Full text of Commercial and Financial Chronicle : August 22, 1946, Vol. 164, No. 4518, Section 1

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BUS.

AUG

2 3 1946

LIBRARY

In 2 Sections-Section

^Volume 164

New

Number 4518

Price 60 Cents

York, N. Y., Thursday, August 22, 1946

' •'

Price Declines
By ROGER W. BABSON
|
Noting recent abrupt rises in fish,

I i

stock

well selected stocks.

of moderate budget surpluses to correct the fundamental

years

maladjustment between supply and demand.
When

MASS. —An
GLOUCESTER,
important
event; has happened

here

e s

recently

been

radical

break

ma n

the

lit tie of the

wholesale

one

price
When

first

for

take

not

was

"en¬

are

joying"
and
Dr. Melchior

Palyi

(These two go together, too.)

page 1047)

Sliil INDEX
detailed

contents

see

taxes

*•

1007.

page

debt.

national

Stffc

seems

It
if

the public and

the

even

higher

Says

perts

ex¬

the

United

jn1 y
informed

supply and thus

p>noy

cause

'^Wwk ^hie
^

In simPler times we. knew that it was possi-

to be what

seems

%1IF

are

doing currently in

em-

Pha®izinS a iW. interest rate on government

Mfe That low interest rate is maintained by the
creation n£

T. I. Parkinson

Photo:

supply of bank credit which

an over

has been turned into bank deposits swelling our
supply of money until it is now three times its total in 1940.
This
great supply of money now in excess of $175 billions is the cause of
stock market booms, real estate booms, and higher prices and wages
generally. What the taxpayer thinks he is saving by the low interest
rate which his Treasury pays on government bonds he is more than
losing by the high prices which he pays for everything that he buys.
And there is no other cause of high prices so important as the swollen

(Continued on page 1043)

Ruhten

about

these

conditions.
To

by tightening the bung while suffer-

save

ing greater loss by carelessness at the spigot. That

States

only
adeq u a t

are

Dr. L. Albert Hahn

inflation.

m a r

interest charges on mortgage loans. Holds only way
of maintaining low interest rates is to increase

■

tfsM

hap¬

restrictions—the

credit

charges

the

costs of housing construction offsets savings in

for
years to come. And if we meddle
too much with production, there
may be shortrun "recessions," but
the Boom will be artificially pro¬
longed.
money supply,
:

begin with, if one would try
these
conditions as

describe

identical

the

invented

system

by Schacht, this would be an of¬
fense
to
him. :
For
whereas
Schacht's

worked almost

system

faultlessly, the new European sysv

(Continued on page 1029)

Editor's

just

Dr.

Note:

returned ) from

months'

tour

Hahn
a

has

three-

European

the

financial capitals.

Time

and again, we are told
overproduction threatens in

that

Vacuum Concrete

;;

'&■

-i

not

seller's market will he with

index

reversal

;

let Demand alone—
strangulate it by

that

will

When

pen?

For

If-

other

surplus which
V;\ same thing.
'44.44
Yv: som e times
What ends this state of affairs
happens
in
the
summer
and
when everyone wants to go fish¬ is the reversal of the dispropor¬
greatly
expanded
Supply
ing!
But the
market's recent tion:
action raises very important ques- and similarly deflated Demand.

(Continued

service

o n s

foreign money

payments and thus offset loss due to higher

HHF

t i

regula¬

tions

or to mortgage home owner. Points
higher interest rates would increase income

tax

words for the

Roger W, Babson

restri
and

out

Inflation

are

temp oTary

profitable to government

pres¬

Boom

of
governmental

interfere nee,

Prominent insurance executive points out low interest rate policy /is

make
seller's

ently.

due

too

market, which

seriously,
thinking

and

other

happened last
month, we did

By THOMAS I. PARKINSON*

neither

devel¬

as a con-

sequence

Rate!

President, The Equitable Life Assurance Society

much of the

of' fish.

conditions that
have

No Benefit From Low Interest

old

Too

■

economist travelling nowa¬

days in Europe is the awkward and truly grotesque

oped

standbys, Sup¬
ply
and
De-

There
'

dispro-

tween the

fishing

port.
has

stabilize postwar currencies.

One of the most amazing things to an

portion be¬

larg-

;■

nutshell.

the

world's

of things—and cannot get them—that is
Prosperity in*—. V"',.j Xj..'1
/J

deal of money on all kinds
•

inefficient caricatures

economics. /

of Bretton Woods devices, must

great many people are willing and able to spend a great

Nazi

pi in Switzerland, dollars being traded at a 20% discount and gold
/ coins at tremendous premiums. > Dr. Hahn concludes a free ex¬
change market can be reestablished only after internal economies
are put in order, and hence individual credit arrangements, in lieu
i

since "human wants are insatiable," and it will take many

power,

Declares Government measures in lieu of
preventing worldwide inflation, have merely frustrated its noticeable
effects—resulting in division of all areas into regulated and black ;
:£, markets.^ Lists current prices of gold coins and foreign currencies
of

Holds production
purchasing

of labor.

•

European monetary systems, despite accom¬

panying "orgies of bureaucracy," are mere

to come, Dr.

years

alone will not "outsmart" the inflation resulting from

market, and states he is ''still

Bullish"

for

savings and spending, the bottleneck in housing, and the re-

time

educed working hoars and productivity

for bearishness in

reason

sellers market will be 'with

Economist reports

Palyipoints to shortages of capital goods, the vast hoard of war¬

cattle and cotton and other food

products/ Mr. Babson recalls simi¬
lar sharp price rises in such com-*
motilities following WorldWar I
and a subsequent slump. Holds the
Beginning of a price decline should

•

By DR. L. ALBERT HAHN

By MELCHIOR PALY1

Holding that

Copy

Exchange Rates Run Wild

Long Prosperity Ahead!

and Stock Prices

not

(Continued on page 1031)

*'■

*Statement of Mr. Parkinson distributed through the Continental

Press Syndicate.

Aerovox Corp.*

Havana Litho. Co.*

S.AIRLINES, INC.
Common Stock

< /

Uoli FUNDAMENTAL

Prospectus on request
Prospectus

INVESTORS

request

INC-

Hirsch & Co.
;V

'i;'*.'•

Successors to 4,-v

HIRSCH, LILIENTHAL &
and

Stock

York

New

Members

R. H. Johnson & Co.

CO.

25 Broad St., New York 4, N. Y.
HAnover

2-0600

Chicago

Teletype NY 1-210

> Cleveland

Geneva

London

(Representative)

1927

64 Wall Street, New
BOSTON

Troy

r;'

Albany

Baltimore

Dallas

Pittsburgh
Springfield

PHILADELPHIA
Buffalo
Syracuse
Washington, D. C.

Wilkes-Barre

Scranton

Woonsocket

New Haven

5 corporate

'•/'•*

and Dealers

DEALERS

from

;

! -r'-f;.,-■

■

■'.

t n c.o.lpo• at i o

NEW YORK

■

•

Members New York Curb Exchange

30 Broad St.

634 SO. SPRING ST

WALL STREET

Hardy &
Members New York Stock Exchange

HUGH W. LONG and COMPANY
48

for Banks,

FROM

it/.AUTHORIZED

York 5

MAY

OBTAINED

SECDRtriBSSS S

INVESTI^NT

Exchange

other Exchanges

Established

Ifj PROSPECTUS

'^r LOS ANGELES

Tel. DIgby 4-7800

Tele. NY 1-733

Acme Aluminum Alloys,
Conv.

14 WALL ST.. NEW

YORK 5.N.Y.

INCORPORATED

Security Dealers Ass'n.

45 Nassau Street
Tel.

TELEPHONE-RECTOR 2-6300

REctor

2-3600

New York 5
Teletype N. Y. 1-576

Philadelphia Telephone:

Enterprise

Common

„,

-;' *Twin Coach Company
*Pro8pectus

Kobbe, Gearhart & Co.
Members N.

SECURITIES

Company?

;;'iConv.. Preferred

STOCK EXCHANGE

Spring

Brook Water Co.
;

00c Conv. Preferred

markets

MEMBERS NEW YORK

CITY OF NEW YORK

Scranton

Inc.

*Detroit Harvester Co. Com.

*Solar Aircraft

secondary

THE

Preferred

CANADIAN

finance"".;;.,

BULL, HOLDEN &

NATIONAL BANK

New York 4

6Q15

request

HART SMITH A CO.

ira haupt & co.

Reynolds & Co.
Members New York Stock Exchange

York Security Dealers Assh.

WILLIAM

ST.,

N. Y.

HAnover 2-0088

120

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

REctor 2-8600

Bell Teletype

1-635

Bell Teletype NY 1-395

New York

Montreal

Toronto

York Stock Exchange
Principal Exchanges

Members Neu)

and

other

Members
New

111

Broadway

New

York 6

REctor

2-3100

10 Post Office Sq.
Boston 9

Hancock 3750

Tele. NY 1-2708
Direct

Private

Wire to Boston

the commercial & financial chronicle

1006

Thursday, August 22,. 194$

Trading Markets in:

N.Y. N. Hav. Pfd. & Com.

Rockwell

Chicago R.I, Pfd. & Com.
De Pinna A & Pfd.

Bank will kave to face peculiar management problems. Majority of executive directors will represent
prospective debtors. Borrowers will be sovereign governments and resent controls common in private
lending. Bretton Woods Agreements bave'*e{ com paratively rigorous standards for granting loans, but
the Bank will be under heavy pressure to grant exceptions. Adequate disclosure and controls will be'

Frisco Pfd. & Com.
Gruen Watch

indispensable to

V'<:'i

SECURITIES CORP.
Established,

is to

Dealers Assn.
Securities Dealers, Inc.

The.

Members N. Y. Security

Nat'l

Ass'n

40 Exchange

HA 2-2773

PI., N.Y. 5

BELL TELETYPE NY

P e r m i t it to
work
out
its

Kaiser

policies

Pharmaceutical Organics

rules

"A"

Class

its

American

it goes

sidered

called upon

reaction;

server

H
•

„

n e

wdWumji
•
will

Who

Mississippi Shipping

both

hands

JWorJd

Bank}

for the future of the new in¬

ones

stitution.

Vanderhoef & Robinson

' J -t

and

Telephone COrtlandt 7-4070

All

•

on page

1034)

Byrndun Corporation
Stock

A. S.

Stock

careful. argument

.The loop

Guaranty Co.

and

for

the

re¬
sav¬

.to i facilitate

credit

banker had "expressed

the fear that it
flation

boom;

Bought-^Sold—Quoted

him

wopld leg<l jto;

another

Stock

stock

market

Kbynes bored - in

(according to

in-l
on

notes) in

wprds something like' this:

H.G. BRUNS & CO.
1

Telephone: WHitehall 3-1223

'■

• ■

;T,

Editor's

Members

120 BROADWAY, NEW YORK

^■^v^TeL.REctor 2-781S

This

Note:

article U

Stamped Prefer reds

We Maintain Active Markets in U* S. FUNDS

Preferred

r-/

New

England

•

canadian banks

37 Wall

CANADIAN UTILITIES

;

Hanover 2-4850

N. Y. Stock

XtS BROADWAY

Bell Teletypes—NY 1-1126 & 1127

and the

the

current

(Va.)

Common Stock

Detroit Int'l Bridge
Avon Allied Pi oi

United
any¬

Fred F.French

con¬

Common

general

Investing

Preferred

Frank C. Masteison & Co.

vice

as
though it were actually,
immoral
to
make
suggestions,
which public opinion does not ap¬
prove.
In America, I gather, an
abt df *thfcr kind is considered so

Members New Ybrk Curb Exchange
84 WALL ST.

NEW YORK 8

Teletype NY 1-1140 /

HAnover <2-8470

reckless, that
tive

improper

some

at. once

mo-

Assoc, Cas & Elec. Corp.

suspected; " and/

Criticism takes the form of an in¬

All

quiry into the culprit's personal
character

and

.Nevertheless,

v'VKX ;

was

X"?
":X

5s/2000

Ss/1975

public

opinion
was a matter of
supreme interest
to Keynes.
He liked to point hut
that the term

Issues

Chicago, Mil., St. Paul & Pac.

antecedents."

Minneapolis & St Louis R.B*
All Iesuee

| Dominican Republic

used with refer-

to the. opinions sometimes of
group of people, sometimes of
another: (a) the academic experts;

fMi

Consolidated Film Ind.

;

Gude, Winmill & Co.
Members New

YorkSiock-Sxchungs

1 Wall St., New York 5, N.Y.
Dlgby 4-7060

the

newspapers

Teletype NY 1-985

Attractive for Retail

contrasted

the-"living indefinite beliefs"

the

man

mass

Macfadden

the
of

Publications

Howeyer, in considering Keynes'
influence on financial
ppinipn in
;

are

Common

■«

concerned with

Circular on Request

the degree to which it was effec¬

tive in

Exchange and
Principal

bankers,

Teletype NY 1-G72

Members New York Security Dealers Attn, V

partly-expert—the

investment

^Cpntinqed op

C. E. de Willers & Co.

molding the 4 opinions of

the so-called

' NEW YORK 6»-N.. Y.

;

Telephone BArclay 7-0100

men,

120 Broadway, N. Y. 5,

news-

REctor 2-7630

pagq ,1033) >

N. Y.

Teletype NY 1-2361

priced speculation—We have

Keynote"

Manufacturer

Phonograph Records
Common

Stock

; ..V" *

„

a
7 j

memorandum
***

n '

CentraLpI. Elec. & Gas *'

on
H

Jefferson-Travis Corp.
',!■

'■

Empire Dist. Elec.
'

National Gas & Electric

3Sfo. Indiana P, S.

•

■mmmmirnmm-.

*+•

Western Union Leased Line Stocks
V*'.-. .•V

.V..—s'

•

.'v

'V;

•

International Ocean Telegraph Co,
Pacific & Atlantic Telegraph Cow
Southern & Atlantic Tele. Co. i
;

Empire & Bay States Teleg. Co.

Request

York 'Stock

Exchange

25 Broad St., Now York 4, N. Y.
HAuov-r 2-4771

prepared

Banks, Dealers & Brokers

1 Troster, Currie

Simons, Linbnrn & Co.
Members New

Which is available on-request to

Currently selling around' 3%
•Prospectus

Foremost Dairies, Inc.

Recordings, Inc.

America,

Goodbody:& Go.
Member!

N. Y; Security Dealers Assn.?

A low

street, "that
ordinary men
privately/suspect to be true."
!

& - Preferred

St., N. Y. 5

Central States Elec.

In his "Revision of the
Treaty" (page 195) he wrote:
"Maqy Americans give their ad¬

CANADIAN MINES:

Breme^ompaivu
V

which the

Canadian Securities I)ep't.

Members

Teletype NY 1-1019
New Yoilf 4, N. Y, :'

opinion.

with

Co.[

United Piece Dye Works
Common

ceives

canadmn industrials

Employees Corp. j

A & Preferred

Broadway WHitekall 4-8120

Bell System

r—those not in the know; (c) the
written statements and dogmatism

for

Railroad

both i In England

•

hind
stairs"; and the outside
opinions of journalists,, politicians

General Builders Supply
Northern

little'

the poor banker whom he

Members New York Stock Exchange,
Members New York Curb Exchange

privately

Boston & Maine RR.

Keynes

-1

Edward A. Pureed & Co.

Common

asked

Laird;;

t^Fowmotor

published by way of "answer" to and the partly-expert bankers, in¬
Philip
Cortney's ' criticisms
of dustrialists^ newspaper
editors,1
Lord. Keynes, which, appeared, in and the like; (b) th'e inside
'opin-!
f'The dhrohicle" of Aug. 15,
r
ion, "upstairs, backstairs ahd be¬

New York Curb Exchange

Bell Teletype NY 1-M3

ytg:

one

I 'i
4New'York Stack Exchange
:

■

Cotton Mills/

ence

|V^C PONNELL & TO.

New York 5

20 Pine Street,

consider

through open market operations.

Pennsylvania Gas Co.
Common

pression
ominous. They were exploring the
passibility of the government's or

bonds

Home Title

Campbell

Common

Chicago

ing ' deposit hccbunts in order tb
drive
depositors' money into

Common

moval of interest rates from

Kansan & Youngst'n
-Common !Stock-.'

to our branch offices

Soya Corp.

Lane

the opinion of
those present) fifteen feet under¬
ground; to which he replied, "My
Breckinridge!
dear sir, I wish to make that !sort
.of thinking intellectually disrepu¬

the

over

•

doing

dpne about the de¬ States;- which fears to speak
which
was
becoming thing! contrary to what it

against

are*

had; driven /(in

world, funds for the Federal Reserve banks' "doing
"reconstruction and development" something" to remedy "unemploy¬
are needed * in
almBst unlimited ment. Keynes had just presented

NY 1-1548,

(Continued

you

what could be

Applications

Expected

NY M557 V-

Vacuum Concrete

hard

shouted,

versity

Avalanche of Credit

Exchange

SI Nassau Street, New York

Akron,

Hired wire*

Common & Preferred

'vs.

over

whether he had not been

his head

over

St., New York 4, N. Y.

HAnover 2-0700

New Orleans, La.- Birmingham, Ala.

Textiles, Inc.

waved

td draw up those basic

§1''
Bequest

Members New York Stock
Exchange

25 Broad

sone of the big banks, table."'
questions - of credit policy - and in downtown Chicago^
On the
y
management up to
Keynes was especially impatient
evening of * July 1, 1931, a group
with! ;• the
these very questions may turn out of
bureaucratic
type of
forty-odd professors and finan-j
ultimately to be the most decisive dial men had
gathered at the Uni4 mind,! so common among bankers

Electric Ferries

Bell System Teletype

;

from, London,»
once

Steiner,Rouse&Co!

i st

problems have been dealing main¬ '"The MAN is.
ly with financial, economic and: M AD!" ; The-monetary
aspects..
Hardly any man was an
consideration has been given to executive of

Common

Members New York Curb

;

learned

•

away inflation.' It seems to me
appalling .that, simply for the sake
of moral discipline involved, we!
Should ; perpetuate & /condition '
in which this country's resources
are TUnnlng to Waste."

bank

rules and policies.

Rogers Peet

"And

the

econom

"'(/l

Analysis

anything to slop this hideous de¬
flation * because • you think here,
and how -we might have a run-1

British

;

.executives.

our

W M. Key.- 1|
eiWt

^Discussions

thinking and similar exjpert opinion ' is still

long-term ob¬

r1 y;

the

ofLordKeynes

deepseated

ex¬

ecutive directors and the manage-^
ment

—

and*,

statesman. *

In my opinion, Lord Keynes has answered Mr. Cortney more
effectively than I could hope to do. However, I offer the following
as t he' eoh-vx ■ k-: ■

•.

heavy rfctoden
ppon the .ex-

pdETJ

financial

required for

-situation

111

vi' *~

It is contended British Economisrexerted invaluable influence

npted

and

own

t i

WOrth 2-4230

BOtl Teletype N*

'y\ ''

By FRANK P. BRECKINRIDGE

to place a par-

Stock Exchange
Broadway, N. Y; 5

Baltimore

120

which is bound

Members

InPraise

perience, This

Overemphasis

———-———————————.

con-J.

along and to
benefit from

Bought—Sold—Quoted

;

World Bank will have

new

to Jtnake crucial jjerisions in

poli¬
cies right at the beginning of its
operations. ItrT*'-w—
will enjoy no •
breathing
spell, however
brief,-as may

L. Lemke

May, McEwen &

and investors' confidence.

success

The Bank should apply disclosure standards of the SEC.

nection with its basic credit

1-423

Copeland Refrigerating
-

assure

led todoomof UNRRA.

■/

Bought—-Sold—Quoted

sovereignty rights
Final /solution of
t crejdit management problems; will depend Ana' spirit of cooperation among Ibe piembers oftheBank.

KING & KING
■

lasting

Manufacturing Co.

Tele. NY 1-2908 i

Member

New

York

Security

& Summers
Dealers/Association.^,

J-g -White 6 Company

Trinity Place, New York 6, N

} TelepKone HAnover 2-2400
r

Y..

INCORPORATED

37 WALL STREET
•

Teletype 1-376-377-378 {

private Wires to .BafOUgi—Cleveland—Detrelt—Pittsburgh—St. Louis

bought

sold

quoted

...

NEW YORK 5

10 < I ESTABLISHED 1890

Tel. HAnover 2-9300

Tele. NY 1-1815

Arnhold and S. Bleichroeder
INC.

30 Broad SL
WHitehall

3-9200

New York 4
Teletype NY 1-515

Volume J 64

THE COMMERCIAL & FINANCIAL

Number 4518

CHRONICLE

r-..

Articles and News

Page

■

Long Prosperity Ahead!—Melchior PalyL.^

AND COMPANY

-Cover

//Exthangfe Rates iBfon/WUd^^li; Albert :Hahn*^i^£^.&&Gbver
No Benefit-TroiiLLow Interest Rates-^-:? : *,*»V
•J• /
-.

BADMAN'S

' Thomas-

} Price

TERRITORY

Declines and Stock Pri^esr-RogetfBabson^^-^^Over

Vacations

World Battk^ ^uecess Bepeit^ht Op Credit Bolicy^-ErnCSt

Wehiwurm

tn Praise of Lord Keynes^Frank P. Breckinridge..
-.-^J.1006
Latin America—Its Position -and Prospects~~C» - A;T,Mc-

field

_ __ _ _ _

your

__1008

Zelomeki—w

Telephone: WHitehall 4-6551

:-*.X008'
,Trends/Since 1870—Fred It. Ma~<

Boom-and-Bust in Textiles—A. W.

bids

STREET, NEW YORK

WALL

—Murray. D. /Safanie_/...,,_.-_~-__-.i...--^w_..__v
Price

se¬

helping

our

Obsolete Securities Dept.

■/

Pathology of Inflation—Thomas French-——* loud
The Economics Behind Current Stock Market Uncertainty

Industrial Stock

unwanted^

are

The

But

order!
Check
obsoletes.

bring

The Outlook for the Utilities—Theron W,. Locke - i

•

again

once

are

obsolete and

curities.

Queen

over,

Operating in the "Badman's Terri¬
tory" of the securities market—the

___1006

——

—_

TITLE COMPANY

-—^1010

The'CIO's Position on Price;Control*^^*^-iwi£i-^fei>tl010
Reasons for OPA Price Increases—Paul A. Porter.
1011

CERTIFICATES

Mr. Dalton's Washington Visit—Paul Einzig—
_______1012
Government and Labor—Governor Thomas.E; DeWey..—i-1013

Problems—Woodlief Thomas.

Postwar Monetary

A Grass Roots Approach to
fkeRfe**JRVptf 'i'Riidfffe'* /«/

1013
1016

J. C0L0WATER & CO

■

IlowIIigh Silver Prices?—William G.; Thurber.%—^-*----1018
*

Members New York

Permissive Cor-

NYSE Firms Taking Conservative View of

poration

S^wded

r
u———-.-1007
Proposed Election in Brokerage /

Blames Hide Shortage on OPA
NAM Criticizes Price Rise Data—

Decontrol Board

New York 6, N.

HAnover 2-8970

—————1009
—1010
—1010

R. Germain—-

Firm—Edmour A

Security Dealers Assn'i

Broadway^'..•

Wall S0Uhiott

Schulte Real EstatePfd

Better Understanding of Busi-

/.i__

"■

Book Cadillac

Progress in Federal Labor Legislation—Senator Mead—__-1013
World Ever-Normal Granary Plan—Herbert M. Bratter—1013

Y.
NY 14293

/ Teletype

_________

————1011

Reports———

Production and Profits at Peak—John R. Steelman———1011

Plastics Materials

Economic Laws Must Be Observed by All Nations td Avoid
Inflation—Winthrop W. Aldrich—
,——^——1012
Wants Treasury's Tax Experts Fired—Rep. Carl Curtis-—1013
.

Decline in Savings—Leonard P. Ayres——,.1015

Notes Rapid
•

Prospectus

•Anglo^Swi!^--MonataryiAs^<'®Mettt^sk^*»«-^«i^iiliiii^ii|1016^
1——.1016
SEC Suspends Ira Haupt & Co—
_________r___-_1017
Wallace Calls Retail Conferences
1017
Calls Truman Budget "Boom and Bust"—Senator Bridges—1019
Economic and Transportation Trends—Julius H. Parmelee_1020
RFC Faces Decision on Bank Participation Plan—
1020

Request

American Customs Being Explained to UN_„

J. F.

—

1021

RFC Gives Account of War Risk Insurance

^ t

ernors

Insurance

—1022

—

Security Issues Calendar

New

NSTA Notes

————

Observations—A. Wilfred May—
Our

Reporter on

Securities
"Real Estate Securities-—;•*.—
Securities

Salesman's Corner

Registration—
—
Markets (Walter Whyte Says)—.

Securities Now in
Tomorrow's

York,

Published Tttice Weekly

The

FINANCIAL CHRONICLE

Reg. U. S.

patent Office

COMPANY, Publishers
25 Park Place, New York 8, N. Y.
V
REctor 2-9570 to 9576
//

RERPEftt I).
*

EEISERT; Sai^ir Ife RuWisher

America,
per

Every Thursday (general news and ad¬
vertising issue) and every Monday (com¬
plete statistical issue — market quotation

corporation news, bank clearings,
*tate and city news, etc,! /*./ .y-v
Other Offices: 135 fe. La Salle St., Chi¬
cago
3, 111.
(Telephone: State 0613); 1
Drapers' Gardens, London, E. C., England,
q/p R£lWArdf Af Bmithn
records,

the

Act

Spain,

Mexico

Africa,

the

Bank

$25.00

and
per

TRADING MARKETS
Thiokol Corp.

Exchange oh

are

Axelson

printed below.

Quotation

Products

background.

1'
<
*
Whatever the opinion may be in New York, it is believed that
members of the Exchange outside of the city are lining up almost

Members New York Security Dealers Assn.

if# Broadway-1 > ■
'h worth 2-0309
Bett System Teletype NY i*841

solidly against the issue. Since the "Chronicle" feels that a thorough
discussion of the subject is important at this time when so many of
Rates

and

Cuba,

the firms are trying to figure out What

position they should take on

(Continued on page 1040) ;

Haytian Corporation
Punta Alegre Sugar

$20.50

Eastern Sugar Assoc*
We

are

interested in

U. S.
y

•

Public Utility and

exchange, remittances for for¬
eign subscriptions and advertisements must
New

York fuhds.'

Sugar

American Bantam Car

Industrial

Fidelity Electric Co.
Class A Common Stock

Lea Fabrics

offerings of

High Grade

Record—Monthly,
/^\ -

Earnings Record — Monthly.
pet year.
^
Note—On account of the fluctuations in

made

Mfg. Co.

Ladede-Christy Clay

Publications

year; / •;

Chicago
NetdYorfc *<

may

March

soberly the mem¬
are inclined to look upon the whole proposition.
However, it
be that the advocates of incorporation are merely keeping in the

Monthly

of whose opinions

question to the members for a vote, the

$25.00

rate

Cleveland

LosAnpeles"■

vote*

Stock

bers

Great
Britain,
Continental
(except Spain), Asia, Australia and
$31.00 per year.
J
Other

the

».

year;

Europe

SEIBEET, President
WILLIAM D. XtlGOS, Business Mattagei*
Thursday, August 22, 1946

under

Private Wires:
Boston

Board of Governors of the NYSE will decide on whether to present

Subscriptions in United States and Pos¬
sessions, $26.00 per year; in Dominion of
Canada, $29.00 per year; South and Central

DANA

WILLIAM

Y.,

Reilly & Co

40 Exchange PI., New York 5
i
HAnover 2-4785
TWX NY 1-2733-4-9

Apparently; ..the nearer 'wo get tor TSept; 12); the da^/when- the

_104J

Subscription
•

WILLIAM B. DANA

stock brokers themselves, some

3, 1879.

COMMERCIAL and

whether to present question to mem¬

,..—1018
1028
__1050

:—

»±

the subject of permissive incorporation took a very definitely con¬
servative turn this last week as judged from the expressions of the

1025
——__——.10207

Railroad |

taking a very definitely con¬
day (Sept. 12) whenBoardof Gov¬

Seen

However,Jt may be adyocatea of incorporation are
merely keeping in background. The "Chronicle" will be glad to
prinLtlbe opinionr pf members of Exchange andof partners with
whom they are associated ronquestion.
Soi^e thoughts of the
brokers on the issue are given below. ;

^_1048
1018
1056

Governments—————i

Reporter's Report.
—
Prospective Security Offerings—
—_—
Public Utility Securities—*———
Our

of NYSE will decide

ber* for

1049
—1026
—1014
1024
1053
1015
1009

Dealer-Broker Investment Recommendations—<—
Mutual Funds

are

servative turn As. we near the

Regular Features

Stocks.———
Broker-Dealer Personnel Items
Canadian Securities
and

Bank

Sentiments of brokers

PREFERRED STOCKS

Susquehanna Mills

•

»
'
'

Spencer fTrask & Co,

V' Company

':i\

25 Broad Street. New York

DUNNESCO
fiev) York Security Deateri Assn.

Members

Teletype NY 1-J5

Telephone HAnover 2-4300

Reentered as second-class matter Febru¬
ary 25, 1942, at the post office at New

-■

25 Broad St., New York 4,N.Y.
WHitehall

Members Netxl York Stock Exchange

3-0272—-Teletype NY 1-950

private Wire to Boston

TITLE COMPANY
♦Parks Aircraft

CERTIFICATES

Fuller Houses, inc

Prudence Co.

STRAUSS BROS
Members

National Radiator Co.

fl|

Members New York Stock Exchange

15 Broad St, N.Y.5
r r-Bell

WHitehall 4-6330

Teletype NY 1-2033

Bought—Sold—Quoted

Public National Bank &

Broadway

Board of Trade Bldg.

Prospectus

upon

request

CHICAGO 4
1

Teletype jNY 1-832, 834

...

Harrison 2075

Established 191411

Teletype CO 120

Direct Wire Service

New York—Chicago-—St. Louis
Kansas

Trust Co.

Security Dealers Assn

NEW YORK 4
DIgby 4-8640

Newburger, Loeb & Co

Inc.

Incorporated

Shoes

Capital Stock

Lawyers Mortgage Co.

N.Y. Title & Mtge. Co.

♦Miles

Bond & Mtge. Guar. Co.

Lawyers Title & Gnat. Co.

Sales & Service,

City—Los Angeles

U Trinity Place, New York 6r N. Y.

Teletypes,

Telephone:
BOwling Green 9-7400

NY 1*375 & NY

C.E. Unterberg&Co
Members N. Y. Security Dealers Ass'n

Broadway, New York 6, N* Y.

Telephone

BOwling

Green 9-3565

Teletype NY 1-1666

,^HE,.CQMMiEjl^

1008

ACTUAL MARKETS
in mmm

ACTIVE ISSUES ?

-v

*■

•

"f:

BUSINESS BUZZ
'

unexpectedly
exceeding war-end figures of year ago. Terms a bullish factor the
replacement of war industry consumption by mdeh more profitable
domestic load. Scouts public's fear over higher costs, holding they
will be offset by increased gross. Concludes because of yield and
growth factors, utility stocks should rise selectively.,
;
*
«

;

By THERON W; EOCKJE:*

Public Utility Analyst cites present

m im

Thursday, August; 22f J,946

The Outlook tor the Utilities

mm & Co.

^C|j|R3NI<3LEi;

output

power

•

The decline which

recent

Art Metal Const.

Aero Chemicalf

'J*

has taken placer. in public utility stocks inj
weeks has raised} the questioii bs to the Outlook; for the utili4
ties' and

...

have appeared
in
various

American Bantam Car

the

same

the

war

far

outlook is

cellent.

Cinecolor

Chicago R. I. & Pac.

out

borne

facts. V
now

Diebold Inc.

one

the
is

year

since V-J Day
and soon fig—

Theron W. Locke

District Theatresf

The

Hartford-Empire Co.*
Jessop Steel

By THOMAS FRENCH

a plethora of metallic
money is not a primary
inflation, but is a stimulant to increased production and
business activity. Diagnoses inflation as a rise in "wage-costs,"
which comprise not only workers' wages, bat interest and profits
as well
Denies price rises precede wage cost* rises, bat attacks
policy of reduced bank reserves as creating a spiral of inflation.

cause

Asphalt
Michigan Chemical
,

Minn. & Ontario Paper
Missouri Pac.

Concludes since wages and prices are synonymous, wages-costs
should be kept low by increased productivity and wage rates should

Old Pld.

Mohawk Rubber*

labor is

function of Congress.

One year

less than in

ago,

N. 0. Texas & Mexico

for the

money

Purolator Prod.*

financial

;/,,

had

The gold

dollar

was

25%

denoted

alone,

that

what

entered

may

soon

one

tutory 1 i m i t;
By % Act
of

the most difficulttof all measures.
It

way—a

not be

can

Con gress, on

the

June 12, 1945,

penditure

the gold back¬

Alabama Mills*

done by

on scarce

for

ex¬

goods without

equally affecting the production
necessary goods with conse¬

ing of the dol¬

Textron Wrnts. & Pfd.

Thomas

the

French

lar

quent cumulative disemployment.
The results which followed the

Aspinook Cbrjjk* t

fore,

sterilization

was

there¬

reduced
25% from

40%, and required

(Continued

gold

on page

by
the
1045)

American Gas & Pow.
Art Metals Construction.
American Hardware

Cent States Elec., Com.
Iowa Pub. Sen Com.

*Gen. Bids. Supply Com. & Pfd.
Grinnell

Corp.!
Liberty Aircraft Products
*Stromberg Carlson Com. & Pfd.

BudaCo.

New England P. S. Com.

*Crowell-Collier Pub.

Paget S'nd P. & L. Com.

Bought - Sold - Quoted

Southeastern Corp.

^Prospectus available

request*

:Goodbody &. Co.
Members N.Y, Stock Exchange and Other Principal

Standard Gas Elec.
v,-t.
v

;/ ,•

...

»■'

•

115

1 ••

-V.

tProspectus Upon Request
*Bulletin

Circular

upon

Exchanges

Telephone BArclay 7-0100

Teletype NY 1-672

The

tion

and

trade

history.

The

Federal Reserve Board's index of
industrial production for the cur-,

rent month

will probably reach
177, about 2% above the prewar
peak of 174 in November, 1941;
the

annual

ments

rate

running at

income
an

pay¬

all-time

record of $163 billion and exceeds

by 66%

the prewar peak of less
than $100 billion just before Pearl

Harbor, a period which was re¬
flecting considerable expansion of
shipbuilding and aviation for de¬
fense and for export to our subset

around

the

all-time

peak

about 280% of the 1935-39
average,

substantially

the prewar rate.

request

early bear market^
'
31

securities market is in the anamalous position of
expressing
great hesitance with, in fact, a declining tendency,
during a period
when industry is reporting the*
best peacetime record of produc¬ level
is, of course, reflected in

department store sales continue at

105 West Adams St., Chicago

Broadway, New York

economy*
Hence, while not expecting an
Mr. Safanie advocates investment caution.

quent Allies.
Steel production is
at the highest rate since V-J
Day;

Spec. Part.

Southwest Natural Gas

Economist holds hesitance of current market action is justified by
cracially important labor unrestf wbicb may cause farther
Wage advances^ lower profit margins, and general unbalancing of
our

restricting

available

currency

nation's

We can, but only in
waywhich involves

stop it?

minimum sta¬

Vacuum Concrete

giddy whirl of the inflation
spiral. The question now is, can

proaching the

Upson Corp.*
U. S; Air Conditioning

Partner, Shearson Ilammilt & Co.
Governor, New York Stock Exchange

the

ap¬

Uncertainty

By MURRAY D.1SAFANIE,

the pre¬

from

35%.

That,

coun¬

backing of the

Tenn. Products
.

the

try.

Taylor-Wharton*
•.

deposits
vious

Stock Market

member ' bank

against

reserves

trans actions

Richardson Co.

•

The Economics Behind Current

although the number of persons employed was
the Congress found it necessary to
pfoVide more ^
■

the previous year,
'

be left low by increased productivity and wage rates should
not be left to collective bargaining, since conservation of rights of

Moxie
Pfd.

"Does That New Depositor Seem a Trifle
Suspicious
to You Too?"

hot

N.Y. New Hav. & Hart
Old

Pathology ol Inflation

Writer contends that

Mastic

Society of Security Analysts.

Registered Professional Engineer, Oregon

Lanova*

■m

Public Utilities Division of N. Y.

electric power production for this

Gfc Amer. Industries

a year ago when
drawing to a close.
sections of Ahe / cbuntry

*Mr. Locke is Chairman of the

»V
ures
will be
showing the changes in

available

week

was

Certain

■

Douglas Shoe*
Elec. Refrac. & Alloys

was

showing a sharp increase in
the useOf ! powers while !6
show decreases, Out the total: dp
pears favorable in vie\V of the^anticipated sharp decline in power
output which was. generally ex
pected a year ago. ,For the 12
(Continued on page 1028) -1

This

12.3% above the power output of

are

ex¬

belief appears
to

old Pfd.

the week ended Aug.

for

the industry is
concerned the

Barcalo Mfg. Co.* ":

that

"Com. & Pfd.

Automatic Instrument

;

first postwar year; It is interest!
ing to notice that * the total power
output for the, U. S. as a whole

publications
indicating

Amer. Window Glass*

sev-^

articles

eral

than double

these

volumes, but most of the
is in physical volume as
carloadings—also at

gain

borne out by

peak—and would be even higher
if more cars were available. Man;-!

power is still in short supply and
holding back many industries such
as
building Construction which
though booming has only reached
a

fleabite

as compared with de~
Agricultural income is at
undreamed-of high levels and na¬
ture is favoring us with excellent

mand.

props again this
which

are

year.

not at

cipally those which
back

Industries^

peaks are prin-*
are

shortages

being held

materials

and manpower—notably the auto¬

mobile. and truck

industry—but

(Continued

1024)

The higher price

on page

ACTIVE MARKETS

Ward & Co.

•

^District Theatres

*Dumont Electric

EST.

*Hungerford Plastics

^Princess Vogue

^Stratford Pen

U. S.

1926

Members N. V. Security Dealers Assn.

120 BROADWAY, N.Y. 5
REctor 2-8700
N.Y. 1-1286-1287-1288
Direct Wires to Chicago and Phila.

ENTERPRISE PHONES
Hartf'd 6111
Buif. 6024
Boe. 2100

\!f

v'>n(

vJ.

Shops
y*

tiv

(

«.

' i11/

•'

•*"(>.11 i"

United Piece

York

Tel. HAnover 2-8080

' •

Teletyve NY

and if issued

Bought-—Sold-—Quoted

Haile Mines

j.K.Rice,Jr.&Ca

Security Dealers Association

When,

Capital Records

New York S, N.

J. P. Stevens & Co., Inc.

Aeronca Aircraft Com. & Pfd.
Standard Comm. Tobacco

FIRST COLONY CORPORATION
Members New

•

Finislting Com. & Pfd.

^Prospectus Available

S2 Wall Street

Dye Works

CommpiY & Preferred

*The FR Corporation

SIEGEL & CO.

Established 1908
AT embers

Security Dealers Assn.

REctor 2-4500—120 Broadway
Svstem Teletype N. Y. 1-714

39 Broadway,
v,

;

N. Y. 6

DIgby 4-2370

Teletype NT 1-1942

».-v

wpywisv-v

Volume 164

1009

Number 4518

Hess « HcFaul Is

HewFirmKame

Observations

ORE. — John J.
Bank Build¬

PORTLAND,
...

/V.-

By DR. FRED R. MACAULAY*

Hess & Co., American

:By A. WILFRED MAY*

ing,

Economist of the National Securities & Research Corp.
■'

.■•.■'»

/;>■:

••

•;

4 ' ; ' V- :•'V

> ' *'''

r".C

War

•
;■

name

Peace??

Dr.Macaulay braces through a; chart the fluctuations in stock prices;
from January l871to JuIy l946 incIusive, and explains methods
used in the compilation. Says study is not designed to forecast:

As Revealed in the UN Charter

future market trend.

"We, The PeopieOf The United Nations, Determined

'10

I present in this article a chart showing the

movements of in¬

dustrial §tock prices - in the United States since 1870.. It is- based
upon the ex-^—
——,
V. .— • ;
..,:
haustive in¬ not fairly be described as merely
dexes
of the
accidental; and that, though they
Cowles

Com¬

mission and of

Standard

the

Poor's

and

Corporation.
I

shall

not

quite

may

than

purely
em¬
pirical. But I
R.

Macaulay

that,
specially
of 1896,
they cansuspect
e

since the low

chart

The

can

first

1921) before

uprush into 1929. The second
line (B) was drawn parallel to
the first line and through the last
the

Legal Snag in Its

Allempl to Obtain Election in Brokerage Firm

Wilfred

CA NAD IAN

with

another as good neighbors, and

one

unite

strength

our

maintain inter¬

issue between Harris, Upham & Co.
be stalled in the court-like

and the United Financial Employees may

likely to be the vic¬
force is due for a
trouble and some disap¬

shortsighted if not foolhardy man
on Wall Street today who would

lot

peglect to arrange his affairs in
anticipation of a prolonged labor

nizance

struggle that could break out at
almost any time.
'

;

The New York Stock Exchange
itself—which is very much the

ers

for the union's
all the activ¬
in the "Street"—

target

achieved

BELGRADE, Aug.

have to be

ity

elsewhere
announced

Morgan

members

(Continued

Now York

and shot down,

HAnover 2-0WO

NY 1-395

Bell Teletype

Montroal

Com. &

Toronto

COAST-TO

Securities

;

MICHAEL HEANEY, Mgr.

WALTER KANE, Asst. Mgr.

Joseph McManus & Co.
York Curb Exchange

Members New

COAST

39 Broadway

Chicago

St Louis

Kansas City

New York 6

Teletype NY 1-1610

Digby <-3122

New York

Los Angeles

tt.v

•„

»■

power

ST. LOUIS

V^'"

Reynolds Stock Exchange
& Co.

Members

LOS ANGELES

York

New

120 Broadway,

Ca\3ndelet Bldg.

New York 5, N.

Telephone:

Bo. 9-4432

paralize

request

Baum, Bernheimor Co.
KANSAS CITY

Pledget* & Company, Inc.

New Orleans 12, La.

41 Broad St.

A picket-

building, it is certain.

*Prospectus on

New Orleans Stock Exchange

New York 4, N. Y.

Preferred

^Universal Winding Co. Com.

T. J. FEIBLEMAN & CO.
Member $

$2.40 Conv.

Harrison 2075 v
Teletype CG 129

Whlto A Company

Exchange

of the

Com. & "A1

CHICAGO 4

DIgby 4-8640 ;
Teletype NY 1-832-834

S/S

Air Products, Inc.

^Raytheon Manufacturing Co.

Board of Trade Bldg.

Broadway

NEW YORK 4

Pfd.

•

Members New York Security Dealers Astfn

Fruit &

Com.

STRAUSS BROS.

Lane Cotton Mills Corp.
Standard

REctor 2-8600

NY 1-635

Bell Teletype:

Bel] Tel.—NY-1-498

whatever it touches and any instil

Expreso Aerea
p-7'hj;

v '

lVJ'

San Nap
Y ""

Dravo Corp.*

Pak

Prefe^red^

HAYTIAN

Kinney Coastal Oil
American Insulator

Utah Southern Oil

American Maize Prod. Co.

Preferred & Common

Equity Oil

Common

Baker

.{>

Raulang

JAMES M. T0OLAN & CO.
67 Wall

Street, New York 5 '/«

Telephone

HAnover

St'Preferred

,J,.

i l4r'C'^ '

-v

—

Sold

—

)

x ••

-»

x'B'

Quotations Upon Request

Quoted

Prospectus ori request

■

FREDERIC H. HATCH & CO., INC.
PETER BARKEN
Tel. WHitehall 4-6430

Tele. NY 1-2500

Established 1888
MEMBERS N. 7. SECURITY DEALERS
83 Wall

Street, New York 5, K Y. >

CORP.

*%'s

•

32 Broadway, New York 4, N. Y.

2-9335

Teletype NY 1-2630

U' »-*}£

Bought

American Beverage
•

spiral¬

Chicago Stock Exchange

would

Sulphur

Pfd.

Curb and Unlisted

1040)

on page

N. Y. 5

52 WILLIAM ST.,

Direct Private Wli$ Service

Jonas & Naumburg

would have to sit it out inside the

the

BART SMITH & CO.

de¬

centering around the Big Board.

has

Ltd.

Co., Ltd.

St. Lawrence P. Mills

Houston

Lake

Jefferson

rangements
to
provide
living
quarters, including dining facil¬
ities, in the building for that part
of its personnel which would be
needed to carry on the functions

line

page'1019)

Galveston

in the event

the floor in the eventu¬
ality of a strike the Exchange
members will have to make ar¬

Some

ling to the ground in a column of smoke."

planned far ahead. The

(Continued

strike but to continue to do

trading

a move

Ltd.

Price Bros. & Co.,

that it intends to

do business as usual

such

Ltd.

Paper Co.

St. Lawrence Corp.,

19—"Another American plane, a transport,

attacked by two Yugoslav fighter planes

by the Exchange in

this way but

onslaughts despite
has

high

Co., Ltd.

International Paper & Pr.,

BELGRADE, Aug. 9—" A U. S. plane, forced off its course by a
storm, was shot down near Ljubljana by Yugoslav fighter planes,
which kept on firing at it while the pilot was desperately trying to
make a forced landing in a wheat field."

of coordination between buy¬
and sellers of securities could

principal

doubt

P., Ltd.

Ltd. of Can.

Donnacona Paper

BELGRADE, July 16—"An American jeep was ambushed while
proceeding, on Allied territory from Gorzia to Trieste, one U. S.
soldier being slain, and two wounded." ...

was

boundary between Iran and the Soviet Union "

BELGRADE, YUGOSLAVIA, July 12 —"In a clash between

gree

t; iv

'•

Paper Co., Ltd.

Minnesota & Ontario

of this fact.
is

1 71

r 1 '

Consol. Pap. Corp.,

pointment if it fails to take cog¬
There

MOSCOW, Aug. 12—"Pravda quotes Harold Ickes as asserting
a civil war with tanks, machine guns and bazookas is in progress
in the Philippines under headline, 'American troops defending Phil¬
ippine Dictatorship behind Iron Curtain.' "...
that

tution that is

lations Board but it would be the

Brown Company

As Revealed In Current News Items:

atmosphere of the hearing room<&
of such

iij*.* u'

British Columbia P. &

United States and Yugoslav patrols on the Allied side of the
Line in Venezia Giulia, two Yugoslav soldiers were killed."

tim

•

Abitibi Pr. &

PERFORMANCE—

jurisdiction over an election to determine the bargaining agent for
the employees of Harris/Upham & Co. Council for the firm says
that; National;; Labor Relations Board! should, have jurisdiction as

of the New York State Labor Re¬

Pulp & Paper
Stocks and Bonds

and security, and

River

The collective bargaining

ITI

SECU

practice tolerance and live together in

A decision is expected soon from Trial Examiner I. L Broadwin of
the State Labor Relations Board on whether the Board may assume

Wall Street.

ver^

the institution of

THE

of Den¬

vestment Supervisors, Inc.

"... to insure, by

May

president of In¬

the acceptance of principles and
methods, that armed force shall
not be used, save in the common interest/ and
".
to employ international machinery for the promotion of the
economic and social advancement of all peoples.
"
A.

the past he was

tetter

and

progress

freedom.

indicate that Russia has massed 15 to 25 divisions along the Araxes

Harris, Upham & Co", does business On a national basis. Threat
of strike by United Financial Employees hangs ominously over

in the

from. offices

business

U. S. National Bank Building.

TEHERAN, IRAN, Aug. 17—"Reports from the northern frontier

By EDMOUR A. R. GERMAIN

„

the securi¬

LONDON, Aug. 10 —"Great Britain is ready to take military
action unilaterally if her oil in Iran is attacked; will act without re¬
course to UN, because Security Council has no troops."

partment of the National Securi¬ low of 1903 falls virtually on the
ties and Research Corporation.
(Continued on page 1048)

Wall Street Union Runs Into

social

promote

national peace

summary

ties

COLO.—William

■

Condon is engaging in

"And For These Ends

peace

after the 1893 decline, and

the

(August,

low

—

1896)

log y). The first
straight line (A) placed on the
chart
was
drawn
through two

the last low ( August,

DENVER,

be maintained, and

standards of life in larger

scale (natural x,

points

Condon in Denver

to establish conditions under which

"semi-logarithmic"

Adopted at San Francisco:

justice
and
respect for the obligations arising from
treaties and other sources of international law

A. McFaul. ;r. ],u;

Hess and George

»■'kv'-

rights, in the dignity and worth of the human
person, in the equal rights of men and women
and of nations large and small/and

future

changed to Hess

Partners are John J.

monthly chart

-■.

save«succeeding

of the views ex¬ high (October, 1919) before the
pressed by Dr. Macaulay in the 1929 high. All other lines on the
Aug. 15, 1946, issue of "Invest¬ chart are parallel to these two
ment Timing," published by the lines.
The reader will note that the
Economics and
Investment De¬
*A

they so
past, they
are
well worth the thoughtful
consideration of the investor and

drawn

other

immediate

t A',

generations from the scourge of war,
which twice in our lifetime has brought untold sorrow to .mankind;
and
"y ;-: %- V.
-■fv"'-''.
*K
?.
to affirm faith in fundamental human
*

often have been in the

speculator.

this chart are

rt.

be fol¬

not

such consistency

with

mathematical

Dr.

possibly
the

lowed

attempt to
prove that the

regularities of

„t t-'i

firm's

the

that

announces
has been

& McFaul.

FARR & CO.
Members

York

New
New

ASSOCIATION

Bell Teletype NY 1-897

120

New

York

Stock Exchange

Curb Exch.

York Coffee

WALL

Assoc.

Member

& Sugar Exchange

ST.,

NEW

YORK

TEL. HANOVER 2-9612

raElCOMMER^

Thursday, August .22,,'1945

Boom-and-Bust in Textiles
By PHILIP MURRAY*

Weekly Bulletin of Leather and!
Shoe News says OPA ceilings pre¬
vent importation of hides
~bjrbe-»

President, Congress of Industrial Organizations

leader, in pleading for restoration of price controls
foods^ asserts prices are being manipulated ^ by monopolistic
practices to create scarcity situation? and to force price increases.
/Criticize* severely OPA decontrol policies and saysprice regular

lug put at 10 cents to 15 cents be¬
low 'world market price.
Expect
increased supply-because of heavy
kill *of cattle,
will continue.

but

National labor

tions.

Boston,

from

held

are

denies

that

the

and

lays blame for shortages to OPA
ceilings.
...

Says the article: "The present
shortage of hides and /leather
dates back many months into the

of runaway

"The
ceased

International

controls

June

28, 1946, because
of the constantly reduced amount
of hides entering
into Interna¬
tional commerce, at the controlled
price. Instead of the International
controls
being stopped Jan. 1,
they
continued
on
and
each
on

month

created

of hides.

age

domestic

short¬

\ !

The eyes of the American People are on the actions of the De*
control Board.
What your Board does in recontrolling prices on

basic

com-

modities

the

set

stage

'•

the

Board

JB7

istingon that datemustbe reS
stored. Not to do this would be?

;

limit

tionary
price
rises that have

that

;

large miller of grain,
country's storage bina

the

bulging

were

30, 1940.

Controls

made by
M

occurred since

June

to make the sky the

how high prices will go.
Recently an announcement was

infla-

and

invitation to speculators an<$

jHBpi profiteers

stop the drastic

-}' '■

■

June 30 levels and $ubsidies: ex~

1MMB

adminis-

o r

<§>—-—,>'■ '

■.

will

and was brought about by tration- policy,
It is w i t h i n
governmental control. Where this
the power
of
country has always been a net
.

wage^price policy of February, 1946f and decries fear

Wages.

past

importer
of
hides,
this
was
changed by government control to
where
we
have
exported each
month many more hides than we
have imported.

Cites, government

price rises and increased industrial profits and divi«

written into

supplies

market

liberalized through: lax administration.

dends. : Holds workers are suffering not
only ^ from price rboosts
but irom reductions in take home pay due to less work and shorter
hours. Contends a program of discouraging wage increases *wai

•

Giving the tanners* viewpoint
regarding - cause - of hide ? short¬
ages, the "WeeklyBulletin,'^ of
Leather •&»Shoe News, published
•

are

statistics of

shortage

says

with

grain ' and

A m e r i c a' s warehouses; weret
stacked

the

roof

flour.'

with

Wjm Mm These commodities were not, how?
HK^Sr jflH ever, released on the market until"

must

be immediate-

(Continued

on page

1042)

replaced
Philip Murray
livestock,
grains, cottonseed, soybean and dairy products,
on

Prices

must

rolled

back

„,c

*Statement

Murray before

presented by Mr.
the Price Decon-

trol Board, Washington,
Aug. 15, 1946.

C.,

The tanning indus¬

try has been using around 2,000,000 hides each month. This leath¬
er
has all been moved out ; into
the

into

shoe channels and converted
shoes. Against this, the net

purchase of hides by tanners in
the ^Untied States, plus imports
exports, was as follows;

minus

April

LOOKING FOR INCOME?

1,400,000,

May

1,400,000,

June 143,000, thereby creating a
reduction; in tanners' inventories
in the

three

months

approxi¬

mately 2,500,000 hides. Were these

Paid $1*75 Annually 1939-194$

hides accumulated in the hands of

swi

producers and dealers waiting for

Approximate Market 22x/2-23x/2

market?

free

hides which

The

amount

sold during the
free "market in the first i 20;days

DELAWARE RAYON "CLASS A"

was

ojf July should throw some light
this subject, as during this
.

Paid $1.50 Annually 1939-1945

period the price of hides advanced
(Continued- on page 1047) ^

Approximate Market 22-23
■;

CIRCULAR ON REQUEST

Richmond Cedar Works

Tennessee Products

F. H. KOLLER & CO., Inc.

American Vitrified Products

Members N. Y. Security Dealers Ass'n
111 BROADWAY, NEW YORK 6, N. Y.

BArclay 7-0570

Washington

NY 1-1C

Properties

National Press BIdg.
N. Y. & Rich. Gas
National

Shirt

Shop

Steep Rock Iron Mines, Ltd

Montague Rod & Reel

V.T.C.
B0I0I0 Gold
Placer

DIgby 4-1388

Brokers

1926

JOHN J. O'KANE JR. & CO
Established

Airborne

Cargo

Lines

Dividends quarterly at rate of $1.50 per annum,
Net current asset value, per share $30.95.
Earnings 1945—$2.98 after $9.41 E.P.T.

Payne Cutlery

Current market below net current asset value.

Buy Dollars at
■

and

Discount

comment and tabulated histdry ts immediately available? to
by requesting data CC on Kearney and Trecker

balers

Blair F.

Specialties

Bought—Sold—Quoted

42 Broadway, New York

WALL

Claybau^h & Co.
f-'

ST., NEW YORK 5, N. Y.

HANOVER 2-7064

Tele. NY 1-2178

Harrisburg-Pittsburgh-Syracuse-Miami

Beach

Dealers

Securities
New York 5, N. Y.

Teletype

WHitehall 4-2422
vy,.

113

1-2613

Branch Office

Hudson

St., Jersey City, N. J.

Teletype NY 1-1525

Dfgby 4-6320

Soya Corporation

•

of America
Present Price
We

believe

company

than

are

that

INCORPORATED

Member National

Association

of Securities Dealers, Inc.

Exchange Place, New York 5

the

selling at

Members MY. Security Dealers Ass'n

5%
of

this

lower level

the shares of any other company

In thd;

$pya : bean field.

Analysis

Members Philadelphia Stock
Exchange

52
•

Investment

Telephone

Members N. T. Security Dealers Ass'n

United Utilities

Sp.P-ia-date

1922

62 William St.

Aero Chemical

KEARNEY & TRECKER
I

Development, Ltd;

Tele. NT 1-86
Established

; V

Dredging, Ltd.

Broadway, N. Y. 4

Tel.
>

.-.y

Tel. BA 7-5161

brokerage service

in all Unlisted Securities for

Request

Banks and Dealers
-

PETER MORGAN & CO.
31 Nassau Street

We render

New York 5, N. Y.
Tele. NY 1-2078

60 Wall

{Street, New York 5

TefcpAofWjWHitehall 3-7830

1011

Volume 1Number 4318

the highest real wages, and
democratic form of gov-,
ernment of any country ^ in the*

ing,

Reasons for OPA Price Increases Productionlaxid Profits

the most

lays blame for recent increases in price ceilings
to revised OPA Act, which requires price adjustments be made
within 30 days after lawV.passage. Says increased price ceilings
are mandatory under Act since^ it requires peacetime retail dis¬
counts and mark-ups.
Sees no need for alarm of runaway prices
or uncontrolled inflation and asserts when mandatory increases are,
ended OPA will resist further price pressure and use rigid enforce¬
ment measures. Concludes prices can't; be rolled back.

Reconversion Administrator, who

thb Price Control Extension Act passed re¬
cently by Congress, there's a sentence which goes a long way toward
explaining!.'/.■*»: '"i: • v • "> "
•
enactment of the law.
And, as
why you've
seen
such
a
you probably remember, the new

the

Office

Price

Admin¬

-thelast

sult,:

few

asserted
that
"our
country

law

July 25.
the latter part of Au¬

have

they

legal

.guage,

that,

sentence
that

says

price

"adjustmentre-

had been done
i

act must,

wherever possible,
within 30 days from the

be made

*Radio

;

achieve¬

cover

and not buy

power

imously by the board, ^consist¬
ing of Roy L. Thompson, George
MCad

These

Bell.

Daniel

and

ruled

that

ceilings and subsidies
should be restored on meats, that

tracts,

adding

prices of cottonseed products and
soybeans should again be brought
under control, but dairy products
and grains, except flax and feeds,
should remain under

free

mar¬

In a radio address, later in
evening, the chairman, Roy
L. Thompson, explained the bases
upon which the formal decisions
ket.

the< rest

does not have to be: spent."

against demands for
higher wages'without greater pro¬
ductivity.

He reviewed the con¬

made.

ditions under which the Decontrol
Board

detailed
and

established and gave a

was

account

its

activities

his

radio

which the nation accepts

cisions of this board
weeks ahead,

the

provide

true test

country's willingness

determination

(Continued

objectives, and then discussed

these de¬

will, in the

protect

on page

and

itself

1046)

Major

have

before.

...

today

jobs

The total

now

and

farmers

ers,

and

business

;

They have done a great job. It
looks as though we have only to

the full production
employment which
national goal for the future.

and maximum

our

there

But

last

his

subject

full-dress
was

sharp

pamphlet

in early 1937, whereafter

occurred.

movement

belief that';

Today it Is Major Angas'

the market rate of interest is entering

cyclical trend,. .,and that, the
change will be very rapid, not gradual
a new

darker

abroad to

• j

•-•••

t ' ''

Inc.

peg

pay

ordered and to work

for goods

out an in¬

stallment plan for repayment

placing the

concerns

the highest standard of liv¬ from abroad."

—

COMMON STOCKS

order|
t

":'4

Michigan Public Service
Missouri Utilities

Arkansas-Missouri Power*
Black Hills Power & Light

Rights

Pugef Sound Pwr. & Lt.
Republic Natural Gas
Rockland Light & Power
Scranton Electric*

Central Illinois Elec. & Gas

Empire District Electric
Federal Water & Gas

Gulf Public Service*

Sioux City Gas

Iowa Public Service

& Elect*

Utah Power & Light

Michigan Public Service
*Prospectus Available to

Dealers and Bankers

only

G. A. Saxton & Co., lma

side

New York 5, N. Y.

70 Pine Street,

Teletype NY 1-609

WHitehall 4-4970

American Bantam Car

Corporation

Bought—Sold—Quoted

Founded 1920
120

HorIIqseSTrqster

Broadway, New York 5
Phone

ESTABLISHED

BArclay 7-5660

Teletype: NY 1-583

1914

Trinity Place, New York 6, N.

Telephone: ,
BOwling Green 9-7400

Teletypes:
NY 1-375 & NY 1-2751

casts, occasionally they have proved
startlingly right hi the past and also

well-timed,
Read

-M

want to.

interest

rates

suddenly

rise

(de¬

spite official plans to keep them low)
whole of the Capital market will'
suffer dislocation and a shock

the

with

bonds,

estate
The

stocks*

rents

entitled

words)

BOOMS" is

essays

*-*'

Gold

Rates"
and

and

Gold

United States

BUSTS

Outlook

Shares."

Amott.Baeer&Go.
-

INCORPORATED

the San Francisco

'^.3,t

Utica

Boston

•;

Stock Exchange}

Vv'?

Securities

Magnavox

Blair
our

direct private wires

Kaiser & Co.
NEW YORK
SAN

FRANCISCO

NEW YORK

FC-822

ANGAS

STOCK EXCHANGE* NEW
STOCK

EXCHANGE' LOS

NEW YORK

for

Phila.

MAJOR

traded
•

Di Giorgio

Oovernment

provocative essay.;
will; also be sent

are

We offer prompt service over

dealer should

"The

stocks

Doernbecher Mfg.

—

4,000

gratis, namely "The Future of Inter¬
est

The following

request
A? -m 'J: O

this Advt.

read this

other

$2'H

Return

fail

JfcPrdspectus

INFLATIONARY

No banker or real estate
Two

(only

"WHY

and., real

moving tepidly.
of the essay

price

ALWAYS

'DeaC&u

and disagree
But remember that if

Major Angas

if you

SAN

FRANCISCO

by*

min4/

particular industrial or

Common Stock

{Glass Company
&: V.

being withdrawn from
under a hat, which has held the hat
still, and high up, for some years.
Although few agree, at the time, with
most of Major Angus' economic fore¬
.

facturers

ing

Neville Island

this

poration will, whenever necessary^
advance cash payments to manu-*

the

ahead

equipment and raw materials
countries. The cor-;

ery,

from foreign

In the future, as in the

for

principal function

men

only in terms of the superlative.

the traffic will bear.
labor to de¬

time for

to record heights and keeping

it there.

it's still

We can discuss the reconversion

people

ever

of the
handle, ont
behalf of industrial and mining;
concerns, the purchase of machin¬
The

New York Hanseatic

An<?a.<t
Indeed

that

often

not

Corporation, will be capi¬

Corporation will be to

past, record production will earn

already employed.

are

THE BOND MARKET
Is

can

without cor¬
responding gains in production.
This is a time for all of us—busi¬
ness men, workers, and consumers
—to fix our eyes on the same goal
—the goal of getting production

address

The

■4-v -"

writes about the bond market.

The organization, to be known
the China Industry!and" FN

nance

panies.

MAJOR ANGAS AND
It

Chinese?
announcement from
Aug. 15 said.
The

talized

achievements of American work¬

spirit in

mand wage increases

going to add more
facts to your reconversion story.
Fortunately, most of them are on
the bright side. In the main they
show that our country is in an un¬
exampled economic position. This

hear stands at 58 million
plenty of criticism. To that which going up.

the

This

Today I'm

the

were

text

The

than

that

all construction

to charge all

follows:

us.

believe

Today, every American should
stop, look and listen before he
puts more dollars into circulation.
This is no time for businessmen

warns

"I expect we are going to

"We

October

further and say

eyen

spend any money now that does
not have to be spent.

Federal

consideration.

and strengthening*
abroad for Chines©

advices added: 1

contracts for deferrable

that

is the record:

is constructive we will give every

Shanghai
of extend¬

enterprises, a

Shanghai on

the

physical
changeover
of
most manufacturing plants, which
produced
war
goods has been
completed.
",f
Total production of goods and
services has reached the highest
/. "We are aware of the fact that peacetime peak in our history. ...
j
Demobilization of our armed
our
decisions did not fully meet
the hope of the consumer, labor, forces is virtually -finished; eight
industry and farm groups of this out of ten discharged veterans

before

credit standing
News Service

con¬

that

government

country," he said, "but we have
constantly kept the public interest

channels,

tive

Recently the Reconversion Of¬
fice was obliged to tell all Fed¬
eral agencies that they must let

con¬

struction

than each really needs?:

corporation Isr

chiefly for the purpose

that we. still have a lot more

construction until

ernment

John R. Steelman

OPA Act, the three man Decontrol
Board rendered its decision at 7 p.m., Eastern Standard Time, of
20
regarding
livestock,*
Aug.
•meats; dairy products, grain, cot¬ the underlying reason for 'the de
cisions.
In this connection Mr.
tonseed products and soybeans. The
decisions were arrived at unan¬ Thompson stated: by the new

finance

organized ; in

at
US$500,000,000
andfc
| put off after that date must be Ch.$5,000,000,000. This initial cap-'
t h ef picture"
put off. You know the reason ital will be subscribed by govern-*
in the defer¬ why.
The Federal Government, ment and commercial banks, trust
like all the rest of us, must not
ment of gov¬
companies as well- as other com-*

Roy L. Thompson explains basis for, decision in radio address.
Says Board had broad public interest in view, and expressed hope
that labor leaders will restrain their impulse "to get theirs: while
getting is good" and that consumers will use wisely their increased
required

new

industrial

"must not spend any money now

•v'A

being

darker side of

that

purchasing

To Aid Industry

balance after the war only to disr

had to

atten-

tion

Broadcasting
Network, Aug. 17, 1946.
••

Renders decision restoring control over meats, fats and oils, but
leaves milk products and grains, except feeds, free.
Chairman

Chinese Finance Corp.

work to do.

called

American

Decontrol Board Reports

full em¬
and fair

Indeed, we're gone ing loans to domestic industries,
economic diverting idle capital to produc¬

picture.

ment, he also

by Mr. Porter

address

the

over

reconver¬

sion

Paul Porter

quired by the

job

great

just yourself toi increased prices
for automobiles one day—and, on
the next, to coffee price increases
—and the prospect of price boosts
(Continued on page 1043)

lan-

peacetime production and
ployment with fair wages
profits for all.
(

this far in regaining our

reporting that

coming

been

the

an unex¬

ampled
posi¬
tion." Though

I know it's hard to have to ad¬

Stripped

new

is in

rather thick and-fast of late.

days.
4

its

statement re¬

WTOP on Aug. 17, when he

Steelman in a radio talk over Station

gust, as you can see, the OPA has
been given a clear mandate to get
as number
of necessary price in¬
creases out of the way.
As a re¬

istration

So,

war.

last week issued

the
full,

Together, we won
Together, we will* win

months.

ampled position." Says reconversion achievements can be dis¬
cussed "only- in term* of the superlative*" Sees,, however, darker
side; in the picture inlideferred construction, and cautions this is
no time for
profiteering, or for wage increases without corre¬
sponding gains in productivity. 1
A bright picture of the economic situation was painted by Mr.

r."

our

porting total income payments now exceed wartime peak, follows
it up 'with a radio address asserting "our country is in an unex¬

At the very end of

act became

Steelman

at Peak:

OPA executive

splurge of
-price increases
issuing from

Let volume production be
motto
for
the next few

world.

By'PAUL A. PORTER*
Administrator, Office of Price Administration

YOrtK CURS CXO HANQC
ANDCt.ES STOCK EXCHANGE
SEATTLE

SPOKANE

THE COMMERCIAL & FINANCIAL CHRONICLE

BALTIMORE

Elected Directors
At the stockholders meeting of
Gulf Atlantic Transportation Com¬

Bayway Terminal

}
$ 4

Davis Coal & Coke
•»'!C1,;

(-y« •

•

-Mi;.4,vV.;iA-••*.•

•

Class- B Common

Noxzema Chemical

•;

•'

-v

4-_..r

< hi

•

STEIN BROS. & BOYCE
Members New York & Baltimore Stoek

Exchanges and other leading exchanges
S.

CALVERT
■

;

ST., BALTIMORE 2
Teletype BA 893
>

Bell

New York Telephone Rector 2-3327

WHEELOCK & CUMMINS

BOSTON

forthcoming visit to United
Exchequer, Hugh Dalton, points
although Mr. Dalton .is ostensibly coming as British rep*
resentative on International Fund and World
Bank, his prime pur*
pose is to discuss' with Secretary of Treasury Snyder
regarding
problems and policies arising mi of: Anglo-American Loan Agree*
ment.
Among questions to be discussed are (1) liquidation of
British dollar pool and the Sterling
area; (2) utilization of dollar
loan; and (3) effect of U- S. rising prices and. possibility of a
"slump,? in this country.

•

Preferred*

ctsrrent

interest

",: W'VM *•.

-h-)

LONDON, ENG.—Chancellor of the Exchequer Hugh Dalton is
due to pay shortly a visit to the United States.
For the first time
;
since
he
as-^
—

Sionx

Dwight Mfg.

MOINES

Phone 4-7159

1606 Walnut St.,

PH 30

Purolator

7-1202

;

request

;

Inquiries invited

I
j

Gov¬

of the International Mone¬

motive is somewhat similar to the

MILK

Stock

Byllesby & Company

Iff

—

Tele. PH 73

Phone Rittenhouse 3717

Boston Sand & Gravel

U. S. Sugar Corp.

ST. LOUIS

By All Nations to Avoid Inflation
Winthrop W. Aldrich,

Stix: Ss Co.

Stearns Mfg. Co.

INVESTMENT

Trading Markets

STREET

Phone 04336

Teletype BS 373

Members St. Louis Stock

Exchange

SALT LAKE CITY
TRADING MARKETS

American Air Filter

'Sikk'i:

for

Boston Edison

BROKERS and DEALERS

Girdler Corporation

Boston Real Estate Trust

UTAH MINING

Louisville Gas Pref.

Lamson Hubbard

STOCKS

REctor 2-5035

States Permanent Representative
to the Economic and Social Coun¬

Inter¬

cil.

| The

with

dealing

text

which

Chamber

were

ing

Established

>»

incorporated

1898

W. H. CHILD, INC.

m BANKERS BOND ££

Members Salt Lake Stock

Exchange

BROKERS

let

Floor, Kentucky Home life Bldg.
LOUISVILLE 2, KENTUCKY
Long Distance 238-9
Belt Tele. LB 186

■

•

June 20 and

world trade.

able in

credit
W. W. Aldrich

policies, infla¬
tion,
transi¬
from

Long Bell Lumber Company

Gisholt Machine

ZfZZdZ-Sv:

y;'Bank and Insurance Stocks

Industrials—Utilities

Memos

for

the

their

war

Phone 5-6172

peace

econ¬

October. 15.

Similarly,
Chairman

Philip
the

Inactive Securities

F. L. PUTNAM & CO.. INC.
i

Members Boston Stock
Exchange

77 Franklin

Street, Boston 10, Mass.

Tel.

Portland

LIBerty 2340

Providence

Springfield

avail¬

Economic

consideration

earnest

own

governments and the
and Social Council a

United

areas.

Reed,

Subjects to which principal at¬

States

tention is directed in the resolu¬

UTICA. N.Y.

NORTHWEST MINING

...

Oneida Ltd.

SECURITIES

Quotes call TWX Sp-43 on Floor
of Exchange from 10:45 to 11:30
A.M., Pac. Std. Time: Sp-82 at
or

Company

Request

BUCKLEY BROTHERS
Members New York, Philadelphia and
Lot Angeles Stock
Exchanges
,j
1420 Walnut
New York

Utica & Mohawk

Cotton

Los Angeles

Members Standard Stock

ZZ"

Angeles

Dealers

Branches at
;

MOHAWK VALLEY

INVESTING COMPANY
inc.

Underwriters

Peyton Building, Spokane

Private Wire System between
and Lot

Z'MZZ^ °* Spokane

Brokers

Exchange
V

Kellogg, Idaho and Yakima, Wn.

the preparations for the

Trade

the

Conference,

during the
transition period, and the special
situation relating to the restora¬
tion of transportation and com¬
measures

to be taken

munications.
the

interim

state¬

of
problem of inflation is in¬
cluded, in which emphasis is given
to a series of "homely truths."
ment

pressing nature

the

Pointing out that today's out¬
standing monetary problem is in¬

STANDARD SECURITIES
CORPORATION

Pittsburgh, Pa.
Hagerstown, Md.
\N. Y. Telephone—WHitehall 3-7253
Philadelphia, New York

Mills, Inc.

are

World

INQUIRIES INVITED

Street, Philadelphia 2
.

Preferred

Common

other hours.

are now

restorations of communica¬ program that would advance re¬
tion and transport, and to prepa¬ conversion and trade recovery and
rations for the proposed World deal
promptly and effectively
Trade Conference for which pre¬ with the emergency phases of the
paratory discussions will begin in transition in the war devastated

For Immediate Execution of Orders

Secondary Distributions

21)

printed form; The resolu¬
tions represented the findings of
140 delegates from 18 countries,
whose object was to recommend

They relate
to
monetary

SPOKANE. WASH.

Eastern Corporation

y'y;

resolutions;

of the Council of the Inter¬
Chamber in Paris (held

urgent
mat¬
affecting

tions

PHILADELPHIA

Retail New England Coverage'

the

national

ters

London

Stock Exchange
Building
Salt Lake City, Utah

Teletype SU 67

New England Markets

adpoted at the meet¬

omy,

New England Lime Co., Com.

Telephone

tion

Winn & Lovett Grocery

Megowan-Educator Food Co.

International

the

transmitted these
declarations of policy to the State
Department and to the United

con-

adopted

and

Merchants Distilling Co.

Lobster.

has

Chamber,

national

American Turf Ass'n

75 Federal Street, Boston 10
Private New York

Associates

elusions

the

Arlington Mills

Dayton Haigney & Company

policies. Stresses need of recognition of economic laws,

the Council of

LOUISVILLE

Consolidated

United

the

series

Teletype GR 184

the stability of currencies, and the removal of trade barriers.

Nations

Exchange

GRAND RAPIDS 2"
MICH. TRUST BLDG*

Corp.

Is 10 P. 0. Square, Boston 9, Mass;
Telephone Liberty 8817

Detroit Stock

President of the International Chamber

Social Council

..Sx^LqiLiis IfMpf

white, noble & co.
General Stock & Bond

sions

Members

Winthrop W. Aldrich, President of the International Chamber of
Commerce, has transmitted to the President of the Economic and

SECURITIES

509 OLIVE

M. J. Whittall Assoc. 2nd Pfd.

•

of Commerce, offers td Economic and Social Council of UN conclu*

Douglas and Lomason

Eastern Utilities Assoc. Conv.

,'- h-y

able

Economic Laws Must Be Obseived

Simplex Paper,

Nu-Enamel

were

having to find ex¬
cuses for their meeting, and with¬
out arousing
sanguine exoecta(Continued on page 1035)

PHILADELPHIA OFFICE

of the Treasury Snyder
problems vital from the

Central Banks

meet without

Stock Exchange Bldg. Phila. 2

CRAND RAPIDS

—

(j
•

some

for Central Banks" at which heads

Teletype BS: 424

N. Y. Telephone CAnal 6-8100

■■

these

retary

Exchange

Buhl Bldg., Detroit 26
Cadillac 5752
Tele. DE 507

STREET

HANcock 8200

institutions.

But, important
meetings undoubtedly
will be, the main purpose of his

BOSTON 9, MASS.

;

Detroit

of the Bank for International Set¬

visit will be to discuss with Sec¬

H. M.

& Dolphyn
Members

that led to the establishment

one

Mercier, McDowell

Pont, Homsey Co.

ernor

two

Send for Memo on

request

WARNER COMPANY

,:'T'

,:t

du
:

the

velopment, to attend the meetings tlements in 1930. That institution
of the Board of Governors of the was primarily meant to be a "Club

Manufacturing Corp.
Report furnished

with

sonal contact

Bank for Reconstruction and De¬

Rides Again!

Shelter

British

two

tary Fund and of the International

Descriptive Analysis
on

''GRAVEL GERTIE"

request

to the late Lord Keynes

Secretary
of the United
States Treasury,
and, to a less degree, with the Fi¬
nance Ministers of various other
governments.
In this respect his

British

Electromaster, Inc.
Prospectus furnished

forth¬

visit.
He will go to
Washington in
his capacity of

DETROIT

Products

sire to establish and

his

coming

Paul EInzIg

is not the of¬

Private Phono to N, Y, C*
COrtlandt

May to appoint himself

ficially de¬
clared
object

rica

number." This

Philadelphia 3

Pennypacker 8200

Bell Tele. DM 184

representative on the
Boards, his decision was in¬
fluenced not so much by his desire to take direct personal share
in ? the work of the two; Bretton
Woods institutions, as by his de¬

"op posite

BUILDING
9, IOWA

successor

stock*

BOENNING & CO.
DES

lieve that when, Mr. Dalton decid¬

views with his

and Common

EQUITABLE

financial and economic relations.>■
In fact, there is reason to be¬

have

an
opportuni¬
ty to exchange

American Wringer Co.

CoiPmon

will

point of view of American-British

office

present

City Gas & Electric Co.

his

sumed

So. Colorado Power Co.
■fe1 '< k Preferred

Paper Co.

United Light & Railways Co.

Boston Wharf

•v

Southern Advance Bag &

Iowa Power & Light Co*

have

INCORPORATED

ill commenting

out that

Reed.::
"

;

Washington Visit

States of British Chancellor of the

London observer,

In New York

•

Emerson Drug
*
CommoR

]

Mr. Dalton's

Ogden to Be Formed

Frank B. ,Bateman of Blair
& Co., New York City; Harry W.
Link, Jr., Cohu & Torrey, Miami,
were elected directors. | Other diGoldwater, Frank & Ogden is
rectors elected were Commander
being formed at 39 Broadway,
J. H. Coppedge, President of the
New York City; to engage in the
company; H. G. Williams,, Vicesecurities business,^ .Partners will
President; Edward McCarthy, Sec¬ be Leo X 1 Goldwater, - Isadore,
retary; Harry S. Parker, Jr., B. D. Frank; Charles *D.
Ogden, and
:
Fincannon, G. W. Codrington and Arnold J.
Wechsler, general part¬
»Raymond Fox.
ners, and Edith R. Kohlberg, lim¬
ited partner. All have been with
DES MOINES
L. J. Goldwater & Co.,
pany,

'•

Goldwaler, Frank &

Thursday; August 22, 1946

238

Genesee St., Utica 2, N.Y.

Tel. 4-3195-6-7

Tele. UT 16

flation, the statement says there
is severe danger of a repetition
of

conditions

of <1920

and that prices are
the

world.

and

1921,

rising all over

asserts

that

important extent the inflationary
V

(Continued on page 1035)

;

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

Volume 164

Government and Labor
By HON. THOMAS E. DEWEY*

Wants Treasury's
Tax Experts Fired!

World Ever-Normal
;

Granary Plan

By HERBERT ML BRATTER

Rep. Curtis (R.»Neb;) says Secre¬
Washington observer comments on Sir John Orr's proposal for an
Republican Governor ofNew York defends principle of labor- tary Snyder -still retains experts of f/ever-normal world granary and its place On agenda of forthcoming
the Morgenthaii period, whose the- / Conference of Food and
unionism, but cautions that • < organized labor cannot "injure the ■
Agriculture 'Organization at Copenhagen.
ories of using taxation for "com¬
Gives views of L. A. Wheeler/of U. Sw Agriculture Department and /.
'fij many?; by its action*: Assertji!|4ew York State has had fewer in- //
14 dustrial conflicts than elsewhere I and attacks "government arbiplete redistribution of' wealth"
text of Sir John Orr's plan.
i3*'M?
11
have been rejected by Congress.
trarily iinjecting itself vinto labor /disputes." <; Lauds progress of
An American delegation headed by Undersecretary of
Agricul¬
mediation and arbitration under his administration and points out§
A demand that Secretary of the ture N. E. Dodd is to
participate in next month's annual conference
recent benefits conferred by state labor legislation.
Treasury John W. Snyder "clean
of
the
Food$>
:—'
'
Says much
/
/
house" and fire so-called tax ex¬
and
Agricul¬ reported in the New York "Times"
of our progress was possible because of high order of maturity,
perts in the Treasury Department
ture Organi- of Aug. 10,
p. 4) has indicated
;' responsibility and integrity displayed by New York labor leadership.
who have been repudiated con¬
zation at that the
.

*'■

•

'•

For the first time in seven years we are meeting free of

the sistently by the Congress,

even

overshadowing threat of imminent or actual war against our free¬
dom. Fascism
®r~rr+—1 "
—;/ -V.
\
We have once again won on the
lias been de¬
battlefields of the world the right
feated and the
to go forward in peace, in the so¬
myth of i the
lution of our problems as free
I r r e s i s tible
-

power

men.

to¬

Denmark. The
main
agenda

was

made on

Carl

sentative

Aug. 20 by Repre¬
T. Curtis (R.) of

fore the Annual Convention of the

free labor unions just as

it is im¬

N. Y. S;tate Federation of Labor, possible to conceive of free labor
(Continued on page 1041)JEUxmester, N* Y., Aug. 19,1946.

Progress in Federal
Labor Legislation
By HON. JAMES M. MEAD*

Senator Mead recounts New York's pioneering in progressive labor

legislation, and points out that this was largely work of late
President Roosevelt, who carried out the principles in the New Deal
legislation during the depression. Calls attention to Federal labor
legislation, particularly the Wages andHoursand the Full Em*
ployment Acts; Holds there is still room for additional state labor
legislation and urges an effective and sympathetic administration
of labor laws, a competent Labor Department and a continuation
of basic protections at the Federal level 'without greatly handicapping State actions.

\
»

will

world

board
were

"For several years a Democratic

Congress has ignored tax recom¬
mendations offered by alleged ex¬
perts brought into the; Treasury
by former Secretary Henry Morgenthau.
The top-side
of the
Treasury, including men like Sny¬
der and Undersecretary Gardner,
is certainly a big improvement
over the unlamented Morgenthau
setup, but the glib young men
down

the 'line

are '

still

come

voters

reflected clearly by inaccurate
background information these so^
tailed experts furnished a writer
for; the Chicago "Sun" this week;
is

Championing the Treasury's Re¬
pudiated tax thinking, the writer
Republicans of sponsor¬
ing a flat 5% reduction in 1946
personal income taxes when the
act

revenue

1945

passed.
He charged this provision 'gave
nothing to anyone except those at
the top.' The true facts are this

particular
sored

was

provision was,
the Democratic

spoilt
con¬

which
made

ary'

embodied

the

world

■

Postwar

Monetary Problems

By WOODLIEF THOMAS*

Director, Division of Research and Statistics Federal Reserve System
>

Asserting task of Federal Reserve is
sion of bank citdit and at

same

to prevent inflationary expan¬
assure stable interest
rates,

time

research director of System holds task

can be accomplished only
by giving Reserve System additional powers, as recommended
its last annual report. Points out disparity between short-term
long-term interest rates has led banks to prefer government
term bonds and to increase their reserves by selling short-term
issues*
Sees credit expansion in shift to commercial loans and
/holds effect of higher interest rates would be higher cost of
gov¬
ernment financing with decline in bond prices.
Gives as possible
curbs to credit expansion: (1) debt
retirement; (2) increased
reserve Requirements; and (3) additional issues of
long-term bonds.
Outlines Federal Reserve Board proposals.
.

The central problem facing the Federal Reserve System in the
immediate future is to reestablish and maintain control over bank

tion for / which - the/'System was
established;- Effective control has

pansion in bank credit and bank

deposits. The differential between

been lost" because under the exi¬ long-term and short-term interest j
gencies of
been

finance there has

war

increase of $70 billions
commercial bank holdings of
an

by the Senate Democratic leader,

seems

Senator ; Alben/ W/i Barkley; // It
incredible for administra¬

and

individuals/ ^wbich

can

and

thus

create

These

additional

bank

reserves can

vide the basis for

pro¬

ten-fold

encouragement to

banks
long-

term issues. The short-term issues:

(Continued

on?page'1038) }

readily sold to the Reserve banks
reserves.

to shift from short-term to

government securities and of $100
billions in. holding of businesses

tion

rates

ex¬

*An address by Dr. Thomas be-

fore

Central

States

School

the

means;

When I entered the New York
;

(Continued

on page

1027)

:t*Ahvaddress by Senator Mead
before

the

eration

first
this

half
cen-

clean

out his

ment

form

tax

top

time to do it is

Legislation in
of

the New York State Fed¬

: of
Labor: Convention^
Rochester; N. Y;, Aug. 20, 1946. /

study depart¬
bottom.

now

Sen. James M. Mead

WE ANNOUNCE

tion of really constructive tax leg¬
islation

when

the

80th

Congress

gets under way."-

tury.vfeflsySi^

■

The

anticipa¬

THE. OPENING OF AN OFFICE
f' ivi-r'e

//■
•»'»»«• «> v'V

.•

■<<'*>

?'.V

•.

V'." -.y v.1 ^

is. /•

jtf.i

former

wage
earner
in
the
rail¬

MERCANTILE BANK BUILDING

road

know

industry
something| about

the conditions of labor in the early
1900's. As an elected officer who
has been in public

We Announce the
A

John J. Hesi

Opening of

Department to Deal in

BRITISH SECURITIES

dallas, texas
UNDER THE MANAGEMENT OF

ROBERT K. FOSTER

announces

change in name

Goodbody & Co.

HESS & M
INVISTMINT

Members N. Y. Stock Exchange and Other

SECURiTIKS
115 BROADWAY
Telephone BArclay 7-0100

BRoadway 5536

> •

American Bank Bldg.'

Principal Exchanges

ATT Teletype TD 254

Portland 5, Oregon

NEW YORK 6, N. Y.
Teletype NY 1-672

Banking, University of Wisconsin,
Madison, Wis., Aug. 1,1946.

great gains
which Labor
has made by

credit expansion—the main func-^>-

trolled Senate Finance Committee

underlings to be bushwhack¬
ing Barkley. Heretofore such a
situation
has
been
It is always a real satisfaction to me to be able to speak at the slap-happy
Convention; of the1 State, Federation of;Labor*; I want1 to discuss with limited to the staff of the Demo¬
cratic National Committee.
.5
you today the^
^
hopes and as¬ I have seen the changes that have
/'The Treasury has made prac¬
pirations of come about which have made the tically no contribution whatever
the working life of working men and women to constructive tax legislation for
people. I want not only in this state but in the several
years,
Secretary Snyder
to
review nation better and happier and
should recognize this situation and
some
of the more hopeful.

b 1 i

there.

taxes 20% for 1947 If the
elect a Republican Con¬

for
food

c
in food plan recently presented by
ashington Sir John Orr," the Administration
on1 J u ly
5, seems not to be clearly united on
1946, by FAO's the/mhtter/^
Herbert M. Bratter
At least the State Department
director, Sir
seems to have some doubts about
John Orr.
'
Although the White House (as
; (Continued on page 1027):
u

Their mania for

reaching the so¬
cialistic objective of complete re¬
distribution of wealth through tax
legislation has not been cured by
successive
repudiations
by
the
Congress. They are now thrown
into, a state of panic by a Repub¬
lican pledge to cut individual in¬

the

proposals

accused

U. S. Senator from New York

before

meeting

said;

"This mental state of frustration

the

Nebraska, a member of the taxwriting Ways and Means Com¬
mittee; of the House. Mr. Curtis

gress in November.

item

You, and the goo<L hard-wOrking men and women you repre¬
is
exploded;
we have made
sent, have played a full-size role
in : defeating
fascism.
Our own
progress. I am
generals and admirals have freely
happy and
proclaimed that the production
proud to take
miracle which was your handi¬
part in open¬
work was second
only to the
ing. this meravalor ot our armed forces in as¬
orable con¬
suring victory.
In our nation's
vention of the
time of need you have established
New York
Thomas £. Dewey
State Federa¬
beyond all argument the truth
tion of Labor*
^ r:/. - v .m* that free labor has incomparable
In the State, of all the industrial resources of strength and spirit to
States of the Union, with the most contribute to the common good.
After long years of struggle the
mature' and ^responsible
labor
movement and the best record of place of organized labor in a free
industrial relations.
society is today established be¬
yond dispute. It is impossible to
♦An address by Gov. Dewey be¬ conceive of a free society without
talitarianism

principles of the proposed
are agreeable to the United
States Government, and although
Secretary of Commerce Henry
Wallace (in a public statement
which
was
published
in
the
"Chronicle" of Aug. 15,
p. 888)
reports that the Cabinet "has in¬
dorsed the general principle of an
international 'ever-normal gran¬
board

Copenhagen,

when the Congress has been con¬
trolled by the Democrat Party,

•

Blyth kcojnc

/,
t

THE COMMERCIAL & FINANCIAL CHRONICLE

1014

Thursday, August 22,; 1946

Higgins, Inc.—- Analysis of the

Trading Market

Dealer-Broker Investment 7:77
^

&Gas Common

try—Detailed illustrated

C. L Schmidt & Co.
,

E»tablished 1922

T«L

/.7 7 7:7'''7-

Street

CHICAGO 3

Business

Tela. CG 271

Randolph 6960

brochure^ Analytical

•-

Quick review of

the

•

Fi^st National Bank
Hquston' 2', Texas.
.

investment

Rapids 2; Mi'Chv .;

Building,

Member, National Associatibn
of Securities Dealers

.V*

Middle West

and Wellman Engineering.

companies and pertinent facts
23 others—also included is

Aspihook Corporatlott^-Circular
—Ward-&

DISTRIBUTION

nies

650 S.

135 La Salle St

—

Write

Department

F-2

Broadway,

4, 111.

Michigan 4181

CG 99

revised'

brochure—Comstock
South'

LA 255

231

Salle

Avondale

Paper

Consolidated Gas

Cordage
Mfg.

;

•

■

«■% •

Circular

p J ®'

'■-*

draulic Press Mfg; Cbr:
California

Co.;. / Lav; Planir-Choate. Sttauss

Co;;- Mohawk

Rubber

HICKS 6- PRICE

Hidden

Members' Principal Stock Exchanges
Chicago Board of Trade ,,
So. LA SALLE
-

Hazard®64-page illus¬

methods

man

1 Wall St.

Chicago,

Schenley Distillers Corporation
—Brochure of articles they have
been

running' in the Chroniclerto Mark Merit, in care of
Schenley Distillers Corporation,'
350 Fifth Avenue, New York
1,
N.Y.
' i
' ' :

Car Corporation —. De¬
circular
for
investment

tailed

Company

South La Salle Street, Chic¬

write

;

be used when re-%
dehlers on quality railroad equip¬
ment issue—ask for circular CC—
building new houses
jChefford Master Manufacturing Blhir F. Claybaugh &
—Insurance
Company of : North;
Co.f 52 Wall
CO.—Detailed circular pn situation
America, 1600 Arch Street. Phila~
Street; New York 5, N. Y.
—iPeltason, Tenenbaum Co., Lan
ShelleV Manufacturing Corp. —
delphia 1, Pa. r"
dreth Building, St; Louis 2, Mo.
-t /'
'
Marchant Calculating Machine Recentreport—Mercier, McDowell
&
ICC Revises- Rail Forecast—Late'
Dolphyn, Buhl Building, De¬
Company—Comprehensive analydata-r-Vilas
troit 26, Mich'.
Ghicago Corporation — - A- ndw si^-Kaiser &>
Hickey, * 49 .Wall
CovRuss; Building
analysis Cf ihe company, which is San Francisco
Street, New York 5, N. Y.
'
4, Calif;
ndw listed on the N. Y2 Stock Ex^7
Shower^ Brothers' Co®Analysis*
Quarterly Canadian Review® change; with special reference to
Munising Paper Co.—Detailed —Caswell & Co., 120 South La?
the Oil and Gas Division—Hicks &
Summary and review—Dominion
study of situation—Sills, Minton Salle Street, Chicago 3, 111,
*
?
Securities
Corporation, 40 Ex¬ Priced 23L Soutb L4 Salle Street; 6
i Co., 209 South La Salle Street,
Chicago'4,'IIL
r
change Place, New York 5; N. Y,
\ r4, 111.
Soya Corporation of America—

972®

Randolph 5686—-CG

New York Office

Coiii]pdiiy

3, 111.
Also available, is a memoran¬
on Standard Milling Co,-

iviagor

Cp.,n 208- South. La /Salle

Finaneb

dum

Utiiiiy<*-Discus-

Stireet, Chicago 4, 111.

modeling

134

are memoranda
Eastern Corporation and Gisholt

Company®Summary

ago

Pa. Also available
on

Detailed; memorandum- ® -First

Street,' Philadelphia 2,

Machine Company.

trated booklet" onsafeconstfiiction^.

ST., CHICAGO 4

1420 Walnut

sidn—circular "C i®Fred W. Fairr

231

;

Securities

is d Study of Iowa
Southern Utilities^ Co^jpanyv ;

; '

•

Long Bell Lumber Company—

Central Public

House/ ^f Cb'.7
New York * 4;

St. Louis PublloService

Consumers Corpora¬

hlsO~'available

a®7r:S®7 "

NewTYork/4, N. Y,

Street;

Corhprehensive analysis ^Kaiser
& Co., Russ
Building, rSan Fran¬
cisco 4, Calif.
/ f " ::
:" u

Co., 155 Montgomery.
Memorandum—Buckley Brothers,
Co%;j Street, San Francisco 4, Calif.

parquet; MacFadden Publications,
Inc.—Strauss Bros;, 32 Broadway,'

Request

Worsted

Oneida, Ltd.; Nathan Straus-Du-

The-Muter-Co.
V ;.

Cleveland

Broad

Seaboard

Street,
j )

Engineering Co:;'Plymouth tion: ®Detailed reports

west

Hi* Chicago Corp.

Co.;

outlook—Joseph Faroll & Co.,
29 Broadway, New
{York 8* N. Y,

hurst & Company,. 40

review contain¬

Mills; Gisholt Machine Co.; North¬

'J,; i

Utilities Corp.

•

and

Manufacturing7Co®

Knberoid

Mills-^RepOFt-^Luck- Chicago' 4', Ilk' 7 ' v
Exchange : Also available are
analyses of
ing brief analyses of Rhinelander Plhce, New York 5,- mMPP'1 - Miller Manufacturing Co. and Hy¬
Geared to the News—-Brochure

of comment

and

Co.,

State 6502

Long-Bell^ Lumbev €0;^ New

Rockwell

Analysis—Steiner,

Lipe; • RoIlWay Corporation —^
Study--rDaniel: F»: Rice; & Coj> 14'J
Wesc Jackson Boulevard, Chicago

Mohawk

Baircalo; Haloid.'

N. Y.

Rubber;
New
Jetsev Worsted; Oil Exploration;
and Ta^j^vWka^n;irdii;:^ Steel;

—

"W^Ldcfell

W. L. Douglas Shoe Co.; Gen¬

Coirp.;

Boane, 70 PineiStreet, New York 5,
N;
7.. 7 :& ^

Spring St

120

eral Tin; Hartford Empire; Lanova

Lynch, Fierce; Fenner; &•

Merrill

LOS ANGELES 14

CHICAGO 3

Corporation—Cir-

Inc., 55 Liberty Street, New York
6, N. Y.

Also;^^ available "hre;piem(M:hhda

Showing;-pdncip^L brands
faCtpred hy: 33/prominent compa^

MARKET

SECONDARY

Co-.,

New York 5, N. Y.

table

iipe-Rollway

culaa®Bettick,

of the! industry' and
individual analyses of 35 leading

UNDERWRITERS

Reeves Brothers,
Inc.—Analysis '
•New York Hanseatic
Corpora-tion, 120 Broadway, New York 5,
•

tant segments

Pacific Coast
®777®; For 7

Foods 1946—Examination of the

—

'j'1

food industry as a whole with de¬
tailed; information on six impor¬

Wholesale Distributors

/ j

;"Argo Oil Corp.r-i)escriptive. cir?
Herd County^ Lend Companycular—Seligman, Lubetkin & Co.,
Inc., 41 Broad Street; New York 4, Special report—Maxwell, Marshall
& Co., 6'47 South Spring
street, N. Y.
N. Y, ■ .
^
^
Also available is an
Also available .are circulars on Lqs Angeles 14, Calif.
.analysis of
Marathon Corporation
Tennessee Products, Temple Coal,

publication of which is

being resumed- by Loewi &

Cel., 225: East; Masoii Street, Mil¬
waukee 2, Wis.
*
|

CARTER H. CORBREY & CO.

•.

New York 5; N. Y..
'

business
now

»,

Red Rock Bottling; Co. of CleveBendall Company ® Circdla® iapd®. ^embTahdUm® Frank Ci,
Mobre S£- Cb/,^42;
Broadway, New
Adams & Peck, 63 Wall Street,
York 4, Ni
7 7/ '■ •

Kneelahd & Co., Board of Trade Build¬
ing, Chicago 4, 111.
—

Digest-

Financial

possibilities

Fred B. Prophet Company—De¬
memorandum—De Young,

tailed

& Trust Lorn
Larson & Tornga, Grand
Rapids
panie®Md^yearf statistical com- National: Bank
Building, Grandpatison--B;; V. Christie • & : CO.,

indicating

brochure

speculative )

Strefef,: New;Yhfk:C K;Y77 ■■'

!Exchange Place, New York 5>:

^Iouston Banks

American Window Glass: Co®

—Bache* & "Co., 16 Wall Street,
New-York 5, N. Y.

ical study—Hirsch & Co., 25
Broad1

It U understood' fhakvi4. firms frieniiOned fvill t>& pleased
i to send interested parties the folloivirig-literature: >®

..Agricultural Equipment Indus¬

120 South La Salle

Recommendations}arid Literature

Central Electric

Pennsylvania Raiiroad^Analyt«'^''''

situation and" prospects for appre¬
ciation—J. F. Reilly & Co., lnc^.

•

•Well*-Gardner & Co., Com.

Su^On Tooll' Corp., Com.
Cribhen & Sexton Inc., Com.

Longines-Wittnauer Watch Co.
7

•-7/7

Common

^Prospectus Available

7//; /7/7 7:7

•

Request{

•

Chicago

■■

...

ymi RDavls &Uo.
7v>7

Established 1916

Branches

Guenther Law

Incorporated

131 Cedar Street

New York 6, N. Y.

Telephone COrtla'ndt 7'5C60

Boston

'■

•*-'

*■

Chicago, Rock Island.

7 •;

Pacific

/:'*//,.

Steyenson-^ Railway—Circular—Bendix, Luit- alysi®Brailsford
weiler & Co., 52 Wall Street, New La Salle

Tenn® Cloth — $3.00
;
r

per

Chicago Philadelphia $an Francisco

I SINCE 19081

J Fred.W. FairmanCo. I

Street, Chicago 4, lit

Rational Terminals

international

}

V;^

•

■

will be "The Future of Interest
Rates" and "The Outlook for Gold
and Gold Shares'WWrite to

ond study—Brochure—Dfean Wit-:

Corporation

Wharf

and

Purolator

Products.

Dept.

FC-822.

Memorandum—Adams. & Co., 231
South Let Salle Street, Chicago- 4*;

(Montgonlery Street,, SanU:Fran^/

111.

Boston

cisco 20,>Califv

California,

Company,

Inc.,.

300]

Foremost Dairies, Inc®Memo~

•

for banks, dealers and
Co® brokers—Troste®Currie &.Sum¬
Special report—Cohu & Torrey, 1 mers, 74 Trinity Place, New/York
WaH Street, New York
5, N. Y. i 6, N. Y.

randum

& Light

Panama Coca Cola—Circular

possibilities — Hoit
Rose & Troster, 74 Trinity Place
New York 6, N. Y.

Warner * Company—Memoran¬

dum—H. M.

Exchange

Byllesby & Co., Stock
Philadelphia

Building,

wmm.

—We Maintain Active Markets In—

MUNISING PAPER*

DEEP ROCK OILi CORF. Common
F. L. JACOBS CO.

Common Stocks

51/2% 1952

interesting

1/1

Trading Markets

Utility

;

Convertible 5% Preferred

MOUNTAIN STATES POWER CO. Com. & Pfd.

AnalysisAvailable

* J

£ &

;,?V

) 'V

J;,;

7 J./'

;

i '> v',"

A discussion of this company.

208

SOUTH LA

CHICAGO
•

Telephone

Direct Private
Bell

SALLE

INCORPORATED
Members

Randolph 40g8
Wire

to New

York

537

IH. M. Byllesby and Company |
Incorporated
7.

SILLS, MINTON & COMPANY;

ST.

4, ILLINOIS

System

Standard of California^—A sec-'

Haupt & Co., Ill Broad¬ pects—Morelahd & Co., Penobscot
-c,::. />•;.
^ ;7/7i'
Syracuse Transit Corporation—
way, New York 6, N. Y.
r: Building,/Detroit 26^ Mich<
• '■'<® '| Northwest Leather—Analysis —
Raymond & Co., 148 State Street, Study of situation and outlook-^
Dwight Manufacturing; CO, ®". Boston 9, Mass.' Also available are J. V. Manganaro Co., 50; Broad1
"Why/Bpsts Always Follow In|flatioriary Booms"—Essay on fu^ Descriptive
;
ahalysis--du
Pont, analyses on Sterling Motors, Buda, Street,; New. York 4,. N. Y.
ture > of
Milk Street; Pollak.
market—Major Angas, Homsey Co., * 31
S
570 Lexington Avenue, New York Bostoji 9, Muss.;
r r
"
Transamerica s Corporation- —
22, N. Y.—$2.00—Also included
Memorandum and analysis—First
Northwestern Yeast Company
; Also available is' an analysis of

Central Public

iy"

'rX
-

MARYLAND CASUALTY

Write for C I, '

& Co^208 South

-V

etc.—Ira

'American- Power

v:f§

Analysi®Peter Morgan & Co., 3p
Nassau Street/ New York: 5; Ni Y.

National By-Products Inc.—An-

Plans Prepared-~Coftfercn& Incited

Albert Frank

ADVERTISING
Its

•;

Bridge ®Late memorandum for dealers terv & Co^45 Montgomexy: Street*
'Statistical Hand-Book for New Cbmpany — Recent study —F. J.
orily—Adams & Co;, 231 South JL0 San Francisco 4, Calif.
77 7
7.
Jersey Municipal Bonds—Study of Young'Co., -IncI, 52 Wall Street, Salle
Street, Chicago 4, 111.
counties
and
municipalities
in New York 5, N,. Y.
Steel Products EngineeringComNew Jersey- including suchr data^
New England Lime Company—
pany—Memorandum—Dempsey &
as rating, population figures, net
|C. H. Button Compariy®Analyr Descriptive circular — Dayton
Co,, 135/ South La; Salle Street*
valuation taxable, gross debt and sis for dealers only on 66-yfeat old
Haigney & Co., 75 Federal Street.
Chicago 3; I1L 7
\
/
net debt, total tax levies and
cash}, ccjmpany with interesting* pros¬ Boston 10,, Mass.

Indianapolis, Ind.
Rockford, 111.
£ Cleveland, Ohio

All

B'etroiF

Teletype CG 405

■7/7

Brock

Investment

York S.N. Y.

copy.

10 So. La Salle St, Chicago 3

FINANCIAL

Funds®Alec

Mutual

ville,'

Chicago Board of Trade 7

Vanderbilt University Press, Nash¬

Members Principal Stock Exchanges

Tel. Franklin 8622

f 77
Chicago Stock Exchange

'/:/'■.

209 SO. LA SALLE ST.. CHICAGO 4, ILL.
Telephone Dearborn 1421/

.135 So. La SaUe

/' f
7 /

> :.7 Teletype CG 864

Telephone State 8711

'/"/•.

Street, Chicago 3f

Teletype CG273

Direct

Private

Wire

WHITE

CO.,

New York 7//.:

New

York

Philadelphia

Pittsburgh

Minneapolis '

I ~P'.

Volume-'164

?}.$$;*Ukx'&fc •

Number 4518'

THE COMMERCIAL & FINANCIAL CHRONICLE:
William O.

Dixon, Cutter & Dixon
"
:
Doheity, A. M. Kiddor: & Co^l; /
Eckstein,'-'O'Ccnncll & Janareli ; v
Walter'/ Li / Filkinsi v Troster,, v Currie ' &
•i:
Summers■> ^
V
2222^2;^
Edward- A. Flsohen, Lewisohn- & Co.
; V
Sidney H. Fischer,. Western Development

Charles

William

NSTA Notes

CO.

:■*:

Noel- &
•

•

"T—

<■/,'

A..

Dominick*

Harold

Charles

.for' vote of -the*

•'

N£#on$i^(^^

September/; accorcungr to; a:
'message' to. the membership from Thomas Graham/ Bankers Bond
•Co;; President of the. Association, and, Edward Hi, Welch, Sincere j&
Cot,;Secretaryi
<
,

1.. Increase-'..'Executive

Council^

amendment to take effect Jan. 1,

eleven, electing.' four by. ijote. of
National
two

Committee

instead

at: present.

1947;

•!-

11.

Wording of amendment No,

10 identical except; amendment to

SOn-

&. Curtlsv

Charles

S:.

George

Hale

Chas.

Horace

Sidney Holtzman, J. F.. Reilly &. Co,
Irving Ittleman, Strauss Brothers

tiring4! President,;
"Executive

name

Council"

for

4:00*

p.m.,* Tuesday Sept. i7;
194$, to considerr/ constitutional
changed. Mr. Graham,, as-.suggested by certain of the affiliates,

changed: to ''BoaH of DirectbM"

Ten

members of the Executive
has asked counsel to check the
Council, (or Board of Directors)
shall constitute a quorum at any associations =: present? constitution
and recommend any changes or
'meeting, thereof.. T ,v* !.r;
j, •
( * 5; There' shall be added to the corrections/as to foriri only;

-Each

•

committee: shall

have

•'

Cbriimittee^

Co..

Wm.

a4yance of the? convention.';

Alfred-McGowan, J. G. While & Col, Inc.
Sidney- Mendelson,

Shaslian

declined from

Says there

mittee will be executive.-

Invited

to be present are: S (1)/ presidents
of affiliates,.. (2) all past officers,

ise no^

"Since VD

spending

W ' MXMBERSh'
TRADERS

THE

OF1

ASSOCIATION

overi

all; duties?/ari&

moved to Denver in 1919 and be¬

McDermotfr

v
Sachs, j! CK White 8t Cor

Nashville

now

vested

in the Nai-

tional Committee;
Quorum shall
consist of two-thirds-' of the eligii
ble> membership. - ♦

10. The office of Executive Sec¬

retary'Shall be* created; the dutfefc

^ wmpwisaltowtflt belspecified

by the National; Committee. This

Knox

John,

Chicago^ Rock Island
/ & Pacific Ry.

Scrimgeour, J> K. Rice, Jr. & Co.
Oakley Shorten, Newborg & Co.
Alan- Sikora; Wm. J; Mericka
Co.,

Thomas

Iiic.-

Preferred & Common

Irving J. Silverherz, Seligman, Lubetkin &

Co.

Charles X
Thomas
.

Missouri-Pacific R. R.

Thorntbn, i Thorntrn

Trager,

Fenner

James-

Merrill,

Vauderbeck/Grimm

Chicago 3r lib
Tel. STAte 4950

Harry Vander Noot, Pell Si Company
J. Gerald von
Schaumberg, Merrill, Lynch,
:
Pierce;. FOhner &.Beantr/
D.- Kinsley Waldt'on; Wv J.
Banigan & Co.

Active

Clark

Cor

S-.'.V.y

.•'v;.••;

Sol; Bross? f; M; Mayier & Co.
/
Gilbert B. Browrf; Jr., Wertheim &

Co..;

Thomas

Co.

Charles

;

J; Brown,. W. E.' Hutton:&
Bruggeman, Dean Witter &

John Francis

)

BusiZ

disposable

the

Com-

"di

b le in^
com¬

at the rqte of
dollars i a yeari;

was^

on an:

upiwarq:

continue?until;

to'

At that? time

war.

savings-amounted to

v/Femtfer & Beane :
?■ ' ;
(
David H., Callaway, Jr,,:First' of Michigaii
.

Donald

Daly,

Maxwell.. Marshall

Joseph

Davis,

inc.
Eugene Roy Delin,

Bond

about|8% of

had entered the war.
By the
end of 1941, when we did go to

j0„n E, DoM»ye,,S«tro Bros.

,^,47
1
&

Co.

^BiootH Fisheries?

Go;

Comm

Co.....

231

,<M

CHICAG0 4, ILLINOIS
PHONE

St ATE OlOt

Aeronca Aircraft Corp*

Howard Industries,
*

Inc.

Hydraulic Press? Mfg. Co.

at the rate

of nearly

in the middle of

Kropp Forge Co*,....
^Long-Bell Lumber Company
*

Miller

Manufacturing Co.

Nutrine

Candy Company

Puget Sound - Power
& Light Co.
Trailmobile Company: /

142 billions

1945, and at 140

Company

,*J)etailed .Analysis Available
Upon Request,

CHICAGO 4
231

CorporatiSrilSi^.

S-.

/■

-://:/■/■

■

Teletype: CC 1200^

So. La Salle St.

Dearborn ISO)

Teletype CO OSS'

;

Company
i

Company 1 >
:
*MacWhyte Company
Rath Packing Company
Snapron Tools Corporation
I* u ^United. Printem& PuBlishers, Inc;
^United Transit Company

' V>'

COMSTOCK & CO.

Foote Brothers Geart & Machine
Corporation
Gisholt Machine Company,
*
*

/"'-'-/v//if

'■'M-

Macfedden Publications
Gisholt Machine

All Wisconsin Issues

'-v-;■•.Z7V"/' 1v:■'vVi-f.
*Prospectus available upon* request - - - •
■*.

OLLEY, DAYTON & GERNON

Member—Chicago Stock Exchange

ACAUXNANDCOMPANY

,/...■;/.

"77/ " ' '

SOUTH LA SALLE STREET

TELETYPE CO 361

year, and |he savings were being
set^aside at': the,!rat# of :36 biUions
annually; 5: The 'people i of this
cotiritTy/were- saving? alino^f 30%
of their incomes.
During the rest
of the war period' disposable
in^
corner expenditures, andv savings
continued- to expand; but; with
more irregularity-than in the
pre¬
vious years.
Part of the irregu¬
larity imsaVirig^ ist® be' atecounted
for by the. bond' drives.
> "No evidence of
anything like
a buyers' strike is
discernible, in

Hart: Carter

135 SOUTH LA SALLE STREET
CHICAGO 3, ILLINOIS

[

ADAMS & CO.

INDUSTRIAL COMMON STOCKS

Altorfer Brothers

uponi request'

incorporated

Requests

Leonard Ditteii; Lewisohr. & co.

'v/?:

Goodwin^

it ii M(>* &

-?•?

☆

disposable
income.
Both
disf
posablet income and the" portion of the words ofthe two 'final quar¬
it that ivent into savings
increase# ters of 1945* and the first one iri
rapidly-in- 1946 an# 1941, before this year. Disposable income was

■

Thomas

Commerce;
running"

/ "

sayirigs iiiCTeased: with ?still/gyeatj.

was

66: billioir

Circular

Common Stock

had

income

rate- /of. about

Co. j
'Burke, Merrill, Lynch, Pierce,

Corp.
;
-t
Ward Clay,; Jr.", Hardy
CdmiJariy/
Bernard J: Conlott, P. F. Fox & Co.
Edward'Mi COrley, Blyth"& Oct.. Inc.
Joseph J.. Craig,. Goodbody &•' Co. -

war,

mounted- to

tinues,

Leonarcl P. Ayres

the end of the

/'■">'

;

piled
by the
/ Department of

treri# that

DOYLE, O'CONNOR & CO.
616T

Trading Market

!;/TferiniilaIs./'
Corporsition:

/•-v'-v/ "

of? clbse^ thei disposable' incoirie was
1939," he- cottT rurniing-at the rate of 122 billions

anjdi it had- entered

Co.

Boggs, W, H< Bell- &> Co.,
Inc.
'■
'
William ^ BK Holand/ Bdiandf SafrinCoV >
Stanley Bruce Briggs, Mackubin, Legg &

*PTOspectu^ avaiiable

folophoae: Dearbont

Tele; CG. 28

National

Buyers' strike.'

rapidity in-1942; which was our
"Iri. the firsjk first .fUlI; year-of
war/ and at its

come

Hanseatic Corp.

Savings I

q.u-afrit e fc

135 South La-Salle Street

Bulletin

r u s

about

Geyer & Co.

•

the

pany.
-

NORTHERN INDIANA PUBLIC SERVICE COMMON

KITCHEN & CO.

Pierce,

Aiello, Spencer Trask & Cot
Bastian,

p o s a

yi,
T.

MIDLAND UTILITIES

'// *--/

& Co.

MIDLAND REALIZATION

.....

St Cos

Lynch,

•:/•:/.'.. Preferred-.

:-V

Beane"

Bosworth,

billions annually, and nearly 20%
by .of it.;was? being saved.
"Both, disposable - income/and
/ thej Cleveland

THE MEYERCORD CO.

!/.

with

TRADING MARKETS

HV D.

functions

associated

came

Chanute, Loughridge & Co.

Salisbury Union Securities Corp,'
Salmon, 3rd, Commerce Union

Alfred

issue

published

YORK

,Wm, Hammett

take

Col

annnai rate of .$42* Billions to $20 billions.

/ ness

SECTTRITV
NEW

The Security Traders^ Associai-

& The National Committee shall Hans E. Ben; New York
be abolished and- a Board of Di¬ Henry P. Bird? Charles

shall

Company

current

tipri/of;^

Mark

yectors/jori-BoardsOf> Governor^

from

Co.

in^ general beeri saving less and
of their current? iricome," Gen. . Leonard' P. Ayresi

Willard

Board of Governors,
place: The members
shall be the president of alt affilif
ates/ two members from the in¬
dividual membership, and the 11;
members? of the Executive Coun¬
cil e*-Officio.s The Board $ of Dit

graduated

was

F; Rice &

dky*Americans h4ve-

be National Com- t

evidenco of

•.

taker their

Peter

Price

Warner &

Dan'!

Brig.. Gen.. Leonard P. Ayres; estimates ^savings in; first/ quarter of .1

-1

by the President. There shall- be jits roster of members by one of
a ^airman; - viee^hairman( an# a'
I the, largest increments, in its liis4maximum of five individual mem- :
tory/ Newly admitted' to the Asf
berSmfyMv/;'v;" tt'PXr
^
/• socation are:,.
t;
8. The presidents of affiliates James B. Adams, Jr., A;. G. Edwards &

rectors*

Ryan,

illness of several weeks.

Mr.

Yale University. After serving as
an
officer in World War I, he

Glore, Forgan & Co./,/

Notes Rapid Decline in

The. session-of the National Com-

shall1 be appointed

Co*.

nute,- Loughridge & Co., Denver,
Colo., died at his home on Aug. 15
after

cases

Anderson &

W.
Price, Executive
Vice-President of Bosworth Cha-

Co.

Ralph-Martin; Kean, Taylor"
Co.
McCook, Buckley Brothers :
Frank T. McCormick, Dean Witter & Co.
:A.
William McGivuey, Harris, Upham- Ss

de Willers & Co.

Edward- William- Schaofer;

Robert

year

mittee iriembersi,.

Lebaire

shall in all

declined

Starling W. Price Dead

■

Cor

had.

C.:

Bank

Savings

rate of

to one of 120

Starling

Morris T. Sftkoff; James D. Cleland & Co/
$
Ludlam, J. Arthur Warner & Co.
Ketthetb. 0/
StMiford; •, Eiseler; si King/
Lutterman, Birnbaura- it- Co. -i
Libaire Stout & Co.
Laurence' H; Lyons,. Allen Sv Co;:.
John Raymond Stein, Strauss
Brothers '
Henry J. Mader,' Tucker, Anthony & Co.
Frederick M. Stem, Stern & Co.
;
Francis L.
Maloney, New York Hanseatic
Harry/A stiilman*' j: Ai-thdr "Warner &
/• Corp/ 0. . -.V
CO.
' - l-.r

phairman,Vthe Executive GOurif officers and National Committee
#i£ members shall: be ex-officio, members signing the present conand the president of each affiliate stitotiori in 193# at los Angeles
shall be a member of this com¬ Convention,
where
same
was
adopted.
* <
mittee/
J§| ■
.
. /;%/-/ #

King,

Paul

Special Executive Com¬

L*'-

Morris J.

(3) chairmen; and^vicerchairmen
NSTA. " This committee shall have 1 of / all ;!committees^ ?and/ vX4^ Sdjl

& Co.

»•.

Charles M. Litzel, Hardy &
Company
T. Livingston* L. j. Schultz & Co.
Allan- Lopato, Allen, & Co.

The subj ect of the constitution

the individual membership.
-6* There-shall, be added to the

NSTA

Jr.,

Russell,

Arthur

Robert

:#■^vita^oriearid;^ery"i^^

the

-committee may be appointed- from

mittee which

Reilly, J. Arthur

Edward" A.

year

G'KanO,

Osborne'CO.'

Prcllcr Junger,

sultation with the president of the

7. There shall be' added to, the
permanent
commi ttees
of
the

Go.4-

Ev Ricksen,

Herbert

billions

year.

period the expendi¬

from 42 billions to 20 billions, or
from 39% to 14%."

permanent committees a* commits
tee in charge of the; "Bulletin"—
the^ official
publication : of ; the

Eisele
»' :

Powell,. C. E.

Scott

men, and/at; least five members/ Busbey/ FrediEi Bushey & Co/ lias
A representative from each affili¬ been asked to have a report ready
ate shall be appointed'on each of for this, meeting; and if possible
i the above
committees after con¬ send pufcjto the?entirerriteuibershiiy

af^iliate^ v• Two?, members: of

100

billions.

composed of Henry; Arnold; Clair Samuel Milt, J. Arthur Warner & Co.
Si Mall &. Co.> Chairman; - Wm ; Hercules John Mottino, Harris, Upham & Gilbert Wehmann, Kalb, Voorhis & Co.
William. L. Weiffenbach; Chas. E.
Quincey
.4 •
PCrry; Brown; Newman 1 Brown: & | CO.
Co,
Co.; Stanley Roggenburg, Roggen- Charles F. Mountcastle, J, F. Reilly & Co". iDavid-Wittmarf,; Lewisohn &; Co.Thomas J; Mulliiis, White; Weld: & Co;
Roswell- J. Yunker, Hemphill,
Noyes 8i Co.
burg & Co.; Jerry. Tegeleif/Dempsey-Tegeler & Co:>, and Hon; -Fred

chaiiiriarii vice chairman-or" chair¬

TherConstitutiort

ReardOn? White, Weld' & Co.
Reilly, F. H. Roller & Co.

peimahent^ committees: of NST^
the following: -: •
•
Municipal, Corporate, Advertis¬
ing, Publicity/ Educational, arid
Government/ Bond* '.:

Osborne,
' J

Robt.

•

An executive session of Na/
tional' Committee :has been' calls i

thaf the

and

John

Petke, Garvin,; Bantol

Paris

ca! year.

Co>

Aloysius'Powell, J. Arthur-Warner

Thomas J.

quarter of this

same

/ .*■

Poole,

John. J.

Jacobs, Batkin? Jacobs & Co.
Royden Jacobus, Vilas & Hickey
;
Stanley J. Johnson, Battles Sr Co.. Inc.
Thomas Francis
Kane, McLaughhlih, Reues
St' Cd." v
'
' V
,
•, 'i-X}-'
'
r/.

of each affiliate
(by choice" of its -own members);
together, with the officers and re¬

Co.

Arthur

Sidney

Vice-President

Gcldwater

Warren V.

Commitr
man
of Nominating:. Committee tee; shall becomposed of chair/
MUtoit Kapl&n, M; C. Blttner &
Co., Ino. *
'each year/ §:f//' ;
man; and vice chairrnari, and.mem-/ D. Raymond
Kenney, C. E. de Wi.lers &
3. Increase" number of ' .Nomin- bers
be
Co.
appointed- from
iri:
vj /
/ ating
Committee from five:: to> dividtia 1; members of the ,NSTA/
.Reginald' J. Knapp, Geo. D. B. Bonbright
nine. "The president to; appoint
Co.-'//?'C .j:'13. Dues must be-paid on or beeight members;
ifbre Jan. 1 of each calendar year; Philip-C. Langdon, Weedon & Coi
Leroy R. (Larson,- H; D. Knox &.Co.
;: '
14. The Executive Council to be : amended fromi
Qct> 1 of- eacte fis/ Mkrt'h
Li^Iievy/Lee-willen &,Co, ;
-i
enlarged: to ; include President^ or
•

O'Kane,

Owens

Vincent

CO.,

J.
E.

Alfred

2.2. Retiring:. ex~officio member ;takeeffeciJan.
1-, 1948;
of Executive Cburicil to be Chairf
12. The
Membership

the first

In that

tures had increased from

Gper,/Merrill,; Lynch,, Pierce;;

Milton

Joseph

Herdling;. Thornton & Co.
«...
Robert " Mills Hinchman, Ira
Haupt & Co.
Brace1 C. Hoblitzell, Bruce C. Hoblitzell &
'

Roger-

Rudolph

Co.i

Ggden,-

-in

•

St* Co;

Stout

HaJe,, Charles' S.

Pierce;

Fenner & Beane#

F/" Kaufhianri;

Richard

Guttag,
Aisberg & Co.

Jr.

Willi am

Irwin
■

Edward

GregoryJoseph Goldenberg, Ira Haupt & Co.
i :\
H."-Frazier Gurley, Hallgartcn & Co;
Edwin S. Gutberletv
Paine, Webber, JackV

Lynch,
•

Bohner A

'Q'Doiine^:A>hUgfeidmyl:Bamptori:;.&<

:':v'"RUst.

Harold- W. Frank, Bonnor. &:

.'■*:),./if;/
The/Mlfiwing;
ndjgients;/"f# jhfeiCpnsti^

James?

Merrill

Beane

Murphy,

Rust

-v

Alstyrte;

Gregory ; . ■
Soron D. Nielsen,
Nfewburger, Loeb & Co.
Henry Oetjen;
Fflugfelder,
Bampton
.Si

Co.

S; Joseph? Florentine

—'/

1-v

c.V;'

;

Fitipatricl:/-

Murphy,

Fenner

Francis

1015

Chicago

■

New-York-.-

Incorporated

' Ro»tw

Mtlvrauhce'

105

So; La Salle

CG 262

;

Eau Claire
-

M!nneapoH$/

' " Omaha

St., Chicago 3, 111.

/t'/v..

Central 0780-

Offices In Wisconsin
-

Fond du Lac

JMadison

La Crosse

Wausau

lot)
f * '.w• * »„

'iV:..- } >
:■
4 £ -Ui* fs ap, -,»!>'

-■•Hu

valves

OhioBrevities

and

The; plant,

control

Thursday, August 22, 1946

* P•. *

equipment.

to> reportsj
cost $750,000: * V
* C '■
y Kf
/•■/ / *
* /> * //
' 1-1

according

•

Net earnings of Goodyear Tire & Rubber Co., Akron, were the
Cleveland Electric Hluminathighest in history in the first half of 1946 and sales set a peacetime
; ing Co., in the 12 months endedrecord, P. W; Litchfield, Chairman, announced. The net profit for
this period totaled $15;088,189,- equal to $6.59 per common share, ?vJune 30, 1946, earned $6,696;088, or $2.39 per common, share,
and compares with $7,509,863, ,or $2.90 per common share, for the
as compared with
$5*73(1,393, or^
six months ended June 20, 1945., Consolidated net, sales fort the first
half of 1946

were

$1.97

$282,736,1*71*; as<*;

of;
Industrial
against $407,991,835 ^1^. the 1945 1 The1' directors
period when wartime business Jtayon Corp., Cleveland, on Aug.
tt increased the qu^terly /divi-?
was near its peak, a$d $152,931,?
046 in the first half of 1941, the Fate on the cortimon stock from
37 % cents a share to 50 ; cents
previous peacetime record.;

Rolling Mill Co.,

The American

Middletown, earned $5,218,129 dur¬

which ;is

record

This -t brings

the

second quarter of 1946, dividend rate to $2 per share on
after all charged and provision for the hew common stock which was
income taxes, Charles R. Hook, issued April 1 on a basis of two
its President, announced. This is shares for each' share, of the old
equal to $1.53 per common share, no-par common stock. In 1945 the
after preferred dividends, on the old stock paid a total of $2 per
share.
3,240,533 shares of common stock
At
the
same
meeting; the
outstanding. For the correspond¬
ing quarter of 1945, Armco earned
board; elected Haydeh■' B. Kline*
who has been Vied President of
$2,071,925, equal to 54 cents per
the company since 1930 and a
common share.
The consolidated
director since 1933, to the, newly
earnings for the six months ended
created post of Executive Vice
June 30, 1946, after all charges
President and to membership
and provisions for income taxes,
on
the
executive
committee;
amounted to $7,022,616, equal to
which increased from three to
$1.93 per common share after al¬
four. •VVM
lowance for preferred dividends,

against $3,947,428,

$1.02 per
share, for the first half

cortimon

Mr. Hook also announced that

directors

declared

had

dividend

common

share,

per

payable

cents

Sept.

holders of record Aug. 15, or at
the

rate

same

15 and June 14,

tive

paid

March

Past. The usual

dividend of $1.12)4
the 4*/2% cumula-

quarterly
per

preferred

declared

V'. ..;

;

stock

was^also
Oct.
15
to

payable

two

signed

was

between the Columbia
Corp. and an in¬
vestment banking group headed
&

served by the

area

company.

Electric

jointly by Blyth & Co., Inc. and
The First Boston Corporation for
the underwriting of the Columbia
corporation's distribution of 2,040,000 shares of Cincinnati Gas

held

Oil Co.

(Ohio)

Aug. 19 de¬

clared dividend No. 123 on the

$10

par

value

common

stock,

amounting to 25 cents per share,
payable Sept. 13 to holders of
record

Similar

30.

Aug.

pay¬

ments were made on March 15

;

banking

combine

t h

Being Explained to UN

"2111

Herrick,
wellconsultant,
now

known

labor

member

of the editorial

the

staff of

winter

will
tion

speak at the second

explaining

recep-r

American

cus¬

ness was

management
lives

ing business.

each other

Our business

The topic will be "American So¬
cial and Economic Life and Mo¬

tives." The purpose of the series is
to

present and discuss American

customs, background, institutions,

habits,
those

puzzle

thinking— particularly

Fred Ruage

cinnati

Gas

stock for
Columbia

common

six

Hydro-Power, Inc.,

foreigner.

The

talks

portunity
make

ask

questions

writers expect to offer any un¬

shares to

the public

11.

about Sept.

started / operations

Municipal

Trade, New York City, August
14, 1946.

central banks of both countries.

the

two

countries.

V'y Land Trust Certificates
Philip Carey Com. & Pfd.

W. D. Gradison & Co.

(Incorporated)

Members

Established 1899

.•

Stock

Chicago

York

Cincinnati

and

Curb Assoc.

Terminal Building

The English text of the agree-

Todd

TeL Main 4884

194-3, J. Herbert Todd
a

was

elected

member of the Board.
Mr. Todd is President of Todd

and
Repair Company
has been prominently iden¬
with
ship
construction
throughout the United States.

and

Tele. CI 68 & 274

tified

Government

Northern
;

Ireland

the

and

Swiss Government.
London, 12th March, 1946

>..*

Circular

Union Commerce Bldg,
Cleveland

14,

agreed

part, have

Exchange

Teletype CV 594

BROADWAY

NEW YORK 6

prac¬
-

Governments shall enforce the
of the official rate

all

use

the basis of

transactions involving a rela¬

tionship

between

the

rencies.

two
-

cur¬

(4) The Bank of England and
the National Bank of

Switzerland,

agents of their respective gov¬
ernments, shall fix by mutual

agreement the maximum spread
or

below

the

official

which will be authorized

rate

the

Article 2

(1) The Bank of England (act¬
ing as agents of the United King¬
dom Government) shall sell sterl¬
ing \ to; the National Bank of

fol¬

Field, Richards & Co.
Union Com. BIdg.

CLEVELAND
Tele. CV 174

Union Cent.

Bldg.

CINCINNATI

Tele. CI 180

the Swiss

Swiss

(a)

exchange be¬
franc

and

the

rate
as

(hereinafter

against

"the/official

rate")

Contracting Governments

ex¬

cept/after giving to the other

Swiss

francs

with

the

National

Switzerland,

pro-

vided that the balance stand-

re¬

shall not be varied by either of
the

under

credited at the official rate to
the Bank of England's No./1/
Bank

£i.;;

(2) This
ferred

Switzerland,

Account

sterling shall, be Swiss francs

17.35=

INCORPORATED

Ohio

WM. J. MERICKA & CO.
14

may

(3) In all territories where they
have jurisdiction the Contracting

make to residents of the sterling

tween/ the

Members Cleveland Stock

Britain

Great

Article 1

notice

required

(1) The rate of

CLEVELAND
1582

much

ticable.

the exchange regulations in force
in that area, are permitted uto

other

Cleveland Stock

Switzerland

lows:

Building

to restrict-

residents

Request

Union Commerce

agree not

and

the

Exchange

Both nations

arid the Swiss Government,* of the

Engineering

Company

Members of
:

(Continued oh page 1036)

Northern Ireland, of the one part,

'i--, V

(acting as agents of
Government) as may be
for. payments -which

Kingdom

l&'M

drew one each month for/
payment" phase of the operation.'
It was pretty rough going but
things had to either get better or

United

the

The Government of the United

GOTTRONt^RUSSEll&

markets which, they control*

j : .Kingdom of Great Britain and

Wellman

with the "We
put the bills in the waste basket

Monetary Agreement Between the

Drydock

CINCINNATI 2

Denver

Columbus-v-'-.V Toledo

Cincinnati

New

Exchanges—N,

Dixie

CLEVELAND
New York

I won't bore you

above
Herbert

ment,follows:

otis & co.

weeks until I arrived at the rriature age of 21 and could legally

The government of Great Britain and the Swiss government on
March 12, 1946, entered into a monetary agreement, fixing an official
rate between the Swiss franc and<$>
■
1—

provided that "if the two con¬
tracting governments adhere to a
general
international
monetary
agreement or if either government
Changes its monetary policy in
such a way that the provisions of
the/ present agreement would be
affected* the two governments
shall review the agreements."
J.

sum

availability of their currencies to each other's national* for Certain
purposes, and makes provision for change* arising ofit of a general !
international monetdry agreement to which each mayt become party.

similar bilateral pacts previously
entered into by Britain, the treaty

Red Top Brew

the

use

Treaty of March 12th fixes rate of Swiss franc at 17.35 to £1, but
a variation after "as muck notice as practicable/*
Fro*
vides for determination of maximum spread by mutual agreement of

tween

Whitaker Paper

Securities

whether to

Anglo-Swiss Monetary Agreement

Sterling and providing for set¬
tling balances and payments be¬

Sport Products

and Corporate

cide

buy a boat and sail to the Philip¬
pines. Actual formation of our
corporation was delayed lor some

permits

Gruen Watch, Com.

Distributers of

tre¬

000,: We started the printing busi¬
ness after flipping a coin to de¬

sign the papers.

——nil

Springfield
in a new factory building and will
manufacture oil hydraulic pumps,

Underwriters and

originally, with

mendous collective capital of $5,-

arid

suggestions.

turing Co. of Mount Gilead, has

subscribed

♦A talk by Mr. Rudge before a
luncheon of Young Men's Board

of the Hydraulic Press Manufac¬

The

much.

How does one get to such a pro¬
fession and why? What do you do

and

subsidiary

under¬

held.

stock

5 partners

that are likely to

aspects

the

Was/ Jwfthin sight

arid smell of thri \ Gowa'nus Canal,
and the year Was I932lVWe were

'American-

itself

13 years of

entrepreneur, as far as'i;was con^
cerned, was going intd the print¬

who today are
a
k in g

speeches

period

entrepreneur myself
That is a lovely phrase. Sounds
iike the University Club,'Brooks
Brothers, and modern banking
connections/ Actually, being
an^

by the hot air
by

over

being

season

ex c-c u

going* through the prbc-

ess

one

generated 4

public relations advertising?
1' '
I suppose the first, factor
thai
got me into a new type of busi¬

New
..b

when you are in the profession Of

area

I d

heated for

Tribune,"
Joseph
Barnes, foreign editor of the "Her¬

Corporation, lecturer and author,

the,

co u

"Herald

ald Tribune," Benj amin Graham,
President
of
Graham-Newman

y:$>'

eight

York

••

•

houses

room

Herrick, Graham, Barnes, Simons,

Eliriore

;

r -.;m

•

and May participating in meeting
at New School Aug.'22.
Mrs.

o r i

tively:

Todd Director of
Title Guarantee

;;

ott'ith^ street,s appreciation

Ry. Co. declared a dividend of 75
cents per share on the common
The common stockholders of t stock for the third quarter of
1946, payable Oct.; 1 to holders of
Columbia Gas of record Aug. 22
record Sept/ 6* This is at the same
will be entitled to subscribe on
At the meeting of the Board of
rate as paid on Jan. 2, April 1 and
or before
Sept. 9, 1946, at $26
Trustees of Title Guarantee and
July 1, this year.
per share, for one share of Cin¬
Trust Company, held Aug. 20,

investment

history.

*'"v

nian^

blm;;i^]i

a u

will be informal with ample op¬

and June 14, last.

On Aug. 20, the board of direc¬
underwriting group was 228 mem¬
tors of The Chesapeake & Ohio
bers and ranks with- the largest

Gas

J ^ going to make one accurate quotation.'After an extensive
study, the Paul Bunyan Research Institute of Applied Science
stated

American Customs

distributed of the "Commercial arid Financial
split-up. Chronicle" will be Chairman.

was

& Electric Co. common stock. The

each

aim

(2) broaden

of the local business* usefulness to
(3) get better laW*
and lawmakers. Urges e£Fort to effect
guaranteed annual wage.

;

to effect a three-for-two

The directors of The Standard

Gas

ment cooperation;

meeting of the board of toms and institutions to members
Business Must:
J'
of the United Nations secretariat,
Tell Its Story to the Public'."
Columbus, held on Aug. 15, the the national representatives to the
My unenviable position is this.
regular quarterly dividend of 25 United Nations and their families
cents per share was declared on at the New School for Social Re¬ My thesis is entitled "American
Business Must Tell Its Story."
the common stock, payable on
search, 66 West Twelfth Street, on
Further, my profession, if you
Sept. 15 to holders of record Aug. Thursday evening, August 22, at
can dignify it by that term, is the
31. Like amounts were disbursed
8:15, p.m. Dr. Hans Simons, Dean
profession of helping American
on»March 30 and June 15, this of the Graduate
Faculty, will say
business actually to tell its story,
year* On March .6, one additional a few words of welcome, and Mr.
about which it currently talks to
share of copimqn "stock for each A Wilfred May, executive editor

;

agreement

Aug.

consumers

holders of record Sept. 16.
<•

|bu5in£ssineii- should

;

:.,yr

directors of The Schiff Company,

of 1945.

the

industrial

ofJ

in the Cleveland northeast Ohio ^

Aug.
annual

the

ing

power

use

t:ommanicatidn,'' as
°f present troubles^
(1); (increase/areas of labor-manage^

1°;

'earnings

taxes, and high levels of

payable Sept.

holders// of

11 tr to
28.

reflected
the .reduction in Federal income/

year ended June 30, 1945. The/
increase

By: FRED RUDGE*

Mr, .Rudge hoIds industry's first obligation in
public relations is
complete bonesty* Urgeia masteryaqf ^art* of

share, in the,j

common

per

Better Understanding of Business

/; /.

ing to the credit of that

ac-

-;/•;/ count is not thereby increased
/,

above

maximum of 86,750,-

//,./ 000 Swiss francs,

(Continued

on page

1044)

^;/

*'•

•

'■

;

>rA

■

YYYiY'Y

Volume 164
W»

.s"

.YYY*v.&\"

•

i/'j;15;V*""»IVY^"v\v.v1

-v"V

Number 4518

>;■ -YY

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•
•

-'.'v.,'

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■

& FINANCIAL, CHRONIC^©

'•.?■•.
•*

SEC
■

Suspends Ira Haupt & Co.

'''

Rules firm out of NASD for.20 days for .1 wilful violation" ofYiheY
Securities Act by not insisting on registration of Park & Tilford Y

Business

jtockofferedin 1943. "SEC admits* extenuating circumstances ?!

•

h of any acts

involving improper

Firm

V- "'

-m

tailersfcon-

J- ''-.frW'

decision clears
unethical conduct.' ' ' IY Y

Jall^Reiail Conference

''WASHINGTON, Aug. 21.—Secretary Wallace has invited

50 national retail

trade associations to

Sept,

and

13.Y Retail
trend

;

ers about the organization and ob¬
jectives of the National Distribu¬
tion Council. / '
;
''
v,

and

pending.^ the Stock Exc^pge firys?<.
;;^YY,YQ.
J1"!. :■ 1 ■'■*Y v-i flationary Booms"—Essay onsfuproblems will
of Ira Haupt ,& Co.. ton, mem- feet
market—-Major, Angas, be
our. status as; members of the tuVe • of
discussed
New York Stock Exchange and 570 Lexington Ave., New York 22,
bership in the National ASsocia
and
"the re-»
tion of Securities Dealers for a all the other
exchanges of which N. Y.—$2.00—Also included will tailers
will be
period of 20 days effective Sept. we are members nor our over-the- be "The Future of Interest Rates"
...

The

case

out of the dis¬

counter

and

month

tomers.

Gold

-.dealings for !our cus¬
The
penalty
imposed
period prior to June 1942 by Ira merely affects our relationship
Haupt & Co. of approximately with other members of the NASD
93,000 shares of Park and Tilford for 20 days.
Inc.- Stock through
sal$s on the
"The Commission's release con¬
New York Stock Exchange. The
firms our contention that at the
shares
were, ownfed
by ,David time we effected these transac¬
Schulte, who had the controlling tions on the New York Stock Ex¬
interest
in
the
company.
Ira change, there was no reason for
Haupt & Co. and; Schulte failed us to believe that these securities
to file* a registration statement
had to be registered.
The Com¬
with the SEC covering the dis¬
mission, in. the decision in this
tribution

arose

over

seven

tribution of the shares.

The

con¬

"The

Outlook

for

Gold

Shares"—Write

FC-822
hi:-:-V,-::

and

Dept.

Hazards—64-page illus¬
on

tion methods to be used When re¬

modeling

building new houses
Company of North
1600 Arch Street, Phila¬
or

—Insurance

America,

delphia, Pa.—Paper

the

so-called

,"brokerage

exemp¬

tion" provision, of Section 4 (2) of
the Securities Act.
In its decision the SEC stated:

"As repondent points out," the
decision noted; 4'the interpretation
of Section 4 (2)—[the brokerage
exemptions] --- has been the sub¬
ject of considerable doubt.
This
is the first case in which we have
held

the brokerage

exemption of

Section 4 (2) to be inapplicable to
a distribution over the exchange

case,

;

Controlling World Trade—Car¬

admittedly

Hill

Securities Act of 1933,

Book

Company,

Inc.,

West 42nd Street, New York
every
brokerage
N. Y.—cloth—$2.50. Y ;Y :
;
acted in its dealings

"Practically
house

has

330

how

best

that

must

done

•

bring

to¬

national

and

organizations

private

primarily

concerned
with dis¬
tribution and marketing.
Other

Henry A. Wallace

important

management associations to co¬
ordinate activities of the Govern¬
ment

job

the

sales, business, djstribution, and

the

Commerce

gether

help

kind

safe construc¬

overrules
its tels and Commodity Agreements—
Haupt & Co. was prior interpretations of Section 4
Edward S. Mason—Committee for
the distribution of the shares was
(2) which have been in effect
exempt from registration under ever since the enactment of the Economic Development—McGraw
tention of Ira

ment

- •

them

Hidden

trated booklet

ment

Depart¬

can
■

The Council has been set up un¬
der the auspices of the Depart¬

tell "

asked

the

ret

"Why Busts Always Follow In¬

over

two-day

sion.,on "Retailers and the Post¬
war! Selling Job." Mr. Raymond
Bill; Consultant to the Secretary
of Commerce,;will tell the retail¬

Department
Commerce,

'Q'%

participate in

ference at the

says

| * OnAug./SOy- the Securities and' Exchange Commission, after ,aU
investigation extending'over several years, released a decision sus¬

Fifty National Retail Association£"!o be; represented at two-day

Man's
:

•fit**

conference in Washington, Sept. 12-13.

(

because of doubt in interpretation- of section of Act
relating to
brokerage exemption, and says its conclusion ^represents a de¬
parture from previous interpretations.".

Wallace

JTITiUTT i—TTHTTTT

keep

key executives of the Department
of Commerce, whose offices and
divisions
provide
information,
educational material, and services
useful
to the retail trade, will
creased, if our factories are to be
describe briefly: how thfcir offices
kept busy producing goods. The
fit into the picture.
Department wants vto be of the
At an afternoon session th$ re¬
greatest practical assistance to
the 1,800,000 retailers of the coun¬ tailers will advise5: the Depart-;
try in the part they play in reach¬ ment of Commerce what the! re¬
tailers need most in the way of
ing this objective."
Under-Secretary Alfred Schind- services, informatioin, anc( jjacts
ier will address the morning ses- from the'Department.,
' ■ 1
the pipelines of distribution open."
According to Secretary Wallace,
"goods must be sold, buyers must
be served, and= consumption in¬
'

18,

with

controlling persons in the
sdmc-montier^s we-did under the
interpretations in effect prior to
this

decision.

The

SEC

frank

enough to admit that this decision
reverses its prior administrative
rulings. However, in imposing a
penalty in this case without any
prior notice to the brokerage in¬

dustry, they are in effect penal¬
by an underwriter acting for a
izing lis retroactively.
controlling person. And this con¬
"After a thorough investigation
clusion
jrepresents a departure
by the;Commission, it is found
from previous interpretations. ::
"Moreover, ; respondent's only that:iYUhandled this entire trans¬
action purely as brokers and re¬
profit appears to have. been the
usual
commission for executing ceived .only the usual brokerage
which
were 1 very
transactions
over
the
exchange commissions

commissions

in¬

were

smalpahd

inisi^hificant:

tion to

and these

total

rela

earnings.
significant hi relation to its an¬
nual earnings."
"It is interesting to note that
In previous interpretations of the Park & Tilford common stock
Section 4 (2) the SEC held that (including the whiskey purchase
the "brokerage" exemption from warrants)- is selling today at a
the requirement of
registration price equivalent to the highest
applied only- where the normal price it sold during the period in
operations, of -the broker as a questibttiYcY'
distributing agent were not ex¬
"We feel that the Commission's
ceeded^: and contended that in ya rejiectipn » of its. uwuilong stand¬
large and substdhtialv distribution ing position exempting the trans¬
of a large bloc of shares, it would actions
complained of and the im¬
be unpracticable for a broker to
position of a penalty without'pre¬
confine his operations to the nor¬ vious potice of the change in their
mal brokerage function.
position is completely unjustified,

Buring the consideration* of the
case, -the counsel for Haupt point¬

our

therefore, contemplating
appeal to the courts in this
ed • out the SEC not long ago matter which, we feel, affects the
granted the United Corporation public and the entire financial
permission to dispose of the stock community."
of a subsidiary through New York
Stock Exchange brokers. Regard¬
Plan China Power Plants
ing
this
contention
the SEC
stated:
"We have reached bur present
on
this phase of the
after careful consideration of

the entire problem and, to the ex¬
tent that the administrative inter¬

ruled."

reported, The advices from the

^0 Rockefeller Plaza, New

CNS at

a
separate decision, revoked the
York added:
previous exemption granted to the
"The
projected
United Corporation.
.

which
Statement of Ira Haupt & Co.

the

andc

release

Exchange

the

Securities

Commission

are

pleted

Haupt & Co., in commenting
sus¬

stated:
"It is apparent
mission's
release

from the Com¬
that

■

after,1

thorough investigation and hear¬
ing,
any

our

acts

that

It is most sig¬

the U Commission's

decision does not in any wise

af-

are

danger signals ahead for all investors who care

Yljiere is danger that, lured on by the hope

Y,.

Jih'.

bankers/Van Alstyne, Noel & Co. has a two-,

investment

fold function:

1m To

Y Y

scheduled to be

within

located

Changhsin,

Shanghai,
and

com¬

will

years,

Wuhu

nomic

the

Affairs

negotiating

ment
power

;

To the furtherance of this task

bring broad experience, competent

I investment dealers.

"•

! i

< I

% > -x.

Recognition of this dual responsibility prompts us to suggest to
on most worthwhile securities adequate information is

investors that

today. Get it through

Caution is necessary

investment,dealer.

your own

in investing wisely. Full data is

prime requisite.

^N'Alstyne, NOEL & co.
}-■&<

"•

«v

-v

•

reported to
United

States

purchase

52 Wall

t,i

Members

'■

New York Stock Exchange

New York Curb Exchange

Ministry of Eco¬
is

of hundreds of

Chilien-

machinery and equip¬
for; erecting the projected
plants.""

Hankow,

Resources Com¬

with

necessary:

through dealers throughout the country, to pro*
of these companies at fair prices.

research and statistical facilities and the cooperation

"The National
of

Directly

vide investors with sec

abundant;

mission

supply capital funds to well-managed companies, thereby

assisting in their growth.
2.

Street, New York (5)

1500 Walnut

y-i

of getting rich quickly,

their; teseryje$,-even th^i;,

piany inyespjrs^ay
to> part with
War Bonds, for secutities of dubious: value!

Like other

plants

power

firm has been cleared of authorities
{ for c! the
involving improper or

unethical conduct.
nificant

look and listen.

available

pending the firm from member¬ lung, where the supply of coal
ship in the National Association of and water power is
comparatively
Security Dealers, Inc., for a pe¬

riod of 20 days beginning Sept 3,

period of business activity, unprecedented

are,

plans are being
formulated for the setting up of
a number of power plants in sev¬
eral major cities and at strategic
localities south of the Yangtze
Riyer capable of * generating a

Iri the ^overruling," the SEC, in

Ira

peacetime, there

to a

pretations referred to and the total of
800,000 kilowatts of elec¬
principle involved in the United
tric power, Chinese News
Serv¬
case may be incqi^istenh with, that
conclusion, they must be over- ice advices from Nanking on Aug.
.

Preliminary

conclusion
case

As America looks forward
in

Street, Philadelphia (2)

.1.

IKIJHimy|i'iij ,■

1018

THE COMMERCIAL i& FINANCIAL CHRONICLE

Thursday, August 22, 1943

practically at an impasse, primar-, heeri -traversed 'to the
-days when
ily because of material shortages an ounce of silver was
rated at

at current

that

price levels.

Assuming

one-sixteenth
•then and up

building .program soon
gets underlay, it will still i be
impossible for high-costing- con¬

HOTEL STOCKS

For the first time in many years; real -estate investors have been
ceiling rentals, further, <the peak
a decline in hotel equities in
sympathy with general war years have permitted hotels
corporate securities.
The reasons iadvanced for 'this recession in! like the
Waldorf, Commodore,
prices (although without much selling -pressure) are: (1) that the' Park Central
and Lexington to
recently granted 20% increase in wages to hotel employees will cut
ireduce quite sharply their fixed
deeply into, hotel earnings, sand (2) that hotel occupancy .Will, decline
indebtedness, -resulting in substan¬
.from its war peak;
i; >
"1
1J""""i
: ..X, tial interest savings to the
vri°*
proper¬
High
Bid
cerns the factor of
competition J ties :ahd placing the equities in
1946
8-20-46
Commodore
S X tThe new construction program is; a favorable position.
12>/2
8
' ■j «

oati;

hardly

Lexington
Park

_______—

22^4
22

Roosevelt—

20
28

Waldorf-Astoria

10%

this

rea¬

the

soning
hotel

weight
be

cannot
stocks

——_

gainsaid

sub¬

increase silver bullion price io 31*29
view of Western mining journal

stantially from their highs (as in¬
dicated in the above table), more

"cheap":

are

You all know that
the

sharp distinction between hotels
favorable

to increase hotel

10%.

Most

confidently
crease

soon

hotel

than 50%

revenues

they

ance

are;

travel

and

conventions

^Perhaps
counter

was

formed

some

jRfu. G.

plans for the future.

g o
I

that

exerted in

was

held

been

(So,

eyen

f1 v

thoiigh

There is

corporate

banking

bid

of new

The

second

made

was

which (

house

was

flotation

issues.

frequently:

has

acted ;in the capacity Xof; agent
lor linstitutional investors.
It

or^

made little difference however#
since hoth hids iwere^iopped^h^

some mamifac-

\a4ender;entered.hy the Uriited

States -Steel Corporation.;

turers,;or^ll.manufacturers,.ihadan

increase in the price

guarantees the principal

militant

soon,

funds for the
smaller loans

two

active In the

;

provide

Only one M the two banking
bida received was entered hy a '
syndicate which. normally :Us.

far there has

action;

terest uf

every- encroachment

is going
at which
laid out to

very

signed

turers to have made any changes
in their prices, there would.liave

partial life, but

short-

falling due Sept. 1 next.

concerned,! all manufacturersr
holding to the prices which
were
in
existence
previous to
jjine 739. In order for manufac¬

back

outbid

were invited several weeks
ago to
be opened on Tuesday this week,
the sale of the bonds being de¬

are

brought

carrier: pperatinginJPenn-*
sylvania.
Bids for the new issue

are^

was

.proceeded

vast trunk line, is

retirement

mining West must have aj
pi: flatware,vit was ^impossible to
organization
to
fight; dp so. One or two manufacturers
on its
mining; announced increases, on the asa
campaign will be
industry. The House at Washing-the most cogent meet what we expect ? is coming ton; with its preponderance >Gf sumptipm ihat tGPA .would «lear
arguments con-r from the mining interests. 7 • •
eastern votes, can prevent the a^ver*; pf • fproximately ,10%,
j the failure of OPA to
/
expect another meeting

Co.,

the

ganization

direction
purposes,

haul

one

anticipated shortly after, that

that

The road, not to he confused
with the Union Bacific Railroad

another.

td be ;acdion by- OBAt which

all

[

Senators

your

practical

new

issuer

bonds of the Union Railroad Co.

see

expected

•"The.

plagued

were

fering of $7,900,000 first mortgage

present time, as far as
the prices of silver manufacturers

continu-t

of the

firms

two hanking syndicates for an of¬

across.

hundreds if not thousands of
per;
cent profit. 7

TJmrber

months
still .has

entirely
When, to
the

want to check up
Senators voted on

whether

pressure

campaign of falsehood)
used
in
the conspiracy against
William Jennings Bryan in his <
advocacy of 16 to 1; an anathema ;
by the powerful manufacturing |
-group -getting rich through its
purchase of cheap silver and.sell-;
ing it in manufactured articles at-

just

scrap.
The
E m Org en-cy
Com mittee

which

will (tend to moderate the
possible

the

very

beginning

instances

reduction in occupancy.

(4)

are

that

and

beverages.

out

the fight,

those

You can glance at
whether they were the
who fell by the wayside from

way

mining

lost

extremely

(3) Resumption of tourist and

miner

been swayed from straight think¬
ing by the plausible lies that went
out from the jewelry headquar¬
ters.
It has been but a

sure

is derived from sales of food and

business

came

there

hotel

many

spent io prevent the

you

your

see

it and

from getting an honest price for
his production. '
X
"
'
"Otherwise honest (editors-have

victory.

The

of hotel

afe

banking /in-1

for this week to bring something

the back of the hall so that
you

ones

interests

forthcoming.

possible decline

still

may

won a

case

how

can

industry
-j

were

the failwho had

the question, I have a list I am
gping to ask to have tacked up at

have 90.5 silver* after & beck of a battle.
question as! to who won. -Some members of

Others think it,

proprietors
that an in¬

occupancy,
true that the

profitable since in
more

rentals up

room

In
on

some

industry lost
iits f ig;ht.r

proposals

hotel

expect

nonetheless

business

room

will be

(2) Granting
in

ear

seems to

think that the.

apartment buildings, and has

lent

Cites

restore old 16 to 1

There

istration has granted that there is
and

•-vp-XJ) The Office of Price Admin¬
a

and Jbigher.

ounce

t>f

-some

looked upon as dependable
to come across with the needed
votes.

i .ratio with gold. Points out silverware manufacturers have not
increased prices, due to failure of OPA to
grant .price rise, hut:
holds present prices cannot
long continue. "

farsighted investors and analysts
advance the following arguments
to support their thesis that hotel
stocks

object to

silver,

been

Silverware manufacturer expresses (belief aim <of Silver Bloc is

Mfe

investment

derwriting

greatly ^disappointed

Chairman, Silver Committee, American National
Retail Jewelers; Association
/

and

retreated

have

What the mext

port *df 71-rcent

By WILLIAM G. THURBER*

XThe

.statutory." dustry now.has seen
nearly'fivpry^ounce.
thing!- Qnly a sshort while ago iiri'*

np one can. say at the present'time. '
with ; an.« ^epidemic X of ( private
But of one thing we
may be cer-J
placemenis, that is sale <of new se¬
tain—there will be one." r
curities direct by the issuer fo an
, In
contacting the various Sena¬ institution Gr (a
group of institu¬
tors down in
Washington, in sup¬ tional investors. But it remained

How High Silver Prices?

Savoy Plaza—
;_ 37 Vz
Sherry Netherlands— 16 V2
While

ward revision sdf^ fthe
price of gold to ;$35

Central——

questioned,

advance the figure to;$2.18, the'
price needed ( to
bring ; the 16-1;
ratio into: line with the r^cerit up? (

seriously

that, if experience teaches
anything, will come the drive to

Clinton-—-

After

confronted with

Governor

value

i "That this" is ithe present
major
objective <of the .Silver Bloc?

struction to compete with the es¬
tablished hotels at the prevailing

;

the

of gold,1
t61934,' officially es-*
tablishedat $20.67;
s.
' '
"

the

is committed

far xrs the new issue is concerned,"
The banking firms may have felt

come across
question -that they WetitMsm- sequringXits (righted?
$1.29 silver, and iit may be regards metal prices and a; fair? made (it necessary for tfieni to;
withdraw it.
$2.19 silver!
I think perhaps the
opportunity to finance hew min- \
best way to give you an idea of
At the present time, therefore,.
ing development.how the field is running is to read
"We are certainly without any PTiees^^BUyei^r^lateware;^^
the
you a recent editorial in the pub¬
fighting spirit when,we allow oUr; public will remain the same. How
no

want

and in-,

fwo (maturing issues,on a similar basis

eo»«;x:ause^r;!griinng hirttheis^;
suer

certainly had

ground for

heitigXupset:

" to the

con««"

trar^ f he; company* ;by.. reason vof
the Steel bid, xeali2»d v$ll0,000.
more4han.lt would have,(had bnly

ihe;'-fwQ7hankipg^

lication' entitled "The Mining Rec¬ rights; tbudoe
wiped- out (through long that condition will remain,! milted.
ord."- XXX ■
7 :XX;XXjX
the bureaucratic- policies of the; IldoThot toow.: Jt is my personal
XXXx; Par for 50-year 3s. ^>7-; ;•
This article appeared on
Deal,, * We
July New
.should
rebel opinion that if (there was to be
The biddersfortheUnionRail11, 1946, and bore the heading,1 against; this unfair eastern; doniir any rise of price in the finished
road Co. bonds were called
>tipqn?
"Battle for Silver Just
Getting nation and set up trade barriers if product, this -would be .the time to name the
coupon rate as well as
Started."
■
.'■/Xi* Xv4 needed to bring a- return of com¬ ~ror would have been the time- the price. All three named the
to do it, rather than a month or
"The campaign of
misrepresen¬ mon sense to the provincial east¬
same
interest rate, 3%, for the
tation carried on by the silver¬ ern group who ride roughshod six months later.
issue.
■'
^ i
;

■

REAL ESTATE

SECURITIES

ware

manufacturers and

over our needs.

jewelers,

and

in¬
against

SOLD

dishonestly

QUOTED

thinking

convincing

public

the

If present Congressmen from the
West ;are mot all put for every

un¬

phase of mining in their States,
they should be replaced."

Eastern

States and wobbly members of
the House at Washington that the
miners are trying to put over a

I think you can see from that
that the mining interests are not
gouge
on
the poverty-stricken; going to quit,
^ v
manufacturers of plate and jew¬
.1 would, like to read part of an
elry.
Such is the power of pub¬ editorial: that appeared in the
licity where uncounted millions New York? "Herald Tribune" uriX

SHASKAN & CO.
'.:?j Member t New York Stock
;

Exchange
Members New York Curb Exchange
BeU

PL.,N.Y.

der*date pf Aug. 5,
ili •
n

;:v

*Ah; M
Thurber

Dlgby 4-4950

Convention,

Teletype NY 1-953

by Mr.

before

the

41st

Annual

American

Retail Jewelers

National

i?y'

Trading Markets:

->•

•

1946.:

1/4*-

To the Silver BJoe, and

the sil^

ver

worshippers, in Short, the
law-(doesn't mean just a- new

new

and

means

that 70% (of fhe 'road back'has

•r'

-X';r-

—

The higher of the two

MaxEilgrey fo Study
Conditions in Europe

pany a price of

Aug.,

aboard

the

Holland-

American liner "Westerdam."
is

going to make

study of

ently

Belgium,

One bf-his first stops will be

Holland, where he has

ment with the Netherlands'

ister

of Finance

appoint¬

discuss

eco¬

that

to principal

Broad Street,

York

might (just

HELP WANTED

♦

the

and interest,, it
and

have

(Continued

on page

1049)

SEE INSIDE BACK COVER

HAnover 2-2100

mw\

*> V .>y>

POSITIONS WANTED

OTHER CLASSIFIED ADS

the

3% return af-

forded.

for
•

the

well hold them

investment

(benefit

nomic relations with his country.

Security Dealer< Association

New York 4

it figured

\\y'

Broadway Common

Members New

bonds good enough to guarantee
i-

Min¬

•

what

of its maturing debt, seemingly

decided

Holland.

and

surplus
funds
with the

and,

Treasury retiring another billion

eco¬

nomic arid financial conditions in

France,

having

available

Incorporated
:

banking

offered to pay the jcom-*,
?98.8Q, this repre¬
senting what was looked upon
;as a probable insurance company
bid.
The second banking aggre¬
:Max Bilgrey of Ira Haupt &
Co., Ill -Broadway. New York gation, which presumably con¬
templated reoffering to the public,
City, members of the New York bid a
price of 98.60.
Stock Exchange, sailed for Europe
U. S, Steel Corporation, ievigroups

Seligman, Lubetkin & Co.
A

EXbrook 8515

».

Tudor City-r-aH units

J. S. Strauss & Co.
Tele. SF 61 & 62

■

Fred F. French Investing Pfd.

Real Estate Issues

Montgomery St., San Francisco

Commodore Hotel, Inc.

California & New York

155

j:,,

Association, New higher price for silver; it

York, N. Y., Aug. 14, 1946,

Firm

,,,7

stopping

patriotic Congressmen striving to
secure a fair price for
producers
of silver in the
mining districts of
the West, has been successful in

BOUGHT

"The Federal Securities Law 4s
new
eastern develop¬
ment and. forcing J investors and
speculators into eastern ventures.
It 4s time to demand our rights.

backed by silver-using
dustries over the nation, •

40 EXCHANGE

■

./)!■«

'.'j|* ••"if-:i|". f
"'Volume 164" Numbef'4518:^

—►

Tfi

union

•

.**

"The nation's 40 million citizens who pay direct Federal taxes
face a rude and costly awakening if they rely on the Truman Adminis tj a.tion .to
•'
'■!',
:
3>
'"
■that few citizens seem to realize
protect
their,
r.

;
"

the

pocketbooks,"..
'■

Senator

staggeringly large sums of
revenue that are likely to be paid
into the Treasury in taxes. "The

Styles '1

Bridges of
Nfe

shire
v

Hamp¬
warned

'-S

•

much revenue

issued

Aug.

any year

much

19.

nues

::-^-n'ri-d-g-es-MS'-"
^ra'nking Republican
member of the

Senate Ap■

$39.6^bilUon,? .said iihe

Senator, "is really eight times,as

state-'

-ment
'

estimated

propriat i 'o ns
;Committee:
K

Sen. Styles

Bridges

was

prior to

available I in

1943.

It is las

aggregate Federal

reve¬

for the 10 deficit years from

July l; 1930,4 to June 30, 1940. l it
is nearly one-half of all
receipts
during the first 142: years of qur
government, 1789 to 1930."
| i
Sdnator Bridges asked: "What
kind vof double-jfelk is the Presi¬
dent feeding the American peo¬
ple when he stated on page four
.

Character-.

izing the President's* 1947 budget

of his

review

were so

can't

VJ:

"Boom and Bust"
!

vv'^'.-Vv*

much dirt. The
expect the Exchange
to,accede to its every whim but
one fact, which the union has ne¬
glected to point out to its mem¬
bership is that the Exchange has
never closed its doors to any rep-:
though it

Calls Trimait Budget

■«

/>; ■ V'\,{ v>;

i-?.,'!

l-i--

—

U-

bargaining.
To use the -Exchange as , a'
weapon with which to intimidate
the firms on the "Street" is! a
clumsy procedure that is veryj
likely to boomerang , with dev-!
astating force against the union
and so injuring the cause of union¬
ization a great deal more than
overcoming any resistance on th.e
part of the firms to recognize the
union, or; to negotiate terms. |
The union is trying to do in twp

ex¬

have

become

of its

out

Unwilling

difficulties.

huild stone upon stone, it em¬
ploys all available shortcuts.
It is
o

doubtful

whether

expanding

he rate it is the union

sufficient control

over

in the securities market for

the

which

National

should

Labor

have

juris¬

diction

over

union.

Harris, Upham & Co. be¬

lieves
on

that

since

does

business

national

scale, the National
should get the case.
The
kept
repeating
that
it

Board
union

doesn't,
tion

whether the National

care

the

the dispute with the

State

fairly

Board

that

and

election

all

has

jurisdic¬

wants

Harris, Upham & Co.,
Mr.' Broadwin

conducted.
the

point that the State
proceeds exactly as the

National

Board

does

and

con¬

any

tended further, along with counsel
for the union, that it has been

would

the

certain to

pf development ft rshould take

Board

raised

ly of particular partners in those

e§s

that

Relations Board and not the State

Board

tion of many firms—and especial¬

months what in the normal proc-

again yesterday, counsel
Harris, Upham & Co. contend¬

have

can

ants to be able to guarantee labor
peace

for

its lieuten¬

appreciable length of time. It
probably be safe to predict that rival unions will develop
out
of
the
membership
now
mushroohung into existence. The
present. situation portends only
coming jurisdictional strife,
Whatever may be the outcome
of the immediate struggle of the
union to gain recognition from
Harris, Uphaim & po,, the union is

sufficient heed of the determina¬

Aug. 4, ,1946, "an

very-, day and

profligacy," Senator fight the kind of "boom and bust"
Bridges stated:
^ which:;./loUow^ylW<^d.^W^|^..
?
"Although income for
fiscal Government wage policies, inven¬
1947 ?isvnow estimated fo be $39,6 tory hoarding by government
cpr^

periment

ing wild promises and acting

much-like-'the bull in the china

shop in its relations with the Ex-'
change and the firms with which
it is seeking contracts, however,
are certainly not going to get it
far. By .following such .a course,
is only making
resentative of the union. The Ex-; the' union
the
change has always been willing jto. struggle that mrnch Jhafder for ii,"
discuss the question, so to speak,j self
The union is giving- the, im¬
and this willingness to discuss | is
of. the very essence >of collective! pression of seeking the easy/way

any union two years or more )t0
achieve.
The union isn't taking

revised

1019

'Budgetary policies
major weapon to

>*v

—THE COMMERCIAL & FINANCIAL .CHRONICtE

run

into

stone wall of

policy of the National Board
cases involving financial

refer

institutions to

such time
to

not

State Board until

the union itself

com¬

national
involving simi¬
disputes over jurisdiction, but
involving financial institu¬

mences

basis.
lar

operate

Two

tions are
Court

now

cases

the

before the Supreme
United States for

final determination. The Supreme;

whatso¬ opposition from most if not all the Court will probably take up these
porations, restraints on production ever to do with the union. Some other
firms
on
the
"Street." cases in the fall. Mr. Broadwin oa
through OPA and other devices, firms, especially those which have Many of the partners of the vari¬ Monday reserved decision , in the
President clingsto{the #ld .New super taxation; of' private
ihstiju- shown h proper regard for their ous firms fear the implications .of case but, he: indicated yesterday
Deal habit of deficits, predicting a -ments of production and
The / union
will that he expects to reaph a deci¬
bureau¬ labor relations in past years, will unionization.
net deficit of $1.9 billion in 1947. cratic siphoning of private
pro¬ certainly succeed in resisting any probably find it easier to win the sion relatively soon.
.
,5
It's getting -30. that .deficits and duction income for non-produc¬
It is not known to what extent
attempt by the union to force an; respect of these men with whom
New Deal management jare virtu¬ tive 'New Deal experiments are
unsatisfactory contract upon them. it must-deal^^ personally eventu¬ legal delays in the Harris, Upham
ally synonymous. With;$8 billion among: the worst
iqflationajry The UFE will find that it is one ally ? by adhering strictly to the & Co. case may affect the union's
of ^estimated opiew
revenue that lie techniques that could be foisted thing for the large national unions terms of any' contract to which it plans to organize the Wall Street
didnH have in January of this on a
tolerant public.
$e,t the to organize the vast mass-rpro- affixes its signature. At the pres¬ community. The
fact that the
year he still
can't balance the' President' says his policy is anti- duction industries and
something ent time, this means adhering union's contract with the Stock
budget. In my judgment this is a inflationary.
This; is truly re- else for any
unibn, large or small, faithfully < io: .the terms of the Exchange expires on October 15
shocking state of affairs.
markable reasoning.
to organize small firms -such as, contract with the NYSE and the. will ^probably be the single most
"Despite honeyed phrases to
"There's only one solution to
with ! which; it important factor in the determina¬
are to be found on W&VL Street. other Institutions
the contrary," continued Senator the
problem,"
stated
Bridges, The UFE won't be dealing with has agreements. If .there is any¬ tion of what* the union will think
Bridges,
"the
/President v has "and that is an aroused, eyenN an
the management of large corpora-; thing tWall Street respects, it is a it should do. The union is seek¬
demonstrated neither real desire gered public.
Mere protests are
man's word.
tiohs^ub With *the ^
ing a multiple contract covering
not enough. The Federal bureaiuop leyeii /ability to satisfy- citizen
ners who own the business them¬
/ In the case of Harris, Upham & the entire industry end it is dif¬
demands that the Federal Budget cracy -needs a good housecleanihg. selves.
ficult to see how it could achieve
Go. and
firms—to

have

nothing

billion instead of $51.5 billion es¬
timated
in
January
1946
the

balanced.
continue

one

our

government

of administrative

squander-mania?^
ance the

^e; .can't bal¬
budget during war, nor

is it desirable that we try to do so,
but peace is a different matter.
For the past 15 years, however,
the successive Democratic admin;

islration

demonstrate that they
no. difference between war
and .peace—both are excuses for

see

We will

have fiscal sanity,
:
Face-saving would be a rela¬
budgets or justice for
tively easy matter for either side
the nations' taxpayers as long as
at this stage of the conflict and it
the New Deal bureaucrats qari
probably goes without saying that
claim every taxpayer dollar for
the .entire moriey and: securities
their own."
- *
market iii NeW Tork and else¬
never

balanced

the UFE before the New

York State Labor Relations Board, its objective without approaching
,a". question
of i jurisdiction; has the various firms at the same time
arisen.
In hearings before Trial that it • negotiates with the Ex¬
Exaiiciiner I. L. Broadwin .'Mon¬ change.
;r
•

"Looking a$ the Federal budget, where —because' New York is
Truman says, in- effect, < I
World market-— would probably
don't know how to cut it. but l ean
welcome such gestures pf friend¬

Mr.

sure

make it smell nice."

"The

fact

is,"

said
Senator
"President Truman | is

deficit-spending. R a immber>of Bridges,
the spending programs proposed .giving
the

country
a
budget
by the President had been adopt¬ further revised and designed for
ed, the budgetary deficit would 'be New, Deal boom and bust spead-r
even greater than the
$1.9 billion ing. The Federal Budget needs a
currently estimated.
sharp Presidential, knife and not
Senator
Bridges
emphasized just a sharp Presidential tongue.".
,

tllfall Street Union Runs Info legal S^ag tolls
Attempt to Obtain Election in Brokerage Firm

ship and good intentions
the union

either

Stock Exchange-

are being ap-f
proached by the union at this time
may
find it in their power to
make. When there is a will, they,

there is a way. No one has
anything to gain from a strike
prematurely called; Labor, if any¬
one/has the most to lose.
It
should be fairly evident, even to
the1 casual
outsider, that mer¬
chants
of
finance
have
amp(e
say,

funds with

FOR THOUGHT

which to weather out

Biggest business in the U. S. today is
food, with an annual volume of $44
billion at retail. Any industry so great

—with which to endure—any con¬

flict

that

tain operations during the .recent
walk-out of employees is an in¬
dication of what is possible for
the Exchange to do.

such

reveal some of the devastating ef¬
fects it can have on both "labor?

the

and the firms that

(Continued from page 1009)
ability of the Exchange to mainr elements that

make .for general
morale among its ranks.
When
the first flush of excitement and
drama are over; the .strike Will

develop in 'the
labor field.
Just how long the
public would sit passively by in
may

conflict

still

deserves the attention of many

another

angle to the problem.
If there are any labor malad¬

What is vfery likely to: develop
justments in the industry, it might
a really
prolonged and "management."
conceivably Jbe that this is as good,
and bitter .fight is - wide-spread
When the pay checks no long¬ a time as
any to throw the spot-:
over-the-counter trading in listed
er come in, tensions are bound'tp
light
upon
them.
Approached
^securities. Of course, the Board of
develop in ,aU .the ordinary rela¬ with the correct attitude, - how¬
Governors of the NYSE would
tions Which a man has with his ever, these problems don't have to
have
to
consent
to over-thefellows/ including his own family. be stumbling blocks in the path of
cpuntex trading in big .board se- The
*
unemployment benefits which amicable employer-employee re¬
curities' byj Ihertiber 'firips.. Th6
the strikers will be able to re¬
lationships. It might be very well
facilities of other exchanges both
ceive will be small and will prove for labor to realize at this
.point,
in this country
and in Canada to be little
comfort indeed, espe¬ however, that it can have either
imight also be
utilized.
-Many cially when it is considered that
high wages or a high degree of
members of the NYSE: are also
back at work \earmngs Would fbe
employment among its ranks hut
members of other exchanges and
considerably higher.A strike! is very Jikely mot hothC There is :a
transferring business from New not a
pretty thing to contemplate happy balance to be reached in
York to these other points would
from any point of view and for a the matter
of wages and this bal¬
be a relatively easy y-jrn&tter---- for;
union not to exhaust every pther ance is not
easily achieved.
If
them, at least ,in the pase of.
big possibility of coming to terms and when new
higher wage rates
board securities that are listed on
with an employer before resorting are
secured, marginal workers, in
other exchanges.
It is estimated to the
strike or, for that matter, the ranks of
labor, that is, those
half of the securities listed on the
even talking about
it, is a wery who can not measure up to' thd
big board are also listed on an¬
serious matter indeed.
standard of production or service
j; - ?
other exchange.
'In its present struggle for high¬ for
their
group,
will probably
The union is taking the matter er wages and
supposedly better have to look for reemployment
of the strike which it threatens
working conditions, the -union is elsewhere.
very lightly, it seems.
It appar¬ failing
to
distinguish betweep
In Wall Street, it is either a
ently forgets that in a strike it friends and enemies. The union feast or a
famine, as the saying
/will need all .the financial re¬ has had a contract with the New goes. If the union is merely try¬
sources it can muster, it will need
York
Stock Exchange for four
ing : to get what it .can for: its
v ail/the
friends
it can possibly years and it is a mistake of the
membership while the getting is
get,
it
will
need
sympathetic first order, from the strictly labor
good, then its actions are under¬
point of view, for fhe Union: to standable
but
the
union
will
is, all the tangible and intangible kick, the Exchange around as
probably be short-lived, too. Mak-

—and

investors

provide them with authentic

information bn which to base invest¬

in the event of

ment

decisions,

have published

"FOODS-^1946,"
This

new

business

booklet examines the
as

whole, gives de¬

tailed information

on \ six

im¬

portant segments of the indus*

and

try

supplies

individual

analyses of ,35 leading
■

nies,
on

compa-

pertinent

facts

23 others. Also included is

table

principal
|:|{
by 33 4
y.m
prominent companies.
a

well

brands

You may
1946"

;•

showing

manufactured

have

without

\»t

of "Foods—

copy

charge and without

obligation merely by writing for it.
Address Department "T-2"

Merrill Lynch, Pierce, Fenner & Beans
Underwriters and Distributors of Investment Securities
Brokers in Securities and Commodities
,r,.

PINE STREET
-

■

NEW YORK 5,

Uptoum Officex 730 iifth avenue

N. Y.
<

Mm-

1020

THE COMMERCIAL & FINANCIAL CHRONICLE

ranted

by^the facts.

of whether

Regardless, charges,

not, new legislation

passed it is obvious that
the present Missouri Pacific plan
is obsolete and will have to be
ever

double

pocket veto of the revised railroad reor¬
ganization legislation came as quite a suprise to the financial com¬
munity.
While the reasoning behind the action appears vague and
unconvincing the respite afforded gives at least some hope to pro¬
ponents of sound reorganizations.: The President ; declared himself
in

sympathy with the general

presumably

originally authorized by the Com¬
mission
such
a
change' shbuld

souri Pacific

bring
the

material improvement in

treatment

accorded

standing bonds.
Sinpe

turns qt the legislation but dissatisfied

■

the

also

Nevr

Arden Farms

into

Walt

analysts

Common & Preferred

least

1
.

well

the

rail

Productions

action in veto¬

ing the bill has further confused
already thoroughly muddled
reorganization picture.
Most fi¬
nancial circles feel that with the
necessary delay in enacting any
new legislation it should be pos¬

Common

the

Debenture 4s, 1960

Abitibi Power

sible

Paper

least

consummate

the

St. Louis-San Francisco and Den¬
&

ver

1st 5s, 1965

Rio

Grande

Western

re¬

(Jatineau Power
.m
1st 3s, 1970

Missouri Pacific 1st and Refund¬

Railroads, assisted by
Parmelee, analyzes pertinent facts bearing upon future of
transportation. Says choice confronting railroads is (1) either to
increase traffic; or (2) to institute further operating economies;
or
(3) to raise rates. Sees maximum railroad revenues in 1950 at

ing Mortgage bonds:

no more

000

uled

MEMBERS
New

York

Stock

and

other

leading Security and Commodity Exchs.

120

Broadway, New York 5, N. Y.

231

So. LaSalle St.) Chicago 4, I1L

receive

has

career

of the proposed

reorganization

naturally

had

market influence

procedure

adverse

the securities

of all

reorganization carriers.
In
their present temper neither in¬
vestors
nor
speculators are in¬
tie

uncertainties

Dixie Home Stores

sched¬

were

the

aggregate

further
stantial

junior securities), the per¬
centage improvement in treatment
made possible, by the debt retire¬

Furthermore, it should be fea¬

their funds

and

potential

in
in¬

dered."

This

final

1st

new

bonds

1st 4s allocated to the present 1st
and

Refunding Mortgage bonds
could, If a 3 % coupon were sub¬
stituted,
be replaced
by
some
$119,000,000 of new bonds without

increasing

the

curities

bonds that

Missouri Pacific,

par-

sold

the junior bonds, have
off quite substantially from

their earlier 1946

highs.

simism hardly appears

This pes¬
to pe war-

fixed w interest

new

distribution to the old
bondholders.
The $89,000,000 of
for

allowable

fixed
•

72 WALL STREET

were

coupon

without

the

MA 2-6622

cutting

since
3%

* 'it'

«"«

Rail¬

the

ulation, industrial and agricul¬
production,
construction,
tee
f o r
the
trade, labor force and employ¬
ment, and financial aspects of the
Study of
Julius R, Parmelee
economy. The effects of war upon
Transporta¬
economic development and pros¬
tion, after as¬
sembling and analyzing pertinent pects are traced. Special attention
facts bearing upon the future of is given to the prospects of transtransportation, as of the close of poration in general and railroads
in particular.
1945.;
"The American nation has never
The
committee's report, pre¬
(Continued on page 1044)
pared with the assistance of the
road

tural

Commit¬

Decision

Bank Participation

Agreement Plan Faces RFC

debt

has been prolonged by Congress from Jan.
22,1947, to June 30,1947, must soon decide whether to extend beyond
Jan. 22 next the Bank Participation Agreement Plan which it has
been operating since April 1945.
The subject is believed to be
receiving the active consideration of RFC officials now.
According to the RFC, the
Plan

Members New York stock

2161 Broadway

SECURITIES

Exchange

if;v New York 6

Telephone—DIgby 4-4933

Bell

the

Teletype—NY 1-310

establishment

the

business enterprises

Selected Situationa at all Timet

many

and the

new
ex¬

the

Under

with

STOCKS-BONDS

25 Broad Street

New York 4, N. Y.
Telephone BOwling Green 9-6400
Teletype NY 1-1063

Plan,

banks

to business

make loans

SEABOARD
RAILROAD

the borrower slows down

case

in his repayments.

Early this year .$FC extended
the prptectidh of the; RFC blanket
Participation
Agreement, with'

Seismograph Service
Slock

pansion of existing enterprises.

GUARANTEED

lending • powers and facilities in banks to include loans made by
helping to assure an adequate banks to contractors or other
supply of credit for the use of business enterprises interested in
private industry and finance; in building residences.
developing
post-war
industrial
expansion, particularly through

PFLUGFELDER, BAMPTON & RUST

RAILROAD

BPA^T

after

established

was

Corporation had made a nation¬
wide survey of banking and busi¬
ness suggestions as ;to how RFC
could most effectively utilize its

■t}y

Specialists in
J

nomic

allowable; fixed

NY 1-1499

records and future trends of pop¬

of
the Sub-Com¬

fixed

new

Teletype

t-'

Study

conclusion

to be issued to

satisfy ?' the senior claims,
paid off, and substituting

Railroad Bonds and Stocks

Telephone

Eco¬

past and present,
searching 'ahalysis of
future trends, ever undertaken by
the railroad industry.' too
,
The committee deals'With past

The RFC, whose life

NEW YORK 5

».<

economic facts,

and the most

Merely through reallocation of

Van Tuyl & Abbe

ren¬

the

mittee

may

concerns

practically automatic guar¬

issue

Market
of

140,000 shares of
stock of the Seismograph
Service Corp. is being offered to¬
common

anty by RFC up to 75% of each

When issued losses assumed

day at $12 per share by

loan made under the Agreement.

When issued profits discounted

dicate headed

The bank advances the credit and

handles

the

loan

itself.

RFC

Co.;

Fenner

Merrill
&

Illinois Central

SUTRO BROS. & CO.

lcr~

St. Louis Division

take

over

the bank

BROADWAY, NEW YORK 5, N. Y.

notice;

Members New York Stock Exchange
120

Peabody & Co.

Telephone REctor 2-7340

part of the. loan .if

desires,

thus,

upon

effect,

10 days'

behalf

Company will

covered

by the Agreement

and

selling

on
,

working capital and to reduce
bank loan.

Mclaughlin, reuss & co.
LONG ISLAND AIRLINES

Members New York Stock Exchange

GETCHELL MINE, INC.

BOND BROKERAGE SERVICE

UNITED PUBLIC UTILITIES

Adams & Peck
63 Wall

Common

9-8120

Tele. NY 1-724

ONE WALL STREET

1. h. rothchild & co.
Member of National Association

Boeton

Specializing in Railroad Securities

Street, New York 5

BOwllng Green

>'■ Philadelphia

Hartford

of Securities Dealers, Inc.

TEL. HANOVER 2-1355
52 wall street

y. c.

S".

p HAnover 2-0072

Tele. NY 1-1293

NEW YORK 5
'

behalf

70,000,.on

stockholders.

Trading Markets in—

Registered

Pierce,
Kidder;

the proceeds for

use

& Terminal
3s, July 1, 1951

syn¬

Of the total 70,00(1

the ..company,

and

being sold

insuring

liquidity for *the portion of the
loan

are

Lynch,

Beane,

the

provisions of the Agreement,

by Paul H. Davis

simply commits itself, subject to

v,:

presents in 187 pages of text, 75
tables and
40 charts, the most
comprehensive and at the same
time the most concise study of

their

services

Bureau of Railway Economics and
its director, Dr. J. H. Parmelee,

prices for

own

.''"'-a.-1,,..

®
m.

omiesinoper- I;
ation,
or
to ||

sible under present conditions to
put a lower coupon on the Series

charges.

icularly

subecon-

raise

ments is obvious.

than $6 billions.

"The problem confronting the railroads is either to increase their
traffic to greater, volumes than are powindicated, or to institute*

out in

Berkshire Fine Spinning
Tennessee Gas & Trans.

s'> ^

the

only around $89,000,000 in new 1st
Mortgage bonds (they; were to
have the rest of the claim filled

terminable litigation. In sympathy
with this general attitude the se¬

Armstrong Rubber Co.
Magazine Repeating Razor Co.
Universal Match Corp.

Julius H.

bonds.

that

amount

clined

TRADING MARKETS—

interest

considered

checkered

revised

Exchange

fixed

new

mechanical steps remain in
order to consummate the plans.
The confusion caused by -the
only

Ernst&Co.

Mortgage bonds than
the 4% set in the original plan.
On such a basis, if the Commis¬
sion were to leave fixed charges
at the level approved in the orig¬
inal plan it would be possible to
create a substantially larger face

refused to grant a writ in the case
of the Frisco.
In both instances

Committee of the Association of American

aggregated close • to $66,000,000 and under the plan were
to receive a total of some $55,000,-

organizations.

Both of these plans
have been voted on by security
holders and
confirmed by the
courts.
The Supreme Court has
upheld the Denver plan and has

These

claims

When

The President's

1 l/

TransportafibnTrends

by the Iron Mountain bonds and
the RFC and bank loans.

capitalizations.

Interstate Commerce dommission

for revision,1

Economic and

tion in its senior debt represented

that

there will be little earnings sup¬
port for agitation for more liberal

Disney

the whole plan goes back to the

many

by that time, with the bubble of
phenomenal wartime profits burst,

likely if, as is generally expected,

Mis^

was

opinion

and

year

are

until

the

plan. The subsidiary
Texas & Mexico,

Orleans,

up, Missouri Pacific* has
-^wjjth its form. Presumably now
any; reorganization legislation will accomplished a significant reduc¬

postponed

which is included along with In¬

drawn

influence

eventual; alteration

out¬

;

present. plan

the

plan, is sufficiently strong finan¬
cially to pay off all of its back in¬
terest. Such a step, reducing total
claims against the estate, appears

other consideration that will

one

Even without any lib*
eralization
of
the
capitalization

Truman's

the

1st; Mort¬
gage treatment of the present 1st
and Refunding bonds.
There is

changed.
President

ternational-Great Northern in the

it would be possible to

than

Thursday, August 22, 1946

1-2155

TELETYPE NY

Philadelphia Telephone -" Lombard 9008

Volume 164-

:*l

.a.".

;

»•-,

•

-1

RFC Gives Account of War Risk

;

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

Insurance

NAM Criticizes Price Rise Data

Reports War Damage Corporation, created by Congress, has earned
$221 millions in profits on more than 8,700,000 policies. Contingent liabilities reached a-peak of $140 billions,

Prices
have

In a statement issued by the Reconstruction Finance Corpora¬
tion, the operations of the War Damage Corporation, authorized by

Congress

Dec. 13, 1941, to

premium, subject to a
of $1;; and a? maximum

much

was

"6.; The* increase

less

prices actually paid
ble.

than

seek

under-the-counter

out

The 5y2%

pf prices in different periods.

scarce

The result is that in many
cities the agents obtained no quo¬

negligi¬

was

increase

obtaining

items.

consumer

tation

these

whatever.

Had the prices
dairy products been

of meats and

prices for the month ending July
15, as shown by the prelminary
BLS release, resulted almost ex¬
clusively from reported increases
in the prices of meat*and
dairy
products—the same products dealt

per policy,
.
On March 31,

minimum
of $1,000

period

channelsr for

compiled- by- this agency
been
severely
criticized,

they are still used extensively by
scholars and practical economists
as indications of the relative level

af-f^

ized

the

(Continued from page 1010)

ford the public protection of loss
chie to enemy action, are summar¬

1021

included for June for all cities at
their
black
market
prices
(the

"Unfortunately these monthly
only market on which they were
index
numbers
do
not become
1944, and again available in final form until about
available) the Increase between
on Feb.
June and July would have been
28, 1945, War Damage two months after the end of the
much less than was recorded.
in most extensively in black mar¬
Corporation
made
public
an¬ month to which they apply.
Also,
taken as a final statement of op¬ nouncement. that insurance duly
in the period prior to the suspen¬ kets and also most heavily sub¬
t Also, the price rise on meats
in effect on those dates would be sion of OPA
erations. The text follows:
sidized."
and
they failed to take
dairy products was due in
Owing to the uncertainties in¬ extended for an additional term adequate account of black market
Asserting that the "shocking part to cessation of subsidies. But
of 12 months from the respective
prices
of ; - many
commodities examples
of
individual
volved, and the inadequacies of
price this was a false increase, for the
dates of expiration of such insur¬ which were
existing insurance reserves, war
practically unobtain¬ rises and the interpretations of consumer simply began to pay, as
ance
without payment of addi¬
able on any other markets.
the Bureau of Labor Statistics, such, amounts he had previously
risk
insurance
on
other
than
marine risks was practically un¬ tional premium or other charge.
"For more immediately avail¬ commodity statistics bespoke po¬ contributed in his alternative role
Losses sustained in Hawaii, the
obtainable after the outbreak of
able measurements other index litical ends instead of impartial as taxpayer.
1
Aleutian Islands, and elsewhere
the war. In this emergency, Re¬
numbers compiled by various au¬ reporting" the NAM report con¬
"Thus the increase on cost of
construction Finance Corporation during' the period from Dec. 7, thorities must be used. It is too tinues:
meat and dairy products gives a
executed
the
charter
of
War 1941, to July 1, 1942, have been much to hope that these current
"The 5Y2 % increase in retail false picture of the effects on the
Damage Corporation on Dec. 13, adjusted by War Damage Corpo¬ indexes will be as comprehensive prices of consumer goods between consumer of suspension of OPA.
ration out of funds provided by
or reliable as the BLS
1941, to provide governmental in¬
monthly June 15 and July 15 reported by As we have already mentioned
Reconstruction Finance Corpora¬
surance against loss of
data on wholesale
these
damage
the corporation

tically

has

prac¬

has
issued no policies since March of
this year.
The report may be
ceased

business,

and

tion

pursuant to statutory au¬
thority, and other losses sustained
attack.during
that
period,
including
On March 27,
1942, Congress
authorized War Damage Corpo¬ those f of recently repatriated ' in¬
to property as a

result of

enemy

ration to grant two types of pro¬
tection against enemy attack, (1)
"reasonable" free protection un¬
til policies of insurance should be
made available, and (2) "reason¬
able" protection under

ternees from

was

cies

which

for

insurance

were

made

the

funds.

same

On March

1, 1946, the Recon¬

struction Finance Corporation an¬
nounced that in view of the lack
substantial

demand

for

war

risk insurance after V-J Day, no

July 1, 1942, at pre¬

rates

that

uniform

were

nual term.

the act authorizing such
protection, Congress empowered
Reconstruction Finance Corpora¬
By

Damage Cor¬
poration with funds to an amount
not exceeding $1,000,000,000. Un¬
der the insurance programs thus
tion to supply War

provided by War Damage Corpo¬
ration, any deficit, to the extent
of $1,000,000,000, would have been

the

policies the corporation's contin¬
gent liabilities reached a maxi¬
mum
of about $140,000,000,000.

Francis I. du Poiit
Outdoor

advertising

not

se¬

turn be covered into the

United

the

States

Treasury

miscel¬

laneous receipts.

Copy,
time
to time, appears on a modernistic
billboard, 72 x 18 feet, located at
149th Street alongside the tracks
delphia

Rochester.

and

which will be changed from

price
statistics
period
prior to
July
1st,
against which the July figures are

13%.

related, were computed at ceiling
prices disregarding the fact that
ommodities the bulk
transactions took place in black
markets;.
'
'
c

impression

created

statements

government

that

the

rise approximated 25% ;
for prop¬
"5. The rise in wholesale prices
erty in the United States and its
generally (all raw materials and
Territories and possessions was bf the New York Central and New
fabricated
commodities) during
automatic
and
without
charge Haven
Railroad
systems.
The
from Dec. 7, 1941, until policies
message is delivered to over 200,Reasonable protection

of insurance became available on

' %

War

ing applications and premiums,
issuing policies of insurance, and
servicing such policies. The com¬

panies acting as Fiduciary Agents
under each program participated
in the underwriting of that pro¬
gram

to the aggregate extent of

10%, subject to a limit of $20,000,000 with respect to losses under
the general program,

program.

profits

McGahan is joining
the staff of E. H. Rollins & Sons,

I k*

the

cost

$700 per policy, subject to adjust¬
on the basis of actual ex¬

ment

dex

roughly

are

one-fourth

»*

great as the corresponding fluctu¬
ations in the daily index.

and

cation of any

Appli¬
such precise divisor
to the 8% rise in the daily index,
during July 1946 would give a
specious appearance of accuracy

which

clear

that

do not claim.

the

rise

Insurance agents and
submitted applica¬

who

received out of each pre¬
mium a service fee of 5% of the

tions

account of black markets;

agents
were

getting

asked

was

were

retail

instructed to

pay

to obtain quotations oh scarce

ure

iiems in June reveals that

whatever

by the retailer,
instructed

not

While

quotations
they

quate account

was

market prices in

deliberately

r«

S|:

{ A

^"• *'K'

"" 'ri

/.u." V * 'v,'

solicitation ol any offer to buy securities.

:fi;'■ / •'

Incorporated
-'

;

(Par Value $10 Per Share)

•

Price $26 Per Share

A copy of the Prospectus may be obtained

Horse

Greeley,

Pa.

Show

One

hundred

says,

"My

cup

Merry-go-round
.

any

State from such of the

\ j r.

•

Lake

Goldman, Sachs & Co.

and
run¬

and the nickels spent

not wasted."

within

regularly distribute the Prospectus within such State*
;

fourteen girls participated in the

Ray

as may

won

by his 15-year-old daughter, Pa¬
tricia, at the Annual Camp Lake
Greeley

tfnderwriters

were

August 20, 1946.

ade¬

that month."

V
11

to the Second-Place Ribbon

over

taken of black-

That

Feltman's

Still it is

wholesale

Ray Kenney-s Daughter

neth

tical weakness of the bureau's prices
generally between
June
figure of 5 Vz % increase lies. The and July (if account is taken of
meats and dairy products (which black markets and subsidies ex¬
are principally responsible for the
isting in June) must have been
rise in the combined index) are
much less than 8%.
precisely the products which were
"3. The 5Vz% rise in cost of
dealt in most extensively in black
markets prior to the demise of living between June 15 and. July
OPA. Now, the procedure of the 15, as reported by the BLS, is
bureau in compiling its consumerbased on a statistical procedure
price data failed to take adequate
which exaggerates that rise. Fail¬

Pierce, Fenner & Beane.
—1—■Mil

food, in turn, is due principally

I-!T^'

Inc., 40 Wall Street, New York
City. Mr. McGahan has been as¬
sociated
with
Merrill
Lynch,

show.

materials

tions in the monthly over-all in-*

162,600 Shares Common Stock

are

premium an expense reimburse¬
ment equivalent to 3^2% of the
premium with a minimum of 500
per policy and a
maximum of

penses.
brokers

Thomas J.

gleam in the eye of Ray
Participations
similarly limited Kenney of C. E. de Willers & Co.,
120 Broadway; New York City,
under each program.
The Fidu¬
and founder of I. C. T. A., is due
ciary Agents received out of each
curities

raw

comprehensive month¬
It appears that fluctua¬

Wins Ribbon at
and of $5,- Horse Show

000,000 under the money and se¬

increase

basic

ly index.

to increases in the cost of meats

"Fiduciary

"The

Ed. Schuster & Co.,

available.

Agents" of
Damage Corporation, receiv¬

acted

other items combined
increased less than 1%.

The offering is made only by the Prospectus.

companies

was

All

';
,v- '
i *
r
' v
:
4
This announcement ia neither an offer to sell nor a

Thomas

made

participating

curities

indexes

traveling daily to and

000 persons

1942.
Thereafter War from points in New England and
Corporation's activities the West. The campaign is being
were carried on through 546 fire
conducted by Doremus & Com¬
insurance companies which serv¬
pany
through General Outdoor
iced the "general" program and
Advertising Co.
68 casualty and surety companies
through
which
insurance
of
money, precious metals and se¬
J. McGahan
July
1,
Damage

These

approxi¬

and in the

dairy products.
On these
Bf*S confesses that, due
"3. Retail
price .statistics for
to their scarcity, it was unable to
periods prior to July 1st, against
quotations in June for
which the July 15th figures are obtain
"
related, fail to take adequate ac¬ many cities.
"It is in.this point that the prac¬
count of black market prices even

general

•

This is based on a ref¬
lation which has held in the past
between movements in the daily

almost exclusively to increases in
the cost of foods which went up

"2. Wholesale

New
York City for the first time with through the Bureau of Labor Sta¬
met
out
of
the United
States the opening of a campaign by tistics
has
heretofore
claimed
Treasury. Conversely, any profit Francis I. du Pont & Co., 1 Wall these illegal prices were reflected
that results from the operations
Street, members ofthe New in its retail price surveys;
of War Damage Corporation will York Stock Exchange and other
"4. Wholesale
prices of basic
under existing law be distributed leading stock and commodity ex¬
raw materials rose approximately
to Reconstruction Finance Corpo¬ changes.
The • brokers maintain
8% during the 25-price-controlration, and all property of the 14 offices in the metropolitan area
free days—as contrasted to the
latter, upon its liquidation, will in and offices in Wilmington, Phila¬
curities firm is being used in

own

con¬

much less.
reau's report that the

for

many

\"con-

NAM : report

"1. A genuine rise of

"It is clearly stated in the bu¬
rise is due

measured by any of the price in¬
dexes in use;

the

cludes:

items the

Billboard Campaign
•

prices of the
is

combined

the

points of criticism" as follows:
on

ex¬

mately 8 % occurred in the whole¬
sale price of basic raw materials,
measurement of the effects on the
during the period without; price
consumer
of the
suspension of controls. 1
OPA. If so, it gives a grossly ex¬
"2. The rise in wholesale prices
aggerated picture of rise in cost
(including
fabricated
of living due to cessation of price generally
commodities)^ was certainly very
controls.

relative perspective and following
a
detailed analysis itemizes the

subsidies

analysis,

:
The : unprecedentedly
early release of the cost of living

The report of NAM places the
various price statistics in their

In stating the results of its

the

data leads to the presumption that
the 5%% rise was intended as a

;

"1. The effect

increase

release.

examination
is the purpose of this report."

elimination

accompanying

almost

sumerprice" index."

careful analysis of

statement

were

clusively responsible for the 5

exaggeration

arises from a

construction, past history, and
(June
and

Wake, Guam, and elsewhere current 4 movements
are currently being; paid out of
July 1946). Such an

poplicies would be issued on and
after March 16, 1946.
The corporation has earned ap¬
throughout the United States and
its
Territories
and
possessions, proximately $221,000,000 in prof¬
its (before payment of participa¬
and averaged about 10(5 per $100
for annual policies, without lia¬ tions) on more than 8,700,000 pol¬
icies and renewal certificates of
bility for assessments or addi¬
insurance
issued.
Under these
tional premiums during the an¬
available

mium

of the real in¬
crease in the cost of living over
that
interval.
This
conclusion

policies of
premium
of
required to be charged. Poli¬

insurance

Pacific island bases

food items

the Bureau of Labor Statistics is

prices, or con¬
prices. Nevertheless, since
they are watched closely in criti¬
cal periods, it is desirable to ex¬
amine them in regard to methods

sumer

THE COMMERCIAL & FINANCIAL CHRONICLE

1022

ord is 99 years; Central Hanover's
record / extends
back
82
years;
Corn

BaiiM andlnM^
A.

This Week

VAN

in the

investment current

average

)ortfolio. Among the most attracive for ,inc6me gradual appre-

Exchange's,- 92 years;. First

.National's; 82^ yeafs; Chase 'Na¬

market:

DEUSENi

Bank

hattan .Company,
Trust

-Man-f

.Manufacturers
National
City

Company,

lation .arer -Bank, -of \ America, Bank of
tional's, 67 years - and 'United Bank of Manhattan, Chase, Manu¬ National
States Trust's, 92 years.
facturers and National City."
pany,"

New

York

-Bank

and

Public

Trust- Com¬

Bank Stocks

—

ion

Thursday, August 22, 194<1

bulletin

recent

hank

Moody's most recent
For what it
survey
may be worth, the
"The .following seem the opinion of the 'writer
favors the
merit iticlu- most attractively priced in the second
group of selections. ;
(
r

stocks by Standard and Poor says:
"The

Subsequent to the "bank moratorium" of early 1933, the "Banking
Congress

(bank)

says:

Act of 1933" and the "Banking Act of 1935" were passed by

The purpose of these acts

signed by President Roosevelt.

and

Boom-and-Bust in Textiles

of the weaknesses and remove some of the
developed in the commercial .banking system.
Significant provisions included: segregation of the security and
correct

■was

some

abuses that had

banks*

affiliates from

investment

(Continued from page 1010)
textile activity will be not

and the postwar period will be in

the textile price level.

of bank de- (i numerous fortunes. Today; though much a cause as an effect of the
posits by an agency of the gov- |,still favorites with this class of general • level
of
all
business
ernment, and the elimination of investor, they have a much wider activity.
*
:
interest on demand
deposits. It appeal among both individual and
Since this point is too important
of deposit; insurance

will be recalled that bank stocks

skyward in 1928 and 1929,

soared

largely on account of the specu¬
lative appeal of prospective rich
stock-market profits realizable -by
the banks' wholly owned security
affiliates. Standard and Poor's In¬
dex

(then Standard Statistics) of
New York City bank stocks ad¬
from

vanced

1928

283.6

660.1

November

1929.

October

With the break in the stock mar¬

institutional investors,

;to

Probably the principal current
appeal, is the relatively attractive
yield of well selected bank stocks,
which compares favorably; with
that .of most other quality issues.
Furthermore, current dividends
are covereji generously in -most
instances by net operating earn¬
ings alone, exclusive bf net secur¬
ity profits. An added attraction at.
current prices 4s that bank stocks
r

one

and in the interest

of sound commercial banking.

The provision for insurance

of
deposits by the F.D.I.C., though
reassuring to a large number of
small depositors, was of debatable
value and added to the operating
expenses of banks; on the other
hand, the elimination of interest
•

demand

deposits resulted in
substantial savings to commercial
on

banks, particularly in New York
City where demand deposits con¬
stitute
approximately
90%
of
total deposits.
:
It is also pertinent to recall that
on
July
1,
1937, the "double
liability" feature of the stocks of
national banks and of New York

State

chartered

exist,
sions

banks

accord with

of the

1933

Act

ceased

the

provi¬

and

of the

fibers meeting special peeds
will find ,a place almost regard¬
new

•

fairly reliable
periodic changes in the

.direction of the -.business cycle, a
close
knowledge of textile-ap¬

parel trends will be invaluable.
But

if;ypu want ttf makef n;

reasonable

estimate

postwar

activity; say for; three to
jftye.years beginninginT4948i YoU

prospects—steel, .' automo¬
biles, construction, and so on!
;
The textile industries ihay be 'These

substantially chigher, to> say
nothing of book values and earn¬

the dog. But
jgobds industries

that; determine

Earnings thus far .ih 1946 are
better
than
last year. This is
shown by the bperating results
reported *by seven of 'New York

ho#

big

pect them to be.

make

heavier inroads
cotton, and in turn will be

! 3-5- YearTextile Outlook
com¬
I amnothere.to discuss steel ;have been built
operating earnings
upon
the re¬
wete 12.4% greater in the first* [and
automobiles and J building sources of the industry itself; they
half of this year than during the activity. • Lam not discussing the incorporate a wide
knowledge of
same' period in .1945; whose com¬ •accumulated ] demandsfor
consumer demands and the distri¬
ma¬
bined operating expenses,, inclucU chinery .andhoUsehold appliances, bution policies of both mills and
ing taxes, were also 12.4% higher, or in the ^financial {reserves1by retailers; and they fit in con¬
and whose combined net operat¬ which
their: purchase
can
be sistently with equally careful esti¬
ing profits were .12.2% greater! financed, except to the extent that mates of the economy as-a whole.
Net security profits, though subthey .Will influence general busi-i They are as good as we can make
;stantial, were nevertheless 15.6% 'ness activity, income payments, them at this time.
lower, while total net' earnings the wholesale price level, and the i
Let me point out another thing.
:from
all
sources
i#ere~ 4.4% consumption
of. < textile-apparel These.estimates are going to lead
items.
All these other things are ;us to certain-conclusions
higher,
v
- -«•f*
*■
about the

gross'

trend

another.

toward

; declining
hosiery is

Nylon

vV'T

Ultimately, this gain. id

T kno# ithat jthey won't be jper^ect^ !J3ut 4hey have ;been ehreIfully
made;; they; have ; been
checked by many methods; they

this

obsolescence.

ex¬

will be.

City's leading banks, whose

bined

will

into

•

[bow .accurate J;

and

healthy and 'full of fleas the dbg

are my estimates for tex¬
tiles after the boom, and you may
twelF ask pie

the' tail that
wags
it is ithe!dufabie

ing assets.

rayon

fiber

will have to ' base it on a compre¬
hensive
knowledge of -durable

are

Nylons will, compete

.with other synthetics and with
the
conventional rayons. Staple

textile:

Igoods

upon the other, will move in all

| directions.

intruded upon by staples produced
less of price, their prices declin¬ from new
synthetics. Nylon's de-^
ing a's volume expands. 'F!or pre¬ jvelopment in the
spun fiber field
war
fibers, however, a postwar will be especially significant.
consumption 40% higher than in
Plastics will cbmpete for the
1939 implies a textile
piflce level markets of f all the conventional
only about .35% higher.
This in
.textiles, particularly so in the area
,turn implies a price deciirie of of home
furnishings and industrial
almost 18 % froin the second quar¬
textiles. \
'
(.",
.i
ter of 1946, .and- of course .a muqh
larger decline from current'levels I A rising factor of durability
will
be
one '-of
the
distinctive
qr from thef speak& that m^y be
characteristics of fibers, filaments
reached
within
the
next
few
and [fabrics; in this new
period;
months.
-!
n
'
Strong rayon filaments, of the tire
cord type are one; exaihple* <t>f
V Post-Boom Estimates

If you want a

collapsed, but a^e definitely behindthe market*
they dropped even more violently and that long term appreciation
than
did
general
stocks.
The is in prospect. Prices are well be¬
segregation provision of the Act low their 1937 highs, yet earnings
wise

tip-off

ket bank stocks also

was a

that,

lightly, let me ex¬
it again in slightly different

words:

A peak ih
present
boom

the

should be reached within the next
six to nine months.
Beyond

pass, over

press

' and

prices

ability" will heve

a .major effect
elasticity of demand for
staple products,' and in theif .pro^

the

duction and merchandising,

Quality Trends-^-Quality, -badly
^nocked around during the waif
and

even

will

during the present boom,
back into its

come

the pressure of

under

own

competition and

public insistence.
r

There were exceptions to the
deterioration of .quality during the
war of a ?very
significant kind.
Largely representing trademarked
merchandise,
these
exceptions

islands of merit in

were

a sea

trash.'

in, 'New' York .essential, but what you want ;are •producing^ pricing and distribu¬
Banking Act of
This^^fabt^^ ahd its recdghitioh by
conclusions, ■ more¬ tion of textiles after the - war. But
;City, as well as in Boston and i conclusions
1936.
the public, will have an important
Philadelphia,' have un br o ken over, .that are boiled down ito tex¬ iin reaching these conclusions, we after
Thus it will be seen that, in a
effect,yinfluehping the posi^
dividend records that go back tile-apparel terms, c And; that is shall use everything we know
number of ways, wise legislation
tion of branded
merchandise, the
about
; what I shall try to give. /
conditions of production;
has done much in recent years for many years, and this no doubt
policies of retailers, and the buy¬
Per the three to five year period; competition
adds to the attractiveness of .their
between
industries
the bank stock holder, in reduc¬
ing habits qf the
stocks to many investors. .For. ex¬ ■beginning in 1948, I believe the and
fibers; integrations; export
ing the risk and enhancing the
ample, National City Bank of fdlloWihg will provide reasonable itrade; retail competition and its
Integrations, Backward and
quality and soundness of his in¬
New York, which, began business estimates of Textiles After the effect on national brands and on
Forward
: '
vestment...
in 1812, has paid dividends each Boom.
Comparisons
are
with mark-rup policy., !
In many respects, high grade
Every war has brought a cycle
1939. <
r
I therefore point out that any
year
since 1813. Bank of New
bank stocks may be considered
qf integrations; Every .decade hag
4. -Textile yarn' eonsumptibri, mistakes/ in these estimates are
York, organized ,in .1784, has paid
seen some new form of
the
aristocrats
of
the
distribusecurity, dividends
more likely to affect the
;; „si n.cje
organization. jPrewur ;types Ghly; should ^f>e
intensity
market. For several generations
Chemical Bank and Trust Com¬ [about 3.5 billion ^pounds^ approxir of postwar trends than
they are
they were the choice of wealthy
pany's unbroken record is 119; mutely 40% greater than the 4.0 ithcir directioni
!
investors and formed the basis of
years; Bank Of Manhattan's rec- .billion pounds consumed! in" 1939.
New York

Certain

State

banks

—

•

;Ne\y types bf ydrn, which

were

BANK

prewar

nonwexistent in

period

Jn :the

INSURANCE

securities

Counting
high-tenacity
rayon
yarns, used now chiefly for tire
cord, nylon and other synthetic
uses

Laird, Bissell& (Weeds
Members

New

York Stock

|. S.Rippel &£&

Exchange ¥•

Established

120 BROADWAY, NEW YORK 5, N. Y.
,

Telephone:
Bell

BArclay 7-3500

Teletype—NY

1891

48 Clinton Str Newark 2,4ST.J,

1-1248-49

Royal Bank of Scotland

Production Prospects

For

few

minutes,

eatly 'should like to put

types, all of which will find

|!,'"

now,

;„

(L. A. Gibbs, Manager Trading Department)

^MArket S-!3430

N. Y. Phone—REctor.2-4383

was

new

both

tiple shift operations will become
more extensive, under the < driv¬
ing force qf enlarged consumption
and liigh manufacturing costs.

wages

^INCORPORATED

WHITEHALL 3-O702

BS.297

23i S.
-t

JlaSalU Street

^
ii'

FRANKLIN 7533

CC.I05,

Russ

6567 ^

•;

PORTLAND, Enterprise 7008

.rRovmENCJE,.Enterprise 7008

CHICAGO,

PHILADELPHIA, LOS ANGELES, SAN FRANCISCO

HARTFORD, Enterprise 6011
.„;

The war, the stable

Smithfiel'dE. C. I

■

Ckarfng Cross, $ W, '4

jEurlfnglon Gardens, W, /
-

64 JStgu) Bond Street, W. (

TOTAL ASSETS

filiS,681.681
;

.Associated Banks:

Williams 'Deacon's

rigid.

"...

Bank/ Ltdi

boom will not be much

any,norm

term.

will

than the 6.0
estimated

smaller proportion of

the

NMlbNALMNE
"

Bankers

of $50 to $75 million

period.; ^

Major change between

now

prewar!

.Competition Between JFibers ^-*
Vast qew arrays of fibers will.be
developed

and

croachments

promoted. i'; En¬
these

fibers,lone

the Government ia

Office:

26, Bishopsgate,
London, E. C. v. >:v.:

Branches In -India, Burma,

Cfeylon, Kenya
..Polony and Aden and Zaozibat

chases of textile machinery should
average

;/:;|'':;r.Kenya; Colony and Uganda "

pur¬

pound

However, cotton and wool
.higher, and ' synthetics

,Co.

of INDIA, LIMITED
Head

Ybr*several years, at least,

longer

lower, than in fhe later

$150 million dollars an¬
nually,- as contrasted with a range

higher, if

billion

for

Clyn Mills

j Machinery will, "on balahcej <bd"

ments.

The

peak in textile yard
consumption during the present

fiuildintf

GUTTER

PRIVATE WIRE SYSTEM CONNECTING: NEW
YORK, BOSTON,

CLEVELAND,

represent

SAN FRANCISCO 4

■fhe most modern^ available.^ Old
and obsolescent equipment * will

of fiber consumption.

NY 1-2878

CHICAGO 4

./•

Blshopsgate, E. C. 2

8 West

will be higher arid more

price of rayori, and the success of total installations than ever be¬
the cotton bloc in -constantly se^' fore.
One of the blessings of the
curing - higher ' prices' for
the boom period is that it has pro¬
vided ample finances with/Which
grower, are responsible for this
drastic change in the distribution to niake these new
capital invest¬

NEW YORK S: 67 Wall Street

Cotp

Of the six billion estimated

half pounds.

Post Office Square

1727

postwar norm, not more than
four billion pounds will be cot¬
ton; the allowance for synthetics
of various types is a billion and k

SUM & CO.

LONDON OFFICES

-Conditions of Production-—Mul¬

Three-fourths of the total 1 They will heed! this margin' of
accounted for by King
safety .mcfirO ^thanj ever because

as a

WHOLESALE
BANK and INSURANCE STOCKS

HUBBARD 0650

Charter

OFFICE—Edinburgh

ftrgpichea throughottt Scotland

filament and fibejr
Before the war, efficiencies of
forms, the gain above >1939 will be
increased toUbbut 50%.
!; production were among -the fac¬
3.
In
1939, the four billioh tors that kept. many mills afloat,
ppuhd* yarn total contained threfe: jwhile they satisfied a mass de-'
billion-pounds of cotton yarns, and mand' at low prices and iiarrow
less than half a billion of
piargins of profit.
syn¬

ton.

HEAD

few, statements about the sub•jects Jisted above, without stopa

thetics.

BOSTON 9

Incorporated by Royal

on the record

ing the total to about 6.0 billion.

STOCKS

the

stages of commercial use, will add
another ,half billion j)ounds, fais-

new jersey

and
it

either

Subscribed Capital—

Paid-Up Capital--.
Reserve

Tho

Bank

Fund
conducts

£4,000,000 "

.-£2,000,000
-—£2,200,000

every

description

banking and exchange business

Trusteeships and Executorships
i.,also undertaken

«f

x.i

■■■

lion put

' ;>n;,

forward

as a panacea

tion

mergers,

the panaceas proved pf
little avail, they were representa¬
tive
of certain
deep economic
of

drives.

One

was

the pressure of

production to find a coun¬
terpart in mass distribution. Another was a reaction against the
mass

chronic

instability, the feast for

famine cycles that have been nor¬
mal to textiles;
Another was the

industry's attempt to raise its low
wage structure nearer to the na¬
tion's rising average, while simul¬
taneously, satisfying the country's
demand for sound values at low

prices.
The latest wave of integrations
must ; be

appraised against these
but there is little

economic forces,

evidence; that consciousness of
them entered the plans of mdre
than

handful of the

set-ups.
The great majority of the mills
that began converting or fabricat¬
ing their products during the past
two

seemed

years

*£.'

have

been

*•

these

integrations

operating

has beten
mechanistic levfel.

Merchandising^cpbfdih^ioh

hss

been

secondary, but unless mer¬
chandising coordination can be ac¬
complished
a
number will
be
forced to return to the
gray goods when

selling of

competition Re¬

vives.

mune

■

'IsC

;•

its

resume

large

concerned.

While

order
years,

when

their

Its

jure.

If that

skill

and. know-how

The
Can the

either.

answer

When supply

pressures

garment

and

up with
tendency
in the opposite directions.
Inde¬
pendent stores, in Order to main¬
tain
the
favored
position they
won during the war
years, may.

competitiveness^betterthan(ores

well as) a much larger number of

distributing

units

have * in

the

past?;

the

this responsibilityi
An

•

growth of wool spinning
cotton system

that

textile

branch,

;

some

Let' |he now

try 'tp* pull thefce

varied and :cbnf|teting^ prospebts
together into
The

boom in

try.
rect

many

of these

This is under
.

offer to buy,

competing

those

say

p'etition becomeSr ruthless?Under
that situation we doubt very much
that
the

will see mills throwing
their capital as they, did in

you

si Way

thirties.

gers

ted

believe

when

the

fibers

that, crept

industry

was

will be

sales, including leased de¬

fiscal

year

amounted

Jan.

ended

087,000 in taxes was $801,700. For
the

four

1946,

months

sales

were

ended

.•

net profits were $716,900. ; Capi¬
revolutionary talization of the company after
climate' of our age, those who oc¬
the present financing will consist
cupy the places of leadership will
of 30,000 shares, of 4%'% $100 par
have to evolve new dynamics to
replace itim fast receding con¬ value cumulative preferred and

Affected

the

these

great

indus¬

tries;

;

solicitation of

444,400
common

as an

shares of $10

any

of such securities. The offering

are

behalf of only

registered dealers in securities in this state.

with

facilities - that, will - tremen¬
dously expand the output of fiber-"

case

the industry greatly

with cotton textiles.
h

Mainly

#i|Sl

$25 Per Share

Price-.$26.75JPer Share4^,
Company's! #25

exercise of sub-

par common

stock.

fr&m otily such of the undersigned
as'pre registered*dea,lers in securities in this slate..

new.

...

;;

Copies of the-Prospectus ate obtainable

materiaL. This will be fully cor¬

Although

scription rights by the present holders of the

The industry's - major; problem
during these recept years has been
aninadequate
supply of
raw

■:

offering is being made subject to prior purchase through the

cident of government controls. 5
To a more important extent^ the

and filament*.

■

Par Value

Oil the other hkhd, the industry
will be stimulated by the mer¬
chandising experimentations ac¬
companying the test of the new

■-

Cptttmon Stock

textiles.

rected in the next few years

par

stock.

offering of these securities for sale, or as an

offer id buy,

of the Prospectus. This is published on

;;

August 22, 1Q46

from the outside.

The

June

$10,339,900 and.

NEKO0SA-EDMR0S mPEft COMPANY
"

194®

and net

profit after the payment of $2,-

Planning -will require the in¬
dustry's best intelligence, plus the
best practical assistance it can get

■:

31,

$26,405,200

*63,000 Shafes

looking

the •increased its mill converting oper¬
ations, the effect was, less upsetting-td" distribution than was the

horizontal mer¬
to the fullest extent permit¬
by
the ..laws
governing

answer

Net

vestigation, for boldness and for
imagination.

of the undersigned who

the other wa^.
Es$e<jiall^ heavy
losses are in prospect in industrial

that all of
ihii bounds very" practical ahd
logical, but what will happen • if
over-production returns and comH
may

has approximately

partments, of the company for the

The thinking- will call for more
scientific experimentatiori and in¬

is made only by means

ship between the; mills and the rayon industry's own price policy
converters* in this" field, a more ! of long-term conservation' and the
cbnsbious knowledgethat each i£ nature of its raw materials con•workihg' for the interests ofthp jtfibUteidftd^stability; i
>
you

company

3,000 employees.

The tempo will be ever so mueh

The

permanent damage will largely be
in the shape of markets lost to,

important differences. There will

Now

The

faster,

circumstances to he construed
or as a

There

dising department jn each. store*

out, but to be; retained
be adjusted to the
tempo and thinking of the times.
must

cor¬

errors.

area.

approximately 115 merchan¬

v ;s

The postwar economy Will

^Unction of styling; fashion mer- the war ancj boom years than most
chahdise will remain a merchant' Othbf branches hf the* industry.
To soihe" extent this was an ac¬
converting business with certain

ether.

textiles

side of the downtown
'

be thrown

thirty

Each store is in a separate
independent, shopping district out¬

years.

are

servation

brief conclusion.

present

ent locations for more than

act.

Established methods will not all

they

operated by the

with those Of other mass-produc-

much more intimate relation¬

The three stores

company have been in their pres¬

end with a
integrations, and by the new ef¬
smaller,-but stronger converting ficiencies made possible,
by the
business, with a much closer reinvestment of war-time profits in
latiohship; between mills that Sell modern
equipment.
gray goods and those that buy it.~
The rayqn textile indiistry, from
Hy and large, the function of yarn producers to! Weavers, had
converting staple goods will be¬ the good fortune to maintain a
come a mill business, while the
greater degree, of stability during

in this branch pf
^

85,000 share are authorized shares
being issued by the company for
general corporate purposes.
The
company has in contemplation a"
tentative program for moderniz¬
ing, improving and expanding its
properties, at a cost of about
$5,500,000.
;

coming era will require
changes in mental outlook.

many

com¬

are

hig-branched of the textile iridus^

The struggle. will

foe

Conclusion
.:

;•

danger that certain
of the war-time sins of. omission
and commission will haUnt the in¬

remain in mill converting,
Whethef they be large or small,
and the merchant converters.

onylhe"

straws in
the trend

that point up

of competition

industry,

all

are

■

of the
post-boom period will be the test
fof strength'. between those mills
interesting, conflict

The

you

162,600 shares

being offered, 77,600
issued and outstanding
stock being sold for the account
of
certain: stockholders,
while

I Suggest to .you that the answer
not to rush blindly into new

think before

the

stock

On the contrary, now is the time

coming

and worsted industry is whether it
will move vigorously to meet the
competition or lose business by
default.
New and refined types
of rayon and synthetic fibers, new
forms of finishing which stabilize
the man-made fibers, the rapid

#ithln tlie Textile

cotton

are

Of
mon

integrations, or to buy up mills at
inflated prices per spindle, or to
open up new distribution outlets
on long-term leases at exorbitant
prices.

post-boom period for the woolen

Collectively, the converting sys¬
It permitted quality standards
tem' in the past made orie of its I
to slip badly.
:
most important eeohomic cohtri^
?
It
deprived
long-established,
butions'by acting ks a cushion to
the pressures and shocks of the prewar trades of merchandise in
order to reap current rewards in
garment industry's basic insta¬
other fields.
bility.; <'vv.7••%i,i-f.. •, •
Its values were far out of line
To some

carrying and financing finished:
gdods inventories, 0! adjusting to
rapid fises or rapid declines in
prices, must be performed by the
integrations if these mills elimi*iatethp- intermediaries who for¬
merly assumed a large Share *of

encroachment's

offered to the public.

opportunities
and
question—Hpw can they

to stop and

which operates three large

department stores in Milwaukee,
which grew from one small
store established in 1884, has been,

best be capitalized?

and the important question of the

supply.

dustry after the boom.

degree this cushion has
fceen'devitalized. The function of

pro¬

This is the first time
stock of this com¬

and

substantial

common

pany,

This long-term prospect, while
stressing
competition,
suggests
raises the

share.

that

prices about 35% higher.
This
last, I remind you again; implies
a; rather sharp drop from current
price levels.

business, then an important
lesson has beeri Ibst;

the wind

$26

output

greater

volume, on the other hand,
will be 40 to 50% over prewar,

potential competi¬

New

products,

of 162,600 shares of common stock
Ed. Schuster & Co., Inc., at

will make it this way.

wooT

hidustrlcs

there is

New

tiveness and actual encroachments
of rayon and other fibers into the

relations of department

Competition

retail

did not sufficiently

catches

stores with sources of

Goldman, Sachs & Co. headed
group
of investment bankers
that made public offering Aug. 20
a

and new distributing mechanisms

demand there Will be

.major question is .this:
integrations as a group absorb the

all prepared,

ab¬

dramatize the

consumers.

fect. the

the

scare

Having a wellflaid plan, ,hbw- abetter jiflality hnd higheV priced
lhieof softgoods thahTnthepreever,, will not be the final deter¬
This wili further afminant of success.
Nor are mer¬ war period.
chandising
;the -entire

The plans for such

gram were

Identified to

...

had good reason to fear and

Mills

J Undoubtedly the larger of the
integrations have well-laid; far- have to accept narrower margins.
Mas? distributors, encouraged
sighted plans for balancing pro¬
duction and merchandising func¬ by a higher volume of consumer
income, will carry a considerably
tions.
.
■

extensive

off from the West,

been cut

merchandise

could b# specifically

subjected

industry wduld have been forced
into, the
program
of organized
blending and adulteration that it

from the chain-store-mailgroup
during the boom

away

Ed Schuster Common

Total

production controls, the industry
just narrowly escaped far more
arduous forms of regulation. Had
Australia and its wool supplies

merchandised

numbers

ago.

order business

expansion.

but in

competition,

greater

changed in organization, but more
efficient than it was five years

competition Will again place de¬
partment store mark-ups- on the
defensive, especially where staple
is

to the attritional influences

The woolen and worsted branch

tion and Mark*Up Policy

will

Goldman Sachs Offers

therefore, and distribution will be more
the complex and more competitive
not entirely im¬ than .ever before.

emerges from the war years, little

National Brands, Retail Competi¬

Chain and mail

conclude,

effectively.

following setback .will be
less severe than in 1920, but will
involve substantial price declines.

Beyond, that, textile production

stiong position to deal with them

ports:
Accept export opportunities if
they will help you dispose Of ex¬
cesses, but be very cautious in at¬
tempting to build a large and last¬
ing export business.
Export op¬
portunities
are
like J,y
to
be
greatest when
you
don't need
them, and meager when you do. -

Until, now, the' largest number

-p-

your

tion and

;

time and mine, I
shall merely say this about ex¬
save

merchandise

of war-time profits.

'.u-Vr

Textile Exports

*.
To

motivated mainly by the attrac¬
ease

•

peak within the next

The

companies.

post-boom years

;

v.-V* '■

may

that the rayon industry enters

new

competition, but merely shift the
focal points.

heavy production iri thb
comparatively smaller

number of

basic" influences

the

remove

tration

handa of

will reach

six to nine months,

ready characterized by a concen¬

it is significant that most
of integrations of the past1 few
years have been, of the vertical
type.
These do not, in general;

cycles of integra¬

comparatively short and

were

most

te^impbrtant horizontal ;ithat :the>rayoh;:te

beeu a

these

the difference existed in the fact

Although there have

monopolies.

for

Industrial ills.
While

1023

111

;C»i •'

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

^Volume 164
<■———111'

value
-

'5JiV3EK05tT« .v,'.j;>wAWT'ff
1024

.rMMftlWO?} iJH'f ;

•A

gti'V -j-.r-wtira.f

THE COMMERCIAL &; FINANCIAL
CHRONICLE
profit possibilities of both groups
rated

are

groups

MMudl Fimcfc

"pets"

Viewpoints

vxavf

*a4*««v»w

v*.

minor

interruption

trend.

At the

rather

than

same

The

the

current

heavy

always

provided

Nation-Wide Securities !
Dis¬
tributors Group — Revised mail¬
ing folder; /' "What Are Under¬
.

history, is given, valued Securities"; Current Avia¬
involving Goodrich and Speriy. tion News and
revised folder on
Although the stock with the lower Aviation Shares
National-Se¬
yield (Goodrich) was selected, on
curities^ Research —
.

indus¬

the

block

conditions

reversal

Manhattan

Revised Trust Agreement

Dividends

Bond

Fund — The
Time for renewal of its investcurrent. monthly report on this, ment
advisory contract with Bosfund lists the steady growth in to*1
Fiduciary & Research Asso"Confusion exisung 111 the DC- assets from
'uoniusion existing in Uie se$653,339 on Jan. • x,
| dsbcia xjiuiu yvcc/ juut/ vj.1 wwraxi -1, ciates has arrived for Keystone
JJ'
'
curities markets may continue for 1939 to $25,370,199 on
July 1, 1946. Custodian Funds, Inc., Trustee for
a short period of time but it can Having participated in the
organ- the 10 Keystone Funds. At the
hardly resist indefinitely the in- ization and early promotion of this same time shareholders

Group Securities, Inc. — The
following dividends for the third
quarter payable Aug. 31, 1946 to

tious

investment policy.

particularly
extreme
.

pciauvc

thinness

the

present day
^

iuat

are

with

impressed

-1

vu.

Arti-

months

higher than in

are

actvnu

UWXJL

—

the

JT-«

net

current

"The fact that these three series
have moved together in the pres-

Co.

ent instance gives strong support
to the belief that the low point
in interest rates and the high

The report concludes

and

31%

Total net

assets.

tiu

vvvav,

of
VAAW

^uce

Performance Of New Issues

Distributors Group, Incorporated
'

New York 5,N. Y.

new

issue

and preferred stock
financing since 1930, with industrials predominant.
Of the 285
new issues, by the end of
July, 153
showed gains and 132 either had
not advanced or had registered
losses from their offering price,
Taking the common stocks alone,
of the

&«»>?*

158 issues, 78 were up, 70
down and 10 unchanged.

It strikes us

this

same

jority

period and with the

of mutual
better

vestors

the

Priced at Market from
Prospectus
upon request

your

investment dealer

ftinds

gains,

ma-

showing

the *new

issue

market, by comparison, has been
considerably less profitable to inthan

would lead

that, with the Dow-

Jones Industrials up 4.5% during

even

BOND SERIES

publicity

one

difference
™

Now York 5, N. Y/

follows:

advance

common

the

risk

factor

easy : to understand the steadily
growing popularity of the mutual

pension

Mr.

Bert

continue

quite

impossible

the

follow
ness

policy of continued alert-

your

The

npw

hjskw

fhi

intprpcst-

^ booklet on this lnterest-

mg method of investment has been

.06

Institutional

S
^

even

that

field

the

definitely upward.

trend

;

When allowances are made for
last
winter's
strikes, industrial
and

mercantile

reports

com-

thrown out of mesh.
The Crucial Labor Factor

case

the

market's

hesitation?

ltself>

seems

one

t6 ^

overwhelming

facor is that of labor.

The

mar¬

a recurrence

of labor unrest which

willv undo

abortively

round

factors,

all

cause

these

another

price advances, further

Trust
INVESTMENT

COMPANY

.10

.005

.04

.08

.045

.005

.04

.01

.05

.01

.03

.04

.02

.06

Petroleum
Railroad

Bond

Equipt

Railroad

Stock

—

Tobacco
Utilities

.05

.04
.

National

Trust

.023

.035

.06

Funds

The

following dividends payable Aug*
15, 1946 to stock of record July
31:

•'")

From

Invest.

Stock

Income Gains Total

Series— $.108

$.05? 1 8.16

Series

,100

.050

.15

.021

.029

.05

Institutional Securities, Ltd;

semi-annual

cash

—

distribution

shrink

profit margins, and plant

seeds of economic
disequilibria for which we must sooner
or
later pay the inevitable

penalty—

namely,

pricing

economic

many

bility

not dismiss this
possi¬
Under
present

lightly.

conditions it could be even more
disastrous than in the past be¬
the

cause

BOSTON
CHICAGO

South LaSalle Street

!
v

2io

been

The

formula, while

allows

advances

trolled

products

price-con¬
certain

stances, provides that prices
not

high,
manufacturing.

»in
OPA

new

point

raised

particularly

in¬
can¬

raised to more than
the
1940 level plus additional
average
industry costs incurred since that
date.
Thus the new

price,

com¬

pensates only for the increase
in
costs without a
profit on the increment.

Consequently,

though

the dollar profit
per unit remains
unchanged (and of course means

higher profits where
are

units

turned out

than in 1940), the
percentage of profit to sales is less
than in the past.
Vulnerability of
earnings is accordingly greater

high level

business

Labor,, however,

has

Together with the Administration

Diversified Investment Fund
with Redeemable Shares

COMPANY

111 DEVONSHIRE STREET

breakeven

profits has

which

★

120

.04

completely
ignored
this
basic
business concept of
profit margin.

COMMONWEALTH

of which is managed independently of the
other by a different
management group,

Broadway

.05
.035

and

favorable

relating to the shares
of either of these investment funds, each

.07

____

new

Investors

.05

Railroad

Steel

.10

.02

Mining

show¬

the idea to investors by mail and I Wlul? ma?y le?ser factors may
mentioned, such as an over-supply
for setting up periodic investment .of new
security issues, a slight

Massachusetts

YORK

.10

(Continued from psyge 1008)

Write for prospectus

NEW

;

Merchandising

essential.

Bond-

Investing Co.
Low Priced

Stock

What then, one may ask, is the

INC.

local investment dealer or

Congress Street, Boston 9, Mass.

.02

Selected Groups Ser.

and Steels, these four groups com-, quarters of the year if production
is unhampered by strikes and the
prising 33% of total assets.
>
general price level is not again

Sfund,

he obtained

Keystone Company
of Boston

.04

Machy

.05

Panies that are not suffering from groups of consumers as well as
ments
of
Axe-Houghton
Fund shortages of materials make bril- foreign customers out of our mar¬
were
78.1 %^ in
common
stocks' liantly
improvedcomparison. kets. Such a condition would. of
12.3%
in
preferreds,
1.4%
in Dividends are higher in numerous course lead ultimately to overrbonds and 8.2% in cash items. I cases, but none yet compare with prpduction and (he usual series of
Largest common stock holdings the results which are bound to be consequences with which we
are
were in the Rails, Oils, UtmtiSs shown in the third and fourth all too familiar.

VANCE, SANDERS
from

.10

Uncertainty

for signs of

a major unfavorchange in the business and
financial outlook, which will certainly develop at some future
date, but of which none, other
than
the
slight
hardening
of
money rates, has as yet appeared."
As"of July 31, 1946 the" invest-1

may

.01

Pfd.

ket is worried that there will be

Prospectus

.08

.09

.i,_

The Economics Behind Cnirent
Stock Market

able

Funds

.045

of July

writer that the

CustoJian

.015

the

^ ^ ^rket

ey stone

.08

r™ .
tr
plans.
.
..
;l firming of money rates, the virtual
Hugh W. Long & Co. has new
Another interesting and timely
termination of inflationary deficit
folders and memos outon the rail booklet from
ttis sponsor, entitled
financing, and the maturity of the
equips and steels.
The relative "This
Shareholder
Wants
..

.07
.035

in that terri¬

.15

.10

.035

tory.

American

.08

stock

present time,
As cautious investors we can
only

When

into!youtt' if is

NATIONAL SECURITIES &

120 BROADWAY

level

to. estimate

reports

believe.

f iinric

RESEARCH CORPORATION

will

mar-

The first half of 1946

common

were

highly enlighten- prices. How long these tendencies

the; largest ; volume of

witnessed
new

further

general

ket in its current Investment Tim-

ing service.

Inves¬

.03

of
31
per share paysblb Sept*
substantial advance in commodity Calvin Bullock — Ntew memo 30, 1946 to Bank Group Share¬
prices. Normally this should pro- and revised portfolio folder on holders of record Aug. 31,

National Securities & Research

Corp. provides

repre¬

Equipm't

Industrial

Coast

.05

——

General Bond

the

Incorporated

retires

side of the general business expansion continuing with a further ing holdings

ing analysis of the

sentative

tors,

Pacific

years

.05

Pood

Corp. has announced
Frank Boyce Tupper, for

Selected

pany.
_T

Electrical

.01

.10

Fully Administered-

The Parker

that Mr.

;

.05

.04

__—

Chemical

.045

.01

.10

Building

management fee on assets in ex
cess of $150,000,000. Knowing of

many

.055
.04

Aviation

able

increase
assets

example,!reduces

"From this review of the favor¬
Mutual Fund Literature
and unfavorable: factors in
Selected
Investments
the
Co.
present situation it would
Portfolio
seem that the balance was on the
Memorandum

22% increase in shares

for

point in high-grade bond prices September 1 and
have been passed."
Jones succeeds him

Uli
UUUC
314,955 on June 30 were the
highest for any reporting date in
the 15-year history of the com-

63 Wall Street

Regular Extra Total
_

Automobile

outstanding management record
has just released its semi-annUal
report covering the period ended
June 30, 1946.
In the first half
of
this
year
Commonwealth
achieved

ment,

Aug. 16:

Agricultural

the apathy of
*
1
Axe-Houghton. responding
to
Fund point to the recent increases matters, this reference is
directed
in (a) the Federal Reserve redis- to interested dealers.
Ballots
count rate, (b) the interest rate on should be in before
September 30.
brokers' loans and (c) on bankers
brokers'loans
bankers'I
V 0
Personal
acceptances.

•This West Coast Fund with the

outstanding

YOUR INVESTMENT DEALER OR

€

ment managers of

high rate of activity before many
months have passed. Earnings for
UiX*
the second half should be sharply
than
w
higher than for t.hft first half of
the first half

Commonwealth Investment

A PROSPECTUS ON
REQUEST FROM

In their current summary of the
investment outlook, the invest-

Group
Securities Investment Report.

BUILDING

iiigner Interest Kates

1941

and this should be reflected in

1946."—From

t__1

being
a high rate of in4 fund, we
caught ourselves taking asked to approve amendments to
dustrial activity. Before very long, a rather
personal satisfaction in the Keystone Trust Agreements
strong impetus to the general the record it has achieved and which
appear to be decidedly in
—i"" "iMiiro will hp
nrnvided t.hp iob it has done for
investors, their own interest. One amend-

Certainly it is not Contrary to the general imprespleasant to contemplate what is sion, new orders within recent

T**'*

r\r\

are

not at all.

fluence of such

—

likely to happen to prices if and
when markets are subjected to
any
substantial and prolonged
liquidation of securities."—From
the August Portfolio Review of
the George; Putnam Fund.

stock of record

Revised

time, in view of the level of prices and the boom
prevailing
in
many

parts of our economy today togfether with a fundamentally unsatisfactory labor situation, we
prefer to continue a rather cau-

proven

of the solid reasons
why.

some

probably representing a
of the upward

major

have

(and most

last

some¬

times better to select the
security
the lower current income.
An actual case
with

own

-w'tntfe^r.

*&<£}*■

Thursday, /^giis^ 22^ 1946

Know," explains why- it is

two

our;

21,500 shares it has Prospectus on National Securities
nearly
$700,000
more Series dated
July 30, 1946; Re¬
thing points to a repetition of profitable over the
—„......
past three vised Prospectus on First
thoir* ncnnl
nprfnrmanpp this time, vpars.
Mutual
'
'
'
their usual performance this time, years. IO
Trust Fund dated
The Long Co.'s new folders citei
July 30 m

"The action of tbe stock market in recent months
the stocK marKei in
inuiuns has raised a
nas xaiscu a
•'•••*
vfu^otlv/ll
question in the minds of many people as to whether we
may not
—4
have seen the end of Al>" 1—" -*'"•» *•»-» stock nrinoc +Vm+ ctr»r+Ari in
the long rise in "tnnir prices that started in
1942.
We look upon the present period as
all

this

"fireworks" in the latter portion
of past bull markets and every-'

phase

market.

tries
;

for

dangerous)
bull

"Good." V, These

happen

!r-

Prospectus

>•?;

!!!!!
Request

GENERAL DISTRIBUTORS

tOS ANGELES
West Seventh Street

NORTH AMERICAN SECURITIES CO.
2500 Rim

Building

Son Francisco 4, California

; ■ sponsored
; higher
wage
costs when it was in
dire fear of

deflation, labor
for

will be
responsible

price level which, when
gent demands are
a

ur¬

satisfied, will

bring to the surface and make ef¬
fective the disequilibria
that

now

temporarily submerged.

flation via

route,
sumer

wages

not

all

groups can

are

In¬

dangerous

economic

con¬

long endure the

Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

■

•.>;

'\i»

small

holding company which lias '
in bankruptcy. Its- subsid¬
iary, Southern Utah Power Com¬
pany, will also be recapitalized.
)
The outcome regarding several
plans proposed for liquidation oi
Northern States Power Company

price level it exacts, nor is itcpnr
ducive to foreign; trade.
!Vl ;
Investment Policy

been

The uncertainties briefly de¬
scribed :: above dictate a cautious
investment

lieve
be.

I do hot be¬

policy.

inflexible position should
maintained
at
this
stage.
an

Specifically, 1 advocate that in
portfolios which are more heavily!
committed to equities than war¬
ranted by normal conditions, se¬
curities selling
at approximate
full values be liquidated and on
the
next
important, rally such

liquidation be accelerated pend¬
ing clarification of the labor out¬
look.
If a new round of wage in¬
creases and
price advances does
not materialize I would not hesi¬
tate to

reverse

this

policy.

to expect a near term reaction

i any great proportion'at this stage.
Even if major labor troubles are

Impending it is quite unlikely that
.they will develop before the Con¬
elections

are

over.

Moreover, it is difficult to visual¬
ize a market which would ignore
the current outlook for perhaps
the greatest rate of peacetime
activity the country has enjoyed
since V-J Day, and the publica¬
tion
of
extremely encouraging

third and fourth quarter income
reports. Even if the longer term

prospects are for an upset, I do
not expect the market to look that
far ahead

prospects

before
are

first

market action.
no

the

Developments in Holding Company Integration

immediate

reflected

In any event, we

longer have the credit struc¬
which

the

brought
about successive waves of liquida¬
tion, each precipitated by the
past

Campbell

said

expects to

renew

bids at

the

company

its invitation for

later date.

Public
has

that

Service

with

the

New

recently filed

its

Jersey
dissolution

which

SEC,

pro¬

with the Electric & Gas
Company, through exchange •. of

pany

stocks.

Control

traction

the

subsidiary would also

pass to

the

latter Company. As forecast some
time ago, the Philadelphia Elec¬
tric

plan is being copied—-Public

Service Electric will reclassify its
stock

common

ference

dividend

pre¬

and

plain com¬
$5 preferred
may be paid off out of the sub¬
stantial cash on hand, or possibly

mon.

-common

The

converted

present

into

lower

dividend

preferred.
: Public Service
Corp. perpetual
6s will receive an equal amount
of 50-year debenture 6s of the
Electric & .Gas Company under
the
plan.
The
four
preferred
stocks

and

the

will

common

exchanged for the

Cincinnati

capped

has

new

dividend
stocks,

handi¬

been

somewhat by rate

tion,-and the offering to

preference

appears

Circulation Statements
We

some¬

give below the text of

stockholders

litiga¬

common

involves

a
standby
days-—hence
a negotiated
deal rather than competitive bid¬
ding. Underwriters will be paid
separately for assuming the i;isk,
and for distributing any, unsub¬
scribed shares. Cincinnati G. & E.

period

about

the SEC consented to

will

listed

sale

"token"

the

and

signed it on July 2. The text of
top companies in the Associated the new measure follows:
system are now being made.
.

Gas

Associated Gas trustees
dismissed

are

NY PA NJ, mosi
sub-holding company
of the system, will be dissolved if

[H. R. 2543]

AN ACT

and

important
the SEC

require

; enjoying
!

approves.

make

■

weekly
newspapers
mailing privileges to
statements

sworn

amounts

its

face

value. The

Commission

will

stock

holdings, as the now consider a proposed merger
most practical means to evaluate of
the holding company with lead¬
remaining holdings (thus avoiding ing subsidiaries.
The Commis¬
protracted litigation over theoret¬ sion's opinion does not definitely
ical values). The company pro¬
dispose of the equity of common
poses to obtain simultaneous bids
stockholders, although it is quite
on
blocks of Florida Power &
possible that the SEC may follow
Light, Kansas Gas & Electric, suit (in the past, however, the
Minnesota
P o w e r
&
Light, two Commissions have not adcommon

Montana

Power

and

Texas

common

Util¬

eye-to-eye with respect
company's affairs).

ways seen

to the

and for other purposes," approved
Aug. 24, 1912, as amended (U. S.
C., 1940 edition, title 39, sees. 233234),
is amended >by -inserting
after- "daily"
the
words
"and
weekly," "semi-weekly;" and "tri¬
weekly."
-

Approved July 2, 1946.

:iii

—.—a#

Charles Clark & Co.
Add Two to Staff

Charles Clark & Co., 72 Wall
Street, New York City, members
New ; York Stock Exchange, an¬
nounce that Donald Caldwell, for¬
DAVENPORT, IOWA—Beyer- merly Lt. (j. g.) in the U. S. M. S.,
Rueffel & Co. is being formed and Hoghland Van Norden, for¬
with offices in the Kahl Building merly
Lt.
Commander
in
the
to engage in the securities busi¬ Navy,
have
become
associated

Beyer-Rueffel & Co.
Formed in

Davenport

Officers

ness.

President and

Netherlands Securities

are

John M. Beyer

^Treasurer, and Cal¬

with the firm in its New York of-

fice.

vin L,

Rueffel, Vice-President and
Secretary., My. Beyer was for¬
merly manager of the municipal
department of Quail & Co., and
has recently been serving in the
U. S. Navy. Mr. Rueffel was also
with' Quail & Co.

Hipkins to Manage
New

Goodbody Dept.

Goodbodv & Co., 115

Broadway;

New York, City, members

Walston Hoffman to Admit

of the

New York Stock Exchange, have

SAN
FRANCISCO, CALIF; — opened a department tp deal in
Walston, Hoffman & Goodwin, British securities under the man¬
265 Montgomery Street, members
agement of Herbert Hipkins. Mt.
of the New York and San Fran¬

Hipkins has been with the firm
cisco Stock Exchanges, will admit
in charge of the Canadian Secur¬
Joseph H, Tipp to limited part¬
ities Department.
nership in the firm on Sept. 1.

All

to be filed on

oj these shares having been sold, this advertisement
as a matter
of record only.

appears

before Oct.

15, 1946.

Securities for which no declara¬
tion is filed will become void in
accordance with the terms of the
decree.

Circulars
and
the
necessary
forms of declarations may be ob¬
tained at the office of the finan¬
cial counselor of the Netherlands

Delaware Power & Light Common

office

of the Netherlands in
United States.

the

NEW ISSUE

Federal Water & Gas Common
Public Service of Indiana Common

169,991 Common. Shares

Puget Sound Power & Light Common
BOUGHT

—

SOLD

Embassy, 25 Broadway, New York
4, N. Y., and at any consular

—

Abbott Laboratories

QUOTED

Holder* of

the Company's Common Shares were given pro
rights to subscribe for these shares at $60 per share pur¬
to subscription warrants, and 166,068 shares were so
subscribed. The remaining 3,923 shares were purchased by
the Underwriters and sold by them to Abbott employees at
the subscription price.
rata

Paise, Webber, Jackson & Curtis

suant

ESTABLISHED 1879

Milwaukee

Company

Promotes Grant & Call
MILWAUKEE, WIS.—Joseph T.
Johnson, President of The Mil¬
waukee
Company,
investment
bankers, announced the election
of

Paul

Grant

Mohawk Rubber

Prospectus describing these shares and- the terms upon which
they were offered may be obtained in any state only from such
0/ the Underwriters^ including the undersigned^ as may
-lawfully distribute the Prospectus in such State.

The

Deep Rock Oil

•xrly*:*";

Hallicrafters

Vice-Presi¬

dent and Secretary/ and the elec¬
tion of Van L. Call as Treasurer

"7;

;

since its

Grant

Milwaukee

Company

organization in 1929,

has

Treasurer,

been

Secretary

and Mr.

Mr.

and

Call, Assist¬

ant Treasurer.

•' •/

'•

■

A» Ge Becker &. Co^

Company. Both
Mr. Grant and Mr. Call have been
The

r- '■

Staley

of The Milwaukee

with

! •' '77- ':X

■....

A. E.

with

possible milestone in the
respect to their circulation.
long-drawn out proceedings over
Be it enacted by the Senate and
reorganization of L. I. Lighting House ■ of Representatives of the
was recently marked by the opin¬
United States of America in Con¬

;

Big Board. ion of Chairman Maltbie of the
gress assembled^ That the second !
American Power & Light ex¬ New York Public
Service Com¬
paragraph of section 2 of the Act
pects to file shortly with the SEC mission. He held that the com¬
entitled "An Act making appro¬
a plan
for the retirement of its pany's common stock is entirely
priations for, the service of the
preferred stocks. The company worthless and that the preferred
Post Office Department for the
will follow the procedure initiated stocks are
"impaired" to the ex¬ fiscal year ending June
30, 1913,
by Commonwealth & Southern— tent of about one-third of their
on

Declaration of

clouded, due to the varying Act signed by President Truman

but the ratios will be published in
a
later amendment. Holders of

Declarations have

what

now

ities
(the
recently
organized
holding company which took over
control of three Texas operating
the preferred stocks have been companies in the Electric Bond
other.
The indebtedness on se¬ somewhat apprehensive in recent and Share system). 15% of Amer¬
curities is negligible and there is weeks
regarding the treatment ican's holdings in each company
only very^ limited opportunity for which might be accorded them, would be offered for sale. Since
reinvestment at equal pr .better since the stocks are callable at the SEC has to pass on the gen¬
rates of return in bonds. V It would par in dissolution; the $8 pre¬ eral merits of the plan (involving
certainly be unusual for an old ferred has
dropped
about
25 hearings and decisions), and the
fashioned bear market to develop points from the year's high, and usual registration procedure will
when the dividend return on com¬ the other issues somewhat in pro¬ then follow, it may be several
mon stocks is by and large
months before the bidding ac¬
^
greater portion.
Columbia Gas & Electric will tually occurs. American will then
than on high-grade bonds.
formula
shortly offer 2,040,000 shares of develop an exchange
Cincinnati taas & Electrie common based on the price received from
stock to its own stockholders in public sale (plus 5%), to tender
the rates of one for six (rights to the remaining stock of each issue
expire Sept. 9). But the final price in exchange for the huge amount
will be determined by negotiation of preferred stocks (with large ar¬
with the underwriting managers, rears) which it has outstanding.
The office of the financial coun¬
selor of the Netherlands Embassy, Blyth & Co. and First Boston Preferred stockholders who don't
Corp. Evidently the deal was want to exchange will be paid off
25 Broadway, New York
4,. N. Y.,
at par plus arrears ($143.57 on the
informs interested parties that considered too big for competitive
under present
market $6 stock and $136.31 on the $5
Netherlands securities held in the bidding
even
tho u g h the stock). It is not clear from press
United States and owned by cor¬ conditions,
porations or indviiduals who are greater part of the stock may be reports whether any consideration
not domiciled or residents in the taken up by holders of Columbia will be given to call prices ($115
Kingdom of the Netherlands have Gas. The latter will pay off its and $110 respectively).
A
recapitalization
plan
has
to be declared pursuant to the remaining bank debt and its three
the
SEC
by
Netherlands Royal Decree E-100 preferred stocks from the pro¬ been8 presented
ceeds of the Cincinnati stock and Washington
as
Gas & Electric, a
amended
by Royal Decree
F-272 of Nov. 16, 1945.
ture

of Delaware

Weekly Newspapers
Must Make Sworn

Holding Company integration programs have been slowed some¬ claims advanced by counsel for
requiring
weekly,
semi-weekly
what by irregular market conditions. For example, New England
the Lehman plan and the oppos¬ and i
tri-weekly i newspapers
to1
Gas & Electric had planned to sell a large amount of collateral trust
ing ''; jcquiisel for the Biewend- make sworn statements of circu¬
bonds and common stock in connection with its recapitalization pro¬ Johnson
group. Both groups, how¬ lation.
The bill passed the House
gram. The bonds could not be sold separately from the stock, and
ever^! are opposed to the official on Nov. 5, 1945, while the Senate
the price "floor" on the stock (set earlier this year) watf probably
plan filed some time ago and al¬ passed it on June 14, this year,
too high to interest the biddings ■
ready approved by the SEC.
following
which
the
President
groups
at this time. President of a debenture issue. Disposition
Last moves in the elimination

vides for merger of the top com¬

I do not believe that it is logical

gressional

Recent

plan

Near Term Outlook

1025

Incorporated

Gilbert J. Postley

Co.

F. S»

Shields &. Company

Moseley &

29 BROADWAY, NEW YORK 6, N. Y.
August 20,1046.

Direct Wirm to Chicago

THE COMMERCIAL & FINANCIAL' CHRONICLE

indiscriminately," he said. "Wage
increases, unless accompanied by
table

•

i,j.

....7

'•.i.'.h

effect of

raising production
Wage and salary payment's

costs.

constitute about half of the ulti¬

By WILLIAM McKAY
/•

•\

7. 'V.-

•*

•

VV'vT'V.'

mate cost of all

production.
The
government * * does
riot\ maintain
that
all
wage
increases mean

••

An international trade fair is

being planned for the summer of
Toronto, according to an announcement by Trade Minister
MacKinnon.- The event will not be a public exhibition but
merely a higher 'prices. < What we do say is
means by which buyers and sellers can come together from all
parts that in order to. preserve price
of the world, it is said. Though the Canadian Government and Cana¬ controls we must guard
^gainst
dian exporters have participated in trade fairs in other countries be¬ too rapid and too
large an in¬
1948

fore, this will be the first occasion^1 1 f"
when

,y 11111

■

crease in wage rates "

such

event has. been
conducted in Canada itself.",s
j
an

The fair will
in

Canadian Securities

the

buildings
that

these

and

the

iv The
Labor

Na-'

have

operation

the

15 to the manufacturers and
other

producers within the British Com¬
monwealth

of
Nations
and
in
those other countries with which
Canada enjoys commercial rela¬

and

executed

the Mon-

treal and Toronto Stock

Exchanges,

;

war

contract

cancellations

Grporatiom

last

The Dominion Bureau of Statis¬
tics also reported that
production
in
Canada continued to fall in
June.
Its index of the physical
volume of business declined

Teletype NT 1-702-3

Gains, however^ were;,reported in
v-

Stalemate Threatens in v
Steel Strike

A stalemate threatens

to develop

operators

and
the
government
mediators still miles
apart in ef¬
fecting any sort of workable com¬

GOVERNMENT

promise.
L.
W.
Brockington,
mediator, appointed by the gov¬

PROVINCIAL

ernment, has failed to conciliate
differences.
Meanwhile, the

sug¬

MUNICIPAL

gestion
F.

CORPORATION

has

been

advanced

that

Kilbourn, controller of the
industry, be given greater

steel

freedom under his
special power
as a
conciliator, to effect a settle¬
ment.

radio

broadcast, D. C.

Ab¬

bott, Minister of National Defense
and Acting Minister of
Finance,
warned

too

against the dangers of a
rapid and too large increase

A. E. AMES & CO.
incorporated

the

pointed out
price controls,

cost-of-living figures had

ad¬

by only 24% compared
with prewar years while
Great
Britain and the United
States had
sustained 32 and 42% advances

NEW YORK 5, N. Y.
RECTOR 2-7231

wage rates.
He
that with drastic

vanced

TWO WALL STREET

according

report

respectively. "We believe that

Vi,

trol

over

for

NY-1-I045

will

prices will be necessary
but effective control

time

salary

con¬

impossible if wages
rates

are

allowed

v.,

WHitehaU 3-1874

mattery

Municipal
facilities

Canada

and

Bond

Saskatchewan

and

Provincial

Corporate

(■

•

'■

$eeks Federal Aid

able

Publicly Offered

Loewi & -Co. is heading a naw ;
tion-iwide syndicate, offering

63,-»

Jackson

8c Curtis;
Reynolds • & i
Co.; Schoellkopf, Hutton & Pom^
/shortage/ ofminers and erpy, Inc.; The ^Wiscorisiri ^Gri.j '

fill the requirements

Australia alone and in New

land;

a
strikes in

Zea¬

industries

mining
have

•

and shipping

reduced coal

de¬

in the

shipping and. development managervof.the Union of .South Africa,

fe&wayfreigh^

;

cars.

Golds Stage " Brief Rally
in Stock Market

the

Canadian

stock

market

for Education

its -dullness.: Voiume of trading
small

and

prices remained
I Speaking before the annual con¬ unchanged. In New! York- Caria*
vention of the Canadian Teachers' dian externals
remained generally
Federation at Ottawa last week.
tuichanged lri^-■■a-^ small volume of
Otto Miller of Fredericton, advo¬ turnover. Canadian internals im¬
cated Federal Government
help proved iri price under the influ¬
in

financing eduction.
Some of
provinces and many of the
municipalities have not sufficient
fpnds to spend on education,* he
pointed out. A survey/made some
the

years ago, he said, revealed that
total of $143,000,000

was

being

spent on Dominion education each
year, an average expenditure of
$33 for each child.
This amount
should be doubled, he thought.

j Creamery Butter Production
'

Drops

was

ence

of the improvement in Cana¬

dian exchange to 3 %.

transit

4,873,212 pounds higher than
the average for that date during
\yere

t^e last five
sumer milk

years.

To keep

con¬

prices from rising two

Canadian

Corporation

the

Incorporated

Street, |New York 5

Bell System Teletype NY 1-920

njoW'4akes:About 5*000^^ cbrds^bi :
its o.wd- *
forests without
depleting their; arir
niuai yield.
If necessary 25,000 '

wood ^ annually% from

cords could be made available im-

niediately.

Another

feature:, pf

the company's
Integration policy
isj the installation ot a waste heat!;
recovery boiler which burns the

wood

waste

residue

left

after,

p^per makings saving 65 toris of
coal daily. *
.
^
\
••

Proceeds

the issue will be

used to increase wood

inventories,

improve
recently
acquired
Canadian timber holdings and for
general corporate purposes.
A
new
special products division is

Increasing

from serious labor
permits North American

freedom

trouble

Philip W. K. Sweet Dead

Canadian Bk. of Commerce
Sees US-Canada Trade

/Philip W. K. Sweet, President

investors

Management Com¬
Inc., 63 Wall Street, New
York City, died at his home of a
cerebral hemorrhage. Mr, Sweet
was found in the street Sunday
night and police at first believed
hp was the victim of a hit and run
pany,

driver. The Medical Examiner

ported after

re¬

an autopsy that Mr.

Sweet had died of natural

causes.

industry to operate at a higher Mr. |Sweet succeeded the late
according to the August Philip J. Roosevelt to the presi¬
commercial letter of the Canadency of Investors - Management
dian Bank of Commerce. Effects
Company, Inc., in 1941.
He was

level,

are

ever-widening circles and
now
embrace all parts of the
country, said the bank's letter, is¬
sued Aug. 14, which also com¬

Government,

investments,

20-year-^old 're-

jprogranri^the^comparijK//'

••

creamery

storage and in

As a pioneer in a
forostatiori-

stocks

one

Interest is
now in formation to handle
mew
high in New York in the matter
■items.
The company has not dis?
of the refunding of approximately
closed the nature of these new
$47,000,000 in Montreal external
municipal bonds, competitive bid¬ products,
i
»———
ding upon which will be received
at Montreal today..

Canadian-American trade, the
butter pro¬
duction dropped 1,690,828 pounds greatest between any two coun^
iri July as compared with the tries, should develop naturally to
same month a year
ago, Aug. 1 even greater proportions as soon

i Although

offerings furnished upon request.

14 Wall

Stock

the Australian

ipent. The government will also during the last week, gold mining
grant to universities loans -fixed shares staged ,a brief; rally but
pt $500 u year for veterans attend-- rpori lost/mostoffheirgains. /The
ing those institutions.
market was otherwise notable for

organization in New York,
London, England, are available*

M unicipal

Nekoosa-Edwards

mining in¬ 000 shares of $25 par common i
dustry, New Zealand is said to be stock of the Nekoosa-Edwards '
looking to Canada for coal with Paper Co. of Port Edwards, Wis» :
which to maintain ;her railway The offering is to be feade iirs^to common stockholders on the :
services* electrical supply $nd gas
output.
New Zealand wants the basis of one for each four held.
coal shipped in place of ballast The^ ^offering! price is :$26.75 per Associated with Loewi & •
on
vessels plying the New '25$a? share.
land-Canadian trade.
The Aus¬ Co^ 4ri! the amderwritih# are: Lee '
tralian mines are said to be barely Higginson Corp.; Paine, Webber,
in

Canada» may - participate

Veterans who fe^t farm land 'With
a purchase price of .more,
.than
$6,000 may also receive,, help 'to¬
ward buying livestock arid equip-

our

•

Government

some

j NekobsarEdwardSi? Papery
of the top'three in 4he
ybon4 ■
paper making industry* ^evotesid *'
features, of the bills affecting vetr who
heads
a
nine-man i South major part of its entire
output to !
qrans that have just been passed African
Railways
and
Harbor fine, treated arid
specialty papefe. ;
is the guarantee the government

Wood, Gundy & Co.

ings of gold -and United States
dollars to meet any unfavorable
balance for some time'to come."

has been reported severe in south¬
western

$1,500,000,000 authorized by recent

CANADIAN
SECURITIES

Control Board has sufficient hold¬

before

;

rise

the United States.

;

and

relating
and

markets such

However, the Foreign Exchange

Co.;

Business Loans to Veterans

Canadian Securities

Company

exporters wilL divert
mprie 'goods to the highest-priced

fully matured. Sawfly infestation

felt

64 Wall Street, New York 5

a comparatively
level, it is prob-i

rjble; that

and also benefited those crops not

of work stoppages in Canada

TAYLOR, DEALE

qf the .World with
low general price

heavy rqins throughout
mo st
grain-praducing districts
hampered; harvesting operations
last week, they prevented further
^deterioration;, of. f he. ►. grain crops
resulting from the extremely hot,
of the week

of the few real
surplus areas

one

While

dry weather

"As Canada is, for the present,

Rain Prevents Further Deteriora¬
tion of Grain Crops

liveries.

Government Will Guarantee

j
>

CANADIAN STOCKS

%'■ V*

the

in the-Canadian steel
strike with
the Steel Workers
Union, the steel

CANADIAN BONDS

mineral production, and distribu¬

'k'

intimated

2.9%
Mission; now on a .six-months
178.9 in June,
continuing a will giye^on Joans up to $3,000.,*:;. world ftour?;; said/Canadian indus¬
downward trend whichv has been Pssist .veterans to enter
'or re - tries ,3could provide motor vehicles
in existence since
early in) 1944. ;enter business ,or professional life. and

tion.

Agriculture,

House of Commons last week*

40 Exchange Place

New York 5, N. Y.

desir¬

progress¬

date,Gardiner; Minister of

George D. )B. Bonbright

However, [

been

may;

have to be continued beyond that

$300,000,000
expansion
planned Braun, Monroe and Co.; The Mar¬
j About J/100,OOO Canadians will for;;the Souths African 7raHwaysy shall Co.;; McKee /and jaeckels;
actually receive some benefit or airlines and ^ harbor
development; and Riley & Company.
pension from payments .totaling DA H, G, duPlessis, chief harbor;
/

plants.
has

30,

resulting from, exchange
variations, making Canada a freer
;market, said the barik. The For¬
eign Exchange Control Board can
prevent the dumping of cheap
goods from £ther countries;
- <

;

strike

fell.

Bell System

steel

recession

end -Sept.

tendency

cheaper-imf

ports,

Cruttenden & Co.; Nelson Douglass & Co.; A. G. Edwards &
Sons;
Bell, .Farrell 8c Stebbins, Inc.;

current

ing steadily since the large-scale

Dominion Securities

;

domestic
the

Direct Private Wires tp Buffalo,
Toronto and Montreal V

the

find

A reorientation of
thinking on immigration policy is
needed at this time, it was pointed
out, in view of the development
of Canada from an agricultural
country to one in which industrial
production hps taken the lead.

States,

New. York Prices.

.•

num¬

are

then

committee.

attributed
in
part to
the
cumulative effects on
general pro¬
duction of recent strikes in
both
Canada and
the United

including

net

reasonable

means

and

arrival,"

was

(for dealers, banks and
institutions)

filed with the government by the

July

for any time since
January, 1941.
The index stood at 138 on
the
basis of 100 in 1937.
The decline

bonds.

■

vigorous administration that

bringing them here and of assist¬
ing them in being successful after

The Canadian Bank of Com¬
merce's index of industrial activ¬
ity was at its lowest point in

external and internal

orders

rec¬

able

all classes of Canadian

Stock

The

ber of immigrants who

tions.

MARKETS maintained in

and

recom¬

a
selective immigration
covering both agricultural

will search out

Business Index Down
.

has

scheduled

ups, will tend to offset a
normal times' of

ommendations, iri ;facty go■ so/ far local hail damage has been re¬
as to include a
proposal to open ported throughout the provinces.
Canpdiariv immigration offices, in
New Zealand Wants *
Europe. v"What is needed is a
new policy of selective
Canadian Coal
imriiigra- ; ;
tion to replace that of repulsion
With chaotic conditions report¬

project.

Invitations to take part in the af¬
probably be sent by Oct.

stocks

J./:

Immigration

.Committee

and industrial workers.

fair will

;

Senate
..

policy

the

most suitable facilities for the suc¬

cessful

•

mended

it is believed

structures

>'''

Policy

adjoining

Canadian
as

j Urges a Selective tmmigratioii

probably be held

coliseum

tional Exhibition

bonds

cents
a
quart,! the government
subsidy of 55 cents per .100 pounds
of tinned milk to milk producers,

increased output, have the inevi¬

Ctuiadimi

Thursday, August 22, 1946

mented as follows:
"On the basis of trade for the

also President and Director-of the w
Fundamental

Investors, Inc.
the Investors Fund C, Inc.

and

Stark & Co. in N. Y. C.
Stark

Co.,

Inc.

being

! six months
of
this year,
Canada's ;'i exchange
position. in formed with offices at 10 East
United States dollars shows ad¬ 40th Street, New York
City to en*
verse
factors
of
$700- million
gage in the securities business.

first

against favorable factors of $666
million, the letter point out. How¬
ever, it is quite possible that by
the end of this year the net- ad¬
verse position will be more
than
offset by the tourist trade.
"A new official system of pric¬
ing with less than normal mark?

Officers

are

Howard

President;

Stanley

President

and

formerly

Stark,

Rubin,

Vice-

Treasurer;

Sonia Bram, Secretary.
was

a; statistician

Lehman Brothers.

and H

Mr. Stark

with
;

-r--.

[Volume 164
V'

THE

Number 4518

1027

COMMERCIAL. & FINANCIAL CHRONICLE

mtrnmrnrnmrnm

'-I

)

That meeting had three sections;
(Continued from page 1013)
the world granary plan, although Statistics,' distribution of informa¬
it did not gu into' detail1 when pri tion; and! libraries.
There is a lqt"
Aug. 9 its press officer announced of Work to be done in these fields,
and * an international
body like
.that:
i
:
"The FAO plan is not ' suf- FAO can be very; much more ef¬
f iciently developed' to determine fective than any single natiorj*:
V: whether it provides- a promising Some* countries have'almost hp
/, approach * to
these* agricultural agricultural statistics, and those

take the investigations necessary
tcr determine what world' prices

The Worid Ever-Normal Granary Plan

problems.

It is believed,* however.

WhWh exist' are not compiled on a
uniform basis or at the same' time.

would call forth the quantities
that could currently be marketed.

Board) which would7act through

commodity" committees,' might bp It would announce a maximum
established .as an new interna/ end minimum price and would
tipnal .agency, or the Constitution undertake* to; buy into * its -stock
could be altered to en/1 when, the
price fell below
able it to set up the Board. There the declared minimum and sell
its stock when the world
are drawbacks to having a mulj- from

woridk

"of FAO

exceeded^ the

tipliQity of international agencies price
acting in the same field. If thp Care
latter- alternative

needed

com¬

operations at the correct

mence

thought t6

were

would

maximum.

the Board. moment and to choose an appro¬
hope that by 1950 st world could be appointed by the Con/ priate* world price.
The Board would' need a re¬
; tive
solutions' considered/ -The agricultural census will be pbs7 ference. of FAO, which it is hoped"
will ultimately include represent
b:■ Government favors the creation sible.
volving fund- to operate- such a
tatives of all countries. But as the plan.
No precise estimate of the
"At the Special Meeting of FA$
7 of an international*-committee to
~

that these problems are important
and should be-studied and a;lterna--

the

better means,

actions

volve

analyze this and any alternative on- urgent food problems,- ' the
proposal and" to prepare a plan of' Banish representative invited the
International" action,'/
FAQ to hold its next annual con4
In short, the outlook is for con- ference- at
Copenhagen; and Sih
7 aideration of the plan by a special John accepted the invitation. The
international committee to be ap- conference, which begins on Sept.
pointed at Copenhagen; and it 2, will probably last two weeks.
would be surprising if the Amerr In addition to Sir John's plan, the
lean'member: of that committee agenda
which
the
conference
-

does not have some more

the

broad

Board

would

problems

in¬

amount

world

present.

economics and finance,/ it would
be necessary to include in it rep*
resentatives

other

grow gradually as
commodity and then an¬
other was brought under the aegis

funds

first

interested

international organizations

—

for

the Economic and
Council,' and the proposed
ment,

tained

Sir

John

Orr's

docU*

opment; uniformity and; prompt*
tmss; forestry problems; which are
For background on the coming closely
related to
agriculture;
7 conference the writer consulted fisheries? and' some of the tech/
Mr. Li A. Wheeler* who will be nical aspects of$ infernaHonaL co/
Mr. Dodd's number two man at
operation in this field, such as
/Copenhagen,.
7.
nutrition problems; agricultural
Mr.
Wheeler,
production methods, and the like.
a
veteran
of
Of course; the conference Will sef
international
up
a
special committee on the
conferences,
subject of a world food board.
>
7 is director of
"I am hopeful. that there will
the Agricul¬
be a very free exchange of views
ture
Departat Copenhagen as to the pros and
ment's
Office
cons: of- the- Or*
plan's general
7 of Foreign ;
principles and that there will be
Agricultural
agreement as regards' the impor/
Relations. Mr.
lance of the objectives of those
"Wheeler was
proposals. It is not reasonable tq
a
member of
expect that in a meeting such as
7 the American 7
the Copenhagen Conference, the
/ Delegation to
normal purpose of which is merely
7 the Hot
Leslie A. Wheeler
'so lay down a line of .action' ioi
j Springs Con*
me director of-FAO for the com4
iference of
ng
year
on- such
matters as
1943 and worked with the result¬
budget, personnel add the like;
ant committees which drafted the will get .deeply into detail and
7
ment..

FAO

Charter.

was

also

FAO's first annual conference in

..Quebec last year.

make a statement as to the prac¬

ticability of the Orr plan;"
Asked whether the proposal

'The plan of

cusslon of the world food situa-

J |ion in the UnitedNations Genohn wired the General Assembly
tral Assembly last February. Sir

from Food and Agricultural Organization's headquarters in Wash¬
ington that, since the matter came
within FAO's scope, it would call
a meeting to discuss it;
That
? meeting was.',called in May and is
„

referred to as the Special Meeting
of FAO

Urgent Food Problems.

At that meeting were representa¬
tives of some score of countries;

plus representatives of UN!ahd of
7 the Emergency Economic
mittee for Europe. *
~

"The May
Mr. Wheeler,

Com-;

meetihgi'- continued
/'established an In¬

ternational

Emergency
Food
Council
(IEFC) to replace the
Wartime1 Combined^ Food Board;
on which only three countries, the
USA, UK and Canada, had been
represented. The IEFC has about
20 members. In the course of the
debate at the May meeting on

held

The

Food
1.

functions

tox

the

f ;i|4l§

World

Since

ensure

that sufficient food

and

distributed

might over¬
The basic prob¬
the financial one of
increasing; the purchasing power
of the people who are unable to
obtain sufficient food for their

mitted

to re-emerge

whelm the Board.

lem here is

agency Would normally7he buying. at its minimum
stabilize prices of agri¬ and selling at its maximum price,

Carl H.

Krai With

Boyd & Co. in Cleveland

CLEVELAND, OHIO — Carl H.
the' quite* considerable" costs 'of Kent, Jr., formerly trust invest¬
storage. It would, of course, have ment officer
at the Cleveland
it. should

enough, to

cover

hold

much

Trust Company,

larger stocks than the normal, hut
these extra holdings should be fi¬
nanced by borrowing on the mar*
ket against1: its commodity assets.
}The needc for such - operations
world.
3. To provide funds for financ¬ would be greatest in time of- de¬
ing the disposal of surplus agri¬ pression when funds are avail*

ciated with the

cultural commodities

the "World

including provision of
the necessary funds for stabilizing
operations.
2: To establish a world food
reserve adequate for any emer¬
gency that might arise- through
failure of crops in any part of the
markets,

earn

occasion** to

very

able at advantageous rates.

cultural products on special terms
to countries where the need for

Producers of livestock products

has become asso¬
investment coun¬
sel- firm of Boyd & Company, 1700
Union

Building.

Commerce

entered the employ of the
following
his
graduation

Colgate University

in 1928 and

engaged in investment
analysis work since 1932. He is
married, has two children, and;

has

been

perishables: hot suited
resides at 3140 Woodbury
with organiz- to long-term- stock holding will Shaker Heights.
find their markets both greatly
tions concerned with international
:
W
by the buffer stock
credits for industrial and agricul¬ stabilized
operations on feed grains1 and
tural development7and* with trade
other items and' greatly enlarged
and
and: other

them is most urgent.
■

4. To

Commodity policy, in order

that their

common

through', the- nutritional- policies

ends might be

concurrently * developed*

Blyth Opens. Dallas
Branch Under Foster

sary to cooperate
tries." /v-7,7.
*. 7.

with other coun¬

7.77-

The text of Sir John Orr's plan,
as

excerpted from a bulletin en¬

titled,

for

"Proposals

Food Board," is as
The
:

This advertisement is not, and is
securities for

sale

and

deal' with

Functions—The

the

food

under no circumstances to he construed as, an offering of the followt&Q
a^solicitation of an offer- to buy any of such securities^
made only by the Prospectus,

or as

The offering is

Suggested World Food Board

Structttfe

temporary organizations
to

World

follows:

•

-v.

;

created
scarcity

caused by the war foreshadow the
of permanent organization

kind

The

needed.

ternational

recently created In¬
Emergency
Food

Seismograph Service Corporation

Council, working: through com¬
modity
committees,
encourages
long-term food* problems! stabilization of
prices by getting
among these France, the Nether¬
agreement on price schedules and
lands, and Czechoslovakia.^ They
also by promoting a certain amount
■.Wanted to know how FAO and
of unified buying; and it recom¬
UN would operate from the long.

Common Stock

i "Therefore,
it was suggested;
that the, meeting request Sir John

mends

the

allocation

export

Price

surpluses according to the needs
of different: countries.
UNRRA
has funds to prpvide food and

7 to prepare. a plan for long-term agricultural
implements,
fer¬
action and submit it to the next
tilizers, and other, supplies for the
FAO" annual conference this-fall. rehabilitation
ofcertain
warA resolution; to;

that' effect- was;

/accordingly adopted by the Spe-;
Meeting of FAO in May.
"Amdng the European countries at
that /meeting; there were fairly

/ cial

London

experts-

meeting,

7; which I attended, looking toward

the building up of real fact-find¬

ing

the

field

agriculture.

per

registered dealers in such state.

devastated countries. A continua¬
tion of this international coopera¬
tion is needed because even .if

•f'i.

■

rrr* ,:irn

these-

temporary
organizations
bring: the world out of the present
general sentiment'in favor of this food emergency, there will still
course. The resolution was unani¬
remain the great scarcity of food
mously passed.
that existed before the war and
j "Meanwhile; in April, at the in¬ at' the same time- the agricultural*
stance of FAO there was held in

$12

Copies of the Prospectus may "be obtained in any state in which this announcement
is circulated only from such of the several Underwriters as are

Road,

cooperate

7 pst • in

term foodstuffs" point of view.

He
bank
from

Certain
quickly
and,
effectively
livestock products capable of. be¬
achieved.
be flying in the face of past ex?
ing stored for- long periods might
DALLAS, TEX.—Blyth & Co^
Operations—For stabilization of be included ^directly in the, oper¬
perieneo hi this country with com*
Inc.,
investment bankers, an¬
prices in agriculture the World ations.qiqdity
stabilization operations
nounce the opening of an office
and interfere with freedom
of Food Board, operating through its
In the case of a few commodi¬
trade in a private economy, Mr, commodity committees, should be
in the Mercantile Bank Building.
ties there may be danger of com¬
Wheeler said: "No, I think it im¬ given power to hold stocks of each
The new office will be under the
of the most important commodi¬ petitive
e x pp. r t
subsidization
portant to note that existing legis¬
This proposal; it may be which, if tolerated, would destroy management of Robert K. Foster.
lation relating to the Department ties;
of Agriculture requires* this De¬ noted, if in line with principles the
international stock holding Mr. Foster was formerly with
Hicks & Price and Shields & Co.
partment to work on the stabiliza¬ previously put forward by, the
League
of
Nations and other program. In such cases it might
tion of prices, and in doing this it
in Chicago.
The Board would under¬ be necessary to negotiate sched¬
is sometimes desirable and neces¬ bodies.

Urgent
food
problems
several
delegates showed a special inter-

bring the consumption of all peoples-up to a health standard. The
need- for additional food is so
great that if human requirements
could be translated into economic
demand, there would be no ques¬
tion
of v surpluses
of the basic
foods—surpluses which before the
war many people came to regard
as
inevitable and which if per¬

the

Board would be:
To

is 7 produced

carefully

be*

•

7; The objective of the operations
of the World Food Board would

the

close, since the latter agency, ac¬
cording to present indications, will
be concerned with the broad field
of
commercial and commodity would - need'
policy.( 7 7
"7-- "7. i. weighed.
£

agency

tingency has been recognized and
provided for in a similar way in
the United States Proposals for an
International Trade Organization.

needs.
The Board must be able
contributions to be to divert ^unmarhetable surpluses
made to the fund, the relative to these consumers : and arrange
benefits* derived from the sta¬ for refinancing the cost of selling
at prices which the consumers are
bilizing operations by different
countries—exporting and import¬ able to afford.
ing, developed and undeveloped—r

mining

Board and- ITO would need to be

the

should 'represent six to ^months*
Social trade, the amounts varying with
Inter¬ different commodities. In; deter¬

working relationship between the

Sir John Orr," said a" World Food Board to engage in
7 Mr. Wheeler, "stems from'the disstabilization operationa might hot
(•

For safety, the nor¬

plan.

stocks

mal

specific adopts is expected to include such
version* of the project than is con/ subjects as statistics, their devel/ na,tipnal Trade Organization. The

would

one

of the

example, the International Bank
Reconstruction and Develop*

for

required can be made at
Moreover, the need for

ules^ of export quotas between
governments until new markets
could be developed.
This con¬

Paul H. Davis & Co.

Merrill Lynch,

problems of fluctuation. in prices
'

and

the .accumulation of unmar¬

ketable "surpluses."
The

proposed

World

Food

,ySAligust 22,194S

Pierce, Fenner & Beane

7:7'77i; ;:-:7-;7■''■--77 7 7-.:. 7 :.

;

':';7;

Kidder, Peabody
;

Co.

;;7;7: 7;. i .;77.;. 7; .7; / '7 7

5|-S:W;

1028

THE COMMERCIAL' & FINANCIAL CHRONICLE

(Continued from

page 1008)

most people believe.

;

mox.uio eauea

must be some other reason to

convey your

knowledge to others.

business has

fighters enter the ring when
it?

The end of such

one

as:

with

increased

costs,

considerable decline

cause a

The last Louis-Conn fiasco

ample.

vVv' V-\'.

Someday psychological reasearch
mine the exact
world

success

that

was

'li. '" ; '.:

may

dependent

and the real

be able to determine what part of
upon

our

own

■

favorable

faith in

ultimate

our

selves, and what
contributes to building such
faith, etc. We do know that constant
can undermine our self
confidence and that our
our

failures

successes

rebuild

self esteem and faith in ourselves. The
psychologists have
far in this field already. But there is one
reaction

our

gone very
seems to

which

hold true almost
every time

we test it. We do .not need the
studies of professional
psychologists to show us that we believe in

do others feel the

same

about

watch makers,

their speech and their

into the

corner is what

they will

them securities.

see

saw

when Joe Louis

STUDY.

ingly.

stepped

in you when you call
upon them to sell

If you know
your

your

for your own morale—but

A great surgeon knows the

uses

ments but he doesn't use all of them
in

only the

that

use

your

knowledge

spar¬

of every one of his instru¬

performing

operation-

every

further

rate

crease, in expenses.

job you will have confidence in
customers will heed your advice and be
inclined
to accept your
suggestions. THIS IS WHY IT IS IMPORTANT TO
yourself, and

that

Why

when Conn fidgeted in his

see

ing over

our

period

feeling that the

in¬

Baltimore, and Pacific Gas
are* not far from their

selling
of

cause

their

years.

yield basis ber

excellent

earnings
a period

„

many of the new

is¬

which have been
coming on
market

soned

and

earned

are

some

entirely
would

unsea¬

not

have

their present dividend in
until excess profits

recent

years

eliminated.

were

are

heeded: for the job.

Convertible $1

Preferred Stock

Class "A" Stock
K
nS f : ;v

|i; - J:

Circular

lack of materials to extend
^con¬
nections; such as, poles, trans¬
formers, etc. These obstacles are

and commercial services while in
many cases plants which were
used
for war
production

have

been converted to
peace time

and are
■

The loss

■

been

each

load

war

serious

because

kilowatt

55 LIBERTY

Co., Inc.

STREET, NEW YORK 5, N. Y.

three to four times
nue as a

brings * in

much

reve¬

kilowatt hour sold for in¬

seems very

new

electricity.
new

bright.

appliances

many more are
all of which are

Years

The outlook for the
utility in¬

day

For 33

not

hour

dustrial purposes.

dustry

Over-the-Counter Quotation Services

has

many expected

domestic load taken

Herrick,Waddell

uses

taking large amounts of

power.

request

are

Every

seen

and

being developed
designed to use

We have heard

heating unit which

and

"air conditioning and is so Con¬
structed that it not only heats the
house in winter but provides com¬
plete air conditioning in the

QUOTATION BUREAU, Inc.
Established 1913

46 Front

Chicago

mer,
year

this

Street, New York 4, N. Y. /
;

San Francisco

earnings.
Allowable Earnings
Until the end of the
utilities were earning

6%
the

war

many-

less

than
their investment. However,
relief from
excess
profits

taxes has permitted so sharp an
in earning power that
many
companies
seem
to
be
earning 8 to 10% on their invest¬
increase

Some commissions have aL
ready taken action to reduce rates
and the whole question of allow¬
able earnings has assumed In¬
creased

Further¬

importance.

ing the value of a utility equity.
In the last analysis, only a com¬
parison of companies in the same
state as to allowable earnings has
real validity, because the policies
differ

estimated'peak

ana*

now use

one

of the various

priced on
earnings
(after

Many

allowable earnings
of the basic factors which
must be considered in determin¬
as

been

adjustment

state

commissions

sharply reducing

and

hot

round.

unit

water

heating

understand

beyond

sum¬

the

the
that

experi¬

mental stage and
may be in pro¬
duction soon. The use of
power

the

home

will

increase much
faster in the next five
years than

for

had the effect

state

states in which it serves.

income.

Where estimated earnings seem to

The repeal of excess
profits taxes

represent a high return on the in¬
vestment, further,study is neces¬
sary to find the cause and this

suddenly

net

caused

must

followed by

inquiry

the policies of the state com¬
in order tp arrive at a

mission

satisfactory
missions

answer.

State

com¬

becoming more ac-;-.
instances. Inter¬
esting and in some cases highly
educational decisions concerning
tive

the

are

many

used

methods

rates

oast

have

determine

released

been

the

two in Michigan*
Montana, Arkansas, California and
the first quarter of this year, but just recently in Louisiana. These
1946 results may not exceed $1.75 decisions outline the commissions?
to $2.00 per share.
This sharp policy as to the rate of return and
fluctuation
in
earnings caused also as to proper depreciation,
some analysts to become far too
depreciation reserves, etc.
optimistic with the result that
Conclusion
they used multiples of 18 to 20
times earnings rather indiscrim¬
The outlook for the utility In¬
inately and also used estimates of dustry is excellent.
However, the
earning power far above conserv¬
utility market seems likely to be
ative
estimates.
Some
analysts
also multiplied first quarter earn¬ more selective from now on with
ings by four to get the assumed wider
spreads between certain,
1946 results which, of course, cou¬
stocks being the market's meas¬
pled with 18 to 20 times such
urement of differences in quality.
earnings gave extremely optimis¬
Today, many utility stocks appear
tic results.
as

much

60 cents

company

managements decided to take ad¬
vantage of these favorable mar¬
ket conditions, and there followed
in

rapid succession a number of
offerings which finally con¬

new

the

gested

issue

new

market.

However, this congestion appears
have been eased considerably

and it

tion
soon

seems

that further liquida¬

holding

year

70 cents in

holding

Naturally,

have
a v&ry
important effect in increasr
ing the use of power. This unit is
may

designed for house heating

NATIONAL

deduc¬

greatly. As a general
rule many analysts assume a 6%>
38% ' Federal
income
taxes)— rate
as
being
the
allowable
earnings higher than some of basis but in some
states, such as
these companies have ever re¬
Ohio, various companies earn 7%
rather unfavorably.
Many com¬ ported prior to this year.
or 8% or even higher while in the
panies are hampered by not being
The real cause of the
increasing South and Southwest high rates
able to get materials
necessary to
selectivity in utility stocks may of return are found in many In¬
take care of new demands for
be traced to the elimination of
stances. The subject is a complex,
ex¬
service. Some companies are even
cess
profits taxes and the sharp one and each company must be
putting new customers on the line
increase in utility
earnings. Until studied individually with particu¬
on a flat rate basis
because they last fall
many
companies were lar reference to the policies of the
cannot get enough meters while
burdened with very heavy excess Public Service Commission in the
others are handicapped because of
profits taxes which
off-set by increased earnings ove?
the next year, but for the next
few months the
increasq in costs
may show up in monthly earnings

That is why you know he

Lipe-Rollway Corporation

depreciation

more, many of the new issues have

;a considerable
gradually becoming overcome, but decline
in taxes and a?
is the. man Whom you can trust. So
resulting
in the meantime, the utilities are
it is with a good
salesman, his not
sharp increase in net Income. Re¬
earning what they could earn
knowledge gives him power tand others
accept him for what he is. if
ports for the first quarter of this
they were able to meet, all of
Life is so constructed that no man
year
reflected this change but
can fool himself and
not pay the the new
requests for services.
were
price. Those who believe in themselves are
misleadingly favorable in
Another
readily accepted for
interesting develop¬ many instances because some
what they are—others of small
ment which is favorable to the
faith are quickly appraised
by their
companies had overaccrued Fed¬
fellow-men and the wheat is sifted from the
utilities is the fact that in
chaff.
many eral taxes in the early months of
companies the loss of war load has 1945.
Some utilities which re¬
been more than off-set from the
ported earnings of only around
standpoint of earnings through in¬ $1.00 per share for the entire
creased demands for residential
year of 1945, showed earnings of
ones

and

do earnings estimated for
194©
compare with so-called allowable

lysts

However,
the

car¬

ment.

These stocks

year.

and dividend record over

sues

how well the
protected; how im¬
leverage factor;

the

Gas of

& Electric

in-»

mean;

are

tenance

time have

Edison, Southern California Edi¬
Houston Lighting & Power,
Pacific
Lighting,
Consolidated

and

tions reasonably conservative and
hoW strong an
equity does the
common stock have.
Also, how

grade

son,

will

what percentage of gross is

very little. Issues like
Commonwealth
Edison,
Detroit

taxes

in costs will be more than

crease

high

but

ried to net; is the
company on an
original cost basis; is the
territory
served a favorable
one; are main¬

decline^

are

erable number of companies have
put into effect rate reductions in
certain
classifications
of
their
business this year, but it hardly

likely

basis

highs for the

reductions, a consid¬

and wages, at least until increased
revenues
have
off-set the in¬

actions, that they have confidence in them¬

ring, and which they did not

As to rate

to about

men,

lawyers, accountants, insurance

The same thing the
press box

costs may be offset up
50% of the increase.

cuts will be
very numerous in
view of the increased cost of coal

dentists, automobile mechanics, radio repair men, and
salesmen of stocks and bonds? The
reason is that we feel it.
You
can feel when a man
knows his business. You can tell
by the hun¬
dreds of little unconcious
attitudes that another
person manifests in
selves.

tal

favorable

very

seasoned and have been outstand¬

cover

seems

some

people, and LACK FAITH IN OTHERS.
Why do some people say, "I have faith in
my Doctor"?

on
the average appear to
about one-half of their to¬
sales. Hence, Increased coal

this

utility stocks, in many instances.
High grade' stocks
which
are

direct off-set for increased wages
except increased efficiency, but
most companies have coal clauses
which

earnings

began, second grade utility equi¬
ties Were selling on about as a

utility executives with whom we
have discussed the question point
out that wages have increased 15

earnings

earnings, I
portant

increases in wages and coal costs,
have occurred this year. Various

ex¬

be undertaken to deter-

may

relationship between the sub-conscious

typical

caused by too many issues
coming
the market in a short period of
time.
Until the present decline

earnings for certain companies.
item, important

fight could be determined in advance—not only
to 20 cents an hour for
many
did you feel
it, but everybody in the vast audience that was present workers and coal
costs are up 45
also could sense the fact that
to 50 cents per ton. There is no
one fighter had confidence in himself
and the other did not.

view

now

quire more closely into the
qua-*
lity of earnings. By quality of

industry outlook, what is wrong
with the market for
utility stocks?
Primarily, there has been increas¬
ing selectivity plus indigestion

As to the first

had confidence and the other lacked

value

Market Outlook

costs; such
wages, fuel, material costs and

selective from

will not only
place a conservative

ing this period.

increased costs of construction.
/
2. Fear of rate reductions
which,

The very fact that you do know

could

your ability to convince others.
Confidence is in the
sub-conscious, and it can be conveyed to others
without conscious effort IF YOU HAVE IT.
Did you ever watch two

power

Selectivity
We have previously
mentioned
the question of
selectivity. It Is
our feeling the
market will be
.

prised if this happens, if business
conditions remain favorable dur¬

1. Fear of increased

effect upon

ac¬

uncertainty.
There appear to be two factors
which are responsible for the re¬
cent decline in utility market
quotations:

job you must also be able to

your

companies this
sharp increase in
over this five-year

period. We have heard estimates
of increases as high as 40 or
50%
in domestic load over the
next
five years and we will not be sur¬

count for the present

coupled

knowing

operating
mean

earning

in power output
the basis outlined above there

UPON OTHERS.

your

may

im¬

portant decline

statisticians, analyists etc.

In conjunction with

the

many

Inasmuch as, companies
plan to dispose of ap¬
classification pro¬ pear
highly favorable.
bulk of earnings for

domestic

only about 5% less power than in

therefore confuse rather than
enlighten. Students cannot be positive
—salesmen must have convictions. You must
believe before others
will believe you. So when we
say that knowledge Is a forerunner, to
success in the selling
field, it is only because we have found that
knowing what you arc doing HAS A CONTAGIOUS EFFECT

vides

July, tne country as
whole is estimated to have usea

the previous 12 months.
Since there has been

make poor salesmen. Thev know
too much, become involved
and technical in their presentation and

the

By JOHN DUTTON
discussed the importance of acquiring a broad
foundation of knowledge as an adjunct of successful
accomplishment
in the sale of securities.
The criticism has been made, and in our
opinion it is a valid one, that too much technical
knowledge can also
be harmful to a salesman.
Most

1946

The Outlook for the Utilities

Securities Salesman's Corner
Last week

Thursday, August 22,

companies

may

proceed again particularly in

to, be attractive with really good,
issues

selling at 10 to

estimated 1946 earnings.

worried

feel that the pur¬

carefully chosen

sound,

utility equities

should

work

well not only for the very
able income which in

exceeds

not

about the future of the

utilities, and
chase

13 times

out

favor¬

some

cases

5%, but also because of

view of the fact that the earnings

the growth prospects which appear

estimated

the

for

1946

subsidiaries

for

which

many

holding

realize.

better
"

than
.

people

many
^

j/1;

Volume .164
-.** 11

'■" »■

■'•

Number 451,8.

■"" n»

■

■'

;

Tfl^CQMJV?ERCJAI» § FI^ANCIAIr QHRONIQI»Ey

1029.

Napoleon Eagle Sovereign

Switzerlahd,
(official)

;;0:

aaw

certain lux¬
ury articles, securities ahd towards
under totalitarian control.
Here the
illegal ; buying; of
certain
every move of the citizen, every;
consumers
goods
on
the black
letter and / every/ tplegrein//he
markets.
writes; and Receives,, every tele¬
phone call which, he • makes, is ; In the much smaller countries;
subjected' to strictest? censorship, pf Europe, that are- more depen¬
■

the

cipieht;

In; this; way,

balances
that ex¬ eigp. currency:
This is partly because they can
depreciation; oft the
again he-used, for^the illegal, purr
nktion'slcurrency hit dbu$ Adi
kets.

the

individual

7h ppunds allowed lor voyages to
Switzerland to every British sub-

ject..'; He changed his pounds ipt.
Switzerland

quotations, represent the
prices that are paid, for/gold: coins
op the-.hlack markets: in the vari¬
.

seen,

im-

medjately^at/whalsa/tremendous
prerniumv/hfecompaiisomwi^
ciffical iratq im SwitzerXand, golu
coins

all:

traded;

are

the

over

;->:

The

Napoleon

—

the

golden

franc piece—for instance is-worth

re-

glmost/lOQ.%- more?^

a;;traveller

on-

the; black

market' in*.Belgium than- ib is' of-.

who- needs money for living; ex¬

official

the

rate.

block

francs

market, / 120,0U0.
French
were
delivered to.;

which

him when he
he. spent

to Paris*

Herq

5,0QQ French francs foi*

came

black market dinners, etc. For the •;
rest of- 115,000 French francs he >

bought
op,
the
black
market
pounds at the rate of Fr. 700, for-

;
,

the pounds, thus receiving about*/
160 pounds. ,Thia "means that he

chase, of

the. Swiss

zerland without a-single check- or
between banks passing the

.frontiers.

countries

•

for
85- pounds more than he had when
National he left,§,
//■■>■■/;/.-/■!

or -

gold

ury

vqry

are

^all«:c^n^tlties^tQ/'--people who
clearly illegal.- Swiss
prei known 4m her fas; reliable, The
francs, for- instance can be ac¬ result, of- thissemi-gold' standard
quired in France legally only for
wherj^^^ eyerybod^ caih selh and*
importation of- specific goods by
nofc/eVer^hM^- can .buy gold at
special-license. The purchase in
the official rate—is the develop¬
Switzerland! of dollar payments
ment oL a- blaqk?market* for- gold
from Swiss- credits would be il¬
in Switzerlandi-too. This market;
legal from> the standpoint of' the known to the
authorities, exists
United States as long as the frozen
although trading above the offi¬
Swiss accounts are not deblocked.
cial" price's-and-even more- the ex¬
Some transactions in - the/United
portation of gold' is strictly- for¬
States, dollar checks and' transfers
bidden;1) The black market- prices
orqers. -are# however; entirely lefpr. gold;and gold coins seem-to be
; gal also from; the1 American stands
roughly 50 % higher than the price
poinh : Thesia are: concerned' witH
correspbndihg- to the gold stand¬
payments
from
Swiss
accounts ard Of? the
Swiss franc,
thaVhave been licensed for -some
From all this it is obvious that,
reason
or
other by
the United
States Treasury/^but;^^of ?which^-the op the scale* bl values" gpiq* ranks
afc the? official rate of frs. 4.30

hoarding, and aaving,purpO£eA -

| overvaluedbythe gqimreineht//

t..

Frustrated; Inflations

Black.and Orey Foreigpr

Exchange^Markcts

lar;^^blbck^Ihmi; t)h^
and'Tmally the; trulir Weak

the fdollar/ CAt1 thij&i rate; the. Na
tional Bank buys only dollars; re

•

rencies

ceived (in payment for exports and
—In limited amounts—for certain

.The* period after theTjfsh world
*: The
trayellihg1 economist1 needk
tvar was.: featured- by exceedingly
Mother- purposes# for instance.;, sup¬
strpng; inflation^ of ;the^ currency •quite; some time unfit he#fihds;hix
port ofmharities.) All othen dollars
wjth> correspondingly strong 1 inr. way im Ih&Uiazet p^the^yahioUs are called- "finance'—dollars; as
ilatjops. of; prices of- goods, andifor-i. official, semi-official and un-offi^
Tfo the de¬ pistinctk fjxjni :"Comm^rciap' f dolcign ^change;
the beginning, it; cial exchange rates;
larswu They nre/tiadfe and^ quoted
is* t^iek/.theu exchange ^atesferose gree in which, dealing on the re^
freely ^and/tlM quptaltos^reZ as.
spective markets and. the fulfill¬
substantially fast§rithailthP
and;
;ml pricei:;|gy<6at^ld^-^^|e.; ment of transactions; vjolafe the
rtransfer.;;. orders# listed in news¬
the sorcajled, sell-out of, the coun¬ regulations or laws of one or-more
papers/ and/;buUetii^^f// : :a4; c
tries.
But in the. long run the countries or? only certain convene

as'

quantity.-of money,

ip; the hands of "t^ons

bindings some^banks# -took

the public, the- prices of, goods and markets arei chatacteri^dyby col^
qrsr.- which 'range- allr the;w.ay ftorn
s^yicekand.th^prih^ ok gold
fQy^gii ekebange ; moved / bp- in hlUck-pye^greyi to l ; White/, -The?
cgnforimity.; There, were endeav^ description of, the yariousi kjndsiqf/
ahd
the>
ofs to holdr prices; down through •'Wioney/- in- questiph
prices at which-they are traded; in
a
."systenr of. price-ceilings. and exr,
chahgerlate contrplsr but> neither- tpe vanQua cQuntile&o^Eurppe1; is
extj^elyilnt^resHngckibject
the. former nor- the, latter worked
foyx any length Qf timq« The, infla¬ tfiat could be treated?!rltPWewery
qnly within> the framework ofc an
tion rah, its course^ leased# onTthe
' * **'
'
experience gained r* during- and^ extensiye study, •
after, the first! world.war, one was ! i Nevertheless, 'a certain^ uhder^
able during the second world war standings of- the- cohditionS' on. the
to chech. tot a; certaiiirdegree the, black' aricb grey- markets can beif- one " reviews v the
creatipn. Of. superflupus.: piircha^r •gathered
ihgj power, especially
moahs ei 'prices? at which the various forf severe excess,
profit? * - taxation. !qign- exchangefvalues are qupted
Nevertheless, monetary, inflation ip' Switzerland-, - Switzerlindj -'ithas still been strong because the. s^lf,\ although free from' most Cur¬
enormously, increased, bumper of rency- restrictions—for • instance
employed has not; been 3aftd; pei^- Concerning' ' the-' exportation of
haps conl4;n6t;be;^axe
>currency—musJ be cohsidered- too
whirthat; the; purchasing: power as- a country in which thei gov¬
;

would have remained on the for¬

level.

ernment

ihternatipnal

controls;

exchange for imports have to be

purchased^ at/the^offiei^rate^ f rorh
Increasing_j
adhieying;. its-natural;: effect: I the IJifcr \Natipnal:r. Bank* I However#
wherei specifiC^I^ISwiSs;^fOreigit
raisihg pr priced and-wages;;Whaf
trade-

interests

are

not concerned,

flation, but frustrationvof itscob-

The

;

:'v

all; economies became^ divided
two separated areas: one area

into

the

either

did;

bills in

neutral; Switzerland.; '; /

are,

the

strong discount,; the

(

markets.-

•I

arpa

salable,; if at; all,; oniy; at fa
reason

being

Ib is into ' this, second ih'ajr their importsfihfo; the cbunT

that purchasing pp,w.er ov.er~

seems

to be illegal from
-

•

that;

corr.e^

§ As; the black market prices
$Th4 gold- premium is not- only -have sunk somewhat in the meair^
4ime/ the ahbvei transactions- whiier
much/ higher/tharf the premium
in/ compia^^^ithv';thct/dfH(EiMi
f0x< -SwissA f raPC^I^^hiiUalsd: f luctu*- %ti}l/p0^ihle are tio. longer qpltp/
rate1 can be se,en without diffk
Profitable as they were.
ates /from? * ceuntry-/ tm country - in
etilty. //
; (Continued, on, page -1030) / / /
SS1
t0tms?b4:Swi^Irahcs: tdoi ;
^im tho? last;so

discQimt/otr^e; fr®&

That the

market; rate

Official;

ep:i
:Dollar*
Pound
French

Rate' ^
,«4130 .i7i3c*.

.; 3,47--

Stirling
francs-

,1,3^

. 1,45 ..
Belg. Francs
; 4,80 ;/ .5.00
41.50
43.00
Dutch ' F1.--1
110.00.'
Swjedi^h;-IRT;.?/ti' 105.(30;

Portuguese

.Czech,; Kf, 1

162-.00-

17.40V::

13.75

13.00

3.60?
*9.9(V

"Z3.75

3,25?-

-•-!//

The, following, gives, the quotas
tions .-for,:, the; So-called" "internal
payment? "f The;.officihl rates;, are

agaimaddhdii# thmiastreOlunxh^'
Internal

Official

Bayment '

Ratfe

'h4&c /3^Q/:
5.25-.

•

,/.80-

'.England '(/ pound)
• 10.50.
.USA'llfirianciai; dollat)*;'- ^3:40
13.60
Portugal • (lpa Esc.) i/ri
Swedehr (100 ,.krv)__^l j 102.00
Holland tlQO- hfl.)
- 42.00
Argentina (100 pes.)
'■ 84.00
Spains:(100 ptas.-)—-j__ / 14v00

<—

9.90;
1 1.

:/l?;34'w'
C30

17.40-'

102.60"
162.00.:
106.00-

39:50?-

prices,

are

tries

origin arg. either ip,rbid-

M ANlll

* A) H M R S

Meivhers hlew^Yprk Sfock Exchange

apcfl

Other'lead'^g,Exchanges.

paid:f

ANQ| DISTiRiBUTORS OR

;
On the. markets for btinfc notes,
only small denominations—Amer¬
*Thes.e/'quotation?.?, are taken
ican bank notes not oyer, $2p-^are from the weekly bulletin of; the
were, not dealt, freely. Large denominations

whfch includes, the black

buy. dollar bills

not want' or;
able to enforce price regulations—
area

can

atjthe rate of 3.50 thus obtaining:
about $1,600. This means that/he/
ha$ f lived the/ whole month; in/
Switzerland for $400* instead ofi
the $750 ; that are the- counter*
value of the 3,000 francs he really.

called-, euphemisticaliy the lacpQupts

prices were regulated and
other where the governments

where

for which he

arbitrage between white and black, /heAmerican standpoint,the Pr°H%

known/ it*/seems,

well; * known: * Private:

JuliuxBaer

Bank

Co. in Zurich. / /

//lA^iii/aeqofdihg/t 'fhe/buite?tins, of Julius Baer &. Co.

I|s|MESTMRNT: SECURITIES;
BROKERS? OR BQNDS#/S7PCKS,

FrivfiteWires
ftW*********

can traveller Fr, 4^50-for- $1,006. •
fpr, living expenses in Switzerland;;
every c^eudar month. Ife such; a#;
trereWef! stays one monthi and one: >
day he* receives for $2,000* Francs? ^
8,500.
Suppose he spends 3,000
francs—^which is ample for/ one
mopth's stayr—he.keeps 550 francs

The official .exphange? rate is addr

sult

is, legal, although

,spept.
(If; he buys America^
Consequences
money orders, which- are trade<jt
is. not. suffir /freely^ in. Switzerland, at the price
:duj ''tfie.': awkward? tqF abpuf 3J2& although, the; casfe/
that;develop.from:what Ipgvofithe. money orders fqr Swig^c

dealihgf in revery^ sort ot foreign Tar^y^, (1; L
t.q.)VrT/.:.., 1.35.//; 1.30
money is entirely legal; from'; the
Ttris~- clear .'from the abovec that
'
"Frustrated inflations.' are the; Swiss standpoint since^ the < 6nd> Of
idpllar billsr and;financial* dollars
fdature.; of; the; second; worRfv war rtpe war/ During the War dealings iafetfaded ah n disfcouxit:o|« about
and; its posb-warperiod':iii; •alf ifr foreignt bank fnotesQ Were/ for/1-s
/ /
i
countriesrrlh ^ some;
a; jgreater hidden. in, ordei> to prevent /the
; Tor gold/? coins/ the; following
degree tharr the^ others' - !As k rer 'Qermansi f rom- di^>osirtgv of^stolen
sequenceS;,

spectacular

not quite* fair. The National Bank
of Switzerland pays to the Ameri- :

imagination

Isituations
can

:^^ss.maggzine showk htwbat d.e^ .the. community is not the.-worst/
greec these, Things^ arm .publicly cbngeouopoe ofrthe existingrmarf-

quoted; in Zurich -on" Aug> 3, 19.46,

Hpw.eyer; if; inflation

controls tried to prevent the

tiop"is^ possible, which whilei no^ t

was;

wage

| j:

irapeg;^the; official: raten wherer •
as all; following transactions^ back;:
:to; ppwpdg "Were/traded on thq^f
blpck markets, where; the ; Swiss/
franc has a. much higher- value/ ; ;
flpcidentally#;- in? United States/
dollars too, a profitable, trapsac-, -

'
-«-* / ;' t.->
jexciiangm :rate^|lt' ; !npt. possible; i$;even, largqc^
tq; describe |hq; mtil litUde;: of"-nh~Black Market* and the;
;ootma]iti^k^
the,
of the Public
j, ^.rAi- ^
Elsfe
longer one. stays. A; single,.story,
The;- hollowmg bx& the prices; at. may suffice;; The fact, thatt it; hag r i The. profits, black, market, tradwhich- fbfeig^ paper moriey were ;been prublished; in a well; known. ers^ can make at tjie exppnre* o^

payments as- far akfOrOigh-trade'
n^t preypnted;ih;itg'caus^^^ft ;i^rT concerned^ ^ For / where I siick
Pa;ris:;:aoeiffjf0^/^!
payments^ are- hoV affected by in-, Bruxelles/ (100- bfr.)_-^
was!, prevented^in; its, effects.\
very stringent system of.price and .ternatibnal ClearirigS, the foreign- itaiy/aao?. iirq>

mer

cur¬
those of Holland,^ Bel

gium and France.; '

Tips/ wa$:. possible, of course^;
Jbecaqso? thq traveller was ablp- tq5;
cftaji&e, his.; pounds into Swiss^ *
,

blls^ buf onlyArand this in

Switzerland, these trans¬

actions

The

poms/not to- every- bearem of her

Europe,

outside

is- stabilized

time. being.

Bank/ ho wey ex/ sells; gold

Tn- most

franc

the

letter

•

Fr;, 17:34, receiving approxir-,
niately Fr, 1300, From? these hp;;
spent Fr.
;•
ous.countries, calculated im Swiss
things/ With/thq;remairiihg 1200?:
francs.; qt Lthe;. black market-; rates,
Swiss.; fr.apqs .he* bought 'on ' the•■/
for the latter. It cam be

illegally imported lpx^
articles,, and/partly because
foreign currency and bank bal¬
ances are
considered - means of
against; the exchange, regulations, conserving, the value, ofr one's as¬
especially if they do. not: include; sets* For the, domestic currency
has, the most, outspokenly
death penalties- a* la Goering,
in
Francej lpst its; funptipn as a
J The prices that- are paid f or f pre means, of, conserving;
value, re¬
eign exchange or gold on the
black markets reinreserih so to taining only its, functipn as. a
means, for payment. Not so strong¬
speak, the secret- ballot; q£ the
citizens on: the fairness of the gov- ly as dunng> thd^reat ihUatipB^ in
Qermany and Eastern? Europe, hut
€^n^nteijy ^xedie^h^g^ratest nevertheless, quite distinctively,
They show thei# real PPiniomon
dollar, bills! and- gold*; have- re¬ .dollars, received are not taken at-theiop,.then follows thq Swiss
the value of their
currency and to
over- by the Swissi National Bank franc, then the United States dplwhat extent they believe it- is placed- the? internal :wurency- tor
lar^^:an^th£n«Me^^

ernmentai, or,-, pressure
group
Pftwer, the wish-for future/secur/
ity works. stronger than; the fear
of, the penalty; fpr contravention

who

•

pects turther

man

Switzerland with the

■

63.00

40.00

50.00

Jhcially worth in Switzerland.
:
returned; to»Uondbh; after ? having*/
democracies; at peace* where dent on international" trader than penses in? France - can acquire the ! The official " pric^ o£ gold in
francs frohu somebody in 'France
sqent quite a lot of money, for aft;.;,
citizens; rememg/free? and; in? is_ the United S'tates»^;'and..in;'%hi'c)i- who
Switzerland/is.; the: price at* which sorts of; luxuries and travel with
needs Swiss- francs in-Swit¬

dependent- iir his? essential, civil the population isj extremely exrights and where ' his private qhan ge-rate-rconscious,' the excess.
moves; are? only- investigated;un/ purchasing power is not only di¬
d£r special, icdrciupstehces, thp rected? towards . nylpht stockings
laws of supply, and demand con¬ and, cigarette^ luxury articles f of
tinue to. work in, the field oi for¬ which/ the impdW^tionvis nlkwed
eign, exchange, if only in an.im-, only in very small quantities, but
perfect way, on the black mar¬ alsq towards the; acquiring ol ^orf

He met

travelled

The;

thab;^ pays ^•out^fhe/purchased,
the.residence.pf the

;

Bgypc

counterpart Im the far eign; couptry-is hot/ as; hsuahu; bank) but; g,
private individual or a' small firm
amount at

London.

it in

75-.00*

13.70

—-

chase, of. real estate,

spondent of /Time" has heard of

65.00

13.70

50.00

Turkey

/special conditions/
"when a nationals either at; war or

3S.45

nrf«

•*

•

:! 7.50

/ 57.00...

Italy,

(Continued fr.om;
firstpage); / •' ijiows when i+CAl+V-i-n -f Vi^
1/is_j prevented*drod " den, oc their payment jnto, bank
rem' <iioAAiiYif«!^
ir*#ia>£• ••'«%U'i>'•Lw.i.i'Llvi,. i-J..#•*«$«■>/'•;:'/y.,'V
AvVl Qliof iri
«P/n*i V 411
1
ternsdb not' work arall itf/dss'eh*
exhausting/itself> iAfhAfirst/area .accounts concroiied for •; illegal,
:
tial respects.
marxet;
They, are caricar by- priceceiLngsandtbrraiiOn^hg. especially ihterdal; • bla
In
large countries such as the trahsaCtiohs;; The ;s0rbajied; black
^
i^^rp^tic tibn^o
United; States, where; tnp internal or internal • payments, that are
SchacM's system,
*
■'
traded'
replace - the;
ordinary,
This <is not-; to; bp blamed: op. the markets; have such: overwhelming
ipipoitance and ,raea.s/ Q/, Capital checks- on of transfer orders to
men
whor iniroducecj; these" .sys/
flight' are- for yanbUs roa^Qn^. un^ foreign - banks:. 'They; are; sold" in,
terns. It is; caused; through^ gpy^
known
to, the populations;/ the. Switzerland byr small;; firms; that:
: ernjments;
being- able? ,to- prevent;
power
overflowing Specialize in these 'matters-' be¬
the- working; of- the/laws ;qf?.siip^ pur cnasing
cause the hankie, Pff standing do
plyand demand- only;under.very
cfirected towards the legal pur* pot trgde^ in;:
markets, / The
1

/ 3Q.50

62.00

Belgiunft,

;

COMMODITIES;

1030

THE COMMERCIAL & FINANCIAL' CHRONICLE

Thursday,^August 22, 1946

only be reestablished in the world

Exchange Rates Run Wild

currencies

*.■

(Continued from page 1029)

the

ih,:

:gin between white and black ex¬
change rates. The real damage is

country,
of

means'

•

they

serve

to
the
that is smuggled

—

that it undermines more and more in great quantities from Italy to
the respect of the public for the Switzerland—or because they rep¬
^,law. The feeling is created that resent internationally recognized
,

the black market prices
represent
the
true value
of
the
foreign
money and that it is the govern¬
ment which does an
injustice to
its citizens when it forces the ex-

exporters, or—in the case of the
'confiscation of foreign bank bal¬
ances

and

ors

securities—the

deliver

against

invest¬
property

their

values

jewelry and

gold that

the government wishes to use for
its own purposes.

It is clear that a very extensive
anti-smuggling
organization
is
necessary to counteract the high
stimulus to illegal exports. As a
matter of fact the fights between
the custom officials and smugglers

the various frontiers have be¬

compensation in internal
currency that is calculated at the
vlow official rate.

come

| ^ The absence of

ed.

guilt by trading

jkets
t

the feeling
the black

mar-

renders again contraventions

against the law

frequent. In

[fact the contraventions have
rcome

universal

'only-v be

be-

that they

prosecuted

|small percentage of

can

very

cases.

cer¬

tain countries
every waiter is pre¬

pared to change foreign

money at
The entire

the black market rate.

[situation

shows that the power of

some

district regular bat¬

tles, with many dead and; wo
Strangely

length

checked

time

for

any

easy

spite

faxes and easy
money an informa-

ution trip to Europe is
strongly rec¬
ommended.

floating amounts of finance dollars but also the amounts owned

JIWJL O-

MUD

by the National -Ronlr'iwniilri be
Bank would be
absorbed; and if the latter would
suffer

loss

these dollars she

should

charge it to the exporters
allegedly make too high
profits anyhow.

who

which the currencies show

ten¬

dency to strengthen at the official
rates.

Here

including

all

other

currencies,
States dollars

United

quoted unofficially below the
official rates.
Thus an opposite

are

the
land

with

e r

policy

monetary

devaluations.

would
the

become

policy

of Switzer¬

synchronized

the

United

States*

Or the Swiss franc will be
revaluated : in' terms of
dollars.

ular—it will be necessary to continue
to
frustrate thev> inflation

The fight' for, both solutions is
towards gold by rationing the de¬
going on. • The revaluation party "
.

mand

and

fixing

argues that inflation on
side and ever stronger

artificially
supply;

the one
bureau¬
retaining what can be called a cratic regulations on the other
pseudo. gold standard rather than can only be avoided by revalua¬
a true gold standard.
tion.
The opposition, consisting
mostly of exporters and the hosSuppression of the Discount for
I telries, fears that once the United
Dollars in Switzerland
States reaches full production and
As shown above, United States
begins again to compete at lower
dollar bills and "finance" dollars
prices on the world markets, the
low price for the

scarce

The Way

Back

Is there a possibility of return¬
ing to normalcy? We begin by
examining the easier problems
.

sell at

about 3.40 whereas export
dollars and import dollars are sold
at the official or commercial rate
Should we reestablish the gold
standard in Switzerland, Sweden of 4.30.
The first question that arises is
and some other countries?

that confront the strong currency

countries.

high
As has been explained, gold is
black market prices for foreign
wortji on; the black, markets in
exchange do
not
prevent the Switzerland roughly 50%; more
importation of certain valuables than
corresponds to the Swiss
in cases where the price of goods
gold standard. This is caused by
are higher in the country than in
the Swiss National Bank not sell¬
the foreign country even if the
ing gold freely, but only strictly
foreign exchange is calculated at
rationing it at the official price, so
the black market price. This is,
that neither the internal hoarding
for instance, the case with gold
demand nor the hoarding demand
bought at the official and even
in foreign countries is satisfied.

■

can

—

the

enough

Ithe government to regulate
prices at the unofficial rate in Switz¬
/against the laws of supply and erland. It is smuggled in great
demand has its limits. The
to
France
al¬
only quantities
reliable way to regulate
prices is though this transaction is strictly
by controlling the quantity of forbidden by the Swiss as well as
spendable money by a strict finan¬ the French government.
cial and interest rate
(2) In countries that are on the
policy. To
-those who believe that an infla¬ other side
of the fence, i. e., in
tion

lower dollar fnln fhat-.r
rate that not only the

consumption
food

masses—as
IJiMUklVW

f t

devaluations — thorough
deflation being extremely unpop¬

Without

There is no doubt that the pre¬
mium of gold would disappear in
Switzerland if the National Bank
would sell gold freely at the offi¬

cial price. However, for the es¬
tablishment of a true gold stand¬

ard, it would be necessary to al¬
low the free exportation of gold,
in this case,

the premium of gold

in comparison to the Swiss franc
on
the black markets of other
countries
would
disappear,
the
gold being marked down and the

revaluated

Swiss ;

franc

would

have to be devaluated again.

Swiss

authorities

denied

have

The

officially

their intention to

devalu¬

ate.
Whether they maintain this
why one does not treat all dollars stand will depend largely on the
alike, establishing one single price development of the purchasing
for all sorts of dollars at which
power of the dollar that is closely
supply and demand for the entire watched.

offered

and

demand

amounts

would balance,

In all probability
a price would lie in the mid¬
dle of the official and free market

such

rates,
all

say

the

above

at about 3.85. By this
difficulties
mentioned

Observation of the internation¬
al exchange rate markets leads to
the conclusion that the US dollar
is internationally not as strong as
is
generally
assumed
in
the
United States.

There is

doubt

would

immediately disap¬ that the US dollar is basically a
currency of great strength. But
It is said in Switzerland that
any currency can be weakened
the official rate for the dollar has
through a policy that does not
been maintained at the suggestion
take into account that even a very
of Washington authorities who al¬
rich country can grant foreign
legedly fear a loss of prestige if loans
only within. certain limits.
the dollar would be officially de¬
If it surpasses these limits they
valuated. Besides, such a devalu¬
must lead to a higher price level
pear.

ation has meanwhile been effected
in Canada and Sweden without

loss of prestige to the United
States; this suggestion would be

any

erroneous, insofar, as in Europe
the free market rates rather than

within

the

country

and

weakness of the currency in
international money markets!.

the
the
It

therefore that in order to

seems

improve the situation of the dol¬

lar
a
certain
restraint
in
the
Swiss franc improving its price
the official rates are considered as
problem develops.
Among the
granting of foreign loans would
still further.
imagine what huge bu¬ countries in this category today
representing the true strength of not be out of place,
It is, however, important and
reaucratic apparatus is
a
currency.
Therefore it is the
necessary practically only Switzerland re¬
for the working of the artificial mains since Canada and Sweden interesting to examine the conse
free market or finance dollar rate Suppression of the Premium for
___
systems. For not only' have the have drawn the consequences of 4UtliVV.O of such reestablishment which would have to be raised to
Quences
Foreign Exchange on the Black
—-—of a true gold standard even in a
of a
^official prices to be enforced
4.30 for reasons of prestige.
Markets in the Weak Currency
by the strength of their currencies
pll • sort of police
currency
country
like
have revaluated
them
in strong
measures and
There is no doubt that the free
Countries
Switzerland.
against the forces of
According to the market rate for dollars could be
supply and terms of dollars.
The problem of the black mar¬
classical scheme a gold standard
demand. There also has to be an
raised easily in Switzerland if the ket
Regarding frustration of these
prices for foreign exchange is
organization
that
mechanism of the gold standard
protects
the official rates: The offidaT rate that country losing gold experiences
officialrate
°
v - ,
..
identical
with
the problem
of
economy against exchange :•> rates is
higher than the rate at which the
u
improvement of its ex- was allowed to play between the black market prices on markets

Orgies of Bureaucracy

One

can

•

AKJ

that

"wrong" in essential re¬
spects: the official rate of
foreign

money,

being,

France, too

for

low

instance
maintain

in
an

equilibrium in the trade balance
and to prevent it from
becoming
too
passive; the black market
prices on the other hand
being
due to the risk premium
they con¬

tain—too

high; and disturbing

the
<|balance | of tcade ;in the opposite
/direction toward too big activity, j
r
The fabt is that in every Euro¬
pean country huge
organizations
t,

have

been

only

"wrong"
and

created

official

purpose

which the

enforce

exchange

paralyze

their

rates

fluous
>

ffollowing

free

try

currency
give in the

of the respec¬
tive "frustrations" that have
to be
•introduced in various countries:
a

survey

1. In countries with
weak cur¬
rencies, i. e., currencies that have
a
tendency to weakness at the official rates, especially toward
the
,

Swiss franc and the United
States
dollar.
r;
.

Regarding

official

frustration

rates:

-rates of the

the

official

foreign exchange

are

Tower than the rate at
which the
} trade
balance would be in

equi¬

librium, thus giving it a tendency
.of becoming
highly passive, it is
.^necessary.

(a) To
strangle
limited by high

imports no.
foreign exchange

rates

through all

sorts

artifi-

cal practices such

■

as import quo¬
tas, rationing of the fortign exchange for import purposes and so

;

on.

;

(b) To

stimulate
exports
there is not sufficient
citement because
which

to
in¬

foreign exchange

fates are too
low, by all sorts
direct and indirect subsidies.

Regarding frustration
'market

prices:

The

black market rates of
ate
:

very

librium

works

wnniri
would
as

hp
be

in
in

prmi

equi

impediment
impedimen
r1

»,n

tp imports. Switzerland would undoubtedly be more competitive on
markets, especially in the

the

?onT

chase +i,
the dollar lower than 4.30;
for say at the rate of
finance
dollar of about 3.40. As Switzer-

black

high

course

cre¬

strong appeal to illegal

export of all sorts of goods which
the government wishes to

retain

* 1.

change rate—a deflation because

is paid for by

the out"g°ing

bills which are prevented from
TtPOAlinf
*

r^Eced*by^
A

rate5 u^ms

U; rfU

high discount

extremely unlike-

ly that in Switzerland, in spite of

United

States

However,

Switzerland.

and

here

again

the

gold

standard is frustrated. Just as the
National Bank; does not sell gold

general. It is the problem of
controlling the purchasing power
cannot exert itself on the

that

Whereas

probably

the

the prevailing boom, such a defla-

pared to sell

United

One method of dealing with the

States authorities would

tionary policy would be tolerated,
because there too people have be-

be pre¬
much gold against

purchasing

superfluous

Swiss francs

power

reesSiish'

the

ceives 4.30 for his dollar balances

lnstef.<?.o£

foreign markets.7 Jco^e!
ratfonediSTh?s done for instance
taJ56
This
on

raiioneu.
rationed.

in the

xins

case

uunc

of the watch

mstautc

industry

Sionhic

'the

bank

notesdoming

back to the National Bank against

^Ymmed^elyTh'the^cono:
my by bank notesleaving the NationaL
tional Bank

behalf of credits
nenan 01 cieun

granted by her.

In this case, obvi
through the National Bank taking
ously? no deflation could develop
only a limited amount of export
nor would any equilibrium in the
dollars at the official rate of
4.30.
onH
cnnnlv
of
crold
for and* supply of gold
Kn~ be established. Instead, the de«n
n
mand—the quantity of money not
uai that a one-sided
tuai,
unc-siucu boom w the
uuum
of
being reduced—would remain efbeing reduced—wouia rei
watch industry has
developed that fecti°e until
the last gold coin or
is considered by
many as unsound
goid bar has left. the National
and exaggerated.
Bank, thus exhausting its gold reRegarding frustration of unoffi- serves in spite of their gigantic
cial rates: If dollars foe the
pur-, proportions—in the way already
pose of imports were available at
described so masterfully by Pavid
the lower rate of "finance" dolRiccardo.
For it is not an imagilars, imports would of course innary gold hunger that pushes the
crease,
prices for gold upwards—for with
It is, however, strictly forbidden hunger alone ont cannot
buy. It is
to
use
for payment of
imports rather the monetary inflation that
other dollars than those that
the produces
the high
gold prices
National Bank, sells at the
offi- which consequently can only be
cial rate of 4.30.
For the Na- suppressed by monetary defla¬
tions! Bank must get rid of its tion.it If one
wishes, however, to
dollars purchased from the ex- avoid deflation the
gold standard
porter at the too high price of can only be reestablished at a
4.30 at the same high
price of 4.30 price for gold that takes into acto
the
importer.
Nevertheless, count the existing; quantity of

Th^fmdemand
Ji

^J1

?+?•»+

uic

this frustration of the ."finance"
dollar is not quite
comprehensible
and is fought by
many

Switzerland.
an

They
import hungry

"finance"

dollars

mitted

argue

that- in

country

should

crease

such

extent

The

accounts

are

rates, exports from the weak cur¬

reason

inflationary effects of the Swiss
she has to issue against
gold or dollars—she could most
probably convert into gold at the
official USA gold price. However,
if one considers the monetary pol¬
icy of a foreign country as too in¬
flationary
one
m u s t
decide
money

whether

one

wants to follow this

in the 30's, if one

follow the defla¬

does not want to

tionary policy of other countries.
But one cannot eat the cake of
stable

exchange

ity.
land

rates

and

For the time being, Switzer¬
has chosen a middle way—

keeping

the official rate

stable and letting the rate
finance

dollar

decline.

of 4.30
of the

The arti

ficiality of this solution will, how
ever, as time goes on force a de
cision.

Either the National Bank

will have to buy all
For

the

those

official

same

who

sorts of dol¬

have

rate.

invested

USA securities cannot be perma¬

gold standard could at the exist- nently penalized in comparison
ing quantity of purchasing power with the exporters. In this case
!

>;>

the other hand, it

whole but

is clear

then distribution

of the

diminishing the share

masses

would be highly un¬

popular and politically unfeasible.
Another method of suppressing

keep

of internal price stabil

the cake

lars

k !

that while imports on the whole

policy in the interest of the main¬
tenance of stable exchange rates, among the population would be
or
whether one wants
to be¬ changed to the disadavantage of
the masses who would have to pay
come
independent /of this pol¬
the higher prices without being
icy. r In the latter case one has
compensated through higher prof¬
to sever the gold standard ties
its as would the entrepreneurial
and revaluate their own currency
class.
There is no doubt that a
—just as one has to devaluate as
policy increasing imports as a
England did

One of the conclusions reached

•f!

countries would increase.
Imports would of course become
more expensive but due to the in¬
creased
exports
probably
not
scarcer. They could even increase
quantitatively—just as on the in¬
ternal markets the lifting of ceil¬
ing prices makes products more
expensive but also more plentiful
because marginal plants begin to
work again.;
rency

would increase,

by studying monetary conditions
in Switzerland is that a truly free

the

dollar

why the Swiss National Bank is reluctant to accept
gold freely-^-or to buy finance
dollars-ris that she is afraid of the

ad-

imports and they
think that importation would in-

Swiss

finally unfrozen.

also

pay

purchasing power. In other words,
the reestablishment of the gold
standard presupposes a devaluation of the currtncies against gold,

•

regular markets and that over¬
freely, she does not buy it freely. flows to
the Black Markets.

that overflows on the black marthey need to buy
kets for foreign exchange would
conie
accustomed to the wrong the
floating amounts of finnace
extremely lmport^hungfv,
rideathat,only under veasy money dollars, the SwifeS' Natioha'l Bank he;to let the official rates rise to
especially for raw materials and conditions full
employment can be does not buy gold for;this pur¬ the< point where^jsupply £qd de¬
automobiles; imports will have to mainiQinp^
mand is in balance. This was more
be subsidized sooner or later!'
pose,
although
"the
floating
maintained.
r<. ,
..
or
less what happened .in the
amounts are relatively small now
The too high official rate has
weak currency countries after the
the
gold
standard and will only become larger when
first war.
With rising official

experts in

very

o n s

super¬

under

system.

trade

Koianpo
balance

economic

consequences — organ i ? at i
^which would of course be

w*.

are

the

margin/ between

black

and

white exchange rates would be to
deflate the purchasing power un¬
til under the pressure of
flation

the

would recede.

this de¬
prices

market

black

This

the meth¬

was

od followed

by Schacht at the be¬
ginning of the stabilization of the
mark in 1923.

Such

deflation—

which would have to include de¬
flation of wages too

employment

mass

un¬

werk to be avoided—

would hardly be feasible for poli¬
tical reasons,
v.
"

Incidentally,

method

whatever

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

Volume 164

whilew we
have* barely f
to balancevthe budget.. Fur¬ now,
thermore,
everything^ must: be scratched the surface of the: major
done in order to give small and
shortages.
large capitalists the feeling that it
Causes of Shortages
is not only forbidden but also .un¬
Shortages are due in part to
reasonable to export their capital.
Whether, especially in France, "natural" causes: wartime stop¬
under the prevailing internal and page in the production oi durables,
external
political
conditions
a increased wear and tear, depleted
policy of restitution of confidence inventories, defenred"replace^
is possible may be doubted. But ments, and, what have you.
In
what is not doubtful is that with¬ part, they reflect the physical de¬
out such a policy sound conditions struction and economic disruption
in the field of foreign currency suffered by the outer world, Which
compel us to provide
charity,
cannot be regained.,
credit, and exports oh a record
How About Bretton Woods?
scale.
Uneconomic
price-fixing,
It is obvious that nothing ex¬ demagogic labor policies, and bu¬
reaucratic interferences are addit
perienced today in the field of
foreign exchange in Europe fits in tional factors; industrial strife and

w.ould be chosen in order to mar-;
row
the" margin between black
and official
prices, the internal

sary

price and; wage level would al¬
ways have to remain
relatively
low in comparison with the price
of foreign exchange rates. For as
long as there is mistrust in, the
domestic currency, exporters, in¬
vestors and speculators will only
part with the foreign currency
they receive if the exchange rates

take into account this mistrust.;: A

exchange

at
which demand and supply would
balance could thus only be main¬
tained at a relatively low wage
level. In other words, the popula¬
tion would have to work cheaply
in comparison with prices of im¬
port goods because it has to bear the slightest way into the picture
Bretton Woods agree¬
the confidence premium for the that the
price

for

foreign

reduced

productivity "help," too.
But the largest responsibility for

our bottlenecks is on the should¬
foreign exchange with which im¬ ments pre-suppose. In fact, Eur¬
ers of the greatly inflated demand.
ope is not even yet in the soports are paid.
transitory
period where Its inflation is responsible also,
This confidence premium would called
of course increase in case of anti- currency restrictions work. It is indirectly, for many troubles, the
source of which is apparently on
capitalistic
threats by govern¬ in a pretransitory stage where
the supply side. ;
ments or political parties. For it not even currency restrictions are
The demand is unprecedented.
is the tragedy of socialistic exper¬ able to maintain orderly condi¬
iments in an otherwise non-so- tions.
Doubling of the national income
Without reopening the discus¬ and more than quadrupling of the
cialistic
economy
that
they
achieve the contrary of what they sion about Bretton Woods, one nations liquid savings, both in
; aim
thing can be said: Observations of comparison to the best prewar
at., They do no better but
worsen
the
conditions
of
the conditions in Europe show, what yedrs, create bottlenecks right and
critics of Bretto^n Woods have al¬ left. It is not shortage that raised
masses because it is they who ul¬
timately must pay for the fear ways emphasized, namely, that for by some 50% or more the con¬
that socialistic measures arouse in the stabilization of currencies the sumption of alcoholic beverages,
those
who
possess
or
produce underlying political and financial amusements, cigarettes, cosmetics,
wealth.
conditions are of overwhelmingly and vacation pleasures. It is in¬
This shows the only practical necessary, and that technical de- flation that brings about a 95%
and
politically
possible
way Vices and a stabilization fund as occupancy of metropolitan hotels,
which Would lead to the abolish
provided by the Bretton Woods instead of the prewar 62%. The
by excessive
ment of black markets for foreign agreements are of relatively small "shortage" caused
exchange in the weak currency importance. Therefore one cannot demand cannot be met by produc
countries^ It is to restore confi¬ help feeling that in all probability tion: the more we produce, the
dence in the domestic currency, the Bretton Woods fund will not more of the accumulated $250 bil~
.

be essential for the stabilization of

Only in this way the purchasing
power overflowing to the black
markets

can

postwar currencies. There is
good chance that for all prac¬

the

be sterilized without

tion

liquid savings is activated.*

The increasing monetary velocity
stimulates more bank credit ex¬

1031

"Inflation

is winning by default.
-Washington does I some¬
thing effective (along deflationary
lines) to stop inflation, the na¬
tion is headed for the greatest fi¬
nancial explosion," says Prof. F.
A. Fetter, in the "Saturday Eve¬
ning Post" of July 13, 1946.

Officials of Fond

Unless

And World Bank
(Seventeenth of

Bottleneck in Housing
Take the bottleneck in

housing,

TheoreticaUy,

we could start on
prefabrication; but it will lag far
behind the volume of prefabri¬

cated dollars.

already, and

The dollars
are

are

In
;

here

the

circulation, while prefabrica¬
still largely in the blue¬
print stage. The example is most
instructive.
To get prefabricated
dwellings from the assembly lines,
the shortage of timber and labor

financial

chasing

matter of

meets even

table

radiosj shoes, electric irons,
nyloA stockings,1 toy locomotivesj

Washing¬
ton.
Mr. Bol¬
in

ton

clothing, 'and other gad¬
gets,a than the stores can sell.
Then, prices will break and the
depression will be on—so we are
supposed to believe.
that

on.

Suppose, however, there will be
surpluses of this or that kind. So
AH that

production of

means

some

is that the

articles will

cease for a while.
They will be
"short" again, in a matter of weeks
or months.
In the meantime, some

people will go on relief; more will
Any¬
how, the Boom does not depend
on gadgets,
•
be absorbed in other lines.

-Importance of. Capital, Goods
.

The

difference

between

■

Pros¬

Depression is' in the
demand for capital goods. It should
take
years
before
the
output
of furniture, motorized vehicles,
railroad and mining equipment,
perity

and

the
C. L. F. Bolton

of Eng¬

and

de¬

fact, the bogged- votes to the Fund only such time
as his duties at home permit. Con¬

program scarcely
the current increase of

appointment

cerning his

of the Exchange

capacity in our plants. At home,
there are 39% less units than in

been

with

1925,

The

should

big
a

strikes

power,

and

estimated annual demand of 1,200

those

come.

than

the

lesson.

Others

still on, with more to come.

are

The

circle.
could

But such run-away prices
not
last, and a buyers'

strike, if it should

occur,

would

longer, the boom lasts and the correct itself fast.
To
higher wages are, the stronger will
outsmart the inflation of
be labor's bargaining position. We purchasing power,
production
may rely on the unions to take alohe will not do. Nor would bud¬
full advantage of it.

What

perhaps even worse,
productivity is substantially
reduced.- That condition is not sd

labor
bad

and

this side

liberated

it is in Britain

Europe, but it
certainly hurts the volume of out¬
put. The normal working day has
been reduced by five or six hours
a
week; overtime is practically
eliminated; more people get long¬
er
vacations; "voluntary" unem¬
ployment has more adherents than
usual.
In many- industries, the
per-man-hour output has declined
perceptibly, or has not risen in
proportion to the cost of new ma¬
chinery. The result is that while
we have not produced as yet in a
big way anything but farm prod¬
ucts, soft goods, hardware, and
personal services^-very little ; of
the so-called capital goods, even
minor
ones—approximately j 57
million people are gainfully em¬
ployed already, almost the entire

get-balancing

(which is by no
assured) solve the problem.
thorough-going deflation will
be needed. That is' just'not nr the
cards—not yet. In this race be¬

means

tween

demand

principles which Britain has
He is well qualified to
British interests
in the

watch

Fund and, in the

wilh have

technical sphere,

important contribu¬

tion to make."

;

George Lewis French Bolton is
45, married and has three chil¬
dren.
His
banking
experience
started with the Societe Generate
de Paris, whence he went to the
London firm of merchant bank¬

small fraction is likely to be spent
—unless

ers, Helbert Wagg and Co.
There
he specialized in foreign banking,

the discount market and interna-

commodity; trading. ^ In
was. invited- to join

national

Bolton

1932

the Bank of England to

Exchange

and exchange

Bolton

operations.
associated with the

ference of 1933 and actively par¬

ticipated in the Tripartite [Mone¬
tary Agreement.
He helped the
British Treasury prepare the ex¬

change-control arran g e ments
which were promulgated on Sept.

Two years later he be¬
advisor to the Bank of Eng¬

3, 1939.
came

requests for the limited resources.
It should take many years of a

land

questions of foreign ex¬

policy of moderate budget-sur¬ change and exchange-control. In
pluses, if and when such a policy this capacity he .participated in
gets under way, to correct this the negotiations which led to BW.
fundamental maladjustment be¬ Bolton also took part in the nego¬
tween supply and demand, and to tiation of UK monetary agree¬
end
prosperity, to reverse the ments with various other Gov¬
trend toward higher wages, rising ernments, ' the so-called sterling

prices,
lists.

lengthening
•••_-/' •'• ■

and
■

waiting

;/■;

;

•

Mr, Bolton was* on
hand for the opening meetings of

agreements..
the

Money in Circulation
The

Treasury Department in
Washington has issued its cus¬
Effective monetary controltomary monthly statement show¬
by stopping credit expansion and ing the amount of money in cir¬
raising taxes—is the only way to culation after deducting the
bring about a turning of the cycle money held in the U. S. Treasury
at an early date, causing whole¬ and
by Federal Reserve Banks
bankruptcy and large-scale
unemployment. Left to itself, this
boom must last much longer than
any of its predecessors ever did.

was

work of the World Economic Con¬

old.

sale

aid. in the

Equalisation ACcoimt -a^d, in 1934
was placed in charge of all gold

and

supply, the
former is supported constantly by
the creation of new money, and
the velocity acceleration of the

archi¬

structure

exchange

evolved.

people prefer to count
purchasing power. their money in the drawer rather
provisions of the GI Bill than to enjoy the good things it
of Bights alone is supposed to im¬ can
buy.. Even without being disply credit expansion potentialities bursed, the "cash hoards" help;to
up to $60 billions!
Influx of for¬ spread inflation by inducing their
eign funds, if only for debt repa¬ owners to save less: already, in
triation, will pour more oil on ,the first quarter, liquid sayings of
the fire.
u
■' t individuals have fallen to,$2.9
Normally, the boom com^s to a billions, against $8.7 billions in
natural end when prices rise high the same period last year.
enough to exhaust the public's fi¬
Human wants are insatiable. In
nancial patience. The automatism addition to the
pressure of our
of the gold standard used to take own
wants, the productive appa¬

behind us

the

Account he has

of . the principal

one

tects

19%
less
tractive
but only a fraction of the

implements, heavy machin¬
ery, etc., has satisfied the most
urgent pent-up, demand at home
and
abroad, to say nothing of
dwelimgs, commercial and munici¬
pal construction—even if no short¬
ages and interruptions would de¬
lay them. But there is a critical
shortage in copper for a year at
least, and in lumber for five years
or longer. We are limited in steel,
lead, cotton, glass, paper, sugar, care of that. But we are "off" the ratus of this Continent must help
containers, and many other ma¬ much-cursed, old-fashioned gold to satisfy an entire world hungry
terials. Feeding a distressed world standard;
no
automatic breaks for goods, and for things to create
will preclude major farm sur¬ stand any more in the way of a
goods. Moreover, business needs
long boom. If prices should rise for replacement and expansion;
pluses until 1948, if not longer.
Nor is it likely that we shall faster than farm and labor in¬ stimulated
by high prices and
produce in an Uninterrupted fash¬ comes, that would stop the vicious costs, compete with the consumers'
ion.

Fund, the London 'Economist' said:
"Mr. G. L. F. Bolton, an 'advisor'
is quite similar in locomotives, as at the Bank of England, has had
another example. Export require¬ an unrivalled experience of the
ments in locomotives are fantasy theory and practice ot exchange
tic: equal to several years' full control.
From the earliest days
demand created by the continuous
rise of population. The situation

plain wishful
thinking. A glance into a current
mail order catalogue would indi¬
cate that much.
True, there is
enough wool to feed the textile
mills; but they are complaining
of labor shortage. We could pro¬
duce all the electric gadgets; but
there is just not enough copper to
go around. Sewing machines are
in great demand, but the shortage
of
castings, - motors, | ; electrical
components, and lumber for cabi¬
nets hinder their output from ap¬
proaching pre-war standards.
Automobile [ output is running (at
last) the better than half of the
1941 level and is gathering mo¬
mentum;- but when house con¬
struction, which is still far behind
schedule, will attract its full quota
of pig iron, the automobile plants
will have to trim their output.
There may be a surplus of tires,
but not enough cars to put them

what?

the

Bank

staff

•

woolfefi

Most

service

time

The loan

farm

that item, if not in every¬
thing.
By
Christmas
(which
Christmas?) there will be more

consumers

■

not

could

spare such
men
for full-

vide additional

(Continued from first page)
or

corporations, plus the
ability of the credit system to pro¬

Long Prosperity Ahead!
this

power

land

housing

time
basis, since it

time.
a

of draw¬
upon
its

part

provide the con¬
sumers with as much logs as they
used to get (which is a fraction
of what they need), while the
money on hand can be spent in
As

and

talents

ventories, and

down

ad-

meet¬

best

allj

has

Savannan

ing,
ing

far not enough
logs, with 40% of the installed ca¬
pacity of Northwestern Douglasfir mills standing idle. It will take
a long time to open up the forests,
expand production, replenish in¬

■

policy, enunciated at

Bank

but by

trees

We have

Government

its

Fund

tion: is

the

appointing Mr. G. L. F. Bolton
British

rered to

into

overcome.

ts Executive Director of the Fund

nhe

coming smoothly

has to be

;
,

of the Fund

units (for Class I roads alone) will
a
will be replaced pansion, too.
painful deflationary process.
be shipped this year.
Only in this way the mistrust-dis¬ by individual credit arrangements
Wartime Savings
Will the accumulated money be
count of the domestic currency coupled with certain guarantees
What promises
to make this spent? Ifc would take only a par
can be suppressed.
In order to to the creditors on the economic
boom so gigantic in size and dura¬ of
the still dormant savings to
establish confidence in the domes- and fiscal policy to be followed by
tion is the vast hoard of war-time
make the present supply-bottle¬
tic currency it is above all neces¬ the debtor nations., « • •
savings, which bolsters the pur¬ necks seem broad in comparison
well

Series)

British Executive Director

tical purposes it

•

G. L. F. BOLTON

and agents. The
are

figures this time
those of June 30, 1946, and

executive

Fund

directors in

May, 1946, but a few Weeks later
returned to England to partici¬
pate in the negotiations for the
solution of the problem of India's
sterling balances.

Indian Affairs Bill
The

Commissioner

Signed
of

Indian

Affairs may decide minor admin¬
istrative matters regarding Indian

circula¬ affairs under legislation signed by
President Truman on Aug. 9, Asj(including of
s6ciated[Press. Washington advices
course, that held in bank vaults
£ The current theory, embraced
of member banks of the Federal stated, pointing out that previous¬
by both advocates and opponents Reserve
System) was $28,244,997.- ly; the Secretary rbf J the -Interior
of OPA, that, production is a cure
has been obliged to deVote time
112, as against $28,120,083,952 on
or
to passing on;
preventive of inflation, has
manyrsucH minor
May 31, 1946, and $26,746,438,483
been repeatedly exposed bv the
cases.
The press advices reported
on. June
30, 1945. and compares
that
representatives
of
Indian
present writer as a fallacy. Dr. R. with
$5,698,214,612 on
Oct
31.
Warren
(Institute for Advanced 1920. Just before the outbreak of tribes watched., the President as
available labor force. The size of Study, Princeton), comes recently
the first World War, that is, on he affixed his signature to the
that force, and its productivityj to the same conclusion, in "Com¬
June 20, 1914, the total was
$3.* measure
creating ■ an -Indian
mercial and Financial Chronicle,"
set the limits of production.
We

stepping

that

date

are

show that the •: money in

tion

that limit right Jan. 31, 1946,

519.

459,434,174.

P.iM l"'

V-

Claims

Commission.

1032

THE COMMERCIAL & FINANCIAL CHRONICLE

the; backing- if ok -natioiial- • curr An

production of, cdrri *to' "Lathi' America. In this
Other" 'materials ""that "had
comeT'category "of "trade, "values "are" the
main
mainly ;,: trom - Asia, accomplish
tiuctuacing • element.-i Vdlments were not'impressive
enough nme icnanges mora
deliberately,
to add important new items todne with
long Grange 'rather trian wltnr

production.

Hrade

The

Ameriea

would-Seem tha£Jtheir surest road-

dies.

'(Continued from "page 1007).

A retrenchment;or deflation

incident ?to

fhe-subst&htfahfedh^

of .'currency reserves would
introduce some new problems :in
tion

// t/

position " of

'Latin
clear: than that

would be that-paraiiei
lively movement of trade and

success
a

investment

private

list.;

Quartz for: electronics, some seasonal trends. When we
speak^of
essehtiap ^oils; ^ Insecticide'mate^ ''increased Latin American
trade,'*
iriaisP and ^certain- fibers ^ compose such as that which
took'place dur¬
the. •.assortment. - A' few
regions ing 'the two Wars, we

initiative;

places Where redundant -funds! are

actions

of "some Mother parts of the world.
Its present ability to buy is good.

not the rule.

breadth- and * volume ^ to lend Atd-

It";is not harnessed to any particu¬

cerned

-more

„So many debatable

principles and concepts

are

con^

that it is futile to attempt
lar bloc,-but lean- trade wherever liere even a cursory review'of the
it .sees- fit. - Generally-speaking, it possibilities;1 nevertheless, 'the' hesire

is in the ascending phase of popu¬
lation

/ to
maintain ; due forms
of
monetary organization will Surely

growth
and
is
making
progress in industrial diversifica¬

affect ;the

tion and financial

tion

As members

self-sufficiency;

of the

"inter-Amer¬

handling of the situa¬

"downward

trend

re¬

may

again

:ttte

have

-will

■

henefit-fromrthem,as'weli; as indicating that

from

mining activity in alloy
bility do national ^balances of pay-*
-minerals that may survive.
J ; <
•.
Still- another potential ^source ^ Looking > sbmewhat "farther,.'-the
Of trade -support is - the * 'Export- natural- question arises of -what
Import-'Bank of Washington. "At the--settled htiying -power 'of 'the
world
the end of 1945 theJunused credits- outside
will
be. - - Latin
on
its -books in favor of "Latin America in -the aggregate has al¬
America-stood at $340 million.1' 'In ways, depended-on
three main
the 'United
contrast to. the Bretton-* Woods es¬ outlets:
States, tHe
new

/began /tp;cause boneCrn. i ;
ican system" the republics sub¬
-There ? are, however, additional tablishments, the Eximbank'is an Bntish>Empire
scribe to principles of joint striv¬ prospective -sources of support for
•instrumentality of• the U. S. Govp Europe.
The Course -of
ing for peace and the promotion Latin Atnericri^ta
^mnant^tlt is 'deally/ah4 pffi
serves
-

Continental
:

•

affairs

of democracy

nomic

and

while retaining

political equality

the

eco¬

Woods

organizations

already.mentioned and 'the Ex^port-Import *Bahk of Washington.

Present conditions are not sim¬

Nearly. all: of/the Countries Are
members, of the former;« those

relative

size

re¬

"wealth.
;

Bretton

'and

gardless

ply those resulting from the re¬
cent^ war, but have roots in "all
has happened since
1914,

missing .are Argentina, Haiti and
Venezuela., Gol.onibia Js a mem¬

that

When World War I

began.

ber

of 'the

"Monetary. Fund, btit

Detrel-. not of the Bank.

•opments in trade, industry, social
and political forms, and finanfce
have'been^haped by the; shocks
and.-repercussions from the out¬
side "world "incident to two great'

in dhe

utilizing public funds United States from now on is ;a
matter of the-most acute
allotted for/the purpose by Coninterest;
VJ
gress. "'Like its parent, -the "RFC, it not only - to 4ts Own, citizens but
;+A'
A-AlTA
to the peoplej of Latin America
was formed at a ytime when there
was a case for 'the expansion of and other regions, who sfce it as
credit with- public money to get the -largest-single market and the
off"tiie'dead'eehter ^ depression country most capable of dynamic
and. inaction. During -recentyears effect, for'better or worse,-on the5
its
Latin
American
Operations Worlds -economy# - The degree to
loan agency,

UAJ.VVVVU

AVA

Vwu

VVAA

—W

A'A

P-'JE

*■'&?

MVM, VV

IWi Vw

-iii -:'ll

—

which the United States recovers
its social; and economic

have been conducted

The

*«*VWV

mostly on A
total
subscriptions
(or
quotas) of the 17vcountries to the political or "policy" basis allied to
the effort for Hemisphere defense
Monetary Bund come1 -to
,

22, 1946

develop' wartime

Latin America
ye'cu-,' proviueu serines cto not 'in-;
terfere further with the pickup of

Thursday, August

/reallyare

unit

values

wdre

higher.

For example, the
average
exports of Argen- '
-tina * iti i^the - yeaxs1937-39'Was
about 135/2 -million -metfic. tons.
In 1945, It was hot
quite 6 J/2 mil¬
lion tons. - The
average value im
1937-39 was 1,762 million
volume

of the

>pesos.

In 1945/vthe Value was'
2,485 million "pesos.
In the prewar years
just mentioned all prices were

decidedly on the low side, cdnsonarit With the wdrld's UneAsy
situation and the effect > of "the
-

steep -1937-38 recession in the
United -States. Argentina
evidently,
was able to gain considerable ^Ad¬
vances In pride
in : its Wartime:
sales arrangements - With BritAii*
and /the

United "States.

Similar*

improvements 'took /plate in the
siaples furnished "by other Coun¬
tries.

Nevertheless, Wartime buy¬
ing / /contracts
(including those
covering the less essential com¬
modities, Ahtei'edihtd^ by fhe
tomer andPaAUpbliOr;-;
under its obligation to support fhe
Britain • and its empire and re¬ Latin-American
economy) wdre.
lated commonwealths
compose \ a moderate in their price provisions;
loosely
'complementary
group excepting in a few cases where
with a strong tendency to main--5 ineeUtiveA
td^^^plbrAtiOh and hew
equili¬

brium will be reflected in its rela¬
tions with Latin America as a cus¬

r$469%

and solidarity.
It now -appears to
- payable
approximately
25%" in gold and the balance in; an he cast for the -same role on a;
wars and a formidable depression^
:
equivalent amount of their own world-wide stage.,
Summing - up. the -resources so
Latin America's Buying Power
currencies.
Under the-rules -this
reviewed—the present eash hold¬
rtThe short-term prospects aire would enable them to avail thems
ings, supplemented by the pros¬
selves of about $115 million
:dohnecte<i .in
per
everyone's /mipd.
pective* support kOf -the Tnterna- tain settled relations regardless bf production were advisable; they
with the much publicized store of annum; to' irieet 'temporary
or
tiorial Bank, the ..Eximbank and how far their formal ties may were In
keeping ; with- the fprice
•goldi and foreign exchange that seasonal needs for other/current
henceforth be relaxed in favor of controls
imposed domestically And
ties, if each^drew to /the limitPP the Monetary 'Fund—it seems" that
2ias accrued ; to Latin
Amerijcar a"
Latin America's aggregate ^ability 3he ^principles ^ of * multilateral which -Were:
hypbtheti
Applifed /tu the ^tha-^
unlikely ca$£
through heavy war expenditures
trade. ' The United Kingdom, im¬ terials
three .possible except to import and pay for *what [it
shipped by the United
in that area, by the active bel^ With/two
needs, in the proximate future lis pelled "to-restore its- world income States to Latin America under "the
ligerents, particularly the United tionSj-the. Latin; American'nations
A. purvey by from manufacturing, will fexpect system of - sharing equitably Ji inh
are not in a
in
position where they 'quite favorable.
"
States and Britain. .The latest re/i %
if
to Attain j a '-principal place VUs
j a scarce supplies. - - ■/, - /•
■)
ported total as compiled/and pub¬ n!^!;
-more thaii
u„ iiiy.mfinlo mn.e
It is no secret -that some of the
aid '.from the Fund within the heededHb illuminate riiorq cledrly market fbr--I^tin Americani prod¬
lished
by
the i'Department
of
the individual, positions.;
/ AbieriCAh /eodhtrios ;^KAve
Refepi ucts on the basis *0f bargaining
foreseeable -future.
Commerce showed '$4,325,680,000
Withal, ;tpe the ipdiyjidual; positions.
Rete^
missibn
mission of iherFund-/is^^ not to -pro-I Pnce^ iriight *be wmaae .here to an- closely 'With due; regard 'for ,re- been restive under -the limitations
the -Fund-^is not to -prb^
;ias.compared With $1,070,024,000 iat
tide;^meansZi$r.«direGt /trade -ejx- other general- consid^atibrirhdw-; ciprocal advantages and, fromvin- imposed/According tO/theirWiAWs^
i the
^ejtid'of 1941, the, former figiire
ever:
rthe iechnique rof./exchange dicatioris^ -jn: a coileCtive mAnnfer by wartime ^contracts./In --the' chse
'v
applying to;yarious]dates nearor
as
its .resourcesJ though" l£(rge' wodld controls in ifecent Vye'ars has fo-'
:tof^et *ftill value from (ts
at the end of 1945. Included liil
cused atteritionaupon-the "PAlanc- position, -If Britain forges Ahead double/in. price under "the pAn-:
be" quite inadequate-^-but to
the "reported" total is the
pr'ol
equiya-:
'iiig'of."trade accouiitsnand PypUtv in-its-postwar program it; sh'OUld "American agreement for quota :de^
mpte-afwUridtvidC
lent of Sterling in an
unspecified
ting a moral premium" on -permits become a more important outlet liveries, Womplaints//hAve /been
/ amount,- but which/in -the xAsefof pique Tree;fi^m;"thC Urtifiees^aiS^
*;haff ;r;uhdoubtedly *" promoted' [ ST than if^5s"^een"Tor' one "orTfwo made that" costs of production
Argentina, Was .more than • £ 110,r tmctibns, •di^rimfnation^
highor"deg*ree^oftdfetyin"ithe/ek- decades ; *ori the Mother hand, its Were stifling the industry. It has
t)00,000 at the. end of 1945. These preSsive controls that have - graced
need to convert its export product not'been
tension of individual tredits. " \
the international financial
posible to learn precisely
picture
jcash resources are so large, apd
rittie' OUtlo6k Tor ^Ekports ffrOih from Ordinary -factory goods -to What ^the facts 4re; Amdoubtedly ?

million,

•

homing

•

tofc;^e/pa^
come

/the financial systems of the couim

operation '■"I ;vXathr:j
'WeiiaVe ^eeh^iiiat"
istiraUlus' toJ trade jin
thestoekjof
all areas andptobably a deterrent gdld'andToreign exchalige now on
which'to 'compare them.
hand is subject to "otn^r heeds
The trade significance of 'the Inrgerieral to. gp vernmehtal interi.
thah rth& simple hiie .of payiiig for;
vention ;in
"business;;: Lii tfact, .the
/ funds, to be sure, "is subject [to:
growth of
several; modifying factors.
The
AJ hCailthy volume jpf. 'general imports". The , care that
tries

different than in past his-

those of

a higher/ range in kind -coffee .gFQwiiig has become more
expensive and has.suffered incon¬
price may limfehe
direct.' interchange
with -some veniences like all wartime -eco¬

its "successful

Would be.

iuryy' that there is nothing /with

■

.and

markets.

nomic efforts. The /chief *elemfent
As to -Europe, 'ike! disappearahCe- has been general inflation,
it|elf
of /GerinanyAnd^tb A /lesseri'Ux^ largely
induced

has

all-important factor in the whdle Xaise a question; since Germany
higher cost of imports—perhaps-to Seem ""essential to its success;
;""
'situation will'be an ability to con¬ is generally regarded as having a
the, exterit, of about *40%' as
As-'i to
*optinue the exportation of national prominent place in Latin Amertpbsed 'to prewar. Governments Various " Latin ^Am^rican - natidns
products "so 'that the quick assets icahy[ftra'de:V;in"-fac^^^^^
also will use a part for their
gold that have'; development. proj ects
Will not t>e reduced to an Alarm¬ share of Germany; arid 'Italy : to¬
subscriptions
to
the
BrettOn will no doubt resort to it for such
Woods organizations (the Morie- credit in foreign funds as may be ing degree.' This is • the direct gether in Latin America's exports
in years just before the war was
:; ftary{-Fund /and
the; International required 'f6; cpv^r :lhe mecessary Equation for trAde support." ' f '
At Sfirst ;glAnce,; and 'for the scarcely 12% in terms of value;
"Bank for Reconstruction and E)e-i imported materials. '-The
type -of
of this, Italy's part was negligible.
reasonably near future,' it is im¬
•velopment) and for the unusual development -most
suitable for
possible- to be pessimistic; about Germany had managed to regain
expenses which they are incurring financing ,-.through -an
.interna^
some ." of
its trade between .the
this question of exports.
as participants
World
in other interna- tional institution, aside from some
wars, but during the thirties, gov¬
'k dioiial
movements.
It
is
w'ell few that might be self-liquidating scarcities Are so /obvloUs and "the
erned asrit Was
strategicvand
Renown,: too, that: exchange : and through the. production of hard- products pf Latifi America are [so
basic to human ne~eds a"nd to fun¬ political home policy, its Latin
other controls are used to dis¬ money values - ( whether
export¬
damental husbandry arid industry American business tpbk qn An uin-^
criminate in favor of productive able or replacing
imports), would
that it is only a matter of dis¬ healthy character with the apor 5 other
certain
essential goods • and j to be
integrated -programs
tinguishing among those that are /parent" motive that of, so far as
-govern the import trade in other :contributing.vin a - broadway ito
in more demand than others,
possible, getting something;; for
•
life
ways.
So great has been the de¬ national
through, the >im1
Specifically, the ; outlook ; for nothing and dealing in 'promises
preciation of scarce mechanical proyement. i ofPommunicatkms, theinL
rather than pefformarfce. /There¬
sanitation and other
may be 'estimated "rouglily
equipment in some .places that
public serv¬
•as follows:'
•
fore, Its practical elimination. d.oes
there is a question whether the ices, and -facilities.
,•• I
Much -has been
done
reserve funds >available are more
_?hbse Which^^^riibjiild in Adequate not seem bf great consequence
by domestic effort, * espethan will be needed for
cially in the larger cities, during -supply, regardless, of temporary provided there may be reasonable
replace
The
ments, especially in view of price the past decades when foreign dn- delay paused* by "reconversion,? buying xpower elsewhere.
increases. •- Authoritative ; state¬ settlement and- exchange restric- renewal of shipping routes, etc.: 'goods which Germany had 'taken
irv>sdme; kmoUrit aittbuht included
ments have been made in Mexico tions .-tended to :
keep ^investment Coffee, sugar, barianas, cotton,'to¬
•cacao;:?cbffCei, 'f^cpppex/vcornr-CbtJ
that the war windfall would 'be funds at home -and
bacco, wool.
encouraged
ton, hides, -frdzen beef, flaxseed,
dedicated to building up the..in- some capital, migration from-out- x ALhose in which
scarcity 'may tobacCo, Wodl, etc.- tlapan bought
dustrial and productive, power of side.
But in many places there is continue for some time:,
Hidfes,
chiefly cbtton from
Peru and
1 that country. Argentina has used opportunity
forcooperation u by flaxseed, other oilseeds and nuts,
Brazil and minerals from the West
:> some of its London funds to resuch an institution as-the. Inter¬ lead, /
tin, zinc, high-grade iron
Coast.
Germany and Japan to¬
i duce -its
foreign debt >in - Sterling national. Bank, able to .set .up a ore.
; |
gether! took a large 'share of fthe,
to the point-where but
£10,200,- long-term line of credit, and to
-Thosp whose Situation-may de¬ immediate
prewar production 'of
©00 remained -outstanding-at the provide impartial technical
advice pend on factors that will
develop Brazilian cotton.
/end of- 1945 as compared with in both engineering -and finance.later, "eOnriected With technology
"Western
E u rope,
including
over £40,000,000 before the
war; v As we have learned from
expe¬ and, with economicrahch natural' Scandinavia,
/ promises
to regain,
it also seems to have plans for rience, with the conditions:
United-Nations,
copper,
petroleum, its position as a taker of raw ma¬
buying out British railroads and the
operation
of
international cacao; drying' Oils,"-minor indus¬ terials
barring mishaps. - Its - in¬
other property in Argentina
j if agencies is likely to raise prob¬ trial minerals, nitrate of ~s6da, dustrious '•
populations, f fortified
deals can be made.
(More lately,. lems more serious -than .were -en¬ grains arid meats.
"
3 ";: \ » with dollar credits and with Brit¬
-Argentina- has - announced -its in¬ visioned- when these were created
: The
foregoing are the Conven¬ ish : economic support, should riot
tention to retire its dollar and
undez; apparent
agreement
on tional and
long-established' staples be long in overcoming the war
Swiss franc bonds as well.) \.
ultimate pirns. > It willj
-therefore^ Of-Latin America, to which might setbacks, * '
*
j-.-v-**
Still.another pertinent question be
interesting -to- observe - -the be added for compieteness about ;" Aside- from"'the quantitative de¬
is raised by the fact that the gold process of
O*v W-"v«A_ vtxivl iilu VUL itj /Oi
growth and matupity of 75 or 60 subordinate materials !or
Iiiuiivt,
mand, the'-price trend 'for primary
and exchange reserves
constitute} both the Fund and the Bank* It sub-^jfodUGts:; rDASpite• dffbrts ito' materials* will be a .matter: of coh-?-

tl^3^ntirinatipnM

•

•'

■

expanded
products

tent, Italy from among the impor¬
tant consuming nations appears to

Been

taken to conserve the
immediate assets-indicates that

obvious is Ihe allowance that private interchange and invest¬
ment 4mong World markets woUld
must •-he / made for the present
most

money returns from the
Producers
of
coffee,

together
wit)*:"those of 4 other /commodities
in / a; someWhat /similar position^
-have ^lodlrad/forWArd /totheAq-,
opening of*Hvorld Markets in^the
belief

hope that the latter would
fulcrum 4o 'price -rises

serve 'as a-

liko -thdse-rememberodfrom rafter
the other war>
twenties.
'

arid • ih -the middle

World markets, however,
seem

likely to

run aWay

do laot
regard¬

less of tided rand demand; The HriU;
fluence of the two great /cdri—
sumers,
the United States And
Britain, and the necessity of dther

'buyers "to conserve
thdir resources, seem :to 'indicate
A check on 'extravagant -incre¬
substantial

ments .-The developments-may

obscured

by the unsettlement- of
exchanges, ;or vagaries of .quota-,
tions in monetary units while -the
latter
As

in "sow e confusion. the "terms -of trade"/,

a re,

for

however-^the

relative; prices* of /
primary materials and manufac¬
goods ~ it would appear
that'the former should 'hold their
own /and ^perhaps improve their
position /if a large part of Ahe
world settles down to peaceful oc-v
eupations. '
;
•,
■ ;
:
This is said because,-during %e
decade of the thirties, world Af¬
fairs were not in. a flourishing1^
tured

condition/The LJhited States

through

going

slackness

-»a

industry and

prise.
wero

The
in

was-

/long-contintiedi

industries

enter¬

of*'Britain*

languishing conditions

In Germany and in Europe

gen¬

the -people ...were, -going?
without many things whiclrthey7
erally

would have liked, to have.

Popu^

.•

,vv

Iiiu

t^iiaio

!UI

WAV

—'r

lations Are larger now than in the*
lastv dimly- remembered

prosperity/ There.

seems

times] oft.
to be &

^Volume 164

Number 4518

VTHE COMMERCIAL & FINANCIAL CHRONICLE

potential for alarger EOhSUftiption
wian -ever

t»ef6re,' if well directed

Efforts -cap bring! It 'about;

anfj
and

urith
with

tho

the

ovnlnpinn

exclusion

^aw

for

r\-f

fnvrtar1

forced

r*+i-f i

r»l o

artificial

firmfiitiftnc

conditions

1033

NationaLpride^esirh
il

Ml,

—

for modi cal.

A„»An(iAinl

cluded 4f it promises to fit into ishedJ the -buying -power available
national development and • assim¬ from ^natural i industries acceler¬
ilate with the national economic ated -the process. A /good many
life, A great deal depends on the small -but -effective- - - enterprises

neled ./through the
currency sys¬
tem land distributed
among the

background of the were started in the later- years* by
cohcern and the impression which refugees from. Europe who had
its'plans make on the authorities. the necessary:, capital ^and tech¬
Statism, as above defined, is nical knowledge. Nearly all of the

public in the form of cash

character

bank

^^osits-^a^gely-unexpendable

iEtahbjmiaLway^

very

pressure- upon

prevalent in Latin America

•^more

local

realize

^St^^lies'':-ivas Eucfcas

to- defeat
control' even' where

than

unless

tries

will

ways,; Ettd

only

money supplies-Elorie

have raised:^spending

went

and

through

-thin times.

The

.respond

different

will; be -affected -not
the major, factors «to:;;

which this article, has alluded but

by bthers to Wkichcapace has not
been 'given. "Some' may be men¬
tioned as;'the trends of population

growth as influenced by improve¬
ments in social standards, hygiene
and

medicine; basic scientific im¬

provements in agricultural indus¬

tries; the formation of capital and
the j broadening -of
investment;
the

of /education

progress

technical

and

training;, possible immi¬

this1 -there Will be another gration from/Europe; and others
phase during which social, politi¬ of local applicability.
In

—

In Praise of Lord

—

Keynes

(Continued from page 1006)
"the / intelligent , ian" 'called him the greatest. eco¬
editors
countries have shown an increase paper
nomic teacher of his time; and
in the output of factories and, es¬ and partially/ihfoihited;" The edi
pecially in the larger nations, what tor of the London "Statesman and both statements are certainly true.
amounts to-a revolutionary in¬ Nation,"
ideas
reached
-further ' in
writing
about
Lord His
crease in the part of the national Keynes after his death said:
American minds' than -did those of
•

would

ernment

development

corpora¬

-'An,, optimist

-by- nature

how¬

ever,
he always believed • that
somehow or other capitalists would
cease to

■

American ecom
Seymour E. Har¬
a compila¬

any contemporary

omist.
ris of

Professor
Harvard

edited

behave, as, In fact "they tion of .the views of 23 economists
He called, one of his prominent in the United States

did behave;

books 'Essays -in! Persuasion,' ahd

and
Canada,
entitled /"Postwar
large {palt pf-his -life Economic Problems." On page 5
^
expounding his yiews ih language he wrote;;' Which {would-be bnderstood riPl
"Most/ of the- participants*—
only'by Hhe expert hut 'by That though not all—have{been'influ¬
inteiligent and partially informed enced by the writings of Lord
'opinion iti which he believed lay Keynes;
.v Keynesian influence
'our hopes vf Saltrdtion"''(Italics will
especially be'evident in parts
of the volume devoted to 'the dis¬
mine.)

he-spent

-a

prices,2 but the situation was fur¬ roots of ""official supervisitm over tions have been formed and ^manyther-complicated by "shortage of economic life, -however,. go bapM technical studies made; the -inMoods and the difficulty of keep¬ several -centuries to the" customs crease of the power supply is an
ing ; local istoeks, > especially ■ of arid restrictive regulations pf 'the important objective ^kept, how¬
colonial fegime. In spite Of the ever, in official hands, ds "public
foodstuffs,.,/ from^ fnigratiiig
-to
rither- markets' where demand was pronounced individhalism of the services owned by {foreigners Ere
even /greater,* br"f
'At- his house- in "London, in 1936,
rcan^speculative Latin American in matters of p^f- in {disfavor); -Cven projects like
hahdling. Since »th;e people were sohal action, he still tends to con- TVA have been considered, and I {asked 'him why hCdidn't wr|te
fOrrti' tb;theJdeepEeated{traditibh hhe/regional' development^ is;; iht- a
more fully employed
than-usual,
small, easilyReadableEditioniOf
Even normal stocks would have ;suripi^ib^itbe{" 4<p^trbn'^ ; ;(the der' way in Peru. It has
his "General Theory" which might
boss, the head of the property or ticipated that considerable prog-' serve" to Convert those persons
fallen short.
business)
and the
exercise
of ress would he/made^when instaiHTheEeveritjr 6f -the Ensuing 'in
ld£h,?{in>Eb}&oia^|{^dS
stationEndEts wardships;/6h -the paternalism by those in authority.: fatibfts End eqdipmeht wErbhtcire mental authority but low in eeopoorer elasses: have varied widely -The prevalence of personal poli¬ .readily obtainable 'frahrfabroad*
hdmic"" literacy.
He beplied {that
lie. expected.fo do so, but "that, if
in?degree, so that in this respect tical rule during much of' the his- {{/The/
especially hatdltpspresept a tory of {independence, has had ich ls not wejl/adapted to menu-/ Was necessary first to convert his
^dihe ;ihiltience. Thus the assump-: faetiirihg {by modern standards academic brethren.
/ipictare -'that
It
country,
A
Peruvian • observer .tion of care by the state over because .ohly In a few regions Erer
is
interesting to speculate
wote atdhe end.Ef 1943".thai "the material-affairs has• never arousfed the_pQf>ulatidns sufficiently 'dCrise upon the extent to which /Ameri-r
to provide :a rbroad market, and:
much, opposition.
igreater part tof the population is
can financial opinion accepted his;
./Control byjhe state is' exercised ftiieiEhd rbasic "materials ;are hot
/potireally (prosperous Un/spite of
proposals for alleviating the gr^at
in numerous ways, not all >of •g'ghdratlyipreaenri
/high ^returns! ifrom lprpductioh,
slump of the thirties.
The -banks
-since there is no supply of goods Wbicltar^^bprid ib every countjy,; Factory industry, in the less faeventually .did take the - interest
ht reasonable prices to give them As 'examples,, jt is evidenced by vored places, has usually prospayments -off- savings deposits; the,
legiriation^enabling; the ^discrng ^gdSbehind: a highiy^^feriiye- Federal
pweU/being.^Th&^^
Reserve: $ystem eased
which
permitted
pricing credit and did all
* * • tionary -fixing and adjustment Jof tariff
moderate view.
it; could to stim¬
E5nbugh:has beenSaid to indicate tariff {rates y/tha .pdwer yesteii in slightly under imported -costs; {the ulate industry. In an open letter
That the • inflation /problem is a the executive oyer the inward and "small "{number of ?produeers{ Chas to
-President Roosevelt dated Dec;
outward moyement pf foodstuffs precluded the type k>f competition,
; Menacing ;^bne; ?^tte/^gaps - ahfibng:
30,r 1933,; Kgynes. adyocated a cam¬
-social: classes, especially ;that 'be¬ and. essential materials; power I to which regulates the market in~a&-»
paign of
'

full employment and
policies."
•/* / i
Few people realize how Keynes*
influence has continued to glow
With the passage of time. His last

cussion- of
fiscal

wbfdSrihJtheEGehefal Theory pf
Employmerit'—his greatest book-^
(page 383) were not only true, but
prophetic:
"But apart from this -contem¬
porary mood, the {ideas of econ¬
omists. and political philosophers,
both when
they are right End
when they are wrong,:;are more
powerful than is commonly under¬
stood. :Indeed the

world is ruled

by litle else. (Italics mine.)

Prac¬

tical men, who believe themselves
to

be quite exempt

tellectual

from any {in¬
influences, are usually

the slaves of some defunct econ¬

omist.

Madmen'in authority,/who

hear voices in

the-air, are distill¬

•

tween

the

poorest -elements

governmental/ expendi¬ ing their frenzy from some aca¬
protect the local producer against vanced industrial countries. This
tures especially designed to ac¬ demic scribbler - of a Tew years
foreign;competition; the, power to accounts for the high rate 'of celerate
' capital goods purchases; back."
grant tax exemption or other aids profit ^usually realized.
The re¬ at'the end of the first five months
Here is the thought at the /end
to-new industries; the moral and sults of some studies have shown
of 1934,/factory payrolls began)
to{ Of "The Economic Consequences
financial {participationEf the gpv-/ that costs of production in Isome
show an increase.
He urged: the
of the Peace"/ (pages 297-8); as
ernment in -arrangements for'the lines are higher than in the rihifed
devaluation 61 the currency; after
living and vivid today as it was
"defense," * of .native industries; States—that productivity is lower
Roosevelt devalued the dollar, it
when written In 1919:
participation in "institutes", com¬ in spite of the difference in wages
happened that a marked expan¬
missions
or
.other .bodies that
"The events of the coming year
sion of industry developed in 1936.
regulate the production and prices,,
One of the motives for promot¬
will not be shaped by the delib¬
Keynes Urged, the .reduction (of
of
imnorfant - commodities, ing
industrialization
in
Latin
erate acts of statesmen, but by. the
iongtterm {ihtefest lrates ;Ehd
whether for export or local conr America is that of
hidden currents, flowing Continu¬
saving ibe forthat /December ; 1933; lmter sug¬
sumption;/ the creation of boards eign exchange needed for imports
gested a rate of 2J/2% on lorig- ally beneath the surface of politi¬
or corporations that afford credit
of similar products. The problem
cal history, of which no one ..can
term government • bonds; it is (no
and marketing facilities for pro¬ is
not simple, however. Local in¬
predict the outcome. ,In one way
/doubt)
a /coincidence,
duction deemed helpful to pro¬
but Our
dustry does - not produce {foreign
only can we influence these hid¬
gress .and
employment; control exchange except in {the Wery dew present rate • is 2 V2 %.
den currents, by -setting in mdtioit
"Barron's." in its issue Of Jan.
over- wages;
control of central cases where -some of the product
those forces of instruction and im¬
15, 1934, stated 2 in "The • London
banking and. the regulation : of can be exported. The more effec¬
agination which change opinion.
private banking.,, and ^-of. exchange tive the industry, the more ex¬ Letter column:
The assertion of truth, the unveil¬
"Contrary to the generally-held
commissions/
•
v
pensive are the original installaing of illusion, the dissipation of
View in

and

ihbse Which have/ profited fthe
/most, have become/vefy wide. Jin
^iherpldcesjihabdity tO'buy suffiEiefitfood ^has^been"si>reality ? On
^Khte other Eands the Eemand* for
aoeal ; estate and
other physical
property cas; ah outlet for swollen
funds has elevated values .to a

" J

These features of Latin i Amer¬
ica's internal: position have com¬
mon

foots and

support in politico-

social policies. Nationalism is de¬

•

stage. It is believed
by -conservative, observers that
some
severe
local reactions dre

fikfely to take'place.

/-■■■.;••

.......

speculative

fined

"revulsion

ffom

eeo-

-nomic" dependence oon *ther outside

^orld, a aesire" tO:-hvbid The; efI sfeCtsEf s ihtdrnatibhaildep
•and 'imperialist' exploitation" '•*—
With all these controls, it does
ibis As U proVocativte rrioga'nEow
rmtappbarthatipriyatc. capitalism
mSed 'almost ^exclusively < by paid is .{threatened. '.Even where -gov^
■'*''stfr iprbfessiohal5 agitatorisr Egairist erpment has -assumed a position,

the'United States and Britain—and

•the"wish:to retain for the"coun-

tfy*s inhabit'ants the profitable" use
rif its 'Tfesources; rStatism" is bffi-

tLOndOh, /he (Keynes) Is
hate, the enlargement and instruc¬
;
requires
imported materials
of Optimistic that {President' Roose¬ tion of men's hearts and
minds,
Waried^Einds, For, this {reasoh,{1her velt -will win through and praises
must' be the means."
seareh • in Argentina / has been for; him Tor his; C0Urage; in experiIf this is true—that the only
amounting to {dictation over for¬ processes, that cOuld use native meiitirig,Though he deprecates the
eign trade,and. the conduct of im¬ products. Until the market broad¬ apparent confusion between Re¬ way we can influence these hid¬
den currents is by setting-in mo¬
portant - industries, as. in -Chile, ens sufficiently "to :cause-comBeti- covery ahd Reform."
Keynes repeatedly " complained tion:: those forces which {Change
private capital is .cooperative. -The -tion. in. efficiency and price, the
that
present .stage is not that of 'a/cor¬
?Rbosevelt.-:oiiidid.^ith{{hi's: left opinion—and if it is also true that
tbnsumipg {public {gaihs' little' If
porate state. In, Argentina^ the apt any thing ^ as ■/compared {yrith what hand what he : had accomplished Our "hopes of salvation depend on
•term "directed economy" is used. foreign merchandise would Cost. with his right—the NRA being En the intelligent and partially in¬
-It seems to describe accurately The attraction of country workers example of reform which probably formed (Who are willing to -pay
the .objective of ^present, trends.. / to/the cities draws labor; aWay •impeded recovery. The New Deal taxes), then we must continue to
Tn mentioning industrialization from farms and .plantations, | as program was not a Keynesian pro¬ bring to the bankers and indus¬
trialists
the
expert opinion- of
as- a partner to nationalism and
has been discovered jn Colombia/ gram -as so many /believe: it was a'
rions,{~ahd Elmost EyC^^dustrjf

:-H'iM/;:bile^vfeirfioh;^[orwfsharittg^ by
government,- in the "Control of- in-;
"dus'try and "business. Industrial¬
ization — meaning that which is

'^promoted Under EtateMiraction as
the: trend "hrsome ^countries

•

-hives play to the appealing theor¬
ies of"self-sufficiency, "diversifica- statism, we refer only to the new
Tion; and improved earning power, .industrialization,, promoted by the
.'for'iiiaividualivofkers.
'
state or with {state participation^
•

/.-l^tionalism-'ihA'practice'^fs con¬
cerned " with' the

•reservation

Tights "in!natural resources,: par*

ticulariy. Those EfEhe subsoil, t to'

which -

^practiced orcontem¬
/several ;countries.- This"

unsettlement subsides. As respects
Latin America, individual Coun¬

ing

and

most
persons
they have been
brought in touch with it.
*4^orts * at !
The present system of controls
^serioiMy-attempted.
■
;
/
-:In some countries the inflation- •generally started With the defen¬ income so derived.
At /present
several countries
iary;: Volume Wasfurther enhanced sive. measures taken ias the world
by the.«eff ect• of Government depression deepened in the eariy: hayeprograms for increasingihCir
•deficits .that jincreased'theineans thirties, when world prices -for industrial -equipment by direct
offpaymentdn*oirculation/through raw materials declined Eteeplyy government \aid • or 'participation,
:;{£hfe iusenofbanlo'crediC"The-in- the returns from trade diminished and /invite
foreign
cooperation
•and. evbn local
noftoed
manufacturing with, capital and technology. Gov¬

^flucts, -the

adjustments

gradually be made in many
areas {and
markets. Probably a
number of years will pass before

lias-been described many times as
•originating in the large sums reEeived/fbr exports Endaswar ex-,
/peimituresOf other Einds, chan¬

financial

will

4/'. ,v;:.{{t%i::Oighers,: ;so ;ffar- as is : expedient,, sinCe'1914.
| vantages, and{ a /Striving; for selfirom
1 o c a 1 > employment, • pro-,
The normal or older industries
S"-v
-Internal^Conditions'*
sufficiency \ in {a Changing wo a1 d,
of Latin America are those typi¬ have had much to do with the
{l ^Equally) ihterestift^
prietorship, or prOtessionai activ¬
ternai conditions
-prevailing gen- ity. It supplies-much of the phil- fied-by the meat. packing plants current vogue Tor /industrializa¬
tion.
//erMlyTm Latih AmerieaVTne key osophyoh WlhchEtatism is based^ m {/^ehtinaii/thdEugariniids^
-This bricf review has attempted!
;WOrttsTo> the • situation' are infla¬ The rdoctrlrie is especially strorig Cuba,. Peru and r other ; countries,
tion, ^nationalism,Etatisih, -and •in¬ in Latin America because it is the /textile, industries /of. Brazil to -show the path along which
easily related .an the minds ;of 'the and Mexico, which had a; well es¬ Latin America is traveling in un¬
dustrialization.
: These
1914, certain and rather /difficult times.
phehotrieha are- the na- masses: to the concept of patriot¬ tablished - position before
tural ^results of Influences from ism.
and; in {general the establishments It -is evident that the trade period
The-rules of nationalism, evbn
/the -outside -world since
providing manufactured/ floods; through which: - we Eire passing,■* a:
-1914,J or
in
countries dike
Mexico
arid {beverages, fobacco;-:Eh6 thrj-ng ^ year after'the end mf warfare, is
The ^Succession
/OfEwarsf booms/
Bra&il Where suCh principles have^ shbes/Q, building
depressiOhs arid "social brideologimaterials / and ohly! that Of The i hmhediate;
<cal-innovations whicn they have been v cOhstitutiorially confirmed, many other articles of common bound -from war conditions, char¬
are carried out with moderation
use that grew up where business
Engendered.
acterized; by the { movement - of
i
Currency inflation, manifested and with due thought for the best men saw opportunities according such -goods - as can be- procured
interests.! df '{the - Coutnry. Excep¬ to local" demand. The effect of without much discrimination as to
steeply^ higherf cost5 of"living;
JfcasEeen; common Ho" all countries tions End relaxation are hot tiiri fnodern wofs with -their interrup¬ kind, quality or price; the filling
in greater or less •
tion of-outside supplies and- of -the -Of -delayed orders;. 'the effort" to
degree/whether bbiiimOh. A productive and useful
•Spontaneously or by -reflection. It enterprise is not likely to be ex¬ 19304,40 -depression which -dimin¬ catch the strong market. Follow¬
\

and

ernization with its superficial ad¬

Argentina there has been dis¬

cussion; about whether it is advis¬

Rooseveltpolitician's ^p)^

which

gram.^

•

able ' to "make guods

that could !be{

brought from abroad more cheap¬

"Life"

ture :of

WoOds

'magazine, under a pic¬
Keynes Et Bretton

Lord

^ciaiFfed'Wm/thieprcat

plated an
ly,-thus depriving "foreign buyers1
Since -:Adam
a. subject of which' much has
Of Argentina's grain and 'meat of economic ? thinker
-their {compensating' market. ;){
{/|Smith. ^ThO-^ahchester Gtiard-

they are so much in rifeed.
country, En expert must
fair, hearing if he * Cries
"The 'MAN is MAD!" / /He must
this

have

able to make stupidity/ and
rigidity in high financial places

"intellectually disreputable."

THE COMMERCIAL

1034

FINANCIAL CHRONICLE
&
ect

Thurscky/ August

separate entity after it has
completed or is he free to

the Bank will have to honor
drafts
on the borrower's loan account
in

it into a larger unit after
has been put into operation?

accordance with the charter
pro¬

for the purpose of specific projects
of
reconstruction
and
develop¬

and it may be helpless to
prevent
policies it considers dangerous and

time of the loan negotiations
may

ment"

unsound.

World Bank's Success Dependent on

Credit Policy

been

merge

visions. However, the Bank
their sovereignty and their stand¬
Secondly, the Bank shall con¬
may
(Continued from page 1006)
From the Bank's viewpoint the wish to
ing in the society of nations. Some sider the situation of the bor¬
keep a closer watch on
amounts. ; Certainly, projects de¬
of the early borrowers will be rower and guarantor and
shall difference is highly important. the progress of the construction
serving serious consideration will
One reason among others refers work. It
which before the act "prudently" in the interest of
may decide to have its
'total up to a figure many times governments
both the borrowing and guaran¬ to the
charter; provision which own representative and special ex¬
even
the large sums the World war were important lenders them¬
deals with economy and
efficiency perts on the spot to look into the
Bank will be able to lend out tin selves and they will be especially teeing member and of the mem¬
and the exclusion of non-economic
technical,
financial
and
other
accordance with its charter.
Un¬ resentful to accept terms which bers as a whole [Sec; 4(5)]. This
considerations. Do these rules ap¬ angles and to make
provision is so general that it
sure that con¬
doubtedly, the Bank will have to provide for substantial controls.
ply to the period of construction siderations of efficiency and econ¬
considerable
Yet these first loan agreements needs
implementa¬
establish some working procedure
tion by the Bank management to only or do they extend to that of omy
are 'duly
observed.
for
the
selection
of the; most will set the rules for the policies
Such
operations as well? If controls end procedure will be
of
the
Bank for a
long
time determine its practical scope. <
particularly im¬
pressing and deserving projects
with the completion of a project
to
come
and
if
exceptions
portant during the early postwar
and thus
implement the vague
and the Bank has no means to in¬
Special Safeguards Provided *
are granted in some of these cases
years
when prices, wages and
provisions of Article III, Section
in the Charter
fluence the course of operations other essential
borrowers
will
hesitate
factors fluctuate
1 of the Bretton Woods Agree¬ future
the security of
its investments widely and as a result
Thirdly, "Loans . * . shall, ex¬
ment. Yet, however perfect such even more to agree to provisions
preliminary
may be threatened in some cases
which they consider unfavorable cept in special circumstances, be
estimates as were prepared at the
a system it will be unable to cope
v

with

contingencies.

all

Tremen¬

expected to
give preference to specific appli¬

dous pressure can be
cations and projects
son

for one-rea¬
another, all of which may

supposed to be excellent and
-ito carry substantial weight.
Already - it has been proposed
that the World Bank should take
be

the

over

rehabilitation

initiated by

ganization

projects

UNRRA when this or¬
will be liquidated at
Others want the

the end of: 1946.

Bank to finance the settlement in
'Palestine

displaced European
Jews. This is just a beginning and
many more similar proposals will
/be:- submitted and supported; by
various: and .powerful pressure

and

discriminatory.

These

should be

remarks

few

significance of this particular prob¬
lem. Upon its satisfactory solution
may depend the whole future of
the Bank and beyond that of in¬
ternational
lending
in general.
Obviously this question needs and
deserves a more thorough discus¬
sion than it has been given as yet.
As a first step it will be advisable
to review briefly the provisions of
the Bretton Woods Agreement as
far as they relate to this particular
subject.
.
.

Provisions of the Bretton Woods

Agreement

Bank

The

/groups;/§>|;/:^

charter

with

deals

tions should tend to facilitate to

the questions of credit policies at
considerable length. It was known

the

at the time of the Bretton Woods

The

large number of applica¬

certain

Bank's

the

extent

task

management

selecing

he most promising and deserving

"projects. However^ oh the other
] hand, it will have to face - some
t peculiar problems and difficulties
*
not usually encountered
in the
'lending business.
,v As

result, y there will be

that

Conference

effort

would

be made to provide for a ^con¬
servative" credit policy of the
Bank in order to alleviate the re¬
of the capital markets
particularly in this country which

luctance

resulted from the unfavorable

periences

during

the

ex¬

inter-war

precedents available to take care period.
.However, in this instance as
of these special problems and the
elsewhere the requirement of una
management will have
to
set
J precedents of its own right at the nimity in international ^ agree¬
ments led to the adoption of terms
/
beginning of its work. The term
and " phraseologies v which
lend
management, for the purposes of
themselves readily to various and
this article, shall include both the
As a
executive directors as well as the conflicting interpretations.
cPresiden t and his staff, Since the result, different conclusions can
be and certainly will be drawn
executive directors will be in con/ tinuous session, they probably will from the provisions embodied in
the articles of agreement.Final
participate even in those decisions
'which are usually left to the man¬ interpretation will be up to the
management of the Bank and will
:

(President

agement

? This will be

staff).

and

particularly the

case

be set

forth, in its declarations of
as in the actual
lending contracts. The
great significance "of the

early stages of operations .policies/as well

in the

until definite rules and procedures
have been decided upon.

terms of its

very

initial
Most

Executive

Directors

Will

set

precedents the Bank will

forth

agree¬

becomes readily ap¬

Loan Committees

The

"conditions

majority of the executive direc¬
will represent potential/ or Bank

which

may ' guarantee

the

make
Article III,
or

actual borrowers rather than lend¬

loans"

ing

Section 4 of the charter. The most

groups

customary in
:t other f i n a n c i a 1 organizations.
These directors will
naturally be
as

inclined to press for more lenient
terms of loans in general and of
those loans their countries are in-

jterested in, in;particular. <;
j; The articles., of agreement do
not extend to the executive direc-

■*

the

tors

restrictions

spect the international character

duty.

Borrowing Governments Will
Resent Controls
The

second

these

special

fol¬

Before

an application is
acted
written report has to be
prepared by a "competent com¬
mittee" recommending a: project

upon, a

after

proposal.

careful study of the merits

[Sec. 4(3),]

pert

whereby they owe their
duty entir ely to the Bank and to
no other authority and shall re¬

This

ex¬

ber and

one

upon

tributors to its capital. They will
be most reluctant to accept con¬
as are

transactions

usual in business

between

borrower and

are

lender

and

considered

nec¬

essary to safeguard
of those who will

the interests

buy the Bank's

obligations.
Such

attitude

standable.

the

such

controls have

looked upon as

However, these staff members
the

advance

been

no doubt
regarding the Bank's
rights to make all the necessary
inquiries although there may be

Project

„

prdstige ^artiimlar:lb^n|::If/that/share. is

will

openly

powerful,

most

implied.

either

The manage¬

comparatively small, the manage¬
ment efficient and general condi¬
tions
are
satisfactory, extensive

have the difficult task
give appropriate weight to all controls during the period of oper¬
the conflicting viewpoints and to ations may not be required. How¬
arrive at common-sense decisions ever, if the Bank's contribution is
as may permit to place the Bank's
large, qualifications of manage¬
operation on a firm and sound ment mot beyond doubt and con¬
basis.
ditions in general do not inspire
As a matter of fact, these con¬ confidence, then provisions will

ment will

trol provisions of the charter are

have

made

for

such

con¬

its

members

and

its

creditors.

However, .these charter provisions
do

Temporary

Permanent Controls

decided upon in
management of
What they can do is to

One fundamental issue which is
not

expressly

dealt

with

the

The

technical

trols may

aspects

con¬

be divided conveniently

cision is made and the loan agree¬
is being drawn; The pro¬

ment

spective borrower will / be ex¬
pected to submit. all supporting
evidence at his disposal; the Bank,
in turn, will

check and analyze the

evidence and have it examined by
the loan committee and other exlar

cide

preliminary stages of a loan only
or should be continued during its
whole life until full settlement has

loan

been arrived at.

mit its report to the Bank manage¬
ment which will make the deci¬

whether

the

asserted

facts

correct and warrant extension

loan in accordance with the

these

countries

heated discussions of actual
will

tend

cases

confuse the atmos-^

phere with political slogans
so

as oc-

often in the

laid

down

the manage¬

commissions cannot relieve

management of

its responsi¬
bility to decide upon the princi¬

are

intended to

cover

the

The importance
distinction is readily ap¬

this

parent.
For

example,

loan has been

granted for the construction of

aspects

work

and

committee
of

special project as provided for in
the charter; But is the borrower

problems.
will

direct

The
the

snecial

experts, coordi¬
nate the whole material and sub¬

sion whether

■

gravated as

result of differences

in national tempers; customs and

practices and particularly through

ther introduction of the sovereignty
issue; one of the tbuchiest in the
field of international political and!

three parts each of'Which re¬
a different stage in the his¬
financial matters. The unfortunate
tory of a loan,/
role this issue has been playing
The first stage covers the pre¬ in the instance of UNRRA should
liminary work until the final de¬ be taken as a warning by all con¬
into

flects

nerts who will investigate particu/

the

member

ag¬

Controls During Different Stages
in the Development of a Project

ticle III

all

quite helpful to famil¬
iarize the public with their com¬
plexities and difficulties before

cured

determine the facts underlying a

rules

lems
would

past.
comprehensive by any means. tinuous supervision as will give
The management can include in the Bank sufficient influence to UNRRA's Experience Emphasizes
loan agreements whatever addi¬ assure appropriate operations and
Need for Proper Publicity
from
undue
influence
tional clauses, safeguards and se¬ freedom
and Controls
curities they consider advisable to with regard to a project in which
The usual difficulties, in lender
the Bank has an important stake.
protect the interest of the Bank,
vs. borrower relations will be

particular application and to de¬

able to get in support of its ef¬
forts to arrive at equitable and
fairly acceptable solutions. Widest
possible discussion of these prob¬

•

charter refers to the question as
to whether the provisions of Ar¬

the Bank.

are

meaningless*

impairment of- ples of the Bank's lending policies.1 under obligation to keep the proj¬

Financing

completely

Loans granted by the World
considerable argument how far
Bank will differ from those com¬
these rights; should be
proceeds of any loan are used
actually
only for the purposes for monly extended by; commercial exercised in a particular situation.
banks.
They will not provide But as
which the loan was granted
long as the loan has not
with due attention to consid¬ working capital but will represent been fully drawn upon, the Bank
erations of economy and effi¬ long-term investments in fixed as¬ Will always be in a favorable posi¬
sets which cannot be easily con¬
tion to have its requests complied
ciency and without regard to
verted. into cash as loan instal¬
With,"
political or non-economic in¬
ments fall due.
fluences or considerations."
The situation will be different
In this connection jt is also im¬
in the operating stages As has
(c) The borrower shall be per¬
portant to keep in mind that under
been explained before, the char¬
mitted to draw bn his loan
the charter the Bank is permitted
ter provisions are not so clear in
account "only ? to meet ex¬
to finance only a share of the cost
this respect and in general the
penses in connection with the
of a particular project (Article IV,
Bank's position will be less favor¬
project as they are actually Section
3) viz. the amounts to be
incurred." - ' '
• j
able. However, there can hardly
spent in foreign exchange. The
be any. doubt regarding The ad-;
These are probably the most borrower has
to take care of all
controls
important clauses of the whole cost incurred /domesticallyand visability of adequate
during this third period from the
charter. How they are interpreted this is in
many cases by far the
standpoint of sound credit man¬
and implemented in their actual
larger part of the /totaL invest¬
application will have a determin¬ ment. In exceptional cases only agement; The Bank will have to
ing influence upon the Banks' fu¬ the Bank can finance "indirect" attempt to include into the loan
agreements such
provisions v as
ture development.
foreign exchange expenses such as
may fit particular situations. These
They provide the management may arise in connection with but
controls may start with a mere
with considerable powers to make not as a direct part of a particular
representation on a board of di¬
such arrangements as may assure project. Thus the charter takes it
rectors, they may be expanded to
adequate safeguards in the Bank's for granted that the borrowing
a right of
inspecting and auditing
Tending operations. But it will be country Will always be able to
books and records and may lead
up to the management to exercise raise the domestic share of the
eventually to a more or less de¬
these powers fully and consistent/ cost through its own capital mar¬
cisive influence on .management
ly, and to grant exceptions spar¬ kets. Experience during the in¬
policies. Each case will have to
ingly and only if warranted by ter-war period does not bear out
be decided, upon* its particular
truly unusual circumstances. For such optimism and this provision
very strong pressures may be ex¬ may cause serious embarrassment
How
complex; a problem in
pected to relieve borrowers from in a number of cases.
,"
<
management the World
all or some of these
controls.
Most probably the percentage credit
Bank will have to face and to
Claims will be advanced that the of the Bank's share in the total
controls are unnecessary, burden¬ investment will be instrumental deal with, even this very sketchy
some and expensive and that they
in determining the amount of con¬ survey should have made abun¬
should be dispensed with for the trol the Bank management will dantly clear. No doubt, the Bank
sake'Of economy. Moreover, con¬ consider necessary to safeguard a management will appreciate what¬
ever constructive advice Tt will be
siderations- bf national

rules

by the

;
; ■' :
ment. Obviously, these' riiles will
quite under¬ have to be determined before the
past, govern¬ commissions start working and

ments have submitted to financial
controls under- heavy pressure on¬

ly and

Bank shall make ar¬
rangements to ensure that the

the
con¬

become

These two stages areefully cov¬
ered in the charter and there can

Control Requirementns Will Be
Influenced by Bank's Share :

(b) "The

will have to depend for guidance

trols such

Ac¬

ereign

governments and at
time its members and

cording to: them

carry particular weight;
for
they have been subscribed upon
members of by all the members when they
the technical staff of the Bank Signed'the' articles of agreement
(Article V, Sec. 7). It appears that and thus cannot be objected to at
the final decision of the commit¬ least in principle. Of course, this
tee will rest with the members of will not prevent disagreement in
the Bank's staff since the
their actual application and this
repre¬
sentative of the borrower can be very fact makes their interpreta¬
depended upon to favor his coun¬ tion a matter of such vital signif¬
icance.
try^ application.

selected by the Governor
representing the borrowing mem¬

problems is even more important.
The Bank's customers will be sov¬
same

those of Section'5(b) and (c).

not

ac¬

Sec. 5(c)

are

lows:

committee shall consist of

cept in accordance with Article V.

of his

stated

the

which

President and his staff have to

;

are

important provisions

[Sec. 4(7)].

The first of these special prob¬

tors

loan

parent.

lems will result from the fact that
; a:

first

in its

thus

ments

Represent Borrowing
Governments

This provision
should be read in connection with

sufficient to prove the exceptional

not to

grant the

loan and to determine the clauses

of the loan agreement.

cerned with drafting World Bank
policies. In order to comply with
the
sovereignty
dogma,
the
UNRRA agreements provided that
the goods furnished by UNRRA
should be distributed by the re¬
ceiving governments in accord¬
ance with their own regulations;
No
wonder
that
reports
and
rumors soon multiplied, asserting
unequalities, favoritism and abuse
in distributing UNRRA supplies*,

result

contributing nations

disgusted
.and
eventually
forced UNRRA's.liquidation at the
got

earliest opportunity. In the future
there will be no more coonerative

organizatipn and each needy coun¬
try, will have to make its own sup¬
phase ply arrangements without the pro¬
of the project. During that period tection and assistance being afThe second; stage will

cerned with the construction

con¬

^Volume 164

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

•forded by the cooperative organi¬
zation of UNRH A.-

Here

striking example, if
should still' be-necessary: that

one
no

cooperative

venture of gov¬
the financial and eco¬

ernments in

nomic field

succeed

can

without

Bank's issues.

And vit may- create

ticipating

-conference

difficulties in connection with the^ negotiations that would lead to:

registration of the Bank's bonds
which may be easily avoided by
maintaining the standards of the
SEC for-all World Bank loans. As

■

The effective reduction of pro¬
tective tariffs.
The elimination of

restrictions

quantitative
exchange don-

and

concessions in the rigid application of the sovereignty con¬

result, these loans would be sub¬
The acceptance in its widest
ject to all requirements as are pre¬
scribed
for
the
registration of form of the unconditional most

cept.

bond

.some
*

After all, it was conceived
developed in the political

and
"

sphere exclusively and was never
designed to fit -economic needs

trols.

or the national distrir
products in short sup¬
ply.
Wartime controls should be
modified or removed as rapidly

of inflation

many.

butiori of

certain

SEC

with

made

nec¬

the

modifications

the emergencies for which they

created

were

diminish

disap¬

pear.

Economic activities of Germany

with

issues

1035

and
other
ex-enemy
countries
favored nations clause as; a basis were necessary to the existence
for commercial treaties and con-. of
the
world
before
the
war.
ventions.
Obviously considerations of mili¬

The economic restoration
world

the

whole

and

Germany's
neighbors would be retarded un¬
less place were made for a peace¬
ful and stable Germany in Euro¬
pean and World economy.
particular

that

The resolution

transport

and

recommends that
national

international

communications

;■

conference

official inter¬

convened

by different conditions in
as early as possible for the reduc¬
foreign countries. Such practice
Agreement to arbitrate differ¬ tary and political security must
and considerations.
will, incidentally, give a tremen¬ ences arising in the application of dictate what action shall be taken tion of passport and other restric¬
i
Such cooperative organizations
dous impulse to other countries the
exceptions set forth in the on the economic status of Ger¬ tions.
•
■:
will depend for their success
to improve their own often quite
upon
proposed Charter and the inser¬
full publicity of the most relevant
inadequate standards of financial tion of an appropriate arbitration
-facts and a certain amount of in-, reporting and disclosure. x
clause in the agreements to be
; fluence granted the lender so he
negotiated,
< ■ "■r
.i '
;
Spirit of Cooperation Should
§*nay' be satisfied that his money is
Discussing the subjects of em¬
Overcome Difficulties and
used in accordance with the loan
(Continued from page 1012)
ployment and living standards,
Prejudices
agreement. Secrecy and unilateral
dealt with in the Proposals, the tions which were fated to be dis¬ communicate its contents with Mr.
action will again lead to distrust
The World Bank management
resolutions suggest that commit¬ appointed if no immediate deci¬ Snyder.
and rumors and will react unfav¬ will have to face a
big or as some ments to achieve maximum em¬ sion
or action followed their meet¬
X 4) Utilization of the proceeds
orable upon the readiness of pro-: may feel an overwhelming task. It
ployment avoid placing responsi¬ ing.
This time it is the heads4of of the dollar loan. In a statement
; spective
lenders to buy future will have to break new ground and
bility upon governments to guar¬ Treasuries and not of Central in the House of Commons Mr.
essary

•

Mr.

■

DaltonVWashington Visit

bonds issues of the World Bank.

have to set

ards

U. S. Standards of Disclosure

The World Bank should prefer¬
ably set its own standards of pub¬
licity which its borrowers would
have to accept in accordance with
rules

the U.

Securities

and

Exchange Commission. Such
a
policy would have great ad¬
vantages. First, all bond issues of
the World Bank will have to be

registered with the SEC in order
to be assured of the broadest pos¬
sible market in this country. This
should be done even if bonds are
«sold first in another
country, for
it is

finance.

Some of the problems may even

Should Be Accepted

the

rules and stand¬

new

international

essential requirement for

appear to be beyond solution with
the methods and tools commonly

in the financial field.

used

haps something
cial

quired.

will

re¬

The task will have to be

educational

than finan¬

considerations

Per¬

one

the

first

antee jobs to all who are willing
able to work; that the role of

Banks that are to meet.

government requires decision up¬
on many policies in varied fields

the

should

and

accompanied

like responsibilities to be assumed
by business interests, management

and labor.

that
has

The conclusions state

high level of foreign trade

vital influence

the main¬

place. It cannot be emphasized
tenance and expansion of national
strongly enough that all negotia¬
tions
and
agreements
will
be employment and income.
In dealing with restrictive busi¬
among members of one coopera¬
ness practices, the resolutions re¬
tive organization; Every borrower
will be

contributor to the Bank's

funds at the same time (even if
his contribution may be small in

ject
one

the

unsound

notion

that

standard of conduct is appli¬

cable to private agreements
another

and

agreements between
This fact
worldwide negotiability
of
the alone should go a long way to dis¬ governments. The resolution stat¬
ed that private business agree¬
J"World Bank bonds.* Second, the sipate the illfeelings usually en¬
;s standards of financial disclosure
countered between creditors and ments between producers, subject
as practiced in the U. S. are un¬
debtors. All disclosures and con¬ to
proper
safeguards, are not
doubtedly the highest and most trols will be imposed by the mem¬ necessarily in conflict with the
rigorous in the world. To lower bers themselves in the interest of objectives of the Proposals.
It
these standards in the instance of the
cooperative organization and added that "when agreement is
"World Bank loans would possibly its
future
sound
development necessary in order to restore or
have unfortunate effects. It may rather
than
in
favor
of
any maintain stable economic activity,
arouse distrust among American
stranger. If all problems are seen it should normally be concluded
investors who will be called upon in such a light, the awkward con¬ between the producers directly
to absorb the largest share of the siderations
of
sovereignty, na¬ concerned, unless they are too
tional pride, etc., may be pushed numerous and dispersed to make
♦For a fuller discussion of this into the backgrund. If the Bank this possible."
Reservations were
important question see the article is fortunate
enough to create such made by the United States and
an

"'Worldwide Investment Expected

For World Bank Bonds" in the is¬

of May 2, 1946/ of the "Com-'

sue

mercial and Financial Chronicle."

comparison to others).

Dalton

made

quite plain that

to believe that

Britain is entitled under the Loan

procedure to be observed will
the same as the
pursued in Basle on the oc¬
casion of the Board meetings of
the Bank for International Settle¬

Agreement to convert the dollars
into other currencies and spend
them in paying for imports from

There is

reason

be substantially
one

other

Should

countries.

tend to make

in¬

of this

ments.

right he
would in all probability wish to

and

discuss

The practice then adopted
pursued right to the outbreak
of the war was that the leading
Central Bankers held an informal

meeting prior to the formal Boafct
meeting of the B.I.S. It was at

preliminary meetings that
subsequently
reached by the Board were first

these

decisions

most

discussed.

private
the

In addition there were

meetings between some
leading Central Bankers

the

use

the

circumstances

United

with

States

Treasury, in
avoid any friction aris¬
ing from it.

order

(5)

Consequences

in the

American

probable effect
and

omy

the

rise

price level.
Britain's

Its

econ¬

American-British

economic relations is certain to be

discussed.
the

And

even
though at
present stage the question of

who between them controlled the

majority of votes.

cordance with the

It stands to reason

that the same

practice will be adopted also on
the occasion of the Washington

revaluation of sterling in ac¬
Canadian and

Swedish

precedents *• does
not
arise, the theoretical possibility of

such a situation may be envisaged
meetings, if only in order by the heads of the two Treas¬
to try to avoid any clash between uries.
British and American interests at
(6) Possibility of a slump in the
the
meetings.
There
are
un¬ United States.
The recent rapid
doubtedly differences of opinion rise of American prices accentu¬
and interpretation.
An effort, is ated British fears of being in¬
likely to be made to straighten volved in a crash.
Conceivably
them out before the questions are the steps that Mr. Dalton's gov¬
raised at the Board meetings, by ernment envisages
in order to
Canada
to
the
resolution
as
a: spirit of trust and mutual co¬
means
of private talks between isolate
Britain's
economy
from
adopted. The dissent of the United
Secretary Snyder and Mr. Dalton. the repercussions of such a crash
operation, its
success
will
be States and Canadiandelegates
(if and when it should material¬
The conversations of the heads
beyond doubt.
was stated as follows:
of the two Treasuries are not like¬ ize) may also be discussed on the
"We believe the statement
Board

fails

Economic laws Must Be Observed

By All Nations to Avoid Inflation
(Continued from
tendency is due to non-monetary
causes, such as the shortage of
.goods and deficient production,
and rising costs due largely to
higher wages.
"But

page

1012)

than it

receives, for the cur¬

then deteriorates in spite of

rency

all

legislation, restrictions,
exchange control..
"3.

Reliable currency and

and

credit

place

sufficient emphasis on
the value and importance of com¬
petition. as the best regulator and
stimulatort nf economic tncijvity
both in national and international
trade.

"In

judgment restrictive
agreements, whether private or
governmental, which divide busi¬
our

ness or

territory between the par¬

ties,
regulate
production,
fix
prices, etc., may be justified only

ent

mat¬

the pres¬

agenda of the Board meetings.

They will' have td ; discuss some
questions which are outside the
scope

of the two institutions,

'&nd

present occasion, even though the
on this subject
would
necessarily have to be very vague
discussion
and
;

Economic laws, such as the
of supply and demand or

"1.
5

Saw

fiGresham's Law, are facts and are
decreed by man.
All coun¬

mot

tries

adjust themselves to
laws, under penalty of first

must

these

relapsing into chaos only to find
■themselves
to

ultimately

observe

them,

for

compelled

they

stronger than human will.,

v'V- "2. In the long
*

can

prosper

i'
>

OJ,'

State
;

'•

the

preparations for
World
Trade
Conference,
resolutions give full support
the

of which is likely to remain
outside their scope.
The follow¬

Mendels Named Sec.

ing is a list of tentative sugges¬
on such subjects:

Of World Bank

tions

(1) Consolidation of the blocked
balances.
Although Mr.

sterling

Eugene Meyer, President of the
International

broad

•'/*•

]

aims

of• the

Expansion

and

United

Employment, is¬

sued last December

discussion

suggest
ments

for

Trade

the

basis for

forthcoming

Conference.

the

definite

They

commit¬

governments

si.,j
.

should take

> -y

i ' l).

mo¬

par¬

for

Recon¬

in part:

holders of such bal¬

ments with

it seems probable that he
will want to keep Mr. Snyder in¬
formed about the progress, of ne¬

"Mr.

ances,

Until now the Argen¬
tine
is the only country with
which such negotiations are being
actively pursued, and the result so
far is not very satisfactory. Never¬
theless, it seems probable that Mr»
Dalton has formulated the out¬
lines of his policy to be pursued
gotiations.

all

negotia¬

forthcoming

the

and. that he will want to
communicate it to his American

tions,

place under a system
priorities and allocation or

(2) Liquidation of the Imperial
pool and of the sterling
area. This will have to be achieved
dollar

by July 1947, Possibly

he intends to

the

requirements of pur¬
chasing countries and relief needs.
The

restoration

•

transport

purposes.

new

given first priority,'

The retention

trols

such

can

purposes

of wartime

justified
as

only

This will also have to

achieved

and communications facilities

must be

by July

provisions

contains the necessary

the prevention

The

1947.

Exchange Control Bill which

con¬

for

converti¬
trade

bility Of sterling for current

now

less in draft, and

possibly Mr. Dalton may want to

V--'" •.' <
t";
i
s'A : i
"t
•

native

He graduated from Mc-

Gill University in 1928 with the
degree of B.A. and was awarded

the Montreal Manufacturers Fel¬

lowship in economics and political
science.

He received from McGill

the

degree of M.A. (suma cum
laude) in 1929 and the degree of
B.C.L. in 1932/ He was admitted
to the bar of Montreal in 1933.
"Mr. Mendels engaged in the
private practice of law in Mon¬
treal from 1933 to 1940.

In 1940

•.

with the Canadian Army and was

commissioned iri the 17th Duke of
York's

Royal Canadian Hussars.
During the course of his military
service he

acted

head

of the

General Staff Section responsible

military estimates, finance,
military economic studies,
and acted as liaison representative
of the Army on these matters for
Parliamentary purposes. He was
discharged from active duty in
January, 1946, with the rank of
Lieut.-Colonel.
In June, 194-0, he
for

and

proceed.

(3) Restoration of the

other forms of control which will
meet

Mendels

Canada.

he volunteered for active service

colleague.

Bank

Dalton

Mr. Dalton
The international
distribution is in a position to inform Mr,
the of commodities in short
supply Snyder about the stages in which
the

States Proposals for World Trade

spends
.

r:-• ■.■■ %

World

run no economy

if the

are

chase of bonds."

hypothetical.
'
fi! .)
—f—

some

struction and Development, an¬
repeatedly declared in the
nounced on Aug. 13 the appoint¬
House of Common that his hands
involving the interest of the gen¬
ment of Morton M. Mendels of
eral publio arid consumers as well are entirely free, as far as the Montreal, Canada, as Secretary of
United
States is concerned, in
as producers. We agree that when
the
bank.
The
announcement
such rare and unusual circum¬ negotiating the terms of settle¬ states

in rare and unusual circumstances

most countries," the are indispensable to the develop¬
continues, "the mone¬ ment of production and trade
tary
causes
are
substantial. which alone create real wealth.
Among these causes are large ac¬
"4. Currency stability is an es¬
cumulations of purchasing power,
sential condition of preserving, stances
exist,
any ; restrictive
continued additions to this by de¬
increasing, and in particular dis¬ agreements must be subject to
ficit financing, "and cheap money
tributing wealth on an equitable governmental scrutiny and super¬
policies, which involve monetiza- basis. An increase of the mass of vision and to the other safeguards
'tion of debt and lead to rising
purchasing power and particular¬ provided in the section.
'values of equities.
ly of wages, which does not corre¬
"In short, we feel the section is
"This increase in bank deposits spond to an increase in the crea¬ too broad and too
general in its
and currency must be arrested as tion of goods, is an illusion and
implied sanction of the use of
threatens currency stability.
Rapidly as possible; by bringing
restrictive agreements."
budgets under > control, arid - in
"5. The instability of currency
On the second subject of major
most countries means must be
substantially lessens the creation attention, the transition phase
dound of reducing existing over- of
wealth, for" it is a premium on problems, the resolutions declare
expansion of money."
gambling, and not on creative in substance:
The "homely truths" on which effort; moreover, it tends to ac¬
The distribution of war stocks
the foregoing comment is based, centuate social inequalities, fall¬
and surpluses requires immediate
: arid which the Council of the In¬
ing with particular severity on and effective administration on
ternational Chamber stated that the
thrifty, the prudent, and terms which make need rather
it felt impelled to emphasize, fol¬ those who supported the country's
than 7 compensation the primary
financial war effort by the pur¬
low:
consideration.
•

-statement

ly to be confined, however, to
ters that are to come on

1
■

was

made

officer of the Order

of the British

Empire by the King
recognition of -his war serv¬
ices."
J; '
-• l
in

„

1036

THE COMMERCIAL & FINANCIAL CHRONICLE
a;

Approach to
Better Understanding of Business
completely,

point of all. this, is; that/1
enterprise and
liked it fine. I liked it so well, as
a
matter of fact, that I am com¬
pletely, sold that free enterprisers
taste of free

friends

who

that

system

for

the

could

practice

of modernizing

afactqr which I, believe to be of

inporiance.

asked

him

what

Annual Report in 1935; it

natural

worried

rapidly,

was. only,

ipbutipn/ist; the, profitqbie

tho years, that) we

over

should, have

will

admit

I- never

banker.- Buf let-

of human relations. It is the busi¬

tried

that morale

if",

ness
of getting really interested,
member very vividly this,
in the problems of the men who
rence several years- ago/
work- with you. It is the art of,

One

learning; to dp something about

through

our

men

occur¬

his

ran

arm

Anybody■* really- interested in
human relations knows: how in¬
like the business end of- a base¬
eptly, he practices whatr he be?
ball bat. He was taken off to the
lieves. I. will make bold anyway
hospital in, an ambulance and we
tor mention a couple of
the; prinr all
hoped for the best.
ciples as they can't be stressed ,too
Later I; went; to; a dinner meet¬
frequently.
ing and; was then. Unable to re¬
The first is honesty, complete
turn hopie to Scarsdale, as it was
honesty, in- your- dealings, with a*
night, of* heavy, storm and the
your associates^, Befoye you guf?
trains were not; running// I; went
faw at, such % ari; old
saw,- let me
back to the. office/to sleep on my
mention one of our largest. com¬
-

this company,
was

of thq/ coal strike

interest to

hundreds

some

of thousands? of£
people. The com¬
pany's top officials^ decided; that
on the one
hand,they did* not-want
to; scare; the people* nor; on? the

other- to give; the; public; undue
optimism. Therefprey the company
released a statement: tq the effect
that if had. a.
3,0-day coal, supply.

y^ePt out to take,
plant

which

(2) be; ready to put-human

re¬

(3) be an ever-lqying ctndcnt
t; °f cqmrqnnication.

look at the; XQNfEQRMINGiAOVERTISIf^
_

formedwhicfr look

UPOm ihafecom^

pany's? next: statement;
another, lfe^"

"just

as.

sales- dollar- is
by materials?

represented:

their

time

The/third* and final factor that,
led me into the field of* public

relations advertising, was an incrcqsipg TpvpfOl thf^ aii^f CQih-^.
sciously^confused- picayunish is*- municatioh, or, iff you, will, of
sues,•- there will; be a lot* fewer transferring; ideas/? Idid/ not get,
bald, heads and' & lot more
money that, love' overnight, nor do I feel
in the bank; foreverybody con¬ today that I; have as. yet / prqbed

facing

mutual;/prob*

lems instead of arguing over?con-

;•

cerned.

even

/ A current assignment- Of
a

ours-

plant-community education job.

Our

objective .may' be

d^ribed:

broadly

"getting, the; plant

employees amdi other mpipfeei^; of
thq community-to. look
business- and

agencies for

security,
I

sit

government

think maybe yes if we

grandly
ofr life

tell
to

no.

don't

ivory, tower

the

our

think maybe

and

get

tough, local CIO, to work with

I
a

fon use,
tested

ing

influencing, people.. I.

On the one^hand> we know fromf
those, made/ by
Macfadden among industrial em¬

of.

labprrmanageinent

done

We
in

had

various

opportunities

ment in

Stockholders.

Back.

in.

1935;

week? ago I hadv a
meeting-; with a staff-Vice Presi¬
dent of one of the
country's larg¬

job

ing :

the/other- hand",/

know:

we.

frOirisuchprogramsasrlhob(Of{the*
electfic, companies,, that hundred?

make

rgoin^tpi:

greqt {deal, of; headway/Be^

When, you;
are

;-;v;s ::v;

ifew

years

;

we* wilk

prpbably*wjtne^;/m^^
awakening and, we. will

see"

/;/JjSlg sales campaign Of/ increasing ip^,
: / 4
.
sure that they ;tehsiiy:;developed/;

pipyeesT/,r/V v//
-

truth/,

/ i In the next

ar.e*

right, then, you takq on the

/■i

One

thing- that wilL

come?

out

jpb ot pounding home tp.. every of ib asrfar- as. everyone, is? per^-:
employee the facts on why .the sopally concerned, I believe/, is,,
that- each of' us personally will;
policies are- right-for-him.
"maintaining and; improv¬
develops am increased- awareness
/ i This is a job of education—with

favorable economic climate
for his company."
The.way he put
it may be of: interest- to

experimenting with what-was

employe.es. are eager
for;; il^otmation^ opr ihoip owh.'
companies,/

est corporations.- He described
his:

handful of. hardy leaders had be¬
gun

to, business'* qseful-

him-, and^

Several-

modest way with com¬
.was

;;
Third; they want to get better
laws and better lawmakers.

the.printing business, to experir

munications. One of these

throughoutthenation

those

sbmething.: about- pension
life insurance or security
measures, or all three and many
others, besides* You make/suret in
short/ that your client's? policies,
are. right; for your client'^ enj-

Second;; they
street

the

;

trusts

cqr

the

that

increase the

areas

operation.,

ness-

Such Purveys

■

the

than

whole.

•

want: tq, bmadeh
understanding of tfee man, on

mightier

bein^?
change

■

the

was

opinionpn iritangibl^ ideas>?

■

•

communication, pretty, well in the
18th century when he said that
pen

do the job

butr-are already
.to their: power in

•

have

tq; belipvei :hpweyeix that
Voltaire summed; up the power of

•

ready

you.

These media are riot only

bf: thousands of" people-ccan; be?
dpgmas.,
pretty sure that? nobody from an
moved from am antagonistic/ or an /
7. Ta^es, and. others you- coqldi ivory tower in New York- City
on-the-fenqe- position,- to one of
■
is going to wip him over- It-will
nam«.
*
friendshipfand/understanding;
probably be impossible to affect one of
There> is no question; in short*
ou^; greaf^^utility systema^
his. thiplring mpch lass.-his, vote.
that a. problem^ exists and* that
"Well, all right," you- will, say? the
businessmen: are conscious: of^ it;
techniques are tinders,tood>„:
believe
the
grass? roots
A number- of 'management- execu¬ "Wn
;;
Werare^ready to; get aheM/wl^
tives, and., a- number of vwell- theory, What do you do about
dptrig the job " and.: management
staffed and well- financed; groups it?"
cbnc.eqse, off? talkhiC;tip/itselX on-;|
Actually , there is a, simple little
a^ e> be^nhlng'to; tackje* thqv probe
jthe/ibpiC/^Business/^mu^/seljt/itp
formula. First y.ou make sure that
lem>
self; to thq public,"
:
/
■
:
Although ther approaches; am ypur client's ^policies create sound,
// Whiio t qpn't;. believe, that, we
man&i'and, variedj, X^thinki Ht, is industrial^ conditions? You make
probably fain to say that these,; in sure, in short, that your, client; not aye/; really* gping. to/ atop t talking,
to ourselves, I. do. believe that?wq
general,; are/ business? objectives only thinks it wquld.be nice to "are
going to start, talking/to tho
in trying • to improve
have- clean rest- rqoms,/but? actur
the' present,
ally prpvides them...Not only that
state, of,aifairs.^ ;
he believes; in security, but has / f Arid/X^boiloyo/we^are
; ; First they want to

economic, facts- the field of* the Annual Report to

plant associates.

yes

vast po¬

come

satisfying^ jobs. Im¬

Maybe, yes/ maybe,

upin

small part of the

tential. use of the? spoken. word,
the- radios the (newspaper, the,
magazine, and so on, as a, means

higher/wages, greater sword.

possible?
*

not

te their

rneeti ng or/ the radio program. *

part, but can never be. copnted. ployees.
upon

In & word, if/we- want' Joe- or Jim
4; Government
ownershipof
or Bill on our side/ wd had^ bet¬
some billions of dollars worth
ter staii^ by winning- his/ regard
of industriab projects.
for his own local/manufacturing
5. Administrative chaos,
company/ IX? ho doesn't: like his
6, The rise of screwy ecopoinlc jqn in hiq companyf yoUi cqp/b^

-•

ypur

Relations; studies* ma^ jpj^their'

3, Qontrol-of our ihohetary sys¬
tem. by - thq-; politician.

"Is the human

elepieht SO; important iff 85% of

;

-You,may/ decide/ to try^the/town.;

tylr.; Johnston, stared; at the
questioner then; said; "Who the
principle in hu¬
man relationsds to play the cards hell* is .going to, manage the. buy¬
ing; an.$/h,andhhg/bfe that 85% if
face: up, with the*
people withwhom you are working. If labor it isn't men?"
management, for example,
Will only begin to spend :more/of

jqlhyeAgrqi^

A second basic

and;

was

supervisory management- edu¬
cation before you; go; to r your erur ?

first

from the floor

operating.

eral banking,,

;

•

RromPttetpld:

better/grade of labor,

with

their: ffiends; the truth, another
large group-, was. automatically

bndithereby increase productioioi* :
lower labori
turnover^ andJ getv a/*

facts/
public's lopg^term; interest
t&bugh/the bso
1
honesty, sincerity and. eco?.
stripSi ^Here/ fqr^ example,^ is/an//
nomic sagacity?"
ATF^ Employee
Ai^uah Beport /
My- own persqnalr belief, ? for just issued with a five-page comic
whati iti is worth, is that: if< the sequence entitled • "The^;
Kpad; to
jpb;is: ever'gplngta be dOne^ it? is^ Better- Wages." •
•/
;, :v
'•
going to be done on a grass roots, /
l^ ma^wish to turn to mpfion ;
basis; If^we are ever going tq win
the; respect: and: understanding- of pictures or soundwslide film.;
(• Yjou -may decide to;
tackle qv job
imMiOTetown/Dhiq/and Bill:
the

lations first in your- thmk-

ing, and

Actually, tjie^coal supply was just
the "next:morning*
short Af; what; was; necessary, for
/ \ Eric
90 dsiys without
Johnston
recently
de¬
any curtailing
Whatever on services.: As- some livered; q brilliant address at an
AMA luncheon. His topic was the
hundreds of people- within- the
r
company.knew the facts about'the importance x^the^ human element'
ip* business-, The-. first question
supply of coal aqd-

welfare.

more everythingr-T but;, tq
\
You may want to^convey cer- ;
vote for the man, who will act in
tain-' simple
economic

The ^ vfv first found-that; businessmen ip:IJmporiai Ba., /and? Jim? in
sight that ; greeted/my /eyes were
even more worried, than l lem/Mass^it/ia going xdhaye/tp
was J oe,. standing. on top of * a feed
had originally expected* Here are be right in his local community
board; For a" second* T thoughts he
i^terms of issues^whh which: hd
some of the reasons for that wellhad died- and* F was"
is
thoroughly familiar and
in
seeing ~hi£ justified worry:
ghost* When I asked Joe what he
Which he is very much interested:
l. Federal regulations, off labor^
was' doing* there?, he? said; they had
;
Moving from ? the top-down—
,d|sRUjt^:(and«: .ih<4denmUy^f th^
gjven- him-some dope- and-put his
j^fe ori Chamber of Com^
can't understand, why it is
arm in a sling-and? he had coihe
mercf* -or- the- Truman- * formed
called regulations)» , back because the job on which he ;
•
Labor - Management
Committee,
Was- working' had? to be
deliVered; ; ^.? Thei raRidi extension- of Fed^ or the Yale- Institute of** Human
was

leadership/ in- shaping hie

aires,

(1) love- free, enterprise

Npw let? us: get- to the pay off.
Whaf has happened since X: got
into this? rather nebulous: oddf.
turning in,. I 'soundings business, calledt OPIN?i

cpuch^ but. before

panies; who> forgot itx dujyng; the
repent, coal strike? The, effect; upon

soundi?;

country have used plant-commu*? :
nity advertising to build morale?;

■

■<

have confidence- in

can

his. management; for
economic

j i

Miehle cylinder press;
lidh,^vsddchJ^^^'TXQW afeyou/gd*;
Everybody. stood around looking likes to eat?"
ipg> to get a majority oi the people
sad; with Joe iying^out on the cut¬
So, you can see if, you. want to ihx a- democracy., to/ vote,, nob for
ting. table; completely out, and; be a public reiqtions advertising the man who- wiltpromise them
with- his. arm rapidly swelling, up man,, you must
more bread, more cars,-more the*

those problems. It is the. jobwhich
starts;with a heart; and, not the
slide rule.

can.

■,

re¬

hazr-

I like to; meet this, situation by
hsking the new client; "Tom, do
ypq like to fish?" If the answer is
yes* you look fought
apd; say;
"Well do you use the bait yqu
like to eat, or the worms the fish

give: you an >

instance of morale's results. I'

' *

measure-

adyance within, the •
limits of' his own, persqnqX '
ability..., •

(7)/He

end of;

fair-

approach.

(6) He
*

security against the
ards of iold*age« ^

work hard at /V

* '

'/ y '
"Xt. isn't;

(5)> He^has

at*
all
impossible, ; NOW'
what* about/ techniques •
though* that the government, will
J^ow do you do the- job? First '
come along and.;
qyernight turn
PS into a, kipd: of; wholesaler- of you try to measure; current opin- ;
ion- so- that* you- will% have a- ther-* £
tank car lots. Thqt'si our No., 1"mometer/ if - you will/ so that yqu
prQblem>"
can see-whatprogress or lack of '
•.
If. yQUiStudy, the.activities of the,
progress, you. are;' making./ Yoir :
individuals or groups who: are fjiidt
out ;in^ short?^ firsi^^ what"
working on. the. problem ofi eco-;
people think before yqu, begin to
nomieclimate,:? iLthipkj/yout ywlh try to make theip- think.- somefind: as; Ik havn that; mosfc of them
thing else:
haye. the legislator very mucin in:
Yew are then ready to maker-,
view.::::; J
/' : ov::r
use qf a wide
variety; of channels/
Again, approaches vary. Some qf; cpmtntinicatipn in
getting- ybur
are- trying,
to/bring the pressure of message, across. ■',
■/:/ . ■. ", ' /
public opinion to bear op the leg"
It, may be/the plan-city newsr
islator directly. Others are
trying paper. I have
a. study here* which ;
to get the public to vote for the
soineofryou maywiahXolookPvei;
kind- of man who will eventually
later,, and which goes, into this :
provide the proper kind of;legisparticiilar ap&roachr in/consider*:^%.
lation.
able detaih; illustratinghow some
;
It all;leads,up to the "$^1 quesr. 4Q
companies
throughout : the /

than; your

to •.

business and

our

work with management in.

peddle- any- of

It is the?f actor-

-»

less.

eratiqns.
Now," he_ said, "our
chief difficulty is that^^ we? all like
to, follow the easy, rabbit; tracks
that were made 30 years ago in«

the An-

uual Report spread fairly,

utmost

is treated, fairly/

possibly

about.

most

(2) /Hie- work is - appreciated;

j: f (3) He

the

opportunity to
helping
people produces the mostest:"
"I" am worried about" getting
tp write its, story as well; as? to de^I had seen a few dollars made; gpOd; publics relations," said Bob.
sign; and*, produce
the reports
into quite, a? few;, more
that I :
'That/s simple", said' his friend* themselves I think that, if was
liked. ! had: seen well paying, jobs
"Deserve them,"
tJiiSv particular^ experience^ in. the
that were secure, and well super¬
In trying, to* deserve, them, in¬ field- of communication that got
vised created; I had seen a rather
cidentally! in my. own former me into my present business. The
special market;, spotted, .studied;
company, I tried; an experiment ^ore^iisavfeQfbowgQod, manager
and- developed; It' was. a pattern
with a guaranteed; annual, wage. ment's. story was, and how, poorly
typical of what put flesh on young
It was rather workable. I men¬ iLwaq tpidk tbq rnomii-^ feit theregrowing America's j bones... It's a.
tion it; because I; think i%;. helped was a need; for, ai specialist.
pattern that we need: today, and
us. get; our good; public relations: ;
Of: course it's a - tough field- to
/ that
government; control, won't
in/ thafcbusipess;feat; guaranteed be> a specialist ihv For- one-reason
give us.
annual wage plan was one. of the every executive feels he-nob only
A. second, factor,,in getting; me
factory, that built ur. real; morale* pan improve; youn copyv.but' that
into public relations, advertising
his. approach is better
"the

•

ciple by-mentioning a
'
ica!s, principaL;businessi enterr
a "man,, now- Vice
President of
stead. of. facing the • real' problems
General Electric. In his early days prises, to a large extent, are-all
vicing; withr each oiher;;
turn pL today."
at' Schenectady* Bob wa^ striding
;
QUb a .pretty brochure. Having be¬ }) Another executive
highlighted
along* obviously in a- deep study,
come
intensely interested: in the ithiq thinking^fherv he/ said; "Diswhen
stopped
by
one
of- his

The
a

(irHia.wo^ Isr'

mar¬

of creating a. better economic

ness

'and, wathiifebnlyt a> decadejAmerr
story about

sold, my interest..
had

itC/test/men^/fichm;; Its"

keting:; division/.raise. their: salary

(4) His fears oL discriminatory»
pristine severity of ; climate i - Years. ; ago v mapagementr
the unadorned typed pages, would executives, learned howitOv market; ;(treatment,, of^ .unfairolay^l
be broken with at least one illus¬ products; how to: produce
ofis, and of cuts in his inthem/
centive pay^ are grounds
tration.
As you all
know; •the ;and?how to finance corporate op*
that

and

on the

around, and? as, a la§t- suryivor of
; the original five partners, I. then
;

take

ience could read if instead ofr 2%,

problems that are common
busted. By the time one employee /tp|labors ancb management.
had come to be 80, 1945, rolled
I will; illustrate- the third prin¬
gone;

Thursday, August 22, 1946.

audr. ies, and put them into the bust-*

connotingv- that?: 15 %, ofe the

(Continued from,page 1016);
wouid«

tan. n. u

called the modern form of report.
>The word: "modern"" incidentally;

A Grass Roots

"Business

ought," he said/ "to

these
..

objectives:-

Each

must

employee

stand that;

«.

-'! /J

•

-T

under¬

his

own

responsibilities^,

as, a-

management. executive,. to. -hia
own
employees, his own stock¬
holders and-his own customers;

JVolume 164

Number 4518
'••

•

.'v-'v

/.»!•>r-.:"

•,

•

•V--

v.; v,

:•

'*• L.

Progress in Federal labor
(Continued from page 1013)
Assembly as a young As¬
semblyman' in 1915,, Governor A1
Smith and Bob
Waigner and frank¬
lin Roosevelt and others
were

just

pioneering in the whole field
.Labor and Social
Legislation.
As

young

Assemblyman I had

jpriviiege of voting; for, some
those

progressive

measures,

measures

providing for safe and
healthful working conditions
in
lactones
the

and

mills

working

and

hours

limiting

for

women,

otecting children
against too

early employment and
prohibiting night work for women,
ibese

measures were the
begin¬
ning pf Labor: Code in
Law and

Administration

the great body of labor
legislation
enacted and administered in those

days is a monument to intelligent
public action in a representative
a

democratic

society.

I had the

privilege of voting in

and

took

with that
movement which

only to look at the record to
that industry,
tation and

see

ment

places for

the

of Labor,

remembered

workers

And it must

that

strong, intel¬

improved abundantly

iu r15 State of New York
that
time.

But

since

looks at the
sees that the be¬
Federal and social
legislation has had an enormous
supporting effect upon the legisla¬
record

one

too and

ginning

tion of New York State.
One finds
also that the
contribution of New
York State to the
Federal Gov¬
ernment and to the states
has been
a

better conception of the humane¬

ness and

practicability of legislat¬
ion
protecting the working peo¬
ple against the worst effects of
industrial exploitation.
I went to

Washington in 1919

member of the House of

Repre¬

sentatives from New. York Scate.
1 tried to
carry the torch of bet¬
ter labor

conditions, of better

so¬

cial conditions and sound
humanitarian progress in the
Congress of
the United States. The
example
.

•

^f?at

New

hav® been able

York

to do
always
Congress and

State

?4.1n lnJPressiVe in

although
in

has

the progress was slow
the first years there
gradually

began to be

an
understanding in
Congress that this kind of legisla¬

tion o^

Federal: basis

desir¬

was

able and
necessary in an expand¬

ing

industrialsocietystich

the

United

States represented.
I count it a
great privilege to
have been able to vote consistent¬
ly in the Congress of the United

States from
sound

1919

progressive

1946

labor

for all

legisla-

tion.

New York Pioneer in Labor

;

Legislation

Yes, there

was pioneering done
in the State of New
York, and a

philosophy developed under
Smith, Roosevelt arid Lehman. A
philosophy that the economic life
Of the State

well

the social

and

spiritual progress of the
munity rests upon the plain
ple. The prosperity of the

com¬

peo¬
com¬

mon

people will help to develop
the prosperity of the whole com¬

munity.
The

legislation

augurated
York

was

that

the

was

State

not accidental.

in¬

New
was

carefully
prepared ; and
well
thought out. First, by investiga¬
tion into the facts' and conditions

they were. Second, by wide pub¬
lic discussion of these facts, and

the

disabled

workers

went into the hands of receivers.

The

sympathetic administration
by the Labor Department of the
Workmen's Compensation Laws
had provided a fund whereby
permanent disabilities and death
claims were paid into a fund su¬
pervised by the State. The ruling
of the Department of Labor that
employers are liable for outstand¬
ing claims when an insurance
company
becomes bankrupt or
fails to pay has saved many a
home pf &e widow of n workmen

aimed not at

legislation
establishing a theory

correcting specific abuses
The
investigations

means

through
You

to. aged

know

persons

who need to

bor

and social laws for its
oWf*
One of the
interesting feu
suits of the educational effects of
Federal legislation and the con¬

citizens.

retire and who find
Federal basis Was possible,
the
small
insurance benefits a ferences
leading up to it has been
practical, was necessary and
boon, and you know the great improvement in
that if sincerely developed and priceless
state
too what the extension of our old labor
legislation all over the com%conscientiously
enforced
would
age pension system means to the try. Better
workmen's compertSSK
pull us out of the depression and
would lay the basis for a better, poor and aged who by the co¬ tion laws, better labor depart¬
operation of Federal and State
ments, better regulation of the
for a more secure, for a more re¬
Government plans and appropria¬
employment of young people, bet¬
warding industrial life for the
tions can now have a decent pro¬ ter
safety and health provision*
plain people of the United States
a

vision for

the

few years left to

them*
Wages and Hours Act

age and

Supreme Court held the NRA

un¬

they were proposed are.
constitutional. This law marked a
as the bedrock of our
great change, the beginning of a
industrial and political life.
The new
set of conditions in the work¬
National Recovery Act (I had the
ing life of people all over the
great satisfaction in voting for
United States. Up until that time
that) brought business and the New
York State and a number of
government and labor; together, to other
progressive states had laws
plan and to, carry out. the, revival
limiting the hours of the labor of
of production and distribution, of
women
seen

now

earned wages

becoming purchas¬

and

ing power and spent as a market
was the first "shot in the
arm"

days of depression.

our

developed
a

the minimum wage women could

had been up until that time no
general standard of hours or mini¬

basis of Federal appropriations

made available to the states many

tration in the labor field

sponsible for

was

re¬

large part of this
forward movement. The agitation
of the labor organization of all
types within these states was SB

strong

element

the

insuring

passage of wholesale modern local

legislation, but the basic Federal
legislation has made these a#-,
vances wise

Full

and necessary.

Employment Act

even

Immediate program be
paid in specific industries, there
unemployed on

relief for the

public welfare, and

viding for boards which might fix

Government in 1933

The Federal

Legislation and Federal Adminis¬

the grounds of health

smaller number of states had min¬
imum wage laws for women pro¬

which

The conclusion is inescap¬
able that the stimulus of Federal

years.

One

the time

all these have found their
way
into state legislation in
many lessf
progressive states in the last It

One of the most recent new <$&*

velopments in the field of social
legislation is the act known as the
Full

Employment Act. This act
aimed to develop programs whiefc
will be favorable to maintaining'

high levels Of production and high*

standard of wages prevail¬ levels of employment, It is bound
ing throughout the country. It is to be basic in the economic prog¬
financial and taxation possibilities.
true that in the highly organized ress and the social life, of the
None of us like to, think of relief
industries and labor unions by whole United States. Every state
but it was essential in those days.
collective bargaining had man¬ will be the;gainer from the ecu*There are' hundreds of thousands
aged to set up their own standards nomic knowledge and from the
in the United States who may
mum

of whom had exhausted their own

have

been

were

of Federal social

Civilian

own
people but there
millions of workers not cov¬

practical suggestion which will
spring from the Economic Boardt

ered

by such contracts and these

The State of New York will gain

for

plowed under in that

unhapoy time except for this piece

legislation. The
Corps was

their

protection
of some
basic regulation/
The
40 hour
week is now the usual picture in

and must cooperate in the studies
and in the planning of the pro¬

American

to adapt them to the needs of the
economic life of this state, ft*

needed

Conservation

part, and a most successful part
the relief program.
The ap¬
propriation and the development
of Public Works to give aid and
employment to the unemployed

the

life

everywhere,, and

the opportunity of working people
to improve their education, to par¬

of that board in such

gram

way

maintain our level of high produeticipate in the social and civic life tion, to maintain our wide and
of the community, to attend to varied opportunities for employ-,
other essential and wise piece of
their health, and to have whole- ment,
to utilize the knowledge
killed in the course of his em¬ social and labor legislation for
and the means of preventing mask
some recreation has been enorm¬
which I was proud to vote. The
ployment.
ously enhanced by this one act unemployment,^ to, assist us in the
Labor;
Eolations
Act
It was always a pride to me National
and by its eVnscientious and sym¬ development of training programs?
for our young people and for our
serving in the House of Represen¬ Which has dbne so much to give pathetic administration.
tatives for 20 years and in the security to the labor movement
The manufacturers and business veterans.
Uni.ed States Senate for 8 years was passed by Congress when it
We must not forget that intel¬
elements of New York State and
to be able to tell my colleagues became clear that the healthy de¬
other progressive states no longer ligent administration, sympathetic'
there of the great success and velopment of the labor movement
have legitimate claim that they administration/ competent admin**
and the right of workers to be
progress which we had made in
cannot compete successfully with istration is almost as necessary te
the State of New York in social represented by trade unions in
manufacturers in less progressive the protection of workmen as the
being
and labor legislation and adminis¬ collective bargaining was
At every level the
states
with lower
standards
of law itself.
tration.
With this practical ex¬ interfered with by prejudice and
state, as well as the Federal, the
selfishness. This was a memorable labor.and social protection.
perience in back of me in the
By virtue of this same wage and working people of this state ami
State of New York I was able to piece of labor legislation which I
hour act, child labor has prac¬ the political leaders must conceit
am proud to be associated with.
play an effective, some say a
trate on? maintaining ahpffective;
The Social Security Act was nec¬ tically been abolished in inter¬
leading part, in the upsurge of
competent
Labor
Department^
state industry which means the
the movement for social and labor essary and necessary on the Fed¬
good and fearless factory inspec¬
great manufacturing and distribu¬
legislation at the Federal level. eral level in order that all work¬
tion, faithful and sympathetic adU
tion industries.
But prior to 1933 only a little Fed¬ ers in all parts of the country
ministration
of
the
workmen'®
eral labor legislation had been should have the minimum protec¬
Believes In State Labor
compensation law, fair and intel¬
tion against loss of unemployment,
passed. Workmen's compensation
ligent handling of labor relations^
Legislation
for Federal employees injured in old age and other adversities.
and
conciliation be¬
These basic Federal laws make mediation
This is the kind of legislation
the course of their work, the Nortween
employers
and workers?.
ris-La Guardia anti-injunction act which would never have been de¬ possible a good development of
favorable State labor legislation The same is true on the Federal
which gave labor unions freedom veloped on a state basis because
level and a part of the contribu¬
for free action—these were all im¬ when developed on a small scale setting higher standards or par¬
tion of the workers of the State
ticular standards adapted to the
portant steps but until the great the costs would have been pro¬
of New York to the life of the
needs of a particular state. I be¬
depression of the early '30's there hibitive. But the economic and
other workers of the United States
lieve in the continuing develop¬
had not been the understanding social loss of the whole country
will lie in helping to secure goodf
ment of State labor legislation
of the great need of "rules of the without such provisions for some
and the working out of programs administration in Washington;; st$
game" in industrial life which stability of workers' income and
well as at home. We are citizen®
that will have the effect of meet¬
would
protect the workers in purchasing power was so great
of one nation, we love our state
that this pattern was clearly in¬ ing local problems by local laws
every part of the U. S. against the
but always with the basic Fed¬ and we are proud of it. We are
worst hazards that can come from dicated. This one law on the Fed¬
particularly proud of what has
eral level is probably the most eral legislation underneath as a
industrial exploitation.
been accomplished in pioneering
important
social
and
economic supporting economic standard. A for social arid labor
legislation but
Federal Labor Policy
legislation that this country has great progressive state like New we want to continue the basic
With 14,000,000 people out of ever seen. Members of our New YOrk in which great industrial
protections at the- Federal level
work in 1933, with the economy York State Federation of Labor wealth and activity exists must
without which further advance®
declining as a result of their loss served under Governor Roosevelt always be alert, alert to meet with in one state are
likely to be great¬
new
conditions and'
of purchasing power, With the suf¬ on an advisory commission on un¬ legislation,
ly handicapped.
new hazards and new needs which
ferings, physical as well as men¬ employment insurance which un¬
I have been proud to be a Sen¬
arise in the lives of our working
tal, of the families of men out of doubtedly

and to stimulate industry was an¬

developed

whole

the

work

conception in his mind, as well as

the

people.

laid the basis for the education of

or
fearing unemployment,
people of the U, S. and the
members of the Congress were
concentrating on the horrors of an
unregulated, unmodified, indus¬

trial situation which could lead to
such serious results.

third,- by framing of
but at

ruin

not

business, transpor¬ when insurance companies which
merchandising have in¬ had previously paid their claims

creased and

own.

of
the
most
important
imagination, presented the
pieces of Federal labor legislation
New York State but also for the programs with which we are fa¬
has been the so-called Hours and
strengthening and extension and miliar today and which although
Wages Act passed in 1937 after the
strong financing of the Depart¬ they seemed new and startling at

work

great

being associated

great

their

was

New York State Assembly not and that at the same time it would
only for the basic amendments to be a boom to business and to in¬
the Labor Law which provided dustry. And so Roosevelt, elected
safe, and decent, and healthful President in 1933 with great cour¬

ligent, sympathetic administration
labor and social legislation de¬
pioneer
pends upon a strong, conscientious,
your organization has
efficient administrative body.
In
so; heartily
endorsed in the State 4of
New those pioneering years, 1910-1920,
and in years immediately follow¬
J0™: Some of you will remem¬
ber that the
manufacturers of this ing we passed improved legisla¬
state when such
We developed the Worklegislation was tion.
being originally considered used mens
Compensation
Laws,
we
Jo make dire predictions that the strengthened and liberalized the
industries of New York State could benefits under those laws, we ex¬
not compete with the
industries of tended the coverage so that at
other states because
the labor and every step the individual worker
social legislation of our
state was was protected. New York State
!£ +muf?u above that of other is one of the places where the
parts of the country.
Well, one has great depression of '29 and '30 did
pride in

What

as has never been;
equalled
anywhere else in the world and

government and in

1037

out of work

are

fault

such

State

the

St*

•

who

fV-

JTHE COMMERCIAL & FINANCIAL CHRONICLE

was no

accident that Franklin

the

came

to be thought

ator from this state.

administration

the

State

people

of the United

States

in this much needed reform. Here

Department - of Labor will
long be the key to the discovery
of conditions that need correction

again New York's experience con¬

within the state and to the devis¬

tributed

ing

the

welfare

whole United States.

the

One of the

Roosevelt, the Governor of New greatest satisfactions of

York,

Sound

of programs
conditions.
I

ser¬

vice in government was

meet

when I

rose

of these coi*~

structive pieces of

legislation

damaging

proud, as I think you are,
the contribution made by the

help1

to speak or vote iifc

favor of every one

those cial

I have been'

grateful for your support and

offered

labor and) so¬
and against tBo

amendments

often*

by those who would de-'

feat their meaning.

and reports of the Factory Inves¬

leader to help the people of the

the op¬ State of New York and by its cit¬
portunity to vote for that Social izens acting in the Federal Gov¬
Security Legislation. Not only is ernment on behalf of sound basic

tigating Commission back in 1911

United States out of the horrors

the legislation of first importance

underlying social legislation at the

thought and in action in favor of

to the-economic life of the

wrongs,,

1915

State

gave

conditions

the

people

appraisal
and

needs

this

industrial
for reform

the

most; effective

and

hopeful

depression." His New York

ex¬

perience gave him the conviction

try but

that

social

and

labor

legislation

you

the lives

The
will

working people of this state

continue

leaders

coun¬

Federal level. This must continue

both state and Federal legislation

know what it means

at the same time that New York

and I shall

continues to improve its own

men

and

women

la-1

you

always be found with*

in these activities.

1038

THE

rities

Postwar Monetary Problems
the

(Continued from page 1013)
are purchased by the Reserve Sys¬
tem' in
following its policy of
stabilising rates on government

the present

Should the Reserve

debt-retirement

of the

result of

banking

institutions,
the possible effect of fluctuating
interest rates upon the financial

amount

that

securities

rate

position and the actions of these

limit

longer-term,

war

40%

383

153

this amount

dollars.

billion

came

dollars

from

taxes.

About $23.0 billion was otained by

might

hold.. These powers could be so borrowing, of which about $100
come
from the banking
task of the System then is two- applied as to leave banks ade¬ billion
including commercial
fold—to prevent inflationary ex¬ quate ability to take care of the system,
pansion of bank credit and at the credit needs of industry, com*- banks, Federal Reserve Banks,
and mutual savings banks.
same! time to assure reasonable merce, and agriculture.
holders is difficult to predict. The

stability of interest rates.
In

Situation

its Annual Report for

attempts were made in

finance to sell

war

as many secti-

and

expanding

the

war economy.

wide. differential between
short-term and long-term inter¬
The

ZZQ.

Possible Effects of Continuing*

* Present Policies

Continued
shift

ability of banks to

from

government securities
assets arid in particular
continuation
of, the policy; t>f

to other

maintaining^ ahort-term
rates

low

Interest:

levels

might well
expansion ,<*£

rates, however, encouraged result in further
expansion of bank credit because bank credit and further deciipe
The basic
it was possible for banks to sell in long-term rates.
short-term

securities

Federal

reason

for this is that the low'in¬

longer- terest rates on short-term securi¬
term issues bearing higher rates- ties provide an incentive to hold¬
of interest.
The new bank re¬ ers of.such securities, mainly cer¬
Banks

and

buy

created by sales of securi¬

serves

ties to the Reserve Banks

provid¬

ed the basis for credit expansion*

tificates, to sell them and use'the
proceeds
sues or1

buy

longer-term

is¬

expand their Sloans.: Since

of ten times the volume of such

there

sales.

demand for certificates at prevail¬

method

The

handling

the

loan drives also was a stimu¬

lus to war loan

expansion. Nonbank investors could sell previ¬

acquired issues

banks

and subscribe for new issues, thus

BILLIONS OF DOLLARS

such as life insurance companies.

est

ously

BANK DEPOSITS AND CURRENCY AND TOTAL NATIONAL PRODUCT

abnormal

war

While

Result of War Finance

treriiendous growth in bank

The

1945,

sale of Securities; but also to pro¬
vide- the increased money supply

Reserve

justments for savings institutions

only to help maintain an active
market/and facilitate the general

needed

Over

the

higher-

banks

maintenance of the
are the
finance and of poli¬

interest rates

amounted

govern¬

securities

ment

possiblevto others than have necessitated substantial ad¬

banks, it was necessary that banks
purchase'
substantial
amounts.
These purchases were needed not

nancing of the government's needs
during, the war.
The war cost
around 320 billion dollars; adding
other government -expenses and
increase in the Treasury's cash
balance, total funds raised by the
Treasury in the period from the
middle of 1940 to the end of 1945

that the
certain

short-term

amounts

hesses and investment

hold

system

of government securities

cies; adopted to facilitate the fi¬

pro¬

^ulatibn/Which

could be used to require

public debt widely distrib*
individuals,
busir

among

also

and

structure of

gram

others* tnen interest
rates would be subject to wide
fluctuations;
With $270 billions instruments of

uted

sug;- holdings

of the-Treasury, can be tem¬
porarily effective: rv* Solution of
the long-run- probl em* however,
can be assured only by giving the
Federal Reserve System additional

System re¬

fuse to; purchase government se¬
curities offered for. sale and not
-taxen

Reserve Board

and Policies

gested
a
number - of
measures
which might help S to ^ accomplish
these objectives..
Some, such as

securities,
v

Federal

Thursday, August 22, 1946

COMMERCIAL & FINANCIAL CHRONICLE

inadequate

outside

ing rates,; these certificates 'are
purchased by the Federal Reserve.
These
purchases
increase
cor¬

respondingly^the riash reserves
commer^al banks,: and on the
basis of these additional reserves
commercial banks

group are

helping to attain quotas.
Banks
able to make loans and to pur¬
during the drives had excess re¬
chase securities—4n other words,
serves
because deposits against
to expand bank credit—by prob¬
which- reserves
were
required
ably as much as 10 times the
were drawn down in the purchase
of

securities, while Treasury de¬
posits, against which no reserves

added

the

reserves.

Commercial banks with additional

in a position to bid
Government securi¬
ties away from nonbank investors,
who in turn try to replace these
securities by bidding against each
reserves

are

required;, increased.
This
in a reduc¬ longer-term

were

shift of funds resulted

banks

member

tion

amount

required

reserves.

result of these operations,

bank holdings

of government se¬
substantially

increased

curities

during drives. Between drives, as
deposits were reshifted and re¬
quired reserves increased, banks
securities

sufficient

sold

Federal

the

requirements. The
net result was a gradual expan¬
sion in bank holdings of govern¬
ment
securities
throughout the
war period.

higher

reserve

these

result

The

ments has been

tremendous

The holdings Of

individuals

rency

have

nesses

deposits and
and

increased

cur¬

busi-.

by nearly

Treasury

other high-grade bonds.
in
increasing the

prices and lowering the yields on
;

;

In view of the

•

large volume of
securities held by

government

banks, the process of credit ex¬
pansion and of increasing bond
prices can continue until certain
conditions

satisfied:

are

Federal
Reserve
the
outstanding
short-term securities; ;
(1)

The

holds ' all

ex¬

ings of the public whichf furnish
a
great potential for inflation.

results

such securities.

develop¬

pansion in the liquid asset hold¬

restricted

for

bonds

the

meet

Reserve

other
This

(2) Commercial

have
they

banks

made all of the loans that

willing to make and hold
all1 of the outstanding longerterm securities that are eligible
are

for them to

purchase;
(3) Nonbank investors

have

$100 billions to 2% times the pre¬
war level. The relation of deposits

sold

and currency to the annual value
of the total national product over

they are willing to sell; < * ;
(4) Market yields on longer-

the

past

Chart 1.

30 years is shown on
The ratio of the money

total product is now
about 80% compared with 70% or
less in the late 1930fs, a period of
to

supply

considerable unemployment and
unused resources,

1920

1930

1925

TOTAL NATIONAL PRODUCT FIGURES ARE ANNUAL FOR THE PERIOD 1815-1038,
AT ANNUAL RATES.

DEPOSIT AND CURRENCY FIGURES ARE

FOR JUNE 30,

1935

1940

tle

1945

MILLIONS

100

of government securities, or eight
times the prewar level. These can

*4;-:

and

<60

*3 r

V" ,i"

v-'

H ••"'t

:;'r'

J-

T<)TAL

i40

■

/ \

r, < i

>/:'V

■T.T 1,

■

LOiANS

AND INV ESTI rfENl *s

as 60\

:
1

1
1

•
-

■r'Mj

—-^r

1r.

rd:--i
19,6

1918

(

19201922

1924

been

rities encouraged

from' short-term

L<)ANJ

short-term secu¬

holders to shift

to long-term is¬

sues.

As long as the Reserve Sys¬

g 1926

111
,

•

tem

'M:

1928 U930

1932

g 1934

OTHER SECURITIES

stood

19361 19381

1940

1942

1944

1946

short-term
0

ing

ready
securities

to
at

purchase

prevail¬

ratesr these* rates could hot

rise.

W<« aaaaalinen at rat rtataai atttart trttta

finance

decline in long-term
rates.
Maintenance
of
a

...

1
* *-=

sell

order

purchase

longer-term securities.
The

expansion

that could

There

are

occur

of bank credit
by the time that

some

now

$50 billions

tem; commercial banks hold $20
billions of certificates and several
billion of short-term notes.
The

expansion

that

could

result

all the
loans that they are willing to
make and held all of the outstand¬
commercial

ing

banks made

longer-term

that

securities

eligible for them to purchase
might run also to huge figures.
Over $20 billion of eligible issues
now outstanding are not held by
banks; $30 billion more become
eligible in the next 8 years, arid
$23 billion in the 9 years following
that.
The amount of loans and
other investments banks may ac¬
are

quire is not possible to estimate.^
In practice the other two con¬
ditions are likely to be controlling.
Nonbank i n v estors, probably
would not be willing- to sell $o
commercial
banks
all
of the
,

growth in assets, bank earnings
increased substantially during the
war
and: in relation to capital
funds were at the highest level
on record during 1945.

interest

/—

■*1

level since

at the highest

the low rates -on

are

the past three decades are shown
on Chart 2.
As a result of the

has

iii

in¬

1930; Changes in bank assets over

Another result of "war

SECIJRIT ES

—I-]

•

have

banks

their holdings, of U, S.
Government securities by approx¬

imately $70 billion.
At the same
time, their loans have expanded

i'S

Commercial
creased

•

X
•

loans

make

banks

securities

short-term

of such securities outside the Sys¬

readily converted into cash as
as
the Federal
Reserve
:Banks stand.ready to buy them.
80

commercial

for

a point
longer profitable

currency,
individuals and busi¬
nesses have nearly a $100 billions

long

;;vf

declined to

have

where it is

all of the outstanding short-term
securities
would
be
staggering.

term securities and the rates pn

loans

the Reserve Banks have purchased

BANKS

.BILLIONS
>
100

that

securities

In addition 4g;rthe greatly ex¬
panded holdings of deposits and

AND THEREAFTER ARE SEMIANNUAL FIGURES SEASONALLY ADJUSTED
INCLUSIVE, AND JUNE 30 AND DECEMBER 31, THEREAFTER.

LOANS AND INVESTMENTS OF MEMBER

the

period of active business and full
employment.

INCLUSIVE,

1015-1022.

50%

over

"and with a lit¬
in the
1920's, a

all

niinpd

The longer-term

rates de-

These low long-term

rates

that
not
willing to sell unless they could
not only: replace the securities
longer-term eligible securities
they now hold.
They would
be

sold with other securities or
but also invest

funds.

Since

the Victory Loan,

however, the Treasury
no

long-term

loans

currently^accruirig'

bonds,

has issued

and only a

>
■

I'*-."****

Volume

Number 4518

164

' t * 'i'

-'Vl'''\'iT

j^A»}.y0

•*n\

moderate increase has taken

-y.-r

place panies^ and other financial insti¬

public

these; conditions

prevail,

■

ii:"

•.*"*>

;; A

>* >

•

'\r j? * i-""

i'■ ? v '* jr

the

confi¬

dence in the credit of the govern¬

which

retiring

Federal

Re¬

and

ficult

term, bank eligible governments
by nonbank investors may not be
large. If new securities and loans

itself.;; If this occurred and
the public tried to dump its hold¬

of
government
securities
and
while they are doing this they are

ities

ings

less

banks

should

real

become available in sig¬
nificant volume, however, such
; sales would increase. The System
would be faced with the dilemma
of either adding to its

securities in

order to purchase common stocks,

of reduced.

interest fates rise.
If the public
finds other uses for its funds now

lems for/the Treasury in refund¬

would

sures

increased instead

These price declines
difficult prob¬

would also

create

ing its maturing and called secu¬
rities.. It should be recognized

thp amounts, that might need to that the Federal Government debt
be absorbed by the Reserve Sys-r now^comprise ; twp-thirds of the
tein could be tremendous.
*:1'
total public
and private debt,
^ JThere Is no basis for estimating whereas in 1940' it" was
only one.

the

point

banks

which

commercial

longer would consider
it;profitable" to sell Joiy-yieldiiig,
no

short-tepn securities in order
xnhke loans

purchase higher^

yielding, I longer-term
That

point

when

would

securities.

commercial

reached

banks

additional

sell

•

amounts of short securities in

or¬

estate, and commodities, the der to buy long-term ones. It is
effect of restrictive policies would
possible,
however,
that many
be
the exact opposite of what banks lir order to
restpre earnings
was intended.
Inflationary pres¬ may eventually purchase addi¬

portfolio
and thus permitting further credit
expansion or of letting short-term

invested in government securities,

inclined

quarter of a total less than half
large as that now-outstanding.

The

: possible
consequences
of
changes in the value of that .debt

structure
the

difficult to

are

assess

light of existing knowledge.

Old tools must be used with great
care,

if at all.

group
felt
that
the
higher
rate
or
the
higher yield ; was

Changed

Situation Since the

tional

amounts

curities.

fact

holdings of bonds

long-term
member

se¬

bank

are still increas¬

ing moderately.

balanced

Possible

fkS'

Effects of Raising

Federal

use of

the

Interest Rates

■>

The

Reserve

could

existing powers and instru¬
place some restrictions on

ments

further credit expansion. It could
curtail

its

buying of short-term

government securities. This would

inevitably result in
-term

;

interest

rise in short¬

rates

and; would,

therefore, remove the inducement
to bank credit expansion now. re¬
sulting from the margin between
short-term and long-term rates.

However,' ft if difficult to know
bow far .the rise" in rates -would
have to go -to remove that induce>

result of the decline in

war

reserve

of the

higher level Of individual

Government
balanced

incomes the Federal
has

now

almost

budget.

Consequently,
for further
bank Credit expansion to supply
the- Treasury with funds.

there is

more, need

The second important develop¬

measure

would have to be

accom¬

from

selling

banks
new
on

ones

bank

existing

order

issues to
purchase the

and also by restrictions

buying to replace retired

issues. r

;

Selective

instruments of credit

veloped imthe past decade in the
case;ot^security loansand eon-

banks

in- order

subscribe for

sumer;

the

kind

credit offer

newly

de¬

of re¬
stricting
particular
speculative
situations * withoutredqeiog the
a

means

onesJahd it alsh removed; the
periodic large-scale releases ' of suj^ly
credit in general or
>
Consequences, of spch a 'remedy bank reserves by the shift of de¬ raising interest rates. Margin re¬
might be more harmful tham the posits to reserve-exempt war loan quirements on security5 loans have
disease. • The
System certainly accounts. .-^ • *. * %
been raised to 100% and thus the
would not want to go so far as to
The third important develop¬ use of credit to feed stock market
refuse to purchase any short-term
ment has been the debt retire¬ speculation has been prohibited.
securities. Banks wishing to make ment program of the
Treasury The effectiveness of this instru¬
new.

•

loans

to meet losses of reserves

funded.

some

accommodation.

Commercial banks hold

nearly" half of these issues and
:

Federal

third

Reserve

them.

short-term

rates

Banks
Thus

about
rise

would

increase

the

profits of banks, which are
already at high levels.
This in¬
crease in bank profits would be
largely at' the expense of the
government,
which
in
effect
means the taxpayer.
In the past
in

increases

been
those

largely

interest

individuals

rates

cases

the

have

the

expense, of
and businesses

who wanted to borrow.
restrictive

In those
effect

higher rates

was likely to be
greater- than it >would be if it
worked only through the
gov¬

ernment securities market.
.

basic commod¬

estate.

asked

excessive

civilian

not

1942

make

accumulation

goods

consumer

examination authorities

and

check

X;L- Finally, an increase in interest
rates might lead to a reduction
in the prices of marketable gov¬

which has been made possible by
use of large cash balances ac¬

the

duced

the

war

period has slackened

con¬

been

further'

decline

long-term; interest rates.

the situation should change
there are various measures

case

again

the

basic

ernment

securities.

If these

de¬

sharp, they might
weaken public confidence in the
solvency of banks, insurance com¬
were

change.

factors in the situation

little

But

these

measures

nothing in themselves to

correct the basic difficulties. Some
of these

transitory

measures are:

Continuation of the debt

re¬

tirement program of the
Treasury,

spec¬

would

induce

commercial

banks

group to retain their present

possible

the

(1) A primary reserve plan
(2) A secondary reserve plan
(3) A bond limitation plan

this

rthree if proposals
have sion and deposit growth.
similarities and also im-1
This plan has the advantage of
portant differences. In each case permitting banks to retain subadoption would require legislation, stantial holdings of short-term
which
should
permit
consider- government securities/ but limitable administrative flexibility, be- ing their ability to sell these to
cause

.T,,......„

of the wide differences be-

the Reserve Banks in order to
and make other loans and investments,
been criticized because it
necessary that they apply to all would
purportedly require the
commercial banks, not alone to
banking system to increase holdmember banks qf the Federal Re- ings; of X government
securities

individual

serve

banks

banks. It would also be it-has

System,

(f every time there was an

The primary reserve

plait—This
plan is simply a further increase
in reserve.,.requirements, accompahied by Federal Reserve purchases of * securities
amount to

in sufficient

keep short-term inter-

est rates from

rising. This amount

would probably correspond close-

Iy to the increase in requirements,
Any increase probably should be

be, permanently
appropriate authority

power

pointed
authority
such
credits
in
a
agency does not mean
of

restrictions will

out that the

control

responsible
that severe

posed.

ket for interbank flows of funds.
The proposal would
duce the earnings of

banks

and

increase

tend to re¬
commercia1

those

of the

necessarily be im¬

At first there

are

cessive and rapid expansion needs
be checked.
The very exist¬

This

further credit expan¬

mean

means

It should be

would

plan).

(Seltzer

deposits

expanding

against

requirements

These

many

Reserve Banks. If this plan were
always adopted it might be desirable for
temporary nature which might be some
adjustments
in
existing the Reserve Banks to have power
attempted to effect some restric¬ practices needed to conform to to pay some interest on reserve
tion on further bank credit ex¬ minimum
uniform requirements, balances, if bank earnings should
pansion. Tt is not impossible that but provisions can and should be be
seriously affected.
these measures would suffice until broad and
loose, except when ex¬
Legislation
authorizing
this
of

clines

ment

siderably^ and since April there vesting
has

equal

perecentage of net demand
deposits, This percentage might
be placed initially at a level that

done

stock market

that

the

certificates

It holdings of short-term govern¬
that more-;.could be ment
securities—probably around
through bank examination 25 or 30% of net demand deposits
and
supervision than has ever would be sufficient after the debt
been attempted at any time in the retirement
program is completed.

discourage further purchases of
profit that
might be obtained from shifting vested in an
long-term issues, but Federal Re¬
for use as the situation may re¬ serve support would keep inter¬
from
short-term
to
long-term
quire.' Consideration should also est rates from rising above the
issues.
be given to fhe possible desira¬ established
pattern^ It would cor¬
Temporary Measures
bility of smiiar controls over other respond to present banking prac¬
In view of these current de¬ types of credit to which such a tices, be relatively simple to op¬
velopments, the rapid expansion control mechanism is applicable, erate, and cause no confusion in
in bank credit that characterized such as real estate loans.
effecting adj ustments in the mar¬
somewhat

and

ified

bank loans for these purposes.

of controlling applied gradually. To assure, adespeculation is blunt¬ quate powers to absorb a large
The question then would be at cumulated from the
Victory Loan.5 ed somewhat by the existence of portion of short-term securities
held by banks, the law should au¬
what rates would purchases be About
$13 billion of maturing is¬ the large supply of cash with
made.
sues
have been retired to .date. which the public can speculate thorize an increase to twice the
It is not possible to know how More than
three-fourths of these without borrowing. A stock mar¬ present statutory maximum.
mtich of a rise in interest rates were held
The principal effects of this
by commercial banks ket boom based entirely on cash
would have to occur to stop sales and Federal Reserve
Banks.
The buying, however, would not en¬ measure would be (1) to shift a
to*- the
Reserve
System.
It
is fetiremfent of commercial bank tail a subsequent liquidarion of certain amount of earning assets
doubtful whether a rise in rates
holdings by drawing on war loan credit, ivhich has been the most from commercial banks to Feder¬
would
discourage
banks
from deposits reduces bank assets and disastrous aspect of most specula¬ al Reserve Banks, and (2) to re¬
selling government securities in liabilities but has no effect on the tive bubbles in the past.
Con¬ duce the ratio of multiple credit
order to make private loans or to reserve
position of banks in gen¬ sumer credit likewise can be reg¬ expnsion on the basis of a given
invest in corporate bonds, if at¬ eral
ulated so as to reduce the wide amount
of reserves.
It would,
Retirement of Federal Re¬
tractive loans
and
investments serve
holdings, however, reduces swings to which it is subject and therefor, reduce the amount of
bank reserves and has put some to keep consumer demands closer short-term securities available to
were available.
The major effect of a rise in pressure on banks to sell securi¬ to the limits of available supplies. sell to the Reserve Banks and also
the potential credit ex¬
shbrt-term interest rates would ties to the Reserve Banks.
The power to control stock mar¬ reduce
be to increase the interest cost of
The sharp decline in yields on ket loans is well established in pansion on the basis of any re¬
serves thus created.
Treasury borrowing.
Most of long-term and medium-term
gov¬ law, but that to control consumer
the.$60 odd billions of government ernment securities in 1945 and credit is based upon a wartime
This measure could be applied
securities
maturing within the early 1946 narrowed the spread in Executive Order which will ex¬ to put the banks under pressure
next year will have to
be re- the interest rate structure and re¬ pire.
It would seem desirable to liquidate securities and thus
or

would need

for

real

were

groups of

Selective Credit Controls

•

control

loan, drives... This has, removed the; impetus on the part of
investors to shift - securities to

loans

Iween

ment has been the discontinuance
war

of merchandise

past.

require¬

expenditures and an increase 1 in panied by provisions which would
government receipts* growing out discoitrage
nonbank
investors
and business

exercise

Generally bank examiners, Subsequently
the
percentage
loan officers of banks,
should be sufficiently high to as¬
ments
at
central
reserve
city' are inclined to base their judg¬ sure for such securities a com¬
banks would have similar effects. ments on last year's statement of
mercial
bank
demand
large
This is the only remaining power the
individual borrower, not at
enough to maintain present rates
under existing law to raise re¬ the
possibility that next year's without
Federal
Reserve
pur¬
serve requirements. ' Since these
statements for a whole group of
chases. To facilitate transition to
banks have no excess reserve they borrowers may not be so good.
the new plan, as well as regular
would have to liquidate securities
adjustments of bank positions re¬
to meet the increase. The Reserve Proposals for Additional Controls
quired
by
interbank
flows
of
Banks would have to : purchase
There are a number of methods
funds, banks should be permitted
securities in order to supply the of a more fundamental nature that
to hold cash
(including reserve
additional reserves and to main¬ might be adopted to restrict fur¬
balances) as secondary reserves in
tain interest rates.
There would ther credit expansion and conse¬
place of bills and certificates. This
be, however, at least for a while, quent declines in long-term inter¬ feature is essential to make the
some pressure on the market. This
est rates without raising
shortplan effective as a limitation on
pressure might be a useful supple¬ term rates. Most of these are var¬
bank credit expansion; ^Otherwise
ment to a program for refunding iations of one
or
the other or
it would be necessary for the
bank-held maturing issues into combinations of three basic plans.
Treasury to supply bills or cer¬
These three plans are designated
non-bank held Issues.
tificates to banks needing them
3. Additional
issues
of long- by the following terms:
to meet their secondary reserve
-

Increase in

End of War
larger
risk.
The risk would be not only
Certain new developments since
the credit risk that is involved
In the end 61 the war have made the
loans and non-government securi¬
problem ^immediately >less acute*
ties but the risk of price decline The most important pf thesedcr-~ term securities
might be sold to
that is involved in all
securities,
velopments has been the cessation nonbank investors, while bankof expansion in the public debt. held issues were retired.
This
:

Just

agriculture

ment

of government

1039

deposits and : in
are more dif¬ of
classifying
through direct banks for reserve purposes.
a further reduction in reserves. To
measures.
In; coming
months
The
secondary
reserve
plan
maintain their reserve positions there
may be great demands for would establish a
required sec¬
banks have to liquidate holdings loans to
speculate in inventories ondary reserve of Treasury bills

holdings, would bring about

serve

amount of further sales of longer-

;

THE COMMERCIAL & FINANCIAL CHRONICLE

in the available supply of corpo-. tutions, which hold
large amounts
ratd
securities,
business
loans, of government
securities, and
and real estate mortgages. As long might even shake
as*

^ t

■'

action

might

also

include

for amending

pro¬

various as¬
ence of powers to impose restric¬
pects of the present requirements,
tions may be sufficient to fore¬ such as
permission to count vault
stall the development of excesses. cash
and greater administrative
> Controls
over
various
other flexibility in imposing different
types of bank loans to business requirements on different types
visions

increase
in ^eposits resulting from "expanding - loans. This would be
avoided in practice, because in the
? absence
bf . excess^ primary reserves banks would xhave to sell
long-term issues out of their portfolios or borrow from the Reserve Banks in order to make possible an expansion in loans. The
plan. would establish short-term
government^ securities in a preferred market position. An lmportant disadvantage of this plan
that

the

double

set

reserve

complicate
adjustments necessary in the case
would

requirements

interbank flows

of funds.

The bond limitation plan

would

commercial bank's

hold¬

limit

ings of bonds to no more than an

corresponding'

amount

approxi¬

mately to savings deposits and
capital accounts plus some per¬
centage of its net demand de¬
posits. In a sense this plan would
merely extend the policy pursued
during the war of restricting bank
investment in long-term Treasury
bonds.

the

outset

these per¬

centages might be established at
levels that would prevent com¬
mercial
banks
from
adding to
their present holdings of
an

average

of about 50%

bonds—
of net

demand deposits for all commer¬
cial banks.
Eventually the per¬
low to

assure

for

demand

ment

be
sufficiently
commercial bank
short-term Govern¬

should

centages

securities

large

enough

present rates without
Federal Reserve purchases.
maintain

This limitation should apply to
bonds, which might; be de¬

all

fined

all single payment mar¬
a final

securities having

ketable

maturity of; imore than ;One year

might be more
It should cover

at time of issue, or
limited

in scope.

obligations of State and local gov¬
ernments and of corporations, as
as those of the United States
Government.
Otherwise
United

well

States bonds would have a

disad¬

vantageous market position.

Bonds

within
five

year

perhaps within

of maturity might be
from the limitation, but

years

exempt

such exemption would cause

(Continued

on page

1040)

sud-

;

1040

THE COMMERCIAL & FINANCIAL CHRONICLE

Postwar Monetary
Problems anil Aims
•

•

"yV';.v:s

■.

(Continued from

J*'den

adjustments, in

and

■

Taking Conservative
View of Permissive Incorporation

1039)V

page

market

the

banking position

large issues

came out

from under

the'limitation.
This measure would not restrict
bank lending activities and might

'The

encourage them, k It would
leave the various sectors of the

short-term

market

private

—

Commercial

York

even

8, N.

Withheld

and. Financial

The

before dt

come

io$

We'oppose

the admission/of corporations to membership in i the;
the belief that the
be neither in the
public interest nor in the interest of the members of the Exchange.
i

To the public, the matter of liability is important. It is argued by the
advocates of incorporation that in the fact of possible failure, a firm
exhausts its resources so that on collapse additional assets upon which
the creditors may draw, to satisfy their claims are' non-existent. But

Chronicle," 25 Park Place, New
submitting comments will be

it has been known that
many
the past by the addition of

those

firms have been saved from failure in
supplementary capital by the general part¬
ners just because of the unlimited liability rule of the partnership.
Knowing in advance their other resources would be tapped on the
failure of their firm, the partners did everything possible to prevent

BROKER No. 8

The type of

jbasis.

proposition should the question
%

New York Stock Exchange. We base our stand on
admission of corporations to membership would

request.

government

names

a
comparable
Adjustments
of
reserve
positions between banks would
—

the

BROKER No. 13

V
;
(Continued from page 1007)
the matter, it will be
glad, io print the ; views of members of the
Exchange and of the partners with whom they are associated on the
question.
All communications should be addressed to the Editor,

down

vote.

■

and

turn

NYSE Firms

Thursday, August 22, 194fj

business is probably different from that of any
house on the "Street." We have no customers. We
our

other brokerage
the worst from happening.
act entirely on our own account. We
buy and sell for a number of
We are also inclined to doubt the tax advantages claimed for in¬
particularly complicated large institutions and specialize in a limited number of securities.
by this plan, although some re¬ We can see no reason
corporation by its supporters.»; In the first place, with incorporation
why the corporate type of organization should' the
ductions in bond portfolios might be denied to those
problem of double taxation is with us. Earnings are taxed even
who want to avail themselves of it but the
before they are distributed and, in the second place; the building of
be necessary if banks lost de¬
argument that incorporation favors capital formation can have no
reserves and surplus would be subject to more regulations and in¬
posits, particularly time deposits
meaning for us because we have adequate capital.
and increases would be
terpretations by officials of the Bureau of Internal Revenue. Nor do
permis¬
we feel that the
sible ; incase of additions to decorporate structure makes for continuity of capital.
BROKER No. 9
The corporation like the partnership can be dissolved. ; In the event
■; posits. It would not restrict banks
The word permissive as used in connection .with the issue of of the death of the owner of a
in. shifting from\ short-term se¬
large block* of common stock, the
curities Into loans, as would the permissive incorporation is a misleading term. As experience has executor of the estate might have a very different idea as to what
secondary reserve plan, although demonstrated so many times, anything permissive usually ends up might be best for the firm from what the Stock Exchange, as in¬
by lowering the amounts of bonds by becoming mandatory. If incorporation is made permissible, then dicated by its restrictions on corporate membership; or the firm itself
.banks could hold, the authorities even" the New York Stock Exchange might, in time, find itself obliged might think.
.could force retirement of bonds, to incorporate and that would be a terrible mistake. Incorporation
exposes the entire brokerage business to the actions of regulatory
rather than short-term
securities,
bodies and to the influence of court decisions and there is no
to offset any loan expansion.
telling
what might develop once the corporate form of
organization takes
•
Any •. ,iOf these various plans
hot

established, be fairly
maintained, while tradi-

once

,.rigidly
tional

•

Federal

Reserve

open-

market and discount rate policies

relied upon for current pol-

were

l icy measures.

Alternatively these
schemes could be flexible in

new

Observations

hold.

could,

their

application,

ments

and

with

require¬

limitations

being va¬
ried as bank credit and monetary
developments and prospects might
justify or require.
Conclusion

"War has brought about drastic
changes in the banking and money

market

structure.

effective

There

limitations

are

the

*,J

"" '.Ik

-•/

.»

•** '• 'w

> ;

1 '

,'r

11-

(Continued from page 1009)

The advocates of incorporation say it would bring more business
Exchange. I claim it would not. The belief that
I
incorporation would increase the demand for seats in the Exchange

ROME, Aug. 19—"The Dalmation Islands, the Bahnation coast*
as well as the coasts of
Montenegro and Albania are seen being for¬
tified with permanent emplacements." ...
is, I think, wholly illusory. At best, there would be only a substitu¬
tion of a new member for an old arid the effect of this
NANKING, CHINA, Aug. 19—"Chinese Reds Declare War 'to the
swapping of
places would be only temporary. Some new members might bring Finish.' Yenan orders its 130,000,000 followers to mobilize for fulladditional business to the Exchange. Others
scale action."
'
conceivably would not.
A balance in the amount of business transacted would be hit which
MOSCOW, Aug. 19—"The Moscow radio reports that British"
would not be much, if any, different from that which prevails at the
troops have occupied two towns in Iraq; where the largest refineries
present time# A gain would offset a loss, so to speak, and there of the Anglo-Iranian Oil Company are
located, charging that such
would be no change.
movement of British troops is 'creating a war danger in the Mid¬
I do not like the
dle East,' "..,
implications of the limited liability of the cor¬
poration: In our business, we feel that our capital is merely our first
>. PARIS,
Aug. 18—"It is revealed that Russia during the first
line of defense. We have been doing business for ,75 years and our Armistice
year has extracted from Rumania 'booty' and taken goods
capital has at times been as much as $5,000,000. We have conducted on the excuse of "restitution of looted property,' to a value exceeding
our affairs in a most conservative fashion and we have
voluntarily those openly taken as reparations." ..,
to the floor of the

...

imposed restrictions on ourselves more severe than those which the
BUCHAREST, Aug. 10—"The arrest and detention incommuni¬
might regulatory bodies have fastened upon us.
We like to feel that cado of Rumanian
employees of U. S. missions here; has been vigor¬
se¬ others—just
like ourselves—are liable to the full extent of all
ously protested by the United States Government." .
Utilization possessions for transactions that are entered into.
Some of the smaller

-amounts of bank credit that

be diverted from government
curities to other

uses.

traditional
instruments
of houses want incorporation because
they think that incorporation will
credit control would result in up¬
help them to build up'capital. We think it is not building up the
setting the government securities financial integrity of the
industry to rely on capital accumulation

market which has

come to
occupy
dominant position in the finan¬
cial
structure
of
the
economy.
.This is not alone a problem of
a

through the rather devious device of tax avoidance, a practice which
PARIS, Aug. 15—"Western Allies Fight Soviet on Danube trade
the Bureau of Internal Revenue is certain to frown upon, particularly control.
Byrnes opposes Nazi-type encirclement by another
.

where companies did not regularly set aside funds out of

cases

earnings for caiptal purposes

are

brokers' brokers and

such feel that

must be evolved for coping with it.

i-'V';/!

..J;,,..,

;

/ '

have

partic¬

ular interest in incorporation one way or the other.

Really, we have
given no thought,at all to the question. For us, the matter is- of no
importance whatsoever.
i •*
itr **

Abbott Laboratories
Stock Subscribed

The

are

owners

close to

one

(1) "Great Britain is engaged upon a slave trade in which
Iranian girls are kidnapped in Baluchistan and sold in India, and a
similar trade takes place in all territories under British control."
(2) "Ui S. Government circles and the business world look upon
ppe of^ the? $nost iippprtant steps to world dominion,." - , -

ChiqgC§;
(3)

BROKER No. 11
■

Excerpts from Recent Russian Official Radio Broadcasts:

BROKER No. 10
We

Power."

partnerships.

dealing with the current inflation¬
ary threat, which must be largely
controlled. by other means, but is
d long-term ; one.
New
means

CALCUTTA, INDIA, Aug. 17—"The British army, with armored
cars, called in to quell Moslem-Hindu fratricidal warfare in which
2,000 have been slain or injured thus far."
;

of this business prefer the partnership. We partners
we think this intimate
relationship

another here and

"Vickers, the British armament company, is helping Gen.
Many cabinet members are di¬
and are personally benefitting

Franco build up his Fascist army.
rectors of the armament concern,

therefrom."

would be

destroyed by incorporation. The larger organizations might
incorporation and if the issue is decided affirmatively by the
subscribed
Moscow's Motivation
weight these organizations can throw on the-matter, most of the in¬
169,991 addi¬
tional shares offered them at
What possible motive can the Soviet have for these studied and
$60 dustry Will probably move along in that path because the small
a
share, the underwriting group houses tend to follow the lead of the big fellows. Because of the persistent provocations of her former Allies from the West?
Does
unlimited liability rule, a
headed> by A. G. Becker &
partnership must watch its capital care¬ she want War, either with or without possessing the atomic bomb?
Co.,
Inc., reported Aug. 15.
The re¬ fully. Being a small firm, we have to watch our money very care¬
The only possible explanation—based
on
the premise that
maining shares have been sold to fully but we think that's a good thing.
Russia does hot now want another war any more than do we—is
Abbott employees at the
subscrip¬
that her conduct is intelligently geared to the end of peacefully get¬
tion price.
Proceeds will be used
BROKER No. 12
ting us completely out of Europe. By befuddling and delaying the
for redemption of the
corpora¬
The Stock Exchange has held
United Nations meeting and building up the public's disillusionment
up to its members the ideal of
tion's outstanding 30,000 shares of
always acting in the public interest. I don't see how incorporation therewith; and by transforming Foreign Ministers' meetings' and
4% preferred stock and to in¬ furthers
this ideal. It is the unlimited liability rule of the partnership Peace Conferences into filibusters or diplomatic impasses; Russian
crease working
capital.,
which gives the customers the ultimate in
protection. -The zeal with diplomacy, will be designed to bring about the American public's
which a few of the larger firms are
advocating incorporation make discouragement with, and disgust for, the entire Continental scene; and
me suspicious not
only of them but of the whole issue of incorpora¬ our consequent relinquishment of all interest therein to the Kremlin.
Clayton in State Dept. Post tion. This is not the first time the question of incorporation has come This explanation would perfectly account for the activation of Yugo¬
The nomination of William L. up. Apparently, soneone, has something to, gain from incorporation. slav aggressiveness while a Trieste settlement is still brewing.:
Holders

stock

common,

want

Abbott $ Laboratories
for $166,068 of the

•

>£•; ,■

.Clayton heretofore Assistant
retary

created

tary of
.

State

the

newly

position of Under Secre¬
State for Economic Af¬

fairs, which
ate

was

sent to the Sen¬

Aug. 1 by President Tru¬
man, received the confirmation of
on

the Senate the following
day.
In
making the nomination the Asso¬
ciated Press reported from Wash¬

ington
man

his

said

new

Aug.
Mr.

1, that Mr. Tru¬

Clayton's duties in

title will be the

those he has

been

same

discharging

Assistant Secretary of State.
creation

the

second

Under-Secretary in
Department, it is added, is in
ognition
work

the

vastly

increased

department

economic field.

rec¬

„•:.••■

the
V

„

'•

■■■•'■

■

- ■

•"

■»

•

-.J

•

■

••;

tion.

obligations down to others.

had

some

Stalin and

transaction in process

with this

corporation when the reverse took place, we might easily
find ourselves in the position of
having to make good with* a cus¬
tomer without the possibility of ever
recovering our money from the
assets of the corporation which would be
oligated only to the extent
of its investment to pay off its indebtedness.
The corporate form of

organization

might

very

well

make

"suckers"

Exchange members who prefer to do business
A

large corporation doing

out

on a

those

Indicative of the public's

feeling in this country, is the conversion thereto of Administration
left-wing "liberals" who
are

Stock

partnership basis.

underwriting business, for instance,

Napoleon

great popular swing to antirRussian

now are more

vehemently anti-Soviet than

the rank-and-file of their fellow-citizens.
One of these individuals—an original member of

Brain Trust and

expounding

the

State Department

interesting

the Roosevelt

high policy-maker—is privately

hypothesis

that

execution

counterpart

Stalin's

could pass on the onus of its mis
judgments or hi luck to the brokers

Mikhailovitch

carrying

Napoleon's killing of the Duke of Enghien—that the recent slaying

on a more conservative

enterprise in partnership form.

If it did turn out to be that
incorporation increased the number

The

position
the State

Our firm, for one, wdiild hesitate to: do business with a
corpora¬ ;,?!
In the event of a
reverse* a corporation would merely pass its

Sec¬

really active Exchange members, then in

quiet market—such

has happened to prevail on numerous occasions
recently—where the
volume of trading is
light, competition for available business would

become extremely severe. I venture to
say that not only are we in this
firm opposed to permissive
incorporation but the entire industry will

of the
of

historically

Yugoslavian

Russian

may

prove

to f be

the

to have epochally marked the

climax

He holds that although the decline will be

ascendancy.

long-drawn out, already several millions of Slavs have thereby be¬
come

antagonized, beginning a long-term tide of resentment well¬
against Moscow domination.

ing

out

ciond

iin

aorairtcf

f«nvt

Lnpl 9

But how long before the people

THE COMMERCIAL & FINANCIAL CHRONICLE

,Volume 164 - Number 4518

lieve, than
Union.;.;"': '

Government and Labor
(Continued from

page

the great power and

1013)

unions in anything .but a free so¬

ciety. I hope very earnestly that
the lesson has not been lost upon
its

heact the

very
first onslaught upon the
freedom of man was
directed

against his right to bargain col¬

lectively;
.".Vv,,Vv:':h

■

eral

For

the

great assets

that

fact

of New York

State

our

includes

among

its

body of organized

labor which has strikingly demon¬
strated that it is mature, progres¬
sive and responsible.
There is

Has Organized Labor Become Too

of recent years.

Powerful?

New.-York

We have many people today in
this country who say that organ¬

ized labor has become too

ful.

them

have

people,

power¬

some

unquestionably sincere, who

record

for

pre-eminent.

Taking the twelve
leading industrial States and com¬
paring the amount of time lost as

in the world. The
argument that is most commonly
heard is this: that labor unions,

period. Curing the
years 1940 to 1942, before my ad¬
ministration came to office, New

having securely established their
fundamental rights, must become

York

labor's

argument

lightly.

interest
this
be
dismissed

own

cannot

The

right of labor to
organize, the right to strike—these
are, beyond all question, funda¬
mental human rights.
But rights
the

and

responsibility

not to
rights to the injury
of others go hand in hand.
We
abuse

those

treasure

fundamental right of

our

free speech. But that right does
not entitle a man to slander his

fvneighboiv

.y--

The right to bear arms is;
guar¬
anteed in our Constitution. But

'None of the other

industrial States has ; as

good a record as ours.

the

entire

not first but in "fourth

was

But, beginning in
1943
when the present State adminis¬
tration took office, and continuing
thereafter, the record was so good
as
to lift our average for the
whole period to,the best in the
place.

entire United States.

That is an achievement of which
all

you

here

may

justly

proud and I think you will permit
me as Governor of
the State to

share with you a pardonable pride
in that record.
It is a record
which I consider

high testimo¬
nial to the labor policy that has
guided your present S(tate admin¬
istration;
That
policy may be
stated as follows: A maximum of
a

it does not entitle a man to shoot
his neighbor's cows or chickens.

voluntary mediatiori and arbitra¬

ment

does

not

entitle

even

him

exercise his

right in such a way
as to endanger the life or
prop¬
erty of an innocent bystander,
Unfortunately, the right to strike

lis sometimes used so that it does
endanger or injure the innocent
bystander. I know full well that
stubborn

grasping employers

often aggravate situations beyond
the bursting point.
1 have ad¬

dressed myself to them on other
occasions.»The difficulty is that
too often, the distinctions between
labor unions are brushed aside
and all unions must stand in the
dock of

tion

and

minimum

interference

sion.

Govern¬

and

We in

State Government

your

have
had
complete
confidence
that in the overwhelming maj or-

ity .of cases the leaders of both
labor and management had the
ability to bargain peacefully and
to adjust their differences with¬
out resort to strikes and violence.

have

now

record of results

that

policy and the
justifies our confidence.

record
,

Opposes Arbitrary Government
Interference in Labor Disputes
It

arbitrarily injecting itself into
labor disputes, the inevitable re¬
sult is to weaken or destroy the

the

carries

seeds

civil

processes

employed by
few but which injure the many.

gaining.

We have

and

certain

tactics

are

learned in these

times

that

un¬

unprincipled

set

collective bar¬
It is a waste of time to
of

free

machinery for mediation

arbitration

lective

to reinforce

col¬

bargaining if, in the end,
major dispute is going to

seekers for power look for scape¬

every

We must not allow irre¬
sponsible action of a few to nom¬
inate labor for the part of the
whipping boy of demagogues.

have to be carried to a govern¬

goats.

And most of all,

fundamental

that

rights do

license

include

unionism to carry

line of a foreign
I have

invaders

not
of

out the party

nation.,

hesitation In saying

I know, as
know, that sometimes these
issues
are
raised by men who
these things to you.
you

pose as honest critics
movement but who,

of the labor
behind

the

masquerade, are serving the pur¬

naked reaction intent on

pose of

making labor supine and helpless.
I think the record of my adminis¬
tration

qualifies

ment bureaucrat—and I may

any government officer,
matter how high his office.

—to

to talk to you

business

achievements of
orous

free

ment.

labor
will

and

strong and vig¬

American union move¬

unions

meet

What I say is to

aspirations

the

advance

confident that free

free America

the great responsibili¬

ties which go

men

find the settlement

disputes taken out of their
hands. They are relegated to the
position of mere v petitioners or
messenger boys waiting upon the
doorsteps of Government.
Both
sides are left guessing whether
they are going to be given more
than they dare to hope for, or

hold

without having to
formal hearing. The medi¬

atioii board took part in no less
than 3,111 arbitrations of labor

disputes.
For years our State has stum¬
bled along under the benign con¬
fusion of a bumbling and incom¬
petent Labor Department. It is a

pleasure to report that a whole¬
sale reorganization has now taken
place, under a larger and more
adequate budget. Moreover, the
department was too centralized.
You know about it; you often
had to travel 100 miles or more on
,

single complaint. So we took the
State Labor Department out to
the people, where it belongs. It
now operates in six regional of¬
fices, each under an assistant
commissioner.
The new plan is
working well and the personnel
have been brought closer to em¬
ployers and employes in the in¬
a

■

dustrial
the

areas

result

the

with

State

preventing misun¬
derstandings and disputes.
York's

New

Labor Legislation

For the first time in its history,

is genuinely looking
health and safety of
The Depart¬
ment of Labor has pursued .vigor¬
ously the campaign to prevent in¬
your State
out for the

its working people.

diseases

dustrial

such

lead

poisoning and the dread silicosis.
Another innovation is the division

conducts

conscentious and

con¬

stant inspection of machinery, re¬

quiring modern safety devices in
accidents.

Since

the department

that the result

can

either way,

depending upon which

way

political winds of the moment

reorganized I am proud to
there has not been one single
major catastrophe in New York's
industrial establishments.

preparing for the peace.
that

clear
of

the

abrupt

contracts

war

hundreds

It was
canceling

would

throw

out

thousands

jobs, pending the reconversion of
plants to peacetime produc¬

war

tion.

I instructed the Division of

Unemployment Insurance to

said,

New York,

have pursued

policy.

dictated.

rate

assures

the

trades

the

women

pay

retail

covered.
equal pay

for

men

law
same

equal

New York led the way with
law
to

work.

anti-discrimination

eliminate
abolish

bigotry and injustice, to

unfair

discrimination

employment.
We
have .enforced
the
law
against child labor. Formerly one
of

out

every four working chil¬
dren was illegally employed. We

surance

have

as
a

It has been

the

only

where

And New York

State

veterans made

employment Insurance

Today,

successful

policy and the proof of the pud¬
ding is in the eating.
say,

there is

But, I
no

copy¬

child in the State of New

Another important measure is
the on-the-job training and by the
middle

June, this year, 34,020
veterans were taking advantage
of on-the-job training, being paid
while they learn. Their number is
growing at the rate of 2,000 a
week.
To maintain the precious supply
of skilled labor

placed the

pro¬

gram for training apprentices un¬
der the Department of JL'abor. To¬

are

Law,

al¬

ignored by the

Security program.

a year after

V-J Day,. I

able to report to you that in

spite of the demands made
the

upon

the

reserve

dollars.

end

almost

have

the
a

war,

full

its

billion

protected

the

workers of our State better, I be*

work
of

and

practical
people.
< ^ vh;

many

•

Praises Labor

Leadership

Much of

our progress has been
possible by the high order
maturity, responsibility and in¬
tegrity displayed by the labor
leadership of our State which is
so well represented here
today.-'
From my association with you
during the better part of the last
four years I have derived a deep
and
abiding
satisfaction.
You

made

have

helped

tion

many

know

come

;

much;
in the solu¬
problems.' I have
to

have helped

you

learn

many

you

sincere,

hard working, intensely
human beings, deeply devoted to
the responsibilities of your own
jobs, but also devoted td the wel¬
fare of our State and allf its

people.

have

emerged
from, the'
with many elements of

great war

remarkable strength.

Eyen while
put.forth all our efforts in the
struggle we have been able, to a
well-nigh miraculous degree, tor
make progress, financially,, eco¬
nomically and socially. So far as
we

conditions
are

within

concerned

ture

with

our

State

own

face the fu¬

can

confidence

and hope.
have built well and

day, as a result, there are some
11,000 apprentices in 8,50,0 estab¬

Together

lishments

soundly for the years to come; d

Ours is a State richly endowed
by God with many blessings.1 We

throughout New York.
than 85%
of
these
are

veterans.

blessed

are

the wealth

our

Most important of all, for the
natural resources, in the uncom¬
long range, is the great new ex¬
periment in New York State in mon i beauty of Our countryside
post-high school, technical insti¬ and in the character of our peo¬
tutes. After three years of study ple. We have great creators and
and preparation we have this year producers in labor, business and
post high school technical insti- agriculture. Working together'in
a spirit of unity we can advance
nical " institutes
throughout the
State, and in this pioneer mover to ever greater obj ectives for our¬
ment the State Federaion of La¬ selves, our children and for> the
bor, has provided help andcoop¬ cause of freedom everywhere.
eration

with

one

its

members

11—^^—11

each board of trustees which I
have naihed.

State Workmen's Compensation
Law

When

took

first

indifferent

and

office

administration,

corruption and incompetence had
been; given a frqe hand to exploit
injured'workers.
We

rooted out that

mess

and

have done everything possible to
prevent the recurrence of abuses
in this field.' In our reorganiza¬
the

old

industrial

board

five members was replaced; by a
Workmen's Compensation Board
of

ten

members.

We. also

maximum benefits

for

raised

total, dis¬

ability from $25 to $28 a week,
minimum compensation from $8
to $12 a week, and increased max¬
imum death benefits.
I

York
and

State

School

Labor

ments

Relations

mark

Industrial
at

Cornell

substantial

progress

the
truly
liberal tradition.
They will bring lasting benefits to
all the people of our State. It is
a record by no means closed.
Not
only have we had to break new
ground, but we have had to
sharpen our vigilance against a
resurgence - of the' forces of big¬
otry and intolerance that ride
through 1 the night wrapped y in
hooded white sheets.
I pledge
you that as: long as I am Gover¬
.

nor

the

Klu

the

Klan

Klux

State

There will be

any

New York.
Bilboism here. ;
of

Together, the State federaiton
and

your

have made
in

Theodore Roosevelt Na¬
in. the ; village; of

Park

Medora, N. D., and a monument
to the late
on

President, was vetoed
Aug. 10 by President Truman

who, in a memorandum of disap¬
proval, stated, according to Asso¬
ciated Press Washington advices,
that

the

features
would
a

area

"does

chosen

not

those outstanding natural

possess

scenic

qualities that
justify its establishment as

national park and has no direct

historical

association

with

Theo¬

dore Roosevelt"
The Associated
Press further said:
V;
.

the

"Neither

Maltese

Cross
Ranch, in which President Roose¬
velt bad an interest, nor the Elkhorn Ranch, which he owned, are
embraced
within
the
proposed
park area.
The Maltese Cross
situated

distance

some

south of Medora, N. D., while the

proposed national park area is sit¬
uated north of Medora.

horn

Ranch

The Elk-

situated

miles

north of Medora, and is a consid¬

erable distance from the

proposed

park."
The

President

the find

said

within the proposed site was
a

how

part of the Theodore Roosevelt

national wildlife

refuge, and

"best fitted for use as

was

wildlife

protection and management area;**
He said that if
were

national

park

to be established in honor

the late President it should "more

fully

measure up

to the standards

group like it will not hold a meet¬

ing

A bill which would have estab¬

lished

Ranch

particularly proud to have
privilege bf opening the New

was

the

Theodore Roosevelt Mem.

tional

found shocking conditions in the
operation of the State Workmen's
Compensation Law. Under callous

unemployment insurance fund

since

the result of the de¬

was

termined

to 26 weeks.

Federal Social

not

program

Upon my
Legislature reduced the waiting whom
you have so long known as
period from. two weeks to one a friend.
week* raised the maximum bene¬
I think it may be fairly said
fit from $18 to $21'a week and
that taken together these achieve¬
increased the benefit period from

are

different

mediated,

until

this

pursue

University as a permanent insti¬
'
tution, the only school of its kind
recommendation the in the
country, under a great dean

benefits.

though they

I have

propose

pre¬

itself thoroughly so that peo¬
ple suddenly unemployed would
face a minimum of delay in ob¬
taining their unemployment in¬
pare

Billion in Reserve Fund

the

previously

which

tion

Even during the war we were

the

Policy in New York State
Here

workers

never

have 'enacted the

was

say

the. Union
jobless by
a
strike may collect unemploy¬
dealt out an unmerciful drubbing ment ;
insurance.
In .addition,
oyer the radio and through - the merchant marine employes are
press. Their experience has shown now covered by New York's Un¬

hand in hand with happy to

The board

—

enced and able labor leaders and

frankly; without having to worry
blowing.
about
being misinterpreted or
misunderstood.

add

Under these conditions,1 experi¬

must learn

10,-

some

000 workers involved.

factories to save lives and reduce

By the same token, the political
strike which serves someparty
line and the massed picket line
conflict

The State Labor Re¬

lations Board, from 1943 through
1945 settled 164 strikes and pre¬

compul¬

for the sins of a few.

which

beginning of 1943 to

sisted^in settling 385 strikesin¬
volving 109,025 Workers;It succeeded in averting 1,216 strikes
which would have involved 125,-

•

is my deep conviction that
where
government
persists in

public opinion to answer

From the

the middle of this year, the New
York State Mediation Board as¬

000

York will be deprived of school¬

for

idealism

Under my ad¬
ministration that protection has
been extended to more than 450,-

ing.

It is interesting to note that we
did not stand at first place during

rights.

est in the country;

tually; 2,658

ligent person challenge the fact
that they are a powerful factor

responsible in the exercise

achieved

settled 82 per cent of them—ac¬

anywhere who would seriously ar¬
gue that labor unions should be
abolished.
Nor does any intel¬

of those

so.

The dreams of years have reached
rich fulfillment. What has been

'New
York's
minimum
wage
standards today are also the high¬

years

working time for the

1940 to 1945

leading

adopt

•

combined, New York

result of strikes with the avail¬

able

cares

other State in the
'"'f yy-y
-i-*'':'- ;*,■■

any

notably improved its speed and
efficiency. From Jan. 1, 1943, to
April, 1946, its examiners dealt
with a total of 3,234 cases and

ranked first*

If the Fed¬

good industrial relations during
the critical war years has been, vented 121 others with

that labor unions ought to
be curbed. But I do not think that
there is any responsible person

progress

Government

087 workers.

State's

argue

that policy.

it, it - may feel perfectly free to

Record

ample proof of that in the record

•'* V

/•

;

New York's' Labor

the world that wherever totalita¬

rianism has reared

have*

now

prestige'they ' right

1041

State

administration

promising beginning
fitting organized labor into a

life-size

role

the

developed and maintained in' the

past for national parks."

t,•

Mr, Truman also objected to a

provision which would have

per¬

mitted the Secretary of the Inter¬

ior instead of the Attorney Gen¬
eral to determine the
land

said

this

within

titles

have

validity of

the

area.y

provision alone

been

sufficient

for

community. disapprove, the measure.

would
him

,Jo
-cJL.

THE COMMERCIAL & FINANCIAL CHRONICLE

1012

increases

The CIO's Position
categories,

(Continued from page 1010)
um look action to grant an
increase in the price of flour. Just
few days

were

not still

were

fort

subject to

Practically nd efr

price ceilings.

before this price in¬
granted General Mills,

crease was

so that frequently OPA
could not say what goods

itself

after

Price Control

made to ascertain what

was

producer
of happened to prices of the exempt
flour, reported net profits for its items.
fiscal year ending May 31, 1946, to
Price regulations that continued
be the highest in its history,
iri effect were liberalized through
administrative
application.
.Stocks of many other commod¬ lax
ities/ such as foodstuffs, electrical Demands for ceiling increases
were
handled frankly across the
products, consumer durables are
being manipulated by monopolistic table on a bargaining basis. Estab¬
lished
pricing standards of the
practices to create scarcity situa¬
tions
and
thus
force price in¬ agency were ignored, twisted and
America's ' largest

violated

creases.

decisions

substantiate

already arrived at by horse trad¬
ing.

income families who are being
rapidly rationed out of the market
by rising prices. ' In addition, we
can have savings of 6 to 12 cents
a pound on beef cuts, 6 to 8 cents

rising

American

living

When

costs.

workers

ceding 12 months, and the rise in

squeezed

are

and declin¬
ing take-home pay, something'
must be done to protect their liv¬
ing standards. The decisions of
the Board on reeontrolfing these

index

wholesale

the

between rising prices

manufactures

was seven

finished
times the

earlier rate. The Consumers' Price

and- sugar;

the actions of the gov-i
ernment since the passage of the
OP A bill.
What we've seen thus
far

hasn't

before June 30 Were greatly ac¬
celerated after that date due to
removal

been

encouraging.
A
price-wage policy
of administrative agencies such as
OPA, Stabilization Board, OES,
OWMR, indicates a let-up on price

there is no heed for OPA to "taper
off" in its subsidy payments with
view

transition
that

effecting

These

controls for

increases

have

25.

painless

particular date by Congress
eliminating subsidies and in¬

for

creasing food prices need not be
taken as a signal to OPA to so
handle its subsidy payments as
to conceal from the public the

days.

increases

importance of sub¬
sidies because they affect com¬
modities
w h i ch
hit workers*
pocket books hardest. As I.have
already stated, events since the
passage of the new OPA bill have

new

bill was signed by the

Presi¬

These price increases and
decontrol orders continue in a

dent.

the

get around to it.

tude

these

der

Feb.

called

for

tight

and the Decontrol Board with suf¬

ficient
power
to do something
control.
Relief was to be
about slowing up. inflation.
But
granted to compensate for wage;
increases only when necessary to
assure a prewar

profit margin

un¬

this

will

not

firmly and quickly.

Subsidies
One of the

months.

■;

Actually, the policy agreed

turned

out

extraordinarily
respect to prices.

with
As revealed first in the
generous

case

automobiles, it aimed to guarantee

total

can

effective

the question of sub¬

concerns

sidies.

upon

Under

the

bill

new

the

available for price con¬

sum

trol subsidies has b^en cut tp less
than half the amount requested

profits

which granted price relief for any
wage

out

or materials increase with¬
regard tp actual costs or

profits either present or future.
Regulations issued by Bowles,
then at OES, required wage in¬

creases

get approval

as a con¬

dition of seeking price relief.
In
certain ! instances
industry-wide

However, most of this

prior to recontrol on Aug. .21, the
subsidy funds provided need cover
only 7 instead of 12 months.

Within the dollar limits set by
Congress, OPA chh^pay foodSub¬

sidies at a rate of $137 million a
month beginning Aug. 21 and end¬
ing April 1. This rate compares
with

were

even

increased wages

permitted to increase prices.

Decontrol

operations

put

were

an average
monthly rate of
$148 million paid in the last fiscal

year

food

June 30.

fruit

and

subsidies

effect

Eliminating the dried
coffee

subsidies,

the

funds available will pay all other

into high gear by OPA in March,

food subsidies at the full rates in

pursuant

effect June 30.

ministrative
verted the
control

unpublished

ad¬

decision which"

con¬

actions,

authorized

Mr. William H. Davis in 1945, into
a

top priority, all-out campaign to
goods from price control.

remove

•I

Decontrol

orders

thousands of items.
as

Those

rates

previous piecemeal de¬

mobiles

the

has granted price

the

extension

bill

sult in further increases to

modities which affect the

Profits

not

facts

and

consum¬

trends

without

followed

Major

well

minor lines were included.

Ex¬

emptions were granted by whole
v :.c i

prices 2 to 3 cents
prices 1 cent
10

cents

reduce

milk

quart, bread

loaf, butter prices

pound,

margarine

pound and canned toma¬

for

cides

toes 2 cents a can.
modities

These

are com¬

which subsidies

will

provide most valuable aid to low-

'ii'M

o.VJ j ? i

X:? t

subsidy

re-apply

quarter

1946,

ac¬

covers

1945."

'r*~

reconversion

problems

and

supply of materials
did not show increases in
profits.
But there is every indication that

Increases

The

1946 their best profit year. Some
corporations showing slight losses
for the first two quarters
of'1946,
transferred funds from their re¬
serves

;

type of price; in¬
being approved by OPA af¬
of commodities that

groups

which

ing the
funds

were

war

years.

dividends

set aside dur

Out of these

have

been

of $4.02. Add to /this

a loss

cut in money earnings the rise in
the cost of living, and you find an
overall
cut
of 18%. in
factory

workers' real earnings since April
1945.
"
v
.

'•••?•' ^e Wild charges of those who
insist that there is

runaway wage

movement should not be

permitted

paid
7'0.

obscure the basic tragic facts.
The figures in industry after'in¬

The Department of Commerce
reported that in April, cash divi
dends paid by corporations were
almost 10% higher than in the

dustry show that gross weekly
earnings have sharply declined
despite wage increases. Thus, in

to stockholders.

same

•

month in

the
an

automobile
increase of

industry, despite
18

cents

hour,

1945, for the three
month period ending in April of
1946, dividends were 5% higher

gross weekly earnings in May 1946
had decreased by 15% since April

than for the

1946. 7

corresponding period

last year. During this three month

v"77;-v' £•■ :^r:; ;
Even these -figures do! not tell
the entire story/ It mUst be bohrne
in mind also that the" May, 1946,
■

period in 1946 wage demands were
being made upon these same cor¬
porations. Some didn't operate for average work week of 39.8 hours
a
month or more.
When they remains
higher than the 37 J aver¬
started operations, wages were in¬ age work week of 1939
and the
creased but it appears, sufficient 39-hour work
week of January,

our

1941.
a

Instead of even- permitting
of take-tionie pay

restoration

American families in

incomes

families in

special

privilege Senators
and
Congressmen looked out for dur¬
ing the debate on the! OPA Bill, j
An amendment dealing with catton
provided that, all current
prices of commodities mariufacr
tured froin cotton must reflect the:
,

1945

to the loss of earnings suffered
$2,000; by millions of American workers
This group of our population, hll
under the Administration stabili¬
propaganda to the contrary, had zation program' further
wage cuts
only I1 % of the savings. Put still may be imposed upon them in'the
another way; the top 50% of our form of increased
prices oil food
had

second

crease

fects

$43.10,

production approaches full ca¬
pacity
corporations
will
make
as

throueh' free Collective bargaining
profits soar and divi¬ the Administration's 3 wage-price
dends increase, reports from the program resulted in cutting wage
Federal Reserve Board show in¬ adjustments to a' level far below
come and savings of workers1 to warime take-home pay.
be at relatively low levels. Ai%
It now "appears that id addition

''Special Privilege'' Price

sumer
earned $47.12 a week in
April 1945 and in June 1946 only

inadequate

While

pay¬

ing Industry are now approxi¬
mately 8.5% below what they
were in
April 1945. This means
that the average employee-con¬

cor¬

porations. Some corporations faced
with

by; the

ernment estimates show that gross

This

almost 300

illustrated

weekly earnings (take-home pay)
for all employees in manufactur¬

preceding quar¬
ter, and 12% higher than in the
quarter

dealing- with
workers'
Despite the steady
streams of propaganda and hys¬
terical
charges about: runaway
wage increases, conservative gov¬

double that of the

tabulation

side

wage

figures
earings.

cording to the National City Bank,
shows profits that are "almost

second

severity in the

administration of the order on1 the

rate profitsv for 1946 will be eqiidl
to any previous year.
Reports for

j'ilv v',"'*''- f< :

ruary 1946 and the

satisfactory level of 1945;

ments.
fj "

into the wage-price policy of Feb¬

some

on.

second

progrant of discouraging
increases which was written

wage

can¬

profits and dividend pay¬
ments as they relate to income arid
savings. The Department of Com¬
merce reports that over-all corpo¬

the

com¬
the pledge and as¬

was

The

Savings

inflationary

discussed

mitments

surance pf the present Adminis¬
tration that the price line would
be held, "';>'•.! v.:v: a;.

er's cost of living.

Current

these agreements and these

com¬

over to* increase div¬
idend payments above the
highly

housewives

our

by contract for periods ranging
well into
1947,
Accompanying

spon¬

sored by Senator Fulbright. These
revised Taft amendments will re¬

labor

wage levels in major segments of industry have been fixed

amend¬

during : the

this

today
•

parts because of

fered since the war. In the in¬
terests of a s ..abilized
economy
labor acceded to official
pleas for
extended contract terms so that

increases for farm implements and
ment

bargaining

concluded

early
year,
labor ac¬
cepted amounts which, fell short
of the drastic cuts in
earnings
which American workers had suf¬

$100 to $125.

spare

collective

organizations

neighborhood J of

Already OPA

the

months

price

has been left

the

will1 be issued soon depending on
whether the Decontrol Board de¬

of less than

1945 saved

97% of all

and other cqhsuhter: goods which
leaves the lowest
50% with only 3% of the savings absorb the bulk of their iiicome.
and. the very lowest 30% had no In other words, labor is being
savings whatsoever. A good many
squeezed between, rising- prices
of this latter group had to go into
and shrinking; earnings. • Frankly*
debt because their jneome was in¬

savings.r This

gentlemen, I think you will agree
sufficient tameet expenditures.! '
that this state of affairs cannot
price of raw cotton.: Raw.
Effect ah price Rises on ,Lab<jr
cotton being uncontrolled jumped
persist.
The plain fact is that ^the great
during July to 360 a pound. OPA
The eyer-widening chasm which
has granted increases in cotton majority
of American workers
have no reserves to draw upon, separates the real wages" {ot the
textiles at the mill level which
market

will result in a' six to 8% increase

and

retail prices of cotton apparel
and an increase of approximately

their living standards..

17% in household linens, Some of

that ' wage

these

will

are on

meal. Similar in¬
being prepared and

are

re¬

most subsidies cannot be reSumed

who had not

table

creases

OPA.

price relief was granted1. The rea¬
given was approved wage in¬
creases,
but actually producers
son

ucts. These commodities

duction is

accomplished by limit¬
low-volume
ing the period for which subsidies
operation
and
was
applied by
may be paid to April 1,1947. Since
means
of
an
escalator
formula

normal

being announced for canned: Horn,
peas, tomatoes, and tomato: prod¬

at almost every

in which the

areas

administration

job

Criticized

Decontrols

unless

Elimination of subsidy payments
resulted in price increases

also

kitchen

der anticipated high-volume oper-!
ations during the succeeding 12

OFA

about

come

the Board acts

agreements

changes will be quite large, auto¬

price

The magni¬

some

the
the

danger of inflation. It is to the
best advantage of the American
worker, above all other groups,
that the price line be held." -

groups
a result

retail and wholesale margins will
permit increases on automobiles,

I stress the

been

not

also get

proved
without
subjecting
I workers and the
public to

of Senate amendments to the bill.
Senator Wherry's amendment on

April 1. Selection of

steady fldw day after day.
All
significantly rolled back since the types of materials are affected by
restoration of controls; Basic com¬ the price! increase orders; A great
modities jumped about 25% at many of the items are purchased
wholesale. The inclusive whole-! each
day
by
consumers
and
controls with a stiff hand still sale price index
by Aug. 3 had workers arid such increases in
being applied to wages. Commod¬ risen 11% above the end of June. work gloves^ rubber footwear,
ity after commodity is being de¬
From the middle of June to the kitchenware,
chinaware
(iriex
controlled
each
day, price in¬ middle of
July the consumer price pensive), men's shirts; shorts, and
creases are being granted oh other
index, with no allowance made for pajamas," men's outerware, shoes,
commodities, but a decision on rent
increases, and only 1% for etc. have! ardirebt beariiig^pAiheir
Aug. 8, 1946, by Mr. Steelman, items other than
food, jumped cost of living;
the Director of the Office of Eco¬
5%%, the largest single monthly
Under the new bill two types
nomic Stabilization,
disapproved increase in the
history of the in¬ of price increases are being given.
a
wage increase of 3x/2$ for the
dex (which dates back to 1913).
First, those because of the elimin¬
lumber workers.
This
increase
At this point Congress finally ation,
or
contemplated partial
added to the. 15$ they received
elimination of subsidy payments.
in
March. would have brought: passed, and the President signed
a
bill
extending the OPA in Examples Of this are tire increases
them in line with the pattern es¬
amended form. Those of us who granted for flour, $1.11 per hun¬
tablished in Steel, Auto, Electrical
have fought for price control and dred in the East and $1.26 in the
and other industries.
It would
an orderly reconversion to
peace¬ West. As a result of this increase
seem that the government has one
time production were sorely dis?- the basic price of America's most
policy on wages and another, en¬
appointed in its terms. We do feel, staple commbdities were Raised,
tirely different; on prices. Let me:
make our position clearer. On its however, that.it leaves the OPA, bread, rolls, biscuits, crackers and
the
Department of Agriculture Cookies were all affected.
face the wage-price executive or¬
review

will

not

are
...

Other special privilege

can

In view of this ample coverage,

Index, which had risen 2% from
February, 1945 to February, ,1946,
jumped 3%
between February: not- lent us any encouragement.
basic food commodities will let and June, with a record
gain of Within a day after the new bill
the American people know just 1.2% in the last month of that! was
passed by Congress, a flood
where the administration policy period.:'
of price increases and decontrol
\
/
stands on
holding the line on
orders was issued.
They were in
Cites Price Rises
prices.
the mill when OPA expired on
V Labor has been scrutinizing with
The price rises initiated by OPA June 30, and held back until ,the
some care

granted

pork, and some reduction on stoves, refrigerators,
washing ma¬
other
dairy
products,
bakery chines and similar household com¬
goods, fats, canned goods, meats modities just as soon as the OP A

It is the solemn duty and re¬
Meanwhile price indexes were
sponsibility of this Board to put revealing the inflationary effects
fact that food prices will be in¬
a
stop to rising prices. Ramifi¬ of the new policy.
Wholesale
cations of your decisions affect prices of raw materials advanced creased, and sharply, by the ex¬
haustion of the funds which Con¬
our entire economy* Refusal to refive times as fast between March
control will mean runaway prices 1 and June 30 as during the pre¬ gress has provided.
and

just

sufficient.

Duty .to Stop Rising Prices

Thursday, August 22, 1946

items

spiralling

prices

will
<

slash
,'

Although it rejected the view contracts
• increases,
are. infla¬

whose price increase

tionary, labor nevertheless, ac¬
cepted and participated in the

varyv between 15 and 25%
linens, cotton; blankets, wage stabilization program in tjhe
yarn, denim, cotton duck, ging-1
belief, and upon official assurance,
ham, flannel, towels, etc. If the
that the remainder of the economy
price of cotton rises any higher,
be
stabilized.President
additional increases will have to would
be

bed

are

granted,

says

the

OPA.

Truman, in laying down the wage-

The

cotton textile industry is already

price policy had stated;

pressuring the OPA. for/further
increases, because
i-'O

•

they, claim, the,
♦

AmCriean* w^kcr^&om ihe paper
wage, adjustments .embodied 7 in

"Increases

this

outside

and

]
beyond

theories

cannot

bridged

abstractions.. American

workers

caught

squeeze

created-

profiteering. look
ernment for

some

desperate

by. unchecked,

their

gov¬

form of prompt

and effective action. If this action
is not taken to protect the

living

standards of the American people,
the

stage will

general policy cannot be ap¬ depression.-£

be set for
,?•

new

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

Volume 164

tributors—the people who resell
these articles— the additional in¬

Reasons for OPA Price Increases
v

(Continued from

cles. At the time

page 1011)

granted these

for certain kinds of cotton cloth- »

manufacturer^; increases, whole^

ing.
And when announcements
like tnese are followed up witn

under the old

sal ers and retailers

were required,
law, to absorb some

belieyed that the goal of

crement^ Congress decided they
An increase of 7%

know there is

to nave

just

yourselves

you

did

war.

wonderfully
; The
country
people who are willing to
help' the
local
Price
Control
so

is merely that the OPA has
with dispatch to give the
dealers the extra profit Congress

Boards in their efforts to

moved

mercnants

(decreed

prices

thaf they should have.

rise \in

ithe

the cost of

level

know

what

the

Price

help the
legal
ceiling
I hope you

cnecx

the

stores.

tions do everything possible to' see
that the necessary atmosphere of

some

living above

June.

last

will volunteer your services—and
in your own day-to-day transact;

.As .I told you last week, I think

it's inevitable that there'll be

go¬

neeas

means

tendency

for such thmgs^as or all of the increases. Under the the part of some to treat the recent
old
Wasning
machines,
gas
-arid mostlaw, they were not, for the mandatory price increases as
part, passed on to you. by tnough
electric
ranges, raaiofc,vacuum
they were the first act in
cleaners aria sriiall household ap¬ the stores; The new law changes some brand new melodrama of
that. It says, that no cost abso.rbpliances—the whole thing's bound
rising prices—or as if tney were
tiorir not iri effect before March
\o seem
.discouraging, But I think
pinwheels announcing a lot of in¬
V&.eu aii qeglari—a littie latef dn 31, this year, can be required now. flationary fireworks just about to
Here again,- it was a case of a explode. It's
-^-nxat i;ne Congress aid insert tnis
only natural, I sup¬
Congressional mandate, and some pose, that these mandatory price
tlMray uteaaline ,in trie act,
; We're running into quite a lot mathematics on our part. We had
increases should have been given
to compute the amounts that some a
of the unpleasantness ad at; once,
good deal of publicity. But some¬
of
reconversion goods times, just to balance the
it's true, but the sooner we ad¬ resellers
ledger,
had
been
absorbing—and
give I think we at OPA ought to get
just ourselves realistically to that,
them those amounts as price in¬ up a
the sooner we'll be able to get on
press release which could be
with trie iriam business' at hand— creases. That was the law.
good for issuance nearly every
So now these
wnich always has been and still is
price increases day. The release would simply
keeping, the whole economy on ah have been made. But there's at say, "Today the QPA did not raise
eVeh' keel.-.-■/.
least this consolation. With the prices."
1
/ ; * £■'..
There is little," if any, public
Ever since this new act became exception of household mechani¬
cal refrigerators—for which pric¬
kripwledge of OPA's resistance to
law, I've maintained 'that this job
The shoe is al¬
can be done. The recent pricedri- ing adjustments will shortly be price increases.
announced—OPA is now up-toways ori the other foot. But we
cTeases, Unpopular arid evert a litdate on pricing actions required are
constantly resisting pressures;
tife Trightenirig us I know they
Ure, haven't altered' that belief. jn the consumer ; durable goods to raise prices. "Somebody wants

are

pitcn in and help,

ihe

auring

feconomy with full production cait for automobiles, on the average,
s not inflation.
be achieved.
Whatthat increase

hikes

Ifrice

You people

ing

Snould have.

sound

104?

don't

compliance with the regulations is

Decontrol

obtained.

Wherever compliance
by Lself doesn't do the job, OPA
is planning rigorous enforcement

Board is going to do in the matter
of foods which the
Congress spe¬

cifically exempted from control.
In any case the amount of money
that can be paid out as food, sub¬

measures

keep price and rent

violations down.

.And finally,

the

great

need

sidies, in the event of restoration for forbearance—and cooperation
of some food
controls, has been —on the part of all of us—farm¬
drastically reduced. Reduction or ers, businessmen, workers, profes-

elimination of subsidies is bound

sional
people
a'nd
consumer$
price adjustment for everywhere; With everyone work¬
some foods.
The probable .effect ing together, and
practicing indi¬
of a special amendment
affecting vidual restraint for -the good of
textile and clothing prices has al¬
all, I think there's a good chance
ready been announced. The one fhat the cost of living increases
hope here, as in so many other which will be required from now
fields, is that increased production on .out .can at ;least be held to
will begin to operate before too
field. — '
manageable proportions.
*;
r
os to grant an increase every .day,"
long to bring the average cost of
I pledge you again, that we at
;
And. it perhaps will help a lit¬ and several times a day* Brit our
clothing -down.
OPA shall do what we can, under
tle if you remember this. Price policy, as I've said, is to make
the terms of the present
adjustments will riot be heeded, only those price adjustments that
Have .Met Inflation Crisis
law, to
for instance, on furniture, floor are plainly required by law, or
keep increases down. And I know
Looking back over the progress
you can count on the help of other
.coverings, lamps, some types of ibj^' the plain evidence of iricori/ of our
fight against inflation dur¬
agencies in the government's stab¬
;
bedding arid luggages or the sim-; itrovertible fact.
ing the past four and a half years,
pie reason that OPA has not been
Much of riiy talk this -week has! I -think it can safely be said that ilization team. -But the best and
sutest guarantee of America's suerioqumng any itrist afesoitption by! been devoted to- an explanation of we have
passed from one crisis to
resellers on these articles Since price increases required under the
another. We have lived on ;a diet ;cess—in 4his fight against infla¬
March
31.. And
where the in¬ itenris of the
present price control of crises—and l, for pne, am us tion—will come from 140 million
creases do apply, your storekeep¬ Act-—and which Congress told us
tired of them as you are. But I'm Americans themselves.
er won't begin to charge the high should be
made insofar as possi¬ afraid we aren't
through' with
If we all do our level best to
prices until he himself has re- ble within 30 days from the pas¬ them
yet. There's still a lot of
cevied shipments ticketed by his
sage of the law.
I think we've difficult terrain that must be riaake the program work-^and if
manufacturer with the new legal
just about reached the end of travelled before we can come out we stick at it—we simply cannot
prices
these mandatory price increases. on
fail.
:
W&iM
high, safe ground.
Let me repeat again. These new We've probably done the basic job
price increases have been made in for automobiles. Mandatory price
strict accordance With Require
increases for 20 classes >of recon¬
to

result in

l(ve itoid you before that the law
urioer wh.cri wri are now controll¬

ing' prices is far from a perfect
law But it isi to my mind, d far
be.terdaW' uiari^tne earlier bill the
president vetoed.,/

;

right itfter

|,-saidi

ithe passage
of fhe-mew ;act; that rill of us at
v

QPA

were

determined to accept it

drders. I said I
thought Americans • (everywhere
should accept those orders—and
do their utmost to support the law
as our ^marching

which Congress gave us. I prom¬
ised you «then; that We at QPA

would move as rapidly as possi¬
ble to criTy;out dhe;maridates iof
that law..•>
*•*?
I •;/ .• •
■

.And

that

exactly what we
have :been domg. We have been

doing our -best 46 -get the neces¬
sary price adjustments over with
as fast as possible", before the 30day deadline- date expires. That's
why they've been crowding one

merits of the Price Control Act.
We haven't made them because

version

goods

been

have

No Benefit From

bounced. And I expect within •<
.We wanted to, or because we had few days we shall announce what¬
feriy choice; in the matter. We've ever price increases are required

Low Interest Rate

simply carried out the letter of the for refrigerators. These increases
j
law. And we haven't changed our loom big when you get them all
(Continued frorii first page)
another—in the headlines of your
at .once. But let's keep our per¬
policy, which is to establish ceil
no
real value to the owner or
Indeed, the politicians who em
a^wspapers audi over"yourmadios
ing pries on the basis of require¬ spective — and our thinking — phasize the low cost of interest on tenant jvho has to
—in the last few days.
And if
pay the addi¬
ments of the law—or for bona fide straight.
the public debt resulting from the tional costs of material and
ypu've read your papers carefully,
labor,
reasons of supply. In
low interest rate do not -seem to all of which result from the
carrying out Vast Areas of
or
listened -to your radios, you
low
Unchanged Prices
Congressional
requirements
we
realize some very practical mat¬ interest rate. You
probably know these price ad¬
get a lower in-/
There are still vast areas where ters
shall continue to provide you with
affecting the average run of ferest rate, but you pay -more in¬
justments weren't, discretionary
the utmost protection that is pos¬ no
price increases have been citizens. In the first place we are terest,
with us at OPA. Congress told us
-.
'
/.
sible under the law.
granted. Nearly one half of the; all affected by higher prices;
to make them. And Congress gave
only
,

definite standards and in¬

Us very

structions ;to
made

them;

;

No
Do

Uncontrolled Inflation
remember

you

;

full page

picture that appeared in "Life" a
few weeks ago? It showed a close-

Retail Discounts

:
•

when

For Instance, Congress gave us

this very explicit instruction. It
said that where a -commodity had

country

Moving
street

gutter in

some

foods you buy are still under OPA
controls. The Rent Control Pro¬

gram has been preserved intact.
For areas in which about 97 mil¬

some

lion people live; the rents for so-called
saving by virtue of the
European Jiving ^quarters are, as a general low interest rate on government

Hungary,, I . believe. rule, no more than they were on bonds makes' little or no differ¬
into the picture was a- June 30, i946. And, as I told you ence. In other words the cost at

cleaner's

broom, and right

last

week,

production,

many

Treasury

enjoy increased wages.;

officials^ have

fre¬

quently declared -that they intend.
And under, present tex laws a very;
tri tpreserve -the currriit ' low in4'
large percentage of us pay so lit¬ ferest rates and
have explained
tle in taxes, if anything, that the. that
Irivsavihg In interest cost on

the

the public debt and private bor¬
rowing is of great benefit to cit¬
izens

generally. ■" Notwithstanding

the respect due to the authors

o?^

price spigot is much greater these
bpen 75% out of production, dur¬ In
statements, there is no fairer
the Path of it was a piece of fields; is rapidly approaching or than the
saving at the interest rippraisal of them than to
ing the war^rid where the com?,
say that
paper money* .No one was both¬ passing all
previous peacetime bung.
■
modity was the major item sold
they are nonsense. There is; only
ering to pick that money up. That's records. As production rises, unit
In the second place public off!-! one wayi
by a retail industry—full peacefo maintain the low in¬
what you call, ari .unepntrolled in¬ Costs of producing various com-'
tune retail discounts or mark-ups
pials
terest
iriust be allowed .that industry by
When you apply these

the OPA.

definite

Congressional standards
you come, up with some equally
I definite-- results,'.Trahslating s the
language of the. act in terms of the
orily product-to which we found it
applied,, it rwNas -plain that rin aver¬
age of 7.3 % -increase in the retail
selling price of (new. passenger
automobiles would be necessary.' :
it.

There wasn't any question.abDut
We were not .told to exercise

d^cretion
no

in the matter*

difference whether

automobile dealers

were

to this increase or not.

It made
thought
entitled

Congress

bad! told 'ufc that, the tieal£rs 'were
get increases-^-and exactly how

•

should go about making these
increases;
Congress ;gave us .a
mathematical chore to perform.
we

frequently .assert that the
I know that; the recent modifies are bound to decrease
low interest rate reduces the cost
legal and well-controlled price and make the job of controlling
of mortgages resulting in savings
increases we have had to make; in ceiling prices on those commodi¬
jto home owners and renters of i
this country have' a r number of ties that much easier, in a time
housing by the saving in Interest,
jyou jalariped.
Certainly on one; Of expanding peacetime produc¬ on ;the
mortgage;; but the .morta:
likes these price increases. But tat; tion a weaker price control bill
gage interest is only a fraction:
jleast there is a vast difference be¬ can do the job that only a strong
of the increased .cost of housing..
tween these legal; controlled price Act could before.
This tresults irrin high prices and
increases and the kind that would
That .fact is borne out by an¬
wages flowing from the increased
Come if all the r ules were .off, and
other sign of the times. One of
money supply, due in turn to the
uncontrolled; inflation suddenly the major inflationary pressures,
low interest rate. It really is not
began to take oyer. ;
the money the government has
pf much interest to the buyer or
A price increase lor ^washing been
borrowing for its wartime builder of a home that he can save
machines of 7% is bad
deficit
spending, 1 % on ?hiS mortgage Interest when
enough. program of
But it doesn't take much imagina¬ should
steadily,grow less arid less he ;is paying twice as much for
tion to guess where prices would, as
the national budget, comes
the kome as it would have cost in
go if they were permitted to seek closer and
closer into balance,
>1940. The housing situation is not
their; own levels—especially in to¬ now that the
.

urgent needs of

day's market—with demand what
it .is and supplies as limited as they
are.

helped much by the fact that the

For

this-country, with the

when I hear

peonle say that
control battle has al¬

sunport of all groups, can control

the

inflation; As the; President said In

ready been lost.t

reconversion, products.

message

;

ISome

was

feeing
«

the OP A granted

Increases-to:'thrirmaririfactur^rd.of
these

various

this

that

the

won.

fight

But in order to win the
need

first

all

bill offers;
public understanding of
pf «success in basic facts.: We need to
fight against inflation to war¬ that 4% increase in the
•

new

a prospect

rant a wholehearted effort On the

part Pf.

everyone.
as

But wri'Ve. grit!
if

ourselves

clear

few

realize

ex am

that

we are

giving dis-

less

housing is

apartment

mortgaged for $650,-;
or

Presently the
cost

$29;250 annually.
house - would

same

$1,300,000 and the mortgage

interest

■

the

house which cost $1,000,000 before

$850,000 mortgage

price of might be as low
electric irons is not -surrender to 750;,annually.
the forces of inflation. All that it
The saving in

means

borrowed

and

3^%

$29,-

expand

the

existing

supply of mriney.
There

dollars
as

excess

are four times us
many
available in the country

there

Each

were

few years; ago.

of them must

one

necessarily

fee of less value. The average cita
izen is finding this out
in every way.
excess

dollars

every* day.

N6t only; do these
boost

jthey constitute the

prices,

ever

but;

present;

gravest danger of runaway infla¬
tion; Hungary did riot reach her

preterit pitiful financial position
because of the lack of price con^

tfol. She

came to

promptly

icess

money

more.

000 of 4.% %

reconversion. arti- !ta act arid thxrik

For

the war was

spiral * can

Only-here be prevented:" The President de¬

time ago

the

at least 40%

(an "inflationary)

clared

■

housing

the cost of

that

enough of

obeyed*

Congress

produce

when

As sharply as I can I want to
deny that this is so. In no sense
has ithe battle been lost, and it can

it'^ wai anothpr,.definite instruction
.Congress that

price

the money

time he signed the present Act,
there is "sound basis for the hope

from the

I
little impatient

some

his

interest

these and other
reasons,

can't help being a

I believe,

war

are.over/

same

went through very much the
sort of process; before we
announced the price increases to
resellers of electric ranges, wash¬
ing mcahines, small electrical ap¬
pliances and a number of other

rates and that is to continue

flation.

it naturally and

the result of

circulating

paper

ex-,

called

but not having the endur¬

ing values which money ought to
have.

Peter P. McDermott & Co.

To Admit JoKn^^ McDonald
:

"Peter P. McDermott & Co.,

Broadway, New York City,

mem¬

bers of the New York Stock Ex¬

change, ,will admit John ;J. Mc¬

ibe interest rate

the mortgage is

obviously of

Donald to partnership in the firm
on

Sept. 3.

Economic and

Anglo-Swiss Monetary Agreement
other residents
1016)
balance standing to

(Continued from page

(b)

the

credit

the

Bank

England's No. 1 Account with

Bank of Switzer¬
amounts to
86,750,000

the National

land

against gold to
be set aside in the Bank of
England's name at the Na¬
tional Bank of Switzerland,
francs

Swiss

Befne.

Nationa1

(2) The

(c) transfers to residents of
countries outside Switzerland
and the sterling area to the
extent to which these may be
authorized by; the Govern¬
ment of the United Kingdom
under the arrangenients con¬

templated

Government) shall sell
to
the Bank of
England (acting as agents of the
francs

United Kingdom

Government) as

be required for "payments
which Presidents of the sterling

may.

Swiss

Government shall not re¬

strict

Bank

land's No. 1 Account

be
Swiss Gov¬
ernment under the arrange¬
ments contemplated in Article
9 (3) hereof.
extent to which these may

authorized by the

Article 6

To the extent to which thfr Na¬
tional Bank of Switzerland re¬

(b)

if the

balance standing in
of the National

credit

the,

;

sterling

quires

area

other than sterling,

currencies,

for the pur¬

pose of providing for payments
the countries which such curren¬
cies

are

Bank

legal tender, the

National

Switzerland shall pur¬
them through the Bank of
of

Switzerland's No. chase
with the Bank England against payment
England amounts to £5 ing. ir •• '
;|:;
million, plus
the
additionArticle 7
al sum referred to in sub-

Bank ? of

account

in Sterl¬

Contracting Govern¬
ments Shall' Cooperate With a view
to assisting each other in keeping
The

two

capital

transactions

within

; yv.

Article 10

war

land.

788

496

811

-Z::;62

503

(1) Subject to the provisions of
2 of this agreement, the
Government of the United King¬
dom shall not restrict the avail¬

ability of sterling at the disposal
of residents of Switzerland for
making—

traffic for the

railroads,

the committee points out, is below
the record totals of the war years,

when

railroads

than

the other. reached

interruption that

handling

were

two-thirds

much

larger total traffic, but is some¬
what
greater than the prewar;
peak
of 453 billion ton-miles;
iri 1929. The annual

aver¬

for the years 1947^50, some
486% billion ton-miles, is not fat

age

from the 481 billion of 1941.

the

19450

industry, and the
"special
questions
which
transportation
must
resolve,"
but
particular

to a considerable

margin of error,

perhaps as much as 10% on the
present agreement, which
side of either over-or-underestishall be subject to review and problems of railroads which "in¬ mate.
adjustment after mutual consul¬ volve competition, public aids to
From its analysis of railroad
tation, shall borne into force on competing forms of transportation, traffic
prospects, the committee
the day of its signature/ At any and quality of treatment as to
concludes that, on the basis of
time thereafter either Contracting regulation, investment, and taxa¬
freight rates and passenger fares
Government may give notice to tion."
in effect at the beginning of 1946,
With "more nearly equal public the
the
other
of its intention to
aggregate annual operating
The

treatment

Done

duplicate in London,

12th day of March,

all

forms

of trans¬

portation," the committee con¬
cludes, "traffic would find its
proper levels, and flow naturally
and
almost Inevitably to that
agency of transport offering the
most satisfactory service at the

1946, in

revenue

of the railroads in

would be

no more

1950

than $6 billion*

"Total operating revenues of $0:

year," the committee,
existing wage
rates, prices of material, and rates
of taxation, would probably meet
lowest real cost.
operating costs, taxes, interest*"If this be done, progressive and other charges. It would not*and aggressive railroads will ob¬ however, leave a margin sufficient
tain their due proportion of the to
maintain railroad
credit at
total traffic, and will continue to levels that would be to the best
play their indispensable part, as interest of railroad progress or of
private enterprises, in meeting the the public In general,"
transportation needs of the na¬
This
calculation, it will bd
Under such

tion;
the

billion

conditions,

railroad industry can be as¬

to come."

billions,

ton-mile index.

per

observes,

corresponding' to its
Having in mind
the
specialuncertainties facing
sterling area and sterling at bears to the national average.
railroads, the committee also esti¬
the disposal of residents of
Other factors bearing on the de¬ mates the railroad proportion of
Switzerland available for pay¬
These
termination of need will be pop¬ the total freight traffic.
ments of a current nature to
.calculations are as follows:
residents of countries outside ulation and value of products

(a) to make Swiss francs at the which will be ascertained through
disposal of residents of the the ratio their per capita income
;

age

all

Article

: n<

This prospective total ton-mile*

■:

484

—

Hospital Bill Signed

right at any
the Bank of

463
■

1950—

agreement with a view to making
■i In spite of provisions which he
any amendments that may be re¬
Railroad Prospects
Said "I consider objectionable,"
England, against all or part of the quired. In any event, they agree
President Truman on Aug.
13
Considering broadly the general
Swiss franc balances held by that to meet for the purpose of making
signed legislation setting up a $1,- economic background a g a i ns t
bahk, either sterling at the offi¬ such a review not later than 12
125,000,000 five-year hospital con¬ which transportation and railroad
cial rate or gold to be set aside months after the date of the com¬
struction program.
Authorizing prospects must .be considered, the
at the National Bank of Switzer¬ ing into force of the present agree¬
the Government to pay one-third committee ^develops;; an /approxi¬
land in Berne.
ment.
of the cost of building or equip¬ mate index of productive output
(2) While the present agree¬ ping new hospitals, the Govern¬ pf the country as a whole in the
Article 4
'■\I-' ''-.'i ?
'•-• '•f
•.
•
:-'T
;.\Vs
ment remains in force the Con¬ ment's share of the aggregate to next few years, taking 1940 pro¬
(1) Gold set aside in Berne in tracting Governments, shall co¬ be
$375,000,000 and the sponsors duction as 100. It next translates
accordance with the provisions of
operate to apply it with the neces¬ the remaining $750,000,000, - the these production prospects into
Articles 2 and 3 of this agreement
sary flexibility according to cir¬ measure,
Mr. Truman declared, total ton-miles of freight handled
shall be at the Bank of England's
cumstances. The Bank of England "lays a groundwork for providing by all agencies of transport. These
free disposal and may be
ex¬ and the National Bank of Switzer¬ more and better medical care for
two indexes are as follows:
ported.
, '
\ r
land, as agents of their respective the people of our country." Spon¬
Production
Ton-mile
(2) Gold set aside in London in
governments; will, maintain con¬ sors under the program, Associ¬ year
Index
..Index
accordance with the provisions of
100.0
,
100.0;
ated
Press
Washington
advices 1940/tact on
all technical questions
Articles 2 and 3 of this agreement
1947„
1
111.9
117.5
stated, may be state, city or other 1948—
arising out of the agreement.
118-6
■
124.5
shall be at the National Bank of
123.7
, 129.9
(3) As opportunity offers, the public governmental agencies or
Switzerland's free disposal and
127.2
133.6
private non-profit hospitals. It is
Contracting
Governments shall
may be exported.
added that states will share in the
seek with the consent of the other
The committee then calculates
fund on the basis of their needs, the total ton-mileage of freight,
Article 5 •
interested parties—
sell

1949

(1) If the two Contracting Gov¬
English and French, both texts sured of investment of private
against all or part of the ernments. adhere to a general
being equally 'authoritative;
capital necessary to supply the
sterling balances held by that international monetary agreement
type of effective rail transporta¬
bank, either Swiss francs at the or if either government changes
(L.S.)
ERNEST BEVIN
tion service which, as the war has
official rate or gold. to be set its monetary policy in such a way
(L.S.)
PAUL KUEGGER
so strikingly demonstrated, is an
aside at the Bank of England in that the provisions of the present
economic 'must' in the public in¬
London.
agreement would be affected, the
terest, both now and in the years
2. The National Bank of Switz¬ two governments shall review the
to

378

756

(Billions) /

—_

land

time

62;

■

713
•

—

this

erland shall have the

607

1947.—

1948.—.

•

their seals.

Article 9

(Billions)

(1) For the purpose of the pres¬ relationships as not to weaken the
Passenger traffic prospects for
agreement the expression "the spirit of private enterprise, the
the same years are estimated by
sterling area"
shall have the vital force behind this country's the
committee as follows:
meaning from time to time as¬ progress. . , .
Railroad
Railroad
All-Agency
"Throughout American history,
signed to it- by the exchange con¬
ProporPassengerPassengerdevelopment has
trol regulations in force in the transportation
Miles r> '
Miles
'
tion
United Kingdom; and the expres¬ kept pace with, and even outrun, Year
(Billions)
(Billions)
(Percent)
■'
the/increase in population, the 1940.
23.8
38.7
:£ 62.
sion "Switzerland" shall mean the
50.0
62 V
80.0
settlement of unoccupied lands; 1947Swiss Confederation and the Prin¬
61
40.0
194865.0
and the growth of agricultural
60
36.0
194960.0
cipality of Liechtenstein.
and industrial production.
This 195060
35.0
58.0
(2) Transactions between the is one of the foundation stones of
This prospective total of rail*
Bank of England and the National
progress in the United States.
road passenger traffic is much be¬
Bank of Switzerland are to be
"The war
strikingly demon¬
considered as
transactions be¬ strated the essentiality of the rail¬ low that of the war years, or even
the prewar peak attained in 1920*
tween the sterling area and Switz¬ roads.
They are no less essential
but is greater than in any year
erland.
in times of peace, not only as
from 1927 to 1941, and greater
(3) Transactions entered into service agents of agriculture and than the 1941 level of 29
Vz billion
by the government of any terri¬ industry, but also as potential
passenger-miles.
tory within the sterling area or by arms of national preparedness."
The committee couples its esti¬
the Swiss Government are to be
Nevertheless,
the
committee mates of railroad traffic for the
considered as transactions entered points out, "many uncertainties
years 1947 to 1950 with the warn¬
into by a resident of that area or lie ahead of the railroads"—not
ing that they are necessarily speconly the uncertainties which face ulative in character, and subject
pf Switzerland, respectively.

■

(1) The Bank of England shall
have the right at any time to sell
to the National Bank of. Switzer¬

on,

Ton-Miles

1940

might develop would result from
inability to so adjust cost-price

of their respective policies,
(3) The National Bank of and in particular witti-a view to
Switzerland shall at
all times preventing transfers between the
area
and Switzerland
maintain on their No. 1 Account sterling
which do not serve direct and
with the Bank of England a mini¬
terminate the agreement and the
useful economic or commercial
mum balance, the amount of which
agreement shall cease to have ef¬
shall be determined in agreement purposes.
'
'
/ fect three months after the date of
with the Bank of England.
such notice.
It shall terminate
Article 8
three years after; the date of its
(4) The Bank of England shsill
Any sterling held by the Na¬ coming into force,
at all times maintain On their.
unless the
No. 1 Account with the National tional Bank of Switzerland shall Contracting Governments
agree
Bank of Switzerland a minimum be held and invested only as may otherwise.
balance,
the amount of which be agreed by the Bank of England, ! In witness whereof, the under¬
shall be determined in agreement and any Swiss francs held by the
signed, be ing duly' authorized
With the National Bank of Switz¬ Bank of England shall be held and
by their respective governments,
invested only as may be agreed
erland.
|
have signed the present agree¬
by the National Bank of Switzer¬ ment and have affixed, thereto
Article 3
scope

unemployment

Railroad

Proportion
(Percent).

Year

past will be wholly reversed, but
they may be interrupted, by fail¬
ure to solve the problems of in¬
flation on the one hand and post¬
The most serious

Railroad

Ton-Miles

living which, despite . wars, de¬
pressions and natural disasters has
constantly risen. . .
"It is not likely that long-term
economic upward trends of the

Article 11

■

paragraph (a) above, against
gold to be set aside in the
name Of the National Bank of
Switzerland at the Bank of
England, London.

the other.;

*:•

All-Agency

ent

the con¬
tracting governments in the
light of the estimated balance
of
payments
between the
sterling area and Switzerland,
determined

ties, they shall maintain contact
wherever the monetary relations
of the one offect the interests of

such additional sum as may
be

sterling area.

responsible for its
with third par¬

shall be alone

area

increased above a,
of £ 5 million, plus

nature to

monetary relations

countries outside the sterling
and Switzerland to the

;

with the

not thereby

maximum

residents of the

be cred¬ (c) transfers to r e sidents of
the
Switzer¬

of a current

(4) Notwithstanding that each
of the Contracting Governments

residents

(b) payments to residents
Switzerland; or

Bank of England, provided
that the balance standing to
the credit of that account is
,

ments

.of the sterling area;

ited at the official rate to
National

for making—

transfers to other

(a)

disposal to make
persisent and most significant ele¬
payments of a current nature ment of the
counry's history has
to residents of ' Switzerland,
been economic and social prog¬
and to use Swiss francs at
ress, resulting in a; standard of
their disposal to make pay¬
.

the availability of Swiss
the disposal of residents

of the sterling area

(Continued from page 1020)
stopped growing," the committee
observes at the outset. "The most

ing at their

francs at

Switzerland-

fa) against sterling to

9 (3)

(2) Subject to the provisions of
of this agreement, the

under the exchange regula¬
tions in force in that area, are

permitted; to make to residents

in Article

Article 2

area,

Transportation Trends

(b) to enable residents of coun¬
tries outside the sterling area
and Switzerland to use sterl¬

hereof.

(acting as agents of

Switzerland

to residents of

sterling area; or

Bank of

and Switzer¬

land; and

Switzerland;

(b) payments

the Swiss

Swiss

the sterling area

transfers to

(a)

Thursday, August 22, 194$

CHRONICLE

& FINANCIAL

THE COMMERCIAL
1044

"with

noted, was made on the basis of

operating conditions as of the end
of the year J945, and takes no ac¬
count of increases in wages and
prices already made in 1946, nor
of

future

These

increases.

in¬

sharpen the point of the;
committee's concluding statement
that "the problem confronting the
railroads is either Jo
increase
their traffic, to greater volumes#
than here suggested, or to insti¬

creases

tute further substantial economies

in operation, or to raise their own
prices for services rendered."

NAM Head Praises
Truman Economy

Order

Robert R. Wason, President of
the National Association of Man¬

made a statement on
Aug, 2 in which he expressed
gratification of the directive is¬
sued by President Truman to Fed¬
eral departments and agencies to
reduce expenditures as a means
of combating inflation.
"In using
the words, 'one of the most effec¬
tive means' of reducing inflation¬
ufacturers,

ary pressures

'is to reduce Federal

expenditures,"' Mr. Wason de¬
clared, according to advices to the
New

York

"Times,"

"the Presi¬

now forcefully, and we hope
effectively, has come to grips with
what NAM and other organiza¬

dent

tions

have

months."

been

emphasizing for

•'

1045

$
f'

by that amount, for. if the wages
the purchasers are not " also

raised

United States that we are so

less

pendent on our exports for full
employment that we cannot allow
our costs to advance to the point

paid by the purchasers, and

it lowers their standard of

(Continued from page 1008)
;

ly * a return of his revolving capi¬

;

Treasury in 1937, and the raising
of
member : bank " required re¬
from 13% to 26%, in order

serves

from

save us

anticipated in¬

flation, and which, instead, threw
lis back into the depths qf the
depression, will not be forgotten.
It leaves us with the feeling that
neither
the
Treasury' \l nor the
Federal Reserve Board yet know
enough
about
inflation! to^be,

'manufacturing, including profit,
it includes the

material that

raw

which the

turn out to

The

that

cure

may

belief'

among;;

an excess

economists

of money available

for the purchase of scarce

is the cause of inflation

goods

is well-

nigh universal.
The belief probably has its origin in the fact that
an inflation of prices often followed a, large influx of gold from

'■

other

wages

and profit of another pro¬

ducer.

than the disease. ^

interest

includes

borrowed

.which is just
lender for the use
of his money.
Taxes are wages
paid, e. g. to the government or
other authority for general serv¬
ices which they, supply.
Rents
are wages for the use of land, and
property. Profits are part of the
wages for the use of capital, men¬
tal
and
physical.
Depreciation
and similar charges are included
money,

paid to

wages

countries, such, for instance,
as
that which was brought to
Spain, from Mexico in the 16th
in revolving capital as wages for
century, and that which followed
the introduction of the cyanide the wearing-out of property which
must be replaced. The consumer
process for the extraction of gold
from,, low-grade ores.
InV most of the manufactured product is,
it may be said, paying wages for
cases of this kind, however, in¬
flation of prices is due to the in¬ the use-of, or the, loss of, the
manufacturers fixed capital* i
crease
of ^ industrial
activity

brought about by the arrival of
Under such
: Conditions it was the competition
for skilled workers and the higher
| costs of production due to the hir¬
ing of unskilled men that brought
much-needed money.

about the inflation of prices.
Without money and the

based upon it there can be no'ex*

| changes, except those of
barter.

;;

common

A plethora of money and

credit, however, cannot, of itself,
raise prices; it can increase busi¬
ness and
industrial activity, but
without raising wages and profit
per unit of work it cannot raise
prices.

It is essential that the supply of

including its velocity or
frequency of exchange, and that
embraces bank credit, should be
ample for all exchanges.
Any
money in excess of that amount
can not enter into circulation; it
money,

•

and

time

re¬

in the

Banks, earning
Regardless of what is

tongue .at the present
the y contrary,
excess

sooner

its inflationary proclivity, is laid,
the sooner will banking* and, in¬

deed, the political economy of na¬
tions, be freed from an incubus
that has shackled them for many

generations.

Then, what is it that produces
inflation?

produce inflation
money
must have entered into
f. circulation. But there is only one
way in which money can enter
into circulation and that way! is

"the wages group, of
if we'interpret wages
should, through "wages."

through

costs,"
as we

or,

Primarily the word "wages"
applies to the remuneration of an
employee. Wages,, however, may
properly
be
considered
as
a
generic term, and we may adopt
the meaning attached to it in early

l times.

Towards

the. end

„

of the

dark ages Wyclif said "The wagis
of synne is deth," and, later, wages

signified "a; payment for the
possession of property."

use

Capital

expenditures

may

all

be reduced to terms of wages. The
so-called employee exchanges his
services and perhaps the use of
his tools for the capital of an em¬

ployer, paid out as wages.
The
employee expends his wages—his
capital, on such things as food,
clothing,
education, recreation,
and rent for housing, etc., that is,
for
sustenance, which,
as
raw
material,
is ; transformed
into
energy and experience.
He may
also

invest

tools, etc.
ance

wages,

duction

produc¬

material,

raw

may,

represented
b,y
collectively by "the
be

;

of costs."

every

connected with the pro¬

expense

distribution

and

any¬

thing is. included in the selling
price, it follows that, provided the
product has not been sold below
and

prices

must

cost,

wages

the

If the cost of produc¬
remains the same and the

same.

tion

price rises, it can be due only to
increased
profit;
but
profit is
wages,/

and;; thereto?^ prices and

wages are still the same,

•

certain

amount

The unexpended bal¬

is profit.

.But the wages

re¬

If he
that output; the

cost

production at

once

rises

out

work

are

employed

standard wages,, and as. they, are
inefficient the cost; of production
must rise.

himself from

save

loss the

employer must fajse the
price of the product.
And so
price rises have the appearance
of preceding wage rises. But price
rises do not precede wage rates
per: unit of work done. They are
exactly concurrent if other factors
remain the

same.

what

From

has already been
said,; it follows that money can
enter into circulation in only one
way—through the wages group of
costsi that is; through: wages, and,
further, that prices are the equiv¬
alent of wages.
No matter how
much excess money may be avail¬
able for circulation it cannot

one

way-^-that is wages.
Inflation

prices

about in two ways:
tition for

brought

(1) by

compe¬

goods at a time
plenty of money
(.2) by
raising wages. The first implies
that wages have not been raised
when

with

scarce

there

which

buy them;

and. therefore

the

increase

prices must have been caused by
giving a higher profit to the pro¬
ducer. The second type, brought
about by rising wages, is much
more
dangerous than the first.
Indeed, other things remaining
the same, the first type can raise
prices pnly in a$ far as it raises

and

standard

living of those who
rises at the
expense of others whose standard
receive higher wages

whose

those

standard

must rise by

prices

exactly the increased

amount of their wages.

And so is
begun the ascent of the conical
spiral of inflation which only the
heroic

most

endeavor

constant

Hitherto

raised

That

wages.

wages can
not be otherwise than concurrent

with

when

rise

is evident

prices

distinguish

between

it is very
"per unit of

wages and wages-rates;

simple

work." ', If

add

workman does half

the amount of work for the
wage,

above

same

the price will certainly rise
the
wages-rate.
If we,

however, take the total wages for
a given amount of
work, wages—
not wages-rates—will be the same
as prices.
The misunderstanding
has been due to defective

ing ability
ticians.

Wages

are

reason¬

the part of statis¬
*

paid to

■

hands

worker for

competing

measures

can

stop;

long, that higher wages enable
to buy more of the goods; we

produce, is absurd when we real¬
ize that wages and prices are syn¬

We should, indeed, be
well off with wages «£
day and correspondingly low

onymous.

just

$1 a

aggregate wages double, it prides' as We would be with $10
takes $2 to buy that which previ¬ a day, except that if our prices
ously cost $1; a $25 war bond at in terms of gold are lower ,thaa
maturity will buy only half that those of our competitors we should
amount of commodities.
have to pay more for our imports,

distinction has been

With the data we

now

have be¬

fore

us, what can we do?
Our
hope hangs upon our systematized
knowledge of the causes of infla¬

Armed with that knowledge

tion.

it should not be beyond us

to find

During the war, prices
have been held down by ceilings,

remedy.

but

wages

Under

have been forced up.
conditions

such

duction of

The
of

cure

the

not

Federal

the

Reserve

the

pro¬

the goods limited by

and' the

welfare
should

and with
the United

cure,

of
lie

the

hands

it the
States,
of

the

Congress.
It is not difficult to understand
how

spiraling
inflation
takes
place.
Wages and the cost of
production are the same thing.
Aggregate wages and aggregate

prices rise equally. Every penny
paid as wages becomes prices. The
price of a finished article is the
same as

the

the wages used in making
material added to: the

raw

expended in finishing the
article, provided neither of them
wages

sold

under

cost.

If the

price
of the article is then raised, it
means that the amount of profit
has
been
raised, but profit is
wages of the manufacturer.
If the profit of a

manufacturer
$10,000,

has been raised, let us say

That,

than we
we

however,

right to expect,
have, some evidence of

have

greater productivity.
Certain classes of workers have

selfishly forced up wages at the
expense of similarly skilled and
able workers whose wages have
not been raised.

It would, there¬

fore, be unfair to freeze all wages

level. In common
decency and justice the best plan
would be to raise, the wages of
at the present

all

those whose wages

have; not

already been raised, let us suggest
20%, and freeze all other wages
and profits.
Strikes would have
to > be
banned under a heavy

Prices would rise to the
but it would stop
the inflation spiral.

penalty.

level of wages,

It may

be asked: well, why not

let all prices rise?
that

our

restore that ^ standard,'
That, however, reduces the:new
standard of those whose ; wages ;
were first raised and the demand
for more wages continues. Wages
double and double, and the value
of money
(wages) halves and
halves. Money becomes too scarce
for: the demand, and; if that de?«
mand. is not met disastrous un- i

worki to

paper money.

Boa^d. The ca,u^e is rising wages, amtit

raise

other

those

When

down.

rise in prices precedes a

rise in
wages, except under special cir¬
cumstances, hasi demoralized the
relations between capital and la¬
bor for a long time, for labor
unions are not slow in: using this
argument to their advantage i in
a

than

aggregate

ordeal.

fallacious economic principle that

Wages in terms <?f gold and unit

for

worse,

by some that in time, with greater
production and greater productiv¬
ity per man, prices will come

but nevertheless

accepted

ters

in
lead

wages
may

suicidal inasmuch as it obstructs
both industry and commerce so
much that they cannot survive the

The

certain extent be

cumulative^.

That* however, only makes mat¬

demanding higher
that they also

order

ceilings cannot continue, for as
soon
as
profit ceases production
will come to a stop.
It is held

ment will to

their previous more abundant life.

effect rather than the cause; it is

same

countries, especially those for ex¬
port; otherwise our exports will
have to be sustained by subsidies
at the expense of domestic pro¬
duction. The cry that has served

living is lowered are not going to
submit tamely. They are not long

ex¬

exactly the

buyers.
■

productivity must not be greater
But

cept when a product is sold under

are

competitive prices

our

beyond the reach of foreign

are

■

placed in circulation.
This pre¬
cautionary remedy is aimed at the

prices

de¬

that small.' extent - both
In 1945 the gold backing of the and to
profits, and if profits are taken dollar was reduced from 40%' to wages and prices would haye toas an equivalent of wages, spirals
25 % * and the "required reserve" be raised to maintain the same
v
ing inflation can be produced only against deposits in the Federal Re¬ standard of living. h.
in that proportion represented, by
serve member banks was also re¬
If we are to maintain our pre¬
profit to total wages, It is not a duced from 35% to 25% in order dominance among the nations, the
dangerous type, for as the price of to provide more money; so we are distribution of rewards for work
a commodity rises it issues an in¬
really ascending the vicious in- must take first; place. ^ages o£
vitation to other producers to com¬ flatidh
spiral, and the higher we any kind must not be raised with¬
pete in the market, and as pro¬ go the faster we go—in geomet¬ out knowing the source from,
duction grows prices, if not in¬ rical
progression^ If it cbntinues^ which the increase is to, come. ;
terfered with by other agencies, the
gold and other backing of the Disregard of this 'principle has .*
will fall.
Inflation brought about dollar will become insignificant
already lowered the standard of
by rising wages is, on the other and the mad whirl will continue living
of those groups whose
hand, very dangerous; it is the until, near; the end, it is limited wages "have not been raised andf*
primary cause of spiraling infla¬ only by the speed at which the naturally, they also demand higher
tion.
printing presses can turn out fiat wages1 for the same amount of

under-' the

been said to show that wages

which

we.

must pay

f It is imperative'that our prices,
m;;.to y use
another word, our
workers were not his employees,
Wages, must be kept low, for the
such employment would probably reason that in our highly mech¬
be not only in a; distant locality
anized
American
industry ■; one
but of a different kind and quite
worker produces more in the ag¬
unsuited to the disemployed work¬
gregate than one worker and his
ers.;
;/'/;;r
r■ 3? "'-r:: v:'
'' dependents
can
consume.
The
It Will be evident that if one prosperity of our country thus
class of worker receives higher depends
upon
the exportation,
wages for the same amount of small as it is, of the surplus pro¬
work,; the increment is paid first duction, If our wages, that is. our
by-the purchaser of that work and price, is higher than that of our
then, in addition to that, through foreign competitors, or if the ^im¬
his having been/deprived Jof that porter is too poverty-stricken to
amount of purchasing power, the pay the price, our workers, who;
employment of, others and, still produced the surplus, will be disothers will be unbalanced.
The employed,
and that, disemploy-

en¬

either of these except

ter

heading of interest and rent and made between these two types of
which
would
probably not be inflation. The remedy or preven¬
raised, could be counted upon to tive which has been in use, tenta¬
give a lower price, and as the cost tively, for many years applies only
of the finished product is made- indirectly to either of them and
is more applicable to the innocuous
up of wages, the raised price of
the car would be the same as the type than to the more dangerous
raised wages with a deduction of type. The preventive favored by
interest, etc., which was not raised the Board of the Federal Reserve
and
which
would be
compara¬
System is that of limiting the
tively insignificant.
Enough has amount of money capable of being

ceived by the employee are mere¬ J-

which

materials

their

or
;

all

that small part of the cost 0£ raw

required

money does not produce

The

inflation.

reserves,

Federal, Reserve
y no interest.
every

tion

that specter, as regards

excess

including the

business,
therefore,

During the recent General Mo¬
tors Corporation strike,
was as¬
serted by the strikers that a 30%
rise in wages would raise the
price of a car by a very much
smaller
percentage.
It is ap¬
parent that
no
allowance was
made for a correspondingly large
increase
in
the
wages
which
would in justice have to be paid
to the workers producing the raw
material.
If this were done, only

only lie inert

can

serve

Everjr expense connected with
conduct5 of:-any" productive

the

wages group

credit

output of work.

deliver

rise

trusted with remedial

worse

certai|i

forces..

living

they will buy that much
other goods, thus disemand the employer must either suf¬ ploying workers who would have
of the employer.1 The- exchange
made that amount of goods, until
of ^ manufactured product for fer the loss due to the, worker's
inexperience and inefficiency or' they can find other employment.
money is a return of the revolving
It is quite likely that the profiteer
capital of the manufacturer. It is, raise ;the price.; Inr boom times,
when employment is good, there is may furnish that employment in
indeed,
his wages, and it • is
utilizing his profits iii further pro¬
Equivalent to -all; thef costs of great competition for workers. In¬
efficient men who are normally
duction, but; as the disemployed
It is much the same in the case

hh|? entered into his product, and
m^asufes in that raw material in turn has cost

fails - to

tal.

allow-

our prices to
for it with
period.1 of depression*.
It is also
not sufficiently realized in the

it is

The answer is

prices are finally fixed

by the action of other economic

employment will follow. And so
it may go on until our war bonds
—the hundreds of billions of dolr
lars

spent in prosecuting the
valueless and are

become

war

wiped out.

limitation

The

at the

of wages strike

principle of collective bar¬

gaining. But why should we have
collective; bargaining and, indeed,
why should we have labor unions?
The conservation
the rights' of /
labor is a function of the Cort-?v
The members of Congress

gress.

delegating

are

burdensome,

troublesome duty to labor
who

are now

and

whose

leaders

beyond their control

depends upon

living

higher

their ability to force ever
wages,

selfishly, at the expense of

every

other class.

these

leaders

that their

However much,

may

be convinced

claims are honest and

equitable, it cannot be denied that
they have unwittingly

placed us

inflation

spiral

which, unless stopped with

drastic

the

measures
our
an

conical

at once, will be

control

beyond

and will lead

appalling disaster.

■

*;<•■■'?■ _;A.iv V-

-*t" Vl'-A-' .-rr^»' %"■•',

fr " '

^ ^ V'y^Vf/;';/

£THE .COMMERCIAL' & FINANCIAL' .CHRONICLE
bushels

Decontrol Board Reports
>( Continued :from page 10.11) •.
against the .tragedy of inflation,"
he asserted, adding;, "We hope that labor leaders

/•
will
,

Subsection 1A (E)

empowers

the

Price

Decontrol Board to deter¬
mine whether ;any subsidy is to be
re-established in whole or in part
for

any of the commodities listed
wisely their new-found power,
•in Subparagraph :(8) (A).
4
restraining any impulse to get
These statutory provisions are
theirs while the getting is good—
! while the country is hungry for •set forth in .Footnote *1 below.
the things our .factories arevpow.
B. INFORMATION AVAILABLE
turning out at record rate, hq»$Z
use

"We hope
that / industry! and,
farmers will hse ,wisely: their; in¬

TO THE BOARD

:■

creasing freedom from controls,
restraining any impulse to obtain
more than a fair profit or to with¬
hold goods in the hope for more
profit.
^:
"And we hope that consumers
will use wisely their vastly in¬
creased
purchasing power, re¬
straining any impulse to buy more'
than each .really needs.
"We hope that labor will re¬
strain, any; impulse, to ^advance its
Interests against the interests of
the country.'?
4
,.
.

The textuf the Board's

hs; reported

decision,

the. Associated

Press follows:

Subparagraph (B),quoted above,
provides
that
thie board: shall
make its determination "after due
notice of

affected

industries

public hearing and full
opportunity for representatives of
ers
or

and

to present their
in writing.'^

The

board issued

Its notice

consum¬

views orally

modity.
The board's treatment of each;
of these groups as a single
com-;
modity for purposes of this Aug.,
•

determination

recontrol

decontrol

gives recognition to theinterrelationship of sources

supply,^ prices, and uses be¬
the

tween

different

each group.;
has deemed

elements

undertake any extensive and
arate examination into the

sep-!

nu-!
individual elements which!

merous

exist

Moreover, the board
it impracticable to.

within,

each

commodity-

group.

and released

hearing son
Aug. 2, 1946. The notice provided
that the public hearing' would
decision;!
start on Aug. 12, 1946, and would however,
did not preclude the
be in four main parts, as follows: board from giving consideration5
T (A) /Grains for which stand¬ to a separate commodity within'
ards have been -established under; any group where facts sharply dif¬
the United States Grain Standards ferentiated the commodity from1
Act, as amended. These grains, the remainder of the group and
are: wheat, corn, rye, barley, oats, where
considerations compelling
grain sorghums, flax seed, mixed different and separable treatment
for the commodity^
grain; Aug. 12, '-46.
•(B) Livestock feed, or poultry to the board's attention.
feed, processed, or manufactured
For instance, in the case of
in whole, or in substantial part/
grains, the board has treated flax¬
from these grains.
seed ?and by-product feeds as sep-:
; II Livestock and food, or feed, arate from the remainder of the
products, processed, or .manufac¬ grain group. In this instance, con-;
tured in whole, or in substantial ditions of
supply, prices and spec¬
public

DECONTROL

PRICE

BOARD

Price

■

Control Extension
•Act of 1946 was approved .by the
President on July 25. It extended
the Emergency Price Control Act
of 1942, . which had expired /on
June 30, 1946. In extending the
Emergency Price Control Act and
reviving regulations and orders part, from livestock. Aug. 13, '>46.
Ill Cottonseed
and
soybeans,
thereunder, the Price Control Ex¬
tension Act left certain food -and; and food, or feed products, proc¬
.feed commodities free from Pfiee essed or manufactured in whole,
^controls.
\
'
*
' or in substantial part, frmo cot¬
It provided that the question of tonseed and soybeans.
Aug. 14,
whether price controls should or •46.
should -not be re-established • for
•IV. Milk^ and food-or feed prod-*
,

these commodities should be - de¬ nets,-processed or manufactured
termined
by
an
independent in whole, or in substantial part,

-cordance

with

certain

standards

set forth in the .act.
v
The Price Decontrol Board has
made

its

determinations

this

matter and has filed with the Fed¬
eral

Register its directive contain¬
ing
these
determinations.' The
purpose of this statement is to set
forth the reasons which governed
the board in reaching such deter¬

minations.- : /:./;/:;/'//vThe determinations of the board
and the reasons therefor were ar¬
rived

from milk. Aug. 15, '46.
The notice provided that all in¬
terested persons and groups, in¬

eration.

trol of

annual

tonnage of

food grains, is the
tor. With wheat,

decision that protein feeds be re

ject to regulation.

Otherwise pro¬
would readily escape con¬
by being mixed with th<
carbohydrate grain feeds wfcicl
the, board has directed shall bon
teins
trols

Unue

case

season

will

have

been

GRAINS

established under the

States

United

Uniform

Grain

estimates

current

essed

manufactured in while

substantial part therefrom."

livestock/*
Ucts

the

Second,

hre beef/ veal, pork/ lamb

price control and that subsidies ir
June 30 shall be

effect prior to
re-established.

In the public mterest

compelling

reasons

conclusion

that

there/arc

leading to the
unreasonable

prices in meat should be avoided
Meat,' according to. the Bureai
of Labor Statistics, accounts1 foi
19% of the food budget of ;th
moderate income famjly.
Main
taining price levels of meat lo
enough to provide an /adeqiia
proportion of the total meat su;
ply to workers in low-incom
brackets is important to attain :ful
productivity.
f
.

the

prices

products.
\
The board has /determined >tha
this commodity shall be subject tc

the

demand

maximum

defined

is
or

mutton, and a great variety o
processed meats, fats,; and- feec

normal

under

FOOD OI

ucts processed or
whole or: substantial part iron
The principal/ prod

would very shortly lead to the re¬

ceilings

withir

teed ^prod¬
manufactured ir

carry-over

Standards Act, as amended, omny moval
of
livestock -or poultry feed .proc¬ statute.

LIVESTOCK AND

This .^commodity
livestock or food

is lower than last year.-

toward

fall

FEED PRODUCTS

lowest since 1937, the total supply

increase

factors whict

product feeds which
this grain group.

000,000 bushels. Despite this rec¬
ord crop, because the carry-over
the last

regulation.,

same

products eligible for recontrol'ap¬
ply with equal force to -the by¬

corn, the Country has ln prospect
an all-time record crop of 1,160,-

from

make soybean and cottonseed feec

these two

in the

free

addition, the

determining fac¬
as

elab^

are

controlled, it is essential that mix¬
tures of "feeds which contain these
by-product feeds be likewise Sub¬

wheat and rye. Wheat, accounting,
as it does for over 95% of the to¬
tal

by-product feeds

orated in the section of this
opin¬
ion devoted to cottonseed and soy¬
beans. To implement the board':

^The/r board4 Tdund- {thaf t mea

that may be established for these

prices

grains are required
at least as great as

above June 30

Recent

increases in

by law to be
parity prices.
the index of

have risen unreasonabl
ceilings plus Sub¬
Reports of these unreason¬
able price-increases were received
by the board from a wide variety
sidy.

paid by farmers, which
governs the determination of par¬ bfisohrees///;^
The reported / price. advapces,
ity prices, have raised the legal
minimum at which price ceilings ranged, in the case of livestock,
could
be established for wheat. from 20% to 50%, in the case oI
Similar increases would have to wholesale meat prices, from 35%.
be made in the ceilings on some of to ,80%," end
corresponding; ln-|[
the other grains under consider¬ creases have been reported in. the
ation.
case of retail meat prices. A part

prices

at unanimously
and
this time to be heard. In addition, in
by-product feeds - separate from
Third, though the prfces;! of
statement is the joint expression time available on each day/ the
other
grains and whole 'grain these food arid/Seed grains rose
of opipion
of Jthe 1 three board board invited members of .the pub¬
feeds in this group,
.
'
:
! sharply
and ^tp
members.
lic who were not scheduled to be
unreasonable
.

The board has determined that

A. STATUTORY PROVISIONS

heard to present f heir views. Qne
flaxseed and the by-product feeds
hundred and eleven persons ap-,

peared before the board and made processed in whole or substantial
the Emer¬ oral presentations, representing in part from grains in this group
shall be subject to price controls.
gency Price Control Act of 1942,: the aggregate a greater number of
No subsidies were In effect' ion
by the Price Control Extension organizations.
June 29,1946, with respect to flax¬
Act of 1946. Subparagraph (A) in
The record of this hearing is
seed -and by-product feeds; and
this paragraph provides that no
available for inspection at the of¬
none have been prescribed by the
regulations under the Emergency fice
of the board and consists of

Paragraph 1A

serted into

bridled bidding for the very lim
ited current stocks.1
'
6 ' The conditions /dictating ^econ

1937-41

available
for
nex'
year. In view of these estimates,
This commodity group is defined
the board anticipates that the size
as
"grains for which standards; of the current crop coupled with
D.

The
grains included under this definiindustries ,and representatives of
iion ar£ wheat, rye, corn, oats/
consumers, wou$ be given an op¬
feed oats, mixed feed oats, barley,
portunity Tto present views /and
grain
sorghums, % and
flaxseed
economic or other data by filing
(soybeans.wore included with cotr'
written vstatem<§hts, nndt supple^
tonseed /in a separate commodity
mentary statements by way of re¬
group).
The
major processed'
buttal. The board received a total
products included are carbohy¬
of 104 written statements.
drate feeds and by-product proOral presentations were made at
tien feeds.
the hearing by all the organiza¬
As already indicated the board
tions and tgroups that requested
has considered flaxseed and the

cluding representatives of affected

than- the

Taking the four feed'
grains«rCorn,; bats,x barley; and
sorghum grains, the department
estimates a total supply of 140,800,000 tons, almost equal to the
previous "record' year,, 1942 and
16,800,000 tons better; than, the
1938-1942■; average., With an indi¬
cated decrease: of EjL% in the num¬
ber of
grain-consuming animal
units this year from the previous
year, the Department expects the
supply of feed per animal* unit
during the coming year to be ; 8%
larger .than last year.
t
; .This
estimate pf prospective
long supply is corroborated by the
price behavior of the commodity
markets. For example: The price
pf furtes for corn, oats and bar¬
ley for December delivery has
dropped below the .June 30 ceiling

However,
the Department of
Agriculture
estimates
that this
supply will adequately meet our
domestic food and feed require¬
ialised use made it necessary for ments, the Government's export
the board to give to flaxseed and program as presently formulated,
and will, in addition, permit an
by-product feeds separate consid¬

■

agency, the Price Decontrol Board,5
on or before Aug. 20,
1946, in ac-

better

For these reasons .the board has
generally
treated
each
of
the 'Prices/#'/::^;
The same considerations apply,
groups listed in the statute as a
to a lesser degree, in the case of
single' commodity. This

DETERMINATIONS

.The

^hursday^August -22^1941

average.

sumea that the Congress expected
that it generally would consider
each group listed as a single com-;

■

Title

(E)
1

(8)

was

in¬

Price-Control Act of 1942 or'

un-i

board,

the

written

statements

filed

and

board/ has; directed

levels

upon

from

thjep release

controls in July prince early Au¬

gust, and

with ./the

season

able levels.

pie will

Thegfollowing

exam*

illustrate; this trend for

No. 2 hard winter wheat at Kansas

-^;H!ghest-^£.; ;'•
June 30

for the most part prices;;ye-|
ported were beyond question un-|

ever;

above iceilings/ ! i>lus!
-

-The bohrd has

■?

found -thatJ the!

supply of meat has been and will j
continue to be short in relation
demand at reasonable

to]

prices. It 1st

estimated that production of

meat;

will be somewhat smaller than iri

City.

increases is attributable
lapse of subsidies^ TIowh

these

td lhe

reasonably
approaching subsidies;

prices have been
returning, rapidly to more reason¬

harvest

Price

Recent

the

/r"/'
New

comparable period last yearJ

It is well known that consumer;
that
der the Stabilization Act of 1942
Ceiling
July
-/Quotation
Ceiling
the transcript of the oral presen¬
demand has far exceeded meuf:
wheat, rye, corn, oats, feed oats,
shall be applicable prior to Aug.
$1.885/a
$2.23
$2.01
$1.97
tations.
-;^//// /
5S mixed feed bats, barley and grain!
supplies over the -last several
21, 1946, to the agricultural com¬
In view of these three consid¬
Views were heard from various sorghums, and any livestock / or
modities, food and feed products
■£ ftlSK?
erations, the board has been un* :years
sources: representatives of affect¬
poultry fee processed or manu¬
listed in Subparagraph (A).
able to find that resumption of
Got Many Opinions on Meat
ed industries, including producers factured
entirely from any one;or
Subparagraph ;(B) requires the and processors of raw commodi¬
these controls will serve the pub¬
more of these whole grains shall
The board received many state¬
Price Decontrol Board to ' direct
lic interest.
It i$ to be noted,
ments regarding the enforceability
ties, wholesale distributors and re¬ not be regulated.
any of these commodities shall re¬
however, that should the board's and
tailers, state officials, representa¬
1, The grains, other than flax¬
practicability of meat price
main
free from
price controls tives of labor
expectations as to price trends, or regulations. These statements dis¬
unions; and consum¬ seed.
after Aug. 20, 1946, unless it finds
as to the adequacy of the current
ers' representatives.
closed the failures that have oc¬
: 5 The; board has directed thatihe
all of the following conditions to
/The board/ in addition, received grains and grain feeds listed in1 crop prove to be in error, the curred in the past, particularly
.exist;
board is authorized on its own ini¬
data and facts from various agen¬ the
during periods of extreme short
preceding paragraph remain
tiative to reconsider its determin¬
(I) That the. price of such com¬ cies of the United States Govern* free from
supply or uncertainty v?ith -respect
price control because it
modity has risen unreasonably ment, : including: 4he Department has failed to find that the public ation and to direct recontrol in ac¬ to the continuance of price Con¬
cordance with subparagraph (C).
above a price equal to the lawful of
trols.
*;'j
State, the Department of Agri¬ interest would be served by their
2.
Flaxseed .and
maximum price in effect on June culture, the Department of Labor
by-prodpet
regulation. It reasons are 'three-;
/Nevertheless; it appearsthat the
■feeds/^^-s
30, 1946, plus the amount per unit and the Office of Price Adminis¬ fold.
:
Government has at hand adequate
With respect to flaxseed and by¬
of any subsidy payable with re¬ tration.
techniques to enforce these regu¬
First, the estimated supply of
product feeds, the conclusion that
spect thereto as of June 20, 1946,
C. COMMODITIES
late ons, including the overriding
these grains after the harvest of
and
prices have risen unreasonably
The statute directs the board to the current record corn and wheat
ceilings on cattle. It has available
since June 30.! 1946, that ithe sup¬
(II) That such commodity is in determine whether
slaughter controls which can be
"any com¬ crops appears to be adequate to
short supply and that its regula¬
to
channel r livestock into
If ply is short, that regulation is en¬ used
modity listed in Subparagraph meet the estimated demand.
tion is practicable and enforce¬
estimates
(A)" shall-continue free from reg¬ these
prove ' correct/ forceable and practicable and will markets that comply with the reg¬

The

■

able, and

(III) That

public interest
will be served by such regulation.
Any commodity which continues
free from regulation: by virtue of
direction of the board issued on
or before Aug. 20 may at
any sub¬
a

The board is well

aware

that the term commodity may be

during the
Price

of enacting the
Extension, Act,

course

Control

sequent time, be returned to con¬
trol by direction of the hoard if

treated broad groups of commodi¬
ties as a single commodity. Sub¬

the board finds the necessary con¬
to exist.
Paragraph 9 of

paragraph (A) lists similar broad
groups * and the board has as-

ditions

these

grains would be removed serve the public interest is sub¬
price controls shortly after
stantiated by information obtained
given a wide Variety of meanings. harvest, as being no longer in
at the hearings. Thus, prices for
The Congress, in considering vari¬ short supply. (See Footnote 2.)
ous decontrol amendments offered
The Department of Agriculture linseed meal have increased as
ulation.

the

from

presently estimates the domestic much as 57%, and prices for glu-r
supply of corn this year at -ap¬ ten fed have increased as much as

ulations.

It has available

subi

sidy program which is helpful to
bring about compliance.
has been

informed

that the Office of Price

Adminis¬

The

board

tration has -laid plans to enlarge
proximately 3,671,000,000 bushels,
25%, over June 30, 1946, jceiling its staff. and the, scope < of its; en¬
50,000,000 bushels more than were
The. b9ard
available for the previous -record prices. / The need for continued forcement,program.
season of 1942-43, and 620,000,000 ' : regulation is evident to avoid un¬ has
concluded, accordingly, that

Volume 164

Number. 4518

THE

these regulations are
practicable
and, enforceable, :
The board has
authorized :fhe
re-establishment of the subsidies
that were in effect on this com¬

modity

COMMERCIAL & FINANCIAL CHRONICLE

able

frmnfanp other oil products. tinue, after Aug.

tion

For

these

determines

the

reasons

convinced

that; their

regulation /will

board

free

' continued
the public

serve

-act ,and

1942,

the amount that
would otherwise be
payable. This
reduction

Will

provide

the

con^

sumer with a more

G. MILK AND DAIRY

resentatives of affected industries

PRODUCTS

This
feed

and

consumers
to present their
views ..orally or in writing, shall
have power to determine

group includes milk and
feed products processed or

Such

after due notice of

by; one-half from

amended.

manufactured

stantial part

whole

whether,

sub¬

this act and the Stabilization Act

This
fined

commodity

group

"cottonseed

©r; food or

de¬

soybeans

feed'products

processed
manufactured in whole or sub

stantial part

from

cottonseed

soybeans." The principal products
included are edible oils and pro¬
tein

feeds.
V V "C': ■?
The board has determined that

maximum prices regulation shall
be re-established over this com¬
modity group,? and over mixed
.grains consisting in substantial
of soybeans
There
subsidies involved.

part

are

The price of this
commodity has
risen unreasonably above the law¬
ful maximum price in
effect on
Jiine 30, 1946. The
prices of soy¬
beans, soybean, meal and soybean

oil. have risen substantially above
ceilings, the oil as much

June 30
as

.40% and the meal

much

Cottonseed-was not subject to a
filing ;on June 30,vbut cottonseed
oil increased in the
neighborhood
of ;25% above June 30
ceilings.

The jsame: and higher proportion¬
ate increases have -occurred since
June 30 in the oilseed cake and
meal products.? No substantial de¬
cline has occurred. ■
•
-:,

; Supply of these «otonseed and
soybean
products
is/ extremely
short, These products are
closely

;

y interrelated; with mother<,;wegete'
ble and animal • fats. t For.; - most
purposesv these; oils > and fats are
used interchangeably/ The short¬
.

ness

;
h

of supply of the

cottonseed

and soybean oil products must be
measured in itenns rof; the country'a ©ver»all supply of I and ^de¬
mand for related fats-arid- oils.;:'A

Requirements Top

Supplies

economy.

I BEANS AND PRODUCTS

:The .country's present require¬
ments ior-fats: and eils far exceed

>'i

unless it finds:

The board has determined that
this
group
shall continue free
from regulation after Aug. 20.

| The Department of

(I) That the price of such com¬
modity
has-risen unreasonably
above a price equal to the lawful
maximum price in effect on June
,

Agriculture

anticipates that milk will be in 30, 1U46, plus the amount per unit
Short .supply even though the de¬ <©f any subsidy payable with
re^j
mand be somewhat reduced
'by spect thereto as of June '29, 1946
price increases. The industry's es¬ and

(II) That such commodity

timates'pi demandand the' De-

partment of Agriculture's produc¬ short supply and that its regula¬
tion is practicable and
tion goals over the past few
enforceable,
years,
as well as estimates'for the com¬
and

(III)

ing year, have all exceeded the to¬

demand,

least

until

proach of the next flush

the

That

the

will be served

tal available supply.
In view of
these facts, the board has conclud¬
ed that the supply of milk and
milk products will fall short of

public interest
by such regulation.

If in the case of any commodity
listed in subparagraph (a) such
board fails to direct, on or before
Aug. 20, 1946, that such commod¬
ity shall not be regulated under
this act and the Stabilization Act

ap¬

season.

Status of Milk Controls

of 1942,

amended, maximum

Regulation of milk

and its prod¬ prices and regulations and orders
enforceable and practica¬ under act shall be applicable with
ble, Both State and Federal con¬ xespect to such commodity with¬
trols have been applied to this out regard to this paragraph (3) .

ucts

commodity /group

commodities
are

which

Administrator

<not any commodity listed In; paragraph
subparagraph (a) shall be regu¬ ply. §v;i
lated, after Aug, 2Q, 1946, under

subsidy on April 1, 1947, required are; however,
many; other milk- of 1942, as amended. Such board
by; the Statute.'
'
i£»cb. - .' food and feed products which are shall
direct that any such com¬
■'■■
.,>,>•?11...
; of substantial
importance to the modity shall not be so regulated
F, COTTONSEED AND SOY-

A '

Price

from milk.; The prin¬

gradual transit cipal products are fluid
milk, but?
tiori to-the removal; of the; 'entire
ter,"cheese and ice cream. There

J'V:
I.-'

such

longer in short
supply. No maximum .price .Shall
be applicable with respect to
any;
agricultural 1 commodity ' during
any calendar month which begins
more
than 30 days after date of
enactment of this section, unless
such commodity is certified to the

board,
a public hear¬
ing and full opportunity for rep¬

interest.

June 29, 1946, subject
to the limitation
that, on or before
Jdn. 10.;, 1947? the
subsidy for the
remaining .period will be reduced

20, 1946, to be
regulation under this
the Stabilization Act of

from

1047

.as

under

this

case

effective

of State

board

:is i

con¬

of this

which

every

column should

The

commodity be avoided.
hoard

market.

prices
no

bearish

be¬

reason

the

Commodity prices

still

reader

bullish

well-selected

stocks.
v:

Shortage

War I

0PA

(Continued from page 1010)
an average of around a# a
pound
modity prices in general -climbed
over
the old OPA ceiling.
It is
from an index average «of 260 at
estimated
in
the
industry that
the time of the Armistice in 1919
to a high of 337 in the summer of during this free market only 900,000 hides -were sold, or less than
1920. From that date, they began
one
half month's need of hides, ^
to fall constantly each month for a
which would indicate that
the
year, so that in August, 1921, they
had gone off 183 and were down present shortage is due almost en¬
to 154,
This was less than half tirely to lack of supplies of hides
in this icountry,
j
their price in August, 1920. From
"This shortage could be correct¬
this low, they slowly recovered to,
ed with a few months by importa¬
315 in the spring of 1923, after
which they again alowly declined tion'but hides in the worid's mar-i
ket are selling at lOtf to 150 a
with seasonal and other fluctua¬
pound
over
the
OPA
ceiling.
tions to a low of 94 in February,
Therefore,
for the
next
few
1933.
months the industry has only two
From this low they cimbed to
choices-rra very low ^production? of
166
in
April, 1937; again fell shoes and leather at the present
throughout 1938 and 1939. From OPA
ceiling price or adequate
this point, they gradually cimbed;
production at a price high enough
upward until they again reached to
>get a sufficient supply of hides
166 in May, 1941. By government from
foreign countries.
controls, the priceIndex level was:
"There is some expectation of W
kept down to about 200 until heavy kill of cattle between now
peace name in 1945. In a general and Oct.
1, but even though. this
way, fish followed the same cycle
happens it will not correct the

are

the

com¬

shortage existing at the present
time, as these hides will not be
cured, shipped, and available for
use by the tanners until about 60
days after 'the animal "has
killed.

been

"Practically

in the
has for
lin fayor vpf price

every one
shoe and leather industry

four years
control in hides and leather.

The

pply|thin| :thatha$;jDrpiight^ou

facts— Before' a ^change "in this ' opinion is * that
best barometers while rapidlyarising (hide -prices

World Warl; Ithe^^
the' fish market

•of

there

being

now

commodity

decline

be interested.

Following World War I,

Here

'(HI.) That ithe public.interest
tions.

Because

went up almost continu¬
ously from 1923 to 1929. Hence, I

What Happened After World

able: and

vinced that theTuhlicUn^^
quires that undue price increases

lead¬

1923 through 1932 while the stock

the

market

However,

again to be

declined almost continuously from

(C) if in the case of any com¬
modity-listed in subparagraph la)
such board, <on or before Aug. 20,
controls, for many years.
The board has found some in-1 1946, does direct that such com¬
stances in which prices of milk modity shall not be regulated un¬
and milk products since June 30 der, such acts, the board
may at
haveexeeedecDthe
amy. subsequent time direct that
such commodity shall be so regu¬
ings plus the July subsidy!
most of these cases, the excess has lated if it finds:
been small. In some -cases (the »ex^
with certain variations depending
(I) That the price of such com
cess vwasu'jimreasbnabte^^The^^
modity - has risen unreasonably upon how much labor was needed,
formation received to adate,: how¬ above a price equal to the lawful for /processing^ canning or freez*
ever^ seems to evidence restraint maximum price in effect on June ing the fish after it left the boat.;
and
to
show that, in general, 30, 1946, plus the amount per unit Let ylrie /now ^return tofirst
prices have been in the neighbor- of sapy subsidy payable-with/
-statement
that
an * important
hood -Of the June 30 ceiling; plus spect thereto ss of June 39,1946,
avent^:;^haa^yl^pei^^/lhere y;.:,at
the subsidy. Therefore, the board and
Gloucester, riamely, there has been
has failed to find that the price
(II) That.such oommodity is iim a fbig break Sii the /boat price of
has risen
unreasonably above the short supply and that its regular JEish.
JTune 30 ceiliqg,*plus subsidy,
practicable: and enforce-'
Fish As a Barometer
■
with

results, and, in the

two years.

stock

(Continued from first page)

this

If fish

er, then cattle and
cotton will
tumble within a year; while shoes
and textiles will tumble within

being/in. short sup-i for

Stock Prices? Babson
tions

wholesale buyers of all commod¬
ities.

gin to

Price Declines and
y

this event which is happening in
Gloucester should be watched by

were

both' fresh and salt cod.

Thereafter,

eod—s

distasteful

are

These! would be still

to the
more

industry, it

distasteful to

the provisions of sold at around $2.50 and $5.00 re-: go through several months of
consequence,
fats and oils are still under Gov-; milk and milk products shall con¬ such acts and regulations and or-l spectively at that time.
During1 greatly reduced production, bring¬
tinue free of control.
ders thereunder snail be dpplica
ernment allocation.
However, it
World War I,Tbe^^xlces^^ strength-, ing about a shortage of shoes and
The inade¬
intends to watch prices of milk hie with respect to such com-; ened and
of
quacy of the country's supply of
reached a high of $3.75 lack
employment
in
all
fats and oils, the efforts to enlarge and milk products, it has Arranged modity without regard to this par-; and "$7.75
respectively in 1918. brancjies of the industry."
this supply, and the Government's to receive additional reports <on agraph (8).
Then came a break and the prices
;
ni———* •
(D) In the -case of milk, the; fell to $2.75 and $5,00 respectively
stepsrto preserve available sup¬ price developments since June 30,
Rep. Gallagher Dies
plies, even to the point of stopping 1946, and it will reconsider itsi board may consider and determine in 1919.
They rose again with
all export for famine relief after present determination if evidence? decontrol or recontrol on a re¬ general
Representative William J. Gal¬
prices and then fell off,
with ups-and-downs, to a low of
pec. 31, 1946, are well known and appears that price increases since- gional basis.
lagher,
Minnesota: DemocraticJune 30 are unreasonable.
do not need
elaboration,
(9) The Price Decontrol Board $1.50 and $3.50 in 1922, although Farmer Labor
Congressman, died
Issued this 2Qth day of August,
shall also have the power to de-i they did not reach their lowest
The same
is-largely true of cot¬ 1946,
on August 13.
He had been seri¬
tonseed and soybean meal cake
lermine, when maximum prices: prices until 1932. From then on
ROY L. THOMPSON,
are in effect with
and millfeed products. The
respect to any? fish gradually increased until last ously ill: since. August 11, when
pro¬
Chairman.
'
tein/ feed products derived from
he .was taken to the Mayo Clinic
commodity listed in paragraph (8) month.
GEORGE H. MEAD
cottonseed and soybeans generally
(aX, whether any subsidy or any
About 10 years ago, a new fish in Rochester, Minn, from Minne¬
DANIEL W. BELL.
serve the same purposes
part thereof in effect prior to June became the
as that
bellwether.
In Glou¬ apolis. It was stated by Associ¬
served -by protein feeds
30, 1946, shall he re-established in
derived
cester, it is known as "red fish"; ated Press
advices from Rochester
whole or in part; and the
Footnotes
y. from
other vegetable and from
powers- but after it is filleted and frozen
of the Administrator, the Com¬
animal /sources. The products are
on August 13, which also said:
I Footnote 1:
^
and reaches the city where this
again, inter-related with the other
"He had been in failing health
Emergency Price Control Act of modity Credit Corporation; and column is published it is known
its

supplies.

has

directed

that

—

•

protein feed products and their
supply must be judged in the light

1942,

as amended.-

Sections la <e)

the Reconstruction Finance

Cor¬

by various names, such as "sea for some weeks, but had
delayed
perch;" "rose fish" or "white fil-!
having a thorough physical check¬
lets." In 1935, this *red fish sold
supply. "•
for one cent a pound at the wharf. up until after Congress had,«-ad¬
Prdtein feed supplies are short, act or the Stabilization
When World War II broke, it was journed.
Act of;
Most recent estimates of the De¬
IFootnote 2:
"Mr. Gallagher, a former Min¬
1942, as amended shall be applica¬
selling at about two, cents. From
partment of Agriculture are that ble prior to Aug.
Paragraph (1) of Subsection 1A this figure, it climbed to nearly neapolis street sweeper, in retire¬
21,1946, with re¬
supplies available this year will spect to -livestock j milk, or food: br (C) of the Emergency Price Con¬ seven and one-half cents.
The
ment on a city pension of $24.43
be/less than last year. The short- feed products processed or manu^ trol Act of 1942 reads:
price has now suddenly broken to
a month, sprang into national at¬
mess of siipply throughout the last factured in whole or substantial
Agricultural Commodities— (1) three and one-half cents —A de¬
season is well known and
tention in 1944 when he won elec¬
compels part from livestock Or milk; with On the first day of the first calen¬ cline t)f about 50%.
the conclusion that supplies for respect to
cottonseed or /soybeans, dar month, jwhich
tion to Congress from Minnesota's
begins more
of the

country's total protein feed

the current season

will

continue

well below demand.

prices in
this commodity is in the public in¬
terest and regulation is
practicable
•

Controls have been successfully
since 1943,
In addition to the separate importance of

maintained
-

oils

derived

from

their control is

these

products

poration to

pay

subsidies in con-'

nection with such

commodity shall
8. (A) No maximum
prices and 'be'limited fri accordance
with any
no regulation or order under
this: order <of the board.

food

or feed products
processed
manufactured in. whole or sub¬
stantial part from cottonseed or
or
or

Maintenance of stable

and enforceable.

(8) & 9:

soy

beans; with respect to grains

for

which

standards

established
States

under

Grain

amended,4

*or

have

the

Standards
any :

been

United

Act,
livestock

as
or

poultry ,feed processed -or manu¬
factured in; whole of substantial
-

than

days

enactment

after

the

date

section, Sec¬
retary of Agriculture shall cerSecretary of Agriculutre shall cer¬
tify to the Price Administrator
each ; / agricultural
commodity
which such Secretary determines
to be in short suply.
Thereafter,
en

the first day of each succeeding
month
the
Secretary

calendar

integral part of, part therefrom.
shall certify modifications of such
to, ? the '^control of f" (B) The Price Decontrol Board certification
by
adding
other
other fats and oils, because cot¬ shall
proceed forthwith to consid¬ •agricultural
commodities
which
tonseed and soybean oils in. their er whether the commodities listed
have become in short supply and
processed stage are indistinguish¬ m 'subparagraph/ (a)! shall con- by
removing from such eertificaand

ncessary

What About Oattle and Cotton?

But here is the important point

this

which

every

reader

should

note:

Third district

over

Representative

Richard P. Gale, Republican, who

was serving his second term.
In
Following World War 1, fish was
of the first important com¬ the Minnesota primary election
modities to break in price. It was last
month, Mr. Gallagher won xefollowed by cattle, hogs, cotton,
nomination.
etc. Shoes, shirts and other manu¬
factured goods fell a year later. As

one

fish

led

the

before World

procession
Wars I

upward

and

II, and
led the procession downward fol¬

lowing World War I, the question,
is whether other commodities are
to

fish

again now?

so,

Stewart Hall, Inc., in N. Y.
Stewart

Hall, Inc., is engaging

in the securities business from of¬
fices

York

City.

Mitchell

Place,

New

V-; -I'

;

y'-

Thursday, /^ugust 22,

CHRONICLE

THE COMMERCIAL & FINANCIAL

J-:-.V-..-.

' i': '

.«;{ jfyn-.'t ;v" V

Stock Price Trends Since 1870

Industrial

INDUSTRIAL STOCK PRICES
IN THE UNITED STATES
January 1871

•

M, >u

July 1946 Inclusive

1925

1880

1875

i87l;t

Cowlti Cooemittiou

(Continued from page 1009)
line,i that the low of 1907 falls
below that line, and the
low of 1914 (so far as Stock Ex¬

a'-little

change data go) appreciably above
that line. But we know from the
New Street market that prices
were nauch lower in the 1914 pe*
riod of suspension than they were
the Exchange
closed or
when it reopened.
Whether the
Market's low—-if the : index had
been calculated on New Street
when

prices—would have fallen above
or below the A line I do not know.
I have arbitrarily placed it—see
dotted liner-ow the A.line^
Two highs (1901 and 1916) fall
little above the B line, and two

other: highs (1906 and 1909) a lit¬
tle below that line. In no instances
Is the deviation from that line
as

great

5%,

The 1927 Break-Out

Early in 1927 the index broke
violently out of the band in which
it had been moving since 1892,
treated this

I have

break-out

complete failure to follow-the
pattern laid down — "ot pc data
a

that should

Index to

(r Potr'i,

I9IH; inheqntuh I

1 The stocks included in the Cowles Com¬

logarithmic from the high of 1937 to the.low
1942
was
still
appreciably
scale) exactly as much below the of
1929 top at the time hs its lower greater -than it would have been
level was above the 1932 bottom if it had been working between
at that time, I put in the lower two lines with the slope and dis¬
line E and the upper line F. The tance apart of the lines A and B.
recovery from
1932 reached, in I, therefore, repeated the oper¬
1937, a very small percentage ation, placing the lines J and K

level would be (on a

considered in de¬

Industrial

mission

Stock Price Index are,

in the early years, few in .number and.
In
even
as a
group, hardly representative of
other,words, I have treated it as
American
industry as a whole.
For ex- n
the physical scientists, handle the
ample, as late as January 1886—fifteen
years after the first month of the Cowles
problem Of "the huge error." And
index—there are only eleven stocks in that
the abnormality of the 1927-1929
index.
Of
the corporations represented,
movement, is later confirmed on
four were coal companies, one was a quick¬
silver mining company, and the remaining
the chart by the extent of the
above the corresponding point on with the A and B distance apart six were transportation companies—Adams
succeeding decline.
The line F and, with ;the lower line (J) as Express Co., American Express Co., United
But where shall we place the the upper (F) line.
States Express Co., Wells Fargo and Co.,
much above the 1942 low at that Pullman Palace Car
lines after 1932? The movements had placed the top in 1937.
Co., and Oregon Im¬
But the rise from the low of time as the upper line K was be¬ provement Co.
of other economic series extend¬
1932 to the high of 1937 was, of low the 1937 high at that time. If
By August 1896 (a month to which I
ing over much longer periods
the market were to follow this have tied one of the trend lines) the
than that available in this study course, once again much greater
than would be contained within "damped vibration" hypothesis, I number of stocks in the industrial index
suggest that, after each major eco¬
is still small—only twenty-two. But these
nomic collapse, such as 1873-77, the width of an 1892-1927 A-B should expect to see a top some¬ twenty-two are, as a group, much more';
where in the region of the K line. representative of industry as a whole than; '
band.
J I, therefore, repeated the
1893-96, and 1929-32, lines and
were the eleven stocks of 1886.
Two of the
bands of this type, when resumed, operation to see how closely the The industrial index has reached

ciding what that pattern was.

at lower levels.

resumed

are

But

apart was the

would

(G)

same as

high of 1937 at that time. The low
of 1942 fell virtually on this line

to within less

line

and

evidences

than 3%

turn down here

«*•

Oil

been

Trust,

introduced

American

Fuel

Illinois

Co.,

a
in the
By January 1900,

After 1896, the number of stocks
index

increases

rapidly.

there are thirty-eightand

questions to

•

have

Ore Co.,

group,
-«•.

Cotton,

and
Iron
Corp., General
Steel Co., Minnesota
National Lead Co., National
Linseed Oil Co., Standard Rope and Twine
Co., Tennessee Coal Iron and Railroad Co.,
and United States leather Co.
Colorado

Electric

Iron

full-sized—1929?

I shall leave these

But, though the, vibrations were
"dampening" rapidly, the decline the reader.

stocks of the 1886 list :
from the index, but*

stocks

Sugar Refining Co., American Tobacco Co.,
Colorado Coal and Iron Development Co.,

the "damped

1927,' aiid stage

line in

dropped

new

—American

the upside, as the market broke

the

company

been

thirteen

down in 1937 and up in 1942, or
will it break through the K line
on

coal

have

vibrations" hypothesis as it turned

nrv^T

four

of this K

shown some slight
hesitation.
Will it

has

miniature—or

The Recent High

band of the width of the 1892"R

line

at that time as H was below the

tendency would be to work back
into and possibly a little beyond
A

market

that of the
A and B lines and of which G was
as much
aboye the low Of 1932

Assuming that, after 1932, the

1097

the

the lower

two lines G and H whose distance

question
tentatively
after
no¬
ticing that, since 1932, the market
has acted as though it were going
through a series of "damped vibra¬
tions."
I hazarded the guess that
it might be described accordingly,

low

approach

I answered this

how much lower?

acter.

-• •

they are; as a,
still more representative char¬

September certificates indicates this is what the Treasury is going to

June Dividend Payments

do.

...

.51

•

Publicly reported dividend paylAents
by
corporations in the
United States continued at

"Our

high

-y

Reporter
' >

'w/.

hasten

*1' 10 ^

,' x2''

' *•*«•

;

Payments during June of this year
were only 1.-3% below the record
June total of $505,900,000 paid a

the Department of Com¬
The Department's ad-

year ago,
merce

said.

Vices further said:

;J /'For

1946,

30,

dividends totaled
increase

corporate

$970,000,000,

3.8%

period

three-month

the
June

ending

from

the

.
.

three-month

the

period ending June'

30, 1946, as compared with the
4ame period a year ago, was a
19% increase by corporations en¬
gaged in trade.
"Next best

showing

iailroad group,

was

was largely due to a divi¬
dend declaration by a large com¬

crease

pany

that paid

the same

dividends in

periqd of 1945, and to

initial distribution by a

that made

company

declaration in 1945.

Dividends paid by mining corpotations

during

June period of

the

this

April-May-

year were

larger than during the
riod

year ago;

porations
group

were

group, up
power

.groups,

same

12%
pe¬

payments by cor¬

the
up

miscellaneous

10%;

finance

7%, and heat, light and
and

each

communications

about 3%.""

thinness of the market, together

with the

quoting down of prices, is largely responsible for the reces¬
sion rather than the pressure of securities
seeking liquidation. . . .
It is the opinioii of most followers of the market that a sizable order
to buy or sell securities at this time would have

prices, because of the thinness of the market.

marked effect

...

Despite the lack of interest in government securities at this,
time, it is not expected that prices, will move too far in either
direction, although a good trading market is still looked for.
.

bring them more in line with governments,

reporting member banks on Aug.
amounted to $6,678,000,000, compared / with holdings of £
Treasury bills by these institutions _of $760,000,000, certificates of .
$8,832,000,000, notes of $4,453,000,000 and bonds of $27,015,000,000. . . .
It is quite generally conceded that member banks' holdings of bills,
and more particularly certificates, are earmarked against government
deposits.
,
The total of these two issues, $9,592,00.0,000 compares
with government deposits of $6,678,000,000, which gives a leeway of
$2,914,000,000 for these institutions in short-term issues above gov¬

...

ernment deposits.

as to whether a margin of slightly
short-term securities over-government de¬
posits is large enough to allow these banks still to sell certificates
and use the proceeds to purchase longer-term obligations. . , .

This raises the

question

less than $3 billions in

While some of the Treasury notes are

Likewise, the municipal bond market is under some uncertainty
it is believed that there is some liquidation yet to come in these

securities, in order to clean up issues that have not moved out as
readily as had been expected.
.
With the technical position of the
government, corporate and municipal markets, under somewhat of a
cloud of uncertainty, it is not believed that there will be any .need to
chase prices up in order to acquire securities, until some of the sit¬
uations overhanging these markets have been cleared up.. ..
,

liquidity necessary

All markets heavy

1946,

contributing

!' factor to the lack of action in the Treasury market.

the

Government deposits with the

14,

::y

may be a

a new

deposit changes

It is believed in some quarters that, the adjustments >that- are 4ak«* *
ing place in the corporate bond market, as prices move down to-

;

by the

17%.I This in¬

has been very light and the

ume

same

for

demonetization

pected.

•

government securities markets continue dull and listless,
somewhat declining tendency as investors, and traders remain
the sidelines.
Although prices have given some ground, vol¬

period a year ago when dividends
$934,600,000. Sharpest rise

dividend; payments

By JOHN T. CHIPPENDALE, JR.

The

with

totaled

the

market with

;

during June, totaling $497,600,000, the Department of Com¬
merce
announced on August 14.

level

government, in order to
public debt, may be in the
issue of restricted bonds sooner than is ex¬

It is also believed by some that the

short enough to be counted ,

bills and certificates, there is still a question as
whether the total of air short-term holdings of these institutions
in

with the

to
is

surplus of those issues that could be
.
It is the opinion of some that the
positions of the member banks in short-term securities have about7
reached the point where they are not likely to be cut much farther*
because of the need to retain these obligations for liquidity, ?pur-.V
large enough to give them a
traded for longer maturities. .

poses.

.>/:7
continued redemption of certificates and later in the;a,

The
government deposits diminishing
The

decline

year

deposits, with the member banks,
since the end of the Victory Loan, has been substantial and the con¬
tinued redemption of bankheld securities by the Treasury indicates
that these deposits will be pretty well liquidated in the not too distant
future.
It is hoped in most quarters of the financial district that
the Treasury will accelerate the retirement of bank-owned certif¬
government

...

icates

that these institutions will not be in

short-term
ment

issues

obligations.

order
.

a position to dispose of
acquire longer maturities of govern¬

The latest redemption of $2

billion of the

the V/2% notes will
institutions. . ...

these

effect on
If

positions

long-terms

short-term

the

further reduce the short-term
'
' *
*

positions

of the member banks have

about

approaching levels where it may not be advisable to
have them go below, then it seems as though this is a development
that will have an important effect on the longer-term Treasury
issues. V;
In the past, because of the large holdings of certificates
and the willingness of Federal to keep the rate for. this security pretty
reached or are

')
A'^Ti'r^:'-'¥
.f*
' p: 1 A t ^;.y? »-.': T"».
THE COMMERCIAL & FINANCIAL CHRONICLE
-

well pegged, the commercial: banks sold certificates. Rnd used the
proceeds to purchase longer-term high coupon, obligations. .> v This
created a demand for the' longer-term bank eligible bonds, which has

been

rwt

government obligations
* 2
V '
* A + * ;*
;;
\
It has been the desire of the monetary authorities to have the
banks iri a position so that they could not be sellers of short-term
on

longer maturities.

...

Walter

It is the contention of

position to have them further depleted because of needs to

J maintain present positions in such issues lor liquidity, pur¬
poses?,, ;..
(

g„*

' o

v "A

<\ \ /L,

.?,/

NON-BANK SELLING

side.

Whyte

The

reason

tell

this is that Triyas

all

you

impressed
by my arguments that I came
to

=By WALTER WHYTEs

outside

believeurr thehi^

possibility.

just finished looking at

The limiting Of the

I'argued

of the end products of
which • slowed

many

industry

where there is not
on

the

same

the longer-term high coupon

irregular

acquaintance had them on his
desk, so I looked through

levels

desire to give up these issues to take

bonds, then there is likely to be
among the bank
eligible

movement

price

bonds....
j

doeslpot mean that the commercial banks 'will not be inter¬

issues, be¬

ested in purchasing .the longer maturities; of the eligible
cause there is still need for
income as in the past. . .

don't

know.

The

fact

that

all the recom-i:
given here last.;
week would have been for thef
record only.
You couldn'tj
have gotten a single stock ati;
the price
range advised.
:
gone up,

that exponents of a bear mar¬
Some minor reaction in pros¬
It is possible that a bear!
ket were1
overlooking thaV
pect as market builds for
market is forming.
second half, or third
But thatjl
quarter
nearby rally. Support some¬
belongs in the realm of crystal ;j
where around 198; with 195 earnings, would be way up. I
based this on the belief that gazing. And I'll let somebody;;
I've

With short-term positions of the banks probably nearing

stocks didn't go up in the past
week is not
important. Had;

they

up
ability of the member banks to shift from two articles.
Both said the
production in the beginning of
shorts into longs, through the continued redemption of short-term
bull market is over. The only
the year, were now
securities, would mean the elimination of an important part of the
being
demand for the longer-term bank eligible bonds. •.. .Savings, banks difference between the two is
manufactured and delivered.
find insurance companies have been and still are sellers of the eligible that one cost a dollar pnd the
I pointed out that such items
bonds, which have been and still are being bought by the commercial other one was free.
Actually, as car
bumpers were now
banks, although the deposit institutions recently have not been in¬ neither cost me
anything. An being turned out. Fractional
clined to reach for the issues they have been acquiring..
.

;i.H }'

1049

being three in favor of a bearmarket-(my friend and the
two articles)* I took the other

•

Says—

long-term obligations; it would be imperative to have control over
.

r-•

' '

mendations

the Federal Reserve Board that in -order to prevent the commercial
banks from selling short-term securities and putting the proceeds into

bank, purchases and holdbi^ of government and other securities, . .
Would; such strinffllng' controls over bank Oredit and port- .
i folios be necessary; jif. tlife short-term security holdings of these
| institutions are brought down to levels where the banks arc not

Markets

„

Issues in order to take

■

Tomorrow's

powerful factor in the market action of the longer-term

very

motors for ice boxes and

vac¬

else do that.
ket

shows

What the

and

me,

mar-!]

showed]

last

week, is that it will havef
setback to 198, orMaybe 195, and theii turn|
minor

around

and

again.

;

will say
will be

that the next rally?
significant. Ifv wiilf
have; to show a specific per-!'

being de¬ formance; an ability to over-;
them." ;
^
livered.
Other equally im¬ come old obstacles, jf; But all |
Not having anything better
portant small items, held up that is to be seen. Meanwhile, j>
to do, particularly with the
by labor difficulties, were you bought a couple of stocks :
stock tape reduced to a crawl
now
coming out and compa¬ last week. Hold them for the j
by the walkout of Stock Ex¬ nies which couldn't
deliver time being.
Maybe before
change employes, I argued
cars, ice boxes, electric stoves, this week is over you'llJge]t
against the principles ex¬
The ones you;
etc., because of the absence of the others.
pounded in these pamphlets. essential
parts would now or bought are as follows: New*
Actually, had my opponent
shortly be; in a position to York Shipbuilding between]
taken the bull side, 1 would
make deliveries to the con¬ 18 and 19 and Republic Steel
have argued for the bear
between 35 and 37..» The
sumer.
uum

cleaners

were

SELECTED MARKET

It probably will result in a more selective market for the bank
eligible bonds, and not the same fear as in the past that the price of
them will run away on the up side. . . . There will likely be a

tendency to wait for period of price adjustments to acquire the issues
. Likewise it is believed there may be more switching
earlier maturities of the eligible bonds..

they want, m
cut of the;

out¬

Also with sizable increases in commercial loans and the

commercial banks seem to be in a position
to wait for prices of government bonds to go to .levels that they,
consider attractive before making commitments.

side.

But'

with

the

count

look still favorable, the

Our

Reporter's Report

(Continued from page 1018)
No Backing Up Here
Underwriters

and

dealers' may
have been bewailing the touch of
indigestion which overtook the
new issue ^market these last few

weeks, but bankers who • under¬
wrote the Northern States Power

former got

Another advantage-that oc¬
curred to me is that prices for

these

products

have

while

gone

down (Monday) tor
18^, the latter to 36 V2.
*

Other stocks

mean¬

are

still

the final points

away from the
levels. I repeat them.

fe#'

buying]

Beth-1
be so much
As I warmed to my lehem Steel, between 106 and
subject I waxed more elo? 108; Standard Oil of N. J.,
quent when I suddenly real¬ between 75 and 77L Internar
tional Paper between 45 and
ized that I was
neglecting

profit

would

greater.

formerly in Company's new preferred stock
47 and Jones and
offering to shareholder found no market action and
LaughliiM
BOSTON] MASS;—Richard S. the U. S. Army;
arguing
cause for complaint.
Baillie, Charles D. Burgess, and
about statistics and funda¬ between 46 and 48.
(Special to The Financial Chronicle)
Rather, this deal proved a de¬
George C. Smith, Jr. have been
*
'*
*
mentals.
Fortunately, my
CLEVELAND, OHIO—James P. cidedly gratifying piece of busi¬
added to the staff of Draper, Sears
The market is still in dead
McCausland and Bruce B. Ranney ness so far as the underwriters and friend didn't think to
4c Co., 53 State Street.
bring
have become connected with Ball, their dealers were concerned. Ex?
up the subject either, so I got center but leaning to the bull
(Special to Tb*. Financial chronicle)
Burge & Kraus, Union Commerce piration of subscription rights dis¬
side.
closed the shareholders had ex¬ away with it.
BOSTON, Mass.—Gerard Haw¬ Building.
ercised their rights to the extent
More next Thursday.
kins, Jr. is now with' EdwardE.
of better than 80% of the'275,000
(Special to Tax Financial chr6Nicle)
Mathews Co., 53 State Street.
The point is that I can
-Walter Whyte
HARTFORD, C
—John shares of new 3.60% preferred in?, make
out a case for the bull
views e^presseff ^
Palmer, Jr. has become affiliated volved.
(Special to Tag Financial chronicle)
This left the bankers with only side just as easily as for the article do not necessarily at an#
BOSTON, Mass. — Kenneth G. with Kennedy-Peterson, Inc., 75
time coincide with those of the
about 45,000 to 50,000 shares un- bear
./•'
'
side.
Of course
Colby and Robert T. Hamlin have Pearl Street.
the Chronicle.
They are presented,«»
taken and the balance was placed
become affiliated with F. S. Mose(Special to The Financial Chronicle)
;
directly with investors without weapons will have to be sta¬ those of the author only.}
ley & Co., 50 Congress Street. Mr.
tistics and the
interpretation
DAYTON,
OHIO—G. George resort to the open market.
Hamlin was; formerly with Arof news events.
Becher and John II. Lytle, Jr. are
thus G. Perry & Co.
Actually, I
Cincinnati (las & Electric
with
Slayton & Company, Inc,
To the extent that Columbia don't know if the bear market
Salle Street.

'; (Special to Th* Financial CfcRONictK)

was

;

Third

(Special to Tag Financial Chronicle)

National

Bank

Building.

LAMBORN & CO-

Corporation's is on us and the end of the
forego
their
sub¬ bull market has been seen.
(Special to Tag Financtal Chronicle)
scription rights, the public, early
All I know is what the market
DETROIT
MICH.—Charles L. next
Webster Securities Corp., 49 Fed¬
month, should receive the
Anderson is with II. Hentz & Co.,
tells me.
eral Street.
opportunity
of
subscribing for
Buhl Building.
*
%
4e
A
common stock of the
Cincinnati
i
(Special to 'Th* Financial Chronicle)
Gas & Electric Co.
Last week it told me that
^(Special to The Financial Chronicle)
Gas

MASS. — Ralph
S.
Henry is connected with Stone &
BOSTON,

Electric

99 WALL STREET

stockholders

NEW YORK 5, N, Y.
■VP

BOSTON, MASS.—Norman W.
DETROIT, MICH.—Thomas F.
II.
€. Wainwright & Co., 60 State Stebbins is with Paine, Webber,
Jackson
&
Curtis,
Penobscott
Street.
Austin has joined the staff of

••in

—

m'".

iv:*

(Special ta Tag Financial

Building,

Landis

has

John

become
Nuveen &

Co.,

135

ing in the U.S. Navy.
^ .:;v

;«V'~-1. Vv

Dumke

ILL.—-James

Trade

Building.

has

(Special to THg financial chronicle)

the

is with Cohu j&
Polk Theatre Buildings

Death

underwrit¬

Sentence11 Clause

se¬

the

Holding
Com¬
pany Act, and the company, ar¬
rived at a price of 26 for the
shares
in
their
deliberations
toward the end of last week.

Columbia

Gas

common

was

not her

Cincin¬

one

common

eaqhsix^Columbia

How far it will go
and how long it will last, I

held.

Hop-

wood, 115 South Seventh Street.
He was formerly-with Herrick,

Establiske d 1880

H. Hentz & Co.
Orders Executed

}

tC\

'/>

)

Members

Pacific Coast Exchanges
hi--: ■:

■

shares which remains unsub¬

scribed.

holders. '

='•

i'1

New!

Chicag0

Exchanga
Exchange

Cotton h Exchange

Exchange,
Board

Inc.
Trade

New Orleans Cotton

Exchange
And other Exchanges

Members
New

York

Commodity

Schwabacher & Co,

Stock'

York-Curb';

New

proportion of the total of 2,040,000

■$.

f---

York

Neir

York Stock Exchange

New York Curb Exchange

•1

(Associate)

Chicago Board of Trade
14 Wall Street

New York S, N. Y.

N. Y. Cotton Exchange Bldg.

Securities

........

The operating company's
voting stock has been held exclu¬
sively by the big holding com¬
(Special to The Financial Chronicle)
pany
and this accordingly will
(Special to The Financial Chronicle)
PENSACOLA, FLA.-*—Raymond represent the < first, opportunity
CHICAGO, ILL.—John P. Pol- H. Cartledge is with F. M. Blount, which the general investing pub¬
Florida ;National
lick has been added to the staff of Inc.,
Bank lic has had of becoming stock¬
j.

Pacific Coast

fe pK \

thereafter, the bankers, if
MINNEAPOLIS,; MINN. — tyle the occasion requires, will pro¬
F,- Brownell has become associ¬ ceed with
public offering of that

La Building.

•'

*■

Dlgby 4-2727

Soon

Eckham

Swift, Henke & Co., 135 South

Exports—Imports—Future*

ahead.

Chronicle) •.;...

with Piper, Jaffray

rally

share¬

holders of record Aug, 22 have the
right until the close of business

nati fGas for

re¬
(Special to The Financial

SUGAR
r

there

Utility

Torrey, shares in the ratio of

CHICAGO, ILL. — Leonard E.
is with Slay ton. & Co., Waddell & Co., in Kansas City.
Inc., 135 South La Salle Street.;,

are

LAKELAND, FLA.—-Linton H. Sept, 9 next, to subscriber for tihe

Terry

ated
•

(Special to The Financial Chronicle) ;

cently been serving in the U. S.
Army. Prior thereto he was with

Mason, Moran & Co.

added

-'■/'

Keating
has become connected
with Daniel F. Rice & Co., Board
of

been

Merrill

Lynch, Pierce,
Fenner & Beane, Circle Tower.

(Special to Tag Financial Chronicle)

CHICAGO,

has

staff

who

curities, undertaken by Colum¬
bia Gas in compliance with the
Public

INDIANAPOLIS, IND.—Ray M.

associated

South La Salle Street, after serv¬
{-■

(Special ,to The Financial Chronicle)

CHICAGO, ILL.—Edward McP.
with

ti) .KUfh-i'

Chronicle)

Bankers

ing the distribution of the

COrtlandt 7-4150

Teletype NY 1-928

A Private Wires to Principal Offices
San Francisco

Monterey

—

—-

Santa

Oakland
Fresno

—

•

NEW YORK 4, N. Y.

CHICAGO

Barbara

Sacramento

»•,.-4

DETROIT

PITTSBURGH

GENEVA, SWITZERLAND

! ;;-•

l >/:

*.' y

THE COMMERCIAL & FIN ANCIAL- CHRONICLE

Securities
•

Now

Thursday,.-August 22,;-! 946

Registration

INDICATES ADDITIONS SINCE PREVIOUS

ISSUE

•
American Brake Shoe
New York(9/4)
tah
Common' stock is to be offered Initially for cash
Aug: 16 filed 199,10T shares (no* par) commom Uhder*;; sj co common stockholders of parent and topubliir holders
of preferred stocks of Community and Ohio in
writing—No underwriting; Offering—Shares will be of¬
exchange
for their shares.
Stock not t subscribed or issued under
fered for subscription to common stockholders in the
exchange offers are to be «sold for cash to underwriters.
ratio: of One addition share for each* four sharesi heldv
-

Cuba, N. Y.

Acme Electric Corp.,

132;740 shares; ($1 par) common stock.
Underwriters—Herrfck, VfoddM St Co., Inc:,; andJ First*

June

filed

Offering—To be offered publicly at $5|

Colony Corp.

;

share.

the

sale

PToceeds^Cbmpany will receive proceeds-from
of 68,880, shares and four selling: stockholders :

Unsubscribed shares Will be sold

will be used to- pay

Adirondack Foundries

shares of com¬
offered"hy9the1
company to- stockholders of record Sept. 5 at $10 per
share,, in ratio of one* new share- for- each? share held;
■Rights expire Sepl 30v Proceeds for expansion ofbuild*ings and facilities.
:

-'•v..-.

- (letter:
par)
preferred om behalf' of~:toecompanyan<%2,500- shares*
($1 par) common, on behalf of James? IC Nagamatsu*
President and Treasurer, and Henry T. Nlagamatsu, VicePresident and Secretary.
Offering—Price $110 a unit
^consisting of one preferred and one common share;. Ho
underwriting;
The company: will (use. its? proceeds, for 9
purchase or* lease of a factory for the. production of
^personal airplime which; il(har developed;. and text:.
general corporate purposes.

Aug: 15

New Bedford, Mass.

July 28 - (letter Of notification) 25,000 shares ($1 par)
eommoii.; Offering price, $11,50 a: sham'% Underwriter*—
Ames, Emerich & Co., Inc., Chicago Proceeds^-For ad*
dltional. workingcapital..\. •
f
;
,

June, 19

' -f-V\

:??•••

v^-(>;•'

•

Cargo Transport Corp., New York

Airline

ceedswillbeaddedtdgeneralfimds;(^^^^^:"r

:
*

'''5

,.l.

(

Armour and

:: ,i

Foods Corp.. of New York

(9/9.)

July 26 filed $1,700,000 of 5%; sinking fhnd debentures,
due 1962,. and. 120,000 shares of 5Vz% cum. conv. pre¬
ferred stock ($25).
Underwriting—Herrick, Waddell &
Co., Inc. Price—Debentures 99, preferred stock, $25 a
share. Proceeds—To purchase on, or before Sept 17 all
issued and outstanding capital stocks of David G. Evans
Coffee? Co.; Empire Biscuit Co.; San Jose Packing Co.;
and James A. Harper Supply Co., and for working capi¬
tal.
f

AllisrChaimers Manufacturing Co.

July 26 filed $15,000,000 2% debentures, due 1956, and
359,373 shares-($100 par) cumulative convertible prer

American Locomotive Co., New York

of first preference Rot issued in exchange will be sold
to underwriters. The 300;000 shares* of second preference

stock willibe offered: publicly^; The?: 1,355,240 shares of
common
will be offered for subscription; to common
stockholders of the; company ifc the ratio- of one-third

(9/16)

July 18 filed 100,00(1 shares each of $100 par prior pre¬
ferred stock and $100 par convertible second preferred
stock. Underwriting—Union Securities Corp., New York.
Price by amendment.
Proceeds—Net proceeds, with!
other funds, will be used to redeem $20;000,000 of 7%
(cumulative preferred stock at $115 & share* plus* accrued*

preference stock, Series A; 300,000 shares of convertible :
second preference stock, Series A, and 1,35592401 shares
common stock
(par $5).
Underwriter—Kuhn; Loteb & ;
Co., New York.
Offeringv-The 350J100 shares of? first
preference stock will be offered in exchange? to holders
of its 532,998- shares of $6 cumulative* convertible prior
preferred stock at the rate of 1.4 shares* of first prefer- 9
ence stock for eachi share of $6 prior preferred. c. Shaves
^

Co.r Chicago

Ju^y/ I2T filhd^ 350,000 shares tub:'par)t ycufttohitivr^

UndCrwrtters--Noi dnderwritingv Offerfng^-The
shares are offered: to stockholders of record? July*31

will be added
,

Fayetteville

in? ratio of one new share for each 104 shares held at $85 :
July 22s filed 125,000 shares of 50-cent par common,
per share;
Rights expire Aug. 16.; Proceeds^—Liquida?Underwriters—Newburger & Hano; Kobbe, Gearhart & ;
tiom of, $6,000,000? short term bank loans; balance to?
Co., and Burnham & Co., all of New York. Offering—
purchase additional land* plants, machinery^ etc.
The shares, will be offered publicly at $6 a share.. Pro¬
to general funds;

remaining B9;816f shares
Proceeds—Proceeds to go to

Arkansas West. Gas Co.,

stock.

proceeds of $656,250
'
j ;
r

The

June- 5 .filed; 33,639f! shares>of conunont stoclfe (par
$5).
Underwriters^auscberi Pietc^^
Rollins & Sons Jnc.
Offering—Stock Will be offered to

wdl use toe funds^forrits-buR^hg'

expansion program,:

vv;

ceeds—Estimated net

held

and

Agency, Inc., New York

the selling stockholder.

($1- par) common stock;
h American Fabricators* Inc;r Louisviile* Ky. •
Underwriters—By amendment: .■ Price- by amendment.
:Proceeds-~0£ the totals 35,OOOi shares arebeing sold byp Aug. 5* (letter of notification)* $100;GO(F oF 15-year con¬
stockholders and the remainder by the company.
The' vertible debentures* due 1961, Offering^Price $1,00(1 a
latter will use $60,000 of the proceeds to repay a bank ( unit. No underwriting; For additional -working; capitah
;
['•
'9 v
♦,.'k
"
^
<v''
0
( loan; about $300,000 for new equipment and $250,000 for
American/Homo Products Corp^ N. Y.
ground^ installations at various: points: in the United:
June 28;, 1946 filed 116,926/ shares of ($f/par) capital
States.
1
Air Express InternatT.

shares for each

toe publie; Price by amendment Shares are
being sold
S^filed,
by six stockholders.
5
,•
t
,
' .
voting common, stock ($1 par) and 589,500. sharesrof non«*
voting; common stock ($1 par), each unit consisting oi¬
Arkansas Western Gas Co., Fayettevine, Ark.
ls share of * voting commonv and 3 (shares^^ of ^^ non^votihg: Aug/ >12 filed.. 93,430 shareg.. ($5" par)' commonv stdck.
common;
Under^^ters--None^the* cotopany intends :to9' '
Underwriter—E. H. Rollins & Sons, Ind:, New York.
distribute its common stock directly to the public. Offer¬
Offering—Company is offering:the stock for^subscription
ing—Price $6 per unit.
Proceeds—Net proceeds esti¬
to present common stockholders at $10 a share1 in the
mated! at $1^179,000 will/-bemused to pay g mortgage on.
ratio* of ^shares for each 4/shares hel<k;;Unsubscribed
plant*, pay accounts^ payable; purchase: equipment* for
shares will be sold to underwriters;
Proceeds*—At same
building alterations and working capital*
time of common stock offering,
company intends to sell
to institutions $1,500,000 first
American Colortype Co., Clifton, Ni J. (9/4)
mortgage sinking fund
bonds, 3% series, due 1966, Funds from the- sale of the
Aug, 12 (filed 3Cf,00 shires ($100 ptor) cumulative? pre>
bonds au<^ common? stock?wilLbe used to retire?
$840,000
ferred stoek; Underwriters—To be supplied by amende 1
3%% bonds and $210,000 serial promissory note; It will 9
ment!
price by amendment.
Proceeds—Net proceeds
also deposit $600,000 with toe trustee under toe inden¬
initially will/be:added: to? general) funds, however; the^ture securing the first mortgage bonds.
Remaining pro-

^yi

filed! 435,00(1 shares

held by Louis E.
Golan, President of company, who
acquired them ISast Jiine 5 upon the surrender for can¬
cellation of $432,000 of notes ©f the;
company.
About
60;184 shares will be offered to stockholders of the com¬

will be retained by Golan:

PittsKwii^^^r9
196,5009)inits; comprising: 196S>5(JQ?sbur^'1^r

company anticipates it

Air

St. Louis, Mo.
July 24 filed 120,000 shares ($1 par) common?.
Under¬
writers—None.
Offering—Shares, being, registered, are

pany, including remaining shareholders of Cook's Impe¬
rial Wine Co., at $3,60 each and at the rate of 12' new

American, Cladmetals Co.* of

;

N.9;.••/:.£.y* *••••

'V' i',*V'9•• --'.-.V:'*■-

Aero-Fiight Aircraft Corp., Buffalo, N. Y.

Aerovox Corp.,

27 filed 950,000 shares ($1 par) common; stock;
Underwriter—DillOn, Read & Co. Inc., New York. Offer¬
ing—A maximum of 100;000 shares may be sold by com¬
pany to persons, firms, or corporations with, whom the
corporation had network affiliation agreements ortMarch
31.
The remainder will be offered publicly.
Price, by,
amendment. Proceeds-rTo) prepay (notes* payable; to: .ac¬
quire radio station WXYZ^ to/construoti broadcast trans¬
mitter for station KGO at San Francisco and for working
capital.
c

August 19 (letter of notification) 5,745
stock' (na par). Shares are* being-

June

&*Steel, Inc.,

mon:

•

issue of April 4.

see

American Wine Co.,

Watervliet, N. Y»

:■

For details

other persons in¬

Of the net proceeds ($292,940). $50,000';
9ShQes9#9:99;9l#;#::(9999^9^^
current bank loans j about $20,000
equipment, and the re¬
American Broadcasting Co:, Inc., N* Y.

price of $200,

Will he used for machinery and!
mainder for working capital
•

officers; and employees.
Price, $35' a share;
Proceeds^—Net proceeds,, estimated at $6,915,285, will be
used to defray part of the cost of its plant expansion and
improvement program, Business—Manufacture of Brake
cluding

proceeds from the sale of 63,860 shares. Company
also will receive proceeds from the* sale of 20;000 war¬
rants for common stock to- underwriters at an aggregate
the

new

scribed
r

share for each

underwriters^
ment.

common

Common

share held.

will be

/
i

Unsub-

purchased' by

the

Price-ArPqblicf offering pricea by amend¬

Proceeds—Net proceeds

will be used to retire ail
unexchanged shares of $6 prior stock and to redeem its
outstanding 7% preferred stock; Temporarily postponed^ ^

•

dividends.
•
•

American

Timo Corp.,

Springfield, Mass.

Artloom Corp^,!

Philadelphia

...

August 16 filed' 151,367 shares (no par): common; Underi: f
writera-^No undierwHtirig: Offering—Of the:tbtol^148,633 ;:
shares will be offered1 for subscription to; common' stock¬

August 19 (letter of notification) 60,000 share (l<f par)
common. Offering price,; $2: a share. Underwriters --Kobbe Gearhart: & Co.*. Inc.* New Yorlc For additional

holders in ratio of

inventory, manufacturing facilities/and machinery and

one

share for each two; shares held.

The* remaining 2,73.4 shares* and'any shares not subscribed:
for by common stockholders will be offered to'employees

tooling.

of company; Price—$10 a share. Proceeds-9The company (
American Water Works Co., Inc., N. Y.
being offered for subscription to
-estimates it wilt use $300,000 of the proceeds5 to purchase
Aug; 26 at the rate of one ■('. March 30s filed 2,343,105 shares of: common (par $51 plus
additional space and equipment, and $350,000 for manu- ;
an additional number determinable only after the re- ;
preferred share for each seven common shares held.
factoring facilities. The balance will be added to work- 9
suits of competitive bidding are known.. Underwriters— :
Bights expire Sept. 12; Unsubscribed shares will be sold
ing' capital. Business—Manufacture of wool arid worsted
To, be filed by amendment.
publicly. Debentures will probably be-placed privately.
Probable bidders include
/Wiltonrugs and?cari)ets;;9v9;v:~;: ■•
Price by amendment. Proceeds—For plant expansion, and
Dillon, Read & Co. Inc., White Weld:/& Co., and Shields f'li

—Preferred
common

stock is

stockholders of record

to increase working capital;
•

9 ,.y\ 9' 'X

All Metal Products Co.,

9.; 9.9 ,9,'.9

Wyandotte, Mich.

(Aug, 14 (letter of notification), 13,000 shares of class- B
common on behalf of Mary E. Reberdy.
Offering price,,
$5.50 a share. Underwriter—Andrew C. Reid & Co.,

Detroit, Mich;

Proceeds—To

to the selling stock¬

holder.

Co.

(jointly), and W. C. Laiigley & Co. and The
First Boston Corp. (Jointly).
Offering—Price to* public
by amendment:
Purpose—The common stock, together
with $15,000,000- 10-year 3% collateral1 trust bonds (to
be sold privately) are to be issued to acquire certain'
assets of American Water Works & Electric, liquidate
two subsidiaries, Community Water Service Co. and
Ohio Cities Water Corp;, and provide cash working capi☆

w
.

Associated Cooperative Grocers Co; of Southeastern Massachusetts, New^ Bedford* Mass.

AugIflf (letter Ofrnotificatioii);, 15001; shares;
common.

writing.

Offering—Price

$100

share;

XppCt- pat)
Nd under¬

For purchase of merchandise and: for conduct

of business.,

;

Underwriters and Distributors

Corporate and Public Financing

% United States Government Securities

Corporate and Municipal

☆

State and Municipal

Bonds

Securities

the

C. J. DEVINE

FIRST BOSTON

CO.

Kidder, Peabody ^Go.

INC.

New York V
;v

Pittsburgh,

and other cities,

Founded-1865

CORPORATION

48 WALL' ST., NEW YORK 5, Ni Y.

Chicago

Chicago.
-

it;;' 9.:

■•

•

Boston

•

Cincinnati
■ v-

Philadelphia
•

•■

HAnover 2-2727

Pittsburgh

•'

St. Louis * San Erandsco
-.-k
«.-.vs-:.: v: - ---. ■ - v

Cleveland:
J,

/v.

---"-"---yr
*

Members of the

New York

■

jM?W York and Boston* Stock Exchanges

Boston'

Philadelphia

■

Chicago;

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4518

Volume 164

Underwriters

Distributors

UNDERWRITERS—DISTRIBUTORS—DEALERS

The Marine Midland Trust
Industrial^ Public Utility, Railroad
arid

Company

OF NEW YORK

Transfer Agent»

Registrar

Municipal-—Railroad
Public Utility—Industrial Securities

Municipal Securities
'

Trustee
Direct contact with Markets in principal financial centers.

Hemphill, Noyes ca, Co.
Members New York Stock
NEW

YORK

PHILADELPHIA

ALBANY

Exchange i/%

CHICAGO •/

PlTtSBURGH

TRENTON

''f"l

NEW YORK 15* N. Y.

INDIANAPOLIS
WASHINGTON

ONE HUNDRED TWENTY BROADWAY

RECTOR'2-2200

■

E. H. Rollins & Sons
.

//r/V//''
40
•

•

Incorporated

' " 'v

Wall Street* New York 5, N. Y.
Beaton

Philadelphia

Chicago

«r

San Franeiace

THE COMMERCIAL & FINANCIAL CHRONICLE

1052

(Continued from page

Aug. 19 filed 115,000 shares ($1 par) common: Underwriter—E. H. Rollins & Son, Inc., New York.
Price
by amendment.
Proceeds—Of the shares being offered
company is selling 100,000 shares and 15,000 shares are
being sold by a stockholder. The company will use its
proceeds to provide additional factory space and pur¬
chase machinery and equipment and to construct a new
office building.
The balance will be added to working

Laboratories, Inc., Indianapolis, Ind.
July 29 filed 140,000 shares ($1 par) common stock, of
which 40,000 shares are being sold by two
stockholders.

•

Underwriters—By amendment., [Probably Brailsford &
Co. and Shillinglaw, Bolger & Co.] Price
by amendment.
Proceeds—From sale of company's 100,000 shares for
pur¬
chase of inventory, payrolls, and

working capital.

.j
,

Business—Fabrication of steel building and in¬
products and warehousing of hrifabricated steel.
Also conducts steel pickling business.

shares of cumulative

Commonwealth Aviation Corp.,

New York

Danly Machine Specialties,

Jimp 28, 1946 filed 150,000 shares ($10 par) 4%% cumu¬
convertible preferred stock and 300,000 shares
($1 par) common stock. Underwriters—To be supplied
by amendment. Price—$12 a share of preferred and $7
a share of common. Proceeds—Estimated net proceeds of
lative

$3,420,000 will be used for working
Commonwealth

Investment Co., San Francisco

Consolidated Air Transit, Inc., East Orange,

Delta Collieries Corp.,

N. J.

notification) $100,000 7% cumulative

capital.
*

'• T

<'}

fs'/1 '

Consolidated Hotels, Inc., Los Angeles

;

President and director.
the proceeds to working capital.

Ben Weingart,
add

Consumers Power Co.,

Indianapolis, Ind.

Cor|L| New York

indication that there would be any. Offering—Com¬
stockholders of record July 30 are given the right
to subscribe to the stock at $23 per share. Rights expire

Aug. 9.
will be

unspecified number of shares (no par)
Underwriters—To be determined by
competitive bidding. Probable bidders include Morgan
Stanley & Co.; Lehman Brothers; Shields & Co.; Harriman Ripley & Co. and The First Boston Corp. (jointly).
Price by amendment.
Proceeds—Consumers proposes to
Increase its authorized common stock (no par) from
2,000,000 shares to 6,000,000 shares. It will issue 3,623,432 shares to its parent, The Commonwealth & Southern
Corp., in exchange for 1,811,716 shares of its common
owned by Commonwealth.
It will offer to the public
through competitive bidding such number of additional
shares of common as will produce net cash proceeds of
$20,000,000. Such proceeds will be used for acquisition
of property, construction, or improvement of facilities
or other corporate purposes.
The company has property
additions, estimated to cost more than $53,000,000, now

applied

Light Co., and, the Danbury and*Bethel Gas and

Derby Oil Co., Wichita, Kans.

Each

stock.

planes, ten flying boats, reconditioning of flying boats
and working capital.

(9/9-13)

July 19 filed 131,517.3 shares ($8 par) common stock.
Underwriting—H. M. Byllesby and Co., Inc., Chicago,
and Nelson Douglass & Co., Los Angeles.
Price by
ceeds will be used to pay a

bank loan.

exploration

drilling and

program.

Diamond T Motor Car Co.,

Chicago, III.

Foreman

March 29 filed 60,000 shares of common stock
Shares

are

(par $2).
being sold by certain stockholders. Underwrit¬

ers—Hallgarten & Co.
see

Offering—Price based on market.

York.

expansion of the com-?"

Offering—Stock will be

scribed

amendment.

•

(9/10)

Fabrics Corp., New York

(9/16)

offered

will

sold

City Mfg. Co.rSt. Louis

(8/29)

June

to stockholders

at rate of one-half share for each share held.

pany's manufacturing plants, acquisition of additional
tools and facilities, and for additional working capital
requirements.

•

amendment.

July 25 filed 65,347 shares (no par) common stock. Un¬
derwriter—Merrill Lynch, Pierce, Fenner & Beane, New

Offering—Price by amendment.

■

issue of April 4.

.Dictaphone Corp., New York

ciiihulative convertible
preferred stock, Series A ($50 par). Underwriters—Van

•'

July 29 filed 110,000 shares ($1 par) common stock; all
outstanding.
Underwriters—Cohu & Torrey.
Price by

Forest

Continental Motors Corp., Muskegon, Mich.
July 8 filed 250,000 shares 4%%

Aug. 5 filed 60,000 shares ($15 par) cumulative preferred
stock.
Underwriters—Eastman, Dillon & Co. Price by
amendment.
Proceeds—^To be used to redeem 15-year
3Vz% sinking fund debentures, due 1959; and $2.50 cum¬
ulative preferred at $53 a share. Balance will be added
to working capital.

The remainder,

with other funds, will be used to expand a

Food Fair Stores, Inc., Philadelphia

Proceeds—Part of the estimated net pro¬

amendment.

For details

underwriters.

Proceeds—To be added to

Temporarily postponed.

Unsub¬

Price by

general funds.
>

17, filed 280,000 shares ($1 par) common stock;
Underwriters—Peltason, Tenenbaum Co., St. Louis. Of¬
-

fering—Shares will be offered publicly at $11.25 a share.
Proceeds—Net proceeds go to the selling stockholders;
Foster & Kleiser Co., San Francisco

July 29 filed 100,000 shares of cumulative preferred
V stock
(par $25). Underwriter—Blyth & Co., Inc. Pro¬
.

Continental-United Industries Co., Inc., N. Y.

ceeds—Approximately $1,060,950 for redemption of class
A preferred; balance for expansion, working capital,
Aug. 12 filed 80,529 shares ($1 par) class A stock, con- ?
etc. Dividend rate and price by amendment
. ;
V
!
vertible into common stock (par $1).
Underwriters—
Maxwell, Marshall & Co., Los Angeles. Price—To public £
Fownes Brothers & Co., Inc., N. Y.
(9/9J
$10.25 a share. / Proceeds—Net -proceeds, estimated at
Aug. 6 filed 100,000 shares ($1 par) capital stock. Un¬
$694,761, will be used to pay off loans and accounts pay¬
derwriter—Van Alstyne, Noel & Co., New York.
Price
able.
<
V
"
by amendment. - Proceeds—The shares are issued and
?'EI Canada Colombia Mines Co., Boston ;
outstanding and are being sold by Ivens Sherr, President
and A. I. Sherr, Executive Vice-President, who will re¬
July 26 filed 550,000 shares of capital stock (par $1). Of
ceive proceeds.
Y
'
" /»
'
"
the total 400,000 shares would be issued at $1 per share

Drayer-Hanson, Inc., Los Angeles

(9/23-27)

Aug.

Findlay, O.

stock

derwriters—J. F. Reilly & Co., Inc., and Courts & Co?
Offering—Price to public $3.50 per share.
Proceeds—
Proceeds will be used for the purchase of six land

Wallingford

Electric Light Co.

under construction.

Cooper Tire & Rubber Co.,

common

;■
Flying Freight Inc., New York
May 6 filed 300,000 shares common stock (par $1). Un¬

loans to the company's three Connec¬

Gas

an
stock.

2 filed 80,000 shares ^of cumulative sinking fund
preferred stock ($25 par) and 350,000 shares ($1 par)
common.
: Underwriters—W.
C. Langley & Co. and
Aronson, Hall & Co. Price by amendment. Proceeds—
$1,510,833 to repay notes and obligations; $1,600,000 to
purchase U. S. Treasury savings notes to fund to that
extent current liability of company for Federal taxes,
-and balance to working capital..

class

films.

Proceeds—Proceeds, together with other funds,

ticut subsidiaries: Derby Gas & Electric Co.;

;;

mon

common

Noel & Co.

initially convertible into Z
Underwriters—Herrick, Waddell & Co., Inc., New York. Offering—To be offered.,
publicly at $8.10 a unit consisting of one share of class A
stock and one share of common stock.
Proceeds—$201,000 for retirement of 2,010 shares ($100 par) preferred
stock at $100 a share; remaining proceeds, together with :
other funds, will be used for production of educational
shares

June 19 filed 20,066 shares (no par) common stock. Un¬
derwriters—No underwriters were named and there was

Jackson, Mich.

Proceeds—For rearrangement and

(9/20)

200,000 shares reserved for conversion of class A.
share

Company will

Fidelity System, Inc., Newark, N. J.

June 25, filed 100,000 shares ($5 par) class A stock and
300,000 shares (10 cent par) common stock, of which

Corp., Denver, Colo.

Aug. 9 filed

Alstyne,

•

Aug. 15 (letter of notification) 1,250 shares of ,6% cumu¬
lative preferred ($100 par). Offering price, $100 a share.
Underwriters—Maurice Welch, Belleville, N. J., and
M. H. Secor, East Orange, N. J.
Proceeds—For the pur¬
chase of real property, chemical
equipment, salaries,
advertising and sales promotion of the products Fiedel-X
Termite Kill, Fidel-X Mothproofing Compound and
others to be developed under the trade name Fidel-X,.

stockholder.

po£. preferred and all of the common are being sold by

their

subscription to stockholders at $40 a share.
Proceeds—Proceeds will be used to increase the
capital
and surplus of the company.

Films Inc., New York

Derby Gas & Electric

development

offered for

preferred on behalf of Alonzo Petteys, a director. Offer¬
ing price, $40.50 a share. Underwriters — Headed by
Boettcher and Co., Denver. Proceeds go to the selling

Aug. 9 filed 97,363 shares ($25 par) 4%% convertible
preferred stock and 150,000 shares (50c par) common.
Underwriter—Lester & Co., Los Angeles. Price—$25 a
share of preferred and $9 a share of common.
Proceeds
—Of the total; the company will receive proceeds from
the sale of 851 shares of preferred. The remaining shares

mine

pany to purchase at $40 a share any of the stock not sub-?
scribed to by stockholders.
Offering—Stock will be

August 12 (letter of notification) 2,450 shares ($100 par)

(8/28)

*' '

Underwriter—United States Fidelity & Guaranty Co. of
Baltimore has entered into an agreerherit With' the com¬

ment.

Denver Tramway

Fidelity & Guaranty Fire Corp., Baltimore (9/3)]
14 filed 100,000 shares ($10 par) capital stock;

^Offering—Price $97 and interest; For purchase of equip¬
•

Aug.

III.

(letter of notification) $300,000 5 % % sinking
debentures. -Underwriter—City Securities Corp.

fund

(nori-convertible) preferred stock and $100,000 class B
common stock.
No underwriter at present, but one ex¬
pected.? Price, $50 for preferred and $3 for common.
Proceeds—For purchase of equipment and for operating

•

Fashion Frocks, Inc. (9/5-6)
July 24 filed 200,000 shares ($1 par) common stock.
Underwriter—Van Alstyne, Noel & Co.
Offering—Offer¬
ing does not constitute new financing but is a sale of
currently outstanding shares owned by members of the
Meyers family; owner of all outstanding stock;? After
giving effect to the sale and assuming exercise of certain
warrants and an option/the Meyers
family will retain
ownership of approximately 58% of the common stock;?:

Aug. 7

July 29 (letter of

purchase of additional water properties
securities and for other corporate
purposes.

July 26 filed 60,000 shares ($25 par) 5% cumulative pre*
ferred stock, with warrants attached for purchase of
60,000 common shares, and 130,000 shares of common
stock (par $2). Underwriters—Paul H. Davis & Co., and
Shillinglaw, Bolger & Co., Chicago.
Offering-^-Of the
total common 60,000 shares are reserved for issuance
upon exercise of warrants.
Price by amendment. Pro¬
ceeds—CompEmy will receive proceeds from the sale of
the preferred shares and from the sale of 30,000 shares
of the common.
Company will use proceeds, together
with a $1,000,000 bank loan, to purchase machinery,
buildings and equipment and to retire bank indebtedness.

;

capital.

Aug.. 8 filed 250,000 shares ($1 par) common stock*
Underwriter: North American Securities Co., San Francisco.
Price—At market.
Proceeds—For investment.
Business—Investment house.

Inc., Cicero,

•

for

Cyprus Mines, Ltd., Montreal, Canada

121,849 shares of 5% cumulative
share.

Engineers Waterworks Corp., Harrisburg, Pa.'-";
(letter of notification) $275,000 4% debentures
due 1971.
Underwriters—C. C. Collings & Co., and
Stroud & Co., Inc., Philadelphia.
Price, $101. Proceeds

May 31 filed 500,000 shares of common stock (par $1).
Underwriters—Sabiston-Hughes, Ltd.; Toronto.
Offer¬
ing—Shares will be offered to the public at 75 cents a
share.
Proceeds—Net proceeds, estimated at $300,000,
will be used for mining operations. Business — Explor¬
ing for ore.

preference stock, at $100 a

June 24

selling stockholder.

preferred stock, 5% series, at $105

share; and to redeem

repayment, ofcash,
and operation and other expenses.

Copper State Life Insurance Co., Tucson, Ariz.

Aug. 8 filed $75,000,000 of debentures, due 1971, and
August 9 (letter of notification) 2,000 shares ($100 par)
$20,000,000 of serial debentures, due $2,000,000 on each
class B preferred. Offering price, $150 a share. Under¬
Sept. 1, 1947 to 1956.
Underwriters—To be determined/v
writer not named. For setting up legal reserve for opera¬
by competitive bidding.
Probable bidders include Mor-Y;:
tion of life insurance business.
•:1 ^
gan Stanley & Co.; Halsey, Stuart & Co., Inc.; The First
Boston Corp.; Glore, Forgan & Co., ; W. E. Hutton & Co.
Crawford Clothes, Inc., L. I. City, N. Y. (9/3-6)
Price by amendment.
Proceeds—Columbia completed
Aug. 9 filed 300,000 shares ($5 par) common stock.
the sale of common stock of Dayton Power & Light Co.
Underwriters—First Boston Corp., New York. Price by
June 13,1946, and used the proceeds to call for redemp¬
amendment.
Proceeds—Go to Joseph Levy/ President,
tion July 15 $44,914,000 5% series debenture bonds, due

Proceeds—For

Corp,

,1961, at 102, and to prepay $5,500,000. of its $22,000,000
Vk% bank notes.
Any remaining proceeds 4 and the'
proceeds from the sale of the debentures and the sale
of common stock of Cincinnati Gas & Electric Co. will
be used to redeem 941,820 shares of cumulative 6% pre¬
ferred stock, series A, at $110 a share; to redeem $38,695

Elkhorn

Mining*Co., Boulder, Mont.
Aug. 14 (letter of notification) 100,000 shares of com-:
mon.
Offering price, 200 a share.
No: underwriting.,

capital.

•

dustrial

working capital.
Columbia Gas & Electric

Electronic

(9/9) v?

Copco Steel & Engineering Co., Detroit

•

1051)
preferred for each share of common held . Th6 offering i
to common stockholders
excludes the two principal ?'
stockholders who have waived their rights to subscribe.
The remaining 90,414% shares and any shares not sub¬
scribed to by common stockholders will be offered to the
public through underwriters. Price—$5 a share.
Pro¬
ceeds—Approximately $55,000 for payment of Federal
taxes; $250,000 for payment of a loan; $50,000 as a loan
to Palmer Brothers Engines In<t; j a subsidiary, balance
" "

Thursday, August 22, 1946

•

(9/23-27)

to secured and unsecured creditors of El Canada Mines
•
par) 4%% cumulative
F-R Publishing Corp., New York
Syndicate, noteholders and stockholders of El Canada
convertible preferred.
Underwriters—Otis & Co. and
Mines Co. Ltd. and stockholders of El Canada Gold? Aug. 16 (letter of notification) 564 shares of common
Prescott & Co., Inc.
Offering—To the public. Price—
on behalf of Harold W. Ross and Jules Englander,
as
Mines Corp. and El Canada Mines, Inc., in exchange
$25 a share. Proceeds—Estimated net proceeds of $1,- ?
trustees for Ariane Ross. Offering—Price $57 a share.
for certain mining claims. The balance, 150,000 shares,
356,200 will be used to redeem its outstanding 4% deben¬
Underwriter—Silberberg & Co., New York. Proceds go
would be sold to public at $1.25 per share through un¬
tures, due 1967, to pay certain debts and for additional ?
to the selling stockholder.
^
* ? H?
equipment; manufacturing space and working capital. ; " derwriters, to be named by amendment. Y.;

July 17 filed 60,000 shares ($25

Volume 164

Number 4618

Frontier

June

/"THE COMMERCIAL

Refining Co., Denver, Colo.

filed

(8/22)

;

A*:

V?"}'

i-.r-

$100,000 of 4%% first mortgage bonds,

due

1951; 3,500 shares ($100 par) 5% cumulative pre¬
ferred stock and 15,000 shares
($1 par) common. Under¬
writers—Peters, Writer & Christensen, Inc., and Sidlo,
Simons, Roberts &' Co., Denver.
Offering—The bonds
and preferred stock will be offered to the
public, but
the

New Issue Calendar
(Showing probablt date of offering)

stock initially will be offered for subscrip¬
tion to present stockholders at
$11 a share at the rate
of 12 shares, for .each 100
shares; held/ [ Unsubscribed
shares of common will' b4 offered
publicly.
Price-1*
common

August 22, 1946
Frontier Refining Co

$11

Proceeds—Working capital,

Glen

•

Blum

•

;(EpST)-^iEqp. Trust Ctfs.

Southern Ry* 12 Noon

',.

■;i''■'!■' T-\

(Philip) & Co.————

Western Tin Mining
-———Common

Society, Inc.———Preference and Common ;
Newburgh;Steel Co., Inc
——Pref. and Common.

Springs Distilling

lndustries Inc., Milwaukee, Wis.

'''

.Common

(9/19-20)

Taylor-Graves, Inc

O1"

*■ ;'i

? jJjj'

I Airline

ble preferred stock series A
($20 par) and

Union RR.

150,000 shares
(10c par) common, all issued and outstanding and being
sold by eight selling stockholders.
Underwriters—Van
Alstyne Noel & Co. Price by amendment. Proceeds—*
T o selling stockholders,*
Business^^Manufacturers of
junior miss wearing apparel.
•
i
t.
^■.

Gloria Vanderbilt Corp.,

*...

>....

Commonweaith

Food Fair Stores, Inc
Fownes Brothers & Co., Inc.—
Solar Manufacturing Co.-*

of—

Common

Camfield

September 16, 1946

American Locomotive Co,————Preferred

Common

Co., Inc

Canadian Admiral Corp. Ltd.-—-——---Common

Common

Foreman Fabrics Corp.——————Common
General Bronz Corp,—
—-—Preferred

Crawford Stores, Inc

a com¬

mon

share and $5 a preferred share.

No underwriting.

continued

sale

and

distribution

general

Common

Fidelity & Guaranty Fire Corp..
Green

mer-

Rheem

—Capital Stock

Ready Built Homes Inc—

Manufacturing Co.——————Common

Common '

chandise.

N. Y. School of Theatrical Arts

•

September 19, 1946

Pep Boys—Manny, Moe & Jack———Common

Gray Manufacturing Co.

Pittston

August 15 (letter of notification) 2,000 shares of capital
stock (par $5). Securities are to be sold
to Walter E.
Ditmars through a private
offering at a price of $17,500 or
$8.75 per share, who has indicated he will sell the stock
on the New York Curb
Exchange through registered

Rodd
/f

Co.

Common

Glen Industries Inc.

Preference and Common

September 20, 1946

Debentures

(Marcel), Inc

Films, Inc.

-Common/

Rowe Corp.

—Class A and Common

——

September 23, 1946

.—Common *

Sardik

Foods Products Corp.-.r-.-r_-Capital Stock

Continental-United Industries Co—Pref. and Com;

Scovill

brokers. Sale of stock to Mr. Ditmars is in
accordance
with stock option provisions of
employment agreement
With the company.
Greens Ready Built Homes

-Common

Preference and Common

Manufacturing Co

Colonial Sand & Gravel

common

For

Common:
——Common

—

San-rNap-Pak Mfg. Co
Brown & Bigelow

Offering—Price $2

Co.-

September 12, 1946

•

September 3,1946

Inc., Baltimore, Md.

Aug. 12 (letter of notification) 22,500 shares of

Jensen Manufacturing
Metal Forming Corp

Capital Stock

Forest City Manufacturing Co

manufacturing

plant, for purchase of inventory and for financing a pro¬
motional campaign, Busine$s-~Manufacture of cosmetics.

preferred.

Preferred
Capital Stock
Preferred

September lOr 1946

August 29,1946 y

Briggs & Stratton Corp.

share. Proceeds—Estimated net
proceeds of $727,000 will

and 3,000 shares of

-.-Preferred

Cincinnati Gas & Electric Co.—-——-—Common'

Aug. 5 filed 300,000 shares ($1 par) common. Underwriter—Elder? Wheeler & Co.; New York. ' Price—$3 a

Gordon Mail Order
Co.,

Coped Steel & Engineering! Co.——-w——-Common
Derby Oil Co
—^Common

Consolidated Hotels; Inc.————Pref. andCommon

•, ?

New York

be used for remodelling and
equipping a

August 28,.1946

;

Co.—Preferred and Common

(Pa.) (noon EDST)—Equip. Trust Ctfs.

1 Australia;

•

Preferred
Debentures

Foods Corp. of N. Y.—Debs, and

Ben-Hur
Products, Inc.Colorado Milling & Elevator Co.

August 27, 1946
Otter Tail Power

Preference and Common

September- 9, 1946

-f!nmmnn

' ' ■* '•**

——Common

Frocks, Inc.—

Common 1

Co.—

Reporter Publications Inc..,

.V.jr./7*''VSi%

Fashion

Michigan Steel Casting Co
-Common
O'Okiep Copper Mining Co. Ltd.--American Shares

Nugent's. National Stores; Inc.—
Pebble

Corp.|—^-—--^-Common

September 5, 1946

Grolier

July 31 filed 50,000 shares of $1.25 cumulative converti¬

•

Bonds

August 26, 1946

preferred stock ($25 par). Underwriters—W. C. Langley
& Co. and Aronson, Hall & Co.
Price by amendment.
Proceeds—To pay cost of
acquisition, construction and
equipment; of new plant, and for working capital
■<

}

General Bronze Corp., L. I.
City (9/16-20)
July 26 filed 115,000 shares of cumulative convertible

■

.—-Common

Colortype Co._J——
-—Preferred
Palmetto Fibre Corp.—
^-Preference
?l Red Rock Bottling Co. of Youngstown
Common
American

Debentures

Montreal, City;bf (U aim. ;EEST)-~--

share,
share.

September 4r 1946
American Brake Shoe Co.L

Bonds, Pref. and Common

Hudson Pdlp & Papfer Corp

••••-.

The bonds will be sold at
$101; preferred at $100 a
and unsubscribed shares of common

1053

& FINANCIAL CHRONICLE

Manufacturing Co

prayer-Hanson, Inc.-

Weetamoe Corp

-Pref. and Common

;

Class A Stock

—

September 27, 1946

Westinghouse Electric Corp.—-Debs, and Common

Lonergan Manufacturing Co.—

Class B Stock.

Inc., Rockford, III.

^3-13)
July

2 filed 350,000 shares ($1
Underwriters—R. H. Johnson &

par)

common

stock.

•

Co.,
Chicago.

New York, and
Offering—Price.
proceeds will be used

Hariands, Inc., Los Angeles, Calif.

Aug.

Price by amendment. Proceeds—Net proceeds

(letter of notification) 250 shares of $100 par
stock, (whether common or preferred not stated). Offer¬
ing—Price $100 a unit. No underwriter. For investment
in merchandise to be resold to department stores, drug

Shillinglaw, Bolger & Co.,
$3.50 a share.
Proceeds—Net
partly for working capital and to pay for production
equipment now being acquired by the company.

stores and usersr

Grolier

Society, Inc., New York (8/26-30)

•

stock'*($100 par),; wRh-ribi^
purchase warrants entitling registered holders of shares
of the $4.25 preferred to
purchase at any time 64,750
shares of common stock at
$16 a share at the ratio of 3y2
shares for each preferred share
held; and 120,$1 par common stock. Underwriters—H,
Byllesby and Co., Inc.
Offering—Underwriters to

purchase from the company 18,500 shares of
preferred
and 20,000 shares of
common; and from Fred P. Murphy
and J. C.
Graham, Jr., 100,000 shares of issued and out¬

standing common.
mon
$14 a share.

preferred,

pay

Prices, preferred $100
Proceeds—To

notes, discharge

retire

cumulative

loan.

ing—Shares will be offered to public at 75 cents a share.
Proceeds—Net proceeds, estimated at
$300,000, will be

for, -mining operations. .

Inc., Los Angeles

Mfg. Corp., Grand Rapids

Feb. 27 filed 185,000 shares of

Transports Co., Jacksonville, Fla.
common stock (phr $1).

common

stock

($2 par).

Jan. 17 filed 270,000 shares of

Underwriters—Blair & Co.

acquired by selling stockholders in exchange for 432,000
shares of common stock (par $3) of American Engineer¬

Offering—Stock is being of¬
fered to present shareholders at $3 per share.
Holders
of approximately 200,000 shares have
agreed to waive
their preemptive rights.; •
:,

Hajoca Corp., Philadelphia
Aug. 2 (letter of notification) < 10,000 shares of $1 par
common.
Offering price, $25 a share. To be offered
to present shareholders.
No underwriting.
For financ¬
ing of four

new

warehouses.

■

Hammond Instrument

($1 par) common.7 Under¬
writer: Paul H. Davies & Co., Chicago. 4 Price
by amend¬

ment.

its

Proceeds—Net proceeds will be used to redeem

outstanding 6%

estimated
dends.

cost

cumulative

preferred

$213,258, exclusive

It also will

use

stock

accrued

Holt

(Henry)

common

;

•

ment of

•

common. Offering?
unit consisting of one preferred share

shares.4 No underwriting.

mining claims.

Idaho

Gold

Aug.
mon;

ing.

stock

and

Iowa Fiber Box Co.^

Offering—Company is selling the preferred

shares and stockholders are selling the common shares.
a

share of preferred.

by amendment.

Price for the common

Proceeds—Net proceeds

will be added

to general funds.

.Hudson Pulp & Paper Corp.,; N. Y.

300>000 shares of com¬
share. No underwrit¬

Keokuk, la.

Illinois Power Co., Decatur, III.

Underwriters—By competitive bidding. Probable bid¬
ders:includet Blyth & Go.,r Inc.,. .and; Mellon' ,$pcurities,
Corp. (jointly) and Morgan Stanley & Co. and W. El
Hutton & Co, (jointly). Proceeds—Netproceeds from the
sale of preferred will be used to reimburse the com—,
pany's treasury for construction expenditures. Net pro¬
ceeds from the sale Of common will

(9/22)

Underwriters—Lee Higginson Corp., ;NeW

Yprk^

■

be applied for re¬

demption of 5% cumulative convertible preferred stock
hot converted into common, prior to the redemption!
date.
The balance will be added to treasury fundsk

Manufacturing Co., Chicago

$8.87%

share.

shafes ($1 par)

O'Connor

common

Chicago.

Co.,

Proceeds—Shares

are

two stockholders who will receive net
I>:t

I:\r\\ l'-

J,;JvV

^'' V*■{ly

(9/10)

stock. ^ Un-^

»;

Pricew

being sold by

proceeds.
i\

Johansen Brothers Shoe Co., Inc., St. Louis, Mow

Aug. 5 (letter of notification)
stock.

Offering price

$5,625

53,221 shares of capital
share, subject to pre¬

emptive rights of stockholders.

July 23 filed $3,000,000 of sinking fund debentures due
1966.

5pokam£>

June 17, filed 200,000 shares ($50 par) cumulative pre^
ferred stock and 966,870 shares (no par) common stocks

Price—$25

Co.,

pansion and rehabilitation program.

Jensen

33,884

Mining

For development of mining property.

derwriter—Doyle,

preferred

Aug. 16 (letter of notification) 1,000 shares ($100 par)1
class A 5% preferred.
Offering—Price $100 a share. Net
underwriting.
For additional capital to complete ex¬

& Co., Inc., New York

stock. Undrewriters—Otis & Co., Cleve¬

For develop-1

13 (letter of notification)
Offering—Price 35 cents

lative

common

Silver

July 24 filed 148,176

convertible

Wash.

June 28,1946 filed 20,000 shares of 4%% ($25 par) cumu¬

divi¬

approximately $402,000 toward
the purchase of a manufacturing plant in
Chicago. The
balance will be added to working capital.

Price by amendment.

land, Ohio.

po., Chicago

Stock

ing Co. Underwriter—Laird, Bissell & Meeds. Offering;

($1 par)

Aug. 8 filed 80,000

being sold by certain stockholders.

are

and 25

•

Hayes Manufacturing Corp., Gr. Rapids, Mich.
Gulf Atlantic

Idaho Calcium Corp., Mountain Home, Ida.

|^-Price '$125/ a

Business—Exploring for

ore.

preferred and 37,500 shares of $1 par

100,000

July 26 filed $1,400,000 15-year 4^% sinking fund deben¬
tures due 1961, and warrants with each debenture for
purchase of a maximum of 30 shares of $5 par common.
Underwriters—Brailsford & Co., Chicago. Offering price,
100.
Proceeds—Of the $1,285,562 estimated net pro¬
ceeds, company will use $750,000 to purchase preferred
stock of; Humboldt Plywood Corp., an Oregon corpo¬
ration,: and $75,000 to buy equipment. Any balance will
be added to working capital.
l.,

Gubby Mines, Ltd., Montreal, Canada
May 31 filed 500,000 shares of common stock (par
$1).
Underwriters—Sabiston-Hughes, Ltd., Toronto. Offer¬

used

filed

Haskelite

share; com1

shares ($1 par) common stock.
Underwriters—Van Alstyne, Noel & Co., New York, and
Johnston, Lemon & Co., Washington, D. C.
Offering—
To be offered to the public at $8 a share.
ProceedsCompany is selling 60,000 shares and stockholders are
selling 40,000 shares. The company will use its proceeds
to pay the costs of opening additional stores and to ex¬
pand merchandise in its existing stores.

common

Aug. 8 (letter of notification) 150,000 shares ($100 par

Hartfield Stores,

June

000 shares of

Palatka, Fla.

•

•'

July 29 filed 18,500 shares at $4.25 cumulative preferred

with other

funds will be used to finance construction of a mill near

Underwriter

Nicolaus & Co., Inc., St. Louis.

Proceeds—To partially

finance

—

Stifel,

acquisition of a minimum of 80% of the stock of ?
(Continued on page 1054)

1054

/THEt&MMER&AE

(Continued from page 1053)
Valley Shoe Corp. of St. Louis, and to redeem $48,000
of 5% debentures, due
1951/ of Johansen Brothers.
:;
,

Kungsholm Baking Co., Inc., Chicago
June

27 filed 100,000 shares ($1 par) common stock.
Underwriter-Ames, Emerich & Co., Chicago. Offering
>-To public at $9 a share. Proceeds~Acquisition, etc.

Montreal, City of

preferred and 50,000 shares of the
Lime

common,

Cola

Co., Inc., Montgomery
June 28, 1946 filed 225,000 shares (10 cent par) common
stock.
Underwriters—Newburger and Hano, Philadel¬
phia, and Kobbe Gearhart & Co., Inc., New York. Price
—$5.50 a share.. Proceeds—Working capital.
Liquid Conditioning Corp. of New York
July 3 filed 70,600 shares ($10 par). class A
stock.

common

Underwriters—No underwriting.

Offering—Price,
; $10 a, share.. Proceeds-r-Proceeds will be used to pay
for its temporary /quarters in^Newr York;: for furniture
and fixtures, equipment and other corporate purposes.

(letter of notification) 250,000 shares of non¬
assessable common stock (par 5" cents) to be offered to
the public at 20 cents a share. Underwriters—Lobe and
Moore, Inc., and Alfred Lind, both of Seattle. Proceeds
—For mine acquisition and development.

22.

Cai^da/t^rtq/it A^^FDST^oilAu^

Probable

bidders

include

behalf of three optioning stockholders. Offering
$4 a share of Class B common and 10 cents a
warrant.
Underwriter—Cohu & Torrey, New York. Net
mon on

—Price

company will

be used

working capital.

Mines, Ltd., Toronto

June 7 filed 250,000 shares of capital stock (par
40c).
Underwriters
Names to be supplied by amendment.
Offering:—Stock will be offered publicly in the U. S. at
40c a: share (Canadianmoney)*
Proceeds—Proceeds,
estimated at $75,000, will be used; in operation of
the;
company.
Business—Exploring and developing gold
mining properties
•
r,
..
—

-■

Maine Public Service Co.,

June 25

filed

150,000 shares

Underwriters—To

Preque Isle, Me^J

($10 par) capital stock.
through competitive

determined

bidding.
Probable bidders include The First Boston
Corp.; Kidder, Peabody & Co., and BIyth & Co., Lie.
(jointly); Harriman Ripley & Co; Coffin & Burr and
Merrill Lynch, Pierce, Fenner & Beane. Proceeds—Hie
shares are being sold by Consolidated Electric and Gas
/Co* parent of Maine Public Service, in, compliaqpe With
geographic integration provisions of the Public Utility
Holding Company Act. ''
4
"
Marcel Rodd,

Inc., Hollywood, Calif.

(9/3-13)

July 31 (letter of notification) 100,000 shares (10c par)
common

and

35,000

common

stock purchase warrants.

Offeringr—Price $2 a common share, and one cent
rant.

si war¬

Underwriter—L. D. Sherman & Co., New York.

For working capital.

Metal

Ripley & Co.,
Inc. and Dominion Securities Corp, (jointly); Lehman
Brothers and Glore, Forgan & Co. (jointly). Indications
were at press time that the
banking groups may not bid
for the issue due to conditions laid down by the Cityy
|
Morrison-Knudsen

Forming Corp., Elkhart, Ind.

derwriter—First Colony Corp.
fit of 11 selling stockholders.

derwriters—Tq be determined by competitive bidding.
Probable bidders include BIyth &
Co., Inc.; Kidder, Peabody & Co.;. The First Boston Corp.; Harris, Hall & Co.

(Inc.); Merrill Lynch, Pierce, Fenner & Beane, and Ira
Haupt & Co. Offering—New preferred will be offered
on a share for share exchange basis to
holders of its
outstanding 7% prior lien, $6 no-par prior hen, 6%
preferred and $6 (no par) preferred.
Of the common
stock being registered* company is
selling 40,000 shares,
Middle West is selling 57,226 shares and
Halsey, Stuart
& Co. Inc., New York, is selling 22,774 shares.
Proceeds
—Michigan will use net proceeds from bonds to redeem
$3,500,000 3%% series A first mortgage bonds, due 1972,
and from shares of

Net proceeds from sale of com¬

preferred not issued in ex¬
change will be used to redeem.$375,000 ZVz% serial de¬
bentures, due 1951, at 101.2 and interest. It also will
new

redeem at 105 and accrued dividends all
unexchanged
shares of prior lien and preferred stocks. / /
-

Michigan Steel Casting Co., Detroit
June 27

filed

100,000 shares

($1 par)

common

Underwriters—Cray, McFawn & Co., Detroit.
To be offered publicly at $8.25 a share.

chase additional

stock.

Offering—*

Proceeds—Pur¬

facilities, expansion, etc.

(9/5)

(9/6)

to stockholders of Newmont

common

It also will

of sub¬

Mountain States PowerCo.,AIbany,Ore.

Mining Corp. as of record

Sept. 5, 1946, on the basis of one ordinary share of
O'Okiep for each 10 shares of Newmont held as of record
date.
Primary purpose of the offering of 100,329 Amer¬
ican shares of O'Okiep is to effect such distribution of
these shares as may comply with the listing requirements
of the New York Curb Exchange as, to distribution
of shares.
O'Okiep has pending an application to list
the American shares on the New York Curb Exchange

indebtedness, outstanding pre¬

portion of its bank loans.

the funds for investment in preferred stocks
sidiaries.
use

Offering—To be offered at $5 a share

derwriters—None.

and will receive

June 6 filed 140,614 shares of common stock (no par).
Underwriters—To be determined by competitive bidding,

Orange-Crush do Cuba, $. A., Havana, Cuba

;

July 22 filed 75,000 shares of $1.50 par common. Under¬
writer—Elder, Wheeler & Co.
Offering—Price $8 a
share.
Proceeds—Of the total company is selling 25,000

Co. and Smith Barney & Co. (jointly); Harriman,
Ripley & Co.; The First Boston Corp. Offering—Shares,
which are owned by Standard Gas & Electric Co. and
constitute 56.39% of the company's outstanding common,
will be sold at competitive bidding. Proceeds—Net pro¬
ceeds will go to Standard Gas.
Postponed indefinitely.

shares and stockholders are selling
company

The

50,000 shares.

will use its proceeds for equipment.

Otter Tail Power Co.

(8/27)

$3.60 cumul. pre¬
stock, and 51,216 shares ($10 par) common stocky
Underwriters—Glore, Forgan & Co. and Kalman & Co.
Offering—Preferred stock is offered in exchange, on a
share for share basis, for outstanding $4.50 and $L25
July 18: filed 60,000 shares (no par)

Murphy

(G.

C.)

Co.,

McKeesport,

ferred

Pa.

June 13 filed

250,000 shares of common stock (par $1).
Underwriter—Smith, Barney & Co. Price by amend¬
ment.
Proceeds—Redemption of outstanding 4%% pre¬
ferred stock at $109 a share plus dividends.
> National Alfalfa

Lamar, Colo.

dividend preferred stocks. Shares of new preferred not
in exchange will be sold to underwriters. The

issued

subscription to common
additional shares few
will be sold to un¬
derwriters. Both offers expire Aug. 26. The public offer¬
common

Cehyrfrailhg; fc MillingCo.,

Offering

$35 a share.
Underwriters—.
Co., Inc. Proceeds—For redemp¬

tion of outstanding $2.50 class A non-cumulative stock.

are issued and outstanding and are being
Maurice Cohen and Samuel Friedman* President

Price

Pal Blade Co.,

share for the preferred, and $6 a share |orthe

common.

par).

Underwriters—By amendment.
Bidders may include Halsey, Stuart & Go; Inc. (bonds
only)y Bear, Stearns & Co. (stock only). First Boston,
Corp;, White, Weld & Co.-Kidder, Peabody & Co. (jointly)!
Offering—Bond^ and conAmdn stock are being offered in
connection with a compromise recapitalization plan
approved by the SEC, on June 24, 1946, which among
other things provides for the elimination of all out¬
standing debentures and preferred and common stocks,
and for the issuance of $22,500,000 of bonds and 5*300,009
of new common shares. Price by amendement. Proceeds
—To retire outstanding

securities, aggregating $34,998,-

500. Bids for the purchase of the bonds and the common
stock which were to be received by the company Aug. 13

withdrawn Aug.

12.

Sale postponed indefinitely,

the 47,809

Inc., New York

capital stock;

Offering-^

225,000 shares are outstanding and are being sold
stockholders, and, 2,500 shares are being sold by
Marlman to all salaried employqe^;:

New England Gas and Electric Association

were

Jowe£^dividend, rate Ihe^OJOOd

Juff€28,1940 filed 227,500 shafes ($1 par)
Underwriters -^F^Eberstadt
\Co*--Inc*

Ing-price—To be supplied by amendment.

Secretary-Treasurer, respectively, each selling 15,000

($5

Portland, Ore.

sharf'for share, with cash adjustments, for the new pre* |
ferred*stock of Pacific, the surviving corporation. Offer*

ing—Shares

preferred shares of Northern Electric Co., in connection
with«the proposed merger of Northwestern into Pacific;
In connection with the merger, the outstanding preferred
stocks: of Pacific and Northwestern will be exehanged

preferred (par $10), and 30,000 common sares ($1 par).
Underwriters—O'Connell & Janareli, New York. Offer¬

mon

two

outstanding preferred shares of Pacific and

Newburgh Steel Co., Inc.! Detroit (8/26-30)
Aug., 2 filed 30,000 shares of 6% cumulative convertible

loans.

Refinancingsat

Postponed indefinitely.

sold by

for

July 10 filed: 100,000 shares ;($100"par)-preferred sfpdd
Underwriters*-By amendment. Probable bidders include
BIyth & Co., Inc., White, Weld & Co. and Smith, Barney &6
Co. (jointly); The First Boston Corp., W. C. Langley & C04
Harriman Ripley & Co. Offering—Company proposes to ;
issire the 100,000 shares of new preferred for the purr

price,

Evans

rate

Pacific Power & Light Co.,

National Manufacture and Stores Corp., Atlanta
June 12 (letter of notification): 8,500Ot nommon!
stock.

the

ing price of the preferred will be $99.25 a share and the
common $51.25 per share. Proceeds—To redeem
unex¬
changed/shares sof: old preferred and $900,000 of' bank;

Clement A.

each five held. Unsubscribed shares

June 28 filed 28,960 shares of 4&% cumulative preferred
stock ($100 par), 250,000 shares of common stock ($1

par) and warrants for 28,960 common shares (attached
to preferred stock).
Underwriters—Stone & Webster
Securities Corp., and Bosworth, Chanute, Loughridge &
Co. Price by amendment.
Proceeds—Shares are out¬
standing and are being sold by stockholders. Tempora¬
rily postponed.
/
;

offered

stock

stockholders

■

July 11 filed $22,500,000:20-year collateral trust sinking
fund Series A bonds, and a maximum of 1,568,980 com¬

Michigan Gas & Elec. Co., Ashland, Wis.

mon

of Southc Africa

fering 149,550 shares of the

share.

June 24 filed $3,500,000 of series A first mortgage
bonds*
due 1976; 14,000 shares ($100 par) cumulative
preferred
stock and 120,000- shares ($10
par) common stock. Un¬

at 106.75 and interest.

Co., Inc., Boise, Idaho

proceeds from these shares.
The company's proceeds!
together with funds to be provided from the sale of
$2,000,000 of 3&% debentures, due 1961, will be used to

—$10
Un¬

July 25 filed 106,329 American shares representing" a
similar: number^^ bf ordiriary-shares ofpar value of
10 Sh0Iings;B6uth^fricam^currency (U; S; $2.017)%Uii4;/

Offering—For the bene*
Price, $7.50

O'Okiep Copper Mining Co. Ltd. of the Unioit

shares of preferred and 15,000 shares of common.

(9/10)
stock.

common

v"r; Oklahoma Oil Do.f DenVery Colo.
; ^
;/AUg.; 5 (letter Of hottiiCatiOn) 571,000 sliares (5c 9par)
common on behalf of Frank C.' Myers, President' and
Treasurer of the company.
Offering—Price at market.
Underwriting—Inter-Mountain Shares, Inc.
Proceedsr—
00' to the selling stockholder.
•
^
i
^

July 22 filed 249,550 shares ($10 par) common and 70,00(1
shares of ($50 par) 4%% cumulative convertible pre¬
ferred. Underwriter—BIyth & Co., Inc., and Wegenef
& Daly, Inc.
Praceeds-^Selling* stockholders are of«

and

July 29 filed 60,000 shares ($1 par)

Harriman

8c.

(9/27)

Aug. 7 (letter of notification) 74,500 shares ($1 par)
class B common on behalf of the company and option
warrants for purchase of 10,000 shares of Class B com¬

Mada Yellowknife Gold

21 filed 85,000 shares
($1/ par) common stock;
Underwriters—Newburger & Hano, and Kobbe, Gearhart
& Co., Inc.
Price, $6.75 a share.
Proceeds—Net pror
ceeds to the company, estimated at $350,200, will be ap¬
plied as follows: About $111,300 for retirement of out¬
standing preferred stock; $41,649 to purchase 100% pi
the stock of tivo affiliates, and balance $197,000 for other,
corporate purposes. /
"1,/;
w'C-U:

rency), dated Aug. 1, 1946 and maturing in installments

Mbhtreal/l/

June
-

pjrpbabie bidders includeBlyth & Co., Inc.; Kuhnr Loeb

Lonergan Manufacturing Co., Albion, Mich.

proceeds to the

■

Nugent's National Stores, lnc„ N. Y. (8/26-30)

(8/22)

from Nov. 1,1947; through Nov. T, 1975, will be received
at the office of the Executive/Committee^ City: Hal^

retire its certificates of

July 3

Bids for the purchase as a whole of an issue of $47,835,*
000 serial Debentures (payable- h»^United^States^^ur4t"'

ferred stock and

Livingston Mines, Inc., of Seattle

Becker & Co., Inc., and Harris, Hall & Co. (Inc.). Offer¬
ing—Securities will be sold at. competitive, biddmgProceeds—Refunding.
•
o
'
1

//I

•jMississippi Fire, Casualty & SuretyCorp.

August 19 (letter of notification) 14,000 shares ($10 par)
common stock, offering price $20 a share. Underwriter—
Clany M. Seay, Jackson, Miss, will undertake to obtain
signatures authorizing subscriptions for the stock td
create capital and surplus for operation of business*
Company is to be organized in Mississippi.
j

•

Lake Erie Pulp and Paper Co., Monroe, Mich*
Aug, 12 (letter of notification) 500 shares ($100 par)
6% cumulative preferred and 125,000 shares ($1 par)
common.
Offering price, $100 a preferred share and $1 a
common share.
No underwriting.
Proceeds^-For pur¬
chase of machinery, factory space, transformer station
and for working capital, i The present notification can¬
cels a previous, notification covering 500 shares of the

Thursday, August 22, 1946

•

Palmetto Fibre Corp.,

by 10
A I*.
;

;

Washington, D. C. (9/4)'

Aqgtist 16 filed 4,000,000 shares (10^ par); ^preference
stock. Underwriting—Tellier & Co., New York. Price
50 cents a share. Proceeds—The company will use esti-j
mated net proceeds of $1,473,000 for purchase of a new
/factory near Punta Gorda, Florida, at a cost of about
$951.938.. It will set aside $150,000 for research and de^
velopment purposes and the balance will: be/ used asy
operating capital. Business—The company originally wag
inaeqacporated last January but an amendment to;its
charter was filed last June 21. Its business will consist
of the processing of saw palmetto stems and the processing^f the fibres from the stems into upholstery fibres,
yarm- fabrics, sacks, rope, cables and other uses. The

compa% .stated that if it is successful it: will hav^
•

N. Y. School of Theatrical

Arts, Inc., N.Y. (9/3)

cre^ted^a new industry..".,

«.

V'-c
' '1 *v-:
August 19* (letter of notification) 2,450 shares of common f •'yW'LrV'Paquenamco, Inc., Friendship, N. Y."
stock (par $20). No underwriters. To be offered at $20
Aug. i2l (letter orhotifieatioh) 2^00 shares of preferred
per share. To finance and further-interest of corporation
stock (par $10) and 2,500 shares of common stock (paj
in teaching the dramatic arts.
'
/ 50c >.
To he offered in units of one share of preferred
Northwestern Public Service Co.* Huron, 8* D#~
and one share of common at $10 per unit.
Not under¬
June 28 filed $5,275,000 first mortgage bonds, due 1976;
written.
Proceeds—For acquisition of real estate* erec*
• - •

■

26,000

($100

par)

cumulative

preferred

stock, | tion of factory building, purchase of machinery, etc /

and 110,000 shares of $3 par common.
Underwriters—
To be determined by competitive bidding.
Probable

Pebble Springs

bidders include Halsey, Stuart & Co. Inc. (bonds); Har¬

July 25 filed

riman Ripley &

Underwriters—Daniel F. Rice and Co.,

Co., Inc.; Lee Higginson Corp.; A. G.

(8/26-30)
shares ($1 par) common s ock;

Distilling Co.,, Peoria

125,000

Chicago.

Price

jVolume 164

Number 4518

by amendment.

THE! COMMfiRCIA^ & FINANCIAL CHRONICLE

Proceeds-^To reduce bank loans, bttild
additional facilities, iand for other
corporate purposes*
Business—Engaged in distilled spirits business*

and

Pep Boys—Manny, Moe & Jack,

July 16 filed 200,006 shares ($1 par)

holders*

?: IT'

,;,*• t

>'•

Noel & Co. and associates.
ceeds—Of the net proceeds,

each

seven

cumulative

lanta.

use

Priee

convertible

used to pay

cents

3% notes held by National Bank of
Detroit, $75,000 to,
reimburse treasury for sums
spent in acquisition of the

Tele-Tone Radio Corp., New York
Aug. 1 filed 210,000 shares of common stock (par 50

non-

^Company

par)

the underwriters at 7 cents per option warrant options to
purchase 18,000 shares: of the issued and outstanding,
common owned by them.
They are also selling to Hallgarten & Co., for $1,500, plus $360 as a contribution,
toward the expenses of issuance^ options to purchase an
additional 18,000 shares of the issued and outstanding*
common.
Proceeds—Net, proceeds for the sale of com¬
pany's 75,000 shares will be used for increasing working
capital, with a view to entering the Frequency Modula¬
tion and Television fields at an advantageous time. ••

common

will

use

its

;

Upper Michigan Power &

struction of space for executive offices in the
economy
baler plant, and the balance will be
deposited with gen¬
eral funds.

July 18. (letter of notification) 5,500 shares of 4%% first
preferred stock series B ($50 par). Offering price, $56
a share.
Underwriter—First, of Michigan Corp., Detroit,
Procecds-^For enlargements and improvements of power
plant facilities.,

SoSar

Manufacturing Corp. (9/9) ■<
l%;TIIecf80,000 shares of $1.12% cumulative con¬
vertible preferred stock; aeries A
(par $20).
Under*

June

Velvet Freeze, Inc*

writers—Van

| Radiaphone Corp.,Jib*: Angeles, Calif.
Au%T (letter;;pf/notification) 168,528 sh^^

Alslyne, Noel & Co. Price by amendment.
Proceeds—Net proceeds wiR be applied for the redemp¬
tion of outstanding series A convertible preferred stock:

and

T^pital^tock^ Undemrfter—Barbour, Smith
Los Angeles,

f Offering—Priee $1.25 a share.
increasing w^

Red

-Qoi1

;

v ;

Southwestern Public Service Co.,
Dallas, Texas

.Offering—Price

$1.50 a common, share and;
ceqt a warrant. Underwriters^Frank C^ MoorV
Co* New Yorki aiat Hail* Tattersall &
Bhiladeiplua<
7$or payment of plant mortgage, purchase of additional
equipment and for working capital.

rono

150^06: siiarea

inc.,

N; Y. (S/20-27)

common

stock

(par 50c)*

Underwriters—Newburger & Hano, and Kobbe, Gearhart
&

Offering—Price $3.50 a share.
Proceeds—The
Stock is being sold by stockholders who will receive
proceeds.

Aug., 12 (letterpf notification) 29,110 shares of

Weetamoe Corp., Nashua, N.
common,

(par $10). To be offered for subscription to stock¬
holders at $10 per share.
Rights expire Oct. 1, 1946.
Unsubscribed shares will be purchased at $10 per share
by Alfred MacArthur, Chairman and Hyman A. Pierce,

Republic Pictures Corp., New York

Jfuly 31 filed 184,821 shares

of $1 cumulative convertible
preferred ($10 par) and 277,231 shares (50c par) com¬
mon stock.
Underwriters—Sterling, Grace & Co* Offer¬
ing—To be offered initially in units of one share of
pre¬

Executive Vice-President.

Proceeds—General corporate

purposes.

Wz shares of common to holders of issuers
preferred and common stock in the ratio of one unit for

State

Price

for any corporate purpose.

bonds to two banks which hold two first
mortgages on
all of the company's real estate and the

Reynolds Pen Co., Chicago
May A filed 406,006 shares of common stock (no par),
of which 100,000 shares are being sold
by company and
300,000 by; stockholders.
Underwriters—Names by
amendment. Offering—Terms by amendment. Proceeds.
—Net proceeds to the company will be added to
working
capital.
I-..
.

I Rheem Manufacturing Co.

remaining $1,000,000 of the. bonds will be offered to the company's
stockholders in the ratio

3% shares of. stock held.

(9/16)

Steep Rock Iron Mines Ltd., Ontario, Can.
filed^500,000 shares of capital stock (par $1),
Underwriters—Otis & Co, Offering—Price to public by
#

Price—

account.

vertible
*

funds

non-cumulative

and

Offering—Prices, $25

$2 a sharer for-the
capital/ ,
^

(9/12-18):

stock

and

11,506

common stock (no
par), 3,000 shares of which
will be purchased by O'Connell & Co. for investment
and not distribution. ' Underwriter—O'Connell & Co.,

Boston.

July 24 filed 80,000 shares ($1 par) common stock. Un¬
derwriters—Dunne & Co., New York.
Offering—Price
by amendment.
Proceeds—Nat E. Heit, President and:

preferred

shares of
;

San-Nap-Pak Mfg. Co. Inc., New York

general

Stevens-Arnold Co., Inc., South Boston, Mass.
July 25 (letter of notification) 3,400 shares of 5% con¬

Price, by amendment.

director, and Harry Preston, board Chairman,. Secretary

Proceeds—^Net proceeds will be added to.
and will be available for general
corporate purposes. For details see issue of April 4.
the

York (9/3-13)

July 29 filed 120,006 shares common stock. Underwriters
—Hayden, Stone & Co. Offering—The selling stockhold¬
ers, who include Robert Z. Greene, President, are offering the shares to the public through the
underwriters,

and

common;

share for the preferred
Proceeds—For working;

Street & Smith; Publications, Inc..
July 17 filed 197,500 shares of common stock. Under¬
writers—Glore, Forgan &. Co.
Offering—The offering

(9/3-13)

650,000 shares ($1 par)

common

stock. Underwriters

—Blair & Co., Inc., Reynolds & Co., New York and Max¬

well^ Marshall & Co., Los Angeles.

Offering—The pre¬
ferred and convertible stocks will be offered in units of
share of preferred and one-half share of convertible.

Price by amendment. Proceeds—Weetamoe Corp. (Name
to be changed to Nashua Manufacturing Co. prior to.
effective date of registration) was incorporated June 27,
1946 to acquire the operating properties and certain:

other assets of Nashua Manufacturing Co. which was

incorporated in 1823.

The

new company was

organized

at the instance of Textron, Inc., and is wholly-owned

subsidiary, Textron Mills, Inc., which are promoters of
the new company. Net proceeds, together with $2,300,000
representing the proceeds from the sale of 56,000 shares
of

corivertible

stock

the

underwriters

525,000

and

shares of convertible stock to Textron, Inc*, at $4 a share,
will be used as follows:

approximately $13,000,000 for

payment of a portion of the purchase price of the assets
to be acquired from the old company, about $100,000 for

organization expenses, and about $1,100,000 for working
capital*,
#

•

Western

Tin

Mining Corp., Washington, D. C*

(9/4)

amendment.

Tempora¬
.

own

Unsubscribed shares, will >bje

March 27

rily postponed.

for their

bond for each unit of

sary repairs to its real estate.

writers and 70,000 shares to Bethlehem Steel Co.

Rowe Corp., New

one

to underwriters.
Price to stockholders $27.50 a
Share and price to underwriters $26.50 a share. Proceeds
—Company will pay $225,000 to the two banks holding
Its mortgages and the balance will be retained for neces¬

Proceeds—Working capital.

sold

June 26,1946 filed 206*000 shares ($1 par) common stock.
Underwriters—Blyth & Co., Inc.
Offering—Company
will sell 130,000 shares to the public
through the under-*

By amendment.

Boston, Mass.

July 1, 1946 filed $1,750,000 second mortgage 4% noncumulative income bonds, due
1961.
Underwriters—
Roger W. Babson, Wellesley Hills, Mass., and Charles F.,
Ayer.
Offering — Company will issue $750,000 of the

or preferred and/or common
held of
by amendment.
Proceeds—Initially to
become part of corporation's general funds and available

Street Exchange,

July 15 filed 200,000 shares ($25 par) $1.26 cumulative
pfd. stock, 100,000 shares of ($1 par) convertible stock*

one

ferred and
12

^Virginia Bare Stores Corp., N.v Y.
>

Standard Life Insurance Co* of America
stock

record.

the

Issue temporarily postponed.

Co.

each

to be sold

July 3 filed.90,000 shares of 5% cumulative convertible
July 24 filed $20,000,000; of; first mortgage foorids;^series -preferred stock, ($10 par).
Underwriters—Newburger
Idue 1976. Underwrlters^-To be- supplied
& Hano; Kobbe, Gearhart & Co., Inc., and D. Gleich Co.
by amendment.
Probable bidders include Dillon,- Read & Co* Inc*r
Offering—Underwriters propose to offer the shares in
Halsey^
Stuart &
Inc.; andBlyJiv^ C6^ In<^? PriCe byiamen^ : part to the public and the balance to certain dealers,
meat.
Proceeds—Net proceeds, with other funds, will
among whom any underwriter may be included, at the;
be used to; redeem $17,500,006 of 3%% first
public offering price,'less certain concessions,! Price $16
mortgage
bonds, due 1974, at 106y»%, and to purchase the electric,
per share. Proceeds—It is presently anticipated that
water and ice properties of West Texas Utilities Co.
$437,500 will be used to acquire the capital stock of Wil¬
located in the northwestern portion of the Texas Pan¬
liams Stores, Inc., and Levitt Millinery Co.
The bal¬
ance will
handle for $2,135,000.
be applied to general corporate purposes.

(letter of hotific^tionX 109,006 shares (50c
.conaunoirnnd^wimants for purchase;;efrI25$Q6fad^

Reporter Publications,;

are

Underwriters—

Offering—
total, 200,000 shares will be sold through the
underwriting group at $8.50 a share, and 3,500 shares
will be: offered to .certain employee^ at $7.50 a share. Of

tory amounting to $400,000f and for additional working
capital. %$§$$$&
■'/
"

Bottling Co. of Youngstown,
Warren, O. (9/4-13)

July 12 filed

for the account of certain stockholders.

not converted dnto common stock.
Such pro¬
also will be used for additional
manufacturing
are

facilities in the amount of $600,000; for additional inven¬

Rock

common.

Sherck, Richter &; Co., and Straus & Blosser.

ceeds

For reduc¬

tion of liabilities :and
•

par)^

July 24 filed 203,500 shares of stock which

which

($1

Light Co., Escanaba,

Mich.

proceeds for

general corporate purposes.

cdectrical division plant*>£ the
company, .$30,006 for cozW

cents).
Underwriters—Hirsch & Co.
Offering—Com¬
is offering 75,000 of the shares registered. Eleven
stockholders are selling 135,000 issued and outstanding

pany

Co., Inc., At¬
by amendment. Proceeds: Company is sell¬

warrant.

Proceeds—For payment of notes,

mortgages and for general corporate purposes.

net pro¬

ing the 25,000 shares of preferred to the underwriters at
$10 a share and stockholders are selling a minimum of
220,001) and a maximum of 244,000 shares to the underwriters at $5 a share. The registration stated that 24,000
of the 244,000 shares of common are being reserved for
si period of four days following the effective date of tho
registration for sale to employees, officers and directors
a t $5 a
share* The company also is selling 200,000 stock
purchase warrants to executives of the company at 56

Underwriter—Van Alstyne,
Price by amendment.
Pro¬

$250,000 will be

—Amos Treat & Co.

held.

shares, for their own account. Offering—Price $6.75 3
share.
Options—Selling stockholders are also selling to

ble preferred stock and 244,000 shares
($1
stock. Underwriters—Clement A. Evans &

Co. of Ann Arbor, Mich.

75,000 shares
preferred stock ($10 par).

for

Aug. 7 filed 25,606 shares ($10 par) 5% cumul. converti¬

share.

5 filed

Scripto, Inc., Atlanta, Ga.

Division of Portland Electric Power
Co., working capital,
Offering price of debentures $105; price of common'

July

one

ferrous metals and manufacture of diversification
prod¬
ucts.

etc.

fly Precision Parts

—Melting, casting and processing of brass and other

Transit Co.

Co.;
Scherck, Richter & Co.; Weeden & Co.; Allen & Co., and
Rauscher, Pierce & Co* Proceeds—To complete payment
of purchase price for the
capital stock of Portland Trac¬
tion Co. and the
properties of the Interurban Railway

per

common stock
(par 50c). Offering—Price $6 a share for
preferred and 75 cents a share for common. Underwriter

ceeds to pay bank "loan and to finance the purchase of
additional machinery, equipment and buildings. Business

version of debentures. Underwriters—First
California

public, $8.25

rate

By amendment. Proceeds—-Company will

Proceeds—Payment of promissory notes aggre¬
For details seeissue of May 16*

June 14 filed $1,250,000 \%
convertible; debentures due;
June 1, 1966, and 200,000 shares of common
stock (par
$1); also an additional 128,750 common shares for con¬

the

(9/5)

cumulative convertible preferred stock and 44,300 shares

Unsubscribed shares will be sold to underwriters. Price—

gating $8,000,000.

(Ore. 1

Taylor-Graves, Inc., Saybrook, Conn.

July 12 (letter of notification) 44,300 shares of ($5 par)

initially will be offered for subscription to stockholders

Income debentures due Jan. 1, 1964.
Underwriters—
Blair & Co., Inc.
Offering—Price to public by amend¬

Portland

(9/3) f|

August 15 filed 100,000 shares ($100 par) cumulative

Pittston Co., HobokenJ N. J.
(9/3-13)
May 9 filed a $7,000,000 15-year 4% debentures due
April 1, 1961, and $1,242,300 20-year 5%% cumulative
'

ment.

ScovilkMamtfacturingCo.^ Water bury, Conn.
™v'-

preferred stock and 149,548 shares ($25 par) conimon
stock. Underwriters—Morgan
Stanley & Co., New York.
^Offering—Preferred will be offered publicly. Common

TYJ

Proceeds—Net proceeds to be used in part
19,000 shares of outstanding $4.50 preferred
stock, Series A, 1,050 at the sinking fund redemption
price of $103.50 and the remaining 17,950 at the optional
redemption price of $106.50 a share, plus accrued divi¬
dends in each case. The balance of the net proceeds, wilf
be added to general funds.
to redeem

plant, etc.

•

amendment.

Proeeeds—Working capital, purchase equip¬

ment and

The price toI employees* will«be.'y$6*85iv a shares
Proceeds — Proceeds go; to twosellings stockholders,
Maurice L. Strauss,
President, and Emanuel Rosenfeld,
Vice-Presirfent sinrl Trpflstirflr
^
r' <i^
Vice-President and Treasurer*
.

public at $14 a share.

Of the
selling 155,000 shares and
the remaining 20,000 shares are being sold by two stock¬

share.

* /*

Sun Chemical
Corp., New York
•
July 31 filed $4,000,000 2%% sinking fund debentures,
due Aug. 1, 1966. < Underwriter—Shields & Co.
Price by

total being offered company is

total, 160,000 shares will be offered publicly and
40,000
shares will be offered to
company employees. -Prices—
The stoqk to be sold to the
public will be offered iat -$7.50

•

represents a part of the holdings of the present stock¬
holders. Indefinitely postponed.
;
J
,

Stock will be offered to

.Un-

—

'/•

selling stock¬

Sardik Food Products Corp., N. Y. (9 3-6)
May 29 filed 173,000 shares of capital stock (no par)*
Underwriter—George F. Breen, New York. Offering—

derwriters
Newburger & Hano; Philadelphia* .<and
Kobbe, Gearhart: & Co., Inc^ New York; Offering—Qf the

holders.

Philadelphia

common stockv

Treasurer, will receive net proceeds

1055

August 16 filed 315,185 shares (one cent par) common
stock. Underwriteri^Oi underwriting. Offering-^To the
public. Price—$1 a share. Proceeds—To do geographical
work on tractpf land for exploration, of tin ore. Business.
—Development of tin mine.
Westinghouse
(9/3-6)

Electric

Corp.,

Pittsburgh,

Pa.

Aug. 14 filled $30,000,000 of debentures, due 1971, and
1,647,037 shares ($12.50 par) common. Underwriter—
Kuhn, Loeb & Co. Offering—The debentures will be
offered to the public while the common stock will be
offered for subscription to holders of outstanding pre¬
ferred

stock

ratio of Ya

and

common

stock of

record

share for each share of co^^cm

(Continued

on page

1056)

Sept.
or

preferred

;

J *

•,5U-

the*commerci^&.fjna^cial:chronicle

1056

''Ly-"yy.

(Continued from: page 1055) -, ; r X
? -.t,
,held. Unsubsciiuea snaies will oe sold to underwriters,
vprices—By amendment. Proceeds—Proceeds will be used
J to finance part of the company's plant - expansion- and
rearrangement program

for increased

working capital.

i'4

Aug. 16

*'_>

<vL:'

*V*t£

Louisville,

Mayonnaise Co.,

(letterJol,;not^icatioii)^Id,000^

Wisconsin Power

erence

stockholders of

•>

•

'T;;./'.:

■

include> Merrill Lynch,

bidders

Dillon, Read & Co,

Proceeds-

by'Middle West Corp.,

and part by pref-.
North West Utilities Co.,- parent

of Wisconsin, who elect to

sell such shares of ^Wisconsin;
them " upon! the;

which Will be distributed to

common

f|:iX

dissolution of North West Utilities Co*

Underwriters-r-By

bidding.

competitive

•' "■"■ ;• uy\jt

top holding company of .the. System;

X. :X XXXX-t Xxr:;
& Light Co., Madison, Wis.

May 21 filed 550,000 shares ($10 par)1 common stock to
be. sold

f!;:'

/Probable

The Wisconsin Co., and

XXX-.V'.:.
-

-Thursday, August. 22,;J940.

'f.rrrM? ■'**■■■

Part of the shares are td be sold

For retirement of bank

loans and expansion program.

y.x .«>.

Pierce, Fenner & Beane; White,- Weld & Co.; Glore,
Forgan & Co., and Harriman Ripley & Co. (jointly);

shares^($5 par)

share' in the ratio of one share for every five
No underwriting.

•

Vl'**

amendment.

Ky.,..

offered for subscription to stockholders at

common, to be

$10

'-A'S?

:V-V

Wheatley

shares held.

West Virginia Water Service Co..
llAug. 6 filed 46,400 shares, (no par) common. Under¬
writer—Shea & Co., Boston. Price, ■ by amendment.
Proceeds—Shea & Co. is selling 26,400 shares for its own
account and the remaining-20,000 shares are being sold
by Allen & Co., New Yorlc, with Shea, as underwriter.

■■

•

-) &&M';

ij'S

Prospective Security Offerings
(NOT YET IN REGISTRATION)
INDICATES ADDITIONS SINCE PREVIOUS ISSUE

•

..7'TS/tU

'!•

•

y.:,

*T.

<r'*

■,

S.V

'•

/*■

Airborne Cargo Lines, New

York;

;■

through underwriters.
Probable underwriters E. H. Rollins & Sons.
which

Aug,^12 with; change of name from Hoosier Air Freight
Corp. additional tinancing for purchase of additional
planes expected. With Greenfield Lax & Co; Inc. as un¬

will

offered

for

Arkansas Power &

derwriters.

sale

Light Co.f Little Rock, Ark.

March 30

Air Commuting, Inc..

reported company planned to issue 290,000
shares common stock (par $12.50) and $5,000,000 in
promissory notes, for purpose of paying current promis¬
sory notes and finance expansion program.
Probable
bidders include Dillon, Read & Co. Inc.; The First Bos¬
ton Corp., and Blyth & Co., Inc.

july

16 possibility of same new financing seen if the
Civil -Aeronautical i: Board approves recommendations

of its examiners of company's plan to es¬
extensive airplane commuting service radiat¬

made by two

tablish

ing over the New York City metropolitan area of
jchester County, New Jersey, Staten Island, Long

WestIsland

Atlantic City

Transvaal Corp.

Lddenburg, Thalmann & Co, and Lazjard Freres & Co.
announced Aug. 13 that they are forming the American
Anglo-Transvaal Corp., a $20,000,000 company, for the
further expansion of mining and industrial activities in

Atlantic Refining Co.,

Schroeder &

May 7 stockholders approved proposal to- increase the
company's indebtedness from time to time by additional
amounts not in excess of $50,000,000 in aggregate; The

Brothers

Lazard

Co.

and

subscription of an initial capital of $9,000,000 for theriew
company. Operations of the new company will be man¬
aged by the Anglo-Transvaal Consolidated Investment
Co., Ltd., under the general direction of the board of di¬

purpose of the plan, it was said, is to place the company
in a positidh fd fuhd bank ioansi addi to working^apital
and to

rectors of American Ariglo-TranSvaal, composed of rep¬
resentatives of the New York, London and South African

Jmterests.

April 16 reported that Alien Property Custodian may
shortly ask for bids on 535,000 shares (77.24%) of the
stock of the corporation.
Probable bidders include
Glore, Forgan & Co. and Lehman Brothers (jointly),
and Blyth & Co., Inc.. and Merrill Lynch. Pierce. Fenner
The Wallenberg financial interests
of the stock now vested in Alien
Property Custodian, have brought suit to recover the
stock or the proceeds thereof.
& Beane

(jointly).

owners

American Power & Light .Co.
in

near

future

company;

ding of 15% of the common stock of each of the follow¬
ing subsidiary companies: Florida Power & Light Co.,
Kansas Gas & Electric Co., Minnesota Power & Light

Co., Montana Power Co. and Texas Utilities Co.

American Progressive; Health Insuiv Co., N. Y»

July 10 (letter of notification) expected to be filed at
early, date for 60,000 shares of convertible* preferred,
stock, with B. G. Cantor & Co. as underwriter.
•

American Telephone

| Atlantic Refining Co.

& Co.

;

increasing the authorized common shares from 25
Debentures would be offered to

million to 35 million.

shareholders in proportion of $100 debentures for each
six shares held.
Up to 2,800,000 shares of stock may be
.

are

underwriter, Smith,

-Probable

favorable.

Barney & Co.

was reported that one effect of the railroad
freight rate adjustment is expected to be a stimulation
of bond refundings. Among the roads whose refinancing

June 22 it

programs may then crystallize, the Baltimore & Ohio
named as a leading prospect, now that- all barriers
consummation

its

$500,000,000

plan have been eliminated. Other portions of the debt
now thought to be attractive possibilities for a refinanc¬
ing operation besides the $76,900,000 of first mortgage
4s and the $67,800,000 first mortgage 5s.
There are
$37,200,000 of Southwestern Division 5% bonds, $36,800,000 Pittsburgh, Lake Erie & Western 4s, and $10,000,000
Toledo-Cincinnati Division mortgage series A 4s.
Prob¬
able bidders, if refunding operations crystallize; are
Kuhn, Loeb & Co., and Halsey, Stuart & Co. Inc.

stock.

addition, company proposes to create

new

110,000 additional shares of common stock and

United States

Government,

Inch Natural Gas Transmission Co., of

of bonds under new mortgage, through
competitive bidding.
Probable bidders include Harri¬
man, Ripley & Co., Inc.; Lee Higginson Corp., and

Stuart & Co., Inc.,

and Oti$ & Co., it is said,

syndicate which would

•

Biauner's, Philadelphia

refund¬
issue of
150,000 shares of convertible preferred, to be issued in
series; (2) on changing par of common from no par to
$3 par; (3) on splitting common on a two-for-one basis.
An initiali series,.*>£ 30,000 shares of preferred will be
offered publicly to refund $3 preferred and working
capital. Probable underwriter, Van Alstyne, Noel & Co,
Oct. 8 stockholders

will vote (1) on authorized
preferred stock with new

ing of $3 cumulative

•

Blumenthal

& Co., Inc.

(Sidney)

stockholders will vote on increasing authorized
common stock from 250,000 shares to 500,000 shares (rid
par).
Approximated 119,706 new shares would be of¬
fered for subscription to stockholders at $10 per share
in the ratio of one new for each two shares held.
Offer*
ing will not be underwritten.

Sept. 19

Boston

Chicago

Store,

July 15 ownership of the Boston Store changed hands
formally when a syndicate headed by Edgar L. Schnadig,

all of the capital stock of the

purchase, in addition to the syndicate's own money,
were furnished by
a secured loan of $3,500,000 from
Penn Mutual Life

Co.
voted to issue an additional 450,000
shares Of common stock when and if new capital is
needed.
Probable underwriters, Hincks Bro. & Co.;
Stone & Webster Securities Corp.; Hornblower & Weeks.
Bridgeport (Conn.) Bras®

April 23 stockholders

Buckeye Incubator Co.

Aug. 20 stockholders voted to

increase authorized com-*

300,000 shares (par $2). The addi¬
tional 50,000 shares will be offered for sale subject to
preemptive rights of stockholders, at such times and m
such amounts as determined by directors.
mon

June

^amongst the 1§
'Assets Adminis¬
r

"Big" and "Little Inch" pipelines con¬

structed during the war by. the government
about $145,000,000. E. Holley Poe, head of

at a, cost of
natural gas

consultants, and his associates offered to (1) rent the
lines for 40 years at $6,500,000 a year—a total of $260,-

000^000—or (2) purchase the lines for $80,000,000 with
"a potential additional deferred payment of $20,000,000,

from 250,000 to

it was reported

400,000 first mortgage

& Ohio Ry.
that a refunding of the $21,-

4% series A bonds of 1965 is seen

possibility. Probable bidders include
body & Co.; Halsey, Stuart & Co. Inc.

Carolina Power &

Light Co.

?
Utilities Co.
and American Public Service Co. approved by the SEC
a sufficient number of shares of Central & Southwest
Corp., the new company, would be sold at competitive
bidding to provide funds, not otherwise supplied, to
retire
outstanding preferred stocks of Central and
American.
Possible bidders:
Glore, Forgan & Co.;
Lehman Brothers-Lazard Freres & Co. (jointly); Smith,
Barney & Co.-Harriman, Ripley & Co. (jointly); Blyth
& Co., Inc.; Stone & Webster Securities Corp. and First
Pursuant to plan of

6- C O.

ffSf Our Sixteen Offices
Serve

^
t

Vj*

California and Nevada,
j-jX

f. 1V
BUFFALO

CHICAGO

CLEVELAND
:

PHILADELPHIA ;

PITTSBURGH i>

^ ST. LOUIS

& Co., Inc.;

and Kidder,

incorporated

INC.

Kidder, Pea*

Aug. 8 Electric Bond & Share Co. will probably offer
420,000 shares of Carolina Power & Light Co. common
stock for sale at competitive bidding, which will shortly
accrue to Bond
Share pursuant to the plan for disso¬
lution of National Power & Light Co. Probable bidders
include Morgan Stanley & Co.; Dillon, Read & Co. Inc.,'
W. C. Langley & Co. and * The First Boston Corp.

(jointly); by Smith, Barney & Co., Blyth
Peabody & Co. (jointly).(

First California Company

Underwriters and Distributors

BOSTON

term loan of $1,-

Insurance Co., a long

500,000 from the First National Bank, Chicago, and $5,000,000 in a short-term loan from the Union Securities
Co., New York. To retire the short term loan the com¬
pany, it is said will issue preferred and common shares
to be sold publicly through a syndicate headed by Paul
H. Davis & Co., Chicago and Stroud & Co., Philadelphia,

Central & Southwest Corp.

NEW YORK

operat¬

ing company, the Boston Store of Chicago, Inc., and cer¬
tain real estate rights for' $14,000,000.
FUnds for the

Carolina, CBinchfield

"Big" and "Little Inch" Pipelines

Corporate Securities

LAI R

would head

underwrite the securities. £
Both offers agreed to maintain the lines for immediate
reconversion to oil delivery in case of a national emer¬
the

Halsey, Stuart & Co. Inc.

State, Municipal and

which

United States Senator from

Ohio and sponsor of the Natural Gas Act, is President,;
offered to pay $85,000,000 cash for the lines. Halsey,

Com¬

equal amount

tration for the

each share of outstanding common stock
(no par) into four shares of $1 par value. Company
would then have outstanding 340,000 shares of common

The Big

the public

ivfc*

Bangor & Aroostook RR., Bangoiy

April 16 stockholders authorized new mortgage.

Leading natural gas producers were
bidders who submitted bids to the War

issue of

to
debt adjustment

Apex Electrical Manufacturing Co.
Aug. 26 stockholders will vote on plan which provides
for changing

;

Robert J. Bulkley, former

Chicago, purchased
Baltimore & Ohio RR.

issued and sold to employees.

undetermined amount will be sold when market con¬

ditions

pany contemplates refinancing one-third of outstanding
funded debt (Dec. 31, 1945, $12,665,000) through sale of

& Telegraph Co.

Oct, 16 stockholders will vote on creating a new issue
of convertible debentures not to exceed $351,000,000, and
on

•

the

expects to file with the SEC
plan for retirement of its preferred
stocks which would include the sale at competitive bid¬
Aug. 7 reported

provide funds for capital expenditures. Probable

underwriters include Smith, Barney

Nov, 1. stockholders will vote on authorizing 650,000
shares of new preference stock (par $100), of which

American Bosch Corp.

of Sweden,

Philadelphia

J. Henry

Co., both of London, to participate in the

invited

Inc., would head a group of underwriters for
offering of stock incidental to the financing.

gency.

Inc.; Harriman, Ripley & Co.

The two New York concerns

the Union of South Africa.
have

Electric Co*

July 9 the offering of 1,150,000 shares of common stock
(now owned by American Gas & Electric Co., parent)
seems probable in the Fall, in compliance with the Utility
Holding Company Act. Probable bidders include Mellon
Securities Corp.; The First Boston Corp.; Blyth & Co.,

and Connecticut.

American Anglo

depending upon the gas carried by the lines." It alsd
was said that the banking firm of Dillon, Read & Co.,

preferred stock ($50 par) ^

40,000 shares of cumulative

—

' X
L

(„

•:

" '/;«

.Head Office: San Francisco

i r '

') f

ifitr

Pnrn

f imntl

Central & South West

•

••

„

Volume 164
;

Number 4518

..THE?^ ,COM;M-ERCM^v^

QHRb^iCLB':

Century Manufacturing & Instrument
Ekco Products Co.
Co.J.
May ZJ.reported Estes, Sriyder & Co.; may uwdenvrite
Sept.-6 stockholders will
offering of common stock following merger of Century
Offering
a plan to .create a
new issue of $7,500 Oftf) nrpferrprl
stnr»k- and tn inrrpncp
and Continental Geophysical Service Co.
0.
authorized common stock from
750,000 to 1,500,000 shares
to, permita; two-for-one split of outstanding common
Chesapeake & Ohio Ry.
stock; 3tJs proposed to offer publicly; $6,000,000 of new
•June 18; reported that probably one of
*the:early 'develconvertible, preferred, and 40,000 new,; common shares.
opments. when and If the merger of Chesapeake & Ohio
Union Securities" Corp. is
expected to head the under¬
^Ry. and the Pere Marquette, Ry.is approved will be
writing group. Part of the proceeds from the financing
;• .a refunding operation to take in the debt of both roads.
will ibe used'tdfretire
■; & & Q.t it is
4preferred stock at $ 110 a
expected, - will take. step®, to refinance the
/fclefutidihg andimprovement 3V2S, due in 1996, of which share, and the remainder; will be; added to general funds
^to replace ^mounts spent |or new plants and equipment.
$37,500,000 series D- aiid ' $27;60Q,OOuO,series\ E were out¬
standing at the close of 1945. The Pere Marquette has
Empire District Electric Co., Joplin, Mo.
outstanding $59,749,000 first mortgage 3%s, series D,
May 3 company filed application with the Arkansas P. S.
due in 1980. At the ICC hearings in ATirn nn me mprepr
nss in

1057

n«nne

•

rinax,

inc.

;

finanpial

4*Vl £k

ncov

•Pll4l1V«A

;-y

Aug. 7 company advised that'it
Vvill

will'probably
4-V%«"*4*

*\/\

/In-fi

some
v\Tn««

April

the merger

Xt rrfinancTne

::iConlmissl9n f5 ®uthopte;^ to
mortgage bonds due m

crcmosal
proposal, W
W. n. Wenneman st;
w. H
H. wenneman stated tnar
of
stateq,
romancing 01
the Pere Marquette issue would be undertaken
id
promptly

promptly

following consummation of the

merger. ~

;

additions and improvements
in Missouri,

Chicago Milwaukee St. Paul & Pacific Re ¬
issuance by the road of $58,900,000
lower-coupon first
mortgage bonds, proceeds from the sale of which would

\v
if the outstand¬

a new
long-term first mortgage
issue, with which to retire $4,200,000 bank loan
obtained to retire the
bonds of 1948, called for re¬
demption Sept. 1, 1946.

bond

on a

date of

•

stock

common

committee

directors

consider

■

GordonFoods,lnc.,Atlanta,Ga.
July

*'«■

*•" •

f1/'

■>>

•

.<<

August 6

making

v,.. >0

Dumdnt Electric Co.

•

Eastern

Stainless Steel Corp., Baltimore

Aug, 20—The management contemplates filing in the
near future a registration statement
covering an addi¬
64,000 shares of stock, to be offered to present

tional

stockholders in the ratio of

exhaustive budget study to determine what
to finance an expansion

one

tions

share for five. Negotia¬

are
proceeding with a group of underwriters
headed by Kidder, Peabody & Co., for the
purchase of
shares not subscribed by stockholders.

Gulf Mobile & Ohio RR,

Kimberly-Clark Corp., Neenah, Wis.
Aug. 9 stockholders approved an increase in authorized
common stock from
1,000,000 to 3,000,000 shares and a
two-for-one split in outstanding shares. On
completions
of split-up, 1,800,480 shares would remain for use in fu¬

ture

financing. Stockholders also authorized a new issue
of 125,000 shares ($100 par) preferred stock to be subor¬
dinated to the present 4^ % cumulative preferred as long
as

such stock remains outstanding. ' The additional

any

stock may be offered for sale later this year fa*
connection with the company's expansion program. Prob¬
common

able underwriters include Lehman

Brothers, First Wis-*-

consin Co. and Hallgarten & Co.

July 11 it

Reported company planning issuance of approximately >
$9,000,000 equipment trust certificates before end of this
^ear. First three installments would aggregate

Barney & Co;

Aug. 14 reported company planning additional financing
with First Colony Corp. as underwriter..
/

ganization.

Kingdom of the Netherlands

Issues include Smith

former group. The stock is understood to
represent hold¬
ings of W. H. Somtner, former President of
Keystone,
and of Forest Park Home
Foundation, a charitable or¬

program.

has authorized new plants and addi¬
estimated $40,000,000 over the next
four years. Probable underwriters of any new

three

additional.capital will be needed

company

costing

May 23 reported directors giving careful consideration
a splitup of common
shares and issuance of additional
new stock, but it is
likely that no action will be taken,
before September. The
management, it is said, is now

Dow Chemical Co.1
tions

;

Grand Union Co.

for each share of outstanding $3 cumulative partici¬

pating preferred.

opportunity to exchange their shares for shares of such
new preferred and class B common stock on the basis of
one share of new preferred and one share of class B com-*

Keystone Steel & Wire Co.
August 6 reported negotiations are under way between
certain stockholders of Keystone and a
group of secur¬
ities firms headed by The First Boston
Corp, for public
said of 182,316 shares of Keystone stock held
by the

<■

reported company plans the sale of 20,000
shares of convertible preferred stock and
100,000 shares
of common stock, with
Johnson, Lemon & .Co. and Allen
& Co. as underwriters.
•
; V
1
»
?,

pating preferred in respect to both dividends and assets.
It is planned to offer present preferred stockholders an

•'

Halsey, Stuart & Co., Inc. (bonds only); The First
Inc.; Kidder Peabody & Co.;

Boston Corp.; Blyth &
Co.,
Harris Hall & Co* (Inc.).

Di Giorgio Fruit Corp.
September 5 stockholders will consider, a plan to create
a new class of non-participating preferred
stock, $3 cumulative and junior to the present; $3, cumulative
particlr

mon

clude

Ripley & Co.

May 28 reported prospective financing being discussed
with MerrRl Lynch, Pierce, Fenner &
Beane, as under*
writers.

Kansas Power & Light Co.,
Topeka, Kan.
May 31 reported company probably will replace out¬
standing bonds and preferred stock with new lower cos*
Securities. Probable bidders if securities are sold in¬

Goldring Merchandising Co*

Kansas City Power & Light Co.
July 9 it was reported that company may in near future
refund its outstanding
$38,000,000 bonds and 40,000 shares
of preferred stock, with securities
carrying lower coupon
and dividend
ratess Probable bidders include Halsey*
$tuart & Co. Inc. (bonds only); The First Boston
Corp.;
Mellon Securities Corp.;
Harriman,

Inc., Columbia, S. C.
registration statement covering 650,000 shares of common stock
(par $1). Expected to be
filed at an early date with Newkirk &
Co., New York, as
principal underwriters. Public offering price about $5
per share.
/
J:.
<"

refinancing of $65,000,000 3%s and 4s. Probable bidders
include: Mellon Securities Corp., First Boston
Corp.,
Dillon, Read & Co. Inc., Coffin & Burr, Halsey, Stuart
& Co., Inc.,. and Spencer Trask & Co.
y

■

Corp.;
Halsey, Stuart & Co. Inc. (bonds only); Dillon, Read 81
Co. Inc.: (stock only).

;

formed

through competitive bidding $20,-

new

the company to carry out the
provisions of the amended)
Probable bidders include the First Boston

previously privately held con¬
It is expected that Luckhurst & Co., Inc. will head the syndicate of underwrit¬
ers
handling the issue.
r

amended plan filed with SEC com¬

plan.

resulting ■ from

Fresh Dry Foods

(par $5).

(Dei.)

first mortgage bonds and such number of
3,000,000 common shares as may be necessary to enable

pommon stock will be the initial;distribuf

Detroit Edisoh Co.> Detroit, Mich.
March

000,000

than 40 years.

May 29 reported

reported that company is planning some
Otis & Co. reported as probable under¬

pany proposes to sell

tion of securities of this

underwriting is contemplated at a future
probably $200,000 debentures and 156,000 shares

one~

Brothers; Blyth & Co., Inc., and Halsey,

May 21 pursuant to

pany's prog^ip; of expansion which recently included

con¬

Power & Light Co.

Interstate Power Co.

the acquisition of three additional wholesale
grocery concerns. Sale of

Corp., Chicago

(Ind.)

The merged company would have
524,-

common

was

new financing.
writer.

application proposing merger of four

company plans sale of 125,000 shares ($10 par)
convertible preferred and 60,000 shares of common stock.
Proceeds of preferred will be used to further
along com¬

2,188|890 shares of $5 cumulative preferred stock. Prob¬
bidders include Morgan Stanley &
Co.; Halsey,
Stuart & Co. Inc. (bonds only), and Blyth &
Co., Inc.

Aug. 16

June 26 it

Flagstaff Foods

shares for

was

clude Lehman

Aug. 14

in order to force its

basis of two

Stuart & Co. Inc.

Public offering of stock expected.
Prob¬
able bidders include E. H. Rollins &
Sons; Rauscher,
Pierce & Co., Inc. Blyth &
Co., Inc.; The First Boston
Corp.; Otis & Co., and Harriman Ripley & Co. r

cern

reported that company probably wiR
replace its $32,000,000 first 3%s due May 1,
1970, with
new
lower-cost securities.
Probable underwriters in¬

common

the merger equals the number of Federal

able

Culver

Indianapolis
April 24 it

outstanding.

plah^the'companyfpropdses to refinance the outstanding

underwriters include Merrill Lynch, Pierce, Fenner &
Beane; Otis & Co., and the First Boston Corp.
-: ' y

903 shares ($7 par) common
stock, all held by Federal,
which now owns all the common stock of the
subsidi¬
aries.
The number of common shares ■'

$100,000,000 each and the third for
$90,000,000. After issuing the first series the company
would then call its $179,240,000 of callable
mortgage
bonds and obtain discharge of mortgages
covering $15,869,000 of non-callable bonds.
In another part of the

of New Mexico.

to be

for redemption

common

underwriting will be arranged for the conversion in
order to sell the amount of common
stock needed to pay
off the preferred not tendered for
conversion.
Probable

Co., Las Vegas
Lights Power Co. and Deming Ice & Electric Co.* would
be merged into
Albuquerque Gas & Electric Co. Albu¬
querque's name would be changed to Public Service Co.

1948 and 1949—a total of
$320,109,000 of long-term debt.
The $290,000,000 of new mortgage bonds would be sold
by bidding in three separate issues in rapid succession,

stock

version into

New Mexico subsidiaries of Federal will
be held by SEC.
the plan, New Mexico Power

Consolidated Edison Co. of New York/ lnc* :
July 3 company formally submitted to the New York
Public Service Commission its plan to issue $290,000,000
of new mortgage bonds as part of a
plan to redeem
$304,240,000 of callable mortgage bonds and debentures
and $15,869,000 of non-callable
mortgage bonds due in

IfeS

Under

$20 a share and on creating a new class of preferred, of
which 2,200,000 shares are to be sold to
replace present
$5 preferred.; If approved these steps would be under¬
taken after completion of
$290,000,000 bond refunding,
probable bidders include Morgan Stanley & Co.

International Dress Co.

Aug. 23 hearing

write-down of about
stock from $34 to

its

by
Co.

and North American
Light & Power C<*.
holdings comprise stock, dividend arrears certifi-

ferred

Federal Light & Traction Co.

common

the first two

financing application in providing
$10,000,000 of new preferred stock to raise
funds for paying off the
$11,596,680 of dividend arrears^
certificates and in calling the
existing $24,175,000 pre¬

company announced agreement to acquire con¬

increasing authorized

April. ^ It calls for complete cancellation of thp interest,

underwriters.

Consolidated Edison Co. ol New York, Inc.

Oct. 8 stockholders will, vote

Decatur, lli.

filed a recapitalization plan with SEC
pursuant to Section (11) E of the
Utility Holding Company Act. The plan differs in one essential from the
fifinancing application filed with the Commission last

The plan follows the
for issuance of

relative to the sale of

$162,500,000 in stated value of

Illinois Power Co.,

| cates, Central Terminal Co. notes and warrants to pur¬
chase an additional
300,000 Illinois Power common shares*

Stockholders will vote Aug.
from 1,000,000 shares
2,000,000 shares (par $1). Probable public offering of
over
300,000 shares with Van Alstyne Noel & Co. as

stock

Jujy 2,company has

American

trol of two Cuban Airlines.

Citizens Utilities Co.

•

common

Expreso Aereo Inter-Americano, S, A.
July 27

fi'

(A.)

2-for-l and on
authorizing an issue of
$1,500,000 convertible preferred stock. Probable under^writor; ^lerrill Lynch, Pierce, Fenner & Beane. " - - •

Espey Manufacturing Co., Inc., N. Y.
Aug. 9 expected early filing (by notification) of
59,500
shares (par $1)
commop stock. Offering at $5 per share
expected at. end of Aug. with B. G. Cantor & Co. as
underwriter. Company is an 18-year old radio manu¬
facturer. It manufactures radios tinder private brand
names, i.e. Macy's, Bloomingdaies, Spiegel, &c.

July 24 company is negotiating wiih investment bankers

;

June 14 reported
company, manufacturer of air coupes,
contemplates the issuance of 300,000 shares of common
stock, with Rtapbill, Noyes & Co. .as underwriters.

ing debt is retired through proceeds of its utility equities,
that preferred stockholders
might be offered a new 4%
preferred in exchange for the old issues, in the amount
of call prices plus arrears
(approximately $113,486,250).

?yj. '■'/

■

& Son, Inc., Newark, N. J.
f
Stockholders will vote sometime in
August on splitting

These

Engineering & Research Corp.

competition for any new offering, viz.: Kuhn, Loeb &
Co.; Mellon Securities Corp., and Halsey, Stuart & Co.,

yet been formulated.

Z%'y0 p- '•&
I
v
Hollander

tp the company's —^
properties

be used to redeem first mortgage 4% bonds;
1994,
is expected to be postponed until late this
year. Earlier
plans were for the retirement of tho bonds July 1.
Three investment banking groups were set
up to enter

§|

:$2,000,00p be used for
2%% iirst
would

Arkansas, Kansas and Oklahoma. Probable
bidders include The First Boston
Corp.; Halsey, Stuart
& Co. Inc.; Shields & Co. and
Lehman Brothers.

Cities Service Co., New York:July 17 it is suggested that when and

.■

issue

1976.^Proceeds

has

•

to be offered
*

$3,000,000,

competitively
,

■

Aug. 30.

eers

common

stocks of

two

•

Gulf

States

Utilities

through issuance of rights.

stock

would
,

unsettled;

Industries

stockholders

others)

proposes

$100)
.

;

will

vote

approving

the creation of 71,273 shares of 4%

convertible preferred

distributed
,

intended to file the issue with the SEC the week,

La France

Oct.

subsidiaries.

Gulf States Utilities Co. and El Paso Electric
Co., and for
their distribution to Engineers common stockholders.
The

was

of Engin¬

Public Service Co. part one of the
plan calls for

reclassification

banking houses headed by Kuhn, Loeb & Co. will carry
interest rate of 3%% and will run 25 years. Although,

of July 19', the filing has been delayed due to
market conditions.
'

Gulf States; Utilities Co.

May 24 in connection with plan of dissolution

stated that the forthcoming $50,000,000^

■

was

bond issue to be floated by the Netherlands Government
in the American market by a syndicate of investment

(among-*

cumulative^

stock (par $20), which company
to exchange for the 6% preferred stock (par

the basis of six new: for each share of old.
(Continued on page 1058)

;

J
£

•'•••' "

' 7V-'<

-V' j. '.Mr

•

'•!•

•-

•' »'.K

*''b.

1 "i1 *.

v-tf '■

It is proposed to offer for

shares.

(Continued from page 1057)
vV

•

Thursday, August 22, 1946

THE COMMERCIAL & FINANCIAL CHRONICLE

1058

'^*\' \

£-V V/A

>'•>''• • * '

Lytton's, Ronry C. Lytton & Co.
? Aug. 28 stockholders will vote oil authorising aft increase
in capital stock from 500,000 to 1,100,000 shares. Of the
proposed shares, 100,000 would be preferred stock (no
par) and the balance common stock. The proposed in¬
crease will permit a public offering of 50,000 shares of
the new preferred, the proceeds of which will be used
for expansion purposes. Probable underwriter, Allen &

Seamprufe, Inc.

sale 67,454 common

9,723 unissued $2.40 dividend preferred stock
topftovide additional capital funds; & ; |

shares and

,
''

V'V&J

*' »*'

•

Atig. 14 reported company, manufacturer of women's
underweari planning sale of preferred stock with Fifst

Colony Corp, as underwriter.

New York Ontario & Western Ry.

T''"

'•/'.•I

$2,600,000 of 3% equipment trust certificates. Proceeds
will be used to help pay for four diesel-elee^M-ifreigbt
locomotives and 23 diesel-electric switching locomotives.
Probable bidders include Halsey, Stuart & Co. Inc., and,
Salomon Bros. & Hutzler.

•

Southern

July 29 company asked the ICC for authority to issue

V'." "

SoathefritGo^tGpH be;>successor' to Coihmbnwealt^
Corp./Vproposes to sell for cash (when

The
&

■

Co., New York

Southern

Commonwealth's

recapitalization

becomes effect

plan

tive) sufficient common stock to realize $10,000,000, to
be invested in Southern Co.'s subsidiaries and new
construction. ■
-V':-^yr -• ■:;^ ^ V■
' ,•'' •
...

New York State

Magma Copper Co.
*

S. Commission whi^^vpoptemplates

Edward Hopkinson,

the

of Northern Indiana.

com-

Weil

May, McEwen, Kaiser & Co.

Aug. 19 reported certain stockholders planning sale of
stock through Goldman, Sachs & Co. and

common

Hemphill, Noyes & Co.

Michigan-Wisconsin Pipeline Co.

•

Jr., Drexel & Co. attorney, expressed
opinion at a hearing before the Federal Power Commission that Michigan-Wisconsin Pipeline Co. can mar¬
ket its securities to finance construction of a natural-gas

Northern Indiana Publio Service Co.

Initial financing as outlined by the company also
of common stock. Fourth year
financing would call for issuance of $14,000,000 of 5%
preferred stock to be retired through a sinking fund.
/over 20 years and $12,000,000 In 3.14%, first mortgage
plans.

would include $17,000,000

bonds.

Mid-Valley Distilling Corp.,Archbald,

Bids for the purchase of

*•^tificates^ aeties
•

Milwaukee Gas Light Co.

July 18 SEC will hold hearing on the proposal to change
its authorized and outstanding common stock from a par
value of

$50

share to $12 a share and increase the

260,000 to
1,150,000 shares, and incidental transactions. The pro¬
posed transactions are steps in & general program of
American Light & Traction Co., the parent company, to
effect compliance with the Holding Company Act's pro¬
visions, which will ultimately result in the liquidation
^of that company $nd the distribution of its assets.

Aug. 14 reported company planning sale of common
with First Colony
'

stock

ing Company Act.

with new lower-cost securities.

Merrill Lynch,

Probable under¬
New York

new

presently outstanding 5%

collateral trust bonds by using the proceeds

$2,100,000 secured bank loan, and the repay¬
bank loan with funds to be received by

this

of the refunding of the bonds
wholly-owned subsidiaries—National Utilities Co.,
of Michigan, and Industrial Gas Corp. of Ohio. The new
the corporation as a result

of its

investment group consisting of Battles
& Co., Inc., Philadelphia; G. H. Walker & Co. of Provi¬
dence, R. I., and Smith, Landeryou & Co., Omaha, Neb.
Under the plan, National Gas & Electric also would
dispose of its holdings in Northern Indiana Fuel &
Light Co.
est

through

Neisner

July 30, in addition to the declaration of an increased
dividend

the

common

stock, directors voted July 30

to recommend to stockholders an increase in the author¬

ized

capital shares from 400,000, of which 206,000 are
outstanding, to 2,000,000, paving the way for a
The rest of the unissued common stock
would be used for corporate purposes. A special meeting
of common stockholders will be held about Sept. 1. ;* now

3-for-l split-up.

•

Neptune Meter Co.

Sept.
shares

$5)

;

stockholders will vote on- changing 250,000
(no par) to 250,000 shares common (par

common

and

increasing

authorized

amount

350,000

!•:

■•i'J -jiy i,', dS' </'■ •'J''

Corp.,

Chicago

•'.

j.-V;.;1'-- »->. 1

..v

•

•*

^-vr:

pro

rata.

will

Debentures are to be
Stanley & C0.5 Halsey,
probable bidders,

company

(Mo.)

Boston Corp.

& Co., and Halsey, Stuari

Union Railroad

Public Service Co;
petitioned the Missouri Public
simplify its financial structure,
interest and sinking fund changes.
retire current funded debt ($11,up to $10,000,000 new bonds, but
$6,000,000.
Probable bidders In¬
Co.; Blyth & Co., Inc., and First

(8/B7) j

United States Finishing Co.

Sept. 30 stockholders will vote on recapitalization plan
which provides.for a new class of 63,000 shares (no par)
$4 convertible stock and increase in common from 200,000
shares to 500,000 shares (no par). Holders of outstand¬
ing 7% preferred will have privilege of exchanging their
stock for new $4 preferred and common on basis of 1%
shares of new preferred and 13A shares of common for
each share, of old preferred. If plan is consummated a
total of 123,142 shares of corftinon stock will be available
for subsequence issuance.
*
;

(Va.)

Company will receive bids up to noon (EDST) Aug, 2T
at office of Treasurer, Union Trust Bldg., Pittsburgh,
for the sale of $1,500,000 equipment trust pertificates, $ie
bidder to specify the dividend rate.
v
~
* ,
'

company

through hew issue probable

Commission to

including reduction in
Company proposes, to
640,683) and to issue
limited originally to
clude White, Weld &

refunding its

& Co. Inc.

vote

was stated that the 236,819 shares of common
(now owned by Portland Electric Power Co.,
parent) may be publicly offered later this year, in com¬
pliant with the Utility Holding Company Act*
Prob-;
able bidders include Blyth & Co., Inc.

the

decides to refund

bidders will be Kuhn, Loeb

stock

St* Louis

Union Pacific RR.

Rubber Co.

stockholders

of Missouri

May 9 it was reported officials are considering the ques¬
tion of meeting the $100,000,000 first mortgage railroad
and land grant 4's due July 1, 1947. However it is felt
maturity date is too far away to determine now whether
Issue will be paid off in cash or .will, be. refunded. If

Portland General Electric Co.

' ■■

outstanding $90,000,000 2%s of 1971 with lower cost
obligations. Possible bidders would include Dillon, Read
& Co. Inc., and Halsey, Stuart & Co*, Inc.

July 9 it

Service

't • K

Union Electric Co.

split-up of
the common stock oft the basis of aft ^exchange OLt^
new shares for each old share, arid on authorizing 109,000
shares ($20 par) preferred stock. *

April

Brother*, Inc.

stockholders

Pharis Tire &

$980,000 first mortgage 3% bonds of the Michigan sub¬

It is rumored that company contemplates

Telegraph Co.
California Railroad Comr

sold competitively with Morgan,

sidiary would be sold privately at par and accrued inter¬

}

Lighting Corp.

Stuart & Co. Inc.; Blyth & Co., Inc., as

public but it was stated an announcement of the
financing would be made public in about five weeks.
1

$75,000,000 40-year deben¬
tures and to sell 328,125 shares (par $100) common stock,
the latter to be offered for subscription to preferred and

Sept,

Edison Co.

(Ohio)
was

made

probably be underwriters.

•

rear-engine passenger car has been completed by Pres¬
ton Tucker. The name of the investment house was not

Pierce, Fenner &

plans for refunding the corporation's 200,000 shares (nopar) cumulative $5* dividend preferred. Blyth & Co. will

common

class

August 7 negotiations with an investment house to un¬
derwrite an initial public issue of about $20,000,000 to
finance his venture into the automobile field with a

company applied to
mission for authority to issue

June 11 company, filed with SEC a voluntary plan of
simplification and recapitalization calling for retirement
of the company's entire funded indebtedness through a
series of financing operations.
The plan provides, initi¬

Tucker

Beane; The First Boston Corp., and White, Weld & Co»
Pacific

a new

reported that a refunding program; Is
contemplated at an early date for this company to be
followed later by sale at competitive bidding of the com¬
mon stock now held by Cities Service Power & light Co.

140,000 shares Of new common stock, proceeds of which
wiU be used to reimburse treasury ana retire bank loan
used 1ft redeeming the 7% preferred stock*
Probable

Pacific Telephone &

National Gas & Electric Corp.,

ment of

Toledo

May 28 it

„

July 25

prior to com¬

writers Van Alstyne, Noel & Co,

ally, for redemption of the

June 7 directors authorized the management to prepare

May 23 it was reported that company may refund it«
outstanding $4,300,000, 5% debentures due 1959 later this

first lien

Thatcher Glass Manufacturing Co.

include

authorizing

August 29 ^tockboiders df^^ Thateher'
changing name to Thatcher Glass Mfg. Co. and increase
authorized capital stock from 750,000 shares (no par) to
1,500,000 shares (par $5) and exchange two old shares
for one new. If conditions warrant, company intends to
make a public offering of from 50,000 to 75,000 commoji
shares later this year.
Negotiations for underwriting
such public offering are not yet completed.

Company contemplates at same time Standard Gas &
Electric Co. sells its holding of common stock (in ac*
cordance with SEC regulations) to >sell. approximately

will

-phases of the company's expansion' program'Will,' it Is
said, necessitate a long-term loan of $2,500,000.
\

Oklahoma Gas & Electric Co., Oklahoma City

Corp. as underwriter.

National ContainerCorp.

year

plete divorcement of the Cities Service Co. from the
utility field in compliance with the Public Utility Hold¬

bidders

National Blouse Co.

Public Service Co.

completion: of the yefuftding t^jpram

Brands, Inc.

Stetson (John 8.) Co., Philadelphia ;
July 5 company was reported negotiating for the purchase of Mallory Hat Co,
This transaction and other

May 28 it was reported that early sale by Cities Service
Power & Light Co. of its common stock holdings of Ohio
Public Service Co. was probable following the virtual
This is one of the few remaining steps

in the bid.

Stanley & Co., Halsey, Stuart & Co. Inc., and Kidder,
Peabody & Co.

number of authorized common shares from

Mlmi^ r

was

Ohio

$7,880,000 equipment trust cer-

If proposal is approved, it is ex¬
pected that an initial series of new preferred stock will
be issued for the purpose of refunding 200,000 outstand¬
ing shares of $4,50 dividend (no par) preferred. Prob¬
able underwriter Morgan Stanley & Co.

reported April 10 that company ha& under con¬
sideration the refunding of $55,000,000 collateral .trust
AVi% bonds due 1975 and the issuance of a new. series,
of collateral tfust bond*.
Prospective bidde^^Morgaft

Pa.

August 7 company expects to file a registration statement
in near future covering an issue of stock, with E. F. Gillespie & Co., New York, as underwriter. The proposed
offering under Regulation A Filing has been withdrawn.

*LL^^^dhted^^ Sept^^^15;1946 bridr1itte ifti 10

Oct. 2 stockholders will vote

•

Northern Pacific By., St, Paul,
It

Power

.equal annual installments from Sept. 15, 1947, will be
received at company's office, room 2018^ 70 Pine St.,
New" Ycfrk 5, W. Y., up to 12irroon, EDST, Sept. 4. The

Standard

bidders, Halsey, Stuart & Co. Inc., and Harrimaiij-Ripley ?
•

Electric

(9/4)

dividend rate must be specified

possible to reduce from 3 %% to 3% interest on $30,000,000 in 20-year first mortgage bohdswhich the company

Southern Railway

April 17 reported that company has underiponsidetfttlon'
the refunding of its $45,000,000 series C :3^kwith^isstie;
of about same size carrying lower coupon rate. Probable
Co.

stockholders

common

^^^^^^*pfApteferred stotk.

line.
The company completed direct testimony
Aug. 19 before a Commission examiner On its-application
to build a $48,000,000 line from the Hugoton Field of
Texas and Oklahoma.
Mr. Hopkinson said it might be

pipe

SEC

with

Light Corp.j would be given rights to subscribe to United
Gas Corp. common stock and stock of the new holding
company Southern Electric System, Inc. The latter com¬
pany would be formed to hold the stocks of Arkansas
Power & Light Co., Louisiana Power & Light Co., Mis¬
sissippi Power 8i Light Co., and New Orleans Public
'Service Inc. J
■

Northern Indiana Public Service Co.

May Hosiery Mills, Nashville, Teitn.

preierred stocks of Electric Power

preferred now outstanding.

body in Arizona.

July 29 rumored the sale of some 100,006 sharesof
mon stock planned by certain stockholders, with
& Co. and Allen & Co. as probable underwriters.

jflay jo pursuant to substitute plan for; retirement
Light Corp., filed

refunding the 3%% bonds with an equal face amount of
bonds and the issuance of $15,000,000 new preferred
stock of which $12,000,000 is to replace
•amount of.
new

Aug. 12 the Federal court for the District of Delaware
has approved the plan of reorganization for the Midland
Utilities Co. and Midland Realization Co. The approval
makes effective partial liquidating dividends of 14/10
shares of common stock of Northern Indiana, for each
share of capital stock of Midland Utilities and a dividend
of 1% shares of Northern Indiana for each share of Mid¬
land Realization. Following the - .distribution, Midland
Realization will have remaining 172$62-shares and Mid¬
land Utilities, 54,395 shares of North^ftsJndiana. These
will be offered for sale at competaa^fe"': bidding along
with 146,924 shares of Northern Indiana which Middle
West Corp. will receive on its holding of Midland Rcalization common. Public offerings will total 378,581 shares

;

Southern Electric System, Inc.

August 6 a revised refunding plan has beem filed with

Aug. 29 stockholders will vote on increasing the auth¬
orized capital shares to 1,200,000 from 410,000.
Of the
additional 790,000 shares, between 200,000 and 250,000
shares will be offered to stockholders at prices and
amounts to be determined by directors. The purpose^of
the financing is to provide for development and equip¬
ment of the company's large low-grade San Manuel
copper ore

Electric & Gas Corpa

Verney Corp.,-Boston, Mass.

consideratioti ' thft
simplification of the company's preferred stock and debt
structure.--Nothing definite as to the types of securities
that may be issued has been reached as yeU Under¬
writers may include F. S. Mosley & Co.; White,: Weld
July '3 the management has under

•

Savoy Oil Co., Tulsa, Okla.

July 1 stockholders increased authorized common from
150,000 shares (par $5) to 300,000 shares (par 25c).
Shareholders will receive rights to subscribe to 100,000
shares at not less than $2.50 a share.
Remaining shares
will be optioned to directors at same price.

Co.; Ladenburg, Thalmann Corp., and Lee
Corp.
-•
•
•
••
&

Higginson
,

^yioliimeNumber>4518
Wabash

Railway

.■; ?

„

THE COMMERCIAL & FINANCIALCHRONICLE

Western

/■/;;-^

May' l it was reported that company may possibly re¬
fund its $47,000,000 first mortgage 3&s of 1971 with 8
lower

issue.

coupon

Possible bidders include-Halsey,

June 24 reported an early
of

preferred stock and 50,000 shares. of
expected with First
Colony Corp.;
Rauscher, Pierce & Co.; B. V. Christie & Co.; Courts
& Co., as underwriters.
Preferred represents new fi¬
nancing, common being sold by stockholders. • Expected
preferred will be offered at $20 and common at $10
per share.
j.
,

Western Pacific RR,

-April 11. ICC conditionally authorized company to issue
$10,000,000 first mortgage bonds, series B, due Jan. 1,
1981, proceeds to be used to refund a like amount of
first mortgage 4% bonds due Jan. 1, 1974, and held by
RFC.
Interest rate to be specified in bids.
The direc¬
tors rejected the conditions attached by the ICC but on.
re-hearing the ICC July 19 affirmed its original order.
Probable bidders - include Bly th & Co., Inc.; Merrill
Lynch, Pierce, Fenner & Beane; Shields & Co., and
Glpre, Forgan & C.

.June 12 It ,wa$ reported cbmpany has under consideralion a refinancing program. Announcement Expected at
early date.

Waterman Airlines

July 17 reported company contemplates new financing.
Company intends to conduct, a non-stopalr cruise be-

J tweeri: New Orleans, San Juan, Puerto Rico and San
'■/.z/;/'-^

Juan dndNeifr■ York,

tomers

their
brought

was

•

suggested we develop a real train¬
ing program which would give
them
an
opportunity to - study
modern farming methods. Almost
500 of our 709 commercial banks

An intensive, grass-roots train¬
ing program on agriculture and
farm
management designed
to
better equip bankers of New York
State with a knowledge of fhe

problems- Of

These sessions proved to
helpful that rural bankers

culture,

N. Y. State Bankers

farm-lending institutions and,
naturally, place heavy emphasis
on service to farmers."
are

farmer cus¬
under way

An administrative committee in

registration of 75,000 shares

convertible

common

Stuart & Co., Inc., and Kuhn, Loeb .& Co.
V/aitt & Bond, Inc., Newark, N. J.

'Inc./'1/

White Auto Stores,

Maryland Ry.

May 22 reported company working on plans to refinance
$44,901,000 first mortgage 4s. Probable bidders include
Kuhn, Loeb & Co., and Halsey, Stuart & Co.: Inc.

stock

Wisconsin Public Service Co.i Milwaukee, Wis.

May 20 it was reported that Standard Gas & Electric
Co. expected to sell at competitive bidding some time
this year its holdings of 1,099,970 shares of common stock.
Probable bidders include The Wisconsin Co.; The First
Boston

Corp.; Harriman Ripley & Co.

Germans and their Hungarian ac¬

to the improvement and stabiliza¬ marking an important contribu¬
the tion of the Hungarian economic tion to the goal desired by the peo¬
Armed Z Forces
of
the
United position.
These
efforts
were
ple and Government of the United
States and held under their pro¬ marked as
recently as July 23 of
States' that Hungarian economy
tection in the American zone of
this year by a note to the Govern-'
occupation.
Wh
may be promptly restored so that
ment of the Soviet Union urging
"The United States Secretary • of
it may take its place in the econ¬
as had been done before such co¬
State
acting on behalf of the
American Government was asked operation of the Allied Powers to omy of Europe and the world."
by the Hungarian Government to assist
Hungary in rehabilitating
telease the monetary gold in ques¬
DIVIDEND NOTICES
its national economy.
tion during the visit of the Hun¬
"The arrival in Budapest of the
garian Prime Minister and mem¬

complices

captured

was

Aug. 10 when charge of arrangements for the
includes the following: bers of the
54 bank officials assembled on the School
Hungarian Govern¬ gold of fthe National Baiik is a
Otis A. Thompson, President of
campus of Cornell University to
ment
to
Washington last June. source of special satisfaction as
the National Bank end Trust Com¬
attend
the
Bankers * School
of
Secretary Byrnes acceded to the
Agriculture sponsored by the New pany, Norwich, Charles H. Norton, request of the Hungarian Govern¬
Trtist
DIVIDEND NOTICES
York, State - Bankers Association President,j" Erie /County
ment

lid Ithaca, N. Y„

for

(^mpan^/Easf/Aurora, W. Ran¬

nin cooperation with the New York
State College of Agriculture.

America, was in session for
days; and combined class¬
room lectures with Yield ixips add
laboratory
work.
Six
courses
were
given.
They were: farm
management,
agronomy,
dairy
husbandry,
pomology,
poultry
husbandry, and vegetable grow?
tng. The courses on farm manage?
fnent and agronomy were obliga¬
tory for all student bankers. Two
of the * remaining four' courses
iwere elective.^
The "faculty staff

then

considered

being

SOUTHERN

the

for

habilitation

the

have been

economy

Statement

special Interest

Release of

ment

United

the

Union

took

issued

statement

lowing

most gratifying

was

harmony

Bruckner

growing.)

about concerted

•

1946

New

York

State,

the

31,
•

Hungary

business

Professor

Farm

The Boqrd

20, 1946, declared

the

of record

October

dividend
ferred
Stock

clared

ber

the

with

annually

the

payable

pany,

August

1946,

will be;

21,

1946,

York,

for

September

Secretary

payment Octo¬
record at the

outstanding
October

It 1946 -to

dividend

holders

$1.75

Company

1946.

12,

the

business

PETERS,

The

per

stock exchange firm.

Refer¬

ences

supplied. Strictly

fidential.
mercial

Jcie,

Box

815, Com¬

Financial

Park

York S, N. Y.

con¬

Chron-

Place,

New

•

The Board of Directors fiat declared

the dose of business Septem'

dividend of 50 cents per share

ber 20, 1946.
•
/
R. JM. Waples, Secretary

and

additional dividend of -25 cents:

art

the Company's capital

the

twenty-five

Common

Stock

cents
of the

record

the

Checks will be mailed

Co., 16 Wall St.,
Transfer Agenjt.

cents
(25c)
a
share have today
been declared by Kennecott
Copper Corporation;

payable on
of

reoord

30,

September 30,
at

the

V",TZ.

York

1946,

15,

FINANCIAL

to stockholders
on
August

CHEROUNY, Secretary.

Kingdom of The Netherlands

The Board of Directors of

Declaration of

PITTSBURGH CONSOLIDATION

Netherlands Securities

COAL COMPANY
(Incorporated in Pennsylvania)
at a

meeting held today, declared
Stock

cents

per

the

the Com¬

the

Charles E. Bbachley,

Secretaty-Treasur&r
August 19, 1946.

—

Netherlands

Embassy,

corporations
domiciled or
of the Nether¬
lands have to be declared pursuant to the
and

States

United

/
The

COMPANY

Directors

International

Harvester

Company
declared- a 'quarterly
dividend
of
sixty-five cents (65c) per share on the common
stock payable October 15. 1946, to all holders
of record at the close of business on
September
16, 1946.

Royal

Decree

(

have

QUARTERLY DIVIDEND of One Dollar
($1.00) per share on the Common Stock of
Company has been declared payable at
Treasurer's Office, No. 165 Broadway, New
York 6, N. Y„ on Monday, September 16, 1946,
to stockholders of record at three o'clock P. M.,

SANFORD B. WHITE

Securities

for

of
'

F-272

filed

1946.'

which

declaration

Circulars

and

the

necessary

declarations may be obtained at
of

Monday, August 26,
will not
dividend.

books

this

New York, N.

1946.
closed

The stock trans¬
for

the

payment

Financial

the

lands
New

Embassy.
York

Office

States,
SIMPSON.

filed will become VOID in accordance with
the terms of said Decree.
■/.;•■//• /'.'/v.r''-

this

the

fer

Z-'-?,

115

amend¬
November
1

Netherlands Royal Decree E-100 as

SOUTHERN PACIFIC COMPANY
DIVIDEND NO.

not

are

Kingdom

the

owned

who

Individuals

resident

16, 1945.

York 4, N. Y. informs interested par¬
ties that Netherlands securities held in the

Declarations

HARVESTER

Broadway,

New

Company, payable on
September 12,
1946, to shareholders of
record at the close of business on August 29,
1946. Checks will be mailed,

Y.,

Counselor of

The Office of the Financial

quarterly

1946

INTERNATIONAL

NOTICE

business

1946.

before "October 15th,

/ '// Frederick Bramley,.* '•
,.
*
Secretary /

Montreal, August 12, 1946.

August 15,

Share¬
m.

New

H. G. SMITH, Treasurer

26,1946.

H, F. J. KNOBLOCH, Treasurer.

twenty-five

by Bankers Trust

of business August

cash distribution of tweniy-^vc
v_uo)
and
a
special cash
distribution of

mon

cent,

August 26, 1946. " - t ::
By order of the Board.

'to stockholders of record of the dose

Broadway, New Tort: 6, N. Y.

August 16, 1949

Directors!, has this? Jay

dividend

'V-

dividend of 35

meeting of; the Board of

funds pn October 1,1946, to
holders of record at 3 p.

record

DIVIDEND

September 30, 1946, to stockholders of

stockholders

(fifty cents per
share) on the Ordinary Capital
Stock in respect of the year
194(5
was declared payable in Canadian

100TH CONSECUTIVE

per share was declared oh the com*
mon
stock of the Company, payable

Company, payable September 10, 1946, to

Directors held today a dividend of
per

SULPHUR COMPANY

STREET, NEW YORK, N. Y.

Board, of

declared

two

TEXAS GULF

August 20, 1946

Secretary.

business August 27, 1946.

with

meeting of the Board of Directors,
held this day, a quarterly dividend of

upon

this

ELECTRIC BOAT COMPANY
33 PINE

WM.

Secretary.

ftp*

1946.

W. P. STURTEVANT,

Dividend Notice

connected

The Garlock

12®

per

record

September

RAILWAY COMPANY

Presently

KENNECOn COPPER CORPORATION

the cutCompany has
been declared payable October 1,
1946, and a
dividend of 40c per share upon the
outstanding
$Z5 .par value Common Stock of this company
has been declared
payable October 1, 1946, to

f CANADIAN PACIFIC

governments.

A! HENDERSON^

McCONKEY,

3, 1946.
and Treasurer.

Racine, Wis., August 20, 1946.

standing Preferred Stock

New "York State College of Agri-

excepting

DONALD

Packing Company

DIVIDENDS

stockholders of

business
W.
JACK,

the

Experienced all departments

Secretary and Treasurer

{Incorporated)

quarterly divi¬

organization
of

close:

4946.

«,

per

the close of business September

sessions

help

outstanding

Corporation
payable September

stock, payable September 16, 1946,

the holders of such stock of record
at

Ncw

STOCK

♦XL Case

dend of twenty-five cents (250) per

"The School is the outgrowth of

our

Transfer

1946.

13.

Street,

Cyanamid Company on August

20, 1946, declared

to stockholders of record at
of business on September

1946

the

extra cash dividend

on the
of
this

declared

30,

1946 to stockholders

will

Stock

been

the

per

has

the plose; of business^

Checks

$.25

'cash dividend of $,75

quarterly
share and

Common

1946.

of the Common Stock of the Com¬

^sponsored

this

The Board of Directors of Ameri¬
can

1,.

COMMON dividend

Chester R. Dewey,

farm credit

$1.50 per share on the Pre¬
($6)
and
a
dividend
of
$1.25
per
share
on
the
$5
Preferred
Stock
of
American Power & Light Company were de¬

stock

such

Rector

PREFERRED
A

at the close of business

September 4.

payable

holders of

Two

August

quarterly divi¬

VA%

Company,

1946

of the Grace National Bank, New

aeries -of

30,

declared pay¬
1946 to
stock¬

September 6, 1946.

COMMON DIVIDEND No. 281

5% Cumulative Preference Stock of

iBankers Association and President

the

American Power & Light Company

($.125) per share
the "outstanding shares of the

dend

^President of the New York State

Stock

been

record

August IS, 1946

efDirectorsofAmerl-

Cyunamld Company

can

and events' leading up to its

York City, said:

has
September
on

per

■,

payable

August 9, 1946

DIVIDEND

PREFERENCE

jtion, isAssistant ^Director and'
^Registrar.

organization,

dividend

Treasurer.

Man¬

In discussion the School's pur-

1946

business

Common

H. V.

Company

Agriculture, is Associate Director,
land Dondld A: Moore," Assistant
'Secretary of jhe Bankers Associaf

poses

Preferred

vertible

Corporation

the

1946/

31,

Secretary-Treasurer.

American Ctanamid

Exi

agement at the State College of

the

mailed.

S S

September

W/E. HAWK1NSON,

also Secretary of the* Bankers As¬

tension

record

September

mailed. -3

quarterly cash dividend of $.3114
Share on the outstanding ' Con¬

DIVIDEND NO. 89

books will not be closed. Checks

Jiwhe is Director of the School and
Dr. Van B. Bart,

Company,

the

record at

August

MFG. CO.-

stockholders

Recording to Albert L. Muench;

sociation.

regular quarterly dividend of forty
cents ($0.40) per share upon the issued
and outstanding Common Stock, without
par value, of,this company, has been de¬
clared, payable September 30, 1946, to

DIVIDEND NOTICES

sey, Pennsylvania, and Canada,

quarterly

»A

the

per

September 15,

(&»

Checks wUl

' *•-

business

Company" has declared

regular

12yac

/jiliis-(H AIMERS

This gold which had been

removed 'from

record

holders

the

The Board of Directors of Southern

Stock

National

holders

view

Massachusetts,. New Jer¬

1946,
*

Union- Gas

COMMON

Bank.

August

the

Hungary

4V*%

the

-on

payable; September 15,
stockholders
of
record

mailed,

jpiVIDEND NOTICES

train

gold

monetary

sented financial institutions in 23.
counties

special

the

brought

which

declared

dividend

lampng^ the
a

$112 Va

able

to the Allied Governments with

the" arrival

has

quarterly

per; share

Company,

at the Crimea Conference to bring

present last night on

occasion

(vegetable Budapest

The 54 banker-students repre¬

well

the

husbandry),

(poultry

land H,. C; Thompson

■I

tion

Company

Cumulative Preferred Stock

heads of the Allied Governments

press on Aug. 7, in Budapest by
H, ■ F,
Arthur Schoenfeld,
the

"It

initiative

$D06j/4

with the declaration made by the

the

Gas

the Tegular

American Government, therefore,

State Department at Washington
made public on Aug. 8, the fol¬

August 15, 1946

quarterly
oash
dividend
of
per share on
the outstand¬
ing
Prior
Preferred Stock
of
this
Corporation, has been declared pay¬
able
September 16, 1946 to stock¬

The Board of Directors of-Southern

The

States.

Captured Hungarian Gold

management); American Minister of Hungary:

(pomology),

CORPORATION

fOX FILM

Preferred |

Govern¬

the

|C. L. Turk (dairy husbandry), M. members of the American Lega¬
B. Hoffman

TWENTIETH CEMTURY-

and Common Slocks

matter of

Dividends

Hungarian

and Mr. Moore.

(agronomy),

UNION

CAS COMPANY

ture, Dr. Van Hart, Mr. Muench,

Bradfield

gold

Jn^uctioxi/ New stabilization 1 bf Hungarian fiStateZ College of Agricul? nances. ^Y^^stabiiizatidb" and re¬

York

^eluded Professors 'Stanley W.
!Richard

of the

tor bf: Resideht

five

Warren ' (farm

the release

with special reference to the plan
of
the
Hungarian
Government

dolph Burgess, Vice Chairman of
the Board, National City Bank of
The jschool, fhe. first of its kind

of
(v

4,
The

forms of
the Office

Counselor of the Nether¬

25 Broadway,

Room

1132,

N. Y.f and at any Consular
Netherlands in the United
•

Treasurer.

Y., August 15, 1946.

' New York, August 16th, 1946,

Economists for Free Markets
Exchanges and Allied Trades,
exists against government controls, i

National Association of Commodity

Inc. holds strong sentiment

control

commodities.

and 91%, of the chambers
'
3
4
:

tors;

of commerce.

The only subject covered in the
which

survey

reveals

sharp

prices

divergence of opinion is the main¬
tenance of farm price guarantees.

possible.

On this

commodity

point, 54% of the heads

The belief that commodity ex¬

Government controls on marketing of changes are important in market¬ of farm and commodity trade as¬
commodities in peacetime and for an early return to free markets ing basic commodities is also sub¬ sociations favor. maintaining
price
exists among economists, educa-S>
ttv
scribed to by 76% of the heads
guarantees, while 40% do not be¬
tors, heads of farm and com- neapolis,; Chicago _Mercantile Ex- of farm and commodity trade as¬
lieve farm price guarantees must
change,
Commodity
Exchange,
anodity trade associations, cham¬
sociations; 96 % of the editors of
Inc., New York Cocoa Exchange,
be maintained, the other responses
bers of commerce and editors of
farm and commodity trade publi¬
trade publi¬

farm and commodity

nation, ac¬
made public

cording to a survey

the National Association of
Commodity Exchanges and ^.llied

New York Produce
Exchange. Trade members of the
change, Inc.,

made by the Insti¬
Public
Relations, Inc.,

The survey,

tute

York
City, showed that
commodity exchanges, whose op¬
erations have been considerably
curtailed over a long period of

Ttfew

government control, reaching an
-during the war years, are
xegarded
by an overwhelming
anajority of authorities on com•modity marketing arid leaders in
collateral fields as necessary to
apex

peacetime marketing of basic

the

commodities

free

economy.

opinions in the survey are
most heartening to those who are
fighting for free prices and free
markets," J. A. Higgons, Jr., Ex¬
ecutive Vice-President of the Na¬

Association

Commodity

declared

Exchanges,

making

[^public the. results. "They

are of
at
this

;

particular
significance
time, when our whole economy is

at stake as a result of the efforts

of those

who

are

attempting

—

through the projection of wartime
controls
into
permanent

controls

—

economy upon
•

force a planned
this country."

Constituent members of the As-

I fiociation, which was organized to
develop
understanding of
our
commodity markets and to pro¬
mote their use, are: Hoard of
Trade

the

Board

City

Trade

Chamber

Chicago,
City,

in¬

represented

Commodities

coffee, cocoa,

clude grains, sugar,

butter, eggs, vegetable oils, hides,
raw silk,
rubber, silver, copper,
zinc, lead and tin, through pro¬
ducers, processors, brokers, com¬
mission
merchants, warehouse¬
and others interested in pro¬

men

majority

those

cations

the

groups covered by the survey be¬
lieve that the exchanges reduce

and

chambers

of the heads of

86%

states.

commerce

exchanges

Commodity

reduce

distribution costs and benefit pro¬

ducers

and

consumers

.—

the

opinion of 84% of the economists,
72% of the farm and commodity
association

trade

heads,

76%

being

doubtful

On the other

hand,

among the edi¬

tors of farm and commodity trade

publications,

removal

57%

and

antees

maintenance

i*'

Kansas

Commerce

...

guar¬

by 35% ,',73% of the cham-

ber of commerce executives favor

ity trade publications and 73 % of

removal of farm

chamber of

tors,

direc¬

commerce

Min-

agreeing

would

bad

that

price guarantees,

A separate study in the survey,

the

all

conducted

heads

among

col¬

leges and college agricultural and
business

departments, shows, by

colleges,

■

date

their

courses

individual colleges toward broad¬

ening
leader^ were asked, in the survey
to express their views. Detailed jury to American economy,'* to field.

instruction in
N
&if

their

Hungarian

called "forint."
One

kilogram

sponds

gold
lar

advices

0.0757

forint.

per

unit

monetary
The

add:

fine

gold

equals 13,210 florint which

corre¬

grams

fine

The official doU

exchange rate is 11.7393 forint

to one U, S. dollar.

The conver¬

sion rate for old pengo
currency
is 200 million tax
pengo to one

forint."

Wall Street Inv. Corp.
Wall Street Investing ■Corpora*
tion is conducting an. investment

business from

offices

Wall

Street, New York City,

With Stone & Webster
Alexander B..Lincoln

in¬

struction and the attitude of the

Arthur
Schoenfeld,
Hungarian Government

exchange equivalents of the

new

the Varying degrees of

changes

the

lar

attention given to commodity ex¬

surd," "a tragedy," "hell, no," "in¬

Stone & Webster Securities
90 BrOad

with

Corp^

Street, New York City,

this

of responses

provides "yes (good to close exchanges),
interesting ~ reflection of the
by all means" and "no, but should
thinking of men qualified as au¬
be supervised."
thorities on this subject,
-

96 % of all the
a special inter¬
in marketing who responded

example,

For

with

economists
est
to

questionnaires express

survey
the belief

that

commodity

Favoring
the

farm

and

association

trade

commodity

89%

81%

were

heads;

ex¬

Support the
RED GROSS!
<

early return to free

commodity trading

Preferred
Ctfs. of Deposit

farm

Common

play an important role and commodity trade paper edi¬
in marketing basic commodities.
84% credit the exchanges with re¬
ducing distribution costs; 88% op¬
pose the closing of all commodity
exchanges; 96% express opposi¬
changes

tion to floors

m.s.wien&co.

Trading Markets in

loans to support

commodity prices

peacetime;

ESTABLISHED 1919
Members N. Y. Security Dealers Attn

y'r,T'£ "

<VV.

Bottling Co. of Pitts.

Red Rock

Teletype—N, Y. 1-971
^

under

has announced the
gold and dol¬

antees must be maintained.

Responses

commodity exchanges were as
follows: economists, 88%; farm
consumers and producers
alike.
and commodity tr^de associations,
It would be bad for the nation's
87 %; editors, farm and commod¬
economy if all
commodity ex>
ity
tra de
publications,
93%;
changes were to be permanently
chambers of commerce, 94%. Re¬
closed, they say.
plies to this question range from
To obtain a cross section of the
"disastrous," "blow to free enter¬
attitude of persons of authorita¬
prise," "loss to the nation," "ab¬
tive opinion, approximately 1,800

tabulation

announced

Budapest,
that

and 24% believe farm price gua-

distribution costs to the benefit of

HAnover 2-0050
'

farm

price guarantees is advocated by

Red Rock
»'

ington,

Aug. 2, that it has been informed
by
the
American
Minister
in

unclassifiable.

the editors of farm and commod¬
the

duction., and- marketing, t
A

Money

The State Department at Wash¬

"The

tional

200.

total about

Association

^Trades.

York Coffee and Sugar Ex¬

New

Dollar,Equivalent

Of New Hungarian

Strong sentiment against

cations throughout the

Gold

should be eliminated as soon as

special interest in marketing, ex¬
belief exchanges play important role in marketing basic

Says 96% of economists, with
press

94% believe that, except in war¬
time, the government should* not
fix prices on commodities in gen¬
eral, and the same percentage be¬
lieve that, in; peacetime, Federal

Bottling Co. of Cleve.

Exchange PL, N. Y. 8
TtMlN N.

HA. 2-8780

1-1397

Firm Trading Markets

O'Sullivan Rubber Co. Common

\'}Zr> V.-.* i.

•

Northwest Leather

FOREIGN SECURITIES

Recent price 14

Wilcox-Gay Corporation

Sterling Motors

r.ARL MARKS & r.O- INC.

Recent price 12

FOREIGN SECURITIES
^PFPTflTTST*?

AFFILIATE: CARL MARKS & CO. Inc. CHICAGO—

Members New

" Argonaut Mining

NEW

YORK

PoIIak
Recent price 18^4

new York 1-576

Enterprise 6015

REotob 2-3600

bell teletype

telephone

s^'•/' •' 'yC'y

Analyses

Investment Trust Issues

National Food Products,

■'

1
~

•;'///'? l"

New Eng. Market

148 State

Specializing in 'ZLnlisted Securities
.V

Milk Street, Boston 9,

Boston

New York

Hubbird 6442

Hanorer 2.7913

Mass.

St., Boston 9, Mass.
»

24 FEDERAL STREET, BOSTON

Bank—Insurance

10T

TeL HANcock 8715

Public

Tele. BOstoa 22

$Xl

VK'< /

Utility—Industrial"-"Real Estate
\

MV"

v"1*

•

\ nj

' '

^Seaboard Fruit Co., Inc.
'

^General Products

Lumber & Timker
Grinnell

Sunshine Consolidated

.K'iiH

GROWTH SECURITIES
Eastern Engineering Co.
i

Teletype BS 259

Established in 1922

;

Specialists in

New England Unlisted Securities

Teletype
BS 328,

TEXTILE SECURITIES

Securities with

Frederick C. Adams & Co.
31

ir,yi'

•

TeL CAP. 0425

Ralph F. Carr & Co., Inc.

request

Public Utility Stocks and Bonds

Thompson's Spa Inc.
Securities

PHILADELPHIA

Association

Dealers

Industrial Issues

National Service Companies

Suburban Electric

Security

STREET,

Insurance and Bank Stocks

Preferred Utilities Units

A. & G. J. Caldwell

specialize in all

Torle

NASSAU

Recent price 33

•

TELEPHONE

Buda

incorporated
—

45
We

Company

Kobbe, Gearhart

New York 4, N. Y.

50 Broad Street

.Convertible Preferred
/recent price'-7%

Pressurelube, Inc.

£'

§ '/W..

cl-3

:;. v

■

/*;t

Corp.

Bonds, Preferred and Common Stocks

^Susquehanna Mills
Empire Steel Corp.1

'•

BOUGHT—SOLD--QUOTED

U. S. Radiator, Pfd.

recent

price

•Prospectus

request

Plomb Tool
-.

Fleetwood-Airflow, Inc.
y'/y

Common

recent

W. T. BONN & CO.
120

Broadway

New York 5

Telephone COrtlandt 7-0744
„

Bell

Teletype NY 1-886

price

■';•}*■

■ ■

4y4

ST., CHICAGO 4

WESTERN UNION TELEPRINTER "WUX"

Amos Treat & Co.
40

Wall

BO 9-4613

New York 5,
Tele

N. Y.

NY 1-1448

REITZEL, INC.

REMER, MITCHELL 8c
208 SOUTH IA SALLE

•

PHONE RANDOLPH 3736

BELL SYSTEM TELETYPE CG-98?

Hill, Thompson & Co., Inc.
Markets and Situations

120

for Dealers

Broadway, New York 5

TeL REctor 1-2020

Tele. NY 1-2660

Full text of Commercial and Financial Chronicle : August 22, 1946, Vol. 164, No. 4518, Section 1

FRASER