Full text of Commercial and Financial Chronicle : August 20, 1942, Vol. 156, No. 4100, Section 1

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Final

WS.ADH,
P«Ml»Y

Edition

THURSDAY

Number 4100

Volume 156

New

In 2 Sections

August 20, 1942

York, N. Y., Thursday,

Section 1

Price 60 Cents

Copy

OUR
it

Measure

REPORTER'S
;
'

DEPORT

originally -scheduled

•:

.[
A

curities

bring in

may

some

unlooked for profit is to buy into the $342,000,000 Treasury, 2s ma¬

secondary, and speculative rail¬
obligations blossomed into a
full-fledged upturn, attended by
increasing volume, With, the re¬
sumption of trading this week,

turing Sept. 15, 1942, or into the $320,000,000 RFC %s maturing Oct.
15, 1942—in anticipation of a favorable refunding offer within the
next few weeks*
Chances are, these two issues, which total, only

road

Mounting activity in that quar¬

which is

move

ter of the list gave the market a
really buoyant appearance Tues-day and again yesterday with the
turnover substantially exceeding
the daily average of around $6,*
000,000 or $7,000,000 in vogue of
late,

-2./-.. V"'

Tuesday's

,'Y;

turnover,

$662,000,000, will be refunded in

separate transaction sometime be¬
fore the first week of September.
Odds are the deal will take
place before the next cash offering, because a refunding of this type
.

$12,000,000,

domestic

of the market for

f
'

while and help pave the way for: the next big

Treasury; borrowing.

'[/[, j--\ v.'v^-r :,

v',

■

purchasing, the
maturing! issues now.
/
The RFCs are selling at 100.3 to yield
a minus equivalent of 1/64 to October 15, a minus of 5/64 to Sep¬
tember 15.
The Treasury 2s are selling at 100.5 to yield a

some

issues

aggregate of
for all of the

■'

preceding

week,
giving some
idea of the scope of the pickup,

And yesterday trading was even

heavier.

purchase of either

September 15.,<

In other words,

While'the

bulk

the

The best that

was

Commission

the NASD stipulating that the ef-3>
date of the amendment

could

held

abeyance until

the commission had reached

indefinitely postponed, fol¬
the proposal before the Se¬

Philadelphia on Aug. 13.
the Commission, with
--——
—'
:

advisement by

taken under

de¬

Stating

his

was

belief

those who did not vote

that
not

were

in favor of the

proposal, and that
cision.
The measure was sharply
many
who
voted
in
approval
attacked
by
Frank
Dunne
of "were privately against it," Mr.
Dunne & Co., New York, Presi¬ Dunne
emphasized that "this was
dent of the New York Security not a secret ballot as it should
Dealers Association, also by Leslie have
been," because of the Asso¬
B.
d'Avigdor of the Leslie B. ciation's requirement of a signed
d'Avigdor Co., New York, and: lallot and declared that any claim
Van Dyck MacBride of MacBride, that "democratic
procedure was
Miller & Co., Newark, N, J., who followed could be
nothing but a
on

well

firms.

behalf of his own firm
11 other Newark deal¬
•'

at the hearing, Mr.

is permitted to adopt this amend¬

happen is that they'll be paid off
at par and you'll lose a fraction for having put your idle cash into /
a maturing security for a few weeks. ,,

buying

15,

fective

ment to its

can

ion

that

by-laws, it is
will

the

opin¬

cause

disintegration of the Association
which all reputable Broker-Deal¬
ers would regret."
It would also

[

Exchange
was

In testifying

both of these issues" necessitates virtually

risk for the worst that

Oct.

the hearing

Dunne asserted that "if the NASD

minus equivalent of 3/64 to

and

The matter

spoke

But to get back to the profit possibilities in

vonly $27,000,000

likely to stimulate the market generally.
;
Certainly, some
holders of the tax-exempt Treasury 2s will want to stay in the taxexempt classification so they'll do i their own refunding, enter the
open market and use the cash obtained [from sale of the 2s to buy
Outstanding exempts. ,[. That alone should help the appearance

contrasted with

for,

lowing conclusion of

By S. F. PORTER
all but risktess and which

The recent creeping advance in

}

Sharply Attacked In SEC Hearing

Effective date of the minimum capital amendment to the rules
and by-laws of the National Association of Securities
Dealers, Inc.,

pious

fraud."

Furthermore, he
minimum capital re¬
quirements for membership in the
Association
are
desirable, they
should be adopted by the Securi¬
ties
and
Exchange Commission
"which has the necessary power,
and not by the NASD, which does
not."
The large houses with few
exceptions,
Mr.
Dunne
main¬
tained, "automatically voted in
favor of the proposal because they

added,

happen is that a refunding issue will be ten^
sound the death-knell for hun¬
a few32nds—maybe V* point-^-in the open
market shortly after the sale:
By having the securities to be dreds of small firms throughout believed it was in their favor. The
turned in, you'll get in on that; Exchange and make1 a few dollars the country, he; said.
Mr. Dunne small houses in many cases simply
therefore.
v It's not much—butt it's something.
"undemocratic did not dare to vote against it for
;
-And the move assail e d[ the
has no angles to it that any official
method
used:
by the Association fear of; reprisals."
might- object to;
T
'*■*'! in
forcing the adoption of the
Referring to the "background of
DEALERS AT A LOW,
V'"' V':- i[.J
amendment, to its by-laws." Stat¬ subtle intimidation"
which in eviThe other day, a broker in the New York market traded
ing
that
he
used
the
phrase
"in
$1,000,000
/
(Continued on page 628) "
;
As the law now stands, the of the certificates of indebtedness for a customer at a $20 commis¬ forcing the adoption advisedly,
roads and other corporations must sion.
;
And that was before payment to whatever bank was in¬ Mr. Dunne went on to say that he
[first obtain certificates of insol¬ volved of the small bank charges; demanded.
;
At the same time; wa? "quite convinced" that in fact
INDEX
one
dealer, who has been particularly successful, on uncovering the measure "was rejected by the
vency before they can make such
.;
''■••v."
Page
purchases at discounts from face profitable transactions in the;past, remarked ^there s nothing doingrimiajorityf membership.''
In sup- Bank and
Insurance. Stocks..;... i.; 622
value without being taxed on the I just, sit here wondering what tp do next."
At that same mo¬ port of this contention, the speak¬
[Bond Selector (The)
..,../... 518
[theoretical profits, R. V, Fletcher, ment, a third trader said he was considering going out of the Govern¬ er [ niade the following observa¬ Calendar of New Security Flotations 630
[Vice-President of the Association ment bond field altogether because as he saw it, there would be no tion: "The Association had 2,631
•Investment Trusts
623
members of which 1,939, or 73%,
[of American Railroads, recently worthwhile profits for dealers for many months or years to come. V;
Municipal News and Notes.,.....,., 624
This report is presented not as an invitation to pessimism but voted. Of the 1,939, 1,197, or 45%
-aired
this situation before the
Our Reporter on Governments.... .'/■ 617
One thing is certain: the of the total membership, voted
[Senate
Finance
Committee
at as a possible sign of what lies ahead.
Personnel Items
620
"for" and 738 "against."
The re¬
hearings on the current new reve¬ U. S. authorities have this market under control now and. intend
Railroad Securities
62t
nue bill. :
' to use their best endeavors to keep it there.
.
Another thing is the sult .of [the Vote means that the
Our:Reporter's Report
617
amendment was adopted by 45%
big,
spectacular
dealer
profits
of
days
gone
by
will
not
be
tolerated
■v
He submitted an amendment,
Securities Salesman's Corner.
623
of * the membership.
Those Who
at a time such as this.
;/.'•■ ■;;
;.[[:[/;;->[;[[''[/
which he said the Treasury tenta¬
Tomorrow's Market —- Walter Whyte
.
did not vote were certainly not in
Says.;,;,..
v621;
tively approved, to change the law INSIDE THE
favor of the amendment.
If we
'MARKET:.;
;,[j[
-so that corporations, including the
Uptown After 3.......
628
v
The response to the taps has' astonished even, the men who ran should add their number to those
railroads, could make such purthe sale.
While the billion-dollar mark was hoped for, off-the- who voted against it, then the
(Continued on page 629)
! record conversations among Victory Fund Committee spokesmen and amendment would have been de¬
was

ascribed to traders and specu¬

can

dered which will be worth

lators, some observers were satis?
jfied that the railroads themselves'
were picking up bonds here and
[there in some volume* against an
.expected change in the law cover¬
ing treatment of "indicated profit"
on repurchases for retirement, '

........

......

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

...

.•'

•,

•,..

•.

♦.

Treasury representatives indicated the fiscal authorities would have

QUICK ACTION ON DESIGN

been satisfied with

(Continued

AND CONSTRUCTION

$900,000,000 to $1,000,000,000.
632)

on page

: The fact that

I must again point out

feated,

bership actually voted against it."

national BANK

also
SURVEYS AND
y

REPORTS

OF THE CITY OF NEW YORK

BUY UNITED STATES

In connection with

NATIONAL BANK

WAR SAVINGS BONDS

MANAGEMENT PROBLEMS

(Series E and F

FINANCING and VALUATIONS

bonds

the

of EGYPT

the only

are

world

guar¬

Head

anteed against depreciation

Sanderson & Porter

in value prior to maturity)

ENGINEERS and CONSTRUCTORS

{L ib Johnson & Co,

52 WILLIAM STREET

INVESTMENT

64 Wall

Street, New York

1850

H. Hentz & Co.
'

New

York

Stock

Exchange

New

York

Curb

Exchange

Cotton

Exchange

York

New

Exchange,

Commodity
Chicago
New

Board

And

Buffalo

Inc.

Markets, always

;

principal

Towns

Bankers

Kenya

Kobbe, Gearhart & Co.
INCORPORATED

Members

DETROIT

PITTSBURGH

GENEVA,

SWITZERLAND'

Boston

Milk Street

N, Y. Phone C.Anal 6-2610

Boston

Member Federal Deposit

Insurance

Phone—Hubbard 8360

Corporation

Teletype BS 568-569

Security

.45 Nassau Street
Tel.

REctor 2-3600

Dealers

Ass'n

New York

Teletype N. Y. 1-576

the

Government

and

GUARANTEED

Uganda

26, Bishopsgate,
London, E. C.

in India, Burma, Ceylon, Kenya

and

Aden

Subscribed

and .Zanzibar

Paid-Up

Capital. ,.£4,000,000
Capital .... .£2,000,000

Reserve

Fund,.....

The

Bank

.£2,200,00Q

conducts every description
and exchange business

Enterprise 6015

Boston

Enterprise

1250

RAILROAD STOCKS

•

banking

Philadelphia Telephone:
Telephone:

Specialists in

Office:

Head

INDUSTRIALS

NEW YORK
CHICAGO

31
.

SUDAN

the

Colony

E. C.

all the

facilities

MAY & GANNON

NATIONAL BANK

Branches

BOSTON

oi INDIA. LIMITED

RAILS

Trade

Exchange Bldg.

AGENCY

and

£3,000,000

Branches

EGYPT

aviations':

■;

other Exchange*

N. Y. Cotton

correspondent

£3,000,000

Cotton Exchange

Orleans

Williamsport

Wilkes Barre

Actual Trading

[ Member«:

Broaden your customer
service with Chase

Bought—-Sotd^—Quoted

and 7 King William Street,

PHILADELPHIA

Albany,,
Pittsburgh

I Cairo

No.

;

LONDON

Troy
Established

FUND

RESERVE

Quarterly jnconte Shares

Cairo

FULLY PAID CAPITAL

"if

SECURITIES

BOSTON

Office

Commercial Register

Established 1927

San Francisco

NEW YORK

Chicago

CHASE

THE

that about 28% of the total mem¬

Trusteeships
also

and

Executorships

undertaken

HART SMITH & CO.

Tr¬

Members
New York

Security Dealers Assn.

52 WILLIAM ST., N. Y.

Bell Teletype

New York

HAnover

2-0980

NY 1-395

Montreal

Toronto

CUARANTEED RAILROAD
_—

—— —■

Telephone
BO. Or. 9-6400

STOCKS-BONDS

52 Broadway

Teletype

NEW YORK

N.Y. 1-1063

Josef
*

Philadelphia Reading

Coal & Iron Co.
5#/1973 C/Ds—68/1949

•;
*

Thursday-,: August 20, 1942

& FINANCIAL CHRONICLE

THE COMMERCIAL

613

Phillips V,-P,

'r-jr

Alabama Mills

Birmingham El. 7% Pfd,
Debardelaben 4s, 1957

SEATTLE,; WASH. — DrumhelEhrlichman - Company,
Ex¬
change Building, members of the
.

lcr;

Grande

Denver & Rio

;V.
,'

Seattle Stock

Western

that

4s of 1936

»We

have

pate

firm.

consummation

has

been

Vice-President of

their

Mr.

Phillips

has

•i

Steiner,Rouse&Co.
Maritime Bldg.

All Commit¬

New Orleans,

Brown-Marx Bldg.

La. Birmingham, Ala;

Direct Wire
■

Circular

Request

Mortgages,

Westchester County

All

New York, N.
NY 1-1557

and Bank Stocks

Mortgage Certificates

BH 198

25 Broad St.

s.-',

i Wittermaii To Be

Exchange

Members New York Stock

been

charge of the trading department.

Accord.

tees

antici-

reason

every

early

reorganization.

this

elected

Exchange; announce

Josef

•

Scioonover, deWillers & Co.
ING.

2-7634

REctor

become

nate

NY Conference On War
Bond

"William Green,
Jacob S. Potof-

Walter D. Fuller,

leaders of labor and
management will gather at a con¬
ference and luncheon at the Hotel
Astor, New York City, on Aug. 27,
on
the
Treasury
Department's
Payroll Savings Plan, with a view
to
seeking to evolve
the best
methods to spur participation to
the 10% gross payroll goal set by
the Government, it is announced
by
Richard
C.
Patterson,
Jr.,

Corn Exchange

Gordon D. Stott.
Mr. Witterman has been In charge
of the trading department of the
firm's New York City office, 61

:»",r

Broadway;;

Penna. Co. for Ins.

York War

of the New

Chairman

The announcement
states that the conference—one of
the most important Treasury ses¬
Savings Staff.

sions

held

New

similar

others

ever

will

month

this

held

York—
being

cities

key

throughout the nation. It was ar¬
ranged by the National Commit¬
tee for Payroll Savings in con¬
junction

with

of New York, New Jersey

Staffs

The conference

and Connecticut.

three-point goal. /
Chairman Patterson, in analyzY

will aim at
.

first

seek

will
•

this-goal, declared that

ing

"■C /(Sprcj'al taTHie Financial- Chronicle)

First
hydro

Mortgage 5s, 1968

Sloan is
rill

direct subsidiary of General: Gas &

property is a

Corp., in the Associated pas & Electric SystprpL. The com¬
pany supplies electricity at wholesale only in South Carolina.; Under
contracts expiring July 1, 1980, the company is obligated to supply a
minimum of 300,000,000 kwh. per annum as follows: Carolina Power

with E.

and

Co.

Remaining outstanding out-; the

put,

taken

any,

Carolina

Electric

and
County
hydro-elec¬
South' Greenwood
tric projects. ! It should be noted /'

Gas.

Gas; that

The trustees of Associated
Electric

signed

contract

Electric

Gas

sale to the Authority

vestment

the'

which

of Lexington

the

SEC

proceedings. of the adverse

bis

for

years

many

ter

Fuller,

Chairman

the

National Association of Manufac¬

turers, and Chairman of the Board
of the Curtis Publishing Co.; Will¬
iam

President

Green,

Federation

American

Jacob
dent

the

Labor;

Potofsky, Acting Presi¬
the

Amalgamated

Cloth¬

.Y /|

luncheon

financed

porations

meeting

will

by the hundreds of cor¬
and unions participat¬

discussions already
have been held in Richmond, Va.;
ing.

St.

Similar

Paul; Minn., Kansas City, Mo.,

.and

Atlanta,

scheduled for San
cago,

Others

Ga.

Dallas,

Francisco, Chi¬

Seattle,

Cleveland and

are

St.

Boston.

Louis,

The

New

York luncheon will be the last in

the

existing

South

Carolina

utility

enterprises.

the

The

South Carolina Supreme Court in
a

decision handed

down

May

bonds

mortgage
dam

12,,

Daniel

are

New
of

River and

Pinder

William

and

the

purchasing the two proper-;
ties, thereby upholding action of
the lower court.
Supreme Court
subsequently
filed by the
hearing.
!

The

proposed

properties

came

„■

sale of
about

sult of negotiations

business

Berlin,

trip to

Hampshire, to visit the plant

..the Brown Company.

the

carried

re¬

Washington in the latter part

between Governor

of South

51/>%

$2,748,600

clue

1953; of this latter issue, $2,f

555,400

are

Income

Water Power

South Carolina Pub¬

•

recently has

ended Dec.

London

31, 1941, follows:

the

School

New

investment in

Baltimore & Ohio
4s,

Ferry

1946

New Orleans Great

v.':

'■;!

5s,

,v
'

incl.

Taxes,

1935

—YY

Other

income

for

G.A.Saxton & Co., Inc.

II 70 PINE ST., N. if. WHitehall 4-497011
T^lPtvn# NY

l.ttno

Broadway

NEW
Teletype

1-832,

Trade

Harrison

834

■'

655,816

396

693,322

701,056

36,036

36,161

7,195

6,919

exp...___

28,624

30,482

charges

765,177

774,628

86,073

16,596

1.12

1.02

assumed

___

bond

income

ways.

"In peacetime, transportationwater, rail, truck—is the lifeblood
of, the nation.
In wartime, it is

that and

will

it is the material

more;

implement
owe

which
most when
to

triumphant

democracy

emerge^

the predatory
hordes now plundering the civil/
ized peoples of the earth.: /
"Striking evepts aremaking
over

manifest the real value of the in¬
land waterway system..

The

pro¬

posed New Jersey canals will inr
crease,

this

value

"America
tential

has

inland

incalculably.
the

greatest

;

po¬

intracoastal

and

earth; der
velopment
and
expansion * are
making it a priceless national as!waterway

system

set, producing benefits and econ¬
omies for all the people."
I

—

charges

Elected Vice-Presidents ;L
PITTSBURGH, PA.—Mellon Securities

interest
&

expansion and improvement
unparalleled water¬

790,830

791,226

Taxes

*267,987

394

interest

Fived

16,598
181,250
-

851.250

___

Other

Net

711,103

177,875
294,073

A__

interest

; Bond,

son

Corporation, 525 William

Place has elected

Penn

Herron

and

S. David¬

Jorgensen

Vice-Presidents of the firm. Both
had

previously

•—

X-earned
ftNo

provision

necessary

for

been

Assistant

Vice-Presidents.

Federal

bility

Bldg.

Teletvoe

2075

129

Direct private wire New York to Chicago

some

Interesting Report

improvement in

earnings coupled with the possi¬

CHICAGO

Dlgbv 4-8640

12-31-41

cize

of the nation's

taxes.

Security Dealers Ass'n

seems—

Request

Board

YORK

fixed,

The discernible

York

12 months ended

income—850,856

Total fixed

STRAUSS BROS.
Members New

;

17,318

—

Fed.-J

Available

disc.

justification for post-war fears.

Copy

expenses

Maintenance

;

which emphasizes
the cumulative effect of
high war-time earnings and stresses the lack

Bulletin

2032

Seaboard All-Florida
6s,

for

Promising Outlook for Rails

Northern

operating revs. $1,995,938 $1,967,768

Operating

Amort.

Re¬

Social

6-30-42

Total

railroad bonds"

latest

our

time

1944

Hoboken
5s,

states

for
..

charges

opportune

as¬

School of Economics and

Operating

the series.
an

been

sociated with the faculties of the

Company for the 12

idea

this

State

Mr. May, who was

Securities and Exchange Commis¬

sion,

Depreciation

"We Consider

the

pared with that for the 12 months

the properties

Re¬

Associ¬

and

for

Lexington

months ended June 30, 1942 com¬

tie in

May

economic expert of. the

formerly

of Associated Gas & Electric. The
to

Statistics

and

of New York.

debentures

■

account

Wilfred

Division

owned by General Gas search.

& Electric Corp.,

May bank

the

Administrator

ate

also outstandr

are

lic Works Authority, and trustees

was

ing

Carolina, representatives

of the PWA,

There

1, 1948.

Savings Staff

appointed

Director

are

depreciation

im¬

through

proved waterways.
/>
/"Yet, even at this solemn mo¬

The Treasury War Savings Staff

has

The bonds are callable
days' notice at 105 to Jan.

two

the

for

reserve

connecting

the

land

the

links

for

but

useless

the uninformed combat and criti¬

War

$1,990,193.

!f _■//

1941

1941,
and

-denied
a, petition
authority for a re-,

contracts

The oceans,
the Great
the Gulf of Mexico, the
great river systems would all be

ment—incredible

pledged.
plant account at Dec. 31
was
carried at $20,355,57$

power

Gross

quantity of iron

ore,would be multiplied again and

selfish and sectional interests and

1942, granted a permanent injunc-; substantially, all .the other prop.?
tion
restraining
the
authority' erty of the company;, in additionfrom

battleships, submarines

destroyers; no merchant vessels,
or lighters: The cost of

car-floats

the power house and

the Saluda

event/there

yards nor ship¬

navy

A. ,Titus, Jr., of F. J. Young & Co.,! again.
Inc., 53 Wall St., New York City, Lakes,

first

absolute

tion's tremendous

of which

courts,

M,r.

says

Richards, "how desperate the situ^
tion would be but for the nation's
waterways.: In such

Pinder, Titus On Trip

$2,230,700 are owned by
which decided that the authority! other companies in the Associated
was
without power to purchase- System.
The mortgage securing

ing Workers, and Owen D. Young.
The

materials,"

and

plies

W, , Mr.!
could be
conducted

...

set

largely upon American help, sup¬

transporting over,00%. of,; the na¬

the Payroll Saving Plan;, secondly,

ings Staff, will preside at the
luncheon, during which a film on
the Payroll Savings Plan will be
shown.
After luncheon, the con¬
ference will be addressed by Wal/

in¬

is becom¬

waterway system

business in! yards;

investment

own

Washington. >. /1

court

$40,00,Q,000.
Of this amount, ap-} ernor Jeffries pf South Carolina
proximately half was to be paid to call a special session of the
j to increase the number of work¬ to General Gas & Electric Corp.,,' legislature for the purpose of en¬
ers
taking part;j and thirdly, to
acting enabling legislation where¬
increase the amount of monthly; $1,350,OQO to other Associated Gas!
subsidiaries
which ' own
certain by. South Carolina Public Service
purchases to the desired 10% of
bonds in the two companies, and: Authority could acquire the prop¬
gross payrolls."
Nevil Ford, State
the balance to be utilized by the erties; otherwise it will be neces¬
Administrator of the New York
Authority to retire securities of sary to await the regular session
War Savings Staff, will preside
the two companies held by the on Jan. 1, 1943.
at the conference.
Lewis Pierson,
The First Mortgage is outstand¬
!
Chairman
of
the
Greater
New public.,.
This contract, however, was up-; ing in the amount of $10,929,100
York Committee of the War Sav¬
v

& Co., Inc..

Wills

di¬

; .

view

Fifteenth' St.,

719

against

initiated

has

become associated

has

with Barrett Herrick

Associated

the

System

Wills

decision, the PWA has asked Gov¬

lina Electric & Gas Co. for about

number of plants participating in

Barrett Herrick & Co.

;

WASHINGTON, D. C.—B. Hans¬

ford

companies/are

those

among

April, 1942, with the South Caro¬
lina Public Service Authority for
Water Power Co. and South Caro-i

Santee-Cooper

these

both

Vital To Nation
The incalculable value of the

ing manifest, declares S. Willson
Richards/Editor of the "Maririe
News."
"Now, when the fate of
the
democratic!
world
depends

B. Hansford Wills With

Lexington Water Power with
Federal

^ )

land

Co.

Pierce &

Electric & Gas

of South Carolina

Teletype

' HAnover 2-2289 t
257 •
i-.-'o."-

Co.; and prior thereto was]

der. ■&

Light Co., 150,000,000 kwh.; Duke Power Co., 75,000,000 kwh,; South
Carolina Electric & Gas Co., 75,-4

■

connected with Mer¬

now

Lynch,

Richard E.

the local office of A. M. Kid¬

000,000 kwh.
The latter contract
has been assigned to Duke Power

York Phone

'■ New
v

Philadelphia

Street,

Locust 4477

Chestnut

Phone

Phila.

Pierce, / Fedner y &
Beane,^£uhl Building. Mr. Sloan
was formerly one of the managers

Electric

"we;

increase

1431

Lynch Firm

Savings

War

the

H.N.NASH&CO.

Richard Sloan Wiih

This

Co.

2039, Pfd. & Common

3-6s

—

;

Lives etc.

Phila. Transportation

sky and other

DETROIT, MICH.

Philadelphia National Bank

/■■!

Girard Trust Co.

;

Nat'l Bk. & Tr. Cp.

Fidelity-Phila. Trust Co.

the floor of the New York

Exchange ! for

Payroll Plan

Owen D. Young,

Central-Penn National Bank

wards

1-2361

Teletype

Bell

J Joseph Witterman will shortly
a
partner in A. G. Ed¬
& Sons, members „of the
New York and St. Louis Stock
Exchanges, and will act as alter¬

20 S. BROADWAY
YONKEKS. NX
MArble 7-8509

BROADWAY

120

NEW YORK, N.Y.

satisfactory

ar¬

Seligman,
Broad

rangement for sale of this prop¬

prepared

erty lends speculative interest to

way

the

First

Mortgage

bonds

Lubetkin

Co.,

St., New York City, have
a

report

Building,

which may be

Inc.,

165 Broad¬
copies

had from the finr

present prices.

upon

request.

/ /

;Volume 156

Number 4100

THE COMMERCIAL & FINANCIAL CHRONICLE

COMMERCIAL and

FINANCIAL CHRONICLE
u.

Bet.

Patent

William B. Dana

)

Company

Publishers

•

Office

■'

3-3341

BEekman

Get Small Share Of

Riggs, Business Manager

Thursday, August 20, 1942
Published

■

twice

owners.

levery Thurs¬
day (general news and advertising issue;
with a statistical issue on Monday!-

Other

offices:

Chicago—In charge of
Gray, Western Representative,
,Field Building (Telephone State 0613).
London—Edwards & Smith, 1 Drapers'
Gardens, London, E.C.
1
•
:
Fred

William

Company.

•

Dana

Subscriptions In United States and
Possessions $26.00 per year; in Dominion
of Canada, $27.50 per year; South and
.Central
America,
Spain,
Mexico
and
.

Cuba,: $29.50 per year; Great Britain,
'Continental Europe (except Spain), Asia,
Australia

and

NOTE—On

Africa,

account

$31.00

per
year.
fluctuations

the

in the rate of exchange, remittances for

foreign

subscriptions
and
advertise¬
he made In New York lunda.

issued

BOND

HOME

LAWYERS

MORTGAGE
&

TITLE

CO.

GUAR.

TRUST

York

40 Wall St., N.Y,
Bell

"Govt. Bonds In War"
The

quarterly Investment

sur¬

vey of Shields & Co., 44 Wall St.,
New

York

New

York

members of the

City,

total

national

the

Exchange,

during' the present
major combatant has had

slightest

trouble

meeting

financial

its

needs, and it is un¬
thinkable that the United States
should have any
L The

difficulty."
a discussion of
Bonds in War," says

"Government
that

trols

survey,

Now, As In The Past.

1929,

last

"patriotism, government con¬
over our banking system in-

eluding reserve requirements, and
the possibility of political pres¬
sures should
combine to provide
satisfactory - demand for the
volume of government se¬
curities in prospect."

I :'Tt is becoming increasingly

continues.

greater

employees

total

but

taxes

tax

will

revenues

companies,

and

was

"In

ing institutions.

cent

orders in unlisted securities.

209 South La Salle St.,

employees
the

suffered

disclosure rule

issue

the

June 15,
i

1967/62.
above

"The

while large, are
'

and

the

sources

$20,000,000,000.
During 13
employees averaged 69.4%

the

govern¬

ment's requirements must be
sorbed

by the commercial

where there

Forbes

the ability to buy.

The banks

naturally Wish somewhat
maturities.
short
how

terms

banks,

The

the

higher rates

prevailing and medium term

governments will meet their re¬

quirements."

11 "

■

Cohu

include

'—,—V

■

Torrey, 1 Wall Street,
City, members of-the
New York Stock Exchange, have
prepared an analysis of tax col¬
York

New

lections

the

for

St.

fiscal

Petersburg,
years

1941-42.

1936-37 to
the analysis

dealings

belated acknowl¬

as much

opposition and criticism
has this latest suggestion.

tax-exempts.

municipal bond field

Broadway, New York, N.
2-891*

teletype NY

1-1203

Charles Easter Joins

Blyth Co. In Seattle
(Special

The

Financial

Chronicle)

SEATTLE, WASH.—Charles W.'
Easter has become associated with

Blyth

Avenue

Co.,

Inc.,

Building.

1411

Fourth

Mr. Easter

was

Board

nounced

Treasury Bills
of Governors of

Reserve
on

the

System

an¬

Federal

Reserve

request

Bank,

upon

before

seller

maturity of the bills, will sell
him

the

Treasury bills

amount and maturity at the same

rate

discount."

the

Federal

action, it

Reserve

Under

the

provisions

the

municipals ,except in the

Bank

count at which
the

same

the

case

rule,

proposed

of original

however,

underwritings,

dealers

would

forced to inform their customers of the best bid and asked quotations
and all of the other related disclosures necessary in the case of other

Counter transactions.

Needless

; >

say,

the

studying

r./V.

../.

■

technical

considerations

time

bearing

the

means

Reserve

30
of

was

make

connection

new

with New York

City

New

Box

A-2,

The

Financial

Chronicle,

are

prevent the SEC from

It is suggested that dealers write

disclosure
requirement is completely impractical and likely to occasion incal¬
culable damage to an industry whose continued profitable existence

Excellent

firm.

the Commission, setting forth the reasons why such a price

Spruce St., New York, N. Y.

is essential to the welfare of the entire nation.
.

v..

number

dealers

have

favored

their views

with

subject and we will continue to publish such comments.
if it is contrary to the
his identity.

wishes of the writer,

•■"The

immediate

the

Naturally,

refrain from disclosing

Recent letters appear below:
r

;

commission basis.

Trader

DEALER No. 8'
net

effect

the

adoption

Rule

proposed

X-15CL-10 would be to place all unlisted transactions upon a straight
\

with

Trader
and
to

good

the

application of this rule, the distributor
securities would fee forced to close his doors.
Under

of unlisted

make

Good

connection.

new

production

dealer's support, unlisted markets

the

would suffer to

The vast# Nation-wide markets for thousands
of meritorious unlisted issues, including those for bank and insurance

ences

the point of extinction.

stocks, municipal

and State

obligations, corporates and rails,

reor¬

ganization securities, new issues out of syndicate, venture enterprises,
would disappear. The liquidity of the great majority of such mar¬
kets is absolutely dependent upon
.

;

(Continued

furnished.

invited.

Inquiries

M-19,

Chronicle,
New

record.

Best refer¬

Conscientious.

Without

contacts

long experience wishes

Financial

Spruce

St.,

York, N. Y.

negotiation and not upon the prinon

page

626)

•;

■

•'

was

re-'

The Mortbon

Corp. of New York

Voting Trust Certificates

rate of dis-j

they were sold to

Bought

—

Sold

•—

Quoted

Service Man
Customers

Man

record

locate

with

years

firm

successful

wishes

desirous

to
of

having their clients handled ef¬
ficiently and kept well informed.

action

Board's

Have

of
Analysis

request

maturity and'

ready marketability of the securi¬
•

Bristol & Willett

;

■

•

•';

115

Broadway, New York
Bell

•

Telephone BArclay 7*0700

System Teletype NY 1-1493

proven

ability

to promote

business.
Seek

bills,;

Treasury

aside from the short

securities wishes to

counter

clientele.

Meanwhile, all other over-the-counter dealers

less determined to take the necessary action to

adopted as an added

perience irt selling over-the-

mission's plan.

assuring the liquidity of

investments

ex¬

Jersey

Reserve banks.

The

twenty years

over

■'

the municipal bond fraternity is losing

legal'and

SALESMAN
with

proposed rule and will present a;united front in fighting the Com¬

purchase them at its option before*
at the

that

Act bf 1934 and, despite strenuous efforts by the Com¬
the provisions of the Maloney Act providing for
Self-rreguiations of the counter markets, under the aegis .of the SEC.

The effect of this

recall

Exchange

adopting the rule in question.

Reserve Banks To
The

sources

Copies of
be had from the firm upon
request.
■;
■:
-.'.'i

Resell

These

specifically exempted from the Securities

was

mission, also from

Fla.,

may

ties.
•

CO!

Security Dealers Assn.

that

adds

St. Petersburg, Fla. Tax
Collections Analyzed

shorter April

combination

J. GOLDWATER &

its proposed bid and asked

(X-15C1-10) indirectly constitutes

by the Commission that has caused

sion follow the war.

ab¬ maturity

is virtually no limit

Participations

INC.

the welfare of the investing public and the nation's financial econ¬
omy.'/It is difficult to think of any other suggestion or regulation

explained, is to permit a bank;
funds, which has sold Treasury bills to;

definitely limited,

balance

Co.'s

Trust

throughout the entire securities industry as
previously manager of the trading
industry V.. „Of particular interest in thisi respect is.the fact that municipal
department of the Seattle office
does not now have surpluses to
bond dealers, who have always been immune from SEC regulation,
repeat' any
such*■ performance are concerned over the obvious attempt by the Commission; through of Merrill Lynch, Pierce, Fenner
should another period of depres¬ "sleight-bf-hand manipulation," to extend its regulatory authority to & Beane and Dean Witter & Co.

the

$882,000,000 2VzS,

Ctfs.

Mtge.
other

Members New York

edgement by the Commission of its failure to fully evaluate the very
obvious impractical nature of the proposal and its inherent threat to

Teletype CG 146

and dealers and other interested parties

national' income, as con¬
trasted with an average of 2.25%
for business and industry." V
* .•

the

companies of $510,000,000

surance

Ctfs.

Co.
Title

all

Ctfs.

Complete Statistical Information

I: Public Interest Held Imperiled by SEG Plan

the

The importance

purchase by the big five in¬

Co.

Dealers Conlinue Attacks On Bid & Asked Rule;

loss

Co.

Title

reaped

actual

hivited

Mtge.

Lawyers

HAnover

national: income,

Lawyers

Bond

Chicago

Tel. Dearborn 9200

not

from the re¬

4-6551

Specialists

Inquiries

against
1929, dividends

1929

over

bank¬

of these may be seen

WHitehall

REAL ESTATESECURITIES

facility for the execution of

-every

$94,540,000,000

; Meanwhile, business arid
industry during the depression

ev¬

large,

who

securities.

you

Members Chicago Stock Exchange

the

other non-commercial

trading personnel offers

our

William A. Fuller & Co.

banks

savings

$521,000,000 more, at the
of what capital received.
"Although national income last

"The Federal

may

con¬

customers

foolish

Are

Bank

individuals, ury bills that may be offered to
."but which are now being sold at such banks on a discount basis at
the rate of %% per annum, by a
the rate of about $1,000,000,000
further direction that any such
monthly. Then there are the longpurchases shall, if desired by the
/term governments for the insur¬ seller, be upon the condition that
ance

all

in limited amounts to

than

obtained

Aug. 7 that "the Fed¬
eral Open Market Committee has
supplemented
its
direction - of
exceed one-third of our total re¬
quirements. Next, there are the April 30, 1942, to the Federal Re¬
serve Banks to purchase all Treas¬
war savings bonds which are sold
in

increase

STREET, NEW YORK

•

this and

war financing will
derived into four forms," the

Shields -survey

expense

ident that the
be

99 WALL

and

huge

have

these

year

ob¬

that

serves

Avnr "no

Department

income

$11,257,000,000

was

i.Mi,

Stock

traders

mar.y

Telephones

ing and dividends being reduced,;1
is becoming more pro¬
nounced," Mr. Forbes points out,
"It
is
significant, that, whereas

Mr.

see

this trend

years

Exchange

cited by

7.62%.

1-2033

kind

Obsolete Securities DepL

WHitehail 4-6300

Teletype

Members New York Stock

what

want

Teletype NY 1-5

Exchange

that

foolishly high bids on obsoletc stocks and bonds.
But

you

Street, New York

The
action
of the
Securities and
64.7%; the share of business and
Exchange Commission in
industry declined from 8.64% to /extending to Sept. 15 the period for receiving comments from brokers

companies

Stock

$521,-

Whereas last year their share was

Newburger, Loeb & Co!
New

are

make

sider

"Since wages this year are ris¬

years

Members

25 Broad

Telephone HAnover 2-4300

"'.V

don't

Bridge (although We are
bad).
However, we DO

make

& Co.
e

of Commerce.

63.04%

CO,

MORTGAGE

local

other

decreased

1.72%.

tics obtained from the

CO.

MORTGAGE CO.

GUARANTEE
All

GUAR.

INSURANCE

TITLE

N. Y. TITLE

STATE

MORTGAGE
TITLE

Spencer Trask

$83,283,000,000 in
were
$1,295,000,000 less, interest
$606,000,000 less, net rents and
royalties $939,000,000 less.
*-.''4

CERTIFICATES

Forbes, head of the Invest¬
Fairplay League, from statis-;

year

MORTGAGE

8 NO TRUMP!
No,
bid

ments must

MARKETS FOR

capital
or

These comparisons
ors

■

Reentered as second-class matter Feb¬

ruary 25, 1942, at the post office at
Hew York, N. Y., under the Act of Mar.
8, 1879.

Nearer Victory!

year

000,000,

Week

pretty

increased, as: com¬
pared with 1929, $11,788,000,000,.
or
22.21%, while total compensa¬
tion

AND COMPANY

One

PREFERRED STOCKS

compensation of employ¬

last

ees

licrasifin

Total

week

na¬

is going to em-,
ployees, a shrinking slice to capi¬
tal, to investors and small business"

William Dana Seibert, President V
William

increasing slice of the

offerings of

Public Utility and Industrial

tional income pie

Editor and Publisher

interested in

High Grade

•

Herbert D. Seibert,

are

Nat'l Income: Forbes
An

Street, New York

25 Sprucei

Capital And Investors

619

position

rendering
clients.

only

service
Box

Chronicle,

York, N. Y.

basis

firm's

CM-20, Financial
Spruce St., New

THE COMMERCIAL & FINANCIAL

620

CHRONICLE

PALLAS
Bought

Sold

—

SEG

Dr. Pepper

lf you contemplate making additions to your personnel, please
send in particulars to the Editor of the Financial Chronicle for pub*
lication in this column.
•
•;
<
y
* W"•v": V

New Mexico Gas Co. Com. & Pfd.
Great Southern Life Ins. Co.

issue.

The

NEW

Ry. & Ter. 6% 1951

Ml Texas Utility Preferred Stocks
•'

Check

;

' ~: •' •"

and

Co.;

Burr

C.
are

Co., Inc., 150 Broadway.

MUNICIPAL
;

RAUSCHER, PIERCE & CO.
YORK, N. Y.—Norman J,
Marsh, formerly with Hornblower
& Weeks and G. M.-P, Murphy &

Ft. Wortk^Houston-San Antonio

Co., is

DETROIT

•

SECURITIES

(Special

to The

Chronicle)

Financial

MIAMI, FLA.

•n.

1 '

The

Charles A. Parcells (r Co.
of

Members

Stock

Detroit

William

Exchange

Flentye

Co.,

Inc.,

Graham
BUILDING.

PENOBSCOT

was

Building.
Mr. Schwanz
recently connected with Alex¬

ander &

MICH.

DETROIT,

Co.; Inc.

.i,"■

to The

CHICAGO,

ST. LOUIS

Edwards
with

ILL.

South

wards

was

Butler

Street.

Co.,

105

Mr.

Ed¬

for himself.

ness

509 OUVE ST.

Johnson,

Robinson

Minton, is

with Brailsford &

now

(Special

to The

St. Louis Stock

Exchange

Financial

Exchange Member Firm

—

Hotchkiss

has

Higginson

Lee

Hotchkiss was:

Form CrHttentfen & Co.,

ILL.

with

231" South

Chronicle)

mann

LOS

become

Salle

associated

Mri

Street.

formerly' for many

jyears with Blair, Bonner & Com¬
pany.

:V..

(Special
.

dissolved

Murray
.Hefner

the

firm

Mathews,
James

and

will

George

D.j

Murphy,
both of whom have been promi¬
in La

nent

to The

Financial

Chronicle)

The

Financial

Chronicle!

ated with Priester

Co., Daven¬

////

port Bank Building.

Salle Street for

sociated with various other firms
since that time.

Mr.

Murphy has

been with Kneeland & Co. for the

•business since

with Fuller, Cruttenden & Co. for
the past 10 years before joining

1930 and the elec¬

new

firm to member¬

ship in the New York Stock Ex¬

change
first

thought

time

vestment

;irofti' a

Salle

Street

Cruttenden

;

the

was

first

President of the National Security
Traders Associatioh.
den

and Mr. Tuerk

Mr; Crutten¬

directors

are

number of leading financial

/and industrial corporations in the
t

Middle

West.

All

seven years.

Cruttenden &

Mr. Hefner

was

Co.

Applicants For Chicago
/
Exchange Memberships
CHICAGO, ILL.

Exchange organization.
Mr.

in¬

York' Stock

New

past

the

mark

group - has
progressed
predominantly
trading

into

'business

partners

have

prominently identified with
the affairs of the Chicago Stock

been

Exchange in the past.
firm will do

— Applications
membership in the Chicago
Stock Exchange were posted to¬
day for transfer to Newton P.
Frye, President, Central Republic
Company, and to Marcy T. Weeks
of Chicago.
'

for

Mr.

the

Frye,

Board

new

taken

Street

and

209

which

SAN y

South

were

Salle

career

The

Accordingly/it
negative, also those

the

for personal considerations, deem it advisable

position

•

the question, to advise the

letter

their

ta take

Securities and Exchange
with reference to this

views

exact

of integrity, honesty

standard

minimum capital

and, when

requested,

These

not

reproduced

are

reveal

,»

.additional letters from dealers

rule.

and competence.

the

Governors

the

Exchange, is the second official of

ment

/■

with Blyth & Co. in

Chicago in 1928 and has been as-

Robt Strauss In Chicago
CHICAGO, ILL.—Robt. Strauss,
partner

York

in Strauss. Bros.,

City, is

still

of New

the

firm's

the

Philadelphia, on the recently approved amend¬
I, Section 1, of the By-Laws of the National Asso¬

to Article

ciation

•This
to have

Securities Dealers.

amendment, recently

voted

would

upon,

require

dealer

specific amount of minimum capital in order to be eligible
the Association;
■/ .>//;:•/

According to another article in the

FRANCISCO,

with

Davies

Co.,

Russ

the

result

The

Chronicle)

Financial

Louis A'. Keesling,
T.

the

Association

with

Mitchum,

Tully
&
Co.,: 405 Montgomery
Street.' In the past Mr/Keesling
was

partner in Potter, Keesling

Co: /. //.' ■■ -

(Special

to The Financial Chronicle)

YOUNGSTOW N,

sociated

Borton

with

shows

regard

is in the

Union Commerce

Building, Cleve¬
land/Ohio.
Mr. Stroh was for¬
merly with Otis & Co. and Butler,
■

Wick & Co.

newly opened branch' in Chicago
in the Board of Trade Building.
He expects to remain
for some little time.

in Chicago
////■

member of the

good

this

Association,

National

standing,

amendment.

have

members had

Joins

desire

Among

way

the

Financial

limitation

dealer

which he had been connected for
years,

many

with

has

become

Brailsford

associ¬
Co., 208

South
the

La Salle St., members
Chicago Stock Exchange.

R. F.

Ferguson Now

minimum

capital

restrictions which from

and

securities

Governors to

to The

Financial

Chronicle)

CHICAGO, ILL.—Rollo F. Fer¬
has become associated with
Brothers, 208 South La

guson

Faroll

Salle

members of the New
Chicago
Stock
Ex¬
changes. Mr. Ferguson was for¬
merly an officer and manager of
the trading department of Trac¬
tion Securities, Inc.
In the past

York

he
Co.

St.,

and

with Robert J. Phillips &
and Moore, McLean & Mc-

was

Dermott.

the

not these small dealer

time

will

impose

to time

be the

business

are

upon,

; -

considered

the

could technically

In the "NASD News," dated June
15, 1942, we quote;
investors and the promotion of the welfare of the

banking

"Protection
investment

the

Board

primary objectives of the National Association

of Securities Dealers, Inc."

We question this attempt of the Association in
trying to protect
investors through the means of limiting the minimum

capial of the
dealers in its membership. The regulation of morals and the conduct
the investment business cannot be controlled
by a minimum
capital.
Small dealers and members of the Association with a
$5,000
of

mipimum net capital operating their business fully in accord with
the rules of the Association and fair
practices may from time to time
have their capital impaired

which there

is not
a

the small dealer

This

market

changes

impairment
Such impair¬

same

30-day period, and leave neither

the large dealer any worse for the situation that

nor

;//-/v//

small dealer has $10,000 of net capital and carries an
$100,000 of municipal bonds.
Drastic changes in mar¬

inventory of
kets

sudden

dealer with $100,000 of capital.

temporarily existed.
Suppose

of control.

means

these bonds to decline as much as seven
points, which
impair his capital below the $5,000 minimum.
Through the
exercise of this dealer's judgment and a
gradual market improve*
ment, he holds to these bonds and gradually recovers his deficiency.
cause

would

Under normal

conditions

living for himself,

gives

operates under fair practices, makes a,
to several people, serves his

employment

local territory and likewise tends to
keep stimulated and broadened
the public consciousness of bonds and stocks and markets for
them. '

With Faroll Bros.
(Special

views

our

members

disqualify him and force him out of business.

Chronicle)

CHICAGO, ILL. — Edwin L.
Gilroy, formerly a Vice-President
of Webber,
Darch & Co., with

express

voice in reaching the conclusions that the Board

might also apply to

2,600-odd

of knowing what portion of this dealer

ment, however/may right itself in

Brailsford & Co.

ated

Association of Securities Dealers,

overnight

to The

announced

Governors approved and submitted to,the membership for. vote,

over

(8peclni

total

membership has small capital, and whether

as¬

Borton,

Inc., whose main office

E, L. Gilroy

issue of the "Chronicle''

same

amendment

that only 74%, of the total membership of
The

voted.

the

our disapproval of the proposed amendment to the
approved by the Board of Governors.
^
^

presumably

small

•

OHIO—

■

Stroh has become

Thomas W.

vote

We voted

by-laws

The
: ^

recent

membership of the Association
comprises 2,600 members, and the total votes cast, according to The
were 1,939, of which 738 dealers voted against the amend¬

formerly with

Stephenson & Co., has be¬
connected

the

Wallace H. Fulton

ment..
(Special

:::////";'; article,

'/ SAN .'FRANCISCO,/, CALIF.—

corporation to apply for mem¬
bership since the rules of the Ex¬

Executive Committee.

herer
of

source

''..'The publication, "The Commercial and Financial Chronicle," of
Thursday, August 6, carries an article stating that a public hearing
will be held on August 13 by the Securities and
Exchange Commis¬

Financial Chronicle)

Building.■.. •',/

formally
-

Mr. Mathews started his invest¬

ment

/•.

CALIF.—
Cedric
B.
Macauley,
previously
with
Bankameriqa
Company, is

brokerage

Opened Monday, Aug. 17.
j-:

Following letter was sent to the SEC by Fred Kirtland of the
Hermitage Securities Company, Nashville.
•
"/

Co., Bank

former Advifidr to

general
change were changed last month
busi¬
providing for their admission. The
ness specializing in trading all
first
applicant
was
George
F.
types of listed and unlisted secur¬
Noyes, Vice-President and Secre¬
ities including foreign bonds. It
tary of the Illinois Co. of Chicago,
iwill also act as underwriters and
who was formally elected to mem¬
wholesale distributors of its own
bership on Aug. 5, 1942, by the
.originations.
Offices have been
The

investment

voted

sion at its offices in

CALIF.—Carl

ith an 15 years. The partners have
been
associated
in
the
trading

tion of the

simple majority.

who

for membership in
(Special

come

CHICAGO,

(Special

with

of America Building.. //

Corporation,

den, Fred R. Tuerk and Kenneth
DAVENPORT, IOWA.—William
S. Beall, all of whom were part¬
A. Hutton, formerly with Steffenners of Fuller, Cruttenden & Co.,
Kleinhen Co., Inc., is now affili¬
Aug. 15. As¬
was

ANGELES,

obtain

even

was

DEALER No. 50

O.
been

Co., Inc., Circle Tower.

the

fu /

45% of the association's total member¬

dealers

the

communication.

(Special to The Financial Chronicle)

E ugene

ILL.: — John ; J.
p- CHICAGO,' ILL.—Formation of Krause has joined the staff of
a new Chicago investment house,
Rogers & Tracy, Inc., 120 South
Cruttenden & Co., to be members
La,Salle Street., Mr. Krause was
of
the New York and
Chicago
previously with Kirstein & Co.
'•Stock'Exchanges, is announced by
;,the partners, Walter W. Crutten¬

sociated

than

regarding the

added to the staff of A. J. Wich-

now

CHICAGO;.

which

has

afford
!

clearly stated by Frank Dunne,

was

We have recently received some

with C.

Inc.;

Co.,

not

Chronicle)

formerly

staff of H. R. Baker

Chronicle)

Co., 208 South La Salle Street;

Members

all

financial

* •''v

E. Knudsen has been added to the

to The Financial

CHICAGO, ILL.—Celia A. Rush,
previously with Sills, Troxell &

Teletype—-SL 80

System

could

at the hearing/

(Special

SAINT LDLf/S
Bell

honesty/ simply

far-reaching proposal. Unless dealers act immediately, they risk the
distinct possibility of being denied the privilege/of continuing in
business for no other reason than their inability to meet an arbitrary

Roney & Co. and R. C. O'Donnell
& Co./In the past he was in busi¬

previously with Alex¬

Seerley & Co.

x5r/x

and

INDIANAPOLIS, IND.—Charles

ander & Co. and prior thereto for
a number of years was with John
J.

James M.

Mr.
formerly with Wm. C.

was

Commission

with

Joseph P.
^affiliated

—

Bennett

Salle

|r;

Building.

Penobscot

Co.,

Chronicle)

become

are

character

did not,

any
„

Financial

has

*''L

—

(Special to The Financial
(Special

■

^niUIUUlCf.
Chronicle).

Financial

DETROIT, MICH.
ILL. — E m i 1 ' O.
Schwanz has rejoined the staff of

case.
It should be made jelear to the
opponents of the principle that "wealth
synonymous, and should supplant time-honored

ship and thus did not

Butler is now with A. M. Kidder

AURORA,

by: the Commission—is that the amendment in question actually

behooves

(Special

Chronicle)

numerous

The truth of the matter—as

who
,

to The Financial

that

approved by

CHICAGO

Co., Inc., Shoreland Arcade.
(Special

was

President of the New York Security Dealers Association, during the
course of his statement in attacking the plan and
urging veto action

Ann Morrison

—

take the plan

which it

in opposition to the plan constituted the
of the opposition and to permit ihat fact to influence

integrity"

yardsticks

Seaber is with The Rarison-Davidson

•

Incorporatefl

:'///

SECURITIES

and

Securities Co. '

since 1928..•'•Vv?T

Commission

Thompson Ross

LISTED AND UNLISTED

///

Mr. Marsh has been in the invest¬
ment business

gave

15, has been postponed.
indication as to its views with

expense involved in order to appear

connected with Baker,
Harden, 52 Wall Street,
investment department.

their

course,

date

in any way its decision in the

AND INDUSTRIAL

now

Weeks

decided

which appeared

entire weight

PUBLIC UTILITY
NEW

TEXAS

DALLAS,

; -

Commission, of

sentation

RAILROAD

•

therein^ the Commission

respect to the proposition.
It is earnestly hoped, however, that the
Commission will not conclude that the relatively small dealer repre¬

Mullallyf

associated with Amott, Baker

now

Y.—Frank

Charles

With

formerly

-i,

Southwestern Securities

YORK,

Bristow

As stated

under advisement and, as a
consequence, the
become effective; originally set for October

Southwestern Life Ins. Co.
Dallas

A review of the SEC hearing at Philadelphia on August 13 on
NASD minimum capital rule appears on another
page of this

the

Republic Insurance

•S-

Gosidering Minimum Capital Rule;
Dealers Urged To Continue Opposition

Quoted

—

Thursday, August 20, 1942

Is it the intent of the Board of Governors of the Association to
force such dealers out of business?
They have abided by the rules
of the Association and help to make and broaden markets for
the

bigger dealers.

reaches out into the

the
rural

small

dealer

districts

with

of the

the

small

investment

capital who

industry who

really

distribute securities and put them away permanently.
This
distribution through the small dealer is of aid to the larger houses

who could not

economically afford to reach these small

investment.

Certainly
on

some

high plane

small

be accomplished without forcing many dealers

capital watches

necessity than

better method of keeping the securities industry

can

out of business just because they are small.

the

avenues

isjikely

in the

closely

case

(Continued

The small dealer with

his net capital

because

of the big dealer with

on page

629)

large

Volume 156-

Number 4100

THE COMMERCIAL & FINANCIAL CHRONICLE

621

; C*-

'.
• ;.v
'/ *
\
/v ''
We Maintain Active Markets in "

& Sault Ste. Marie
4s &

Walter

,/7;,Opportunities in

Minneapolis, St. Paul

Tomorrow's Markets

Whyte

5s, .1938

;

.."

•
•

Chicago & North Western Railway Securities

Chicago, Rock Island

International Hydro

& Pacific R. R.

•<'

4s,

1934

4y2s,

Circular

request

1952

Montreal Light, Heat & Fower

Says—

3i/2s, 56-63-73

Roggenburg & Co.
:

•

■

■.

:.-

still

Members N. Y.

Technically, market indicates
higher prices; influence of
news

Electric

6s, 1944

■;

Security Dealers Assn.

Broadway, N.Y.

Members

■

Tel. WHi. 3-3840

Broadway

York

New

Stock

New York

WILLIAM ST., N.
"

•

;

Bell

RAILROAD

REORGANIZATION

HART SMITH & CO.

Exchange

Telephone—DIgby 4-4933

.Bell .Teletype: NY .l-;928

„

PFLUGFELDER, BAMPTON & RUST

•

IIAnover

2:0980

Bell

Teletype—NY 1-310

SECURITIES

Teletype

New York

1-395

Montreal

^.,"

Toronto

basic factor; rec¬

In; my column of Aug. -6
might be available for tender, has
discussing the* effect of
given impetus to this feeling.
{ V
Bp WALTER: WHYTE v f; " news on the market, I
Finally, it is believed that aside *
pointed
J '•)
/ (
*
'
«
from tax considerations reorgan¬
out I how
prices had risen
ization proceedings may
Reading the "Uptown After
be ex¬
when, the Nazi drive first be¬
3" column I also get nostalgic
pedited byr court decisions this
The conclusion being
fall, particularly decisions of the
for the good old days, though gan.
Late last week; the rail market, both in the stock and the bond
that the Russians would hold
not necessarily the kind that
lists', began to reflect the growing,confidence of speculators and in¬ Supreme Court on procedure in
them.
The averages then at vestors that an agreement has beeh reached on the question of the the Western Pacific and St. Paul
department referred to. My
These decisions
102 (beginning of the Nazi of¬ tax base of reorganization railroads, and that it will be included in reorganizations.
will
presumably
set
up
broad
nostalgia-is for the days when
the Senate's-version of the 1942 tax bill.
Bonds of the reorganization
fensive)'
moved
ahead
to
precedents which
will tend to
a
market opened with plus
carriers developed a far more buoyant tone and the
equities of those minimize
about 108/Later, as it was
delays and lost motion
roads which have already passed^
marks gathering strength and
in other pending reorganizations.%
ommendations

holdings,

I-.

■

in!

RAILROAD

SECURITIES

volume

the

minutes

flew

shown .that

the

drive

was

meeting with greater success;
by; by 10:30 it usually picked
the
market
backed
off
to
up more activity, attributed
about 105." But, as I pointed
usually to west coast buying
out in the same column, the
and by 11 or so it was zoom¬
rails being strictly domestic
ing .merrily along with the
affairs, ".
not only kept
tape behind the market.
"
:> \
ff: •' their
gains but added to
them." I further pointed out
Steel, selling for example
that this rail action confirm¬
at (?Q, would suddenly go com¬
ed a theory that the basic
pletely crazy when the floor
trend of the market changed
phoned • up * "Steel bid 65."

through

the

such

court,

law

tax

calculated

would

naturally

jjc

Customer's

;fc

would

men

hurriedly' calling

to the bull

side-;>;:,>C;:^,5'?

7 y#7

their

tomers to tell them

market

be
cus¬

Steel
the tape and 65 on

7'.

'#y;y777;v;/7

;

Since that time the market

has dawdled

along, doing lit¬
is 61 on
importance until Tues¬
the floor and I hear—confi¬ day, Aug.
-18;; On that day j
dentially of; course —- they're Valume increased almost'
goipg to take it to 7Q before 100 % over what it had been
the 'gong.";-:hp#:*' h>.7
w\f:|t for the ilast few weeks: and
was

very strong.

V...V

tle of

prices went

with the rails

the good in the lead. It was interesting
dyed in the to see that the same day the
wool Wall Streeter longs for. market volume picked up the
Sure, we had our beefs, taxes news came from Russia that
(remember ?),. '7 We"r thought the " Nazis had been driven
they were big then! Congress back from Stalingrad. ;;J;;
was
still looked upon ^ as a
y7 ■ .*y * ,7 * ■
.yy777
source
for the latest ;jokes.
Whether this was the rea¬
Customers were not talking
son for the marked advance I
about doing something; they
don't know. ! I don't believe
were
really doing it. The the successful attack
by our
average broker's biggest forces
against the Japs in the
headache was to stop custom¬
Solomons is the reason either.
ers from over-trading. •
And
Yet, whatever the reason the
the customer in turn tried all
market did go up and by do¬
his wiles on the broker to get
ing
so indicated still more ad¬
him to allow him to buy "just
vances;
The industrials did

those

Ye$;

old

days

were

your

another small lot.'V

l.'.77

(

V;l* ,7:

In those

•

days a man could

not

go down the four points
or so and the rails did not
go
down the point or Two either

get up mornings with some¬ of-which would have
changed
thing, tp look forward to. To¬ the market outlook.:
;

day he wonders if it's worth
the "effort. f
*>; : ; f -,: ;y '
/
*

v.;.-

•

ent^ hopelessnessand gloom
things

are

this

what

based to

Yet

son.

improvement

save

tainly the

war

How far it will go up from
a matter of
conjecture.

Technically, the market indi¬
cates better than

just a minor
Yet the influence of

news,

looked.

rea¬

market—and

judge improve¬

what

stocks

with

respect

to
: ■

: ;

cannot

therefore

over¬

believe

the advance will be limited to

another 2

say

3 points in

organization

progress

tion to pending plans is based

potentially ^insuperable

burden

New

picking

when

the

excess

profits tax would presumably be
repealed.
If reorganization progress were

the basis of old

capital¬

izations, with their heavy tax free
fixed

If plans are con¬
Treasury collects

charges.

the

summated,
income

taxes

the

basis

of the

capitalizations

with
their
materially lower level of fixed
charges. Under present laws it is
new

the invested

cap¬

of the reorganized

road

contended
ital

base

that

would be represented by the face
value of new bonds issued and
the

fair

value

of the

stocks

new

the time of issuance. Consider¬

ing the low prices at which stocks
of. newly

reorganized

companies

normally selj it is obvious that
the
burdenimposed by excess
taxes calculated on, such
invested capital base would be

The

.<!:

suicidal.

best

time

tion'

•,/

at the present
compromise solu¬
- will
at

guess

that

the > controversy

least, pro vide for invested capital
based on the stated value of all of
the

new

securities.

naturally like to maintain

their

pre.-reorg^nization

capital

base which would allow them lee¬

for 'future
as

property

retire¬

tax deductions.

uncertainty, which,, incident¬

doesn't

give us a jolt. But the

market in its
way
it

own

phlegmatic

either goes up slightly on
at

'has

forestalled

dividend

lying technical position of the

preferred in the face of adequate

market will reassert itself and

reported earnings, will be finally

take

prices still higher.

(Continued
t • '

ally,
action

worst stands still.
-.'j.tKJ

improve

U > »

But

settled

the

relatively

near

page

622)

term.

Duhldp C. Clark is

Washington

Division,

'5s, due 1950

•

Copies,

...

available

WALL

STREET,

Bank

NEW

served

request.

CO!

LEROY A, STRASBUR6ER &
WHitehail 3-3450

La.

YORK

Teletype: NY 1-2050

addition

confidence

remedial tax

legislation, there are
ether factors working towards a
widening public interest in reor¬
ganization bonds.
Practically all
of these roads are still reporting
particularly wide earnings gains,
and cash

accounts

are

being

cor¬

With
nothing else to do with the cash
respondingly bolstered.

to the

Kalamazoo

President

ditional

year-end

some

interest

roads

Colonel

are

;

the

tive

Association

man

which

Oil

has

for

6s/35 Bonds

ap¬

because

from

produc¬

gross

specific pieces of

7"
i
monthly returns from
leading oil companies;
Are an ideal inflation hedge
,

Pay

both

large and small in-

'7.. vestors.
Ask

about

Oil

today;
to

Royalties

Georgia & Alabama

We.1 specialize
in offering-, them
registered dealers and will show

1st

why

5s/45

Bonds

Ctfs..

1st

ment

they

are

for

your

Members

specialists in rails

"
TTT

you

invest¬

attractive
clients.

TELLIER& COMPANY

3y2s/45

1. h. rolhchild &
11 wall street

;

simple, carefree ijnt7

based

for

S eabccrd F€cei\ers Ctfs.
-

Mem¬

NOT subject to stock

tion

Ctfs.

sound

clients

your

Are

re¬

Chair¬

Producing •
Oil Royalties

We also maintain net markets in

Seaboard All Florida

Bankers

years,

PEACE

market fluctuations.

blocks or odd lots ol

HIGHEST GRADE RAILS

ac¬

"*>T^ If

land;
As brokers we Invite inquiries
,.

been

many

Royalties have

peal

case,

certificates

for the

Committee

■

The action of

receivers'

officers

In WAR

making inquiries as to the prices
at

Both

absence

American

for

the

ing fnore liberal participation of
the remaining bonds in final re¬
Seaboard

and

bership to enter the service. '

vestBrent,

the

elected

was

/Board,

signing his third term

they^are

1933, has

the

court

Clark

Colonel

pay¬

;pay,ment of the principal of
underlying:* liens thereby allow¬

the

1938.

leave

inau¬

and

Kelly has been Assistant

Also, in some instances, where
plans are not too rigid, or too far
advanced, it is felt that strong
treasury positions may 4 result - in

the

Eastern

Oil

Royalty

Dealers

Association

co.
•

the or-i.

duration.

guration of payments by others.,,

organization plans.

until his call

colors, when he

Chairman

being accumulated, the public is
beginning-to look forward to ad¬
ments

one-

Clark,

Cashier since
In

with

ganizers of the American Nationaj

dealers only,

thq

O. S., and Lieut.

iCamp Polk,

HAnover 2-9175

two

resii

the Eleventh, Armored- Division

Chicago Great Western

over

the
any

Southwestern Division

In any event

in the meanwhile the under¬

Col.

duty

ion

Col. Leo F. Kelly is serving

will lie somewhere between these

the

held

Kalamazoo./

Lieut.

Hardly

Nationaj

Baltimore & Ohio

possible that the final settlement

up.

Colonels

ranks

It is

points of view.

news

Lieutenant.

The railroads

would

MICH.-—Two

qf, Kalamazoo are serving
United
States;'Army as

--Colonel

stopped for the duration, the roads
would just be liable for income
taxes

L'--.'

the

Fiscal

until

reorganizations
war

Bank
in

descriptive analysis of

with considerable' logic, that the
existing laws would act as an ef¬
fective bar to consummation of

two

the

;

Chicago

Exchange \

dents of

probably suffer in the matter
of tax receipts
i|. the relief is not
forthcoming.
It ."has; been held,

market
Should

York

Stock

We h ave prepared

will

the

develop¬

KALAMAZOO,

highest

' compromise

any'

the

day passes but the news

York

does—is

Nets

tax

amendment, is that the Treasury

after

tax

officers of the American
Members

that is expected to bring Treasury

additional

benefit

will

In The Armed Forces

Bear; Stearns & Co.,

no "legislative
remedy
provided. One of the strongest
arguments of the railroads for a
change in the law, and the factor

ments, etc.

meets serious resistance.

•

'-U

way

(28-29 D.. J.L before it

ments.

support'

these

Issued) " \

those

properties now in the courts, as in
many instances important opposi¬

D. J.) and 1 or 2

rails

that

Equitable tax treatment would

the industrials (about 110-111

points in the

feeling

most from favorable

Kalamazoo Bank Officials
:>a-

also be calculated to expedite re¬

profits

basic

Cer¬

life.

isn'Ohe

the

after all I still

ment, by

•;•

gradually improv- rally.'

I couldn't tell/jpu

ing.

•

here is

Yet beneath all this appar¬

these

dividend prospects.

the

7:7

new pre¬

clarify the position

...

get substantial blocks of

Securities
( When

in¬

are>

ferred stock for tradihg purposes,

Reorganization

analysts

favor bonds destined to

clined to

Railroad

stock, traded
expanding volume at, or close
to, the 1942 highs. Any liberaliza¬
tion of original interpretations of
in

the

railroad

Many

Eastern Illinois "A"

•

Erie

certificates, Chicago Great West¬
ern
preferred1 and
Chicago' &

Established

42 Broadway

1931

New York, N. Y.

n.y.c.

Tele. NY 1-1293

BOwling Green 9-7949
Teletyne NY

1-1171

THE COMMERCIAL & FINANCIAL CHRONICLE

622

inflation, will net earnings of
companies be larger

Thursday, August 20, 1942

Mortbon

•

Interesting

the insurance

smaller?

Bank and Insurance Stocks

the

what

This Week—Insurance Stocks

larger

be trans¬

in reorganization to the oldMort,-

earnings—and

gage-Bond Company of New York,

can

side

insurance

the

stock

contend
that,
under
This has been a recurrent argument
phenomenon of the decade just past but, for obvious reasons, the present conditions, it will be vir¬
situation now facing us seems eminently more threatening than any tually impossible for the insurance
that has gone before.
We now have real, tangible evidence of short¬ industry to produce higher net
(i.e., higher than /the
ages in purchasable goods, of vicious wage spirals, of astronomical earnings
average of the past few years).
spending and borrowing.
It is noo*
—
Underwriting
earnings,
if
any,
longer a question of whether we
are
will be taxed heavily and invest¬
going to have inflation but

circles, is Inflation and what to do about it.

how

and just what

mucn

acteristics
under

will

effects

and

ment

its char¬

"social

controls

and

tives"

primary political consid¬

with

Hartford Fire

objec¬

ance

For many

true

living is

those

whose

part,

income

dollar

real

their

and

those

who

higher expenses and taxes, and, at
succeed in preserv¬

tions

the same time,

ing

intrinsic worth of one's
is the time-honored

the

that

insurance

bound

matter of

4-2525

much

definite

tember

•

score.

pointed out, by these con¬

scientious

objectors, that the in¬
industry cannot expect to
immune to. taxes, profit

surance

problem of inflation for investors
and the managers of investment

restrictions,

funds.

tition

Many
investors,
discouraged
with their own efforts and de¬

ments

remain

and

government

compe¬

other

impedi¬

the

all

which

narrow,

1942.

12,

The Board of Directors

bankTof

of Ameri¬

Cyanamid Company on August

Capital

Paid-Up

divi¬

Reserve

Fund

Reserve

Liability of Prop.

Stock

mon

Company,

the

/Sept.,
'■■■

W. P. STURTEVANT,

' "

•

Assets
1941

Aggregate

of record at the close
September 12, 1942. - ;.

of business

SIR

ALFRED

8,780,000
£23,710,000

pay¬

of such stock

6,150,000

-.-—v

■

holders

able October 1, 1942 to the

£8,780,000

—

per

share on the outstanding shares of
the Class "A" and Class "B
Com¬

30th

£150,939,354

DAVIDSON, K.B.E.,
Manager
'//'

General

Secretary
Head

result,

Office:

George Street, SYDNEY

The Bank of New South Wales la the oldest
and

New

With over

largest bank In Australasia.
branches

870

NEW YORK TRANSIT COMPANY
26 Broadway :■/>'< / //■;"
New York, August 20, 1942.

,
'

all

States

Australia,.lo

Zealand." Fiji, Papua and New Guinea,

and

London,

and

efficient

traders

the

offers

banking

and

most

complete

to lnvpsforg,

service

interested

travellers

OFFICES:

LONDON
;

•/

handling

sessed

investments

pos¬

insurance

com¬

the

other;

words;

analysts

some

been very

stocks

insurance

that

feel

railroad

the

elsewhere. indeed, be more vulnerable than!
However,
"the
record
of
the the general run of common stocks.
better-run
companies has been The following table* gives the
outstanding, and they have usu¬ price history of some of the better
ally managed, through thick and known insurance issues during the
thin, to invest their premium in¬ past decade:
v
come to advantage without jeop¬
1932-1942 Price Range
Last
Low
High
ardizing the dollar value of their
business

ance

just

assets.

\> Another

for buying

reason

in¬

stocks recently

surance

that they

the

belief

one

of the

has been
will provide

"hedges"1
Historically,

best possible

inflation.

against

insurance stocks have an excellent
record

that respect.

The

case

for insurance stocks has been pre¬

frequently and ably, by
many
analysts, economists
and
investment advisers.
The theory,*
sented,

in brief,
a

rise

is that inflation leads to
insurable values, larger

premium income, lower loss and
expense

ratios

in.

and,

conse¬

•-

Aetna

Casualty

Aetna

iFire),

American Insurance
American

Surety
Insuiv
Cas'lty

Deposit,

139

Continental

Fidelity-Phenix
Fund-—

Fireman's

124

48 Va

13Va

69 %
18

Fidelity &

15 Va

133

4V2

world ,to-

38 Va

321/a

;;

Great

Home

Ijns.

Co.

National

18 'A

A.—

"Liberty—

National

Union—166'
Irjisur.
110
& M.,J1 268

Phoenix
St.

U.
U.

greater earnings, divi¬
dends and liquidating values ac¬

Paul F.

Springfield F. & M.
S.
S.

Fid.

151
30

Guar

71/4-

il52

•;

insurance

Such is the

stockholders.

ortho¬

and

customary

garding

the

stocks at this

merits
time.

may

will

take

Needless

surance

hard hit

in the case,

be obtained from G. A.

randum

companies
at that time

Co., Inc., upon request.

Saxton &

again,

doubtless

repeat

itself.

therefore,

be of

consider

..;f/ : -vf

■

August 19. 1942:

Directors

;
Jersey

New

City,

Jersey

this

declared

day

dividend of qne and three quar¬
cent (!%'/)- on the Preferred Stock
nt the Corporation, payable September 20, 1942
to stockholders of record September. 5, 1943,:,
v
per

,'''

McKENNA,

Treasurer.

Banks
Executive,

age

Newmont Mining

surance

Bank

Trust Company in this

follows: Air

-V.-'j

dividend of 3714 cents
per share was declared on the capital stock of
Newmont Mining Corporation, payable Sep¬
tember 15, 1942 to stockholders of .record at
the close of business August

/<>'/'

29, 1942.

W"'"".'. H. E. DODGE, Secretary,

vester

Financial Chronicle, 25 Spruce St., New

York, N. Y.

or
a

stop at 66 (lowest price last
week 66 Vi);
at

Magma Copper Company
V

Dividend No.

August

19,.

1942,,

of (Fifty
capital
payable

dividend

Cents per share was declared on the
stock of .Magma Copper -Company,

September 15, 1942,

stockholders of record
1942. ^ '

at-the''close of business August 29,

stop at 44^/2; take half

profits at 50 or better (stock
is now.49 bid); Union Carbide

at 70

International

Dividend No. 56

On August 19, 1942, a

;

half profits

it)

take half profits
Stock is how

better.

You

70.

bought it at 59;

This

gives

of 11

points. Crane stop at 111

you a gross

hold

Pittston

and out

just

profit

speculation.

ish -New

Year,,.I, extend to : the
people of America my.
heartfelt
greetings.
The tragic

Kennecott

September 30.
close

the

Jewish

of events

Copper
1942

Corporation:

to stockholders

business
A. S.

August

payable
of

28,

record

1942.

CHEROUNY. Secretary.

out
;

Rail

many

follow the above ad¬

vice you

can't be hurt.. If the

market

goes

hate, intolerance and bieotry."
Secretary of the Navy Fynox and
Secretary

the

Interior

Ickes

also issued similar messages.

bers of the New York

Stock

Ex¬

you'll .be

off

stopped out and what losses
you'll take will be taken care
of

If the market

by profits.

goes up
in paper

which has tempo¬

Has Possibilities
peoples of the^
Securities of the Chicago and
world suffering under the harsh
domination * of foreign- dictators North Western Railway offer at¬
has stirred America to the/depths, tractive possibilities, according to
and has strengthened ..Qur resolu¬ a
circular - being distributed by
tion that there shall be 'no .'com¬ Pflugfelder, Bampton & Rust, 61
promise in- the' struggle against Broadway, New York City, mem¬
left

If you

have

profits but will still

position to ride along

with;

you'll not only cash

More next

city where a thorough knowledge of all classes of
investment securities is desired. Highest reference,,*
Box INS-7,

Reduc-'

better.

rarily

business, wishes position with In¬

Company

tion stop at 31; take half pro¬
fits Tat 35 i or better.*
Allis

break

Corporation

■

turn

45, 22 years' experience in bond and

stock brokerage

vice is

Companies

specifically
hold the ad^

this

"Upon the occasion of the Jew¬

Insurance

Applying

to the stocks you

Chalmers stop at 23 (stocksold
at 23 last- week but didn't

*;
J- "
II. E. DODGE, Treasurer.
would pledged that • "there -shall- be no
But, of compromise in (the strugg 1 e
course, no one is now thinking in against-hate, intolerance- and big¬
KENNECOTT COPPER CORPORATION
■/;
v';
1 •• '*'••-v'-r
terms of deflation.
What it really otry."
i,
120 Broadway, New York City
:
The message, issued through the
boils down to is this: inflation or
;
August 18, 1942.
Jewish ..Telegraphic
Agency
in
A cash distribution of twenty-five cents (25c)
mms
Washington on Aug. 11, was. as. a share and a special cash, distribution of fifty
cents
follows:
V
'
(50c) a share have today been declared
*

interest,

■;

Place,

quarterly

;

Compromise

President

in the

happens it's still the
wisest plan to play 'em close
to the vest. '
"
?

::v;';,/■//. 1

and, should ha-Shanah, the Jewish New/ Year
way to which will be observed Sept J 12,.

deflation

ultimately

and

Roosevelt, in a mes-:
say, the in¬ sage of greetings to the Jews * of
were
very America on the occasion of Rosh

place

give
history

inflation

of insurance
It

1933

future.

experience when
monetary
depreciation
has
oc¬
curred.
However, faith in the
normal has been so shaken in re¬
cent years that it is not surprising
to find a lack of unanimity re¬
the

Inc., 70 Pine St., New York City,;
which discusses interesting factors

pected, by everyone that no repe¬
tition of the conditions in '1932

reasoning and such has been

dox

431/2

Naturally, it is hoped, and ex-^

company

Exchange

until that

Electric Corporation

|
One

(Continued from page 621)

Philadelphia, Pa.

The United Gas and

memorandum just,
G.^ A( Saxton & .Co.,,

27%:

;

115

■n

Says-—////:/.

I.W.MORRIS Treasurer

71/2

258

quence,

cruing

pessimisrp over the position'
Corporation and Company,
debentures of Associated Gas &,
Electric does not seem warranted,
issued

■T:

///f;

THE UNITED GAS IMPROVEMENT CO.
July 28, 1942

ters

-1%

Copies of the memo¬
the August, issue of.
"The Preferred Stock Guide" may.

58'/a

Fire

551/2

11'/a

National

;

17V4

Fire

//:"-;//

The

according td

6%.;

alone will tell; ;

of the

8 41/2

■18%

41 Va

Insurance-__

5 251/4

-57V

33'/a

Fire

151/2

Insur,,-

American^,

Hartford

Walter Whyte

al^|e September 30, 1942, to re¬
spective holders of record August 31, 1942.

Firemen's

flation, the last may be first and
vice versa: Perhaps that is the
Time

i;-'.'/j,-

Tomorrow's Markets

share on Common
-Stock have been declared, paya

previously been doing/very

Interesting Situation

118 V

15 "/a

10 cents

sSHSl

badly, i.e., earning little; or noth¬
ing.
In other words, T comes in-^

Banks

Preferred Stock and a dividend of

i/JMlf

taken*,up.;b^

inflation-minded, have-,been
It is inferred, from this,
that the best inflation hedges are
the securities of companies which
have

arrangements with

Agency

:///■• '"/ throughout the U. S. A,:

T',e current quarierty dividend
ot $1.25 a share on $5 Dividend

The- Board

'49%

li^l

booming.

answer.

117V2

IJfIa

■

the

13%

Tg5Fi

securi¬

ties, supposedly the last -issues in

•;/.

have

disappointing in recent

whereas

months

Results have been by no have done so well—up to this
means uniform, of course, because
point—that they cannot maintain
human frailty exists in the. insur.r the pace they have set and may,

panies.

stocks"

Threadneedle Street, E. C.
Berkeley Square, W. 1

"inflation

these

countries.

orthodox

1817)

(ESTABLISHED

shifting

Zealan^

NEW SOUTH WALES

large investors are concerned, be¬
upon industry as a whole.
It is. cause
they are unable to .. shift
A "-dividend
of
Thirty- (30) Cents per
the burden to also pointed out that the best
their
holdings
to
any
worth¬ share has been declared on the-Capital
other shoulders, have hit
upon grade insurance stocks are selling
Stock ($5.00 par value) of this Company,
while extent even when they wish
the
idea
of
buying
insurance close to their high prices of the
'payable October 15, 1942 to stockholders
to do SO.
of record at the close of business Septem¬
Stocks,
Thus far their confidence past ten years — and that they
Just to add to ;the:*confusion, ber 25, 1942.
'
V;- /•/;/. C-V
has been vindicated in most cases, are -probably
selling higher in attention is called to the fact that
••;',/■
J. R. FAST, Secretary.
yew organizations have,} had the relation to other similar equities
chemicals,
coppers
and
other
length and breadth .of experience than
they * everhave; before.
of

sirous

Deacon's Bank, Ltd.

Glyn Mills &

/'■■'./

18, 1942, declared a quarterly
dend
of
fifteen cents
(15c)

largely academic, where

ment

A >

Australia and New

flexibility of investment manage¬

visited

being

are

creasingly

Associated Banks:

/Williams
'

COMMON DIVIDEND ;

;

can

principal loss than has
usually prevailed.
As investors,
the insurance
companies \ are in
the same boat as everyone else.
More securities are being injured
than benefited by the war effort,
and
markets
have
become... in¬

reserva¬

;";X;

£98,263,226

.///•■//

/,///

(preference dividend

come over

raised by.

questions

have

that

It is

the

Burlington Gardens, W,f

;

Arnerican Cyanamid Company on August
18. 1942, declared a quarterly divi¬
dend of 1V*'/« ($.125) per share on
the.outstanding shares of the 5%
Cumulative Preference Stock of the
Company, payable October -1, 1942
to
the holders of such
stock of
record at the close of business Sep¬

satis¬

less

> •

The Board of Directors of

fact, with the lower ef¬
their investments,

will

there

E.C. 1

Charing Cross, S. W. J

NOTICES

Company
-

fective yield 011

„

y-yfe

compa¬

suffer.

Bishopsgate,E. C. 2

8 West Smithfield,

/ sumr

American Cyanamid

;

With bond inter¬

the

securities.

interesting

OFFICES:

TOTAL ASSETS

factory margin of investment in¬
of

keep

capital,

DIgby

this

DIVIDEND

;

NEW YORK

Telephone

in¬

nies

Scotland

throughout

64 New Bond Street, W. /

rate would alter the situa¬

income

i,u.vnunye

exchanges

City, specialists

be obtained from Brisf
tol & Willett on request.
...'/

subject to the surtax and with
dividends on common stocks being

further;

even

some

jtocic

leading

WALL ST.

the inflation wolf
from the door, ie., how to offset

How

turn,

isew

other

OFFICE—Edinburgh

LONDON

mary may

est

et
Mcmuera
'■

115 Broad¬

the- counter

Copies

considerably reduced, investment

Savings bank

is bein reduced

Quoted

—

scale

depositors for example, have al¬
ready taken a severe cut in their
come

Sold

—

dependent, in whole
on the
income from

investments.

their

Bought

This is particu¬

over

industry which has thus far

surtax

HEAD

Branches

will be

earnings

tion materially.

simply

sheep's clothing.
larly

Phoenix Fire

classes of people, in¬
deflation
in

unusually fortunate in: -that
respect.
A steep increase in the

eration;

flation

New York

way,

been

National Fire

by Bristol & Willett,

harder to
maintain.
Heavy taxation will be
a
new experience for the insur¬

Aetna Fire

system of selective price

Incorporated by Royal Charter 1727

has been prepared for distribution

Those who have taken the nega¬

•;

tive

Royal Bank of Scotland

of the current

larger

extent

dividends.

at present, in investment

Probably the most discussed subject

into

situation of the Mortbon Corpora¬
tion of New York, the successor

-volume of business

lated

is
industries,

problem,

with all other

case

will

The

A brief summary

„

[The
irticle

views
do

not

coincide

Thursday.
Whyte*

r—Walter

expressed
with

r.lme

request.

those of the author only.]

necessarily at

change.
Copies of the circular
may .be had from the firm upon

Chronicle.

They

are

those

this
any

the

presented a$

•

Vblume 156

THE COMMERCIAL

Number 410.0

■JTf

FINANCIAL CHRONICLE

622

Defaulted RR Bond Index

AFFILIATED

i The defaulted railroad bond in*
4ex;f ofyBflugfelder, Bampton &
'Rust/ 61

Two Suggestions For

Broadway, ' New York
City, shows the following range
for Jan. 1, 1939, to date: high—*

Keeping Up Sales Morale And

Confidence. In The Job You Are Doing
-

«sDealers. ?They.irankly^ statedthat they shared < the ■ alarms; of"inany
others people, in nthe isechrities^ business 4ae [tp the> factTthar ^avlarg^

salesmen are .now reported to be on the verge of
leaving the business, because of their declining production. .■*
number - of> Security,

<They made the point that many $
qf these experienced'men realized
that their drop in production was
Confidence m the job4. they -were
A tying: tordo.,They offered some
excellent'ideas, for establishing a

J-.vf

Members

the

-A

•

Lord,
Abbett & Co.
\
y,'1

INCORPORATED

Trading Unit Change
;Stock'-. Exchange

request

.-.♦Sv,"»•*<
a

]N¥SE Members Vote for

> ^

War & Oil Production

[

New York
approved

CHICAGO

have

Wall

Street, New York

JERSEY CltY

LOS ANGELftS

/of .thewar' on oil |he[ amendment of Sections 2" ancj
production was further illustrated j4.vpisr-Article ,XV~ of the Constitu-j
recently, by hews from Washing-, Jipn. relating do , commissions and

Effect

/..[. The

'due tbtheir- lost enthusiasm and

Prospectus

40%; low—14%, August 19 price
•' I

On July 31,1942/Butler-Huff & Co. who are are specialists iriln-: t-r38%.
surance and Bank, Stocks -sent' out an interesting memo to Investment

\t;.*.

ton that

California production Was

fallinl ..short of ; the^pr esent de-[
marid by 20,000 barrels dail^,"
arrieridrnerit estab¬
cording" to information Supplied lishes; [[uniform minimum commis-r
by Tellier & Co., members' of the slons ; krid 'clearahdeT chahges c>h
Eastern Oil Royalty Dealers! AS-? stocks,' irrespective of the size of
sociation, at 43 Broadway, New the" trading unit, and removes
York City. !!■
y [^-[-yyy [[*y/y existing (obstacles to the adoption
Most encouraging [to. operators by; 'the
Board of Governors 6i
in the Permian BasirfinTexas trading liriitsof any size Of 100
was the' news released in Wash-;
shares,0r;less, for any stock:
iiigton recently/by Robert E. Al¬ [. The Board's approval of the

rebirth of confidence- and interest
un :

Security selling,

the part Of

many, sales organizations.

I - The suggestion they, made wbich
Was based upon

the normal desire
share with others,
,•any idealor experience^,which has
made a vivid impression on one's
self, is something this column-has
of everyone to

advocated many times in creating
sales incentive and customer in¬

terest.

other

words,

as;

this

memo stated, "The successful se¬
curity firm today is the one who
'sells' its, men so strongly as : to

create

them

the

len, Assistant Deputy Petroleum
Co-ordiriator, that California pro¬
duction was "failing" to • meet the

amendment and" the bhanges pro¬
vided by it were noted in these

the Pacific Coast and

Following, t h e Constitutional
amendment, the Board of Govern
hers
has
made
the, following

demand

that it* would be; necessary to move

normal
idea
to
sell
the
same
idea
to
others."
They stressed the advis-r
ability
of. salesmen
confining
very

West

Texas

crude

there.

New

and

Mexico

that has

themselves to the securities of one
or

two industries.

In this

:y,

to Basin

come

the

since

manner

;;.v';y!;[!ry■

If is the first bit of good news

columns Of

study the sales literature of the successful invest^
ment companies without coming to the firm conviction that simplicity
is the keynote of their success.
The flashing folder, the intriguing presentation, the im¬
pressively ''frock coated" book¬

simple ideas
produce
out

changes in the rules, to become
effective on Aug. 24, 1942:
•

Rule

105 has

been

amended

<
oped by Keystone in its long and
distribution of its funds,
;it
would be the
"Classes or
Securities" idea.
This simple, Iny
successful

let may provide a
temporary
fillip to sales volume.
But the

producers

transportation problem

Aug. 6, page 450.

SIMPLICITY IN SELLING
One cannot

the

are

contestable

which

ones

various

day - in-arid-day-

with

regularity.

These

sales helps take many

woven

They may tie in directly
with the nature of a particular

permit the Board of Governors to

investment

company;

descended upon

entirely

A recent folder deals

with

the oil industry, adopt for. a particular stock any
may stress an aspect of our pre¬
reduction in the [unit rof trading of 100 shares or i
vailing financial situation; or
less.
of
which
the
y[[.,[,''■ '[;'''[:;'['[h![.V;1
curities they were offering, that
r j [/
[ they may be built around some
brunt
fell
on West Texas.
It
was
A'
new rule, No. 114, has been
Custodian Funds)
their knowledge would approach
basic economic principle.
But
the natural course of. events due adopted, it is designed to
the point where they could be¬
govern
whatever form they may take,
to y the
geographical
position
of
tradihg ih arid-deliveries of stocks; the
come specialists in these particu¬
simple sales ideas are uni¬
the Basin, placing it "in: a hone too Wjhich; will he dealt in without the
lar fields.
v. V."'''V'V.\:y
11V.
versally
based
on
something,
favorable position from a trans-! use - of cabinets- in units -of less
>
Another worthwhile suggestion
fundamental.
*
yrit
y
than 100 shares at Posts 1 to 15,
portation
standpoint.
Then,
too,
for
overcoming pessimism and
some of the larger purchasers have' inclusive.
•' /[•■ r^.;[[;.[;:;";[lv:.;•v:•;./ '■*
Take,
>
for
example,
the
little
•lack of interest, in the job we have
not
been inclined
to; fake the ["Present Rule. 114 has been re¬ folder recently prepared by hugh
to do was based upon the human
Rule 115 arid has W; Long & Co. for use 'with Man¬
sour crude and bear the: added ex¬ numbered: as
desire "to be in the know."
The

they could so well familiarize
themselves with the individual se¬

necessitating

State

been

has

this point and is
prepared so that the investor may
easily choose the particular class
of securities
(as represented by
the various series of Keystone

they

are

with

into much of the Keystone

literature.

forms.

there

securities

characteristics

varying

simple
different

that

fact

classes of

allowable,

which is

most

.thatand

about

know

may

-hold

interest

own

be worthwhile tell¬

likewise

ing to another, the

likely is
"bur own interest in a subject to Hbe
kept alive and kicking.
In re¬
spect to Butler-Huff's own inter¬
more

and

Shortage on Coast
break

for

Basin

the

(

has

developed through the demand-on
the
Pacific.
Coast
which
has
in leaps and bounds from
623,000 barrels daily in April to
an
estimated. 769,000 barrels for
August. At Washington, Allen an-;
nounced the California production
was falling
short of the current;
demand by 20,000 barrels daily.
This is due to requirements of thei
Navy and other sources.
grown

•such inside facts to generate en¬

take the liberty of
[quoting from this same mem¬
oranda.
.vv/v-;:t yi
,yyy■'•v■, v.•;: "To use the fire insurance in¬
dustry as an example: A really
fascinating story can be built
"around the coldly * mathematical
"nature of its operation; which re¬
duces the dependency of the busi-'
Hess oh management; Upon the
part which the industry plays in'
all human activity- by reason of
[which the law,- in effect, insists
"that, the business operates profit-'
ably; the basis difference between
thusiasm,

The

industry,

example of how to use

as an

est in the fire insurance

It was built
of refinerymaintenance^ been amended- to; eliminate spe¬ hattan'Bond Fund.
they could get more of their cific regulation "of the -method' of entirely around the two basic,
oil elsewhere and market it dealing in odd lots Of 10-share- Simple fact that investors today
greater profit
[ri V'.'V4, unit stocks traded at Post 30 and are faced with higher taxes and

pense
when

anything

unusual

to. eliminate reference to. the dif-

lower

ferentialsrion .ocld .lots [ of

two

The text

stocks.

such

of former

has. been simplified in draft¬
ing new Rule 115* but, with the

[Worth and dividend paying
pacity."
•

shown seated at a-desk
paper

[ 'Present Rules 115 to 135, inclu¬

•

■

"These and

the limitless num¬

have been made.

day to
produce orders and build satisfied
:/"y yy"'!;1

(y There! [ is

Paso

for

^knowledge? vacauire- all you can
•get—it will help you to sell.
It
:will also help you to keep your
own interest alive in the job you-

about oil

roval ties

in-;

vited to consult with Tellier &

Co.;

arid ascertain the many;attractive!
features of

this

type of

security.]

The firm, has specialised-im offer-'

in the U. S.

—:——

B, & 0. RR. Interesting
A. Strasburger & Co.,

New York Stock
-

fWall

St.,; New York.' City!

have

prenared a rtescriotive aryalvsis of
BsWmore & Ohio Southwestern
Division 5s,

due 1950, containing

interesting' data on this issue.
Conies of the analvsis are" avail¬
able to dealers onlv and mav be
had noon reoup^t from Leroy A.
Strasburger & Co.

■.

Stocks

,of

the

•

Weekly Firm Changed *
The New, York Stork

Exchange!

information

number of

known

among

firm1

[

and the offer to

Affiliated dealers.

by .the
[![• [: [„ >

•

average

was

credit ,©f.

ordinary looking sheet.
simplicity of ap¬

pearance

situa¬

is carried into the con¬
There is no

tent of the bulletin.

complicated
explanation of leverage for the
mystification and befuddlement
of the very person for whom
the principle had to be made
clear—the investor.

most

And the studied

tempting

lay¬

••'.[

Here

pretense.
sions

cover

Although
a

discus¬

the

wide range of - sub¬

jects, the points are clearly made

(Continued

on page

628)

It is to the

Lord, Abbett's

sales

department that this temptation
was

ignored.

Was.

every

driven

Instead, the fact

home

that,

"For

$1,000 you invest, you will

;

have

$2,000-odd- working -for
you."
A; simple diagram, illus¬
r

trated HOW this leverage prin¬

"Re-

ciple

operated

!.. Fund,- y

cas¬

Affiliated

The

in the nearest mail box.

Keystone Corporation has
'change: :\.
'[ " '• '• ualty insurance companies, and shown considerable imagination in
Sherman Hoelscher, member of also
developing sales helps for jthe. dis:a summary- of the present sit¬
tribution ' of Keystone Custodian
the
San
Francisco
Stock Ex-]
uation in Pacific Indemnity Co.,
'Funds.
And yet if this writer
change, fetirrd from bar+nershioi
in Walstnn, Hoffriian & Cobdwinj may be had from Huff* Geyer &• were to hazard a guess as to the
most successful sales idea devel¬
on Aug. 15.
Hecht, Inc.. upon request.
has announced the following

investment

send

is commonly

tion—to build up a

•

wiew," which! contains interesting

understood

the

the Fund

"Aces"

man.

highlights of an attrac*

tive

Perhaps the best-known exam¬
ple of simplicity in selling among
Moreover, the leverage principle investment
companies
is
the
in investment is as old as the field
weekly 'Brevits" of MIT.
The
itself.
Even so, the full signifi¬
very form and make-up of this
cance of leverage is not generally
bulletin are simple. •' It is, in fact,

casualty-surety

Copies

has taken various forms but basi¬

cally it has consisted of the briefly

characteristic

fundamental

cprapariies. offer ^particularly atr

York;, City.

return

Dividend
this card

•

Exchange!

descriptive folder upon rethe
story
of
"leverage" which
lest.
To "request" the folder,
Lord, Abbett have built around the recipient needed only to tear
Affiliated Fund.
Leverage is a off the return card and drop it

re¬

■■

little

mailing

Over the years

shares.

soi great that .the
exceeded 60,000

sketched

Casualty Stocks Look Good

■

Lerov

postcard

of the simple
idea consistently getting results is

—

for

Bullock's

Calvin

SOLU¬

Another example

-■

;

He has

Army.

help was

of this ^ little

success

copies in the first month.

ing royalties to registered dealers tractive possibilities^ according to
' for over 10 years and will gladlyi the- current1 issue; of "News-Re-5
answer any questions /ribout them J
"
\
j view;"1 distributed by Huff, Geyer,
;
& Hecht;" Inc.,' 67: Wall St.; New!

[are doing.";

Which could

the

The

demand

Gordon Foote, of the Bond De¬

by; arit

are

m ore

substitute

sales

pipe lines and then moved west-j ceived his orders and will report
ward by tank cars. %•'.[>■''»![ -y
[[ shortly, for active duty with the
Dealers interested in learning;, Army. Air[• Force. [;'■r<4::

try are being used every
clienteles."

TION !

but what the crude would! has been commissioned a-Lieuten-

concentrated

lems the folder offered

■;

seen .;

pipe line distance to some of the, partment of Francis I. duPont Sc
Texas Gulf ports. There is little! Co., i Wall Street, New York City,

ber of other features of the indus¬

words,; "Higher suitable to
his(particular require^
On
the opposite
wall
sive, have been renumbered as Taxes,"
ments.
■[
'
{.[ [
.y
-v
Rules 116 to 136, inclusive. Minor hung a chart showing a declining
One of. the most .widely-used
and bearing the
changes in references within these zig-zag trend
sales helps in tne entire invest*,
rules and within Rule 350 to cor¬ title,
"Dividend; Income."
TO
.merit
company
field
has
been.
respond
with the; renumbering these two simply-depicted prob¬

the

ca¬
:: doubt

seemed

cover

rough silhouette

a man was

met

isting, the distance to Los Angeles;
is only slightly longer than the:

reading

of invested earnings
such steady and sub¬
stantial "increases
in
intrinsic

•

the

almost bare.

Movement of the oil West will

covdr

that

-•

These

•

depicted on
with such sim¬

exception- noted above, its provi¬

•

pounding

plicity

income.

were

sions have not been changed.

[riyf
' [" mmai'mm ;; " ■ ''l
problem, but this can be
In The Armed Forces
through tank cars, as was a
Ronald E. Bopp, formerly with
greater part of the shortage in the
East.
In fact, distances from the Fullerton & Co.," Inc., 8.East Broad
Basiri [to the Western centers are Street, Columbus, Ohio, has befen
inducted into the U. S. Army.
no greater than those to the East.
It is only a little farther away!
insuranceand
other
business than the Gulf Coast, where
Mark Elworthy, President of
the;
operations, which explains whyt Basin oil has met direct compe¬ Elworthy & Co., Ill Sutter Street,
the insurance business is so fav¬ tition with most of the oil
Francisco, Calif., has been
pro¬ San
orably situated from the stand¬ duced in the Nation.
commissioned a major in the U. S.
";
point of taxation;.why the volume [By
taking
the crude
from Army Specialist Corps. Major El-;
[trend is .constantly upward and Winkler
County ■: to
El
Paso; worthy will be stationed on the
' [.[,["•v:•[
.why this plus the continuous com¬ through pipe line systems now ex-; Pacific Coast. :

•produces

the 'front

Rule

114

dividend

problems

Prospectus

may

be obtained

from authorized

The

dealers,

PARKER CORPORATION

ONE COURT ST.,

BOSTON

THE COMMERCIAL & FINANCIAL CHRONICLE

624

•»

••

bonds

FLORIDA

and

to a, great

reduction

budget

Municipal News & Notes

»war

FLORIDA
Cities

counties

and

financial problem in

all

sec¬

open.

meeting the

*sqeeze" which is developing as a
of

result

declining

and

revenues

such

sues

serious

tions of the nation face

securities

still

rejecting the former

governments emphasizes. ] !

accentuated

difficulties

either

side.

the

municipal

impossible

add

new

the

other

is difficult
additional

taxes

income.

sources

hand, it is exceedingly

difficult to curtail expenses with¬
out

sacrificing what have

come

be regarded not only as desirable,
but essential municipal functions.

The

financial

predicament - of
local governments results in part
1

from the necessity

of establishing
public budgets some time in ad¬
of M actual

vance

Budgets

for

set

1942

expenditures.
in some cases

Summer.

as long ago as last
jMany1 budgets 'were

made

were

"business-as-usual"

basis, not allowing for emergency
expenditoes and the higher costs
which
the

have

developed

part of

effort.

war

constitutionality,

greatly

involves

fundamental,
from

concern

over

add ; to

however,

local

taxes

ability

and

indi¬

inordinate amount of
the

Treasury's

eliminating
At
as

for

proposals

pet

"special

privilege."
times it has appeared almost
though some-of the Treasury's

officials

absorbed

were

ad¬

vancing these tax "reforms" as to
be distracted from devoting their
best abilities to the formulation of
a.

total tax program for war.

Cer¬

tainly the persistent intrusion of
these Treasury favorites into the
has

debate

tax

clouded

cussion and exposed
of the
tees

the members

unfair criticism

the

is to

program.

that^av6ing

having

Administration's

failed tw0

hoped

years

run-

fiscal officials, may be-o

the most serious factor

come

the

ini
,

the

Recommendations

that

State

local

governments build up
for possible postwar lean

and

years

reduce
last

make

existing

week

debt

made

was

3.6% and

Federal

Government

for

military

tion of

uses, lower assessments on inven¬

are:

un¬

crease

replenish their stocks and
declining value, leading ulti¬
mately to lower assessments of
properties related to automobile

crease

businesses

smaller

able to
a

tax yields.

excess

(1)

reduce

taxes,

public

aids,

debt,

reserves

and

for the

in¬

(2)

expenditures,
State

These

(3)

(4)

(5)

in-,

build

future.

.pose new. forms of taxes in.view
of the essential demands of the
Federal Government for revenues.
One fiscal official reports that his

city has given

some

utility fax, but

.reluctant

City officials

against
iess

higher

the

expenditures
effort

war-

•

local

that

agree

cap¬

jiacj

the

fact

that

the

State

jarge Cash surplus, and con¬
cluded that grants should be based
on

need, and that the State should
its own financial house in

put

order

before

should

and the desire to have projects
available
for
the
post-war

revenues

The

aiding localities.

organization said

yields

built

might

reserves

because

tax

fall

sharply when
needed, because
funds for construction, repair and
period.7/Y -TY'/ ■■ ,--f •
y •"*
'-J •->- A i'Ctl 'V'i '.■/
The inability to receive mate- possibly relief purposes might be
were

rial

ordered

has

created

appropriations in
;i

surplus

localities.

some
.

Likewise, decisions to abandon,

bl*c.,improYe™ente' not

__es-

reQuired after the war, and beS?use 11 waa less
Government

basis.

should

ef.Yl L,
Yie Tar Y These ®ase I taxes
budget strains. YW
me

situ-ijWar

ations,.however
"nnrnrv
>porary

appear to be tem-

offspts to othor lnrrpnspH
offsets
to other increased

expense items, and do not funda¬
mentally improve the picture.

Municmql Tax

Proposal

Hangs Fire
The Senate Finance

act on

but

1he doors

already
a

bonds.
set

Stp+e

This
un

and

followed

the

built

cash

reserves

up,

iffhi?
4

■

It recommended
so

' V

abandonment

curtailment of

that governments

Would

has

closed

—

stments Show Increase

Admin-,

New York' State's
funds totaled $323,017

recommen-

30,
V.

the

enabled

city to

the

statement

sent

Hoi'ce

Committee.

prpce-

Ways

$194,014,400

State

fiscal

Comp-

O'Learv

holding

York City bonds.

The total

However, I pared to $310,259,134
question of taxing future is- viously.

phosphorous

constitutional

taled

limitation

re-

and

for

which

year

pre-

aluminum

to¬

from

addition,

appropriations

the

capital budget for 1942.

Many

the

old:

•

factory

Eastern

coal

plants.

trains

land

drop

scores

Seattle

look-see at what's

Phila. Bond

be Y incurred.

may

1, 1941, which was $111,960,891.v The gain was made in
of a drop of $10,693,101 in
city's general borrowing mar¬
gin due to a reduction in average
the

assessed

from

valuation

$16,544,218,086

287,075.

real

estate

$16,437,-

f-»e

redemption

the

into

serial

circles

controversy

Antonio

and

the

Authority, a
project,
as
to

court

Several,

Authority
in-

tween American

took

weeks

the city

attempt to halt

consummation

contract

be¬

Light and Trac¬

tion officials and the citv for
chase of the

pur¬

utility by the latter.

Ohio Record

•YyY;/ fk ■:<

Surplus Forecast
Despite losses in
rived

from

the

revenues

de¬

sales tax

and

the gasoline tax, William S. Evatt,
Ohio Tax Commissioner, ventures'

which

the

six

1942-1947, turned in
$83,389,200 worth of bonds for ex¬
change. On this amount the aver¬

witness

age rate

trast to the general belief held by
Governor Bricker and other State

years,

of interest

surplus of $23,000,000 in

record.

This prediction is in

4.2227%,

was

prediction that' the State will

1942—the best

annual amounts of inter¬

sharp

con¬

$3,525,207,... Y;;Y-Y'';Y
'YY officials early this year that the
revenue decline would be so great
new bonds offered for
the old ones, however, the aver¬
the $13,000,000 surplus on hand at
y

On the
rate

interest

the

3.085%,

and represents an annual reduc¬

quired

tion

operations

$952,917

in the amount

bonds

new

rates

1941

offered

were

State

re^-

normal

government

Y:'\

Major Sales Scheduled

they would bear the

interest

for

(4 to 4V2%)

We list

herewith the

im¬

until the first call dates of the old

portant municipal offerings ($500,r

bonds

000

Nov.

and

.lower

rate

(2V4

to
;

over—short term issues

cluded),

County Told It

the

which

future.

near

successful

his

1942

budget
; /

ex¬

are/toY come

The

names

bidder

and

the

runner-up for. the last previous
issue sold are also .appended. . 7 \

Russell

J Ed. Note—Very few municipal
bond,

issues

scheduled

for

major

award

size

are

the

near

future,; With//expenditures
for
local improvements held to bare
necessities
war-time

,by

the

demands

policies,^ the

;

prospect

naturally is that for some, time to
come the, ;amount of new issues

mes¬
;

the county to the coming to market will be small.)
$4,248,000 fall due this Y: '" Y/ "•
August 24 Y <
year.
The County Executive had
$33,950,000 San Antonio, Texas
1
purposed to issue $2,538,000 in This is an
offering of electric light and
Bonds

■

would

cushion

during 1942 and 1943.

interest.

amount of

new.

and

bonds to meet the obligation

make up

power c^iaht'

the. rest out of. in-, bo^ds; .fo-.be

Reduction

come.

county

penditures^

however,

would make

it necessary

only $1,538,000 in

ex¬

ested

to issue

bonds

new

No similar.sale has been nego¬
tiated
bv the citv and this offering may
attract-different bidders than those inter¬

said,

the

Sprague,

debt

county

being refunded at

lower

interest rate and Lehman Broth¬
ers,

the

company

handling

the

project, renorted that $4,346,000
of

the

old

which

bonds

already

ind5eatod.

s^d,

the

"Constant

curtailment

expenditures," said Mr.

September 1
<

•'

(State of)

This

certificate offering, maturing in 194S
1954, is included here because of general

render

interest.

certificates
Vfe

Co.

last

New

State

awarded

February

long-term

Clnrk.

York,"whoie bid

Dod^e

tonoed

tire

joint offer of H^rrlman Riolev A Co., Inc.,
and the First Boston
Corporation.
'

had

new ones,

credit of Nassau- County.

ernmental

obligations. v/

general

$485,000 Maryland

In addition, said Mr.

was

for

this purpose.

$5,660,000

and- gas- distribution- systems

used in the ..apauisftion of such

properties!

•

September 22

•

$500,000 Honolulu. Hawaii
In

June,

ey/arded
Sen

sinki^o-

public

Blanco

power

ago

issues

•

inT

was

York

properties.

pany

15, will result in
saving
of

bonds

conformity

banking
a

San

Federal

interest

different

sys-

scheduled^

would have become callable in the

sonnd

borrowing

accretions

funds,

eventual

the;

which had the right to acquire the
San Antonia Public Service Comr

quick

Refunding

boon turned in for the

Mr. McGoldrick attributed the
gain

for

happening.

New

and

Guadalupe

the

Traction

sentence'/ pro-Y
Public
Utility ,

the

between

the

planes and
more in Port¬

sage to the board.

amounted to $153,050,-!

exempt.. debt

•

area—have

large

and

The formal call for bids

Daily,

and

financing-

subsidiary

allowing for these reser¬
city's debt margin as

July 1

terpreted

Sprague,
Nassau
County Executive, announced re¬
cently at the meeting of the
County Board of Supervisors that
Nassau County's net debt of about
$53,000,000 would be reduced this
year by $2,710,000 instead of the
$1,710,000 he had promised last

vations the
of

exceed

Holding Company Act.

source

men—from

field

rushed up annexes as

revised

Can Further Reduce Debt

$39,062,237

for remainders

1972,

unit of the United!

"death

bringing to

Nassau

contract

has been reserved

this

dissolved

in the

other liabilities have been reg¬

istered.

has

■!,://./ i'-'fY'Y ;yY/Y

uses.

3V4) thereafter.

the

was

to/be

utility

old

$1,433,604,293, leaving a margin of $210,124,414. ' Of this amount, $18,011,638 4 has been set aside "for
balances of specific authorizations
approved by the Board of Esti¬
mate

be used

can

electrical empire far re¬

The

to
The total indebtedness

the report.

New
com-

and

the basis that

$1,643,728,707, according

within that limitation

not

This system is

visions

$155,000,000 by Dec/31, due to
accretions to sinking funds, and
will be expanded to $421,000,000
by Dec. 31, 1948.
The city's general debt-incur¬
on

1944 to

Light

power—coal—and it's drawing at¬

10%

; tem.

killers,

age

margin of bor¬

July 1, based

and

for the acquisition

tention to the Northwest.

Budget Director Kenneth
Y. 7 /Y/Y Y' v/Y ■!,.//■?: ■

power on

$33,Y

est

Estimate, the City Coun¬
City Planning Commis¬

clared, probably will be increased

ring

power

Light and Power,Company

switch to peace-time

with the

and the

the

issue

Company,

in fertilizers, chlorates in weed

late, as of July 1, 1942, a free
margin of $153,050,539 in borrow¬

;

The Bureau said that holders of

accumu¬

spite

invested

municipal, ported early this week, including
the

work:1

July
t

American

$18,082,424, according to the Bu¬
of Municipal Research.

new

This margin, Mr. McGoldrick said,
in good position to face the
time when tax receipts decline/ '!' represented a gain of $41,089,648
over
the unreserved margin on

Company,

can

N. Y. State Fund

the

chance to go on

Philadelphia's '/ voluntary
ad¬
refunding of callable bonds,
which began in June,
1941, and

capital4 projects/coupled with a
general policy of1 strict ecdnomy,
has

current

centers,

reau

San Antonio,
Friday a call

of the physical properties of the/
San
Antonio
Public
Service {

vance

;

. 539, representing the free margin
»
against
which ; additional
non-

ended last June

Virtual

July

will be used

$6,000,000 in bonds of various

City Debt Margin
Is $153,050,539

electric

Proceeds

empire,

many

Seen Excellent Move

After

that

because taxpayers might be
•

debt,

that

could be reduced after the

year-end June
income fromi^ro^er
Joseph

maior

datiop—taxation

outstandrntf

also

projects

added

hard hit at that

Committee

number of

isiration proposals when it meets

again,

to flnan(A

But, unlike

New York State towns, $8,160,614
in
village securities, and ■ more

N. Y.

serially

produc¬

war

home

holds

production

It's

rowing power, the Comptroller de¬

in-

for

hilt

plants

nearly

This unreserved

the

$4,600,000 of
Federal Y Government
bonds; as
compared with $800,000 a year
ago.
Other large investments in¬
clude $22,702,398 in FHA mort¬
gages,
$46,052,726
in bonds of

State

sion and

un-

industrial

new

moved-

$50,000,000
sinking funds
than $89,000,000, .</'■

phosphorous rate of interest
/ j />;
3%«>.r

The plants are the birth of

thousand

canal-debt

Dayton.

general policy but also because
of inability to obtain materials

the

,/Y

the /invested

The Comptroller also is

totaling

the

and

Bids will be opened next Monday.
Bidders are asked to name the

Except for the shipyards, the

the

year ago.

explosives

•

officials

■

bids

950,000

chlorates

full speed in peace.

than

par.

City

materials

and

incendiary bombs.

Northwest has

custodian of highway-debt sinking

cil,

created

Arguments

emereencv

baseci

the

increase

ital expenditures should be cur¬
tailed not only as a matter of

pnd

portfolio

vital

out

carbides

war

State Employees'
System, /of / whose
funds $167,650,914 was
invested,
as
compared with $151,510,967 a

Board of

tendencies and recommended

pouring

tion.

total market value

inflationary

light and gas distributing system
bonds dated Aug. 1, 1942, and due

Retirement;

considerationJcSash^ StatY^dT^id?YSe
extremely,

tax burden.

dent

entire

source

money

may

yield of

investments

Chief

week

Listing
arguments'
for
and
against adoption, of each proposal,
-.. At the same time, reports from,
the
organization
decided
that
fiscal officers make it clear that
higher state and local expendilocal governments are loath to lmtures
wouid
create

new

ings

entire

ing power, Comptroller Joseph D.
McGoldrick
reported early this

reduce

last

average

Y Y

for

au¬

O'Leary

$30,000,000 above

Now

gov-

usage.

»•

San Antonio To Buy

Texas, issued

States

Mr.

investment."

returned

•

cities outside New York City.

The organization

of Wisconsin State and local

tories

its

than

by the Wisconsin Tax¬

Alliance.

payers

effort

every

ernments had raised the question
been pointed out by the National of what to do with increased tax
Association of Assessing Officers. yields.
Five concrete suggestions, it;
Among the factors in this situa¬
tion are taking over land by the
said, had been made for utiliza¬

State's

The

Building Urged

the

show

year

short time back
swamps, cow pas¬
tures and apple orchards.
Today
there are acres of concrete build¬

for

expectation that the

of local governments, will decline
within the
next'two
years
has

estimated

funds

prop-'said that glowing reports about
tax, the backbone of revenues the improved financial condition

The

erty

tax picture.

3.25%.

and

some

bonds

yield

particular suggestions the Treas¬
ury will shelve them.
•;
,

United

Treasury

nine to obtain acceptance of these

Post-War Reserve Fund

and

secured

after

Light Plant

ties, issues of various State

rates

year

Detroits, Pittsburghs. and
Birminghams, out of what was but a

for

in the last year, princi¬
pally in New York City securi¬

thorities

recently

county

that the buyers of Nassau County
securities consider them a sound

rushing production of metal alloys
for ships and tanks, filling huge

Nearly $33,000,000 has been in¬

dis¬

Congressional tax commit¬

"wrecked"
tax

that

the

for thousands of airplanes a year,

ILLINOIS

vested

^-•»/.• YY creased interest

Forming
Industrial Empire

orders

time/energy

and debate has been consumed by

reserves

Government.

The latter factor, in the opinion,
of

Company

WV_^S/CHICACO
*

Federal

regarding

Both this year and last year an

face of the heavy demands made

the

inquiry

any

glad

obligation.

RECrummer

financial

the

Y Y,c

embryo

these

problems of local government.

viduals to pay local taxes in the

with

will

is the general outlook for lower
V. revenues

answer

comprehensive

familiarity

bonds.

1ST NAT BANK IIDC.

outgo

raise

from present

them

question of good faith and would

emergency/

Pacific Northwest

income

In most cases, it

revenue

gives

background

making the requisite adjustments

issues

the Congressional tax fram-

to serious questions

and
careful ^ planning
constantly
improved
the
county's financial - position,
De¬

from the Pacific Northwest
report
the rapid
formation of

have shown good judgment.

open

Sprague,
have

capital

lonf experience in handling Flori¬

ers

extent to

city's

because of the

New

ure

sues

The seriousness of the problem

meas¬

The plan to tax outstanding is¬

local

the

program

MUNICIPAL BONDS
Our

of the first few months of

Observers
■

rising costs, study of the effects
war

Thursday/August 20, 1942

1941,
an

above

fit,'*

and

•

-1

•

county

issue ^.o Dean Witter.^ Co. of

Francisco.

bondi

the

The

oth"'- bi'1

'""bmitted

Hawaii, Honolulu.

•

by
,

the
■

fer

th.e

Bank

Volume 156

Number :4100

THE COMMERCIAL

Text Of Statement Made

appropriate,"
etc.,
but
even
assuming that this language does

By Frank Dunne
In SEC Hearing On Minimum Capital
Proposal

create

dent of

the

New

Security Dealers Association, at the hearing
conducted by the Securities and
Exchange Commission at Philadel¬
phia, on Aug. 13, on the proposed minimum capital by-law to the
My name is Frank Dunne, of
Street, New York, Broker-Dealer*

Dunne

Let

take

securities.;

the

New

President

York

Security

Dealers

and

Association formed in 1926 which

in the country. I am also
ber
of
the
New
York

Committee of the
ciation
I

that I

the

mem¬

Asso¬

Dealers, Inc.

make

clear

before

appear

you

state

the

its,,
of

fore

that

perience I

here concerned with is the

that

minimum

spon¬

capital

might

to find

strange to some
here today to plead for

disapproval of the amend¬
ment to Article I, Section 1 of the

Com¬

ex¬

qualified to testify

intended

one

that

either

lective membership requirements.
On the contrary, such associations
were to be
completely democratic

seem

your

result

and

all-inclusive

Broker-Dealers
counter

registered

the

Over-the-

business.

That objective
not be achieved if you
permit

By-Laws of the National Associa¬

can

tion

the NASD to make wealth, rather
than honesty and

which

Securities

sets

capital re¬
a
requisite
for
that Association,

membership

the- New

Inc.

minimum

quirements
because

Dealers,

York

Security

Dealers Association had such

quirement

for

membership.
records

who

admission

And further

show,

and

a re¬

its

the

some

you

then present will
recall,
meeting held by the
Commission
in
Washington
in
at

were

the

first

integrity the
quisite for membership.
"
Under
Section 15
A
(b),

sion

that

broker

this

paragraph

duals
or

the

country

cuss,
was

invited to

were

dis¬

the proposed Maloney Act, 1
the only one of all those pres¬

broker

membership

any

contemplated legislation.. In mak¬
ing such a request, I was follow¬
ing out the instructions given me
by my Board of Governors.
At that

time I

business

But

chance

for

that
talk

at the

new

appearing

believed

allowed

was

public.
long as I

there

get

was

point

ex¬

Paragraph (4)
As you know,
to

indivi¬

exchanges,

whose registrations have been de¬
nied or revoked, and so forth.
It would thus appear that
any

quisite

membership

that

as are

relates

ities associations

afoul

for

provide

who have been suspended
expelled from registered secur¬

ent who asked that minimum cap¬
ital requirements be made a re¬

associations to be set up under the

dealer may become

cluded pursuant to
of Section 15 A (b).

December of 1937 to which repre¬

industry,from various parts of

rules

member, except such

sentatives of the Over-the-Counter

its

dealer who has not

the

law

run

entitled

in¬

affiliate'
have

were

Association

ship.':-bjsf^rr:
I

provide for
that

could

minimum

ments

out

•'

this

relate
the

capital require¬
requisite for member' "

incident

bring

Justice Douglas

;and the others who originated this

legislation, known
Act,

this- Association

make

the Maloney

definitely had in mind

very

that

shouldV not

capital - requirements:

quisite for membership.

;a re-^

"The, broad,
paragraph is to

■v.

all

this

sure

that

purpose

make

would be

set

SEC

under

supervision for self-regulation in
this

business

shall

and

attune

conditions,
visions

for

itself

discontinued
minimum

the

or¬

new

its

pro¬

capital

re¬

Commission

quo¬

tation and uniform practice, func¬

turning

the

be "necessary

for the protection of investors

and to carry out the principles of
the

Section

new

these

over

nasd.-

the

that

the

designed to encompass
groups in the securities busi¬
ness, without regard to their geo¬
graphical location or the type of
business

done

by them,, the

only

logical

conclusion I can reach is
that all responsible Broker-Deal¬
ers

are
eligible for membership.
Under Section 15 A (b)
7, it is
provided in part, that in order to

registered,

the

association

must

unfair

permit

between

rules

not be

brokers

designed

discrimination

dealers. Cer¬

tainly the effect of the

rule

new

would be

discriminatory when

consider

that

deal

with

same

the

members

any

cept at the

not

may

non-member, ex¬
price, with the

commissions

fees and

terms and

same

conditions

on
as

accorded to the general
public.

are

Inability

trade:

places

because

the

15 A.

Thus,

such

as '

those

pro¬

excluded

minimum

capital

from

ers.

designated geographi¬

some

to brokers and deal¬

transacting

sively, in,

curities,

and dealers

business

particular, class of

that

such

priate

that

above

possibly

other

basis

Commission

anyone

with

eligible

the

language

specific
as

for

and

appears

clear
mem¬

"or

intended

of minimum

capital requirements
is sound, if it is
pecessary for the
protection ,of investors, then such

requirements
all

upon

shquld

dealers

imposed

whether

not

they belong to an Association.
If
such requirements are
desirable,
they should be adopted by this
Commission which has the

neces¬

and not, by the NASD
which, does not.
*
This
Commission's power
to

financial

The

responsibility

make-up

purpose.

the

NASD

large

houses whose objective may be to
secure

permanently their hold

several

hundred

small

-followed

could

pious fraud.

voted in favor of the proposal be¬
cause

they believed it

favor.

The small houses in many
simply did not dare to vote

against it for fear of reprisals.
The background of subtle in¬
was so
threatening that
few of the firms which wrote
open letters on the subject to the
"Commercial & Financial Chroni¬

cle" permitted the "Chronicle" to
publish their names.
Some even

went

far

even

stipulate

that

the States in which

they

located should

two

parts,

blanket
of

all

from

the

printed

matter

emanated ' from ' the

that

the

appear

proposed

which

Association

minimums

$5,000 and $2,500, respectively,
just

first

nothing

for

per¬

designed to signify
or
disapproval

one

and

minimum

true

prisals.

approval

the

amendments,

tion

vote.

were

step in the de¬

requirements

lished, / there
assume

not

the

not

no place was it
spe¬
called to the attention of

members

capital

if
no

impose
estab¬

now

reason

that

the

requirement

favor

dare not to vote.

big fellows

'•

now

decide

competi¬

come

the

gist of

broad significance to the
being of the corporation. For
routine business, it is
commonly
required that only a quorum be

present in which

majority

by the Associa¬

amendment Article I, Section 1 of
its

quite

the wishes

present

case

sale

use

the phrase "in

convinced,

shall

large part of
or

similar

quorum

deemed

a corporation's assets,
matters, a majority of
is
practically never

sufficient.

such

questions

special

holders of

importance the
large portion of the

number

outstanding

se¬

curities must be lined up in favor
of the proposal,
usually 75% or
.

clear

seems

procedure

should

followed by the

respect to
view

its

membership.
such

amendment

Section

significance
,

the

procedure,

adopted

was

Association
which

the 1,939,

this

1,197,

45% of the to¬
■

"against."

The result of the

that

means

the

amendment

adopted by 45% of the

were

mem¬

Those who did not vote

certainly not in favor of the

against

it,

then

should

add

those who voted

the

Bv-Laws, it is

I must

fort

made

tion

inclusive

ness

than it is

be in

;

see

the

make

re¬

ef-

Associathe

busi¬

That would

now.

keeping with the philosophy
Act, and the

of the framers of the

founders
5

When

of
we

the

NASD.

organized the NASD

assumed a responsibilitv to the
public and the industry—that re¬
we

sponsibility still exists
greater

decree.

shirk it.

even

should

thought

bv;

not

some

that the enforcement of minimum

capital

requirements

will

elimi¬

nate

tjie so-called "fringe"- and!
thereby reduce complaints and at¬
tendant

them.

complaints,

of District Nm

New

expenses

,.That in

handling

opinion js

As to the matter

wrong concept.
of

sneak

can

only

13. which includes

Jersey, Connecticut and New

York, where the number of

com¬

plaints to date is about evenly di¬
vided
than

between

tfiose having less

$5,000 in capital and others.

Rather than do anything to re¬
duce

that

our
we

membership, I advocate

make

effort to attract

-all- Over-the-Counter

join with
tive

the

under

the

ness.

en,

V "We

should

our

is,

busi¬

everything

and strength¬

preserve

7) strongly
to

effec¬

Maloney Act—that

that privilege.

the

houses
more

great privilege given

the

possible to
en

to make

self-regulation

against it.

We would rather

gret.
1

sion

voted

•

opinion that it
of disintegration
Association which all? re-

the

actually

would

putable Broker-Dealers would

again point out that about 28% of

membership

cause

amendment -and the other

would have been defeated.

total

conclusion

atmosphere

expression

say that if the NASD is permitted
to
adopt this amendment to its

members of

,73%; voted.

The

membership, voted "for" and

vote
was

had'$$31

1,939,

contract'1 with

desirable

that'a; simi¬
have, been

Association, with

Article I.

their number to

used

By-Laws.

case

of those

In the

tic

forcing the adoption of the

secret ballot

a
an

free

their views.

be-

ticular

amendment.

method

argument namely the undemocra¬

tion in

membership using
doing so in

and

favorable

will be the

A'rV\i bership.

I believe that Article I, Sec¬
1 should npt be adopted un¬

tion

governing voting by holders
corporate
securities,
which
voting on rputine matters,
voting on questions of par¬

under

pressure,

less voted upon
affirmatively by a
substantial majority of- the total

tutes

tween

:■

evem

upon
approval by a
majority of the mem¬
bership'as is required by the sta¬

738

.some

it.

only

distinction

seriously

;■V;;Y

amendment, the con¬
inescapable • that the
majority definitely does not favor

substantial

clear

They

ballot and fear of reprisals,
45%
of
the' membership

clusion

having particular significance
to the membership. I therefore
maintain
that
an-1 important
change such as this should be

the

are

circumstances

only

falls into the classification of mat¬

make

who

the

proposal
in fact opposed to it but did

even

open

ters

Remembering that

the other amendments is of funda¬
mental importance
and as such

made

members

patronage they
dependent.

amendment

many of them

raised

time to time

to my atten¬

come

some

and

minimum

from the NASD.

tal

from

failure

them by those on whose good will

was

that the requirements will

eliminate

tors*

are

requirement

The

feared that if they failed to vote
that also would be held against

ments and in

cified

It has

that

voted

and the
providing separate spaces
for approval or
disapproval of the
individual
amendments.
Equal
weight was given to all amend¬
•

Consequently, the minority of the' membership.

Association's 1. power
such

disclosed.

Surely in such an atmosphere a
poll would have been the

secret

second

lar

would

of minor importance, even many members to vote>
against the
the form of the ballot was
de-v proposal in line with their real
signed to
confuse
rather
than views is only a part of the distor¬
clarify. The ballot was divided in tion caused by the menace of re¬

Counter

haps

more.:

field.

in their

was

very

requiring

.Although

officially,

The large houses with
exceptions
automatically

were

that many who

have been.
few

not

but

the

I may even

timidation

by the
Association and,
consequently, any
claim that democratic
procedure
was

which

privately against it.
As I
have already pointed out, this was
not a secret ballot as it should

cases

used

was

go further and say

signed

ballot

for this

reason

approve the amendment

that the election of Governors and
District Committeemen shall be
by secret ballot.
However, the

dealers.
Perhaps they see
change .as a tightening of
their grip on the entire Qver-the-

this

forcing .the adoption" advisedlv. I

provisions

The

were

I wish to emphasize that the
provision for minimum capital re¬
quirements, unlike the subjects of

will all agree that it

never

appro¬

necessary

and* rights

conducted.

was

portunity to make a living.
:v :\:
My suggestion is that if the idea

disadvantage. I

the

Article

vote

voted for the

sure

was

distinct

whenever the

only

quotation

cause

dealers

the

Congress wished all

and

bership,

the

to doubt that

se¬

/' A'
to

could

be eligible for reg¬

may

seems

portion

exclu¬

views.

ask

atmosphere

amendment would be tantamount
to the expulsion of

considered

brokers

expression of

the

to discrimi¬
nate against certain Broker-Deal¬
ers
and deprive them of an
op¬

rule

sired direction.

the

amendment.
is

the

limited

true

will

you

so, why I suggest that those
who did not vote were against the

greater fundamental im¬
portance to them than any of the
others, as the adoption of this

association, membership.in which

records

tions.

appears

appropriate in the public interest
or

quirements and decided to become

sequently it discontinued its

consider

was

all

total

purely

trade association.- Sub¬

NASD

rights under the Act.:

destruction

brokers

of their

ers

relating to the type of busi¬

basis

ing should be secret or not.
In
this, would jt not have
been logical to follow other
vot¬
ing procedure under the By-Laws

govern.

such other specific and appro¬

view of

done

priate

business

secret'ballot

matter, is tantamount to depriving
those less fortunate Broker-Deal¬

the amendment of Article I, Sec¬

security

By-Laws of NASD relating

tion 1. It is thought that the Asso¬
ciation
is
dominated
by

members,

the

to amendments to the
By-Laws,
does not specify whether the
vot¬

by- their

bring about such
which, as a practical

condition

the whole industry, and that these
interests hope to benefit from the

basis
ness

good

this

be permitted to

for

ever,

Association's

member's

association.

eligible

some

the

make

of the

group should

Now

fully

proposal is

the

con¬

responsible

industry, the New York Se-. istration."

curity Dealers Association, in
der

honest

this

for the distrust felt by

such vote be

management has aroused in the
minds of many a suspicion of what
may well be the real purpose of

brokers and dealers who

duct

this

proposal of this nature absolutely
imperative, were it intended that

well

When.it cal'region

became, apparent that an associa¬
tion

would

tainly sufficient for this

dealers

and

(b) 3:-.

fact

matter.
The great
good or evil which the
large houses wield over the small

brokers and dealers under Section
15 (c) (3) of the 1934 Act is cer¬

to Section 15 A

faith

the

Congress, for the House
Report, No. 2307, 75th
Congress, Third Session, says as

fact that

organize

power for

tention of

by their rules, restrict mem¬
bership therein, on such specific
geographical basis such specific

if the Bill

capital to

ballot

reason

many

Committee

Particular associations may, how¬

The Justice then asked me
thought the New York Se¬
curity Dealers would be satisfied

the

one

particular

prescribe rules and regulations to
provide safeguards with respect to

have been the

seems

conferred with

capital employed in his business.
This

then Chairman of the Commission

from

can

sary power,

membership

•right.

capital

association,
notwithstanding the fact that he
may have a very small amount of
an

over.
After I had prolonged the
hearing for some time by advocat¬
ing
minimum
capital
require¬
ments, Justice Douglas, who was

Judge Healy at his

lack

fessional

association may not be registered
unless it appears to the Commis¬

re¬

„

any

excluded

When

attend

of the

the NASD or any other national
association that might be organ¬
ized in the future, should have se¬

re¬

quirements by the NASD, and the
circumstances
surrounding
the
vote on this proposal taken
by the
Association.
'
.

privilege to

conferences

drew up the ByLaws of the NASP. rI feel there¬

"minimum capital requirements
security dealers.,' What I am
of

It is therefore

having less
clearing
$5,000 net cap¬

net

that

separate association under the Act
as is their
right. No

public, institution.

for

sorship

Asso¬

committee that

mer¬

do 1 oppose the principle

nor

it.

dealers

$2,500

explain,

was
rejected by the
majority membership. The method
used by the NASD in the
handling

whether

tion. h It would not be
practical
for the Broker-Dealers who would
be expelled from NASD because

look

the drafting of. the Maloney Act,
I was a member of the
drafting

outset that

I do not intend to discuss the

mission and representatives of the
securities business leading up to

express

views, and I appreciate that
privilege.' tV- ''r, *v: ?
Let

moment

Broad

the National

over

was

various

;

Its

practically

York

Association.
to

what

see

pervision

representing here only
Security Dealers
I deem it a
privilege

New

Company,

Dealers, Inc.
origin is found in the Se¬
curities Exchange Act of
1934, as
amended.
It is chartered, if
you
will, by the < Securities & Ex¬
change Commission, which has a
large measure of control and su¬
is.

District

National

of Securities

should

ciation of Securities

makes it the oldest trade associa¬
tion of over-the-counter
dealers

•.

soon

025

amendment

registered association, it seems to
me; clear
that they are eligible
for membership in some associa¬

•

and

through others, or
ital, clearing for themselves,

York

rules and regulations of the NASD;

doubt

some

brokers
than

We give herewith in full statement made by Frank
Dunne, Presi¬

& FINANCIAL CHRONICLE

Because of that

reasons

disapprove
amendment

I have

giv¬

the Commis¬

urge

the
for

capital requirements.

adoption
minimum

„

THE COMMERCIAL

626

& FINANCIAL

Thursday, August 20, 1942

CHRONICLE

Appropriations

Public Interest Held

Total $205 Billions
activity

that the stag¬

snows

gering sum of $205,514,657,286 had
been appropriated or authorized
between July 1, 1940, to June 30,

ciple of auction trading.

The function of the negotiator

to Asso¬
Washington advices

according

needs,
Press

ciated

ket.

and "normal"

this

appropriations voted

prepared by the
of the Budget and were
were

year,

Bureau

placed in the "Congressional Rec¬
ord" by Senator Glass (D., Va.)and Representative Cannon
(D.,

Mo.), Chairman of the Senate and
Appropriations Committee.

House

advices

Press

Associated

The
went

to say:

the

"Of

$139,770,114,641 appro¬
during this session, Mr.
Cannon pointed out that approxi¬
mately $133,370,000,000 was ear¬
■

priated

for

marked

purposes

war

while

$6,400,000,000 was tagged for ordi¬
expenses.

nary

Glass, in his analysis, de¬
Congress
had
reduced

"Mr.

clared

appropriations for normal activi¬
$1,667,005,150.89
below last year's figures,
and made increases in that cate¬

ties of Government by

of $579,872,154, leaving a net

gory
cut

$1,087,132,996.71.

citing the three-year

"In

$205,-

public interest.:

4'-444,44- 444!

?
;

Established corporate history.

;
v

-*.-4::

Periodic publishing of full

financial statements. . ,:/-W;y4;-'4'.
other information.
>

■

dealer

market.

the ratio of issues
market" characteristics is limited by fact and
above,

stated

actual

figures
for war

telephones, sales

service, efficient and

7,639,316
63,056,814

Department of Commerce
Interior Department
Tennessee

Veterans
State

Valley Authority-.—
Administration

gressing already

■

—

Department

Treasury Department

Mr,

"Simultaneously,

9,838,490
4,554,840
31,606,595

Cannon

pub¬
was

$72,422,000,000, and estimated that
it would reach $125,443,000,000 by
date

next year."

Chicago Home Loan Bank
Advances Up In July
Advances by

Bank

Loan

$697,074
second

past

in
most

the Federal Home
Chicago totaled

July,

making it the
July in the

active

five years in

to the Illinois and

disbursements
Wisconsin sav¬

building and loan associa¬
tions,
the bank announced on
Aug. 10. A. R. Gardner, President
of the bank, said that there was
the usual seasonal fall off in the
associations'
demand
for bank
funds between June and July, and
that
repayments on loans out¬
standing, usually heavy in July,
reached a new high last month.
This is in line with a trend which
has been noted ever since spring
and is a consistent anti-inflation¬
ings,

ary

influence, he indicated.

The

60,700,000

reported that the total gross
lic debt on June 30,
1942,

that

fee.

If the

the
ber

upward of half its membership, a goodly num¬
will not be able to qualify, and a larger number will withdraw
If the

new

sudden death for the

•

seems

$25. In addition, he pays Federal and State
particular instance, the dealer's statistician

taxes on the sale. In this
had ordered a special re¬

the result will be
-yy

that the burden of

y-yyy-;y,'*

y-4y;''

An anonymous

letter addressed by

y^y y-

•

.,.-'4

■>
of a

''t!-

^ -;\-;,y

'4y

submitting to you the proposed ruling
Securities and Exchange Commission and an editorial in thfe

Allow
of the

DEALER No. 11

dealer furnishes us with the following vcopy
him to his Senator:

My dear Senator:
me

the privilege of

"COMMERCIAL and FINANCIAL

CHRONICLE," pointing out the

un-American features of this ruling. I believe that you
would do a service to the country if this proposed rule was read in

distinctly
the open

Senate and excerpts of the enclosed
most discouraging to
be requested

the

sale

that is endeavoring to destroy

the

Secretary

We believe that the

assist in
govern¬

bond business has already performed a very

sale of Government
Government cost
other agencies of the same

achievement in the

and

noteworthy

bonds so

far.

We do this willingly to finance

but we regret that there are
that are taking

our

advantage of this fraternity.

courtesy in this matter and trusting that
have the pleasure of receiving your comments, I remain—

Appreciating

may

your

W-J

4
of

the entire bond business.

patriotic

bonds,

war

Government

editorial mentioned.

members of the investment industry to
without being waylaid by another

urging

Treasury,

in this war,

profit.

have bought the

margin becomes effective,
whole securities business.

regulations and restrictions,
imposed by the SEC has up to now meant slow death for the Invests
ment Banking business.
This policy of our Government has been
difficult for me to fathom, unless the aim is to liquidate the business.
If this is not the intention, it is nevertheless the result, y <44>4:4y
I hope there will be a change of heart and easement shown by
your Bureau as I for one have been engaged in the business for ove^
30 years, have always done an honorable business, have had no com-,
plaints, have made a decent living, but cannot afford to retire
as yet.
y
44. '
/ j.-> ; 44: r. -'4,.':Y •
Why shouldn't merchants in Stocks and Bonds be allowed to
operate along the same general principals as merchants in other lines
of goods?
y: • yy'"
4 -yy".. ■- •';•:y y :*
f ■ ;y.;•*':
It

By comparison with a commission chart, he finds
stock through Members & Co. for a com¬
mission charge of $17.50, whereupon he decides to do no more busi¬
ness with the salesman or the house that interested him in the invest¬
ment. Now, out of the $50 gross profit, the dealer pays the salesman

he could

profit

their

disclose

ment agency

the

resentment and disapproval.
1 ■;'4.444 .vyyyyyy: 444,44
proposed regulation of the SEC requiring dealers to

to show their

proposal of Rule X-15CL-10 to publish an "inside" quotation
is in itself no true indication of the cost of the secur¬

dealer $50

■

and

become operative,

proposed regulations of the NASD

new

distributing dealer. Example: The "Street market" in
XYZ stock is 19y2 bid, 20 asked. A salesman sells 100 shares of XYZ
stock to a customer at 20*4. The customer, receiving with his con¬
firmation, a quotation of 191/4-20 calculates that he has paid the
to

of
and

NASD will lose

to the customer

ity

the

clearly-defined laws, he becomes subject to criminal
4. "Chief cuts in 'normal' appro¬ prosecution and thereby eliminates himself.
priations, as listed by Mr. Glass,
Because of the very nature of his business and the manner in
included:
,.y>4. /,V4-i4,i
4'4, which it is organized, he cannot exist on gross profits comparable to
Executive office of President
; $34,743,760
stock exchange commissions. There is little similarity in the organi¬
Emergency Relief, W.P.A._____ 595,000,000
National Youth Administration
83,767,000
zation of an unlisted distributing house and a stock exchange firm.
Civilian Conservation Corps_i_ 246,960,000
The dealer must create, discover, develop and service his markets.
Public Roads
50,300,000
The exchange member performs a mechanical function in a market
Public Bldgs. Administration^-'
34,584,576
which already exists. For this he properly receives a nominal fixed
Department of Agriculture.-..- 402,656,521
'"Estimated.

no.

furnishes us with the following copy

addressed to Ganson Purceil, Chairman, Securities
Exchange Commission: 4 4'"4
y 4\.-4:4M.. .* ■
; ,v 4.
Allow me a few comments re: The operations of the SEC

ports, quotation

expenditures

Lancaster, Pa., dealer

their letter,

services, clerical and stenographic help, advertising,
helps and many facilities necessary to render his
effective. He gives unstintingly of his counsel
and
experience.
He
employs and risks his own capital and constantly
purposes:/-'-'
f
4/, ^
Fiscal year 1941
$6,301,000,000 stakes his reputation oh his own judgment. If he is honest and sin¬
Fiscal year 1942^. 25,954,000,000 cere, he has a moderate chance of success. If he violates the princi¬
^Fiscal year 1943_^ 67,000,000,000 ples of good business, he fails by losing his customers, or, by trans¬

regulations provide for the

rules and

war.'

Bureau's

in the buying and

banker would not be in business

wise the investment

market principles of trading.
The proponents of the Rule apparently do not recognize that
orders for material,
weapons, naval vessels, -merchant unlisted dealers perform any economic service in developing public
ships and all other war-effort re¬ interest, which, in turn, sustains the market for securities ineligible
quirements
may
be integrated for exchange trading. Nor do the proponents of the Rule appear to
with the recruitment and training recognize the principles of merchandising in effect throughout the
history of all business.
.
of manpower, and the long range
"Cost of Sales" and "Administrative Expense" are proper and
planning and conduct of the war
normal charges in the conduct of^any entrepreneur businessf enter¬
in the various theaters of action
where that war may be fought.' prise. These items appear on every balance sheet. But in no com¬
mercial
business in the world is it either the custom or the law to
"He said that the expenditure
r
burden had
been heavy in the disclose wholesale cost prices to retail customers.
The retail distributor of unlisted securities maintains an organi¬
fiscal year of 1942, 'will be heav¬
ier in the fiscal year 1943, and zation of salesmen. They require the service of a trading department
beyond that will be determined by and a statistical department. The dealer must provide analytical re¬

Budget

-yA:••

4 ■■■'■•<,/ *v
v > r <.
the conduct oL the business,

of securities, a reasonable

selling

Dissemination of such reports and

"The

Necessarily, in

advance in order that pro¬

the course of the

to-this business.*

grams

of Securities

We are one of the security,

possessing "exchange
cannot be changed by
emphasised that the figure did not
fancy. It could serve no good purpose, in the public interest or other¬
represent actual expenditures.
'Appropriations and authoriza¬ wise, to demoralize or destroy the markets for ineligible issues which
tions,' he said, 'need to be made would assuredly take place if they were to be subjected to exchange
far in

St. Paul, Minn.,

the National Association

profit is to be implied or other-:
and' the present*■
protection of the public. Howj *
Obviously, the securities of many entirely sound issuers may
ever,;if the proposed rule implying, the .exercise. of reasonable, dili¬
never attain all
of the above prerequisites.
No arbitrary rules or
gence be applied, the investment dealer more< or less at all times is «
regulations can ever confer auction market characteristics on issues
subject to criminal liability in determining what degree of reason¬
which do not inherently possess them.
.
•• • >
r
V 1 11"
able diligence has been exercised, and it is altogether reasonable tof
As to the manner and method by which application of»Rule
expect the rule to curtail and force the investment dealer out of
X-15CL-10 would "kill" the over-the-counter market, consider the
business without accomplishing any direct benefit to the investing
following:
public.
~
; y ■;
4 ;
Securities are, in a sense, a "manufactured" product and hence
The justification for the economic existence of the many hun^,
are
subject to
the
same
customs, procedures and influences. dred investment dealers throughout the country is evidenced, by the
Whether the issuer be a large, established corporation engaging in a economic services that these investment dealers render in providing
normal refunding operation, or whether the financing involves a
markets for the many billion dollars' of securities that are outstand¬
new venture of risk capital, the "manufacturing," "distributing" and
ing in the hands of the public. Likewise, in giving support to the
"marketing" of the new issue entails the study of kindred fundamen¬ distribution of securities for corporate purposes and otherwise, as for
tals. An analysis of current conditions determines the rate, maturity,
instance the distribution, which has been made in the last several
redemption and sinking fund provisions and the nature of the issue, years, of the lower coupon rate of securities, namely that of 3%;
whether it is to be a bond, debenture, preferred or common stock.
3*4% and 3^4% as the result of the refunding of .higher coupon:
The security is originally tailored to fit the times, with a keen eye
securities, namely, that of 5% or more, thereby allowing the corpo¬
cast on the laws of supply and demand and careful consideration be¬
rations and the borrower to have the use of funds on a lower coupon
ing given to comparable issues already available. Once distributed basis and, likewise, permitting the Federal Government to receive
and sold, the issue becomes "seasoned" and takes its competitive
increased Federal income taxes from that of the larger net earnings
place in the field of outstanding securities. It is in the public interest after fixed charges of these borrowing corporations.
4 44
that the issue be accorded a continuing market, according to its merits
44"
'• vi4'4>4 4.4:4,: '44 v4
Yours very truly,
y
and subject to such influences and developments as may ensue. As
WALTER S. GRUBBS & CO.
:
such, it becomes part of the composite pattern that makes up the

514,657,286 total on the books for
war
expenditures, Mr.
Cannon

•

Re: Proposed-Rule X-15C1-10 *y,v; '4v;.v*'
dealers in receipt of the above pro-<
posed rule from you,vvith' your request that we make our 'comments.
*A
The writer of this letter has been active* in the security* business
in the capacity of a securities dealer for some 30 years and is, there-#
fore; somewhat qualified to make comments on matters that pertain
y},

>. k

;

Widespread distribution.
Sustained

figures, including a break¬
of
both
war-necessitated

down

proponents of Rule X-15CL-10 fail to

These essentials include:

Aug. 7.
The

letter

following

the

•*'''" ;V,;v

Nd." 9'1

Grubbs, ofWalter S. Grubbs & Co.,

Dealers, inc., Philadelphia, Pa.i

recognize* the eco¬
nomic necessity Of the over-the-counter market. They ignore the fact
that unless or until an issue possesses or acquires certain essential
1943, for the expenditure to pro¬
vide0'the
nation's
defense
and characteristics, it cannot be supported by an auction (exchange) mar¬
war

'' 4'" DEALER

■

Walter S.

sent

(dealer) is

fundamental.
The

transaction.—(From a

tion of the

Imperiled by SEC Plan
r

obtained prior to consumma¬
Philadelphia Dealer)

required that permission be

it could be

(Continued from page 619)

A compilation of Congress' fis¬
cal

Asked Rule;

Dealers Continue Attacks On Bid &

might be sought;

special situations where exceptions

forced. In, any

War

"" DEALER No. 12

; y
Joseph Haynes,
in connection with the proposal of the SEC to force a disclosure of
profit on the part of over-the-counter dealers in securities, closing
with your invitation to readers for their comments and opinions.
market to be in a distant city and an exchange of telegrams was re¬
4 There seems to be a great deal of confusion regarding the pracf
quired to purchase the stock. When the certificate was received, it tice of over-the-counter dealers in connection with the sale of un^was transferred into the customer's name and delivered by registered
listed securities to the public, and I regret to say that the article
mail, insured. Question: What was the cost of the stock? Certainly, serves to accentuate the confusion.
4

I notice

article in your issue of Aug. 6, by

the XYZ Company pud had made a trip to inspect the plant
and properties. The salesman made three trips by automobile to close
the sale.
The dealer's Trading Department had found the "inside"
port

not 20!

If the motivating force

behind the proposal of Rule

X-15CL-10

protect the investor against unconscionable profits, certainly no
such devastating procedure is required.
The laws against fraud,

is to

deceit and insufficient disclosure are

already clear and effective.

clarification of allowable profit ceilings is all that
need be applied. The present general assumption that the maximum
shall not exceed 10% of the amount involved is not equitably applic¬
able to all price ranges. For example, a gross profit of 10 cents per
share on a stock selling at $1 is reasonable while 10 points on a
bond selling at par could not be justified. We believe such a schedule
could be worked out based on a declining percentage as the price of
the security increased. It could be clearly set forth and readily en¬
our

opinion,

The

main reason for regulation

tions is the

by the SEC of these transac¬

fact that over-the-counter dealers can

make a profit of

point to 5 points or more on unlisted securities, while the
investor is in no position to check the market properly, especially
in the case of very inactive securities. In cases where a dealer will'

from

security, buying quantities with his own funds,
is entitled to a profit, even a profit
which may seem unreasonable to some people. However, in the case
of a security which a dealer will buy on an order from a private in¬
dividual, in the open market, and then will tack on a profit, rather
take

and

than

position in

taking the usual risks, he

charge

the usual commission,

value of the services

that profit should renresent the

only, because practically no risk has been taken.

Volume

156

Number 4100

Even in the
make

where

ease

THE COMMERCIAL &
FINANCIAL CHRONICLE
unlisted securities' dealer

can

criticism against their

properly

profit, the cost of the security to the individual should not
exceed the "offered" price of that
particular security quoted publicly
a

by other similar dealers..'.

It is evident that what has started the

who make

SEC

ring up the issue?

VO\\V•...CV
the trail of dealers

theory that they had spent time and money in ferreting out these
special situations which had been ignored by other people. These
charges involve securities of companies in
reorganization, the theo¬
retical value which had been ignored by other dealers

ing

public,

rendered

and

U',-.

There

for

services

garding

those

worth

was

.•

proper,

that the service they
commission which might

if the investor is entirely satisfied

they "get"

to pay for those services.

However, in such cases, perhaps the SEC
should issue further regulations so that
dealers who wish to work
in that fashion should receive
special permission by qualifying as
"investment counsel," or something like that, and further
by disclos¬
ing on the confirmation slip, not only the
had been bought (or sold in

notation that

that

charge of J.

given)," as well
2 points is made for such services.

:It

manner,

that

yfj'

the

interest

of "fair

How

orders,

You asked that dealers make comments
regarding this proposed
same be forwarded to
you promptly. This rule if made ef¬

opinion,

our

throughout the country,

•

eliminate ^ver-the-counter

make

trade in

security to such a close margin that
opinion, could not survive.

dealer, in

the

dealer send his salesman
into the

legitimate markup

over-the-counter

majority.—(From

the

but

are very

pot be found

believe

Despite

matter

SEC

ready for

man

his sales and he will, at the

easy

mark.

war

the

purposes

compared

record

Associated

Press

$4,-

further

disclosed;

"Starting with $200,000,000 in
July, 1940, war expenditures have
increased almost every month. By

"War

spending

approached the

$2,000,000,000 mark in December,
1941, but did not actually pass it
until

January,

they

totaled

this

when

year,

$2,230,000,000.

March, expenditures had passed
$3,000,000,000, while June showed
than

"Total

same

$4,000,000,000.

other commitments

totaled $129,998,000,000.
The total of appro¬
priations approved or pending to¬
taled about
end of

gratified

SEC Applications For
Broker-Dealer Registry

read

just

every

a security salesman with no sense
willing to take the usual risks in swindling people.

and

sensible

to believe that their function is

business.—(From

New York City

to put the honest

dealer

Dealer)

No.

Exchange

Commission

wer$

brokers and dealers

article dis¬

" best market."

The following applications for
registration with the Securities

the dates indicated;

.V-'

DEALER

For the sake

$223,000,000,000 at the

July."

Cleveland, Ohio, Dealer)

sold.

seems

war

plies and services. During the two
years ending July 1, contracts and

time,

and confusion caused by the

retail customer.

77 „It appears that there would have
to be a very definite
interpreta¬
tion of what, in this
rule, is meant by "best markets," especially when
there are so many factors which can
enter into the determination

of argument, let's assume that I am

of ethics and

diligently

Shady, disreputable "con"

Corporation and

$4,794,000,000,

The

V./.'A/v i.i'77.7:7 ;:7"

The'SEC, which went through the legislature
by one single vote,
supposed to police and catch the crooks.
However, since the
SEC has been operating the crooks seem
to have increased, but the

amount of policing there will always be crime, jNa
the SEC may work there will always be a

any

how

:•

No.

forcing &. II. Macy to have their cost
price

out of

DEALER

was

123,000,000 in June.

industry, in the operating

was

necessarily opposed to the rule and hope that it will
to evoke it. -

necessary

issued

Office, pf

This

subsidiaries for

with

■

new

played

the

"sticks" for some

its

your comments on the
rule to force profit disclosure on
over-the-counter trades.
Just because a few unconscionable
dealers have made unscrupulous
profits is no reason why the rank and file of honest
dealers and sales¬
men should
be made to suffer. This disclosure rule is

used rather than to handle it in the manner proposed; that is, unless
the over-the-counter dealer is an industry that the Securities and
Exchange Commission feels should no longer exist.
,

' We do not believe in prohibitive profits,
livable margin of profit being allowed,

figures

$1,790 a second.
July
by the Treasury
expenditures by the Recon¬

totaled

overwhelming

interested and

was

SEC's

margin of profit that is to be

;

the securities

DEALER No.
I

;

serve

name

through

Information.

and

-We believe the proposed
legislation to be untimely, uncalled for
If the intent of the
proposers is to weed out
minority of undesirables, it should be accom¬
plished through methods that are less
harmful to the

that purpose perfectly.
"
It is our contention that a legitimate and reasonable margin of
profit should be allowed the dealer and that the Securities and Ex¬

change Commission should

Board

Aug.

struction Finance

and vicious in purpose.
of the business a small

our

this proposed rule will

$154,645,161 for the
according to War .Pro¬

days,

duction

disbursements

ever

dissatisfaction, embarrassment

:'-It is merely for the Securities and Exchange Commission to de¬
termine whether they wish to eliminate the over-the-counter dealers
and if

at the rate of

December, 1940, they had reached
profit limitation forced on him
by a disclosure $508,000,000 and by July, 1941, had
Not only will the small dealer be
driven out of passed $1,000,000,000.

connected with

one

ex¬

narrow

furnishing of wholesale prices to

'■'

the rate of

;

can

avoid the

dealers

human nature to pay as small a
margin of profit for any¬
thing that is purchased whether it be stock, a suit of clothes, or a
commodity and when the bid and ask price is disclosed it forces the
.

m>'7'7'V- -■■■".■

daily rate

average

for war purposes by
Government agencies in July was

spending from June,
1940, through July, this year, came
to $39,559,000,000.
the daily newspapers
because of a limited public
"Despite the magnitude of actual
interest, it should
still be practicable to use the
basic formula for NASD quotations.
expenditures, they fell far short of
v^^By the use of the NASD formula, the dealer will be
commitments
for equipment, sup¬
permitted to

rule and

will,

^,7

The

penditures

War

openly contended that dealers in se¬
curities be obliged to sell their
retail customers at wholesale
prices.
desirable that retail profits be
kept within fair limits and
that a disclosure of national
quotations be made on each retail trans¬
action, why not use the published quotations issued
by the NASD
Quotations Committees? Where such
quotations are not furnished to

•

fective

.-A'

Spending In July

Was $1,790 A Second

a bunch of racketeers whom
income tax charge when
they can't make a racket

administrative end, has

with the following copy
of a letter addressed
by them1 to the National Association of Securi¬
ties Dealers, Inc.*
*
"
"
:We have received your circular letter of the
31st, enclosing Pro¬
posed : Rule of the Securities and Exchange Commission wherein
dealers are required to place before purchaser or seller at
the time
of purchase or sale, a bid and ask
price on the security being handled.
v

A77f7a7'777.77- 77:

who

chosen

business by this rule, but the rank
and file of small buyers
through¬
country will also be eliminated from the
investment markets
because no security salesman can
afford to spend the time to "reach"
these ' buyers. .;
A

DEALER No. 13

A Miami, Florida, dealer furnishes

their

out the

letter, in full.^-

of wholesale prices.

0;Y;''-7.':'>■;' 7';

play" something like the

above should be inaugurated and should be
supported by your pub¬
lication. I trust, therefore, that you will publish this

(From Luigi Criscuolo, New York City)

War

out of

;

case

seems

wages

This proposal must he fought
right now, because most of us will
business if the idea is not
killed. And, we ought to enlist
on our side the active
support of every other line of
business, because
who can tell if the next
industry on the program will not be the coal
merchants, the furniture manufacturers, the
hardware dealers, or the
motion picture exhibitors.
be

all parties would be placed on notice of the
and the "truth in securities" provision of the Securi¬
ties Act would be properly observed.
"
in the

menial

;

charge "stick."

price at which the security

advice to sell is

case

than

Government is adopting the
policy of limiting profits in
the securities industry
and in all other lines, to infinitesimal
frac¬
tions, we ought to know about it and
that policy should be formu¬
lated by the legislative branch
of the Government and
not by an
administrative commission that has
already gone too far. Let them
tell us directly what they are
trying to accomplish. They don't have
to handle the securities
industry like

-V/'
:;'v '
,;"f
of such dealers in charging
had exclusive information re¬

they have

If the

claimed

the usual

particular security;

have

than

for stir¬

now

administrators,

earned

never

professions?

doubt that the practice

dealers

probably

the invest¬

fairness, what occasion is there

Is the NASD (the handmaiden
of the SEC) performing one of the
Junctions for which it was organized,
namely, "to maintain a staff
of experts who will
give helpful advice and
sympathetic considera¬
tion to the problems of those
engaged in the securities business"—or
is it assisting the SEC
in trying to impose on an
industry that, at
best, is merely "getting by," the ideas of
some half-baked
economists,
long-haired theorists and boy-scout
business

unreasonable profit is the fact that some dealers have
2 points for services or advice in connection with
special
situations. In fact, some Stock Exchange Houses have
been known
to make such charges even in connection with
listed securities on the

charged 1

627

made

July 20, 1942—Colsan
341
Madison
poration,

Oil

Cor¬

Avenue,
York, N. Y., George H. Sandison, Richard H. Sedgwick, Wilbur
F. Allen, and
George B. Allen,
officers; A. J. Kilpatrick, Jr., 138
Eighth Street, Augusta, Georgia, a
New

sole

proprietorship.

July 22, 1942—Carlton A. Opel,
258 Broadway, New
York, N. Y.,
a

sole

proprietorship.

July
23,
1942 — Connecticut
We suggest that in lieu of
disclosing the "best market," published
Credit Union League, Inc., 46 Hillbiit now, with?proposed rule
the SEC has considerably quotations, supervised by the National Association of Securities Deal¬
crest
Avenue, New Britain, Conn.,
ers, Inc., be broadened to include a
helped me fleece my customer. )
greater number of securities than
.
»
Nestor J. L'Heureux, Reuben B.
:
Cannot the sagacious SEC understand how I could use their have been published in the Press.
''>7■
The over-the-counter dealer
Jr.,
Leonard
Russell
does merchandise securities and Whipple,
ruling to reap a harvest?
Extremely simple. ? To begin with, I very
Nixon, Frank E. Barbier, Louis J.
carefully explain to my sheep the full text and meaning of the ruling. therefore makes markets which would not otherwise exist. This pro¬
What a delicious sleeping pill for them to swallow. 7 Then comes posed rule would kill the activity in many over-the-counter securities Wissman, Edwin L. Mix, Ara T.
to such an extent that there would
Dildilian, Harold Arthur Iversen,
the razzle-dazzle spell-binding sales talk and always
not even be a "best market" in
interpolating
L. F. Deming, James E.
Moran,
during my talk about how the SEC is my monitor and my sheep's many issues which now enjoy broad and active trading.
and Vincent J.
It was reported that the SEC
Lombardi, officers;
has suggested this rule as it would
guardian angel.
Then with the sale made, I simply give to him in
Thomas Associates,
relieve them of some of the
Inc., 551 Fifth
writing the "inside" bid and asked market. I say "inside" because I
policing necessary in connection with
jmean inside my hat. A mere figment of my imagination is the Aiarket over-the-counter dealers who have taken unconscionable profits. If Avenue, New York, N. Y., John
B. Jacob, Arthur J.
this
rule
were
in
Brown, Martin
I quote to the lulled sheep. How easy it was to take him and fleece
effect, we believe that the policing of the SEC would
L. Semmel, and Lillian M.
Walter,
him. Not a suspicion ever arose in his mind. And I laugh and laugh he ■ tremendously increased and we question whether they could ef¬
officers;
Ernest
Merle
Zimmerficiently
police
such
a
rule
without a great increase in their
because who gave me this sleeping pill? The SEC did.
personnel.
We
mann,
1
Wall
suggest
that
Street,
New
York
the
National
When will the SEC learn that honesty cannot be legislated into
Association of Securities Dealers,
City, a sole proprietorship.
Inc., should continue to police the
£py industry? The medical profession will always have its share of
subject of profit margins.
July 25, 1942—Philip Howard
If this proposed rule were applied to
quacks and abortionists, the lawyers their ambulance chasers, banks
the merchandising of all
goods and services, the complex system
Reilly, 112 Prospect Place, Manitheir absconding cashiers and we in the
of distribution in this
security business will always
country tou
would break down within a
Springs, Colo., a sole pro¬
be plagued by fly by night salesmen and dealers.
relatively short time as this rule will
Each profession
prietorship.
..; 7
; VJ
tries its best to keep its house clean and I know that every legitimate break down the merchandising system of securities in this
country
in a very short time if it is
July 27, 1942—Richard Davisbroker and dealer would cooperate
put in force.
A

crock

always takes

some

risk whatever

his undertaking

may

wholeheartedly

with

the

SEC

to keep our house clean.

Can't the SEC find a better way than whole¬
sale extermination to bring about better cusomer-dealer
relationship?
This present ruling is comparable to sinking the ocean liner in order
to

rid

the

few

hundred

rats

Maryland Dealer)
v,

Referring

PRICE;

proposed

What

RETAIL market. 77
It

late

board.—(From

rule

market

X-15C1-10

far

have

criticisms from any sources

able

ascertain

there

v'vV.V

have

been

to the fairness of the "spreads."

paper

The
of

in the

become the mouthpiece

interest, NASD to

far,

that thousands of other Dealers
share these sentiments.

Greenville, S. C., Dealer)

can

to you

out

business.

honest opinion.

July 30, 1942 — Joseph
Miles
Harper, Jr., 930 Elmwood Avenue,

Shreyeport, La.,

such
seems

are

put¬

myself,

to be my

are

trying to make an honest living out
business, but it is getting increasingly difficult to do
so.

sure

that the many

for your efforts

dealers in business today, are thankful

our

sole proprietor¬

ship. A

pany,

31,

1942—Clark

Com¬

;40 Wall Street, New York,

Y'.,

Mrs.

Cherry

behalf.—(From

dition

Bradley

Clark

C. G, McDonald & Co.,

lot of small
fellows,
I don't care who knows
it, but this

Many of

run

Avenue,

sole proprietor¬

and

John F. P. Clark general partners;

tell, the NASD and the SEC combined,

ting forth every effort to

special partner in the firm in ad¬

DEALER No. 19
As

Highland

Jamaica, N. Y.,

July
Chronicle" has quickly

notwithstanding.

am sure

If the retail spreads compiled by respected members of the
pro¬
are considered to be fair—and mind
you, there has been no

Joseph Haynes concerning

and thus is perhaps the
most influential medium
through which to safeguard their

country

—(From

Can

"Financial

172-90

son,

ship.

again take occasion to commend
in its courageous stand for the
welfare of the American

the contrary

of this

;

No.

Security Dealers

the SEC, or any legislative body now point out that these spreads
have allowed exorbitant profits to the dealers—or that the
industry
has prospered because of the excessive profits permitted!
fession

condition would not be in the best
interests of

Boston, Mass., dealer.)
DEALER

market

that

been

Securities business.

DISCLOSURE

Vr-

(From

We have just read the article
by Mr.
proposed Rule X-15C1-10 and

your

price?—WHOLESALE

-7 7/7'7:7
1940

Obviously, such

the

the NASD attempted to work out a
legitimate spread for newspaper quotations on over-the-counter se¬
curities. After mature consideration, the NASD adopted a basic for¬
mula for retail quotations, which would permit a
deale| in securities
to make a fair profit on his sales.
was

•

DEALER No. 15

the

are

MARKET

which

the public.

Virginia Dealer)

1012 Buhl

Building, Detroit, Mich., James W«
Crawford
baum

Claude

and

officers
G.

Pauline
in

Budden-

addition

McDonald.

George A.

McDowell, C. Edwin Mercier, and
Helen F. Barr.

Advocates Investment In Stocks

Defer Effective Date Of
;

(Continued from first page)
the period of the bal¬

viously, since an investor cannoi#

describes

magnificence

the

events

IV'" <■ *>*'*<•] ">;7 .7-

AROUND THE TOWN

■

7--":7'.

• y-,;

Billy Rose's latest Diamond Horseshoe (W. 46th) show is a bang-

Emphasis, on the "bang-bang." For in following one of
policies "'■*;
nobody talks at my shows," the noise is terrific;
Music is dt top pitchy mikes are wide opeh.
The show, "Mrs. AStor's
Pet Horse or The Horse With The Hansom Behind" is about life in
New York when Mrs. Astor ruled the social roost. { An "old cabby
reminisces with his horse about the dear dead days.
This is the cue
bang affair.
Rose's

for

reenactment.

One is

night at the circus, another is something
Even the opera comes in for a- nos¬

called the rebirth of vaudeville.

Mr. Rose, who knows the cash value of nostalgia spreads
presents Harriet Hoctor, Billy Welles, Lucienne and
Handy, Billy Banks,
Nellie Durkin, Virginia Mayo and a lot of others who depict life in
New York when Mrs. Astor rode in a hansom.
Rose recognizes a

talgic nod.
himself.

Ashour, Herman Hyde, W. C. (St. Louis Blues)

that

them by

be-held

would

also

hazards

This
but

after

Food at the "Down

Still it's a thought.

Australia.

good and reasonably priced ($1.25 tops; drinks extra).;; Miss

Evelyn Brockman, Radio City's only woman restaurant manager, is
around

see

You may recall Miss Brockman. from the

things.

Holland House at the World's Fair
famed Holland House Tavern'e.

side who hails from

Miss

chief hostess at Radio City's

or as

She?s

seafaring family:

personable lady on the buxom

But

matter how charming

increase in selling pressure at

discouraging, the desire to accumulate stocks,.
shortsighted to We regard this, situation as favor
The costs of this able for a renewed advance. in

sounds

very

would

are

war

that only a stock prices.—LAIRD, BISSELL &
"';7
paid for out MEEDS. ; .>'77 ;/7

enormous

small fraction can be

against

income.'

current

must

The balance

out of the Nation's re¬

come

Investment Trusts 77

its ' accumulated capital.
(Borrowing, of course,, is a lien on
existing capital and future in¬
come.)
We 'do not believe that

serves,'

dependent."
'
i * Mr. d'Avigdor, who has militantly opposed the plan since its
inception, told the SEC that the
NASD
was
attempting a "mar¬
riage* of money ,to ethies,. and
that is like mixing oil and water
—they are incompatible." Stating
that
perhaps
the
amendment

the

investor

find

can

(Continued

ing cash

simplicity.

safety and

;

Investment Company Briefs

by investing solely in
and high-grade cor¬

623) ' ';
is marked by its

on page

and the language

protection against losses by hoard¬

this

Occasionally

Government

column

;

has

quoted from National Securities &

porate bonds. Of course, his capital
as expressed
in dollars and cents

Research

Corporation's
"Invest¬
ment
Timing Service" with re¬
the
:buying
to "shake out the pickpockets," he
spect to the intermediate trend of
power of his dollars may decrease
then
stock
inquired "what about the
PricesInasmuch as the
materially.
In
fact,
he
has
already
erstwhile
pickpocket
who
has
suffered a considerable loss be- 'Aug.-HI issue-reports-* tf. change Hi
grown to the bank robber's class?''
the forecast of the trend, the full
cause of the advance in the cost of
Commenting on the low state of
comment
is presented - herewith:
living
and
in
the
price
of
most
the
securities
industry,. Mr.
"Last Thursday we wrote: 'The
goods and services.
The
same
d'Avigdor. declared this to be "the
action of the market suggests that
argument applies for life and an¬
wrong time for severing part of
the
up> movement
of
another
the nervous system of a body that nuity insurance, the most widely
microscopic surface wave may
held investment in America/
.'
needs
every tendril
for a con¬
now
begin' with a top in two or
Neither do we believe that in¬
tinued existence," He also asserted
three days at about 105.50.
But
vestment's ; in real estate offer* a
that the Maloney Act itself, pur¬
there is no evidence that the bot¬
safe refuge.
Besides the disad¬
suant to which the NASD was es¬
tom
of the intermediate down¬
vantage* of limited liquidity and
tablished; - clearly
indicates the
trend has been reached.' Th£ ac¬
its inexpedience for most of the
absence of any intent to set up'
tion of the market continues to'
smaller investors, such; factors as
minimum.- capital,
requirements
indicate that lower prices will be
rent control coupled with rising
for such an Association.
v <
seen before any sustained upward
costs and taxes have already re¬
Van Dyck MacBride, who rep¬
movement gets under way.'/ The
sulted in serious disappointment,
resented a group of Newark deal¬
if not actual losses, to many in¬ Dow-Jones Industrial Stdck Aver-*'
ers, presented a petition to
the
vestors.
As to farm land,-which age closed last Thursday (Aurg. 6)
SEC, signed by each of the firms,
has had a considerable price ad¬ at 104.80.^ The 'opening' figure
requesting that it disapprove the
vance
in
many
sections of the next morning (104.68) was & new
amendment and to order a new
country
since
the
outbreak of'the hourly low since the close July 3
election on the question at which
(104.49).; >The average then begari
war, we doubt whether many peo¬
balloting wouldjfoe secret., v
?
an irregular advarice until at 2:3d
Robert W. Baird, former chair¬ ple are able to make intelligent
P.
M.
Tuesday
(Aug.
11)
it
use of this investment possibility.
man and
now
treasurer of the
The succeeding
The doubtful future of farm prices reached 105.49.
NASD, was the principal defender
in the post-war period also should low point of the microscopic wave
of the amendment.
A prepared
formation (105.18) was reached at
not.be ignored.
.
.
.
; .
statement by Mr. Baird, who is
11:30 A. M. today.
After milling
For some time past we have adalso President of the Wisconsin
would

serve

effectively

sieve

as a

will

not

change, but

Co.

Milwaukee,

Wallace H.

Fulton^

read

was

rector of the NASD.

•

National Association of Securities

arrangements to bring their capi¬
tal up to the minimum before the
"The
not

blind

the

;

association,"; he

said,

irresponsible members.

"is
has

fact that it

the

purchase of common

stocks, although we fully realized

7. "The Board of Governors of the

effective date.

around for a couple of hours, some
evidence began to appear that the
that corporate earnings would be character of the market was imthe;first—because they are the proving.
The close tonight was
easiest—victims of war taxation. {105.70,
The indications from the

vocated

executive di¬

named

ignore the facts.

that everybody hankers for the days of their
Dealers, Inc., would not have pro¬
youth.' So he gets old performers who are happy to be working and posed the rule la the first place,"
making money again. The public is happy because it can cry in its it
said, "if it felt that the require¬
beer.
Rose is happy because he jams his place and cash registers
ments thereunder would be detri¬
make jingle-jangle-jingle.
For those not hep to the lure of the dear mental to the interests of the
dead days Rose throws in a lot of gorgeous show girls.
The are not membership or would blanket the
of yesterday.
They are of today, streamlined chassis 'n'-everything.
membership
with
unnecessary
Mr. Rockefeller's Radio City has a number of restaurants.
Some hardships in these difficult times."
Mr. Baird predicted that most
outdoors, some on the ground floor and some way up near the clouds.
Now there's another one, under the street, so it's called "The Down of the firms not now meeting the
Under." Of course the location has nothing to do with the name. It's capital requirements would make
Under" is

Our observations show

good.

all
viser can do little but try—by since the averages peached their
spreading the risks intelligently— intermediate :highs in mid-July*
There has only been a let-off in
to hold such losses at a minimum.
evitable, and

fundamental psychology

Losses will be in¬
the investment ad¬

compromise.,

whose good will
they are seriously

those

and patronage

protect himself against any and all reports and dividend reductions
now facing him, the solu| on the other, the performance of
tion of his problem can only be a! the .market has been remarkably

man

which touch the
family arid shows how its ,members react to different changes. The
coming of the gasless buggy has, its; effect. Death decay and economic
progress leave their marks.
And so it goes. It is a drab recital of
a family in the twilight of its grandeur.
The cast, including Agnes
Moorhead, Joseph Cotten, Dolores Costello, Tim Holt; Anne Baxter,
Erskine; Sanford and' Richard Bennett, was well selected >■ for its
role.
"Bambi," the latest Disney picture, one that the Disney
office says it took four years tq, make, is a pretty little thing, but it
does not have the rib-tickling spontaneity of Say a plain run of the
mill Mickey Mouse.
Bambi, is a cute1 little fawn and is no doubt
a faithful replica of Felix Salten's nursery story Bambi.
As a fawn
with rubbery legs who has such a time of it on the ice he is grand.
But when he grows up he becomes too stilted; too wooden. 'The one
character in "Bambi" that stands out Is the buck toothed rabbit,
Thumper. His activities make him a fit companion to Mickey, Donald
Duck or even Pluto.
"Pardon My Sarong," the latest Abbott &
Costello opus, shows the same team in the same mess; using the same
gags against a slightly different background. ^ Its really amusing
sequences can be attributed to director Erie C. Kenton, who makes
a burlesque out of what starts out to be just another Abbott and Cos¬
tello farce.
In one chase he has Costello stop all out of breath and
say to the villains, "I'm all in.
Let's rest a minute." The villains
agree and everybody sits down for a breather.
Then Costello, re¬
freshed1, says, "Okay, let's go," and the chase is resumed. The story,
ns the title implies, is laid in some mythical South Sea
isle where
a boat carrying Abbott'& Costello, Virginia Bruce, Robert Paige and
the seal named Sharkey carries them after a storm.
They get along
famously With the natives. /Alt would have been idyllic if it weren't
for Lionel Atwill who! is after treasure and plays on the natives'
superstitions via volcanic eruptions, etc. Of course our heroes tangle
with the villains. ' But everything works, out well in the end, as if
you didn't know... <YV../,' ■;
;v-'i
r• '777?777";:
Amberson

a secret poll would have been the
of whom it was once said, "There, but first and minimum requirement
for the grace of God, goes God."
But RKO with its eyes on balance for a true vote.
The failure of
sheets (and considering the pictures they have been turning out re¬
many members to vote against the
cently they must be getting cross-eyed) doesn't see it that way. For
proposal in line with their real
unless Welles and RKO make a new deal, "The Magnificent Amberviews is only a part of the distor¬
sons,i is the last picture Welles will make for them. As everybody tion caused by the menace of -re¬
knows "The Magnificent Ambersons," based on Booth Tarkington's
prisals. v It has come to my atten¬
novel, is a story of the decadence of an American family just entering tion that .some members who
its Shirt sleeve cycle. The picture has its points but it is by no means
voted in* favor of .the proposal
a second "Citizen Kane."
Technically, it is interesting, It has tricky
were in fact opposed to it but did
febiind effects, arty camera angles and strange lighting montages but
not even dare not to vote,
They
Wheh you've said that you've said all. Beginning at the peak of the
feared that, if they failed to vote

(! Orson Welles is the

ments, bonds or stocks, real estate or commodities, or goods of any
kind, that do not have important inherent weaknesses which could
result in serious losses if certain- possible events materialize.
Ob¬

loting, Mr. Dunne commented, to
wit: "Surely in such an atmosphere

THE MOVIES

Most

people do not realize the tremendous difficulties expert
enced every day by the conscientious investment adviser who is fully
aware of his responsibilities.
There do not seem to be any invest¬

dence during

Thursday, August 20, 1942"

FINANCIAL CHRONICLE

THE COMMERCIAL &

628

It did not,

however, invite those irresponsi¬
ble people in and they are not
welcome as long as they stay in.

The

that

worst

the

almost

least

respect,

worst,

action of the market this after-

noon are not, of

now,

themselves, worth

dividends have been (a great deal.
But the bearish
anticipation | characteristics of the market of
of the lower level of earnings. But 1 the past few weeks have in recent

known. Many

cut in reflection or in

this has been expressed to a

very' days shown

some

signs of abating,

in the sharply re- ' And a few bullish symptoms have
level
of common' appeared.
Any upward movestocks which even on basis of low- ment at this time might be short¬
large

extent
duced
price

But the basis for making
assumption does not seem
obtainable in high-grade bonds.' solid enough to warrant not folMany common stocks of sound lowing * the
upward indications
corporations are selling at less | that have how appeared.
The
earnings and dividends offer a
several times larger than

lived.

such

return

their net current assets,

than

to mention the actual value

not

movement down in the five weeks

of the'since

plants, the organization, the good¬
will.
If our economic system in
Us

present,-or at least" a similar,
does survive this war-7-and

form

begin

any

(on July 9)
movement

that
.'may

moment' has.' of
of intermediate

not beeii

course,

stated

downward

proportions,

At the close tonight

BrpCkrrian can be, don't let her talk you into more than just one
we
are fighting this war for the
f.
j
....
X_
They are in because we could not
the Down Under from down uqder-a-table. keep them out. The capital rule preservation of "our way of life"— j1^ ^nqounts to only 3.05 Dow-;
then common stocks will retain i Jones
'points'
(from 108.75 to
will, we hope, effectively eliminate
their values which now are more 105.70):
But we must hazard the
certain of these and our continu¬
Forms D. L. Colvin Co.
deflated than any other invest- f
t
th t
unward
move(Social to The Financial Chronicle)
ing
enforcement
program
will
ment
that can'be bought' with i
that
an upward moveBEVERLY
HILLS,
CA^IF. - gradually take care of the others."
.

„

Sydney Sling op you'll see

The Penthouse Club
30 CENTRAL PARK

:fU/.,/

SOUTH

Adjoining The Plaza

Donald

L. Colvin

offices - at

Vard,

most

unique restaurant in

beautiful location,

Central Park

Serving

overlooking

the north.

best food,

skilfully

prepared.
Entertainment after 11 P. M.

securities

a
was

Colvin, Hoyt & Co., and in the
past was with Sutro & Co.

Wheaton Named Treasurer
Don

Wheaton

Treasurer-of

has

been

Sweetbrier

named

College,

Sweetbriar, Va. Mr. Wheaton

Wheaton

; t..

Mr. Colvin

formerly
partner in the dissolved firm of

recently

Telephone PLaza 3-6910

?730^Wilshire^oule-

to' engage

business.
A

Colym has ' formed
Company,; with

Donald

associated

with

was

Bull,

,& Co., New York City,

and -in the

past

Starkweather &

was

Co.

partner in

Mr.

defined

Baird

the

amend¬

money.

ment may begin at any moment.'"

the

"The
the

act by

the NASD in
interest of the public.
\

ment

publics

investment

;

participation
market

con¬

wish to emphasize' ttLe
importance of diversification.
It
has
never " proved
prudent
to
Again

again

somebody is going to be
and ft is my sincere
hope that our investment frater¬
nity will not be the only target
of such attacks, but that it will be
found to have discharged faith¬

weeks.

blamed again-

now

fully its responsibility to the in¬
country."

the

vestors of this

point
this

The

standa
as

almost

same

discussed

ber of

last.

Exports—Imports—Futures

the market

Considering the,

constant flow of bad war news on
one

SUGAR

average

the

WALL STREET

NEW YORK CITY

three weeks ago, when 1

writer

prospects

Dow-Jones
at

LAMBORN & CO.

"place all our eggs in one basket,"
but now it would seem extremely

to
widen," he added.
"There js no law of our associa¬ dangerous to concentrate on any
single one of the various available
tion,, of any State, or' even of this
investment media.
commission, which will prevent
The market has acted reason¬
the fool and his money from be¬
ing parted, but when losses come ably well during the past several

tinuing

hand, and the large num-'

highly unfavorable earnings

DIgby

4-272?

Volume

156

Our

Number 4100

THE COMMERCIAL &
FINANCIAL

SEC

Reporter's

CHRONICLE

Considering Minimum Capital

629

not

think

that prescribing the
minimum amount of net
engaged in this business must
have will serve the T
purpose of the NASD at all.
Let us. make my point by
stating: a hypothetical case.
Let us say that we have
$1,000 net
capital in our business. As
(Continued from page 620)
specialists in Pennsylvania Gas
/ ; /
Company
//;; stock, we decide to take a
capital, and equally disastrous results could
long position in the stock. We are offered
happen to both because
250 shares of stock at
of market conditions.
10,
and we take our $1,000 and borrow
/
;
1,500 at /.
/
the bank,
pledging the stock as collateral for the loan.
A sudden
Dishonesty on the part of a large dealer with a
large capital upset in the market occurs, and we find that
could affect a much greater
we have to
percent of the people than a small our stock at
liquidate
$7 per share.
We are still solvent.
dealer.
Now take
th£ case
/ Many outstanding examples of such failures of big dealers of the fellow who
has $25,000 free capital in his
in the past have revealed that
a
busines^./^JSe
larger percentage of the public decides to take on
10,000 shares of
suffers from their misconduct
Pennsylvania;
Gas
at
10 and
when they ge^into financial
difficulty borrows $75,000 against the $100,000 purchase
than the percentage of the
price.
Along tibmes
public which suffers from the misconduct the three-point
break,
and
the
fellow with the $25,000 of
of a small dealer, /.n
capital is
//:.v/'V^y;'yf.:/y'.;*////"■ broke. In other words, if this business of
determining ability and
v The
Association will never
accomplish its ideal through the integrity is to be measured in terms of
capital, net capital should not
enforcement of the Minimum
Capital Amendment and forcing the be the measuring stock; it should be the relation
of current assets
small dealer out of business.
and current
/'•'*;
liabilities., That is just sound common sense in any
From the "NASD 'News" of June
business,
and I cannot understand
15, 1942', we quote, "The Board
why. the Board of Governors/
does not in any way feel
missed this point when
that these minimums are guarantees of
constructing this amendment. True, it would
be hard Jo police
the financial character of
business integrity of those who
all/of
our
members
to see that they maintain
may qualify
th$
ratio of current assets to
under them.
On the other
liabilities at all times, but is not it
hand, the Board believes that as a prac¬
going to
be equally difficult
tical matter and in the
to see that minimum
furtherance of its advocating of sound busi¬
capital requirements are
ness policies, it should
fulfilled by every member of
propose Association members' minimum
the Association?
stand¬
/
ards'as to capital as well as other
My personal inclination, and
standards for the conduct of
that of my partners, is to vote "No,'*
members' business in the interest of
customers and the industry's therefore, to the amendment described as Article 1, Section 1.
Per¬
welfare;
The Board also
feels, based upon the experience/and haps you can make some constructive suggestions that will
change
our minds/
examination of over 2,000
•/
members, that the problem of enforce¬
Vyv/'/'/'/;
\jt •/ ;//,/•. /■",/'v'//.r:/ "' ;
ment of the Association rules
can be lessened and
:////•'"://'/"
,

capital

that

one

announced

(Continued from First Page)

chases without
tificates

obtaining the cer¬
required, and with

now.

"indicated"

capital profit
non-taxable,
v

rendered

Last
;

Of Long

Line

to
,

i r f

;

What will probably prove to be

the

last

utility financing by,
negotiation with banking
terests appeared assured
by,
approval of plans to merge
.

di¬
in¬
the

rect

Community

Power

"and General'Public

the
Co.

Light

Utilities, Inc.,
-

Since the program

leading Up to
financing involved, was under

prior' to the effective date of
competitive^ -< bidding
rule
promulgated by/the Securities and
way

the ;

Exchange

Commission,

the new
are expected to
company's bank¬

securities involved
go direct to the

ing Interests instead of being put
for auction bids,

the

program reduced with the

£ The

ments now recommended."

financing, designed to raise
some
$34,000,000,j includes $18,500,000 of first mortgage and col¬
lateral
trust
bonds;
$5,500,000
serial notes, and
85,000 shares of

Going To The "Mat"

•

! The "special -offering"
rule
adopted by the New York Stock
Exchange
into

weeks

some

its first

setback

ago,

ran

Tuesday
Company
undertook the sale of 50,000 shares
when

Dillon,

of Standard

Read

Oil

Company of In¬

diana stock which came out of the

Harkness estate.
/,
•V- Bankers took the issue into the

"twilight" market when
change refused to

the

Ex¬

grant

permis¬
sion for member
participation un¬
less
on

the

stock

first

was

offered

the floor.

;

.//y/' V'-;

Until the occasion of this under¬

Cordially

of that

bond

dealer,

right

though small, wants to

even

exist

and

make

living

exist and has

for

himself.

American

The

Board of
evidently feels, based upon its
experience, that the
problem of enforcement of Association
rules of fair practice can be
lessened and the cost of that
program reduced with the
adoption of
the minimum capital requirements
now
recommended.; ./This is cer¬
tainly true as it is a matter of pure
simple arithmetic. But, is it fair
to the small dealer, just because he
has a small capital; is it
accord¬
ing to American privileges of earning a
living; and is it not short¬
sightedness for the industry as a whole? " '

Governors

also

The matter of regulating fair
practices is one thing, but the
attempt to control it should not be made
through the limitation of
capital the dealer has in his business.
,

IIow did the Board of Governors
arrive at a minimum of
$5,600
capital?
Why should not $10,000 minimum be> more
effective?
Why should not $10,000 net capital be still
more effective
in the
regulation of protection of customers?
By regulating the small dealer
net

net

good

capital
to

and their cost

better

that

the

of under

Board

reduced, why,

all

dealers

thereby eliminating

$5,000

out

business and

Governors and
as

should

their

the

problems

results

lessened

succeeding step, would it not seem
have a net capital
of, say $10,000,

•'

Syracuse, N. Y., dealer writes

H'?/

follows:

eliminates
Let

problem

Board

and

costs

many

the

focus

our

attention

following observations:
what appears to be

otherwise well polished
apple.
"If the securities

merchandising

munity

;

it was

end

the

institutions here

Chicago.
The

Board

ordered

two

deposits

from

areas

reduc¬

requirements

reserve

demand

those

tion in the
rate

well

for

26%, the

financial

com-

a
relatively few houses of substance, as
back, perhaps we should not need any form of

years

/ regulation; but I

must remind you that it is now scattered far and
wide with securities houses
ranging in size from one man up.
But
with this growth comes the
inevitable

crowd whose activities throw
discredit

It.would .be

unfair

accuse

Mr.

fringe,

the

sub-marginal

all of us." /
of making

Dewar

this state¬
of humor, so let us consider it
as
debatable from the standpoint of
being supportable in fact. // / / >
Must we admit that there is no
higher professional or working
standard in the investment
merchandising field than there was in
that unspecified period "some
years back"?
This is faint praise for
the excellent work done all over
the country by the Better Business
Bureaus.
Is it an admission that Federal
laws have been too few
and too late to
keep up with a growing fringe in the financial com¬
munity?
Have registrations of firms and
firm, personnel, failed to
reduce that fringe?
Have, the efforts of the National
ment

arouse

latent

sense

new

Action

/around

fall

$3,500,000,000 only
^

as;

total in

ahead,

action
be

bonds

war

likely
the

ease

•

■

of
the

the

months

that

further

situation

/y-.y/

„

will

as war¬

//.;//•-. /'/ "■//,

It All Depends

;'"
i

While it cannot be said that in¬
vestment

underwriting firms have

enjoyed the
the

extreme

dullness

months, the degree of

summer

Satisfaction is readily
operating results.

linked
-

Z If earnings have been running
along everything seems to be all
right, but if the going has been
tough then the air is a bit bluer.
One

the

larger houses, ac¬
cording to a spokesman, has been
operating
right
along
in - the
"black" and has prospects of

con¬

tinuing so over the balance of the
year. This company, however, has
a good
day-to-day, or "bread and
butter" business

it.

■'

•

the trade calls

"■

FRED

yours,

KIRTLAND

DEALER No. 51

con-,

excess

undertaken, when and

ranted.//

when at leasfa few houses of
substance set up temporary,
back-room,
batteries of telephones for the
purpose of selling on daily balance
stocks that could scarcely have been
sold without manipulative con¬
trivances.
Nor yet during that period when
earnings and financial
statements were denied the public until
"insiders" had taken finan¬
cial advantage.
Nor when new securities were retailed
by salesmen
of firms which never had the
advantage of

dependable information
concerning the securities they were selling such as is now
required by
prospectus.
Nor yet when many houses of
substance were selling
holding company securities at prices bearing little relation to
intrinsic
values or were selling shares in stock
pools under the dignified label
a

investment trusts

estate

to be
substantial purchasers of Govern¬
ment

manner.

Pa..',/////:/>///-///;//;'//:^';/•:/./;■;/;>//:•"//■/'.'■//■ -'•'-

Article 1, Section 1 of these by-laws will not
affect
Since

this

business

materially.

was started about three
years ago by Mr. L. C.
sole trader, and since under the names of
L. C. Jamieson
& Company and Harold McClure
and Company, we have
always had
our customers remit for
securities direct to our bank here and to
ship to that institution any securities that we
might have taken in
exchange for others.
At no time have we been custodian
of cus¬
tomers' funds or
securities, not because any regulatory body told us
not to but because common sense
dictates that this is absolutely the
best policy to follow, irrespective of net worth
or
invested capital.
As presently constituted, our business
employs only a nominal amount
of capital in the business as such and
relies for its credit upon the
resources of Mr. L. C.
Jamieson, which resources are substantial. It
would be a simple matter for Mr. Jamieson
to transfer to the partner¬
ship a sum in cash or its equivalent to bring us well
within the
proposed amendment, Article 1, Section 1, either A or
B.
Therefore.
I believe that I speak
impartially when I give you my impressions
of this Article:

Jamieson,

that

every

trade he makes will have been scrutinized
carefully by

Lacking capital, he cannot afford to take chances
and,
quently, should be more conservative than the fellow who has
to burn.

were

pushing the sale of sub-standard real
foreign bonds concerning which few
'

past."fy/y/// •./,•' /•/
v

Many of
before

ever

believe the public is being better served
today than
tide of professional responsiblity is

and that the

conse¬

capital

rising

under the pull of uniform practice
If we could devote
requirements.
energies to the further development and extension of
this phase
of the security;
business, involving, as it does, all investment firms
from the largest to the
smallest, the benefits would be far-reaching
and substantial as compared with
the minor issue of minimum
finan-j
cial requirements which means much
to a few and is
discriminatory
if not Unconstitutional.
What safeguard is there is a
$5,000 capital
requireihent for large firms whose
our

compared

those

regulation in such
honest-minded

of
a

small

firms?

manner as

member

the

running expenses
Why swing the

substance"?
I

was

;/,/
told

recent
a

are

enormous

pendulum

to expel one single experienced and
NASD whose position is solvent,

simply because his cash position does not
qualify him

bureau, addressed to
driven out of business

question, is actually the chap
who is out on the
firing line developing customers that absorb the
offerings of the big man. If he has sufficient character and
standing
to get a reputable bank to clear
his securities for
him, it is dollars to
doughnuts that he will not go South with
any customer's funds and
him.

distributing

I dislike to resurrect these
ghosts of the past, but it is the recol¬
lection of these things together with
spectacular failures and mis¬
behaviors of a few houses of subsance that have
"made us a rather
unpopular member of society in the

as a

The small fellow, who will
probably be
by the enactment of the amendment in

bonds

knew very much.

Harold R. McClure of Harold McClure &
Co., Warren, Pa., sent
following letter to Nathan S. Parker, District
Chairman of

NASD, Pittsburgh,

slated

are

-/back, y/.^;///'///- ^./////r/' /]/;'v'/.
."/Since banks

such

Very truly

short time

Labor

are

the

reserves

$150,000,000

trasted with

in
'

our

predicated

was

monies in trust

excess

//.:-//

precipitate

Unions.
It is well known that
Unions thousands of able-bodied
men who
desire work cannot obtain same without
first paying an
exorbitant fee to the Union for the
privilege of obtaining a job.
This practice in the Labor Unions and the
Minimum Capital Amend¬
ment smack of the same beaurocratic
thought and principle.

through the policies of

or private businesses who
accept public
required by law to maintain a minimum
capital.
No other industry under American
Constitutions rights is regulated

to 24%, thereby making
available to these centers some

$400,000,000
of
/funds. :
/
'

Only those corporations

peak,

confined to

were
some

worm-hole in

Mr. Dewar says:

„

-■

problems"

for making the

excuse

other small dealers, further
lessening the
Association.
Association of
If this seems good to the
Securities Dealers, Inc., these last years fallen so far short that
Governors, why would it not be even better still for
the
conditions are worse than at soihe
unspecified ^period "some ?
industry to require $25,000 net capital by all' members of
year^f
the Asso¬
back" when, perhaps ho form of
npember firms and listed securi¬ ciation, and thereby better protect
regulation was needed? / This is a
customers and improve the stand¬
ties^/-;^ y.
humiliating
confession for our Association
/yyr/;// ards of the industry,
Chairman, Mr. Dewar, to
simultaneously causing additional small dealers publicize and I
emphatically disagree, for I am sure that many of
to dissolve business,
Bolstering Banks' ■ Reserves *.
1
thereby lessening the problem of the Board of us do not share
that
confession.t
y
1
With excess reserves of banks Governors, and so on in succeeding steps, the remaining members of
V*. >If; Mr. Dewar's
memory: is far-reaching, in what period would he
in, the New York area falling; to the Association gradually getting the investment'industry recoiled
place those halcyon days of houses of
substance, when, perhaps, no
the lowest levels since the days pretty well within their own control, thereby
eliminating fair but regulation was
necessary?
numerous competitors.
Surely not early in" the century when
of World War One, or
t/-> h - i' 4
thereabouts,
/*//////
-, L/i/. *'
- /
4 /" /J" '■ / bucket-shops were
playing
against the public and "Tom'L Lawson
the Federal Reserve Board finally
This proposal of the
Minimiiiii:i;NeUCk£ital%f; $5,1)00 is Us uri-^i any many houses of substance were
acted under its new powers to re¬ American in its conception and in its
operating on what has been
results as some of the present termed a "casino"
basis.
Nor yet later, during the first world
plenish dwindling surplus funds practices and policies of our Labor
war,

taking banker> bad /capitulated
and arranged'for offering under
the
Exchange's
rule y covering

Mr. Dewar's
report, published in the last issue of "NASD
News,"
may be entirely acceptable to
many members of the Association hut
his expressed welcome
for a "lively debate about our

with

:t-V

COMPANY:/"v„;

DEALER No/52
A

seem

yours,

;II. R. McCLlIRE,/HAROLD '^cCLlJRE

cumulative preferred stock of

$100 par. The public sale is now
expected shortly after Labor Day.

cost

adoption of the minimum capital require¬

According to the emphasis being laid upon
protection of the
interests of customers, it would seem
that the attitude of the Board
of Governors in its zeal to
protect the investor forgets the fact that the

Into the Southwestern Public Ser¬
vice Company.
the

/•

.//.'.} ''/'/■
letter

from

representative of

'/■ "•■•/ /
an
a

"a house of

important

Washington

of small

group

business

containing the following rather disconcerting statement: "You
appear to be in the position of suffering from
toothache but unwill¬
ing to have the tooth removed."
If the personnel of the firms are

men,

needed for

the

their value

war

that

effort, why not let the transition be based
effort and

not

their

size

There will he few houses of substance if this
sure that we are both
forthright and

war

practical in

to win.

financial rating?

is lost.
our

Let

determination

It is the pendulum of our war effort that needs
that extra
push and should command priority over lesser controversial
expert
mentation of doubtful merit.

...

Thursday, August-20, 1942

FINANCIAL CHRONICLE

THE COMMERCIAL &

630

Calendar of New Security Flotations

% ' and 140.000 shares Cumulative Preferred
Interest rates on the
stock; of Cumberland County at; Stock, $100 Par.
THE
TRION COMPANY
'
^ 130% and 110%,-respectively, all of which Bonds and Debentures, and "the dividend
Following is a
The Trion Company has filed a registra¬
shares are to be called for redemption by i rate on the preferred stock, will be sup¬
tion
statement
with
the SEC for
6,000
Cumberland County prior to the proposed, plied by amendment
ments were filed less than twenty days ago.
Address—25 8. E. Second Ave.* Miami,
shares of 7% cumulative preferred stock,
merger and converted under the agreement;
Fla.
are
par value $100 per share.
of merger into an obligation of the com¬
to
on
Business—This subsidiary of
American
Address—Trion, Georgia.
pany to deposit the redemption price there¬
tion statements will in normal course become
Power
& Light
(Electric Bond' & Share
Business—Company
manufactures, fin¬ of in trust for the holders of such shares.
System) is an operating public utility en¬
ishes and fabricates cotton goods
in its
The amount to be utilized in such redemp¬
is twenty
after
except
case
secur¬
plant at Trion, Ga.
tion will be supplied by amendment.
I gaged principally in generating? transmit¬
ities of certain foreign public
Underwriting—Courts & Co.,
Atlanta,
Additional net proceeds from the sale of ting, distributing and selling electric en¬
ergy
(also manufacture and sale Of gasf,
serial notes and common stock will be used
Ga., is named principal underwriter. Other
become effective in seven days.
serving - most of the territory? along the
underwriters will be named by amendment.
to acquire 300 shares of the common stock1
east coast of Florida
(with exception of
Offering—The 6,000 shares registered are
and $6,000 face amount of 5% debentures
These dates, unless
are as
the Jacksonville area), and other portions
issued and outstanding and are being of¬
of Aug. l; 1936, due Aug, 1, 1956, of Nepsco'
of Florida
P.M. Eastern Standard Time as per rule
fered for the account of a corporation and
Services, Inc., and 10 shares of common* of
Underwriting ana uttering—The securt- i
individual stockholders.
The price to be
Nepsco Appliance Finance Corp. $9,100 and
ties registered are to be sold by company
Offerings
paid for the stock by the underwriters and
to acquire all of the 650 outstanding shares
under the competitive bidding Rule U-50
the
offering price to the public
will be of the no par capital stock of New England
ing.
of the! SEC's Public Utility Holding Com*
supplied by amendment.
. «,•;
Pole & Treating Co. $110,000. ■
pany
Act,
Names of underwriters and
Proceeds—The registrant is not to re¬
Balance of net proceeds of the series M
price to public, will be supplied by postceive any of the net proceeds which will
such securities, company will file a postbonds, the serial notes and common stock
effective amendment to registration state¬
<
'
THURSDAY, AUG. 20
go to the selling stockholder.'
.
effective amendment stating such terms
will be used to redeem at $120 per share
ment
•
;
Registration Statement No. 2-5035'. Form
Proceeds—All the proceeds from sale will
or
otherwise retire on or before Oct. 1,
NU-ENAMEL CORPORATION
Proceeds
will
be
applied
follows:
S-2.
(8-13-42)
be received by the Gamewell Company.
1942, an unspecified number of shares of
Nu-Enamel Corporation filed a registra¬
$53,170,000 to redeem at 102 W,. the $62,T
7%
preferred
stock
of
the
company
and
Registration Statement No. 2-5030. Form
tion statement with the SEC for 106,500
000,000 of company's First Mortgage 5s of
S-2. (8-1-42)
for
the
purchase
and
construction
of
shares of common stock, $1 par value
1954; $15,693,370 to redeem at $110 per
Holtzer-Cabot Electric Co. filed on Aug.
facilities for the carrying out of the com¬
Address—8 South Michigan Ave., Chicago
DATES OF OFFERING
share,
the
142,667
shares of company's
10 an amendment to Its registration state¬
pany's business.
•;
.
*
Business—The company is engaged in the
$7 preferred stock, no par.
Further d«r
UNDETERMINED
ment
in
which
it
changed
the
registration,
Registration
Statement
No.
2-5024.
Form
distribution
and sale of enamels, paints,
tails
to
be
supplied
by
post-effective
We present below a list of issues
as amended,
A-2. (6-29-42)
to cover 8,250 shares of com¬
amendment
v
varnishes, linoleum finish, stains, polish
mon stock, par $100 per share.
Whose
Central
Maine
Power
Co.
on
Aug.
5,
1942,
According
registration
statements
were
filed
and kindred
lines, which are principally
Registration Statement No. 2-4849.
Form
filed a request with the SEC to withdraw
twenty days or more ago, but whose
distributed Un.der the trade name "Nu- to the amended statement E. H. Rollins &
A2.
(9-17-41)
/
-■ ;
trust indenture data in view of decision to
Sons, Inc., underwriter, will purchase from
offering dates have not been
deter¬
Enamel."
The products sold by the com¬
Amendment filed July 31, 1942, to defer
mined
or
are
unknown to us.
Gamewell Company, which owns all of the
sell
the proposed issue of $5,000,000
10- effective date
pany
are
manufactured
by Armstrong
' *
stock outstanding, the 8,250 shares of com¬
year serial notes at private sale.
On July
Paint & Varnish Works, of Chicago, under
mon
for an
aggregate purchase price of
16,
1942, company filed an amendment
HAMILTON WATCH CO.
contract in accordance with the company's
CALIFORNIA
UNION INSURANCE
CO.
with the SEC
to withdraw the proposed
$1,225,000.
The Gamewell Company will
formulae and specifications
Hamilton
Watch Co. filed registratiott
California Union Insurance Co.
filed a notes from registration.
receive all of the proceeds from the sale
.
statement with SEC for 39,382 shares 4 V»%
Underwriting—Floyd D. Cerf Co. is the
Amendment filed Aug. 3, 1942 to defer
of
the
shares which
are
already issued
registration statement with the SEC for
cumulative
preferred
stock, $100 par
principal underwriter.
'
and outstanding.
The H-C Company has 29,659 shares common stock, $10 par value effective date
Address—Lancaster."Pa.
* **
Offering—The principal underwriter
Is
Address—San Francisco, Calif.*"
been advised by the underwriter that the
:
Business
— Company
manufactures and
granted the option, until close of business
EASTERN COOPERATIVE WHOLESALE,
latter has entered into an agreement with
Business—Engaged in the underwriting
sells various models of high grade (17 to
Dec. 31,
1942, to, purchase at $1.50 per
/
,NC
: - .■
; "V ■'
a
of
fire, automobile and other forms of
single purchaser to sell all of the com¬
23
Share all or any part of 72,500 shares of
Jewel) pocket and wrist watches for
insurance
Eastern Cooperative Wholesale, Inc., filed
mon
stock to such purchaser,
after the
men
and wrist watches for women
common stock of the company from C. L.
a
registration statement with the SEC foi
registration
statement becomes effective,
Underwriting—Paul H. Watson is named
Underwriting and Offering—Company la
Lloyd and all or any part of 34,000 shares
for an aggregate price of $1,375,000, upon
$150,000 4%
registered debenture bond*
principal underwriter; Don B. Wentworth
making a conditional offer to holders of Its
from Gladys Lloyd.
There is no firm com¬
the terms and subject to the conditions set
maturing July 1 of each year from 194*
may be an Underwriter
*.
■
32,054 shares of outstanding 6% preferred
mitment to purchase any of said shares.
forth in the agreement, one of which being
to 1956, inclusive (exclusive of 1950). Com¬
Offering—The common stock registered
stock of the privilege of exchanging such
The
principal underwriter has agreed to
a representation
Will be offered, to the public at a price
by such purchaser that it
pany
states
that $50,000
in. maximum stock for 33,054 of the 39,382 shares of
pay a finder's fee to American Industries
is purchasing such common stock for its
of $22 per share
principal
amount
which'shall
mature
in,
4Va% preferred stock on basis of one share
Corp., Detroit, Mich., in the amount of 5
own
account for investment and not with
Proceeds will
be used for additions to
1944
and" $30,000
is maximum
principal of 4% % preferred stook, plus $1.50 (equal
cents for each share of common stock pur¬
amount which shall mature in any one of
any
present
intention
of
distributing
it.
capital
and
surplus
to
current
quarterly
dividend
payable
chased by the principal underwriter from
If the purchaser should subsequently de¬
Registration Statement NO. 2-4992. Form the other years
Match 1, 1942, on one share'Outstanding
the selling stockholders.
Offering price to
termine to make a distribution of part or
A-l
Address—135 Kent Ave., Brooklyn, N. Y.
(4-30-42 San Francisco)
;
6%
preferred
stock),
plus
an
unstated
the public will be supplied by amendment
all
of such securities,
the H-C Company
Business—Wholesale dealer in groceries
Registration effective 1 p.m. ESWT on
amount idifference between the public ot¬
Proceeds—The shares to be offered are
will file a post-effectment amendment dis¬
June 6, 1942.
allied
,
;
products, including, among other
tering price of one share
preferred
already issued and proceeds will go to the
related activities, warehousing and pack¬
closing the terms of such distribution
stock
and $105, the redemption price of
Individual sellers of the shares
CAMILLA
CANADIAN
MINING
CORP., aging
the 6% preferred), for each share of ouU
Registration Statement No. 2-5029. Form
LTD.
Underwriting—No underwriter named
MONDAY, AUG. 24
standing 6%. preferred stock.
Exchange
A-2. (8-1-42)
Camilla
Canadian
Mining Corp., Ltd.
offer expires Jan. 22, 1942.
Offering—The securities are being sold
Any shares of
Amendment filed Aug. 14, 1942, to defer
POTOMAC ELECTRIC POWER CO.
filed a registration statement with the SEC
by the Cooperative directly to its stock¬
4Va%
preferred not issued Under the ex¬
effective date.
Potomac Electric Power Co. filed a regis¬
holders
and
friends
interested
In >. the
covering 500,000 shares of capital stock, par
change offer, plus the 6,328- shares not
tration statement with SEC for $5,000,000
value $1 per share
reserved for such exchange Offer, will be
cooperative movement without the inter¬
GENERAL ELECTRIC CONTRIBUTORY
,
first
mortgage bonds, 3V*%' series, due
Address—Toronto, Ont.
offered
to the public, at a price to be
position of any underwriter, dealer, broker
PENSION TRUST
Aug. 1, 1977
Business—Mining and milling
or salesman,
at 100.
No commission will supplied by amendment.
Harriman RlpleJ
General
Electric
Contributory Pension
Address—Potomac Electric Power Com¬
be
Underwriting—Enyart Van Camp & Co.,
& Co., Inc., Philadelphia, is named prlnpaid to anyone in conjunction with
Trust (W. R. Burrows, I. D. LeFevre, J. W.
pany Building, 929 E Street, N.W., Wash¬
such sale
1'•;
' '■
•Chicago, underwriter
cipal underwriter; other underwriters will
Lewis, R. C. Muir, D. E. Peck, W; W. ington, D. C.
" • "
"
Proceeds—Will be used to repay certain
be supplied by amendment.
Offering—Offering price Is 25 cents per
Business—The company is part of the
Trench, trustees), has filed a registration
Proceeds
will be
used *tb
redeem, od
share, U. S. funds
private loans and also, to reduce. certain
statement with SEC for $100,000 (estimated
North American Co. holding company sys¬
March 1, 1942, at $105 per share, all out¬
development, exploration, accounts payable now outstanding for cur¬
Purpose—For
amount of employee contributions prior to
tem.
The
company
is, and intends to
equipment,
milling
plant and
working rent merchandise, thd balance to be used standing 6% preferred stock; balance for
Oct. 1, 1943.)
continue to be, principally engaged in the
...
for working capital
*
.
j expenditures in Connection With construc¬
capital
■ "i
^
Address—No, 1 River Road, Schenectady, generation, transmission, distribution, and
tion and equipment of plant additions
Registration Statement No. 2-5002. Form
Registration
Statement
No.
2-5013.
Form
sale of electric energy in
the District of
N. Y.
'
■
S-2. (5-27-42)
S-3. (6-15-42)
Registration Statement NO; 2-4926. Form
Columbia and in a limited contiguous ter¬
Business—Investing
the funds
of the
Amendment filed July 2, 1942, to defef
S2 (12-30-41)
Registration Statement effective 1 p.m.,
ritory,
largely
suburban
and
rural, in aff&r*f-"ioga! ftnfn'
4
trust which are received from participants
-Amendment to defer effective date filed
EWT on Aug. 1, 1942 as of 5:30 p.m. EWT
Maryland,
and
interchanges
electric
energy
and from the company.
Participation in
Withdrawal request filed Aug. 11, 1942.
Aug.
6,
1942
with a neighboring utility system
July 18, 1942
"
the trust is limited to salaried employes
Underwriting—No firm commitment to
entering the service of the company on and
HONOLULU RAPID TRANSIT CO., LTD.
CENTRAL MAINE POWER CO.
ELLICOTT DRUG CO.
:
purchase the $5,000,000 face amount of
after Jan. 1, 1936 and receiving in excess
Honolulu Rapid Transit Co., Ltd., has
Central Maine Powef Co. filed a regis¬
Ellicott
Drug
CO.
filed a registration
these bonds has been made.
As soon as
of $3,000 per year
filed
a
.
tration statement with SEC for $14,500,000
registration statement with the
statement
with
the
SEC
for
$350,000
'6%
practicable after the registration
state¬
SEC for 75,000 shares of 6%
first and general mortgage bonds, Series
cumulative
Underwriting—No underwriters
ment has become effective, the company,
debentures, due June 30, 1957.
.
,
,
,
convertible preferred stock, $10 paf; and
M, maturing July 1, 1972; $5,000,000 tenAddress—120
Cherry
Street,
Buffalo,
New
Offering—Interests of employe partici- pursuant to Rule U-50 of the SEC pro¬
shares
common
stock,
$10 par,
75,000
year serial notes, maturing serially on July
York \
'
■fints in pension trust
poses
publicly
to
invite
sealed
written
•
latter reserved for issuance on conversion
1 from 1943 to 1952, and 261,910 shares of
Business — Company
is a cooperative
proposals for the purchase of such se¬
Proceeds—All of said funds are to be
of the preferred stock
common stock, par value $10 per share.
wholesale
drug
company,
selling to...its
curities
Invested by the trustees,
Address—1140 Alspal St", Honolulu, Ha¬
and the income
Address—9 Green Street, Augusta, Maine
members
only,
all of
whom are retail
thereon
allowed
to
waii
:
■'
V
'
■'
accumulate,
for the
Offering—The names of the underwriters
Business—Company is an operating pub¬ druggists.
1 "
!
•/
and
the
offering price to the public will
Business—Company Is a public utility
purpose of making pension payments there¬
lic utility and engages in the electric, gas
Proceeds
$250,000 of the debentures
be supplied by post-effective amendment.
from to participating employes upon their
engaged
in
providing
urban
transportation
and
water business,
entirely within the Will be presently issued, . Approximately
service to the city
of Honolulu, rendered
retirement
Proceeds—Net proceeds will become part
State of Maine
$120,000 of this amount Will be issued to
by trolley coaches and gasoline buses
Registration Statement No. 2-5031. Form of the company's general funds and will
Underwriting—The bonds and the notes replace the outstanding 6% preferred stock
A-l. (8-1-42)
Underwriting—None
be used to increase company's generating
which Is being eliminated.
Approximately
will be sold under the competitive bidding
Offering—The preferred stock is offered
capacity and other fixed capital expendi¬
$48,000 additional will be issued to retire
rule of the Commission.
Names of under¬
to company's common stockholders of rec¬
HOLTZER-CABOT ELECTRIC CO.
V
tures.
In June 1942 company received $3,buying privilege deposits with the company ord April 30, 1942, for subscription at $10
writers and amounts and offering price td
Holtzer-Cabot Electric Co. filed a regis¬
000,000 toward such purposes from the sale
The balance,
approximately $78,500 after
public will be supplied by amendment
per share, on the basis-of three shares of
tration statement with the SEC for 3,250
of 30,000 shares of its common stock.
The
expenses, will become additional working
preferred stock for each five shares of
shares of 5%
cumulative preferred stock,
Offering—Public offering price
of the
company's fixed capital expenditures for
capital' •1
;
common stock,
to be evidenced by trans¬
bonds
and
notes
will
be
supplied
by
amend¬
par $100 per share, and 100,000 shares of
1942
are
estimated
at $8,691,000.
Sub¬
Offering—The new debentures will be ferable warrants which expire May 29,
common stock, par $5 per
ment.
The 261,910 shares of common are
share
stantial further expenditures for such pur¬
priced at 100 and accrued interest
1942.
Such"' of the preferred
stock not
first to be offered to the holders of the
Address—125 Amory St., Boston, Mass.
poses will be incurred in 1943.
The more
Registration Statement No. 2-5026. Form subscribed to on or before May 29, 1942,
company's outstanding common stock and
important include installation of turbo¬
A-2. (7-7-42)
Business
Business
conducted
or
not sold
on
or
before June 30,
1942,
by
the
6%
preferred
stock
for
subscription
at
$10
generator units and related equipment
Amendment filed July 23, 1942 giving to
will be retained by the company, subject
company falls into two classifications: the
per
share in accordance with their pre¬ members of the
company only the privilege
Registration Statement No. 2-5032. Form
manufacture of electric motors and gen¬
to
issue and
sale, either at private or
emptive rights.
New England Public Ser¬
of exchanging the 6% cumulative preferred
A-2, (8-5-42)
*
erators
and
the
manufacture of
various
public sale, at not less than $10 per share
y
vice Co. has subscribed for and agreed to
stock, par $50, for the debentures, on a
Proceeds will be applied to reduction of
types of electric signal equipment.
take the 261,910 shares, less any shares
J. D. GILLESPIE, trustee for Cleo George
dollar for dollar basis and or exchange for
outstanding
bank loans, aggregating $1,as may be subscribed foi? by stockholders,
Underwriting—E. H. Rollins & Sons, Inc.
deposits made by non stockholder members
J. D. Gillespie, trustee for Cleo George,
650,000
1
Is the principal underwriter for the com¬
and to pay therefor in
cash at $10 per
Amendment filed Aug. 7, 1942, to defer
has registered with the SEC certificates of
Registration
Statement No. 2-4973. Form
share provided
mon shares
the proposed merger be¬ effective date
' '
' "
S-2 (3-30-42)
■/
deposit in trust of direct obligations or comes effective
Offerings—The! company is controlled by
obligations guaranteed as to principal and
Proceeds—Statement says that prior to
the Gamewell Company.
The securities of interest
EQUIPMENT FINANCE CORPORATION:
by the United States, deposited by
INTERIM FINANCE CORP.
1
the issue of the securities now registered,
the company owned by Gamewell at date
Equipment Finance Corporation has filed
J.
D.
Interim Finance Corp. filed a registra¬
Gillespie, trustee, with Mercantile
Cumberland County Power & Light Co., a
of prospectus consist of
a
8,250 shares of National
registration statement with the SEC for tion statement With the SEC for 39,912
Bank, Dallas, Texas.
Number of
common
public utility
incorporated in Maine in 5,000 shares of common stock, no par value
stock, par value $100 per share,
certificates of series
A is unknown, but
shares class A stock, $25 par; and 25,232
1909, will be merged into the company and
Address—Chicago, 111..
^
being all of the stock of the Holtzer-Cabot
shares common'stock, $1 par
aggregate
amount
is
not
to
exceed
Central
Maine
will
thereupon
acquire,
Business—Short term financing etc.
Company outstanding on same date.
Upon
Address—33 N. La Salle St., Chicago, 111.
$1,500,000.
consummation of a proposed recapitaliza¬
pursuant to an agreement of merger, the
Underwriting—No underwriter named
Business—Pfiihary function of company
Address—Gulf States
Building, Dallas,
tion plan the outstanding securities of the
business and all the rights, powers, etc., of
Offering—Issued prior to registration for is to loan
money to enterprises whose debt
Texas.
Cumberland.
After the merger has be¬ cash and property 2,007 shares at $100 per
company will consist of 3,250 shares of 5%
and/or capital structures are being adcumulative preferred stock, par $100 per
Business—Investment trust.
come
effective, the business of the com¬ share, and 2,993 shares are to be publicly
Justed or reorganized by Its wholly-owned
Share, and 100,000 shares of common stock,
offered at $100 per share
pany will include also the business, fran¬
Underwritirtg^-Sponsored by J.! D. Gil¬
subsidiary, H. M. Preston & Co. A second-•
chises and properties of Cumberland, the
Proceeds—For trucks, land, building ad¬
par value $5 per share, all owned by the
lespie, trustee, depositor
.
ary function is to loan money, with funds
Gamewell Company.
The underwriter has
separate
existence
of
which will have ditions, improvements and garaging facil- not used in .its primary function, to pro¬
Offering—To be sold only to banks at
an

TUESDAY, SEPT. 1

list of issues whose registration stateThese issues

effective, that
in the
of the
authorities which normally

filing

days

„

which the registra¬

the dates

grouped according

unspecified number of shares of 5 Vz

preferred

otherwise specified,
of 4:30
930(b).
will rarely be made before the day follow¬

„

....

.•,

•

—

...

entered

into

agreement

purchase

from Gamewell at a

price of $9 per share,
100,000 shares of common stock.
The
company has been advised by the under¬
the

writer that

with

agreement
all

the

for

the latter has
a

common

single

stock

aggregate

price

entered

respect
ferred

such

purchaser,

$1,050,000

the

to sell all of the preferred stock

its

it.

same

account

own

any

termine

present

purchaser
to

made

for

investment

intention

distribution

and

not

of distributing

subsequently

should
of

any

de¬
of

with

the

the financing in ac¬
plan
recently

merger

with' the commission will be

used

proceeds of the series M bonds will
to pay principal and premium, in
at 105% on Oct.- 1, 1942,
of $1,494,000 face amount of first mort¬
gage, 4%
series, due 1960, of Cumberland
Power, $1,538,0.60; to pay. principal and
premium in the redemption at 105Vz% on
a date in 1942 to be announced of $9,275,000
face
amount first
mortgage bonds,

registered with the SEC certificates of
in

trust of

direct

ment

posited

United

guaranteed

Gillespie

States

Govern¬

obligations de¬
with

the

Mer¬

cantile National Bank. Dallas. Texas. Num¬

ber of certificates of Series B to

unknown,
exceed

but

aggregate

be issued

amount

not

$250,000

Address—Gulf

States

Building,

Dallas,

Texas.

used

the

redemption

1966
of Cumberland
County $9,784,348 and to pay bank loans
made by the company which were incurred
for
the
purchase
and
construction of
3'/2%

series,

due

Business—Investment trust.

facilities

Underwriting—Sponsored by depositor.
Offering—At face value

proceeds of the serial notes and the
common
stock
will be
used to
pay par

Proceeds—For

investment.

Registration Statement No. 2-5034. Form
C-l.

(8-5-42)

$2,650,000.

Net

and

to
ber

premium in the redemption on a date
1942 of an unspecifed num¬

be fixed in
of

vide

No. 2-5023. Form

(6-27-42)

11, 1942, to defer

filed Aug.

Amendment

preferred stock and

Equipment
13

Finance Corp.

filed on Aug.
state¬

amendment to Its registration

1,238
$100

which

the

at
is
above shares, to be publicly

shares nf- common, no par value,
share and offer of rescission

per

being made re

Offered at $100 per

$299,300.

amended

includes

total

facilities

for

share, 2,993 shares for
Purpose of issue as
, horses,
and
of 1 horse-drawn

wagons,

operation

vehicles.

intermediate

borrower

the

financing

the financial positions

change

general

avenues for longerborrowing from customary sources
■
Underwriter—H. M. Preston & Co., Chi¬

capital markets open

YlnKAwfiivoo

rtiiA

Grh'1

111.,

cago,

the

sole

underwriter.

underwrit,lng commission is $8
Amendment filed,
effective date

July* 30,
••

■

per

Th®
*

unit

1942 to defer
.

stock is to b®
at'a price of
$110 per unit. With at least the first 900
units,
there will be included with each
Offering—The

sold

unit

units

class
4

shares,

shares of common

company

reserves

stock;

the right to

thereafter

reduce thd

number of common shares to be included In
each

POWER A tlGHT CO,
Florida
Power
& Light Co.
registered
with
SEC
$45,000,000
First
Mortgage
bonds, due Oct. 1, 1971; $10,000,000 SinkFLORIDA

IjIiim/I

"interim"

enterprises until

term

proposed offering" is
stated as follows:
Sold prior to registra¬
tion
to employees of Curtiss Candy Co.
ment

effective date

follows;

GILLESPIE, trustee for Cleo George
Gillespie, trustee for Cleo George,

Registration Statement
S-2.

Net

J. D.

deposit

purchaser for an aggregate
sale price of $325,000 or $100 per share
upon the representation by purchaser that
it is purchasing such preferred stock for
with

filed

(8-5-42)

that

al¬

it ICS

proceeds from

Registration Statement No. 2-5033. Form
C-l,

has

rently With the sale of the common by the
underwriter
to
the single
purchaser re¬
to

Net

cordance

company

the latter has no agreement With
to the proposed sale of the pre¬
stock, Gamewell proposes concur

ferred to,

Proceeds—For investment.

purchaser to sell

$10.50 per share,
The registrant
has been
advised by Gamewell

though

into

ceased

face value

unit

class

stock

Proceeds will be used for

working capital
Registration Statement No. 2-4968. Form

A-l.

(3-18-42)

Amendment filed
effective date

Aug. 17,

1942, to defer

...

Volume 156

LONE STAR

Lone

STEEL

Star

CO.

SEC

THE COMMERCIAL & FINANCIAL CHRONICLE
1953; to pay 6%

„i.

Co/.' filed

Steel

with

statement
••

-Number 4100

for

000 >to

registration

$500,000

Co.,

bonds

stock

[

th>

;

are

Underwriting
in

named

—

underwriters

ftt

$10

of.

share.

per

stock

common

the

SEC

(5-8-42)

Registration
EWT

p.m.

amendment

17.

SOUTHWESTERN

Southwestern

registration

effective

PUBLIC

SERVICE

Service
with

statement

;

sold

Co.

the

SEC

serial

,tive

of 6%

preferred ,stock, $100

dumula'

value

par

Business—This

sidiaries .are

...

company

and

sub¬
thf

iix

generation,1 transmission, distribution and
sale
of
electricity,^ serving certain com¬
munities in Texqs, New Mexico, Oklahoma,
Louisiana, Arkansas and Arizona.
Undei
a

integration ; and

plan

simul¬

effectuate the

following transCommunity" Power &

actions: Merger pf
Light Co. and General Public Utilities, Inc.
(the two present parent companies of the
company)
into the company; liquidation
,

Texas-New

Mexico

capitalization

and

Utilities

partial

Co.;-

re¬

liquidation

Public Service Co.;"purchase of Pan¬
handle Power & Light Co., Cimarron Utili¬
ties
Co. and Guymon Gas Co.;
and re¬

Gulf

funding of

the

debt

the

tion

the

entire

outstanding

funded

company Itself.
Upon comple-.
transactions involved in fore-

going, it is expected that the company will

have

no.

parent

•

Underwriting—Dillon, Read & Co,, v of
York, is tne principal underwriter;

names
of the other underwriters
,!be supplied by amendment

the

Offering—The
6%

bonds,

serial

notes

from

added

the

sale of

the

securities

new

company's

the refinancing of

funded

standing

the company's out*

debt

(3-31-42)

filed

Amendment
Hft l"#*

filed

statement

given

are

its

filing "the

Electric

Union

EWT July

July 28,

12, 1942-

Business—This

filed

Missouri

Co.

Scudder,

Stevens & Clark
Fund
Inc.I
a registration-statement -with
the SEC
40,000 shares of capital stock of; a pro¬
posed maximum aggregate offering price
of

$2,999,200

!" '

Address—10 Post

Office

Square,

-••■".i

Underwriting—No
the

issue has

firm

been

commitment

made

Offering—Approximate, date of proposed,
public offering is Aug. 1, 1942.
Shares are
Issued
1%.

the

then

The quoted

calculated

was

$74.98

used

net

price

the

asset

Louis,

subsidiary

is" engaged

Co.

energy;

_adjacent Missouri counties end.of T.ron*
Missouri adjacent, to

Osage hydroelectric plant

the company'#

*, •

■

„

Names

other

the

will

which

of com-

was

maximum
...;

—

(7-21-42)

little and too late.

pany's common stock are outstanding and
are owned by its parent, The North "Amer¬
ican Co., who will receive the entire pro¬
ceeds from the sale to the public of such
-shares

•

UNION

filed

Aug.

(2-2-42)

defer
m

LIGHT, HEAT AND POWER COM*

y;>.

Electric

filed

1942

Light,

Heat

25,000

and

Power

$100

Co.

par

Main

St.,

;

Business

Operating

—

electric

utility

number

which each
the

;;

The names

maximum
shares of such common stock
agreed to purchase were listed

"Chronicle" of

the

Feb.

26,

Underwriter

Columbia

—

Gas

Electrir

.Corp. ,u,
subscribe

.er

mon

(or

each

(or

each

holders

(or

unit.

receive

one

5/94ths

of-)

com¬

snare

basts,

stock¬

new

ipay

each

25/94ths

units

5/94ths

will

share held

held >t

$100,016

$3.32

per

Substantially all outstanding stock is held
by Columbia Gas & Electric Corp.
j
,

Proceeds—To

12,835,000

and

mortgage bonds held
associated companies, anu

construction

costs

(3-30-40)

2-4379.

UNITED
'

10,

first

GAS

CORPORATION

Gas

Corp.

due

registered $75,000,000
and collateral trust

': ''!

taxes

New York City

Business—Production and sale of natural

part of Electric Bond and Share Sys¬

common

Cuban

filed

Corp.

stock, $1 par

regis¬

453,691

•

the

ing

company

everal

sugar

its

owning

the

securities

operating subsidiaries engaged prin¬
in
the production of
raw
cane
and invert and blackstrap molasses

the

of reorganization

Sugar Corp. and cer¬
subsidiaries, is solely a hold¬

tain

cipally

plan

Dominican

Underwriters

Republic and
be

will

Offering—The

named

National

City

the

The

Cuba

former

supplied by amendment,
Pror<""*«—To

Piiblic

redeem

Service

names

to
will

at 99.34%

$28 P50.000

sold

due

ar?

owned

Inc.,! in dis¬

436.691

York,

New

shares;
parent

holder

the

17,000
shares
the shares

registered

of the outstanding

the

company,

public,

registered

the

company,

are

York,

com¬

and will
price to

be
be

amendment,
will

re-eWed

the selling

stockholders

Registration
Form

United

Debentures

extent

47.7%

stock

full

fiscal

ment

idle

the

they did

one—that

in¬

numerous

discover in
their

pre-

reinvest¬

funds had

been

too

Statement

No.

2-4923

date

•

corporate

trial averages has pulled away still
further from its recent
narrow

ground.—J. S. BACHE & CO.

normal

surtax of not

with

net incomes of less than

,'-Revision of the,
tax

and

tax

than

35%;

appropriate adjustments for

credits

to. define
excess

'••<-

can

wilk poqr

Treasury in excess of-the
Treasury's expectations.

the

Looking at the more immedite
picture, we note that the indus¬

Chamber

investors.

The

of operation

year

would

The

year.'

yield

only

operation

and

House

about

the

during

about

important

bill

$6,300,of

full

year

$4,000,000,fiscal year.
sources
of

000 during the current
new

proposed by Cham¬

were

Commerce

and
more

$25,000.

profits
provisions

excess

relief

accurately

true

profits.

"Rates to be imposed

upon

exr

profits must depend upon the

cess

balance

example,

the

tax

program—for

the rate to be im¬

upon

posed
upon
normal
profits,
whether only true excess profits
will

fits

tax

subjected

rates,

workable
is

est

pro¬

whether

plan

recommenda¬

our

adopted, then the highr

are

.practicable

imposed

excess

incentive-savings

enacted.

tions

and

should

rates

safeguard

profits, with
preliminary

upon excess

brackets at moderate rates.
"A retail sales

tax, without ex¬
emptions (except for direct Gov¬
ernment

purchases)

the

United

tive rate of 10%

effec¬

with appropriate

the

source,

all

same

basic
provisions of the
present
storing to groups of affiliated cor¬
except
for, a
few
minor
porations the privilege of filing law,
should be maintained.
consolidated returns, Mr. Hopkins changes,
voiced the Chamber's objection to Their efficacy lies in their per¬
the 2% penalty tax that would be manence.
*

levied

spokesmen, a retail sales tax
and a 5% withholding tax
spokesmen

Chairman of the Chamber's Com¬
mittee

Federal

Finance;

three other members of the

Albert

Hopkins,
of
Hopkins, Sutter, Halls & DeWolfe,
Chicago; Roy C. Osgood, VicePresident,; The
First
National
Bank
of
Chicago; and..; Paul E,
Shorb,\ of
Covington,
Burling,
Rublee,.. Acheson
and
Shorb,
Washington, D. C.
mittee,

•

The

Chamber

cised the House

failing

produce

for

witnesses
revenue

criti¬

measure

adequate

technical,

administrative

reference
mit

the

proposal to per¬
by individuals of

deduction

incurred

expenses

income

The

„!;. v-!!;'
*

❖

recommendations

the Committee, by Mr.
low in part:
"An

effective

made

Alvord, fol¬

incentive

vol¬

untary investment in Government
bonds

would

long

to¬

way

deficits out of private income and

savings, and (2) the admitted

ne¬

cessity for both corporations and
individuals to provide resources
now
against the dangers and to
the

meet

the

unforeseeable

demands

post-war period.

are

Specific suggestions for financing
war expenditures were:
"The maximum possible reve¬

specific proposals for

from

nues

of the
.

war

in¬

taxes for the duration

war.

definite

for

system

incentive

both

savings
individuals and

"Security issues designed to at¬
maximum

additional

bor¬

non-inflationary

as from individuals, insur¬
companies, trust funds, sav¬

type,
ance

ings

plan,

the

plans

and others for
'refund'

war

institutions,

"Avoidance

and

others.

three.

ments

tax

law.

Hopkins,

dealt

were

other

post¬

are

un¬

tremendous

tax

incomes

individuals

essen¬

the

who

with

Technical

corporation

were

pre¬

Specific
by

the

amend¬

income

15%

tax

25%,

losses of both in¬
dividuals and corporations only to
extent
of
capital gains, to

the

change in important respects the
definition

capital

gains

and

"The Treasury proposal to limit
capital losses to capital gains is
indefensible.
If the present sys¬
tem produces no net
revenue, the

capital gains tax should be aban¬
doned in favor of the British sys¬

tem,

under

which

permitted to collect

capital
time

gains,

only

and

from

revenues

the

same

prevent

reduction of those
by arbitrarily restricting
capital losses.

revenues

"Adoption
sions

eign

for

adequate

the

recognition
losses.

war

provi¬
for¬

"Repeal of the provision for
negotiation of
tained

war

the

Act

contracts

April

re¬

con¬

28,

1942."

Named Governor of Hawaii
President
tion

Hawaii,

Roosevelt's

Ingram M.
to

nomina¬

Stainback, of

Governor

the

should

many

the

war

rent

are

earned.

Financing

from the savings and cur¬

incomes

Mr.

strong

ob-

proached

of individuals,
in
borrowing, must be ap-

as one

nominated

Mr.

July 23.

im¬

individ¬
billions more

W. A. Tyson Dead

upon

provides can
be imposed if collected currently
incomes

President

$1,000,000,000 in

than the House Hill

The

Stainback

than
taxes

But

taxes and

proposed
voiced

Not

uals.
was

upon

current basis.

activities."

general program
by Mr. Alvord.

features

from

Territory of Hawaii succeeding
retroactively imposed
Joseph B. Poindexter, was con¬
upon individuals. The adoption of
firmed by the Senate on July 27.
the Ruml Plan to give
a
much Mr.
Stainback, a native of Somerneeded
opportunity to ' enact a
ville, Tenn., is now United States
well-rounded plan for taxing the
Attorney for the district of Hawaii.

posed retroactively

sented

gains

Treasury

workable, inadequate, and discri¬
minatory.

additional

non-war

the

'credit'

the reduction to the bone of

The

incentive

sort of

some
or

"The elimination of all non-es¬
sential Government activities, and

tial

alternative

liabilities

corporations.

rowings

the

single
months, to
a

specula¬
solving two vital problems:
tive, or trading, gains are taxed.
(1) The immediate need for fi¬
But the Treasury should not be
nancing a large part of current
ward

incentive savings plan.
"In contrast to the Chamber's

period

increase

proposes

losses, and to provide a five-year
carry-over
of net capital losses.
in connection
The adoption of a single reduced
non-business
holding period is a step in the
!'■',- .!
right direction.
"s!t
'
!

pro¬

purposes,

.Bill

substitute

and

changes in the income tax law af¬
fecting individuals were taken up
by Mr.
Shorb, with particular

duction, and failing to provide
adequate control over inflation.

war

holding

capital

convinced that both purposes can
be served by the adoption of an

revenue

House

to allow capital

and
com¬

"The

substance

amortization for defense facilities

with

Chamber's

Proposed changes in the stat¬
dealing with special five-year

nature.
!"■'.-

Ellsworth C. Alvord, of Al&
Alvord,
Washington,

ute

in addition to income iax.;-

were:

filed

upon
returns
consolidated basis.

of 10%

(12-29-41)

•Amenrtm<mt filed April 21, 1942, to defer
effective

the

to the $17,000,000,000
produced by the present law.

tract

amend-

"registered

and

New

Bank

remaining
aggregate

represents
mon

the

solution.

outstanding,

Company

Proceeds

Terms—Bonds will
f institutional
investors,
whose
Offering

Gas

Sugar

,42nd St.^ New York City
Business—Company, organized in
1932

supplied

Underwriters—None

;'be

Indies

pursuant

other

terfering seriously with
CORP.

statement with. the. SEC for

offered

tem

addition

;;

Aug. 13, 1942, to-defer

SUGAR

Address—60

the

Rector Street,

earlier

The Chamber, at the

11.

Aug. 11, it
was
said at the Chamber, would
yield
about
$12,000,000,000! in

date

rtiares of

City

1958

Address—2

filed

INDIES

already

mortgage

bonds

gas;

WEST

1942, to defer

date

United

Amendment

effective

Aug.

presented

program

Form

ment

•Amendment filed Aug.

will

instance—as

billions

time, made recom¬ compensation, dividends and in¬
terest paid to individuals.
mendations for Government bond issuances and debt
financing de¬
"The rate of tax upon
signed to hold inflationary bor-^
capital
rowing from banks to a minimum. jection to the proposed retroactive gains should be moderate—cer¬
It proposed measures to encourage application of the tax measure to tainly greater than the
existing
rate—and a shorter
the purchase of Government se¬ fiscal year corporations,
holding period
While
should
be
curities by corporations, individ¬ approving the House proviso re¬
adopted. Otherwise, the

for

■

Registration Statement No.

4-2

debt

current

repay

first

and

parent

1942, page

846

effective

develop that

vestors

impositions

And

sav**

effective.

collected

Committee

vord
;

•.oinpany

incentive

Finance
States

,The
-k

and

adjustments for articles of first
necessity. A 5% withholding tax,

Cincinnati

tax, be¬
Withholding

'A Federal tax program to raise
$12,000,000,000 in new revenue
for war purposes, as against the $6,300,000,000 provided in the bill
passed by the House of Representatives, was put before the*Senate

revenue

common

ttock

Co.

It may

market.

^.!!!J0% Sales Tax And 5% Withholding Tax

ber
Union

pany, The North American
the underwriters,. and

of-

must

{istered

tration

of Missouri, on Feb.
amendment to its: regis¬
tration statement, naming the underwrit¬
ers, 141 in all, who will publicly offer the
2 695,000 shares (no par)
common stock,
all of which are owned by its parent-com¬
Union

two-

declining
difference

1931-32

U. S. Ohamber Of Commerce Proposes

000,000
.

7,' 1942 to

",;v!

PANY*. *

West

Registration Statement No. 2-4940., Form

■

about

stretch

the

Two

after

period
a

between

depres¬

applied to

ent
i

■

V'..'!

Amendment

the

even

ent

It would produce about $8,000,000,000 additional during the pres¬

sheet

price

Registration Statement No. 2-5027. Form
A-2.

2,695,000

Offering—The

Co.,

underwriters

.supplied by amendment

But

limited extent,
have holders of liquid cash re¬
serves begun to realize this faet as

stand

collected at

normal

source

recently, and to

now

1942,

make-up

price

the proposed

aggregate offering price
Proceeds—For investment

New
.York, is named the principal underwriter.
&

Read

Underwriting—Dillon,

plus

at July 10,

per

estimating

value,

the

Retroactive

war

uals, and

Boston!!

Business—Investment trust
take

which it generates and pur¬
chases from
its subsidiaries, serving the
citv of St. Louis, Mo., and" portion of 5

INC.!

iiled

Ohio

of The North
primarily In the
transmission, distribution and sale of elec¬

■

V1
& CLARK FUND

Offering—Stockholders

-American

1942 as of 5:30 p.m '

SCUDDER, STEVENS

Mo.

ties

150,000

iki 100,000

possibilities of the stock

and-a-half-years
of
prices.
The striking

ginning Jan. I, 1943.

gradually diminishing in purchas¬
ing v power in < practically every
field outside of securities.
Only

the securities

can.be

sums

market apathy
eventually give way to a
quickened interest in the recovery

helieve,.should

If adopted, then sub¬

source,

avoided.

rate

Address—315 N. Twelfth Blvd., St.

600.00C"'1
186.00C

stantial
the

into the

pur.J indifferent to influences of
almost

Rollins & 5ons,;;Inc.iL*-. ;r.r .$874iQ00

EWT

p.m.

registration statement with the SEC for
-2,695,000 shares common stock, no par

tric

adopted.

showed

^rr-.J-;.4''!

July

registration

interest

kind.

'<.■& ;:'',Amouhl^

Address—4th

amounts

follows: ''

>"*.;•

effective date
Co.

UNION ELECTRIC CO. OF MISSOURI

•

-j

plus accrued interest from June 1. 1942.
,
Registration
Statement., effective
5:30

on-the
proposed issue of $18,500,000 first mort¬
gage and collateral trust bonds due 1972
"at 3%%.. Interestt rates on serial notes
wUl.be supplied by amendment
■ ; V

Biddle,; Whelen & Co._riii^^_; ;^v:100t00C
& ..Co
!
.100,000
Boennlng & Co.__j__„^L_j_i
^ 50,000
Bond & Goodwin,
Inc,a t40,000.
Offering price to the public will be 100

to defer

Service

amendment

■

Public

;

1942,

Aug.
,'

'Southwestern

1952*

Vallance

Registration Statement No. 2;4981. Form

for

Wright & Co., Ltd:__J_
Stroud & Cp., Inc
1
Graham, Parsons &

general

funds and will be .applied to effectuate the
various financial transactions involved in
the plan of integration and simplification,

A-2,

SEC

Proceeds

that

decisive

filed

Pistell,

ana

ment

and

Co.

with ..the

sion

market;
recently (April, to be ex¬
act) has the market made a fairly

defer

Mass...

stock, will be sold to the
public, at prices to.be supplied by amend¬

„

Steel1

Name

will

preferred

.Will

1942, to

....

-New

;

that

of the major underlying con¬
siderations in this market is the
one

for only

the

chased

Allen

proposes

afore¬

ings can also be made

any

belief

sideration.and,

trading range, and appears once
the
trend
of
security more to be aiming at the July
prices
and
price
trends
elsewhere
manufacturer
highs. It is also noteworthy that
*v. "
Proceeds—Payment of bank loan
;i over the past few years must soon¬
the rail stock average yesterday
Registration Statement No. 2-5003; Forir
er or
later begin to play an im¬
A-2. (5-29-42),.,."
again touched its previous high for
In
an "amendment
portant
role
in
shaping
stock
mar¬
filed by' the Lukensthe move, with excellent chances
Steel Co. covering the
registration of $2 ! ket psychology. Up to now, broad¬
200,000. 4%% sinking fund debentures tjhi<;
ly speaking, it has been dull and of going through into new high
underwriters, and

Holding-Company1 Act

| filed Aug.

year.

of. the

In yesterday's session,

Business—Steel

the

•

the pest possible
price."

sinking.fund debentures due
Address—Coatesville, Pa.

simplification

taneously with the consummation of the
.present,proposed ifnanefng.. the company
t

Lukens

proposed to be consummated under section
of

the

remain

daily.

its

engaged. principally

eithe

or otherwise,
or
offeredcircumstances shall dictate

obtain

statement

**.,■

Address—Dallas, Texas

■■t

renewal

LUICENS'STEEL CO.'-"

notes, due in equal annual, amounts
1, 1943, to Nov. 1,
1953, in*
85,000

shall

effective date

for

Nov.

elusive; and

public

bonds

highs for the

hard fact that the dollar has been

J$18,500,000 of first mortgage and collateral'
bonds, .due Feb. 1, 1972; $5,500,000

•from

its

agreements

•

Amendment

.trust
'

that

in order to

filed

com*,

"These purchase agree¬
Feb. 16, 1942.
The cor¬

end

to the

pur*

states:

privately,.,by

said

5:30!

1942

Public

the

further, extend the
with ,14 insurance

ments expired on
poration, intends to -continue, negotiations

Statement
June

agreements

at new

$75,000,000
of the company's first
mortgage and col¬
lateral trust3lU% bonds, due 1959.-'This

working capita)

'/;/

panies covering the proposed private sale
such insurance companies of

purposes>
S-2.

Corp. filed amendment with
Feb. 21, 1942,
stating that.it! had

warrants, and 50,000 shares whl< be offeree
ito the public at $10 per share
Proceeds will.be used for

stocks have been making new highs
fewer than thirty-five stocks solcP«>

Gas

unable

chase

(reserved fof issuance upon exercise of tltf

Registration statement No. 2-4997. Form

oeen

company,

75,000

(5-15-41)

United

ample, the sorcalled Ruml Plan
should receive most serious con4

our

impression, and has been for some time, that the market
is in a. broad period of investment accumulation.
Ud to the present,
such underlying demand has been
highly selective, rather than gen¬
eral.
One of the most noteworthy features of the
market's performanee .over
many weeks has -been the fact that batches of selected

Registration Statement No.- 2-4760, Form
A-2

stpck registered, 25,000 shares are

common

used

for capital'bx*

jampunt of the debentures will carry one
Warrant entitling the holder to purchase
shares

will

treasury

pendltures and possibly to pay accumulated
of $9,502,490 on
company? $7
preferred stock
■
',
.i
;

'.' Offering—The debentures will be offered
,to the public at 100; each $500 principal

Balance

.'It ;is

dividends

registration statement"

1961.

due

to1 reimburse

part

Address—Dallas; Texas
!, Business—Company; is engaged in
pianufacture of pig iron and steel

Sees Stock Market In Period Of Accumulation

& 8.;

purchase from United Gas-Pipe Line
$6,000,000 of its 1st
&' Cod.-' 4io.

1948;1,000> warrents tc
purchase common, stock; and .75,000 shares
par. cpmmon

demand note of $25,925,and Share; to repay

Bond

open account debt to E. B,

and to

(debentures;.' due

Electric

$2,000,000

5 ft

problem. For

ex¬

Warren

Allen
Tyson,
senior
partner of Warren A. Tyson Co.,
1528 Walnut

St., Philadelphia, Pa.,
suddenly on his way to his
office. Mr. Tyson had been in the
died

brokerage business for the past 34
years

and

firm since

had
1922.

headed

his

own.

THE COMMERCIAL & FINANCIAL CHRONICLE

632

BUY "

WISH TO

= WE

Purcell

South American

Exchange Commission held the second of a series of joint conferences

(.Listed & Unlisted)

BROS.

KATZ

these and

play

phases of the program, par¬
ticularly the group discussing uni¬
form financial reporting, but that

role,

formal

meeting

has been made

ress

Established,

New

Members

1920

HA 2r2772

Exchange PL, N.Y.

NY 1-423

TELETYPE

BELL

proposals were not yet
ready.
Mr. Purcell added that he
will call another general confer¬

What Common Stocks?

when,

ence

A leaflet

chase
and

discussing the kind of

stocks attractive for pur¬

common

under

the question' of
whether the assets-per-share fac¬
taking'-up

tor is

quirer" of Aug. 18
lowing:

important again
corporation taxes

new

"Despite anticipation to the con¬
Mr. Purcell said that the

trary,

is being distributed by Estabrook

question

Co., 15 State St., Boston, Mass.,

Boston

the

members

Stock

York

New

and

Copies

Exchanges.

of the

closure rule

over-

the-counter

dealer- brokers

had

been

not

had

sideration

& Co. upon

Estabrook

v'"

month.

Churchill And Stalin

from each
of the sub-committees, Mr. Pur¬
cell said in describing the meeting,
and

Prime Minister Winston Church¬
ill of Great Britain has concluded

-a

series of conferences in Moscow
Premier Josef

with

Soviet
the

Union.:

conduct 5 of

the

of the

Stalin

against Germany,; it was
disclosed in Moscow on Aug.; 17.
war

The United States

represented

was

at the talks by .W.

Averell Harri-

lend-lease administrator in
who was appointed by

man,

London,

President Roosevelt to accompany
Mr.

Churchill

trip.

the

Also

the meetings were a
of high American and Britr

attending
group

ish field and staff leaders.
The official Soviet communique

summed up the results of the con¬
ferences as follows:

number

decisions

were

reached covering the field
war

and

on the
Hitlerite Germany
her associates in Europe.

against

"In

this

both

Britain)
on

just

of liberation

war

Governments

with

all

(Russia

determined to

are

their

and
carry

and

power

en¬

until complete destruction of

ergy

Hitlerism and any similar tyranny
has been achieved.
44 47
;;

"The

discussions,

which

were

carried on in an atmosphere of
cordiality and complete sincerity,
provided an opportunity of reaf¬
firming the existence of the close

friendship and understanding be¬
tween
the
Soviet Union,
Great
Britain

and

America,
with

the

United

entire

Allied

States

accordance

relationships

ex¬

"The

reported that the British

American

groups

were

.Moscow four days, Aug. 12-15.

most

.<now

Co.,

Rand

Tower,

;

formerly

;

Dickey & Co., with which he

officer

report

of that committee

reached

general

with
The
have

of
in

agreement

policy as to what it will do
providing a report acceptable to
all of the agencies which must re¬

the first

will

ties

St. Paul in the first week of

Sep¬
//

Figures On
Recent Treasury Gtfs.

%%
Treasury Certificates of Indebted¬
offering of $1,500,000,000 of
of

ness

B-1943

Series

nounced

were

sub-committees

position
ports

make substantial re¬
accomplishments, no
meetings of the general
to

this

offering
7.

and

The books

and

certificates

open

were

the

preliminary

re¬

offering were given in

issue of Aug. 13, page

our

Aug.

description

;-A

sults of the

connection with

tion

books

544.

the current

closed

were

the

The

15.

business

had

books

been

Aug.

opened

"Asked to what had

industry
Purcell

agencies

r—

other

Total accepted,

High,

Treasury

Total Allotted

$78,454,000

$159,515,000

New York

1,448,236,000
142,119,000

Philadelphia

„

Low,

Wells-

lent rate.

36%

Approximately 0.372%.
the

amount

railroad

according to the latest
bulletin issued by; Strauss Bros.,
32 Broadway, New York City. The
bonds,

'bulletin, entitled "Promising Out¬
look for Rails," emphasizes the
cumulative
time

effect

earnings

and

lack of Justification
fears.

Copies

are

158,627,000

..,1.

698,529,000
70,408,000
i 80,633,000

491922,000

100,147,000

Insurance

Corporation,
Com¬

Fire

offer at¬

Company

the present

situations at

Copies of the circulars may
writing to the Bank &
Stocks Department of

time.

maturity of a simi¬

was a

Insurance

Insurance
Com¬
and Massachusetts Bonding
Hanover

tractive

be had by

19 in the

lar issue of bills on Aug.

amount of

$251,726,000.

Insurance

Mackubin, Legg & Co.

4/ 7 7''747/v.; 44V'

(Continued from first page).4\;->."-4

■

deposit certificates. . . »
New securities bear %% interest, mature 26 weeks after issue
date, are sold to banks and have maximum limit as of this mo¬
ment of $500,000,000.
Great Britain has been using this type
of "inflationary bank borrowing" since July, 1940.
Canada is starting its

Insurance

first sales of

tion passes.

TREASURY

Minneapolis L_

48,294,000

26,385,000

even

94,237,000

47,999,000
41,872,000

concerning an increase in the

City

84,357,000

Dallas

250,062,000
16,000

Francisco

San

Treasury

_____

121,606,000

should be free of cash borrowing announce¬
catch our breaths. ... But it's possible that
this looked for breathing spell will be interrupted by some story

For

few weeks we

ments and have time to

total of Treasury bills offered each
4- -.44-"V
;4rl 1 ' : • . /7/4'-v

week.

16,000

$3,272,818,000 $1,609,327,000

Total

BILL RISE?

56,309,000

Kansas

City and Chicago banks
these cities, thus easing
tight reserve position. ... Along with this goes Reserve announce¬
ment that banks can rebuy from the Federal Reserve any Treasury
bills sold to the system at the same price. . 4. "Repurchase agree¬
ment" in effect gives banks greater freedom to help themselves over
tight spots and then return to original positions when special situa¬

109,993,000

i;4-

wider
.

Change in reserve position of New York
will add a $400,000,000 of excess reserves in

59,005,000

Louis

50% of May issue of taps,

companies bought more than

bought only 40% of total this time, indicating statistically the
distribution obtained by the Victory fund salesmen this time.

handling

St.

/7:4/'4

best guesses beforehand tells the
story by itself.'.
4//:4 7^'7444'7.'v47/f"V'-V
The new %% certificates were bought heavily by country r
banks, figures show, indicating the favorable reaction to ttc -4
higher rate, longer maturity. . . ♦ Certificates seem an excellent
medium for any institution or individual with excess cash that
must be on call at any moment. ./«4'v/*.';///
Market is dull now, utterly uninspired but pickup is expected
over the next fortnight as investors and dealers recover from the long
open sale of the taps. / ... Minor advance in the long-term issues
looked for by many.
1
444'/-774t 7.r
-v>. v.;
The three issues of 2s due in 1951/49 are still attractive m com¬
parison with both the long and short-term markets, due to the fact
that they haven't been fully distributed as yet, they're outstanding in
too large amounts, they're in the porfolios of so many insitutions. v • •
As the weeks go by, these 2s should become more attractive no mat¬
ter what your maturity position is. i";._. !.i:
V-V.-.-'i'"
"-3brought in more than the

the sale

278,189,000

;•i-'';:
NEW YORK STOCK

announce

present, the maturing bill total

with $150,000,000

out

in recent months.
weeklysales. V

its

$200,000,000.

the organization of

to the

soon

is at $250,000,000, as compared

.
. The Treasury is selling only
receiving only $100,000,000 new
./Until now, It was receiving

477:V-:;4^

$500,000,000 mark. 4

getting

EXCHANGE—CHICAGO STOCK EXCHANGE

yield

Telephone Dearborn 0500

•

Teletype C© 33

GEORGE

will be

more revenue

bills

are

economically desirable, especially if the
and the securities reach the

They may be used as a medium

at this time.

Federal

Reserve's

ruling

considered.

ably must continue to do so.
open

FRED

August 17, 1912

BEALL

R. TUERK

WALTER W.

CRUTTENDEN

repurchase

. ...

of bills indicates this

Incidentally, Reserve is buying huge amounts of

JAMES H. MURPHY and MURRAY C. MATHEWS

KENNETH

for equal¬

the unbalanced excess reserves total, may be considered
effective way to put all idle cash to work for the Treasury

increase is being

HEFNER

izing

general investment and trading business.
Associated with

distribution of the bills is nationwide

CHICAGO

one

To transact

With daily expenditures
level, the bills must
than currently, it is said. . .44 \
.

dangerously close to the $200,000,000

Sales

•

of bill sales may be increased

Thus/giving Secretary Morgenthau

$250,000,000 of new money per week.

.f;"':-:' '•"■4

MEMBERS

SOUTH LA SALLE STREET

the

had from Strauss

American

pany,

bid for at

117,730,000

war¬

interesting

request.

Reinsurance

Great

Company, Home Insurance

accepted.

559,485,000

pleased to

for post-war

of this

bulletin may be
Bros, upon

high
stresses

eral

There

Md., the stock of

Federal Insurance Company, Gen¬

equiva¬

price,; 99.906,

Baltimore,

St.,

American Re-Insurance Company,

rate.

0.376%J

the low price was

was

opportune

investment

Mackubin, Legg & Co., 22 Light

equivalent

99.905,

country banks.

present

CRUTTENDEN Cr CO-

was

Promising Rail Outlook
for

1-1397

Ins. Stock Attractive

Feeling among experts is the total

209

The

HAnover 2-8780
Y.

According to interesting analytr
ical
memoranda
just issued by

rate.

equivalent

99.925,

Approximately 0.297%;

cash

connected for many years.

time

Teletype

$352,409,000.

Chicago

Governmental

Y. Security Dealers Ass'n

St., N.Y.

applied for, $711,549,000.

Atlanta

to the war effort, Mr.
replied that it had been

assured

the

Total Received

District
Boston

Richmond -1.U-

increased contribution by the

Members N.
25 Broad

been done

sub-committee

the

and

districts

follows:

Cleveland

would be held.

issue

amounted

received

327,000 were allotted.

had

further
group

was

M.S. WIEN&CO.

Reserve

this

Range of accepted bids:

$3,272,818,000, of which $1,609,-

agreed that until one or more

the

Federal

details

Bought—Sold—Quoted

Aug. 15 by Secretary

subscriptions

serve

Total

opened

Morgenthau, indicating that total

"The remainder of the day, fol¬
"tap" bonds were first offered in
lowing the two-hour session, was
May sales totaled $882,078,700.
spent by the representaives of the
7 Subscriptions and allotments for
industry in meeting with various
persons on the staff of SEC, the the % % certificates were divided
better to lay their plans for future
among
the several Federal Re¬

that

were

follows:

are

the

at
The

an¬

3.
praised liberally James A.
Total subscriptions through Aug.
Jr., a director of .the
trading and exchange of SEC, for 13 aggregated $1,143,085,200. Sub¬
being instrumental in bringing the scriptions for these bonds, de¬
representatives of the commission
signed especially for investment
and the industry together so swift¬
ly that general agreement had by other than commercial banks,
are allotted in full.
When these
been reached in such short order.

said

Banks.

subscription and allotment

Final

"He

Purcell

Aug.

Aug. 14,

figures with respect to the recent

Treanor,

work.

Mexican Interest Arrears Cfs.

pany,

Allotfment

have

tember," Mr. Purcell said.

been

Average

Commissioners to be held in

thereabouts, of 91-day

Approximately

>:V,v4.':/

expect

Mexican External
and Internal Loans

Inc., attended the present meeting.
The first meeting was reported
in these columns of July 23, page
265.

fered

National As¬
Dealers,

Securities

maturing Nov. 18, which were of¬

of the Board

Dewar, Chairman

sociation

announced

Treasury bills dated Aug. 19 and

President
Exchange. H.

that in a week or offering of an additional amount
something for
of 2%% Treasury Bonds of 1962submission to the annual meeting
of National Association of Securi¬ 67—the "tap" issue—the subscrip¬
so

000,000,

with the excep¬

of the Detroit Stock

Jr.,

Aug. 17 that the tenders for $350,-

tion of Andrew W. Reid,

ceive such information.
"We

•''V.-1'

■

Convertible Preferred

an¬

associated with their firm
Mr. Andrews

case.

members

that Rollin G. Andrews is

'Vice-President.

been

from the group dealing
the uniform financial report.

MINNEAPOLIS, MINN.—J. M.
&

had

significant

' ■

$350,000,000 bills a week, and thus is

V.-P. Of J. M. Gain
nounce

work

Treasury Department,
RFC, and so on—that the industry

R. G. Andrews Is Now

.'Dain

that

came

the
was

found

accomplished in each

isting betwen them."
and

v■; ■.!

■

Works

Common & 6s of 50

Penn. Central Airlines

Secretary of the Treasury Henry

Morgenthau,

July 20 were present

at this conference

committee

"We received reports

Confer In Moscow
,

the

when

handling trading practices held its
first
meeting
within
the next

/,!.:

V.-v.

All those who attended

except

mentioned,

but did not elaborate as to

details."

but
indicated
that
it
would be a subject of prime con¬

passing,

from

Ft. Pitt Bridge
r

dis¬

the proposed
applying to the

leaflet, which contains some
interesting, suggestions may be

request.

take the fol¬

■ ■

"In¬

important

increasingly

of Governors of the

received.
/the
Philadelphia

are

From

to become

view of

number

substantial

reports from the group meet¬

ings

conditions

today's

other

Dealers Ass'n

Security

York

Aug. 17 at which time preliminary reports of the

of various groups, studying uniform reporting, corporate ac¬
counting standards, cooperation between exchanges, trading practices
and assistance to the war industry, were discussed.
Ganson Purcell, Chairman of the »
SEC, said that considerable prog¬ could expect to be called upon to

Request

Philadelphia

progress

Sterling Issues
Bids

Treasury
:

Representatives of the securities industry and the Securities and

European Dollar Bonds

Firm,

Result Of

Reports Progress In Conference

Between SEC And Beaters On Problems

and

All

Thursday, August 20, 1942

market

Since the

bills and prob¬

Out of $192,481,000 purchases by

in week before this, bills accounted for

certificates of indebtedness, for $76,627,000. . . .
current open market operation began in the second week

$108,704,000

committee

and

have purchased $1,060,000,000 of Gov¬
market operation ever carried out. ...

April, the Reserve Banks

ernments, the largest open

Full text of Commercial and Financial Chronicle : August 20, 1942, Vol. 156, No. 4100, Section 1

FRASER