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Me.
illitmerct3t
Volume 135
1 panda'
iirumde
New York, Saturday, August 20 1932.
Number 3504
The Financial Situation
security markets are maintaining a firm tone,
TtheHEwith
values steadily appreciating, particularly
case of bonds, the prices of which keep con-
in
stantly creeping up, even when stocks in their higher
flight show pause, and for the time being seek lower
levels. On the other hand, business recovery,
confidence in which is now gradually strengthening,
nevertheless for the time being continues to lag,
as it has for many weeks past, with complete absence
of any definite signs of any great change for the.
better, though here and there indications appear
going to show that, in some quarters at least, business
is already on the mend, though attracting little or
no notice.
To be sure, in some instances where an increase
appears, it is the result of special causes and hence
without significance as an indication of any change
in the general trend. One instance of this latter
kind is found in the case of the production and
shipments of automobile tires. The automobile
industry has been notoriously depressed, more so
perhaps than any other, and yet because of the
increased demand for automobile tires in June, before
the Federal sales tax became effective, the shipments
of tires proved the highest on record, the number
shipped in that month the present year having
reached 10,366,640, as against only 4,258,116 in
May 1932 and 5,571,886 in June of last year. Production of tires ran far below the shipments, but here
also there was a big increase as compared with other
recent months, the output for June 1932 being reported at 5,643,329 as against 3,820,063 in May and the
total in fact running almost the same as in June of
last year when the number of tires produced was
5,672,463. A similar expansion occurred in the
shipments and production of inner tubes. The figures
in this latter case have to be estimated, but approximately the shipments of these inner tubes numbered
9,242,000 in June 1932 as against 3,800,000 in May
1932 and 5,300,000 in June last year, while the output of these inner tubes was approximately 5,200,000
in June 1932, against 3,400,000 in May 1932 and
5,300,000 in June last year. No such special cause
however, can be assigned for the great improvement
which has occurred in the textile trades and especially
in the cotton goods trade. Here the Association of
Cotton Textile Merchants of New York reports that
for the month of July with production to be sure at
low levels, sales ran 57.1% in excess of output, while
stocks on hand were reduced from 305,150,000 yards
to 281,249,000 yards and unfilled orders increased
from 170,910,000 yards to 227,952,000 yards.
As far as general business is concerned, this continues to move along low levels—at the lowest depths
in most cases reached in the prolonged period of
business depression. But here also there has been a
decided change for the better at least in sentiment,
and a rising stock market has played an important
part in this change for the better. The reports of
the trade papers regarding conditions in the steel
trade may be taken as reflecting accurately the state
of things at the moment in the business world generally. The "Iron Age" this week, while noting that
steel ingot production has not risen above the low
figure of 14% of capacity, expresses the view that
the prospects of the steel trade must nevertheless be
regarded with considerable satisfaction. The shutting
down of the Ford automobile plant until Sept. 6
was an adverse feature, but losses in that district
and in Cleveland and in the valleys, it is pointed out,
have been offset by an increase in Chicago to 13%
against a recent rate of less than 10%. The slowing
down in the automobile industry has come at a
time when expected seasonal expansion in requirements of other consuming lines, has scarcely begun
to assert itself. On the brighter side, however, the
"Age" says there is to be recorded "a noticeable gain
in demand for pig iron, including a number of
inquiries of fairly good size for fourth quarter delivery,
continuing strength in scrap markets, the resumption
of steel buying on a small scale by manufacturers
whose plants have been wholly or partially shut down
during recent weeks, and seasonal orders and inquiries from consumers whose business normally
expands in the fall, such as stove and furnace makers.
Steel furniture manufacturers are having a sizable
pick-up in orders because of requirements for the
many government buildings now nearing completion."
That business recovery, however, still lags is no
indication that the revival of activity and strength
in the security markets may not prove a forerunner
of revival and growing strength in the trade world ere
long. Confidence in Wall Street begets confidence
elsewhere, in fact throughout the length and breadth
of the land. Too much, however, must not be predicated upon the ability of the Government at
Washington to bring about a restoration of prosperity
in the business world. Too often government, by its
policies and plans, proves a hindrance rather than
an aid in the promotion of trade activities, thereby
delaying its return rather than advancing it. President Hoover has called a conference of leaders in the
business world to be held on Aug. 26 to hasten a
return of prosperity and the list of the names of the
1198.
Financial Chronicle
Aug. 20 1932
men whom he has asked to confer with him is a long they cannot now obtain former prices for their goods.
one and embraces persons of much eminence and The consequence is that they have been obliged to
fame. Anything of that kind is always to be com- stop producing altogether with the result that large
mended and some good is sure to come from it, though bodies of laborers have been thrown out of work and
judging by newspaper comments expectations of remain idle and are now dependent upon the Governwhat may be accomplished in that way appear ment, Federal, State and local, along with private
highly colored. Thus the United Press in a telegram charity, for a bare subsistance.
from Washington, Aug. 18, described what was
That is the real secret of the failure of the depresexpected as a result of the conference in the following sion to abate. And this process will continue just so
glowing words: "Business and industrial leaders are long as union labor persists in demanding the old
coming to President Hoover's economic conference inflated wage scales. But neither of the great
hopeful of smashing the depression and ready to political parties dares to proclaim such a doctrine
fight to make their hopes come true, they told the since it would mean,so it is supposed, a loss of votes.
United Press to-day. Mr. Hoover plans a front line Where is the statesman seeking political honors or
assault on depression. His volunteer aides have been political preferment who will rise and advise his
invited from all parts of the nation to meet here constituents that the great desideratum for recovery
Aug. 26. They comprise the industrial committees in business is the lowering of wage scales in accord
of the Federal Reserve districts. The President's with the need of these depressed times. Planning
view is that in general the conference is to organize for additional credit facilities will prove of no avail
'a concerted program of action along the whole so long as this fundamental weakness remains.
economic front'; specifically the conference is to
However, there is no occasion for despair. Educasurvey the problems of extended credit facilities for tion along right lines will in the end prove a corrective
business, industry and agriculture with a view to and perhaps sooner than expected. The new school
moving commodities from producer to consumer, of economists which in most vociferous tones has
thereby creating profits and jobs. Replies from men been proclaiming currency and credit inflation and
invited to confer at the White House reflected im- debasement of the money standard as a sure panacea
proved conditions. They were cautious optimists. for all the ills in the economic world and who are
None chose to report that'happy days are here again'. really responsible for the economic catastrophe
But there was evidence of hope, plus confidence, under which the world is suffering are no longer
plus a willingness to do more than sit back to cherish allowed to have the field all to themselves for the
the hope."
propagation of their theories. The old school of
The President is certainly to be commended for economists are once more beginning to reassert themthe zeal and energy he displays in countless ways to selves and their views must in the end prevail. On
bring about a restoration of normal cond tions in that point we have been particularly impressed by
the business world, though up to the present time his the comments made by Colonel Leonard P. Ayres,
efforts, unfortunately, have not been crowned with Vice-President of the Cleveland Trust Co. in the
any large measure of success, which of course every latest monthly bulletin of that company issued the
one regrets. This absence of success is really to be present week. Colonel Ayres starts by noting that
ascribed to a failure, not alone on the part of Gov- "there has been a sweeping change in the prevailing
ernment officials, but on the part of the general public attitude of mind of the people of this country in
as well, to realize that, after all, there is little that recent weeks. It amounts to something like a rethe Government can do all by itself to promote versal in business sentiment. Gloom and doubt
business prosperity or business activity. At present and apprehension have been displaced by hope and
the Government is engaged in huge measures of relief feelings akin to confidence. These alterations in
work through the Reconstruction Finance Corpora- mental attitude have accompanied changes in the
tion, the Federal Home Loan Bank Act and other prices of goods and securities. The wholesale quonewly created agencies for dealing with the situation, tations of commodities, and especially those of farm
but, after all, this.is simply relief work and it serves and food products, have been advancing. Bond
merely to soften the ill effects of business depression, prices have steadily strengthened, and so consistently
but cannot in and by itself contribute in any import- that on every trading day in July the number of bond
ant degree to lay the basis for normal and genuine quotations that advanced on the New York Exchange
activity in the business world. That end is not to exceeded those that declined. In the same month
be achieved by quack remedies, which are everywhere the rail stock averages went up over 65%, and
offered in such great abundance, but by removing those of the other groups nearly as much."
the underlying causes responsible for the prolongation
Mr. Ayres then proceeds to say that it would be
of the depression. Among these underlying causes pleasant and easy to infer that the bottom of the great
there is one of predominating size alongside which all depression has been passed, that the corner has
other influences sink into insignificance.
been turned, and that from now on the processes of
. We refer to the refusal of labor, or rather organized recovery will prevail. Many people have adopted
labor, to adjust itself to the new economic conditions that conclusion, but such an interpretation of recent
by consenting to a lowering of the wage scales es- developments may well prove oversanguine in his
tablished during the hectic period of inflation to the estimation. He then proceeds to discuss the duty
levels now demanded by the changed conditions. of the Government in the premises and gives exEverywhere union labor is putting up the stiffest pressions to the following sound utterances:
kind of a fight against a lowering of wage scales—a
"The fundamental principle of wise public policy.
lowering, moreover, which would involve little hardin
a serious business depression is that
ship in view of the great reduction that has occurred in thedealing with
national Government should devote its efforts
1929
since
in
the cost of living. Produc- to the removal of those barriers that impede
•the interval
or preing interests are unable at this time to pay these vent business recovery. Only the national Governhigh wages and turn out goods at a profit, because ment has the power to deal with such matters as our
Financial Chronicle
Volume 135
money, our credit system, our regulated railroad
industry, our taxation and national budget, and all
our debt and trade relations with foreign nations.
In the main the national Government wastes priceless
time, dissipates its energies, and squanders the
money of the taxpayers, when it leaves unsolved those
fundamental problems with which it alone has the
power to deal, and devotes itself to the futile task of
trying to stimulate into activity the trade and
industry that are tense and eager to go, but which
find themselves blockaded by conditions that are
beyond their control."
Than after enumerating what has been accomplished in the way of maintaining the integrity of the
dollar and what to remove fears concerning the banking situation and the means taken to relieve the
railroads through the Reconstruction Finance Corporation, he winds up with the following pregnant
declaration which should everywhere be taken to heart.
"The stimulation of business is easy to plan, and
hard to do. Projects for effecting it are alluringly
simple, and since they almost invariably entail the
expenditure of large sums of public money, they
evoke the enthusiastic support of all who hope they
may profit from them. Some of them prove temporarily helpful by providing increased employment.
In most cases the stimulation they supply proves to
be merely temporary, but the debts they leave behind
are enduring. The great harm that they do is that
they divert the attention of the public, the press, and
the Government away from the essential tasks of
dealing with the obstacles that bar the way to
recovery."
_
IVIDEND changes by corporations have not
been numerous the present week. Chief interest centered on the action of the American Tel. &
Tel. Co. which occurred on Wednesday, and here the
rate was left unchanged at $2.25 a share, or at the
annual rate of 9%, which has been maintained for
so long. On the other hand, the E. I. du Pont de
.Nemours Co. reduced the quarterly dividend from
75c. a share (par $20) to 50c. a share, which follows a decrease from $1 a share to 75c. a share at the
previous quarterly period. Among minor dividend
changes the Mead Corp. announced the suspension of
dividends on the $6 cumul. pref. stock, series A,and
the Van Raalte Co. omitted the quarterly dividend
on its 7% cumul. 1st pref. stock. The S.-R. Dresser
Mfg. Co. on Aug. 18 voted to omit the quarterly dividend on its no par class A partic. cony. stock.
1199
The final result is that the volume of Reserve credit
outstanding, as measured by the bill and security
holdings, records a contraction for the week of $11,863,000, the amount for Aug. 17 being $2,335,815,000
as against $2,347,678,000 Aug. 10. The fact should
not escape notice, however, that a year ago, on Aug.
19 1931, the volume of Reserve credit outstanding
was only $1,118,229,000.
During the week there has been a reduction from
$644,100,000 to $615,600,000 in the total of United
States Government securities pledged as part collateral for Reserve notes. We have stated above that
the holdings of acceptances by the Reserve banks
had slightly diminished during the week. This had
reference to the acceptances held by the Reserve
institutions for their own account. In the holdings
of acceptances for foreign central banks there has
been a small increase, the amount this week being
reported at $60,254,000 as against $59,528,000 last
week; a year ago, however, the acceptance holdings
for foreign account footed up $226,781,000. Foreign
bank deposits with the Reserve institutions remain
virtually unaltered and very low, the amount for
Aug.17 standing at $10,418,000 and the amount Aug.
10 at $10,402,000; a year ago foreign banks had on
deposit with the Reserve institutions no less than
$168,408,000. Brokers' loans, as shown by the returns of the reporting member banks in the New York
Reserve District show no trace of expansion,notwithstanding the greater activity on the New York Stock
Exchange,the amount of such loans for Aug.17 being
$344,000,000 and for Aug. 10 045,000,000.
he foreign commerce statement of the United
States for the month of July is the most distressing that has appeared in a great many years. Merchandise exports for that month were reduced to
$107,000,000 and imports to the exceptionally low
figure of $79,000,000. The explanation is volunteered that the low value for imports was caused
by the rush of imports of various commodities in
June to escape the higher tariff rates imposed under
the new Revenue Act. Undoubtedly the increase
in tariff rates now enforced has resulted in curtailed
imports, but there was no indication in the June
statement of merchandise imports of any great
rush of any description. The amount for June was
less than for May and considerably below that of
any month for many years back. Exports for July
HE changes in the condition statement of the
at $107,000,000 compare with $114,259,000 for
Federal Reserve banks for the week ending June
and $180,772,000 for July of last year; imWednesday night are again of an encouraging
ports at $79,000,000 compare with $111,405,000
nature. Gold holdings have increased in the sum
for June, and with $174,460,000 for July 1931.
)1 i147,031,000, and the amount of Federal Reserve
For the month just recently closed there was a
notes in circulation has been further slightly re- so-called
favorable trade balance of $28,000,000.
duced, falling from $2,843,605,000 Aug.10 to $2,838,- For June the
trade balance, too, was on the export
772,000 Aug. 17. The result is that though deposit
side but it amounted to only $2,854,000. In July
liabilities have increased during the week from
of last year the export trade balance was $6,312,000.
$2,134,619,000 to $2,173,820,000, the ratio of total.
For the seven months of the current calendar year,
reserves to deposit and Federal Reserve note liabiliexports have amounted to $948,048,000 compared
ties combined has risen during the week from 57.9% with $1,496,739,000 for the
corresponding period of
to 58.4%. Another important feature is that there 1931, and imports to
$826,890,000 against $1,281,have been virtually no further purchases of United 611,000 a year ago. The
export trade balance for
States Government securities during the week, the the seven months this year
was $121,158,000 as
amount for Aug. 17 being reported at $1,851,046,000 compared with $215,128,000
last year.
and for Aug. 10 at $1,851,011,000. The holdings of
With exports last month below the preceding
acceptances have further slightly diminished, falling month as well as July 1931,
cotton exports were
from $38,720,000 Aug. 10 to $35,890,000 Aug. 17. considerably larger both in quantity and value.
Discount holdings are also slightly lower at $442,- Exports of cotton in July were 458,600 bales com860,000 Aug. 17 as against $451,938,000 Aug. 10. pared with 270,100 bales a year ago, and the value
Financial Chronicle
1200
was $15,853,900 against $13,530,000. It is therefor
apparent that exports other than cotton, for the
month, suffered a considerably greater decline than
is indicated by the reduction in the total value,
other exports amounting to approximately
$91,150,000.
The decline in foreign trade, which has been very
marked in the past three years, has been due largely
to a lower range of values each succeeding year.
Quantities moved for most classes of merchandise
have also been lower, although as to this there are
important exceptions. The completed record for
the first six months of 1932, published this week,
sets forth certain figures indicating the nature of
this reduction. Total exports and imports for the
first half of this year as already stated amounted to
$1,588,938,000. This is the lowest figure for any
similar period for more than twenty years. An
examination of the details, however, shows that the
lower values both for exports and imports does not
correctly measure the actual loss in the movement.
There are 14 commodities, which together contribute more than one-third to our total trade
abroad; for the first half of 1932 the ratio of these
to the whole was 36.8%. In the following we show
the total value of merchandise exports and imports
for the first half of each year listed; also, the value of
the 14 commodities referred to for each year:
Half Year—]
1932
1931
1930
1929
Total
Foreign Trade.
$1,588,938,000
2,243,118,000
3,811,702,000
4,909,463,000
Fourteen
Leading
Commodities.
$585,575,000
767,100,000
1,120,550,000
1,694,730,000
Aug. 20 1932
the same period of 1931 gold exports were $1,798,000
and imports $260,453,000 the latter showing a net
movement into this country of $258,655,000. The
silver movement in July was further reduced, exports
amounting to only $828,000 and imports to $1,288,000
the lowest figures in a number of years.
ERCANTILE failures in the United States
during July were quite as numerous as in the
earlier months of this year and the liabilities continued very heavy. According to the records of
R. G. Dun & Co., there were 2,596 mercantile
defaults last month involving a total of $87,189,639
of indebtedness. A year ago,in July, 1,983 similar
defaults were recorded involving $60,997,853. The
increase from July of last year to the end of 1931
was almost constantly greater each month, as is
usual, and the indebtedness was heavy. Since
January this year, however, the record has been
somewhat irregular but high. The July figures are
the lowest for the year to date as to the number of
defaults. As to liabilities, the July figures are above
those for three months out of the preceding six months
of 1932. For the seven months of this year, there
have been 20,029 business failures for $624,473,927
of liabilities compared with 17,090 similar defaults
a year ago involving 31,495,222.
Separated into the three leading classes, each one
shows a considerable increase both in the number
of failures and in the liabilities. There were 622
manufacturing defaults last month for $37,228,284
of indebtedness; 1,790 trading failures involving
$34,918,899, and 184 of agents and brokers for
$15,042,456. These figures compare with 520
manufacturing defaults in July of last year for
$20,586,117; 1,322 trading failures involving
$28,091,055, and 141 of the third division with
$12,320,681. The number and liabilities in several
sections of the manufacturing division were particularly high, especially for the iron and steel
class, for machinery and tools, lumber and building
lines and chemicals and drugs. Quite an increase
also appears for clothing manufacturing, printing
and engraving, and the number is larger for hats,
gloves and furs, milling and bakers, and the clay
and glass division. Under trading, also, business
failures were more numerous last month and for
a larger amount, especially for groceries and meats,
for general stores, for dealers in clothing, dry goods,
shoes and luggage, furniture, hardware, drugs,
jewelry, books and papers and hats and furs. For
the division embracing hotels and restaurants, the
number was less but some large failures added to
the indebtedness.
The large failures in July were again for a heavy
aggregate. There were 162 such defaults, that is
where the liabilities in each instance were in excess
of $100,000, the total involved being $58,249,735.
These losses were especially heavy in the manufacturing division. In July 1931 the corresponding
figures embraced 100 similar defaults for $37,125,250.
M
The commodities for which a separate total is
-given include exports of cotton, wheat, gasoline, leaf
tobacco, copper and coal and on the import side
coffee, sugar, rubber, silk, hides, wool, newsprint
and petroleum. The value of the shipments of these
commodities from and into the United States in the
first six months of 1929 approximated $1,694,730,000,
or 34.5% of the total; for the same period in 1932
the movement amounted to $585,575,000, a reduction
of $1,109,05,000, equivalent to a loss of 65.4%.
Actual shipments of these commodities in the first
six months of 1932 at the range of values prevailing
in 1929, would have raised the amount for 1932 to
$1,202,815,000, so that the actual reduction in the
movement this year compared with 1929 on the same
basis of values, would have been 29% less, covering
the three years.
Cotton exports this year to July exceeded those of
each of the three preceding years for the same period.
The same thing is true of wheat. In imports, coffee
receipts were larger in the first half of 1932 than
they were in the same period in 1929. At 1929
export prices, the value of shipments of gasoline, leaf
tobacco and copper would have been very much
higher than the amounts recorded for the first half
of this year. Likewise, for imports of silk, which
were nearly three times above the record of the
earlier year; also, for rubber, more than three times;
HE stock market this week after a further recescoffee, more than twice; and hides, wool and petsion on Saturday last (following the break in
roleum.
Both exports and imports of gold were reduced in the market on Friday of last week) resumed its
July, the former very heavily. Gold exports last advance on Monday and its course has continued
month were $23,474,000 and imports $16,334,000. upward the rest of the week, though with occasional
For the seven months this year, gold exports have setbacks, recovery from which was rapid. Buying
been $791,312,000 and imports $164,184,000, ex- has been confident both for speculative and investports exceeding imports by $627,128,000. During ment account and the quiet strength of the bond
T
Volume 135
Financial Chronicle
market (in which a further steady appreciation in
valuEs has been taking place) proved an important
aid in stimulating the rise in the stock market. The
surge -upward on Monday was very pronounced,
though it did not begin until late on that day. The
net result for the day was substantial advances all
around in the active issues. This occurred in face
of a reduction in the quarterly dividend of E. I.
du Pont de Nemours & Co. from 75c. a share to 50c.
a share. It also occurred in face of weakness in the
grain markets, though some upward reaction in wheat
before the close of the session was of help in the brisk.
advance in stocks which occurred, as already stated,
towards the close of the day. On Tuesday bullish
enthusiasm gained such headway that United States
Steel opened 4% points higher than the close Monday
afternoon at 45 on a transaction aggregating 10,000
shares. So numerous were the buying orders for the
time being that the ticker in recording transactions
fell 7 minutes behind during the first half hour of
trading, after which, however, the volume of transactions tapered off somewhat. Part of the early
advance was lost before the close of the day, but,
nevertheless, net advances were large for the day in
most of the issues actively dealt in. U. S. Steel
showed a net advance for the day of 3 points, American Tel. & Tel. of 43. points, New York Central of
25
% points, Westinghouse Electric of 43 points,
4
J. I. Case of 3 points and Union Pacific of 43
points, etc.
On Wednesday the rise continued under such
momentum that in the early hours of the day many
new high records were established, but later a sharp
downward plunge occurred during which the early
advances were lost. Interest on that day centered
on the action of the American Tel. & Tel. Co. on
the quarterly dividend. When it appeared that the
dividend was to remain unchanged at $2.25, or at
the rate so long maintained of 9% a year, prices eased
off all around, leaving the active stocks in many
cases, as already indicated, several points lower than
at the close on Tuesday. Thus United States Steel
% points lower, Union Pacific 3 points lower
closed 23
and Atchison 23/i points lower, and so on throughout
the list. American Tel. & Tel. itself pursued an
erratic course. It sold up to 115 before announcement of the dividend, but after the dividend was
known it sold down to 10834, with the close 11034,
or a net loss of 33
4 points for the day. The general
market followed a closely similar course, extensive
selling to realize profits being the main factor in the
reversal of the market's course. On Thursday, however, there was no manifestation of weakness; after
some further selling the market developed a rallying
tendency and prices in the case of most of the active
list again recovered. American Tel. & Tel., for
instance, closing at 112%, or a net gain for the day
of 23/8 points; United States Steel recorded a net
gain of %; Union Pacific, a net gain of 23
%, and
Atchison, a net gain of 234, &c. A recovery in the
price of wheat towards the close of the day helped
the rally in stocks in the closing hour on Wednesday.
The tendency of wheat prices, however, was towards
lower levels most of the week, the September option
for wheat in Chicago at the close yesterday being
504c., as against 5234c. the close on Friday of
last week, and the fact that the grain market proved
a depressing agency most of the week instead of a
stimulating influence as last week, gives additional
significance to the further improvement in stocks
1201
which occurred during the week. On the other
hand, however, the cotton market has been a distinctly encouraging feature, the price of spot cotton
in New York being marked up to 7.60c. on Thursday,
with the close yesterday at 7.50c., which compares
with 5.90c. as recently as the second of August.
The fact that the gold current (through actual importations of the metal or through release of gold
from earmark) is now running so stiongly in favor of
this country has, of course, also been an encouraging
feature. For the week ending Wednesday night there
were imports at the port of New York of $3,030,000
(of which $1,401,000 came from England) while
no less than $42,450,000 of the metal was released
from earmark for foreign account and the exports
were only $6,004,000, all to France, thus showing a
net gain for the week of $39,476,000, entirely irrespective of arrivals of $1,471,000 of gold at San
Francisco from China. In the steel trade production
still continues at the low figure of 14% of capacity,
but the trade papers maintain that sentiment has
greatly improved and that the chances are bright for
a large scale production in the near future. On
Friday stocks moved irregularly up and down, but
with the tone remaining good. Of the stocks dealt
in on the New York Stock Exchange, 104 established
new high records for the year during the week, while
only 3 stocks fell to new low records for the year
during the week. Call loans on the Stock Exchange
were continued unaltered at 2%.
Trading has been of more moderate proportions.
At the half-day session on Saturday last the sales on
the New York Stock Exchange were 1,756,690
shares; on Monday they were 1,906,290 shares; on
Tuesday, 3,612,185 shares; on Wednesday, 2,874,420
shares;on Thursday, 1,784,920 shares, and on Friday,
2,168,170 shares. On the New York Curb Exchange
the sales last Saturday were 234,630 shares; on
Monday, 221,915 shares; on Tuesday,432,440 shares;
on Wednesday, 405,435 shares; on Thursday, 242,965
shares, and on Friday, 238,700 shares.
As compared with Friday of last week, prices show
quite substantial further advances as a rule, notwithstanding the recessions on Thursday and Friday.
General Electric closed yesterday at 18 against 163/i
on Friday of last week; North American, at 2934
8; Standard Gas & Elec., at 21 against
against 263/
4 against 283/2; Con17; Pacific Gas & Elec., at 293
solidated Gas of N. Y., at 5732 against 52; Columbia
% against 1334; Brooklyn Union
Gas & Elec., at 143
Gas, at 79 against 70; Electric Power & Light, at 9%
4 against
against 8%; Public Service of N. J., at 483
42; International Harvester at 28% against 273/2;
J. I. Case Threshing Machine, at 513/ against 463/2;
Sears, Roebuck & Co., at 203/ against 193/2; Montgomery Ward & Co., at 10% against 10; Woolworth at
353/2 against 333/2; Safeway Stores, at 4732 against
4 against
463/
8; Western Union Telegraph, at 313
2934; American Tel. & Tel., at 109% against 10634;
International Tel. & Tel., at 11 against 94;American
% against 503/
8, United States Industrial
Can, at 523
Alcohol, at 273
4 against 25%; Commercial Solvents,
4;Shattuck & Co., at 10 against 8,
at 934 against 83
and Corn Products, at 424 against 38.
Allied Chemical & Dye closed yesterday at 753
4
against 73 on Friday of last week; Associated Dry
Goods at 6 bid against 6; E. I. du Pont de Nemours
% against 3434; National Cash Register A at 12
at 345
against 12; International Nickel at 8% against 7%;
Timken Roller Bearing at 18% ex-div. against 153%;
1202
Financial Chronicle
Aug. 20 1932
Johns-Manville at 24 against 233; Gillette Safety pressive results of the war loan conversion offer.
Razor at 193/2 against 193/8; National Dairy Products This development, together with the bouyaney at
at 203/2 against 193/2; Texas Gulf Sulphur at 213
New York, caused heavy buying of securities on the
against 203'; Freeport Texas at 21 against 19; London Stock Exchange Tuesday, but recessions apAmerican & Foreign Power at 95% against 84
3 ; peared in subsequent sessions. The Paris Bourse
United Gas Improvement at 19 against 173/2; National found less reason for optimism and price changes
Biscuit at 38% against 363.; Coca-Cola at 94 against were unimportant., The Berlin Boerse advanced
2 against 27; Eastman despite the political uncertainty now prevalent in
933
/
8; Continental Can at 293/
Kodak at 503
4 against 48; Gold Dust Corp. at 163( the Reich. Close attention is paid currently in all
against 153/8; Standard Brands at 153 against 141A; markets to trade and industrial reports, which reParamount Publix Corp. at 65
4;Kreuger main discouraging, and the pace of the advance is
% against 43
& Toll at % against %; Westinghouse Elec. & Mfg. clearly checked by such considerations. In most
at 37% against 313i; Drug, Inc., at 403
4 against circles it is believed, on the other hand, that the
393;Columbian Carbon at 29 against 283;Reynolds advance in New York from the recent "panic prices"
Tobacco class B at 339 against 33%; Liggett & is justified, and there is a widespread tendency to
Myers class B at 55% against 54; Lorillard at 16 follow the movement of the American market.
The London Stock Exchange was quiet at the start
against 15; American Tobacco at 75 against 72, and
of trading Monday, but the tope was cheerful.
Yellow Truck & Coach at 33 against 332.
The Steel shares have not failed to share in the British funds were firm in expectation of a satisrise. United States Steel closed yesterday at 409', factory announcement on the conversion plan. Slight
against 383/i on Friday of last week; Bethlehem Steel declines appeared in home rail stocks, but British
at 179', against 165
%; Vanadium at 163', against industrial issues improved. International securi4. In the auto group Auburn Auto closed yester- ties were irregularly lower. Dealings Tuesday in153
day at 63, against 64 on Friday of last week; General creased sharply as a result of the conversion anMotors at 139', against 13 8; Chrysler at 13, against nouncement, which far exceeded the most favorable
129/
8; Nash Motors at 143
%, against 14; Packard forecasts, and the overnight reports of renewed
5 Hudson Motor Car at strength on the New York market. The gilt-edged
Motors at 39., against 3%;
6 8, against 65
%, and Hupp Motors at 33/2, against list advanced smartly, and confidence quickly spread
33'. In the rubber group Goodyear Tire & Rubber to other sections of the market. British funds were
closed yesterday at 18, against 163/i on Friday of in great demand, with profit-taking toward the close
last week; B. F. Goodrich at 63,against 5%; United easily absorbed. Industrial issues were firm, while
States Rubber at 5, against 5, and the preferred at heavy buying of shares was reported in the oil and
copper groups. The tone Wednesday was uncertain
11, against 10.
The railroad shares have been leaders in the up- and in most sections small losses developed. British
ward movement. Pennsylvania RR. closed yester- funds were offered in larger volume, and prices
day at 169, against 13% on Friday of last week; sagged sharply in one or two instances. Home rail
Atchison, Topeka & Santa Fe at 483', against 4332; stocks slumped on disappointing traffic reports,
Atlantic Coast Line at 26, against 20; Chicago Rock while most industrial issues also were offered liberIsland & Pacific at 83v, against 43; New York ally. A quiet session followed Thursday, with
Central at 259, against 203'; Baltimore & Ohio at changes small in all departments. British funds
139, against 113'; New Haven at 193/2, against 153/2; were soft at first, but recovered in the later dealings.
Union Pacific at 693
2; Missouri Pacific Textile stocks dropped, owing to threats of a strike
4,against 633/
4,against 53;Southern Pacific at 229/
at 53
8, against involving 500,000 cotton mill employees, and most
173/
8; Missouri-Kansas-Texas at 63/2, against 53/8; other industrial issues also were easy. International
Southern Railway at 103
4, against 99'; Chesapeake stocks were dull until near the close, when better
& Ohio at 24, against 193'; Northern Pacific at 203, advices from New York caused a little improvement.
against 153', and Great Northern at 16, against 133t. The tone at London yesterday was dull. Gilt-edged
The oil shares have responded very slowly to the securities sagged a little, but others were steady.
The Paris Bourse was closed Monday, in observgeneral upward swing. Standard Oil of New Jersey
closed yesterday at 333', against 323' on Friday of ance of a religious holiday. When trading was relast week; Standard Oil of California at 269', against sumed Tuesday, after the protracted closing, buying
25%; Atlantic Refining at 173, against 173', and developed on a fairly good scale and advances were
Texas Corp. at 15%, against 153.'. In the copper recorded in most issues. The favorable sessions at
group Anaconda Copper closed yesterday at 8%, New York and London stimulated interest, and
against 8 on Friday of last week; Kennecott Copper dealings were heaviest in the international stocks.
at 103', against 10; American Smelting & Refining French issues showed relatively small gains. Moveat 173/8, against 159/8; Phelps Dodge at 7, against ments Wednesday were irregular, with the more
738; Cerro de Pasco Copper at 11, against 113, and prominent issues off slightly. Rentes were an ex- ception, these Government bonds advancing owing
Calumet Sz Hecla at 33
4,against 3%.
to the belief that conversion offerings will soon be
RICE trends were generally favorable this week made by the Paris regime. In an extremely quiet
on stock exchanges in the leading European session Thursday, prices drifted slowly lower. No
financial centers, with reports of improvement at importance was attached to the movement, however,
New York again a chief stimulating factor. There owing to the small turnover. Improvement was rewas an increasing tendency toward caution this ported at Paris yesterday, prices advancing easily in
week, however, in the dealings at London, Paris and a more actiie market.
Trading on the Berlin Boerse was fairly active
Berlin, and some irregularity developed in all these
markets on profit-taking. The most favorable ses- Monday, and prices advanced modestly. The buysions were reported at London early in -the week, ing was traced largely to professional speculators,
owing to the announcement late Monday of the im- reports said, as such circles hold a favorable view of
P
Volume 135
Financial Chronicle
the present political impasse in the Reich. Mining
stocks and electrical issues showed the greatest
gains, but artificial silk shares also shared in the
movement. Greater public interest in securities
was reported on the Boerse Tuesday,and the advance
was accelerated. The investment of foreign "stillholding" funds also aided the movement, it was said.
Gains of as much as 3% were not uncommon, especially in the electrical group of shares. The advance was resumed Wednesday,and further material
gains were recorded in leading issues. Profit-taking
checked the upswing toward the close, but diminished the gains only a little. Mining issues and
electrical stocks were prominent, while chemical
shares also reflected greater interest. The opening
Thursday was weak, but a cheerful tone was quickly
restored to the market by new investments at the
lower levels, and the early declines were in most
cases made up before the close. Mining and electrical stocks showed net losses, but the leading
chemical issues advanced. A favorable view was
taken of rumors that the Government intends to retire the present currency of the Reich and issue new
paper money as a device to end hoarding. Small net
gains were recorded at Berlin yesterday, despite
some early irregularity.
VERWHELMING success has been achieved by
the British Government in its bold scheme for
conversion of the £2,086,977,258 5% war loan due in
2% stock without definite maturity.
1947 into 31/
This operation was under consideration ever since
the war loan became callable in 1929, but the opportune moment did not arrive until the end of June
the present year, when a call was issued for redemption on the next interest date, Dec. 1. Holders were
offered a 1% cash premium on assents received by
the British Treasury until July 31, and the results
achieved to that date were announced in a bulletin
issued last Monday. The amount converted with
benefit of the cash bonus is approximately £1,850,000,000, or nearly 89% of the entire issue. It is
further disclosed that the amount for which cash
payment has been requested on Dec.1 is £48,000,000,
or slightly more than 2% of the issue. This leaves
£188,977,258 on which holders are still to signify
their intentions, but since lack of any definite statement by Sept. 30 is to be regarded as an acceptance
of the conversion, it is believed that a substantial
portion of the remainder so far undeclared will be converted automatically into 31/2% stock.
Indeed, it is suggested in the City, according to
the London correspondent of the New York "Herald
Tribune", that the cash redemption of the 5% war
loan on Dec. 1 is unlikely to exceed £100,000,000.
This sum will probably be found, it is stated, by an
issue of comparatively short term bonds carrying
a low rate of interest. Gratificatioh was expressed
regarding these results, Monday, by Neville Chamberlain, Chancellor of the British Exchequer, who is
now in Ottawa as one of the chief delegates to the
Imperial Economic Conference. "The result exceeds all expectations," the Chancellor is quoted as
saying, in a dispatch to the New York "Times". "It
-more than justifies the confidence I expressed in the
House of Commons in the common sense patriotism
of our people. A further great step has been taken
toward reyival of enterprise and prosperity, and
such a striking success will encourage the whole
world."
O
1203
tasks of the Imperial Economic ConferAJOR
ence at Ottawa probably will be concluded
to-day in a final plenary session, which will be followed immediately by the departure of the leaders
of the United Kingdom delegation. Difficulties
encountered in reaching satisfactory accords made
necessary the postponement of the final session
from Thursday to to-day, and the liner Empress of
Britain, on which most of the London representatives are to go home, will be held over for sailing
tomorrow, instead of to-day. A series of bilateral
agreements on trade will certainly result from this
conference, and they will be of world-wide importance. It appears to be unlikely, however, that they
will dislocate world trade to any marked extent,
as there is ample evidence that the London delegation
held tenaciously to its desire to stimulate trade
with the Dominions, without at the same time disrupting commerce with other countries. The actual
agreements between the United Kingdom and the
eight Dominions probably will not be disclosed in
full until they are presented to the respective Parliaments for approval.
The atmosphere of the conference was rather
gloomy early this week, as several conflicts developed
over the extent of trade preferences between the
United Kingdom and Canada, and the United Kingdom and Australia. The Anglo-Canadian accord
occasioned a great deal of discussion, as Ottawa
demanded, among other concessions, that London
restrict Russian dumping on the English market.
Agreement on this point finally was reached late
Thursday, when the London delegation undertook
to take whatever steps are necessary to protect the
Empire preferences granted the Dominions from
unfair competition. Russia was not named in the
formula, it is said. The preferences granted by
the 'United Kingdom to Australian meat did not
measure up to the expectations of the Canberra
representatives, and there was also much dispute on
this point. "The compelling force of domestic
politics requires that agreements shall be reached,"
the correspondent of the New York "Herald Tribune"
remarked Tuesday. There will, indeed, be extensive
agreements, according to the indications so far
available, but they will tend rather toward reductions of intra-Empire duties than toward higher
tariffs against other countries.
Some importance attaches to the adoption of a
report, Wednesday, whereumler the member nations
of the British Commonwealth pledge themselves to
make all commercial treaties with foreign powers
subservient to the principle of Empire preference.
"Each Government will determine its particular
policy in this matter," an official statement said,
"but the representatives of the various Government
stated that it was their policy that no treaty obligations into which they might enter in the future
should be allowed to interfere with any mutual
preferences which Governments of the Commonwealth might decide to accord to each other, and
that they would free themselves from existing
treaties, if any, which might so interfere."
The report issued late last week by the Conference
Committee on monetary and financial questions
contained little that was significant. The support
of the Empire was pledged in any effort to stabilize
currencies and raise world commodity prices at the
forthcoming world economic conference, but specific
recommendations of a technical character were
M
1204
Financial Chronicle
avoided. "A rise throughout the world in general
levels of wholesale prices is in the highest degree
desirable," the report stated, but "international
action is urgently necessary for solution of the
problem," it was added. Perhaps the most interesting item in the report was an endorsement of a
statement by Neville Chamberlain, Chancellor of
the British Exchequer, to the effect that a rise in
prices cannot be effected by monetary action alone,
since various other factors which have combined
to bring about the present depression must also
be modified or removed before a remedy is assured.
"His Majesty's Government nevertheless recognize,"
Mr. Chamberlain said, "that an ample supply of
short-term money at low rates may have a valuable
influence, and they are confident that the efforts
which have successfully brought about the present
favorable monetary conditions can and will, unless
unforeseen difficulties arise, be continued."
ITTLE progress has been made so far toward
adjustment of the dispute between the British
and Irish Free State Governments over the oath
of allegiance to the British Crown and the land
annuities due from Ireland to the British Government under the treaty of 1921. The tariff "war"
between these countries is in full swing, with results that are unfortunate. Imposition by Britain
of 20% import duties on Irish agricultural products
was followed by a similar Irish levy on British
cement, electrical products and iron and steel products, while heavy taxes also were imposed on
British coal, sugar and other goods. Before adjourning early this month the Dail Eireann in
Dublin voted a £2,000,000 tariff "war fund," which
was placed at the disposal of President Eamon de
Valera. The exact purpose to which this fund will
be put has not been revealed. British manufacturers
in some lines are beginning to feel the pinch of this
new and distressing situation, while Irish agriculturalists are finding the results even more unsatisfactory. Sir John Simon, Foreign Secretary
for Britain, 'expressed the hope in a speech at
Barnsley, England, recently, that settlement of the
controversy could be effected without delay. "Our
position was and is," he said, "that we wish to
agree on a procedure fair to both sides. Progress
is possible through arbitration such as we proposed,
either on the basis that in the meantime both sides
continue as at present—money being impounded
by the Free State and duties on Irish imports being
collected by Great Britain—or on the basis of both
sides returning to the position before the installments were withheld." The Irish Free State Government also has indicated its adherence to the principle
of arbitration, but the form of the tribunal remains
in dispute.
Political disaffection is growing in the Free State,
meanwhile, rendering an early settlement of the
controversy even more difficult. As an offset to the
irregular "Republican Army", formation was announced early this week of an equally irregular
"White Guard." Dr. O'Higgins, President of the
volunteer division of the Saorstate Army Comrades'
Association, is said to be one of the leading spirits
behind the White Guard organization. "Hundreds
of recruits joined the new White army over the
week-end, resolved not to let the Republican gunmen have their own way and determined to offset
the open drilling and recruiting which the Republi.
L
14 g 20 1932
cans have been enjoying for many weeks," a Dublin
dispatch to the New York "Times" states. "With
two irregular armies ready to fight each other there
is hardly a vestige of hope left that the next general
election will be free from disorder and intimidation."
ITTER and open antagonism has developed in
Germany between the von Papen-von Schleicher
Cabinet and the National-Socialist (Fascist) party
of Adolph Hitler, owing to the complete failure
of negotiations regarding the formation of a new
regime preparatory to the assembling of the newly
elected Reichstag. The struggle for power now in
progress between the Junker Cabinet and the Nazis
has centered the attention of the entire world on
the German political situation, and the possible outcome is a matter of much conjecture. There are
few definite indications of the course of events after
the Reichstag convenes on Aug. 30, other that the
conflicting claims of the leaders. It is now evident,
however, that Chancellor Franz von Papen and his
Defense Minister, Gen. Kurt von Schleicher, have
decided to go before the new Reichstag in the hope
of securing a vote of confidence. It is suggested
in some Berlin reports that the Reichstag will be
dissolved, if the expression of confidence is not
forthcoming. An official announcement was made
Thursday that the Reichstag would be convened
for Aug. 30, indicating that there will be at least
the semblance of Constitutional procedure.
The hopes for complete control of the Reich
Government, entertained by Adolph Hitler and his
Nazi associates, were definitely dispelled last Saturday by President Paul von Hindenburg. In an
interview with the President in Berlin, at which
Chancellor von Papen was present, Herr Hitler
demanded the Chancellorship for himself and a
dominating position for his party. He told the
President, a dispatch to the New York "Times" said,
that he sought "precisely the same power Mussolini
exercised after the march on Rome." The demand
was curtly rejected by Field Marshal von Hinden
burg, who urged him to consider his duty and
responsibility to the Fatherland. The Facist leader
was offered the Vice-Chancellorship, it is said, and
three other Ministerial posts for his party, as well
as a dominating position in the Prussian Government. President von Hindenburg would make
no
further concessions, and insisted on his own plan
for a "presidential Cabinet," with Col. von
Papen
as its head. Herr Hitler announced, late the
same
day, that the Nazis would never accept the burden
and responsibility of government unless they
had
all the power. As the von Papen Cabinet cannot
now depend on the support of the large Hitler
bloc of Deputies, it is probable that the present
Government will be defeated in the new Chamber
by a vote of approximately 550 out of the
607
Deputies.
The fight was carried before the German people
Monday, when the Cabinet issued an official statement in which it was related that Herr Hitler
demanded the same position in Germany that Signor
Mussolini took in Italy. Regret was expressed in
this statement that the National-Socialists had
violated a promise given before the recent general
elections that they would support a national Cabinet
founded upon the confidence of the President. "The
pledge of toleration by the National-Socialists,
which was given out only by Herr Hitler himself
B
1205
Financial Chronicle
in Austria, and on this
but by other authoritative leaders of the party in already have been voted
Dollfuss is expected to
Engelbert
Chancellor
basis
a
the presence of witnesses, and, indeed, not for
the Statefinances
placing
in
difficulties
no
encounter
limited time only, has not been kept," the statement
new funds.
the
of
aid
the
with
footing,
firm
a
on
authoritafirst
the
continued. This statement was
tive indication of the basis for the frequent claims
EMPORARY retirement from active service of 51
by the Cabinet leaders that they would remain in
warships, aggregating 130,000 tons, wasordered
office four years. Herr Hitler countered Tuesday,
Italian Government, Wednesday, as a move
Nazis
would
oppose
the
his
by
that
announcement
by an
the regime of Chancellor von Papen, which has not for economy. The vessels to be decommissioned
Italian fleet,
even a "splinter party" to support it. A dictator- comprise nearly one-third of the entire
indicates.
Rome
from
dispatch
ship can succeed, the Nazi leader said, only if it an Associated Press
Andrea
the
battleships,
Italian
remaining
The two
has a powerful popular movement behind it.
22,700
of
each
Duilio,
the
ship,
sister
her
Chancellor von Papen again predicted,in an inter- Boria and
their
of
stripped
be
to
vessels
the
among
view Wednesday, that his Government will be in tons, will be
include
will
retired
be
to
units
naval
Other
is
it
crews.
reported,
power for a long time. He anticipates,
that the political parties will recognize that there three heavy cruisers, nine light cruisers, 25 destroyers
is no Government to replace his Cabinet. "However, and 12 submarines. All the ships will be kept from
should a vote of non-confidence be passed by the deteriorating, the dispatch indicates, and "they will
Reichstag," the Chancellor stated, "the Governr continue to serve as a bartering asset when the world •
ment would act according to the situation thus conference on disarmament resumes its discussions at.
created, wishing in every relation to respect the Geneva this fall." After this retirement schedule is
Constitution." With obvious reference to the pos- completed the active Italian vessels will be reorganized
sibility of forceful procedure by the Facists, Chan- into two main squadrons, it is said. The first will
cellor von Papen remarked that the Cabinet would consist of seven 10,000 ton cruisers with headquarters
not hesitate to suppress immediately by means of at Spezia, while the second will consist of six 5,000
arms any attempt to defy its authority. He added ton cruisers with -headquarters at Taranto. "The
that he entertained no apprehension that the Navy Department believes the extensive retirement
National-Socialists would take illegal steps to program will save millions of dollars monthly," the
achieve their political aims, as Adolph Hitler had report states. "The crews of the retired vessels will
given his personal assurances in this regard. When be transferred to new cruisers gradually entering the
questioned regarding the frequently reiterated Ger- service."
man claim for armaments equality with other
CTING with obvious reluctance,the British Govnations, Chancellor von Papen declared that the
ernment finally intervened, Tuesday,in the promatter of equal rights was a vital matter for the
Reich. If equality and security are refused to Ger- tracted dispute between Hindus and Moslems in
many, the Chancellor indicated, the Government India regarding the representation of these major
will take "necessary measures" such as were out- religious groups and the numerous minorities and
lined recently by General von Schleicher. "Germany special interests in the Provincial legislatures of
has neither the wish nor the intention for armaments, British India. The step now taken is one of the
but she wants the other nations to keep their final measures necessary for the formulation of a new
Constitution for this important unit of the Empire.
promise to disarm," Col. von Papen said.
Two Round Table conferences on India came to
UCCESS is likely to attend the efforts of the unsatisfactory conclusions because of this difference
Dollfuss Cabinet in Austria to secure Parlia- between Hindus and Moslems over the system of
mentary ratification of the Lausanne protocol,. representation, notwithstanding the grave warnings
, under which Austria is to obtain an international issued at the time the conferences were in progress
loan of 300,000,000 schillings ($42,000,000). Debate by the British Government. Prime Minister Ramsay
on this measure nearly caused the defeat of the MacDonald made it clear that failure of the Indian
Cabinet on several occasions in July, and the matter factions to agree would necessitate the imposition of
was laid aside for a time. It was again taken up a settlement by the London authorities. • The probWednesday and accepted by the close vote of 81 to lem is, of course, a most delicate one, owing to the
80, with the Farmers' and Heimwehr parties sup- irrepressible antagonism between the chief religious
porting the Government, while the Pan-Germans factions of India. Serious disorders frequently reand Socialists opposed it. Ratification of the sult from the aroused feelings of the groups, the last
protocol and acceptance of the loan will mean that occasion of this sort having been reported in the
Austria formally foregoes any attempt at union period from May 14 to June 8, this year, when comwith Germany during the twenty-year period of munal rioting in Bombay caused 174 deaths and
the advance. It will also mean, however, that Aus- serious injury to 1,950 others. In imposing a
tria will continue to pay its international obliga- solution, the British Government has now displayed
tions. The Bundesrat, or Upper House of the Parlia- a traditional fairness.
ment, is expected to defeat the Protocol, as Pan"We never wished to intervene in the communal
German parties control this Chamber, but a second controversies of India," Prime Minister MacDonald
affirmative vote in the Nationalrat is looked for, sElid in his statement outlining the plan. "We
and this will make the measure law over the veto made that abundantly clear during both sessions
of the Bundesrat. The 300,000,000 schilling loan of the Round Table conference when we strove to get
is to be made chiefly by Britain and France, each the Indians to settle this matter between themselves.
nation advancing 100,000,000 schillings, while the We have realized from the very first that any debalance of 100,000,000 schillings will be provided cision we may make is likely—to begin with, at any
by Italy, Holland, Switzerland and other European rate—to be criticized by every community purely
countries. Financial and administrative reforms from the viewpoint of its own complete demands.
Volume 135
T
A
S
1200
Financial Chronicle
Aug. 20 032
But we believe that in the end considerations of which rose £4,431,9
28 and other accounts which fell off
Indian needs will prevail, and all communities will £114,448. The
reserve ratio rose to 36.29% from
see that their duty is to co-operate in working out' 33.39% a
week ago. Last year it was 45.84%.
the new Constitution which is to give India a new Loans on Governm
ent securities decreased £390,000
"- place in the British Commonwealth of Nations. and loans on
other securities £1,180,449. Of the
We should be only too glad if at any stage before the latter amount, £551,542
was from discounts and ad-,
Iproposed bill becomes law the communities can reach vances and £628,907
from securities. The discount
.agreement among themselves. The Government will rate is unchanged
at 2%. Below we furnish comibe Teady and willing to substitute an Indian plan parisons of
the various items for five years:
for its scheme, either in respect of any one or more
BANK OF ENGLAND'S COMPARATIVE STATEMENT.
of the Provinces, or in respect of the whole of British
1932.
1931.
1930.
1928.
1929.
Aug. 17.
Aug. 19.
Aug. 21.
Aug. 22.
Aug. 20.
India."
Circulation
2365,958,000 354,128,534 361,791,084 365,443,405 134,920,590
In order to safeguard the rights of all minorities, Public
deposits
9,808,000 19,725,523 21,045,499 26,286,065 16,611,974
the British Government made the basic decision to Other deposits
124,218,809 101.854,291 95,259,720 91,888,000 97,893,958
Bankers' accounts 89,754,489 61,755,078 61,665,369 55,850,949
continue the present system of separate electorates,
Other accounts_ 34,464,320 40.099,213 33.594,351 36.037.051
whereunder each group selects its own representatives. Governm't securities 70,163,220 48.880,906 49,371,247 71,046,855 27,968,950
Other securities
33,393.429 35.149,509 31,548.696 32,570,202 45,093,163
Equally important is an allocation of seats among the
Disct. & advances 14,684.804 6,863,320 6,114.545 3,832.387
Securities
various groups, this phase of the difficulty being Reserve notes & coin 18.708,625 28,286,189 25,434.151 28.737.815
48,644.000 55.741,541 53.574,431 32,758,509 59.652.619
especially pronounced in Bengal and the Punjab, Coln and bullion_139,602,249 134,870,075 155,365,515 138,202,004
174,823,209
Proportion of reserve
where the Moslems have 55% and 56%,respectively,
to liabilities
36.29%
45.84%
46.06%
27.71%
52%
2%
45%
of the total population. In Bengal the Moslems will Bank rate
3%
414%
534%
a On Nov.29 1928 the fiduciary currency was amalgamated
with Bank of England
have 119 out of the 280 seats, and European repres- note
issues adding at that time £234.199,000 to the amount of Bank of England
entatives will hold the balance of power. In the notes outstanding.
_Punjab they will have 86 out of 175 seats, but they
HE Bank of France in its statement for the week
-will be able to secure a bare majority as three landended Aug. 12, shows an increase in gold hold'holders' seats also are to be held 13y Moslems in this
Trovince. Hindus predominate overwhelmingly else- ings of 47,108,576 francs. The Bank's gold now
Where in India, and the politico-religious problems amounts to 82,226,053,804 francs, in comparison
dwindle into relative insignificance in other Pro- with 58,558,270,543 francs last year and 46,952,vincial legislatures. Important representation will 230,408 francs the previous year. French commercial
be given in every case to Sikhs, Indian Christians, bills discounted and advances against securities deAnglo-Indians, landowners and commercial groups. clined 37,000,000 francs and 27,000,000 francs,
The "untouchables" will secure separate electorates while creditor current accounts rose 719,000,000
in certain parts of India, but in most places they will francs. Notes in circulation reveal a loss of 828,vote with the rest of the Hindus. Special repre- 000,000 francs, reducing the total of notes outsentation also is to be given the newly emancipated standing to 80,770,772,110 francs. The total of cirwomen of India, the plan providing for a total of culation a year ago was 78,393,676,450 francs. An
37 women members of the Provincial Legislatures. increase appears in credit balances abroad of 16,"Not one community gets everything it has been 000,000 francs and a decrease in bills bought abroad
demanding," a London dispatch to the New York of 16,000,000 francs. The proportion of gold on
"Times"remarks. "Consequently, the Government hand to sight liabilities is now 76.90%. The same
expects a chorus of protests from one end of India item a year ago stood at 55.43% and two years ago
at 52.17%. Below we furnish a comparison of the
to the other."
various items for three years:
BANK OF FRANCE'S COMPARATIVE STATEMENT.
N Thursday (August 18) the Bank of Japan
Changes
Status as of
for Weat.
reduced its rate from 5.11% to 4.38%. Rates
Aug. 12 1932. Aug. 13 1931. Aug. 14 1930.
Francs.
Francs.
Francs.
Francs.
are 10% in Greece; 83/2% in Bulgaria;7% in Austria, Gold holdings- - -Inc. 47,108.576 82,226,053,804 58.558.270,54
3
Credit bids. abed_Inc. 16,000.000 3,329,489,391 14.095,854,14 46.952,230.408
3 7,055,150,195
Rumania, Portugal and Lithuania; 63/2% in Spain French commercial
bills dIscountedaDee. 37.000.000 3,018,828,003 4,899.209.489
and in Finland; 6% in Colombia; 532% in Estonia
5,183,235.429
Bills bought abr'dbDec. 16.000.000 2,083.323.167 14.583,767,393
18,741,338,119
and in Chile; 5% in Germany, Italy, Hungary and Adv. set. securs—Dee. 27.000.000
2,796.067.243 2.803.544,118 2.751,901.384
Note circulation—Dec.828.000,000 80.770,772.110 78,393.676,45
Czechoslovakia; 43/2% i,n Norway; 4.38% in Japan; Cred.
0 72,678,936,930
curr. accts.-Ina 719,000,000 26.160.523,064 27,253,877.627
17,327.395,588
Proportion
of gold
4% in Sweden, Denmark, Danzig and India; 33/2%
•
on hand to sight
in Belgium and in Ireland; 23/2% in France and in
liabilities
Inc.
0.13%
76.90%
55.43%
52.17%
Holland, and 2% in England and in Switzerland.
a Includes bills purchased in France. b Includes bills discounted abroad.
In the London open market discounts for short bills
on Friday were %@11-16 as against Y8@11-16% on
HE Bank of Germany in its statement for the
Friday of last week,and 11-16@%% for three months
second quarter of August shows an increase in
bills as against 11-16@3
4% on Friday of last week. gold and bullion of 143,000 marks. The total of
Money on call in London on Friday was %%. At bullion is now 763,104,000 marks, in comparison with
Paris the open market rate continues at 1%%, and 1,365,784,000 marks a year ago and 2,619,020,000
in Switzerland at 1
marks two years ago. Reserve in foreign currency
records an increase of 5,264,000 marks, silver and
HE Bank of England statement for the week other coin of 40,239,000 marks, notes on
other
ended Aug. 17 shows a contraction of £4,862,000 German banks of 2,343,000 marks, advances
of
in circulation, which together with a gain of £182,952 689,000 marks, investments of 1,000 marks and
other
1.4 bullion brought about an increase of £5,045,000. assets of 22,934,000 marks. Notes in circulati
on
The Bank's gold holdings now aggregate £139,602,249 reveal a contraction of 78,960,000 marks, reducing
as compared with £134,870,075. Public deposits de- the total of the item to 3,743,124,000 marks. Circreased £861,000, while other deposits increased culation last year stood at 4,237,313,000 marks and
£4,317,480. The latter consists of bankers' accounts the previous year at 4,229,137,000 marks.
No
T
O
T
T
Volume 135
change is shown in the item of deposits abroad. A
decrease appears in bills of exchange and checks of
132,905,000 marks while other daily maturing obligations and other liabilities rose 4,570,000 marks
and 13,098,000 marks respectively. The proportion
of gold and foreign currency to note circulation
stands at 24.0%, as compared with 39.7% last year
and 69.3% the previous year. A comparison of
the various items for three years is furnished below:
REICHSBANK'S COMPARATIVE STATEMENT.
Changes
Aug. 171932. Aug. 15 1931. Aug. 15 1930.
for Week
Reichsmarks.
Reichsinarks. Retchsmarks. Reichsmarks.
Assets—
Inc.
143.000
763,104.000 1,365,784,000 2,619,020,000
Gold and bullion
62,722.000
99.553.000 149,788,000
Of which depos.abr'd_ Unchanged.
Reeve in for'n curs— _Inc. 5,264.000 136,658.000 317,024,000 311,113,000
BllIs of exch.& checks.Dee. 132,905,000 2,938,161,000 3,104,000,000 1,418.138,000
88,494,000 167.172.000
Silver and other coin.. _Inc. 40,239,000 248,831.000
11,802,000
8,963.000
19,142.000
Notes on oth.Ger.bks_Inc. • 2,343,000
Inc.
689,000 106,849.000
99.857,000
77,370.000
Advances
Inc.
1,000 365,056,000 102,971,000 100,867,000
Investments
Inc. 22,934,000 800,748,000 911,993,000 679,419,000
Other assets
Liabilities—
Notes in circulation_ _Dec. 78,1160.000 3,743,124,000 4,237,313.000 4.229,137.000
Oth.daily matur.oblig.Inc. 4,570,000 338,489,000 525,587,000 446.946,000
Inc. 13,098,000 719,331,000 751,694,000 222,221,000
Other liabilities
Propos.of gold & for'n
0.6%
cur.to note circul'n.Inc.
24.0%
39.7%
69.3%
LTHOUGH rates for money in the New Y.ork
market showed no change this week, there
were several developments of some significance.
Open market purchases of United States Government
securities by the Federal Reserve banks were suspended, according to the statement issued late
Thursday. This is not likely to lead to any change
in the money market for the time being, as there is a
vast oversupply of credit owing to the heavy purchases of recent months. Important also was a
large increase in the monetary gold stocks, the statement of the Federal Reserve Bank of New York for
the week to Wednesday night showing a decline of
$42,450,000 in metal held earmarked for foreign
account, this being equivalent to an import. Actual
imports amounted to a further $3,030,000, while
offsetting exports were ,$6,004,000. The gain in
United States gold holdings since mid-June, when the
flow to Europe ended, is. now approximately $140,000,000. Call money on the New York Stock
Exchange held at 2% this week for all transactions,
whether renewals or new loans, while in the unofficial
street market transactions were reported every day
at 1%. Time money was unchanged. A Treasury
discount bill issue maturing in 91 days was awarded.
Monday at an average discount of 0.48%, as compared with 0.53% on a similar issue awarded a week
earlier. Brokers' loans against stock and bond
collateral declined $1,000,000 for the week to Wednesday night, according to the statement of the
Federal Reserve Bank of New York.
A
EALING in detail with call loan rates on the
Stock Exchange from day to day, 2% was the
ruling quotation all through the week both for new
loans and renewals. The time money market remains at a standstill this week, no transactions
being reported. Rates are quoted nominally at
13'1@1% for all dates. The demand for prime
commercial paper continued excellent this week but
paper is still scarce. Quotations for choice names
of four to six months' maturity are 2Yi@23/2%.
Names less well known are 2%%. On some very
high class 90-day paper occasional transactions at
WI% are noted.
D
RIME bankers' acceptances have been in good
demand this week, but the supply of paper is
still short and the market has been greatly curtailed
on that account. Rates are unchanged. The quo-
p
1207
Financial Chronicle
tations of the American Acceptance Council for bills
up to and including three months are 78% bid,
U% asked;for four months, 1% bid, and %% asked;
for five and six months, 13% bid and 1 3.'3% asked.
The bill buying rate of the New York Reserve Bank
is 1% for 1-90 days; 13/8% for 91-120 days, and
13/2% for maturities from 121-180 days. The
Federal Reserve banks show a decrease in their
holdings of acceptances, the total having dropped
from $38,720,000 to $35,890,000. Their holdings
of acceptances for foreign correspondents increased
a little, 'rising from $59,528,000 to $60,254,000.
Open-market rates for acceptances are as follows:
Prime eligible bills
SPOT DELIVERY.
—180 Days— —150 Days— —120 Days—
Asked.
Bid.
Asked.
Bid.
Asked.
Bid.
IX
1
134
34
13
134
—90Days- —60Days- —30Days—
Asked.
Bid.
Asked. Bid.
Bid.
Asked
Prime eligible bills
FOR DELIVERY WITHIN THIRTY DAYS.
Eligible member banks
Eligible non-member banks
134% bId
134% bid
HERE have been no changes this week in the
rediscount rates of the Federal Reserve banks.
The following is the schedule of rates now in effect
for the various classes of paper at. the different Reserve banks:
T
DISCOUNT RATES OF FEDERAL RESERVE BANKS ON ALL CLASSEDAND MATURITIES OF ELIGIBLE PAPER.
Federal Reserve Bank.
Boston
New York
Philadelphia
Cleveland_
Richmond
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Role in
Effect on
Aug. 19.
Date
Established.
Previous
Rate.
334
234
334
334
334
334
234
334
334
334
334
834
Oct. 17 1931
June 24 1932
Oct. 22 1931
Oct. 24 1931
Jan. 25 1932
Nov. 14 1931
June 25 1932
Oct. 22 1931
Sept. 12 1930
Oct. 23 1931
Jan. 28 1932
Oct. 21 1931
234
3
3
3.
c
3
33'.,
231j
4
3
4
234
TERLING exchange is dull and fluctuated this
week within a comparatively narrow ranger
although rates are on average fractionally higher
than last week, quotations did not touch either the
highs or the lows of a week ago. The comparativefirmness at present is due in part to curtailment in
the London funds coming to the New York security
markets and to profit taking by British investors
in New York. At the same time the market generally believes that there is still a considerable flow
of British funds to this side which entirely offsets
the seasonal requirements for sterling exchange which
normally gives firmness to the pound at this time.
The range this week has been between 3.46% and
3.49 for bankers' sight bills, compared with a range
of between 3.445A and 3.493A last week. The range
for cable transfers has been between 3.47 and 3.493/g
4 to 3.491A a
compared with a range of from 3.448
week ago. On the whole banking opinion seems to
be that sterling exchange will develop greater firmness in the next few weeks and it is generally believed
that in the late autumn and winter when exchange
is seasonally against London, excessively low rates
are not to be looked for. The British Treasury and
the Bank of England will be in a strong position to
offset the drain on London, which is not expected
to be as severe as in other years. The whole outlook
for sterling exchange and the London money market
is now greatly improved since the British war loan
5% conversion project has been successful. The
official announcement of the progress made up to
July 31 shows that £1,850,000,000 have been converted, while cash will definitely be demanded on
December 1 on only £48,000,000. Holders have
S
1208
Financial Chronicle
Aug. 20 1932
until September 30 to signify their wishes regarding
The above figures are for the week ended Wedthe remainder of the grand total of £2,086,000,000. nesday evening. On Thursday $79,600 of gold was
After September 30 the amount outstanding will be received from Mexico. There were no exports of the
converted automatically to the new 314% basis. metal on that day. Gold held earmarked for foreign
No difficulty is now anticipated since what remains account decreased $600,800. Yesterday there were
of the issue can be easily handled by means of short no imports or exports of the metal, but gold held
Treasury bonds bearing even less than 33/2% interest. under earmark for foreign amount decreased $375,000.
It is generally believed that most of the holders still
Canadian exchange continues at a severe discount
unheard from will simply allow their bonds to be with respect to the dollar although at a premium with
respect to sterling. On Saturday last Montreal
converted.
The conclusion of this great conversion loan will funds were at a discount of 13%, on Monday at
have a profound effect on the price of credit in the 13%, on Tuesday at 13%, on Wednesday at 13%,
London capital market for industrial long-term on Thursday at 13%, and on Friday at 12 13-16%.
Referring to day-to-day rates, sterling exchange on
borrowing, which was hard pressed by the necessity
of competing for accommodation with more than Saturday last was steady in a dull half-session.
£2,000,000,000 of war loans carrying a 5% coupon. Bankers' sight was 3.47%@3.48%; cable transfers
It is expected that the Government will promptly 3.4734@3.483/2. On Monday trading was dull and
lift the embargo on new issues. Much less is now sterling steady. The range was 3.47/
5 8@3.48%
heard of the possibility of a lower rediscount rate for bankers' sight and 3.47%@3.48% for cable
for the Bank of England or for the Federal Reserve transfers. On Tuesday the pound firmed up in late
Bank of New York. In fact the consensus of opinion trading. Bankers' sight was 3.47%@3.49; cable
in both markets seems to be that no further down- transfers 3.47%@3.4938. On Wednesday the marward revision will be made in these rates. The ket was dull and lower. The range was 3.473/2@
money markets of both centers nevertheless register 3.4734 for bankers' sight and 3.473@3.47% for
quotations from day to day very much below the cable transfers. On Thursday the market was dull
Bank rate. Throughout this week call money against with exchange steady. The range was 3.47 7-16(4)
bills in London was in supply at M% to Wi%. On 3.4734 for bankers' sight and 3.4732@3.47% for
Thursday London two-months bills were 9-16% to cable transfers. On Friday sterling was steady; the
-%%,three-months bills 11-16%,four-months 11-16% range was 3.46%@3.473/ for bankers' sight and
to 4
3 % and six-months 1%. For the past few weeks 3.47@3.473' for cable transfers. Closing quotations
the six-months maturities have been quoted 13/s%. on Friday were 3.473/i for demand and 3.473 for
Attracted by the high premium, gold has been flow- cable transfers. Commercial sight bills finished at
ing to London in larger quantities than ever since 3.4634; 60-day bills at 3.4534; 90-day bills at 3.45;
the suspension of gold on Sept. 21 last. Much of documents for payment (60 days) at 3.45% and
this gold was taken for reshipment to the Continent, seven-day grain bills at 3.46%. Cotton and grain
but the British Treasury and the Bank of England for payment closed at 3.4634.
make steady accessions to their holdings, paying
XCHANGE on the Continental countries in all
the difference between the official buying rate of the
main trends presents no new features from
Bank of England (84s 10d per ounce) and the prethose
of recent weeks although French francs are
mium by adjustments in the Exchange Equalization
ruling
firmer
and throughout the greater part of
Account. This week gold seems to have sold in the
London open market at from 118s to 118s 7d per the week ruled above par, which is 3.92. The firmounce. On Tuesday the Bank of England bought ness in the franc is due largely to official support
£164,853 in gold bars. This week the Bank of given mainly by the release of Bank of France earEngland shows an increase in gold holdings of marked in gold in New York. Most of the gold
£182,952, the total standing on August 17 at released from earmark at the Federal Reserve Bank
£139,602,249, which compares with £134,870,075 of New York during the past few weeks was for
a year ago. The Bank's ratio on Aug. 17 stood at French account, though it is believed that a great
36.29% compared with 33.39% a week earlier and deal of gold was also released for account of other
foreign central banks, particularly those of Belgium
with 45.84% a year ago. At the Port of New York the gold movement for and Holland. According to foreign exchange traders
the week ended August 17, as reported by the Fed- some of the firmness in francs is attributed to French
eral Reserve Bank of New York, consisted of imports profit taking in the New York stock market. The
of $3,030,000, of which $996,000 came from Canada, amount of commercial demand for francs is small
$1,401,000 from England, $396,000 from Mexico, and there is a total lack of supply. A small transfer
and $237,000 chiefly from Latin American countries. of French profits from the New York security
Exports totaled $6,004,000 to France. The Reserve markets could therefore easily firm up the rate. In
Bank reported a decrease of $42,450,000 in gold ear- some quarters the firmness is attributed to short
marked for foreign account. In tabular form the covering. In any event no great importance is
gold movement at the Port of New York for the ascribed to the upturn in francs and for the long pull
week ended August 17, as reported by the Federal the market is inclined to look for lower rates for
exchange on Paris. According to recent Paris
Reserve Bank of New York, was as follows:
dispatches it is rumored there that the Bank of
GOLD MOVEMENT AT NEW YORK, AUG. 11—AUG 17, INC.
France will soon reduce its official rediscount rate
Imports.Exports.
$8,001,000 to France
$998,000 from Canada
from 23/2%, where it has been since last October.
1,401,000 from England
398,000 from Mexico
However, opinion seems to be strongly divided as
237,000 chiefly from Latin
to this probability. It is pointed out that funds in
American countries
the money market are plentiful and that a reduction
$3,030,000 total
$6,004,000 total
in
the official rate would not increase credit applicaNet Change in Gold Earmarked for Foreign Account.
Decrease $42,450,000.
tions of the banks at the Bank of France. However,
E
Volume 135
Financial Chronicle
1209
it may be that within a few weeks the French Govern- import surpluses have shown a marked contraction.
ment may decide to proceed with the conversion of Thus Norway reports an import surplus of kr.
the State debt and in that event a reduction in the 67,000,000 for the first six months of this year comBank of France rate would be helpful. Foreign pared with kr. 183,000,000 in the same period a year
,
exchange conditions do not justify a change in the ago, Sweden kr. 133,900,000 against la. 193,520,000
41,500,000.
kr.
against
39,700,000
kr.
Bank rate. The total conversion contemplated by and Denmark
the French Government is said to be as high as In the case of Norway the value of exports actually
compared
80,000,000,000 francs. This week the Bank of increased, amounting to kr. 269,500,000
Reduc1931.
of
half
first
the
in
232,400,000
kr.
with
fr.
47,of
France shows an increase in gold holdings
countries
two
other
the
of
surpluses
import
the
in
tion
82,226,fr.
at
12
Aug.
108,576, the total standing on
imports
053,804, which compares with fr. 58,558,270,543 on resulted from a much greater decline in
Holland
Aug. 13 1931 and with fr. 28,935,000,000 when the than occurred in the case of exports.
par
unit was stabilized in June 1928. The Bank's ratio guilders are firmer and have ruled slightly above
demand
The
week.
the
of
stands at record high of 76.90%, compared with throughout the greater part
and
55.43% a year ago and with legal requirement of for guilders for commercial purposes is light
of
those
below
far
course
of
are
s
tourist requirement
35%.
in
attributed
is
firmness
present
The
German marks are steady and are only nominally other years.
quoted. Items of a political and business nature most quarters to profit taking by Amsterdam inlikely to have a bearing on the future position of terests in the New York security markets. However,
German exchange are discussed in another column. Dutch funds continue to seek this market and it is
Nothing can be known definitely as to the immediate hardly likely that the rate will firm up materially.
future of mark exchange or the solution of the various The trade position of Holland is not favorable to
fiscal problems confronting the Reich. German firmer guilder quotations, though the Bank of The
circles continue to discuss the possibility of a reduction Netherlands holds gold cover in excess of 100%
in the Reichsbank's rate of rediscount from the present above circulation requirements. The trade of Hollevel of 5% which has been maintained since April 27. land has suffered severely since last September,
German industrial interests are agitating strongly for especially with respect to its trade with England.
the decrease. However, the position of the Reichs- In the first half of 1931 Holland exported goods
bank is anything but strong. In fact it is weak and valued at 159,000,000 florins to England, but in the
German foreign trade developments in July were un- corresponding period this year such exports totaled
favorable. Many bankers doubt the wisdom of a only 80,000,000 florins. The value of Dutch imports
reduction in the rate at this time. There is little also declined, in keeping with the general trend of
chance of material improvement in the Reichsbank world trade, but the rate of decline was not as great
as in the case of exports. Dutch imports from
position.
Italian lire continue to display firmness. Firmness England in the six months ended in June amounted
in lire is attributed largely to the improved export to 65,000,000 florins, compared with 83,000,000
position of Italy. At present the rate finds support florins in the corresponding period a year ago. Swiss
from tourist requirements and immigrant remittances. francs are firm, and firmer than any other currency
The Bank of Italy continues to make slow but steady with respect to the dollar. In discussing Swiss
improvement in its gold reserves.
business conditions the Union Bank of Switzerland
at
The London check rate on Paris closed 88.43 on states in its quarterly report that "Swiss imports and
Friday of this week, against 88.71 on Friday of last exports for the first six months of 1932 amounted to
week. In New York sight bills on the French centre 906,000,000 francs and 417,000,000 francs, respecfinished on Friday at 3.923( against 3.91 11-16 on tively, the resulting adverse balance thus coming to
4 against 489,000,000 francs as against 399,000,000 francs for
Friday of last week; cable transfers at 3.928
3.91 13-16 and commercial sight bills at 3.92, against the corresponding period of the previous year. In
for percentages 54% of the imports were not balanced by
3.91%. Antwerp belgas finished at 13.88
bankers' sight bills and at 13.89 for cable transfers, exports, compared with 36% in 1931. The serious4 and 13.88. Final quotations for ness of the present export situation is illustrated by
against 13.871
Berlin mtlrks were 23.81 for bankers' sight bills and the fact that since the first quarter of 1932 imports of
23.82 for cable transfers, in comparison with 23.79 manufactured articles have exceeded exports. This
and 23.80. Italian lire closed at 5.12 for bankers' is the first time that such a situation has prevailed
sight bills and at 5.123/ for cable transfers, against since Swiss trade figures were collected."
Spanish pesetas are steady, giving no further indi5.113cI, and 5.119. Austrian schillings closed at
2, against 14.10
14.113/
exchange on Czecho- cation of weakness since the recovery from the drop
slovakia at 2.963/8, against 2.9634; on Bucharest at recorded on Wednesday of last week after the political
0.603, against 0.603; on Poland at 11.23 against riots in the Spanish cities. The Government made no
2, against 1.52
11.213/2, and on Finland at 1.523/
vigorous attempt to support the exchange. Bankers
Greek exchange closed at 0.63 for bankers' sight bills are inclined to believe that the peseta will climb
and at 0.633 4. for cable transfers, against 0.643 and steadily to probably around 8.50. The Bank of
0.64M.
Spain makes satisfactory progress in reducing its
note circulation. At the same time there is some
XCHANGE on the countries neutral during the improvement in its gold holdings. On August 13
war presents no new trends of importance. gold holdings of the Bank of Spain stood at 2,256,The Scandinavian currencies have fluctuated some- 300,000 pesetas, an increase of 300,000 pesetas over
what less widely, but of course continue to follow the previous week. A year ago gold holdings stood
13
the course of sterling, with which they are closely at 2,275,500,000 pesetas. Circulation on Aug.
4,849,with
compared
pesetas
allied. According to the Wall Street Journal the stood at 4,838,800,000
00
trade balance of the Scandinavian countries has 700,000 pesetas on Aug. 6 and with 5,422,100,0
Spanish
Minister
The
1931.
15
Aug.
of
nt
gold
on
and the pesetas
benefited by their abandonme
E
1210
Financial Chronicle
Aug. 20 1932
of Apiculture in a recent report shows that the
Closing quotations for yen checks yesterday were
foreign trade of Spain is strongly inclining toward 223/
2, against 253/ on Friday of last week. Hong
an export surplus.
Kong closed at 235 ® 23 11-16 against 23 13-16
Bankers' sight on Amsterdam finished on Friday ® 23%; Shanghai
at 30% ® 31 1-16, against 313/i
at 40.273/i against 40.253' on Friday of last week;
31 5-16; Manila at 4932, against 49 8; Singapore
cable transfers at 40.28 against 40.26, and commercial at 403/2, against
40 8; Bombay at 263.1, against
sight bills at 40.22, against 40.213/2. Swiss francs 263.1, and Calcutta at
263.1, against 2614.
closed at 19.483/b for checks and at 19.48% for cable
transfers, against 19.46% and 19.47. Copenhagen
URSUANT to the requirements of Section 522
checks finished at 18.5232
/ and cable transfers at
of the Tariff Act of 1922, the Federal Reserve
18.53 against 18.5932
/ and 18.60. Checks on Sweden Bank is now certifying daily to the Secretary of
the
closed at 17.8232
/ and cable transfers at 17.83, against Treasury the buying rate for cable transfers in the
17.873/i and 17.88; while checks on Norway finished at different countries of the world. We give below a
17.413/ and cable transfers at 17.42 against 17.423/2 record for the week just passed:
and 17.43. Spanish pesetas closed at 8.05 for bank- FOREIGN EXCHANGE RATES CERTIFIED BY FEDERAL RESERVE
BANKS TO TREASURY UNDER TARIFF ACT OF 1922,
ers'sight bills and at 8.053/ for cable transfers,against
AUG. 13 1932 TO AUG. 19 1932, INCLUSIVE.
8.04 and 8.043/2.
Noon Baying Rate for Cable Transfers in New York,
County and Monetary
Value Os United Slates Money.
•-•-•
Unit
Aug. 13. Aug. 15.1 Aug. 16. Aug. 17. Aug. 18. Aug. 19.
XCHANGE on the South American countries
EUROPE$
$
$
$
$
$
Austria,schIlling
139650 .1391350 .139650 .139650 .139650 .139650
continues to be nominally quoted and all ex- Belgium,
beige
138701 .138776 .138786 .138784 .138834 .138848
ley
007200 .007200 .007200 .007200 .007200 .007200
change and foreign trade operations are seriously Bulgaria,
Czechoslovakia, krone 029596 .029598 .029598 .029598 .029592
.029596
Denmark, krone
185576 .185738 .186041 .185266 .185107 .185008
hampered by Government appointed control commit- England,
pound
sterling
481517
3
3.480083 3.484166 3.474583 3.475916 3.470583
tees. The Brazilian Government in order to finance the Finland, markka
015280 .015220 .015180 .015280 .015180 .015280
France, franc
039179 .039204 .039202 .039201 .039221 .039229
extraordinary expenditures for the're-establishment Germany.
reichsmark 237903 .237964 .238128 .238017 .237978 .237964
Greece, drachma
006410 .006421 .006419 .006381 .006368 .006373
of public order has issued Decree No. 21,7.17, which Holland,
guilder
402528 .402750 .402778 .402685 .402714 .402703
Hungary, pengo
174500 .174500 .174500 .174250 .174500 .174500
authorizes the issuance of notes of the National Italy, lira
051150 .051183 .051215 .051240 .051252 .051249
Norway, krone
174130 .174107 .174461 .174016 .174061 .173923
Treasury for this purpose. In discussing the decree, Poland,zloty
111766 .111750 .1118613 .111660 .111825 .111825
Portugal, escudo
031500 .031483 .031583 .031500 .031500 .031483
Rumania,leu
Sr. Sebastiao Sampaio, Consul General of Brazil in Spain.
.005981 .005983 .005979 .005979 .005979 .005970
peseta
080178 .080535 .080453 .080319 .080435 .080457
Sweden, krona
New York, emphasized that "by such an action the Switzerla
.178669 .178546 .179007 .178407 .178415 .178158
nd, franc_ .194691 .194900 .194898 .194801 .194875 .194886
a, dinar
Government of Brazil is making a credit operation and Yugoslavi
.017000 .016937 .016950 .016950 .016975 .017062
ASIAnot a paper money issuance." "Article 1 of the De- China
Chef® tool.
314791 .314791 .317916 .318125 .317083 .815625
Hankow tool
311458 .311458 .314166 .314791 .312500 .313125
cree," Mr. Sampaio states, "is very clear on this
Shanghai taxi
304218 .304218 .306875 .307343 .305000 .306093
Tientsin tael
318541 .319375 .322083 .322291 .322083 .322708
matter. Due to the other provisions adopted in the
Hong Kong dollar__ .232031 .232187 .234375 .233125
Mexican dollar__ _ .210312 .209375 .211250 .210937 .232500 .233750
decree, the increase of circulating money is entirely
.209375 .209687
Tienteln or Pelyang
dollar
212916 .212916 .215416
prevented and a fixed lapse of time is assured for the
Yuan de.11,:w....... .22^-1323 .2f3L'1S3 .212083 .214583 .212500 .212500
.211250 .209168 .209188
India, rupee
.261250 .261250 .262250 .261500 .281500 .261000
recall of the transitory increase of the fiduciary money. Japan,
yen
.252187 .245500 .242125 .244500 .241500 .227050
(6.8.) dollar .401250 .400625 .401875 .401250 .401250 .400625
The Government declares also that it will issue only Singapore
NORTH AMER.
Canada, dollar
.86935 .869270 .869531 .869791 .869739 .871354
the amount strictly necessary. The part that will Cuba, peso
999175 .999100 .999237 .999125 .999100 .999100
Mexico, peso (silver) .288333 .288133 .287333 .287333
.287433 .287266
not be used will be canceled at the opportune time." Newfoundland. doll .887875 .867375 .867375 .867500 .867500
.809000
SOUTH AMER.Argentina
Argentine paper pesos closed on Friday nominally Brazil, , peso (gold) .585835 .585835 .585837 .585835 .585835 .585835
mllreis
.076225 .076225 .076225 .076225 .076225 .076225
Chile, peso
.060250 .060250 .080250 .060250 .060250 .060250
at 253.1 for bankers' sight bills, against
253. on Friday Uruguay, peso
475000 .474166 .474166 .474186 .474166 .474186
952400 .952400 .952400 .952400 .952400 .952400
of last week; cable transfers at 25.80, against 25.80. t7olombla. peso
Brazilian milreis are nominally quoted 7.20 for bankHE following table indicates the amount of gold
ers' sight bills and 7.25 for cable transfers, against
bullion in the principal European banks as of
7.20 and 7.25. Chilean exchange is nominally quoted
Augus
t 18 1932, together with comparisons as of the
63g, against 63/s. Peru is nominal at 21.00, against
corres
ponding dates in the four previous years:
21.00.
p
E
T
Banks of-
XCHANGE on the Far Eastern countries seems to
fluctuate rather widely. The Chinese units are
quoted fractionally lower than a week ago, owing
to the reduction in the prices of silver in the international market. Japanese yen moved down during
the week to new record lows. Par of the yen is
49.85. Yen sold this week as low as 223/2. The
current movement in the yen is directly contrary to
• opinions expressed in Tokio during the spring, when
yen were suffering sharp reverses. At that time
Japanese circles insisted that exchange would be
steady during the summer and even show some
improvement because of seasonal swings in trade.
The present decline indicates dissatisfaction with
the entire Japanese situation. On Thursday the
Bank of Japan lowered its rediscount rate to 4.38%
from 5.11%, which had been the rate in effect since
June 7. This is the lowest rate for the Bank of Japan
since the war and is a part of the official Japanese
policy to cheapen money in order to promote trade
andlto popularize bonds.
E
England.-France a-Germanyb_
Spain
Italy
Nethlands.
Nat. Belg_
Switz'land..
Sweden
Denmark
Norway_
1932.
£
139,602,249
657.808.430
35,019,100
90.244.000
61.392,000
85.054,090
75,095,000
89,157,000
11.443,000
7,400,000
7.911,000
1931.
£
134,570,075
468,466,164
65,011,800
91.015,000
58,063,000
52,810,000
44,708,000
31.919,000
13,208,000
9,544,000
8,130,000
1930.
£
155,365,515
375,617,843
123,461,100
98.926,000
53,645,000
32.558.000
34,521,000
25.060,000
13.476,000
9,567,000
8,142,000
1929.
£
138,202,004
307,809,296
107,513,200
102,569.000
55,793,000
37,326,000
28,932,000
20,287,000
12,971,000
9,585,000
8,153,000
1928.
£
174,823,209
242,155,596
107,318.650
104,337,000
53,281,000
36,243,000
22,950,000
17,983,000
12,776,000
10,100,000
8,166,000
Total week 1,260,125,779 977.445,039
Prey. week 1,259,345,158 970,599.036 930,334,458 829,140,500 790.113.455
928,589,953 824.445.639 789.122.782
a These are the gold ho dings of the Bank of
France as reported in the new form
of statement. b Gold holdings of the Bank of
abroad, the amount of which the present year IsGermany are exclusive of gold held
£3,136,100.
The Decline of Political Radicalism in
Europe.
One of the most striking political pheno
mena of
the period of the great depression has
been the decline in Europe of a kind of political
radicalism
which for a decade after the World War
had appeared to be increasingly in the ascendant.
The
radicalism in question was represented on
the Continent by organized socialism, and in Great Britai
n
by the Labor and Independent Labor
parties, both
of which latter were essentially sociali
st in principles and aims, although they did not take offi
Volume 135
Financial Chronicle
1211
of
ciallv the socialist name. The essence of socialism grew as time went on. The immense expansion
to
expected
was
government
which
services
as a philosophy was, of course, opposition to capital- public
ism and the substitution of the State for private support reacted to swell government expenditures,
individuals or corporattons in the control of natural raise taxes to almost confiscatory levels, increase . •
resources, utilities, means of production and dis- public debts and add to the difficulties of budgetary
tribution, and other primary forms of economic administration. On the theory that the government
activity. In practice, however, socialist propaganda owes everybody a living of some kind, the dole was
made much of the so-called class struggle, in which instituted to help the unemployed, and as unemployBritain
the interests of workers or wage-earners were pitted ment mounted to unexampled heights Great
system
the
which
in
countries
against the interests of employers or capitalists; and Germany,the two
running
themselves
found
elaborated,
and since the State, under existing circumstances, had been most
was assumed to be capitalist, a new form of society badly behind on the dole account, and with no proswas envisaged in which the workers should have pect of balancing that part of the budget even though
control. Political radicalism, accordingly, when it the dole were reduced. In none of the acute 'situadid not take the extreme forms of anarchism or com- tions which have developed during the present demunism, was usually identified with socialism, con- pression has European socialism had anything imservatism was linked with capitalism and branded portant to offer except the same kind of thing that
as reactionary, and liberalism, sympathetic with has been offered by socialists here—further expenmuch that socialism demanded but unable to break ditures by governments that were already running
with its capitalist associations, was left to swing into debt, more relief for more unemployed, more
public works for which an already overburdened
uncertainly between the two.
Representing as it did large bodies of voters, and public must eventually pay, more subsidies or redirected by leaders some of whom showed exceptional strictions for business or crops or shipping or railability and political skill, organized socialism was ways, more inflation of currency or credit, more
able to write into the statutes or graft upon admin- government borrowing and more national debt.
istrative policy substantial sections of its program There was nothing unnatural in this, for socialism
of reform. The list of social services supported or in practice has appeared to regard "the government"
directed by government was steadily enlarged, pri- as a resource for unlimited exi*nditure, but the past
vate control of business was more and more re- few years have shown Europe how great the drain
stricted, and government regulation of manufacture, has been.
If socialism has been discredited in Europe by its
trade, working conditions, wages and prices was expanded and made more and more minute. The trade costliness and its inability to help the business crisis,
unions, while by no means in all cases officially it has also been chastened into moderation by the
socialist, proved in general effective allies, and such communist movement. It is difficult to use the term
powerful bodies as the Trades Union Congress in. radical in connection with European politics withGreat Britain and the General Labor Confederation out some danger of confusion, because of the varied
in France were to all intents and purposes organ- groups or bodies of opinion to which it is applied.
ized exponents of socialist policy. Great Britain For most purposes, however, the political radicals
experienced the novelty of control by a Labor party of Europe, in the American sense of the term, ar(
whose principles and policies were socialist, the Ger- to-day the Communists, although they do not use the
man Socialists counted for much in the government term as a designation. In theory, at least, comof the Reich, and in many of the smaller countries munism is the extreme outcome of socialist doctrine,
of Europe the socialist influence was strong and ap- and in practice stands in unqualified opposition to
parently growing.
the established political and economic order and
To-day the situation has changed. The peak of labors to bring about the rule of the proletariat.
socialist influence appears to have been passed, and Of no importance in Great Britain, communism is
political radicalism of the familiar socialist stripe an aggressive political force in France and numericis on the wane. The British Labor party has passed ally a powerful force in Germany, while in a number
under a cloud, and its former leader, Ramsay Mac- of other countries its obstructive tactics keep it more
Donald, presides over a Government composite in or less constantly in the public eye. Into the comcharacter and with the Conservatives as its largest munist ranks, accordingly, have been drawn most
party element. German Socialists are still powerful of the extreme radicals of other political faiths, tonumerically, but they have been forced into a posi- gether with those who openly hope for revolution and
tion which at best is one of benevolent neutrality and are willing to use violent means to obtain it. Europolitical opportunism, and no longer have much pean socialism, however, has long since ceased to
chance of exerting any strong influence upon the speak in terms of violence, and in proportion as.
Government. In France, where the Socialists have communism has advanced, socialism has declined.
long been divided politically, the breach has widened. In no European country to-day are the socialists
Radical Socialists and Socialists being sharply op- greatly different from what in the United States
posed one to the other, and the Socialists refusing would be spoken of as advanced liberals, and in Gerto take part in a Government which the Radical many and France some of the leaders have a deSocialists nominally control. Italian fascism has cidedly conservative color. The language of socialvirtually made an end of socialism in that country, ism is still talked, although with decreasing emthe anti-monarchical movement in Spain is not phasis, and the evils of capitalist government are
socialist, and Russian communism, although pro- regularly arraigned, but there is little in the political
fessing to represent orthodox Marxian principles action of the parties that suggests the hope of fundawhile practicing State capitalism, is at sword's- mental social change. Communism has stolen the
socialist thunder, and socialism listens to the echo.
points with organized socialism everywhere.
A third influence that has weakened socialist
There are several reasons for the decline. Socialism. it has been perceived, was costly, and the cost radicalism, and also the diluted radicalism of polit-.
1212
Financial Chronicle
Aug. 20 1932
ical liberalism, in Europe is the impressive example paper, "Ii Popolo ,d'Italia,"
hails the Hitler moveof Italian fascism. Where socialism seeks a demo- ment as marking "the
clamorous and ruinous failure
cratic reorganization of society on the basis of pro- of socialism as a governm
ent party." The socialist
letarian rule, fascism rejects democracy as a theory attack upon capital has
failed, and while capitalism
'of government, erects the State as the supreme ob- will have to reconsi
der some of its methods before
ject of devotion, and embodies the State in a dictator a sick world can
be brought back to health, the
whose word, for all practical purposes, is law. It essential forms
of a capitalistic society will remain.
is the twentieth century application of the eighteenth There are some dangero
us cross-currents, and it
century theory of enlightened despotism. When Italy, would be idle to
assume that a peaceful progress
after a period of violent political struggle, passed toward order, econom
y and freedom from unwise
under the rule of Mussolini and fascism became the government interfer
ence is assured, but it is in the
basis of the Italian State, Europe shuddered at the direction of such conservi
tive policies, and not in
loss of parliamentary government by the Italian that of further radical
experiments, that the Europeople, and affected to see in the arbitrary course of pean tide appears to be setting.
the dictator an evidence of weakness which must before long bring the new system to an end. There is no
Nursing Closed Bank Assets.
longer any disposition to predict the downfall of
In making public steps taken to conserve the assets
Italian fascism, and the benefits which fascist rule of
closed banks in the Philadelphia metropolitan
has brought are matters of common knowledge.
district and to bring about liquidation without
Whether or not Italy, disrupted politically and
dumping securities upon a market none too strong,
socially by the World War and torn by the quarrels Dr.
William D. Gordon, Secretary of Banking of
of socialists and trade unionists, was a peculiarly
Pennsylvania, is following a course which tends to
fertile field for a fascist experiment, the success of
allay apprehension among bank creditors and at the
Mussolini and his system has been contagious. Half
same time to prevent demoralization in a sensitive
the countries of Europe have had or now have inmarket. The plan and the effect of its operation may
cipient fascist movements, and the superiority of be
helpful to Banking Departments in other States.
fascist methods to those of representative parliaSecretary Gordon's first act towards stabilization
mentary governments is everywhere seriously disin the marketing of assets of closed banks was to
cussed.
have the Pennsylvania Legislature pass a law extendOnly by contrast to other and more inefficient
ing the period of liquidation of real estate three years
political systems is fascism to be thought of as a
and authorizing the leasing of such real estate as
radical movement. In essence it is highly and even
may not be readily marketable. Owing to the pracextremely conservative. It rejects popular governtice of establishing branch offices the number of
ment and democracy because of its belief that the
bank buildings thrown upon the market during the
people, left to themselves, are incapable of governing
past three years much exceeds the number of inwisely, and it magnifies personal leadership because
solvent banks. These structures, while well located,
without it the State falls into weakness and disare chiefly only adapted to banking or insurance
order. It tolerates neither socialism nor communism,
uses. As no new banks are now being formed and
and turns away from liberalism as an untenable
none of the older and larger banks have as yet serimiddle ground. For debate it substitutes action, ously
contemplated adding to its list of branches,
for speculation a practical record of accomplishment, the
buildings made vacant by the insolvencies are a
and for disorder a strict enforcement of law. It is drug
in the market, and some of them, although well
impossible to reconcile fascism with any of the timeconstructed, are not worth much more than the value
honored conceptions of personal or social liberty, and of
the sites they occupy unless some means be taken
one may still doubt whether the system can endure to
overcome this handicap.
once a masterful leadership is removed, but it is
Even with the aid of the extension act it is doubteasy to understand why, in a time like the present, ful if any Aladdin
with a financial lamp will be able
European political thought should more and more to bring about
a normal demand for vacant bank
turn to fascism as a possible way out of trouble and buildings within
three years, but plans may be deperplexity.
vised to enable the structures to serve some
new
The obvious political trend of Europe is away purpose.
from radicalism and toward conservatism. Party
The Pennsylvania banking laws do not
permit
names hold on as they are likely to do everywhere, Philadelphia
State banks to establish branches in
but party principles yield to the practical necessi- adjoining countie
s; otherwise branch banks would
ties of the time. In the welter of political interests be opened
at once in Delaware and Montgomery
and controversies in which Europe moves, one hears counties where
they are much needed in populous
more and more clearly the demand for strong and suburba
n centers.
efficient government equipped with definite and
According to Dr. Gordon's statement the closed
• positive policies. It is the hope that this demand banks in Philadel
phia* and adjoining counties held
may be met that keeps Mr. MacDonald in office in securities
free of pledge or pledged appraised at
Great Britain and supports the Government of M. $29,000,
000 when they failed. Financial markets of
Herriot in France. The spectacular rise of the Hitler the past
two years have been unfavorable for liquidamovement in Germany may or may not give Germany tion, and
if there were any way by which forced
a fascist regime; at the moment the Reich is mark- liquidation could be stayed
and modified it occurred
ing time, waiting, perhaps, for Hitler's personal that such relief should
be sought.
ambitions to moderate; but the Hitler movement, in
Only about $1,500,000 has been realized thus far
spite of its theatrical accompaniments, aims chiefly on these assets, and there
remain in the Banking
at a change,and the von Papen Government,if it con- Department $10,000,
000 par value of bonds and
tinues, will certainly be neither democratic nor 85,000 shares of stock aside
from the closed bank
radical. It is significant that Mussolini's Milan stocks and Building and Loan
shares. .Breaks in the
1213
Financial Chronicle
coaches weighing 195 tons excluding the locomostock market of March and June this year interfered six
tive and tender.
materially with the liquidation of these assets.
We Americans might fittingly describe this as
Unlisted securities may only be sold by a liquidatsome," since such a feat has never been preing trustee subject to the approval of a Court within "going
viously equaled or even approached, either here or
two weeks, a provision which destroys the market
any other country in the world. It is a record
for such assets. A new law has been enacted in in
noting, for it is an indication of what the
Pennsylvania to overcome this difficulty by remov- worth
railways are still capable of achieving at a
ing barriers,so that a prospective buyer may have the steam
when other agencies of transportation are atopportunity of acting quickly should he wish to dis- time
tracting much attention. One of the greatest assets
pose of the securities bought.
d by the steam railroads everywhere in their
Municipal bonds of a par value of $10,000,000 in possesse
ion with motor transportation, and
competit
the custody of the Banking Department are favor- present
their future competition with the
be
well
may
what
ably affected by the new act.
ability to provide high speeds
their
is
e,
aeroplan
Machinery to aid in liquidation provides for a
comfort, dependability and complete safety.
committee of well-known bankers in each of the five with
It is quite evident that there can be no finality in
Pennsylvania districts to whom the Secretary of
railway speed; it must progress in a proBanking may submit a list of securities of closed steam
age, and it is useless to contend that greater
banks for the purpose of determining a fair valua- gressive
unnecessary, uneconomical and undesired
tion and a price which the Secretary would be justi- speeds are
traveling public to-day.
fied in accepting,investment houses being consulted. by the
With the facts and opinions before it, the DepartGerman Railways and Reparation Payments.
ment of. Banking fixes what it regards as a fair
In view of the fact that the German Railway Commarket value and withholds such securities as give
(Deutsche Reichsbahn Gesellschaft) plays such
promise of improvement, the remainder being offered pany
in the question of reparation payments,
for sale. Listed securities being more stable and a vital role
its operations might be considered of imhaving a more ready market are placed in the hands a study of
at this time.
of a prominent banking house which endeavors to portance
g revenues in 1931 amounted to 3,operatin
The
market them around the price determined upon.
reichmarks, representing a decline of
While the effect is to obtain as high a price as 849,000,000
d with 1930; and 28% below that
possible for the securities, sound discretion is en- 16% as compare
1929. Freight revenue fell off approxdeavored to be exercised rather than to follow a rule reported for
imately 19% compared with 1930 and 34% compared
of thumb plan.
was due chiefly to the slump
Thus far, under exceptionally adverse market con- with 1929. The decline
reductions in rates, some
the
to
not
and
ditions, the machinery for liquidation is operating in traffic
as far back as 1930. Paseffective
became
as satisfactorily as the unusual circumstances will of which
of 15% when comdecrease
a
showed
revenue
senger
permit.
19% as against
of
and
year
previous
the
with
pared
EsBritain
—Great
1929.
Trains
for
er
of
Passeng
those
Speed
tablishes a New Record.
In spite of the fact that wages were cut several
of employees
It has frequently been contended in this country, times within the year and the number
total pay
the
especially in regard to long distance passenger travel, reduced from 700,000 to about 664,000,
.
g
expenses
that the traveler usually is unconcerned as to whether roll comprised 71% of all operatin
in
operatrks
reichma
The decrease of 721,000,000
he reaches his destination a half-hour earlier or
by
alanced
counterb
later. This is apparently untrue, because it has ing revenues was to some extent
000
468,000,
of
expenses
g
only been by the gradual process of attrition that a total reduction in operatin
operation still repassenger-train speeds have reached their present reichmarks, but the total cost of
of which,railway
ks,
reichmar
0,000
level; otherwise we would still be traveling at the mains at 3,623,00
25% and reance
mainten
62%,
operation absorbs
speed of the first railway trains.
s out of
Payment
ion
Reparat
Leaving
In the matter of passenger-train speed we have newals 13%.
g exoperatin
exceeded
revenues
g
operatin
always referred with pride to the 55.5-mile run made account,
operatthe
that
so
ks,
reichmar
000
226,000,
by
by the Reading Railroad from Camden to Atlantic penses
as
City in 42 minutes and 33 seconds, at an average ing ratio for the year 1931 is reported as 94.12
1930.
in
89.50
with
d
compare
speed of 78.3 miles per hour. However, last month
However, when including the amount of 635,000,the Great Western Railway in England put on a
reichmarks, which is the sum due on the reparaed
in
000
possesshow that leaves that company undisput
bonds, the expenditures of operation exceed the
fastest
the
yet
tion
speed
for
the
of
world's
record
sion
achieved from start to stop by a steam passenger total revenues by 408,000,000 reichmarks. In order
train. On September 16 1931 the "Cheltenham to meet this debit balance and to provide in addition
Flyer" operated by the Great Western between 16,500,000 reichmarks for preference dividends and
Swindon and London cut its 67-minute schedule to 17,000,000 reichmarks for writing off concession, the
reich58 minutes 20 seconds for the 77.3 miles, attaining company was compelled to draw 442,000,000
for
Charges
fund.
reserve
y
a start to stop average of 79.5 miles per hour. Last marks from its statutor
were
shares
ce
on
s
preferen
dividend
month, however, this same train made the extra- the service of the
ordinary time of 56 minutes 47 seconds, which with covered by the special fund formerly set aside for
statuits average from starting to stopping of 81.68 miles this purpose. By meeting these obligations the
000
450,000,
from
fell
balance
credit
fund
or
reserve
equal
no
known
superior. In tory
per hour has now
for
the
fund
special
the
0
and
8,000,00
to
an
rks
feat
ent
reichma
average
magnific
speed
this
performing
00 to
of 87.5 miles per hour was maintained continuously reserve of the preference shares from 78,000,0
the
under
extens
ks.
Payment
reichmar
0
for
hour
per
30
2.700,00
miles
on
90
miles,
and
miles,
for 70
by borrowed funds
a virtually level track, with a train consisting of sion account, which are covered
Volume 135
1214
Financial Chronicle
or other capital resources, were considerably curtailed as compared with last year and only amounted
to 70,400,000 reichmarks.
Far value of the reichmarks is $0.2382.
Aug. 20 1932
rowers in connection with loans for the purchase or repair
of equipment. This they are not inclined to do at the present
time, though in the event that money rates remain low during the next few months it is not improbable that they will
eventually accede to the demand on the part of borrowers
for some concession from the present high rate being charged
them.
Questions Interest Rates Charged by Reconstruction Finance Corporation—Some Rail
Executives Disapprove Policy of "Redis- Hesitancy of Railroads to Adopt New Methods
to Meet Changing Conditions Viewed as One
count" Profit.
CHARLES F. SPEAR in Newark "News."
Reason for Diversion of Traffic to Motor
For the first time since it began operations six months
Trucks.
ago the policy of the Reconstruction Finance Corporation
CHURCH FREIGHT SERVICE INC.
in making a profit on the interest which it charges borrowers
100 Broadway—New York City
Is being openly questioned. It has been definitely raised
August 8, 1932.
railroads
by the
in connection with the plan of the ReconTo the Editor,
struction Finance Corporation to lend them money at 5%
Commercial & Financial Chronicle,
to purchase or repair equipment.
25 Spruce St., New York.
Some of the objecting railroad managers are asking why
Dear Sir:
the Reconstruction Finance Corporation should impose even
The enclosed editorial from "Railway Age" describes a
this less-than-the-average-rate on them when it can borrow
recent happening of vital significance to your readers,—
money on a much lower basis. Up to this time borrowers especially to
those who hold railroad securities—securities
have been glad to get accommodations at the going rates that are now worth only a fraction
of their former value.
and have not haggled over them. Some of the most imRailroad executives blame this slump in value on bad
pecunious would have been glad to pay more, had this not business conditions and on the fact that motor trucks take
violated statutory limitations as to maximum interest rates. the cream of their tonnage. These do account for some of
it; but the point is, as shown by the editorial, that railroad
They were in the position of the individual who was forced
hesitancy to adopt new methods to meet changing conditions
by circumstances to put a second or third mortgage on his is mainly
responsible.
property and pay commissions that amounted to carrying
Yours very truly,
.charges of as much as 15%. He had no other recourse.
ELIHU CHURCH,
A study of the financing by the United States Treasury
President.
The editorial enclosed, from the "Railway Age" of July
-for the first seven months of this year indicates that in this
period it has negotiated various short and comparatively long- 23, follows:
term loans in the amount of $4,739,000,000. The average
HOW END SUCH DIVERSION OF TRAFFIC?
yield on these loans, at the price at which they were sold,
An alert and aggressive promoter of a freight container
has been 1.87%. This includes a large number of ninety- service some months ago entered into an agreement with
two railways for the handling of his container. One of the
.day Treasury bills which were marketed on a bank discount
types he offers is insulated and is a device for the movement
of small shipments at temperatures as low as zero. It is
.basis last month well below /
1
2 of 1%. The average rate on
.seven issues, whose maturities are from one to four years, a device which conceivably might revolutionize the marketing of food-stuffs, since it would permit small shipments
wras 2.66%.
of frozen foods to local points which cannot take perishIt is fair to assume from this, therefore, that the cost to ables in carload lots.
Having reached agreements with these two railroads,
The Government of the money which it has borrowed in
which filed tariffs covering the use of these containers, the
behalf of the Reconstruction Finance Corporation and which
promoter's task became one of finding shippers who would
the latter in turn has lent to banks, railroads and other
use it. Here his principal difficulty was the narrow terricorporations, has not averaged much in excess of 2/
1
2%. tory served by the two railroads which had tariffs permitting their movement. A shipper of fish would be glad
The great bulk of it has been reloaned to distressed borto use the containers, but not unless he could cover all points
rowers at 5/
1
2% to 6%. This is better than a member bank
in two or three states with them. He could not afford to
in the New York Federal Reserve district can do in dischange his entire method of distribution to serve points
counting at the official rate of 2/
1
2% and charging its clients reached by these two railways only.
the usual country bank rate of 6%.
A large distributor of frozen foods was slow
to commit
himself. Finally a situation arose where he could send a
The situation involved in this spread between cost of
considerable
shipment by this means at a saving in cost
money to the Reconstruction Finance Corporation and subto him, and at the same time give the new device a trial.
sequent cost to borrowers has developed the query whether
This was just the opening the promoter had been awaiting.
the Reconstruction Finance Corporation is in the banking
Satisfy this shipper, and he could forsee thousands of tons
business or whether it is an agency of the Government that from him moving in insulated containers
within a few
months. He guaranteed that he would supply the needed
ta expected to help out institutions and corporations in
containers
and would see to it that they reached destinatrouble at the lowest possible expense to the latter. A
tion at the appointed time.
commercial bank with an annual turnover equivalent to
Then he went to a railroad traffic department to make
that of the Reconstruction Finance Corporation and able to
the necessary arrangements, since the destination
not
show a gross profit of over 100% in its discount item would
on a line which had tariffs covering his containers. was
Various
objections were raised, among them legal ones, although the
be the envy of its competitors. It could afford to take a
promoter had opinion of competent railroad counsel that
considerable amount of risk on loans and to write off subprobably these objections were not important. Real or
stantial losses each year and still be able to add a sizable
fancied, however, and whether ascribable to law, to regulaamount to its surplus and undivided profits.
tory authority or to the traffic department itself, the
obIf the cost of money to the Reconstruction Finance Cor- stacles were there. After exhausting all
the time available
before actual movement was necessary, the traffic departporation averages, say, less than 2/
1
2%, what would be a
ment finally vetoed the promoter's proposal. He had but
fair rate to charge borrowers? Apparently the railroads
one
that have been willing to pay 6% to keep approaching glad alternative. He sought out a truck operator who was
to get the business under the same conditions the promaturities from going into default now feel that 5% is an
moter offered to the railroad and at the railroad rate for
unreasonable interest charge to exact when it involves the 400-mile movement. Moreover he would throw in
storedoor delivery free. The promoter telegraphed the traffic depurchases or maintenance that do not have to be put through
partment officer with Whom he had been dealing substanin order to permit their properties to function.
as follows:
The general feeling seems to be in these quarters that tially
Shippers were unwilling to wait longer for railroad action. Trucking
concern
offered to do the job for railroad rates including pick-up and dethe rate should be 4/
1
2% at the maximum and that where
livery. Shipment moves to-day. Will arrive at destination Monday
mornthe borrower is of exceptional credit it should not be in
ing. You know how hard I worked to keep it on your rails
and off the
excess of 4%.
highway.
The shipment was conveyed successfully by truck. Shipper,
Obviously the problem before the Reconstruction Finance
Corporation directors would be one of leveling down all consignee, trucker and container promoter were pleased.
Interest rates if they gave preference to the railroad bor- The volume of this traffic thus diverted to the highway
shows every promise of attaining a heavy volume.
Financial Chronicle
Volume 135
1215
Gross and Net Earnings of United States Railroads for the
Six Months Ended June 30
in commenting'upon the earnings of United States
railroads for the first six months of last year we
said that it was a dismal record which the figures
for that period presented because of the enormous
losses in gross and net earnings alike,- as compared
with the corresponding period of the previous year,
and the showing appeared all the worse by reason
of the fact that these losses followed very heavy
losses in the year preceding (1930) as compared with
the year before. The same remark applies to our
compilations for the first half of the current year.
These make an even more dismal showing, inasmuch
as further heavy losses in both gross and net have
been piled on top of the heavy losses of the two
previous years, making a cumulative record of declining revenues extending over a period of three
years which is startling by reason of its magnitude
and which surely has no parallel in the past.
Gross earnings for the first six months of 1932
fell $584,780,093, or 26.77%, below those of the first
six months of 1931, and the net earnings fell off
$149,889,660, or 31.80%. Standing alone, this would
have to be considered a very poor exhibit, furnishing
occasion for much regret, but when the shrinkage is
joined with the very heavy shrinkages of 1931 and
1930, the decline assumes the aspects of a great And
grave calamity such as it really is. For the six
months of 1931 our compilations registered a loss
of $503,786,279 in gross and of $147,407,933 in net
earnings, and this came after a loss in 1930 as compared with the first six months of 1929 of $324,823,450 in gross and of $199,587,164 in net. What a
frightful havoc has been worked when the losses of
the three,years are combined will appear when we
say that the gross earnings for the half year of 1932
are down to $1,599,138,566, whereas for the corresponding six months of 1929 the total was $3,062,220,645. In other words, in the three years the
amount of the gross has been cut almost in two. The
net earnings make an even worse comparison for this
three-year period, the amount for 1932 at $321,450,701 comparing with $818,154,445 for the first
half of 1929, showing that the shrinkage in the net
earnings in these three years has been fully 60%.
We would have to go back to 1921 to find a total of
the net as small as that for 1932, and all the way
back to 1915 to find a total of the gross of such
diminutive size as that for 1932. As was the case
in 1931 all through the half year of 1932 the exhibits
have been poor, revealing large losses in both gross
and net earnings, the significance of which was increased by the fact that these losses in 1932 came
on top of heavy losses in the corresponding period
of the two previous years.
Jan. 1 to June 30.
1932.
MPes of road
1931..
Inc. (-1-) Or net. (--).
242,008
8
1,599,138,566
Gross earnings
1,277,687,865
Operating expenses_
79.90%
Ratio of earns. to exps.
242,002
8
2,183,918,659
1,712,578,298
78.42%
+6
$
—584,780,093
—434,890,433
+1.48%
321,450.791
471,340,361
—149.889.660
Net earnings
+0.01
--26.77
--25.39
--31.80
Two advantages a(Trued to the railroads early in
1932, and much was expected as the result to the
carriers, but the results proved disappointing in both
cases, and whatever gains accrued to the carriers
from these favorable events was more than swallowed
up by the steady intensification of business depression which in its widespread and growing embrace
-•
pulled everything down lower and sun- lOwer. We
have in mind in the first place that at the very beginning of the year the carriers got the benefit of an
increase in freight rates authorized by the InterState Commerce Commission. Strong hopes of better results were built on this circumstance. The-advances permitted were put definitely into effect on
Jan. 4. TO be sure, they were very moderate increases and applied to only a limited list of articles
and commodities, but such as they were they were a
favoring influence, and it was supposed their presence would be reflected in some degree at least in improved returns, whereas the opposite proved to be
the case, heavy losses in gross and net earnings for
January being recorded after severe shrinkages in
each of the two years preceding. It is true that
January 1932 labored under the disadvantage that
it had one less working day than did 1931 and other
recent Januaries, it having contained five Sundays,
whereas in the year immediately preceding January
had only four Sundays, leaving, therefore, one working day more in these other years. However, this
was a relatively minor circumstance in the general
downward trend, though very likely this loss of a dayserved to offset the advantage derived from the
higher rates authorized by the Commerce Commission, which increase in rates was, as already indicated, quite moderate after all.
The second favoring event we have in mind was the
10% reduction in wages agreed upon between the.
roads and their organized bodies of labor employees,.
as represented by the different Railroad Brotherhoods. This reduction in wages became effectiveFeb. 1. Nevertheless, the showing for February
was a poor one, notwithstanding the double advantage of the reduction in wages and the advance in,
freight rates, limited though the latter was, and notwithstanding also that 1932 being a leap year, February had an extra day,though the amount and ratie
of falling off in February was somewhat smaller
than that in January. And so the experience continued month after month, with heavy losses the.
dominant feature and no relief in sight for the carriers right up to the end of the half-year, and,in fact,
right up to the present time.
•
Obviously, however, there is nothing surprising
in all this, and in summarizing the results and the
causes of them we can only repeat what we said in
commenting on the showing for the first half of 1931„
and likewise that for the first half of 1930, namely,
that the record of earnings of the railroads in that
respect is like that of all other business records for
the half-year; that is, distinctly and emphatically unfavorable and devoid of encouraging features of any
kind. Business depression-of the severest kind, after
having reduced traffic and revenues in 1930 an
again in 1931, reduced them still further in 1932 as
the depression became intensified and assumed a,
greatly aggravated form. In all this, the railroads
have simply reflected prevailing industrial conditions, and this is what was to be expected, seeing
that they are the great transportation arteries of
the country. Speaking generally, 1929, the last year
in the cycle of prosperity, was a time of great and
growing industrial activity, even though not all
lines of trade, nor all sections of the country, then
1216
Financial Chronicle
Aug.
20 1932
is estimated at no more than 7,567,769 tons as against
15,559,860 tons in the first half of 1931; 23,578,619
tons in the first six months of 1930, and 29,036,274
tons in the first six months of 1929. The extent of
the contraction in this instance is of such magnitude
that it would be unbelievable except that the figures
are authentic—a production of only 7,567,769 tons
in 1929 as against 29,036,274 tons three years before.
The statistics Of coal production may also be referred
to as an index of the general shrinkage in traffic.
Mining of soft coal in the United States for the six
months of 1932 reached no more than 144,588,000
tons as against 189,797,000 tons in 1931; 230,634,000
tons in the corresponding period of 1930, and 257,847,000 tons in the same period of 1929, the falling
off in this case for the three years having been 113,-*
259,000 tons. The Pennsylvania anthracite output
was 24,162,000 tons during the first six months of
1932 against 31,542,000 tons in the first six months
of 1931; 33,193,000 tons in the .first six months of
1930, and 35,517,000 tons in the corresponding six
months of 1929.
We need hardly say that there was concurrently
greatly lessened activity in the building industry.
The F. W.Dodge Corp. reports that the construction
contracts awarded in the 37 States east of the Rocky
Mountains involved an estimated outlay in the first
half of 1932 of only $667,079,700 against $1,792,494,700 in the first half of 1931; $2,638,013,300 in
the same six months of 1930, and $3,667,983,000 in
the first half of 1929. This falling off in contemplated new building projects involved of course a
great falling off in the cut of lumber, which for the
26 weeks ending July 2 1932 reached only 2,751,901,000 feet as against 5,218,633,000 feet in the correGross Earnings.
Ne Earnings.
sponding weeks of 1931, a decrease of 47%. As
Month.
1932.
1931.
Inc. or Dec.
Inc. or Dec.
1932.
1931.
compared with 1930, when the cut was roughly
7,200,000,000 feet, the reduction was approximately
Jan. _ _ 274.976,249 365,522,091 —90,545,842 45,940.685 72,023,230 —26.082,545
Feb. _ _ 266,892,520 336,182,295 —69,289,775 57,375,537 66,078,525 — 8,702.988
62%. As it happens, there was also a huge falling
March_ 289,633,741 375,617.147 —85,983,408 67,670,702 84.706.410-17.035,706
April_ _ 267,473,938 369,123.100 —101,649,162 56.263,320 79,185,676 —22 922,356
off in the grain traffic over Western roads. We
—33,623,278
May_ _ 254.382,711 368.417,190 —114,034,479 47,429,240
June
245,860,615 369.133,884 —123,273.269 47,008,035 89,688,856 —42,680,821
analyze these grain figures in a separate paragraph
Note.—Percentage of increase or decrease in net for above months has been:
further along in this article and will only say here
Jan.. 36.21% dec. Feb., 13.17% dec. March, 20.11% dec.: April, 28.94% dec.;
May. 41.48% dec.: June, 47.58% dec. Percentage of increase or decrease in gross
for above months has been: Jan., 24.77% dec.; Feb., 20.61% dec.; March.
that for the 26 weeks ending with July 2 1932 the
22.89% dec.: April, 27.53% dec.; May, 30.95% dec.: June, 33.39% dec. In
January the length of road covered was 244,243 miles in 1932, against 242,365 miles
receipts
of wheat, corn, oats, barley and rye at the
In 1931; in Feb., 242,312 miles in 1932, against 240,943 miles in 1931: in March,
241,996 miles in 1932, against 241,974 miles In 1931; in Apri., 241,976 miles in
Western
primary markets aggregated only 227,against
242,183
241.992
miles
May,
in 1931:10
241,995 miles in 1932,
1932, against
miles In 1931: in June, 242,179 miles In 1932, against 242,527 miles In 1931.
603,000 bushels as against 346,587,000 bushels in the
As in the case of all of the separate months, evi- corresponding period of 1931.
A composite picture of the railroad traffic movedence of the shrinkage in traffic is to be found on
every side. We need hardly say that the automobile ment as a whole is found in the statistics showing
industry suffered beyond all others. The number the loading of railroad revenue freight measured by
of motor vehicles turned out in the first six months the number of cars moved. The figures in this case
of 1932 was only 871,423 against 1,572,935 in the first relate to the railroads of the entire country and
half of 1931; 2,198,589 in the corresponding six include all the different items of freight. For the 26
months of 1930, and 3,225,443 in the same six months weeks of 1932 the aggregate number of cars loaded
of 1929. It should not escape notice that the out- was only 14,112,144 against 19,020,485 cars in the
put in 1932 was only about one-quarter of that of same period of 1931 and 23,216,874 cars in the
1929. The iron and steel statistics furnish conclusive same period of 1930 and 25,616,953 cars in the
evidence of the tremendous all-around contraction same weeks of 1929. Perhaps it should also be added
in business. According to the compilations of the as an indication of the reduced number of traffic
"Iron Age," the make of iron in the first six months units handled that according to reports just compiled
of 1932 was barely half of that of the first half of by the Bureau of Railway Economics the volume of
1981, the product in 1932 having been 5,168,814 tons freight traffic moved by the Class I railroads of the
as against 11,105,373 tons in the first half of 1931. country in the first six months of 1932 amounted to
Going back further, the make of iron in the first 127,935,913,000 net ton-miles, a reduction of 46;
halt of 1930 was 18,261,312 tons, and in the first 407,998,000 net ton-miles or 26.6% under the correhalf of 1929 21,640,960 tons. In other words, sponding period in 1931, and a reduction of 84,309,roughly 16,500,000 tons less of pig iron were made 154,000 net ton-miles, or 39.7% under the same period
in the first half of 1932 than in the first half of 1929. of 1930. Railroads in the Eastern district for the
The steel statistics tell a similar story. For the six months' period in 1932 reported a reduction of
first six months of 1932 the output of steel ingots 24.5% in the volume of freight traffic handled cornshared in the activity to its fullest extent. On the
other hand, 1930, 1931 and 1932 have constituted
a period of very pronounced depression, with trade
on a decline and traffic and revenues steadily shrinking until in many cases they came close to the vanishing point.
While trade prostration, steadily growing in intensity, was unquestionably the primary cause of the
collapse of railroad traffic and railroad revenues,
the carriers, as in other recent years, unfortunately
had some drawbacks of their own to contend against
which should not be altogether overlooked. The railroads in all recent years have been constant sufferers from the competition of other means of transport, such as the motor truck and the motor bus, and
other similar forms of conveyances, this competition
extending not alone to the passenger traffic, where
it has been simply working havoc with the steam
roads, but also to an increasing degree to short-haul
freight. Just how much further this served to
diminish earnings during the last three years, there
is of course no means of knowing.
As already indicated, the falling off in earnings
continued through all the different months of the
year, in both gross and net, and this Was a repetition
of the experience during the'first six months of 1931,
as also of 1930. In the following table we furnish
comparisons for each of the different months of 1932;
and from an examination of the figures it will be
seen that the poorest showing of all was made in
the closing month of the half-year, namely, June,
which month showed a loss in gross of no less than
$123,273,269, or 33.39%, and a loss in net of $42,680,000,821, or 47.58%.
pared with the same period in 1931, while the Southern district reported a reduction of 28.8%, and the
Western district a decrease of 28.4%.
As to weather conditions, which often are an important factor affecting traffic and revenue in the
early months of the year, the winter of 1932, like
that of 1931, was exceptionally mild virtually everywhere,and interfered in no essential particulars with
the running of trains or the movement of traffic.
As we have,indicated above, the grain traffic over
Western roads (speaking of them collectively) in
the first six months of 1932 fell far below that of
1931. And this gains greater significance when it is
remembered that the falling off followed only a
slight increase in the movement last year over that
of 1930, which, in turn, was on a greatly diminished
scale as compared with 1929. Without exception,
all the different cereals, in greater or lesser degree,
contributed to the decrease in 1932, the falling off
in the case of wheat and corn having been particularly heavy. Receipts of wheat at the Western primary markets for the 27 weeks ending July 2 1932
aggregated only 117,351,000 bushels as against 183,007,000 bushels in the corresponding27weeks of1931;
the receipts of corn, 63,136,000 bushels as against
105,851,000 bushels; of oats, 31,484,000 bushels as
against 38,819,000 bushels; of barley, 11,640,000
bushels against 14,114,000 bushels, and of rye,
3,992,000 bushels against 4,790,000 bushels. Altogether, the receipts of the five staples, wheat, corn,
oats, barley and rye combined in the 27 weeks of 1932
reached only 227,603,000 bushels as compared with
346,581,000 bushels in the same period of 1931, and
338,393,000 bushels and 381,311,000 bushels, respectively, in the corresponding 27 weeks of 1930 and
1929. In the subjoined table we give the details of
the Western grain movement in our usual form:
WESTERN GRAIN AND FLOUR RECEIPTS.
Barley.
Oats.
Wheat.
Corn.
6 Mos. End. Flour.
(Bush.)
(Bush.)
(Bush.)
July 2.
(BM.)
(Buell.)
(Bush.)
Chicago1932
4,009,000 5.651.000 24,271,000 10.658.000 1,643,000
839,000
1931
4,895,000 20,164,000 28,550,000 5,636,000 1,588.000
523,000
Minneapolis1932
16,211.000 2,537.000 2.291.000 3,967,000 1,513,000
1931
37,653,000 4,839.000 5.106.000 5,400,000 1,419,000
mauM-
1932
3,556,000
1931
27,628,000
Milwaukee1932
294,000 1.069,000
1931
343,000 5,554,000
Toledo1932
6,080,000
1931
3,492,000
DetrolS1932
631,000
1931
578,000
&
Indianapolis Omaha1932
29,000 8,481,000
1931
18,162,000
BS. Louis1932
3,632,000 11,548.000
3,355,000 14,908,000
1931
Peoria1932
727,000
1,258,000
1931
1,509,000 1,468,000
Kansas City1932
244,000 35.498,000
1931
42,240,000
M.Joseph1932
1,206.000
1931
2,224,000
Wichita8,703,000
1932
1931
8,641,000
MO= City53,000
794,000
1932
295,000
1931
Buffalo (Lakes)17,196,000
1932
1931
Total AU1932
1931
20,000
1,139,000
41,000
1,068,000
324,000
560,000
663,000
310,000
2,612,000 1,226,000 2,455,000
4,405,000 1,329,000 3,612,000
49,000
73,000
1.606,000 3,971,000
479,000 3,650,000
59,000
18,000
195.000
3,000
406,000
382.000
393,000
225,000
128.000
43,000
8,728.000 5,449.000
22,166,000 5,566,000
37,000
46,000
6,742.000 2,254,000
12,513,000 9.990,000
573.000
883,000
26,000
51,000
110.000
151,000
6,389,000 1,366,000 1,950,000
37.000
5,413,000 1.713,000 1,716,000 2,364,000
988,000
3,780,000
16,804,000 1,865,000
2,000
1,352.000
6,800.000
1,091,000
1,379,000
5,000
93,000
1,383,000
34,000
129,000
7,000
75,000
1,742.000
1,209,000
500,000
1.006,000
33,000
34,000
3.000
2,000
3,154,000
1,209,000
199,000
491,009
9,519.000 117351,000 63,136,000 31.484.000
10,102,000 183007,000 105851,000 38.819,000
2.000
WIZ 213833g
The Western livestock movement, too, it appears,
was very small, in fact, the smallest in all recent
years. For the first six months of 1932 livestock
receipts at Chicago comprised only 76,467 carloads
as against 96,298 carloads in 1931 and 99,502 carloads
in 1930; at Omaha they were 25,173 carloads against
36,446 carloads in 1931 and 42,743 carloads in 1930,
1217
Financial Chronicle
Volume 135
and at Kansas City, 41,640 carloads against 45,054
and 50,206 carloads, respectively, in 1930 and 1929.
As to the Southern cotton movement, this fell
below that of 1931 so far as gross shipments of the
staple overland are concerned, but was very much
larger-in fact, the largest since 1927-in the case
of the receipts of cotton at the Southern outports.
The latter in the six months of the present year
reached no less than 3,394,799 bales as against only
1,613,175 bales in 1931, 1,485,129 bales in 1930,
1,929,832 bales in 1929, 1,811,414 bales in 1928, but
comparing with 3,815,138 bales in the same period
of 1927. On the other hand, gross shipments of
cotton overland were only 218,967 bales in the first
six months of 1932 as compared with 428,553 bales
in the corresponding period of 1931; 314,365 bales in
1930; 475,570 bales in 1929; 379,522 bales in 1928,
and 625,348 bales in 1927. Full details of the port
movement of cotton are given in the table we now
present:
RECEIPTS OF COTTON AT SOUTHERN PORTS FROMVANUARY 1 TO
JUNE 30 1932, 1931, 1930, 1929, 1928 AND 1927.
1932.
790,030
Galveston
843,980
Houston, do-27,112
Corpus Christi_
10.628
Beaumont ____
1,209,551
New Orleans
252,369
Moblle
36,672
Pensacola.
98,984
Savannah
19.435
Brunswick_ _ _ _
44.015
Charleston _ _ _ _
26,585
Lake Charles
17.927
Wilmington_._
11,158
Norfolk
6,353
Jacksonville-Total.
1931.
1930.
1929,
1928.
259,439
379.048
16,275
4,813
461,272
204,350
18,554
156,721
278,799
371,991
13,698
789
458.453
95,859
4,717
116,435
574,222
555,019
921,851
387,748
435.908 1,002,201
531,687
90.404
1,048
76,818
542.108
80.363
1,658
176,035
935.427
110.897
2,878
405,479
46,720
14,616
18,352
32,947
68
78,608
4,969
15,195
45,618
33,275
77,963
1,024
53,734
54,875
212,728
22,391
44,968
1927.
84,803
139,076
3.394,799 1,613.175 1.485.129 1,929,832 1,811.414 3,815,138
With the losses in earnings very heavy for the
roads as a whole, as noted above, it follows inevitably, as was the case last year and the year before,that
the separate roads and systems have sustained correspondingly heavy losses. The list of these losses
is exceedingly long and the amount of the losses,
in the case of the separate roads and systems, of
coresponding magnitude. The Pennsylvania RR., as
is nearly always the case, heads the list for amount
of loss, and the New York Central follows next in
order. The Pennsylvania has fallen $60,365,054 behind in its gross earnings as compared with last
year, though in the net earnings this has been reduced to $1,549,475 through drastic reductions in
the expense accounts. These losses in 1932 follow
$60,562,399 loss in gross and $25,830,000 loss in net
in 1930 and $40,018,540 loss in gross and $20,755,604
loss in net in the first six months of 1929; The New
York Central, including the Pittsburgh & Lake Erie,
and the Indiana Harbor Belt, reports for 1932 a
decrease of $50,721,350 in gross and of $10,726,676
in net. In 1931 the New York Central Lines suffered
a contraction of $54,783,906 in gross and of $15,229,745 in net as compared with 1930, and in this
last-mentioned. year they reported $45,548,859 loss
in gross and $20,869,550 loss in net as compared with
1929. The story is the same for other large systems
everywhere throughout the country, a heavy shrinkage in 1932 following a shrinkage also in 1931 and
1930. In the table which follows we bring together
all changes for the separate roads and systems for
$500,000 or over, in either gross or net. It will be
noted that the decreases entirely preempt the ground.
In the case of the gross there is not a single instance
of any road or system having an increase of that
amount, while in the case of the net there is just one
exception, namely, that of the Reading Co., which
through curtailment of expenses has increased its
net in the amount of $1,071,839.
1218
Financial Chronicle
PRINCIPAL CHANGES IN GROSS EARNINGS FOR THE SIX
MONTHS ENDED JUNE 30,1932.
Decrease.
Decrease.
Pennsylvania
$60.356.054 Alton RR
$2,698.168
New York Central
a46,418,080 Yazoo & Miss Valley- - -_ 2,677,729
Southern Pacific (2 rds)- 29,649,188 Cinc N 0 & Texas Pac__ 2,403,498
Baltimore 8z Ohio
24,137,334 Bessemer & Lake Erie_ __ 2,308,286
Atch Top & S Fe (3 rds)- 21,975,082 Nash Chatt & St Louis-- 2,288,765
Union Pacific (4 roads)-- 20,269.496 Chic St Paul Minn & Om 2,234,825
Chic Burl & Quincy_
17.073.572 Wheeling & Lake Erie_ _ - 2,098,472
Chicago & Nor Western- 16,352.871 Los Angeles & Salt Lake- 2.086,324
Chic Milw St P & Pac
15,877,794 Chicago Great Western__ 2,023,093
Chic R I & Pac (2 roads) 14,800,827 Kansas City Southern_ __ 1,985,027
Louisville & Nashville_ _ - 14,571.487 Chicago Ind & Louisville 1.849.446
Missouri Pacific
14.216,958 Colo & Sou (2 roads)-___ 1,836.686
Southern Ry
13,935,560 Maine Central
1,813,261
Illinois Central
13,330,439 Florida East Coast
1,811,115
Chesapeake & Ohio Ry-- 12,812,339 NO Tex & Mex (3 roads) 1,808.358
NY Nil & Hartford_ _- 11.987,594 Chicago St Eastern LW..... 1,694,505
Great Northern
11.918.030 Union RR of Penna..
1,591,588
Atlantic Coast Line
11,582,498 Rich Fred & Potomac_ _ _ 1,555.806
Reading Co
9,920.922 Minneapolis & St Louis- 1,479,226
Erie (3 roads)
9,777,554 Mobile & Ohio
1,468,587
Norfolk & Western
9,583,217 Western Maryland
1,350,836
Northern Pacific
8,896.567 Western Pacific
1,319,037
St Louis-San Fran (3 rds) 8,508,943 Term RR Assn of St L- 1,246,786
Seaboard Air Line
7,241,842 Detroit Toledo & Ironton 1.196,142
Lehigh Valley
6,798,978 Virginian
1,190,378
Del Lack & Western_ _ _ _ 6,709,830 Alabama Great Southern 1,116,944
Boston & Maine
6,542,318 Indiana Harbor Belt--.. 1,032.629
Wabash
6,444,329 Norfolk Southern
979,921
Texas & Pacific
5.374,724 Illinois Terminal
972,678
Central RR of New Jer- - 4,976,545 Central Vermont
791,112
Internet Great Northern 4,710.871 Cllnchfield
787,574
Minn St Paul & 8 S M__ 4,182,891 Belt Ry of Chicago
751,178
NY Chicago & St Louis- 4,136,523 Spokane Port! & Seattle736,582
Delaware & Hudson_ ___ 3,874,737 Georgia
696,335
Elgin Joliet & Eastern_ __ 3.739.625Louisiana & Arkansas_
692.252
Grand Trunk Western__ 3,625,695 Duluth So Sh & Atlantic
613,163
Long Island
3,546,530 Georgia Sou & Florida. _
602,706
Denver St Rio Or Western 3,502.859 Chicago River & Indiana
594,357
Missouri-Kansas-Texas.... 3,336,069 N Y Susq & Western_ _ _ _
575,027
Pere Marquette
3.312,214 New Orleans & Nor East
572,016
Pittsburgh & Lake Erie_ _ 3,270.641 Monongahela
566,420
Central of Georgia
2,997,401 Gulf Mobile & Northern547,786
Duluth Missabe & Nor
2,923,188
St Louis Southwestern
2,865,851
Total (100 roade)__ _ _$570.719,691
a These figures cover the operations of the New York Central and leased
lines-Cleveland Cincinnati Chicago & St. Louis, Michigan Central,
Cincinnati Northern and Evansville Indianapolis & Terre Haute. Including Pittsburgh & Lake Erie and the Indiana Harbor Belt, the result
Is a decrease of $50,721,350.
PRINCIPAL CHANGES IN NET EARNINGS FOR THE SIX MONTHS
ENDED JUNE 30 1932.
increase.
Reading company
$1,071,839 Internet Great Northern $1,965,417
-Minn St Paul & S S M__ 1,747,448
Total (1 road)
$1,071,839 Denver & Rio Or West__ 1,707,446
Lehigh Valley
1,672,634
Decrease. Pennsylvania
1,549,475
New York Central
489,752,655 N Y Chic & St Louis... _ 1,533,878
Southern Pacific(2 roads) 9,511,384 Delaware & Hudson.- 1,471,833
Chic Burl & Quincy
6,748.647 Long Island
1.314,476
Missouri Pacific
6,057.045 Elgin Joliet & Eastern
1,304.536
Atlantic Coast Line
6,049,572 Central of Georgia
1,204,697
Atch Top & S Fe(3 roads) 5,814,683 St Louis Southwestern
.- 1,200,752
Great Northern
5.690,405 Grand Trunk Western
1,096.112
Chic Milw St P & Pac
5,258,966 Kansas City Southern_
967,035
Chic RI At Pac(2 roads).. 5,093,435 Florida East Coast
932,024
N Y N H & Hartford
4,541,772 Central RR of New Jer
892,621
Chicago & North Western 4,336,229 Pittsburgh & Lake Erie883,681
Southern Railway
4,284,879 Bessemer It Lake Erie_883.677
Louisville It Nashville
4,253,479 Pere Marquette
861,060
St Louis-San Fran (3 rde) 4.197.192 Rich Fred & Potomac__ _
857,715
Norfolk & Western
3,865,288 Chicago Great Western_
841,523
Union Pacific (4 roads).- 3,739,035 Duluth Missabe & Nor....
738,164
Baltimore & Ohio
3.557,595 Chicago Ind'polis Louls'le
676,600
Northern Pacific
2,688,419 Wheeling & Lake Erie....
642,316
Chesapeake & Ohio Ry-- 2,650,648 Detroit Toledo & Ironton
567,468
Erie (3 roads)
2,345,096 Minneapolis & St Louis_
539,111
Seaboard Air Line
2,333,725 Nash Chatt & St Louis
535,790
Texas & Pacific
2,271.263 Chic St P Minn & Omaha
531.483
Del Lack & Western_ _
2,249,024 Illinois Terminal
506,538
Boston & Maine
2,087,684
Wabash
2,076,381
Total (64 roads)
$141,080,012
a These figures cover the operations of the New York Central and leased
lines-Cleveland Cincinnati Chicago It St. Louis, Michigan Central,
Cincinnati Northern and Evansville Indianapolis & Terre Haute. Ineluding the Pittsburgh & Lake Erie and the Indiana Harbor Belt, the
result is a decrease of $10,726,676.
It was a foregone conclusion that when the roads
are ararnged in groups, or geographical divisions,
according to their location, that losses should appear
in gross and net alike in the case of each one of the
three great districts into which the roads are divided,
namely, the Eastern district, the Southern district,
and the Western district, as also in all the separate
regions under each of the districts. That was the
record last year and the year before, and it is again
the record the present year. Our summary by groups
or geographical divisions is as below. We group the
roads to conform to the classification of the InterState Commerce Commission. The boundaries of the
different groups and regions are indicated in the
footnote to the table:
SUMMARY BY GROUPS.
District and Region.
Gross Earning
6 Months Ended June 30-1932.
1931.
Inc.(+)or Dec.(-)
Eastern District$
$
New England region (10 roads)-- 81,509,915 103,610,807 -22,100,892 21.32
Great Lakes region (29 roads)---- 327,808 388 427,989,172 -100.180,784 23.40
Central Eastern region (26 roads). 337,538,857 460,070,098 -122,531,241
26.63
Total (65 roads)
746,857,160 991,670,077 -244,812,917 24.68
Southern DistrictSouthern region (30 roads)
199,458,749 282.648,812 -83,190,063 29.43
Pocahontas region (4 roads)
86.047,398 111,189,138 -25.141,740 22.61
Total (34 roads)
285.506.147 393,837.950 -108,331,803 27.50
{Western DistrictNorthwestern region (17 roads)-- 166,395,227 238,245,521 -71,850,294 30.15
Central Western region (21 roads) 261.373,254 364,481,464 -103,108,210 28.28
Southwestern region (29 roads)._ _ 139.006,778 195.683,647 -56,676,869 28.96
s
%.
--- 566.775.259 798,410,632 -231,635,373 29.01
Total (67 roads)
'
-otal all districts (166 roads)..1,599,138,566 2,183,918,659 -584,780.093 26.77
Aug. 20 1932
District & Region.
-Net Earatrigs6 Mos.to June 30.- Mileage1932.
1931.
Inc.(+)or Dec.(-)
Eastern District- 1932. 1931.
$
New England region 7,294
7.323 22,503,236 29,041,078 -6,537,842 22.51
Great Lakes region_ 27,304 27,115 62,562,971 88,032,381 -25,469,410
Cent. East. region_ 25.510 25,573 77,498,822 89,884,811 -12,385,989 28.93
13.77
Total
60,108 60,011 162,565.029 206,958,270 -44,393,241 21.45
Southern DistrictSouthern region
40,027 40,042 31,428,044 54,158,633 -22,730,589 41.97
Pocahontas region_ 6,137 6,057 31,898,511 39,680,381 -7,781,870 19.61
Total
46,164 46,099 63,326,555 93,839,014 -30,512,459 32.51
IVestern DistrictNorthwestern region 48,780 48,947 12,685,884 36,471,597
Cent. West. region_ 51.944 51,865 55,349,064 86,230,562
Southwestern region 35,012 35,080 27,523,569 47,840.918
Total
135.736 135,892 95,559.117 170,543,077
_23,785,713 65.21
-30,880,898 35.81
-20,317,349 42.46
-74,983,960 43.96
Total all cilstricts_24J,008 242,002 321,450,701 471,340,361 -149,889,660 31.80
NOTE.-We have changed our grouping of the roads to conform to the classification of the Inter-State Commerce Commission,
and the following indicates the
confines of the different groups and regions:
EASTERN DISTRICT.
New England Region.-This region comprises the New England States.
Great Lakes Region.-This region comprises tee
on the Canadian bounder,
between New England and the westerly shore ofsection
Lake Michigan to Chicago. and
north of a line from Chicago via Pittsburgh to New
York.
Central Eastern Region.-This region comprises the section
of the Great
Lakes Region, east of a line from Chicago through Peoria tosouth
St. Louis and the
Mississippi River to the mouth of the Ohio River, and north of the Ohio River to
Parkersburg. W. Va.. and a line thence to the southwestern corner of Maryland
and by the Potomac River to Its mouth.
SOUTHERN DISTRICT.
Southern Reoton.-This region comprises the section east of
the Mississippi River
and south of the Ohio River to a point near Kenova,
W. Va., and a line thence.
following the eastern boundary of Kentucky and the southern
boundary of Virginia
to the Atlantic.
Pocahontas Region.-This region comprises the section north
of the southern
boundary of Virginia. east of Kentucky and the Ohio River
north to Parkersburg.
W.Va., and south of a line from Parkersburg
to
the
southwestern
corner
of Maryland'
and thence by the Potomac River to its mouth.
WESTERN DISTRICT.
Northwestern ilegion.-Thts region
the section adjoining Canada Wing
west of the Great Lakes Region, northcomprises
of a line
to Finland and by the Columbia River to the from Chicago to Omaha and thence
Pacific.
Central Western Region -This region comprises the
section south of the Northwe• rn Region, west of a line from
Chicago to Peoria and thence to St. Louis, and
north of a line from St. Louis to Kansas
City and thence to El Paso and by the
Mexican boundary to the Pacific.
Southwestern Re7I04.-This region comprises the section lying between the Mississippi River south of St. Louis and a line from St.
Louis to Kansas City and thence
to El Paso and by the Rio Grande to the Gulf
of Mexico.
We now add our detailed statement for the half.
year. It shows the results for each road separately,
classified in districts and regions, the same as in
the foregoing summary:
EARNINGS OF UNITED STATES RAILROADS FROM
JAN. 1 TO JUNE 30.
Eastern District.
Gross
Net
New England
1932.
1931.
1932.
1931.
Inc. or Dec.
Region$
8
Bangor & Aroostook 4,018,934 4,193,081
1.900,962
1,537.169 +863,793
Boston & Maine__ -_ 23,614,987 30,157,305 6,032.435
8,120,119 -2,087,684
Can Nat SystemCan Nat Lines in
N E
619,060
752,398 -121,587 -235.596 +114,009
Central Vermont_ 2,686,791
3.477,903
200,489
311,843 -111,354
Grand Trunk West-See Great Lakes region.
Dui Winn & Pao-See Northwestern region.
Can Pac SystemCan Pac Lines In
Maine......
1,064.991
1,270.567
119,060
116,830
+2.230,
Can Pac Lines in
Vermont
555,793
700.200
-74,666
-85.836
+11,170,
Dul So Sh & AU-See Northwestern region.
Minn St P & 88 M-See Northwestern region.
Spokane Internat-See Northwestern region.
Maine Central
7,885,982
6,072.721
1,375,447
1.815,511 -440,064.
New Haven SystemN Y Ontario & Western-See Great Lakes region.
NYNHAsHartf_ 39,806,262 51,793,856 11,977,251 16,519.023
-4,541,772'
N Y Connecting_ _ _ 1,101,545
1.126,054
822,197
762,460
+59,737
Rutland
1,968,831
2.253.461
271,648
179.555
+92,093
Total(10 roads).- 81,509,915 103,610,807 22,503.236
29,041,078 -6,537,842.
Gross
Net
Great Lakes
1931.
1932.
1932.
1931.
Int. or Dec.
Region$
$
i
$
Can Nat SystemCan Nat Lines in N E-See New England region.
Central Vermont-See New England region.
Dui Winn It Pat-See Northwestern region.
Grand Trk West_ 7,534.601 11,160.296
226,976
1,323,088 -1,098,112'
Del It Hudson
11.858,921 15.733.658
450,084
1,921,917 -1,471,833
Del Lack It Western 23,957.372 30,667.202 4,511.240
6,760,264 -2,249.024
Detroit It Mackinac
320,495
516.128
12.550
124,963 "-112,413.
Detroit Terminal__ 544.836
366,179
65,269
122.381
-57.112
Bet It Tol Sh Line
1,633.665
1,233.216
548,133
741,524 -193,391.
Erie SystemChicago & Rrie___ 4.353,911
5,635.966
1.434,192 2,177,793 -743,601
Erie
32,615,274 40,998.139 6.935,429 8.450,849 -1,515,420
•
New Jer It N Y
670,645
558,011
27.351
113,426
-86,075
N Y Snag & West_ 1,763.413 2.338.440
482.721
766,840 -284.119
Lake Terminal
323.923
117.505
-10,339
16,467
-26.806
Lehigh It Hud River
1,009,685
822,681
196.204
289,541 .-93,337
Lehigh It New Eng. 1,670.164 2,135.278
346,507
441.530
-95,023
Lehigh Valley
19,991.510 26,700.488
3,575,284 5,247,918 -1.672.634
Monongahela
1,901,492 2,487,912
1,047,993
1.169,664 -121,671
Montour
993,948
700,538
177,371
304,762 -127.391.
New Haven Systemhi
It
region.
England
II-See New
NYN
NY
Ont It West_ 5,198.712 5,379,744
1.544,492
1,368,510 +175,982
N Y Central LinesInd Harbor Belt
3,709.707 4,742,336
1,185,216
1,275,556
-90.340
New York Centra1153.151,842 199.589.922 31,319.625 41.072.280
-9,752.655
Pitts & Lake Erie_ 6.276.147 9,546,788
408,942
1,382,623 -883,681
NY Chic It St Louis 15,123.390 19,259.913 3,172,661
4,700.539 -1,533,878
Newburgh It So Sh...
574.978
323.788
-36.604
-3,668
-31,096
Pere Marquette..
10,925,403 14.237.617
1,413.908
2.275.028 -801.060
Pitts & Shawmut
470.200
366.486
42.830
104,725
-61,895
Pitts It W Va
1,491,959
1,095.160
183,595
303,651 -120.056
Pitts Shawm It No.
650.229
505,793
33,681
144.766 -111,085
Toledo Terminal
550.352
402,159
73,703
115,871
-42,168
Wabash SystemAnn Arbor
1,631.798 2,122.876
220.406
354,641 -134,235
Wabash
19,327.720 25,772.049 2.882,491 4,958.872 -2,076,381
Tote/ (29 roads)_327,808,388 427,089.172 62,562,971 88.032,381-25,409,410
•
Volume 135
Financial Chronicle
Gross
Net1931.
Inc. or Dec.
$
323.582
-48.008
187,389
-34,860
Central Eastern
1932.
1931.
1932.
RegionS
$
Akron Canton & Y.
824,728
1,024.164
275,554
Alton & Southern__
460,830
550,832
152,529
Bait & Ohio SystemAlton-See Central Western region.
Baltimore & Ohio 65,350,012 89,487.346 15.061,794 18,619,389 -.3,557,595
B Sz 0-Chi Term 1,656.450
1,564.741
220,834
191,707
+29,127
Staten ml Rap Tr
902,704
1,074,991
188,961
258,806
-69,845
Belt Ry of Chicago. 1,949,074 2,700.252
559,616
925,295 -365,679
Bessemer & L Erie. 1,613,733 3,922.019 -626.327
257,350 -883.677
436,957
Bklyn E D Term__
629,594
181.417
266,214
-84,797
545.834
Cambria & Indiana_
621,111
140.302
152,971
-12,669
Chi & East Illinois. 6.089.107 7.783,612
498,274
577.047
-78,773
Chl & Ill Midland__ 1,075,519
1,354,670
217,795
195,995
+21,800
5,872,197
Chi Ind & Louisville 4,022,751
565,734
1.242,334 -676.600
191,012
Conemaugb & BI Lk
390.032
-38,902
-72,765
+33.863
Det Tol & Ironton- 2,375,244 3,571.386
656,583
1,224,051 -567,468
Elgin Joliet & East_ 4,340,377 8,080,002
388.289
1,692.825 -1,304,536
Illinois Terminal... 2,314,721
3,287,399
598,987
1,105,525 -506,538
Missouri Pacific System-gee Southwestern Region.
Missouri Illinois-439.952
653,679
82,032
138,905
-56,873
Monongahela Conn264,018
608.188
-99.709
39.865 -139.574
Pennsylvania System14,223,496 17,770.026
Long Island
4,225,534 5,540,010 -1.314,476
Pennsylvania. .173,794,007 234,150,061 43,203,794 44.753,269 -1,549,475
Reading SystemAtlantic City..._
793.171
1.160.273 -227.676 -243,800
+16.124
Central of N .1- 15,456,335 20,432,880 3,762,646 4.655,267 -892,621
27,181,440 37,102,362 5,349,173 4,277.334 +1,071,839
Reading Co
Union RR of Penne 1,073,288
2,664,876 -481,772 -176,731 -305.041
Western Maryland- 6.271.749
7,622.585
2,086,609
2.553.930 -467,321
Wheeling & L Erie_ 3,892,348 5,990.820
556,751
1.199,067 -642,316
Total (26 roads)__337.538,857 460,070.098 77,498.822 89.884,811-12,385.989
Total Eastern Ins
trict (65 roads).-.746,857.160 991.670,077 162.565.029 206,958,270-44.393,241
Southern District.
Southern
1932.
RegionAtl Coast Line System659.701
Atl & West Point_
Atl Birm & Coast- 1,301,403
Atl Coast Line-- 22,789,860
905,453
Charles & W Caro
2.061.484
Clinehtield
1.434,572
Georgia
Loulsv & Neer,- 31.732,007
Nash Chatt & St L 5,891.982
648,430
West Ry of Ala
385.507
Columbus de Greenv
Florida East Coast.. 4,515.994
437,194
Georgia & Florida..
Gulf Mobile & North 1,603,987
842,897
.Nor
New On & Gt
Illinois Central System-.
Central of Georgia 6,119.463
544,356
Gulf& Ship Island
Illinois Central._ _ 38,076,072
Yazoo & Miss Val 5.848.745
Mississippi Cent _ _
296.601
Norfolk Southern
2.260,620
Seaboard Air Line
17,378,230
Southern Ry System2,112,452
Ala Great South
Cm NO dr Tex P. 5,347,233
Ga South & Fla.. 1.037,443
Mobile Is Ohio
4,045,351
NO & Northeast. 1.057.028
New Or! Term...
687,548
North Alabama
243.911
Southern Ry
37,361,743
Tennessee Central
931,482
1931.
1932.
Net
1931.
Inc. or Dec.
974.177
1.756,089
34.372.358
1,375,784
2.849,058
2.130.907
46,303,494
8.180.747
1,028,500
542,107
6,327,109
728,004
2,151,773
1,149,734
-31,829
101.009 -133,838
-289,613 -315,413
+25.800
4,609,35
10,658.924 -6.049.572
186,578
408,778 -222,200
629,793
969,035 -339,242
33.490
290.227 -256.737
3,623,759
7.877,238 -4.253,479
408.669
944,451 -535.790
-74,594
93,325 -167.919
-17,797
66.866
-84.663
1.414,313 2,346,337 -932.024
-69,1139
10.659
-80,598
142,002
322,166 -180,164
238.893
383,662 -144,769
9,116,864
897,504
52.306.511
8,526,474
491.761
24,620.072
611.513
17,446
9,010.718
1.210.560
-29.172
200.995
2.639.921
1,816,210 -1.204.697
-57,648
+75,094
8,839,058 +171,660
947.133 -263.427
82,470 -111,642
660.368 -459,373
4,973.646 -2,333,725
3,229.396
7,750,731
1,640.149
5.513.938
1,629,044
791,693
359,705
51,297,303
1,367.285
-29,619
1,003.247
128.049
382.039
11,933
377.627
48.166
4,878.262
166,282
346,778 -.376,397
1,371,933 -368,686
271,879 -145.830
817.640 -435.601
136.835 -124.902
327,069
+50,558
77,036
-28,870
9,163,141 -4.284,879
227.813
-61.531
Total (30 roads)-199,458,749 282.648,812 31,428.044 54,158,633 -22,730,589
----Gros
Net
Pocahontas
1932.
1931.
1932.
1931. Inc. or Dec.
RegionS
5
Chesapeake & Ohio_ 46,197,362 59,009,701 18.415.297 21,065,945
Norfolk & Western. 29.691,176 39,274,393 9,690,734 13,556.022 -2,650,648
-3.865.288
Richmond Fred & P 3.783,745 5.339.551
907,1379
1.765.394 -857,715
Virginian
6,375.115
7,565.493 2,884,801
3,293.020 -408,219
Total(4 roads)... 86,047.398 111,189,138 31.898,511 39,680.381
-7.781,870
Total Southern District (34 roads). .285,506.147 393,837,950 63,326.555 93,830.014-30.512,45
9
Western District.
Gross
Net
Northwestern
1932.
1931.
1932.
1931.
Inc. or Dec.
Region$
Canadian National SystemCan Nat Lines in N E-See New England Region
Central Vermont-See New England Region
Dul Winn & Pat.
475.310
634.532
-65,726 -153,809
+88,083
Grand Trunk Western-See Great Lakes Region
Canadian Pacific SystemCan Pee Lines in Me-See New England Region
Can Pao Lines in Vt-See New England Region
Dul So Sh & .Ati_
848,157
1.461,320 -102,292
106.424 -208.716
M St P & S M. 10.456,249 14.639,140
191,555
1.939,003 -1.747,448
Spokane Internet
263,200
389.614
-44,447
61.688 -106,135
Chi & North West. 36.051,957 52,404,828 4,456,937 8.793.166 -4,336,229
Chi St PM & 0. 7,172,725 9.407.550
456,102
987.585 -531.483
Western7,769,114
Great
Chi
9.792.207 ,2,032,484
2.874.007 -841,523
Chi Mil St P & Pat 40,934,330 58.812,124 4,041,968 9.300.934 -5,258,966
2.776.298
'Chi River & Indiana 2.181.941
1.060.281
1.214.036 -153.755
498,275 3,421.463 -2.032,933 -1,294,769 -738.164
Dul Missabe & Nor
Great Northern.... 24,495,388 36.413.418
1.249,235 6,939,641 -5,690,406
West.
&
587,421
Bay
Green
714,900
73,850
84.967
-11.117
150.110
Lake Sup & Ishpem
492.657 -164,193
-25.250 -138.943
Minneapolis & St L.. 3,696,812 5.176.038
-90.349
448,762 -539,111
Pacific-.
21.951.461 30.848,028
Northern
553.419 3,241,838 -2,688,419
Spokane Port & S.. 2,332,737 3,069,319
576,514
1,033,826 -457,312
Union Pacific SystemLos Ang & Salt Lake-See Central Western Region.
Oregon Short Line-See Central Western Reglen. .
Ore-WashRR&Nav 6.530,040 9.792.085
493,479
919.548 -426,069
St Joseph & Gr Isl-See Central Western Region.
UnionPacific-See Central Western Region.
Total(17 roads)--166,395,227 238,245,521
Gross
12,685,884 36,471.597-23.785,713
Nei
1932.
1931.
1932.
Central Western
1931.
Inc. or Dec.
Regions
$
$
Atchison SystemAtch Top & S Fo. 53,066.997 72,451,628 9.015,673 14,829,933 -5,814.260
Gulf Colo & S Fe-See Southwestern Region.
Panhandle Is S Fe-See Southwestern Region.
Baltimore & Ohio System7,140,943
9,839,111
1,470,805
1,884,263 -393,458
Alton
Bait & Ohio-See Central Eastern regionBait & Ohio Chic Term-See Central Eastern region.
/ Staten Isld Rap Tran-See Central Eastern region.
--Gross
Central Western
1932.
1931.
1932.
Region (Cont.)$
Burlington RouteChi Burl & Quincy 39,956,043 57,029,615 10,182,848
Colo Sr Southern_ 2,660,847 3.788.923
224.051
Ft Worth & D C 2,641,844
3,350.454
781,970
Den & Rio Gr West 7,566.038 11,068,897
986,719
Denver & Salt Lake
831,274
912,671
324,014
Nevada Northern_
170,506
267,616
1.403
Peoria & Pekin Un425.728
584,255
66,284
Rock Island SystemChl R I St Gulf._ 2,067,673 2,694,931
688,721
Chi It I & Pao__ 33.959,115 48,141,684 6.446,983
San Diego & Arizona
204.451
469,008 -192,190
Southern Pacific SystemNorthwestern Pac 1,476,438
1,916,225 -101,522
Southern Pacific_ 54,231,109 76,414,760 11,291.710
Texas & New Orleans-See Southwestern Region.
Toledo Peoria & W.
664.560
791,388
97.803
Union Pacific SystemLos Ang & Salt L_ 7,765.551
9,851.875
2,349.748
Oregon Short Line 9,616,863 13,606,463 2,489.940
Ore-Wash RR Sz Nay-See Northwestern Region.
St Joseph & Or Isl 1,091,422
1,593,083
330,524
Union Pacific.... 30,642,399 43,158,589 8,746,426
Utah
551,193
588,991
164.146
Western Pacific__
4.642,260 5.961,297
-16,392
1219
Net
1931.
Inc. or Dec.
16,931,495 -6,748.647
589,519 -365,468
841,915
-59,945
2,694.165 -1,707.448
254.357
+69.657
64.413
-63.010
64.265
+2,019
858.727 -170.006
11.370,412 -4.923,429
88.978 -281,168
-197.546
+96,024
18,908,343 -7,616.633
149.066
-51,2611
1,979.404
3,326.113
+370,344
-836,173
382.599
-52,075
11,171,144 -2,424,718
148.790
+15.356
+73.401
-89,793
Total (21 roads)..261.373,254 364,481.464 55,349,664 86.230.592-30,880.898
Nei
Southwestern
1932.
1931.
1932.
Inc. or Dec.
1931.
Region3
$
Atchison SystemAteh Top & S Fe-See Central Western region.
Gulf Col & 5 Fe__ 6.922.481
8.392,444
829.842
549,221 +280.621
Panhandle & S Fe 4.007,707 5,128,195
367.388
648,432 -281.044
Burl & Rock Island_
492,891
618,626
13.637
-55,103
+68.740.
Ft Smith & Western
310,620
400,669
-20,345
7.167
-27,512
Frisco Litman W Is Rio Gr__
231.721
351,566 -135.589
-99,088
-36.501
St L & San Fran.. 20,300,774 28,533,045 3:781,350
7.870.472 -4.089.122St L& S FofTex.
485.265
642,092
-70.061
• 1.508
-71.569
Galveston Wharf...
937.965
773.524
335.951
215.943 +120,008
Kansas City South_ 4,517,190 6,502,217
1,089.662 2.056,697 -967,035
Texarkana Is Ft S
576,570
977.653
165.839
410,984 -245,145
Kansas Okla & Gulf
910.769
1,290.441
358,023
536.716 -178,693
Louisiana Is Ark._ 2,055.325 2.747.577
554,630
898.155 -343.525
La Ark & Texas....
283,329
370,805
7,000
9,997
-2,997
Midland Valley....765.302
1,011,339
288.786
323,053
-34.267
Mo Is North Ark__
433.683
636.963
-21.124
47.345
-68.469
Mo-Kansas-Texas. _ 13.244,832 16,580,901
3.183,157
3.514,458 =331,301
Missouri Pat SystemBeaumont S L & W
929,935
1,529,848
241,835
478.538 -236,705
Internet Gt Nor- 5.208.598 9,919,469
721,792 2,687.209 -1,965.417
Missouri Illinois-See Central Eastern region.
Missouri Pacific.. 34.730,761 48,947.719 7,228,143 13,285.188 -6,057.045
NO Tex & Meg..
871,990
1,195.655
165,595
279,712 -114,117
St L Browns Is M 3,089,785 3.974,565
1,405.160
1,534.481 -129,321
13 A Uvalde & Gulf
589,138
808.020
197,717
215,708
-17.991
Texas Is Pacific__ 10.527,288 15,902,012 2,846,380 5,117,643 -2.271,263
Okla City Ada Atoka
208,269
354,501
52,125
115,091
-62.966
St L Southwestern.- 6.503.736
9,369,587
1,167.981
2.368,733 -1,200,752
Southern Pacific SystemNorthwestern Pac-See Central Western region.
Southern Pacific-See Central Western region.
Texas Is New Orl_ 16,262.092 23,727,629
1.884,530
3,779,281 -1,894,751
Term RR Assn St L 2.934.925 4,181.711
737,025
980.287 -243.282
Texas Mexican
390.020
508.366
78.498
15.894
+62,604
Wichita Falls & Sou_
283,817
306,508
68,642
47,196
+21,446
Total (29 roads).-139,006.778 195,683.647 27.523,569 47,840,918-20.317,349
Total Western District(67 roads)...566.775,259 798,410,632 95.559,117 170.543,077-74.983.960
Grand total (166
roads)
1,599,138,566 2183918659 321.450,701 471.340,361-149889680
RESULTS FOR EARLIER YEARS.
In dealing with the results for earlier years it is to be
noted in the first place that the decrease of $584,780,093 in
gross and of $149,889,660 in net in the first half of 1932
and the decrease of $503,786,279 in goss and of $147,407,933
in net in the first half of 1931 and the decrease of $324,823,450 in gross and of $199,587,164 in net in the first half
of 1930, follow $151.648,890 gain in gross and $114,947,201
gain in net in the first half of 1929, but come after $116,628,506 loss in gross and $13,059,449 loss in net in the first
half of 1928. In 1927 also conditions were not altogether
favorable, so that our tables then likewise showed some
shrinkage in both gross and net earnings. The Mississippi
River floods, the coal miners' strike, the slump in the automobile trade, the depression in the South, the impaired
status of the agricultural classes, especially in the Northwest, by reason of successive poor crops of spring wheat,
all imposed a state of quietude on general trade in that
year and left their mark on railroad revenues. However, the
decrease was very slight-only $9,132,430 in the gross, or
less than one-third of 1%, and $16,035,003 in the net, or
2.20%. In the two years preceding, on the other hand1926 and 1925--the situation was different. Then the returns were distinguished for quite considerable improvement. Especially was this the case in 1926, when our compilations recorded $131,448,135 increase in gross and $71,056,875 increase in net. There were increases also in 1925
over 1924, but they were much more moderate, at least in
the gross, having been .only $23,096,456 in that item, but
$58,807,728 in the net. However, these increases came
after a big falling off in both gross and net in 1924. This
latter year was the year of a Presidential election, when,
pending the outcome, a tremendous slump in business
1220
Financial Chronicle
occurred, which involved a corresponding contraction in the
traffic and the revenues of the railroads. The falling off in
the gross in 1924 amounted to no less than $225,987,341; in
the net it was $54,000,364.
But in noting the 1924 shrinkage in gross and net it is
important not to overlook the fact that this followed prodigious gains in gross and net alike in the year preceding,
that is 1923, the addition to the gross that year having been
$480,926,565 and to the net $117,564,651. Moreover, this
Improvement, at least in the net, came after large increases
In 1922 and the year before, too, the improvement, however,
in those two years following entirely as a result of savings in
expenses, gross earnings in both 1922 and 1921 having
recorded losses. In 1922, as against $63,299,701 decrease
In gross, the saving in expenses was $281,731,725, affording,
therefore, a gain in net earnings of $218,332,024. In 1921,
in like manner, though there was $67,476,090 loss in gross,
this was turned into a gain of $141,808,030 in net by a
reduction of $209,284,120 in expenses. The 1921 reduction
in expenses would have been very much greater than actually
recorded except that the railroads were operating under
much higher wage scales, the United States Labor Board
having in July 1920 awarded an increase of 20%. On the
other hand, the decrease of 12% made by the Labor Board,
effective July 1 1921, was a factor in lowering expenses in
the first half of 1922.
It must be particularly remembered, however, that previous to 1921 expenses had been mounting up in a frightful way, until in 1920 a point was reached where even the
strongest and best managed properties were barely able
to meet ordinary running expenses, not to mention taxes
and fixed charges. And it is these prodigiously inflated expense accounts that furnished the basis for the savings and
economies that were effected in 1921 and 1922 and in the
Immediately succeeding years. As compared with 1920, the
roads in both 1921 and 1922 also had the advantage of much
more favorable weather conditions. In 1921 the winter was
exceptionally mild, and much the same was true of the
winter of 1922, though this last is declared to have been a
hard one in certain special sections—in Wyoming and
Montana, for instance, and contiguous territory. In 1920,
on the other hand, not only was the winter unusually severe,
but many other adverse influences and conditions existed
at the time, all combining to cut down the net, and in our
review of the earnings for this half-year period we were
prompted to say that it was not likely that we would ever
be called upon to record a poorer statement of net earnings
of United States railroads for any period of six months than
that for the first half of 1920. Rising costs of operation—
induced by wage increases, advancing prices for material,
fuel, supplies and everything else entering into the operating
accountS of the railroads, and by heavy extra expenses
arising out of special unfavorable circumstances of one kind
or another—had been a feature of railroad affairs for many
years, we then pointed out, but in 1920 the movement,
unquestionably, might be said to have reached its climax
and its apex, many of the roads failing to earn bare operating
expenses. Altogether, the result of this array of unfavorable
Influences on earnings in the first half of 1920 was that as
against a gain in gross earnings of $358,015,357, our compilations showed an addition to expenses of no less than
$425,461,941, leaving the net diminished in amount of
$67,446,584.
It should be noted, furthermore, that the falling off in
net in 1920 was merely one of a long series of losses in net.
In the first six months of 1919 the higher rates then in force
(as compared with 1918) for the transportation of passengers and freight barely sufficed to meet the great rise in expenses; our compilations then showed $265,635,870 addition
to gross earnings with a coincident increase in expenses of
$265,952,855, leaving net slightly smaller, namely by $316,985. In the preceding two years the results were equally
bad, huge increases in expenses acting to cause heavy losses
in the net. For instance, in 1918 the addition to expenses
(over 1917) reached the prodigious sum of $457,054,265, or
about 34%, with the result that a gain of $181,848,682 in
gross was turned into a loss of no less than $275,205,583 in
the net, or over 50%. Not only that, but in 1917 a gain of
$205,066,407 in gross was concurrent with an addition of
$212,222,155 to expenses, leaving a loss of $7,155,748 in net.
In the following we furnish the half yearly comparisons
back to 1906:
Aug. 20 1932
Year.
Jan. 1 to June 301906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1029
Increase(+) or
Decrease (—)•
Year
Given.
Year
Preceding.
8923,554,268
999,082,691
863,860,965
1,172,185,403
1,351,570,837
1,310.580,765
1,365,355.859
1,502.472,942
1,401,010,280
1,407,465,982
1,731,460,912
1,946,395,684
2,071,337,977
2,339,750,126
2,684,672.507
2,671,369,048
2,602,347,511
3,086,129,793
2,865,947,474
2,887,608,623
3,022,413.801
3,011,796,048
2,901,379,728
3.057,560,980
2,737,397,195
2.184,221,360
1.500_13/3 ma
8815,486,025
884,426,163
1,036,729,560
1,051,853,195
1,172,481,315
1,339,539.563
1,309,006,353
1,366,304,199
1,486,043,706
1,447.464,542
1,403,448,334
1,741,329,277
1,889,489,295
2,074,114,256
2,326,657,150
2,738,845,138
2.665,747,212
2,605,203,228
3,091,934,815
2,864,512,167
2.890,965,666
3,020.928,478
3,018,008,234
2,905,912,090
3,062,220,646
2,688,007,639
+2108,068,243
+114,656,528
—172,868.595
+120,332,208
+179,089,522
—28,958,798
+56,349,506
+136,168,743
—85,033,426
—39,998,560
+328,012,578
+205,066,407
+181,848,682
+265,635,870
+358,015,357
—67,476,090
—63,399,701
+480,926.565
—225,987,341
+23,096,456
+131,448,135
_9,132,430
—116,628,506
+151,648,890
—324,823,450
—503,786,279
2 122 01R ARO
—ARA 7120 MR
Net Earnings.
Year.
Year
Given.
Jan. 1 to June 301906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1029
$272,101,047
280,697,496
231.254,071
371,591,341
408.380,483 .
378,852.053
373,370,171
400,242,544
343,835,677
394,083,458
559,476.894
555,683,025
265,705,922
265,007,159
195,582,649
310,890,365
530,420,651
649,131,565
597,828,199
656,663,561
727,905,072
711,888.565
700,846,779
817,500,221
618,567,281
471,189,438
321.450.701
Year
Preceding.
$226,345,855
261,423,946
294,738,973
294,951,102
371,562,668
404,569,430
375,407,648
373,442,875
394,495,885
347,068.207
393,225,507
562,838,773
540,911,505
265,325,144
263,029,233
169,082,335 .
312.088,627
531,566,924
651,828,563
597,855,833
656,848,197
727,923,568
713,906,228
702,553,020
818,154,445
618,597,371
471.340.361
Increase(±)or
Decrease (—).
+845,755,192
+19.273,550
—63.484,902
+76,640,239
+36,817,815
—26,717,377
—2,037,477
+26,788,669
—50,660,208
+47,615,343
+166,151,381
—7,155,747
—275,205,583
—316,985
—67,446,584
+141,808,030
+218,332,024
+117,564,641
—54,000,364
+58,807,728
+71,056,875
—16,035,003
—13,059.449
+114,947,201
—199.687,164
—147,407,933
—149.889.660
As far as the winter weather has played a part in affecting
the traffic and earnings of the roads in the different years,
it has already been indicated that in 1932 as in 1931 and in
1930 there were no unusual conditions, but that in 1929, while
in the northern part of the eastern half of the country
weather conditions were not much of a drawback, on the
other hand in the western half the winter was quite severe,
extreme cold accompanied in many instances by repeated
heavy snowfalls having seriously interfered with railroad
operations. Particularly does this remark apply to Wisconsin and Iowa, Colorado, Utah, Wyoming, Montana, Idaho,
and, as a matter of fact, along much the same parallels of
latitude all the way west to the State of Washington. In
contradistinction to this, the winter of 1928 ranked as one
of the mildest on record, complaints of obstruction to railroad operations from snow or ice or extreme cold having
been entirely absent in all parts of the country in that
year. In 1927, too, the winter was not severe in any part
of the country, if we except a limited area in the Rocky
Mountain regions, where unusually heavy falls of snow were
encountered during January, February and March. In fact,
It may be said that in some of the Rocky Mountain States,
patriculaly Colorado and Wyoming, repeated heavy snowstorms occurred all through the winter of 1927, making
railroad operations difficult; even towards the middle of
April and unusually severe spring blizzard was reported,
seriously interupting traffic, the latter extending also into
South Dakota. Barring this, however, the winter of 1927
did not impose drawbacks of any great consequence anywhere. In 1926, likewise, the winter on the whole was not
much of a disturbing influence. The situation in that
respect was not so extremely good as it had been in 1925
and yet was on the whole quite favorable. In January
weather conditions in 1926 did not interfere with railroad
operations to any great extent over any large sections of
the country. On the other hand, in February the New England roads suffered severely by reason of heavy falls of
snow. The winter of 1926, taking the country as a whole,
was, as stated, quite mild, but in February there were some
big snowstorms in the East, with, however, nothing approaching a blizzard. In other words, there were no big drifts to
tie up traffic and interfere seriously with the running of
trains. In this city there was in 1926 no snowfall of any
consequence during the winter until 'February, but in this
Volume 135
Financial Chronicle
last-mentioned month there were two very heavy snowstorms, namely, one on Feb.3-4, when 10.3 inches of snow fell,
and another on Feb. 9-10, when the snowfall was 11.6 inches.
For the whole month of February the snowfall in this city
in 1926 aggregated 25.7 inches, being the heaviest on record
for any February since 1899, when the fall was 27.5 Inches,
and comparing with only 0.8 inch in February 1925 (when,
however, the fall was extremely heavy in January), and
with 11.5 inches in February 1924 and 17.9 inches in February 1923. The February snowstorms of 1926 seem to have
extended all over New England and through New York
State. New England roads virtually all reported for that
month large losses in gross as well as in net, and no doubt
the circumstance mentioned was in part responsible for
this, in addition to which, however, these roads must have
had their coal traffic reduced by the anthracite miners'
strike.
In both 1925 and 1924 the railroads enjoyed quite remarkable exemption from bad weather and from the often extreme rigors of the winter. In January 1925 bad weather
was somewhat of a drawback on certain lines here in the
East, though not to any great extent for the country as a
whole. There were repeated snowstorms in these parts in
the month in 1925, and in New York City the fall of snow
was the heaviest of any January in the history of the local
weather bureau, reaching 26.2 inches. This compared with
only 2.6 inches in January 1924, but with 21.9 inches in
January 1923, this latter having also been a month of very
heavy snowfalls. A storm which came toward the end of
the month in 1925—that is, Thursday, Jan. 29, and extended into Friday, Jan. 30—proved particularly mischievous in New York State. The New York Central RR, reported it as the worst in its history, especially between
Albany and Rochester, causing considerable delay in the
running of trains. The Twentieth Century train from Chicago was 16 hours late in reaching the Grand Central Terminal in New York City. It was due at 9:40 a. m., but did not
arrive until 1:18 and 1:33 the following morning (Saturday), coming in in two sections. The area of disturbance,
however, in this way was very much circumscribed, being
confined largely to New York and New England, while elsewhere in the northern part of the country the winter was
comparatively mild, and little complaint was heard of obstruction because of snow and ice or because of extreme cold.
After this heavy snowstorm in Now York State the latter
part of January (1925), from which, as noted, other parts
of the country were exempt, mild weather developed in
February, and this may be said to have been a condition
common to the whole United States and even Canada, the
winter nearly everywhere having been an open one and
spring having come unusually early virtually everywhere.
Nor, as already stated, was there much severe winter
weather in 1924, but in 1923, on the other hand, the winter
was of unusual severity in many parts of the northern half
of the United States, especially in New England and in
northern New York, where the roads suffered from repeated
snowstorms, and from the depth of the accumulated snowfalls, with resulting large increases in operating expenses.
Weather conditions in prior years have already been detailed
above.
Need for Credit Not as Great as Relief Anxiety
Would Indicate—New Lending Corporation
Unlikely to Aid.
H. PARKER WILLIS in "World-Telegram" for Aug. 16.
If it were not so serious a matter, it would be highly
amusing to note how persistent is the thought that there ate
numberless people and enterprises in this country neither
In need of charity nor under the necessity of replacing
maturing loans who wish to borrow large sums of money.
The idea, like Banquo's ghost, simply "will not down" that
business is unsatisfactory to-day largely, if not solely, for
the reason that bold and energetic entrepreneurs cannot
borrow money with which to conduct their operations.
The fact that the banks are earnestly seeking media of
investment and that the balance sheets of a great many
corporations show large excess reserves of cash seems to
mean exactly nothing to those suffering from this borrowing or lending complex.
It is interesting to recall the experience of the last six
months in this connection. Aside from the repeated efforts
of the Reserve System to induce greater activity by easy
credit policies we have, first of all, the Reconstruction
1221
Finance Corporation. Its supporters claimed this institution was to relieve, not to say revive, business by lending to
worthy borrowers who could not obtain credit elsewhere.
Lifebelt for Banks.
In practice it has turned out to be a sort of lifebelt for
hard-pressed banks and railroads, some of which, incidentally, are little better off for having received such aid.
Then came the so-called Young committee with various
and sundry plans for forcing recovery via the credit route.
Its most vigorous campaign centred around efforts to induce
greater use of trade acceptances.
The movement has resulted, so it is said, in the issuance
of only a relatively few trade acceptances to cover transactions that otherwise would have been carried forward on
open-book account. Its effect upon the volume of outstanding credit and its influence in stimulating a return of better
business conditions have been nil.
New Leading Medium.
Now comes the thought that a corporation to lend money
to cash-burdened corporations to enable them to stock up
on raw materials will help to eliminate the depression.
While but few, probably, in the financial community have
real faith in this project, there are always some who pick
up such ideas and make of them miracle-working devices for
trade recovery—only later to discover their mistake. Meanwhile, the so-called Federal Relief Act has gone to the statute
books (along with others), and, unless well informed observers are mistaken, may lead the Reconstruction Finance
Corporation to embark upon another farm board experiment
In the effort to raise commodity prices.
Are we as a people willing to go on weakening the financial structure of the country in our attempts to find a substitute for the obvious reforms in trade and finance required to place business on a really sound footing?
Course of the Bond Market.
The trend of general bond prices has again been upward
the present week. Railroad liens continued to set the pace
for the rest of the market. Public utility bonds have been
uniformly higher and the strength in this group was more
pronounced than it has been in weeks. Industrial bonds
have moved higher with the rest of the market and the group
has been characterized by large gains in many sspeculative
issues. Foregin bonds, although at times irregular, have
extended the advances of the last few weeks. Moody's price
index for 120 domestic bonds on Friday reached 80.14, as
compared with 76.67 a week previous, and 72.26 two weeks
ago. The low point for the year is 57.57 as of June 1, while
the high is 80.14 as of Friday of this week.
The obligations of the United States Government had a
minor setback during the first part of last week, only to
recover part of this loss in the last three days. The decline
was probably due to the decision of the Attorney-General
on the Glass-Borah amendment, which clarified the status
of the Treasury bonds up to 3%% as a backing for National
bank currency. Under this ruling these Treasury bonds
can be used only for three years for this purpose. This
adverse decision dampened somewhat the enthusiasm of
purchasers of these bonds. Another factor of importance
in this market the present week has been the total lack of
support by the Reserve System. Holdings of United States
Government bonds at the 12 Federal Reserve banks increased from $885,000,000 on April 6 to $1,851,000,000 on
Aug. 10, but in the last few weeks new purchases have been
very small and for the week ended Aug. 17 virtually no purchases were reported. This, in all probability, can be
explained by the recent return flow of gold to the United
States and by some return of currency from hoarding, both
of which factors tend to support member bank reserves without the intervention of the Federal Reserve. Moody's price
index for eight long-term Treasury bonds on Friday was
101.12, as compared with 101.61 a week ago, and 100.98
two weeks ago.
Railroad bonds continued to lead the advance and for the
greater part of the week they have been in demand. Several
issues are now selling close to their high prices for the year.
Further wide advances have been witnessed by the second
grade issues; namely, St. Paul 5s, 1975; Chicago & North
/0, 1949; Frisco Consolidated 43.s, 1978, and
Western 43
Chicago Rock Island & Pacific 43s, 1960. High-grade
issues also participated in the advance, but to a smaller
extent. The price index for 40 railroad bonds, computed
by Moody's from bond average yields, rose to 76.35 by
Financial Chronicle
1222
Friday, compared with 71.38 one week previously and 65.45
two weeks ago.
Utility loans have been consistently strong throughout
the past six trading days and showed more vigor than they
have in several weeks. Setbacks have been very few and
the movement upward in this group has not been confined
to any one grade of security, but rather all grades moved
forward. Among issues which enjoyed large gains are
2s, 1950; Carolina Power & Light
Minneapolis Gas Light 43/
5s, 1956; Central Power & Light 5s, 1956, Mississippi Power
5s, 1955; Nevada California Electric 5s, 1956, and Puget
Sound Power 43'Is, 1950. Several of these issues also
advanced quite sharply week before last. Moody's price
index for this group on Friday was 84.85, as compared with
81.66 a week ago, and 77.55 two weeks ago.
Industrial bonds of the second and low-grade classes have
continued to exhibit strength throughout the week. Outstanding among bonds showing large enhancement in market
price have been the American Chain 6s, American Beet
and
Sugar 6s, Childs Co. 5s, General Steel Casting 5
Remington Rand 5lAs. The pace of the advance in industrial obligations has been rapid, but as yet no diminution
in the eagerness of purchasers to buy has been evident.
The price index for this group, as computed by Moody's,
rose to 79.45 on Friday, compared with 77.66 a week ago and
74.77 two weeks ago.
The foreign bond market has been rather uneventful and
with the exception of Kreuger & Toll bonds, which showed a
very substantial appreciation on a percentage basis, only
slight changes are apparent. Italians, noticeably the
Government 7s and the City of Rome 63's, are somewhat
lower, but a steady trend of strength has been evident in
Scandinavian Government and municipal issues, particulary
in Copenhagen bonds. Moody's bond yield averages for
40 foreign bonds of all grades is 11.19% for Friday, as compared with 11.30% a week ago, and 11.53% two weeks ago.
In the municipal section of the bond market recent prices
have held up well, but there have been no startling gains.
An exception in this list has been in the case of Miami bonds,
which have been soft. There has been an increase in the
number of new issues, many of which are small but of good
quality.
Moody's computed bond prices and bond yield averages
are shown in the tables below:
MOODY'S BOND PRICES.*
(Based on Average Yields.)
65.54
64.31
63.74
62.56
61.56
60.67
61.11
60.97
59.80
58.11
57.10
55.55
54.61
53.94
53.58
52.99
53.22
76.35
74.98
74.15
72.95
71.96
71.00
71.38'
70.81
69.77
68.13
67.60
66.30
65.45
65.71
65.37
64.96
65.37
67.42
63.27
60.16
58.73
58.52
69.36
59.94
59.80
58.04
56.12
58.52
60.31
63.19
65.62
67.07
66.64
67.07
71.29
73.45
73.85
75.29
73.35
72.26
71.77
69.77
70.62
70.52
72.06
73.15
75.61
54.43
92.97
59.87
51.85
47.63
45.50
43.58
43.02
43.62
44.25
43.02
41.03
38.88
41.44
42.90
45.46
47.44
49.22
47.73
45.15
50.80
55.42
56.58
59.80
58.66
57.57
58.32
55.55
55.73
85.99
57.17
57.30
65.54
37.94
78.55
42.58
64.15
59.87
56.32
54.86
64.73
55.61
56.32
55.61
52.47
49.53
52.24
54.55
57.64
59.94
62.56
60.82
59.29
64.80
70.15
71.19
73.85
72.95
71.67
71.77
69.31
70.15
70.71
72.06
72.16
76.35
47.58
95.18
53.22
1 - k;
WWWW.C..4..4..4.4..400000002
i-Lia,,
Ii0b01;M,
4,
441g
CAOtnOsICWO4.01=.4..31AWJCn17,
75.61
74.88
74.57
73.65
72.55
72.45
72.26
71.67
71.00
70.24
69.77
69.13
68.67
68.58
68.31
67.86
67.86
31.01CCAC00...00,
0C.I.W..10MOWOOtACOlON.W.COCR.00
00
P. U.
44 4
WONC..000NNWOOCCOWWCACCOW
.1
RR.
q
c.c.c.comocr-oc,
ocor.c.nboomccmccommoccoo. c. co
CC,-.
0105t.CM.OVCOCCOONCOIOCNCO0h.COOM..0300
N 04 0?C..C1C.0
,
-.WO00000
.,
Q[..CONCOCA
79.45
77.88
76.46
74.67
74.77
75.82
76.78
76.35
73.45
73.55
77.00
78.88
80.95
81.90
82.62
80.95
79.68
82.50
84.35
84.72
85.74
83.48
82.02
81.54
79.80
80.49
81.07
82.99
82.87
86.38
71.38
101.64
76.03
120 Domes( cs
by Groups.
NOCOMMNOOMMOCCNCWINCO.VCV
W0"
4"4
90.
":
0C!"C.C2R .
q .Mg.
"1
4!C"
-"
.
:.
86.38
85.48
84.97
84.60
84.22
83.97
83.85
83.35
83.23
82.14
81.90
81.07
80.72
80.60
80.37
80.14
80.03
COCCWC,44
70.43
66.98
64.71
62.87
62.48
63.27
63.90
63.11
60.97
59.01
62.02
63.98
66.55
68.40
69.86
68.49
67.07
71.67
74.88
75.61
77.55
75.82
74.57
74.46
72.16
72.65
72.95
74.36
74.77
80.14
57.57
93.55
62.56
Mg Ct...COOCCMCMCCMCM
tvet00tWOICCOCR
80.14
79.11
78.66
77.88
77.00
76.57
76.67
76.35
75.61
74.57
73.95
72.95
72.26
72.06
71.67
71.29
71.38
COt666cmcioiriorcic.48stmvioo.ist:
C.i.40.0vloi-.660,
coococomcoocommcococomomo
coocomcomcncomoommcocomocoo
comocecoococ000m,..co
Aug. 19
18
17
16
15
13
12
11
10
9
8
6
5
4
3
2
1
WeeklyJuly 29
22
15
AU
120 Domestics by Rat nos.
120
DomesAa.
A.
Aaa.
Baa.
tic.
MOODY'S BOND YIELD AVERAGES.
(Based on Individual Closing Prices.)
luonc.r-ocacpc-m.cp.oc000m.c,
4.1mOcicOrmocMoi
c000mm0000moome.nnnt
1932
Daily
Averages.
Aug. 20 1932
All
1932
120
120 Domestics by Ratings.
Daily DomesAverages. tic.
Aaa.
Aa.
A.
Baa.
Aug. 19._
18
17._
16_
15-13._
12__
11.._
10-9._
Weekly
July 29_.
22__
15._
6.20
6.29
6.33
6.40
6.48
6.52
6.51
6.54
6.61
6.71
6.77
6.87
6.94
6.86
7.00
7.04
7.03
4.83
4.88
4.89
4.91
4.95
4.96
4.96
4.96
4.99
5.01
5.01
5.05
5.06
5.06
8.07
5.07
5 07
5.69
5.76
5.80
5.83
5.86
• 588
5.89
5.93
5.94
6.03
6.05
6.12
6.15
6.16
6.18
6.20
6.21
6.61
6.68
6.71
6.80
6.91
6.92
6.94
7.00
7.07
7.15
7.20
7.27
7.32
7.33
7.36
7.41
7.41
7.68
7.83
7.90
8.05
8.18
8.30
8.24
8.26
8.42
8.66
8.81
9.05
9.20
9.31
9.37
9.47
9.43
120 Domestics
by Groups.
RR.
6.54
6.67
6.75
6.87
6.97
7.07
7.03
7.09
7.20
7.88
7.44
7.59
7.89
7.66
7.70
7.75
7.70
40
ForP. U. Indus. eigns.
5.81
5.88
6.90
5.97
6.05
6.07
6.07
6.10
6.18
6.24
6.29
6.39
6.43
6.49
6.50
6.53
6.54
6.26
6.32
8.33
6.35
6.41
6.41
6.42
6.43
6.44
6.53
6.57
6.64
6.69
6.74
6.79
6.83
6.85
11.19
11.25
11.23
11.28
11.33
11.37
11.30
11.37
11.37
11.37
11.35
11.48
11.53
11.53
11.69
11.70
11.64
00
W
0
C
W
01
y
6.94 11.73
7.13
5.12
6.26
7.46
9.67
6.59
7.85
7.51
5.19
6.40
7.25 12.02
7.96 10.48
8.41
6.86
7.48 12.16
7.78
5.29
6.53
8.37 10.94
8.93
6.95
s
8.01
5.36
7.26 12.13
6.70
8.57 11.39
7.24
9.16
1
24.__
1 . 8.06
5.41
7.73 13.75
6.69
8.60 11.53
9.18
7.27
June 24
June
7.96
7.62 13.92
5.40
6.59
8.48 11.38
7.22
9.04
17
17__ 7.88
6.50
8.40 11.23
7.12
7.60 14.30
5.38
8.93
10
10._ 7.98
5.41
6.54
8.42 11.53
9.04
7.67 14.75
7.21
a
8.26
5.49
7.88 15.29
6.82
8.67 12.05
9.56
7.33
May 28
May 28-- 8.53
7.95 15.28
5.67
6.81
8.96 12.67 10.10
7.54
21
21- 8.12
5.46
6.48
8.60 11.94
9.80
7.06
7.71 14.82
14
14_ 7.87
6.31
8.35 11.56
9.21
6.87
7.55 14.03
5.27
7
7.56
5.19
8.73
6.72
7.24 14.10
6.13
7.97 10.95
Apr. 29._ 7.35
Apr. 29
8.40
7.08 13.70
6.05
7.67 10.52
6.58
5.15
22._ 7.19
22
5.10
5.99
7.50 10.16
3.05
6.50
7.02 13.31
15
15.._ 7.34
7.55 10.46
8.28
6.67
7.07 13.39
5.22
6.13
s
8-- 7.50
7.03 13.23
5.23
6.24
7.50 11.02
8.49
6.98
1
7.00
8.43
6.80 12.77
6.00
7.04
9.86
7.77
5.10
Mar. 24
Mar.24-- 6.68
7.16
6.15
6.71 12.66
4.96
6.82
9.07
5.85
18
18._ 6.61
8.12
4.96
5.82
8.89
7.05
6.67 12.62
6.78
11
6.58 12.31
11-- 6.43
4.90
5.74
6.64
8.42
6.78
5.93
4
6.59
6.87
6.09
6.81 12.55
3.03
5.92
6.83
8.58
Feb. 26
Feb.26-- 6.71
6.94
6.24
6.89 12.82
5.12
6.04
8.74
7.00
19
19_ 8.72
5.18
6.08
6.99
6.25
6.92 12.86
6.99
8.63
11
6.95
6.47
7.11 13.23
5.30
6.23
7.20
9.05
7.25
5
6.90
7.16
6.44
7.10 13.00
5.29
6.17
7.11
9.02
Jan. 29._ 6.87
Jan. 29
6.42
7.09 13.22
5.26
6.12
7.12
8.98
7.10
22.._ 6.73
22
5.96
6.96
6.96
6.20
7.02 13.12
5.18
8.80
15__ 6.69
15
5.16
5.97
6.85
8.78
6.95
6.08
7.05 13.30
Low 1932 6.20
High 1932
5.81
6.26 11.19
4.83
6.61
7.68
6.54
5.69
High 1932 8.74
Low 1932
5.75
9.23 12.96 10.49
7.66
8.11 15.83
7.03
Low
High 1931
1931 5.17
4.34
5.21
6.34
5.06
4.95
5.38
6.57
4.65
High 1931 8.05
Low 1931
9.41 11.64
9.43
6.81
6.57
7.90 16.58
5.57
Yr.dgoYear Ago98.41 83.35 67.33 81.90
Aug.19.31 5.67
Aug. 19 1931
86.64
5.00
4.42
4.85
5.93
7.47
6.05
8.39
5.95
2YrsAgo.
2 Years Ago101.14 96.23 85.74 98.25
Aug. 16 1930
96.54
Aug.16'30 4.97
4.94
4.47
4.99
5.74
4.86
5.11
4.68
6.86
* Note.-These prices are computed from average yields on the basis of one "Ideal" bond (4%% coupon, maturing in 31 years and do not purport to show either the
average level or the average ni)vern3at of altuil price quot ttlo3.3. They m3relY Serve to 111u3trate in a more comprehensive way II e relative levels and the relative movement of yield averages,the latter being the truer picture of the bond market.
Indications of Business Activity
THE STATE OF TRADE-COMMERCIAL EPITOME.
Friday Night, Aug. 19 1932.
The note of optimism is still clearly discernible in the
reports prom leading cities, but the big industries are still
for the most part quiet. This is distinctly the case with steel
and iron. Textile industries make the best showing, not only
at the South, but in New England. Cotton mills are resuming work after being idle or else they are increasing their
time; some are on full time. The shoe factories are busier.
Wholesale trade makes a better exhibit now than retail trade.
Some large orders have been received. And retail failures
have decreased sharply. Even collections have slightly
improved according to an unusually large number of reports.
That looks significant. General business though not at all
active, is a little better. Retail trade is a bit "spotted." It
still has to be stimulated by special sales and more or less
"special" prices. The people are in no mood to buy expen-
,
sive things with unemployment still very large. "Bargain"
sales are the most popular.
The rising stock market is a kind of "beacon of hope" to
the whole country; it is the traditional City on a hill that
cannot be hid. It has advanced with a readiness which has
encouraged nearly everybody, though some fear that the
rise has been rather too rapid in the absence of activity in
general business. The action of the bond market has also
been inspiriting, especially of late in railroad and industrial
issues. In stocks profit taking has halted the advance now
and then, but rallies quickly followed. Transactions have
latterly fallen off, but no one wants a wild runaway market.
Wheat has had its ups and downs, but latterly has risen
on an expectation that the commodity pool will soon be in
operation. Besides, tile technical position was improved by
an earlier decline'in prices. The Canadian crop reports, too,
have been rather bullish. Corn, oats and rye have simply
Volume 135
Financial Chronicle
followed wheat.in light trading. , Cotton advanced on the
persistent insatiable demand from mills in this country,
Europe and the Far East and on an understanding that a
commodity pool will soon be formed and begin to function
which is taken to mean that some 3,000,000 bales of Government cotton will be sold to mills for delivery during the next
four days, thereby relieving the market of the pressure
which it has had to undergo since July 9th. Since that date,
it is estimated in some quarters that some five or six hundred
thousand bales of Government-owned cotton have been sold
here, thereby hampering the upward movement of prices or
even causing noticeable declines. Coffee advanced on Rio
September 47 points and on Santos September 82 points,
but other deliveries were generally below last week's closing.
Yet the statistical position is steadily growing stronger owing
to the continued hostilities in Brazil and smaller shipments
to the United States. Sugar is up a point and the toile in
the main has been firm with spot Cuban raws 3.18c. delivered
and refined up to 4.25c. Rubber declined 2 points on Sept.
and 20 to 24 points on other months. Silk is 10 to 13 points
lower. Hides showed an advance of 25 points on near
deliveries, but distant months were weaker. Cocoa advanced 6 to 8 points. Silver fell 35 to 45 points. The
spring wheat harvest at the Northwest is nearing completion.
At Sioux City farmers have been blocking the roads to prevent marketing of farm products in order to cause a rise of
prices. In the Dakotas and also in Iowa farmers strikes
against low prices have attracted the attention of the whole
country. The farmers want $1 a bushel for wheat. The
receipts of wheat at lake and river ports in six weeks of the
the new season are the smallest for years past and less than
half those of last year in the same time. The outlook for
the corn crop is good. The tobacco crop will be short and
higher prices are expected.
Shoe manufacturers at several of the big centers are working on full time. At Philadelphia the wholesale dry goods
and millinery trades are more active. The hosiery industry
is quieter. Wool has been more active at Boston and
Philadelphia and the tone is better. Ofsteel the automobile
industry is buying little and this is one of the chief drawbacks
in that branch. Building is quiet; it may be stimulated
later by Government aid. Over-production of petroleum is
threatened and further curtailment is being attempted.
Lumber orders in the West have been exceeding the output.
Stocks on the 13th inst. in general declined a fraction to
a point, but in some cases 2 to 4,„with sales of 1,756,690
shares. The idea was that the technical position was a
bit
weaker after the recent active buying and continuous
advance. Bonds had an irregular decline with sales of
$7,543,000, but 40 issues of corporation bonds nevertheless
showed a net rise for the week of close to 4 points on large
trading. Stocks on the 15th inst. again showed that backlog
of public confidence which has been its distinguishing feature
for weeks past and advanced on some active issues 1 to
6
points. The trading, it is true, fell off to 1,906,290 shares,
or 2,800,000 shares less than on the previous Friday; but
this was nothing to regret. Nobody wants a headlong
market. Enough if it is going the right way without undue
enthusiasm. Wheat and cotton advanced. Reports
of
resumption or increase of work in mills were again noticeable.
was
announced
It
that President Hoover will have a conference on the 26th with leading bankers and industrialist
s
for concerted active measures to combat depression and
some set considerable store by this. Du Pont's dividend
was cut to 50c. from 75c. quarterly, but shorts caused a
sharp rally in the stock for all that. Corporation bonds
advanced and others, domestic and foreign, were
steady.
Stocks advanced 2 to 7 points early on the 16th inst.
on
a renewed demand which sent transactions in the end up to
3,612,185 shares. But on the rise heavy profit taking set
in
which caused a noticeable reaction though the ending was
a
net advance. The undertone seemed to be really unyielding
reactions
were more or less grudging. Bonds were
and
higher on domestic corporation issues and foreign bonds
were steady. On the 16th a Stock Exchange "seat" sold at
$150,000 an advance of $30,000 to the highest price since
February 18 this year. The value of Exchange seats has
risen $82,000 since May 31, when the lowest price of the
year, $68,000 was paid. Since then the following sales have
been arranged: July 14, for $80,000; July 25, $90,000,'and
August 4, $120,000. The total value of the 1,375 memberships in the exchange has increased $112,750,000 since
May 31. The highest price this year was $175,000 on
Feb. 17. Last year the highest price was $322,000 and the
1223
lowest, $122,000. The advance of Stock Exchange seats
has been rivaled by the gain in Curb Exchange memberships,
which advanced $7,500. to $36,000 on Monday. The lowest
price for one this year was $16,500.
On the 17th inst. stocks closed lower despite further if
generally more moderate advances in bonds and the fact
that the usual dividend was declared by the American Tel. &
Tel. Co. at the rate of 9%. Some felt that the recent
advance in stocks had perhaps been a bit too rapid with
many branches of trade still slow. The transactions were
2,874,420 shares, and early prices were higher, turning
downward as the technical position was found to be for
the moment weaker. On the 18th inst. at one time stocks
reacted in a smaller market but they rallied and closed
higher in what many regarded as a healthy market. The
Federal Reserve increased its gold supply within a week
$47,031,000 and this evoked favorable comment. It showed
an increase in two months of $162,262,000. Later in the
day a rise in grain, cotton and some other commodities had
a good effect. It was partly due to reports that definite
news of the formation of a pool to finance purchases of
commodities would soon be announced. Bonds led by
rails and industrials were higher. To-day stocks advanced
slightly in the early trading on the overnight announcement
of the formation of the Commodities Finance Corporation,
but later receded and ended generally below the previous
day's closing as professionals sold and wheat and cotton
declined. Sales were 2,168,170 shares. Bonds, however,
rose 1 to 9 points with railroad issues leading the rise due to
the announcement of E. G. Buckland, Chairman of the
Railway Credit Corporation that there would be no major
carrier receiverships this year. Speculative utility bonds
rose 1 to 3 points. United States Government and foreign
bonds showed little change.
The weekly electric output figures showed the same rate
of decline in comparison with 1931 in the preceding week,
namely 13.1%. Has the decrease been checked? Boston
wired that the Amoskeag Cotton Division at Manchester,
N. H., has resumed operations on the same schedule as previous to the usual three weeks' summer shutdown. A
number of employees in Langdon and Jefferson mills were
recalled a week ago to fill rush orders. At Lowell, Mass.,
there is a better tone in general business, the Lowell Chamber
of Commerce reports. The Lowell plant of the Nashua
Manufacturing Co. is now running with good orders on
hand. The Lawrence Manufacturing Co. reported better
conditions and the United States Bunting Co. has reopened.
The Talbot mills are working on several large orders and
the optimism prevails in the textile industry. Two local
hosiery concerns report an improvement in business and
another large textile company has recently received the
largest order in a number of years. Wool scouring and
process plants have likewise increased employment. Lowell
manufacturers have been making heavy purchases of raw
materials in common with manufacturers in the rest of the
country. Many merchants report improved business conditions and the release of about $1,500,000 in cash this
month in the form of dividends from a bank which closed
last year, together with the retarded pay of city employees
has had a stimulating effect on business and credit.
Charlotte, N. C., wired Aug. 16 that at least three mills in
the Carolinas have voluntarily increased wages and others
are running full time or building additions to their plants.
Durham hosiery mills have ordered a blanket increase of
10% in wages. Silk mills at Greensboro and Kernersville,
with enough orders booked to run them until Oct. 1, have
increased wages from 10 to 12%. In Rock Hill, S. C., six
of the largest mills and the Rock Hill Printing and Finishing
plant reported in a survey that 2,300 employees are working
on a full night and day schedule. Ninety-six persons have
been added to Statesville's payroll by the Paola Cotton Mill,
which had previously been idle for a month and prior to that
had operated only on part time. New machinery which will
require fifty more operators has been ordered for the Hazelwood plant of the England, Walton & Co. leather plant at
Waynesville. With orders enough to keep it busy on full
time for 8 months, the High Shoals Cotton Mills, at Lincoln,
have reopened after running spasmodically for the last year.
Mills in the vicinity of Anderson, S. C., announced last week
additional orders would enable them to operate full time
for several months.
At Greensboro, N. C., the Blue Bell Overall Co.'s two
plants employing 1,350 persons, and the plant at Middlesboro, Ky., with approximately 500 last week began full-time
1224
Financial Chronicle
operations on a five and one-half days, after several months
on a four-day-a-week schedule. About a year has elapsed
since the company's units operated on a full week program.
At Durham, N. C., two thousand employees of the Durham
Hosiery Mills will receive a 10% increase. Orders assure
the company of work for several weeks. The wage raise is
the first announced by an industrial corporation in the
State since the depression struck. The corporation operates
several mills and manufactures silk, rayon and cotton hosiery.
Austin H. Carr, president, announced that the increased
wages was due to a general improvement in business conditions. At Rock Hill, S. C., the Industrial Cotton Mills Co.
is operating on a day and night schedule of four days each
week. The night operatives and the day operatives are
working forty hours a week each. At Lancaster, S. C., the
Lancaster Cotton Mills, one of this State's largest textile
manufacturing plants, is on full time. At Kershaw, S. C.,
tITKershaw Cotton Mills is also on full time. At Columbia,
Miss., the Columbine Knitting Mills are operating on full time
both day and night employees. The hosiery manufactured
at these mills is being sold largely to Eastern markets.
At Jonesville, S. C., the Wallace Manufacturing Co. has
recalled all of the former night operatives and put them back
on night work, effective this week. At Martinsville, Va.,
the Martinsville Cotton Mill Co., Inc., is operating on full
time at the present. This plant, which is controlled by the
Chadwick-Hoskins Co. of Charlotte, N. C., has been operating on short time schedule for some time. Gainesville, Ga.,
wired Aug. 15th that two of the largest textile plants there
resumed operations to-day after a shutdown since June 9.
The Gainesville mill and the Regolet Manufacturing Co.
went on a full-time basis and their combined weekly payrolls will be about $9,000. The Chicopee Mill, which has
been in continuous daily operation, began day and night
work. At Dallas, Texas, two plants of the Texas Textile
Mills, employing 800 people at Dallas and McKinney which
have been limping along most of the summer on a three and
four day a week basis, are now running full, due to orders
pouring in from all parts of Texas and beyond. The Dallas
mill at Love Field and that at McKinney are now working at
capacity and from present indications it will not belong before
the mill at Waco will reopen which shut down last spring.
Blackburn, England cabled the A.P. Aug. 15th:"Britain's
vast cotton industry was threatened to-day with a strike
which would involve almost 500,000 operatives. The central
Board of the Northern Counties Textile Trade Federation
decided to call a strike August 27 if the dispute over the new
wage agreement is not settled. The walkout was schedurea
for 12 days hence so the employers might have an opportunity to make new proposals. Thus the door to peace was
left open. Negotiations have been going on since December.
Burnley,Lancashire,England cabled August 16:"About5,000
textile strikers and strike-breakers clashed here to-day and
for some time the police had more on their hands than they
could handle. There were disorderly scenes outside several
mills, but only one serious conflict. A hundred policemen
were required to restore order. None of them was injured."
As to the weather, on the 18th inst. New York had 67
to 77 degrees, with .14 of an inch of rain. Boston had
68 to 84; Chicago, 64 to 68; Cincinnati, 70 to 82; Cleveland,
68 to 72; Kansas City, 66 to 78; Milwaukee, 58 to 70; Philadelphia, 72 to 78, and Winnipeg, 40 to 74. To-day it was
68 to 81 degrees here, with the forecast fair to-night and
to-morrow and cooler to-night. Overnight Boston had 70
to 80 degrees; Portland, Me., 64 to 78; Chicago, 58 to 68;
Cincinnati, 54 to 78; Cleveland, 58 to 72; Detroit, 54 to 76;
Milwaukee, 58 to 70; Kansas City, 58 to 78; Portland, Ore.,
62 to 78; Montreal, 56 to 72, and Winnipeg, 46 to 74.
On the 14th inst. the New York City temperatures were
65 to 84. Boston had 64 to 80, Chicago, 66 to 80; Cincinnati, 58 to 84; Cleveland, 56 to 76; Denver, 26 to 96;
Detroit, 60 to 78; Kansas City, 72 to 88; Milwaukee, 66 to
to 74; St. Paul, 62 to 82; Montreal, 66 to 82; Omaha, 66 to
86; Philadelphia, 68 to 86; Portland, Me.,62 to 82; Portland,
Ore., 60 to 78; San Francisco, 54 to 58; Seattle, 56 to 74;
Spokane, 56 to 74; St. Louis, 70 to 86; Winnipeg, 64 to 88.
A great tropical hurricane on the 14th inst. swept over a
200-mile coast area of Texas, killing 25 persons and doing
much damage to property and crops especially three miles
southwest of Galveston. Some damage was done to the
cotton crop. Galveston was protected by its sea wall.
England has been hit by a severe heat wave and London
has had 92 degrees;at Shrewsbury 150 persons were overcome.
A belt of great heat across Europe has been keeping Austria
Aug. 20 1932
at a level of about 110 degrees, while the temperature in
France has been 97 degrees in the Northwest to 102 in the
South. The Air Ministry forecasts a continuance of the
humid condition which is accompanied by dense sea fogs
holding up shipping all along the English Channel from
Dover to Land's End.
Colonel Leonard P. Ayres of Cleveland Trust Co. Finds
Hope and "Feelings Akin to Confidence" Replacing
Gloom and Doubt—Renewed Confidence in Dollar
Viewed as Removing Barrier Which Restricted
Business—Glass Amendment Permitting Issuance
of Currency Backed By Federal Bonds a Backward
Step.
Asserting that "there has been a sweeping change in the
prevailing attitude of mind of the people of this country in
recpnt weeks," Col. Leonard P. Ayres, Vice-President of the
Cleveland Trust Co., observes that "it amounts to something
like a reversal in business sentiment." Col. Ayres goes on to
say,"gloom and doubt and apprehension have been displaced
by hope and feelings akin to confidence. These alterations in
mental attitude have accompanied changes in the prices of
goods and securities. The wholesale quotations of commodities, and especially those of farm and food products, have
been advancing. Bond prices have steadily strengthened,
and so consistently that on every trading day in July the
number of bond quotations that advanced on the New York
Exchange exceeded those that declined. In the same month
the rail stock averages went up over 65%, and those of the
other groups nearly as much." In the "Business Bulletin,"
August 15, of the Cleveland Trust Co.,from which we quote,
Col. Ayres takes occasion to comment on the Glass-Borah
Amendment to the Federal Home Loan Bank Act, affecting
the circulation privilege of National banks, and declares that
in enacting that amendment"we have taken a backward step
in our urreney legislation." Besides the extracts given above,
we quote what Col. Ayres has to say:
It would be pleasant and easy to infer that the bottom of the great
depression has been passed, that the corner has been turned, and that from
now on the processes of recovery will prevail. Many people have adopted
that conclusion, but such an interpretation of recent developments may well
prove over-sanguine. A more prudent directi-n of our thinking will lead us
to inquire why these improvements have come about, what economic forces
have caused them, and what inferences concerning the depression and Its
cure can be drawn from the facts as we find them.
The immediate cause of this recent Improvement is not far to seek. It
consists of a renewed confidence in the fundamental soundness of tht dollar.
From early last autumn to the beginning of this summer, both Americans
and foreigners had been disgussing the possibility of a sudden decrease in
the value of our dollar, either through our abandoning the gold basis for our
currency, or through a deliberate decrease in its value brought about by
legislation and designed to stimulate business. The citizens of other countries hastened to sell their American securities while they could still receive
pay for them in sound dollars. American business men hesitated to make
commitments. Speculators profited by short selling.
During those months the gold reserves of our banks suffered severe
shrinkage as the citizens of other countries hurriedly withdrew their American holdings. Then in June came the announcement that tho gold drain had
come to an end because the foreign balances here had been almost completely
withdrawn. At about the same time both our great political parties held
their conventions and adopted platforms pledging their support to sound
money principles. Finally the Congress adjourned without enacting any
seriously dangerous inflationary legislation. The prompt consequence of
these developments was a general relief from fear concerning the soundn-sel
of the dollar, a universal betterment of sentiment, and a notable series of
price recoveries.
Liberation vs. Stimulation.
The important feature that we should note well concerning this dispelling
of the well-nigh universal fear for the integrity of the dollar is that in an
economic sense it constituted a passive influence rather than an active one.
It was not in itself a stimulant to business; it was merely the removal of a
great barrier that restricted business. When the barrier was removed men
eagerly responded, as they have all along been keenly anxious to do. Business does not need stimulants; what it needs is freedom, opportunity, such
a removal of barriers as will afford it even the bare probability of operating
at a profit.
Millions of business men here and abroad are seeking in every way known
to them to resume business activity. All they ask or need is the opportunity
to move forward. The lessons of the past clearly indicate that they will
gain that opportunity rather through the removal of the barriers that noW
blockade them than because of great governmental expenditures designed to
stimulate business into such a pitch of activity as will overcome the barriers.
The only artificial stimulants that have ever been effective in this country
in imitating recovery from depressions have been great wars.
All the efforts of Government, or of groups working under Government
auspices, to aid in initiating business recovery are of the two sorts that have
been indicated. They are either efforts to remove barriers blockading
business, or they are attempts to stimulate business, and usually to do It
by spending public funds. In general the efforts of Government to force
business recovery through stimulation must prove futije in times of peace
for the public expenditures cannot be made great enough to overcome the
barriers to business that are responsible for prolonging the depression. If
the barriers can be easily overcome the job will be done by individual
Initiative anti private funds that are in the aggregate far more powerful
than Government appropriations can be.
Our own public agencies have made four great efforts in this depression
to start business recovery by the stimulation method. The first was the
series of conferences called by the President shortly after the stock market
crash three years ago. It resulted in the expenditure of many hundreds of
millions by the Federal Government, by States and municipalities, by
railroads and by public utilities, In the effort to restore normal business
Volume 135
Financial Chronicle
activity. Then came the payment to the veterans of nearly a billion dollars
in bonus funds. This was followed by the expenditure of half a billion dollars
to support the prices of farm products. Finally the Federal Reserve System
spent about throe quarters of a billion dollars in the purchase of securities in
its redundant credit campaign that terminated in 1931. All these efforts
were so completely submerged by the depression that they left hardly a
trace of beneficial result.
Now we have a reorganized Reconstruction Finance Corporation with
enlarged powers and huge resources. The Administration at Washington
has just announced its program for combating the depression with renewed
vigor through the Reconstruction Corporation and other governmental
agencies. The program is one of new attempts at business stimulation
through the expenditure pf public funds. Its elements are: hastening work
on the public building program; the expenditure of funds for slum clearance;
fostering loans on farms; facilitating the financing of farm marketing;
bringing about an expansion of credit to business in general; getting the
railroads to spend more money for equipment and maintenance; and creating
an organization to lend money on home mortgages.
The Basic Principle.
The fundamental principle of wise public policy in dealing with a serious
business depression is that the national Government should devote
its
efforts to the removal of those barriers that impede or prevent business
recovery. Only the national Government has the power to deal with
such
matters as our money, our credit system, our regulated railroad industry.
our taxation and national budget, and all our debt and trade relations
with
foreign nations. In the main the national Government wastes priceless
time,
dissipates its energies, and squanders the money of the taxpayers, when it
leaves unsolved those fundamental problems with which it alone has
the
power to deal, and devotes itself to the futile task of trying to stimulate
into
activity the trade and industry that are tense and eager to go, but
which
find themselves blockaded by conditions
that are beyond their control.
Removal of Barriers.
The greatest barrier to recovery in this
depression has been fear, and the
greatest fear has been that for the integrity
of the dollar. Much has been
accomplished toward dispelling that fear, but more remains
to be done.
The danger of disastrous foreign raids on
our gold supply is now past. From
now on any threats of the devaluation
of the dollar will be domestic in
origin and we must blame them on ourselves.
We still have a seriously
unbalanced budget, which constitutes a continuous threat.
Glass Amendment.
That should be corrected. In the recently enacted Glass Amendment
permitting the issuance of currency backed by Federal bonds outstanding
in huge amounts, we have taken a backward step in our currency legislation.
We should be vigilant to see that nothing more of that sort is done by the
next Congress. One thing that we should all keep clearly in mind is that we
must not expect any orderly and durable business recovery while doubt
remains as to the soundness of our money.
Banks.
Fears concerning banks have operated throughout this depression
as
powerful brakes holding back business initiative. Our greatest credit
problem has been caused by the hoarding of currency,and we now know
that
hoarding increases when bank suspensions are numerous, and
decreases
when they are tow. We now have in this country more than a
thousand million dollars of hoarded currency, and probably much more than that.
When
hoarding is increasing it constitutes our greatest national danger;
when
it is decreasing, and the currency is flowing back into the
banks, the
hoarded funds constitute our greatest potential credit
resource. Money
Coming out of hoards is in a credit sense equivalent to gold imports.
The
amount available is enormous, and if the back-flow can be
started and
maintained it will constitute a genuine business stimulant over a
long period
This is a matter that the Reconstruction Finance Corporation
can control.
It can do it by adopting the policy that it will not permit
any more bank
failures during the period of this emergency unless they
result from defalcations. Such a policy might involve making some loans that
would ultimately
result in small losses, but probably they would be among
the best investments that we ever made. Nationwide confidence in banks
during this
period would be a priceless asset, and it can be secured
by stopping suspensions.
Criticism of the Reconstruction authorities for making the recent
loan of
70 million dollars to a large bank in Chicago is ill-founded, for
the loan is
adequately secured, and it was essential to quiet unrest and fear
in that city.
Just criticism does however lie against the policy of the
Reconstruction
authorities that allowed 22 small banks to close in that city in
one week for
want of aid in small amounts, thus creating the situation
that made the
big loan necessary. A policy that would in fact terminate
bank suspensions
without guaranteeing bank deposits would probably do more to help
business
recovery than all the stimulation projects that have been
proposed.
Railroads.
Government has long exercised the strictest sort of regulatory
control over
the railroads, and now the time has come when it must adopt
sweeping
measures to alleviate the financial plight of these carriers as a
to business recovery. The railroads are our greatest industry. prerequisite
Their value
exceeds that of all our manufacturing equipment combined.
Our banks,
our insurance companies and our colleges depend heavily on the
soundness
of their bonds. Our railroads are rapidly running into a
financial crisis.
It is doubtful if the railroads as a whole can earn enough
in 1932 to pay
more than 60% of their fixed charges. They pay nearly a
million dollars
a day in taxes, and their leases this year will amount to nearly
a million
dollars a day.
The railroads have outstanding about 23 billion dollars
of
bonds. With most of the roads threatened with insolvency stocks and
because of
inability to earn enough to pay the interest on their bonds,the
market prices
of their securities have fallen to unprocedentedly low levels. It
seems idle
to expect a durable and continuing recovery in general security
prices while
the vast totals of rail securities are not earning interest charges.
It appears
even more hopeless for the National Administration to
attempt to stimulate
business by appeals to the railroads to increase employment
and to purchase
new equipment while the roads have some 11.000 good-order
idle, and over three-quarters of a million unused freight cars. locomotives
War Debts.
The problems of the international war debts, and of the
intimately related
problems of reparations, have been brought a long step nearer
to
by the accord reached at Lausanne. The essential next step is for solution
our own
Government to do something about them. We are facing the
grim fact that
the payment of war debts and reparations on the pro-depression
basis has
become impossible. The experience of the past decade has plainly
shown
that immense transfers of gold and goods from nation to nation in
time of
peace in payment for past war debts cannot long be continued
without
disorganizing the economic structure of the world. The
settlement of the
war debts by reduction, by a long moratorium, by a composition
based on
1225
the amounts of our exports taken by the debtor nations, or by some combination of such devices, would remove one set of great trade barriers.
Trade Barriers.
Restrictions to international trade can be dealt with only by Government.
Since the depression began nearly all the nations of the world have adopted
new measures designed to reduce imports. These barriers have included
tariffs, special import taxes, embargoes, quotas, controls of monetary
exchange, and the like. Each nation has aimed to protect its balance of
trade by restricting imports, and each attempt has resulted in a reduction
of the exports of other nations. International trade is now but a fraction of
what it was before the depression, and it is still rapidly shrinking. The
creditor nations have suffered most, and among them we have had the
greatest decline in our exports. The collapse of our export trade is sorely
felt by our cotton growers, our grain growers, and our manufacturers.
Powerful groups in this country are now attempting to initiate another
movement to stimulate business by purchases of basic commodities designed
to start an upward movement of prices, and they are urging the desirability
of securing Reconstruction loans for that purpose. Meanwhile a group of
nationsIn Europe have agreed upon a mutual and reciprocal lowering of
trade barriers among themselves for the purpose of freeing business from
trade restraints. The two movements exemplify the two conflicting principles that we have been discussing here. The one is our method of trying
to break the depression by stimulating business. The other is their procedure
of trying to take the brakes off, through the removal of obstacles, so that
business may be liberated, and set free to start its own expansion.
The stimulation of business is easy to plan, and hard to do. Projects for
effecting it are alluringly simple, and since they almost invariably entail
the expenditure of large sums of public money, they evoke the enthusiastic
support of all who hope they may profit from them. Some of them prove
temporarily helpful by providing increased employment. In most cases the
stimulation they supply proves to be merely temporary, but the debts they
leave behind are enduring. The great harm that they do IS that they divert
the attention of the public, the press, and the Government away from theessential tasks of dealing with the obstacles that bar the way to recovery.
Wars and Prices.
We now have available a continuous series of the index numbers of wholesale prices in this country since 1750. The recent extension back into the
colonial period is due to the patient research work of Professors Warren and
Pearson of Cornell University, to whom we are indebted for much of the
most valuable recent work in this field. The diagram at the foot of this page
shows the course of wholesale prices annually over the long period of 183years. The dashed line covering the later years of the Revolutionary War
Indicates a period during which the Continental money was of violently
fluctuating value. and during which reliable price records in English money
are not available.
The prices entering into the index in the years before 1790 are those
recorded as current in New York. Those for the next few decades are taken
from the periodicals published in the eastern sea-coats cities, and those of
more recent periods represent typical prevailing prices in a large number of
localities. The data are available monthly as well as annually, and they
undoubtedly constitute the most reliable record of commodity price changes
in this country over so long a period. It is worth noting moreover that no
other country has available any similar record of price movements extending
in continuous series over anything like so long a period. The value of such
a record is that it helps us to study our present economic problems in long
historical prospective.
The four sharp peaks of war prices constitute the most striking feature of
the diagram. A great war always lifts commodity prices far above their prewar levels, and the return of peace always starts them on long declines. The
war advances are sudden and the post-war declines, while rapid, are much
more gradual. The sharp advances are always accompanied by feverish
business activity that we know as war-time prosperity, and the long postwar declines always involve protracted periods of depression.
The influence of great wars in lifting commodity prices is felt in countriesother than those actually engaged in the hostilities. This is well illustrated
in the diagram which shows the high prices prevailing during the Napoleonic
Warsfrom 1793 to 1815, a period of some 23 years, in which we were engaged
in war only during the last three years. Similarly during the World War
our prices rose rapidly during 1915 and 1916 although we did not enter thewar until 1917.
Previous price declines following the great wars have always brought
distress, but they have never brought destruction. Our Government, our
monetary system, our standards of living, and our methods of doing business.
have always survived them. On each previous occasion the downward
sweep of prices has been checked at levels not far different from those that
have now been reached. Normal business activity azd even prosperity may
be resumed when prices are low, but not while they are rapidly falling.
Decline Noted in Shoe Production During July As
Compared With June by New York Hide Exchange.
Shoe production during July declined to 22,000,000 pairs,
compared with the June output of 23,400,000 pairs, according to preliminary estimates received by the New York
Hide Exchange. The Exchange in reporting this on Aug. 16also said that "based on these figures the total shoe output
for the first seven months of this year was 8 6-10% lower'
than the corresponding period last year."
Loading of Railroad Revenue Freight Continues Small.
Loading of revenue freight for the week ended on Aug. 6
totaled 496,033 cars, according to reports filed by the
railroad with the Car Service Division of the American
Railway Association and made public on Aug. 13. This
was a decrease of 14,654 cars below the previous week.
It also was a reduction of 238,697 cars under the same
week in 1931 and 408,124 ears under the same period two,
years ago. Details follow:
Miscellaneous freight loading for the week totaled 175,783 cars, a decrease
of 1,410 cars below the preceding week, 104,576 cars under the corresponding
week in 1931. and 174,071 cars below the same week in 1930.
Loading of merchandise less than carload lot freight totaled 166.971
cars, an increase of 26 cars above the preceding week, but 47.484 cars
below the corresponding week last year and 67,069 cars under the same
week two years ago.
Financial Chronicle
1226
Grain and grain products loading for the week totaled 37,169 cars, 3,340
cars below the preceding week, 9,251 cars below the corresponding week
last year and 24,117 cars below the same week in 1930. In the Western
districts alone, grain and grain products loading for the week ended on
Aug. 6 totaled 23,769 cars, a decrease of 6,452 cars below the same week
last year.
Coal loading totaled 78,404 cars, a decrease of 8,827 cars below the
preceding week, 30,032 cars below the corresponding week last year, and
53,208 cars below the same week in 1930.
Forest products loading totaled 14,268 cars, a decrease of 1,142 cars
below the preceding week, 13,090 cars under the same week in 1931 and
26,404 cars below the corresponding week two years ago.
Ore loading amounted to. 5.953 cars, a decrease of 594 cars below the
week before, 28.093 cars under the corresponding week last year, and
52,254 cars under the same week in 1930.
Coke loading amounted to 2.551 cars, an increase of 226 cars above the
preceding week, but 1,815 cars below the same week last year and 5,710
cars below the same week two years ago.
Livestock loading amounted to 14,934 cars, an increase of 407 cars above
the preceding week, but 4,356 cars below the same week last 'year and
5,291 cars below the same week two years ago. In the Western districts
alone loading of livestock for the week ended on Aug. 6 totaled 11,320
cars, a decrease of 3,737 cars compared with the same week last year.
All districts reported reductions in the total loading of all commodities
compared with the same week in 1931 and 1930.
Aug. 20 1932
Loading of revenue freight in 1932 compared with the two previous
years follows:
1932.
1931.
2,269,875
2,245,325
2,280,672
2,772,888
2,087,756
1,966,355
2,422,134
496,033
2,873,211
2,834,119
2,936.928
3,757,863
2,958,784
2,991,950
2.692,362
734,730
3,470,797
3,506,899
3,515,733
4,581,634
3,650,775
3,718,983
4,475.391
904,157
16,541,038
22,779,947
27.804,369
Four weeks in January
Four weeks in February
Four weeks in March
Five weeks In April
Four weeks in May
Four weeks In June
Five weeks in July
Week ended Aug.6
Total
1930.
The foregoing, as noted, cover total loadings by the railroads of the United States for the week ended Aug. 6. In
the table below we undertake to show also the loadings for
the separate roads and systems. It should be understood,
however, that in this case the figures are a week behind
those of the general totals-that is, are for the week ended
July 30. During the latter period only eight roads showed
increases over the corresponding week last year, the most
important of which were the Virginian Ry., the Gulf Coast
Lines and the Spokane Portland & Seattle Ry.
REVENUE FREIGHT LOADED AND RECEIVED FROM CONNECTIONS (NUMBER OF CARS)-WEEK ENDED JULY 30.
Total Loads Received
from Connections.
Total Revenue
Freight Loaded.
Railroads.
1932.
Eastern DistrictGroup A;
Bangor & Aroostook
Boston & Albany
Boston& Maine
Central Vermont
hialne Central
New York N. H.& Hartford
Rutland
Total
Group B;
y Butf.Rochester & Pittsburgh
Delaware & Hudson
Delaware Lackawanna & West
Erie
Lehigh & Hudson River
Lehigh & New England
Lehigh Valley
Montour
New York Central
New York Ontario & Western.
Pittsburgh & Shawmut
Pittsb. Shawmut & Northern_
x Ulster & Delaware
Total
Group C;
Ann Arbor
Chicago Indianan. & Louisville •
Cleve. Ctn. Chi. & St. Louis_
Central Indiana
Detroit & Mackinac
Detroit & Toledo Shore Line_ _
Detroit Toledo & Ironton
•
Grand Trunk Western
•
Michigan Central
•
Monongahela
New York Chicago & St. Lo ;
Pere Marquette
•
Pittsburgh & Lake Erie
Pittsburgh & West Virginia__ _
•
Wabash
•
Wheeling & Lake Erie
1932.
1931.
1931.
1930.
837
2,522
7,005
596
2,346
9,082
575
736
3.690
9,907
758
3,302
14.193
644
1,062
3,766
11,559
941
4,541
15,287
702
218
3,819
7,794
2,244
1,254
9,837
1,096
228
5,553
11.070
3,072
1,711
14,485
1,229
22,963
33,230
37.838
26,282
37.348
5,252
8,866
10,140
196
1,802
7,772
1,068
16,834
1,881
495
258
7,699
11,614
15,268
176
1,895
10,441
2.296
28,496
2,295
451
444
8,534
12,832
16,021
219
2,375
11,653
2,116
32,281
1,636
667
408
5,502
4,396
11.036
1,466
719
5,284
13
21,493
1.707
46
228
7,577
6.824
15,045
2,679
1,296
7,536
56
31,506
2,589
27
223
54,364
79,075
88,720
51,890
75,358
448
1,618
7,241
37
292
162
1,230
2,191
4,965
2,759
4,828
3,706
2,905
883
5.308
2,252
598
2.268
10,412
73
315
248
1,721
3,486
8,108
4,573
5,997
5.549
4,693
1,362
6,939
4,377
571
2,252
11,588
93
449
270
1,415
4,101
8,298
5,881
7,320
8.092
7,847
1,783
7,613
4,376
885
1,435
8,317
22
93
1,119
701
3,610
5,578
175
6,547
2.966
2,928
401
5,439
2,448
1,304
2.187
13,070
207
174
1,803
1,184
5.907
7,988
214
9,170
5.377
5,682
789
8,649
3,081
40.825
60,697
71.747
42,664
65,786
Grand total Eastern District_ . 118,152
173.002
198,305
120,818
178,492
22,389
949
33,266
3,625
z42,127
7,411
9,701
676
17,948
1,809
93
6,000
1
141
73
1,002
55,487
11,428
2,317
48
2,253
115
9,588
600
266
77
1,470
74,624
15.735
5,800
34
3,272
157
11,323
464
371
185
1,259
90,721
18,007
12,527
41
3,650
2
7,771
29
31
7
2,123
26,722
11,177
972
6
12,510
2,533
31
29
3.417
44,235
18,407
3,854
2
3,818
97,179
148,472
188,243
61,844
108,116
Total
Allegheny District•
Baltimore & Ohio
•
Bessemer & Labe Erie
.5; Buffalo & Susquehanna
Buffalo Creek & Gauley
Central RR. of New Jersey.. •
Cornwall
Cumberland & Pennsylvania_
Ligonier Valley
Long Island
.Pennsylvania System
•
Reading Co
•
Union (Pittsburgh)
West Virginia Northern
Western Maryland
Total
50
Pocahontas DistrictChesapeake & Ohio
Norfolk & Western
Norfolk & Portsmouth Belt Lin e
Virginian
17.378
12,606
634
3,156
22,644
18,434
1,046
3.144
26,347
21,915
919
3,847
5,397
2,580
833
375
8,498
4,081
1.531
433
.
33,774
45,288
52,828
9,185
14,543
Southern DistrictGroup A;
Atlantic Coast Line
Clinchfield
Charleston & Western Carolln a
Durham & Southern
Gainesville & Midland
Norfolk Southern
Piedmont & Northern
Richmond Frederick. & Potom.
Seaboard Air Line
Southern System
Winston-Salem Southbound_ _
5,707
655
328
131
45
1,251
398
292
5,425
15,494
140
8,329
1,193
497
176
58
1,913
588
424
8,301
23,275
187
9,161
1,265
647
160
49
2,353
490
466
10,165
25,850
213
3,110
777
478
258
48
710
496
2,483
2,238
7,741
445
5.401
1,253
1,218
241
92
1,124
896
4.857
3,839
14,445
918
Total
Group B;
Alabama Tenn. dv Northern_ _ _
Atlanta Birmingham & Coast-..
Att.& W.P.-West RR.of Ala.
Central of Georgia
Columbus & Greenville
Florida East Coast
Georgia
Georgia & Florida
Gulf Mobile St Northern
Illinois Central System
Louisville & Nashville
Macon Dublin & Savannah__
Mississippi Central
Mobile & Ohio_
Nashillle Chattanooga & St. L.
New Orleand,
Great Northern
Tennessee Central
Total.
http://fraser.stlouisfed.org/
•
Federal Reserve Bank of St. Louis
1932.
1931.
1930.
202
570
598
2,974
168
243
702
226
623
16,957
14,137
102
120
1.460
2,433
830
244
264
1,476
992
5,839
223
441
1,393
574
.6130
23,153
20,382
190
171
1,992
2,863
758
525
337
1,512
1,062
4,624
365
513
1,172
588
954
25,775
23,720
207
232
2.457
4,094
948
686
1932.
95
293
711
1,5713
114
375
874
227
516
7,695
2,598
201
254
855
1,569
230
490
1931.
200
529
1,041
2,995
281
425
1,523
293
814
10,007
5,439
348
484
1,220
3,083
325
565
42,087
61,908
69,224
18,673
29,570
Grand total Southern District._
71,953
106.845
120.043
37,457
63,654
Northwestern DistrictBelt Ry. of Chicago
Chicago & North Western
Chicago Great Western
Chic. Mllw. St. Paul & Pacific_
Chic. St. Paul Minn. & Omaha
Duluth Missabe & Northern_ _ _
Duluth South Shore & Atlanti
Elgin Joliet & Eastern
Ft. Dodge Des M.& Southern.
Great Northern
Green Bay & Western
Minneapolis & St. Louis
Minn. St. Paul & 5.5. Marie_ Northern Pacific
Spokane Portland & Seattle_ - _
1,209
13,880
2,208
14,867
3,390
2.040
257
2,576
321
8,008
471
1,891
4,321
6,797
1,139
1,826
21,888
3,420
22,470
4,131
13,247
967
4,575
392
13,610
606
3,019
6,405
9,748
1,053
1,512
30,001
3,640
28,049
5,403
19,976
1,720
8,508
583
20,478
. 651
3,489
8,458
11,497
1,391
1,890
6.820
1,790
5.411
2,951
93
342
2,747
120
1,734
367
918
1.731
1,857
726
2,784
11,135
2,785
7,829
4,128
95
484
4,234
257
2,840
550
1,731
2,258
2,499
983
63,375
107.155
146,256
29,497
44,372
Central Western Dist.Atch. Top.& Santa Fe System
Alton
Bingham & Garfield
Chic ago Burlington & Quincy.
Chicago Rock Island & Pacific
Chicago & Eastern Illinois
Colorado & Southern
Denver & Rio Grande Western
Denver & Salt Lake
Fort Worth & Denver City-- Northwestern Pacific
Peoria & Pekin Union
Southern Pacific (Pacific)
St. Joseph & Grand Island
Toledo Peoria & Western
Union Pacific System
•
Utah
Western Pacific
20,724
3,321
160
13,371
12,193
2,535
684
1,194
195
1,172
530
228
18,090
235
380
9.885
• 142
1,246
26,579
4,222
189
21,019
17,037
3.120
1.273
2,123
390
1.378
935
170
20,282
410
411
14,098
192
1,793
30,607
3,559
4,521
1,818
291
17
28,247
4,653
5,172
30,022
3.807
1,374
1,236
1358
3,043
1,876
492
19
1,364
591
1,487438
320
. 17
25,706
2,597
375
260
355
675
17,589
8,139
249
2
1,857
1,309
4,828
2,534
20
5,495
8,552
2,452
992
2,083
28
888
451
32
3.809
295
558
7,441
7
1,743
•
83,235
115,617
Total
Total
Southwestern District
•
Alton & Southern
Burlington-Rock Island
Fort Smith & Western
Gulf Coast Lines
Houston & Brazos Valley
International-Great Northern.
Kansas Oklahoma & Gull....
.
Kansas City Southern
Louisiana & Arkansas
Litchfield & Madison
Midland Valley
Missouri & North Arkansas. _ _
Missouri-Kansas-Texas Lines- _
Missouri Pacific
Natchez & Southern
Quanah Acme & Pacific
St. Louls-San Francisco
St. Louis Southwestern
San Antonio Uvalde & Gulf _ - Southern Pacific in Texas & L I.
Texas & Pacific
Terminal RR.Assn. of St. Lou Is
Weatherford MM.Wells & No..
90 RRR
44 020
Rn RI o
15.784
34.054
Total
Total
x Included in New York Central. y Included in Baltimore & Ohio RR. z Estimated.
Marked Increase Noted in Wholesale Prices by United
States Department of Labor from June to July.
The index number of wholesale commodity prices as computed by the Bureau of Labor Statistics of the United States
Total Loads Received
from Connections.
Total Revenue
Freight Loaded.
Railroads.
cio
141,561
30,974
43,408
7.208
1,872
288
5.047
3,346
1.945
23
227
168
160
1,119
292
5,052
480
2,248
2.202
215
991
86
5,474
19,891
38
81
9,397
3,053
389
6,733
4,957
2,167
41
290
276
237
2,488
588
1,917
362
2,989
1,877
282
1.181
129
6,654
22,087
32
155
12,151
2,587
446
7,879
5,139
2,792
49
2,207
222
139
910
35
1,325
506
1,052
1,107
321
196
188
2,004
5,762
18
42
2,667
1,061
212
2,326
2,391
1,760
34
2,921
445
153
1,651
37
1,773
1,101
2,983
1,070
724
247
301
3,07C
9,511
31
iii
3,891
1,591
22(
3,751
3,721
2,67:
3:
42.089
RR 450
79 RIR
9R Ana
42 On
125
82
1,141
211
1,607
198
1,281
915
80
342
41
4,369
12,693
32
iis
Department of Labor shows a marked increase from June
1932 to July 1932. This index number, which includes
784 commodities or price series weighted according to the
importance of each article, and based on the average prices
for the year 1926 as 100, averaged 64.5 for July as compared
Volume 135
Financial Chronicle
with 63.9 for June,showing an advance of nearly 1% between
the two months. When compared with July 1931 with an
index number of 72, a decrease of approximately 10M%
has been recorded in the twelve months. The Bureau further reported on Aug. 17 as follows regarding wholesale
prices in the United States:
The farm products group made the greatest gains, advancing more than
4%% in the month period. Increases were recorded in the average prices
of corn, rye, cows, steers, hogs, sheep, poultry, cotton, eggs, lemons and
potatoes in Boston and New York. Decreases in the average prices of barley, oats, wheat, calves, dried beans, fresh apples, oranges, peanuts, seeds,
leaf tobacco, onions, potatoes in Chicago and Portland, and wool, were
shown for July.
Among foods price increases were reported for butter, cheese, bananas,
fresh and cured beef, lamb, mutton, fresh and cured pork, veal, beverages,
copra, lard, raw and granulated sugar, edible tallow, tea and vegetable oils.
On the other hand, evaporated milk, rolled oats, rye and wheat flour, corn
meal, rice, canned fruits and dressed poultry averaged lower thard in the
month before. The group as a whole increased more than 3%% in July
when compared with June.
The hides and leather products group decreased slightly more than 3%
during the month. Decreases in boots and shoes and other leather products
offsetting advances in hides and skins and leather. Textile products as a
whole decreased 214% from June to July. due to marked declines for cotton
goods, knit goods, silk and rayon, woolen and worsted goods, and other
textile products. The subgroup of clothing declined slightly.
In the group of fuel and lighting materials increases in the prices of gas
and petroleum products more than offset decreases in the prices of anthracite coal, bituminous coal and coke. As a whole the group showed a net
advance of 1% over the June level.
Metals and metal products showed a downward tendency for July. due
to decreases in iron and steel products and non-ferrous metals. Increases
were reported for plumbing and heating fixtures and motor vehicles, while
agricultural implements remained at the June level. In the group of building materials cement and other building materials moved upward and
structural steel showed no change in average prices for the two months.
Brick and tile, lumber and paint and paint materials continued their downward movement,forcing the group as a whole to decline approximately 1%%
Drugs and pharmaceuticals, fertilizer materials and mixed fertilizers
showed recessions during July. Chemicals advanced slightly between
June and July, causing the group as a whole to show practically no change
between the two months.
Both furniture and furnishings declined slightly from June to July. As
a whole the housefurnishing goods group declined approximately 1% from
the month before.
The group of miscellaneous commodities increased less than % of 1%
between June and July, advancing prices of cattle feed, crude rubber and
automobile tires and tubes more than counterbalanced decreases in paper
and pulp and other miscellaneous commodities.
The July averages for raw materials, finished products and non-agriultural commodities were above those for June, while the averages for semifinished articles and all commodities less farm products and goods were
below the June averages.
Between June and July price increases took place in 146 instances, decreases in 227 instances, while in 411 instances no change in price occurred.
INDEX NUMBERS OF WHOLESALE PRICES BY GROUPS AND SUBGROUPS OF COMMODITIES (1926=100.0).
Cottanodtly Groups and Subgroups.
64.5
47.9
36.7
54.1
48.4
60.9
58.2
65.7
59.7
62.0
58.5
68.6
84.4
33.5
60.0
83.7
52.7
66.0
50.0
47.8
26.2
53.6
66.5
72.3
84.5
81.6
76.3
(a)
(")
49.7
79.2
84.9
77.2
95.3
47.0
67.1
69.7
75.9
77.3
56.9
66.8
67.1
81.7
77.9
73.0
78.9
57.6
66.8
68.8
74.0
75.1
73.0
64.3
40.1
42.2
76.2
6.1
84.5
54.7
55.5
70.5
68.0
69.7
64.5
47.8
61.0
68.5
52.3
72.8
79.0
69.5
73.0
75.6
64.3
64.7
48.4
61.5
69.3
52.3
72.8
79.1
69.5
73.2
75.0
64.5
64.8
47.9
61.9
69.9
52.5
73.0
79.2
69.6
73.4
74.9
64.5
65.2
49.4
62.5
70.2
53.0
72.9
79.4
69.4
73.4
74.9
64.7
Wholesale Prices Showed Largest Gain This Year
During Week Ended Aug. 13, According to National
Fertilizer Association.
During the latest week (Aug. 13) the wholesale price index
of the National Fertilizer Association showed the largest gain
for any week during the present year. The index number
advanced from 61.3 to 62.3. During the preceding week the
index declined slightly. The latest index number is almost
three full points higher than the record low of 59.6 reached
on June 11 1932. A month ago the index number stood.
at 61.4, and a year ago it was 67.7. (The index number 100
is based on the average for the three years 1926-1928.) Continuing the Association also said as follows on Aug. 15:
During the latest week eight groups advanced, two declined, and four
showed no change. Textiles, fats and oils, grains, feeds and livestock,
foods, metals, automobiles, fuel and miscellaneous commodities were higher.
The largest gain was shown in the textile group. Grains, feeds and livestock, and fats and oils made substantial gains. The declining groups were
house-furnishing goods, and fertilizer materials. The losses in these groups
were comparatively small.
An unusually large number of commodity prices advanced during the
latest week, while the number of commodities that declined was exceptionally small. There were 49 advances and 11 declines during the latest
week. During the preceding week 22 commodity prices were higher, while
17 were lower. The outstanding gain during the latest week was shown
in cotton prices, the spot market advancing more than 1 4 cents per pound.
Other important commodities that advanced during the latest week were
lard, practically all vegetable oils, flour, potatoes, apples, wheat, corn,.
rice and many other grains, cattle, hogs, heavy melting steel, silver, cottonseed meal, silk and rubber. Among the commodities which declined
were hams, oranges, coffee, sulphate of ammonia, cotton ginghams, cotton
prints, and cornmeal. None of the important basic raw materials decline
during the latest week.
WEEKLY WHOLESALE PRICE INDEX-BASED ON 476 COMMODITY
PRICES (1926-1928=100).
Per Cent
Each Group
Scars to the
Totat Inds:.
23.2
16.0
12.8
10.1
8.5
6.7
6.6
6.2
4.0
3.8
1.0
.4
.4
.3
100.0
Group.
Foods
Fuel
Grains, feeds and livestock
Textiles
Miscellaneous commodities
Automobiles
Building materials
Metals
House furnishing goods
Fats and oils
Chemicals and drugs
Fertilizer materials
Mixed fertilizer
Agricultural implements:-..
..
All groups combined
Latest
PreWeek
Aug. 13 ceding
1932. Week.
61.1
67.6
45.1
40.7
59.8
87.7
71.5
68.4
78.2
• 41.9
87.4
68.8
71.8
92.1
62.3
61.3
Month
Ago.
Year
Ago.
MCOWNr..WC•110..01..
63.9
45.7
37.7
46.7
48.2
58.8
57.4
66.8
62.4
56.0
55.4
70.8
87.5
32.5
58.7
96.4
53.9
67.4
51.0
49.6
27.5
55.0
66.7
71.6
85.3
81.8
76.9
105.5
106.3
48.2
79.9
84.9
79.8
93.8
47.5
66.7
70.8
76.1
77.1
57.6
73.3
66.7
81.7
77.6
73.1
78.6
58.3
68.0
69.0
74.7
75.4
74.0
64.2
39.6
42.1
76.2
5.8
84.6
53.2
57.6
70.0
67.8
70.1
65.0
48.7
61.2
68.5
52.4
72.8
80.3
69.7
73.0
75.6
64.3
04..40;04..141,
:alirZtZ.C
.
4
OCVM4,001*CA 006,1,01.
72.0
64.9
49.0
63.0
71.3
74.0
80.6
71.5
74.2
73.4
70.6
89.4
93.5
72.7
89.8
101.4
66.5
76.1
66.8
60.0
43.8
67.4
75.2
62.9
90.8
83.5
81.5
97.9
103.5
30.3
84.8
94.2
82.7
94.7
61.4
86.8
78.1
83.4
75.8
67.2
79.0
86.8
84.3
83.7
78.9
82.4
62.1
78.7
80.2
85.7
82.8
89.1
69.7
46.0
55.8
80.6
13.2
88.6
64.3
69.3
76.1
73.5
73.9
All commodities
Farm products
Foods
Hides and leather products
Textile products
Fuel and lighting
Metals and metal products
Building materials
Chemicals and drugs
Housefurnlshing goods
Miscellaneous
WOO!..0[.
..00.00t.0
;,.* July
z 1932.
Week EndingJuly 16. July 23. July 30. Aug. 6. Aug. 13.
9WOVD00.00t.0.1...W.
June
1932.
This index number, which includes 784 commodities or price series.
weighted according to the importance of each article and based on the
average price in 1926 as 100.0, shows that an increase of 0.6 of 1% ha
taken place in the general average of all commodities for the week of
Aug. 13, when compared with the week ended on Aug. 6.
The accompanying statement shows the index numbers of groups of
commodities for the weeks ended July 16, 23, 30, and Aug. 6 and 13.
INDEX NUMBERS OF WHOLESALE PRICES FOR WEEKS OF JULY 16,
23, 30 AND AUG. 6 AND 13 (1926=100.0).
WO
All commodities
Farm products
Grains
Livestock and poultry
Other farm products
Foods
Butter, cheese and milk
Cereal products
Fruits and vegetables
Meats
Other foods
Hides and leather products
Boots and shoes
Hides and skins
Leather
Other leather products
Textile products
Clothing
Cotton goods
Knit goods
Silk and rayon
Woolen and worsted goods
Other textile products
Fuel and lighting materials
Anthracite coal
liltuminou.s coal
Coke
Electricity
Gas
Petroleum products
Metals and metal products
Agricultural implements
Iron and steel
Motor vehicles
Non-ferrous metals
Plumbing and beating
Building materials
Brick and tile
•
Cement
Lumber
Paint and paint materials
Plumbing and heating
Structural steel
Other building materials
Chemicals and drugs
Chemicals
Drugs and pharmaceuticals
Fertilizer materials
Mixed fertilizers
Housefurnishing goods
Furnishings
Furniture'
Miscellaneous
Automobile tires and tubes
Cattle feed
Paper and pull)
Rubber, crude
Other miscellaneous
Raw materials
Semi-manufactured articles
Finished products
Non-agricultural commodities
All commodities less farm products and foods_
• Data not Yet available.
July
1931.
1227
Wholesale Prices During Week Ended Aug. 13 Increased
Slightly, According to United States Department
of Labor.
The Bureau of Labor Statistics of the United States Department of Labor announces that the index number of
wholesale prices for the week ended Aug. 13 stands at 65.2,
as compared with 64.8 for the week ended Aug. 6. Continuing, the Bureau also.said on Aug. 17:
69.8
56.3
59.5
54.9
69.5
88.6
76.8
77.0
89.8
59.8
86.8
75.8
81.2
95.2
61.4
67.7
Retail Food Prices Increased About 1% During Period
from June 1 1932 to July 15-United States Department of Labor Reports Average Decrease of
About 16% Since July 15 1931.
Retail food prices in 51 cities of the United States, as
reported to the Bureau of Labor Statistics of the United
States Department of Labor, showed an average increase
of about 1% on July 15 1932, when compares with June 15
1932, and an average decrease of about 15% since July 15
1931. The Bureau's weighted index numbers, with average
prices in 1913 as 100.0, were 119.0 for July 15 1931; 100.1
for June 15 1932, and 101.0 for July 15 1932. Continuing,
the Bureau also said as follows on Aug. 19 regarding retail
food prices in the United States:
Changes in Retail Food Prices by Cities.
During the month from June 15 1932 to July 15 1932, 43 of the 51 cities
from which prices were received showed increases in the average cost of
food as follows: Detroit, Indianapolis, and Little Rock, 5%; Baltimore
and Boston. 4%; Bridgeport. Cleveland, Manchester, and Rochester. 3%;
Buffalo, Chicago, Cincinnati, Columbus, Fall River, Milwaukee, Newark,
New Orleans. Peoria, Portland (Me.), St. Paul, and Washington, 2%;
Birmingham, Dallas, Denver, Minneapolis, Mobile, New York, Philadelphia, Pittsburgh, Portland (Ore.). Providence, Richmond, St. Louis,
Savannah, and Springfield (Ill.), 1%, and Charleston (S. C.). Louisville.
Memphis, New Haven, Norfolk, Omaha, Salt Lake City, and Seattle.
less than 0.5 of 1%. Eight cities showed decreases: Kansas City, 2%;
Atlanta. Houston, and San Francisco. 1%. and Butte, Jacksonville, Los
Angeles. and Scranton, less than 0.5 of 1%.
For the year period July 15 1931 to July 15 1932, all of the 51 cities
showed decreases: Cincinnati, 20%; Kansas City, Little Rock, Minneapolis, Mobile, and Omaha, 19%; Houston, Pittsburgh, and St. Louis. 18%;
Atlanta, Butte, Dallas, Jacksonville, Louisville, Philadelphia, St. Paul,
and Salt Lake City. 17%; Chicago. Memphis, Savannah, and Washington,
16%; Birmingham, Boston, Charleston (S. C.), Columbus, Detroit, Los
Angeles, Manchester, Milwaukee, New Orleans, Richmond, San Francisco,
Scranton, and Springfield (Ill.). 15%; Baltimore, Denver, and Peoria,
14%; Cleveland. Fall River, Indianapolis, New Haven, New York, Portland (Me.), Portland (Ore.), and Providence, 13%; Buffalo, Newark.
Norfolk, and Seattle, 12%; and Bridgeport and Rochester. 11%•
Unemployment Results in Decline of Average Weekly
Pay in Manufacturing Industry in Three Years
•
27.3%-Cost of Living Dropped 22.3% According
to National Industrial Conference Board.
According to the National Industrial Conference Board,
•the contents of the average weekly pay envelope in manufacturing industry have declined 27.3% in the three years
between June 1929 and June 1932. That the decline was
not much larger is due to the decrease in the cost of living of
wage earners, which, while it has not kept pace with drop
in earnings, has in the three years noted amounted to 22.3%,
says the Board. On Aug. 15 the Board further said:
Three factors enter in to the computation of the purchasing power of
weekly earnings, namely, the number of hours worked per week, the rate
of pay, and the cost of living. In June 1929, the average number of hours
Per week worked by those employed was 48.6 hours. In June 1932, this
figure had fallen to 32.7. or a decrease of 32.7%. In June 1929 the weekly
earnings in actual dollars were $28.69, and in June 1932, they had dropped
to $16.24, or a decline of 43.4%. But the decline of 22.2% in the cost of
living made the purchasing power of the June 1929 dollar equal to $1.29.
in June 1932.
Average weekly earnings fell off sharply between May and June of this
year, from $17.17 to $16.24, or 5.4%. While this decline has been due in
some measure to reduced rates of pay, the greater factor has been the
shortened work-week. Average hourly earnings of all wage earners combined were 50 cents in June, which Is 1 cent, or 2.0%, lower than in May.
In comparison with the level of hourly earnings in June 1929. when they
averaged 59 cents, there has been a decline in the three-year interval
of 15.3%.
The Conference Board returns from 25 industries regularly reporting
show further lay-offs of wage earners during June, bringing the employment
index 5.6% below that of May,and 42.8% below that of June 1929. While
there is generally a decline in employment between May and June in these
25 industries combined, the recession at this time was considerably greater
than might normally be expected.
With only a few exceptions the decline in activity in the separate industries, as gauged by the number of persons laid off and by the number of
hours worked by those employed, has been larger than is generally found
during this time of the year, and in some industries the curtailments have
been very drastic. On the other hand, some exceptions were noted. In
the agricultural implement industry, employment fell off very sharply,
although the average number of hours worked per week was higher in June
than in May, with resulting higher average weekly earnings for those at
work. In the boot and shoe industry and in the foundries and machine
shops, manufacturing "other products" also, a similar situation was shown,
although the decline in employment was not nearly so pronounced. In
the furniture industry, a decline in employment was accompanied by an
increase in the average number of hours worked per wage earner and a
decline in the average weekly pay. A similar condition was found in news
and magazine printing. Lumber and millwork showed an increase in
employment but not in the average work-week and weekly earnings. A
definite increase in activity, which is unusual at this time of the year,
was noted in the rubber industry.
The cost of living of wage earners declined nearly 1% between May and
June, making a total decline of 22.2% since June 1929. The largest decline
between May and June was noted in clothing prices, 1.8%, closely followed
by rents, 1.5%. Contrary to their usual seasonal movement, which is
upward, food prices declined 1.2% between May and June. Since June
1929,food and clothing prices have declined 35.4% and 33.0% respectively
and rents have declined 21.3%.
Electric Output for Week Ended Aug. 13 1932 13.1%
Below Same Period a Year Ago.
The production of electricity by the electric light and
power industry of the United States for the week ended
Saturday, Aug. 13, was 1,415,122,000 kwh., according to
the National Electric Light Association. The Atlantic sea-
board shows a decrease of 10.1% from last year, while
New England, taken alone, shows a decrease of 11.2%.
The central industrial region, outlined by Buffalo, Pittsburgh, Cincinnati, St. Louis and Milwaukee, registers as
a whole a decrease of 16.6%. The Pacific Coast shows a
decline of 11.9% below last year.
Arranged in tabular form, the output in kilowatt hours
of the light and power companies for recent weeks and by
months since the beginning of 1932 is as follows:
Wee.te
Ended.
1932.
Jan. 2_.._. 1,523,652,000
Jan. 9 ---- 1.619,265,000
Jan. 16 ---- 1,602,482,000
Jan. 23 ---- 1.598,201,000
Jan. 30 ---- 1,588,967,000
Feb. 6 ---- 1,588,853,000
Feb. 13 -_-- 1,578,817.000
Feb. 20 __-- 1,545.459,000
Feb. 27 -- -- 1,512,158,000
Mar. 5 ---- 1,519,679,000
Mar. 12 ---- 1,538,452,000
Mar. 19 -_-- 1,537,747,000
Mar.26 -_-- 1,514,553,000
Apr. 2 __-- 1,480,208,000
Apr. 9 ---- 1,465.076,000
Apr. 16 -_-_ 1,480,738,000
Apr. 23 -_-_ 1,469,810,000
Apr. 30 -__- 1.454,505,000
May 7 ---- 1,429,032,000
May 14____ 1,436,928.000
May 21 __-_ 1,435,731,000
May 28 ---- 1,425.151,000
June 4 ____ 11,381,452,000
June 11 __-_ 1.435,471,000
June 18 --- 1,441,532,000
June 25 -___ 1,440,541,000
July 2 ---_ 1,456,961,000
July 9 ---- z1,341,730,000
July 16 ____ 1,415,704,000
July 23 ____ 1,433,993,000
July 30 ____ 1,440,386,000
Aug. 6 ____ 1,426,986,000
Aug. 13 __ 1,415,122,000
MonthsJanuary _ _ _. 7,014,066,000
February_ __ 6,518,245,000
6,781,347,000
March
April
6,303,425,000
6,212,090,000
May
6.130.077.000
rune
1932
Under
1931.
1932.
1930.
1931.
1,680,289,000
1,816,307.000
1,833,500,000
1,825,959,000
1.809,049,000
1.781,583,000
1.769,683,000
1,745,978,000
1,744,039,000
1.750,070.000
1,735,673,000
1,721,783.000
1,722,587,000
1,708,228,000
1,715,404,000
1,733,476,000
1,725,209,000
1,698,389,000
1,689,034.000
1,716,858,000
1,723,383,000
1,659,578,000
1,657.084.000
1.706,843,000
1,607,800,000
1,703,762,000
1,594.124.000
1,625.659,000
1,666,807,000
1,686,467,000
1,678,327,000
1.691.750,000
1,617.145,000
Ut22,728°.
During the month from June 15 1932 to July 15 1932, 14 articles on
which monthly prices were secured increased as follows: Pork chops, 29%;
strictly fresh eggs, 10%; round steak and lard, 9%; sirloin steak, 8%;
chuck roast,7%;rib roast,6%;plate beef, 5%;sliced ham,3%;sliced bacon,
leg of lamb, and sugar, 2%;raisins, 1%,and bananas, less than 0.5 of 1%•
Twenty-one articles decreased: Cabbage, 39%; onions. 11%; canned red
salmon and potatoes, 5%; evaporated milk. 4%; oleomargarine, cornmeal and pork and beans, 3%; hens, vegetable lard substitute and oranges,
2%; fresh milk, butter, cheese, bread; cornflakes, wheat cereal,
macaroni, canned corn, canend peas, and tea, 1%. The following seven
articles showed no change in the month: Flour, rolled oats, rice, navy
beans, canned tomatoes, coffee, and prunes.
Aug. 20 1932
Financial Chronicle
b>"coim'collbBio57mCeotZecolm'ce
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4
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IDU'oploMVoUt4141,DCWWo.WOVol.Voll
1228
8,021,749.000
7,066,788,000
7.580,335.000
7,416,191.000
7.494,807,000
7,239,697,000
1,542,000,000 4.6%
1,733,810,000 5.5%
1,736.729,000 6.7%
1,717.315,000 6.7%
1,728,203,000 5.8%
1,726,161,000 5.4%
1,718,304,000 6.2%
1,699.250,000 8.0%
1.706,719,000 7.4%
1,702,570,000 8.7%
1,687,229,000 8.2%
1,683,262,000 8.6%
1.679,589,000 10.3%
1,663,291,000 11.9%
1,696,543.000 11.1%
1,709,331,000 9.8%
1,699,822,000 12.3%
1,688,434,000 11.5%
1,698,492,000 12.7%
1,704,426,000 13.1%
1.705,460,000 12.7%
-1,615,085,000 112.2%
1.689,925,000 j
1,699,227,000 11Z%
1,702,501,000 10.5%
1,723,428,000 11.9%
1,592,075,000
1,711,625.000 112.8%
1,727,225,000 13.9%
1,723,031,000 13.1%
1,724,728,000 12.4%
1,729,667,000 13.1%
1,733,110,000 13.1%
7,585.334,000
6,850,855,000
7,380.263.000
7,285,350,000
7,486,635,000
7,220.279,000
5.7%
76.1%
8.2%
12.4%
13.5%
13.3%
x Including Memorial Day. y Change computed on basis of average daily report'
Including July 4 holiday.
Note.-The monthly figures shown above are based on reports covering approxiare
mately 92% of the electric light and power industry and the weekly figures
based on about 70%.
"Annalist" Weekly Index of Wholesale Commodity
Prices Unchanged During Week Ended Aug. 16Indices of Domestic and Foreign Wholesale Prices.
Reflecting less aggressive security markets and the absence
of new constructive developments among the commodities
themselves, the "Annalist" Weekly Index of Wholesale
Commodity Prices was unchanged at 94.0 for the week ended
Aug. 16, compared with 94.0 (revised) the week previous,
and 102.2 a year ago. Continuing, the "Annalist" also says:
Higher cotton and cotton goods prices were offset by lower wheat
and flour. The farm products group index rose 0.5 points to 75.0, the
highest since March 8, and that of the textile group to 69.5 (provisional).
the highest since May 24; the food products index on the contrary at 98.0
was 0.8 points lower. The other groups were little changed.
THE "ANNALIST" WEEKLY INDEX OF WHOLESALE COMMODITY
PRICES.
(Unadjusted for seasonal variation. 1913=100.)
Aug.161932. Aug. 9 1932. Aug. 181931.
Farm products
Food products
Textile products
Fuels
Metals
Building materials
Chemicals
Miscellaneous
All commodities
87.9
114.5
90.6
121.4
101.7
114.5
96.6
84.1
74.5
98.8
"68.9
143.5
96.0
106.7
95.2
79.7
094.0
75.0
98.0
.69.5
143.5
96.1
106.6
95.2
79.7
94.0
102.2
•Provisional. a Revised.
The course of wholesale prices in other countries has failed to reflect to
any extent the advance in the United States. The Canadian index for
July at 104.0 was unchanged from June; its stability is doubtless due to the
Influence of the advance in this country. In Europe prices in July,so far as
information is as yet available, have continued downward, although
apparently at a much reduced rate. In England the relation between
home prices, world prices, and the exchange rate continues the subject of
much debate; Great Britain's departure from the gold standard seems to
have had a relatively limited effect on her general price level. In Japan,
the June index dropped 2.9 points to a new post-war low of 110.7, the effect
of her abandonment of the gold standard having been more than wiped out
by her internal economic difficulties.
DOMESTIC AND FOREIGN WHOLESALE PRICE INDICES.
(Measured in domestic currency; 1913=100.0).
•
July Per CentChange
June
May
July
Mo. Year.
1932. 1932. 1932. 1931.
United States
Canada
Great Britain
:France
Germany
Italy
Japan
88.6
92.2
104.0 104.0
97.7
98.1
404.0 408.0
z
96.2
z1111-'7
z
88.8
105.7
100.7
421.0
97.2
305.0
101.9
112.0
102.2
466.0
111.7
324.0
+4.1
9.0
-0.4
-1.0
z
z
112 R
115.6
z
-9.5
-7.1
-4.4
-13.8
z
z
Z
a Not available. x July 1914=100.0.
Indices used.-United States. Annalist; Canada, Dominion Bureau of Statistics;
Great Britain, Board of Trade; France, Statistique Generale; Germany, Federal
Statistical Office; Italy, Bach': Japan, Bank of Japan.
Volume 135
Financial Chronicle
Valuation of Construction Contracts Awarded as Compiled by F. W. Dodge Corp. Shows 65% Decline
for July.
The valuation of construction contracts awarded in the
37 States east of the Rocky Mountains in the month of
July 1932 was $157,228,600 less than in July 1931, the
figure for July of this year being only $128,768,700 against
$285,997,300 in the same month of last year, a decline of
55% as compared with a decline of 64% in June of 1932
in comparison with June of 1931. For the first seven months
of the year the decline from 1931 was $1,282,643,600.
CONSTRUCTION CONTRACTS AWARDED-37 STATES EAST
OF THE
ROCKY MOUNTAINS.
No.of
Projects.
Month of July1932-Residential building_
Non-residential building
Public works and utilities
Total construction
1931-Residential building
Non-residential building_
Public works and utilities
Total construction
First Seven Months1932-Residential building
Non-residential building
Public works and utilities
Total construction
1931-Residential building
Non-residential building
Public works and utilities
New Floor
Space (Se. Ft.)
Valuation.
5,455,600
8,678,300
265.100
$19,740,900
48,982,200
60,045,600
7,008
14,399,000
$128,768,700
5,658
2,942
2,063
15,888,600
16,373,000
1,550,100
63,892,500
104,740,700
117,364,100
10,663
33,811,700
$285,997,300
23,433
13,785
8,620
46,601,800
50,108,000
1,437,700
$182,438,800
312,014,000
301,395,600
45.838
98.147,500
$795,848,400
40,565
17,665
11,960
128,229.600
102,763,000
5,729,000
$554,639,100
693,996,300
829,856,600
Total construction
70,190
236,711,600
$2,078.492,000
NEW CONTEMPLATED WORK REPORTED-37 STATES EAST
OF THE
ROCKY MOUNTAINS.
Month of JulyResidential building
Non-residential building
Public works and utilities__
Total construction
First Seven MonthsResidential building
Non-residential building
Public works and utilities
Total construction
Maine
New ilampshife
Vermont
Massachusetts
Rhode Island
Connecticut
New England
New York
New Jersey
Pennsylvania
Valuation.
Ohio
Indiana
Illinois
Michigan
Wisconsin
East North Central
Minnesota
Iowa
Missouri
North Dakota
South Dakota
Nebraska
Kansas
West North Central_
Delaware
Maryland
Virginia
West Virginia
North Carolina
South Carolina
Georgia
Florida
1920 1925. 1926. 1927. 1928. 1929. 1930. 1931. 1932.
142
129
150
140
130
137
124
111
125
132
128
137
126
113
126
134
130
137
124
112
125
131
133
138
No. of
Projects.
Valuation.
3,381
2,361
1,794
$25.363,100
34,391,000
105,567,100
5,959
2,981
2,076
$82,840,400
92,527,000
136,517,000
7,536
$165,321,200
11,016
$311,884,400
27,852
17,526
11,072
$269,711,300
341,547,600
542,988,500
44,885
22,044
15,309
$767.167,100
1,059,452,000
1,339,554,200
56,450 $1,154,247,400
82,238
33,166,173,300
Index Compares Favorably with Indices in Other Fields.
The index of real estate activity, compiled by the
Association from
official records of number of deeds recorded in 64 typical
cities, has stood
at 54.6 for the last two months. The index number for the
various months
of 1932 as so far compiled is as follows:
January. 57.8: February. 58.8; March, 54.9; April, 54.6:
May. 54.6.
Farm Real Estate Values Show Material Decline
in
Year.
The index of the value of farm real estate on March 11932,
was 89% of the pre-war index of 100 as contrasted with 106%
on March 11931,the decline during the year being attributed
by the Bureau of Agricultural Economics, U. S. Department
of Agriculture, to continued severe declines in prices and
purchasing power of farm products. The Bureau's
advices
May 25 added:
Deciinis were drastic and general, although local
conditions determined
to a considerable extent the degree in which the various sections
country were affected. Only the New England and Pacific Statesofasthe
a
group showed higher than pre-war values on March 1
1932.whereas the
average for tbe East North Central group was 73% of pre-war on
that date;
West North Central States, 81% pre-war; Mountain States,
82%; Middle
Atlantic and South Atlantic groups,96%.and East South Central
and West
South Central States,97%.
The peak of the United States index of farm real estate values was
reached
in 1920 at 170% of pre-war. Five years later the index had declined to
127%, following which there was a less rapid decline until March
1930.
when an index of 115% on March 1 of that year was registered.
During
the year ended March 1031 the index dropped to 106% of pre-war
and the
further drop last year to 89% of pre-war was the most severe in any
one
year since 1921 when the index declined from 157% of pre-war on March
1 1921, to 139% on March 11922.
The Bureau poifits out that the declines of the last two years, although
nearly as rapid as those which followed 1920, began from a point thau
reprosented an adjustment to several years of reasonably stable prices, and
not
from a level reached as the culmination of a farm land boom. Therefore,
the Bureau says, the declines represent not so much a discounting of previous speculation, as a consequence of a decline in the general price level
to the lowest point in nearly two decades. An important condition accentuating the decline, it is explained, has been the increasing pressure on the
farm lands market occasioned by the increased difficulty of farmers in
meeting debts and tax burdens assumed or levied on a higher price level.
124
112
123
131
134
139
122
111
123
131
134
139
124
111
123
131
134
140
123
110
121
130
133
140
111
102
112
120
126
133
140
127
128
127
127
126
127
126
116
133
130
140
111
124
114
109
129
114
108
128
112
106
127
111
105
127
110
103
125
107
so
123
101
92
118
96
136
114
113
111
110
109
106
101
96
159
161
160
154
171
110
102
115
133
130
105
95
109
129
125
99
87
99
127
122
96
84
96
125
120
94
83
95
124
119
so
82
72
80
115
104
70
60
66
97
91
80
91
121
117
161
116
111
104
101
100
96
87
73
213
213
167
145
181
179
151
159
136
112
109
115
123
115
155
130
104
105
107
123
113
145
121
99
100
97
119
113
140
117
96
99
96
117
113
138
116
95
98
95
116
113
133
113
92
95
93
113
113
116
98
79
85
83
106
103
98
80
67
73
67
90
89
184
126
121
115
113 '112
109
97
81
139
166
189
154
223
230
217
178
112
131
154
120
187
138
116
172
114
130
148
116
185
128
112
223
111
126
138
110
178
113
104
183
111
124
137
109
172
110
102
176
111
123
136
108
165
110
101
174
111
123
134
105
158
104
100
172
107
120
117
98
135
90
90
166
95
106
99
81
114
73
70
141
198
148
149
137
134
132
128
116
96
Kentucky
Tennessee
Alabama
Mississippi
200
200
177
218
140
137
154
136
139
134
154
134
134
130
145
126
130
127
145
123
129
125
143
122
127
123
143
122
115
114
129
112
97
96
102
92
East South Central
09
141
139
133
130
129
128
117
97
Arkansas
Louisiana
Oklahoma
Texas
222
108
166
174
160
141
131
146
153
143
130
146
150
135
128
141
147
132
127
139
145
132
127
138
141
132
127
138
118
121
116
122
104
103
94
96
1931.
Indei of Real Estate Activity.
Under date of July 18 the National Association of Real
Estate Boards supplied the following:
As compared with the falling indices in general business
the index number for real estate activity indicates a comparatively stable demand and use, the Association points out.
Geographical Division
and State.
South Atlantic
1932.
No. of
Projects.
FARM REAL ESTATE*: ESTIMATED VALUE PER ACRE, IN TERMS OF
PRE-WAR AVERAGE VALUE, BY STATES, MARCH 1 1932, WITH
COMPARISONS (STATE AVERAGE VALUE IN 1912-1914.--100%).
Middle Atlantic
3,068
2,064
1,876
1229
The estimates for 1932 are based upon preliminary summaries of reports
made by correspondents in the Bureau's annual survey of conditions in the
farm lands market. The accompanying table gives details by States.
West South Central
177
144
144
139
137
136
136
121
97
Mpntana
Idaho
Wyoming
Colorado
New Mexico
Arizona
Utah
Nevada
126
172
176
141
144
165
167
135
75
123
100
92
108
121
130
102
72
119
95
89
106
125
129
99
70
117
94
82
108
123
128
99
71
116
95
82
108
122
127
99
72
116
96
82
109
123
127
99
72
116
93
83
110
123
126
99
70
114
95
81
109
123
122
97
58
96
77
65
89
104
98
78
Mountain
151
105
103
101
101
101
102
100
82
Washington
Oregon
California
140
130
167
113
110
164
112
107
163
111
106
162
110
106
161
110
106
160
110
107
160
108
106
158
91
88
133
Pacific
156
146
144
143
142
142
142
140
118
United States
170 127 124 119 117
*All farm lands with improvements.
Figures for 1932 preliminary, subject to correction.
116
115
106
89
Ratio
bo
--10Wholesale Credit Report
university of BuffaloIncrease Noted in
overdue to Outstanding
Accounts.
The Bureau of Business and Social Research of the University of Buffalo in its wholeslale credit report issued
Aug. 16 states that "the ratio of overdue to outstanding
accounts for 23 wholesale concerns in the Buffalo area rose to
26.3% on Aug. 1 1932." The Bureau also said that "this
represented a 27% increase over the ratio- of July 1 1932
and a 9% rise over Aug. 1 1931." The Bureau continued
as follows:
Outstanding accounts fell 8% and overdues rose 17% during the month.
In comparison with Aug. 1 of last year, outstanding and overdue accounts
declined 31% and 25%, respectively.
In the food group, a decrease of 20% was shown in outstanding accounts,
and overdue accounts rose 23%, causing the ratio of overdue to outstanding
to increase more than 50%.
Below are given (1) a comparison of Aug. 1 1932 with July 1 1932 for 23
comparable concerns and 8 food concerns and (2) the monthly increases or
decreases in outstanding accounts for comparable concerns in adjoining
months:
(1) Ratio of overdue to outstanding accounts.
23 Identical concernsJuly 1.
Aug. 1.
Outstanding accounts
20
9:6
54,72
88
%
5 $4.32
0:3
29
%
3
46
Overdue accounts
972,509
1.141,785
Ratio of overdue to outstanding
8 Food concernsOutstanding accounts
857,101
64
80..7
7 291
%
Overdue accounts
227,103
280,133
Ratio of overdue to outstanding
26.5%
(2) Volume of outstanding accounts.
Increase.
Decrease.
Aug. 1 compared with July 1
3.6%
Sept. 1 compared with Aug. 1
0.3%
Oct. 1 compared with Sept. 1
0.3%
Nov. 1 compared with Oct. 1
No change.8.7%
Dec.1 compared with Nov. 1
Jan. 1 compared with Dec. 1
3.9%
Feb. 1 compared with Jan. 1
2.8%
Mar. 1 compared with Feb. 1
1.17
Apr. 1 compared with Mar. 1
8.60
May 1 compared with Apr. 1
1.8
June 1 compared with May 1
3.9
July 1 compared with June 1
3.4
Aug. 1 compared with July 1
8.2g
Financial Chronicle
1230
Dun's Report of Failures in July.
smaller number of commercial failures was reported in
the United States for July than for any month since November 1931. This is partly a seasonal tendency-but an encouraging fact is that thee was definite improvement in
each month of the year. The number of failures for July
as reported to R. G. Dun & Co., was 2,596. This figure is
30.9% in excess of the 1,983 insolvencies in the same month of
1931 and 28.0% greater than those of July 1930. Despite
this increase, the present figure is not abnormal, as it is
only natural that a higher mortality rate *should be shown
during a period of readjustment. Comparing January which
is the highest point of the year with July, in which the
fewest number of failures was reported, a difference of 862
insolvencies appears.
The indebtedness for July, of $87,189,639 rose above the
average because of an unusual number of large failures.
This figure is $26,000,000 or 42.4% greater than the $60,997,853 of the corresponding month last year.
Monthly and quarterly failures, showing number and
liabilities, are contrasted below for the periods mentioned:
Liabilities.
Noon her.
1932.
1930.
1932.
1931.
1930.
1931.
July
2,596
1,983
2,028
$87,189,639 860,997,853 839,826,417
June
May
April
2,688
2,788
2,816
1,993
2,248
2,383
2.026
2,179
2,198
876,931,452 $51,655,648 $63,130,762
83,763.521 53,371,212 55,541,462
101,068,693 50,868,135 49,059.308
26 quarter_ _ _ 8,292
6,624
6,403 8261,763,666 $155,894,995 $167,731,532
2,951
2.732
3,458
2,604
2,583
3,316
2,347
2,262
2,759
1st quarter_._ 9,141
8.483
7,368 8275,520.622 8214.602,374 8169.357.551
March
February
January
$93,760,311 $60,386,550 856,846.015
84.900,106 59.607,612 51.326.365
96,860,205 94,608,212 61,185.171
FAILURES BY BRANCHES OF BUSINESS-JULY 1932.
Liabilities.
Number.
1932. 1931. 1930.
ManufacturersIron, steel and foundries
Machinery and tools
Woolens, carpets, .lec
Cottons and lace
Lumber, building lines. &c
Clothingand millinery
Hats, gloves and furs
Chemicals and drugs
Paints
Printing and engraving
Milling and bakers
Leather, shoes, &c
Tobacco. .kc
Stone, clay and glass
All other
Total manufacturing
TradersGeneral stores
Grocery, meat and fish
Hotels and restaurants
Tobacco, &c
Clothing and furnishing
Dry goods and carpets
Shoes and luggage
Furniture and crockery
Hardware, stoves and tools_
Chemicals and drugs
Paints
Jewelry and clocks
Books and papers
Hats, furs and gloves
All other
Total trading
Other commercial
Total United States
1932.
1931.
1930.
39
12
29
37
8
2
2
-80 63
74
39
16
10
14
13
2
38
17
50
34
17
16
8
6
19
13
226 258
$
$
231,300
977,500
11 5,04,648
34 3,031,917 1,654.875 1,442,971
17,500
310,000
1
486,453
8,500
1 3,315,166
81 5.930,050 3,491,514 2.876,235
521,500
37 1,783,645 1,438,198
312,400
274,100
12
189,616
30.600
8 2.804.417
873,200
187,800
3
172,570
240,200
682,500
20 1,269,577
496;382 1,160,869
37
344,657
524,146
10
754,890
590.900
66,000
1
68,300
43,683
348,843
215,517
9
688,341
160 11,330,654 9.579,885 5,332,995
622
425 37,228,284 20,586.117 13,368,613
119
321
95
24
300
127
65
85
56
102
18
55
31
21
371
520
66
247
100
16
201
87
49
59
45
71
15
48
19
7
292
83
278
100
25
215
90
42
75
46
65
8
24
21
11
398
1,852,534
3,618,318
4,209,143
459,389
4.464,913
2,086,343
1,003,854
2,143,722
918,346
1,076,070
296,583
1,894,190
558,055
1,021,090
9.516,349
1.151,146
2,107,907
5,922,479
171,334
3,340,676
1,662,340
1,111,800
4,089,219
515,024
990,460
113,600
589,006
163,400
44,300
6,118,364
844,500
3,694,110
1,002,000
128,900
2,335,300
3,038,914
321,500
1,554.700
729,099
788,300
103,700
468,710
371,820
103,600
6.076,416
Country's Foreign Trade in July-Imports and Exports.
The Bureau of Statistics of the Department of Commerce
at Washington on Aug. 17 issued its statement on the
foreign trade of the United States for July and the seven
months ended with July. The value of merchandise exported in July 1932 was estimated at $107,000,000, as compared with $180,772,000 in July 1931. The imports of
merchandise are provisionally computed at $79,000,000 in
July the present year, as against $174,460,000 in July the
previous year, leaving an unfavorable balance in the merchandise movement for the month of July 1932 of approximately $28,000,000. TAR year in July there was a favorable trade balance in the merchandise movement of $6,312,000. Imports for the seven months ended July 1932 have
been $826,890,000, as against $1,281,611,000 for the corresponding seven months of 1931. The merchandise exports for the seven months ended July 1932 have been
$948,048,000, against $1,496,739,000, giving a favorable
trade balance of $121,158,000 for the seven months, against
$215,128,000 in the same period a year ago.
Gold imports totaled $16,334,000 in July 1932 against
$20,512,000 in the corresponding month of the previous
year, and for the seven months ended July 1932 were $164,184,000 as against $260,453,000 in the same period a year
ago. Gold exports in July were $23,474,000, against only
$1,009,000 in July 1931. For the seven months ended July
1932 the exports of the metal foot up 3791,312,000, against
$1,798,000 in the corresponding seven months of 1931.
Silver imports for the seven months ended July 1932 have
been $12,041,000, as against $15,696,000 in the seven months
ended July 1931, and silver exports were $9,098,000 compared with $17,080,000. The following is the complete
official report:
TOTAL VALUES OF EXPORTS AND IMPORTS OF THE UNITED STATES.
(Preliminary figures for 1932 corrected to Aug. 16 1932.)
MERCHANDISE.
7 Months Ending July.
July.
Exports
Imports
Excess of exports
Excess of Imnorts
1932.
1931.
1932.
1931.
Increase(+)
Decrease(-)
1,000
Dollars.
107,000
79.000
1.000
Dollars.
180,772
174,460
1,000
Dollars.
948,048
826,890
1,000
Dollars.
1,496,739
1,281,611
1,000
Dollars.
-548,691
--454.721
28,000
6,312
121,158
215,128
EXPORTS AND IMPORTS OF MERCHANDISE, BY MONTHS.
1931.
1932.
1930.
1927.
1928.
1929.
1,000
1,000
1,000
1.000
1,000
1,000
Dollars. Dollars. Dollars. Dollars. Dollars. Dollars.
150,022 249,598 410,849 488,023 410.778 419.402
153,972 224,346 348,852 441,751 371,448 372.438
155,250 235,899 369,549 489,851 420,617 408,978
135,359 215,077 331,732 425,264 363,928 415,374
132,188 203,970 320,034 385,013 422,557 393,140
114,259 187.077 294,701 393,186 388,661 356.966
107,000 180.772 266,761 402,861 378,894 341,809
164,808 297,765 380,584 379,006 374,751
180,228 312,207 437,163 421,607 425,267
204,905 326,89
528,514 550,014 488,676
193,540 288,978 442,254 544,912 460,940
184.070 274,856 426.551 475,845 407,641
ExportsJanuary
February
March
April
May
June
July
August
September
October
November
December
7 months ending July 948,048 1,496,739 2,342,478 3,025.949 2,756,973 2,708,102
2,424,289 3,843,181 5,240,995 5,128,356 4,865,376
12 months ending Dec.
importsJanuary
February
March
April
May
June
July
August
September
October
November
December
135,520 183,148
130,978 174,946
131,189 210,202
126,522 185,706
112,276 179,694
111,405 173,455
79,000 174,460
166,679
170,384
168,708
149.480
153,773
7 months ending July
,s nr• ............... Te•
826,890 1,281,611 1,956,543 2,639,355 2,403,780 2,442,478
310,968 368,897 .337,916 356,841
281.707 369,442 351,035 310,877
300,460 383,818 380,437 378,331
307.824 410,666 345,314 375,738
284,683 400,149 353,981 346,501
250,343 353,403 317,249 354,892
220,558 352,980 317,848 319,298
218,417 389,358 346,715 368,875
226,352 351,304 319,618 342,154
247,367 391,063 355,358 355,739
203.593 338,472 326,565 344,269
208,636 309,809 339,408 331,234
0 AM RIK 2 IIM1 11Al2 d 200 2/11 A1101 Add d 1 ed
TAO
GOLD AND SILVR
7 Months Ending July.
July.
GoldExports
Imports
Excess of exports. _
Excess of imports_
SilverExports
Imports
Excess of exports_._ _
Excess of imports __
1932.
1931'
1932.
1931.
Increase(+)
Decrease(-)
1,000
Dollars.
1,000
Dollars.
1,000
Dollars.
1,000
Dollars.
1,000
Dollars.
23,474
16,334
1,009
20,512
791,312
164,184
1,798
260,453
+789.514
-96,269
627,128
7,14019,Liii
--- -
258,655
828
1,288
2,305
1,663
9,098
12,041
-iee,
642
- -- -
2.943
17,080
15,696
-7,982
-3,655
1,384
EXPORTS AND IMPORTS OF GOLD AND SILVER, BY MONTHS.
Gold.
1932.
1,790 1,322 1,481 34,918,899 28,091,055 21,571,609
184 141 122 15,042.455 12,320,681 4,886,195
2.596 1.983 2.028 87.189.639 60 997.853 39.826.417
Aug. 20 1932
EsportsJanuary
Febr uary
Mar eh
AprilI
May
June
July.
Aug tat
Sept ember
October
Nov ember
Dsce,mber
1931.
1930.
Silver.
1929.
1932.
1931.
1930.
1929.
1,090 1,000 1,000 1.000 1,000 1,000 1,000 1,000
Dollars. Dollars Dollars. Dollars. Dollars. Dollars. Dollars. Dollars.
54 8,948 1,378 1,611 3,571 5.892 8,264
107,863
128,211
14
207 1,425
942 1,638 5,331 6,595
43,909
26
290 1,635
967 2,323 5,818 7,814
110 1,594 1.617 3,249 4,646 5.752
49,509
27
628
212,229
82
467 1,865 2,099 4,978 7,485
226,117
40
26
550 1,268 1,895 3,331 5,445
23,474 1,009 41,529
807
828 2,305 3,709 6,795
39 39,332
881
- -__ 2,024 4,544 8,522
____ 28.708 11,133 1,205
__ 2,183 3,903 4,374
_ 398,604 9.266 3,805
____ 2,158 4,424 7,314
4,994 5,008 30,289
-- -872 4,102 8,678
32.651
36 72,547
____ 2,168 3,472 6,369
7mos. end.July 791,312 1.798 51.191 7,857
12 os. end.Dec.
___ 466,794 115,967 116,583
9,098 17,080 33,710 48,150
-__ 26,485 54.157 83,407
ICeportsJan ary
Feb uary
Mar eh
ApriI
May
June
July
Aug ist
Sept ember
Octo her
Nov ember
Dec mber
2,097
2,009
1,809
1,890
1,547
1,401
1.288
____
____
___
__
_
34,426
16,156
25,671
49.543
50,258
63,887
20,512
57,539
____ 49,269
60,919
94,430
89,509
34,912
37,644
19,238
19.271
16,715
20,070
16,334
12,908
60.198
55.768
65,835
23,552
13.938
21,889
19,714
13,680
35,635
40,159
32,778
48,577
26.913
26,470
24,687
24,098
30.762
35,525
19,271
18,781
21,321
7,123
8,121
2,896
1,877
1.821
2,439
2,636
2,364
1,663
2,685
2,355
2.573
2,138
3,215
4,756
3,923
4,831
3,570
3,486
2.707
3,953
3,492
3,461
3,270
2,652
2,660
8,260
4,458
6.436
3.957
4,602
5,022
4.723
7,345
4,111
5,403
5.144
4,479
7m as. end.July 164,184 260,453 254.087 217,031 12,041 15,696 27,226 37,458
12 mos. end.Dem.
____ 612.119 396,054 291.649
____ 28,664 42.761 63.940
Southwest Business Conditions During July as
Reviewed by Los Angeles Chamber of CommerceRise Noted in Employment as Compared with June.
"The celebration of the Tenth Olympiad, in Los Angeles,
has superseded many other interests and put many normal
business activities into secondary position during the later
Volume 135
Financial Chronicle
part of the month." says the Los Angeles Chamber of Commerce in its "Southwest Business Review." "The influx
.of so large a number of visitors will have a decided influence
on retail business, however, and s iould have a constructive
effect."- The Chamber also says:
Bank debits for July dropped slightly below June, and were lower than
last year at the same time; Stock Exchange transactions were also lower
than for these two comparison months. Building permits were down
considerably; postal receipts rose in value over both the previous
month
and last July.
Employment rose above June and shows indications of continue
d gains
In certain quarters.
Among the major industries motion pictures are forging ahead
with
ambitious programs that presage steady activity; apparel and
furniture
and milliner/ are all preparing for a busy fall season. Inaugurated by market
weeks which should attract many buyers.
Agricultural returns for the year are about what was anticipated:
excellent crops and good quality predominating but returns held down by low
market prices and demand. Livestock shows a strengthening of
prices.
Water commerce totals were not quite up to previous months,
due to
certain contributing factors.
Building Permits.
Continuing the downward trend, building permits for July
show a decrease from June. Comparison of the July figure with that of the
same
month of 1931 shows a decrease of 74% in value, while the number of permits for July 1932 declined only 41% from the same month of 1931, indicating that a tivity is centered in small and medium sized projects.
A comparison of the figures for the first seven months shows the
current
year to be 55% behind 1931 in value of permits.
The comparative figures are as follows:
No. of Permits. Valuation.
No. of Permits. Valuation
July 1932
1,213 $1,011.811 7 months 1932-10.632 $12,050.
499
July 1931
2,036 3.751.072 7 months 1931-15,236
26,453,834
Employment
July employment, as shown by the Chamber of Commerc
e industrial
Index. made a satisfactory gain over the low point established
during June,
and now stands at about the levels of the early spring.
Improvement is due largely to pick-ups in motion pictures,
food products,
clay products and petroleum employment. The balance of the list
showed
little change.
Compared with a year ago, all lines in the indet, except printing
and
lithographing, show a decrease; most pronounced, of course,
in iron and
steel and building products lines.
Among developments in local industry which promise improve
ment in
employment the following are of particular interest:
Plant expansions are under way for Swift & Co., Calite
Manufacturing
Co., Flynn & Collins and the Los Angeles Fertilizer Co.
New industries in Loa Angeles during the past month include
ZerolatorCold Storage Corp., Wizard Manufacturing Co.. International
Recording
Engineers, Ltd., Davis Ice Cream Co., Teagarde
n Uniform Co., Standard
Refrigeration Co. and William G. Withrow Co.
Acceptance of the completed plant cy the Chrysler
corporation points
to the early employment of several hundred people in this
important automotive concern.
•Comparative industrial employment figures
are as follows: July 1932.
58.7; June 1932. 54.6. July 1931. 71.3.
•
Sharp Drop Reported in New York State
Factory
Employment and Payrolls from June to
July by
New York State Labor Department.
New York State factory employment
and total factory
payrolls dropped sharply during the
June to July period,
according to a statement issued Aug.
12, by Industrial
Commissioner Frances Perkins. The net loss
in employment
was 5.3%, and the payroll loss 7.1%, the largest
June to
decline
July
s on record. Normally, July brings a
seasona
l
drop in employment of 1%, and a loss in total
payrolls of
1.8%. Returns from 1,546 representative New
York State
factories form the basis for this analysis.
Miss Perkins
statement also said:
1231
Marked Declines in Textiles.
Textile mills also showed rather large seasonal decreases
. Vacations
accounted for a large part of the 34% drop in employment
in silk and silk
goods. Two large up-State cotton goods concerns were
shut down in July
causing a violent drop in employment. Large seasonal
declines cccurred
also in knit goods and miscellaneous textiles. The woolens,
carpets and
felts division continued the recovery begun in June, employm
ent advancing
7%.
Food and Tobacco Group Up.
The food and tobacco group reported a 3% gain in employm
ent, due
mostly to increased activity in canneries, where the usual summer
season
is in full swing. Seasonal factors also accounted for the 2% rise in flour
food and cereals. Tobacco manufacturers reported continue
d improve •
ment in employment,and a slight rise was noted in sugar and other
groceries.
Candy factories, contrary to seasonal influences, experienced
a general
curtailment. Employment was reduced in beverage plants
and in bakeries.
The meat and dairy products industry retained about the same
number of
employees as in June.
Other Industries Show Losses.
All of the industries comprising the furs, leather and rubber goods
group,
with the exception of a seasonal advance in shoes, had
fewer workers in
July. Printing and paper goods establishments, chemical
, oil and paint
concerns, and wool manufacturing firms were less active.
The cut stone
and marble industry, due to the settlement of the wage
dispute, showed a
large increase over June. Pulp and paper plants were somewha
t busier.
New York City Employment Down.
New York City factory employment continued to decline
sharply, with
most of the layoffs again caused by wide seasonal declines
in the clothing
and millinery group. Printing and paper goods firms,
and most of the
food industries showed decreases. The metal industrie
s reported only a
small drop, with brass, copper and aluminum, machinery
and electrical
apparatus, railroad equipment and repair shops, and boat
and shipbuilding
showing improvement. A large increase took place in
shoe factory employment. The chemical industry, textile mills and wood
manufacturing
concerns reported less employment. The stone, clay and glass
group, due
to the settlement of the cut stone and marble strike, had a
large Increase
in employment.
•
Upstate Cities Join Declines.
Employment declines in the upState cities ranged from a
fraction of 1%
in Buffalo and Binghamton to approximately 14% in
Albany-SchenectadyTroy. Most of the declines were caused by curtailm
ent in metals and
textiles. All the cities, with the exception of Bingham
ton, reported
sharp drops in factory payrolls, with the decreases
ranging from 6% in
Buffalo to 17% in Albany-Schenectady-Troy. Bingham
ton payrolls were
up 1.8%, due mainly to increased earnings in the shoe industry
.
Advance in Construction Employm
ent.
Six hundred fourteen reporting contractors were
employing 7,500 more
building trades workers in July than in June. The
increase for the month
amounted to 87% for subcontractors, 60% for general
building contractors.
17% for highway contractors and 10% for other general
rise was due partly to settlement of the building tradescontractors. The
strike,
groups except highways, was accompanied by greater increases and in all
in earnings
and hours worked.
FACTORY EMPLOYMENT IN NEW YORK
STATE.
(Preliminary.)
industry.
Stone. clay and glass
Miscellaneous stone and minerals
Lime, cement and plaster
Brick, tile and pottery
Class
Metals and machinery
Silverware and jewelry
Brass, copper and aluminum
Iron and steel
Structural and architectural iron
Sheet metal and hardware
Firearms, tools and cutlery
Cooking, heating, ventilating apparatus
Machinery and electrical apparatus
Automobiles, airplanes. &c
Railroad equipment and repair shops
Boat and ship building
Instruments and appliances
The July declines brought the indexes of
Wood manufactures
factory employment and payrolls, both computed with the averages for
Saw and planing mills
Furniture and cabinet work
lows. The employment index stands at 52 7 1925-1927 as 100 to record
(preliminary) for July. against
Pianos and other musical instruments
55.6 In June and 71.9 a year ago, and the payroll
Miscellan
eous wood, Ac
index
is
at
39.6 (preliminary), as compared with 42.6 in June and
Furs, leather and rubber goods
65.5 a year ago. Including
February of this year, when employment receded
Leather
but slightly from January.
Furs and Mr goods
July marks the tenth successive monthly decline in
New York State factory
Shoes
employment and payrolls. Except for a few
'Rubberloves, bags, canvas goods
seasonal upswings, the present
decline affected almost all industries. New
u
and gutta percha
York City continued to show
Pearl, horn, bone dcc
large losses, employment dropping 5.4% and
payrolls decreasing 6.6%.
Chemicals
,
oils, paints, Ac
A comparison of average weekly earnings for New
Drugs and Industrial chemicals
York State factory
employees and cost of living figures as publishe
Paints and colors
d by the U. S. Bureau of
Labor Statistics shows that earnings have fallen
011 products
much faster than
Photographic and miscellaneous chemicals
living
costs during the period December 1931 through
June 1932. During that
Pulp
and paper
period the cost of living in New York State has
Printing and paper goods
decreased 4.7%, while per
capita weekly earnings of factory employees have been
Paper boxes and tubes
reduced
by 10.3%.
Miscellaneous Payer goods
It must be noted that decreases in average weekly earnings
are caused both
Printing and bookmaking
by wage cuts and by curtailment in working hours.
Textiles
Silk and silk goods
Curtailment in Metals Continues
Woolens, carpets, felts
The downward tendency in employment In the metal
Cotton
goods
Knit gooda, except silk
tinued throughout July, with the group as a whole showing industries cona 7.4% decline.
Other
textiles
sharpest
July
the
is
decrease
This
ever recorded by this
Clothing and millinery
branches reported some improvement over June. The group. Only two
Men's clothing
reopening
large up-State plants resulted in a large gain in cooking, heating of two
Men's furnishings
and venWomen's clothing
tilating apparatus, and boat and shipbuilding firma took
on about 100
Women's underwear
employees.
Women's headwear
Unusually Large Seasonal Losses in Clothing
Miscellaneous sewing
and Millinery.
Laundering and cleaning
The clothing and millinery group again reported unuaually
Food and tobacco
large seasonal
recessions. The 10% decline in employment In this group
Flour, teed and cereals
Is the sharpest
Canning and preserving
June to July decrease on record, and compares with a normal
seasonal drop
Sugar and other groceries
of about 2t %• The greatest percentage declines were in women's
Meat and dairy products
clothing
women's underwear, miscellaneous sewing, and women's
Bakery products
headwear, all of
Candy
which include July in their dull seasons. Seasonal influences also
accounted
Beverages
for the mowing up in the men's furnishings and the
laundering and cleaning
Tobacco
industries.Men's clothing shops, which had failed
to show the exnected
Water, light and power
seasonal activity in Juno, were somewhat busier In July due
to orders for
Total
the fall and waiter
•No change.
Percentage Change
June to July 1932.
Total State.
-12.5
+25.9
-4.3
-21.6
-34.1
-7.4
-5.7
-4.6
-4.0
-2.1
-5.4
-14.8
+38.0
-3.1
-2.5
-18.0
+6.3
-19.3
-7.6
-4.5
-3.9
-20.1
-9.6
+0.4
-19.8
-19.4
+4.1
-2.2
-1.0
-11.9
-3.0
-3.0
-7.7
-0.9
-3.8
+1.6 ,
-3.0
-2.7
-4.2
-2.8
-12.1
-33.9
+7.4
-47.2
-12.2
-9.4
-9.8
+3.3
-8.8
-24.9
-21.9
-14.4
-18.4
-1.4
+3.4
+2.2
+70.4
+0.8
-0.4
-1.3
-21.8
-4.8
+3.1
-1.7
-5.3
N. Y. City.
+48.2
+835.3
-9.3
+2.7
-11.1
-1.1
-8.8
+4.1
-2.9
-1.8
-18.2
+0.8
-2.3
+5.4
+7.1
-14.2
-7.9
-3.0
+0.6
-34.8
-4.6
+6.1
-19.4
+30.4
+2.8
-10.0
-5.7
-4.7
-9.9
-8.5
+1.3
-24.4
-3.0
-3.6
-4.7
-1.2
-3.9
-22.5
-36.8
-7.3
-17.8
-9.5
-14.4
+0.7
-4.2
-24.4
-24.3
-14.4
-21.5
-1.3
-3.0
+3.6
+2.2
+0.2
-1.7
-29.2
-0-5
-0.8
-1.8
-5.4
Hogs at Chicago 5 to 10 Cents Higher.
From the "Wall Street Journal" of Aug. 19 we take the
following from Chicago:
Hogs advanced 5 to 10 cents here to-day in a fairly active market, which
received 14,000 head, including 6,000 direct. Top price was $4.90 a cwt.
on 180-220-pound hogs, which ranged down to $4.80. Cattle were steady,
with no choice steers or yearlings offered. Sheep were steady to strong.
With hogs selling under $5, as has been the case during the past week or
two, the packers have experienced a fair improvement in profit margins.
Meat prices are holding steady, especially in the packed lines, although
fresh pork varies rather widely with changing weather and market supplies.
51,102.000
161,000
74.000
165.000
9,576,000
4,232.000
53,205,000
166,000
110.000
690,000
14.187,000
7,282,000
34
97
67
24
67
58
000
(1(1
et m lin nnn
595 11411
-10.3
-14.6
-6.7
-17.8
-22.7
-0.9
-44.0 -6.7
-54.2 -12.9
-53.9 -9.3
--58.4 -11.8
-55.8 -14.8
-59.5 -8.0
42.7 -7.2 -31.9 -1.5
36.5 +8.6 +0.3
19.3 -9.0 -49.5 -5.5
24.0 -15.5 -55.0 -13.9
36.5 -17.2 -51.8 -19.5
+1.4 -58.0 -2.0
14.1
31.2 -8.0 -39.4 -13.8
29.3 -3.9 -40.8 -3.6
p21.8 -18.4 -53.9 -17.3
19.5 -35.0 -28.6 -30.5
24.0 -21.6 -22.6 -24.2
11.4 -9.5 -28.7 -8.0
16.8 -43.1 -73.2 -59.1
72.8 +10.8 +42.2 +13.4
38.2 -13.6 -41.3 +0.7
29.4 -6.5 -46.9 +4.1
23.7 -5.2 -56.6 -3.0
39.6 -9.2 --42.4 --3.3
48.7 -7.8 -30.9 -14.6
18.5 -23.6 -62.5 +3.6
--36.7 +5.6 -24.7
51.6 -17.7 -30.9 +16.5
41.5 -20.5 -40.9 -20.3
32.0 -31.5 -48.6 -7.1
32.2 -63.7 -53.7 -18.1
50.0 -9.3 -57.8 -19.8
75.8 -2.1 -19.4 -2.0
80.5 -3.5 -17.6 -0.8
56.6 -14.0 -29.6 -18-3
+0.9
82.3 -1.0 -31.9
71.4 -5.1 -9.7 --5.4
76.2 +6.6 -14.3 +7.4
20.8 -14.0 -46.1 -6.7
19.3 -12.7 -51.9 -7.0
18.4 -12.0 -54.0 -13.6
31.0 -18.4 -14.4 +12.5
26.4 -6.7 -46.0 --6•1
17.0 -22.0 -43.3 -5.0
28.6 +7.5 -49.5 +1.0
33.2 -16.2 -35.3 -25.1
66.8 +5.7 -20.1 +238
38.0 -11.6 -35.8 -13.9
18.1 -7.7 -57.0
__39.3 -20.3 -52.8
71.8 -8.5 -10.1 -11.9
122.8 +14.3 -3.8 +44.3
67.3 +0.4 -35.4 +11.1
54.7 -9.0 -41.2 +5.2
54.7 +3.5.4 -25.9 +33.2
52.3 +20.2 -43.0 +301
91.0 -8.2 -17.9 -7.!
65.0 +0.2 -21.9 -08
+1.1
49.4 +0.8 -25.
43.5 -15.7 -38. -17.4
-0.1
4-5 A -10
745
FACTORY EMPLOYMENT AND WAGE PAYMENTS IN DELAWARE.
Prepared by the Department of Research and Statistics of the Federal Reserve
Bank of Philadelphia.
.
Factory Employment in Pennsylvania Declined 5%
From June to July-Federal Reserve Bank of
Philadelphia Reports Drop of 10% in Wage Payments-Employment and Payrolls in Delaware
Manufacturing Industries Also Decreased.
Factory employment in Pennsylvania showed a decline
of 5% and wage payments 10% from June to July, according
to reports to the Philadelphia Federal Reserve Bank from
representative manufacturing industries employing in July
about 211,000 workers, whose weekly payroll amounted to
$2,936,000. This reduction was unusually large when
compared with the average decline for the same period in
the past 10 years. Under date of Aug. 15 the Bank also said:
Factory operations also declined further. Reports from factories representing about two-thirds of all reporting concerns showed a reduction of 7%
with June.
in employee-hours actually worked during July as compared
year. The
This is a somewhat smaller drop than in the same period last
group covering the leather Industry reported gains, while the metal group
although
showed losses in working hours. Returns from other groups varied,
most individual Industries registered a further curtailment of operating
32.1
22.3
14.0
17.5
21.5
335
p Preliminary.
• Flkures from 814 companies representing 51 industries
b Figure from 575 companies representing 47 industries.
Industries
schedules.
I -71777777TTITT I TT II T77+7777 1 7T711-177
% July 1932
of July 1931.
III
July 1931.
I
July 1932.
-. ,
,
ESTIMATED VALUE OF IMPORTANT FARM PRODUCTS MARKETED
IN THE NINTH FEDERAL RESERVE DISTRICT.
4
Grain trade reports emphasize that all available farm storage facilities
will be utilized this fall and that movement to- market will be unusually
slow. Much more grain than usual is being stacked in the Dakotas. threshing being deferred until prices justify the additional expense. Many
farmers are planning to feed as much grain as possible in bundles this year.
While this plan will result in some additional wastage, it is doubtful whether
such wastage will be as costly as threshing. Hogs and poultry will reduce
the wastage from bundle feeding of grain to a minimum.
While no cotton is produced in our district, the cotton report issued
by the United States Department of Agriculture contained data of much
Interest to all users of cotton and cotton goods. The Aug. 1 cotton forecasted production was one-third smaller than last year. the cotton acreage
was one-tenth less, the yield per acre was one-quarter smaller, and boll
weevil infestation was worse than in any year since 1928. The report
stated that the crop appears to be the smallest since 1923.
ITI I IIIIITI
be materially lessened.
I
• July 1-July 23, inclusive.
Decreases also occurred between July 1931 and July 1932 in electric power
consumption, flour shipments, grain and livestock marketings and department store sales.
Grain prices were depressed during the month by tho crop forecasts of
July 1, but prices of nearly all livestock and dairy products were higher than
in June. Butcher steers were 3% higher than in July last year, but all
other livestock prices were lower.
Complete threshing ret ms are not yet a allable, but the United States
Department of Agriculture Aug. 1 report forecasts small grain yields much
below indications of a month ago. Corn, potatoes and flax are suffering
from insufficient rainfall and grasshoppers, with the result that yields will
"01
N.W.
-31
-48
-26
+81
--51
-42
-42
-94
cl'.R^'-u?
,Ncooc;.itomt---Owc>moo6mei6rd..m,464-,ia-Moc;,,in 46eicin,r6opme;6c5m4NMCIM-.-N"..-.
-26
-16
-15
-72
+20
-40
-24
-87
1 TI
June.
VITITTIIITIIITIIITT 'VITTITII++11+71T+1+111+-4-+T-
Bank debits (all cities)
Freight carloadings•
Country check clearings
Building permits (valuation)_ _
Building contracts (valuation)
Farmers' cash Income
Linseed products shipments
Iron ore shipments
July.
All manufg. Industries-57.1
Metal products
48.7
Blast furnaces......
36.7
Steel works&rolling mill
43.0
Iron and steel forgings.
44.8
Structural iron work_
72.0
Steam and hot water
heating apparatus_
74.1
Stoves and furnaces__.
59.0
49.4
Foundries
Machinery and parts_
51.8
Electrical apparatus._.
66.7
Engines and pumps.__
31.1
Hardware and tools__.
57.5
Brass& bronze products
52.7
Transportation equipment p43.1
Automehilen
51.2
Auto bodies & parts."
46.6
Locomotives and cars_
20.9
Railroad repair shops._
58.5
51.2
Shipbuilding
Textile products......_
63.4
Cotton goods
48.0
Woolens and worsteds.
43.4
Silk goods
61.5
Textile dyeing & finish.
66.3
Carpets and rugs34.8
Hats
56.1
Hosiery
838
Knit goods, other
74.7
Men's clothing
67.1
Women's clothing_ _ ....
66.7
Shirts & furnishings80.8
Foods and tobacco
93.1
Bread&bakery products
97.3
Confectionery75.1
Ice cream
98.3
Meatiaacking......_
92.8
Clgaffland tobacco_ _ _.
94.5
4.5.1
Stone,clay&glass products
Brick, tile dr pottery..
47.3
42.4
Cement
Glass
48.2
43.2
Lumber products
25.9
Lumber&planing mills.
47.7
Furniture
Wooden boxes
55.6
83.1
Chemlral products__ _
Chemicals and drugs_
51.1
Coke
58.2
64.6
Explosives
87.9
Paints and varnishes
Petroleum refining.. _
131.3
Leather& rubber products
78.7
Leather tanning
81.3
Shoes
82.6
Leather products, other
63.1
Rubber tires and goods
76.9
Paper and printing
81.9
l'aper and wood pulp
72.4
Paper boxes and bags_
60.3
RR 9
Printine it, nohllahlna
TT-7117
Percentage Changefrom Last Year.
FACTORY EMPLOYMENT, WAGE PAYMENTS AND EMPLOYEE-HOURS
IN PENNSYLVANIA.
Prepared by the Federal Reserve Bank of Philadelphia In co-operation with the
Pennsylvania Department of Labor and Industry and the United States Bureauof Labor Statistics.
Ern- ,
ployee
payroll*.•
Employment•
Ifoursb
(Index numbers are perP. C.
July
Per Cent
centages of 1923-1925
Per Cent
July
Change From Change
average which is taken as
1932
Change From
1932
In_
----- June
100)
Infrom
July
Sexes. June
July
Sexes. June
1931. 1931. July.
1932. 1931.
"q""'"":r."=:=.7ing;=':==2,12:=,
The decreases, however, between July 1932 and 1931 were not as great
as between June 1932 and June 1931. This was partly due to heavy
decreases between June and July a year ago, but was also partly due to
smaller decreases or some actual increases between June and July this
year. The table below shows the improvement recorded In July:
Seven industrial areas showed increases in the number of workers, thelargest gains occurring in the Altoona, IIarrisburg, York and Wilmington
territories. The remaining 10 areas reported decreases, most pronounced
of which took place in the Lancaster, Hazleton-Pottsville and ReadingLebanon sections. With respect to the amount of wages paid, Altoona.
Sunbury, Wilkes-Barre and Wilmington alone reported gains, -while the
other 13 divisions registered smaller payrolls in July than June.
The Pennsylvania employment index number in July reached a new low
level of 57, a decline of 21% from a year ago. Similarly, the payroll index
dropped to 32. which is 44% below that of a year ago and is less than onethird of the 1923-25 average. Groups comprising metal and textile products.
transportation equipment and some of the building materials chiefly continued to depress the averages.
Delaware manufacturing industries reported a decline of 2% in employment and 5% in payrolls from June to July. The number of hours worked
also declined less than 6% during the month.
1
Business and Agricultural Conditions in Minneapolis
Federal Reserve District-Volume of Business
Reported Considerably Smaller During July This
Year Than July Last Year.
In its preliminary summary of agricultural and business
conditions, the Federal Reserve Bank of Minneapolis states
that "the volume of business in the Ninth (Minneapolis)
District in July was considerably smaller than in July last
year, according to the evidence of bank debits, freight carloadings, country check clearings and other indexes." The
summary issued Aug. 15 also says:
Bread wheat
Durum wheat
Rye
Flax
Dairy products
Hogs
Aug. 20 1932
Financial Chronicle
1232
Number
Of
Plants.
Per Cent Change June
Compared lath June 1932.
Employ-
Payrolls-
ment
All manufacturing industries
Metal products
Transportation equipment
Textile products
Foods and tobacco
Stone, clay and glass products
Lumber products
Chemical products
Leather and rubber products
Paper and printing
57
12
5
3
4
5
5
8
7
-2.1
-4.0
-1.3
+0.8
+2.8
+12
-4.0
-16.9
+0.0
-2.3
-5.3
-5.2
-2.3
-0.8
-6.7
+11.4
-17.5
-28.8
-2.0
+0.7
Average
IVeekly
Wages.
-3.3
-1.3
-1.0
-1.6
-9.2
+10.2
-14.1
-14.3
-2.0
+3.1
FACTORY EMPLOYEE-HOURS IN DELAWARE.
Industries
All manufacturing industries
Metal products
Transportation equipment
Textile products
Foods and tobacco
Stone. clay and glass products
Lumber products
Chemical products
Leather and rubber products
Paper and printing
Number
Of
Plants.
51
9
5
3
7
4
5
5
7
4,
Per Cent Change June
Compared with June 1932.
Employment
Payrolls-
Emplope
flours
-2.0
-4.0
-1.3
+08
+2.8
+1.2
-4.0
-169
+02
-2.4
--5 6
--7.4
--2.3
--0.8
-2.6
-5.3
+1.1
-3.0
-1.8
+122
-14.9
-28.6
+1.4
+4.5
+11.4
-17.5
-28 8
-1.9
+1.0
Volume 135
Financial Chronicle
FACTOftY EMPLOYMENT AND WAGE PAYMENTS BY CITY
AREAS
Employment
(City areas are not restricted to corporate limits of cities given here)
Allentown,-Bethlehem.-Easton__
Altoona
Erie
Ilarrisburg_--Hazleton.-Pottsville
Johnstown
Lancaster
New Castle
Philadelphia
Pittsburgh
Reading,-Lebanon
Scranton
Sunbury
Wilkes-Barre
Williamsport
Wilmington
York
July
Indexes
Per Cent change
compared with
June
1932.
July
1931.
49.3
-3.1 -18.0
53.0
+9.5 -29.2
51.3
-5.7 -37.3
58.5
+3.2 -13.2
U.S -14.4 -22.0
39.1
-1.8 -14.8
47.3 -19.6 -37.7
39.2
+0.3 -11.7
61.8
-5.6 -20.3
50.9
-5.7 -20.7
58.8 -13.5 -25.9
45.2
-4.2 -28.9
53.3
+1.9 -17.9
80.1
+2.0 -10.7
55.4
-6.7 -20.4
98.2 +13.7 +7.7
79.0
+2.7 -4.6
Payrolls
Per Cent change
July compared with
Indezes June
July
1932. 1931.
26.8 -13.3 -44.1
31.0
+3.7 -46.9
31.9 -10.9 -53.6
37.9
-5.5 -26.3
35.7
-5.8 -43.1
15.7 -12.8 -60.2
24.6 -25.5 -60.3
15.3
-8.9 -52.5
44.4
-9.6 -34.9
20.8 -17.8 -51.5
25.3 -20.9 -56.3
33.4 -11.4 -40.6
31.1
+2.0 -35.1
60.6
+8.1 -21.9
33.7 -13.1 -39.7
84.1 +19.8 +4.9
51.6
-4.4 -24.6
Lumber Stocks Still Excessive.
Continued low production of lumber and the fact that
many mills which are not running are accepting orders, accounts largely for the seemingly favorable excess of lumber
orders over production during the week ended Aug. 13.
The figures show orders 25% above production, as given in
telegraphic reports to the National Lumber Manufacturers'
Association from regional manufacturers' associations covering the operations of 638 leading softwood and hardwood
mills. These mills produced 109,299,000 feet and entered
orders amounting to 136,144,000 feet. Shipments
were
125,634,000 feet, or 15% above production. The
Associafurther
reports as follows:
tion
The excess of orders over production, which has long
characterized the
lumber situation, while apparently showing improved
demand, actually
only reflects some reduction of stocks. Some reporting mills are
straining themselves to the limit of curtailment of production In order
to reduce
inventories. Some mills are not cutting. Stocks are
still out of line
with demand, even though there has been a substantial
reduction In the
past 18 months. In the recent report of the lumber survey
committee to
the United States Timber Conservation Board, it is pointed out
that although lumber stocks have been reduced more than four
billion feet since
the peak in 1930, lumber consumption has declined even more
and a further
reduction of 3,1 million feet is recommended. It is
further pointed out
that the lumber industry is slowly but surely getting its house
in order and
with a reasonable increase in demand the lumber
stock situation generally
will not be abnormal.
Lumber orders reported for the week ended
Aug. 13 1932 by 472 softwood mills totaled 125,940,000 feet, or 23%
above the production of the
same mills. Shipments as reported for the same
week were 116.111,000
feet, or 13% above production. Production
was 102.601,000 feet.
Reports from 183 hardwood mills give new
business as 10,204,000 feet,
or 52% above production. Shipments as reported
for the same week were
9,523,000feet, or 42% above production.
Production was 6,698,000 feet.
Unfilled Orders.
Reports from 411 softwood mills give unfilled
orders of 333,616,000 feet
on Aug. 13 1932, or the equivalent of
nine days' production. This is
based upon production of latest calendar year-3
00-day year-and may be
compared with unfilled orders of 491 softwood
mills on Aug. 15 1931 of
598.603,000 feet, the equivalent of 13 days'
production.
The 384 identical softwood mills report
unfilled orders as 330.021.000
feet on Aug. 13 1932, or the equivalent of nine days'
average production,
as compared with 527,506,000 feet. or the equivalent
of 14 days' average
production, on similar date a year ago. Last
week's production of 433
identical softwood mills was 97,613,000 feet
and a year ago it was 178,509,000 feet; shipments were respectively 112.477,000
feet and 189.400.000;
and orders received 122.043,000 feet and
177,638,000. In the case of
hardwoods, 171 identical mills reported production
last week and a year
ago 6,164,000 feet and 11,133,000; shipments,
9,198,000 feet and 16,170,000; and orders, 9.730,000 feet and 14,837,000.
West Coast Movement.
The West Coast Lumbermen's Association wired
from Seattle the folowing new business, shipments and unfilled
orders for 216 mills reporting
for the week ended Aug. 13:
NEW BUSINESS.
Feet.
UNSHIPPED ORDERS.
SHIPMENTS.
Fed.
Fed.
Domestic cargo
Coastwkse
and
22.075,000 delivery
69,726.000 Inter-coastal 19,272,000
13,020.000 Foreign
51,987,000 Export
11.650,000
19,222,000 Rail
40,307,000 Rail
19.856.000
6.333,000
Local
6,333.000
Total
60,650,000 Total
162,020,000 Total
57,111,000
Production for the week was 49,382.000 feet.
Domestic cargo
delivery -___
Export
Rail
Local
Southern Pine.
The Southern Pine Association reported from New
Orleans that for
reporting,
114 mills
shipments were 31% above production
and orders
54% above production and 18% above shipments. New
business taken
during the week amounted to 30,138,000 feet (previous
week 20,659,000
at 111 mills); shipments, 25,295.000 feet (previous week
and production 19.566,000 feet (previous week 19,213.000) 18,196.000);
.
hand at the end of the week at 104 mills were 53,319.000 feet. Orders on
identical mills reported a decrease in production of 23% and in The 104
new business a decrease of 5% as compared with the same week a year
ago.
IVestern Pine.
The Western Pine Association reported from Portland, Ore.,
that for
118 mills reporting shipments were 2% below
production
orders 4%
above production and 5% above shipments. New businessand
taken during
the week amounted to 33,562,000 feet (previous week 29.068.000
at 117
mills); shipments, 31,849.000 feet (previous week 31.629.000)
; and
duction 32,406.000 feet (previous week 35.721,000). Orders on hand proat the
end of the week at 118 mills were 123.896,000 feet. The 105
identical
mills reported a decrease in production of 46% and In new
business a decrease of 36% as compared with the same week a year ago.
1233
Northern Pine.
The Northern Pine Manufacturers of Minneapolis, Minn., reported
production from seven mills as 905.000 feet, shipments 941,000 feet
and
new business 1,045,000 feet. The same number of mills reported
production 62% less and orders 63% less than for the corresponding week a year
ago.
Northern Hemlock.
The Northern Hemlock az Hardwood Manufacturers' Association of
Oshkosh, Wis., reported production from 17 mills as 342,000 feet, shipments 615,000 feet and orders 545,000 feet. The 16 identical mills gave
production 81% below and orders 35% below figures for the equivalent
period in 1931.
Hardwood Reports.
The Hardwood Manufacturers' Institute of Memphis, Tenn., reported
production from 166 mills as 6,210.000 feet, shipments 8,733.000 feet and
new business 9,263,000 feet. The 155 identical mills showed production
43% less and orders 33% less than for the week lastoyear.
The Northern Hemlock & Hardwood Manufacturers' Association of
Oshkosh, Wis., reported production from 17 mills as 488,000 feet, shipments 790,000 feet and orders 941,000 feet. The 16 identical mills reported production 62% less and orders 43% less than for the week last year.
1931 Lumber Production Lowest in 50 Years.
The Census Bureau report of 691 identical sawmills
reporting lumber production for 1931 and 1930 indicates
total lumber production in the United States last year of
approximately 163/i billion feet, compared with 26 billion
feet in 1930 and nearly 37 billion feet in 1929, states the
National Lumber Manufacturers Association, which adds:
The 1930 reports of 691 mills (mostly the larger mills) show 58% of the
total cut of all mills that year. The 1931 reports show 33.5% decline as
compared with 1930. On this basis, the 1931 production would be
17.- .
367.000,000 feet, but the Census Bureau states that it is likely that the
per cent of decrease in the total production of the country in 1931 was
larger than shown by the 691 reporting mills, since a larger proportion of
the small mills than of the large ones were Idle in 1931. In 1930 the
production of small mills (those cutting less than five billion feet each)
was about 25% of the total cut.
The Federal Reserve Board some months ago estimated lumber production in 1930 as 16.400,000.000 feet, which assuming a larger decline
in the aggregate output of the small mills than of the large ones, would
be an approximately accurate estimate in the light of the recent identical
mill report.
The decline of 33.5% which the Census Bureau shows in the production
of the 691 mills is within less than 1% of the percentage of decline which
the National Lumber Trade Barometer, published by the National Lumber
Manufacturers Association, showed for 1931 as compared with 1930.
On the basis of the first six months reports for 1932. and the percentage
of decrease of the National Lumber Trade Barometer's figures as compared with the first six months of 1930. the 1932 production of the United
States will be less than 10 billion feet, assuming some further curtailment
in the small mill cut over that of the large mills.
In 1889, the lumber production of the United States is given by the
Census Bureau as 18 billion feet: in 1879, as 12,755.000,000 feet. In no
intervening years from 1889 on has it fallen below 20 billion feet.
Following are the identical mill reports lust issued by the Census Bureau:
Reston.
Northeastern States
Central States
Southern States
North Carolina Pine States
Lake Statla
North Pacific States
South Pacific States
North Rocky Mountain States
South Rocky Mountain States
Total for United States
No.
of
MlSZt
11
37
245
48
56
224
37
21
12
Quantity (Feet, B. M.).
1931.
1930.
58.087,000
96.945,000
266.301.000
394.371.000
2.601.801.000 4,264.532.000
322.450.000
453.921.000
533.310.000
913.054.000
4,811.645.000 6.776.319.000
865,221,000 1.264.010.000
470,357.000
742.975.000
128,972.000
228,744,000
Per Cent
of
Decrease.
-40.1
-32.5
-39.0
-29.0
-41.6
-29.0
-31.5
-38.7
-43.8
691 10.058.144.000 15.134.871,000 -33.5
Consumption of Crude Rubber Declined During JulyImports Also Lower.
Consumption of crude rubber by manufacturers in the
United States for the month of July amounted to 28,272
long tons as compared with 39,116 long tons for June 1932,
and represents a decrease of 27.7%, according to statistics
released by the Rubber Manufacturers Association. Imports
of crude rubber for the month of July amounted to 31,078
long tons, a decrease of 24.9% below June 1932, and 24%
below July a year ago.
The Association estimates total domestic stocks of crude
rubber on hand July 31 at 346,335 long tons, which compares with June 30 stocks of 345,702. July stocks show
practically no percentage change as'compared with June of
this year, but were 47.5% above the stocks of July 31 1931.
The participants in the statistical compilation report 37,894
long tons of crude rubber afloat for'the United States ports
on July 31. This compares with 43,079 long tons afloat on
June 30 1932, and 50,155 long tons afloat on July 31 1931.
Shipments of Pneumatic Casings and Inner Tubes in
June Highest on Record-Production Exceeds
That of Preceding Month But Is Slightly Below
Figures for the Corresponding Period Last YearInventories Reach Low Point for All Time.
Shipments of pneumatic casings for the month of June
1932 were the highest on record amounting to 10,366,640,
an increase of 143.5% over May this year, and were 86.1%
above June 1931, according to statistics estimated to repro-
Financial Chronicle
1234
-sent 100% of the industry, as released by the the Rubber
Manufacturers Association, Inc. This record was due to
the increased demand for automobile tires during the first
20 days of June 1932 in order to escape the Federal sales
tax before it became effective.
Production of pneumatic casings for June were estimated
on the same basis to be 5,643,329, an increase of 47.7% over
May this year but were less than 1% below June 1931.
Pneumatic casings in the hands of manufacturers June 1932
also reached a low point for all time, amounting to 4,625,021
units, a decrease of 50.7% under May 31 and 55.7% below
June 30 1931.
The actual figures are as follows:
PRODUCTION AND SHIPMENTS OF PNEUMATIC CASINGS.
[From figures estimated to represent 00% of the Indus ry.]
Shipments.
4,625,021
9,378,691
10,447,210
5,643,329
3,820,063
5.872,483
10,366,840
4,258,116
5,571,886
June, 1932
May, 1932
June, 1931
Inventory.
Produaion.
The Association, in its bulletin dated Aug. 16 1932, gave
the following data:
PRODUCTION AND SHIPMENTS OF PNEUMATIC CASINGS AND INNER
TUBES (BY MONTHS).
[From figures estimated to represent 80% of the Industry.)
Inner Tubes.
Pneumatic Casings.
1932January
February
March
April
May
June
Innentory.
Output.
Shiprnents.
6,329,417
7,337.796
7,902,258
7.876.656
7,502,953
3.700.017
2,769.988
3.098,976
2,936,872
2.813,489
3.058.050
4,514,663
2.602.469
2,042,789
2,363,323
2,958,014
3.406.493
8,293,312
1931January
February
March
April
May
June
July
August
September
October
November
December
7,165.846
7,628,520
8,011,592
8.025.135
8,249,856
8,357.768
7,935,565
7,117.037
6.526.762
6,640,062
6,335,227
6,219.776
2,939,702
3.188.274
3,730,061
3,955,491
4,543,003
4,537,970
3,941,187
3,124.746
2,537,575
2.379,004
2,000,630
2.114,577
2,995.479
2.721,347
3.297.225
3.945.525
4,332,137
4.457.509
4,369.526
3.967.987
3.145,488
2,281,322
2,309,971
2,225,036
9,539,353
9,928,238
10,010,173
10,461,208
10,745,389
10.621.634
9.449,318
8.878.184
7,849,411
7,842,150
7,765.788
7.202,750
3,588,882
3,644,606
3.890.981
4,518,034
4,573.895
4,097,808
3,193,057
3.332,489
2,692,355
2.865,933
2,123.089
2.251,269
2,718.508
3,056,988
2,801,602
2,579,768
2,727,462
4,222,816
2,803,369
2.182.405
2.148,899
2,708,186
3,093.593
7,394,118
18,107,144 20,330,570
7,551,503
9.936,773
8,379,974
8,330,155
8.438,799
8.403,401
7.671.801
7,019,217
6,476,191
6,658,913
6,495,708
6,337,570
2,898,405
3,132.770
3,559,644
3,693,222
4,329,731
4,288,487
3,964,174
3,548.335
2,759,431
2,461,578
1,954,915
2,077,704
3,249,734
2.720,135
3,031,279
3,708,949
4,224,594
4.317.543
4,684,964
4,240,403
3,320.103
2,250,494
2,075,718
2,213.261
38,666,376 40,017.175
38,992,220 40,048,552
Total
1930January
February
March
April
May
June
July
August
September__ _ _
October
November
December
'Total
6,175,055
7,007,567
7,558,177
7,552,674
7,130.625
3.943,246
19,188,038 21,665,899
Total
Shipmeals.
Output.
'nomtory.
3,525,404 10.183.267
3,356,104 10.428,988
3.773.865 10,543.026
4,071,822 11.027.711
4,173,177 11,081.523
4,234,994 10,889.444
4,357.836 9,325.602
4,139,900 8,589,304
3,524,141 8,052,121
2,799,440 8,413,578
2,267,465 8,250,432
2,688,960 7,999,477
3,685,410
3,707,068
3,952.921
4,408,030
4,428.367
3,959,972
3,151,107
3,836.880
3,053.424
3,161.048
2,143,609
2,448,195
3,885,717
3,469,919
3,781,789
3.878.697
4.058,847
4.212,082
4,684,182
4,609,856
3,632,458
2,777,965
2,230,654
2,729,973
41,936,029 43,952,139
40.772,378 42,913,108
CONSUMPTION OF COTTON FABRICS AND CRUDE RUBBER IN THE
PRODUCTION OF CASINGS. TUBES, SOLIDS AND CUSION TIRES
AND OUTPUT OF PASSENGER CARS AND TRUCKS.
x Production.
Consumpticm.
Cotton
Fabrics
(80%)
Calendar years:
1928
1927
1928
1929
1930
1931
First 8 months of:
1931
I
P 1932
Month of June 1932
(Pounds)
185.963,182
177,979.818
222.243,398
208.824.853
158.812.462
151,143,715
Crude
Rubber
(80%)
Passenger
Trucks
Cars
(100%) (100%)
Gasoline
(100%)
(Gallons)
(Pounds)
518,043.062 10,708.068.000
515.994.728 12,512.976.000
600.413,401 13,633.452.000
598,994,708 14.748.552.000
476.755,707 16.200.894.000
456,815.428 16,941.750.000
89.119.569 264.534.617
76,575.886 242.981.151
17.480.486 57.358,548
3,929.535
3.093,428
4.024,590
4,811.107
2.939,791
2,036.567
535,008
486.952
576.540
810.549
589.271
435,784
8.042,286 1,366.062 268.508
764.790 146.302
7,645.890
166.646 23,558
1.627.920
WHOLESALE PRICES OF COMMODITIES.
Average Prices.
CommodityJune
1932.
All commodities
Crude rubber (cts, per lb.)
Smoked sheets (eta. per lb.). _
Latex crepe (eta, per lb.)
Tires (6 per unit)
Balloon (3 per unit)
Cord (1 per unit)
Truck and bum (3 per unit)
Tubes, inner (6 per unit)
May
1932.
June
1931.
Index Numbers
June
1932.
63.9
5.8
.064 5.6
.032
.027
.066 7.3
.043
.036
39.6
8.48
9.59 39.1
8.61
5.28 47.5
4.46
4 52
24.88 24.29 31.12 40.6
2.43 34.7
1.96
1.98
May
1932.
June
1931.
64.4
6.7
6.5
8.6
39.2
38.5
46.9
39.7
34.7
72.1
13.3
13.2
13.4
46.0
43.6
55.5
50.8
43.1
Farmers. Shown as Leading Motor N ehicle UsersAutomobiles and Trucks on Farms Number 5,035,060.
Farmers are revealed as the country's largest single
occupational class of motor vehicle owners in "Facts and
Figures of the Automobile Industry," the annual statistical
summary published recently by the National Automobile
Chamber of Comm me. Quoting statistics of the National
Farm Census, the Chamber on Aug. 13 pointed out that there
are more motor vehicles on farms than telephones and
radios combined. The Chamber also says:
Aug. 20 1932
The census disclosed that there are 4,134.675 passenger cars and 900,385
trucks owned on farms, whereas there are only 2,139,194 farms equipped
with telephones. The report on farm ownership of radios is incomplete.
but figures from 27 States already indicate that they will not equal the
number of telephones owned on farms.
In some agricultural States, more than half of all the trucks registered
are owned on farms. In North and South Dakota 65% of all trucks are In
the farm-owned classification.
Increase in Lake Rates on Grain by Canadian LinesRate War Reported Ended.
Canadian Press advices from Montreal, Aug. 18, said:
Canadian rates for carrying grain by water from the head of the Great
Lakes to Montreal were increased to-day to 5;.1 cents a bushel. Some
companies have been accepting 3;4 cents, which is branded as a "starvation"
figure by the trade generally.
Shipping companies recently formed a co-operative association in an
attempt to stabilize rates and other conditions in the water carriage business. An advance to 4h cents a bushel was made and a further half cent
has now been added, with the possibility, it Is believed, of still another
increase to sq cents soon. One reason for the advance, the Montreal
"Gazette" will say to-morrow, is that "the railroads have definitely abandoned their war with the lake interests for tonnage."
Paris Wheat Bourse Invaded by Farmers Protesting
at Decline in Prices-Traders Warned Not to
"Encourage Rumors."
The following Paris cablegram Aug. 17 is from the New
York "Times":
Renewed demonstrations took place to-day in the Paris wheat market,
which was invaded by a delegation of wheat farmers protesting at declines
in wheat prices.
The intruders contented themselves with shouting orders for big lots of
grain at high prices, which were not accepted, as only the authorized commissioners are permitted to trade on the wheat bourse. The delegation
then withdrew without further disturbance.
Jules Destombe, Vice-President of the Wheat Syndicate,Issued an appeal
to the traders to refrain from encouraging rumors tending to disturb the
equilibrium of the market.
Higher Prices for Lower Grades of Tobacco in Eastern
South Carolina.
Associated Press advices from Florence, S. C., Aug. 16,
stated:
Higher prices for lower grades than were paid last year were received by
growers In heavy opening sales to-day on the tobacco markets of Eastern
South Carolina and border counties of North Carolina.
Unofficial estimates placed the price increase for lower grades at from
20 to 30%. But many farmers who had hoped for 12 cents a pound for
such types. in view of the smallness of the crop in the two States, were
disappointed.
Prices for better grades remained at about the level of last year. and
farmers were openly disappointed. Medium grades showed a slight price
Improvement over similar 1931 types.
On most markets the average for lower grades was placed at between
8 and 10 cents a pound.
The opening "break" was heavy on the eight South Carolina and six
border North Carolina markets.
Later Associated Press accounts from Florence (Aug. 17)
said:
Prices held up on the South Carolina tobacco auction markets to-day
under continued heavy offerings. There was no change from yesterday's
opening day prices in the early sales.
Primings continued to constitute the major part of the offerings on
most markets, and were selling from 50 to 75% more than a year ago.
Better grades were little changed from the 1931 prices.
Most growers seemed satisfied with the prices, but there was some
turning of tags at Darlington, S. C., where early sales were at an average
of around 83.i cents a pound.
Kingstree warehouses reported 150.000 pounds offered with the average
price there about the same as at Darlington. About 50,000 pounds were
sold at Dillon, at an estimated average of 104 cents a pound.
Federal Farm Board Will Avert Coffee Shortage with
Release Sept. 1 of Brazilian Coffee Received in
Exchange for Wheat-Present Situation Arises
from Closing of Port of Santos.
The release of a part of the 132,000,000 pounds of Government-owned coffee on Sept. 1 will delay at least until the
middle of October the threatened coffee famine, George S.
Milnor, President of the Grain Stabilization Corporation,
disclosed at Chicago on Aug. 13, according to a dispatch
that day to the New York "Times" which went on to say:
Incidentally, he observed that the Federal Government would make "a
very satisfactory profit" on this coffee, which was received from Brazil In
exchange for 25,000,000 bushels of the Farm Board surplus wheat and
is now stored in a Brooklyn (N. Y.) warehouse.
The usual flow of 100.000.000 pounds of coffee a month from Brazil to
this country ceased July 11, when revolutionary activities closed the ports
of Sao Paulo. Explaining the plan for disposing of the supply obtained in
the Farm Board deal, Mr. Milnor said:
"The Grain Stabilization Corporation cannot release this coffee for sale
until Sept. 1. because of the agreement with the Brazilian Government
concerning its marketing, but at that time it will be put up for disposal to
the highest bidder.
"1 understand that there is enough of a reserve supply to carry the country
along in its normal demands until that time so that there will be no actual
shortage. The 132,000.000 pounds which the Government has, all of it
of the very best grade, should last six weeks or longer."
Coffee retailers predict that the Government supply will serve as a check
to keep the prices of coffee from skyrocketing because of the shut-off of the
usual supply from South America. At the same time the trade agreement
made primarily so that the Farm Board could unload some of its surplus
wheat is now looked upon as a "life saver" for American coffee consumers,
1235
Financial Chronicle
Volume 135
A further Chicago dispatch (Aug. 15) to the "Times"
said:
George S. Milnor, President of the Grain Stabilization Corporation, explained to-day that when the Corporation begins disposing of its 132.000,000
pounds of Government-owned coffee on Sept. 1, the sales will be restricted
to not more than 62,500 bags (8.250.000 pounds) a month.
The gradual release of the Stabilization Corporation's huge supply is
expected to forestall a coffee famine in the United States, threatened by the
present unsettled political conditions in Brazil, which have shut off importations from Santos, the world's largest shipping port.
The Stabilization Corporation took the coffee some months ago in exchange for 25,000,000 bushels of wheat. Under the Corporation's contract
with the Brazilian Government, disposal of this supply cannot be made in
greater amounts than 8,250,000 pounds a month. If conditions threatening
the future of the Brazilian coffee trade arise as a result of this stipulation
a revision of the contract may result, Mr. Milnor said.
The coffee shortage was referred to in these columns
Aug. 13, page 1069.
preliminary repo't for the several items of the Supply and
Distribution of Cotton in the United States for the 12 months
ended July 31 1932, are presented in the following tabular
statements. No. I shows the principal items of supply and
distribution; No. II the comparative figures of stocks held
on July 31 1931, and 1932; and No. III further details concerning the supply and distribution. The quantities are
given in running bales, except that round bales are counted
as half bales and foreign cotton in equivalent 500-1b. bales.
Linters are not included.
I.-COTTON GINNED, IMPORTED. CONSUMED AND DESTROYED IN
TI1E UNITED STATES FOR TIIE 12 MONTHS ENDING JULY 31 1932
(BALES).
Ginning from Aug.1 1931,to July 31 1932
16,692,630
108,125
Net imports
8,706,890
Net exports
4,869,103
Consumed
62.000
Destroyed (ginned cotton)
Census Report on Cotton Consumed in July.
Under date of Aug. 16 1932, the Census Bureau issued
its report showing cotton consumed in the United States,
cotton on hand, active cotton spindles and imports and
exports of cotton for the month of July 1932 and 1931.
Cotton consumed amounted to 278,656 bales of lint and
37,210 bales of linters, compared with 320,783 bales of
lint and 46,680 bales of linters in June 1932, and 450,884
bales of lint and 64,325 bales of linters in July 1931. It
will be seen that there is a decrease under July 1931, in
the total lint and linters combined, of 199,343 bales, or
38.69%. The following is the official statement:
II.-STOCKS OF COTTON IN THE UNITED STATEE: JULY 31 1931. AND
1932. (BALES).
1932.
1931.
1,218,863
995,526
In consuming establishments
6,793,453 9,524,467
In public storage and at compresses
1,760,000
Elsewhere (partially estimated)_a
850.000
JULY REPORT OF COTTON CONSUMED. ON HAND. /MPORTED
AND EXPORTED, AND ACTIVE COTTON SPINDLES.
(Cotton In running bales, counting round as halt bales, except foreign, which la
in 500-pound bales.)
Aggregate supply
DistributionNet exports (total less re-import• II mos.ended June)
Consumed
Destroyed (ginned cotton)
Stocks on hand July 311932,total
In consuming establishments
In public storage and at compresses
Elsewhere (partially estimated)-a
Cotton Consumed
During-
Cotton
Ten
In Con- In Public Spindles
Months suming
Storage
A dice
Ended Establish & at Corn- During
July 31
merits.
presses.
July
(bales)
(bales)
(bales) (Number)
Year
July
(bales)
000000
WWWWWW
11932 278,656 4,869,103 1,218,863 6,703,453 19,758,252
(1931 450,884 5,262.974 995,526 4,524,467 25,825,718
Cotton-grow., t; States_ _ _ _
New England' tates
Included A boveEgy ptlan cotton
.
Other foreign cotz,4)
_
All other State,
American-Egy Ma u cotton
Not Included 4bareLinters
{
239,186 4,034,629
353,944 4,147,573
32,608 677,952
80,858 936,741
6,862 156,522
16,082 178,660
935,445 6,241,581 15,220,742
679,559 9,152.447 16,779,228
231.423 253,633 3,951,178
269,026 136,991 8,065.608
51,995 208,239
586,332
46,941 235,029
980,882
000000
WWWWWW
t, tes
6,079
7,740
2,352
5,157
803
1,379
79,906
104,095
42,171
75,266
12,512
15,359
32,110
42,429
22,792
31.519
5,717
8,505
35,875
21,507
6,551
11,818
10,815
8,204
00
WW
_
Unite('
Cotton on Hand
July 31-
37,210
64.325
637,254
714.117
301,689
254.343
53.082
01.638
Imports of Foreign Cotton (500-D. Bales).
Country of Production .
July.
1932.
Egypt
Peru
China
Mexico
British India
All other
Total
12 Mos. End, July 31.
1031.
6,194
994
276
205
573
22
8,264
1,348
1932.
1931,
1,776
1,927
4,050
204
81,090
3,528
7,192
20,641
17.513
1,605
22,902
2,373
31.177
15,126
34.218
1.733
9.305
131,569
107.529
Exports of Domestic Cotton, Excluding Unfelt,
(Running Bales-See Note for Linters),
Country to Which Exported.
July.
1932.
United Kingdom
franca
Italy
Germany
Spain
Belgium
Other Europe
Japan
China
Canada
All Other
83.867
16,245
36,029
73,481
33,221
9,257
36,672
87.743
60,421
11,329
1,211
12 Mos. End. July 31.
1931.
10.569
5,161
20,096
35.397
10.213
6,534
21,608
78,460
55,700
6,624
8,697
1932.
1931.
1,343.964 1,053,774
463,092
914,223
649.059
476,503
1,570,312 1,639,947
305,567
250,885
136,291
137,899
395,816
320,215
2,293,831 1,228,410
1,111,738
428.656
186,921
189,597
250,957
119,818
Total bales
9,682,316
8,706.890
9,869,103
62,000
9,682,316
1.218,863
6,703.453
1,760.000
Aggregate distribution
03.320,309
SUPPLY AND DISTRIBUTION STATISTICS FOR LINTERS.
(Not included in cotton statistics abate.)
Stocks of linters Aug. 1 1931, were 502,981 running bales: production during 12
months ended July 31 1932, 875,872 bales; exports. 115.420 bales; consumption.
637.254 bales; destroyed, 4,000 bales; and stocks July 31 1932, 622.771 bales.
Census Report on Cottonseed Oil Production
During July.
On Aug. 12 the Bureau of the Census issued the following
statement showing cottonseed received, crushed and on
hand, and cottonseed products manufactured, shipped out,
on hand and exported for twelve months ended July 31
1932 and 1931:
COTTONSEED RECEIVED, CRUSHED AND ON HAND (TONS).
Received at Mills.*
Crushed
On Hand at Mills
Aug. 1 to July 31 Aug. 1 to July 31.
July 31.
State.
1932.
Alabama
Arizona
Arkansas
California
Georgia
Louisiana
Mississippi
North Carolina
Oklahoma
South Carolina
Tennessee
Texas
All other States
1931.
1932.
1931.
379.235 399,808 370.469 399,405
48,388
41,339
64,103
63,906
529,999 251,236 510,699 253.511
79,363 127,819
75,308 134,759
471,318 668,710 462.240 668,060
258,987 202,891 257,308 202,909
743,988 573,040 719,649 581,934
258,905 291,244 254,983 290.601
378,540 250,090 339,064 249,077
245,251 282,051 243,859 281,540
490,944 261,658 482.045 264,025
1 655,035 1,258,531 1,495,275 1,261.741
63.532
75,502
76,432
63,483
1932.
1931.
9,435
7,098
8,109
5,255
10,457
2,331
25,420
4,929
38.271
2,297
9.127
172,919
981
669
49
775
1,200
1,379
652
1,081
1,007
3,295
905
228
13,493
51
United States
5 616,385 4,694,516 5,327,7464.715,148 296,629
24.784
• Includes seed dest oyed at mills but not 24,784 tons and 45,434 tons on hand
Aug. 1, nor 44,779 tons and 75.274 tons reshipped for 1932 and 1931, respectively.
COTTONSEED PRODUCTS MANUFACTURED, SHIPPED OUT AND ON
HAND.
Item.
Season.
Crude oil
(pounds)
Refined oil
(pounds)
Cake and meal
(tons)
Hulls
(tons)
Linters
(running bales)
Hull fiber
(500-lb. balm)
Grab'ts.motes,A:c
(500-lb. bales)
0000000000000
(4(4(4(4(4
00
?7474747474-47
.w.wwwww.wwe.ww
Supply and Distribution of Domestic and Foreign
Cotton in the United States, Season of 1931-32.
The Department of Commerce has issued the preliminary
report compiled from census returns of cotton consumed
and on hand for the 12 months ended July 311932. The
23,170,798
Excess of distribution over supply.b
149,561
a Includes cotton for export on shipboard but not cleared; cotton coastw,se;
cotton in transit to ports, interior towns, and mills; cotton on farms. &c.
b Due princlpaly to the inclusion in all distribution Items of the "city crop".
which consists of rebaled samples and pickings from cotton damaged by fire and
weather
Note.-ForeIgn cottons included in above items are 122,077 bales consumed,
107,273 balm on hand Aug. 1 1931. and 97,278 bales on hand July 31 1932.
Total
449,476
259,059 8,707,548 6,759,927
Note.-Linters exported, not included above, were 9,169 bales duram
July in
and 11,073 bales In 1931; 115,920 bales for the 12 months ended July 31 n 19321932
and
111.969 bales in 1931. The distribution for July 1932 follows: united
Kingdom,
1,160: Netherlands, 677; Belgium, 577: France, 2,167; Germany, 1,763; Italy,
500;
Japan,
1,546; Panama, 17; British Honduras, 3; 13rit sh West
Canada, 757;
Indies, 2.
51 ORLD STATISTICS.
The preliminary estimate of the world's production of commercial cotton,
exclusive of linters, grown in 1031, as compiled from various sources was 26.398.000
bales, counting American In running bales and foreign in bales of 478 pounds
while the consumption of cotton (exclusive of linters in the United States) forlint.
the
year ended July 31 1931 was approximately 22,402,000 bales. The total number of
spinning cotton spindles, both active and idle, is about 162.000.000.
6,369,993
DL-SUPPLY AND DISTRIBUTION OF DOMESTIC AND FOREIGN
COTTON IN THE UNITED STATES FOR THE 12 MONTHS ENDED
JULY 31 1932. (BALES).
SupplyStocks on band Aug. 11931. total
6,369,993
In consuming establishments
995,526
In public storage and at compresses
9,524,467
Elsewhere (partially estimated)_a
850,000
Net imports (total less re-exports limos,ending June)
108,125
°innings during12 months, total
16.692,630
Crop of 1931 after July 31 1931
16.621,567
Crop of 1932 to Atig.1 193°
71,063
On Hand
Aug. 1.
Produced
Aug. 1 to
July 31.
Shipped Out
Aug. 1 to
July 31.
On Hand
July 31.
08.086,071 1,694,114,916 1,677,966,930 .29,433,629
7.893.957 1,491,881.530 1,942,478,558
8,086,071
a625,731,391
a277.836,530 81515.876,131
301,609,092 1,323,258,418
277,836.530
146.888
2,402,078
114.258
2,434,708
2,073,284
55,352
146.888
2.164,820
165.207
47,723
1,511,172
1,393,688
47,723
1,284,276
28,495
1,303,504
175,904
238,120
813,656
875,872
175,904
135,220
823,944
783,260
4,138
3,564
32,530
33,104
3,564
2,659
49,101
50,006
28,799
15,290
12.475
31,614
12.776
38.817
38.516
12,475
• Includes 3,267,812 and 4,363,454 lbs. held by refining and manufacturing
establishments and 3.011,840 and 7.115.770 lbs. in transit to refiners and consumers
Aug. 1 1931 and July 31 1932. respectively.
a Includes 4.207,734 and 4,958,0.59 lbs. held by refiners, brokers, agents and
warehousemen at places other than refineries and manufacturing establishments
and 3,585,902 and 5,537,691 lbs. In transit to manufacturers of lard substitute,
oleomargarine, soap, &c., Aug. 1 1931 and July 31 1932, respectively.
I Produced from 1,642.749.299 lbs. of crude oil.
1236
Financial Chronicle
EXPORTS OF COTTONSEED PRODUCTS FOR ELEVEN MONTHS ENDED
JUNE 30.
Item—
1931.
1932.
Oil, crude, pounds
9,450,763
31,578,199
Oil, refined, pounds
16,515,737
8,608,563
Cake and meal, tons of 2,000 pounds
43,328
213,833
Linters, running bales
100,896
106,251
Production, Sales and Shipments of Cotton Cloth in
July as Reported by Association of Cotton Textile
Merchants of New York.
Sales of 222,616,000 yards, or 157.1% of production,
during the month of July represent a major accomplishment
in supply and demand adjustment, according to the Association of Cotton Textile Merchants of New York who
made public Aug. 15, their statistical reports of production,
billings and sales of carded cotton cloths during the month
of July 1932. The figures cover a period of four weeks. The
Association also said as follows in its report:
Production during July was 141,673,000 yards, or at the rate of 35.418,000
yards weekly. This is the lowest rate of production on record. For June
and July together, production has been 110 million yards less than during
the same months in 1931.
Billings were 165,574,000 yards, or 116.9% of production. Reduction of
stocks was continued, decreasing 7.8% during the month to a total of
281.249.000 yards. Unfilled orders increased 33.4% during the month to
227,952,000 yards on July 31.
These statistics are compiled from data supplied by 23 groups of manufacturers and selling agents reporting to the Association of Cotton Textile
Merchants of New York and the Cotton-Textile Institute, Inc. These
groups report on more than 300 classifications or constructions of carded
cotton cloths and represent the major portion of the production of these
fabrics in the United States.
Production Statistics—July 1932.
The following statistics cover upwards of 300 classifications or constructions of carded cotton cloths, and represent the major portion of the
production of these fabrics in the United States. This report represents
yardage reported to our Association and the Cotton-Textile Institute,
Inc. It is a consolidation of the same 23 groups covered by our reports since
October 1927. The figures for the month of July cover a period offour weeks.
July 1932(4 Wks.)
Production was
141,673,000 yards
Sales were
222,616,000 yards
Ratio of sales to production
157.1%
Billings were
165,574,000 yards
Ratio of billings to production
116.9%
Stocks on hand July 1. were
305,150,000 yards
Stocks on hand July 31, were
281.249,000 yards
Change in stocks
Decrease 7.8%
Unfilled orders July 1. were
170,910,000 yards
Unfilled orders July 31, were
227.952,000 yards
Change in unfilled drders
Increase 33.4%
British Cotton Mills Face Strike Aug. 27-500,000
Ordered to Quit If Employers Fail to Make New
Wage Offers.
The following (Associated Press) from Blackburn (England), Aug. 15 is from the Nev York "Times":
Britain's vast cotton industry was threatened to-day with a strike which
would involve almost 500,000 operatives. The central board of the Northern Counties Textile Trade Federation decided to call a strike Aug. 27 if
the dispute over the new wage agreement is not settled.
The walkout was scheduled for 12 days hence so the employers might
have an opportunity to make new proposals. Thus the door to peace was
left open.
Negotiations have been going on since December, when the mill owners
announced they intended to terminate the agreement on wages and hours
under which the industry has been operating for a decade.
Luke Bates, secretary of the federation, said these was no alternative
except to strike unless more reasonable proposals were forthcoming.
Substantially Higher Cotton Prices Looked for by
C. T. Revere of Munds, Winslow & Potter—Comment on Government's Preliminary Estimate of
Yield.
Cotton is on the eve of one of the most interesting developments in its history, according to C. T. Revere, of the
stock and commodity exchange firm of Munds, Winslow &
Potter. "In view of the record of the Government crop
statisticians the last few years, the preliminary estimate
placing the prospective yield of cotton at 11,306,000 bales
should be accepted at its face value," Mr. Revere states. He
further comments as follows:
"In its supplemental report the Crop Reporting Board gave what appears
to be full justification for its figures. Winter survival of weevil had been
large, and early infestation was fostered by the rains in June and the first
half of July. The deficiency in fertilizer has been reflected in the small
size of the plant, lessened number of bolls per plant, and subnormal site
of the bolls.
"All in all, the crop had a poor foundation, and it has been extremely
difficult to decide what sort of weather would be favorable for a fairly
large production. With the foothold gained by the weevil, showery weather
would merely foster the menace of propagation. Dry weather, on the other
hand, would disclose the deficiency in plant nourishment. Development of
the crop in Texas and Oklahoma has been disappointing. Drouthy conditions
in those areas have caused a gradual and progressive decline in outlook.
"As we view crop prospects at this time—and in this connection we
accept the Bureau forecast as a basis for calculation--showery weather
after Aug. 1 throughout the Eastern and Central belts with no generous
relief from the dry conditions in the West point to a still further drop in
yield. For the next month the trade is bound to give consideration to
the possibility that the September forecast may place the yield potentially
at less than 11,000,000 bales.
"Of course there are many individuals throughout the cotton trade who
will contend that even a production this season of 10,750,000 bales would
Aug. 20 1932
suggest no actual scarcity of cotton. The carryover is in the neighborhood
of 13,250,000 bales, and the total supply, including the crop, would be
approx:mately 24,000,000 bales. Such ventures into statistical abstractions
may give comfort to the theorists, but they do not always produce a
response in markets.
"We believe it will be conceded by most members of the trade that if the
South had reduced its acreage this season 35% the development would
have been hailed as strikingly bullish. Yet here we have an indicated drop
in production of approximately 6,000,000 bales, or about 35%. The
effect of such a radical change can hardly be over-estimated.
"The situation does not demand the adoption of artificial price boosting
expedients. With the changed psychology we believe the intrinsic strength
of cotton will be reflected in substantially higher prices.
"As the buying movement in commodities gains impetus and volume, the
disclosure of vacuum in finished goods will make the stampede of shorts
in recent stock market sessions look like a sedate performance. In fact,
we would not be surprised to see a buyers' panic in merchandise."
Improvement in Domestic Cotton Mill Situation.
The domestic cotton mill situation has undergone a substantial improvement within the past month, which became
very pronounced this past week, according to the New York
Cotton Exchange Service. Sales of cotton cloth were greatly
in excess of the current output, resulting in a running down
of stocks and an increase of unfilled orders, according to
the Exchange Service, which, on Aug. 15, added:
"The activitY was noticeably broad, covering most of the important lines
in both the unfinished and the finished goods divisions
of the market.
Wholesalers in the Middle West and South bought very liberally and cutters
were active on apparel fabrics. Prices advanced sharply on both unfinished
and finished goods, in response to the broadening
demand and the rise in
raw material costs. While there was an absence
of desire to expand production, the necessity of makig larger deliveries forced increased operations
in a number of mills which finish their own
goods. The trend of mill
activity is 'Inward from the extremely low point reached in July. It is
expected that the monthly report on production and sales for July will be
more favorable than for several months."
Egypt Barters Cotton for German Fertilizer.
The Department of Commerce at Washington issued the
following announcement on July 29:
After more than a month's negotiation, agreement
has been reached to exchange between 15,000 and 20,000 bales of Egyptian cotton for 50,000
tons of German fertilizer, according to a
report to the Commerce Department from Commercial Attache Charles E. Dickerson, Jr.,
Cairo.
A recent announcement by Darwish Bey,
head of the Cotton Section of
the Ministry of Finance, stated.
"It has been agreed that certain German firms
should supply the Egyptian
government with 50,000 tons of manure (Azot) over a certain period at the
rate of 25 Egyptian dollars (1 dollar equals
20 piasters in local market
parlance, and is not a United States dollar; the plaster is
worth about 3.7
cents at current quotations) a ton on condition
that if the price of this
fertilizer falls a corresponding reduction in the price
of quantities of fertilizer taken over by the government should be effected.
In exchange for
this fertilizer the government will give to German
spinning factories a
quantity of cotton ranging between 15,000 and 20,000
bales, according to
market price on the date of delivery."
Exchange of 10,000 bales of Egyptian cotton for Iltnigarlan
Treasury
Bills has been mentioned in trade circles, but no official
confirmation has
been made.
Egyptian Farm Conditions Said to Necessitate Many
Moratoria On Rents.
Under date of August 2 the Department of Commerce at
Washington said:
Because of the continued decline in price of cotton,
the basis of Egypt's
economic structure, farm conditions in that country
have reached the stage
where drastic moratoria on farm rents have become
necessary to shift in
some measure the incidence of the burden from the
shoulders of the tenant
farmer, composing about 70% of the population,
whose purchasing power
has necessarily been considerably impaired as a result,
according to a report
to the Commerce Department from Commercial
Attache Charles E.
Dickerson, Jr., Cairo.
The Government has repeatedly intervened to arrest
the worsening conditions of the "fellaheen," as the tenant farmer is called.
Four times within
the past three years laws have been passed either
declaring one year moratoria, or suppressing entirely collection of most of the
agricultural
rents,
which has assisted the farm population in purchasing a
few of the necessities.
On December 4. 1930, a moratorium of one year
was accorded for the
payment of farm rents due for the farm year 1929-30 on
land rented for
normal cotton cultivation; July 30. 1931, saw another law
passed supress big entirely collection of over 80% of the rents due for
the year 1929-30;
on September 10 1931, a one-year moratorium was
accorded for payment
of 30% of the rents due on land rented during the year
11 1932, a law was passed suppressing entirely collection of1930-31; on July
more than 70%
of the farm rents due for the year 1931-32.
The decline in cotton prices has also been accompanied by a
gradual readjustment in land values. The manager of one estate said that
prior to 1928
his best land rented for about $70 per acre, now it is renting
for about half
that amount. During the years of high cotton prices,
around 1919 and
1920, the value of the best land was placed at about $2,000 an
acre. Now
it is estimated at about $400 to $600 an acre if a buyer could
be found.
Italy Takes More U. S. Cotton—Less Foreign According
to Textile Division of Department of Commerce.
Italy continued to take more U. S. Cotton and less foreign
cotton during May, importing during the month 68,000
bales compared with 53,000 bales during April and 41,000
bales for May 1931, according to the Commerce Department's Textile Division. In its announcement of this, July
29, the Department also said:
Total Italian imports of United States cotton for the ten months from
bales showing an increase
August to May, inclusive, amounted to 507,000
Volume 135
Financial Chronicle
of 110.000 bales over the imports for the corresponding ten months of the
1930-1931 season.
Imports into Italy of other than United States cotton in May were 3,300
as compared with 19,000 for April and 25,000 for May 1931. Total imports of other than United States cotton for the ten-month period amounted
to 188,000 bales, a decrease of about 67,000 bales from the corresponding
ten months of 1931, amounting to 255,000.
Total Italian imports of all cotton for the ten months' period amounted
to 695.000 bales, an increase of 45,000 over last year's ten month figure of
650,000.
Stocks of United States cotton at Genoa at the end of June amounted to
60,000 bales, compared with 70,000 bales at the end of May and 44,000
at the end of June 1931, according to trade figures. Stocks of United States
cotton at Venice at the end of June amounted to about 5.000 bales; stocks
for May and June 1931 being negligible. Stocks of other than American
cotton at Genoa amounted to 11,000 bales at the end of June; 11,000 bales
at the end of May,and 8.000 bales at the end of June 1931.
Opening of Fall Rug and Carpet Lines-Mills Cut
Prices on High-Grade Coverings-American Oriental Types Lower-Carpets Reduced 5 to 10%.
Major price reductions by two manufacturers of higherprice domestic rugs and downward adjustments on capets
were features of the opening of fall rug and carpet lines on
Aug. 15, said the New York "Times" of Aug. 16,from which
we also quote the following:
Popular price floor coverings showed no variation from spring quotations.
The Karastan Rug Mills announced a slash from $165 to $147.50 in the
resale price of the Karastan rug and a cut from $115 to $98.50 in the Karashah number-both are American oriental types. M. J. Whittall Associates, Ltd., introduced an Anglo-Persian seamless wilton at $98.50 and
announcel6 a reduction on the Anglo-Persian seamed wilton from $117.50
to $100. The prices quoted are for 9x12 size rugs.
Considerable speculation regarding the probable action of A. & M.
Karagheusian, Inc., manufacturers of the Gulistan rug, which is made
to retail at $100, arose in the market following the Karastan Mill announcement. At the Karagheusian offices no definite word on prices was
available, but the general impression was that no reductions would be made.
W.& J. Sloane, as selling agents for the Alexander Smith & Sons Carpet
Co., C. H. Masland & Sons, Inc., and Barrymore Seamless Wiltons, Inc.,
made no changes from spring rug quotations. Reductions of 5 to 10%.
however, were made on velvet and axminster carpeting. The Mohawk
Carpet Mills, Inc., announced reductions averaging 5% on carpet lines,
but made no changes in rug prices.
Attendance at the market yesterday was disappointing but was expected
to improve to-day. "Highlighted" patterns were stressed by manufacturers for all grades of floor coverings from low-end axminsters to the
higher price wiltons.
In its issue of Aug. 17 the "Times" said:
Karagheusian Prices Unchanged.
M. Karagheusian, Inc., producers of the Gulistan rug, will adhere to spring quotations for the fall, officials announced here yesterday.
The statement, following the announcement of price cuts in several competing linos, served to strengthen the price tone of the higher-price domestic rug market. Other manufacturers of washed rugs announced they
would follow the Karagheusian example. In the carpet branch of the
floor-coverings trade price cuts of 5 to 10% on carpeting announced by
W. & J. Sloane and by the Mohawk Carpet Mills, Inc., will be followed
by other producers. Most of the mills which opened fall lines in June
were refiguring carpet prices yesterday with a view to meeting the lower
price.
A. &
Wage Cut of 10% Accepted by Potters' Union.
Associated Press advices from East Liverpool, Ohio,
August 16 to the St. Louis "Globe-Democrat" said as follows:
The United States Potters Association and the National Brotherhood of
Operative Potters announced to-day the signing of a two-year agreement
providing a 10% reduction in wages, affecting 7,500 skilled pottery workers.
The agreement dates from October 1, but is effective at once, and was
signed following an eight-day conference at Atlantic City.
Petroleum and Its Products-Major Companies Bearing
Down on Efforts to Secure Further Crude Price
Advances-Hold that Petroleum Should Follow
Other Commodities in Gradual Progress.
The crude oil price situation holds the attention of all
factors in the industry as efforts persist to secure further
advances which, it is felt by leading companies, are not
justified at this time. It is the contention of major operators
that petroleum should stay in line with other commodities
and show a gradual and firm improvement, rather than a
spasmodic price improvement which may not be of lasting
benefit.
A movement initiated in the Mid-Continent area to secure
a standardized reduction of crude throughout all producing
areas and thereby force a higher price is being deprecated
as an artificial stimulant not to the best interests of the
industry at this time.
It is pointed out that petroleum is now enjoying the best
position both from a statistical and an actual standpoint in
several years, and that all efforts should be directed toward
solidifying this condition, rather than in endeavoring to
send crude prices up another 15 cents or 25 cents per barrel.
On the present basis, it is generally conceded that the
industry as a whole will go through 1932 on a profitable
basis, and that to endanger that opportunity would be a
foolish move.
1237
Natural improvements which would tend to strengthen
conditions are highly favored, such as the stoppage of the
illegal flow of excess production in east Texas, which iq
being absorbed by a market which would otherwise have to
go to legitimate production for its needs.
With crude output now averaging 15% below requirements, heavy withdrawals are being made from storage,
each week showing the market in a stronger statistical
position. With gasoline imports practically extinct, due to
the new excise tax, the drop in consumption of refined
products which might have been experienced has been largely
discounted.
Crude runs to stills in the Mid-Continent refineries are
being held to the current market demand for gasoline,
resulting in an average daily run during August of 427,410
barrels, as compared with 433,255 in July. This shows a
sharp decline when compared with the figures of August
last year, when a daily average run of 590,545 barrels was
reported.
Considerable interest is manifested in the probability that
Harry F. Sinclair's Consolidated Oil Corp. will secure the
Richfield Oil Co., allowing Consolidated entry into the
rich West Coast markets, as well as adding the valuable
Richfield producing units to the Consolidated string.
There were no price changes in crude reported this week.
Prices of Typical Crudes per Barrel at Wells.
(All gravities where A. P. I. degress are not shown.)
Bradford,Pa
62.02 Eldorado. Ark.. 40
60.78
Corning. Pa
1.05 Rusk, Texas. 40 and over
.83
Illinois
.80 Salt Creek. Wy0., 40 and over
94
Western Kentucky
.90 Darst Creek
90
Mid-Continent, Okla., 40 and above 1.00 Midland Dist.. Mich
.85
Hutchinson. Texas, 40 and over--- .78 , Sunburst, Mont
1.05
SpIndietop, Texas, 40 and over__ .78 Santa Fe Springs. Calif.,40and over I AA)
Winkler. Texas
.86 Huntington. Calif.. 26
I AM
Smackover, Ark., 24 and over
.77 Petrolia. Canada
1.75
REFINED PRODUCTS-ATLANTIC REFINING REDUCES GASOLINE PRICES-KEROSENE LOWER-NEW ENGLAND
FIRMER-NEW YORK BULK PRICES SLIGHTLY WEAKERCUTS RUMORED.
A slightly weaker background in refined products found
gasoline and kerosene prices reduced this week in scattered
areas, and brought forth rumors of an impending cut in bulk
gasoline prices in the New York area. Export markets
showed greater strength in the face of the domestic weakness.
Bunker fuel oil and Diesel have held steady.
On Thursday, Aug. 18, the Atlantic Refining Co. reduced
tank wagon and service station prices of gasoline M-c. a
gallon in western Pennsylvania, lc. in eastern Pennsylvania
and Delaware, excluding Philadelphia, and %-c. in metropolitan Philadelphia. The new service station prices now
are 14e. in western Pennsylvania; 13%e. in eastern Pennsylvania, and Delaware, and 130. in Philadelphia. The same
company reduced kerosene tank wagon prices lc. a gallon to
10c. throughout Pennsylvania and Delaware.
On Wednesday the Standard Oil Co. of New York
recognized improved conditions in New England by advancing gasoline retail prices lc. a gallon at Boston and
Providence. At the same time,Standard reduced tank wagon
prices le. a gallon to 12c. at Syracuse, Rochester, Buffalo
and Binghampton.
Buyers in the New York area became restless as rumors
began to spread of impending reductions in tank car and tank
wagon prices here. There was a growing inclination in the
last few days to postpone action on new committments
because of this feeling. Whether or not such reductions
will be made this weekend is problematical, but it appears
certain that some readjustment will take place within the
next few days.
In the face of the weaker domestic markets, export inquiries improved and export gasoline prices advanced X-c.
a gallon in the Gulf territory.
A better tone is noted in bunker oils with Grade C steady
and active at 85e. a barrel, at refineries, Diesel continues
routine and steady at $1.65 a barrel, same basis.
A cut in third grade gasoline prices on the Pacific coast is
to be made by major operators, due to continued pricecutting on the part of independents, who have been selling
at 2c. under major quotations.
Price changes follow:
Aug. 17.-Standard Oil Co. of New York advances retail gasoline prices
lc. a gallon in Boston and Providence; reduces tank wagon prices lc. to
12Mc. a gallon in Syracuse, Rochester. Buffalo and Binghampton.
Aug. 18.-Atlantic Refining Co. reduces tank wagon and service station
gasoline prices s-c.in western Pennsylvania; lc. in eastern Pennsylvania
and Delaware. and M-c. in metropolitan Philadelphia. New service station
prices excluding tax are: 14c. in western Pennsylvania, 133c. in eastern
Pennsylvania and Delaware, and 13c. in Philadelphia. Tank wagon
kerosene prices reduced lc. a gallon to 10c. throughout Pennsylvania and
Delaware.
Financial Chronicle
1238
Gasoline, Service Station.Tax Included.
185' New Orleans
$135 Cleveland
20 Philadelphia
195 Denver
13 San Francisco:
1 '4 Detroit
.17 1 Third grade
17 I Houston
19
Above 65 octane_
1751Jacksonville
Premium
155
17 .1 Kansas City
167 St. Louis
.1851Minneapolis
New York
Atlanta
Baltimore
Boston
Buffalo
Chicago
Cincinnati
$ 128
.14
.16
.18
21
144
Aug. 20 1932
b60,680,000 barrels
A.P.1.estimate B. of M.basis, week Aug. 13 1932
56,265,000 barrels
U. S. B. of M. motor fuel stocks, Aug. 1 1931
50,810,000 barrels
U. S. B. of M. motor fuel stocks, Aug. 31 1931
b Estimated to permit comparison with A. P . I. Economics report which is on
Bureau of Mines basis.
C Includes 37,273,000 barrels at refineries: 14,351,000 at bulk terminals: 2,094.000
barrels in transit, and 5,375,000 barrels of other motor fuel stocks.
d Revised down ward in East Coast due to same inventory adJustment as was
ndleated in Bureau of Mines report for June. All A.P. I. East Coast bulk terminal
stocks figures published beginning with those of June 4 should be reduced by approximately 900,000 barrels to be on same comparative basis as Bureau figures,
thus creating a new series, the originally published A. P. I. June 4 figures being
Comparable with preceding weeks, the new series being comparable with subsequent weeks.
A Further General Decline in Natural Gasoline Output Reported-Inventories Show Sharp Decline.
According to the United States Bureau of Mines, Department of Commerce, natural gasoline production suffered
another general decline in June 1932, when the total output
fell to 118,100,000 gallons, compared with 129,300,000
gallons in May. The June total represents a daily average
of 3,940,000 gallons, which is more than 1,000,000 gallons
below the daily average of a year ago. Stocks of natural
gasoline at the plants reflected the severe decrease in output
and declined approximately 10,000,000 gallons to 34,106,000
gallons on hand June 30. The Bureau further shows:
PRODUCTION OF NATURAL GASOLINE (THOUSANDS OF GALLONS).
Production,
Crude Oil Output in the United States Again Resumed
Decline During Week Ended Aug. 13 1932.
The American Petroleum Institute estimates that the
daily gross crude oil production for the week ended Aug. 13
1932 was 2,144,200 barrels, compared with 2,171,900 barrels
during the preceding week, 2,137,500 barrels during the week
ended July 30 1932 and 2,498,500 barrels during the week
ended Aug. 15 1931. The daily production for the four
weeks ended Aug. 13 1932 averaged 2,164,850 barrels.
Reports received for the week ended Aug. 13 1932 from
refining companies controlling 95.1% of the 3,852,000
barrel estimated daily potential refining capacity of the
United States, indicate that 2,163,300 barrels of crude oil
daily were run to the stills operated by those companies,
and that they had in storage at refineries at the end of the
week 37,273,000 barrels of gasoline and 133,735,000 barrels
of gas and fuel oil. Gasoline at bulk terminals amounted
to 14,351,000 barrels and 2,094,000 barrels were in waterborne transit in or between districts. Cracked gasoline
production by companies owning 95.6% of the potential
charging capacity of all cracking units averaged 450,700
barrels daily during the week.
The complete report for the week ended Aug. 13 1932 follows in detail:
DAILY AVERAGE PRODUCTION OF CRUDE OIL.
(Figures in Barrels.)
Oklahoma
Kansas
Panhandle Texas
North Texas
West Central Texas
West Texas
East Central Texas
East Texas
Southwest Texas
North Louisiana
Arkansas
Coast Texas
Coastal Louisiana
Eastern (not including Michigan)
Michigan
Wyoming
Montana
Colorado
New Mexico
California
Week
Ended
Aug. 13
1932.
Week
Ended
Aug. 6
1932.
Average
4 Weeks
Ended
Aug. 13
1932.
Week
Ended
Aug. 15
1931.
417,350
92,950
56.050
50,000
24,500
173,350
56,250
322,100
54.800
29,200
34.050
125,350
32.050
101.950
21.700
31,450
7.500
2,650
31,750
479,200
431,750
93,650
55,350
49,950
24,300
178,650
57,550
329,300
55,900
29,350
34,100
123,800
31,100
105,050
20,000
38.900
7,350
2,900
34,750
468.200
424,500
94,800
55.500
49,900
24,400
176,950
57.350
331,900
55,900
29,600
34,100
121,550
31,800
103,850
19,750
38,100
7.550
2.800
34,850
472,100
264,500
102,850
59,150
56,200
22,650
202,850
52,600
738.050
56,850
30.650
37,400
130,750
23,900
100,650
9.200
37,050
7,850
4,000
44,350
517,000
2,144.200 2.171.900 2,164,850 2,498,500
Total
CRUDE RUNS TO STILLS, MOTOR FUEL STOCKS, GAS AND FUEL OIL
STOCKS AND CRACKED GASOLINE PRODUCTION, WEEK ENDED
AUG. 13 1932.
(Mines in barrels of 42 gallons.)
Daily Refining Capacity
of Plants.
Crude Runs
to Stills.
District.
Reporting.
Potential
Rate.
East Coast
Appalachian.-2nd., Ill., Ky
Okla.,Kan., Mo..
Inland Texas_
Texas Gulf
Louisiana GulfNorth La -Ark...
Rocky Mountain
California
633,700
149,600
438,300
485,700
305,700
532.500
147,500
85.600
160,900
914,500
Total.
%
633,700 100.0
137,400 91.8
431.500 98.9
435,200 89.6
233,900 76.5
531,500 99.8
147,500 100.0
83.000 97.0
143,800 89.4
884,100 98.7
%
Daily OperAverage. sled.
431,300
85,200
295.700
232,700
109,700
376,400
101,900
45.100
44,900
440,400
a Motor
Fuel
Stocks.
Gas and
Fuel Oil
Stocks.
68.1 18,575,000 8,517,000
62.0 2,149,000 1,058,000
68.5 7.910.000 4.350,000
53.5 5,023,000 3,334,000
46.9 1,526,000 2,417,000
70.8 4,654,000 9,042,000
69.1 1,783,000 4,535,000
638,000
301,000
54.3
580,000
31.2 1,910,000
49.8 15,262,000 99.284.000
Totals week:
Aug. 13 1932.. 3,852,000 3,661,600 95.1 2,163,300 59.1 c59093000 133,735,000
Ant. 6 1932_ 3,852.000 3,661,600 95.1 2,127,600 58.1 459165000 133.008,000
a Below is set out an estimate of total motor fuel stocks on U. S. Bureau of Mines
asts for week of Aug. 13 1932 compared with certain August 1931 Bureau figures:
Appalachian
Illinois, Kentucky and Indiana _
Oklahoma
Kansas
Texas
Louisiana
Arkansas
Rocky Mountain
California
Total
Daily average
Total (thousands of bbls.)
Daily average
Stocks End of Mo.
June
1932.
May
1932.
June
1931.
June
1932.
May
1932.
3,700
700
29,900
1.700
27.900
3,800
1,700
5,200
43,500
4,800
600
33,400
2,200
29,700
4,000
1,800
5,100
47,700
4,200
600
38,800
2,400
34,300
• 4,700
2,300
6,000
57,200
41066
525
13,251
871
10,198
930
205
701
2,359
6,807
424
16,993
1,433
11,698
1,198
335
686
4,705
118,100
3,940
2,812
94
129,300
4,170
3,079
99
150,500
5,020
3,583
119
34,106
44,279
812
1,054
New Curb on Oil in East Texas.
The following is from the "New York Times" of Aug. 17:
Effective yesterday, the Texas Railroad Commission has reduced the
allowable output of crude oil in the East Texas field to 43 barrels per well
daily from 44 barrels, according to reports from Austin. The amount
allowable for the area as a whole was unchanged at 325,000 barrels daily.
The completion of a number of wells recently made the reduction in the output of each well necessary in order to keep production of the entire field
within the total set for it.
Crude Petroleum Output Declined During JuneInventories Lower.
According to reports received by the Bureau of Mines,
Department of Commerce, the production of crude petroleum in the United States during June 1932 totaled 64,835,000 barrels, a daily average of 2,161,000 barrels. This
represents a decrease from the daily average in May of
49,000 barrels, and is 339,000 barrels, or 14% below a year
ago. The decline in output in June was confined almost
entirely to the States of California and Oklahoma, with
daily average production in California decreasing 31,000
barrels and that in Oklahoma falling off 10,000 barrels.
Production in Texas continued at virtually the same rate,
with no change recorded in the East Texas field. The
average initial production of the completions in the East
Texas field continued to decline, but the total initial continued to increase due to a steady gain in the number of
completions. There were 359 wells reported as drilling on
June 30 compared with 404 drilling on May 31.
Stocks of refillable crude petroleum reflected the decline
in output and decreased 4,256,000 barrels during the month,
compared with a withdrawal of 3,227,000 barrels in May.
Imports of crude petroleum amounted to 7,869,000 barrels,
with one exception, the highest monthly total since March
1924. Stocks of foreign crude on June 30 totaled 13,309 000
barrels, a new record. The Bureau also stated:
Daily average crude runs in June amounted to 2,411,000 barrels, or
practically the same as in May.
The daily average production of motor fuel showed a slight decrease in
May. but the difference was practically compensated by increased imports.
Stocks of motor fuel were reduced materially, the total for Juno 30 of
56,264,000 barrels representing a net withdrawal of 7.082,000 barrels.
The daily average indicated domestic demand for motor fuel amounted to
1,292,000 barrels, or virtually the same as in June 1931. The daily average
total demand was 1.409.000 barrels, or nearly 1% higher than a year ago.
At the current rate of total demand total motor fucl stocks represent 40
days' supply, compared with 55 days' supply on hand a month ago.
Stocks of all oils on June 30 amounted to 626,487.000 barrels, a net
decline from the previous month of 5,590,000 barrels, compared with an
Increase in May of 1,473,000 barrels and with a decrease of 3,970,000 barrels
in June 1931. The decline in stocks in Juno 1932 affected chiefly crude
petroleum and gasoline, with gas oil and fuel oil showing the principal
Increase.
The refinery data of this report were compiled from schedules of 342
refineries with an aggregate daily recorded crude oil capacity of 3.575.940
barrels, covering, as far as the Bureau is able to determine, all operations
during June 1932. These refineries operated during June at 67% Of their
recorded capacity, given above, Compared with 347 refineries operating
at 67% of their capacity in May
SUPPLY AND DEMAND OF ALL OILS.
(Including wax, coke and asphalt In thousands of barrels of 42 U. S. gallons.)
New Supply- .
Domestic production:
Crude petroleum
Daily average
Natural gasoline
Benzol b
Total production
Daily average
Imports:
Crude petroleum
Refined products
Total new supply, all oils
Daily average
64,835
2,161
2,812
81
67.728
2.258
68,523
2.210
3,079
95
71,697
2,313
75,011 397,632
2,185
2,500
3,583
18,681
153
625
78,747 416,938
2,290
2,625
420,399
2,323
23,369
1,026
444,794
2,457
7,869
3,605
79,202
2,640
5,089
2,874
79,660
2,570
3.978
2,396
85,121
2,837
32,244
22,276
471,458
2,590
25,509
19,284
489.587
2,705
c9,590
1,473
c3,970
c5,090
c13,765
78,187
2,522
89,091
2,970
476,548
2,618
503,352
2,781
2,942
8,891
66,354
2,140
2,544
7,753
78,794
2,626
14,179
43,523
418,846
2,301
11,853
50,970
440.529
2,434
173
di
di'
23
322,845 325,302 353,374
40,938 42,737 43,930
363.783 368,039 397,304
4,020
4,265
3,892
258,812 1264,651 1251,573
1263,773
322,845
40,938
363,783
3,892
258,812
353,374
43.930
397,304
4,020
251,573
Increase in stocks, all oils
Demand88,792
Total demand
2,960
Daily average
Exports:
2.791
Crude petroleum
6,887
Refined products
9,114
,
Domestic demand7
2,637
Daily average
Excess of daily average domestic
d379
Production over domestic demand
Stocks (End of Mon)h)Crude petroleum:
East of California
California e
Total refinable crude
Natural gasoline
Refined products e
June Jan -June Jan -June
1932.
1931.
1931.
May
1932.a
June
1932.
626,487 1636.955 1652,897 626,487 652,897
Grand stocks, all oils
1636,077 I
235
239
220
212
253
Days' supply
Bunker oil (included above in do23.215
20.058
3.242
4.053
3,714
mestic demand)
a Revised. b Based upon production of coke reported to coal division by those
by-product coke plants that recover benzol products. c Decrease. d Deficiency.
e California heavy crude and residual fuel included under refined products. I New
basis (caused by inventory adjustments).
PRODUCTION OF CRUDE PETROLEUM BY STATES.
(Thousands of barrels of 42 U. S. gallons.)
June 1932.
.
'9
.
...a
May 1932.
Total. DatlyAo. Total. DailyAo.
64.835
33
110
177
345
239
871
12
22
13
35
a....
to
. ...lop. .::7;cacow. .
ro....loODlobo
cowCw.icoob.M
. vcoovoo.000.
lo .vsw.o
cnoon.toom.m coo,.......w
•mow.vo.comm.o. w000c.owm.o & .o.mwwwwoo•woorm
993
Arkansas
California:
1,799
Kettleman Hills
2,171
Long Beach
1,787
Santa Fe Springs
8,362
Rest of State
14,119
Total California__
98
Colorado
426
Illinois
75
Indiana -Southwestern_
Northeastern
3
Total Indiana
78
2,736
Kansas
Kentucky
535
909
Loulalana-Gulf Coast-.
855
Rest of State
Total Louisiana_
1,764
Michigan
507
224
Montana
1,066
New Mexico
308
New York
320
Ohio-Central & Eastern
103
Northwestern
423
Total Ohio
2,822
Oklahoma-Okla. City__
3,501
Seminole
6,582
Rest of State
Total Oklahoma---- 12,905
1,118
Pennsylvania
Tennessee
3,300
Texas-Gulf Coast
5,295
West Texas
10,340
East Texas
7,186
Rest of State
26.121
Total Texas
Tvot yirginla
357
662
Wyoming-Salt Creek .. 395
Rest of State
1,057
Total Wyoming....
U. S. total
2.161
68.523
60
72
60
279
471
3
14
3
5
91
18
30
29
59
17
8
35
10
11
3
14
94
117
219
430
37
Jan.June
1931.
Jan.June
1932.
5.998
8,368
-jai
178
345
239
869
11
22
15
37
10.896
14,459
11,740
53.849
90,944
643
2,606
424
17
441
17,122
3,032
5,545
4,949
10,494
2,917
1,292
6,718
1,838
1.818
555
2,373
19.231
22,514
37,870
79,615
6,436
3
19,169
32,698
61,117
43.266
156,250
2,013
4,155
2,742
6,897
5,972
16,027
12,768
60,909
95,676
789
2,379
401
21
422
18,869
3,242
4,765
6.969
11,734
1,552
1,506
7,367
1.579
2,243
575
2,818
26,083
27.436
45.919
99,438
5,524
4
28,218
41,893
32,292
48,690
149,093
2,230
4,624
3,182
7.806
2.210
397.652
42n zoo
35
59
80
64
299
502
4
15
2
2
95
16
35
28
63
18
7
36
10
10
3
13
103
122
215
440
37
NUMBER OF WELLS COMPLETED IN THE UNITED STATES..
Oil
Gas
Dry
1239
Financial Chronicle
Volume 135
Jan.-June
1932.
Jan.-June
1931.
643
179
294
4,642
538
1.571
2.980
1,111
2,261
tile
6761
June
1932.
May
1932.
June
1931.
993
66
325
968
77
269
1 384
15,4
Tntral
a From "Oil & Gas Journal" and California office of the American Petroleum
Institute.
C's,..
•
Cut in Gasoline and Kerosene Prices by Atlantic
Refining Company.
According to the New York "Sun" of Aug. 19 the Atlantic
Refining Company has reduced tank wagon and service station prices of gasoline M cent a gallon in western Pennsylvania, 1 cent in eastern Pennsylvania and Delaware, excludcent a gallon in metropolitan Philaing Philadelphia and
delphia area. The "Sun" notes:
This makes service station price, excluding tax, 14 cents In western
Pennsylvania, 13A cents in eastern Pennsylvania and Delaware and
Philadelphia.
13 cents in
cent a gallon to 10 cents
Tank wagon price of kerosene was reduced 1
throughout Pennsylvania and Delaware.
Foreign Copper Price Cut by Copper Exporters, Inc.
The price of foreign copper was lowered on August 15 by
Copper Exporters, Inc., from 5.50 cents a pound to 5.45
cents, c.i.f. base European ports. Few sales were made
abroad however because of reduced prices there; a fair tonnage
. Hamburg,
of copper being available at 5.425 cents, c.i.f.
Havre and London.
% cents deThe price of domestic copper ranges from 53
livered in the Connecticut Valley to the end of this year
and 53% cents on shipments in the first quarter of 1933.
Lead Price Reduced.
The price of lead at New York was reduced by the American Smelting & Refining Company on August 16 to 3.20
cents. This represents a decrease of 10 points from the
previous:price.
Shipments of Portland Cement Continue to Exceed
Output-Inventories Again Fall Off.
According to the United States Bureau of Mines, Department of Commerce, the Portland cement industry in July
1932 produced 7,659,000 bbls., shipped 9,215,000 bbls. from
the mills and had in stock at the end of the month 22,479,000
bbls. Production of Portland cement in July 1932 showed
a decrease of 44.9% and shipments a decrease of 40.7%,
as compared with July 1931. Portland cement stocks at
mills were 13.3% lower than a year ago.
In the following statement of relation of production to
capacity the total output of finished cement is compared
with the estimated capacity of 165 plants, both at the close
of July 1932 and of July 1931.
RATIO OF PRODUCTION TO CAPACITY.
1
July 1931. July 1932. June 1932. May 1932. April 1932
24.8%
30.2%
35.7%
33.4%
62.0%
The month
41.7%
38.9%
36.5%
34.2%
53.8%
The 12 months ended
PRODUCTION, SHIPMENTS AND STOCKS OF FINISHED PORTLAND
CEMENT,BY DISTRICTS, IN JULY 1931 AND 1932 (IN THOUSANDS
OF BARRELS).
July
Production.
/Maid.
1931.
Eastern Pa., N. J. and Maryland
New York and Maine
Ohio, Western Pa. and W. Va.__
Michigan
Wis., Ill., Ind. and Ky
Va., Tenn., Ala., Ga.,Fla. & La_
Eastern Mo..Ia.,Minn.&S.Dak_
West. Mo., Neb., Kan., Okla.,
Arkansas and Texas
Texas
Colo., Mont.. Utah,Wyo.& Ida.
California
Oregon and Washington
1931.
1932.
1931.
1932.
2,675
1,192
1,520
983
1,877
1,319
1,414
1,162
809
582
571
1,144
322
1,143
3,114
1,436
1,471
1,147
2,275
1,210
1.896
1.741
860
790
644
1,666
493
1,439
6,026
1,669
3,559
2,208
3,518
1,576
2,762
4,553
1.647
2,680
2,007
2,750
1,659
2,921
1,015
646
219
670
369
789
278
111
584
164
1,102
696
229
624
345
511
307
99
510
155
1,624
626
609
1,158
599
1,547
667
419
1,049
580
13.899
Tntal
1932.
Stocks at End
of Month.
July
Shipments.
7.659 15.545
9.215 25.934 22.479
PRODUCTION, SHIPMENTS AND STOCKS OF FINISHED PORTLAND
CEMENT,BY MONTHS,IN 1931 AND 1932(IN THOUS.OF BARRELS).
Production.
Month.
1931.
January
February
March
April
May
June
July
August
September
October
November
December
6,595
5,920
8,245
11,245
14.010
14,118
13,899
13.549
12,092
10,762
8,161
5.974
Total
124.570
1932.
5,026
3,971
4,847
5,478
6.913
7,921
7,659
Shipments.
1931.
4,892
5,074
7,192
11.184
14,200
16,077
15,545
15,172
13,671
12,360
7,156
4,142
1932.
3,393
3,118
3,973
6,536
8,020
9,264
9,215
StocksatEndofMonth
1931.
1932.
27.759
25.778
26.657
28,612
27,545
29,676
26,496
29.715
25.394
29,554
27.602 .24,035
22,479
25.934
24,313
22,736
21.218
22,219
24,098
126.465
a Revised.
Note.-The statistics above presented are compiled from reports for July received
by the Bureau of Mines from all manufacturing plants except three, for which estimates have been Included in lieu of actual returns.
Robert P. Lamont Elected President of American
Iron and Steel Institute,
Robert P. Lamont, who retired early this month as
Secretary of Commerce, was elected President of the Ameri- •
can Iron and Steel Institute on Aug. 18. Charles M.Schwab
announced that directors of the Institute approved changes
in the by-laws necessary to create the office of Chairman
as chief executive officer. Mr. Schwab resigned as President
and was elected Chairman.
An item indicating that Mr. Lamont would become
President of the Institute appeared in our issue of Aug. 6,
Page 872.
14% of Capacity-Price of
Lowest Since August 1915.
Encouraging signs of prospective business improvement
are not lacking, though steel ingot output has not risen
Steel
Production Holds at
Pig Iron
1240
Financial Chronicle
above 14% of the country's capacity, reports tlie "Iron
Age" of Aug. 18. Engagement of steel-making facilities in
the Valleys and at Cleveland and Detroit has been particularly affected by the shutting down of the Ford automobile
plant until Sept. 6, but losses in those districts have been
offset by an increase in Chicago to 13%, against a recent
rate of less than 10%. The Detroit capacity, which attained
a maximum production of about 80% in the second quarter,.
is now down to 13%, all of the Ford open-hearth furnaces
as well as the automobile manufacturing equipment being
die. The "Age" continues:
The slowing-down in the automobile industry, including the Ford suspension, has come at a time when expected seasonal expansion in requirements of other consuming lines has scarcely begun to assert itself. Howevet, at Chicago the steel orders from miscellaneous sources have taken up
the slack caused by smaller releases from the automobile industry. July
output of motor cars was 112,600 units, a decline of 41% from June, and
It is indicated that the August total will be the lowest of the year thus far.
No important resumption of steel buying by automobile manufacturers
Is expected until September. The General Motors Corp. will not begin
work on contemplated new models until Oct. 15.
On the brighter side can be recorded a noticeable gain in demand for
pig iron, including a number of inquiries of fairly good size for fourth
quarter dellvery, continuing strength in scrap markets, the resumption of
steel buying on a small scale by mann manufacturers whose plants have
been wholly or partially shut down during recent weeks, and seasonal orders
and inquiries from consumers whose business normally expands in the fall,
such as stove and furnace makers. Steel furniture manufacturers are
having a sizable pick-up in orders because of requirements for the many
Government buildings now nearing completion.
Efforts of the Washington Administration to stimulate business activity
through loans by the Reconstruction Finance Corporation for railroad
equipment rehabilitation and building construction are adding to the confidence of the steel industry that there will eventually be a marked increase
In its bookings, though it is clearly recognized that many projects will require considerable time, perhaps months, before mills will actually be
rolling the steel.
Although the application of the Pennsylvania RR. for a loan to build
1.500 steel box cars in its own shops is the only concrete development in
the proposed railroad equipment program, negotiations by some other
roads are expected shortly. In probable anticipation of some railroad
buying, the Railway Steel Spring Co. has inquired for 3.000 tons of low
phosphorus pig iron for fourth quarter, the largest inquiry for this grade
In a long period. Several roads are expected
to undertake extensive car
repairs within 60 days. Car builders are confident that much equipment
will be found not to be worth repairing; hence new
car purchases may
eventuate this fall or early next year.
Application will be made immediately for Reconstruction Finance Corporation loans for the construction of two large bridges at San Francisco,
which together will take about 247,000 tons of steel, including cables, and
cost $110,000,000. The newer project the Transbay bridge, for which a
call for bids will be issued soon, requires
115,850 tons of fabricated structural material, and 23,666 tons of other iron
and steel, while the Golden
Gate bridge, which was tentatively awarded a year ago and held up because of litigation and lack of financing, will take 107,000 tons of steel.
Whether former contracts shall be carried out or new bids requested has
not been determined. Including the Transbay bridge, structural steel
projects of 126,300 tons have been added to pending work, the largest
total for a single week since April 1931. Structural steel lettings were
12,800 tons.
Scrap markets have gained strength in virtually all centres, resulting in
a further increase in the "Iron Age" composite price for heavy melting
steel to $6.92, the highest since early June and a gain of 50c. a ton from
the year's low of early July, but pig iron has weakened at Philadelphia, being
down 50c. a ton, largely because of foreign competition, which may result
In the filing of a complaint at Washington for alleged violation of the antidumping provision of the Tariff Act. Incidentally, this week's London
cable to the "Iron Age" reports the granting of a subsidy by the Netherlands Government to the Royal Dutch interest, which has been one of the
largest shippers of pig iron to the United States. The money is to be used
for construction of rolling mills and a cast iron pipe plant.
Recent weakness in prices of galvanized sheets has been largely overcome,
most mills again quoting 2.85c. a lb.. Pittsburgh. Concessions of $2 a
ton have been granted to some large buyers of No. 24 hot-rolled annealed
sheets.
The "Iron Age" iron composite price has declined to $13.64. the lowest
since August, 1915. Finished steel is unchanged at 1.976c. a lb. A
comparative table shows:
Finished Steel.
Aug. 16 1932, 1.976c. a Lb.
Mood on steel bars, beams, tank plates
One week ago
t 978c. wire rails black pipe and sheets.
One month ago
1 9760.1 These products make 8,% of the
One year ago
2 0140. United States output.
1932
1.92ec. Feb. 2
1.97fc. June 24
1931
1.941c. Dee. 29
2.037c. Jan. 13
1930
2.01Pc. Dec. 9
2.2130. Jan. 7
1929
2.2730. Oct. 29
2 317c. Apr. 2
1928
2.2170. July 17
2 28ec. Dec. 11
1927
2.2120. Nov. 1
2.402o. Jan. 4
PIA Iron.
Aug. 16 1932, 613.61 a Gross Ton.
Based on average of baste iron at Valley
One week ago
$13.64 furnace foundry irons at Chicago.
One month ago
13.76 Philadelphia, Buffalo, Valley and Air
One year ago
15.50 mingham.
High.
Low.
1932
613.64 Aug 16
614.81 Jan. 5
1931
15.79 Dec. 15
15.90 Jan. 6
1930
18.21 Jan. 7
15.90 Dec. 16
1929
18.21 Dec. 17
18.71 May 14
1928
18.59 Nov.27
17.04 July 24
1927
17.54 Nov. 1
19.71 Jan. 4
Steel Scrap.
Aug. 16 1932, 81.92 a Gross Ton.
Based on heavy melting steel quoOne week age
;.e3 tedium at Pittsburgh, Philadelphia
One month ago
6.42 and Chicago.
One year ago
9.25
High.
Low.
1932
g1.42 July 5
68.50 Jan. 12
1931
11.33 Jan. 6
7.e2 Dec. 29
1930
15.00 Feb. 18
11.25 Dee. 9
1929
17.58 Jan. 29
14.08 Dec. 3
1P28
16.50 Dec. 31
13.08 July 2
,427
15.25 Jan. 11
13.08 Nov.22
Pig iron and scrap are first to convert the recent improved
tientiment in the iron and steel markets into tangible business,
Aug.
20 1932
and with raw materials quickened the industry is encouraged
to believe that finished products shortly will also receive
impetus, states "Steel" of Cleveland, in its summary on
Aug. 15 of the iron and steel markets. "Steel" continues:
Sales of 9,000 tons of iron at Cleveland and 7,000 tons at Philadelphia
accompany the best inquiry there since late 1931. Broader inquiry and
better feeling are noted at Chicago, St. Louis, Boston, Buffalo and Toronto.
One user ofspecial iron at Philadelphia has covered a year ahead. Foundries
casting railroad equipment are disposed to stock some iron at present prices.
Scrap prices are up 50 cents to 81.50 a ton in most districts, and as usual
In a rising market the supply has vanished overnight, dealers holding for
further advances. The second 50-cent increase at Chicago puts melting
steel there at $5.50 to $6, a bid of 166 for shipment to Canada eliciting no
takers. Dealers who took a recent order for steel at Pittsburgh at $8
covered at $8.25, the market is now quotable at $8.50 to $9, dealers are
talking of a $10 market.
Except at Pittsburgh. where a slight expansion in orders for immediate
rolling is reported, the finished steel lines continue
this lag of
to drag,
finished materials behind raw is not illogical. Resumptionbut
of a mill at
South Chicago last week offset defections at Cleveland and Youngstown
and held the steel operating rate at 14-15%.
Little change is indicated for
this week.
What may be the forerunner of a better operating condition next month,
however, is evident in the greater interest displayed in forward requirementa. Particularly are small buyers sounding out the market and
scanning
the price situation, evidently to determine
whether the,time is propitious
for accumulating a small inventory. This
produce
expected
to
attitude is
improved though small releases by Sept. 15.
If the adage that prices are softest at the turn is solid fact, then the
current weakness in some lines is not discouraging. Bars, plates and shapes
are holding consistently, but sharp
concessions are being made in sheets,
tin and terne plate and strip. In most
cases, mills dip under the market
only for specific business. On sheets and
terne plates definitely lower
levels are quotable.
Awards totaling 13,800 tons, practically up to the weekly average for
1932, record another good week in structural
steel. Inquiry is somewhat
narrower, but is expected to pick up when relief funds are ready for distribution. The undercurrent that railroads will be in the market soon is
strong. In the past week the only tangible railroad business was an Erie
order for almost 1,000.000 each of track
spikes and nut I3cks. Automotive
requirements are in the dull period just preceding releases for new models.
Despite a lower German bid, a Pittsburgh mill has been awarded 290 tons
of piling for Hoover dam. In the
East pig iron from Holland is offered
more freely and cheaply, resulting in an
adjustment in the domestic
market. These irregularities in pig iron and the aforementioned ones in
sheets lower the iron and steel composite
of "Steel" 12 cents to $29.34
and drop the finished steel composite 20
cents to $47.51. The scrap composite, however, is boiling, and a rise of 16
cents to $6.16 makes a gain of
3% in two weeks.
Steel ingot production for the week ended Monday (Aug.
15) is placed at a shade under 143%, according to the
"Wall Street Journal" of Aug. 16. This compares with a
little below 14% a week ago and 143% two weeks ago.
The'Journal" adds:
U. S. Steel is credited with a rate of around
13%%,against 13% in the
two preceding weeks. Independents are at a little over 15%.
compared
with
slightly below 15% in the previous week and 16% two
weeks ago.
At this time last year the industry was running at 33%, U.
S. Steel being
at 35% and independents a fraction above 31%. Two years ago the aver
age was at 643 %, with U. S. Steel at 62% and independents a shade over
49%. In 1929 the industry was at above 90%, U. S. Steel being at 95%
and independents a fraction over 86%;in 1928 the average was better than
76%, with U. S. Steel at 80% and independents at 73%.
Further Developments Following Signing of Illinois
Miners' Wage Accord-Union Miners Warned to
Stop Picketing by John L. Lewis, President Union
Mine Workers of America-Many Mines ReopenTaylorville Mines Closed by Striking Union Miners.
Picketing by union miners who are opposed to permitting
work under the new Illinois wage agreement in the Springfield and Gillespie area (which was signed on August 10
when the official tally sheets of the miners' votes were
stolen) brought directions from John L. Lewis, President of
the United Mine Workers of America, "to comply with the
policy and laws of their organization or forfeit its protection."
It is learned from special accounts from Springfield, Ill.,
August 12 to the Chicago "Daily Tribune" of August 13,
which add:
Meanwhile operators of mines in this district were proceeding with plans
to resume work. The Peabody Coal Company has prepared five mines in
Springfield for resumption of work to-morrow. Panther Creek Mines, Inc..
owning five mines in the Springfield territory, intends to resume operation
at one of its shafts to-morrow.
Four Peabody mines in the Taylorville region were hoisting coal to-day
without molestation, according to Earl A. McClintock, district manager.
The Taylorville groups employ about 2,400 men.
President Lewis' message to the miners was in the form of a telegram to
each local union whose members have been picketing or who have not
reported for work.
Additional special accounts to the same paper quoted,
from Duquoin, Ill., August 12, said:
The Majestic mine here, owned by the Peabody Coal Company, employing 600 men, resumed operations to-day. The Gayle strip mine, employing 65 men, also has resumed. More than 500 men will go to work at
Union Colliery Company at Dowell Monday.
Miners employed at United Electric Coal Company strip mine west of
Duquoin, employing nearly 200 men, and at the Pyramid strip mine at
Pinckneyville, last night voted not to return to work.
Associated Press advices from Springfield, Ill., August 14
stated that rebellion increased to-day against the miners $5
basic wage agreement as union members massed in meetings
Volume 135
1241
Financial Chronicle
protesting the scale and threats of a state-wide strike were
made by dissenting miners. The advices as noted in the
Chicago "Daily Tribune" of Aug. 15 also said in part:
In our issue of August 13, page 1076 we referred to the
signing of the new wage accord.
Already 3,000 members of the Springfield sub-district have voted for a
strike, following similar action by miners at Belleville.
Other protest meetings were held over the state and several union men
advocated a march on Taylorville, where 2,000 men returned to work under
the new agreement.
Petitions were being circulated here asking for a state convention of union
men to consider the wage situation anew.
In Springfield pickets opposing the wage agreement flanked the plants,
and so far miners have not appeared for work. Nine locals here opposed
the return to work.
Gradual Upward Trend in Production of Bituminous
Coal and Pennsylvania Anthracite Halted.
According to the United States Bureau of Mines, Department of Commerce, there were pr..Auced during the week
ended Aug.6 1932 a total of 4,465,000 net tons of bituminous
coal as against 4,637,000 tons in preceding week, 4,400,000
tons in the week ended July 23 1932 and 6,802,000 tons in
the week ended Aug. 8 1931. Pennsylvania anthracite
produced during th3 week ended Aug. 6 1932 amounted to
760,000 net tons as compared with 1,048,000 tons during
the previous week, 706,000 tons during the week ended
July 23 1932 and 796,000 tons during the week ended
Aug. 8 1931.
During the calendar year to Aug. 6 1932 production of
bituminous coal totaled 166,806,000 net tons as against
225,478,000 tons during the corresponding period last year,
while anthracite output amounted to 27,943,000 tons as
compared with 36,370,000 tons during the calendar year to
Aug. 8 1931. The Bureau's statement follows:
Like a city under martial law, Taylorville, Ill., a community of 8,000 looked over far flung barricades to-night
and waited for the promised "march on Taylorville" of striking coal miners from Springfield and southern Illinois says
Associated Press advices from Taylorville, August 15, which
add in part:
Within the rough barricades of tractors, trucks and farm machinery,four
big mines of the Peabody Coal Company were hoisting coal at capacity.
More than 8,000 diggers were below to-day-2,000 diggers whom the strikers seek to enlist in their movement against the new $5 wage contract.
Nowhere, however, was any movement toward Taylorville reported. At
Springfield pickets stood at entrances of all mines. All the shafts were
ready for work but no diggers could be found who would go into the tunnels.
Report 22 Mines Working.
Despite the strike movement 22 mines were reported working in Illinois
to-day in a survey made by the Illinois Coal Operators' Association. Among
them were the Orient Miners No. 1 and No. 2 in Franklin County, the
largest coal properties in the world. Coal was hoisted with full crews.
No accurate statistics were available on the number of men at work,
but estimates placed it at 10,000.
A miss meeting of miners in the Belleville subdistrict voted
to-day to strike "until an honest referendum" is held on the
new wage scale proposal, says Associated Press ad vices from
Bellevilie, Ill., August 15, adding:
About 800 of the 6,000 miners in the sub-district have been working.
The miners voted to send a delegation to-morrow to the Moffat mine at
Sparta, in an adjoining sub-district, to endeavor "by peaceable means" to
get the miners there to cease work.
On August 15, special advices from Duquoin, Ill., to the
Chicago "Daily Tribune" said:
Conditions among the mines in this sub-district embracing Perry. Jackson,
Randolph and Marion Counties are becoming normal. The mine of the
Union Colliery & Co., of Dowell, resumed operations to-day with more
than 500 men. Majestic mine in Duquoin with more than 600 is Working
as are Gayle and Perfection strip mines. United Electric Coal Company
strip here, and Pyramid strip at Pinckneyville still are idle as result of a
refusal of men to accept the new scale.
Coal miners in the Taylorville region, according to special
advices from that place on August 16, to the Chicago "Daily
Tribune" held stubbornly to their work to-day despite an
impending invasion by several thousand strikers which is
scheduled for Thursday noon.
At Springfield, continue the advices, which is about
27 miles away, fully 4,009 miners from Springfield, Gillespie
and Belleville who protest acceptance of the new $5 per day
basic wage scale decided 'that they would make an unarmed
advance upon Taylorville 'Thursday. The advices continuing add in part:
They will attempt to convince about 1.500 men now working the four
Peabody mines at capacity that they should cease labor until new negotiations with the mine operators for a higher wage are completed.
It is anticipated that a group of the strikers will attempt to gain an
audience with Governor Emmerson to-morrow to request that barricades
blocking two main highways to Taylorville be removed. Such a committee
attempted to see Mr. Emmerson to-day but was told he was ill and not
able to receive them.
Another possibility is that a group of the strike leaders will be on hand
at the pit mouths of the mines here to-morrow morning, when the workers
go down to labor, to attempt to dissuade them.
At Benld August 14 about 10,000 miners from all over the state met and
agreed not to work under the new scale. This report was carried to the
meeting to-day-which was more or less of a rump convention-of district
No. 4, which has a membership slightly in excess of 6.000.
Taylorville is ready, but it is not courting trouble. It hopes that the
miners will be allowed to work unhindered after months of inactivity.
The mines are virtually the economic blood of the community and the
citizens seem determined to see that they remain open.
"The Taylorville miners ratified the $5 scale by a vote of almost two to
one and they feel this entitled them to earn a living if they choose," Mayor
Cud Wilkinson said on August 16.
Three hundred miners at the East Galesburg mine went
on strike to-day in protest against the new $5 scale, says
advices from Galesburg, Ill., August 16 to the Chicago
"Daily Tribune." The men have been working part time
all summer at the old $6.10 rate. Mine owners said no
attempt would be made to operate with nonunion help.
According to Associated Press advices from Taylorville,
Ill., Aug. 19, 10,000 or more striking union coal miners
stopped all mining operations in this area to-day and leaders
announced they planned to spread over southern Illinois and
continue their campaign. The advices add:
More than 2,000 miners protesting a reduced wage scale picketed Peabody
Coal Company mines near Taylorville. Only a few employes appeared for
work and they turned away without attempting to enter the mines.
Illinois National Guardsmen were held in readiness to move into the
picketing zone, but there were few reports of violence. Fifteen hundred
special deputy sheriffs did not interfere with the strikers' movements.
State pollee were directing traffic on congested highways.
W. C. Argust, Superintendent of Peabody Mines in the Taylorville area,
said no attempt would be made to open the mines "until conditions are
changed."
He charged that strikers attacked and beat a guard and another employe
this morning as they reported for work at Mine No. 9.
Production of bituminous coal declined slightly during the week ended
Aug. 6 1932, halting the gradually upward trend which has been apparent
since the Fourth of July. The total output during the week of Aug. 6 is
estimated at 4,465,000 net tons, a decrease of 172,000 tons, or 3.7%,from
the preceding week. Production during the week in 1931 corresponding
with that of Aug. 6 amounted to 6,802,000 net tons.
Anthracite production in Pennsylvania during the week ended Aug. 6
is estimated at 760,000 net tons, a decrease of 288,000 tons, or 27.5%.
from the preceding week, when output was the highest since April. Production of anthracite during the week in 1931 corresponding with that of
Aug. 6 amounted to 796,000 tons.
The total production of beehive coke during the week ended Aug. 6 is
estimated at 8,100 net tons. This compares with 8.400 tons In the preweek and 15,900 tons produced during the week ended Aug. 8 1931.
ESTIMATED UNITED STATES PRODUCTION OF COAL AND BEEHIVE
COKE (Net Tons).
Week Ended
Calendar Year to Date
Aug.6'32cVly30'32d Aug.8'31
1932.
1
1931.
1
1929.
Milan. Coal aI
Weekly total-- 4,465,00014,637,000 6,802,000166,806,000 225,478,000 307.321.000
900.000 1.216,000, 1.658,000
Daily average-- 744.000 773,000 1,134,000
Pa. Anthracite b
760,0001.048,000 796,000 27,943.000 36,370,000I 41.178.000
Weekly total_ _
152,300
198,200,
224,400
Daily average-- 126,700 174,700 132,700
Beehive Coke' I
449.0001
852,900 4,160.800
8,100
8,400 15.900
Weekly total_ 1,400
2.650
2.401
4.561'
22.250
1.350
Daily average _
a Includes lignite, coal made into coke, local sales and colliery fuel. b Includes
Sullivan County, washery and dredge coal, local sales and colliery fuel. c Subject
to revision. d Revised.
ESTIMATED WEEKLY PRODUCTION OF COAL BY STATES (Net Tons).
Stale.
July 30
July 23
Aug. 1
Aug. 2
1932.
1932.
1931.
1930.
July 1923
Acerage.a
130,000
118,000
196,000
257,000
389,000
57,000
73,000
74,000
16.000
10.000
Arkansas and Oklahoma
42,000
79,000
116,000
165,000
56,000
Colorado
174,000
735,000
849,000 1,268.000
192,000
Illinois
163,000
143.000
209,000
241,000
451,000
Indiana
46,000
57,000
44,000
52.000
Iowa
87.000
89,000
96.000
134,000
Kansas and Missouri
73,000
84,000
442,000
449,000
636,000
683.000
735.000
Kentucky-Eastern
204,000
124,000
190.000
202.000
227,000
Western
45,000
42,000
17,000
16,000
30,000
Maryland
11.000
17,000
2,000
2.000
1,000
Michigan
16.000
12,000
28,000
41.000
41,000
Montana
52,000
22,000
33.000
New Mexico
16.000
13,000
14,000
11.000
12,000
9,000
19,000
North Dakota
393.000
854,000
160.000
428,000
Ohio
167,000
Pennsylvania (bituminous) 1,246,000 1,178.000 1,801.000 2,205,000 3,680,000
113,000
68,000
87,000
42,000
47,000
Tennessee
23,000
15.000
Texas
25,000
11,000
10,000
44,000
87,000
31,000
Utah
21.000
19,000
239.000
176,000
181.000
140.000
129.000
Virginia
37,000
31.000
15.000
23,000
Washington
20,000
West Virginia-Southern b 1,185,000 1.101,000 1.499,000 1,800,000 1,519.000
530,000
866,000
424.000
Northern c
356,000
357.000
106,000
115,000
68.000
41,000
47.000
Wyoming
3,000
4,000
2,000
0,000
Other States
2.000
Alabama
Total bituminous coal
4,637,000 4,400 000 6,812,000 8,093.000 11,208,000
Pennsylvania anthracite_ _ 1,048,000
706.000 1,287,000 1,284,000 1,950,000
•rnt,.1 .11 rnal
A eon am a lile non a nue non 0 377 non la_IAR IMO
a Average weekly rate for the entire month. b Includes operations on the N.&
W., C. & 0., Virginian, K.& M.and B. C.& G. c Rest of State, incl. Panhandle.
July Anthracite Shipments Higher Than in June,
but Continues Below Corresponding Period Last
Year.
Shipments of anthracite for the month of July 1932, as
reported to the Anthracite Bureau of Information, Philadelphia, amounted to 2,480,024 gross tons. This is an increase as compared with shipments during the preceding
month of June of 491,764 tons, and when compared with
July 1931 shows a decrease of 608,646 tons. Shipments by
originating carriers are as follows:
hfunlit ofReading Company
Lehigh Valley RR
Central RR. of New Jersey
Delaware Lackawanna & West. RR
Delaware & Hudson RR. Corp
Pennsylvania RR
Erie RR
N. Y. Ontario & Western RV
Lehigh & New England RR
Total
July 1932. June 1932. July 1931. June 1931.
514.656
346.458
220,178
315,582
289.370
272.555
272,634
119,742
128.849
2,480,024
765,500
464.837
240.597
348,516
335,439
320.805
299,974
191,005
121,997
708,847
545.900
343.008
457,484
448.547
346,794
349,848
198,859
151,925
1,988,260 3,088.670
3.551.212
391,093
295,383
167,049
218,867
215,190
243,924
236,903
128.234
91,617
1242
Financial Chronicle
Aug. 20 1932
Current Events and Discussions
The Week with the Federal Reserve Banks.
The daily average volume of Federal Reserve bank credit
outstanding during the week ending Aug. 17, as reported
by the Federal Reserve banks, was $2,352,000,000, a decrease of $24,000,000 compared with the preceding week and
an increase of $1,237,000,000 compared with the corresponding week of 1931. After noting these facts, the Federal
Reserve Board proceeds as follows:
On Aug. 17 total Reserve Bank credit amounted to $2,344,000,000, a
decrease of $13,000,000 for the week. This decrease corresponds with a
decrease of$1,000,000 in money in circulation and an increase of $41,000,000
In monetary gold stock, offset in part by an increase of 318.000.000 in
member bank reserve balances and a decrease of $11,000,000 in Treasury
currency, adjusted.
Holdings of discounted bills increased $4,000,000 at the Federal Reserve
Bank of Atlanta. and decreased $3,000,000 at New York and $9,000,000
at all Federal Reserve banks. The System's holdings of bills bought in
open market declined $3,000,000 and of Treasury certificates and bills
$18,000,000, while holdings of United States Treasury notes increased
$18,000,000.
Beginning with the statement of May 28 1930, the text
accompanying the weekly condition statement of the Federal
Reserve banks was changed to show the amount of Reserve
bank credit outstanding and certain other items not included
in the condition statement, such as monetary gold stocks
and money in circulation. The Federal Reserve Board's explanation of the changes, together with the definition of the
different items, was published in the May 31 1930 issue of
the "Chronicle," on page 3797.
The statement in full for the week ended Aug. 17, in
comparison with the preceding week and with the corresponding date last year, will be found on subsequent pages,
namely, pages 1291 and 1292.
Changes in the amount of Reserve bank credit outstanding and in related items during the week and the year ending
Aug. 17 1932 were as follows:
Bills discounted
Bills bought
U. S. Government securities
Other Reserve Bank credit
Increase (+) or Decrease (—)
Since
Aug. 17 1932. Aug. 10 1932. Aug. 19 1931.
$
$
8
443,000,000
—9,000,000 +212.000,000
36.000,000
—3.000,000 —119,000.000
+1,123.000,000
1,851,000,000
—13,000,000
—1,000,000
14,000,000
TOTAL RES'VE BANK CREDIT 2,344,000,000 —13,000,000 +1,203,000,000
Monetary gold stock
4 046.000,000 +41,000,000 —937.000,000
Treasury currency adjusted
+17.000.000
1,788,000.000 —11,000.000
Money In circulation
5,706,000,000
Member bank reserve balances
2,080,000,000
Unexpended capital funds, non-member deposits, gm
392,000,000
—1,000,000
+18,000,000
+754,000,000
—302,000,000
—169,000,000
Returns of Member Banks in New York City and
Chicago—Brokers' Loans.
Beginning with the returns for June 29 1927, the Federal Reserve Board also commenced to give out the figures
of the member banks in New York City, as well as those
in Chicago, on Thursday, simultaneously with the figures
for the Reserve banks themselves and for the same week,
instead of waiting until the following Monday, before
which time the statistics covering the entire body of reporting member banks in the different cities included cannot
be got ready.
Below is the statement for the New York City member
banks and that for the Chicago member banks, for the
current week, as thus issued in advance of the full statement of the member banks, which latter will not be available
until the coming Monday. The New York City statement,
of course, also includes the brokers' loans of reporting member banks. The grand aggregate of brokers' loans the present week records a decrease of $1,000,000, the total of these
loans on Aug. 17 1932 standing at $344,000,000, as compared with $331,000,000 on July 27 1932, the low record
for all time since these loans have been first compiled in
1917. Loans "for own account" and loans "for account
of out-of-town banks" remain unchanged from last week at
$320,000,000 and $17,000,000, respectively, while loans
"for account of others" decreased from $8,000,000 to
$ ,000,000.
CONDITION OF WEEKLY REPORTING MEMBER BANKS IN CENTRAL
RESERVE CITIES.
New York.
Aug. 17 1932. Aug. 10 1932. Aug. 19 1931.
Loans and investments—total
6 501,000,000 6,515,000.000 7.503,000,000
Loans—total
3 482,000,000 3,493,000,000 4,982.000.000
On securities
All other
1,662,000.000 1,672,000,000 2,622,000,000
1 820,000,000 1,821,000,000 2,360,000,000
Aug. 17 1932. Aug. 10 1932. Aug. 19 1931.
x
$
$
3 019,000,000 3,022,000.000 2,581.000,000
Investments—total
U. S. Government securities
Other securities
2 073,000,000 2,065,000,000 1.563,000,000
946,000.000 957,000,000 1,018,000,000
Reserve with Federal Reserve Bank_ —
Cash in vault
789,000.000
37,000,000
782,000,000
39,000,000
836,000,000
48,000,000
Net demand deposits
Time deposits
Government deposits
4.957.000,000 4,953,000,000 5.805,000,000
827.000,000 820,000,000 1,113,000,000
16.000,000
112,000,000 136.000,000
Due from banks
Due to banks
81,000,000
88,000.000
72,000,000
1,157,000,000 1,149,000,000 1,102.000,000
Borrowings from Federal Reserve Sank_
Loans on secur. to brokers & dealers
For own account
320,000,000
For account of out-of-town banks__ _
17,000,000
For account of others
7,000.000
Total
On demand
On time
Loans and Investments—total
344,000,000
320,000,000
17.000,000
8.000,000
950,000,000
228,000,000
165,000,000
345.000,000 1,343,000.000
247,000.000 251,000,000 945,000.000
97,000,000
94.000,000 398,000,000
Chicago.
1 254,000,000 1.267,000,000 1,794,000,000
Loans—total
On securities
All other
Investments—total
870,000,000
879,000,000 1,247,000,000
498,000.000
372.000,000
505,000,000
374.000,000
729,000,000
618,000,000
384.000,000
388,000,000
547,000,000
213,000.000
171,000.000
218,000,000
170,000,000
314,000,000
233,000,000
Reserve with Federal Reserve Bank__ -- 186,000,000
Cash in vault
16,000,000
181.000,000
17,000,000
178,000,000
14,000,000
Net demand deposits
Time deposits
Government deposits
803,000,000
334,000.000
10,000,000
803,000,000 1,172,000,000
337.000,000 533,000,000
11,000,000
4,000,000
Due from banks
Due to banks
184,000,000
243,000,000
188,000.000
237,000,000
176,000,000
299,000,000
5,000,000
5,000,000
1,000,000
U.S. Government securities
Other securities
Borrowings from Federal Reserve Bank_
Complete Returns of the Member Banks of the Federal
Reserve System for the Preceding Week.
As explained above, the statements for the New York
and Chicago member banks are now given out on Thursday,
simultaneously with the figures for the Reserve banks themselves and covering the same week, instead of being held
until the following Monday, before which time the statistics
covering the entire body of reporting member banks in
101 cities cannot be got ready.
In the following will be found the comments of the Federal
Reserve Board respecting the returns of the entire body of
reporting member banks of the Federal Reserve System for
the week ended with the close of business on Aug. 10:
The Federal Reserve Board's condition statement of weekly reporting
member banks in leading cities on Aug. 10 shows decreases for the week
of $74,000,000 in loans and investments, $57,000,000 in Government
deposits and $25,000,000 in borrowings from Federal Reserve banks, and
increases of $43,000,000 in net demand deposits, $26,000.000 in time
deposits and $60,000.000 in reserve balances with Federal Reserve banks.
Loans on securities declined 89,000.000 in the Boston district and 822.000,000 at all reporting member banks. "All other" loans declined $12.000.000 in the New York district and $16,000,000 at all reporting banks.
Holdings of United States Government securities increased $19,000.000
In the Boston district, and declined $22,000,000 in the New York district
and $6,000,000 at all reporting banks. Holdings of other securities declined $12,000.000 each in the New York and Boston districts and $30,000,000 at all reporting banks.
Borrowings of weekly reporting member banks from Federal Reserve
banks aggregated $163.000,000 on Aug. 10, the principal changes for the
week being a decrease of $8,000.000 at the Federal Reserve Bank of San
Francisco and of $5,000,000 at Atlanta.
A summary of the principal assets and liabilities of weekly reporting
member banks, together with changes during the week and the year ending
Aug. 10 1932, follows:
Increase 1+) or Decrease (—)
Since
Aug. 10 1932. Aug. 3 1932.
Aug. 12 1931.
Loans and Investments—tots —18,622,000,000
—74,000,000 —3,453,000,000
Loans—tota
10,958,000,000
—38,000,000 —3,384,000,000
4,609,000.000
6,349,000,000
—22,000,000 —1,870,000,000
—16,000,000 —1.514,000,000
7,664,000,000
—36.000,000
—69,000,000
U.S. Government securities— _ 4.482.000,000
Other securities
3,182,000,000
—6.000,000
—30,000,000
+413,000,000
—482,000,000
+60,000,000
+6,000,000
—203.000,000
—25,000,000
On securities
All other
Investments—total
Reserve with F. R. banks
Cash in vault
Net demand deposits
Time deposits
r)overnment deposits
Due from banks
Due to banks
Borrowings from F. R. banks
1.618,000.000
208,000,000
10,794,000,000
5,638,000,000
304,000.000
+43,000,000 —2,501,000.000
+26,000,000 —1,467,000,000
—57,000,000 +229,000,000
1.240.000,000
2,713,000,000
+23,000,000
+28,000,000
—237,000.000
—630,000,000
163,000,000
—25.000,000
1107,000,000
Death of Junius Spencer Morgan, Cousin
of J. P. Morgan.
According to Associated Press advices from abroad, Junius
Spencer Morgan, cousin of J. P. Morgan, died in Switzer-
Volume 135
Financial Chronicle
land on Aug. 17. He was sixty-six years of age. It was
stated that the body would be taken to Paris, where funeral
services would be held, and then to the United States
for burial. It was further said:
Although Mr. Morgan had been ill for some time, he had shown some
Improvement recently and went to Switzerland to convalesce.
He had been a member of the American colony at Paris for more than
thirty years.
Besides his Paris residence he had others in New York and Princeton,
N. J. He retired in 1906 from partnership in the banking firm of Cuyler,
Morgan & Co. and devoted himself to the collection of art objects and
antiques.
Junius Spencer Morgan was born at Irvington, N. Y.
His mother, Sarah Spencer Morgan, a sister of the late
J. Pierpont Morgan married George H. Morgan, a distant
relative.
Canada Is Warned United States Branch Plants Will
Leave Dominion If "Empire Content" Ratio Is
Raised—Large Losses Pointed Out—Spokesmen
Declare Production Costs Are Found Higher in
the Dominion.
Under date of Aug. 13 a dispatch from Ottawa to the New
York "Times' said:
Representatives of United States business interests operating in Canada
have warned the Canadians that fully half of the more than 1,000 American
branch plants in the Dominion will leave Canada if the reported recommendation of the Empire Content Committee of the Imperial Economic Conference is adopted and put into effect.
The recommendation concerns the raising of the Empire quota of material and labor on commodities produced in Empire states BS a qualification
for Imperial preference. Under the reported recommendation, the Empire
content quota would be raised to 75%. The proposed increase would be
gradual, the scale reported to have been recommended providing for an
Increase to 60% above the present quota immediately, to 662-3% next
year, and to 75% in 1934. The present quotas range from 25% in the
United Kingdom to 50% in Canada and 75% on some commodities in other
dominions. The proposal is to make the quota uniform throughout the
Empire.
Canadians Sought Increase.
The Canadian delegation has taken the lead at the Conference in pressincrease.
As
the
for
United States business interests here see it, the
ing
Canadian policy aims to compel United States branch plants to use more
Canadian material and labor and to extend their investments in Canada
if they are to enjoy the Canadian and Empire markets.
From reliable sources it was learned to-day, that United States business
interests have openly told the Canadians that the adoption of the plan
would not only mean that fully 500 of the United States plants would
leave Canada, but that the measure would kill all prospects for extension
of such branch plants in the Dominion.
While some of the large automobile establishments have found their business in Canada profitable, it is pointed out that 75% of the branch plants
are operating at a loss because of the limitations of the Canadian market.
Only 15% of the branch plants are doing business with other dominions.
Production Costs Higher.
The spokesmen of United States business interests contend that they
have been disappointed to find that production costs are higher in Canada
and that the selling cost is likewise above that across the border because
of lack of density of population. United States interests complain also that
Canadian duties on parts and supplies brought from the United States
have added greatly to the production costs in some cases as much as 30%.
Figures compiled by representatives of United States branch plants
show that more than 60% of these plants find their manufacturing costs
in Canada higher than in the United States, with a consequent higher price
for the Canadian buyer.
The spokesmen in question maintain that neither Canada nor the United
States has derived any benefit from the present situation and that Canada's
aim to force United States Branch plants to produce more for Canada
and the other dominions by increasing the Empire content is bound to prove
illusory.
Unity on Fixed Exchanges Urged in Report at Ottawa
Imperial Economic Conference—A. De V. Leigh
Says Clearing House Would Aid Empire Trade—
No Gold Would Be Shipped—Nations Would
Balance Credits for Their Exports with Imports
from the Others.
The establishment of a clearing house of imperial settlements as an instrument for "creating an area of stability
among countries regulating their currencies in relation to
sterling—the phrase used by the monetary committee ot
the Imperial Economic Conference in its report on Aug. 12
—was foreseen at Ottawa on Aug. 13 by financial experts
after study of the repot t, said a dispatch to the Now York
"Times" from Ottawa, from which we also quote:
The function of such a clearing house, they declared, would also be
to contribute to the second purpose indicated by the committee as desirable
--avoiding wide day-to-day fluctuations between sterling and gold."
American observers watching the proceedings of the conference likewise were inclined to the view that a clearing house of inter-Imperial settlements would be established by the nations of the British Commonwealth
as their contribution to world stablization. But they believe no action
will be taken pending the forthcoming World Economic Conference and the
completion of technical arrangements in some of the dominions which
lack central banking machinery or require its improvement.
It was further indicated that the Scandinavian countries, the United
States and South American republics would be invited to participate in the
work of the clearing house to the extent of their business relations with
the member States of the British Commonwealth.
As explained by A. De V. Leigh, a British financial expert, who presented a report on the matter for consideration by the monetary corn-
1243
mittee, the proposal is that all the countries participating should send
their respective central banks into the new clearing house with the aim
of working to fixed exchanges. These could be fixed at the old gold parity,
at the rate which ruled over a given period or at any other ratio which might
be determined on by agreement.
The important point would be that, having once agreed upon the relative values, they ought not to be changed.
The clearing house would in no sense be a parent international bank.
It would merely be a common meeting place or exchange for the transaction of business between the respective central banks of the participating
countries, which would meet there on absolutely equal terms. Moreover,
the participating countries would not be working to a sterling standard.
The mark, the peso, the kroner and the rest would come in on equal terms
at their fixed ratios with the dollar or the pound.
The practice of shipping bars of gold from one country to another would
be abandoned, all differences between the participating nations being
adjusted in the central bankers' clearing house. The objective of the
central banks would be to keep imports, visible and invisible, of their
respective countries equal to exports, visible and invisible. Comparatively
small and temporary balances, whether favorable or unfavorable, would
be dealt with as book entices.
Contrary to what happened under the international gold standard, the
punishment which would follow accumulation of favorable or unfavorable
balances would fall first on the offending nation.
The purpose of the proposal, as explained by Mr. Leigh, is to insure in
each nation the maintenance of a general price level which would keep
Its equilibrium with the rest. Each nation would acquire money credits
in the other participating nations from its sales. It would be unable
to take out gold because gold would not be used for the settlement of international balances except in the clearing house in the adjustment of temporary balances.
A nation would be unable to use credits to knock down exchanges because exchanges would be fixed; it could, therefore, take them out only
in goods and services, but it would not wish to do so so long as its own
general price level was lower than those of the nations to which it was
selling. Unless, therefore, it raised its general price level to a point where
it could once more profitably take these credits out in goods and services,
it would suffer a serious loss in export trade.
This, Mr. Leigh maintains, would stimulate the tendency of nations to
level up and not, as at present, for nations to level down. He considers
this vital in the raising of commodity values as an essential factor in world
rehabilitation. The system, Mr. Leigh maintains, could be extended to
any other nations who would be willing to join.
Mr. Leigh is Secretary of the London Chamber of Commerce, which
has endorsed his proposal.
Dr. T. E. Gregory of London Urges World Return to
Gold Basis—Before Politics Institute at Williamstown, Mass. Holds Common Standard Will Contribute to Recovery—Prof. J. H. Williams of
Harvard Likewise Sees Recovery Through International Gold Standard—Latter N. iews Debt Reduction Necessary Incident to Progress.
Permanent economic recovery must be sought in a universal return to the international gold standard, said Professor John Henry Williams of Harvard and Dr. T. E.
Gregory of the London School of Economics at the Institute
of Politics at Williamstown, Mass., on Aug. 15. According
to Associated Press accounts from Williamstown, Professor
Williams said suspension of the standard has "provided a
fertile field for the growth of nationalistic commercial policies, including prohibitive tariff barriers raised against the
influx of goods from depreciated currency countries, and
foreign exchange restrictions ruinous to world trade." The
Associated Press further said:
If war debts are reduced "and some of the abnormalities of international
trade thereby removed," he declared, leading Central Banks of the world
should be able through "intelligent co-operation" to establish and maintain
a stable monetary standard.
Though agreeing with Williams that a universal return to the gold standard is vital to recovery, Gregory stressed the need for recognizing and overcoming difficulties in the way of return.
The most important problem, he indicated, was the "possible increase
in the volume of gold hoarding by Central Banks as a result of their
experiences in recent years."
His solution was;
(a) A greater readiness of Central Banks to check booms;
(b) A willingness to use reserves freely at the moment withdrawals
threatened;
(c) Removal of all minimum ratios for reserve purposes.
The second difficulty of a general return to gold lay in choice of appropriate parities, Gregory said.
The third is the difficulties of co-operation by Central Banks due to
conflict of American, British and French views on conduct of gold standard.
The fourth, the "most urgent," is the "management of the international
short-loan fund, the Size of which at the present time is so great as very
easily to wreck the gold standard at a moment of panic."
The last difficulty mentioned by Gregory was reconciliation of debtors
to the gold standard, since debtors feel the standard makes the burden of
long-term indebtedness intolerable.
The real problem of the depression will occur, Gregory told a round-table
group, previous to the general conference, is when recovery begins to take
place. When money now hoarded is placed in circulation "inflation on a
very large scale might result," he said.
' From the Williamstown dispatch, Aug. 15, to the New
York "Herald Tribune" we quote the following regarding
the views presented by Professors Gregory and Williams:
Professor T. E. Gregory, granting that he was a heretic, as compared
with the more fashionable, if not the majority, of his fellow British economists, urged the importance of a return to the gold standard, and said he,
at least, was willing to stake his reputation on that stand. Professor
John H. Williams, of Harvard, took a similar position, and, while explaining
that there was no cure-all, said that one of the necessary paths out was
by way of drastic reduction of international debts.
1244
Finaacial Chronicle
Foreign Debts Dealt With.
While on the subject of foreign debts, Professor Gregory said it would
be a great mistake to write off the debts of the defaulting raw-material
countries, those of South America, for instance, as dead losses. The service •
on such loans would, doubtless, be resumed in due time, in many cases, but
there must be common sense readjustments. An interest of 7% or 71
/
2%
on a Chilean bond, for instance, was an economic impossibility in the
world's present state. Professor Williams called attention to Argentina's
experience with foreign bonds during the Baring Brothers panic a generation or so ago. Readjustments were made, and, eventually, Argentina met
her entire debt before it was due.
While discussing the "fashionable proposal to end the depression" by
"controlled reflation," Professor Gregory declared any such measure was
impossible without "a thundering Government deficit." You could not
balance your budget and at the same time bring about a rise in prices
through "controlledd reflation," that is to say, through inflation brought
about in a time of depression: It was a case of either one or the other.
You could not have both.
Williams Analyzes Depression.
In his analysis of the many causes of the d-pression, Pro`essor Williams
emphasized the financial interlocking which exists in the modern world as a
matter of fact, whether one accepts it theoretically or not. Scarcely a
measure could be taken which, either on its domestic, or its foreign, side,
did not have a more or less paradoxical, or contrary, reaction. When, a few
years ago, we tried to "push out" our surplus gold and succeeded, to some
extent, more gold than ever came rushing in to take advantage, for purposes of speculation, of the low interest rate.
Along with this interlocking, there has been, since the war, a great
increase in nationalistic policies, and a corresponding rigidity of the price
structure as a result of tariffs, quotas, trade licenses, and so on. France was
peculiarly an example of an insensitive financial structure which could
soak up any amount of gold without raising its internal prices.
Professor Williams emphasized, as did several of the speakers, the dangers
of the enormous short-term balances now held in various of the major countries. There were more than $8,000,000,000 of such balances in England,
the United States and Germany in 1929, all subject to sudden withdrawal for
reasons unconnected with underlying economic forces.
Gregory Backs Gold Basis.
Professor Gregory, in arguing for the gold standard, said there was no
prospect that France and the United States would abandon it voluntarily,
and that, therefore, as long as England remained off the gold standard the
world would be divided into two main currency groups. A common
standard of value was needed. The great advantage of the gold standard
was not that it was fool-proof, but that it was a standard which the ordinary,
practical business man could understand, and that if people did make fools
of themselves while under the gold standard, everybody knew about It.
He considered the various disadvantages alleged against the gold standard,
as well as the possibility that if there were a general return to the gold
standard, Central Banks might hoard gold, as a result of their experiences
in the last few years. Certainly Britain, he said, would have special difficulties in fixing the parity--rate on which to return. But he felt, nevertheless, that a general return to the gold standard, together with a "settled"
political Europe, were needed for the orderly functioning of currency
systems.
"Controlled Reflation" Discussed.
In speaking of the debts of the younger States, he said that some means
must be devised for them to "go bankrupt in respectible fashion." There
should be some tribunal to which they could come with a frank statement
of their condition and an appeal for reasonable relief.
Moreover, a lot of new thinking must be put into the problem of making
the gold standard "palatable to debtor States," which always were threatening to go off on the ground that it made long-term indebtedness intolerable.
In discussing "controlled reflation" in his round table, Professor Gregory
mentioned the illusory benefits to be obtained by returning to the 1929 price
level. Technical development already, he said, had tended to make many
normal prices lower than those of three years ago. To restore the prices
of 1929 certainly would not restore a proper balance in all industries.
And if the public once believed it was seriously determined to inflate
prices to a certain level and then "peg" them there, there would be a rush
to get out from under as soon as that level was approached, and the consequence would be a new slump.
In summing up his conclusions on the subject of "reflation." Professor
Gregory said there was no need to despair in the present situation and that
Americans, thus far, had held up their own recovery by "refusing to be a
little bit cheerful." There was enormous surplus purchasing power in the
world to-day, Professor Gregory said, and the real time to be worried possibly
was not so much the present as that future moment when this pent-up
purchasing power would be 'released and the public might again get
out of hand.
Geneva Calls Parley to Cut Working Hours--Labor
Organization Acts on Italy's Request in Attempt
to Reduce Unemployment.
The president of the governing body of the International
Labor Organization at Geneva on Aug. 12 called a special
meeting of that body for Sept. 21 to consider the convocation
of an emergency session of the International Labor Conference
to deal with unoloyment. A wireless message from Geneva
Aug. 12 to the New York "Times"from which this is learned,
further said:
This was done at the request of Giuseppe de Michelis, who represents the
Italian Government on the governing body.
The conference would discuss specifically how to effect immediately
a world-wide reduction of the length of the workday or week with a view to
Increasing employment.
Signor de Michelis stresses that unemployment is everywhere still increasing when seasonally it should be decreasing and predicts that the
social consequences will become "intolerable" this Winter if no international action is taken. He wants the conference held quickly so that its
conclus ons can be submitted to the world economic conference and says
that Italy opposes reducing wages with hours, her aim being to prevent
lowering the standard of living.
President Hoover's trend toward a similar solution and the desire he
expressed in his acceptance speech to preserve the American workman
from the competition of lower standards abroad encourage officials of
the Labor Office to hope that Washington will help extend the shorter
day or week to others by participating in the conference.
Aug. 20 1932
British Convert 88% 43! £2,036,977,268 War Loan.
The British Government revealed on Aug. 15 that the first,
or "cash bonus," stage of the operation to convert £2,086,977,258 worth of the 5% war loan bonds to a 33'% basis
had resulted in £1,850,000,000 ($6,447,000,000 at current
rates) being converted. A cablegram limn London, Aug. 15,
to the New York "Times" reporting this, went on to say:
This sum, equivalent to 88.6% of the whole 5% war loan, is that upon
which a cash bonus of one pound per cent is being paid and carries the
operation down to July 31.
The amount for which requests for payment in cash on Dec. 1 have been
received is £48,000,000. or only 2.3%. This leaves £1881977.258, the
fate of which must be decided by holders some time between now and the
end of December.
The res its are held here to have surpassed all expectations. Even if
not another cent were Converted, the Government, it is considered, would
have an easy task in raising on short terms the sum of £237,000,000, probably at less than 35.6%, which is all that would be necessary to satisfy the
demands for payment on Dec. 1.
The smallness of the amount for which repayment claims thus far have
been lodged—only L48.000.000-18 hardly less remarkable than the huge
total of the acceptances.
,Previous items regarding the conversion of the war loan
appeared in these columns July 2, page 38, and Aug. 6,
Page 896.
Neville Chamberlain, at Ottawa, Says Results of
British War Loan Conversions Exceed All
Expectations.
Neville Chamberlain, Chancellor of the British Exchequer,
who arranged the war loan conversion, said at Ottawa on
Aug. 15, according to a dispatch to the New York "Times":
The result exceeds all expectations. It more than justifies the confidence
I expressed in the House of C01111110118 in the common sense patriotism of our
people. A further great step has been taken toward revival of enterprise
and prosperity, and such a striking success will encourage the whole world.
Secretary Stimson Gratified by Premier Herriot's
Approval of This Country's Stand on BriandKellogg Pact.
Associated Press advices from Paris, Aug. 13, said:
Charge d'Affaires Norman Armour of the American Embassy sent to
Premier Herriot to-day a message from Secretary of State Stimson carrying
the Secretary's appreciation of the Premier's statement approving Mr.
Stimson's stand on the Briand-Kellogg Pact taken in his New York speech
last Monday.
"He has instructed me to say," Mr. Armour's message read,"how deeply
gratified he is that you approve his interpretation of the pact. He feels
confident this concurrence of views by the two nations which initiated the
act will help to insure that this great treaty will become and remain one
of the strong influences for maintaining peace in the world."
Premier Herriot of France in Statement Received at
Washington Expresses Appreciation of Secretary
Stimson's Interpretation of Kellogg-Briand Pact
for Renunciation of War.
A statement by Edouard Herriot, Premier of France,
expressing app eciation of the interpretation by Secretary
of State Stimson of the Kellogg-Briand pact for the renunciation of war, was received by the State Department at
Washington on Aug. 12 from the American Embassy at
Paris. The State Department's announcement follows:
Premier Herriot summoned the French press to his office at 7 o'clock last
night Aug. 111 to hear a communique expressing the French Government'
hearty approval of Secretary Stimson's interpretation of the Renege;
Briand Pact and indicating that his Government is prepared to examine
with others practical means of preventing violations of the Pact.
M. Herriot's communique in full text is as follows:
"I have studied the address of the Honorable Mr. Rimer] with interest,
enhanced by the fact that the Briand-Kellogg Pact for the Renunciation of
War is a French as well as an American contribution and furthermore because
since its adoption European opinion has not ceased to wish for its development. Now the French government is extremely receptive and favorable
to any move that might extend the authority of the Pact.
"In Mr. Stimson's most interesting speech I recognized the sincerity with
which the Secretary of State would interpret into the Pact its full force by
occasioning in the event of need a consultation. It is invaluable for us to
learn that in the view of the American statesman the Pact in Itself Implies
the need of consultation.
"With the stamp of his high moral authority the eminent Secretary has
not hesitated to engage the entire American people in the recognition of
this obligation.
Binding Effect on Signatories.
"France for her part firmly believes that it is important in the interests of
peace to interpret the Pact as a statement of good intention. She also—and
this is what causes her to appreciate so highly Mr. Stimson's declaration—
regards this Pact as a binding treaty. It is Indispensable that the Pact be
understood as binding the signatory nations without any exception other
than the right of legitimate defense and we are thankful to the United
States for proclaiming that they will not permit the value of a pact of such
high political and moral worth to be lost by limitation.
"Moreover as soon as I have had an opportunity to refer to the complete
and official text of Mr. Stimson's address I shall study it in the greatest
detail with the respect it merits.
'On our side we shall examine loyally and in the general interest what
course is best to pursue so that the solemn engagements of the Pact shall
not be violated.
"But without further delay I desire personally to state how much I have
been touched by the general inspiration of Mr. Stimson's address and by
his evident desire to conciliate that liberty of decision which is dear to him
with the necessity of a sincere international co-operation for the maintenance of peace
Volume 135
"When responsible men of good faith study with the same conscientiousness so grave a problem it is impossible that they do not have a serious
mind. That is why the government over which I preside, concerned as it is
with guaranteeing to all nations security in their development, accords so
much attention to the address pronounced by the Secretary of State of the
United States and wishes to thank him for it publicly."
Secretary Stimson's enunciation of policies under the
Pact was referred to in our issue of Aug. 13, page 1078.
Premier Herriot of France Sees Appeals to Violence
Despite Briand-Kellogg Pact-Wise People, He
Says, Remain Peaceful, but Vigilant-Address at
Opening of Moselle Canal.
At Metz (France) on Aug. 14, Premier Edouard Herriot
joined President Hoover in voicing France's hope for the
peace of the world, but firmly emphasized the point that
this nation-having "a cruel memory of the past"-must
provide guaranties against imprudence. Associated Press
accounts from which we quote, added:
Speaking at the inauguration of the Moselle Canal, not far from the scene
of historic battles of the World War, the Premier answered the recent
declarations of President Hoover and Henry L. Stimson, Secretary of
State. President Albert Lebrun and other officials were present.
"We wohld like to see war disappear forever," M. Herriot said in reference to Mr. Hoover's speech accepting the Presidential nomination, and
to Mr. Stimson's declarations regarding the Pact of Paris. "We hear the
voice of friendly nations assure us that wars have been forever banished.
We would like to believe that without hesitation; we would like to join in
their confidence and optimism, which is much more easily attained in a
country that is practically inviolate than on the soil of Lorraine, so often
torn by war.
"But despite the most solemn engagements, despite the Pact of Paris, to
which Mr. Stimson recently referred in such high terms, we see also appeals
to violence. We hear eulogies of war which we believed had been condemned
forever.
"Wise people remain forever peaceful, but vigilant. Mr. Hoover insisted
upon the necessity for maintaining the land and sea forces of the United
States at a sufficient level to prevent any foreign soldier from invading that
nation.
"Although firmly decided to develop all work for peace, and to participate
In all sincere efforts toward peace. France must guarantee against imprudence, having a cruel memory of the past."
President Lebrun, who motored from his farm home at Mercy le Haut,
where he is resting, said:
"France, although still resolved as ever to secure her own safety, owes it
to herself to play her traditional role of rapprochement between peoples."
The president opened the canal as he steamed along in a gunboat, accompanied by the Premier. The canal is intended for heavy industrial
hauling and also is an important link in the frontier defenses, which are a
mighty line of steel and concrete along the eastern border.
Such industrial centres as Metz and Thionville are connected by the
canal, which provides transport for important metals. It cost 200,000,000
franca (about $8.000,000), and originally was to have been paid for with
war reparations from Germany. It is 25 miles long and, being 33 feet wide,
permits the passage of 300-ton barges.
Stock Exchange Values-British Government's Plans
for Conversion Loan Brought Boom in High Class
Securities, According to London "Bankers'
Magazine."
From the London "Bankers' Magazine" for August we
take the following:
Concerning the Government's great scheme of conversion, one thing
be said with certainty, namely, that it had the Immediate effect of
creating a boom in all high-class securities and, indeed, in stimulating
activity throughout all the markets. Even Stock Exchange dealers, who
had for some time past been anticipating a big conversion loan, had scarcely
thought that the Government would attempt to convert on a 33-% basis,
and,therefore, the effect of the announcement was to occasion a phenomenal
rise in all long-dated securities, while almost every department of the
Stock Exchange received more or less of a stimulus and as a result our list
of representative securities shows almost a record advanc ,the appreciation
for the month on our list of 365 stocks being no less than E273,000,000.
the exact figures being as follows:
Aggregate value of 365 representative securities on June 20 1932-- _ £5,586,284,000
Aggregate value of 365 representative securities on July 20 1932_ ___ 5,859,540,000
can
£273,256,000
Increase
The heaviest advance was, of course, in fixed interest stocks, which
show a rise for the month of about £173,000,000. The 5% war loan itself
was, of course, scarcely affected, and inasmuch as that stock represents
a nominal capital value of over E2,000.000.000, the absence of any material
movement explains why the rise in British funds has not been even greater.
Corporation stocks, Colonial loans and even some of the prior charges of
English railways moved up sympathetically with British funds.
With the exception of English rails, which again dropped on unfavorable
traffics, and American railroads, which were affected by the dulness of
Wall Street and also by the unfavorable traffics, all the movements to
note in the variable dividend Hat are favorable, some of the more striking
features including a big jump in foreign railways and commercial and
industrial shares, while a very satisfactory movement was the sharp rally
in the shares of shipping companies. Iron. coal and steel shares and telegraphs and telephones were also materially higher for the month.
British bank shares have also been a strong feature, showing an all-round
rise of about 10%. and insurance shares rallied to the extent of nearly 7%.
In the purely speculative markets all the movements to note are favorable, oil shares appreciating by about 15%, while mining shares were all
higher for the month.
As a consequence of the groat rise of the past month, the whole of the
depreciation of the preceding months has now been wiped out, and so far
as our representative list is concerned we are practically back to the level
of last March, and, as will be seen from the index numbers at the end of
this article, we are well above the level of the commencement of the year.
So far as fixed interest securities are concerned, our present index number of
115.6 is the highest touched since November 1930. British funds are,
doubtless, at about high-water mark since our valuation was started, but
in the meantime there has been a considerable setback in some other fixed
1245
Financial Chronicle
Interest securities, such as foreign Government stocks and prior charges
of English railways. In the case of the variable dividend list it will be seen
that, in spite of last month's recovery, the present index number of 84.5
compares with 163.4 as recently as January 1929.
TABLE-SHOWING VALUE OF SECURITIES AND THEIR AGGREGATE
VARIATION DURING THE PAST MONTH (000s omitted).
Nominal
Amount
(Par
Value).
Market Values.
Department, Containing
June 20
1932.
July 20
1932.
Change
on
the
Month.
Ineese
or Decrease.
Per Ct.
£
£
£
£
3,411,428 3,525,587 +114,159 +3.3
3,566.600 10 British and Indian funds
53,258 +5,486 +11.5
47,772
58,950 9 Corporation (U. K.) stocks
78,938 +9,845 +14.2
69,093
83,550 8 Colonial Government stocks-21.680 +1.008 +5.0
20,672
22,300 8 Corporation stocks (Colonial)
8,665
+458 +5.5
8,207
21,050 7 do do (foreign)
199,371 210,568 +11,197 +5.6
598,230 26 Foreign Government stocks
*254,655 6 British railway deben. stocks_ 187,839 212,261 +24,422 +13.0
82,494 +3,563 +4.5
78,931
*310,765 6 do do preference stocks_
132,000 7 United States bonds (gold) _ _ 140,785 143,415 +2,630 +1.8
5.048,100 87 Fixed Interest stocks
*315,325
18,900
88,350
474,000
141,200
59,685
43,000
18,121
17,750
146,916
9,537
15.100
30,680
9,343
58,294
3,100
42,649
5,402
17,456
1,890
20,808
27,716
29,517
28,735
11.859
13 British railway ordinary stocks
5 Indian railway stocks
5 Colonial railways
11 United States railway shares_
20 Foreign railways
13 British bank shares
18 Colonial & for'n bank shares_
10 Brewery stocks
7 Canals and docks
38 Commercia) & Industrial shs_
8 Electric lighting and power_ _
9 Financial, land & invest. shs_
7055 stocks
17 Insurance shares
14 Iron, coal and steel shares.5 Nitrate shares
10 OH shares
9 Rubber shares
5 Shipping shares
6 Tea shares
9 Telegraphs and telephones7 Tramways and omnibus
19 South African mines
6 Copper mining shares
7 Miscellaneous mining shares_
*1,635,333 278 Variable dividend securities
4 164,098 4.336,866 +172,768 +4.1
-44 -0.1
31.311
31,355
22.463 +1.137 +5.3
21,326
109.315 112.411 +3.096 +2.8
111,765 102,745 -9,020 -8.0
24,018 +4,634 +24.0
19,384
171,340 189,121 +17,781 +10.3
58,724 +7,491 +14.6
51,233
59.889 +2,061 +3.5
57,828
24,734 +1,157 +4.9
23,577
332,554 368,107 +35,553 +10.6
+543 +2.6
21,524
20,981
+84 +0.8
10.662
10,578
31,898 +1.818 +6.0
30,080
162,230 173,019 +10,789 +6.6
24,824 +2,111 +9.3
22,713
328
328
84,495 +11,228 +15.3
73,267
+505 +38.8
1,323
1,828
14.576 +1.128 +8.4
13,448
+237 +5.2
4,748
4.511
30,062 +2.513 +9.1
27,549
+233 +0.5
42,393
42,160
73,295 +4.539 +6.6
68,756
+591 +5.8
10,757
10,166
+323 +7.3
4,742
4.419
1,422,186 1,522,674 +100,488 +7.0
5.586.284 5.859.540 +273.256 +4.9
*6 MX 433 365 Grand totals
• List of railway stocks revised as from the beginning of 1923 and column for
normal par value and also the December valuation column adjusted accordingly.
Funds Received For Sept. 1 Payments on Bonds of City
of Duesseldorf and Saarbruecken Mortgage Bonds.
Ames, Emerich & Co. announce receipt of funds to pay
bonds maturing Sept. 1 1932 of the City of Duesseldorf 7% issue, together with coupons maturing the same date
on these bonds. Funds have also been received to pay
coupons maturing Sept. 1 1932 on the Saarbruecken Mortgage Bank 6% Series "A" bonds.
Italy Buying Gold-In Market for Tickets Delivered
by Pawnships Against Jewelry.
The following is from the New York "Evening Post"
of Aug. 13:
The Bank of Italy has published a notice informing the Italian public
the State pawn.
of its readiness to buy tickets which have been delivered by
shops against gold objects.
gold objects
sell
to
public
the
to
made
appeal
This follows the recent
indirect to the Central Bank. Gold reserves of the Bank are steadily
creasing, amounting to 5,700,000,000 lire on July 31, compared with
increased
has
5.372.000.000 a year ago, while ratio of gold to circulation
to 42% from 37%•
Augusto Rosso Named as Italian Ambassador to United
States-Other Changes in Italy's Diplomatic Service.
Augusto Rosso, Director General of the League of Nations
affairs at the Foreign Ministry, was named Ambassador to
Washington on August 12 in what is termed "a far-reaching
shake-up of the diplomatic service by Premier Mussolini."
Associated Press advices from Rome on Aug.12 added:
The principal other appointments were that of Mario Arlotta, minister
at Budapest, as Ambassador to Argentina and Raffaele Guariglia director
of political and commercial affairs for Europe and the Near East, is Ambassador to Spain.
Count Pignatti, Ambassador to Argentina, was transferred to Paris and
Orazio Pedrazzi, minister at Prague, was made Ambassador to Chile.
Guido Rocco, who accompanied Dino Grand' to the United States, was
named Minister to Crechoslovakia.
Grandi, formerly the Foreign Minister, already has been appointed Nnbassador to Great Britain.
Signor Rosso occupied a minor post in the Embassy at Washington in
1910 and was counselor to the Embassy in 1922.
Other changes transferred Count Delfino Rogeri Di Villanova, now at
Ottawa, to Mex;co ; Vittorio Bianchi, now at Zurich, to Lima, Peru, as
Minister; Serafino Mazzolini, now at Sao Paulo, Brazil, to Montevideo,
Uruguay, as Minister; Roberto Cantalupo, now at Cairo to Rio De Janeiro,
as Ambassador. Vittorio Cerruti, now at Rio De Janeiro, is transferred to
Berlin.
The shake-up affects all the largest European capitals except Moscow.
It includes 22 transfers and many promotions.
Five ambassadors, those at Washington, Paris, Berlin, Warsaw and
Madrid, are retired. Antonio Cavicchioni, new minister to Venezuela, was
promoted from consul-general to minister of the second class; Raffaele
Boscarelli, made Minister to Cuba, was pramoted from counselor of legation to minister of the second class; Lodm ico Ifangini, consul-general at
San Francisco, was promoted from consul of the second class to consul of
the first class.
1246
Financial Chronicle
Aug. 20 1932
Italy to Retire 130,000 Tons in Naval Economy.
Approximately 130,000 tons of Italy's fighting ships will
be retired beginning August 25 as a result of an economy
move and a sweeping reorganization of the Italian fleet,
according to Associated Press accounts from Rome which
went on to say:
The death of Mgr. Seipel was noted in these columns
Aug. 13, page 1086.
These will include two battleships, three heavy cruisers, 9 light cruisers,
25 destroyers and a dozen submarines, all reasonably old but still within
the age limit.
The ships will be stripped of their crews, but not immediately scrapped.
In this condition they will continue to serve as a bartering point when
the World Disarmament Conference resumes its discussions at Geneva this
fall. Caretakers will be left aboard the ships to keep them from deteriorating.
The battleships are the Andrea Doris, 22,700 tons, and her sister ship,
the Duilio. These were rushed to completion in 1915 when Italy entered
the World War.
The heavy cruisers include the San Marco, San Giorgio and Pisa, averaging 10,000 tons. They are more than twenty years old. Among the light
cruisers are four old German vessels and one which formerly was in the
Austrian Navy.
The Navy Department believes an extensive retiring program will save
millions of dollars monthly. The crews of retired vessels will be transferred to new cruisers gradually entering the service. Simultaneously
with the retirement schedule comes a reorganization of the fleet. This
involves creation of two squadrons. The first will consist of seven 10,000ton cruisers, none more than three years old, with headquarters at Spezia.
The second squadron is of six 5,000-ton cruisers, none more than two
years old, some of which hold world speed records. Its headquarters will
be at Taranto.
Admiral Ernesto Burzagli will command the First Division of the First,
Squadron and Admiral Domenico Cavagmari the Second Division. The
admiral of the Second Squadron has not yet been named. In addition to
these vessels there will be an Adriatic squadron of destroyers.
Retirement sounds the death knell of the battleships so far as Italy is
concerned. Although the navy is far below the total of 170,000 tons in
battleships granted by the Washington treaty, Italy disregarded the right
to build this type, turning attention instead to heavy and light cruisers.
The Union Bank of Switzerland, in its quarterly report,
issued in July, had the following to say regarding conditions on the Swiss Stock Exchanges:
Austrian Parliament Ratifies Lausanrxe Protocol—
Paves Way For $42,000,000 Loan Under Auspices of
League of Nations.
By a vote of 81 to 80, the Austrian Parliament on Aug. 17
ratified the Lausanne loan protocol. The Associated Press
advices from Vienna (Aug. 17) noting this added:
By this protocol Austria receives $42,000,000 under the auspices of the
League of Nations. Most of it will go to conversion of short term notes
held by the Bank for International Settlements, and loans from the Bank
of England Into long term obligations.
Copyright advices Aug. 17 from Vienna to the New York
"Evening Post" had the following to say regarding the
aetion of Parliament:
The Austrian Parliament this afternoon ratified the Lausanne protocol
by the close vote of 81 to 80. Approval of the protocol was necessary to
pave the way for the $42,000,000 Austrian loan promised at the Lausanne
conference, $15,000,000 to be given by England, another $15,000,000 by
France and the rest by smaller countries. The loan is necessary to enable
Austria to continue to pay the debts which presently will come under the
transfer moratorium.
At this morning's session of Parliament a Pangerman deputy proposed
the adjournment of the ratification measure but the Parliament declined
the proposal by a vote of 81 to 80. Thereupon the Government proposal
for ratification passed by the same vote.
The Upper Chamber of the Parliament where the Pro-German parties
have a majority will probably decline to ratify the protocol, but its veto
will be valueless if the Lower House—where now a majority is assured—
votes it the second time. The Pro-German parties oppose the Lausanne
Protocol because it prohibits the union of Austria and Germany for 20 years.
In part a Vienna wireless message Aug. 17 to the New
York "Times" said:
So close was the voting that ratification or rejection of the protocol
and the Government's fate finally hung on the health of former Chancellor
Johann Schober,an opponent of the measure, who is in a Vienna sanitarium
suffering from heart disease. He could not leave his bed, and as a result
the untiring efforts of Chancellor Doilfuss to hold the Farmers' and Helmwehr parties in line were crowned with success despite the declaration of
the Pan-German and Socialist opposition that acceptance of the loan with
its promise of no union with Germany was "treason to Austria's future."
When the news arrived that a large number of Deputies, mostly on the
Government side, were held up by a landslide at Hieflau, Government
headquarters became frantic. There was excited telephoning and finally
the missing Deputies arrived in a special train that had raced over a roundabout route. One Helmwehr Deputy was prevziled upon at the last moment
to vote for Instead of against the protocol and another to stay away.
The Pan-German Deputy Prodinger concluded his speech on the protocol
by saying: "Let him who is for France vote for the loan; let him who is
for Germany vote against it."
This interpretation was hotly repudiated by speakers for the Government.
With three Nazi votes in the upper chamber it is certain to reject the
protocol when the vote is taken Friday, whereupon it will be resubmitted
to the lower house and probably passed over the rejection.
The chief beneficiary of to-day's vote probably will be the Austrian
&chilling, which has already gained 5% in exchange value.
From the "Evening Post" of Aug. 18 we quote:
In June the League of Nations arranged a $42,000,000 loan for Austria
pending ratification by the Austrian Parliament. There was considerable
opposition, the Government's opponents charging that the country's
liberty and independence had been sold out for another 20 years to obtain
the money.
Chancellor DoRfuss was placed in a dangerous position on this issue at
the time of the recent death of Mgr. Ignaz Seipel, Former Chancellor and
member of the Government bloc. Without that vote the Government
would have been defeated. Hastily a successor to Mgr.Seipel was appointed
and on a vote of confidence in Parliament, the Government won by a
single vote.
Repercussions of Kreuger Crash Felt on Swiss Exchanges Well Into June According to Union Bank
of Switzerland.
Stock Exchange.
The continuance of the depression and the repercussions of the Kreuger
crash were felt on the Swiss Bourses well into June, with the result that
the share index of the Swiss National Bank reached a new low at 81% of
the paid-up capital on the 10th of that month. The market then turned
decidedly bullish in expectation of favorable results being achieved at the
Lausanne Conference, and particularly sharp rises occurred in bank and
finance company shares, with industrials also improving. Bonds were
strong, Swiss issues advancing, while foreign obligations in many instances
made considerable gains. Shortly after the publication of the Lausanne
report the trend again became uncertain, with losses partially erasing the
recent gains. Underlying sentiment, however, continued better.
The turnover was, in general, stnall.
We also take the following from the report:
Money Market.
The trend towards lower interest rates continued in Switzerland as was
the case in the other international money centers. While the official Bank
rate remained unchanged at 2%, the outside rate for prime Swiss bank
and trade paper was 1%%, with rates on foreign bills also cheapening in
comparison with the earlier months of the year.
The gold influx to the Swiss National Bank kept up until the end of
June. On that date gold holdings of the issue bank amounted to 2,607 million francs against 2,347 million francs at the close of last year. Gold
exchange, on the other hand, declined from 104 million francs to 56 million
francs during this period, and the note circulation also fell from 1,609
million francs to 1,574 million francs, with sight liabilities, however, showing an increase to 1,159 million francs from 962 million francs. Gold
cover for note circulation and all other sight liabilities stood at 95.39%
on June 30 1932, against 91.27% at the end of last year. As an indication of the liquidity of the Swiss money market may be cited the fact
that at the end of the half year the domestic bill portfolio of the National Bank was only 17 million francs, a low figure not witnessed since
the early days of the Bank, which celebrated its 26th Anniversary this
June.
Capital Market.
Both the number and value of new bond issues brought out during the
first six months of 1932 fell far below the figures for the coresponding
period of 1931. Of domestic issues totaling 491 million francs (against
837 million francs last year), Federal Government, Cantonal and municipal
issues accounted for 400 million francs (493 million francs). Other important Wiles included 38 million francs (40 million francs), by the
Central Mortgage Institutions, and 42 million francs (74 million francs)
by public utility companies. Conversion loans of the various public governing bodies came to 324 million francs (429 million francs), and those of
private companies to 29 million francs (68 million francs), so that the
market was called upon to absorb only 139 million francs of domestic issues
as against 250 million francs in the first half of 1931.
Foreign borrowers came into the market for 75 million francs net (103
million francs).
New share offerings were again unimportant, their issuing price being
only 11 million francs against 22 million francs in the first six months
of 1931.
Swiss Consortium to Lend Rumania $10,000,000.
Associated Press advices from Bucharest, Rumania,
Aug. 13 stated:
Agreement by which a Swiss consortium will lend Rumania 50,000,000
Swiss francs (about $10.000.000) for 2% years at 4.5i% interest was
signed
to-day.
Food Shortage in Soviet Russia—Cut in Rations—
Labor Troubles in Coal Fields.
According to Associated Press accounts from Moscow,
labor troubles have arisen in the great coal fields of the
Donetz Basin, it was revealed on Aug. 15, with the result
that in the last two months between 20,000 and 25,000
miners had quit their jobs. The Associated Press, Aug. 15,
went on to say:
The unrest has been reflected in production, which has fallen considerably.
In the first few days of August the daily output was 85.000 to
100,000
tons, compared with an average of 186,000 tons a day in March.
The newspaper "For Industrialization' asserted the trouble
resulted
from low wages and a desire on the part of the workers for better
conditions. Unskilled workers were replacing trained men, the living
paper
said, and they were receiving 75 to 100 rubles a month while their food
cost a minimum of 70 to 120 rubles a month. A serious shortage of fuel
for the winter was feared.
Food rations allotted to American and other foreign specialists
stationed
here in the employ of the Soviet Government are cut in two by a recent
order to the store in which the foreigners buy their supplies.
A general shortage of foodstuffs has been felt by Russians for some
time, but hitherto it had not affected foreigners in the Government employ. The new reduction, while it cuts the amount of food available
to foreigners, leaves them fairly well supplied with basic staples, except
butter, and still much better off than the average Russian citizen. Prices
remain unchanged.
Monthly rations for one man include: Meat, 7 kilograms at 2 to 3
rubles per kilo (a kilogram is about two pounds; the ruble is nominally
worth 50 cents); fish, three kilograms at 1 ruble 10 kopecks: flour, two
kilograms at 90 kopecks; butter, one kilogram at 5 rubles; sugar, three
kilograms at 95 kopecks; 60 eggs at 10 for a ruble; sausage, three kilograms
at 6 rubles; cheese, three kilograms at 3 rubles 50 kopecks; bread, 800
grams a day at 43 kopecks a kilogram. Heretofore bread had been sold
In unlimited quantities.
Another store, operated for diplomats and newspaper correspondents,
has not been put on a ration basis.
Volume 135
Financial Chronicle
Efforts to Get Indian Farmers to Restrict
Jute Production Fails.
An announcement as follows was issued Aug. 11 by the
Department of Commerce at Washington:
Despite efforts of the Bengal Department of Agriculture to persuade
Indian farmers to restrict production, the present official jute crop area
is placed at 1,903.000 acres, or an increase of 41,200 acres over last year,
according to a report to the Commerce Department from Assistant Trade
Commissioner Wilson C. Flake, Calcutta.
Publication of the figures has had no marked change in the Calcutta
Jute market, it is reported in trade circles.
Last year's jute acreage, it will bo recalled, was about one-half of that
planted in immediately preceding years,
Minister of Finance Denies Reports That Argentina
Seeks Loan.
From Buenos Aires, Aug. 13, a cablegram to the New
York "Times" said:
The Minister of Finance denied to-day reports persistent for several
days that lie was trying to negotiate a foreign loan of $12,500,000 to meet
overdue salaries and other outstanding accounts.
Payments on Argentine Loans.
A Buenos Aires Cablegram, Aug. 16, to the New York
"Times" stated that the Bank of the Nation on that day
placed at the disposal of American bankers $1,403,000 for
service on the foreign loans. British bankers it was added
received £128,000 and those in Spain 1,860,000 pesetas.
•
Argentina Warned Against Borrowing in Annual
Report of Corporation of Argentine Bondholders
—Urged That Expenses Be Cut and Financial
Policy Be Altered.
From its Correspondent at Buenos Aires (Aug. 1) the
New York "Times" in its issue of Aug. 14 published the
following special correspondence:
Argentina's public debt, including national, provincial and municipal
Indebtedness, has reached a total of 5,397,876,326 pesos ($1,349,469,084),
and the unfunded portion of it can no longer be covered from general
revenues, according to the annual report of the Corporation of Argentine
Bondholders. Any efforts at funding the floating debt should be confined to internal loans, according to the recommendations of the Corporation, which warns particularly against any further borrowing abroad,
pointing out that depreciated exchange makes it necessary to repay to
pesos for each peso received.
The annual report of the Corporation of Argentine Bondholders is looked
forward to each year as an unbiased review of the country's financial
situation. The report just published describes the present financial situation as serious, says that Congress, in approving an extravagant budget,
has shown a lack of comprehension of the gravity of tho situation, and
that a radical curtailment of public expenditures la imperative.
Big Deficit Certain.
The budget for the current year is 839,263,376 pesos ($209,815,844) and
it has been stated in Congress that there will be a deficit of 100,000,000
pesos ($25,000,000) as a result of unexpected decreases in the national
revenues. "The preparation of this budget," says the Corporation, "shows
a persistence in some of the errors which have led to the financial disaster,
the lamentable effects of which we are now suffering. This is the more
regrettable in view of the hopes that the new constitutional authorities
would take strong steps toward administrative and financial reforms.
There still exists the confusion arising from the belief that balancing the
budget and reducing it are the same thing. The country's imperative need
at present is a reduction in the budget and this is not achieved merely
by balancing it."
The report goes on to say that the unfavorable financial situation which
was inherited by the Constitutional Government elected in November is
the heritage of a demagogic political regime which began in 1916 and
which united a general incapacity for administration with a program of
political corruption based on the lavish expenditure of public moneys.
Credit is given to the provisional government of General Uriburu for
sincere efforts to rectify matters, but its actions were limited to the
emergency measures of a provisional regime.
New Policy Imperative.
The solution, says the report, lies in a radical change of financial policy,
a heavy decrease in public expenditures and a budget that will leave a
surplus each year front which interest can be paid. Then the country will
be in a position to float an internal loan to fund its large floating debts.
The report places the foreign debt at 993,719,000 pesos ($248,430,000),
the internal funded debt at 1,403,853,000 pesos ($350,948,000), and the
floating debt at 1,474,000,000 pesos ($370,000,000), making the total
national debt 3,871,672,000 pesos ($967,893,000).
The total public debt of the fourteen provinces is placed at 1,174,710,765
pesos ($293,677,691), with the Province of Buenos Aires far in the lead
at 742,787,622 pesos ($185,696,905).
Twenty-one municipalities have a total public debt of 371,113,570 pesos
($92,778,392), of which the Federal capital owes 230,813,741 pesos ($97,.
728,435).
State of San Paulo 7% Coffee Realization Loan 1930.
Speyer & Co. and J. Henry Schroder Banking Corporation, U. S. A. Fiscal Agents for the State of San Paulo 7%
Coffee Realization Loan of 1930, announced on Aug. 17 that
owing to the severance of communications with the State
of San Paulo consequent upon the outbreak of political disturbances early in July, no advices regarding the receip's
from the special tax and from the sale of coffee pledged for
the above loan have been received since the last monthly
statement was published. The publication of the regular
statements will be resumed as soon as circumstances permit.
1247
It is added that sufficient funds are in the hands of the Fiscal
Agents to pay the Oct. 1 1932, coupons of the above loan,
and the $1,750,000 Bonds drawn for redemption at par on
that date.
Max Winkler Estimates Net Profit of United States
As Result of Country's Past Foreign Relations As
Over $5,000,000,000.
"Substantially more than $5,000,000,000 may reasonably
be said to represent America's profit as a result or the
country's financial contact with the rest of the world,
covering the period 1914-1931, according to Max Winkler,
in an address before the Institute of Politics delivered at
Williamstown, Mass., on Aug. 16. Mr. Winkler said:
Prior to the war, America's stake abroad exceeded two and one-half
billion dollars. At the beginning of the current year her foreign investments
reached the impressive total of almost 18 billions, exclusive of so-called
political obligations: that is, debts of European nations to the United
States Government as a result of transactions effected during and after
the war. If these obligations are added to America's private commitments
abroad, we obtain a grand total of about $27,000,000,000, or $24.500,000,000 if the pre-war amount is deducted.
It is America's foreign investments which have inspired Senatorial
investigations and Congressional inquiries. It is these which Presidential
candidates are expected to refer to in their campaign speeches. While
much of the criticism against American loans to foreign borrowers is warranted, one must not lose sight of the fact that the majority of critics have
failed to comprehend the true significance of foreign loans. Since the term
"foreign," even when applied to loans, is generally taken literally, that is,
something about which the people know little or nothing, it is abundantly
obvious why foreign loans lend themselves readily for elaborate discourse
by politicians and pseudo-economists, a species which flourishes especially
in these climes.
Against the above amount representing American investments abroad,
political as well as commercial, there are America's sales to the rest of
the world, which aggregate for the period under review, that is. 1914-1931,
$87.968,000,000. It is reasonably safe to assert (especially if the war
period is taken into consideration) that America's profits resulting from
her exports averaged at least 25%, or close to $22,000,000,000. If we
deduct from America's investments abroad effected during the period
1914-1931 the so-called political debts of about $9,000,000,000, on the
assumption that they may have to be written off completely and assume
that the remainder of $15,500,000.000 has a present worth of only 50%.
or 37.750.000,000, the total loss may be placed at $16,750,000,000 which,
if deducted front the assumed profit of 322,000,000,000, gives a net profit
of $5,250,000,000.
The above calculation takes into account the most unfavorable situation
by completely writing off the so-called political debts. However, even
on this basis there remains for the United States a net gain out of its past
foreign business relations amounting to materially in excess of 35,000.000,000. Therefore, any improvement in America's foreign commerce and the
resultant profits therefrom will henceforth constitute only net gains to
the country. In this way the elimination, for the time being, of the socalled political debts cannot but contribute materially to the enhancement
of the economic position of the United States,
Chileans Concerted Over Inflation Plan Following Government Move to Issue Notes on Farm Mortgage
Bonds—Minister of Finance Asserts Measure Will
Aid Business as Well as Foreign Exchange.
From the New York "Times" we take the following from
Santiago (Chile), Aug. 11:
The heavy debts incurred in the last fifty years by the farmers of
Chile through the issuance of mortgage bonds by the Mortgage Bank, which
is considered Chile's basic credit institution, are the subject of the gravest
public dispute the Socialist Government has had to face.
The Minister of Finance proposes the immediate enactment of a law to
withdraw from circulation 1,400,000,000 pesos' [$84,000,000 at the current
exchange] worth of bonds and to substitute note issues rediscountable at
the Central Bank. Chambers of Commerce and banking circles as well as
foreign and Chilean commercial concerns strongly oppose the measure
maintaining that it means the equivalent of issuing paper money to the
amount of 1,000,000,000 pesos [$60,000,000] without land guarantees.
The critics of the plan hold the mortgage debtors would benefit enormously at the expense of the mortgage bondholders, Chilean and foreign,
who would receive the value of their holdings in depreciated currency, it
is asserted. Furthermore, bankers and others see a danger of inflation
following, with the abolition of land-backed bonds creating havoc in the
economic structure of the country and paving the way for future issues
of paper money.
The Mortgage Bank's operations involve all the agricultural business
in Chile. Semi-public banking institutions view the measure with alarm,
while the press is also protesting and holds that inflation would ruin all
except debtors.
The Minister of Finance emphatically denies inflation would follow,
but he holds that a larger volume of currency would hasten the development of industries as well as farms and general business and would lead
to increased exports and available drafts in foreign money. This, he said,
would improve the exchange instead of decreasing the value of the peso
as is feared.
Many Cabinet meetings are being held to decide upon the matter, but
the Finance Minister's measure is expected to be adopted with few alterations. Through thia means the government plans to raise $24,000,000
with which to finance the emergency relief plan for 100,000 jobless persons
and to finance gold washing operations and other hastily started works.
The Central Chamber of Commerce has asked President Davila to reconsider the bill, since it would "cause an immense depreciation in money
and consequent ruin for those who live by salaries or wages."
In an earlier cablegram (Aug. 9) from Santiago to the
same paper it was stated:
It was semi-officially announced to-night that a Cabinet meeting called
late this evening had drafted a bill involving the withdrawal of Mortgage
Bank bonds in accordance with the Finance Ministry's plans of relief for
debtors.
1248
Financial Chronicle
Aug. 20 1932
Public discussion has centred for weeks on the serious condition that
might follow such a move, since it is asserted it would cause an upheaval
in the economic structure of the country, perhaps leading to inflation.
Finance Minister Zanartu denies that there will be unfavorable consequences from the proposed measure, insisting that its enactment will bring
easier terms of credit and an improved condition for industrial development. It is generally considered, however, in business circles that the
vast plan, certainly the biggest step taken by the Socialist Government
since its inception, may fail to give the results expected.
In the case of an immigrant arriving with his family he must also demonstrate that he is financially able to take care of those dependent upon him.
The circular provides further that all passengers in transit must exhibit
to immigration officers the sum of $300 and all passports and other documents must be in order before they will be permitted to land on the island.
A fine of $500 will be imposed on the captain of any vessel who accepts an
Immigrant who does not possess the required sum.
Whether tourists will be exempt from the requirements established for
transients is not announced.
Chilea
rerchants Delay Enactment of Saturday
Half-Holidays—Eight-Hour Day Law Promulgated.
Protesting vigorously to the Government, Chile's retail
merchants have succeeded in delaying until a future date
the enactment of the proposal to establish a Saturday halfholiday throughout the country, according to a report to
the Commerce Department from Assistant Commercial Attache Harold M. Randall, Santiago. The Department, on
Aug. 12, further reported:
Costa Rica Reported to Have Suspended Interest.
From the New York "Herald Tribune" we take the following (United Press) from San Jose, Costa Rica, Aug. 11:
The eight-hour maximum working day has been made effective, however.
By Decree 113, the eight-hour day becomes effective for one year in all
industrial and commercial establishments, all overtime being eliminated,
excepting in unusual cases which the General Labor may agree to, and
for which "privilege the establishments must make written request."
Less than an eight-hour day, up to a limit of four hours, may be established, after previous study with laborers and employers interested, by the
Labor Office. Shifts of labor may be inaugurated by employers to take
care of present production, after notification to the Labor Office.
In regard to the Saturday half-holiday, retail merchants complained that
this afternoon was the time of heaviest sales, owing to the fact that many
of the laborers and office workers had no other shopping time. The Government has not stated that the idea would be abandoned.
Governmental action was taken in order to meet the unemployment situation, it was stated.
Cuba's Funded Debt June 30 $153,754,000.
Associated Press advices from Havana Aug. 4 stated:
Treasury Department figures just issued show Cuba's funded debt was
$153,754,000 on June 30.
Remaining to be paid on various external loans is $58,388,000. An unpaid balance of $7,866,000 is left on the 1905 bond issue floated here, while
public works loans extant amount to $87,500,000.
*Of the $42,000,000 bonds issued against certificates for segregated
sugar, $8,265,360 have been amortized to date, $5,026,520 are held by
banks and $28,708,120 are in circulation.
Since May 20 1925, when General Gerado Machado became President, the
government has paid $66,050,149 principal and $50,013,344 interest on
its funded debt.
Various amounts paid were: On external debt, $30,368,629 interest,
$41,200,789 principal; internal loan, $3,353,500 interest, $4,084,000 principal ; public works obligations, $13,036,213 interest, $12,500,000 principal;
sugar stabilization bonds, $3,075,002 interest, $8,265,360 principal.
Between July 1 1930, and June 30 1932, the government bought back its
paper at $2,373,186 less than the obligations represented.
Oscar Cintas to Be United States Ambassador to Cuba.
President Machado on Aug. 12 (according to Associated
Press advices from Havana) approved a recommendation
that Oscar Cintas be appointed Ambassador to the United
States to succeed Orestes Ferrara, who resigned in May
to enter the Cabinet.
Cuban Policy Said to Have Caused Drop in Silver
Values—Withdrawal of Ammican Currency Works
Hardship on Taxpayers and Merchants.
Special correspondence, as follows, from Havana, Aug. 10,
Is taken from the New York "Times" of Aug. 14:
The Government policy of withdrawing American currency from circulation and substituting Cuban silver, adopted at the time of the recent issue
of some $3,000,000 in silver, has brought about a steady decline in the value
of the Cuban silver dollar, which is now quoted at a discount of 2% to 3%
In the local exchange market.
One of the largest American banks in the Island has stated it would
accept no silver in the purchase of foreign drafts. Canadian banks here
are also reluctant to exchange Cuban silver in any large amount, although
they are willing to permit purchase of foreign drafts in silver up to $100,
at 3% discount.
The situation is a hardship to many merchants and industries who receive
the bulk of their daily receipts in silver. Banks have permitted these firms
to open what is known as silver accounts, which are used locally. All
checks drawn on these accounts are marked "silver only." However, this
does not solve the problem of payments abroad.
Government, provincial and municipal offices accept only 20% silver in
payment of taxes and the post office limits the amount to 8%. On July 30,
the last day of the quarter for the voluntary payment of many municipal
taxes, the newspapers carried a statement that for the first time money
was sold openly at a profit. Taxpayers, being unable to obtain American
currency with which to pay taxes, appeared at collection offices with silver,
hut they were informed that all silver payments would not be accepted.
Money changers immediately made their appearance and did a thriving
business all day.
Cuba Calls for Guarantees from Transients—Must
Have $300 and Immigrants Must Post Bonds.
From Havana, Aug. 10, the New York "Times" reports the
following:
Immigrants must post a bond of $500 with the Cuban Government, which
will be returned to them at the end of one year providing they have found
steady employment and are in no danger bf becoming public charges, according to a circular issued by the Department of Treasury. This ruling will
go into effect within 10 days following its publication in the Official
Gazette, the "Herald., de Cuba," Government organ, he states.
President Ricardo Jimenez signed a bill to-day authorizing the Government to suspend until Nov. 1 1936 all interest and amortization payments
on the 1926 American, 1911 British and the Pacific Ry. bond issues. The
new law provides for issuance of 20-year bonds bearing 5% interest to
be issued in payment of coupons on the affected loans when they become
due. The next interest and amortization payments on the American loan
are due Nov. 1. Costa Rican financial representatives are now in New
York attempting to make arrangements with bondholders.
Foreign Bank Curb Sought in Colombia—Debtors
Committee Would Have Executive Decree Enforced Against Them—Wants Congress to Act.
in its Aug. 14 issue the New York "Times" published the
following special correspondence from Panama, Aug. 10:
Foreign banks in Colombia are threatened with a strike on debts owed
them, a boycott and an appeal to Congress to legislate against them by
the committee of the debtors of foreign banks, which met recently in
Bogota.
The resolution refers to Executive Decree No. 711, which provides for
acceptance of national internal and foreign bonds in payment of 50% of
commercial debts when accompanied by an equal amount of cash, and also
requires membership by stock purchase in the new government mortgage
bank which was planned to aid in the liquidation of frozen credits. Apparently the foreign banks' objections are based on the fact that under the
decree they would have to accept at 80, bonds that are selling at 20, in
payment of bank loans.
Action Up to Congress.
A resolution adopted by the committee of the debtors states that the
foreign banks enjoy the same advantages and 'facilities as native banks,
and that it is only just in view of their favored position that they should
extend to their clients the same facilities as the native banks make available. It is claimed that of $16,129,284 deposits in the foreign banks only
$8,376,180 represents capital that was brought into the country. After
calling attention to the fact that the foreign banks have not accepted
the conditions of the decree, the resolution favors:
"First: Petition Congress to reform the banking laws' application to
foreign banks so that in Colombia they will be given only such facilities
as are given to Colombian banks established in their own countries.
"Second: If the foregoing request is not granted the committee will
appeal to national patriotism to the end that Colombians will withdraw
their savings deposits, time deposits and current accounts and transfer them
to native banks.
Would Stop Payments.
"Third: Study the convenience of declaring a general strike against
payments to the foreign banks whose attitude is demonstrated as opposed
to the end sought by the Executive for the economic independence and
re-establishment of the country."
What effect the resolution will have on the President and Congress
and the foreign banks remains to be seen, as well as the action that might
be expected from the foreign banks in case of discriminatory action against
them or in the event of a boycott.
It is not impossible that legislation of a nature that would impose too
great a handicap on foreign banks might cause some of them to withdraw from Colombia. In such case the banks probably would be forced to
call many of their loans, including obligations of the Government. It is
not likely that the Government will take any definite action without giving
the foreign banks an opportunity to present their side of the question.
El Salvador Bonds—Recent Unification of Protective
Committees Viewed by Institute of International
Finance As Safeguarding Interests of Holders—
Next Step Would Be Setting Up a Customs Receivership, a Measure Not Feasible While Salvador
Government Is Unrecognized by United States.
The Institute of International Finance, through its
Director, John T. Madden, dean of the School of Commerce,
Accounts and Finance, New York University, issued a
bulletin on Aug. 15 which was of the opinion that the recent
unification of two bondholders' protective committees would
tend to safeguard the interests of holders of El Salvador
bonds. The Institute, which is conducted by the Investment
Bankers' Association of America in co-operation with
New York University, held in the bulletin, however, that
nothing more than a temporary arrangement can be made
at the present time in view of the non-recognition of the
present authorities of El Salvador by the United States and
other nations. The bulletin says:
The Institute has maintained that as protective committees necessitate
the financial support of bondholders they should be formed only when a
certain measure of accomplishment is assured.
In the case of El Salvador, the present authorities of that country have
expressed a desire to formulate a temporary adjustment of loan service
and have sent agents to New York to start negotiations with the unified
committee. In view of this, the Institute is of the opinion that the committee as now constituted is In a position to safeguard the interests of
the holders of El Salvador bonds.
On April 14 of this year the Institute suggested that the
interests of bondholders would be best served by one committee in which all parties would be represented, and the
Volume 135
Financial Chronicle
unification of the two committees then existing followed.
The public debt of El Salvador as of April 30 1932, according to the bulletin, amounted to $25,577,807 at par of
exchange. Of that sum $17,393,299 represented external
bonds. The figures follow:
Public Debt As of June 30 1931 (in dollars).
External—
Series A bonds
Series B bonds
Series C bonds
Total
Internal
$3.89,500
*4,414,999
9,098.800
$17,393,299
5,897,066
$23,290,365
* Converted from pound sterling into dollars at par of exchange.
The bulletin says:
Series A bonds are secured by a first lien on 70% of the customs revenues.
series B by a second lien on the same revenues, and series C by a third
lien on the same revenues. Under the terms of the contract the customs
duties are collected in gold by a representative of the fiscal agent, the
Manufacturers Trust Co.,successor to the Metropolitan Trust Co., original
fiscal agent.
With regard to default, the contract provides that in case of delay for
30 days in payment of coupons and sinking fund, the first lien shall, upon
demand of the fiscal agent, extend over the total customs revenues. In
that event the customs administration shall be turned over to a CollectorGeneral appointed by the Republic from two individuals sele- ted by
the fiscal agent with concurrence of the Secretary of State of the United
States. The contract further provided that any disagreement as to the
provisions of the contract should be submitted to the Chief Justice et the
Supreme Court of the United States, whose decision is binding on all pIrties
to the contract. Formal cognizance was taken of the contract by the
United States Government.
It would seem that the next step should be an attempt by the fiscal
agent to enforce the default provisions of the loan contract and attemrt
to setups customs receivership, but it does not appear that such a measure
can succeed while the Salvador Government remains unrecognized.
The service of the external debt amounted to $1,771,887 in 1931 and the
service of the series A bonds, which becomes a first lien on the entire customs
revenues in case of default, amounted to only $574,200. or about 10% of
the total amount of customs duties in 1931.
1249
General Rodriguez was sworn in a War Minister on Aug. 2.
Under date of Aug. 8 a Mexico City cablegram to the
same paper said:
President Ortiz Rubio this evening named Primo Michel, a lawyer,
Minister of Industry and Commerce, filling the place resigned by General
.
Abelardo Rodriquez. .
Senor Primo Michel's appointment was unexpected, the general belief
being that the President would leave the post vacant until after the constitution of the new Chamber of Deputies and the Senate on Sept. 1.
Senor Primo Michel was Under-Secretary.of the department he. now
controls. He formerly was Minister to Germany and at one time was
head of the Federal District government.
Javier Sanchez Mejorada Quits Mexican Rail Post.
A cablegram from Mexico City, July 27, to the New York
"Times" said:
Javier Sanchez Mejorada resigned this morning as managing director of
the National Railways of Mexico under such terms as do not permit his
being requested to reconsider the action.
Senor Mejorada recently has been bitterly attacked by labor elements in
the system, and during a labor demonstration last Sunday thousands
shouted,"Death to Mejorada! Down with Mejorada!"
Reported That Mexico Considers Modern Navy Of
100,000 Tons Within Five Years.
The following from Mexico City, July 23, is from the New
York "Times":
A plan is being studied by the Ministry of War and Marine for the construction of a new fleet of 100,000 tons within five years, consisting of
cruisers, transports, coast guard craft and hydroplanes.
The present Mexican naval strength is less than 10,000 tons, consisting
mainly of obsolete craft. The new program, if approved, will be submitted
to the League of Nations, according to El Grafico. That paper declared the
long coastline of Mexico on the Pacific and Atlantic warrants at least the
tonnage proposed.
Mexico Doubles Surtax of Duty on Parcel Post
Shipments.
The Department of Commerce at Washington stated on
July 6 that a Mexican decree, published July 20 1932
and effective 15 days thereafter, doubles the surtax on imNara Cruz Changes Expropriation Law — Workers, portations and exportations by parcel post by increasing it
Rents not to Exceed 15% of Wages, With Lesser from 5% to 10% of the duty, according to a report from
Figure for Unemployed.
Commercial Attache Chas. H. Cunningham, Mexico City.
A cablegram as follows from Mexico City, Aug. 3 is from This, it is noted, amends Article 15 of the Revenue Law of
1930 which fixed the surtax on parcel post packages at 5%
the New York "Times":
The Legislature of the State of Vera Cruz has adopted important changes
of duty.
n the recent expropriation law, according to press reports to-day.
The changes are that rents for workmen's dwellings shall not be more
than 15% of the laborers' wa es,and when they are without work not more
than 5% of their pay when they last worked.
Some sources predict a reaction to the rapid rise of the United States
dollar in the local market as a result.
The expropriation law was referred to in our issue of
July 2, page 45.
56 Banks Accepted by Banco de Mexico as Associates
in Rediscount Operations.
In its issue of Aug. 9 the "Wall Street Journal" reported
the following from Mexico City:
Commercial Interests Protest Vera Cruz Property
Seizure.
From Mexico City a cablegram July 22 to the New York
"Times" said:
The Banco de Mexico's board of directors has accepted some 14 more
banking and credit establishments as its associates in rediscount operations.
The action has extended such operations to all parts of the republic, says
"El Nacional," local daily newspaper, organ of the party dominating the
Federal Government. Now 56 banks, including branches in Mexico of the
National City of New York and the Bank of Montreal, are associated with
the Banco de Mexico in rediscount operations. Estimates place rediscount
operations throughout Mexico at an average of about 2,000,000 Pesos
(approximately $600,000, American) daily.
Vigorous protests have been lodged with President Ortiz Rubio by commercial and other interests in the State of Vera Cruz against the issuance of
a decree exporopriating 54 lots of property in the vicinity of Boca del Rio.
That action followed confiscatory legislation which has been subject to
much unfavorable comment.
Mexican Silver Bank Note Circulation.
From the "Wall Street Journal" of Aug. 16 we take the
following from Mexico City:
Mexican Road Resumes—Regime Operates Southern
Pacific Pending Strike Accord.
Advices as follows from Mexico City, July 22 are taken
from the New York "Times":
Present circulation of silver bank notes which Banco de Mexico has
issued since the silver standard was established for the Republic in July,
1931, is upward of 50.000,000 Pesos, estimates "El Nacional." The newspaper says the Ministry of Finance has retired from circulation more than
20,000,000 pesos in silver coin and that this money has been applied to the
bank's metallic metal reserves. Paper money in circulation has considerably relieved the acute scarcity of currency of a while ago.
Southern Pacific Railroad of Mexico passenger and freight trains were
running again to-day after a suspension since June 27, due to a strike,
H. B. Titcomb, president of the company, said:
The Government, through Mariano Cabrera, has taken over the system
pending a settlement of the strike, but this is a temporary move only. Air.
Ticomb said the lines trre being operated through the co-operation and help
of the Government in order to remedy the paralysis of business on the
West Coast.
The conciliation and arbitration board is likely to decide at any moment
upon the merits of the strike. The question now at issue is: "Was the
company justified in reducing wages 10%."
The strike of rail workers in Mexico was noted in our issue
of July 2, page 46.
General Rodriguez, Formerly Mexican Commerce
Minister, Made Secretary of War—Primo Michel
New Commerce Minister.
From Mexico City, Aug. 1, a cablegram to the New York
"Times" said:
General Abelardo L. Rodriguez, Secretary of Industry, Commerce and
Labor, was appointed Secretary of War to-day by President Ortiz Rubio.
He will take the oath of office to-morrow,succeeding General Plutarco Elias
Calles.
General Calls resigned last week to devote his time to personal matters.
General Rodriguez formerly was Governor of the Northern District of
Lower California.
Mexican President Granted Broad Powers to Change
Transportation Laws.
Broad powers have been granted the Mexican President
during recess of Congress to make reforms in the new law
on Communications and Transportations, passed by the
last Legislature, according to a report to the Commerce
Department from Commercial Attache Charles H. Cunningham, Mexico City. His powers in this direction will
cease Aug. 31, said the Department's announcement Aug. 9,
which also had the following to say:
Enforcement of the law has caused hardships not intended. it is stated.
and Article 171 has been especially complained of in various quarters.
This article states that the "Railroads have the power to issue special
tariffs on the following conditions: (1) Tariffs reduced for merchandise
that must be transported by full carloads and with a minimum determined
weight or in lots of a certain minimum number of cars. These tariffs
will differ from the respective general tariff, reduced a certain uniform
percent fixed by the railroad."
It is said that special tariffs have heretofore been allowed by the railroads
for distance of transportation, since the longer hauls can be handled more
economically; also there have been cases where certain districts have needed
special concessions in order to get its products out, and these have in some
cases been granted by the railroads after careful study, when such action
would give life to some agricultural or industrial district or enable domestic
products to compete with foreign. Any good effects of such special con-
1250
Financial Chronicle
cessions,it is stated, is prevented by the manner of allowing them prescribed
In the new law, since the object is not to make general reductions but to
equalize market conditions.
President Hoover Appoints J. H. Halliday s ice-Governor of Philippines.
On Aug. 13 President Hoover appointed John H. Halliday,
of St. Louis, Vice-Governor of the Philippine Islands. Associated Press advices from Washington state:
Mr. Halliday is 53 years old. He was graduated in 1903 from Harvard
College, where he was associated with Under Secretary Castle of the State
Department and Dwight Davis, former Governor General of the Philippines.
He practiced law in St. Louis until about six months ago, when he was
named legal advisor to Governor Theodore Roosevelt of the Philippines.
He is now in Manila.'
Nicaragua Revises Election Law.
The Nicaraguan Congress on Aug. 15 passed modified
electoral laws clearing up those of 1928 and 1930 and
facilitating the voting in the Presidential election in November. According to a cablegram from Managua to the New
York "Times."
•
Credits to Farm Groups by Federal Land Banks and
Joint Stock Land Banks in First Six Months This
Year 50% Below That for Same Period Last Year—
Federal Intermediate Credit Banks Also Curtailed
Aid—Total of $2,609,000,000 Loans Since Organization in 1917.
Federal and Joint Stock Land banks extended more than
50% less credit to farmers and farm organizations during
the first half of 1932 than they did in the same period of
1931, according to the second quarterly report of the Federal
Farm Loan Board, made public Aug. 9. Noting this, the
"United States Daily" of Aug. 10, added:
While the Land Banks were curtailing their lending, the Federal Intermediate Credit banks also cut their loans but by a much smaller proportion,
according to the report, which shows that the Land Bank advances during
the first half of 1932 aggregated $14,708,675 against $31.790.658 in the
same part of 1931, while the Intermediate Credit banks loaned $124,171,011
as compared with $137,338,522. Additional information made•available
follows:
Iowa Leads in Advances.
Since their organization in 1917 the Federal and Joint Stock Land banks
together have made a total of 656,367 loans involving $2,609,055,070.
Of this sum. Iowa has received the most money among the States, $248,030,133.
On June 30, the Federal Land banks had $20,057,192 outstanding in
overdue installments on loans. This total was cut to $7,867,993 by reserves against delinquent payments and by partial payments. Of the total
of overdue loans $12.490,710, or.more than three-fifths, were overdue 90
days or more.
The Joint Stock Land banks had $10,961,406 of overdue installments
on June 30. but their partial payments and reserves against delinquencies
reduced the total to $3,067,586. Of the total delinquent installments
$6,482,082, or more than three-fifths, were overdue 90 days or more.
Intermediate Credit Loans.
Of the $124,171,011 of loans made by the Federal Intermediate Credit
banks during the first six months of 1932, $66,810,336 went to agricultural
financing institutions, an increase of almost $3,800,000 over similar loans
In the first half of 1931.
The additional $57,360,675 went to co-operative farm associations, a
decrease of almost $17,000,000 under the first half of 1931. More of the
Intermediate Credit Bank loans, therefore, went to financing institutions
this year, whereas last year more went to the co-operatives.
The Federal Intermediate Credit Bank of Springfield, Mass., has made
the heaviest loans to co-operatives during the first half of this year, while
the Intermediate Credit Bank of Houston, Tex., has made the heaviest
loans to financing institutions.
Joint Stock Bank Loans.
The Corn Belt Joint Stock Land Bank, serving the States of Illinois
and Iowa has made the largest advances among the Joint Stock Land
banks, $576,500 during the first half of this year. The Federal Land
Bank of Omaha has loaned $3,431,000 during the first half of this year,
the largest aggregate for any Federal Land Bank.
The Federal Land banks had aggregate resources of 31.383,458,136 on
June 30, the Joint Stock Land banks had resources of $547,004,376 and
the Federal Intermediate Credit banks had resources of $163,686,055.
S.
Loss of Approximately a Billion Dollars to Farmers
Attributed to Federal Farm Board at St. Louis
Hearing Before Shannon Investigating Committee
—Wool Prices Alleged to Have Been Depreciated.
Manufacturers, dealers in agricultural raw materials, grain
and livestock dealers and commission agents, coffee roasters,
financiers, farmers and others engaged in various lines of
trade and industry testified against the intervention of the
Federal Government in business at the two-day hearing in
St. Louis by the Congressional committee which was recently
appointed to make the inquiry, according o a S . Louis
July 31 dispatch to the New York "Journal of Commerce,"
which further reported:
Representative Shannon of Kansas City, Chairman, presided. His
colleagues were Representative Cox of Georgia and Representative Pettengill of Indiana. Mr. Shannon stated that there was no political significance to the hearings and the committee was desirous of obtaining facts
and opinions.
Aug. 20
1932
A. V. Imbs, flour manufacturer and grain dealer and former President
of the St. Louis Merchants' Exchange, said that the Federal Farm Board
had cost American farmers approximately $1,000,000,000. He based his
estimate on the loss of the foreign market. He stated that the market Act
had brought about a retaliation, which resulted in the reduction of the
foreign demand for American wheat of 300,000,000 to 600.000,000 bushels.
He estimated the surplus wheat supply in the United States at present
at 350,000,000 bushels.
Farmers Oppose Board.
Eighteen farmers of Missouri, Illinois, Indiana and neighboring territory
testified that about 90% of the farmers of their communities favored
abolition of the Farm Board.
J. 0. Burks of the Langenberg Bros. Grain Co. submitted to the committee 200 letters from farmers and grain elevator officers of Missouri,
Oklahoma, Illinois and Iowa in response to a questionnaire. Mr. Burks
said that, with only two or three exceptions, all desired the retirement of
the Government from private business.
R. P. Annan, grain dealer and former President of the Merchants'
Exchange, declared that the Farm Board and its affiliates were in direct
competition with private business. The Government has provided the
Farmers' National Grain Corporation with a loan of $16,000,000 on a paidup capital of $500,000, allowing ten years in which to liquidate the account.
Private business, he said, could not compete with such an unfair advantage.
Representative Cox announced that he had received information that
Federal employees in various cities were forming associations through which
to make purchases by wholesale. These organizations, he declared, according to the information given to him, were operating in Federal offices, using
Government time, and competing with retailers.
Brass Maktng Assailed.
Raymond S. Hermann of the National Bearing Metals Corp., complained
of the Government's operating brass foundries in several cities.
Louis Usselman, representing the National Association of Tailors, objected to the Government's manufacturing uniforms.
Victor Manning, representing the Missouri Farms Co., protested against
the competition of Federal Land banks.
Raymond Grass, representing the Raw Fur and Wool Association, attacked the National Wool Marketing Association of the Farm Board,
which, he contended, had depreciated the price of wool to the lowest in
fifty years. The National Association last March sold 5,000.000 Dminda
of mohair at a reputed price of 5.75c. per pound. His association, Mr.
Grass said, then had 20,000,000 pounds,on which it had advanced to growers 26c. to 32c. per pound.
Gordon C. Hall, manager of the Associated Printers of St. Louis, objected to the printing of envelopes by the Government.
Sr
Net Earnings of Farmers' National Grain Corporation
for Year Ended May 31 Reported Over $1,000,000—
Funding of Debt to Federal Farm Board.
At a meeting in Chicago on August 16 of 28 stockholders
of the Farmers' National Grain Corporation,—the farmerowned and Government sponsored grain co-operative,— officers of the Corporation (according to Associated Press advices) announced that net earnings for the year ended May
31 were more than $1,000,000, that memberships increased
In nearly every section, and that the organization handled
148,000,000 bushels of grain—more than 20% of the nation's
crop and 55,000,000 bushels more than in the previous year.
The following is also from the Associated Press account:
The fanners are optimistic—and that means a lot," said C. E. Huff,
President of the corporation. "Prices for grain and live stock are moving
upward. Farmer-buying power is being increased, and that's what this
country needs most."
The stockholders, representing 250,000 or more farmers from Maryland
to California, brought reports of good crops in all sections. Prices for
farm produce still needed improvement, they said, but the outlook was
much more favorable than a few weeks ago.
Success of the co-operative marketing movement was assured, Mr. Huff
said. Be described the Chicago Board of Trade's action in denying full
trading privileges to the co-operative as "probably the final stand of private tradesmen against the growing strength and power of farmer-owned
co-operatives."
A declaration that the Farmers' National handled farm crops cheaper
during the last year than could have private trading firms was made by
George S. Milner, General Manager of the corporation. He said also that
grain prices were kept at a higher level than they would have maintained were it not for the co-operative agency.
From the Chicago "Journal of Commerce" of Aug. 17 we
take the following regarding the meeting:
Walter I. Beam, Vice-President and Treasurer, in his report of financial
operations emphasized two developments. These were funding of the corporation's $16,000,000 debt to the Federal Farm Board, making it payable over a period of ten years, and the adoption and development of the
policy under which the national organization beconies the single marketing
medium of its regional stockholders.
Those who seek to alienate farmers from the co-operative marketing program to which they have devoted themselves for more than a quarter
century "undertake a fool's task," C. E. Huff, President of Farmers' National, declared.
Predicts Victory Over Pit.
Preceding the statement with a prediction of ultimate victory for the
corporation in its demand for full trading privileges of the Chicago
Board of Trade and Clearing Corporation. Mr. Huff said the "attitude of
defiance against law and authority on the part of the Chicago Board of
Trade probably marks the final stand of private tradesmen against the
growing strength and importance of farmer-owned co-operatives. When
this battle has been won, as it will be won, we shall be able to go forward
with greater security and with even more rapid growth in the future."
"Minneapolis, Duluth or Kansas City, in seasons of normal production,
each handle approximately three times more actual wheat than does Chicago. Yet on the last crop year more than 8,500,000,000 bushels of wheat
futures transactions were handled on the Chicago Board of Trade and
cleared through the clearing corporation, with brokerages and commissions upon the total amount.
Nine and Half Times Wheat Crop.
"This volume of futures trades was some Ph times the entire wheat
crop produced in the United States, and 185 times more than the amount
of actual wheat received in the Chicago market.
Merchandising policies of Farmers Natimial Grain Corporation not only
have returned higher prices to its members than those paid by its competitors, but have placed grain producers in all areas'in better position
with respect to the marketing of their commodity, George S. Milner, general
manager, told stockholders.
His report showed that for the fiscal year ended May 31 1932, the Corporation purchased and handled in excess of 148,000,000 bushels of grain,
not including that purchased from or handled for the Grain Stabilization
Corporation.
Mr. Milnor's report disclosed that as of May 31 the corporation had
under its control a total of more than 75,000,000 bushels of country
and terminal storage space, owned or leased and operated by the Farmers'
National Warehouse Corporation, subsidiary of the Grain Corporation.
C. V. Gregory, editor of Prairie Farmer, declared that the fight to
abolish the Farm Board was engineered by private handlers of farm
products.
Three new directors were elected. They were Carl J. Martin of Lansing,
Mich., who succeeds L. J. Taber; A. R. Shumway of Milton, Ore., who succeeds F. J. Wilmer; William T. Shulberg of Preston, Idaho, who succeeds
Jesse W. Wade.
The new directorate re-elected the present officers. They are: C. E.
Huff, President; William H. Settle, Vice-President, and Charles B. Steward,
Secretary. Officials and directors meet again to-day to determine future
policies of the Corporation.
Chairman Stone Asks Support of Federal Farm Board
It is Not "Broke," He Tells Stockholders of Farmers
National Grain Corporation—Repeal of Marketing
Act Woul Mean Set Back to Agriculture He Says.
A new pledge of support for the Federal Farm Board was
urged at Chicago on August 16 by James C. Stone, its chairman, at the annual meeting of the Farmers National Grain
Corporation, a co-operative marketing association sponsored
by the Farm Board. This is indicated in a Chicago dispatch
to the New York "Times" from which we also quote as
follows:
"At the closing session of Congress, a resolution to repeal the Agricultural Marketing Act and abolish the Federal Farm Board might have
won," Mr. Stone said, "because of the opposition which had developed.
Yet, comparatively few persons have read the Marketing Act or know of
any objective of the Farm Board except that involved in the Grain Stabilization Corporation."
Repeal of the Marketing Act would set agriculture back twenty years,
he added. Every agricultural commodity was vitally affected by the way
it was handled. Four companies set the price of 95% of the tobacco crop.
Four milk companies controlled 50% of the milk industry. The Chicago
Board of Trade's membership of 1,600 carried out the buying orders of
five men.
Members of co-operative marketing organizations numbered 1,100,000 in
February of this year, including 125,000 farmers in grain marketing, Mr.
Stone reported. He challenged the statement that the Farm Board was
broke, asserting that in three years it had turned back 35% of its appropriations. Net earnings in excess of $1,000,000 for the Federal year ended
May 31 1932, were reported by the Grain Corporation.
According to the Chicago "Journal of Commerce," Mr.
Stone said that Government owned wheat has been reduced
to 14,000,000 bushels. The paper quoted adds that about
a month ago the wheat held by the Government was put at
28,000,000 bushels. On July 31 in 1931 it was 257,000,000
bushels.
Resolutions of National Farmers' Holiday
Association Adopted at Des Moines, Iowa—Six
States Join in Parley.
At a meeting in Des Moines, Iowa of farm delegates from
six states, resolutions were adopted in which it is declared
that having "met with repeated reversals in the endeavor
to obtain relief by legislation" "the farmer must refuse to
produce the nation's food and be pauperized for the purpose."
The resolutions "reiterate the fixed policy of the Na+ional
Farmers' Holiday Association to hold all products on the
farms until paid cost of production prices." "We demand,"
the resolutions state,"an embargo on each of the agricultural
products produced in the United States until the domestic
price of the respective product equals the domestic cost of
production." The Association commends "the Iowa farmers
for their courage in inaugurating and leading in the movement to withhold farm products so as to secure cost of pmduction and we urge that farmers of other states join with
the Iowa farmers." The farmers' "strike" in Sioux City is
referred to in another item in this issue of our paper. The
states represented at the Des Moines meeting were North
Dakota, South Dakota, Illinois, Minnesota, Nebraska and
Iowa. From the "Register" of Aug. 16 we quote:
"Holiday"
Debate Fund Raising.
Only 17 farmers remained throughout the evening awaiting the resolutions
committee report.
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Financial Chronicle
Volume 133
"The brokerages and commissions upon this vast volume of transactions
in grain which never existed runs into many millions of dollars. These
millions are a levy upon grain producers, directly or indirectly, and a
direct income to members of the Chicago Board of Trade and its Clearing
Corporation. It is for the right to collect these millions in tolls that the
Board of Trade is fighting, and it is for the right to secure and retain the
full value of his commodity that the producer and his organizations are
fighting.
Claims Higher Prices.
They continued to debate methods of raising funds for the holiday program and to discuss the actual goal of their strike and still in session at
1 a. m.
The holiday is meeting with success in Iowa after a week's trial and is
spreading rapidly throughout the country, national leaders declared.
"Does Not Want Violence."
Although not making any definite statements as to their general policy
whenever the strike encounters civil authorities, E. N. Hammerquist of
Farmingdale, S. Dak.. Vice-President, declared the holiday movement
does not want violence. Other officers agreed with him in the statement.
The same paper in its August 17 issue said:
After considering organization details all day Tuesday, directors of the
-National Farmers' Holiday movement left for their homes Tuesday afternoon, Aug. 16.
They appointed Matt Grennan of Sterling, Ill., farm owner, as a special
representative of the group to solicit financial and moral support from
business groups and from Chambers of Commerce.
Takes Office.
Grennan took office at once and expects to make solicitations throughout
the United States.
Directors said they expected to speak at various meetings and to assist
other states in organizing the farm holiday or strike.
Plan Strike Soon.
South Dakota farmers will declare the strike some time this week, according to E. N. Hammerquist, Farmingdale, S. Dak., Vice-President of
the national movement.
John Bosch, Atwater, Minn., National Secretary, will speak at a holiday
meeting in St. Paul, Minn., to-day. E. E. Kennedy, Kankakee, Ill.,
expects to go to Colorado and Kansas to aid farmers in organizing.
The Secretary announced that 120,000 Iowa farmers have signed pledges
for the holiday movement.
The text of the resolutions adopted on Aug. 15 by the
delegates at the meeting of the National Farmers' Holiday
Association were given as follows in the Des Moines
"Register":
PREAMBLE.
Present conditions demonstrate that those who now dominate American
Industry and government are either unable or unwilling to provide economic justice or security for the farmer or common people as a whole.
In 1927 the corn belt committee, representing 36 farm organizations,
issued the statement and pledge that iffarmers continued to be denied justice
through legislation, the time must and will arrive when the farmers must in
self-preservation, present an organized refusal to deliver farm products at
less than production costs.
"Must Be Remedied."
We believe that time has now arrived. We have met with repeated
reversals in the endeavor to obtain relief by legislation. If Americanism
and the independent American citizens are to exist, present conditions must
be remedied. The farmer must refuse to produce the nation's food and be
pauperized for the service.
We, therefore, reaffirm and pledge our support to the program of the
National Farmers' Holiday association.
RESOLUTIONS.
In order to avoid any confusion that may arise as to the marketing of
farm products, we reiterate the fixed policy of the National Farmers' Holiday Association to hold all products on the farms until paid cost of production prices.
We hold that any and all efforts to compromise this established policy
are absolutely unfair to the fundamental principle of this organization.
1. We recommend that the courts and government be called upon to
invoke their special police powers in assisting to prevent the forced sale of
any farm commodities for the satisfaction of liens and indebtedness thereon
until the price level of such commodities shall have reached the cost of
production.
Prevent Forced Sale.
And we call upon the Sheriffs, States' Attorneys and all other Court
Officers to co-operate in carrying out such a program so as to aid in preventing the forced sale of any and all commodities by foreclosure sale or sale on
execution to satisfy any and all liens and indebtedness on such commodities.
2. We recommend the adoption of the following so that the farmer may
actually retain his commodities on the farm:
Owing to the long continued failure of farm commodity prices to bring
cost of production which has brought ruin to over 90% of the farmers, and
due to the fact that nearly all the crops are mortgaged and that no credit
Is available for harvesting and threshing same, we, the farmers of the
Middlewest, in meeting assembled, now propose by direct action to bring
relief to ourselves and families through the following course of procedure:
(a) Self preservation is still the first law of nature and we agree to keep
all of our products which can possibly be kept on the farms, and hold same
until the time shall have arrived when farm products shall bring a market
price equal to the cost of production.
(b) We pledge ourselves to protect one another in the actual possession
of our necessary homes,livestock and machinery as against all claimants.
(c) In order to further carry out these purposes, we recommend that
where local officers of this Association deem it advisable that food depots be
established to contribute surplus food to those who are friends of our cause,
and are unable to pay cost of production prices.
(d) We hold that society having failed to function in such a manner as
to assure to labor the results of its toil, we shall in all cases be guided by
natural law of human rights as opposed to property rights.
(e) Society has no moral or just right to expect or force any group of
society to perform services for less than the cost of performing such services.
3. We oppose any action that would tend to Curtail the right of free
speech or free assemblage as guaranteed us under the constitution and
we condemn any proposal which would in any way reestablish and make
operative any system of Councils of Defense tending to restrict the right
of free speech or free assemblage and demand repeal of that law.
Ask Embargo.
4. Whereas, every suggestion relative to increasing prices of our farm
questions
and statements regarding supposed
products is confronted with
supplies of farm products, both domestic and foreign, which figures are so
conflicting as to be of no value for any purpose, but which are damaging
to agriculture.
Be it resolved, that we demand an embargo on each of the agricultural
products produced in the United States until the domestic price of the respective product equals the domestic cost of production.
On motion duly seconded the above resolutions were unanimously adopted,
1252
Financial Chronicle
5. We believe that the success of this program of the Holiday Association
requires the setting up and operation of an adequate marketing method
which will allot the selling of farm products so that possible surpluses will
be retained and carried by the individual farmer on his farm rather than
accumulating in market centers.
Stafford, Montana Commissioner of Agriculture, asserted he would advise
Governor J. E. Erickson of that State that the proposal is unnecessary.
Another resolution adopted at the Minot meeting asked the Federal
Government to advance $1 an acre to help harvest crops in northwestern
North Dakota which were affected by last year's drouth.
Officers Be Utilized.
We recommend that the National Executive Officers be authorized to
appoint and work with a committee for the purpose of devising ways and
means of carrying out the marketing program.
And we suggest that the local county and state officers be utilized in
carrying out the marketing methods agreed upon. Until the farmer secures
legislation which would enable him to receive cost of production for the
domestic market, we believe that he must do for himself what he has failed
to secure by legislation.
•
If it becomes possible for the farmers to secure their objectives more
simply and directly by legislation, we urge the support of such legislation.
As to the inception of the movement for dollar wheat, we
quote the following (Associated Press) from Tolna, N. Dak.,
July 20:
Commend Farmers.
We commend the Iowa division of the Holiday Association and the
Iowa farmers for their courage in inaugurating and leading in the movement
to withhold farm products so as to secure cost of production, and we urge
that farmers of other states join at the earliest possible moment with the
Iowa farmers in the struggle for economic and social justice.
6. We commend the newspapers, press services and radio stations that
are presenting the facts relative to this Holiday Movement. We denounce
as absolutely unfair those mediums of publicity that have circulated unfair
and misleading reports. We urge that all farmers depend upon their
recognized officers for accurate information concerning this movement.
Dollar
Wheat "Strike" in
North Dakota—Movement
Gaining—Governors of Three States
Asked, but Declined, to Prevent Shipments.
Reported
Under date of August 15 Associated Press advises from
Bismarck, N. Dak. stated:
The North Dakota wheat "strike" went into effect today with supporters
claiming thousands of farmers will hold wheat until the price is $1 a bushel.
Dell N. Willis, author of the plan, said the movement had gained in the
two Dakotas, Montana, Minnesota, Washington, Oregon, Kansas, Idaho,
Texas, Oklahoma and Nebraska.
Farmers have been asked to sign resolutions setting the minimum price
of wheat from the 1932 crop, having as its basis the Winnipeg price plus
the 42 cent tariff with the usual discount for lower grades.
Governor George F. Shafer of North Dakota and Governor J. E. Erickson
of Montana, Mr. Willis said, have endorsed the plan, as have a number of
Chambers of Commerce and commercial clubs.
•
Aug. 20 1932
On August 12 it was stated in an Associated Press account
from. Tolna that the Willis Movement proposes that farmers
hold their wheat until prices reach $1 a bushel and after that
not to sell more than 10% of their crop a month to insure
"orderly marketing."
Mr. Willis was reported as stating on Aug 15 that he is
willing to work with the Farmers National Holiday Association and has invited that organization to cooperate with
the sponsors of dollar wheat. He is also .aid to have stated
that a plan of financing the threshing bills of farmers whn
hold their wheat is being worked out by officials in Northwestern States.
From the "Wall Street Journal" of Aug 15 we take the
following:
The North Dakota "strike" for $1 wheat will begin this week. At Devil's
Lake, N. Dak., Friday, several hundred farmers signed agreements not to
sell.
E. J. Weiser, president. First National Bank & Trust Co., Fargo, said
that in eastern North Dakota the farmers are in better financial condition
and not so badly pressed for debt. There is little of the sensational feature
that has manifested itself elsewhere but a strong tendency of farmers as
individuals to hold back.
"I think more than one-half the grain in eastern North Dakota that
normally would be marketed between now and the end of the year will be
held back in the hope of better prices," Mr. Weiser said.
On July 23 Associated Press advices from Minot, N. Dak.,
stated that the Governors of North Dakota, South Dakota,
and Montana were asked by farm leaders of 11 counties
to prevent shipment of wheat from their States until prices
rise. The accounts went on to say:
Under the request, shipments of wheat from the three States would
be prohibited until the No. 1 dark northern grade reached a price of $1.20
a bushel at Minneapolis. To day the top cash price for that variety in
Minneapolis was 61 cents.
More than 1,200 persons, most of them farmers from the 11 counties,
urged the proposal at a meeting last night.
Another resolution asked immediate Federal financial aid for harvesting
crops in the northwestern North Dakota area affected by drouth last year.
It said that from 80 to 90% of farmers in that section were unable to
buy supplies and asked that $1 an acre be advanced to help harvest crops
on which the Government holds seed liens.
Meanwhile,a movement under which North Dakota farmers pledge themselves to hold wheat for the $1 a bushel gained force.
Further advices (Associated Press) from Minot stated:
The hold for dollar wheat movement in North Dakota was spreading
to-day. Declaring they cannot make expenses at present grain prices,
farmers have organized to increase the amount of the return they receive
for their product.
First carne the demand of one group that wheat be held for $1 a bushel.
Then followed a resolution at another gathering here urging an embargo
on shipment of wheat from North Dakota, South Dakota and Montana
until it reached $1.20 for No. 1 dark northern at Minneapolis. It now is
61 cents.
Indications to day were that there would be no official embargo in the
three States as requested by the Minot meeting, Which 1,200 persons,
mostly farmers from 11 counties, attended Friday.
Governor G. F. Shafer of North Dakota and Governor W. E. Green
of South Dakota said they had no authority to take such action. A.
Across the fertile prairies of North Dakota, expected to produce one
sixth of the Nation's wheat output this year, is heard to-day a crescendo
chorus:
"Hold the grain for $1 a bushel."
If the sponsors are successful, the cry will be taken up throughout the
United States.
Dell Willis, Tolna farmer, is Chairman of the organization which has
stirred the farmers in more than 400 North Dakota townships to pledges
holding their wheat, effective Aug. 1, unless and until the dollar level is
reached.
"This period of low prices finally has brought us to a position where it
is either sink of swim," Willis said. "Now let us get together and put a
fair price on our product. We will set the price and hold our wheat until
we get our price."
Organizations are perfected along township lines. As producers sign
an agreement, it is deposited with the township board. Certain farmers
are designated to see that the pledge is adhered to.
Farmers participating in the movement who lack storage room are allowed to haul the grain into elevators and receive storage tickets.
Federal estimates as of July 1 gave North Dakota an indicated wheat
production of 124,000,000 bushels and a national total of 737,000,000
bushels.
Liquidation of Surpluses of Wheat and Cotton Immediate Problem of Country, According to Prof.
Duddy of University of Chicago—Cites Need for
Finding Outlets for Crops Abroad—Would Lower
Tariffs—Explains "Domestic Allotment Plan."
"There are twlo general paths which American agriculture
may follow within the next five to ten years," Edward A.
Duddy, Professor of Agricultural Economics in the chool
of Business of the University of Chicago, said in an .nterview
Aug. 6. "One," he said, "is a continuation of he policy
of economic nationalism which we have be n following,
with emphasis upon national self-sufficiency; the other is
a policy of international economic co-operation." Prof.
Duddy went on to say:
The first of these policies bears differently upon different agricultural
enterprises. Farm products may be roughly classified into those in which
there is a large export movement and whose prices are made in the world
market, and those products which are sold exclusively in the domestic
market or which are on an import basis.
The effect of an isolationist policy bears most heavily upon the first
group, which includes such products as wheat, cotton, tobacco, hogs and
rice. If we compare the prices of these products with the prices of agricultural commodities sold exclusively in the domestic market, we find that
by April 1932, the first group had fallen in price one-third more than the
other products.
About three-fourths of our exportable commodities are consumed at
home, but the one-fourth which must be sold in the world market is sufficient to bring the price of the other three-fourths very near to the world
market price, allowing for differences in transportation. The tariff has not
been effective, and under freely competitive conditions it would seem
inevitable that producers of these export commodities must withdraw from
the export market altogether and adjust to a domestic basis. Of course
there will always be a market abroad for American cotton and tobacco, but
wheat producers would be hard hit by such a policy. Withdrawal from the
export market would entail a contraction in the agricultural plant as s
whole of about 53 million acres. Reduction on such a scale would involve
considerable suffering on the part of present holders, and send into the
cities added thousands of people to swell the ranks of the unemployed.
The second alternative for agriculture and the nation to follow is international economic co-operation in which the purpose should be to remove
the checks to international trade by a gradual lowering of tariffs, the
removal of import quotas, and the adjustment of war debts and reparations.
Some efforts looking to this co-operation have been made, but the
political difficulties are so enormous that no immediate favorable results
can be looked for. The British Empire Conference meets in Ottawa this
month and undoubtedly the problem of what shall be done to benefit
agricultural producers in the British dominions will be discussed. In
October a World Economic Conference will meet in London, and here
again these problems will be discussed, but it is unlikely that much will
come of it in the way of relief for American agriculture.
The immediate problem in this country is to liquidate the large surpluses
built up during the last three years, especially in wheat and cotton. For
the moment we need to pay greater attention to finding outlets for our crops
abroad. We have a ridiculously restrictive tariff system. Even though the
debts cannot be paid, are we not in a good bargaining position to induce
foreign countries to lower their tariffs in return for favors from us?
Prices will have to remain low to attract the foreign buyer and to restrain
the producer at home from expanding production further. This will inevitably result in curtailment of acreage and in a considerable reorganization
of agriculture in the direction of lower costs and the elimination of higher
cost marginal areas. It will probably mean a continued struggle for existence
by farmers at or below the margin for many years, with resulting low prices
for all.
Some bolder spirits, seeing the inevitability of such an adjustment, have
declared themselves in favor of planning to meet the present emergency by
making use of the so-called Domestic Allotment Plan. The purpose of the
plan is to increase the net returns to producers of those commodities when
the returns they are receiving "are in an unduly low proportion to the costs
of goods and services that farmers buy."
It is claimed by the advocates of the plan that it will be the means of
Immediately increasing the purchasing power of about one-third of the
farm group by about $500,000,000. It would be the means also of getting
control of production and thus stabilizing the market. It would do this
without cost to the government, the added income to the farmer being paid
by city consumers. This tax on the individual consumer would, however,
be so small as not to affect consumption. It would also be a less painful way
of adjusting production over a period of years to a domestic market basis.
Volume 135
Financial Chronicle
The plan has been before both the Senate and House Agricultural Committees of the last Congress, but no action was taken.
Meanwhile the American farmer is making his own adjustments. He
Is buying less fertilizer, fewer farm implements and tractors and still fewer
automobiles. On many farms horses are reappearing to take the place of
worn out machinery. One crop farmers are growing more of the family
food supply: More crop land will be retired into pasture and fewer livestock will be fed until the prospect of a feeding profit appears.
All out of pocket money costs are being reduced to a minimum. Thousands of farms in high cost areas are being abandoned or foreclosed and a
new public domain is reappearing in many States through the taking over
of tax delinquent land. Former owners have become tenants, and tenants
have become hired hands; the standard'of living has declined in the country
as it has in the city. But the farmer who owns his land clear has a resistance
-to economic pressure far greater than the wage worker out of employment
'In the city. Such farmers will come through with greatly reduced income
but with leas suffering than people who are out of work in the cities.
Signs are appearing, however, which give evidence of a clearing away of
accumulated food surpluses and possible contraction of further production.
The Carry-over of wheat on July 1 was above last year, but the new crop
.of winter wheat, which is the basis of our exports, is 50%.
Fcod in cold storage is much below the five year average. Fog supplies
on farms are being contracted. This may or may not mean better prices
to the farmer, provided city people can pay higher prices. We may yet
see food scarcity in the larger cities without much increase in the purchasing
power of city consumers.
The problem of fixed charges on agriculture demands that some of the
-tax on farm real estate be shifted to incomes and that governmental expenses be reduced. Mortgage indebtedness will be refunded through an
-extension of the operations of the Federal Land banks, already provided
for, and through amortization payments on loans due to other banks and
insurance companies, and by reduction in interest charges. Short term
loans are available through the Intermediate Credit banks, but there is a
reluctance on the part of all credit agencies to finance the holding of crops
off the market or the purchase of land.
Agriculture will without any doubt recover along with business and the
rebound will be rapid in the case of these basic commodities once the large
surpluses are cleared up. But one cannot view with optimism any long
run of expansion In agriculture in this country in excesss of the rate of population growth, and it must be remembered that our population, according
to the experts, will be stationary about 1960. There is still much land in
the United States which is potentially productive,and much unused capacity
in lands already under cultivation. It requires but little skill to bring new
land into use for such crops as grain, cotton or tobacco. Prices cannot rise
greatly without having this effect. Increased mechanization may result
In lower costs and less human labor on many farms, but we may look also
for a growing class of subsistence farmers for whom farming is not a business but merely an occupation.
The brightest spot on the landscape of the future is a type of farming
-which will be combined with occupation in industry in the smaller towns.
This would supplement the income received from agriculture and relieve
the pressure of population already too great on our large industrial centres.
Of this new development there are already signs.
Government Moves to Help Farmers Gather Cotton
Crop—Four-Fifths of a Cent a Pound Advance and
Use of Cotton Seed Authorized to Defray Costs—
Storing for Later Sale Planned.
Use of the cotton seed and advances wherever necessary
of four-fifths of a cent a pound on lint cotton to cover such
costs as picking, ginning, and bagging, has been authorized
for farmers who borrowed money from the Government
last spring, H. S. Clarke, national director of the 1932
Crop Production Loan Office, announced on August 17.
At the same time Mr. Clarke announced a policy aimed at
promoting orderly marketing of the cotton upon which
Federal funds have been loaned. Although crop production
loans fall due Nov. 30 1932, farmers may store cotton in
licensed warehouses to be sold at any time between storing
and March 1 1933, or they may store it with cotton cooperatives for sale by March 1 or May 1 1933. The announcement also said:
The new policy gives the farmer three choices in his marketing:
First, he may contract to sell his cotton to a dealer for cash. Under
this plan, to finance picking and other harvesting costs, the grower may
retain the seed and the dealer may advance when necessary to him fourfifths of a cent a pound and for this amount the Crop Production Loan
Office waives its prior lien against the cotton in favor of the dealer making
the advance. The amount of the crop loan is then deducted from the reInainder.
Second, the grower may store his cotton for later sale in any Federal
licensed warehouse, and retain the seed to pay harvesting costs.
Finally, he may store his cotton with the Cotton Growers Co-operative
Association, keep the seed to pay costs and in addition, obtain from the
.ea-operative an advance, when necessary, of four-fifths of a cent a pound
to meet the costs of picking and marketing.
The plan contemplates disposal of all cotton stored as collateral against
1932 crop loans by May 1 1933. The regulations provide that such cotton
stored in Federal licensed warehouses must be sold by March 1 1933.
Cotton stored as collateral for such loans in co-operatives in an optional
pool must be sold by March 1 1933 and cotton so stored with co-operatives
in a seasonal pool must be sold by May 1 1933.
All cotton stored must be insured and warehouse receipts endorsed by
the borrower to the Secretary of Agriculture. The policy gives the option
of sale to the farmer, except that if at any time 80% of the market price
-of the cotton stored as collateral is less than the amount of the full indebtednew of the borrower, then, automatically the cotton is to be sold.
Almost Total Lack of Mortgage Money Supply Dominates Real Estate Situation According to SemiAnnual Survey of National Association of Real
Estate Boards—Interest Rates, Rents, Etc.
Almost a total lack of mortgage money supply in city after
city is the dominating feature of the present real estate
situation, as indicated in the 19th semi-annual survey of the
1253
real estate market compiled by the National Association of
Real Estate Boards. The survey is based on confidential
reports received from member boards in 358 cities of the
United States and Canada. The Association under date of
July 23 had the following to say regarding the survey:
The situation as revealed by the survey is of importance as indicating
both the need of credit relief as contained in the Federal Home Loan Bank
bill, now before the President for his signature 'since enacted], and the scope
of effect which the bill may have in encouragement of activity, beginning
with the refinancing of existing home mortgages and extending, in its
direct and indirect effects, into every real estate field.
"Capital will not loan." "No mortgage money avaialble." "Mortgage
funds of any kind almost impossible to procure." "Banks not loaning
Building and loan associations not able to loan. Private investors not
loaning." These are typical comments, made in addition to the regular
questionaire reports. Such a comment was added by 56 of the boards
reporting.
Of the cities, 88% report loans seeking capital. Only 4% have a situation in which capital is seeking investment. Only 8% report an equilibrium
In money supply.
Abnormality of present credit situation for long-term loans is indicated in
an extreme way in the reports from the largest cities, those of over 200,000
population. In this group, the money centers and sub-centers, not one city
reports capital seeking loans. Analysis of the reports according to size of
cities shows the greatest scarcity at the two extremes. Of the largest cities,
those of 500,000 population and over, 92% report a money shortage, 8%
an equilibrium. Of cities of the smallest size-group, those under 25,000
population, 94% report capital scarcity.
Interest Rates.
The survey bears out general observation that interest rates on mortgage
money are failing to show any drop such as might have been expected in a
situation where capital is known to be accumulating. Falling rates on
mortgage money appear in only 4% of the cities reporting. Acutal rising
rates are shown in 38% of the cities, a steady condition in 58%.
Survey Shows Real Estate Stability.
Traces of an incipient building shortage begin to appear in the survey
reports.
Unemployment, reduction of family incomes, commercial curtailment,
banking and investment timidity—all these have greatly reduced the demend for space, and brought real estate activity to the lowest level since
1924, when its statistical records began to be compiled on a national scale.
Nevertheless, the survey shows the comparatively high degree of stability
which real estate is evidencing in the face of general conditions. Some
beginning of a greater real estate activity than was present a year ago is
shown in the reports notably of West, North Central, Southern Atlantic,
and Pacific sections. Here 12%, 15% and 12%, respectively, of the cities
reporting show a more active real estate market than prevailed at this time
last year.
Cities of the largest size, those of over 500,000 population, and cities of
the smallest size, those under 25,000 population, are the two groups which
show the greatest activity. In 17% of the cities of over 500.000 pop Aation
the market is more active than last year. In 16% of the cities with a population over 25,000 the market is more active than last year.
Rents Hold Better Tan Sales Prices.
For the country as a whole, 22% of the cities show a market on a level
with last year, 9% a more active market, and 69% a less active market.
Selling prices are almost uniformly reported lower than last year. Rents
are in general at a lower level than they were a year ago. Rents on the
whole have shown a greater holding power than have selling prices.
Central office properties and apartment structures show the greatest rent
stability. In 21% of the cities apartment rents are on approximately the
same level as last year. In 27% of the cities central office building rents
hold to last year's level. The biggest cities show the strongest stabilization
in demand, both for central property. In cities of over 500,000 population,
45% report a stabilized situation in central office property, 25% in central
business property. For apartment rents, however, it is cities of a population between 200.000 and 500,000 which shows the greatest stability, with
30% reporting these rents holding at the level of last year.
Stabilization of rents apparently means the approach of a balance between two present forces, general business uncertainty and recession on the
one hand, long-continued stoppage of construction on the other. In the
present generally upset investment situation degree to which rent return is
being maintained is a strong measure of the steady quality of real estate use
and the stability of real estate income return.
Fort Dearborn Mortgage Company Formed to Release
Funds Tied Up in Cook County (Ill.) Real Estate.
Three leading Chicago financial institutions have joined
in organizing the Fort Dearborn Mortgage company, designed
to set free funds now tied up in distressed Cook County real
estate investments. The capital has been supplied by the
Continental Illinois Bank & Trust Co., the First National
Bank of Chicago and the Chicago Title & Trust Co. Other
financial institutions will be invited to participate. With
authorized capital of $1,500,000, the new institution, through
its corporate borrowing power, will have $15.000,000 to
$20,000,000 available for lending purposes, it is anticipated.
George H. Dovenmuehle of Dovenmuehle, Inc., is President of the new company. William G. Lodwick is Vicedent and General Counsel. The directors are D. R. Lewis
and Leroy Pape, of the Continental; Craig B. Hazelwood
and Louis K. Boysen, of the First National; Holman D.
Pettibone and W. V. Carroll Jr., of the Chicago Title and
Trust; Mr. Dovenmuehle and Mr. Lodwick. Under the
operating plans of the new company, owners of real estate
securities, bondholders'committees and others will be enabled
to borrow needed funds hitherto unobtainable by them, one
of the incorporators said.
"The seriousness of the situation and the possibiLties
awaiting the corporation," it was pointed out by one of the
incorporators,"are indicated by the fact that in Cook Coun-
1254
Financial Chronicle
ty, mortgages and real estate bonds totalling approximately
$1,000,000,000 were in foreclosure at the beginning of 1932."
He is further quoted as saying:
The great number of receiverships has a distressing effect on rental
values, which in turn is responsible for additional defaults,further retarding
the market for real estate and real estate securities. Real estate bondholdtheir
ers clamor for some return from the properties which are securities for
not
bonds. Many required changes and improvements on properties are
dollars
of
millions
being made. The operations of the new company will put
of
out
buildings
get
to
money
Into circulation by enabling the lending of
realize
receivership and it will hasten the day when owners of securities can
on their holdings. It will break the financial log-Jam that has stagnated
the local real estate market.
Temporary offices of the company are at 105 West Adams Street.
Exchange of No Par Stock for Stock of Par Nf alue Exempt from Transfer Tax Under Ruling of Internal
Revenue Bureau.
From the Chicago "Journal of Commerce" we take the
following from Washington, Aug. 16:
is
Exchange of outstanding stock of no par value for stock of par value
not subject to either the issue or transfer tax, according to a ruling to-day
by the Bureau of Internal Revenue.
Federal Income Tax Rule Amended on Foreign Credits
—Definition Changed to Conform to Decision of
Supreme Court in Case Involving Credit for Taxes
Paid to New South Wales.
The following is from the "United States Daily" of
Aug. 17:
and
The income tax regulations providing that United States citizens
corporations may credit income taxes paid to foreign countries was amended
by the Bureau of Internal Revenue on Aug. 16 by providing that "foreign
or
country" shall mean any foreign State or political subdivision thereof,
any foreign political entity, which levies and collects income, war profits,
or excess profits taxes.
It was explained orally at the Bureau that the amendment is intended
in
to make the regulations conform to the decision of the Supreme Court
the case involving a credit for taxes paid to New South Wales (285 U. EL 1).
The amended regulation follows in full text:
To Collectors of Internal Revenue and others concerned:
April 17 1919; No. 45 (1920 Edition), approved Jan. 28 1921; No. 82,
approved Feb. 16 1922; No. 65, approved Oct. 6 1924; No. 69, approved
Aug. 28 1926, and the second sentence of article 692 of Regulations No. 74,
approved Feb. 15 1929, are hereby amended to read as follows:
"'Foreign country' means any foreign State or political subdivision
thereof, or any foreign political entity, which levies and collects income,
war profits, or excess profits taxes."
(Signed) DAVID BURNET, Commissioner of Internal Revenue.
Approved: Aug. 15 1932, James H. Douglas, Acting Secretary of the
Treasury.
Federal Income Tax—Corporations Subject Thereto
on Repurchase of Their Own Bonds Even if Purchase Is for Investment or Sinking Fund Purposes.
Corporations will be subject to Federal income tax on the
repurchase of their own bonds below the issuance price,
even if the purchase is made for investment or for sinking
fund purposes, under a ruling issued by the General Counsel
to the Bureau of Internal Revenue, according to J. S. Seidman, tax expert of Seidman & Seidman, certified public
accountants. Mr. Seidman says:
"The new ruling covers a phase about which there has been considerable
doubt. The regulations declare that gain is derived by a corporation on a
repurchase of its bonds below the issuance price, only if the bonds are
retired. It has been contended by corporations that when bonds are purchased for investment or for sinking fund purposes they are not retired,
and hence the regulations do not apply. The General Counsel has just
held, however, that a purchase under such circumstances constitutes a
withdrawal or retirement of the bonds from circulation, and though there
may be no technical retirement, that does not change the fact that income
has been realized. Gain or loss, he says, is determined by the repurchase,
regardless of the intent to resell."
Oil Dealers Privileged to Post Federal Oil Tax.
An item shown or billed to a customer as a Federal tax
must in fact represent only an amount that has actually been
paid to the Federal Government as a tax, and an oil company
is privileged to post at retail stations the sign: "Lubricating Oil, per quart, 30c.; plus Federal tax, 1c.; total, 31c."
This is the ruling of R. M. Estes, Deputy Commissioner of
the United States Bureau of Internal Revenue, on this question, according to information reaching the American Petroleum Institute. The latter, on Aug. 13, further stated:
Commissioner Estes said that price-posting under these circumstances,
wherein a manufacturer of lubricating oil sells a quantity to a distributor
and itself reports and pays the tax to the Federal Government, the distributor later posting price plus tax, is not in violation of Section 1123 of
the Revenue Act of 1928, which, under Section 627 of the Revenue Act
of 1932, applies to taxes imposed by Title IV of that Act.
"It makes no difference," the Commissioner said, "what manner the
manufacturer bills to the distributor. The manufacturer may bill the
product as so much a gallon plus tax, or it may be sold at a definite price
Including the tax, or it may be sold at a flat price with no reference to
the tax whatever. The important point is that where an item is shown
or billed to a csutomer as a Federal tax, it must in fact represent only an
amount that has actually been paid to the Federal Government as a tax."
Aug. 20 1932
Short Selling an Essential Part of Free Market in
Securities, According to President Sykes of New
York Curb Exchange.
Asserting that normal short selling is an essential part of
a free market in securities, Howard C. Sykes, President
of the New York Curb Exchange, comes to the defense of
the security exchanges in an article in "Credit and Financial
Management," the official publication of the National
Association of Credit Men. Mr. Sykes says:
It is the vital truth not generally recognized to-day that the severity
of the decline in security prices in 1929 was due to the absence of any sizeable "short" interest in the securities market. During the long period
of bullish operations, those who had realized that prices for stocks were
rising far above their intrinsic valuations and who had taken short positions
In the market with a view to stemming the tide and stabillzing prices, had
time and again been forced to cover their commitments as a result of a
nationwide buying movement which had gained irresistible momentum.
Consequently, there were few bearish interests or bearish operators
left in the market when the reaction actually set in and it happened that
when general liquidation appeared, based upon a changing business situation, the market became decidedly top-heavy. Figuratively speaking,
all were sellers with no buyers. Had there been a substantial short interest
in the market in 1929, not only would the hysterical bullish speculation
have been reasonably checked, but, in my opinion, the severity of the
reaction would have been greatly modified.
The opinion in some quarters seems to predominate that anyone who
sells short is a rascal and ought to be severely punished. We hear much
argument about short selling during these depression days. In the years
of the bull market it was seldom mentioned. However, in discussing
this practice, one must consider its effect under any and all circumstances.
A speculative short sale is one in which the principal sells a stock which is
not owned by him, but which he is obliged to borrow in order to make
delivery. He must return these borrowed shares at some future date.
Therefore, a short sale resolves itself into a contract to deliver at a future
date a given number of shares of stock, at a fixed price, which are not
owned at the time of sale.
Two essentials which determine the success of any enterprise are knowledge and judgment. If we know, to the exclusion of others, that certain
events are about to happen, we take advantage 'If that knowledge and
tells us that certain
make transactions accordingly. If our judgme
happenings are likely to occur, we act in keeping with it. The application
the price of anydetermines
large
extent,
very
a
of these two factors, to
thing, whether it be needles or steam shovels.
The farmer is an example. He estimates that his plantings will produce
a certain amount of wheat. If he believes that the price of wheat will
decline, he sells his crop for future delivery. In the event that his crop
should be damaged or falls of production, he would be obliged to purchase
the wheat in the open market to meet his contracts.
Consider the position of a jobber whose entire business consists of trading
In merchandise. In almost all his dealings he sells a product without
actually owning it. He expects to buy it at a cheaper price and so make
a profit. The farmer and the jobber, like the short seller of stocks, all
contract to deliver something in the future which they do not own at the
time the contract is made. This same operation occurs in many other
lines in which agreements are made to deliver goods in the future.
So it appears that the ability to buy and sell freely is essential to good
business practice. It is inevitable that some speculation shall arise in
conjunction with such operations. Speculation is purely and simply an
adjunct or accompaniment of free market trading and not a controlling
Influence. The laws of supply and demand and intrinsic values are the
controlling influences, and the speculator profits or loses accordingly as
his judgment is good or bad concerning conditions and the future trend
of business.
In the circumstances, it is rather futile at this time to point the finger
of accusation at the exchanges of the country and attempt to find the
causes of trade stagnation in that quarter. It is well to keep in mind
that exchanges and markets are the outgrowth of trade intercourse and
development. They are the machinery for expediting the business of
commodities and manufactured products and investment in these and not
machinery for manipulation of the prices of these commodities and products.
Exchanges facilitate trade and do not hamper it. Were there no free
and open markets for securities and commodities few would at any time
have actual knowledge of the value of their holdings. Consequently such
holdings would not have an accurate collateral value for credit purposes.
Hardly anyone could arrive at a correct estimate of the intrinsic value
of a security when seeking to purchase or know what price to expect when
selling.
As a development of modern industry, securities and commodity markets
• are an absolute economic necessity. It would require but little imagination
to picture the stifling effect upon industry that would follow a discontinuance of the orderly functioning of the present-day exchanges, even
for a limited period.
•
Proposal to Extend Closing Hour of Chicago Board of
Trade Voted Down—Rules Amended Regarding
Delivery Months and Cotton Trading Parctices.
On August 5 the members of the Chicago Board of Trade
registered their opposition to a proposal to extend the
Board's daily closing hour (except Saturday) to 2 P. M.,
Instead of 1.15 P. M., as at present. The proposal was defeated by a vote of 583 to 273, according to the Chicago
"Journal of Commerce" of Aug. 6, which further said:
The voting was heavy and the ballots cast by 253 members living in other
cities constituted a record. Two other amendments to the rules, regarding
delivery months and details of delivery in cotton, were adopted.
Communications were received from the grain markets at Duluth, Minneapolis, Omaha, Kansas City, Wichita, Hutchinson, Toledo, Boston and
New York. These exchanges were vitally interested in any changes of
time which might affect the handling of grain in their territory, Chicago
quotations reflecting world values and serving as an accurate register of
price opinion.
This condition, it was pointed out, made it necessary for the cash grain
markets in smaller cities to wait until the Chicago market closed before
sending out overnight bids for grain or making offers on flour commitments or firm offers for export.
Revised cotton trading rules adopted to-day will permit trading the
last five days of a month in that same month a year hence and permit
delivery from two warehouses in the same city on a single cotton contract.
Financial Chronicle
Volume 135
The warehouses, under Board of Trading cotton rules, must be located
at Houston, Galveston, or Texas City, Texas.
Several weeks ago, when it was announced that the change
in the closing hour was to be acted upon August 5, it was
contended by James E. Bennett, a member of the Exchange,
and senior partner of the firm of James Bennett & Co., that
Chicago commodity dealers are not serving their customers
properly when they close the doors and stop trading on the
Chicago Board of Trade at 1:15 P. M. As grain is the principal commodity traded in on the Board of Trade, Mr.
Bennett declared it was his belief that the exchange should
extend its trading hours to a time which would be of greater
benefit to customers, the grain dealers and raisers of the
West. The present closing time, he contends, affords poor
accommodation to many interior grain dealers who, by
ancient custom, dine at noon and return to their offices to
find the market closed. Mr. Bennett also said:
"Grain is grown west of Chicago where, when we close our market on
Chicago Daylight Saving Time, it is only 12:15 in most of the Western
Belt. In Montana, a great grain State which operates on Mountain
time, we close at 11:15 A. M. In the Pacific Northwest States, which
are actually and potentially large producers of wheat and other grains,
the market is closed at 10:15 A. M. It is not necessarily the threequarters of an hour additional time that means so much. It is the time
of the day that is the important thing. The commodity market is west.
We should cater to the West. My contact with the Chicago Board of
Trade goes back to the days when there was an active afternoon market
and memory recalls discussion among older members of periods when
trade continued in the evening, sometimes in hotel lobbies, and when the
Board of Trade was the center of the commodity world. Why not extend
our service again to those who need it?"
Associated Press advices from Chicago July 26, stated:
For forty-four years the grain trading has been from 9:30 A. M., to
1:15 P. H. Previously, the working hours ranged from 9:30 A. M., until
2:30 P. M., with about a half hour off for lunch.
Common and Preferred Shares of Brockway Motor
Truck Corp. Stricken from New York Stock Exchange Trading List—Failure to Make Periodical
Reports Assigned As Reason.
On Aug. 11 the New York Stock Exchange ordered the
common and preferred shares of the Brockway Motor
Truck Corp. to be stricken from the list on Aug. 16 because,
it was said, the company failed to live up to the agreement
made for the listing of the shares which provides for the publication of periodical reports. The New York "Times" of
Aug. 12 from which the foregoing is taken further said:
It was the first instance in many years in which the Exchange has taken
disciplinary action against a company for this reason, although it has stricken
from the list shares of several companies for failure to maintain transfer
offices in New York. It was viewed as proof of the Exchange's increasingly
firm attitude with respect to its listing requirements.
Brockway Motor, the Exchange explained, agreed on June 26 1929, to
publish once in each year and submit to stockholders at least 15 days in
advance of their annual meeting, a statement of the financial condition, a
consolidated income account and a consolidated balance sheet for the previous year.
Brockway's annual meeting was scheduled for April 15. It was postponed
to Aug. 1, at which time stockholders approved a reorganization plan.
No annual report has been made public. Under the plan, a new operating
company to be called Brockway Motor Co., Inc., will take over all current
operations and assets, and will assume current and contingent liabilities
of the old company.
Interest Rates in Effect in New York Savings Banks.
The following is from the Aug. 12 "Bulletin" of the
Savings Banks Association of the State of New York:
A compilation of the interest rates in effect in the savings banks of the
State on July 1 this year shows that the average rate paid on that date
was 3.75% as compared with an average of 4.05% on Jan. 1 1932. The
high point in rates since 1879 was reached in 1929 when the average was
4.43%. From 1881 to 1919 the average was under 4%. The average for
New York City on July 1 this year was 3.50, as compared with 3.75% for
the State.
The rates paid by the banks of the five groups of the Association follow:
INTEREST RATES JULY 1 1932.
5% on 1st 5% on 1st
334%
and
$1,500, 4% *500434%
4%
434%
4%
on Balance on Balance
335%
9
Group I
2
-Group II
15
-1
4__
1
__
23
16
Group III
...
30
1
4
Group IV
6
__
34
...
2
1
Group V
1
1
_
—
_
89
2
36 •
Total
16
In Greater New York the rates were as follows:
INTEREST RATES JULY 11932.
334 & 4%
354%
4
Queens
Bronx
Richmond
25
1
Manhattan.—
22
Brooklyn
Total
1
1
334%
10
2
334 di 4%
63
1
Bill in Pennsylvania Legislature Permitting Limited
Branch Banking Killed in Senate Committee-Had Passed House.
A branch banking bill, introduced simultaneously in both
the Pennsylvania Senate and House on Aug. 1, wh ch would
have permitted a bank in Bryn Mawr to open a branch or
subagency at Ardmore, where there are no active banking
1255
institutions, has been killed in the Senate Committee on
Banks and Building and Loan Associations, according to
Harrisburg advices Aug. 12 to the Philadelphia "Public
Ledger," from which we also take the following:
The bill, sponsored in the Senate by William C. Freeman, Lebanon,
and in the House by Representative Philip Sterling, was drawn to apply
to all cities, boroughs or townships, but had particular application to the
Ardmore situation, and at Olyphant, Pa., near Scranton, where local interests had no convenient place at which to do their banking.
Under the terms of the measure, the Secretary of Banking was empowered to sell or lease real estate in his possession and to permit a banking
Institution, buying or leasing the property, if located in the same political
subdivision as the closed bank, to open a branch.
Opposition to the bill centered among the Senators, for the bill met no
difficulties in passing the House last Monday[Aug. 8]. While deliberations
of a committee are not public, unless there is a hearing, Senators on the
Committee of Banks and Building and Loan Associations are said to have
felt that this is no time for encouraging branch banks generally.
Both bills were sent to committee the night they were introduced, the
Sterling bill going to the House Committee on Banking which reported
out the measure at once as committed. The bill passed first reading the
same night, and passed second reading Aug. 2. Its final action in the
House this week attracted no particular attention.
The Sterling bill was messaged to the Senate last Tuesday fAug. 9), and
was referred to the Senate committee which had bottled the Freeman bill
since the date of its introduction. The committee Tuesday night decided
to postpone action on the Sterling bill indefinitely, which means it is dead.
The "Ledger" also said:
Opposition of Pittsburgh banking interests caused the defeat of the new
branch bank bill in the State Senate Committee, according to a report in
circulation here yesterday. It was said that several bankers of Pittsburgh,
who had heretofore made determined fights against branch banking in any
form in Pennsylvania, prevailed upon members of the Senate Banking
Committee to hold the bill in committee because in their opinion the present
Is no time to enact new branch banking legislation in the State, even though
the legislation was for the purpose of providing relief in communities without banking facilities.
It was pointed out that the Pittsburgh district has a "subterfuge branch
banking system," or chain banking by stock ownership. This includes
the ownership of sufficient stock in banks in communities surrounding
Pittsburgh by the larger Pittsburgh banks, which ownership gives the
Pittsburgh bankers considerable voice in the management of the institutions in which they own stock. This causes Pittsburgh interests to oppose
out-and-out branch banking.
Stock Units Sale Banned in Missouri—State Securities
Commissioner Contends System is "Unfair and
Inequitable."
The following from St. Louis, Aug. 16, is from the the
Chicago "Journal of Commerce":
F. T. Stockard, State Securities Commissioner for Missouri. has placed
an official ban on the sale of units of stock by brokers and commission
houses operating in the State. A warning to that effect has been sent
to about 100 stock and bond dealers in the State.
Stockard contends that the unit sales are "unfair and inequitable" and.
that it has been found that in most instances of such sales excessive loading
charges have been added to the price. These loading charges are not only
excessive but "unconscionable and tantamount to fraud." the letter to
the brokerage houses stated.
Brokers have been warned that a violation of the order will result in
the suspension of license.
Transfer of Gold From Wall Street Assay Office to New
Quarters on South Street.
What is described as the large t transfer of precious metals
ever made is represented in the removal of gold and silver
from the vaults of the old Assay Office at 32 Wall Street to
those in the newly erected Assay Office at South Street and
Old Slip this city. The transfer is made by way of armored
trucks. In the New York "Times" of Aug. 16 it was stated
that more than $1,000,000,000 in gold is being transferred
From the same paper we quote:
Silver of an estimated value of $62,000,000 already has been moved.
Big armored trucks were loaded with gold at the rate of $1,000,000 a
minute from a platform in a blind alley between the old Assay Office and
the Sub-Treasury. Sixty-eight trucks during the day (Aug. 15) went out
of the alley at the rate of one every four or five minutes, each loaded with
nearly five tons of gold. Gold runs about $1.000,000 for every ton and a
half, depending upon the fineness of the metal.
The value of each truckload was about $3,000,000 and the Armored
Service Corporation of Brooklyn, which has assumed entire responsibility
for the movement, has five armed men aboard every truck. These are
reinforced by a couple of armed guards of the Treasury Department. . . .
Durant Rose, Vice-President of the corporation, stands by, keeping a
watchful eye on the movement of every truck. He is present when the
custodian receives each sealed box of gold. The box's contents weigh one
and one-half tons and the box is sealed and attached to a handtruck which
is rolled from the platform into the armored truck. . . .
Allowed 20 Days to Move Gold.
The contract specifies 20 days each for moving the gold and silver, and
the miscellaneous articles, including equipment of the old Assay Office,
must be moved within 90 days. The contractors already have moved
silver dollars of an estimated value of $62,000,000. They hauled it in 411
loads during the last two weeks. The corporation plans to finish with the
gold, platinum and other precious metals within 10 to 15 days.
Platinum is specified in the contract because in some of the gold deposits
small quantities of platinum are embedded. The exact amount of gold
moved will not be known until the operation is completed because the
amount movable fluctuates daily according to the amount that comes into
the Assa Office.
The Armored Service Corporation was the lowest bidder for the transfer,
with a price of $19,500. It carries potential insurance up to $400,000,000
for any one moment with the Commercial Union Assurance Co., Ltd. of
London. Should the corporation fail to fill its contract within the time
specified it will pay a penalty of $850 a day. It has 30 trusted employees
at work on the operation.
1256
New
Financial Chronicle
Post on
Banking Created in
Supervisor of Liquidations
Massachusetts—
Named.
take the following
From the 'United States Daily" we
Boston, Aug. 8:
State Bank Commissioner Arthur Guy has created the office of Supervisor of Liquidations in the State Banking Department, to assist him in
the administration of the affairs of the 16 trust companies and two savings
banks nal, in the possession of the Bank Commissioner.
A statement issued by the Bank Commissioner follows in full text:
The Cemmissioner of Banks has appointed Henry H. Pierce, of Wollaston,
as SupersIsar of Liquidations, to assist him in the administration of the
affairs of the 16 trust companies and two savings banks now in his
possession. The assets of the 18 institutions, according to their book
values, are in excess of $100,000,000, and there are over 200,000 depositors
interested therein.
Mr. Pierce entered the banking business more than 20 years ago in Malden,
rising through various channels of banking work to Vice-President of the
Atlantic National Bank of Boston, and until this appointment was associated with the First National Bank of Boston.
from
Group Named in Mississippi to Study Bank Laws—
Governor to Call Initial Meeting of Special Commission Created by Legislative Enactment.
The members of a Special Commission of 15, provided for
by H. C. R. No. 45 of the 1932 session of the State Legislature, to make a study of the banking laws and submit findings of facts and also recommendations, have been announced
by the Clerk of the House of Representatives, George B.
Power, according to Jackson (Miss.) advices, Aug. 13, to
the "United States Daily," which further reports:
The personnel is as follows:
Appointed by the Governor: R. B. Clark, Tupelo; S. A. Klein, Meridan ;
M. P. Sturdlvant, Glendora; H. L. Robins, Rienzi; E. W. Reid, Magnolia.
Appointed by President of Senate: Senator J. H. Culkin, Vicksburg;
Senator J. H. White, West Point.
Appointed by Speakor of House: E. T. Woolfolk, Tunics; J. Albert
Lake, Greenville; H. D. Young, New Augusta.
Appointed by President of Mississippi Bankers' Asiociation: 0. B.
Taylor, Jackson; Thomas Brady, Jr., Brookhaven; B. C. Adams, Grenada;
E. V. Yates, Macon; E. B. Robinson, Centreville.
Law Providing Appointments.
The concurrent resolution authorizing the study follows in full text:
Be it resolved by the Legislature of the State of Mississippi, that a Commission to be composed of three members of the House of Representatives
to be appointed by the Speaker, two members of the Senate to be appointed
by the Lieutenant-Governor, five executive officials of State banks to be
appointed by the President of the Mississippi Bankers' Association, and
five representative business men to be appointed by the Governor, is
hereby created, whose duty it will be to make a study of banking conditions
and of all the laws of the State affecting banks, and to make recommendations to the next regular, special or recess session of the Legislature with
reference to the State Banking Department, its organization and operation,
and as to such revision of said laws as the Commission believes will further
safeguard and protect depositors and stockholders of banks, and as will
enable the banks to better serve the agricultural, commercial and industrial
Interests of the State.
Governor to Call Meeting.
Upon the appointment of the Commission, a meeting thereof shall be
called by the Governor, and it shall organize by electing one of the members
as Chairman, and a Secretary, who need not be a member. The Commission
shall have the power to summon witnesses and to take testimony, and through
its representatives shall have access to all the records of the State Banking
Department and to all other public records.
In the event the Legislature makes provision for the continuance of the
Research Commission, the Commission herein created may engage the services of the Research Commission in making a study of banking conditions
and of the laws affecting banks, and receive from such Research Commission
its suggestions and recommendations.
Lloyd Thomas Appointed Superintendent of Banks in
Arizona.
According to Phoenix (Ariz.) advices, Aug. 13, to the
"United States Daily," Governor George W. P. Hunt has
appointed Lloyd Thomas, formerly Cashier of the Miami
branch of the Valley Bank, and at present chief examiner of
the State Banking Department, as Superintendent of Banks,
to take the place of Sid Ellery, resigned.
Volume of Outstanding Bankers' Acceptances Dropped
$42,601,770 During July—Total July 30 1932,
$704,646,592.
The retirement of a large volume of matured bankers
acceptance credits and the delayed demand for new season
financing combined, it is stated, to bring about a reduction
Aug. 20 1932
Warehouse credit acceptances declined in volume 815.800.000 which is a
healthy indication that warehoused products are leaving storage and that
credits are being retired.
Acceptances based on goods stored in or shipped between foreign countries
went off $6,300,000 to 8264,000,000 which we compare with $423,000,000
on July 31 1931.
Bankers acceptances to finance domestic shipment and drawn for the
purpose of creating dollar exchange remain practically unchanged in volume.
The market for bankers acceptances has remained unusually quiet with
the demand generally exceeding the supply, particularly with respect to
names of the largest accepting banks and bankers. Interior bank bills move
slowly and are in poor demand.
A large volume of bills purchased remain with the large accepting institutions as has been the situation for some months. At the end of July
these banks were holding of their own or other bank bills a total of $562,954,793. At the same time the Federal Reserve banks are holding for their
own account a total of only $39,700,000 while for the account of foreign
correspondents the volume has dropped to $57,494,000 compared with
$253.578,000 at the end of July 1931.
Market rates for bankers acceptances remain steady at the record low
rate which has prevailed since July 1, and are now quoted at Hi
% for
maturities up to 90 days.
Detailedstatistics made available by Mr. Bean follow:
POTAL OF BANKERS' DOLLAR ACCEPTANCES OUTSTANDING FOR
ENTIRE COUNTRY BY FEDERAL RESERVE DISTRICTS.
Federal Reserve District.
1
2
a
4
5
6
7
8
9
10
il
12
Grand total
Decrease
July 30 1932.
June 30 1932.
July 31 1931.
$43,031,055
564,455,682
12,602.668
10,279,258
1,315,740
6,169.260
41,020,829
1,264.589
1,540,274
950,000
993,159
21,024.078
543,362,885
604,641.709
13,663,973
10,498,307
1.891,696
5,457,030
42,742.558
1,241,919
1,093,802
650.000
626,874
21,407,609
598,254,642
967,932,916
21,140,174
18,785,969
4,831,259
11.670.704
63,490,843
1,385,096
953,199
1,573,557
1,718,071
36,465,749
1747,248,362 $1,228.202,179
523,585,587
42.601.770
5704,646,592
CLASSIFIED ACCORDING TO NATURE OF CREDIT.
imports
Exports
Domestic shipments
Domestic warehouse credits
Dollar exchange
Based on goods stored in or shipped
between foreign countries
July 311931.
July 30 1932.
June 30 1932.
$85,449,417
161,522,926
14,418,278
163,302,807
15,163,749
$96,949,875
173,194,076
13,615,037
179,231,752
13,243,015
$185,830,020
329,831,737
35,107,530
202,391,595
51,748,227
264,720,415
271,014,607
423,293,070
CURRENT MARKET QUOTATIONS ON PRIME BANKERS'
ACCEPTANCES AUGUST 16. 1932
Days—
30
60
90
Dealers'
Dealers'
Buying Rate. Selling Rate.
14
34
34
Si
54
,i
Days—
120
150
180
Dealers'
Dealers'
Buying Rate. Selling Rate.
1
114
134
34
1Si
134
Ruling by New York Stock Exchange Bearing on Stamp
Taxes Affecting Transactions in Listed Securities.
On Aug. 16 the New York Stock Exchange notified
members that when a transaction in a listed security is
made in the over-the-counter market and a reverse operation is made on the Exchange at the same time, the difference
in prices must be not less than an amount equal to the
recognized commission plus the required stamp taxes. In
the New York "Times" it is stated that hitherto the required difference was only the recognized commission.
The Stock Exchange ruling follows:
NEW YORK STOCK EXCHANGE
Committee on Quotations and Commissions.
Aug. 16 1932.
To the Members of the Exchange:
Referring to Section 11 of Chapter VII of the Rules of the Exchange,
which reads as follows:
"Section 11. No member shall make any transaction in a listed security'
'over the counter' for his own account, or the account of his firm, or for
that of a partner, or for any account in which either he or they have a
direct or indirect interest, and a reverse operation upon the Exchange at or
about the same time, wherein the difference between the purchase and sale
prices is less than the recognized commission on such a purchase or sale'
the Committee on Quotations and Commissions has ruled that the difference between the purchase and sale prices referred to in said section must
not be loss than an amount equal to the recognized commission plus the
required stamp taxes.
ASHBEL GREEN, Secretary..
of $42,601,770 in the outstanding volume of bankers acceptances as of July 30. The monthly survey report of the
American Acceptance Council released Aug. 18 place the
Free Employment Service for Brokerage Office Appli—
cants Conducted by New York Stock ExchangePersonnel Office.
total of bankers acceptances at $704,646,592 which is compared with a total of $1,228,202,179 outstanding on the
corresponding date in 1931.
The Committee of Arrangements of the New York Stock
Exchange issued the following notice Aug. 17:
To the Members of lhe Exchange:
The New York Stock Exchange Personnel Office for the past 12 Years has
been conducting a free employment division for brokerage office applicants.
This office now has on file the applications of a large number of trained,
brokerage employees, both male and female, ranging from runners to
cashiers and managers, who are immediately available.
If you care to make use of this service, please call Hanover 2-4200.
extension 261.
This service is entirely without charge to either the employees or the
employer.
ASHBEL GREEN, Secretary.
Robert H. Bean, Executive Secretary, of the American
Acceptance Council, in making public the survey says:
An unusual feature of the current change in bankers acceptance volume
is that practically the entire reduction was reported by banks and bankers
in the New York Federal Reserve District the total for which is now $40,186,027 below that for the previous month-end.
The volume of bankers acceptances to finance imports went off $11,500,000 and a drop of similar proportions is recorded for acceptances to
finance exports.
Volume 135
Financial Chronicle
Promissory Notes and Trade Acceptances Subject to
Bank Check Tax—Other Rulings by Internal
Revenue Bureau.
Promissory notes and trade acceptances are subject to
the bank check tax of the Revenue Act of 1932, because
they are written orders to a bank to pay money said a
Washington account Aug. 15 to the New York "Journal
of Commerce" from which we also quote:
The Bureau of Internal Revenue to-day handed down this decision in
one of five informal rulings which dealt with the bank check, lubricating
oil, admission cable and other taxes in the new revenue act.
Treated Like Checks.
"The printed acceptance, as well as the promissory note, when presented
to a bank at maturity is treated by the bank just as a check would be,"
the bureau states in its ruling on cceptances and promissory notes. Such
instruments, therefore, are subject to the tax.
In another of its informal rulings the bureau points out that if a customer
to whom a manufacturer has sold a taxable article goes into receivership
and eventually settles for 50 cents on the dollar, the manufacturer may
not claim a readjustment in his tax return. A manufacturer who repossesses
a taxable article, however, has the right to claim a deduction.
A manufacturer of lubricating oil may not purchase oil from another
manufacturer tax free if he intends to resell the oil without processing,
the bureau repeats in another of its current rulings.
"RP" cable messages, or cables with which the sender sends money to
pay for the reply, will be taxed only on the one outgoing message unless the
reply is filed from dome territory of the United States, the bureau explains
in another ruling. The reply to such a cablefrom a foreign country will be
taxed if filed in this country.
Season tickets for athletic contests will be taxed on their sale price and
not on the aggregate price of each admission represented by the ticket.
Liability of Banks to Tax on Checks Defined by Treasury Department in Letter to Federal Reserve
Board—Application of Law to Financial Transactions—Transfers by Drafts Subject to Levies—
Ruling on Clearing House Transactions.
Transfers of funds from one bank to another by means
of a draft, even when conducted through the Federal Reserve
Banks, are subject to the bank check tax of the Revenue
Act of 1932, the Treasury Department announced, Aug. 9,
in a letter to the Federal Reserve Board. Regarding the
Department's rulings, the "United States Daily" of Aug.
10 said:
Banks may transfer funds among themselves, however, by written directions or by telegraph, telephone or radio messages without 'occurring
the tax, the Treasury stated, pointing out that the same rule applies in
many other cases, including settlement of clearing house accounts, withdrawals of Federal Reserve notes and transfers of Government money. In
all such cases a draft is taxable but a written authorization is not, the
Department says.
How Tax May Be Avoided.
Member banks of the Federal Reserve System may withdraw Federal
Reserve notes by presenting receipts for them and not incur the tax; but
if a draft is presented instead of a receipt, it will be taxed.
Additional information made available in the letter and at the Treasury
Department follows:
Transfers of Government funds by check, when made by a private bank,
are subject to the tax, despite the fact that Government funds are involved.
This ruling, however, does not affect the tax-exempt status of checks
drawn by Government paymasters, postmasters, and similar officials.
Liabilities to Check Tax.
An example of a transfer of Government funds by check which would be
taxed is the sending of tax collections from the member bank to the Government depositary. Tax checks are cleared through the Federal Reserve
Banks, which send them to the proper commercial banks for collections
When the collections are complete and the commercial bank sends a draft
to the Federal Reserve Bank for the total amount, the commercial bank's
draft is taxable, even though the funds transferred belong to the Gceternment.
Similarly, when Government deposits are transferred at the Government's direction from one depositary to another by bank draft, the draft
Is taxable. In both this case and the previous one, transfer of funds Might
be effected by written orders instead of drafts, such orders would not be
taxable.
Dealing with other excise taxes which are imposed and their bearing on
Federal Reserve transactions, the letter points out that the Federal Reserve System has a statutory exemption from taxes, but that the exemption
from most of the excise taxes depends upon the status of the seller and not
upon that of the purchaser. Lubricating oil, for instance, which may be
sold to Reserve Banks would be taxed because the tax is to be paid by the
seller and affects the Reserve Banks only indirectly, perhaps, as an increased price.
Similarly, telephone calls subject to the new tax will not be exempt
when made by a member bank to the Reserve Bank, but will be exempt
when blade by the Reserve Bank.
The rulings, contained in a letter from the Secretary of
the Treasury, Ogden L. Mills, to the Governor of the
Federal Reserve Board, Eugene Meyer, were given as
follows in the "United States Daily" of Aug. 10:
Eugene Meyer, Governor, Federal Reserve Board, Washington, D. C.;
In your letter of July 16 1932, request is made for rulings upon a number
of stated questions arising under the Revenue Act of 1932 out of transactions incident to the operations of the Federal Reserve System. These
questions appear to fall generally into two classes, those relating to the
application of a number of the excise taxes to the Federal Reserve Banks
themselves (Part 1) and those relating to the application of the tax on
checks, &c., provided in section 751 of the act, to a great variety of transactions involving the transfer of funds and the settlement of accounts
between banks in the course of the operations of the Federal Reserve
System (Parts II to VIII).
The questions stated in Part I, involving the extent to which the Federal
Reserve Banks themselves are subject to the various excise taxes, are
1257
governed in a large part by section 7 of the Federal Reserve Ac'
531, Title 12, U. S. C.), which provides:
Federal Reserve Banks, including the capital stock and surplus therein,
and the income derived therefrom shall be exempt from Federal, State,
and local taxation, except taxes upon real estate.
Under these provisions no excise tax may be collected in repect of a
transaction to which a Federal Reserve Bank is a party in its own right, if,
under the taxing Act, the tax as such would be payable by the'Reserve
Bank. The tax on checks, &c., under section 751, is imposed upon the
maker or drawer of the instrument. The taxes on telephone, telegraph,
&c., facilities, provided in section 701, and on electrical energy, provided
in section 616, are imposed in each case upon the person who makes payment for the facility to the company which furnished it. The taxes on
sales of miscellaneous articles (other than electrical energy), provided in
Title IV of the Act, are imposed in each case upon the person selling the
article.
Basis for Ruling on Question Outlined.
Questions in Part I of your letter are accordingly answered as follows:
I. Taxability of Federal Reserve Banks:
1. Q. Does the tax imposed by section 751(a) apply to checks drawn
on Federal Reserve Banks by their own officers acting in their official
capacities?
A. No.
2. Q. Does tax imposed by section 701(a) (2) apply to leased telephone
and telegraph service contracted for, used and paid for by the Federal
Reserve Banks?
A. No.
3. Q. Does the tax imposed by section 701(s) (1) apply to telegraph,
telephone, cable, and radio messages sent by the Reserve Banks or sent
to them collect, which are paid for by the Reserve Banks and for which no
reimbursement is received by them?
A. No.
4, Q. Does the tax imposed by section 701(a) (I) apply to messages paid
for by the Reserve Banks but for which they are later reimbursed by other
banks, such as messages sent by the Reserve Banks in performing services
for other banks?
A. Yes.
5. Q. Is electrical energy furnished to Federal Reserve Banks for their
own use subject to the tax imposed by Section 616(a)?
A. No.
6. Q. Do the taxes on fuel oil and other articles of merchandise imposed
In Article IV of the Revenue Act of 1932 apply when such articles are
purchased by the Reserve Banks for their own use?
A. Yes. The taxes as such are payable by the seller.
Taxability of Banks in Reserve System.
The questions which are stated in Parts II to VIII of your letter are
Intended to cover the more common forms of transactions by which trans..
fees of funds or settlements of balances are effected between banks. It
seems desirable to set forth a general statement of the basis for the rulings
on these questions, so that the scope of the rulings will be understood
when applied to cases where there may be some local variations in the
form of a given transaction. To give a separate explanation of the basis
of the ruling on each question in your letter is believed to be unnecessary,
since it is apparent that a great many of the transactions covered by your
letter, although falling into different classes and grouped separately, have
certain elements in common, so far as the application of the tax is concerned. A general statement as to the character and form of the instruments which are subject to the tax will serve to explain the rulings on a
majority of the questions stated, and will permit more or less categorical
answers to be made to the specific questions, except in those cases where
an additional statement as to the basis of the ruling may be necessary.
Provision on Taxing of Bank Instruments.
The tax under section 751 is imposed upon certain "instruments Presented for payment," namely, "checks, drafts, or orders for the payment
of money" drawn upon a bank, banker, or trust company. "Checks"
and "drafts" are terms which have a well established meaning. "Orders
for the payment of money," intended to be taxed under this section, are
such as have some similarity to "checks" and "drafts," at least to the
extent that they must be capable of being characterized as "instruments"
and of being "presented for payment." The phrase "presented for payment" implies that the instrument must be capable of having a holder,
that is, a person who by reason of his possession of the instrument is entitled to receive payment of the sum of money specified therein. Moreover,
the instrument must according to its terms or effect call for the payment
of money; an order or authorization merely to charge a book account
does not constitute such an order as is subject to the tax. Of course, if
the instrument is in fact an order for the payment of money, it is none
the less taxable because the payment of money may, in a particular case
or even in a number of cases, be accomplished through a book e'en%
A great number of the transfers of funds or settlements mentioned in
your letter are accomplished through written orders or authorizations,
usually on standard forms, by which the addressee is directed or authorized
to charge the account of the person giving such order or authorization
or to make an offset against a balance standing to the credit of such person.
In some instances the writing does not in express terms contain such an
order or authorization but merely states the substance of the transaction,
and the order or direction to the addressee is implied from the course of
dealing between the parties or has been separately Provided for by prior
agreement. Some of the orders or authorizations call for the delivery or
shipment of currency or coin to the person giving such order or authorization. Orders, authorizations; or instructions of the nature mentioned,
whether oral or written, are not subject to the tax.
Some of the transactions referred to in your letter involve transfers of
funds belonging to or due to the United States. If the transfer is effected
by or through an instrument which is of such character and form as to be
subject to tax, the tax must be collected, as no exemption attaches by
reason of the fact that funds of the United States are involved.
The detailed questions stated in your letter, with such changes in phraseology as are necessitated by omitting references to exhibits and the answers
thereto are as follows:
II. Various Forms or Remittances or Settlements for Checks and
Collection Items:
Pursuant to the provisions of section 13 and 16 of the Federal Reserve
Regulation J of the Federal Reserve Board, the Federal Reserve
and
Act
Banks act as clearing houses and collect checks for their member
banks, which maintain deposit balances with the Federal Reserve Banks
as their legal reserves, and for non-member banks which establish deposit
balances with the Federal Reserve Banks for the purpose. The Board's
regulations on this subject are supplemented by circulars issued by the
Federal Reserve Banks. Each Federal Reserve Bank receives each day
numerous checks drawn upon banks in its district and forwards them to
the drawee banks for payment. The usual procedure is to send all the
checks received during each day drawn on a particular bank to that bank,
1258
Financial Chronicle
with one covering letter. The covering letter is known as a "cash letter."
The total amount of the checks thus transmitted is accounted for to the
Reserve Bank in any one of several ways, the principal ones being, (a) by
authorizing the Federal Reserve Bank to debit the amount to the deposit
balance of the remitting Bank on the books of the Federal Reserve Bank,
and (b) by sending the Federal Reserve Bank a check or draft drawn upon
the remitting bank's deposit with the Federal Reserve Bank or a correspondent bank. The reply to the cash letter will also state the amount, if
any, of the items which are returned to the Reserve Bank (because not
collected or for some other reason), and this amount is accordingly deducted
from the total stated in the cash letter.
Banking Practices on "Noncash Items."
The Federal Reserve Banks also collect for their member banks promissory notes. bills of exchange and other similar items and the procedure
In forwarding and accounting for such items is similar, so far as the questions here presented are concerned, to that followed in connection with the
collection of checks, except for differences in detail which are indicated
In Questions 8 to 11 below. For convenience, such items are commonly
referred to as "non-cash items," in order to distingusih them from checks
and similar items payable on demand at banks which are commonly referred to as "cash items."
1. Q. Is a tax payable in the event that a member bank, in response to
the cash letter, authorizes the Federal Reserve Bank to debit the amount
to its deposit balance with the Federal Reserve Bank, (a) by a specific
authorization in the form used for that purpose; or (b) by returning to
the Federal Reserve Bank a memorandum slip merely stamped "debit" or
"paid," which has by custom the effect of such authorization?
A. (a) No. (b) No.
2. Q. In some cases the Reserve Bank is given a continuing authorization to charge the account of the member bank with the net amount of
each "cash letter" sent to that bank. Is such authorization taxable? If
so, is it taxable once, or each time an entry is made?
A. Neither the continuing authorization nor the separate entires made
pursuant hereto are taxable.
3. Q. Is the tax payable in the event that the bank makes remittance
of the amount called for by its reply to the cash letter, by means of a draft
or check, (a) drawn against its deposit balance with the Federal Reserve
Bank, or (b) drawn against a deposit in a correspondent bank?
A. The check or draft, whether drawn against a deposit with a Federal
Reserve Bank or against a deposit in a correspondent bank, is taxable.
4. Q. In one instance the cash letter has a detachable portion which is
In the form of a draft and.which is marked "Settlement draft." This
"Settlement draft" is in the usual form of a draft; it is drawn by the remining bank on, and payable to the order of, the Federal Reserve Bank.
It is not dealt with as an ordinary draft in that it is never returned to the
drawer, but is held by the Reserve Bank as a part of its records. Is such a
"Settlement draft" taxable?
A. Yes. The "Settlement draft" is clearly of a character and form which
make it subject to tax; and the fact that after payment it is not returned
to the drawer does not affect the taxability of the instrument.
5. Q. In the event that any of the transactions described in the preceding questions is taxable, is only one tax imposed, or is the tax payable
with regard to each separate item inclosed with the cash letter, when a
single settlement is made for the total amount of such items?
A. The taxability of the instruments mentioned in the preceding questions which are held to be taxable is not affected by the fact that such
instruments are given in settlement of a great many separate items, each
of which may likewise be subject to the tax: only one tax is payable in
respect of each instrument.
6. Q. It sometimes occurs that, in its response to a cash letter, the
member bank will incorrectly state the amount chargeable against its
reserve account, usually because it has failed for some reason to return
and deduct an item which should have been returned and deducted because
uncollectible or for some other reason. In that event it communicates
again with the Reserve Bank advising it of the correcting book entry to
be made. Is such a transaction taxable?
A. No.
7. Q. In certain Reserve Districts,in order to achieve greater promptness
In settlement, where drafts are sent in settlement of cash letters, the drafts
are required to be on certain member banks which have previously agreed
that such drafts may be immediately charged against their accounts by
the Reserve Bank, without waiting for the draft to be sent to the drawee
bank. After such a charge is made,the Reserve Bank notifies the bank upon
which the draft is drawn so that it may keep its books in order and forwards
the draft to it. Is such notification taxable?
A. No.
8. Q. In connection with non-cash items, a printed slip is often attached
to each item when it is forwarded for collection by the Federal Reserve
Bank,such slip taking the place of a letter of transmittal. Acknowledgment
of receipt of the item, acknowledgment that payment has been received,
and authorization to the Reserve Bank to charge its accounts is made by
the bank receiving it, by returning a carbon copy of the slip stamped
"paid" or "debit." Is this transaction, or the returned slip, taxable?
A. No.
9. Q. Is the result different if the collecting bank merely advises the
Reserve Bank that it has credited the latter's account, which is an implied
authorization to the latter to make a corresponding entry on its books?
A. No.
10. Q. Promissory notes, bills of exchange and other non-cash collection
Items which are payable by persons located in the same city as the Federal
Reserve Bank or its branch are sometimes presented by the Federal
Reserve Bank directly to the persons by whom they are payable, and
such persons give the Federal Reserve Banks in payment for such
items checks drawn on member banks in the same city. In such cases the
Reserve Bank immediately presents such checks by messenger to the
banks on which they are drawn and the drawee banks give the Federal
Reserve Bank drafts against their deposit balances with the Federal Reserve
Bank. Are such drafts subject to the tax?
A. Yes,
11. Q. In the circumstances descirbed in the preceding question, the
bank, instead of sending a draft, sometimes authorizes the Reserve Bank
to charge its account. Is this transaction taxable?
- A. No.
III. Clearing House Transactions:
The questions under this heading involve the settlement of balances
resulting from exchange of checks between banks. The settlement of
balances resulting from the exchange of checks thoughr the Newark Clearing House Association, Newark,N.J., will illustrate this type of transaction.
Each business day each bank in the Clearing House Association takes
to the office of the association checks deposited with such bank drawn on
other banks in the association, and messengers representing the respective
banks in the association call for and receive the checks drawn on their
banks. Each bank is credited with the amount of the checks drawn on
Aug. 20 1932
the other banks which it brings to the clearing house and is debited with
the amount of the checks drawn on it which other banks bring.
There is a net credit or debit balance in favor of or against each bank as
a result of the day's exchanges, and the aggregate of the net credit balance
must, of course, be exactly equal to the aggregate of the net debit balances.
The amounts of the net credit and debit balances to all banks are written on
the clearing house statement for that day and this statement, signed by
an officer of the Clearing House Association, is sent by messenger to the
Federal Reserve Bank of New York, and the balances as shown on the
statement are settled on the books of the Federal Reserve Bank by credits
and debits to accounts of member banks.
The balances in favor of or against banks which are members of the
Federal Reserve Bank are credited or debited to the accounts of such banks
on the books of the Federal Reserve Bank. The balances for or against
other banks, I. e., banks which are not members of, and therefore have
no account with, the Federal Reserve Bank are, by arrangement between
the banks concerned, credited or debited to the accounts of designated
banks in New York City which are members of the Federal Reserve Bank.
These credits and debits are made by the Federal Reserve Bank pursuant
by continuing letters of authorization on file with it signed by the various
banks.
Clearing House Transactions Outlined.
The questions asked in this connection are:
1. Q. Are any of the above-described transactions which consist merely
In book entries, taxable?
A. No.
2. Q. Is the clearing house statement above referred to subject to the
tax?
A. No.
3. Q. Are the letters of authorization subject to tax? If so, are they
taxable once, or each time an entry is made, or as to each item covered by
each entry?
A. Such letters of authorization are not subject to tax.
4. Q. In some instances the clearing house issues certificates showing
the net balances. Such a certificate is issued to a crditor bank calling upon
a debtor bank to pay the creditor bank the amount stated therein. No
accounts are carried in any of the clearing house banks in the name of
the manager for the purpose of effecting settlement pursuant to the certificates, and these certificates are issued by the clearing house manager
merely as memoranda to facilitate the settlement of balances between the
members of the clearing house association. The Federal Reserve Bank
participates in the clearings and certificates issued in its favor against
member banks are charged against their deposit balances on the books
of the Federal Reserve Bank pursuant to standing authorizations. Are
such certificates subject to the tax?
A. No.
5. Q. In some instances (particularly where banks are so located as
not to be in communication by messenger with the Federal Reserve Bank)
a group of banks adopt, by agreement, the procedure of forwarding each
day to each member of the group all of the item they receive that are
payable by or through that member of the group,forwarding to the Reserve
Bank a form on which are listed the names of all the other members of the
group together with the amount of the items that it has forwarded to each.
When received by the Reserve Bank, this form is used as an authorization
to make the appropriate entries in the accounts of the banks in the group.
In practice, however, instead of making several entries, the Reserve Bank
strikes the balance from the advices sent by all the members of the group
and makes each day only one entry in each of their accounts, representing
the net balance for the particular bank. Is the use of the forms in the
manner above described taxable?
A. No.
6. Q. Are the resultant book entries made by the Reserve Bank taxable?
A. No.
7. Q. In certain instances, the Federal Reserve Bank itself acts as a
clearing house, receiving the checks from the various banks, striking the
balance and making the appropriate entries in the accounts of the various
banks. Are these transactions taxable?
A. No.
8. Q. In certain instances the Federal Reserve Bank performs these
services even for banks which have no account with it (I. e., banks not
members of the Federal Reserve System). Where such banks are located
in the same city as the Reserve Bank, the method adopted is for the drawee
bank to send a messenger to the Reserve Bank to get the checks drawn on
it which have been forwarded to the Reserve Bank for collection. The
checks are immediately charged to the account of a member bank which
has authorized the Reserve Bank to do so, and credited to the bank which
forwarded them. In the event that the check is later dishonored, the book
entries are reversed. Are such authorizations taxable?
A. No.
IV, Member Banks Obtaining Currency from Reserve Banks:
A member bank desiring currency usually, obtains it from the Federal
Reserve Bank, and the amount usually is debited on the books of the
Federal Reserve Bank to the deposit balance maintained by the member
bank. Such requests for currency and the authorizations to debit the
reserve balances assume a variety of forms and give rise to the following
questions:
1. Q. Is such a request by a member bank for the shipment of currency
to it taxable when made by telephone and not confirmed in writing?
A. No.
2. Q. If such a request is made by telephone but confirmed in writing
after the shipment of the currency, is it taxable?
A. No.
3. Q. If a messenger sent to the Federal Reserve Bank delivers merely
a receipt for the currency and receives the currency, is the transaction
taxable?
A. No.
4. Q. If the messenger in such a case delivers a check or draft drawn on the
Federal Reserve Bank for the amount of the currency, is the transaction
taxable?
A. The check or draft is taxable.
5. Q. If a written request for currency is accompanied by a check or
draft, are both the check and the request taxable?
A. Only the check or draft and not the written request is taxable.
6. Q. When the transaction is completed, the Reserve Bank frequently
sends a confirmation on a printed form to the member bank. Is this
document taxable, whether or not any other part of the transaction is
taxable?
A. The confirmation is not taxable, whether or not any other part of
the transaction is taxable.
V. Transactions Incident to Rediscounts and Advances by Federal
Reserve Banks:
1. Q. Federal Reserve Banks extend credit accomodations to their
member banks: (a) By rediscounting, on the indorsement of their member
banks, the commercial, industrial and agricultural paper acquired by them
from their customers; and (b) by making advances to their member banks
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Financial Chronicle
on their promissory notes secured in the manner prescribed by law. In
either event, the proceeds usually are made available to the member bank
by crditing the amount to the deposit balance of the member on the books
of the Federal Reserve Bank. Are such credit entries taxable?
A. No.
2. Q. At the maturity of the rediscounted paper or the promissory
notes of the member banks, the Federal Reserve Banks, pursuant to agreements or regulations previously made, return the rediscounted paper or
promissory notes to the member banks and debit the amounts due thereon
to the deposit balances of the member banks on the books of the Federal
Reserve Banks. Are these transactions taxable?
A. No.
3. Q. The member bank frequently desires to have its promissory notes
or rediscounted paper returned to it prior to the time when it would be
returned ih due course as described above. Its reason for so desiring
may be, for instance, that the maker of the instrument desires to pay it
before maturity, or it may be that the member bank desires to decrease
the total amount of the paper rediscounted for it by the Reserve Bank.
In such case the member bank communicates with the Reserve Bank by
letter or by telegram, requesting that the item be returned to it, and, either
impliedly or actually in words, authorizing the Reserve Bank to debit its
deposit balance on the books of the Reserve Bank with the amount due
thereon. Are these transactions (I. e., the book entries, the transmission
of the instruments, or the communications requesting the return of the
instruments and authorizing the book entries)taxable?
A. Neither the book entries, the transmission of the instruments, nor
the communications requesting the return of the instruments and authorizing the book entries are taxable.
VI. Inter-bank Transfers of Funds:
One of the important functions of the Federal Reserve System is to
facilitate the transfer of funds between banks. Tls function is performed
(with unimportant exceptions) free of charge .for members of the System.
It is done as far as possible without resorting to shipments of currency.
Transfers between member banks in the same Federal Reserve District
are made merely by means of entries on the books of the Reserve Bank. The
steps involved in such transaction are: (1) A member bank requests the
Reserve Bank to transfer an amount on its books from the reserve account
of the requesting bank to the account of another bank, (2) the Reserve
Bank makes the transfer on its books, and (3) the bank to whose account
the transfer is made is notified. If the bank to which the transfer is made
is located in another district, the second step must consist in (a) a transfer
from the account of the requesting bank to the account of the Reserve
Bank for the District in which is located the bank to which the transfer
is made, and (b) a transfer by that Reserbe Bank to the account of the
latter. If the latter has no account with the Reserve Bank. the Reserve
Bank transfers to the account of a bank which has and which is a correspondent of the bank to which the transfer is made. For the purpose of
effecting transfers between two Federal Reserve Banks (where the transfer
Is from one district to another), the Gold Settlement Fund is maintained in
Washington. This fund was created by a deposit of gold by each Federal
Reserve Bank with the Treasurer of the United, States to the credit of the
Federal Reserve Board, which maintains books showing the amount due to
each Federal Reserve Bank. The Federal Reserve Banks each own an undivided interest in this fund and advise the Federal Reserve Board each day of the
transfers made to each other. The Board makes appropriate hook entries
transferring interests in the fund equivalent to the transfers of funds made
between the Federal Reserve Banks.
Member banks make their requests for transfers in many ways: by letter,
telegram, telautograph, and telephone. After the transfer has been made,
the Federal Reserve Bank sends a memorandum of the transaction to the
member bank, and executes appropriate vouchers, and makes appropriate
entries on its books.
1. Q. Are such transfers of funds by one Federal Reserve bank to another
at the request of a member bank, made by means of a telegram or letter
sent by one Federal Reserve Bank to another. taxable?
A. No.
2. Q. Is a request for such transfer, made by the member bank, taxable
by telephone and not confirmed in writing?
made
if
A. No.
3, Q. Is such a request taxable if made by telephone and confirmed in
writing after the transfer has been made?
A. No,
4. Q. If made by telautograph or telegram and not confirmed in writing?
A. No.
5, Q. If made by telautograph or telegram and subsequently confirmed
in writing?
A. No.
6. Q. If made by letter?
A. No.
7, Q. If such requests are taxable If made by telephone then when a
number of such requests are made in the course of one day and the Federal
Reserve Bank makes only one book entry for the total amount at the
conclusion of the day, is one tax only imposed or is each separate request
taxable?
A. Neither the separate requests nor the covering book entry is taxable.
8. Q. In the event that a request for transfer of funds made by letter is
taxable, is a letter containing a request for several transfers subject to
taxation once, or several times depending upon the number of transfers
requested in the letter? (In this connection it has been suggested that, if
taxable at all, such requests are subject to only one tax since they are contained in one letter or memorandum.)
A. Such a request is not taxable.
6. Q. Requests for such transfers are sometimes accompanied by a
draft for the amount to be transferred. Is such draft taxable?
A. Yes.
10, Q. If so, is the letter transmitting the draft and making the request
also taxable?
A. No.
11. Q. Is a receipt or acknowledgment on a printed form sent by the
Reserve Bank to the member bank in response to a letter such as is described in the preceding question also taxable?
A. No.
12. Q. When a bank located in one Federal.Reserve district requests
that a transfer be made to a bank located in another district, the steps
incident to completing the transaction include a transfer by the Federal
Reserve bank of the district in which the requesting bank is located to
the Federal Reserve bank of the district in which the transferee bank is
located and a transfer from the latter Reserve bank to the transferee bank,
both transfers being accomplished by means of book entries in the accounts
of the respective banks. Is the latter transfer taxable?
A. No.
13. Q. Transfers are also made by Federal Reserve banks between two
member banks located in its district. Requests for such transfers take
the Same forms as the transfers described above, but such transfers are
accomplished merely by means of book entries in the reserve accounts of
1259
the two banks involved. Are such transfers taxable when the requests
are made in any of the different ways described above (including messenger,
telephone, written memorandum, etc.)?
A. No.
VII. Transfers to 5% redemption fund, war loan deposit account and
Reconstruction Finance Corporation.
National banks issuing National bank notes are required by statute
to maintain with the Treasurer of the United States a redemption fund
equal to 5% of their note circulation, When necessary, a National bank
will in most instances make additions to its 5% redemption fund by requesting the Federal Reserve bank of its district to transfer the required
amount to the account of the Treasurer of the United States. Such requests are made substantially in the following form: "Please charge our
account 8- and credit the Treasurer of the United States for the account of our 5% redemption fund." The Reserve banks prepare "debit
tickets" covering the necessary book entries and send copies, or similar
slips, to the member banks for their records.
1. Q. Is such a request taxable?
A. No.
2. Q. Sometimes such a request is accompanied by a draft. Is the
•
draft or the written request taxable?
It has been contended by some of the Reserve banks that such transfers
to officers of the United States are not taxable in any event.
A. The draft is taxable.
3. Q. Similar questions are also raised with regard to transfers from the
reserve account of a member bank to the Treasurer of the United States
as payments on the war loan deposit of the bank, giving the direction
(representing its subscription to United States securities).
A. Requests to charge the reserve account of a bank to cover subscriptions to United States securities are not taxable, but drafts drawn for this
purpose are taxable.
4. Q. From time to time borrowing institutions repay on advances made
by the Reconstruction Finance Corporation, doing so (a) by means of
instructions to the Reserve bank to charge the borrowing bank's account
and to credit the Treasurer of the United States for account of the Reconstruction Finance Corporation, and (b) by means of drafts. Debit tickets
are prepared by the Reserve bank and similar slips are forwarded to the
requesting bank for its records. Are either the instructions, the debit
tickets and slips, or the drafts taxable?
A. Neither the instructions nor the debit tickets or slips are taxable,
but the drafts are taxable.
VIII. Miscellaneous Transactions:
(a) Purchase of Securities by Reserve Banks on Behalf of Member Banks.
Member banks frequently request Reserve banks to purchase Government or other securities, or bankers' acceptances for them, authorizing
the Reserve Bank, either implied or specifically, to charge their Reserve
accounts with the cost. Such requests are made in a variety of ways.
1. Q. Is such request taxable if made by telephone and not confirmed in
writing?
A. No.
2. Q. If made by telephone and subsequently confirmed in writing?
A. No.
3. Q. If made by letter not specifically authorizing the Reserve Bank
to charge the account of the requesting member bank?
A. No.
4, Q. If the request described in the preceding question contains a specific
authorization to charge the member bank's account?
A. No.
5. Q. If the Reserve Bank, when the transaction is completed, sends
to the member bank a memorandum confirming the transaction and stating
the amount of the charge, is such confirmation taxable?
A. No.
(b) Incidental Expenses, Telephone Calls, &c.:
6. Q. In connection with transactions of this type as well as numerous
others, the Reserve banks have occasion to charge the accounts of member
banks, without specific authorization, with expenses incurred in connection
with telephone, telegraph, shipping charges on securities, &c. The member
bank is notified by sending to it a copy of the "debit ticket" made out
by the operating department which incurred the expense, or else a list of
the expenses which- have been charged to its account is sent to the member
bank at the end of the month. Are such "debit tickets," book entries or
memoranda taxable?
A. No.
7, Q. Are telephone calls and telegrams subject to a tax when they pertain to Fiscal Agency or Reconstruction Finance Corporation business
when the cost falls directly on the Treasury Department or the Reconstruction Finance Corporation?
A. As already pointed out, a Federal Reserve Bank is exempt from tax
in cases where the charges for such messages sent on its own account are
payable by it. Where, however, the charge for the telephone or telegraph
message is paid by a member bank, the tax must be collected, notwithstanding the message may have related to matters involving the Treasury
Department or the Reconstruction Finance Corporation. Where the
charges for such messages are paid by the Treasury Department or the
Reconstruction Finance Corporation, no tax is due; the Treasury Department Is exempt by reason Of section 701(b) of the Revenue Act, and the
Reconstruction Finance Corporation is exempt by reason of section 10
of the act creating it (Act of Jan. 22 1932, Public No. 2, 72d Congress),
which has provisions almost identical with those of section 7 of the Federal
Reserve Act.
(c) Member Bank Subscriptions to Stock of Federal Reserve Banks:
8. Q. All banks which are members of the Federal Reserve System are
required to subscribe to the capital stock of the Federal Reserve Bank
in an amount equal to 6% of their own unimpaired capital and surplus.
As a member bank's capital and surplus accounts are increased it is necessary to subscribe for a proportionate increase in its holdings of Federal
Reserve stock. Infrequently, drafts are drawn in favor of the Federal
Reserve Bank for these payments. Usually when subscribing for this
additional stock, the member bank authorizes a charge to its account.
In the latter case, is the transaction taxable?
A. The authorization to charge the Reserve account of the member
bank is not taxable, but the draft is taxable.
(d) Correction Entries:
9, Q. Member and non-member banks made deposits of coin or currency
with the Reserve Bank,receiving immediately credit subject to verification.
Occasionally in process of verification the Reserve Bank finds counterfeit
and shortages for which a debit is prepared and charged to the depositing
bank's account. Are such entries taxable?
A. No.
10. Q. A similar question is raised with regard to maturing coupons
deposited with the Reserve banks. When mutilated or unmatured coupons,
are discovered, the coupons are returned to the depositing bank and charge
made to its account. Are such transactions taxable?
A. No.
(e) Penalty for Insufficient Reserves:
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Financial Chronicle
Q. At periodic intervals an analysis is made of each member bank's
Reserve account to determine whether adequate reserves have been carried
during the period, as required by the Federal Reserve Act. If the reserves
have not been properly maintained, a penalty is assessed pursuant to the
Federal Reserve Act and the regulations of the Federal Reserve Board.
The penalty is charged to the Reserve account of the member bank by the
Reserve Bank itself. Is such a charge taxable?
A. No.
Corporation Affiliates Must Pay New Tax Under
Revenue Act—Federal Bureau Rules That Each
Must Make a Return in Its Own District.
Consolidated returns of corporations and subsidiaries are
not authorized by the Revenue Act of 1932 in connection
with payment of the manufacturers' taxes, according to an
informal ruling issued by the Internal Revenue Bureau on
Aug. 11. According to a Washington dispatch Aug. 11
to the New York "Times," the ruling said:
Section 626 of the Revenue Act of 1932 provides that every person
liable for any tax imposed under Title IV of that Act shall make monthly
returns under oath and pay the tax imposed to the collector for the district
In which is located the principal place of business of the person making
the return.
There appears to be no authority under the law, or in the regulations
made in pursuance of the law, whereby corporations which are affiliated
may be permitted to make a joint return of excise taxes in any collection
district other than the one in which the principal place of business of
each corporation is located.
It will, therefore, be necessary for each corporation affiliated with you
to file a return and pay tax for its stores to the Collector of Internal Revenue
of the district in which the principal place of business of each such corporation is located. Such return, accompanied with the tax, must be
filed with the Collector on or before the last day of the month following
that for which the return is made.
National Bank Notes Issued Under Glass-Borah Clause
Must Be Retired in Three Years According to
Ruling of United States Attorney-General—Provision Carried in Federal Home Loan Act, Ruling
Also Deals With Tax on New Notes.
Under a ruling of William D. Mitchell, United States
Attorney-General, all National bank notes issued under the
Glass-Borah amendment to the Federal Home Loan Bank Act
must be retired at the end of three years. As noted in the
"United States Daily," the Attorney-General, in ruling that
Congress intended the new paper currency issued under the
amendment to be retired at the end of three years, held that
the law did not mean, in his opinion, that the issuance
privilege should last three years and the circulation privilege run indefinitely. The Attorney-General, on this point,
says:
"I find nothing in the legislative history which indicates that it was the
purpose of Congress in adding Section 29 to the Federal Home Loan Bank
Act to provide for a permanent expansion of the currency beyond the threeyear period. . . . It is my opinion that the three-year period prescribed means that the bonds referred to lose the circulation privilege at
the end of the three-year period and the notes issued upon the deposit of
such bonds must be retired in an appropriate manner."
In its issue of Aug. 15 the "United States Daily" said:
Full Complement Doubtful.
Doubt was expressed orally at the Treasury Department concerning the
probability of the National banks now ever issuing the full $900,000,000 of
new notes which the Glass-Borah amendment makes possible by legalizing
as National bank note collateral all Government bonds bearing not more
than 3%% interest. Formerly only 2% Government bonds were eligible.
Additional oral information made available follows:
Costs of issuing the new notes might be increased indirectly by the
Attorney-General's ruling. Government bonds bearing interest between 2 and
3%%, which are now being used as note collateral, will in many cases
have to be liquidated at the end of three years to secure lawful money for
retirement of the notes.
Sale Less Probable.
The liquidating price during a period of selling may be lower than the
price at which the bonds were purchased during their recent upward movement. Indirectly, this potential price differential would add to the cost
of issuance.
Most of the new notes issued to date have gone to large Metropolitan
National banks. The increases in money stocks have not been as diffuse
as anticipated by sponsors of the legislation at the last session of Congress.
Although between July 30 and Aug. 11 approximately $11,200,000 of the
new notes had been issued, they have not inflated the currency. No
abnormal increase in circulation has occurred, and the assumption is that
the new notes are pushing other money out of circulation.
Many alert National banks realize a profit on the new currency privilege
by anticipating its enactment. Selling 2% Government bonds, which were
being used as note collateral, while they were still above par, some National
banks purchased the 3 or 3%% bonds which were below par but which
subsequently became eligible, like the twos and consequently advanced
in value.
It was also noted in the same paper, that clearing up a
minor question, in the same ruling, the Attorney-General
said that the Federal tax on the new notes undoubtedly
would be one-half of 1% per annum, corresponding to the
tax on the old issues.
Approximately $995 000,000 of new National bank notes
can be issued under the Glass-Borah amendment, and about
$7,500,000 are already in circulation, according to Treasury
figures, said the "Daily." The Attorney-General's ruling is
taken as follows from the "United States Daily":
Aug. 20 1932
Text of Opinion by Attorney General.
The Secretary of the Treasury to-day (Aug. 13) made public the following opinion of the Attorney-General relating to the circulation privilege
granted certain United States bonds under Section 29 of the Federal Home
Loan Bank Act of July 22 1932:
"My dear Mr. Secretary: I have the honor to refer to your letter of
July 28 1932, requesting my opinion (1) as to whether the Treasurer of the
United States shall collect one-half of 1% or one-fourth of 1% each half
year upon the circulating notes issued under Section 29 of the Federal Home
Loan Bank Act of July 22 1932 (Public No. 304, Seventy-second Congress,
First Session), and (2) whether Section 29 requires bonds deposited with
the Treasurer of the United States thereunder as security for the issuance
of circulating notes to be withdrawn as such security at the expiration of
three years from the date of the Act.
"Section 29, supra, provides:
"That notwithstanding any provisions of law prohibiting bonds of the United
States (tom bearing the circulation privilege, for a period of three years from the
date of enactment of this Act all outstanding bonds of the United States heretofore
Issued or issued during such period, bearing interest at a rate not exceeding 314%
per annum, shall be receivable by the Treasurer of the United States as security
for the issuance of circulating notes to National banking associations, and upon the
deposit with the Treasurer of the United States by a National banking association
of any such bonds, such association shall be entitled to receive circulating notes
In the same manner and to the same extent and subject to the same conditions and
limitations now provided by law in the case of 2% gold bonds of the United States
bearing the circulation privilege: except that the limitation contained in section 9
of the Act of July 12 15 2, as amended, with respect to the amount of lawful money
which may be deposited with the Treasurer of the United States by National banking
associations for the purpose of withdrawing bonds held as security for their circulating notes, shall not apply to the bonds of the United States to which the circulation privilege is extended by this section and which are held as security for such
notes. Nothing contained in this section shall be construed to modify, amend, or
repeal any law relating to bonds of the United States which now bear the circulation
privilege."
Provisions Regarding Issuance of Currency.
"This statute provides for the issuance of circulating notes to National
banking associations, and, with an exception not material to your first
question, requires that such notes shall be issued in accordance with and
subject to the conditions under which are issued circulating notes secured
by 2% gold bonds of the United States. One of the conditions under
which the latter notes are issued is that prescribed by Section 13 of the
Act of March 14 1900, c. 41, 31 StaL 45, 49 (U. S. C., Title 12, Sec. 542),
as follows:
"That every Natonal banking association having on deposit, as provided by law.
bonds of the United States bearing Interest at the rate of 2% per annum, issued
under the provisions of this Act, to secure its circulating notes, shall pay to the
Treasurer of the United States, in the months of January and July, a tax of g 01 1%
each half-year upon the average amount of such of its notes in circulation as are
based upon the deposit of said 2% bonds and such taxes shall be in lieu of existing
taxes on its notes in circulation Imposed by section 5214 of the Revised Statutes.
"Section 13 of the Act of March lf 1900, just quoted, reduced the tax
imposed by Section 5214 of the revised statutes on the average amount of
notes which each National banking association has in circulation secured
by 2% gold bonds of the United States from one-half of 1% to one-fourth
of 1% semi-annually.
"Since Section 29 of the Federal Home Loan Bank Act provides that,
with an exception not material here, the notes issued pursuant to that
statute are to be issued upon the same conditions as are provided by law
in the case of 2% gold bonds of the United States bearing the circulation
privilege, and since it is clear that the tax upon notes based upon the
deposit of said 2% bonds is now one-fourth of 1% semi-annually, it seems
entirely clear that this is the rate of fax applicable to notes issued pursuant to the provisions of the Federal Home Loan Bank Act.
Circulation Privilege Ruled Limited to Three Years.
"While the provisions of Section 29 which bear upon this question are so
clear that resort to the legislative history as an aid to construction seems
to be unnecessary, I have examined the legislative history, and while
there is very little material which bears upon this particular question,
such as there is clearly supports my construction of the statute. (See
Congressional Record, Vol. 75, No. 169, page 15380, 72nd Congress, First
Session.)
"Your second question involves particularly the construction of the
following portion of Section 29 of the Federal Home Loan Bank Act:
. . . for a period of three years from the date of enactment of this Aid all outstanding bonds of the Untied States heretofore issued or Issued during such Period,
bearing interest at a rate not exceeding 334% per annum, shall be receivable by the
Treasurer of the United States as security for the issuance of circulating notes to
National banking associations, and upon the deposit with the Treasurer of the
United States by a National banking association of any such bonds, such 81390CMtion shall be entitled to receive circulating notes . . .
"The provision which excepts the bonds of the United States to which the
circulation privilege is extended by this section, and which are held as
security for such notes from the limitations contained in Section 9 of the
Act of July 12 1882, as amended, with respect to the amount of lawful
money which may be deposited with the Treasurer for the purpose of
withdrawing bonds held as security for their circulating notes must also
be considered in connection with your second question.
"The problem presented appears to me to be whether the provisions of
Section 29 require that the circulation privilege of bonds deposited pursuant
to that section shall cease three years after the date of the enactment of the
Act or whether the Act merely means that after three years no more of
such bonds may be deposited and accorded the circulation privilege without,
however, affecting the circulating privilege of bonds deposited within the
three-year period, leaving such circulation privilege outstanding during the
entire remaining life of the bonds deposited.
Intent of Congress Declared Clearly Expressed.
"The effect of the first construction is, of course, to permit a temporary
expansion of the currency which is to terminate at the end of three years,
while the effect of the latter construction would be to effect an expansion
of the currency which would be permanent during the life of the bonds to
which the circulation privilege was accorded.
"It must be admitted that the language of the statute is not entirely free
from ambiguity, and, in order to determine the intent of Congress and
construe the language of the statute so as to effectuate that intent, it
seems to me proper and necessary to resort to the legislative history of
this provision. The only committee report which deals with the Section
is the report of the Conference Committee, in which the following statement is made by the managers of the part of the House with respect to the
provisions of Section 29 (H. Rep. No. 1775, 72nd Cong., 1st Sees.):
"'Amendment No. 46: This amendment authorizes United States bonds
bearing interest at a rate not in excess of 3%% to bear the circulating
privilege for a period of three years after the enactment of this Act. . .
"A careful examination of the debates in the Senate and Rouse dealing
with this provision has also been made. Several statements in the course
of such debates by those who may be regarded as sponsors of this legislation
and others throw light on the intention of Congress. The provisions for
the extension of the circulation privilege to the bonds mentioned in Section 29 is referred to as not 'a permanent proposition,' as 'a temporary
Financial Chronicle
Volume 135
expedient,' as 'a sound way of expanding the currency to meet the exigencies
of this particular time,' as 'a temporary arrangement.'
Views of Expiration Period Discussed.
"It is said that the provision 'expires by limitation of law.' It is also
said that 'the whole thing terminates at the end of five years . .
[Changed later to three years in the provision as passed.] (For the foregoing, see Congressional Record, Vol. 75, No. 168, page 15301, 72nd
Cong., 1st Sass.)
"Reference is also made to the three-year provision by a member of the
House Banking and Currency Committee, who was also one of the House
conferees on the Bill, as follows (Congressional Record, Vol. 75, No. 175,
page. 16113, 72nd Cong., 1st Seas.):
". . . Suppose they issue $000,000,000 of National bank notes
under this provision. It is for three years. At the end of three years
what will happen? You will find an inflation up to that time, and at the
end of three years it has got to end, and they have got to be called in, and
the contraction of a billion dollars, in round numbers, in the currency in
this country in 1935 will be upon us. . . ."
"A member of the House, speaking against the Bill, and referring to the
circulation privilege afforded to certain bonds by its provisions, said
,(Congressional Record, Vol. 75, No. 175, page 16111, 72nd Cong., 1st Seas.):
. . They would lose their circulation privilege automatically in
three years, and thus all circulation would be retired. . . ."
Permanent Expansion Not Provided in Act.
"I find nothing in the legislative history which indicates that it was
the purpose of Congress in adding Section 29 to the Federal Home Loan
Bank Act to provide for a permanent expansion of the currency beyond
the three-year period.
"Reading the provisions of Section 29 in an effort to carry out the
intent of Congress as disclosed by the legislative history of the measure, it
is my opinion that the three-year period prescribed by Section 29 means
that the bonds referred to in said Section lose the circulation privilege at the
end of the three-year period and the notes issued upon the deposit of such
bonds must be retired in an appropriate manner."
The text of the Federal Home Loan Act was given in our
issue of July 23, page 545. An item with reference to doubtful provisions of the Glass-Borah Amendment appeared in
our issue of Aug. 13, page 1094.
Volume of Commercial Paper Outstanding as Reported
to New York Federal Reserve Bank $100,400,000 on
July 31 as Compared with $103,300,000 on June 30.
The following was released by the New York Federal
Reserve Bank on Aug. 19:
Reports received by this bank from commercial paper dealers show a
total of $100,400,000 of open market commercial paper outstanding on
July 31. 1932.
On June 30 the volume of commercial paper outstanding
was reported by,the Reserve Bank at $103,300,090. Below
we furnish a record of the figures since they were first reported by the Bank of Oct. 31 1931:
1932—
July 31
June 30
Mar 31
April 30
Mar.31
Feb. 29
Jan. 31
1931—
$100,400,000 Dec. 31
103,300.000 Nov.30
111,100,000 Oct. 31
107,800.000
105,606,000
102,818.000
107,902,000
$117,714,784
173,684,384
210.000,000
Tenders of $333,747,000 Received to Offering of 875,000,000 or Thereabouts of 91-Day Treasury Bills—Bids
Accepted 875,016,000—Average Rate 0.48%.
Tenders of $333,747,000 were received to the offering of
$75,000,000 or thereabouts of 91-day Treasury bills, dated
Aug. 17, to which reference was made in these columns
Aug. 13, page 1094. The amount of bids accepted was
$75,016,000. The average price of the bills to be issued is
$99,878,—the average rate on a bank discount basis being
0.48%. Announcement of the result of the offering was
made as follows at the Treasury Department on Aug. 15.
Acting Secretary of the Treasury Ballantine announced to-day that the
tenders for $75,000,000, or thereabouts, of 91-day Treasury bills, dated
Aug. 17. 1932, and maturing Nov. 16, 1932. which were offered on Aug. 11,
were opened at the Federal Reserve Banks on Aug. 15.
The total amount applied for was $333,747,000. The highest bid made
was 99.881, equivalent to an interest rate of about 0.47% on an annual
basis. The lowest bid accepted was 09.869, equivalent to an interest rate
.of about 0.52% on an annual basis.
The total amount of bids accepted was $75,016,000. The average price
of Treasury bills to be issued is 99.878. The average rate on a bank discount basis is about 0.48%•
The previous offering of 91-day Treasury bills, to the
amount of $75,000,000, brought tenders of $333,468,000, and
the average rate of the bills to be issued in that case ($75,217,W0) was 0.53%. The results of that offering appeared on
page 1094 of our issue of a week ago.
New Offering of 91-Day Treasury Bills to Amount of
$60,000,000 or Thereabouts.
Announcement of a new offering of 91-day Treasury bills,
to the amount of $60,000,000 or thereabouts, was made on
Aug, 17 by Acting Secretary of the Treasury Ballantine.
They will be put out to meet a maturing issue of $60,050,000.
Tenders for the new issue will be received up to 2 p. m.,
Eastern Standard time on Monday, Aug. 22. The bills,
-which are sold on a discount basis to the highest bidders,
will be dated Aug. 24 1932,and will mature on Nov.23 1932,
1261
and on the maturity date the face amount will be payable
without interest. They will be issued in bearer form only,
and in amounts or denofr Mations of $1,000, $10,000,
$100,000, $500,000, and $1,000,000 (maturity value). The
announcement of Assistant Secretary Ballantine also says:
No tender for an amount less than $1.000 will be considered. Each
tender must be in multiples of $1,000. The price offered must be expressed
on the basis of 100. with not more than three decimal places. e.g., 99.125.
Fractions must not be used.
Tenders will be accepted without cash deposit from incorporated banks
and trust companies and from responsib'e and recognized dealers in investment securities. Tenders from others must be accompanied by a deposit
of 10% of the face amount of Treasury bills applied for, unless the tenders
are accompanied by an express guaranty of payment by an incorporated
bank or trust company.
(Ohio) Mutual Exchange to Serve as Medium
of Exchange Between Producers and Workers.
Associated Press advices from Dayton, Ohio, on Aug. 15
said:
Dayton
Incorporation of the Dayton Mutual Exchange, which has as its purpose
equitable relief for the poor, was announced to-day. It will operate
without profit and furnish a medium of exchange in lieu of money between
producers and workers, upon the principle of equitable transfer of provisions. goods and labor for consumption and use instead of bargain
and sale.
8614,742,100 Government Securities Removed from
List of Treasury Obligations Acceptable for Payment of Income Taxes.
New Treasury regulations issued on Aug. 12 by David
Burnet, Commissioner of Internal Revenue, remove $614,742,100 Government securities from the list of Treasury
certificates and notes acceptable for the payment of income
and profit taxes. In his ruling the Commissioner says:
Collectors of Internal Revenue are authorized and directed to receive.
at par in payment of income and profits taxes payable at the maturity of
the certificates or notes, Treasury certificates of indebtedness and Treasury
notes the maturity dates of which are the fifteenth day of any calendar
month, and which according to the express terms of their issue are made
acceptable in payment of income and profits taxes.
Collectors are not authorized hereunder to receive in payment of income
and profits taxes any certificates or notes not expressed to be acceptable,
nor any such certificate or note which matures on a date other than the
date on which the taxes are payable.
The New York "Times'in a Washington dispatch Aug. 12
said:
Formerly certificates maturing on the fifteenth day of March, June,
September and December, the quarterly tax payment dates, were acceptable. A total of $344.492,500 in certificates is added to the acceptable
list. Notes maturing at any time were acceptable under the oli regulations, but the new provision reduces the eligible list of these by $959,234,600. Under the old regulations notes were acceptable for payment of
taxes due within six months of their maturity, but in order to avoid interest
adjustments the Treasury withdrew this privilege.
Plans Developed for Formation of Commodities Finance
Corporation—To Finance Marketing of Agricultural and Other Commodities—Note Issue Up to
$50,000,000 to Be Subscribed for by New York
Banks—Two Subsidiary Corporations Proposed.
Definite announcement of the plans to organize the Commodities Finance Corporation was made this week; a statement by Mortimer N. Buckner, President of the New York
Clearing House Association, issued on Aug. 18, gives details
decided upon and indicates that the corporation "has been
organized primarily for the purpose of facilitating the financing of the purchase, carrying and orderly marketing, for
domestic consumption or export, of agricultural and other
commodities." The corporation is to be authorized to issue
up to $50,000,000 in notes, and "members of the New York
Clearing House Association and other New York City banks
will be requested to subscribe to the notes at par in an
amount equal to 3A% of their capital, surplus and undivided profits, or 1% of their respective net demand and
time deposits as at July 30 1932, whichever is less." There
are also to be formed two subsidiary corporations, one to
undertake an acceptance business and the other to engage
in. a finance business. The movement to form the corporation has heretofore been referred to in these columns—
Aug. 6, p. 907, and Aug. 13, p. 1096. The new corporation
will have only a nominal capital. With regard to the new
corporation the New York "Journal of Commerce" of
Aug. 19 said:
The board of directors will consist of a representative of each of the
Clearing House banks. On Monday the directors will hold their first
meeting, electing a chairman and officers. Provision is made for the formation of an executive committee.
It was carefully emphasized that the business to be done by the corporaton would be conducted on a sound banking basis and that its operations
in no way would resemble those of a pool. The charter will not permit
the direct purchase of commodities which is granted only as a power incidental to that of financing commodities transactions.
1262
Financial Chronicle
Plans Revised.
The proposal to form a commodities financing corporation was advanced
early this month by Eugene Meyer, Governor of the Federal Reserve
Board. It is understood that the original intention was to build up a reservoir of credit which would rapidly enter the commodities markets and
serve to raise prices. Credits would, however, only be issued to finance
the actual movement of goods and not for the purpose of building up
speculative stocks.
Bankers were not enthusiastic over the plan and recalled that proposals
more or less similar had been made when prices were at much higher levels.
At the same time there was no desire to oppose directly the efforts of the
sponsors of the plan. It was felt that a mean could be found between
divergent views.
done
When plans first were formulated the news of what was being
finanfirst was whispered about in Wall Street and then wired to principal
many
cial centers all over the world. With no definite statement of aims
raise
members of the financial community supposed that it was desired to
the
and
securities
commodity prices in order to back a possible rise in
plan
notion was spread that the corporation was part of a much broader
worked out by the Administration.
preThe rise in commodities prices, which was based upon the false
upon
suppositions of the markets discouraged those who had been called
said
with
begin
to
it
to
opposed
to form the corporation. Those who were
that with rising prices such a corporation appeared to be superfluous.
Interior Business.
known.
What business there will be for the new corporation is not yet
It was stated yesterday that the organization starts with blank ledgers
its
Although
borrow.
to
wish
and must await inquiries from those who
duplicated by
services in accepting paper and in extending credits are
will,
those offered by the large New York banks, it is believed that it
There is
nevertheless, find borrowers who do not come to Wall Street.
the
to
come
not
does
considerable interior business, it was said, which
Corp.
New York banks, but which should C4)1110 to the Commodities Finance
Mr. Buckner's announcement of Aug. 19 follows:
Plan of Organization and Operation of the Commodities /finance
Corporation.
(Dated August 1932.)
A corporation is to be organized under the laws of the State of Delaware
capital.
called The Commodities FinanceCorporation. with a nominal
It is to have the usual corporate officers and a Board of Directors with
Committee.
the usual powers of Directors and provision for an Executive
Purposes of the Corporation.
The Commodities Finance Corporation (hereinafter called the Corporation) has been organized primarily for the purpose of facilitating the financing of the purchase,carrying and orderly marketing, for domestic consumption or export, of agricultural and other commodities.
The sound and effective financing of these transactions may require
different methods and in consequence operations will be conducted wherever
deemed advisable through separate subsidiary corporations. Subsidiary
corporations therefore will be orgamzed under the laws of the State of New
York, but in no event will the Corporation directly or through its subsidiaries, nor will any of the subsidiaries, purchase any commodities except
where necessary to protect loans or acceptances or other credits.
Two subsidiary corporations will be forthwith organized. One corporation is to undertake an acceptance business exclusively and the other corporation is to undertake a finance business, making loans or extending other
credit facilities, all upon such terms as it is anticipated should enable those
with satisfactory business responsibility to obtain proper accommodations
upon a sound banking basis.
Method of Operation.
The Corporation is to be authorized to issue up to $50,000,000 Principal
amount in Notes. Members of the New York Clearing House Association
and other New York City banks will be requested to subscribe to the Notes
at par in an amount equal to 3M % of their capital, surplus and undivided
profits or 1% of their respective net demand and time deposits as at July
30 1932, whichever is less.
Subscriptions will be payable in Instalments on call of the Board of Directors, when and as required. Notes are to be issued from time to time to
the principal amount of the instalments paid.
The Notes of the Corporation will,subject to the payment of the expenses
and other liabilities of the Corporation, have behind them all of the assets
of the Corporation, which will consist principally of the capital stock of
the subsidiary corporations and the obligations evidencing the indebtedness
subof the subsidiary corporations to the Corporation. In the case of the
by
sidlary acceptance corporation, the capital funds will be obtained only
subsidiary
the
of
the
In
case
the issue of Its shares to the Corporation.
finance corporation it is contemplated that the capital stock will be $2,000,as
000 and additional funds will be advanced to it by the Corporation
and when required, or by banking institutions who subscribe to the Notes
of the Corporation.
Character of Notes.
The Notes will be issued under an Agreement and will be payable one
year from their date, with the right to the Corporation to one or more extensions of the date of maturity, not exceeding in the aggregate two addl.
tional years, but are subject to earlier redemption at the option of the
Corporation at their face amount plus interest as provided in the Agreement. Notes will carry interest, If earned, at a rate up to but not exceeding 6% per annum, payable until maturity, only out of the surplus and
net income of the Corporation when and as ascertained and declared by the
Board of Directors.
The Agreement under which the Notes are to be issued and the Notes
will provide, in connection with redemption and maturity, for participation
In the net earnings of the Corporation by the holders of the Notes according to the principal amount thereof held by them, respectively, and the
Agreement will limit annual dividends upon the shares of stock of the
Corporation to 6% upon the par value thereof.
The Notes will be issued in registered form only and will be authenticated
by a bank or trust company as Agent. The Notes and the Agreement under
which they are issued will contain such other terms and provisions as shall
be approved by the Board of Directors of the Corporation.
Office,
It Is contemplated that the main office of the Corporation and its Prin_•_
of New York.
cipal subsidiaries will be in the City
Commodities Finance Corporation May Aid Cotton
Mills—Not, However, Linked to Proposed Syndicate
to Purchase 3,000,000 Bales of Cotton.
Proposed plans of a syndicate composed of cotton mill
and financial interests to purchase about 3,000,000 bales
Aug. 20 1932
of cotton either held directly or indirectly by the Farm
Board are not connected with the Commodities Finance
Corporation, said the New York "Times" of Aug. 19, which
went on to say:
However, since this cotton is to be purchased by the cotton mills for
consumption, a mill desiring financial assistance from the Commodities
Finance Corp.so as to carry the product probably could obtain the necessary
aid.
The plan for the purchase of the Farm Board's cotton and that which
the Farm Board is financing for the various cotton co-operative associations in the South is understood to have been placed before the Farm
Board for its consideration. In view of the large number of organizations
Interested in the transaction, consummation likely will require several
days. The syndicate of mill owners with the necessary financial backing
has been in process of formation for about two weeks and it was only at
the close of last week that a tentative plan for the purchase of this cotton
was agreed to by the members of the syndicate.
The syndicate, which has been formed with a view to purchasing this
cotton in order that it can be placed in consumption in an orderly way
so as to be as small a factor as possible in the cotton market, is described
as "neither a pool nor a holding corporation." Since July 9, the Farm
Board or cotton co-operatives have been large sellers of this cotton on the
New York Cotton Exchange and more than 300,000 bales have been
disposed of in this manner. This selling, it is maintained, has prevented
the cotton market from advancing as much as crop conditions and other
factors warrant. To relieve the market of this unsettling influence is one
of the main objects of the organisation of this syndicate.
The blans of the syndicate call for the purchase of this cotton for delivery,
starting one year hence, at the rate of 50,000 bales monthly for the first
year and 75,000 bales monthly from then until the holdings are exhausted.
With the exception of perhaps 500.000 bales, the price for which will be
based on the closing quotations for October contracts on the New York
Cotton Exchange at the times of the consununation of the deal, the price
to be paid will be approximately the market price at the time of delivery.
The cotton will be allocated to the various mills of the country on the
basis of their annual requirements. However, no mill will be permitted
to subscribe to more than 20% of its requirements for any one year. In
this way, it is maintained that no mill will receive preference, while the
cotton will go into consumption in an orderly way. Consequently, every
mill will remain in the market for at least 80% of its cotton requirements
elm"' Year.
The formation of a similar syndicate for the purchase of the remainder
of the Farm Board's holdings of wheat also has been discussed, although
this probably would be more of a pool operation. The Farm Board, according to estimates about two weeks ago, had reduced its wheat holdings
to about 50,000,000 bushels In the spot and futures markets. The bellef
is that these holdings have been further reduced in the meantime. At one
time the Farm Board's holdings of wheat amounted to around 250,000,000
bushels.
President Hoover Calls National Conference of Business
Committees Representing Federal Reserve Districts
—To Be Held Aug. 26 to Organize Program for
Economic Recovery.
A national conference of business and industrial committees of all the Federal Reserve Districts has been called by
President Hoover, the conference to be held at Washington,
on Aug. 26. In his announcement, issued Aug. 14, the President indicates that it will be held "for the purpose of
organizing a concerted program of action along the whole
economic front." In making known his nine-point program
of July 29 to effect economic recovery (given ,in these columns Aug. 6, page 905), the President indicated that the
calling of the conference was among his proposals. Wider
expansion of credit facilities to business and agricultural
interests, expansion of programs for repairs of railways,
measures to provide for increased employment and the
world economic conference are among the subjects to be
considered at the conference. The President's announcement of Aug. 14 follows:
I have called a national conference for Aug. 26 of the business and
Industrial committees of the 12 Federal Reserve Districts for the purpose
of organizing a concerted program of action along the whole economic front.
The conference will deal with specific projects where definite accomplishments in business, agriculture and employment can be attained, and will
co-ordinate the mobilization of private and governmental instrumentalities
to that end.
On July 29 I announced that preliminary conversations were in progress
between responsible heads of the Government instrumentalities and private
groups in business and industry as to such a prograrn, and that at a later
time I would announce the date of a conference for a more definite development of these ideas. The areas of positive and definite action have been
further explored by informal discussions between representatives of various
groups and industries with Government officials during the past two weeks.
Twelve committees representing the Federal Reserve Districts were
established some weeks ago. I have asked the Chairmen of these committees, together with the Government officials set out below to meet in
Washington the day before the conference for the purpose of preliminary
preparation of the program of the organization.
Members Organization Committee.
Members of the Organization Committee are:
Carl P. Dennett, Chairman, Boston District.
Owen D. Young, Chairman, New York District.
George H. Houston, Chairman, Philadelphia District.
L. B. Williams, Chairman, Cleveland District.
Edwin C. Graham, Chairman, Richmond District.
George S. Harris, Chairman, Atlanta District.
Sewell L. Avery, Chairman, Chicago District.
J. W. Harris, Chairman, St. Louis District.
George D. Dayton, Chairman, Minneapolis District.
Joseph F. Porter, Chairman, Kansas City District.
Frank Kell, Chairman, Dallas District.
K. R. Kingsbury, Chairman, San Francisco District.
Ogden L. Mills, Secretary of the Treasury.
Arthur H. Hyde, Secretary of Agriculture.
Volume 135
Roy D. Chapin, Secretary of Commerce.
W. M. Doak, Secretary of Labor.
Eugene M. Meyer, Governor of the Federal Reserve Board.
Atlee Pomerene, Chairman, Reconstruction Finance Corporation.
Paul Bestor, Chairman, Farm Loan Board.
Franklin D. Fort, Chairman, Federal Home Loan Bank Board,
James C. Stone, Chairman, Federal Farm Board.
In addition, I shall appoint some special committees to advise on particular questions which directly concern agriculture, labor, railways and
other industries and groups which are directly affected.
Subjects to Be Considered.
Among the subjects which will be considered and definitely formulated are:
A canvass of the means, methods, agencies and powers available in the country
for general advancement: wider expansion of the credit facilities to business and
Industry where consumption of goods is assured; co-ordination and expansion of live
stock and agricultural credit facilities: co-ordination and expansion of financial
facilities for the movement of commodities into consumption; expansion of programs
for the repairs and maintenance of the railways; and creation of organization for
further spread of existing employment and expansion of employment.
A number of other possible questions such as the forthcoming world economic
conference; protection of bondholders and mortgages renewals, co-ordination with
these groups and other subjects will be explored. It is expected to outline a basis
for public, commercial and trade group co-operation in the expectation of the purposes of the conference.
Members of the Conference additional to Preliminary Committee:
Members of the Reserve District Business and Industrial Committees:
[The annexed list is from the Washington dispatch, Aug. 14, to the New
York "Herald Tribune".]
Boston District.
Thomas Nelson Perkins, Chairman of the Boston & Maine RR., director
of the American Telephone & Telegraph Co., member of the Executive
Committees of Stone & Webster, Inc., and the Lee, Higginson Trust Co.
Louis E. Kirstein, Vice-President William Filene's Sons Co., Boston.
Dr. Arthur W. Gilbert, Commissioner of Agriculture of Massachusetts.
P. A. O'Connell, President E .T. Slattery Co., Boston, member of the
Board of Investment of the Union Savings Bank of Boston, director of the
National Shawmut Bank of Boston.
Nathaniel F. Ayer, Treasurer and director of the Cabot Manufacturing
Co., Boston; director of the New York Life Insurance Co.
Frank D. Comerford, President New England Power Association; President Massachusetts Power & Light Associates; Vice-President International
Paper & Power Co.
Harry K. Noyes, President Noyes Buick Co. of Boston.
Philip Stockton, President First National Bank of Boston.
Walter S. Bucklin, President National Shawmut Bank, Boston; Chairman Liberty Mutual Insurance Co., Boston.
Wilmot R. Evans, President Boston Five Cents Savings Bank.
George H. Clough, President Russell Co., Boston, and the Russell Coal Co.
New York District.
Mortimer N. Buckner, Chairman of the Board New York Trust Co.
Floyd L. Carlisle, President F. L. Carlisle & Co., Inc.; Chairman of the
Board of the Niagara Hudson Power Corp.
Walter S. Gifford, President American Telephone & Telegraph Co.
Charles E. Mitchell, Chairman of the Board, National City Bank.
William C. Potter, President, Guaranty Trust Co.
Jackson E. Reynolds, President, First National Bank.
Alfred P. Sloan, Jr., President, General Motors Corp.
Walter 0. Teagle, Presidet, Standard Oil Co. of New Jersey.
Albert A. Tilney, Chairman of the Board, Bankers' Trust Co.
Albert H. Wiggin, Chairman of the Governing Board, Chase National Bank.
Clarence M. Woolley, Chairman of the Board, American Radiator and
Standard Sanitary Corp.
Philadelphia District.
William Wallace Atterbury, President, Pennsylvania RR. Co.
Arthur C. Dorrance, President, Campbell Soup Co., Camden, N. J.
hence du Pont, Vice-Chairman of the Board, E. I. du Pont de Nemours &
Co., Wilmington, Del.
Edward Hopkins, Jr., partner J. P. Morgan & Co.; partner Drexel & Co.,
Philadelphia.
William A. Law, President, Penn Mutual Life Insurance Co.
Howard A. Loeb, Chairman, Tradesmen's National Bank & Trust Co.,
Philadelphia.
George Horace Lorimer, editor in thief, "The Saturday Evening Poet."
Benjamin Rush, President, Insurance Co. of North America.
Burton C. Simon, real estate man and builder; Trustee of Temple
University.
Herbert J. Tily, President, Strawbridge & Clothier, Philadelphia.
John E. Zimmermann, President, United Gas Improvement Co., Phila.
delphia.
Cleveland District.
Henry G. Dalton, Senior Vice-President, Youngstown Sheet & Tube Co.
John J. Bernet, President, Chesapeake & Ohio RR. Co.
Harris Creech, President, Cleveland Trust Co.
Wilbur M. Baldwin, President, Union Trust Co. of Cleveland.
Henry C. M'Eldowney, President, Union Trust Co. of Pittsburgh.
Andrew Wells Robertson, Chairman of the Board, Westinghouse Electric &
Manufacturing Co., Cleveland.
Howard Heinz, President, H. J. Heins Co., Pittsburgh.
Ernest T. Wier, Pittsburgh, President, Bank of Weirton; Chairman of
the Board, National Steel Corp. and Midwest Steel Corp.
William Cooper Procter, Chairman of the Board, Procter & Gamble
Co.,
Cincinnati.
George D. Crabbe, President, Philip Carery Manufacturing Co., Lock.
land, Ohio; director Federal Reserve Bank of Cleveland; President Cincinnati Railroad Development Co.
Edward W. Edwards, President Fifth Third Union Trust Co., Cincinnati.
Thomas J. Davis, Chairman of the Board, First National Bank of
Cincinnati.
Harvey S. Firestone, President, Firestone Tire & Rubber Co., Akron.
George M. Verity, Chairman of the Board, American Rolling Mill Co.,
Middletown, Ohio.
Richmond District.
Charles A. Cannon, President Cannon Mills Co., Kannapolis, N. C.
Robert V. Fleming, President, Riggs National Bank, Washington.
A. H. S. Post, President, Mercantile Trust Co., Baltimore.
Charles M. Cohn, Vice-President, Consolidated Gas, Electric Light &
Power Co., Baltimore.
Robert P. Beaman, President, National Bank of Commerce & Trusts,
Norfolk, Va.
John M. Miller, Jr., President, First & Merchants' National Bank of
Richmond, Va.
1263
Financial Chronicle
John Stewart Bryan, President and publisher, "The News Leader," Richmond, Va.
Charles Edwin Michael, President, Virginia Bridge & Iron Co., Roanoke, Va.
Henry B. Lewis, Vice-President, Kanawha Banking & Trust Co., Charleston, W. Va.
John 11. Crawford, Parkersburg, W. Va.
H. M. Victor, President, C. C. Coddington, Inc., Charlotte, N. 0.;
President, Statesville Shoe Manufacturing Co.
A. L. M. Wiggins, Hartsville, S. C.
James C. Self, President of the Greenwood Cotton Mill, Greenwood, S. C.
Atlanta District.
Robert F. Maddox, Chairman Executive Committee, First National Batik
of Atlanta.
Thomas R. Preston, President, Hamilton National Bank of Chattanooga, Tenn.
Paul M. Davis, President, American National Bank, Nashville, Tenn.
Rudolf S. Hecht, President, Hibernia Bank & Trust Co., New Orleans.
Crawford Johnson, President, Crawford Johnson & Co., Inc., Birmingham, Ala.
Benjamin S. Read, President, Southern Bell Telephone & Telegraph Co.
Mills B. Lane, Chairman, Citizens' & Southern National Bank, Savannah, Ga.
William Ravenel McQuaid, President, Barnett National Bank, Jacksonville, Fla.
Edgar B. Stern, Treasurer, Lehman, Stern & Co., New Orleans; President,
Southern States Land & Timber Co.; director, Times-Picayune Publishing Co.
Wallace B. Rogers, director, Leader Publishing Co., Laurel, Miss.;
director, First National Bank of Laurel.
John C. Persons, President, First National Bank, Birmingham.
Chicago District.
George A. Ranney, Vice-President and Treasurer, International Harvester Co.
General Robert E. Wood, President, Sears, Roebuck & Co.
John Smart, President, Quaker Oats Co., Chicago.
Daniel F. Kelley, Chicago.
Fred W. Sargent, President, Chicago & North Western Railway.
George M'Clelland Reynolds Chairman Executive Committee, Continental Illinois Bank & Trust CO., Chicago.
Melvin A. Traylor, President, First National Bank, Chicago.
Albert W. Harris, Chairman of Board, Harris Trust & Savings Bank,
Chicago.
Philip R. Clarke, President, Equity Ownership Corp., Chicago.
Solmon H. Smith, Chicago.
•
St. Louis District.
Alfred L. Shapleigh, Chairman of Board, Shapleigh Hardware Co., St.
Louis.
Frank C. Rand, Chairman of Board, International Shoe Co., St. Louis.
Eugene D. MUM, Chairman of Board, Southwestern Bell Telephone Co.,
St. Louis.
Ernest W. Stix, President, Rice-Stix Dry Goods Co., St. !Allis.
John C. Lonsdale, President, Mercantile-Commerce Bank & Trust Co.,
St. Louis.
Frank 0. Watts, Chairman of Board, First National Bank in St. Lou's.
Sidney Maestre, President, Mercantile-Commerce Co., St. Louis.
Tom K. Smith, President, Boatmen's National Bank, St. Louis.
Whitefoord R. Cole, President, Louisville & Nashville RR. Co.
Paul Dillard, President, Dillard & Coffin Co., Memphis, Tenn.
W. B. Plunkett, Little Rock, Ark.
Kansas City District.
Carl R. Gray, President, Union Pacific RR. Co., Omaha.
William T. Kemper, President, Kansas City Mexico & Orient Railway Co.
and the Kansas Texas & Mexican Cos.
William Lloyd Petrikin, President, Great Western Sugar Co., Denver.
Waite Phillips, Chairman of Board, Independent Oil & Gas Co., Tulsa, Okla.
Jesse C. Nichols, President, J. C. Nichols Investment Co., Kansas
City, Mo.
H. K. Lindsey, President, Farmers' & Bankers' Life Insurance Co.,
Wichita, Kan.
Conrad H. Mann, Chairman of Board of Insurance Directors, Fraternal
Order of Eagles, Kansas City, Mo.; President, Kansas City Chamber of
Commerce and of Associated Industries of Missouri and Standard Savings .4
Loan Association.
Thad L. Hoffman, President and General Manager, Flour Mills of
America, Kansas City, Mo.
Herbert F. Hall, Kansas City.
George R. Collett, President, Kansas City Stock Yards, Kansas City, Mo.
Michael J. Healey, Vice-President and General Manager, John Deere
Plow Co., Kansas City, Mo.
Walter Scott McLucas, Chairman of Board, Commerce Trust Co., Kansas
City, Mo.
Edward F. Swinney, Chairman of Board, First National Bank, Kansas
City, Mo.
George S. Hovey, President, Inter-State National Bank, Kansas :My, Mo.
Frank P. Johnson, President, First National Bank & Trust Co., Oklahoma
City, Okla.
Milton Tootle, Jr., President, Tootle-Lacy National Bank, St. Joseph, Mo.
Dr. Francis D. Farrell, President, Kansas State Agricultural College.
Charles Q. Chandler, Chairman of Board, First National Bank,
Wichita, Kan.
Minneapolis District.
Elbert L. Carpenter, President, Shevlin, Carpenter & Clarke Co., Minneapolis.
Walter A. Eggleston, Vice-President, David C. Bell Investment Co.,
Minneapolis.
Frederick B. Wells, President, Globe Elevator Co.; Vice-President, F. H.
Peavey & Co., Minneapolis.
Alfred Fiske Pillsbury, Treasurer, Pillsbury Flour Mills Co., Inc., Minneapolis.
Homer P. Clark, President, West Publishing Co., St. Paul; Deputy Chairman and director, Federal Reserve Bank of Minneapolis.
Frederic R. Bigelow, President, St. Paul Fire & Marine Insurance Co.
Frederick E. Weyerhaeuser, St. Paul, lumber man.
Samuel W. Dittenhofer, Chairman of Board, The Golden Rule, St. Paul;
Vice-President Hahn Department Stores, Inc.
Clive T. Jaffrey, President, Minneapolis St. Paul & Saulte Ste. Marie
Railway Co.
Charles Donnelly, President, Northern Pacific Railway Co., St. Paul.
!I(
1264
Financial Chronicle
William P. Kenney, Vice-President and Director of Traffic, Great Northern
Railway Co., St. Paul.
Edward IV. Decker, President, Northwestern National Bank of Minneapolis.
Lyman E. Wakefield, President, First National Bank, Minneapolis.
Richard C. Lilly, President, First National Bank, St. Paul.
Otto Bremer, Chairman of Board, American National Bank, St. Paul.
Thomas F. Wallace, President, Farmers' & Mechanics' Savings Bank of
Minneapolis.
Warren C. MacFarlane, President and General Manager, MinneapolisMoline Power Implement Co.
Dallas District.
Nathan Adams, President, American Exchange National Bank; member
Executive Committee, Texas Electric Railway; Vice-President, Dallas
Chamber of Commerce.
Fred F. Florence, President, Republic National Bank & Trust Co.;
director, Dallas Joint Stock Land Bank, and Petroleum Corp. of America.
Robert L. Thornton, President, Mercantile Bank & Trust Co. of Texas,
Dallas; director, United Fidelity Life Insurance Co. and Terrell Interurban
Railway Co.
Joseph G. Wilkinson, Chairman of Board, Continental National Bank,
Fort Worth, and Chairman of Board and director of nine other Texas banks.
Francis Marion Law, President, First National Bank, Houston, Tex.;
President and director, Deepwater Oil Refineries, Inc.
Walter P. Napier, President, Alamo National Bank of San Antonio, Tax.;
Secretary, Light Publishing Co.; director, San Antonio Public Service Co.
Arthur L. Kramer, Dallas.
B. L. Anderson, Fort Worth.
H. 0. Wooten, President, H. 0. Wooten Grocery Co., Abilene, Tex.;
director, Farmers' & Merchants' National Bank.
H. L. Kokernot, President, Kokernot-Nixon Properties (Corups Christi),
San Antonio Development Co., First National Bank, Alpine.
W. S. Farrish, Houston.
Aug. 20 1932
Cattle Raisers' & Producers' Co-operation Commission Co., Fort Worth,
Tex., 1921-'23.
James B. Madison, farm mortgage business; organizer, Joint Stock Land
Bank, Charleston, W. Va., 1917.
Vulosko Vaiden, Farmville, Va., for 13 years President, Federal Farm
Land Bank of Baltimore.
National Credit Corporation to Make Seventh Partial
Payment to Subscribing Banks on Aug. 29.
The National Credit Corporation nnounced yesterdaya
(Aug. 19) that it has called for redemption, and will pay on
Aug. 29, 15% of the original principal amount of each'of its
outstanding gold notes (being the amount of a seven.th
partial redemption), upon presentation at the office of the
New York Trust Co. (100 Broadway), agent of the loan.
The "Sun" of last night (Aug. 19), said:
The payment is understood to amount to about $19.000,000 and is the
first redemption since June 13, when the Corporation redeemed 10% of its
gold notes originally outstanding to a total of $135,000,000. The redemption announced to-day will make a repayment to the subscribing banks of
an aggregate of 80% of such total amount, or $105,000,000, leaving only
$30,000,000 of the notes outstanding. On only one previous occasion last
March has the Corporation redeemed as much as 15% of its notes at one
time.
Now that money used by banks during the crop moving season is being
repaid, the Corporation probably will wind up its affairs more rapidly.
Banks particpating in it expect that all of the capital subscribed will be
repaid before the end of the year, permitting National Credit's final liquidation.
San Francisco District.
The June payment was referred to in our issue of June 4,
page 4097.
A. F. Hickenbeamer, San Francisco.
Paul Shoup, President, Southern Pacific Co.
Frank B. Anderson, Chairman of Board, Bank of California National
Association, San Francisco.
Frederick L. Lipman, President, Wells, Fargo Bank dr Trust Co., San
Francisco.
Charles C. Teague, President, California Fruit Growers' Exchange, Los
Angeles.
,John G. Bullock, President, Bullock's, Inc., Los Angeles.
Frank B. Ransome, Portland, Ore.
Downe D. Muir, Jr., Vice-President and General Manager, United States
Smelting, Refining dr Mining Co., Salt Lake City, Utah.
Oliver D. Fisher, President and General Manager, Fisher Flouring Mills
Co., Seattle, Wash.
Walter S. Gifford Resigns as Director of President
Hoover's Organization on Unemployment Relief.
The resignation of Walter S. Gifford, of the American
Telephone & Telegraph Co. of New York, as Director of the
President's Organization on Unemployment Relief was
announced at the White House on August 12.
Mr. Gifford in tendering his resignation indicated to the
President that because of his other obligations he feels that
he cannot undertake the work for another Winter. Mr.
Gifford's letter of resignation follows:
GOVERNMENT OFFICIALS.
Directors Federal Reserve Board.
J. W. Pole, Comptroller of Currency; former director City National
Bank, Decatur, Ala.
Adolph Miller, Professor Economics and Commerce, University of California (1902-'13).
Charles S. Hamlin, Attorney, Assistant Secretary United States Treasury
1893-'97, 1913-'14.
George R. James, President, State National Bank, Memphis, 1910; Chief
of Cotton and Cotton Linter Section, War Industries Board, 1918.
Wayland W. Magee, farmer, Bennington, Neb. Educated University of
Chicago.
Directors Reconstruction Finance Corporation.
Harvey C. Couch, organized Arkansas Light dr Power Co.; President,
Chamber of Commerce, Pine Bluff, Ark.; director, Flood Relief, 1927.
Jesse H. Jones, organized Texas Trust Co., Houston, Tex., 1909; publisher, "Houston Chronicle"; Chairman, Committee on Arrangements,
Democratic National Convention, 1928.
Wilson McCarthy, District Judge, Salt Lake City, Utah, 1918-'20; State
Senator, Utah, 1928-'31; Regent, University of Utah.
Gardner Cowles, publisher, "Des Moines Register"; director, Iowa-Des
Moines National Bank & Trust Co. and Northwest Bancorporation.
Atlee Pomerene, lawyer, United States Senator from Ohio, 1911-23 ;
member law firm, Squire, Sanders & Dempsey; appointed by President
Coolidge in 1924 as prosecutor of oil cases.
Charles A. Miller, lawyer, member firm Miller & Hubbell; President,
Savings Bank of Utica; President (1909) New York State Savings Bank
Association.
Home Loan Bank Board.
Nathan Adams, President, American Exchange National Bank, Dallas;
member, Economic Policy Commission, American Bankers' Association.
John M. Grim, Economist; Professor, Harvard University, 1914-'21:
Chief, Division of Building and Housing, Bureau of Standards, 1921-'28.
William E. Best, Pittsburgh, President, United States Building & Loan
League.
H. Morton Bodfish, Professor, College of Commerce, Ohio State University; Executive Manager, United States Building & Loan League.
Federal Farm Board.
C. B. Denman, farmer, Bollinger County, Missouri; President, Producers'
Live Stock Commission, 1922-'29.
William F. Schilling, farmer; Editor "Northfield (Minn.) News" ;
President since 1917 of Twin City Milk Producers' Association.
Charles S. Wilson, Professor, College of Agriculture, Cornell University,
1908-'15; State Commissioner of Agriculture, 1915-'20; farmer, 1920-'29.
Carl Williams, Editor, "Oklahoma Farmer Stockman" since 1913 ; ViceChairman, Farmers' Co-operative Marketing Association.
Samuel II. Thompson, Agricultural Economist in charge Agricultural
Economics Extension, Iowa State College, 1914-'20; in charge Farm Management and Marketing Extension, same, since 1921.
Frank Evans, Salt Lake City, Utah, Secretary, American Farm Bureau
Federation, 1923-'27; General Marketing Counsel, 1927-'31.
Ernest B. Thomas, Rushville, Ind., former Manager Federal Land Bank
in Puerto Rico.
Federal Farm Loan Board.
John H. Guilt, former member California Assembly, 1911-'12, 1913-'14;
Vice-President, Federal Land Bank, Berkeley, Calif., 1917-'22.
Lewis J. Pettijohn, wheat grower; Receiver, Dodge City (Kan.) Land
Office; former Secretary of State of Kansas.
Albert C. Williams, Editor, "The Cattleman," 1915-'21; President,
August 5 1932.
The President,
•
The White House, Washington. D.C.
Dear Mr. President:
Last August you asked me to set up and become the Director of the
President's Organization on Unemployment Relief for the winter of 19311932. While I have found it possible to carry on somewhat longer than
originally anticipated, I reluctantly feel that I cannot, on account of other
obligations and duties, undertake the work for another winter.
In resigning, I wish to express my deep appreciation of the opportunity
of having served under your leadership in an undertaking so vitally important to our country at this time. Faithfully yours,
WALTER S. GIFFORD.
The President's reply follows:
The White House,
Washington, Aug. 11 1932.
Mr. Walter S. Gifford, American Telephone
cfc Telegraph Co., New York City.
My dear Mr. Gifford:—I have your letter of August 5 and deeply regret
that the time has expired during which you undertook to make the sacrifice
entailed by directing national co-ordination of unemployment relief agencies..
I recognize full well the difficulties it has imposed on you amongst your
Other duties and obligations and I can not, of course, ask you to continueover the coming winter.
I do wish to take this occasion to express the appreciation I have, and
that I know the whole of our people have, for the notable contribution to.
public service you have made during these difficult nines.
I am greatly indebted for your willingness to be laclpful in an advisory
and consulting capacity in setting up co-ordination work for next winter
and will depend upon you. Early in the fall we shall be able to see more
clearly the problems before us, and the measure of co-ordination which,
will be required for the winter. I trust the national and State members
will hold fast. Yours faithfully,
HERBERT HOOVER.
Newton D. Baker Appointed Chairman of National
Citizens Committee of Welfare and Relief Mobilization for 1932—President Hoover to Open Conference
at White House Sept. 15-56 Drafted to Serve on
Committee.
An announcement bearing on the unemployment and
relief situation was made on Aug. 15 by J. Herbert Case,.
Chairman of the Federal Reserve Bank of New York and
President of the Association of Community Chests and
Councils; the announcement made known the appointment
of Newton D.Baker to head the National Citizens Committee
of the Welfare and Relief Mobilization of 1932. Mr. Case
at the same time announced the calling of a conference in
Washington on Sept. 15 by the Association of Community
Chests and Councils, of all community leaders charged with
the responsibility of raising funds for welfare and relief
purposes. This conference will launch the Welfare and
Relief Mobilization of 1932. It will be opened at the White
House by President Hoover, who will deliver a charge U.
Volume 135
Financial Chronicle
the delegatesIon the "Citizens Responsibility for Human
Welfare." The response in behalf of the delegates will be
made by Mr. Baker.
In announcing Mr. Baker's appiontment as Chairman of
the Welfare and Relief Mobilization of 1932 Mr. Case states
that the purpose back of the mobilization, which is sponsored by Association of Community Chests and Councils
in co-operation with 27 other national social service agencies,
is to secure adequate support for all local welfare and relief
programs for the coming winter.
The names of 56 nationally known men and women,
drafted to serve on the National Citizens' Committee for
the Welfare and Relief Mobilization of 1932, have also been
announced by Mr. Case and Newton D. Baker who will
act as Chairman of the newly formed Committee. William
Cooper Proctor of Cincinnati and Dr. George E. Vincent
of New York will serve as Vice-Chairmen.
Mr. Baker in a special statement directed to the members
of the National Citizens' Committee of the Welfare and
Relief Mobilization of 1932 made the following announcement:
•
"The task ahead of us is the greatest we have ever faced. Every social
welfare atency must co-operate. The National Citizen's Committee will
endeavor to mobilize welfare and relief forces throught the United States.
It will be the duty of this Committee to explore and explain the existing
need. When we are through we must have prevented hunger and destitution and saved the Nation's welfare plan from destruction."
The list of members of the National Citizens' Committee
for the Welfare and Relief Mobilization of 1932 is not yet
complete. Those who are reported to have accepted the
invitation of Mr. Case and Mr. Baker are:
Charles E. Adams, President, Cleveland Hardware Co., Cleveland, Ohio.
Julius H. Barnes, President, Barnes Ames Co., Duluth, Minn.
Mrs. August Belmont, Member, Executive Committee, American National
Red Cross, New York.
Frank R. Bigelow, President, St. Paul Fire & Marine Insurance Co.,
St. Paul, Minn.
Cornelius Bliss, Financier, New York.
Mrs. Nicholas Brady, Chairman, National Board of Girl Scouts, New York.
Howard Braucher, President, National Social Welfare Council, New York.
Frank J. Bruno, President, Nat. Conference of Social Work, St. Louis, Mo.
John Stewart Bryan, Publisher. News-Leader, Richmond, Va.
Charles C. Burlingham, President, Welfare Council of New York.
E. L. Carpenter, Shevlin, Carpenter & Clarke Co., Minneapolis, Minn.
Roy D. Chapin, Secretary of Commerce, Washington, D. C.
W. L. Clayton, Anderson-Clayton Co., Houston, Texas.
Channing H. Cox, Ex-Governor of Massachusetts, Worcester, Mass.
Winthrop M. Crane Jr., Capitalist, Pittsfield, Mass.
William H. Crocker, President, Crocker First National Bank, San Francisco, Calif.
Edward D. Duffield, President, Prudential Insurance Co. of America,
Acting President, Princeton University, Newark, N. J.
Fred W. Ellsworth, Vice-President, Hibernia Bank, New Orleans, La,
Otto H. Falk, Chairman, Allis-Chalmers Mfg. Co., Milwaukee, Wis.
Russell G. Fessenden, Vice-President, First National Bank, Boston, Mass.
Mortimer Fleishhacker, Chairman, Anglo-California National Bank &
Trust Co., San Francisco, Calif.
Rt. Rev. James E. Freeman, Protestant Epis. Bishop of Washington, D. C.
Harvey D. Gibson, President, Manufacturers' Trust Co., New York.
Walter S. Gifford, President, American Telephone & Telegraph Co., New
York.
William Green,President, American Federation of Labor, Washington, D.C.
Warren S. Hayden, Hayden Miller Co.. Cleveland ,Ohio.
Howard Heinz, President, H. J. Heinz Co., Pittsburgh, Pa.
Louis E. Kirstein, Vice-President, William Filene's Sons Co., Boston, Mass.
Harry C. Knight, President, So. New England Telephone Co., New
Haven, Conn.
Joseph Lee, President,'National Recreation Association, Boston, Mass.
Thomas W. Lamont, J. P. Morgan Co., New York.
Bishop Francis J. McConnell, President, Federal Council of Churches,
New York.
Tracy W. McGregor, President, Detroit Community Fund.
John Barton Payne, Chairman, Amer. Nat. Red Cross, Washington, D. C.
Frederick Patterson, President, National Cash Register Co., Dayton, Ohio.
George Wharton Pepper, Ex-Senator from Pennsylvania, Philadelphia, Pa.
F. W. Ramsey, Former Chairman, Cleveland Community Fund, Cleveland, Ohio.
Rush Rhees, President, University of Rochester, Rochester', N. Y.
Edward L. Ryerson Jr., President, Joseph T. Ryerson & Son. Chicago, Ill.
Alfred Schoellkopf, Vice-President, Niagara Hudson Power Co.. Buffalo.
New York.
Joseph Scott, Attorney, President, Community Chest, Los Angeles, Calif.
Rabbi A. H. Silver, Cleveland, Ohio.
Alfred E. Smith, Ex-Governor, New York.
Tom K. Smith, President, Boatmen's National Bank, St. Louis, Mo.
Mrs. Robert E. Speer, Past President, National Council of Y. W. C. A.,
New York.
Lillian Wald, Henry Street Settlement, New York.
Felix M. Warburg, Kuhn, Loeb & Co., New York.
J. 11. Welborn, Chairman, Colorado Fuel & Iron Co., Denver, Colo.
Oscar Wells, Chairman, First National Bank, Birmingham, Ala.
Robert W. Woodruff, President, Coca Cola Co., Atlanta, Ga.
Col. Arthur Woods, Ex-Police Commissioner, New York.
C. S. Woolworth, Chairman, F. W. Woolworth Co.. Scranton, Pa.
Owen D. Young, Chairman, General Electric Co., New York.
According to Mr. Case the Committee has offered its
services to President Hoover in furtherance of his plans for
stimulating local efforts for unemployment relief. Community leaders responsible for the raising of local funds for
social service work and citizens interested in welfare and
relief problems will be personally invited to participate in
Lit' White House conference.
1265
Publicity To Be Given to Loans Made by Reconstruction
Finance Corporation Under Emergency Relief
Act—Clerk of House Decides It Was Intent of
Congress to Make Data Available—Views of President Hoover and Representative Rainey.
The decision of South Trimble, Clerk of the House of
Representatives, to permit the monthly reports of loans
made by the Reconstruction Finance Corporation under the
Emergency Relief Act to be open to public inspection, was
made known in a statement issued by Mr. Trimble on
Aug. 18.
Pointing out that the publicity provision got the relief
bill into a snarl that threatened to prevent adjournment of
Congress in July, Associated Press advices from Washington
on Aug. 17 went on to say:
At the insistence of Speaker Garner and Representative Rainey, the
measure included instructions that monthly reports of loans should be
transmitted to the Clerk of the House and the Secretary of the Senate.
President Hoover summoned leaders of both parties to the White House to
ask that the publicity phase be omitted. A statement from the Executive
Mansion explained the President favored "fullest publicity to all Government activities" but that the then directors of the relief corporation "advised
the President of the danger that would result to the credit structure if this
(publicity proviso) were insisted upon."
"The responsibility in the last analysis for whatever might happen
must necessarily rest upon Congress," the statement said.
Mr. Garner renewed his fight for the provision. Mr. Rainey said it
"must be included or there will be no relief bill." The completed law
contained the phraseology, in outline at least, demanded by Mr. Garner.
In indicating on July 17 his intention to sign the relief
bill, President Hoover issued a statement in which he said
in part:
"The possible destructive effect upon credit institutions by the so-called
publicity clause has been neutralized by the declaration of Senate leaders
of all patties that this provision is not to be retroactive and that the required
monthly reports of future transactions are of confidential nature and must
be held so by the Clerks of the Senate and House of Representatives unless
otherwise ordered by the Congress when in session."
In deciding that the law is mandatory so far as opening
the record of loans to the public is concerned, the Associated
Press from Washington, on Aug. 17 said:
Mr. Trimble feels, as do Speaker Garner and Representative Rainey,
Democratic leader, that he has no choice. He disagrees that further
Congressional action is necessary.
In his statement made available Aug. 18, Mr. Trimble
states:
It appears from the explanatory statements made by the Committee
members in charge of the bill in course of passage that it was the intent
and purpose of Congress that the reports submitted by the Reconstruction
Finance Corporation under Section 201 (b) are to be made public.
In the "United States Daily" of Aug. 19 it was stated that
Mr. Trimble on Aug. 18, declared orally, that the first such
report, covering the period from July 21 to 31, would not be
opened to public inspection until Aug. 22, due to the fact
that the first report, according to the law, was not to be
disclosed until one month after the date of the signing of the
Relief Act. The Act was signed on July 21; since Aug. 21
will be Sunday, Mr. Trimble will hold it until the following
day, he said. The "Daily" continued:
Law Studied and Advice Sought.
Mr.Trimble's decision, he explained, came after he had given considerable
study to the publicity clause of the Relief Act in an effort to determine
whether it was intended that the reports should be made public, and after
he had obtained the advice of legal counsel and other able men who are well
Informed on the subject.
As he interpreted the law itself, especially with regard to the proceedings
by which the clause was placed in the statute, he said, it was his conclusion that it was his duty to make the reports public.
Before making his decision known, the Clerk of the House said:
"The Reconstruction Finance Corporation complied with the law and
filed the report with the Clerk of the House of Representatives. It devolved
upon me to determine whether the report should be make public now or
hold it until Congress convenes.
Question to Be Determined.
"The bone of contention is whether the reports should be made puolic
It ha's been discussed by able men on both sides of the two Houses as well
as both political parties.
"Since adjournment of the Congress, I have d'scussed the matter with
many able men,and they are divided on the question. So,in this quandary.
I called into consultation One of the best lawyers in the City of Washington
and requested'him to analyze and diagnose the question and render an
unbiased and unprejudiced decision."
Mr. Trimble then issued his statement, rendering his decision in the
matter, the full text of which follows:
The Reconstruction Finance Corporation has submitted its first monthly
report as required by Section 201 (b) of the emergency relief and construetion act of 1932, approved July 21 1932. (Public No. 302, 72d Cong.).
The question has been raised as to whether the monthly reports filed
with the Clerk of the House of Representatives while Congress is not in
session are open to public inspection.
Section (201 (b) of the act provides:
The Reconstruction Finance Corporation shall submit monthly to the
President and to the Senate and the House of Representatives (or the
Secretary of the Senate and the Clerk of the House of Representatives, if
these bodies are not in session) a report of its activities and expenditures
under this section and under the Reconstruction Finance Corporation
Act, together with a statement showing the names of the borrowers to
whom loans and advances were made and the amount and rate of interest
involved in each case.
Provision of Statute for F fling Reports.
The statute specifically provides for the filing of monthly reports with
the Clerk of the House of Representatives when Congress is not in session.
1266
Financial Chronicle
It does not appear, however,from a reading of the statute for what purpose
the reports are filed.
Throughout the consideration of this provision in the House of Representatives there was common agreement in the debates that the purpose of requiring the monthly reports was publicity. The sponsor of the bill stated that
the object of the amendment was to compel the filing of statements of loans
thereafter made under the original Reconstruction Finance Corporation
Act in order that the people may know what becomes of their money.
The members that spoke against the adoption of the amendment stated
they were opposed to the publication of the loans. No member expressed
an opinion that the monthly reports were required for any purpose other
than publication.
During the consideration of the final conference report one of the members
read to the House the letter of the board of directors of the Reconstruction
Finance Corporation which set forth the objections of the board to the
inclusion of the amendment in the law. The board construed the amendment to mean "that all loans made would become public property."
Publicity Provision as Regarded in Debate.
In the debate in the Senate on July 14 1932, the section was referred to
throughout as the publicity provision. In the debate on the second conference report on July 16 1932, a number of Senators held the same view.
One of the Senate conferees stated that he had refused to sign the conference report because he believed the item on publicity to be against the
public interest.
Another Senator stated:
Of course, the whole theory is that the reporting of the loans to the House
and to the Senate is so that they shall be made public. That is the object of
the legislation, and it simply means that all of the loans, no matter how
many are made,that fall due within the next year, must be made public.
A number of other Senators took the position that the only purpose of
the section was to furnish information to Congress, and that the reports
could not be made public until either the House or the Senate both had
designated that they should be.
It is well settled that in the interpretation and construction of a statute
the primary rule is to ascertain and give effect to the intention of the
Legislature, and that where the intent does not clearly appear from the
wording of the statute itself resort is to be made to the committee reports
and statements made by the committee member in charge of the bill in
course of passage. It has been held, however, that debates in Congress
expressive of the Views of the individual members may not be resorted to
in ascertaining the intent.
Supreme Court Rulings in Proceedings Are Cited.
In the case of Rodgers vs. United States (185 U. S.- 83) the Supreme
Court stated:
The primary rule of statutory construction is, of course, to give effect
to the intention of the Legislature. Whenever that is apparent it dominates
and interprets the language used. But when the intent is a debatable
question, and there is nothing on the face of the statute which clearly
indicates such intent, there are certain minor and subsidiary rules by which
courts are guided in determining the true construction.
In the case of United States vs. St. Paul. M. & M. R. Co. (247 U. S.
310) the court stated:
It is not our purpose to relax the rule that debates in Congress are not
appropriate or even reliable guides to the meaning of the language of an
enactment. (United States v. Trans-Missouri Freight Asso., 166 U.S. 290.)
But the reports of a committee, including the bill as introduced, changes
made in the frame of the Bill in the course of its passage, and statements
made by the committee chairman in charge of it stand upon a different
footing, and may be resorted to under proper qualifications.
Method of Determining Meaning of Statute.
Again, in the case of Duplex Printing Press Co. vs. Deering (254 U. S.
443), the court stated the rule to be followed in ascertaining the meaning
and purpose of the lawmaking body where the statute does not clearly
indicate the intent. The court said:
By repeated decisions of this Court it has come to be well-established
that the debates in Congress expressive of the views and motives of individual members are not a safe guide, and hence may not be resorted to
in ascertaining the meaning and purpose of the law-making body. (Aldridge v. Williams, 3 How, 9, 24; United States v. Union P. R. Co. 91
U. S. 72. 79; United States v. Trans-Missouri Freight Asso., 166 U. S.
290, 318.)
But reports of committees of House or Senate stand upon a more solid
footing, and may be regarded as an exposition of the legislative intent in a
case where otherwise the meaning of the statute -is obscure. (Binns v.
United States, 194 U. S. 486, 495). Apd this has been extended to include
explanatory statements in the nature of a supplemental report made by
the committee member in charge of a Bill in course of passage. (Ibid.;
Penn. Railroad Co. v. International Coal Min. Co. 230 U. S. 184, 198;
United States v. Coca-Cola Co., 241 U. S. 265, 281: United States v. St.
Paul, M.& M. Co., 247 U. S. 310, 318).
As the purpose of requiring monthly reports to be filed with the Clerk
of the House of Representatives while Congress is not in session, does not
appear from the wording of the Act, recourse must, therefore, be had to the
proceedings in Congress under the rule as stated by the Supreme Court.
On July 13 1932, H.R.12946 was introduced in the House by Representative Rainey, of Illinois, and referred to the Ways and Means Committee.
On the same day this bill was reported back to the House from the Ways
and Means Committee by Mr. Rainey. As reported to the House, Section
201 (b) required a report of the corporation's activities only under Section
201.
When the bill was under consideration by the House, Mr. Rainey, the
committee member in charge of the bill, offered a committee amendment
providing that the report should also cover the corporation's activities under
the Reconstruction Finance Corporation Act.
Purpose of Amendment Stated by Mr. Rainey.
Mr. Rainey stated to the House the purpose of the amendment as follows:
Mr. Chairman, it will hardly be necessary for me to take five minutes
to explain this amendment. It affects loans hereafter to be made.
The text of the bill requires an accounting, a statement only as to loans
made under this Act. The object of the amendment is to compel the filing
of an account or statement of loans hereafter made under the original
Reconstruction Finance Corporation Act in order that the people of the
United States who may possibly sustain losses at some time in the future on
account ofthe operation of this Act may know what becomes of their money.
The charge is being made throughout the country that $80,000,000 of
this money has been loaned to the bank of a former member of the board of
directors of the Reconstruction Finance Corporation. As a matter of fact,
my information is that the amount was only $10,000,000, although more
than that could have been obtained by his bank if it needed it. Now,if this
statement were made it would relieve this particular bank of the charge of
having obtained on account ofthe influence ofits President thislarge amount
of money.
It is contended as to future loans, made to small banks throughout the
country, that if through information filed here with the Clerk of the House
of Representatives it becomes known that a small bank has borrowed $100.000 it might have the effect of making a run on that bank. I do not agree
with this statement at all.
It will have the effect of showing that the bank is solvent and can borrow
because banks are compelled to borrow on adequate security under this
Act, and under the old Act. This amendment simply broadens the accounting requirements in order that the people may be fully advised as to what
is being done with their money—the use that is made of it.
Aug. 20 1932
Mr. Parsons: Will the gentleman yield?
Mr. Rainey: I yield.
Mr. Parsons: If future loans are to be made public, why should not the
same requirement apply to loans that have already been made?
Mr. Rainey: Maybe it should, but the amendment I am requested to
present by the committee only covers loans made in the future.
After debate the amendment was adopted, and the bill as amended was
passed by the House.
On the same day the House subsituted the provisions of H. It. 12946 as
an amendment to Senate amendment No. 1 to H. R. 9642, and requested
a conference with the Senate, which was granted.
On July 14 1932. the conferees reported to both Houses that they were
unable to agree. The House then instructed its conferees to insist upon the
House amendment. The Senate agreed to the conference report and
returned the bill to conference without instructions.
Agreement Reached by Conferees.
On July 15 1932 the conferees reached an agreement. The House conferees filed a statement with their report. That part of the statement
covering the agreement reached in conference under Section 201 (b) is as
follows:
"The House amendment requires a monthly report of the activities and
expenditures of the Reconstruction Finance Corporation Act and a statement showing the names of the borrowers to whom loans and advances are
made under that Act. There was no such provision in the Senate amendment. The bill as agreed to in conference retains the House provision."
In presenting the report to the House Mr. Rainey made the following
statement:
Mr. Speaker: The statement is so complete that I do not desire at this
time to make any extended observations, except to say to the Members of
the House that on the subject that seems now to be important to the House,
the publicity provision with reference to loans, the Senate yielded and the
House provision remains in the bill.
Mr. Holmes: Will the gentleman yield?
Mr. Rainey: I will.
Mr. Holmes: I would like to ask the gentleman if the publicity clause
in the bill is applicable to States and cities as well as all other loans?
Mr. Rainey: Yes.
After debate the conference report as submitted was approved by the
House by a vote of 286 to 48.
On July 16 1932, the conference report was submitted to the Senate by
Senator Norbeck, Chairman of the Senate Committee on Banking and
Currency. Senator Norbeck made the following statement:
I move that the Senate agree to the report.
I will state that the Senate conferees yielded on everything. I have been
in numerous conferences lately with the House, and we have always yielded.
We did so in this case. We did not merely yield; we surrendered.
The question at issue, of course, was the question whether the borrowing
banks should have their names published. The Senate. by decisive vote,
had decided that they should not be made public. The House had the
opposite view: but they were so determined in regard to the matter that we
saw no hope of agreement, and we yielded.
It appears from the explanatory statements made by the committee
members in charge of the bill in course of passage that it was the intent
and Purpose of Congress that the reports submitted by the Reconstruction
Finance Corporation under Section 201 (b) are to be made public. It is.
therefore, my duty to permit the reports filed with me to be open to public
inspection.
Besides President Hoover's statement of July 17 bearing
on the publicity feature of the bill, given in our issue of
July 23, page 543, we also published in the same issue,
page 544, a statement by Representative Rainey to the
effect that publicity of reports of loans under the bill would
be mandatory. The text of the Emergency Relief Act likewise appeared in our July 23 issue, page 538.
President Hoover Acts as Decision is Announced to
Make Public, Loans by Reconstruction Finance
Corporation—President Seeks Means to Avert
Serious Effect.
Noting that the record of loans made by the Reconstruction Finance Corporation to banks, in common with
other borrowers, under the Emergency Relief Act, is to be
thrown open to publication beginning next week, under a
decision by South Trimble, Clerk of the House of Representatives, the Washington correspondent of the New York
"Journal of Commerce" on Aug. 18, went on to say:
Immediately after the decision was announced, the President summoned
Chairman Atlee Pomerene to the White House to consider possible effects
of the publicity to be given loans of the Reconstruction Finance Corporation. The President's concern over the development was apparent but no
indication was given as to the course he will take in combating it.
Against Hoover Wishes.
Initial publication of the details of emergency relief loans will cover the
period July 21 to 31, inclusive, under a report made by the corporation to
the House Clerk. Subsequent reports will cover full months. This is in
utter disregard of the wishes of President Hoover and the directorate of
the Corporation that information as to bank loans be witheld from the
public.
The chief objection to the publicity feature of the relief laws was that if
a small bank was thus advertised as a borrower from the Government
agency, it might precipitate a run on the institution. With this viewpoint,
House Democratic leaders were not in accord, although some of them, at
least, had to be dissuaded from continuing their objection heretofore
voiced against publicity for banking transactions of this character.
Mr. Trimble, in announcing his decision to-day, said he had followed the
legal advice of his lawyer-son, South Trimble Jr., in whom, he said, he
had "explicit confidence as to integrity and ability." He explained further
that this question was discussed by able men in both branches of Congress,
about equally divided in opinion. Since Congress adjourned, he added, he
discussed the matter with many lawyers and others who were similarly
divided for and against publication. In his quandary,he referred the matter
to his son, who prepared a brief upon which the senior Trimble rendered
his decision.
Section 201 (b) of the act provides:
The Reconstruction Finance Corporation shall submit monthly to the
President and to the Senate and the House of Representatives (or the
Secretary of the Senate and the Clerk of the House of Representatives, if
these bodies are not in session), a report of its activities and expenditures
under this section and under the Reconstruction Finance Corporation Act,
together with a statement showing the names of the borrowers to whom
loans and advances were made and the amount and rate of interest involved
in each case.
Volume 135
Financial Chronicle
Purpose Not Given.
The statute specifically provides for the filing of monthly reports with the
Clerk of the House of Representatives when Congress Is not in session. It
does not appear, however, from a reading of the statute for what purpose
the reports are filed.
Throughout the consideration of this provision in the House of Representatives there was common agreement in the debates that the purpose of
requiring the monthly reports was publicity. The sponsor of the bill
stated that the object of the amendment was to compel the filing of statements of loans thereafter made under the original Reconstruction Finance
Corporation Act in order that the people may know what becomes of their
money.
The members that spoke against the adoption of the amendment stated
they were opposed to the publication of the loans. No member expressed
an opinion that the monthly reports were required for any purpose other
than publication. During the consideration of the final conference report
one of the members read to the House the letter of the board of directors
of the Reconstruction Finance Corporation, which set forth the objections
of the board to the inclusion of the amendment in the law. The board
construed the amendment to mean "that all loans made would become
public property."
In the debate in the Senate the section was referred to throughout as the
publicity provision. One of the Senate conferees stated that he had refused
to sign the conference report because he believed the item of publicity to
be against the public interest.
Sought Contributions Check.
Speaker Garner, who sponsored the publicity provision, told newspapermen to-day that he had not discussed the decision with Mr. Trimble.
He declared that "it is the clerk's responsibility to make his own decision."
"As a legislator. I make laws," he added. "I don't execute them. That
is the duty of the executive department. There is a good deal
more in
executing laws than in making them. What we Democrats are complaining about is how the laws are being executed."
The gossip on the street in Washington is that some of the Democratic
leaders were motivated in supporting the inclusion of the publicity provision
by a desire to discourage the making by the borrowers of contributions to
the Republican war chest. The inference was voiced also that it would be
possible to match the published list of borrowers with the reports that must
be made to Congress by political parties and candidates of financial aid
received by them for the prosecution of the campaign.
The result, of course, would equally affect the Democratic fund raising
efforts, but the Democrats want effectively to squelch early in the game
any possible expressions of gratitude toward the Republicans for the loans
made through the Reconstruction Finance Corporation.
Closed
Banks Authorized by Washington State
Court to Pledge Assets for Loan From
Reconstruction Finance Corporation.
The following from Olympia (Wash.) Aug. 16 is from the
"United States Daily":
Supreme
The Washington State Supreme Court handed down, Aug. 15, a five to
four opinion upholding the Chelan County Court in allowing the State
Supervisor of Banking to pledge the assets of insolvent State banks for s
Joan from the Reconstruction Finance Corporation, the proceeds of the
loan to be used to pay the claims of preferred creditors and dividends to
depositors and general creditors.
The minority opinion holds that the courts have no power to authorize
the Supervisor to borrow money for any purpose other than to preserve
property from destruction or continue business.
The majority opinion was written by Steinert. .1.. concurred in by
Holcomb and Herman, JJ., with Tolman and Beals, JJ., concurring in the
result. Millard, J., wrote the dissenting opinion, in which Mitchell, Main
and Parker, JJ., concurred.
Directors of Reconstruction Finance Corporation
Name Engineers' Advisory Board to Assist in Passing on Self-Liquidating Construction Projects.
The appointment of an Engineers' Advisory Board, consisting of five members was announced on Aug. 11 by the
Reconstruction Finance Corporation, which stated that the
Board had been named to assist in passing on self-liquidating
construction projects for which the Corporation is asked to
make loans. Under the Emergency Relief and Reconstruction Act advances may be made by the Corporation for selfliquidating projects from a fund of $1,500,000,000. Dr.
Charles David Marx, of Stanford University, will be Chairman of the Engineers' Advisory Board, serving with him
are Major-General Lytle Brown, Chief of Engineers, War
Department; John F. Coleman of Louisiana, John Lyle
Harrington of Missouri and John Herbert Gregory of Maryland.
In its announcement, the Reconstruction Finance Corporation said:
Appointment of an Engineers' Advisory Board to assist in passing on all
self-liquidating construction projects, for which the Reconstruction Finance
Corporation is requested to make loans, is announced by the directors of
the Corporation. The Board will consist of five members to be located
at headquarters of the Corporation in Washington.
Chairman of the Board is to ho Dr. Charles David Marx of California.
Other members of the Board are John F. Coleman, New Orleans; John
Lyle Harrington, Kansas City; John Herbert Gregory, Baltimore, and
Major-General Lytle Brown, Chief of Engineers, U. S. A.
The Engineers' Advisory Board was chosen with the co-operation of the
American Engineering Council, directors of the Reconstruction Finance
Corporation stated. Membership of the Board was chosen to give the
different sections of the country representation by engineers who occupy
a distinguished position in the various branches of their profession.
Special emphasis was made by directors of the Reconstruction Finance
Corporation on the varied experience and training in different fields of
engineering activity of the new Engineers' Advisory Board. The combined
experience of the new Advisory Board includes training in substantially
every field of engineering activity.
The Board held its first meeting Aug. 11 to organize its procedure for,
handling the large number of applications to aid in financing self-liquidating
1267
projects that have been received by the Reconstruction Finance Corporation
since enactment of the Emergency Relief and Construction Act of 1932.
Acting in an expert advisory capacity, the Engineers' Advisory Board
will submit to the Board of Directors of the Finance Corporation its recommendations on the merits of all the self-liquidating projects that are proposed.
Dr. Marx, a native of Toledo. Ohio, is Professor Emeritus of Civil Engineering of Stanford University, and has been associated with Stanford
University since 1891. Prior to that time, he served on the faculty of
Cornell University and of the University of Wisconsin. He received his
education from Karksruhe Gymnasium Germany, and Cornell University,
and is the recipient of the degrees of Doctor of Engineering from Karlsruhe
Polytechnic and LL.D, from the University of California.
Pennsylvania and Baltimore & Ohio Railroads to Ask
Maintenance Loans From Reconstruction Finance Corporation.
Requests for two railroad loans aggregating $5,000,000
for maintenance and repair work which will increase employment on the carriers and in related industries will be
laid formally before the Reconstruction Finance Corporation soon, according to oral statements Aug. 16 at the
offices of the Corporation.
The two applications are the first results of the plan to
President Hoover and the Corporation to expand employment and industrial activity by Corporation loans which
would enable roads to hire workers and purchase supplies,
according to the statements.
The two applications received thus far are one from the
Baltimore & Ohio asking for $3,000,000, and one from the
Pennsylvania RR, asking for $2,000,000.
A. statement issued from the offices of the Pennsylvania
Aug. 13 follows:
General W.W.AtterburY.President of the Pennsylvania BR.,announced
that the directors had authorized the making of an application to the
Reconstruction Finance Corporation for a work loan of $2,000,000, to
construct 1.500 all-steel box cars of 100,000 pounds capacity. The purpose
of this loan is to increase employment and stimulate business.
The construction of these cars would give employment at the Pennsylvania RR.shops to about 700 men for almost a half year, which will cover
this fall and winter. In addition, it will give about an equal amount of
employment to other outside shops and industries to furnish approximately
19.000 tons of steel for the new cars and to manufacture the various
specialties fully to equip the cars. The company will promptly take up
the subject with the Reconstruction Finance Corporation so that, if the
loan can be obtained on satisfactory terms, work may begin as soonlas
possible.
No Joint Action by Railroads on Maintenance Loans
from Reconstruction Finance Corporation Each
Railway to Decide Its Own Maintenance Financing.
Railway executives meeting in New York, Aug. 10, decided
to leave to the individual roads the matter of borrowing
from the Reconstruction Finance Corporation for maintenance in order to expand employment. This decision
was reached first by the Advisory Committee of the Association of Railway Executives and later by the Association itself.
This action places the roads which are in need of money for
upkeep in a position to do their own negotiating with the
Finance Corporation and leaves the strong carriers which
have no deferred maintenance, in a position to continue their
relatively good earnings without doing unnecessary work.
The decision of the Advisory Committee to leave up to
the member roads all action on the Government's offer of
Reconstruction Finance Corporation loans for maintenance
work was embodied in a statement authorized by R. H.
Aishton, Chairman of the Executive Committee of the
Association of Railway Executives. The statement follows:
The Advisory Committee of the Association of Railway Executives at a
meeting to-day (Aug. 10) discussed the proposition which had been made
that as a means of increasing employment during the fall and winter months
the railroads consider borrowing from the Reconstruction Finance Corporation money for the purpose of retiring equipment, making repairs, and perhaps for the purchase of new equipment. Several interviews have been
held by individual railroad executives with officials in Washington on this
subject and tentative propositions have been made under which it might be
possible for the railroads to act in this respect.
The Advisory Committee, after full consideration, realizing that the problem was one for decision by each road but that the critical conditions of
unemployment were such that grave consideration should be given to the
latter, referred the matter to the meeting of member roads held in the
afternoon, without recommendation but with a statement that it was so
referred in order that each road might give it full consideration in view of
all the circumstances and conditions, in order to determine whether or not
such individual roads could make use of funds which might be available
through the Reconstruction Finance Corp.
No official or collective action was taken at the meeting, and the matter
Is lefefor the consideration of each member road.
Among those present at the meeting of railroad executives
were:
R.H. Aishton, Chairman of the Committee; W.W. Atterbury„ President
of Pennsylvania RR.; Elisha Lee, Vice-President of Pennsylvania RR.;
C. B. Heiserman, General Counsel for the Pennsylvania; W. R. Cole,
President of Louisville & Nashville RR.; L. A. Downs,President of Illinois
Central; J. J. Pelley. President of the New Haven; Daniel Willard, President
of the Baltimore & Ohio; R. D. Starbuck, Executive Vice-President of the
New York Central; Charles C. Paulding. Vice-President of the New York
Central; A. J. County, Vice-President of the Pennsylvania; L. W.Baldwi
1268
Financial Chronicle
Aug. 20 1932
President of the Missouri Pacific; C. E. Denney, President of the Erie;
M.W. Clement, Vice-President in charge of operations of the Pennsylvania;
Hale Holden, Chairman of the Southern Pacific.
mission, bringing the total loans approved to date to approximately $265,636,199 to 62 roads. The loans now
approved are as follows:
Policies Assigned to Reconstruction Finance Corporation—Handling of Fire Insurance Protecting
Mortgages Pledged by Banks for Loans.
When the Reconstruction Finance Corporation began
operations, it was evident, said the New York "Journ.41 of
Commerce" of Aug. 15, that a tremendous amount of
detail would be involved in handling the fire insurance
protecting the thousands of mortgages, which would be
assigned by banks, mortgage companies and others to the
Corporation as security for loans unless some simplified
procedure could be worked out. J. H. Doyle, General
Counsel of the National Board of Fire Underwriters, conferred with representatives of the Finance Corporation and
plans were agreed upon which have since been approved by
the Corporation, reports the "Journal of Commerce" from
which the following is also taken:
Amount
Amount
Name of Company—
Approved.
Term. Applied For.
Boston & Maine RR
$10,000,000
$10,000,000
2 years
Missouri & North Arkansas Ry
400,000
1 year
a575,000
Tennessee Central Ry
250,000
147,700
3 years
a Original amount sought was $1,250,000, but this amount was subsequently reduced.
These plans were announced Saturday lAug. 131 by Mr. Doyle in the
following bulletin sent to fire insurance companies:
"The Reconstruction Finance Corporation, organized under the Act
approved Jan. 22 1932, is authorized and empowered to make loans to
banks, savings banks, trust companies, building and loan associations,
Insurance companies, &c., to aid in financing agriculture, commerce and
Industry; all loans made to be fully and adequately secured. In making these
loans the Reconstruction Finance Corporation will require that the borrower shall assign to it, as a pledge for the loan, such securities as the
borrower may have, including mortgages, property liens, &c.
"Since practically all such mortgages, whether real or personal, are
protected as to the borrower's interest by appropriate insurance contracts, it
Is probable that the Reconstruction Finance Corporation will require such
Interest in policies to be assigned to it, to comply with that provision of the
law requiring loans to be fully and adequately secured. On a loan made to
a bank, building and loan association, mortgage loan company, &c., these
assignments may run into hundreds as security to the Reconstruction
Finance Corporation for a loan made to such borrower.
Procedure Agreed Upon.
"It is not the purpose, nor desire, of the Reconstruction Finance Corporation at this time to concern itself generally with the adjustment of claims
against insurance companies that may arise by reason of contracts so
assigned. It is the desire of the Reconstruction Corporation that the
adjustment and payment of losses, under such contracts, shall be in the
usual manner, between the company and the named assured and the named
mortgagee, but there may be times where there is a limited number of
policies covering a congestion of values, or where the loss is a result of a
conflagration or other catastrophe perils, that the Reconstruction Finance
Corporation will wish these payments made directly to it, as assignee of
the mortgagee. In all such cases the Reconstruction Finance Corporation
will no Afy the company in apt time of its interest, as assignee of the mortgagee, and upon receipt of such notice, all right, title and interest of the
mortgagee having been assigned to the Reconstruction Finance Corporation
will be protected by the company.
"We suggest that companies file with the Reconstruction Finance Corporation, Washington, D. C., an agreement in the form attached, under
which they will agree that the assignment of the mortgagee interest shall
not operate to impair or invalidate the contract. This matter should
have prompt attention."
Form of Agreement.
The form of agreement mentioned above is as follows:
"Agreement in Respect of Policies Assigned to Protect the Interests of
the Reconstruction Finance Corporation.
"Whereas, the Reconstruction Finance Corporation may, in its discretion, require policies of insurance to be assigned to it as a pledge as security
for loans made by the Corporation to banks, savings banks, trust companies, building and loan associations, &c., which may from time to time
involve policies issued by this company, it is hereby agreed:
"That this company waives any requirement of notification by the
Reconstruction Finance Corporation of its interest in any policy issued by
this company, and the interest of the Reconstruction Finance Corporation
shall not invalidate any such policy;
"That in the event the Reconstruction Finance Corporation notifies this
company in writing, or by telegraph confirmed by writing, at its home
office, of an interest In a particular policy or contract, then this company
shall, after the time of receipt of such notice, recognize such interest, and
loss, if any due under the terms and conditions of the contract, shall be
payable to the Reconstruction Finance Corporation as interest may appear;
"Provided, that in the absence of written notice to this company at its
home office setting forth the Interest of the Reconstruction Finance Corporation in any policy, this company shall not be obligated to recognize the
Interest of the Reconstruction Finance Corporation.
"This agreement may be cancelled by this company upon giving 60 days'
written notice to the Reconstruction Finance Corporation of its intention
so to do.
1932.
day of
this
"This agreement dated at
INSURANCE CO.
By
Official Title.
"Please mail any such notice to this company at its home office, in the
."
State of
City of
Loans to Three Additional Railroads Aggregating
$10,547,000 Approved—Boston & Maine to Receive
$10,000,000—Loan of $3,750,000 to Waco Beaumont
Trinity & Sabine Ry. Denied—Applications Filed
Include Additional Loan of $31,625,000 by Baltimore & Ohio and $5,)00,000 by Chicago 8c North
Western.
Loans aggregating $10,547,000 to three additional railroads
have been approved this week from the Reconstruction
Finance Corporation by the Inter-State Commerce Coin-
The Commission denied the application of the Waco
Beaumont Trinity & Sabine Ry. for a loan of $3,750,000 on
the ground that "the prospective earning power of the
applicant and the security offered as a pledge for the proposed loan are not such as to afford reasonable assurance
of its ability to repay the loan." Commissioners McManamy,
Lewis and Mahaffie dissented from the majority report,
McManamy holding that the projected extension of the
applicant's line was within the purposes of the Reconstruction
Finance Corporation Act. The majority report, however,
said the adequacy of the security offered is dependent very
largely upon the financial success of the new enterprise
which is extremely uncertain. Concerning the proposal
that the American Creosote Works should guarantee the
loan the Commission states: "Regardless of the standing
of the American Creosote Works, security for the loan must
be found in the railroad property itself and its earning
capacity."
Loans aggregating $38,182,725 have been applied for by
six additional roads, bringing the total amount sought by
the railroads to date to approximately $444,933,600. The
Baltimore & Ohio asks the Commission to approve a further
loan of $31,625,000 to be used, to pay off in cash one-half
of its maturing 20-year43A% convertible gold bond amounting to $63,250,000 on March 1 1933, and the Chicago &
North Western Ry. asks the approval of a further loan of
$5,000,000 to pay off one-half of its maturing bank loans.
Details regarding the additional loans now approved
follow:
Boston & Maine RR.
On April 23 1932 the Boston & Maine RR, filed an application for a
loan under the provisions of Section 5 of the Reconstruction Finance
Corporation Act.
The Application.
The applicant requests a loan of $10,000,000 for a term of two years
for financing the following Items:
Bonds matured and paid, funds for which were borrowed temporarily
from banks:
Fitchburg RR. Co.4 %,due Jan. 1 1932
$9,000
Boston & Maine RR.5%,due March 1 1932_ _ _ _ 2,400,000
Boston & Lowell RR.Corp.4%,due April 1 1932
154.000
$2,563,000
Current vouchers overdue (as of April 1932):
T. Stuart & Son, contractors
$149,424
Lathrop & Shea, contractors
41,218
Locomotive fuel_
249,065
Railroad and terminal companies,
138,925
Materials and supplies
134,039
Light, steam, telephones, &c
70,774
Steel rail
447,987
General Railway Signal Co.
300,000
Union Switch & Signal Co
283,728
1,815,160
Equipment trust installment due April 21 1932
114,000
Equipment trust installments:
Due May 22 1932
Due July 22 1932
Due Jan. 15 1933
$4,492,166
$141,000
121,000
454,200
Estimated capital expenditures included in 1932
Improvement budget
Estimated amounts payable to Railroad Credit
Corporation for remainder of year 1932
Boston & Maine general mortgage 6% bonds,
series M, maturing Jan. 1 1933
3,991,000
Fitchburg RR.45 ., bonds
nds maturing Jan. 1 1933
400,000
Boston & Lowell R. Corp. ,Ii% bonds, maturing Feb. 1 19331,000,000
Amounts due signal companies under contracts
completed prior to Jan. 1 1932:
General Railway Signal Co., due Jan. 1 1933
301,833
Union Switch & Signal Co., due Jan. 1 1933
222,403
716,200
1,651,013
811,000
5,391,000
524,238
$13,585,611
The applicant represents that additional funds cannot be borrowed
from the banks at this time, or at least until positive assurance can be
given that its maturities of January and February 1933.
aggregating
$5,391,000, will be paid. It has loans from banks aggregating $5,500,000,
a large part of which was borrowed with a definite understanding
that
It would apply to the Reconstruction Finance Corporation for a loan,
and that the proceeds of such loan, if secured, would be used to repay
the bank loans at their maturities. If a loan be granted upon this application, the applicant proposes to pay a part of the bank loans and to
request the banks to continue to carry the remainder. It is our view
that the question of the ability of the applicant to obtain needed funds
upon reasonable terms through banking channels or from the general
public Is one committed by Section 5 of the Reconstruction Finance Corporation Act primarily to the Reconstruction Finance Corporation.
The applicant states that no agreement has been or will be made by It
to pay any person, association, firm or corporation, either directly or
Indirectly, any commission or fee for the loan applied for, and that no
such payments have been or will be made by it.
The Boston & Maine is a party to the "Marshalling and Distributing
Plan, 1931." of the Railroad Credit Corporation. On March 21 1932 tt
paid $63.749 to that Corporation, the amount due for January; on April
20 1932, $82,186, the amount due for February, and on May 19, $84.738
for the account of the month of March. For the 12 months of 1932 the
applicant estimated that $956.935 would accrue as payable by it under
Volume 135
Financial Chronicle
the plan. Business subsequent to the date of the estimate has been below
expectations, and actual accruals will probably fall somewhat short of the
estimate. The applicant has not applied for or received loans from the
Railroad Credit Corporation, and has no present plan to apply for such
loans.
The applicant states that no organization subsidiary to or affiliated
with it, and no organization of which it is a subsidiary, has applied for or
received loans from the Reconstruction Finance Corporation.
Necessities of the Applicant.
The applicant's cash balance on May 21 1932 was 32.736,902, of which
$2.448.185 represented available cash in banks, net demand deposits
after
deductions for fixed charges unpaid and voucher checks outstanding.
In addition, there was $160,000 of time deposits available in 30 days,
and $335,121 of short-term securities. The total of net demand
deposits,
in the amount stated, was subject to reduction to $2.000,000 in the course
of day to day payments; and at the latter figure represented a minimum
proper working balance under present difficult conditions for obtaining
funds through temporary borrowing. It represented an amount
equal
to about 10 days' ordinary payments. On Aug. 2 1932 demand
cash
had been reduced to $2,182,132. The ordinary increase in cash from
net income will not be sufficient to take care of imminent maturities.
The amounts required to be borrowed for payments due in
the immediate
future which cannot be met out of net income as at present indicated,
or
financed otherwise than through loans by the
Reconstruction Finance
Corporation, are stated by the apple ant, as of Aug. 3
1932. as follows:
Overdue vouchers
$1,283.203
One-half of bank loan maturing Aug. 29
1,000.000
One-half of bank loan maturing Oct. 26 1932
1932
500,000
One-half of bank loan maturing Oct. 28 1932
250.000
One-half of bank loan maturing Nov. 9 1932
500,000
One-half of bank loan maturing Nov. 25 1932
250.000
One-half of bank loan maturing Dec.
1932
250,000
Equipment trust installments due Jan.6
15 1933
454.200
Payments due signal companies Jan 1 1933
525,238
Boston & Maine general mortgage6%,Series N,
bonds maturing
Jan. 1 1933
3,991.000
Fitchburg RR.434% bonds maturing Jan.
1 1933
400.000
Boston & Lowell RR.Corp. 434% bonds maturing
Feb. 1 1933- 1,000.000
Total
$10.402,641
The total of the above stated items
exceeds the amount of the loan
requested by $402,641. The applicant expects,
however, to be in a position
to pay this amount from operating receipts, and also
other items, including
advances to the Railroad Credit Corporation
and a recent assessment
for back taxes not charged against the income of
the current year, by
taking into account depreciation accruals for the year
amounting to $1,700,000.
In addition to the overdue vouchers, items accrued to
operating expenses
and not then vouchered were $18,140 on June 30
1932. The summer,'
of overdue vouchers as of Aut. 3 1932 is as follows:
Various contractors
--$158,701
Locomotive fuel
192.943
Railroad and terminal companies
71.559
Materials and supplies
151,031
Light. steam, telephones, &c
17.379
General Railway Signal Co
100.000
Union Switch & Signal Co
143.603
Bethlehem Steel Co.(rail)
447.987
31,283,203
The applicant's present bank loans
are eight in number. The banks
furnishing the accommodation and
the terms and amounts of the several
loans are as follows:
First National Bank of Boston:
(a) Unsecured loan bearing interest
at4%,matured April 26,
extended for six months at
Present security
$1,200,000 Boston & Maine general
mortgage 5% bonds,
Series KK,due 1952
$1,000,000
(b) Unsecured loan bearing interest at 434
%, matured May 9.
extended for six months at 5%.
Present security $625,000.
Series KK
500,000
(c) Unsecured loan bearing interest at
5%,due Aug. 29
1,000,000
Second National Bank of Boston:
Unsecured loan bearing interest at 434%,
extended for six months at 6%. Present matured April 28,
security $625.000,
Series KK
500,000
State Street Trust Co. of Boston:
Unsecured loan bearing interest at 43,
1%, matured May 9.
extended for six months at 6%. Present
security $625,000.
Series KK
500,000
Shawmut National Bank of Boston:
(a) Unsecured loan bearing interest at 5%, matured
extended for six months at 5%. Present security May 25,
3625,000
Series KK
500,000
(b) Unsecured loan bearing interest at 5%, matured
extended for six months at 5%. Present security June 6,
$625,000.
Series KK..
500,000
ChaseNational Bank of New York:
Unsecured loan bearing interest at 5%, due Aug. 29
1,000,000
$5,500,000
Security.
As security for the loan of 310.000,000 applied for, the
applicant offers
such part as may be required of 33,125,000, principal
amount, of its first
or general mortgage 5% bonds, Series XL due
1952, authorized by us
March 18 1932, 310,000,000 of 6% bonds, Series LL, due
1962. under the
same mortgage, authorized by us July 8 1932, and not
leas than
of additional 6% bonds, also under the same mortgage'to be $7,500,000
later issued
pursuant to our authority under Section 20a of the Inter-S
tate Commerce
Act. Of the $7,500,000 of bonds last referred to,
$5,391,000 cannot
be used except to refund the outstanding bonds maturing in
that amount
on Jan. 1 and Feb. 1 1933. The remainder will represent
additions and
betterments for which tho applicant states its treasury
has not thus far
been reimbursed. The issue of Series KK bonds totals
$7.500,000, of
which $4,375.000 are pledged for the bank loans above
mentioned.
The applicant's first or general mortgage, Old Colony
Trust
S. Parkman Shaw, Jr., trustees, dated Dec. 1 1919, under which Co. and
the bonds
mentioned are secured, is an open first mortgage on the
applicant's railroad
system, including its interest as lessee in the principal
leasehold lines,
subject to the prior lien of two issues of divisional bonds
aggregating
31.530,000 and resting upon 119 miles of the system.
The 5% bonds under the first or general mortgage due 1967
sold on
Aug. 4 1932 for 64, the range for the year 1932 having been,from
43 to
There are only $3,991,000 of the 6% bonds at present outstanding, 78.
and
no recent sales of this issue have been noted to Aug. 4 1932.
The total long-term debt of the applicant actually outstanding
on Dec.
31 1931 was $130,274,883, of which $119,640,000 represented
mortgage
bonds. $6,208,800 equipment trust obligations and $4,426.083
miscellaneous obligations, mostly resting upon equipment. Bonds issued
under
the first mortgage comprised $107,480,000 of the total $119.640,000 of
mortgage bonds. In addition to securities actually outstanding, there
were $3,262,500 of mortgage bonds in sinking or other funds, and $169,000
of bonds and $303,000 of equipment obligations in the applicant's treasury,
The bonds offered as security for this loan are not included in the amounts
1269
mentioned. They were authorized and issued subsequent to Dec. 31
1931*
The total indebtedness authorized on Dec. 31 1931 was $155,777,869
.
As before stated, $2.563,000 of mortgage bonds have matured and been
paid since Dec. 31 1931.
As of June 30 1914 we made a final valuation of the properties owned
and the properties used, by the applicant, pursuant to Section 19a of the
Inter-State Commerce Act. We found the value for rate-making purposes of all property owned and used by the applicant in common-carrier
service to be $95,600,000, including $3,600,000 for working capital. We
also found the value for rate-making purposes of property used by the
applicant in common-carrier service, but not owned by it, to be $130.387,395
and property in common-carrier service owned by the applicant but not
used by it to be $60,000. The value of physical property ()Vinod by the
applicant, and used for non-carrier purposes, was found to be $1,862,540.
Since June 30 1914 and to and including Dec. 31 1931 the applicant has
acquired title to most of the property operated under lease on the earlier
date; has undertaken the operation of additional lines, discontinued operations of others, and has reported extensive additions and betterments to
both owned and leased lines. Working capital on Dec. 31 1931, consisting of cash and materials and supplies, was $6,944.148.
Including all the applicant's presently operated lines at the value placed
thereon as of June 30 1914, adding net additions and betterments at the
reported cost, and adjusting for working capital, the totals as of Dec. 31
1931 become $252,318,610 for carrier property owned and used, 3104,887
for carrier property owned but not used, and $31,203,897 for carrier property
used but not owned. Similarly, the total for non-carrier physical property
owned by the applicant becomes $5,507,643, and the total for non-carrier
physical property owned by the applicant's lessors $199,663. The investments of the applicant in securities of. and advances to, affiliated
companies totaled $4,235,716 as of Dec. 31 1931; and its investments in
other securities and advances $2,400,784.
Conclusions.
Upon consideration of the application and after Investigation thereof,
we conclude:
1. That a loan of not to exceed 310.000.000. for a period not exceeding
two years, for the specific purposes designated in the applicant's statement
of future requirements hereinbefore set forth, should be approved;
2. That advances upon the loan should be made as required to meet
the payments specified;
3. That the applicant should pledge with the Reconstruction Finance
Corporation, as collateral security for the loan. $2,000,000 principal
amount of its general mortgage 5%. Series KR, bonds, due 1952. $10.000,000 principal amount of its general mortgage 6%, Series LL, bonds,
due 1962. and $5,500,000 of additional 6% general mortgage bonds not
as yet issued or authorized by us;
4. That the applicant should agree to use the proceeds of the loan solely
for the purpose for which the loan is authorized;
5. That the applicant should agree to notify the Reconstruction Finance
Corporation and us, within 30 days from the making of each advance
upon the loan, of the disposition made of the proceeds thereof;
6. That the banks should extend the remaining one-half of their loans
to the applicant to maturity dates not earlier than the maturity date of
the loan herein conditionally approved; and
7. That the Reconstruction Finance Corporation will be adequately
secured under these conditions.
Missouri & North Arkansas Ry.
On March 1 1932 W. Stephenson submitted an application to the Re
construction Finance Corporation for a loan of $1,250.000. under the
provisions of Section 5 of the Reconstruction Finance Corporation Act.
On June 23 1932 the receiver amended the application by reducing the
amount of the loan requested to $575,000.
The Application.
The applicant requests a loan of 3575,000 for a term of one year, to
be used in meeting the following obligations:
Taxes levied by the States of Arkansas and Missouri for the years
1930 and 1931
350.235
Unpaid wages; due receiver's employees
85
0,4
1 5
6
Open accounts, due from receiver for materials, supplies and
miscellaneous
80,000
Interest on receiver's certificates due Feb. 1 1932
13.860
Bills due for cross ties and coal
149.489
Interest on receiver's certificates, due Aug. 1 1932
21.000
Redemption of 25% of present issue of receiver's certificates.
due Aug. 1 1932
175.000
Total
$575,000
The security offered consists of an equal principal amount of receiver's
certificates of indebtedness, to be issued under appropriate order of the
court having jurisdiction of the receivership proceeding.
Necessities of the Applicant.
The need for the loan is clearly evident. At the time of filing the application it was estimated that there would be available on April 1 1932
the sum of $2,000 to meet the above obligations, and the cash forecast
by months for the remainder of the current year, without allowance for
their payment, showed an estimated balance at the close of the year in
the amount of 36,675. This estimate gave effect to the emergency
increases in rates under our decisions in Fifteen Per Cent Case, 1931. 178
I.C.C. 539, 179 I.O.C. 215, and to reductions in wages. As the applicant
is a receiver no payments are made to and no loans can be obtained from
the Railroad Credit Corporation under its "Marshalling and Distributing
Plan, 1931." Effective in part on June 1. and fully on July 1 1932. the
applicant made a 23% reduction in salaries of all employees on a monthly
basis, and a reduction in forces, resulting together in an annual payroll
saving of $72,000. The price of track ties has been reduced from 5 to 8 cents
Per tie, indicating a saving of 37.000 per annum, and the cost of coal used
by the applicant has been reduced 20 cents per ton, which will result in a
further saving of $8,000, making a total saving in operating expenses
of 387,000.
Security.
The applicant offers as security for the loan an equal principal amount
of receiver's certificates of indebtedness, to constitute part of a total issue
of $1.100,000. all ratably secured by a first and paramount lien upon all
property, rights, privileges and franchises of the company.
Conclusions.
Upon consideration of the application and after investigation thereof,
we conclude:
1. That we should approve a loan to the applicant of not to exceed
$400.000, for a term not exceeding one year, by the Reconstruction Finance
Corporation, to be used in payment of obligations as follows:
Taxes levied by the States or Arkansas and Missouri
350.235
Unpaid wages due receiver's employees
85.416
Open accounts for materials and supplies. &c
80.000
Interest on receiver's certificates
34,860
Bills due for cross ties and coal
149,489
Total
$400,000
1270
Financial Chronicle
2. That the applicant should deposit with the Reconstruction Finance
loan,
Corporation, as collateral security for, or direct evidence of. the
8400,000 principal amount of receiver's certificates of indebtedness, duly
authorized by the court of jurisdiction in the receivership proceeding;
such securities to have a paramount first lien on the property of the Missouri
& North Arkansas Ry. Co.
to the
3. That the applicant should be required to report, in writing,
from the
Reconstruction Finance Corporation and to us, within 30 days
purpose
making of the loan, the expenditures of the proceeds thereof for the
for which it is authorized.
Commissioner Farrell dissenting:
I am unable to Join other members of the Commission in approving a
Arkansas Ry. Co.,
loan of $400.000 to the receiver of the Missouri & North
is based
because, in my opinion, the security upon which the approval
under
I. not adequate within the meaning of that term as used in the law
which we act in the premises.
Commissioner Lee dissenting:
conditions imI do not think that approval of this loan, even with the
The applicant
posed by the majority, Is justified by the facts in the case.
Section 210 of
akeady owes the United States $3,500,000 on a loan under
loan was in
the Transportation Act. As of July 1 1932 interest on this
$5,000,000
default in the amount of $1,613,000, making a total of over
the
prosperity
railroad
due the United States. During a period of greatest
interest on
earnings of the property have been insufficient to meet the
requirements.
this debt and of late they have failed even to cover payroll
representatives
Repeated inspections of the property by several of our
The terearnings.
have indicated little prospect of materially increased
which the
ritory is well served by highways and other carriers, against
conclusion is
applicant has been unable to compete successfully. The
investment in the
inescapable that the United States now has a greater
sale. Asfide
applicant's property than could be realized from any bona
three is
suming that the conditions of the majority's approval are met,
expectations
no satisfactory guarantee that applicant's present hopes and
loan
will come any nearer realization than those which induced the past
most the
or that this loan will amount to anything other than a gift or at
purchase of a railroad.
Commissioner Mahaffie dissents:
Chairman Porter and Commissioners Aitchison, Eastman
and Brainerd did not participate in the disposition of this
case.
Tennessee Central Ry.
On March 19 1932 the company submitted an application, and on July
Corporation
25 an amended application, to the Reconstruction Finance
for a loan under the provisions of Section 5 of the Reconstruction Finance
Corporation Act,
The Application.
The applicant requests a loan of $250,000 for a period of not exceeding
are pro
three years. The purposes for which the proceeds of the loan
posed to be used are stated in the application as follows:
(a) To pay installment of principal and interest on equipment trust
certificates, Series C, due Aug. 1 1932:
$45.000
Principal
11,250
Interest_
- 56,250
b) To pay overdue vouchers, covering claims, rentals and ma- 91,450
terial and supplies
(c) To pay semi-annual interest, due Oct. 1 1932, on applicant's 102,300
first mortgage 6% coupon bonds, Series.A and Series B
$250,000
Total
Distributing
The applicant has become a party to the "Marshalling and
Railroad
Plan. 1931" of the Railroad Credit Corporation. Sums paid to the
revenues
Credit Corporation for the first five months of 1932, representing
by
permitted
received by the applicant from Increases in freight rates
the above decisions, amount to $23,614.12. The applicant estimates
the
that the amount which will be similarly received and payable during
and
last seven months of the year will approximate $61,316 as maximum
$66.887 minimum.
The applicant received earlier this year a loan of $100,000 from the
to pay
Railroad Credit Corporation, the proceeds of which were used
mortgage
semi-annual interest, due April 1 1932, on the applicant's first
requested herein
6% bonds, series A and B. The amount of $102,300
by the applicant to pay like interest due on Oct. 1 1932 also constitutes
Railroad Credit
the
by
a proper basis for a further loan to the applicant
present
Corporation. We will, therefore, consider only the applicant's
necessities.
necessary
The applicant represents that it is unable to secure the funds
banking
to meet its aforesaid obligations upon reasonable terms through
question
this
that
our
view
is
It
public.
channels or from the general
Corporation Act
is committed by Section 5 of the Reconstruction Finance
primarily to the Corporation.
Section 210
under
A loan was made to the applicant by the United States
of the Transportation Act, 1920, and has been repaid in full.
Necessities of the Applicant.
are
Despite important economies In operation, the applicant's revenues
trust
Insufficient to enable It to pay principal and interest on equipment
certificates, Series C. due Aug. 1 1932. There are also now overdue
vouchers which have been approved and are awaiting payment. These
'vouchers, aggregating $146,315.89, are listed in an itemized statement
for
which has been filed with us. In general, the amounts needed are
ballast, fuel, coal, cross ties, and other material and supplies, car repairs,
facility
bills from foreign roads, claims for overcharge, transit, &c., joint
expenses and rental and other similar current obligations. Of this total
where$91,450
of
sum
of $146,315.89 the applicant needs immediately the
with to meet the most pressing of these debts.
Security.
As security for a loan of $147.700, the applicant offers to pledge $120,000
which
of its first mortgage 6% bonds, series A, of 1947, authority to issue
Inter-State
is being concurrently requested of us under Section 20a of the
Nashville
the
Commerce Act; a non-interest bearing demand note of
Teraina' Co. to the applicant for $398,927.21 to be secured by $600,000
bonds
principal amount of the terminal company's first refunding 5% gold
Co. to the
of 1949, and a demand note of the Tennessee Central Station
of
deed
applicant in the amount of $100.000 to be secured by a first lien
trust upon all the property of the station company.
bonds,
The mortgage under which the applicant's first mortgage 6%
railseries A, are issued constitutes a first lien upon all of the applicant's
security for any
road properties. These bonds, which are offered as
of
terms
the
under
loan we may approve, are permitted to be drawn down
the applicant out
the mortgage in reimbursement for the expenditure of
required amount for
of income or other moneys in the treasury of the
Aug. 20 1932
required for bonds
additions and betterments in excess of the amount
previously issued.
pledged are listed
be
to
proposed
The applicants first mortgage bonds
was 834
on the New York Stock Exchange. The price range for 1931
do not appear
high and 30 low, and for 1932, 38 high and 1110w. There
month
that
During
to have been any sales since May of the current year.
.
the range was 25% high and 11 low, with infrequent transactions
Conclusions.
n thereof,
Upon consideration of the application and after investigatio
we conclude:
$147.700 to the
1. That we should approve a loan of not exceeding
Corporation, for
Tennessee Central Ry. by the Reconstruction Finance
to be used for
thereof,
a term not to exceed three years from the date
and
the payment of principal and interest on equipment trust certificates
of overdue vouchers, as above set forth.
ion Finance
2. That the applicant should pledge with the Reconstruct
following described
Corporation, as collateral security for the loan, the
securities:
coupon bonds.
(a) $120.000 principal amount of its first mortgage 6%
Series A of 1947;
Terminal Co.
(b) A non-interest bearing demand note of the Nashville
Reconstruction
to the applicant and assigned by the applicant to the
secured by the
Finance Corporation in the amount of $398,927.21 to be
gold bonds
pledge of $600.000, principal amount, of first refunding 5%
of the Nashville Terminal Co.; and
applicant
the
to
Co.
Station
(c) A demand note of the Tennessee Central
Corporation
and assigned by the applicant to the Reconstruction Finance
rate of 5%
In the principal amount of $100,000, to bear interest at the
upon all the
per annum and to be secured by a first lien deed of trust
property of the Tennessee Central Station Co.
to the Reconstruction
3. That the applicant should be required to report
making
Finance Corporation and to WI, in writing, within 30 days of the
purposes
of the loan, the expenditure of the proceeds of the loan for the
for which it is authorized.
In denying the application of the Waco Beaumont Trinity
& Sabine Ry.for a loan of $3,750,000 by the Reconstruction
Finance Corporation the Commission's report says in part:
Ry. and Paul T. Sanderson,
The Waco Beaumont Trinity & Sabine
application to the Reconstruction
its receiver, filed on March 9 1932 an
under the provisions of
Finance Corporation for a loan of $8,983,285
Corporation Act. On May 10
Section 5 of the Reconstruction Finance
in which they presented a modified
1932 they filed an amended application,
of the loan requested to $4.500,plan of financing and reduced the amount
1932, they reduced the amount
000. By further amendment, July 27
contractor would accept $1,500,000
requested to $3,500,000, stating that a
n. On Aug. 2 1932 a
In notes covering a like amount of new constructio
of $3,750,000. on the basis of
revised application was filed for a loan
contractor.
81,250,000 to be financed by the
to Weldon, 48.3 miles, and
The Waco's lines extend from Livingston
in Tyler, Polk. Trinity and
from Trinity to Colmesneil, 66.7 miles, all
the International-Great Northern
Houston counties, Tex. Connection with
Southern Pacific System at
Ry. is made at Trinity, and with lines of the
Important extensions are conLivingston, Corrigan and Colmesneil.
templated.
RR.,organized
The Waco was formerly the Beaumont & Great Northern
Tex. In
In 1905 to construct a line between Trinity and Beaumont,
since then
and
the
property,
acquired
1909, R. C. Duff and associates
has been active in its
Duff, who became President of the Waco in 1923,
to the Missouri
affairs. In 1912 the stock of the Waco was conveyed
n that had
Kansas & Texas Ry., which proceeded with the constructio
in 1915, and
into
receivership
passed
been begun. The Katy, however,
. the Waco was
construction ceased. When the Katy was reorganized
the obligation Imposed by a
taken over by Duff but was not relieved of
and the State of Texas
contract which had been executed by the Katy
financial
with respect to an extension of the line from Weldon to Waco. A
our order and the
under
effected
then
was
reorganization of the Waco
Steps were taken
line between Trinity and Colmesneil was acquired.
e amount of
looking to extensions of the original line, and a considerabl
ts for financing
money for this purpose was advanced by Duff. Arrangemen
not consumwere
they
but
bankers,
the enterprise were made with certain
and on Feb. 6 1930 a remated, the current depression then followed,
of Trinity
ceiver was appointed for the property by the District Court
a claim for $1,100,000,
County, Tex. In that proceeding Duff has filed
like
amount
a
of
holder
the
as
which represents the Waco's obligation to him
his order.
of first mortgage bonds either actually issued or issuable at
County enUnder date of Feb. 29 1932 the District Court of Trinity
to file the present
tered an order authorizing the Waco and the receiver
plan upon
the
describing
and
application, reciting in detail Its purposes
which it was predicated.
funds needed at this
The applicants state that they can not obtain the
, especially in view of
time from any source other than the Corporation
are desired for
funds
the
existing business conditions and the fact that
It is
an enterprise in a formative rather than a completed condition.
applicants to procure funds
our view that the question of the ability of the
general public is committed by
through banking channels or from the
Corporation Act primarily to
Section 5 of the Reconstruction Finance
the Corporation.
the provisions of Section 210
No loans were made to the Waco under
company, being in receivership,
of the Transportation Act, 1920. The
g Plan. 1931" of the
is not a party to the "Marshalling and Distributin
Railroad Credit Corporation.
The Application.
contemplates the termination
Briefly stated, the applicant's proposal
operated mileage from 115 to 252
of the receivership and an increase in the
properties. The loan is requested
miles in an effort to save the existing
program as stated in the latest
in connection with the following financial
revision of the application:
to retire a like amount of
Immediate payment to the receiver
$1,110,000
the company's first mortgage bonds
existing lines; total estimated
New construction, and repairs on
3,878,362
cost
$4.988.362
Total
thus aggregate $5,000,000.
In round figures the requirements
6% bonds, due In 1953.
Of the Waco's $1,110,000 of first mortgage
and are in default. They
outstanding
$3330.000 have been issued, are
secure a note for $100,000 in favor
are owned by Duff and were pledged to
This is a personal obligation
of the reorganization managers of the Katy.
property, in part. The Katy
of Duff but represents expenditures on the
the note amount to $69.300.
on
now holds the collateral. Interest accruals
first mortgage are
The remaining $780,000 of bonds under the Waco's
to accept the $1.110.000
issuable to Duff on demand. In 1923 he agreed
Volume 135
Financial Chronicle
of bonds, together with $1,113,000 of capital stock, in consideration of
the delivery to him of all bonds then outstanding upon the properties.
Later, he arranged to surrender $330,000 of bonds and to release the Waco
from liability to issue to him the $780,000 of bonds upon consideration
that the Waco deliver to him $901.500 of its capital stock and pay him
$200,000 in cash. This transaction was authorized by us but was never
completed.
In the plan now proposed all the existing bonds of the Waco would be
cancelled. From the advance of $1,110,000 Duff would receive approximately $800,000 to be devoted to settling outstanding claims. It is expected
that approximately $75.000 would be used to pay receiver's notes and
other liabilities; approximately $58,500 to pay preferred claims of company
employees; $35,000 to pay one-half the accrued taxes in five counties;
$24,652 to settle claims of the Katy, in dispute, aggregating $98,611.59,
and $248.500 to settle all remaining claims against the Waco, amounting
to $390,795. On this basis about $358,000 would remain in Duff's possession to cover his own claims against the company. The $310.000
remaining out of the $1,110,000 advance would be paid to the treasurer
of the Waco for employment on new construction and to cover operating
deficits until such time as the Port Arthur extension shall be completed
and become productive. The claims referred to are as of Feb. 29 1932.
The remainder of the amount requested is primarily for construction
and rehabilitation of lines after the receiver shall have been discharged.
In the original application the construction and rehabilitation proposed
was estimated to cost $7,234,541; the amended application of May 10
reduced the amount to $4,987,424, and the plan submitted on Aug. 2
fixed the figure to $3,878,362.
It is proposed to issue to the Corporation $3,750,000 of three-year 6%
gold notes, secured by a new first mortgage upon the properties of the
Waco now owned or hereafter acquired. The contractor has agreed to
accept $1,250,000 of second mortgage notes in part payment for construction.
Following the initial advance of $1,110,000 for discharging the receivership, the Corporation would make advances monthly for construction,
retaining 10% of the estimated amount payable until completion of the
work. Upon completion of the work and payment to the contractor
of the retained 10% of cost, a final adjustment would be made, leaving
such amounts of company's notes in the hands of the Corporation and
the contractor. as will represent total final costs.
Purposes of the Loan.
This loan is desired to complete projects consisting of an extension of
westward
to Normangee, 32.5 miles, and another from
line from Weldon
Livingston southeasterly to Port Arthur and Fort Neches, about 100 miles.
Approximately $215,000 has been expended on these extensions. The
first named is part of a proposed 76-mile line to reach Waco, the ultimate
plan being to provide a direct connection between that point and the
Sabine ports. At this time a connection between Normangee and Waco
Is not contemplated, and a loan for the purpose is not requested. Trackage
operations are involved to some extent with both extensions, and it is
proposed to acquire an existing electric line between Beaumont and Port
Arthur. The extensions were authorized by us in Construction of Line by
W. B. T. dc S. Ry., 94 I.O.O. 591, decided Feb. 19 1925, and in Construction by W. B. T. & S. Ry., 124 I.C.C. 769, decided July 12 1927.
In our report in the latter proceeding we pointed out that the proposed
extensions would materially shorten the route between Port Arthur and
interior points in Texas on the west and northwest, and would tend to
promote a desirable development of the Sabine ports. From the evidence.
it appeared that the applicant's net revenues would be substantial. The
Waco project received general support from State authorities, chambers
of commerce, banks and citizens, particularly in the Port Arthur-Beaumont
district. In the area to be served by the lines as extended the population
is estimated by the applicants at approximately 250,000, and north of
Beaumont at approximately 150,000. In Sabine Basin Ry. Co. Proposed
Acquisition, 170 I.C.O. 653, decided April 17 1931, we denied an application filed in the interest of the Atchison Topeka & Santa Fe By.
and the Missouri Pacific RR, for authority to construct a new line into
the territory south of Beaumont. The Waco and its receiver were interveners in the proceeding. Our order entered on Jan. 12 1932 in St. Louis
Southwestern Ry. Co. Control, 180 I.C.C. 175, authorizing the acquisition
of control of the St. Louts Southwestern by the Southern Pacific, was
conditioned upon the agreement of the latter company to acquire the lines
of the Waco at the commercial value thereof, upon a finding to that effect
in the original or an ancillary proceeding. In Consolidation of Railroads,
159 I.C.C. 522, the Waco is assigned to System No. 16—Southern Pacific.
We stated in 180 I.C.C. 175, supra, that it appeared the Waco lines should
be continued if a sound basis for operation could be established. We are
convinced that the present mileage of the Waco can not be made profitable,
and in considering the application for a loan we are confronted with the
question whether the future traffic possibilities of the extended line are
sufficient to justify such loan4
Respecting the advance of $1,110,000, we have stated that this sum
Is intended to discharge the receiver and permit the cancellation of the
funded debt of the company. Duff insists that nearly $700,000 of general
claims against the company and the receiver can be settled by the expenditure of approximately $442,000 of loan funds. The loan requested
for the extensions has been scaled down from estimated costs that appeared
to be extremely low already, and we apprehend that a further loan or
financial aid from some source would later be found necessary in order to
fully and properly carry out the plan of rehabilitation and construction.
The revised program, as we have stated, provides nothing for repairs
and renewals on the Trinity-Colmesneil line, which are needed if that line
Is to be continued in permanent operation, and leaves the building of
terminals at Port Arthur for the future, or to other means of financing.
Necessities of the Applicant.
The Waco's primary need is for additional revenue by an extension of
Its operation, rather than for financial aid to overcome temporary deficits
from the operation of existing lines. Since 1927 this operation has resulted in a considerable loss each year, and in only one year since 1923
has the carrier reported any net income. Including 1932, a total deficit
of $422,580 in net income is estimated for the period beginning April I
1923. As of Dec. 31 1931, total current assets were $20,046. and total
current liabilities $539,792. The cash forecast for 1932 shows that loans
aggregating $40,000 must be negotiated during the year in order to maintain
operation. This represents the conditions in the event no loans be made
by the Corporation. It seems certain that deficits would continue under
the present manner and extent of operations and that an abandonment of
the entire line might be expected unless a large increase in revenue can
be obtained. There is evidence of much financial distress in the territoryu
and the local interests are urging that the loan be made.
The Waco's extension to a terminal on the Beaumont-Port Arthur
Waterway, with its possibilities in connection with the barge lines, and
the recently-opened Sabine Neches canal between New Orleans and Port
Arthur, is represented as a large transportation improvement and an
effective measure for the relief of unemployment and distress in that
1271
section of Texas. In the proceeding Securities of Waco, B. T. & S. Ry.
Co., supra, there was testimony that this extension itself would create
traffic yielding gross revenues of not less than $1,250,000 a year and a
net income of $375,000 applicable to the payment of interest. In support
of the instant application, the traffic manager of the Waco presented a
forecast of traffic and earnings for the line as extended to Normangee on
the west and Port Arthur on the southeast. During the first year of
such operation, he estimates that the total gross revenue; would be $3,174.944, and that there would be substantial increases during the following
years. In 1929 the J. C. White Engineering Corp. investigated the
possibilities of the Port Arthur extension at the instigation of a banking
house which was then interested in the Waco's proposed issue of $3.000,000
of bonds. The report of the engineers was to the effect that the Waco
might reasonably expect to realize from such extension an annual net
income of $477.000. We concluded in 124 I.C.C. 769, supra, that there
was ground for the belief that the Waco's net revenues would approximate
$293,000 during the first year of its extended operation and should increase
to $675,000 a year after the fifth year. Since then local conditions have
changed and the general business depression, with its serious effect upon
all rail traffic, introduces a grave doubt as to forecasts previously made.
A new element has developed in the situation, namely, the prospect of
a traffic arrangement between the Waco and the Rock Island System.
A large movement of petroleum traffic from oil refineries at Beaumont and
on the Port Arthur-Neches waterway, other commodities in volume received by such oil refineries, and considerable other traffic coming from
or destined to Beaumont or points in the Port Arthur district are interchanged between the Rock Island and certain of its connections. Approximately three-fourths of such interchange appears to be with the Kansas
City Southern at Howe, Okla., or at Kansas City. Mo. The remainder
is interchanged at north Texas junction points with various lines reaching
Beaumont and Port Arthur. If a major part of the Rock Island's Beaumont
and Port Arthur business were diverted to the Waco by way of Normangee,
and if, as the applicants anticipate,some additional traffic not novrhandled
by the Rock Island Is diverted to that route, under favorable divisions,
it is entirely possible that the enterprise would pay in normal times. This
would be accomplished, however, largely by diverting traffic from the
Kansas City Southern and other lines, usually to a route longer than
that now used. It does appear that the extension of the Waco would
create much new traffic. The tonnage originated at points north of
Beaumont might eventually develop to a substantial amount but except
for lumber it can not be considered important in the immediate future.
We see little likelihood of a diversion to the proposed new route of much
of the grain and cotton or other export, import, or coastwise traffic now
moving via the ports of Houston and Galveston. The Rock Island now
serval Houston and Galveston with its own rails. We are not convinced
by anything of record that it will make any effort to build up export,
Import, or coastwise traffic through Beaumont or the Sabine ports which
can move through Houston or Galveston, although it has given assurance
that it will actively support the Waco in soliciting traffic which would in
any event be destined to or come from Beaumont or Port Arthur. An
attempt to accomplish a larger development of the Sabine ports can not
justify a loan to the Waco under present conditions.
Security.
As previously stated, it is proposed to create a new first mortgage on
the Waco, and to issue $3,750,000 of 3-year 6% notes, to be held by the
Corporation as security for a loan in that final net amount. The form
of the proposed mortgage has not been worked out and submitted. rs
is obviously impossible to place any market value on the proposed notes:
Based on the engineering reports of our Bureau of Valuation, and the
subsequent additions and betterments reported, the applicants have computed a value for the Waco's present properties of $2,427.413, as of Dec.
311931. We have not verified this computation. The total investment
reported as of the same date is $2,333,948.
The adequacy of the security offered is dependent very largely upon
the financial suceess of the new enterprise which, as we have indicated.
is extremely uncertain. We find it difficult to believe that a substantial
earning power could in any event be established before the loan matures.
Regardless of the standing of the American Creosote Works, security
for the loan must be found in the railroad property itself and its earning
capacity.
The applicants argue that one clear purpose of the Reconstruction
Finance Corporation Act is to assist railroads which were in process of
construction at the time when the measure was enacted by Congress.
Excerpts from the report of hearings held by the House Committee on
Banking and Currency were attached to the application to show that the
Waco's situation was specifically disclosed to that committee and was
instrumental in determining the final provisions of the act in so far as
they affect railroads under construction. As to the principle or policy here
involved, our findings in the present case are not to be construed as prediccated upon an opposite view.
Conclusions.
Upon consideration of the application and investigation thereof, we
conclude that the prospective earning power of the applicant and the
security offered as a pledge for the proposed loan are not such as to afford
reasonable assurance of its ability to repay the loan. We are unable
to find that the Corporation would be adequately secured. Accordingly,
approval of the loan must be denied.
An appropriate order will be entered.
Commissioner MoManamy dissenting, says:
One of the commendable purposes of the Reconstruction Finance Corporation Act is to assist railroads which were in process of construction
at the time the measure was enacted by Congress, thus making it possible
for the work to continue, thereby aiding in the relief of the unemployment
situation. It is my view that this application clearly.comes within that
purpose and that the future traffic possibilities are sufficient to justify
the loan.
Commissioners Lewis and Mahaffie dissent:
Chairman Porter and Commissioners Atchison, Eastman
and Brainerd did not participate in the disposition of this
case.
Further details regarding the loan of $1,070,599 to the
Mobile & Ohio RR., which was briefly referred to in our
issue of Aug. 13 follow:
The Application.
The receiver requests a loan of $1,070,599, for a term of 3 years, to be
made in installments on the dates and for the purposes specified below:
July 15:
$60.000
Taxes
Operating deficit
100.000
Equipment trusts
77,000
$237,000
1272
Financial Chronicle
July 31:
Taxes
Equipment trusts
109.000
22,000
Aug. 31:
Taxes
Operating deficit
Equipment trusts
1,500
75,000
146,000
131,000
222,500
Sept. 15:
Taxes
Sept. 30:
Taxes
Oct. 31:
Operating deficit
Equipment trusts
11,000
34,000
75.000
73.000
148,000
Nov. 30:
Taxes
Dec. 31:
Taxes
Equipment trusts
1,300
153,739
132.060
285,799
Total
$1,070,599
The properties of the railroad company were placed in receivership and
the receiver appointed by the District Court of the United States for the
Eastern District of Missouri, on June 3 1932. Effective June 7 1932,
jurisdiction was transferred from the District Court of Missouri to the
District Court of Alabama, and the applicant has operated the railroad
under direction of the latter court since that date. On July 7 1932. the
receiver was authorized by the court to issue certificates of indebtedness of
an aggregate principal amount of not exceeding $1,070,599. and to pledge
or hypothecate ail or any of such certificates as collateral security for loans,
provided that all loans so obtained should bear interest at a rate not exceeding 6% per annum. The order of the court further specified that the
proceeds of any loans secured by the pledge of the certificate should be
used as follows.
(a) In the payment of past due taxes-of the defendant constituting a valid lien or charge upon the properties of the defendant or any part thereof, not exceeding
$58,539
(b) In the payment of taxes of the defendant to become due or
payable on or prior to Jan. 1 1933. which, if unpaid, will constitute a valid lien or charge upon the properties of the defendant
or any part thereof, not exceeding
312,000
(c) In the payment of installments of principal and interest
maturing from time to time up to Jan. 1 1933 on the respective
equipment trust obligations of the defendant, not exceeding - 450,060
(d In paying the expense of conducting, managing and operating of
the business conducted with the receivership property, and of preserving
and maintaining said property. $250,000, or as much thereof as may be
found to be necessary, and for the payment of which the current income
of said property shall be insufficient.
By the terms of the order, these certificates will constitute a lien and
charge upon all net earnings and income from the property in the hands of
the receiver, or which may thereafter be acquired, and, so far as the net
earnings and income shall be insufficient for the payment of the certlicates,
upon all the property of any nature of the railroad company. This lien is
declared by order of the Court to be prior and superior to all mortgage liens
except the liens of equipment trust obligations on rolling stock of the railroad company, to which the lien of the certificates shall be inferior. Application has been filed with us by the receiver for authority under Section 20a
of the Inter-State Commerce Act to issue these certificates.
The applicant states that he is unable to obtain funds through banking
channels or from the general public. It is our view that this question
committed by Section 5 of the Reconstruction Finance Corporation Act
primarily to the corporation.
Due to the receivership, the applicant is ineligible to become a party to
the "Marshalling and Distributing Plan, 1931" of the Railroad Credit
Corporation. However, the railroad company prior to the receivership
became a party to the plan, but the applicant, under authority of the
court appointing him, has cancelled the agreement. During the first five
months of the current year a total amount of $39,545.
.23 was received by
the railroad company from increases in freight rates permitted under the
above decisions. This sum was paid to the Railroad Credit Corporation.
For the remaining months of 1932 and the first three months of 1933.
it is estimated that an amount of $116,300 will be received by the applicant
from this source.
n Mobile & Ohio Railroad Company Reconstruction Loan, Finance Docket
No.9169, 180 I. C. C.611. decided Feb. 25 1932, we approved a temporary
loan from the Reconstruction Finance Corporation to the railroad company
In the amount of $785,000, for the purpose of providing funds to meet fixed
charges due on Feb. 1 and March 1 1932, pending a loan to the applicant
for this purpose by the Railroad Credit Corporation. On March 28 1932,
the Railroad Credit Corporation assumed this loan and reimbursed the
Reconstruction Finance Corporation therefore. On March 18 1932, the
railroad company filed with us an application to the Reconstruction Finance
Corporation for a loan of $1,000.000. This application was later witdrawn and an order of dismissal entered by us on June 8 1932.
Necessities of the Applicant.
The details of the amount of 61,070,599 for which a loan is sought, are
given above, and are in conformity with the purposes specified in the order
of the court of July 7 1932, above referred to.It will be noted that according to the application the amount of $60,000 will be required for payment
of taxes due July 15 1932. Of this amount, the sum of $58,539 represents
past due taxes as of the date of the order of the court, and the balance
represents taxes accruing subsequent to such date and payable July 15.
The applicant has filed with us a statement of the general purposes for
which it desires the amounts aggregating $250,000, designated in the
application as "operating deficit" and referred to in the order of the court
as "the expense of conducting, managing and operating of the business
. . . and of preserving and maintaining said property . . . and for
the payment of which the current income . . . shall be insufficient."
The applicant has made an estimate of all cash received and receivable by
him for the current year and of all necessarycash disbursements. The sum
of $562,415 Is the aggregate amount by which the estimated cash receipts
will fall short of meeting the necessary cash disbursements not including
in the computation any prospective disbursements for taxes, or for interest
and principal upon equipment trust obligations to the payment of which
separate amounts of the loan requested would be applied. To meet this
total deficiency of $562,415. the appllcant states that 6250,000 of loan will
be sufficient and has applied for that amount only. The $250,000 would
be used at once or in the immediate future to pay:
Equipment rents, actual for June 1932$33,978
Equipment rents, estimated for July 1932
26.960
Equipment rents, estimated for August 1932
29,275
Equipment rents, estimated for September 1932
. 29.290
Joint facility rents, actual for June 1932
20,803
Joint facility rents, estimated for July 1932
35,500
Joint facility rents, estimated for August 1932
35,000
Joint facility rents, estimated for September 1932
35,000
Total
$254,806
Aug. 20
1932
The total amount of $450,060 necessary to meet payments of interest
and principal upon equipment trust obligations is payable upon the various
obligations as follows:
.
Date
Description.
Due 1932. Principal. Interest.
Total.
Equip. Trust, Series M-_July 1
$19,600.00 $19,600.00
Equip.TrustNotes,American
Locomotive Co
July 1 $36,000
1,080.00
37,080.00
Equip. Trust, Series0
July 15
16,200.00
16,200.00
Equip. Trust Notes,Govern_July 15
3,645.00
3,645.00
Equip. Trust, Series P
21,712.50
Aug. 1
21,712.50
Equip. Trust, Series L
Sept. 1
15,900.00
68,900.00
53,000
Equip. Trust, Series Q
Sept. 1
77,760.00
54,000
23,760.00
Equip. Trust, Series N.._ _Nov. 1
18,562.50
73,562.50
55,000
1933.
Equip. Trust, Series M
Jan. 1 112,000
19,600.00
131,600.00
$310,000 $140,060.00 $450,060.00
The amounts of principal and interest due July 1 and July 15 were not
paid and the time of payment has been temporarily extended.
Security.
As security for the loan, the applicant offers to pledge with the Reconstruction Finance Corporation his certificates of indebtedness of a principal
amount equal to the amount of the loan requested These certificates will
constitute the entire issue of certificates so far authorized by the court and
will bear interest at a rate of not exceeding 6% per annum, payable semiannually. As heretofore stated, the certificates will be a lien upon all of
the properties of the railroad company superior to all mortgage liens thereon,
except the liens of equipment-trust obligations. The amount of such
equipment-trust obligations outstanding as of the date of the application
was $5.275.500, constituting a first lien upon rolling stock purchased at a
cost of $12.631.705. The receiver reports a total investment in equipment
as of May 311932. of 619,661,300.39, and accrued depreciation thereon as
of the same date of $5,011,716.79, leaving an amount of $14,649,583.60 as
the investment in equipment, less depreciation.
There have been filed with us opinions of counsel for the trustees under
the various mortgages upon the railway properties that there is no intention
of the trustees to appeal from the order of the court authorizing the issuance
of the receiver's certificates of the tenor proposed. There has also been
filed a resolution passed by a protective committee representing holders of
Mobile & Ohio refunding and improvement mortgage 06% bonds and
5% secured gold notes. due 1938. advising the committee's counsel to notify
the trustees that the committee is satisfied not to appeal from the order.
Conclusions.
Upon consideration of the application, and after investigation thereof,
we conclude:
1. That we should approve a loan of not to exceed 61,070.599 to the
receiver of the Mobile & Ohio Railroad Co.. for a period not exceeding
three years, for the purposes set forth in this report:
2. That the Receiver, under appropriate authority of the court of Jurisdiction, should deposit with the Reconstruction Finance Corporation as
security for, or as direct evidence of, tho loan receiver's certificates of indebtedness, as aforesaid, in a principal amount equal to the amount of
the loan;
3. That the Corporation will be adequately secured under such conditions.
Loans have been applied for by the following roads:
Apache By
Baltimore & Ohio RR
Canton & Carthage RR (Miss.)
Chicago & North Western By
Puget Sound & Cascade By
Southern New York By., Inc
$147,696
31.625,000
150,000
5,000.000
300,000
960,629
Baltimore & Ohio RR.
The Baltimore & Ohio RR. asks the I.-S. 0. Commission to approve a
further loan from the Reconstruction Finance Corporation of $31,625,000,
to be used to pay off in cash one-half of maturing 20-year 4
% convertible
gold bonds amounting to $63,250,000 on March! 1933.
In its application, the road professes itself unable to weather expected
demands on the bondholders without aid to the extent of $31,625,000.
"Because of the unprecedented business and market conditions prevailing," says the brief. "and because of the low prices at which its securities
are selling in the open market and consequent high rate of return thereon.
applicant will be unable to obtain upon reasonable terms through banking
channels or from the general public sufficient funds to pay at maturity the
Principal and interest on its 20-year convertible 43 % bonds or to effect a
retirement of the entire Issue through an exchange of its refunding and
general-mortgage bonds."
The B. & 0. has received from the Reconstruction Finance Corporation
to date credits totalling $35,000.000, of which $2,500,000 was for benefit
of the Chicago & Alton, a subsidiary.
Apache By.
The receiver of the Apache By. asks the Commission for the approval of
a loan for three years amounting to $147,696.
Canton & Carthage RR.(Miss,.).
The Canton & Carthage RR, asks the Commission for the approval of a
loan of $150,000 for three years.
Chicago & North Western By.
The Chicago & North Western By. asks the Commission to approve a
further loan of $5,000,000 to be paid over to the road by Oct. 12. This
entire loan, if granted, will be used to pay off one-half of the road's bank
loans,received from a syndicate organized by Kuhn,Loeb & Co., and which
falls due Oct. 13. The $5,000,000 loan is applied for with the understanding
that the lenders will extend the time in which the other half of the credit
may be repaid.
In its application the company lists its creditors as including, in addition
to Kuhn, Loeb & Co., which advanced $500.000, the following New York
institutions:
National City Bank
$3,000,000
Chase National Bank
1.000.000
Central Hanover Bank & Trust Co
1,000,000
Chemical National Bank & Trust Co
500,000
United States Trust Co
250,000
New York Trust Co
250.000
Bank of New York & Trust Co
200,000
First National Dank
100.000
This credit of $5,000,000 is part of a $26.000,000 total for which application was made some months ago. The Commission so far has approved
loans of $7,600.000 to the railroad. Of this sum the road has used $6,643.083.
Puget Sound & Cascade Ry.
The punt, sound & cascade By. has asked the Commission's approva'
to borrow $300,000 for three years. The loan would be used to repay money
Financial Chronicle
Volume 135
due the Puget Sound Pulp & Timber Co. and would be secured by a first
lien mortgage bond for the applicant.
Southern New York By., Inc.
The Inter-State Commerce Commission is asked to approve a loan of
$960,629 to Southern New York Railway, Inc. Funds would be used to
pay advances and taxes and to renew and rebuild equipment and tracks.
Security offered included first mortgage 4%% bonds of New York State
Electric & Gas Corp. due 1980 and stocks and bonds of the applicant.
Farmers "Strike" in Iowa—Spread of Movement to
Illinois, Nebraska and South Dakota—Milk Price
War in Iowa.
A farmers' "strike" which is said to have begun in Iowa
on Aug. 8 "in seemingly mild protest against low prices
for farm products" (said the Associated Press in Des Moines
dispatches, Aug. 15), effected on the latter date a tightening
blockade of the Sioux City terminal, as its leaders were
indicated as considering the extension of the movement to
other States. The Associated Press accounts from Des
Moines on Aug. 15 furthar said:
Picketing, boycott and threats were invoked by the farmers in Northwest Iowa to advance the strike, which would withhold producefrom markets
until producers are assured that production costs plus a fair profit will be
realized.
Stockyards in Sioux City, one of the major livestock markets of the country, today received 3,500 animals as compared to 6,500 a week ago and
8,500 ott the corresponding date last year.
Hundreds of foam men and women barricaded roads to prevent produceladen trucks from entering Sioux City, and a crisis there was considered
close at hand.
Produce dealers in Kingsley, a small town a few miles from Sioux City,
were warned not to open for business to-day, a demand to which they
bowed. Unemployed men near Waterloo, Iowa, patrolled suburban roads
with signs bearing the slogan, "Farmers' holiday—sell no products."
Meanwhile in Des Moines a group of National Farmers' Holiday Association leaders from several States met to make plans for spreading the move-.
ment, to report that in near-by States the holiday was receiving increasing
support, and to decide what would be done with the products held back from
market at the termination of the strike.
Inception of Movement.
The holiday was started under the auspices of the Iowa Holiday Association by Milo Reno, national president of the organization, last Monday,
Aug. 8. During the week many produce dealers, elevator men, railroad
officials and others declared the strike had no effect.
The strike in this State is scheduled to last thirty days, or until its leaders
have decided that farmers are paid what they should be paid for hogs, corn,
wheat, chickens, cream and other products.
Growers who wished to bring their produce to market besieged authorities
with requests for safe conduct.
In Kingsley, in the last few days milk and cream have been poured
out
of several trucks after drivers defied demands to stop handling produce.
Milk Strike.
Adding to the concern in northwest Iowa, is a milk strike in Sioux
City.
This is not a part of the farmers' holiday, but a distributors' movement.
Milk has been thrown into the roads and many gallons have been given
free
to poor people.
In Harrison County, in the extreme west central part of Iowa,
officials
were on the alert to prevent the carrying out of threats to dump cargoes
of milk trucks bound for Omaha. Notes threatening drivers were
pinned
to the machines.
In the association leaders' meeting, John S. Bosch of Atwater, Minn.,
and E. N. Hammerquist of Farmingdale, S. D., declared that the strike
sentiment was growing in their States. They were not prepared to say
when it would be started.
On Aug. 16 an Associated Press dispatch from Des Moines
to the New York "Herald Tribune" said in part:
Markets at Sioux City and a few smaller northwest Iowa towns alone
suffered declining receipts to-day because of farmers' attempts to
withhold
sale of their products pending higher prices.
From a score of the larger centers throughout the State came reports that
the strike called by members of the National Farmers' Holiday Association
for 30 days was without apparent effect.
In the Sioux City area hundreds of farmers picketed highways under
surveillance of 50 special deputy sheriffs and police. So effective was the
strikers' campaign that only about a dozen trucks, instead of the normal
600, reached the markets. Unarmed sheriff's deputies escorted the few
truckers through farmers' lines and Sheriff John A. Davenport said he intended to keep open the six main highways into Sioux City, despite the
blockade, by swearing in extra deputies if necessary.
Packers, produce dealers, elevator men and other buyers in all sections
of Iowa except the Sioux City area said they were offered normal quantities
of produce to-day.
Prices for Hogs Off Five to Twenty-five Cents.
Prices for hogs, important item of farm production in Iowa, dropped 5
to 25 cents to-day at the five leading markets in the State. At the same
time, hog receipts jumped to 10,300, as compared to 9,300 a week ago at
nearly a score of interior markets and packing plants.
Farmers in some sections of Iowa were said to be opposed to the strike,
pointing out that they could not afford to forego sale of perishable stuffs
now.
From South Dakota Farmer Union officials came denials of statements
made here yesterday that 90 counties were organized and awaiting a strike
notice. The union officials said they would not indorse the action taken by
Iowa farmers.
From Sioux City Aug. 16 the New York "Evening Post"
reported Associated Press advices which in part said:
Armed officers, abetted by many citizens, to-day kept roads open despite
an attempted barricade by striking farmers, who seek to have all
agricultural products withheld from market until higher prices can be
obtained. • • •
Sioux City bore the brunt of the strike movement. All roads were blocked
by the ''strikers" and all trucks were stopped. Drivers of some moving vans
were forced to open their trucks and let farmers inspect them before they
were allowed to proceed. At Leeds, near Sioux City, a milk truck went
1273
through the farmers' lines, but pickets smashed the windshield with sticks
and rocks. Two of the drivers suffered cuts on their faces.
Meanwhile reports came that similar strike movements were under way
in four other States—South Dakota. North Dakota, Illinois and Nebraska.
At Stevens, S. D.,more than 200 farmers held up each vehicle for inspection.
Other towns reported similar conditions. In North Dakota the object was
to raise the price of wheat to $1 a bushel. Dell Willis of ToIna, originator
of the strike, said he had reports that little wheat was reaching the market.
Effective in Illinois.
In Illinois the strike was declared effective by E. E. Kennedy, Secretary
of the Farmers Educational and Co-operative Union of America, who said
the sale and delivery offarm products by members of the"Farmers Holiday"
would cease for 30 days.
D. S. Wightman of Wayne. Neb., reported the movement was gaining
headway in his State.
At Des Moines the Farmers Holiday Association concluded an all-day
secret session with the adoption of a statement which reiterated the group's
demand for higher farm prices and declared that any attempt to deny the
farmer a return covering the cost of production "Is an attempt to force the
farmer into a condition of virtual slavery and is contrary to the spirit of
the Thirteenth Amendment to the Constitution, which prohibits involuntary
servitude."
The resolutions adopted at Des Moines are given elsewhere
in our issue to-day.
Indicating the spread of the farmers' strike an Associated
Press dispatch Aug. 18 from Sioux City said:
All was quiet on main highways into Sioux City to-night while hundreds of
farmers in three States maintained effective barricades in a strike against
sales.
For the weary picketers the inactivity meant both victory and defeat in
the ten-day strike.
Success lay in the completeness with which striking farmers kept their
neighbors from marketing produce here and the spread of their movement
to other sections of Iowa, South Dakota and Nebraska.
There was failure in falling prices and in a tendency by producers to turn
to railroads for shipments of live stock, butterfat and other products here,
instead of using trucks, hitherto the favored means of farm transportation.
The first attempt to settle the controversy was in progress this evening.
Ralph C. Pritchard, Woodbury County Attorney, called a conference of
strike leaders.
He proposed that strikers permit all trucks to pass through the barricades
after names of the owners were obtained. Then, he suggested, the strikers
could call on the farmers and attempt to win them to the "holiday" movement.
In Boone, Iowa, peaceful picketing of all roads began. Trucks bearing
farm products were stopped and drivers were asked to return with their
loads.
Farmers in southeastern South Dakota, after a speech by Milo Reno of
Des Moines,President of the Holiday Association,resolved to begin a similar
strike soon. Their leaders urged peaceful picketing.
Meanwhile, residents of rortheastern Nebraska began patrolling Federal
highways in their neighborhoods and were planning an even closer watch of
highways into Sioux City.
Hog prices here fell 25 cents to-day because, commission men said, buyers
were seeking their supplies at other markets. The strike in other parts
of Iowa had no apparent effect on prices or receipts.
From a dispatch Aug. 18 from Sioux City to the New
York "Times" we take the following:
Farmers of Dakota County and neighboring counties in Nebraska have
given notice that they will join the strike to-night and that they will permit
no produce or live stock-laden trucks to enter Sioux City from that State.
They are holding a mass meeting at Dakota City, Neb., to-night to perfect
plans for co-operation with the strikers in Iowa and South Dakota.
Regarding the spread of the movement to Illinois we
quote the following (Associated Press) from Kankakee,
Aug. 15:
E. E. Kennedy, Secretary of the Farmers' Educational and Co-operative
Union of America, announced to-day that the "holiday" of Illinois farmers
striking for better prices was in effect.
Sale and delivery of farm products among members of the Holiday Association will stop for 30 days, Mr. Kennedy announced. The action is in
line with that taken by farm groups in other States.
"Stay at home and sell nothing" was the slogan adopted by the member
farmers.
A Sioux City account in the Dee Moines "Register" of
Aug. 16 contained the following:
Milk Price War.
The general holiday movement here seems to have developed since last
week from the milk price war in which farmers sought an Increase of $1.17
a hundred pounds. Sioux City milk distributors planned a meeting soon
In an attempt to arbitrate the price war.
There apparently was little if any milk shortage in Sioux City Monday.
Dealers reported they were getting adequate supplies by train from Omaha.
With reference to the milk price dispute the Sioux City
dispatch Aug. 18 to the New York "Times"had the following to say:
•
Late to-day leaders of striking milk producers were in their third conference with distributors, and it was said there was prospect of settlement
on the basis of 3.8% milk at about $1.85 per hundred, an increase from
$1, the present price, instead of the $2.17 demanded by producers for milk
containing 3.5% of butter fat. An agreement on this basis would result,
it was said, in the retail price of milk being advanced from 8 to 9 or possibly
10 cents a quart.
Connecticut Supreme Court Rules that Receiver of
Merchants Trust Co. of Waterbury May Apply
for Loan from Reconstruction Finance Corporation for Payment of Dividend to Savings
• Depositors.
The Superior Court of Connecticut has the power to
authorize the Citizens & Manufacturers National Bank,
receiver of the Merchants Trust Co. of Waterbury, to
apply for a loan of $500,000 from the Reconstruction Finance
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Financial Chronicle
Corporation to pay a dividend to the depositors in its savings
department, the Supreme Court of Errors decided on Aug.9
in an opinion by Chief Justice Maltbie. Announcement to
this effect was contained in the Hartford "Courant" of
Aug. 10, from which the following is also taken:
The court said, however, that whether such a loan is advisable as a
matter of sound business policy and whether the terms upon which the loan
can be obtained are so advantageous to the estate as to justify a conclusion
that the making of the loan will be for the best interests of the savings depositors are serious questions for the consideration of Superior Court in the
exercises efts equity powers in the receivership proceeding.
Supreme Court Advice Asked.
"If there are any creditors entitled to priority their interests should of
course be protected. Any application for permission to negotiate such a
loan should be heard only after notice to all parties of record, including
creditors claiming a preference, if any, and the order authorizing the loan
should set up the conditions surrounding it, and determine the method of
repayment and the priorities to be accorded it as against the respective funds
in the hands of the court for administration so as to preserve the statutory
rights of all parties in interest." the court said.
The advice of the Supreme Court was asked on reservation by Judge
Newell Jenkins of Superior Court, to whom the application for authority
to apply for the proposed loan was made.
The Citizens & Manufacturers Bank was named receiver of the Merchats Trust Co. on Dec. 24 1931. The closed bank had savings deposits
of $3,649,433.58 and assets in the same department of $3,054,304.06. Of
the book value of the assets $1,900,000 consists of first mortgage loans on
real estate, the appraised value of which is $1,884.500.
Reorganization Not Contemplated.
"The segregated assets are not readily reducible to cash and this is particularly true of the mortgage loans," the opinion says. "In order to make
any distribution to the depositors in the savings department it is necessary
that the assets be reduced to cash, or that they be used as the basis of a
loan so that an early payment may be made to such depositors. If such
loan were made by the Reconstruction Finance Corporation it could run
for not to exceed three years, which time might be extended for a period of
not more than five years from the date of the original loan. The loan
would have to be secured by agreed portions of the segregated assets as
collateral, and the cost of the loan would probably not exceed the income
which the receiver would obtain from the securities deposited as collateral.
"In the stipulation for reservation it is stated that such loan could be
utilized either to pay an immediate dividend to depositors of the savings
department or to facilitate the reorganization of the defendant. We are
informed by counsel that a reorganization of the company is not now contemplated, and that the amount to be borrowed, which has been reduced
from $1,000,000 to $500.000, will be devoted to the payment of dividends
to depositors in the savings department.
The decision says in answer to a question whether the Superior Court
has jurisdiction and power to authorize the receiver to borrow from the Reconstruction Finance Corporation that the court has this power. It also
says that sound business policy would dictate that ordinarily the assets
of the insolvent bank should not be further incumbered but should be
liquidated as speedily as possible.
Situation Not Ordinary.
"But this Is not the ordinary situation. The stipulated facts disclose
a situation in which the money of the depositors is largely invested in
mortgage loans and collateral loans, an attempt to enforce immediate
collection of which would under present conditions be futile, or would in
all probability result in substantial loss to the estate. It was to meet similar
conditions existing throughout the country that the Reconstruction Finance
Corporation was created, through which the resources of the Government
are made available, among other purposes, to enable receivers of such
institutions to make present payments of dividends to depositors, and by
extending the time for liquidation of their 'frdzen' assets avoid the losses
which would follow a forced realization upon them under present market
conditions. In effect a receiver is thus enabled to convert these assets
Into cash with resulting benefit to all parties concerned. No reason occurs
to us why it is not within the power of the court, in a proper case and under
conditions imposed by it, to authorize its receiver to borrow from the Reconstruction Finance Corporation for such purpose."
"Power to authorize a receiver to borrow money carries with it power
to authorize him to pledge the assets of the trust estate as collateral for the
loan," the opinion continues. "The question of the power of the court
to authorize a receiver of a private financial corporation to borrow money
and give security, which will be a charge on the assets in preference to lien
holders, as to which the authorities are not in entire agreement, does not
arise here, since it does not appear that any rights of lienors are here involved, other than the statutory rights of the savings depositors, and by
the terms of the proposed loan the claim of the lender would be subject to
existing liens and encumbrances, if any.
"This proposed lien is for the sole benefit of the depositors in the savings
department of the trust company, and it should not, and it is not proposed
that it should, affect in any way the rights of the commercial depositors
or other creditors. It is stated in the brief of the Reconstruction Finance
Corporation that it is the intention of the parties that the liability for the
loan is to be a charge only against the assets in which the savings depositors
have an interest and only to the extent of that interest, and that it is willing
that the wording.of the agreement be changed to make that clear. This
should be done, and it should specifically provide that the lien upon the
income received upon the pledged securities shall attach only to the extent
of the interest of the savings depositors in such income. The form of note
attached to the agreement provides for interest upon the loan at the rate of
5%, This will be a charge upon the segregated assets of the savings department. The income from those assets becomes a part of the general
assets of the trust company. It should therefore be provided that the
interest upon the loan be paid out of the principal of the segregated assets.
Funds for Repayment.
'The proposed agreement also provides that in using the proceeds of
pay
a
dividend
to
to savings depositors the receiver will make
loan
the
such payment by check upon the back of which will be an indorsement to
be executed by the depositors assigning his claim against and interest in the
assets of the receivership estate to the Reconstruction Finance Corporation
as security for the loan until the corporation shall have received out of the
depositors' distributive share reimbursement of the amount received by
him for the loan. The depositors in the savings department have an exclusive right to the assets segregated in that department for their benefit
and have also the right to share part passu with the commercial depositors
in the proceeds of the general assets of the trust company in the hands of
the receiver to the extent that they are not paid in full out of the segregated
assets in the savings department..
Aug. 20 1932
"By the assignment which the savings depositors will execute, if the
loan is not fully paid out of the remaining portion of the segregated fund,
will be subject to a first charge for its repayment in full, and the Reconstruction Finance Corporation will also have recourse to all the rights
which the savings depositors would otherwise have in and to the general
assets of the trust company. Thus the funds to which the Reconstruction
Finance Corporation may look for repayment of its loan are: First, the
pledged collateral; second, all the remainder of the segregated fund, and,
third, the interest of the savings depositors in the remaining assets of the
trust company, all these funds save the first being•subject to the prior
claims of the receiver for administration expenses."
Francis I. Reeves appeared for the receiver, and Frederick H. Wiggin
and Huntington T. Day for the Reconstruction Finance Corporation.
Investigation by Shannon Committee into Government Competition With Private Enterprise—
Grain Committee on National Affairs Declares
There Will Be no Permanent Improvement in Agricultural Conditions Until Agricultural Marketing
Act is Repealed—Would Also Remove Federal
Farm From Control Over Agriculture—F. A. Theis
Says Board Prevents $1 Wheat.
At the hearing in Kansas City, Mo. of the Shannon
Congressional Committee, which is conducting an investigation into Government competition with private interests,
Frank A. Theis, declared that wheat would now be selling
for $1 a bushel, if it had not been for Government interference with the normal disposal of surplus grain under the
activities of the Federal Farm Board. From the Kansas City
"Star" we quote the following regarding the bearing:
Charges of Coercion.
Mr. Theis read the voluminous records of the expenses of the Farm
Board and gave a chronological account of its statements and the price
of wheat on various dates. He struck viciously at its practices, charging it
coerced its co-operatives in their deals and had squandered a vast amount of
the taxpayers' money.
"Had the market normally been allowed to follow its course," Mr. Theis
said,"wheat might have declined 20 cents or 30 cents a bushel, but we could
have disposed of the surplus instead of accumulating the enormous supply
of 329 million bushels at one time. Had there been no Farm Board interference, wheat to-day would be selling at $1 a bushel."
Reading from his chronological statement, Mr. Theis announced the
date and each statement from the Department of Agriculture or Farm
Board officials. After every remark, he would repeat monotonously, And
No. 2 wheat was selling at 97 cents," or,"No. 2 wheat was selling at 78
cents."
"I quote these bits of advice," he testified, "because the Federal Government through its agencies at all times was urging the producers and the
independents to hold their wheat for a higher Price."
Responsible for Carry-Over.
He told of pegging operations when wheat was set at $1.15 a bushel in
Kansas City, and the glutting of the market. He accused the Farm Board,
by its statements urging producers to hold wheat and build bins, of being
responsible for an enormous carry-over. And in the end he charged it with
having lost the export market for America.
After showing that the normal carry-over of wheat in September was 50
to 80 million bushels, Mr. Theis said in 1929 the carry-over was 198 million
bushels; in 1930 it was 201 million bushels, and in 1931 it amounted to 261
million bushels. He asserted the co-operatives had become so territically
involved in holding wheat that they gradually were being absorbed by
"that great monopoly in Chicago," the Farmers' National Grain Corporation.
As he was attacking the two organizations set up by the Farm Board.
the Grain Stabilization Corporation and the Farmers' National Grain
Corporation, Mr. Shannon interrupted for the first time.
"What has all this cost the innocent taxpayers?" he asked.
"It's difficult to say," Mr. Theis replied, "but virtually all the 500
million dollars in the revolving fund has been spent."
"No, I mean what is the total estimated damage to everyone?" Mr.
Shannon insisted. Mr. Theis hesitated a moment.
Losses Are Terrific.
"Mr. Chairman," he replied, "I think the damage is irreparable to
our producers, grain men and taxpayers. The losses have been perfectly
terrific. I'd hesitate even to guess at it. We've lost our foreign outlets, too."
After Mr. Borders, in hls opening statement, had said the "Farm Board
is the greatest mistake in the direction of socialism ever established," Mr.
Theis briefly told of the organization of the Board of Trade here. He said
Kansas City was the largest hard winter wheat market in the country and
second in elevator and milling capacity.
A prepared statement was presented as follows to the
Shannon Committee by Mr. Theis, who was formerly
President of the Kansas City Board of Trade:
Honorable Joseph B. Shannon, Chairman, and the Members of House
of Representatives Committee Acting under House Resolution 235.
Gentlemen:—This statement is laid before your committee by the Grain
Committee on National Affairs, which represents the following:
Buffalo Corn Exchange
Milwaukee Grain & Stock Exchange
Chicago Board of Trade
Minneapolis Chamber of Commerce
New York Produce Exchange
Duluth Board of Trade
Omaha Grain Exchange
Grain and Feed Dealers Nat. Assn.
St. Louis Merchants Exchange
Kansas City Board of Trade
As representatives of the grain trade in the principal markets in the
United States, the Grain Committee on National Affairs desires to present
to your honorable body certain information, which will be incorporated
in this statement, showing that the competition arising from Federal
Farm Board and(or) the regional and local co-operative organizations
which have been created by the Farm Board or whose activities have been
financed through governmental loans made under the provisions of the
Agricultural Marketing Act, has resulted in great loss and damage to
the individual members of the various associations represented by this
this committee, as well as to many co-operative organizations owned and
controlled by farmers.
The Grain Committee on National Affairs charges:
That the United States Government is and for several years has been
engaged in business on a gigantic scale in direct competition with its citizens
Volume 135
Financial Chronicle
and taxpayers, through the Agricultural Marketing Act and the Federal
Farm Board;
That it is competing with private individuals and corporations in every
branch of the grain business;
That it has bought and sold grain in large volume and has supplied its
subsidiaries with funds from the United States Treasury at lower than
commercial rates, thus equipping them with a devastating weapon of
competition against private individuals and firms:
That it has caused to be created a group of corporations which it falsely
calls co-operatives, but which in fact are not co-operatives and which are
neither farmer-owned nor farmer-controlled;
That these corporations are mere subterfuges through which the Federal
Farm Board conducts itsextensive speculative and other business ventures;
That the Federal Farm Board has wasted vast sums of public money in
futile and ill-advised stabilization and other costly and socialistic schemes;
That it has advanced millions of dollars to the Farmers National Grain
Corporation and its various subsidiaries on security of doubtful value:
That the total farmer membership claimed by all of the regionals affiliated with the Farmers National is only 250,000, or about 10% of the
grain producers of the country;
That against loans to the Farmers National Grain Corporation from
taxpayers' money that at one time totaled some $38,000,000 and now exceeds $16.000,000. the total actual investment of all of the regionals affiliated with it was only about $76,000;
That claims of large and unusual profits from such a small capital are
based on enormous virtually unsecured loans from the Farm Board and
the handling at regular rates of commission of the enormous holdings,
both.cash and futures, of the Grain Stabilization Corporation. These
mmense commissions really represent actual losses sustained by the
taxpayer through the unwarranted speculative transactions of the Grain
Stabilization Corporation;
That it has purchased businesses, facilities adn properties at grossly
inflated prices, using these facilities and properties to compete with legitimate and necessary private business;
That it is the deliberate purpose of the Federal Farm Board and its
subsidized supporters to create with public money an absolute monopoly
In the marketing of grain;
That the arrogant attitude, the artificial price fixing and other acts
of the Federal Farm Board has been largely responsible for prohibitive
tariffs and other regulations which have destroyed the former foreign
markets for grain produced by American farmers;
That the Federal Farm Board has introduced no new or practical methods
of marketing, but has utilized existing facilities and practices with no
saving in cost or improvement in service to the grain producers—on the
contrary, it has demoralized normal merchandising practices to the detriment of the farmer and has assessed penalties, membership fees or other
charges against producers to force them to patronize its sponsored setups;
That besides competing directly with the grain business, the Farm Board
and its setups have persistently and unfairly attacked the integrity and
motive's of private dealers, placing false interpretations on trade efforts
to protect farmers by warning them against the fateful consequneces
of Board policies, and seeking to place responsibilities for Farm Board
blunders upon the private trades;
That in the face of unprecedented abuse heaped upon private trades
by the Farm Board and its vast army of pay-rollers the exchange and
private trades, alone responsible for the great constructive measures
evolved out of years of intensive study, have maintained a market for the
farmer's produce and continue to offer the only hope for improved conditions if given the right to freely distribute the farmer's grain across the world.
That the taxpayer has been forced to pay twice for some of the wheat
acquired by the Farm Board—first, when the original $500.000,000 was
appropriated, and again when a second appropriation was required to
release to the Red Cross wheat previously purchased and used as collateral
by the Farm Board;
That instead of benefitting agriculture in accordance with the announced
intent and provisions of the Agricultural Marketing Act this tragic governmental adventure in marketing, not only has proved tremendously
cosily to citizens engaged in the grain business, but has demoralized and
all but destroyed existing co-operative marketing organizations owned
and controlled by farmers, has been largely responsible for reducing grain
prices to the lowest levels in history, and we believe has been responsible
in no small measure for the extent and depth of the economic depression
which prevails in the country to-day;
That the policies and procedure of the Federal Farm Board and its
various subordinate agencies have not been subject to the wishes or decisions of farmers—on the contrary, the members of the Federal Farm
Board and political appointees and self-styled farmer laeders, who do not
represent the will of the vast majority of grain producers, have exercised
complete control over all the activities conducted by and under the direction
of the Board;
That the Agricultural Marketing Act and the conduct of the Federal
Farm Board have been disastrous to the taxpayers of the United States,
disastrous to the citizens engaged in legitimate business and disastrous
to farmers' co-operative organizations and to farmers as a whole;
That there can be no permanent improvement in agricultural conditions
unless and until the Agricultural Marketktg Act is repealed and the Federal
Farm Board removed entirely from control or direction over the marketing
of grains and other agricultural products and until the Government abandons all interference with markets either through restrictive legislation or
unsound price panaceas.
Submitted by
GRAIN COMMITTEE ON NATIONAL AFFAIRS,
By Frank A. Theis.
Kansas City, MO.. July 25 1932.
Membership of Shannon Committee Which is Investigaing Government Competition With Private Enterprise—Resolution Under Which Investigation is
Conducted.
The special committee which is investigating Government
competition with private enterprise under House Resolution
235, consists of Representative Joseph B. Shannon, of
Missouri, Chairman of the Committee and author of the
resolution, and Representatives E. E. Cox of Georgia;
Samuel B. Pettengill, of Indiana; William H. Stafford of
Wisconsin and Robert F. Rich of Pennsylvania. The resolution authorizing the investigation was passed by the House
on May 31 by a vote of 177 to 128, not voting 126. The
following is the text of the resolution as passed by the House
1275
House Resolution 235.
Resolved, That the Speaker of the House of Representatives be, and he
Is hereby, authorized to appoint a special committee to be composed of
five members for the purpose of investigating Government competition with
private enterprise and all other questions in relation thereto that would aid
the Congress in any necessary remedial legislation. The Committee shall
report to the House not later than Dec. 15 1932. the result of its investigation, together with such recommendations for legislation as it deems
advisable.
That said special Committee or any subcommittee thereof is authorized
to sit and act at such times and places within the United States, whether or
not the ...House is sitting, has recessed, or has adjourned, to hold such
hearings, to employ such experts, and such clerical, stenographic, and other
assistants, to require the attendance of such witnesses and the production
of such books, papers, and documents, by subpoena or otherwise, to take
such testimony, to have such printing and binding done and to make such
expenditures as it deems necessary, and such expenses thereof shall be
paid on vouchers ordered by said Committee and approved by the Chairman thereof. Subpoenas shall be issued under the signature of the Chairman and shall be served by any person designated by him. The Chairman of the.Committee or any member thereof may administer oaths to
witnesses. Every person who, having been summoned as a witness by
authority of said Committee, or any subcommittee thereof, willfully make
default, or who, having appeared, refuses to answer any question pertinent
to the investigation heretofore authorized, shall be held to the penalties
provided by section 102 of the Revised Statutes of the United States.
Secretary of Agriculture Hyde Says Testimony Against
Federal Farm Board at Shannon Investigation is
Inaccurate and Misleading.
Associated Press advices from Kansas City, July 29,
appeared as follows in the New York "Herald Tribune":
Replying to what he termed "the loud squawks" of the grain trade. Arthur
M. Hyde, Secretary of Agriculture, said to-day that American grain prices
under Federal Farm Board regulation had been higher than those enjoyed
by raisers elsewhere in the world.
The ex-officio member of the Board challenged as inaccurate and misleading the testimony given here by grain men before the Shannon Committee of the House investigating Government competition with private
business.
Mr. Hyde also commented on the demands for abolition of the Farm
Board voted before the committee by several grain growers, including
Mrs. Ida Watkins, the "wheat queen" of Kansas.
Not to Blame for Prices, He Says.
"Several farmers gave their opinion that the Farm Board is a sinful instibe
abolished," he said. "All they knew was that the
tution and should
price of wheat is heart-breakingly low—cruelly low. Those farmers are not
really angry at the Farm Board; they are mad at the price of wheat. I
don't blame them—I am, too. It's enough to make a farmer 'cuss' his
grandmother as well as the Farm Board when, after a year's labor, he has
to take a price for his product less than it cost to produce.
"Nevertheless, farmers should study the situation closely before they
abolish the Farm Board, And I would recommend that they go the facts
and make up their own minds rather than take somebody's word—a grain
dealer's, for instance, I wonder if the farmer believes these grain exchanges
are really shedding tears over the price the farmer is getting."
Answering testimony of representatives of the grain trade that wheat
would be selling for $l a bushel were it not for the operations of the Farm
Board, Secretary Hyde declared:
"Except for the tariff and the Farm Board, wheat would be 10 cents a
bushel cheaper than it is."
"Here's the proof," he went on. "Right now wheat is selling on the
Chicago Board of Trade within a very few cents—less than five cents on
the average—of the Liverpool quotation. Yet it costs about 15 cents to
get wheat to Liverpool.
Calls American Farmer Lucky.
"During the life of the Farm Board wheat has brought more at Chicago—
and that means more to the farmer—than it did at Buenos Ayres or Winnipeg. That means that the American farmer—emery low as his prices are—
has received more for his crops of wheat, corn, oats, barley, flaxseed and
grain generally than have the farmers of competitor or export nations.
"Here's more proof. From 1921 to 1929. prices on the Chicago Board of
Trade averaged 16% cents less than prices in Liverpool. From the middle
of 1929—the Farm Board was set up July 15 1929—the prices at Chicago
have averaged less than 5 cents below the Liverpool quotations.
"There is a difference of 11% cents in favor of the American farmer.
That IS why the grain exchanges are releasing their loud squawks. That is
why in Illinois the Chicago Board of Trade, under the pseudonym 'Association of American Business Men,' is holding farm meetings in opposition
to the Farm Board all over the State."
Shannon Investigating Committee to Hear Oklahoma
Cotton Merchants in Furtherance of Investigation
into Government Competition With Private Enterprise—Army Officers at Fort Sill Heard.
Oklahoma cotton merchants and other independents connected with the industry will have an opportunity to tell
how they consider the Government competes with private
business through actions of the Federal Farm Board, according to an announcement by Representative Joseph Shannon
(Dem.) of Kansas City, Mo., Chairman of the committee
investigating governmental competition with private enterprise. An Oklahoma dispatch Aug. 15 to the "United
States Daily" making this known, added:
In closing the hearing at Lawton into charges of competition of the fort
Sill post exchange with Lawton merchants, Mr. Shannon announced hie
intention of giving the cotton industry representatives an opportunity to
tell how their business has been affected by Farm Board operations.
Further Hearings Planned.
A one-day session will be held in Oklahoma City soon, he said, and this
probably will be followed by a New Orleans hearing lasting through Aug.29
to 31,inclusive, and one in Memphis the first week in September.
At these three hearings, it was announced, other businesses besides those
Involved in the cotton trade are invited to present their side in the governmental competition controversy.
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Financial Chronicle
The hearings also will consider the Government's part in co-operative
marketing of cotton and wheat and other agricultural commodities.
Before leaving Fort Sill, Mr. Shannon declared the buildings at the post
are unfit for officers and men to live in for any period of time and said he
will recommend to Congress a building program for this Oklahoma Army
post.
Army Officers Heard.
In the closing session of the Lawton hearings. Army representatives
gave their side of the post exchange controversy.
The depression itself is to blame for much of the loss of Fort Sill business
by Lawton merchants, according to Brig. Gen. William M. Cruickshank,
commandant of the post. He asserted many Army men are assisting unemployed relatives in civilian life. He declared there had been no attempt
to boycott Lawton merchants.
Lt. Col. George M. Peek, executive officer, explained the post exchange
is a co-operative institution, owned by the enlisted men at the post and that
ots profits are used for recreational purposes for enlisted men. He denied
the post exchange had made any attempt to undersell Lawton merchants.
Acting Commandant Testifies.
Making his statements by affidavit, Lt. Col. L. J. McNair, acting commandant at the post,said the post exchange was a necessary defense against
exploitation by local merchants. He pointed out the residents of Lawton
are threr because of choice, but soldiers are at Fort Sill, not particularly
from choice, but because they are sent there by their country.
Challenging merchants to present evidence that soldiers had purchased
merchandise at the post exchange for their civilian friends at the regular
discount, Lieutenant Colonel Peek declared if a report and evidence is made
to headquarters of any such action, the violators will be tried by courtmartial.
Abolition of Federal Farm Board Urged by "Wheat
Queen" Before Shannon Investigating Committee.
Under date of July 27 Associated Press accounts from
Kansas City, said:
Led by the "Wheat Queen" of Kansas, who minced no words and displayed a muscular arm that wields a shovel, a group of grain farmers vehemently demanded abolition of the Federal Farm Board and freedom from
Governmental interference with agriculture at the Shannon House hearing
here to-day.
Mrs. Watkins. a widow, known as the "Wheat Queen"; Albert Weaver
of Bird City, Kan., who controls 13.000 acres and described himself as
the largest continuous wheat producer in his State; Mrs. Carrie Patterson,
farmer of Grove County, Kan., and others came from the harvest fields
to insist that the Government let gariculture alone..
Their demands were echoed by Thomas R. Cain of Jacksonville,
President of the Farmers' National Grain Dealers' Association. He said
he spoke for 900,000 farmers represented by his association who want
the Agricultural Marketing Act repealed, the Farm Board abolished and the
Government taken out of business.
Asked where she drew the line in co-operative marketing, the witness
became aroused and declared:
"I draw the line on the doggone, damnable Government interference with
our affairs and in our business."
"If the Farm Board stays with UB we will soon be through producing,"
she continued. "Our farms and homes by the thousands and tens of
thousands have been foreclosed and will be foreclosed more and more each
day."
She said that thousands of farmers want to borrow a few hundred dollars to buy supplies, but "the banks still turn us down."
"All good Republicans and Democrats alike in my district say, 'I'm
going to vote for Roosevelt because Hoover has given us too much legislation.' It's revolt at the polls we're talking about."
Mr. Weaver testified that 90% of the grain farmers want the Farm
Board abolished and Mr. Cain said that at least 85% of the farmers favor
abolishment.
The Kansan assailed George S. Minor, general manager of the Farmers
National Grain Corporation, a Farm Board agency, stating Mtlnor's salary
was $50,000 a year, which amount he estimated represented the work of
1.000 farmers and their families.
Farm Organization Leaders Defend Agricultural
Marketing Act—Assail Shannon House Committee
Hearing.
Under date of July 22 Associated Press accounts from
Kansas City, stated:
The hearing of the Shannon committee on Government competition with
Private business was termed a "political farce" in a statement defending the
Agricultural Marketing Act issued by a group of farm leaders here to-day.
Among the signers were R. W. Brown, President of the Missouri Farm
Bureau Federation: C. D. Bellows and S. T. Simpson of the Producers'
Marketing Association of South St. Joseph; W. W. Fuqua. Secretary of
the Producers' Livestock Association of East St. Louis, and Kansas City
officials of several co-operatives.
Numerous witnesses appearing here before the House committee, headed
by Representative Joseph B. Shannon of Missouri, have objected to Government aid to co-operatives which compete with privately owned marketing
concerns, and have assailed the Federal Farm Board and the Agricultural
Marketing Act. The witnesses have included livestock commission men.
hay dealers, bankers making livestock loans, cattle raisers and others.
Opposition to Proposal to Reduce Gold Content of
Dollar Voiced by George B. Roberts, Vice-President
of National City Bank of New York—Would Remove Causes of Abnormal Demand for Gold—
Shortage of Confidence, Not Shortage of Gold,
Holds Prices Down—N,iews of A. C. Peters.
Opposition to the proposal to reduce the gold content of
the dollar was voiced by George B. Roberts, Vice-President
of the National City Bank of New York, in a debate, over
Station WOR, on Aug. 4. The affirmative side of the radio
address, which bore the title "Should We Redefine the Gold
Content of the Dollar?" was presented by A. C. Peters, Director of the World Trade League of the United States, Inc.
Aug. 20 1932
George B. Roberts, it will be recalled, not only succeeded
his father (George E. Roberts) early this year as VicePresident of the National City Bank, but also as a member
of the gold delegation of the Financial Committee of the
League of Nations. Mr. Roberts contends that "since
nothing is wrong With the monetary system, but all the disturbance has been due to outside causes, it follows that
there is no need to change the system, and, furthermore, the
proposals to change it are themselves likely to disturb confidence and perhaps cause new and serious derangements.
It is better," he says, "to allow conditions which are new,
and obviously abnormal and temporary, to adjust themselves
to the monetary system than to try to adjust the monetary
system to them."
Mr. Roberts declared that the proposal to reduce the gold
content of our standard coins in order that the number of
gold dollars might be more nearly equal to the outstanding
indebtedness would not accomplish the purpose in view, because if the value of money is reduced the quantity of it
required to handle the country's business will be correspondingly increased, debts will be expanded in like prdportion, and relationship of money to debts and volume of
business will be no larger than before."
In his address Mr. Roberts furnishes the keenest and most
comprehensive analysis in brief form of the causes responsible for the collapse in commodity values that has yet
come to our notice, and the whole tenor of the address is
such as to merit the remark that in an economic sense he is
proving the worthy successor of an illustrious father. The
address in full text follows:
The opponents of the proposal to devalue the dollar agree that the great
decline of commodity prices has worked hardships, particularly upon debtors,
and that it is highly desirable to have a rise of prices; but they do not
believe that the fall of prices has been due to a general scarcity of gold, or
that it is necessary to change the content of the standard dollar in order
that prices may recover.
In the first place, the theory that prices broke down because of an
insufficient supply of gold is not supported by the facts. Although the
production of gold declined during the war, large additions to banking
reserves were made in the form of gold coin that previously had been in
hand-to-hand circulation, so that actually the gold reserves of the world
doubled from 1913 to 1929. There was no such increase in the volume of
trade in that time, even at the higher price level, and although an extraordinary amount of bank credit was absorbed in speculative operations, the
aggregate of reserves was ample even at the peak of the boom.
Furthermore, a precipitate decline of prices such as has occurred, is not
the kind of a decline which results from a failure of supplies of money
to keep pace with the volume of business. The latter condition produces a
gradual decline of prices, as from 1880 to 1896, while the recent declines
have been characteristic of periods of reaction from excessive speculative
activity. Prices always decline in times of business depression, and such
times always follow periods of excessive credit expansion.
The entire period from 1900 to 1929 was one of almost riotous credit
expansion in the United States. In the years from 1900 to 1915 the
increasing production of gold caused a great rise in prices all over the
world. In this country the rise amounted to about 25%. During and
following the war this country received enormous additions to its gold
reserves under conditions which induced their use as the basis of credit.
From 1913 to 1929 the price level rose an additional 88%. Thus from 1900
to 1929 the country was constantly under the influence of rising prices.
always a powerful stimulant to the creation of debt.
Such conditions do not indicate a scarcity of money, but a plethora of
money. If the supplies of gold had been larger the boom would have gone
further and the collapse would have been even more disastrous.
Furthermore, the war had disturbed the normal course of industry and
business in many respects. It cut off the exports of grain which Russia
was accustomed to send to Western Europe and caused a great expansion
of grain production in countries outside of Europe. Then when Russia
came back as an exporter in 1929-30 the world found itself with too much
wheat. In like manner the war destroyed the greater part of the beet sugar
Production in Europe, and stimulated an enlargement of sugar plantations
In the tropics. Since the war the beet sugar production in Europe has
recovered, and world capacity for sugar production exceeds the demand,
with the result that the industry everywhere is in a state of ruin. During
the war construction work except for war purposes was practically suspended, and after the war we have a building boom of unprecedented proportions at an unparalleled level of costs. The extraordinary demand for labor
in war times and during the boom period following caused an increase of
wages that was quite abnormal and is not readily adjusted to normal
conditions.
It seems entirely reasonable to believe that the excesses of the war-time
and war-boom period, together with the drastic liquidation of credit and
loss of confidence resulting, have caused the disturbance of prices, rather
than that the monetary system is responsible. The volume of credit In
use, not the volume of money or the stock of gold, is the element of
purchasing power which undergoes the greatest fluctuations. It is not the
potential supply of credit, but the will to use it, which has undergone
the greatest change since 1929, and this together with the derangements
of industry and trade caused by the war is the true explanation of the
fell of prices.
It is a fact of importance also that owing to influences set in motion by
the war the world's supplies of gold have been piled up in a few countries
to an extent which would not occur under normal conditions, thus tending
to produce inflation in the countries having an excess and injurious restriction of credit in countries having a deficiency. This state of unbalanced
relations has led to a great increase of short-term international indebtedness,
which in the state of alarm prevailing over the last year has been an
element of weakness. The political controversies arising over reparations,
and the strain upon gold reserves caused by the extraordinary payments
on account of reparations and war debts, and the unwillingness of creditor
countries to accept payments of debts in goods, have added to the confusion.
These conditions are the aftermath of war, inflation, trade disorders and
govermental blundering in the business world, rather than of any inherent
defects in the monetary systems as they were before the war.
Volume 135
Following Mr. Peters's presentation of the affirmative
side of the debate, Mr. Roberts said:
The opposing speaker bases his argument for splitting the dollar largely
on the fact that we have created obligations in one form or another far in
excess of our stock of gold. This, he contends, has created an abnormal
demand for gold which has depressed the price level and threatens to
Involve debtor and creditor alike In a common bankruptcy.
The idea that there should be gold to pay off all kinds of indebtedness
at once—in other words, the hat check theory—is utterly at variance with
the theory and practice of every monetary system in the world. In the
first place, lilt were gold, or money of any kind that possessed value, the
lock-un of idle wealth would he prohibitive. There would be no debt, no
use of credit, if money to cover all of it had to be kept constantly on
hand. There would be no banking business if it was necessary to keep all
deposits covered by cash on hand.
The speaker argues that the vast demands upon gold which he has
described have the effect of forcing down prices, but the fact is that in the 15
years before the war the production of gold was so large that it was forcing
up the general price level all over the world. The official price tables
of the United States show an average rise of about 25% from 1900 to 1914.
The truth is, of course, that business is not based on gold in any such
sense as the speaker implies. We don't pay our debts in gold or carry
on business in gold coin. Gold is practically never seen except at Christmas
time or when it is shipped in the settlement of international balances.
Probably over 90% in value of all payments are made in bank checks.
Furthermore, fully 90% of these checks never result in any cash settlement. They meet in the clearing houses and practically offset and cancel
each other. The great bulk of the trade of the country settles itself.
The function of gold in this system is simply to act as a standard of
value, to maintain the parities of the different currencies with gold, and
to provide a means of settling trade balances with foreign countries.
Years of experience have taught us just about how much gold is needed
to discharge these functions, and the results of this experience have been
incorporated in our central banking laws defining what percentage of gold
must be held against the outstanding currency liabilities. This system
has worked satisfactorily in normal times, and the world has developed
and prospered enormously under the gold standard. It is only under the
highly abnormal conditions of the war and post-war periods that this
system has broken down. The breakdown, however, was not caused by
any lack of gold to meet the normal requirements, but was the result of
wholly extraordinary demands caused by the disorganization of trade and
obstacles placed In the way of a free movement of goods and capital.
All of this has upset the normal equilibrium of payments and created
larger balances that have to be liquidated in gold. Moreover, a panicky
distrust of currencies has led a great many people who ordinarily never give
a thought to the kind of money they have to ask for gold.
This, however, is not a situation to be corrected by depreciating the
money. The thing to do is to remove the causes of the abnormal demand
for gold. We need, first, to establish the currency on a firm foundation
of public confidence, so as to check the demand for gold for hoarding.
1277
Financial Chronicle
All of these conditions require time and the restoration of confidence
rather than alteration of monetary systems. The bank reserves are as large
now as they were at the peak of the boom, and all of the billions of bank
credit which have been released from use in unproductive speculation are
now potentially available for industry and trade.
Since nothing is wrong with the monetary system, but all the disturbance
has been due to outside causes, it follows that there is no need to change
the system, and furthermore the proposals to change it are themselves
likely to disturb confidence and perhaps cause new and serious derangements. It is better to allow conditions which are new, and obviously
abnormal and temporary, to adjust themselves to the monetary system
rather than to try to adjust the monetary system to them.
If we mistake a temporary condition for a permanent one, and greatly
Increase the number of dollars possible of creation out of the existing stocks
of gold by cutting down the gold content of each dollar, we shall find
that when conditions become normal we have prepared the way for a great
over-issuance of money. With the active gold stocks again increased; and
the public once more disposed to exploit them to their full capacity, we
shall be launched into a new inflation, bigger and more disastrous than
the last.
As to the argument that justice demands that something be done to
lighten the debt burden caused by the fall of prices, it should not be overlooked that a large part of the long-term debt in the United States is
payable specifically in gold coin of present weight and fineness and hence
would not benefit from any alterations of the dollar. To the extent,
'however, that debt is payable in ordinary money, it is in order to say that
the creditor also has rights that should be respected. Much of the debt
now in existence had its origin before the war. During all of the period
since, the holders of this indebtedness have suffered by the rise of prices.
According to official calculations, the cost of living last December was 46%
above the average of 1918. At this level of living costs, a life insurance
policy paid-up before the war and now maturing would yield 46% less of
value to the beneficiary than was paid for. If the dollar should be cut in
two, the value of the policy would be reduced to one-half of this present
value. All savings in the form of obligations to pay fixed sums would
suffer in like manner.
It is indeed a serious matter that the purchasing power of money should
change as violently as it has changed since 1914, but since the changes
have not been due to any changes in the monetary law, there has been no
breach of faith on the part of the United States Government. The
changes in purchasing power have been due to fortuitous circumstances, the
significance of which the debtor has misjudged.
On the other hand, when the Government deliberately alters the content
of its standard coins with the intent of altering the relations between
debtor and creditor it takes on a very grave responsibility. In the
present situation the Congress would be deciding that commodity prices
will not recover by the free play of natural forces, when, to say the least,
there is a division of opinion upon it among persons competent to judge.
Furthermore, the most serious effect would be to permanently impair public
confidence in the monetary system of the United States. If one Congress
may change the standard of value, on a hasty judgment, to conform to its
Ideas of whether prices are going to rise or fall in the future, so may
any other Congress. And with a precedent established the subject will be
put permanently into the politics of the country.
Remember also that such a proposal could not be put into effect overnight. It would have to be introduced into Congress and debated and passed
by both Rouses. Meantime, there would be a rush to convert dollars into
gold or into some other currency. This would involve a great run on the
gold stocks of the country, more than there would be any possibility of
meeting, for the bank deposits alone amount to more than 11 times our
gold supply, and this does not allow for all bank notes outstanding or
securities which could be sold in the effort to convert the proceeds into
gold. What the effects of such a panic would be on the credit structure
of the country is impossible to foresee.
This means the adoption of sound policies with respect to banking and
public finance, and—particularly important—the avoidance of any suggestion of tinkering with the currency. And we need, second, to bring about
a greater freedom in trade and capital movements, so that the international
exchanges will clear themselves without the need for the huge shipments
of gold which have been so disturbing to the credit systems of the world.
Finally, the proposal to reduce the gold content of our standard coins
in order that the number of gold dollars might be more nearly equal to the
outstanding indebtedness would not accomplish the purpose in view, because
If the value of the money is reduced the quantity of it required to handle
the country's business will be correspondingly increased, debts will be
expanded in like proportion, and relationship of money to debts and volume
of business will be no larger than before.
The events of the past weeks have demonstrated that it is not a shortage
of gold which has been holding prices down as much as a shortage of
confidence. The 23h% rediscount rate in effect at the Federal Reserve
Bank of New York is evidence that there is plenty of money seeking investment. The task now is to restore confidence and so create a disposition
In industry to use credit, in which case there is every reason to believe that
the price level will respond, as it has shown signs of doing already.
From the New York "Times" of Aug. 5 :we quote the
following:
Mr. Peters pointed out that in the country's earliest days gold was made
its basic money and the dollar was defined by law as approximately 25
grams of pure gold, and that bankers "competing unrestrainedly" with
each other, used various types of credit instruments, such as stocks, bonds,
acceptances, bills of exchange, promissory notes, certificates of deposit, all,
in effect, "gold promises," far in excess of the world's gold supply.
"I don't believe there is an economist in the world to-day who would
not admit that this 'technical corner' in gold, which results from contract
demand exceeding available supply, could be broken quickly if new large
gold deposits were discovered," said Mr. Peters.
"Although we cannot find gold enough even to justify present price levels,
we can split up the available gold and rest our dollar, our medium of
exchange, on a smaller piece than 25 grams. We can rest it on 10 grams
or 5 grams if our Government so desires. In other words, we can create a
larger quantity of real money with a solid gold backing, instead of adding
'hot air' to an already excessive amount. In this way we will restore
confidence in the whole monetary system, and distrust of the monetary
system is at the base of this depression."
Asked
to
Accept Five-Day Week by New
York Central.
The clerical force of the New York Central Railroad,
approximately 14,000 employees, have been offered the alternatives of a five-day week, instead of the present sixday week, or dismissal of some of their number in order
to effect a reduction in the payroll, it was learned July
12 says the New York "Herald Tribune" of July 13. The
paper quoted also says:
Clerks
The five-day week plan is being instituted only where it is acceptable to the office workers, according to John G. Welber, vicepresident in charge of personnel. The organized clerks of the railroad, members of the Clerical Brotherhood, have turned down the
plan. John A. Robertson. general chairman of the brotherhood,
notified Mr. Welber that the union proposed a five-day week at
five and a half days' pay as an alternative. This was refused
by the road.
Unorganized workers in the freight transportation department
recently made a voluntary suggestion of a five-day week to forestall dismissal of some of their group. Under the five-day plan,
It is understood that each worker will take a day off under a
stagger plan.
Organized workers outside of the clerical department have not
been asked to accept a five-day week, either because the nature of
their work calls for continuous employment or because there is
nothing in their agreements with the road calling for a definite
number of days employment.
A reduction in salaries of unorganized employees was
noted in Our issue of July 9, page 235.
Delaware & Hudson RR. Adopts New Wage Plan—
Provides 240 Hours Work a Month.
The Delaware.& Hudson RR., on August 1, completed an
agreement that will guarantee monthly employment to its
2,850 operating men. Many of them will receive a slight
increase in salary. Under the agreement the men will nceive
a slight increase in salary. Under the agreement the men will
receive 240 hours of work each month. L. F. Loree, President, announced on August 2 that the monthly wage basis
will have the effect of distributing work more equ4tably than
ls possible under the standard agreement. Dispatches from
Albany on August 1 had inferred that the plan guaranteed
work for all the operating employes, but Mr. Loree explained
that definite amounts of work were guaranteed only for
employes on the "regular" boards. The New York "Times"
of August 3 also had the following to say regarding Mr.
Loree's statement:
"Under the plan," said Mr. Loree. "the operating employes are divided
Into four groups. The road passenger, road freight and road yard employes
are each to receive 240 hours of work every month. The fourth group, those
on the extra board, receive 160 hours of work."
While the plan preserves seniority, employee with high seniority ratings
cannot work more than 240 hours a month, thus making possible more
equitable distribution of work If an employe on the regular board works
his 240 hours in 20 days he takes the rest of the month off.
"The agreement puts in the hands of the management the conduct of
the business of the company," continued Mr. Loree. "In the standard
railroad union agreements, there are 151 articles, some of which call for
double pay for the same piece of work. They contain all sorts of hampering
conditions and provide endless grounds for disputes and controversies."
1278
"After we get the plan started, we should realize a 10% saving in labor
Delaware & Hudson shopmen are represented by company unions and
are working about four days a week on a piece basis. Mr. Loree continued.
He said that no steps had been taken to reduce shopmen's wages, but he
pointed out that the trend in wage rates was downward.
In its consolidation plan of 1929. the Inter-State Commerce Commission
allocated the Delaware & Hudson to a combination with the Boston &
Maine to be known as System No. 1. In its recent amendment to the plan,
the Commission left this arrangement undisturbed.
The standard railway union agreements provide for payment on an hourly
or a mileage basis, with overtime after eight hours.
President Green of American Federation of Labor
Urges Fight Against Railroad Wage Cut—Says
Five-Day Week and Six-Hour Day Must Be
Adopted. •
William Green, President of the American Federation of
Labor, in Boston on Aug. 10 to attend the convention of
the Hotel and Restaurant Employees and Beverage Dispensers International Alliance, declared that railroad employees who have been wiled to accept a 15% cut in wage
should fight that cut to a finish. He asserted that the Federation must adopt a five-day week and a six-hour day
to steady the economic structure. A Boston dispatch to
the New York "Times" quotes President Green as saying:
The entire policy of the American Federation of Labor has been against
the reduction of wages during the depression, and the Federation takes its
stand now against a cut in the pay of railroad employees.
It called for the creation of the five-day week on a national basis and
upon President Hoover to summon the leaders of labor and the industries
to meet in conference and adopt a constructive program to restore buying
power and end the depression. The American Federation of Labor will
hold its ranks against the destructive policy of wage cutting.
From the same account we also quote:
Sees Some Local Improvement.
Discussing the unemployment situation, President Green said that he
has noticed some spots of local improvement and he feels inspired by hope,
but that there is no evidence of general and substantial improvement.
He quoted the latest Government report that industries had laid off 1,300.000 employees between January and June.
The textile industries show some improvement, he said.
•'I want to declare." said Mr. Green, "that in the three years of distress
the American Federation of Labor has offered a program, which,if adopted,
would have lessened the stress, and which, if adopted now, would soon
show improvement."
Summarizing this program, he spoke of the protest against the wagerating policy of the industries, which he declared to be short-sighted in
that it destroyed the power to buy goods. He touched upon the greater
use of machinery which received an impetus after the war, and said he
regretted it only because it threw men out of work and put all the savings
n the pockets of the employers.
"It is not desirable that the factories should be dismantled of their machinery and the power disconnected and the workers put back on hand
labor," he said, "for it is well to go forward, but the industries should
divide the profits with labor.
Urges Five-Day Week.
"If with the use of this machinery we can produce enough in five days
a week, then give us five days."
President Green was loudly applauded when he declared his belief In
the early return of "good wholesome beer."
"A man must be blind and a woman twice blind," he said,"if they cannot
bee that public opinion is changing tremendously on this subject."
Freight Charges Reduced on Cotton in South—Rail
Carriers to Try Lower Rates for Year to Meet Truck
Competition, Says South Carolina Officer.
Railroads in the Southern States have agreed to reduce
freight rates on cotton from 50 to 65% for an experimental
period of one year to meet truck competition, according to
announcement in Columbia, S. C., on Aug. 10, by John C.
Coney, Chairman of the South Carolina Railroad Commission. A dispatch Aug. 11 from Columbia to the "United
States Daily" indicating this, further reported:
The reduction. It was explained, came about through a general agreement
on the part of the rail carriers making up the Southern Freight Alisociation,
resulting in petitions to the Public Service Commissions of Alabama and
Georgia, the North Carolina Corporation Commission and the South
Carolina Railroad Commission for permission to make the new rates effective
for one year.
Covers Distances of 400 Miles.
"At the present time." said the petitions,"the scope of truck competition
territory
covers distances for approximately 400 miles. and
in Southern
after numerous conferences with shippers and mill interests the carriers
have concluded to adopt for an experimental period of one year the several
scales set forth in exhibit No. 1 for single-line application for distances 420
miles and under; the same scales are likewise to be applied for joint line
application to the extent hereinafter set out and the distances figured via
Interchange junction points through which traffic can be handled without
transfer or landing."
It was added that the scales have been graded so as to merge with the
present Southeastern scales at 421 miles, "hence there will be no abrupt
Jump for distances above 420 miles..?
Refleds Truck Rates.
"The general level of these scales," the petitioners pointed out, "reflects
substantially the level of rates charged by the more responsible trucking
lines except for the shorter distances the scales are slightly higher than
those of such truck lines,but it is the thought of the shippers and carriers
that this difference may not seriously impair the ability of the carriers
to obtain a fair portion of the traffic because of certain privileges which
will be asenable on the rail movements."
Aug. 20 1932
Financial Chronicle
The new scales provide for rates on class A, common or ordinary cotton,
not compressed, ranging from 7 cents per 100 pounds for 25 miles to 37
cents per 100 pounds for 240 to 420 miles; class B, with privilege of compression in transit, ranging from 19 cents for 25 miles to 59 cents for 420
miles; class 0, compressed cotton, from 7 cents for 25 miles to 47 cents
for 420 miles.
Rates on Cotton Seed Reduced in Texas.
According to Austin (Tex.) adviees Aug. 11 to the "United
States Daily" the Texas Railroad Commission has authorized
the railroads in the State to reduce freight rates on cotton
seed by 33 1-3% to meet truck competition.
Freight
Forty-Fourth
Anniversary
of Hornblower & Weeks.
Weeks, nationally known investment and
brokerage house, observed on August 6, the 44th anniversary
of its establishment, the original firm having started in
business on Aug. 6 1888. The firm was founded by Henry
Hornblower (still active in the firm's affairs and senior
partner) and the late John W. Weeks, its first office being a
single room in the old Merchants Exchange Building at
51 State St., Boston. It had but one employee, James J.
Phelan, now one of the senior partners.
At its founding the firm had membership only in the Boston
Stock Exchange. This was followed later by memberships
in the leading exchanges of the country, until now the firm
has three seats on the New York Stock Exchange, three
on the Boston Stock Exchange, and memberships in the
Chicago, Cleveland, Philadelphia, Pittsburgh and Detroit
Stock Exchanges, and the New York and Chicago Curb
Exchanges. It also has a membership in the Investment
Bankers Association of America, Ralph Hornblower being
a member of its Board of Governors.
Hornblower & Weeks have nine offices, all inter-connected
with a private wire system in Boston, New York, Chicago,
Detroit, Cleveland, Pittsburgh, Philadelphia, Providence,
Rhode Island and Portland, Maine.
The present personnel of the firm of Hornblower & Weeks
with their date of entry into the firm follows:
Hornblower &
Henry Hornblower, Boston, 1888.
James J. Phelan, Boston, 1900.
Edward L. Geary, Boston, 1902.
John W. Prentiss, New York, 1906.
Charles T. Lovering, New York, 1910.
Ralph Hornblower, Boston, 1913.
James A. Fayne, New York, 1917.
James S. Dunstan, New York, 1917.
Herbert C. Sierck, New York, 1917.
Paul B. Skinner. Chicago, 1917.
Percy W. Brown, Cleveland, 1923.
Alfred II. Meyer, New York, 1924.
F. Dewey Everett, New York, 1929.
Edward V. Jaeger, New York, 1929.
W. David Owen, Chicago, 1929.
James J. Phelan Jr., New York, 1929.
Henry B. Dearborn, New York, 1929,
Proposed Merger of Advertising Agencies of Albert
Frank & Co. and Rudolph Guenther-Russell Law,
Inc.
Announcement was made on Aug. 11 that contracts had
been signed, subject to ratification by their respective stockholders, by controlling interests of Albert Frank & Co. and
Rudolph Guenther-Russell Law, Inc., under the terms of
which the two concerns will be merged. Special meetings
of stockholders of both companies will be called to ratify
the merger which is scheduled to take effect early in September. Both agencies have been for many years prominently
identified with financial advertising, maintaining offices in
the leading financial centers of the country, and representatives abroad. An announcement says:
The combined agencies will service several thousand clients, including
investment banking institutions, banks, stock exchange firms, insurance
companies, public utility companies, many of the country's leading industrial
corporations and transportation companies as well as a large number of
national accounts in the field of general advertising.
Albert Frank & Co., one of the oldest advertising agencies in the country,
was established in 1872 by Albert Frank, then a banker, who recognized
in advertising an unexploited field and determined to develop it. The
company from the outset did an international business, numbering many
of the leading banking firma, steamship, companies and insurance companies among its clients. The present name was adopted in 1893 when
James Rascovar joined the firm. He became its head upon the death of
Mr. Frank in 1901, serving as President of the company, which he incorporated, until his death in 1916 when Frank J. Reynolds, grandson of the
founder, was elected to the Presidency which he has since occupied.
Rudolph Guenther-Russell Law, Inc., represents a consolidation in 1919
of Rudolph Guenther, Inc., and Russell Law. The advertising business of
Rudolph Guenther was established in 1897 and the Russell Law advertising agency was established in 1913. In 1917 Russell Law advertising
agency acquired the Doremus & Morse agency and in May 1919 a consolidation was effected between Rudolph Guenther. Inc.. and Russell Law.
The new company will be known as Albert Frank-Guenther Law, Inc..
and the main office of the company will be in the new 60 Wall Tower Building, where they will occupy the entire 24th floor. Branch offices will be
maintained in Boston, Philadelphia, Chicago and San Francisco, with
correspondents in London and Berlin.
Financial Chronicle
Volume 135
Rudolph Guenther will be Chairman of the Board; Frank J. Reynolds,
President; Russell Law, Chairman Executive Committee; John H.Schwanlug, First Vice-President; S. A. Speake, Controller; James McKay, Treasurer; Robert J. Herta, Vice-President and Secretary, and E. G. McArlie,
Assistant Secretary.
The board of directors will be composed of George Borst; Curtis N.
Browne; Victor J. Cevasco; Emmett T. Corrigan; Frank D. Cruikshank;
Mr. Guenther; Mr. Herta ; E. W. Kimmelberg; Messrs. Law, Reynolds,
Schwarting, and Louis H. Strouse.
The Executive Committee will consist of Messrs. Borst, Cevasco, Corrigan, Guenther, Herts. Law, Reynolds and SchwartIng.
In addition to their completely equipped servicing departments, the
company will own and operate a large typographic plant and printing facilities. An official staff of 42 account executives will direct the advertising
activities of the various accounts with which they have been long identified.
New Plans for Reopening of Federation Bank and
Trust Co. of New York—Owen D. Young Group
Reported Supplying $1,000,000 of Required Funds
of $1,500,000.
The stockholders of the closed Federation Bank and
Trust Co. of New York, at a special meeting on Aug. 15
in the Hotel Pennsylvania, this city, adopted a new reorganization plan which virtually insures the reopening of
the bank within the next three weeks. As to the new plan
the New York "Times" of Aug. 16 said:
Frank X. Sullivan. of the Board of Transportation and attorney for the
New York State Federation of Labor, also a member of the reorganization
committee of the bank, told the stockholders that the 51.500.000 necessary
before the bank could reopen its doors was assured. He said that of
this amount 81,000,000 is being provided through Owen D. Young, who
with a number of other industrialists has been interested in having the
bank reopen for business, and the remaining $500.000 by labor groups.
The money and the petition for the reopening of the bank, Mr. Sullivan
declared, will be ready for presentation to State Superintendent of Banks,
Joseph A. Broderick, on Friday (Aug. 20).
As soon as Mr. Broderick approves the petition it will be presented to
the Supreme Court, as approval there must be obtained before the bank
may resume business.
Young Offer Detailed.
Mr. Sullivan in outlining the efforts made to obtain the capital necessary
to have the bank reopen its doors said that Mr. Young had on deposit at
the close of business yesterday the sum of $965,000, and that he had given
assurance the remaining $65,000 would be on hand before Friday.
He said that Mr. Broderick had set Friday as the last day on which he
would wait for the raising of the necessary money with which to reopen
the bank. If it were not forthcoming on that day the stockholders would
be assessed $100 a share and the process of liquidating the assets of the
bank, for the benefit of depositors and creditors would then start, Mr.
Sullivan told the stockholders.
Mr. Sullivan said that the friends of labor had subscribed the $500,000
and the industrialist group had raised the necessary $1.000.000. In
order to put the reorganization plan through, he stated, it was necessary
for the stockholders to adopt a resolution to reduce the par value of the
outstanding stock from $20 to $10 per share, and to authorize instead of
47.500 shares the issuance of 32.500 shares of capital stock of the bank,
75,000 shares to be sold at $20 per share, to realize the 51.500.000, and
7,500 shares to be given to present stockholders share for share in lieu
of their old shares.
Resolution Is Adopted.
The resolution was unanimously adopted. Mr. Sullivan, in explaining
the reason it was necessary to adopt the resolution, said in part:
This modification Is required by reason of the final appraisal of the
assets of the bank. The directors of the bank have already been elected.
Industry has on deposit in the Chase National Bank approximately $1,000,000 as its contribution; other friends of labor as well as labor itself have
on deposit approximately $500.000, which new capital together with the
assets of the bank will constitute the holdings of the institution after its
opening. This new capital structure involves $1.500.000, which was the
capital structure of the Federation Bank and Trust Co. as it existed for
many years.
At this recessed meeting, the proxies heretofore given the Proxy Committee by the stockholders will be utilized to vote upon these questions,
except in those instances where stockholders express the desire to withdraw said authority from the Proxy Committee. While many complicated and involved problems due to general economic conditions have
presented themselves to your committee and have disappointed your
committee as well as stockholders and depositors of the bank..we feel
assured with the adoption of these proposed changes to the plan of reorganization that the institution will open to resume business without
further delay and will save an assessment of $100 per share for each share
of stock now held by the old stockholders.
When the Federation Bank and Trust Co. was closed in October 1931
It had 30.000 depositors and its deposits on Sept. 29 were 512,170.000.
The bank was the largest bank founded with labor union support and
was established in 1923 by Peter J. Brady. labor leader, who was killed
in an aviation accident last September on Staten Island.
Under the plan to reopen the bank the depositors will have available
immediately two-thirds of their deposits. For the remaining third they
will receive time certificates of deposit payable in two years and bearing
Interest at the rate of 2% annually.
John Sullivan, President of the New York State Federation of Labor,
said that the industrialist group as well as the labor group had been working
strenuously for weeks to get the plans in order so that the bank could
function again. He asserted that the Banking Department had already
drawn up the assessment notices when the reorganization committee had
obtained the additional time until Friday in which to complete its plans
Prospective Directors Listed.
The seven industrialists and the seven labor leaders proposed as directors
of the reopened bank are:
J. Homer Platten,.Westinghouse Electric & Manufacturing Co.
Phillip D. Reed, General Electric Co.
Allston Sergeant. Campbell Metal Window Co.
Charles J. Hardy, American Car & Foundry Co.
Louis A. Zahrn. General Food Corp.
Jeremiah D. Maguire. Industries Development Corp.
Richard E. Dwight. Hughes. Shurman, Dwight. lawyers.
William Green, President, American Federation of Labor.
Edward W. Canavan, President, International Association of Musicians
of North America.
Edward W.Edwards, President, New York State Allied Printing Trades
Council.Alt
1279
John Sullivan, President, New York State Federation of Labor.
Louis Gebhardt, President of New York Building Trades Council.
John J. Mulholland, Vice-President, Central Trades and Labor Council.
Frank X. Sullivan, Attorney, New York State Federation of Labor.
The Federation Bank and Trust Co. will be the second of the recentlyclosed banks in this city to reopen. The first was the Chelsea Bank and
Trust Co., which reopened June 4 1931, as the Mercantile Bank and
Trust Co.
Other items regarding the proposed reorganization of the
Federation Bank and Trust appeared in these columns
May 28, page 3926, and June 4, page 4098.
ITEMS ABOUT BANKS, TRUST COMPANIES, &c.
Arrangements were made Aug. 16 for the sale of a New
York Stock Exchange seat at $150,000, up $30,000 from the
preceding sale, Aug. 5.
Arrangements were made, Aug. 15, for the sale of a New
York Curb Exchange membership at $36,000, an increase
of $7,500 from the last previous sale, Aug. 5.
The New York Cotton Exchange membership of Gustave
Reinhart was sold, Aug. 17, to Daniel Schnakenberg for
another for $17,500, an increase of $3,500 over the last
previous sale, Aug. 10.
The membership of Erie L. Lazarus in the Rubber Exchange of New York, Inc., was purchased, Aug. 19, by
I. J. Louis, of E. J. Schwabach & Co., for another at $950,
an advance of $50from the last previous transaction, Aug.12.
The second membership of Edmondo Gerli in the National
Raw Silk Exchange was sold, Aug. 8, to E. J. Schwabach;
for another, for $1,000, an increase of $100 compared with
the last previous sale.
Arrangements were made, Aug. 11, for the sale of a
National Metal Exchange membership for $800, an increase
of $50 over the last previous sale, Aug. 10.
Arrangements were completed, Aug. 16, for the sale of a
Chicago Stock Exchange membership fo'r $6,000, up $1,250
from the last previous sale, Aug. 6.
The petition of the members of the New York Cotton
Exchange for a ballot on making September 3, the Saturday
preceding Labor Day, an Exchange holiday, was denied by
the Board of Managers of the Exchange on August 15.
At a meeting of the directors of the Grace National Bank
of New York on August 18,a dividend of 214% was voted
payable on September 1 1932 to stockholders of record August
29 1932. This will make a total of 734% paid this year. The
bank's previous semi-annual rate was 5%.
On August 17 the stockholders of the Bancomit Corporation
voted to dissolve the Corporation. At the end of last year it
,000,000 said the New
had resources of approximately
York "Sun" of Aug. 17 which further stated:
The corporation has outstanding in the hands of the public 40,000 shares
of A stock of no par value and 120,000 shares of common, also of no par.
The dissolution will bring about a distribution of $14 a share on both classes
of stock.
The same paper noted that the Bancomit Corporation was
organized by the Banca Commerciale Italiana Trust Company
of this city in 1928 as a finance and security company to
organize affiliations of the Banca Commerciale Italiana of
Milan, Italy, largest Italian bank and "to participate in
syndicate operations both domestic and foreign and to invest
and trade in securities." From the same paper we likewise
quote:
A statement to the stockholders explaining the dissolution reveals that
the Bancomit Corporation disposed of its principal assets, stock in the
Banca Commerciale Italiana Trust Companies of New York. Boston and
Philadelphia, to the Bence Commerciale Italiana of Milan. The statement
to stockholders says in part:
"It well known that security companies affiliated with banking Institutions have been requested by the State banking authorities to dissolve such
companies, and special legislation has been and in the future will be Proposed with a view to separate and force the dissolution of such affiliated
security companies. Furthermore, the collapse of the security markets and
the state of depression existing In all countries the world over have practically eliminated the possibility of operating your company with adequate
return to the stockholders. In view of the above...directors feel that the
program which was set forth when the company was organized in 1928
cannot be carried out and that it is against the best interests of all concerned
to continue operations."
The statement sets forth that the Bancomit Corporation acquired stock
In various subsidiaries of the Bence Commerciale Italiana of Milan besides
certain American securities, and that it owned practically the entire capital
of the Banca Commerciale Italians Trust Company of Boston and of a
similar institution in Philadelphia, with about 25% of the stock of the
Banat Commerciale Italians Trust Company of this city. These, it Is
pointed out were sold to the Milan institution, while the American securities
sommollewme
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Financial Chronicle
were disposed of at prices more favorable than were ruling at the time of
sale. The stocks of the B. C. I. trust companies in New York, Boston and
Philadelphia were sold below cost, though above book value, taking into
consideration securities portfolios at market prices. Holdings of Bancomit
In foreign affiliates of the Milan bank were taken by the latter at cost to the
Bancomit Corporation.
The payment of a dividend of 15% to the depositors of the
American Union Bank of New York City was authorized on
Aug. 13 by Supreme Court Justice Alfred Frankenthaler.
It was announced on Aug. 15 at the office of the New York
State Banking Department that more than 15,000 depositors
and creditors of the bank will receive checks aggregating over
$700,000 representing the 15% dividend. In its issue of
Aug. 15, the New York "Herald-Tribune" said:
The liquidation is being conducted by the Manufacturers Trust Co. under
the supervision of the State Department of Banks,the assets of the Amercan
Union having been turned over to the Manufacturers Trust in September
1931. Under the transfer plan depositors were given pcsssion of 50%
of their funds in November 1931, and were to receive additional funds as the
liquidation progressed. The present payment of 15% brings the total
payments to date to 65%. The first payment aggregated $3,868,826.
At the time of its closing the American Union Bank had on deposit in
excess of $7,000,000. It had listed resources of $15,638,673. of which
$7.213.457 was in unsecured loans and discounts. It was closed at the same
time as two other institutions. the International-Madison Bank and Trust
Co. and the Times Square Trust Co., which also were taken over by the
Manufacturers Trust for liquidation. The depositors of the other two
banks, however, have not yet received any additional payments on their
funds beyond the so% made available to them at the time the Manufacturers Trust took the banks over.
Items regarding the American Union Bank appeared in
our issues of Sept. 19 1931, page 1869; Oct, 17, page 2555;
Oct. 24, page 2711, and Oct. 31, page 2866.
Daniel J. Rogers, who resigned about two months ago as
Signing Officer in the Trust Department of the Chase
National Bank of New York, died on Aug. 12. He was 71
years old. Mr. Rogers was formerly connected with the
Fourth National Bank. This institution was taken over by
the Mechanics and Metals National Bank, which in turn,
was absorbed by the Chase National Bank.
The probability that a second dividend will be paid soon
to the depositors of the closed Amherst Dank of 'Williamsville, N. Y., is indicated in the following, which appeared
in the Buffalo "Courier" of Aug. 12:
Tuesday, Aug. 24, has been set as the date for presentation of all
preferred claims against the closed Amherst Bank, 5533 Main Street, Williamsville. Claims are to be presented at a special term of the Supreme
Court at 10 o'clock.
With satisfaction made for all preferred claims, the liquidation is
expected to proceed to the second dividend. No announcement has been
made as to the amount of the dividend nor the date, although officials say
it should be near Sept. 5.
After the settlement of all claims made to the Supreme Court, Arthur
D. Rooney, Jr., Special Deputy in charge of the liquidation, will make
application to the Court for the payment of the dividend. Ten days must
elapse before the petition can be granted.
The Amherst Bank was closed Friday, Oct. 23 1931, by order of the
State Banking Department. The first dividend of 50% was paid
April 11 1932.
That Charles A. Miller has resigned as President of the
Savings Bank of Utica, Utica, N. Y., and has been succeeded
by Roy C. Van Denbergh, was reported in Associated Press
advices from that city on Aug. 16, which said:
Marks A. Miller, who took the place of Charles G. Dawes as President
of the Reconstruction Finance Corp., has resigned as President of the
Savings Bank of Utica, it was announced to-day.
Mr. Miller's resignation followed a ruling by the Attorney General which
prohibited his official connection with or receiving compensation from
any bank while he is in his present position with the Government.
Roy C. Van Denbergh succeeds him as President of the bank.
Since Mr. Miller's assignment to the Reconstruction Finance Corp. last
winter, he has been on leave of absence from the savings bank. He will
remain a trustee.
Elmer A. Stevens, former Vice-President of the Atlantic
National Bank of Boston, Mass., and former State Treasurer of Massachusetts, died at his home in West Somerville, on Aug. 11, after a long illness. He was 70 years old.
• Mr. Stevens, before being State Treasurer, had been in the
two houses of the Legislature. While in the Senate be served
on some of its most important committees. He was instrumental in creating the State Department of Boiler Inspection
and the State Forestry Department. Born in Anson, Me.,
he went to Boston as a young man and entered the provision
business. He served in the city government in 1895 and was
elected to the House of Representatives in 1896. Then came
service in‘the Senate and as State Treasurer. At the end
of his term as State Treasurer he entered the banking
business.
Joseph A. Lamper, heretofore a Vice-President of the
• Manufacturers' National Bank of Lynn, Mass., and a director
for the past 18 years, was recently advanced to the Presidency of the institution to succeed Walter M. Libby, while
Aug. 20 1932
at the same time William Johnson, one of the directors, was
appointed Vice-President in lieu of Mr. Lamper.
The directors of the proposed Bank of Whitehouse, Whitehouse Station, N. J. (the organization of which to replace
the closed First National Bank of Whitehouse Station, was
noted in our issue of June 11; page 4271), have appointed
James A. Knowles, President and Alvah P. Ramsey, VicePresident, to serve until a meeting of the stockholders in
January next, according to a dispatch from Whitehouse to
the Newark "News" on Aug. 16. The advices, continuing,
said:
The new bank has applied to the State Department of Banking and
Insurance for a charter and a hearing on the application as scheduled at
Trenton, Sep. 7 at 11 A. IL Those who signed the application for the
charter are Grant Davis, William J. Fenner, John C. Gulick, Mr. Knowles,
William J. Leyden Charles P. Oliver, Mr. Ramsey, George E. Reitze, G. A.
Skillman and Herbert Van Pelt.
The amount of the capital stock of the new bank and surplus to be
paid in will be $85,000. There are 2,000 shares at $42.50 and many subscriptions for the stock are being received. A bid has been submitted to
J. D. Colyer, receiver of the First National Bank of Whitehouse Station,
which is now in liquidation, for the purchase of the bank building, including fixtures and equipment. It is planned to set up the new bank there.
John Gracey Kelly, Chairman of the Board of the Braddock National Bank of Braddock, Pa., and•one of the oldest
bankers in Western Pennsylvania, died in Pittsburgh on
Aug. 12. The deceased banker, who was 84 years old, was
born in Eddyville, Ky., and received his education at Bardstown College in that State. Following the close of the Civil
War Mr. Kelly went to Pittsburgh, where at the age of 19
years he began his banking career in the First National Bank
of that city. Subsequently, when the Edgar Thompson Steel
Co. was formed Mr. Kelly moved to Braddock, where he
established the Braddock National Bank, the institution
with which he was to be affiliated for the remainder of his
life. Mr. Kelly was also associated with his brother, W. C.
Kelly, in the Kelly Axe & Tool Works of Charleston, W. Va.,
which combined recently with the American Hoe & Fork Co.
of Cleveland, Ohio.
Concerning the affairs of the Mechanics' Trust Co. of
Harrisburg, Pa., which on Oct. 23 1931 turned its affairs
over to the Pennsylvania State Banking Department, H.
Bruce Taylor, former President of the institution, on Aug.
12 was placed under arrest for alleged misapplying and misappropriating nearly $150,000 of the bank's money, according to a dispatch from Harrisburg by the Associated Press
on that date.
With reference to the affairs of the defunct Homewood
People's Bank of Pittsburgh, Pa., the Pittsburgh "Post
Gazette" of Aug. 12 1932 contained the following:
A petition was filed in Common Pleas Court yesterday by Secretary of
Banking William D. Gordon for leave to sell the property at 618 North
Homewood Avenue, of the Homewood People's Bank, in possession of the
State Banking Department since last Oct. 21. The action is to aid in the
reorganization of the bank. The proposed sale is to the new Hotnewood
Bank at Pittsburgh, for $75,000, declared a fair offer for the property,
appraised originally at $90,000.
Our last reference to the affairs of this bank appeared in
our issue of July 23 1932, page 582.
The defunct Overbrook National Bank of Philadelphia,
Pa., beginning Thursday last, Aug. 18, is paying a dividend
of 10% to all creditors, mostly depositors, is learned from
the Philadelphia "Ledger" of Aug. 17, from which we also
take the following:
The institution closed its doors May 16, 1931, with outstanding liabilities of $3,288,890, which would indicate that tomorrow's (Aug. 18)
distribution will total more than $300,000. On Feb. 22 the bank made a
first dividend disribution of 25%.
Announcement of the second dividend was made last night by L. IL
Reed. receiver of the bank, who said:
"The Comptroller of Currency of the Unied States has authorized the
distribution of a second dividend of 10% on all claims which have been
established against the Overbrook National Bank, of Philadelphia, prior
to June 7 1932.
"Payment of this dividend will be made by United States Treasury
checks which will be ready for distribution at 9 A. IL, Aug. 18. Each
claimant must present his receiver's certificate of proof of claim to L. B.
Reed, receiver, at the 60th and Master Streets office of the bank, at
which time the dividend check will be delivered. No checks will be issued
without the presentation of this receiver's certificate.
"Future dividends to creditors will depend entirely upon whatever recovery is made from the remaining assets of the bank."
The failure of the Overbrook National Bank was reported
in the "Chronicle" of May 23 1931, page 3826, and our last
reference to its affairs appeared Sept. 12 1931, page 1719.
That the Home National Bank of Union City, Pa. (closed
since Jan. 16 of the present year) is to reopen for business
on Sept. 1, when it will pay a 50% dividend to its depositors,
Volume 135
Financial Chronicle
Is indicated in the following Associated Press dispatch from
Erie, Pa., on Aug. 16:
Thirteen hundred depositors of the closed Home National Bank of Union
City, with deposits aggregating $750,000, will receive a 50% dividend
when the bank reopens Sept. 1, it was announced to-day. A further
dividend will be paid when conditions justify.
The Philadelphia "Ledger" of Aug. 18 stated that Dr.
William D. Gordon, State Secretary of Banking for Pennsylvania, on Aug. 17 resorted to Court action in an effort to
collect $578,332 for the depositors of the defunct Northwestern Trust Co., of Philadelphia. The paper mentioned
continued in part as follows:
The amount which he seeks to recover represents loans made to eleven
firms and individuals.
The action was taken in the Common Pleas Court by Attorneys David
W. Niesenbaum and Edwin M. Abbott, representing the Banking Department. The funds were advanced principally in a number of real estate
transactions.
Our last previous reference to the affairs of this bank,
which was taken over by the Pennsylvania State Banking
Department in July of last year, appeared in our Aug.6 1932
issue, page 922.
A plan for handling the affairs of the Lancaster Trust
Co., of Lancaster, Pa., which closed early this year, was laid
before Governor Pinchot of Pennsylvania by the citizens of
Lancaster on Aug. 17. A dispatch from that city in reporting the matter furthermore said:
The plan calls for the Fulton National Bank, this city (Lancaster), to
take over a certain percentage of the assets of the Lancaster Trust Go.
and, in turn, make available to depositors of the closed bank a certain
percentage of their deposits immediately.
Whether the plan is adopted depends upon the Governor, who will act
as arbitrator in a dispute between the reorganization committee of the
Lancaster Trust Co. and the State Banking Department. The point in
dispute was not explained.
Members of the committee would not say how much will be made available for depositors if the plan is approved, but estimates vary from 40 to
50%. A portion would be in cash and the remainder in some form that
could be convertible into cash or available as collateral.
The assets of the bank not taken over by the Fulton would be held by
trustees to be elected by depositors.
The Park Bank of Baltimore, Md., failed to open its doors
on Aug. 12. Associated Press advices from Baltimore, reporting the failure, stated that the directors the previous
night had placed the bank's affairs in the hands of the State
Bank Commissioner for Maryland after a meeting with the
Baltimore Clearing House and the Commissioner. The institution, it was stated, was capitalized at $700,000 and had
a paid-in surplus of $625,000, and, according to its June 30
report, total resources of $6,542,426. The Baltimore "Sun,"
in its issue of the next day (Aug. 13), gave the following
additional Information:
George %V. Page, State Bank Commissioner, yesterday (Aug. 12) was
named receiver for the closed Park Bank, on an order signed by Judge
Charles F. Stein in the Circuit Court. Bond was fixed by the Court
at $100,000.
The receivership proceedings were filed in court in the name of the
State of Maryland by Attorney-General William Preston Lane and Assistant
Attorney-General Willis It. Jones. In the petition the State officials cited
that the bank, by resolutions adopted by the directors at a meeting Thursday night, had been closed and turned over to the Bank Commissioner.
The bank filed its assent to the receivership order.
Work was begun yesterday by the staff of the Commissioner to prepare
an audit of the resources and liabilities of the bank. Until this btatement
is prepared for filing with the Court by the receiver no estimate of how
much will be available for the depositors in the way of dividend out of the
assets could be made, it was stated.
John D. Hospelhorn, Deputy Bank Commissioner, estimated that it would
take several weeks to complete the audit.
"Until we have gone thoroughly into the books of the bank and have
carefully examined its assets and liabilities it will be impossible to say
anything about the bank's condition," Mr. Hospelhorn said. "We, of
course, will make every effort to complete and issue such a statement at
the earliest possible moment."
Officials of the bank conferred with the Bank Commissioner yesterday,
but refrained from making any detailed comment upon the bank's affairs.
Webster Bell, the President, spent most of yesterday in conference.
Mr. Page declared that until his staff has been able to complete its
examination of the bank he did not care to make any statement.
--6—.
Announcement was made on Aug. 15 by W. T. Marfield,
receiver for the closed National Bank of Tornot, Ohio, that
a third dividend, amounting to 14%, would be paid immediately to the depositors of the institution, according to
a press dispatch from Steubenville, Ohio, on the date named,
printed in the Cleveland "Plain Dealer." Mr. Marfield, was
reported as saying that the dividend was made possible
through a loan secured from the Reconstruction Finance
Corp.
The Farmers' & Citizens' Banking Co. of Monroeville,
Ohio, which closed last October, was scheduled to reopen
on Aug. 9 under a new regime, according to Monroeville advices on Aug. 3, printed in the Toledo "Blade." Frank
1281
Knapp, President of the local telephone company, and President of the Union Bank & Savings Co. of Bellevue, Ohio,.is
President; Waldo Mench, Cashier, and George Scheid, Assistant Cashier. The dispatch, continuing, said:
On the opening date large depositors will receive 10% of their claims,
and all Christmas savings accounts and deposits of $125 or less will be
released. Depositors will be given savings certificates amounting to 60%,
the remaining 40% to be waived until such time as a Board of Trustees
can realize upon slow accounts that have been set aside. Dividends of
former stockholders who have subscribed for the new stock, also will be
credited to the waiver fund for a period of five years. Sponsors of the bank
predicted that depositors eventually will be paid in full.
A small Ohio bank, the Union Banking Co. of West Mansfield, was taken over by the State Banking Department on
Aug. 15, according to Associated Press advices from Columbus, Ohio, on that date, which added:
The State will liquidate the bank's assets. The bank was capitalized
at $25,000 and had resources of $131,000. L. T. Storms was President.
Alliance, Ohio, advices on Aug. 16 to the Pittsburgh "Post
Gazette," stated that reorganization of the closed City Savings Bank & Trust Co. of Alliance had been perfected on that
day when officers and directors were elected. This action
was taken following the Court approval of the plan for reopening the institutibn on Monday, Aug. 22. Officers appointed for the new organization, as named in the dispatch,
are as follows: W. H. Ramsey, Chairman of the Board of
Directors; S. L. Sturgeon, President; Mack Hopkins, Executive Vice-President; John Eyer, Vice-President; J. Oatis
Wilcox, Vice-President; C. M. Baker, Secretary and Cashier,
and E. H. Shinn, Assistant Cashier and Trust Officer.
That the Commercial National Bank of Coshocton, Ohio
has absorbed the Central State Bank of that city and in turn
has become affiliated with the Bancohio Corp. appears from
the following Associated Press dispatch from that city on
Aug. 12:
In what was considered the most important financial transaction here
in years. the Commercial National Bank has purchased the Central State
Bank. and, in turn affiliated itself with the Bancolaio Corp., George W.
Cassingham, Commercial President. announced Thursday.
Friday morning (Aug. 12) the CommercialiNational assumes all business
of the Central State Bank. Both State and Federal approval tentatively
have been obtained.
A Columbus, Ohio dispatch on Aug. 12 to the Wall Street
"Journal" contained additional information as follows:
Bancoldo Corp. has absorbed the merged Commercial National & Central
Bank of. Coshocton. the largest bank in its county, with resources of
$2.400.000. The acquisition increases Bancohio banks to 14.
Frank D. Stalnaker, President of the Indiana National
Bank of Indianapolis, Ind., and for many years a financial
leader in that city, died on Aug. 9 after a prolonged illness.
The deceased banker, who was 73 years of age, was born in
Bloomfield, Iowa, and received his early education in the
public schools of Sioux City, Iowa, and Cambridge City, Ind.
Subsequently he attended a business school in Indiapanolls,
and in that city began his banking career. After holding
positions in various banks, Mr. Stalnaker was appointed
receiver for the Fletcher & Sharpe Bank,the affairs of which
were wound up in 1893. In the meantime, he, together with
James W. Lily, had founded the hardware firm of Lily &
Stalnaker, although Mr. Stalnaker still remained in the
banking business. In June 1906 he became President of the
Capital National Bank, serving in that capacity until July 1
1911, when the institution was merged with the Indiana
National Bank. Mr. Stalnaker then assumed the Presidency
of the consolidated bank and held the office continuously
until his death. Among other numerous activities, Mr.
Stalnaker was Chairman of the Reconstruction Finance
Corp. for Indiana, President of the Indianapolis Clearing
House, Vice-President of the Coburn Warehouse Co., director and member of the executive committee of the Union
Trust Co., director of the Indiana Bell Telephone Co. and
the Indianapolis Gas Co., and a member of the Board of
Governors of the Indianapolis Board of Trade.
The consolidation on Aug. 15 of two La Fayette, Ind.,
banking institutions, the National Fowler Bank and the City
Trust Co., under the title of the Fowler Bank City Trust
Co., was indicated in a press dispatch from La Fayette,
printed in the Indianapolis "News." The advices went on
to say:
Officials explained the merger was brought about in the interest of
economy. Burr S. Swezey, formerly with the City Trust Company, will be
President of the merged bank.
The Chicago "Journal of Commerce" of Aug. 15 stated
that the Pullman Trust & Savings Bank, at 11th Street and
1282
Financial Chronicle
South Park Avenue, that city, had acquired the business of
the Burnside Trust & Savings Bank, at 93rd Street and
Cottage Grove Avenue. The paper mentioned went on to
say:
The former institution has taken over all assets and assumed all of the
deposits. Catrimnes DeHaan, President of the Burnside Bank, will become
a director of Pullman Trust & Savings Bank.
Concerning the affairs of the defunct Ferndale State
Bank, Ferndale (P. 0. Detroit, Mich), which closed Mar.
14 1931, George H. VanBuren, the receiver, has announced
that a total of 25% of the institution's deposits has been
returned to the depositors, according to the "Michigan Investor" of Aug. 13, which added that the latest dividend of
5% had been paid some days previously.
It is learned from the "Michigan Investor" of Aug. 13
that at a meeting held Aug. 10 of the People's Wayne County
Bank of Dearborn, Mich., John R. Bodde, Vice-Chairman
of the Board of Directors of the First Wayne National Bank
of Detroit was chosen President of the institution. Wesley
E. Smith, Vice-President and Cashier, will continue as the
active officer in charge of the institution. The paper mentioned, continuing, said:
•
Mr. Smith became identified with the People's Wayne County Bank of
Dearborn when it was organized in 1922, as Assistant Cashier, having
previously been with the Wayne County & Home Savings Bank, Detroit.
He became Cashier of the Dearborn bank in 1927, and very recently was
given the title of Vice-President in addition to that of Cashier.
People's Wayne County Bank of Dehrborn is affiliated through the
Detroit Bankers' Co. with First Wayne National Bank & Detroit Trust Co.,
which, together with the seven other affiliated banks located in communities adjacent to Detroit, have resources in excess of $550,000,000.
That the People's State Bank of Flushing, Mich., which
had been closed since Sept. 11 1931, would reopen Aug. 15
was reported in the "Michigan Investor" of Aug. 13. New
officers were named as follows: President, Charles N. Talbot; Vice-President, Albert E. Ransom; Cashier, Mylo Ragan, and Assistant Cashier, Mary Ann Huggins.
The Manistique Bank of Manistique, Mich., which has
been closed since April 19 last, is expected to reopen for
business towards the end of the month, according to the
"Michigan Investor" of Aug. 13.
The "Michigan Investor" of Aug. 13 contained the following with reference to the closed Olivet State Bank at Olivet,
Mich.:
James Shackleton, Vice-President and Cashier of the Bank of Kalamazoo,
Mich., addressed the depositors of the Olivet (Mich.) State Bank at a
meeting in the town's high school auditorium Tuesday evening (Aug. 9),
explaining the plan for reorganization recommended following the recent
closing of the bank. This plan, which virtually declares a five-year
moratorium with a certain percentage to be drawn out each year, includes
the setting aside of 50% as a trust fund and the existence of a committee
from the depositors working with the stockholders and banking commissioner, was voted for adoption and will become effective upon the signing of contracts by 85% of the depositors.
The Union National Bank of Elizabethtown, Ky., capitalized at $50,000, was placed in voluntary liquidation on Aug.
5 1932. The institution was absorbed by the First-Hardin
National Bank of Elizabethtown.
Concerning the affairs of the defunct First National Bank
of Louisburg, N. C., which closed its doors last December,
a Louisburg dispatch on Aug. 11, printed in the Raleigh
"News and Observer," stated that N. S. Bennett, receiver for
the institution, had announced on that day that he was
prepared to pay an initial dividend of 50% to the depositors.
We quote further from the dispatch as follows:
The announcement was gladly received here. The payment will come
at a time when it is greatly needed and will bring about a decided easing
of the financial situation in Franklin County. Mr. Bennett requests that all
depositors calling for their dividend checks will bring their certificates of
claim.
A press dispatch from Durham, N. C., on Aug. 11, appearing in the Raleigh "News and Observer," concerning the
First National Bank of Durham (the closing of which was
noted in our Jan. 23 issue, page 627) had the following
to say:
If the reorganization of the closed First National Bank of Durham is to
be completed by Oct. 1, the final date for perfection of plans for opening a
new banking institution to take its place set by the Comptroller of the
Currency, the remaining $80,000 In stock subscriptions necessary for
launching the bank must be subscribed within the next few days, stockholders of closed bank, in session here, were warned by Judge R. H. Sykes,
Chairman of the Reorganization Committee.
Three weeks of solicitation have resulted in subscriptions of stock totaling $220,000. Remainder of the $300,000 capital and surplus must be
secured without further delay, Judge Sykes said, if the reorganization is to
be a success.
Aug. 20 1932
A press dispatch from Gulfport, Miss. on Aug. 15 to the
New Orleans "Times-Picayune" stated:
Banking facilities at Gulfport, which were suspended last November
when the First National Bank closed its doors, were restored that morning
when the Hancock Counilar Bank (head office, Bay St. Louis, Miss.) opened
for business in the old First National Bank building at 13th St. and 26th
Ave. Money was transferred to Gulfport from the Long Beach Bank under
a heavily-armed guard from the Gulfport police department. ... Leo W.
Seal. President of the Hancock County Bank, was on duty with his corps
of assistants. S. L. Engman of Bay St. Louis, George Estes of Bay St.
Louis and Miss Hazel E. Murphy of Long Beach. The Hancock County
Bank, established at Bay St. Louis more than a quarter century ago, has
branches at Long Beach and Pass Christian.
___•_
Stockholders of the City National Bank of San Francisco,
Calif., at a special meeting held Aug. 11, ratified the proposed
consolidation of the institution with the Pacific National
Bank of San Francisco, according to the San Francisco
"Chronicle" of the next day, which said:
Under the consolidation agreement City National stockholders will receive
h
one share of Pacific National for each ten shares of City National
Reference was made to the proposed merger of these
banks in our issue of July 9 last, page 246.
Arnold J. Mount,former Pre- sident of the Bank of America,
National Trust & Savings Association, San Francisco, Calif.,
has been elected Executive Vice-President of the Central National Bank of Oakland, Calif., and Vice-President of the
Central Savings Bank, according to San Francisco advices
on Aug. 17 to the "Wall Steet Journal."
Henry F. Cabell, one of
the directors of the Bank of East
Portland, Portland, Ore., was recently appointed President
of the institution to succeed the late H. H. Newhall. Mr.
Cabell is also a director of the First National Bank of Portland. The personnel of the Bank of East Portland is now
as follows: Henry F. Cabell, President; R. M. Dobie, VicePresident and Cashier, and C. H. Johns, Assistant Cashier.
The institution is capitalized at $100,000, with surplus and
undivided profits of $47,519 and has deposits of $694,012
and total resources of $852,150.
The Dominion Bank of Canada (head office Toronto) has
declared a quarterly dividend of $2.50, payable Oct. 1 to
stock of record Sept. 20, placing the issue on a $10 annual
basis, against $12 previously, according to Toronto advices
yesterday, Aug. 19, to the Wall Street "Journal."
Directors of the Bank of N- ova Scotia (head office, Haltf. x, N. S.) have reclared a quarterly dividend of $3.50 a
share, payable Oct. 1 to stock of record Sept. 15, according
to the New York "Evening Post" of Aug. 12. This placed
the stock on a $14 annual basis as compared with the $16
basis fomerly existing, it was stated.
The present month the Bank of Nova Scotia, one of the
important Canadian banking institutions, celebrates the
hundredth anniversary of its establishment. Founded at
Halifax in 1932, the Bank of Nova Scotia has risen from a
local Maritime institution (one of the first of its kind in
Canada) to front rank among Canadian chartered banks.
International in scope, it now ranks fourth in point of
assets among all Canadian banks. Its 330 branches stretch
from coast to coast in the Dominion and include Newfoundland, England, the West Indies and the United States.
In outlining the bank's history, the Montreal "Gazette" of
Aug. 10 (from which the above information is obtained)
went on to say:
The bank, which Mat opened its doors to the public in a room in John
Roman's Building, on Hollis Street, Halifax, in August 1932, was the
first chartered bank of Nova Scotia, its charter being modelled on that
of the Bank of New Brunswick (founded in 1820 and later absorbed by
the Bank of Nova Scotia). The bank is proud of the fact that its
charter was the first to include a clause providing for the double liability
of shareholders—a provision which has now become a fundamental tenet
of the Canadian banking system.
William Lawson, a member for Halifax in the Legislative Assembly of
the province and chief sponsor of the project, was first president of the
bank, which was originally chartered as "The President, Directors and
Company of the Bank of Nova Scotia," a name which it retained until
1874. The bank's first General Manager or Cashier, as the chief executive officer was then called, was James Forman. . .
Dividends Since 1833.
The bank's first annual statement presented to shareholders in February
1833 showed but four liabilities; capital stock paid in £50,000; notes in
circulation, £16,613 lOs ; deposits in the bank, £18,943 13s 10d and
net profits in hand £810 17s 9d. Total assets were £85,808. An item
of £158 8s 8d being the "balance in the hands of the agents of the
bank in New York and London" reflects the dealings in foreign exchange
early undertaken by Canadian banks. The bank declared its first dividend
on July 81 1838, at the rate of 8% per annum.
Expansion Abroad.
The foreign development of the bank is particularly noteworthy. The
bank's first real venture outside the Dominion was to Minneapolis in
Volume 135
Financial Chronicle
1885. In 1889 the bank opened for business in Kingston, Jamaica. This
was the first time in Canadian banking history that a chartered bank
ventured to establish any branch outside Canada, Great Britain or the
United. States. The bank now issues its own notes in that colony, operates
12 branches, and occupies an outstanding position in the financial and
economic life of the island. An equally important move was opening
of a branch at St. John's, Newfoundland. Subsequently, to round out and
expand its operations in the West Indies, the bank opened branches in
Cuba, Porto Rico, and the Dominion Republic. As a result of the development and growth of the bank's business in central and western Canada,
Its chief executive office was moved to Toronto in March 1900.
In its one hundred years of existence the bank has had but six General
Managers. Following Thomas Fyshe came H. 0. McLeod, a Maritimer
whose fight for external inspection for banks (a feature of Canadian banking since 1923) will long be remembered in Canadian banking annals. He
served the bank till 1910, when he was succeeded by H. A. Richardson,
who piloted the bank through the difficult and strenuous days of the
war. On Mr. RIchardson's death in 1923, his place was taken by .7. A.
McLeod, another Maritimer, who this year holds the Presidency of the
Canadian Bankers Association.
Important Mergers.
It was under Mr. Richardson's aegis that three important amalgamations took place. In 1913 the bank absorbed the Bank of New Brunswick,
whose history dated back to 1820, and which was at that time the second
oldest banking institution in Canada. In November 1914, just at the
beginning of the war, the Metropolitan, a well-established Toronto bank,
was absorbed. Founded in 1902 by a group of prominent Toronto business men, the Metropolitan Bank had the distinction of being the only
Canadian bank to start business with a reserve fund equal to its capital
stock, its shares having been sold at a 100% premium. The present
President of The Bank of Nova Scotia, S. J. Moore, was President of the
Metropolitan Bank at the time of the merger.
The third merger was with the Bank of Ottawa, and was consummated
In 1919. Its acquisition proved a valuable asset to the bank and afforded
a wider national banking service to an important clientelle.
Sound Position.
The Bank of Nova Scotia in its last annual statement showed total
assets of $262,496,000. Paid-up capital stock is $12,000,000 and it shows
a reserve fund equal to twice IN capital, namely, $24,000,000. Total
deposits in the statement were over the $200,000,000 mark with cash resources nearly 11% of liabilities to the public, and quick assets nearly
55% of liabilities. The book value of each share of capital stock is $301.
John Rae, a director of the Westminster Bank Limited,
London, Eng., and late Chief General Manager, on Aug. 10
died at Strathpeffer.
THE WEEK ON THE NEW YORK STOCK EXCHANGE.
Interest in the New York stock market this week centered
largely in the railroad shares, which have shown considerable activity and have gradually worked upward to higher
levels. Price movements were generally upward until
Wednesday when the forward swing was checked during the
early afternoon, though it resumed its advance toward the
end of the session. Amusement shares have attracted considerable speculative attention and several members of the
group have pushed forward to the highest levels in several
weeks. On Thursday the market see-sawed back and forth,
until the afternoon when prices rallied and moderate gains
were registered by many of the more active of the trading
favorites, though the dealings were again in small volume.
Specialties were in good demand and industrial shares
gradually moved into higher ground. Call money renewed
at 2% on Monday and continued unchanged at that rate
during the rest of the week.
The market was somewhat firmer as the two-hour session
ended on Saturday, and while considerable irregularity was
apparent as a result of the earlier reaction, most of the
losses of the first hour were cancelled. In the railroad group,
Union Pacific was the weak spot and at one period of the
trading was off about 5 points. Atchison was also down
but the loss was somewhat less and New York Central was
active but erratic. American Tel. & Tel. at 105 was off
13 points and Allied Chemical & Dye moved down to 71
with a loss of about 2 points. Other recessions were Atlantic
Coast Line, 2 points to 193.-; Du Pont, 17
% points to 32%
3;
Radio pref. "A," 33. points to 23; Baltimore & Ohio pref.,
1% Points to 14%; Bethlehem Steel pref., 2 points to 35;
Atchison, 13 points to 423; Coca Cola, 19/i points to 945;
Delaware & Hudson, 6% points to 593; General Motors
19/s points to 12%, and New Haven pref. 2 8 points to 323.
On Monday trading was dull and prices, as a rule, moved
within a narrow range. Railroad shares assumed the leadership early in the day, New York Central moving forward
33% points to 24%,followed by Atchison with a gain of 49/i
points to 463' and Union Pacific with an advance of 49/i
points to 669j. The principal changes of the day were on
the side of the advance and included among others, Air
Reduction, 23/s points to 52%; Allied Chemical & Dye, 4
points to 75; American Tobacco B,23 points to 76; American
s; American Woolen pref.,
Water Works, 2% points to 243/
33. points to 29; Baltimore & Ohio pref., 33/i points to 18;
j. I. Case, 7 points to 53; Delaware & Hudson, 6 points to
653'; General Electric, 2 points to 184; Hercules Powder
pref., 7 points to 843/3; Johns-Manville, 33 points to 263,;
1283
New York & Harlem, 7 points to 117; Norfolk & Western,
4;Public Service of New Jersey, 23 points
23 points to 923
3 Sears Roebuck,25
to 434;
% points to 22%;Southern Pacific,
334 points to 193/i and Westinghouse 23/i points to 34
Stocks moved briskly upward during the early trading
on Tuesday and gains ranging up to 7 or more points were
registered at some period during the session, though most
of these advances were reduced as profit taking slowly
increased. Transactions began to slow up toward the end
of the session, though the tickers continued about seven
minutes behind the dealings on the floor. United States
Steel was one of the outstanding features of the trading as
an opening block of 10,000 shares boosted the price to 45
with an overnight gain of 5 points. Later in the day profit
taking cut this gain in half. Pivotal shares like American
Tel. & Tel., J. I. Case, Allied Chemical & Dye and Eastman
Kodak were in active demand throughout the day. Prominent among the gains of the session were such stocks as
Adams Express pref. 43/i points to 543'; Allied Chemical &
Dye,4 points to 79; American Power & Light pref., 3 points
to 38; Atchison, 334 points to 5034; Bon Ami, 334 points
3; Endicott Johnson,
to 45;Eastman Kodak,234 points to 533/
3 points to 32; Illinois Central pref.,3 points to 20; Louisville
& Nashville, 4 points to 22; New York & Harlem, 6 points
to 123; Norfolk & Western, 7 points to 100; Pacific Tel. &
Tel., 434 points to 783/3; Radio Corp. pref., 5 points to 28;
Union Pacific, 43
4 points to 713/2; United States Steel, 3
points to 433/3; Westinghouse, 434 points to 3834, and
United States Leather pref., 5 points to 65.
Prices were higher during the first hour on Wednesday and
after some hesitation the market became active on the side
of the recession showing losses at the close ranging up to 8 or
more points. The dealings were quite heavy during most
of the session though, on the whole, the turnover was the
smallest in several days. The principal changes were on the
side of the decline and included such active stocks as American
5 points to 5334, American Tobacco
Can which receded 2%
4 points to 11034,
134 points to 75, American Tel. & Tel. 33
Atchison 234 points to 475
/s, J. I. Case 4 points to 52, Columbian Carbon 2 points to 293/3, Delaware & Hudson 334 points
to 64, Homestake Mining Company 25
% points to 11534,
Louisville & Nashville 3 points to 19, Norfolk & Western
4, Union Pacific 4 points to 683/3, United
43( points to 953
States Steel 29/3 points to 40% and Western Union 13points to 323/3.
The market was dull during the early dealings on Thursday
but rallied later in the day and closed with gains ranging
from 1 to 3 or more points after selling off about 2 points
during the greater part of the session. Railroad shares were
fairly firm and a number of modest gains were recorded by
some of the more active issues. Among the changes on the
side of the advance were Allied Chemical & Dye,2 points to
7934, American Power & Light 6 pref. 3 points to 35, Amer.
Tel. & Tel. 234 points to 1123
%, Atchison 23/s points to
49%, J. I. Case 334 points to 55%, Delaware Lackawanna
& Western 334 points to 223/2, Louisville & Nashville 2
points to 21, New Haven pref. 334 points to 35, Norfolk &
Western 27
% points to 99%, Southern Pacific 33/3 pOints to
23, Union Pacific 234 points to 70%, United Piece Dye pref.
5 points to 70 and United States Steel pref. 234 points to 80.
The market opened fairly strong on Friday with leading
stocks up from fractions to a point or more. Railroad shares,
industrial stocks and public utilities were particularly active
and moved sharply upward during the first hour, only to
ease off as the day progressed. Profit taking was apparent
shortly after the noon hour, but the selling was in small
volume. Several further attempts were made to resume the
advance, but these were generally unsuccessful. Most of
the gains were among the preferred stocks while the recessions were generally among the common stocks. The latter
included Allied Chemical & Dye 334 points to 753
4,American Tel. & Tel. 23
4 points to 1095
/
s,Auburn Auto 23
4 points
to 63, J. I. Case 33
4 points to 5134, Coca Cola 3 points to
94 and Western Union 1 point to 313
4. At the close the
market was fairly steady, but trading was extremely dull.
TRANSACTIONS
AT THE NEW YORK STOCK EXCHANGE
DAILY, WEEKLY AND YEARLY.
Stocks,
Railroad
Slate
Number of and Attleell. Municipal if
Week gnded
Shares.
Bonds.
dup. 19 1932.
For'n Bonds.
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Totid
1,756,690
1,908,290
3.612.185
2.874.420
1.784.920
2.168.170
84.502.000
7.357.000
11.272.000
10.360.000
9.084.500
12.015.000
$871.000
1,903.000
2.899.000
2.217.000
2,130.000
2.275,000
14.102.875 854.590.500 812 205 non
United
Ri.DIS
Bonds.
52.170.500
1.188.800
1,154.800
982.000
1,711.500
574.000
Total
Bond
Sales.
37.543.500
10.448.800
15.325.800
13.559.000
12.926.000
14.864.000
87751 son 574 RR, Mrt
Financial Chronicle
1284
Week Ended Aug. 19.
Sales at
New York Stock
Exchange.
1931.
1932.
Stocks-No. of shares.
Bonds.
Government bonds_ -State & foreign bonds_
Railroad & misc. bonds
Jan Ito Aug. 19.
1931.
1932.
14,102,675
7,372,328
250,505,451
384,477,610
87,781,600
12,295,000
54,590,500
81,889,000
12,195,000
28,724,000
$465,290,550
497,332.100
1,033,220,000
$101,089,400
516,153,600
1,144,776.700
$74,867,100 $42,808,000 $1,995,842,650 81,762,019,700
Total
DAILY TRANSACTION.z AT THE BOSTON, PHILADELPHIA AND
BALTIMORE EXCHANGES.
Philadelphia.
Boston.
Week Ended
Aug. 19 1932.
Total
Prey. week revised
Jersey Zinc, 30 to 30%; New York Tel. pref., 111% to 112;
Niagara Hudson Power, 143' to 17; Pennroad Corporation,
23
/i to 23.; Singer Manufacturing Co., 112 to 121; A. 0.
% to 24; Swift
Smith, 29 to 33; Standard Oil of Indiana, 223
& Company, 12 to 13%; United Founders, 13 to 2%
United Gas Corp., 2 to 28% and United Light & Power A,
5% to 8%.
A complete record of Curb Exchange transactions for the
week will be found on page 1311.
DAILY TRANSACTIONS AT THE NEW YORK CURB EXCHANGE.
Baltimore
Shares. Bond Sales. Shares. Bond Sales. Shares. Bond Sales.
1,184
409
1,666
1,519
287
1,076
20,887
20,888
34,130
37,896
19,919
5,520
$5,000
5,000
4,000
2,000
4,000
$37,050
139,240
$20,000
6,141
37,000
853.050
309.669
334.000
14,646
365,000
30,163
29.447
59,643
47,783
29,379
4,933
86.000
8,000
15,000
4,000
2,050
2,000
201.348
367.480
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Aug. 20 1932
33,000
1,000
2,000
1,000
Wee* Ended
Aug. 19 1932
Saturday
Monday
Tuesday
Wednesday
Thursday
Friday
Total
Sales at
New York Curb
Exchange.
Stocks
(Number
of
Shares).
Bonds (Par Value).
Foreign
Foreign
Domestic. Government. Corporate.
Total.
234,630 $2,244,000
221,915 3,295,000
432,440 5.796,000
405.435 5,557,000
242,965 4,978,000
238.700 7,161,000
$86,000
95.000
37,000
74,000
49,000
59,000
890,000 $2,420,000
115.000 3,505.000
209,000 6,042,000
110.000 5,741,000
114,000 5,141,000
144.000 7,364.000
1,776.085 $29,031,000
400,000
$782,000 $30,213,000
Week Ended Aug. 19.
Jan. I to Aug. 19.
THE CURB EXCHANGE.
1931.
1932.
1931.
1932.
Price fluctuation§ in the curb market have shown con74,720,933
32,286,582
siderable irregularity the present week, pivotal issues being Stocks-No.of shares- 1,776,085 1,290,775
Bonds.
subject to pressure on frequent occasions, though the general Domestic
5583.403,000
$29,031.000 $14,663,000
3512.753,100
19,268,000
Foreign Government..
400.000
655,000
20,817,000
was
selling
list, on the whole, was slightly higher. Heavy
25,593,000
Foreign corporate
782,000
401,000
43,405,000
apparent from time to time, but the numerous rallies checked
$628,284,000
Total
$30,213,000 $15,719,000
$576,975,100
the recessions and the list was able to show slight gains at the
end of the week. Public utilities have attracted conENGLISH FINANCIAL MARKET-PER CABLE.
siderable speculative attention and have registered some
The daily closing quotations for securities, &c., at London,
gains. Industrial stocks were slightly stronger and oil
shares have made some improvement. On Saturday the as reported by cable, have been as follows the past week:
Fri.,
Sat.,
Thwt.,
Mon.,
Tues.,
Wed..
trend was lower, the general list being under pressure with
Aug. 13. Aug. 15. Aug. 16. Aug. 17. Aug. 18. Aug. 19.
the public utilities showing irregular movements. Singer Silver, per oz- - 17
7-16d. 18Kcl.
18 1-164. 18 1-16d. 17 15-16d. 18Kd.
Manufacturing Co. and A. 0. Smith were the weak spots Gold, p.fine oz. 11811.44. 1188.54. 1188.7d. 118s.7d. 118s.86. 118s.10d.
71
Consols,
2K
%..
71K
723(
713
71K
and dropped about 4 points each. Higher prices were the
5%10134
10134
1017
101%
1013
rule on Monday, the late rally carrying many of the special- British,
British, 4K% _
98%
102
99K
98%
993i
ties and industrial shares sharply forward. A. 0. Smith French Rents'
(in Paris)3%
continued to climb and was up about 5 points at its top for
82.60
francs......
82.70
Holiday 82.40
82.40
the day. Electric Bond & Share was an outstanding feature French War lin
(in Paris) 5%
4. Aluminum Co.
as it soared 43' points and closed at 227
francs......
100.10
Holiday 99.70
99.80
99.70
of American and Singer Manufacturing Co. were also noteThe price of silver in New York on the same days has been:
worthy for their gain of about 3 points each at their tops
in N. Y.,
for the day. Oils were mixed and the gains were largely Silver
per oz.(eta.). 27K
283
28
2834
28
2734
fractional.
Preferred stocks in the utility group were in considerable
COURSE OF BANK CLEARINGS.
demand on Tuesday, though the oil shares and mining issues
Bank clearings this week will again show a decrease as
were much improved and a gain of 6% points in Dixon
Crucible was the feature of the specialties. The strong stock compared with a year ago. Preliminary figures compiled
of the utilities group was Illinois Power & Light which forged by us, based upon telegraphic advices from the chief cities
ahead 73% points to 53%; Great Atlantic & Pacific Tea Co. of the country, indicate that for the week ended to-day
rose 12 points on a single odd lot transaction. Metropolitan (Saturday, Aug. 20), bank exchanges for all the cities of the
Edison pref. was especially noteworthy on Wednesday as it United States from which it is possible to obtain weekly
shot forward 12 points to 61, followed by Florida Power returns will be 38.7% below those for the corresponding
& Light with a gain of 6 points to 46. Oil shares were week last year. Our preliminary total stands at $4,210,represented in the advances by Standard Oil of Ohio pref. 780,454, against $6,873,003,608 for the same week in 1931.
which moved up to a new top for 1932 at 87, while the strong At this center there is a loss for the five days ended Friday
stock in the industrial group was Singer Manufacturing Co. of 42.3%. Our comparative summary for the week follows:
which plosed 3 points higher at 118.
Clearings-Rd urns by Telegraph.
Per
Week Ending Aug. 20.
1932.
1981.
Cent.
Pivotal stocks held their gain during most of the trading
$2,138,467,335 $3,707,623,807 -42.3
on Thursday, despite the fact that selling increased in the New York
Chicago
161.080,864
251,491,566 -25.9
general list. In the utilities division, Commonwealth Edison Philadelphia
196.000.000
321,000,000 -38.9
144,000.000
272,000,000 -47.1
was the outstanding strong stock as it moved briskly forward Boston
Kansas City
50.657,477
68,207.137 -25.7
St. Louis
45,100,000
75,700,000 -40.4
and closed with a net gain of 2 points on the day. There San
Francisco
93,746,000
122.765,000 -23.6
specialties
No longer will re port clearings.
Los Angeles
was little or no demand for stocks among the
56,355,868
87,348,711 -35.5
group, except for A. 0. Smith, which improved 1% points Pittsburgh
Detroit
51,156,812
89,762,972 -43.0
Cleveland
52,898.791
3
78,416.234 -32.5
added
which
%, and Singer Manufacturing Co.
to 313
Baltimore
51,384,587
57,153,908 -10.1
22,057,186
33,377,742 -33.9
additional points to its gain of the preceding day and closed New Orleans
at 121. Great Atlantic & Pacific Tea Co. gained 3 points
Twelve cities, five days
$3,062,904,920 $5,164,837,077 -40.7
446,077.125
628,614,375 -29.0
at the opening, but turned downward and closed with a Other cities, five days
Total all cities, five days
33.508.982,045 15,793.451,452 -89.4
3-point loss.
All cities, one day
701,798.409
1,079,552,156 -35.0
On Friday, Curb Market prices were strong at the opening,
Total
all
cities
for
week
34,210,780.454
86.873.003.808
-38.7
but turned downward as the offerings increased. A few
America,
Complete
details
and
exact
for
the
week
covered
by
the
of
Co.
Aluminum
stocks moved against the trend,
for instance, moving forward 1% points to 55, followed by foregoing will appear in our issue of next week. We cannot
American Superpower 1st pref., with a gain of 33/i points to furnish them to-day, inasmuch as the week ends to-day
56. The changes for the week were generally on the side of (Saturday) and the Saturday figures will not be available
the advance and included among others, American Beverage, until noon to-day. Accordingly, in the above the last day
6% to 6%; Aluminum Co. of America, 463' to 53; American of the week has to be in all cases estimated.
In the elaborate detailed statement, however, which we
Gas & Electric, 283/i to 313; American Light & Traction,
to 4%; Cities Service, present further below, we are able to give final and complete
193' to 22; American Superpower, 33%
48% to 5; Commonwealth Edison, 745 to 78, Consolidated results for the week previous, the week ended Aug. 13.
Gas of Baltimore, 54% to 55; Creole Petroleum, 2% to 3; For that week there is a decrease of 28.3%, the aggregate
/s; Ford of Canada, A, of clearings for the whole country being $4,428,759,888,
Electric Bond & Share, 173 to 225
Stations,
24 to 27; Gulf Oil of against $6,726,053,599 in the same week in 1931. Outside
Tel.
Pay
Gray
8%;
to
73'
Penn., 35 to 373.; Hudson Bay Mining, 23. to 33.'; New of this city there is a decrease of 38.2%, the bank clearings
Financial Chronicle
Volume 135
at this center recording a loss of 31.79. WO group the
cities according to the Federal Reserve districts in which
they are located, and from this it appears that in the New
York Reserve District, including this city, the totals show
a contraction of 31.9%, in the Boston Reserve District of
50.7% and in the Philadelphia Reserve District of 41.8%.
In the Cleveland Reserve District the totals are smaller by
27.7%, in the Richmond Reserve District by 27.4% and in
the Atlanta Reserve District by 35.0%. The Chicago
Reserve District suffers a loss of 44.4%, the St. Louis
Reserve District of 32.9% and the Minneapolis Reserve
District of 23.8%. In the Kansas City Reserve District
the decrease is 31.1%, in the Dallas Reserve District 33.0%
and in the San Francisco Reserve District of 32.5%.
In the following we furnish a summary of Federal Reserve
districts:
SUMMARY OF BANK CLEARINGS.
Week Ended Aug. 13 1932
1932.
1930.
Federal Reserve Diets.
1st Boston_ _ _ _12 cities
2nd New York _12 "
1,
3rd Phlladel '15_10
4th Cleveland__
1,
5th Richmond _ 6
11
6th Atlanta
7th Chicago ___19
8611 St. Louis__ 5 1.
9th Minneapolis 7
10th KansusCity 10 1,
5
11th Dallas
12th San Fran_ _14 ••
189,761,678
2,953,125,506
229,172922
204,288.990
95.524,570
69,864,401
271,181,917
72,840,106
64,198,765
88,759,935
28,424,950
161,616,148
385,001,182
4,334,132.807
393,902.542
282,631,146
131,548.627
107,495.272
487,871,562
108,561,698
84,304.040
128.768,867
42,403,451
239,432,405
117 cities
Total
Outside N. Y. City
4,428,759,888
1,552,260,679
6,726,053,599 -34.2
2,512,027,601 -38.2
32 cities
228,979,247
296,050,725 -22.7
Canada
-50.7
-31.9
-41.8
-27.7
-27.4
-35.0
-44.4
-32-9
-23.8
-31.1
-33.0
-32 5
457,150,862
5,698,691,642
485.295,629
369,103,219
152,506,377
135,931,033
801,565,011
162.085,291
111,714,155
192,388,511
52,503,206
325,143,665
1929.
535,534,531
8,599.713,356
562.851,579
421,071,602
159,549,748
161,814.925
1,019,537,048
170,643,433
140,418,353
217,014,494
77.266,223
378,606,977
8,944,078,601 12,404,022,269
3,384,276.816 3,985,402.641
333,895,892
446,900,814
We add our detailed statement, showing last week's figures
for each city separately, for the four years:
Week Ended Aug. 13.
Clearings at1932.
1931.
$
First Federal Reserve Dist rict-Boston
362,751
Maine-Bangor__
662,606
Portland
1.993,529
2,978,454
Mass.-Boston_ _ 163,451,291 343,764,625
556.731
Fall River_ _ _
914,091
Lowell
385,675
476..433
New Bedford..
462,016
782.836
Springfield. _ _
2,555,898
3.708,430
Worcester
1.723.466
2.412,124
Conn.-Hartford.
.8,000,000
12,652,639
New Ilaven__ _
2,960,653
5,670,947
R.I.-Providence
6,945,200
10,484,500
N.11.-Manchea'r
364,468
492.897
Total(12 cities)
189,761.678
Inc. or
Dec.
--45.3
--33.1
--52.5
--39 1
1930.
1929.
--- 41.0
--31.1
--28.5
--36.8
--47.8
--33.8
--26.
865,037
3,726.950
413,281,296
891,311
541,243
945,655
3,996,752
3.042.776
11,772,207
6,384.675
11,105.700
597,260
622,209
4,038,018
477,936,152
1,170.193
1.103,405
1,003,260
5,496.382
3,059,483
17,608,312
8,769,706
13,919,300
808,111
385,001.182 -50.7
457,150.862
535,534,531
Second Feder at Reserve D istrict-New
N. Y. Albany _ _ _
4,765,915
5,500,526
Binghamton_ _
584,791
973,211
Buffalo
21,625,289
35,114,203
Elmira
475,838
899,775
Jamestown_ _ _ _
416,933
806.731
New York_ _ _ 2,876,499,209 4,214.025,998
Rochester
5.360,917
8,037,707
Syracuse
3,011,920
4,034,902
Coon -Stamford
2,057,741
3,083,416
N. J.-Montclair
365,549
552,688
Newark
16,166,609
26,971 383
Northern N. J_
21,794.795
34,172,267
York
--13.4
6,974,780
5,691.764
--39.9
1,219,030
1,253,092
--38.4
44,621.789
71,004,118
--47.1
732.552
968.919
--48.3
1.179.000
1,200,864
--31.7 5,559,801,785 8.418.619.628
--33.3
10,159,034
14.621.993
--25.4
4,649,885
6,235,123
--33.3
3,371,547
4,304.576
--33.9
633,753
597.998
--40.0
30.902.027
36,235,567
--36.2
34,446,460
38,079,714
Total(12 cities) 2,953,125,506 4,334,132,807 -31.9 5.698,691,642
8,599,713.356
Third Federal Reserve Dist rict-Philad elphia
Pa.-A itoona___ _
307,035
578.612 -46.9
13ethlehein _
c1,775,597
3,012,012 -41.0
Cheater
276.054
'767.043 -64.0
Lancaster
866,317
2,093.607 -58.6
Philadelphia...- 218.000,000 371,000,000 -41.2
Reading
1,649.145
2,648,104 -37.7
Scranton
2,059,829
5,427.089 -62.0
Wilkes-Barre _ _
1,480,381
2.902.303 -49.0
York
932.564
1,615,772 -43.0
N.J.-Trenton_
1,826,000
3,838,000 -52.4
Total (10 cities)
229,172,922
393,902,542 -41.8
Fou rtIt Feder al Reserve 1) istrict-Clev eland
Ohio-Akron,.._
d437,000
3,172,000 -86.2
Canton
Cincinnati _
67.738,652
49.964,298 +35.6
Cleveland
59.362.735
97,702,567 -39.2
Columbus
6,701,200
14,627,300 -54.2
Mai afield
c773,430
1,444,181 -46.4
Youngstown _
Pa -Pittsburgh.
69,275,973 115,720,800 -40.1
1.244 392
4,745,316
928.355
1,538.546
458,000,000
3.070,230
6,224,015
3.571,620
2,150,155
3,814,000
485,295,629
1.508,437
4,742,519
973,204
1.827,846
536.000.000
2,663,808
5,847.895
3.518,725
1.919.737
3.829,408
562,851,579
5,120,000
6,607,000
56,324,929
129,662.818
15.503,000
1,820,850
67,287.275
143.415,276
15.098,700
2,343,180
160.671,622
186,320,171
204,288,900
282,631,146 -27.7
369,103,219
421,071,602
Fifth Federal Reserve Dist
261,930
W.Va.-Ilunt'g'1
Va.-Norfolk.___
2,064,254
Richmond _
20,177,238
S.C.-Charleston
540,177
Md.-Baltimoro_
511.553,878
D.C.-Washing'n
15.927.093
-Richm ond489,219 -46.5
2,926,298 -29.5
30,861,359 -34.6
1,204,638 -55.1
73.940,984 -23.5
22.126,129 -28.0
1,066.791
3,806.429
41,772,506
1,422,119
81.455,319
22,983,213
1.088,607
3.547,857
41,444.000
1.813.473
88.568,852
23.086,959
05,524,570
131.548.627 -27.4
152,506.377
159,549,748
Sixth Federal Reserve Dist rict-Atlant a2,011,163
3.351,583 -40.0
Tenn.-Knoxville
8,032.271
Nashville
11,502.878 --30.4
22,600,000
33,500.000 --32.5
Ga.-A t[ante_ _
660.596
•1.000.000 --33.9
Augusta
484,691
Macon
729,410 --33.5
Fla.-Jack'nville.
6,238,972
9.743.560 --36.0
6.794,940
Ala.-111rming'm.
10,992,852 --38.2
687.401
Mobile
1.041.858 --34.0
634,000
1,507,000 --57.9
Miss.-Jackson
102,598
Vmksbunr
113,484 --9.6
21,617.723
34,012.647 --36.4
La.-New Orleans
3.687.003
21,207,101
42,611,722
1,356,521
1.312.685
10,464.783
14,025,984
1,553.187
1.844.321
200,462
36,767.264
2,625.674
21,394,444
52.266,017
1.661,532
1.364,578
12,542.817
21.627,437
1,921,888
1.835.290
252,347
44.322,901
135,931,033
161,814,925
Total(6 cities).
Total (6 cities).
Total(11 cities)
69,864,401
107.495,272 -35.0
IVeck Ended Aug. 13.
Clearings at1032.
1931.
Inc. or
Dec.
$
$
%
Seventh Feder al Reserve D istrict-Chi cago164,928 -44.2
Mich.-Adrian_ _
92,098
Ann Arbor....
482,102
659,581 -26.9
50,748,417 101,606,303 -50.1
Detroit
2,689,409
4,706,119 -42.9
Grand Rapids_
2,622,904 -54.2
1,200,500
Lansing
1,544.263 -43.8
868,199
Ind.-Ft. Wayne
11,300,000
15,766,000 -28.3
Indianapolis_
747,822
962,531 -22.3
South Bend.: _
2,563,242
3,737,603 -31.4
Terre Haute_ _ _
22,088,240 -44.0
Wis.-Milwaukee
12,360.665
2,313,140 -76.5
Ia.-Ced. Raps
543,482
Des Moines_ _ _
4,261,681
5,469,196 -19.1
4,243,196 -52.1
Sioux City__ _ _
2,033,038
f
Waterloo
1,427,569
857,439
674,025Ill.-Bloomington
-3i.ii
176,025,093 313,029,869 -43.8
Chicago
Decatur
596,907
968,178 -38.3
1,756,037
Peoria
2,553,754 -31.2
.540.785
Rockford
1,346,710 -59.8
Springfield. _ 1,515,001
1.987,453 -23.8
Total (19 cities)
Inc.or
Dec.
1931.
1285
271,181,917
487,871,562 -44.4
Eighth Federa Reserve Dis trict-St.
b
Lo
b
Ind.-Evansville
Mo.-St. Louis..
49,800,000
77,200,000
Ky.-Louisville _
15,623,827
L0,515,64
b
Owensboro_ _ _ _
b
Tenn.- Memphis
6,888,143
9,993,497
111.- Jacksonville
141,808
97,669
430,467
710,747
Quincy
1930.
$
160,701
815,621
137,692,642
4,572,925
3,198,629
3,418.498
23.134,000
2,327,269
4,243,249
30,461,934
3,041,708
7,120,905
5,714,141
1,285,697
2,0lb,476
561,961,470
1,2139,263
4,325,414
2,610,878
2,288,591
1929.
$
251,392
818,984
222,763,676
7,352,582
4.517,939
4,132,682
22,750,000
2,744,154
4,881,861
32,531,579
3,294,439
9,334,376
6.809.537
1.441,331
1,828,712
681,440,971
1,170,866
5,550,045
3,705,593
2,216,329
801,565,011 1.019.537,018
tileb
-35.5
-23.8
b
-31.1
-31.1
-39.4
b
105,800,000
39,150,040
b
15.826,785
197,331
1,111,135
b
119,300,000
32,881,037
b
16,626,742
370,297
1,465,357
108,561.698 -32.9
162,085,291
170,643.433
eapolis
Ninth Federal Reserve Dia trict
2,261,449
2,830,041 --20.1
Minn.-Duluth_ _
45,261,713
57,825,280 --21.7
Minneapolis_ _ _
St. Paul
12,763,566
18,029,654 --29.2
1,874,830 --20.0
N. Dak.-Fargo _
1,500,716
748.349 --21.4
588,484
S. Dak.-Aberd'n
567,264 --48.2
293.862
Mont.-Billings
1,528,975
2,428,622 --37.0
Helena
5,419,581
78,596,292
21.270,769
1,937,055
1,039,105
607,141
2.844,212
6,507,534
102,454,319
24,129,945
1,923,283
1,181.357
615,915
3.606,000
111,714.155
140,418,353
Tenth Federal Reserve Dia trict-Kane as City Neb.-Fremont _
107,786
237,802 -54.7
276,195
116,895
331,327 -64.7
584.785
Hastings
1.590,307
2.733.179 -41.8
Lincoln
3.428,098
19,019.611
31,616,059 -39.8
Omaha
43,600,467
1,510,538
2,275,595 -33.6
Kan.-Topeka _ _
3,368,618
3,861,626
4,648,662 -16.9
Wichita
7.504,120
58,652,018
80.932.174 -27.5 125,132,853
Mo.-Kans. City
2,556,634
3,808,294 -32.7
St. Joseph..- 5,544,546
760,793
1,029,368 -26.1
Colo.-Colo.Spgs
1,323,960
a
a
Denver
a
a
1,156,407 -49.5
583,727
Pueblo
1,624,869
337,479
495,119
3,276,437
47.369,175
3,216,331
8,564,515
143,442,849
7,221,565
1.321,102
a
1,769,922
Tota,(5 cities).
Total(7c ties).
72,840,106
64,198,765
84.304,040 -23.8
128,768,867 -31.1
192.388,511
217.014.494
Eleventh Fede rat Reserve District-Da Iles650,270
1,402,746 -53.6
Texas-Austin__ _
21,490,000
30,332,448 -29.2
Dallas
4,553,492
5,703,456 -20.2
Fort Worth_ _ _
1,114,000
1,886,000 -40.9
Galveston
2,617,188
3.078,801 -15.0
La -Shreveport.
1,382,555
36.645,044
7.695.281
3,279,000
3.501,326
1,274,484
52.756,977
12.657,054
5,490,000
5,087,708
52,503,206
77.266,223
Total (10 cities)
Total (5 cities)-
88,759,935
28,424,950
42,403,451 -33.0
Twelfth Feder at Reserve 0 istrict-San Franci sco20.733,393
29,452,086 -29.6
Wash.-Seattle38,726.501
4,757,000
Spokane
8,371,000 -43.2
11,052,000
302.497
604.544 -50.0
Yakima
934.240
15,167,130
25,750,504 -41.0
Ore -Portland..
33.871.246
7,569,300
12,825,549 -41.0
Utah-S. L. City
15.889.802
2,716,708
Calif.-Lng 13ch.
4,703,518 -42.2
7.577.912
No longer w ill report clear logs
Los Angeles
2,702,970
Pasadena
4,303,796 -37.2
5.401.857
7,158.602
Sacramento... _
9,365,670 -24.0
6,633,133
2.772,249
San Diego... _
4,108,938 -32.5
5.465,660
93,481,000 132.228,000 -29.3 190,069,000
San Francisco.
1.510,989
San Jose
2,729,752 -44.6
3,535,093
882.564
Santa Barbara_
1,728,695 -48.9
2,014,748
821,012
Santa Manioc).
1,656,453 -50.4
2,107,173
Stockton
1,080.734
1,603,900 -32.6
2,065,300
53,684,845
13,303,000
1,480.057
40,740,158
19,894.807
8,730,733
4,971,605
7,363,754
5,649.830
212,385,000
3,754,188
1,870,574
2,245,426
2,533,000
Total (14 cities) 161,616,148 239,432,405 -32.5 325,143,665 378,606,977
Grand total (117
citieS)
4,428,759,888 6.726,053,599 -34.2 8,944,078,601 12404 022,269
Outside New York 1.552.260.679 2.512,027,601 -38.2 3.384,276,816 3,985,402.641
Week Ended Aug. 11.
Clearings at1932.
CanadaMontreal
Toronto
Winnipeg
Vancouver
Ottawa
Quebec
Halifax
Hamilton
Calgary
St. John
Victoria
London
Edmonton
Regina
Brandon
Lethbridge
Saskatoon
Moose Jaw
Brantford
Fort William_ _ _ _
New Westminster
Mod eine Hat._ _
Peterborough_ _
Sherbrooke
Kitchener
Windsor
Prince Albert_ _
Moncton
Kingston
Chatham
Sarnia
Sudbury
66,628,508
67,621.615
42,500.901
13,508,480
3,767,721
3.622.068
2,035,586
3,595.362
3,834.553
1,693,953
1,292,267
2,089,513
3,409,298
2,585,420
297,064
335,374
1,271,424
434.087
675.600
536,537
447.350
137.734
559,805
606,837
752,615
2,271.338
274,736
561.494
541,786
364,523
417,169
348,529
Total (32 cities)
228.979.247
1931.
Inc. or
Dcc.
1930.
1929.
-33.2
-21.4
--8.6
--14.3
--27.6
--26.9
--29.7
--6.8
--19.6
--30.0
--25.2
--3.9
--12.8
--20.1
--24.0
--13.9
--15.6
--17.2
--18.1
--26.0
--18.9
--30.9
--20.7
--5.7
--10.3
--4.3
--14.3
--9.8
--I8.3
--26.6
--4.2
--51.4
107,537,388
101.066,338
41,392,359
18,783,572
6,861.479
13,057.775
3.315,834
5,582,377
6.124,141
2,629.065
2,808,256
3,969,728
5,220,527
4,994.374
561,907
520,666
2,071,042
997,076
963,123
791,264
827.693
248,828
897,010
780,731
1,113,977
3,843,476
419.616
912.905
822.691
836.936
553.691
1,081.047
145,023.617
133.415.752
64,868.329
23.119.182
8.233.756
6,914,404
3,260.821
6,619.571
12,086,204
2,847.960
2,815,207
3,634.039
6,696.013
5,877.716
696,961
813.269
2,860.467
1,555.388
1,360,887
1,036.829
1,001,905
492,174
931.256
1,000,255
1.327.354
4.697,844
447.338
948.937
878,228
657.151
800,000
296,050,725 -22.7
333.895.892
4,143.900.814
99,667.805
86,056,573
46,509.094
15,770,367
5.206,266
4.951.674
2.896,802
3,858.464
4,768.219
2,421.126
1,728,443
2,173,353
3,911,293
3,237.815
391.026
389.689
1,506,389
523,974
824,760
725,226
551,704
199,370
706,081
643,369
838.615
2,373,427
320,496
622,311
663,191
496,778
400,487
716,536
a No longer reports weekly clearings. b Clearing house not functioning at present.
c Clearing house reopened In February. d Figures smaller due to merger of two
largest banks. e Due to merger of two leading banks, this Mere represents the
exchange of cheeks between fewer institutions. t Only one bank open. No clearjigs figures available. •Estimated.
Financial Chronicle
1286
THE-ENGLISH GOLD AND SILVER MARKETS.
We reprint the following from the weekly circular of
Samuel Montagu & Co. of London, written under date of
Aug. 3 1932:
GOLD.
The Bank of England gold reserve against notes amounted to £137.725,916 on the 27th ult, as compared with £136.583,653 on the previous
Wednesday. In the open market about £1,300,000 bar gold has been sold
for delivery this and next week. Some of the supplies were absorbed by
the Continent, but the bulk has again been taken by an undisclosed buyer.
Announcement is made to-day of the purchase by the Bank,of England of
£837,561 bar gold. Quotations during the week:
Equivalent Value of
Per Fine
£ Sterling.
Ounce.
14s. 6.9d.
116s.
7d.
July 28
14s. 5.3d.
117s. 8d.
July 29
14s. 5.6d.
117s. 5d.
July 30
14s. 6.3d.
117s. Od. (nominal)
Aug. 2
14s. 6.06.
117s. 2d.
Aug. 3
14s. 6.02d.
117s. 2.0d.
Average
exports of gold
and
imports
The following were the United Kingdom
registered from mid-day on the 25th ult. to mid-day on the 30th ult.:
Exports.
Imports.
£641,945
£1.320.236 Netherlands
British South Africa
459.338
France
1,061.090
British India
173,850
172,688 Belgium
Australia
28,100
175.120 Poland
Egypt
8,000
70,793 Switzerland
Straits Settlements & Dep.
2,058
65.881 Other countries
British West Africa
17.940
Iraq
28,802
Netherlands
26,025
Anglo-Egyptian Sudan- _
6,611
Other countries
£1.313,291
£2,945.186
The Southern Rhodesian gold output for June 1932 amounted to 48,441
fine ounces as compared with 46,854 fine ounces for May and 44,118 fine
ounces for June 1931. Shipments of gold from Bombay last week comprised
£877,000 consigned to London and £25,000 consigned to Holland by the
SS. Rajputana, £119,000 consigned to London by the SS. City of Eastbourne and £70,000 consigned to New York by the SS. President Adams.
SILVER.
The influence of weaker sterling, together with stronger advices from
America and the East, has led to the quotation of slightly higher prices
during the past week. The peak was reached yesterday at 175(d. and
17 5-16d. for cash and forward, respectively, and to-day a fall of 1-16d.
has been registered in each quotation. China has both bought and sold.
while sales were effected on Continental account and some purchases made
for India. Inquiry from America in the afternoons has been a frequent
feature. The following were the United Kingdom imports and exports of
silver registered from mid-day on the 25th ult. to mid-clay on the 30th ult.:
Exports.
Imports.
£30750
,
£76,842 Portugal
Soviet Union (Russia)
20,682 French Possessions in
Belgium
8,500
7.603
India
Japan
6.130
15.000 France
France
7.000
8,568 Hongkong
Australia
4,846
6.827 Other countries
Other countries
£135,522
Quotations during the week:
LONDON.
IN
Bar Silver per Oz. Std.
Cash Del. 2 Mos.Del.
17 3-16d.
173d
July 28
173-16d. 1730.
July 29
17 3-166. 173,1,d.
July 30
17 5-16d.
1730.
Aug. 2
173-166. 1734d.
Aug. 3
17.187d. 17.2506.
Average
£57,226
IN NEW YORK.
(Cents per Ounce .999 Fine.)
July 27
July 28
July 29
July 30
Aug. 1
Aug. 2
27SI
27
27
27 1-16
2734
273(
The highest rate of exchange on New York recorded during the period
from the 28th ult, to the 3d inst. was $3.5334 and the lowest $3.49.
INDIAN CURRENCY RETURNS.
July 15.
July 30.
July 22.
(In Lacs of Rupees)
17,244
17.423
17,320
Notes in circulation
11,305
11.439
11,380
Silver coin and bullion in India
1,078
Gold coin and bullion in India1,086
•
4.861
4.898
4,862
Securities (Indian Government)
92.400,000
the
30th
ult.
about
consisted of
The stocks in Shanghai on
ounces in sycee. 240.000.000 dollars and 3.720 silver bars, as compared with
sycee,
242.500,000
in
dollars and 3,900 silver bars
ounces
87.500.000
about
on the 23d ult. Statistics for the month of July last are appended:
Bar Gold
Bar Silver
Cash Delivery. 2 Mos.Delivery. per Oz. Fine.
117s. 8d.
173.1d.
1731,d.
Highest price
%d.
1166.
165
16 9-16d.
Lowest price
115s. 11.0d.
16.983d.
16.930d.
Average
PRICES ON PARIS BOURSE.
Quotations of representative stocks on the Paris Bourse
as received by cable each day of the past week have been
as follows:
Aug. 13 Aug 15 Aup.16.Auo 17 Aup.18 Aug. 19.
1932. 1932. 1932. 1932. 1932. 1932.
Francs. Francs. Francs. Francs. Francs. Francs.
11.555 11,500 11.500 11.500
Bank of France
1,892 1,690 1,680 ,1,690
Banque de Paris et Pays Bee....
494
503
496
Basquede Union Partsienne344 zi 344
363
353
Canadian Pacific
14,050
14,105
14.180
Suez
de
Canal
2.170 2.165 2.150
Cie Distr d'Electricitie
2,240 2,200 2,200 , 2-,215
Cie General d'Electricitie
80
--82
81
Cie Generale Tranatitlantintle438
450
442
Citroen B
1,190
1,180
d'Esoompt°
1,180
Nationale
1,192
Comptoir
210
210
210
220
COO,Inc
387
378
371
Courrieree
734
740
722
Credit Commerciale de FraneeHOU- HOLI- 4,450 4,480 4,460 114,iii
Credit FOOMer de France
DAY
2,155 2,130 2,125 2,110
DAY
Credit Lyonnais
2,150
Distribution d'Eleotricitie la Par
2,360 2,566 2;380 2,380
Eaux Lyonnais
814
---619
614
Energie Electricitie du Nord
---1,018 1,014 1,010
Energie Electricitle du Littoral
SO
82
82
81
French Line
85
88
89
88
Gales Lafayette
780
770
770
770
Gas Le Bon
494
508
501
Kuhlmann
996
896
885
L'Air Liquid.
998
Lyon (P. L. M.)
"iio "iiii
370
-316
Mines de Courrieres
470
470
470
480
Mines des Lena
1,480
1,480
1.490
1.480
Nord RY
Aug. 13 Aug.15 Aug.16
1932. 1932. 1932.
Francs. Francs, Francs.
932
Orleans Railway
1.070
Paris, France
1,408
Pathe Capital
1,410
Pechiney
81
Rentee 3%
124
Rentee 5% 1920
95
Rentes 4% 1917
99
Routes 5% 1915
101
Rentes 6% 1920
1,620
Royal Dutch
Saint Cobain C.& C
HOLZ- HOLT- 1,190
Schneider & Cie
DAY
DAY
--Societe Andre Citroen
450
116
Societe Francalse Ford
Societe General Fowler°
197
Societe Lyonnais°
2,365
Societe MarselliaLse
605
Suez
14,200
Tubize Artificial Site. pref
218
Union d'Electricitie
870
Union des Mines_.
Wagon-Lita
92
Aug. 20 1932
Aug. 17 Aug. 18 Aup.19
1932. 1932. 1932.
Francs. Francs. Francs.
940
943
1,070 1,080 1,076
117
119
1,390 1,390 1:556
82
82
82
124
124
124
98
98
95
99
100
99
101
101
101
1,810 1,600 1,600
---1,795 1,205
"iid
"iio
"iiii
112
113
116
188
188
192
- _2,300 2,380
605
605
14,100 14,000 14:666
217
220
-iio
860
860
230
230
230
____
91
93
THE BERLIN STOCK EXCHANGE.
The Berlin Stock Exchange resumed trading on Friday,
April 29 1932 after having been closed by Government decree
siqce Sent. 18. Prices suffered heavy declines. Closing
prices of representative stocks as received by cable each day
of the past week have been as follows:
Aug. Aug. Aug. Aug. Avg.
18.
13.
15.
16.
17.
Per Cent of Par
Reichsbank (12%)
127
128 127 127
Berliner Handels-Gesellachaft (4%)
80
88
88
88
Commerz-und-Privat Bank A.0.(0%)-53
53
53
53
Deutsche Bank und Dizoonto-Gee. (0%)--75
75
75
75
Dresdner Bank (0%)
62
sg II
62
Ailgemn
Elektrizitaets Ges.(AEG)(0%).
31
33
3
Gesfuerei (4%)
Hell- 65
65
Siemens & Halske (9%)
7 12
131
day 129 131
1.0. Farbenindustrie(7%)
91
90
89
89
Salzdethfurt (9%)
187 172 172 174
Rheiniache Braunkohle (10%)
173 174 176
171
Deutsche Erdoel (4%)
74
73
Mannesmann Roehren(0%)
41
40
ii
'
iii
HaPag (0%)
15
16
North German Lloyd (0%)
18
17
16
17
Aug.
19.
129
90
53
75
82
34
67
132
91
174
179
74
45
15
16
In the following we also give New York quotations for
German and other foreign unlisted dollar bonds as of Aug.19:
Anhalt 76 to 1948
Argentine 5%, 1945, $100-pleces
Autioquia 8%, 1946
Bank of Colombia 7%. 1947
Bank of Colombia 7%. 1948
Bavaria 8 As to 1945
Bavarian Palatinate Cons. Cit. 7% to 1945
Bogota (Colombia) 834%, 1947
Bolivia 8%. 1940
Brandenburg Electric 6%,1953
Brazil Funding 5%,1931-1951
British Hungarian Bk. 730. 1962
Brown Coal Ind. Corp. 834s. 1953
Call (Colombia) 7%, 1947
Callao (Peru) 734%. 1944
Ceara (Brazil) 8% 1947
Central German Po: of Madeburg 8% 1934
CitySavings Bank Budapest 78, 1953
Dortmund Municipal i ill. o 34%,1948
Duisberg 7%,to 1945
Dusseldorf 7s to 1945
East Prussian Power 6%,1953
European Mortgage & Investment 730. 19613
French Government 534s, 1937
French National Mall S. S. Line 8%, 1952
Frankfurt is to 1945
German Atlantic Cable 7%,1945
German Building & Landbank 834%. 1948
Hamburg-A meriran Line 8%a to 1940
Hanover Harz Water Works 6%, 1957
Housing & Realty Imp. 7s, 1948
Hungarian Central Mutual 75, 1937
Hungarian Discount & Exchange Bank 78, 1983
Hungarian Italian Bank 734%. 1932
Koholyt 834s, 1943
Land Mortgage Bank. Warsaw 8%, 1941
Leipzig Overland Power 634%, 1946
Leipzig Trade Fair is. 1953
Luneberg Power Light & Water 7%,1948
Mannheim & Palatinate 78. 1941
Munich 78 to 1945
Municipal Bank Hessen 7% to 1945
Municipal Gas At Elec. Corp. Recklinghausen, 76.1947
Nassau Landbank 61.4%, 1935
National Central Savings Bank of Hungary 734s, 1082
Natl. Hungarian & Ind. Mtge. 7%. 1948
Oberpfalz Electric 7%, 1948
Oldenburg-Free State 7% to 1945
Pomerania Electric 6%, 1953
Porto Alegre 7%, 1988
Protestant Church (Germany) 7s, 1948
Provincial Bank of Westphalia 6%, 1933
Rhine Westphalia Electric 7%,1938
Roman Catholic Church 834%,
Roman Catholic Church welfare1948ur 7%. 1948
Saarbruecken Mortgage Bank 8s. 1947
Salvador 7%. 1057
Santa Catharina (Brazil) 8%, 1947
Santander (Colombia) 7%, 1948
Sao Paulo (Brazil) 6%, 1947
Saxon State Mortgage 8%, 1947
Siemens & Ilaiske debentures 8%.2930
South American Railways 8%. 1933
Stettin Public Utilities 7%,1948
Tucuman City is. 1951
Vamma Water 53.4%. 1957
Vesten Electric Railway 7%. 1947
Wurternberg 78 to 1945
I Plat price.
Bid.
28 '
46
18
25
25
42
30
fl5
f 334
423<
'28
f36
4134
110
f8
/234
43
f31
27
29
29
34
f34
102
103
31
51
3634
39
28
45
136
128
f71
36
5134
47
2934
32
4134
42
29
30
47%
/38
/3034
37
29
36
f6
3534
45
4334
4134
61
/17
1 331
112
-1 734
41
205
30
37
13
62
24
35
Ask.
31
50
20
28
28
44
33
18
434
4334
••••4
38
43
12
----
48
33
80
32
32
36
35
105
104
34
55
3934
45
30
47
38
29
74
39
5334
50
3134
35
44
45
32
33
4934
39
32
40
32
38
8
38
48
4534
VI%
iiiii
5
15
9
46
315
32
40
17
84
28
as
gommercialand paiscellatteratsBoxs
National Banks.-The following information regarding
National banks is from the office of the Comptroller of the
Currency, Treasury Department:
VOLUNTARY LIQUIDATIONS.
ap tal.
Aug. 10-The Union National Bank of Elizabethtown, Ky
550.000
Effective Aug. 5 1932. Liq. Agent: The First-Hardin
National Bank of l•llizabethtown, Ky. Absorbed by,
the First-Hardin National Bank of Elizabethtown,
KY.. Charter No.6028.
Auction Sales.-Among other securities, the following,
not actually dealt in at the Stock Exchange, were sold at auction
in New York, Boston, Philadelphia and Buffalo on Wednesday of this week:
By Adrian H. Muller & Son, New York:
Per Cent.
Bonds$ Per Sh.
Shares. Stocks.
$239.500 Indiana Southwestern Gas
400 National Meter Co. (N. Y.),
Utilities
cony.
Corp.,
106%
&
lot
300
Par $100
year secured notes, series A_117,355 lot
10 Bowman-Blitmore Hotels Corp.,
$235,000 Indiana Southwestern Gas
common, no par; Certificate of
& Utilities Corp., cony. 6% 10interest and right in 10 shares of
year secured notes, series A155.150 lot
Bowman-Biltmore Hotels Corp.,
$295,000
Indiana Southwestern Gas
Corp.,
Oil
Federal
5
preferred;
1st
& Utilities Corp., cony. 6% 1017 lot
preferred, par 5100
year secured notes, series A144,550 lot
600 Bowman-Biltmore Hotels Corp.
125 lot $50,000 Certificate of participation
2nd pref. no par
Per Cent. - of Beacon Holding Corp. in
Bondsan unsecured promissory note of
$1,000 Southern Pacific Co., San
Actinograph Corp., dated Jan.
Francisco Terminal, 1st mtge.
6 1930; 100 Actinograrh Corp..
7234%
4% bonds, 1950
Gas
80 lot
no par
Southwestern
Indiana
$43,000
& Utilities Corp., cony. 6% 10year secured notes, series A.21,070 lot
By R. L. Day & Co., Boston:
$ per Sh.
Shares. Stocks.
1 Hamilton Woolen Co., par 5100_ 40
1234
50 Arlington Mills, par $100
10 Berkshire Fine Spinning Assoc.,
preferred, par 5100
2434
10 Mass. Bonding & Insurance Co.,
25
par 525
4 Lynn Gas dz Elec. Co., free, par
0034
$25
1
1 Saco Lowell Shops common
1 Saco Lowell Shops, 1st pref, par
5%
$100
Shares. Stocks.
$ per Sh.
1 Saco Lowell Shops, 2nd pref, par
$100
334
10 Mercantile Properties. Inc.,
common, par 85
3
10 Public Electric Light Co., pref.,
par $100
40
2 Columbian National Life Insurance Co., par $100
1054
BandsPer Cent.
$1.000 Narragansett Electric Co.,
Is. series B, 1957
9334
By Barnes & Lofland, Philadelphia:
$ per Sh.
Shares. Stocks.
27 Phila. National Bank, par $20- 653.4
20 National City Bank, New York,
4734
par $20
10 Corn Exchange National Bank
& Trust Co., par $20
443.4
10 Tradesmens National Bank &
125
Trust Co., par 5100
.5 Fidelity-Philadelphia Trust Co.,
350
Par $100
12 Integrity Trust Co., par $10...... 163.4
28 Integrity Trust Co., par $10___ 16
10 Real Estate-Land Title & Trust
17
Co., par $10
Shares. Stocks.
8 Per Sh.
50 Irving Trust Co., New York,
par $10
22%
10 Camden Safe Deposit & Trust
Co., Camden, N. J., par 325- - - 80
10 Union Passenger Railway Co..
Par $50
4734
13 Germantown Passenger Ry. Co.,
par $50
4034
15 Continental Passenger Hallway
Co., par $50
334
50 Victory Insurance Co., par $10 335
5 Broadway Merchants Trust Co.,
Camden N. .1
334
By A. J. Wright & Co., Buffalo:
Shares. Stocks.
10 Angel International Corp
$ per Sh. Shares. Stocks,
22c. 5 International Rustless Iron
per Sh.
41c.
DIVIDENDS.
Dividends are grouped in two separate tables. In the
first we bring together all the dividends announced the
current week. Then we follow with a second table, in
which we show the dividends previously announced, but
which have not yet been paid.
The dividends announced this week are:
Name of Company.
When
Per
Cent. Payable
Railroads (Steam).
434 Sept. 1
Atlanta & Charlotte Air Line Ry.(s.-a.)_
Boston & Albany RR. (quar.)
$2 Sept.30
50c. Oct. 1
Chesapeake Corp. (quar.)
Chesapeake & Ohio Ry. Co., Corn.(qu.)_ 6234e. Oct. I
Preferred (s-al
3.34 1- 1-33
Chestnut Hill RR.(quar.)
75c. Sept. 6
2
Delaware & Bound Brook RR.(quar.)_ _
Aug. 20
Hartford & Conn. Western RR., 2%
1
Aug. 31
;std. (s-a)
3 Sept. 6
Phila. Germant'n & Norrist'n RR.(qu.)_
Pitts., Ygst'wn & Ashta. Ry. CO.. Pref
13.4 Sept. 1
Books Closed
Days IncluSiee.
Holders of rec. Aug. 20
Holders of rec. Aug. 31
Holders of rec. Sept. 8
Holders of rec. Sept. 8
Holders of rec. Dec. 8
Holders of rec. Aug. 20
Holders of rec. Aug. 17
Ilolders of rec. Aug. 20
Holders of rec. Aug. 20
Holders of rec. Aug. 20
Public Utilities.
Alabama Power Co.,$7 pref.(guar.). _ _ _ $134 Oct. 1 Holders of rec. Sept. 15
$13.4 Oct. I Holders of rec. Sept. 15
$6 preferred (quar.)
55 preferred (guar.)
514 Nov. 1 Holders of rec. Oct. 15
American Telep. & Teleg.(quar.)
231 Oct. 15 Holders of rec. Sept. 20
Bangor Hydro-Elect. 7% pref. (quite.)I% Oct. 1 Holders of roc. Sept. 10
19.4 Oct. 1 Holders of rec. Sept. 10
6% preferred (quar.)
Binghamton Gas Wks.,64% pt. (qr.) _ 5 1.56% Sept. 1 holders of rec. Aug. 20
Brooklyn dr Queens Transit Corp.56 preferred (guar.)
5134 Oct. 1 Holders of rec. Sept. 15
Buffalo, Niagara & Eastern Pow. Corp.
814 Nov. 1 Holders of rec. Oct. 1
$5 preferred (quar.)
Preferred (quar.)
40c. Oct. 1 Holders of rec. Sept. 15
Consumers Water, pref.-Div. passed.
East. Shore Pub. Serv. $634 met (qu.) _ _ $I% Sept. 1 Ilolders of rec. Aug. 12
$13.4 Sept. 1 Holders of rec. Aug. 12
$6 preferred (quar.)
I% Sept. 1 Holders of rec. Aug. 22
El Paso Natural Gas 7% pref.(quar.)
Electric Bond & Share Co.,corn.(gnarl.)- f13.4 Oct. 15 Holders of rec. Sept. 6
51% Nov. 1 Holders of rec. Oct. 5
$6 preferred (quar.)
514 Nov. 1 Holders of rec. Oct. 5
35 preferred (quar.)
Florida Pow.& Light 7% pref.(qu.)
- 873.40. Sept. 1 Holders of rec. Aug. 10
Preferred class A (quar.)
$19.4 Sept. 1 Holders of rec. Aug. 10
Ironwood & Bessemer Ry.& Lt.134 Sept. 1 Ilolders of rec. Aug. 15
7% preferred (quar.)
134 Sept. I Holders of rec. Aug. 15
Lake Sup. Dist. Pow.Co.,7% Pf.(qu.)
j16c. Sept.30Holders of rec. Sept. 15
Lone Star Gas common (quar.)
750. Sept.
Holders of rec. Aug. 26
Middlesex Water (quar.)
Holders of rec. Aug. 20
Minneapolis Gas Lt.(Del.)7% 01.(qu.)13.4 Sept.
19.4 Sept.
Holders of rec. Aug. 20
6% preferred (quar.)
1% Sept.
Holders of roc. Aug. 20
Mississippi Valley Pub. Serv. 7% Pf.
Holders of rec. Oct. 15
Mohawk Hudson Pow. Corp. pf. (quar.) 51% Nov.
Holders of roe. Sept. 15
5134 Oct.
2nd preferred (quar.)
I% Sept.
Holders of rec. Aug. 16
Nebraska Power Co..7% pref.(qu.)_ _ _
134 Sept.
Holders of rec. Aug. 16
6% preferred (quar.)
Sept.30 Holders of rec. Sept. 10
New Engl. Telep.& Teleg. Co.(quer.). _ $2
New iYork & Queens Electric Light &
Power Co. (quar.)
$134 Sept. 14 Holders of rec. Sept. 2
$14 Sept. 1 Holders of rec. Aug. 19
Preferred (quar.)
30c. Sept.30 Holders of roe. Aug. 24
Niagara Hudson Pow. Corp. corn.(qu.)_
North American Light & Power.-Divid end o mitted.
Pacific Northwest Public Service
5134 Sept. 1 Holders of rec. Aug. 15
$6 1st preferred (quar.)
60c. Sept. 1 Holders of rec. Aug. 20
7.2% 1st preferred (monthly)
Philadelphia Co., $6 cum. pref. (quar.)_ •114 Oct. I Holders of rec. Sept. 1
Oct. 1 Holders of rec. Sept. 1
,(quar.)
5134
preferred
cumulative
$5
Sept.30 Holders of rec. Sept. I
Public Serv. El.& Gas,7% pref. (guar.).
$14 Sept.30 Holders of rec. Sept. 1
$5 preferred (quar.)
I Holders of rec. Aug. 20
p1.
(qr)
6%
Co.
Water
Sept.134
Val'y
Shenandoah
Southern Indiana Gas & Electric Co.I% Oct. 1 Holders of rec. Sept. 15
7% preferred (quar.)
134 Oct. 1 Holders of rec. Sept. 15
6% preferred (quar.)
1.65 Oct. 1 Holders of rec. Sept. 15
6.6% preferred (quar.)
Sept. 15 Holders of rec. Aug. 31
$4
$1
Co.
(qu.)
Pf.
cum.
El.
Standard GeV&
300. Sept. 30 Holders of rec. Aug. 31
United Gas Impr. Co., com.(quar.)_
Sept.30 Holders of rec. Aug. 31
$14
(quar.)
preferred
$5
1% Aug. 15 Holders of rec. Aug. 5
Utica Gas & Elec.. 7% pref. (quar.)
1% Sept. 1 Holders of rec. Aug. 15
West Ohio Gas Co.7% pref. (quar.)
1287
Financial Chronicle
Volume 135
Name of Company.
Banks.
Grace National Bank (quar.)
Fire Insurance.
Merchants Fire Ins. (quar.)
Pacific Amer. Fire Ins. (liquidating)
Title Ins. Corp.°1St. Louis (quar.)
When
Per
Cent, Payable.
Books Closed.
Days Inclusive.
234 Sept. 1 Holders of rec. Aug. 29
15c Aug. 15 Holders of rec. Aug.
Sept. 1 Holders of rec. Aug. 16
$1
12 Ac. Aug. 31 Holders of rec. Aug. 31
Miscellaneous.
Aluminum Ltd.,6% pref. div. omitted.
25c, Sept. 1 Holders of rec. Aug. 20
American Arch Co.(quar.)
Sept. 15 Holders of rec. Sept. 3
2
American Cigar Co., corn,(quar.)
Oct. 1 Holders of rec. Sept. 20
134
Preferred (guar.)
Sept. 1 Holders of rec. Aug. 20
$2
American Dock Co., pref. (quar.)
15c. Sept. 1 Holders of rec. Aug. 20
American Investment Co.(III.). B (qu.)_
50c. Oct. 3 Holders of rec. Sept. 5
American Sugar Refining Co.. corn.(qu.)
134 Oct. 3 Holders of rec. Sept. 5
Preferred (quar.)
1% Oct. 1 Holders of rec. Sept. 10
Armour & Co. 7% gtd. pref.(quer.)-Sept.30 Holders of rec. Sept. 20
Associated Invest. Co., com.(quar.)_ _ $1
$134 Sept.30 Holders of rec. Sept. 20
Preferred (quar.)
Sept. 1 Holders of rec. Aug. 19
750.
Atlas Corp.$3 pref. series A (quar.)
75c. Oct. I Holders of rec. Sept. 12
Beech-Nut Packing Co.. com.(quar.)_
Sept.30 Holders of rec. Sept. 3
10d.
Co.,Ltd.,ordinary
Tobacco
Amer.
British
6d. Sept.30 Holders of rec. Sept. 3
5% preferred
10d. Oct. 7 Holders of rec. Sept. 2
Amer. dep. rec. tor ord. shares
6d. Oct. 7 Holders of rec. Sept. 2
Amer. dep. rec. for 5% pref. rug
6d, Oct. 7 Holders of rec. Sept. 2
Amer. dep, rec. for 5% pref. bearer_
Burma Corp. Ltd., Am. dep. rec. (final) 51 an. Oct. 22 Holders of rec. Sept. 15
Canada Iron Foundries, Ltd.,com.-Div idend omitted
$134 Sept. 15 Holders of rec. Aug. 31
Preferred (semi-ann.)
Oct. 1 Holders of rec. Sept. 15
Canadian Gen, Elec. Co., Ltd.,com.(qu.) )Si
ti'4 Oct. 1 Holders of rec. Sept. 15
Preferred (war.)
Aug. 15 Holders of rec. Aug. 15
$5
Capitol Life Ins. (semi-ann.)
Sept.30 IIolders of rec. Sept. 8
$1
Chesebrough Mfg. Co. (quar.)
50c Sept.30 Holders of rec. Sept. 8
Extra
City Ice Co. of Kansas City (Mo.)-7% pref. d iv. actio n not taken.
Coats (J. P.) Amer.dep.reg,for ord.reg• 6d Oct. 7 Holders of rec. Aug. 19
Coca-Cola Intl Corp., com. (quar.)_ _ _ _ 5334 Oct. 1 Holders of rec. Sept. 14
50c Oct. 1 Holders of rec. Sept. 14
Extra
Consolidated Litho. Corp., pref. (quar.)_ $134 Sept. I Holders of rec. Aug. 22
Oct. I
IA
_
(qu.)_
pref.
6%
Sons,
&
Cottrell (C. B.)
Courtaulds, Ltd. (Amer. dep. rec.) - - - 3 3-5c Aug. 20 Holders of rec. July 19
Crum & Forster Insurance Sharesbe. Aug. 31 Holders of rec. Aug. 20
Common A & B (quar.)
194 Sept. 1 Holders of rec. Aug. 20
Daniels & Fisher Stores 6%% Of.(qu.)- Sept. 1 Holders of rec. Aug. 8
14
quar,)..
pref.
5%
Dartmouth Mfg Co.,
Dresser (S. R.) Mfg.. pref.-Div. omitte d.
50c. Sept. 15 Holders of rec. Aug. 24
Du Pont (E.I.)de Nem.& Co.. Com.(qu)
134 Oct. 25 Holders of rec. Oct. 10
Debenture stock (quar,)
El Dorado Oil Works (quar.)
3734e. Sept. 15 Holders of rec. Aug. 31
_
_
_
_
(quar.)
com.
Bldg.,
office
3794c. Oct. 1 Holders of rec. Sept. 15
Equitable
1% Oct. 1 Holders of rec. Sept. 15
Preferred (quar.)
First National Stores common (quar.)_ _ 6294c. Oct. I Holders of rec Sept. 12
Florsheim Shoe Co., $6 pref. (guar.)._ _ _ 5194 Oct. 1 Holders of rec. Sept. 15
2 5 4-5c. Aug. 20 Holders of rec. July 31
Frontenac Trust Shares
35e. Aug. 15 Holders of rec. Aug. 5
Gallaher Drug Co., pref. (quar.)
1% Aug. 15 Holders of me. Aug. 5
7% preferred (quar.)
MA Sept. 15 Holders of rec. Sept. 5
Gamewell Co., pref. (quar.)
Gen. Amer. Inv. Co., Inc..6% Pt.(qu.)_ h134 Oct. I Holders of rec. Sept. 20
A Oct. 1 Holders of rec. Sept. 20
6% preferred (quar.)
1% Oct. 1 Holders of rec. Sept. 16
Glidden Co., pref. (quar.)
Goodyear Tire &Rubber Co.,lot pf.(qu.) 51% Oct. 1 Holders of rec. Sept. 1
Aug. 27 Holders of rec. Aug. 6
Greater LouLsv. Say. & Bldg.Assn.(s.-a.) $3
3% Sept. 16 Holders of rec. Aug. 15
Harrods, Ltd., pref. (s.-a.)
5134 Sept.30 Holders of rec. Aug. 31
Hamilton United Theatres, pf. (quar.)
25c. Sept. 1 Holders of rec. Aug. 22
Heyden Chemical Co., corn. (quar.)__
$194 Oct. 1 Holders of rec. Sept. 22
Preferred (quar.)
30c. Sept. 1 Holders of rec. Aug. 22
Hobart Mfg. Co. (quar.)
Hollinger Consolldated Gold Mines, I.td.
Sr. Sept. 8 IIolders of rec. Aug. 25
(monthly)
Holophane Co.,Inc., com.-Div. passed.
25c. Sept. 1 Holders of rec. Aug. 1
Industrial & Power Secs. Co.(quar.) 25e. Dec. 1 Holders of rec. Nov. 1
(quarterly)
Sept. 15 Holders of rec. Aug. 31
u25c.
_
(qu.)
International Petroleum Co., Ltd.
International Salt Co., cap. stock (quar.) 3734c. Oct. 1 Holders of rec. Sept. 155
50c. Sept. 15 Holders of rec. Aug. 31
Katz Drug Co., corn. (quar.) _
Oct. 1 Holders of rec. Sept. 15
81
Preferred (guar.)
25c. Oct. 1 Holders of rec. Sept. 12
Kimberly-Clark Corp., com.(quar.)_ _ _ _
Oct. 1 Holders of rec. Sept. 12
5134
Preferred (quar.)
Lehigh Portl. Cement Co.(Pa.), pt.(qu.) 5194 Oct. I Holders of rec. Sept. 14
Sept. 15 Holders of rec. Sept. 1
3794c.
_
(quar.)_
common
Corp.,
Lily-Tulip Cup
1% Oct. 1 Holders of rec. Sept. 15
Link Belt, 634% preferred (quar.)
Lord Baltimore Hotel, 1st pref.-Dividen d omit ted,
Lyon Metal Products, pref. div.-Action doterr ed
20c. Sept.30 Holders of rec. Sept. I
Marine Midland Corp., corn. (quar.)_
McClotchy Newspapers. 7% pref. (qu.) 43%c. Sept. 1 Holders of rec. Aug. 30
cleod Building Ltd., pref. (quar.)_ _ _ _ 51% Oct. 1
Mead Corp., no pref. div.-Action take n.
Holders of rec. Sept.16
25c. Oct. 1
Mesta Machine Co. common (guar.).
51 34 Oct. 1 Holders of rec. opt. 16
Preferred (quar.)
of rec. Aug. 20
Holders
1
Sept.
10c.
(quar.)
Co.
Car
Meteor Motor
Miller & Hart, Inc., $3 Allpref. (quar.)_ _ hl5c. Oct. I Holders of rec. Sept. 15
Mo. River Sioux City Ildge Co., pf.(qu,) 5134 Oct. 15 Holders of rec. Sept.30
Monroe Loan Society, el. A, pref. (qu.)_ 5134 Sept. 1 Holders of rec. Aug. 20
50c. Sept. 15 Holders of rec. Aug. 27
Morrell (John) & Co., Inc. com. (qu.)_ _
Sept. 1 Holders of rec. Aug. 25
$1
Morris Plan Ins. Society (quar.)
50c. Oct. 1 Holder of rec. Sept.20
Motor Products Corp. (guar.)
50c. Oct. 1 Holders of rec. Sept. 15
National Distillers Products, pref
National Linen Service. $7 pref. (s-a)-- - 5394 Sept. 1 Holders of rec. Aug. 20
20e. Oct. 1 IIolders of rec. Sept. 20
National Steel Car Corp.(guar.)
National Surety (N. Y.), common.-Div ldend passed.
New England Furn. & Carp.,'pref.-Dly Mend omitted
5194 Sept. 1 Holders of rec. Aug. 20
Package Machinery (quar.)
25o. Sept. 15 Holders of rec. Sept. 1
Penick dr Ford, Ltd.(quar.)
25c. Oct. I Holders of rec. Sept. 8
Peoples Drug Stores common (guar.).
Preferred (quar.)
5194 Sept. 15 Holders of rec. Sept. 1
Pepperell Mfg.-Dividend omitted.
$134 Oct. 1 Holders of rec. Sept. 10
Pet Milk Co., pref. (quar.)
Sc. Sept. I Holders of rec. Aug. 19
Pioneer Mill Co.. Ltd. (monthly)
14 Oct. I Holders of rec. Sept. 9
Pure 011 Co..5594% pref. (guar.)
6% preferred (guar.)
59.4 Oct. 11 Holders of rec. Sept. 9
Oct. 1 Holders of rec. Sept. 9
2
8% preferred (quar.)
Oct. 15 Holders of rec. Oct. 1
$1
Quaker Oats common (quar.)
194 Nov. 30 Holders of rec. Nov. 1
6% preferred (quar.)
15c. Sept. 15 Holders of rec. Aug. 31
Raybestos-Manhattan Co., Inc. (Qum.)
3794c Sept. 15 Holders of tee. Aug. 31
Reeves (D.) Inc., com. (quar.)
194 Sept. 15 Holders of rec. Aug. 31
6 9.4% preferred (quar.)
Reliance Grain. pref. (quar.)
519.4 Sept. 15 Holders of rec. Aug. 31
51% Oct. 1 Holders of rec. Sept. 23
Hike Kumler Co., pref. (quar.)
25c. Sept. 15 Holders of rec. Aug. 31
Schiff (The) Co., common (quar,)
$14 Sept. 15 Holders of rec. Aug. 31
Preferred (guar.)
750. Sept. I Holders of rec. Aug. 15
Secord (L.) Candy'(quar.)
50c. Aug. 15 Holders of rec. Aug. 12
Sioux City Stockyards, com.(quar.)_ _ _ _
50c. Aug. 15 Holders of rec. Aug. 12
Preferred (quar.)
Smith Alsop Paint & Varnish,7% pref.- Divide nd pass ed.
75c. Sept.50 Holders of rec. Sept. 10
(qr.)_
com.
Tacony-Palmyra Bridge Co.
75c. Sept.50 Holders of rec. Sept. 10
Class A (quar.)
Tex-O-Kan Flour Mills Co.,7% Pf.(qu.) I% Sept. 1 Holders of rec. Aug. 15
10c. Sept. 15 Holders of rec. Sept. 1
20th Century Fixed Tr.Sharesser.B coup.
30e. Sept. 1 Holders of rec. Aug. 15
a.)
Series A Fixed Trust shares
Sc. Sept. 1 Holders of rec. Aug. 22
Mfg.
Co., Inc
Unexcelled
10c. Sept.24 Holders of rec. Sept. 9
United Elastic Corp. (quar.)
Van Raalte Co.,Inc.-lst pref. dividend passed
600. Sept. 15 lIcIders of rec. Sept. 1
Viking Pump preferred (quar.)
62%c. Oct. 1 Holders of rec. Sept. 15
Vortex Cup Co., class A (quar.)
25c, Oct. 1 Holders of rec. Sept. 15
(quar.)
Common
379.Sc. Oct. 1 Holders of rec. Sept. 20
Waldorf System Inc. (quar.)
25e. Aug. 31 Holders of rec. Aug. 15
Welch Grape Juice, com.(quar.)
Preferred (guar.)
$134 Aug. 31 Holders of rec. Aug. 15
2c. Sept. 15 Holders of rec. Aug. 31
Wellington Oil Co., Ltd. (quar.)
9c. Aug. 25 Holders of rec. Aug. 15
West Coast Life Insurance Co. (s-a)-Wolverine Brass Works common-Divi dend o mitted.
1288
Financial Chronicle
Below we give the dividends announced in previous weeks
and not yet paid. This list does not include dividends announced this week, these being given in the preceding table.
Name of Company
Railroads (Steam).
Augusta de Savannah RR.(s-a)
Extra
Bangor & Aroostook RR.Co.. com.(qu.)
Preferred (quar.)
Boston & Providence RR. Co.(guar.).Canadian Pacific Ry. Co.. pref. (s.-a.) Clue. N.0.& Tex. Pat. RR.5% pf.(qu)
Cleve. Sr Pitts, fly. Co.. reg. guar.(qu.)_
Special guar. (guar.)
Delaware & Hudson Co
Fort Wayne & Jackson RR. pref.(s.-a.)_
Norfolk & Western corn (guar.)
North Pennsylvania RR. (guar.)
Northern RR. of N. J.. 4% gtd. (guar.).
Oswego & Syracuse RR.(8.-a.)
Peterborough RR.(semi-ann.)
Pittsburgh Bessemer & Lake Erie, corn_
Pittsbg Ft. Wayne & Chic.. corn.(au.).Common (quar.)
Preferred (guar.)
Preferred (guar.)
Reading Co., lot preferred (guar.)
2d preferred (guar.)
Union Pacific RR. Co., coca. (guar.)...
Preferred (s-a)
United N. J., RR. & Canal ,quar.).._
When
Per
Cent. Payable.
Books Closed.
Days Int-lustre.
234 Jan 5'3
25e. Jan 53
50c. Oct.
Holders of rec. Aug. 31a
1% Oct.
Holders of rec. Aug. 3Ia
234 Oct.
Holders of rec. Sept. 20
2
Oct.
Holders of rec. Sept. 1
1% Sept.
Holders of rec. Aug. 15
8734c. Sept.
Holders of rec. Aug. 10
50c. Sept.
Holders of rec. Aug. 10
134 Sept.2 Holders of rec. Aug. 27
2% Sept.
Holders of rec. Aug. 20
2
Sept. 1
Holders of rec. Aug. 31
2
Aug. 2 Holders of rec. Aug. 15
1
Sept.
Holders of reo. Aug. 20
434 Aug. 2 Holders of rec. Aug 8
1% Oct.
Holders of rec. Sept.20
135 Oct.
Holders of rec. Sept. 26
1% Oct.
Holders of rec. Sept. 10
134 Jan 23 Holders of rec. Dec. 10
1% Oct.
Holders of rec. Sept. 10
1% Jan 33 Holders of rec. Dec .10
50c. Sept.
Holders of rec. Aug. 18
50c. Oct. 1
Holders of rec. Sept. 22
134 Oct.
Holders of rec. Sept. la
2
Oct.
Holders of rec. Sept. la
234 Oct. 1
Holders of rec. Sept. 20
Public Utilities.
American Water Works& Elec. Co., Inc.
$6 1st preferred (quar.)
$134 Oct.
Holders of rec. Spa. 9
Baton Rouge Elec.,$6 pref.(guar.)
Holders of rec. Aug. 15
$11.4 Sept.
Birmingham Water Wks.6% Pf. (qu.)
134 Sept. 15 Holders of rec. Sept. 1
Brazilian Traction. Light & Power
e2 Sept. 1 Holders of rec. July 30
Bridgeport Gas Light (guar.)
60e. Sept. 30 Holders of rec. Sept. 16
Brooklyn Edison Co. (guar.)
$2 Sept. 1 Holders of roe. Aug. 9
Brooklyn Union Gas (guar.)
$134 Oct. 1 Holders of rec. Sept. 1
Butler Water Co.7% pref.(guar.)
1% Sept. 15 Holders of rec. Sept. 1
Cables & Wireless, Ltd., 534% Pref.__ usz2% Aug. 22 Holders of rec. July 14
Amer. dep. reo. 534% preferred
tez2% Aug. 22 Holders of rec. July 14
Canadian Hydro-Electrlo Corp.. Ltd.
8% 1st preferred (guar.)
Holders of rec. Aug. is
1(4 Sept.
Central Arkansas Pub. Ser .pref. (qu.).... $14 Sept.
Holders of rec. Aug. 15
Cent. Miss. Val. El. Prop.6% pt. (Ou.). 13.4 Sept.
Holders of rec. Aug. 15
Citizens Gas (Indiana) 5% pref.(qua?.). 134 Sept.
Holders of rec. Aug. '20
Cleveland Elec. Illuninating. pref. (qu.) $14 Sept.
Holders of rec. Aug. 15
Commonwealth & Southern Corp.56 preferred (quar.)
$14 Oct.
Holders of reo. Sept. 9
Commonwealth UtilitiesCommon, class A & B (guar.)
20e. Sept. 30 Holders of rec. Sept. 15
Preferred A (guar.)
$1 34 Oct. 1 Holders of rec. Sept. 15
Preferred B (guar.)
$134 Oct. I Holders of rec. Sept. 15
Preferred C (guar.)
$1% Dee. 1 Holders of rec. Nov. 15
Connecticut Light & Pow 534% pf (qu)
134 Sept. 1 Holders of rec. Aug. 15
634% preferred (guar.)
1% Sept. 1 Holders of rec. Aug. 15
Connecticut Power Co. (quar.)
6234c Sept. 1 Holders of rec. Aug. 15
Consolidated Gas (N. Y.). (quar.)
Si Sept. 15 Holders of reo. Aug. 9
Consol. Gas., Elec. Lt. & Pow .(Balt.)Common (guar.)
90c. Oct. 1 Holders of rec. Sept. 15
Preferred A (guar.)
$I% Oct. 1 Holders of rec. Sept. 15
Preferred D (guar.)
$134 Oct. 1 Holders of rec. Sept. 15
Preferred E (guar.)
$1% Oct. 1 Holders of rec. Sept. 15
Consumers Power Co., $5 pref.(quar.)...
1% Oct. 1 Holders of rec. Sept .15
6% preferred (guar.)
134 Oct. 1 Holders of rec. Sept. 15
6.6% preferred (guar.)
1.65 Oct. 1 Holders of rec. Sept. 15
7% preferred (monthly)
1% Oct. 1 Holders of rec. Sept. 15
6% preferred (monthly)
50c. Sept. 1 Holders of rec. Aug. 15
6% preferred (monthly)
50c. Oct. 1 Holders of rec. Aug. 15
6.6% preferred (monthly)
55e. Sept. 1 Holders of rec. Aug. 15
6.6% preferred (monthly)
55c. Oct. 1 Holders of rec. Sept. 15
Dayton Power & Light pref.(monthly)
50c Sept. 1 Holders of rec. Aug. 20
E.St. L.& Interban W.Co.7% Pt.(qu.) 1% Sept. 1 Holders of rec. Aug. 20
6% Preferred guar
134 Sept. 1 Holders of rec. Aug. 20
Eastern Minn. Power $6 pref. (quar.)-- - $1 34 Sept. 1 Holders of rec. Aug. 15
El Paso Elec., 7% pre/. (guar.)
1St Oct. 15 Holders of roe. Sept. 30
Empire & Bay State Tel.,4% guar.(qu.) $1 Sept. I Holders of rec. Aug. 20
Empire Gas & Elect.6% pref. Cl. A (qr.)
134 Sept. 1 Holders of rec. July 29
7% preferred, class C (guar.)
14 Sept. 1 Holders of roe. July 29
6% preferred, class D (guar.)
134 Sept. 1 Holders of rec. July 29
Escanaba (Mich.)P & Tr.,6% Pt.(au).
134 NoV. 1 Holders of rec. Oct. 27
Federal light dr Traction, pref. (guar.). $1 34 Sept. 1 Holders of rec. Aug. 15
Filth Avenue Bus Securities Corp.(qu.).
16e Sept.29 Holders of rec. Sept. 15
Green Mountain Power 56 Pref.(guar.)- $1 3.4 Sept. 1 Holders of rec. Aug. 15
Gulf States Utilities. 6% pref. (quar.).... 134 Sept. 15 Holders of roe. Sept. 1
$534 preferred (guar.)
$134 Sept. 15 Holders of rec. Sept. 1
Honolulu Gas Co. (monthly)
15c. Aug. 20 Holders of rec. Aug. 15
Huntington Water Corp.7% pref.(qM.). 1% Sept. 1 Holders of rec. Aug. 20
6% preferred (guar.)
14 Sept. I Holders of reo. Aug. 20
Indianapolis Water Co.,5% pref. (qu.). 134 Oct. 1 Holders of rec. Sept. 12
Kan. City Pr. Sc Lt. Co. Cl. B pf.(qui _ $1 34 Oct. 1 Holders of rec. Sept. 14
Kentucky Utilities Co.. 7% pref. D (qu.) 874C. Aug. 20 Holders of rec. Aug. 1
Key West Elect CO., pref. (guar.)._ _ _ $134 Sept. 1 Holders of rec. Aug. 15
Keystone Telep. Co (Phila.) $4 pf (qu.) El
Sept. 1 Holders of rec. Aug. 22
Laclede Gas Light Co.common (guar.)- $134 Sept. 15 Holders of rec. Sept. 1
Lehigh Power Securities Corp
25c Sept. 1 Holders of rec. Aug. 20
Lexington Water, 7% pref. (guar.)
1% Sept. 1 Holders of rec. Aug. 20
Louisville G.& E.(Del.) el. A,com.(qu.) 43%c. Sept. 24 Holders of rec. Aug. 31
Class B common (guar.)
43%c. Sept. 24 Holders of rec. Aug. 31
Malone Light & Power corn. monthly.....
15c Aug. 31 Holders of rec. Aug. 20
Common(monthly)
15c. Sept. 30 Holders of rec. Sept. 20
Milwaukee El. Hy. dr Light Co.
6% preferred (1921)(guar.)
134 Sept. 1 Holders of rex Aug. 15
Monongahela West Penn Publ Serv. Co.
7% preferred (guar.)
134 Oct. 1 Holders of rec. Sept. 15
Muncie Water Works Co.8% Pt. too.)
2
Sept. 15 Holders of roe. Sept. I
Mutual Telephone Co., Hawaii (mthly.)
Sc. Aug. 20 Holders of roe. Aug. 10
National Power & Light Co. corn.(guar.)
25e. Sept. 1 Holders of rec. Aug. 22
New Rochelle Water, 7% pref. (guar.)._
1% Sept. 1 Holders of rec. Aug. 20
New York Power & Light Corp.-7% preferred (guar.)
134 Oct. I Holders of rec. Sept. 15
$6 preferred (guar.)
$13.4 Oct. 1 Holders of rec. Sept. 15
New York Steam Corp. corn. (guar.)___
050. Sept. 1 Holders of roe. Aug. 15
North American Edison Co.. pref.(qu.).
34 Sept. 1 Holders of rec. Aug. 15
North Shore Gas, pref. (guar.)
134 Oct. 1 Holders of roe. Sept. 10
Northern Liberties Gas (s-a)
Sept. 12 Holders of rec. Aug. 1
Northern States Power (Wis.) M.(qu.)
$1 34 Sept. 1 Holders of rec. Aug. 20
Northw. Public Serv., 7% pref. (guar.). 1% Sept. 1 holders of rec. Aug. 20
6% preferred (guar.)
134 Sept. 1 Holders of rec. Aug. 20
Nova Scotia Lt.& Pr. Co.. Ltd., pf.(gu.) 13134 Sept. 1 Holders of rec. Aug. 16
Ohio Power Co.6% pref.(guar.)
134 Sept. 1 Holders of rec. Aug. 8
Ohio Public Service Co.7% pt.(mthly.) 58 1-3c Sept. 1 Holders of rec. Aug. 15
6% preferred (monthly)
50c. Sept. 1 Holders of rec. Aug. 15
5% preferred (monthly)
41 2-3c Sept. 1 Holders of rec. Aug. 15
Oklahoma Gas & El. Co.6% Pref.(qu.). 134 Sept. 15 Holders of rec. Aug. 31
7% preferred (guar.)
1% Sept. 15 Holders of rec. Aug. 31
Oregon-Wash. Water Serv. $6 Pt. (qu.) $1 34 Sept. 1 Holders of rec. Aug. 15
Otter Tall Power (Minn.), common._
$1 34 Sept. 1 Holders of rec. Aug. 15
Perunsti as' Telephone corn. (guar.)
35c. Oct. 1 Holders of rec. Sept. 15
Common (guar.)
35c, Jan 1'33 Holders of rec. Deo. 15
7% preferred (guar.)
1% Aug. 15 Holders of rec. Aug.5
7% preferred (quar.)
134 Nov. 15 Holders of rec. Nov. 5
7% preferred (guar.)
1% 2 15 '33 Holders of roe. Feb. 5
Pennsylvania Power Co.56.60 preferred (monthly)
55c. Sept. 1 Holders of re0. Aug. 20
ES preferred guar.,
$134 Sept. I Holders of rec. Aug. 20
Penna. State Water Corp..$7 pref.(gr.). $131 Sept. 1 Holders of roe. Aug. 20
Pennsylvania Water & Pow. Co.(guar.)
75c Oct. 1 Holders of rec. Sept. 15
Philadelphia Co..5% Pref. (s.-a.)
25o. Sept. 1 Holders of roe. Aug. 10
Name of Company.
Aug. 20 1932
Per
When
Cent. Payable.
Books Closed.
Days !nativity.
Public Utilities (Concluded).
Philadelphia Elec. Pow. Co.8% Pf. (MI.)
50e. Oct.
Holders of rec. Sept. 10
Phila. Suburban Water Co., pref.(qu.)._
Holders of rec. Aug. 120
134 Sept.
Potomac Elec. Power Co.6% pf. (qu.)._
134 Sept.
Holders of roe. Aug. 16
534% preferred (guar.)
Holders of rec. Aug. 16
134 Sept.
Public Electric Light. pref. (guar.)
$134 Sept.
Holders of rec. Aug. 20
Pub. Serv. Co. of Colo. 7% pf. (mthly.) 58 1-3e Sept.
Holders of rec. Aug. 15
6% preferred (monthly)
50c. Sept.
Holders of rec. Aug. 15
5% preferred (monthly)
41 2-3e Sept.
Holders of rec. Aug. 15
Public Service Corp. of N.J., corn. (0U.)
80c. Sept. 30 Holders of rec. Sept. 1
55 preferred (guar.)
$134 Sept. 30 Holders of rec. Sept. 1
7% preferred (guar.)
134 Sept. 30 Holders of rec. Sept. 1
8% preferred (guar.)
2 Sept. 30 Holders of rec. Sept. 1
6% preferred (monthly)
50c. Aug. 31 Holders of rec. Aug. 1
6% preferred (monthly)
50e. Sept. 30 Holders of rec. Sept. 1
Rochester Gas & Elec., 7% pref. B (qu.). I% Sept.
Holders of rec. July 29
6% preferred C (guar.)
134 Sept.
Holders of rec. July 29
6% preferred D (guar.)
134 Sept.
Holders of rec. July 29
Rochester Telephone Corp. (guar.)-- - - $lq Oct.
Holders of rec. Sept. 20
614% preferred (guar.)
Ho'ders of rec. Sept. 20
13.4 Oct.
Savannah E .(IC Pow. Co., 6% pt.(s-a)Holders of rec. Sept. 2
3 Oct.
8% preferred A (guar.)
2
Oct.
Holders of rec. Sept. 2
734% preferred B (guar.)
Holders of rec. Sept. 2
134 Oct.
7% preferred C (guar.)
134 Oct.
Holders of rec. Sept. 2
634% preferred 0(guar.)
holders of rec. Sept. 2
134 Oct.
Second & 3d Sts. (Phila.) Pass. Ry.(qu.) 53
Oct.
Holders of rec. Sept. 1
Shenango Valley Water 6% Pref. (guar.) 134 Sept.
Holders
of rec. Aug. 20
South Carolina Power Co. 56 pref. (gr.). 5135 Oct.
Holders of rec. Sept. 15
Southern Calif. Edison7% preferred series A (guar.)
4334c Sept. 15 Holders of rec. Aug. 20
6% preferred series B (guar.)... ___. 37 34c Sept. 15 Holders
of rec. Aug. 20
Southern Calif. Gas Co.,634% pt.(au.), El% Aug. 31 Holders of rec. JUIY 31
Southern Cob. Pow. Co.. 7% pf. (qu.). 134 Sept.15 Holders of rec. Aug. 31
Standard
Power & Light
Corp.
Common and common B (guar.)
300. Sept. 1 Holders of rec. Aug. lb
Susquehanna Utilities Co. let pt.(qu.)... $134 Sept. 1 Holders of rec. Aug. 20
Tampa Gas Co..8% pref. (guar.)
2 Sept. 1
7% preferred
(guar.)
134 Sept. 1
Tennessee Electric Power Co.5% preferred (guar.)
134 Oct. 1 Holders of rec. Sept. 15
6% preferred (guar.)
134 Oct. 1 Holders of rec. Sept. 15
7% preferred (guar.)
134 Oct. 1 Holders of roe. Sept. 15
7.2% preferred (guar.)
1 4-5 Oct. 1 Holders of roe. Sept. 15
6% preferred (monthly)
50e. Sept. 1 Holders of rec. Aug. 15
6% preferred (monthly)
50e. Oct. 1 Holders of rec. Sept. 15
7.2% preferred (monthly)
60e. Sept. 1 Holders of rec. Aug. 15
7.2% preferred (monthly)
60e. Oct. 1 Holders of rec. Sept. 15
Terre Haute Water Wks.7% pt. (qu.).. _
134 Sept. 1 Holders of rec. Aug. 20
Texas Utilities Co. pref. (guar.)
$1
Sept. 1 Ilolders of rec. Aug. 20
Tide Water Power Co. $6 pref. (guar.)._ $1 34 Sept.
Ilolders of rec. Aug. 10
34
Toledo Edison Co. 7% pref. (mthly.).- - 58 1-3c Sept. 11 Holders of rec. Aug. 15
0% preferred (monthly)
50c. Sept. 1 Holders of rec. A Ug. 15
5% preferred (monthly)
41 2-3c Sept. 1 Holders of rec. Aug. 15
Tri-State Tel. At Tel. pref. (guar.)
15c. Sept. 1 Holders of rec. Aug. 15
United Gas Improvement Co. corn. (qu.)
30e. Sept. 30 Holders of rec. Aug. 31
Preferred (quar.)
Sept. 30 Holders of roe. Aug. 31
$14
United Light & Rye.(Deli7% preferred (monthly)
58 1-3c Sept. 1 Holders of roe. Aug. 15
6.36% preferred (monthly)
53e. Sept. 1 Holders of rec. Aug. 15
6% preferred (monthly)
50c. Sept. 1 Holders of roe. Aug. 15
Virginia Elec. & Power,6% pref. (guar.) 134 Sept. 20
Holders of rec. Aug. 31
Washington fly. St El. Co.5% pref.(qu.) 13.4 Sept. 1 Holders
of rec. Aug. 18
Preferred (guar.)
14 Sept. 1 Holders of rec. Aug. 18
1.1 heeling Electric 6% pref. (guar.)
134 Sept. I holders of rec. Aug. 8
Williamsport Water 56 pref. (guar.).- $134 Sept. 1 Holders of roe. Aug. 20
Wisc. Pub. Serv. Corp., 7% pt. (guar.). 134 Sept.20 Ho ders of rec. Aug. 31
6(4% preferred (guar.)
134 Sept.20 Holders of rec. Aug. 31
6% preferred (guar.)
134 Sept.20 Holders of rec. Aug. 31
Fire Insurance.
Boston Insurance Co
$4 Oct. I Holders of roe. Sept. 20
Miscellaneous.
Abbotta Denim, Inc. corn. (guar.)
600. Sept.
Holders of roe. Aug. 5
1st & 2nd. 7% preferred (guar.)
$1% Sept.
Holders of rec. Aug. 5
Affiliated Products, Inc.. corn. (W.).- 13 1-3c Sept.
Holders of reo. Aug. 18
Agnew Surpass Shoe Stores, Ltd., pf.(gu) l34 /et.
Holders of rec. Sept lb
Allegheny Steel Co.. pt. ((war.)
$1 34 Sept.
Holders of rec. Aug. 15
Aloe (II. G.) Co., prof. (guar.)
$1 34 Oct.
Holders of rec. Sept. 21
Aluminum Manufactures, corn. (qu.).- 50e. Sept.30 Holders of rec. Sept. 15
Common (guar.)
50e. Dec. 3 Holders of rec. Dec. 15
Preferred (guar.)
134 Sept. 30 Holders of rec. SePt• 15
Preferred (guar.)
1% Dec. 3 Holders of rec. Dec. 15
Amer. Bank Note Co.. pref. (guar.).- 75e. Oct.
Holders of rec. Sept. 12
Amer. Crayon Co., 6% pref. (quar.)....
134 Nov.
Holders of rec. Oct. 20
American Dock 8% pref. (guar.)
rSept.
2
Holders of rec. Aug. 20
American Envelope Co., 7% pref. (qu.)
1% Sept.
Holders of rec. Aug. 25
7% preferred (guar.)
1% Dec.
Holders of rec. Nov. 25
Amer. & Gen. Secur. Corp.. corn. (qu.).
10c. Sept.
Holders of rec. Aug. 15
Preferred $3 nor. (guar.)
758. Sept.
Holders of rec. Aug. 15
American Hardware Co., common (qu.)
50c. Oct.
Holders of rec. 'Sept. 15
Common (guar.)
50c. Jan 1'33 Holders of rec. Dee. Ill
American Home Products (monthly) 35e. Sept. 1 Holders of roe. Au, 150
American Hosiery, corn.(qua?.
50c. Sept. I
American Ice Co., pref.(guar.)
$1.50 Oct. 25 Holders of rec. Oct. 70
American Laundry Machin. (guar.).- - 30e. Sept. 1 Holders of rec. Aug. 22
Amer. Natl. Co.(Toledo), pref. A ((NJ1% Oct. I Holders of rec. Sept. 20
Isreferred A (quarterly)
134 Jan 133 Holders of rec. Dec. 20
Preferred B (quarterly)
13.4 Oct. 1 Holders of rec. Sept. 20
Preferred B (quarterly)
134 Jan 133 Holders of rec. Dee. 20
American Radiator Sr Standard Sanitary
Corp.. preferred (guar.)
1% Sept. 1 Holders of roe. Aug. 15
Amer. Steel Foundries, pref.
$1 34 Sept. 30 Holders of rec. Sept. IS
Stores Co.(guar.) (quar.)_Ameicn
50c. Oct. 1 Holders of rec. Spot. 15
Amer. Tobacco Co.. corn. & corn. B (qu.) 5
Sept. 1 Holders of rec. Aug. 10
Archer-Daniels-Midland Co.Common (guar.)
25c. Sept. 1 Holders of roe. Aug. 20
Atlantic Refining, common (guar.)
25e. Sept. 15 holders of rec. Aug.
Automotive Gear Works, pref. (qua?.). 434c. Sept. 1 Holders of rec. Aug. 22
20
Baird Machine.0% pref. (guar.)
1% Sept. 1
Barn berger(L.) & Co.,
% pref.(qu.) _
1% Sept.
Holders of rec. Aug. 12
Baran! Petroleum Co.(monthly)
50. Aug. 20 Holders of roe. July 30
Bankers National Invest., cl. A & B (qu)
28c. Aug. 25 Holders of rec. Aug. 13
Common (guar.)
7c. Aug. 25 Holders of rec. Aug. 13
Preferred (guar.)
15e. Aug. 25 Holders of rec. Aug. 13
Beaton & Caldwell (monthly)
1234o Sept. 1 Holders of roe. Aug. 31
Monthly
1234e Oct. I Holders of reo. Sept. 30
Belding-Cortical. Ltd., pref. (guar.)
I% Sept. 15 holders of rec. Aug. 31
Block Bros. Tobacco. coin.(guar.)
3734c. Nov. 15 Holders of rec. Nov. 10
Preferred (guar.)
134 Sept. 30 Holders of rec. Sept. 24
Preferred (guar.)
134 Dec. 31 Holders of rec. Dee. 24
Blue Ridge Corp., pref. (guar.)
175c. Sept. I Holders of rec. Aug. 5a
Bon Ami Co., class A (quar.)
$I
Oct. 30 Holders of roe. Oct. 15
Class B (guar.)
50e. Oct. 1 Holders of roe. Slept. 24
Borden Co.. common (guar.)
50c. Sept. 1 Holders of rec. Aug. 15
Bovril, Ltd.Amer dep. roe. 735% ord. reg. shs_
zw334 Setp. 8 Holders of roe. July 25
Amer. dep. ree, deferred reg. shares_ _ zw4
Sept. 8 Holders of roe. July 25
Deferred reg. shares
=4
Aug. 3 Holders of rec. July 21
734% ord reg. shares.
zw334 Aug. 3 Holders of rec. July 21
Brach (E. J.) & Sons (guar.)
10c. Sept.
Holders of rec. Aug. 13
Brennan Packing 8% pref. el. A ((War.). 1
Sept.
Holders of rec. Aug. '20
Drill Corp.. pref. (guar.)
1% Sept.
Holders of rec. Aug. 19
Brown Shoe Co. (guar.)
75c. Sept.
Holders of ree. Aug. 20
Buckeye Pipe Lino Co.(guar.)
750. Sept. 15 holders of rec. Aug. 19
Burroughs Adding Machine Co
20e. Sept. 0 'folders of reo. Aug. 8
Byllesby Engineering & Management
Corp.. preferred (s-a)
250. Sept. I Holders of rec. Aug. 10
Calamba Sugar Estates, corn. (quar.)..
40c. Oct. 1 Holders of rec. Sept. 15
7% preferred (guar.)
350. Oct. 1 Holders of rec. Sept. 15
Calumet Gold Mining Co.(Initial div.)._
(do. Aug. 20 Holders of roe. Aug. 10
Canada Bread Co., cl. 13. pref. (qua?.)..
50e. Sept. 1 Holders of rec. Aug. 15
Canadian 011 Co., Ltd.. pref. (qua?.).. $2 Oct. 1 Holders of roc. Sept. 20
Name of Company.
Per
IWhen
Cent. Payable.
Books Closed.
Days Inclusive.
Miscellaneous (Continued).
Canada Wire & Cable Co.. Ltd.
$1% Sept. 15 Holders of roe. Aug. 31
Preferred (quar.)
II5e. Aug. 30 Holders of roe. Aug. 15
Canadian Car & Fdy. Co., corn. (g11.)
Canadian Silk Products Corp., class A- /374 Aug. 31 Holders of rec. Aug. 15
14 Sept. 30 Holders of rec. Sept.20
Canfield Oil, 7% preferred (guar.)
134 Dec. 31 Holders of rec. Dec. 20
7% preferred (guar.)
124e. Aug. 31 Holders of rec. Aug. 15
Caterpillar Tractor Co. (quar.t
15o. Nov. 15 Holders of rec. Nov. 5
Centrifugal Pipe (guar.)
Century Ribbon Mills. Inc., pref.(gu.). $14 Sept. 1 Holders of rec. Aug. 20
14 Sept. 1 Holders of rec. Aug. 1
Chartered Inv.5% pref.(guar.)
50e. Sept. 1 Holders of rec. Aug. 19
Chicago Yellow Cab Co., Inc. (guar.).25c. Sept. 30 Holders of rec. Sept. 1
Chrysler Corp., common (guar.)
Cincinnati Wholesale Grocery Co.(s-a)- $3 Sept. 1 Holders of rec. Aug. 15
City Ice & Fuel Co., common (guar.).- 50c. Aug. 31 Holders of ree. Aug. 15
14 Sept. 1 Holders of ree. Aug. 15
6 % preferred (guar.)
105. Sept. 1 Holders of roe. Aug. 15
Cleveland Quarries Co.(guar.)
zed Oct.
Coats (,T. dr R.), Ltd. ord. reg.(quar.)- 40c Oct. 15 Holders of rec. Oct. 5
Coca-Cola Bottling Co. of St. L.(guar.)
Oct. I Holders of rec. Sept. 14
Coca-Cola Co.. common (guar.)
25e. Oct. 1 Holders of rec. Sept. 14
Extra
134 Sept. 1 Holders of rec. Aug. 19
Collins de Altman Corp.. pref.(guar.).
75c. Sept. I Holders of rec. Aug. 18a
Columbia Pictures Corp. pref. (guar.) _
Sept. 1 Holders of rec. Aug. 20
' (guar.)
Commonwealth Loan pref.
Community State Corp., cl. A (quar.)_ 124c. Sept. 30 Holders of rec. Sept. 28
12340. Dec. 31 Holders of rec. Dec. 27
Class A (guar.)
124 Sept. 1 Holders of rec. Aug. 10
Compo Shoe Machinery (Initial)
_
35c. Sept. 15 Holders of rec. Aug. 31
Compressed Industrial Gases(quar.)
25e. Sept. 15 Holders of rec. Sept. 1
Congoleum-Nairn. corn. (guar.)
Sept. 1 Holders of rec. Aug. 15
Preferred (guar.)
Conservative Financial, pref. (s.-a.)
40c. Sept. 1 Holders of rec. Aug. 1
Consolidated Cigar Corp.,7% pref.(au.)
14 Sept. 1 Holders of rec. Aug. 15a
Consolidated Ice Co.of Pitts.6% pf.(qu)
75c. Aug. 20 Holders of rec. Aug. 10
Consolidated Paper Co. 7% pref.(guar.) 174c Oct. 1 Holders of rec. Sept. 20
Continental Chicago Corp., pref.(quar.)
50c. Sept. 1 Holders of rec. Aug. 15
25e. Sept. 1 Holders of rec. Aug. 20
Como Mills. common (guar.)
Common (guar.)
25c. Dec. 1 Holders of rec. Nov. 19
14 Aug. 20 Holders of rec. July 19
Courtsulds, Ltd., common,interim
Creameries of Amer., 83 Pf. Cl. A (qu.) 3735c Sept 1 Holders of rec. Aug. 10
Crown Cork & Seal Co., Inc., pt.(guar.)
67c. Sept. 15 Holders of rec. Aug. 31
Oct. 1 Holders of rec. Sept. 13
Crown Willamette Paper Co.. let MI.__ h$1
Crown Zellerbach Corp.374e. Sept. 1 Holders of ree. Aug. 13
Class A & B preferred (guar.)
Crows Nest Pass Coal Co.(Toronto)(qU.) $1 Sept. 1., Holders of rec. Aug. 10
$14 Sept.15 Holders of rec. Sept. 1
Cuneo Press., Inc., preferred (guar.)._
$lid Oct. 1 Holders of rec. Sept. 20
Curtis Publishing Co.. pref. (quar.)
50c. Sept. 1 Holders of rec. Aug. 15
Cushman's Sons, Inc., corn.
$2 Sept. 1 Holders of rec. Aug. 15
$8 preferred (guar.)
lid Sept. 1 Holders of rec. Aug. 15
7% preferred
15c. Sept. I Holders of rec. Aug. 15
Davega Stores Corp.. corn.(guar.)
50o. Oct. 1 Holders of rec. Sept. 20
De Long Hook & Eye (guar.)
10c. Sept. 1 Holders of rec. Aug. 15
Deere & Co., new pref.(guar.)
50c). Sept. 1 Holders of rec. Aug. 15
Old preferred (guar.)
250. Sept. 1 Holders of rec. Aug. 15
Diamond Match Co., common (guar.)._
750. Sept. 1 Holders of rec. Aug. 15
Preferred (s-a)
$2 Sept. 1 Holders of rec. Aug. 19
Dictaphone corp.. preferred (quar.)
30c. Sept. 1 Holders of rec. Aug. 18
Doctor Pepper Co.(guar.)
30c. Dec. 1 Holders of rec. Nov. 18
Quarterly
Dominion Bridge, Ltd.(guar.)
Mk. Nov. 15 Holders of rec. Oct. 31
$1 Sept. 1 Holders of roe. Aug. 15a
Drug, Inc. (guar.)
25e. Sept. 1 Holders of rec. Aug. 22
Durham-Duplex Razor, pref. (quar.)
50c. Sept. 1 Holders of rec. July 30
Eastern Theatres. Ltd., Com.(quar.).._
75e. Oct. 1 Holders of rec. Sept. 3
Eastman Kodak Co., common (quar.)
Preferred (guar.)
$14 Oct. 1 Holders of rec. Sept. 3
Electric Ferries, Inc., preferred (quar.)
$2 Aug. 27 Holders of rec. July 27
Slid Nov. I Holders of rec. Oct. 2
Faber, Coe & Gregg, prof.(guar.)
Preferred (guar.)
81 34 Feb. 1 Holders of rec. Jan. 20
Farmers & Traders Life Ins. Co.(quar.). $24 Oct. 1 Holders of rec. Sept. 9
Faultless Rubber, common (guar.)
50e. Oct. 1 Holders of rec. Sept. 15
Finance Service Co.,corn. el. A de B (qu.)
20e. Sept. 1 Holders of rec. Aug. 15
Preferred (guar.)
17 4c Sept. 1 Holders of ree. Aug. 15
Firestone Tire & Rub., pref. A (quar.). $14 Sept. 1 Holders of rec. Aug. 15
Fitz Sirnons & Connell Dr. & Dk .(quar.)
25c Sept. 1 Holders of rec. Aug. 20
Food Mach., prat..(nlonthly)
50c Sept.15 Holders of rec. Sept. 10
Freeport Texas Co., corn. (guar.)
50o. Sept. 1 Holders of ree. Aug. 15
Gotland Merc. Laundry Co., pref.(qu.) 874c Sept.15 Holders of rec. Aug. 15
Gas Light & Coke Co., Ltd.. Amer. dep.
rec. & 4% guaranteed
Holders of ree. Aug. 5
zur 2 4-5
Gates Rubber Co., 7% pref. (quar.)--- - 14 Sept. 1 holders of rec. Aug. 15
General Cigar Co., preferred (quar.)_. _
$134 Sept. 1 Holders of rec. Aug. 23
General Motors Corp., common (qua!,)
2.50. Sept. 12 Holders of rec. Aug. 13
$14 Nov. 1 Holders of rec. Oct. 10
$5 preferred (guar.)
Golden Cycle Corp. (guar.)
400. Sept. 10 Holders of rec. Aug. 31
Gorham Mfg. Co., corn. (guar.)
25e. Sept. 1 Holders of rec. Aug. 15
Gottfried Baking Co.. Inc.. prof. (guar.)
134 Oct. 1 Holders of rec. Sept. 20
Preferred (guar.)
134 Jan 233 Holders of rec. Dec. 20
Grace (IV. R.) & Co.,6% prof.(s-a).3 Dec. 29 Holders of rec. Dee. 28
Preferred A and B (guar.)
2 Sept. 30 Holders of rec. Sept. 29
Preferred A and II (guar.)
2 Dec. 29 Holders of rec. Dec. 28
Grand Union, pref. (guar.)
750. Sept. 1 Holders of ree. Aug. 10
Great Atlantic & Pacific Tea Co. of Am.
Common (guar.)
$14 Sep% 1 Holders of rec. Aug. 5
Common extra
25e. Sept. 1 Holders of roe. Aug. 5
lot preferred
$134 Sept. 1 Holders of rec. Aug. 12
Great Northern Paper Co.(friar.)
60c. Sept. 1 Holders of rec. Aug. 20
Hale Bros.. Stores, Inc
15c. Sept. 1 Holders of rec. Aug. 15
Hancock 011 Co. of Cal.(Del.) cl. A (gr.)
100. Sept. 1 Holders of rec. Aug. 15
Class II (guar.)
10e. Sept. 1 Holders of rec. Aug. 15
Hardesty (It.) mfg.,7% pref.(guar.).- 14 Sept. 1 Holders of rec. Aug. 15
7% Preferred (guar.)
134 Dec. 1 Holders of rec. Nov. 15
Harrods, Ltd. (interim)
toz5
Sept. 16 Holders of rec. Aug. 15
American deposit receipts (interim). 11)2'5
Sept.23 Holders of ree. Aug. 15
Hathaway Bakeries. Inc..class A
3734c Sept. 1 Holders of roe. Aug. 15a
Preferred (guar.)
$134 Sept. 1 Holders of ree. Aug. I5a
Hewitt Bros. Soap, preferred (guar.)
2 Oct. 1 Holders of rec. Sept.30
Preferred (guar.)
2 Jan 1'33 Holders of rec. Dec. 20
Hibbard, Spencer, Bartlett & Co.(mthly)
100. Aug. 26 Holders of rec. Aug. 19
Monthly
100. Sept. 30 Holders of rec. Sept. 23
Hickok 011, class A (semi-ann.)
50o. Sept. 15 Holders of rec. Sept. 15
Hires (Chas. E.) Co.. corn. class A (qtr.)500. Sept. 1 Holders of roe. Aug. 15
Common class A (guar.)
50o. Dee. 1 Holders of ree. Nov. 15
Common class 13 (guar.)
Sept. 1 Holders of ree. Aug. 15
$1
Holt(Henry) & Co., class A (guar.)
22iie Sept. 1 Holders of rec. Aug. 11
Homestake Mining Co.(monthly)
75c. Aug. 25 Holders of rec. Aug. 20
Horn & Ilardart (N.Y.), pref.(guar.) _. $14 Sept. 1 Holders of rec. Aug. 11
Hoover & Allison Co., pref.(guar.)
Sept. 1 Holders of ree. Aug. 15
Imperial 011 Ltd. (guar)
1124e. Sept. 1 Holders of rec. Aug. 15
Imperial Tobacco of Great Britain & Irel andCommon
6%
zw634 Sept. I Holders of rec. Aug. 16
Ordinary reg Istred
rut4 Sept. 9 Holders of rec. Aug. 16
Amer. dep. rec, for ord. roe
Ingersoll-Rand Co., coin. (quar.)
50c. Sept. I Holders of roe. Aug. 12
10o. Aug. 31 Holders of rec. Aug. 24
Inter-Island Steam Navigation (mthly.)_
be. Sept. 30 Holders of rec. Sept. 24
Monthly
10o. Oct. 31 Holders of rec. Oct. 24
Monthly
10c. Nov. 30 Holders of rec. Nov. 24
Monthly
10e. Dec. 31 Holders of ree. Dec. 24
Monthly
Internat. Business Mach. Corp. (guar.) $14 Oct. 10 Holders of rec. Sept. 22
International Harvester Co.. pret.(quar.) $134 Sept. 1 Holders of rec. Aug. 5
International Milling 7% lot pf. (guar.) lid Sept. 1 Holders of rec. Aug. 20
134 Sept. 1 Holders of rec. Aug. 20
6% let preferred (guar.)
60e. Sept. 1
Internat'l Safety Razor Co., cl. A.(qu.)
50e. Sept. 1 Holders of rec. Aug. 15
Internat'l Shoe preferred (monthly)
50c. Oct. 1 Holders of rec. Sept. 16
Preferred (monthly)
50c. Nov. 1 Holders of ree. Oct. 15
Preferred (monthly)
50c. Dee. 1 Holders of rec. Nov. 15
Preferred (monthly)
Oct. 1 Holders of reo. Sept. 15
$2
Intertype Corp., let pref.(guar.)
10o. Sept. 1 Holders of rec. Aug. 20
Iron Fireman Mtg. Co.(guar.)
Sept. 1 Holders of rec. Aug. 25
Jantzen Knitting Mills, pref. (guar.)._ $l
Oct. 15 Holders of rec. Oct. 1
$1
Jewel Tea Co. (quar.)
75e. Oct. 1 Holders of roe. Sept. 13
Ames& Laughlin Steel Corp. pf.(guar.).
1289
Financial Chronicle
Volume 135
Name o/ Company.
When
Per
Cent. Payable
Hooks Cloaca
Days Inclusive.
Miscellaneous (Continued).
15c Sept. 30 Holders of rec. Sept. 20
Kalamazoo Vegetable Parchment (guar.)
15e Dec. 31 Holders of rec. Dee. 21
Quarterly
Kaufmann Dept. Stores, Inc., prof.(q1.1.) $14 Oct. 1 Holders of rec. Sept. 10
124c. Oct. 1 Holders of rec. Sept. 20
Kemper-Thomas Co., corn.(guar.)
1241. Jan1'33 Holders of ree. Dec. 20
Common (guar.)
lid Sept. 1 Holders Of rec. Aug. 20
Preferred (guar.)
14 Dec. 1 Holders of rec. Nov. 2
Preferred (guar.)
$14 Sept. 1 Holders of rec. Aug. 10
Kendall Co., class A pref.(guar.)
$1.25 Oct. 1 Holders of rec. Sept. 20
Keystone Cold Storage
25c. Oct. 1 Holders of rec. Sept. 20
Klein (Emil). corn. (guar.)
Aug. 20 Holders of roe. July 31
374c.
A
&
class
B
(guar.).
Knudsen Creamery,
37340. Nov. 20 Holders of rec. Oct. 31
Class A & B (guar.)
25e. Sept. I Holders of rec. Aug. 10
Kroger Grocery & Baking, corn. (guar.)
134 Sept.30 Holders of rec. Sept.20
6% preferred (guar.)
lid Nov. 1 Holders of rec. Oct. 20
7% 2d preferred (guar.)
Sept.30 Holders of rec. Sept. 20
623.4c.
Clark
(guar.)
Landers, Frary dr
624c. Dec. 31 Holders of roe. Dec. 21
Quarterly
$14 Aug. 31 Holders of roe. Aug. 19
Lanston Monotype Machine. (quar.)
20c. Aug. 31 Holders of rec. July 30
Lehigh Coal & Navigation (guar.)
50c. Sept. 1 Holders of ree. Aug. 16
Lehn & Fink Products Co.. corn. (guar.)
Tobacco
Co.
Myers
Liggett &
Sept. 1 Holders of rec. Aug. 15
$1
Common and common B (guar.)
Holders of rec. Aug. 25
250. Sept.
Lincoln Stores, Inc., corn. (guar.)
Sept. 1 Holders of rec. Aug. 25
$lid
Preferred (guar.;
Holders of rec. Aug. 15
Lindsay (C. W.) & Co.,64% Pf.(qui - 134 Sept.
Holders of rec. Aug. 15
20e. Sept.
Link-Belt, common (guar.)
Loblaw Groceterlas Co.. Ltd.Holders of rec. Aug. 12a
1200. Sept.
Class A & B (quan)
67c. Aug. 3 Holders of rec. Aug. 31
Lock Joint Pipe Co., corn.(monthly)
66c. Sept.30 Holders of rec. Sept. 30
Common (monthly)
67c. Oct. 3 Holders of rec. Oct. 31
Common (monthly)
67c. Nov. 30 Holders of rec. Nov. 30
Common (monthly)
66c. Dec. 3 Holders of rec. Dec. 31
Common (monthly)
Holders of rec. Oct. 1
Oct.
$2
Preferred (guar.)
Jan1'3 Holders of rec. Jan. 1
$2
Preferred (guar.)
Holders of rec. Sept. 19
$134 Oct.
Loose-Wiles Biscuit, pref.(guar.)
Holders of rec. Aug. 17
$134 Sept.
Lord & Taylor, 1st pref.(guar.)
Lucky Tiger Combination Gold Mines3c. Oct. 2 Holders of ree. Oct. 10
Common (quar.)
Holders of ree. Aug. 6
$134 Sept.
Ludlow Mfg. Associates (guar.)
Holders of rec. Sept. 20
14 Oct.
Lunkenheimer Co.. pref. (guar.)
1% Jan 2'3 Holders of rec. Dec. 22
Preferred (guar.)
14 Nov. 15 Holders of rec. Nov. 5
Magnin (1.) & Co.,6% pref.(quar.)
Holders of rec. Aug. 20
25c. Sept.
Manischewi(z B.) Co., common (quar.)
Holders of rec. Aug. 15
25e. Sept.
May Dept. Stores Co., common (guar.).
Holders of rec. Aug. 18
25e. Sept.
May Hosiery Mills, Inc., pref. (quar.)
Holders of rec. Aug. 15
Sept.
15
115e.
McColl Frontenac 011 corn. (guar.)- u25c. Sept. 1 Holders of rec. Aug. 2
McIntyre Porcupine Mine, Ltd
u124c Sept. 1 Holders of rec. Aug. 2
Extra
35e. Sept.30 Holders of rec. Sept. 7a
Mergenthaler Lino. Co. cap.stk.(qu.)..
814c. Sept. 1 Holders of rec. Aug. 20
Metal Textile Corp., prof.(guar.)
lid
Sept.15 Holders of rec. Aug. 26
Corp.,
Metro-Goldwyn Pictures
Pt• (.111.)
$134 Oct. 1 Holders of ree. Sept. 15
Metropolitan Ice Co.. prof.(guar.)
300. Oct. 1 Holders of rec. Sept. 15
Extra
250. Aug. 30 Holders of rec. July 30a
Mohawk Mining Co., cap. stock
Aug. 30 Holders of rec. July 30a
$2
Capital stock (extra)
Sept. 15 Holders of rec. Aug. 31
75c.
Montreal Loan & Mtg. Co.(guar.).Mt. Diablo 011, Mining & Devel.005e. Sept. 1 Holders of rec. Aug. 24
opment Co.(guar.)
40c. Sept. 1 Holders of rec. Aug. 22
Murphy (G. C.) Co., common (qual.)_
1% Sept. 1 Holders of rec. Aug. 16
Muskogee Co.6% prof.(guar.)
Sept. 28 Holders of rec. Sept. 15
$I%
pref.
(qu.)
Amer.,
Chemical
of
Mutual
$134 Dec. 28 Holders of rec. Dec. 1!)
Preferred (guar.)
70c Oct. 15 Holders of rec. Sept. 15a
National Biscuit Co., corn.(guar.)
$134 Aug. 31 Holders of rec. Aug. I2a
Preferred (guar.)
25c. Sept. 15 Holders of ree. Aug. 31
National Bond & Share Corp., cap. stock
50c. Oct. 1 Holders of rec. Sept. 5
corn.
(qu.)
Corp.,
Prod.
Dairy
National
$14 Oct. 1 Holdsrs of rec. Sept. 5
Class A & B preferred (guar.)
$134 Sept. 30 Holders of rec. Sept. 16
National Lead, com. (guar.)
$14 Sept.15 Holders of rec. Sept. 2
Preferred ci. A (guar.)
$14 Nov. 1 Holders of rec. Oct. 21
Preferred cl. B (guar.)
40e. Sept. 1 Holders of rec. Aug. 20
National Life & Accident Ins.(quar.)___
50c. Oct. 1 Holders of rec. Sept. 1
National Sugar Ref. Co. of N.J.(qu.)
15e. Sept. 30 Holders of rec. Sept. 24
Nelson, Baker & Co.(guar.)
Nov. 15 Holders of rec. Nov. 1
2
Neptune Meter, pref.(guar.)
New Bedford Cordage common (quar.)_ 124c Sept. 1 Holders of rec. Aug. 12
$134 Sept. 1 Holders of rec. Aug. 12
Preferred (quar.)
New England Grain Prod.. $7 pref.(qu.) $14 Oct. 1 Holders of rec. Sept.20
614 Jan 2'33 Holders of rec. Dec. 20
87 preferred (guar.)
$14 Oct. 15 Holders of rec. Oct. 1
86 preferred A (guar.)
$14 Jo 1533 Holders of rec. Jan 1'33
$e preferred A (guar.)
New York Shipbuilding Co., pref.(qu.) $14 Oct. 1 Holders of ree. Sept. 20
50c. Sept. 28 Holders of rec. Sept. 15
New York Transportation Co. (quar.)
273.4c Oct. I Holders of rec. Sept. 16
Newberry (J. J.) Co., common (quar.)
$134 Sept. 1 Holders of rec. Aug. 16
7% preferred (guar.)
Niagara Shares Corp.(Mel.)Holders of rec. Sept. 16
$114 Oct.
Class A. preferred (guar.)
$IM Jan 3'3 Holders of rec. Dec. 16
Class A preferred (guar.)
North & South America Corp.. class A
Holders of rec. Aug. 8
(r)
partial liquidating
Norwalk Tire & Rubber Co., pref.(qu.) 87340. Oct. 1 Holders of rec. Sept.22
Holders of rec. Aug. 20
Sept.
15
20c.
common
(guar.)
Oil
Co.,
Ohio
$14 Sept. 15 Holders of rec. Sept. 6
Preferred (guar.)
Ogilvie Flour Mills, Ltd., pref. (guar.)._ 1814 Sept. 1 Holders of rec. Aug. 22
25c. Oct. 1 Holders of rec. Sept. 15
Old Line Life Ins. Co. of Am.(quar.)
Oct. 1 Holders of rec. Sept. 15
$2
Omnibus Corp., pref. (guar.)
200. Aug. 20 Holders of rec. Aug. 10
Onomes Sugar (monthly)
$1 3.4 Oct. 1 Holders of rec. Sept.15
Owens Illinois Glass Co., pref.(guar.)
134 Nov. 1 Holders of rec. Oct. 20
Package Machinery. let pref.(guar.)- _
Pan American Petroleum & Trans. Co.
20e. Sept. 15 Holders of rec. Aug. 16
Common and class B (guar.)
250. Sept. 1 Holders of rec. Aug. 15
Patterson-Sargent Co., common (quar.)_
Peoder (David) Grocery Co., cl. A (qu.) 8734e. Sept. I Holders of rec. Aug. 20
25c. Sept. 15 Holders of rec. Sept. 1
Penick & Ford (quar.)
10c. Aug. 31 Holders of rec. Aug. 20
Perfection Stove Co., coin.(monthly).$14 Sept. 1 Holders of rec. Aug. 20
Pfaudler Co., pref. (guar.)
30c Sept. 1 Holders of rec. Aug. 15
Pillsbury Flour Mills, Inc., com.(guar.)
60c Oct. 1 Holders of rec. Sept.25
Plume & Atwood Mfg.(guar.)
Sept.15
$I
Pollock Paper & Box, Prof.(guar.)
$154 Dec. 15
Preferred (guar.)
Sept. 1 Holders of rec. Aug. 20
$3
Pratt Food Co. (guar.)
lid Sept.15 Holders of rec. Aug. 25
Procter & Gamble 5% pref.(guar.)
Dec. 1 Holders of rec. June 30
84
Puritan lee Co., pref.(semi-ann.)
25o. Sept. 1 Holders of rec. Aug. 15
Purity Bakeries Corp
$14 Aug. 31 Holders of rec. Aug. 1
Quaker Oats Co.. preferred (guar.)
50c. Sept. 1 Holders of rec. Aug. 20
Reliance International Corp.$3 pf.(qu.)
250. Sept. 1 Hold rs of rec. Aug. I5a
Reynolds Metals Co. (guar.)
14 Sept. 30 Holders of ree Sept. 15
Rich's Inc.,634% Preferred (guar.)
14 Sept. 1 Holders of rec. Aug. 15
Rolland Paper Co., Ltd., pref. (guar.)._
St. Louis General Investment,initial-. $5.85
750. Sept. 1 Holders of ree. Aug. 15
Second Invest. Corp.(R.I.)$3 pt.(qu.).
$14 Nov. 1 Holders of rec. Oct. 20
Servel, Inc.. preferred (guar.)
Sherwin-Williams Co.6% pref.(quer.). 134 Sept. 1 Holders of rec. Aug. 15
$14 Sept. 1 Holders of rec. Aug. 17
Simon (Franklin) & Co., pref. (guar.)
$14 Sept. 1 Holders of rec. Aug. 20
Simon (H.)& Sons, Ltd. pref.(Cluar.)
20e. Sept. 15 Holders of rec. Aug. 19
Socony-Vaeuum Corp.(guar.)
15c. Sept. 1 Holders of rec. Aug. 15
Southern Pipe Line Co
15e. Sept.30 Holders of rec. Sept.15
Spencer Kellogg & Sons. Inc.(qu.)
50e. Sept.15 Holders of reo. Aug. 15
Standard Oil Co. of Calif.(guar.)
250. Sept. 15 Holders of ree. Aug. 15
Standard 011 Co.(Indiana)
Standard Oil Co. of Nebraska (guar.)
- 25e. Sept.20 Holders of roe. Aug. 27
250. Sept.15 Holders of reo. Aug. 16
Standard 011 Co.(14.J.) cap.stk.(ruL)- Sept.15 Holders of roe. Aug. 18
$1
$100 par capital stock (guar.)
25o. Sept. 15 Holders of rec. Aug. 16
Extra (on $25 par shares)
81
(on
$100
par
Sept.15 Holders of ree. Aug. 16
Extra
shares)
75e. Oct. 1 Holders of rec. Sept. 9
Standard Steel Coast. Co.Ltd. A (qu.)
434e. Sept. 30 Holders of rec. Sept.15
&Ix Baer & Fuller 7% pref.(guar.)
434e. Dec. 31 Holders of rec. Dec. 15
7% Preferred (guar.)
Strawbridge & Clothier 6% pref.(qu.)_. 134 Sept. 1 Holders of ree. Aug. 15
$14 Sept. 1 Holders of rec. Aug. 10
StudebakerCorp.. Prof.(guar.)
1290
Financial Chronicle
Name of Company.
Per
When
Cent. Payable.
Books Closed.
Days Inclusive.
Miscellaneous (Concludued).
Stromberg-Carison Tel., mtg. Co.
61.4% preferred (gnat.)
154 Sept. 1 Holders of rec. Aug. 22
Sun Oil Co.,common(guar.)
25o Sept.15 Holders of rec. Aug. 25
Preferred (guar.)
$154 Sept. 1 Holders of rec. Aug. 10
Sunshine Biscuits. pref. (guar.)
3154 Oct. I Holders of rec. Sept. 19
Superior Portland Cement Co.,(mthly.) 2754c. Sept. 1 Holders of rec. Aug. 23
Telephone Invest. Corp. (monthly)-20e. Sept. 1 Holders of rec. Aug. 20
Texas Corp.(guar.)
25c. Oct. 1 Holders of rec. Sept. 2
Texas Gulf Sulphur Co.(guar.)
500. Sept.15 Holders of rec. Sept. 1
Timken Detroit Axle Co.. pref.(guar.)- 154 Sept. I Holders of rec. Aug. 20a
Timken Roller Bearing Co.(guar-)
260. Sept. 6 Holders of roe. Aug. 19
Triplex Safety Glass Co., Ltd..common z10
Underwood Elliott Fisher Co.. com.(qu.) 1254c Sept.30 Holders of rec. Sept. 12
Preferred (guar.)
Si,' Sept.30 Holders of rec. Sept. 12
Union Storage (guar.)
6254c Nov. 10 Holders of rec. Nov. 1
Union Tank Car Co.(guar.)
350. Sept. 1 Holders of rec. Aug. 15
United Aircraft ds Transport Corp.6% preferred (guar.
750. Oct. 1 Holders of rec. Sept. 10
United Biscuit of Amer.. coin. (gust.).. 500. Sept. 1 Holders of rec. Aug. 16
United Common Trust SharesSeries A-2 reg
1 3.8080 Sept. 1 Holders of rec. July 31
Series A-2 cony
1 3.8080 Sept. 1
United Fruit Co. (guar.;
50e. Oct. 1 Holders of rec. Sept. 1
United Milk Crate Corp.. clam A (qua 50c. Sept. 1 Holders of roe. Aug. 15
United Piece Dye Works, prof.(quar.)
154 Oct. 1 Holders of reo. Sept. 20a
Preferred (guar.)
144 Jan.2'33 Holders of rec. Dec. 22
United States Dairy Prod.. 1st pref.(411.) $154 Sept.
Holders of rec. Aug. 19
2d preferred (guar.)
$2
Sept. I Holders of rec. Aug. 19
United States Envelope Co.. pref. (s.-a.) $354 Sept. 1 Holders of rec. Aug. 15
U.S.Gypsum,common (guar.)
40c Oct. 1 Holders of rec. Sept. 15
Preferred (guar.)
$l
Oct. 1 Holders of rec. Sept. 15
U.S. Pipe & Fdy., corn.(guar.)
500. Oct. 20 Holders of rec. Sept. 300
Common (guar.)
500. Jn.2033 Holders of rec. Dec. 310
First preferred (guar.)
300. Oct. 20 Holders of rec. Sept. 30a
First preferred (guar.)
30c. Jn.20'33 Holders of rec. Doe. 310
United States Playing Card Co..(quar.).
25o. Oct. 1 Holders of rec. Sept. 20
United States Steel Corp.. pref.(gust.).. 8154 Aug. 30 Holders of rec. Aug. la
United Stores Corp.. pref. (guar.)
81510. Sept. 15 Holders of rec. Aug. 25
Victor 011 Co. (Initial)
100. Aug. 24 Holders of roe. Aug. 19
Vulcan Detinning Co., pref.(gust.).... 154 Oct. 20 Holders of rec. Oct. 70
Wagner Electric Corp.corn.(guar.)
1254c. Sept. I Holders of rec. Aug. 10
Waitt.4 Bond,Inc.,class A (guar.)
50c. Sept. 1 Holders of rec. Aug. 15
Warren (Northam) Corp.. pref. (quar.)75e. Sept. 1 Holders of rec. Aug. 15
Weill(Raphael) dr Co.. pref.(s-a)
$4 Sept. 1 Holders of rec. Aug. I
Wesson 011 & Snowdrift. pref.(guar.)- - - SI Sept. 1 Holders of rec. Aug. 15
Western Auto Supply Co.of K.C.
Class A and class B (guar.)
250. Sept. 1 Holders of rec. Aug. 20
Western Cartridge, pref. (guar.)
$11.4 Aug. 20 Holders of roc. Aug. 4
Western Dairy Products Inc., el. A (qu.) $11.4 Sept. 1 Holders of roe. Aug. 10
Western Pipe & Steel Co.of Calif.
Common (guar.)
25c. Sept. 5 Holders of rec. Aug. 25
Westmoreland. Inc
200. Oct. 1 Holders of rec. Sept. 15
White Motor Securities. prof. (rinaz.)
1M Sept.30 Holders of roe. Sept. 12
Winsted Hosiery (guar.)
2
Nov. 1 Holders of rec. Oct. 15
Wolverine Tube pref.(guar.)
$1 14 Sept. 1 Holders of rec. Aug. 15
Woolworth (F. W.) Co.(guar.)
60c. Sept. 1 Holders of rec. Aug. 10
Wrigley (William). Jr. (monthly)
25c. Sept. 1 Holders of rec. Aug. 20
(Monthly)
250. Oct. 1 Holders of rec. Sept. 20
(Monthly)
25o. Nov. 1 Holders of rec. Oct. 20
Yale & Towne Mfg. Co.(guar.)
250. Oct. 1 Holders of rec. Sept. 10
t The New York Stock Exchange has ruled that stock will not be quoted exdividend on this date and not until further notice.
j The New York Curb Exchange Association has ruled that stock will not be
quoted ex-dividend on this date and not until further notice.
a Transfer books not closed for this dividend.
d Correction. e Payable in stock.
f Payable in common stock. g Payable in scrip. h On account of accumulated
dividends. J Payable in preferred stock.
Blue Ridge Corp. will pay a dividend of 1-32nd of one share of common stock,
or at the option of the holder, U written notice is received by the Corp. on or before
Aug. 15, 1932. The. per share in cash.
r North & South Amer. Corp. (el. "A"). Partial liquidating dividend to the
extent of one share of preferred stock of the Columbian Holding Corp. (new co.)
for each share of class "A" stock held.
a Burma Corp., Ltd. (Amer. dep. rec.), final div. for the year ended June 30
1932. of one 1. anna per share, plus a cash bonus of one (1) anna per share, free
of British and Indian income taxes, but less deduction for expenses of depositary.
Payable in Canadian funds.
u Payable in United States funds.
ta Less deduction for expenses of depositary.
z Imes tax.
Weekly Return of New York City Clearing House.Beginning with March 31 1928, the New York City Clearing
House Association discontinued giving out all statements
previously issued and now make only the barest kind of
a report. The new returns show nothing but the deposits,
along with the capital and surplus. The Public National
Bank & Trust Co. and Manufacturers Trust Co. are now
members of the New York Clearing House Association,
having been admitted on Dec. 11 1930. See "Financial
Chronicle" of Dec. 31 1930, pages 3812-13. We give the
statement below in full:
STATEMENT OF MEMBERS OF THE NEW YORK CLEARING HOUSE
ASSOCIATION FOR THE WEEK ENDED;SATURDAY. AUG 12 1932
Clearing House
Members.
Bank of N.Y.dt Tr. Co_
Bank of Manhat.'Pr. Co.
National City Bank____
Chemical Bk.& Tr.Co__
Guaranty Trust Co
Manufacturers Tr. Co..
Cent. Hanover Bk.& Tr.
Corn Exch.Bank Tr. Co.
First National Bank
Irving Trust Co
Continental Bk.ez Tr. Co
Chase National Bank...
FilthAvenue Bank
Bankers Trust Co
Title Guar. dr Trust Co
MarineMidland Tr. Co.
Lawyers Trust Co
New York Trust Co-.
Comm'i Nat. Bk.at Tr.
HarrimanNat. Bk.dr Tr.
Public Nat. Bk.dr Tr. Co
*surplus and
*Capital.
Undivided
Profits.
Net Demand
Deposits,
Average.
Tinge
Deposits,
Average.
6,000,000
8,970,700
77,791,000
11,552,000
22,250,000
34,447,900
210,453,000
41,019,000
124,000,000
81.444,500 a901,856,000 178,507,000
45,260.600
212,233,000
26,672.000
21.000.000
90,000,000 180,495,700 b760,034,000
60,351,000
32,935.000
22,125.700
237,603,000
80,718,000
21,000,000
70.119,500
427,758,000
53,316,000
15,000,000
166,443,000
22,696,500
22,822,000
10.000,000 110.273,300
271,716,000
31,405,000
50.000,000
75,137.200
279,940,000
41,416.000
4,000,000
6.752,800
2,835,000
19,198,000
148,000.000 117,382,000 c1.012,787,000 128.732,000
500,000
3,573,500
35,853,000
2,988,000
25.000,000
42,835,000
76,847,800 d428,029,000
10,000.000
26,423.000
1,108,000
21,266.900
10.000,000
40.582,000
5,279.000
7,050.900
3.000.000
2,528,500
11.850.000
1,047.000
12,500.000
21,837,500
170,155,000
24,794,000
7,000,000
8,490,300
2,288,000
41,186,000
2.000,000
6,230,000
2,209,900
23,275,000
8,250,000
4,274,300
27,222,000
33,210,000
622,435,000 923,188,000 5,391,225.000 799,175,000
Totals
•As per official reports: National. June 30 1932: State, June 30 1932; Trust Companies, June 30 1932.
Includes deposits in foreign branches as follows: (a)$203,832,000;(b)549.095.000;
(c) $58,100,000: (d) 520,220.000.
Aug. 20 1932
The New York "Times" publishes regularly each week
returns of a number of banks and trust companies which are
not members of the New York Clearing House. The Public
National Bank & Trust Co. and Manufacturers Trust Co.,
having been admitted to membership in the New York
Clearing House Association on Dec. 11 1930, now report
weekly to the Association and the returns of these two banks
are therefore no longer shown below. The following are
the figures for the week ending Aug. 12:
INSTITUTIONS NOT IN THE CLEARING HOUSE WITH THE CLOSING OF
BUSINESS FOR THE WEEK ENDED FRIDAY, AUG. 12 1932.
NATIONAL BANKS-AVERAGE FIGURES.
.
Loans,
Other Cash Res. Dep., Dep. Other
Disc. and Gold. Including N. 1'. and Banks and
Gross
Investments.
Bank Notes Elsewhere, Trost Cos. Deposits.
$
ManhattanGrace National_ 16,811,254
2,200
83,079 1,486,360
BrooklynPeoples Nat'l--
5,000
83,385
5.875,913
$
$
$
$
$
362,832
400,434 14,055,140
24,108
5,227,565
TRUST COMPANIES-AVERAGE FIGURES.
Loans,
Disc'ts and
Investmls.
Cash.
Res. Dep., Dep. Other
N. Y. and Banks and
Elsewhere, Trust Cos.
ManhattanEmpire
Fulton
United States
i
$
a
52.660,100 *2.451,000 15,582.100
17,164,800 *2,223,900 1,068,400
64.958,529 7,061,368 19,137.154
BrooklynBrooklyn
Kings County
90.542.000
24,102,379
2,655,000 26,052,000
1,613.542 5,822,126
Gross
Deposits.
a
$
2,141.300 80,801,900
1,031,200 18,827.500
63,336,039
319,000 102,650,000
24.937,309
•Includes amount with Federal Reserve as follows: Empire, 81,177,500; Fulton.
$2,091,200.
Boston Clearing House Weekly Returns.-In the following we furnish a summary of all the items in the Boston
Clearing House weekly statement for a series of weeks:
BOSTON CLEARING HOUSE MEMBERS.
Week Ended
Aug. 17
1932.
Changes from
Previous
Week,
Week Ended
Aug. 10
1932.
$
$
$
Capital
79,900,000 Unchanged
79,900,000
Surplus and profits
66,666,000 Unchanged
66,666,000
Loans, dtsets & investle_ 550,188,000 +5,033,000 821,886,000
Individual depceita
139,732.000 -1,754.000 545.155.000
Due to banks
13,314,000 -2,377,000 141,486,000
Time deposits
212,832.000
+591,000 212.241.000
United States deposits... 8,877.000 -889,000
15,691,000
Exchanges for Cig. House 127,521.000
-207,000
9,768,000
Due from other banks
8,053,000
-179,000 127.728,000
Ree've in legs: depoeftles
81,145.000 -8,000.000
89,151.000
Cash in bank
832,753,000 +10.867,000
8,232,000
Res.In excess In F. R.Bk.
16.172.000 -8.200.000
24.372.000
Week Ended
Aug. 3.
1932,
S
79,900,000
66,660.000
821.932.000
550,060.000
134.268,000
211,821.000
8,523.000
12.193.000
117.381.000
88.001.000
8,011.000
28.701.000
Philadelphia Banks.-Beginning with the return for the
week ended Oct. 11 1930, the Philadelphia Clearing House
Association began issuing its weekly statement in a new
form. The trust companies that are not members of the
Federal Reserve System are no longer shown separately,
but are included with the rest. In addition, the companies
recently admitted to membership in the Association are
included. One other change has been made. Instead of
showing "Reserve with Federal Reserve Bank" and "Cash
in Vault" as separate items, the two are combined under
designation "Legal Reserve and Cash."
Reserve requirements for members of the Federal Reserve
System are 10% on demand deposits and 3% on time deposits, all to be kept with the Federal Reserve Bank. "Cash
in Vaults" is not a part of legal reserve. For trust companies not members of the Federal Reserve System the
reserve required is 10% on demand deposits and includes
"Reserve with Legal Depositaries" and "Cash in Vaults."
Beginning with the return for the week ended May 14 1928'
the Philadelphia Clearing House Association discontinued showing the reserve required and whether reserves held are above or
below requirements. This practice is continued.
Week Ended
Aug. 13
1932.
Changes from
Previous
Week.
Fee* Ended
Aug.6
1932.
Week Ended
Jul,30
1932.
$
$
Capital
77,011,000 Unchanged
77,011,000
77,011.000
Surplus and profits
201,324.000 Unchanged
201,324,000 202.090,000
Loans. dints. and invest- 1,133,472,000 -5,660,000 1,139,132,000 1.122.024,000
Exch. for Clearing House
12,824,000
-835,000
13,669.000
15,596,000
Due from banks
117,829,000 +6,303,000 111,526.000
90.235.000
Bank deposits
167,317.000 +2,324,000 164,993,000 100.570.000
Individual deposits
597,855.000
+268,000 597,587 000 573.045,000
Time deposits
265,112,000
+248,000 264,864,000 202.601,000
Total deposits
1 030 284,000 +2.840.000 1,027,444,000 990,242,000
Ree've with P.R.Bank89,570,000 +1,579.000
87,991,000
88,247,000
1291
Financial Chronicle
Volume 135
Weekly Return of the Federal Reserve Board.
showing the condition
The following is the return issued by the Federal Reserve Board Thursday afternoon, Aug. 18, and results
for the System
the
af the twelve Reserve banks at the close of business cn Wednesday. In the first table we present
of the corresponding week last year.
as a whole in comparison with the figures for the seven preceding weeks and with those
banks. The Federal Reserve Agents
The second table shows the resources and liabilities separately for each of the twelve
and
Accounts (third table following) gives details regarding transactions in Federal Reserve notes between the Comptroller
for the
Reserve Agents and between the latter and Federal Reserve banks. The Reserve Board's comment upon the returns
latest week appears on page 1242, being the first item in our department of "Current Events and Discussions."
17 1932.
COMBINED RESOURCES AND LIABILITIES OF THE FEDERAL RESERVE BANKS AT THE CLOSE OF BUSINESS AUG.
Aug. 17 1932. Aug. 10 1932. Aug. 3 1932. July 27 1932. July 20 1932.I Jtay 13 1932 July 6 1932. June 29 1932 Aug.191931.
RESOURCES.
Gold with Federal Reserve agents
Gold redemption fund with U.S. Tress
2,046.992.000 2,018.692.000 1,987,282,000 1,959,552.000 1,954.312,000 1,929,862,000 1,926,767,000 1,918,617.000 2,124,088,000
29,999,000
61,256,000' 59,798,000
63,628,0001 62,864,000
62,173.000j 62,986,000
61,476,000
63,643,000
2,017,940,000 1.992,726,000 1,988,023,000,1.978,415,000 2,154,087,000
Gold held exclusively agst. F. R. notes_ 2,108,468,000 2,080.865.000 2,050.268,000 2,023.195.000 245,086,000 260,356,000 250.643.000 265.672,000 434,736,000
261,792,000 256,673,000 245,805.000 249.735.000
Gold settlement fund with F. It. Board
345.836,000 335.015,000 339.784.0001 335,287,000 884,038,000
357,197,000
342.888,000
347,780,000
348,212,000
banks_
by
held
certificates
Gold and gold
2,727,457,000 2.680,426.0002,643,853,000 2.621.142.000 2.608,862.000 2,588,097,000 2,578,450.000 2,579,374.000 3,472,861,000
Total gold reserves
202,259,000 200.706,000 201,505.000 205,214.000 200,314,000 199,705,000 189,359.0001 202.567,000 169,727,000
Reserves other than gold
2,881,132,000 2,845,358.000 2,826,356.000 2,809,176,000 2,787,802,000 2,767.809.000'2.781,94l.000 3,642,588,000
2,929,716,000
reserves
Total
74,042,000
69,975.000
76,901 000
67,836.000
74,980,000
72,842,000
70,818,000
77.666,000
70,714,000
Non-reserve cash
Bills discounted:
93,642,000
201,921,000 190.828.000 182,693,000
213,130,000
166,543,000
161,837,000
202,161.000
182.088,000
Govt.
S.
obligations._
Secured by U.
281,023,000 285,395,000 305.095.000 323,219.000 324,435,000 313,649,000 308,998,000 287,135,000 136,967,000
Other bills discounted
Total bills discounted
Bills bought in open market
U. S. Government securities:
Bonds
Treasury notes
Special Treasury certificates
Certificates and bills
Total U. S. Government securities
Other securities
Foreign loans on gold
442,860,000
35,890,000
451,938,000
38,720,000
487,183,000
40,693,000
525.380.000
39,700,000
537,565.000
51,902.000
515,570.000
61,621,000
499.826,000
77,353.000
469.828,000
63,519,000
230,609,000
154,628,000
420,815,000
369,084,000
420,858,000
351,027.000
420,934.000
323,078,000
421,021.000
268,474,000
420 890.000
268,551,000
413,927,000
266.477,000
429,004,000
274,746,000
434.532,000
267,983,000
247,342,000
36,241,000
1,061,147,000 1,079,128,000 1,102,123,000 1,151,696,000 1,146.734.000 1.140.728,000 1,097,315,000 1,098,456,000
444,307,000
1,851,046,000 1,851,011,000 1.846.135,000 1,841.191,000 1,836,175,000 1,821,132,000 1,801,065,000 1,800,971,000
5,935,000
5,944,000
5,993,000
5,787,000
6,019,000
6,009.000
6,028,000
5.961.000
-.
727,890,000
5,102.000
Total bills and securities
Due from foreign banks
Federal Reserve notes of other banks
Uncollected items
Bank premises
All other resources
2,335,815,000 2,347,678,000 2,380,039,000 2,412,232.000 2,431,429,000 2.404.258,000 2.384,237,000 2,340,262,000 1,118,229,000
10,749.000
2,709,000
3,655.000
2.655,000
2 712.000
2,732,000
2,667,000
2,887.000
2.891,000
16,889.000
15,150,000
14,768,000
13.082.000
18,482.000
13,635,000
14,764,000
16.427.000
13,248,000
462,236,000
345,865,000 299,398,000 328,222,000 326.793,000 350,389,000 376,672,000 391.960.000 328,552.000
58.962,000
58,114,000
58,085,000
58.113,000
58,115,000
58,121,000
58,119,000
58.119,000
58,119.000
32,696,000
47375,000
45.205,000
46.251,000
48,029,000
45,228.000 *48,067,000
47.811.000
48,098,000
Total resources
LIABILITIES.
F. R. notes in actual circulation
Deposits:
Member banks—reserve account
Government
Foreign banks
Other deposits
5,802,994,000 *5,723,604,000 5.746,402,000 5.768,578.000 5,793,312,000 5•768•787,000 5.731.943.0005.642.443,000
Total deposits
Deferred availability items
Capital paid in
Surplus
All other liabilities
Total liabilities
Race of gold reserve to deposits and
F. R. note liabilities combined
Ratio of total reserves to deposits and
F. It. note liabilities combined
Contingent liability on bills purchased
for foreign correspondents
5,416,391,000
2.838,772,000 2,843,605,000 2,857,805,000 2.834.157,000 2,861,948,000 2.835.150.000 2,868,163,000 2,755,864,000 1,901,844,000
2.014.604,000 1.962,989.000 2,033,697.000 2,382,296.000
2.079,658,000 2,062,455.000 2,012,134,000 2,072,164.000 2,035.517,000
28,923,000
59.150,000
28.331.000
40.336.000
54,034.000
45.099,000
55.972.000
48,503,000 *26,175,000
9.862,000
8,396,000 168.408,000
8.752,000
11,555,000
11.423.000
10,402,000
10,807.000
10,418,000
33,236,000
26,617.000
36,937.000
32,915.000
34.461.000
36.428.000
35,241,000
35,587,000
36.422,000
2,116,852,000
2.173,820,000 n.134,619,000 2.115.335.000 2,165,347,000 2.135,435.000 387,055,000 2,044,992.000 2,107,361.000 2,606,244,000
340.799,000 293,275,000 323.232.000 319.454,000 346,896.000 154,757,000 370,623.000 326,818.000 450,618,000
153,430,000 151,582,000 153.700,000 153.791,000 154,113,000 259,421,000 154.788,000 154,816.000 167,233,000
259.421,000 259,421,000 274,636,000
259,421,000 259,421,000 259,421,000 259,421,000, 259.421,000
34.952,000
15,816,000
38.163,000
33.956,000
36.752,000
39,102.000
38,909.000
36.408,000' 35,499.000
1
5,416,391,000
.
000
5.642.443,000
708
.787
5.731.943,000
5,802,994,000 *5,723,604 000 5,746.402,000 5,768.578,000 5.793.312,000 5.
54.4%
53.8%
53.1%
52.4%
52.2%
52.0%
52.4%
53.0%
77.0%
58.4%
57.9%
57.2%
56.5%
56.2%
56.3%
56.3%
57.2%
80.8%
60,254,000
59,528,000
59,496.000
68,541,000
73.775.000
98,163,000
226,781,000
309,585,000
32,739.000
50,944,000
36,857,000
12,735,000
312,232.000
33,531,000
52,513.000
36,979.000
16,683,000
342,342,000
33,661.000
51,988,000
42.152.000
17.040,000
370.062.000
38.281,000
53.992.000
42,733,000
20,312.000
377.066.000
40,690.000
54,418.000
44.295.000
21.096,000
360.919.000
34,475.000
55,700.000
42.977,000
21,499,000
347.952.000
31.666.000
56,940.000
41.029.000
22.239.000
326,127.000
31,458,000
51,548,000
36,775,000
23,970,000
145,614,000
18,316.000
35,830,000
22.904,000
7,945,000
Total bills discounted
1-15 days bills bought in open market
16-30 days bills bought in open market._
31-60 days bills bought in open market...
01-90 days bills bought in open market_
Over90 days bills bought in open market
442,860,000
8.353.000
10,455,000
10,532,000
6,550,000
451,938.000
9,438.000
6,404,000
11,012,000
11.866.000
487,183,000
9.910.000
7,769.000
10.632.000
12,382,000
525.380.000
7.663.000
7,241.000
12.122.000
12,674,000
537.565.000
18.192.000
5.087.000
11.474,000
17,149,000
515.570,000
28.002.000
5,552,000
11,670,000
16,397,000
499,826,000
42.528,000
6,767,000
6.249,000
21,796.000
13,000
469.828,000
29,041.000
2,546,000
2,945,000
28,975,000
13,000
230,609.000
30.365,000
25,067,000
6,267.000
92,890.000
39,000
Total bills bought In open market
1-15 days U.S. certificates and bills__
16-30 days U.S. certificates and bills__
31-60 days U.S. certificates and bills____
61-90 days U.S. certificates and bills___
Over90 days certificates and bills
35,890.000
125,442,000
206.910,000
202,089,000
84,600.000
442,106,000
38.720.000
132.459.000
80,442.000
249,650.000
218.588.000
597,987,000
40.693.000
68,600.000
140,442,000
290.411,000
218.588.000
384,082.000
39.700.000
66.150 000
112,600.000
341,833.000
193.089,000
438,024,000
51.902,000
102,354.000
60.600.000
387,302.000
194,488.000
393.990.000
61.621.000
83.625,000
79,150.000
194.042,000
308,361,000
475,550,000
77,353.000
81.475.000
109.320.000
216,041.000
231.861.000
458,618.000
63,519.000
65.287.000
83.625.000
191,749.000
293.313,000
464,482,000
354,648,000
31.925,000
28,866,000
37,950,000
77.150,000
268,416,000
1,061.147,000 1.079,126,000 1,102.123,000 1.151,696.000 1.146,734.000 1,140,728.000 1.097,315,000 1.098.456.000
4,493.000
5.733.000
5.801.000
4,,03.000
4,t•11,000
5,225,000
5,637.000
5,423.000
1.387.000
157,000
1,116,000
1,018,000
116,000
236,000
461.000
388.000
19,000
31.000
35.000
35,000
35.000
35.000
25,000
45.000
25.000
35.000
150.000
45.000
10,000
130,000
130,000
66,000
120.000
444.307,000
5,944.000
52.000
Ataturily Distribution of Bills and
Short-Term Securities1-15 days bills discounted
16-30 days bills discounted
31-60 days bills discounted
61-90 (lays bills discounted
Over 90 days bills discounted
Total U. S. certificates and bills
1-15 days municipal warrants
16-30 days municipal warrants
31-60 days municipal warrants
61-90 days municipal warrants
Over 90 days municipal warrants
Total municipal warrants
57,494.000 65,735,000
$
$
6,019.000
6,009,000
6,028,000
5.981.000
5,787,000
5,935,000
5.993,000
10,000
42,000
Federal Reserve Notes—
Issued to F. R. Bank by F. It. Agent__ 3,078.279,000 3,084,596,000 3,080,974.000 3,072,0 8,000 3,102,222.000 3,073,262.000 3.093,935.000 2,990,511.000 2,300,913,000
239.507,000 240,991,000 223,169,000 237.911.000 240.274.000 237.512,000 225.772.000 234.647,000 399,069,000
Held by Federal Reserve Bank
In actual circulation
2.838.772,000 2.843,605,000 2.857,805.000 2,834,157,000 2,861,948.000 2,835,750,000 2.868.163,000 2.755,864.000 1,901,844,000
Collateral Held Si, Agent as Security for
I
Notes Issued to Bank—
1,046.127,000 1.019.627,000
By gold and gold certificates
3.000,865,000i 999,065,000
Gold fund—Federal Reserve Board
427.769.000} 434.307,000
By eligible paper
615,600,0001 644.100.000
U. S. Government securities
999367.000
988.115.000
471,796,000
635,450,000
976,637,000
982,915.000
508.963.000
623,900.000
972,447,000
981.865.000
534.112,000
632,400,000
964.997,000
964,865,000
520,397.000
639,900,000
944,252.000
982.515.000
522,675,000
682.000.000
946,502,000 707,058,000
972315.000
489.285,000 1,417,030,000
606.700.000 274,314,000
3.090,361,0003.097.099.000 3,094,528.000 3.092,415.000 3,120,824,000 3,090359,000 3,131,442.000 3,014,602.000 2,398,402,000
Total
• Revised figures
RESOURCES
AND LIABILITIES OF EACH OF THE 12 FEDERAL RESERVE BANKS AT CLOSE OF BUSINESS AUG. 17 1932
OF
STATEMENT
WEEKLY
'
TWO Clphelr8 (00) shlklea.
Boston. New York. Phila. Cleveland, Richmond Atlanta. Chicago. Bt. Louts. Mintseap. Kan.Ottg. Dallas. San Frail.
Total.
Federal &VOW Bank of—
$
RESOURCES.
$
2,046,692,0 166,727,0
Gold with Federal Reserve Agents
61,476,0 3,188,0
Dold red'n fund with U.S. Tress
2,105,465,0 169,615,0
Gold held excl. eget. F. R. notes
Gold settle't fund with F.R.Board 261,792,0 12,718,0
357,197,0 15,696,0
held
by
banks_
ctfs,
gold
and
Gold
2.727,457,0 198,329,0
Total gold reserves
202,259,0 19,555.0
R0111e1Well other than gold
2,929,716.0 217,884,0
Total reserves
70,818,0 5,215,0
Non-reserve cash
Bills discounted:
obligations_
161,837,0
7,857,0
Govt.
See. bd U.S.
281,023,0 10,173,0
Other bills discounted
Total bills discounted
BM 001100. In O(Ci
442,860,0 18,030.0
lc 500 (1 9 MS 0
$
$
3
$
$
$
S
$
$
$
3
485,677,0 153.000,0 188,970,0 53,200,0 56.000.0 614.945.0 61.510,0 37.035,0 58.680.0 23,485.0 147,763,0
13,186,0 6,520,0 6,493,0 2,679,0 3,780,0 9.175,0 2,083,0 2,377,0 2,805,0 1,125,0 8,065,0
498,863,0 159,520,0 195,463.0 55,879,0 59,780,0 624,120,0 63,593,0 39,412,0 61.485,0 24,610.0
84,024,0 3,243,0 22,713,0 6,486,0 6,740.0 63,796,0 8,680,0 9,555,0 13.376,0 7,731,0
227,409.0 10,178,0 18,241,0 7,231,0 8.340,0 27.853,0 5,811,0 3,343,0 10,630,0 3,899,0
—
810,296,0 172,941,0 236,417.0 69,596,0 74,860,0 715,769,0 78,084,0 52,310,0 85,491,0 36,240,0
54,914,0 33,980,0 18,906,0 8,649,0 5.257.0 25,977,0 8.532,0 3,760,0 5,663,0 7.515,0
155,828.0
22,730,0
18,566,0
197,124.0
9,551,0
—
865.210,0 206.921,0 255,323,0 78,245,0 60.117,0741.748,0 86,616,0 56,070,0 91,154,0 43.755.0206,675,0
19,258,0 3,567.0 4,099,0 3,542,0 4.907,0 12,863,0 3,797,0 2,068.0 2,054,0 3,472,0 5,976,0
54.793,0 31.387,0 15.387,0 4,548,0 5.451,0 11.069,0
36,181,0 41,618,0 20,318.0 22,441,0 28,173,0 21,624,0
7,049.0 1,385,0 1,572,0 2,512,0 28.827.0
5,433.0 12,292,0 18.795,0 13,641,0 50,334,0
90,974.0 63,005,0 35,705,0 26,989,0 33,624,0 32,693,0 12.482,0 13,677,0 20,367.0 16,153,0 79,161,0
896,0 3,354.0
946.0
631.0
11 448 0 5.210 11 9 109 0 9 707 0 1.380.0 4.813.0 1.030.0
1292
Financial Chronicle
Two Ciphers (00) omitted.
RESOURCES (Concluded)—
U. S. Government securities:
Bonds
Treasury notes
Certificates and bills
Total.
3
$
420,815,0 20,350,0
369,084.0 21,155,0
1,061,147.0 79,723,0
Total U.S. Govt. securities._ 1,851,046.0 121.228,0
Dther securities
6,019,0
Total bills and securities
Due from foreign banks
F. R. notes of other banks
Uncollected Items
Bank premises
All other nsources
Total resources
LIABILITIES.
F. R. notes in actual circulation
Deposits:
Member bank reserve account
Government
Foreign bank
Other deposits
Total deposits
Deferred availability Items
LlapItal paid In
3urplus
All other liabilities
Total liabilities
ifemeranda.
Reserve ratio (per cent)
Uontingent liability on bills pur.1.......-1 ,... ,......,... ..........................••...
York.
Boston. New
$
Phila.
Aug. 20 1932
Cleveland. Richmond Atlanta. Chicago. St. Louts Minneap. Kan.City. Dallas. San Fran.
S
S
$
$
3
3
$
$
$
11
190,272,0 31,228,0 36,492,0 9,649,0 9,616,0 40,775,0 13.940,0 17,208,0 11,776,0 14,242.0 25,267,0
141,355,0 29,894,0 39,212,0 10,366,0 10,266,0 47,712,0 14.441,0 10,398.0 12,576,0 4,558,0 27,151.0
379,665,0 78,203,0 102,578,0 27,117,0 26.810,0 186,323,0 37,775,0 27,091,0 32,915,0 11,921,0 71,026,0
711,292.0 139,325,0 178,282,0 47.132,0 46,692,0 274,810,0 66,156,0 54,697.0
57,267,0 30,721,0 123,444,0
4,325.0 1,564,0
130,0
818,039,0 207,104.0 217,089,0 76,888,0 81,666,0 312,316,0 79,668,0 69,135,0 78,580.0 47,770,0 205,959,0
960,0
287.0
268,0
106.0
98,0
373.0
18,0
11,0
75,0
183,0
77,0
3,478,0
318,0 1,195,0
997.0
872,0 2,064,0 1,649,0
368,0 1,011,0
239
@FedFRASER