Full text of Commercial and Financial Chronicle : August 24, 1944, Vol. 160, No. 4310, Section 1

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ADO .3
Final

Edition

•;>

'9"

In 2 Sections-Section

ESTABLISHED OVER 100 YEARS

1

v

_

ommeteia

Reg. U.

Volume 160

.Number 4310

New York, N.

Following The Crowd Southern
Roger W. Babson Advises
,!

;•

■

*!:. •v;J Against~

v

BABSON

think

PARK,MASS.

proven

.it '; can.^statistically
be
that the public is usually

wrong

irr its

■

and

1

tne

lose

money" in

end,
the

Their Rate Structure

do

,

-

By DR. WILLIAM F. EDWARDS*

Partner, Naess & Cummings, New York

;

After Analyzing

The Background For Post-War Stock

Values, Dr. Edwards Points Out That Peace Will Usher
In New Conditions

opposite
usually make

Authority;

traveled

have

We

has been chal¬

lenged by the Board of Directors of the Tennessee Valley
by the South- &

-

Requiring A Cautious, Investment

when it

Fur-

those who

different 1
from

form?

y

of

State s,>

the
Secretary
of
"the
Interior,

per¬

real

a-

Babson

W.

Roger

service and

and

entitled to

are

good profit

••

w

i

by!

p

. -

who,

drive

left-.

•

N

g

about

e w

and;
few;

a

members

Filling Stations

■

n

Dealers;
•

Those'

i

.of;

Congress from,

the1

country today must be

impressed;

(Continued

;

on

r

in This Issue!
Special

material

with

interest

and

reference

items

to dealer

activities in the State of Ohio
page

786.
of

Index
page

was

!

Regular

I

-

(1937) by the

prepared under the di¬
the
then r Principal

Features

808.

on

...

'!

printed

Although

\

as an

the

United

has

been

it is

of

still

many

ing

•

this

report;

official document of
Government,

States

erroneous

|

i

the

of

o n

i b 1 e,

and

these values

and misleads

(Continued on page 796)

Taxes and

s

"proof"

were

the effect that

arguments to

used

in

computing
"net

Harry L. Severson

a

sound

capital."

on

Request

Atlantic

the

Coast.

entirely
earning

One

INC.

was

bullish, but would

to be in an unsatisfactory
condition if examined on one of

appear

the

days

when

the

market

was

depressed.
(Continued

This

NEW YORK STOCKS,

the market

Buy War Bonds

Bond

for
Copy

not

was

;

f

on

page

! State

and

794)

Municipal

Reconversion
:

valuation

of

;

pos-

thoroughly discredited,
often quoted as

—~r~7—~~—

-

Transportation Economist, J. Ha-*
den. Alldredge, now a. member of
the
Interstate
Commerce Com-i
mission.

ip? If

unsatisfactory when the
cannot follow
assets consisted mostly
theory
of
the
progress
of notes,- for which
there were
Dr. Wm. Edwards
going concern
of the United
no
quotations, and a few mar¬
value in bank
Nations without believing that we
ketable
bonds,
but
as
banks
examination.
have come victoriously to the fi¬
larger bond portfolios
When banks acquired
nal act of this tragic Drama of
the accidents of the securities mar¬
were
exam¬
War... !'. H!
'
kets became an increasingly im¬
ined on a liq¬
portant determinant of "net sound
uidating basis,
*An address delivered by Dr.
By the middle thirties
so-called mar¬ capital."
Edwards'before the New York So¬
numerous banks, even some which
ket
values
ciety of Security Analysts, New
held
only primebonds, would
were assigned
York City, Aug. 17, 1944.
show adequate capital
ratios if
to as many
(Continued on page 792)
examined on one of the days when
assets as
s

of

rection

for the<£-——
method

further exten-

in!

;

case

a

.

'

'

on

-

Rate;,

Freight

United States"

the

of

-

i t or i a 1

Problem

.

TVA
7

Garis

L.

Roy
;

.

5

ago

-

"The Interter-

795)

page

three

than

Principal Economist, Division of Research and

The survey of

the number of vacant filling

by

lieve that less

years

By IIARRY L. SEVERSON

'

South.

-the

It

is hard to be¬

there was se¬
Statistics,
rious
concern
','r "
* Federal Deposit Insurance Corporation
about
the
>"
-There is no more basic question in bank examination than that
prospect of
of the theory of .valuation underlying the appraisal of bank assets.
the
Japanese
Until comparatively recently banks were examined on a liquidating
invading
the
basis, but.in the past few years there has been a growing tendency Pacific
Coast
to follow the generally accepted practice in industry and view bajiks
and the Ger¬
as going institutions. . Thee purpose of this article is to present briefly
mans invading
'

few

a

other

for their

indepen¬
dence and courage.
Let me this
&eek give three illustrations.
a

~

of
be

destroyed.*

In Bank Examination

United

the

life

"GoingConcern Value"

the

Vice President

the

''crowd"

by

ence;-

act

our

way

could

very

Confer¬

ors

thermore,

that

<sand

Govern¬

ern

late 1941 and early 1942
enemies might win the war

long way since

a

feared by many that the

was

,

money.

Copy

Rapid Indus¬ Approach.

The existing freight rate structure in the South

•

who

a

—

the

while

those

Cents

He, However, Predicts That The Deflation¬
trial Growth As Evidence That Section Does Not Suffer ary Forces Of Reconversion Will Be Temporary And
From Discrimination
Advocates That Rate Adjust¬ Without Severe Stock Price Declines, While There Are
Substantial Prospects For Longer Term Appreciation. !
ments Be Left With ICC '
j

who

crowd"

Territory—Holds That

Southern Carriers Have Adjusted

South And He Points'To SouthV Recent

Cert ain ly,

■^"follow

60

OnUook For The Stock Market

j!*!"/'! """ Z,

To Meet The Industrial And Commercial Needs Of The

e.m s.

those

.!•

^

University1"

Than In Official Or Northeastern

forecasting-of real

com-v'--jV

'invest "men t
p r o b

!

By ROY JL. GARIS

Vanderbilt:

Freight Rates In
Territory Are Only 5% Instead Of 38% Higher

Southern

,

estate,
,,modify,

Price

Y., Thursdays August 24, 1944

Southern Economist Contends That ^

I

—

Office

Pat.

freight Rate Controversy Peace And The Longer Term

^

f

'

S.

7

Brokerage

Bonds

Service

VICTORY

for Banks, Brokers

Hirsch, Lilienthal & Co.
Members New York Stock Exchange
,

/ t

and other Exchanges

Established 1927
London

-

Geneva

Rep.

25 Broad St., New York
IIAnover 2-0600

Chicago

Cleveland

Prospectus on Request

SECURITIES

INVESTMENT

4, N. Y.

Teletype NY 1-210'

Bond Department

and Dealers

R. H. Johnson & Co.
64 Wall Street,

HUGH

New York 5

LONG

W.

and COMPANY

INCORPORATED

THE CHASE

Hardy & Co.
Members New York Stock Exchange
Members

New

York Curb Exchange

NATIONAL BANK

PHILADELPHIA

BOSTON

Troy
Albany
Buffalo
Pittsburgh
Williamsport

Syracuse
Dallas

48

634 SO. SPRING ST.

WALL STREET

LOS ANGELES 14

NEW YORK 5

30 Broad St.
Tel.

.

DIgby 4-7800

New York 4

OF

THE

CITY OF NEW YORK

Tele. NY 1-733

"T|
Actual

Trading

Markets,

always

ELECTRONICS

BROKERS

Manufacturing Co.

Public Service Co.
PREFERREDS

INDUSTRIALS
Bought

—

Sold

—

Kohbe, Gearhart & Co.
INCORPORATED

EXCHANGE

Members N.
14 Wallst., New

York 5.N.Y.

TELEPHONE-RECTOR 2-6300




Y.

Security Dealers Ass'n

Members New York Stock Exchange

Tel.

REctor

New York 5

Street

2-3600

Teletype N. Y. 1-576

Philadelphia Telephone:

Enterprise 6015

Plain

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

—Bell

Members

New

York

Security

Dealers

52 WILLIAM ST., N. Y. 5

Bell

Teletype NY

Assn.

HAnover 2-0980

Teletype

NY

1-635

and Prior

New

York

ira haupt & co.
Members

of Principal Exchanges

1-395

111 Broadway,

REctor 2-7400

■'

and 7%

HART SMITH & CO,

REYNOLDS & CO.
120

45 Nassau,

6%

Quoted

Report on request

BULL, HOLDEN & C°

England

Common

RAILS

MEMBERS NEW YORK STOCK

New

Philip Carey

BOND

Montreal

Toronto

REctor 2-3100

N. Y. 6

Teletype NY 1-1920

We Maintain Active Markets in

U. S. FUNDS for

.

Established 1920

115

HA 2-2772

PL, N.Y. 5

BArclay 7-0100

„

frfc jjQNNELL fc fp.

•

Members

X

The Full

"

Carborundum, Com.

Vice-Chairman

New Orleans,

NY 1-1557

La.-Birmingham, Ala.

Direct wires to

4's,

Stock

•

The Provision

•

'

has

the Dollar; Savings Bank,

The Full Employ¬

branch offices

our

Stock Exchange
N. Y. 5

N. Y.

m

1-1227

topsyturvy, the article '/Post

Employment" by Elisha M. Friedman in

War

'

world where everything seems

a

is that

ments

they are too intel¬

afraid

it

Power Securities

fully." Unfor¬
tunately, the

6V2», '55
7s,
'52
7s, ; '57

ture,"

Vanderhoef & Robinson
New

York Curb Exchange

New York 5

31 Nassau Street

Telephone COrtlandt
Bell- 8ystem Teletype

7-4070

V

i

.

NY 1-1548

n,"

r e a s o

does not

seem

have

to

grip

Trustees.

the

of

m

the-*

we"

modern world. * b 7

sole
jection to

■

a

viting him to reflect upon his an¬
swer
to the question:
"Suppose

any

on

minds

Hare, who recently retired.

give

' t

phflfp Cortn#y

My

Friedman's argu-

Mr.
Boyle's election took place at the
most recent meeting of the Bank's

Realty Associates 5s, '43
*Dealt in. on New

,

WALL

Georgia & Alabama Ry.
1945

5s,

Struthers Wells

H. C. BRUNS & CO.
20 Pine

Street, New York 5

Telephone: WHitehall

3-1223

jr-

A L A.

Teletype NY

United States Senate on Nov. 5, 1943.
of
Americans^

and

international

consulting to¬

Engineering

Macfadden
All

N. England

United

the chairman¬

ship of Judge
a n 1 e y
O

Publications

M

Issues

Common

&

a

period of four

Dye Works

months.

Preferred

U. S. Finishing,

.

Hudson, for

Pub. Serv. Pfds.

Piece

under

gether

Jardine Mining Co.

cause

ference

Compcmu

Y. Security

37 Wall

St., N. Y. 5
Teletypes—NY

Dealers Assn.

Hanover 2-4850
1-1128 & 1127

and

Leach,

N.

Dr.

M.

post-war

All

Issues

cessors

in

INTERNA-

GENERAL

THE

-

TIONAL ORGANIZATION

The Cress

the

Oct. 30,

Moscow

Declaration

of

1943, the Governments of

the United States of

Kingdom,,

formerly

cated
.

reconversion

headquarters at the firm's
Montgomery, Ala., office in the
First National Bank Building.

Of Investors

E. Crabb, Chairman

of- Directors

25 Broad St., New York

WHitehall 4-3990




request

were

Board

Directors

of

Tele. NY

1-210

the

to

elected

Ill

N.

Y.

Security Dealers Ass'n

Teletype
Private

Wires

New York

Detroit

-

art f, Lumber
Lowe

-

VV-:'.
'

ST., NEW YORK

SUGAR SECURITIES
:y;v/'T':v.7

a

Company

President

is

of

Louis*

■

Quotations Upon Request

if

TEL. HANOVER 2-9612

m

Syn¬

Teletype N. Y. 1-2123 V ^

and Mr.
Justus F.

Henry Holt & Co.
due

Cuba Co.

1969

Luscombe Airplane

Buffalo, Niagara & Eastern
,

Piper Aircraft

Boston & Maine Railroad sm
A, B, C, & D Preferreds

Members
Union

INCORPORATED

Cleveland

Commerce

;

Stock

Bldg.,

»

Tennessee Products x;

Triumph Explosives

~

Exchange

Cleveland

14

MORRIS STEIN & CO.
Established

■*'

^

Remington Arms

V. fj f"

Telephone MAin 8500
29

Cleveland

St.

■■■

Lowe Company, Investments.

1924

■t.J't

Broadway, New York 6
:

Pittsburgh

'

CO.

Stock Exchange

Coffee & Sugar Exchange

120 WALL

art is President of the G. M. Stew¬

HA 2-2400

-

NY 1-1026

Members
York

New

dicate
subsidiary, at the com¬
pany's annual meeting. Mr. Stew¬

f|Y 1-376-377

fo. Buffalo

J:

FARR &

Diamond Alkali Co.

Trinity Place, N. Y. 6

request

Broadway, New York 6, N. Y.

BArclay 7-0570

Investors

of

Syndicate of America, Inc.,

>

74

on

F. H. Holler & Co., inc.

WM. J. MERICKA 6- Co.
Members

HAnover 2-0600

that

,

St., New York 4, N. Y.

Memoranda

Rights

Troster,Currie & Summers

Simons, Linburn & Co.
25 Broad

of the Board
Syndi¬

Investors

neapolis,-

problems

Members New York Stock Exchange

4, N. Y,

of

Building, has an¬
George M. Stewart
and Justus F. Lowe, both of Min¬

-

possibilities.

report on

Syndicate

$1.60 Preferred

Preferred &

Industries'^

Indiana Limestone 6s, 1952

Stewart, Lowe On Bd.

Corporation

outlook of¬

Clay Products

Great American

Com¬

&

Sterne

their

clothing)

its post-war

Detailed

INC.

Ward,

5%

Carrier

industry without compli¬

fers tremendous

George R. Cooley &. Co.

suc¬

to the investment business

nounced

America,: the
the
Soviet
of the United
States,
Great Union, and China recognized-"the
Britain,
Rus¬ necessity of establishing at the
earliest practicable date a general
sia and China
Butler
international organization, based
regarding a
(Continued on page 788)
international program,

(Men'8

.•.

Preferred

the

in
as

Company

Laclede Christy

cate,'Roanoke

Introductory Note
In

FASHION PARK, Inc.
An

"A"

with offices
Building,

Ward, Sterne, Agee & Leach,

of

y;:

North American Cement

Sterne, Agee

National

First

i

Fonda, Johns. & Glovers.

of

% MINNEAPOLIS, MINN. —Earl
A DESIGN FOR A CHARTER OF

.United-.

-and
N.

the

prominence
expert knowledge 1 of those
who participated in drawing up
the
plan,
the
"Chronicle'', x is
pleased to reprint the; introduc¬
tory note and the text of thie
plan in full:
v
' .uS J''*

the
con-

Washington

Members

of

because

Be¬

of

current

Com. & Pfd.

—-*

—

and

organization,
Aetna Standard

the firm

of

pany.

The plan is the work of a group

experienced

1-1843

2-9470

>.

An¬

—

published by
Partners of the new company
the Carnegie Endowment for International Peace, of whichx Dr.
are
M. H. Sterne, Rucker Agee,
Nicholas Murray Butler, is Director, contains "A Design for a Charter
Mortimer A. Cohen, Edmund C.
of the General International Organization," as envisaged in the Mos¬
Leach, and Alonzo H. Lee.
Mr,
cow Declaration of Oct. 30, 1940 and in the Resolution adopted by the
Cohen and Mr. Leach will make
August issue of "International Conciliation,"

in the field of

Bell

5

YORK

HAnover

Sterne, Agee & Leach
BIRMINGHAM,

Suggested Flan For A General
International Organization
The

Preferred

&

Common

NEW

ST;

Teletype NY 1-1140

tion

Preferred

&

V.

York Curb Exchange

New

Members
64

(Continued on page 791)

■

Douglas Shoe

Common

'

Frank C. Nasterson & Co.

nouncement is made of the forma¬

W. L.

York Curb Exchange

■

unemplpyed, what Will be the ;at-:
'

Mr.

15 million

10 to

again have

; v

I':?

just announced the election of
George F. Boyle as Treasurer of
the Bank to succeed Joseph B.

test to the "full employ¬
ment"
theory.
Should
anyone
doubt this proposition, I am in¬

with the "law
of

Reiter-Foster Oil

Boyle

F.

X *.

& Preferreds

Common

George

Debentures

& 5'/2%

*5%

drifting into experimentation and
that willy-nilly we shall have to

\ *

cen¬

(Va.)
.Xv

Central States Elec.

Taking .the world as. itTs, I.cannot
help
feeling that we
are
,

writers

tury

Members

which

17th

am
more

its extraor¬

nomic liberalism and

by many 16th
and

much^

-

dinary (and I thing irreplaceable)
merits and virtues.

na¬

identified

was

Curb Exchange

N. Y.

on

of

"law

take

bickering and suffering before the
people will realize'and recognize
the functioning premises ef-eco¬

the ad¬
"fright¬

using
verb

will

I

sensible.

and- too

deliberately

International

NY 1-1919

<♦>-

ligent

I

WHitehall 4?8120

Bell System Teletype

the "Chronicle" 'of

am

sensible,

Traded

§

Members New York Stock Exchange

65 Broadway

.

August 10 is
frightfully

$

,./

Bay way T^rminah

Edward A. Purcell & Co.
X-

:
In

.

v

:

Service^;

6* .Plain

Members New York Curb Exchange

Be

WOrth 2-4230

Bell Teletype

Southwest Gas Producing
'-'-V

120 Broadway,

f..

;JSout^
^ •
Am.^ Cable & Radio :Wis.
N.E. Public

Squarely—He Is Convinced That * We
A Test And Therefore Advocates
Of Safeguards For The Private Enterprise

System, Democratic Processes, And Our Liberties—He
Indicates What The Nature Of Those Safeguards Should

MitcMUCompiuj
Members Baltimore

/

h Robert M. Catharine, President

Cannot Avoid Giving It

Indust.
&

'56

Doctrine

ment

Mayflower Hotel, Com.
LaFrance

Savings
Elects; Boyle

Treasurer, Coty, Inc.

of the Board and

Writer Holds That We Should Face

Coal, Com. & Pfd.

Elk Horn

Bell

Exchange

St, New York 4, N. Y.

Dollar

Employment Issue

of

A & B

Delaware Rayon,

-

Quoted

Members New York Stock

25 Broad

HAnover 2-0700

120 BROADWAY, NEW YORK
Tel. REctor 2-7815 -

'•

By PHILIP CORTNEY

,

,

Tool, Units

Cons. Mach.

•

—

TELETYPE WY 1-423

BELL

'

Sold

<

New York Curb Exchange

M

.

...

—

request

Steiner, Rouse & Co.

,,

York Stock' Exchange

New

V

;

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

BROADWAY

Telephone

-

and Other Principal Exchanges

Members N. Y. Stock Exchange

8ecurltr Dealers Ass'n

York

New

40 Exchange

r

Goodbody & Co.

.

Bought

;

& Co. Inc.-

on

Bought & Sold

STEEP ROCK IRON MINES Ltd.

KING & KING
Members

WARRANTS

BULOLO GOLD DREDGING

"B"

United Drill "A" &

Analysis

Cable & Radio

NORANDA MINES

Appl.

Bendix Home

P. R. Mallory

American

Lanova Corp.

Alabama Mills

Thursday, August '24, 1944

FINANCIAL CHRONICLE,

THE COMMERCIAL &

778

WHitehall 4-3640

Direct Private

Wire to Cleveland

50

Broad Street, New York 4,

N. Y.

Telephone HAnover 2-4341

J

Volume
-

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

160

779

•>.

The

Punta Alegre Sugar
Warner

COMMERCIAL and

FINANCIAL
Reg.

Patent Office

We

B. S.

AND COMPANY

Public Utility

.<

BEekman 3-3341

WALL STREET

SCAVENGERS

PREFERRED STOCKS

'

Seibert,

and Industrial
That's

Editor and Publisher

Cespedes Sugar/
Sugar Est.

Thursday, August 24, 1944 >

V

Published twice

Cuba Railroad

week

a

Thursday

every

32

New

York

Broadway

Security

Dealers

and every

Ass'n

CHICAGO 4

NEW YORK 4
4

f'

DIgby '4-8640
Teletype NY 1-832. 834

129

'
>j

Other

Offices:

La

Salle

.Our Heal /Estate

by

Reentered

as

William

B.

Dana

Call

The aim is to enable business and industry to accomplish

quarters.

Company

the

of

objectives

X '

;

Other Publications

'

;

The

Members

40WaH

I

York

flew

St.t N.Y. 5

Stock

the.

"The Meaning Of Bretton Woods"

of

Federal

all

the

views

L.

H.

Appliances

Prominent among the

tax

so-called

and

that

i

nounced

n g

encourag

venture

we

make

can

attractive."

JP S. Delegates, Discuss Informally The Work Of The
Conference In The "American Forum Of The Air,"

venture

(

WASHINGTON, D. C., Aug. 23.—As the war approaches its .end

Revenue

Taxation,

the

of

National

Punta Alegre Sugar

in

Plan

Cities

Bought

Plan¬

~

Twin Cities Plan

Cities

Twin

The

Plan,

>

not

long ago announced a resolution
,

ning,

stabilization

monetary

f"V

Abolish The NASD

—

and
other
credit
becoming of direct
interest not only to banking
and foreign-trade circles, but

W:

\4'

"The Chronicle" here

extensive'

portions

publishes
of the

"The meaning of

subject,

prepared for "The Chron¬
icle"
by Herbert M. Bratter
from
unrevised
stenographic
on

tel

in

WOR

network.

Under

Morgenthau

Sec.

and

and

the

of

gton the two Bretton Woods plans for an "International Monetary
ere

and

a

"World

Bank

for

Reconstruction

and

ich public

discussion of the conirerice by members of the Gov¬
ernment since the conference ad>urned late in July.
Secretary Morgenthau and Dr.
[arry D. White, his assistant, re¬

Development"

amed only

a few days ago from
"Visit to London and the battle¬

Our excerpts begin with part of
ir.
Granik's
introductory
re-

lese

[rams,

ory

lay

the

debate

plans

on

for

groundwork
on

Bank

merits

the

subsequent

of

of

tions

terest

the

you, as

conference,

tell

President of
generally

us

Secretary

necessary

Monetary

Conference
N.

at

and

*

We

Financial

Bretton

have

had

time

..."

its

*

freely, the
ulated, and in many instances,
over-regulated. There have been
claims that it has exercised, and

unconstitutionally

lre

not all of

delegates were able to join us.
are,

however, honored by the

[resence* of

Henry

Jampshire,: ranking

Republican

lember of the Senate Committee

Banking and Currency; Dean




Haloid Corp.
Laclede-Christy Clay Pr.
Miller Mfg. Co.
Segal Lock & Hdw. Pfd.

all

With

this,

there

is

one

Est. 1926

Like

Bell

lay down a philosophy on spreads,
The information classified by it
made the Board feel it was

"pre¬

SECURITIES

DUNNE & CO.
Members New York Security Dealers Assn

Broad

25

pared."
However, it was also

COrtlandt 7-6190
System Teletype NY 1-84

SUGAR

Topsy,

now

parently sent out for the purpose:
of laying a foundation for the
"5% spread."
When these were
returned, the Board in its ques-i
tionable "wisdom" was ready to

JTi

170 Broadway

SEC has never done
thus far, i. e„ use its rule-mak¬
ing power for the purpose of
entrapment, to compel the an¬
swering of questionnaires.

habit

n

WWb&lOA

St., New York U, N. Y.

Tel. WHitehall 3-0272

"prepared"

publish the results of such
(Continued on page 784)

not to

exercising,

to

Dividends paid 1944 to

date

-

Warrants

$2.25

Public National Bank

$4.50

1942-

—

American Cable & Radio

3.65

Dividends 1943

& Trust Co.*
*

Circular

ity in the post-war world. That is
we are going to talk about
in this forum discussion here this

on

request

Second quarter analysis
available

on

request

what

Morgenthau evening.

Secretary • of the Treasury;
lenator Charles W. Tobey of New

«

1-2480

Gisholt Machine Co.

thing the

panama coca-cola

study the accomplishments of that

roods., r Unfortunately,

-

rule
making
SEC has reg¬

have asked the Amer;an .delegates
to
explain this meeting and to weigh their mean¬
rening /the meaning of Bretton ing for our security and prosper¬
le

NY

"A

Woods,
H., came to its successful con¬

clusion.

Teletype.

Bartgis Bros.

legislative powers which the Con¬
gress was powerless, and never
intended, to grant.

month has passed since the United

pro-

we

or

in

power

is,

,

Morgenthau:

or

pre¬

regula¬

the public in¬
for the protection of

Exercising

serve

genthau, will

deems

it

investors.

Council

System, and Dr. Harry D.
White, Assistant to the Secretary
of the Treasury.
Secretary Mor¬

as

shall

and

rules

such

appropriate

Chi¬

President.of the Advis¬
of the Federal Re¬

cago and

Nations

harks :
mum

National

about Bretton Woods?"

fields of Normandy.

"To

First

Commission

"The
scribe

Acheson, Assistant Secretary of
State; E. E. Brown, President of
the

REctor 2-5288
System

Federal Screw Works

of effects trading has

the questionnaire
sponsored by the NASD
jected in the balance of the act. Board of Governors "just growed."
Section (a) provides:
The first questionnaires were ap¬

described at the round tabled

[y five members of the American
|elegation.
This was the first

prices—"

of the statute is a
and
comprehensive at¬

part

tempt to justify the regulation to
which the securities field is sub¬

Harry D. White

Mr. Theodore Granik of Wash-

und"

unreasonable

and

sudden

studied

-

chairmanship

-

This

the

over

prolonged

fluctuations of security

Shoreham Ho¬

Washington

precipitated, intensified,
by manipulation

fare "are

Tuesday's1 (Aug. 22)

broadcast from

claiming
ad¬

emergencies,

versely affecting the general wel¬

were

notes

V

economy,^

extent' of

v national

that

The excerpts

Bretton Woods."

the

to

even

the

•

Security Dealer $ Attn.

Broadway, New York, N. Y.
Bell

"5% spread policy" has

It enumerates the alpha and omega

Title."

and may have upon our

American Forum of the Air on

Members

York

^

Questionnaire

controversy centering around the

The

>

industry, labor and agricul¬
ture.
Because of this interest,

/

Ill

brought to light no more irksome imposition on NASD members than
the use of questionnaires as a lure.
In the opening part of the "Securities Exchange Act of 1934,"
Section 2 deals with "Necessity For Regulation as Provided In This

to

\

9

,,;,I
flew

c

proposals
plans are

Sold

TRADING MARKETS

Europe post-war plans are being more seriously examined here.
In the financial field of plan' t
m

—

J.F.Reilly&Co.

made

public on July 10 after 14 months'
study, is the product of a large
group of industrialists, financiers,
tax
lawyers and other business
(Continued on page 801)

of the Joint Committee on

Internal

Twin

~

more

Robert L.

Chairman

advocated

those

are

ning Association.

cap¬

Doughton of the House Ways and
Means Committee, who is Chair¬
man 3

Liberty Aircraft
National Airlines

privately

the

of

ital and for adjusting our tax laws
so''

Crowell Collier

prepared tax programs so far an-i

Bradshaw

y

*

Jtate, Senator Charles W. Tobey, And E. E. Brown,
Resident Of Hie First National Bank OfChicago, All

•

Bendix Home

have

"in

Treasury Dept., Dean Acheson, Assistant Secretary Of

Teletype NY 1-1203

bill.

the

favor

Security Dealers Assn. ■'

with

conferred

structure,
saying he was

Secretary Morgenthau And Dr. Harry D. White Of The

n

When

data.

vision

-J' c

have

to

1

Broadway

HAnover 2-8970

Henry
Mor¬
been collected and the. statistical
genthau,
Jr.,
studies completed,
the| Congres¬
recently came
sional Joint Committee will be
out flatly for
convened to draft a post-war tax
post-war
re¬

must be made in New York funds.

Information

New York 6, N. Y.

of

of various, tax programs
and to have compiled considerable

o

QUOTED

-

Statistical

39

sponsors

f
Treasury

Secretary

study

stood

reduction.

tax

,

i

cial

a

SOLD

-

Members flew York

post-war taxation.
friendly -atti¬ During the recent Congressional
tude
towards recess these experts are under¬

Record—Mth. $20 yr.

broadcast Over Facilities Of WOR.

ac¬

has-

gress'

exchange, remittances.for
foreign subscriptions and advertisements

||

Bell Teletype NY 1-2033

s

L J. G0L0WATER & GO

directing tax experts of Congress,
the
Treasury and the Internal
Revenue Bureau to begin a spe¬

Con¬

counts

in the rate of

4-633011

all

From

NOTE—On account Of the fluctuations

II

"Exchange

WHitehall

Complete

economic
stimulation

Attitude

of Congress

Monthly Earnings Record—Mth..".$20 yr.

Newburger, Loeb & Co.
1

-

STREET, NEW YORK

including national

planning,

post-war

well-being, high production and employment levels, and
of the flow of venture capital into private industry.
>

America,
Spain, -Mexico - and
$29.50 per year; Great 'Britain,
Continental Europe (exoept Spain),^Asia,
Australia and Africa, $31.00 per year.:, y
'

WALL

Telephone: WHitehall 4-6551

subject of deep study in many

currently the

is

,

Bank and Quotation

99

Exchange

BOUGHT
revision

Tax

Cuba,

for quotes

us

Teletype NY l-§

Obsolete Securities
Dept.

CERTIFICATES

Central

CERTIFICATES

•

Our Own View

Subscriptions In United States and
Possessions, $26.00 per year; in Dominion
of Canada, $27.50 per year; South ana

TITLE COMPANY

and

cats

Twin Cities Plan—National Planning Association Plan—

second-class matter Feb¬

.

,

But

vegetables

"dead"

to

comes

more

us!

our

TITLE COMPANY

St.,

25, 1942, at the post office at New
York, N. Y., under the Act of March
3, 1879.
v

Department

it

do know

we

our

call

Post-War Tax Planning

ruary

Specializes in

when

of

some

friends

»

(Telephone: State 0613);
1 Drapers' Gardens, London, E. C., Eng¬
land, c/o Edwards •& Smith.
1944

; *

Members New York Stock

r

Chicago 3, 111.

Copyright

Securities

S.

course

dogs.

Telephone HAnover 2-4300

.

^

Monday

135

of

25 Broad Street, New York

tation

i

Harrison 2076

Teletype CO

sp1

: v

(complete statistical issue—market quo*
records,
corporation,
banking,
clearings, state and city news, etc.)

Board of Trade Bldg.

-

Trask & Co.

encer

?

■

(general news and advertising issue)

STRAUSS BROS.
Members

what

aristocratic
William Dana Seibert, President
William D. Riggs, Business Manager

Antilla

•

r

Spruce Street, New York 8

Herbert D.

of

High Grade

•,

Publishers
25

interested in offerings

are

■

;

William B. Dana Company

Sugar

Vicana Sugar

,

CHRONICLE

U. S.

.

"To

tant

my

facts

Woods
tant

HoixRqseSTrqster
Established 1914

mind, the most impor¬
about

the

Bretton

Conference, more impor¬
than
the
agreement

even

(Continued on page 802)

74
Telephone;

Trinity Place, New York 6, N. Y.
BOwling Green 9-7400

'

4

•

Teletype: NY 1-375

C. E. Unterberg & Co.
Members New York

Security Dealers Assn.

Broadway, New York 6, N. Y.
Telephone BOwling Green 9-3565

61

Teletype NY 1-1666

THE COMMERCIAL &

780

Thursday, August 24, 19

FINANCIAL CHRONICLE
BOSTON, MASS.

Delaware Pr. & Light

American Hardware

A

Cleveland Cliff Ir. $5 Pfd.

Low-Priced Stock in
With

Oxford Paper com.iSK Pfd.

Crowell Collier Com.

CST.1M4

PHILADELPHIA

i

Phillip Carey Mfg.
-

an

Market

Trading

Maintain

We

Industry

in:

Bright Future

H. H. Robertson
Giant Portland Cement

Wm&M

Bought - Sold

a

Company

gm;i (Pa.)

Quoted

"•'-."'Tax free in

Pennsylvania

Stocks 2%-2%
Afemo

Goodbody & Co.
Members N. Y. Stock Exchange

American Hardware

Glass, Com. & Pfd.

Amer. Win.

Appl.

Bendix Home

'

BARCLAY

TELEPHONE

Bird & Son
Boston & Me.,

Circular Available—Send for

CHICAGO
TELETYPE NY

7-0100

lerner & co.

Members New York Stock

..

1-672

:

V

Bell Teletype

Consolidated Textile

have

We

BONDS

Douglas Shoe, Com. & Pfd.*
General Tin Investment

Middle West

Public

& Pfd.
B. Amer. Machine, Pfd.*

Howard Stores, Com.

Utility

—

&

Pacific Coast

For

Railroad

Magazine Repeating Razor
Merchants Distilling*

MARKET

SECONDARY

Municip al

1606 Walnut

COrtlandt

Teletype—-CG 362

Riley Stoker

ST. LOUIS

A.CAIXYN«"COMPANY

Southwest Natural Gas

SAN

Triumph Explosives
Wickwire Spencer

and

_J

Stix & Co.

INDUSTRIALS
Car

Proposed "Reservations" At
Bretton Woods Were Dropped

"B"

Birmingham Gas
Brockway Motor*

-

>,
:: '
Corporation
Industries*

Although the delegates to the Bretton Woods Conference signed
the agreements for the establishment of an International Monetary
Fund and an International Bank without, in any, case, making a
notation as to reservations, this is not an indication that there was
entire unanimity among the nations on 'all matters contained in the

American

Robertson

Co.

Lawyers Mortgage

■«

Candy
Herrington

T

»J

Marmon

Pub.

McFadden

j

Poliak Manufacturing

these

the

United

ence,

Whelan

Cigar

"A"

Drill

"B"

&

& Gay
Consolidated

Lord

Gold

but

Airlines
Chicago & Southern Airlines
Export

A

Airlines

d

Mid-Continent Airlines
National

British

1

te, it
agreed

e

was

Airlines

rican

e

m
e

.

Airlines

Northeast

on

delegate, and
Judge Fred
W. Vinson, an

lIHliil:!
Inland

o

pleas
of
Keynes,

the

American

t

Confer¬

the

Wilcox
Yuba

were

submitted
&

Transportation
Tokheim Oil Tank & Pump
United

and ®—

vations

Talon

Terminal

g a

in

fact

that the work
Gas

Central
Conn.

&

Elec.

Light

&

&

Service

Pfd.

ence

Tel. Com.

Cons.

Elec.

&

Gas Pfd.

Derby

Gas

&

Electric

Lord

Illinois Power Div. Arr. and Com.

Iowa Southern
Mass.

Power

Nassau

Util.

&

Lt.

Suffolk

&

Com.

$2 Pfd.*

Ltg. Pfd.

New Eng. Pub. Serv. 6% &7%
N. Y. Water Service Pfd.

Peoples

Pfd.

& Pwr.
Pr. & Lt.
Queensboro Gas & Elec. Pfd.
Scranton Springbrook Water Pfd.
Lt.

Puget Sound

Southwest

Pub.

Serv.

ELECTRONICS
Emerson

Detrola

Magnavox Corp.*
Majestic Radio & Tel.*
P. R. Mallory

Stromberg

Carlson
Submarine Signal
*

shall be

recorded

Request

Chicago Tractions

AKII&Co.
EST. 1926
Members N. Y. Security Dealers Assn

broadway, new york 5

REctor 2-8700

NY 1-12881

Direct wires to Boston & Phila.
ENTERPRISE 'PHONES
Hartford

6111

—




n

d i

Buffalo 6024

Forum of the
Traders Asso¬
has announced the follow¬
Security

a

whether

Wm.

Perry

delegations,

with all
the

reserve

as a

whole and

on every

Brown,: President,

war Municipal

Fihadcing," by

Joseph A. Matter, Chapman &

.if-xn!

Cutler

fecting the industry
Wallace
Kingsbury,

Vice-

Chairman of Municipal Com¬

mend
the

our

result.

not

even

recom¬

governments to
We

adopt

merely submit it

for what it is worth to the atten-

(Continued on page 798)

Russ

650 So.

Bldg.

San Francisco
F.

Spring St

Los Angeles
LVA.-42

196

Advertising Notes

Your committee is

listing below the various contracts for adv

tising in the special NSTA Supplement of the "Chronicle" to be
lished Aug.

31, next week.

The forms will close

sincerely hope

some

of the affiliates

will

75 contracts

Philadelphia
Chicago

of

tary

Investment

Hon. Stanley

Bankers
I

-

McKie, State Sen¬

pu

Aug. 28, and

on

fit to increase th

see

'

•

Hartford

2 contra

Buffalo

___23
20

2

*

Los Angeles

——_

9

Minneapolis

——5

Detroit

9

San Francisco

8

Newark

Boston

6

Toronto —

New

5

Georgia

1

5

Denver

1

4

Pittsburgh

1

4

Spartanburg

1

4

Milwaukee

3

3

Memphis

3

Louis

Orleans

Florida

Cincinnati

-

Seattle \

Louisville
We

——:

have

211

ads

2
.»r;

2

—

»i

*

2

___

I

I»:2

.

If ■

;

r

'f,:

$11,000. This does not inclu
the booster listings, which may run from $700 to $1,000 addition
Remember, members of your committee will be glad to take yo
ads in

grossing

over

Chicago.
'

Harold

!B.

•

I. M;

<

NSTA Advertising ^Committ,
Collin, Norton & Co., 30 Pine St., New York 5, N. Y.; Alfred
Tryder, Vice-Chairman NSTA Advertising Committee.
Smith,

Chairman

ator of Ohio

Hazen

Municipal

Chairman,
Committee,

Investment

Bankers

Arnold,

The
The

Associa¬

tion of America

Honorable

speaker
and

at the

the

Lyle H. Boren,

evening meeting,

Honorable

New Dealers In

Fred

Busby,

i

Washington

M.
Stevens, Jr., has
opened offices in the Skinner
Building, Seattle, Wash., to en¬
gage in a securities business.
Verna May Tubbs is conducting
George

an

investment

business

fices at the Laube

ham, Wash.

The

from

of¬

Hotel, Belling-

discussion

Announcement
without /change

Analysts To Hea

New

York Society of
curity Analysts,; Inc., will he;

9

And Members and Guests.
The

N. Y.

Wyefh Firm Now Is

'

participate in the discussions,

do

h. r. baker & co.

:V

Dudley Smith, Municipal Secre¬

governments who are at the pres¬
ent stage in no way committed to

We

NSTA

mittee

speaker at the Saturday meeting,
have been asked to attend and

frame.

;

Exchange

Baltimore

Open Discussion:
'
Report of the Municipal Com¬
mittee, The Boren Bill, H. R.
1502, and other matters af¬

part of it. The whole of our pro¬
ceedings is ad referendum to our

anything: We have been gathered
here to put our heads together to
produce the most generally ac¬
ceptable
document
we
could

'

Fellow Members:

——

"Some Practical Phases of Post¬

the

opinion of our Government on the

Louis Stock

of Los Angeles V
'

S.

St.

,

Sec. Traders Assn.

Nat'l

possibility of some

misunderstanding in the minds of
delegates who wish to make
reservations on particular points.
So far as the U. K. Delegation is

current report on

Cleveland

Graham, Chairman
Introduction of Speaker—

J.

wonder

C

>

V".''' "

New York

Thomas

Committee,

Association of America
to

Members St.

Municipal

Municipal

remarked:
venture

'v.

•

t>-

Report—

in the minutes

Keynes, in addressing the Execu¬
tive Plenary Session on July 20,

St.Louis 1,Mo.
V

V- t

positions.

i d ual

v

"Send for our

Security-First National Bank

ing program for its meeting to be
held on Aug. 25, 1944 at 1:30 p.m.
at the Palmer House, in Chicago:

Regarding the procedure, Lord

document

120

i

concerned we, in common

on

sub¬

of the Conference.

other

Circular

Keynes

there is not

Radio

Instrument*

International

was

governments there should be no
special reservations made by the
signatories.
However,
it was
agreed that all such reservations

"I

Du Mont Lab. "A"*

General

ciation

ject to ratifi¬
cation by the

Com.

Power

The

National

of the Confer¬

Wrnts.

&

Power

Utilities

American

; securities

STREET

reser¬

PfQg,.^ F0l" MHMCipal
Forum At NSTA Meeting
;

on

—

view

the

that
of

Amer.

special

agreements.' Several of the delegations wished to make

Alegre Sugar
Remington Arms
San-Nap-Pak
Punta

S09 OUVC

MARKETS

pacific coast

SECURITIES

INVESTMENT

How

-

Axton-Fisher

FRANCISCO

always available
■

Loft

<»

CURRENT INFORMATION

Minneapolis

i;

Milwaukee

Boston

New York

Chicago

H.

S'-S.' f>

7-1202

Incorporated

I

Title Guar. & Trust

H.

Y. C.

'

Scovill Mfg.*

Eastern

£

PH 30'

Private Phone to N.

CHICAGO 3
Randolph 3002

St., Philadelphia

Pennypacker 8200

135 S. La Salle St..

Nu-Enamel

Great

Stock

BOENNING &. CO.

DISTRIBUTION

Moxie

Buda Co.

Paper Co.

Common

and

Liberty Aircraft

Auto

Bag

UNDERWRITERS

Industrial

Pfd.

continuing interest in:

a

Southern Advance

Wholesale Distributors

Electrolux*

Purolator*

PH 265 '"r

CARTER H. CORBREY & CO.

Crowell Collier P. Com.

Interstate Bak. Com. &

—

N. Y. WH 3-725

CHICAGO

Cons. Cement "A"

H. &

Exchange

Philadelphia 2, Pa.

St.,

Phila. RIT 4488

Teletype BS 69

Tel. HUB 1990

Prior & Stpd Pfds

1529 Walnut

SQUARE
BOSTON 9, MASS.
OFFICE

POST

10

Light & Power Com.

Conn.

BUCKLEY BROTHERS

Copies

Members Philadelphia Stock Exchange

105 WEST ADAMS ST.

NEW YORK

;

<

."L'■'/)

request

Ctfs. 19,/4-20M

Div. Arrears

and Other Principal Exchanges

115 BROADWAY

on

is

of

management, the
form of Wyeth &

made

that,

ownership
name

or

rsp£ vthe

Co.

h^s. £een
changed to Maxwell, Marshall &
Co.
Offices of the firm, which
holds membership in the Los An¬
geles Stock Exchange, are main¬
tained at 40
Wall Street, New
York City, and 647 South Spring
Street, Los Angeles,
Partners in the firm

are

Frank

special
ities

of

current

situations

under

Fowler

the

in

events

public

its

meeting sehedul

August

30th, the speak
Littiefield, Vic

at

^/

for today.
On
will

uJ

leadership of

be

P.

H.

President of Canada Dry, who w

Canada

discuss

Dry and the S

Drink Industry.
C.

Bedell

Monro, President
Airlines, and Har

Penn-Central
Breecken

address

will

Maxwell, Wallace A. Marshall,
Thomas H. Heller, Oliver B. Scott,
William

Broad

the

me

ing on Sept. 6.

O.

Wittich.-

S.

Wells

and

Wilbur

R.

All

12:30

meetings

are
held at
Street, New York City,

p.

m.

'

;

*

olume 160

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

781

AMERICAN
;;

We

-

announce

that

%.

and

Common

j

Ransom R. Edwards

Common

I

r i t e r & c o?f 1111%
Members Hew

sxi-40 wall
August 15,1944

v.

'."v

.*.•

v

•

'

T

v

Abitibi Pr. &

,

•!

:

y.aa^

J Established 1914

"•••'•' '

■

Telephone: BOwling Green 9-7400

■" A>

>

Teletype:

-.

Can. Pac. Ry. 4s,

%

'49, 3%, '51

Minn. Sault Ste. -Marie

-

5V^s, '78

Minnesota Ontario Paper 5s, '78

NY 1-375'

CHICAGO

A'l ,.A

1959

Canada Steamship 5s, 1957

74 Trinity Place, New York 6, N. Y.

:

Ppr. 5$, 1953

Algoma Cen. Hud. Bay Ry.

HORRQSE Sltem

t

Tori\ Stoc\ Exchange ■
: v "•
Hew Tor {Curb Exchange (Associate)

street, new york 5, n.

;

;'-v

■

I

^SECURITIESy
'

.•

request

on

IN

CANADIAN

5s,
i

Chicago Stoc\ Exchange "•

' %

•

and' Preferred

*Circular

Members

1

Preferred

*'

MADE

MARKETS

American Bantam Car

is now associated with

;

Piper Aircraft*

•

Montreal Island SVis, 1957

Quebec Power 4s, 1962

Shawinigan Water & Pr. 4s, '61

An Opportunity for Companies
ELLIOT & WOLFE

Seeking South American Business

Members New York Security Dealers Association

v

,

'

Established 1924

take

'

1

" *'

1

'

V-

Executive of well-known

MR. EDWARD JEUTHER JR.
who has been associated with them for many years.

CO.

&

>•

August 24, 1944

A1

Telephone

v

■

■

Bowling Green 9-0424

10 Pine Street, New York 5

J

■

JR.

Bank of Montreal

extensive trip to South
experience in various
Latin-American countries and thorough acquaintance
with language, business methods and customs.
Can
undertake to make investigations, surveys, reports in
the interest of manufacturing, commercial or export
companies contemplating activities in Southern hemi¬
sphere, Invites correspondence leading to discussion
of service.
Box SA 2344, Commercial & Financial
Chronicle, 25 Spruce Street, New York 8, N. Y.

heretofore conducted by them will be continued by

JEUTHER

engineering and construc¬

tion company is about to make
America.- Has many years'

pleasure in announcing that the Foreign Bond Business

EDWARD

Steep Rock Iron Mines 5V2S, '57

Winnipeg Elec. 5s, '56,

-.-;v

Bank of Nova Scotia

Canadian Bank of Commerce
Dominion Bank

Imperial Bank
Provincial Bank of Canada

Royal Bank of Canada

HART SMITH & CO.

hiiadelphia Traders Get Nominees For Office
meeting of the Board of Governors
Association of Philadelphia, held Aug. 16,

PHILADELPHIA, PA.—At
the Investment Traders

JOHN T. CHIPPENDALE,

Both

...

securities

showing

the

intermediate'and

New York

partially

long-term

exempt

still in supply, with the highest premium obligations
largest declines, some of which are now as much as

were

the

.

.

»

5s,
r

i

]

soon

as

•

4s,

5s,

:

attractive

only

6s,

need

that

prin¬

protection,

tax

63

cipally from the
Alfred

W.

Tryder

profits taxes.

excess

esident, Edmund J. Davis, Rambo, Keen, Close & Kerner; for 2nd
ice-President, Alfred W. Tryder, W. H. Newbold's Son & Co.; for
cretary. Frederick S. Fischer, H. N. Nash & Co.; for Treasurer,
>hn M. Hudson, Thayer, Baker & Co.
election

The

will

be

held

Sept. 29

and

Incorporated
New York 5, N. Y.

will

followed

be

by

a

20,000 shares

on.

the basis

lore, Forgan & Go,
Soya Co.'s products
soybean oil, meal and flour;
ffers Central Soya Go.
poultry feeds;
grits and puffs, and
ebeniure Issue
fi phosphatides. Plants lecithin
in Deca¬
Central

con¬

livestock

and

soy

or

are

involving the soybean industry
iched the market Aug. 22 when

^

Forgan & Co. offered a new
$2,250,000 of 3%%*sinking
nd debentures, due in 1959, of
ore,
ue

of

Qentral Soya Co., .Inc.; of Ft.
ayne, Ind., one
of the three
rgest soybean processors in the
untry.
The
debentures were
fered at 100% and accrued ine

tur, Ind.; Gibson City, 111., and
Marion, Ohio. In the last fiscal
year the company processed over

Rate

cessors

of this

Co.

&

be

the

from

Consolidated net

capacity.

amounted

to

$4,608,000

and

$2,-

capitals-necessitated

by

Available On Request
Schenley Distillers Corporation
an attractive book¬

in the series

ly
ck

are

How

outstanding but it

expected that in the near fue

stockholders

hts

to

will

subscribe

for

be offered

the

addi¬




Yield
1.13%.

let

'"-Containing

the

first

the

10-year

Joliet and Chicago

the prevailing policy of the Treas¬

ning in the "Financial Chronicle."

Copies of this booklet may be had
upon

request by writing-to Mark

Merit, in cafe of Schenley Distill¬
ers

Corporation,

New York

1, N.

350 Fifth

Ah

Ave.,

s:

\

)

GUDE, WlNMILL & Co.

compared-with-a yield of 1.34% to the call date and a 1.13% return
on
a
tax-free basis for the partially exempt 2% due 6-15-55/53
at present prices of 105 16/32. .
V

1 Wall

.

It

was

figured

to

maturity

rather

than to

the call

able than the return obtainable from the

gations at currently prevailing prices.
While

there

is

a

difference

in

favor

of the

taxable

General Tin Investment

months in maturity

substantial differ¬

Another

Partially

-

tax

2%

214%

exempt

Call DHe

Yield

100 16-32

1.93%

1.16%

107 3-32

6-15-1956-54

tnaturity would be 1.96%

Tax Free

Yield to

Rpronf, Price

Maturitv
6-15-1954-52

Rate

Issue—

1.46%

-•

-

1.23%

the yield
tax-free yield of 1.18% or just

Frederic H. Hatch & Co.

issue as a 1954 maturity,

with

a

Co.

Universal Match

comparison that has

recently been made is as follows:

Taxable

Tokheim Oil Tank & Pump

4% points

the two bonds, with more than

security,

American Maize Products Co.

...

partially exempt issue, there is a

in favor of the

ential in premium between

favor¬

partially exempt obli¬

of only, three

Teletype NY 1-958

date, it would be

tax-free basis it is 1.14%, somewhat more

on a

St., New York 5, N. Y.

DIgby 4-7060

bond was

pointed out that if the yield on the taxable

1.91%, while

Members New York Stock Exchange

63 Wall

partially exempt issue, with a
premium account of 6% points in favor of the

Incorporated
New York 5, N. Y.

Street

Bell Teletype NY

1-897

slightly under that available in the
difference

in

the

Mallory Interesting

..

taxable 2% bond

-

•

articles

they have been run¬

Corp.

7% Preferred

,

pitalization' will consist of this
4ie {of
debentures and 220,000

par)" common stock,
200,000 shares of -common

upon

Brill

1.13%

1.34%

within

be

to

•

•

the partially exempt obligations will be retired at the call date,

Considering the taxable 2%

have breoared

(no

105 16-32

considered

,

Erill

6s,'- 1969

' Tax Free

Call Date
1.89%'

Recent Price
100 23-32

are

A ;A.

.

to

panded operations. On complen%of current financing plans,

ares

issues

: A
Yield to

-

-

An ex¬

...

1953, in this instance.
.
.
The taxable 2% due 9-15-53/51 at 100 23/32
give a.yield.to the call date of 1.89% and a tax-free yield of 1.13%,

881,000, respectively.

$1,400,000 first mort&e and leasehold 4% bonds, due
1952, and provide additional

•

,

6-15-1955-53

2%

these

:

accounting for about 80%

mpany's

rking

ury

with the ten largest pro¬

income taxes during these periods

financing
used to retire-all of the

Proceeds
11

'

,

of

•

.,

Maturity

maturity range, since based

ing capacity of about 110,000,000
bushels

exempt',

tax

Both

10,715,000 bushels. The
has an annual process¬

restl; Associated —with; Qlore, sales for the 1943 fiscal year were
rgan & Co. are The First Bos- $44,950,000,
and A $38,010.000
for
n
Corp., A. G. Becker & Co.,; the nine months ended June 30,
c., Bacon, Whipple & Co.,. Keb1944, while consolidated net profit
n, McCormick & Co. and Reybefore .depreciation,, interest „and

ids1

:%

■

9-15-1953-51

2%

——

Partially

13,500,000 bushels of soybeans and

industry

issues.

ample of this is indicated by the following:

for the nine months ended June 30
processed

A C F
■

share for each ten held.

sist of

pieces of financ-

.

the taxable

and buyers of

obligations

exempt

Issue—

One of the first

.

partially tax-exempt securities shows-why institutions that do
need further tax protection have been sellers of the partially

not

Taxable

one

.

I

|
|

Teletype NY 1-897

comparison recently made between some of the taxable and

A

the

-

tional

<

r

TAXABLES

vs.

for all Association members,

of

t'

1953

;
'■:■}"•

John M. Hudson

PARTIALLY EXEMPTS

nner

'

'

Wall Street
Bell

.ussell M. Dotts

1968

Frederic H. Hatch & Co.

institutions

to

*

1951.,/..;

Tyler Building (N. Y.)

of the

]•••;; At presently prevailing levels, the partially exempt obligations
are

1948

Eastern Minnesota Power

Peoples Gas Co. (N. J.)

be changed.

,

<

with the excess profits

reductions will .be made in taxes,

some

;taxes the. first to

'

1946

6s,

.

East Coast Public Service

phase of the conflict is completed,

one

1975

.

.

the partially exempt bonds,, there is considerable support
as

Toronto

Community Water Service

:

5»/2s,
,

.
/ It was pointed out, that while it is not possible at this time
to forecast future ta,x trends, and the effect they might have on

opinion that

2-0980

1-395

Montreal

.

hanging the market for the partially exempt issues.

j

HAnover

NY

American Water Wks. & Elec.

% of a point under their highs for the year.
The improved war
situation, together with the existing doubt about future tax trends,
are reported to be the reasons for the uncertainties that
are over¬

j

Teletype

JR.

The continued liquidation of the partially tax-exempt obliga¬
tions, and the purchasing of the taxable 2% bonds, have been the
principal features of the Government bond market in the past
week.-.

St., N. Y. 5

Bell

"Out Reporter On Governments"

i

following names were placed in nomination for the 1944-45 term:
For President, Russell M. Dotts, Bioren & Co.; for 1st Vice-

e

WILLIAM

52

a

P. R. Mallory

OUTSIDE BANK
It

was

SELLING

reported that some of the banks in the

of New York;

eliminated a

ings in the partially exempt
used

the

districts outside

positions of the taxable
substantial part of their hold¬

after comparing the relative

and tax-free bonds, have

have

an

obligations at present high prices and

grater of these funds to purchase the 2% taxable
j;:<

(Continued on page 808)

to

& Co., Inc., offers

interesting situation, according
an

analysis prepared by Steiner,

Rouse

&

Co., 25 Broad St., New

City,, members of the New
York Stock Exchange.
Copies of
York

this

analysis

Steiner,
quest.

may

Rouse

&

be

had from

Co.

upon re¬

Thursday, August 24, 194

FINANCIAL CHRONICLE

THE COMMERCIAL &

782

Announce Formation

Edward Jeulher Jr. Go

PUBLIC UTILITY

UTILITY PREFERREDS

Wolfe

&

Elliot

the

Preferreds

Commons and

tofore

continued by
who

tha

announce

business here
conducted by them will b
bond

foreign

has

Edward Jeuther, Jr.
wit

associated

been

Mr. Jeuth:
has formed Edward Jeuther, Jr.

them for many years.

offices at 70 Pine St.

& Co. with

G. A. Saxton & Co.,

Paine, Webber, Jackson & Curtis

'

New York City.

Street, New York 5, N. Y.

70 Pine

Attractive Situations

Teletype NY 1-609

WHitehall 4-4970

ESTABLISHED 1879

Inc.

Ward & Co., 120

Broadway, Nev
City, have prepared circu

York

in this terri¬

the electric industry

Public Utility

tory was in a pioneer and
stantially undeveloped stage.

Securities

Securities

Commission, and in less degree the

Commission, have been trying to introduce a new sys¬
accounting for utility plants under their jurisdiction.

and Exchange

of

tem

cost

Through its own regulations and orders, through NARUC (National
Association of Railway and Utility Commissioners), and through

commissions, the FPC

work" among individual
new philosophy thaP3>

"missionary
introduced

a

plants should be written down to sjons should require
tt/Iann
v»c*4
rlfiTrAfod f A
i
x.
first devoted to companies
to
take

AIt ni

of

has

accounts,

public use."

amounts

cutting them down to "aboriginal
cost."
Nevertheless, by > indirect

of accounting. Orig¬
records of some plants,

the dark ages

inal cost

possibly constructed 40 or 50 years
ago, may be entirely missing and
it is necessary for the commission
and company engineers to recon¬
struct these costs on the basis of
While

estimates.

various

con¬

a

of "aborig¬
inal cost" may represent sound
cost accounting, some of it may
be merely guesswork.

siderable

the

Also

"one

percentage

as

plant

making such ad¬

justments a condition for the ap¬
proval of reorganizations and re¬
capitalizations, refundings, etc., a
considerable amount of this addi¬

adjustment has been carried
This, of course, raises the
possibility of rate cuts, based on
reduction of the "rate base." And
tional
out.

the

Supreme Court has not thus

far given the

utilities any protec¬
(the Hope case did not pre¬

tion

sent the issue in clear-cut form).

upward

mitted

the

S. Merriam is now associated with

The

circum¬
enterprise was

new

.

.

this

amount

to

be

added

strict accounting

as

prin¬

ciples are concerned, there is am¬
regula- ple authority for the amortization
This
tons described by the FPC and by of the cost of intangibles.
authority,
however,
many of the State commissions, accounting
the proportion of present plant does not presume to make -the
accounts in excess of original cost amortization of intangibles man¬
is divided into-two parts known datory, even in unregulated in¬
as
"100.5—electric plant acquisi¬ dustries. It recognizes the trustee¬
tion adjustments" and "107—plant ship of management as the cus¬
back in.

Under

accounting

the

Atkinson, Merle With
CALIF.

FRANCISCO,

SAN

The former repre¬

adjustments."

the actual or estimated ex¬

sents
cess

of the monies

paid for pur¬

chased plants, over aboriginal cost,
and the latter represents "write-

ups"

the books of the company
predecessors, in excess of
amounts
which they
paid

on

its

or

the

.

when

purchased
structed the properties,
r

they

The fact that

a

or

con¬

number of hold¬

had written> up
books
by
substantial
investigated by the
Federal Trade Commission and its

ing

companies

system

amounts

was

findings were reported to Con¬
gress, becoming the basis for some
of the regulatory provisions con¬
tained in the Holding Company
Act.

Many

have

now

these write-offs
been wiped out, by
of

agreements
between the
com¬
panies
and
various
regulatory
commissions, and further read¬
justments are in progress.
But
nothing contained in the Utility
Act specified that , the commis-

todian

the

of

funds

business.

ticular

of

matter

amounts

the.

carried

representing

the

of

the

par¬

disposition

San

Exchange.

Mr.

of

formerly

ston & Co. Mr.

recently
gomery

is

free

tax

fers

Company, whic
Pennsylvania, op

in

possibilities

interesting

ac

cording to a memorandum issue
by Buckley Brothers, 1529 Walnu
St., Philadelphia 2, Pa., member

Philadelphi

of the New York and

Stock

Copies of thi
may be had fro

Exchanges.

memorandum

the firm upon request.

us

a

•

I

—

ization 6f

moved

Hemphill, Noyes & Co.,

Atkinson Exchange,
the

as

registered

1

request.

represen¬

Build¬

Fidelity-Philadelphia

ing. Mr. Peacock was formerly a

from

Exchang

exchanges, have'prfe
pared
an
interesting
study .1
taxes
and
reconversion.
Copi
may be had from the firm upo

the New York Stock

tative of the firm in its office in

recent¬

Stock

other

Interesting Situation
H. R. Baker & Co., Russ

Bid
Calif., have avai
interesting
report

San Francisco,
able

an

Co. .. have

partned in the firm of E. J. Moore

Security First

216-Mont¬

& Co., and has been in the "secur¬

Los Angeles. Copies of this

&

Scanlon

PHILADELPHIA, PA.—Samuel

members of

Francisco

was

and

M. Peacock has joined the organ¬

partner in Key-

Merle

Lilienthal & Co., ,2
City, members

Broad St., N. Y.
the New York

Hemphill, Reyes & Go.

ly with Dickey & Co.

Stewart,

Pennsyivani

H. H. Robertson

ities;

Street to enlarged quar¬

ters in the Mills Building.

business for
'

years.

more

than

25

may

National Bank

repdi

be had from the firm upp

request.

"

of

accounts

the

in

was

"B^i

the

leaves

It

the

members

Tax Free In

Hirsch,

S wwomifn, vvi

Stock

Long

Taxes And Reconversion

&

"insofar

Instrument:

Co.; Great American In
dustries; Mid-Continent Airlines
Massachusetts Power & Light $
Lumber

Frederick

Reeder & Co.

-

allow

Publishing; P. R. Mallor^

General

.

Light, Co., handed down June Douglas G. Atkinson and Leo V.
ultra
(Conservative > bookkeeping 24th, can only be quoted briefly.* Merle have become associated
The
Commission stated
(p. 28),. with Stewart,
Scanlon
& Co.,
methods, the commission' did not
Oil

Standard

under

expenses

—

—

seems

when

even

Collier

Laboratories
"A'
Distilling;
Crowell

has

and promoted for the
of developing the terri¬
(Special to The Financial Chronicle)
Neither respondent, nor ; ST.
LOUIS, MO.—Mrs. Mary B.
anyone else, could have success¬
Ross is with Barrett Herrick &
fully integrated and operated the
Co., Inc., 418 Locust Street.
properties and obtained these re¬
sults
except
through
common
(Special to The Financial Chronicle)
ownership thereof, and that such
TACOMA, WASH.— Salem A.
ownership could not have been
Nourse
is
now
connected
with
acquired if respondent, in acquiing the properties, had been lim¬ Merrill Lynch, Pierce, Fenner and
ited in the price paid to a mere Beane,
Washington Building. Mr.
return to the various owners of
Nourse was formerly with Hewitt,
the original cost of the physical
planned

purpose

tory.

Mont

Du;

Merchants

preferred; Majestic Radio; Mag
E. navox Corp.; Electrolux; Purola
joined the staff of tor; Brockway Motors; Mohaw
Slayton & Co., Illinois National Rubber,
Moxie,
Scoville
Mfg
Bank Building.
Douglas Shoe; and American Ex
port Airlines.
^

ILL.

QUINCY,

Bexten

fortuitous

of

result

stances.

possi

& Co. upon request.

Parker

appropriately be called re¬ Coburn & Middlebrook, 465 Con¬
spondent's major development pe¬
gress Street.
Mr. Merriam was
riod, the year 1929. The integra¬ previously with F. L. Putnam &
tion of the properties has been of
Co.
substantial benefit to the public
of the areas served now by re¬
i
(Special to The Financial Chronicle)

is a / It is rather surprising, there¬ properties."
No readjust¬ fore, to find one of the State com¬

the Arkansas Depart¬
to be per¬ missions
justified by ment of Public Utilities — crit¬
sound accounting methods.
Thus icizing the idea of "aboriginal
in the Hope Natural Gas case, cost." The 69-page Findings and
where^ part of the original cost Order (Docket No. 225) in the
had been charged to
operating rate case of the Arkansas Power

ment

—

whid'.

bilities, the firm believes. Copie
circulars, on the follow
ing issues, may be had from War

may

FPC's procedure

street."

way

such

means,

PORTLAND, MAINE

offer

of these

(Special to The- Financial Chronicle)

<

situations

attractive

several

on

currently

Personnel Items

by a comparison
facilities in service in April,
1925, with the service and facil¬
ities shown at the end of what

of th§

^

nicknamed by the

out

sub¬
This

utility spondent. The evidence further
J
additional shows that the integration was not

the

v*

their "cost when

The latter has been
utility industry
"aboriginal cost" with the impli¬
cation that such cost goes back to

Broker-Dealer

is made apparent

_

"Aboriginal Cost" Opposed By State Commissions
The Federal Power

lars

This advertisement is not> and is under no

costs of intan¬

for sale-

or as a
v

gibles entirely to the discretion of
that
management.
Accounting

'

circumstances to be construed as, an offering of these B onds

an offer to
made only hythe

solicitation of
*1

*

buy any of such Bonds. The offering is
Offering Circular,

authority
recognizes
that
ac¬
counting is the recording, classify¬

$37,800,000 ~

ing, and summarizing of costs and
in no way attempts to account for
values, except insofar as liquid
assets, as distinguished from fixed
assets, are concerned."
The

Commission

•

also

(p,~

sition, construction, and integra¬
tion

which

resulted

in

the

tion of the

Chicago Union Station Company

32)

points out that integrated utility
systems may be worth substan¬
tially more than the original cost
of the separate units, because the
process
of system-building and
integration .increases the overall
efficiency and potential capacity:
"Prior to the program of acqui¬
crea¬

present electric system
of respondent and its organization,

First Mortgage,

Due

Dated July 1, 1944

10iy2%

AND

ACCRUED

Crescent Public Service 6s 1954

Portland Electric Power 6s 1950

j

INTEREST,

Copies of the Circular, dated August 23, 1944, describing these Bonds and giving
information regarding the Company may be obtained in any State from only such
dealers participating in. this issue as may legally offer these Bonds under the
securities law of such State.

Blyth & Co., Inc.

Kuhn, Loeb & Co.
The First Boston Corporation

i

•

.

Glore, Forgan & Go.
Harriman

/«.

"

JA.

j •

'V

*•

-

•

v

.?•.

*

•

• -

*.

I

.iH

Goldman, Sachs & -';v
Co.
-

Ladenburg, Thalmann & Co.

Ripley &-Co.

Incorporated

n.

-

■

Associated Gas 8c Electric Securities

July 1, 1963
C'-r

PRICE

iUtllM 1it,

i
American Gas & Power 3-5s & 3.6s 1953

Series "g" 2%% Bonds

•'.
'

Lazard Freres & Co.

Gilbert J. Postley & Co,
29

Stone & Webster and Blodget

BROADWAY, NEW YORK 6, N. Y.




Direct

Wire

to

Chicago

Lee Higginson

-

.

New

,

Incorporated

York, August 24, 1944. j

.

,

V

Corporation

Union Securities Corporation

ft

i,

jkiikocwutf.VPiiMiftrwdWrfVi - >.

•"Volume 160

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

a

«

OUR

T

heavily worked staff

ing spell.
1

REPORTER'S

..-'V./.'.

:

.

'•

'

.

'

-v

.

'

*•'

f.

Edison

Ohio
Another

breath-

a

\
/

•

,

•••

•

■

f

'}[ The

'

rather

large

of

piece

When Issued Securities

public utility financing came

Ohio

Edison

Co.

of

'

1st

filed

Akron

with the Securities and Exchange

^normally marks the end . of the
"Rummer dullness in the new issue
piarket is now little less than a
week

and

Mtge< %s,

Commission in preparation for re¬
financing its outstanding bonded
debt of $52,446,000 in 4% bonds

away. -g:

'Signs 'of

:

■■

interest

reawakening
in preparations

found

are

:gyg

among

underwriting bankers for seeking
pew business, most of it destined
to be awarded via the competitive

Jbidding route.:■■■■':■)}/
Yi- This week was due to bring a
which held;
the situation in its grip through

break in the lethargy

Empire & Bay St^te

light the other day when the

which

Day holiday

Labor

Offerings Wanted

Denver and Rio Grande Western R. R.

Program

into

REPORT

'

Income

issue of

bonds and

5% Preferred

V

Stock

Yor/c

Stock

Exchange

Clearing Contracts

Telegraph Co.

61

new'

New

Yotk Stock

Pacific and Atlantic

Exchange

Telegraph Co. v

New York 6

Broadway

Bell

Telephone—DIgby 4-4933

Teletype—NY

1-310

Southern and Atlantic

stock.
The bonds, "it
indicated, would carry inter¬

preferred
was

of not

est

than 3J/4%

more

Telegraph Co.

while

the

stock

the dividend rate

on

new

Railroad Securities

would not exceed 4V2%.

investor, helped

average

to swell the total of new

becoming -available.

material,

■

Co.'s

Electric

$10,000,000 of

30-year first mortgage bonds
which were up for sale today,

new

y

And it-looked as though at least

'four banking syndicates would be

Great North¬ ment in recent years. As a result,
successful re¬ fixed charges have been reduced
financing, and it had generally by about $2,000,000 in the last 10
been expected that the company years to a current level indicated
would take -steps to eliminate its at
roundly > $8,300,000.
These

common

as

equity by transferring to the-

stock

company

> <

^vAt. least two groups were ex¬
pected to enter bids for Birming¬
ham

Ohio's

bolster

would

certain securities which

it holds.

;

Calls for Bids

Awaiting

good a position
to accomplish

ern

as

•

every

first

due

bonds,

mortgage

1974, $100

of notes also sched¬

and $6,200,000

uled for sale today.

par

be

$7,880,000 in bank loans to
provided by a group of New
bbtion season should help to ease York banks to purchase and retire
outstanding 7 and 6%. preferred
somewhat the strained worker sit-

road

last week . when

Portions of those issues,

namely,

b

may

stocks.

j^atjpn ; in the Street which re¬

not

o n

d

the major

exchanges voted to re¬

of

shares

7%

of the

shares

544

is

and 35,473

be

St., Chicago 4,

III.

SEABOARD AIR LINE
RAILWAY COMPANY

depression

has been

consistent

one

;

of the

dividend-payers

Old and New
Securities

■

.

Van Tuyl & Abbe
WALL STREET

72

'NEW

5

YORK

levels/

many

missed excellent refunding oppor¬

6%

the

LaSalle

held

cess

tWo»

sequent recession.
Empire
kWE WILL BUY FOR

in

.

While

• v

,

favor

a<

consummate

failure to

$10,600,000 of new first

the

bonds involved.

gage

Minneapolis,- St. Paul

known to be in process

formation with a view to

of

mort¬

gg

Power

Western Pacific

shares

Josephthal&Co.
Stock Exchange

and other Exchanges

j

-

■

charges, and the favorable opened up important new traffic
traffic
prospects
in
a
normal sources. This long-term territo¬

already issued
Cities Service
& Light Co.- This, under¬
involves, as well, 6,500
of 5%, $100 par, cumula¬

New York 5

REctor 2-5000

St. -g

to

acquire, by merger,

ties of several

Telephone:

Boston 9

cited
as
construc¬

are
all
warranting

economy,

factors

tive > attitude

LAfayette 4620 lgg

age

the propnamely,

other firms,

Co., | Lawrence

Utilties

County Water

Light & Cold Stor¬

Co., and Benton

ities Co.

BUY WAR BONDS

Yz«, 1960

Pollak Manufacturing

County . Util¬

*

'

148 State

- -

-

-

St., Boston 9, Mass.

Tel. CAP. 0425

N. Y.

:

;

Teletype BS 259

Telephone HAnover 2-7914

Ganfcn Q'Doinell With

fixed

towards

stock.

•

Jan.
of

a

the

the

;

•

,

•

:

periods,

be of a

Louisville & Nash¬

McRoberls, Graham Go.
Is The New Firm Name
SAN ANTONIO,

TEX.-McRob-

mission to

trading

as

Canton

associated
&

Com¬

Garrett-Bromfield

pany,

650 Seventeenth Street. Mr.

O'Donnell has recently been serv¬

ing

Major in the U. S. Army.

as a

In

the past he was president of
O'Donnell-Owen & Co. for many
years..

.

partnership of Charles

Graham, formerly manager

R.

of

Municipal Bond Department
of F. S. Yantis & Company, Chi¬

cago,

Illinois; and change of firm
to McRoberts, Graham &

Co.

now

—

become

Company, Frost National
Bank Building, announce the ad¬

name

are

has

&

erts

particularly heavy burden. Never¬

"when

Chronicle)

to The Financial

(Special

DENVER, COLO.
with

ville's debt had not constituted a

We

-

O'Donnell

permanent nature.

the

■

Except in the severest depres¬

sion

Garrelf-Bromfieid Co.

ulated by war

1, partially with the proceeds
very low-cost serial or bank

loan.'

growth has been further stim¬
needs and much of
new
capacity is believed to

rial

a

Moreover, it is considered fairly
preferred stock.
Proceeds will be applied to the certain that even if the high cou¬
pon bonds were not refunded this
redemption of $10,044,900 of the
year there will be a sharp reduc¬
company's outstanding 5% bonds tion in the amount of unified
due March 1, 1952, plus $851,200 mortgage bonds (3V2S, 1950, and
of first mortgage 5% bonds of the 4s, 1960) outstanding at the yearend.
In fact, in some quarters it
Ozark Power & Light Co., as¬
is expected that both series will
sumed by Empire, which proposes be
called in
their entirety for

Ozark
19 Congress

Conv. 4

in¬

means

no

tive

Telephone:

an

•

•

ation, since it is
and held by the

taking

•

shares from

certain, the best term secular growth. Such traffic
for
refunding
has is relatively invulnerable to re¬
passed.
The long-term earnings sumption of highway competition.
and,, dividend
history
of
the In addition, the road has benefited
properties, the progress already from the industrial growth of the
made in reduction of debt and southeastern
area
which
has
by

stock sale will be
in the form of a secondary oper¬

*

120 Broadway,

the

seek opportunity

The common

&S.S.M.

Members New York

on

vestment standpoint.-

a

,

groups are

and

Electric

ly

(When Issued Profits

■

District

Baltimore & Ohio

^Competition promises to be live-, refunding at this time may have
Aside from its past record, the
for new bonds and .common proved g discouraging
to
many road appears to have better-thanstock which the Empire District holders of the stock, and to many average traffic prospects on a re¬
Electric Co. proposes to market. prospective purchasers, most rail turn-to-normal business and rail¬
Even though the company has not among the most attractive invest¬ road traffic flow.
It is heavily
set any definite date for the sale ment issues in the field. They con¬ dependent
on
bituminous
coal
of these securities, at least five tend that this is true even if, as is from fields that have shown long-

CASH

V; : •

•

So.

Considering that all indi¬
It cations point to the stock emerg¬

favorable.

so

that

recalled

y. ■

other

among

conditions

market

>

•
and

Stock

Broadway, New York 5, N. Y.

231

railroads ing into the post-war era as a
preferred, are
regular,
and ■■■■•[ liberal,
dividend
tunities in the railroad bull mar¬ payer even in periods of subnor¬
by., the
American Gas i &
last Saturday and the next
Electric Co.
The balance oi both ket of 1936-37 and suffered-se¬ mal business, it is ' little wonder
week-ends in order to afford issues is held by "the public:
verely for their errors in the sub-' that rail njbn generally look with

ceived cognizance

-

120

the railroads, having had
only one lapse (1933) since before
vestors have begun to fear that the
beginning of the present cen¬
perhaps
the
road has "missed tury.
The rate in recent years
the
boat"—that when the next has been $7.00 a share per annum,
opportunity to call these bonds which would afford a return of
comes-; around
the general rail¬ better than 8% at recent market

be

MEMBERS
Exchange

York

TRADING MARKETS

The stock
most

post-war period
clouded,
some V in¬

considered

some

The waning of the summer va-

,

the

•

leading Security and Commodity Exchs.

decade.

in the immediate

sale of this
used along with
by

raised

would

issue

'

value.

Funds

of

year

g

''

'

Corp. 7%Pfd.

g
New

charges-would absorb only 9.4%
of
average
1938-40 revenues, a
modest requirement for a road in¬
herently so efficient as the L. & N.
They would have been covered in

>

$44,000,000 projected Indiana & Michigan further :
length of at least the
hew
Chicago Union Station se¬ Electric Co.'s 120,000 shares of European phase of the war, and
curities, including $37,800,000 of new cumulative preferred stock of with the prospects for railroads

In the running for the

Brill

a

high coupon junior bonds ;(runawaiting calls>: for. ning to as much as 5%) this year.
bids on several other pieces of
The last opportunity to call the
business which are in the cards junior, bonds for redemption this
and
expected to develop early year passed on Aug. 1. With grow¬
next mbnth.
Among these is the ing optimism as to the possible
Bankers: are

riil.

-

Funds raised from the sale of
tecenf weeks. Several issues were
-WLouisviTle & Nashville stock has ,been acting relatively poorly
in recent weeks, trending lower on desultory trading in the face
up for bids today,;which meahs the foregoing securities, together
that they probably will reach mar¬ with the $10,000,000 to be bor¬ of a generally steady rail share market and periodic'signs of strength
ket; early next week if they are rowed from banks in the form of among other rail equities in the investment category. The disap¬
pleared by the Securities and Ex¬ 2Y4% installment notes, plus $17,- pointing action of this fundamentally sound rail stock dates from
change Commission - as g regards 000,000 of company^cash, would the beginning of the current month.and apparently stems from the
be
"price, spread,, etc./..
*
applied to retirement of the failure of the company to an-<£A>And New York Central's $15,- outstanding securities.Ohio Edi¬ nounce any broad- refunding oper¬ theless, the management has been
son
is a subsidiary of Common¬ ation.'1 From a credit standpoint, among those that has pursued a
£00,000 of equipment trust certifi¬
cates, even though they don't in¬ wealth & Southern Corp.; t which the road is certainly in at least conservative policy of debt retire¬

terest the

International Ocean

only.

PFLUGFELDER, BAMPTON & RUST
Members

Telegraph Co.

Common $100 Par V. T. C.
;

$30,962,000 of 30-year

180,000 shares of

1993

Mtge. 41/2S> 2018

New

198,952 shares of $6 and $5
preferred stocks, v'
■' • ? ■
The company proposes to sell a
new

atM'tu i»v„v^ <wuhvw» I

L

783

■

new

-0-/ f

nmi"*'&m U^me^r^A •■

Denver &
Salt Lake

Railway

brokers and dealers in the
SEABOARD

issued" securities of the new

RAILWAY COMPANY.
In this connection

General As

1975

-

we

wish to point out that, subject

prior sale, there are certain
on a 25% basis.

to

Income

Mortgage 6s, 1960

Seaboard arbitrages

available
.

SPECULATIVE

POTENTIALITIES

A

Circular Upon

stock

required

Request

exchange

by

us

name

on

all

given

is

and

transactions.

1. h. rothchild &

Mclaughlin, baird & reuss
Members New

ONE
TEL.

York Stock Exchange

NEW YORK 5

WALL STREET
HANOVER 2-1355




*

TELETYPE NY 1-1310

'
,.

-

co.

Members National Association
of Securities Dealers, Inc.

63 Wall Street,

specialists in rails
52 Wall Street

HAnover

2-9072

n.

y. c.

5

Tele. NY 1-1293

New York 5

BOwling Green 9-8120
Boston

Philadelphia

Tele. NY 1-724

Hartford

,

Thursday, August 24, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

784

Tomorrow's Markets

Chicago Union Slafion
SPECIALISTS
A

in

TRADING MARKETS

*

Real Estate Securities

IN

banking group headed by
Kuhn, Loeb & Co. was awarded
Aug. 22 $37,800,000 first mortgage,
series "G" 2%% bonds of Chicago

REAL ESTATE

?;VvvV'^

Since 1929

\

Union

the

Seligman, Lubetkin & Co.

SHASKAN & CO.

Incorporated

Exchange
York Curb Exchongo

Mombori Now York Stock

40 EXCHANGE

Members

Dlgby 4-4930

fL., N .Y.

We Are Interested In

New

YYKYv''

York Security Dealers

HAnover 2-2100

By JOHN WEST

6% Income Mortgage Bonds

CORP.

Y. Security Dealers Ass'n

BROADWAY

NEW YORK 6,
;

N. Y.

WOrth 2-05I0

'

y

$28.50

Sept. 1, 1944, Distribution To Be
Per $1,000 Bond

C. H. TIPTON

"

Of

Modifications To Improve Position

TUDOR CITY UNITS

ill

Corporation Suggests Indenture

York

New

Allerton

AND

three well located
hotels in New York City—the Allerton, 38th Street (Midston House),
a
17-story, 475-room hotel at Madison Avenue and 38th Street; the
Allerton, 39th Street, a 17-story, 392-room building on 39th Street
east of Lexington Avenue; and the Allerton, 57th Street, a 17-story,
The

Allerton

450-room

York Corporation

New

owns

Lexington Avenue.

Street and

hotel at 57th

The directors of the

corporation *

members

of the

banking
include; Blyth & Co.,

Inc.,,The First Boston Corporation,
Glore, Forgan & Co., Goldman,
Sachs & Co., Harriman Ripley &
Co. Inc., Ladenburg, Thalmann &
Co., Lazard Freres & Co., Lee Higginson Corporation, Stone & Web¬
ster and Blodget, Inc., and Union
Securities Corporation.',
Proceeds to be received by the
company through the sale of these
bonds,
together
with
proceeds
from the sale of $6,200,000 Guar¬
anteed Serial Notes, will be ap¬
plied to the redemption on Jan¬
uary 1, 1945, of $44,000,000 prin¬
cipal amount of outstanding first
mortgage, series "E", 3%% bonds
due July 1, 1963;
/
:
;
<
The bonds may be redeemed at
the option
of the company in
whole or in part on ninety days'
notice

*

*

-

public at 101%./ Sale of
subject to aproval of the

syndicate

Real Estate Securities

FRED F. FRENCH Slocks

on

after July 1.

or

1949, at

Questionnaire

of

prices ranging from 105% for re¬
demptions prior to July 1, 1951,

corporation's letter,
I believe, is quite significant and
equity stock of the corporation,
have, in my opinion, made some important enough to quote as fol¬
lows:
very sound suggestions which if
"While it may be said that the
incorporated as trust indenture

Abolish The NASD

down to 100% for bonds redeemed

in

communication dated Aug. 9,

a

1944, to income mortgage bond¬
holders, who also own 50% of the

fund

sinking

for

funded" debt.

:

.

retirement

-

.

Part of the

market

notwithstanding,

July 1, 1961, together with
accrued interest in every case.

.

headed

appears

for*

should

be

| bought — Expect

rally resumption in

fu¬

near

ture

/•/:*;,/':

y

| By WALTER WHYTE
/•//Most of last week's market.4
was given over to! advances.:
In

some

sharp,

these

cases

in

were

others

they were
minor.
But whether large or
small, they were apparently
sufficient

opinion

make

to

the

mass

around again to*
of optimism.
Oddly

veer

the side

enough, the current popular
favorites
Almost

"inside"

of

matter of

of

coming

were

the

so

piece
to
or

a

bonanza.

As*

fact, these stories

moves

in the group
that

common

Y.

N.

a

utility

some /

other is in for
a

utilities.

information

-

that

prove

the

are

everybody has

even

Stock

Exchange
was forced to
give them offi¬
cial -recognition
by asking
Plastics Future Attractive members to report the sources*
Growth possibilities and out¬ of the stories, if they knew of

after

(Continued from page 779)
or
the bases on
made, not to air
them amongst the members, and modifications should be of mate¬ results for 1943 and the first six
to write a rule against the wish rial benefit to the security holders months of 1944 were due in large
look for Durez Plastics & Chem¬
of the membership, contrary to the and result in an increased market part to the prevailing high rate of
icals, Inc., appear most attractive
by-laws which imposed upon the value for the bonds. Based upon occupancy of all hotels in New
according to a memorandum on
Board the duty of submitting rules available income for the first six York City, they are also in no
the situation prepared by J. Roy
or
amendment to the franchise months of 1944 the most important small measure due to the policy
Prosser & Co., 52 William Street,
of the members.
::/N'suggested indenture modification of the corporation and efforts of
New York City.
Copies of this
!
Oh, yes, the Board is clamoring would have the effect of providing the management v in maintaining
memorandum -may be had from
that the rule is not a rule, was for close to a 4% annual interest the properties at their maximum
;
never
intended to be one, that distribution and, more important, degree of usefulness and, more the firm upon request. ;\ y
it's just a yardstick; and didn't about
in
preserving the
$75,000 cash for sinking particularly,
the NASD write District No. 13 fund operation
for purchase of character and type of service for
Situations of. Interest
on June <6,
1944, saying the "5% bonds to retire funded debt.
/; which the corporation's proper¬
I F. H. Roller & Co., Inc., Ill
policy" is not a rule, but should
The
reorganization
of
these ties have become noted and which
Broadway, Newe'York City, have
be considered by District Business
properties, like similar dther reor¬ have appealed to its particular
Conduct Committees "as a desir¬
clientele.
This has resulted in a preoared a memoranda on Great
ganizations, although it reduced
American
Industries, Laclede
able objective or yardstick, nei¬
fixed charges and placed interest higher level of occupancy than in
ther more nor less, and be em¬
Christy Clay Products and In¬
and sinking fund requirements on the case of New York hotels gen¬
diana Limestone which the firm
ployed by them in the light of the an income
basis, provided that too erally during the past eight years
circumstances
surrounding each
and enabled the management, in believes appear attractive at cur¬
large a portion of earnings be
transaction
which
rent levels.
may
be the
Copies of these in¬
used for interest distribution, in¬ spite of highly competitive condi¬
subject of examination or review
teresting circulars may be had
stead of a more sensible ratio in tions, gradually to raise the aver¬
under the Rules of Fair Practice!"
upon request from F. II. Roller
order that sinking fund operations age rate per room per day over
What folderol!
No one is de¬
& Co.
' ;
could reduce funded debt. It pro¬ 26% during the period /prior to
ceived by that self-serving dec¬
vided that income interest be paid the establishment by the OPA of
laration.
When it was made the
ceiling prices as at February, 1943. curity holders if and as the cur¬
New York Security Dealers Asso¬ up to 6% per annum and that the
"The Whaler Bar, which was rent high levpl of occupancy and
ciation and the Securities Dealers only funds available for sinking
fund would be the fractional part constructed in 1937 in the Midston use of the properties should begin
Committee had already instituted
above multiples of l/20th of 1%
House, at 38th Street and Madison to fall off."
their proceedings before the SEC
As an example of how security
in excess of interest payments.
It Avenue, at an approximate cost
to test the "5% rule." The NASD
also provided for cumulative in¬ of $21,000, has had the effect of holders have benefited through a
was in the toils of an
classifications,

which they were

Rumors

temporarily lower figures—
these On reaction,. certain / stocks

Other

Association

Broad Street, New York 4

41

Buying

SECURITIES

bonds,

bonds is

ALL

Members N.

The

Says

Interstate Commerce Commission.

NY 1-953

Boll Tololypo

t

Co.

July 1, 1944, and maturing
July 1, 1963, are being offered to

SECURITIES

Mombort Now

Station

dated

Walter Whyte

-

them.

W

'/

r'YY^'-yY

* /■■;.

■:

*

•-

*.Y:/ *

'/ Tracing down

:

•->/ "-

Y.V

;

story

a

to

! the original source would be

interesting

■>

if 7for

no - other

to; prove that a±,

than

reason

story ." gets plenty
lishments

makes

A }market

rounds.

back

tator

of embel¬

it

as

in

the

commen¬

1929

deliber¬

,

.

ately tqld an*;" annoying but
persistent questioner a hoked-j
up yarn about a certain stockj
Within

hours

two

all

was

that

the

over

story

Street

as.

"from the high-!
sources."
The strangest

having
est

come

climax of this

rumor was

that

the stock

increasing the profits of the bever¬
department from $12,000 for
the year 1935 to over $69,000 for

actually did go up
some 10 or so
points. Every¬
body made money out of it
but its originator.
In fact^
even
he began to believe in
the legitimacy of his brain
reorganization which laid more childand was
strongly
stress
on
retirement
of funded
debt, I cite the case of the Lin¬ tempted to buy. It all reminds

the

coln

us

which

waterfront

„

alleged vio¬

lation
was

of

its
The

on.

icle"

had

heat

The

by-laws.

poll of the "Chron¬

also

that

shown

vast

a

majority

of the NASD member¬
regarded
the
5%
soread

ship

philosophy to be

a

rule, and

was

Last minute attempts to call the
rule by another name fooled no
The subject of Questionnaires,

and of itself, is sufficiently
important
to require that its

/, in

establishment

proper

NASD

in

the

via

the

rule

should

making
sion

to

be

membership for its
as

not been done.
business

know.

we

of

that*

Prying into

its

members,

into their very
:

niacin?

on

transaction*, and
t^ern the burden of

baring their business in thd ab¬
of specific

sence
an

each

for

1945, and 4%

the

as

has

invasion

of

terest, yet

alleged

interest

of

so

much

recently.

shown

as

as

of

at

cost of

a

approximately^^,000,

has had the effect of changing

in¬

Dec.

the
ex¬

which

for real estate tax purposes,

In

the

y,;
corporation's

-

suggested

modifications, the cumulative in¬
terest rate would be changed to a
flat 2% from 1937 to 1954 and
surplus income above 2% interest
would be used, 50% for additional
interest up to 6% and 50% at the
discretion of the board for sinking
Had this modification been

effect from

1936 through

1943,

';he sinking fund would have been
approximately $42,000, about seven
times the amount actually avail¬

able;

a

small

amount

over

in the

assessed valuations

Prior
to the reorganization; and while
the corporation was still in the
courts

under

.

Section

.

77B

of: the

Bankruptcy Act, :the assessed valr
uation of the properties was in .ex¬
of $5,000,000./During the past
several years constant efforts have
cess

been

made

obtain

to

relief

these assessments with

the

that

current
your

to

total

obtain

for

the

MENACE

OF




ENTRAP¬

the

period,

true,

holders

wanted
•;

■

about the old

one

panhandler

who

free drink.

a

,

■

fir.

#

-

#

i.

..
■

debt /
to

amounted

the

cThis old codger dashed into

a

bar

and

yelled;

"Whale

reduction.

While the direct benefits of these

of .the

value

could

•
help -himself
to
a
couple of quick ; ones.
His

e l 1/ of
"whale ; ashore!'*
stampeded the mob." They "all
/The -adoption of - the suggested made- for the door,¥ almost

own

$20, $30, $40

indenture

or

$60 annual income.

modifications

-

in

the

trampling*:' over * the

my

loader .looked at the mob in

$aisa" of/tfe/
Corp. by bondholders: will in

opinion increase the market value
considerably

$3,250,000;. and
price
making an effort

/further

contention that security
interested in the

are more

bond they
than in whether they receive y

market

is

is
a

from

the. result

assessment

year

Board

It is my

.

but
due to reductions have been to a large
MENT UNDER THE GTTT.SE OE low
occupancy
ratios of hotels extent offset by the rise in the
self-regulation.
in
SHOULD
general
until
1943.
Had tax rate, they have been instru¬
BE
ABOTTSHED.
QUESTION. the
applicable income of $201,- mental in enabling the corporation
NATRES SHOULD BE OTTT. AND 676.03 for 1943 been available for to pay the interest payments made
TUB DEATU RLOW DEALT TO
such a split as above instead of: to date,
ENTRAPMENT.
being used for interest accumu"The corporation's position has
The
power
of visitation pos¬ lations, 3 ¥2% interest wou3d have thus been strengthened during
sessed bv the SEC is an adequate been paid on the bonds and about the war period and this should
safeguard.
$61,000 would have been available 'be of continued benefit to the seTFTS

time

that

of

$15,213,500 and which now totals
ashore! "/figuring that while
"At the same time, very sub¬ only about $10,500,000. Bonds are
out.;, he
stantial reductions have been, ob¬ currently quoted 118-120./ Y : • / everybody * dashed

year

tained

:

at

funded

of

retirement

for

to

a

of beverages, from a loss
profit almost equal in each
to the. cost of the installation.

Building Corp. 5V2S, 1963,
provided,that before any
interest be paid net income was
to be charged with a depreciation
and obsolescence fund to be used

clusive

159.25.

in

which has been touted

although $603,-

unpaid accumulation

is

1943, and the Nantucket
Shop, constructed'1939

year

Coffee

for operation of the restaurants,

from

debt

funded

age

31, 1943, in the amount of $113,-

the

"self-regulation"

an

only

available

631.75 has been distributed

fund.

rights

of

sum

been

of

retirement

complaints, is

those members inconsistent with
the

3%

to

$6,446.50

route, through submis¬
the

As far

vote.

the

of the years
for each of
the years 1946 to 1954. These pro¬
visions have in my opinion been
1940;

1941

1936 through 1943,

one.

has

for each of the years

unsound

opposed to it.
Y

1936,
1937 to

terest rates as follows: 1% for

2%

above

around

its

now

low

Dealers... with

40.

yelleri
Catching his breath, the free
dismay;
there

is

•

a

"Dadgumit, maybe
whale ashore," he

reasoned./ And off he dashed,

owning these securities,

the / crowd.

following

might well advise them to advise

much for

customers

the

rumors.

So
<

•

corporation that they favor the

submission of

suggested

amendments

stantially

a

plan involving the

modifications.
would

bondholders

have

a

like

of

ago

consent

also

who,

as

50%

tM properties,

lot to gain.

But to

ket

require sub¬

unanimous

equity owners in

Such

get back to the

itself
now.

and

what

it

Two weeks

were down.
that time certain stocks

mar¬

looks
or

prices

so

/ At
were

recommended with the state-

continued

on

page 805)

Volume

THE COMMERCIAL &

Number 4310

160

FINANCIAL CHRONICLE

785

advertisement

Market
In
at the

is

same

doing

so.

concerning

clients

We

give consideration

it

never

is

more

to appraise all the fac¬
surrounding each individual

necessary

situation since war has benefited

selling

are

2.50%

many,

SCHENLEY DISTILLERS CORP., NEW YORK

per

Bottles

share)

4%. Long-term

to

governments are selling to yield
approximately ; 2V2%, and even
the long-term AA utilities and in¬
dustrials
are
selling at almost

^

H

OFFERING PRICE

•/,

barrel things are

will

<Vr

we

permitted, our problem
be simpler, but generally

be ;

would

speaking it would seem to us that
companies with minor reconver¬
sion problems and with excellent
peace-time prospects should be
the ones to benefit most in the
coming months. On a broader
scale, however, we are inclined to
believe that the following factors
produce substantially higher

will

.

prices for stocks over the longer
range outlook: „• •
We believe that a success¬
ful conclusion of the war at a not
(a)

too

far distant date has

been an¬

and discounted in most

ticipated
instances.

peace

market

break

a

in

on

Europe,

will

the advent of
and that the

follow

1918-19

the

high-grade

high-grade stocks that we have
witnessed, except possibly in 1942
and 1943 before the present rise
took place.
•
;
- ••
The following

additional factors

important: (1) Corporate taxes
have
in
our
judgment reached

are

their ultimate and there is

in¬

an

evidence that Congress
reduce
corporation
taxes,

creasing
will

which of itself would benefit

cor¬

porate earning power for common
stock.

(2)

The

and

refunds

war

of post¬
post-war tax

benefits, (even if no change in
present tax law) is substantial; as
stated above earnings could de¬
cline drastically without affect¬

share.

per

In fact in some cases

the benefits

such that corpor¬

are

could

ations

lose

money

for two

the war
net profit on the

three years following

or

and still show

a

ments.

(2)' the public is usually wrong;
(3) the situation is not analogous

above

factors,

FACT

THAT PURCHASING

to 1918-19 since taxes have drawn

(80 %

off most of the war profits
to

90%), and since we can see a
decline in gross for

substantial

common

tstock

after

tax

adjust¬

•

important than any of the

OF

POWER

however,

THE

IS

AMERICAN

THE

DOLLAR IS DECLINING.

There

dollars in circulation and
fewer things to purchase. The sup¬
many

new york

in

case

1918-19. At that time you

had low income taxes and a high

price ratio so that the temporary
decline' after

the

affected

war

profits drastically. You will recall,
however, that the market turned
upward in a fairfly short space of
time and continued on until 192021,

declining

again

in

ing power in the country.
hundreds

and

items

of other

are

practically
unavailable. This
money does not remain idle in¬
definitely, and it is almost obvi¬
ous that a part of it at least, will
flow into

1922 and

1923.

Auto¬

mobiles, radios, washing machines

More

investment channels.

obvious to

but possi¬

us,

Unemployment And Business
Activity-Are They Inconsistent?
Ralph E. Samuel & Co. Sees Possibility Of "Quite A
Total Of

Unemployed" And High Productive Activity
Same Time With Business Operations Pleasingly

At

Profitable To The Investor
In

thinking about
commentators

many

the

are

immediate post-war

America,

in

years

too ready we believe to consider business

as mutually exclusive.
In our opinion
For as the wars approach their end it becomes rea¬
sonably clear that it may not be a question of "either/or."
'On the contrary it now seem* quite probable that in the early

activity and
this is

a

unemployment

fallacy.

post-war years we will witness^'
——-————■
high business activity, which may ment insurance of course will
have considerable unemployment somewhat ease the problem.
But
all of these obviously are mere
as a concomitant.

which

companies also had outstanding
bonds, were selling to yield less
than the bonds of the same com¬
panies, in many instances from a
3% to a 4% stock yield. In other

WILL KEEP THE

DOLLAR EX¬

PENDITURE OF THE GOVERN¬
MENT FROM SOMEWHERE

BE¬

TWEEN 20 TO 30 BILLION DOL¬
LARS ANNUALLY.

is

to

be financed

If

from

this

sum

taxes

this is not as para¬
it may initially appear.

doxical

as

traditional

For

ductive

genius

supply

our

American

pro¬

be able to
needs,
with
plenty left over for export abroad,
without our reaching the desired

palliatives—in

do they
promise to get to the undiscovered
(We

may

own

the

of

root

use

sense

no

problem.

~

_

■

b

the

budget is to be

improve over a period of

and the number of years,
before it reaches its peak, varies.
takes six

it

Sometimes

or seven

longer. It depends upon
the type of whiskey, warehousing
conditions, and the characteristics
years, or

of the barrel.
When

.

-

the bottle, unlike

put in

im¬
whiskey may be adversely
affected by the incorrect type of
glass. Now, this may be news to

wine, which may continue to
prove,

you. 1

The art of bottle-making goes way

antiquity, and many are

back to

surprised to learn that in our
own country the first glass factory
was built in Virginia in 1608.

the words

"undiscov¬

ered root" for there is little to be

gained
it

has

blinking the fact that
only been in time of war
in

in mind, with 10 or
the
Services.
When they re¬
civilian life and civilian

jump to the erroneous conclusion
that corporate prosperity will be
absent or limited.
Quite the con¬

jobs they may in part displace a
large total of other, and to some
extent newer, workers.
Hence, a

operate in a manner highly satis¬

keep clearly

12 million men and women in
Armed
to

turn

year

or

witness

two from now we may
quite a total of unem¬

high and business
operations pleasingly profitable to
remain

may

factory

a

mensions

of

fact,

struggle

problem as we may, un¬

employment

investors despite the
employment. For

to

the

job of filling the needs of the

40,000,000
their

or

more

families,

will

of considerable di¬
be with us for a

may

making of glass and
some
thousands of
has

years

ago,

it

only been during the past few

that the effect of various
on their glass containers
been seriously studied. It is

years

at work, and
result, it is

has
now

generally known that certain

glass has

a

peculiar action on some

liquids; and these liquids likewise
have an effect on the glass. Well, based

scientific study,

on

experimentation and their result¬
ant findings, the distiller today,
in his laboratories, has worked out
very

careful specifications and

sampling tests to which all bottles
are subjected before they are ac¬

cepted for whiskey, gin, etc.
In

one

of

our

other articles we

said, "Men in white have discov¬
ered more about whiskey during

few years; its control dur¬

the past

clear, in a high level of business

ing the fermentation

activity and satisfactory profitable

tion processes;

operations.
Taxes, of course, may drain off

matter

with the

may

absence of full

investor.

As

business

trary—American

that the
bottles began

But, in spite of the fact

liquids

a

fair part of

order to
to

ease

whom

furnished.

corporate profits in
the burden of those

employment cannot be
But
that's
another

and distilla¬

its aging in the wood
and its bottling, than in the many
hundreds of years preceding." May
we say that again?
r
.

MARK MERIT

of SCHENLEY DISTILLERS CORP.

Public works problem—and one that unfor¬ FREE—Send a postcard or letter
tunately tends to become political
may take up part of the slack, an
to Schenley Distillers Corp., 350
contentious.
RALPH
E.
experimental shorter work-week and
Fifth Ave., N.Y.I, N. Y. and you
SAMUEL & CO.
may be helpful, and unemploy¬
will receive a booklet containing

long time to come.

—

and

It would be ridiculous to inti¬ vestors, and you have the backlog
balanced, as
for a continued upward trend.
ultimately it must, obviously the mate that stock prices, which after
We
have
not
mentioned
the
pressures
will be enormous to all from day to day are depend¬
ent
upon
mass
psychology as Bretton Woods conference, and if
keep dollar income high in terms
of American dollars—and by high much as' anything else (number you read between the lines you
must see that ultimately in some
bonds should certainly yield less we mean above the 100 billion of selling orders in relation to the
number of buying orders), could form or other the United States is
than stocks.. You may recall also level,
nearer if possible the 150
from today's levels, going to contribute huge sums to
that Mr. Mellon about that time billion level.
To us this means not decline
but our judgment tells us that the world banking arrangement,
came out with this famous state¬ higher prices in terms of Ameri¬
ment:
"Now is a good time to can dollars, and reduced purchas¬ such a decline could be but tem¬ which, whether it be a glorified
PWA or a conservative institution,
buy bonds'." *
f
-fcf
j
ing power in terms of American porary, and over the longer range
is inflationary so far as world
dollars.
Call it what you will— viewpoint today's prices may look
n
Everyone knows what subse¬
prices are concerned.
quite low.
quently happened in the latter inflation, deflation or controlled
Nor have
we
mentioned the
Another
factor
not generally
part of 1929; that the market economy, it still comes to the same
persistent attempts on the part of
result—higher prices for every¬ known and which could be quite 1
moved
up
in
1930, but again
labor to break down the restricsubstantial in its effects is that
; 1
reached its lows in June of 1932. thing.
tions of the f'Little Steel Formu^
Obviously, therefore, if corpo¬ there are more sold-out optimists
We think it is also true that the
la" which may yet have its effect
rations are to produce larger in¬ ("bulls"
in stock market par¬
stock market has never really re¬
before election. We do not believe
covered from the blow of that come and larger taxes and larger lance), who are sitting on the side
this wage level can be held, nor
wages, the price structure will be lines waiting for a buying oppor¬
period and its subsequent reper¬
do we believe there is anv seri¬
higher and earnings in terms of tunity than ever before in all his¬
cussions.
■:
;■
ous intention of doing so. Thus a
In the meantime, and coming dollars should be higher. We are tory. This opportunity may come,
higher wage level would again
down to date, the bond market told on fairly good authority that but we personally would not bank
cause a higher cycle of prices in
Add to this
has moved up to its highest levels it will cost General Motors some¬ too heavily upon it.
terms of American dollars.
of all time.
Tax exempt munic¬ where between $1,800 and $2,000 the amount of money in the hands

words, from 20 to 40 times earn¬
ings,
whereas the bonds were
yielding from 4% to 5%. We said
at that time that this was out of
line and could not continue; that

Whiskey,

into the barrel, con¬

,

the

New York Stock Exchange,

from the wood.

years,

to the GOVERNMENT DEBT PLUS THE
In the COST OF GOVERNMENT, SOL¬
latter part of 1928 or early in 1929 DIER'S RELIEF,
REHABILITA¬
stocks of 50 of the leading cor¬ TION, PENSIONS AND HOSPI¬
porations in America listed on the TALS AND OTHER ITEMS,
-

this color

tinues to

ployed in the U. S. A. but at the
same
time
productive
activity

edly; and this brings us
following significant fact:

time goes on

as

after it is put

unnoticed by the public, so(c) You will also recall that called, is the fact that regardless
stock prices then moved up from of who is in office in Washing¬
1923 to 1929 almost uninterrupt¬ ton, THE SERVICE COST OF THE
bly

amber

oak staves

ments

1-576

that we have been able to find
without their
goal of full employment, „ t. h
affected; and
ply of bonds has diminished; the
Today our production'is prbb- jobs for all our employables.)
more importantly since all stocks
However,
despite our having
supply of stocks has not increased. ably scraping up against a new
are selling at a fairly low priceIt is estimated that there is 100 to all-time
ceiling.
And we are quite a total of unemployment for
earnings ratio, which was not the 125 billion dollars of surplus buy¬
achieving that record, one should some time to come, one must not

many corporations
net being seriously

on an

deepens to a reddish brown. It
also absorbs certain flavor ele¬

5

bell teletype

telephone

takes

soon

hue from the charred

•

and

YORK

NEW

Enterprise 6015

'•

A'"-

:

Security Dealers Association

STREET,

philadelphia

telephone

."V-v.

"wood," it
'v

.

'

Moreover,

More

re

NASSAU

REctor 2-3600

cushion

pattern, but we are of the opinion
that (1) this has been discounted;

%

r-i

45

and

bonds

incorporated

Members New York

pendulum has swung the
other way and there is probably
the widest demarcation in yxelas

ing too seriously the net earnings

,

(b) Many people Viill, of course,
expect

"•:■■■

The

between

polorless when it goes into the

Kobbe, Gearhart & Company
■

times earnings.

could appraise
duration of the
war, both in Europe and in the
Pacific, and the speed with which
^reconversion to peace products

Obviously, if
accurately the

happening to

whiskey—it changes. Practically

since

version problems, etc.

Whiskey i3 aged in barrels, but is

sold in bottles. While it is in the

75g Per Share

and
peace may
benefit others comparable taxable yields. How¬
and harm others, at least from the ever, stocks are still selling at a
standpoint
of
their
respective relatively low price-earnings ratio
from 5% to 20% or from 4 to 20
profits, markets, earnings, recon¬
harmed

and

many

hope

Common Stock
(Par Value 10^

from about
taxable

yield

to

space,

we

will be of interest to our fellow Americans.
This is number forty-six of a series.

100,000 Shares

prompted by many inquiries from numerous
ideas of the present condition of the stock

has

there
when

time

a

Clyde Porcelain Steel Corporation

^v.;: ■V" /V'"

suppose

been

our

article which

there will appear an

...

market;o■■

tors

NOTE—From time to time, in this

that when it

time, we want our clients to keep in mind

This letter has been

i

Opinion

market letter we advised liquidation^ of funds but,

opportune time to re-instate your position to

an

to

last

our

reprints of earlier articles on vari¬
ous subjects in this series.

government bond holdings
immediately convertible into cash,
the old dollars of 1930-32 have a
tremendous number of new dollar

and

competitors; a larger amount of
dollars competing for a reduced
supply of goods.
The

with

of

well

companies

American

satisfactory post-war out¬

a

look,

stocks

common

managed

representing

as

they

do

j property which cannot be replaced
!
at current

prices of the stock, are

certain

almost

in

our

judgment

to reflect these conditions. Prices

for such securities should reflect
the multiplication of dollars which
has taken place and is almost cer¬

tain to continue for some months

to come, irrespective of how soon
It should be obvious that due to
to produce a Chevrolet of com¬ of people who never had it before
the war ends.
Wm. A. Spanier,
selling to yield from
the
stupendous
and
continuing
.40% to a 2% basis, and taxable parable quality of the 1940 models. and who will spend it at the first
President, A. A. Bennett & Com¬
thereby ultimately growth of currency in circulation,
hieh-gra^e utii v
uiuus- If this be true, it speaks for itself opportunity,
;
putting it into the hands of in¬ savings accounts, bank deposus pany,
trials and even some of the rails as to the post-war structure.

ipals' are




—

.

.

.

~^«waiaiMMNtrndmv>'*'. "

Standard Stoker

;

Ohio

•

By J. AUSTIN WHITE
Until

and

Bought
Current

—-

—

4

;77y7i

Common

Sold

Quoted

;>7v

analyses on request

week

a

ESTABLISHED

Tower

Terminal

As

slackened generally for all O.1?8,
appreciably. Two possibilities
for the disappearance of the strong demand previously

several days, demand has

the past

result activity has "slowed down

a

suggested

prevailing for$>—
high - grade been at

,

dealers

1899

CHERRY 0260

the

quite

numerous

in

the latter part

Kentucky

-

-

West Va.

of

the

As

prog-

" T-

1

ward

i«''''

THE

to

WEIL, ROTH & IRVING
/'/;

the

Stock Exchange

ities

BUILDING

DIXIE TERMINAL

in

Ohios

of

October.

O.

2,

CINCINNATI

the usual

and with

"

will

MICHIGAN

PENNSYLVANIA

MUNICIPALS

KLINE, LYNCH & CO. Inc.
CAREW

TOWER

CINCINNATI
MAIN

disintegration of German resist¬
in

ance

France. The

defeat

have

gained greater

ceptance. Thus it
Gruen Watch Co., Com. &

Pfd.

Trust

Land

Pfd.

Co.,

for

York

Terminal

Building

Tel. Main 4884

Grades

of .the

mention.

This

period

market

that

Starting some

distinction

prices

Ohios

assumed

receded

second-grade

for

somewhat

while

prices for high-grade names rose

Cleveland Traders To

slightly. As reported elsewhere on
this
page,
the Ohio Municipal
Price Index for 10 second-grade
bonds showed an increase in yield
O. —The Cleve- from 1.46% on June 16, 1944 to
land Security Traders Association 1.49% on Aug.
16,1944, while dur¬
announces that the annual Field ing the same period the yield on
]bay and Dinner will be held on 10 high-grade. Ohios decreased
Friday, Sept. 1, at the Westwood from 1.16% to 1.13%.
On June 16, last, the spread be¬
Country
Club,
Detroit
Road,
tween the yield on these highRocky River, O.
■
;
"
grade
bonds
and
these
lower
Features of the day will be golf,
grades was ;30%. On Aug.. 16 the
baseball; and the-,'dinner, with, spread was .36%. Until this sum¬
mer the spread between the prices
free beer and door prizes,
v

^CLEVELAND,

*

Reservations

with

E.

E.

Mericka &

Building,

should

bemade

which

at

selling
Parsons,

Jr.,

Wm.

J.?

Co., Union Commerce

Cleveland.

Guest

fee,

v".;/:'

$3.50.

stock

new

than

more
a

an

interesl3>-

3Vfc%

and

rate of not more

Southern

&

Corp., parent of Ohio, would con¬
tribute

Ohio's

to

common

stock

all

bonds

constantly being

was

rowed.

these

most

any

ceived ample
money

cause

tax collections, be¬
has been free and

likely to be
always so. Perhaps more buyers
are beginning to think of this.pos¬
sibility, and to think of investing
But it is not

easy.

with¬
stand a decline in payrolls (and
tax collections) after the war.
in communities best able to

Rules Against

Ohio Supreme Court

Levy

Akron1 Tax

spread

was

months

the

has

E. Kahn's

The

Co. re¬

Sons

offered to holders of its

($100 par) the privilege of ex¬

preferred

for

stock

new

of

7%

millage to pay all un¬
voted
bonds issued before this
charter limitation was adopted on
sufficient

6, 1928. The city authorities
that the charter limita¬

Nov.

would

tion

levy

the

affect

not

needed to service bonds

issued be-

adoption of the charter
limitation.
This assumption was

fore

the

that

10-mill

the

effective
rected

Jan.

1,

tax

"was di¬
and not pre-

1934,

against new

existing debt."

• •

-

,

The Court has just held, how¬
ever,

charier

7.5-mill

the

limitation for bonds issued
to the effective date of
itation

because

of the unexchanged

will

prior

per

unexchanged

of the

shares

The annual report

Chemical

ended

June 30,

of the Hilton-

Co.

the

for

year

1944, shows a net

profit after all taxes of $222,341
$1.09 a share on the 147,771
common
shares
outstanding as
or

pair

holders,
tion

since

was

than

with

contracts

the

the

the

greater
,

new

and

bond¬
limita-

previously

It would
does

.

existing

Consolidated net profit

strengthen the Hudson
case, i although
that
casewas
strongly reaffirmed in the subse¬
quent Columbus
case
decision,

of Wil-

case

was

t

Fu, Richards & Co.
CLEVELAND
'

Tote. CV 174

Tele. CI 150




Commerce

J. A. White & Co.

Building

CLEVELAND

how

1928,

$1.24

Union Central Building

,

29

Cincinnati 2,

Teletype CV 394

BROADWAY T

NEW

*;

Teletype
YORK

6

CI 163

-

.

Ohio

does not.

per

y

;

v

Unfilled

share.

history of the auto

in the

to 77

con- ;

highest

the

are

on a;

equal

were

hand

on

con-

y

*

*

*

President of the.
Oil Co., in connection with
release
of
the
company's

O. D. Donnell,

months

statement for the first six
of

profits of $7,-*

1944 reports net

$1.21

959,891,:?. or
share.

>

•

that

factors

income

the

of

tion

per
common
reflects a continua-v

This

were

senting a substantial. increase hi
the flow of funds into property)

liabilities

respectively,))

were

$38,213,768 and $11,012,645. The

.;)

regular semi-annual dividend of*,)
<25 cents per share and an ex-c.;|
share

were

cents

25

of

dividend

"tra

paid

stockholders June

:

r

.

.

per)

j

C
15, 1944.- •').'.)) 7
to

common

Municipal Price
Index :)):

preexist¬

'

7

Akron will like¬

be

refunding bonds should be

t

Date—

July

2
12

Jun.

.36

1.13

.35

>7.1.31

1.48

1.13

.35

>

1-31

1.48

1.15

1.31

1.46

1.16

•30

.y,

„

1.31

r

__

1.46

1.34

3.50

1.16

-30

1.17
:

.29

1.19

.31

%

Feb.

16

1.37

1.53

1.21

',.32

19

1.40

1.57

1.23

.34

Dec.

15. 1943

1.42

1.59

1.24

Nov.

17

1.39

1.57

1.22

.35

Oct.

13

1.39

1.58

1.21

.37

>.

refund substantial
annually for

to

Sep.

15

1.43

3.62

A-

However, there is

July

bonds

of

possibility that the people of
Akron will be asked to vote a

Aug. 18
Mar. 16
'

Jan.

.

__

Jan.

1. 1941—

It is

annual
a

refunding.

levy might well

least a sub-,
stantial part of it might.be ap¬
or

at

proved, since its approval would

require only

a

majority vote. :

v

4

1.24

.38

3.63

1.25

•38,):..

3.63

1.32

.36

1.76

1.97

1.55

.42

2.017

1.65

.36

2.13

1.70

.43

2.14

1.62

.52

2.58

2.01

.57

3.33

2.24

3.42 A

2.55

1, 1943__ "1.83

ZV2 mills in
order to avoid this necessity of
some

.35

1.44

.

1, 1942—

levy of

'

;

1.50

A

15

Jan.

passed,

1.46

1.32

'
v
7

Jan.

operations, will be

current

future

to

'

12
15

p:

■*

May 17
Apr.

vrti

1.13'

1.48

14

Mar.

t

-7: t

1.49%

1.30

__v

9

Aug.

:

1.31 %

Aug. 16, 1944-

Aug.

refunding some $680,000
maturing this
year,
and the

ly

Ohio

limitation

7.5-mill limitation

In any event

be

Telephone • «
Parkway 7340

; ~

•

cern.

substantially

10-mill

a

ing debt, if a

possible such

14

Members Cleveland Stock Exchange

,

'

30,

tracts

preexisting debt.
It is dif¬
since Colum¬
bus and Akron operated under the
same
statutory limitations before

tax

INCORPORATED

1944,

June

_

Union

outstanding

of common stock

charter limita¬

7.5-mill

the

a

WM. J. MERICKA & CO.

before

Aug. l; 1944* The nine months'M
earnings per share on the basis 7

the

outside

levy

several years.

.

or

on

primarily to the ex¬
Colum¬ panded drilling program.
<
,
10-mill A The company has maintained /
limitation for bonds issued prior
a strong liquid financial condi)
to Jan, 1,; 1934.
tion with cash and short term *
It is true that
Akron 'operates:"under its own
government securities totaling
charter, while Columbus does not.
$24,325,949 afc June 30, 1944.
But the reasoning of the court in
Total current'assets and current f
to

bus

obliged
'

the %

preferred

all

of

retired

not

shares

completed

now

that permitted the City of

it is likely that the city,
in order to have sufficient funds

For Our Own Account,

Union Cent. Bldg.
CINCINNATI

t

has

pany

accounts due

amounts

Union Com. Bid*.

several months ago, the com-

ers

operative in the last half of
compared with $218,914 or $1.06 1943, which resulted in earnings •
per share for the 1943 fiscal pe¬
equivalent to $1.17 per common
riod.
The report states that the
share; in the first half of 1943
Federal income and excess profits
earnings amounted to 97 cents per
taxes paid in 1944 amounted to common sham
During the first )
$1.78 per share as compared with half of 1944 capital expenditures
$2.01 per share the preceding year. of $8,587,537 were made, repre^

could be held to impair

that this decision

not

-

):

pair

.

seem

an-

ficult to understand,

less,

not

the

with

accordance

In

nouncement made to stockhold-

Ohio

Davis

corresponding

$8,700,000 for the
period of 1943.

limitation of 7.5 mills did not im¬

mills did not im¬

itation of 7.5

.

the

that

the

previously

COMMON

Request

company's cash balance as of)
30, 1944, including U. S.)
Government securities, amounted
The

Balance of

capital.

for

SECURITIES

1943.

share and accrued dividends,

all

the Akron

this lim¬

DIAMOND ALKALI

on

754, an increase of approximately.
22% over sales of $123,921,920 in"
the nine months ended June 30,

be used, to redeem at $110

operating

was

Net sales for
$156,558,-

previous fiscal year.

the nine months totaled

shares

sale

tion was not less than the previ¬
under a;:
ously existing statutory limitation
statutory tax limitation
of 5
under which Akron operated and,
mills for municipalities in Ohio,
therefore, the adoption of such
and the adoption of a tax lim¬

city

net profit of $2,139,664 for
corresponding period of the

.

that Akron could not levy

outside

repre¬

$714,692)

of

increase

an

conversion

preferred,

over,

Circular

the

each

with
cash adjustment for
dividend.
The
exchange
offer
expired
Aug.
16.
Proceeds from the
share

offered for sale shortly.1 More¬

OHIO

over

of

basis

a

on

of

shares

new

jLi'-s

sent

changing stock for the new 5%

7.5
city,

the

for

limitation

charter

today,

854,356, it was reported
24. These earnings

Aug.

outstanding 7% preferred stock

.

its

outside

including

mills,

$15,793,100 Federal income
profits taxes and $4,-j:

excess

760,000 reserves, amounted to $2,-r

funds will be added to working

limitation.

widened
until now the two indices of yield
are further apart than they have
spread

group

7% preferred stock.

:..

spring the City of Akron
levied an over-all tax rate of 30.50
Last

nar¬

Aug. 18, 1943, the
.38%. But in two short

and.

June

banking

cently

the : war "prosperity"
subdivisions has re¬

During

capital contribution of the

12,134 shares of $6.60, $7 and $7.20
preferred
stock
transferred
to
Ohio for cancellation on Dec. 31,

employees ;
the jobs

'% when

available for them.

were

On

stock—110,000 shares valued at
$4,516,521. It would also surren¬
der for cancellation 1,162 shares
of Ohio's $6 preferred stock and
a

lys-Overland Motors, Inc., for the
nine months ended June 30, 1944,/
after

Commonwealth

at least as numerous as

limitation
proportions that during this written into the Ohio constitution

such

Tele. CI 68 & 274

of not

headed by
to
approximately
$18,000,000.'
Westheimer & Co., Cincinnati, is
Company's
net
working
capi-'
making a public offering of the
tal
on
the
same
date,
with-;
unexchanged portion of a new
out post-war credit estimated atissue
of
35,000
shares
of 5%
cumulative preferred stock
($50 $3,713,796 and after payment of
in
accrued dividends)
par): of the E. Kahn's Sons Co. $563,155
amounted to $13,900,000,
\ at
before
$50 per share and accrued divi¬
renegotiation, as compared with)
dend.
-.

assumed

the explanation
activity, there is an¬

aspect

lected.

v

CINCINNATI 2

bonds would bear

rate

A

demand for mu¬ based upon the famous Hudson
nicipals was decidedly centered on Case decision of the Ohio Supreme
high-grade names, with second- Court, rendered several years ago,
grade bonds being noticeably neg¬ in which decision the court held

Stock Exchange

year

1943.:/:)

two months ago,

Cincinnati Stock Exchange
New York Curb Associate.
Dixie

im¬

more

whatever

deserves

MEMBERS

New

-

current

other

W. D. Gradison & Co.

.

.

But

Gibson Hotel L. T. C.
Income Bonds, Pfd. & Com.

,

well
is

present dullness

Buyers Still Shying From Second

Certificates

Carey

may very

ac¬

portant than the vacation period.

Common

...

Philip

the

that

due to circumstances

Sport Products Common
Paper

be

early German

an

instead of a part of the cost
cost-plus contract with the

Government,

t

predictions of

a

news

war

has been So favorable since that

140

TELE. CI

Whltaker

ers,

of

much longer, with
implication that new

usual

of the
commodity

of producing a

to be sold to individual consum¬

in Europe

war

of- the reverse),
payments are cut

they become a part

as

cost

September and

to slacken about the time of the

7

2, OHIO

1804

heavy matur¬

municipal bonds will be issued
in great volume when the war is
over, and that tax rates will prob¬
ably be lower in the post-war pe¬
riod, resulting in a greater supply
of municipals and a lower value
for their tax-exempt income, the
final result being lower prices for
municipal bonds.
It happens that demand began

KENTUCKY

off

last

not

the

OHIO

Day,

'. ■):•.' '■.'

likelihood that the

(instead

ers

when overtime

explanation
slackening demand refers to the

of

OFFERINGS WANTED

of

other possible

The

many .war-

communities,
when the
Government quits buying, when
sellers must compete for buy¬

after

Labor

BONDS

<

return

buyers

White

Austin

J.

MUNICIPAL-CORPORATION

new

.

in

busy

for bonds with

COMPANY

Member Cincinnati

of

shares

make

would seem advisable
happen to,)

it

collections

tax

newed demand
•

often empha¬

to consider what may

re¬

a

are

have so

we

sized,

for¬

looking

that

grade risks.

August.

These

have on com¬
"only second-

boom may

war

munities

nosticators are

,

issue and sell $30,962,000 30-year bonds and 180,000
preferred, borrow $10,000,000 from banks on 2J/2%
instalment notes and use $17,000,000 of its cash.
The new three-,
would

pany

the

tering of attention and

va¬

on

course,

OFFERINGS WANTED

Ohio

retire $52,446,000 of 4% bonds and 198,952 shares lot:
$6 and $5 preferred. To provide funds for the retirement, the com¬
to

demand on
equity by transferring to it all of
cations of in- quality and neglect of lower grade
the outstanding shares of Penn¬
vestors, which bonds
is
the result . of some
sylvania
Power
Co.'s
common
are usually, of
thought of the effect the end of
blame

approval of a refinancing

SEC

Ohio-Edison Co. has asked

The

time during this year. than 4J/2%.
quite possible, indeed,

perhaps more than possible, that
the real explanation, of this cen¬

are

laying

"

—
any

It seems

Some

names.

Cleveland 13^ O.
Bell Teletype
CV 496-497

*

Phone

demand.for Ohio

10 days ago there was. a keen

or

^(Incorporated)
*

*

municipals of high quality.
For a month or more prior thereto, there
was a noticeable neglect of second grade names.
However, during

are

OTIS & CO.
.

/

program

Mansfield Tire & Rubber
Preferred

Ohio Brevities

Municipal Comment

Stock

Common

Thursday, August 24, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

786

1.92
1.88

2.30

Jan.

1, 1940—

Jan.

1, 1939— 2.78

Jan.

1, 1938—

2.98

for

index
110
lower grade bonds.
§Spread bet««en high
grade bonds.
•V Foregoing compiled by
Cincinnati. '7^Composite

20

.7.
.A
>

7

1.09
-

bonds.

.87
'

tlO

liigh grade bonds..

grade and lower
7
• ■"
.7.*-.
J. A. White & Co.,
-7

'Ji

Volume 160

THE COMMERCIAL &

Number 4310

Status Of Foreign Dollar Bonds

•

787

Baker & Scanlan Tie In Denver M-S Race Clyde Porcelain Steel
Stock Oversubscribed

;

Slightly Changed In 1843

^

FINANCIAL CHRONICLE

Kobbe, Gearhart & Co. Inc. on
Aug. 21 offered 100,000 shares of
Clyde Porcelain Steel Corp. com¬
mon
stock (par 10 cents) at 75

Analysis By The New York University Institute Of Inter-

national Finance Indicates Approximately One Half In

£

Amount Are In

:
*

Default—Repatriation And Foreign Pur-

cents per

ing and the price of the stock has
now
advanced to approximately
$2 per share. Proceeds received
by the company through the sale

61.42% Of Total Bonds Repatriated
in full

In 1943 debt service has been paid

-

$2,594,551,760

on

or on

48.58% of the total of $5,340,733,585 of publicly offered foreign dollar
o.

.

standing
o n
Dec. 31, 1943,

according to
bulletin

a
-

tical

Analysis

f

Publicly

| Offered

For¬

eign
Dollar
Bonds," issued

Aug.;

14

by

t

Dean John

of

rector

T

Di¬

Madden,

the

C of

Institute

firm

Mr.

past

ducted his
Boston.

Hartford J&

of

name

the

In

V

contractual

preceding
American

almost

o

f

all Australian issues

i

r*

Dean J.

The

jj

t

Madden

T.

uon

proportion

.

of

full from 50.07%

-

,

in 1942

•

t n e

in

in
due

was

mainly to the fact that amortiza

.

tion
and
redemption
of fully
serviced bonds were greater than
repurchases and cancellations of

.

,

bonds in total

^

Data

partial default. 1
the status of all pub-

on

group

as

contractual

default of the
Japanese issues.
The amount re¬
ceived in cash in respect to 1943
was

tractual

The

?■

the

and

terest ; due

ceived for 1943

America

for

accounted

85.7% of defaulted bonds.

Of the

total Latin American bonds in de-

and Mexico account

fault, Brazil

for 26.5% and 31.7%, respectively,

-

The

formation

German

while

issues

represent

bonds

57.0% of total European defaulted
bonds.

The

11% and 3.3%, respectively, of the

bonds with

total defaulted bonds.

457,335,

1

-

-

The

geographical distribution
of foreign dollar bonds in default
as to interest on Dec. 31, 1943, is

or

a

'

An

analysis of interest defaults
by types of obligators shows that
bonds of national governments ac¬

42.0%, corporate bonds
37.3%, States, provinces and
departments for 10.8%, and mjinicipal bonds for 9.9%.
count for

for

■

"

The
&
J

amount

1943

for
'■

;

actual

'turn* in

amount

rate

interest

of

based

1943,

re-

the

upon

of cash interest received

the nominal
publicly, offered for-

coupons

of

on

eign dollar bonds outstanding

at

'

the end of the year;.was
;
;
4

cash

of

*•:v

1943

For

of

! turn

Latin

as

1.23%

the

con¬

received

was

bonds

as

on

1.24%

tively.

the"

rate

5.43%, respecEurope paid at
of 0.97% instead" of the
and

1943

In

vvV;!
Germany and Japan, which are
in complete default of debt servr
ice, account for 61.42% of total
principal amount of bonds re¬
patriated.
These two countries
loan contract.

_

•

repurchased $243,020,400 and
$195,181,080 of principal amount
of bonds, or 36.53% and 68.81%,
respectively, of their dollar issues

United

in .the

offered

publicly

States. In contrast, however,

ridge
made

Investment Bankers Association by
in

of

a

dead heat—which is

the

mounts.

Mrs.

carried

In

in

to

interest——

default

as

to

Secretary of the National

by

bonds

the

of

service

while

The

'

; '
also discusses

bulletin

of this

Far

any

of such security.

North

America

Total

—

47.81

117,600,000

2.12

100.00%

r

2.20 |

Amount

Far

East

North

—

America:.-

Total

(AN OHIO

5% Cumulative Preferred

Stock

■

$5,340,700,000

,

($100 par) pursuant

exchange for 7% Preferred stock

*Less

18,008 shares issuable in

to the

company's Exchange Offer, the terms

of which are summarized in the

Prospectus.

Price $50 per

share and accrued dividends :.

the Prospectus may

be obtained from such of the

41.3%-

289,200,000
?

44.4

.
.

Copies of

11.0

undersigned as are

*

3.3

86,700,000

registered securities dealers in this state.

;

"

" (V

100.0%

$2,628,600,000

ID

Contractual
Amount of

.

Received

"Rate of

5.41%

$276,023,000

•

in

Cash-

$18,852,000
13,927,000

6,io
5.55
4.13

Actual

-

,

5.17%

<

,

Per Cent

■

"

Rate

$118,664,000

;

of Return

Westheimer & Company

W.E. Button & Co.

1.23%

W. D. Gradison & Co.

0.97

11,485,000 /'• 2.21
74,400,000

^

of Average

Amount

Contractual

Interest Due




Company

CORPORATION)

Defaulted Bonds

1,166,600,000

Interest Due
$83,165,000
1,436,810,000",J'": '87,683,000
520,320,000" 1
28,859,000
.1,846,151,000
76,316,000
$5,340,733,000

'i:

under

The E. Kalm's Sons

Per Cent of Total

in Default

$1,537,452,000

-

be

35,000 shares*

n

Outstanding

Europe

could

100.00%

$5,340,700,000

/

'

Amount

cilities

($50 Par Value)

Per Cent

America

that

of its fa¬
effected in 30

48.58%
49.22 i

of Average

Latin

believes

complete, reconversion

' ;

2,628,600,000

'

$1,086,100,000

TABLE

Nominal

management

The

NEW ISSUE

re¬

$2,594,500,000

50.07%

520,300,000
1,846,100,000

-i

great difficulty, delay or expense.

as an

-Dec. 31, 1943-

1942-

1,436,800,000

:

„

produc¬

I

$1,537,500,000

1

America

East

peacetime

reconversion represents no

tion,

no circumstances to be construed as an offering
offer to buy, or as a solicitation of an offer to buy,
The offer is made only by means of the Prospectus.

security for salef of

ice adjustment plan and the Plan
of Financial Reorganization of the

Amount

Latin

for

of

essentially-

including the Brazilian debt serv-

Outstanding

Europe

vegetables.

to holders of foreign

TABLE

1

designed

facilities

are

days.

This advertisement is not, and is

developments of importance
dollar bonds,'

cent

$5,571,600,000

-

the

was

fully maintained.

118,000,000

Total

Securities Traders Association) is crown¬

ing the winners with a lei of

sinking fund

principal

or

Edward

payments, the re¬
Japan took place

fund

sinking

$2,789,600,000
2,664,000,000

full

as

nature
H. Welch of Chicago (wife of the

as

corporation

period the country was in partial
or
total default on interest and

-Dec. 51,

service

default

ending the annual Jackass Derby

practically unheard of in view of the

the

about ;-l8 pounds

foot for clay tile.

Inasmuch

Lough& Company, and Earl M. Scanlan, Earl M. Scanlan & Company,
history at the annual frolic of the Bond Club of Denver and the

<$>City of Montreal.

In

per square

DENVER, COLO.—Dudley Baker of Bosworth, Chanute,

to the

repatriation, which was
out mainly .during
the

German

TABLE

Debt

foof installed,

have

com-

pared to a contractual rate of
5.41%, while for 1942 the rates

accordance

in

interest

patriation

rate of re-

actual

an

American

were
•

as

consti¬

interest^ received

2.37%

against
tractual rate of 5.25%.

;

2.22%,

compared with 3the v contractual
rate of 5.17%. In >1942 the amount
tuted

paying
with the

bonds of countries that are

shown in Table II.

No. 5—Earl M. Scanlan

Welch, No. 6—Dudley Baker,

29.29% of the outstand¬

abroad.
of the
repatriated amount represent

total

compared with
Mrs. Ed. H.

3V2

only

weighs

pouqds per square

face value of $713,-

ing amount were held
Only $48,533,000, or 6.8%

It

sheet.

tion

of which

amount of dollar bonds

quickly installed over

preparation and delay, by
means
of a self-locating founda¬

wall

principal

$2,435,892,102

4Far East and North standing

only-

consumer.

existing walls without expensive

out¬

of 1943 these 23 countries had

ultimate

the

to

This tile is

At the end

dollar

American bonds represented only

-

kets

outstanding

in the United States.

the

manufactures

1938,

product which the company mar¬

repatriated or purchased by for¬
eigners of issues of 23 countries
out of a total of 39 countries still
having

acquired

originally

divisiop,

in

foreign dollar bonds

on

equipment,r assembly,

and Veos tile. The lat¬

from Mullins Manufacturing Corp.

in¬

obtained

has

Institute

*

■

ter

-of bonds

coupons

Railroads.

Louis

table top,

Dec. 31, 1943, are

on

St.

household

re¬

shown in Table III.

liable I. '

At the end of 1943 Europe and

Latin

v

amount

the

J ' The corporation is comprised of
five divisions — plumbing ware,

:
in¬

,

v

amount of

contractual

outstanding

'

:

&

amount

45.16% in 1942.

1943

In

was

tral, Wheeling & Lake Erie, and
the Cleveland, Cincinnati, Chicago

42.99% of the con¬
due, as against

coupons

Co.

name

agricultural section of the country.
It is served by the New York Cert-

5.55%, owing

of

rate

the- complete

to

for

/

try and in the most concentrated
and
diversified
industrial
and

paid

whole

a

summarized in

-

paid interest
Far

rate," the

licly offered foreign dollar bonds
of Dec. 31, 1942 and 1943, are

as

.

con¬

While

>

only 2.21% instead of the average

or

-

of

contractual

Eastern

reduc-

serviced

bonds

the

at

full

the

interest.

tractual

rate

North

The

of issues in both

group

paid

years

Europe paid 1.01%

year

of: 6.10%.

instead

used

changed to
Clyde Porcelain Steel Corp., with¬
out any change in management or
stock interests. The plant of the
company in Clyde, Ohio,, is stra¬
tegically situated in the Great
Lakes industrial area, the center
of the household appliance indus¬
corporate

the

rate.;, In

be

working capital.

Enamel

vidson

6.10%

1

University.
•

f

■

a

York

con¬

securities firm in

own
*

■ •

Co^

Hartford

$

will

shares

Upon completion of the present
financing, the outstanding capital¬
ization
of
the
corporation will
consist of 3,603 shares of preferred
stock (no par) and 700,000 shares
of common stock (10 cents par).
The company was originally in¬
corporated in Ohio in 1933 as Da¬

H.
in

will shortly f engage
the investment business under the

Finance

<■'

■

t BOSTON,*; MASS.—Ezra C.

Internation

New

these

additional

Forms Hartford & Co.
Hartford

e n

f titled "Statis¬
o

of

out-^

bonds

^

.

share. The shares were

oversubscribed. The date of offer¬

Continue—Germany And Japan Account For

chases

4.03

2.22%

August 18, 1944

L

*

'

'

•

Mutual Funds

|

Trend Index Turns Up
In the issue of June 29 we

reported here that a down-signal had

by the Stock Price Trend Indicator which is referred to
in this column.
We wrote, "The signal was given

been given

from time to time

while it does not preclude another week or 10 days
by past indications it puts the market on the
defensive beyond that point."
,
On Aug. 21 this short-term <S>
signal was reversed and both
the
shorter-term and
longerterm
indexes now
point up¬
ward.
This would indicate that
while
there
may
be another
week or two of consolidation in
the present trading range, the
on

June 27, and

of

;

further

advance,

Railroad

Equipment Shares

movement

significant

next

Prospectus

Group
yy;X'

-V.

on

Securities,

interesting to note how the,

It is

that

1944) "Quar¬
terly
Investment Company
Gauge." Barron's shows the re¬
sults for both a complete bull and
bear market.
Here are the fig¬
ures:

.X -XX
•

Bear
v."Market
Sep. 30, '39 Sep. 30, '39
' to
to
Bull
Market

.

.

,

.'.v
;

..X-X,

—16.8%

+32.2%

Dow-Jones

63 wall st.

new york 5. n. y.

•

—

*

«

—24.2

+24.4
X....
+42.9,

Composite Average
Shares

—

j

cannot

investment record

good

obtained

be

alone

diversification

matter

no

by

how selective;

it must be accompanied by con¬

and

experienced

market

man¬

Ju,ne

30,

point

of the

During this period per share

to

compared with a net
50.1% in the Dow-Jones

as

decline of

Lord, Abbett has adopted a uni¬

Wellington

form

for

shareholders

report ~ to

the three companies under its ac¬
15-year performance of that
tive sponsorship—Affiliated Fund,
fund in the June 30, 1944, report
Shares
and
to
shareholders.
Mr.
Morgan's American Business

the

comments

go to the
fund prin¬

mutual

the

of

ciple:

1

15th

completed

of operation.
Re¬
cently we have had many requests
to
explain the reasons for the
Wellington Fund record of per¬
formance
throughout
these
15
year

If I

years.

marize in

a

to try to sum¬
few words what might
were

have accounted for the successful

accomplishment of the Wellington
Fund

the

I

would

say

following:

it

was

due to

;

draw

to

common

"2.

Careful

and
,

pre¬

well

letter

of

this

In

Not

President.

the

subjects

of immediate
concern with respect to the finan¬
cial statements covered, but the
are

letter

then

afield to discuss
subjects of prior concern to in¬
vestors generally.
goes

Chapters

on

executive compen¬
laws and

sation under present tax

glimpse into the post-war future
both
make
for
stimulating and
constructive reading.

a

Net assets of'Affiliated Fund

of

indi¬
and

changes in ratios of port¬
holdings with changes

folio

in economic conditions.

"3.

A

continuous,

experienced

and alert management which

r

these changes

in the
character
and diversifica¬
tion of the portfolio and ac¬

made

X/'x

368,908, or $3.24
beginning of the
American

selection

securities

vidual

as

stocks.

national

tion

in

anticipa¬
of specific market de¬

clines.

on

for

here.

not

serve

year.

Business

Shares

re¬

Union Trusteed Funds

June

on

had total net assets of
$4,962,501,
representing
a
sub¬
stantial increase from the $3,296,598 at the beginning of the year.
1944,

La

Salle

&

and

desirable

with

South

Co., 209
Chicago,

Street,

the

mem¬

Chi¬

cago

Stock Exchanges, have late
on
Maryland Drydock Co.,

data

New

York

and

The

phrase "General Interna¬
Organization"
has
been

tional

the Moscow Declara¬

from

taken

tion and the Senate resolution.

being used for convenience.
The

had

from

the

firm

upon

quest.

indicates

I

Part

your

The Keystone Corp. of Boston
b0 CONGRESS

STREET, BOSTON, MASS.




nature

of

the action required to
to it.
:;x v

Securities Series
request

for

a;'method

establishment,

succession

its

and

its

structure

the

outlines

II

Part

BOSTON,

10 Post

Office
La

Square

(9)

St.

(4)

Salle

:x'/x:
Organi¬

Nations,

V would

1925-1937
give effect
tUx
Malcolm W. Davis, New York City

provide agencies

•

sion

and

their

Each

Part VI
between

to

re¬

operation
Clark M.
X

the

of

instrument

basic

small
number
of
represented, some
of them continuously, and which
would deal
with questions pri¬
marily
political.
The
Council
would maintain a special Security
Committee for preventing or sup¬
pressing the use of force. A Gen¬
Commission would deal with
committed

not

Council.

to

the

The Permanent Court of

International Justice would be the
chief

judicial

authority

of

the

GIO. The International Labor Or¬

of

the

budget of the GIO would
in the Assembly.

III,

on

the maintenance of

specific situation in
peace
is threatened,

the

it would have power to pre¬

the

scribe

military or

measures,

economic, which all States would
be obligated to take

of

Committee

it' would

its

on

act

direction,

emergency
move

peace.

would

for the main¬
The Security

own

under

but

be

in

the
any

able j to

initiative. States

^eoresented in the Security Com¬
mittee would be

obligated to take

^art in its action to the full

of

their

power

to

resources.

prescribe

A

extqnt

general

official

of

the In-

B.

Fosdick,

New York

City
Under

the

General

Secretary

League

1920

,,,

.

1

,

given power to shape the interna¬
tional law of the future in con¬

member

formity with the Charter.

tions

+

as

a)

obligations to keep the
which the Charter ordains;

of

the

entitled

State could

•

Council

associate with them
GIO....
b) The Charter would create
definite obligations for all States
with respect to the maintenance
of peace, but with respect to pro¬
moting
the general welfare it
would place the emphasis on con¬
sultative arrangements for volun¬

according

of the time.

to

the

wisdom

\

y

While the members of the group
were

not

unanimous

on

every

point, the Design represents their
general views at the present stage
of their deliberations. The follow-

limitations ing men, among others, took part

United

Nations

.v

,.

Herbert L. May, New York City
'
Vice-President of the Perma¬
*

nent Central

Opium Board and

Acting Chairman of the Drug
Supervisory
Body
affiliated
•with the League of Nations
Philip C. Nash, Toledo, Ohio
President of the

University of

Toledo

Formerly Executive Director

t

of the

League of Nations Asso¬

ciation

.

.k.,

..

George Rublee, Washington, D. C.
:

,

X...

With

the American Commis-

sion to Negotiate Peace, Paris,
1918-1919; Member of the Allied

•.Maritime

Transport

Council,,

1918-1919; Legal Adviser to the
American

tary cooperation among States.

future

the

Conference^ 1944
-

as may

procedures, and methods by which
solutions might be sought in the

of

Nations Monetary and Financial

for creating the

c) The Charter would not at¬
tempt to lay out ready-made so¬
lutions of international problems.
Instead, it would create agencies,

x

International^

ax?$. Rehabilitation Ad¬
ministration,
.1943;
Assistant
Secretary (general of the United

upon

others

t--

mem¬

Relief

extension of in¬

which events have placed
responsibility for the future—bv
the
United
Nations
and
such

.

Law, Columbia University
Secretary pro tempore of the

like some of the

great extensions made in the past,
could be effectedi by the States

Justice;

of

Professor

accredit

organized in the GIO and the
would be the basic in¬
strument of the law of that com¬

,

1919, 1920, 1924

to

Charter

an

[

Cambridge,

Philip C. Jessup, New York City

be

Such

Hudson,

,,With the American Commis¬
to Negotiate Peace, Paris,
1918-1919;
member
of > the
League of Nations Secretariat,
1919-1926; legal adviser to the
International Labor Conference,

representatives;
no
States
would be encouraged to form a
rival and hostile organization be¬
cause of their being left out. The
whole community of States would

ternational law,

O

sion

its

munity.

Rehabilitation

Arbitration

Every State would have the

ment

•

of

Na¬

of the Permanent Court of

ber

general

be

and

International

of

aspiration but as a fundamental
All existing States would
at all times be comprised in the

would

Relief

United

the

Massachusetts

The universality of the GIO

State

of

1919-1928;

Secretariat

Judge of the Permanent Court

a

contemplated, not as a goal of

peace

the

of

Administration, 1943

whole places
emphasis on three features to
which
special attention is di¬
Design

Secretariat,

Council

for Manley

guarded ^ procedure
amending the Charter.
The

the

a care¬

fully

-

New York

Official of the League of Na-^

international

provide

of

1919—

Nations,

Of

Huntington Gilchrist,
City
tions X

Part VIII would

of

Director

to

ternational Federation of League
of Nations Societies
V
\ -4

representation in the Assembly,
though only a recognized Govern¬

relatively

Association;

law, and the Assembly would be

the traditional rule of unanimity.

a

;,

,

Commission

Formerly
'

international law. All agreements

each

Council in which

,

between States would be

GIO.

a

,4f

Study the
Organization of Peace : ,: ,'

of

required
to be consistent with the Charter
of the GIO which would be the

Co¬

"

-

,

Eichelberger, New York

Raymond

supremacy

'

City '

tions

Part VII sets forth measures for

the

International

Intellectual

on

Director of the League of Na¬

of

safeguarding

International

the

Committee

States,

endanger peace.

the

of

mittee

concerning agreements

registration

of

member of the Executive Com¬

the

revision of agreements not

Edu¬

League of Red Cross Societies;

a

dictates of
humanity and justice in dealing
with its own population, and spe¬
cial provision would be made for
giving attention to the problems
of dependent peoples.

and

Carnegie Endow¬

Formerly Associate Secretary

ef¬

have

would

State

observe

to

duty

the

General

Commis¬

coordinate

Intercourse

of

ment for International Peace

enumer¬

are

General

the

would

forts.

which

of

cation

Assembly
to create
special agencies in various fields,
be

of

Associate Director of the Di¬

vision

welfare.
The
empowered

general

would

proposed Organization. It
would have an Assembly in which
all
States could
be represented

the

Council's

Corporation

BROADWAY, NEW YORK, (5)
ANGELES, 634 S. Spring St., (14)

CHICAGO, 208 So.

the

-

Official of the Health

concept.

League of Nations.

tenance

National Securities &

LOS

of

Director

zation of the League of

procedures for promoting the

is

and

Research

and

composition, r

deal with any

l20

be obtained, from
local investment dealer or

the

and security, would confer
broad powers on the
Assembly
and the Council. fThe latter would

Prospectuses upon

York

New
-V--..-U;/;;7

Milbank Memorial Fund

rected:

Part

Series

x-XX^r^xgx

Boudreau,

Executive

to

with any decision, the
Council would have power to take

the proposed Organization, setting
forth
its
general purposes,
its

peace

.

may

eight

of

parts.

be vested

B-l, 2, 3 and 4 in Bonds

Prospectus

consists

Design

which

Series

It

is employed not as a name but as
a term of refence, the initials GIO

...

S-l, 2, 3, 4 in Common Stocks

dealing

of

ways

Nut

follows:

K-l, 2 in Preferred Stocks

instru¬

ganization would become a part
Corp.,
and of the GIO, and other existing
Struthers Wells Corp.
Copies of organizations might be adaoted to
this interesting information may the structure of the GIO. Control
Stop

Trust Funds

Series

to

an

them.

matters

of

Participation in
as

intended

is

ment, but as an indication of the
outstanding problems which pre¬
sent themselves and of possible

eral

Situations Of Interest
Cruttenden

Custodian Funds

investing their capital

the

States would be

be

Certificates of

It

$4,460,629 six months earlier.
30,

G.

CityX

comply

is

draft of

a

as

is

which

Charter

a

It would have

Elastic

Keystone

Association

•

the

and which would not be bound by

share at the

per

bers

"Throughout the past 15 years
it has been demonstrated that a

:

should fail

State

a

Formerly

Frank

ment of situations which threaten

and
result

The

law.

ported net assets of $4,948,311 on
June
30,
1944,
compared with

cumulated cash reserves for
reinvestment

If

;. v

.

President of the
Pennsylvania League of Nations
;

any

interested in inter¬

the

two

Law

Americans

dians actively

of

as

to

Cana¬

recently

hundred

outstanding capital stock.
This
compares with net assets of $12,-

bonds

decide,
pending before

not

Court.

to deal with,

deals with the
treaties, with the
wholly
performed, and with the readjust¬

of

issued by

International

"The

Future"

Broad diversification of the

stocks

Advisory Board of the Guggen-

the Council

and

power

necessary

judg¬

several months, they have

to the

dervalued

have

would

Educational

the

of

heim Foundation

v

general jurisdiction over

a

ated,

conferences held over a period of

30, 1944, were $14,646,388,
equivalent to $4 per share on the

ferred

Chairman

pacific settlement
confer on the

disputes,

examples

might best insure the effi¬
of a general international
organization. In a series of fifteen

portfolio where substantial
profits were realized in un¬

"1.

Justice

legal

Trustees;

retary of the Rhodes

proce¬

Permanent Court of International

block

to

cacy

June

.

endeavored

have

tions

outstanding feature is

report the
the

Funds.

Trusteed

Union

only

'

*

"Your Fund has now
its

of this

"why"

performance

superior
heart

the

on

the

American Sec--1

Advanced Study;

of disputes. It would

Part

their private
capacities, a group of Americans
who have had experience in the
work
of international organiza¬
in

solely

Design

if

%

President of

Fund, likewise goes
into considerable detail regarding

people of this and

the

offered

%

Walter L. Morgan,

organization have therefore

sought
upon the experience of
agement."
the past as well as upon the nu¬
A good measure of the perform¬
merous
suggestions which
are
ance
of Wellington
Fund is its
current; they have been aided
record from the Sept. 3, 1929 high
especially by the statement on
tinuous

Composite Stock Average.

.

in

followed

be

to

ment

of 14.9%

5.2

lines

out the lines which in their

asset value showed a net increase

Fully Administered

terms.

The

for

dures

provide

for

Institute

the

of

Director

would

IV

organization in. identical and if
' ■ *' • dispute

national

Acting

1944.

Jun. 30, '44 Mar. 31,'42

■

Average of 32 funds_

necessity of a general inter¬

the

terest to

GROUP, Incorporated

a

31,

(July

Jersey

,

in

revealed

as

group,

Barron's

and security." In a resolu¬
tion of Nov. 5, 1943, the Senate
of the United States recognized
peace

become a matter of immediate in¬

Request

DISTRIBUTORS

on

Shares,

of international

maintenance

the

Part

Aydelotte, Princeton, New

Frank

with respect to armaments would
be conferred on the Assembly.

other countries.

Fully Administered
stresses the performance

mailing
of

example, in

for

Group,

utors

ley O. Hudson:

1

Inc.

fund sales"
literature has shifted away from!
"romance" in favor of "results"
during
recent
years.
Distrib¬

preparation of the Design, under
the chairmanship of Judge Man-

(Continued from page 778) ;
principle of the sovereign
equality of all peace-loving States,
and open to membership by all
such States, large and small, for
the

on

tional

mutual

in

emphasis

Suggested Plan For A General y
International Organization

building such a general interna¬

A Class of

should be upward.

tlfe conferences devoted to the

in

BM

|hm|

MB

Thursday, August 24, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

788

Delegation

at

the

/London Naval Conference, 1930;
Director of the Inter-Govern¬
mental
.

Committee

on

Refugees, 1938-1939

James T.

Political

.,v,

Shotwell, New York City

Professor Emeritus of the His¬

tory of International Relations,Columbia
of
on

University:

the International
*-■ Intellectual

member

Committee

Cooperation;

Chairman of the Commission to

the
Organization
of
Peace; Director of the Divis;on
Study

of Economics and

History of the

Volume 160

J'national Peace (>* '/((Vi
! sion

\ 1918-1919
Preston

'

•

|

"

•

:

A
Council,
meeting; at.
stated intervals and as occasion

\

•;*
Euro-

-

|

tional

*

Washington, D.

f

; ;•

initial period

an

"

;:
i

International

of

fi

J

continue

;

(GIO)

should

be

'

of the GIO

all

to

applicable

•

i

a)

'

times
States,
•

should pro-

>
1

'

should

Charter

for a'

II.

The principal organ of

cided

Structure of the GIO

a)

6.

GIO

i>
;

be

should

an

annually

8.

a)

occasion
Ms to i •

frequently
"'((> require." *
b)

the

may

t;

P'

b)

iv.'1- tives.

d)

:

..

have

in accordance with
rules previously adopted, to
restrict the participation of a
State's representatives under
power, v

'(

■V

certain

e)
;<■

?

the Assembly

vote

;

c)

.

,

.

-

:i.

respect

to

should have one

(

be

-certain

and in some cases

,

*•
j

„:j. s
.

r

than

,

its

this major-.,:




A

be

the
f

(:

General
v f;

13.

Court of In¬
be

:
.

;( b) The Assembly should have
power to adopt general provisions for preventing and sup¬
pressing the use of force by
States in their relations with

"

The

other States.
.

Charter of the GIO.

b)

.

:

.

agencies of or associated
League of Nations,

by appropriate

such a sit-

Council

the

This advertisement is

neither

an

power

(Continued on page 800)

•

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

buy any of these securities.

The offering is

New

(

Issue

August 22, 1944

...»

$2,250,000

Security Committee
be composed of the

Central Soya Company,

Inc.

3Vi% Sinking Fund Debentures
YYv-vY;V-\'YY'"

.•

'v.:5

(j5--*

Dated August 1,

1944

•"

v

,v"

Due August 1, 1959

..

vote,

majority

simple

Price 100%

Committee.

•

•;

•

•

and accrued interest

which this announcement

-

■

Copies of the Prospectus may be obtained in any state in
is circulated from only such of the several Underwriters
registered dealers in such state ■

A

Council. *
.

-

b) The

General

Commission1

should. consist, of
-

Glore, Forgan & Co.' §j j

question.

General
Commission,
meeting at stated intervals
and as occasion may require,
should be created to deal with
international
matters
other
than those committed to the

-

as are

occasion in which

unauthorized use of force

the

repre-

The First Boston

Corporation

should

to prescribe the
military and economic meas¬
ures to be taken by States for
have

and

arrangements

In dealing with

uation/

with

the

first Secretary Gen¬
of the GIO should be

is jeopardized.

world

the

'

The Assembly should have

to adapt to the. struc- ,v
ture of the: GIO any special

should

standing between peoples on
which peace depends.

*

power

b) The
eral

world

should have 17. a) The Council should have
;
power,' acting in accordance
power to determine what gen¬
with policies adopted by the
eral
international
organiza¬
Assembly and subject to gen¬
tions with specialized respon¬
eral control by the Assembly,
sibilities
should
constitute
to deal with any specific sit¬
parts of the GIO,
and to
uation in which the peace of
adapt their basic instruments
to the

of the GIO.

officer

ter

a) The Assembly

b)

administrative

to deal with any mat¬
affecting the peace of the
or
the
good under-

power

terri-

.

The Assembly should have

a)

(>

Assembly should have power
to transfer the seat elsewhere.

simple ; majority

chief

the

in
with
other
for carrying out

required for decisions by

is in

a)

9.

in.th^.As-

subject to immediate
reference to the Council.;

i

Gen-( j
16.

be at

of
force
another

by

by

tee on any

matters,

xiuUj

•>

eral.:.(i•
f) The seat of the Secretariat
should

be
an

•((State,

source

subject to
by the Secretary Gen-

waiver

should

..use

it

pro¬

by ( force

State

a

oppose

against

made

-

-

100,000 inhabitants
counted for, any

majority required
sembly.

;

a) A Secretary General

suppressing

A State should not have a
vote in the Security Commit¬

should *mt be

.

^

d)

represented in the Council or
of
the
States
continuously
represented in the Council.
The votes
of States having
less

for

the Security

ity should be required to in¬
clude the votes of the States
•

any

to

unauthorized

.

,

tory of all States,

-

the votes of the
States
continuously
repre¬
sented in the Council, should

f)
•

by

including

in

Unanimity should not be
required for action by the
Assembly; a special majority
vote should be required with

are

they - should
neither seek nor receive in¬

that

free

represented in the Council.

conditions.

Each State represented

vide

and

from

■

Charter should

of the
Council
charged with re¬

and

The

they

which

of

nationals,

The

b)

the

by

matic immunities in the

spe¬

chief judicial organ of the

representatives of the States
continuously represented in
the Council, and of the repre¬
sentatives of such additional
States as may be selected by
the Assembly acting by twothirds
vote
including
the
votes of States continuously

■"( ((

The Assembly should

a

relations

should

have

in

Permanent

The

measures as au¬
the Council or
the Assembly.

to pass upon the cre^dentials of States' representa-

*"•

the

by

ternational Justice should

of force by States

use

thorized

power

'

cided

preventive

appropriate.

The Assembly should

be

thority.

Security

permanent

A

States

to

considers most

c)

a

|

their

appoint three repre¬
sentatives irr'the': Assembly,
and should .bd'!free to select
them in the manner which it

'd

:

as

10.

all questions
should be de¬
simple majority

sponsibility

Each State should be en¬

titled

by

should

mort

'

'

.

Committee

the

Assembly,
and

-

in

.11.

vote.

meeting

the States

i) In principle,

Nations.

;

'

unauthof force is in ques-

procedure

control

behalf

and with its au-

the GIO

of

e) The members of the Sec¬
retariat should enjoy diplo-

not be

vote.

.

other States, except on

Secretary
;

any

force in its relations with

use

eral..(■;/; ,(,-/■

i) In principle, all questions
of procedure should be de-

\

GIO..

of

■

Commission.

be required to

A State should not have a
in the Council on any

tion.

of

from any threat to

and

force

be

should

other than the Secretary

vote,

action

for

represented

the

succeed

( "

one

required to include the votes
of
the
States
continuously

orized use

its establishment,
the League of

upon

shall

( (;

majority vote should be

occasion in which its

provide

the

by

structions

:

.

-

matters,

represented

ap¬

the

Secretariat

States

organi-

specialized

Unanimity should

cial

vote

procedure by which the

GIO,

(•

.

h)

A

The

5.

have

required

this ma¬

include the votes of

list
annexed to the
('Charter
should
name
the
States existing at the time.
b)

-

cases

some

continuously
the Council.

of

withdrawal

expulsion or
any State.

•

h)

certain

to

in

jority should

made for the

be

dent

required with respect to cer¬
;(v.
tain
matters,
and in some
cases this majority should be

and

be

Charter should pro¬
claim the duty of each State
to refrain from any use of
The

a)

d) The members of the Sec¬
retariat
should be indepen¬

General, Commission;

respect

all

comprise* all existing
and hence no provi-

should

-;ision

'

Charter

The

vide that the GIO shall at

should

by

Security

and

Peace

15.
1

.

(should

Unanimity should not be
required for action by the
Council; a special majority
vote should be required with

'

;i(

com¬

General.'

asso-

•

Maintenance of International

individual

of

appointed

g) Each v State v represented
in the General
Commission

g)
;

III.
geographical basis as I

a

the

of

vote.

-

■

\

\

-

i

should include pro¬

the expenses

for

on

Secretary
General with the approval of
the Council; other members

on

-

GIO

visions for reimbursing States

-

basis

pointed

representa-

the

by

the budget of

incurred in
their representation in organs
or agencies of the GIO.

Secretariat

"

I;; certain named States.
4.

zations (-having
.;; responsibilities, v

/

(

to

power

itself

Assembly,

:

The higher officers of the

c)

established

be

to

the

possible.

Each State represented in
the Council should have one

(;

should -be' come operative upon
its ac¬
ceptance
by
a
prescribed
K number of States, including

i

:

.

v/ith

tives of international

(

•

f)

i

■: Y v.

Charter

b)-The

State.

-

have

should

(ciate

importance

lations

petence and recruited upon as
wide

accordance with regu¬

c) In

and

retariat should be selected
the

of
this obli-

consequences

gation
;

"

.

Commission

General

The

f)

affecting the interests of that
,

,

or

deliberations

its

established

be

the Assembly

failure to discharge

organiza¬

placed under the direction of
the Secretary General. .
b) The members^of the Sec¬

matter specially affecting
the interests of that State.

to participate in its deliberations on any matter specially

v;

such other States as may as¬

posed; .j

the

to

should

the

mine
(

should
be
contribution

have power to deter¬

should

Secretariat of the GIO

A

and

promptly,

v

General

•

State

bound to pay its

(

tions, public and private.
a)

Commission

General

Secretary

contrib-

should

States

b) Each
;

., ;.

international

ous

any

-

sociate with them for the pur¬

which

to

of

ute. ; ; ■■

: *

contacts of the GIO with vari-

12.

be entitled to partici¬

in

pate

*

by

by the United Nations and

*

should have responsibility for

be

,

should

*

s

Charter of the GIO
should be launched, on behalf
of the community of States,
The

'and
*

.

to

continuously

-

I);, d) The

;

(>

the

in

the

to

Subject

priate.

of

more

or

one

j

;: j

periods of time
selected by the
Assembly, with reference to
the importance of their role
in international affairs.
e) A State not represented

( should

of their role and responsibil/*
; ity in international affairs,
e) A State not represented in
the Council should be entitled

strumer-t of international law.

;

3. a)

method?

ies any international matter
which he may deem appro-

|

;

more

limited

for

represented

\r

reference

the basic in-

States as

decide upon
providing funds,
to fix the proportions in

the- GIO,

*

and to lay before these bod-

after the j •
initial pej

represented

be

Commission

periods of time should be se¬
lected by the Assembly, with

estab¬

be

should

lished by a Charter
t

,

peace

be

to

,

foregoing
provision, the States to be
represented in the Council
continuously or for limited

peace

The (GIO

(2.

'

;

Council,

the

Assembly,

the

■ r

,

the foregoing
•
provision, the States to be
; represented
in the General

;

d)

maintain inter-

to

of

|

interests in interna-

d) Subject

the Assembly on account of
changes in relative
responsibility.

.

and security
and to promote the well-being
of all peoples.
national

;

.

GIO

the

of

Nature

I.

;

ticipate in the deliberations of

I

<

to deal with all ques.tions relating to the budget of
power

.

:|- and the General Commission,

"position;

essential

The primary aims

1.

j

replaced by the
'Assembly on account of essential
changes
in relative

period until one or more
of them may be replaced by

ORGANIZATION

TIONAL

a) The Assembly should have

'

may be

repre-

itial

INTERNA¬

GENERAL

14.
i

,

j
j

i

designated in the

expiration' of the

expiration of the in¬

° after the

:

THE

Y

on

c) The
Secretary
General
should be authorized to par-

i ;;

Com-

having the

as

"

for the
should

responsibility

r* maintenance

OF

CHARTER

A

FOR

DESIGN

be

to

'

Aug. 1, 1944"

Assembly

the

elected-by

Organization should consti¬
tute a part of the GIO.

_

the nomination of the Coun-

.

~

International.. Labor

c), The

;

;•
.

rv

tional affairs should continue

"('(.to

in the Charter as having the

«'chief

Langdell Hall, Cambridge, Mass.

..thereafter,
the
General should .be

States

to; be ;repre-

States

*

Charter

-

Charter; the States designate;d

1

;

Secretary: Louis B. Sohn

i

,

i

Law, University" of Chicago:'" ■

;

c) The

-general

'

.

sented in the Council during
the initial period of five years
should be designated in the

,;

x

Professor

number of

'

States

The

c)

Quincy Wright; Chicago^ Illinois
.>

' j

;;Yfifteen.' ; '''riod until
them

Chairman.♦ -of the- United

J Nations Information Board,
1942-1943

i

i

*;( seven States

•

I

i

in¬

the

yearsp

acquire properties held by

the League of Nations.

-

•

years the Assembly
'A**: With the American Commis¬ j (• should have power, acting
! r* with the concurrence of the
si' sion to Negotiate Peace, Paris,
? 1918-1919; official of the League ; |! r Council, to increase the numS '
ber of States represented to
*1942;

the

concurrence

sented in1 the' General

'Vf; of five

'

five

i

to

to

for an/initial period of

Secretary

;

-

jr States; After

;

'

'V^c

pf(Nat-oas^

■

mission during the initial pecance."
w
r((•(*
b)- The Council should consist Y ; r riod of three years should be
!r r of the representatives of 11 "f'~\ 'designated in the Charter; the

4

Arthur Sweetser,

;

/

signifi-

of political

:

represented to twenty-one.

;•-

are ;.

(which

matters

chiefly

( ;('(■'•((•>; "' '/C;Y ■:: <■■■"
J'rl With the' American Commis-

| sion to Negotiate Peace, Paris.
(| 1918-1919;v.
;
; i;

Charter,

serve

:i

of

the

crease

created to deal with interna-

p

Michigan;

V (

require, should be

may

?

General" Commission, " to

with

a)

7.

-

History,; University • of

pean

^

] v

iioOisV.v w-;:
of .Modern

Professor

-

!,■

W. V" Slosson,■» * Ann-Arbor,

..|Mxhigan
I

'

Negotiate Peace, Paris,

to

the

in

named

■

.

\

,

With the American Commis-

•

.

;
sentathres (of fifteen States.
g) In principle, all questions
'U % After * an >: initial
period of
of procedure should be decided -by' a ^simple majority -*,r * three - years,- -the > Assembly
;:
-should
have
power,
acting
vote.
•;,■*„^

Carnegie Endowment for Inter- * ;V

•:

789

CHRONICLE

THE COMMERCIAL & FINANCIAL

Number 4310

'

A. G. Becker & Co.
Incorporated

Bacon,Whipple & Co. Kebbon, McCormick & Co.

Reynolds & Co.

THE COMMERCIAL & FINANCIAL

790

The Securities Salesman's Coiner

INSURANCE St BANK STOCKS
\

Bought —Sold — Quoted

<

ANALYZED

REVIEWED

-

1

,

BUTLER-HUFF & CO.
St., Los Angeles

210 West 7th

,

WIRES

PRIVATE
New York

Chicago

-

TELETYPE

San Francisco

-

A.

L.

2TO

>-

.

i

280

A.

L.

-

Seattle

-

Bonk and Insurance Stocks
By E. A. VAN DEUSEN
of

stocks

The

sound

the

institutions

banking

performers

the more conservative equities, and as market

among

classed

usually

are

they are usually not especially volatile.
Bank operations, though
reflecting general trade and business conditions, are nevertheless,
more stable than are those of the average industry and business, on
account of their broad diversification of
-

There

stocks

bank

when

move

Bank and

Stocks
Inquiries invited in all

for the industrials,

40% greater move.

Laird, Bissell & Meeds

-

It

is

Telephone: BArclay 7-8500 77
Bell

a

Industrials

Dow-Jones

1-1248-49

Teletype—NY

(L. A. Gibbs,

7':

,

Exchange

NEW YORK 5, N. Y.

Manager Trading Department)

interest to

of

now

Stock

York

New

120 BROADWAY,

point
out that the previous high of the

;■

!

Unlisted Issues

78.5%, compared

period

the

ing

was

presented, which shows the
asked prices of 15 leading New
York City bank stocks at their
1942 lows and also as of Aug. 14,
is

194.4

March 10, 1937, a level which
was
34.1% above the
144.9 of
on

Aug. 9, 1944. The previous high 1944, together with' the percent
of the bank stock index was 154.5 appreciation of each.
It will be
ip. February, 1937, a level 46,2% noted that the average apprecia¬
above the 105.7 of Aug. 9, 1944. tion was 80.1%, that the maximum
Thus bank stocks would have to appreciation was 97.8% by Public
show a 35.5% greater gain in or- National Bank & Trust, and that
dejr to reacfi their 1937 highs than the minimum appreciation was
would industrial stocks.
7^7 V 43.6% by United States Trust, v
To turn to the performance of
TABLE I
individual bank stocks, Table I
Asked Price
%.
*

■

-

1942 Low
Bank

of

Bank

Manhattan.

25

Corn

__

Exchange

First National

.

_______

Guaranty Trust
Irving Trust

—

.___

J.

______

Manufacturers
National

Trust

________

City
_

United States

Trust

I

it

is

of

interest

be

to

consider

94.7

53 J/8

61.0

51%

97.6

341%

Bank

of

Bank

of

Central

Chase

53%

93.7

39%

88.7

45

97.8
43.6

stocks

New

First

—

York Trust—————

Public

—_______——

United States

Trust,——

Average

21.7

/•

86J/2

59.4.

It

59.3

issue of 35,000 shares of 5%

61.9

ulative

49.6

2

15.4

20%

25.3

dends.

71

32.1

61%

55.2

2,710

:

58.9

394

164
58

28.9

46.8

observed

Co., Fields, Richards & Co., Chas.
A. Hinsch &
Co., A. E. Aub & Co.,

45.6%

■

be

that

the

Maximum

Manhattan, and minimum is 15.4%
fo.r Guaranty Trust.
Naturally.,
there is nothing certain or abso¬
.

about these

potential
percentages; some

others

will

not.

But

stocks

highs, while
when they

considered together with other
data' which have been given , in

18 Clinton St., Newark 2, N. J.
MArket 3-3430

N. Y. Phone—REctor 2-4383




this

such

column
as

growth

they

are

from

time

£8,780,000
6,150,000

Fund

Reserve

Liability of Prop— 8,780,000
£23,710,000

Aggregate
Assets
Sept., 1943

30th

SIR

I

_£187,413,762

____

ALFRED

DAVIDSON,
General Manager

Head Office:

,

K.B.E.,

George Street, SYDNEY !

The Bank of New South Wales is the oldest
and largest bank in Australasia.
With over
800 branches in all States of
Australia, in
New
Zealand,
the
Pacific

Islands,

London,

it offers the most
banking
service

efficient
traders

and

and
and.

complete

to
Investors,
interested in these

travellers

countries.

LONDON

OFFICES:

Threadneedle

29

47

Street,

E. C.

Berkeley Square, W. 1

Agency arrangements
throughout the

with

U.

S.

u

Banks

A.

NATIONAL BANK
of EGYPT
Head
Commercial

Office

Cairo

Register No.

F1JLLY PAID CAPITAL
RESERVE

FUND

LONDON

,

,

£3,000,000

AGENCY

Branches in
,:■>

Cairo

£3,000,000

,

and 7 King William

6

.

1

Street, E. C.

all the

;

:

principal Towns in

to

time,
earnings, book values,
of earning
assets, etc.,
of assistance in selecting

those stocks which appear to have
better than average possibilities.

NATIONAL BANE
of INDIA, LIMITED
to

unexchanged 5%

>

Head

preferred stock

will be used to redeem at $110
per
share and accrued dividends all

Paid-Up
Reserve

en¬

The

half

for

more

war,

than

half pounds

a

a

::

and Executorahipt <7
also undertaken
r.
f

million

A. B. Meacham Dead
<

contracts call

million

of

Trusteeships

pounds of meat each month. Dur¬

ing the present

£4,000,000
£2,000,000
£2,200,000

Capital
Fund

conducts
every
description
banking and exchange business

/

a

26, Bishopsgate,
London, E. C.
;•

Bank

War I the company furnished the
with

-

Office:

Subscribed Capital.

gaged in the meat packing busi¬
ness
since
1882.
During World
Government

la

Uganda

in India; Burma, Ceylon, Kenya
Colony and Aden and Zanzibar

working capital.

E. Kahn's Sons Co. has been

Government

Brandies

unexchanged shares of the 7%
preferred stock. Balance of funds
will be added to

the

Colony and

and

Funeral

Meacham,

a

years

month; during the

of

services

who

for

Alfred

retired

service,

from

after

B.
36

Brown

Brothers Harriman & Co., in
1942,
were held
yesterday. Burial was

first six months of this year, the

Clair S. Hall &
Co., all of Cin¬
average amount of meat supplied in family plot at
Passumpsic, Vt.
cinnati; The Ohio Co., Columbus;
each
month
was
O. Loewi & Co.,
approximately Mr. Meacham who died from' a
Milwaukee, Wis.;
heart attack on Monday, was born
Wm.
J.
Mericka
&
Co., Inc.; 3,500,000 pounds.
at North Scituate,
Mass., and was
Cleveland, Ohio; Farwell, Chap¬
graduated from Brown University
man
& Co., Chicago, 111.; Fried*
man,
Brokaw
&
Samish,
St.
Louis, Mo., and Piper, Jaffray &
Hopwood, Minneapolis, Minn.
I

appre¬

are

1891

The other members of the

underwriting group are: W. E.
Hutton &. Co., W. D. Gradison &

59.6

2,150

will

ciation

cum¬

preferred stock, $50 par
value, of the E. Kahn's Sons Co.
at $50 per share and accrued divi¬

will exceed their 1937

Established

headed

by
Westheimer & Co., Cincinnati, is
making a public offering of the
unexchanged portion of a new
group

77%

potential appreciation is
potential ap¬
preciation is 66.0% for Bank of

lute

J. S. Rippel & Co,

banking

65 J,

average

Bank Stocks

A

86

45.6%.

Municipal Bonds

i

42.5

7_-

—______________

New Jersey

;|

153 J/2

341 Va
16 J/2
53%
39%
102%
45
1,465

:

__

66.0%

550

1,705

Irving Trust
Manufacturers Trust
National City ■;

fol¬

Apprec.

41'/a

Capital

Reserve

EGYPT and the SUDAN

Xahn's Preferred

53'/«

—_____——

(ESTABLISHED 1817)

Paid-Up

Kenya

51%

National

BANK~OF
NEW SOUTH WALES

Bankers

41J/o

___________

Guaranty Trust

High

Ltd..

Australia and New Zealand

No other business in the nation needs a good
public relations
campaign as much as the securities business
no other business is
so completely
lacking in foresight, cooperation and progressiveness
along this line as is the? securities business. It seems the only thing
that most of us can do is bellyache * about; a lot of
things wo
don't like, and to be truthful about it,
nobody outside of the industry
itself seems to give a damn — and can
you blame them?
;

'jo

1937

452

___—____—<,———

a

'

Stock On Market

77 54%
107%

_—

__

order

II

25

__________r_:.

Exchange

In

present
to show

Table II is presented as

_

York________._____________—

Corn

level.

the

from

Bank,

—

80.3

102%

8-14-44

Trust

Hanover

Chemical

New

71.4

Asked Price

Manhattan^.-—.i—_—l

Bankers

79.3

16 J/2

80.1%

TABLE

<g>

as

are

properly presented.

69.7

1,705

1,465

potential appreciation of each of
-

nation

issues, how all firms that serve the individual
striving to assist and help the public to receive proper
information and sound investment advice, and subjects
along this
line which are not only educational but extremely
interesting if

lows:

the

the

*

41 J/8

15

this

of

thousands of unlisted

market

expected to
reach their 1937 highs before the
present "bull" market terminates,
reasonably

may

welfare

are prepared
intelligently.
Try as it does, the SEC can't
protect the ignorant from their folly nor from the eventual losses
to the nation as a whole, which always follows a wild spree of
speculation that is based primarily upon emotionalism and greed.
The investment banking and securities business should set
up a
nationwide campaign of educational enlightenment of what the busi¬
ness has done for the country in the creation of
progress and of jobs,
in supplying the capital and gathering it together from all
parts of
the land, how the various securities dealers create markets for

investor

___

the

the

handle their funds

to

79.2

22%

Assuming that the bank stocks

creating
to

Deacon's

Glyn Mills it Co.

does, how
employment opportunities

sufficient education in economics and investments and

68.9

—1,020

Average

Associated Banks:

Williams

bring better dividends, providing, of course,
job was properly handled. We are on the threshold of a
reopening of the capital markets on a basis which those of us who
remember the situation after the last war, may look back upon as
something mighty small compared with the opportunity that lies
ahead. This opportunity to create a real public participation in the
private businesses of this country that will need public financing
after the war, has never been fully appreciated by the politicians
nor by the leaders of the various associations within the securities
business. At least so it appears from the lack of concrete, organiza¬
tional efforts in preparation for the time when the need for this sort
of project will become a reality.
If we are going to clutter up the highways and the byways of
this country with another crop of hastily educated stock and bond
salesmen who have been recruited by the easy money promises of
short sighted investment bankers and securities dealers, the same
mistakes of the twenties will once again be repeated. Despite regula¬
tions and rules which we have today, if the money becomes courageous
which is now lying dormant, if the public becomes "profit conscious,"
if tips once again take the place of facts and sound investment
analysis, there will be trouble ahead.
The general public today
doesn't know how to invest money in securities or anything else for
that matter; only the minority and a small minority at that, have

83.0

26 V*
1,005
190 ^
95/8
27%
21

...

makes

ASSETS

£115,681,681

the

54%

York Trust ______________57

New

Public

TOTAL

overall effort could

107%

•

32 Vs

'

Ohemical

452

247

___

——

__

Burlington Gardens, W. I

dollars and cents viewpoint no investment of funds by
individual firms who might contribute to the support of such

33

.*
—

___

—

Hanover

it

Smithfield, E. C. /

Charing Cross, S. W. I

64 New Bond Street, W. I

a

21 Vs

Central

Bisbopsgale, E. C. 2

49

a

60 >/a

York-

of New

Bankers Trust

Chase

13

Apprec.
92.3%

8-14-44

______

3

8 West

,

condition which no other industry in the country would
tolerate without at least making some attempt to change it for the

that

Insurance

Members

in

its importance

contribution

the

whole, is

the

dustrial Average was 144.9. Thus
bank stocks have moved up dur¬
with 55.9%

functions,

and

an

105.7 and the Dow-Jones In¬

was

it

throughout Scotland

LONDON OFFICES:
.

better.

risk.

higher

general market, and such
a period has developed since the
market low of April, 1942.
New
York City bank stocks, as meas¬
ured by Standard & Poor's In¬
dex, were at their low of 59.2 on
April 22, 1942, while the DowJones Industrial Average hit its
low of 92.92 on April 28,1942. On
Aug. 9, 1944, the bank stock index

,

OFFICE—Edinburgh

Branches

citizens of what the investment banking industry

our

From

than the

HEAD

v

almost complete ignorance of the vast majority of this group

of

however,^

periods,

are

incorporated i>y Royal Charter 1727

15 million. security owners, outside of the holders of government
bonds, today reside in these United States. The lack of understand¬
ing, the unfamiliarity with the fundamentals of our economic system,

This Week—Bank Stocks

:.

Royal Bank of Scotland

.

just what kind of a real job can be done if proper organization and
"know how" are applied to the task. • '
Instead of independent associations individually concerned with
the immediate problems of the special fields in which they operate,
such as the IBA, the NASD, the various traders and customer broker
associations, and committees representing the exchanges, the industry
should organize all its various segments for the purpose of creating
good public relations toward the entire industry. Unfortunately,
leadership has been lacking' almost since the time the securities
business became national in scope.
It is estimated that around
.

CALIFORNIA

OF

,

Someday someone who knows how to handle public relations
is going to come along and show the associations which now repre¬
sent the various segments of the securities industry in this country

Orders solicited.

Inquiries invited.

•

.

Public Relations And The Securities Business

Dealers & Brokers
m. (P. C. T.)

Special Bulletin and Booklet Service to
Trading: daily 7 a. m. to 5 p.

By JOHN DUTTON

...

COMPARED

-

Thursday, August 24, 1944 "

CHRONICLE

The

E.

Kahn's

Sons

Company

recently offered to holders of its

outstanding 7% preferred stock,
$100 par value, the privilege of
exchanging stock.for the new 5%
preferred on a basis of 2y5 share?
of

mew

stock .for

each

share

of

7%

preferred, with cash adjust!ment for dividend. The exchange
offer expired

Aug. 16.

Proceeds from the sale of the

N. Y. Stock

Exchange

Weekly Firm Changes

J in 1896. At the time

;

-

;

announced

changes:

the

was

a

of his death

director of the Manhat¬

Patriotic Insurance

The New York Stock Exchange

has

he

tan Marine & Fire Insurance
Co.,

following
'

Gerard Hulsebosch retired from

Co. of Amer¬

ica, Sun Indemnity Co., Sun Un¬
derwriters Insurance Co.

of New

York, and a trustee of Brown
University. He was a member of
the University Club, Brown Uni¬

versity Club of New York, Cen¬
tury Associates, Down Town As¬
sociation, Garden City Golf Club
Interest of the late Leonard A.
and the Pilgrims. He is survived
Cohn in Spencer B. Koch & Co.
by a brother, the. Rev. C. W.
Meacham of St. Petersburg, Fla.
ceased as of May 31st.
-

partnership in Hawkes & Co.

August 16th.

on

A

THE COMMERCIAL &

Number 4310

Volume *160

•

The Full Employment Issue

f
I: iitude

of

the

people

and of the

•5 Government?"

I personally have no doubt that
full
employment dogma as

)

the
A.

s

■

presently formulated by its protagonists embodies one of the
most serious perils to the demo-

*

and to our liberThere are, however,' .two
ways of bringing about unrest and
losing our cherished liberties: One
is to elude the problem of unemfcratic processes

The.
it

Government:!

clear

that

should

Women In

employment

by individuals and corporations.
Profits, in their turn, depend a

Dorcas

to provide post-war jobs. great deal on wage rates and
Unless I am grossly mistaken, taxes.
y''l'
In a book just published by E. P. Dutton & Co., Inc., of New
the right to work has come to 7. (e) The; Government should
stay among the rights of man, and declare as a fundamental princi¬ York, Dorcas Elizabeth Campbell, an officer of the East River Sav-'
we must devise ways to make this ple of our private enterprise sys¬ ings Bank in New York City, analyzes the opportunities for women in
right compatible with the preser- tem that > the* diffusion of well- the field of Banking and Finance. The author, who migrated into
vation of the private enterprise being ./.and the ■ increase of the banking from New York publicity and newspaper work, gives an
system.
To accomplish this, I standard of living of the country overall survey of the jobs women now hold in banking and finance

think that both psychological and
legislative means will have to be
used.

ployment (by the hackneyed slo■'$. gans of the free enterprise sup¬
porters); and the other is to ac¬
cept the dogma of full employ¬
ment without providing for safe¬

The

1

Necessity

of

as

whole

a

The

Safeguards

constant

duction,

If the Government is to accept

is

conditioned

to lower and

trend

by

'■»

a

lower prices.

increment

in

pro¬

progress
and the effect of savings concur

about lower costs of pro¬
duction. Arbitration in labor dis¬

responsibilities (the kind of
the fathers of the present
never
dreamed), putes

which

It-is also the duty of business men
profits. It is only when
a business man makes profits that

1

to make

he

able

is

to

provide jobs.

The

only business man useful to the
community in a private enterprise

is the one who makes
profits.
Only the business man
i who makes profits can make jobs.
:£ >. The policy of building new factories advocated by the first group
system

realistic

| mentioned above is not

that in 1940
about 22% of the working

for the simple reason

£

only

employed in the
1? manufacturing industry. It is also
{5
unrealistic on another important
% score: once these.^factories have
I been built, we Shall have a glut
of
consumer
and semi-durable
§ goods.
Shall we then continue to
I build factories? And where is the
money to come from?
Further¬
more, for the sake of saving the
| private enterprise system, everyt- one is urged and prompted to plan
I population

this

was

building

of factories

period immediately
the end of the war.
the

-.

during

following
~

As to the attitude of the second
group, it seems to me even more
unrealistic and possibly danger7 ©us
I do not profess to know

llf
'

.

•

what the future

»

V

US

or

for
to a

holds in store

what the answers are

many problems which
confront the world after the

Jr great

will

war.
£ij have, however, one deep con>: eviction,
shared by many others,
namely, that widespread unemrployment will not be tolerated by
1- the masses. It will be too easy
i.for any demagogue, or for anyone

nating person¬
al

the

domestic duties

their

in

fitting
for

jobs.

banking
Women

Campbell

(3) As a corollary as it were, of
previous dangers, the free
market
may
be destroyed.
(It
seems to
me that as long as we

the two

market
be
reasonably sure that the private
enterprise system is functioning.)
by

regulated

With
in

keep

to

manage

the

mind,

private

above

we

-

In

*

are

notorious for their indiscretion

in

gossip. Men have more insa¬
tiable appetite for it, as a psychi¬
atrist
told me recently,
but in
their

dignity, it isn't

considerations

protection of the
enterprise
system #and
the

liberties may, I think, be se¬

our

cured

the following means if

by

the Government is to assume

the

responsibility of helping to create
conditions

favorable

to

a

to
chairman of the
directors.
Although

tonight
you
are
undisciplined
about discussing Mary's new fur

much of this arises from war con¬

coat, on seeing a vice-president at
lunch with a blonde, who is prob¬

page
board

girl
of

ditions, there are and will remain
many positions and occupations,
once thought to be the exclusive
property of men, that women will
continue to fill.

£i|.

problems discussed
with the employ¬
relating to
retention of married women. It is
Among

in

the

connection

ment of women is that

pointed out, that although many
institutions have had a rule that
States, in his message to

Congress

ably his cousin anyway, you'll be

undisciplined tomorrow night and
discuss Mr.
Rich Citizen's loan
from
the
bank.
Rumors, about
things

financial can

Better

learn

talk

to

be

ruinous.

about world

problems or the influence of the
drama

Greek

and let the

on

Eugene

O'Neill,

gossip die unborn."

Certain economists maintain that

the private enterprise system re¬
I believe, stated that de¬
quires for its proper functioning
mocracy has its roots in religion.
a
slow, rising trend of prices.
This is another way of 'express¬
Personally (mainly on account of
ing one's faith in individualism
technological progress) I contest
and the dignity of the human per¬
this
view and I hold that the

in 1940,

son

too

but

masses

philosophical for the

to grasp

Take

the implication.

another instance.

One of

spreading of well-being in the in¬
crease

of

the

of

the

standard of living
nation
can
be

whole

great problems we shall cer¬
tainly be confronted with is the
the

.

As

often

as

and actuarial science
of moderate income found the
answer to a want as old as civilization—a way with¬
in his means to protect his family in the event of

It

was

came

not

until life insurance

that the

his early

possible,

man

death.

Our

level of employment:

(a)

MAN

high

the

representative can show you how
can be provided for so little,

much

v

through its
'mouthpiece,
the President, assert and reassert
that it is its conviction that de¬

Government 'should,

authoritative

most

mocracy

and

and liberty are not pos¬
private enterprise

without

sible

competition.

(b) The Government must de¬
clare that it is its 'responsibility
watch

to

the

that

consumer

the sovereignty of
all times se¬

is at

cure.

to

(c) The Government
define clearly what

■>i JiilO

will have
is meant

v

Q7&e PRUDENTIAL
INSURANCE
A

COMPANY

OF AMERICA

mutual life insurance company >

•

will be inclined motivating power of which is
to accept the reasoning that if we profit. There must be competition
found money to build tanks, guns in labor as well as there is in
and airplanes, we ought to find capital and in the goods produced.




called gos¬

in

GETS A BREAK

can

who does not understand the imw
—.
j
/ plications of the full employment by "full employment." It is, of
/-dogma to shout: "Must we have course, essential for the proper
I i war to have jobs?" I also enter- functioning of the competitive
tain the doubt that the masses system that a certain reservoir of
will have any sympathy for those manpower
be kept available.
who advocate sanity in the name There must be competition in a
h-of sound fiscal policies.
There, private -enterprise system, the

again, the masses

to carry on

professional

now oc¬

THE AVERAGE

free

a

prices,

'•

7

as

and

sip, it's 'discussing the facts.'
In
a
bank gossip is a very unfor¬
cupy positions tunate habit for either sex. .Bank¬
ranging from ing is a confidential business. If
banks

Dorcas E.

women

giving advice to women in
the banking and financial field,
Mrs. Campbell says: "Look to your
future and avoid gossip.
Women

of
personal clin¬
women

so

business

activities.

findings
ics

married

result

impossible.

->/

<

stories, and

discusses

a

justments of costs to prices (in
particular, wages) may become
not only inflexible but practically

.

.

nu¬

as

adjusting themselves in their

are

brought about only if prices slow¬
ly but persistently show a trend
rigidity of wages. By what crite¬ to decrease.
ria, and who is to decide what
If:this article has the virtue of
(1) The national debt, or rather who call themselves liberals) deny
the right policy for wages is in
the
interest
on
this debt, and the proposition. The only author¬
arousing interest and stimulates
our
badly functioning industrial
itative voice I heard in this coun¬
therefore the level of taxation,
further discussions and ideas, it
society?
The assertion of a goal
will have fulfilled its main pur¬
may become unbearable for the try asserting with force this credo
of lower and lower prices may
is Mr. Nicholas Murray Butler.
functioning of an individual en¬
pose.
• ■ V/:
v :;;•
, V;";:.; 7
""j.•
The President
of the United perhaps provide a guiding rule.
terprise system.
(2) The adjustments and read¬

r

.

il¬

fasci¬

merous

--

-■

ciple is rapidly being abandoned;
and

her

work with

•

|

She

field.

lustrates

Constitution

.

V

who

se

contemplate
entering this

to bring

new

together with^>
expert opinion women employees, upon marriage,
and advice for must quit their jobs, " this prin¬
i ho

technological

regarding
wages
should
therefore be governed by this goal
then we should also provide for
guards against its dangers. Wis¬ whatever safeguards are politi¬ of a lower trend in prices. The
dom should counsel us to face the
matter of agricultural prices may
cally practicable in order to make
have to receive special considera¬
issue squarely.
sure that we do not break beyond
•J
'*J * *"
*
' ' *
'
'1 '*
tion and adequate treatment.
repair our private enterprise sys¬
Lack of Realism
£ (f) The Government should (on
tem, losing at the. same time our
Lord Woolton's White Paper on
the advice of a body of experts)
liberties.
It is furthermore obvi¬
employment policy, recently pub¬ ous to me that whatever- safe¬ fix the maximum ratio of all taxes
lished by the British Government,
guards we contrive must be dem¬ (whether Federal, State or mu¬
clearly states:
,
ocratic in their essence and un¬ nicipal) to the national income.
(g) The Government should re¬
"The Government accept as one derstandable to the masses.
linquish its right to impose a con¬
of their primary aims and respon¬
The question is whether there
trol of exchange except in times
sibilities the maintenance of a high are such
safeguards which would of national
emergency.
and stable level of employment
prove effective.
I think that the
The implementation of the safe¬
after the war."
means to protect the private en¬
I ' I. am. afraid there is in this terprise system together with our guards may, of course, require the
creation of some new institutions.
country an unrealistic approach liberties can be imagined. Their
It would be ridiculous to pre¬
to this important question.
Two effectiveness will depend on our
tend that the above suggestions
attitudes on the part of those de¬ vigilance, exactly as this is the
have any other merit than to situ¬
fending the private enterprise sys¬ Condition for the preservation of
ate the problem of full employ¬
tem are evident with regard to those liberties guaranteed by the
ment and indicate that there may
this new full employment dogma: Bill of Rights.
be
a
practical approach to the
Either a frantic effort is being
Td provide the proper protec¬
provision of safeguards to private
made to push the manufacturing tion for our private enterprise
enterprise and our liberties.
companies to plan on building system and our liberties we must
My insistence on psychological
factories after the war, prodded have clearly in mind the nature
as
well as legal safeguards may
by the slogan: "If we do not pro¬ of the dangers deriving from the
sound unfamiliar, but the prob¬
vide jobs, then the Government assumption by the Government of
lem we are confronted with is a
will"; or we find a negative at¬ the new responsibility to bring
titude from those who purely and about conditions favorable to the baffling one. Personally, I am in*
clined to put as much weight on
simply dismiss the question on the maintenance of a high level of
the psychological means as on the
ground that it will lead us to the employment.
legal safeguards.
I- loss of our liberties.
My view is
The Nature of the Safeguards
Take for instance the proposi¬
1 that neither one nor the other atTaking into account the means tion that the preservation of our
f titude is sound or realistic.
which have been so far proposed liberties is impossible without de¬
Be it said in passing that busifor the Government's fulfillment mocracy, and that democracy is
li ness men are, not in business to
of this new responsibility, I think
impossible without, private enter¬
provide jobs. Their own job is chat the sources of dangers to pri¬
prise and competition. As you
to make goods or provide services
vate enterprise and our liberties well know, many people
(para¬
I which will appeal to the consumer.
can be summarized as follows:
doxically enough, mainly those
.

Banking And Finance

Campbell Of East River Savings Bank Writes
On Their Career Opportunities

money

ties.*

1

:

depends on profits and risk-taking

(Continued from page 778)

}

(d)

make

791

FINANCIAL CHRONICLE

HOME OFFICE

NEWARK. NEW JERSEY

Thursday, August 24, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

792

hurt

not

Term

Peace And The Longer

remember that after

to

War I discharged service¬

World

received

men

extra $60, a total

an

$250,000,000 and best wishes.
It is a tremendous and expensive

near

Outlook For The Stock Market
of course, either a business boom or helped
usher in a new set of circum¬ greatly in turning the economic
stances.
The inflated backlog of cycle from unfavorable business to
unfilled contracts will be replaced good business. There was an ex¬
by billions of dollars of cancelled port demand at satisfactory prices
will,

end

war's

that

all

for

the millions of

It

last week in

had available to

we

respective
places.
Surely
Broadway will be booming for
months after the war ends!

man¬

production of civilian goods.
also provided that an order

was

of Information

published a book,
Army," giving the of¬
ficial story of the almost shatter¬
ing defeat in Africa, which was
"The Eighth

reversed

into

,

overwhelming

an

would be issued the last week of

victory. Speaking of General Cun-;

July permitting manufacturers to
make working models of civilian

ningham, who

that
There is

designed for post-war
production.
These j,two
orders

reached

tradition

American

July permitting

the

It is easy to underrate

lems.

importance of proper attitude. In
March, 1943 the British Ministry

old and de¬

is also the

sirable

time

ufacturers to order machine tools

It

There

that

at

order would be issued the

an

for

their

announced

was

that

servicemen and transport them to

(Continued from first page)
The

task to bring home

paring for reconversion announced
July 11th represents real progress.

for.

needs to be allowed

products

command,
could

removed from
"He had nov^

was

it said,

conclusion

the

not be done,

it

that

that the oper¬

expansion will
alone can reduce by months the ation should be abandoned.
abroad.
Therefore,
good almost always a preparation for
serious business ship
home coming. Mothers, wives and gap between war production and "Nothing is more fatal than to in¬
crops meant a prosperous agri¬
contraction. Labor shortages will
peacetime civilian production.
It trust the conduct of a battle to a
culture.
In the late 1920s and sisters generally insist upon beau¬
be replaced by millions of war
takes time to develop models for Commander who does not think
tifying the home and buying a few
workers and service men seeking 1930s this influence ceased. There
production and to prepare designs he can win it."
Finally General
new tnings to make more pleasant
was no longer a world market for
employment. Peace may find the
for necessary machine tools and Montgomery and General Alex¬
and happy the return. This itsen
world in political and economic our surplus agricultural products.
dies. Work is now being done that ander, men with skill and faith
Bumper crops forced domestic will be a big effort in view of the
turmoil.
1
/
•'
must precede peacetime produc¬ in the ability to win,, took overh¬
of
the
returning
Armed
prices lower, making profitable size
This
contracts. Business

replaced

be

.

prospect causes apprehen¬

emotional, fear.

creates

It

sion.

Blessed peace, the one cause
which men will work, fight

and

of the

because

feared,

for

die,

is

chain

to fol¬
These fears have been over¬

low.

of events expected

for

market

Were it not for them,

months.

I

that stock prices in gen¬

sure

am

stock

the

hanging

eral would be higher,
J The constructive and profitable

approach at this time is to look
at the stock market from the other

What fa¬

side, in my judgment.

prices
and might they dominate? Is the
market near a level that discounts
the difficulties of reconversion?

vorable forces support stock

post-reconversion out¬
look
justify
expecting
higher
prices?
the

Does

Prospects Improving

farming even more difficult. This
led to such destructive practices

plowing under part of the crops
slaughtering little pigs. Until

as

and

had

has

world

war-torn

the

at

good crop year there
will be large demands for the out¬
least

one

put of American farms. Weather
permitting, we can expect large
agricultural production during the
first year following the war. Agri¬
cultural income should be less
than it will be for the current

still it should be at a
highly prosperous level. This will

year, but
have

stimulating effect upon our
It is impossible to have

a

economy.
a

general downward readjustment

in

of

terms

stock

such

ences

influ¬

market

in

as

and

1937

late

1938 that does not result
from a concurrently severe con¬
traction
in
both
industry
and
early

the spring of 1942 time agriculture.
progressively raised the floor

Since

.

has

reconversion,
read¬
justment, made surer, steeper and
more
prolonged the subsequent
phase of recovery and expansion.
:;•••> Industry must spend large sums
of money to retool and reequip its
plants for civilian production. Dur¬
ing the war there has been a great
deal of quantitative construction,
which must be supplemented by
qualitative construction to make
the industrial plant efficient. And,
as these potential expenditures in¬
the

of

crease

of

canyon

does the where-with-all

so

Never has industry been

strong financially.

so

To refer to a few

examples:

General Motors increased its net working capital
from the close of 1938 through
Popular

1943 from $387,000,000 to

$652,000.000, and the figure is much
larger today.
Unpopular Kennecott Copper
showed

increase

an

in

net

working

capital
during
this
five years from $83,000,000

same

to

$175,000,000.

Perplexing
creased

its

in¬
working capital

U.

net

S.

Steel

vfrom $431,000,000 to

$650,000,-

000, including $130,000,000 cash

.

I segregated for capital expendi¬
tures.
iV The 30 companies making up
the Dow-Jones Industrial Aver¬

increased their net working
capital during this period from
an aggregate of
$3,607,000,000 to
age

$5,271,000,000.
The

industrial

civilian

pipes of many
goods have been drained

and months of maximum produc¬
tion

will

be

required

them and establish
to

of

storerooms

and

wholesalers

refill

to

normal flow

a

waiting customers.

the

Restocking

manufacturers

and

the

shelves

iof

retailers, together with satis¬
fying minimum civilian demand,
will

be

many

a big
production job for
industries. In the meantime,

deferred demands and spendable
savings continue to increase. These

growing
tional

demands

in

Job

scope.

interna¬

are

Unquestionably,

have

more

domestic

than they need for

consumption

will

ior

a

this

de¬
see

pictures of "liberated cities,"

we

see

to

more

work that

we

will have

This

Prior
per

to

crop

World

would

War

have

I,

a

icemen should




aggregate

made

less than $100

earn

month, the Government will
up the difference up to 52
weeks.
When a veteran qualifies
make

school

for

training

ai

or

course,

the Government agrees to pay up
to

$500

fees,

aboratory

$50

a

$25

and

there

tuition,

cover

books,

and

so

The Government will also

■orth.
pay

to

year

a

month living allowance
a
month additional if

If after

dependents.

are

one

the veteran qualifies for further education, he can remain for

year

the

length of time, up to four
years,
that he served between
Sept. 15, 1940 and the end of the
war.
Then thel'e is the arrange¬
ment to

provide loans. Veterans
nay. borrow to buy a farm, start a
business, buy an old home, build
a

home,

new

and

of.

make any repairs

improvements

to a total
of the loan

up

$4,000 with. 50%

guaranteed
In

or

case

by

the

Government.

down payment is neces¬

a

secondary loan

sary, a

up

to 20%

and
subsequent

steeper

surer,

the
phase of recovery and expansion,"
is the planners and the plans be¬
ing made for the period follow¬
ing the war.
The Baruch-Hancock Report, released February,
1944, set the pace for constructive
preparation for the post-war pe¬
riod.
Up to that time most plans
prolonged

more

conceived

with

defeatist

a

To quote from their

background.

been

has

loose

parroting

that

if

some

that

other systems

of the

one

The

around.

are

been

of

provide jobs for every¬
must be replaced by

it

one,

much

too

the slogan,
individual
enterprise

fails to

for

crucible

a

has

war

all

the

of

economic systems of the
for

our

world,
for Communism,
Nazi-ism — all
the

own,

Fascism,
others,

t

And, the American sysr

has

tem

out

the

produced

-

world."
This

made many prac¬
tical suggestions for "getting us
all back to work in peacetime en¬
terprises." This same constructive
report

radiated by the
post-war planning of the Senate
Committee
headed
by
Senator

spirit

has

been

George.

fi¬

J

,

on

victories

current

are

acting

the

as

a

battle¬

powerful

post-war planning tonic.
Imme¬
diately following the publication
the

of

Baruch-Hancock

the Government set up

Report
machinery

to

carry out some of the sugges¬
tions.
In the closing part of 1943,

Joan

Th^re is

which

it

The

guarantees.

of estimating the
loans that might be
they
could
exceed

no way

of

omount

veteran.)

per

but

$5,000,000,000.
From

most
our

and

servicemen
of

most

of

are

them

before

such

in

ment

to

,

so

short

generous

now

highly

are

ac¬

"Probably
history has a

grubstake been offered to

st^ke

com¬

savings.

cumulating
~>ever

standards

a

so many

time and

terms

as

the

the

after

would be pre-war models.

war

Within

into

are

growing that the leaders of in¬

two days after the announcement

dustry

that industry

sary

to prepare

reports

would be permitted

models and order tools,
Detroit

out of

came

that

the first post-war automobiles to
come
off the industries' produc¬
tion lines will include

some

cars,

during the
have

Many companies

war.

acquired experiences in pro¬

want

other

in

fields

will

and

activities.

their

broaden

to

On the other hand, companies
want to fully maintain

will

their post¬

competitive position in their

war

reacquiring the neces¬
Plans are being made
that would originate only in the
are

faith.

minds

of

?

Dunkerque
Nevertheless, the extreme

prices.

market lows

1942

of

small

part

litical

influences.

in

were

precipitated

no

by

po¬

The

Treasury
proposed maxi-?
profits tax predicated
upon
invested
capital.

Department had
mum

excess

solely

While such

tax would have pro¬

a

duced

large revenues under war
conditions, there was no question
but that it

were

reasonable prices.

was common

Subject to the

the

carried them below the

the most attractive merchandise at

-

break

to

in

Better Political Background

It

panies

faith

The disaster of Pearl Harbor set
off a decline in stock prices that

The way for com¬
into new fields,
and
for
companies to maintain
their
regular
markets
are
the
same—offer the consuming public
regular lines.

with

men

future.

brand

including improvements
which it was thought only re¬
cently would be deferred until
after the first year's production.
Many formerly weak companies
have
become
financially strong
new

when

about this must be eliminated by
the war performance.
Evidences

was

a

reform

measure

that would have been destructive.

reform sister to the $25,-,

was a

000

salary
limitation.
At
that
time,
when our Armed
Forces

largely
in

limitations of time and manpower,

many

it

leadership

"on

order,"

debate

important

there

to whether

as

positions

of

js almost certain that industry
in general will go to work devel¬
oping post-war models with the
hope of producing them as soon
as possible. Competition will force

background has
improved considerably since then.

this

It

This

action.

stimulate
the

will

not

only

production and shorten

of

period

time

into
have
that we

get

to

civilian production, but will
effect

an

upon

demand

time.

Had

industry brought out the
models and people in
general knew that within a year
pre-war

or

the

so

post-war

improved

models would be available, many
not in dire need of the

who

were

new

merchandise would have de¬

ferred their purchase.
first models offered

attractive,

completing
winning the war.
The

intellectuals

day,

Time

itself

a

reform

than

J

'

that the

appears

the

inter¬

more

%

political

field

radicals

have

least

at

had

for

helps to

and
their

while.

a

bring about

stable condition to which

more

industry

adjust. Many changes
originally
feared
and
strongly,
and sometimes unwisely,
opposed
later
have
been
accepted
and
recognized as good.
In order to
can

obtain the

that

ton

leadership in Washing¬
could

accomplish
the
capable business
men
have been- given key posi¬
tions.
Congress rhas become more
task,

practical,

conservative
We

incorporate many of

and

modern

Now, if the

are

not

were

in

ested

will be

are

and constructive,

approaching

an

c

impor¬

best,

problems.
Since then Con¬
gress has passed and made effectice

contract-termination

a

law

which largely met the suggestions
of business leaders.
The admin¬

istration
most

it

ert

of

as

was

of

any

legislation is al¬

important

as

the act, and

constructive when Mr. Rob*,

H.; Hinckley,

Vice-President

Sperry

has been slow in passing de¬
legislation, although ca¬

sirable

the

greatly increased.

that there is
15

a

individual

an

each of the
in the hope that he

three

sellers

get delivery from one of
them.
For a period of time after
will

the

war

prices

merchandise

active

returning

helping

to

justment.

and

^eoare

for

the

in

read¬

The program for pre¬

strong the desire to have

so

that

know

that

to hold the money,
may

there

is

rise,

and

enough

not

The
clamor for the new products will
play an important part in stimu¬
to

go

around.

The

most

our

more

planners

business leaders.

Their

constructive attitude toward

the future is
for

important

an

tant election which may be a vic¬

tory for those who desire to make
free

enterprise system work
regardless of which party
The controlling interests in
the. Democratic Party will prob¬

wins.

ably

be

dedicated

more

ning the
reform.

encouraging sign

expecting a better-than-feared
working out of the post-war prob¬

to

winf

and recovery than
The conservative Demo¬
peace

crats and
a

Republicans should gain
representation in Con¬
Moreover, the Republican

larger

gress.

Party

to have

appears

chance

to

win.

The

a fighting
Republican

Party has grown in strength dur¬
ing recent years while the New
Deal influences have waned.

Re¬

publican Governors preside over
States having almost two-thirds
of the electoral votes.
war

and

controls

affecting

Necessary
industry

have

consumers

irritated

people to the detriment of
the political party in power. This

many

trend in political propects is im¬
portant.
Even if the Republican
Party fails to elect its candidate
for President, the
continues and the

lating increased outout.
are

constructive

definite

a

shortage of many things desired
by the consumers, especially with
attractive new models.
Nothing

made real progress

The War Production Board has

be

there .will

fear

rather than just beginning.

may

order with

place

plus War Property Administrator,
has
established an agency and

its way

More
models.

demand for close to

Each

cars.

as

on

war

people will want the new
The result will probably be an ex¬
aggeration of the waiting demand.
In reality (and for illustration), if
there are only three cars available
for sale and five people wishing
to buy a new car, it will appear

something

the work will be well

the

from

resulted

makes

in meeting this
problem.
When Congress even¬
tually passes an act giving this
division
a
legislative character,

intechnique

improvements

pable William L. Clayton, ap¬
pointed early last March as Sur¬

been

." To keep perspective, it may

produced

our

offered by the Govern¬
servicemen.

etc.)

defeat

skill

—

that displayed

by
they reversed
victory.
All doubts

British

research activities, initial demand

among our number

one

gress

$2,000

that the first automobiles

fundamental

a

Industry has the skill
the

that have

was

the

ceed

ex¬

time

tlements

Government will pay the interest
due the first year on the part of

guaranteed portion must not

from

told

This is

won.

the working out of a proper pro¬
cedure for handling contract set¬

Corporation, was ap¬
pointed to fill this position. - The
disposal of surplus commodities
has been among, the most impor¬
tant problems that needed to be
handled properly if we were to
smooth the readjustment.
Con¬

of the cost of the property can be
obtained fully guaranteed by the
Government.
(The
Government

been

would do well to visualize at this

guring recent months many
definite steps have been made to
facilitate
the
readjustment and
fields

and

observation, equally applicable to
political and business leaders.
comparable to

important effect.

have

duction

report:

over

per

bum¬

produced

reconversion, made
period of readjust¬

the

shorter

ment,

finan¬

There is provision
for unemployment compensation
ranging from $20 to $35 per week
up to 52 weeks.
It ..is also pro¬
vided that if self-employed serv¬

that "time has

the canyon of

uemu^u^ctuun

may

We

(and radios, refrigerators, stoves,

the

for

reason

progressively raised the floor of

Mustering-Out Pay, ranging, with
from $200 to $300

on

Suoport from Prosperous Farmers

important

initial observation

few exceptions,

individuals in

help do.

Planners and Plans
An

The "G. I. Bill of
Rights" includes many provisions
for
assistance to
the returning
serviceman.
There will be the

each.

another

to time

of

$3,000,000,000.

In addition to shortening

conversion, these orders will have

in industry.

cially possible.

be

we

task

the

tion, that otherwise could not be

started.

of demo¬

buffer against a contraction

tant

big dol¬

considered

before

never

paid

in

Each time

or

sianuaru

tunate

war.

bilization.

demobilization. We have prepared

parison,

participants

job,

lar-consuming

do

This is another impor¬

fect of this big program

will

we

immediate and

an

called upon to assist the less for¬
structive

ends

war

we

the period of time required for re¬

"There
the

When

those nations with the capacity to

produce

It is desirable that

Forces.

not underrate the stimulating ef¬

were

Demobilization—A Big Immediate

the period of

made shorter

to do it.

.

by

lican

victory,

more

thjc trend

nearer a

the

Repub¬

it will
force the elected party to move in
the same direction. Notwithstand¬

ing the
we are

after

more

many domestic problems,
likely to have in America,

this

war,

the best political

of

background

The

place in the

any

operation

the

for

world

of

our

are

type of free enterprise economy.
••••'New Frontiers

7

announced

recently

from New York to

for

a

travel

Rio de Janeiro,

that would

instance,

for

plan

air

luxurious

providing

Airways

World

American

Pan

cut the

open up a new

This is

1919

more

fully expressed in common stock

A general

discussion of the post¬
prices

outlook for commodity

is not very productive.

For

a pe¬

Plastics, light metals, riod of
time, at least, some mate¬
electronics and many less spectac¬ rials will be abandoned or in
ular but important developments
oversupply while others will be
ahead.

lies

of recent years, will open up new

economic frontiers. They can have

To talk about inflation as

scarce.

such generally gets one

nowhere.
few basic

uncomparable to However, there are a
Purchase; the An¬ observations that can be made
nexation of Texas; the invention suggesting trends that will grad¬
of the Colt revolver, the windmill ually affect the economy.
and the barbed wire fence that
Labor costs account for almost

an

influence not

the Louisiana

made

possible to

it

and

occupy

develop the Great Plains, and
Other frontier
expanding high¬

three-quarters

of

the

of

costs

manufactured goods. If, in the re¬
conversion period, labor demands

Long-Term Trend

of

Canadian National Railways

Stock Values Is Upward

Dominion of Canada Guaranteed

practically a forgotten tru¬
ism that the long-term trend of
ward

v

Common

It is

4V2% Bonds, Due February 1, 1956

stock values will be up¬

common

$100,000'

V

:

Monetary Influences

war

subject:

We offer,

prices over a period of time.

com¬

probability that labor policies will
again have a dominant effect on
post-war conditions.

$175.

to

and

now

pletely organized, the unions are
stronger financially and the threat
of unemployment is greater. Each
of these factors only increases the

This would
economic frontier.
only ail example of what

$491

between

that labor is much

present time from 66 hours to less
than 20 hours and reduce the fare
from

important discernible dif¬

ferences

793

& FINANCIAL CHRONICLE

THE COMMERCIAL

Number 4310

Volume 160

Non-callable

long as we have a thriv¬
ing capitalistic economy.
Gener¬

*

so

Price

ally, leading corporations pay out
approximately two-thirds of their
earnings and keep one-third in
the business.

These funds

are

H6V4 and interest, yielding 2.83%

Wood, Gundy & Co.

re¬

Incorporated

tained to finance

growth, such as,
building new plants and opening
new retail outlets.
Earnings paid
out

as

dividends

if

and

earnings

14 Wall

Street, New York 5

Direct Private Wires to Toronto and

Montreal

have real value

retained

in

the

business did not increase the value

of

the

no

they would have
wise business¬

equity,
value, and

no

would retain them.

man

1940 Montgomery
the

sale

In early

business.

the expansion
The stock

was

The dream of visionaries

common

stock to raise about $31,000,000 for

financing

By BRUCE WILLIAMS

Ward proposed

additional

of

fill Canadian Securities

of their

then sell¬

and explorers in past

centuries, "The

Passage," is now an established fact. A chain of airfields
running northwestward from Edmonton to Alaska, known as the
North West Air Staging Route, is now a practical short-cut route
North West

ing between 50 and 55. War de¬ connecting this continent with Russia and Asia, thus supplementing
lights of the long ago. When the
higher basic wages, it will prob¬
velopments precipitated a decline the land link already established in the shape of the Alaskan High¬
dynamic forces of peace industry
ably be reflected by higher prices. in market
price and the offering way. After the war, this world<i>are turned loose to make the most
Labor leaders probably have the
did not materialize. However, the communication link will be fur- '
of these opportunities, the econ¬
power to produce conditions after
funds then needed have been more ther improved by the installation
omy is bound to be stimulated and
the war ends that will mean furthan raised through retaining un¬ of adequate railroads.
the standard of living increased.
ther
general
price
inflation distributed
earnings. As of Jan. 31,
Already Mr. John Hart, Pre¬
rather than price deflation.
This 1940 net
Labor's Dominant Role
could have

'

have played a
dominant role in domestic affairs
during the war period and are
almost certain to continue to do
policies

Labor

a

decided effect upon

production and influence upward
stock prices.

during the reconversion and for
some time beyond.
It is easy to
visualize a sharp decline in pro¬

so

It is

possible to set

sheet for the Nation

up a

balance

quite similar

to that published periodically by
corporations. On the asset side of

this balance sheet would be listed

working capital amounted

to $149,000,000. This increased as
of Jan. 31, 1944 to $212,000,000, a

gain of

more

of the

terms

than $60,000,000.
common

stock

In

out¬

the

net* current assets
from $28.50 per share to

standing
increased

$40.50 per share. The stock is now
selling at 47. This is a substantial

mier

made

of

British

Columbia,

has

CANADIAN BONDS

budgetary provision with

of extending existing
railroads northwards to link up

the object

GOVERNMENT

with the Alaskan Highway and,

thereby,

open

up

the

fertile

Peace River Block with its
coal

PROVINCIAL

rich

deposits and high promise

MUNICIPAL

of seri¬
of important oil discoveries.
all of our tangible resources such increase in asset value. The shares
prolonged unemployment.
There is little doubt also that
as land, factories, machinery, arid
are
worth more as a result of
The experiences of the 1930's make
in the post-war period steps will
On these accumulated earnings.
If
this appear the natural prospect. homes, expressed in dollars.
be taken to connect Edmonton by
the other hand would be a list of the
company had to sell enough
In my judgment this is taking too
claims and evidences of owner¬ additional stock to raise $60,000,- rail with the mineral rich North
passive an attitude toward labor
West Territories. The Yellowknife
and underrates the positive effects ship of these assets, such as mort¬ 000, the current value of each out¬
gold area has already reached the
of possible labor policies.
Labor gages, bonds, bank deposits and standing share would be less than stage where such development
has become strongly organized, equities. If such a national bal¬ it is today. From the close of 1938 would be
justified. Although phe¬
ance
sheet were prepared as of
through 1943 the Dow-Jones In¬
and organized labor is not going
nomenal diamond-drilling results
Sept. 1, 1939, it would show the dustrial Average (with the figures
to

duction and a recurrence
ous

and

up any of its wartime
willingly. On the con¬
trary, it can be expected that la¬
bor
leaders will exercise their
powers and try even harder to

give

gains

objectives. They will
of un¬
employment is too little demand
for goods resulting from insuffi¬
cient consumer income.
Second,
forces
causing
unemployment
would be mitigated by reducing
the hours worked per week. They
will conclude that both of these
causes of unemployment could be
reduced or eliminated by main¬
taining weekly pay at high levels
and at the same time reducing
weekly hours of work. Therefore,
gain their
reason

that the first cause

,

we

should expect to see a concen¬

trated

for

drive

an

increase in

shorter
Strikes
for these objectives, even in the
midst of serious unemployment
would not be surprising,
con¬
sidered against thes economic out¬
look.
Reference ton l*bor actions
following World War I helps us to

rates of pay and
standard working hours.
basic

appreciate how1

consequential this

could become.

^"

January,

1919, found the

cotton

chaotic con¬
cancelled orders, low

textile industry in a
dition with

production and sharply reduced
prices. There was serious unem¬
ployment in the New England tex¬

this
strike
for
higher wages with shorter
hours of work. They asked for a

tile

communities.Against

background, labor went on

with the pay pre¬
for 54/ hours, and
they won. When it was seen that
lower prices for textiles were not
to be available but rather prices

48-hour week

viously

paid

increased because

of higher wages,

be placed in ex¬
cess of capacity. By May activity
in the mills expanded to a point

orders began to

where a

increase
most of the work¬

voluntary wage

was

granted to

ers.

This added to

further increase

the prospect for

in prices

and de¬

acute, owing to
inability of mills to provide sup¬

mand became so

plies for immediate delivery and
placing of large orders for fu¬
ture deliveries, that buyers prac¬

the

tically disregarded prices.
same story was repeated in
other

pected

industries.

This

most
Instead of ex¬

deflation there51 actually
inflation. ,,

continued to be




on

CORPORATION

CANADIAN STOCKS

the Giant Yellowknife property

the computed in the same way that
have unfortunately led to a wild
Since that the price index is computed in
time and through the ending of order that they will be compar¬ speculative boom in the Toronto
Stock Exchange, which has been
the war, claims and evidences of
able) had an increase in net work¬
followed by an inevitable slump,
ownership on the national balance ing capital per share from $42.25
nevertheless it is now evident that
sheet will ha^e been increased in to
$62.75. Prices today for the'Inthis
area
will "i provide
Canada
an amount approaching $200,000,dex
are
moderately lower than
after the war with another major
000,000 or more. But the assets they were at the close of 1938. The
economically valuable will not failure of the market to reflect the goldfield.

situation
war

as

it

existed when

in Europe began.

increased

have

more

than mod¬

erately since these funds were
spent for prosecution of the war.
A situation like this is illustrated
in economic textbooks by compar¬

ing apples

and nickels.

If it is

assumed that assets consist of one

apple and money'of a five cent
piece, the apple is worth five
cents. If the assets continue to be
but

one

apple

and

ten

cents,

in¬
each

money

long-term influences of retained
earnings does not throw a doubt

the truism but rather leads
another observation which has

upon

to

Due to wartime

a.e.ames&co.
,'y-

INCORPORATED

y:

TWO WALL

STREET

NEW YORK S,

N. Y.

exigencies, gold

mining in Canada has necessarily
declined, but at the close of hos¬
tilities, if not before, government

assistance
will
undoubtedly be
upside price indications.
given fa this industry in the shape
periods of time,- and some¬
of tax iconcessions.
It seems very
times disturbingly long periods,
clear that whatever may be the
this fundamental uptrend can be
market vagaries
of other com¬
offset by deflationary factors but
modities, the value of gold is as¬
ultimately the deflationary factors
sured at least at its present level.

RECTOR

2-7231

NY-1-1045

strong
For

will

run

their

course

and the fun¬

debt

was

reduced by $4,098,891.54.

In the four-year

period from May

1, 1940, to April 30, 1944, the gross
debt
figure has
been
reduced
from $130,171,362.16 to $119,001,208.76.

Therefore, in the difficult transi¬
As frequently mentioned in
uptrend will again as¬
tional period after the war it is
apple acquires a money value of sert itself on market prices.
this column,
the Province of
logical that the Dominion Govern¬
ten cents. If we brush away the
The spring of 1942 appears to
Manitoba has a record unsur¬
ment will
do everything in its
financial smoke-screen and look have been such a turning point.
passed in the Dominion for its
at reality, we find that at the From the early 1930s there were power to stimulate production of
capable management of its fi¬
the yellow metal, and even if the
close of the war each dollar of three strongly deflationary forces
nances
and economy.
But the
building of a northern railroad
claims and ownership will have affecting stock prices.
market value of its obligations
One was
were undertaken in the nature of
behind it less than one dollar of taxes. For the years 1932 to 1935,
has suffered in the past because
a
public works project, in line
assets
based
upon
1939 prices. inclusive, corporations were sub¬
the province has been
loosely
with the Dominions full employ¬
Since there is unlikely to be any
classified as just another prairie
ject to a normal tax of 13%%.
ment policy, it would undoubtedly
wholesale cancellation of claims, Taxes
were
progressively
in¬
province. However, the finan¬
the national balance sheet would creased until they have reached eventually be justified on an eco¬
cial community is now begin¬
nomic basis.
be brought into balance by an ul¬ the maximum of 40% normal and
ning to make a closer appraisal
-With regard to current develop¬
timate rise in the dollar value of surtax and 95% excess profits tax.
of
this
situation
and
conse¬
the assets. The resulting tendency In connection with the discussion ments, the recently issued sum¬
quently in the recent market
would be for the dollar value of of full wartime taxes during late mary of the Manitoba financial
decline the Manitoba issues not
past fiscal year
business assets to rise and for the
1941 and early 1942, the maximum results for the
.•only held firm but improved
dollar value of assets behind each
slightly in seme cases.
possible taxes were seriously con¬ again makes excellent reading. In
share of stock to become greater. sidered and discounted by stock addition to a record surplus of
During the past week the mar¬
$2,697,155.42, the
province set ket continued firm with an ex¬
Interest rates are considered in prices. Clearly we have now come
aside a further payment into a
to the point from which the only
cellent undertone due to the re¬
this discussion only from the point
Reserve for War and Post-War
moval of many of the political
of view of security prices. During possible change in corporate taxes
Dur¬
is a lowering of the rates. Look¬ Emergencies of $1,500,000.
1938 the average yield on long(Continued on page 795)
ing the year the gross provincial
term corporate bonds, as measured ing ahead from the vantage point
of the early 1930s a future rate
by Moody Indexes, was 3.5%. To¬
of 40%, or 35%, would look de¬
day the comparable yield is 2.8%.
Translating this into terms of a flationary. However, with current
rates in effect a possible reduction
3.5% bond with a 50-year matur¬
&
to a straight 40% normal tax, or
ity would mean that a price of 100
less, Is a favorable influence.
in 1938 would have advanced jto
64 WAIL STREET, NEW YORK 5
A second strongly deflationary
approximately 120. This same in¬
Whitehall 3-1874
fluence works
on
stock values. influence upon stock prices was
the fear of war until the fall of
Other
things being equal,
one
1939, and then into the spring of
dollar of earnings or dividends is
1942 the fear of United Nations
worth more today with lower in¬
terest rates than it was in 1938 losing the war. Dramatic periods,
such
as
were
associated
with
when interest rates were higher.
Munich in 1938, the German inva¬
canadian securities
During recent years common stock
sion of Czechoslovakia and the
prices had been so strongly in¬
! Italian invasion of Albania in the
fluenced by other forces that the
creases

to

then

damental

Taylor, Deale

Government

effect
t

of

lower

have not been
is

an

rates

of

return ; spring of

reflected, but this

upside influence that will be
■V

1

1939. and again the few

preceding the outbreak of
(Continued on page 794)

weeks

♦

Provincial

•

Company

Municipal

*

Corporate

^

Thursday, August 24, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

794

operation for some time,

been in

Peace And The

"Going Concern Value"

Longei Term

and

results

the

reassuring;.

are

of time and the

With the passage

accumulation of reserves, bankers

In Bank Examination

Outlook For The Stock Market
on

Now, not only is victory
assured but victory over Germany

fears.

The absurdities involved in ap¬
Normally a reduction in
savings can absorb very little of praising operating banks on the
basis of market values led to a
the impact of a decline in income
payments. In the extreme period series of extended conferences be¬

peak.

changes
the

eliminated.

was

terms

Group
be

of

Under

this
agreement,
(those judged to

-

bonds

1

satisfactory bank investments)

appraised at cost less premium
assured within a rela¬ from 1929 to 1933 income pay¬ tween State and Federal super¬
declined
approximately visory authorities in the spring amortization; Group 2 bonds, that
tively short time, and the "Rising ments
and summer of 1938. The so-called is, bonds not in default but judged
Sun" is setting. While there will $36,000,000,000 and reduction in
be many problems of peace, the savings absorbed a little over $6,- "Uniform Agreement" by which to be unsatisfactory bank invest¬
Under present cir¬ commercial banks are still exam¬ ments at a convention value2; and
destruction of the armed might of 000,000,000.
the enemies eliminates a bad in¬ cumstances a reduction in savings ined, grew
out of these confer¬ defaulted bonds and stocks, at
could absorb more than two-thirds ences.1
As so often happens in market. Although not covered in
fluence.
are

appears

factor

deflationary

third

The

background.
and probably a
lot of both, investors have been
apprehensive about many of the
policies pursued by the New Deal.
the

was

Right

political

wrong,

or

of

decline

dollar

in

consumer

1932-33.

with

in connection

discussed

and

ence

to

be

Industrial

Dow-Jones

,

from the current rate of about 5%.

Cushions

Some Important

If with the end of the

Up until now I have discussed

positive factors that assert upside
influences upon stock prices as
we progress into peace. We should
also
consider
some
important

that will
soften the impact of business con¬
traction and earnings decline,
cushions,

it

as

were,

profit taxes
half from
leave

1944.

of

restriction

enforced

output
produc¬

which will be released as

taxes

$9.50

at

approx¬

estimated

this level

for

of earnings

the average dividend would likely

continue at the current rate. There

each

a

after

the

With

substan¬
tially higher rate than has pre¬
vailed during the war boom. This
operating at

excess

are

the current rate would

net

imately

would

would be

war

eliminated, a de¬
cline in pre-tax earnings of one-

(1) If adequate plant, labor and
materials were available, industry

v

all

not

be

increases

some

ting the few declines.
of the

offset¬

A study of

individual

companies
the Dow-Jones Indus¬

making up
trial Average leads to the conclu¬
sion that $5.50 would be the mini¬
annual dividends under any

mum

interest
rates
were
than they are today and
are expected to be during the re¬
conversion; asset values of the
recovery;

stocks

political
much

ket

is

bound

mar¬

be

to

greatly les¬
production.
sened by the smaller effect upon
(2) Production and employment
generally expand quite closely to¬ earnings in view of present and
gether. Beginning in 1942 this be¬ possible taxes, and the unchanged
to small decline in dividends.
came
impossible.
Most of the
available people were at work and
(6) The last of the cushions
the
labor
supply could be in¬ against the impact of reconversion
creased very little with the con¬ to be considered is the level of
withdrawal

stant

of

into

people

stock prices.

the services. Many people are now

At the current price
of 145, the Dow-Jones Industrial

employed that would not be work¬
ing under normal conditions. Not¬

Average
would
yield
approx¬
imately 4% on a dividend of $6.

withstanding this there could be
employed
at
current
business
levels performing functions now

If

eliminated

of

people

millions

if

of additional

they

the

spect,

spring

price for the

approximately 135
ford a yield of 4%. A yield of 4%
would be approximately 1 Vz times
bond yields.
This is a conserva¬

light of this comparison, it would
appear that the stock market is a
sound value at

and

defensive

day than it was

comparable

exceeded for

It is

130-35

least

war

dollars have been much

plentiful than man hours.
Payrolls have increased on an an¬
nual

basis probably more than
$25,000,000,000 in excess of what

they would normally be in rela¬
tionship to the volume of employ¬
ment.
These extra payrolls can
be

eliminated

with

tionary effect

upon

little

defla¬

the civilian
The surplus
income becomes principally ab¬
normal savings and increased idle
bank deposits.
(4) Consumer incomes and con¬
economy as a whole.

>

years

expenditures
generally
closely together. During the
1936 and 1937 consumers

saved

an

sumer
move

,

average of about

$8,000,-

000,000 a year. Savings are now
running at an annual rate of more
than $25,000,000,000 in excess of
the pre-war yearly average. This
suggests

that

incomes

consumer

decline by this extra amount
with consumers still spending ap¬
can

proximately
now.

This

one-third

as

is

over

much

as

they

are

substantial, almost
the

1936




to

1937

and

would be at
probably more

accurately. 135-45.

1943,

the stock

saw

"peace scare."
We were then completely unpre¬
pared for the ending of the war.
the

by

first

real

reconversion

will

end

war

economic

be

have

forces

when

true
The

comes.

upside
become

In view of the improved

stronger.

circumstances
are

difficult and pro¬

more

than

longed

have

would

that

the

the

probabilities

market

reflect

can

all of the war end problems at
higher level than last winter.

a

other

reviews

the

capital,

broad

back¬

judge
These

are

conclusions:

my

"sound

estate"

of

computing
Federal Deposit

the

but

value

in

couraging
tion

of

substandard

earnings
10

a

of elimina¬

program

a

at

assets

minimum

a

of

out

of

rate

year.

Elimination

of

a

year

of

out

grew

the

perplexing dilemma presented to
the supervisory authorities by the
large amount of "Other Real Es¬
tate"2 held

by

Since

banks.

some

the real estate market is uncertain
at

best, and there is a tendency
for banks to acquire real estate in
where

areas

clining,
ties

the

de¬

are

supervisory authori¬
quite properly skeptical

of the capital

long

values

the

are

as

figures of a bank as
considerable dollar

any

volume of "Other Real Estate" is
included
a

in

bank

the

to

To

force

"Other

Real

assets.

its

sell

Estate"

immediately might result
unwise sales, and to force an

immediate charge-off of the
amount

bank

entire

result in showing a

may

insolvent, which even on
liquidating basis might work

a

as

Another

out.

immediate

the

sales

satisfactory assets is
function

which

should not

assets

A program of

bank
reasonable period

unsatisfactory

during

a

the advantage of not

has

of time

un¬

managerial
supervisors

a

bank

assume.

off

writing

concentrating all of the losses in

which

in

year

they

the

at

be

may

time

and

requires

allocation from profits
which will deter the

same

an

currently

excessive divi¬
general, force a
policy of conservatism, One dan¬
ger in such a program is that the
10% minimum elimination will
tendency

dends

than

more

a

again in
For

a

to

pay

in

and,

decade

long period prior to the

Average

sold

never

Industrial

below

ap¬

proximately 14 times earnings at
its

yearly low except in the ab¬

normal
age

case

of

1937, and the aver¬
low times earnings ratio was

near

15 to

16. At the level of 145

the average is
selling at
current earnings.

15 times

Approximately

135 for the

average would

times earnings.
ket

as

a

The stock

whole

14

be

mar¬

is

clearly con¬
servatively priced against current

earnings.
Prpbably

a

more

reliable

ap¬

proach for determining a sound
value for the market than deter¬
mining absolute valuations, is a
comparison
and

of

the

background

relative

influence

age declined to

a

to

and

respect

indi¬

to

One's

over-all

shocks

expected
and

be

must

generally

allowed

successful investor.;
As

by

practical buying

was
considerably below the
lowest level expected
during the
reconversion; earnings and divi¬
dends were running below the

the

matter of investment horse-

a

it

sively
time

for

is unwise

upon

when,

wrong,

one's
if

to rely exclu¬

judgment at

a

prove

you

position

your

events

would

ap¬

stupid.

pear

(2)

The

serious aspects of
re¬

to

transitory.

prove

(3)

Since

the

spring of 1942
time has progressively raised the
floor

of

the

canyon

sion, made shorter

of
the

reconver¬

period of
readjustment, made surer, steeper
and more prolonged the subse¬
quent phase of recovery and ex¬
pansion.
(4) From now into the recon¬
version difficulties the stock
ket

is

(5)

'

Longer

prospects for
tion

of

we

term

appreciation
stocks are

common

There

upside

could- create

than

mar¬

unlikely to decline seri¬
from
recent
reactionary

substantial.

in periods

In

are a

combina¬

influences

that

higher stock prices

had at the last bull

ket top

mar¬

of 1937. The Dow-Jones
Industrial Average then reached

approximately 200.

a

has much

bank

to

of high earnings.

"Going Concern Value" Defined
The term

"going concern value"
theory
of
valuation
whereby assets are appraised acT
cording to their contribution to
covers

the

a

business

rather

enterprise

than upon their resale value, and

whereby both the cost of depreciT

ating assets and business losses is

systematically charged to expense.
The
illustration
most
likely to
to mind in

come

connection with

is

that

of

highly-

only

fraction of their

a

cost.

The almost universally ac¬

cepted

practice in industry is to
such machines at cost less

carry

accrued

depreciation,

it

as

is

manifestly incorrect to charge the
of their cost to the
period in which they were in¬

greater part
stalled.

Thus

at

given time

any

the depreciated book value shown
the balance sheet has

on

direct

no

relationship to market price, but
this is regarded as sound account¬
ing as long as the depreciation
policy is adequate. It is obvious, of
course, that if an ultimate capital
charge is to be avoided the entire

cost must be absorbed

and

into profit

loss during the useful

life of

the machines.

Consequently, one
of the most important functions of
the auditor is to ascertain that the

depreciation policy will result in

a

write-off of the entire capitalized
cost of the various assets during
their useful life.
A

11

>■

,

the theory of
"going
concern
value,"
which
there is a tendency to overlook, is
that market appreciation should
corollary

be

not

of

reflected

in

quires

asset

an

value.

book

To be sure, a company
on

a

which

ac^

favorable

basis will have lower depreciation

charges than would otherwise be
and profits will thus be
increased, but this fact is only re¬
necessary,

flected

books

the

on

profits

when

the

This
particularly, important in times
such
as
the present,
when the
shortages caused by the war have
forced the resale prices of much
actually realized.

are

is

equipment beyond their depreci¬
To

write

ated

book

such

assets

now,

but will increase the neces¬

values.

increase

will

A

later.

write-ups

dividend

.

u,i

failure.

elimination of certain
types of substandard assets have

for

liberal

based upon

up

profits

depreciation
policy
profits resulting from
is
an
invitation
to

charges

sary

<•

number of States programs

a

friction.

a

gain by accelerating the program

of periodic

Reserves for Losses
The

1

For

detailed account, see

a

Annual

the

Report of the Federal De¬

Insurance Corporation for
ending Dec. 31, 1938, p.

posit

of

the

value."

61-78.

latent losses

Each issue of Group 2
is

securi¬

appraised at its average
value during the 18 months

market

preceding the examination. These
average prices are shown in the
handbooks of the leading rating
services

and

consist

of

the

mid¬

point between the highest quota¬
tion' and
the
lowest
quotation
available—with a one-month lag.
On. unlisted

time

securities

the

same

period is covered, but end-

ofr month
taken

highest
which
When

quotation^

as

base

a

for

only
are
determining

prices from
mid-point is figured.

and
the

taken

place, the bid price is used.
3

"Other Real Estate" is real

tate

other

conduct

than

that

used

in

es¬

the

of the

banking business,
in almost all cases received by the
bank

in

settlement

viously

contracted.

Estate"

is

iners

as

referred

O.

R.

E.

of debts

pre¬

"Other

Real

to
7

by

exam¬

for

integral part

of

few losses

cumulation

being realized,
accruing, an ac¬

are

are

of which

be

can

ex¬

pected to become evident in later
periods of
profits
have
of

the

If the
years

disbursed in the form

been

taxes

business.
prosperous

poor

of

and

dividends

(or high

salaries), the existence of the en¬
terprise will be placed in jeop¬
Even though an acceptable

ardy.

plan for absorbing losses must,

of

be adjusted to meet the
needs of the industry and the par¬
course,

ticular

firm,

eralizations

lowest

actual sales have

no

an

"going concern
Even in good years, when

theory

very

ties

provision

systematic

bad debt losses is

the year

2

more

the deflationary forces of the
conversion period are
likely

liberal period in
write off substandard
is

years

occur

■

maximum.

the

become

to

assets,

in

securities.

levels.

in

tend

which

vidual

ously

range of 125-30. At that time busi¬
ness

cau¬

particularly

level

spring of 1939
Industrial Aver¬

Dow-Jones

magni¬

to be

Ten

upon

stock prices now with
periods
the past.
In the

the

one

tious in his investment approach,

sense

Dow-Jones

cause

it is in such periods that the un¬

1937-38.

the

war

tude should

new

a

praisals of individual parcels and
eliminates
one
source
of

thus

for not forc¬

reason

is that
timing of the disposition of

ing

most

be sold for

Assets

10%

important of all,
eliminates the con¬
stant haggling between the exam¬
iner and the banker over the ap-:
Perhaps

this program

specialized machines which could

Substandard

The program of writing off sub¬
standard assets at a minimum rate
of

they

which

Estate"

Real

formerly did not care to consider.

depreciation

estimated

against which I would
the outlook for securities.

ground

real

typi¬

Insurance Corporation and several
State banking departments are en¬

the

Conclusion
This

examiners

cally allow the

in

November,

market complete a decline caused

ratio

a

of market declines in 1931-32 and

more

range

under

ratio

prior to the war only for short
periods during the extreme phase

this

higher level to¬
five years ago. A

a

investment position should reflect
this attitude of caution, because

soften

impact.
Employment
and payrolls generally move quite
closely together. However, during

In the

$5.50, a
Average
would af¬

between payrolls and employment
shows
another
area
that
will
the

prices

values.

(1) Peace will usher in

Industrial

peacetime conditions.

(3) Glancing at the relationship

1939

of

like sound

looked

set of circumstances. Their

of

tive

r ;

an

and

for a sustained period
of good business and satisfactory
earnings, following the reconver¬
sion, are at least as good, and
prabably much better today, than
they were at that time. In retro¬

the

reduced to

were

minimum

ris curtailed.

is

Agreement,

.

dividends

probable

were
available.
employment vacuum
that will mitigate the decline in
^employment when war production

This

constructive;

more

the

the stock

war con¬

prospects

in

upon

are

approaching peace;
background has become

been much

business

they

trast with the

earnings during the readjustment
period. The impact of a decline

It will lessen the decline in

than

lower

were

threatening acts of

now:

ally offset, in part, the downward
This will cushion the im¬

pact.

market

the

higher

The

trend.

of

contemplated during the re¬
conversion and substantially less
than expected for the subsequent

reasonable assumption of probable

war

effects

rates

declines, will natur¬

tion for

the

of

(5) Referring again for conveni¬

specific to the
Average,
the political outlook, this cycle earnings before taxes are running
has definitely turned and is now in the neighborhood of $35 and
a favorable influence.
after taxes at about $9.50.
Divi¬
There is one common character¬ dends are currently being paid
at
approximately the $6.30 rate
istic of all three of these factors:
Up to about the spring of 1942 of 1943. If pre-tax earnings de¬
cline one-half with the ending of
they were strongly deflationary in
their
effect
upon
stock prices. the war and present war-time tax
Subsequently they have become rates remain in effect, earnings
upside influences.
Three defla¬ may approximate $7.50 to $8.00.
tionary forces which for a period With this decline in earnings there
of
years
onset the long-term would be only a very few divi¬
growth factor, are now pulling to¬ dend cuts with the average prob¬
ward it.
ably remaining near $6, a decline
,,
As

such cases, a

considerable amount
incomes equal to that experienced of compromise was involved in the
from
boom
1929
to
depressed final conclusions, and a part but
a

istic and entertain offers for their
"Other

(Continued from first page)

(Continued from page 793)
Sept. 1, 1939, bring to our
minds how disturbing were those
war

tending to become more real¬

are

1.

It

is

few

a

broad

be made

can

much

-

the
greater) if the

easier

chances of success

gen¬

here:;
(and

plan is started in a period of pros¬
perity so that an adequate reserve
is available to chafge off losses as

they become evident.
In fact, a
plan started in a period of poor
business is foredoomed to failure
if

a

liberal

provided

capital charge is not

at the

outset to cover

accumulated losses.
2.

The

plan

should

be

simpte

Volume

The

and flexible.

straight¬

more

the

plan, : the greater is
the chance of its being compre¬

forward

hended by the entire organization,
and the better the chance for in¬

managerial
decisions.
Complicated and rigid accounting
procedures, in particular, may re¬
sult in confusing important issues.
Since the purpose of the reserve
is to provide for losses not yet
determined, the more flexible the
telligent

the more

procedure,

accounting

likely the plan is to function
smoothly during troubled periods.

important of all, the
high enough to build

3. Most

at

least, to appraised values, but
here

even

valuation

one

simple and flexible.
Individual parcels of real estate
are subject to so many accidental
developments that the margin of
error in appraising any one piece
is

ance

the charge in any

allow-; the

more

the

been

tive

tivity

foresight

unusual

required

are

prosperous years, when
experience over the short run is
favorable,
to
provide
reserves

during

through

enterprise
major depression.

to carry the

adequate
a

Special Problems of Banks
policy in

In most businesses the

regard to depreciation, including
the valuation of inventory, is a
major question and the handling
of bad debts a more or less im¬
portant side
issue; while with
banks the depreciation on the
bank
building is
a
relatively
minor item, the solvency of the

depending upon the policy
in
providing for losses.
This
problem is accentuated by the low
and
declining capital ratios of
banks.
In many banks the equity
bank

capital is spread so thin that there
is very little margin to absorb an
accumulation
of
losses.
Thus
than most businesses,
heed to be conservative, which as
banks,
a

more

practical proposition consists of

the

assets

substandard

of

elimination

(either by collection, sale,

charge-off,

or

adequate reserves)

in prosperous years, as

well

as

the

creation of reserves for accruing
losses.
The Bureau of Internal

this in
the current practice which allows
has

Revenue

banks

to

purposes
reserve

ifoa^income tax
periodic accruals to a
deduct

for losses.

Whenever

the

possible,

theory

general
in

recognized

the

same

that followed
of examination

as

report
be followed in

the bank
accounting. The theory of "going
concern value," as applied in bank
examination, will work more sat¬

should

allocated

charge-off is that this
if not properly safe¬
lends itself to manipu¬

accounting and
record keeping, and those cen¬
tered around the computation of
around

guarded,

In the past there has been

lation.

tendency

allowances to

their

own

ad¬

abuse,

dividends—if in¬
tax penalty in¬
volved in: current income tax
regulations is not sufficient to
prevent this.

'non

'

low

to assets

rate

periodic accruals to

the

a reserve
These different meth¬

for losses.

(1)
be

to

into

fall

ods

three main groups:

relatively high rate could
applied against assets judged
be unsatisfactory for banks;
a

relatively low rate could be
applied against all assets judged
to contain any risk; and
(3) a
classified system of rates could be
(2)

a

that is, a very low rate
applied to prime assets,"

used,

could be
and

progressively

higher

rates

vary

would

regular day-to-day losses as well

accumulation for
business
depressions.
Further¬
more,
banks in areas subject to
extraordinary and unpredictable
provide

hazards

in

set

their

build

which

droughts or severe
one
industry) should

enough

high

rates

to

for the losses
recurring but unpre¬

reserves

up

are

alternative

first

of using

As

time.

to

as

soon

as

that any consid¬
of the economy in
the community is going backward,
the rate should be increased to

there

signs

are

which

losses

for

prepare

much

there

is

making

said

be

to

somewhat

assets criticized by the ex¬ ^called for by the mathematical
aminer as a base would have the computations in years of extraor¬
practical Advantage, for a new dinary prosperity, on the theory
system, of being easy to justify, that it is in such periods of opti¬
mism that commitments are made
as the relatively high rate would

which losses later develop.

be

upon

suitable

should contemplate
individual
banks
when necessary.
If after several

centage
of questionable
would be required to set

Real Estate" and

"Other

"Poten¬

tial Other Real

instead

ample,
and

real

estate

,

.

.

The

plan

for

changes
years

have

beyond what
the
annual

accumulated

reasonable,

seems

the reserves

operation

of

charge should be adjusted down¬
ward.
On the other hand, if the
accumulated reserve

seems

to be

adjusted
upward. It is axiomatic that the
larger the accumulation of re¬
inadequate it should be

during

serves

periods

of

pros¬

perity the less is the likelihood of
the necessity for a capital charge
when losses develop later.
Under
the theory of complete elimina¬
tion
of substandard
assets, the
ultimate

enough

should be large

reserve

all

offset

to

of

those

should be allowed to
accumulate
until it provides a
assets,

and

comfortable margin of
for losses which may
assets

judged

now

protection
be

satis¬

factory.
Conclusion
Bankers should welcome

such

a

change in viewpoint. A theory of
bank accounting and supervision
based

upon

substandard
mulation
dividends

of

the
assets

elimination

reserves,

and

of

and the accu¬

income

limit
taxes in

will

good years and will thereby in¬
crease the margin of protection in

will

open

be

to

from

discount

distinct

a

pre-war

their

prices; they appear to
the

of

one

very

best

me

bar¬

gains available today. The "crowd"
are
neglecting them and act as
without, however, any if the war would last forever, but
there will

be

few wise persons

a

begin to pick them

will

28,

at

As
am

I

about various citiels I
greatly impressed with the
go

number of vacant small stores.
some

cases

place on the drafted

The lectures will take

Stores

Vacant

Institute of Fi¬

present and post-war taxes.

on

good profit.

a

In

the proprietor has been

the

into

service

or

has

days indicated below at 3:30 p.m.
at the Board of Governors Room

found he could make more money

Stock Exchange,

help problem and the difficulties
of
securing
merchandise
have

of the New York

11 Wall Street. Tuition for the se¬

in

In other

work.

war

cases

the

ries is five dollars.

compelled the closing of the store.
Probably 250,000 of these stores
"The Present Federal Tax Sys¬ have been closed during the past
tem"—Roswell Magill, Attor¬ three years. In the meantime, the

Aug.

28—

sales

&

total

retail

Moore; Chairman, Committee

have

constantly

C

ney,

on

Swaine

t h,

r a v a

Post-War Tax Policy

—

the

country

increasing.

Most of these stores will reopen
at

Sept. 5-—
"Estate Taxes"

of

been

Weston Ver¬

The proprietor of a
many advantages
of a large store.

profit.

a

small

store has

the

Attorney, Mil bank,
Hope; Chairman, The small store proprietor usually
Taxation, Ameri¬ leases, and hence is in a position
to change his location when cir¬
can Bar Association
cumstances make it desirable. He
Sept. 11—
is exempt from various labor re¬
"Individual Taxes"—Harley L.
strictions and taxes to which the
Lutz, Chief Economist, Tax
large store is subject. Most im¬
Foundation; Chief of Staff,
Committee on Post-War Tax portant, he can buy nationally ad¬
vertised, single-priced goods and
Policy
sell them in competition with the
Sept. 18—"Tax Simplification"— chain
and
other
larger
stores,.
Robert
W.
Wales, Assistant
Furthermore, there always will be
Tax
Legislative
Counsel, a
large number of people who wish
United States Treasury De¬
to deal with a small neighborhood
partment
store rather than be lost in a larger
Sept. 25—
department store or bullied by the
"Corporate Taxes" — Ellsworth clerk of a chain store. The "crowd"
C. Alvord, Attorney, Alvord are now neglecting these vacant

Jr.,

non,

Tweed

over

owner

and

of

Section

,

^

.

'

nance,

D. stores; but the few wise people
who
are
re-renting them
and
starting a small business will some
U. S. Chamber of Com¬ day be rewarded.
-.y\

merce

''

and

Alvord,

Washington,

C.; Treasurer and Chairman,
Committee
on
Federal
Fi-

1

:

v

Oct. 2—

|
Getting Jobs

:

I do not criticize anyone for
■I; "Post-War"—Emil Schram, Pre¬
sident, New York Stock Ex¬ giving up a good peace job to go
into war work if the motive is
change.
The

Institute

is

also

announc¬

When,

patriotic.

however,

the

fall term schedule
of
courses
in general business, in¬
vestment analysis, and brokerage

get more money, I
believe that the person is merely

procedure.

sooner or

ing

its

motive

take
to

August

peace

not a

redemptions in the
first 14 days of August amounted
War

bond

$129,622,063, compared ; with
sales of $147,292,098, the Treas¬

Already many of
people are seeing their mis¬
and are trying to get back

change.

these

Redemptions

In First Half of

to

"following the crowd" and will
later regret having made

the

War Bond

is

with
U. S,

jobs.

Certainly, this is

patriotic thing to do except
the approval of the
Employment Service.

to

Those

who have

their old employers

local^

been loyal to

and have not

practical ury's daily statement showed on "followed the crowd" into new
advantage for the private banking Aug. 16. The Associated Press re¬
jobs, just to get more money, will
system is that under the strict in¬ ported that the explanati&i1 vwas
soon feel repaid for their loyalty.
terpretation
of the liquidating given that cashing of war bonds
Hence, whether we consider real
usually is heavy following the
poor

years.

Another

theory, a bank which had a sud¬
den accumulation of losses large

,

In some cases the purchasers
operate
them
themselves;^

up.

City, has announced a course of
six lectures, beginning on Aug.

result in the
to

at

20 Broad Street, New York

nance,

larger

only

applied to assets which are not
for banks.
This method
would have a further advantage
in that banks with a large per¬

of the rate

approach this period.

The New York

a

contributions to reserves than are

most of these

again after the war. They then
have just as good, and per¬
haps better, business.
Many of
these filling stations are for sale

Taxes, Now & Post-War

will
for

that

stations

filling

war.

only

while in others they will sell them

Likewise,

develop.

almost surely

sense

seems

may

Lecture Course On

an

(i.e.,

declines

hand, it

who will soon

covered.

gasoline

up

great activity.

periodic charges to expense
should be adequate to cover all
to

exchange

Turning to possible future de¬
velopments, nothing has occurred
to change the opinion that the
market will continue to display a

The

as

closed

excep¬

the

before the

case

common

supply of free

we

as

the

was

and

an

the

firmer tone

be

than

On the other

further depreciation

which arises
rate is exactly

to

stations

im¬

with

restrictions, fewer filling
can profitably exist today

still

be

impor¬

or

the road reduced by

and

are

middle of October, it
will not be surprising to see a

The first question
are

an

service

it is self-evident that

on

market,

the
will

there

tional

by

Rate

losses

of

parity

to

dollar

since

the need for a con¬
structive program to improve the
quality of the assets.

what

and tire

expectation

the

overhanging

agement to

ft

basis of 914%

minent restoration of the Cana¬

dian

cars

millions

exchange

an

on

up

establishing

with

few months ago

a

has

owner

tant war work.

Of course,

ternal bonds
on

the

of busi¬

lack

the

because

into

gone

Speculative purchases of in¬

charges would not only
the reserve, but would
also direct the attention of man¬

in

dis¬

unchanged at 9 15/16%

was

higher

bank

greatly.

The

dollar

Canadian

the

and

has

read

stations.
In
most cases the pumps have either
been removed or boarded up. They

higher prices,
inquiry for

The

of the

filling

or

would yield heavier
banks which have
assets of lower quality and would
automatically
result
in higher
charges for an individual bank in
case its assets deteriorated.
These
build

vacant

is

be closed for

erable segment

could

in any one year

these

cities.

our

one

communities

more

column

ness

for

charges

or

my

may

lower groups

contribution to re¬
be obtained over a
long period by the proper adjust¬
ments of any one of the three
alternatives, the charges against
total

earnings

where

of

every

in¬

ing good ye'ars, while the higher
rates on assets classified in the

dictable

serves

thousand

also

Ontarios.

longer-term

accumulation of reserves dur¬

applied on the groups which con¬
tain greater risk.
Although the
same

at

was

that

sure

am

woods, but also in

suburbs

ternal issues continued in the dol¬

of the first

would result in

the better grades
an

bases

which could be used in computing

*




a

There are, of^ourse, numerous

and

demand

there

and

Basis of Computation of Reserves

rates

I

the

in

active

the

count.

heavy

of

note, but among the pro¬
Albertas, Saskatch¬

fair

in

classified in

the payment of

combinations

did

Nationals

and

found

and British Columbias were

ewan

drums

ing has been reached) of valua¬
tion reserves to any capital ac¬
count which would make possible
the

(Continued from first page).
-Not
.only
are
these*

stations.

vincial issues

while minimizing their
disadvantages. The application of

however,
can be eliminated rather easily by
strict
regulations which forbid
the transfer, even if indirect (ex¬
cept when a predetermined ceil¬
This

vantage.

was on a

little of

two plans,

the part of certain

on

But ac¬
small scale. Direct

disturbing factor.

a

Dominions

which saves

most of the advantages

Estate," 4 for ex¬
of all mortgage
accounts, as the
basis
for figuring
the reserve,
Accounting for Reserves
would not only result in greater
A large valuation allowance (or
fluctuations,
but
the
charges
unallocated charge-off) has cer¬
would be particularly heavy in
tain
definite
advantages
oyer the years of poor business, when
either specific reserves or write¬
the bank is least able to absorb
downs in handling unestablished
them.
In many banks there are
losses.
A valuation allowance is no criticized assets in good years,
the only satisfactory method of and
consequently there would be
providing for
losses in loans no charges against earnings, even
which, as yet, have shown no
though experience indicates that
signs of weakness.
Even though some of the loans acquired in such
it seems evident from past ex¬
periods will later develop into
perience that some of these loans losses.
will ultimately go bad, there is no
The use of a relatively low rate
basis for singling out specific ones
applied to all assets containing
to write down.
Even when loans
any risk is better than using only
begin to show signs of weakness,
the lower classifications as pro¬
it is impossible to estimate the
vision would be made in good
exact amount of the loss,
and
years
for losses which become
when it is definitely established
evident in poor years, but this
the reserve or write-down is apt
method would have the disadvan¬
to prove to have been either too
tage of not providing automati¬
large or too small. Thus, a later
cally for higher; charges against
adjustment is almost always re¬
earnings in the weak banks, nor
quired.
While such adjustments would it provide for increasing
are
not serious, they clutter up
the books and make a clear-cut
4
"Potential Other Real Estate,"
analysis more difficult than if the,
that is, secured by mortgages on
simpler method of carrying all
real estate which have a poor per¬
such
transactions through
one
formance record
or thin
equity
valuation allowance is followed.
are
referred to by examiners as
A better case can be made for
P.O.R.E.
writing off "Other Real Estate,

the reserve,

anticipated.)

were

fortunate compromise

assets
aside
isfactorily if the banks understand relatively large reserves, and as
the system and make the adjust¬
the assets deteriorated, the charge
ments on their books called for by
against earnings would be auto¬
the program.
In the practical in¬ matically
increased.
However,
auguration and operation of a there are certain serious objec¬
program of reserves, two types of
tions
to
using
only criticized
problems are encountered: those assets as the base.
The use of
centered

than

gressively higher rates on the
lower grade assets seems to be a

method,

deed

policy if the losses prove to

The third alternative of apply¬

sharp operators to juggle valua¬

the need for adequate
Real courage as well as

uncertainties which have recently

objection to the use of a
valuation account or un¬

One

large

adequate to cover all
but
catastrophic losses.
It is
obvious that the lower the capital
ratio,
the
more
conservative
should be the dividend policy, and
the greater

seemed

adequate should adopt a conserva¬
be greater

Following The Crowd

(Continued from page 793)

ing low rates against assets in the
most desirable groups and pro¬

whole may

tion

Canadian Securities

a

re¬

though
the group as a
be rather accurate.

appraisal of

a

up a reserve

(Even

accumulated

formerly

which

serves

given bank as

deteriorated.

assets

bank which has

of property is large, even

rate must be

reserves.

CHRONICLE

THE COMMERCIAL; & FINANCIAL

Number 4310

160

For estate or businesses or jobs, the
most satisfaction in the end comes
beginning
to those who refuse to "follow the
on July 1, war bond sales totaled
Integrity, industry and
$2,272,347,694
and
redemptions crowd."
vision pay good dividends when
"going concern value," such dras¬ $356,653,536.
we
take time to study the facts**'
tic action is not called for if it can
and have the courage to act upon
be demonstrated that the
bank the losses against earnings in a
our decisions.
reasonable period of time.
can in all probability charge out
enough to impair its capital must
be closed, but when the examina¬
tion is made under a theory of

conclusion

of

a

bond drive.

the current fiscal year,

'

i

...

_

—

■"-...-"v. ,j ii-vJu

■

-i-1

o

jcsrTsr,

*r-:'rszr~y

v:

THE COMMERCIAL &

796

in revenue to

average
^

Southern

the

is

ture

so

(Continued from first page)

'

,

struc-

freight rate

discriminatory

grossly

terstate
with

a

Commerce

"Rule or/and

Commission

Ruin" policy

the

general

railroads
their fixed

low that the Southern

failed

to

even

earn

under the lished rate schedules.'; The first;
: ! r ■ ; : class rate in-the South is 76 cents :
An
Official
of- one Nashville per hundred pounds for-100 miles,manufacturer of shoes did point whereas it is 56 cents in Official
duction in recent years

the Southern rail¬

overall
of rates in the South is

Now

roads.

1944

Thursday, August 24,

FINANCIAL CHRONICLE

existing rate structure, b

'

'I.

*

■

that the

out

higher rate

the South;

territory." However, in

shoe

on

under a rate that is;
42% of first class or 42% of 76)
cents or. 32 cents. In Official ter-;

charges during the ten years 1930- manufacturing material to Nash¬
1939 by more than $80,000,000. If ville cost his company $60,000 a

soap

moves

Commission that they are forced to give up this year extracompared with St.
yield to their contentions, $25,000,000
This
is
an
insignificant ritory soap moves on; a rate • of;
resulting
from
5% Louis.
able ways, and accounting for vir¬ promote their political ambitions, higher5 rates, it will mean that item in the total costs of this com¬ 50% of first class or 28 cents. In-;
or else they will force Congress to
these
Southern
railroads
must pany. To gain this • $60,000 the stead • of a disadvantage of 76; to
tually all of the economic ills of
take over the determination of
either go bankrupt or recover the company would have to lose its 56 the actual disadvantage is only >
the South. The Governor of Ten¬
rates by legislative action.
This $25,000,000 from rate increases favorable rates on manufactured 32 to 28. Since more than 50% of
nessee has been the principal in¬
is the first important challenge
wherever they can be made.. Ob¬ shoes to all parts of the country, the people*.of this country live in;
stigator of the agitation by the
to the dignity and honesty of the
Southern
Governors
to
secure
viously,
the
present" favorable thereby costing it many times the the Official territory and' only;
Commission in its long history
commodity rates could not con¬ $60,000. Of course, this company 16% live in the South, the smaller
uniformity of Southern freight
of fair, impartial and construc¬
tinue in effect on the existing low would like to keep its favorable volume of soap handled in the.
rates with rates in Official terri¬
tive regulation of rates in this level.
Yet an increase in these rates on shoes and at the same South would seem to make this
tory. Undoubtedly, the political
It is a challenge that commodity rates would do im¬ time save the $60,000. But uni¬ rate quite favorable to Southernambitions of certain of these pub¬ country.
must not and cannot be ignored!
lic officials have been the motivat¬
measurably greater harm to the formity would raise the Nashville consumers. Certainly in the South
If the members of the Inter¬ industrial growth of the South to Boston rate by 17 cents per the consumer does not pay any'
ing force behind the position they
hundred pounds, thereby seriously more for soap than consumers pay
have taken with regard to South¬ state Commerce Commission who than any benefits these industries
ern freight rates. Efforts to advise
certainly understand
the rate might receive from equality of affecting the profits of this par¬ elsewhere in the United States.
against Southern industry, retard¬
ing its development in innumer¬

by advising the
it must

.

,

them as to

of

sections class rates. There

structures of the various

fceen

the actual facts have
unsuccessful, the truth hav¬

country—a majority of
whom are from the sections which
the

may,

indeed, be

truth than poetry in the ar¬

more

Nashville

ticular

manufacturer.

:

Furthermore, this company is
making a higher; percentage; of
profit than any Southern railroad.

gument
of
the
Governor
of
against"—are Georgia that railroads are instru¬
to be threatened in this manner, ments of government if they are Its case is cited here since it was
it does explain why certain offi¬
one of the very few Southern in¬
cials continue to state over and then there is little hope, indeed, to be prohibited from earning a
dustrial concerns to ask for uni¬
fair return.
over, time and time again, argu¬ for the American economy.
Another
report
frequently
ments that are fallacious and un¬
There are 3,500 exception rates formity in rates before it under¬
stood all of the implications in¬
sound, until today they have con¬ quoted by the Governor of Ten¬ in the South. This is one-third of
volved. The fact is that this com¬
vinced a relatively large number nessee is the study of "Interterri- all its ratings. Under this system
ing fallen on deaf ears.
This is
not strange to understand.
But

"discriminated

are

at least in the South, torial Freight Rates" by the Board
of
Investigation and
Research
that their claims are true.
The
major contention of the under the Transportation Act of
TVA survey and the
Southern 1940. This study is not confined
of persons,

'

freight rates in
the South are 38% higher than
an Official territory, thereby re¬
Governors is that

the industrial growth of
South, and draining it of its
materials. Now the facts in
the case refute each of these argu¬
ments as unsound and hence un¬
tarding

the

raw

true.

the
has
been at twice the rate of the rest
of the United States, including
industrial

The

of

growth
20

last

the

in

South

years

Official territory.

Southern

overall

general

an

cial

territory
it

in

and,

in¬
which

many

rates

on

moves

higher mile for mile than
in the Northern territory.
The South is not being drained
are

no

,

its

of

since

materials

raw

very

wrote under date of April
1944: "Obviously, you have

agers,

obtained

your

the report of the Board

demned

This

Official

use

territory,
but
instead
points within the

strongly

too

as

con¬

a

glomeration of meaningless aver¬
ages,
with
conclusions reached
through 'trick' rate comparisons,
and by 'studies' made in cheerful
disregard of the flow of traffic.

little of these materials move into

has

Board

of

been

in

free

the

'kangaroo' rates; in other

words, rates upon which no traf¬
South.
'\y^" fic moves, and which are pub¬
In actual practice Southern car¬ lished in order to comply with the
These
'kangaroo'! urates,
riers
have
adjusted their rate law.
structure to meet the industrial which have no effect whatever on
commercial

and

South.
to

of

needs

the

It is of major importance

that

note

ists

other

to

move

Southern

industrial¬

opposed to the efforts of

are

the Southern Governors to

^uniformity of rates.

secure

Indeed, they

been fearful that the Inter-

nave

discrimination
against
Nashville
and
hence
against the South. But the rate
this

as

from Nashville to Evansville is a

vital

which

and

These

unfair

the

work

doubt

-

meaningless

discredit

naturally
the

of

traffic.

move

and

comparisons

Board

and

cast

the objectivity of its

upon

The reports of the TVA
subject to the same criticism."

ambitious politicians
seriously, thereby setting Southerh industry back many decades

since

the

actual

69 cents

The theory of government

that

in

philosophy

rate

September,

1943,

Colorado,

when

Governors

was

set

Denver,

in

Southern

bid

the

unsuccessfully for
the support of the Western Gov¬
their "cause."

for

ernors

The

"It is assumed by many

said,
that rail¬

are

business

private concerns, exist¬
ing because of private initiative.

agers,

That

is

benefit it is done.

the

other
which

.

.

.

No formula

unification with rates

sections
will

be

can

not

in

suggested

actually

crucify

the South!"

The

appeared
Commerce

cent

wholly and completely
false.
Primarily the railroads
are
instruments of government."
.

before

challenge to the en¬
tire system of free private enter¬
prise. If the railroads of the coun¬
try

on

Southern

the

then

the

Interstate

rate

On

major

ernment,

and

to

Commerce

are

free

private enterprise
only.
No effort has been made by the

will

exist in

railroads
or

or

conceal

name

anyone

structure

for the

the South-

Governors threatened the In-




else

to

hide

the fact that Southern

freight rates

•

on

administration of approximately

the other hand,

our

banks become instruments of gov¬

re¬

the problem to

South.

ern

banks, insurance companies,

mines, utilities, and all

Interstate

Governors

tested policy of

flexible

instruments of government

instruments of gov¬
ernment.' When the railroads and

Commission to continue its time-

a

are

a

South

of the

Commission at its

hearings

urge

.

Here is

protest against the arguments of
the

.

industries

industrialists

the
two

taking

from

the

average

are

5%

higher than
rates in Official territory.
(It is
denied, however, that they are
38% higher.)
This additional 5%
means

about

$25,000,000

a

year

present

ad¬

from

Boston.

These shippers know
the

true

rate levels and the academic

com¬

difference

between

parisons of "paper" rate scales.
Furthermore, mile-for-mile com¬
modity rates are lower in the

them

South, often substantialy

giv¬

so,

ing the Southern manufacturer an
advantage that he cannot afford to
lose by an adj ustment of; class
rates

on

On

uniform basis. '

a

other

the

ernor

of

either

an

ingness

Gov¬

exhibiting

Tennessee,
inability or

unwill¬
the; true

an

understand

to

'.V;

;•

,

the

hand,

situation, has cited the following
example on the radio and in the
of how freight rates affect

press,

Southern industry unfavorably.

is

and the northbound rate

/

is

'

these two cities.
Certainly there is nothing in these
rates to hinder this outstanding
Southern industry.."Instead, uni¬
formity in the general rate struc¬
$1.63

between

"Chattanooga, for instance, can¬
not ship flour to Camp Forrest,
Tullahoma, Tennessee,' j u s t 80
miles away, for as little as Min¬
neapolis can ship the flour sev¬
ture; would
raise the favorable eral hundred miles to the
camp."
commodity rates on cotton
to
Now, the rate on flour from
Southern
textile
mills,
thereby Minneapolis to Tullahoma is 49
seriously crippling their ability to cents per hundred pounds, where¬

Nashville.

The

located

in

rate

brick per ton from Nash¬

on

actual

ville to Evansville is $1.90 where¬
the

from

rate

Indianapolis to
Uni¬
formity in rates would wipe out
this advantage of 25 cents per ton
that Southern railroads have given
shippers of brick in Nashville.
The trade area of this large manu¬
as

Evansville

is

$2.15 per ton.

would

facturer

much

become

cost to

The

out

as

the

from

rate

Chattanooga to

Tullahoma is 16 cents per hundred

pounds.
stand

It

is difficult

to

under¬

why the Governor selected

Minneapolis

since

virtually

no

flour is shipped from Minneapolis
to Tullahoma; instead most of the
flour reaching Tullahome comes

from the Middle West.
If

miller

a

in

Chattanooga

should buy his wheat in Minneap¬
olis and have it shipped to Chat¬

tanooga by rail, it would cost him
only 2 cents more than the rate
to Tullahoma

or

51 cents.

Having

received such wheat from such

unnatural

an

he could mill
and ship it back to Tullahoma for
5

source,

cents per

100 pounds.

A miller

in

Chattanooga who would pur¬
his wheat.; in Minneapolis
would, therefore, $e at a disad¬
vantage of 7 cent's, per 100 pounds
chase

consumers.

rates

.

Nashville

of

on

This appears

candy, paper boxes, hardwood
unjust discrimination flooring, stoves—all major indus¬ compared with g hiiller in Min¬
against Nashville. What the critic tries — would be adj usted to the neapolis if .he could sell flour in
Tullahoma.
fails to point out in this case is disadvantage
of the Nashville
be

an

manufactured

scheme, even if these goods should
be shipped to points within the

Surely the Governor would not

manufacturer under the proposed

shoes from St. Louis to Boston is

that

the

$1.93
as

Governor of Georgia

roads

for

is

these

Louis is $1.93 per hundred pounds,
whereas the rate is $2.52 to Nash¬

freight

men,
the traffic man¬
the men who produce the
goods, direct its movement, and
pay the bills, emphatically do not
want Congress to fix rate levels,
no
matter
for
whose supposed

5% higher.
the

free of charge.

$2.33

grant

that the over-all rate structure

if the

Mass., St. Louis, Mo., smaller or else small branch plants
and Nashville, Tenn., are large would have to be established. Un¬
der either result the economies of
shoe manufacturing centers.
On
certain shoe manufacturing mate¬ large scale production would be
rial the rate from Boston to St. lost, thereby raising the ultimate

forth by the Governor of Georgia

"The

even

hauled

>

that class
higher than in Official
(not 38% higher), and
They

are

territory

manufacturing

railroads

Boston,

the TVA rate studies and the

industrialist has stated,

thereby

goods the
vantage of 7 cents.

in" the national economy. Already

ern

cents

dry

to

especially by the Gov¬
ernor of Tennessee, have done in¬
calculable harm to the expansion
of Southern industry. One South¬

76

76 cents per hundred

to

pounds,

ville

ernors,

of

between

would have to be increased from

underlies the Southern Governors'

fallacious

rate

rate

points in Official territory. If the
principle of uniformity should be
applied the rate from Nashville

in- its efforts to find its true place

of

shoe

its

of

materials in the North
Southern

rates

cer¬

"paper" rate that does not apply
practice. The actual rate that
shippers pay from Nashville to
Evansville
on
shoes, hose, dry
goods, etc. is 69 cents, a third class
textile
exception rating. Thus Nashville compete with Northern
has an actual advantage of 7 cents manufacturers.
One of the large brick manu¬
per
hundred pounds on
these
commodities
over
Indianapolis facturers in the United States is

in

pared with 'live' rates, which are

take; these

repetition

gross

Nashville shippers of shoes, hose,

are

arguments by the Southern Gov¬

a

and

purpose.

tinued

of uniformity point to

advocates

the movement of traffic, are com¬

State Commerce Commission may

con¬

tain

structure

rate

the whole is favorable to their

interests.

effort to prolong

,

stances,

prove

Southern

realize-

and

factors

these

that the
on

stand how the existing rate struc¬
In the South rayon is shipped
its politi¬ ture actually works to the benefit
at 60% of first class whereas in
cal existence, this Board, under of the South. To illustrate, Nash¬
the leadership of C. E. Childe, of ville, Tennessee, and Indianapolis, the Official territory it is 71%.
Prior to September, 1940, the
Omaha, digressed from its original Indiana, are the same distance
rate on textiles from Nashville to
objectives to undertake this study from Evansville, Indiana. The first
rate
on
shoes, hose, dry New York was $1.63 by rail
of interterritorial freight rates. In class
whereas the rate from New York
goods, etc., from Nashville to
a letter to the Vice-President of
to Nashville was $2.33 per hun¬
the United States, protesting his Evansville is 99 cents or 30% more
dred
pounds.
The rate is now
attack upon the Southern Freight than the first class rate of 76
Rate structure, Mr. A. J. Ribe, one cents from Indianapolis to Evans¬ $1.63 each way by rail but by
truck the southbound rate is still
The
of the South's ablest traffic man¬ ville per hundred pounds.
In

information from
of Inves¬
ly 105% of rates in Official terri¬ tigation and Research on Interter¬
ritorial Rates, House Document
tory—not 138%.
Much of the tonnage hauled by 303, 78th Congress. If this be your
Southern carriers moves on rates authority, you have been betrayed
that are lower than rates in Offi¬ by a document that cannot be con¬
The

that the advocates
of rate uniformity do not under¬
plied to

to the South.

11,

freight rate level is approximate¬

ratings it is obvious
that illustrations could be multi¬

of exception

would continue to buy

pany

Now, Southern shippers under-;

stand

per

rate

on

hundred pounds where¬

the rate from Nashville to Bos¬

South.

is $1.76 per hundred pounds.
Thus the Nashville manufacturer

the

of shoes has

"Stoves have been treated by the

ton

over

an

actual

advantage

St. Louis in the Boston area,

although both cities are approxi¬
mately the same distance from
Boston

(1177
v.
1189
miles).
Equality of rates would raise the

rate

Mr.

A.

rates

ICC

J.
on

Ribe,

has

stoves

discussed
follows:

as

interterritorially in both di¬

rections. The southbound rates
on

basis

of

the

Southern

scale.

rates

on

are

are

The

northbound

of the

lower-

from

Nashville, to Boston to graded Eastern scale. These con¬
$1.93, thereby makirfg it more dif¬ flicting levels cannot be brought
ficult for Nashville shoe manufac¬ together without hurting the
turers
area.

to

compete in

the

Boston

It should be pointed out

shoes

profitable

Southern

that whether

Nashville shoe manufacturers sell

North

his

or

stove

manufacturer,

market

South.

Stoves

is

in

are

the

made

basis

not in Cleveland. Tenn., and in Cleve¬
only in New England in competi¬ land, Ohio. The rates per ton on
tion
with locally manufactured coal
stoves,
carload,
between
shoes but they sell shoes on a prof¬ these points are $13.40 southbound
itable basis in New York, on the and
$9.60
northbound.
Similar
Pacific Coast, and even in foreign differences exist on coal stoves,
on

a

countries.

One factor that makes

this possible is
roads have

that Southern rail¬
given these local man¬

ufacturers rates that

l.c.l..

and

on

gas

stoves,

c.l. and

l.c.l."

classification

The

of

freight is
usually lower in the South than in

to

the

move

wheat)

through Tulla¬
homa to Chattanooga, a distance
of 82 miles, and then move it back
to Tullahoma for the
at

a

same

rate

or

lower rate than direct to Tul¬

lahoma.

It violates his argument

for rates

This,

higher-graded

basis

railroad

expect a
flour (or

however, has nothing to
the Chattanooga mill con¬

do with

This

cerned.
much

of

its

brings

company

•

wheat

from

nooga

mile-for-mile basis.

on a

St.

into

Louis

Chatta¬

and

Mis¬

souri River

points by barge. The
wheat is not brought from Min¬
neapolis.
The Chattanooga com¬
pany owns these barges and, of
,

course, brings the wheat in at a
fraction of the cost it would have
to pay

if the wheat were brought
by rail from Minneapolis and then

milled

The
is

into

flour

at

Chattanooga.

Chattanooga

mill, therefore,
subject to the rate of 16 cents

per
100 pounds
on
flour from
Chattanooga. to Tullahoma, plus

the very low cost it has of trans¬
adjusted
certainly Official territory. This lessens the porting the wheat from the Mid¬
true that Nashville has had a re¬ "paper"
discriminations
against dle West rin its own barges to
markable expansion in shoe pro¬ the South that appear in the pub¬ Chattanooga." This should enable
are

to their needs. It is also

•'

•

-i

::

*

irj

I

i'V:

J

I

<

..

I -4-t

1

^.

is, •• s ;

'Z

;

i

i

,.■*;•;■

i-'i
i;:.

'• i

-.>'•«

>•

Volume

160

Chattanooga company to

the

flour in Tullahoma at a large

increased

sell

ments

ad¬

culation

number in the United States as a

1.8%, while the

.'

its adver-

compared to millers in
Minneapolis who are subject to
the
rate
of
49 cents
per
100
vantage

flour ? made

on

wheat

to

shipped

4%; the number
of wage earners in manufactur¬
ing increased 8.7%, while in the
country as a whole they decreased
5.5%; the wages paid in manu¬

have

measured?

Thus
the basis of ciradvertising rate is

v

water

that of The New

a

geographical

the

The
mill

with

of the Chattanooga

relations

"Of

decrease of 9.4%.

From

uation,
influence
he

of

the Governor,

on

At

their straw man

prevent!

the United States and is

ern

traffic

ing

any

No. of

of

Percent

Cars

Products

of Total

630
288

9.7
4.4

agriculture—

Animals and products
Products

of

mines

1,693

26.2

of

forests

1,979

30.6

miscellaneous

1,882

29.1

Total

6,472

100.00

to

approving
tenacity, without fully un¬

their

are

(objectives

their

derstanding

or

motives.

Tennessee

of

of the eco¬
nomic ills of the South on the 5%
all

blame

to

higher average of freight
rates that exist in the South.
In
a statement before
the Interstate
Commerce Commission, he said:
"The 1940 United States Census
over-all

capita wealth
Southern States in Southern

showed that the per
of the

Territory is v $1,161,
which is less than one-half of the
national average which is $2,335.
This census also shows that the
Rate

Freight

capita income for the States
represented by the Southern Gov¬
ernors' Freight Rate Conference is
only $317 per year compared with
$573 per year for the nation as c
per

whole.

themselves are

ments
unable

Govern¬

financially
benefit/
other-,,State

such

provide

to

citizens

their

for

The Vice-President of the

as

have been• devel¬
oped for the last century, the pro¬
portion
of
"Manufactures
and
Miscellaneous" traffic to the total
traffic of the railroads is only
When

it is

considered that prior to the

Civil

South
it

easy

the
Southern Railway wrote recently

The Governor

ton, for a haul of 146 miles.
comparable rate in the North,

gross
A

a

distance

nooga

at a rate of $2.09 per

raw-material

ton. Com¬

representing the effort of
Southern railroads to aid

the industry they

develop
have

"I

referred

to

the

fact

railroad
essentially different from

the

that

is not

conduct of

a

I
frequently,
5 cents for a

other business.

that

of

come

to Chattanooga

and I

any

always

pay

of your fine paper.

of

My

to

New

per¬

state

Uni¬
form rates .on all their materials
and
products
would
fit
the
freight-producing
enterprises
throughout the country with
equality of freight rates.

their multitude of different
ditions

better than

no

con¬

garments

of uniform dimensions would fit
the

with

bodies

human

their

"This

agitation
that

belief

a

on

over

Southern

to be based

seems

industrial

de¬

velopment in the South is being

less
favorable
freight rates than are to be had
in other parts of the country.
by

hampered

The fact of that matter is that

:

a

preachments of others.
; .
"It is high time, in view of
irrefutable facts, for
Southern people to take stock
of

themselves,
and
their surroundings.

y

an

on

up

would

mean

development in the
not being held back

contributed greatly to that prog¬

by

ress

providing service, and
stimulate

that

rates

of

raw

free

the

much

■M scare

materials

and

in¬

dustrial products.

Illinois

"The

Central

is

railroad.

north-and-south

a

As

such .it is naturally interested in
the

free

flow

of

in

commerce

South, and in

directions

both

between

the

North and the South.

the result
cause—of industrial

"Freight rates
—not

the

development.

adjustments and do

are

As

business

der

in

these new

into

the

the

/

lines, North and South, the Il¬
linois Central has never lost an

prospect

account

on

rates."

and

from

a

alone

assured.

be

just because each has

politicians

should

Hasn't the South been retarded

(1) bankruptcy resulting
from the War of 1861-65; (2) lack

due to

misguided

the
to

.

;••

•

which

to

this

has

minds

of

fastened
our

dis-

itself

people

is

the

facts.

trouble
We

sink into

to

check

on

have allowed it

our

minds without

should engage in some
glorious debunking it is this al¬
leged 'unjust discrimination

press

against the South in the matter
freight rates.' Let's have no
more
crusading against some¬

thing that does not exist."

Interesting Situations

wijj^such
•

predicament.!,^

of

G. A. Saxton & Co.,

potentialities,;} tpi f - the

South.

awful

raising the slightest question as
to its accuracy, and if there was
ever
a
subject on which the

them¬

manner

the

taken

selves to securing a

harmful

our¬

nothing short of deplorable.
It
has been accepted as true by
people of all classes. Few have

these

devote

deluding

indulging

extent

crimination
in

revision of the
tax structure of the
say 500 pages in it? Should all col¬ antiquated
South and to bringing about a
leges charge the same tuition per
year regardless of circumstances? simplification of State and local
In the same university should the governments.
Then, indeed, they
fee
for college,
medicine, law, would be contributing to its in¬
dustrial development.
etc., be the same? Isn't it neces¬
It is a pity that these political
sary to fit the cloak to the actual
circumstances?
These do not re¬ leaders of the Southern States are
tard education, do they?
'
: .! directing their efforts in •,such a
be the same

in

other sec-

damnable idea about unjust
■

are

Instead

quit

an

"The

to conclude

members

any

in selfpity, and quit accepting with¬
out question the preachments cn?
politicians
who
pretend That
they are trying to rescue J us

competent to pass upon its merits,
the industrial growth of the South
will

Should the price of every book

whose

business

do

"We must quit

that
velops, rates are made to move if these advocates of rate changes
it.
would leave the administration of
"In all the years that it has
the rate structure of the South to
been working for industrial de¬
the
Interstate
Commerce Com¬
velopment
along
its
system
mission, where it legally belongs
is forced

by

woven

tion of the nation.

dustrial empire.
One

cannot

we

selves,

who want
great in¬

into

us

of the
transportation system.-

competition with

they promote

gressive men of vision

being held back

are

the warp and woof

that

to se¬

own

the South to grow

must refute the twaddle
we

"We should refute utterly the

industries?

for thereby

bugaboo,

a

false, foolish and fantastic idea

welfare. The officials of
Southern railroads are pro¬

their

>

material development

nation's

of the South¬
railroads to assist and foster
industrial development of the

South,

so-

our

trying

conspiracy against

It is the business
ern

self-slander,;

to
and
believe in something
not actually exist.

us

our

a

anything

legally within their power
cure

of

are

with

does

y
"We
—that

they have these departments if
they were not willing to work out

being
slander,

we are

victims

leaders
us

make
that

railroads. Each railroad

rate

likewise

"We must realize that

■U. called

additional tonnage to

ern

the

and much of it is
y'

these South¬
in the
South is
South has agents in its traffic de¬
for any reason. For some years
partment who are seeking new in¬
now the South has made more
dustries all the time that will
rapid industrial progress than contribute to the industrial de¬
the remainder of the country.
velopment of the South and to its
The railroads of the South have economic
stability. Why would
industrial

to the fact that

made

want to keep

South

development

.

"We of the South must wake

understand how
believe that

can

which would pre¬
from developing
industrial basis when such

the

.

.

rate structure

vent

none

these

accomplished under the

the railroads would

that

freight rates is
of our Southern
Governors know a blessed thing
about. They are merely accept¬
ing at face value the false

from
the
from the West-

Governors

is

something

coming

It is difficult to

the

of

subject,
breathing
much
righteous wrath, when the cold

tremendous increase in
of raw materials in the

been

contention

the

considered, is

truth

North and some

the

of Governors, and al¬
they adopt resolutions ofi

ways

any

South—some

has

vocal

ference

.

use

sec¬

contention is always the chief
topic of discussion at annual
meetings of the Southern Con¬

present rate structure."

multitude of measurements.

freight rates

make

Southern interest
the South's shipment
of fruits and vegetables?
That is
what they are raised for!
"The

is not only a
but
the
in¬

rates

falsehood

freight rate
discrimination
against the South. That absurd

wish to stop

the

in the matter

"Strangely enough, it is not
merely loose-lipped demagogues
and
fee-hunting lawyers who

well known.

"Does

highly fa¬

more
are

tion.

applied to North¬

distance

coal,

ern

to con¬
other section of

seeking investment in this

competes

level than those

industrial devel¬

capital that would otherwise be

north¬

moving

coal

i

a

evitable effect is to drive away

with } northern
coal.
That the rates applied to
the Southern coal are on a lower

bound

has

it

any person,

any

freight

gross

of this subject use the

"Southern

that

the country is
vored than we

an

agitators

for

.

Inc., 70 Pine

Street, New York City, have pre¬

in an edi¬ pared interesting memoranda on
Mississippi, Associated Electric Co., ClevelandYork, and there I buy The New
Cliffs Iron, Giant Portland Ce¬
"Daily News," of May 12, 1943:
York Times' for only 3 cents per
North giving a volume basis in
"Slandering the South—If the ment, Florida Portland Cement
copy.
Yet I get about twice as
Co., New England Power Associa¬
the North?
press of the nation wants , to
much newspaper in New York
and New Orleans Great
Isn't it now true that most of
render a real service to
the tion,
copy

travels

■

.

for 3

—

manufacturing- establish¬

per gross

serve.

-




tend

term.

business under this supposed

of

of freight

$3.19

The

grotesque
sight
would
fectly illustrate the then

industrial

parisons of this kind could be
extended almost ad infinitum,

in pub¬

appear

uniform attire.

net

rate is

is surprising

of

and children of assorted

ton, but if Pittsburgh buys scrap
iron at Cleveland
the freight

producing
region
and conse¬
quently a low-income region, and
thus
contribute to produce the
economic ills of the South."

ber

Chatta¬

scrap

and

V
the
years in which the class rates now
complained of have been in ef¬
fect—the United States Census of
Manufactures shows ithat in the
eight States included in Southern
Freight Rate Territory,' the num¬

iron from

draw

clude

and 1939

the other
mills can

On

ton.

gross

per

to

hand, the Birmingham

the

1927

Cleveland,
of 131 miles, is $2.92

Pittsburgh

from

all

South."

very

for many years
low freight rates

pig iron, billets, etc., from
the Birmingham district.
The
current basic tariff is $1.38 per

freight rates now in ef¬
to discourage and ex¬
industry in the South, and

Between

have

we

on

has

the large num¬
ber? of ^persons who accept this
statement
as
true without ■» the
least effort to verify its accuracy.
The Southern freight rate struc¬
ture has not and does not operate
"to discourage and exclude indus¬

go

the North, in the

inatory

try in the

opment. For

"True, the South shins lumber,

uniform rates
into effect, let all men and

to

give credence

encourage our

coal, fruits, and vegetables to the
North, but these are not 'raw ma¬
terials' in the sense in which the

dimensions.

uniform

to

to

statements

tendency to retard rather than

importer, with a net
inbound balance of 1,377,000 tons.

were

future

such

by

out

pointed

tons, to

On the day when

flow

fect operate

It

Railway to
Chattanooga:

give a

carried

coming to be¬

the South a

concerning

Chattanooga is

uct,

"The Southern Gov¬
believe that the discrim¬

to keep

clothing

all

outbound rates on their proau-

stated:

ernors

"Suppose

specific illustra¬
substanti¬
ally interested in the manufac¬
ture of iron and steel articles.
To
aid
these
manufacturers
and, in addition to competitive
"To

to refute

of Tennessee

in

industries

tion:

lieve them to be true.

also

Chattanooga,

a

that

of

efforts

the

increasingly large num¬
are

of

Editor

the

Tennessee, newspaper
assist

of

Vice-President

The

charges.
It is being done.
But as a result of constant repeti¬
an

do these

War,

the

of

con¬

stifled?

such

ber of persons

from the disastrous

figures look as if the development
of
Southern
industry has been

Th0f value of school
property per enrolled pupil in the
States we represent is only $124
as compared to an average for the
United States as a whole of $300."

tion

was

sequences

funds.'.

it is

was

covered

whereas
the national
is $21.75. This comes
•about from the inability of the
Southern States .to. put up their
half of the mondy to match Fed¬

course,

economy
of the
agricultural, and that
many years before it re¬

basic

the

War

28%.

is

relation

the

average

Of

plants

For the country as a whole,

32%.

sistance,.

eral

where manufac¬

and East,

turing

the

of

South¬

Miscelloneous." In the

and

North

nation are
able to provide. For instance, the
States in Southern Freight Rate
Territory are only able to pay an
average of $10.60 for old age as¬
Governments

As

everywhere.

lic in this

Railway has pointed out that
29.1% of this traffic comes under
the
classification
of
"Manufac¬

to

State

Southern

"The

the

more upsetting to
everywhere than to
freight
rates

shapes and sizes

ern

tures

Governor

The
seems

and detrimental to the South of

at Alcoa is responsi¬
ble for this. It is still in the South!

reason¬

discrimination

r

case.

it is downright
the South today

-"Moreover,
damaging to

(Knoxville, Tennessee)—not into
North on any major scale.

uniform

women

and

Manufactures

privilege of knocking him
They have done it so often
that they are attracting a group

have

made

'

Products

who

that such is the

Alcoa

to

moves

TVA power

be just as

unjust

business

.

the

followers

Bauxite,

is

the

theory but would not be pretty
practice. 'There is no one thing

at

South

the

from

Cincinnati:

down.

of

Cotton from

that would be

Southern

continue

to

move

rail to North
mills—not to northern

Carolina
mills.

able to organize a movement to

United

1935 the

to

build up
in order to have

and the other

he

rate,

Governors

:

to

tured in the South.

But, that answer

do.

materials

the. South moves by

an¬

It is the volume of busiyou

Wouldn't it

September, 1940, the South¬
Railway handled the follow¬

In

seems

themselves.

dustrialists

the

applies equally to the Southern
Railway System and its rates."

rest of the country.

to be that
knows more about the needs
Southern industry than the in¬
position

1931

ments in

The actual sit¬
however,' seems to have

little

know

rates.

raw

.

cooperative basis.

-whose

^

ness

the

Tyyy

,

I

course,

swer.

y?

railroads growing at twice the rate of the

Southern

the

.

satisfactory and on a most

is very

York'Times.'

v

of freight rates
astonishing that the
general public, even some of our
editors, continue to believe the
false, foolish and fantastic fulminations
of demagogues
and
shyster lawyers seeking to shus#

to

Mr. A. J.
Ribe, "a recent study of 34 com¬
States as a whqle lost 5,144 manu¬
against the readers of Southern
facturing plants,? but the South newspapers by demanding that no modities, or groups of commodi¬
gained.987,
Every city in the Southern newspaper charge more ties, clearly recognizable as raw
materials—such as cotton, hides,
United States whose population than the rate in New York or 3
coke, pig iron—shows that the
has doubled since 1920 is in the cents
per copy.
'
' 't
South, in a 12-year period end¬
South.
The President of the Illinois
Cenf ing with 1941, shifted from an ex¬
tral wrote in June, 1943:
The South now has over 25%
porter of such materials, with a
"Uniform rates are a pretty net outbound balance of
situation. of the manufacturing establish¬
1,000,000

has even made a
special trip to the Governor's of¬
fice where he advised the Gov¬
ernor that his company was at no
disadvantage so far as commercial
rates were concerned and that the
back haul from Chattanooga to
Tullahoma was not unusual un¬

of this company

der

twice

almost

•

informed that the Traffic Manager

on

your

against the Soutft

matter

it

and

Southern factories to be manufac¬

culation,

nothing

the

in

do with these
Instead, they want

tising rate is $1 per line.

whole decreased

facturing decreased only 0.8% in
* It would seem that these facts comparison with a .decrease of
16.2% in the country as a whole1;
are so simple and clear that there
is little room for misunderstand¬ and the value of products manu¬
factured increased 13.2%, while ih
ing or misinterpretation.
the country as a whole there was
The author has. been reliably

beyond,

from points
;

out of
Minneapolis

raw

ern

the railroads

So do some other South¬
materials. The railroads

by rail.

York

New

The

of.

'Times' is 454,502, and
'

pounds

797

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

...

also

cents

carry

as

me

I get in Chatta¬

for 5 cents—measured by
and feature columns alone.

nooga
news

"According

to

a

publication

net paid daily
circulation is 51,362 copies, and
before me, your

.

your
per

advertising rate is 20 cents

of skilled labor as well as

lack of

capital; (3) only 16% of the pop¬
ulation compared to 50% in the

Southern

raw

materials

move

to

factories in the South? If rates are
raised

won't

on

these y raw materials,
Southern in¬

it hurt these

dustries?

\
Cotton from the South to New
.

,

line. The net paid daily cir- England moves by water, and not

This was well stated

torial in the Jackson,

South it will launch a
to

campaign

completely debunk persistent

propaganda to the effect that
the South is being

criminated against
ter of

grossly dis¬
in the mat¬

freight rates.
no discrimination by

"There is

Northern Railway. Copies

of thes&-

memoranda, and the current issue
of the firm's
"Preferred Stock
Guide"

comparative

containing

figures on public utility preferred
and common stocks, may be had
upon

request.

1

their

How

Proposed "Reservations" At
Bietton Woods Were Dropped
(Continued from page 780)
governments and legis¬

tion of the

lators concerned.

"Now

suggest to those dele¬

I

gations who are proposing to make
reservations that this procedure
will

there is some
commitment in re¬

that

suggest
in

difference

spect of the points specially re¬
served compared with the rest of
the
document;
and,
therefore,
that the rest of the document is
in

accepted.

sense

some

"Is it not better that

all of

we

clear the entire absence

make

us

of commitment on the

part of our

governments and that the partic¬
points
of reservation
be
merged in the general reservation
and be not particularly recorded?
Only in this way can misappre¬
hension be avoided. Otherwise the
ular

position of those of us who are
making no particular reservations
may not be understood.
M
therefore

which

those

to

the

sign

agree ments
with v a
res¬

ervation.
d

ish

of

t h

m

o

United

e

King¬

some

respect
partic¬

the

of

mind that spe¬

cial

reserva¬

tion

weakens

the

general

r e s e r v

that

is

vided
Fred

M.

ation

sort of

understanding

general reserva¬

adhere

H.

Dr.

H.

Kung

this

in the agreements, and
requested a consideration for a

of

I need not tell you that the needs
of China are very great. We made
the reservation because we are

shall

it

consider

a

first approx¬

the

"Neither

government

nor

people of France will forget
how very much indebted they are
to the intelligent and courageous
initiative taken by the President
of

this

pro¬

in

the

invitation

Vinson

Un-

der which

we

meet. It not

only makes it difficult
in the particular
country making
the
reservation, it makes it diffi¬
cult to those countries where no
reservations

speak to
<*.

you

spect
of
frame of

made. But I would

are

particularly in
somewhat

a

mind

that

re¬

unhappy

may

exist

amidst the delegates from a few
countries with reference to their
I

know

the

position

wpich representatives of

in

nations

find themselves but I also know

tbat they do not want to make the
task of friends

"Among

more

difficult.

delegates

our

were

held in respect of quotas

and

particularly in regard to the
limit to which our
country could
go without danger of destroying
our

efforts.

As

know

you

fore, Mr. President, I

the

original maximum was $8,000,000,000 (eight billion dollars).
That
maximum was increased to $8,800,000,000
(eight billion eight

withdraw

great American

republic,

to the constructive will and tenac¬

hundred million dollars). We

were

advised

were

if

that

limit

exceeded

danger would lie ahead.

Certainly

no

possibly

delegate present

think

that

the

can

country

nize

the

condition

of

a

war-torn

world; that the United States fails
to

know

the

misery

today

the

attack

whose
yours

of

philosophy
and

China's

those

countries

runs counter to

ours."

delegation

"
was




,

among

final

of

act

Conference.

the

"Like other forms of international

always been
the nations which ; have
participated without reservation

collaboration, economic collabora¬
tion and particularly collaboration
in monetary and financial spheres,
requires
mutual
understanding,
mutual respect for the interests of
the participating nations and the
sovereign rights of their States.
The International Monetary Fund
should in all its activity be guided
by the above principles. The Con¬
ference hasr prepared such provi¬

in

soli¬

sions for the Fund which

than

meet these sound requirements for

other

countries

them

that

so

record of

a

who

we

and show to the world that

we can

wholeheartedly cooperate for the
common good."
-

Similarly, M.; Pierre MendesFrance, Chairman of the French
Delegation,
withdrew
proposed
reservations

dress:

in the

following ad¬

"France has

among

of

matters

darity.

international

She will do

after

this

so

more

which has
proven once again the fundamental
need of cooperation between all
war,

effective

{

would

international collabora¬

tion

'

\

1

•

•

'

"The Conference has carried out

the countries should not decide to

great and useful work in elab¬
orating the Draft Agreement on
the Fund. High tribute should be
paid in this connection to Dr.

collaborate closely toward the

White and his colleagues. We wish

nations

of

good will. We believe

firmly that the world would know
a

period

of

terrible

construction

peace.

re¬

world, social
of

;&>;
task

inevitably requires
concessions

be
by all of the nations, and,

venture

will

if

maintenance

substantial

made
I

the

disorder

.

"This
that

of

and;

progress

in

to

the

that

say

future

each

respect

,,

one

to

.a

larger extent than before the le¬
gitimate interests of other \ na¬
tions.
"I

>•:

.
.

alsq; venture to

country will
strictions

say

consent to

and

sovereignty

that each
some re¬
of its

limitations

and

also

of

its

full

freedom of action.
"Such revisions in international

hered

ples of the earth who suffer from

I

can

that

the peo¬

and

complete accord

have

the world.

to

we

Delegation, along
with China and France, also de¬
sired to give expression to "res¬
ervations," but agreed to forego
their insertion as a part of the

withdraw

relations

of America goes out

that

you

reservation

our

the-

exists in the occupied countries of

Gentlemen, the heart

tell

Russian

have made reservations may also
be able to see their way clear to

hope

in which the genesis of this Con¬

ference took place fails to
recog¬

to

happy

am

The

In
doing this, M. S. Stepanov, Chair¬
man
of the Russian Delegation,
made
the
following
statement:

-

that

able

ever

representatives of the House and
Senate. Conference after confer¬
ence was

operate with the friendly nations
100% in order to make this Con¬
ference a complete success. There¬

of

to

the

they

will, however, be ad¬
only if all the peoples

world

are

are

tions conceived in

where

convinced

that

entering into organiza¬

all

will

a

fair

find

manner

sufficient

a

to pay a special tribute to Mr.
Morgenthau and to Mr. -Vinson
whose,, efforts greatly facilitated

the

of the Conference. We

success

Conference

in

the

history

x% 'l

•

happy to observe that all dele-'
gations have worked in a friendly
spirit' and cooperated closely in
achieving mutual agreement.,
'd f.The work of the Conference

the

the

to
"

^

been

successfully
accom*
plished although we had to deal
with many questions of a difficult
{

nature.

This

regarded
efforts

as

of

Conference

one

the

will

of the important

United

Nations

solve the post-war economic
lems of the world,

"The
has

of

delegation

made

some

be

the

to

prob¬

USSR

reservations

re¬

behalf

of

sideration

ment,

of

and

the

furtherance

re¬

of

-V*

\

i

USSR

Govern¬

Delegation deems

the

Govern¬

USSR

reserving the full right of

the USSR Government to make

free and
Draft

decide

all

questions

connected therewith.
"Our
secure

laboration

freedom-loving

among

peoples in monetary and financial
spheres, is a new contribution to
mutual

the

efforts

the United

of

achieve

goal—everlasting
prosperity.

catedf

in

the

invitation

of

the

Government of the United States

"Nothing would be more dan¬
than to permit the differ¬
regain their
stability and their economic pros¬
perity separately just as they have
tried in times of the past to in¬
sure their security separately.
:
gerous

ent countries to try to

"They would fail tomorrow «is
they have failed yesterday.
Be¬
cause,

mutual

our

peace

and world

it is

as

modern

impossible in the

world

it

will

to

circumscribe

.

be

impossible xo
avoid the spread of unemploy-,
ment, economic stagnation, exces¬
wars,

economic

fluctuations

from

country to another with all
their train of miseries and suffer¬
one

ings.

"This,
yet

the

see

taken

can

al¬

realize

people

But perhaps they do not
that concrete steps mufct

ready.

urgently before the ef¬

work

be

of

reconstruction

If tomorrow the

started.

different Governments

called

are

of Commission I.

his country, without being able to
lean on an international program

reservations

Therefore, these
not be

may

entered

to

upon

into the final act."

that

In withdrawing its reservations
for a claim to a larger quota in

in advance,

they shall

succumb

local and individual¬

the International Monetary
Mr. Kyriakos Varvaressos,

Fund,
Chair¬
man of the Greek Delegation, re¬
marked along similar lines: "It is
my first duty and my privilege on
behalf of the Greek Delegation to
express our sincere thanks for the
words which Judge Vinson has
found to manifest the sympathy
and appreciation of the

American

people for the peoples of my coun¬
try who contributed all they had
in

this

hard

struggle and are at
moment suffering
and still

this

fighting with the
common

spirit, the
wish further

same

I

enemy.

to declare on behalf of the Greek

Delegation

that,

what

been

has

light of
Lord
Vinson,we

the

in

said

and

Judge
withdraw1 the
only
Keynes

by

reservation
had made with regard

which

we

to

quota.

* :
j
''We
do so, first, because we
want
to
emphasize
the
spirit
which has prevailed
throughout
this Conference, a spirit of colt
laboration, mutual understanding^,
and a high degree of discipline;
our

j

second, because

we are

convinced

Constitution i; and

the

that

the

functioning of the Fund is much
more worthy to our countries than
the
specific interest which we
have
in
obtaining a relatively
larger quota; and third, because
wish

we

of

had been indi¬

tion.

perform the heavy task
which awaits them, each one in

When

as

make their national progratn
part of a large collective concep¬

to

"I agree to include all our res¬
ervations into the final minutes

to

Conference,

and

fective

by the reporting delegate.

I have
that the ap¬

their econ¬
according to individualistic
sometimes
selfish methods,

be

to

to

declare

that

we

con¬

surance

course,

the

once

omies

and Associated Nations which are

template with confidence and

state, of

hope,

has ceased to fire.

"When this moment comes, in¬

destined

the Fund which

mentioned

for

reason

stead of reconstructing

sive

Conference, which aims to
post-war international col¬

garding the Draft Agreement on
were

a

independent study of the

and to

our

the

future

countries
we

the

has

Fund

just

as

with

a

any

as¬

cause

have

to

be

to

established
more

once

istic influences and to traditional

temptations of the past.: Special
interests will succeed
again in
crystallizing positions which we
might have believed to be out of
date.

"And when
gram

it

would

tance

theki finally

will have- been
as

meet

a

pro¬

established

with

such

would render

its

resis¬
execu¬

tion very much more difficult and

perhaps painful.
"The entire merit

President

of

Republic

for

belongs to the

this great American

having

taken au¬
daciously the initiative and hav¬
ing invited the United Nations to
this Conference in order to study

together
these

today—not

most

namely,

tomorrow-^

delicate

those

matters;

the
monetary and financial soundness
of the post-war world.

ference under the

The Con¬

high authority
hospitable

of its most eminent and

President,

the

Commissions,
devotion

Presidents
thanks

and

of

to

its
the.

and

tenacity of the e%->:
perts of the different delegations*
has
largely cleared the ground
which

assigned to it as its
activity. To the difficult
international transactions,
it offers as solution the ingenious
was

field of

ties

of

machinery

of

the

International

Stabilization Fund.

To the prob¬
lems of reconstruction of the waf-

Fund.

offers the flexible solution of the

whole

we-are

country which

*

concerning

provisions

the

to present to the
Fund will not do so in vain."
a

will

ravaged countries and of develop¬
ment of the young economies it

collaboration

examine the

persuaded that

sources

V..

duty to submit the Draft
Agreement on the Fund prepared
by this Conference for the con¬

this

development of their natural

''

,

the

of

rights, the

;

its

proval of the Draft Agreement at

their

will and

approval of the Draft
in any of its parts

the

of

rag¬

or

guarantees for the recognition and
exercise

V/

..

as

are

has

confer¬

still

constructive

ment. The USSR
it

is

battle

.

whole

on

these

of

era

Conference, should not be

regarded
in

new

he continued, "it bears witL

ness

more

the United Nations will endeavor

"While

'

a

'

ences.

ing,"

be proud

the work of peace

resume

production of speculation of
ideas with more efficiency arid

and

Bretton

of

Woods, however, may
having inaugurated

to this

the

or¬

which

world to

cannon

of

participate tomorrow as yesterday
in any effort tending to improve
the texts which we 'arrived at and
we

international

some

the economic field.

people, soon
to be liberated by the armies of
the United Nations and through
the sacrifices of its own sons, shall

which

to

in advance the machinery
will
permit
the entire

for
the
purpose
of
facilitating their collaboration in

Government, and

imation.

decided

have

prepare

ganization

French

the

globe be¬

of progress arid
destruction,
the

of

forces

the

the

over

tween the forces

Nations

"The

French

"The

-

all

continues

United

together

Commission.

with

Mendes

the

one table attempting to
adjust their interests and to build

the

of

at

of the
France

sit around

remain

minutes

the

in

made

Session

time that nations have decided to

Keynes, the text

reservations

its

recorded

statement

remarked that "this is not the firfct

this

to

his

closing Plenary
Conference, M.

Delegation

French

the

said by Lord

was

country

be

In

covering the entirety of the
asserting the total liberty
the
governments, be main¬

note that in accordance with what

Bank)

to

On the final day of the Bretton Woods International Financial
Monetary Conference, M. Pierre Mendes-France, Chairman of the
French delegation, and Dr. Ludwik Grosfeld, Minister of Finance of
the Republic of Poland, and a delegate to the Conference, issued
separate statements, in which both expressed satisfaction with the
agreements reached by the Conference and expressed the hope that
through such international coop-^
eration, their respective countries determination of the United Na¬
Without waiting for the
would be assisted in the work of tions.
end of this gigantic fight which
post-war rehabilitation.
and

res¬

ity of the President of this Con¬
facing real difficulties, but after ference, to the creative spirit, the
competence,
and
the
ular
consid- the Chairman of the Quota Com¬ technical
tireless devotion of the experts of
e r
a
t i o n mittee explained to us the prob¬
that
should lems they are'facing we wired all delegations and, in particular,
to the Chairman of Commission I,
be
our
given
to to
government
explaining
to
whom
his
Commission
last
reservations. the
difficulties
confronting the
There
is
no
Conference.
China is ready to night has paid tribute by unani¬
doubt
in ? my make further sacrifices and to co¬ mous applause."

dom in

Delegates From These Devastated Countries Express
Hope Of Early Rehabilitation With International Co¬
operation

coun¬

procedure.
The French Delegation also takes

•

r

the

with

some

shall

—

f

liberated

the

the proceedings,
countries represented

all

tained,

the

on

greater

text and

$600,000,000 in
for

of

,

in

have expressed

if

tion

and

fixed

the

to

state

the allocation of quotas,
particular
reference
to

tries,

that

ternational

the

I

vations

000,000 in the
n

which

but

plained
against
the
quotas ($550,I

Expect Aid From Bretton
Woods Agreements In Post-War Rehabilitation

here withdraw all of their reser¬

com¬

Fund

France And Poland

v*/

President in
detail
France's position. In this letter I
offer some remarks regarding the
letter

my

"We

long war with
Japan,
Chi¬
na's
delega¬
tion

■.•

here

ervations during

the

to

'*•

you

etc.

of

the country
due

to

•

transactions,' the flex¬
ibility of the machinery for the
purchase of foreign currencies,

impover¬
t

read

not

spiritual

^14

1

t

of 'current

the

m e n

shall

with

t ation

e v a s

and

"I

,',

Europe and France, the definition

Be¬

of

cause

and

intellectual

faculties

situation

desired

urge
this
delegations in¬ reduction. However, following the
terested in the particular matters statements of Lord Keynes and
which the reporting delegate has Mr. Vinson, Dr. H. H. Kung, who
brought to our attention;' and I heads the delegation from China,
'propose to them that these reser¬ withdrew this reservation in the
vations, by general agreement and followingjanguage: "After listen¬
in
the
light of the above be ing to the excellent statement by
retained in the minutes of the Lord Keynes, and the eloquent
Commission where they are al- speech by Judge Vinson — espe¬
the
touching
sentiment
ready recorded but are not made cially
which he expressed with reference
part of the final act."
I am happy to state
Judge Fred. M. Vinson followed to China
the
Chinese
Lord Keynes with a similar plea: that
Delegation is
:v.-'-'.
"I join with ready to withdraw its reservation.
After fighting seven years of war,
the
delegate

would

"I

course,

-

Thursday, August 24, 1944

THE COMMERCIAL & FINANCIAL CHRONICLE

798

International Bank.
"No- doubt, as original and
as
these plans ' may

dacious

they do not offer

a

au¬

be,
complete and

Volume

definite

all

to

answer

the

ques¬

which have been addressed

tions

the anxious peoples of
the world who wish to know their

to

by

us

future and to

see

their economic

But

insured.

security

that

now

work has come to an end, we

our

have

the

right to say

that great

steps forward have been made and
that solid foundations have been
laid

tomorrow the
other international organizations
and bodies destined to organize

which

upon

If

had

only

resources

volved,

objections

been

might

in¬

Woods Urges
Agreements On Other Economic Problems

against including in¬
itially countries unable to supply
for

resources

of

time.

extended

(The

period

situation

an

of

try !

temporarily
become
current account.)
It

may
on

is

all

to

techniques

con¬

Continuation
a

world

or

in

inconceivable

but

war

a

guided by fraternal cooper¬
of all people of goodwill,
is glad to have partici¬

ation

France

this International Con¬

pated in

ference at Bretton

have witnessed its

birth

of

two

great

which

bodies

Woods, glad to
and the

success

international
the

for

battered

certain

am

Andre Istel, in

that

theyjiave not been able to with¬
;

"However, the French Delega¬

iterate

its

deep

disappointment

what it considers

over

inade¬

an

quate recognition of the particular

suffered by the coun¬

; hardships

tries

devastated

and by
enemy occupation in general—by
Europe and France in particular.
No recognition of this situation
by

war

the

in

the figures

mention
in

involved.
France remains un¬

her

spirit and deter¬

of complete and sincere

cooperation.
has

"France
action

not

her

confined
of

defense

the

to

her in¬

been
the entirety of

but she has always

terests,

to

ready

her obligations."

conviction

the

is

•

we

have

and

Development,

historic

a

new

financial

our

the

con¬

sense

of the lack of vision and of

of

destiny which

was

pre¬

the intermediate
period between the two wars;
they are looking towards new
horizons; they feel that in this
vailing

during

modern

world

of

ours,

reached

methods

and

we

been

enduring these devasta¬
tions,- they are making an effec¬
tive f contribution toward a better
world of the future.
They also
know that they have what might
be called the 'tragic luck' of hav¬

we

.

of Poland's independence,
economic

have developed our

points;

Woods
might still improve the plan. The
purposes of the Bank, as shown
time

than

at

Bretton

which

resolution,

is now
brings to¬

gether a number of resolutions
forward by different coun¬

put
to

reduction of barriers

The

tries.

the mitigation of fluc¬
the prices of staple

trade,

in

tuations

Time forbids that

embark

Conference.

Financial

and

tary

should here

we

work

the

on

drafting

of

plans through which our countries
cooperate in

effective ac¬
Yet it

tion to achieve these ends.

is

the

of

highest

importance

to

the welfare of the world that such
should

work

be

pushed forward

possible. On behalf of
Canadian Delegation I wel¬

early

the

the resolution which is

come

fore

as

and the

us

be¬

opportunity which
need

it gives to stress the urgent
for action.

weeks
has

of

work

the

the




low

new

in

point

$3,316,600, or 11.4% of the total
which they had received
the past nine years in the

amount

fact that our basic cure

beginning

important

an

been

in. the

made

broad

for

scheme

meeting the interna¬
tional economic problems which
will* confront the world at the
Nevertheless it is

■end of the war.

only

If plans of in¬
organization

beginning.

a

ternational monetary
and

international

investment are

fully successful, other prob¬

to be

no means less difficult
important—will also have
be faced and solved by joint

lems—by
or

less

international action.

It would in¬

deed be unwise to attach too much

what has
been
planned here, if thereby we were
importance

to

led to, neglect

'

i

will have

the

same

monetary and investment organi¬

carried put

overcome

successfully the mount¬

ing tide of difficulties, if we could
not look forward to the help of

developed

industrial

countries of the world.

We never

the

highly

that this help would be

forthcoming.

The adoption at the
of the

Bretton Woods Conference

off the

International

Fund and of the In¬
Bank for Reconstruc¬
tion and Development, constitutes
ternational

.a

concrete promise of

that coop¬
nations —

which
the
ruined by the war — so

eration,

need and so

greatly

confidently expect.
devoted a

"The Conference has

great deal of attention to the
of the quotas in the Fund and

size

ceiling

on

the

the

food

in

and

material

raw

a

Statement

rangements

or

enormous

fluctua¬

beyond any doubt, the
manifestation of a new spirit in

tions

are

international relations.

tablish
for

an

collaboration
serve

the

national
that

of

they

public interest of each
community, as well as
whole family of the

the

United Nations.
"The

economic

nations;

of

es¬

machinery

effective

international

the

' They

,

.

-

realization

'
of

the Es¬
International

of Experts on

the program in these two States
now
have any of these invest¬
after ex¬
ments
left.
The
arrangements
pressing sympathy with the par¬
contemplated a much longer time
ticular
objects
to
which
that
for their retirement, but the un¬
statement was directed, the Prime
Minister said that the Canadian precedented inflow of funds from
local
savers
and
investors
has
Government "is equally anxious
made it possible for these funds
that common
views should be
to be returned to Uncle Sam far
reached on other parts also of a

of

tablishment

an

Fund,-and

Monetary

ahead of schedule.

general plan of international eco¬
A total of $32,709,000 was in¬
nomic
cooperation,
particularly
vested in these local home financ¬
on the reduction in the barriers to
ing institutions by the Govern¬
trade expansion, a reduction vital
ment to supplement their private
to
Canada's welfare and neces¬
share accounts during the recov¬

favorable

conditions

if

sary

to

stable monetary arrangements are
to be achieved."

The other parts of such a gen¬

;

plSn

eral

of international eco¬
organization are perhaps
which

nomic

less intricate than those on
so

much effective work has been

they present prob¬
stubborn than
those which this Conference has

born from that

spirit, is the hope
of the populations
of war-torn
countries.
The fighting and suf¬
fering masses
in the occupied
countries have the right to expect
that the approaching moment of
their liberation will mark the be¬
—

and reconstruction period of
1930's, and was designed to *
help them meet home financing
needs in their localities more ade¬
ery

the

quately than the local inflow of
was

permitted,

have

would

funds

it

explained.

done here, but
lems

more

even

been

spirit, with the same in¬
genuity, the same sense of urgency
and the same willingness to work
,,

together, which have been wit¬
nessed here, these problems can
<

It is because

we

need for action that the Canadian

Delegation

support

the

this

resolu¬
V.

...

Commission

III

recommended

adoption by the full Confer¬
of the following resolution:

ence

I of the
of the In¬
ternational Monetary Fund it is
stated that one of the principal
in

Whereas,

Article

Articles of Agreement

of the Fund is to facili¬
the expansion and balanced

purposes

tate

growth of international trade', and
to contribute thereby to the pro¬
motion and maintenance of high
levels of
come

employment and real in¬

in the territories of all mem-

primary objectives of eco¬
nomic policy;
■
'
■
Whereas, it is recognized that

bers

as

,

attainment of this
and other purposes and objectives
stated in the Agreement cannot
be achieved through the instru¬
mentality of the Fund alone;
Therefore, the United Nations
Monetary and Financial Confer¬
ence recommends to the
partici¬
pating Governments that, in ad¬
dition to implementing the spe¬
cific; monetary
and : * financial
measures which were the subject
of this Conference, they seek, with
a view to creating in the field of
international economic relations
conditions necessary for the at¬
tainment of the purposes of the
the

complete

Fund and of the broader

primary

objectives of economic policy, to
reach agreement as soon as pos¬
sible on ways and means whereby
they

may

best:

national trade and in other ways
promote mutually advantageous
commercial rela¬

international
tions;

yrV

:

about the orderly
marketing of staple commodi¬
ties at prices fair to the pro¬
ducer and consumer alike;
(2) bring

(3) deal

Saturdays

Through September 2
The

decision

of

;

the New York

Saturn
and 26 and Sept. 2
made known on Aug. 17. The

days Aug. 19
was

action, it is stated, was prompted
by, the effect on employees of the
recent protracted heat wave. The
New York Curb Exchange decided,
a

upon

the

for

similar course in closing
three
Saturdays, ; and

others which also

announced that

they would follow the action- of
the New York Exchange include

Cleve¬
Angeles and

Philadelphia, Boston,

the

Chicago,

land,

Francisco

San

the

In

New

Los

Exchanges.
"Times" of

Stock
York

Aug. 18 it was stated:
The volume of business in Wall
has

Street
this

been

summer

staffs

relatively

The in¬
several days

have been small.

tense heat of the last

had

large

and brokerage house"
;

prevented many from getting
Since 1933 1

normal hours of sleep.

all similar moves have been

voted

of th^
opposition
of
the
large
wire
houses, which explained that theiF
expenses ran on, even when no ;
down, principally because

This;
War Labor
Board
rulings
preventing
any
extra financial recognition of the
business
year,

was

being

done.

however, with

work that Exchange

and broker¬

house workers have been do¬
ing despite the heat and humidity,

age

the

Exchange

community

nothing for them save
their working conditions.

do

ease

holidays have
unknown since 1933. In that

Such
been

could

summer

there were six summer Sat¬
urday holidays. In earlier years,

year

three-day-week-end over La¬
and, when possible, over
Independence Day, was usual.
the

bor Day,

.

(1) reduce obstacles to inter,

To Close

Stock Exchange to close on

*

believe in the

possibility of solving them through
international
collaboration
and
because we believe in the urgent

tion.

NYSE, Other Exchs,

Approached in the

facing.

same

CX
projects,

that

said

He

system.

reserve

only 33 of the original 177 asso¬
ciations which had participated in

Joint

the

Commons

of

Chicago

which serves these institutions as_

presenting in the Canadian

In

House

of

Bank

Loan

Home

between the wars.

#

No such

with our own zations, however perfect in form,
resources,
with our own labor, can be expected to long survive
with our own persevering efforts. the economic distortions of high
However, we could never hope to tariffs,
restrictive
trading
ar¬
be

to

tions

prices such as marked the years

few

past

credit ' operations
of the Bank.
It is very difficult
ening way, are
at this time to make an exact esti¬ ginning of a new era in human
resources and to provide guaran¬
relations
an
era
of freedom,
tees. "As guarantees can be fur¬ mate of the extent of post-war
peace
and
prosperity.
These
nished by all countries, even by needs and to relate them to the
hopes will be kept high by the
of operations' which •< our
those which have at present no scope
news
about the great results of
agreements provide for the Fund
resources, all of the United Na¬
x
and for the Bank.
These institu the Conference."
tions can participate in the Bank.

qplighttwofold: to provide

by Lord Keynes in a very

a

over

a

be solved.
In

tacked frontally and on

Monetary

further study with less pressure

of

The"

before this Conference,

wide international basis.

projects

human work without weak

follows:

was as

the

nomic and financial measures are

audacious, while at the same time
realistic—of course there is not

statement

Laurent's

Mr.

of

text

would feel this lack even more

acutely J We are well aware of

doubted

a

purposes.
ommended

to

in a rela¬
tively reasonable period of time
provided
sound
political, 'eco¬

"The plan conceived by the
American and British experts is

of

means

<

"Modern wars are more destrucr

<

On ways
and
accomplishing
these
The resolution as rec¬
for adoption and the

possible

as

soon

reach agreement as

to

.

ing to start frofnj the"very scratch
in the task of reconstruction.

adopted.

to

other problems or
to rest on a misguided faith that
with new forms * of internatiopal
might assist us in our endeavors. monetary and investment organi¬
After the present war, which not zations, the other problems would
The problems
only obliterated and destroyed the solve themselves.
achievements
of the inter-war of commercial policy, the insta¬
bility of primary product prices,
years, but also inflicted upon our
country very serious wounds in the coordination of national em¬
all the branches of economic life, ployment policies, must be at¬

by

damage can be repaired

a

possibilities to a certain extent,
with our own resources,
yet we have., felt acutely the lack
of international institutions, which

The French people know

in proportion to the amount
of existing wealth. We may, there¬
fore,- readily
assume
that war

to

largely

tions such as the world has never

ago

Woods,

"During the short twenty-year

of production and transportation.
"We are today facing destruc¬

tive than wars of the past.
But
owing to new techniques, to new
equipment and to mass produc¬
tion, the amount of new wealth
produced each year is today and
shall be tomorrow much greater
than it used to be only a few years

Bretton

tilities.

period

that

at

agreements

the

ruined in the course of hos¬

already taken place in the fields

known.

of

country, which — underdeveloped
before the war—has been ravaged

adapted
to
the
revolutionary changes which have
yet

been

in

up

importance

of distribution and financing have
not

which have

of

such a clear and
enlightening way by the Honor¬
able Henry Morgenthau, Jr., Sec¬
retary of the Treasury
of the
United States, I wish to make a
few comments,
emphasizing the

we

v

aware

results

summed

shall have the full
support of French public opinion,
"The' French people are keenly
ceptions,

trade,

called

be

"At the end of the Conference,

participated in

efforts towards

Grosfeld, speaking

plight and her post¬

problems, issued the follow¬
ing statement: just previous to the
adjournment of the Conference:

We feel certain that in

event.

and to contribute
the promotion and
maintenance of high levels of em¬
ployment," additional conferences

as

war

the establishment of the Bank for

Reconstruction

Poland's

of

Delegation that in coop¬
erating
wholeheartedly
toward

assume

Ludwik

Dr.

the

of

tional

thereby

might

velopment, remarked at the same
"It

of

delegate from the Dominion
and Financial Conference

July 20 in

relevant to the work of this Mone¬

daunted

French

on

primary products and the promo¬
tion of high levels of employment
are-subjects
which
are
highly

accorded

been

Just the same,

and De¬

Woods, proposed

regards the Bank I prefer not

to

ap¬

to

Fund;

had

session of the Conference:
.

a

to

meeting of Commission III, the group given jurisdiction over

a

tion considers it necessary to re¬

proval of the establishment of the
Bank for Reconstruction

all feel

we

hold very long their true feelings.

M.

expressing the

that

and, even if some may have
had a few moments of hesitation,
way

mination

delegate,

Laurent,

International Monetary

the

shares

their

invested

funds

Government

resolution introduced at course of the Government invest¬
mis¬ ment
program for local home fi¬
cellaneous topics before the Conference, that to carry out the pur¬
nancing
institutions.
This was
poses of the International Monetary Fund "to facilitate the expansion
pointed out on Aug. 8 by A. R.
and balanced growth of interna-^
Gardner, President of the Federal

life."
French

The Honorable L. S. St.

at Bretton

capital, it lacks safety.

"The French Delegation

as

Another

Staples And Reconversion Policies Among Topics Pro¬

Canada

July, the Illinois and Wiscon¬

saving, building and loan as¬
reduced the amount of

sociations

not lack

constitute a promise of
greater security, of more produc¬
tive work, a guarantee of a bet¬
ter insured peace, and of a better
peoples

sin

of

sistent : with - the preparation,

the
the liquidation of

Obstacles, Orderly Marketing Of

posed To Be Considered

probably more important to
provide guarantees than to pro¬

•

opposed

Trade

vide resources—for the world does

consid¬
ers it not only the duty, but the
be built."
Speaking of his own country's interest of all the 45 nations (I
future, M. Mendes-France said have not forgotten Denmark) as¬
"France for her part shall en¬ sembled at Bretton Woods to par¬
deavor to accomplish her rehabili¬ ticipate in the Bank with the same
tation by utilizing measures which, enthusiasm (I did not say: with
the same amount)
far from isolating herself from the
with which
other nations of the world, will they participated in the Fund.
I
develop even her solidarity, her
intimacy and her collaboration
With them.
Opposed to autarchy
and to discriminatory restrictions,

ISI.-Wis. Savs, Ass'ns
In

International

the

Fund is different since any coun¬

creditor

Reduce Govt. Funds In

Gaisadian Delegate To Bretton

have

been raised

economic post-war world, will

an

799

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

160

with, the

special

problems of international con¬
cern which will arise from the
cessation of production for war
purposes; and

(4) facilitate

•

by

cooperative

Wellington To Be Partner
William

admitted

S.

as

Wellington will be

of Sept. 1 to partner¬

Post and
New York
City, members of the New York

ship in Arrowsmith,
Welch, 115 Broadway,
Stock Exchange.

harmonization of na¬
of member States
designed to promote and main¬
tain high levels of employment
and progressively rising stand-

effort the

tional policies

The Assembly should have

c)

each

to

the Council

c) The

Secretary
be authorized

to con¬

23.

the event of a

a)

In

voke the Council in the event

by

a

of any emergency.

comply with

to

party

a

failure
dispute to
decision of the

29.

Committee

Security

a) The

Council

the

of

nent

immi¬
to peace; in all
the
Security

menace

cases,

the

Council

such action

b)

State
represented
Security Committee
be obligated to take

b) Each
in

the

should

A State should not have a
in the Council when its

the

needed

the Security Committee
for preventing or suppressing
a

Other

force.

of

use

with

interference

from

States

24.

any

Committee
should have power, subject to
the approval of the Council,
to organize the technical bod¬
ies necessary for the mainte¬
Security

furtherance of these aims.
25.

of peace,

The

19.

the

Council,

to

powers

b) The

International

as

spot

tracts, etc.

respect to such matters as:

adoption

Commission

International
International

2.

finance

to give

ecuted,

and

Settlement of Disputes

land,

Between States

20.

but

none

commodity

arrangements.
6. Food and

and

nutri-

The

Permanent

ternational

Court

of In¬

has

Justice

to their

9.

are in
respective

such

jurisdiction

be

to

declare that any

26.

The

22.

in

party to the dispute.

a) The

Council

acting

power

should

on

its

in¬

own

is

not

the Court.
ceed in

pending

bringing about
of

tlement

'

the

other

having
responsibilities.

have

27.

a

The Council should be

on

the parties to the
/

c) In dealing with

power

a

majority vote, to request the
Court of Interna¬

tional Justice to

visory

opinion

give

on

an

any




as

28.

a)

claim

ad¬

legal

the

principle

well-being

and

that

should

trust,
have

thirds

VII.

7/

vote,

the
to

to

measures

States

the

which have direct

-

for

a)

-

-

-

to

for

States

con¬
submitted tc

Charter

the

should

pro¬

duty of each State

in full good faith

tional law.

be

acceptance.

b)

The

vide

Charter

that

any

State to carry

should

pro¬

failure by a
out its obliga¬

tions under international law
is

a

matter of

concern

to the

community of States, and the
Assembly should have power
to

by

take

cognizance

of

the

failure.

re¬

36.

a) The Charter,
instrument

of

as

the basic

-international

in such

loss

or

Neither

of

applies

to

the

The

com¬

these

two>

exempted

fourth

last

and

power,
by two-thirds
including the votes of
continuously rep¬
resented in
the Council, tc

binding
VIII.

on

which

shall

but

ness,.

{only)! if

dealer

or

the busi¬

in

such

excess

The

rule

retains the provision,

which

adopt general rules of inter¬
law

broker

a

as

assets not used

would materially affect net worth.

States

national

in

only

over

vote

the

which must be made?
the case of a sole pro¬

business

The Assembly should also

b)

have

was

inserted

tion
and

be

all States.

in

dealers

its

on

exempting

1942,

who

do

adop¬

brokers
extend

not

credit to customers and who hold

Amendment of the Charter

the funds

or

securities of custom¬

•

rV:

38.

1^-

-l/ Vi• *

.:-\ V'V.•

■*

•

*/"

v

should

Charter

a) The

'

'

pro¬

vide that amendments may be

adopted by the Assembly by
two-thuds vote including the
of

votes
sented

at

the

States

the

time

Council, but that

no

repre¬

in

the

vote

the j! amendment
formally proposed.

after

on

was

b) An amendment should en¬
into force

only

incident

temporarily and as an
to the prompt consum¬

mation of cash transactions.

Commission's

The

experience

with the financial statements filed!

by

brokers

Rule

and

X-17A-5,

as

dealers
well

under

its

as

ex¬

perience with the bookkeeping
requirements of Rules X-17A-3
X-17A-4. leads it to the

and

con¬

that it would be imprac¬
ticable to impose any more comclusion

nrehensive

adoption by the Assembly,
for¬

from

requirements

this

at

time.

one

year

but if within that period
mal

objection has been
pressed by as many as
enter

into

force

the nresent definitions

tain

ten

eluded

unless

within the following year

the

For the sake of simplicity
Commission has also deleted

ex¬

States the amendment should
not

ers

after

ter

its

a

com¬

of

prietor, is the excess of liabilities
not
incurred. : in! the course of

adoption may take place be¬
one
year
has elapsed

Law
The

the

dependent

to adopt general

ventions

of

existence of which

profit

securities.

legal effect.

a) The Assembly should have
power

vote

concurrence

Supremacy of International

claim

Assembly
by two-

taken

have

not

such

any

accounts

deductions

fore

recommend

be

sponsibility
peoples.

two-thirds

by

with

"-. ■:

35.

development

power,

37.

have

should

Council

might endanger good under¬
standing between States. • V

the performance

secure

this

ized

Charter

the

with

position

dealer and of partners,

or

mitment.

in¬

be

by
the

of

value

short

or

adjusted according to the unreal¬

is thus declared

to

the

of

long
in

similar safety

a

ded uction,

therefore

its obligations under interna¬

deoendent peonies form
sacred trust of civilization.

should

the

adjustment by the States concerned
of any situation the

pro¬

of

of

that

has

and

to carry out

should

broker

d;

«

Assembly

the

by

jurisdic¬

Assembly given by twothirds vote, to advise the re¬

such.

Charter

•

which

ment

the

to take cognizance of it

The

The
and

pro¬

States, and
should
have

Assembly

b) To

dispute,
the Council or the Assembly
should have power, by simple
Permanent

;

.

c) Any provision in an agree¬

ceased to be binding.

continued

the community of

the

sembly should thereupon have

binding
dispute.

34.

humanity

that any failure by a
State to live up to this obliga¬
tion is a matter of concern to

au¬

continuously represented
in
the Council, to give a decis'on

,/•

pro-

should

- :

*

International

judgment

onerous
.

<

Charter

of

should have

power,

of

)/,);! opinion.

on

atory

vide

dispute
to the Assembly, and the As¬

by two-thirds vote in¬
cluding the votes of the States

specialized
should

mitment

advisory

an

contractual

open

is

contemplated

give

to

net

The

which
applies
of a broker or

10%

of

each

Justice

agreement has become unduly

which will not vio¬

justice.

b) The

a

power

Charter

manner

and

including the votes
of
the
States
continuously
represented, to give a decision
binding on the parties to the
dispute
thorized to transfer

The

late the dictates

thirds vote

b)

policies

the duty of each State
to treat its own population in

by two-

power,

a)

margin

simple major¬

ity vote, to request the Per¬

application by any
other party, to give a declar¬
tion,

claim

a set¬

dispute by
the- Council

means,

should

suc¬

Court

Justice

coordinate

to

agencies

before

If it does not

Assembly,

commitments,

the

dealer

or

partners.

case

who has

manent Court of International

party to the agree¬

any

only in the
dealer

ter; for this purpose it should

cooperate in the
revision advised, the Perma¬

acting

the activities of international

of any dispute between States
which

with

accordance

the

or
at the request of
State, to take cognizance

If

of

deduction,

have power, by

condi¬

existing

to

third

broker

the

himself : and

provision in

short 'in

and

long
of

accounts

ment fails to

adopted by the Assembly and
subject to general cohtrol by

have

itiative
any

b)

Commission
power,

fully executed,

securities

agreement between States

consistent

nent

have

which

The

safety mar¬

a

gin of 10% of the market value of

is inconsistent with the Char¬

tions.

v

General

by

have

of. the

States

all

over

by two-thirds vote, tc

power

ground that it is not

adapted

terchange.
should

any

?

Population and migration
problems.

exercised upon an application

the

'i-'-

i

dan¬

10. Cultural and scientific in-

legal rights and which are
not pending before the Coun¬

cil,

■>*.*;'.-■

other

and

drugs.

gerous

putes in which States
as

>•.-./

shoud

have jurisdiction over all dis¬
conflict

.■:;v

.

Narcotics

been

not

on

•v.-

8.

between

prevail

b) The Assembly should have

to

ment

.

second deduction is

should

agreements between States.

advise the revision
by the parties of any agree¬

tioo.

21.

concurrence

vote,

agriculture.

health

7. Public

with other States.

of

readily converted into cash.

Assembly given by two-thirds

5. International

seeking to settle its disputes

should

Council

The first de¬

scribed deductions.

the terms
and 'net
comment,
and
on

for

law,

by two-thirds vote and

the

with

tions.

proclaim
each State to use
pacific means in

The

a)

power,

communica¬

4. International

The Charter should
the duty of

33.

and air.

sea,

of

accounts

capital'

an

an

3. International transport by

IV.

and

partners and by making four pre¬

pro¬

assets and assets which cannot be

declaratory

a

(or de¬
in his

losses)

unrealized

a

by

adjusted

dealer,

accounts

own

de¬

duction is for the amount of fixed!

ceased to be binding.

investments.

.

to

is

"aggregate indebtedness'

between
States
which has not been fully ex¬

trade.

1.

party

any

X-15C3-1,

published

agreement

or

or

capital"

the net worth of

mean

adding unrealized profits

Rule

definitions

posed

judgment that because of an
esential
change of circum¬
stances
the
agreement
has

by

of

"net

term

ducting

con¬

i

;>

broker

1942, shortly after

23,

contracts,

commodities

fined to

also quote:

we

Nov.

when-issued

(cash)

The

•*:.

the

should

tion

envisage

creating

require¬

capital

prescribing

the

Justice

defined to include such

are

On

of

segregated

amounts

things

Aug. 11,

have jurisdiction, on applica¬

par¬

(B)

ties;

From the Commission's advices,

Court

the total

mean

secured by exempted

ness

obtained should be
helpful if, at some

thus

ments."

registered.#
Permanent

The

32.

op¬

an

us

which

of

should

the need
continuing
special agencies to facilitate
international cooperation with

for

by States, and to establish
agencies and methods for the
supervision and
control of
armaments.

should

Charter

ticularly

to

maintained

be

the general
define the
of these agencies.
to

and

'aggregate indebted¬

money

requires change in the method

•

publish the texts of all agree¬
ments

promoting

welfare,

prescribe limitations with re¬
spect to the size and type of
armaments

general

be needed

as may

which

provision.

Secretariat

The

termines that the public interest

registered with
the
Secretariat in accordance with

The

term

ness" is defined to

securi-?
iri
accordance with the Commodity
Exchange Act, and (C) liabilities'
on open contractual commitments,

extremely

not

c)

The

)

liabilities of a broker or
dealer, exclusive of (A) indebted¬

edge

States

must

future date, the Commission de¬

organ

any

between

ment

to create and maintain

regional,

for

have

by special majority
vote including
the votes of
the States continuously rep¬
in

the foregoing

such special agencies,

power

resented

a) The Assembly should have

or

should

Assembly

is

power

be needed.

may

GIO may

that

cases

independent

an

kers and dealers and the knowl¬

should pro¬
of the
disregard any agree¬

vide

by

filed

statements

rule."

pursuant to that

state¬

the first time, afford

Charter

The

b)

b) The Assembly should have

certified

financial

the

to

least

at

financial

a

portunity to study the financial
condition of all registered bro¬

becomes

with the Secretariat.

power

Commission

year

1942, and

reports re¬
ceived under this rule will, for

operative shall be registered

the

for

and

a

accountant.

States

between

Charter

to organize cooperation
among States directed to the

V

and to organ¬
ize such regional committees
as

freedom

human

into

the

the Commis¬
than a
year under Rule X-17A-5 and the
experimental definitions applied
23,

sion's experience of more

brokers and dealers file

the

be

should pro¬
every
agreement

that

entered
after

to

measures

Nov.

istered

Charter

satisfaction of human needs.

The

nance

in

pro¬

State

The definitions
are the result
the comments on the draft of

of

with

those definitions

test

presently adopted

prepared, and is about to
promulgate,
Rule
X-17A-5
which will require that all reg¬

be

X-17A-5

Rule

under

to

in actual practice.

representa¬

ment which in some

The

a)

order

in

tives of the securities industry,

Agreements Between States
vide

should

Charter

be taken for the extension of

taken by

powers

c)

31.

the duty of each

cooperate

to

the Security
Committee in execution of its

action

a) The
claim

refrain

may

filed

ments

col¬
State

various

and

definitions

and

mentally applied a similar set of
definitions to all financial state¬

:

in

helpful com¬

the proposed

since April 3,
1943, the Commission has experi#

has

administra¬

such

for

with

commissioners

once

VI.

Welfare

which

agencies

Commission,

of

number

on

received,

was

that

'

•

the

.

.

laboration

have

should

tion.

Promotion of the General

V.

opinion:
".

Assembly

comply with a deci¬
sion is under consideration.
failure to

by

should be obligated to

The

vote

part, to the full extent of its
resources, in any action taken

a

to assume responsibil¬
ity for the administration of
any territory which may be
placed under the direct con¬
trol of the GIO, and to create

decision,

the

to

power

for giving effect

to

Assembly.

30.

take

to

it may deem to

as

be necessary

the

continu¬

States

represented,

ously

respect

ments

Act

The Commission stated in

territory.

the

including

the GIO,
particular

by

stantial

Securi¬

of

Release No.
3322.
which was published on the same
day that the rule was adopted.
change

man¬

any

Association

Dealers, Inc.," Securities Ex¬

ties

be conferred

State

a

upon

with

by two-

power,

the

of

votes

only

or

have

thirds)/ vote

of

execution

tive

"National

take the measures
to assure the effec¬

to

date which may

of the Coun¬

or

have

should

Assembly

necessary

Assembly, the Council

or

should

i

y

authoriza¬

specific

the

of

tion

act

should

Committee
with

cil

initia¬

power> to act on its own
tive in any case of an
other

tional Justice

have

should

The

power

a

Permanent Court of Interna¬

18.

as

deem to be necessary.

bly.

General

should

such local investiga¬
the agencies may

permit
tions

in the Assem¬

or

de¬

ports to such agencies, and to

in

ing to the dispute, either

entail,

may

dispute should not have
question relat¬

a

for

responsibility

pendent peoples should have
a duty to make periodical re¬

vote on any

a

to provide for distrib¬
uting the burden which such
power

measures

rect

-

gated to take such measures.
The
Assembly should have

11 announced
of an amendment to Rule X-15C3-1 defining the terms
"aggregate indebtedness" and "net capital."
Rule X-15C3-1 pre¬
scribes for brokers and dealers registered with the Commission a
maximum ratio of aggregate indebtedness to net capital of 2,000%.
The rule was adopted on Oct. 28, 1942, under a provision suspending
its effectiveness until further or-3>
'
der
the Commission.
The rea- Nov. 28, 1942, it adopted Rule
X-17A-5, v/hich required reports
sons which impelled the adoption
of
the rule
are
stated in
the to be filed by brokers and dealers
A sub¬
opinion of the Commission in beginning Jan. 1, 1943.
The Securities and Exthange Commission on Aug.

the adoption

d) The States which have di¬

question connected with the
dispute.
d) A State which is a party

obli¬

be

should

State

J
Capital";

Defining "Aggregate

indebtedness" And "Net

.

(Continued from page 789)

Thursday, August 24, 1944

-

SEC Amends Rule

to /create permanent
agencies, general and regional,
which
would report to '.the
Assembly annually concern¬
ing the problems of depend¬
ent peoples.
power

Suggested Plan For A General
International Organization
the maintenance of peace, and

FINANCIAL CHRONICLE

THE COMMERCIAL &

•

it is

1942.

provisions
in
in

soecial

the
order

which
draft" of
to

situations.

experience

is

iu«-

Nov.

23r

various

meet

As

cer¬

were

additional

acquired

in

this

again adopted by the Assem¬

field

the

two-thirds vote in¬
cluding the votes of the States
represented at the time in the

sider

appropriate amendments

additions to its

Council.

Nov.

bly

by

Commission

will

con¬

or

yules.

The definitions go into effect on

9,

1944,

which

will

be

90

Volume 160

gressive

days after their publication.- The

Post-War Tax

intervening period will give bro¬
kers and dealers an* opportunity

tol apply the definitions to their
readjustments

that

during

examine

also

period the rules and settled practices of each national securities
exchange with

view to exempt¬

a

ing from Rule X-15C3-1 members

exchange whose rules or
^ settled practices impose minimum
y capital requirements more com¬
Y of any

prehensive than the requirements
adopted by the Commission.
• Y.

•>

,

>

Y

,

? Although the Commission has
already had the benefit of com-;
ments on the proposed definitions
pf Nov. 23, 1942,, it will ; welcome
any
comments which r interested

w.

persons may.; care. to.

the

90

next

days

make during
the defi¬

upon

presently adopted. Yy-YYY
;The text of the " Commission's

nitions
'■ v

action follows:

}:

and

the

vested in it and necessary and apt

the

in

propriate

an1 annual

estimates

It

would

permit net operating

loss deductions to be carried for¬

for

of

each

profits

excess

five

suc¬

for the two
following repeal of

taxable years
the

the

years;

it

tax

would

permit net operating losses to be

do, pursuant to authority
Y- conferred upon it by the Securi¬
ties Exchange «Act of 1934, par¬
/

to

(c), and 23

15

ticularly Sections

; {a), thereof, hereby, amends .Rule
.X-15C3-1 to read as follows:
.

Rule X-15C3 * l-~Ratio

>

-

,

of Aggre -

y;

gate Indebtedness to Net Capital.

YY

(a) General Provision—No bro¬

ker

shall

dealer

or

permit
to

indebtedness

aggregate

.

his
all
-

Yi Y(b). Exemptions—The provisions
I of this rule shall not apply to any
;; broker- or
dealer who
(1) does
credit -to

extend

not

any

unsecured notes and accounts; and
deficits

customers'

in

accounts,

except in bona fide cash accounts
within the meaning of Section

4
(c) of Regulation T of the Board
of Governors of the Federal Re¬
serve System;
'

Y^C) Deducting 10% of the
ket

short

(except
the

in

exempted securi¬
capital, proprietary

other accounts of the broker

and

dealer

or

mar¬
long and

of securities,

value

is

dealer

if such

and,

broker

partnership,

a

(D) Deducting, in the

person

securirr

or

money

carry

Yor owe money or securities to cus-

tomers,. except

•

as

'/transactions with
which

incident to

an

or

for customers

promptly consummated
by payment or delivery; provided,
to

shall

credit

That
-

are

extended

be

be

not

by

deemed

of

reason

a

bona fide delayed delivery of any

jsuch security against full payment
of the entire purchase price there¬
of upon such delivery within 35
days after such purchase.
..; (c) Definitions—For
the pur¬

who

dealer

v

shall

debtedness"
of

a

total

the

mean

broker

or

with

connection

case

has

of a

liabilities
dealer arising in

transaction

any

money

•loaned

among

things, money
borrowed,
payable against securities
and

securities

receive,"

credit

balances

to

in

short

net

securities, and equities

by

existing contractual com¬
in the capital, proprie¬
and other accounts of the

any

mitment

tary

dealer and, if such bro¬

broker

or

ker

dealer is

or

a

partnership, in
except as to

i

secured

by

the 'provisions of
Exchange Act and
the rules -and regulations there¬

cordance

This

Our

with

the Commodity

vision and plans

"

likely

with

-

-

beginning with

classified

be

individual commitment shall
reduced
by : the
unrealized
(or

profit

loss)

the

by

increased

commit¬

such

in

un¬

ment; and
broker

or

dealer

who

case

is

a

proprietor, the excess of (i)
bilities

which

have not

curred

in

of

a

individual

normal

rate would be

as

broker

a

assets

not

or

in

used

the

shall

ties

those

mean

of

less

specifically defined

as

exempted
(a) (12) of

Exchange

Securities

Act

of

1934;

(4) The term "partner," where
the broker or dealer is a partner¬

shall mean only a partner
agreed in writing/ that

ship,

has

who

the equity in any

pay

the

first

on

on

than

with

tions

For

40%.

income

net

corpora¬

$50,-

over

000 the normal rate would be

24%

and the surtax rate 16%.
No

of

which

debt,

would not be con¬
the national income

until

employment

would

surplus

when

levels,

full

the

above

made

national

the

be

used to reduce the debt.
The

would
the

$18 billion Federal budget
be met under the plan by

following receipts:

Customs

gift

Corporation
Individual

.

$300,000,000

400,000,000

—.

500,000,000

taxes—

4,000,000,000

———__

5,000,000,000

income tax—

income

Sales tax of

-

revenues

__——

tax

5,000,000,000

-

2,800,000,000

5%

! $18,000,000,000

Total

■

'•

tax; adoption of a retail sales tax
and of the proposed 25% limita¬

gift

Excise

taxes

$500,000,000

500,000,000

taxes

3,000,000,000

.

.

tax—

; 1,000,000,000

Individual income tax—_

13,000,000,000

Corporate

franchise

Total

The
raise

—

—

„

$18,000,000,000

would
72% of the budget by indi¬
Ruml-Sonne

plan

vidual income taxes and 51/2 %

by

corporate franchise tax, compared
with 27% each by
individual

corporation and

income

taxes

the

in

plan.
• YYY:W'YyY
In suggesting the small fran¬
chise tax of 5% to represent the
Cities

Twin
*

of

value

porate
Sonne

doing

business

in

cor¬

form,; Messrs. Ruml and
point out the important

fact that measures would have to
be

adopted

use

of

the

device to
vidual
tax

and

also to prevent the
corporate form as a

avoid payment

income taxes

or

of indi¬

to secure

advantages over partnerships

unincorporated businesses.

Like

converted
among

into

other

any

thereby;

cannot

be

cash,

readily

including,

things,;real

indebtednessll-

estate,
secured

fixtures;
memberships; prepaid

furniture

and

same

all,

conditioned,

security

only

treated

if at

issuance may be
individual commit¬

upon

as

an

(6) The term "customer" shall
include

every

person

except

a

partner as here defined.
The
amendment to the fore¬
rent,
insurance
and
expenses;!
goodwill; organization exoenses; going rule shall become effective
Nov. 9, 1944.
unsecured advances and loans to

exchange




national in¬
$95-$100 bil¬
lions, based on then prevailing
prices,- we agree with the Twin
Cities plan that a $120 billion in¬

the Twin Cities plan,

the

not

do

expect

is

come

reasonable base for sub^,;

a

Assuming the tax

sequent years.
reforms

Plan

Association
OOo,iv■

advocate to be in ef¬

we

fect, our estimate of the Federal
receipts would be as follows:
miscellaneous-

$700,000,000

Excise

Estate and gift taxes.—
taxes —L———

4,000,000,000

Corporation

5,000,000/000

and

Tariff

tax—
taxi.-^/

income

Individual income
tax, of

Sales

:

Total'

which also contemplates a
budget of $18 billions, but

Federal

1,100,0001,000

of

budget

$16,000,000,000

billions is

$16

predicated on a reduction in mili¬
tary and naval expenditures and
genuine
Government" economy,
is

and

more

than twice

the 1&38

figure of $7.3 billions.
has

Allowance

in the above

not

been

made

figures for the effect

(estimated to lower the receipts
corporation and individual
income taxes by $1 billion eafch)
of the 25% Federal tax limitation
from

Planning

Based
on
the
Budget
Di¬
can come in easy stages
rector's 'July,
1944,f? figures of
through the employment of sur¬
$18.9 billions from individual in¬
pluses developing in the Federal
come
taxes
and
$16.5
billions
Treasury.
This aspect alone is
from corporation income taxes, a
likely to invite opposition from
both
the
Treasury
Department general estimate of the compara¬
tive effect of the proposed tax
and Congress.
Prevailing senti¬
reductions follows:
ment of House and Senate tax
t
94%
leaders indicates that some defi¬ National Planning Association
31%
70
Twin Cities
73
nite debt reduction will be in¬
National Securities & Research
cluded in whatever post-war fis¬

tirement

—

cal

program

is adopted by Con¬

grams
except
amendment
to

for
the

the

proposed

Constitution

Corp.
—
——75
70
'Individual Income Taxes (estimated re¬

duction

from

Budget).

Taxes

Income

tCorporation
reduction

Budget).

from

(estimated

.

Conclusion
To

enable

full

employment

in

post-war era and the neces¬
sary stimulation of venture cap¬
ital into private industry, thor-^
the

ough revision of the existing tax
structure is required.
Encourag¬

the receptive atti¬
and the con¬
structive suggestions being made
by business and Government tax
experts.
Not only is intelligent
removal of oppressive taxation on
business
essential for post-war
ing

signs

tude

of

are

Congress

prosperity but in our view it is
equally important to adopt with¬
out delay a sound program to be

hostili¬
"Investment
Timing," issued by the Economics
& Investment Dept. of the Na¬
tional Securities & Research Corp.

made effective as soon as
ties

cease.

—

From

individual income tax being

sive

the

4,700,000*000

2 7c

——

Our

500,000,000

'Association's
because, involving the passage of
program makes no provision for
a
constitutional amendment, it is
Federal
debt
retirement, which
hardly likely to become operative
it foresees occurring in periods of
in the foreseeable future.
over-expansion of private busi¬
ness
activity.
Apparently both
Tax Reductions by Three Plans
plans reflect the belief that re¬
National

/'YY1.;;
YYYv
Entirely different and V almost gress.
diametrically opposed to jftie;Twin
Proposed 25% Federal Tax Limit
Cities Plan in some1 respects is
"Investment Timing" in its is¬
the post-war tax program' spon¬
sue
of March
16 last discussed
sored by the National Planning
various possible post-war tax re¬
Association, a private organiza¬
forms which appear in the Twin
tion of business, labor and gov¬
Cities and National Planning pro¬
ernment
representatives.
This
plan,

a

than

higher

come

,

National Planning

chief

revenue.

source

The

levies; destroy any surplus ap¬
Government
plicable to reduction of the na¬
contend
tional debt, and unwisely freeze
income of cor¬
to hold down a specific figure into constitu¬
of

authors

the
porations tends
wages, raise the cost of goods and tional law.
services, limit the yield on riskThe
proponents
bearing investment, and impose
that

ment; and

constitutional amendment.

tion by

While in the first post-war year

Reduction of the National Debt

provision is

specific

retirement

for

lia¬

securities

15%

the next $15,000,
19% on the next $5,000 and 31%
on the next $25,000, plus 10% sur¬
tax on the first $25,000 and 22%
on the next $25,000, or a total tax
17%

$5,000,

taxes

business,

would

$50,000
of

rate

Excise

if such excess would ma¬

but only

net income ex¬

surtax

than

less

sole

been in¬

10%, with surtaxes

Corporations with net incomes

and

of business
dealer over (ii)

tax

Y'

the Federal

miscellaneous-

and

ex¬

income

•

dividends

we

and

Estate

tax

transac¬

complete elimination
of corporation
and the capital gains

favor

of double taxation

receipts would be as follows:
Tariff

ranging from 6% to 50%, the first
$2,000 of
empt. Y

Under this program

!

dispropor¬

smaller

Y.yYYYyy,yyYY;YYY'"

tions.

emptions would be raised to $600
for single persons, $1,400 for mar¬
ried persons and heads of families,
and $400 for each dependent. The

Estate

course

the

income

the

of

costs

issues

facilitate

We

Act

and Exchange
to

reduce

to

and

tionate

capital assets.

as

Securities

be " modified

less would not

or

individual

sonal

Miscellaneous

Deducting, in the

(E)

the

retail sales
tax of 5%, with no exemptions.
With the sales tax adopted, per¬

is

any

The authors also recommend that

The plan proposes a

exempted securities, and except
that the deduction with respect to

S'Y'/

Deducting fixed assets and

assets; which

less

-

tax re¬

the Twin

16% normal rate, plus sur¬

a

f

partners;

as

which,
while
un¬
adopted in present

be

to

such

the National Planning

and

Association

should start

*

(B)

^

View

tude of Congress towards

accounts he may
with an assumed national income limiting to 25% Federal income
maintain
with such partnership
taxes
on
both
individuals and
under; and y.aY"Y;/■
of $140,000 billions at 1943 prices,
shall be included as partnership
was
announced on July 24.
It corporations and taxes on inheri¬
property;. '■ }■: • Y vYYY- '■ V i-> /YY-. \*Y/V
tances and gifts (except in times
tractual commitments;
was prepared by Beardsley Ruml,
K5) The term "contractual com¬
of
war).
The movement sup¬
^.(2.) The term "net capital" shall
Chairman of, the Board of the
mitments" shall; include under¬
be deemed to mean the net worth
Federal
Reserve
Bank of New porting this proposed amendment
has
been
making progress,
17
of a broker or. dealer (that is, the? writing, when-issued and delayed
York and Treasurer of R.H. Macy
delivery contracts, endorsements
States having approved the plan
excess" of
total assets over, total
& Co., and H. Christian Sonne.
of puts and calls, commitments in
with only 15 States now needed
liabilities)adjusted by vY Y?
Y;
President of the chemical firm of
and
soot
to bring it before Congress.
(A) Adding unrealized profits foreign Y currencies,
Amsinck, Sonne & Co. of New
(cash) commodities contracts, but
'. The Treasury Department has
;(or deducting unrealized losses)'
York.
Y Y Y/v. Y YY.'"; '>);YY/-Y
in the accounts of the broker or shall not include uncleared regu¬
strongly opposed' this proposal,
The outstanding feature of this
dealer
citing objections such as: the plan
and, if such
broker / or lar way purchases and sales of
plan is the abolition of all cor¬
dealer is a partnership,.'•> adding securities and contracts in com¬
would increase the tax burdens
modities futures; a. series of con¬ poration taxes except a 5% fran¬
equities (or deducting deficits) in'
on lower incomes and also excise
tracts of purchase or. sale of the chise levy, a graduated progres¬
accounts of
.

Own

We welcome, the receptive atti¬

Cities

taxes

income

a proper

Federal budget.

expenditure,

advocates that indi¬

plan

vidual

except that assets held

months

sidered

the

exempted securities;
•
;
'
f
KB) Amounts aggregated in ac¬

six

accounts of partners,

securities in Section 3

Indebtedness

a

contemplated

position

accounts, but excluding:

Y/ (A)

the

be

market) of each net long and each

in customers' commodities futures

•

of

in

tomers' accounts having short po¬
sitions

open

credit terially affect net worth;
(3) The term "exempted securi¬
cus¬

free

customers'

balances,

"failed

shall

(which

value

market value whenever there is

to

money

whatsoever, > including,
other

in¬

deemed

be

the

or

realized

of this rule—
Y
(1) The term
"aggregate

pose

Act of 1942,

normal

broker

,Y ties for .the account of customers

fined

ac¬

contractual commitments, 10%

not

two

Capital gains would be de¬
as provided by the Revenue

"

ers.

of

in

counts of partners;

to whom he. sells or for whom he
does

credit

the

corporations, gains and losses
being reported 100% for corpora¬
tions and 50% for other taxpay¬

or

purchases any securities, .and .>(2).

•

for

back

and

be

officers, directors, em¬
ployees, and salesmen; customers'
partners,

2,000% of ties)

other persons to exceed,
Yhis net capital.

permitting such

carried

rate reduced for both individuals

for

and for the protection of investors
so

be

%'mJ

distortion.

taxes

interest

public

effect,

to

of

terms

prevent the balancing of

-

ward

of the functions

exercise

profits credits would be
though the law were

used just as
in

what

capital transactions and
the like is distorted, they say, by
tax considerations, and the higher
the Federal tax the greater the

Federal

Commission, deeming it necessary
for

for each of the two

preceding years or forward, at the
option of the taxpayer.
Unused
excess

in

sound

Business judg¬
is economically

rates.
to

as

form, contain much that is con¬
They promise to con¬
l%r on the structive.
budget of $18 billions, preceding taxable years.
to
a
foundation
upon
first $2,000 of taxable income and tribute
/. Double taxation of corporation
and
anticipates a post-war na¬
graduating upward to 50% on net which to build a practicable rev¬
tional
dividends would be eliminated to
income
of
$120
billions
incomes of $250,000 or over, ex¬ enue structure that would repre¬
a
based on 1942 prices. '■•Y
great extent.
Forty per cent
emptions being the same as at sent business as well as the Gov¬
i
The plan proposes to repeal the of the dividends received by indi¬
present. Y':.YY:;/;;Y:•' ernment, although we think Con¬
•excess
profits
tax,
the capital viduals from domestic corpora¬
No sales tax would be imposed, gress
is unlikely to repeal the
would
be
excluded
from
stock tax, the declared value ex¬ tions
and
excises
would
be retained corporation income tax and leave
cess
/; Y YYY/:Y/YYv Y
profits tax, the 2% penalty gross income.
only on tobacco and liquor and individuals subject to present tax
Changes are recommended in
imposed ; for; filing consolidated
perhaps on gasoline,
The capital rates or even higher ones.
corporate returns, and the pro¬ the present "capital gains" provi¬
gains tax would be kept for the ; We are in hearty agreement as
vision requiring corporations to sions of the Internal Revenue Act,
time being, and future issues of to repeal of the excess profits tax,
'include in gross income 15% of providing that losses be allowed
Federal,
State
and
municipal the capital stock tax, and the
the
same
basis as that on
the dividends received from do¬ on
taxes
cited
in the Twin
bonds would not be tax-exempt. other
which gains are taxed, with the
mestic corporations.
Cities plan. '
Y
It

ment.

Exchange ceeding taxable

-

ment

pricing,

carried back

in St. Paul

men

Minneapolis.
The main ob¬
ject of the plan is the encourage¬
ment of venture capital and the
stimulation
o f
production
t o
achieve the goal of full employ¬

...

;WiThe Securities

professional

and

The Commission

effective.

come

will

and

as may appear nec-

before;the "definitions be¬

essary

\

Planning

(Continued from page 779)

businesses and to make such

own

801

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

taxing

double
come

taxation
without

on

dividend in¬

regard

to

pro-'

of

the

plan

maintain that there is nothing in
their

tax

principle

that

Fashion Park Attractive
A

detailed

study

of

Fashion
in a

is contained
special circular oreoared
mons, Linburn &
Co., 25

Park,

Inc.,

bv Si¬
Broa4*
St., New York.
Conies of this
interesting study mav be had from

would the firm upon

request.

"The Meaning
reached

■'

0 I Bretton Woods"

(Continued i

,

44

the

by

was the
from many

nations,
men

'

779)

page

participating trouble, the Fund stands ready to
its

make

spirit in which
different lands help them

approached a problem which they
they
could
solve
only
through cooperative action. They
know from the tragic experience
of the
two decades which '• fol¬
lowed the last world war that, if
their
countries
tried again1' to
achieve economic security through
separate
national action, they
would achieve in the end only
economic chaos and economic aggression.
And they knew that
these
lead inevitably down the
road to war.
The alternative to

fknew

:

rom

economic

economic cooperation is

economic warfare is
initial phase of armed

resources

this crisis."

over

"Yes,

White:

Mr,

to

available
it has,

as

the

be

resorting

more

no

to

sharp

practices
such as depreciating
currencies, imposing restrictions
on
the payment of goods they
have bought from other countries,
and all
the other tricks which
Nazi

played
right?"

Germany

world. Is that

upon

the

precisely

those practices which contributed
met, therefore,
deter¬ so much to the depression of the
mined to uproot at least this par¬ Thirties and eventually led to the
ticular
cause
of
the frightful war."
,

in

another's good will
in their common

one

faith

with

capacity to solve a common prob¬
They met determined to

lem.

The

uit.
This is a hopeful augury, I
{hink, for the important security
conference which opened today at
Dumbarton Oaks here in Wash¬
ington.
Men have learned at last
that the hopes they share can best
be realized by a joining of their

and

„

,

hands.
"At

'
Bretton Woods

we

agreed

instrumentalities

two

upon

to

think

public is just as foggy about
the Bank as they are about the
Fund. I would like to hear a sim¬

ilar

a

solution

"Dr. White, I

Mr. Granik:

explanation

national

Bank for

of the Inter¬
Reconstruction

Development."

Dr. White:

the
Bank,
bailiwick."

Mr. Acheson:

"I think the Bank

much simpler Institution than
the Fund and it ought to be an
institution which every American
can understand.
Every American
has a bank in his own town and
he understands how it works. The
s

a,

another toward a secure
world: an In¬ primary purpose of the Bank is
ternational Monetary Fund and an to
make capital
available from
International
Bank for Recon¬ those countries which have capital
struction and Development. Some to countries which want to borrow
of the American delegates to the for
purposes
of reconstruction
conference are here tonight.
I and development. Now, in order
think it would be helpful if they to do
this, each country subscribes
were
to give you their impres¬ to
shares in the Bank, just as
sions of what was accomplished." every stockholder subscribes to
:
Mr. Granik:
"Now, Dr. White, shades in a company or bank in
one of the things that I have dis¬
our
own 'towns
in-this country.
covered about the Bretton Woods Part of that subscription is paid
conference is that very few people in so that you have cash available
understand either the Fund or the lor operation.
The greater , part
Bank.
They feel that the agree¬ of it, however, is not paid in. The
ments are written in such techni¬ greater part of it is a guarantee to
cal language that the ordinary make good losses in case the Bank
man in the street can't understand
incurs losses.
In that way the
them.
Now I would like you in a Bank is equipped with
capital.
few words to describe, the Mone¬ Now, one of the most important
tary Fund."
things about the operation of this
j"
>;*'■.
f>
1r''
Bank is that the Bank does not
The Fund Explained
compete with private investment.
Br. White: "Well, stripped of its The Bank
will guarantee loans
•technicalities, the Fund is an inter¬ which private investment com¬
national
organization set .up .to panies make."
achieve new high levels of world
Mr. Brown:
"Dean, don't you
trade.
These we must have if we
think you ought to point out that
^re going to have full employment the Bank loans money or guaran¬
after
the
war.
Now, the Fund tees
money only for the purpose
help

one

functioning of one would
help in the proper functioning of
the other.
But the Bank is de¬
proper

signed,

Dean says, to provide

as

long-term capital for reconstruc¬
tion and development, and the
course,

merely provides
for or¬

stable exchanges and

for

derly

international

of

conduct

trade."

of

the

and

and stable economic

;;

.

Mr. Acheson:

is

if

that if you have the
don't need the Fund,
have

you

don't
seems

to

the

need
me

Fund

the

you

Now,

Bank.

it

that the exact oppo¬

Dr, White:

"I should

think

so.

that they both are

I should think

of

immediately after
stability

rates

change
the

and provide for

war

able

be

to

buy

danger

serious

the

running

thereafter, so
and importers will
and sell without

rates

exchange

that exporters

of

large losses from unanticipated
exchange fluctuations. Secondly,
the Fund will prevent competitive

which does
trade and
eventually helps to bring about
depression. Thirdly, it will pre¬
exchange depreciation
so
much to
disrupt

vent and

seriously cut down those

exchange discriminations and con¬
trols which serve to stifle trade
and foreign

investment."

Senator Tobey: "In other

Mr.

White:

word

I

would

I

order to

have

like

just

words,

another
add.

to

In

bring these three things

about, the Fund necessarily has to
some pretty large resources

have

broad powers, and the
Fund is equipped with those re¬
sources
and those powers.
In a
nutshell, then Harry, the Fund
and pretty

provides international machinery
stabilizing the values of for¬

for

eign currency and for playing the

financial game fairly in the field

*

of

foreign

If

the

filling

trade

countries

and

commerce.

which

are

ful¬

these obligations get into




has

each other.

nothing

relief

productive

and

sound

of

intended

is

They are

than are
private bank.

WPA projects

more

the

"The

responsibility

reconstruction projects.
no

of

loans

any

or

f

Self-interest?

,

Ned,a.

"Well,

Tobey:

recent critic of the Fund came out
and

charged

with

us

an

adventufe

in world altruism. I rather

that

world of

wide

could stand

ours

dose-

cynicism that has prevailed

years."

Mr. Granik: "On that

Secretary,
that

if

throwing

,

;

t

topic, Mr.

have heard it said
States
joins

we

the

Fund

the

a

place of the world¬

often in past

so

accept

I think this old.

challenge.

of altruism in

'

to
do with
rehabilitation.

Bank

The

finance

to

or

the

are

UNRRA.

ni

Morgenthau:

Secretary
either

■

Senator

United

Bank

and
our

money

be

will

we

How

away.

about it?"

Secretary Morgenthau: "To date

self-respecting this war has cost the American'
peoples to get back on their feet people over 200 billion dollars. In
economically and thus to buy the order to set up the Bank and the'
goods which we produce.
As to Fund, this country is asked to in¬
the spirit which motivated the vest six billion dollars, which isf
representatives of these peoples at less than the war costs us each
Bretton Woods, I think I shall ask month.
Moreover, there v is -no
Senator Tobey to give you his re? reason to believe that we shall
help

will

They

actions."

.

,

talk that the
United States dollars in the Fund
will become exhausted and then
the Fund will break down."
been

lot

a

of

Mr. Brown: "I don't think

is very much to

there

In the first

that.

,

precaution

*

Every pos¬

was

*

.taken at
both in--

Bretton Woods to protect

"Mr. Brown, there

Mr. Granik:

has

this investment.

lose

sible

of Dollars

Exhaustion

place, not all the countries in the
Fund are going to use its credit
facilities.
Certainly a great num¬

stitutions

against loss and to in¬

them against abuse. :< The inJ
vestment should be returned to us

sure

many

times

trade.

The

will

in

over

a

and

Bank

revival of
Fundt

the

the peace for
years to come, and for that reason
alone
they are well worth vour
investment in ,the*n."
"
help

preserve

.

Senator Tobey:

They both perform very essential
ber of countries, such as South
functions on different aspects of
America,even
countries
like
trade and capital."
France and Holland, which have
Mr. Brown: "It is very evident, been
invaded, have got large gold

"Well, Mr. Sec¬
retary, I concur (and it bears re-,
iteration) that we are putting in
a total investment or subscription
into the Fund and Bank of six

it

billion

to me, that the Bank, by

seems

providing funds to pay for capital
imports such as machinery of a
country which wants the machin¬
ery
in connection with a new

project, makes it much easier for
that country to maintain its nor¬
mal balance of trade and pay for
its current imports."
Dr.
is

White:

"Yes, I think there

connection

that

them

between

in addition to the other one."

Mr.

"It

Brown:

:

certainly

re¬

duces the temptation
sure on

of the pres¬
country to *use the Fund

a

for purposes

other than maintain¬
ing the value of its currencyt,in

exchange resources,
and they are going to use those up
first; they are going to keep their
ability to borrow from the Fund
and

foreign

or

have

in

the

to it

recourse

as

an

they

And

hole.

really expect to use it in

ace

don't

the near

future."

"Even if

White:

Dr,

they do,

what the Fund is
should find them¬

that is precisely

if

they
selves up against an unanticipated
emergency in which they have to
draw upon the Fund, that is ex¬
actly what the Fund is there for."

for;

"Exactly; It seems
to me it .is. like a reserve account
purely normal exchange transac¬ or a line of. credit with a bank,
tions."
something which even if you don't
Mr, Granik: "It is said the Fund use you are glad, to know it is
will be given certain powers to there."
bring about changes in trade poli¬
Mr. Granik: "Cannot these safe¬
cies and that we may be forced
guards be removed or waived?
by the Fund to lower our tariffs. What obligation is there for the
Senator Tobey, what do you think United States to replenish dol¬
of this?"

that the

i

Mr. Brown:

.

dollars

for

world

peace

and

prosperity, but
over
and
against that we are putting out in
war,. expenditures
each
month
seven

billion dollars for death and

destruction."
Dr. White: "Well, Senator, youj
speak of spending money on war *
I think it needs to be emphasized
that this is

investment and not

an

expenditure.
The six billion
that you put in here you will get
backhand with interest." ■. •.
.'
an

.

-

Mr. Acheson: "That is the

that

the

I

wanted

.one

out.- It

point

that

seems

criticism to

to emphasize, too,
Harry just brought

to

me a very

come

strange

from Americans

that foreign investment is

throw¬
J have
heard some people say, throwing
money down
a rat-hole. * If any
country in the world has ever
ing

money

away,-

or,

as

benefited from foreign investmentit

has

been

the United

States

of

America, and I think that the in¬
vestors
have benefited too, and
Mr. Brown: "In the first place,
what both of these plans mean is
the country can only draw 25% of
that the same benefits which have
its quota in any one year.
In the been extended to this country in

lars?"1.":

Senator

•

helps to bring this about by doing
three things: First, it will help
an
orderly
adjustment of
ex¬

'

Fund

^

site of that is true."

•

■

dent?"

that I hear people

things
you

-

the' foreign

that

,

Altruism

you

countries
were
motivated
by what
they
thought they could get out of the
United States through the Fund
or
the Bank, or did you find a
spirit of real cooperation evi¬
find

"Well, Harry, one

needed to supplement

"Why don't you take
Dean?
That's your

They

separate institutions.

of course, interdependent in¬
stitutions in the sense that the
are,

Did

that?

about

feel

you

These

"Well, they are two

Dr. White:

Bank

the

solution, and although the
was not easy, they found

/find

Bank Explained

between

Bank?"

the Fund and the

saying

tragedy through which the world
is now passing.
They met with

just

White,

"Dr.

the relationship

what is

Fund, of

Br. White: "Yes it was

"They

and

Granik:

Mr.

very

"And there will

Senator Tobey:

conflict.

faith

the provision in the Bank which
provided precisely for the point
you made.
In other words, that
the funds, which would be pro¬
vided in the form of foreign ex¬

orderly manner."

warfare, and
but

countries on local services and
products, and I pointed to

local

change,
are
for
the
purpose
I chiefly of purchasing imports." -

said, very large resources amount¬
ing to almost nine billion dollars
for the purpose of helping those
countries adjust their trade in an

Thursday, August 24, 1944"

FINANCIAL CHRONICLE

THE COMMERCIAL &

802

Tobey:

Fund

has

"I

would

say

nothing to do

with the tariff

policy. The ques¬
shaping the tariff policy is
exclusively a matter for Congess

tion of

place, there are various pro¬ •the past are going to be extended
in the Fund which re¬
to other countries in the future."
quire a country whose balance of
Dr. White: "Not only are the
no provision and no reference to
payment position improves and
benefits going to be extended to
questions of tariff policj."
which gets more gold and foreign
other countries, but quite obvious¬
Dr. White: "Wouldn't you say, exchange to nay it back into the
ly our own exporters and manu-r
of
providing for an exchange none the less, Senator, that an ap¬ Fund.
With all those considera¬
facturers and our labor are going
needed in connection with a re¬
propriate
tariff
control
would tions, I don't think the dollars are
to benefit by such extension of
construction or development proj¬ help
in, the proper functioning of going to run out if we maintain a
credit. This is not an organization
ect?"
the Fimd.ps well as the Bank?"
] ;
. •'/
;
proper trade policy."
that
is set up to
benefit other
Mr.
Acheson:
"That is quite
Mr. Acheson:
"That is what it
Senator t Tobey:
"I
certainly
countries, but rather ourselves as
right."
should,1 and I might add here that all gets back to, Ned, what Sen¬ well."
Mr. Brown: "It requires, does it we
Republicans, and Democrats ator Tobey was saying a few mo¬
Mr. Acheson: "I suppose every
not, that the local expenses for as well, must learn the fundamen¬ ments ago, that we have got to
transaction
in
which you loan
labor
and
local
materials
be tal lesson that if nations are
have a realization that if we want
going
money and borrow money is car¬
raised by the country in which to
buy from us, we must be wil¬ to sell we have got to buy, and ried out for the profit of both the
the project is located, without re¬
ling to take their goods in return that you cannot have over a long lender and the borrower, other¬
course to the Bank?""
?
period of time a complete dis¬
in payment."
wise it wouldn't take place." V "
equilibrium of the income and
Senator Tobey: "And amplifying ;v Br. White:
"In other words,
Dr. White: "That is right."
what
Dean
Acheson
and
Ned then, neither the Fund nor the outgo of a country any-more than
of an individual."
iv.
Brown have just said, I would add Bank is a substitute for a proper
The War Debts and Lend LeaseMr. Brown: "I think'That is ab¬
that loans in which the Bank is commercial policy."
Mr. Granik:
"Speaking of in¬
solutely correct.
Yoq,.. can take
interested would be only for the
Senator Tobey:
"That is cor¬
abroad,
Mr.
Brown,
gold for a while but the gold gives vestments
purpose of rebuilding industries, rect."
out, and you can loan -money for* since the Bretton Woods conferT
public utilities, and so forth in war
Mr.
Acheson:
"They are all a while but you get tired of doing ence I have had a number of busi¬
devasted countries, and develop¬
part of one much larger policy.
ness and banking leaders ask me
ing natural resources and indus¬
that, and ultimately if you sell;
Wouldn't you say that is true?"
how the proposed.Fund and Bank
tries in under-developed countries.
you have got to receive payment,*
will
affect existing investments
Is that correct?
Dr. White:
"Yes, I think that and
you can only receive payment abroad. And also the war debts
it is important to emphasize both
The Exporter's Angle
in goods, but even if we should and Lend-Lease."
> '
>
those points, that a proper com¬
Mr. Brown:
"Well, directly it
Dr. White:
"Ned, I think it is mercial policy will help very maintain a policy of restricting;
nott affect
them
because
but, Ned, I think you would be greatly in the proper functioning imports and encouraging exports,; will
neither the Fund nor the Bank is
interested in the conference that of the Fund and the Bank and the
we would have done a great deal
set up for the purpose of taking
I had with a couple of representa¬ proper utilization of the Fund and
to build up the world, and while
care of past debts, whether private
tives of one of our largest pro¬ the Bank will make more easy an
we might have our money frozen
or inter-governmental.
The Fund
ducers in this country of heavy appropriate commercial policy."
to

determine.

The

Fund

next

visions

makes

:

.

export

goods.

They

wanted

to

for
Not

know

precisely
that
question;
they wanted to know if the Bank
made large loans,
was

spend

there

those

that

what
they

loans

in

assurance

a

belive

Mr.

Granik:

genthau,

one

time

in

the

Fund, I

don't

A WPA

"Secretary
newspaper

Mor-

we

that,

could

writer

wouldn't! has called the Bretton Woods plan
their own an international WPA.
How do

with

lose

the

any

safeguards,
considerable

portion of it, although there might
be

some

delay in getting it out."

is set up

%

for the purpose of insur¬

ing that payments on the current
account will be met promptly, and
the

Bank is set up

the investment
to

of

to encourage
capital and

new

provide that that new capital

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

160

Volume

asking what the possibilities

repaid, but both, by pro¬

are

moting the trade, prosperity and

are

will

be

production of export goods by
concerned, will make
a situation, in which it ought

the

of

trade, what the policy is in
the future toward trade abroad,

the country

and this

for

the great

countries

for

possible

be

to

to

Dr.

seems

to

me

to be

one

White:

"Well, not only do
much more readily pick up and business men feel that way, but
catch up on old and defaulted speaking of the bankers, they are
debts."
displaying a far greater interest
Dr.
White:
"In other words, in both proposals. They are form¬
Ned, that even though the Bank ing committees to study the pro¬
They have asked for con¬
and the Fund are designed to in¬ posals.
ferences with us to have us ex¬
crease trade in the future, and to
increase the flow of foreign in¬ plain some of the details of the
vestments in the future, it is fair Bank, and they are giving every
evidence of having a sincere and
to
say
that with the increased
intense interest in the Bank, not
prosperity that comes from that,
many
countries will be able to merely because they may have
fesume
servicing
some
of the greater profits, because as Ned
Brown says, they are interested in
debts they are partially or wholly
helping to achieve international
in default on."
prosperity."
Mr. Brown: "I think that is un¬
"

questionably

have

I

so.

never

hasn't fact, Harry, going back to the
epoch of the Conference itself a
its indebtedness if

wanted to pay

month

it could."
not the

Tobey: "Ned,

of the Bretton
conference was the fact

least of the results

Woods

produced unity among
the different delegates from the
different nationsNow, in my
that

we

Judgment (I think you will con¬
cur) that constitutes a goodwill

real
banking.

account which will be a very

international

in

asset

view?"

Isn't that your

feel about that,

you

think

is

it

Ned, but 1
than that.

more

even

sounded

provisions in the Fund
calls' for a reduction in the ex¬
One of the

warning note to all the
banking interests of the country,

who

withdrawal
that are earned by cor¬
porations that either have invest¬
abroad

ments

or

that

own

plants

and one of the conse¬
quences of the adoption of the
Fund will be that those corpora¬
tions cannot only be assured that

a

without

time

that

at

were

full

knowledge of the subject,
criticising it in general, and he
said it might be wise to go a little

slow

and

its

results

until

about it. It
honest opinion that when

my

the banks

of what

they

will

wholeheartedly for

the

profits that they earned, but they
that

further

the

have

will

assurance

additional investment
there they will be
withdraw when desired."

any

that they place
able

to

"In other words,

Acheson:

t-:Mr.

both the Bank and

;

the Fund are

looking to the future. They are
not picking up sand's-trying' • th
liquidate old debts. They are try-

^crease the flow of busi¬

*ing to

in¬
crease that flow and as there is
more trade and more prosperity,
then the chances of paying off old
debts increase.
But the thing to
ness

in the future, and as you

is

do

keep

to

eye

your

future and not on the

the

on

past."

The

corresponding to their finan¬
cial importance, their commercial

capacity, and their foreign trade.
also spoke of the inadequacy
of credits planned for reconstruc¬

He

of

more

no

ques¬

that,

business and

more

jobs."

Export-Import Bank Enlargement
"Some of the Con¬

Mr. Granik:

these goods, there is no
point to having an International
Bank with a lot of countries de¬

ciding
when
we
loan dollars.
Why not enlarge the Export-Im¬

Bank

that it can make

so

and de¬

reconstruction

for

ourselves?"

velopment and run it

"I think we should.

Dr. White:

the ExportImport Bank because it performs

We

should

enlarge

have bonds in

a

{.A

Some

back to Mr. Brown.

come

fall

of the Fund and
the Bank has come from bankers.

on

the American

of the criticism

Some

are

may

wondering whether they

be

banker

take .business

or

Would that be the

In the

"How about your

"!• Mr. Brown: "Well, I am certain¬

ly in favor of it, and I think that
anything which increases the vol¬
ume
of our export
business is
bound to increase the profits of

through banks, but a higher

prosperity

more

more

Mr.

more

this

in

level

country

loans for the

banks,

deposits, more transactions,
business, and more profit."
Acheson: "I was

just going

said,
that of course he is much closer
to business men than we are in the
to

add

State

starting

on

Stock

Exchange Warns

Unverified Rumors

388.)

Coca-Cola, and Piper
and preferred

Panama
Aircraft

common

offer attractive situations,

accord¬

ing to memoranda just issued by
Hoit, Rose & Troster, 74 Trinity
Place, New York City.
these interesting
had upon

Copies of

circulars may be

request from Hoit, Rose

calling the attention of
of the New York

bers

mem¬

Stock

Ex¬

to

what

Mr.

Department,

Brown

but we

people coming in all the time




have

who

Good

Kelley
Co.
attractive situations, accord¬

Diamond Alkali Co. and
offer

Lime

and

Transport

ing to detailed memoranda
by Wm.

J.

issued

Mericka & Co., Inc.,

Union Commerce Building,

Cleve¬

studies may be
upon

by

firms to the public.

our

that the well-established

means

facts, as the basis upon which se¬
curity values should be judged,
must always be kept in mind as
the fessence of Exchange policy.
know, we have rules
prohibit
members
and
firms from giving cur¬

you

in any manner, to rumors
sensational character. These

rency,

of

a

member

circulation

of

number of unverified

President

Chairman

and

that

of

the

A.

"we

that

and

rumors

Emil

John

Governors

unusual

an

Schram
Coleman

not

are

of

Board

appre¬

members, mem¬

our

also

require members and
firms,
and
partners
thereof, to report to the Exchange
any information which comes to
their notice as to the circulation
such

of

Apart from all

rumors.

rules, however, enlightened
interest dictates

an

alert

request.

Bank, and amounted to $20,000,000 to $30,000,000 when the For¬
eign Funds Control Division of
the Treasury stepped in.
'

of

responsibility in meeting such a

consciously permit their facilities

situation

be

to

in

used

such

a

way

as

to

to

principles expressed in the
Exchange's own rules, as well as

are

drawing

now

is

Governors

insofar
as
it
lies
in the Securities Laws, which," within its power, to protect the
they state, "are opposed todhe use reputation of the Stock Exchange
and
to
preserve
the
progress
of
manipulative, ■ deceptive
or
other fraudulent devices for the which already has been made in
purpose
of influencing unfairly the improvement of its public po¬
the market price of any security." sition. It is upon this ground that
The heads of the Exchange point we are writing to you. We know
out that "the danger, which we that, as in all matters affecting the
fear most is that such abuse may welfare of the Exchange, we may,
made

be

The

possible,
unwittingly.
preventive is ceaseless vig¬
This

ilance.

that

means

must be the most careful

and

allied

members

of

usual, count upon your fullest

as

cooperation."

scrutiny

the

Ex¬

have

"There

of the circulation of an

recently

number

unusual

and

rumors

indications

been

unverified

of

reports.

Whether

is to excite spec¬
ulative interest in, or to influence

prices

presents

a

certain

of

securities,
This

problem with which the

Exchange is seriously concerned.
"Although reports and rumors
of this character apparently orig¬
inate from sources over which the

Exchange

has

no

authority,

the

fact remains that they are disturb¬

could have far-reaching
consequences, so far as the Ex¬
change is concerned. It is appar¬
ent already that, largely as a re¬
and

known

Aug.

on

shipment

Argentina of
owned by the

to

gold

$2,000,000

South American nation,

ternational

:,

Washington

from

The In¬

Service, in ad¬

News

on

The

gold

been
from

to have
Argentina

was

to

transferred

New Orleans.

de¬

action

prived Argentina of the free use
of her
own
gold, but officials
out

pointed
not

that this action did

constitute

a

of her

"freeze"

assets, such as has been invoked
against enemy nations.
The Ar¬

gentina gold may still be used for
operations within the U. S.
Noting that the action, under

of

the

Trading

the

With the Enemy Act of 1917, was

community,

as

not engaged in the
securities business but who are
interested in its welfare, have ex¬
as

persons

pressed their concern over these
developments.
"The incitement of speculation
various well-known methods
of enticement belongs to a bygone
by

jurisdiction

unofficially, the New
Tribune" reported

disclosed
York

"Herald

its Washington
16:

the following from
bureau

on

While

the

was

obtained

Department

was no

of

tion

confirmation

definite

action

State

Aug.

from

official,

of
a

as

move.

purpose

of influenc¬

ing unfairly the market

A

price of

United

Buenos
in

Department said that the
freezing of the gold was a Treas¬

the

the

Press

account

from

"Herald

had

Tribune"

the

say:

Minister

Cesar

Ame-

ghino disclosed tonight that Ar¬
gentine gold stocks and foreign

exchange in the United States to¬
taled

1,718,000,000 pesos ($429,500,000). Two hundred and eight¬
million

een

($53,250,000)

pesos

worth of gold was

transferred to

Argentina recently.
Mr. Ameghino said that the Ar¬

still

gentine Government

lacked

official confirmation of the order,
but the action "could not be con¬
as

a

grave

order

of

use

one."

does

,

not; alter

the

our

finds itself
Britain." ;•
The Minister pointed out, how¬
ever, that Argentine funds in Eng¬
land had been frozen by "volun¬
tary agreement."
(Argentina)

with respect to Great

From

the

Buenos

New

the

take

we

York

"Times"

following

from

Aires,. Aug. 18:

"Another

shipment

of

gold

reached the port of Buenos Aires

today. It

was composed of
containing over a
gold, having a reputed
of $1,237,889.
/

noon

11 small barrels

ton

of

value

This presumably will be the last
shipment until the United States
Treasury Department ban is lifted."
In

;
our

reference

was

v

-

issue of Aug. 3, page

515,

made to the recall

by the Argentine Government of
its
Ambassador
to
Washington,
Adrian

Escobar, — that
action
coming several weeks after U. S.

Ambassador Norman Armour and

Kelly ' had
their

David

Ambassador

British

been

called

home

V.

by

respective governments for

consultation.

Visiting Chicago

it involved

Abraham
Strauss

Strauss,

partner

in

Bros., 32 Broadway, New

York

City, has left for Chicago to
of the
National Security Traders Asso¬
ciation.
Mr. Strauss will make

attend the annual meeting

his headquarters
in Chicago at
behind the scenes the firm's newly enlarged offices
lack of any clarification, in the Board of Trade Building.

Forced to go

in

but
has been

newspapers,

Aires, Aug. 16, appearing

following to

Officially, the

State

The principles expressed in ury Department matter, and the
Exchange's own rules, as well Treasury Department had no com¬
in the securities laws, are op¬ ment, saying it was a State De-

had from the firm I vices for the

pro-Axis

this restriction evidently
evaded.

announcement or explana¬
the

news¬

Argentina,;

there

day.
the

tina's

at

Government's

The

for

Argentine paper supply, also is
under study.
The navicert had
been granted on assurances that
the paper would not go to Argen¬

that

published in the New York
"Journal American," stated:
date

ports, there is a growing pubilc
suspicion that manipulative prac¬
tices are again coming into play.
our

navicert

which would cut off much of the

16 'which

that the United States has halted

sult of the circulation of such re¬

of

print

gold stocks and
foreign exchange," he said.
"It
simply prohibits the exportation
of our gold, placing Argentina in
a
position similar to the one in

Shipment
Of Gold To Argentina
became

Department but remain

of revocation of the British

sidered

II. S. Halls
It

step

Among those considered likely
is cancellation of the Argentine
meat
contract
with the
Allies,
which would cut off a principal
export market for the country's
principal product.,
The question

"The

vices
or

not the purpose

State

free

the

the

that

undisclosed.

there

change:

ing

determined,

said

a

moves

Finance

of

Board

official

economic

attention.

your

"Your

violate

we

as

One

probably is

self-

sense

ber firms and their associates will

York
oartment matter since
posed to the use of manipulative,
Copies of these interesting deceptive or other fraudulent de- foreign relations.

land, and 29 Broadway, New
City.

It

"the

.•

Lime and Alkali Look

with the

It means use of the great¬

public.

change to indications recently of

well

Island

peated by those who represent our

rules

Members

& Troster.

reports of
not be re¬

must

firms in their relations

member

the

Attractive Situations
?

character

principle of truthful disclosure of

the effect is often the same.

page

the New Orleans Federal Reserve

the

act of the

al¬

though there will be more of that
than before and more of it handled

means

agreements,
Bretton
Woods
Conference, appeared in
the "Chronicle" of July 27, 1944,

war-time

sued

Bank

It isn't so much the mere

-handling of foreign exchange,

jof

the

the final

also

away.

bank?"

.banks."

both

first place, I want to

Granik:

Mr.
own

texts
Monetary Fund „and

International

case?"

negative the idea that all bankers
are opposed to the Fund and the
Bank.
A great many bankers are
in favor of both."
,

of

taxpayer."

Note—Official

(Editor's

"I don't think so at

Mr. Brown:

all.

and
the

because the Fund
compete with

would

Bank

Bank is to

this

long-term
investment,
and what is more important, to do
so without having the entire risk

means

under

regulations. ' The
withdrawals were made through

est discretion in the literature is¬

provide

'T would like to

Mr-; Granik:

•

of

function

The

'

Banker Criticism

/

the nature of the Bank.

derstand

default."

It

control

which will permit France soon to
regain the place which she for¬
merly held in the world."

necessary

very

unsubstantiated

allowed

funds

forerunner of other
against Argen¬
tina which had been hinted at by

function in fi¬ and supervision of orders flowing
Dr. White:
"Yes, none of the nancing exporters and other cer¬ through the offices of our mem¬
tain
projects
on
a
short-time bers and member firms."
resources. of either the Fund - or
the Bank are going to be used to basis, but the people who make
The following are the advices
bail
out bondholders who may that criticism completely misun¬ _add_ressed on Aug. 17 to members
•

scrutiny and

supervision
of
orders
flowing
through the offices of our mem¬

mum

any

hensive

buy

careful

the most

be

that there must

means

conclusion,
Mr.
Mendestold of complete under¬
standing among the delegates of
the United States, Great Britain,
and the USSR, "an understanding

that since
the United
States is going to be the principal
country in a position to furnish
the goods for reconstruction in the
early post-war years, and since
this means that the United States
dollar will have to be furnished

loans

This

lance.

begun at the rate of approximate¬
ly $2,000,000 a month—the maxi¬

In

stated

port

possible, unwittingly.
preventive is ceaseless vigi¬

France

gressional critics of the Bank have
argued

Treasury.
determined,

follows:

as

that

reports,"

to

made

bers and member firms.

tion of the devastated countries.

In

Abroad,

they will be able to withdraw

be

ties

"As

because basically
both the Fund and the Bank mean

tion

fear most is; that such abuse may

not allotted financial

which

White: "There is

Dr.

and especially France, were
responsibili¬

rope,

full import

be

the situation is

,

*

it."

Control Division of the
As nearly as could be

^Argentina, seeking to improve
Republic, emphasized the place of France in the two financial its dollar-exchange credits at the
bodies established by the United Nations Monetary and Financial high United
States gold-buying'
Conference at Bretton Woods; a permanent seat on the International
rate, had deposited well over $30,Monetary Stabilization Fund ancl3>
000,000 in gold with the Federal
in the International Bank for Re¬ any security.
V',;.- '-/.Mr';
Reserve. Several months ago, ac¬
"We are not apprehensive that
construction and Development.
cording to one official, Argentina
In a press conference following our members, member firms and evidently
"began to smell a rat"
his return to Algiers, Mr. Mendes- their associates will: consciously in, relations with the United States,
France, who headed the French permit their facilities to be used and undertook to
begin with¬
delegation to the Conference, de¬ in such a way as to violate these drawal of the gold.
clared that, in his opinion, Eu¬ principles. The danger which we
At this point, withdrawals were

did at Bretton Woods

we

that the

French

investment houses

and

of this country get the

learned

step was initiated by the State
Department, although it was car¬
ried out by the Foreign Funds

On Bretton Woods Conference

we

know something more

Reports

Predicting rapid recovery of financial security and stability for
France as soon as liberation is accomplished, Pierre Mendes-France,
Commissioner of Finance for the Provisional Government of the

the criticism of the Con¬

on

ference

change control on the
of profits

writer

financial

Herald-Tribune

is

"I don't know how

White:

Dr.

.

ago at Bretton Woods in
Hampshire, the New York

New

Senator

„•

Senator Tobey:, "As a matter of

country which

known of a

l

I

correspondents

Freneii Commissioner Of Finance

of

answers."

803

r
Thursday, August 24, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

804

"It is

NOTICES

DIVIDEND

Exchange
Criticized By

CHEMICALS

when he denied a motion by the

suit

Exchange to dismiss a damage

CORPORATION OF AMERICA

$354,540 brought by John W.

for

;

.

The'regular quarterly dividend for
the current quarter of $1.18^ per

payable October 1, 1944 to

holders of record at the close of busi¬
ness

i

7

September 14, 1944.
PREFERRED STOCK

% SECOND

The
the

regular quarterly dividend for

of $1.75
payable October 1, 1944 to
current

record

quarter

per

tember 14,

damages

share,

$50,000

holders of

the close of business

at

liveli¬

$4,450 for loss of means of

Sep¬

1944. >.;

Justice also denied

The

COMMON STOCK

tion

A dividend payable on September 30,
1944 in Common Stock of the Corpo¬
ration at the rate of one (1) share for

business

for loss of reputation,
for mental anguish and

hood.

Mr. Jones for

by

a

mo¬

summary

of" Common

and ruled that; any
abridgement of the broker's rights

the close of

each seventy (70) shares
Stock held of record at

should be determined upon by a

September 14, 1944.

,

,

operated by local housing
authorities in 23 localities in these
the
projects ;' originally
planned for peace-time lowhousing.
When the war

States,

Jones,; former member of Avery
rent
& Co.
Reporting the ruling of
Justice
Botein, the New York emergency arose, Congress au¬
thorized development of the proj¬
"Times" of Aug. 17, stated:
r
ects "for persons engaged in na¬
In
his
complaint Mr. Jones
tional defense activities." Federal
charged
"wrongful suspension" loans covered all the cost of such
and said that on March 3, 1942,
housing.
he had been suspended for six
In the post-war period these
months by the Exchange for al¬
projects will be refinanced un¬
leged improper execution of a
der
provisions of the United
customer's order for Quaker Oats
States Housing Act which au¬
common stock.
He asked $300,000

THE Boardthe'followinghas this day
of Directors dividends;
declared
$4.75 SERIES

f

Now

.

'

now

ing Officials.

were

Now York It, N. Y.

FIRST PREFERRED STOCK

8,300

houses

L

Justice Bernard Botein on Aug. 18

CELANESE

than

More

nanced

Justice Botein

PLASTICS

share,

State

Federally fi
occupied by
war workers in 44 public housing
projects in New York, New Jersey
and
Pennsylvania will be con¬ year ended June 30, 1944, and the
'; Criticism
of the action of the
verted to low-rent housing and previous six years, the Tennessee
New York Curb Exchange in sus¬
notes as
slum clearance purposes after the Taxpayers Association
follows:
.".'-V
pending a member without giving
war, according to information to
him a right to cross-examine wit¬
Thus, the State has strengththe National Association of Hous¬
nesses, came from Supreme Court
ended its financial position dur¬

TEXTILES

I to Madison Arena#,

vital, therefore, that every
now, during war¬
time, to assure the post-war sol¬
balance on the foregoing date was
vency of its unemployment fund,
$9,771,075.
.
^
: to improve the genefit protection '
Commenting on the results of its law affordsto unemployed
the State's fiscal record during the
workers, and to take any other "

Municipal News & Notes

NY Curb

judgment

;•

alleged

complaint Mr. Jones

his

In

affidavits.

trial and not upon

JOHN A. LARKIN,
V'v-'
rice-Pres. & Secy.

Federal

the

thorizes

Public

lend local
authorities up to 90% of the to¬
tal development cost of lowrent
housing.
The
balance
necessary will be raised by local
authorities through the sale of
their own bonds, which will be
secured by future rents plus
annual
contributions
by
the
Federal Government.
Housing Authority to

contributions^ or

annual

These

ing the fiscal year by about $7,-

in surpluses produced,

266,000,
( and

$18,169,000

year's reduction in debt, a total

$61,800,000.

about

equals

years

such

found

bond

necessary

issues
from

-

are

as
year

to-

at very substantial reduc¬
tions in interest costs. The re¬
year

duced costs

due in part to ai

are

nationwide improvement in the
bond

market,

ened

periods

maturities

which

the

bonds

over

are

serial

of

but fundamentally due
splendid fiscal controls

spread,
the

to

part to short¬

in

1937 and main¬

inaugurated in

tained in succeeding years.

Michigan School Bonds

under¬

BOAT

ELECTRIC

The

■'clared

judges had predetermined

decision

■

their

plaintiff

the

find

to

guilty."

of Directors has this dav d->dividend of twenty-five cents per

who acted

Board
a

payable September
record
1944,

29

prohibition contained in the con¬

as

New York 5, N. Y.
Stock of the Company,

share on the Capital
of

off the investment and the

tain of the Governors

★

COMPANY

★

33 Pine Street,

to pay

>":\

be mailed

will

Reviewing the ouster proceed¬

11, 1944 to stockholders
close of business August

'

•

Checks

the

at

Co.,
16 Wall St.,
Transfer Agent.

Mr.

Justice

Jones,

Botein noted that "the sessions or

Y.,

N.

15,

against

ings

Vt. %: ; \ :• ■'<
.
i\;;
by Bankers Trust

York

New

,

hearings before the Committee on

'}
H. O. SMITH, Treasurer
'August 17, 1944.

strictly

Transactions, was

Stock

investigative in nature and con-

HARVESTER

INTERNATIONAL

titled,

COMPANY
International Harvester Com¬

The Directors of

declared a quarterly dividend of sixty-five
<65c) per share on the common stock
payable October 16, 1944, to all holders of record
at the close of business on September 20, 1944.
pany
cents

SANFORD

,

•.

475
A

been

Huh

Avenue, New

of

divided

'

.

torit i,,

...

books

Thb stock transfer
Company will not be closed.
1944.

HERVEY

J.

the

of

the

S;;

share

speak,

August 26, 1944.

i:".:

such

upon

testimony

considered in the light of

constitutional

provision

per¬

those witnesses who were

plaintiff

declared a dividend
on the Common Stock pay¬
8, 1944, to holders of record

of

the

cross-examine

opportunity

to

the witnesses who

furnished

■

which

his

the

testimony

suspension

was

upon

predi-

120

Broadway,

New York 5, N.

Speculative Appeal

Y.

August 18, 1944. ;;

S.
A

cash

distribution of

twenty-five cents

(25c)

special cash distribution of twentya share have today been declared
by Kenntcott Copper Corporation, payable on
September SO, 1944 to stockholders of record at
the close of business on September 1, 1944.
•v
;vA, S. CHEROUNY, Secretary. -■

ft

share and

general 4s of 1975 offer

a

five cents (25c)

•

OFFICE
POWER

The

"MOP"

board

COMPANY

directors

Northern

situation

issued

by

McLaughlin,
Wall St.; New

York

City, members of the New

York

Stock Exchange.

States

Company (Wisconsin), at a meeting he'd
August 15, 1944, declared a dividend of one
and one-quarter per cent (\\\%) per share on
the Preferred Stock of the Company, payable by
jchcck
September
1,
1944,
to stockholders
of
record
as
of the clci° of business
19,

Power

Copies of

•on

1944, for the quarter ending August 31, 1944.
N. H. BUCKSTAFF, Treasurer.

SOUTHERN PACIFIC COMPANY
DIVIDEND

NO.

QUARTERLY DIVIDEND of Fifty On's
($0.50) per share on the Common Stock of this
Company has been declared payable at the
Treasurer's Office, No. 165 Broadway, New York
6, N. Y., on Monday, September 18, 1944, to
stockholders of record at three o'clock P. M.,

Monday,

August

books will not
this dividend.

28,
be

1944.
closed

The
for

on

stock transfer
payment of

the

J. A. SIMPSON. Treasurer.

;
New

York, N.

Y.,

August

17,

1944.

The United States Housing

has

been

Act re¬

to

-

drasti¬

cally curb the incurrence of debt
and consequently hasten liquida¬
tion of outstanding obligations.
fact
from

This is vividly seen in the
that during the ten years
1932

outstanding

bonds
from

$66 866 000,

a

of

amount

the

1942

to

was

$188,465,000
to
dollar decline of

and a percentage
64.5%.
While figures

$121,599,000
of

slash

quires the elimination of one sub¬
standard dwelling for every home

for

part of the slum clearance
•md low-rent housing program.

available, they will show that a
further
substantial
retirement

as

Tennessee's Gross Debt Cut

debt of the State of Tennessee on

1944, was $88,756,394.06,
figure reflecting a gross re¬

duction

in

$52,224,967.89

of

the

1937-1944, it is shown
of the State's fiscal
record during the fiscal period
ended June 30, last.
The data,
compiled by the Tennessee Tax¬
payers Association
of Nashville,
seven

in

a

years

summary

discloses

a

series of highly favor¬

in the State's

developments

record during

fiscal and "financial

the period iUnder

review.
a

reduction of

the

State's total

include

in

$18,169,000

bonded and county highway re¬
imbursement
crease

debt,

also

has

it

June 30,
this

1943

been

eompletely

not

are

it

effected,

is

said.

Moreover, the survey points out,

The total of direct and indirect

an

in¬

(without increased taxes)

the

total

ended June 30,

1943.

respective

for

the

$55,563,060.58

period

fiscal

the

for

The totals

fiscal

trend toward

is felt that the

districts

school

until

continue

will

reduction

debt

the

in

published

was

issue of the "Michigan

As

to

of

the

which,

this circular may be had from the

tion

firm upon request.

a

lation

and

policy

of the debt reduc¬

inaugurated

maintained

in

in

1937

succeeding

there has been a conse¬
quent diminution in the State's in¬
terest requirements bv an average
per year of $2,000,000, the Asso¬

years,

;

>

general fund and high¬
way
fund produced substantial
surpluses during the year ended
June 30, 1944, the amount in the
case of the former being $3,428,076.45, while for the highway fund
the
figure
was
$3,838,130.35.
Both the

its

between

national

for co-*

law

and

any

for veterans'
demobilization
allowances,
and
should
provide such . legislative
authorization as may be indicated
to

program

full and

permit

proper

cooperation in .relation to
ans' payments.
/ )
Greatest of the problems

amendment

optional in the case of Home
cities, school districts can fi¬
nance
permanent improvements
only through the medium of bonds
maturing in one to five years and

State
veter¬

which-

ending of the war, the report said,
involves

dislocation

wartime

the

of

populations, especially from:
rural to great war industry areas,'
demobilization

the

and

turn of

and

re¬

10,000,000 or more service¬

to their homes and commun¬

men

ities.

Johnson City, Tenn.
Has

$228,000

Accumulated
Five

Surplus
operating under
City Manager

of

years

and

-

form of government

has produced

highly significant results in
+he financial picture of Johnson
City, Tennessee's fifth city, ac¬

some

.

cording to
cently

comparative study

a

issued

the

by

re-

Tennessee

Taxoayers Association, Nashville.
the

Not

of

least

the

accom-:,

payable from a limited tax for the
pJishments cited in the studv is f
same
period. However, both the
i the fact that the municipality
bond issue and the extra tax for
had

debt service must be voted by the

Now For

of

stalled

on

surplus

on

of $288,368.48, of:

$225,000
War

form

Unemployment

was

Bonds.

invested in
The

government

present
was'

in¬

July l, 1939, and since

that time the city's bonded debt

Council
a

S.

U.

accumulated

30. 1944

which
•

Prepare

Problems

ments in

an

June

qualified electorate.

States Warned To

report on State unem¬

ployment and compensation prob¬
lems recommended several courses

been

has

Govern¬

State

of

July

on
I

•

468.08

on

-During

of action the States should follow

old

lowered

1.

1944,

to

$2 863.398

from

r

$3,187,-

July 1, 1938.

the

fiscal'year

ended

June

in

post-war
problems in store for State un¬
employment compensation agen¬
preparing

to

meet

cies.

When the
cies

:

will

war

have

ends State agen¬

to

far

handle

30, 1938, the last under the
the As¬
sociation reports, the city operated
at a deficit of $107.214 46.
This
contrasts with a surplus of $72,form of government,

563.35
fiscal

achieved

during the fifth

period under Council-Man¬

greater numbers of benefit claims ager regime. In the ten years prior"
and payment^ ttian they ever ex¬
to July L 1939, the city created
perienced irlT the past, according yearly deficits aggregating $1,134,-'
to the report.>which warned that 359. as against a surplus of over:
in the immediate post-war period $228,000 accumulated in the first
Coupled with surpluses achieved State unemployment compensation five years under existing mode of :
in the previous six months, the programs will be put to a severe government. In 1937-1938 interest
accumulated
eral fund

on

surplus in the gen¬
.Tune

30

last aggre-

test

"as to the

reserves,

adequacv of their

the adequacv of the ben¬

efit protection thev

g*W $8,917,827.64, and for the
afford, and the
-highway fund the overall figure ffec.tiveness of their administra¬
is £$10,421,442. The sinking fund tion."
miil

•
J.W''

F-flr-jr

.u

-

State, unemployment compensa¬
tion agencies will face with the

incidentally,

Rule

The

result

needed

operation; (6) each State should
carefully consider the proper re¬

is

679.72.

As

authorization

tive

the Council

result

a

.

Aug. 12
Investor"

of Detroit.

referred

trative

Michi¬

in

have retired all of their
outstanding
unlimited
tax
bonds. The survey in question
gan

years

and $53,105,-

ade¬

tory

of $2,457,380.86 in revenues over

|. TEXAS GULF SULPHUR COMPANY




the

amendment

prior to

exempt from

reduced

i The Board of Directors has declared a diviid«?4 of 50 cents per share on the Comoanv't
capital stock, payable September 15.
1944, 'tc
Stockholders of record at the close of business
September 1. 1944.
H. F. J.-KNOBLOCH, Treasurer.
,

limitation,

that date
the 15-mill tax
effect
of
the

is

school

for the demolition or repair
than 8,300 sub-standard
dwelling in this one area alone.
more

ciation reports.

107

A

incurred

debt

of

are

STATES
(WISCONSIN)
of

ties, according to a circular on the

Baird & Reuss, One

NORTHERN

OF

of

interesting speculative potentiali¬

amendment of Nov.

stitutional

way

These

KENNECOTT COPPER CORPORATION

lying

.

projects to
will pave the

the

of

housing

low-rent

able

ROGER HACKNEY. Treasurer

governments.

Conversion

committee,

investgating

and thereafter resting the case* so
to

local

the

built

produced, effectually deprives the

DEND

The Board of Directors
able September

be

wit¬

the sub¬
sidy necessary to insure low rents
is paid by the Federal Govern¬
ment in cash and part by the local
community in the form of tax ex¬
emptions on the completed hous¬
ing projects. This exemption, how¬
ever, is partially offset by the pay¬
ment of fees by the project to
afford to pay. Part of

can

trial, the testimony heard $52,000,000 Since 1937

ine only

*

of 59c per

to

or

cross-examine

mitting the accused to cross-exam¬

Johns-Manville
n

right,' to

1

the

by

when

OSBORN, Secretary.

Corporatio

sessions

such

to

en¬

However, the Justice said, "the

the

DIV

matter of

nesses."

at

*.

pany, payable October 2, 1944, to stockholders
of record at the close of business on September

15,

of

a

not

practice of reading to the Board,

CENTS a* share has
-♦to1- n*
n—»-

FIFTY

deC'»«,t"i

notice

present

•

COMPANY

SALT

INTERNATIONAL

as

WHITE

B.

Secretary

•.

cededly the. plaintiff was

which low-income families

rents

their

determine

to

with a view to making suchimprovements as are found to be
desirable and practicable; (4) each

quacy,

pensation through interstate cooperation, providing any legisla¬

setting

factors

the

tunity to cross-examine witnesses
conducted and charged that "cer¬

law

its

State

8,

survey

prepared

forth

the investment quality of
Michigan school district bonds.
Among the factors cited is the

subsidies, the association reports,

.

should, make
careful estimates of its probable
post-war unemployment
benefit
payments/ and of the solvency
prospects of its
unemployment
fund; (2) where a State fund is in
danger of post-war insolvency, in¬
steps should be taken to build
more
adequate reserves, through
legislation requiring higher war¬
time contribution rates, primarily
from its war-expanded employees;
(3) each State should review the
coverage and benefit provisions of
Each

1932, against the further issuance
of unlimited tax bonds. Although

a

various

have

bridge the gap between the rents
that normally would be charged

the oppor¬

that he did not have

'

•.

soon
may
confront State
unemployment compensation

provisions and its adminis¬
procedures, with a view
to assuring maximum speed and
efficiency in paying benefits un¬
der the peak-load conditions of
the
post-war period;
(5)
each
State should participate fully in
olans to solve interstate problems
in the field of unemployment com¬

Miller, Kenower & Co., Detroit,

when -the hearing against him was

August 17, 1944.

(V To meet the post-war problems
which

State should reexamine its statu¬

Merits Discussed

Investment

load of post-war benefit
payments," the report said:

(1)

is sell¬

State of Tennessee

ing

trative

recommended lines:

strengthening of $25,435,000. The
strengthening for the last seven
The

steps which may be necessary to
handle the tretnendoum adminis¬

agencies, the report said the States
should
act
along the following
6' - '• v--;

by:: the

more

prepare

.

W-v

i,

requirements on the city's bonded
debt amounted to $170,350.
This
compares

with the 1944^1945 out¬

lay of $121,329, a slash in annual
charges of $49,021.

/

Volume

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

160

dutiable

Trade Agreements Ne Basis For Solution Of;
International Economic Problems: Coulter
V

34.3%,

Reciprocal trade .agreements, initiated ten years ago in June,
a complete failure and offer "no basis for solution of our

items

had been

(Continued from

tems of income

few

declared, but revenue

such

other

■—

.

■

of Recip¬

equal

to,

rocal

Trade Agreements to pro¬
good will or prevent aggres¬
sion and devastating wars.

other

year

mote

which data

failure

the

"(2) In the matter of foreign
trade, the goal was to promote
exports — so as to increase op¬
portunities for greater industrial
employment at home.
This too
failed. The physical volume of ex¬

ports during the five-year period
(1935-1939) before interruption by

only 80% of the
volume of exports during the pre¬
ceding prosperity period, — 19251929. Dollar value of exports dur¬
ing 1935-1939 was only 60% of the
averaged

war

volume in 1925-1929.

"Furthermore, much of the ex¬
ports during 1935-1939 were war
materials—such as scrap iron and
..

steel

and

other

metals,

gasoline

The Price

greater than, any
in our history for
are available, includ¬

or

ing the boom year 1929.
"(4) Perhaps even more
nificant is the fact that
reductions
sand

on

more

our

than

a

sig¬
tariff
thou¬

items lost the na¬
tional government an average of
over
$200,000,000 a year in rev¬
enue
comparing the two fiveimport

,....

1.

2.

ports remained the same. IV,
"In 1930 the ratio of duties

Stock

York

Range

on over

Over-the-counter

quotations

of New York

securities

In

no

collected.

revenue

"Less than
national

10%

revenue

of

is nearly 25%

the

on

recent bond issues and

banks and trust companies, in¬

other financial medium will you

Agencies,

of their total

array of "Corporation and Investment News" on
Utilities, Railroads, Industrials, Insurance, etc.
as
appears
regularly in the Monday Issue of The
CHRONICLE or such complete coverage of Municipal

News, Banking and other vital business statistics.

business,
annum
<

V

by its informative value to you and to your

Measured

you

will find the subscription rate of $26.00 per
104 semi-weekly issues (averaging over

for the

5,000 pages yearly) to be the most economical financial
service obtainable.
„

subscription price includes without further
charge the Final Edition of Thursday's news and
editorial issue consisting of two sections.
Because of
the shortage of paper only a limited number of addi¬
tional subscriptions can be accepted so to avoid disap¬
The $26.00

pointment enter your order now.

not

have

and

not

their

sacrifice

i

col-

they

help us to build
market, although
pleased to see us open

are

American market to their

our

a

ably low
ards."

:

■

■

New York "Sun"

Beobachter"

scher

Fascist

today

agency,

y

this

as

.

Hold it.

*

.

*

*

is

element
this

will

be

instance

about

59.

as

level.

will

setback

at 55.
sfs

>

J|C

*

Currently, the Dow level is
about

they

On

great in probably get to where you
the
price bought it. Hold on with stop

as

From

149.

the

way

such

minor

a

reaction

en¬

*

Living

of

costs

wage

*

Bethlehem Steel

never

got

to the 59-60 range.
If it does
within the next few days it

acting, I believe they
will react down to approxi¬
should
mately 147 or so before they :'~y •' *y :
start turning up again.
With
are

be

bought.

;v'

*

Stop is 57.
•

*

Crown; Zellerbach,

about "193/4,

is

„;v

n o w

still

recom¬

mended if available between
18 and 18!/2.

Stop IIV2.

Also

*

*

advise

•

v

v

Allied 'Mills

between 29V2 and

30V2, with

stop at 28.

:

.

earners

and lower-salaried clerical work¬

from June

rose

to

July in all

industrial cities

but six

of the 63

that

regularly surveyed by the

are

National

Industrial

Conference

published what they described as
the Italian
armistice'conditions

Board, the Conference Board

signed by Marshal Pietro Badog¬
lio on Sept. 3, 1943.
They
represented
that
the
agreement gave to France regions
along the west Italian border and
the island of Elba, to Britain the
island
of Pantelleria, to Yugo¬

Expect market to pick up
again after the 147 is reached
and

next

on

rally will

believe

move

carry

to about 151-

from the Board added:

slavia Istria,

Fiume and Zara, and
Islands.

to Greece the Dodecanese

It

further

was

alleged

the

that

ported

send 2,000,000

workers to contrib¬

ute to the reconstruction of

Allied

to
the

including y 800,000

countries,
and

each to
South Africa, Aus¬

200,000

United States,

sin.

War

Department

member

C.

an¬

a

as

War Department

the

of

Adjustment
Board.
Col.
Martens, who entered the Army
Price

as

Major in

a

March, 1943, was

assigned to the office of the Un¬
der Secretary in the Renegotia¬
tion Division of the Army Service
He

was

for many years

Vice-President

the

the

of

Per-1

Products " Corporation,

a

subsidiary,

&'Johnson

were

which

slight in the cit¬
are reported,

being

largest

those of the author only.]

only

0.4%

in

"For

United

the

States

whole, the cost of living

as

a

0.6% from June

July.
July,

LAMBORN & CO.

on a war¬

and July,

1943

99 WALL

cities, and remained unchanged in
one
city.
Increases
over
the
twelve months' period were led

rise of 3.8%,
closely by
Trenton, N. J., with a rise of 3.6%.
Other cities where living costs
rose
more
than 3% during the
by

Toledo,

but this

with

was

a

SUGAR
Exports—Imports—Futures

followed

Indianapolis, Bridge¬
Evansville, Indiana, Port¬
land. Oregon, and Sacramento.
"The
largest
decline
during
the year
was
in Newark, and
amounted to
1.7%, while other
declines ranged from 0.1% in Buf¬
year

DIgby 4-2727

situation

in

New

possibil¬

memorandum

Wall

by

Vilas

&

Hickey,

49

Street, New York City, mem¬

*.—

change.

Copies of this memoran¬

dum

may

upon

request.

be had from the

firm

1

,

were

port,

falo to 1.1% in Duluth.
no

Rail Situation Interesting
current

STREET

NEW YORK 5, N. Y.

There

Established

change in Parkersburg, W. Va.

Public National Attractive
Stock
Bank

&

of

the

Trust

Public

Co.

of

National

New

York

1856

H. Hentz & Co.

was
:

1. Membert

New

Stock

Exchange

Curb

Exchange

Cotton

Exchange

York
York
York

New

The

<•

they

Spokane.

"Between

has

Martens

for

ies

1944, the cost of living rose in 56
of the -33 cities, declined in six

appointment of Lieut.

William

Col.

152.

•

''Declines

WSif.v!'

Price%
Adjustment Board
The

re¬

The advices

.

to

iiO

nounced the

17.

Aug.

time budget rose

tralian, Brazil and Britalnrf*

on

"The largest increase, one of
More next Thursday.
2.2%, occurred in Trenton, N. J.;
y *
*
* t
'•
•,
and increases ranging from 1.0%
—Walter Whyte
to
1.5%
occurred
in
Lansing,
[The views expressed in this
Michigan; Houston, Texas; Mus¬
kegon,
Michigan;
Huntington, article do not necessarily at any
West Virginia; Duluth, Minnesota; time coincide with those of the
Pittsburgh, and Wausau, Wiscon¬ Chronicle.
They are presented as

economic clauses required Italy to

bers of the New York Stock Ex¬




half chase price:

a

.

I don't believe that the time

ers

VoelkiStefani.

and

news

Haven offers interesting

...

^

.

Lockheed, bought at 17
being writ¬ (stop 15) is about 1734. Stock
ten, the market is again be¬ hasn't moved
very much, so
ginning to sag and, despite its reaction will probably be
the
widespread bullishness, limited to about 16^ to 17..
plus the good news from the Hold this one, too.
But

we

following ^(Associated

the

issued

By

figure by

V.

yyy

*

Name

City.

point.

living stand¬ visaged it would be pointless
to advise liquidation.
,' '
'
.
Any-

and

wages

,

ities according to a

•

the 150

cross

subscription to The CHRONICLE and

___

\.

know what hap¬ Stock is now about 411/£, but
pened.
Stocks did go up and offerings will knock it down
the
averages
managed
to to about your original pur¬

.

full year.

Street Address

at

7- v

•

you are holding
38 Vi
(stop 35).

New

your

sections for

ex¬

New Brunswick, N. J.

07 w

bill for $26.00. We understand this price en¬
titles us to both Monday's quotations and the Final Edition
of Thursday's paper consisting of two news and editorial
us

Currently,

<

\

*
■

you

$

Johnson

Y.

*

'

"Altogether, facts rapidly com¬

Commercial and Financial Chronicle,

send

*
•>'

*

is¬

not available

were

the last reaction.

on

.

*

which

sues

Bendix

Well,

.

ports.

the

our

and the addition of those

149 to 150.
*

In¬

over.

in

to
export

our

sonal

enter

ages (D-J), then about 145,
would probably go to about

be

perhaps

revenue

merely

up

Department CI,

Please

aver¬

will

stead, I would suggest reten-^
tion of all stocks (with
stops}

*
war
*
*
; y
fronts, stocks seem to be
right in the middle of selling.
U. S. Steel, bought at 58^,
order to please the United States When this
selling will run its managed to cross 60 latter
or
to help us to carry out some
course is a matter of
opinion. part of last week.
Now
new trade philosophy — certainly

"They

cannot

Forces.

25 Spruce St., New York 8, N.

rev¬

twenty billion dollars.

I

Russia

find such an ency¬

clopedic

6.

from tar¬

enue, or five billion dollars, out
of total annual revenue of about

Public
■

normal

our

comes

iffs, whereas the foreign average

the

exchanges.

investing companies, Federal
United States Treasury Bills and Notes.
5.

imports and total

The German newspaper

periods.

and

surance

total

Press) from Berne, Aug. 19:

and sales of bonds

and the other leading U. S. and Canadian
4.

of

take

Weekly high, low, close, sales, and range since Jan. 1st
of stocks and bonds listed on New York Curb Exchange

y

In fact, before
leading nations
(outside of the

imposed by the United States in
terms

look higher but that the

rev¬

United States and U. S. S. R.) had
tariffs about double the average

From the

published in Monday's issue

since January 1st and interest

3.

dominions

784)

Charge BadoglioCeded July Living Costs Up
Italy Land To Allies
j In Industrial Cities

the New York Stock Exchange, also

range

do.

we

the 60

page

only did they

lected to foreign invoice value of

listed on New
Exchange; including last sale price, range

price

duties for

ing to light indicate that our re¬
ciprocal trade agreements offer
little or no basis for solving our
post-war international economic
than in 1929.
problems. On the contrary, great
"That means a loss of revenue harm may result if the American
of from two to three billion dol¬ market is made a dumping ground
lars in a ten-year period .3— even for the products of foreign agri¬
though the physical volume of im¬ culture and labor with incompar¬

.

Weekly

than

war,

and

profits taxes
developed in the
They depend far

customs

not

chances are that Jay
you read this, the

reaction

sys¬

periods, 1925-1929 and 1935In
1939,
customs
duties
collected were
$300,000,000 less

High and Low Range Jan. 1, 1944 to date and for year
1943.

States.

ment that

1939.

Day-to-day high and low prices, sales for the week on all
on

the

have

and

have

we

on

enue

countries

year

of the FINANCIAL CHRONICLE, gives:

stocks listed

more

The truth is that

—

5,500 Securities Each Week
This complete record,

as

United

petroleum
products,
$300,000,000 annually in revenue. food and fiber products and other
v/hich foreign na¬
"Ten years ago," he said, "the farm items
Reciprocal Trade Agreements Act tions were accumulating as stock
was hailed as a measure to pro¬
piles in preparation for possible
vide employment, stimulate ex¬ military conflict. * Indeed, a con¬
ports, create good will, preserve siderable portion of exports of
enduring peace throughout:the farm products was forced under a
world, and solve all the economic system of export subsidies, ordi¬
ills of society.
Objective study narily defined as dumping.
now " discloses
"(3) Imports, on the other hand,
that,
far
from
achieving these aims, the agree¬ were stimulated. It is significant
that the physical volume of im¬
ments resulted in just the oppo¬
ports during the five years 1935site."
£
.
;
1939 was almost exactly the same
Some specific illustrations were
cited, as follows, by Mr. Coulter: as during the prosperity period
"(l).It is only necessary to note 1925-1929. Imports in 1937 were
passing

foreign

way, the
the time

Savs—

made.

Not only has the trade agreements

in

reduction

"(5) What about concessions by
other countries?

figures indicate that it cost the^
country between $200,000,000 and and

Tomorrow's Markets
Walter

which reductions

upon

.post-.war international economic problems," Dr. John Lee Coulter,
economic consultant and former member of the United States Tariff
Commission, said on Aug. 20.

by

reduction of almost 25%,

a

equal to about 40%

or

have been

policy failed to achieve any of its purposes, he

44.7%;

.was

1940 the ratio had been reduced to

on

V

imports

*

805

Commodity
Chicago
New

Orleans
And

Exchange,
Board
Cotton

other

of

Inc.

Trade

Exchange

Exchange$

offers

interesting possibilities for
investment, according to a memo¬
randum issued by C. E. Unterberg
&

Co., <51

City.

Broadway, New

N. Y. Cotton

Exchange Bldg^.

NEW YORK 4,

N. Y.

Copies of this memorandum

outlining the situation
upon

York

request from

berg & Co.

may

be had

C. E. Uuter-

CHICAGO

DETROIT

GENEVA.

PITTSBURGH

SWITZERLAND

Thursday, August 24, 1944

CHRONICLE

THE COMMERCIAL & FINANCIAL

806

The
issues
other
than
Series
C Goodrich Rubber Company.
Notes, 7/s% Certificates and Se¬ paper from which we quote added:
Mr. Collyer said they had been
ries E, F and G Bonds, comprised
60.4% of total sales, in the Fifth acting as advisers to the State De¬
Loan, compared with 47.3% in the partment in discussions among
Fourth Loan.
representatives of the Netherlands,
United
The following table* shows an the
Kingdom
and
the
of

Roosevelt Urges Re-Establishment

NY State Exceeds 5th

Of

Commission To Regulate Soft Coat

Industry

of legislation to again regulate the bituminous
coal industry was urged by President Roosevelt in a letter addressed
by him to Representative John W. Flannagan, Jr. (Dem.-Va.), under
date of Aug. 12, in which the President expressed the belief that
better results would be obtained under a single head within one of
the executive departments, rather than an independent commission.
Early passage

from^

advices

Press

Associated

Washington Aug. 16 reporting

this,

At the

livelihood.
held

same

time, con¬

protected and prices
steady and reasonable

were

sumers

added:

to

a

legislation proposes a
level,
?■ — * -'
'Commission of five members, with
three representing the public, in
"The passage of similar legisla¬
contrast to the former board of tion at an early date is, in my
three
members,
abolished last opinion, important to the welfare
Pending

War Loan Objective
York

New

exceeded

State

it

23.6%,

by

its

objective

Fifth War Loan overall

announced on

was

Aug. 5 by Nevil Ford, State Chair¬
man of the War Finance Commit¬
tee for New

lic

the

final

midnight

at

on

Sales of all issues to all
investors in the

classifications of
State

grand total
country-wide

Insurance

which would
which func¬
tioned under the Guffey Coal Act,
would have the power to regu¬
late the bituminous coal industry,
including authority to fix prices.
Congress abolished the former
Commission a year ago, when a
measure to continue it was killed
in the Ways and Means Commit¬
Commission,

The

be similar to the one

of

28.8%

the

of additional Fifth War Loan se¬

tee.

again threaten if the industry re¬
to
the
old ways of cut¬

turns

itself

will,

de¬
legislation

his letter Mr. Roosevelt

the

that

clared

new

of

the

feel

course,

•harmful results of this instability.
But

of
will also suffer irreparable
thousands

of

hundreds

miners

In

The industry

injury, and consumers will obtain
no lasting benefit.
Sound legisla¬

required or "chaos will again tion, on the other hand, will help
threaten if the industry Teturns to Stabilize the Industry and safe¬
was

old

the

of cut-throat com¬ guard the interests of thousands
In his letter to Repre¬ of producers, hundreds of thou¬
Flannagan, the Presi¬ sands of mine workers and mil¬

ways

petition."
sentative

dent said: ;■

-

"Dear John:
"I

am

has always

been a dif¬

ference of opinion as to whether
Con¬ legislation of this character would

which, if enacted, would re¬
regulation and rules
fair competition for the 'bitumi¬

gress

coal industry.

"As you

sored such

*

better

be administered by an

dependent
executive

in¬

commission or by an
department. Experience

has demonstrated to my own per¬

know, I actively spon¬
legislation which was

that better- re¬

satisfaction

sonal

regard thereto, Mr.
Ford explained that $1,390,000,000
With

within the
cated

or

Including these outand allocations,
State
actually
ac¬

credits

York

New

$7,323,800,000, well
of the
national

for

counted

one-third

over

grand total.
"These figures tell their own
story," Mr. Ford stated. "The im¬
pressive totals form a most elo¬
quent tribute to the self-sacrific4
ing efforts of the more than a half
who

workers

volunteer

million

sold the bonds and to the

patriotic

of the organizations and
individuals who bought them."
Estimating that over 5,000,000
New
Yorkers
purchased bonds

sults have been and will be ob¬
Congress in 1935, tained under a single head within
again in 1937. This legislation one of the executive departments.
now
expired., Under it the
This, however, is a matter upon

Loan, Mr.

the Fifth War

during

In

2Vo bonds 1,929.1
f.

conclusion,
the

that

be

number

actual

"The

•

2xk% bonds 924.3
,

•!-

5,933.8

Mr. Ford said,
people of New
every

reason

to

due to the

impracticability of de¬

termining the number of individ¬
made

This

campaign is

but

their

now

concluded,

determination

not

than

final
victory
is
strikingly evidenced
by
their
continuing purchases
through the payroll savings plan
and otherwise of Series E, F and
G Bonds and Savings Notes, Se¬
until

pause

achieved

ries

is

C, which are always on sale."
our issue of Aug. 3, page 512,
noted that total subscriptions

In
we

Conference In London

of

miners

while

agreeing

tance

of

the impor¬
principle in¬

upon

basic

"In

volved.

E-Bonds, where the greatest
number of transactions occur, the

.

only low wages and poor

known

the

"Sincerely yours,

working conditions were enabled
for the first time to earn a decent

''FRANKLIN D. ROOSEVELT."

Purchasing

Latin America Builds Post-War

amount
invested
was
about $46 in the Fifth Loan as
compared with about $50 in the
previous drive. This lower aver¬
age investment in the campaign
just concluded indicates a wider
dissemination of such bonds."
average

Power, According To Conference Board

Commenting

on

purchases

by

have resulted

11,

large measure
of agreement on the broad out¬
lines of the problems ahead, ac¬
cording to an announcement in
the
matter. The - United
Press
in

a

on

was

"Officials of the three Govern¬

ments, assisted by industrial rep¬
resentatives, met in London Aug.
1 to 9 and made a comprehensive

than

side, as against an

and C Savings Notes

the export

export surplus of $338,200,000

in

a

situation

that

of social unrest throughout

much

indicated

concludes

import

inflation

of

America."

Latin

Conference

The

that

to

the

to have
wave

contributed

by the change from an
surplus of $27,600,000 in
a "cash" export surplus of

appears

current

1938, the last full peacetime year,
S*ays the Board, which states that
the marked reversal in the trade
balance with the United States is

1938 to

of

Board's

Latin

that

study
America's

problem
differs
from
the belligerent countries

$583,900,000 in 1943. Lend-lease since it has a temporary basis. It
;
imports from the United States, states:'
^
consisting
entirely
of military
"The blocked foreign balances
goods, are excluded from the lat¬ Which are largely responsible for
ter balance.
By the end of 1941, the inflation are due primarily to
the study

finds that Latin America the inability to import goods. Such
had accumulated a total of $891,goods
will
of
course
become
000,000 in purchasing power as a available again once the war is
result of wartime trade with the
ended, and the blocked balances
United States alone. :
will
thus presumably be liqui¬
Since
these greatly increased dated almost
automatically, and
sales abroad have not been offset

with

by imports of goods, the influx of
and credit has resulted in

itself."

funds

inflation, it is also pointed out in
the study, that "the wartime rise
in both prices and the note issue
ica has been
Axis

more

definitely less than

Europe, but appreciably

than

them much of

the

circulation

"Between

the

the

first

Board

half

of

says:

1939

in

the

British

Com¬

and

early

100% in Argentina, 95.7% in

1944, wholesale prices

11.4%

in

Mr.

even more

marked increase. These

has been greater; rises between June 30, 1939, and
both absolutely and percentage¬ early 1944 were as follows: Ar¬
wise, than the note issue.
"This gentina, 76.1%; Bolivia, 277.4%;
years

the

Fourth

Ford also

of the

ceeded

War

with
Loan

pointed out that

State's

their

,

62

counties

ex¬

E-Bond

quotas, in¬
cluding three located within New
York

City.

analysis

Loan

War

was

results
a

shown

of

the

Fifth

showed

definite

investment
marketable

term

of joint

in

trend

that
to¬

the longer-

securities,

as

by the fact that purchases

indicate

only
minor rises in the cost of living in
sources

Argentina and Uruguay since the

extend

the

program

economic action which the

United

States

and

the

United

Kingdom have been developing in




Brazil, 133.6%; Chile 166.9%; Co¬

first

half

of

of

Bankers

which

housing

*

the

solve

and

is

nation

the

bad

American

on

Association

Aug. 17 in

of

America,

address be¬

an

conference

rural

on

hous¬

half of the farm popu¬

one

the

of

lived

country

in

houses of "low value" and painted

gloomy picture of rural housing
in many parts of the
country..
Mr. Mahan began his
mortgage career in the farm loan
department of the Mississippi Val¬
conditions

ley Trust Company' in St. LouisJ
referred

to

it

"significant

as

that the lowest values in the South
are

not among

Negroes but among
white farms in North Caro¬

lina, Alabama and Mississippi." H
Better
in

the

vised, because

not be

may

synthetic rubber now

have

will

we

the

so

if they must

easy

return to bleak unlivable

housing.
empha¬
possibilities in
future rural housing and said the'
farm picture—in statistics—shapes
Mr.

sized

Mahan's

the

address

credit

something like this today: To¬
is around
$6,000,000,000 and there are 6,096,-

up

tal farm mortgage debt

000 farms in the United

which

2,363,000

representing
farms.
a

are

nearly

States, of
mortgaged
39% of the,

The mortgaged farms had

value of

$15,873,000,000 and
for

mortgaged

are

47%

around

of

their value.

Turning

to

ments in rural

educators

at

present
develop¬
credit, he told the

the

conference

that

the Federal Government is by far

Land

of

housing must be
absolutely essential
post-war period, he ad-*
as

problem of returning millions of
young men to the farm, and this

"Because the United States pro¬

duction

rural

recognized

field.

the

most

important factor in the

He

said

Banks

that

the

Federal

originally or¬
ganized to supply adequate credit"
were

nearly equals the'entire world ex¬ facilities to those areas which
port of natural rubber in pre-war didn't have it but that in realty

America is in a different
with respect to rubber
any it has
ever occupied.
is of particular interest to the

years,

position
from
This

and

the

Dutch,

pre-war

producers of much of the world's
supply."
In the New York "Times" of
Aug.

14

it

was

stated that the
American rub¬

heads of two large
ber

on

they did in the!

sections.

"The Government is

tically

in

control

now

of

loan credit and there is

prac¬

farm

our

thought:
on its part of withdrawing,"
Mr.'
Mahan said.
"It lowered interest;
rates

to

the

point

no

that

it

drove-

private capital from the field."

attending the discussions
passengers

who

ar¬

rived at La Guardia Field aboard

Attractive Situations

Aug. 13.

Standard
Mansfield

Stoker
Tire

&

Airways clipper

ferred

and

They were, said the

esting

possibilities

Pan American

on

the good areas as
poorer

rubber, were among the eight

transatlantic

a

these banks grew about as fast in

companies,; who had been in

1939, but show the "Times," Paul W. Litchfield of
increases
elsewhere; Akron, Ohio, Chairman of the
of the relatively restricted owner¬ lombia, 124.7%; Ecuador, 257.7%; following
Bolivia, 213%; Brazil. 28%; Chile, board of the Goodyear - Rubber
ship of such deposits, that the in¬ Peru, 209.8%; Uruguay, 42.9%;
97.(5%;
Colombia, 37.1%,—Peru,
creased
funds
and
purchasing Venezuela, 111.3% (from Dec. 31, 57%; Costa Rica, 61%; Cuba, 70%; Company, and John L. Collyer of
power from the wartime export 1939); Costa Rica, 196.0%; Cuba, and Mexico, 88% ."
Akron, President of the B. F.

suggests," the Board says, "in view

state

preparation for post-war economic
problems.

London

Haiti,
191.3%; Mexico,
269.9%; and El Salvador, 186.7%.
190.7%;

"Official

will

British

,r

Further

wards

guay, notes in circulation — the
principal measure of wartime in¬
flationary
pressure—showed
an

compared

as

and 10.4% in the Third."

there

Significance is attached by the
study to the fact that "in nearly
every country of Latin America
the rise in demand deposits during
war

purchases,

Mexico.

"Except in Argentina and Uru¬

the

11.3% of the nation's total E-Bond

Chile, 110% in Peru, and 83% in

monwealth and the United States."

G Savings

"It is gratifying to note that
although New York State did not
quite make its E-Bond Quota, it
maintained its position in relation
to the country by accounting for

26

Regarding the rise in prices and
note

E, F and

ference

inflation

rose

in most countries of Latin Amer¬

in

From Washington, Aug. 11, the
Bonds Associated Press said:
— than they
"Post-war
rubber
production
did during the Fourth War Loan.
and
requirements
are
being
From this it may be seen that
studied in London by the United
many private buyers, having ac¬
States, the Netherlands and Great
quired their full allowance of
Britain as a preliminary to agree¬
E-Bonds under Treasury restric¬
ing on a plan for international
tions, turned to other issues dur¬
rubber control.
ing the Fifth War Loan.
Final
"An announcement released si¬
tabulations, show sales of $342,multaneously yesterday in London
316,967 ' in., E-Bonds. against
a
and Washington said that the con¬
quota of $367,000,000.

expansion have not been widely
distributed within each country—

face

-

marketable securities—those other

$1,090,000,000

close to

problems

war

must

some

added:

United Nations, individuals, Mr. Ford said:
survey covering both natural and
"Total sales to individual inves¬
together with restricted imports of merchandise have already given
synthetic rubber. The first pro¬
the 20 nations of Latin America more than $1,250,000,000 worth of tors were higher than in any pre¬
gram of studies has been prepared
foreign purchasing power, according to a study of the area's wartime vious campaign and amounted to and arrangements are being made
trade and economic condition prepared by the National Industrial $889,313,719.
Individuals
pur¬ to
carry out these studies, it was
Conference Board, and made available Aug. 16.
In 1943 alone, Latin chased $86,300,000 more of the revealed."
world

vt

One of the most pressing post¬

a

Booming wartime exports, almost wholly to the

America's trade balance with the

Housing Says
Mortgage Banker

lation

don United Press advices Aug.

Thousands

recovery.
who had

Need Better Rural

at least

On Post-War Robber

Netherlands, it was stated in Lon¬

to

Govern¬

ing at Purdue University at Lafay-i
ette, Ind. Mr. Mahan declared that

Fourth.

road

the

on

bought

people

more

the

and

a

in the Fifth War Loan than in the

put

bonds

of

number
that

industry

fore

post-war rubber problems between
the United States, Britain and the

differ

from
ment.

on

bonds

which reasonable men may

accompanied by W. T.
Phillips of the State Department,
and
also by an advisory group

said

issued indicate

industry
was
cured of its chaotic sickness and

he

be

Fifth War Loan Drive.

Extraordinary conversations on

coal

London
that

and

farms, L. E. Mahan, St. Louis,
Vice-President of the Mortgage

$20,639;000,000 were reported
by Secretary Morgenthau in the

purchase. However, figures on the

bituminous

for

leave

conference

of

and

one

the

,

to

uals

more

department to
for

established in the Fifth War Loan.

enacted by the
has

who

New

proud of the record they have

bond

of

the

in

had designated B. F. Haley of that

.

5,933.8

feel

save

eral weeks ago that the State De¬
partment had made known that it

-

York State have

and

war

lives and suffering."
It was indicated

(7% C. of 1.1,325.9

Ford said:

buyers is not a matter of record,

hasten the end of the

would

"I

home

York "Journal of Commerce" sev¬

191.1

Total

automatically credited to

of-State

pertaining to rub¬
w:
•
impressed with
the urgency of producing
large
military tires in greater quanta
ties," he said. "I believe that by
increasing our production we can

''!)'&•.

came

570.0

mostly corps.. 2,203.3

with funds
State, were either allo¬

other States.

,

*

others—

C notes

\lxkc/o notes 731.1

»•

,

governments.
All

purchased

curities,

3.6

"*•<..
local

and

State

22.3

States

ber.

•

318.6

trust funds

&

response

glad to learn from you

instate price
of

consumers.

"There

that bills are pending in the

nous

of

lions

88.8

1,475.7

cos._

brokers

State's

York

New

enjoyed a reasonable measure of
prosperity. But when the present
boom
market
ends, chaos will

throat competition.

342.3

F bonds
G bonds

and

Dealers

said.

was

E bonds

852.2

Federal agencies

achievement of

sales.

During

nation.

the

Amount

889.3

—_

Savings banks—

wartime
the bituminous ^Coal Industry has
of

Amount of Issue

Investor

•

year.

By Types

By Class of
Individuals

dollars)

of

millions

$5,933,781,391, a quota
123.6%, Mr. Ford

were

REPORT

FINAL

{In

SALES

LOAN

WAR

FIFTH

United

"I

type of security:

York, in making pub¬
results of the drive

ended

which

July 31.

analysis of Fifth War Loan pur¬
by class of investor and

chases

common

and

common

Rubber
offer

pre¬

inter¬

according

to

current analyses issued by Otis &

Co.,

Terminal Tower,

Ohio.

tained from Otis

quest.

Cleveland,

Copies of these may be ob¬
& Co. upon re¬

111

1

■

class

Calendar Of New Security Floiatisns

to

and

A

1

,1.

has registered 35,cumulative' and "partici¬
CO.

FARMS
of '$3

shares

714

MONDAY, AUG.

^

class

B

stock, without par value.
.has offered to holders of its
preferred stock of record July 21 rights
to
subscribe for shares of the new pre¬
ferred at the rate of one share for each
2Vi shares held at $45 per share.
Rights
expire
Sept.
8.
Company
proposes
to
sell
to
the
public any shares not sub¬
scribed.
Net proceeds will be-used, to im¬
pating preferred

Company

working'capital posi¬

the cash and

prove

of

tions

the

and to the acquisi¬
7. No underwriters
1944.
Details in

company

of additional plants.

tion

21,

June

Filed

named.

/"Chronicle," June 29. 1944. ;

J

■

'•

.

■„•'.

ARTLOOM CORPORATION has filed a
statement for 100,000 shares

registration
of

stock

common

common

be

ment for 95,868

shares are to be
are

held.
the

Sept//! 177 Almost
proceeds 7$ill/7be used...to

net

entire

company's ■' preferred
stock
which it is estimated will require approx¬
imately $470,233, any balance will be
to

working

added

supplied

100

issues

to

has

for

than

providing

by

the

agreed
bonds

for

100

the

to
as

pay
3V2s

less

and

not

May

29,

4s.

June

8,

as

"

of

7

Offering—Price to be supplied by amend¬

$5 cumu¬

(no par)

of which 60,000

continued

offered

be

to

bank

million

company

2 shares

series

to

filed

has

Filed

"Chronicle,
' *• 7/

in

common stock (no par).
issued and outstanding and

The shares are

not-

do

represent

share.

Jones &

D.

Edward

St. Louis,

Co.,

principal underwriter. Filed July
Details in "Chronicle," July 27/
77 ' /
' ■•'■. ■■.■■■

named

1944.

17,

financing by the
is $33 per

new

to the public

Price

company.

is

BREWERY

WESTERN

registration statement for

a

shares of

13,506

1944.

registration statement for $450,00(1
convertible 5y2%
bonds,
A, maturing serially from 1945 t»

a

first

CO. has

MANUFACTURING

HANCHETT
filed

loans

retire

series

Address—2450
'

Hunting

Business—Prior

Park

1940

to

Avenue,

was

in $76,365,000

^•-

Registration Statement No. 2-5454. Form
(8-18-44). •
•
;
: 7;
, j :'

;/, .A-2.

for
141,054 shares cf
$1).
Of the total
sold for account of the
company and 62,220 for account of certain
stockholders.
Company's proceeds will be
used to augment working capital and for
other
corporate purposes.;.
Van Alstyne,
Noel & Co., New York, head list of under¬

78,834

and

series C

B,

statement

common

together With $10
and general funds of

used

bonds outstanding

D

tration

':;;-7:7!77:;/-7',7'.:

■

be

Proceeds—To

hold¬

to

-.7,.;,77,--;:

ment.

%)• cumulative v preferreil /stock vtbz;

..Philadelphia,.Fa;;/)/■'/".

7 7>

«

Details

GRIESED1ECK
CO.

plus

cumulative/prior preferredfqreach/one! prihcipal amount at 105% plus accrued
cumulative preferred.:lhtete£t,v;//7';)7^v:'v'-);7. ;7:;,."•>..7/7;/.

capital.
Stroud
Co. are un¬
Filed Aug.. 1,7,19.44.''. Details' in.

/'Chronicle," Aug. 10,", 1944"

underwriters.

are

1944.
1944.

both

York State Public Service Com¬

mortgage

series

stock

are

(par

to be

writers. Others will
!

engaged

ment.

Aug.

Price

1, 1944.

to

be

shares of common stock
shares are reserved for
of $450,000 first
mortgage convertible bonds.
Underwriter
Is, P. W7 Brooks & Co.,. Inc., New York.
Proceeds will be applied to the reduction
of bank loans.
Filed July 20, 1944.
De¬
tails in "Chronicle," July 27, 1944.
'

($1

supplied by amend¬
Filed

public $6 per share.

Details in "Chronicle," Aug.

principally.in
of

bodies andiparts

and,? truck

trailers,

■'Tegistratiorji

45,000

and

1964,

The

par).

issue

THE UTAH RADIO PRODUCTS CO. has
the.manufacturing and sale
10, 1944. 7. .7777/7777 7-.7:\-%7-:;/7/:
for automobile, trucks ("filqd a registration statement for $1,175,and
diversified steel' ;00O,;A 10-year; 4J/2% convertible debentures
DERBY GAS
&
ELECTRIC CORP. has
products in ;the^Automobile industry," /the
and 146,875 shares, ($1 par) common stock
filed a registration statement for an un¬
'p
.a
manufacture and sale of lightweight stain- • for issuance upon Conversion of the debendetermined number of shares of common
statement for 70,000'shares 6f cumulative1
less steel railway-cars and in the manu¬
tnr«& at any time prior to Sept. 16, 1954
stock
(no par).
Proceeds are to be used
preferred stock (par $50).
Part of the facture; of. a variety, of other products for; aerate of 12 Ma shares of common for each) in connection with the
acquisition of the
proceeds will be applied to the retirement marine use.
Now in war- work.:■7
.'•■■■"■ 7.' '• ' ' ''
/ ' $100 in debentures.
securities of the Danbury & Bethel Gas, &
of
$1,558,000
10-year
4V2^> convertible -7 Undcrwriting-TNone named. ■
'C"Addres»—820 Noirth! Orleans Street,; Chi-; Electric Light Co., from Cities Service
.sinking fund; debentures/// Balanee will be
Offering—To be supplied by amendment,
cago 10, Illinois.7. /•; 7'v'7'7-'.v7'i;77Power & Light Co.
Filed July 24, 1944.
available for expenditures on plant or for
Business^/Manufacture
of
radio
parts Details in "Chronicle," Aug. 3, 1944.
c
Proceeds—To
redeem
that
portion
of
other corporate
purposes. I Of the 70,000
the 7% preferred stock not converted to $5
and other related items.
.,,
"•
shares registered, 66,506 are being offered
cumulative prior preferred at-.: 107.71:' or
7 Underwriters—Cruttenden & Co., $200,EMPIRE DISTRICT ELECTRIC CO. has
by the corporation to the holders of its $110 plus accrued dividends from Nov. 1,
000;
Bankamcrica
Company,
$200,000; filed a
registration statement for $10,600,common
'stock; for subscription pro rata
1930.; If there is-no further exchange of MackUbih, Legg & Co., $200,000;.' Paine,
000 first mortgage bonds, 3y2% series dup
at the fate of <16 shares of preferred for
7%
Webber, Jackson & Curtis, $100,000; A. G.
preferred the cost of redemption. of
1969, and 350.000 shares of common stock
each .100 shares of common stock held of
'17,934 shares of such stock will be $3,725,- Edwards & "Co., $1C0,000; Dempsey-Detmer
(par $10).
The shares of stock are issued
orecord at the close of business Aug.'/18,
071.
Proceeds-in excess of amount re-' 6 Co./ $100,000; The First Trust Company
and outstanding and are being offered fo?
:1944.
Subscription warrants will be exer¬ quired to redeem 7% stock will be Used of
Lincoln,
$100,000;
Kneeland & Co.,
the
account
of
Cities Service w Power
&
cisable beginning Aug. 19, 1944, and. will
for workhig : capital.
$100,000;
First
Securities Company of Light Co.
f
\
The net proceeds to be re¬
expire at the close of business Aug., 25,
j
Registration Statement No. 2-5448. Form Chicago, $75,000. \
ceived by Empire District from the sale
1944.
It is, planned to offer. to the em¬
7 Offering—The company's common stock¬
S-l. (8-12-44).
of the bonds, together with the net pro¬
ployees not more than 10,000 shares at the
holders of record Aug. 24, will be offered
ceeds from the sale of 6,500'shares of 5%
same
price during the- same period.
Any
right to subscribe to the debentures In
cumulative • preferred
stock,
par
$100,
SATURDAY, SEPT. 2
.remaining shares will be offered to the
ratio of one $100 debenture for each 25
which
the company
expects -to sell con¬
public at a price to be filed by amendment.
THE
OLD
STAR
DISTILLING CORP.
shares of stock at the rate of 103 % plus
temporaneously with the issue and sale of
The principal underwriters are Harriman
has filed a registration statement for 5,000
accrued interest from Sept. 15, 1944.
Un¬ the bonds are td be
applied to the re¬
Ripley & Co., Inc., Hemphill, Noyes & Co., shares of $100 preferred stock, non-cumusubscribed debentures will be offered to the
demption
at
101%
of
$10,044,900
first
/The First •; Boston Corp., Kebbon, , Mc-: lative and non-participating.
public at the same price.
mortgage and refunding bonds, 5% series,
TCormicfc' &
Co., Lehman Bros.,
Merrill
Address—315
W.
Main
St.,
Louisville,
The company is to pay each underwriter
due March 1, 1952, and to the redemption
:Lynch,
Pierce Fenner & Beane,
Clark, Ky.. a sum equal to $15 for each $1,000 deben¬
;/•:•-•:
at 105 of $851,200 of Ozark Power & Light
Dodge & Co., Eastman, Dillon & Co., HornBusiness—Distilling of spirits: whiskey
ture subscribed to by common stockholders
Co. first mortgage sinking fund 5% bonds
blower & Weeks, and W. E. Hutton & Co.
and alcohol.
and
$30 for each $1,000
debenture pur¬ due March
1, 1952, assumed by Empire.
Filed Ang. 2, 1944.
Details in "Chronicle,"
Underwriting—None named,
chased by the underwriters.
Empire District Electric Co. which is con¬
i.
Aug. 10, 1944.
Proceeds—The
net proceeds,
estimated
Offering—Price to public $110 per share;
trolled by
Cities Service Power & Light
at $1,159,029,
proceeds to co. $100.
are to be used for expan¬
Co.
proposes
to acquire by merger the
iCENTRAL SOYA CO., INC., has filed a
Proceeds
Construction
of
distillery,
sion purposes and as an addition to work¬
properties of Ozark Utilities Co., Lawrence
registration statement for $2,250,000 3 lU %
$250,000; working capital, $250,000.
ing capital.
County Water, Light & Cold Storage Co.
sinking fund .debentures, due Aug. 1, 1959. i
Registration Statement No. 2-5449. Form
Registration Statement No. 2-5455. Form
and Benton County Utilities Corp.
In con¬
The underwriters are Glore, Forgan & Co.,1
A-l, (8-14-44 >.
S-l. (8-18-44),
'
junction with this merger Cities Service
'-.v~
$900,000; First Boston Corp., $450,000; A.;
Power- ■& Light Co'Aiis surrendering all the
G.
Becker & Co., Inc., $300,000;
Bacon,
SUNDAY, SEPT. 3
securities
of
the
constituent
companies
/I
Whipple & Co., Kebbon, McCormick & Co.,
owned by it in exchange for an aggregate
SOLAR
MANUFACTURING CORP.
has
and Reynolds & Co., $200,000 each.
Part)
THE AFFILIATED FUND, INC., lias filed
of
350,000 shares of common stock,
$10
registration statement for 90,000
of the proceeds will be applied to the pur-f filed a
a
registration
statement
for .Jl,000,000 par, of the Empire District Electric Co.
chase, and cancellation or redemption of- shares of series "A" convertible preferred
Both the bonds and stock will be offered
shares of common stock.
stock (par $5).
$1,400,000 aggregate principal amount of
Address—1 Exchange Place, Jersey City
for
competitive bidding under the Com¬
Address—285 Madison Avenue, New York
•first• mortgage and leasehold 4% sinking;
mission's
competitive bidding rule U-50.
2, N. J.
>•; :r;
17, N. Y".•'://
?■
fund
bonds due Nov.
1,
1952.
Balance
Names of the underwriters will be filed by
Business—Investment trust.
Business
Manufacturing
capacitors
will
be
added to working capital of the*
Filed July
Underwriting — Principal
underwriter, amendment.
1, 1944, Details
(fixed condensersi.
,
7
■ ■-//•/■/'/7
;
company.
Filed Aug. 5, 1944.
Details In
In "Chronicle," July 6, 1944.
Proceeds—$575
for
additional working Lord, Abbot & Co., Inc.
/'Chronicle," Aug. 10, 1944.
Offering—$4.28 a share.
Offend Aug. 22, 1944 at 100 and interest. capital; $100,000 for mechanization of fac¬
Proceeds—For investment.
EQUIPMENT FINANCE CORP. filed a
tory operations; $80,000 for readaptation
registration statement for 14,000 shares
Registration Statement No. 2-5456. Form
of plant to peacetime operations.
All ap¬
THE E. KAHN'S SONS CO. has filed a
A-l.
(8-21-44),
......,.':^-'/7^7777;\-//77V7/ 4% non-cumulative series 2 preferred, par
proximate.
registration
statement for 35,000
shares
$100.
Price to the public $100 per share.
Underwriting—Van Alstyne, Noel & Co.
.5%
cumulative preferred stock (par $50).'
Proceeds
for acquisition of
factory and
Offering—Price to be filed by amend¬
DATES OF OFFERINGS
Company offered to holders of 7% cumu-i
warehouse buildings and additional trucks.
lative preferred stock, par $100, the op-; ment.
UNDETERMINED
Filed May 19, 1944. Details in "Chronicle/
Registration Statement No. 2-5450. Form
-portunity of exchanging such holdings for
May 25.
1
We present below a list of Issues
S-l. (8-15-44).
5% cumulative preferred, par $50, on the
whose registration statements were filed
basis of one share of the former for'two
EXCESS INSURANCE CO. OF AMERICA
tvontv
dav« or
more ago,
but whos*
and
one-fifth
shares
of the latter, with]
MONDAY, SEPT. 4
nas filed a registration statement for 48,offering dates have not been deter¬
•adjustment in cash for accrued dividend.
THE MUTUAL' TELEPHONE CO., HONO¬
981
shares
of
capital
stock (par $5).
mined or are unknown
to as.
A total of *8,209 shares of 7% cumulative;
Shares are to be offered for subscription to
LULU, HAWAII, has filed a registration
preferred stock accepted the offer.
Comstatement
present stockholders of record May 31,
fo| 100,000 shares ($10 par)
;pany will" call for redemption at the earli¬
1944, on a pro rata basis at $8 per share.
capital rtock/
ATHEY TRUSS WHEEL CO. has filed a
est call date all -7%
cumulative preferred
Net proceeds will be added to company's
Address—1128 Alakea Street; Honolulu;
registration statement for 71,590 shares of
not exchanged at $110 per share and ac-!
Hawaii.
capital and surplus funds.
Unsubscribed
common
stock '(par $4);) The shares are
crued dividends.
Filed July 22, 1944.
De¬
shares will be sold to Lumbermens Mutual
Businessr-Furnishes Telephone Service.
issued and outstanding and do not repre¬
tails in /"Chronicle," July 27,'1944.
/ $ '
Casualty Co. for investment.
Filed May
Underwriting—To be offered to holders sent
new
financing
by
the.,.company.
Offered—A total of 16,992 shares of 5%]:
29, 1944.
Details in "Chronicle," June 8,
of presently outstanding 500,000 shares of
Brailsford & Co., and C. O. Kalman, Paul
preferred stock was offered Aug. 18 at $50
1944. ■
'
company's capital sto£k at par on basis of R. Doels and Edwin White are; considered
per share and dividend by Westheimer &
1 share for each five held.
That portion to be the principal underwriters.
Filed
•Co., W. E. Button & Co., and W. D. GraFLORIDA POWER CORP. filed a regis¬
not taken
by^stockholders to be sold at July 27, 1944. Details In "Chronicle," Aug.
.dison & Co.
.
,
tration statement for 40,000 shares cumu¬
public auction,
■,,
3, 1944,
7:;;7''■77;).77.;/;:.7;.7: ,77 lative preferred stock (par $100). The
Proceeds—Working capital for purpose
j
NATIONAL -CYLINDER GAS CO. has of making replacements, improvements and
dividend rate will be supplied by amend¬
7 BIRMINGHAM ELECTRIC CO. has filed
filed a registration statement for 35,000
ment.
Net proceds from the sale of the
betterments to) plant.
a
registration - statement for $10,000,000
•shares of .cumulative preferred stock
(par
Registration1 Statement No. 2-5451. Form first mortgage bonds, series due 1974. In* new preferred stock, together with addi¬
$1001, s Proceeds will be added to the cash
tional funds from the treasury to the ex¬
S-l/, (8-16-44)4
terest rate will be supplied by post-effec*
funds of the company to be available for
)
I
tive amendment.
Price to the public will tent required, are to be applied as follows.
general
corporate
purposes.
Pending
be
filed
by
post-effective amendment. Redemption of 28,762 shares 7% cumulaSEPT. 5
.specific- allocation, some of\ the proceeds
tive preferred at $110 per share $3,163,820,
Company is a subsidiary of National Powr
may be used to carry additional receivables
THE
NARRAGANSETT
ELECTRIC / CO.
redemption of 5,940 shares of 7% cumula¬
& Light Co. which is the sole owner of the
and inventories, to increase bank balances
tive preferred at $52.50 per share $311,850;
has filed a registration statement for $31,545,610 shares of its outstanding common
and to pay current liabilities.
Principal
donation to Georgia Power & Light Co. to
500,000, first mortgage bonds, series A,
stock.
The
net proceeds, together with
■underwriters are Paine, Webber, Jackson &
3%, due 1974.') '••.
77"
.
such
additional
cash
from Its
general be used for redemption of certain of its
Curtis,
F.
S.
Moseley
&
Co.,
Chicago,
Address—49
Westminster Street, Provisecurities as provided In recap plan of that
funds as may be required, will be used for
A. G. Eecker & Co., Inc., Dean Witter &
company $1,400,000;
payment to Genera)
ence, Rhode Island.
the redemption, at 101 and accrued inter¬
Co., and Kebbon, McCormick & Co. Filed
Business
Gas & Electric Corp. for 4,200 shares of
Manufacture,
purchase, and
est, of all of the company's first and re¬
Aug. 4, 1944.
Details in "Chronicle," Aug.
sale of electricity for light, heat, power,
$6 preferred of Georgia Power & Light Co
funding mortgage gold bonds, 4V2% series
10, 1944.
•
:;■■;■• \ ,
;7:7v7 i resale and other purposes.
due
1968,
outstanding in the principal $75,600, and expenses $80,000, total $5,Offered Aug. 23, 1944 at 100 per share. ;
Underwriting—None named;
to be of¬ amount of $10,000,000.
The bonds will be 031,270. Stock is to be offered for sale bj

derwriters.

Co,

&

Bioren

not

debentures

the company will submit
competitive bidding.

The New

share,of 7%

the

■

be

!

Proceeds—Proceeds

publicly offered and 35,868

ex-change and! the" basis of

Rights will expire

retire

to be

ers

.then

two: shares

each

for

shares

lative prior preferred stock

stock of record Aug". .28,

Share

to

■/«/

Inc.,

Co.,

than
less

class

shares of class B stock

date

record

a

&

them

amount "of the
shares of

.

given the right to subscribe to the new
stock at $5 per share in the ratio
one

on

amendment.

5

,

common

of

held

CO.

entitling

stock

each

debentures for

whatever gen¬ mission previously had denied the company
permission
eral funds are necessary will be applied to
to
sell
the
$30,000,000
of
bonds
the redemption on Dec, 1,
privately to
insurance companies
1944" of $25,000,000'principal amount of the company's and declared that both the bonds and de¬
deem and retire on or before Jan. 1, 1945,
bentures should be thrown open to com¬
twenty-five year '5% bonds at 105% plus
at 103, plus accrued interest, $300,000 5%
accrued interest.
petitive bidding.
%. ,
7
r
first mortgage sinking fund bonds and at
In amendment filed with SEC Aug.
10
Registration Statement No. 2-5453. Form
105% of par value, plus accrued dividends,
S-l.
(8-18-44). .
;7'7,. ;7/7'7//'7''",/// company proposes the issuance of $30,000,all
of
outstanding
7%
cumulative first
000 general mortgage sinking fund bonds
preferred stock consisting of 838 shares.
due 1969 and $12,000,000 25-year sinking
Underwriters
are
Straus
Securities
Co"-. >v ARMOUR & CO. has filed a registration
fund
debentures
due
1969.
Both
issues
statement for $65,000,000
first mortgage,
Chicago, 19,498 shares and Loewi & Co.,
3V4%, sinking fund bonds, series E, due will be offered for sale by the company
Milwaukee, 19,498 shares.
Filed Aug. 9,
pursuant to Commission's competitive bid¬
Sept. 1, 1964.
v,//
"• -7;
1944. Details in "Chronicle." Aug." 17, 1944.
Address —43rd
St.
and
Racine
Ave.,
ding rule U-50 and names of underwriters
and
interest rates 'will be filed by post
Union Stock Yards, Chicago 9, 111.
THURSDAY, AUG. 31
v 7 Business—Meat packing.
effective amendment.
Underwriters-—Kuhn, Loeb & Co. named
77 the/:edward ? g. budd m^nufacsv
TURING CO. has filed a registration state¬
principal underwriter. -■
:
7.'-- /• ■ /•
BUFFALO BOLT CO. has filed a regis¬

Holders of
1944, will

part.

(no

28

MANUFACTURING

HAMILTON

111

,

purchase $100 principal

new

has
filed a
registration •statement for "38,996
shares of
preferential participating stock
(par $10),
Proceeds will be used to re¬

:,■■■

.

.

A stock or each 8/3

OFFERINGS
ARDEN

807

THE COMMERCIAL & FINANCIAL CHRONICLE

Number 4310

160

Volume

conversion

upon

'•

:V '■•'

.-•

HAYES

.•■;

..

.

,

,

■

'

>4

.

has

CO.

part for the $200,000 expended by it in
pui'chasing such shares.
Porter Associates,
Inc., underwriters.
Details in "Chronicle/*
May: 31.
Filed May 25.
7 7 7 7 *
;; 7.;
INDIANA

has filed

Company proposes to make a

$100).

(par

ELECTRIC CO.

MICHIGAN

&

registration statement for 120,of cumulative preferred stock

a

000 -shares

-

.

:

"

.•

MANUFACTURING

,

registered 100,000 shares of common stock
par value.
Net proceeds will be received
by Porter Associates,
Inc.
The moneys
paid to the corporation • by Porter Asso*
ciates, Inc., on account of the purchase of
said shares will, In the estimated amount
of $187,500, reimburse the corporation in

not

loan

from

City

than

six

York

New

banks

and use

of

tion

more

in the amount of $7,880,000
proceeds for purchase for cancella¬
544 shares of old 7%
and 35,473
6%

old

of

shares

American

from

preferred

Indiana
ft#

of

Electric

&

Gas

Co.

and for redemption and can¬
of 38,731 shares of old 7% pre¬

$3,596,749,
cellation

Indiana

of

preferred

245 shares of old 6%

ferred and

the pub¬

hands of

the

in

now

redemption price of $110 per
share plus accrued dividends.
The cost of
these two
transactions is placed, at $3,-'
at

lic,

the

respectively.

and $4,287,360,

596,749

from

ceeds

be

to

are

Pro¬

preferred and
to the

of the new

sale

stocks

common

applied

the bank loan.
Balance will
general corporate funds of
used to acquire property and
for construction purposes.
The preferred
stock is to be sold subject to the competi¬
tive
bidding
rules
of
the
Commission.

payment

of

included

be

in

and

Indiana

amendment.

The

be

filed

by

price

to

the

will

underwriters

of

Names

offering

and the dividend rate will be sup¬
plied by amendment. ' Filed July 29, 1944.
Details in "Chronicle/' Aug. 10, 1944.
public

—

■

t-FRIDAY,, SEPT.

filed

$250,000

TUESDAY,

,

WHOLESALE

statement

bearing Interest'; at rate-of 4%
and

for
notes,
.

per annum

ten years from
to be sold at their

maturing In five and
Notes

date of issue.

are

value, only to members of the issuing

face

corporation and individual members of its
corporate stockholders.
Proceeds will bo
to increase working capital and re¬

used

bank

duce

June

Filed

loans.

12,

1944.

'/Chronicle/' June 22. 1944.

Details in

MISSISSIPPI POWER & LIGHT CO.
filed

has

registration- statement for $12,COO,mortgage bonds series due 1974.

a

000

first

Ne.t

proceeds from
$2,000,000 of

and

sale or the bonds
promissoryJ notes,' to¬
additional f cash from
may be required, will be

general funds as
used

to

first

mortgage

102 V2

at

redeem

be

will

$15,000,000

the

bonds,

gold

bonds

The

1957.

the

such

with

gether

..

,

registration

a

subordinated .—debenture

a

—-

,

COOPERATIVE

MIDLAND

has

5%

series due
the

under

sold

competitive bidding rule of the Securities
and Exchange Commission and names of
underwriters will be filed by amendment.
1, 1944.
Details in "Chronicle,")
1944.
■
is inviting bids to be received
Aug. 28 on its proposed issue of $12,000,000
first mortgage bonds, due 1974.
Bids will
be received at 2 Rector St., New York 6,

Filed Aug.

10,

Aug.

Company

Y.

N.

up

o'clock noon EWT.

12

to

MORRISON-KNUDSEN
filed

CO.,

INC.,

K

preferred stock, both $100 par
will be offered by Mor-

series L 6%

Securities

value.

rison-Knudsen Co., Inc., at par.
the

of

has

registration statement for $200,000
5% preferred stock and $300,000

a

series

issue not

sold by company

through

sold

Wegener

Any part
officials
& Daly,

will

be

Inc.,

Boise, Idaho, as underwriters,
Com¬
in
an
amendment filed June 10

pany

proposes
to offer $100,000 4%
demand certificates and $100,000
Y certificates at $100.

ing

capital.

Details in

Filed May

31.

PUBLIC

23.

SERVICE

series

F

4% series
Proceeds for work¬

"Chronicle," May

'
CO.

OF OKLA.—$1,-

.

.

.

.

—

,

fered

of

statements

days
in

ago,

which

on

normal

filed less

were

registration

dates

to

statements

become

less accelerated at

twenty

than

according

grouped
course

registration

whose

issues

effective,

will
un¬

the discretion of the

" V,

SEC.

bidding.

competitive

Proceeds

NEW FILINGS
List

at

—

Proceeds

to

be

offered

applied

first mortgage bonds, due 1966,
release by SEC. - No mention

3 y2 %

A,

according to
made

in

registration statement.

Registration Statement No, 2-5452. Form
(8-17-44).; "
.
„•"*'/■ f-;.

A-2.

.

.

-iibft'

*

■

•

WEDNESDAY, SEPT. 6
filed

PUBLIC

has

filed

$250,000
fund

the

10-year 6%

note.

vator,
8

with

1944.

will

a

real

the

of
of

000

ELEVATOR

for
subordinated sinking

Proceeds

purchase

construction

house.

TERMINAL

registration statement

a

a

one

three

million

No underwriter named.
Details

in

used

be

for

and

the

bushel

ele¬

estate

million

bushel

head

Filed Aug.

"Chronicle," Aug.

1944.




17,

terminate
to

number

be

of

of class A
conversion.
In¬
amendment.
Street, New York

shares

available for

terest rate will be supplied by
Address—60

13, N.

Hudson

Y.

Business—Furnishing telegraph service.
Underwriters—To be supplied by amend¬
ment.

Offering—Subscription warrants will be
to
present holders of company's

issued

the

company for competitive
to the Commission's com¬

company

name

the

rate on
1944. Details in

dividend

Filed July 21,

the stock
"Chronicle,'

July 27, 1944.
BROOKLYN
filed

a

UNION GAS CO. June 29,
registration statement for

FIRE INSURANCE CO.
registration statement for 50,-

GERMANTOWN
has

filed

a

(par

sidiary)
will

on

share for share basis.
Bonds
for sale at competitive bid¬

be offered

Registration effective Jan. 10, 1944.
Filed Dec. 21, 1943. Details in "Chronicle,"
March 16, 1944.

ding.

VERTIENTES-CAMAGUEY
CUBA.-—696,702
shares

OF

SUGAR CO.
of common
Of shrs.

stock ($6.50 par), U. S. currency.

registered, 443,850
are outstanding
and
owned by the National City Bank, N. Y.
Several underwriters have agreed to pur¬

chase $1,663,500 of
deben¬
first mortgage (col¬
planned 000 shares of common stock, $20 par, and lateral) 5% convertible bonds of company,
outstanding debt by voting trust certificates for said stock
due Oct. 1, 1951, owned by National City
the
issuance and
sale to the public of Policyholders of Mutual Fire Insurance oi Bank, N. Y. Underwriters propose to con¬
Germantown
are
to
have
pre-emptive
$12,000,000 debentures and the concurrent
vert these bonds at or prior to closing and
issuance and
private sale of $30,000,000 rights to subscribe for the common 3tock the 252,852 shares of common stock which
at
$20
per
share in proportion to the
general
mortgage
sinking fund bonds,
are received by
the underwriters on such
respective premiums paid by them upon
3%% series, due Aug. 1, 1969.
conversion, together with the 443.850 shra.
insurance policies issued by Mutual.
Vot¬
C. E. Paige, President of the company,
previously mentioned, will make up the
ing trust certificates representing share?
announced Aug. 3, 1944 that company had
total stock to be offered. Harriman Ripley
not subscribed will be offered to the gen¬
entered into a firm agreement with Halsey,
& Co., Inc., N. Y., principal underwriter.
eral public at the same price.
All stock¬
Stuart & Co., Inc., for the sale of the pro-*
Filed Mar 29, 1944. Details in "Chronicle,'
holders will be asked to deposit shares in
posed $30,000,000 of mortgage bonds and
April 6, 1944.
the voting trust for a period of 10 years
$12,000,000 of debentures.
Halsey, Stuart

$12,000,000
has

registration statement for $24,603,convertible debentures and an inde¬
a

stock

by

pursuant

petitive bidding Rule U-50.
The names of
the
underwriters will be filed by posteffective amendment.
Filed July 22, 1944,
Details in "Chronicle," July 27, 1944.

1941

SUNDAY, AUG. 27
CO.

sale

>

WESTERN UNION TELEGRAPH CO.

ALVA

to

redemption of company's outstanding series

pursuant to Commission'r
competitive bidding Rule U-50, and names
of underwriters will be filed by post-effec¬
tive amendment. The succesful bidder wiL
the

5%
cumulative preferred stock
$100) and $6,600,000 first mortgage
bonds, series A 3V2% due Feb. 1. 1971.
Stock Is for exchange of $6 preferred of
Southwestern
Light & Power Co.
(sub¬
500,000

tures

25-year sinking fund
1969. ■* Company

due Aug. 1,

to refinance

its entire

vv*.i

<

hvw, immvsjfavk

'

Thursday, August 24, 1944

FINANCIAL CHRONICLE

THE COMMERCIAL &

608

Corp. Con v. Pfd.

Carrier:
llAnover 2-0030

REMEMBER...

Teletype—N. Y. 1-971

:

New

England Pub* Serv.
Fid. Plain

Firm Trading

Market*

f;

; '

our long experience, up-to-date trading

FOREIGN SECURITIES
' all issues

r

make it possible for us to give you prompt.

..

FOREIGN SECURITIES

' *

*

p
'
"

'

OVER-THE

*■

SPECIALISTS

M. S: WlEN :& Coi

COUNTER SECURITIES

-

On "Governments"

Our Reporter

'

v

'

a

',r?;

9-15-72/67

UP

^

45

<

s

.

...

Canal bonds due in 1961.

The

...

to

have been

5

YORK

-

.

v

,

Stevens Sees

new

1-576

york

8,000,000 Vacuum

Cleaner Sales In Post-War Period
The

|§|MBTILATED§f|..

war

and women now in the armed forces and war work when

Members

^

said

He

the'

Com¬

Eureka

antici¬
pates/an in¬

and

women

and

forces

pany

Stevens

the armed

in

now

war

.

With

the greater part cf these obligations will have been retired
through call or maturity. , . . The following table shows the
each year through 1951:
1949_
$2,277,502,050
1945
$1,755,272,500
1950——•
1,185,841,200
1946..
2,343,580,500
1951
3,500,169,250
1947——
1,460,018,700-

tion
year

post-war
com¬

as

pared with the
last

pre

war

-

...

ond

2,245,905,400

reported

together with

is

^reserves

reported

after

the

that Congress in the not distant future may

is

war

the

return

lieve

Class A;
$1.25 Cumulative Participating

v::r,

.•

•

.

be

the

of

interest

the

jobs faster after the

1944, reported
of securities

war

of

their

market

long-term
orderly.

.

10

office

post

boston

Tel.* HUB .1990

programs."
-.:vy:.///////'
questionnaires circu¬
lated to distributors to ascertain
their

requirements

■

1

.

mass: • ' n,;

9,

y V

'

/

square *

:

.

Teletype

work

out

procedures

sales

new

for men

The Business

J

are

Man's Bookshelf 1
Post

and

Clement

"Many of the men and women
will be making and selling
vacuum cleaners after the war are

Box

who

fighting at battlefields
world today," Sevens
a responsibility
our industry is ready
back."

;

.

.

y/>

of

Survey

War

Moore

—

Drug

the

Industries

Chemical

that will be of maximum value.

holdings
showing
utilizing the strong market demand to dispose
holdings and at the same time keeping the

.

request

Detailed

decline of more than $93,000,000 in the
a maturity of more than five years,

a

with

that Federal is still

W.

—

National Paper
Association,

Manufacturers

Fidelity - Philadelphia
Building,
Philadelphia,. Pa.-r-paper.
:
Post War Survey of the

Industry

—

W.

Clement

National Paper

Box Manufactur¬

paper.

Post

,

Philadelphia

Association,

ers

Hosiery,
Moore—-r

*

War

of

Survey

the

Sta¬

tionery and Greeting Card Indus¬

try—W. Clement Moore—National
Paper

Box

Manufacturers Asso¬

•

.

ciation, Philadelphia—paper.

this country from abroad should

resumed, which will also add to the expansion of
./.
* •

in

developing sales training
and related promotional plans to
fit into the distributor's own post¬

all over the
said.
"We
to see that
plant reconversion and resumption
of merchandising," Stevens said.
to provide
"Planning now will make more jobs for them when they come

.

that heavy shipments of gold to

so

is

\

Circular sent upon

LERNER & CO.

cleaners," he said, "and

are

we

Stock

■"

Market

such interest

dealers shown

vacuum

have

lation, which has passed the $23,000,000,000 mark, having more than
doubled since the war.
Likewise, the favorable balance of pay¬
ments of the United States is likely to be large in the post-war years,
.

T. Stevens

it

in

bringing
up to 80% returns, Stevens said,
100%
over
1941.
'/''/yyy, giving ample evidence of their in¬
terest and helping the company to
"While our

public, : our
dealers
and
em¬
ployees to prepare now for rapid

of currency from circu¬

flow

show

increase of

manufacturing facilities will con¬
tinue to be completely engaged in
making essential war materials so
long as they are needed, we be¬

REQUIREMENTS

be
asked to approve new legislation that would permit the Board of
Governors of the Federal Reserve System to raise reserve require¬
ments above the present maximum levels. ... Despite the great ex¬
pansion of bank deposits that has taken place during the war, present
indications point to a further major increase in both reserves and
deposits of the banking system during the post-war period, and
action is being considered to offset the threat of inflationary condi¬
tions that may confront the country, after the ending of the war. ...
The principal reason for expecting an expansion in member banks
It

pro¬
year

should
an

...

RAISING RESERVE

sec¬

ance

•

war

full

duction

their tax features, makes them very

been defined.

The

year.

—

George

\

Dividend Arrearage

a

Riverside Cement

work."

that Eureka
is carrying on an "after hours"
crease of 25%
program on product design, engi¬
or more in the
neering,
comprehensive
market
production of
studies, and dealer surveys as a
vacuum clean¬
part of its post-war planning.
ers in the first
"Never before have home appli¬
full
produc¬

desirable obligations. . . . How¬
ever, it was pointed out that until future tax problems have been
clarified, the market for these securities will be uncertain, since
the amount of adjustment, if any, that must be made from present
levels cannot be definitely indicated until post-war tax levels have

Y. 1-177#

Teletype N.

'

amount due or callable

of this type of security,

Ass'n

Dealers

Outstanding Cement Stock

An

by the company.

years
either

decreasing supply

Security

Y.

Dlgby 4-4832

Phone

•

The

N.

Exchange PL, N. Y. 5, N. Y.;

40

is won, according to

tax-exempt obligations at the end of 1944 will
$22,170,743,500, and by the end of 1951 this figure will
reduced to $7,402,453,650, indicating that in the next seven

1948--——

I:

/*.

.

S. H. Junger Co;

G. T. Stevens, Vice-President of Eureka
Vacuum Cleaner Company, who forecast production of 8,000,000 units
in the first four postwar years on the basis of a market study made

the

Inquiries invited '

/y .;.y .;.

cleaner industry will be ready to provide jobs for

vacuum

many men

COUPONS MISSING

Bell Teletype

telephone

Enterprise 6015

partially

amount

NEW

STREET,

philadelphia

>"

SCHEDULE

MATURITY

NASSAU

bonds due December 15-54/44

they were issued in 1924 during
President Coolidge's administration) on next Dec. 15, the amount
of marketable wholly tax-exempt and partially tax-exempt Govern¬
ment bonds will be reduced to $23,697,670,000. i . . This figure will
be sharply decreased through maturity or call in the next seven years,
when more than two-thirds of the presently outstanding issues will
be extinguished, provided there is no change in the policy of the
Government of retiring these issues at maturity or call date, which¬
ever may be earlier.
The wholly tax-exempt issues .following
the elimination on Sept. 15, next, of $283,006,000 of the 1% notes
will be reduced to $913,954,420, of which $718,011,700 will be retirable on March 15, 1945.
By next spring the totally tax-free
obligations will have practically disappeared, with the remaining
outstanding issues consisting of only $28,894,500 of the 3% conver¬
sion bonds due in 1946 and 1947, and $49,800,000 of the 3% Panama
.

BIDS MADE ON BONDS WITH

York Security : Dealers Association

R Ector 2-3000

(known as the Coolidge 4s, because

,

New

telephone

#

of the 4%

retirement

the

With

Members

the 2^%'.due
's
' '
gf

part of the proceeds going : into

TAX-EXEMPTS DRYING

1-1397

Y.

Teletype N.

Company
:c //y- -v'//

-/v: / vincorporate?)

(Continued from page 781)

obligations with

Ass'n.

HAnover 2-8780

25 Broad St., N.Y.

CHICAGO =l_

Kobbe, Gearhart
5

Y. Security Dealers

Members N.
1

New York 4, N. Y.

AFFILIATE: CARL MARKS & CO. Inc.

1

F. Brill: Warrants

A. C.

v

=======

App.

efficient service in■»'

(Actual Trading Markets, Always):

50 Broad Street

/

Electrol, Inc.

f-ARL MARKS & no INC.
.

Bendix Home

facilities, and well-trained staff

and

I

.

'Majestic Radio & Tel.;

COMPOSITION

member banks

OF

RESERVE HOLDINGS

Secondary Reserves and the In¬

Federal did not
$15,231,- vestment of Wartime Deposits —- !
Frederick W. Marriner—Bankers
Wartime increase in currency in circulation has been offset by 445,000 on Aug. 16, 1944, or an all-time record high so far. . . . How¬
^
large purchases of Government securities by the Federal Reserve ever, the holdings of U. S. Government securities by Federal have Publishing Company, 465 Main
shown a noticeable 'trend toward the shorter obligations and on
Banks, who in turn could counteract excess reserves that would
Street, Cambridge 42, Mass. —
result from the return flow of currency to the banks after the war, Aug. 16, 1944, about 88% of the entire portfolio consisted of obliga¬
/V/-C: ///'v/g-v1';
tions with a maturity of two years or less with 6% being in securities paper—$1.50. ■'
through liquidation of these holdings, .i. Nevertheless the Treasury
with a maturity of from two to five years and the remaining 6%
will be confronted with a vast problem of refunding as well as the
International Aspects of War¬
need for financing further deficits, and the Reserve Banks may not consisting of issues with a maturity of over five years. . . .
time Monetary Experience—Rich¬
It is indicated that Federal, in improving its liquid position, „
be able, to sell their Government securities freely without embar¬
reserve.

.

RESERVE

•

.

>
Accordingly, it is indicated that the Fed¬
will seek new legislation to give them greater
flexibility in dealing with problems that may develop in the post¬

rassing the Treasury.

period.

.

is

.

a

part

of the

increase

in

time when through the

excess

'/

■'

Pressurelube, Inc.
Giant Port. Cement Arrears

Bank

and

Insurance

in

a

run-off of

position to offset at least

reserves

that will result from ';1

ard

A.'Lester

—

of

Department

Economics and Social Institutions,
Princeton

Princeton,

University,

Canadian

Our

Reporter's

W. T. BONN & CO.
Broadway
Telephone

New York 5

COrtlandt 7-0744

Teletype NY

t-886




Utility

Railroad
Real

Securities

S

Late

Data

on

Each

Company

Available on

Empire Steel Com.

Request

Governments..... 781

Report...!....,.,
Securities........

Securities

Estate

STRUTHERS WELLS CORP.

788

Reporter on

,

Davis Coal & Coke Com.

ELASTIC STOP NUT CORP.

and Notes......... 804

News

Our

•

Quaker City Coid Stor. 5s

782

793

Mutual Funds

'

continuing interest in—

MARYLAND DRYDOCK CO.

Stocks........ 790

Securities

Public

a

N. J.—paper. ''

to the banks.

Pag®

V

New1 Security Flotations 807

of

Municipal

L. H. Gilmer

We have
-

Broker-Dealer Personnel Items......
Calendar

Illinois Power Arrears

the return flow of currency

ended Aug. 16,

INDEX

Eastern States Pfd.

Bell

getting prepared for the

short maturity obligations it will be

.

The 12 Federal Reserve Banks for the week

120

holdings of the system, which amounted to

decrease the total

BUYING

eral Reserve System

war

Liquidation of the longer term obligations by

783

784

Securities.

Salesman's Corner (The). 790

Tomorrow's Markets—Walter

Whyte
1

CRUTTENDEN Sl CO.

782
783

.........

I

Members

CHICAGO
De?rhorn 0500

Teletype
CG 35

784

and Chicago

New

York

209

South LaSalle

Stock Exchanges
LOS ANGELES

CHICAGO

Street

4, ILLINOIS

034

So.

Hiil, Thompson & Co., Inc.
Markets

Spring St.

Telephone

Trinity 6345

120

and Situations

for Dealer*

Broadway, New York S

Tel. REctor 2-2020

Tele. NY 1-2660