$15.75 per
share;
Proceeds
For
financing construction work
of subsidiaries.
Underwriters — Lehman Brothers and

March

•

being offered for subscription by common stockholders
of

Cargo Cool Corp.
•

Proceeds—From sale of shares

.Underwriter—None.

None.

writer—None.

(Iljirajjo tFributtje

sellers of warrants.

New York,

21; rights will expire April

tori, D. C.

140,000

Inc.
Feb. 25 (letter of notification) 50,000 shares of common
.stock (par five cents).- Price—$3 per share. - Proceeds
—For promotion and advertising; working capital; and
for development of new products,
Business—Manufac¬
ture and sale of golf balls.
Office — 161 East 37th St.,

additions

and

10 cents per warrant.

March 8 filed 1,675,415 shares of common stock

sale

Your offers of securities

12, 1957. Price—
$62 per share. Proceeds—To prepay bank loans. Office
—36 Main Street, Brockton 67, Mass.
Underwriter —

1987.

Adds Sales

offering,

Colt Golf,

Co.

(letter of notification)

March

(4/8)

filed

supplied

stock (par $25) to be offered to minority stockholders on
the basis of one new share lor each 13 shares held as

500,000

535,148 shares of capital stock (par $9)
to be offered for subscription by stockholders of record
April 5, 1957, on the basis of one new share for each
10 shares

...

shares to promoters.

Development Mutual Fund, Inc.

Wilcox

Edison

Brockton

March

writer—To

ceeds—For investment.

ton, D. C. Distributor—Automation Development Secu¬
rities Co., Inc., Washington. D. C.

New York
March 29 filed (by amendment) an additional 300,000
shares of capital stock (par ($1). Price—At market. Pro¬

ceeds

Babcock

Offering—Expected

if Broad Street Investing Corp.,

Aug. 24 filed 300,000 shares of common stock. Price—At
market.
Proceeds—For investment.
Office—Washing¬

March

Denton, Inc.

///,,;■'■/■?

of original

underwriters

Co., Inc.,

shares; and by three individuals 110,000 shares." Price— Shares to be offered at market. Warrants are exercisable

stock

32,000 shares of com¬
Price—$9.25 per share. Proceeds—
retire demand notes payable and for working capital.
stock

Underwriter — Industry Developer#, H
,•/■"' '/-■
.;/ •
-

operating capital.

• British Columbia (Province of)
April 3 filed $45,000,000 of debenture issues,

"/f' / /

lncM R»inier, Oro.

Sept. 4 filed 200 shares of common capital stock. Prlee—
At .par ($3,000 per share). Preoeeds^For acquisition otV
a
plant site, construction o£ a mitt huilding, purchaae
and installation of machinery: and equipment, and a#

wholly-owned

later this month.

50,000,000 shares of common stock (par one
cent). Price—$2 per share. Proceeds — For working
capital and general corporate purposes. Office—Dallas,
Tex.
Underwriter—Peoples Securities Co., J. D. Grey,

Supply' Co., Blue field, W;
March 12 filed 149,925 shares of common stock (par $4)
to be offered for subscription by common stockholders
on
the basis of three new shares for each ten shares
•

Inc. and Burns Bros. &

American
Feb. 15- filed

.•

writers—Morgan Stanley & Co., Harris & Partners, Ltd.,

None.

mon

Price—$105 per share. Proceeds—For working capital.
Office—55 High Street, Pawtucket, R. I. Underwriter—

Electric Co// /

Valley Gas &

Blackstone

March

March 22 filed 425,000 shares of common stpek-(par 10/
" 7
' r
(letter of notification) T)0 shares of common , cents);/Price—Expected> ta b^ $:l::pcr^Yshare. / Fr»eee<is >
stock (par $50) being offered to minority common stock- ; —For working capital and other general corporate pur- /
holders on the basis of one share for each six shares,
poses.
Office—Jersey City, * N. ?Jf Underwriter—Charles Plohn & Co;, New York. V;. - ,.• /
held as of March 25; rights to expire April 12, 1957.
,
•

Turpentine

Rosin

Corp.^ Laurel,

JMarch 12 (letter of notification) 11,400 shares of capital
stock (par $5) -and $125,000 of 20-year 5% subordinate

.Volume

185

Number 5626

The Commercial and Financial Chronicle

(1617)

debentures dated March 31, 1957 loibeoffered in denominationsrpl^$lt)O^Jtd^present stockholders,^officers an^i.
empwees of■ the'cbrp©ratfori at rate of 3/10ths of a share
[of pew stock;for each-shtagre held and $300 debentures

1
t

...

.for each 100 shares

iand^

in Shamrock,

purposes

None.;

-v/.[•'

April 4
;

per share;,
Proceeds—For con¬

Fla.

Cougar Mine Development Corp.
(letter of notification) 560,000 shares of
stock

(par

cent).- Price

one

For dijamond

—

drilling

(Offeriag

share.

company's

lands,

Underwriter—Roth & Co., Maplewood, N. J.

tories.

Office

Berkshire

Gas

(Offering

"O"

• >

-...

■

v "

At market.

Loeb

(with

held

'The Ptrst Boston

Katz

as-jef

;March
stock

the basis of
of March

one

$52 per
.None.

■;

shares held

-stock.

class

who became policyholders in the Farm & Home
Co. prior to Feb. 25, 3952, for assignment of
insurance dividends only; while 40,000 shares are to be

;dn the Insurance company after Feb. 25, 195-2,'fend before
*
Dec. 31, 1953, for assignment of insurance
dividends

offering

price of

150,000 class C shares

are

35' cents

per

share;

Bosworth,

(McDonald

Iowa

Co.

the

and

First

(Paine,

Stevens

and

1,537,500 B shares

$3,000,000

Eoston

Webber,

(Bids

Public

EDT)

Corp

____Bonds "

$25,000,000

EDT)

v"-»«'■■■■■•-

■,«

(R.

(Thursday)

...

Bonds ;
about $8,000,000

Colorado

—Bonis

...

Bonds
$15,000,000

New

York

Common
by

(P.

Bond*

invited)

$70,000,000

(Bids 11

(Wednesday)
Bonis

a.m.

May

(Bids to

EDT)

$20,000,000

Equip. Trust Ctf s.
invited)

May 28
National Fuel

Gas

(Bids

Common
75,000

$2,475,000

Curtis)

175,000

Inc.)

100,000

(Tuesday)

11:30

Debenture*

S,'

Government

(Monday)

(Johnston, Lemon &

Co.)

(Bids to

about

Debenture* '
$500,000

(Tuesday)

Northern States Power Co.

common

$15,000,000

Employees Corp.___,_
June 4

EST)

a.m.

June 3
''

Co.

Inc.)

(Bids to be invited)

$600,000

190,000

Bonds

$10,000,000

(White,

Weld

Co,

•

and

Corp.)

Stone

Weld

Co.

and

Corp.)

Stone

1,000,000 shares

Bond* '

June 6

$25,000,000

(Thursday)

Georgia Power Co

Transcontinental Gas Pipe Line Corp

(Bids

Bonds

a.m.

Preferred

Webster

Securities

June

EDT)

$10,000,000

$15,500,000

(Monday)

(Monday)1

(Amos Treat &

Preferred

June 11

Co., Inc.) $800,000

Houston Oil Field Material Co., Inc
200,000

Consolidated

Common

McDonnell

April 23

supermarkets.
Midwestern

Underwriter

(C.

Co.)

30,000

Towbin

Inc.
Dec. 18 (letter of notification) $250,000 of 6% first mort¬

(Bids

noon

Southern Bell

'Bids

a.m.

United Artists Corp

negotiated)

225,976 shares

(Tuesday)

Gas

a.m.

Co._^

EDT)

CST)

EST)

[

Debenture*

$25,000,000

Telephone & Telegraph Co

July 39
•

Bids

Deb*.

$70,000,000

(Tuesday)

be invited)

Bonds
about $20,000,000

October 1

Debentures

(Tuesday)

Utah Power & Light Co—.

$30,000,000

Debentures

(Tuesday)

West Penn Power Co.—

Equip. Trust Ctfs.
$2,700,000

(Bids to be invited)

200,000

Northwestern Bell Telephone Co

bonds due 1962 to 1967, jinclusive. Price—100% of
principal amount. Proceeds—For machinery and workgage

June

Common

Oo.)

Minneapolis & St. Louis Ry

Ford Gum & Machine Co.,

11:30

(Tuesday)

Instruments, Inc
Unterberg,

Natural

(Bids

6hares

Swartwout Co.
•

Commoa

(Offering to stockholders—may

Herold Radio & Electronics Corp

Portland Gas & Coke Co

April 22

(Wednesday)

Securities

♦

(Bids to be invited)

Bonds

Webster

$50,000,000

Common

Boston Edison Co
,

Transcontinental Gas Pipe Line Corp
-

June

Common

Co.)

(Wis.)

invited)

Bonds

Peabody

'\'V;

(Thursday)

Reading Co.

300,000

Standard Pressed Steel Co
(Kidder,

$4,200,000

(Wednesday)

Brooks &

Morgan

about $200,000,000

Telephone Co
(Bids

International Business Machines Corp
.(Offering to stockholders—to be underwritten

Interstate Power Co

Peabody & Co.)

Co.,

$404,400

Class A
&

(Tuesday)

Invited)

Stanley & Co.)
•

EDT) $30,000,000

noon

Florida Power & Light Co
(Bids

(Monday)

May 21

..Common

Dickson

about $6,500,000

invited)

Co.

(Bids

Common

Equip. Trust Ctfs.

(Bids

Common

Bond*

invited)

$15,000,000

•

(F.

Continued

page

Eberstadt

Co.)

$1G,000,(K)0 of debentures and

'<
-

^_____Bon(as

Light

to be

Service

$300,000

425,000 shares

Corp.)

Jackson

(Wednesday)

a.m.

Gas

Common

Kidder,

April 17

Town, Inc., Washington, D. C.
Feb. 1 (letter of notification) 100,000 shares of 8% con¬
vertible preferred stock. Price—At par ($3 per share).
Office—20 "O" St., S. E., Washington, D. C.
—Rudd, Brod & Co., Washington, D. C.

noon

May 20

Flexible Tubing Corp

Food

new

(Tuesday)

May 16

Washington

(Shearson, Hammill & Co. and Underwood, Neuhaus & Co.)

equip two

Common

Virginia Electric & Power Co

Underwriter—N one.

To open and

Inc.

Price—$1,000 per certificate. Proceeds—To
acquire by purchase, lease or otherwise, and to hold,
own, subdivide, lease, mortgage, exchange, bargain, sell
and convey lands and every character of real property.

—

Bonds
$14,500,000

Common

May 15

$3,585,000

Markets, Inc

Trust.

Proceeds

Stortes.

Common

EST)

vvi '/'v/-./''; i/

(Monday)

-255,813

(Bids 11

.»

;

•

(White,

interest

.Common

Roxbury Carpet Co

(4/16)

beneficial

$14,000,000

EDT)

EDT) 426,988 A

(Tuesday)

noon

;
.

(Thursday)

El Paso Electric Co._

(Monday)

Co.)

Corp.,

Bonds

(Bids

(Offering to stockholders—underwritten by
Dean Witter <Sc Co.) 63,750 shares

Trust, Pottipano Beach, Fla.
certificates

Securities

Lincoln Telephone & Telegraph Co,.^__._Common

Cleveland, O.; and Kidder, Peabody & Co., New York.

850

Webster

New York State Electric & Gas

$6,854,254

Southern Utilities Co.
(The

filed

Common

May

Florida Steel Corp..

—r

Bonds

2,069,150

(Bids

•

Florida

& Co.) 220,000 shares

Debentures & Common

Ry.

Harbor, Monroe County, Fla. Underwriter
—Keystone Securities Co., Inc., Philadelphia, Pa.

March

Bonds

$30,000,000

(Offering to f-tockholclers—-to be underwritten by Merrill Lymih,
Pierce, Fenner & Beane and Kidder, Peabody & Co.);'
. ■

Cincinnati, New Orleans & Texas Pacific

stock (par 10
Proceeds—For construc¬

Corp., Tampa, Fla.

Florida Power Corp

Central & South American Acceptance Corp.
Common

Co.V

300,000 shares of common stock (par
$1), of which 30,000 shares will be offered to employees.
Price
To be supplied by amendment. Proceeds — To
selling stockholders. Underwriters — McDonald & Co.,

Co._„.__

$25,000,000

(Bids to be Invited)

ACF-Wrigley

■'

•/

dealer-manager) 119,522 shares

May 22

buildings and improvements; furniture and equipment;
working capital and other corporate purposes. Of¬

invited)

May 14

-.^.Common

...

Sullivan

April 16

and

Florida Steel

Chicago, Rock Island & Pacific Ry.
/
./*•'
Equip. Trust Ctfs.

Common

Western Nuclear Corp

(Tuesday)

a.m.

(Bids 3:45 p.m.

Ctfs.

shares-

(Lehman Brothers and Allen & C'o. in United States)
$15,000,000

fice—Tom's

March

$190,000

General Aniline & Film Corp

$6,000,000

invited)

(Bids 11

..Common

Quebec .Natural Gas Corp.^.^
Bonds
Ma.|Lebman Brotjaexs.^d.^lle^dc Co. in,)..$25.000,OOOi.
Quebec Natural Gas Corp.__Debentures & Common

50-unit hotel-motel and various other related

•»t<

•

k
*

—Debenture bonds

(Bids to be invited)

Debentures

CO.)

$10,000,000

Alabama Power Co.

Ctfs.

England Electric System...

March 11 filed 600,000 shares of common
tion of

Trust

underwriting)

invited)

May 9

offer to Lynn Gas & Electric
stockholders—Paine,
Webber, Jackson & .Curtis and F. S. Mofefeley & Co.
act,,as dealer-managers) 819,000 shares

share.

'/•'

(Exchange

The

Potomac Edison Co,

$25,000,000

Allen

190.000

800,000

(4/7)
$600,000 of first mortgage bonds due 1972
(with common stock purchase warrants attached) and
32,000 shares of common stock (par $1). Price—To be
supplied by amendment. Proceeds—Together with pro¬
ceeds from new bank loans, to repay present bank loans
and for expansion and working capital. Underwriter—
P. W. Brooks & Co., New York. .

per

126,000

.(Steven Randall & Co., Inc.)
New

Tubing Corp., Guilford, Conn.

Price—$5

$6,000,000

& Electric

may be

Corp

Co.)

April 15

; '

to be

Florida-Southern Land

125,000

invited)

(Offering to stockholders—Stone

$6,600,000

EST)

holders

(Thursday)

a.m.

(Bids

•
common

El Paso Electric Co.

Lake Lauzon Mines, Ltd

'March 26 filed

cents).

50,000

Inc.)

Brothers)

security

-0"5ff

Underwriter—None.

Flexible

(Bids

-Common

Co.__iiij..

Mason,

(Charles Plohn & Co.)

•

Cincinnati Gas

Baltimore & Ohio RR._-.-_...._EquIp. Trust Ctfi.

offered, at 50 cents per
share, to all holders of life insurance policies of the
Insurance company, regardless of date of policy.
Pro¬
ceeds—For additional working capital. Office—Phoenix,
Ariz.

invited j

stockholders—no

—underwritten

count company and the Insurance company, at an

only, at

Inc.)

Blosser & McDowell)

officers, directors and employees of the Dis¬
offer¬
ing price of 25 cents per share.
120,000 cl&Ss B shares
are to -be
offered to persons who became policyholders

(Offering

v ^

Bonds
to

May

Common /

►

•.

(Frazee, Olifiers & Co.)

$250,000

Wrigley Properties, Inc

Insurance

(3chwabacher

(non-voting)
to be offered to

persons

(Bids

and

United States Leasing Corp
:

common

Of the class A shares, 85,000 are

offered

Boston: Corp.

Ry..i....._Equip.

(Bids 11

(Offering

(Wednesday)

——Common

Co.

Horner

__Comm(oa

_Class A

Mid-State Commercial Corp

United Illuminating Co. of New Haven.__.Common

if Farm & Home Loan & Discount Co.

Laclede Gas Co._

$35,000,000

Electrj# Light & Power Co
(The
FirstBost^p Corp. and G. H. Walker
Mississippi Power Co

•

March 29 filed 125,000 shares of class A common (voting)
stock; 120,000 shares of class B common (voting) stock;

150,000

Bonds and Notes

...

April

(Wednesday)

for each

Corp. and Morgan Stanley & Co.) $125,000,000

Lehman

Light Co*'

(Goldman, Sachs & Co.; Halsey, Stuart & Co. Inc.; and

•

and

(Scott,

* W

Chicago, Milwaukee, St. Paul & Pacific RR.
'£
Equip. Trust

...Bonds

Co.)

Sears Roebuck Acceptance

St., Fall River, Massfc Underwriter—
' • '
''

•

Becker

(Straus,

21; rights to expire on April1 12. Price—
share. Proceeds — To prepay notes to banks.

Office—85 N. Main

$300,000

Iowa

new

May 1

—Common

Roberts Co.

(letter of notification) 291 shares of capital
being offered to minority stockholders

.'as

Co.)

First

Overnite Transportation
;

White,

(-Monday)

(Cruttenden, Podesta & Co.)

PST) $6,000,COO

Co,,-The

(Bids

(par $25)

-on

Co., Metairie, La. and Salt
V-

Fall River Electric

'G.

.'(A.

by
-

$3,900,000

Associated Truck Lines, Inc.
'

(Tuesday)

Freres

$225,000.'
,

,..Z

'Norfolk & Western

Inc.
'
(letter of notification) 150,000 shares of oepital
stock (par $1). Price — $2 per sharg.
Proceeds — For
.manufacture and sale of molded plastic items. Office—
100 West 10th St., Wilmington 99, Del.
Underwriter—
.Ackerson Hackett Investment

April 29
*

aharef

(Bids to

a.m.

Drug Co.—_

'•■"

226,820 shares

-Aluminum Co. of Canada, Ltd..lJ.../^Debentures
■(
•=•

...

'April

Esk Manufacturing,

/•Lake City,-,Utah.

Inc.)

Shumway. Uranium. Mining Corp..—

Feb.

Church

oversubscription privilege^;
.rights to expire on April 8, 1957. Price—$25 per shaae.
Proceeds—For general corporate purposes. Underwriter
—None.
X
\-;■
[;

t±-

Co.,

(Vt'inslow, Cohu & Stetson)

.basis of three new shares for each 10 shares

1957

Lazard

Sulphur & Potash Co.
Feb. 21 filed 300,000 shares of capital stock (no par)
being offered for subscription by stockholders of the
14,

Community

Duval

.March

Blauner

(Bids 9

(Kuhn,

stockholders—underwritten

High Authority of the European Coal and

Common

April 9

Proceeds—For investment.
*

20,000

Corp.>l___l__i/l2l^.Common *

Weld & Co.)

Common

underwriting)

■

^'*

National Lithium Corp
. ,
' .
( ,,.(Gearhart Ac Otis, Inc.)

Morgan
.

California Electric Power Co

—

Co:„j—_

•

^ Dodge & Cox Fund^.San Francisco, Calif.
(by amendment) 19,916 additional'bene-

Price

underwritten

535,148

Pepsi-Cola Mokan Bottlers, Inc

Steel

(par $1).

..—Common
be

Co.)

stockholders—no

(Milton

March- 28^filed

vficial shares in the Fund

Nyvatex Oil Corp

St., N. W., Washington, D. C.

Underwriter—None.

(Offering to
...

(Wednesday)

Cascade Natural Gas

"
.

par
(in units of $100 and
Proceeds—For expansion of inven¬

Ctfs.

--v

•'

April 24

•

Co.-..

Stanley

•

Price—At

—

$1,200,000

(Monday)

stockholders—to

;

it- District Wholesale Drug Corp. of Washington
(letter of notification) $50,000 of 8V2% regis¬
debentures.

invited)

March 22
tered

Babcock & Wilcox

prospecting expenses,, working capital and other corpor¬
ate purposes. Office—83 Campfield St., Irvington, N. J.

.multiples thereof).

7'' "■

-...:

trust

(Bids

•>

qom-

50 cents per

(Thursday)u

."April 8

Proceeds

ISSUE

•j •

Virginian -Ry/

*l..l

.March 15
;jTion

Underwriter—

; •'

'•

' 'f..

struction;

NEW

.<4.

-«'•

•

held.%^rice—Of stock, $15

of debentures at face amount.

v.**'

common

stock

350,000

Utah Power & Light Co
-

(Bids

invited)

Common
400,000

The Commercial and Financial Chronicle

305,204.52 shares of Mount Vernon com¬
the remainder, 210,000 Holly common
be offered to certain holders of 35,000

for each of the

Continued from page

Akron, N. Y.

self-service

Business—Manufacturing chewing gum. and
machines.
Underwriter—None.
(letter of

Dec. 3

Proceeds — For
working capital. Office — 1115 South Washington St.,
Marion, Ind. Underwriter—Sterling Securities Co., Los
Angeles, Calif.

($1 per share).

v
;
*
Investors, Inc., Elizabeth, N. J.
29 filed
(by amendment) 2,000,000 additional
of capital stock (par $2). Price—At market. Pro¬
.

stock.

ceeds—For investment.

Co.,

Withy &

*Furness,

March 26 filed

shares.

ordinary registered

(England)

Ltd.

60,000 American

if Gaudio Bros., Inc.
'
15 (letter of notification) $250,000 of 7% deben¬
tures due April 1, 1972.
Price—At face amount (in de¬
nominations of $100 and multiples thereof).
Proceeds—
„

improvements,

Office

capital.

—

cumulative convertible preferred stock, series

and

inventory

Houston

139-141 Kaighn Ave., Camden,

N. J.

by common stockholders of record
at the rate of one new share for each
tion

Film Corp., New York (5/13)
of common A stock (no par)

General Aniline &

B stock (par $1). Pro¬
ceeds—To the Attorney Geenral of the United States.
Underwriter—To oe determined by competitive bidding
Probable bidders: Blyth & Co., Inc.; Kuhn, Loeb & Co.,
Lehman Brothers and Glore, Forgan & Co. (jointly).
Bids—To be received up to 3:45 p.m. (EDT) on May 13
at Room 654, 101 Indiana Ave., N. W., Washington 25,
1,537,500 shares of common

D. C.

Inc., Washington, D. C.

General Credit,

Houston Oil

$1,400,000

March

through selected dealers.

purchase program for salaried

International Bank of

America, Inc,

(letter of notification) 240,000 shares of common
stock (par 30 cents) of which 86,610 shares are being
sold pursuant to outstanding warrants. Price—$1.25 per
share. Proceeds — For additional discount department

International Capital

operation; to increase the number of stores; and
capital. Office—41 Stukely St., Providence,
Underwriter—Bruns, Nordeman & Co., New York,

for working

R. I.
N. Y.

;

Gold Mountain Lodge, Inc., Durango,

Aug.
stock

Colo.

23 filed 5,000 shares of class A voting common
(par $1), 295,000 shares of class B non-voting
stock (par $1)„ and $700,000 of 4% debenture*

common

due Dec. 31,

1975, to be offered for sale in the State*
of 50 shares of class A

of Texas and Colorado in units

shares of class B stock and one $7,000
debenture. Price—$10,000 per unit. Proceeds—For purchase of property, remodeling of present main building,
for new construction and working capital.
Businea*—
stock,

2,950

Operates year-round resort hotel.
•

Herold Radio & Electronics

Underwriter—None.

Corp.

(4/22)

shares of 6% cumulative convertible
preferred stock (par $5) and 25,000 shares of common
stock (par 25 cents).
Of the latter issue, 12,500 shares
are to be sold to underwriter at par and the remaining

Feb. 27 filed 160,000

12,500 shares issued to Alton Blauner as a finder's fee
at par. Price—Of preferred, $5 per share. Proceeds—For

Office—Mount Vernon, N. Y. Under¬
& Co. Inc., New York.
Offering—
Expected first or second week of April.

working capital.
writer—Amos

Treat

High Authority of the European Coal and Steel
Community (4/90
March 18 filed $25,000,000 of secured bonds (seventh
series) due 1975 and $10,000,000 of serial secured notes
(eighth series) due 1960-1962. Price—To be supplied by
amendment.

Proceeds

—

To make loans to firms in the

Community for expansion of coal mines, coking plants,
plants and iron ore mines. Underwriters—Kuhn,

power

Loeb
&

Co., The First Boston Corp. and Lazard Freres
Co., all of New York.
Hilo

Electric

Light Co., Ltd., Hilo, Hawaii

stockholders of record March 5, 1957 at the
rate of two new shares for each seven shares held; rights
to expire on April 6, 1957. Any unsubscribed shares plus
the remaining 6,060 shares tp be offered to employees,
and the balance, if any, to the general public.
Price—
To stockholders, $24 per share; to employees, $28 per
share; and to general public, at prevailing market price.
Proceeds—To repay bank loans and for expansion and
construction program.
Underwriter—None.

Holly Corp., New York
shares of 50-cent convertible

ferred
•

ferred
*

(par $5) and 2,476,116 shares of
(par 60 cents), of which all of the pre¬
763,011.3 shares of common stock are to

stock

and

offered
one

100,000 shares of common stock (no par)
subscription by stockholders at. the

working capital.

So.

Market

St., Frederick,

shares of capital stock

(par 50 cents).

March 25
market.
ment

Payment Fund, Inc.
filed 10,000 shares of common stock.

Manager

Investors

—

Iowa

Electric

Diversified

Light & Power Co.

Services,
Inc.,
distributor.

(4/11)

the basis of one Holly series A
406,638 shares of Mount Vernon

common

its

■

Boston

stock

Corp., New York.

Loyal American Life Insurance Co., Inc.
'Sept. 28 filed 230,000 shares of common stock (par $1)
being offered for subscription by common stockholders
«

of record March

one new share for.
(with an oversubscription privilege); rights to expire on April 15. Price—$5 per shar£>
Proceeds—To increase capital and surplus. Underwriters
—J. H. Goddard & Co., Inc., Boston, Mass., and Thorn¬
ton, Mohr & Farish, Montgomery, Ala.

March

filed $250,000

supplied
loans.

Corp., New York.

(4/16-17)

amendment.-

Underwriter

—

The

Pa.

renewable subordinated

1, 1967, without de¬
May 1, 1972. Price—At par (in units of $100 and
Proceeds—For working capital. Office—17

mand

$500 each).

W. Lancaster Ave., Ardmore, Pa.
Securities Corp., Philadelphia,
New York; and Berry &

Underwriters—Walnut

Pa.; B. Ray Robbins Co.,

Co.,( Plainfield, N. J.

Mason Mortgage Fund,

Inc., Washington, D. C.;
certificates. Price—At

Feb. 8 filed $1,000,000 of 8% note

(in denominations of $250 each).

par

Underwriter

Proceeds—For in¬

None.

Offering to be made
through officers and employees of this company and
of its affiliate. Mason Mortgage & Investment Corp.
—

if Mayfair Markets
(letter of notification) 5,000 shares of cumulative preferred stock (par $50) and 5,000 shares of com¬
mon stock
(par $1), to be offered in units of one share

March 14
1

of
■

each.

capital.

Price—$60 per unit. * Proceeds—For working
Office—4383 Bandini Blvd.,1 Los Angeles, Calif.

Underwriter—None.

mon

stock

(par $5).

(par $15).

Proceeds—To
First, Boston

Price—$6.50

per

share.

com-

Proceeds—

For

7,
.

working capital. Office—1501 East Douglas, Wichita
Kan.
Underwriters — Small-Milburn Co., Inc.; MidSecurities

Continent

Co.,

Inc.;

First

Securities

Co.

Kansas, Inc.; Ranson & Co., Inc., and Brooks & Co., all
of Wichita, Kan.
'
*

(par

bank

of 6%

debentures, due upon demand May

(each

reduce

held

if Marion Finance Corp., Ardmore,
-

rants

Utilities Co.

18, 1957 at the rate of

each three shares

(par.$5).

finance 1957 construction program of company and
subsidiary, Lone Star Producing Co., and to provide
additional working capital.
Underwriter — The First

•

preferred stock and 2Vz shares of Holly

stock

Southern

Reeves

* Lone Star: Gas Co. (4/23-24)
.■>
April 3 filed $30,000,000 of sinking fund debentures due
1982.
Price—To be supplied by amendment. Proceeds—

Nov. 30

Iowa

com¬

(par $1). Price—$1.37\** per share*. Proceeds
working capital.
Office — 2475A So. Crenshaw

Corp., New York; and G. H. Walker & Co., St. Louis, Mo.

Price—To

stock

For

Price—To be supplied by amendment.
Proceeds — For
construction program. Underwriters—The First Boston

and

each of the

Inc., Torrance, Calif.
(letter of notification) 194.180 shares of

''if McCormick Armstrong Co., Inc..
March 21 (letter of notification) 31,940 shares of

Price—At

March 27 filed 75,000 shares of common stock

common

Proceeds—For investment.- Sponsor and Invest¬

Minneapolis, Minn., which will also act

(letter of notification) 60,000 shares of com-"
Price—At par ($1 per share). Proceeds—For

Blvd., Torrance. Calif. Underwriter—Daniel
Co., Beverly Hills, Calif.

Investors Variable

be offered in exchange for Mount Vernon Co. preferred
share for

—

shares held; rights to expire on May 1.
supplied by amendment. Proceeds—To re-

stock

mon

Of¬

Underwriter—

Underwriter—None.

March

Price—At market.

Proceeds—For investment.

(par $25)

Logren Aircraft Co.,

per

Stock Fund, Inc., Minneapolis,* Minn.
filed
(by amendment)
7,000,000 additional

stock.

Calif.

if Investors
March

vestment,

Md.

stock

for

mining operations. Office—2636 Leonis Blvd., Vernon 58,

Price

★ Investors Loan Corp., Frederick, Md.
March 27
(letter of notification) 4,688 shares of
cumulative preferred stock.
Price —- At par ($50
share). Proceeds—For general corporate purposes:
fice—12

three

March 21

Proceeds—For

share.
Underwriter—None.
per

each

mon

if Interstate Fire & Casualty Co. (III.)
20,000 shares of common stock to be of¬
fered for subscription by common stockholders of record
April 1, 1957, on the basis of two new shares for each
Price—$21

common

bank loans. Underwriter—Dean Witter & Co., San
Francisco, Calif., will underwrite 53,114 of the shares;;

March 29 filed

held.

68,750 shares of

;

(4/16)

■■if Little Sister Uranium Corp., Vernon, Calif.

shares held.

1
.j

duce

supplied by amendment. Proceeds—For work¬
ing capital, etc.
Underwriter—Franklin Securities Co.,
Dallas, Texas.

offered

Price—To

Corp., Des

seven

750,000 shares of

cents

,V.

for

Washington, D. C.

share for each

subscription by common stockholders
-of record April 10, 1957 on the basis of one new share

—To be

five

18 filed

March 28 filed
to

for

new

'J-.-

■if Lincoln Telephone & Telegraph Co.

2,500,000 additional
Price — At market.

March 19 filed 220,000 shares of common stock
pre¬

stock, series A

common

publicly and

if International Fidelity Insurance Co., Dallas, Tex.

rate of

—

Productions, Inc.
Jan. 14 (letter of notification) 30,000 shares of common
stock (par $4). Price—$2 per share. Proceeds—For special building, equipment and for working capital. Office
-—Columbia, S. C.»
Underwriter—Aiester G. Furman
Co., Inc., Greenville, S. C.
1

ment.

For

Underwriter—A. G. Becker & Co. Inc.,

Ltd., Toronto, Can. (4/15-19)
common stock (par $1).
per share.
Proceeds—For drilling expenses, equipment, working capital and other corporate
purposes. Underwriter—Steven Randall & Co., Inc., New

500,000 shares of

March 28 filed

de-",J

(in

Lake Lauzon Mines

Price—40

Duplex Corp., San Francisco, Calif.
common stock (par one
cent).
Price—$1 per share.
Proceeds—To equip and
establish five super launderettes and for working cap¬
ital.
Underwriters—Names to he supplied by amend¬
filed

face amount

To be supplied by amendment. Proceeds

—

March

International
21

—

Chicago, 111.
/•

Moines, Iowa
Nov. 29 filed 370,000 shares of common stock (par 10
cents), of which 185,000 shares are to be offeiod by The
Equity Corp, on a share-for-share basis in exchange for
Equity Corp. common stock, and the remaining 185,000
shares by Financial General Corp. on a basis of 1%
shares of * International ^common stock in exchange for
one share of Financial common stock.
Equity and Finan¬
cial are to receive the 185,000 shares each'of Interna¬
tional common stock in exchange for all the outstand¬
ing shares of common stock of Investors Financial Corp.
and Group Equities, Inc. International has been informed
that 142,000 shares of Equity common owned by.Fre¬
mont Corp. will be tendered in acceptance of the Equity
exchange offer. Underwriter—None.
Dec.

•/:/%-,/-/" \

working capital.

...

common

Jan. 25 filed 406,638

Price

Katz

Price

None.

Feb. 7 filed 51,380 shares of common stock (par $20), of
which 45,320 shares are being offered for subscription

stock

1972.

15-year

Sept. 28 filed $1,000,000 of time certificates, series B, C
and D. Price—At 100% of principal amount. Proceeds—
For working capital.
Underwriter—Johnston, Lemon &
Co., Washington, D. C.
/

employees in the

Jan. 21

store

amendment)
(par $1).

(by

due

of 6%

Proceeds—For investment.

United States.

Gob Shops of

filed

common

Drug Co., Kansas City, Mo. (4/10)
-March 19 filed 50,000 shares of common stock (par $1).

short-term bank loans, for capital require¬
working capital.
Office — Houston, Tex.

Leslie

of common stock (par $1),

ir Incorporated Investors, Boston, Mass.

Co.

Wash.,
•

Underwriters—Shearson, Hammill & Co., New York; and
Underwood, Neuhaus & Co., Houston, Texas.

if General Motors Corp.
>
'
April 2 filed 1,500,000 shares of common stock to be
offered for subscription under the company's savings
stock

and

ments

Price—$500 per unit. Proceeds—For expan¬
captal. Underwriter —None named.

Offering to be made

(4/22-26)

200,000 shares are to be offered

$1,000 each). Proceeds —For additions
and improvements.
Office—139 W. .Second Street, Ju~
neau, Alaska.
Underwriter—Grande & Co., Inc., Seattle,

"York.

105,000 shares pursuant to company's restricted stock
option plan for certain offices and key employees. Price.
•—To be supplied by amendment. Proceeds — To retire

working

and

shares held

Field Material Co., Inc.

March 15 filed 305,000 shares
of which

of 6% subordinated sinking fund
debentures, due Sept. 1, 1971, with detachable warrant*
to purchase 160,000 shares of participating preference
stock, to be offered in units of $500 of debentures and 40
sion

March 25, 1957

Underwriter—None.

program.

Aug. 17 filed $2,000,000

warrants.

Price—

(with an oversubscription privilege); rights to expire on
April 15. The remaining 53,500 shares are being offered
for subscription by employees.
Price — $43 per share.
Proceeds—To reduce bank loans and for construction

Jan. 14 filed 426,988 shares

into

capital

4 filed

nominations

665,760 shares of common stock (no par),
which 612,260 shares are being offered for subscrip¬

(F. I_)

debentures

Power Co.

Lighting &

working

Juneau & Douglas Telephone Co.
Jan. 24 (letter of notification) $295,000

fHed

Feb.

working

used

Otis, Inc., both of New York. Statement withdrawn.

Trenton, N. J. Underwriter—None.

—Lower Ferry Road,

derwriters—McLaughlin, Cryan & Co. and Gearhart <fc

($10 per share) and accrued dividends. Proceeds
—For working capital. Business—Prefabrication. Office,

Underwriter—None.

and

20,000

will

and

debenture stock.

Proceeds—To be converted

$3,000,000 of 6% convertible debentures du«
1, 1966. Price—100% of principal amount. Proceeds
—To pay short-term loans and for working capital. Un-

■

notification)

(letter

pounds

Jacobs

uct.

At par

March

leasehold

April

Depositary—Guaranty Trust

Co.

Homasote

★

depositary receipts for

Co. of New York.

For

of par.

Nov.

Underwriter—Benjamin

working capital, etc.
Co., Houston, Tex.

•

(letter of notification) 100,000 shares of common
Price—At par ($3 per share). Proceeds—For in¬

ventory,

110%

Securities Corp., New York.

Houston, Texas

Import Corp.,

Holy Land

Bank,

the medium and long-term credits to enterprises
-in Israel.
Office—Tel Aviv, Israel. Underwriter—Israel

reserved

Development

extend

Underwriter—None.

stock.

Iron Works common

March
shares

will

1,016,595

American-Industrial

—

Israel

basis; 38,333 Holly common
certain finders, 60,000 'shares to certain ven¬

of, property;

Feb. 27

Thursday, April 4, 1957

Feb. 13 filed $2,500,000 of perpetual 6%
Price

stock on a
shares will be

against conversion of preferred stock; and the remain¬
ing 388,176 are to be reserved for possible issuance at a
future date in exchange for 64,696 shares of Van Dorn

ir Fundamental

Ltd.

Iron Works Co. common

six-for-one

dors

notification) 300,000 shares of common

Price—At par

stock.

are

shares of Van Dorn

offered to

Inc.

Juices,

Fruit

Israel

stock.

mon

Office—Hoag and Newton Sts.,

Ing capital.

(1618)

McRae

Tungsten Corp., Boise, Idaho

(letter of notification) 100,000 shares of

purchase

one

cent)

two

and

warrants

common

100,000 stock purchase
to

entitle

holder

war¬

thereof

share of Idaho Rare Minerals Corp. 6%
cumulative-convertible
sinking-fund preferred stock,
par $10, and,one share pi Idaho Rare common stock, par
one cent at Sll per unit). Price—$3 per
unit, consisting
one

yplume 185

one

Number 5626

McRae share-and

The Commercial and financial Chronicle

-v.

one

warrant* Proceeds

New Brunswick
(Province of).
Dec. 14 filed $12,000)000 of 25ryeai*
sinking

For

—

"mining expenses. Office-^/© • Robert J. ^MoRe^,. 1704
Gourley St., Boise, Ida.' Under wTiter^y cm- Gemini ngen
& Co., Inc., 320 North Fourth St.; St.;Louis, Mo,
,
,

wick

Underwriter—

by competitive- bidding. Probable bidders:
.Halsey; Stuart & Co. • Inc.;. The First Boston Corp,;
; Blyth
Co., Inc. v Bids—^-Three bids were received on
Aug.' ly ali for; 4^4 s. but were turned down.- ReOfferlng is
expected sometime during -the first- six months of 1957.
.determined

•.

•

bin/

8?CP.,;New: York.<.

//••/V-7 ■>

Minneapolis Area Development Corp,

?
v
•

•

:
'

•

par $1) to be offered in .units of, $40 of deben- 7
iures.'and ^he share of- stock.- Pricef^$50 pier
?•
ceeds-^For acquisition of lands and for development of r
the lands"as 'sites for industrial purposes; for payment ;

of bank loans; and for working. capital and other cor•f porate'purpose, Office—Minneapolis, Minn. Underwriter
r—Noiie. PhilipB. Harris (Vice-President- of Northwest-.

President.77v^,^--

\
March" 15 filed: $6.;e00?000"/of. xirst inortgage bonds due
17Aprilrl, 1987. Proceeds-^For construction program. Un¬

derwriter—To
,

determined by

Probable' bidders:;; Halsey, Btuart, &t Go.

•

Nyvatex Oii Corp.. (4/8-12)

•

Price—$1 per share. Proceeds—For
payment-of note; ai>d drilling and development of properties. Gffice -r- Esperson Bldg., Houston, ,Tex. Under¬
writer—Milton D. Blauner & Co., Inc., New York, N. Y.,

Quebec Natural Gas Corp. (4/15-19)
•
t
15 filed $15,000,000 of subordinated debentures
due 1985 and 750,000 shares of common stock (par
$1)
to be offered in units of $500 of debentures and 25 shares
of stock. Price—'To be supplied by amendment. Proceeds
—To acquire properties from
Quebec Hydro-Electric
& Co., in the United States; and Nesbitt Thomson & Co.,
Ltd.; Wood, Gundy & Co., Ltd. and Osier, Hammond,1 &
Nanton, Ltd/in Canada
/
/
'

Jan.

Tex.

Offering—Postponed indefinitely.

Raytone Screen Corp.
,['*
Feb. 15 (letter of notification) 50,000 shares of
coinniop
stock (par 10 cents). Price—$3.25 per share. Proceeds
—To reduce debt, for purchase of inventory and ter
working capital. Office—165 Clermont Ave., Brooklyn,

(pair $106) > Proceeds—For construction program. Underwriter^To be determined by competitive hidding. Probable biddet^; The First Boston Corp.; Blyth & Co., Inc.;
.

Underwriter—J. P. Emanuel & Co., Inc., Jersey

City, N. J.

Inc. and Stoned Webster Securities Corp. (jointly>; Lehman Brothers. Bid«^The*tWd' received up to111
a.m. (EST) on Oct. 30 were rejected.
7 0»*efiel4

—

Raymond Oil Co., Inc., Wichita, Kansas
29 filed 200,000 shares of common stock (par: 25
cents). Price—To be supplied by amendment. Proceeds
—For exploration, development and operation of oil
anp
/*
gas properties. Underwriter—Perkins & Co., Inc., Dallas,

★ Realty Investors Corp., Albuquerque, N. M.
March 22 (letter of notification) 2,940 shares of 5% noncumulative participating preferred stock. Price—At par

•

"Business—Teter

•/Commission. Underwriters—Lehman Brothers and Allen

& Co.,

capital.

March

Inc.; Merrill

working

Underwriter—E. L. Aaron &. Co^ New

Montreal, Canada, from Quebec Hydro-Electric Com¬
Underwriters
Lehman Brothers and Allen $
Co. in the United States; and Nesbitt Thomson & Co.,
/Ltd.; Wood, Gundy & Co., Ltd. and Osier, Hammond $
Nanton, Ltd. in Canada.
' /

■{ Lynch, Pierce, Fenner &"Beahe; Kfdler/Peabody & Co.;
: Blair
& Co. Incorporated; Eastman Dillon, Union, Secu¬

for

and

mission.

7 Kuhn Loeb & Co:; Eastinajtt Dillon, Union Securities & Co.
and Salomon Bros. & Hutzler (jointly); Harriman Ripley

competitive bidding.

share.

To acquire gas distribution and other related facilities in

Sept. 20- filed 60,000 shares of cumulative preferred stock

YYiYi' Y Y'

/ijqwep.v'<b^

per

Quebec Natural Gas Corp. (4/15-19)
March 15 filed $25,000,000 of first mortgage bonds due
1980. Price—To be supplied by amendment. Proceeds—

■;

Ohio Power Co.

Price—$5

York/

stock (par one cent ).

-7

Inc.;

vision Releases.

^ Northwestern Bell Telephone Co. (4/23)
March 29 filed $30,000,000 of 32-year debentures due
May 1, -1989.- Proceeds—To repay advances from American Telephone &. Telegraph Co., the.parent.
Underwriter
_To be determined by competitive bidding. Probable
bidders: Halsey, Stuart ■& Co. Inc.; Morgan Stanley &
Co.; The First Boston Corp.; Eastman Dillon, Union Securities & Co. Bids—Expected to be received up to 11
a.m. (EST) on April 23.
^
•

20,000 shares issued fo underwriter.

tions,

Feb/26' (letter of-notification) 225.000 shares of common

-•

stock

National Bank of Minneapolis! lis

both

of which 200,000 shares are to be offered to public and

Proceeds—To retire $125,000 of outstanding .15% deben¬
tures as well as. a $173480 debt to Trans-Union produc¬

Webber,

writer—None.

. >

sinking fund incpme debentqresdue March 1,-1972,.and 35,000 shares of?common

:,ern

ing preferred- stbck and 7,500 shares of common stock.
share). Proceeds — To (liquidate
a
bank loan of $178,635; increase inventories; and for
working capital and general corporate purposes. Under¬

.Feb; 19 filed $l,000,000 of. 4,%
.

NEES

Price—At par ($10 per

cor-

Unterberg, Towt
/ V-/*-4
7 '• • Y

of two

' j*'JYYY;7v

expenditures^, working: capital and general

the basis

Nic-L^Silver Battery Co., Santa Ana, Calif.
Dec. 27 filed 75,000 shares of 5% cumulative participat-

poratef purposes., rUnderwriter—G.>•;£•

Inc., Kingston, N. H/
(letter of notification) 8,000 shares of common
stock (no par).
Price—$27 per share.
Proceeds—For
working capital. Underwriter—^None.
;
/

•

Ar Midwestern Instruments, lnc.,Tu!sa, Okla,<4/23),{

capital

Pyramid Productions, Inc., New York
t. 27 filed 220,000 shares of common gtock (par $1),
•

it Nichols,

• Price (T. Rowe) Growth Stock Fundr Inc.
April 1 filed (by amendment) 75,000 additional shares of
.capital stock (par $1). ^ Price—At market.
Proceedsr*
For investment.

March 21

ir Mid-State CommercialCorp.
4
March 29 (letter of notification.) $1907)00 of 7% regis-,
'* tered debenture bonds due May 1,. 1967." Price—At? 100%
; and accrued interest.
Proceeds—For expansion of serv¬
ice area and working capital'.
Office—2 King St.yMid7dletoWn, N. Y
Underwriter — Frazee, Olifiers & Co.,

; March. 29 filed 200,000 shares of common .stock (par $1).
Price - To- be supplied by amendment. Proceeds — For

Co..

Boston/Mass.

York.Y'/*-'YY'-YYYY'Y'Y'77'*

Electric

•Jackson

public, $1.50 per share. Proceeds—For re¬
tirement of outstandihg bonds and Working' capital. Office^l26 N. Fifth St., (Box 988), Grand; Junction, Colo.
; Underwriter—None; Y' ///Y 7'7"7'; ■"/?>' 7"-/

New

of class A

for each Lynn share.- Dealer-Managers—Paine,
& Curtis and F. S. Moseley & Co.,

(letter of: notification) 170,154- shares of, com¬
.{par $1A of which 151,487 shares to be offered
to stockholders through rights and 18,667 shares to be
offered to public.
Price — To stockholders, $1.25 per
stock

share and to

Co.; Equitable Securities Corp.; Kuhn, Loeb & Co. ana
Blyth & Co., Inc. (jointly); Lehman Brothers; Kidder;
Peabody & Co.; W. C. Langley & Co. and The First Bos¬
ton Corp. (jointly).' Bids—Expected to be received oh
May 7.
7 "

3 .filed

collateral

Proceeds —To repay bank loans

construction

able bidders: Halsey, Stuart & Co. Inc.; White, Weld &

(4/15) •
819,000 shares of common stock (par $1)
to, be offered in exchange for capital stock of Lynn
Gas

7" -7 •;'/:•/; *7"i'.]%■}:Ylv^

for

program.
Underwriter—For any
bonds to be determined by competitive bidding. Prob4

Commission to repay bank loans.

Power

New England Electric System

Dec.

March 13

and

ginning March 20, 1957; rights to expire on April 11,
1957.' Price—At par • ($25" per share). Proceeds—To re; duce a certain note; indebtedness incurred by the com¬
pany in connection writh the recent purchase of The
i
Ridgefield Water Supply Co. Underwriter — Gliddeii,
/Morris & Co., New York. 7
/7

bonds^due 1976. Proceeds—^To pay. off short term bank
lloansand for construction program. Under writer—To be

mon

trust bonds due 1987.

The New Bruns¬

stock being offered for subscription by. stockholders be¬

advanced

New Canaan. Co., New Canaan, Conn.
Dec. 14 (letter of notification)' 2,000 shares

Michigan Wisconsin P(pe Line Co.
7 V 7
july/2, 1956 filed $25,000,800 of fifft ^mortgage pipe line

Midland Telephone Co. •,

Electric

Underwriter—Halsey, Stuart & Co. Inc., New York and
Chicago., Offering—Indefinitely postponed.

Guardian Securities Corp., San Francisco, Calif.

Proceed©—To

.ment.

7 Mercantile Acceptance Corp. of Calif.
•;*7 : -4 :
Feb.. 21 (letter -of notification)7$ll,40pl of 12-year 511%
subordinate capital debentures. Price—100$ of principal
amoiint.
Proceeds — For working capital.
Office — 333

San r Francisco,= Calif.

• Potomac Edison Co. (5/7)
April 1 filed $14,000,000 of first mortgage and

fund deben-

i.^ures due Jan; 1,1982, - Price—To be supphed by amend-

Montgomery Si,

(1619)

Wifiing Corp., Montreal, Canada

($100

share). Proceeds — For investments in first
and working capital. Office — 518 Simms
Bldg., Albuquerque, N. M. Underwriter—None. /

Oct; 15 filed 900,000 Shares of capital stock (par $1), of
which 200,000 shares -are now outstanding. Price—To be
office of Southern Services^ Inc., Rooai 1600, 250 Park
7 supplied by; amendment. Proceeds
For exploration
Avenue,• New York.■ 17, N. Y.
;..: t,/-7
'' s■' 7 •• * costs. Underwriter—To be named later. Michael Tzo-

per

mortgages

Mississippi Valley Portland Cement Co, ;,
Dec.26 filed 1,600,000 shares of capital stock (no par), of
which 708,511 shares are subject to an offer of rescission.
Price—$3 per share. Proceeds—For completion of plant,
provide for general creditors and for working capital.
Office—Jackson, Miss. ' Underwriter—None, offering to
be made through company's own agents. 7
:;r7 ;',7*;,7..

Monticello Associates, Inc.
777
Feb. 18 (letter of notification). 300,000 shares oi common;
stock.
Price—At par ($1 per share),. Proceeds, —- For
capital expenditures, including construction of motel,
roadside restaurant and gas station. Business—Has bepn
processing and selling of gravel. Office—203 Broadway,
^ Monticello, N. Y.. Underwriter—Walnut.Securities Corp.,
Philadelphia, Pa.
7 ,J'77
77'7'S '' "7".' ./

v
,

•

Investment Fund, Inc. (N. Y.)
28 filed
(by amendment)., 300,000

additional
capital stock (par $1). Price—At market. Proce©ds-^-For .investment/ '7''7
■:7*
'.. 77,
•,,7. .. Mutual Investment Trust for Profit Sharing•'*
Retirement Plans, Inc., Richmond, Va.
shares of

March. 19 filed 50,000 shares of capital stock (par $ 1),
to be offered trustees of profit sharing retirement, plans.
price—At market. Proceeds—For investment. President
—T. Coleman Andrews. Office — 5001 West Broad St.,

7 ,;.'7..7 '7_. 777
'7
77'777
^National Investors Corp., New York,
March
29
filed
(t?y amendment)
100,000 additional
shares of capital stock (par $1).
Price — At market.
Richmond, Va.

Proceeds—For investment.

(4/24)
Feb. 19 filed 3,120,000 shares of common stock (par one
cent). Price—$1.25 per share. Proceeds—For acquisi¬
tion of properties; for ore testing program; for assess¬
ment work on the Yellowknife properties; and for cost
of a concentration plant, mining equipment, etc. Under.
writer^—Gearhart & Otis, Inc., New York.
•

National

Lithium Corp.r New

Yprk

^ National Weekly, Inc.
*

March 29 (letter of notification) $232,000 of
tures due -April 1, 1967, and 58,000 shares

5% deben¬
of class B.

stock (par $1) to be offered in units of $80.
principal amount of debentures ard 20 shares of stock.
yrice—$100 per unit/ ,I?Toct*dar~iTo^^..repsQ?-advances- in
connection-with purchase of radiostation and forgeperal
corporate purposes. Office—211. Ea st 37th St.,New.York,
N. Y.
Underwriter—None.
</;* f*; v
s *

writer—None.

(par 50

cents), of which 25,000 shares are to be offered
officers and employees for a seven-day period.

first to
Price—

...

★

Blvd., Pittsburgh, Pa. Underwriter—,

Reilly, Hoffman & Sweeney, Inc., New York.

it Phillips Petroleum Co., Bartlesville, Okla.
April 1 filed $51,000,000 of participation in Thrift Plan
for principal executive officers of company and its sub¬
sidiaries, together with 1,139,665 shares of common stock
which may be purchased under

the plan.

Pittsburgh Rys. Co.* Pittsburgh, Pa.
7'
Feb. 13 filed 547,678 shares of common stock (no par),
of which 540,651.75 shares are to be offered for subscrip¬
tion by Standard Gas & Electric Co. common stockhold¬
ers

the. basis of

four Standard

one

Pittsburgh

Gas shares held

Rys. share for each
of April 2, 1957. The

subscription period will expire on April 24. Price—$6
per share.
Proceeds—To Standard Gas & Electric Co.
Underwriter — None. Standard Shares, Inc., owner of
45,59% of Standard Gas common stock, will purchase
all shares of Pittsburgh Rys. to which it is entitled to
subscribe, plus any unsubscribed share and the remain¬
ing 7,026.25 shares not offered directly to Standard Gas
stockholders/Statement effective March 27.

Plymouth Fund, Inc., Miami, Fla.
Feb. 5. filed 500,000 shares of capital stock (par $1)..
.Price-^-AL market/ Proceeds—For investment. Under¬
—r -Plymouth
Bond & Share Corp., Miami, Fla..
Joseph A. Ray vis, also of Miami, is President

writer.

Reynolds Metals Co.
$1)

per share. Proceeds—For expansion program.
Underwriters—Dillon/Read & Co. Inc. and Reynolds &
Co., Inc., both of New York for 450,866 shares. 4 i

★ Rittenhouse Fund, Philadelphia, Pa.
"

March 29 filed

(by amendment) 50,000 additional par¬
ticipating units in the Fund.
Price—At market.
Pro¬
ceeds—For investment.

Roberts Co.,
com¬

stock (par 10 cents). Price—$1 per share. Proceeds
—For machinery, equipment and working capital. Office

Brookline

Pres^

Price—$42

mon

-r—1250

Under*

D. John Heyman of New York is

being offered for subscription by common stockholders
of record April 2, 1957 on the basis of one new share for
each 11 shares held; rights to expire on April 16, 1957*

Inc.,

Salt Lake City, Utah
shares of common stock (par $1).
Price---$1.25 per share. Proceeds—rFor drilling test wells
and general corporate purposes.
Business—To develop
oil and gas properties. Underwriter—Market Securities,
Inc., Salt Lake City, Utah.
300,000 shares of

stock (par $1).

March 12 filed 914,978 shares of common stock (par

To public $13.30 per share; and to employees, $12.25 per
share7 Proceeds—To selling stockholders. Office—Rich¬

Paul Hesse 3-D Arts, Inc.
March 28 (letter of notification)

common

Proceeds—For investment.

dent.

Feb. 4 filed 1,000,000

fijed 100,000 shares of

Price—At market.

(4/10)

March 19 filed 126,000 shares of common stock

qommon

March 29

Paradox Production Corp.,

/At Mutual
March

Overnite Transportation Co.

mond, Va. Underwriter—Scott, Horner & Mason,
Lynchburg, Va. ..7.7..

★ Resource Fund, Inc., New York

panakis, of. Miami, Fla., and Denis Colivas, of Montreal,
Canada, are large stockholders.

Sanford, N. C. (4/10-11) '
shares of common stock (par $1), of

Feb. 28 filed 190,000

which 150,000 shares are to be sold for account of com¬

and 40,000 shares for selling stockholders. Prices—
by amendment. Proceeds — To reduce
outstanding obligations and for working capital. Under¬

pany

To be supplied

writer—Straus, Blosser & McDowell, Chicago, 111.

Rogosin Industries, Ltd., New York
1 filed 75,000 shares of common stock. Price—
At par ($100 per share).
Proceeds—For site improve¬
ments and buildings in Israel; for process equipment
and machinery; for utilities; working capital; and other
corporate purposes. Underwriter—None,
March

Roxbury Carpet Co.

(4/16-17)

March 27 filed 198,274 shares of common stock (par $1),
of which 175,000 shares are to be offered publicly (50,000 shares on behalf of company and 125,000 for selling
stockholders) and 23,274 shares are to be offered in ex¬

change for the minority holdings of common stock in
Roxbury Southern Mills, Inc., a subsidiary. Price—To
supplied by amendment. Proceeds—For moderniza¬

tion program.

Underwriter—Paine, Webber, Jackson &

Curtis, Boston and New York.

ir St. Louis Insurance Corp., St. Louis, Mo.
March 27 filed 1,250 shares of class C cumulative pre¬
ferred stock (par $57).
Price—$97 per share. Proceeds
—To-R/M. Realty Co., who is the selling stockholder*
Underwriter—Yates, Heitner & Woods, St. Lonis^ Ma. /

Continue4

on page

Chronicle

The Commercial and Financial
48

Thursday, April 4, 1937

(1620)
S

Continued

The offer will be

each share of Lumbercompany

Sears

March

stock.

95% of the lattei
(and may be declared
if not less than 80%

$25,000,000 of

filed

May 1, 1977. Price—To be supplied by amendment.
Proceeds—To purchase customer receivables from Sears,

Underwriters—Goldman, Sachs & Co., Halsey,
& Co. Inc. and Lehman Brothers, all of New York

City.

•^•Security Savings Life Insurance Co.
March 21 (letter of notification) 60,000 shares of non¬
assessable common stock (par $1) to be offered to stock¬
holders on the basis of one new share for each share
held (with an oversubscription privilege). Price—$5 per
.share.
Proceeds—To capital and paid-in surplus. Office
—Old South Life Bldg. (P. O. Box 376), Montgomery,

derwriter—None.

Co., Dallas, Tex.; and Minor, Mee
■;
■
/•
; ■ /■;//

west

^ Shumway Uranium Mining Co.

Office—65 E. 4th South St., Salt
Underwriter—Winslow, Cohu & Stet¬
New York, N. Y. Offering—Expected to be done

eral corporate purposes.

son,

privately.
«

Southeastern

March

Public

Service Co.

Underwriter — Bioren & Co., New
Philadelphia, Pa. Offering—Expected today

poses.

(par 10

Co. of Lincoln (Neb.), and
Kansas.

'■

the

Beecroft, Cole & Co., Topeka.
v. •/
;;
* V
•'
■7'1;:/.
.

March

54,530 outstanding, shares of 5% cumulative conpreferred stock (par $10) at the rate of one
each

for

•:

7
...

and

^ Standard Oil Co. of California
April 1 filed $60,000,000 of Interests in the Stock Plan
for Employees of this company and certain subsidiaries,
together with 1,286,863 shares of capital stock which may

10,000 shares of 7%
stock. Price—At par

be issued pursuant to the

Inc., Phoenix, Ariz.
of common stock (par $10) to be
first offered for subscription by common and preferred
stockholders. Price—$15 per share. Proceeds—To retire
issued and outstanding preferred stock.
Underwriter—

Standard

Pressed

plan.

Steel Co.

None.

(4/17)

March 21 filed 200,000 shares of common stock

(par $1),
190,000 shares are to be publicly offered and
10,000 shares offered to employees of company. Price—
To be supplied by amendment. Proceeds—For working
capital and plant expansion. Office — Jenkintown, Pa.
of which

it Union Carbide & Carbon Corp.

•

Stevens

Markets,

Inc.,

Miami, Fla.

Savings Plan for Employees of this company and
United States subsidiaries, together with 50,000 shares
of common stock which may be issued pursuant to the
plan.
-

(4/16-17)

100,000 shares of class A common stock
<par $1). Price—To be supplied by amendment. Proceeds

—To equip a third super market and for working capital

and other corporate purposes.

Underwriter—R. S. Dick-

it Stinnes

(Hugo)

the

Proceeds
States.

■

presently
—

outstanding

the

Attorney

Underwriter—To be

bidding.

common

988,890

General

stock

(par $5),

common

determined by

the

shares.
United

competitive

Stuart Hall

Co., Inc.
notification) 40,000 shares of common
r stock (par $1). Price—$6.75 per share. Proceeds—For
working capital." Office—121 W. 20th St., Kansas City,
March 5 (letter of

Mo.
.

Underwriter—White &

Co., St. Louis, Mo.

★ Supercrete, Ltd., St. Boniface, Manitoba, Canada
April 1 filed $1,000,000 of convertible subordinated de¬
bentures. Price—To be supplied by amendment. Proceeds
—To repay $550,000 bank loans, and for increased facili-

r.ties and working capital.
c
& McDowell, Chicago, III.

amendment.

Proceeds

—

Underwriter—Straus, Blosser

retire

$925,000

note and

$2,500,000 of bank loans and for working capital. Under¬
&

Co., New York.

^-United Artists Corp.,

Corp., New York

March 29 filed 530,712 shares of

/of

it United Artists Corp., New York (4/23-30)
March 29 filed $10,000,000 of 6% convertible subordi¬
nated debentures due 1960. Price — To be supplied by

writer—F. Eberstadt

& Co., Inc., Charlotte, N. C.

.son

Corp. of America
filed

cents)

178,646

being

shares held

;

for

offered

stock

common

subscription

one

new

(par

common

share for each five

April 2; rights to expire on April 16.
Proceeds—To be used initially to
borrowings. Underwriter—Blyth & Co., Inc

Price—$16 per share.
reduce bank

New York.
•

West Penn

Feb.

filed

Power Co.

common stock (no par)
being offered for subscription
by minority common stockholders (other than the parent,
West Penn Electric Co.) of record March 21, 1957 on the

251,606

shares of

of which 12,579 shares are

basis of

share for each

14 shares held; rights to
Price—$49.50 per share. Pro¬
ceeds—About $12,000,000 — to be used for construction

expire

one

new

April 16, 1957.

Underwriter—None.

program.

West Penn Electric Co.,

the

parent, owner of 3,346,367 shares, or approximately
95%, of the outstanding West Penn Power Co. common
stock, has agreed to purchase all of the shares not sub¬
scribed for by public

(

stockholders.

it Western Nuclear Corp., Rawlins, Wyo.
March

filed

$400,000

of 5%%

(4/15-19)
subordinated deben¬

tures, series B, and 440,000 shares of common stock (par

cent) to be offered in units of $1,000 of debentures

one

1,100 shares of stock. Price—$1,011 per unit. Pro¬
expenditures and operating purposes.
Underwriter—Bosworth, Sullivan & Co., Denver, Colo.

ceeds—For capital

Western

Uranium

March 16 (letter of
stock

Corp.

notification) 1,000,000 shares of

(par five

cents)

offered

com¬

follows:

200,000 shares to present stockholders on a basis of one
new
share for each share held and 800,000 shares to
the

public. Price — To stockholders, seven cents per
share; to public, 10 cents per share. Proceeds—For min¬
ing expenses.
Office—139 N. Virginia St., Reno, Nev„
Underwriter—None.

March 25 filed
~

participations in

the

Underwriter—Kidder, Peabody & Co., New York.

filed

stockholders at the rate of

mon

/•..

March 28 filed $25,000,000 of interest in

•

For investment. Under¬

and

Turf Paradise,

Jan. 11 filed 50,000 shares

Vitro

—

Sulphur Corp. of America (N. Y.)
r
/150,000 shares of common stock (par 50
cents). Price—At market,.but not less than $3 per share.
Proceeds—For mining operations. Underwriter—None. *
•

Office — 4932 St.
Underwriter—Whitney &

Bethesda 14, Md.
Co., Inc., Washington, D. C.

Venezuela Diamond Mines, Inc., Miami, Fla.
Aug. 31 filed 1,500,000 shares of common stock. Price—
At par (20 cents per share). Proceeds—For explorationand mining operations in Venezuela. Underwriter—Co¬
lumbia Securities Co., Inc., of Florida (name changed to
Alfred D. Laurence & Co.), Miami, Fla.

March

proprietary development.

Elmo Ave.,

Venezuelan

Inc.

Proceeds

Price—At market.

Jan.

Tripac Engineering Corp.
(letter of notification) 100,000 shares of class A
common stock
(par 10 cents).
Price—$1.50 per share.
Proceeds—For working capital: machine tools; equip¬
ment

the basis p£

Price—At p&r

writer—Vanderbilt Mutual Fund Management Corp., 458
So. Spring St., Los Angeles 13, Calif.

Underwriter—Smart, Clowes & Oswald, Inc., Louisville,
Ky. Statement effective March 20.

Feb. 27

Price—$100 per unit. Proceeds—For gen¬
corporate purposes, including working capital and
redemption of any unexchanged preferred stock,

Fund, Inc., Los Angeles, Calif.
Dec. 31 filed 50,000 shares of common stock (par $1).

Underwriter—None.

City, Fla.

stockholders

share for each two shares held.

new

Vanderbilt Mutual

stock

of notification)

(par $1),

—Daugherty, Butchart & Cole, Inc., Portland, Ore.

($20 per share). Proceeds—For building and operating
yacht basin. Office—20 E. Fourth St. (P. O. Box 306),

Panama

licly offered.
eral

(letter

800,000 shares of capital stock

;

preferred stock held. This
offer expires on April 22.
The remaining $200,000 of
debentures and 4,000 shares of common stock were pub¬

■

($10 per share). Proceeds—For expenses for operating
a.public utility (telephone and telegraph). Underwriter

1,615,500

common

Francisco,

Line Corp.

cumulative participating preferred

vertible

for

Pipe

San

To be supplied by

—

stock to be offered to

otie

^Treasure Island Resort, Inc.

unit

filed

1,126,500

offered in units of a $100 debenture and two shares ol
stock, of which $545,300 of the debentures and 10,906
shares of stock are being offered first in exchange for

is President.

Corp.,

Leasing

Valley Telephone Co*, Silverton, Ore.
12 (letter of notification) 12,811 shares of com-

raon

of common stock and
purchase warrants, of which
250,000 shares of stock and 250,000 warrants are to be
offered publicly in units of one common share and one
warrant. Price—$2.01 per unit. Proceeds—For construc¬
tion of plant and other facilities; for equipment; and
working capital. Office—Wallkill, N. Y. Underwriter—
M. S. Gerber, Inc., New York.
22

Jan.

Sperti Products, Inc., Hoboken, N. i.
Jan. 29 filed $745,300 of 0% debentures due March 1,
1972 and 14,906 shares of common stock (par $1) being

Ores Corp,
of notification)
due April 1,

Transition Metals & Chemicals,

tures due 1967. Price—At face amount. Proceeds—For
additional working capital.
Underwriter — First Trust

April

/March

(4/17)
March 27 filed $50,000,000 of first mortgage pipe line
bonds due 1977 and 100,000 shares of cumulative pre¬
ferred stock (no par) stated value $100 per share. Price
—-To be supplied by amendment.
Proceeds — For con¬
struction program and to repay bank loans. Underwriters
—White, Weld & Co., and Stone & Webster Securities
Corp., both of New York.
;/...

York and
(April 4).

expire

writer—Schwabacher & Co., San Francisco, Calif.
>

Gas

Proceeds—For retire¬

amendment. Proceeds — For
working capital and general corporate purposes. Under¬

(letter

Transcontinental

•

* Southwest Acceptance Co., San Antonio, Texas
March 26 (letter of notification) $300,000 of 6% deben,

Price
-

debentures

E. Jefferson

92,500 shares of common stock

filed

cents), to be offered for subscription by common stock¬
holders of record April 3, 1957, on the basis of one new
share for each 10 shares held; rights to expire on April
23.
Price—To be supplied by amendment.
Proceeds—
For investments in subsidiaries and other corporate pur¬

■

share.

(4/11)

March 22 filed

of 6% convertible preferred

$250,000 of 6% con¬
1967 (convertible on
and after Oct. 1, 1958, into 100 shares of common stock
for each $100 of debentures).
Price—At face amount
(in
denominations of $100 and
multiples thereof).
Proceeds—For mining expenses.
Office—9525 Georgia
Ave., Silver Spring, Md.
Underwriter-^None. Charles
March

vertible

rights

held;

per

offering to be made by Rey¬
in which latter company United States
Reynolds Corp. owns a 50.7% stock interest.

States

Caiii.

stock

it Titanium

(4/9)

;Lake City, Utah.

United

777/;

(letter of notification) 380,000 shares of com¬
(par 10 cents). Price — 75 cents per share.
working capital, etc. Business
—Electrical heating. Office—26 Avenue B, Newark, N. J.
Underwriter—Eaton & Co., Inc., New York.

(letter of notification) 200,000 shares of com¬
stock. Price—$1.25 per share. Proceeds—For gen¬

mon

Proceeds—For inventory,

March 26

Co., Inc., both of New York for 701,074 shares.

June 29

•■■7,7/

common

Underwriters—Dillon, Read & Co. Inc. and Reynolds &

Thermoray Corp.

Underwriters—First South¬
& Co., Albuerque.

N. M.

N. E., Albuquerque,

/-:/,

(par $10) and 50,000 shares of common stock (par
Price—To be supplied by amendment. Proceeds—
For capital expenditures and working capital.
Under¬
writer—Moroney, Beissner & Co., Houston, Tex.
7

mon

cumulative preferred stock and for subscrip¬

Foil Co. and

stock

it Shop Rite Foods, Inc.
? :
■March 28 (letter of notification) 15,000 shares of com¬
mon stock
(par $5). Price—$11.50 per share. Proceeds—
/For fixtures and inventory.
Office — 617 Truman St.,

class

tion to proposed new stock

$1).

Underwriter—None.

N. M.

:7;/y7/■'.
Tex-Tube, Inc., Houston, Texas

nolds Metals Co.,

'/•■\\>,;'/;:/

March 29 filed 50,000 shares

Co.

746,270

Price—$28

ment of 7%

Underwriter—None.

I., N. Y.

filed

class

1957.

16,

■■it. Texas National Petroleum Co.
March 29 filed 91,540 shares of capital stock (par $1),
which are issuable upon exercise of outstanding class B
and class C warrants which are exercisable at $5.25 per
share.
Proceeds—For general corporate purposes.
Un¬

since 1937.

Ala.

and/or

share).
Proceeds—To Amos Treat & Co., Inc., the
selling stockholder. Office—28 Ranick Road, Amityville,

parent, under arrangements similar
those under which Sears has sold receivables to banks

Stuart

Manufacturing Co.

per

Roebuck & Co., the

Foil

States

(par $1) being offered for subscription by class A
and class B common stockholders of record April 2, 1957
on the basis of one class B share for each seven class A

stock

United

stock

■

(letter of notification) 6,500 shares of class A
(par 10 cents).
Price—At market (about $5.50

April

xiue

•

March

Philadelphia 2, Pa. Underwriter
'777.
7 7' "7
' '7...7

it Telechrome

(4/10)
subordinated debentures

Roebuck Acceptance Corp.

Burnside

indefinite.

1700 Girard Trust Bldg.,
—None.

Office—Philadelphia, Pa. Underwriter—Mortimer
& Co., Inc., New
York. Offering—Date

poses.

Inc. .7
March 20 (letter of notification) 29,375 shares Of class A
common stock.
Price—At par ($10 per share).
Proceeds
—For construction costs and working capital.
Office—
it T. E. C.

declared effective if

deposited for exchange
effective at option of St. Regis,
of the stock is deposited).
is

stock

York.

Underwriter—McDonnell & Co., New

be offered to the

(par $1).
priCe_To be supplied by amendment. Proceeds—To re¬
duce short-term borrowings and for expansion program.

*St. Regis Paper Co.
April 1 filed 850,000 shares of common stock (par $o)
'to be offered in exchange for common stock of St. Paul
& Tacoma Lumber Co. on the basis of 56% shares of
St. Regis stock for

of the unsold portion of the first 50,000 shares, are
puMic; and the underwriter will be
granted options to acquire the remaining 500,000 shares
for reoffer to the public. Price—At market prices. Pro¬
ceeds—For working capital and general corporate pur¬
any

it Swartwoirt Co*, -Cleveland, Ohio (4/22)
March 29 filed 30,000 shares of common stock

from page 47

New York

(4/23-30)

Price

—

To be

100,000

for

selling

$1),/
of

stockholders.

supplied by amendment.

working capital.

Proceeds — For
Underwriter—F. Eberstadt & Co., New

York.
•

United I

Humiliating Co., New Haven, Conn. (4/11)
March 22 filed 311,557 shares of common stock (no par)
to be offered for subscription by common stockholders
of record April 10. 1957 on the basis of one new share
for each eight shares held; rights to expire on May 2.
Price—$22 per share.
Proceeds—For payment of bank
loans and construction program. Underwriter—None.
United States Air Conditioning Corp.
•Sept. 27 filed 600,000 shares of common stock (par 10
cents), of which 50,000 shares are to be offered to em¬
ployees, distributors and dealers; 50,000 shares, plus

Fund,

Inc., New York

capital stock (par $1).

200,000 additional shares
Price—At market. Proceeds—»

For investment.

Wilson & Co., Inc.

of 20-year sinking fund de¬
be supplied by amend¬
ment.
Proceeds — To redeem presently outstanding
first mortgage bonds, to repay bank loans and for ex¬
pansion program.
Business—Meat packing firm. Un¬
derwriters—Smith, Barney & Co.; Glare Forgan 8c Co,.
and Hallgarten & Co., all of New York City. Offering—
28

bentures

of which 250,000 shares are to be offered for account

and

Aug.

March 29 filed 350,000 shares of common stock (par

company

it Whitehall

March 29 filed (by amendment)

filed
due

$20,000,000

1976.

Price—To

Indefinitely postponed.
Winter Park
Feb.

and

$100)

filed

4.000

Telephone Co.
sharlfe of common stock

40,000

being offered

cumulative

preferred

(par $10)

stock

(par
in units of 10 common shares and

(first to preferred stockholders;
April 5). Price—$230 per unit. Pro¬
ceeds—To repay bank loans and for expansion program.
Underwriters — Security Associates, Inc., Winter Park,
Fla.; First Florida Investors, Inc., Orlando, Fla., Bache &
Co., New York, N. Y.; and Grimm & Co., Orlando, Fla,

one

preferred- share

rights to expire

Statement effective March 21.

•

...

Volume 185

Number

5626

The

„

Commercial and Financial Chronicle

(1621)
•>

Wrigley Properties, Inc. (4/11)
March 6 filed 2,069,159 shares of common stock(par $1)
to be offered for subscription
by security holders of
ACF-Wrigley Stores. Inc. on the following basis: 1.816,909 shares on the basis of one share for each
two shares
of

ACF-Wrigley

stock held

common

(rights to expire

April

25,

1957),

of April 10, 1957
120,000 shares on

the basis of 30 shares for each
SI,000 of debentures
57,250 shares to be offered holders of options to

held;

purchase

ACF-Wrigley

stock; and 75,000 shares to hold¬
ers
of common stock
subscription warrants of ACFWrigley. Price—$2 per share. Proceeds—To
acquire, de¬
velop and operate warehouses, shopping centers and
Allen &

—Acquired

Underwriter

General

Tire

Office

Detroit, Mich. Underwriter—

—

Prospective Offerings
it

Co.

reported

was

this

(to

company

26 it

mon

stockholders

was

additional

$12,200,000).

com¬

shares.

common

Un¬

Jan.

Central

was

announced

plans to issue

company

pay

bank

—To

determined

bidders:
Union

loans and for

Halsey,
&

and

Proceeds—To

construction.

re¬

Underwriter

competitive

bidding. Probable
Inc.; Eastman Dillon,
Co., Equitable Securities Corp. and

Stuart

Securities &

Drexel

new

Co.

(jointly); Lehman Brothers; Harriman
Ripley & Co. Inc. and Goldman, Sachs & Co.
(jointly);
BIyth & Co., Inc. and Kidder, Peabody & Co.
(jointly);
Morgan Stanley & Co.
Bids—Expected to be received
to

for

(EDT)

a.m.

May

Registration—Planned

April 12.

Aluminum

March 18 it
sell

15,000

announced company

shares of $1.20

ferred stock series A
are

vote

approving

preferred

and The Marshall

stock.

bank

for

convertible

Stockholders

authorized

issue

pre¬

April 6

Underwriters—Emch

offered

100,000

its

30,000
&

stockholders

right to
capital stock

surplus

Share Corp. and Collett &

First Boston Corp., New
Corp., Indianapolis Bond &
Co., all of Indianapolis, Ind.

•

American Trust Co., New York
March 8 it was announced bank is

offering to its stock¬
holders the right to subscribe for
50,000 additional shares
of capital stock on the basis of one new
share for each
five shares held as of Jan.
21; rights expire on April 30.
Price—At par ($10 per share). Proceeds—For
expansion
Underwriter—None. Harvey t. Sohwamm and
his associates, who acquired control in
1950, will pur¬
program.

chase any unsubscribed
i

Associated

-March

class A

Truck

was

shares.

(4/29-5/3)
125,000 shares

sale

—

Business—A short haul motor

com¬

carrier operating over 3,000 miles or
routes in Illi¬
nois, Indiana, Michigan and Ohio. Office—Grand
Rapids,
mon

Mich.

was

.<.•

Fall

Electric

issue

and

$20,000,000

Probable

Central Louisiana Electric
25

bidders:

reported that the company plans some
equity financing in 1957. Proceeds—For $12,construction program. Underwriters
Kidder,
—

Peabody & Co. and White, Weld & Co. placed last bond
issue privately; last preferred stock issue also
placed
privately; with common stock locally or to stockholders,

Underwriter—Cruttenden,

+ Atlantic City Electric Co.
9

was

Podesta

Co.,

Chi¬

the
debentures.

Underwriter—May be determined by competitive
bidding. Probable bidders: Halsey, Stuart & Co.
Inc.;
Kuhn, Loeb & Co., American Securities Corp. and
Wood,
Struthers & Co. (jointly);
White, Weld & Co. and Shields
Co.

(jointly); The First Boston Corp. and Drexel &
Co. (jointly); Eastman
Dillon, Union Securities & Co.
and Smith, Barney & Co.
(jointly); Lee Higginson Corp.;
BIyth & Co., Inc.
.

Baltimore & Ohio

Bids

1957,

permanent financing

some

definite plans

have yet been worked out.
Bank loans outstanding at the year end totaled
$10,500,no

Construction

000.

expenditures for

1957

are

now

esti¬

mated at between

$19,000,000 and $20,000,000. It is esti¬
mated that $5,500,000 of the,
amqunt needed for this pro¬
gram will be supplied from internal cash with the bal¬
to

ance

supplied from outside

—Any common

bonds

stock offer

incluc^e: Halsey, Stuart & Co. Inc.; BIyth
& Co., Inc. and Kidder, Peabody & Co.
(jointly); The
First Boston Corp. and Coffin & Burr, Inc.
(jointly);
may

Harriman,

Ripley

Fenner & Beane and

Co.

(4/15)

are

expected to be received by the
company on or
April 15 for the purchase from it of
$3,585,000
equipment trust certificates to be due
annually in 1-to15 years.
Probable bidders: Halsey, Stuart & Co.
Inc.;
Salomon Bros. & Hutzler.
about

Boston

Edison Co.

March 19 it

was

sell

(6/5-13)

expected

are

Inc.; Merrill Lynch, Pierce,
White, Weld & Co. (jointly); Salo¬

construction

issue and

program.

Underwriter—To

determined

by competitive bidding. Probable bid¬
Halsey, Stuart & Co. Inc.; The First Boston
Corp.;
Lehman Brothers; Harriman
Ripley & Co. Inc.; White.
ders:

Weld

Co.

Bids—Expected in first

^une-

trust

Co.

certificates.

received

Probable

Inc.; Salomon

Feb.

Vote

(A.

it
•

was

M.)

second

week

by this

(5/1)

company

Bros.

bidders:

Halsey, Stuart &

Hutzler.

Chicago, Rock Island & Pacific Ry. (5/14)
are
expected to be received by this company on
May 14 for the purchase from it of $3,000,000 equipment
Bids

trust

Co.

certificates.

Probable

bidders:

Halsey,

Stuart &

Inc.; Salomon Bros. & Hutzler.

sell

Gas & Electric

Co.

stockholders

new

above).

Underwriter—

bidding.. Probable bid¬

was

reported that company plans to issue and
$8,000,000 of cumulative preferred stock.

•

construction

program.
Underwriter
Putnam & Co.,
Hartford, Conn.; Chas. W. Scranton & Co., New Haven,
Conn.; and Estabrook & Co., Boston, Mass.

Feb. 11 it

—

(6/11)

announced company plans to issue and sell
if
$50,000,000
25-year
debentures

was

total

amount

this year, viz.: $25,000,000 in June and
$25,000,000 in the
Fall.
Underwriter—To be determined by competitive

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co. and Paine, Webber, Jackson and
Curtis

(jointly); Morgan, Stanley & Co. and the First
Corp. (jointly). Bids—To be received up to 11:30
(EDT) on June 11.

Boston
a.m.

18 it was announced
company plans to sell in
about $60,000,000 of new securities. Proceeds—For
construction program (estimated to cost about

1957

$89,000,000
bonds, to be determined
bidding.
Probable bidders: The First
Boston Corp. and Halsey, Stuart & Co. Inc.
(jointly);
Coffin & Burr, Inc., and Spencer Trask & Co.
(jointly).
this

year).

Underwriter—For

competitive

—

Now

Mont

March
offer

received

latter

part

that corporation intends

Broadcasting Corp.

its

expected

was

announced

stockholders

300,000 shares of

the

right

stock

common

about

for

the basis of

one

new

share fo reach three shares held. Proceeds—To
help pay
for cost of acquisition of radio station WNEW.
Under¬

writers—Kuhn; Loeb & Co. and Carl M. Loeb, Rhoades
&

Co., both of New York.
El

Paso

Feb.

Electric
was

Co.

reported

stockholders

common

right to subscribe

(5/7)
company

record

new

for

each

oversubscription

bank loans and for
Stone

Webster

plans

to offer

its

about

May 7, 1957 the
before" May'21 for 119,522 addi¬

tional shares of cominon stock
one

class

on
May 7 will
100,000 shares of

El -Paso
Feb.
sell

(par $5)

privilege).

held

Securities Corp.,

the basis of

(probably with

Proceeds

construction.

new

—

reduce

Dealer-Manager—

New York, acted

stock offering last year.

common

Electric

was

about

Co.

reported

(5/15)
company

plans

iss

$6,500,000 of first mortgage bonds.

and

Proceeds

—To

repay bank loans and for construction program.
Underwriter—To be determined by competitive bidding.

$30,000,000

Empire District Electric Co.

plans

of first

issue

mortgage

and

bonds.

Underwriter—To be determined by competitive bidding.
bidders: Halsey, Stuart & Co. Inc.; Eastman

Probable

Dillon, Union Securities & Co., and White, Weld & Co.
(jointly); BIyth & Co., Inc., and The First Boston Corp.
(jointly); Morgan Stanley & Co. and W. E. Hutton & Co.
(jointly); Merrill Lynch, Pierce, Fenner & Beane and
Lehman Brothers
(jointly). Bids—Tentative scheduled
for May 7.
Cincinnati, New Orleans & Texas Pacific Ry.
Bids will be received by the company up

April

for

the

purchase

from

equipment trust certificates dated Feb.

to noon

(EST)

was

$25,000,000
1957.
tion

Electric

1957 and due

Illuminating Co.

reported company plans to issue and sell

of first

mortgage

bonds

the

Proceeds—To repay bank loans and

March

14, D. C. McKee, President, announced company
plans to issue and sell some additional bonds this year.
Proceeds—To

retire bank loans ($2,200,000 at Dec. 31,
1956) and for construction program. Underwriters—Pre¬
vious bond financing was done privately.
•

Summer of

for construc¬

Underwriter—To be determined by com¬
bidding.
Probable bidders:
Halsey, Stuart &
Co. Inc.; The First Boston Corp.; BIyth & Co., Inc.; Dil¬
lon, Read & Co. Inc.; Blair & Co. Inc., and Baxter, Wil¬
program.

its

&
&

Co.

(jointly);

Glore,

Forgan

Co.;

White,

Co.

March

Transmission Corp.
was

reported

the

publicly $7,800,000 of interim

and

plans to offer
678,900 shares

Power Corp.

was

reported
about

common

expire June

May

stock

Price

(5/14)

that company plans to

—

14,

next,

offer. to

255,813 shares of
basis; rights to

l-for-10

announced

Underwriters—Merrill

May

Lynch, Pierce, Fenner &
and Kidder, Peabody & Co., both of New York.
Florida

sell

13.

Beane

Power &

Light Co. (5/21)
was
reported company plans to issue and
$15,000,000 of first mortgage bonds due 1987. Pro¬

March

ceeds—To
gram.

repay bank loans and for construction pro¬
Underwriter—To be determined by competitive

bidding. Probable bidders: Halsey, Stuart & Co. Inc.;
White, Weld & Co.; Merrill Lynch, Pierce, Fenner &
and Kidder, Peabody & Co. (jointly); The First
Boston Corp.; BIyth & Co., Inc. and Lehman Brothers
(jointly). Bids—Expected to be received on May 21.
Beane

General

Telephone Corp.

March

18 it was announced company plans to issue and
probably in June, first to common stockholders,
$45,000,000 of convertible debentures. Underwriters —

sell,

Paine, Webber, Jackson & Curtis and Stone & Webster
Securities Corp., both of New York; and Mitchum, Jones
&

company

notes

stockholders

additional

petitive

liams

Florida

Jan.

$4,200,000 of

semi-annually from Aug. 1, 1957 to and including Feb.
1, 1967.
Probable bidders: Halsey, Stuart & Co. Inc.;
Salomon Bros. & Hutzler; Baxter & Co.
Nov. 12 it

bidders: Halsey, Stuart & Co. Inc.; Merrill
Pierce, Fenner & Beane; Stone & Webster Se¬
curities Corp.; Equitable Securities
Corp.; Kidder, Pea¬
body & Co., Shields & Co. and White, Weld & Co.
(jointly). Bids—Expected to be received up to 11 a.m.
(EDT) on May 15.

Lynch,

(5/7)

reported company

was

$25,000,000 to

Coastal

announced
a

18* it

;

Co.

authorizing

(see

Probable

Weld

Byers

stockholders

dealer-manager for

May 1 for the purchase from it of $6,000,000 equipment

Cleveland

announced that company
may

$25,000,000 of first mortgage bonds. Stockholders to
vote
April 30 on approving proposed new
financing.

Proceeds—For

Bros. & Hutzler.

mon

finance

Connecticut Light & Power Co.
Feb. 18, it was reported company plans to sell not less
than $20,000,000 of first
mortgage bonds,„ possibly this
Fall, depending upon market conditions. Proceeds—For

Underwriters

sources.

(first to stockholders) may
be underwritten by
Harriman, Ripley & Co. Inc., The
First Boston Corp. and Coffin & Burr, Inc. Bidders for

any

Columbus & Southern Ohio Electric Co.

31, W. F. Wyman, President, announced that "while
expected to do

order

which is expected to cost

Inc.; Morgan Stanley & Co.;
Lynch, Pierce, Fenner & Beane and White, Weld
(jointly).

Feb.. 21 it

Power Co.

(4/16)

RR.

Co.

Bids

March

stockholders will vote April
issuance and sale of convertible
Proceeds—For construction pro¬

gram.

June.

In 1954, a convertible debenture
underwritten by Kidder, Peabody & Co.

Cincinnati
-

announced

authorizing

bonds

Merrill

without underwriting.

cago, 111.

March 25 it

stock

mon

offering

company

plans the issuance

March

debt and

Maine

debentures

Detroit Edison Co.

Co., Inc.

was

additional

approximately $87^000,000, which will also be financed,
in part, through the
offering of 1,675,415 shares of com¬

first

Co.

Jan.

Consolidated Natural Gas Co.

plans to

company

$18,000,000

Halsey, Stuart
Inc.; Morgan Stanley & Co.; Kuhn, Loeb & Co.;
Dillon, Union Securities & Co.; The First Bos¬
ton Corp.; Harriman
Ripley & Co. Inc.; Merrill Lynch,
Pierce, Fenner & Beane and Stone & Webster Securities
Corp. (jointly).
&

sale

Inc.

Underwriter—Dillon, Read & Co. Inc., New York.

Corp.

Proceeds—To repay bank loans and for
Underwriters—To be determined by

bidding.

System,

announced that it

1957 construction
program,

Light Co.

between

Gas

company

sell in the Fall

Chicago, Milwaukee, St. Paul & Pacific RR.

(par $3) is planned the latter part
of April or early in May. Of the total
50,000 shares will
be sold by company and
75,000 shares by selling stock¬
holders. Price
$10 per share. Proceeds
For general
corporate purposes.

financing

Eastman

Bids

stock

common

18,

Lines, Inc.

announced

debenture

construction.

new

the

Gas

reported

was

competitive

Dec.

Bank & Trust Co.

additional shares of

City Securities

this

Central

Underwriters—The

York; and

permit
(which approxi¬

its bank loans

Illinois
it

Columbia

To be determined by
competitive
ders: Halsey, Stuart & Co.

amount which would

Hudson

Co.

(par $10) at rate of one new share for each four shares
held March 20; rights to expire on
April 8. Price — $33
per share.
Proceeds — To increase capital and
accounts.

Inc.,

plans to issue and

company

■

mortgage bonds.

Co., both of Milwaukee, Wis.

American Fletcher National

March 21

plans to issue and

cumulative

(par $20).

Mason,

Underwriter—For any debt secu¬
rities, Kidder, Peabody & Co.; for common stock,
Kidder,
Peabody & Co. and Estabrook & Co., both of New York.

500,000

Specialty Co.

was

construction program.

sell

$14,500,000 first mortgage bonds.

Horner

1 it was announced that the
company plans, before
the middle of the year, to issue
approximately $12,000,000 of new securities (two-thirds in debt
securities and
the balance from sale of common
stock). Proceeds—For

Central

(5/9)

pell

estimated cost of about

Feb.

March
Co.

Telegraph Co.

announced

was

plans to construct

derwriter—Reynolds & Co., New York.
Power

share.) Pro¬
ceeds—Together with funds from private sale of $4O,OO0;~
000, for construction program. Underwriters—Lehman
Brothers and Allen & Co., both of New York.
/

its

debentures in

done privately.

reported company may offer to its
some

Underwriter—Scott,

substantial reduction

Products, Inc., Emmaus, Pa.

Feb.

some

(Common stock not sold in units
would be purchased by
Delhi-Taylor Oil Corp., or tys
stockholders at an average price of $10 per

Feb.

pipe line in South Carolina
$8,700,000.

of $1 par stock in units.

and

Carolina Pipe Line Co.
March 11 it was reported
company

mate

Mortgage Corp., Chicago, III.

Alabama

1956.

financing.

sell

surviving
corporation following merger of First
Mortgage Corp.
and
Irwin Jacobs & Co. of
Chicago) plans a public
offering of $1,000,000 class A 6% participating convert¬
ible stock (par $1).
Underwriter—Baker, Simonds & Co.,
Detroit, Mich. Offering—Expected in April.
Air

—

Carolina Telephone &

Co.

Dillon, Read & Co., Inc., New York,
previous preferred stock financing, while Kid¬
der, Peabody & Co. underwrote General Tire & Rubber

March

Dec.

Rubber

handled

Lynchburg, Va.,.,,

Co., New York.

Advance

common

locations.

store

cumulative preference stock (par
$100) and on increas¬
ing the authorized outstanding indebtedness to
$15,000,000, in connection with its proposed recapitalization
plan. There are no specific objectives involved. Control

Templeton of Los Angeles, Calif.
Continued

page

The Commercial and Financial Chronicle

1957

Thursday, April 4,

' (1622)

Continued jrom page
General

ner

Rubber Co.

Tire

bidding.

Executive Assistant to the Presi¬
dent, said the management was working on a plan to
revamp
the capital structure and that the company
would like to come up with one issue of preferred stock.
He added that close to $18,000,000 will be put into cap¬
ital investments during the fiscal year to end Nov. 80,
4, M. G. O'Neil,

Dec.

is planning is¬
suance and sale of $15,500,000 first mortgage bonds. Pro¬
ceeds
To repay bank loans and for new construction.
Underwriter—To be determined by competitive bidding.
Probable bidders: Haisey, Stuart & Co. Inc.; Morgan
Stanley & Co.; Blyth & Co., Inc., Kidder, Peabody &
Co. and Shields & Co.
(jointly); Equitable Securities
Corp. and Eastman Dillon,
Union Securities & Co.
(jointly); Harriman Ripley & Co. Inc. Bids—Tentatively
it

announced the company

was

—

(EDT) on June 6.

expected to be received up to 11 a.m.

(6/3)
March 12 it was announced company plans to offer to
common stockholders about June 3 the right to subscribe
for approximately $500,000 of convertible capital deben¬
tures due 1967.
Underwriters—Johnston, Lemon & Co.,
Government Employees Corp.

Washington, D. C.
Utilities Co.

Gulf States
March

reported

was

plans to issue

company

and

$16,000,000 first mortgage bonds late in June. Pro¬
ceeds—To repay bank loans and for construction pro¬
sell

Underwriter—To be determined by competitive
Probable bidders: Haisey, Stuart & Co. Inc.;
Merrill Lynch, Pierce, Fenner and Beane and White,
Weld & Co.
(jointly); Salomon Bros. & Hutzler and
Eastman Dillon, Union Securities & Co. (jointly); Kuhn,
Loeb & Co. and A. C. Allyn & Co. Inc. (jointly); Stone
& Webster Securities Corp.; Lee Higginson Corp.
gram.

bidding.

March

proximately

$7,000,000

ap¬

sale of additional

through the

determined

Underwriter—To

construction.

new

to raise

plans

company

Proceeds—To repay bank loans and for

stock.

common

reported

was

competitive bidding. Probable bidders: Merrill Lynch,
Pierce, Fenner & Beane and Lehman Brothers (jointly);
Stone & Webster Securities Corp.; Carl M. Loeb, Rhoades

June.

Offering—Expected in

Co.

Hilo Electric Light Co.,
March 9 it

Ltd.

& Co., New York.

Houston

not

reported

v'C.

late this

offer

may

company

March 13 it

reported registration is expected in near

was

750,000 shares of common stock
(par $4).
be supplied by amendment.
Proceeds — To

future

Securities

Union

Equitable
Eastman Dillon,

Haisey,' Stuart & Co. Inc.;

Brothers,

Lehman
Co.

Salomon

and

Texas

March

was

Gas

Bros.

Freres & Co. and Blyth
(jointly); Kidder, Peabody & Co. /
(jointly); Lazard
Houston

Hutzler

Co., Inc.

Underwriters — The First Boston
Corp., New York; Dean Witter & Co., San Francisco.
Calif.; and Carl M. Loeb, Rhoades & Co., New York.

that

company

in units.

Part of

stockholders

ent

stock will be offered to pres¬

common

struction program.

$10 per share. Proceeds—For con¬
Underwriter—Blyth & Co., Inc., San

Francisco and New York.

Illinois Power Co.
Feb.

7, the directors approved, subject to stockholder
approval, an increase in the authorized serial preferred
stock (par $50) from 1,000,000 shares to 1,600,000 shares.
Underwriters—Merrill Lynch, Pierce, Fenner & Beane
and The First Boston Corp., both of New York.

Indianapolis Power & Light Co.
H. T. Prichard, President, announced that pres¬
ent plans contemplate an issue of $6,000,000 of preferred
Nov. 21,

stock

time

some

feasible, and

1957

conditions

market

rities will need to

be sold in

approximately $14,000,000.

loans

for

and

issue of $8,000,000 in bonds in 1958. Tem¬
loans are available and probably will be

utilized, during at least pa*t of 1957.
to

make

bank

porary

new

1959

and

Additional secu¬
1960, amounting

Proceeds—To

construction.

bank
Underwriter—May be
repay

Lehman
Boston

Brothers, Goldman, Sachs & Co. and The First
Corp., who underwrote last equity financing.

International
Feb.

was

stockholders

Business
announced
record

Machines

Corp.

(5/21)

plans to offer its
1957, approximately

company

May

21,
capital stock, following pro¬
up of the present outstanding shares on a
2-for-l basis.
Proceeds—For working capital.'-Under¬
writer—Morgan Stanley & Co., New York.
$200,000,000
posed split

of additional

•

Interstate Power Co.

March 4 it

was

New

(5/22)

announced

company plans to sell about
$29,000,000 of new securities ($20,000,000 of first mort¬
gage bonds
and about $9,000,000 of common stock).

Royal Dutch Airlines i\
was reported company plans offering in the
United States of its common stock. Underwriters—Smith,

—Scheduled to be received on

Haisey, Stuart & Co. Inc.;

KLM

Norfolk & Western

First Boston Corp., (latter han¬

Barney & Co. and The

Bids

Gas Co.

March 18 it

Bids

bidders:

Haisey,

April or May,

March

was

between

March

gage
loans

Underwriter—To
Probaole bidders:
haisey, Stuart & Co. Inc.: Merrill Lynch, Pierce, Fenner
and Beane, Kidder, Peabody & Co. and White, Weld &
Co. (jointly); Lehman Brothers and Riter & Co. (joint¬
ly); The First Boston Corp. and Blyth & Co., Inc.
(jointly); Equitable Securities Corp.; Kuhn, Loeo & Co.;
be

plans

issue and
mort¬

for

Summer.

construction

Proceeds—To repay bank

Underwriter—To

program.

determined

Minneapolis & St. Louis Ry.

sell

to noon (CST)

reported

was

Pacific Telephone & Telegraph

mortgage bonds or convertible
before June 30, 1957. * Underwriter—To be

$10,000,000 of first

be financed in part, by debt borrowings and stock issues.
About 90% of Pacific's stock is owned by American Tele¬
bidding. Probable bidders: "
phone & Telegraph Co. Underwriter—For any bonds, to
Haisey, Stuart &.Co. Inc.; Blyth & Co., Inc., Merrill/
be determined by competitive bidding. Probable bidders;
Lynch, Pierce, Fenner & Beane and. Kidder, Peabody
Haisey, Stuart & Co. Inc.; Morgan Stanley & Co.
& Co. (jointly); Blair & Co., Incorporated.
t Peninsular Telephone Co. National Fuel Gas Co. (5/28)
March 28 it was announced company plans to offer to its
Jan. 10 it was reported company plans to issue $15,000,common stockholders 189,844 additional shares of com¬
000 of new 25-year debentures. Proceeds—To make addi¬

debentures

determined

by competitive

tional investments

in securities of subsidiaries.

mon

Under¬

stock

& Co.;
Bids—
Tentatively scheduled to be received up to 11:30 a.m.
(EST) on May 28. Registration—Planned for April 18.

shall & Hicks,

Feb.

reH

later

was

Proceeds—For construction program.

and

securities.

Underwriter—For

determined

tion.

Corp.; Eastman Dillon, Union Securities
White, Weld & Co.; Harriman Ripley & Co. Inc.

National

issue

—

Boston

March

reported company plans to
abcut $11,000,000 of new

1957

writer

Telefilm
was

Associates,

announced

future.

Proceeds—For

plans to

corporate

purposes.

both of New York City.

bidders: Haisey,

issue up

Underwriter—May be Charles Plohn & Co., New York/

working capital and other

Proceeds—Together with

Electric

Co.

Sept. 12 it was announced company plans to issue and
sell $6,000,000 - of first mortgage bonds.
Underwriter—To
be
determined by competitive bidding.
Probable

debentures in the near
reduction of
short-term % debt,

$8,000,000 convertible notes

l-for-6 basis.

Pennsylvania

Inc.

company

proposed bond sale, to finance new construc¬
Underwriters—Morgan Stanley & Co. and Cogge-

Merrill Lynch, Pierce, Fenner & Beane and Kidder, Pea¬

Iowa-Illinois Gas & Electrrc Co.

Co.

14,

funds from

May 22 for bonds.

competitive, bidding.

James S. Cantlen, Vice-President, announced
that company plans to spent $159,000,000 in
1957-and
$157,000,000 in 1958 for expansion and improvement to

plans to issue and

company

(Wis.) (6/4)
>
plans to issue and

company

$10,000,000 of first mortgage bonds due 1987. Pro¬
construction program. Underwriter—To be

Jan.

Montana-Dakota Utilities Co.

sell

Tower Co.

reported

was

Probable bidders:
Merrill Lynch, Pierce, Fenner
& Beane; Lehman Brothers and Riter & Co. (jointly);
Blyth & Co., Inc.; The First Boston Corp.; Kidder, Pea¬
body & Co. and White, Weld & Co. (jointly)., Bids-rExpected to be received on June 4.C
'<•

Haisey, Stuart & Co. Inc.; Salomon Bros. & Hutzler,
March

Co. Inc.

Haisey, Stuart & Co. Inc.:

l-to-15 years. Probable bidders:

annually in

determined

April 23 for the purchase from it of $2,700,000 equip¬
ment trust certificates,
series A dated May 10, 1957,
to mature

States

ceeds—For

(4/23)

Bids will be received by the company up

Northern

March

by competitive bidding. Probable bid¬
ders. Haisey, Stuart & Co. Inc.; Smith, Barney & Co.
and Blyth & Co., Inc. (jointly); White, Weld & Co. and
Lehman Brothers (jointly).

construction program.

determined by competitive bidding.

Harriman Ripley &

$25,000,000 and $30,000,000 of first

bonds before
and

company

stock in units.

(Minn.)
>
4 it was reported company plans to issue and
tne Fall of 1957 $15,000,000 first mortgage bonds.

Proceeds—For

1957.
reported

reported company plans to issue and

'■

sell in

Michigan Consolidated Gas Co.
sell

was

notes and common

Northern States Power Co.

Inc.; White, Weld & Co.; Blyth & Co., Inc.; Kidder, Pea¬
body & Co. and Drexel & Co. (jointly); The First Boston
Corp. Bids—Not expected to be received until sometime
in

April.

& Co.

Haisey, Stuart

Natural Gas Co., Ltd.

$ell
Proceeds—About
$10,500,000, together with private financing, to be used
for new construction.
Underwriters — Hemphill, Noyes
6
Co. and Bear, Stearns & Co.,. both of New York,
to head group in United States.
Offering—Expected in
it

March 1

some

Metropolitan Edison Co.
reported that company is now considering
the
sale
of
$19,000,000
first
mortgage
bonds
due
1987.
Underwriter — To be determined
by competi¬
Probable

Northern Ontario

the

bidding.

Hutzler.
Co.

—

Francisco.

Jan. 29 it was

tive

(4/10)
received by this company on

plans to issue some
debentures and preferred stock this year.
Proceeds-r
To repay bank loans ($18,750,000 at Dec. 31, 1956).' Un¬
derwriter
Blyth & Co., Inc., New York and San

expected to be received by the company some
Fall for the purchase from it of $14,400,000

are

time in

Bids

May 21.

March 6 it was announced company

& Nashville RR.

Louisville

Morgan Stanley & Co.

Ry.

Northern Natural Gas

Stuart & Co. Inc.; Blyth & Co., Inc.; Stone &
Securities
Corp.; Lehman Brothers, Merrill

Haisey,

Inc.; Salomon Bros. &

Co.

first mortgage bonds due 1982. Pro¬
bank loans (expected to be around $6,-

issue of $10,000,000

ceeds—To repay

plans to issue and

April 10 for the purchase from it of $6,600,000 equipment
trust certificates.
Probable bidders: Haisey, Stuart &

(5/1)

announced the company is planning'an

was

expected

are

competitive bidding.
Probable bidders: Haisey, Stuart & Co. Inc.; The First

& Co. (jointly); White, Weld & Co. and R. W.
Pressprich & Co. (jointly); Salomon Bros. & Hutzler;
Smith, Barney & Co. For stock: Kidder, Peabody & Co.
Bids—Expected to be received up to 11 a.m. (EDT) on

(5/21)

$70,000,000 of refunding mortgage bonds. Proceeds
—To retire short-term borrowings.
Underwriter—To be
determined by competitive bidding.
Probable bidders:

Underwriters—To be determined by competitive bidding.
Probable bidders: For bonds: Haisey, Stuart & Co. Inc.;

body

May 14.

York Telephone Co.

March 18 it was announced company

March 18 it

plans to offer

(EDT)

noon

sell

equipment trust certificates.
Probable bidders:
Inc.; Salomon Bros. & Hutzler.

publicly $22,405,556 of 5V2% interim notes (convertible
into preferred stock) and $18,241,944 of common stock

and

Co.

Securities

Stuart & Co.

& Oil Corp.

reported

Eastman
Dillon, Union
Wood, Struthers & Co. (jointly>;
Lehman Brothers; The First Boston Corp.; E^uiiaoie
Securities Corp.; Merrill Lynch, Pierce, Fenner & Beane,
Hutzler,

Bros.-. &

saiomon

selling stockholders.

Probable

Corp.;

Underwriter—May be
determined by competitive bidding,
Probable biuders:
Haisey, Stuart & Co. Inc.; Kuhn, Loeb & Company;
Co.

Electric

Marrimack-Essex

Lynch, Pierce, Fenner & Beane and Reinholdt & Gard¬
ner
(jointly); The First Boston Corp. Bids—Planned to
be received or^Mayj;Registration—Expected on April 4.

bidders:

first mortgage

to be known

by the resultant company,

issue

bond

Jersey Central Power &

Webster

Securities

Light Corp., Lawrence Electric Co., Haverhill Electric
Electric Light Co., into one company.

tric

.v'
" ' Kidder, Peabody & Co. and White, Weld & Co. (jointly).
Light Co. /
7 Offering—Expected in first half of 1957.. - >
Sept. 12, it was announced company plans to issue and
New Jersey Power & Light Co.
sell $8,000,000 of first mortgage bonds due 1987 (later
Sept. 12 it was announced company plans to issue and
changed to $15,000,000). Underwriter—To be determined
sell $5,000,000 of first mortgage bonds. . Underwriter—
by competitive bidding. Probable bidders: Haisey, Stuart
To
be determined
by competitive bidding.
Probable
& Co. Inc.; Kidder, Peabody & Co.; The First Boston
bidders: Haisey, Stuart & Co.; Kuhn, Loeb & Co., Leh¬
Corp.; White, Weld & Co.; Eastman Dillon, Union Secu¬
man
Brothers and Salomon Bros.& Hutzler (jointly/;
rities & Co., Salomon Bros. & Hutzler and Merrill Lynch,
Eastman Dillon, Union Securities & Co. and White, Weld
Pierce, Fenner & Beane (jointly). Bids — Expected in
Si Co.
(jointly); Equitable Securities Corp.; The First
June or July, 1957.
.
Boston Corp.; Merrill Lynch. Pierce. Fenner & Beane.
Kaiser Industries Corp.
1
New York State Electric & Gas Corp. (5/14)
Nov. 28, E. E. Trefethen, Jr., Executive Vice-President,
Oct. 24 it was announced company plans to sell in 1957
stated that it is anticipated that a portion of the funds
$25,000,000 of first mortgage bonds, and an additional
necessary to meet the $25,000,000 installment due April
$20,000,000 in 1958. Proceeds—To finance construction
1, 1957 on its 4%% term loan may have to be provided
program.
Underwriter—To be determined by competi¬
by the creation of debt by, or the sale of equity securi¬
tive bidding.
Probable bidders:. Haisey, Stuart & Co.
ties, of this corporation or Henry J. Kaiser Co., or /
Inc.; Kuhn, Loeb & Co.; Blyth & Co. Inc. and Smith,
through the public or private sale of a portion of the
Barney & Co.
(jointly); The First Boston Corp. and
securities of the companies owned by the Henry J.
Kaiser Co., or of certain other assets. Underwriter—The
Glore, Forgan & Co. (jointly); Harriman Ripley & Cd.
First Boston Corp., New York.
Inc.; Kidder, Peabody
&• Co. and Salomon Bros. &
Hutzler (jointly). Bids—Expected to be received up to
Kaiser Industries Corp.
Proceeds—For expansion program,

tures.

Fall

approximately $25,000,000 first mortgage bonds, but
exact amount, timing, etc. has not yet been determined.
Underwriter—To be determined by competitive bidding.

Co. and Amesbury

800,000) and for construction purposes. Underwriter—To
be determined by competitive bidding. Probable bidders:

Lighting & Power Co.
was

Eugene H. Walte, Jr., announced company plans
in the near future to sell an issue of convertible deben¬
Dec. 27,

Laclede

to issue and

ing was done privately.
Feb.

Co.'/*,:/-//,/<//>.;•;■/>

Sulphur

Lake

195o, it was announced company plans to merge
its subsidiaries, Essex County Electric Co,, Lowell Elec¬

dling books), both of New York.

of first mortgage bonds, series F, at an
to exceed 6%.
Previous bond financ¬

$2,000,000

interest rate

Co.

announced stockholders will vote

was

England Electric System

New

Jan. 3,

This would be followed by a $20,000,000

April
approving the creation of a new issue of 50,000
of preferred stock (par $100).
Underwriter —
it

(Hawaii)

announced company plans

was

Co., Inc.; Lehman Brothers.

Power & Light

Iowa

March

Price—To

Utilities Co.

Gulf States

sell

Forgan & Co.; Blyth &

Jefferson

(6/6)

.Georgia Power Co.

mon

Smith, Barney

1957.

Jan.

preferred stock, to be determined by competitive
Probable bidders; ZVLerrnl Lynch, Pierce, Pen& Beane and White, Weld & Co. (jointly); SaloBros.
Hutzler; Harriman Ripley & Co.. Inc.; GKre,

any

■_

Stuart & Co. Inc.; Merrill Lynch, Pierce,
Eastman Dillon,-Union Securities &p

Beane.

Fenner

Co. and

White, Weld & Co. (jointly):

Ues Corp.; The
Co.

Equitable Securi-

First Boston Corp.; Harriman

Inc.; Kuhn/Loeb

& Co.

;

Ripley
•

Volume 185/Number 5626

The Commercial and Financial Chronicle

(1623) " 51
* Pepsi-Cola Mokan Bottlers,
March 20 it

was

Inc.

announced company,

sell 60,000 shares of

(4/8-15)

Reading Co.

plans to issue and

Bids

(par 50 cents). Price
$5 per share. Proceeds—To acquire and
operate select¬
ed Pepsi-Cola plants in the
Midwest. Office
Coffeyville, Kansas. Underwriter
G. F. Church & Co., St.
Louis, Mo. Offering—Expected between now and
April
15.
,
■
./ ■
'
—

—

(5/23)

and

Philadelphia Electric
Feb.

14 it

Co.

announced

was

plans to offer about

company

determined

600,000 shares of

common stock to its
stockholders about
the middle of the
year on a basis of one new share for
each 20 shares held.
Proceeds — For construction pro¬

Philadelphia'Electric
14, it

was

also

Co. /

•

(6/10)

received

ferred
in

stock.

than

addition

sell

announced company
of common stock

was

300,000

Electric Co. ;

1957.

April

Underwriter—Blyth & Co., Inc., San Francisco

May.

and '-New

York.
;

Principal Retail Plazas
Feb.

pected of
tures due

was

Canada, Ltd.

(Canada)
early registration is ex¬
$15,000,000 of subordinated deben¬

reported

issue of

that

Jan.

Proceeds—For expansion and working
capital.
Business— Operates
shopping centers. Underwriter —
Eastman Dillon, Union Securities &
of

issue.

Balance

to
:

•

Public Service Co. of Colorado
Oct. 8 it was reported
'

underwritten
.

(5/20)
-

company plans the issue andsale

loans and

for

new

Proceeds—To repay
construction. Underwriter—To

Expected to be received up to

March

Gas

;

•

was

\
a

new

Loeb & Co. and

rill

sell

Union Securities & Co.

1957

the

Dillon,

announced

plans to sell

that

issue

Jan.

mortgage bonds (company is authorized to issue
$25,000,000 additional principal amount). Proceeds—To
•

competitive
&

Co.

Underwriter—May be de'errnined by
bidders: Halsey, Stuart

-Radiation, Inc.
March
hbout

20
a

was

-.* /

•

reported

expected

month of about 213,000 shares of common
stock,

of which

approximately 183,000 shares

are

to be offered

the company late in May to its stockholders on a
l-for-3 basis and about 30,0005 shares are to be
sold for
aceount of certain stockholders.
Underwriters —
Loeb & Co., New
York, and

and capital investment program in
1957 is expected to require
up to

;

Vitro Stock Offer
Corp. of America is issu¬

ing to the holders of
for

tional

stock

share for each

common

at $16 per

178,646 shares of

common

one

held

its

rights to subscribe

record

addi¬

the

five

rate

April 2, 1957.
The subscription offer will
expibe
at

3:30

1957.

p.m.

The

(EST)

offering

April

being

16,
un¬

derwritten by a group of invest¬
ment firms
headed by Blyth &

Co.,

was

Inc.

JTie company, which is
engaged
in the production of uranium con¬

$7,000,000

excess

pected

available

rent

and

cash

company's

activities,

principally
Divisions

and

from

cur¬

carried

operating
several minor

seven

by
subsidiaries, include: design, en¬
gineering and construction man¬
agement;

engineering

struction

oil

and

con¬

refineries

and

natural

re¬

search.

the company

ended Dec. 31,1956

reported net sales of

through the chemical products and services of $40,688,181 compared with $29,759,797 in
processing of uranium ores at Salt
Net earnings were $617,515
Lake City, Utah, and other activi¬ 1955.
in 1956, after a special charge-of
ties, will use the proceeds of this'
centrates

financing to reduce bank borrow¬ $552,607 as compared with
ings. for
The
company's e^cpansion- earnings ol" $418,280 in 1955.
Digitized
FRASER

net

bank loans and for

new

The

Honorable

Ben¬

White

(S. S.)
it

was

Province of British Colum¬

long-term financing.

bia, announced that
was

filed

registration

April

3 with

the Securities and Exchange Com¬
mission covering an aggregate of

$45,000,000

principal

debenture

issues

mentalities

proposed

the

issues

amount
two

instru¬

Province.

are:

The

$25*000,000

sinking fund debentures due 1987
of British

mission,

Columbia

and

Power Com¬

$20,000,000

sinking

Underwriter—Drexel & Co., Phila¬

delphia, Pa.

1982

due

Pa¬

Railway Com¬

the

and

issues is

as to

and

the payment

interest

the

densely

such

the

use

areas

Vancouver

the proceeds

to repay outstanding bank loans
and for capital expenditures. The

Pacific
which

Eastern*

Great

presently

North Vancouver

Railway,
from

operates

north to Prince

Principal

and

interest

payable in United
expected

offering

settled

cities' of

Victoria, will

States

George,
the

bank

will

apply

loans

the

that

the

public

debenture

issues

Dawson

the

incurred
of

proceeds

of outstanding

repayment

construction

Dental Manufacturing Co.

dollars.
It

—

reported comDany is considering some

sinking fund calcu¬
lated to retire the entire issue bv
be

To fepay

Bids—Tentatively scheduled for July 30.

principal

will

—

Underwriter

•

underwritten by Morgan Stanley

nett, Premier and Minister of Fi¬

Proceeds

1987.

construction.

Halsey, Stuart & Co. Inc.; Eastman Dillon, Union Secu¬
& Co.; Kidder, Peabody & Co. and White, Weld
& Co.
(jointly); Lehman Brothers; The First Boston
Corp.; W. C. Langley & Co.; Harriman Ripley & Co. Inc.

of the debenture

maturity.

(7/30)
company

rities

Province of British Columbia and

syndicate.

Bids—Ex¬

Corp.

be determined by competitive bidding. Probable bidders:

will

;

Boston
May 16.

plans to issue soma
securities, probably about $20,000,000

senior

guaranteed unconditionally

have

First

announced

was

Issues registered with SEC to be

statement

For the year

additional

by endorsement
of

The

Each

Million Debentures

Co.;

of first mortgage bonds due

debentures

pany.

West Penn Power Co.

Dec. 27 it

stock

fund

pected to be received

cific Great Eastern

Plans Sale of $45

ratories

types

preferred

British Columbia

nance,

various

Securities

Dealer-

reported- company plans to issue and sell

gasoline and petro-chemical plants; and operation of labo¬
for

be determined by competitive
bidders:-Halsey, Stuart & Co. Inc.;
Incorporated and Baxter & Co. .(jointly);.
Merrill Lynch, Pierce, Fenner & Beane and Stone Sk
Webster Securities Corp. (jointly); Kidder, Peabody &
Co.; Equitable Securities Corp.; Eastman Dillon. Union

Probable

Co.

March

exr.

operations and amortization
depreciation ■; charges.- The

Underwriter—To

bidding.

•

Co.

company

gram.

Co.

Probable bidders: Halsey, Stuart

Bros. & Hutzler; Baxter & Co.; R.

12, Everett J. Booth by, President, announced that
expects to raise about $8,000,000 through
the sal** of first mortgage bonds in the Spring of 1957.
Proceeds—To reoay bank loans and for coristruction pro¬

Thorp Finance Corp.

Jan. 30 it

Pressprich

the

company

locally 10,000 additional shares

Blyth Underwrites

stock

Service

announced

1972, inclusive.

Dec.

expects to sell new
securities during 1957 to obtain
capital for its continuing
plant expansion. Underwriter
For any bonds, to be
determined by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and

•>

Kuhn,
Johnson, Lane, Space & Co.,

Savannah, Ga.

Vitro

was

(4/4)

^Washington Gas Light Co.,,(5/16)

Merrill Lynch, Pierce, Fenner & Beane
(jointly); Hemp¬
hill, Noyes & Co. and Drexel & Co.
(jointly); The First
Boston Corp.; Eastman
Dillon, Union Securities & Co.;
Kuhn, Loeb & Co., Blyth & Co., Inc<. and Lehman Bro¬
thers (jointly); Harriman
Ripley & Co. Inc. and Stone
& Webster Securities
Corp. (jointly).

•

registration

and

—

bidding.-'Probable

Inc.; The First Boston Corp;.

Co.

Co. Inc.; Salomon

Blair

stockholders).
Co., New York.

& Hutzler; Eastman Dillon, Union SecuCo.; Stone & Webster Securities Corp.; White,

will be received by this company on Apirl 4 for
purchase from it of $1,200,000 equipment trust cer¬
tificates dated April 15,. 1957 and due annually from

Bids—Expected to

common

this

common

the

reported company plans to issue and
about 217,000 additional shares of common
stock in

(probably first to

Co.

Bids

was

Texas Electric

first

retire bank loans.

issue

Power

Spring $22,000,000 through the
stock, plans also to sell in
$20,000,000 of debt securities. Probable bidders

Weld &

Allyn & Co. Inc. (jointly); Mer¬

Manager—Goldman, Sachs

late

additional

1958 to

Salomon Bros.

Tampa Electric Co.
18

rities &

plans

Bids—Tentatively expected

for bonds may include: Halsey, Stuart & Co. Inc.; Kuhn,
Loeb & Co. and American Securities Corp.
(jointly);

received

March

(jointly).

company

sale

the Fall

Virginian Ry.

company

(6/4)

announced company, in addition to. pro¬

was

raise

posal to

Co.

March 8 it

Co.

Lynch, Pierce, Fenner & Beane.
some time in
July.

by com¬
petitive bidding. Probable bidders: Halsey, Stuart & Co.*
Inc.; Blyth & Co./ Inc.; The First Boston Corp.; Harri¬
man
Ripley & Co. Inc.; Glore, Forgan & Co.; Kuhn, Loeb
& Co., Salomon Bros. & Hutzler
and Eastman

later

Virginia Electric &

Co.

$18,000,000 of first mortgage bonds. Proceeds
—To repay bank loans and; for new
construction.*Un¬
derwriter—rTo be determined by
competitive bidding.
Probable bidders: Halsey, Stuart & Co.
Inc.: Goldman,
Sachs & Co.; Stone & Webster Securities
Corp.; Kuhn,

determined

Puget Sound Power & Light Co.
Feb. 6, Frank
McLaughlin, President,

Pierce, Fenner & Beane.

reported

Power Co.

was

June 4.

&
18

Under¬

To be determined by competitive bidding. Probable bid¬
ders/Stone & Webster Securities Corp.; Merrill Lynch,

company

Machine Tool

Electric

stock.

common

reported company plans to issue and sell
1,000,000 shares of common stock (par $8). Proceeds—
About $22,000,000 for new construction. Underwriters—

was

Co.

Tampa

$30,000,000 initially
scheduled for 1956) will be issued and sold
by the com¬
pany, during 1957.. Proceeds —r To repay bank loans
(amounting to $25,000,000 at Dec. 31, 1956) and for new
Underwriter—To

Eleririo It

Feb. 15 it

may

sell about

Public Service Co. of
Indiana, Inc.
Feb. 11 it was announced that it is
expected that
series of first mortgage bonds
(about

construction.

that

announced

reported company may do some equity
financing in April (first to stockholders). Underwriters—
Merrill Lynch, Pierce, Fenner & Beane and
Dean Witter

May 20.

400,000 shares of

Prob¬
Kidder, Peabody & Co. and Merrill Lynch,
Pierce, Fenner & Beane (jointly); Eastman Dillon,
Union Securities & Co. and Smith, Barney & Co. (joint¬
ly); Lehman Brothers; Blyth & Co., Inc. Bids—Tenta¬
tively scheduled to be received on Oct. 1.
>;

September, 1957.

March 11

(EDT)

added

announced

Sundstrand

able bidders:

the company's present in¬
bonds and probably a pre¬
that the company will
require

California

was

(10/1)

writer—To be determined by competitive bidding.

Edison Co.

repay

determined by competitive
bidding.. Probable bidders:
Halsey, Stuart & Co. Inc.; Kidder, Peabody & Co. and
White, Weld & Co. (jointly); The First Boston
Corp.;
Blyth & Co.,, Inc. and Smith, Barney & Co.
(jointly);
Lehman Brothers; Harriman
Ripley & Co. Inc. Bids—
noon

Oct.

Light Co.

also announced company plans to offer

was

the public

received

Power &

March 12 it

for

bank loans and for new construction. Un¬
derwriter—To be determined
by competitive bidding.
Probable bidders:
Halsey, Stuart & Co. Inc.; Blyth &
Co., Inc. and Merrill Lynch, Pierce, Fenner & Beane
(jointly); White, Weld & Co. and Eastman
Dillon, Union
Securities & Co. (jointly)/
Offering—Expected in August

$30,000,000 first mortgage bonds.

bank

Registration—Planned

Utah

plans to issue and
about $35,000,000 of first
mortgage bonds. Proceeds

—To

Co., New York, for

two-thirds

Canada.

18.

(A^ total of $70,000,000

sell

stock.

June

scheduled to be

$180,000,000 of new money in 1957 and 1958,
to the $37,500,000 bond issue
of February,

Southern

1932 and 1,500,000 shares common
stock to
be sold in units of
$50 of debentures and five shares of

about

$70,-

Corp. and Dean Witter & Co.
(jointly); Kuhn, Loeb &
Co. (2) For any preferred stock:
May be The First Bos¬
ton Corp. and Dean Witter &
Co. (jointly).

-*./

(6/18)
of

be raised in 1957.)
Underwriters—(1) For any bonds, to be determined by
competitive bidding. Probaible bidders
may include: Hal¬
sey, Stuart & Co. Inc.; Blyth & Co.
Inc.; The First Boston

plans to issue and

and sale

-for the balance of this
year
tention is to issue additional

(par $9.50) about June 10 on a l-for-5
basis;
rights to expire about July 1. Underwriting—To be on a
negotiated basis.:
*
'
:
'
/
Portland General

issue

Quinton, President,

was reported
company plans offering to com¬
stockholders of 225,976 shares of additional com¬

March

the

part of May.

Southern California
March 20, Harold

stock

mon

latter

March 26 it
mon

& Telegraph Co.

25 directors authorized

(jointly).

Portland Gas & Coke Co.

ex¬

000,000 of 29-year debentures due June
1, 1986. Proceeds
—For construction
program. Underwriter—To be deter¬
mined by competitive
bidding. Probable bidders: Halsey,
Stuart & Co.
Inc.; Morgan Stanley & Co. Bids—Expected

by competitive bidding. Prob¬
able bidders: Halsey, Stuart & Co.
inc.; White, Weld &
Co.; The First Boston Corp.;
Morga^i Stanley & Co. and
Drexel & Co.

Southern Bell Telephone

Feb.

announced

about

—

bidding. Probable bidders:
Inc.; The First Boston Corp^ and
(jointly); Kidder, Peabody & Co.;

company plans to issue™
and sell in the second half of 1957
additional first mort¬
gage bonds.
Proceeds—For expansion program. Under¬
writer—To be determined

(10/1)
was announced company plans to issue and
$15,000,000 of first mortgage bonds due 1987.
Proceeds
To repay bank loans and for construction
program.
Underwriter—To be determined by competi¬
tive, bidding. Probable bidders: Halsey, Stuart & Co.
Inc.; The First Boston Corp. and Blyth & Co., Inc.
(jointly); Salomon Bros. & Hutzler; Eastman Dillon,
Union Securities & Co. and Smith, Barney & Co. (joint¬
ly); Lehman Brothers and Bear, Stearns & Co. (jointly);
White, Weld & Co. and Stone & Webster Securities Corp.
(jointly); Kidder, Peabody & Co. -Bids — Tentatively
sell

Co.

Brothers
Eastman Dillon, Union
Securities & Co. -Bids—Not
pected to be received until next Fall.

—

Feb.

•

Utah Power & Light Co.

March 12 it

competitive
&

Lehman

Dealer-Managers
Drexel & Co.,
Philadelphia,
Pa., and Morgan Stanley & Co., New
York, N. Y, / ■,

gram.

Halsey, Stuart

sell

during 1957.

Jan.

generally some additional common stock
Price—Of preferred, $102 per share. Pro¬
ceeds—For working capital and general corporate pur-'
poses. Underwriters—Emch & Co. and The Marshall Co.,
both of Milwaukee, Wis.

expected

South Carolina Electric & Gas
Co.
14 it was
reported company plans to issue and sell
$10,000,000 of first mortgage bonds. Underwriter—To
be

are

to be received by this
company on
May 23 for the purchase from it of
$2,475,000 equipment
trust
certificates, due semi-annually, from July 1, 1957,
to Jan.
1, 1972, inclusive.
Probable bidders:
Halsey,
Stuart & Co.
Inc.; Salomon Bros. & Hutzler.

stock

common

Creek

for

mainly

north

extensions

and

Fort

St.

the

will be made later this month by a
nation-wide group of investment

John.

banking firms managed jointly by

United States of Province of Brit¬

The

last

public

sale

Morgan Stanley & Co., Harris &

ish

Partners Limited, Inc., and

June, 1956 when three instrumen¬

Bros.

& Denton,

The

Power

a^ea

the

power

Columbia

obligations

was

which
a

large

Province, excluding

$40,000,000

conditionally
Province.

total

debentures

un¬

the

talities of the Province sold

Inc.

Commission

supplies electric

Burns

guaranteed

The Commercial and Financial Chronicle

(1624)

James W. Means With

Ga. — James W.
appointed a Vice-

Mutual Funds

Fund's
fied

By ROBERT R. RICH

Means has been

among

holders

report to the

accompanying

secutive

the

distribution

fund's

the

by purchasing new issues

and

Gas

109th

had

about 63%

the

balance

good

its

resources

invested in

preferred

grade

The fund
common

He stated that since the beginning of this year, increases were

in selected

made

Means

their

favorable

tions

were

electric utility, oil and

earnings

Moderate reduc¬

auto and building stocks, where

1957

earnings prospects seemed less favorable than for the stocks pur¬

Southeastern

First

President

chased.

Corporation and will be in charge
of
the
Atlanta
office
in
the
formerly
cer

the

this group in the desired
proportion relative to other investments, Mr. Morgan reported.

"Since 1894"

Calvin

Bullock,

funds with

mutual

Canada General
of

assets

Fund Assets

over

"Since

entitled

MUTUAL

the

some

1894."

and

ups

Canada

of
during

Feb.

points out that there are
pitfalls in buying any common
stocks, which can be minimized

ond

by seeking expert advice.
"The principle of seeking

both

A)V
Nalknal

booklet

Divcde/ut

doctor

pro¬

of them.

need

WRITE FOR

likewise

FREE INFORMATION

NATIONAL SECURITIES &

careless

money

cash dividend

dend

invests

since

Crash

the

have

MUTUAL

FUND, INC.

dis¬

Atomic

Development Securities Co., Inc.

1033 THIRTIETH

STREET, N. W., WASHINGTON 7, D. C.

Dept. C

Tel.

FEderal 3-1000

toward

many

first quarter of 1957 were reported

was

by Roy R. Coffin, President. Sales

areas

for the month amounted to

1956.

for

total

For

the

March

766,
in

earnings

87%

$93,409

increase

the

three

months

the

given
Gross

ended

29, 1957, sales were $407,52%, over the $266,603
period last year.

than

National

the

shares)

Fund

of about

tion against 3%

and

these

economy

mutual fund

common

investing

stocks. For copy

prospectus-booklet of
facts about the Fund, mail
this coupon today.

able

Name.

than

bonds

Telephone: WHitehall 4-2220

KING MERRITT & COMPANY, INC.
An International

Organization

INC.

preferred
.

and

•

industrial

and

for

accounted

2.06%,
,

Government

Mutual

6.30%.

.OFFICES

April /, 1957

IN PRINCIPAL CITIES

Fund

67 cents and

with

company

grade common stocks, Hugh Buliock> president, told the share¬
holders, pointing out that, "the
result of this policy is reflected in
your

company's recent record of
"resistance to the de-

stability and
in

common

which

feature

prices, a
considerable

stock

conservative
periods of mar-

importance to many
investors during
ket uncertainty."

r.r

At the end of February, approx-

of the assets of Na-

tion-Wide at market values were

held in bonds and preferred

Common

stocks

stocks.

accounted

for

55.5%, with largest commitments
-n
th'e utilities and petroleum
in
the
groups.

per

equivalent

This

compares

per

with

share, on

1956, and $5,181,016.31, or

per

share,
shares

1956,

these

respective

March

outstanding
dates.

gains dividend of $0.50
was

re¬

31,

A- capital
per

paid by the fund on Dec; 21,

1956. '

International Fund
Assets Rise To

284,083 shares

$5,728,085.95, or $21
Dec. 31,

Inc.

March 31, 1957

$5,890,043.68

$21.85

Specializing in Mutual Funds

Elizabeth 3, N. J.
t

for

The

imately 42%
for

accounted

holdings,

accounted

Johnston

AND COMPANY,

$25.94

market
invest$9,291,-

their cost.

stocks

ports net assets

HUGH W. LONG

was

$16,036,779,

outstanding.

cents

net securities prof-

compared

chne

each

1957, and the
the company's

was

stock

common

value

year ago.

value

asset

rate of

increase
share paid

28,

ments
687

pay-

per

period

net

the

share,

12Vi> cents

same

Feb.

$20.73

its,

1956 were

investment income and

cents from

during
net

(

Address..

share
from

dividend,

and

per

the

New

[a a

oavable
payable

dividend
dividend,

April 1, amounted to 15 cents per
share, derived from net invest¬
ment income. Total payments per

April 1, is from accumulated
income

cents

stocks

BROAD STREET, NEW YORK 4

The

shareholders.

continued to adbere to its policy of "balance" investment, including in its port¬
fobo carefully selected bonds and
preferred stocks as well as high-

89.27%

bal-

68 cents, respectively, in 1955.

Common

Inc.,

managed

investment

INVESTORS
Main Office

fund

Tho
The

hnirWc
holders.

closed-endcompany managed by
Calvin Bullock, amounted to $16,426,422 on Feb. 28, 1957, according to the letter accompanying the
company's 106th consecutive quarterly dividend, now being sent to

Moving

Company,

Calvill BuUock, were $26,253,545,
as
of Feb 28, 1957, according to
the letter accompanying the company's 98th'consecutive quarterly
dividend, now being sent to share-

Ura-

Carriers

General Corporation, a

the

Peach

Axle,

RR., Southern

Air Line

mutual

anced

companies, Pres-

assets

net

Spring

Rockwell

Securities

cer-

$16.4 Million

Total

Federal-Mogul-Bower Bear-

Total net assets of Nation-Wide

Carriers & General Corp.
At

period

Bonds, Preferred

producers^ including

and

addi-

portfolio

six-month

the

42% Assets In

spite of

that shares of

Dome

share of

...

sec¬

through

that

for

Natioii-Wicle Has

held,

Uranium Mines, Ltd.,
Mines, Ltd. and

The

our

still

are

fruit

major

above

($135,000

nium, still appear undervalued for
the long term.

YOUR share

in Great Northern Rail-

united

Seaboard

Uranium

East

ton

of American business

said

their, associated

Announcing

bonds

Steers

Pronto

over

FUNDAMENTAL

a
50%

rise of 14%

are

profit Railway, and Universal Products,

acquisition

Can-Met

can own

Development

He mentioned

against
capital
to 8%, a

Pitts-

largest

Illinois Central. Public Serv-

Among

Can-Met

cost

tam of

the

Pittsburgh Steel head the list
preferreds. The fund's larg¬
positions among its 29 common

and

is maintaining
a substantially unchanged position
in shares of the leading Canadian,
uranium
producing
companies."

Product

S., 24%

are

of 33
est

Steers, Jr., President

(285,000

the

net

You

Mr.

Among
the
comparisons
is an increase of 10% for

Co.

and

the

28.

this sale, "the Fund

comparable
the United States during

stocks. Amer¬

Foreign Power and

holdings
among the 12 bonds, while Gen¬
eral Tire & Rubber, Kaiser Steel

however).

•

including bonds, pre-.

stocks

Atomic

expenditures compared
gain of 8% in Industrial Produc¬

the

of Canada's

areas

Keystone's 10 funds, which

ice Electric & Gas> Phelps Dodge

the

Continuing
includes
figures

compared

ago. r;

IJranium
Stocks'Low
uranium stocks
low

end."

same

which

greater

1956.

over

March,

$8.88

months

way,

Ltd.

of the companies

showing that the rate of gain in

$175,-

Feb.

cents per share

common

ton

company

Algom

Growth"

the

new

gains

ferred and
ican

Byrne,

reported

capital

74 issues'

ings,

tion headed "Canada's

Philadelphia
and

dend

Record

March

William

net

A feature of the report

for

Consolidated Denison Mines, Ltd.,

Philadelphia Fund Sales
shares

W. Meader,
charge of re¬

were

complete 'plowback^df

work

101
MtOSPECTUS

GET THE FACTS AND FKEE

and

Fund

or-i

sale of all its common
Explorations,

advan¬

unusual

in which the fund has investments

new

John

are

previously

stock

earnings. Not only is net divi¬
income from portfolio com¬
panies reinvested, but also the re¬

substantially over $125,from investment income
over
$60,000,000 from secu¬

sales

the

Fund, Inc. stated that the fund had

policy shareholders
the

number

have total assets of more than:
$316 million.
V
Keystone K-l has a portfolio of

tions

com¬

tained

the

for

six

among

Mutual

re¬

000,000

ATOMIC

and

record

Atomic Fund Sees

shareholders,

income

net

accorded

tage of

rity profits.

DEVELOPMENT

tributed

ATOMIC SCIENCE

through

its

"Under this
are

regular divi¬

companies

such

1929,

invest in

years

underPioneer

of $20,000,000.

excess

and

serve

diversicompany
with

officers

Newton

ments:

date, the booklet points out.

the

letter

that the fund accumulates and

him."

his

months,

Total nety
assets of this Keystone Income
Fund rose to a record high of $43.7
million. K-l ranks fourth in size

open-end,

"Chronicle"

Henry T. Vance, President, notes

under Calvin Bul¬

company

com¬

with net assets of $65,829,830

en¬

it—arid

preserve

it work for

figures

Feb. 29 of last year, amount¬
ing to $11.95 per share on the
5,507,627 shares then outstanding.

lock management has ever omitted

Broadway, New York 5, N. Y.

completed

quarter-end

often

his

value

$8.95

highs were reached
shares outstanding, at 6,-

pare

hard

—

the

investment

fied

New

The

the

Yet.

belief in

beyond

deavors

make

RESEARCH CORPORATION
Established 1930

120

that

make

DEALER OR

money

man—who works

average

FOLDER AND PROSPECTUS TO

Investing

profession.

set

the

holders.

consults
a
when he has

lawyer

will
principal

and

for

Fund, Inc.,

sec¬

003,835, and in number of share¬

man's life," the

"He

says.
or

Limited

Fund

distribution of 41

investment ad-

as an

Formation of the

28, 1957, the close of the

share.

to major things that

the average

cross

YOUR INVESTMENT

writer

quarter of the fund's present
fiscal year, equal to $12.76 per

fessional advice is well established
with respect

General

share to

Adjusted

broker-dealer with

manager

was

reports net assets of $76,594,473

1956 and

FUND

cents

Treasurer.

downs

various well-known stocks

INVESTMENT

sion, the new firm

search,

$76.5 Million

shows

ending Feb. 23.,
Keystone -K-l.
paid a semi-annual dividend of 24

Securities and Exchange Gommis-

Vice-President

$400,000,000,
has
distributed
a
booklet giving a brief background
of
the
firm
since its founding,

Registered
viser and

ganization

managers

last

last August, the per share net as?';

Other

bond

the

Georgia in charge
department.

the

Benzing, President,

was an

Trust

regular distributions of
over

of 21,726 shareholders.

assets

offi¬
Company of

Co. Prior thereto he

also reduced moderately at higher prices to

were

keep Wellington Fund's investment in

Courts &

partner

Steel stocks

Means was

Candler Building. Mr.

■'"!/J*??"S-"■-f-''

•;L.:

for

Management, Inc., with offices at
67 Wall Street, New York City,
has been announced by Wayne R.

drug common stocks for

dividend prospects.

made in certain

return

5.7%, according to the semi¬
report for the six months'

was

Formation of Fund Research and

ments, Mr. Morgan stated.
;

and

cents

Management Formed

un¬

govern-

annual

1
stocks, with

bonds and

stocks,

rate

ff^ton^LnC™meKundJ?~,based.
the Feb. 28 net asset value of

Fund Research &

March

annual

backlog of senior securities

reduced.

were

The

Stores 8.1%.

and

which

con¬

of high grade corporate bonds at

stocks

10.1%

3yS »)./ 1 CFCCllt

Tirhi/^Vi

$8.47

usually attractive yields. Low yielding convertible bonds and mis¬
cellaneous preferred

largest

quarterly dividend, Walter L. Morgan, President, stated

that the fund continued to increase its

r»

industry classi-

the

-T llllil IYIOtt

than 100 issues

fications,

ities

than 200,000 Wellington Fund share¬

p\lrwl

diversi-

were

of securities in

Oil

General

Canada

28.

19.7%, Forest
Products 12%, Mining 10.2%, Util-

Wellington Builds Up Bond Holdings
In

Feb.

investments

were:

James

Thursday, April 4, 1957

io„?as?^heSrate proms in Keystone Income

First Southeastern
ATLANTA,

$15.5 Million
Net

assets

International Re¬

Fund, Inc. totaled $15,571,945 at the close of the first quarter

sources

ended Feb. 28,

1957 compared with

$10,425,259 at.; the,, close, of the
same period a
year ago. Coleman
W....Morton,;, fund ,President, re¬
ported
On

to shareholders,
Feb.

28,

1957, the

;

company

Volume

185

Number

5626

The Commercial and Financial
Chronicle

(1625)
paid

dividend

physical shape and is strongly
capitalized. While the 1956 capital
outlay was a large one such calls on the road's

of 3 .cents a share
distribution of 33 cents per

share from realized

moderate

its.

million

security prof¬
distribution, net as¬

After the

value

set

per

$4.40

was

Feb.

28,

last,

$4.26

a year ago on the 2,447,189
shares then outstanding.
Mr. Morton stated that the fund

Seaboard Air Line
-

'*■

continued

with in

being

fullyj invested

of 92%

excess

of its assets

represented

by > common
' :
*■'; In the field of oil and natural

■stocks,

the

gas,

acquired

company

com¬

stock

mon

positions in Trinidad
Development Com¬
Limited, International Pe¬

Petroleum
pany,

troleum

Company,

Limited and
convertible debentures in San Ja¬
cinto Petroleum

ing

the

ended

Feb.

28,
The company's coal interests

1957.

increased

were

mitments
vaal

with

initial

Henderson's

Estates,

Limited,

Consolidated

Land

com¬

Trans¬

the

electric

pro¬

hold¬

new

ings acquired

during the quarter
Interlake Iron Corporation,

were

Vanadium

Corporation of Amer¬
ica, The Rio Tinto Company, Lim¬
ited and Furness, Withy and Com¬
pany.

Millard Daggett With
Schwabacher & Co.
SAN

FRANCISCO, Calif.—Willaid Daggett, with 30 years exj*uience in the investment securi-

operations

the

several

....

Seaboard

lends

greater

While

this

last year

With these exceptions the revenue index of 130
was bettered
only by the Great Northern

Seaboard

Atlantic

Air Line

130

129

1955

123

1954—,

120

118

123

127

1953

—

1952—

126

Southern

;

Coast L.

1956

for the

;

Illinois

Railway -'*--,^

*!'■->

121

William C. Wilkes

also

$7,985,922

119

There

111

121

•

observed

wholesome

was a

that

the

1956

120

ing

122

since almost 60%

one

increase

revenue

of this

increase,

$4,710,922, according to the road's 1956 report, was derived from
business.
The same source placed the revenue
gain
attributable to the freight rate increase of March 1956 and to the
additional

later passenger fare increase at an estimated
$3,285,000.
that the major part of the latter

Assuming
figure is represented by the
freight rate increase, which was an allowable 6% except for
certain "hold-downs" and,
allowing for the fact that it was effec¬
tive for only about 80% of the
year, the actual freight rate in¬
received

have worked out at only about 3% to
4% for the Seaboard, giving due weight also to the effect of both
the Birmingham steel "strike and the nationwide steel
strike in

restricting

appears to

revenue

gains.

This is symptomatic of the Southern
territory and explains
why the roads in this area have been reluctant and tardy in
joining in applications for freight rate increases. The infection of

low-rate competition from

Mississippi River barges permeates the
territory for one thing. *'It affects directly the Illinois Central
and the Gulf, Mobile & Ohio but, as these roads
adjust their rates
downward to meet this competition, roads in
adjacent areas have
to make similar
adjustments on certain hauls where neighboring
roads compete.
However, the easternmost Seaboard is naturally
the least affected, but is not
wholly immune.
growth
of

1-59

the

Seaboard

new-industries

expansion

others

suddenly
Mrs.

April

while he and

Wilkes were

Florida.

His

Wilkes,

well-known

age

vacation

57.

was

Mr.

and

Cornell

graduation

upon

University
joined

the

Guaranty Company of New York.
He became affiliated with

Kidder,

Peabody & Co., in 1934, as man¬
of research, and was made
a general partner in 1941. He was
formerly a director of the Man¬
ager

hattan
Mr.

Life

Insurance

Wilkes

Company.

friend
Dr

over

the

was

30 years was a close

program's initiator,

Frank N. D. Buchman.

Smith

C.
are

Kenny
now

and

John

connected

with

Co.

vestment

the

period

mark

can

It is

most

capable

analysts that their

ords
are
replete with
that have been made at

another.

down

fact that

said

in¬
rec¬

mistakes

time

one

that

some

of the most
renowned investment

bankers

and

died with

industrial

some

pretty sorry heir¬

looms in their lock
of

of the most

one

market

analysts

whose

tycoons

box.

know

highly respected
in

record, for

this

country

forecasting has

placed him at the forefront of the
parade during the past five years,
but prior to
that time was
so
wrong that you could not believe
a

could

man

errors

I have

make

many

forecasting.
able investment

seen

make errors in

their

judgment

men

over

the

when they looked back
performance they,

years and
on

past

themselves, could

the road's line.
/

■

Thus in spite of some let-down in
paperboard and a decline
in the movement of citrus fruits as a result of a
greater degree
of local canning and
concentration, the revenue outlook continues
bright. The road states that it expects a pick-up in carloadings by

mid-summer since inventories in its territory have become substan¬

tially reduced. The unfavorable factor is the general complaint of
rising expenses. While total revenues of the Seaboard rose some
5.2% in 1956, operating expenses were up 8.3% and, due
primarily
to the run-off of the tax-deferment element of
amortization in
of

for

1956

normal
showed

This

$1.2

decline

per

$4.23

pre-tax gap is the main reason for the
$400,000 in net income which placed 1956 net
against $4.53 in 1955, although fixed charges
The $156,000 increase in this item for the
year

was

the result of

net

increase of

$1,745,000 reduction

equipment debt

serial maturities
of the

was

$4,336,000 in equipment debt

bonded

debt. : The

increase

in spite of the repayment of
$6,869,000 of

during the

year

and including those due

Jan. 1

current year.

penses.

share
in

only

coincidental

that

there

was

also

the
ex¬

cent

off in the tax deferral due to accelerated amortiza¬

run

excess

normal

depreciation. This factor amounted to
only 91 cents per share last year as against $1.21 in 1955. Tf
there had been no such
decline, the tax saving admittedly would
have

offset the

rise in

other

expenses, with the result of about
share earnings as for 1955. The realistic way to look
it, however, is that the drop in 1956 net was due to operating

the

same

per

about

which

the

run-off

solution
of

the

must

be found.
Nothing can be
deferral, for the decline in
vanishing point. The tax deferral

tax

this year will drop to 76 cents per share.
The weakness in Seaboard stock is ascrioed

ap¬

Like these

two

roads, the Seaboard is in excellent

THEY

ARE

When they see
they are on the
losing side and the odds are un¬
favorable, they cut bait and get
out. They, too, get
"whip sawed"
in

once

while but

reverses.

they expect

is part of the game.

If you can't take

some

losses,

you

certainly don't deserve to achieve
some
profits. Life isn't built so
that the gains are all one-sided.

opinion.

I made

a
check-up of the current
status of the stock she
wished to

sell.

The

earnings

and

outlook

favorable but the stock had
advanced substantially.
The one
she wished to buy was a common
were

stock of high
quality of one of the
premier industrial companies in
this country that had been de¬
pressed during the past
year but
that should recover in time.
The

trade looked

also

logical, income-wise,

security and quality. We

made the "switch." Three
months
later the stock she sold
advanced

20%

more and the one she
pur¬
chased continued its decline
about
5%.'

The other
day she said to me,
."Our timing was certainly bad on
that 'switch,' wasn't it?" I didn't
argue the matter.
This customer
knows that you can't hit the
top
on a sale and buy at the
bottom when you
buy. We didn't

make

the

What does this all lead up to? If
you are

selling securities it

first

all that you

means

should have

the correct mental attitude. Don't
let your customers put you on the

spot when it

investing.
then

try

comes

trading

mistakes

and

made

are

correct

them

service

the

premise that I
the

foregoing

Some losses

are

have outlined

brief

remarks.

inevitable if you

over

They

help

good

bit possibly if you

services

there

in
investing, with
conceivable source of in¬

curities

and

times

unrealized losses.

they

have

They have prof¬

can

the

you

rich.

magic formula
the target trading in

hitting

time, then all

would be rich.

You

help

can

obtain

better

their

customers

your

income,
capital

you

can

over

the

years, and sometimes you can as¬
sist them in building
up their as¬
sets by sound long-term

investing

growing companies, but the
talk this kind of horse

sooner you
sense

over

they will

with

them, the better

able

work

with

you.

P.S.—If you think* your record
has

been

despair,

sorry

you

sometimes, don't

have plenty of com¬
are the boast

pany.

Market profits

of the

uninitiated; the experienced

investor knows better.

Westheimer Adds
(Special to The Financial Chronicle)

CINCINNATI, Ohio—Jerome A.

experts

formation at their command. They
take actual losses on portfolio se¬

was

stocks most of the
of

use

properly and don't

expect them to make
for

securities which you own.
The
Mutual Funds have losses and they
every

the

them

are handling,
supervising, and in¬
vesting in a diversified group of

are

because

the years and the best
can't hit the too selling
and the bottom
buying.
of

but

don't go on the defensive about it.
The only customer that is worth¬
while is one that will begin with

"switch"

a better deal if she
had waited to
sell A and buy B. But who
knows
these things. I have subscribed to
about every reputable investment

preserve

Your Customers

Smith

now

with

connected

Westheimer & Company, 322 Wal¬
nut Street, members of the New
York and Cincinnati Stock. Ex¬

changes.

its, too.
Here's
ferent

off

ago

owns

stocks.

these

example.

that

account

largely to

prehension over future of the $2.50 dividend rate, since this rep¬
resents a "pay-out" ratio of 58% of 1956
earnings. This, of course,
is not an exorbitant ratio and is matched
among the upper Quality
rails by the pay-out rates of the Great Northern and
Atchison,
for instance.

THEY TRY TO BE RIGHT MORE

Thus the 30 cent per share decline in the net income of
Seaboard in 1956 was due to a disproportionate increase in

tion

million

increased.

against

other

expenses

almost

also

the

another.
She likes to
certain ideas of her own
(some people want it this
way),
then she checks with

lady was looking for a short-term
profit, but still it would have been

trading
professional specula¬

and

they have made errors
too—the (only difference between

depreciation, the Federal income tax accrual
an
increase, albeit a small one, amounting to

$214,000 or 4% cents per share. The large factor,
hand, was the $9.2 million increase in operating
against only an $8 million gain in revenues.

buy

initiate

accounts

tors

They also limit losses.

and

eighth

THAN

site for

DUTTON

not believe they
could have been so far
wrong.
I
have seen a good many

WRONG.

for

Reynolds & Co., 425 Montgomery
Street. Mr. Smith was previously
with York

fields,; including'lum¬

check

you

book.

OFTEN

this factor will continue to the

FRANCISCO, Calif.—

This

your

records

buying and sell¬

over

of United Aircraft and

done

(Special to The Financial Chronicle)

Dennis

there.

these experts in trading in stocks
and the amateur is that the
pros
EXPECT TO BE WRONG BUT

Joins Reynolds Staff
SAN

located

mill products, bakery goods

conditions for

•

the

perfect

comes

securities

<fertilizer; naval stores, *
and fresh vegetable packing.
It is al^o stated in the road's 1956 report
that, in addition to the
foregoing, plant sites have been acquired by General Portland
Cement, Lehigh Portland Cement, the Pratt & Whitney Division

per

widely known
for his active participation in the
program of Moral Re-Armament
and for

in, 1956 and the

already

economist,
investment
banker
and
broker,
was a partner of
Kidder, Peabody
& Co., New York City.
He attended

evidenced

its lines

are

when it

123

;

JOHN

MISTAKES!

115

108

By
'v

!.• 1215 3f

116

110

121 /: H? *

132

Region

117

excess

William C. Wilkes passed away

•

Southern

Central

c';.

122
1

sites for the construction of mills

Exchanges.

this

Sea¬

large brewery at Tampa. Also
the Mead Corporation and Bo water
Paper Co., Ltd. have acquired

Montgomery

$4.9 million year-to-year de-

reaffirmatiqn of the $2.50 dividend rate by the
payment of 6214 cents
per share for the first quarter of
this year and
may be taken as a "straw in the
wind."
The market has
viewed it so only to a limited
degree, however, but it may well
prove conclusions that a dividend
reduction is in order are
pre¬
mature.
\

years.

paper

Street, members of the New York

caused

135, the 132 of
the Nickel Plate and the 131 of the Kansas
City Southern. The
Seaboard, on the other hand, led the Southern region as shown
by the following:

industries represent well diversified
ber and lumber
products, steel fabrication,'

and Pacific Coast Stock

the

which

These

associated with the firm of Schwa¬
bacher & Co., -100

should

last year's $29
rolling stock, the purchase
of

board

undertaking

banks, trust
companies, - insurance companies
and private
investors, has become

average as 100, the Sea¬
leaders, excepting, of course, the three
enjoyed an extraordinary revenue gain
due to the sharp increase in export coal movement.
,•

Continued

ties business serving

70%

year"end working capital and the
carry-over of cars
still to be delivered will have further
impact. There has nevertheless been a

;
:

T^e 1956 capital outlay

;

board stands out with the

Pocahontas roads

establishment

Daggett

road's

Willard

Almost

run.

the market action of the

months.

increase in revenues last year as
compared with the 4.4%
increase of the Class
.I total may again have, given some pause to
those yyho have been enthusiastic over the
growth character of
the Seaboard, there is much
greater encouragement in the outstand-.
ing upward revenue trend of this road." As measured
by the
usual trend index based on the 1947-49

crease

...

1956

Explora¬

power

duced in Brazil. Other

longer

more
gradual if it had not
been for the fact that the
road wanted to take
advantage of fast
on
the cost of equipment
ordered before the 1955
year-end. This meant
picking up a large "tab" in 1956, and the
similar bill for the current
year will also be a
large one since
freight cars on order still total about
$28 million.
•

5.2%

Transvaal

and

Company, Limited and Wankie Colliery Company, Limited.
The company's first direct in¬
terest in hydroelectric power is its
ownership of Brazilian Traction,
Light and Power Company. This
concern
generates approximately
of

past

tion

60%

study

encouragement than a backward look
road's stock over the

Corporation dur¬

quarter

the

amortization

with

compared

cash

capital expenditure was for
of which might have
been at least

the 3,538,819 shares outstanding as
of

net invest¬

income

ment

and

from

the

The

income

securities.
the

phoned

lady
me

and

have

about

With H. L. Jamiesoe

dif¬

(Special to The Financial Chronicle)

investor lives

produced

Several

months

Question
asked

thought she should sell

one

tele¬

gtock

SAN
J.

DIEGO,

Thomas

Jamieson

Calif.
now.

—

with

Co., Inc? 2144

Boulevard.

Harvey
H.

El Cajon

Financial Chronicle

The Commercial and

Thursday, April 4, 1957

(1626)

£4

The following

Indications of Current

latest week
week

Business Activity
Latest

steel

Indicated

Week

STEEL INSTITUTE:
operations (percent of capacity)
AND

IRON

AMERICAN

Week

Ago

*2,364,000

§2,344,000

.——-—.Apr.

castings (net tons).

97.7

BUILDING

2,406,00c

2,411,000

Total

oil

and

stills—daily average (bbls.)
Mar. 22
(bbls.)
Mar.22
Kerosene output (bbls.)
?lar'
Distillate fuel oil output (bbls.)
Mar. 22
Residual fuel oil output (bbls.)
——
Mar. 22
Stocks at refineries, bulk terminals, In transit, in pipe linesFinished and unfinished gasoline (bbls.) at
Mar. 22
Kerosene (bbls.) at
-Mar. 22
Distillate fuel oil (bbls.) at
Mar. 22
Residual fuel oil (bbls.) at—
Mar. 22

Crude

runs

7,798,600

7,567,200

7,163,265

8,098,000
26,084,000

7,795,000

7,970,000

25,673,000

25,788,000

2,265,000

2,401,000

2,318,000

2,533,000

12,855,000

13,646,000

13,858.000

12,321,00c

,8,3C5,000

8,527,000

8,651,000

8,628,000

205,589,000

205,521,000
19,978,000
(77,603,000

19,701,000

21,723,000

17,710,000

79,599,000

87,738,000

65,912,001
34,047.00C

36,283,000

36,886,000

35,772,000

626,636

697,248

615,287

655,064

Commercial

;

METAL PRICES

(E.

Educational

Lead

Louis)

(St.

tin

utilities

227,774,000

109,806,000

214,266,000

129,030,000

75.598,000

158,874,000

Public

98,744,000

34,208,000

55,392,000

Mar. 23
Mar. 23

10,260,000

*10,225,000

9,850,000

9,961,000

407,000

445,000

491,000

496,000

—Mar. 23

113

Other

construction

11,694,000

100

107

t
,

11,723,000

11,791,000

10,992,000

|318

284

263

290

5.663c

Mar. 26

$64.56

$62.90

Mar. 26

$45.83

$48.17

$52.17

$52.50

Mar. 27
—Mar. 27
Mar. 27

31.425c

31.575c

31.325c

46.600c

29.100c

29.125c

29.650c

47.525c

16.000c

V 16.000c

16.000c

Mar. 27
Mar. 27
Mar. 27
-Mar. 27
Mar. 27

15.800c

15.800e

15.800c

Group

14.000c

13.500c

25.000c

23.196c

101.000c

99.750c

98.125c

S9.125c

91.55

90.79

93.29

96.38

106.92

101.47

110.34

89.36

99.36

108.88

96.85

96.69

99.38

89.92

89.09

101.9-

95.47

95.32

95.47

105.69

Total

2
2

97.00

96.85

96.69

107.44

Private

107.62

Public

3.21

3.26

3.96

3.98

V -'

3.34

3.67

3.66

3.15

3.79

3.80

3.79

3.23

3.96

3.98

4.42

4.48

4.05

4.04

3.95
'

4.04

•'

3.94

3.95

3.88

3.89

Apr.

MOODY'S COMMODITY INDEX

408.7

(tons)

of activity
1
Unfilled orders (tons) at end of period,

omitted):

ACCOUNT

FOR

Cottonseed—

412.1

416.7

255,749

245,909

271,210

288,531

262,293

285,966

408,010

443,293

370,885

554,885

Mar. 29

110.72

Other transactions initiated

Mar.
Mar.
Mar.

212,910

220,430

206,230

312,770

9
9

996,820

933,960

1,170,130

1,396,480

1,199,730

1,154,390

.1,376,360

1,709,250

Phinned

pounds)

(

$88,700

$88,500

$82,800

$1,467,575
614,372

$1,436,044
824,680

853,203

611,364

567,941

473,896

285,262

137,468

Shipped

160,956

—:
•>

237,000

207,600

215,330

362,210

33,100

24,700

21,860

326,040

347,900

Stocks Jan. 31___L__.

'189,248,000

266,693,000

237,267,000

416,904,000

163,853,000

146,516,000

174,915,000^

131,606,000

122438,000

*•;

Mar.

496,296

437,800

425,185

690,430

Shipped

Mar.

:—Mar.

115,810

120,500

97,180

397,996

461,781

764,521

513,806

582,281

861,701

(tons)

.123,015,000"

•

*194,737

293,321"

286,403

187,819

191,461-'

274,304

320,73P

272,591

292,319

——i_——
:

—

136,324*

57,069

57,371
'

131,233

123,585

130,931

128,168

221.461

221,911

L'.
(1,000-lb.

187,312

170,902

187,762

161,269

137,682
190.613-

,207,352
171,029

bales)—
<

577
Produced

—-----^——

—

•/

869

Total round-lot- transactions for account of members—

■

441

513

774

805

Mar.

1,872.036

1,763,510

1,998,175

2,817,890

Mar.

347.140

369,340

351,430

431,810

Other

sales

Mar.

1,780,610

1,564,536

1,921,511

2,487,041

Produced

Mar.

2,127,750

1,933,876

2,272,941

2,918,851

Shipped

Total sales

STOCK TRANSACTIONS FOR ODD-LOT ACCOUNT OF ODDLOT

DEALERS

EXCHANGE

Odd-lot

—

SPECIALISTS

AND

SECURITIES

sales

by dealers
of shares

Number

EXCHANGE

(customers'

1,176

Dollar value
Odd-ldt purchases by

RESERVE

Mar.

1,137,300

1,055,443

1,375,914

1,453,569

_Mar.

$55,432,432

$51,821,805

$63,114,186

$75,979,537

short

sales

Mar.

9
9

857,273

Customers'

8,728

9,225

10,010

6,527

Customers'

other sales

Mar.

848,545

797,849

1,041,278

1,289,769

-Mar.. 9

$40,190,410

$38,759,855

$50,702,912

$6^,306,337

197,500

185,560

255,880

346,990

total sales

-Mar.

Dollar value
Round-lot

Number

sales by dealers—
of shares—Total sales

Mar.

Other

Mar.

sales

Round-lot purchases by dealers—
Number of shares

EXCHANGE
FOR

Total

STOCK
OF

Mar.

SALES

ROUND-LOT

AND

ACCOUNT

1,051,288

1,296,296

Short sales

TOTAL ROUND-LOT

807,074

ON THE

STOCK

MEMBERS

501,530

255,880

185,560

LIFE

447,560

552,240

Group

536,470

STOCK

119

124

116

132

131

$3,123

$3,800

85
105'

11&

124

INSTITUTE
of

January

omitted):

—,

—

—-r
—

——_—

J-

Total

Mar.

481.960

494,730

536,500

533.670

Mar.

9,486.490

8.390.410

11,311,910

14,647,090

9,968,450

8,885,140

11,848,410

15,180,760

I Mar.

Total sales
U.

•93

115

$2,439

464

536

437

682

2,726

850

$4,269'

$7,062

$3,720

$29,819

'$29,935

$26,590

21,669

*21,462

MANUFACTURERS' INVENTORIES AND SALES
-

—

1—

INSURANCE—Month

LIFE

1,128

TRANSACTIONS

WHOLESALE PRICES, NEW SERIES
LABOR — (1947-49
100):

PURCHASES

INSURANCE

1,973

1,234

NEW YORK—1947-49

—x

Industrial

round-lot sales—
sales

adjusted——I

seasonally

Stocks,

SALES—SECOND FED¬
DISTRICT,
FEDERAL

3~46~990

(SHARES):

Short sales
Other

BANK

1,337

1,345

Stocks, unadjusted

(000.000

197^500

1,635

Average^!00—Month of February:
Sales (average monthly), unadjusted
—'
Sales (average daily), unadjusted—-—£—__
Sales (average daily), seasonally adjusted—:_

dealers (customers' sales)—

Number of orders—Customers'

RESERVE

ERAL

COMMISSION:

purchases)—t

■**

5,153

2,832

3,122

:—

STORE

;

* ' '

;

_______

—

——i—

DEPARTMENT

STOCK

etc. (1,000 pounds)—

Motes, Grabbots,
St ocks Jan. 31

1.091

910
.

Short sales

-153,802

(running bales)—

Fiber

Hull

'-j-

'•

Other transactions initiated off the floor—

596,720

231,041.000

155,988,000

—-T_

——

314,300

104,330

192,547,000

178.477,000
192,572,000

175,185,000

(tons)

289,600

492,390

691,528

1,898,199

170,536,000

(tons) Jan. 31

Shipped
Li titers

570,018

2,122,861

207,691,000

:c_

—

Produced

169,068

339,695

612,886

(tons)

265,680

Total purchases

1,624,274

Hulls—

Stocks

585,008

232,580

745,964

i—

31—

(tons) Jan.
Produced (tons)

331,300

$23,792

1,633,273'

14,542,040

114,299

Meal—

and

Stocks

1,765,250

301,400

sales

$46,300
12,400

Other

$51,400

(pounds) Jan. 31
—___________
Produced (pounds) _________—
Consumption (pounds)
—.1—. ■

Short sales

$51,500

-£

Oil—

Total sales

12,503

PROD¬

(pounds)

Mar.
Mar.

—

14,632

io'

___________—_—>1.—:L~

Mar.

purchases

12,075

■.'-j,

3l_:—_______—1
vVV.'-'i"

Other

Total

COMMERCE—Month
- 1
*

Short sales
sales

13,150,313

COTTON, SEED

29,900

Total sales

23,

24,100

fetocks

Mar.

purchases

35»

13.300

Total

44
*

*23,900

(tons)

Produced

Cake

1,138,740

the floor—

—

fatocks (pounds) Jan. 31

Total sales

.,,77.

Crude Oil—

107.97

—Mar.

sales

200..

(DEPT. OF COMMERCE)—

(tons) Jan.

Stocks

1,357,660

24,000

_•

Received al mills (tons)

Crushed

1,118,110

100

13,200

—_—,

_—

AND

3.30

Refined

Short sales
Other

SEED

COTTON

MtM-

purchases

—T-

(running bales)

3.93

288,866

BERS, EXCEPT ODD-LOT DEALERS AND SPECIALISTS:
specialists in stocks in which registered—

Total

March

220

93
53

Month

—

COTTON GINNING
of

205

19'
26

January

___

municipal,

UCTS— DEPT

257,167

Transactions of

•'

COM¬

construction
construction
and

30
27

CONSTRUCTION—EN¬

construction.

28
25

THE

________—

(000's

49-

BRADSTREET,

SERIES—Month

Deeeml>er:

110.99

(NEW)

NEWS-RECORD

♦110.72

335

187-

.23

3.3"
-_3.63

•

-Mar. 23
Mar. 23
Mar. 23
Mar. 23

AVERAGE— 100

■;

44
.

February—

March

INDEX— '

OIL, PAINT AND DRUG REPORTER PRICE

284.

211

_L—.—

GINEERING

Percentage

TRANSACTIONS

411.4

21,

dollars):

3.41

733;

331
4

development

3.31

3.96

3.02

3.66

"4.42

__.

________—______—

NEW

■

•_

INVENTORIES—DEPT.

State

3.22

and

ENGINEERING

CIVIL

106.92

97.16

.22

enterpriser

(millions of

99.20

systems

STATES—DUN

MERCE

96.69

235

863"

■

Manufacturing

101.31

97.78

buildings

INCORPORATIONS

BUSINESS

96.69

•.

194

public

UNITED

101.47

97.94

304
'

service

and

water

INC.—Month

Apr.
Apr.

Group

ROUND-LOT

29*.

buildings

service

2
2

ApiV 2
Apr. 2

NATIONAL PAPERBOARD ASSOCIATION:.
Orders received (tons)-:

3344

350

other

All

1849

101

243

800

Conservation

14.000c

13.500c

91.44

*~ZH—Apr*

——II—

Production

34,

•

facilities

and

Apr.

Group
Utilities Group—

Industrials

*•

—*

Highways

Apr.

—

Railroad

Public

nonresidential

Other

$59.71

25.000c

AVERAGES:

Baa

14.000c

AVERAGES:

A* -ZZZZZZZZZZZZZZIZZZZIZZZZZZ

17;.

39
'

.h—---

—~

Hospital and mstituiional—-——__

BUSINESS

Apr.
Apr.
Apr.

Average corporate

25!

5.179c

5.670c

-Apr.

Government Bonds

-•A

SI.

W* 75

'?-•

5.670c

Industrials Group

U. S.

171;

240

Educational

112

Mar. 26

YIELD DAILY

..—ul

Industrial

Sewer

Mar. 28

Group

BOND

346

>
,

buildings

Administrative

Apr.

MOODY'S

public

Residential

DUN &

—

corporate

Utilities

Telephone and telegraph

84,244,000

Public

Railroad

141,245,000

Aaa

Railroad

£
-

■

_____—.—

;

225,489,000

U. S. Government Bonds

Average

151"

Public

MOODY'S BOND PRICES DAILY

Mar. 28

(primary pig. 99%) at
(New York) at

Aluminum

Straits

1CI

QUOTATIONS):

utilities
All other private

(East St.

2C7

construction

245,184,000

—Mar. 30

INDUSTRIAL)

—

(delivered) at
Louis)

fZinc
Zinc

;

198

•

recreational

and

Miscellaneous
Farm

Military

(New York)

;

refinery

Export
Lead

•
:

—,

$459,450,000

ton)
J.

buildings—

Religious

252

•

211,391,000

—

garages '

nonresidential

$321,197,000

(per lb.)

refinery

244

123

148,097,000

Electrolytic copper—
Domestic

234

121

$375,871,000

INDEX—FEDERAL RESERVE

INC

(per gross

225;

118

Public

IRON AGE COMPOSITE PRICES:

Scrap steel

268

SYSTEM—1947-49 AVERAGE == 109

(per. gross ton)

648-

O'.her

EDISON ELECTRIC INSTITUTE:
Electric output (in 000 kwb.)

Pig iron

719

Office buildings and warehouses

restaurants,

696

Stores,

Nonresidential

steel

133,498,000

BUREAU OF MINES):
lignite (tons)
anthracite (tons)

Finished

„

264

$358,987,000

COAL OUTPUT (U. 8.
Bituminous coal and

BRAD STREET,

998
8951

9U0

'77

•

—Mar. 28
Mar. 23
Mar. 28

construction
Public construction
State and municipal

(COMMERCIAL AND

■'

2.«

1,017"

bzo

i.-—

$2,821

2,188
;

934

Industrial

ENGINEERING

—

Private

FAILURES

________

buildings

$3,051

2,033

Ncmltousekeeping

Social

689,226
646,059

DEPARTMENT STORE SALES

Ago

685,833

646,840

Pennsylvania

Month

$°.8P>3,

Hospital and institutional

Mar. 23

ENGINEERING CONSTRUCTION
NEWS-RECORD:
Total U. S. construction

Year

Month

__i t

alterations

and

-i

(nonfarm)-—

units

dwelling

of that date:

are as

Latest

buildings

Nonresidential

196,801,000

204,122,000

DEPT.

either for the

are

February (in millions):

construction

Additions

•

freight received from connections (no. of cars)—Mar. 23

CIVIL

New

ASSOCIATION OF AMERICAN RAILROADS:
Revenue freight loaded (number of cars)
Revenue

7.818,400

117,976.000
25,060,900

output

Gasoline
v

—,3,

gallons each)

construction-

Residential

AMERICAN PETROLEUM
Crude

of quotations,

cases

CONSTRUCTION—U.

new

Private

INSTITUTE:
condensate output—daily average (bbls. of

or,

Ago

94.2

*92.4

that date,

Year

LABOR—Month

Equivalent to—
Bteel ingots and

Month

production and other figures for th*

cover

Dates shown in first column

month available.

month ended

§91.6

Apr.

statistical tabulations

DEPT.

(DEPT.

COMMERCE)

OF
of

Month

January

Inventories—

NEW

SERIES—

(millions of dollars):
.

Nondurables

——

19,709

—

Commodity Group—
All

commodities

Farm

Mar. 26,

Mar

18
All

IIMar.

products

Processed foods
--77,7—^
other then farm and foods

commodities

-ZZZ-ZZZMar.
Mar.

117.0

116.9

112.9

89.1

88.9

88.3

87.4

104.1

103.9

103.6

100.1

84.7

83.9

125.3

80.8

73.8

125.4

120.8

Sales
IN CIRCULATION—TREASURY

MONEY
As

UNITED

Jan.

STATES

J^^As7gU0rr«Sn«/dtL75i'°^«alrelf Of»f^rr,oi^-,c^oei
tnv!!fmpn( If
4
Plan. JPrnne

Investment

one-nan

cent a

pound.

™

ruus» JBased on new annual capacity of 133,459.150 tons as
+Number of orders not reported since introduction of
basis

basis
of 128,363,090 tons|.
Zinc sold on delivered

Western

at centers

where freight from East St. Louis exceeds

BUREAU

$46,299

29,113

*28,684

27,023

EXPORTS

AND

$30,614,000

$31,790,000

$30,228,000

CENSUS—Montn

DEPT.

(000's omitted)

MTinfhiV
Monthlj

*$51,397

$51,488

Totsl

IMPORTS
of

January

(000's omitted):

Exports

Imports

—

$1,674,900

$1,994,900

$1,279,800

1,118,500

1,023,000

1,074,300

Number 5626

Volume 185

The Commercial and Financial Chronicle

(1627)

N
:

Donald B.

NOTICES

DIVIDEND

Stephens

DIVIDEND

NOTICES

DIVIDEND NOTICES

Donald B. Stephens, partner in

Cruttenderi, Podesta & Co., Chi¬
passed away March 31 at the

cago,

age

Mr.

48.

formerly with the

Stephens

OTIS
ELEVATOR

Co.

was

member

cago

and

States

active in the Central

was

of the

Group

quarterly

Investment

15*57,
DIVIDEND

dividend of

$.50-per

420

Lexington Avenue, New York 17

the Common "Stock has

NOTICES

payable April 26,
stockholders of record

the close of-business

H. R,

•

-1

26,

1957,

holders

record

fifty

14.

the close

will

1957,
of

Dated

York,;March 27,; 1957.

March

2G,

of.

Directors has this

dividend

Thirty Cents

day
(30c)

fifty) cents
Common

Common

per share was declared on
the
Stock of this Company, payable
May 15, 1957 to Stockholders of record at the
close of business April 18,. 1957.- Transfer
books Will remain open. Checks will be mailed,

Capital

Stock

registered

120

Broadway, New York 5, N. Y.

per

stock¬

business

May

SHRIVER, Secretary

BRITISH-AMERICAN TOBACCO COMPANY,

1957.

LIMITED.

*'*"

:ri
,rr

■

NOTICE TO HOLDERS

CWORLDW®i BANKING^

OF STOCK WARRANTS TO BEARER.

DIVIDEND

DIVIDEND NOTICE

NOTICE

The Board of directors to¬

day declared the following

The Chase

dividend:
60

cents

per

clared

the

Common
Stock, payable
June 15, 195" to stock¬
holders of record at the

XwCHARfi^EO 1799-^
••

By Ardcn fc. hnestone,

...

Secretary

;

of the
to

of business

capital

Bank, payable May 15,
at

the close

not

be closed

April 15, 1957.

The transfer books will

of the

holders of record

connection

with

the

payment of

this dividend.
MORTIMER J. PALMER
Vtee President and Secretary

5 BANK

April 1, I?}?

THE

1957

Chase
Manhattan

The CMdyear Tjre t Rubber Ci.

•

13,000,000

stock
.,

close of business May 15,
1957.

dividend of 60c
per

NOTICE IS HEREBY GIVEN that by a resolution passed at
Extraordinary General Meeting of the Company on the 29th day
of March, 1957, it was resolved to capitalise the sum of £11,878,880.10s.0d. (being as to £3,000,000 part of the General Reserve, as
to £7,512,559
part of the Fixed Asset and Stock Replacement Reserve
and as to £1,366,32 l.lOs.Od. part of the Undivided Net Profits
of the Company standing to the credit of Profit and Loss Account),
and to apply that sum in paying up in full 23,757,761 Ordinary
Shares in the Company of ten shillings each for distribution cred¬
ited as fully paid up amongst the existing holders of Ordinary Stock
in the proportion of one such Ordinary Share for every £1.10s.0d.
in nominal amount of Ordinary Stock held by them respectively.
an

Manhattan Bank has de¬

tHE GREATIST NAME IN RUBBER

Any such
would fall

appointed by the Directors and sold, and the net proceeds
the holders of Ordinary Stock entitled

a trustee

LUNG ISLAND LIGHTINGCOMPANY

' ~r

sale divided amongst
such fractions.
All

meDIAMOND

Imatch

QUARTERLY

:76th

company

OF DIVIDENDS

DIVIDEND
:S?X;

The Board of Directors of The

March

COMMON

■

1957,

regular quarterly dividend

Stock. At the same meeting the
quarterly dividend of 37y2c per

••v:

,.<■4

dividends

payable

ore

May

1957-to stockholders, of record

April 8,. 1957.

to shareholders
the close of business

April 12,1957.

VINCENT T. MILES
.

March

FERRY S. WOODBURYr S«crefary andTrectwref
:

OtOWINO PORTHI fUTURf

MATCHES

•

FUIF PRODUCTS

;
LUMBER

•

BUILDING SUPPLIES

shares will be issued in

registered form.

accompanied by

completed Application Form

ana

List¬

ing Form (s), copies of which may be obtained from the Company's
Office, Westminster House, 7, Millbank, London, S.W.I, or from
Lloyds Bank Limited, Issue Department, 72, Lombard Street^ Lon¬
don, E.C.3, or from Lloyds Bank Limited, Westminster House, Millbank, London, S.W.l, or in the United States of America from die
Company's Office at 800, Bowe Street, Richmond, Virginia, or die
Guaranty Trust Company of New York, Corporate Trust Division,
140, Broadway, New York, U.S.A.

WOODENWARE

Coupons must be deoosi ted (with the Application Fotmand List¬
ing Form(s) ) by a Bank or other agentin London who is an author¬
ised Depositary within the meaning of the Exchange Control Act,
1947, by whom they may be imported into the United Kingdom
without formality so far as die Act is concerned.

Treasurer

new

Fully paid Letters of Allotment will be issued in respect of the
said Ordinary Shares, and in order to enable holders of Ordinary
Stock represented by Warrants to Bearer to obtain their Letters of
Allotment, Coupon(s) No. 230 must be deposited at Lloyds Bank
Limited, Issue Department, 72, Lombard Street, London, E.C.3,
not later than the 14th August, 1957. The coupon(s) so deposited
must

May 1, 1957,

of record
on

thfc $1.50 Cumulative Preferred Stock.

Both

per share payable on the
Common Stock of the
Company'

cents

declared

Board also declared

quarterly dividend of 30

28,

Diamond Match Company

of 45c per share on the Corhmon

STOCK

The Board of Directors has de¬
clared

CONSECUTIVE Y£AR

new Ordinary Shares which, on an exact, distribution,
be allotted in fractions will be allotted to trustees or

27,1957

INTEREST PAYMENT
MEETING NOTICE

of
before die

RenounceabJe Letters of Allotment will be issued in respect

10NG ISLAND LIGHTING COMPANY

5% Cumulative Income Subordinated Debentures, Due 1984

and applications deposited in order after the 6th
June, 1957, but on or before the 14th August, 1957.
of

Noffce is

the

hereby siven that ARMOUR AND COMPANY,

pursuant to the Indentureunder which the above Deben¬

tures have beert
tures

issued; wilt pay interest Oft the Deben¬

follows:

May 1, 1957

—$2.50

November 1,

1957—$ 2.50

im-rcasf ifT the

Stock from

600,000 shares

* to-

900,000

per

hundred dollars

principal amount of Debentures
per

being payment in full of
above mentioned dates:

al(
>

interest accumulated to the
v

sharps;

Amending the Certificate of Incor¬
poration to provide for an increase in the
Stock from 8,000,0<X> shares to 10,000.000

ehares;
3. Authorizing approval of an Em.
ployee Stock Purchase Plan" wlierehv

Holders of coupon

No. 5

May 1,1957 and Coupon No. 6

1957 and present

Approval of appointment of Price
as independent
public
for the year 1957; and such

YT-aterhonse A Co.
accountants

Other

business

before fhe meeting

properly' come
any adjournment

Continental itlinois National Bank and Trust

Company of

The Chase Manhattan Bank, 9th Floor, 37 Wall Street,

New York 15, New York. The Trustee, American

National

may
or

Bank and Trust

Company of Chicago, will mail checks for

thereof.
□older* of Common Stock and holders
of Preferred Stock Tthe latter are entitled
to vote

the

tmly-

authorized

(WKLOO0

Preferred

Conrpany

Stock

payable

Debentures not in

coupon

form.

incrra-e

of any

new

name

of the holder.

shares will

not

participate in

any

dividend declared

prior to the 14th June, 1957.
issued, they will be converted into
made to die Council of The^ Stock
Exchange, London, for permission,to deal in and for quotation of
As and when the shares

are

Stock and application will be

the

new

.Ordinary Stock.

Coupon No. 230 deposited as Aforesaid will not be returned
to the depositor and no coupon bearing that number will be used
•for the payment of dividend ..Coupon' No. 231 will be die next
coupon after No. 229 to be used for that purpose.

from

900,000 shares) of record

tlie hooks of the

business

the proposal

the interest

case

in the

The

November 1,

them for payment either at the

Chicago, 231 South La Salle Street, Chicago-90, Illinois,

employees:

thereof.

holder resident outside the Scheduled
Territories (as defined for the-purposes of the Exchange Control
Act, 1947) other than in Denmark (including Greenland), the
Faroe Islands, Norway or Sweden, such net proceeds, if they
amount
to £5 or over, can only be paid to a blocked sterling
the

Debentures should detach Coupon

200.000 shares of Common Stock will he

avaiialtle for purchase >hy

interest received in respect

account

arullmrized number of share* of Common

represented by Stock Warrants

is not so deposited, together with a duty
completed Application Form and Listing Form(s), on or before
the 14th August, 1957, the Ordinary. Shares to which the holder of
any such warrant would be entitled will be allotted to a trustee,
and sold, and the holders of such warrants, on Coupon No. 230

hundred dollars

principal amount of Debentures,

Amending the Certificate of Incor¬

authorized numlx-r of shares of Preferred

of any holdings

'Board

building; at " the Company*!,
Operations Center, ITS Old
Country Road, liir-kgvUlc. New York,on
Tuesday, April lb, 1957* at 2 o'clock
1*.M, to elect elevfen directors and to
take '-action on |he following four pro¬
posals; '
•
,

Tticknville

"1.

case

Bearer Coupon No. 230

being subsequently deposited and such Application Form as die
may require being duly completed, will be entitled only fo
receive their appropriate share of the net proceeds of sale, and any

office"

poration to provide for

re¬

coupons

If in the

Inland-Lighting-Company'wiM he held

Non-Renounceable Letters of Allotment will be issued in

Notice i« hereby givew tfiat the Animal
3Iceti«»j»' .of the SlorklMibWi of Lung

ARMOUR AND COMPANY

spect

April 16, j

deposited in order

coupons and applications
6th June, 1957.

ARMOUR AND

By Order of the Board,

COMPANY

the close of

March 15, 1957, are entitled
to Vote at the meeting. The -nock transfer
hooks wiUuot be closed.
on

CHARLES E. ELBERT
beareuu-r
March 15, 1957

By: F. A. Becker

April 1, 1957

Vice President and Treasurer

A. D. McCORMICK,
Westminster House,

7, Millbank,
1st

April, 1957.

the

books of the Company at the close of busi¬
ness April 26,
1957.
D. C. WILSON, Assistant Treasurer

of the

mailed.

held

cents

Hardsell, Treasurer

good/ye AfC

May

Directors

Board

JOHN R. HENRY, Secretary

the capital stcck

payable

Checks

1957.

dividend

declared

was

Corporation

o.\

Checks will be mhiled.

-meeting of the Board

March

April

T,'i957.

New

York, N. Y., March 29, 1957.

per share, being Dividend No. 181, on the
Common Capital Stock of this Company,
payable June l, 1957, to holders of said

Dividend Notice

been declared,

Bankers Association.

STOCK

On March 26, 1957 a quarterly dividend of

^
P
•.
. .
Common Dividend No. 202

of the Bond Traders Club of Chi-r

The

declared
COMMON

COMPANY

Company of Chicago and Paul H,
Davis

America

ATCHISON, TOPEKA AND

SANTA FE RAILWAY COMPANY
New

CAN COMPANY

was

first Securities

THE

AMERICAN

Vanadium Corporation

London, S.W.l.

Secretory*

Financial Chronicle

The Commercial and

Thursday, April 4, 1357

(1623)

responsibility,

BUZZ

the

rank

membership
loose

man

for

Behind-the-Scene Interpretation*
from the Nation's

Capital

H /f

g~h ff

jfjL I tM'

A C-r IX

many

House

turning

opposes

the country in a mone¬

investigation

whose

tary

•

great

file of the

and

record

Congress¬
so strong

monetary inflation.

IThis column is intended to re■«
fleet the ''behind the scene" interpretation from the nation's Capital
and

WASHINGTON, D. C—Some

conservative heads

of the more

Hill

Capitol

going

are

fight hard to prevent

the strong

for economy
from
being transmuted into a
stampede lor a substantial cut
sentiment

public

personal income tax.

in the

individuals who
are talking
about a
There
reasoning
is

There

are

seriously
cut.

tax

along this line:

predicts

President Eisenhower

surplus of $1.8 billion for fis¬
cal 1958.
Congress is going to
make "cuts" in appropriations
a

$3 to $4 billion.
This will
permit a cut of minus $3 bil¬
lion in income taxes and still

leave

over

billion or
for reduction of the
$1

ample

Federal debt.

This

come

about

by raising the personal
exemption from $600 to $700, at
a
cost they say of about $2.8
either

billion, or by halving the pres¬
ent income tax rate to 10% from
20%

of tax¬

the first $1,000

already is under
contemplation in the House.
It
Such

a move

that in respon¬
sible quarters in the Senr te that
this idea is getting any favor¬
able reception. So long as Sen¬
ator Harry F. Byrd <D., Va.) is
Chairman of the Finance Com¬
mittee, any tax cut will be dif¬
ficult to sell until Federal ex¬
be doubted

may

demonstrably on
and substantially

penditures are
the way down,

House Republicans

Although
in

;

talking

cases

some

vaguely about the eventual posof an income tax cut,
these men as of the present are

sibility

to oppose such an idea
this year.
If by 1958 the "ex¬

going

penditure

cuts"

ine, then they

become genu¬

probably would

support a tax cut.

reasoning.
observe

billion "surplu

that

the

$1.8

s" Eisenhower

1958 is pre¬
continued upward

guessed for fiscal

personal and cor¬

poration income. This, they say,
is now open to question since
business is tending somewhat to
! level off.
aware

probability that 1958 and
year estimates of
ex-

current

; penditures are probably unduly
low.
Hence, it would take a

real and substantial cutin appropriations, not
yet

very
.

bacK

forestall
part of the unbudgeted rise in
to

foreseen,

Federal

merely

spending.

Finally,

the

"victory" in

the

is not taken seri¬
ously in responsible quarters.
With
the
committee - reported
Health, Education and Welfare
far

omy

appropriation bill. House-voted
economies or cuts in appropria¬
tions

were

just under $846 mil¬

lion. Competent sources say
a

are

appropriations will be
required
from Congress
next
year to restore the funds.

ficiency

[

if Congress were to
personal tax cut effective

Hence,
vote

calendar

1958 incomes, it

well bring about a
substantial deficit, considering
these background factors in the
fiscal situation.
could

City,

will come
disposed of
so-called loophole closing
The latter is scheduled to

after the House has
the
bill.
be

very

from the
Committee.

shortly

reported

Ways and Means

Inc.,

Serial

will include $10,000,00')
bonds, due annually on

July

from

1961

1977

inclu¬

sive, and $60,000,000 Term bonds,
due July 1, 1992. Part of proceeds
of the bonds, to be dated Jan. 1,
1957, will be placed in escrow
pending
the
retirement
of tha
outstanding balance of the original
$28,000,000
bonds
dated
Oct. 1,
1950. The bulk of the proceeds,

bill

special

This

Authority,
is scheduled

Pierce, Carrison, Wulof Jacksonville.
The

and

bern,

offering

proved by the Treasury, is said,
to be to forestall the courts from

will

however,

employed

Authority in making exten-'
sions to the Expressway required
in order that it will adequately
the

"Certainly

Inquiry

Senate labor
has
already
up one substantive suc¬
has created such an im¬

consistent dividend record—no
75 years—isn't that consistent?"

has

for

dividends

in the short time it has

Even

chalked

cess.

it cannot be shut off
soon by the most ardent of or¬
ganized labor's friends.
As a
matter of fact, the pro-laborites
give the impression of falling
over one another to support the
pact that

enterprise.
the

to be the

seems

whom

that

age,

fashion of

must

one

regulate one must first hold up
and expose before a

to ridicule

investigating

Congres sional

which

quiries

conducted

it possible

which made

The

sentiment
to push

the

1930's

early

the

built

which

the

was

market in¬
the Democrats

stock

and

banking

Thus,

committee.

banking

securities and

the

greater

exposure

in its stand¬
ing in the community.
Therefore, if legislation regu¬
of society reduced

lating labor unions is pressed at
present time, it will be more
restricted in scope than if legis¬

the

lation is brought

in much later,

year.

Thus,

observers

legislation

it,

see

proposed

were

now

it would be directed almost

clusively

ex¬

regulating the in¬

ternal affairs of unions. It would

such

include

things

enforc¬

ing secret ballots in union (not
just collective bargaining) elec¬

audits

compulsory

tions,
lation
On
more

union

of
the

such

pension funds.

other
a

hand,
TV

months

show

accordance with the recommenda¬

tual

possibilities for labor regu¬

lation cannot be assessed in the

is now proposed.

light of what

other accidents which

them
the

vote

prevented
The

cast.

was

number.

Speaker Raybehalf of

though

Even

holiday

bank

the

since

Ever

burn took the floor on

bank

Patman, something he does usu¬

regulatory legislation, the com¬
mercial
bankers
have
been

ally only when there is a major

and

1933

subsequent

passive when con¬
with regulatory legisla¬

amazingly
fronted

tion, whether wise or unwise.
in

tornado of

commercial

from

there

came

Tex.)

the proposal

when
to

Wright Patmau (D.,
of a monetary

Rep.

put

bankers

House

the

members

party issue, and thus threw his
prestige into the balance,
the resolution was defeated by a

own

believes

ter

they

con¬

Speaker

Sam

partly

credit

the

when

as-.,

would
possible,

vote

passage

keep

good side of Sam Ray-

Proponents of the Patman
solution

out

deep

ascribed

the

haven't

come

years

However,

other

observers

ion that the

tary

system

tight

money

the

over

the

issue

no means

The day before the resolution

come up.

the Democrats

thought

they had lined up a
majority in its favor.
On the
day

of, the

vote,

surprising

number of Democratic members
who allegedly
the

House

ization

resolution

were

pledged by

Democratic

organ¬

behalf of the Patman

developed

ex¬

alone turned the trick.

Probably the decisive influence
was the job done by the House
Republican
leadership
under
Joe Martin, the Floor Leader,
and Charley Halleck, his assist¬
ant. They got 225 GOP
votes
against the Patman resolution
and only two of the party voted
for it, an extraordinary
party
saturation on any issue.

is good politics.

to authorize Patman to have the

inquiry

unusually large

pression of banker sentiment by

mone¬

factor
cited by others is that even in
this era of highly organized ir-

colds,

visits from mothers-in-law, and

Duval

Feb.

requested
Court

heedless

members,
whose

trust

their

equally

court decree.
bonds will

and

group

regulatory

possible

restrict

affirmation

Court's

Children's Aid

election

cam¬

paigns, subject unions to certain
antitrust

perhaps

law

restrictions,

outlaw

collective

industry

the

Society

has

resignec
Harrimar

Brothers

Children's Air

join the

Society of New York. Mr. Merrill
who

has

the Society',<
portfolio as a volun
tary service, will become head o:
the
agency
when Arthur Huct
managed

investment

retires

executive

Joins

director.

Bennett Staff

(Special to The Financial Chronicle)

HOLLYWOOD. Calif.—Solomox
E.

Altman has joined the staff o

Bennett

Co.,

6253

Hollywood

Boulevard.

TRADING MARKETS

Fashion Park

United States Envelope

Morgan Engineering
National Co.

Carl Marks & Co. Inc.
FOREIGN SECURITIES

and

20 BROAD STREET

•

wide

bargaining.

TEL: HANOVER 2-0050
.

other

hand, interim
legislation will not necessarily
preclude
broader
legislation
next year.
However, the even-

Campbell Co. Com.

Indian Head Mills

N. Y.

TELETYPE NY 1-971

LERNER & CO.
Investment

10 Post Office

;

Fiagg Utica

SPECIALISTS

NEW YORK 5,
„

Riverside Cement

•

Merrill

Brown

Co.

union expenditures and

intervention

their

Edwin Merrill Joins

men

legislation
it might
far

lower

Delivery of the new
effected as quickly

Botany Mills

year,

the

possible following the Supreme

A. 3.

hence must be
regulated in the public interest.
So,

can

powers

waits until

Supreme

State

review

important

their

the

for

wide

the State's At¬

last,

21,

impression that
labor leaders are irresponsible,
create

torney, as a matter of routine, has

because he believes

Although

1957 bond issue
final decree of
County Circuit Court

validated

the
on

prospective

was

from

and

Patman

the

Edwin

Capitol Hill expressed the opin¬

partly

annually

payable

County, of which Jackson¬

ville is the County Seat.

their

Leadership Did Trick

GOP

friendship

Tax

Duval

views.

and loyalty to his fellow Texan,

sicking

State's 2 cent Constitutional Gaso¬
line

forward

in such numbers to express

ob¬

are

by toll revenues, also by
portion of the proceeds of the

who

bankers,

commercial

face.

bonds

secured

re¬

defeat

"powerful Influence" of the

the

Consulting Engineers.

Authority's

validity.

backed

Rayburn

personal

mat¬

levels

price

Patman,
vious

lend

can

strains

what

structure

its

make

and

"aye"

voted for the resolution to

the

that

should

Reserve

that

their

sured
not

call

roll

second

stantly keep the banks in funds
so

could

Several waited until

sary.

infla¬

consistent

who

Federal

and

burn.

investigation.
is

votes,

have had several more if neces¬

in charge

tionist

of 51

margin

passiveness disappeared
personal appeals

This

The

nona

Turns

Worm

tions of the

being present when

from

voters were about 33 in

Patmau

investigation,

of
alleged mal-practices. The longer
the exposure of alleged mal¬
practices, the more is a segment

the

volume

legislation.

longer the

present and anticipated
traffic in the City in

the

serve

going, the
rackets
inquiry

been

that

share of this ffagis phony, inasmuch as de¬
large

very

purpose

bonds

revenue

be publicly offered on April J)
by a syndicate managed jointly by
Smith, Barney & Co., New York

of tax refunds.
of the bill, ap¬

millions

$250
The

$70,000,000 Jack¬

Expressway

and get some

be able to sue for

issue of

new

Fla.,

that the roads

indicated

union funds, and Federal regu¬

headlines for econ¬

newspaper

sonville

by the courts,
would

sustained

ment,

say

These men also are
the

Expressway Scheduled

depreciating their equipment for
tax purposes, in place of a spe¬
cial arrangement they have had
since 1913. This special arrange¬

regulatory

Opponents of a tax cut this
year have a
different line of

dicated upon a
trend in both

Congress

that

stated

Jacksonville, Florida

probably will pass a special bill
require railroads to follow
the "straight line" method of

through

Reasoning of Opponents

They

$70 Million Bonds for

stable.

are

respon¬
naturally hesi¬

Depreciation

Railroads'
It

views.]

own

foreclose the possibility.

tant to

Labor

able income.
;

though

even

sible leaders are

granting those refunds.

could

cut

too

taken

juncture

with

not coincide

may or may

the "Chronicle's"

should not be
seriously
at
this

cut

tax

The

Securities

Square, Boston 9, Mass.

Telephone
HUbbard 2-1990

Teletype
BS 69